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A TREATISE

FRAUDULENT CONVEYANCES

CREDITORS BILLS.

BY

FREDERICK S. WAIT,

OP THE NEW YORK UAR,

Author of "Insolvent Corporations,1'1 "Trial of Title to Land," etc.

THIRD EDITION.

Revised and Enlarged.

NEW YORK

BAKER, VOORHIS & COMPANY

1897

T

Copyright, 1884,
By Frederick S. Wait.

Copyright, 1889,
By Frederick S. Wait.

Copyright, 1897,
By Frederick S. Wait.

HPAMV,

ALIIANY, H. V.

£

ft

Gfbso

To the Memory

of

DANIEL G. ROLLINS.

687513

PREFACE TO THIRD EDITION.

In this edition much fresh matter has been embodied
in the original text, a number of new sections have been
written, and the citations of authorities increased several
thousand cases over the number contained in the former
edition. Over one hundred and eighty pages of entirely
new matter has been written for this edition. Special
efforts have been put forth to utilize the latest import-
ant authorities bearing upon the topics discussed. Most
of the old questions have been fought over in the courts
since our last edition. The multitude of recent cases
involving fraudulent alienations and covinous schemes
devised to defeat the claims of creditors, demonstrates
how important and far-reaching the subject under con-
sideration has become. Sometimes a creditor's entire for-
tune is dependent upon a correct exposition of the statute
of Elizabeth. The writer is confirmed in his early convic-
tion that the policy resulting in a relaxation of remedies
against the person which an enlightened civilization seemed
to demand, has created a numerous and very obnoxious
class of what may be called professional fraudulent debt-
ors. The spendthrift trust cases now so numerous reflect no
credit upon the body of our law. The policy of enlarging
statutory exemptions ; of depriving creditors of the right
to resort to powers as assets ; of upholding shifting liens

vi PRE1 Ail: TO THIRD EDITION.

upon personal property ; of shielding debtors with an
undeserved mantle of presumptions; and of exacting
explicit proof of notice sufficient to charge alienees with
bad faith — is certainly working injustice to the creditor
class.

The aim of this treatise is to furnish suitors with a
practical guide in this kind of litigation. The earlier
statutes and decisions concerning fraudulent alienations
to defeat creditors have been noticed ; the debtor's rights
and interest in property available to creditors have been
considered ; and the different forms of remedies or of pro-
cedure which may be invoked either at law or in equity ;
the status essential to entitle a creditor to maintain a bill ;
questions of parties, complainant and defendant ; of plead-
ing ; the form and effect of the judgment ; and the rules
regulating provisional relief, reimbursement and subroga-
tion have been treated, the discussion embracing- both
chancery practice and the reformed procedure.

The discussion, however, has not been limited to the
details of practice or procedure. Chapters have been
devoted to the subjects of intention, consideration, and
indicia of fraud ; to the important questions relating to
change of possession, and generally to evidence and
defenses as appertaining to these suits. The rules appli-
cable to frauds upon creditors springing out of the rela-
tionship of husband and wife, and relative to covinous
ral assignments and fraudulent chattel mortgages,
have been examined, and the doctrine of spendthrift trusts
discussed. Special pains have been taken in the treatment
of the law of notice, actual and constructive, as applied
1 1 - our subjei t .

PREFACE TO THIRD EDITION. Vll

One of the chief aims of a work of this kind is to bring
side by side the decisions in different States upon kindred
questions and construing similar statutes. Federal authori-
ties have been frequently quoted, cited, and relied upon,
because more universally accredited, and in pursuance of a
belief that such a policy tends to render the body of our
law more symmetrical and harmonious. Still, the great
mass of the decisions collated and discussed has been drawn
from the courts of last resort in the various States.

The writer acknowledges the valuable assistance of
Adolph L. Pincoffs, Esq., and Paul M. Goodrich, Esq.,
both of the New York Bar, in preparing this edition.

No. 10 Wall Street,
New York, October^ 1807.

CONTENTS.

FRAUDULENT CONVEYANCES AND
CREDITORS' BILLS.

CHAPTER I.

PAGE

Introductory Observations. — Growth of the Law con-
cerning Fraudulent Conveyances- — Phases of the
Subject, ......... i

CHAPTER II.

Property Susceptible of Fraudulent Alienation. — Assets

Available to Creditors, ...... 53

CHAPTER III.

Creditors' Remedies, ....... 96

CHAPTER IV.
Status of Attacking Creditors, ..... 139

CHAPTER V.
Existing Creditors, ........ 180

CHAPTER VI.
Subsequent Creditors, ....... 193

CHAPTER VII.
Who may be Complainants, ....-• 213

X '"'iXTENTS.

CHAPTER VIII.

rPAGE

Par i ii - Defendant, . . . . • . . . 249

CHAPTER IX.

[PLAINT, . . ■ • • • . . . 270

CHAPTER X.

111 l'i v.\ or Answer, ....... 300

CHAPTER XL
me Judgment or Decree, . . . . . -311

CHAPTER XII.
Provisional Relief. — Injunction. — Receiver. — Arrest, . 331

CHAPTER XIII.
Reimbursement and Subrogation, ..... 340

CHAPTER XIV.
Intention, . . . . . . . .351

CHAPTER XV.
01 R \tio\\ ......... 373

CHAPTER XVI.
Indicia or Badges of Fraud, . . • . . 398

CHAPTER XVII.
Change 01 Po ession. — Delivery, . 442

CHAPTER XVIII.

Evi DENCE,

473

CONTENTS. xi

CHAPTER XIX.'

PACE

Defenses, .......... 505

CHAPTER XX.

Husband and Wife. — Fraudulent Marriage Settlements, 522

CHAPTER XXI.
Fraudulent General Assignments, ..... 546

CHAPTER XXII.
Fraudulent Chattel Mortgages, ..... 617

CHAPTER XXIII.
Spendthrift Trusts, ....... 636

CHAPTER XXIV.

Bona Fide Purchasers. — Actual and Constructive No-
tice.— Fraudulent Grantees, ..... 665

CHAPTER XXV.
Preferences, ......... 703

CHAPTER XXVI.

Conveyances Valid between the Parties. — Relief to

Defrauded Grantors, . . • • • .716

CHAPTER XXVII.
Jurisdictional Questions. — Conclusion, .... 738

TABLE OF CASES

{References are to fages.~\

Aaronson v. Deutsch, 565.
Abbey v. Dewey, 15.

v. Deyo, 94, 531, 532.
Abbot v. Johnson, 288.
Abbott v. Goodwin, 630.

v. Tenney, 40, 67, 106, 107.

v. Wood, 47.
Abegg v. Bishop, 221, 233, 597, 602,

603, 706.
Aber v. Brant, 187.
Abercrombie v. Bradford, 558.
Abney v. Kingsland, 469, 497.
Abraham v. Ordway, 511.
Acer v. Westcott, 673, 675.
Acker v. Leland, 299.

v. White, 349.
Ackerman v. Gorton, 79.
v. Hunsicker, 391.
Ackworth v. Kempe, 520.
Acme Lumber Co. v. Hoyt, 581.
Adams v. Davidson, 217, 242, 428, 492,

493. 495,

v. Edgerton, 538.

v. Fassett, 297.

v. Franklin, 475, 476.

v. Hull, 396.

v. Way, 154.
Addington v. Etheridge, 619.
Addison v. Bowie, 242.
Adee v. Bigler, 149, 171, 332.

v. Cornell, 563.
Adler v. Apt, 406.

v. Cloud, 613.

v. Ecker, 137, 550, 558.

v. Fenton, ior, 117, 143.

v. Milwaukee P. B. Mfg. Co.,

253-
Adsit v. Butler, 140, 148, 157, 161, 176,
177, 178, 271.
v. Sanford, 165, 271.
/Etna Ins. Co. v. Johnson, 15.
^tna Nat. Bank v. Fourth Nat. Bank,
81.
v. Manhattan Life Ins. Co., 51,

67, 68.
v. U. S. Life Ins. Co., 51, 57, 541.

Ager ?'. Duncan, 722.

v. Murray, 71, 73
Akersz/. Rowan, 4S1.
Albany City Bank v. Schermerhorn,

709.
Albany & R. I. & S. Co. v. Southern

Agr. Works, 615.
Alberger v. National Bank of Com-
merce, 703.
v. White, 357.
Albert v. Back, 298.
Albertoli v. Branham, 278.
Alden v. Gregory, 282.
Aldrich v. Blake, 348.

v. Earle, 490.
Aldridge v. Muirhead, 94, 508, 531.
Alexander, In re, 410.
v. Alexander, 95.
v. Caldwell, 489.
v. Crittenden, 524.
v. Gould, 151, 184.
v. Pendleton, 509.
v. Quigley, 264.
v. Todd, 430, 468.
Alkire v. Alkire, 544.
Allan v. McTavish, 19.
Allen v. Berry, 109, 133, 340, 344.
Center Valley Co.. 102.
Cole, 304.
Cowan, 459, 463.
Craft, 640.
Fortier, 497.
1 [alliday, 697, 702.
v. Kenned}', 704.
v. Kinyon, 353.
7'. Kirk, 436.
t. Massey, 47, 136.
7'. Montgomery, 230.
v. Mower, 302.
7'. Rundle, 4(1, 372.
7'. Smith, 465, 4(16, 506.

. Steiger, 214, 454.
7'. Stingel, 675.
7\ Thomas, 8 1 .
7'. Vestal, 26 |.
v. White, 640.

XIV

:.'.;:. I IF CASES. [are towages.

Vllenspach v. Wagner, 214.
Ulentown Bank v. Beck, 4,|S-
■
1 . . in, I 17, 717, 724.
. \\ eller, 251, :
Allvn .-. Thurston, 155, 177, 270.
Ahum 1 . Leper, 14".
Rowley, 1

222, 438.
Alton .- . Harrison, 411. 41 -•.
Altrii ' tpeheart, 396.

Amblei v. Choteau, :
Amer. Brewing Co. McGruder,

Amer. Exch. Hank v. Inloes 5S1.
Amer. 0.1k Leather Co. r. i
619.
v. Wyeth H. & M. Co., 620.
Amer. Sugar Ref. Co. v. Fanch<
Amer. Union Tel. Co. v. Middle ton,

73S.
Ames, Ex parte \ 391, 411, 714.
; . Hlunt, 560, 592, 717.
v. Gilmore, 10, 415.

ir, 29, 317, 339, 518.
Amherst's Trusts, hi r*, 647.
Amnion's Appeal. 210, 437.
Amsden v. Manchester, 486, 487, 501.
Amy v. Manning, 337.
Anderson v. Bli 682.

v. Bradford, 168, 169.
v. Briscoe, 315.
• ioks, 470.
iry, 643.
'.inn, 379.
. Etter, 47, 669.
mith, 56.
714.
Pilgrim, 115.
v. Radcliffe, 247.
v. Reed, 338.
. . Roberts, 7. 47-. 70.,.

Wheeler, 517.

Andrew v. 1 linderman, 226.

Ami re..

Marshall, 45.

V. V.
\ndruss v. Doolittli , 228,

Vsh, 133.
Annih -■. Annin 261, 294.

' '.'. ',. Ward,

( 1 Wall. Jr. 10;

' Lamp

Chii

Anthracite Ins. Co. v. Sears, 5S.
Antrim v. Kelly
Apperson . . Burgett, 318, 415, ,
Appolos v. Brady, «
Arbuckle Bros. Coffee Co. v. Canity,
140.

V. Werner, [64, 1 70.
Archer v. Lapp, 414, 500, 501.

■■■ Long, 435.

co Oil Co. v. North Amer. Oil &
M. Co., 615.
Ardis v. Theus, 523.
Arglasse r, Muschamp, 738.
Ai [edge In ;-<-, 231.
Armtield v. Arm field, 383.
Armington v. Ran, 246, 717.
Armitage v. Mace, 530.
Armory v. Delamirie, 500.
Armstrong v. Carr, 390.

v. Dunn, 217.

v. Holland, 595.

v. Lachman, 498.

v. Sanford, 338.

v. Scott, 310.
Arnetl v. Coffey, 284.
Arnholt v. Hartwig, 66S 671.
Arnold v. Arnold, 290.

7'. Hagerman, 379.

v. Second Nat. Bank, 388.
Arnot v. Erie Ry. Co., 396.
Arn wine v. Carroll. 65.
Arthur v. Commercial & R. R. Bank,
33, 480, 556, 576.

v. Griswold, 502.
Artman v. Giles, 101, 113, 141, 260.
Arundell v. Phipps, 446.
Arzbacher v. Mayer, 639.
Ashcroft v. Simmons, 449.

v. Walworth, 73, 74.
Ashfield v. Ashfield, 59, 76.
Ashhurst v. Given, 650, 662.
Ashhurst's Appeal, 694.
Ashmead v. 1 lean, 363.
Aspden -■. Nixon, 1 54.
Aspinall v. Jones, 117.
Astor v. Wells, 357.
Athey v. Knotts, 60.
Atlantic Nat. Bank v. Tavener, 524,

525. 704-
Atty-( ren'l v. Brown, 305.

v. Corporation of Poole, 260.
7'. < j38.

■ Day, 337.

i Windsor, 500.
Atwood .". Impson, [90, I

1 Exch. I tank v. Fitch, 704, 706.
Augusta Sav. Bank v. Stelling, 740.
Aulman v. A ulman, 593.
Aultman & T. Co. v. Pikop, 54.
Aurand

ows, c 18.

1 lank, 4S3.
v. Morris, 107.
?'. Winston, 720.

References'] TABLE OF CASES. [are to pages.

XV

Averill v. Loucks, 611.
Avery v. Hackley, 267.

v. Johan 1, 322, 688.

v. Judcl, 247.

v. Street, 403, 468.
Ayres v. Hasted, 409.

v. Scribner, 9.

Babb v. Clemson, 416, 463.
Babcock v. Eckler, 16, 22, 30, 187, 188,
192, 205, 208, 351, 369, 377, 524, 534.

v. Middlesex Sav. Bank, 483.
Bachman v. Lawson, 552.

v. Sepulveda, 264, 318, 329.
Bachrack v. Norton, 594.
Backhouse v. Harrison, 687.

v. Jett, 17.
Bacon v. Home, 614.

v. P. Brockman Com. Co., 632.

v. Scannell, 461.
Badger v. Badger, 282, 2S3, 284, 512.

v. Story, 229.
Baer v. Rooks, 11, 549, 558, 566.

v. Wilkinson, 563, 709.
Bagley v. Bovve, 590, 605, 606.
Bailey v. Bailey, 183, 198, 222.

v. Burton, 149, 150.

v. Glover, 284, 513.

v. Lane, 117.

v. Mills, 564.

v. Ryder, 294, 329, 739.
Bailie v. McWhorter, 654, 660.
Bainton v. Ward, 76, 77.
Baird v. Baird, 396.

v. Mayor, etc., of N. Y., 10, 566.
Baker v. Bartol, 218.

v. Bliss, 674, 680, 686, 688.

v. Connell, 396.

v. Gilman, 184, 211, 212, 727.

v. Humphrey, 37.

v. Keiser, 659.

v. Kelly, 372.

v. Lyman, 128.

v. Palmer, 518.

v. Pottle, 420.

v. Union Mut. Life Ins. Co., 396.
Baldwin v. Buckland, 593.

v. Cawthorne. 720.

v. Flash, 633, 634.

v. Freydendall, 436.

v. Hale, 517,

v. June, 343, 345,

v. Martin, 285.

v. Peet, no, 553, 577, 600.

v. Rogers, 34, 92.

v. Ryan, 176.

v. Short, 340, 342, 347, 373, 375.
Ball v. Campbell, 394.

v. Hancock, 640.

v. Loomis, 450, 551.

v. Slaften, 232, 233, 553.

v. Slafter, 229
Ballentine v. Beall, 149, 150, 215, 220.
Ballin v. Loch, 154.

Ballou v. Jones, l6l, [68,

Balto. & ("). R. R. Co., A., parte, 741.

v. Hoge, 430, 499.
Bamberger v. Schoolfield, S, 10, 12,

365, 398> 45S, 47», 7'J5-
Bancroft v. Hlizzard, 357.

v. Curtis, 533.
Bane v. Detrick, 618.
Banfield v. Whipple, 354, 705.
Bank v. Brier, 347, 620.

v. Cooper, 229.

v. Forney, 64.

v. Gilmer, 402, 414.

v. Harris, 170, 171, 259.

v. Kennedy, 262.

v. Martin, 584, (107.
Bank of Commerce v. Fowler, 669.

v. Payne, 553.

v. Schlotfeldt, 7.
Bank cf Georgia v. Higginbottom, 411.
Bank of Leavenworth v. Hunt, 619,

7U-
Bank of Middlebury 7'. Rutland, 4^4.
Bank of Rome v. Haselton, 216.
Bank of Silver Creek v. Talcott, 8, 607.
Bank of the Metropolis v. Guttschlick,

81.
Bank of the U. S. v. Housman, 188,

191, 419, 468.
Bank of Utica v. City of Utica, 328.
Banner v. May, 431.
Banning v. Sibley, 549.
Bannister v. Phelps, 358.
Baptist Church v. Brooklyn Fire Ins.

Co., 496.
Barbarin v. Saucier, 132.
Barbour v. Conn. Mut. L. I, Co., 57.

v. Priest, 694.
Barhydt v. Perry, 208.
Barker v. Barker, 165.

v. Bradley, 81.

v. Davis, 643.

v. Dayton, 115, 336.

v. French, 424.

v. Smith, 232.
Barker's Estate, 663.
Barkow v. Sanger, 407, 478.
Barling v. Bishopp, 183, 206, 244. 245.
Barlow v. Arnold, 285.

v. Myers, 82.
Barnard v. Moore, 391.
Bauies, Matter of, 561.

v. Brown, 729.

v. Dow, 658, 660.

v. Gill, 243.

v. Morgan, 58, 73, 74, 75, 115.

v. Sammons, 182.
Barnet v. Fergus, 619.
Barnett v. Blake, 647.

v. Kinney, 124, 551, 615.
Barney v. Griffin, 556, 560, 577, 5S4. 631.
Barnitz v. Rice. 20.
Barnum ?>. Hempstead. 431. 607
Barr v. Church. 434, 435, 706.

XVI

■ <jj TABLE OF CASES. [are to fiages.

Barr :■. Cubbag'

i . Reitz, 443. 4;>. 4"-. 466.
Barrack 1 . McCulloch, <><>.
Barrett v. Hart. 404.

: . Nealon, 194,

. :■. Morris

■■ :. Bailey, 10, 140, 30^, 41;,
426.

.- . Barrow, 277. 383, 717.

: . Paxton, 44".
Barry : . Abbot, 1 20, -'-'••.

1 . Equitable I.. A. Soc, 56.

r . Kennedy, I
.•. v. Kilvington, 40.
Bartb v. Backus. 614, 615. 739.
Bank- 7 . Nutt. 724.
Bartles v. Gibson, 414, 688.
Bartlett v. Blake. 7, 449.

v. Cheesbrough, 435.

v. Cheesebrough, 520.

!eavenger. 405. 407. 44.8.

7'. Drew, 237. 240, 241, 26S.

v. McNeil, 1 16.
Barto's Appeal, 100.
Barton v. Briscoe, 646.

:•. Hosner, 151, 156, 16S, 224,
225, 229, 234.

v. Sitlington, 622.

7 . \'anheythuysen, 37.

v. White, 73, 74.
Basset v. Xosworthy, 700.
Bassett v. Budlong, 640.

7. McKenna, 209, 224.

v. St. Albans Hotel Co., 140.
Batchelder v. White, 8.

.ham, 225, 262, 318.
Bates v. Ableman, 598.

v. Bradley, 229, 230,

v. Callender, 93.

v. Campbell, 469.

;■. Cobb, 203.

v. Lidgerwood, Mfg. Co., 164,
242.
. Lyons, 142.

v. Plonsky, 159, 161, 217.
Batten :■. Smith, 233.
Battenhausen v. Bullock, 675.
Battles t\ Laudenslager, 9, 499.
Baughman v. IV. m, S, 9.
Bauknigbl v. Sloan, 215, 218, 259.
Baum v. P

Baumann ?■. Jefferson, 552.

Bauserman v. Blunt. 123.

Baxter Moses, 140, 142, 14: I' 7.

172.
Bay v. Cook

V. Hoffman, 40, 51, 58, 67. 107,
127.
Baym
Bayspoole v. Collins, 374.

Iron Co 1 loodall, 202, 309.
1 per, 133.
I; ' Evans Co Reeves, 689.
r, 172.

Beach v. Viles, 135.

v. White, 210.
Beadle, In re, 574.
Beal v. Lehman-Uurr Co., 278.
Beals -'. Guernsey, 448.
Beamish v. Hoyt, 06.
Bean v. Edge, - 1 .

v. Patterson, 593.

v. Smith, 48, S8, III, 343, 416,
700.
Beans v. Bullitt, 549.
Beard v. Dedolph, 529.
1 leards v. Wheeler, 365.
Beardsley v. Frame, 566.
Beardsley Scythe Co. v. Foster, 251,

252, 270, 271.
Beasley v. Bray, 427.
Beatty v. Fishel, 12.
Beaubien v. Beaubien, 274, 2S4, 516.
Beaumont v. Herrick, III, 266.
Beaupre v. Noyes, 184.
Beck z1. Burdett, 6, 97, 129, 14S.

v. Parker, 564.
Beck's Estate, 663.
Becker v. Torrance, 82, 115, 235, 298.
Beckwith v. Burrough, 51, 450, 465.

v. Union Bank, 553.
Bedell v. Chase, 370, 494.

v. Scruton, 517.
Bedford v. Penny, 688.
Beebe v. Saulter, 224.
Beecher v. Clark, 360, 376, 419.

v. Wilson, 534.
Beeckman v. Montgomery, 203, 206.
Beels v. Flynn, 32, 411.
Beene v. Randall, 302.
Beer v. Hooper, 517.
Beidler v. Crane, 342, 423, 425.
Belden v. Younger, 94.
Belford v. Crane, 29.
Belgard v. McLaughlin, 316.
Belknap v. Bender, 81.
Bell v. Fleming's Exrs., 391.

v. Johnson, 214.

v. Lamprey, 517.

v. Leggett, 712.

v. McCloskey, 462, 466.

v. Merrifield, 293,294, 311, 324.

v. Watkins, 659.
Bellamy v. Bellamy, 717, 726.
Bellows v. Wells 470.
I Belmont Branch Bank v. Hoge, 687.
Belt v. Ferguson, 544.

v. Rauget, 437.
Belton v. Hatch, 71.
Benedict v. Huntington, 606, 607.
Benevolent Order, etc. v. Sanders, 614.
Benfield v. Solomons, 592.
Benford v. Schell, 45S, 466.
Benjamin v. McElwaine-Richards Co.,

495-

Benne v. Schnecko, 406, 407, 410, 536.
Bennet, Ex parte, 647.
Bennett v. Buchan, 674.

References'] TABLE OF CASES. [are to ..■

Bennett v. Chapin, 640.

v. Ellison, 557, 577. 584.

v. McGuire, 115, 116.

v. Minott, 167.

v. Stout, 140.

v. Wright, 334.
Benson v. Benson, 1S2.

v. Flower, 68.
Bentlev v. Whittemore, 614.
Benton v. Allen, 255.

v. Snyder, 451.

v. Thornhill, 408.
Bentz v. Rockey, 19, 34.
Bergen z'. Carman, no, 121, 315.

v. Snedeker, 315.
Bergen v. Varrelmann, 54S, 597, 603,

708.
Bernard v. Barney Myroleum Co., 126.
Berney Nat. Bank v. Guyon, 616.
Bernheim v. Beer, 38.

v. Dibrell, 502.
Bernheimer v. Rindskopf, 9, 10, 389.
Berry v. Riley, 556.
Berryman v. Sullivan, 153.
Bery v. Hall, 414.
Besson v. Eveland, 533, 534.
Best v. Staple, 246.
Beste v. Burger, 563, 579.
Bethel Steam Mill Co. v. Brown, 465.
Betts v. Carroll, 703.

v. Union Bank, 395.
Betz v. Snyder, 554.
Beuerlein v. O'Leary, 351, 501.
Beus v. Shaughnessy. 5S4, 586.
Beyer v. Thoeming, 8S.
Bholen v. Cleveland, 614.
Bibb v. Baker, 411, 426.

v. Freeman, 18, 181.
Bice v. Rogers, 370.
Bickham v. Lake, 610, 611.
Bickler v. Kendall, 415.
Bicknell v. Mellett, 480, 685.
Biddinger v. Wiland, 692.
Bidlack v. Mason, 239.
Bierne v. Ray, 275, 413, 434, 435, 504.
Bigelow v. Andress, 159, 172.

v. Ayrault, 51, 58, 276.

v. Doolittle, 410, 411.

v. Stringer, 428, 568, 573, 609.
Billhofer v. Heubach, 150.
Billings v. Billings, 352.

v. Marsh, 87, 660.

v. Russell, 351, 352, 36S, 373,
374. 375, 381.

v. Stewart, 115.
Billingsley v. Bunce, 609.

v. White, 458.
Billington v. Sweeting, 526.
Billson v. Crofts, 647.
Billups v. Sears, 113.
Bingham v. Weiderwax, 396.
Binks v. Rokeby, 219.
Binnie v. Walker, 176.
Bird v. Andrews, 431.
B

Bird -■. Bolduc, 437.

Birdsall v. Russell, 672, 673, 074.

Birdsall W. ,V 1'. Mfg. Co. v. S< hwarz,

613.
Birely's Ex'rs v. Staley, 114.
Birkbeck v. Ackroyd, 392.
Birmingham D. (1. Co. v. Kelso, 480,
621, 622.
v. Roden, 480, 621, 622.
Birmingham Nat. Bank v. Steele, 302.
Bisbing v. Third Nat. Bank, 469.
Bishop v. American Preserver's Co.,

724-

v. O'Connell, 454, 461.

v. Schneider, 668.

v. Stebbins, 410, 666, 703.

t. Warner, 619.
Bissell v. Hopkins, 443, 448.
Black v. Kuhlman, 374.

v. Nease, 194, 203.
Blackman v. Preston, 406, 419.

v. Wheaton, 37, 3S, 451.
Blackstone Bank v. Davis, 639, 640,

642, 654.
Blaechinska v. Howard Mission, etc.,

.392.
Blair v. Finlay, 273.

v. Illinois Steel Co., 149.

v. Smith, 88, 69S.
Blaisdell v. Cowell, 12.
Blake v. Blake, 223, 724.

v. Boisjoli, 34, 54, 188.

v. Freeman, 738.

v. Savvin, 231.

v. White, 501.
Blakeslee v. Rossman, 406, 452, 619,

630, 632, 633.
Blanc v. Paymaster Min. Co., 167, 254,

255-
Blanchard v. Mann, 485.
Bland v. Fleeman, 690.
Blandin, /;/ re, 524.
Blankenship & B. Co. v. Willis, 494.
Blant v. Gabler, 370, 450, 459.
Bleecker v. Johnston, 432.
Bleiler v. Moore, 436.
Blenkinsopp v. Blenkinsopp, 100.
Blennerhassett v. Sherman, 52, 374,

375, 406, 412, 418, 419, 420, 422.
Blight v. Schenck, 592.
Blish v. Collins, 498.
Bliss v. Matteson, 535, 597, 711.

v. West, 379.
Block v. Darling, 727, 730, 731.
Blodgett v. Chaplin, 426.
Bloedorn v. Jewell, 88.
Blondheim v. Moore, 333.
Bloodgood v. Clark, 116, 331.
Bloom v. Moy, 180.
Blount v. Costen, 215.
Bloxam v. Elsee, 73.
Blue v. Penniston, 498.
Blum v. McBride, 26.

v. Simpson, 674, 690.

XV111

i «] TABLE I >F CASES. [ •"■ '

Blumer v. Bennett, 357, 4.78.
Bluthenthal :. Magnus, [93, 576.

man 1 . Halliday, 579, 606, 611.
1 h erall, 201.

ibb, -51. -

■ ell, r7r-

245 ;lr-
v. King

land, S9.

Richards, 94, 532.
264.
: . Thompson, 90.
Bohannpn v. Combs, 545.
Bohn v. Weeks

■.■ r. 670.
. . Dean, 183, 244.
-44-

Trust Co., 641.
Bomar 1 . Means, 215, 254.
Bomberger v. Turner, 164.
Bonesteel V. Sullivan, 717, 734.
Bongard v. Block, 183, 244.
Bonsall v. Comly, 93.
Bun wit v. Heyman, 579.
1 v. Boog, [83

: v. Worrill, 412, 416, 426.
Boone v. Chiles, 512, 669.

Hall, 229.
Boone County v. Burlington & M. R.
R. Co., 509.
! . Keck, 259.
Boone County Nat. Bank v. Latimer, 84.
Booss v, Marion, 389, 562, 563, 609.
Booth v. Barnum, 674.

Punce, 36, 109, 133, 498.
v. Carstarphen, 16, 352, 355.

iark, 238.
v. Patrick, 228.
V. 1'owcrs, 4S5.
V. Warrington, 2S6, 513.
Boothliy v. Brown, 454.
Boothroyd, In 1
Borden v. Doughty, 341.

Borland v. Mayo, 415.
V. Walker, 340.
Born v. Shaw, 122, 437, 453.
Borst 7. Cony, 541.
Boston Music Hall Assoc, v. Cory, 405.
twick v, Blake, 4.19, 4S0, 4S1.
v. Burnett, 304.

v. Menck, 1 16, 234, 235, 236, 316.
I win. 391,
Beers, [67.
Bott V. Smith. '
Boud v. Bronson, 402.
Bouquet v. I leyman, [94.
Bourn 1

Bouslough v. Bouslough, 183,224, 244.
Bowden ■■. Johnson, 234, 2S1, 303, 432.
Spellman, 4<;i, 492.
.

I v. A r it- lid

7 . ( lampbell, 120.

I ■) 7 . Plan-

Powen 7'. Clark, 623.

v. Evans, 670.

v. Gent, 215.

v. lioskins, 103.
Bowerman v. Bowerman, 487.
Powers v. Keesecher, 288.
Bowery Bank Case, 615.
Bowes v. Foster, 717.
Bowlsby 7'. Tompkins, 245.
Bowman v. Houdlette, 434.
Bownes v. Weld, 142.
Bowser v. Cole, 618.
Box v. Goodbar, 548.
Boyce v. Grundy, 99.
Boyd, Ex parte, 116, 140, 281.

v. Beck, 671,

v. Boyd, 283, 285

v. De La Montagnie, 728, 729,
730.

v. Dunlap, 341, 343.

t\ Ellis, 414, 415.

v. Hoyt, 251, 260, 289, 291.

7'. Jones, 496.

v. Olvey, 230.

7'. Turpin, 374.
Boyer v. Berryman, 475.
Boyle r. Zacharie, 517.
Boynton 7'. Rawson, 298, 708.

v. Rees, 698.

v. \'eazie, 465.
Bozman v. Dtaughan, 375.
Brace v. Berdan. 391,
Brackett v. Griswold, 119, 502.

v. Harvey, 229, 584, 619, 621,
623, 630, 631.

7 Waite, 437.

V. Watkins, 93.
Bradbury v. Falmouth, 673.
Bradford v. Bradford, 670.

7'. Rice, 518.

v. Tappan, 717.
Bradford's Appeal, 539.
Bradley v. Bischel, 564, 612.

v. Buford, 303, 410, 454.

v. Converse, 237.

v. Fuller, 118.

v. Obear, 45.

v. Peixoto, 641.

7'. Ragsdale, 363, 374.
Bradner v. Holland, 252, 291.
Bradshaw :■. Yates, 730.
Bradwell v. Weeks, 81.
Brady, Matter of, 518.

v. Briscoe, 375.
Braem v. Merchants' Nat. Bank, 120.
Bragg v. Gaynor, 58, 67, 106.
Brainerdz/. Dunning, 567,607,610,616.
B ram an v. Johnson, 55.

7'. Stiles, 656.
Bramhall v. Ferris, 65, 86, 640, 647,

654, 660, '>''! .
Branch Bank of Decatur v. Kinsey, 394.
Branch Bank of Montgomery v.
Hodges, 312.

References'] TABLE OF CASES. [are to fages.

XIX

Brandies v. Cochrane, 75, 77, 78.
Brandon v. Aston, 647.

v. Robinson, 64, 65, 641, 646,
651, 654, 657, 663.
Brantom v. Griffith, 471.
Brashear v. West, 549, 571, 704.
Brasher v. Jamison, 347.
Brawn v. Keller, 445, 463.
Breathwit v. Bank of Fordyce, 488.
Breckenridge v. Taylor, 483.
Bree v. Holbech, 514.
Breeding v. Davis, 95.
Brenan v. Burke, 68.
Brennan v. Willson, 554, 562.

v. Wilson, 433.
Brett v. Carter, 625, 626, 627, 628.
Brewer v. Connell, 543.
Brewster v. Power, 108, 242.
Brice v. Lide, 483.

v. Myers, 37, 45, 437.
Brick v. Campbell, 56.
Brickett v. Downs, 387.
Bridge v. Eggleston, 489, 490.

v. Ward, 661.
Briggs v. Beach, 381.

v. Merrill, 322, 342, 722.

v. Mitchell, 355, 535-.

v. Oliver, 139, 219.

v. Parkman, 626.

v. Spaulding, 262.
Brigham v. Luddington, 239.

v. Tillinghast, 585.
Brinckerhoff v. Bostwick, 144, 263.
Brine v. Insurance Co., 650.
Brinkerhoff v. Brown, 14S, 172, 176,

178, 217, 260, 2S8, 521.
Brinks v. Heise, 363, 431.
Brinley v. Spring, 428.
Brisco v. Norris, 354, 534.
Briscoe v. Bronaugh, 20.
Bristol Co. Sav. Bank v. Keavy, 485, 503.
Brittain v. Crowther, 474, 497, 688.
Britton v Lorenz, 592.
Broadway Nat. Bank v. Adams, 65, 87,

614, 655, 658, 660, 742.
Brockenbrough v. Brockenbrough, 635.
Broderick's Will, 694.
Bronson v. Wilmington N. C. Life

Ins. Co., 253.
Brooks v. Caughran, 244.

v. Hanford, 553.

v. Peck, 220.

v. Powers, 449.

v. Schwerin, 392.

v. Stone, 100, 148, 159.

v. Wilson, 147, 151, 311.

v. Wimer, 609.
Brookville Nat. Bank v. Kimble, 524.
Broughton v. Broughton, 734.
Brouwer v. Harbeck, 481, 482.
Brower v. Peabody, 669.
Brown, Matter of, 199.

v. Armstrong, 591.

v. Ashbough, 123.

Brown v. Bank of Miss., 172, 17S.

. . Hates, 154, 218.

v. Bronson, 135, 543.

v. Brown, 155, 225.

v. Campbell, 153, 515.

v. Chase, 336.

v. Chubb, 10S, 164, 313, 343.

v. County of Buena Vista, 511.

v. Dean, 9.

v. Farmers' & M. Banking Co.,
232.

v. Fitz, 31.

v. Gilmore, 235.

v. Guthrie, 54S, 631.

v. Haven, 2S8.

v. Heathcote, 230.

v. Herr, 47^.

v. John V. Farwell Co., 297.

v. J. Wayland Kimball Co., 141.

v. Knox, 577.

v. Long, 141.

v. Nichols, 115, 129, 130, 708.

v. O'Neal, 454.

v. Piatt, 634.

v. Rawlings, 387.

v. Reilly, 737-

v. Ricketts, 215.

v. Smart, 517.

v. Snell, 109, 133.

v. Spivey, 540.

v. Texas C. H. Co., 414.

v. Volkening, 442.

v. Williamson, 65, 650, 662.

v. Work, 618.
Brown Chemical Co. v. Meyer, 72.
Browne v. Hernsheim, 141, 214.
Brownell v. Curtis, 231, 304.

v. Stoddard, 526.
Browning v. Bettis, 6S, 116.

v. Hart, 231.

v. Morris, 729.
Brownsword v. Edwards, 29.
Bruen v. Dunn, 669.
Bruggerman v. Hoerr, 1S4.
Brummel v. Stockton, 454.
Brundred v. Patterson Machine Co.,

484.
Bruner v. Brown, 22, 312.
Bruns v. Stewart Mfg. Co., 339.
Brunswick ;-. McClay, 463.
Bryan v. Knickerbacker, 660, 661.

v. Spruill, 275.
Bryans v. Taylor, 67.
Bryant v. Bryant, 225.

v. Kelton, 20.

v. Simoneau, S, 15.

v. Young, 424.
Bryce v. Foot, 589.
Buchanan t. Marsh, 100, 152.

r'. Smith, 481.
Buck v. Ross, 237.

T'. Sherman, S.

v. Voreis, 113, 114, 375, 473, 506,
698.

XX

. • • n... TABLE OF CASES. [are to pages.

Buckingham :. Walker, 215, 21S.
Buckiand v. Gallup, 561.
Buckley 1 . Duff, [93.

: . I >unn

r. Wells, 532, 533.

.- . \\ beeli
Buckner 1 2S4, 2S5.

Stine, 4S2.
Budd v. Atkinson, 701.
Buell v. Rope, 24. 413, 557. mi.
Buffingion v. Harvey, 253, 254.
BufTum r. Jones, 434.
Buford v. Keokuk N. L. Packet Co.,
214.

.- . Shannon, 396.
gent, 2SS.
Buhl Iron Works v. Teuton, 451, 4(13.
Bulger v. !<• sa, 369, 389, 390, 460.
Bulkley v. Buffington
Bull v. Bray, 377.

t rriswold, 470.
Bullenc v. Smith, 27.
Bullis v. Montgomery, 491.
Bullitt v. Taylor, 153, 154. 717.
Bullock v. Narrott, 1?.

: . Williams. 444, 618.
Bulmer r. Hunter, 536, 537.
Bumpas v. Dotson, 434, 435.
Bunn v. Ahl, 28, 352, 375.

v. Bunn, 309,
Bunnell v. Gardner, 85, S7, 639, 650.
Burbank v. Wiley, 493.
Burchinell v. Weinberger, 4=;S.
Burdell v. Burdell,
Burdick v. Gill, 2nd, 366, 372, 413.

t. Jackson, 714.

V. Post. 26.

Burdsall r . Waggoner, 27S.

Burford v. Steele. 272.

Burgert v. Borchert, 7.25, 26,354, 454.

Burgett v. Burgett, 214.

Burke 1 . Adams, 214.

v. Burke, 432.

v. Smith, 507.
Burkey v. Self, 437.
Burlen v. Shannon, 367.
Burley v. Hartson, I
Burti- .- . ( lade, I -
Burnett v. Gould, 140, 155. T7i-
Burnham v. Brennan, 24,450.490,674.

-■. Mi Mil hael,
Burns v. Morse, i4'>.
Burr v. Beers, Si, -2.

v. Clement, 23, -<>}. 704.
Burras v. Looker, 310.
Bun • pie, 183. 222.

Burt : 7. 220, 272.

v. Panjaud, v

v. Timmons, 60, 198.
Burtis 7 . I)i' kinson,
Burtoi

1. 58, 223.
■ »son, 536.

Burton v. Platter, 193, 199. 477.
Burtus v. Tisdall, 3, 2S1,
Burwell v. Fauber, 680.
Busey v. Smith, 741'.
Hush v. Collins, 375.

v. Roberts, 48S, 489, 6S1, 683,
686, 691.

v. Rogan, 717.
Bushnell 2. Bushnell. 224.

r. Eastman, 121.
Buswell r. Lincks, 176, 178, 293, 329.
Butcher v. Harrison, 229.

v. Stultz, 423.
Butler v. Butler, 544.

7. Hildreth, 232, 723.

v. Howell, 459.

7 . Moore, 44.

v. Spann, 215, 288.

v. Watkins, 498.

v. Wendell, 551.
Butterfield v. Stanton, 528.
Butteruorth, In re, 203.
Button v. Rathbone, 141, 143, 619.
Butts v. Peacock, 406.
Byrne v. Becker, 357, 558.
Byrnes v. Clarke, 392.

v. Lewis, 306, 307.

z\ Stilwell, 643.
Byrod's Appeal, 214.

Cadbury 7\ Xolen, 466.

Cadogan v. Kennett, 34, 37, 38, 42, 46,

52, 363. 456.
Cadu allader v. West, 730.
Cady v. Leonard, 275.

7'. Whaling, 168.
Cahill v. Bigelow, 387.
Cahn v. Person, 109.
Cahoon v. Marshall, 492.
Cake v. Pottsville Bank, 370.
Caldwell v. Montgomery, 68.
Callan v. Statham, 416, 417.
Callanan v. Shaw, 336.
Callis v. Waddy, 514,
Cambridge Valley Bank v. Delano,

672, 675, 694.
Camden v. Stuart, 238.
Camp v. Thompson, 451.
Campau 7'. Chene, 640.
Campbell v. City of Haverhill, 73, 74.

v. Colorado Coal & I. Co., 714,
7"=.

7'. Dearborn, 736.

7'. First Nat. Bank, 725.

7'. Fish, 66.

v. Foster, 36, 638, 650.

7'. Genet, <>2, 1 1 5.

7\ I [amilton, 463,

7 . James, 74.

v. Jones, 254, 255.

7'. Mackay, 287.

7'. Smith, 8i .

v. Woodworth, 567, 589, 607.
Campion v. Cotton, 383.

References'] TABLE OF CASES. \ are i

Canal & C. Sts. R. R. Co. v. Hart, 116.
Candee v. Lord, 14(1, 194, 475.
Cannon v. Norton, 304.

v. Young, 485.
Cansler v. Sallis, 181.
Canton v. Dorchester, 720.
Cantrell, /;/ re, 619, 623.
Capital City Bank v. Parent, 151

v. Wakefield, 255.
Capron v. Porter, 444, 452.
Carbiener v. Montgomery, 196.
Card v. Walbridge, 229.
Carey v. Giles, 46.
Carey-Halliday Lumber Co. v. Cain,

423.
Cargill v. Kountze, 281.
Carhart v. Harshaw, 92.
Caring v. Richmond, 631.
Carl v. Smith, 93, 437.
Carleton v. Banks, 315.
Carlisle v. Tindall, 107, 176.
Carll v. Emery, 719, 723.
Carnahan v. McCord, 666.

v. Wood, 492.
Carney v. Carney, 492.
Carpenter v. Buller, 608.

v. Carpenter, 206.

v. McClure, 196.

v. Muren, 407, 489.

v. Osborn, 270.

v. Roe, 191, 192, 199, 208, 361,

534-

v. Tatro, 529.

v. Underwood, 573.
Carr v. Breese, 191, 196, 199, 200, 207,
208.

v. Briggs, 354.

v. Carr, 423, 736.

v. Effinger, 640.

v. Gale, 231.

v. Hilton, 236, 284, 514.

v. Van Hoesen, 158, 159, 241.
Carroll v. Aldrich, 216.

v. Else, 575.

v. Hayward, 681, 685.
Carson v. Stevens, 523.
Carter v. Bennett, 146, 476.

v. Carter, 647.

v. Castleberry, 109.

v. Grimshaw, 206, 358, 361, 376.

v. Gunnels, 15.

v. Kerr, 2S8.

v. Willard, 449, 464.
Cartwright v Phcenix, 466.
Cartwright's Case, 353.
Carver v. Barker, 204, 421.

v. Peck, 73.
Carver Gin & M. Co. v. Bannon, 388.
Cary v, Hotailing, 501.
Casanova v. Aregno, 520.
Case v. Beauregard, roo, 102, 139,
140, 141, 142, 145, 166, 178,
388, 389.

v. Gerrish, 712,

Case v. Phelps, 135, 199, 203.
Case Mfg. Co. v. Perkina, 525.
Casey v. Janes, 588.
Casey's Trust, In re, 047.
Cason v. Murray, 556.
Cassaday 7r. Anderson, 170.
Cassell v. Williams, 93.
Cassidy v. Meacham, 271.
Castle v. Bader, 172.

v. Bullard, 400, 431, 486, 497,
498.

v. Lewis, 160, 175,

v. Palmer, 31.
Caswall, Ex parte, 76.
Caswell 7'. Hunch, 740.

v. Hill, 60.
Catchings v. Manlove, 150.
Cates v. Allen, 100, ioi, 136, 137, 139.
Cathcart v. Robinson, 47.
Catlin v. Currier, C20, 623.

v. Doughty, 115.

v. Eagle Bank, 615.

v. Wilcox S. P. Co., 615.
Caton v. Mosely, 590.
Catt v. Wm. Knabe & Co. Mfg. Co.,

533.
Caulfield r. Maguire, 647.
Cavanagh v. Morrow, 547.
Cavender v, Smith, 414.
Cecil Bank v. Snively, 108.
Cedar Rapids Ins. Co. v. Butler, 507.
Central Bank of Washington -•. Hume,

56- 57, 54L 542.
Central Nat. Bank v. Seligman, 597,

601, 602, 603, 704.
Central R. R. & B. Co. z\ Brunswick

& W. R. R. Co., 553.
Central Trust Co. v. Continental Iron

Works, 391.
Cerf v. Wallace, 233.
Chadbourn v. Williams, 530, 534.
Chadbourne v. Coe, 139.
Chad wick t. Fonner. 4<i"-
Chafee v. Blatchford, 583.

v. Fourth Nat. Bank, 123. 551,
614.
Chaffee v. Fort, 561.
Chalfont v. Grain. ~}.
Chamberlain v. O'Brien, 233, 698.

v. Stern, 459.

v. Twyne. 412.
Chamberiin ?>. Jones, 323.
Chambers v. Sallie, 93, 540.

v. Smith, 610.

v. Spencer, 80, 437.
Chandler r1. Hollingsworth, 544.

?'. Parsons, 381.

v. Powers, 506.

v. Von Roeder. 1 to.
Chapin v. Jenkins, 232.

v. Pease, 717, 720, 724.

v. Thompson, 500, 551.
Chapman v. Banker & T. Pub. Co., 54,
215.

XX11

K«] TABLE OF CASES. [are to pages.

Chapman v. Emery. I J

Chark

Charier : . Ste> ens, -

Charter Oak Life Ins

541-

Cha-v . I-.:. -44

517.
v. 11 11 ti n, 4' i".

. 41;'-.

: . Redding, 291.

. . ■
■'.
Chautauqi.' nk v. Risley, 66,

[61, 268, 313, 315, 316, 317,

: . \\ nite, 317.
Cheatham v. Hawkins, 22. 460, 609,

Cheever v. Rutland & B. R. R. Co., 336.

Chenery v. Palmer, 424, I

Chester v. Bower. 464.

Chesterfield v. Janssen, 2S, 98.

Chew v. Ellingwood. 615.

Chewett v. Moran, 220. 264

Chicago Bridge Co. v. Anglo-Amir.

Pack. Co., 153, [67.
Chicago & A. Oil & M. Co. v. U. S.

Petroleum Co., 336.
Chickering v. Hatch, 424.

v. White. 45-.
Child v. Brace, 14-. 179.
Childs v. Connor

v. Hurd. 394.

v. Kendal
Chillingwortb v. Pastern Tinware Co.,

474-
Chipman v. McClellan, 4S1.

r . Peabi "lv. 124.
Chittenden v. Brewster. 1 = 5.
Chophard v. Bayard, 619.
Choteau v. [ones, 22
Christian r:. Atlantic & \. C. R. R.
Co., 215. 249.
1 1 wood, 323.
Christie v. Bridgman. 416,
Christy v. Scott
Chubb v. Upton
Church v. Chapin, 437, 476.
< Ihurch, ' 97.

V. Muir. 720, 726.
Churchill v. Hill, 610.

Wells, 2<m,, 210.

1 ly , . Rhodes, 'it .
1 in' Bank v. Bholen, 308.

William-. -.,_),

Citizens' Nat. Bank 1 272,426.

City Bank v. Blackmore

-.-. Westbury, I
City Nat. Bank v. Bridgers, 434, 436.
i , dricl

I l.imilton. 187, 204, 2'
49>i 533,

City of Pexinc;ton v. Butler, 263.
City of Newark r. Punk, 58,67.
Clarlin 7. Ambrose, 529.

v. Ballance, 492.

v. Claflin,

7'. Frenkel, 123.

v. Gordon, 298, 709.

7'. Lenheim, 672.

v. Lisso, 317.

7'. McDermott, 122, 140, 153, 154.

V, Mess. 197.

v. ( tstrom, 82.

7'. Rosenberg, 454.

V. Smith. 307.
Clagett v. Gibson, 244.
Clan Ranald v. Wyckoff, 75.
Clapp v. Uittman, 594.

7'. Ely, 408.

7'. Ingraham, 75.

v. Leatherbee, 244.

v. Smith, 67.
Clark 7'. Andrews, 710, 713.

v. Anthony, 146, 476.

v. Beecher, 326, 543.

7. Bever, 131, 237.

v. Chamberlain, 358, 361.

v. Clark, 521.

7'. Clough, 224.

r. Depew, 188, 42G.

v. Dickinson, 560.

v. Douglass, 37, 146, 40S, 476.

7'. Finlon, 423.

v. Foxcroft, 146, 242.

7p. French, [96.

v. Gibson, 3S6.

7. Hougham, 514.

7'. Howard, 81.

7. Hyman, 625, 62S.

7'. Killian, 7, 206, 208.

v. Krause, 294, 329, 346, 414,
432. 435, 46S. 474, 475, 502,
542. 704-

v. Lee, 461.

v. Morrell, 365.

v. Robbins, 574.

v. Stanton, 591.

v. Van Riemsdyk, 432.

v. Wilson, 491.

v. Wise, 410, 411.
Clarke v. Boorman's Ex'rs, 511.

:•. I.aird, 139.

7. Rist, 298.

7. White, 308, 501.
Clarkson v. De Pevstcr, 149, 157, 176,

17S, 218.
Clary 7-. Frayer, 453.
Clason 7'. Morris, 304.
Clay v. McCally, 379.

-■. Smith, 1S5.

v. Walter, 383.

7'. Williams, 726.
Clayton v. Brown, 437.

7'. Johnson, 577.
Cleghorn v. Say re, 595.

References] TABLE OK CASKS. [ar

XXI 11

Clemens v. Brillhart, II.

Clement v. Cozart, 1S1, 1S7, 190, tg6.

Clements v. .Moore, 32, 37, 38, 44, 52,
84, 30S, 310, 320, 321, 341, 345, 346,
357, 432, 479, 490, 681, 689, 692.

Cleveland v. Chambliss, 166.

Clews v. Kehr, 489.

Clift v. Moses, 345, 346.

Clinton Hill L. & M. Co. v. Strieby,

425-
Clough v. Thompson, 231.
Clow v. Woods, 453, 463, 466.
Clute 7'. Kitch, 467.

v. Newkirk, 46S.
Coates v. Day, 264.

v. Gerlach, 406, 419.
Coats v. Donnell, 615.
Cobb v. Day, 11.
Coburn z: Pickering, 24, 446, 449, 619.

v. Proctor, 685, 686.
Cochran v. Wiechers, 268.
Cockell v. Taylor, 247.
Cocks v. Varney, 160.
Cockshott v. Bennett, 711,
Coe v. Whitbeck, 150.
Coffey v. Norwood, 264.
Coffin v. Day, 390.

v. Douglass, 564, 607.
Cofiin v. Kelling, 551.
Cogburn v. Pollock, 332.
Coghlan v. South Carolina R. R. Co.,

123.
Cohen v. Knox, 382, 530.

v. Meyers, 103, 332.

v. N. Y. Mutual Life Ins. Co.,
166.

v. Wolff, 217.
Cohn, Matter of, 233, 591, 593.
Cohn v. Goldman, 273.

v. Ward, 394, 592, 612.
Coiron v. Millaudon, 343, 346.
Colbern v. Robinson, 425.
Colby v. Peabody, 69.
Cole v. Malcolm, 349.

v. McGlathry, 285.

v. Millerton Iron Co., 237, 268,
359, 416, 616.

v. Tyler, 18, 161, 192, 313, 314,

317, 335-

v. Varner, 194.

v. White, 445, 456, 457.

?•. Yancey, 407.
Coleman, In re, 646.

v. Burr, 13, 16, 18, 19, 23, 355,
369. 377, 392, 568, 584, 695.
Coley v. Coley, 392, 407, 434.
Colgan v. Jones, 341.
Colie v. Jamison, 230.
Collier v. Davis, 570.

v. Hanna, 363, 389.
Collingridge v. Paxton, 60.
Collingsworth v. Bell, 618'.
Collins, In re, 143. 229.

v. Carlile, 391.

Collins v. Myers, 451, 619,

v. Nel

r. Shaffer, 132.

v. Taggart, 468.

v. Thompson, 303.
Collinson v. Jackson, 146, 254, 295,

316, 387, 476.
Collumb v. Read, 62, 321, 666.
Colman ~\ Dixon
Colombine v. Penhall, 536, 537.
Columbia Bank 71. facobs, 424.
Columbus Watch Co. v. Hodenpyl,

147. '5". 47"-
Combs r. Watson, 164.
Comegys v. X'asse, 230.
Comer v. Allen, 382.
Comey v. Pickering, 666.
Comly 7'. Kisher, 465.
Commercial Bank v. Meach, 150.
Commercial Nat. Bank v. Nebraska

State Bank, 54S.
Commonwealth v. Duffield, 76, 6O4.

v. Evans, 367.
Commonwealth Ins. & T. Co. v.

Brown, 525.
Comstock v. Rayford, 42S, 433.
Comyns ?\ Riker, 719.
Conard v. Adriatic Ins. Co., 391.
Conde v. Hall, 340.
Cone v. Cross, 340.

7'. Hamilton, 126.
Confer v. McNeal, 497.
Conger v. Lowe, 644.
Conkling v. Shelley, 630.
Conly v. Priedman, 458.
Connah v. Sedgwick, 593.
Conn. Mut. L. I. Co. t. Smith. 414,

432, 515, 692.
Conover v. Beckett, 4S1.
Conro v. Port Henry Iron Co., 130,

217, 220.
Conrou' 7'. Little, 547.
Consolidated T. L. Co. v. Kansas City

Varnish Co., 167.
Constable v. Hardenbergh, 307, 610.
Constant t\ University of Rochester,

12, 357-
Continental Trust Co. v. Wetmore, 86.
Converse 7'. Hartley, 210.

v. Sickles S4, 561.
Conway, Ex parte, 7, 9, 615.

v. Edwards, 452, 466.
Cook v. Bennett, 619.

7'. Holbrook, 538.

v. Hopper, 474.

v. Johnson, in, 181, 187.

v. Ligon, 185.

7'. Lindsey. 284.

7'. Lowry, 85.

7'. Mason, 4S7.

v. Moffat, 516.

v. Scott, 93.

7'. Swan, 133.

7'. Tibbals, 271, 279.

XXIV

] 'ABLE I '1 CASES. [are towages.

: . Tullis, S "•

221, 357, 47".

I lenek) .

\ in. 361, 4'". '
:
I >avison, 413,
( ialbraith, 12.
i .urn. 73.
t . Lee, 513.
. Reynolds, 475.
. Wyatt

Coope

. Middle ton, 11. too, 258, 3S0.
C < > r ! > i 1 1 : . Cutcheon,
Bean, 1 13.
I et 1 . Williams. 244.

er, 41 16.
C rev [( 18.

Curl-.-;; :. Radcliffe, 42. 417, 419.
Cornell, Matter yj, 553, 561,

588.
v. R.ulway. 6, 97, 176, 255, 264,

Corning v. Fowler, 60.

- . McCullough, 269.
v. White, 1 j 1. [48, 709.
Cornish v. I >ew -
Cornwell v. Lee,

Cortland Co. v. Herkimer Co., 496.
Cosby v. Ferguson, 6

• v. Mayor, etc., Si,
Cottingham, Succession of, 31.

n v. Hart,
Cottrell v. Moody, 103.
rell's Appeal. 348.
Coulter v. Lumpkin.

nty of Morgan v. Allen. 131.
iv of Warren v. Man y, H)-.
Coursey v. Morton, 1 |2, 553

= 74- ''"■)■ 6l 1.
Courienay v. Wright, 542.

I ilumbia Powder M fg. ( o.,

Coutts v. Acworth, 77.
nhovan v. 1 Ian. 27.
: wick, 72.
ell, 7.
Cowell v. Spring

Cowling 7 . 689.

' 401.

Einspahr, 499.

1 ley. 426,
Gruv< 1 . 96, 07.
7. Miller,
P

~ h ropshire, 94.
Wilder, 31 . 92, 545.

v. W

.- Wile nx, 10^, 289.
I Kadli

I mil hael, 168.

Craig v. Fowler, 402.

7. Hone, 661.
( Iraig's Appeal, 469.

("ram :. .Mitchell, 551, 592, 593.
Cramer v. Bloi id, 320.

v. Reford, 203, 530.
Crandall v. Brown, 457, 632.

7. Lincoln, 131, 237.
Crane 7'. Bunnell, 113.

7 . Stickles, 381.
Cranson v. Smith, 125.
Cranstown 7'. Johnston, 304.
Crapo v. Kelly. 615.
Crapster v. Williams, 433.
Crary v. Goodman, 31.
Craven v. Brady, 647.
Craver v. Miller, 415.
Crawford v. Andrews, 483.

v. Beard, 340.

7. Berry, 484.

v. Davis, 446.

v. Kirksey, 7, 9, 187, 293, 304,
367, 416, 426, 430, 448, 451,

703.

7'. Lehr, 224, 717.

v. Logan, 20S, 537.

-•. Lundy, 640.

7 . N'eal, 462, 480.

7'. Ross, 338.
Credland v. Potter, 31.
Cresswel! ?\ McCaig, 387.
Cribb 7'. Morse, 3S9.
Crim 7'. Kessing, 476.

v. Walker, 140, 153, 154.
Crippen v. Hudson, 14S, 149, 150, 157,

171, 177. 271.
Crocker v. Bellangee, 736.

v. Craig, 22S.
Crockett 7'. Phinney, 341.
Croft v. Arthur, 536.

v. Townsend, 4.
Crompion v. Anthony, 141. 166.
Crook <'. Jadis, 6S7.

7'. Rindskopf, 8, 47, 3S9, 500,
562, 605, 606, 609.
Crooke ?: County of Kings, 77, 7S, 663.
Crooks 7. Stuart, 445.
Cropsey v. McKinney, 140.
Crosby 7'. Baker, 94.

v. Hillyer, 554.

v. Taylor, 350.
Cross 7'. Brown, 224, 227.

:•. Truesdale, 81.
Crouse ~-. Frothingham, 66, 67, 225

229, 232, 318, 4S0.
Crow . Andrew s, 9,

7'. Beardsley, 24, 26.

7'. Coons, 517.

v. Red River Co. Bank. 630.
Crowinshield t. Kittridge, 707, 722.
Crumbaugh v, Kugler, 437.
Crummen v. Bennet, 31, 90.
Cubbedge v. Adams, 100.
Cumming 7\ Fryer, 46.

References'] TABLE OF CASES. [are i

Cumming v. Mayor of Brooklyn, 328.
Cummings v. McCullough, 374.
Cummins v. Griggs, 454.

-', Hurlbutt, 13.
Cunningham v. Dwyer, 7, 395.

v. Freeborn, 23, 30S, 369, 568
584, 616.

v. Norton, 19, 348, 485.
Curd v. Lackland, 105.
Curran v. Olmstead, 273.
Currie v. Hart, 592.

v. Misa, 373.
Currier v. Sutherland, 31, 93.
Curry v. Lloyd, 114,

v. McCauley, 421.
Curtain v. Talley, 577.
Curtin v. Isaacsen, 448, 451.
Curtis v. Fox, 192, 328,

v. Leavitt, 37, 205, 278, 359, 4S2,
576.

v. Moore, 497.

v. Valiton, 357.

v. Wortsman, 526.
Cushwa v. Cushwa, 726 734.
Cutcheon v. Corbitt, 321.
Cutler v. Tuttle, 720.
Cutter v. Copeland, 457, 459.

v. Griswold, 108.

v. Hume, 601, 612, 704.

v. Pollock, 703.
Cutting, Ex parte, 476.

v. Cutting, 76, 77, 85, 650, 663,
742.

v. Jackson, 449.
Cuyler v. Ensworth, 223.

v. McCartney, 490, 495, 496, 557,
564, 591-

Daggett B. & H. Co. v. Bulfer, 392.
Dahlman v. Jacobs, 140.
Dale v. Roosevelt, 738.
Dalglish v. McCarthy, 365.
Dalpay, Matter of, 123.
Dalton v. Currier, 600.

v. Stiles, 708.
Damon v. Bryant, 520.
Dana v. Haskell, 177.
Danbury v. Robinson, 667.
Danby v. Sharp, 431, 439, 486.
Dance v. Seaman, 25.
Danforth v. Beattie, 31,

v. Dart, 674, 687.
Daniel v. Vaccaro, 8.
Daniels v. Eldredge, 655.

v. McGinnis, 495.
Danjean v. Blacketer, 428.
Dannmeyer v. Coleman, 694.
Danzey v. Smith, 227.
Darby v. Gilligan, 389.
Dargan v Waring, in, 176.
Darling v. Rogers, 19, 610.
Darvill v. Terry, 365.
Daugherty v. Daugherty, 410.
Davenport v. Cummings, 26.

Davenport r\ Foulke, 619.

v. Kelly, 11?. .

v. Wright, 4'>;
David 7'. Birchard, 688, 692, 706.
Davidson r. Burke, 129, 381.

v. Graves, 384, 536.

?'. Jones, 395.

7'. Little, 415.
Davis v. Bigler, 444, 453, 462.

v. Bonney, 708.

7'. Briggs, 391.

v. Bruns, 153.

v. Clayton, 304.

v. Cornue, 475.

v. Davis, 543.

v. Dean, 153.

v. Fredericks, 532.

v. Garrison, 357.

v. Getchell, 414.

v. Graves, 320 725.

v. Howard, 3S7, 604.

v. Leopold, 321, 340, 342, 707.

v. McKinney, 107, 187.

v. Ransom, 619.

v. Schwartz. 49, 52, 375, 402,
406, 417, 425, 435, 443, 593,
740.

7'. Sharron, 67.

v. Stern, 489.

v. Swanson, 223, 717, 724.

v. Turner, 37, 443, 445, 440, 449,

451, 455, 456, 459-
Davis S. M. Co. v. Dunbar, 405.
Davy v. Garrett, 275.
Dawes v. Cope, 453.
Dawley v. Brown, 32, 138, 317.
Dawson v. Coffey, 140.

v. Xiver, 414.
Day v. Cole, 416.

v. Cooley, 51, 194, 196, 198, 209,
229, 231.

v. Goodbar, 418, 421.

v. Washburn, 710.
Dayton v. Borst, 237, 240.
Dean, Matter of, 561, 588.

v. Negley, 29, 3S6.

v. Skinner, 4S0.
De Armond v. De Armond, 543.
De Berry v. Wheeler, 523.
De Camp v. Alward, 615.

v. Dempsey, 661.
Decker v. Decker, 107, 146, 147.
Deering v. Tucker, 640.

v. Washburn, 454.
Deerfield v. Nims, 253.
De Farges v. Ryland, 394. 504, 537, 538.
De Forest v. Bacon,
Degnan 7p. Farr, 524.
Degraw z. Clason, 87.
Dehorty v. Jones, 640.
Deitrich 7\ Hutchinson, 704.
Delany v. Mansfield, 336.
Delashmut v. Trau, 92.
Delaware v. Ensign, 415, 417, 632.

XXVI

TABLE Ol CASES. [are to fiages.

v. Hyland, -
De M '90.

Demarest v. H

rerhune, 434. 4;
1 1 meritt v. Mi
Dempscy r. Gardner, 440. .
Denike v N. V. R. Lime Ov: C. Co.,

..
Denman v. Campbell, 4^3.
Dennick v. Railroad Co., 269.
Deni si Arnold, 1 27.
Denn
Denny r . Bennett, ig - -

more v. Tomer, 13, 452.
Dent . k>, 7 i<>. -17.

-4-
Denton : . Ontario Co, Nat. Hank. 557.
Department of Parks. .Matter of, 32.
De P 641.

Nat, Hank v. Wickham, 70S.
v. Weyrich, 90, 02, 574.
De Ruyter 1 . St. Peter's Church, 615.
Des I Irisaj v. 1 logan, 145.

: . Wood :4'-

Des Moines ec M. R. Co. v. Alley. 279.
Detroit, etc.. Rolling Mills v, Led-

widge, 140.
Deutsch v. Reilly, 160.
Devoe v. Brand:
Devol v. Mcintosh, Bi, 82.
1 1 11 v. Brownell, 309.
Devonshire v. Gauthreaux, 451.
De Votie v. McGerr, 301, 534.
De Walt v. Doran, 495.
Dewey v. K el ton, B3.

v. Long, 107.

V. Mover. 140, 195, 215,21s, 229,

495-
ng v. Durant, 127.

De Witt v. Van Sickle, 6S0, 689, 692.
De Wolf v. Sprague Mfg. Co., 2SS,

291. z':l- 58l, ;-7-
Dexter v. McAfee, 7. to, 274.

v. Smith.
Dick v. Hamilton, 61, 200, 301.

:■. Lindsay. 47' »,

v. Piti hford, 64, 657, 659.
Dicki •: 51 m . Benham, '104.

. I illinghast, 671 .
Dickinson r. Hankers' Loan, etc., Co.,

273. =74-
v. Burrell, 247.
cson v. McLarney, 419.
Diefei .■ >rf v. Spraker, 214.
1, 60.

r, 93.

7i 534-
Dillman v. Nadelhoffer, 172, 176, 527.
I > in v. Anderson, 370.
Dilworth v. Curts, 323.
Dimmoi k v. Bixby. i"i. .
Dimoi 1 ' . ?i8.

Dimon 1 1

v. Hazard . 589.

Ditman v. Raule, 193, 197, 453.
Divver v. McLaughlin, 407.
Dix v. Briggs, 150.

.- . Van Wyck, 247.
Dixon 7: Hill, 61 :
Doak v. Brubaker, 4f2, 464, 465.
Dobson v. Pearcc, 471

V. Snider. 406, 418, 420, 421.
Dockray v. Mason, in, 255, 264.
Dodd v. Adams, 63.

v. Gaines, 6SS.

v. Levy, 140, 143, 16S.

v. McCraw, 36s. 437.
Dodge v. Freedman's Saw & Trust
Co., 490, 733.

v. Goodell, 495.

v. Griswold, 160.

v. Pyrolusite Manganese Co.,
332.

V. Wellman, 423.
Doe (if. Grimsby) v. Ball, 229.

(</. Abbott) v. Hurd, 717.

(d. Mclntyre) v. Mclniyre, 640.

\d. Davis) v. McKinney, 107, 187.

v. Routledge, 380.

(</. Bland) v. Smith, 520.

v. West, 469.
Doebler's Appeal, 640.
Doerfler v. Schmidt, 272.
Doherty v. Holliday, 217, 709.
Dolin r'. Gardner, 394.
Dollard v. Taylor, 116, 331.
Dominguez v. Dominguez, 507.
Donalds v. Plumb, 659.
Donaldson v. Farwell, 104, 230.
Donley v. McKiernan, 270, 474.
Donnebaum v. Tinsley, 376.
Donnelly v. West, 236.
Donovan t. Dunning, 25, 33, 104, 259,

634.
v. Finn, 41, 68.
Doran v. Simpson, 156.
Dorr v. Beck, 416, 666.
Dorsett ?•. Dorsett, 647.
Dorsey :■. Smithson, 232.
Dorsev Machine Co. v. McCaffrey, 285,

286.
Dortic z'. Dugas, 100.
1 (osi In- v. Nette, 199.
Doucet v. Richardson, 449.
Dougherty v. Cooper, 482, 667.
Doughten v. Gray, 415.
Doughty v. Miller, 717.
Douglass, In >-,-. 390.

v. Huston, 709.
Douglass Merch. Co. v. Laird, 402,

612.
I kmthitt v. Appelgate, 415.
Douw v. Shelden, 55.
Dow v. Berry, (14.

-.-. Platner, 62, 573, 574.
Dowel! v. Appelgate, 393.
I (owner v. Rowell, 311.
Downs v. Kissam, 425.

References] TABLE OF CASKS. [are to pages.

XXV11

Dows v. McMichael, 227.
Doyle v.. Peckham, 231.
Dozier v. Matson. 519.
Drake v. Paulhamus, 704.

7'. Rice 40, 43, 51, 58, 67, 106,
122.
Dresher v. Corson, 412.
Dreutzer v. Bell, 31, 88.
Drexel v. Berney, 24S.
Drexler v. Tyrrell, 712.
Dreyfuss v. Seale, 475.
Dringer v. Receiver of Erie Ry., 9.
Drinkwater v. Drinkwater, 722.
Drucker v. Wellhouse, 5S9.
Drummond v. Commissioners, 132.

v. Couse, 357.
Drury v. Cross, 346.

v. Roberts, 338.

v. Wilson, 703.
Drysdale v. Piggott, 542.
Dubois v. Cassidy, 115.
Dudley v. Congregation, etc., St.
Francis, 293.

v. Danforth, 359, 365, 557.

v. Dudley, 544.
Duffin v. Furness, 40.
Dugan v. Massey, 545.

v. Trisler, 183.

v. Vattier, 232.
Dull v. Merrill, 88.

Dummer v. Corporation of Chippen-
ham, 305.
Duncan v. Custard, 316.

v. Roselle, 539.
Duncan's Appeal, 544.
Dundas v. Bowler, 135.

v. Dutens, 67.
Dunham v. Byrnes, 234.

v. Cox, 271.

v. Griswold, 354.

v. Waterman, 21, 319, 548, 568,
580, 583, 584, 631.
Dunlap v. Bournonville, 434.

v. Hawkins, 189, 191, 208, 376,

377-
Dunlevy v. Tallmadge, III, 141, 142,

148, 149, 159, 172.
Dunn 7\ Chambers, 310
v. Dunn, 190.
v. Whalen, 725.
Dunning v. Mead, 619.
Dunphy v. Kleinsmith, 99, 326, 328,

405.
Dupuy v. Gibson, 219.
Durand v. Hankerson, 262.
Durant r. Pierson, 563.
Duress v. Horneffer, 529.
Durian v. Central Verein, 56, 542.
Dutcher v. Swartwood, 632, 633.
Dutchess Co. Mut. Ins. Co. v. Van

Wagonen, 554, 602, 613.
Duttera v. Babylon, 526.
Dutton t. Jackson, 242.
Duvall v. Rollins, 92.

Dwight v. Germania Life Ins. Co.,

306.
Dyer v. 1 lomer, 717, 722.

v. Tayloi .
Dygert v. Remerschnider, 186, 192,

194, 377, 37'J. 383, 537, 54i.

Eadie v. Slimmon, 56.
Fads v. Mason, 324.

v. Thompson, 542,
Eagle Fire Co. v. Lent, 642.
Eames v. Dorsett, 193.
Earl of Chesterfield r. Janssen, 28, 98.
Early v. Owens, 1S7.
Earnshaw t\ Stewart, 426.
Easterly r. Keney, 653, 654, 659.
Eastlake v. Jordan, 660.
Easton Xat. Bank v. Buffalo Chem.

Works, 271.
Eastwood ?'. Brown, 446.
Kasum 7'. Pirtle, 415.
Eaton ?'. Perry, 736.
Ecker v. Lafferty, 211.

7r. McCallister, 371.
Eckman 7:. Munnerl)-n, 620.
Eddy 7'. Baldwin, 482.
Ede v. Knowles, 59, 195.
Edelsten v. Yick. 73.
Edgell v. Hart, 369, 472, 619, 621, 622,
623.
7'. Haywood, 129.
Edgerly v. First Xat. Bank, 419.
Edgington's Trusts, .AV, 647.
Edmeston v. Lyde, 51, 58, 67, 130, 148,

217, 251.
Edmonson 7'. Meacham, 31.
Edmonston v. McLoud, 115, 708.
Edmunds v. Mister, i2>, 474.
Edson 7'. Cumings, 146.

v. Hayden, 539.
Edwards v. Currier, 368, 371.

7'. Dickson, 452.

v. Entwisle, 61, 209, 539, 540.

v. Harben, 446, 619.

v. McGee, 184, 213.

v. Mitchell, 555.

7'. Reid, 94, 367.

7'. Stinson, 34.
Egbert v. Baker, 551.
Egerv v. Johnson, 6, 637, 665, 667.

6m.
Ehrisman ?•. Roberts. 20, 574.
Eicks v. Copeland, 50 r.
Eigleberger 7r. Kibler, 1S8, 507.
Eilers v. Conradt, <;4.
Eisner v. Heilman, 719.
Eldria^e 7'. Phillipson, 7"4.
Elias 7\ Farley, 66, 574.
Eliot 7'. Merchants' Exchange, 70, 71.
Elizabethtown Saw Inst. ■<■. Gcrber,

142.
Ellett ?'. Newman, 331.
Ellington 7\ Currie, 720.
Elliott 7'. Bently. 529, 539.

X X V 1 1 1

<*] TABLE OF CASES. [are to pages.

tt :•. Pontius. 21?.
Stoddard, .
Elliott's Ex'rs' Appeal, 541.
Ellis :•. 1 [iggins, 717.

: . 1 [orrman, 674.

. . McHenry, 51 8.
Valentine, [9.
Whitlock, 46.
Ellison i Most -
Ellsworth -. Cook, 66.

: Phelps, 630.
Elme Da < 247.

Elmendorf v. Taylor, 512, 516.
Elmer v. Welch. 4:.;
Elmon - ir, 216.
El well v. Johnson. 270.
Ely ' 609.

Emans - . Emans, 219.
Embry :. Palmer, 154, 511.
Embury v. Klemm, 436.
Emerson v. Badger, 71.

v. Bemis, 24. 1-7, 540.

v. Opp, t88, 5 19.

v. Senter, 558, 563. 579. 5§o.
Emery v. Van Syckel, 647.

v. Vount, 272.
Emigrant Ind. Sav. Hank v. Roche,

,. ??4, uoS.
Emma Silver Min. Co. v. Grant, iS.
Emmerich v. Hefferan, 377.
Emmons v. Barton, 226.

Bradley, 424.
Emonds v. Termehr, 414.
Enders v. Swayne, 41 •'>
England t'. Adams, 104.

v. I )• iwns, 544.

v. Russell, 137, 139.
English v. Friedman, 565.
Engraham v. Pate, 30, 400. 435, 436, 497.

. 'Tuttle, 493.
Erb v. Cole, 7

v. West, 387, 562.
Erdall v. Atwood, 234. 4- =
Erfort v. Consalus, 267, 501.
Erickson v. Paterson, 63.

linn, 12?, 285, 2S6, 315, 513.
Frn^t v. Shinkle,
Estabrook v. Messersmith, 231.
1 , 254, 316.

Guntei 565, 593, 610,

r . I lowland, 223, 224-

v. Wil( ox, in. i - i. [55, 1 56, [65,
171. 1 77
:< k v. Caillaud, 23, : .
mg, 14^1.
Ether; sperry, 472

Ettlinger 1 . Kahn, 5
I Bolles, 185.

Bicknell,
r . I [amilton,

v. Hill, 140, [65, 17'..
v. Tones, \ 1 2

• . 1 • -44-

Evans v. Rugee, 539.

v. Wall, 660.

v. Warner, 604.
Evans Co. v. Reeves, 689.
Everett v. Raby, 166.
Everingham v. Vanderbilt, 318.
Everitt v. Everitt, 77.
Every v. Edgerton, 46S.
Ewing v. Handley, 224.

v. Runkle, 357.
Exchange Bank of St. L. v. Rice, 82.
Eyre v. Potter, 294, 330.
Eyston, Ex parte, 647.

Failey v. Stockvvell, 591.
Fairbanks v. Antrim, 47.
Fairchild v. Lynch, 569.
Fairfield v. Baldwin, 409.
^Fairfield Bridge Co. v. Nye, 449.
Fairfield Packing Co. v. Kentucky

Jeans Clothing Co., 594.
Falconer v. Freeman, 160, 175.
Falk v. Janes, 239.
Falkner v. Leith, 394.
Fanshawe v. Lane, 579.
Fargo v. Ladd, 724.
Farley v. Carpenter, 675, 676, 678, 680.

v. Kittson, 302, 303.
Farlin r\ Sook, 324.
Farmer v. Calvert, 13.

v. Walter, 354.
Farmers' Bank v. Douglass, 375, 635,

690.
Farmers' & M. Nat. Hank v. King, -3.
Farmers' & M.Sav. Bank v. Brewer, 659.
Famed v. Harris, 153, 172.
Farnham v. Campbell, 62.
Farnsworth v. Bell, 244.

v. Strasler, 149.

7 . Wood, 238.
Farrar v. Bernheim, 716, 719, 724.

v. Haselden, 169.
Farrington v. Stone, 435.
Farrow v. 1 laves, 20, 569, 608.
Earwell v. C(jhen, 550, 608.

v. Furniss, 604.

7'. Xilsson, 594, 596.
Fassit v. Phillips, 55.
Faulkner z\ Hyman, 614.
Faxon v. Ball, 307.
Fay 7. (Irant, 574, 610.
Fearn 7'. Ward, 181.
Fecheimer v. Baum, 104.

7'. Hollander, 170.

7'. Robertson, 548.
Feigley "•. Feigley, n, 222, 244.
Fein v. l"<in, 244.

. Randall, 712.
Felch 7'. Bugbee, 517.
Felix v. Patrick, 2S3.
Fell V. Brown, 250.
Fellows 7'. Emperor, 386.

V. Fellows, 16, 251, 260, 290.

v. Lewis, 31.

References'] TABLE OF CASES. [are to f ages.

Fellows v. Smith, 187, 188.
Felton v. Wadsworth, 409.
Fenelon v. Hogoboom, 529.
Fenner v. Dickey, 28, 711.
Fera v. Wickham, 562.
Ferbrache v. Martin, 474, 486.
Ferguson v. Bobo, 140, 270.

v. Dent, 136.

v. Hillman, 322, 324, 669.

v. Kumler, 92.

v. Spear, 523, 703.
Ferris v. Irons, 497.

v. McQueen, 405, 406.
Fessenden v. Woods, 235.
Fetter v. Cirode, 408.
Feurt v. Rowell, 618.
Fick v. Mulholland, 13.
Fidelity Ins.,T. & S. D. Co. v. Hunt-
ington, 260, 521.
Fidler v. John, 613.
Fiedler v. Darrin, 269, 505.
Field v. Andrada, 227.

v. Chapman, 102.

v. Hastings & B. Co., 2S1.

v. Holland, 304.

v. Holzman, 332.

v. Ridgely, 421.

v. Sands, 235, 709.
Fifield v. Gaston, 357.
Filebeck v. Bean, 624.
Filer v. N. Y. Central R. R. Co.,

392-
Filley v. Register, 437.
Finch v. Houghton, 336.
Fincke v. Funke, 236.
Finding v. Hartman, 454.
Findlay 7'. McAllister, 101, 117, 121.
Fink v. Denny, 194.

v. Jetter, 308.

v. Patterson, 167.
Finn v. Krut, 91.
Finnin v. Malloy, 89.
First Mass. Turnp. Co. v. Field, 514.
First Nat. Bank ?•. Anderson, 634.

v. Bertschy, 341, 362.

v. Buck, 484.

v. Chalmers, 81.

v. Cooper, 229.

v. Cummins, 347, 350.

v. Dwelley, 95.

v. E. T. Barnum Wire & Iron
Works, 336, 33S.

-'. Gage, 332.

v. Hamilton, 357, 530.

v. Holmes, 592.

v. Hosmer, 128, 295.

v. Hughes, 598.

v. Irons, 10.

v. Jaffray, 423.

v. Kansas City Lime Co., 480.

v. Kavanagh, 523.

v. Knowles, 430.

v. Lowrey, 501.

v. Moffatt, 435.

First Xat. Bank :■. Schuk-r, 129, [48,
249, 253, 256, 261.

v. Sloman, 154.

v. Smith, 435.

7-. Wittich, 620.

v. Wood, 413.
Fish v. Clifford, 450.
Fish Bros. Wagon Co. v. La Belle

Wagon Works, 72.
Fishel v. Ireland, 417.
Fisher, Ex parte, 714.

v. Andrews, 144.

v. Bassett, 248.

v. Bishop, 730.

v. Boody, 329.

v. Henderson, 33, 634.

v, Herron, 435.

v. Lewis, 204.

v. Moog, 435, 47S.

v. Shelver, 415, 435, 527.

7\ Taylor, 6^0, 662.

v. Tulter, 286.
Fiske 7\ Foster, 517.
Fitch v. Burk, 466.

v. Smith, 298.
Fitzburgh v. Everingham, 331.
Fitzgerald v. Quann, 46.
Flack v. State of X. Y., 126.
Flagg v. Mann, 303, 674.

v. Wellington, 501,
Flamank, //.• re, 536.
Flanagan r. Wood, 464.
Flannery v. Van Tassel, 4S7, 4S9, 490.
Flash v. Conn, 26S, 269.

v. Wilkerson, 220, 349.
Fleischer v. Dignon, 434.
Fleming v. Buchanan, 76.

v. Grafton, 139, 142.

v. Slocum, 10.

v. Yost, 480.
Flemington Xat. Bank 7\ Jones, 358.
Fletcher r. Ashley, 544.

v. Bonnet, 451.

v. Fletcher, 726, 728.

r. Holmes, 140, 155, 229.

v. Martin, 312, 630.

v. Peck, 668.

v. Powers, 626.
Flewellen v. Crane, 274.
Fliess v. Buckley, 121.
Flint 7\ Clinton County, 615.
Florence S. M. Co. v. Zeiijler, 34, 366.
Flournoy v. Johnson, 660.
Flower t\ Cornish, 231.
Flynn 7\ Jackson, 534.
Focke v. Blum, 577.
Fogg v. Blair, 131, 237, 23S, 240, 268.

v. Lawry, 125.
Foley v. Bitter, 109, 133, 361.

v. Burnell, 64.
Follansbee v. Follansbee, 545.
Folsom v. Clemence, 418, 419,
Fonda v. Gross, 470.
Foote v. Cobb, 187.

XXX

,] TABLE OF (ASKS. \aretofage*.

Fort"

i . I [owe, 714.

erby, :m.
nell, 433.

:. Walu-r. 173, 371, 557, 55S.
I . Brown,

Ford v. Chambers, 467.
52.

: . 1 Ian ington, 729.

: . 1 [ennessy, j

1 . Johnston, 51, 183, 194, 416.

v. Williams .631.

Forde :. Exempt Fire Co.. 224.
Fordyce t . Hicks, 709.
:ner v. Stuart, 449.
Forrest* r 1 . M<

F<.rsyth v. Matthews, 454. 435.
Former v. Whelan, 7.
Fort Payne Bank v. Alabama Sani-
tarium, 241, (

Stanwix Hank v. Leggett, 229,
261, 262, 553.

k ?■. Delaneld, 24^.
Foster v. Brown, 7.

v. 1 [83, 187, 222, 346.

v. Hackley, 22

v. 1 [all, 357. 490.

r . Know fes, 413.

v. McGregor, 31, SS.

v. Mansfield, C. & K. M. R. R.
Co., 507, 508.

- Saco Mfg. Co., 581.

v. Smith. 640.

v. \ < iwnshend, 236.

v. Wallace, 454.

v. Woodfin, 23, 407.
Fouche v. Brower, 1.
Fourth Xat. Bank r-. Stout, 740.
Fowler v. Frisbie, 1S3.

v. Icnkim

i . McCartney, III.

v. Tr< /. 133.

Fowler's Appeal, 113, 155, 226, 333.

. Curtis, 336, 563.

7'. 1M wards, 1 -

7 . I lills, 38, 51, 244, 24;.

-■■ Moj 1 ■ 1 28, 142, 155, 177,
1;-. 1 91, 253. 254, 265, 534.
7. Peck, •
7'. Wallace, 151.
Frakes v. Brown, 244.
Fram i- 7. I 140, 162, 206,207.

Page .
v. Rankin
I lirre, 717.

7. Ryan. I
Francklyn -. . Fern, 229.
Franey v. Smith
Frank 7 . Bobbitt, 124, 551.
sler, 17".

v. King, 526, 527.

7. Mutual K. I

v. Robinson, 610.

Frank's Appeal, 362.
Frankhouser v. Ellett, 626.
Franzen v. Zimmer, (115.
Fraser v. Charleston, 265.

v. Thorn]
Frazer v. Thatcher. 365, 704.
Frazier v. Barnum, 337, 661.

7 . Fredericks, 446.
Frederick v. Shorey, 533.
Fredericks 7. Davis, 733.
Freedman's Saw & T. Co. 7 . Earle, 70S.
Freeholders of Hunterdon v. Henry,

661, 662.
Freeland 7'. Freeland, 45, 185, 231, 232,

722.
Freelove v. Cole, 72^.
Freeman 7'. Bowen, 647.

7'. Deming, 229.

7'. Klmendorf. 245.

7'. Freeman, 519.
. I [artman, 544.

7'. Pope, 1-7.

v. Sedwick. 726.

v. Smith, 93.
Freider v. Lcinkauff, 140.
Frelinghuysen 7r. Nugent, 83.
French z\ Andrews, 616.

7'. Rreidelman, 319.

7'. Burns. 423.

v. Kdwards, 571.

t'. French, 17, 59, t\.

v. Holmes, 23, 55, 79, 188, 190,
437. 538.

7\ Motley, 387, 506, 525, 703.

7'. Shotwell, 247. 736.
Frenche v. Kitchen, 50S.
Freund, v. Yaegerman, 594.
Friedburgher v. Jaberg, 564, 610.
Friedenwald ?■. Mullan, 30S, 666.
Friedman 7'. Fennell, 57.
Frisbey v. Thayer, 142.
Frisk 7 . Reigelman, 430, 432.
Frith v. Cartland, S3.
Frost v. Mott, 15s, 159, 262.

7 . Warren, 407.
Frothingham v. Hodenpyl, 140, 147.
Fulkerson v. Sappington, 480.
Fullagar v. Clark, 9S.
Fuller v. Bean, i -4.

7. Brewster, 7, n. 190, 415, 426,
468, 473.

7. Brown, 21, 1S3, 1S7.

7'. Griffith, 424.

7. Kent, 56.

v. Pinson, 671.

7. Roberts, 354.
Fullerton v. Viall, 322, 323.
Fullington Northwestern Imp., etc.,

Assoc, 197.
Fulp v. Beaver, 7, 523.
Fulton 7. Fulton, 040.

7'. Woodman, 301, 698.
Funkhouser 7. Lay. 69S.
Furman v. Tenny, 92.

Reference* \ TABLE OF CASES. [are towage*.

XXXI

Fury v. Strohecker, 62.
Fusze z'. Stern, 130.

Gable v. Columbus Cigar Co., 1, 203,

374, 392, 527, 529-
Gadsden v. Woodward, 269.
Gaftney's Assignee v. Signaigo, 424.
Gage v. Dauchy, 95, 532, 533.
Gainer v. Russ, 304.
Gaines v. Chew, 288.

v. Relf, 137.
Galbreath v. Cook, 395.
Gale v. Williamson, 187.
Galentine v. Wood, 225.
Gallagher, /;/ re, 69.

v. Rosenfield, 619, 623.
Gallagher's Appeal, 390.
Gallatian v. Cunningham, 308.
Galle v. Tode, 319, 35S, 603.
Gallman v. Perrie, 100, 108, 246.
Galpin v. Galpin, 722.
Gamber v. Gamber, 530.
Games, Ex parte', 619.
Gannard v. Eslava, 182, 187.
Gans v. Thieme, 348.
Garahy v. Bayley, 674.
Garbutt v. Smith, 62.
Garden v. Bodwing, 619.
Gardenier v. Tubbs, 470.
Gardiner v. Sherrod, 118.
Gardiner Bank v. Wheaton, 17.
Gardinier v. Otis, 322.
Gardner ?'. Baker, 181.

v. Broussard, 431.

v. Cole, 37, 66S.

v. Commercial Nat. Bank, 567.

v. Gardner, 144.

v. Kleinke, 187, 197.

v. Lansing, 177.

v. McEwen, 410, 621.

v. Ogden, 738, 739.

v. Oliver Lee's Bank, 517.
Gardner's Admr. v. Schooley, 392.
Gardom v. Woodward, 370, 494.
Garesche v. MacDonald, 67S.
Garfield v. Hatmaker, 107, 108, 164, 242.
Garland v. Garland, 644, 655, 658, 660.
Garman v. Cooper, 453, 461.
Garner v. Graves, 224, 490.

v. Second Nat. Bank, 147, 531,

535- 536, 593-
Garnsey v. Rogers, 81.
Garr v. Klein, 523.
Garrahy v. Green, 491.
Garretson v. Hackenberg, 446, 466.

v. Kane, 68, 735.
Garrett v. Warner, 539.
Garrison v. Monaghan, 55, 80.
Garrity v. Haynes, 533.
Garrow v. Davis, 304.
Garvin v. Williams, 730.
Gary v. Jacobson, 726.
Gasherie v. Apple, 605.
Gates v. Andrews, 563.

Gates v. Boomer, 215, 218.

; . Mow rv, 733.

v. Young, 1 15, 125.
Gay v. Bidwell, 22, 625.

v. Hamilton, 423.

v. Parpart, 1 14.
Gayler v. Wilder, 73.
Gaylord v. ImhorT, 93.
Gaylords r. Kelshaw, 252, 254.
Gebhard v. Sattler, 720.
Gebhart v. Merfeld, 51, 221, 245.
Geery v. Geery, 57, 142, 156, 177.
Geisse v. Beall, 555.
Geist v. Geist, 396.
Genesee County Bank v. Bank of

Batavia, 219.
Genesee River Nat. Bank v. Mead,

208, 276, 377.
Genet v. Beekman, 639.
Gentry v. Kelley, 370, 494.
George v. Grant, 563.

v. Milbanke, 76.

v. Norris, 452.

v. Williamson, 129, 130, 223,
708, 717.
Gere v. Murray, 568.
German Bank v. Leyser, 224, 226.
German Ins. Bank v. Nunes, 433, 572.
Gerrish v. Mace, 246.
Gettelmann v. Giti, 529.
Getzler v. Saroni, 31.
Ghormley v. Smith, 662, 663.
Gibbons v. Pemberton, 176.
Gibbs v. Neely, 497.

v. Thayer, 231.

v. Thompson, 407, 430.
Gibson v. Crehore, 224.

v. Herriott, 512.

v. Hill, 452.

v. Jeyes, 729.

v. Love, 453.

v. Seymour, 424.

v. Shufeldt, 740.

v. Warden, 230.
Giddings v. Sears, 480, 703, 705.
Gifford v. Corrigan, 81.

v. Helms, 284, 513.
Gilbert v. Decker, 452.

v. Glenny, 530.

v. Lewis, 274.

v. Stockman, 166.
Gilhooly v. American Surety Co., 307.
Gill v. Carter, 29.

v. Griffith, 422.

v. Weston, 333.
Gilleland r'. Rhoads, 93.
Gillespie v. Allen. 374.

v. Cooper, 287, 513.
Gillet z\ Moody. 237.

v. Phelps, 427.
Gillett v. Bate, 95, 325,

?■. Gaffney, 469.
Gillette v. Bate, 73, 74. 84.
Gilliland v. Jones, 361.

XXXI 1

FABLE OF CASES. [are towages.

Gilman :. Hunnewell, 71.
i ,-iockwood, 517.

. Hutchinson. 135, 291, 543.
Ginn : . Brown, 144.
Gintber v, Richmond, 549. 59°> 6o6-
lit : A. P. Hbtatihg Co., 534.
Vounglove, 539.
Brandon, 525.
- . Zutavern, -
>n v. Fayerweather, 640.
7. Wilson. 276, 630.
Glen v. Hope Mut. Life Ins. Co., 81.
Glendon Iron Co. v. L'hler, 567.
Glenn v. Farmers' Bank, 170.

I rlenn, 410.
Glenny v. Langdon, 229, 230, 235, 591.
Glidden ; . Hunt, 698.

704.
Goddard v. Weil, 459, 465.
Godden :. Kimmell, 512. 516.
('■■Hiding v. Brackett, 10S.
Godfrey v. Germain, 416.
v. Miller, 431, 690.
Goe's Estate, 663.
Goff v. Kelly, 231.

v. Rogers, 397, 406, 407.
Gogebic Inv. Co. v. Iron Chief Min.

Co., 241.
Goldsmith v. Goldsmith, 276.

v. Russell, 60, 127.
Goll & F. Co. v. Miller. 1S0.
Gollober v. Martin. 431, 6S9, 691.
Gollobitsch v. Rainbow, 498.
Gome/ v. Hagaman, 703.
Gooch's Case, 46.
Goodbar v. Cary, 388, 3S9.
Goodbar Shoe Co. v. Montgomery, 613.
Goode v. Garrity. 140.
: . 1 lawkins, 9.
Goodcll v. Fairbrother, 45a.
Goodheart tjohnson, 619.
Goodman v. Harvey, 6S7.
v. Simonds, 9.
7. Wineland, 437.
Goodnow v. Smith. 47'j.
Goodrich z\ Downs, 568, 573.
. in :■. Hubbard, 358.
V. Kelly, 463.
V. Snyder, 312.
v. Wertheimer, 301, 561.
I iwii v. Goodwyn, 717.
Goodyear Vulcanite Co. t\ Frisselle,
1 i'.. 1--4

ns 7. Gilmore, 44'). 625, 635.
. in, Matter of, 573.
7. Anthony, 73.
7'. Cannon, 347.
Hobart, 137.
Reynolds, [81, 294, 296.
Ritenour. ;
7. Worthley, 537.

Gorham v. Innu
Gormerly v. Chapman, 109, 133.
• . . Potter, in.

Gcrrell v. Dickson, 73, 136.

Goshorn v. Snodgrass, 15, 400, 402,

405, 410, 432, 666, 698, 700.
Goss 7'. Neale, 704.
Gottlieb 7'. Thatcher, 435, 436.
Goudy v. Gebhart, 722.
Gould v. Emerson, 56, 541.

v. Sieinburg, 246.

7'. Ward, 418.
Governor r. Campbell, 357, 558.
Cowan 7. Gowan, 725, 737.
Grabill v. Moyer, 524, 525, 535.
Graff v. Bonnett, 86.
Graff's Estate, 34S.
Graffam v. Burgess, 7.
Gragg 7'. Martin, 375.
Graham v. Chapman, 18.

v. Culver, 309.

v. Furber, 432.

v. Meyer, 711.

v. Railroad Co., 205, 240, 247,

359- 377, 717. 736-
Graham Button Co. v. Spielmann, 237.
Grand Island Banking Co. v. Costello,

425-
Granger v. George, 514.
Grant, Ex parte, 69.

7 . Carpenter, 640.

v. Gre» n, 393.

v. Lewis, 460.

v. Libby, 502.

v. Lloyd, 310.

?•. Morse, 733.

v. National Bank, 9, 694.

v. Sutton, 524, 527, 529.

v. Ward, 9, 188, 528.
Graver v. Faurot, 741.
Graves r'. Blondell, 25, 34.

v. Corbin, 252, 260, 521.

v. Davenport, 392, 526.

v. Dolphin, 64, 646, 654.

v. Graves, 370, 494.
Gray 7'. Blanchard, 640.

v. Chase, 128.

v. Corbit, 660.

v. Galpin, 434.

7. McCallister, 364.

v. Obear, 640.

V. Schenck, 250, 258.
Great Falls Mfg. Co. v. Worster, 738.
Great Western Tel. Co. v. Burnham,

123.
Greaves v. Gouge, 144, 221, 225.
Greeley '•. Dixon, 577.
(ireen v. Adams, 222.

7\ CreiKhton, 137, 156.

v. Early, 692.

7 . Givan, ibS.

v. 1 licks, 251.

v. Kimble, 118.

v. Milbank, 249.

v. Nixon, 28.

r1. Richardson, 81.

v. Sarmiento, 517.

References'] TABLE OF CASES. [are to pages.

XXX 1 1 1

Green v. Spicer, 646, 657.

v. Tanner, 302.

v. Tantum, 67.

z. Trieber, 20.

v. Van Buskirk, 123.

v. Walkill Nat. Bank, 263.

v, Wallis Iron Works, 233.
Greene v. Breck, 220.

v. Greene, 87.

v. Keene, 67, 73.

v. Sprague Mfg. Co., 1S4, 214.
Greenebaum v. Wheeler, 454, 623,
Greenfield's Estate, 188.
Greenleaf v. Mumford, no, 159, 175,

241.
Greenleve v. Blum, 363.
Greenway v. Thomas, 140, 16S, 169.
Greenwood v. Brodhead, 51, 149.

v. Marvin, 320.
Greer v. O'Brien, 418, 433.
Gregg v. Bigham, 476.

v. Cleveland, 583, 610.
Gregory v. Gray, 4I0> 435-
Grider v. Graham, 720.
Gridley v. Watson, 190.
Griffin v. Barney, 575, 606, 609.

v. Doe d. Stoddard, 214.

v. Macaulay, 726.

v. Marquardt, 370, 557, 559, 568,
616, 668.

v. New Jersey Oil Co., 391.

v. Nitcher, in, 140, 141, 142.

v. Peters, 390.

v. Stanhope, 419.
Griffith v. Griffith, 297, 672, 673.

v. Parks, 484.

v. Townley, 349.
Grimes v. Hill, 489.
Grimes D. G. Co. v. Shaffer, 368, 481.
Grimsby v. Ball, 229.
Grimstone v. Carter, 674.
Griswold v. Sheldon, 443, 459, 622.
Grocers' Bank v. Murphy, 69.
Grogan v. Cooke, 58, 67.
Gross, Estate of, 79, So.

v. Daly, 143, 15S, 175, 241.

v. Eddinger, 526.
Grotenkemper v. Harris, 437.
Grover v. Grover, 301.

v. Wakeman, 7, 10, 18, 26, 363,
548, 573, 577, 590, 607.
Grover & B. S. M. Co. v. Radcliff, 277.
Groves v. Rice, 233, 547.
Grubbs v. Greer, 433.
Grunsky v. Parlin, 358.
Guckenheimer v. Angevine, 340, 349.
Guerin v. Hunt, 592, 593, 598.
Guernsey v. Powers, 335.

v. Wood, 517.
Guest v. Barton, 718.
Guice v. Sanders, 451.
Guidry v. Grivot, 35, 242, 723.
Guignard v. Aldrich, 470.
Guillander v. Howell, 123.
C

Guion v. Liverpool, I.. & (\. Ins. Co.,

476.
Gullickson : . Madsen, 1 1 1
Gumberg v. Treusch, 372, 401.
Guthrie r. Gardner, to8, 164.
Gutzweiler t. Lackmann, 12.
Gwin ,-'. Selby, 102.
Gwyer v. Figgins, 188.

Haack z>. Weicken, 728.
llaak's Appeal, 246, 366, 717.
Haas ?'. Chicago Bldg. Soc, 336.

7'. Sternbach, 354, 421.
Habenicht -'. Lissak, 71, 337.
Hackett v. Jvlanlove. 617.
Hackley v. Headley, 354.
Hadden v. Spader, 16, 40, 51, 58, 67,

74, 107, 130-
Hadley v. Morrison, 61.
Hadock v. Hill, 674, 688.
Haenschen v. Luchtemeyer, 492.
Hafner v. Irwin, 5, 419, 422, 556.
Hagan v. Walker, 156, 166.
Hagar v. Shindler, 247, 317.

v. Thomson, 9, 12.
Hagerman v. Buchanan, 193.
Haggarty v. Pittman, 103.
Haggerty v. Nixon, 107, 140.
Hahn v. Penney, 486.
Haines v. Hollister, 251, 259, 261.
Halbert v. Grant, 157.
Hale v. Baldwin, 517.

v. Metropolitan Omnibus Co.,

44«-

v. Nashua & L. R. R. Co., 289.

v. Sweet, 457, 632.

v. Tavlor, 370.

v. West Va. Oil & Land Co., 47S.

v. Wetmore, 223.
Hall v. Arnold, 26, 357, 365.

7\ Callahan, 224.

v. Germain, 357.

v. Hall, 29, 77.

v. Law, 512.

v. Marston, 81.

v. Moriarty, 213.

v. Ritenour, 486.

v. Russell, 516.

v. Sands, 55, 183.

v. Stryker, 160.

v. Tufts, 643.

v. Williams, 656.
Hallet's Estate, /// re, S3.
Hallett ?'. Thompson, 65, 85, 654, 661.
Hallgarlen v. Oldham, 614.
Halloch 7'. Alvord, 494-
Hal'oran v. Halloran, 737.
Hallowell v. Bayliss, 231.
Halsey v. Cheney, 511.
Halstead 7'. Grinnan, 507.

v. Westervelt, 66i, 662.
Halsted t. Halsted, 121.
Ham 7'. Gilmore, 432.

v. Van Orden, 396.

XXXIV

■• »] TABLE OF CASKS. [are to pages.

Hamburger v. Gram. 54.
Hamett v. Dundass, 30, 181, [82.
Hamilton v. Cone, 107, 1-7. 104,242,

:. Russel, 37. 4.52, 453.

-. Scull, 722.
Hamilton Nat. Hank v. Halsted, 6, 321,

. 344. 34?. 718.
Hamilton- Brown Shoe Co. v. Mercer,

550.
Hamlen v. McGillicuddy, 111,258, 271..
Hamlin :. Wright, 217. 21S, 234, 236,

Hammond v. Hopkins, 283,507, 511,
516.

v. Hudson River I. & M. Co.,
220.
Hanby v. Logan, 80.
Han ars, 1 16, 117.

Hand v. Kennedy. 81.
Handley v. Stutz, 237.
Hanes v. Tiffany, 232.
Hanfonl v. Artcher, 393, 451, 458, 4',(>-

v. ( >brecht, 470.

V. Paine, 614.

. Prouty, 389.
Hangen 7. Hachmeister, 347, 619, 621.
Hann v. Van Voorhis
Hannan v. Oxley, 529.
Hanover N'at. Bank v. Blake, 711, 713.

v. Klein, 304.
Hanover R. R. Co. z\ Coyle, 487.
Hanson ?■. Bean, 406, 409.

v. Buckner, 1-7.

v. Metcalf, 563.
Hap^odd v. Lisher, 667.
Hard v. Ashley. 371.
Hardenburgh v. Blair, 661.
Hardesty v. Kinworthy, 4S2.
Hardey v. Green, 190.
Harding v. Bunnell, 306, 307.

v. Elliott, 100, 365.

7 . 1 iandy, 274.
Hardmann v. Bowen, 558, 565, 592.
Hardt v. Heidweyer, 284, 2^5,425, 596.
Hardware Co. ?■. Implement Co.. 597.
Hardy v. Mitchell, 519.

v. Potter, 449.

7. Simpson, 22, 24.
I tlai ksheai
Harkness v. Russell, 450.

mi 7'. Maglaughlin, 306.
I larlin v. Stevenson. .
Hannan v. Hoskins, [9, 20, 22, 351.

Harmon ■ I larmon, 717.
Harper v. I larper, 733.

I'' ' ! ',

I larrell v. < rodwin, 449.
V. Kim. - I",.

7. Mit. hell, 394. 404. 432. 43?.

1 [arriman v. Gray, 545.

Harris v. Alcock, 407.

Harris v. Burns, 428.

z\ Harris. 183, 244, 728.

z\ Russell. 359, 407, 491, 492.

v. Sangston, 338.

7 . Sumner, 609, 702.
Harrison v. Gibbons, 150.

7'. Hallum, 2q

7. Mayor, etc., of Southampton,
29.

r. Trustees of Phillips Academy,
424.
Hart,. Matter of, 227.

v. Chalker, 391.

v. Flinn, 302.

7 . Sandy, 42S, 429, 431, 432.

v. Sansom, 730.

v. Ten Eyck, 219, 308.

7'. Wing, 454.
Harter v. Christoph, 13.
Hartlepp v. Whiteley, 271.
Hartley :■. White. 387.
Hartman v. Oilier. 497.
Harton v. Lyons, 487, 493.
Hartshorn v. Eames, 26, III, 301, 363,
410, 416, 426, 429.

7'. Williams. 424.
Harvey v. Bresbin, 79.

v. McDonnell, 229, 262, 547.

v. Varney, 71''. 7~, 723. 733-
Harvey's Estate. /// re, 77.
Harwick z-. Weddington, 399, 494.
Harwood v. Railroad Co., 511.
Hasie v, Connor. 9, 12, 411, 6SS, 703.
Haskett v. Auhl. < 3q.
Hassam v. Barrett, 423, 425. 737.
Haston v. Castner, 155, 166, 1S6, 187,

206, 226.
Haswell v. Haswell, 047.
Hatch 7'. Bayley. -.

v. Dana, 68, 131. 237, 240, 241.

7 . Daniels, 33S.

v. Dorr, 12<).
Hathawav 7. Brown, 37". 37L

v. Moran, 570, 572.

v. Noble, 507.
Hatstat 7'. Blakeslee, 452, 453.
Hauer's Estate, 530.
Hauselt v. Harrison, 618.

7. Vilmar, 3<>4, 600.
1 l.tven ?'. Richardson, 1 1 -
. 660, 661.
1 [awes v. Loader, 223.

7 . ( >akland, 144, 221.
Hawkins v. Alston, 4"-.

7r. Davis, •

v. Galhercole, 336.

v. CI tin. 172.

7. Hastings Lank, 630, 631.

7 . Kan-. is City I L P. B. Co., 465.
I [awley v. Cramer, 0S9.

7'. Fairbanks, 740.

z'. 1 lamp ton, 93.

v. 1 lunt, ?i7.

v. James, 560.

References'] TABLE OF CASKS. \are to pages.

XXXV

Hawley v. Northampton, 640.

Haxtun v. Bishop, 615.

Haydock v. Coope, 547, 577, 578, 715.

Haydock Carriage Co. v. Pier, 560.

Hayes v. Westcott, 348.

Haynes v. Brooks. 563, 579

v. Hoffman, 6

:•. Hunsicker, 466.

v. Rogers, 36S, 47-.
Hays v. Montgomery, 3S1.
Heacock v. Durand, roi, 588.
Heard v. Murray, 337.

- . Sturgis, 552.
Heartt v. Corning, 303.
Heath v. Bishop, 65, 657, 660.

v. Heath, 106.

v. Page, 25. 183, 319, 49S.
Heaton z\ Prather, 674.
Hebbard v. Iiaughian, 396.
Heck v. Fisher, 60.
Heckman v. Messinger, 89, 553, 574.
Hedges v. Polhemus, 633, 635.
Hedman v. Anderson, 626.
Hedrickf. Strauss, 375, 668, 671.
Heeren v. Kitson, 392.
Hefner v. Metcalf, 26.
Hegeler v. First Nat. Bank, 421.
Hegewisch v. Silver, 337.
Heiatt v. Barnes, 149, 150, 188.
Heilman v. Jones, 247.
Heineman v. Hart, 234.
Heintze v. Bentley, 406.
Helms v. Green, 402, 432, 528.
Hempstead v. Johnston. 7.
Henckley v. Hendrickson, 7.
Henderson v. Brooks. 150.

v. Downing, 634.

v. Henderson, 1S0, 211, 317, 432.

v. Hoke, 209.

v. Hunton, 343.
Hendricks v. Mount, 214.

v. Robinson, 16, 148, 2S1.
Hendrickson v. People, 400.
Hendrix v. American F. L. M. Co.,

336-
Henkel, In re, 91.
Henley v. Hotaling, 423.
Hennequin v. Clews, 339, 518.
Henning v. Harrison, 640.
Henry v. Harrell, 406.

v. Henry, 49S.

v. Hinman, 25, 34, 100, 109, no.

v. Sargeant, 269.

r. Vermilion R. R. Co., 68.
Hentz v. Phillips, 265.
Hepworth v. Union Ferry Co., 1S3.
Herkelrath v. Stookey. 405.
Herman v. McKinney, 667.
Herrick v. Borst, 278, 481, 482.
Herring v. N. Y., L. E. & W. R. R. Co.,
141.

v. Richards, 12, 190, 191, 194, 212,
366.

v. Wickham, 7, 9, 374, 383, 530.

Herrlich r. Brennan,

I [ershy v. Latham,
Hess v. H 262.

. Voss, 664.

. Stevenson, 73, 74.
Hesser r . Wilson, 454.
1 [esthal v. Myles, 454.
Hevenor, Matter of, 550, 551.
Hewitt v. Commercial Banking Co.,
368.

v. Williams, 523.
Hews v. Kenney, 534.
Heydock v. Stanhope, 135.
lleve v. Bolles, t6o, 175.
Heyneman v. Dannenberg, 166, 332.
Heywood v. City of Buffalo, 245.
Hibernia Ins. Co. v. St. Louis, etc., Tr.

Co., 241.
Hibernia Nat. Bank v. Lacombe, 614.
Hickey v. Ryan, 482.
Hickman v. Trout, 399, 402, 403.
Hickox v. Elliott, 24, 253, 255.
Hicks 7'. Campbell, 290.

v. Sharp, 491.
Hiern v. Mill, 672.
Higby v. Ayres, 215, 218.
Higgins v. 'Crouse, 273, 2S7, 351^507,
6S4.

v. Gillesheiner, 236.

v. Spahr, 429.
High v. Wilson, 520.
Hildebrand v. Bowman, 89, 574.
Hildeburn v. Brown. 419.
Hildreth v. Fitts, 463.

v. Sands, 246, 419, 46?.
Hilgenberg v. Northup, 8.
Hill, Ex parte, 647.

Matter of, 147.

v. Agnew .

v. Ahern, 670.

v. Bowman, 404, 704.

v. Draper, 562.

v. Reed. 615.

v, Ryan Grocery Co., 303.

v. Wood berry, 564, 566.
Hilliard v. Cagle, 206, 366, 419, 421.

V. Phillips, 492.
Hills v. Carlton, 516.

v. Eliot, 4S0.

. . Sherwood, 156, 224, 476.
Hilton v. Guyot, 154.

v. Morse, 193, 366.
Hinchliffe v. Shea, 54?.
Hinchman v. Parlin & <). Co., 526.
Hinckley v. Kreitz, 222.
Hinde v. Vattier,

Hinde's Lessee v. Longworth, 1S9, 190,
194, 205, 208, 380, 395, 437, 534. 54o.
Hinds v. Hinds, 183.

v. Keith, 370, 478, 689.
Hine <-. Bowe, ?4"-
Ilines v. Hawkins, 489.
Hinkle v. Wilson, 526, 539.

. ! TABLE OF CASES. [are to pages.

Hinkle's Appeal, 663.
Hinton .- . Greenleaf, 497.
Hrrschfeld :. Williamson, 490.

, Hartford L. 1. Co., 57.
Hisle v. Rudasill, 381,
Hitch< mus 581.

1 . Kielj 376.

Hitt v. Ormsbei
Hixon r . George, 91, 92.

- iyre, 4' >8.
Hi. ban v. Hobart, 243.

5 ; . D.i\ is, 35, 365, 36S.

, Smith, ''4i . '
11. >l.i. ken Hank v. Beckman, 303, 306.
1 [01 key v. Mawbey, 77.
Coleman, 705.
New England Screw Co., 27.1.

;. Silver Hill Min. Co., 145. I?S.

:. Spicer, 4.13.

v, Winston, 92.
Hodgman v. Western R. R. Co., 553,
Hodgson v. Butts, 3S0.

v. Newman, 408.
Hoey v. Pierron, 539.
Holler v. Gladden, 432.
Hoffman V. Henderson, 502.

-.Junk, 51, 1S3, 244, 366.

7. Mac kail, 26.

v. Noble, 45.

v. N'olte, 52S, 529.

v. Pitt, 446.

: . Susemihl, 7
Hoffman's Appeal, 133.
1 (ogan v. Burnett, 1 ,2.
Hoke v. Henderson, 699.
Holbird v. Anderson, 26, 363, 365,408,

7"4-
Holbrook v. Holbrook, 490.

7. New Jersey Zinc Co., 29S, 299.
Holcombe v. Ehrmann traut, 4S1.
Holden v. Burnham, iSS, 277, 376.
I loldship V. Batters. .11, 65, '.50. 657. 662.
Hollacher 7. O'Brien, 450, 4.59, 460.
Holladay Case, The, I2>, 177, 089.
Holland 7 . Brown, 446.

v. Cruft, 224.
Hollingsworth 7'. Crawford, 330.
Hollins v. Brierfield Coal & Iron Co.,

131. 136, 140. 359-
Hollister 1 . Abbott, 518.

V. Barkley, 338.

1 . Loud, 301, 353.
I lolli way V. I lolliway, 72'..
I lolmberg v. Di an, -'74,
1 lolmer v. \'iner, 7 1 _* .
Hoi- ' iii II. 77.

1 ■ rdner, 666, '.70.
Gilman, - \.

v. Hubbard, 608.

7'. Marshall. <*»).

Sherwood, 253.
1 reamer, 28, 52, 353, 391, 408.
beck ■ . V.tnmetrc, 451.

Home Bank v. Brewster & Co., 615.
Hone 7\ Henriquez, 555, 708.
Hooberry z\ Harding,

. Jones, 524.
1 looley v. Gieve, 63. S3.
Hooper v. Baillie, 564.

v. Winston, 336.
Hoopes v. Knell, 433.
Hooser v. Hunt, 6S9, 692.
Hoot 7. Sorrell, 415.
Hope Mut. Life Ins. Co. v. Taylor, 239.
Hopkins v. Bishop, 461, 462.

v. Joyce, 534.

v. Langton, 357, 693.
Hopkirk 7 . Randolph, 55, 79, 96.
Horbach v. Hill, i3o, 193, 198, 203, 366.
Hord's Admr. v. Colbert, 7, 9.
Horn 7 . Horn, 40, 107.

v. Keteltas, 423.

v. Ross, 194.
Home r-. Chatham, 590.
Horneffer v. Duress, 529.
Horner 7'. Zimmerman, 101.
Horsey v. Heath, 223.
Horsford t. (judger, 273.
Horstman v. Kaufman, 309.
Horton v. Dewey, ^24, 528, 529.

v. Kelly. 88, 545.

v. Williams, 619.
Horwitz v. Ellinger, 27, 566, 601.
Hospes 7 . Northwestern Mfg., etc., Co.,

237-
Houck v. Heinzman, 21.
Houseman z\ Grossman, 244.
Houston v. Blackman, 395.
Hovenden 7'. Lord Annesley. 40, 512,

513-
Hovey v. Elliott, 260, 315.

v. Holcomb, 294, 736.
How 7. Taylor, 464.
Howard v. Leonard, S6, 87, 638.

7. Prince, 136, 449, 451.

V. Rynearson, 392.

7. Sheldon, 150.
Howard Express Co. 7>. Wile, 499.
Howard Ins. Co. v. Halsey, 674.
Howard Nat. Bank v. King, 123.
Howe 7. Bishop, 107, 164, 358.

7. Johnson, 454.

V. Ward, 44.

v. Whitney, 142.
Howe Machine Co. v. Claybourn. 357,

692.
Howell v. Donegan, 13.

1 . Edgar, 19.

v. Mitchell, 374.

7. Thompson, 182.
1 lowland v. Blake, 13.
Howse v. Moody, 257, 263.
Howson v. Hancock, 712.
Hoxie v. Price, 1S8, 246, 527, 529.
I [oxsey v. I loxsey, 640.
I loyt, Estate of, 062.

v. Godfrey, 34, 54, 339.

References'] TABLE OF CASES. [arc to pages.

XXXV11

Hoyt & Bros. Mfg. Co. v. Turner, 692.
H. T. Simon-Gregory Co. 7. McMahan
489.

v. Schooley, 673, 679.
Hubbard v. Allen, 374, 394, 430, 504.

v. Hubbard, 100.

v. McNaughton, 577.

v. Moore, 389.
Hubbell v. Currier, 323.

v. Lerch, 219.

v. Meigs, 9.

v. Merchants' Nat. Bank, 251.
Hubler v. Waterman, 576.
Hudgins v. Kemp, 306, 415, 426.
Hudnal v. Wilder, 224, 672.
Hudson v. Osborne, 72.

v. Plets, 68, 69, 116.

7'. White, 716, 717.
Hudspeth v. Harrison, 89.
Huebler v. Smith, 452.
Huey's Appeal, 31,93.
Huggans v. Fryer, 494.
Huggfns v. Perrine, 206.
Hughes v. Bell, 523.

v. Bloomer, 592.

v. Cory, 36, 444, 618, 625, 628.

v. Epling, 618.

v. Littrell, 515.

v. Monty, 489.

v. Northern Pacific R. R. Co., 295.

v. Roper, 411.
Hughitt v. Hayes, 562.
Huguenin v. Baseley, 77, 127.
Hugunin v. Dewey, 31, 92.
Hugus v. Robinson, 455.
Huiskamp v. Moline Wagon Co., 390.
Hulings v. Hulings Lumber Co., 5S0.
Hull v. Deering, 341, 563.

v. Hull, 243.

v. Sigsworth, 453.
Humbert Trinity Church, 31.
Hume v. Beale, 512.

v. Randall, 78.
Humes v. Scruggs, 30, 146, 212, 302,

311, 312, 534.
Humphrey v. Spencer, 60, 61, 182.
Hun v. Cary, 262.
Hungerford v. Earle, 406, 419.
Hunsinger v. Hofer, 183.
Hunt v. Bender, 740.

v. Conrad, 553.

v. Field, 140. 160.
Hunter v. Bradford, 305.

v. Corbett, 626.

v. Hunter, 294.
Hunterdon Freeholders v. Henry, 661,

662.
Hunters v. Waite, 33, 365.
Huntington v. Attrill, 269.

v. Saunders, 326.
Huntley v. Kingman, 27, 49, 703.
Huntzinger 7'. Harper, 501
Hurd v. Ascherman, 304.
Hurlburd v. Bogardus, 431, 464.

Hurley v. Osier, 669.
1 1 uschle v. Morris, 454.
1 [ussey 7'. Castle, 528.
Hussman, /// re, 311.
1 lutciieson 7. Peshine, 615.
Hutchins v, Gilchrist, 466.

v. Heywood, 315.

7'. Hutchins, tig.
Hutchinson v. Bolt/., 529, 545.

v. First Nat. Bank, 232, 273, 277,
280, 41 -v

'■. Lord, 586.

7'. Murchie, 207.
Hutton v. Benkard, 77.
Hyde v. Chapman, 177.

v. Ellery, 103, 332.

v. Frey, 531.

t. Woods, 65, 7... 87, >^-:, 657.
Hyman 7'. Kelly, 336.
Hymes v. Fstey, 311.
Hyslop z\ Clarke, 577.

Idaho, The, 64.

Iley v. Niswanger, 209.

Imhoff s Appeal, 93.

Importers' &T. Nat. Bank v. Quacken-

bush, 114, 115, 142, 147, 151 177.
Imray v. Magnay, 133.
Ingalls v. Herrick, 449, 459.
Inglehart v. Thousand Island Hotel

Co., 20, 22, 506.
Ingliss v. Grant, 412.
Inhabitants of Pelham v. Aldrich, 182.
Inloes 7'. Amer. Exch. Bank, 20.
Inloes' Lessee v. Harvey, 260.
Innes v. Lansing, 220, 579.
Innis v. Carpenter, 370, 480.
Insurance Co. v. Shoemaker, 418.
Ionia Co. Sa. Bank v. McLean, 392, 541.
Irish v. Bradford, 31)1.

7'. Clayes, 345.
Irons v. Manufacturers' Nat. Bank,

238.
Isaac 7' Wilisch, 307.
Iselin 7'. Peck, 485.
Iseminger v. Criswell, 524.
Isham v. Schafer, 60.
Ithaca G. L. Co. v. Treman, 54.
Ives v. Stone, 424.

Jackman v. Robinson, 255, 258, 259, 264.
Jacks v. Nichols, 302.
Jackson v. Andrews, 297.

v. Badger, 377.

v. Burgott, 133.
1 ■ irnell, 562.

v. Davison, 570, 572.

7'. Duchaire, 712.

7'. Edwards, 317.

v. Garnsey, 716.

v. Given, 509.

v. Glaze, 357.

v. Hart, 306.

v. King, 10, 112.

xxxvni

References] TABLE OF CASES. {are to pages.

Jackson :■. Lewis, 187,360.
mas, 712.
v. L' isee, 553.
: . Mather, 690.
i . Middlelon,
: . Miner, 191, 3S5.

Myers, : t, 133, i>2, 183, 221,
244. 245.
' . ler, [94.
Post, I'll. 20S.

ml/. 643.

S ward, 51, 1S2.
- >n Bank v. Durfey, 3SS.
Jacobs v. Allen, B.

v. Morrison, 360, 482,

6S6.
v. Totty, 42-v
Jacoby ': Parkland Dist. Co., 92.
Jacoby's Appeal, 109, 133.
Jacot v. Boyle, 104.
Jaeger v. Kelley, 9, 357. 358, 413.

5 5 7-
Jaffers v. Aneals, 417.
Jaffray v. Greenbaum, 626, 628.

v. McGehee, 47, 135, 570, 572.
Jaffrey v. Brown, 42'/.

v. McGough, 524.
James v. Bird, 726.
. Gard, 640.
v. \'an Duyn, 7.
James Goold Co. v. Maheady, 528.
Jamison v. Bagot, 476.
v. Beaubien, 133.
v. King, 415.
McNally, 374.
Janes v. Whitbread, 412, 5S1.
Janvrin v. 1

Jaques v. Greenwood, 601.
Jarboe v. Hey, 644, I
Jauretche v. Proctor, 640.
Jeffres v. Cochrane, 709.
Jencks v. Alexander, [91.
Jenkins v. Clement, iSS, 189, 190.
v. Einstein, 433.
7 . Eldredge, 67 ;.
,- . 1"' iwler, 567.

[81.
Jenkyn v. Vaughaif,
Jenne v. Joslyn, 474, 487.
Jenney v. Andrews, 76, 77.
JenniiiL'.^ 2 . I loward, 279.

Prentice, 5 1
Jenny 1 . Jenny

irbonate Nat. 1 Ian li
v. M' Carter, z
ll ilse, 276,
jetton v. '1 '■!»■ y
Jewell v. Knight, 10, 12, 13, 28, 3", 628,

741.
v. Parr, 499.
7 . Porter, 214,
an, 8.

' . iyei

525, ~< 4, 707.

Jiggitts v. Jiggitts, 135, 543.
Jimmerson v. Duncan, 107.
Johnson r\ Alexander, 58.

v. Cushing, 76.
I Ikins, 89.

v. Farnum, 332.

v. Gibson, 299, 697.

v. Griffin, 739.

V. Herring, 592.

v. Holloway, 454.

r\ Jones, 155, 166, 224.

7'. Lovelace, 4S5.

v. McAllister, 576, 587.

v. Powers, 154, 226, 227.

v. Rapalyea, 604.

v. Rogers, 298, 509.

v. Sharp, 548.

v. Willey, 462.
Johnston 7'. Dick, 436.

v. Johnston, 524.

v. Jones, 499.

v. Thompson, 496.

v. Tuttle Bros., 19.

v. Zane, 194, 660.
Joiner v. Franklin, 524.
Jones, /;/ re, 535.

v. Barkley, 712.

v. Bryant, 62.

v. Clifton, 78, 538.

v. Comer, 726.

v. Conn. Bank, 315.

v. Conoway 5 14.

v. Davenport-, 226.

v. Easley, 469.

v. Graham, 141, 619.

v. Green, 6, 97, 140, 145, 147, 155,
159, 167.

v. Huggeford, 626.

7'. Jones, 47S.

v. King, 181.

v. Light, 194, 425, 665, 670, 719.

7'. Massey, 274.

7'. Morrison, 290.

v. Nevers, 440.

v. Pugh, 335.

7'. Rahilly, 737.

v. Reeder, 323.

v. Reese, 660.

7'. Shaddock, S3.

v. Simpson, 7, 8, 9, 10, 12, 365,
398, 478.

v. Smith, 674.

7'. Snyder, 491.

v. Syer, 580, 581, 582.

v. Van Doren, 83.
Jones' Appeal, 383.
Jordan 7'. Gillen, 553.

t. National Shoe & L. Bank, 562.

7'. White, 81, 704.
Joseph v. Levi, 609, 619.

v. Mc< rill, [60, 333.
Josselyn v. Josselyn, 646.
Journeay 7\ Brown, 336.
Jourolmonz/, Massengill, 655, 658, 660.

References'] TABLE OF CASES. [arc to pages.

Judson v. Courier Co., 252.
Justh v. Wilson, 452, 4S0.
Juzan v. Toulmin, 7.

Kahanaiki v. Kohala Sugar Co., 639.

Kahley, In re, 619, 623.

Kaighn v. Fuller, 338.

Kain v. Larkin, 186, 1S7, iSS, 192, 244,

272, 274, 277, 377, 426, 4S0, 727.
Kaine v. Weigley, 9, 13, 15.
Kalk v. Fielding, 407, 618.
Kalmus v. Ballin, 232, 318.
Kampz'. Kamp, 165.
Kanawha Valley Bank v. Atkinson, 524.

v. Wilson, 60, 198.
Kane v. Bloodgood, 516.

v. Drake, 451.

v. Hibernia Ins. Co., 15.

v. Roberts, 212.
Kankakee W. N. Co. v. Kampe, 167.
Kansas City Packing Co. v. Hoover, 44,

583, 584. 5S7-
Kansas Pacific Ry. Co. v. Couse, 460.
Karll v. Kuhn, 410.
Karst v. Gane, 142, 633.
Karstorp's Estate, 344.
Kasson v. People, 126.
Kaufer v. Walsh, 24, 368, 501.
Kaufman v. Whitney, 528.
Kavanagh v. Beckwith, 568.
Kayser v. Heavenrich, 578.
Keach, In re, 74.
Keagy v. Trout, 8, 25, 408.
Keating v. Retan, 502.
Keel v. Larkin, 717, 725.
Keen v< Kleckner, 387, 704.
Keener v. Keener, 3S1.
Keeney v. Good, 539.

v. Home Ins. Co., 236.
Keep v. Sanderson, 5S6, 587.
Keevil v. Donaldson, 5S4.
Kehr v. Smith, 209, 538, 541.
Keith v. Fink, 389.

v. Proctor, 406.
Kellar v. Taylor, 366, 675.
Keller v. Blanchard, 451.

v. Paine, 124.

v. Payne, 161.
Kelley v. Connell, 529.

v. Flory, 390, 563.

v. People, 495.
Kelley-Goodfellow Shoe Co. v. Scales,

59i-
Kellog v. Richardson, 594.
Kellogg v. Aherin, 309, 357.

v. Barber, 607.

v. Cayce, 563.

v. Clyne, 407, 500.

z'.Olmsted, 264.

v. Root, 432.

v. Slauson, 8, 478, 585, 5S6, 606,
607.

v. Slavvson, 7.
Kelly v. Baker, 564.

Kelly v. Campbell 4S8.

v. Crapo, 615.

v. Fleming, 434.

V. Lane, 241.

7'. Lenihan, 2<>.

v. McGrath, 523, 524.
Kelsey v. Kelley,
Kemp v. Folsom, 527.

7'. Small, 423.
Kempner v. Churchill, 7, 11, 30,374,

375, 405, 414.
Kempton v. Hallowell, 660.
Kendal ,-. \\'> >od, 391 ».
Kendall v. Fitts, 464.

v. New Eng. Carpet Co., 580.

7'. Samson, 450.
Kennedy t. Barandon, 316.

7'. Creswell, 226, 227.

v. Divine, 490, 495, 496.

7r. Gibson, 263.

v. Green, 672, 674, 693.

v. Lee, 526, 534.

7'. McKee, 564.

v. Nunan, 315.

7'. Thorp, 234, 6or.
Kensington v. White, 288.
Kent v. Curtis, 140.,,

v. Lasley, 13.

v. Riley, 540.
Kepple's Appeal, 640.
Kerbs v. Ewing, 594.
Kercheis v. Schloss, 61 r.
Kerr v. Hutchins, 316, 411.
Kesner v. Trigg, 524, 540.
Kessinger v. Kessinger, 386.
Ketchum, Matter of, 69.
Keteltas 7'. Wilson, 616.
Kevan v. Crawford, 408.
Keys v. Grannis, 520.
Keyser v. Angle. 667.
Keyser's Appeal, 663.
Kibbe v. Wetmore, 123.
Kidd v. Johnson, 72.

v. Rawlinson, 49, 446.
Kidder 7'. Horrobin, 229.
Kidney t. Coussmaker, 210.
Kilbourn v. Sunderland, 98, 112, 113.
Kilbourne v. Fay, 232.
Killam 7'. Perce, 487.
Killian v. Clark, 7, 206.
Killinger 7-. Reidenhauer, 543.
Kilner, Ex parte, 714.
Kilpatrick-Koch D. G. Co. v. Strauss,
425.

Kilroy v. W I, -7. 638, 650, 661.

Kimball v. Fenner, 31)4, 529.

7'. Ilarman, 118.

v. Noyes, 82.

v. Thompson, 25.
Kimble v. Smith, 366.
Kimmel v. McRight,
Kinealy v. Macklin, 318.
King v. Bailey, 454.

v. Dupine, 40, 107.

xl

nets] TABLE OF CASES.

King v, Holland Trust Co., 676.

1 . 1 [ubbell, 4

Moon, 1 12. 402, 429.

v . P J 49S.

! . Ruble,

v. Russell, 4"4. 4"?. 435-

p. Tharp, 141'. 475.

; . ["rice, 1 26, 297.

v. Wilcox, 341, 346, 410.
King's Estate,

Thompson, 27S.
King (The). See Rex.

•1 r . Stroh, 90.
Kingsbury v. Karle, Si.
Kinnan v. Guernsey, 77.
Kinnard 7. Daniel, 53S.
Kinsley v. Scott, 122.
Kip v. Bank of N. V.. 553.
Kipling v. Corbin, 604.
Kipp v. Hanna, 61, 210, 437.

v. Lamoreaux, 451. 478.
Kipper?. Glancey, 155, 169.
Kirby v. Boyette, 659.

v. Bruns, 60.

v. Ingersoll, 18.

v. Lake Shore & M. S. R. R. Co.,
283, 5ii, 513, 515.

7. Masten, 492,

v. Schoonmaker, 389.
. Tallmadge, 500, 693.
Kirkbride, Re, 623, 626.
Kirkley v. Lacey, 531.
Kirkpatrick v. Clark, 717, 724, 732.
Kirksey v. Snedecor, 204, 212.
Kirtland v. Snow, 456.
Kiser :■. Dannenberg, 594.
Kissam v. Edmundson, 209.
Kisterbock's Appeal, 355.
Kitch v. St. Louis, K. C. & N. Rv. Co.,

Kitchen v. McCloskey, 434, 435.
Kittering v. Barker, 301.
Kittredge v. Sumner, 357.
Kitts v. Will son, 423, 717, 719.
Klapp ; . Shirk, 564.
Klein v. Hoffheimer, - 2.
I lorine, 275.
7 . McNamara, 31.
V. Richardson, 421.
Kleine -■. Nie, 574.
Kiev v. I lealy, 349.
Klosterman v. Mason Co. Cent. R. Co.
139.
7 . Vader, 79, 394,
Klous v. Hennessey, 11^, rig.
Klumpp v. < rardner,
Knapp v. City of Brooklyn, 27
7 . Day, 527, -

I (omceopathic Mut. L. I. Co.
56.
v. Lee, 722.

1 rowan, - '.'.11.

mith, ^32.
Knatchbull v. Hallet, 83.

Knefler v. Shreve, 660.
Knight v. Forward, 212, 4O2, 492.
. (ilasscock, 273

- . Hunt, 712.
Knoop 7 . Kelsey, 12S.
Knott, Exparte, 670.
Knower v. Cadden Clothing Co., 495
070, 681, 686, 691.

v. Central Nat. Bank, 592, 716.
Knowles v. Toone, 13.
Knowlton v. 11 awes, 669.

v. Mish, 30, 539.
Knox v. McFarran, 133, 489.

7 . Moses, 351.

v. Yow, 94.
Knye v. Moore, 288.
Koenig -■. Steckel, 126.
Koster v. Hiller, 18S, 189.
Kraemer v. Adelsberger, 13.
Kreider's Estate, 93.
Kreth v. Rogers, 587.
Kreuzer v. Cooney, 453.
Krumdick v. White, 233.
Kruse v. Prindle,478.
Kuevan v. Specker, 31.
Kuhl 7'. Martin, 187.
Knhlman v. Baker, 513.

v. < )rser, 607.
Kurtz v. Miller. 694.
Kutz's Appeal, 524.
Kuvkendall v. McDonald, 378.
Kvello 7'. Taylor. 88.
Kyle v. O'Neil, 139.

La Bau v. Huetwohl, 335.

Lacassagne v. Chapius, 260.

Lachman v. Martin, 532.

Lacker v. Rhoades, 553.

Lackland v. Smith, 660.

Lackman v. Wood, I

La Crosse Nat. Bank v. Wilson, 58.

Lacrosse & M. R. R. Co. v. Seeger, 214.

Ladd t. Newell, 531.

v. Wiggin, 424-
Ladnier 7'. Ladnier, 405.
Lady Washington Consol. Co. ?■. Wood,

2S3, 694.
Laidlaw v. Gilmore, 415.
Laird v. Davidson, 4117, 525, 706.
Lake v. Billers, 520.

V. Morris, 430, 464.
Lake Shore Banking Co. v. Ftner,

602.
I. alone v. United Slates, 10.
Lamar Ins. Co. v. Moore, 237.
Lamb v. Stone, 1 1 7.
Lamberton v. Pereles, 661.
Lambrecht v. Patten, 527.
Lamont v. Cheshire, 315.
Lamperl v. I la\ del, 044.
Lamson v. Patch, 471.
Landauer v. Mack, 374.
Landes v. Brant, 698.
Landon v. Townshend, 267.

References] TABLE OF CASES. \are to pages.

xli

Lane v. Lane, 640.

v. Lutz, 617, 618.

v. Starr, 630.
Lang v. Lee, 410, 619.

v. Stock well, 449, 463, 480.
Langford v. Fly, 51, 244, 429.

v. Thurlby, 525, 533.
Lanmon v. Clark, 29b.
Lant v. Morgan's Admr., 281.
Lario v. Walker, 640.
Larkin v. McAnnallv, 93.

v. McM ullin, 199.
Lassells v. Cornwallis, 76.
Lassiter v. Davis, 361, 376.

v. Hoes, 523.
Lathrop v. Bampton, 83.

v. Clapp, 235, 45S, 406, 555-

v. Clayton, 451, 465.
Latimer v. Batson, 446, 469.
Lattin v. McCarty, 104.
Laughlin v. Calumet & C. Canal & D.

Co , 509.
Laughton v. Harden. 51, 190, 197, 255,

360, 376, 437.
Lavelle v. Clark, 479.
Lavender v. Boaz, 432.
Law v. Payson, 476.
Lawrence v. Bank of the Republic
no, 242, 251, 252, 259, 290.

v. Davis, 554.

v. Fox, 81, 82.

v. Norton, 577, 578.

v. Tucker, 391, 396.
Lawson v. Ala. Warehouse Co., 407.

v. Funk, 354, 355.

v. Moorman, 476.
Lawton v. Buckingham, 396.
Lay v. Neville, 454.
Lea v. Hinton, 542.
Leach v. Flack, 668.

v. Francis, 357.

v. Kelsey, 231.

v. Shelby, 394, 396.
Leadman v. Harris, 23.
Leasure v. Coburn, 405.

v. Forquer 273.
Leather Cloth Co v. Amer. Cloth Co.,

72.
Leavitt v. Beirne, 650.

v. Blatchford, 703.
Ledyard v. Butler, 503, 670.
Lee v. Chase, 227.

v. Cole, 232, 318, 327, 526, 527.

v. Figg, 360, 361, 376.

v. Kilburn, 484, 487.

v. Lamprey, 495.

v. Lee, 278.

v. Pearce, 15.
Leeds v. Cameron, 391.
Le Fevre v. Phillips, 149, 169.
Leffel v. Schermerhorn, 427.
Leffingwell v. Warren, 571.
Lega:ett v. Standard Oil Co., 508.
Le Goaster v. Barthe, 132.

Legro v. Lord, 31, 88.
Lehman v. Bentley, 391, 397.

v. Greenhut, 41 1.

v. Kelly, 63.

v. Meyer, 293.

v. Roseni^aitcn, 550.
Lehmberg v. Biberstein, 212.
Leicester v. Rose, 712,
Leigh v. Harrison, 653, 655, 660.
Leighton v. Orr, 29,
Leiman, Matter of, 232.
Leitch v. Hollister, 577, 609.

v. Wells, 298, 299.
Leland, /;/ re, 232.
Lemmon v. People, 269.
Le Neve v. Le Neve, 683.
Lenox v. Roberts, 615.
Leonard v. Baker, 419.

v. Bolton, 183, 194.

v. Bryant, 476.

v. Clinton, 56, 57, 542.

v. Forcheimer, 309.

v. Green, 253.

v. Nye, 552.
Le Page v. Slade, 358.
Leppig v. Bretzel, 434.
Leque v. Smith, 8, 668.
Lerow v. Wilmarth, 189, 437, 717.
Le Roy v. Dunkerly, 315.
Lesem v. Herriford, 457.
Lesher v. Getman, 557.
Leukener v. Freeman, 245.
Levy v. James, 547.
Levy's Accounting, 550.
Lewis, Matter of, 551.

v. Burnham, 274.

v. Caperton, 428.

v. Castleman, 212.

v. Miller, 548.

v. Palmer, 222, 223.

v. Rogers, 146, 476.

v. St. Albans Iron & Steel Works.
290.

v. Shainwald, 131.

v. Simon, 203.

v. Smith, 122.

v. Wilcox, 462, 490.
Lexington v. Butler, 263.
Lichtenberg v. Herdtfelder, 140, 145,

151, 155, 156, 225, 233, 710.
Lidderrla.le v. Robinson, 348.
Lightfoot v. Wallis, 618.
Lillard v. McGee, 39, 221, 244.
Lillie v, Wilson, 133.
Lillis v. Gallagher, 725.
Liming v. Kyle, 4:4.
Lincoln v. Clarlin, 495.
Lincoln's Ex'x v. Foster, 371.
Lindell Real Estate Co. v. Lindell, 740.
Lindle r\ Neville. 409.
Lindley v. Cross, 169.
Lindsay v. Harrison, 661.
Lindsey r\ Delano, 475.
Lingan -■. Henderson, 304.

xlii

ices] TABLE OF CASES [are to pages.

Lininger v. Herron, 434.

Raymond, I
Linn v. Wright, i = .
Linton :-. Butz, 403, 466.
Lion, The,

Lionberger r. Baker, 414.
Lipperd : . Edwards, -
Lippincott v. Evens 053.661.
Lishy : . Perry, 31.
Litchfield 1 . White.
Little v. Lichkoff, 495.
Littleton v. Littleton, 543. 544.
Livermore v. Boutelle 183, 222, 526.

v. McNair, 114.

Northrup, 565 59S.
Rhodes 605
Livey v. Winton, 43;-
Livingston v. Livingston, 223.
Lloyd : . Fi iley, 71 7.

v. Fulton, 29, 47, 113, 135, 1S6,
i-7. E88, 351, 376, 3S7, 437,

v. Passingham, 335.
Load v. Green, 669.
Lobstein v. Lehn, 340.
Locke v. Lewis, 100.
v. Mabbett, 86.
Lockhard :■. Beckley, 13, 15, 30, 33,

'99. 365-
Lockyer v. Savage. 647.
Loehr v. Murphy, 187, 2or.
Loeschi^k v. -Addison, 194.

Bridge, 301, 427, 42S.
Logan v. Brick. 17.

. Logan, in.
London v. Martin, 603.
Long -■. Dollarhide, 529.

:■. Knapp, 4^5.
Loomis v. Tifft, 156. 223, 724.
Loos v. Wilkinson, 62, 232, 321, 340, 342,

343. 345. 479> 1-7. 189, t93, 559-
Lord ?■. Bunn, 646.

I (evendorf, 562.
i . I [arte, 58, 72.
Lord Cranstown v. Johnston, 304.
Lore v. Dierkes, 25, 225, 260, 343, 349,

LoririL; v. Dunning, 415.
I Stanlej - 7 .

-< r, 244.
1 reyer. 330.
. M ikals, 155.
1 rillender, 640, 643,
-. ingsland, 640, 643.
Bartlett, 1 5 (.
. Man o, 107.

Wortman, 416, 434, 703.
. Matson, 1- 1.
Lowery v. Clinton, =42.
ry v. !'•'■' kner, 15.
I ter, 230.
v. Fisher, 181.
v. Pinson, 221.

Lowry v. Tew, 519.
Lucas v. Brooks, 542.
Ludlow v. McBride, 469.

. Simond, 312.
Ludwig *. Highley, 468.
Lukins v. Aird, 23, 25, 33, 355, 424,

481 , 621, 622, 034.
Luna v. Inhab. of 1 yngsborough, 488.
Lush v, Wilkinson, 80.
Lux v. Davidson, 143, 158.
Lycoming Rubber Co. v. King, 425.
I. veil v. Supervisors of St. Clair, 269.
Lyford v. Thurston, S3.
Lyman z\ Place, 262.
Lynch z . Crary, ior.

v. Johnson, 115, 129, 130, 708.
Lynchburg Iron Co. v. Taylor, 249.
Lynde v. McGregor, 61, 127, 231, 406.
Lynn v. Smith, 95.
Lyons r. Leahy, 676, 68i.

v. Murray, 150.
Lytle v. Beveridge, 656, 657, 658.

Maass v. Falk, 221,233, 602, 603,704,708.
McAfee v. McAfee, 292.
McAllaster v. Bailey, 151.
McAlpine v. Sweetser, 736.
McAninch v. Dennis, 278.
McArtee v. Engart, 296.
McArthur v. Hoysradt, 66, 341.

v. Scott, 249.
McAuliffe 7 . Farmer, 140.
McBurney v. Wellman, 423.
McBurnie, Ex parte, 383, 536.
McCabe 7'. Brayton, 501.
McCaffrey v. Hickey, 335.
McCain v. Wood, 394.
McCall v. Pixley, 227, 243.
McCalmont 7'. Lawrence, 176,178,214,

316.
McCanless 7'. Flinchum, 376.
McCarron v. Cassidy, 423.
McCarthy v. Goold, 67.

7'. Scanlon, 329.
McCartin v. Perry, 230.
McCartney v. Bostwick, in, 153, 165,

177-
McCarty 7-. F"letcher, 430.
McCaskle v. Amarine, 394.

. Rhodes, 297.
Ml Clair ■■. Wilson. 354.
McClaugherty r. Morgan, 193.
McCleary v. Ellis, 639.
McCleery v. Allen, 584.
McClellan v. Pyeatt, 37.

-,'. San ford, 13.
McCleskey v. Leadbetter, 717.
McClintock v. Loisseau, 718.
McCloskey i>. Stewart, 63.
McClure v. Cook, 659.

v. Goodenough, 560.

v. Smith, 424.
McClurg v. Lecky, 575.
McCluskey v. Cromwell, 46.

References'] TABLE OF CASES. [are t

Xllll

McCole v. Loehr, 278.
McConihe v. Derby. 320, 551, 625.
McConnel v. Dickson, 223.
McConnell v. Barber, 3S7.

v. Citizens' State Hank, 278.

v. Scott, 223, 391.

v. Sherwood, 557, 567, 590, 611.
McCool v. McNamara, 336.
McCormick v. Atkinson, 35.

v. Hyatt, 357.

v. Joseph, 370.
McCrasly v. Hasslock, 620.
McCrea v. Purmort, 396.
McCreary v. Skinner, 618.
McCulloch v. Hutchinson, 45.
McCulIough v. Colby, 175, 176.

v. Gilmore, 641, 643.
McCutcheon's Appeal, 57.
McDermott v. Blois, 140.
McDermutt v. Strong, 130, 169, 217.
Macdona v. Svviney, 446.
McDonald v. Bowman, 492.

v. Cash 563.

v. Farrell, 439.
McDonnell v. Eaton, 2SS.
McDonogh v. Murdoch, 640.
McDougall v. Page, 123, 51S.
McDowell v. Brown, 640.

v. Cochran, 166.

v. Goldsmith, 146.

v. Rissell, 497.
McElfatrick v. Hicks, 491.
McElmoyle v. Cohen, 154.
McElwain v. Willis, 143, 172, 173, 175,

271.
McEvony v. Rowland, 435, 502.
McEvoy v. Appleby, 84, 85, 650, 661.
McEwen v. Brewster, 661.
McFadden v. Mitchell, 190, 413, 415.
McFarland v. Bate, 563, 564.

v. Goodman, 31, 92.
McFarlane v. Griffith, 137.
McFerran v. Jones, 67.
McGahan v. Crawford, 61.
McGarvy v. Roods, 392.
McGay v. Keilback, 80.
McGee v. McGee, 543.
McGhee v. Importers' & T. Nat. Bank,

140, 451.
McGintry v. Reeves, 394.
McGlinsey's Appeal, 536.
McGoldrick v. Slevin, 332.
Macgregor v. Dover & Deal R. R. Co.,

57o, 572.
McGuire v. Miller, 717.
Mcllhargy v. Chambers, 551, 554.
Mcllvaine v. Smith, 65, 660.
Mcintosh v. Ladd, 544.

v. Smiley, 461.
Mackason's Appeal, 76.
Mackay v. Douglas, 203.
MacKaye v. Soule, 334.
McKeeV Judd, 552, 553.
Mackellar'^. Pillsbury, 368, 405, 451.

McKenna v. Crowley, [31, 221
McKenzie's Appeal, <4<>.

McKeown v. Allen, 355, ■

McKibbin v. Martin 1.03.431,

453. 463. 466.
Mackie 7-. Cairn-, 6
McKim ?'. rhompson, 304.
McKinley v. Bi >\\ e, 1 i- 1.
McKinney :•. Wade, 425.
McKinnon t. Reliance Lumber Co.,

489.
McKinster v. Babcock, 396
McKnight v. Morgan, 224, 225.
McKown v. Furgason, 4-2.

7\ Whitmore, 285.
McLachlan v. Wright, 619.
McLain v. Ferrell, 2^4.
McLane v. Johnson, 196, 224, 489.
McLaughlin v. McLaughlin, 224.
McLean v. Cary, 313, 325.

v. Clapp, 698.

v. Lafayette Bank, 288, 623.

7'. Letchford, 309, 345.

7'. Meek, 154.

v. Weeks, 45.
McLendon v. Commrs. of Anson, 170.
McLeod v. First Nat. Bank, 83.
McLure v. Benini, 172.
McMahan v. Bowe, 31.
McMahon 7'. Allen, 231, 247.
McMaster v. Campbell, 230, 718.

v. Morrison, 64 <.
McMillan r. Knapp, 610.

7'. McNeill, 517, 518.
McMinn 7-. Whelan, 140, 159.
McMurtrie 7-. Riddell, 377.
McNally v. City of Cohoes. (.7.;.
McNaney v. Hall, 565.
Macomber v. Peck, 25, 4S0.
McPherson v. Kingsbaker, i<)4. 204.
McRea v. Branch Bank of Ala. 426.
McReynolds 7'. Dedman, 573.
Macungie Sav. Bank :. Bastian
McVeagh v. Baxter, 432.
McVeigh v. Ritenour, 183.
McVicker 7'. May, 434-
McWilliams v. Cornelius, 577.

7'. Rodgers. 420.
Maders v. Whallon, 7. tog, IIO.
Magawley's Trust, 209.
Magee v. Badger, ''-7.
Magirl v. Magirl, 433.
Magniac v. Thompson, 3-

593, 689.
Maher 7'. Hibernia Ins. Co. 271..
Mahler v. Schmidt. 250, 252.
Mahr 7'. Norwich Union F. I. S<" .. 250,

258.
Maiders v. Culver's Assignee, 231.
Main 7'. Lynch, 557.
Malcolm 7'. Hodges, 20.
Malony 7'. Horan, 545.
Manbv :■. Scott, 2.
Manchester v. McKee, 151.

xliv

-,J TABLE OF CASES. [are to pages.

Manchester v. Tibbeus. 386, 522, 523.

524.
Mandei i . Peay, 558.
Mandeville v. Avery, in. 234, 235. 342.
33-
. Rej w Ids, 14''- 47''-
Mandlebaum v. McDoneil, 640, 041.
Mangum v. Finucane

ittan Co. :. Evertson, 30-
Manikee \ . Heard. 543.
Manley v. Rassiga, 234.
Mann : . Appel, -

Manning v. Beck, 318, 597, 603, 708.
Carruthers, 527.
v. Chambers, (47.

I [ayden, 516.
: . Reilly, 353.
: . Riley, 53s.

San [acinto Tin Co., 694.
Mansell v. Mansell, \;.
Mansfield :. Dyer, 666.

rst Nat. Bank, 232.
Manton v. Moore, 443. 45-.
Manufacturers' Bank r. Rugee, 452.
Manufacturing Co. v. Bradley, 113, 121,

141.
Mapes v. Scott. 335.
Mapleback, /// r< . 723.
Marcy v. Kinney, 133.
Marden v. Babcock, 362.
Mark's Appeal, 592.
Markey v. I'mstattd, 461.
Marks v. Bradley, 354, 389, 562, 568,

Marksbury v. Taylor, 15, 9S.
Marmon v. Harwood, 353, 362, 363.
Marrin v. Marrin, 319.
Marriott :. Givens, 407.
Marsh, Matter of, 553.
v. Bennett, 556.

. 1 tenson, 55.
v. Burroughs, 68, 84, 220, 260.
v. Dunckel, 4- 1 .
- Falker, 10, 12.
v. Bier, 140.
Marshall v. Croom, 61, 204, 435, 477
431.
- . Means, -

V. Roll, "2 12.

-■. Sherman, 269.
v. Van De Mark, 6
v. Whitney, [I
Marston v. Dresen, 275, 534.

:■. Vultee
Martin v. \dams, 464.
•lton, 224.
I ;■ . .'. . ;
I •
! I
I llden, 164,

,-2.
, I l.i . man
v, Kunzmullei
v. Margham, 647.

Martin r. Marshall, 688.

:. Martin-Wilson, etc., Co., III.

v. Michael, 140, 144, 159.

v. Root, So, 224.

v. Smith, 284.

v. Tidivell, 113, 121.

v. Walker. 183, 223.
Martin-Benin Merc. Co. v. Berkins,

619.
Martindale z\ Booth, 447.
Marx r\ Tailer, 260.
Maryland Grange Agency v. Lee, 658.
Mason v. Franklin, 406.

?'. Lord, 247.

v. Bierron, 322, 323.

v. \'estal. 37, 274.
Massey v. Yancey, 538.
Massie v. Walts, 74.
Masson v. Bovet, 349.
Masterson -'. Little. 516.
Masterton -■. Beers, 352.
Mateer v. Hissim, 437.
Mathes v. Dobschuet/., 61, 358.
Mathews v. Feaver, 379, 412,

7 . Baradise, 660.

v. Boultney, 557, 564.

v. Reinhardt, 7, 413, 414.
Matson v. Melchor, 187.
Matthai v. Heather, 7, 204.
Matthews v. Ott, 550.

v. Rice, 358.
Mattingly v. Nye, 146, 205, 540.
Mattison v. Judd, 610.
Maule v. Rider, 694.
Mawman v. Tegg, 73.
Maxwell v. Kennedy, 510.
May v. first Nat. Bank, 551.

7\ Greenhill, 332.

7'. Le Claire, 694.

7 . State, Nat. Bank, 195, 197, 199.

7. Tenney, 548.

v. Walker, 577.
Mayer v. Clark, 102, 44S, 451.

7'. Hellman, 548, 599, 704.

7'. Webster, 400.
Mayers v. Kaiser, 95, 532.
Maynard v. Cleaves, 644, 660.
Maynes v. Atwater, 469.
Mayor of New York v. Brady, 476.
Mays -.'. Rose, 335.
Meacham v. Sternes, 556.
Mead "\ Combs, 353.

v. Dowd, 573.

7'. Gardiner, 450, 451.

v. Noyes, 429, 459.

v. Phillips, 556.
Meade v. Smith, 453, 460.
Meader v. Norton, 507.
Means v. Dowd, 26, 27, 33, 35, 620, 625.

v. Hicks 474. 477-
Mebane v. Lay ton, 217.

v. Mebane, '4, 65, 657, 659.
Mechanics' & T. Bank v. Dakin, 103,
no, 173, 174.

References'] TABLE OF CASES. f are to Pages.

xlv

Meddowcroft v. Iluguenin, 29.
Medsker v. Bonebrake, 525.
Meeker v. Harris, 146. 150, 274, 476.
v. Saunders, 433.
r . Wilson, 446.
Megehe v. Draper, 92.
Mehaffey's Estate, 662.
Mehlhop v. Pettibone, 357, 47-.
Meigs v. Weller, 343.
Melbye v. Melbye, 725.
Melville v. Brown, 159.
Memphis & L. R. R. v. Dow, 348.
Menagh v. Whitwell, 339, 389.
Menken Co. v. Brinkley, 641.
Menton v. Adams, 706.
Menzies v. Pulbrook, 247.
Mercantile Trust Co. v. Wood, 625.
Mercer t. Mercer, 717.

v. Peterson, 714.
Merchant v. Bunnell, 532.
Merchants' Bank v. Thomson, 122, 545.
Merchants' Exch. Nat. Bank v. Comml.

Warehouse Co., 506.
Merchants' Nat. Bank v. Paine, 144,

155, 169.
Merchants' & M. Saw Bank v. Lovejoy,

63-
Merchants' & M. Tr. Co. v. Borland,

56, 57, 156.
Meredith v. Johns, 119.
Merrell v. Johnson, 190, 270, 278, 349.
Merriam v. Sewall, 160.
Merrick v. Butler, 722.
Merrill v. Englesby, 555.

v. Grinnell, 553.

v. Locke, 416, 426, 468.
Merriman v. Chicago, etc., R. R. Co.,

219.
Merry v. Fremon, 156, 166, 223, 255,

264, 724.
Mertens v. Welsing, 414, 426, 431.
Merwin v. Richardson, 221.
Messersmith v. Sharon Sav. Bank, 131.
Messmore v. Huggard, 128.
Metcalf v. Munson, 484, 4S7.

v. Watertown, 142.
Metropolitan Bank v. Durant, 319, 415,
505.

v. Godfrey, 670.

v. St. Louis Dispatch Co., 516.
Metropolitan Nat. Bank v. Rogers, 194,

230.
Meux v. Anthony, 140, 169, 178.

v. Howell, 43, 412.
Meyer v. Lowell, 82.

v. Virginia & T. R. R. Co., 490.
Michael t. Gay, 309.
Michoud v. Girod, 516.
Micou v. Moses, 332, 336.

v. National Bank, 706.
Middleton v. Sinclair, 435.

v. Taber, 550.
Middletown Sav. Bank v. Bacharach,
288.

Miers :. Zanesville & M. Turnp. Co.,

68, 709.
Miles v. Barry, 514.
I delen, 497.

v. Miles, 304.
Miller, Matter of, 46.
v. Bryan. 357.
v. Campbell, 56.

7'. COX, 524.

7. Davidson, 131, 169.

■ . Dayton, [28, 183.

7. Parle, 319.

v. Florer, 81.

v. Fraley, 308.

7'. Garman, 461.

v. Hall, 251, 254. 257, 265.

7'. Hanley, 474, 494.

7. Hilton, 1S1.

v. Jamison, 249, 294.

v. Jones, 626, 628, 635.

v. Lacey, 454. 46C.

v. Lehman, 279.

v. Lockwood, 407, 450, 630.

v. Long island K. R. Co., 459.

v. McCoy, 396.

v. Mclntyre, 516.

v. Mackenzie, 236.

v. McKenzie, 396.

v. Miller, 45, 87, 140, 211, 545.

ads. Pancoast, 446, 451, 459, 626.

v. Post, 570, 572.

v. Sauerbier, 391.

v. Sherry, 129, 295, 296, 739.

v. Wilson, 437, 544.
Millholland 7'. Tiffany, 6^9, 692.
Millington 7'. Hill, 340, 342, 670.
Mills v. Argall, 717.

v. Block, 125, 140, 159.

v. Gore, 304.

v. Howeth, 690.

v. Parkhurst,. 233, 547, 552, 613.

v. Pessels, 5S9.

7'. Thompson, 492.

v. Van Voorhies, 134.
Milwaukee Harvester Co. t. Culver,

532.
Milwaukee & M.R.R.Co.r. Milwaukee

& W. R. R. Co., 247.
Minchin 7'. Minchin, 736.
Miner v. Lane, 107, 108.

v. Phillips, 371.

V. Warner, I S3.
Minor v. Mead, 228.
Mish v. Main, 484.
Mississippi Mills v. Cohn,
Missouri L. M. <\: S. Co. v. Reinhard,

241.
Mitchell v. Barnes, 335.

v. Bunch, 739.

v. Mitchell, 410, 4S1.

v. Stetson, 34.

v. Stiles, 319.

7'. Thompson, 514.

v. Van Buren, 319.

X1V1

TABLE OF CASES. [are towages.

Mitchell v. West. 451, 466.
Winslow, 230, 626.
Mittnacht 1 . Kelly. 621, 622.
Mobile Sav. Hank v. McDonnell, 11.

477. 493-
Mobley v. Letts. 619.
Mohawk Bank r, 18, 176, 361,

Molitor v. Robinson, 451, 49S.
Moncure 1 . Hanson, 231.
Monell v. Scherrick, 410.
Monroe v. Douglass, 124.
. I [ussey, 44(). 453-

Smith, 212, 366.
. rrenholm, 659.
Monti • Behrens, 647.

Montefiori . . Montefiori, 71S.
Monteith r. Bax, 20. 352, 36S, 531.
Montgomery v. Bayliss, 367.
Goo ba , 610.
Kirksey, 593.
Montgomery Web Co. v. Dienelt, 15,

240. 241, 401.
Moody v. Burton, 118.
Moog v. Benedicks, 409, 451.
. Farley, 435.
v. Talcott, 293.
Mooney v. Olsen, 442, 469.
Moore ? . Blondheim, 2114.
< a ird, 245.
V. Eastman, 644.
v. Flynn, 92.
v. Greene, 284, 2S6, 513.
v. Griffin. 607.
v. Hinnant, 43, 353-
?•. Jordan, 730.

V. Kidder, Ki2.

v. Meacham, 4S7.
v. Meyer, 596.
v. Page, 522, 534, 53S.
7 . Roe, 424, -439.

7'. Schoppert, 144.

7 . Shields, 495.

v. Stege, 557, 012.

7'. United States, 400.

V. Williamson, 96, 075, GSl.

7'. Wood, 19, 24, 48 I .
1 Moorer v. M< m irer] 232.
Moores \ •. White, 68.
Moorman v. Shockney, 272.

v. I >awes, 100, 143.
Mori in-., d Banking Co. v. Whitaker,

Moreland v. Ati hison, 379.
Morford v. Dieffenbacker, 431.
Morgan, In n .

ibott, 1 --. 723.
7 . Ball, J57-

Bogue, 172. 280, 576.
Elam, 21).
v. I [arris
1 lei ki 1
v. Worden
,n County v. Allen, 131.

Morit/. v. Hoffman, 1S9, 209, 211.

v. Miller, 337.
Morland v. Isaac, 542.
Morrill v. Kilner, 20.

7'. Little Falls Mfg. Co., 2S4.
Morris 7\ Lindauer, 347, 6S9.
v. Morris, 224.
7. Tillson, 396.
Morris Canal & B. Co. v. Stearns, 416.
Morrison v. Abbott, 92.

v. Atwell, 184, 213, 214, 242.
v. Clark. 437, 540.
v. Morrison. 183, 222, 244.
v. Oium, 45S, 463.
Morrow Shoe Mfg. Co. 7'. New Eng-
land Shoe Co., 359, 6S9.
v. Peabody, 139.
Morse v. Hill, 303.

7'. Riblet, 135.
Morton 7'. Morris, 354.
v. Noble, 545.
v. Ragan, 31,454.
v. Weil, 2S9.
Moseley v. Anderson, 92.

v. Moseley, 214, 225, 242, 723,
726.
Moses v. Micou, 659.
Motley v. Downman, 72.

v. Sawyer, 415, 416.
Mott v. Danforth, 120.
Mountford v. Taylor, 2S1.
Movius v. Lee, 262.
Mowry v. Agricultural Ins. Co., 391.

7'. Schroder, 11S.
Mover v. Dewey, 229, 230. 235.
Muchmore v. Budd, 575.
Muggeridge's Trusts, A'r. 647.
Mulford 7. Peterson, 4S, 97, 107, 108.

v. Shirk, 89, 574.
Mull v. Dooley, 421.
Mullanphy Sav. Bank v. Lyle, 701.
Mullen 7. Wilson. 1S9, 199, 204, 206,

366.
Muller v. Balke, 717.

v. Inderreiden. 31, 92.
7\ Norton, [g, 348.
Mulloy 7'. Voung, 610.
M ulock v. Wilson, 247.
Multnomah St. Ry. Co. v. Harris, 176.
M umper i ■. Rushmore, 450.
M unger v. Perkins, 545.
Municipal Ins. Ci . v. Gardiner, 739.
Munn 7. Marsh, 204.
Muni)/ 7'. Wilson, 350.
M unro 7'. Alaire, 61 '7.
Munroe 7\ Hall, 6 $9, 040.
Munson r\ Arnold, 413.

v. Carter, 88.
Murphy, In re, 647.

7 . Briggs, 320, 347, 350, 666, 670.

671, 7"4-
v. Crouch, 31.
7'. Hubert, 734.
Murray v. Ballou, 297.

References'] TABLE OF CASES. [are towages.

xlvii

Murray v. Briggs, 267, 268.

v. Burtis, 368.

v. Fox, 252.

v. Green, 640.

v. Hay, 215.

v. Judson, 506.

v. McNealy, 458.

v. Murray, 544.

v. Riggs, 634, 702.

v. Rottenham, 517.

v. Walker, 423.
Murtha v. Curley, 293, 294, 324, 330.
Musselman v. Kent, in,
Mutual Life Ins. Co. v. Bowen, 121.

v. Shipman, 117.
Myers v. Becker, 321, 555.

v, Davis, 562.

v. Estell, 336.

v. Fenn, 220.

v. Harvey, 469.

v. Sheriff, 8, 274.

Nadal v. Britton, 358, 418.

Naglee's Appeal, 640.

Nail v. Punter, 77.

Nairn v. Prowse, 383.

Nance v. Nance, 88, 382, 530.

Nantes v. Corrock, 58, 67.

Nantz v. McPherson, 689.

Nash v. Geraghty, 213.

National Bank v. Barkalow, 274, 347

v. Beard, 489.

v. Carpenter, 284, 511.

v. Dillingham, 269.

v. Insurance Co., 83.
National Bank of Balto. v. Sackett, 564.
National Bank of Metropolis v.

Sprague, 203.
National Bank of Oshkosh v. National

Bank of Ironwood, 485.
National Bank of Republic v. Dickin-
son, 523.

v. Hodge, 589.
National Bank of Rondout v. Dreyfus,

142.
National Bank of Troy v. Scriven, 561.
National Bank of West Troy v. Levy,

151, 156, 225.
National Butcher's & D. Bank v. Hub-
bell, 560, 561, 569.
National Park Bank v. Goddard, 163.

v. Lanahan, no.

v. Whitmore, 578, 604, 605, 613,

713-
National Shoe & L. Bank v. August,

634-

National Tel. Mfg. Co. v. Du Bois. 54.

National Tradesmen's Bank v. Wet-
more, 100, 106, 144, 149, 155, 166,
168, 169, 225.

National Trust Co. v. Miller, 239.
v. Murphv, 239.

National Tube Works Co. v. Ballou, 172.

Neal ?'. Clark, 339.

Neal v. Foster, 492, 493, 71 »>.

v. Williams, 45.
Neale v. Day, 64.

v. Neales, 295.
Neate v. Marlborough, 127.
Ni civ v. Jones, 220.
Neisler v. Harris, 369.
Nellis :■. Clark, 37, 722, 726.
Nelson v. Edwards, 615.

v. Frey, 90.

v. Henry, 421.

v. Kinney, 706.

v. Smith, 482.
Neppach v. Jones, 510
Nerac, Matter of, 58.
Neslin v. Wells, 422.
Neuberger :\ Keim, 181, 193, 195, 198,

203, 204, 205, 366.
Neusbaum v. Keim, 150.
Nevers n. Hack, 278, 279, 482.
Neville t'. Wilkinson, 719.
New v. Bame, 334.
New Albany v. Burke, 237, 694.
New Albany Ins. Co. -•. Wilcoxson, 451.
Newark v. Funk, 58, 67.
New Bedford Inst, for Savings v. Fair-
haven Bank, 34S.
Newdigate v. Jacobs, 149, 150.
Newell v. Cutler, 117.

v. Newell, 717.

7'. People, 46.
Newkerk v. Newkerk, 640.
Newland, Re. 542.
Newlin v. Lyon, 493, 495.
Newlove v. Callaghan, 64.
Newman :>. Black, 595.

v. Clapp, 611.

v. Cordell, 14, 16, 30, 280, 352,
432.

7'. Kirk, 402, 407.

v. Van Duyne, 270.

v. Willetts, 130, 172, 176.
New Orleans Pac. Ry. Co. v. Parker,

740.
Newton v. Bronson, 738.
N. Y. Commercial Co. v. Carpenter,

476.
N. Y. Guaranty & Ind. Co. r. Gleason,

495, 4a6-
N. Y. Life Ins. Co. v. Mayer, 313, 314.
N. Y. Mutual Life Ins. Co. v. Ann-
strong, 45, 400.
N. Y. & Harlem R. R. Co. v. Kyle, 4:>>.
N. Y. & New Haven R. R. Co. v.

Schuyler, 219, 263, 288.
Nicholas 7\ Murray, 229.
Nichols v. Eaton, 59, 65, 85, 87, B8, 91,
636, 643, 044, 645, (.47
650,653, 654, 657, 658, 61
v. Ellis, 364.
7'. Lew, 59. 64, 65, 135. 313. ' ' '■

661.

- r. McCarthy, 72;
7'. McEwen, 550, 589

xlviii

v«] TABLE OF CASES. \_are to pages.

Nichols v. Patten. 7, 45, 4(4. 717.

: . Pinner, 279.

- . Wallace, 537.
Nicholson v. Condon, 690.

v. Leavitt, 26, 551, 556, 575, 584,
631.
Nickell v. Handly, 651 ».
N . Crittenden, 12, 20, 671.

ty v. Mallery, 474, 497.
Nicoll v. Boyd, 337.

-4.
Nightingale v. Harris, 567.
Nimmo v. Kuykendall, 365.
Nininger v. Knox. 4^4.
Nippes' Appeal, 56, 541.
Niver v. Crane, 107, III, 165.
Noble v. Hammond, 29, 339, 51S.

v. I lines, 278, 519.

v. I lolmes, 143, 158.
. Noble, 717."
Noonan v. Lee, 274.
Norcutt v. Dodd, 51, 5S.
Nordlinger v. Anderson, 389, 562, 563.
Xurfdk & W. R. R. Co. v. Read, 552.
Norris v. Haggin, 50S, 513, 690.

v. Lake, 8, 408, 451.
North v. Bradway, 104, 215, 251, 290.
North Amer. Fire Ins. Co. v. Oraham,

155, 157. '75. 176.
Northcote, /;/ re, 640.
Northwestern Iron Co. r. Central Trust

Co., 128.
Norton v. Doolittle, 453, 461.

v. Matthews, 589, 6l< 1.

v. Norton. 209, 224.
Norwalk v. Ireland, 526, 527, 52S.
Norwegian Plow Co. v. Hanthorn.
Noyes v. Hall, 698.

v. Morrill, 491.

r. Sanger Bros., 590.
Nuckolls v. Pinkston, 4^3.
Nudd v. Hamblin, 285.
Nugent v. Nugent, 140.
Nunn 7 . \Vilsmore, 412.

Oatis v. Brown, 492, 493.
Oberholscr v. (ireenfieid, 100.

1 !k it/.er 7\ Herzen, 454.
< )' Brien v. Browning, 314.
7\ Chamberlain, 470.
■ alter, 155, 169.
, Fitzgerald, 295.
7\ Whigam, 1
Ocean Nat. Bank v. Olcott, 108, 160,

163, i','., 177.
'1, kerman v. Cross, 123, 614.
mnell v. Kilpatrick, 357.
• ner v. Ward, 729.

.nor v. Boylan,i55.
7\ (ii)T<ir<i
' >' Daniel V. Crawford, 209.

' 1 I tell 7\ Burnham, 513.
Odell v. Flood,

v. Montross, 423.

O'Donnell v. Barbey, 75.

v. Hall, 474, 491, 497.

v. Segar, 15, 91.
Oelrichs v. Spain, 99, 113, 121, 178.
Offutt v. King, 155.
Ogden 7\ Arnot, 236.

v. Peters, 580, 599.

v. Prentice, 182.

v. Saunders, 517.

v. Wood, 84.
Ogden State Bank 7\ Barker, 485, 488.
Ogilvie 7\ Knox Ins. Co., 68, 240, 241.
O'Hare 7: Duckworth, 4S8.
Ohio Coal Co. t'. Davenport, 490.
Ohm v. Superior Court, 155.
Old Folks' Society v. Millard, 312.

< (ldham v. Oldham, 647.
Olive-Finnie Grocer Co. v. Miller, 577.
Oliver v. King. 1S4.

7\ Moore, 341, 397.
v. Pratt, 83, 2S8, 697.
Oliver Lee & Co.'s Bank v. Talcott,

23, 33-
Olney v. Balch, 75.

' v. Tanner, 234, 235, 239, 564, 591.
Olson v. Scott, 7.

Omaha Hardware Co. r\ Duncan, 432.
O'Mahoneyw. Belmont, 339.
O'Neil v. Birmingham Brew. Co., 218.

v. Hudson Valley Ice Co., 81.

v. Patterson & Co., 666.

v. Salmon, 562.
Ontario Bank r\ Root, 274.
Ordendorf 7\ Budlong, 96, 10S, 246.
Oriental Bank r\ Haskins, 424, 722.
Orman r. English & S. Merc. Inv.

Trust, 620, 623.
Orr 7'. Gilmore, 316.
Orton z'. Madden, 332.

7\ Orton, 620.
Orvis 7\ Powell, 650.
Osborne v. Tuller, 453.

v. Wilkes, c,4, 95, 531, 532.

v. Williams, 727, 729.
Osen v. Sherman, 452, 457.
Osgood v. Laytin, 234, 237.

v. Ogden, 237.

7'. Thorne, 703.
Ostrander ?'. Weber, 219, 312.
Otis v. Sill, 457.

7'. Spencer, 538.
( >tley r\ Manning, 29.
( >u 7'. Smith, 312.
Overman 7'. Quick, 630.
Overman's Appeal, 662.

< )\ ermire v. Haworth, 168.
Overton v. Holinshade, 410.
Owen v. Arvis, 431, 564.

v. Body, 581.
Ownes 7'. Ownes, 725.
Oxley v. Lane, 640, 641.

Pabst Brewing Co. v. Butchart, 619.
Pa< e v. Pace, 654, 659.

References'] TABLE OF CASES. [are to pages.

Pacific Bank 7'. Robinson, 74.
Pack v. Bathurst, 76, 77.
Packard v. Wood, 446. 449.
Paddon v. Taylor, 666, 669.
Page v. Dillon, 377.

v. Waring, 230, 673.
Paget v. Perchard, 619.
Pahquioque Bank v. Bethel Bank, 263.
Paige v. Cagvvin, 490.
Paine v. Lester, 614.
Painter v. Drum, 498.
Palen v. Bushnell, 105.
Palmer v. Goodwin, 517.

v. Hawes, 89.

v. Myers, 564.

v. Whitmore, 77.
Palmour v. Johnson, 424.
Pancoast v. Gowen, 70.

v. Spovvers, 554.
Pardue v. Givens, 640.
Parish v. Lewis, 172.

v. Murphree, 189, 191.
Park v. Battey, 380.
Parker v. Browning, 236.

v. Conner, 666, 673, 675, 676, 6S1,
683, 684, 686, 687, 691, 692,
697.

r. Flagg, 224, 291.

v. Phetteplace, 135, 503.

v. Roberts, 354.
Parkhurst v. McGraw, 7, 294, 302, 504.
Parkinson v. Trousdale, 338.
Parkman v. Welch, 196, 198, 303, 306.
Parks v. Parks, 608.
Parmenter v. Fitzpatrick, 450.
Parrish v. Danford, 23.
Parshall v. Eggert, 632.
Parsons v. Bowne, 297.

v. Dickinson. 446.

v. Spencer, 654.
Partee v. Mathews, 100, 108, 109, 176.
Partelo v. Harris, 357.
Parton v. Hervey, 570, 572.
Partridge i\ Cavender, 658, 660.

v. Gopp, 40, 80, 107, 380.

v. Stokes, 199, 366.
Parvin v. Capewell, 539.
Paschal v. Acklin, 738.
Pashby v. Mandigo, 223.
Pass v. Lynch, 213, 214.
Passavant v. Bowdoin, 233.

?'. Cantor, 307, 604.

v. Sickle, 307.
Patchen v. Rofkar, 145, 149, 151, 152,

169.
Patrick v. Grant, 599.

v. Riggs, 406, 618.
Patten v. Casey, 355, 437.

v. Smith, 92.
Patterson v. Bodenhamer, 409.

v. Brown, 709.

v. Lynde, 172, 253.

v. McKinney, 190, 326, 437.
Pattison v. Letton, 419, 423.
D

Patton 7\ Conn, ^23.

v. Royal B. I'. Co., 561.

:■. Taylor, 274.
Paul :■. Crooker, 480, 4- 1 .
Paulk 7\ Cooke, 209.
Paulling v. Sturgus, 1
Paulsen v. Van Steenbergh, 142.
Pawley ■■■. Vogel, 21 16.
Paxton ,-'. Boyce, 1 1 .

. . Smith, 452, 620.
Payne v. Becker, (><>, 117.

v. Drewe, [36.

v. Eden, 712.

v. Graham, 132.

v. Hook, 239.

.-■. Miller, 542.

v. Sheldon, 144, 167, 176, 271.

7\ Stanton, 201, 208.

v. W7ilson, 88.
Payson v. Hadduck, 264.
Peabody?'. Knapp, 42S, 481.
Peake ?■. Stout, 371.
Pearce v. Creswiek, 113.
Pearsall 7-. Smith, 2S3, 507.
Pearson 7\ Carter, 453.

v. Howe, 685.
Pease v. Egan, 348, 349.

v. Shirlock, 3S1.
Peaslee v. Barney, 223.
Peay v. Morrison's Ex'rs, 169.
Peck v. Burr, 570, 572.

v. Crouse, 36S, 557.

7'. Hibbard, 517.
Peebles v. Horton, 403, 406, 432.
Peeler v. Peeler, 528, 529.
Peet v. Morgan, 132.
Peirce v. Partridge, 409.
Peiser v. Peticolas, 20, 368, 620.
Pelham 7'. Aldrich, 182.
Pence v. Croan,47, 18S, 190.

7'. Makepeace, 57.
Pendleton r\ Hughes, 183, 184, 244.

7>. Perkins, 58, 67, 14", 160. 709.
Peninsular Stove Co. v. Roark, 92.
Penn v. Lord Baltimore, 738.

v. Whitehead. 94.
Penn's Ex'r v. Penn, 558.
Pennell v. Deffell, 83.
Pennington 7\ Clifton, 108.

v. Seal, 46, 51, 1S2, 223.
Pennock v. Freeman, 514.
Penrod 7\ Morrison, 120.
Penzel Grocer Co. v. Williams, 610.
People v. Albany & \'t. R. R. Co., 260.

v. Baker, 370.

;■'. Bristol. 626.

v. Chalmers, 550.

{ex rrl. Hoyt) 7'. Commrs. of
Taxes, 123.

v. Cook, 352.

v. Crennan, 46.

v. Dyle, 432.

v. Kelly, 339.

v. Mead, 115.

1

Rtferenet*\ TABLE OF CASES. [are to pages.

People v. Remington,

. I ioga Common Fleas, 553.
t-. Utica Ins. Co., 46.
{ex re/. Cauffman) v. Van Buren,
102. 103, 1 10. 143, 144. 159,

r< 1. "■-. I73i 175. 333-

v. Woodruff, 46.
People's Sav. Hank v. Bates, 140, 167,

626, 703.
Pepper v. Carter, 200, 208.
Percy v. Cockrill
Perkins v. Center, 277.

r. Dickinson, 660.

:. Hays, 656.

?■. Hutchinson, 576.

V. Kendall, 150.

V. Perkins, 437, 540.

7'. Sanders, 253.
Perry v. Corby, 594.

7'. Cross, 640.

7'. Ensley, 330.

v. Hardison, 407.

-■. Meddow croft, 2g.
Personette v. Cronkhite, 355, 368.
Peters v. Bain. I<), 23, 44, 47, 63, 268,
34S. 558, 562.

7'. Goodrich, 674.

v. Light, 62.
Peters-Miller Shoe Co. v. Casebeer, 490.
Peterson v. Brown, 717, 734.

v. Schroeder, 502.
Petree v. Brotherton, 1S2, 193, 279.

Pettee v. Dustin. 634.
Pettibone v. Stevens, 29.
Pettit 7'. Parsons, 558.
Petty v. Petty, 134, 135, 543.
Peyton 7'. Lamar, 100.

7 . Rose, 105.
Pfohl 7'. Simpson, 220.
Phalen v. Clark, 284.
Pilaris v. Leachman, 264.
Phelan v. Boylan, 247.

7'. Kelly, 469.
Phelps v. Borland, 517.

v. Curts, 24, 229.

v. I ■ ister, i"". 101.

V. McDonald, 229, 230, 730.

v. Piatt, 156, 225.

v. Smith, 7, 377.
Phenix Ins. Co. v. Fielder, 90, 717.
Phenix Nat. Bank v. A. P.. < leveland

Co.. 267.
Phettiplace v. Sayles, 190, 4O7 .
Phifer v. Erwin, 370.
Philbrook v. Eaton, 446.
Phillips v. Frye, 524.

v. Kesterson, 426.

?■. Mullings, 77.
;i 1.

v. Reitz, 452.

.- . Wooster, 184, 191, 205, 208,
213, 733.

Phinizy v. (lark, 402, 424.

Phipps 7'. Sedgwii k, -4, 326, 537, 545.

Phceni.x Bank v. Stafford, 207.
Phoenix Ins. Co., Ex parte \ 740.
Pickens v. Dorris, 660.
Picket 7'. Garrison, 1S3. ♦
Pickett v. Pipkin, 272, 274, 409.
Pickstock v. Lyster, 363, 600.
Picquet v. Swan, 250.
Pidcock v. Voorhies, 180.
Piddock v. Brown, 479.
Pier v. Duff, 490.
Pierce v. Brew, 396.

v. Hill, 62.

v. Hoffman, 501.

t'. Hower, 271.

v. Kelly, 45S.

v. Milwaukee Constr. Co., 68,
218, 241.

7'. Wagner, 620.
Pierce Steam Heating Co. v. Ransom,

605 713.
Piercy 7'. Fynney, 390.

7'. Roberts, 64.
Pierson :■. Manning, 554.

v. Slifer, 357.
Pierstoff v. Jorges, 147.
Pike t. Bacon, 27, 600, 601.

7'. MiU-s, 31, 88.
Pilling 7'. Armitage, 304.

7'. Otis, 26, 403, 430.
Pillsbury v. Kingon, 231.
Pinckard v. Woods, 6S0.
Pinckston v. Brown, 726, 729.
Pine v. Rikert, 607.
Piper 7'. Hoard, 384.

v. Johnston, 93.
Pitkin v. Mott, 533.
Pitney 7\ Leonard, 674.
Pitts v. Wilder, 733.
Pittsburg Carbon Co. v. McMillin,

234, 237, 238.
Pittsriekl Nat. Bank 7\ Tailer, 271.
Place v. Hayward, 725, 729, 730.

7'. Langworthy, 619.

7. Minster, 49(1.
Planck v. Schermerhorn, 556, 610.
Planters' Bank -<. Willea Mills, 26.
Planters' & M. Bank 7'. Borland, 374.

V. Walker, 39. III.
Piatt 7'. Hunter, 609.

7'. Jones, 69, 70.

7. Lott, 608.

7 . Matthews, 168.

v. Mead, 156, 166, 229, 276, 278.

v. Preston, 291.

7'. Routh, 77.
Plimpton v. Goodell, 194, 419.
Plumb v. Fluitt, 672.
Plunkett v. Plunkett. 363, 419.
Poillon 7'. Lawrence, 518.
Pollak 7'. Searcy, 478.
P( illo< k v. Jones, 379.
Pomeroy v. Bailey, 188, 395, 437, 501,
502.

v. Pomeroy, 543.

References] TABLE OF CASKS. [are to pages.

Pond v. Kimball, 93.
Ponsford v. Hartley, 220, 264.
Poole v. Mitchell, 470.
Poore v. Clark, 250.
Pope v. Allen, 442.

v. Cole, 115.

v. Solomons, 168.

v. Wilson, 19, 197.
Pope's Exrs. v. Elliott, 650, 657, 660.
Pormann v. Frede, 476.
Porter v. Goble, 534.

v. Green, 671.

v. James, 558.

v. Lazear, 545.

v. Lee, 660.

v. Pico, 315.

v. Pittsburg Bessemer Steel Co.,
205.

v. Williams, 116, 234, 236, 237.
Portland Bldg. Assoc, v. Creamer, 334.
Post v. Bsrwind-White C. M. Co., 462.

v. Dart, 247.

v. Stiger, 51, 183, 244, 327, 527.
Posten v. Posten, 437.
Postlewait v. Howes, 167, 264.
Potter v. Adams, 96.

v. Couch, 65, 639, 640, 641, 643.

v. Gracie, 32, 347, 385, 395.

v. Holland, 75.

v. MrDowell, 17, 19, 278, 353,
355, 437. 488.

v. Payne, 368, 460.

r. Phillips, 255.
Potts z'. Blackwell, 102.

v. Hart, 619, 623.
Powell v. Howell, 55, 67, 142.

v. Ivey, 701, 719.

v. Spaulding, 216.

v. Waldron, 70, 71.
Power v. Alston, 24.
Powers v. Graydon, 184, 214, 242.
Powles v. Dilley, 304.
Prather v. Parker, 454.
Pratt v. Burr, 93.

v. Chase, 517.

v. Curtis, 190.

v. Pratt, 8, 10, 502.
Pray -'. Hegeman, 85.
Pregnall v. Miller, 452.
Preiss v. Cohen, 333.
Premo v. Hewitt, 88.
Prentice v. Janssen, 219.
Prentiss v. Bowden, 142, 147, 155, 225.
Prentiss Tool & S. Co. v . Schirmer, 450,

460, 630.
Presas v. Lanata, 132.
Prescott v. Hayes, 424.
Prestidge v. Cooper, 366, 672.
Preston v. Crofut, 699.

v. Smith, 281.

v. South wick, 450, 459.

v. Turner, 357.
Preusser v. Henshaw, 704.
Prevost v. Gratz, 282.

Prewit t. Wilson, 199, 359, 374, 3S2,

383, 384, 53o, 593. 690, 693.
Price ?'. Haynes, 574, ''"7.

v. Mazange, ()_•'.

v. Pitzer, 35, 453.

v. Sanders, 271).
Prickett v. Prickett, 392.
Pride :■. Andrew, 732.
Prime v. Brandon Mfg. Co., 75.

7'. Koehler, 81.
Primrose v. Browning, 531.
Prince's M. P. Co. v. Prince Mfg. Co.,

72.
Pringle v. Phillips, 674, 687.

v. Pringle, 228.
Pritchard v. Hailey, 640.

v. Norton, 123.
Probst v. W'elden, 565, 609.
Produce Bank v. Morton, 150, 433, 555.
Prosser v. Edmonds, 247, 736.

v. Henderson, 415.
Prout v. Vaughn, 89.
Prouty v. Prouty, 244.
Pryor v, Downey, 573.
Public Works r. Columbia College,

140, 142, 296.
Pulliam v. Newberry, 52.

v. Taylor, 176.
Pullis v. Robinson, 210.
Pulsifer v. Waterman, 55.
Pulver v. Harris, 553.
Purkitt v. Polack, 259, 426, 438.
Pusey v Gardner, 7, 275, 434, 478, 504,

512, 720.
Putnam v. Bicknell, 529.

v.. Hubbell, 557.

v. Osgood, 443, 635.

v. Reynolds, 419.
Putney v. Fletcher, 225.

v. Whitmire, 740.
Pyeatt v. Powell, 618.

Quackenbos 7'. Sayer, 505.
Quarles v. Kerr, 635.
Queen (The). See Reg.
Quimby v. Dill 211.
Ouinby v. Strauss, 120, 325.
Quincy v. Hall, 242.
Quiriaque v. Dennis, 470.
Quirk v. Thomas, 726.

Radley v. Riker, 538.
Railroad Co. 7. Howard, 240.

v. Soutter, 349.

7'. Trimble, 73.
Raleigh v. Griffith, 571.
Randall v. Bufnngton, 91.

v. Carman, 619. 622.

v. Howard, 724.

7. Vroom, 35.
Randegger v. Ehrhardt, 489, 490.
Randolph v. Daly, 257. 27J. 290.
Randolph's Exr. 7\ Quidnick Co., 509.
Ranken v. Patton, 730.

TABLE OF CASES. [are to pages.

Ranlett v. Blodgett.

ee ■. Stewart, 185, 585, 606.
Ratdifi v, Trimble, 11. 415.
Rathbun v. Plainer, 559.
Raventas 1 . < rreen, 471.
Ravisies 1 . Alston, ;
Rawley v. Brown, 442, 469.
Raws* m v. Fi >x, 316.
Rawson Mfg. Co. v. Richards, 44').
Kay v. Raymond, 454.

v. Roe ex dun. Brown, 416.

v. Tea bout, 301.
Raymond, Matter of, 553.

v. M( irrisi in, 9.

v. Richmond, 311, 561.
Ravnor v. Mintzer, 250.
Rea, Matter of, 1S2.

v. Missouri. 13, 357, 372, 498, 499.
Read v. Mosby, 58, 64.

V. Patterson. 297.

v. Worthington, 24, 606, 616.
Reade v. Livingston, 1S6, 187, 192. 104,

197, 205, 209. 541.
Reber v. Gundy, 694.
Receiver of State Bank v. First Nat.

Bank, 551.
Redfield :■. Buck, 410, 490.
Redfield & Rice Mfg. Co. v. Dvsart,

416.
Redhead v. Pratt, 6S8.
Redpatb V. Lawrence, 377.
Red River Valley Bank v. Freeman,

232, 574-
Reed v. Bott, 273.

?'. Emery, 592.

v. Gannon, '^74, 675, 686.

v. Mc Inty re, 548, 599, 704.

v. Minor, 462.

v. Noxon, 15.

v. Pelletier, 609.

v. Reed, 440.

t. Stryker, 104,215,290.

v. Wheaton, 171

7 . Woodman, 211. 423.
Reeder v. Speake, 155.
Reehling 7'. Byers, 434.

v. Livingston, 182,536.
Reese v. Reese, 526.

7 . Shell, 526, 527.
I s v. Ayers, 102.

7. Dougherty, 12.

7. Peterman, 574.

7'. Skipper. 5' 10.
Reg. 7'. Smith. 309.

i v. McClv
Rei( hart v. ' -i-i >•■ »r, 7 1 7.

V. Lloyd, 482.

Reifsnyder r . II unter, 640.
R'-i i^<-r 7'. Davi

II'. nes, 487.
Reilly ~-. P.arr. -jo. 410.

ngton . Linthicum, 133.
Remington Paper Co. 7. o'Dougherty,
247-

Renfrew :■. McDonald, 732.
Renney v. Williams, 435.
Rennie v. Bean, 554, 5 )2.
Renninger v. Spatz, 446, 459.
Renton v. Kelly, 581.
Retzer v. Wood, 515.
Reubens v. Joel, 140.
Rex v. Duchess of Kingston, 29.

v. Earl of Nottingham, 634.
Reyburn v. Mitchell. 167, 389.
Reynell v. Sprye, 28.
Reynes v. Dumont, 179.
Reynolds, In re, 182.

v. Crook, 42S.

v. Ellis, 547.

7. Gawthrop, 11. 13, 15, 16, 395,
405, 418, 497.

v. Johnson, 388, 390.

r. Park, 267.

7'. Robinson, 392.

v. Welch, 140.
Rhawn v. Pearce, 516.
Rhead 7'. Hounson, 109, 274.
Rheinstein v. Bixby, 332, 335.
Rhem v. Tull, 224.
Rhine v. Ellen, 396.
Rhoads v. Blatt, 415.
Rhodes v. Wood, 530.
Ribon v. Railroad Cos., 249.
Ricard v. Sanderson, 81.
Rice v. Cunningham, 4S0.

v. Morner, 406.

v. Perry, 278, 352.

v. Savery, Si.
Rich v. Braxton, 136.

v. Levy, 100.
Richards v. Kountze, 12.

;•. La Tourette, 520.

7'. Leveille, 704.

v. Levin, 576.

v. Pierce, 288.

v. Vaccaro, 477.
Richardson 7'. Green, 237.

v. Marqueze, 89, 574, 704.

v. Mounce, 513.

v. Rardin, 454.

v. Rhodus, 187.

v. Root, 224.

v. Smallwood, 209.

v. Stringfellow, 370, 458, 574, 610.

v. Thurber, 548, 602, 613, 710.

v. Trimble, 147.

7'. Wyman, 545.
Riches v. Evans, 365.
Richmond 7\ Irons, 292.
Richmond Nervine Co. v. Richmond,

72.
Richolson v. Freeman, 494, 6SS, 6S9.
Richtmeyer v. Remsen, 552.
Rickards v. Attorney-General, 37.
Rickerson R. M. Co. 7\ Farrell, F. &

M. Co.. 334.
Riddell v. Munro, 372. 499, 667.
Riddle v. Lewis, 702.

References'] TABLE OF CASKS. [art

liii

Riddle v, Mandcville, 264.
Rider v. Ham, 665.

v. Hunt, 7, 347.

v. Kidder, 67, 182, 223.

v. Mason, 86.
Ridge v. Greenvvell, 436. 502.
Ridgely v. Bond, 114, 280.
Ridgway v. English, 392.
Ridout v. Burton, 450.
Rife v. Geyer, 65, 657, 659.
Riggan v. Wolf, 347. 354-
Riggins v. Brown, 4S3.
Riggs v. Buckley, 307.

v. Murray, 33, 621, 634, 702.

v. Palmer, 45, 46.
Riley v. Carter, 563, 568.

v. Mayor, etc., of N. Y., 371.

v. Vaughan, 533, 534.
Rinchey v. Stryker, no, 143, 158, 159,

241, 262.
Rindskopf v. Myers, 371.
Rindskoph v. Kuder, 666.
Rinehart v. Long, 289.
Ringgold v. Ringgold, 309.

v. Waggoner, 426.
Ringold v. Suiter, 322.
Riper v. Poppenhausen, 278, 481.
Rippon v. Norton, 657.
Ritchie v. McMullen, 154.
Ritterband v. Baggett, 69.
Roach v. Bennett, 528.

v. Brannon, 388.
Robb v. Brewer, 88.
Robbins v. Armstrong, 538.

v. Butcher, 5S3.

v. Oldham, 454.

v. Parker, 635.

v. Sand Creek Turnp. Co., 216.
Roberge v. Winne, 547.
Robert v. Hodges, 138, 163.
Roberts v. Albany & W. S. R. R. Co.,
130, 709.

v. Anderson, 4S, 338, 699, 700.

v. Buckley, 7, 12, 46, 477, 567,
570, 606, 613.

v. Gibson, 294.

v. Guernsey, 12.

v. Hawn, 450, 454.

v. Medbery490.

v. Shepard, 427.

v. Stevens, 644, 655, 660.

v. Tobias, 602.

v. Vietor, 19, 23, 347, 355, 551,
566.
Robertson v. Johnston, 660.

v. Sayre, 107, 164, 242, 720, 723.

v. Western, etc., Ins. Co., 661.
Robinson v. Bates, 545.

v. Clark, 526.

v. Consolidated R. E. & F. I.
Co., 391.

v. Dryden, 7.

v. Elliott. 27, 471, 619, 620, 625,
626, 633.

Robinson v. Frankel, 4-'^, 435, 436.

v. Holt, 52, 323.

v. Huffman, 60.

v. Stevens, 523, 525.

v. Stewart, 61, 62, 115, 141,, 201;,
306, 350, 534, 7.0.

v. Wallace, 539.

v. Williams, 391.
Robinson Motion Co. v. Foot, 705.
Rocheblave v. Potter, 454.
Rochford v. Hackman, 65, 047, 657.
Rockford Boot& S. Mfg. Co. v. Mastin,

706.
Rock Island Nat. Bank v. Powers, 621.
Rockland County v. Summerville, 434,

706, 707.
Rockwell v. McGovern, 609.
Rockv Mountain Nat. Bank t. Bliss,

151, 152, 153-
Rodgers v. Dibrell, 217.
Rodman v. Harvey, 331.

:'. Henry, 116, 235.
Roe v, Hume, 3S9, 562, 563, 609.

v. Meding, 445,451.

v. Mitton, 374.

v. Moore, 359.
Roeber v . Bowe, 674.
Roffey v. Bent, 647.
Rogers v. Albany & W. S. R. R. Co.,
129.

v. Brent, 133.

v. Brown, 515.

v. Decker, 269.

v. Gosnell, 81.

v. Hall, 497.

v. Jones, 58, 67, 672.

v. Ludlow, 77.

v. Rogers, 146, 267.

v. Verlander, 191, 199, 394.
Rohrbough v. Johnson, 454.
Rollins v. Mooers, 667.
Romaine v. Chauncey, 87.
Roman v. Mali, 720.
Romans v. Maddux, 523.
Rome Exchange Bank v. Eames, 637.
Romine v. Romine, 330.
Rood v. Welch, 232.
Rooker v. Rooker, 374.
Root v. Reynolds 375.
Roper v. McCook, 172.
Rose ?\ Brown, 60, 198, 366.

v. Colter, 190, 393, 451, 519.

v. Hatch, 87.

v. Renton, 601.

v. Sharpless, 93.
Roseboom v. Roseboom, 643.
Rosenberg v. Moore, 103, 333.
Rosenblatt v. Johnston, 262.
Rosenstein v. Coleman, 584.
Rosenthal v. Coates, 260, 521.

v. Walker, 2S4.
Rosher, /// re, 640.
Ross v. Bridge, 339.

i'. Caywood, 673.

liv

References'] TABLE OF CASES. [are to pages.

Ross :•. Crutsinger, 418.
ggan, 424.

r . 1 la nil I

v. McLung, 135.

, . Wcllman. 476, 501.

v. Wood, 147.
Rosseau . Bleau, 225.
Rothchild 1 . Rowe, 449.
Rothgerber v. Gough, 431-
Rothschild v. Kohn, 708.

- , Mark, 520.

- ilomon, 574, 609, 610, 611.
Rouett v. Milner, 414.
Rourkc v. Bullens, 449.
Rouse v. Bowers, 557, 560.

Southard, 2S5.
Rowland v. Coleman, 274.
Roy v. Bishop of Norwich, 45.
Royal Baking Powder Co. <". Sherrell,

' 72.
Royall v. McKenzie, 483.
Royce v. Gazan, 370, 477.
Rover Wheel Co. v Fielding, 176, 389,
562, 595.

v. Frost, 350.
Rozek v. Redzinski, 88.
Rozell v. Vansyckle, 733.
Rozier v. Williams, 454.
Rucker r. Abell. 341.

v. Moss, 481.
Ruckman v. Conover, 718.
Rudy r-. Austin, 209, 377.
Ruffing v. Tilton, 21S.
Ruffner v. Welton C. & S. Co., 347.
Rugan v. Sabin, 690.
Ruggles v. Brock. 237.
Ruhl v. Phillips, 357.-427, 557-
RutTK-rv v. McCulloch, 564 717.
Runals ?■. Harding, '331.
Rupe t. Alkire. 24, 354.
Ruse v. Bromberg, 216, 423.
Rush v. Barr, 514.

7'. Vought, 114.
Russell, Ex parte, 203.

7'. Clark, 107, 169, 250.
I Iyer, 109, 133.

7'. GrinneP, 656.
I ,asher, 267.

v. Lennon, 93.

7'. O'Brien, 4<>\.

?■. Rutherford

7. Winne, 133, 347, 353, 408, 621,
623.
Rutherford v. Chapman, 532.

7'. Schattman, 495.
Ruyter v. Reid, 122.
Ryall 7'. Rolle, 37 40, 107.
Ryan v. I

-.-. S[>ii-ih, 271. 273.

7'. Staples

7. Webb
Ryder v. Hulse

7'. Si^'-ofi ■

v. Wombwell, 499.

Ryhiner -<■. Ruegger, 547.
Ryland v. Callison, 133, 246.
Ryle 7. Falk, 126.

Sabin <". Columbia Fuel Co., 357, 481.

Sacry 7'. Lobree, 481.

Safford -■. Douglas, 708.

Sage v. Memphis, etc., R. R. Co., 167.

v. Mosher, 215, 216, 258.
St. George v. Wake, 544.
St. George's Church Soc. v. Branch,

391-
St. John v. Benedict, 720.

v. Pierce, 219.
St. Louis & S. F. Ry. Co. v. Johnston,

273, 274.
Salisbury v. Morss, 260.
Salmon v. Bennett, 187, 437.

v. Smith, 304.
Salt Springs Nat. Bank v. Fancher,

322.
Sammons v. O'Neill, 676, 679.
Samuel v. Kittenger, 426.

v. Salter. 660.
Sanborn v. Kittredge. 113.
Sanders v. Clason, 82.

v. Logue, 183.
Sandman v. Seaman, 126, 415.
Sands v. Cod wise, 38, 229, 343, 431.

?•. Hildreth, 301.
Sanford v. Lackland, 65.

7'. Sanford, 396.
Sanger v. Colbert, 426, 487.

v, Flow, 549.

v. Upton, 131.
Sangston v. Gaither, 20.
Sankey t. O'Maley, 336.
Saratoga County v. Deyoe, 163, 219.
Sargent r. Salmond, 40, 67, 106, 107.
Sarle v. Arnold, 399, 410, 450, 451, 497,

498.
Satterlee 7\ Matthewson, 574.
Sauer v. Behr, 420, 619.
Saunders v. Lee, 666.

v. Parrish, 498.

7'. Reilly, 389, 562.

v. Waggoner, 611.
Savage v. Dowd, 704.

v. Hazard, 667.

v. Knight, 47.

v. Murphy, 135, 193, 195, 208,
209, 360, 361, 534.

v. O'N'eil. 124, 524.

v. Smith, 520.
Savings Bank of N. H. v. Bates, 615.
Savoye v. Marsh, 517.
Sawin v. Guild, 74.
Sawyer v. Almand. 700.

7'. Bradshaw, 400.

v. Harrison, 474.

v. Hoag. 131, 237, 240 268.

v. Levy, 703, 7:5.

v. Noble, 219.

v. Thayer, 227.

References'] TABLE OF CASKS. [aretofiage*.

lv

Sayles v. Best, 79.
Sayre v. Flournoy, 6S.

v. Fredericks, 35, 52, 306, 30S,
375, 4io.

v. Hewes, 408.
Scales v. Scott, 160.
Schafer v. Reilly, 121.
Schaferman v. O'Brien, 259, 416.
Schaible v. Ardner, 19, 700.
Schatz v. Kirker, 414.
Scheble v. Jordan, 490.
ScheitHn v. Stone, 301, 433.
Schermerhorn v. De Chambrun, 724.

v. Merrill, 62.

v. Negus, 640.
Schiele v. Healy, 609.
Schleisinger 7>. Sherman, no.
Schloss v. Wallach, 115, 125, 555.
Schmidlapp v. Currie, 102, 388.
Schmidt v. Niemeyer, 476.

v. Opie, 374', 375.
Schneider v. U. S. Life, etc., Co., 56.
Schnicker v. People, 487.
Schoeffler v. Schwarting, 338.
Scholey v. Worcester, 184, 213.
Schram v. Taylor, 357.
Schrenkeisen v. Miller, 320.
Schreyer v. Scott, 1S0, 181, 188, 193,

196, 198, 200, 203, 204, 205, 523.
Schribar v. Piatt, 92.
Schroder v. Tompkins, 548, 551, 614,

615.
Schroeder v. Bobbitt, 408, 703.

v. Walsh, 357.

v. Young, 8.
Schroer v. Pettibone, 145.
Schumacher v. Bell, 432, 497.
Schuster v. Stout, 183.
Schwartz v. Soutter, 563.
Schwed v. Smith, 740, 741.
SchwierT'. N. Y. Cent. & H. R. R. R.

Co., 432.
Schwinger v. Hickok, 116.
Scofield v. Spaulding, 492.
Scoggin v. Schloath, 395, 396
Scott v. Alford, 587, 620.

v. Davis, 363, 379.

v. Depevster, 279.

v. Gill, 81.

v. Hartman, 1S3, 244, 245.

v. Indianapolis Wagon Works,
51, 100.

v. McFarland, 271.

v. McMillen, 168, 169.

v. Magloughlin, 222, 521

v. Mills, 554.

v. Morgan, 163.

v. Neely, 7, 137, 139.

v. Nevius, 86, 661.

v. Wallace, 172.

v. Winship, 415, 459.
Scottish Amer. Mortgage Co. v. Fol-

lansbee, 219.
Scouton v. Bender, 298.

Scoville t\ Canfield, .
Scribner v. Fisher, 5 1 7.
Scrivenor v. Scrivenoi . 419.

Sim Ins. Co. v. Stebbins, 336.
Seale v. Vaiden,
Seaman v. Stoughton, 229.
Sens ,-'. Choate, 66 ».

7'. I lanks i 1 .

7'. Putnam, (140.

,-•. Shafer, 431.
Seasongood r. Wan- 6
Seaver v. Bigelows, 2i(>, -\^.
Seavey 71. Walker, 45.
Seavy r\ I )earborn, 676, 686.
Sebrauth v. Dry Dock Saw Bank, 116.
Second Nat. Bank t. Brady, 724.

7-. Merrill, 208, 357, 421, 531.

v. Schrauck, 550.

v. Yeatman, 413, 431, 432.
Secor 7\ Lord, 81.
Sedgwick ?■. Stanton, 31.

v. Tucker, 370.
Seeleman v. Hoagland, 277, 301, \- g
Seger'sSons v. Thomas Bros., 407, 431,

703.
Seitz v. Mitchell, 302, 303, 435, 526, 527,

539-
Seivers v. Dickover, 343.
Selleck v. Phelps, 349.
Selover v. Coe, 264.
Semmens v. Walters, 7, 539.
Semmes v. Hartford Ins. Co., 166.
Senter v. Mitchell, 116.
Sere v. Pitot, 231.
Severs v. Dodson, 181, 1S2.
Seward v. Jackson, 183, 186, 1S9, 192,

205, 376.
Sexey v. Adkinson, 140.
Sexton v. Anderson, 389.

v. Wheaton, 60, 96, 100, 106, 1S9,
194, 204, 205, 209, 221, 223,
412, 533-
Seymour v. McKinstey, 666.
v. O'Keefe, 453, 4<">.
v. Wilson, 32, 276, 370, 371, /,'j;,
637, 665, 666.
Shackelford ;:'. Shackelford, 102.
Shackleford v. Collier, 229.
Shaeffer v. Fithian, 344.
Shafer ^. O'Brien, 290.
Shainwald v. Lewis, 58, 116, 296, 331.
Shand v. Hanley, 199, 220, 26S, 298,

314, 337. 342.' 34". 366.
Shankland's Appeal, 650, 657, 662.
Shanks v. Klein, 389.
Shannon -\ Commonwealth, 034.
Sharp v. Cosserat, 647.
V. Sharp, 297.
7'. Teese, 712.
Sharpe v. Davis, 717.

7'. Freeman, 225.
Shattuck 7\ Freeman,
Shauer v. Alterton, 435, 446. 4
693.

Ivi

Re/trtneJ\ TABLE OF CASES. [are to pages.

Shaul v. Harrington, 452.
Shaver 1 . Brainard, 251.

Shaw ;. Dwight, 14''. 155. 176, J77. 178,
-47. 476-
: . Levy, 453.
-■. Manchester, 146.
v. Millsaps, 255. 264, 717.
ipei . ' '74-
. 1 hompson, 449.
v. Wilshire, 449.
Shawano County Bank v. Koeppen, 88.
Shay :. Security Hank, 233.

Wheeler, 414.
Shea ,-. Knoxville ,V Ky. R. R. Co.,

157-
Sheafe v. Sheafe, 100, 111, 15S, too.
Shealy v. Edwards, 403, 497, 703.
Shean v. Shay, 183, 244, 416.
Shearon v. Henderson, 434.
Slice v. Hale, 047.
Sheldon v. Weeks, S3.

n H. B. Co. v. EickemeyerH, B.

M. Co., 221.
Shelley - . Boothe, 704.
Shellington v. Howland, 166.
Shelton r. Church, 414.
Shepard 7\ Walker, 55.
Shepherd v. Trigg, 454.

?'. Woodfolk, 340, 342.
Sheppard v. Thomas, 204, 212.
Sheppard's Estate, 506.
Sheppards v. Turpin, 583.
Sherman v. Barrett, 32.

v. Blodgetl, 4S3, 484.
v. Elder, 532, 552.
v. Hogland, 9, 190,278,403,413,
435. 495. 502.
Sherrill Roper Air Engine Co. v. Har

wood, 339.
Sherron v. Humphreys, 451.
Sherwin r. Gaghagen, 619, (>?(>.
Sherwood v. Su:t<>n, 2S6, 513.
Shields v. Barrow. 249.
Shine t-. Gough, ' ;- 1.
Shipman v. .Etna Ins. Co., 231.

, I amis s, 29, 386.
Shirley v. Long, 231.

7'. Teal.
Shirr.: , 406.

Shober v. Wheeler, 413, 435.
v!i-»-inaker ?'. Cake 28.

. 278.
Shontz v. lirown, 181, 183, 222.
Short v. Tinsley, 340.
Shorten v. Woodrow, [64.
Short Staple(The), 12.
Shotwell, In r, .
Showman . . Lee, 347, 42?.
Shryock v. Waggoner, - .
Shufeldt -■. I oehm, too, toi, 131, 167.
Shultz -■. Hoagland, to, 435, 553, 558,

593, 6oq,

'.11.
Shumway r. Rutter, 449.

Shumway v. Shumway, 330.

Shurtleff v. Willard, 449, 635.

Shurts v. Howell, 155.

Shutts v. Fingar, 223.

Sibly ?'. Hood, 454.

Sibthorp v. Moxom, 80.

Sickle. Matter of, 115, 555.

Sickles v. Sharp, 47.

Sickman 7'. Wilhelm, 351, 368.

Sidensparker 7'. Sidensparker, 146, 476,

667.
Sides v. McCullough, 213.

7'. Scharff, 278.
Siedenbach v. Riley, 450.
Sigler 7'. Knox County Bank 102
Sillick v. Mason 86.
Silliman 7'. Haas, 491.

v. United States, 354.
Sillyman 7-. King. 529.
Silverman v. Lessor, 517.
Silvers v. Hedges, 12.
Silvis v. Oltmann, 474.
Simar v. Canaday, 134, 215, 543.
Simmons v. Ingram, 108, 264, 366.

v. Jenkins, 619.
Simms 7'. Morse, 9, 435, 503, 539.
Simon v. Ellison, 25;.

v. N'orton, 589.
Simon-Gregory Co. v. McMahan, 489.

v. Schooley, 673, 679.
Simpson v. Dall, 95.

v. Del Hoyo, 666.

v. Warren, 231.
Sims v. Gaines, 19, 51, 66, 424, 480.

v. Phillips, 92.

v. Thomas, 59, 77.
Simson v. Brown, Si.
Singer v. Goldenburg, 426.

v. Jacobs, 681, 688, 689.

v. Wheeler, 117, 374.
Singree v. Welch, 374.
Sipe v. Earman, 416, 559.
Sipley v. Wass, 666.
Skarf v. Soul'jy, 51.
Skeate v. Beale, 354.
Skeele v. Stanwood, 140.
Skellie v. James, 526.
Skipwith v. Cunningham, 416.
Skowhetran Bank 7'. Cutler, 36.
Slater v. Sherman, 51.
Slattery -.•. Schwannecke, 357.
Sledge 7'. Obenchain, 212.
Sleeper -■. Chapman, 401, 626.
Slingluff v. Smith, -<>i .
Sloan 7'. Birdsall, 21.

v. Huntington, 530.
Small 7'. Boudinot, 275.

7. Owings, 1 14.

V. Small, 418.
Smart -■. Bement, 669, 670.
Smeltzer v. I roslee, 66 ;.
Smets v. Williams, 55.
Smillie v. Quinn, 56, 88.
Smith v. Acker, 617.

References] TABLE OF CASES. [are to pages.

lvii

Smith t. Allen, 88, 383.
v. Babcock, 296.
v. Barclay, 69.
v. Bellows, 569.
v. Blake, 118.
?'. Bowen, S3.
v. Boyer, 425.
v. Bromley, 729.
v. Brown, 432.
v. Bryan, 740.
v. Buchanan, 518.
v. Champney, 471.
v. Clark, 640.
v. Collins, 279, 483.
v. Conkwright, 26, 634.
v. Craft, 221, 458, 592, 62S, 702,

703, 705, 713, 7M-
v. Crisman, 469.
v. Davis, 608.
v. Ely, 619, 623, 633.
v. Emerson, 93.
v. Felton, 520.
v. Garey, 76.
v. Greer, 197.
v. Grim, 255, 264.
v. Henkel, 11.
v. Henry, 690.
v. Howard, 575, 717.
v. Hubbs 732.
v. Hunter, 453.
v. Hurst, 634.
v. Johnson 567.
v. Kay, 275, 729.
v. Kearney, 58.
v. Kehr, 31.
v. Kelley, 336.
v. Longmire, 159, 175.
v. Lowell, 437, 4S0.
v. Meaghan, 243.
v. Milieu, 140.
v. Mitchell, 89, 553.
v. Moore, 65, 457.
v. Muirheid, 35, 153.
v. Munroe, 578, 613.
v. National Benefit Soc, 4S7, 488.
7'. New York L. I. Co., 227, 425.
v. Onion, 423, 424.
v. Quartz M:n. Co., 737.
v. Railroad Co., ror, 140, 172.
v. Reid, 18, 23, 109, no, 188, •

192, 314,315,435.
v. Riggs, 533.
v. Rumsey, 31, 92, 158.
v. Sanborn, 64.
v. Sands, 324.
v. Schulting, 2t8.
v. Schwed, 501, 706.
v. Sipperly, 389.
v. Skeary, 704.
v. Smith, 352, 389, 390, 517, 543-

563.
v. Spencer, 377.
v. Towers, 644, 654, 655, 658.
v. Vodges, 188, 204, 437.

Smith r'. Vreeland, 1S7.

v. Water Comm'rs of Norwich,

357-
7'. Weeks, n;, 173.
v. Welch, 459.
V. White 433.
V. William
7'. Wise, 32I, 34O, 560, 56I.

7'. Wood, 96, 273, 275.

v. Veil, 437-
Smith's Appeal, 551, O14.
Snedecor v. Watkins, 516.
Snell v. Harrison, 431.
Snelling -•. Mclntyre, 350.
Snodgrass t. Andrews, 104, 1 56, 172,
215, 223.

v. Branch Bank of Decatur, 286,

513-

Snow v. Lang, 723.

7'. Paine, 370.
Snowdon v. Dales, (14, 657,
Snyder v. Braden, 354.

v. Christ, 206, 366.

v. Dangler, 278.

v. Free. 190, 351, 352, 392, 394,
488.
Societa Italiana v. Sulzer, 301.
Sockman v. Sockman, 111.
S iden v. Soden, 1S2, 416.
Sohier v. Johnson, 71.
Solinger 7.'. Earle, 712.
Solinsky v. Lincoln Sav. Bank, S4, 324.
Somerville v. Donaldson, 330.
Somes v. Skinner, 502.
Sommermeyer v. Schwartz, 203, 414,

537-
Sommerville v. Horton, 635.
Songer ?'. Partridge, 717.
Sorenson v. Sorenson, 208.
Souder's Appeal, 113, 121.
Soule v. Chase, 517.
Southall v. Farish, 273, 504.
Southard v. Benner, 57, 139, 14-'. [68,

225, 229, 231, 233, 553, I
South Branch Lumber Co. v. < >u, 571,

595, 596, 606. 612.
South Danvers Nat. Bank v. Stevens,

551-

South Sea Co. v. Wymondsell. =1 (,
Southwick 7'. First Nat. Bank, 27
Southworth v Adams, 136.
Spackman v. Evans, 17.
Spader 7A Davis, 58, 128, 14S
Sparhawk .-. Cloon, 65, 656.

v. Yerkes, 70, 71. 74.
Sparks v. Brown. 490, 619.

.-'. Dawson, 1 ;.

v. De La Guen

7'. Mack. 4S1, iii
Spaulding 7'. Blythe, 278, 361, 519.

v. Fisher, 164.

7'. Keyes, 55. 501, 525, 630.

v. Strang, =7", 704, 7r5-

Speiglemyer 7'. Crawford, 157, 223.

lviii

TABLE OF CASES. {are to Pages.

Spelman v. Freedman, 139, 177. 221,
248,271,332,547,597

Spem . . well, 55''.

Smith, 424. 47^, 700.
Spencer :. Armstrong, 155.
. Ayrault, 3S7.
I lyler, 115.
v. Godwin, [87.
v. Jacks. hi, 601.
1 . Myers, 56.

5] enter, 544.
■ . Ktheridge, 628.
Spicer v. Ayers, 155.
v. Hunter, 321.
: . Spicer, 10.
Spindle v. Shreve. 59, 65, S4, 85, 87,

136, 638, ( 50, 652, 653.
Spirett v. Willows, 61 1.
Splawn v. Martin. 357.
Spokane 0>. v. Clark, 83.
Spotts v. Commonwealth, 475.
Sprague v. Cochran, 251.

. 1 laines, 516.
Spraights v. Hawley, 444, 618.
Spring ?•. Short, 57, 231, 232. 553.
Spring Co. : . Knowlton, 731.
Springer v. Savage, 660.
Springfield Homestead Assoc, v. Roll,

70I, 717.
Stacy v. Deshaw, 55, 503.

:•. Thrasher, 154.
Stadelman v. Loehr, 564.
Stafford v. Merrill, 610.
Stall v. Fulton. 529.
Stambaugh's Estate, 662.
Stamper v. Hibbs, 709,
Stanbro v. Hopkins, 474.
Stanford v. Lockwood, 553.
Stanley v. Hum e

v. National Union Bank, 459,

462.
v. Robbins, 3S1.

Si hwalby. 377.
v. Stanton. 285.
v. Thornton. '
Stanton z . < rreen, 308. .
v. Kirsi li
v. Shaw, 725.
v. Westover, 564.
Staples v. Bradley, 109, 133.

. Smith, 501.
Starin v. Kelly, 38, 358, 370, 478, 559,

Stark v. Grant, 450, 451.

v. Starr, 8.
Starke v. Little page, 72C, 734.
Starks v. Curd. 232.
Starr v. Peck, to, [2.

Starr, 397.
State v Bowen, 129, 141.

V. Burk< holder. 245.
Bust 1). 618, 619.

: . I ast( ■ I, 47"-

State v. Durant, 470.

v. Estel, 20.

v. Evans, 394.

{ex rel. Smith) v. Flynn, 462,403.

(ex rel.) Baumunk) v. Goetz, 454.

v. Hemingway, 397.

v. Hope, 347.

v. Keeler, 433, 55S.

v. King, 41.1

v. McBride, 58, 63.

v. Mason, 357, 405, 676, 685, 691.

(ex rel. Peirce) v. Merritt, 426,
431. 676.

v. Miller, 124.

(ex rel. Brown) v. Mitchell, 399,
45S.

v. Mueller, 26.

v. Phcenix Bank, 500.

v. Purcell, 691.

v. Roever, 624, 633.

(ex rel. Enderlin State Bank) v.
Rose, 550, 557.

v. Rosenfeld, 460.

v. Thomas, 102.

?■. Williams, 518.
State Bank v. First Nat. Bank, 551.

v. Whittle, 393.
State Saw Bank v. Buck, 421.
Staton v. Pittman, 231.
Steadman v. Wilbur, 524, 525.
Stearns v. Gage, 360, 671;, 676, 678, 679,
683, 6S4, 686^ 692.

v. Harris, 73.

v. Page, 284, 285, 286, 513.
Stebbins v. Miller, 4S6.
Steel v. De May, 434.

v. Goodwin, 614.
Steele v. Benham, 4S7, 459, 632.

v. Ward, 357.
Steelwagon v. Jeffries, 463.
Steere v. Hoagland, 84, 154, 156, 166,

"'7. 325. 415.
Steib v. Whitehead, 660.
Stein v. Hermann, 322.

v. Munch, 632.
Stephens v. Adair, 717.

v. Cady, 71, 73, 74.

v. GifTord, 450, 453.

v. Meriden Britannia Co., 235.

v. Perrine, 234, 633.

v. Regenstein, 610.

v. Whitehead, 141, 288.
Stephenson v. Donahue, 538.
Stern Auction & C. Co. v. Mason, 414.
Sternbach v. Leopold, 420.
Sterry v. Arden, 383, 672.
Stetson v. Miller, 594.
Stevens v. Breen, 618.

v. Brennan, 345.

v. Carson, 521).

V. Dillman, 415, 431, 432, 486.

7\ Gladding, 74.

V, Hinckley, 423, 424.

v. Irwin, 457.

References'] TABLE OF CASES. [are to pages.

lix

Stevens v. Merrill, 3.

v. Myers, 338.

v. Pierce, 428.

v. Robinson, 23, 190, 437.

v. Wiley, 736.

v. Works, 182.
Stevens Lumber Co. v. Kansas City P.

M. Co., 357.
Stevenson v. Stevenson, 51.

v. White, 94.
Steward v. Thomas, 468.
Stewart v. Beale, 165.

v. Dunham, 136, 740.

v. Emerson, 104.

v. English, 58, 67.

v. Fagan, 140.

v. Fenner, 488, 498.

v. Hopkins, 419.

v. Isidor, 298.

v. Johnson, 495.

v. McMartin, 68, 117.

v. Mills Co. Nat. Bank, 417.

v. Piatt, 230, 378, 617, 618, 717.

v. Rogers, 190.

v. Spenser, 577.

v. Stewart, 543, 544.

v. Thomas, 491.

v. Wilson, 416.
Stickney v. Stickney, 536.
Stileman v. Ashdown, 189, 204, 412.
Still v. Focke, 564.

v. Spear, 650, 662.
Stillings v. Turner, 720, 728.
Stillwell v. Stillwell, 25S, 735.
Stilwell v. Van Epps, 126.
Stimson v. White, 529.

v. Wrigley, 182, 448, 470, 633.
Stinson v. Hawkins, 363, 406.

v. Williams, 58, 67.
Stiles v. Champion, 595.
Stix v. Chaytor, 452.
Stock Growers' Bank v. Newton, 104,

247, 419, 421.
Stockwell v. Blarney, 491, 492.

v. Sillowav, 367.
Stoddard v. Butler, 37, 416.
Stokes v. Amerman, 56, 541.

v. Coffey, 57.
Stokoe v. Cowan, 51, 58.
Stone v. Anderson, 160.

v. Chisolm, 131.

v. Grubham, 412.

v. Locke, 45.

v. Myers, 183.

v. Peacock, 471.

v. Spencer, 363, 364.

v. Stone, 543.

v. Westcott, 144, 660.
Stoneburner v. Jeffreys, 581.
Storey v. Agnew, 365.
Storm v. Davenport, 231, 556.

v. United States, 515.

v. Waddell, 74, 115, 129, 708, 709.
Stout v. Phillipi Mfg. & M. Co., 702.

Stout r1. Stout, 259.

v. Watson, 594
Stovall v. Farmer^' & M . Bank, 342.
Stover 7a Herrington, 1.06,426.
Stow v. Chapin, 662.
Stowe v. Taft, 449,
Stowell v. Hastings, 640.

t. Hazelett, 489,
Strader v. Mullane, ,
Stramann v. Scheeren, 523.
Strang v. Bradner, 518.
Stratford v. Ritson, 264.
Strathmore 7\ Bowes, 544.
Stratton v. Putrey, 424, 480.
Strauss v. Kranert, 13.

v. Parshall, 525.
Strike v. McDonald, 220.
Striker t. Mott, 609.
Stroff v. Swafford, 413.
Strong v. Clem, 1 17.

'■. Skinner, 62.

v. Strong, 51.

v. Taylor School Township, 217,

293-
Strouse v. Becker, 93.
Stuart v. McClelland, 533.

v. Smith, 409.

v. Stuart, 183.
Stucky v. Masonic Sav. Bank, 694.
Stumbaugh v. Anderson, 391.
Stump v. Rogers, 223.
Sturge^ v. Crowninshield, 517.

v. Vanderbilt, 140.
Sturm v. Chalfant, 15, 387.
Sturtevant v. Ballard, 29, 445.
Suau v. Caffe, 392.
Suffern v. Butler, 338.
Sugg v. Tillman, ii 1
Suiter v. Turner, 468.
Sukeforth v. Lord, 355.
Sullice v. Gradeni^o, 224.
Sullivan v. Iron & Silver Min. Co., 277.

v. Miller, 156, 560, 592.

v. Portland & K. R. R. Co., 512.

v. Smith, 564.

v. Sullivan, 442.
Summers v. Babb, 545.
Sumner v. Brady, 712.

v. Cook, 490.

v. Dalton, 449, 463.

v. Hicks, 135, 571, 585.

v. Newton, 661.
Supervisors of Saratoga Co. ~\ Deyoe,

163, 219, 288.
Susong -•. \\'illiams, 700.
Sutherland, /// r, ■, 69.

v. Bradner, 19, 355, 356 51
576, 6i 1.
Sutphen v. Fowler, 738.
Sutton v. Ballou, 45a, 465.

v. Hanford, 26.
Suydam v. Northwestern Ins. Co., 270.
Swaby's Appeal, 664.
Swaine v. Perine, 543,

lx

References'] TABLE OF CASES. [are to pages.

Swan v. Morgan, 488, 490.

: . Ri ibinson, -

Smith, 15". 222, 341.
Swan Land & C. Co. v. Frank, 141, 172,

249, 252.
Sweeney r. Conley, 370.
Sweeny v. Grape Sugar Ref. Co.. 129.
Sweet v. Converse.

v. Dean. 477.

.- . Scherber, _

v. Tinslai .

v. Wright, ?2. 4S8.
Sweetsei - . Bates, 487.
• Iber, mi.

v. Smith, 7' ■ ;.
Swift 7 . Agnes, 442.

v. liar;, 321, 703.

v. Ma^s. Mut. Life Ins. Co., 4S7.
Swinford v. Rogers, 323.
Sydm >r v. > .• - . 456.

Syracuse Chilled Plow Co. v. Wing,
374. 536-

Taafi'e, Ex part,-, (47.

Tabor v. Van Tassell, 490, 558.

Taff v. Hosmer, 24--.

Taft v. Marsily, 552.

Taggart v. Stanbery, 396.

Talbott r'. Randall, 140.

Talcott v. Harder, 703, 704, 705.

v. I less, 371, 609.
Talley v. Curtain, 7.
Tallmadge v. Sill, 76.
Tall on 7'. Ellison, 620.
Taltarum's Case, 651.
Tams v. Bullitt, 232.
Tantum v. Green, 5S, 6S, 690, 693.

v. Miller, 717, 72-.
Tapia t. Demartini, 391.
Tappan v. Evans, 126, 178.
Tapscott -■. Lyon, 37.
Tarback v. Marbury, 422.
Tarbell v. Griggs, 153, 154.
Tarrant v. Backus, 659.
Tarsney r\ Turner, 523.
Tasker v. Moss, 142.
Tate v. Liggat. 140.
Taylor v. At wood, 341.

7'. Maker, I ; (

--. Bowker, 139, 140, 142, 145,
1-7. 172.

v. Branscombe, 100, 168.

v. Cloud, 739.
. I Dickinson, 338.

7'. I larwell, '.40.
1 1' ilmes, 144, 221.

v. Tones, 40, 107, 380.

?•. Mason

-■. Miles, 373.

v. Missouri Gla^s Co., 389.
v. Robinson, .
I aylor, 312.
?\ United

LSI u I - |.

Taylor v. Webb, 252, 255, 264, 491.

v. Weld, 737.

7 . Wend ling, 406.
Teabout v. Daniels, 469.
Teague v. Lindsey, 436.
Tedesco v. Oppenheimer, 632.
Tedrowe v. Esher, 492, 495.
Teed v. Valentine, 146, 193, 194, 366,

476.
Teese v. Huntingdon, 499.
Tefft v. Stern, 347.
Teller v. Randall, 235.
Ten Broeck v. Sloo, 68, 69.
Ten Eyck v. Witbeck, 379.
Tennent v. Battey, 159.
Tennessee Nat. Bank 7'. Ebbert, 619,

625.
Tenney v. Evans, 61, 358.
Terrell v. Green, 403.
Terry v. Anderson, 131, 145, 172.

v. Calnan, 220.

7-. Hopkins, 544.

v. Munger, 547.

v. Tubman, 178.

7. Wheeler, 465.
Tessier 7 . Wyse, 333.
Tevis v. Doe, 108.
Texas v. Chiles, 474, 475.
Texas & Pac. Ry Co. v. Cox, 269.
Thacher v. Phinney, 196, 198, 370.
Thames v. Rembert, 301, 399, 666, 699.
Thatcher v. Candee, 562.
Thayer v. Thayer, 543.
Third Nat. Bank v. Guenther, 393,

531.

Thomas, /;/ re, 230.

v. Beals, 341.

7'. Black, 491.

7: Hubbell, 476.

7'. Mackey, 272, 275, 277.

7. McEwen, 55.

7 . Merchants' Bank, 151.

7'. Pyne. 416.

v. Sullivan, 400.

v. Talmadge, 558.
Thomason v. Neeley, 109, no, 309.
Thompson v. Adams, 70.

v. Baker, 297.

v. Bickford, 6i, 340.
. lllanchard, 450, 459.

7\ Brown, 226.

v. Crane, 193.

7'. Cundiff, 56, 541.

7'. Diffenderfer, 103.
. I >rake, 407.

7'. Duff, 692.

v. Feagin, 526.
'<•• Fry, 547.

v. Furr, 34.

v. Hall, 485.

v. Loenig, 529.

7'. Moore. 45, 214.

7'. Murphy, 660.

7. Xixon, 68.

References'] TABLE OF CASES.

lxi

Thompson v. Paret, 453.

v. Pennell, 424.

v. Rainwater, 549.

v. Richardson Drug Co., 425,
618.

v. Robinson, 183, 416.

v. Sanders, 304.

v. Sherrard, 335.

v. Thompson, 87, 638.

v. Tower Mfg. Co., 394, 434.

v. Towne, 75.

v. Van Vechten, 142, 167, 219,
247.

v. Whitmarsh, 561.

v. Wilhite, 470.

v. Yeck, 454.
Thompson's Appeal, 146.
Thomson v. Crane, 92, 180.

v. Dougherty, 199, 203, 209, 210.

v. Hester, 181.
Thornberry v. Baxter, 258.
Thornburgh v. Hand, 520.
Thorne v. Bank, 451.
Thornton v. Cook, 462.

v. Hook, 7.

v. Tandy, 490.
Thorp v. Keokuk Coal Co., 81.
Thouron v. Pearson, 418, 419.
Thrasher v. Bentley, 549.
Threlkel v. Scott, 276.
Throckmorton v. Chapman, 432.

v. Rider, 478.
Thurber v. Blanck, 103, no, 159, 161,

173, 174, 175, 242.
Thurston v. Rosenfield, 551.
Tibbals v. Jacobs, 468.
Tichenor v. Allen, 258.
Ticknor v. McClelland, 454, 470.
Ticonic Bank v. Harvey, 167.
Tiernan v. Poor, 280.
Tiernay v. Claflin, 670.
Tildesley v. Lodge,. 670.
Tilford v. Burnham, 129.
Tillinghast v. Bradford, 65, 637, 650,

654, 657, 660.
Tillman v. Heller, 478.
Tillotson v. Wolcott, 90, 116.
Tillou v. Britton, 705.
Tilson v. Terwilliger, 459, 461, 488,

49°- 493-
Tilton 7'. Beecher, 306.

v. Cofield, 260, 297, 315, 697, 702.
Tisch v. Utz, 491.
Tobev v. Leonards, 303.
Tobie & Clark Mfg. Co. v. Waldron,

1S3.
Todd v. Lorah. 3S7, 388.

v. Monell, 35, 66.

v. Nelson, 193, 195, 196.

v. Sawyer, 640.
Tognini v. Kyle, 7, 20, 399, 452, 465.
Toker v. Toker, 77.
Tolbert v. Horton, 140.
Tolland Co. Ins. Co. v. Underwood, 659.

Tolles v. Wood, 84, ;S, 650,

661.
Tolman ?>. Marlborough, 80.

v. Ward, 357.
Tolputt v. Well!
Tomlinson t. Matthews, 525.
Tompkins v. Fonda, 66, 68, 1 17, 545.

7'. Hunter, 4''. 549. :

7'. Nichols, 303, 468, 477. 478.

v. Purcell, ti6, 1 5 \.

v. Sprout, 32, 346, 349.
Toney v. McGehee, 7, >i, i_. [97
Toof v. Martin, 481.
Tool Co. v. Norris, 597.
Tooley v. Bacon, 371.
Topping v. Lynch, 457.
Torbert v. Hayden. 628.
Totten 7 . Brady, 704.
Towers v. Hagner, 524.
Towle v. Hoit, 33, 480.
Town of Norwalk v. Ireland, 526, 527,

528.
Town of Venice v. Woodruff, 263.
Towne v. Fiske, 493.

v. Smith, 517.
Townsend v. Early, 647.

v. Little, 463, 670, (172.

v. Mayor of New York, 245.

v. Stearns, 478, 567, 605, 606, 6< '7.

v. Tuttle. 184

v. Whitney, 223.

v. Williams, 306.
Townshend v. Windham, 76, 77, 209.
Tracy v. Cover, 92.

v. Tuffly, 563, 612.
Trade-Mark Cases, 72.
Traders' Nat. Bank v. Day, 452.

v. Steere, 707, 723.
Tradesman Pub. Co. v. Knoxville C.

W. Co., 240.
Traer v. Clews, 587.
Train v. Kendall, 614.
Traip v. Gould, in.
Trapnell v. Conklyn, 94.
Trappes v. Meredith, 657.
Trask v. Bowers, 463.
Travers v. Ramsay, 452.
Traynor & Keith, /// re, 640.
Trefts 7'. King, 673.
Trego v. Skinner, 104, 259, 267.
Tremain v. Richardson, 555.
Trenton Banking Co. v. Duncan, 507,

509-
Tresch v. Wirtz, 94, 531.
Treusch v, Ottenburg, 359, 502.
Trezavent 7'. Terrell, 180, 1S1.
Trier v. Herman, 150, 365.
Trimble 7\ Turner, 210.

v. Woodhead, 229, 230, 235.
Tripp v. Vincent, 294.
Troll v. Carter, 720.
Trotter v. Watson, 493.
Trough, Estate of, 542.
Troughton v. Troughton, 76.

Re/trencet'] TABLE OF CASES. [are to pages.

Troup :■. Smith, 514.
Trovinger v. McBurney, 599.
Trowbridge v. Milliard, 139, 520.
Troxall 1 . Applegarth, 7.

Troy v. Smith, 477.

Truax v. Slater, 489, 490, 491.

Truesdell v. Bourke, 474.

1 . Sarles, [95, 207, 273, 294, 504.
Trull i , 69S.

Trumbull?. Hewitt, 356, 361, 474, 501.

v. I 'nion Trust Co., 563.
Truscott •■. King, 391, 396.
Trust Co. v. Sedgwick, 326, 545.
Truster Relief Act, In re, 51.
Tryon v. Flournoy, 418, 421.

V. Whitmarsh, 6S5.
Tucker v. Andrews, 360.

v. Drake, 92.

v. Parks, 301.

V. Tucker, 104, 543-

v. Zimmermar, -•<><>.
Tuckwood v. Hawthorn, 486.
Tudor v. De Long, 397.
Tuite v. Stevens, 185.
Tumlki v. Crawford, 30.
Tupper f. Thompson, 100, no.

V. Wise, 740.
Turbeville i\ Gibson, 407.
Turlcy v. Massengill, 640, 660.
Turner v. Adams, 140, 145, 167, 168,
169.

?■. Douglass, 577.

v. First Nat. Hank, 263.
Fi 'wler, 640.

v. Hallowell Sav. Inst., 640.

v. Jaycox, 607, 608.

t'. Nye, 524.

v. Robinson, 260.

v. Turner, 183, 244.

v. Vaughan, 89.
Turnley v. Hooper, 59.
Tuthill v. Skidmore, 4S5.
Tuttle 7'. Turner, 297.
Tuxbury 7\ Miller, 712.
Tux worth ?'. Moore, 464.
Twyne's Case, 36, 38, 46,48,49, 50, 51,
52, 188, 375, 380,402, 412, 416, 443,
447. 621, 741.
Tyberandt v. Rauckc, 434.
Tyler v. Angevine, 372, 496, 513.

7. Peatt, 140.

v. Tyler, 221, 222, 243, 381, 720.
Tyler Paper Co. v. Orcutt-Killick Lith.
Co., 421.

1 'hi v, Dillon, km), 101, 332.

7'. Robison, 452.
1 Fhlfelder v. Levy, n>=. 146.
' 'lire v. Melum.

Ullrich v. Ullrich, 102, 271, 526,
Unangsl v, Goodyear I. K. Mfg. Co.,

I'M.

Underwood -.•. Sutcliffe, 234, 235, 242,
3'4.

Union Bank :■. Ellicott, 615.

7. Kansas City Bank, 135, 387.
Union Nat. Bank v. Reed, 280.

v. Warner, 313, 314, 322, 324,

342.7"7-
Union Stock Yards Bank v. Gillespie,

83-
Union Trust Co. v. Southern Inland

Nav. & Imp. Co., 297.
United States v. Amer. Bell Tel. Co.,
219, 2S7.

v. Amistad, 29, 113.

7'. Beebee, 509.

v. Budd, 304.

v. Griswold, 204, 341, 406, 492.

i'. Hooe, 34, 391.

v. Lotridge, 416.

v. Stiner, 194.

v. Thirty-six Barrels of High
Wines, 500.

v. Throckmorton, 147.

7\ Union Pacific Ry., 99.

v. Wilson, no.
Updike 7'. Ten Broeck, 392.

7'. Titus, 392.
Upshur 7'. Briscoe, 339.
Upton v. Englehart, 237.

v. McLaughlin, 284, 513, 515.

7-. Tribilcock, 237, 240, 268.
Usher 7'. Hazeltine, 211, 667.
Utterson v. Vernon, 37.

Valentine, Matter of, 86.

v. Austin, 29S.

v Lunt, 666, 670.

v. Richardt, 293, 324, 325, 330.
Van Alstyne v. Cook, 298.
Van Bibber v. Mathis, 20, 368, 540.
Van Buskirk :\ Warren, 123.
Vance i-. McNabb Coal, etc., Co., 237.

7'. Phillips, 368.

v. Sch rover, 242.
Yanderpoel v. Gorman, 614, 615.

7'. Van Yalkenburgh, 251, 259.
Van Deusen v. Sweet, 336.
Van Doren v. Mayor, etc., 245.
Van Dyck 7'. McCjuade, 279.
Van Etten v. Hurst, 158.
Van Heusen 7\ Radcliff, 143, 232.
Van Home ?■. Campbell, 640.
Van Kleeckv. Miller, 147,259, 291, 534.
Yanmeter v. Estill, 454, 626.
\'.in Nest 7'. Yoe, 556, 573.
Van Patten v. Burr, 596.
Van Raahe ,-■. Harrington, 676, 686, 691.
Van Rensselaer v, Dennison, 640.

7'. Van Rensselaer, 330.
Van Schaick v. Third Ave. R. R. Co.,

81.
Van Valkenburgh v. Torrey, 47.
Van Weel ?'. Winston, 273, 274.
Y.m Wickle 7'. Calvin, 223.
Van Winkle v. Armstrong, 569.

v. McKee, 717.

References'] TABLE OF CASKS. [are i

Van Wy v. Clark, 717.

Van Wyck v. Baker, 276, 316, 317, 341.

v. Seward, 181, 183, 191, 208.
Vernum v. Hart, 616.
Vasser v. Henderson, 128, 140, 172,

176.
Vattier v. Hinde, 670.
Vaughan v. Thompson, 31.
Vause v. Woods, 335.
Veazie v. Somerby, 449.
Veeder v. Baker, 269.
Venable v. Bank of the U. S., 267,

406.
Venice v. Woodruff, 263.
Verner v. Downs, 177.
Vernon v. Morton, 556, 573.
Verplank v. Sterry, 189, 383.
Verselius v. Verselius, 281.
Vertner v. Humphreys, 528.
Very v. McHenry, 517.
Vick v. Lane, 253.
Vietor v. Levy, 419, 703, 704.

v. Nichols, 613.
Violett v. Violett, 357.
Virginia F. & M. Ins. Co. v. Cottrell,

275-
Vogler v. Montgomery, 31, 92.
Vogt v. Ticknor, 476.
Von Sachs v. Kretz, 489.
Voorhees v. Bonesteel, 94, 274, 303, 531,
532.

v. Carpenter, 233, 709.

v. Howard, in, 140, 179.

v. Seymour, 140, 476, 708.
Voorhis v. Gamble, 251.
Voshell v. Hynson, 338.
Vredenbergh v. White, 448.
Vreeland v. N. J. Stone Co., 1, 505.
Vrooman v. Turner, 81.

W. v. B. (32 Beav. 574), 729.

Wabash St. L. & P. Ry. Co. v. Ham,

205, 237.
Waddams v. Humphrey, 482.
Waddell v. Lanier, in, 228.
Waddingham v. Loker, 7.
Wade v. Rusher, 105.
Wadhams v. Gay, 114.
Wadsworth 7'. Lyon, 223.

v. Schisselbauer, 128.

v. Williams, 196, 198, 229, 363,
491.
Wafer v. Harvey Co. Bank, 420, 500.
Wager v. Hall, 4S1.

v. Link, 81.
Waggoner v. Speck, 58.
Wagner v. Law, no, 247.

v. Smith, 34.
Wait v. Bull's Head Bank, 401.

v. Day, 385
Waite, Matter of, 239, 614, 738.

?'. Harper, 712.
Wake t. Griffin, 534.
Wakeman v. Dalley, 9, 12, 568.

Wakeman v. Grover, [30, ■'•", 592.
Waldele v. X. \ I nti ! & II. R. R.

R. Co., 487, 4S8.
Walden v. Murdock, 4(15, 41.'., 7
Waldman v. O'Donnell, 117.
Wales ?'. Bowdish, 75.

t. Lawrem e, [62, [63, -'71 .
Walkenshaw v. Perzel, 482.
Walker ?■. Adair. 714.

?'. Collins, 8, 6SS, 689, I

v. Denne, 335.

v. Lovell, 1 - 1

v. Pease, 27s.

v. Powers, 219, 265, 2S7, 288.

v. Reamy, 539.

7r. Vincent, (>4<), 642,

7. Walker, 543.
Walkow v. Kingsley, 278.
Wall v. Fairley, 215, 217, 264.

v. Provident Inst., 22S.
Wallace v. Eaton, 251.

v. Lawyer, 58, 67.

v. Nodine, 445, 450, 470.

v. Penfield, 200, 201, 205, 208,
297.

v. Smith, 660.

v. Treakle. ~< 18.
Waller v. Shannon, 259.

v. Todd, 158.
Walradt v. Brown, 51, 244.
Walsh 7'. Ketchum, 437.

v. Mutual L. I. Co., 56.
Walter v. Gernant, 470.

v. Lane, 16, 189, 194, 204.

v. Riehl, 259, 2(17.
Walters v. Walters, 506.

v. Whitlock, 614.
Walthall v. Rives, 270.
Waltham v. Broughton, 5.
Walton v. Bonham, 726.

v. Ely, 232.

v. Tusten, 720, 735.
Wanner v. Snyder, 659, 663.
Waples Platter Co. v. Low, 158.
Ward v. Northumberland, 219.

v. Roy, 117.

v. Saunders, 492.

v. Trotter, 573.

■v. Webster, 552.
Warden :•. Jones, <><>.

v. Marshall, 464.
Wardour v. Periston!, 500.
Ware v. Galveston City Co., 243.

:■. Gardner, 412.
Waring 7'. Mackreth, 305.
Warmoth v. Dryden, 4\=.
Warner?/. Blakeman, 30, ill, 114. 270,
280, 324.

?>. Callendar, 105.

v. Daniels. 98.

v. Dove, 18S, 278.

v. Hopkins. -

v. Jaffray, 553, =^4. 61 i.

v. Littlefield, 485, ? I

lxiv

References'] TABLE OF CASES. [are to pages.

Warner:. Mower, 615.

v, Norton, 41^. 452. 453. 459>

: . Ferry. 372.

. Warren, 356.
Warner Glove Co. v. Jennings, 703.

Warren :. His Creditors, I

r . fi »nes, 703.

v. Lee, 594.

v. Marcy, 29S.

: . Moody, 229, 230..

V. Warren. 2-

V. Warren Thread Co., 71, 72.
. Williams, 185, 491, 501.
Warren County v. Marcy, 298.
Wartman v. Wartman, 353.
Warw ick v. Petty, 40S.
Washban i v. Washband, 35S, 376.
Washburn v. Goodheart, 92.

v. 1 1 untington, 278, 675.

v. Sprout 61 .
Washer v. Brown, 338.
Washington Central Hank v. Hume,

56, 57, 541. 542.
Washington Union Ins. Co. v. Wilson,

15-
Waterbury v. Sturtevant, 402.
Waterman v. Sprague Mfg. Co., 507.
Waters v. Dashiell, 231.

1 . Taylor. 5.
Watkins v. Arms, 424.

v. Uorsett, 67.

v. Jones, 730, 733.

v. Worthington, 4S4.

v. Wortman, 153.
Watkins Nat. Hank v. Sands, 597.
Watkyns v. Watkyns, 639
Watrous v. Lathrop, 17S.
Watson v. Bourne, 517.

v. Dodd, 04.

v. Riskamire, 18, 360.

v. Sutherland, 99.
Watson ^S: Woods, In re, 639.
Watt v. Grove, 430.
Watts v. Creswell, 695.

V. Wilcox, 249.
Waverly Nat. Bank 7'. Halsey, 601, 609.
Way v. Bragaw, 200, 290.
We id 7'. Gray, 640.
Wear v. Skinnei, 286.
Weare v. Williams, 675.

1 i . Pier< e, 521.

Weatherbi 1 1 !. rell, 717.

r v. Fisher, 71.

v. I l-t\ Hand, 140, 143, 177. 271,

v. Nugent, 377.

I, 405.
Webb v. Armisti ad, 581.

7 . Helion, i"r.

v. Ingham, 43H 526.

v. Read, 297.

-■. Thomas, 616.
Weber V. Armstrong. 020.

V. Mi<:k, 24, 354, 549, 594, 596, '.1 -.

Weber v. Rothchild, 308.

:■. Weber, 139.
Webster v. Clark, 139, 140, 142, 172.

v. Folsom, 107, 164.

f. Hildreth, 60.

v. Lawrence, 140, 158.

v. Peck, 462.

7'. Upton, 237.

7 . Withey, 667.
Weed 7'. Davis, 437.

v. Pierce, 51, 5S, 106.
Weeden z\ Hawes, 406.
Weeks v. Hill, 36S, 3S6.

v. Prescott, 450.
Weider v. Maddox, 549, 614.
Weigtman v. Hatch, 131, 149, 172, 176.
Weil 7'. Lankins, 159.
Weir v. Day, 51, 183, 244.
Weis v. Dittman, 5C8.

7'. Goetter, 332.
Weise v. Wardle, 255.
Welch v. Bradley, 479.
Welcker v. Price, 305.
Welcome v. Mitchell, 274, 491.
Welde v. Scotten, 222, 245
Welles v. Fish, 514.

7'. March, 563, 564.
Wellington v. Small, 118.
Wells v. Knox, 252.

v. Langbein, 343, 632, 633.

v. Morrow, 671.

71. O'Connor, 146, 476.
Welsh v. Britton, 57S.

v. Solenberger, 95, 249.

7'. Welsh, 224, 291.
Wemyss v White, 87.
Wendell v. Van Rensselaer, 508.
Werborn v. Kahn, 332, 70S.
Werner v. Zierfuss, 359, 364, 408.
Werts v. Spearman, 487.
Wescott Tr. Gunn, 617.
Wessels v. Beeman, 372.

v. McCann, 454.
West v. Snodgrass, 33, 634.
West Coast Grocery Co. v. Stenson, 273.
Westerman v. Westerman, 243.
Western Transp. Co. v. Kilderhouse,

269.
Westmoreland v. Powell, 244.
Weston 7'. Blake, 288.
West Side Bank 7'. Pugsley, 114, 116.
Wetherbee ?■. Baker, 253.
Wetmore 7'. Truslow, 87.

V. Wetmore, 84, 85, 86, 87, 638.
650, 662.

: . Woods, 067.
Weyand v. Tipton, 520
Weymouth v. Chicago & N. W. Ry.

Co., 529.
Whaley v. Dawson, 219.
Wharton v. May, 479.
Wheadon V. Huntington, 502.
Wheat roft v. Hickman, 581.
Whedbee 7'. Stewart, 20.

References] TABLE OF CASES. [are to page

Wheelden v. Wilson, 17, 371, 400, 411,

43". 434-
Wheeler v. Hillings, 396.

v. Konsc, 452.

v. Millar, 26S.

v. Sage, 724.

v. Wallace, 325.

v. Wheedon, 267.
Whipple v. Pope, 607.
Whitaker v. Gavit, 569.

v. Whitaker, 392.

v. Williams, 569.
Whitbread v. Jordan, 674, 675.
Whitcomb v. Fowle, 579.
White v. Banks, 555.

v. Benjamin. 14, 319, 398, 418,
479, 526, 527, 536, 609.

v. Bogart, 475.

v. Cotzhausen, 594, 595, 596, 607,
702, 706.

v. Davis, 318, 593.

v. Fagan, 573.

v. Geraerdt, 156.

v. Givens, 92.

v. Hall, 154.

v. Kuntz, 711, 713.

v. McPheeters, 353.

v. Perry, 7, 8, 9, 30, 49S.

v. Thomas, 660.

v. White, 65, 657, 660.
White's Bank of Buffalo v. Farthing,

215, 216, 218, 313, 314, 317. 335.
Whitesel v. Hiney. 27S.
Whiting v. Barrett, 88.
Whitney v. Davis, 104, 140, 143, 144,
146, 159, 160, 161, 162, 171,

174. 332.

v. Levon, 624.

v. Marshall, 165.

v. Rose, 432.
Whiton v. Snyder, 522, 524, 530.
Whitridge v. Whitridge, 516.
Whittaker v. Amwell Nat. Bank, 348.

v. Merrill, 552.
Whittington v. Jennings, 76.
Whittlesey v. Delaney, 146, 276, 476.
Wich v. Parker, 309.
Wickham v. Miller, 52.
Wicks v. Hatch, 356.
Wieting v. Bellinger, 641.
Wigsfin v. Bush, 712.
Wiggins v. Armstrong, 7, 101, 143,
148.

v. McDonald, Si.
Wilcox v. Fitch, 51.

v. Hovvland, 354.

v. Kellogg, 102.
Wilcoxen v. Morgan, 438, 697.
Wiles v. Suydam, 26S.
Wiley v. Carter, 733.

v. Gray, 528.

v. Knight, 19.
Wilkerson v. Schoonmaker, 476.
Wilkes v. Ferris, 607.
E

Wilkinson v. Babbit! .

■' ■ Paddoi k, 313] 317. 545-

7'. Vale, [53,
Willetts v. Vandenburgh, [48.
Williams v. Ayrault,

v. Bankhead, 24').

v. Banks, 204, 212, 223, 437.

v. Barnett, 399.

v. Benedict, 136.

v. Carle, 544.

v. Clink, 722.

v. Davis, 29, 206.

v. Evans, j< >.

7'. Ewing, 297.

v. Harris, 28, 523, 526, 527.

v. Hart, 493.

v. Higgins, 717, 718.

v. Hubbard, 97.

i'. Jackson, 671 >.

v. Kirtland, 135.

v. Leech, 640.

v. Lomas, 77.

v. Lord, 12.

v. Merritt, 229.

v. Michenor, 160.

v. Xeel, 290.

v. Rawlins, 32.

v. Sexton, 115.

v. Spragins, 272, 275.

v. Thorn, 84, 85, 86, 87, 115 638,
650, 661.

v. Whedon, 563, 579.

v. Williams, 493.

v. Winsor, 232, 626.
Williamson v. Brown, (.72, 673, 674,
6S3, 6S9.

v. Goodwyn, 415.

v. Williams, 7, 303, 325, 493.
Willison v. Desenberg, 407.
Willoughby v. Willoughby, 670.
Wilmerding v. Jarmulowsky, 676.
Wilson v. Anthony, 512.

v. Berg, 567.

v. Clark, 494.

v. Forsyth, 214, 557, ?(>?.

v. Hill, 465.

v. Horr, 294, 702.

v. Hunter, 694.

v. Jordan, 415.

v. Kohlheim, iSS.

v. Lazier, 12.

v. Lott, 405, 434.

v. McMillan, 94, 95,

v. Marion, 360,
686.

v. Pearson, 365.

v. Perrin, 136.

v. Prewett. 357, 690.

v. Robertson, 339, 3S9, 51
609.

v. Russell, 391.

v. Spear, 357.

v. Sullivan, 630.

v. Watts, 29.

Ixvi

i m] TABLE ( >F CASES. ["r'

Wilson Bros. W. vv T. C >. . ! '

547-
Wilt v. Franklin, 2
Wimbish v. Tailbois, 45.
Winans z . < »rav< -. 718.

Winch's Appeal, 245.
Winchester v. Charter. 190, 191

407, 437.
+98.
tddy ,
Winchester & P. Mfg. Co. v. Creary,

490, 491-
Windhus v. Bootz, 377.
Windstandley v. Stipp, 272.
Win field Nat. Bank v. Croco, 523, 610,

Wingler v. Sibley, 626.
Winkle y v. Hill, 629.
Winsli iw v. \)> msman,
Winsor v. McLellan, 230.

v. .Mills, 640, 643.
Wisconsin Granite Co. v. Gerrity, 142,

176, 1--.
Wise v. Tripp, So.

v. Wheeler, 493.

v. Wilds, 432.

v. Wimer.
Wisner v. Barnet, 316.
Wiswall v. Sampson, 136.
Wiswell v. Jarvis. 553.
Witherwax v. Riddle, 414.
Withrow v. Biggerstaff, 501.
Winner's Appeal, 333.
Witz v. Osburn, 194.
Wolf v. Arthur, 355, 357.
Iraj . 577.

v. Stix, 339.
Wolfe v. (Tallin. 332.
Wolfer v. Hemmer, 640.
Wolford v. Farnham, 3S7.
Wollaston r1. Tribe, 77.
Wollensak v. Reiher, 2-3, 284.
Wood v. Amory, 273.

v. Carpenter, 2-3, 284, 2S5, 693,

v. Chambers, 31, 8S.

' dapin, 247.
:•. Clark, <).

1 mrad, 567.
v. Dixie, 365, 705.
v. Dummer, 237.
v. Goff's Curator, 340.

1 [arrison, 529.

Hum, 340, 342.
. . Robinson, 268, I 71.

-
v. Sidney Sash, etc., Co., 249,
252, 259.

v. United States, 500.
Woodbridge t. Allen, 517.

ltf>n, 523.
Wood burn v. Mosher,
Woodhull v. Whittle, 393.

Imeston v. Walker, 646.
Woodruffs. Bowles, 357.
Woods v. Bugbey, 454, 466.

v. James. 285.

v. Morrell, 305.
Woodward v. Brooks, 614.

-■ Marshall. 581.

:■. Wyman, 3S1.
Woodworth v. Paige, 545.

7. Sweet, 531, 536.
Wi m ildridge 1 . Gage, 183.
Wooten v. Clark, 33. 4S0.

V. Steele, 171.
Wordall v. Smith, 446, 463.
Wurman v. Kramer, 453, 463.
Wormley v. Wormley, 671.
Worseley v. Demattos, 29, 399, 419,

422, 619.
Worthington v. Bullitt, 340, 437.

v. Shipley, 437.
Worthy v. Brady, 352, 353.
W. O. Tyler Paper Co. v. Orcutt-Killick

Lith. Co., 421.
Wray '■. Davenport, 35.
Wright v. Campbell, 150, 156, 166.

v. Davis, 515.

V. Delafield, 2

v. Hencock, 409.

- . Lee, 549.

r. Linn, 497.

v. McCormick, 431, 443, 454.

v. Mack, 293.

v. Mahaffey, 423.

v. Nostrand, 99, 115.

v. Oroville M. Co., 113.

v. Towle, 492.

v. Wheeler, 302.

v. Wright, 382.

v. Zeigler, 547.
Wyatt '■. Brooks, 299.
Wyckoff v. Carr, 489.
Wylie v. White, 660.
Wyman 7'. Brown, 197, 672.

7'. Mathews, 594.
Wynne :■. Cornelison, 283.

7'. Mason, 525, 526, 540.

Xenia I'.ank 7'. Stewart, 100.

Yale v. Bond, 451.
Yardley v. Torr, 1S2, 379.
Yates v. Law, 524.

v. Yates, 469, 492.
Yates County Nat. Bank v. Carpenter,

S9, 90.
Yeatman 7\ Savings Inst., 230.
Yeaton ?■ Lenox, 216.
Yeend -■. Weeks, 182.
Yocum v. Bullit, 132.
York 7'. Bright, 5 14.

-■. Merritt, 712.

:'. Rockwood, 279.
Yost 7'. I ludiburg, 437.
Youmans 7'. Boomhower, 55, 88.

References] TABLE OF CASES. [are t

Ix

:\ 11

Young v. Rrush, 560.
v. Clapp, 596.
v. Edwards, 15.
v. Frier, 149.
v. Heermans, 21, 25, 34, 46, 66,

181, 277, 480.
v. Lathrop, 700.
v. McClure, 453, 461.
v. Parker. 260, 521.
v. Ward, 341.
v. Willis. 35.
v. Young, 660.

Youngs v. Carter, 134, 543.

Zabriskie v. Smith, 552.

Zane v. Fink, 721 »,

Zell Guano Co. v. Heatherly, 294, 558.

Zick v. Guebert, 666.

Zimmer v. Miller, 371. 400, \t>>. 413.

Zimmerman v. Heinrichs, 1

v. Willard, 277.
Zoeller v. Riley, 299, 312, 666, 670.
Zoll v. Soper, 223, 2G4.
Zuver v. Clark, 24O.

Gijsm> : Cmj

FRAUDULENT CONVEYANCES

CREDITORS' BILLS.

FRAUDULENT CONVEYANCES

CREDITORS' BILLS.

CHAPTER I.

INTRODUCTORY OBSERVATIONS. — GROWTH OB
THE LAW CONCERNING FRAUDULENT CON-
VEYANCES.—PHASES OF THE SUBJECT.

§ 1. Severity of the Roman law —
Modern changes.

2. Prevalence of fraudulent trans-

fers — The cause.

3. Scope of the inquiry.

4. Forms of relief.

5. , Onus as to fraud — Suspicions

insufficient — Absence of pre-
«• ) sumptions.

7. Judge Black's views.

8. Proof of moral turpitude.

9. Fraud in fact and fraud in

law.

10. The cases considered.

11. Words "hinder, delay, or de-

fraud."

12. Word "disposed" construed.

i V'j. No definition of fraud.

14. Restraints upon alienation.

15. Fraudulent conveyances - Char-

acteristics and classes.

16. Fraudulent conveyances at com-

mon law — Statutes declara-
tory.

17. Covinous transfers of choses in

action.

18. Early statutes avoiding fraudu-

lent conveyances.

19. Statute, 13 Eliz. c. 5, and its ob-

ject.

20. Its interpretation and construc-

tion.

21. Statute, 27 Eliz. c. 4.

22. Twyne's Case.

"The rule is universal, whatever fraud creates, justice will destroy. — Vice-Chancellor Van
Fleet in Vreeland v. Xcw Jersey Stone Co., 29 N. J. Eq. 190.

§ 1. Severity of the Roman law — Modern changes. — It
has been truly observed that the protection and preserva-
tion of the rights of creditors must be a fundamental
policy of all enlightened nations.1 The method by which

1 Story's Eq. Jur. § 350 ; Creditors
are "a favored class," Fouche v.
Brower, 74 Ga. 251 ; Gable v. Colum-

bus Cigar Co.. 140 Ind. 563, 566, 38 N.

E. Rep. 171. citing the text.

INTRODUCTORY OBSERVATIONS.

this protection may be extended and rendered practically
effectual is, however, a problem very difficult of solution.
The barbarous practice which prevailed among the
ancient Romans of putting an insolvent to death, or sell-
in^ him into slavery,1 pictures to our imaginations the
stron^ legal and moral foundation which a pecuniary
obligation had in the minds of the people in early times.
The penalty for the failure to pay a debt was as severe
as that which is now ordinarily imposed upon criminals
for the commission of the most heinous of crimes.2

1 Holmes' Common Law, p. 14. Bays:
•' This line of thought, together with
I be quasi material conception of legal
obligations as binding the off ending
body which has been noticed, would
perhaps explain the well-known law
of the Twelve Tables as to insolvent
debtors. According to that law, if a
man was indebted to several cred-
itors and insolvent, after certain for-
malities they might cut aphis bodj
and divide it among them. If there
was a single creditor he might put
his debtor to death or sell him as a
slave."

' After the judicial proof or con-
fession of the debt, thirty days of
grace were allowed before a Etonian
was delivered into the power of bis
fellow-citizens. In this private prison,
twelve ounces of rice were his daily
food : he mighl be bound with a
chain of fifteen pounds' weight ; and
his misery was thrice exposed in the
market-place, to solicit the com-
passion of his friends and country-
men. At the expiration of sixty
days, the debt was discharged i>> the
loss of libertj or life ; the insolvent
debtor was either pnt to death, or
Bold in for< ign slavery beyond the
Tiber ; but it several creditors weir
alike obstinate and unrelenting, thej
might legally dismember bis body,

and satiate their revenge by this
horrid partition. The advocates for
this savage law have insisted, that
it must strongly operate in deterring
idleness and fraud from contracting
debts which they were unable to dis-
charge." Gibbon's History of the
Decline and Fall of the Roman
Empire, vol. iv. , pp. 372-373. It
seems incredible that the following
extract could ever have found its
way into an English report: "If a
man be taken in execution, and lie in
prison for debt, neither the plaintiff
at whose suit he is arrested, nor the
sheriff who took him, is bound to
find him meat, drink, or clothes ; but
he must live on bis own, or'on the
charity of others ; and if no man will
relieve him, let him die in the name
of God, says the law ; and so say I."
Byde, Justice, in Manby v. Scott, 1
Mod. 132 ia. d. 1663). In Maine's
Ancient Law, 11th ed., p. 321, it is
said: "Considered historically, the
primitive association of Conveyances
and Contracts explains something
which often strikes the scholar and
jurisl as singularly enigmatical, I
mean the extraordinary and uniform
severity of very ancient systems of
law to debtors, and the extravagant
powers which they lodge with cred-
itors."

§ 2 INTRODUCE >RV OBSER\ A riONS. 3

The chains which held a debtor in the power of his
creditor have one by one been broken,1 but the sacredness
of a promise to pay a debt, notwithstanding the abroga-
tion of the ancient penalties, is still voluntarily cherished
by the mass of mankind. Yet, unfortunately, the protec-
tion and preservation of the rights of creditors is often
the last consideration with a numerous class of careless
or dishonest insolvents. Satisfied of utter inability to pay
maturing debts, their remaining property is frequently
diverted to inequitable purposes or squandered with reck-
less profusion. The confiding creditor, when driven to
the necessity of seeking a discovery of equitable assets,
often finds at the end of the litigation nothing but a mass
of worthless securities or "a beggarly account of empty
boxes."2 The underlying reasons for this deplorable
condition of affairs will be briefly considered.

§2. Prevalence .of fraudulent transfers — The cause. —
Since the general abolition of imprisonment for contract
debts, dishonest people have grown bolder and more
reckless, and the power of creditors to enforce payment
of just obligations has been correspondingly diminished.
This humane reform in our law, which was inspired by
the desire to relieve honest but unfortunate debtors from
the painful consequences formerly incident to insolvency,
is now eagerly availed of by unscrupulous people, who
contract obligations with little expectation and no proba-
bility of fulfilling them. Abolition of imprisonment for
debt removed the chief barrier and preventive of fraudu-
lent conveyances, viz. : the terror of the debtor's prison.
The personal liberty of the debtor being no longer ;it

1 "The tendency of legislation for tirely prevent, the efforts of unfeel-

the last century has almost uniformly ing creditors to oppress and punish

been in favor of the poor but honest him for his poverty." Stevens v.

debtor, and the object of nearly every Merrill, 41 N. H. 315.
law upon the subject has been to dis- 2Burtus v. Tisdall, 4 Barb. (N. Y.

courage and discountenance, or en- 590.

4 INTRODUCTORY OBSERVATIONS. §2

stake, the natural tendency has been to promote reckless
and extravagant expenditures, and to encourage and foster
wild business speculations.

The cost of every reform must be borne by some
person or class of persons, and creditors are, at the present
time, paying the great price exacted by this radical change
in remedies. The collection of a debt by ordinary pro-
cess of execution against property on a judgment is now,
comparatively, a rare occurrence. Hence we have in our
modern jurisprudence a perplexing problem with which
our forefathers were little vexed, — i. e., the question how
to neutralize or avoid, in favor of creditors, colorable or
covinous transfers of property which this violent change
in remedies has rendered it difficult, if not impossible, to
wholly prevent or suppress. Collusive voluntary convey-
ances and secret fraudulent trusts and reservations of a
thousand dyes, calculated to hinder and defraud creditors,
are the constant and daily subject of investigation in our
courts. .The temptation of debtors who have not the
skill to acquire property honestly, or who have been over-
whelmed by some unavoidable disaster, to enrich them-
selves, or their trusted relatives, at the expense of credit-
ors, by some transaction "wearing a deep complexion of
fraud, " seems to be irresistible. This is especially the
case in a country such as ours, where the comforts and
delights which accumulated property brings are so acces-
sible and well guarded, and in which the acquisition of
wealth may be regarded as a profound passion. It may
be possible to pity the infirmity of the human mind sink-
ing under an approaching pressure of distress, and resort-
ing to fraudulent means of protection and provision for a
family, but the law cannot approve or sanction such trans-
actions.1 Probably the most severe trial to which an
honest man can be subjected is the inability to pay his

Crofl v. Townsend, 3 Desuus. (S. C.) 229.

8 3 SCOPE OF INQUIRY. 5

debts, even by the application of all his means. He for-
gets to render unto C?esar the things which are Cesar's.
He is assailed by temptations of interest, of pride, of
shame, of affection, to wander from the straight line of
duty and integrity, while at the same time he is intrusted
by the law with dominion over property which equitably
and justly should be devoted to his creditors.1

The quantity of litigation engendered by fraudulent
conveyances is appalling, and the cunning devices and
intricate schemes resorted to by debtors to elude the vig-
ilance of creditors would, if no moral turpitude was in-
volved, challenge admiration. The condition of the body
of our law upon this subject is far from satisfactory, and
may be said to still be in a formative and unsettled state.

§3. Scope of the inquiry. — It will be our purpose to
elucidate the principles of law affecting conveyances
made by debtors in fraud of creditors, both in this
country and in England, to collate the authorities, and
to point out, somewhat at length, the practical methods
by which such collusive trusts can be successfully exposed
and unraveled, the property regained for creditors, and
the prevalent modern tendency of debtors to hinder,
delay, and defraud their creditors, by colorable transfers
and secret trusts, correspondingly repressed. Bills filed
to reach equitable assets, not subject to execution, will
necessarily receive incidental consideration.

The power of a creditor to inflict anything in the
nature of a punishment upon his debtor being practically
abrogated in civil procedure,2 his right to a thorough and

1 Hafner v. Irwin, 1 Ired. (N. C.) See Waltham v. Broughton, 2 A.tk.
Law, 499. 43. Nor to exercise any censorial

2 It is not the function of a court of authority. See Waters v. Taylor, -J
equity to consider fraud in the light Ves. & B. 299. Chancery jurisdiction
of a crime, nor to punish the guilty in cases of fraud may !><• invoked in 1
party by imposing exemplary costs. civil but not in a criminal point of

6 1 I >RMS i '1 RELIEF. § 4

searchinL: investigation as to transfers of the debtor's
property, in the disposition of which the creditor may
justly claim to have an equitable interest,1 at least to the
extent of his demand, should manifestly be facilitated.
Such, we are happy to notice, is the general modern
tendency of the law, and one of the aims of this treatise
will be to show the need of a still further enlargement of
these facilities. The practical details of procedure in
this class of litigation will receive particular attention.
The rights of bona Jide purchasers and grantees of debtors
for valuable consideration will necessarily be embraced
in the discussion

^ 4. Forms of relief. — The general purpose of creditors'
actions, it may be observed, is two-fold ; first, to reach
assets, such as choses in action, which, by reason of their
intrinsic nature, cannot be taken on execution at law ;
and second, to recover property, whether tangible or
intangible, which has been fraudulently alienated by the
debtor. ~ In the one case the creditor comes into court
" to obtain satisfaction of his debt out of the property of
the defendant, which cannot be reached by execution at
law ; " in the other case he proceeds " for the purpose of
removing some obstructions fraudulently or inequitably
interposed to prevent a sale on execution."3 It is

view. In Hamilton Nat. Bk v an equitable interest in the property

Balsted, 134 N Y. 522. :'>l X. E. Rep. of their respective debtors— it being

900, the court Bay, "It a fraudulent tin- foundation of trusting them —

transferee sell the property before the which the Jaw will, under certain cir-

commencement of tin- action to set cumstauces, enforce." See also $T14.

aside the transfer, a judgment for the '•'See Chap. III.

value of tin interests transferred to 3Cornell v. Railway, 22 Wis. 264;

liini may be recovered, but however Beck v. Burdett, 1 Paige (N. Y.) 305.

lalousthi fraud may be the court ln Jones v. Green, 1 Wall. 331, Field,

is powerless i" award judgment . I., said: " A court of equity exercises

against him for a Bum exceeding such its jurisdiction in favor of a judgment-

value." creditor only when the remedy a£-

v. Johnson, To Me. 261, forded him at law i- ineffectual to

where the court'say : " Creditors have reach the propertj of tin' debtor, or

§5

ONUS AS TO FRA1 D.

believed that as to the first class of cases the jurisdiction
of equity in favor of creditors was created to supplement
the imperfect relief given by execution.

§ 5. Onus as to fraud — Suspicions insufficient — Absence of
presumptions. — The great obstacles to the effective
development of the branch of our law under considera-
tion from the creditor's standpoint are, the natural tend-
ency of the courts not to presume fraud,1 in the absence
of substantial proof of it, and the extreme difficulty
attendant upon showing that a transaction, fair and per-
fect on its face, and having every semblance of validity,2

the enforcement of the legal remedy
is obstructed by some incumbrance
upon the debtor's property, or some
fraudulent transfer of it." See Scott
v. Neely, 140 U. S. 113, 11 S. C. Rep.
712 ; Wiggins v. Armstrong, 2 Johns.
Ch. (N. Y.) 144 ; Talley v. Curtain, 54
Fed. Rep. 45.

1 See Crawford v. Kirksey, 50 Ala.
591; Kempner v. Churchill, 8 Wall.
369; Erb v. Cole, 31 Ark. 556; Pusey
v. Gardner, 21 W. Va. 469; Toney v.
McGehee, 38 Ark. 427; Matthai v.
Heather, 57 Md. 484; White v. Perry,
14 W. Va. 86; Hord's Adm'r v. Col-
bert. 28 Gratt. (Va.) 49; Williamson v.
Williams, 11 Lea (Tenn.) 356; Tog-
nini v. Kyle, 15 Nev. 464; Hempstead
v. Johnston, 18 Ark. 123; Thornton v.
Hook, 36 Cal. 223; Foster v. Brown,
65 Ind. 234; Parkhurst v. McGraw, 24
Miss. 134; Henckley v. Hendrickson,
5 McLean 170; Bartlett v. Blake, 37
Me. 124; Waddingham v. Lokei\ 44
Mo. 132; Kellogg v. Slawson, 15 Barb.
(N. Y.) 58, affi'd;il N. Y. 302; Ex
parte Conway, 4 Ark. 356; Burgert
v. Borchert, 59 Mo. 80; Herring v.
Wickham, 29 Gratt, (Va.) 628: Sem-
mens v. Walters, 55 Wis. 684, 13 N.
W. Rep. 889; James v. Van Duyn, 45
Wis. 512; Fuller v. Brewster, 53 Md.

359; Grover v. Wakeman, 11 Wend.
(N. Y.) 192: Troxall v. Applegarth,
24 Md. 163; Anderson v. Roberts, 18
Johns. (N. Y. ) 515; Cunningham v.
Dwyer. 2:5 Md. 211); Juzan v. Toulmin,
9 Ala. 602; Nichols v. Patten, 18 Mr.
231: Cowee v. Cornell, 75 N. Y. 99;
Killian v. Clark, 3 MacAr. I >. C.) 379,
afli'd as Clark v. Killian, 103 U. S.
766; Jones v. Simpson, 116 TJ. S. 615.
6 S. C. Rep. 538: Dexter v. McAfee,
163 111. 508: Mathews v. Rrinliar.lt,
149 111. 635, 37 N. E. Rep. 85; Robi
v. Buckley, 145 N. Y. 215, 224, 39 N.
E. Rep. 966; Phelps v. Smith, 116 ln.1.
387,;17 N. E. Rep. "602; Fulp v. Bea-
ver, 136 Ind. 319, 36 N. E. Rep. 250;
Rider v. Hunt, 6 Tex. Civ. App. 238;
Bank of Commerce v. Schlotfeldt, 40
Neb. 212, 58 N. W. Rep. 727; Robin-
son v. Dryden, lis Mo. 534, 24 S. W.
Rep. 448; Olson v. Scatt, 1 Col. App.
94,27 Pac. Rep. 879; Fortner v.Whelan,
87 Wis. 88, 58 N. W. Rep. 253; lea-
ders v. Whallon, 74 Jinn (N. Y.
26 N. Y. Supp. 614.

-In Graffam v. Burgess, 117 U. S.
180. 186, 6 S. C. Rep. 686, the courl
say: "It i> insisted that the proceed-
ings were all conducted according i<>
the forms of law. Y. rvlik.lv. Some
of the most atrocious Iran. Is air com-

8 I »NUS AS TO FRAUD. § 5

the guilty participants in which are often the chief witnesses
in subsequent judicial inquiries, is, in fact, vicious and
colorable. Then there exists in some quarters an uncon-
scious or mistaken sympathy with or for debtors, whose
fraudulent acts and transactions bear the imprints of
intellectual acuteness. The clever or brilliant scoundrel
too often escapes with his ill-gotten gains in the maze of
admiration excited by his audacity. Fraud, it is also
argued, will not be lightly imputed,1 and cannot be estab-
lished by circumstances of mere suspicion.2 This same
general proposition may be stated in an infinite variety
of ways, and by the use of different words. Thus irregu-
larities and carelessness sufficient to arouse a suspicion do
not supply the place of proof of fraud.3 The presence of
fraud will not be presumed where an instrument admits
of an opposite construction.4 The law presumes, in the
absence of evidence to the contrary, that the business
transactions of every man are done for an honest pur-
pose. The common law,5 it is argued, is tender of presum-
ing fraud from circumstances, and expects that it be made
manifest or plainly inferable.0 Courts will attribute errors

mitted in that way. Indeed, the 3Je\vett v. Bowman, 29 N. J. Eq.

greater the fraud intended, the more 174.

particular che parties to it often are to 'Bank of Silver Creek v. Talcott, 22

proceed according to the snidest Barb. (N. Y.)560; Keagy v. Traut, 85

forms of law." s. p., Schroeder v. Va. 390, 7 S. E. Rep. 329; Nbrris v.

young,161TJ. S. 339.16S.C. Rep. 512. Lake. 89 Va. 513, 16 S. E. Rep. 668;

•Jones v. Simpson, 116 U. S. 615, 6 Jacobs v. Allen. 18 Barb. (N. Y.) 550;

Walker v. Collins. 59 Kellogg v. Slauson, 11 N. Y. 302; Crook

Bep. 73; Batch v. Bayley, 12 v. Rinskopf, 105 N. Y. 476, 12 N. E.

Oush. (Mass.) 30; Bamberger v. School- Rep. 171.

field, 160 U. 8. L63, L6 8. C. Rep. 225. .lours v. Simpson, 116 U. S. 615,

Erb \ Cole, :;i Ark. 556; Pratl \. 6 S.C. Uep. 538; Baughman v. Penn,

Pratt, '."•■ III. L84; Myers v. Sheriff, 21 3:5 Kan. 504, 6 Pac. Rep. 890; Hilgen-

I... \i,n. 17J: White v. Perry, 11 \V. berg v. Northup, 134 [nd. 94, 33 N. E.

Va. 86; Bryanl v. Simoneau, 51 III. Rep. 786; Stark v. Starr, 1 Sawyer 15.

327; Buck v. Sherman, 2 Doug. (Mich.) ^Roberts on Fraud. Conv., p. 12;

176; Jewett v. Bowman, 29 X. .1. Eq. Leque \. Smith, 63 .Minn. 27, citing

171. Batchelderv. Whit-. 80 Va. 103; the text
Daniel v. Vaccaro, 1 1 \ rl

§ 5 ONUS AS TO FRAUD. 9

to mistake rather than to fraud,1 and will not base con-
clusions of fraud upon mistaken or careless expressions
of opinion.2 A dishonest purpose should not be pre-
sumed.3 Then it is vaguely asserted that fraud is a fact
which must be proved. Courts will not strive to force
conclusions of fraud, is the language employed.4 There
must be something more than mere speculative inference
to establish its existence.5 And if the party charging
fraud does no more than create an equilibrium, he
fails to make out his case.6 In Drinker v. Receiver
of Erie Railway,7 Van Fleet, V. C, said: "Although
entertaining painful doubts touching the honesty and fair-
ness of many of the transactions charged to have been
fraudulent," this court " felt constrained, for the want of a
sure conviction of the truth of the evidence mainly relied
on to establish the fact of fraud, to dismiss the complain-
ant's bill." As we shall presently see, it is considered not
to be enough to create a suspicion of wrong.8 The credi-
tor must prove tangible and substantial facts from which
a legitimate inference of a fraudulent intent can be
drawn.9 The evidence must convince the understanding
that the transaction was entered into for a purpose pro-

!Ayres v. Scribner, 17 Wend. (N. Toney v. McGehee, 38 Ark. 427: G 1-

Y.) 407: Goodev. Hawkins, 2 Dev. Eq. man v. Siinonds, 20 How. 360.

(N. C.)393. 6Kaine v. Weigley, 22 Pa. St. 179 ;

2 See Hubbell v. Meigs, 50 N. Y..480; Bernheimer v. Rindskopf. 116 N. Y.
Wakeman v. Dalley, 51 N. Y. 27. 436, 22 N. E. Rep. 1074.

3 Raymond v. Morrison, 59 Iowa 1 52 N. J. Eq. 574.

374, 13 N. W. Rep. 332; Hager v. 8 Crow v. Andrews. 'JI Mo. App. 159.

Thomson, 1 Black, 80; Grant v. Ward, 9Jaegar v. Kelley, 52 X. Y. 276;

64 Me. 239; Jones v. Simpson, 116 U. Sherman v. Hogland, 73 End. 177:

S. 615, 6 S. C. Rep. 538; Brown v. White v. Perry, 14 W. Va. 86; Bord's

Dean, 52 Mich. 267, 17 N. W. Rep. 837; Adm'r v. Colbert, 28 Gratt. (Va.) 19;

Wood v. Clark, 121 111.359, 12 N. E. Herring v. Wickham, 29 Gratt. (Va.)

Rep. 271; Baughman v.Penn, 33 Kan. 628; Hasie v. Connor, 53 Kan. 721, ::7

504, 6 Pac. Rep. 890. Pac. Rep. 128. Circumstances amount-

4 Crawford v. Kirksey, 50 Ala. 591. ingto mere suspicion of fraud are not

5 Battles v. Laudenslager, 84 Pa. St. to be deemed notice of it. siiimis\.

451; Ex parte Conway, 4 Ark. 356; Morse, A Hughes 582. See Grant v.

National Bank, 97 U. S. 80.

IO ONUS AS TO FRAUD. § 5

hibited by law.1 It may be circumstantial, but it must be
persuasive.2 Hence " a court will not presume fraud and
undue influence merely from the fact that the conveyance
is made by a sister to a brother ; " 3 nor from circumstances
which merely indicate unusual generosity.4 Finch, J., in
delivering the opinion of the New York Court of Appeals,
said : " Fraud is to be proved and not presumed.5 It is
seldom, however, that it can be directly proved, and usually
is a deduction from other facts which naturally and logic-
ally indicate its existence. Such facts, nevertheless, must
be of a character to warrant the inference. It is not
enough that they are ambiguous, and just as consistent
with innocence as with guilt. They must not be, when
taken together and aggregated, when interlinked and put
in proper relation to each other, consistent with an honest
intent. If they are, the proof of fraud is wanting."6
Daniels, J., said, in Marsh v. Falker:7 "In all actions
for deceit the presumption is in favor of innocence ; and
on that account the intent or design to deceive the plain-
tiff must be affirmatively made out by evidence." i But
courts of justice, while conceding to honest acts their wide
and ample defense, must look through the devious ways
and the thin gauze, by which fraud is sought to be hid-

Pratt \. Pratt, 96 111. 184; Lalone 6 Shultz v. Hoagland, 85 N. Y. 467;

'. Dnited States, L64 U. S. 257. Bernheiiner v. Rindskopf, 116 N. Y.

'Lalone v. United States, 164 U. S. 436, 22 N. E. Rep. 1074. See Ames v.

257. Gilmore, 59 Mo. 537; Jewell v. Knight,

Spicer v. Spicer, 22 J. <V s. < X. Y.) 123 U. S. 426, 8 S. C. Rep. 193.

281. MON. Y. 566.

lii-t National Bank v. Irons, '28 "See Fleming v. Slocum, 18 Johns.

N. .1. Eq 48. (N. Y.) 403; Jackson v. King, 4 Cowen

Citing Grover v. Wakeman, 11 (N. Y.)220; Starr v. Peek, 1 Hill (N.

Wend. (N. Y.)?188. 's,.. Jones v. Y) 270; Bamberger v. Schoolfield, 160

Simpson, lit; r. s. 615, 6 S. C. Rep. U. S. 168, L6 S. C. Rep. 225; Dexter v.

Bernheimerv. Rindskopf, L16N. McAfee, 163 111.508.
Y. 186, 22 N. E. Ri p. 1074; Baird v.
Mayor, etc., of N. Y. 96 N. Y. 567.

ONUS \S TO FRA1 D.

I 1

den, and must not let it go scot-free for want of direct,
explicit and positive testimony.1

§ 6.— The badges and evidence of fraud will be discussed
presently.2 We may here observe that mere inadequacy
of consideration, unless extremely gross,3 does not per se
prove fraud.4 The disparity as to consideration 6 must
be so glaring as to satisfy the court that the conveyance
was not made in good faith.6 Neither can fraud be pre-
sumed unless the circumstances on which such presump-
tion is founded are so strong and pregnant that no other
reasonable conclusion can be drawn from them,' and it
seems that even strong presumptive circumstances of
fraud will not always outweigh positive testimony against

1 Reynolds v. Gawthrop, 37 W. Va.
13, 16 S. E. Rep. 364. In Baer v.
Rooks, 50 Fed. Rep. 900, the court say:
' ' It is the prevailing practice, in cases
involving an issue of fraud in fact,
for the court to repeat to the jury this
trite scrap of judicial phraseology
[fraud is never presumed but must be
proved], and it is commonly followed
by a statement that fraud, like any
other fact, may be proved by circum-
stantial evidence; but it would be an
unwarranted impeachment of the in-
telligence of the juries of this country
to suppose that they do not have a
knowledge of these common truths.
Every man knows that fraud, no more
than murder, trespass or debt, is pre-
sumed against a man, and that fraud,
as well as murder, trespass" or a debt,
may be proved by circumstances as
well [as by the positive testimony of
eye witnesses."

2 See Chap. XVI.

3 Cobb v. Day, 106 Mo. 300. 17 S. W.
Rep. 323.

4Kempner v. Churchill, 8 iWall.
369 ; Smith v. Henkel, 81 Va. 529.
5 See Chap. XV.

6Fuller v. Brewster, 53 .M.I. 361.
Compare Feigley v. Feigley, 7 Md.
537 ; Copis v. Middleton, 2Madd. 410 ;
Ratcliff v. Trimble, 12 B. Mon. (Ky.)
32. In Mobile Savings Bank v. .Mc-
Donnell, 89 Ala. 447, 8 So. Rep. 137,
the court say: "We are fully aware
that the view we have taken is some-
thing of a departure from the
ally received doctrine in other courts,
as well as former dicta of this court,
which are to the effect, in general
terms, that mere inadequacy of price,
short of a disparity so gross as to
shock the conscience of mankind, is
only a badge of fraud, and, of itself,
is not to be taken as establishing the
existence of evil intent ; l>ut. in our
jurisprudence, that doctrine, it' any
weight i to be given to our repeated
enunciations on the subject, or to the
reasons upon which our decisions are
based, is and must be confined to sales
other than in the paymenl of antece-
, dent'debts by insolvent debtors drawn
in question by other creditors."

" Paxton v. Boyce, 1 T( £. 311 Se<
Clemens v. Brillhart, 17 Neb. 337.

12 I »NUS AS TO FRAUD. § 6

it;1 nor will fraud be inferred from an act which does
not necessarily import it.2 If an honest motive can be
imputed equally as well as a corrupt one, the former, as
we have already seen, should be preferred.3-1

Good faith in business transactions is a settled pre-
sumption of law,4 and, manifestly, as we have seen, the
burden of proof is on the party who assails good faith and
legality.5'1 Many an important case has been wrecked at
the trial, or abandoned by the creditor, on account of the
great embarrassments which this formidable onus imposed.
This presumption is the creditor's stumbling block on the
one hand and the shield of unscrupulous debtors on the
other. The creditor is constantly forced to carry the war
into the enemy's country, and to take by storm the forti-
fications which the fraudulent debtor or his allies have
carefully constructed to impede or repel the attack." It
is said in Nicol v. Crittenden,0 that it is impossible for a
transfer to be infraud of creditors unless it is made with
a fraudulent intent, and that the nature of the intent will
not be presumed as matter of law, but is to be inferred by
the jury from the facts in evidence.7 This broad state-
ment of the principle is at least debatable and will be

1 The Short Staple, 1 Gall. 104. 31 ; .Marsh v. Falker, 40 N. Y. 566 ;

,, 2 Toney v. McGehee, 38 Ark. 427. Starr v. Peck, 1 Hill (N. Y.) 270;

Herring v. Richards, 1 McCrary, Beatty v. Fischel, 100 Mass. 448 ; Jones

574; Roberts v. Buckley, 145 N. Y. v. Simpson, 116 U. S. 615, 6 S. C.

224 : I kmstanl v. University of Roch- Rep. 538.
ester, L33 X. V. 648. 5Gutzweiler v. Lackmann, 39 Mo.

'Hager v. Thomson, 1 Black, 80; (J1 ; Silvers v. Hedges, 3 Dana (Ky.),

Cooper v. Galbraith, 3 Wash. 546; 439 ; Wilson v. Lazier, 11 Gratt. (Va.)

Blaisdell v. Cowell. M Me. 870; <;utz- 477; Jones v. Simpson, 116 U. S. 615;

weiller v. Lackmann, 39 M<>. 91 ; Rob- 6 S. C. Rep. 538 ; Bambergerv. School-

erte v. Guernsey, 3 Granl (Pa.) 387; field, 160 U. S. 149, 16 S. C. Rep. 225;

Dougherty, 7 Yerg. (Tenn.) Hasie v. Connor, 53 Kan. 721, 37 Pac.

322; Richards v. Kountze, 4 Neb. 200; Rep. 128.
Beel on the Righl to Begin and Re- 855Ga.497.

ply, p. 57; Williams v. Lord, 75 Va. 'See Jewell v. Knight, 123 U. S.

Wakeman v. Dalley, 51 N. Y. 426, 435, 8 S. (J. Hep. 193.

§ 6 ONUS AS TO FRAUD. I 3

considered presently.1 Then in Cummings v. Hurlbutt,2
it was asserted that to set aside a written instrument on
the ground of fraud, the evidence of the fraud must be
clear, precise, and indisputable. A jury should not In-
permitted to find fraud sufficient to impeach a settlement
in writing, on any fancied equity, or on vague, slight, or
uncertain evidence, even though they might think it fairly
and fully satisfied them. As a general rule the transac-
tion which is the subject of attack has been evidenced in
writing, and the cases show that a deliberate deed or
writing, or a judgment of a court, is of too much solem-
nity to be brushed away by loose and inconclusive evi-
dence.3 But an instrument which is part of the same
transaction, explaining the purpose of a deed absolute on
its face may be relied upon to show fraud connected with
the deed even though the instrument is not of even date
with the deed.4

Fraud, on the other hand, is rarely perpetrated openly
and in broad daylight. It loves darkness and is commit-
ted in secret and privately, and is usually shrouded in
mystery and hedged in and surrounded by all the guards
which can be invoked to prevent discovery and exposure.
Its operations are invariably circuitous and difficult of
detection.5 The proof of it is very seldom positive and
direct,6 but, as we shall presently see, is dependent upon
very many little circumstances7 and conclusions to be

1 See Coleman v. Burr, 93 N. Y. 31, Adelsberger, 122 N. Y. 4(57. 25 N. E.
and cases cited. See §§ 9, 10. Rep. 859.

2 92 Pa. St. 165. 5 Kaine v. Weigley, 22 Pa. St. L82.

3 See Howland v. Blake, 97 U. S. 6 Strauss v. Kranert, 56 111. 254
624; Fick v. Mulholland, 48 Wis. 413, Rea v. Missouri, 17 Wall. 532 ; Dens-
4 N. W. Rep. 346; Kent v. Las- more v. Tomer, 11 Neb. 118; Lock-
ley, 24 Wis. 654 ; Harter v. Christoph, hard v. Beckley, 10 W. Va. 87; Far-
32 Wis. 246 ; McClellan v. Sanford, 26 mer v. Calvert, 44 Ind. 209.

Wis. 595. "See Jewell v. Knight, 128 U.S.

4 Howell v. Donegan, 74 Hun (N. Y.) 426, 8 S. C. Rep. 193; Reynolds v.
410, 26 N. Y. Supp. 805. [See Knowles Gawthrop, 37 W. \'a. 13, 16 S. E.
v. Toone, 96 N. Y. 534 ; Kraemer v. Rep. 364.

14 JUDGE BLACKS VIEWS. § J

drawn from the general aspects of the case.1 Hence the
field of inquiry must be broad.-'

§7. Judge Black's views. — The learned Chief Justice
Black urged that the proposition that fraud could never
be presumed, but must be proved, could be admitted only
in a qualified and very limited sense. The idea that it
was a fundamental maxim of the law, incapable of modi-
fication, and open to no exception, was denied, and the
principle, as commonly declared, was said to have scarcely
enough extent to give it the dignity of a general rule.
This vigorous writer observes : " It amounts but to this :
that a contract, honest and lawful on its face, must be
treated as such until it is shown to be otherwise by evi-
dence of some kind, either positive or circumstantial. It
is not true that fraud can never be presumed. Presump-
tions are of two kinds, legal and natural. Allegations of
fraud are sometimes supported by one and sometimes by
the other, and are seldom, almost never, sustained by that
direct and plenary proof which excludes all presumption.
A sale of chattels without delivery, or a conveyance of
land without consideration, is conclusively presumed to
be fraudulent as against creditors, not only without proof
of any dishonest intent, but in opposition to the most
convincing evidence that the motives and objects of the
parties were fair. This is an example of fraud established
by mere presumption of law. A natural presumption is
the deduction of one fact from another. For instance :
a person deeply indebted, and on the eve of bankruptcy,
makes over his property to a near relative, who is known
not to have the means of paying for it. From these facts
a jury may infer the fact of a fraudulent intent to hinder
and delay creditors. A presumption of fraud is thus

'Newman v. Cordell, 43 Barb. (N. 'White v. Benjamin, 150 N. Y. 265
Y. us 161. See infra, Chap. XVI.
<>n [ndicia or Badges of Fraud.

§ 7 JUDGE BLACK'S VIEWS. 15

created, which the party who denies it must repel by clear
evidence, or else stand convicted. When creditors are
about to be cheated, it is very uncommon for the perpe-
trators to proclaim their purpose, and call in witnesses to
see it done.1 A resort to presumptive evidence, there-
fore, becomes absolutely necessary to protect the rights
of honest men from this, as from other invasions." 8 The
popular statement that "fraud will not be presumed"
must be accepted understandingly, for it certainly can be
inferred from facts and circumstances,3 and from decep-
tive assertions and incidents,4 and it is considered to be
error to charge a jury that they cannot predicate fraud
upon inference or implication,5 or that the proof must be
"irresistible,"6 or "clear and undoubted,"7 or that it
must be established beyond a reasonable doubt,8 for evi-
dence that satisfies the mind will support a conclusion of
fraud, although it may not lead to a conviction of abso-
lute certainty.9 Fraud is hardly ever proven positively,
and usually is shown by the outlook, the circumstances
and environment of the transaction, and the situation and
relations of the parties, and must be tested by ourknowl-

1 See Montgomery Web Co. v. Die- Sturm v. Chalfant, 38 W. Va. 243, 18
nelt. 133 Pa. St. 594, 19 Atl. Rep. 428. S. E. Rep. 451.

2 Kaine v. Weigley, 22 Pa. St. 183; 6 Carter v. Gunnels, 67 111. 270.
Goshorn v. Snodgrass, 17 W. Va. 717; 1 Abbey v. Dewey, 25 Pa. St. 413.
Sturm v. Chalfant, 38 W. Va. 248, 18 8 Kane v. Hibernia Ins. Co. 39 X.
S. E. Rep. 451. J. L. 697; Lee v. Pearce, 68 N. C. 76;

3 Lowry v. Beckner, 5 B. Mon. (Ky.) Sparks v. Dawson, 47 Tex. 13s; Wash-
43; Sturm v. Chalfant, 38 W. Va. 248, ington Union Ins. Co. v. Wilson, 7
18 S. E. Rep. 451; Goshorn's Exr. v. Wis. 169; ^Etna Insurance Co. v.
Snodgrass, 17 W. Va. 766. Johnson, 11 Bush (Ky.) 587.

4 Sturm v. Chalfant, 33 W.Va. 248, » Marksbury v. Taylor, 10 Bust
260.18S. E. Rpp. 451; Reynold's Admr. (Ky.) 519; O'Donnell v. Segar, 35
v. Gawthrop, 37 W. Va. 13, 16 S. E Mich. 367; Lee v. Pearce. OS N. I \ 76;
Rep. 364. Linn v. Wright, 18 Texas 317; Lock-

5 Bullock v. Narrott, 49 111. 62: hard v. Beckley, 10 W. Va. 87; Young
O'Donnell v. Segar, 25 Mich. 367; v. Edwards, 72 Pa. St. 257; Bryanl v.
Reed v. Noxon, 48 111. 323; Goshorn's Simoneau, 51 111. 324.

Exr. v. Snodgrass, 17 W. Va. 766;

i6

MoRAI. TURPITUDE.

§8

edge of human nature, and the motives and purposes
which move men in the ordinary transactions and affairs
of life.1

§8. Proof of moral turpitude. — The authorities have
been multiplying, in certain quarters at least, to strengthen
the efforts of creditors to overcome this difficulty arising
from the presumption of validity and good faith in litiga-
tions to reach property fraudulently alienated. Many of
the cases attach little importance to the sworn assertion
of perfect good faith and entire honesty on the part of
the purchaser,' or of the seller, and the courts are trying
to unravel these forbidden transfers without exacting
explicit proof of moral turpitude.3 The intent or intention
is regarded as an emotion of the mind, evidenced by acts
and declarations, and, as acts speak louder than words, if
a party is guilty of an act which defrauds another, his
declaration that he did not, by the act, intend to defraud,
is weighed down by the evidence of his own act.4 A per-

1 Reynold's Admr. v. Gawthrop's
Heir-, 37 W. Va. 13, 16 S. E. Rep. 364.
Sadden v. spader, 20 Johns.
(N. 7.) 573, 573; Hendricks v. Robin-
son, 2 Johns. Ch. (N. Y.) 300; Fel-
lows v. Fellows, I Cow. (N. Y.) 709;
Barrow v. Bailey, 5 Fla. 20; Walter
x. Lane, 1 MacAr. (D. C.) 275.

Mr. May says: -'The statute is
directed nol only against such trans-
fer- of property, as are made with the
express intention of defrauding credi
tors, hut .... extends a- well to
such as virtually and indirectly oper-
ate tli'- same mischief, by abusing
their confidence, misleading their
judgment, or secretly undermining
their interests ; to obviate which it
has gradually grown into a practice to
regard certain acts or circumstances
as indicative of a so-called fraudulent
intention in the construction of the

statutes, although perhaps there was.
in fact, no actual fraud or moral tur-
pitude. It is difficult in many cases
of this sort, to separate the ingredients
which belong to positive and inten-
tional fraud from those of a mere
constructive nature, which the law
thus pronounces fraudulent, upon
principles of public policy." May on
Fraudulent Conveyances, p. 4.

* Babcock v. Eckler, 34 N. Y. 633 ;
Coleman v. Burr, 93 N.Y. 31 ; Mande-
ville v. Avery, 4 1 N. Y. St. Rep. 4;
Newman v. Cordell, 43 Barb. (N. Y.)
156. In Booth v. Carstarphen, 107N. C.
395,401,13S. E. Rep. 375, thecourtsay:
"The fraudulent intent of a party
charged with fraud in any transac-
tion or matter appears from, and
iim-t be determined by, acts done or
omitted to be done — their nature, con-
nertinns, purpose and effect in con-

§ 8 MORAL TURP] I I DE. 17

son would not be likely to perform or accomplish an act
and afterwards proclaim that it was prompted by corrupt
motives. The moral sense is much weaker in some men
than in others, and it would be a strange rule which made
the rights of one man dependent upon the moral sense of
another man. There are certain rules founded in experi-
ence, and established by law, for determining the validity
of transfers under the statutes concerning fraudulent con-
veyances ; and a transgression of these rules will justify
courts and juries in avoiding the transaction without
regard to the opinions of the parties to it, and their evi-
dence should have little weight.1

In French v. French,2 Lord Chancellor Cranworth
remarked : " I shall not say that the transfer was volun-
tary ox fraudulent, but simply void as against the credit-
ors of William French," Again he observed in Spackman
v. Evans:3 "I do not attribute moral fraud to the
appellant, but the whole transaction was fictitious." So
in Backhouse v. Jett,4 Chief-Justice Marshall said : " The
policy of the law very properly declares this gift void as
to creditors, but looking at the probable views of the
parties at the time, there appears to be no moral turpi-
tude in it." 5 This principle may be further illustrated
from Gardiner Bank v. Wheaton,0 where the court say :
" When we pronounce the transaction between the
defendants, in respect to the conveyance from Gleason

templation of law. Such intent does the thought and purpose of the mind —

not depend upon nor consist in, nor is the intent — and of this the law takes

it to be ascertained from simply the notice.'* See Chapter XIV on Inten-

thought and purpose of the mind, but tion.

it depends upon, and is to be ascer- ' Potter v. McDowell, 31 Mo. 78.

tained from such thoughts and pur- ■ 6 De G. M. & G. 103.

poses evidenced and manifested by 3 L. R. 3 Eng. & Ir. A pp. 189.

and taken in connection with the 4 1 Brock. 511.

acts done or not done, and pertinent 5 See Logan v. Brick, '3 Del. < !h. 206.

facts and circumstances. It is the 6 8 Me. 381. See Wheelden v. Wil-

act or thing done or not done that son, 44 Me. 11.
gives cast, quality and character to
2

[8 M< IRAL TURPITUDE. § 8

to Cole, as fraudulent, we do not mean to insinuate that
there was any moral turpitude on the part of Prince ; nor
do we believe there was any ; but though the motives of
a party may be good in such a transaction, still, where
the design, if sanctioned, would defeat or delay creditors
. . . , neither law nor equity can sanction the proceeding J
and on that account it is termed a legal fraud, or a fraud
upon the law."1 " It was not necessary," said Dwight,
C, in Cole v. Tyler,2 "that there should be any actual
fraudulent intent.3 The requisite intent may be inferred
from the circumstances of the case."4 The act may be
adjudged covinous although the parties deny all inten-
tion of committing a fraud,5 and it is not necessary to
impute to the parties "a premeditated or wicked intention
to destroy or injure" the interests of others.0 A man
may commit a fraud without believing it to be a fraud.7
The statute, 13 Eliz., refers to a legal, and not a moral
intent ; that is, not a moral intent as contradistinguished
from a legal intent. It supposes that every one is capa-
ble of perceiving what is wrong, and, therefore, if he does
that which is forbidden, intending to do it, he will not be
allowed to say that he did not intend to do a prohibited
act. A man's moral perceptions may be so perverted as
to imagine an act to be fair and honest which the law
justly pronounces fraudulent and corrupt.8 " It is not
important what motives may have animated the parties,"
if the necessary effect of the disposition is to hinder and

3< e Jenkins v. Lockard, 66 Ala. Smith v. Reid, 134 N. Y. 568, 31 N. E.

381; Bibb v. Freeman, 59 Ala. 612. Rep. 1082.

•65 X. Y. 77. Compare Smith v. 6 Kirby v. Ingersoll, 1 Harr. Ch.

Reid, 134 X. ¥.568,31 X. K. Rep. 1082; (Mich.) 191.

Course) v. Morton, 132 X. Y. 556, 30 •■ Kirby v. [ngersoll, 1 Don-. (Mich.)

X i: Rep. 881. 17 7. 493.

Citing Mohawk Bank v. A-twater, ' Emma Silver Mining Co. v. Grant,

54. L. R. 17 Ch. I). 122.

impare Watson v. Riskamire, 15 BGrover v. Wakeman, 11 Wend. (N.

Iowa, 238 Coleman v. Burr, 93 X. Y. Y.)225.
31 : Graham v. Chapman, 12 C. B

§ 9 FRAUD l\ I A i I .

19

delay creditors.1 It results that the mental operation or
emotion of the debtor, and the legal conclusion from the
acts and circumstances may be diametrically opposed.8""

§ 9. Fraud in fact and fraud in law. — Some of the authori-
ties maintain that there is not, for any practical purpose,
so far as the validity of a particular transaction may be
concerned, any difference between fraud in fact and fraud
in law ; 3 between a fraud proved by direct evidence, and
a fraud inferred by law from facts which are consistent
with the absence of an actual mental intent to defraud.
Whenever the effect of a particular transaction with a
debtor is to hinder, delay, or defraud creditors, the law
infers or supplies the intent, though there may be no
direct evidence of a corrupt or dishonorable motive, but,
on the contrary, an actual honest, but mistaken, motive
existed. The law interposes, and declares that every
man is presumed to intend the natural and necessary con-
sequences of his acts ; and the courts must presume the
intention to exist, when the prohibited consequences
must necessarily follow from the act, and will not listen
to an argument against it.4 Hence it has been remarked

1 Moore v. Wood, 100 111. 451. standing the invalidity of a particular

2 See Chap. XIV ; Coleman v. Burr, provision." Citing Denny v. Bennett,
93 N. Y. 17 ; Roberts v. Vietor, 130 N. 128 U. S. 489, 496, 9 S. C. Rep. 134 ;
Y. 600, 29 N. E. Rep. 1025 : Sutherland Cunningham v. Norton, 125 U. S. 77.
v. Bradner, 116 N. Y. 410, 22 N. E. 8 S. C. Rep. 804; Muller v. Norton,
Rep. 554 ; Johnston v. Tuttle Bros., 65 132 U. S. 501, 10 S. C. Rep. 117: I >ar-
Miss. 494. Lhng v. Rogers, 22 Wend. (X. V

3 See §51. In Peters v. Bain. 133 Howell v. Edgar, 4 111. 417. 11'.);
U. S. 688, 10 S. C. Rep. 354, the court Ellis v. Valentine, 65 Tex. 534.

say: "We agree with the Circuit 4Sims v. Gaines, 64 Ala. 396 : I *■ >i >• • v.

Court that, as respects fraud in law Wilson. 7 Ala. 694; Wiley v. Knight,

as contradistinguished from fraud in 27 Ala. 336; Potter v. McDowell, 31

fact, where that which is valid can be Mo. 69. See Bentz v. Rockey, 69 Pa.

separated from that which is invalid, St. 77; Harman v. Hoskin, 56 Miss.

without defeating the general intent, 142; Allan v. McTavish, 8 Ont. App.

the maxim ' void in part, voidin toto,'1 Rep. 440, and cases cited ; Col' .'nan \

does not necessarily apply, and that the Burr, 93 N. Y. 31, and cases cited;

instrument maybe sustained notwith- Schaible v. Ardner, 98 Mich. 70, 56 X.

20 THE CASKS CONSIDERED. § IO

that where a conveyance, by its terms, operates to hinder,
delay, or defraud creditors, the intent to do so is imputed
to the parties, and no evidence of intention can change
that presumption. A different intent cannot be shown
and made out by the reception of parol testimony, nor
deduced from surrounding circumstances.1 What is
meant by these cases is that, whether the fraudulent
intent is reasoned out and declared by the court, by the
proper application of the rules of legal construction
and interpretation, to the particular transaction or instru-
ment under consideration, or whether it is found by a
jury to exist as matter of fact,2 in either case the transfer
is made with the intent to defraud creditors, and may be
avoided. Hence it is said that where the fraudulent intent
is not apparent on the face of the deed, it is a question
of fact for the jury,3 and the court has not the power to
infer the intent.4

§ 10. The cases considered. — This subject may perhaps
be illustrated from the case of Harman v. Hoskins,5

W. Rep. 1105; Morrill v. Kilner, 113 that in such cases the question of

111. 318. Compare State v. Estel, 6 fraud should be one of fact."

Mo. App. 6. In Wilt v. Franklin, 1 ' Farrow v. Hayes, 51 Md. 505 ;

Binn. (Pa.) 517, the court observed : Green v. Trieber, 3 Md. 11. See Sang-

" Although the statute, 13 Eliz., is stou v. Gaither, 3 Md. 40; Malcolm

bottomed on the supposition of an v. Hodges, 8 Md. 418 ; Inloes v. Amer.

unmoral intention, yet it has been Ex. Bank, 11 Md. 173; Barnitz v.

judged necessary to determine that Rice, 14 Md. 24 ; Whedbee v. Stewart,

certain circumstances, which, in their 40 Md, 414.

nature, tend to deceive and injure - Nicol v. Crittenden, 55 Ga. 497;

creditors, shall be considered as suffi- Williams v. Evans, 6 Neb. 216.

cii-nt evidence of fraud.'' In Ingle- 3 Van Bibber v. Mathis, 52 Tex. 409.

hart v. Thousand [aland Hotel Co., See Briscoe v. Bronaugh, 1 Tex. 327;

109 N. Y. 465, the court say : "The Bryant v. Kelton, 1 Tex. 415 ; Peiser

ture bas been averse to the v. Peticolas, 50 Tex. 638.

rule, at one time adopted by the 'Ehrisman v. Robert, GS Pa. St.

courts, tbat fraud in such cases was 308; Kelly v. Lenihan, 56 Ind. 450;

a question of law. and Bought to end Tognini v. Kyle, 15 Nev. 468; Mbn-

the controversy, which bad raged teith v. Bax, 4 Neb. 166.

mosi bitterly, by explicitly enacting -56 Miss. 142.

§ IO THE CASKS CONSIDERED. 21

where it is laid down that the intent may be vicious,
though the deed is fair and regular upon its face, and a
full price was paid. The intent must then be proved
aliunde. In cases where the transaction on its face is
fair, if it sprung from the motive to "hinder, delay, or
defraud " creditors, then the intent is purely a question
of fact to be established by the testimony. But a party
will be held as intending the natural and inevitable legal
effects of his acts. Hence if his deed, by its recitals,
necessarily operates to interpose unreasonable hindrance
and delay to creditors, or to entirely defeat their claims,
the question of intent will be practically a conclusion of
law.1 A deliberate act which naturally and inevitably
produces a certain result, must, in law, be held to
have been contrived and performed to carry out and con-
summate that result. The court in such a case arrives at
the conclusion, by a proper construction of the instrument,
that such is its direct and inevitable effect, and it results,
as matter of law, that the statute is satisfied. In other
words, the transaction itself so palpably and conclusively
establishes the intent that testimony upon that point would
be superfluous, and a finding of a jury of an intent dif-
ferent from that which the legitimate construction of the
instrument furnishes, would be erroneous.2 Thus in
Young v. Heermans,3 a conveyance by a debtor of all
his property, real and personal, without consideration,
and in trust for the grantor's benefit during his life, and
after his death for the payment of his debts, was declared
to be fraudulent per se ; no evidence aliunde being deemed
necessary to establish the fraudulent intent. Proof of the
intention to enter into the prohibited transaction is all
that is requisite. When the courts declare an instrument

1 Houck v. Heinzman, 37 Neb. 463. 3 66 N. Y. 374. See Puller v. Brown,

5 See Dunham v. Waterman, 17 N. 76 Hun (N. Y.) 557, 38 N. V. Supp.

Y. 21. 189 ; Sloan v. Birdsall, 58 Hun (X. V.)

321, 11 N. Y. Supp. 814.

THE CASES CONSIDERED. § IO

fraudulent on its face, it does not necessarily mean that it
was the offspring of a corrupt intent considered as a
mental operation, but that u it is an instrument the law
will not sanction or give effect to, as to third persons, on
account of its susceptibility of abuse, and the great
danger of such contracts being used for dishonest pur-
poses.1

1 1 may scarcely be proper to say in these cases that there
is a presumption or conclusion of law that the transaction
is fraudulent, but rather that the circumstances of the
transaction, or the transaction itself, or the necessary and
inevitable inference, furnish conclusive evidence of fraud ;
and if, against such evidence, a jury, a judge, or referee
should find that there was no fraud, a new trial would be
granted, not because any legal presumption or conclu-
sion had been violated, but because the finding was
aeainst the weight of evidence : against conclusive evi-
dence.'~ The intent is gathered from the instrument, and
no external aid is necessary to develop it.3 The fraud is
self-evident.4 But to find fraud as matter of law it must
so expressly and plainly appear in the instrument as to be
incapable of explanation by evidence de/io?'s.°

Grover, J., an able judicial officer, and vigorous writer,
ignored the distinction between fraud in law and fraud in
fact, in these words : "A distinction is attempted, in some
of the cases, between fraud in law and fraud in fact. I
think there is no solid foundation for it. When upon the
face of the assignment any illegal provision is found, the
presumption at once conclusively arises that such illegal

'(Jay v. Bidwell, 7 Mich. 531, dis- 8 Harman v. Hoskins, 56 .Miss. 145.

Benting opinion of Manning, J. * Hardy v. Simpson, 13 Ired.(N.C)

■Babcocb v. Eckler, 24 N. Y. 632 ; Law, 132, L39 ; Bigelow on Fraud, p.

[nglehari v. Thousand bland Hotel 468.

Co., 109 N. Y. 454,:465. SeeBrunerv. Cheatham v. Hawkins, 76 N. C.

n, 189 Id. I. 6 109, 38 N. E. 835.

Rep. 818.

£ IO THE CASES CONSIDERED. 2$

object furnished one of the motives for making the assign-
ment; and it is upon this ground adjudged fraudulent
and void. The result is the same when the illegal design
is established by other evidence. The inquiry is as to
the intention of the assignor."1 Coleman v. Burr ~ is an
extreme illustration. The referee found that the convey-
ance was honest, but the transaction was set aside because,
from the facts found, the inference of fraud was inevit-
able. The same principle is enunciated in Roberts v.
Vietor.3

" Fraud," said Mr. Justice Buller, in Estwick v. Cail-
laud,4 " is sometimes a question of law, sometimes a
question of fact, and sometimes a mixed question of law
and of fact." Perhaps it would be more accurate to say
that fraud is never purely a question of law, nor exclu-
sively a question of fact,5 though it frequently partakes
more largely of the one quality than of the other. Fraud
is not to be considered as turning solely on intent as an
emotion, but as a legal deduction. " What intent," said
Ruffin, J., is in law fraudulent, the court must inform the
jury, else the law can have no rule upon the doctrine of
fraud; and every case must create its own law."6 Per-
haps the clearest division of fraud is into three classes ;
first, fraud that is self-evident, with which the jury have
nothing to do ; second, fraud which depends upon a
variety of circumstances usually connected with motive
and intent, which is an open question of fact for the jury,

1 Oliver Lee & Co.'s Bank v. Talcott, 134 N. Y. 575, 31 N. E. Rep. 1082 ; Ro-

19 N. Y. 148. See, in this connection, belts v. Victor, 130 N. Y. GOO, 29 N.

Lukins v. Aird, 6 Wall. 79, per Davis, E. Rep. 1025.

J.; Burrv. Clement, 9 Col. 1 ; Stevens :; 130 N. Y. 600, 29 X. E. Rep. L025.
v. Robinson, 72 Me. 381 ; French v. *5 T. R. 420.

Holmes, 07 Me. 189; Cunningham v. 5 Foster v. Woodfin, 11 Ired. i.V I .)

Freeborn, 11 Wend. (N. Y.) 252; Law, 339.

Peters v. Bain, 133 U. S. 670, 10 S. C. 6 Leadmau v. Barns, 3 Dev. i X I !.)

Rep. 354. Law, 146; Parrish v. Danford, 18 Fed.

-93 N. Y. 31. See Smith v. Reid, Cases. 1231, 1 Bond, 345.

24

WORDS "HINDER, DELAY, OR DEFRAUD.

II

with instructions as to what constitutes fraud ; third, pre-
sumptive fraud where the presumption may be rebutted.1

§11. Words "hinder, delay, or defraud."— To hinder and
delay creditors is to do something which is an attempt to
defraud, rather than the successful accomplishment of a
fraud ; to put some obstacle in the path, or interpose
unjustifiably some period of time before the creditor can
reach his debtor's property and apply it toward the
liquidation of the debt.2 The words " hinder," " delay," 3
and "defraud" are not synonymous.4 A conveyance
may be made with intent to hinder or delay without an
intent to absolutely defraud. Either intent is sufficient.5

Hardy v. Simpson, 13 Ired. (N. C.)
Law. 139. In Coburn v. Pickering, 3
N. H. 415, Richardson, C. J., lays
down the rule that whether there was
any trust is a question of fact, but the
trust being proved or admitted, the
fraud is an inference of law which
the court must pronounce. His exact
language, after a discussion of the
authorities, is as follows : " It thus
seems to us, to be settled, as firmly
as any legal principle can be settled,
that the fraud which renders void
the contract, in these cases, is a secret
trust, accompanying the sale. . . .
It is, therefore, very clear, that fraud
U sometimes a question of fact, and
sometimes a question of law. When
the question is, was there a secret
trust? it is a question of fact. But
when the fad of a secret trust is ad-
mitted, or in any way established, the
fraud is an inference of law, which a
courl is bound to pronounce.." So,
upon like principle, it was held in
Phelps v. curt.. 80 III. 11'.', not to be

important what motive, may have

animated the parties, if they have so
disposed of the property thai the
necessary effed i. to binder ami delay

creditors. Such a disposition is, in
judgment of law, a legal fraud. To
the same effect, also, is Power v. Al-
ston, 93 111. 587; Emerson v. Bemis,
69 111. 53? ; Moore v. Wood, 100 111.
454.

2 Burnham v. Brennan, 42 N. Y.
Superior Ct. 63.

3 In Read v. Worthington, 9 Bosw.
(N. Y.) 628, Robertson, J., said : "To
hinder any one in bis course is, neces-
sarily, to delay him. Not being able
to perceive the distinction, I must
hold that none exists. Many such
pleonasms are to be found in old Eng-
lish statutes, where they are intro-
duced for caution's sake, more than
with any precise idea as to what they
were intended to effect."

4 Eickox v. Elliott, 22 Fed. Rep. 21.

5 Crow v. Beardsley, 0* Mo. 439;
Iv'upe v. Alkire, 77 Mo. 641 : Buell v.
Rope, 6 A pp. 1 )iv. ( X. Y.) 113 ; Kaufer
v Walsb, 88 Wise. 63, 59 N. W. Rep.
460. But in Weber v. Mick, 181 111.
520, -':: X. E. Rep. (lie, it was held that
an instruction to the effect that it was
not necessary to show that the con-
veyance was made to defraud, but
that intent to hinder and delay was

§11 WORDS "HINDER, DELAY, OR DEFRAUD." 25

The statute is in the disjunctive and attempts to attach a
separate and specific meaning to each of the words which
it employs.1 An instance of hindrance and delay within
the statute is given in a case in Pennsylvania, where a
debtor departed from the State leaving no property sub-
ject to the process of his creditor, and making no provi-
sion for the payment of his debts.2 A better illustration
is to be found in a case in the New York Court of Appeals,
where the debtor conveyed his property in trust for his
own benefit during his life, and after his death for the
payment of his debts.3 A conveyance made by an embar-
rassed debtor with a view, which was known to the pur-
chaser, to secure the property from attachment, is void as
against creditors, though honestly made, the debtor
intending that all creditors should be paid in full.4 The
authorities avoiding assignments by the terms of which
the assignee is empowered to sell upon credit are, per-
haps, more in point than any of the illustrations given.
A conveyance of real estate by a debtor upon the under-
standing that the grantee should hold it in trust for the
grantor, and as fast as money could be realized therefrom,
should apply it to the payment of his debts, necessarily
operates to hinder and delay creditors. A debtor's prop-
erty is, in theory of law, subject to immediate process
issued at the instance of his creditors, and the debtor will

sufficient, was properly refused. In ' Burgert v. Borchert, 59 Mo. 83.

Dance v. Seaman, 11* Gratt. (Va.) * Heath v. Page, 63 Pa. St. 108.

778-782, the court say: "The fact 3 Young v. Heermans, 66 N. Y.

that creditors may be delayed or 374. Sees. p. Graves v. Blondell, To

hindered, is not of itself sufficient to Me. 194; Henry v. Einman, 25 Minn.

vacate such a deed, if there is absence 199 ; Macomber v. Peck, 39 Iowa 351 :

of fraudulent intent. Every convey- Lukins v. Aird, 6 Wall. 78; Donovan v.

ance to trustees interposes obstacles Dunning, 69 Mo. 436 ; Lore v. Dieri

in the way of the legal remedies of 19 J. & S. (N. Y.) 11 1.

the creditors, and may, to that extent, 4 Kimball v. Thompson, 58 Mass.

be said to hinder and delay them." (4 Cush.) 446.
See Keagy v. Trout, 85 Va. 394, 7 S.
E. Rep. 329.

WORDS "HINDER, DELAY, OR DEFRAUD." §11

not be permitted to hinder or delay them by any device
which leaves it, or the avails of it, subject to his control
and disposition ; and it makes no difference that the
debtor intends to apply the avails of it to the payment of
his debts.1 So a deed of trust creating a lien upon person-
alty for an indefinite period, the natural operation of
which is to benefit the grantor, is fraudulent as to credit-
ors,- as is also a sale on a credit to a son of the debtor on
the eve of attachment proceedings.3

The statute seems to be aimed at three things which it
is supposed insolvents would possibly be tempted to do
for the purpose of avoiding or deferring the payment of
their debts. First, they might dispose of their property
in such manner as to interpose obstacles to legal process,
with intent to hinder creditors in the collection of their
demands ; or, second, to delay payment to some future
period ; or, third, to defraud their creditors by absolutely
defeating all attempts to enforce their claims. Any one
of these purposes is sufficient to avoid the transaction.4
If the desi°m of a transfer is a lawful one, it matters not
that a creditor is thereby deprived of property which
mijjht otherwise have been reached and applied to the
payment of his debt. Hence it is that a general assign-
ment,5 or a preference,6 is upheld, though each is often
made or given to thwart some belligerent creditor.7 The
secret motives that prompt the act in such cases are unim-

Smithv.Conkwright,28 Minn. 23. 128 O. S. 273.281.9 S. C. Rep. 65. See,

State v. Mueller, 10 Mo. App. 87. especially, the case of Nicholson v.

Blum v. McBride, 69 Tex. 60, 5 Leavitt, 6 N. Y. 510, 10 N. Y. 591.

s. W. Rep. 641. B Hoffman v. Mackall, 5 Ohio St.

• Burdick v. Post, 12 Barb. (N. Y.i 124; Hefner v. Metcalf, 1 Eead(Tenn.)

172; affi'd 6 N. Y. 522. See Pilling v. .")77 ; Grover v. Wakeman, 11 Wend.

on-. 13 Wis. 195 Burgerl v. Borchert, (N. V.) 194.

59 Mo. 80 : Crow \. Beardsley, ns Mo. c Hall v. Arnold. 15 Barb. (N. Y.)

435; Planters' Bank v. The Will. a 599; Hartshorn v. Eames, 31 Me. 98.

Mills. 60Ga, 168; Sutton v. Banford, 'Hartshorn v. Eames, 31 Me. 98;

11 Mich. 518; Davenporl v. Cum- Bolbird v. Anderson, 5 T. R. 235.

mings, 15 Iowa 219; Means v. Dowd,

§12 WORD "disposed" construed. 27

portant.1 Speaking of devices to aid the debtor, Davis,
J., said in Robinson v. Elliott:- "The creditor must
take care, in making his contract, that it does not contain
provisions of no advantage to him, but which benefit the
debtor, and were designed to do so, and are injurious to
other creditors. The law will not sanction a proceeding
of this kind. It will not allow the creditor to make use
of his debt for any other purpose than his own indemnity.
If he goes beyond this, and puts into the contract stipula-
tions which have the effect to shield the property of his
debtor, so that creditors are delayed in the collection of
their debts, a court of equity will not lend its aid to
enforce the contract." A debtor cannot take the law
into his own hands and attempt to secure the delay which
can only be obtained by the consent of the creditors.3

§ 12. Word "disposed "construed. — In Bullene v. Smith,4
it appeared that section 398 of the Revised Statutes of
Missouri, authorized an attachment to issue in the follow-
ing, among- other cases : Where the defendant had fraud-
ulently conveyed or assigned his property so as to hinder
or delay his creditors ; where the defendant had fraud-
ulently concealed, removed, or disposed of his property or
effects, so as to hinder his creditors. The court held that
the word disposed, as here used, covered all such aliena-
tions of property as might be made in ways not other-
wise pointed out in the statute : for example, pledges,
gifts, pawns, bailments, and other transfers and aliena-
tions which might be effected by mere delivery and with-
out the use of any writing, assignment, or conveyance.
Other species of conveyances were excluded. Hence it

1 Horwitz v. Ellinger, 31 Md. 504; Means v. Dowd, 128 U. S. 278, 281,

Pike v. Bacon, 21 Me. 280; Covanho- 9 S. C. Rep. 65. Compare Buntlej v.
van v. Hart, 21 Pa. St. 500. Kingman, 152 U. S. 535, II S. C. Rep.

- 22 Wall. 523. G88.

4 73 Mo. 151.

28 NO DEFINITION OF FRAUD. §13

was held that a charge to a jury to the effect that the
defendant had fraudulently disposed of his property was
not supported by proof that he had executed a fraudulent
mortgage.

§ 13. No definition of fraud.— Fraud is as difficult to de-
fine ' as it is easy to perceive. Courts of equity have skil-
fully avoided giving a precise and satisfactory definition
of it,2 so various is it in its form and color.3 It is some-
times said to consist of " any kind of artifice employed
by one person to deceive another," conduct that operates
prejudicially on the rights of others,41 or withdraws the
property of a debtor from the reach of creditors.5 But
the term is one that admits of no positive definition, and
cannot be controlled in its application by fixed and rigid
rules. Fraud is " so subtle in its nature, and so protean
in its disguises, as to render it almost impossible to give
a definition which fraud would not find means to evade." 6
It is to be inferred or not, according to the special circum-
stances of every case. Whenever it occurs it usually
vitiates the transaction tainted by it.7 "Fraud cuts down

1 See Green v. Nixon, 23 Beav. 530; Tenner v. Dickey, 1 Flippin, 36.
Reyni'll v. Sprye, 1 De G., M. & G. Undue influence. — So what consti-
691. Fraud may be passive as well as tutes undue influence is a question de-
active. Holt v. Creamer, 34 N. J. Eq. pending vipon the circumstances of
189. each particular case. It is a species of
See Beach on Contributory Neg., constructive fraud which the courts
§2. Compare Chesterfield v. Janssen, will not undertake to define by any
1 Atk. 852; Shoemaker v. Cake, 83 fixed principles, lest the very defini-
Va. 5, 1 S. E. Rep. 387. tion itself f urn i si 1 a finger-board point-
Williams v. Harris, 4 So. Dak. 26, ing out the path by which it may be
■">1 N. \V. Rep, 926. evaded. The following principle, we

4 Bunnv. Ahl, 29 I'a. St. 390. think, is sound, both in law and

McKibbin v. Martin, 64 Pa. St. 356. morals, and though a departure from

' Shoemaker v. Cake, 83 Va. 5, 1 S. the former rule, is sustained by the

E. Rep. 887. En Jewell v. Knight, 123 more modern authorities. When one

U. S. 482, the court saj " The question living in illicit sexual relations with

<-f fraud or no fraud is one necessarily another, makes a large gift of bis

compounded of fact and of law." property to the latter, especially in

§ 13 NO l'l.l INN [( '\ I U FRA1 D. 29

everything." " Fraud," said De Grey, C. J., " is an
extrinsic, collateral act, which vitiates the most solemn
proceedings of courts of justice. Lord Coke says it
avoids all judicial acts, ecclesiastical or temporal." ' It
is the judgment of law on facts and intents.-' Its exist-
ence is often a presumption of law from admitted or
established facts, irrespective of motive, and too strong
to be rebutted.8 "Fraud," said Story, J., "will vitiate
any, even the most solemn transactions; and an asserted
title to property, founded upon it, is utterly void." 4
11 Fraud is always a question of fact with reference to the
intention of the grantor. Where there is no fraud there
is no infirmity in the deed. Every case depends upon
its circumstances, and is to be carefully scrutinized. But
the vital question is always the good faith of the trans-
action. There is no other test."5 Fraud does not con-
sist in mere intention, but in intention carried out by
hurtful acts.6 " Fraud or no fraud is generally a question
of fact to be determined bv all the circumstances of the

cases where the donor excludes the ' 2 Pettibone v. Stevens, 15 Conn. 26 ;

natural objects of his bounty, the Sturtevant v. Ballard, 9 Johns. (N.Y.)

transaction will be viewed with such 342; Otley v. Manning, 9 East, 64;

suspicion by a court of equity as to Morgan v. Elam, 4 Yerg. (Tenn. I V-> ;

cast on the donee the burden of prov- Worseley v. Demattos, 1 Burr. 467.

ing that the donation was the result of 3 Belford v. Crane, 16 N. J. Eq.

free volition, and was not superin- 265.

duced by fraud or undue influence. * United States v. Amistad, 15

See Shipman v. Furniss, 69 Ala. 555, Peters, 594.

and cases cited, 44 Am. Rep. 528, and 5Per Swayne, J., Lloyd v. Fulton,

note ; Leighton v. Orr, 44 Iowa, 679 ; 91 U. S. 485.

Dean v. Negley, 41 Pa. St. 312. Williams v. Davis, 69 Pa. St. 28 ;

'Rex v. Duchess of Kingston, 20 see Reilly v. Barr, 34 W. \a. 95, 11 S. E.

How. St. Tr. 544, 2 Smith's L. C. 687. Rep. 750. The fraud against which a

See Brownsword v. Edwards, 2 Ves. bankruptcy discharge is not a defense

Sen. 246 : Meddowcroft v. Huguenin, is "positive fraud, or fraud in fact

4 Moo. P. C. 386; Perry v. Meddow- involving moral turpitude or inten-

croft, 10 Beav. 122: Harrison v. tional wrong, as does embezzlement,

Mayor etc, of Southampton, 4 De G., and not implied fraud or fraud in

M. & G. 137; Gill v. Carter, 6 J. J. law." Ames v. Moir, 138 Q. S. 311 :

Marsh (Ky.) 484; Hal^v. Hall, 1 Gill Noble v. Eammond, 129 D". S. 69.
(Md.) 391 ; WilsoD v. Watts, 9 Md. 356.

30 NO DEFINITION OF FRAUD. £ 13

case."1 Direct proof of positive fraud in the various
kinds of covinous alienations which we are to discuss, is
not, as we shall presently see, generally attainable, nor
is it vitally essential. The fraudulent conspirators will
not be prompted to proclaim their unlawful intentions
from the housetops, or to summon disinterested parties
as witnesses to their nefarious schemes. The transac-
tion, like a crime, is generally consummated under cover
of darkness, with the safeguards of secrecy thrown about
it. Hence it must be scrutinized and judged by all the
surrounding circumstances of the case. The evidence is
"almost always circumstantial. Nevertheless, though
circumstantial, it produces conviction in the mind often
of more force than direct testimony."- In such cases,
where fraud is in issue, " the field of circumstances ought
to be very wide."3 From the very nature of the case it
can rarely ever be proved otherwise than by circumstan-
tial evidence.4 And if the facts and circumstances sur-
rounding the case, and distinctly proven, are such as
would lead a reasonable man to the conclusion that fraud
in fact existed, this is all the proof which the law re-
quires.5 It may be observed that there can be no fraud
unless there exist claims and rights which can be delayed
and hindered, and which, but for the fraudulent convey-
ance, could be asserted. The law takes no cognizance of
fraudulent practices that injure no one. Fraud without
injury will not furnish a cause of action. Unless these

1 Per Hunt. J., Humes v. Scruggs, Dec. (N.Y.)535; Tumlinv. Crawford,

94 U. s. 22 28. Bee McKibbin v. -Mar- Gl Ga. 128 ; Engraham v. Pate, 51 Ga.

tin. 64 Pa. st. 356 ; Knowlton v. Mish, 587.

8 Sawyer, 627. 3 Engraham v. Pate, 51 Ga. 537.

See Kempner v. Churchill, 8 Wall. 4 See Jewell v. Knight, 123 U. S.

Newman v. Cordell, 48 Barb. 426, 8 S. C. Rep. 193.

(N. Y.) 156; Babcockv. Eckler,24 N. B Lockhard v. Beckley, 10 W. 7a.

Harnett \. Dundass, I Pa. St. 87: White v. Perry, 14 W. Va. 86.
181 . Warner v. Blakeman, I A.bb. A.pp.

§14 RESTRAINTS UPON ALIENATION. J!

elements co-exist, the courts are powerless to render any
relief.1

§14. Restraints upon alienation.— A conveyance as re-
gards real property may be defined to be " the transfer of
the title of land from one person, or class of persons, to
another,"2 or as "a deed which passes and conveys land
from one man to another." 3 The usual incident of property
of every kind owned or possessed by persons sui juris is
the power of alienation ; generally speaking, every man
may in theory of law do what he pleases with that which
is his own.4 Almost the sole remaining restraint upon the
power of alienation of land is that which adjudges void
conveyances of real property held adversely by a third
party at the date of the conveyance. Statutes adjudging
such conveyances void " were originally introduced partly
upon the theory that it would be dangerous to permit the
transfer of disputed or ' fighting' titles, lest powerful and
influential persons might purchase and use such titles as
a means of oppressing poor people."5 But these statutes

•Fellows v. Lewis, 65 Ala. 354; Miles, 23 Wis. 164; Murphy v. Crouch,

Castle v. Palmer, 6 Allen (Mass.) 401; 24 Wis. 365; Succession of Cotting-

Legro v. Lord, 10 Me. 161; Foster v. ham, 29 La. Ann. 669. Compare Getz-

McGregor, 11 Vt. 595; Danforth v. ler v. Saroni, 18 111. 511; Currier v.

Beattie, 43 Vt. 138; Crummen v. Ben- Sutherland, 54 N. H. 475; Huey's \\>-

net, 68 N. C. 494: Sears v. Hanks, 14 peal, 29 Pa. St. 219. See §£ 46-48.

Ohio St. 298; Vaughan v. Thompson, 2 Klein v. McNamara, 54 Miss. 105.

17 111. 78 ; Muller v. Inderreiden, 79 111. 3 Brown v. Fit/.. 13 X. II. 285.

382; Anthony v. Wade, 1 Bush. (Ky.) "There is no magical meaning in the

110; Morton v. Ragan, 5 Bush. (Ky.) word 'conveyance;' it denotes an in-

334; Lishy v. Perry, 6 Bush. (Ky.) 515; strument which carries from one per-

Kuevan v. Specker, 11 Bush (Ky.) 1; son to another an interest in land."

Vogler v. Montgomery, 54 Mo. 577; Lord Cairns, L. ('., in Credlandjv.

Smith v. Rumsey, 33 Mich. 183; Hugu- Potter. L. R. 10 Ch. App. 12.

nin v. Dewey, 20 Iowa, 368; Edmonson 4 See § 52.

v. Meacham, 50 Miss. 34; Wood v. 5 Sedgwick & Wait on Trial of Title

Chambers, 20 Tex. 247; McFarland v. to Land (2d ed.), § 190. See Sedgwick

Goodman, 6 Biss. Ill; Cox v. Wilder, v. Stanton, 11 X. Y. 295; Urary v.

2 Dill. 45; .Smith v. Kehr, 2 Dill. 50; Goodman, 22 X. Y. L77; McMahan v.

Dreutzer v. Bell, 11 Wis. 114; Pike v. Bowe, 114] Mass. 145; Humbert; v.

32 RESTRAINTS UPON ALIENATION. § 14

are being rapidly abolished, circumvented, or ignored as
impracticable and unnecessary in this country, and even
this restraint upon alienation will soon be wholly super-
seded.1 The restriction which we are about to consider
upon a debtor's power of effectual alienation of property
at the expense of his creditor is one that has existed
from time immemorial, and which will not outlive its use-
fulness so long as people are dishonest or inclined to be
generous before they are just. The claims of creditors,
it may be observed, rest upon legal obligations higher
than the demands of affection or generosity, commendable
as a response to these may be when no duties which the
law declares paramount intervene.2 Creditors, as we have
said, have an equitable interest for the payment of their
claims in their debtor's property, or in " the means he has
of satisfying their demands,"3 and there is in our juris-
prudence a clear restraint upon the debtor's right of
alienation, where it is attempted to be exercised for the
purpose of hindering, delaying, or defrauding his creditors,
or defeating their lawful right to subject his property by
legal process to the satisfaction of their lawful demands.
The cardinal principle running through all such cases is,
that the property of the debtor shall not be diverted from
the payment of his debts, to the injury of his creditors by
means of the fraud.4 The law does not restrain a man's
dominion over his own property so long as he acts with

Trinity Church, 24 Wend. (N. V.) W. Rep. 732, the court say: " But

611; Blatter of Department of Parks, when a debtor lias incurred debts on

7:; N. Y. 560; Dawley v. Brown, 7!) the strength of his being the owner

N. Y. 390; Williams v. Rawlins, 33 of certain property, his creditors have

Ga. 117. an equitable claim thereon, and may

[bid. insist that lie use ins property honestly

Potter v. Gracie, 58 Ala. 303; and fairly, ami without any intention

Sherman v. Barrett, 1 McMull. (8. C.) of hindering and delaying them in the

Law 117. collection of their claims."

•Seymour \. Wilson, L9 N. Y. 418; «Clements v. Moore, (i Wall. 812-

In Beels \. Plynn, 28 Neb. 580, H N. TlM.nii.kin> v. Sprout, 55 CaL 36.

§14 RESTRAINTS UPON ALIENATION. 33

fairness and good faith; but it avoids all fraudulent
alienations devised to secure property from the pursuit of
his creditors ; it is fraudulent to defeat them by a reserva-
tion of benefit to himself; it is equally fraudulent to de-
feat them by benefactions conferred upon others.1

" The current of law," says Professor Gray,2 " has for
centuries been in favor of the removal of old restraints on
alienation ; in favor of the disallowance of new ones ; and
especially in favor of compelling a debtor to apply to his
debts all property which he could use for himself or give
at his pleasure to others. The legislatures and the courts
have co-operated to this end. Family and ecclesiastical
pride, natural dishonesty, and narrow precedents have
been formidable obstacles to this movement, but its general
success has been unmistakable." The debtor must devote
all his property absolutely to the payment of his debts ;
reserve no control for himself;5 provide for no benefit
to himself,4 other than what may result from the payment
of his debts ; impose no condition upon the right of the
creditors to participate in the fund ; authorize no delay
on the part of the trustee.5 A debtor may be said to sus-
tain two distinct relations to his property : that of owner
and quasi trustee for his creditors. As owner he may
contract debts to be satisfied out of his property, create
liens upon it, and sell or give it to others at pleasure, and,
as we shall presently see, so far as he is personally con-
cerned, he will be bound by his own acts. The law, how-
ever, lays upon him an obligation to pay his debts, and in

•Lockhard v. Beckley, 10 W. Va. 436; Fisher v. Henderson, 8 N. B. K

96; Hunters v. Waite, 3 Gratt. (Va.) 26. 175; .Means v. Dowd, 128 O. S. 381, 9

2 Restraints on the Alienation of S. C. Rep. 65.

Property, by John Chipman Gray, *See Lukins v. Ainl, 6 Wall. 79;

Esq., Story Professor of Law in Har- Wooten v. (lark. 28 Miss. 75; Arthur

Sard University. v. Com. & R. Bank, IT Mi-s. :;'.il ;

3 West v. Snodgrass, 17 Ala, 554; Towle v. Hoit, 11 N. H. 61.

Riggs v. Murray, 2 Johns. Ch. (N. Y.) 501iver I <& Co.'a Bank v. Tal-

565; Donovan v. Dunning, 69 Mo. cott, 19 N. V. 148.

J4 FRAUDULENT CONVEYANCES. § IS

behalf of his creditors holds him to the exercise of good
faith in all transactions relating to the fund upon which
they necessarily depend for payment. The debtor, there-
fore, cannot be permitted to create fictitious debts, or to
do any of the acts specified mala fide to the prejudice of
his creditors.

^ 15. Fraudulent conveyances — Characteristics and
classes. — A fraudulent conveyance may be defined to be
a conveyance the object, tendency, or effect of which is
to defraud another, or the intent of which is to avoid some
duty or debt due by or incumbent upon the party making
it.1 As was said by Lord Mansfield in Cadogan v. Ken-
nett:2 "The question in every case is, whether the act
done is a bona fide transaction, or whether it is a trick and
contrivance to defeat creditors." The same test has been
referred to as decisive by Mr. Justice Story3 and Chief-
Justice Marshall.4 As we shall presently see, to consti-
tute such a disposition of property, three elements must
concur — first, the thing disposed of must be of value, out
of which the creditor could have realized all or a portion
of his claim ; second, it must be transferred or disposed of
by the debtor ; and third, this must be done with intent to
defraud.5 Stated in another form : in order to bring a

Si • 3 K< Qt's I "in. 440 . J M. 402. 4 Unite! States v. Hooe, 3 Cranch,
" One of the suresl fcesteof a fraudu- 73. "The test as to whether aeon-
lent conveyance is thai it reserves to veyance is fraudulent or void as to a
the grantor an advantage inconsistent creditor is, dors it binder him in en-
witb its avowed purpose, or an un- forcing • liis deht? Does it deprive him
usual indulgence." Thompson v. of aright which would be legally ef-
FniT. 57 Miss. 484; see Bent/, v. fective if the conveyance or device
EJockey, 69 Pa. St. ?i ; Edwards had no! been resorted to?" Wagner
v. Stinson, 59 Ga, 443; Mitchell v. v. Smith, 13 B. J. Lea (Tenn.) 569.
Stetson, 64 Ga. 143. Such, for in- Hoyl v. Godfrey, 88 N. Y. 669.
stance, as a support. Graves v. Bl<>n- S<-<- I'lornne Sewing Machine Co. v.
dell, 70 Me. 194; Benry v. Binman, Zeigler, 58 \la. 224; Blake v. Bois-
25 Minn. 199; Young v. Beermans, joli, 51 Minn. 296,53 X. W. Rep. 637.
66 N. Y. 374. See Baldwin v. Rogers, 29 Minn. 544,
»wp. 434. 11 N. w. Rep. 77. See § 23.
I (j, Jur. .' 353.

§ 15 FRAUDULENT CONVEX \\( IS. 35

case within the terms of the statute, there must exist
a creditor to be defrauded, a debtor intending to defraud,
and a conveyance of property which is appropriable by
law to the payment of the debt due.1 Usually, to avoid
the transaction there must be some interest in the prop-
erty left in the debtor ;~ some reservation inconsistent
with a true sale ; or some hiding or cloaking of the
surplus so as to cover it up for the benefit of the
debtor or his family.3 Whether a conveyance be
fraudulent or not, as against creditors, depends on
whether it was made on good consideration and
bona fide. It is not enough that it be on good con-
sideration or bona fide; it must be both. If it be
defective in either particular, though good between the
parties and their representatives, it is voidable as to
creditors.4 It has been observed that to avoid a fraud-
ulent transfer three things are necessary : Fraud on the
part of the vendor ; fraud on the part of the vendee ; and
an injury to the party complaining.5 This, as we shall
see, is too general a statement, for in certain cases of
voluntary alienations proof of actual participation in the
fraud by the vendee is not essential to annul the trans-
action. Again, these covinous alienations with respect
to the rights of the creditors, existing and subsequent,
and the character of the debtor's interest, are divisible
into three classes. (1). Where a debtor conveys a title
in fraud of creditors. (2). Where a person not indebted
alienates property with the intention to defraud future
creditors. (3). Where the property is paid for by the

1 O'Connor v. Ward, 60 Miss. 1036. Monell, 19 Hun (N. Y.)362 : Young \

2 Means v. Dowd, 128 U. S. 281, 9 Willis, 82 Va. 396.

S. C. Rep. 65 : Young v. Willis, 82 Va. * Randall v. Vx l, 30 N. J. Eq

296 ; . McCormick v. Atkinson, 78 Va. 358; 1 Story's Eq. Jur. : 353 . Sayre v.

8; Wray v. Davenport, 79 Va. 19. Fredericks, L6 X. J. Eq. 205; Smith

3 See Hobbs v. Davis, 50 Ga. 214; v. Muirheid. 34 X. J. Eq. 6.

Price v. Pitzer, 44 Md. 527; Todd v. 5Guidry v. Grivot, 2 Martin X. s.

(La.) 13

6 STATUTES DECLARATORY OF THE COMMON LAW. § 16

debtor, but the conveyance is taken in the name of a
third part)'. Dillon, J., observed: "Any instrument is
fraudulent which is a mere trick or sham contrivance, or
which originates in bad motives or intentions, that is
made and received for the purpose of warding off other
creditors."1 In another case ~ this language may be
quoted : " Whether the contract be oral or in writing ;
whether executed by the parties with all the solemnities
of deeds by seal and acknowledgment ; whether in form
of the judgment of a court, stamped with judicial sanc-
tion, or carried out by the device of a corporation
organized with all the forms and requirements demanded
by the statute in that regard, if it be contaminated with
the vice of fraud the law declares it to be a nullity.
Deeds, obligations, contracts, judgments, and even cor-
porate bodies may be the instruments through which
parties may obtain the most unrighteous advantages.
All such devices and instruments have been resorted to
to cover up fraud, but whenever the law is invoked all
such instruments are declared nullities ; they are a perfect
dead letter ; the law looks upon them as if they had never
been executed. They can never be justified or sanctified
by any new shape or cover, by forms or recitals, by cov-
enants or sanctions which the ingenuity, or skill, or
genius of the rogue may devise.-' In a case before the
Supreme Court of Maine it is said that "a fraudulent
transfer, however perfect in form, is void " as to creditors.3

§ 16. Fraudulent conveyances at common law — Statutes
declaratory.— By the rules of the common law all convey-
ances made in fraud of creditors were regarded as voida-
ble at the instance and suit of such creditors.4 The

Bughes v. Cory, 20 Iowa, 105. 'See notes t<> Twyne's Case (8

Booth v. Bunce, 38 N Y". 156. Rep. 80), 1 Smith's Leading Cases 1.

'Skowhegan Bank v. Cutler, 4!) continued from 186<j to 1879, in 18

Me. 8 American Law Register N. S. 187;

c? 1 6 STATUTES DECLARATORY OF THE COMMON LAW.

37

famous statutes of Elizabeth, to be presently considered,
avoiding fraudulent conveyances, were merely declaratory
of the common law j1 the same result would have been
worked out without the aid of the statutes.2 The stat-
utes were not necessary to this result ;:f but are to be re-
ceived when such transfers are brought in question only
as a true and accurate declaration of the common law.'

Cadogan v. Kennett, 2 Covvper, 432 ;
Curtis v. Leavitt, 15 N. Y. 124 ; Cle-
ments v. Moore, 6 Wall. 299, 312 ; Nel-
lis v. Clark, 20 Wend. (N. Y.) 27;
Black man v. Wheaton, 13 Minn. 326 ;
Stoddard v. Butler, 20 Wend. (N. Y.)
516 ; Clark v. Douglass, 62 Pa. St 416 ;
Brice v. Myers, 5 Ohio, 121 ; Baker v.
Humphrey, 101 U. S. 499; Hamilton
v. Russel, 1 Cranch, 310. In Califor-
nia a sale of this character is held to
be absolutely void. Mason v. Vestal,
88 Cal. 396,26Pac. Rep. 213; Tapscott
v. Lyon, 103 Cal. 310, 37 Pac. Rep. 225.

1 Clements v. Moore, 6 Wall. 312 ;
Davis v. Turner, 4 Gratt. (Va.) 429.
See §§ 18-21.

2 Cadogan v. Kennett, 2 Cowp. 432.

3 Baker v. Humphrey. 101 U. S.
499 ; Clements v. Moore. 6 Wall. 299.

4 Clark v. Douglass, 62 Pa. St. 416 ;
Rickards v. Attorney Genl., 12 CI. &
F. 44. See Barton v. Vanheythuysen,
11 Hare, 126-132 ; Ryall v. Rolle, 1
Atk. 178 ; TJtterson v. Vernon, 3 T. It.
546. In Gardner v. Cole, 21 Iowa,
209, Dillon, J., after remarking that
the statutes 13 Eliz. and 27 Eliz. had
never been legislatively re-enacted in
Iowa, said : " But antedating as these
statutes do the settlement of this
country, and being mainly, if not
wholly, declaratory of the common
law, which sets a face of flint againsl
frauds in every shape, they constitute
the basis of American jurisprudence
on these subjects, and are, in this
State, part of the unwritten law."
In McClellen v. Pyeatt, 32 U. S. App.

104, 107, Sanborn, J., says : "On Maj 2,
1890, then, for the firsl time in tin1
Indian Territory, the law declares
that a voluntary conveyance bj a
debtor to delay or defraud his credit-
ors ' shall be void.' In the absence
of such a statute it was perfectly com-
petent for an insolvent debtor to give
his property to his wife or to his friend,
and thus to deprive his creditors of an
opportunity to enforce the collection
of their claims from any of his prop
erty upon which they had fasti ned no
liens. The debtor's right of disposi
tion was unrestricted in tins respect,
and it was undoubtedly the frauds
that this condition of the law per-
mitted that originally induced the
enactment of the statute 13 Elizabeth
in England, and the adoption of the
provisions of that statute in the vari-
ous States of this Nation." Certainly
this statement ignores the settled doe-
trine that the statute of Elizabeth is
merely declaratory of the common
law, and that the same result could
have been worked out without the
enactment of this famous statute.
Experience has shown that the pro
mulgation by statutory enactment of
a well formulated principle of the
common law has a salutary influence
in enforcing an observance of what
was theretofore the unwritten law.
Perhaps it may he argued in the case
just quoted that the common law did
prevail in the Indian Territory, but
the conclusion of the COUrl is not
founded upon that theory.

38 STATUTES DECLARATORY OF THE COMMON LAW. § 16

Lord Coke1 comments on the word "declare" in the
statute as showing that this was the case, and Lord
Mansfield, in Cadogan v. Kennett,'-' said that " the prin-
ciple and rules of the common law, as now universally
known and understood, are so strong- against fraud in
every shape, that the common law would have attained
every end proposed by the statutes 13 Eliz. c. 5 and 27
Eliz. c. 4."3 And Chancellor Kent asserted that the
" statute of Elizabeth " was " only in affirmance of the
principles of the common law."4 This feature of our
jurisprudence is of the highest importance, and creditors
are justified in invoking it in cases where it is sought to
defeat their claims as not coming exactly within the pre-
cise wording of the statute avoiding a particular kind of
transfer. The flexible principles of the common law sup-
plement and support the technical framework of the
statute, and constitute the deep and broad foundation
upon which the creditor's rights are founded. The mere
omission of a provision embracing "goods, chattels, and
things in action," from a section of the statute declaring
void conveyances and assignments of estates or interests
in land, made with intent to hinder, delay, or defraud
creditors, will not be construed to be a repeal of the
common-law rule which renders a conveyance of goods
and chattels, made with such intent, fraudulent and void
as to creditors.5 In Fox v. Hills,0 the statute concern-
ing fraudulent conveyances was construed not to compre-
hend claims founded on tort, but it appearing that a vol-

1 Co. Litt. 76a, 290b; Twyne's Case, equity is that a provision lor die wife,

3 Rep. 82b (2 < Soke, 219). contrived t<> conceal the means of the

■.* Cowp. 434 husband from his creditors by placing

S.c Clements v. Moore, 6 Wall, the ostensible title in her, though not

299 , Staiin v. Kelly, ss N. V. 421. within the statute of Iran. Is, is void as

* Sands v. Cod wise, 4 Johns. (N. Y.) to creditors, by the unwritten law."

508 1 Am. Dee. 313. Bernheim v. Beer, 56 .Miss. 151.

Blackman v. Wheaton, 13 .Minn. 6 1 Conn. 298.
331. "The principle of the courl of

§ l6 STATUTES DECLARATORY OF THE COMMON LAW. 39

untary deed had been given to avoid such a claim, the
instrument was promptly adjudged void at common law
as to the creditor. In Lillard v. McGee,1 which was a
suit to set aside a conveyance at the instance of a creditor
whose claim was a judgment for damages in an action of
slander, the court said : " Fraud is one of the main pillars
of the jurisdiction of a court of equity, and there is no
question of its competency, prior to the statute, to give
relief in a case of this sort. Now as the statute is made
in affirmance, not in derogation of the common law, it
cannot have the effect of taking from a court of equity its
jurisdiction ; for it is a settled rule that an affirmative
statute does not repeal the common law."

"The common law of England,"3 says Roberts,
" abhors every species of covin and collusion ; but being
tender of presuming fraud from circumstances, statutes
have been specially framed to suit the exigencies of the
times,3 which are as fertile in the artifices of concealment
as in the opportunities of deceit. It was the prevention
and not the punishment of fraud in which the common
law was defective, for there is no instrument or act which
is not liable by the law of this country to be rendered
absolutely void by clear and explicit evidence of fraud-
ulent intention. So general, indeed, is the condemnation
of all fraudulent acts by the law of England, that a
fraudulent estate is said, in the masculine language of
the books, to be no estate in the judgment of the law,"

These words are employed in Alabama: "The right
of the creditor to subject property of his debtor, fraud-
ulently conveyed, is founded in that principle of the
common law which enjoins integrity as a virtue para-
mount to generosity." 4

1 4 Bibb (Ky.) 1G6 temporibus sunt inhonesta, Cic. de < >il\

2 Roberts on Fraudulent Convey- lib. 3.

ances (ed. 1807), p. 120. 'Planters & Merchants' Bank v.

3 Qute natura videnturhonestaesse, Walker, 7 Ala. 946.

40 COVINOUS TRANSFERS OF CHOSES IN ACTION'. § 17

§ 17. Covinous transfers of choses in action. — By the law
of England, before the American Revolution, as estab-
lished by decisions of Fortescue, M. R., Lord Hardwicke,
and Lord Northington, fraudulent conveyances of choses
in action, though not specified in the statute, were void-
able equally with transfers of tangible assets, but from
the nature of the subject-matter the remedy of the credit-
ors must be sought in equity.1

Gray, C. J., in the opinion in Drake v. Rice,~ says:
"Of the only case before our Revolution cited in the
learned argument for the claimant, we have but this brief
note : ' A man, being much in debt, six hours before his
decease gives ^600 for the benefit of his younger children ;
this is not fraudulent as against creditors ; though it
would have been so of a real estate, or chattel real.'3
The report, having been published in 1740, cannot have
been unknown to the eminent English judges who made
the decisions already cited ; and, as observed by Lord
Redesdale, the book is anonymous and of not much
authority.4 The opinions of the English and Irish
courts of chancery since our Revolution, cited for the
claimant, cannot outweigh the cases above referred to, as
evidence of the law of England at the time of the sepa
ration of the colonies from the mother country. In the
case at bar, it is agreed that the law of New York
respecting fraudulent conveyances is the same as the
common law and the law of Massachusetts ; and that by
the law of New York choses in action, although they

■Drake v. Rice, 130 Mass. 410; 18 N. H. 109 ; Sargent v. Salmond, 27

Taylor v. Jones, 2 Atk.600; King v. Me. 539. See § 33, and cases cited.

Dupine, 2 \\k. 608, note: Horn v. * 130 Mass. U3.

Horn, Ajnbler, 79; Etyall \. Rolle, 1 Duffin v. Furness. Sel. ("as. Ch.

AiL. 166, 1 Ves. Sen. 348; Partridge 216.

\. Qopp, 1 Eden, 163, Aml.l. 596; » Barstow v. Kilvington, 5 Ves. 593,

i Hoffman, 1 Johns. Ch. 598; Hovenden v. Lord A.nnesley, 2

(N. Y 150; Hadden v. Spader, 20 Sch. & Lef . 607, 634.
Jol,,,-, (N. Y.i.Vil : Abbotl v. Tenney,

§ 18 i .Alii \ STAT1 i i:s. 1 1

cannot be attached or levied upon, yet may, after exe< u-
tion issued on a judgment at law, be reached by proceed-
ings before a magistrate in the nature of proceedings
under the poor debtor acts of this commonwealth, and by
the appointment of a receiver to take and dispose of the
debtor's property."1

§ 18. Early statutes avoiding fraudulent conveyances. —
The widely known statute, 13 Eliz. c. 5 (1570), perpetu-
ated by 29 Eliz. c. 5 (1587), was not, by any means, as
many suppose, the first legislative attempt to formulate
and declare the principles of the common law on this sub-
ject, or to repress covinous transfers by statutory enact-
ment. By 3 Hen. VII. c. 4 (1487), "all deeds of gift of
goods and chattels made or to be made of trust to the use
of the person or persons that made the same deed of
gift," are declared "void and of none effect." And the
prior act of 50 Edw. III. c. 6 (1376), reads as follows :
" Divers people .... do give their tenements and
chattels to their friends, by collusion to have the profits
at their will, and after do flee to the franchise of West-
minster, of St. Martin-le-Grand of London, or other such
privileged places, and there do live a great time with an
high countenance of another man's goods and profits of
the said tenements and chattels, till the said cred-
itors shall be bound to take a small parcel of their
debt, and release the remnant, it is ordained and
assented, that if it be found that such gifts be so
made by collusion, that the said creditors shall have exe-
cution of the said tenements and chattels as if no such
gift had been made." The statute, 2 Rich. II., stat. 2,
c. 3 (1379), contained provisions on the same subject, and
from its recitals was evidently framed to repress the hypo-

]See Donovan v. Finn, 1 Hopkins' especially the Learned note a< page
Ch. <N. Y.) 59, 14 Am. Dec. 531, 542. See § 33.

EARLY STATUTES.

§ 18

critical religious zeal of fraudulent debtors,1 and to fur-
nish a method of substituted service of process.2 The
quaint provisions of these early statutes show conclusively
that fraudulent conveyances are not entirely the offspring
of our modern civilization. Fraud, which the common
law so greatly-abhorred, was so much practiced by debtors
upon creditors in early times as to attract the attention of
Parliament, and to constitute a subject of frequent legis-
lation. " These statutes," said Lord Mansfield, " cannot
receive too liberal a construction, or be too much extended
in suppression of fraud."3 It maybe observed in explana-
tion of this early legislation against fraudulent transfers
that these statutes were enacted to more clearly formu-
late the common law, with a view to suppress voluntary
conveyances and secret trusts made by debtors who had
escaped arrest for debt, or avoided service of process by
fleeing to sanctuaries or holy ground. The number of

1 " Item, in ease of debt, where the
debtors make feigned gifts and feoff-
ments of their goods and lands to
their friends and others, and after
withdraw themselves, and flee into
places of holy church privileged, and
there hold them a long time, and take
the profit of their said lands and goods
so given by fraud anil collusion,
whereby their creditors have been
long and yel Ik- delayed of their debts
and recovery, wrongfully and against
good faith and reason ; it is ordained

and established, That after that the said

creditors have thereof broughl their
writs of debt, and thereupon a capias

au aided, and the slierill' shall make
bis return that he hath not taken the
-aid persons because of sneh places
privileged in which they lie or shall

!»■ entered, then .... another

writ shall he granted .... that

proclamation be made openly at the

i if i he place so privileged, where
uch persons be entered, bj five weeks

continually, every week once, that
the same person be at a certain day,
. . . . before the King's justices,
and .... if the said persons called
come not .... judgment shall be
given against them upon the principal

for their default Executions

shall be made of their goods and lands,
being out of the place privileged, as
well, that is to say, of those lands and
goods so given by collusion, as of any
other out of the same franchise, after
that such collusion or fraud be duly
found in the same manner as that
ought to have been, if no devise bad
been thereof made, notwithstanding

the same devise."

2 By a Manx statute " all fraudu-
lent assignments, or transfers of the
debtor's goods or effects, shall be void,
and of no effect against bis just cred-
itors." Mills' Statute Law of Isle of
.Manx, p. 238. Corlett v. Radcliffe, 1 1
.Moo. P. C. 121-132.

sCadogan v. Kennett, Cowp. 434.

§ 19 STATUTE [3 ELIZABETH. 43

these conveyances, however, was comparatively small, and
their appearance is said to have been spasmodic and pre
mature, and " far in advance of the time for their normal
natural development." Sanctuaries, or cities of refuge
for fraudulent and absconded debtors, do not seem to
have been wholly abolished until during the reign of
James I., and one such sanctuary, the noted White-friars
which flourished in the reign of that monarch, has been
immortalized by Sir Walter Scott in his " Fortunes of
Nigel." »

§ 19. Statute 13 Eliz. c. 5, and its object. — This statute
was passed for the protection of creditors, and is the great
model which has been re-enacted in substance, or copied
wherever Anglican law prevails. It was, in its perfected
form, an offspring of the brilliant Elizabethan age, and
adds to the lustre of the achievements of that unsurpassed
period of the world's development. The leading object
of the statute was to prevent those collusive transfers of
legal ownership which place the property of a man
indebted out of the reach of his bona fide creditors, and
leave to him the beneficial enjoyment of that which ought
in conscience to be open to their legal remedies.' It was
meant to prevent deeds " fraudulent in their concoction,"
says Lord Ellenborough/' By its provisions all convey-
ances and dispositions of property, real or personal, made
with the intention of defrauding creditors, are declared to
be null and void as against the creditors.4 Mr. Reeves
says that several acts had been formerly passed on the
subject of fraudulent conveyances, "but none of them had
gone so far" as the statutes 13 Eliz. and 27 Eliz. "to

1 Essay by John Reynolds, Esq., on 2 Roberts on Fraudulent Convey-
Fraudulent Conveyances, etc., read ances, p. 554.

before New York State Bar Associa- :1 Meux v. Howell, I East, 1 I See
tion, Nov. 18, 1879. Moore v. Hinnant. 89 N. C. 159.

4 See Drake v. Rice, 130 Mass. 410.

44

STA fUTE 13 ELIZABETH.

19

restrain these feigned gifts." 1 Mr. Justice Story observes
that this statute (13 Eliz.) "has been universally adopted
in America as the basis of our jurisprudence " upon the
subject.2 It maybe found enacted almost intact in many
of our statute-books, and is still popularly called " the
statute of Elizabeth," just as statutory remedies for the
trial of title to real property are known by the familiar
title of ejectment. Professor Pomeroy says:3 "The
operative statute in England, which is also the basis of
all legislation and judicial decision in the United States,
is the celebrated act 13 Eliz. c. 5." The historic name of
the eccentric, but fortunate, queen is constantly linked
with the struggles of creditors to enforce the payment of
honest demands. The general interpretation placed upon
the statute of Elizabeth is well illustrated in an import-
ant case in Maine,4 in which the court say : " We derived
our law in relation to conveyances fraudulent as to credit-
ors, from the stat. 13 Eliz. c. 5, which has been adopted
here as common law.5 This statute, declaring that con-
veyances made with intent to ' delay, hinder, or defraud
creditors,' shall be ' deemed and taken (only as against
creditors, etc.) to be clearly and utterly void, frustrate,
and of none effect,' has been invariably construed as
plainly implying that they are valid as between the par-

1 5 Reeves' Bisk Eng. Law. pp. ^44,
345.

'-' Story's Eq. Jur. ? 353. In Peters
v. Bain, 133 D. S.685, 108. C. Rep. 354,
Chief Justice Fuller says: "The
statute of Elizabeth, <•. •">. againsl
fraudulent conveyances has been uni-
versally adopted in American law as
the basis of our jurisprudence on thai
subject (Story Eq. Jur. sj 353), and
re-enacted in terms, or nearly so, or
with some change of language, l>y
the legislatures of the several states.'"

In Clements v. Moore, 6 Wall. 312, the
court say : "The statute of the 13th
Elizabeth has been substantially enac-
ted in Texas." The statutes of Eliza-
beth for the prevention of fraudulent
conveyances, are in full force in the
1 hstrict of Columbia, and stood with-
out a single amendment until Feb.
24,1893. Kansas City PackingCo. v.
Hoover, 1 I). C. Ct. Ap|). 270.

8 2 Pom. Eq. § 968.

' Butler \. Moore, 7:5 Me. 154.

j Howe v. Ward, 1 Me. 196. 199.

§ 2°

STATUTE [3 1.1.1/ \ r,l III.

43

ties and their representatives;1 and can be avoided only
by creditors on due proceedings ; ~ or their representa-
tives, such as assignees in bankruptcy or insolvency of
the grantor,3 and the executors or administrators of grant-
ors since deceased whose estates have been declared
insolvent.4 And notwithstanding the words ' utterly void,'
etc., applied to such conveyances, they are not, even as
to creditors, void but voidable;5 and all the courts con-
cur in holding that if the fraudulent grantee convey the
premises to a bona fide purchaser for a valuable considera-
tion before the creditor moves to impeach the original
conveyance, the purchaser's title cannot be disturbed."0

§20. Its interpretation and construction.— " Notwithstand-
ing," says Mr. Roberts, u these laws are greatly penal, the
rule still holds of p-ivino; them an extended and liberal
exposition."7 Statutes in suppression of deceit and covin
should be equitably expounded, although they are highly
penal.8 In McCulloch v. Hutchinson,9 Sergeant, J., said :

1 Nichols v. Patten. 18 Me. 231 ; An-
drews v. Marshall, 43 Me. 274 ; Ben-
jamin on Sales, 3d Am. ed., p. 476,
and note.

8 Miller v. Miller, 23 Me. 22; Thorn p-
son v. Moore. 36 Me. 47 ; Stone v.
Locke, 46 Me. 445.

3 Freeland v. Freeland, 102 Mass.
475, 477.

4 McLean v. Weeks, 65 Me. 411, 418.

5 Andrews v. Marshall, 43 Me. 272.

6 Neal v. Williams, 18 Me. 391 ;
Hoffman v. Nohle. 6 Met, (Mass ) 68 ;
Bradley v. Ohear. 10 N. H. 477.

'• Roberts on Fraudulent Convey-
ances, p. 542. In hits enim quaesunt
favorabilia animce, quamvis sunt
damnosa rebus, fiat aliquando extensio
statuti. In Riggs v. Palmer, 115
N. Y. 511, Karl, J., says : " All laws,
as well as all contracts, may be con-
trolled in their operation and effect
by general, fundamental maxims of

the common law. No one shall l»'
permitted to profit by bis own fraud,
or to take ad vantage of his own wrong,
or to found any claim upon bis own
iniquity, or to acquire property by bis
own crime. These maxims are dic-
tated by public policy, have their
foundation in universal law adminis-
tered in all civilized countries, and
have nowhere been superseded by
statutes. They were applied in tin'
decision of the case of the New York
Mutual Life Insurance Company v.
Armstrong (117 U. S. 591). There it
wa> held that the person who pro-
cured a policy upon the life of another,
payable at bis death, and then mur-
dered the assured to make the policy
payable, could not recover thereon "

n Wimbish v. Tailbois, Plowd. < lorn,
59. Sec Roy v. Bishop of Norwich,
Hob. 75: Brice v. Myers, 5 Ohio, 128,

"7 Watts (Pa.) 435.

46

STATUTE 13 ELIZABETH.

§20

" The statutes on this subject are liberally expounded for
the protection of creditors, and to meet the schemes and
devices by which a fair exterior may be given to that
which is in reality collusive." 1 " The statute," says Allen,
[., " has always had a liberal interpretation for the preven-
tion of frauds."2 The law "loves honesty and fair deal-
ing," and " so construes liberally statutes to suppress
frauds,3 as far as they annul the fraudulent transaction."4
As early as Twyne's Case,5 it was resolved that " because
fraud and deceit abound in these days more than in former

times all statutes made against fraud should

be liberally and beneficially expounded to suppress the

1 See Cadogan v. Kennett, 2 Cowp.
432 ; Gooch's Case, 5 Rep. 60 (3 Coke,
121) : Allen v. Rundle, 50 Conn. 31.

Young v. Heernians, 66 N. Y. 383.
See Pennington v. Seal, 49 Miss. 525.
An innocent construction of an in-
strument will be favored in prefer-
ence to one that will impute a fraudu-
lent intent. Roberts v. Buckley, 145
N. Y. 21o-224, 39 N. E. Rep. 966.

'Citing Twyne's Case, 3 Rep. 80b
(2 Coke, 212); Cadogan v. Kennett,
2 Cowp. 432-434.

4 Bishop on the Written Laws,
§ 192. "Statutes against frauds are
to be liberally and beneficially ex-
pounded. This may seem a contra-
diction to the last ride [that penal
statutes are to be construed strictly] ;
mosl statutes against frauds being in
their consequences penal. But this
difference is here to be taken : where

the statute acts upon tl ffender and

inflicts a penalty, as a pillory or a fine,
it ie then to be taken strictly : but
when the statute acts upon the offense,
by setting aside the fraudulent trans
action, here it is to be construed lib-
erally." 1 HI. <om. 88. See Carey v.
< tiles, 9 < la. 253 ; < Summing \ Fryer,
Dudley iCa.i 182 ; Ellis v. Whitlock,
10 Mo. 781. In Riggs \. Palmer, 115

N. Y. 510, 22 N. E. Rep. 188, the court
say : " Such a construction ought to
be put upon a statute as will best an-
swer the intention which the makers
had in view, for qui hceret in litera,
turret i» corticc." In People v. Cren-
nan, 141 N. Y. 241, this language is
used, "whatever is necessarily im-
plied in a statute is just as much a
part thereof as if written therein."
See People v. Utica Ins. Co., 15 Johns.
(N. Y.) 358. In construing statutes,
it is a well established rule that resort
must be had to the natural significa-
tion of the words employed, and if
they have a definite meaning, which
involves no absurdity or contradic-
tion, there is no room for construction,
and courts have no right to add or
take away from that meaning. Tomp-
kins v. Hunter. 149 N. Y. 122, citing
Newell v. People, 7 N. Y. 9, 97: Mc-
Cluskey v. Cromwell, 11 N. Y. 593,
mil ; People v. Woodruff, 32N.Y. 355,
364; Matter of Miller. 110 N. Y. 216.
A statute will be held to abrogate the
common law only in so far as the clear
import of the language absolutely re-
quires it. Fitzgerald v. Quann, 109
X. V. 441.
5 3 Rep. 82a (2 Coke, 219).

§21 . STATUTE 27 ELIZABETH. 47

fraud." It may be suggested that, in construing statutes
to prevent frauds, suppress public wrongs, or effect a pub-
lic good, — objects which the law favors, — there is a pres-
sure toward a liberal interpretation ; but if they also
provide a penalty, which is a thing odious to the law,
there is another pressure toward the strict rule ; so the
balance may be in equipoise, or the one scale or the other
may preponderate, according to the special circumstances
of the case, or the views of the particular judge.1

The provisions of the statute are considered to be so
plain that "he that runs may read." 3 In Federal tri-
bunals, and in the Supreme Court of the United States,
in controversies arising under this statute, involving as
they do, the rights of creditors locally, and a rule of
property, the conclusions of the highest judicial tribunal
of the State are accepted as controlling.3

§21. Statute 27 Eliz c. 4. — This statute was enacted in
favor of purchasers, and renders void, as against subse-
quent purchasers of the same land, all conveyances, etc.,
made with the intention of defeating them,4 or contain-
ing a power of revocation. Mr. May observes5 that " in
one respect, however, both these statutes were moulded
in strict conformity with the rules of the common law ;
for if 'simplicity was the striking feature of the common

'Compare Taylor v. United States, See Savage v. Knight, 92 N. < '.

3 How. 197; Fairbanks v. Antrim, 2 497.

N. H. 105; Abbott v. Wood, 22 Me. Peters v. Bain, 133 U. S 686, 10 S.

541; Sickles v. Sharp, 13 Jobns. (N. C. Rep. 354, citing Jaffraj y.McGehee,

Y.)497; Van Valkenburgh v. Torrey, 107 U. S. 361, 364, 2 S. < '. Rep. 361 .

7 Cow. (N. Y.) 252 In construction Lloyd v. Fulton, 91 U. S. 179, 185;

the courts will strive "to make atone- Allen v. Massey, 17 Wall. 351
nient and peace among the words." 4See Anderson v. Etter, 102 lud.

It may be recalled that an assignment 120. Compare Cathcarl v. Robinson,

is to be construed like any other con- 5 Pet. 264; Pence v. (roan. 51 End.

tract. Crook v. Rindskopf, 105 N. Y. 336.

476-485, 12 N. E. Eep. 174. 5 May on Fraudulent Conveyances

(London, 1871), p. 3.

48 I W \ NE'S CASE. § 22

law,' 1 it was, in an almost equal degree, the chief feature
of the statutes of Elizabeth, which are couched in very
general terms, so as to include, and allow their applica-
tion by the courts to any fraudulent contrivances to
which the fertility of man's imagination might have
resorted, as a means of eluding a more precise and inflex-
ible law." "'

§ 22. Twyne's Case.y — This celebrated case is the credit-
or's beacon-light in suits to annul covinous transfers.
The decision was promulgated in i6or, thirty years after
the enactment of the- statute 13 Eliz. c. 5. Brilliant
statesmanship and diplomacy, signal success in battle
against threatened foreign invasion, and the birth of
immortal literary and dramatic productions, were not the
only characteristics of this fascinating period in English
history. Evidently covinous dispositions of property
were at that time beginning to attract attention and be-
come troublesome, for, as already shown, it was resolved
that " because fraud and deceit abound in these days
more than in former times, all statutes made against
fraud should be liberally and beneficially expounded to
suppress the fraud." It appeared, in this case, that P. was

■Citing Sugden on Powers, Intro- any pretence, color, feigned considera-

duction, p. 1. tion, expressing of use, or any other

•As to the interpretation of these matter or thing to the contrary. By
statutes as applied to bona fide pur- the 27 Eliz. c. 4, conveyances made to
chasers, Bee Bean v, Smith, 2 Mason, defraud subsequent purchasers are
272, per Story.'J., reviewing Roberts declared void as to persons defrauded.
v. Anderson, 3 Johns. ( !h. (N. Y.) 371, In both Btatutes a penalty is provided
per Chancellor Kent. In Mulford v. for, which parties to such convey-
Peterson, 35 N. .1. Law. 133, the court ances, or such as are privy to or knpw-
Baid :" The statute, 13 Eliz. c. 5, makes ing of such fraud, incur, who shall
utterly void, frustrate, and of no ef- put in use or maintain, justify, or de-
fect, every feoffment, gift, grant, fend, such conveyances as made bona
alienation, bargain, and conveyance fide or upon good consideration."

of lands, tenements, g Is, and chat- 3 Rep. 80 (2 Coke, 212); 1 Smith's

tela, oranj of them, devised and con- Lea. Cas. 1, 18 Am. Law Reg. N. 8.

trived to delay, hinder, or defraud 137.
creditors, ae against such creditors,

§ 22 I W\ NE'S I \>i . 49

indebted to T. in ,£400, and was indebted also to C. in
,£200. C. brought an action of debt against P., and pend-
ing the writ P., being possessed of goods and chattels of
the value of ,£300, secretly made1 a general deed of gift
of all his goods and chattels, real and personal whatso-
ever, to T., in satisfaction of his debt; notwithstanding
which P. continued in possession of the goods, some of
which he sold again, sheared the sheep, and marked them
with his own mark. Afterwards C. had judgment against
P. and took out a fieri facias directed to the sheriff of
Southampton, who, by force of the writ, came to levy upon
the goods. Divers persons, by the command of T., resisted
the sheriff by force, claiming the goods as the goods of T.
by virtue of the gift ; and whether the gift, on the whole
matter, was a good gift, or fraudulent and void within the
13 Eliz. c. 5, was the question. It was determined by the
Lord Keeper of the Great Seal, by the Chief-Justices, and
by the whole Court of Star Chamber, that the gift was
fraudulent within the statute. And as the signs and
marks of fraud, it was said by the court : (1). That the gift
was general, without exception of the donor's apparel, or of
anything of necessity. (2). The donor continued in posses-
sion, and used the goods as his own ; and by means thereof
traded with others, and defrauded and deceived them. (3 )
It was made in secret. (4). It was made pending the writ.
(5). There was a trust between the parties ; for the donor
possessed all, and used them as his proper goods ; and fraud
is always apparelled and clad with a trust, and a trust is the
cover of fraud. (6). The deed expressed that the gift was
made honestly, truly and bona fide ; et clausula- inconsueta
semper inducunt suspicioncm.'1 This case is popularly

1 See Huntley v. Kingman, 152 U. Rep. 237. Lord Eldon, in Kidd v. Raw-

S. 533, 14 S. C. Rep. 688. linson, 2 Bos. <& P. 59, cited with ap-

- See Roberts on Fraudulent Con- proval from Buller'8 Nisi Prius, w here

veyances (ed. 1845), pp. 544, 545 ; Da- the following synopsis of Twyne's

vis v. Schwartz, 155 U. S. 639, 15 S. C. Case maj be found: "A., being in

4

5<d twyne's CASE. § 22

regarded as the fountain from which our modern law as
to fraudulent conveyances (lows, and the profession fre-
quently refer to and draw from it in preference to select-
ing from the "myriad of precedents" and "single
instances " which financial crises and the oreed of dishon-
est debtors have since called into being. The leading
doctrine taught by this case has been practically super-
seded in England, but it still holds a prominent place in
our jurisprudence. This may be likened to the use of
statutory real writs in parts of the United States after
their complete abandonment in the mother country.1
The exact point decided in Twyne's Case is that a con-
veyance by a debtor of tangible property, if actually
fraudulent, is void as to existing creditors. The impres-
sion that the principles of this case are sufficient to meet
the exigencies of our modern jurisprudence is clearly
erroneous. Though Twyne's Case has been characterized
as a " wonderful decision," and amazement has been
expressed that the question involved should have come
up for adjudication at such an early period, yet it must
be conceded that the facts of the case were too
restricted to enable the court to furnish rules suffi-
cient to answer all the varying imperative demands of
creditors at the present day. Since this great deci-
sion was rendered its principles have been extended, as
we shall presently see, to avoid covinous conveyances not

debtedtoB, hv£400, andtoC. in £200, within the proviso, for though it La

C. brings debt, and hanging the writ, made on a good consideration, yd it

A. makes ;i secrel conveyance of all is not bona fide. Bui ye1 the donoi

his goods and chattels to B. in satis- continuing in possession, is not in all

faction of Ids debt, bul continues in cases a mark of fraud; as where a

possession, and sells some, and sets donee lends Ins donor money to buy

his mark on other sheep; and it was goods, and at the same time takes a

hoi den to !»■ fraudulent within tins bill of sale of them for securing the

act; (1) because the gifl is general; money." Bull. Nisi Prius, p. 258.

-' the donor continued in possession 'See Sedg, & Wait on Trial of

and used them as his own ; (3) it was Title to Land, 2d ed<, £? 72-76, c. II.
made pending t he wril , and it is nol

§ 22 twyne's case. 51

only as to existing creditors, but in certain cases as to sub-
sequent creditors,1 and even as to contingent subsequent
creditors ;2 so it has been held to embrace creditors who
were suing the debtor for tort,:i as for slander,1 or assault
and battery,5 or the misapplication of trust moneys more
than fifteen years before the conveyance.0 The statutes
"are not limited in their operation by any Procrustean
formula." r The doctrine of the case has been enlarged
to cover transfers of intangible rights and choses in action,
such as stocks,8 transfer of an annuity,9 of a policy of life
insurance,10 of an equity of redemption,11 of certificates of
stock,1" of a legacy,13 insurance premiums,14 and all mere
choses in action.15 Even an allowance for support to a wife
under a judgment for a divorce maybe reached by her cred-
itors.10 Still Twyne's Case has taken deep hold in our law,
and the main principles that control the determination of
the different phases of fraudulent conveyances can gener-
ally be traced to this parent root. That the case should at

'See Laughton v. Harden, 68 Me. Hadden v. Spader, 20 Johns. (N. Y.)

212; Day v. Cooley, 118 Mass. 527. 554; Weed v. Pierce, 9 Cow. iN. Y.)

2 See Jackson v. Seward, 5 Cow. 723, per Chancellor Walworth; Ed-
(N. Y.) 71; Pennington v. Seal, 49 meston v. Lyde, 1 Paige (N. Y.) 641 .
Miss. 525; Hoffman v. Junk, 51 Wis. Beckwith v. Burrough, 14 R. I. 3(i<>.
614, 8 N. W. Rep. 493. See Chap. VI. ' Norcutt v. Dodd, 1 < !r. & I'M. 100.

3 See Post v. Stiger, 29 N. J. Eq. 10 Stokoe v. Cowan, 29 Beav. 637:
558: Weir v. Day, 57 Iowa, 87, ION. Skarf v. Soulby, 1 Macn. & (!. 364 .
W. Rep. 304 ; Langford v. Fly, 7 Hum. In re Trustee Relief Act, 5 DeC. & s.
(Tenn.) 585 ; Walradt v. Brown, 6 111. 1 ; Burton v. Farinholt, 86 N. C. 260
397; Gebhart v. Merfeld, 51 Md. 325: Mtna, Nat. Bank v. Manhattan Life
Cooke v. Cooke, 43 Md. 522; Fox v. Ins. Co., 24 Fed. Rep. 769.

Hills, 1 Conn. 295. » Sims v. Gaines, 64 Ala. 397.

4 Jackson v.Myers, 18 Johns. (N.Y.) '-Scott v. Indianapolis Wagon
425 ; Cooke v. Cooke, 43 Md. 531 ; Works, 48 Ind. 78.

Wilcox v. Fitch, 20 Johns. (N.Y.) 472. '• Bigelow v. Ayrault. 46 Barb. (N.

5 Ford v. Johnston, 7 Hun (N. Y.) Y.) 143.

567; Slater v. Sherman, 5 Bush (Ky.) " Mtna Nat. Hank v. United States

206. Life Ins. Co., 24 Fed. Rep. 770.

6Strong v. Strong, 18 Beav. 408. IB Greenwood v. Brodhead, 8 Barb.

1 Beckwith v. Burrough, 14 R.I. (N. Y.) 597 ; Drake v. Rice, 130 Mass

368. 410.

8 Bayard v. Hoffman, 4 Johns. Ch. "Stevenson v. Stevenson, 34 Bun

(N. Y.) 450, per Chancellor Kent; (N. Y.) 157.

5?

TWYNE S CASE.

^ 22

this late day be so widely cited and relied upon ] is con-
clusive proof that it embodies a forcible exposition of
sound and necessary rules affecting covinous transfers,
which neither lapse of time nor change in circumstances
can supersede. The case attains the same relative promi-
nence as a precedent in the authorities that is accorded to
the statute 13 Eliz. c. 5, as a model for modern legislative
enactments. It seems indeed strange that so many evi-
dences and badges of fraud, common with us now, should
have been concentrated in such an early case, and should
have been so swiftly and skilfully detected and labeled.
If the facts of this case are not partially fictitious, and
there is little reason to credit the intimation that they are,
then it follows that the methods and devices of the fraudu-
lent debtor have undergone few alterations since this
remarkable decision was promulgated.

1 In Davis v. Schwartz, 155 U. S.
638, 15 S. C. Rep. 237, Mr. Justice
Brown said: 'It lias been the accepted
la w ever since Twyne's Case, 3 Coke,
80, that good faith as well as a valua-
ble consideration is necessary to sup-
port a conveyance as against cred-
itors. In that case Pierce, being in-
debted to Twyne in £400, was sued
by a third party for £200. Pending
such suit lie conveyed all his prop-
erty to Twyne in consideration of
his debt, but continued in possession,
sold certain sheep and set his mark on
others. It was resolved to lie a fraud
ulent gift, though the deed declared
that it was tnsAe bona fide. Mosf of
the cases illustrative of this doctrine,
however, have been like that of
Twyne, wherein a debtor, knowing

thai an execution was to he taken out
against him. ha'l sold his property to
a vendee having knowledge of the

pet-. i"i the express purpose of
avoiding a levy, or receiving a con-
sidi ration which could not he reached
i,\ ex< cution. In such cases the facl

that he receives a good consideration
will not validate the transaction, un-
less at least the creditor has obtained
the benefit of the consideration. A
like principle applies where a mort-
gage is given and withheld from
record in order to give the mortgagor
a fictitious credit. Cadogan v. Ken-
net t, Cowp. 432; Blennerhassett v.
Sherman, 10."> U. S. 117; Sayre v.
Fredericks, 16 X. J. Eq. 205; Sweet
v. Wright, 57 Iowa. 514. ION. W. Pep.
870; 1 Story's Eq. Juris. § 353; Klein
v. Hoffheimer, 132 U.S. 367, 10 S. C.
Rep. 130; Holt v. Creamer, 34 X. .1. Eq.
181; Clements v. Moore, 6 Wall. 299;
Wickham v. Miller, 12 Johns. (X. Y. )
320; Pulliam v. Newberry, 41 Ala.
168: Robinson v. Holt, 39 N. H. 557.
In Twyne's Case, the facts that the
sale was accompanied by a secret
trust in favor of the debtor, and thai
the vendor remained in possession,
showed that it was not intended a- a

bona fide preference to the creditor,
hut merely as a trick to keep the prop-
erty away from the other creditors."

CHAPTER II.

PROPERTY SUSCEPTIBLE OF FRAUDULENT ALIENATION.
AVAILABLE TO CREDITORS.

ASSETS

Powers, when assets for cred-
itors.

statutory change as to |.ow ers in
New York.

Cifts of small value.

Debts forgiven or canceled.

Enforcing promises of third par-
ties.

Tracing the fund.

Income of trust estate

Rule as to exempt property.

Fraudulent purchases of exempt
property.

Covinous alienations of exemp-
tions.

Conflicting cases.

Abandoned exemptions.
What cannot be reached.
Payments made to a debtor.

£23. Interests available — Life insurance. — Having con-
sidered the principles of the common law and the early
statutes and authorities relating- to covinous alienations,1
and taken a general view of the subject, it becomes
necessary next to discuss the various classes of property,
and the rights and equitable interests of debtors, which
may constitute the subject-matter of fraudulent aliena-
tions, or which can be reached by creditors' bills or other
appropriate remedies, or through the instrumentality of
a receiver, liquidator, or assignee. We have already
seen that in general one of the requisites of a fraudulent

§ 23.

Interests available — Life
ance.

insur-

g 39

24.

Tangible property and intangible

40.

interests.

25.

Englisb statutes and autborities.

41.

26.

Recovering improvements —

42.

Rents and profits.

43.

27.

Rule as to crops.

28.

Property substituted or mingled.

44.

29.

Estates in remainder and

rever-

45.

sion.

46.

30.

Equitable interests.

47.

31.

Equity of redemption.

32.

Reservations.

48.

33.

Choses in action.

34.

Claims for pure torts — Damages.

49.

35.

Seats in stock exebanges.

50.

36.

Trade-marks.

50a

37.

Reacbing book royalties.

506.

38.

Patent rights.

1 See §§ 19-22.

54 INTERESTS AVAILABLE — LIFE INSURANCE. §23

transfer which will persuade the courts to interfere is
that the property or thing disposed of by the debtor
should be of some value, out of which the creditor might
have realized the whole or a portion of his claim.1 Hence,
where a debtor canceled upon his books, without con-
sideration, an old account against one who was insolvent,
it was declared that the transaction did not amount to a
disposition of property with intent to defraud creditors."
The foundation of this ruling is self-evident. The court
will not interest itself in any attempt to extend relief to
a creditor unless its process and judgment can be ren-
dered practically effectual, and, as a result of its action, a
substantial benefit can be conferred upon the creditor.
If the property transferred, and sought to be reached and
subjected to the process of the court, is not liable to
execution,3 or if the debtor has no beneficial interest in it,
the court will not inquire into the modes or motives of
its disposition. Such an inquiry would be futile. Hence,
it was held in Minnesota, that a conveyance of real
estate encumbered for more than its value would not be
declared void at the instance of creditors of the grantor,
though made with the intent to put the real estate beyond
their reach.4 In Hamburger v. Grant,5 it appeared that the
amount of the indebtedness to the complainant was three
dollars and fifty cents. In an action to cancel a fraudu-
lent conveyance, Kelly, J., observed : " The interposition
of a court of equity ought not to be asked to set aside a
deed on the ground of fraud for such a small sum of
money."' The value of the assigned property is always

L5. Compare Ithaca Gas Light Co. v.

Hoyl v. Godfrey, ss N. Y. 669. Treman, 93 N. Y. 6G0 ; Chapman v.

16. Hanker & Tradesman Pub. Co., 128

'Aultman & T. Co. v. Pikop, 56 Mass. 4?s : Smith v. Williams. 1 Hi

Minn. 581, 58 N. W. Rep. r,r,\ ■ Blake Mass. 510,513; National Tel. Mfg. Co.

v. Boisjoli, 51 Minn. 296, 53 N. W. v. Du Hois, 165 Mass. 117; 42 N. E.

1;. p 687. Rep. 510.

1 h Oregon, 1-.'

CHAPTER II.

PROPERTY SUSCEPTIBLE OF FRAUDULENT ALIEN-
ATION.—ASSETS AVAILABLE TO CREDITORS.

23. Interests available — Life insur-

ance.

24. Tangible property and intangible

interests.

25. English statutes and authorities.

26. Recovering improvements —

Rents and profits.

27. Rule as to crops.

28. Property substituted or mingled.

29. Estates in remainder and rever-

sion.

30. Equitable interests.

31. Equity of redemption.

32. Reservations.

33. Choses in action.

34. Claims for pure torts — Damages.

35. Seats in stock exchanges.

36. Trade-marks.

37. Reaching book royalties.

38. Patent rights.

§ 39. Powers, when assets for cred-
itors.

40. Statutory change as to powers in

New York.

41. Gifts of small value

42. Debts forgiven or canceled.

43. Enforcing promises of third par-

ties.

44. Tracing the fu in I.

45. Income of trust estate.

46. Rule as to exempt property.

47. Fraudulent purchases of exempt

property.

48. Covinous alienation of exemp-

tions.

49. Conflicting cases.

50. Abandoned exemptions.
50a. What cannot be reached.
50b. Payments made to a debtor.

Havinof con-

o

§ 23. Interests available — Life insurance,
sidered the principles of the common law and the early-
statutes and authorities relating to covinous alienations,1
and taken a general view of the subject, it becomes
necessary next to discuss the various classes of property,
and the rights and equitable interests of debtors which
may constitute the subject-matter of fraudulent aliena-
tions, or which can be reached by creditors' bills or other
appropriate remedies, or through the instrumentality of
a receiver, liquidator, or assignee. We have already
seen that in general one of the requisites of a fraudulent

1 See §§ 19-22.

54 INTERESTS AVAILABLE — LIFE INSURANCE. §23

transfer which will persuade the courts to interfere is
that the property or thing disposed of by the debtor
should be of some value, out of which the creditor might
have realized the whole or a portion of his claim.1 Hence,
where a debtor canceled upon his books, without con-
sideration, an old account against one who was insolvent,
it was declared that the transaction did not amount to a
disposition of property with intent to defraud creditors.2
The foundation of this rule is self-evident. The court
will not interest itself in any attempt to extend relief to
a creditor unless its process and judgment can be ren-
dered practically effectual, and as a result of its action, a
substantial benefit can be conferred upon the creditor.
If the property transferred, and sought to be reached and
subjected to the process of the court, is not liable to
execution," or if the debtor has no beneficial interest in
it, the court will not inquire into the modes or motives of
its disposition. Such an inquiry would be futile. Hence,
it was held in Minnesota, that a conveyance of real
estate encumbered for more than its value would not be
declared void at the instance of creditors of the grantor,
though made with the intent to put the real estate beyond
their reach.1 In Hamburger v. Grant,5 it appeared that the
amount of the indebtedness to the complainant was three
dollars and fifty cents. In an action to cancel a fraudu-
lent conveyance, Kelly, J., observed : " The interposition
of a court of equity ought not to be asked to set aside a
deed on the ground of fraud for such a small sum of
money." The value of the assigned property is always

r>. * Compare Ithaca Gas Light Co. v.

1 1. .u v. Godfrey, ^s X. Y. 069. Trenian, 93 N. Y. G60 ; Chapman v.

; I'i. Banker & Tradesman Pub. Co., 128

»Aultman A: T. Co. v. Pikop, 56 Mass. ITS; Smith v. Williams, 116

Minn. 581, 58 X. W, Rep. 551 ; Blake Mass. 510, 513 ; National Tel. Mfg. Co.

v. Boisjoli, 51 Minn. 896,58 X. W. v. Du Bois, L65 .Mass. 117, 42 N. E.

Rep. • Rep. 510.

- Oregon, 1

24 TANGIBLE PROPERTY AND [NTANGIBLE INTERESTS.

57

may here observe, according to some authorities, has a
right to devote a reasonable portion of his earnings to
life insurance for the benefit of his family,1 though the
statutes vary and the courts are not entirely in harmony
on the subject.3

It has been said to be a well-settled rule that a credit-
or's bill, filed for the purpose of removing a fraudulent
obstruction, must show that such removal will enable the
judgment to attach upon the property;'5 hence a valid
general assignment will supplant -a creditor's proceed-
ings to cancel an instrument 4such as a mortgage5 if the
assignee and not the creditor would be the party bene-
fited by a successful issue in the suit.

§24. Tangible property and intangible interests. — What
interests then can be reached by creditors ? Manifestly all
tangible property, whether real or personal, which would

1 Washington Central Bank v.
Hume, 128 U. S. 195, 9 S. C. Rep. 41.
Contra, Friedman v. Fennell, 94 Ala.
270, 10 So. Rep. 649 ; Merchants &
Miners' Trans. Co. v. Borland, 53 N. J.
Eq. 287, 31 Atl. Rep. 272. In the
latter case the court say : " I am un-
able to discover any principle or
well considered authority upon which
such a transaction can be sustained
against creditors. To do so would,
as it seems to me, be to run coun-
ter to principles so well settled
and familiar as hardly to require re-
cital. A husband cannot settle money
or property in any shape upon his
wife while he is indebted. If he at-
tempts it the creditors are entitled to
the aid of this court to reach the prop-
erty so settled, in whatever form it
may be found." The notion that credi-
tors could only recover the amount of
their premiums (^tna Nat. Bank v.
United States Life Ins. Co., 24 Fed.
Rep. 770 ; Hise v. Hartford Life Ins.
Co., 90 Ky. 102 ; Pence v. Makepeace,

65 Ind. 345), is not accepted by the
writer of an article in Vol. 25, Aruer.
Law Rev. 185, where the subject is
reviewed anil the decision in Wash-
ington Central Bank v. Hume, 128
U. S. 195, is criticized. Examine in
this general connection McCutcheon's
Appeal, 99 Pa. St. 133; Stokes v.
Coffey, 8 Bush (Ky.) 533. In the lat-
ter case, the debtor exchanged a
policy on his life in his own favor for
a similar policy payable to his wife,
it was held that this transaction was
void as to antecedent creditors.

2 See Barbour v. Conn. Mutual, 61
Conn. 248 ; Friedman v. Fennell, 94
Ala. 571. Id So. He,,, (ill).

: Spring v. Short. 90 N. Y. 545. See
Geery v. Geery. 63 N. Y. 252 : South-
ard v. Benner, 72 N. Y. 424.

4Childs v.Kendall, 17 Weekly Dig.
(N. Y.) 546.

'Spring v. Short, 12 Weekly Dig.
(N. Y.) 360 : affi'd 90 N. Y. 545. But,
see Leonard v. Clinton, 26 Hun (N.
Y.) 288.

58 fANGIBLE PROPERTY A.ND [NTANGIBLE [NTERESTS. §24

have been subject to levy and sale under execution, is sus-
ceptible of fraudulent alienation, and may be reclaimed and
recovered by the creditor where it has been transferred by
the debtor with the requisite fraudulent intention. The
line is not drawn here, however. The manifest tendency
of the authorities is to reclaim every species of the debtor's
property, prospective, expectant1 or contingent, for the
creditor. If a conveyance of land is set aside, the pro-
ducts of the land may also be reached.' As has been
shown, transfers of intangible interests3 and rights in
action, stocks,4 annuities,5 life insurance policies,0 promis-
sory notes,7 book royalties/ patent rights,1' property of
imprisoned felons,10 legacies,11 money, bank bills,12 and
choses in action generally,13 may be reached. It has been
observed M that the principle toward which the highest

'See Read v. Mosby, *7 Terra. 759,
11 s \v. Rep. 940.

State v. McBride, 105 Mo. 265,
15 S. W. Rep. 72.

A ]>ar<' possession or possibility
cannot be reached by creditors: Smith
v. Kearney, -i Barb Ch. (N. Y.) 533;
Waggoner v. Speck, 3 Ohio, 293; nor
can they enforce a moral claim which
;i debtor may bave upon the con-
science of an executor. Sparksv. De
La < merra, 18 < !al. <>7(i.

1 Baj ard v. I [off man, I Johns. < !h.

i.\. V. 1 150 : W I v. Pierce, 9 Cow.

(N. Y.i 723; Edmeston v. Lyde, 1
Paige 1 N. Y. 1 641,

Nbrcutl \. Dodd, 1 Craig & Ph.
100.

6 Burton v. Farinholt, 86 X. C 260;
Stokoe \. Cowan, 29 Beav. 637 1 Jen
kyn v. Vaughn, 3 Drew. 419 ; Anthra-
cite In- 1 ... v. Sears, 109 Mass 383.

'La Crosse Nal Bank \. Wilson, 7*
Wis. 391. 18 N. W. Rep. 158 . Bragg
■ . 1 ..,■, nor, 85 Wis. 168, 55 N. W.
Rep. 919; Johnson v. Alexander, L25
End. 575, 25 N. E. Rep, 706.

Lord v. Barte, lis Mass. 271.

'Barnes v. Morgan, 3 Hun (X. Y.i
704.

'"Matter of Nerac, 35 Cal. 392.

"Bigelow \. Ayrault, 46 Barb. (N
Y. I 143.

See Bayard v. I lull man. 4 Johns
ch. (X. Y.) 4.J1 : Spader v. Davis, !
Johns, ch. (N. V.i 280; Badden v
Spader, 20 Johns. (N. Y.)554; Shain
wald v. Lewis, i; Fed. Rep. 770.

I Drake \ . Rice, CH) .Mass.
Pendleton \. Perkins, 4!» Mm.
Powell v. Howell, 63 N. C. 283
meston v. Lyde. 1 Paige (N. Y. 1
Stinson v. Williams. ;:;. ( la. 1 70 ; Rog-
ers v. Jones, 1 Neb. 417 t'ii\ lit' New-
ark v. Funk, 15 Ohio Si. 462 ; llitt v.
Ormsbeet14Hl. 233 ; Tantuxn v. < rreen,
21 N. .1. Eq. 864. Bui compare Stew-
art v. English, 1; I ml 1 ;<; ; Wallace v.
Lawyer, 54 [nd. 501 : Grogan v. Cooke,
2 Hall & B.238 ; Nantes v. Corrock, !)

Ves. 188.

II Esaaj by John Reynolds, Esq.,
cited supra.

410;

565 :

Ed-

037;

§25 ENGLISH STATUTES \\1» AUTHORITIES. 59

courts in England and in all the States arc more or less
rapidly working is: "That the entire property of which
a debtor is the real or beneficial owner, constitutes a fund
which is primarily applicable, to the fullest extent of its
entire value, to the payment of its owner's debts. And
the courts will not allow any of that value to be with-
drawn from such primary application, if they can find any
legal or equitable ground on which to prevent such
withdrawal."

Creditors should remember that whether an equitable
interest in real estate is liable to be appropriated by legal
process to the payment of the debts of the beneficiary is
to be determined by the local law where the property has
its situs}

§25. English statutes and authorities. — Mr. May, an
English writer upon this general subject of fraudulent
alienations, speaking of the kinds of property or interests
which may be reached by creditors, says:2 "The pre-
amble of the 13 Eliz. c. 5, declares it to be made 'for
the avoiding and abolishing of feigned, covinous, and
fraudulent feoffments, gifts,' etc., 'as well of lands and
tenements as of goods and chattels,' made to delay or
defraud creditors ; and it seems that under this descrip-
tion are included all kinds of property, real and personal,
legal and equitable,3 vested, reversionary,4 or contin-
gent,5 which are subject to the payment of debts, or
liable to be taken in execution at the time of the fraudu-
lent conveyance.0 Generally speaking, the same general

'Spindle v. Shreve, 111 U. S. 542; 4 Ede v. Knowles, 2 Y. A: C. N. R.

Nichols v. Levy, 5 Wall. 433. See 172.

Nichols v. Eaton, 91 U.S. 716-729. b French v. French, 6 De G. M. &

2 May on Fraudulent Conveyances, G. 95.

p. 17. " "Sims v. Thomas, 12 A.dol. & El.

"Ashfield v. Ashfield, 2 Vern. 536 ; Turnley v. Hooper, 2 Jur. (N. S.)

287. 1081.

6o

tMPROVEMENTS — RENTS AND PROFITS.

§26

principle and rule of interpretation may be deduced from
the American authorities.1

£ 26. Recovering improvements — Rents and profits.— An
extreme illustration of the disposition of the courts to
favor creditors is the familiar and salutary rule that
improvements placed by a debtor upon real property of
another, acting in concert with him to defraud creditors,
can be followed, and the realty charged in favor of
creditors of the debtor with the value of such improve-
ments.'-' In Isham v. Shafer,8 Johnson, J., said : "Where
no debt has been created between the parties to the

1 Mr. May further observes : " B3 1
and '2 Vict. c. 110, many kinds of
property have been made available to
creditors for the payment of debts.
s.i that now copyhold land [1 and 2
Vict. c. 110, s. 11, and see Bott v.
Smith, 21 Bear. 511], money and
bank notes [ibid. i 12, Barrack v.
McCulloch, :J. K. & J. 110; Colling-
ridgev. Paxton, 11 C. B. 683](whether
of the Bank of England or of any
other bank or bankers), and any
cheques, Mil- of exchange, promis-
sorj notes, bonds, specialties, or other
securities for money [Spirett v. Wil-
lows, 11 Jur. (N. s.i 70], and stock
and shares in public funds and public
companies [1 and 2 Vict. c. 110, §§ 11

and I.".: Warden v. Jones. 2 De 6. &

J. 76; Goldsmith v. Russell, 5 De Gr.
M. & <;. 547], are to he considered as
dsand chattels ' wit hin t he mean-
ing of this section [13Ehz. c. ■">. js 1 1."
May on Fraudulent Conveyances, p.
21.

Rose \ Brown, 1 1 W. Va.
137; Seasongood v. Wan-, 104 Ala.
212 ; Heck \. Fisher. 78 Ky. 644 ;
Robinson \. Huffman, 15 B. Mom.

I Ky. 1 82 ! A t li.y v. Knoits, (i I'.. Mom.

K\ .) 29; Sexton \. Wheat on, 8

Wheat. 229 . Kirby v. Bruns, 45 Mo.

284 : Lockhard v. Beckley, 10 W. Va.

P7; Burt v. Timmons, 29 W. Va. 458,
2 S. E. Rep. 780; Dietz v. Atwood,
10 Brad. (111.) 99 ; Isham v. Schafer,
60 Barb. (N. Y.) 317; but compare
Webster v. Hildreth, 33 Vt. 457 :
Caswell v. Hill, 47 N. II. 407. In
Humphrey v. Spencer, 36 W. Va. 11,
18 ; US E. Rep. 410, the court say :
"That money of a husband diverted
from payment of his debts, and
expended in permanent improve-
ments on his wife's land, can be fol-
lowed by his then creditors, whether
the act he done with fraudulent pur-
pose or not, I regard settled in tins
State. Lockhard v. Beckley, 10 W. Va.
ST: Rose v. Brown. 1 1 W. Va K37: Kan-
awha Valley Bank v. Wilson, 25 W.
Va. 242 ; Burl v. Timmons. 2!) W. Va.
111. 2 s. E. hep. 780. .Mr. Bishop, in
his work on Law of Married Women
(volume 2, § 1 7 J ■ . expresses tin ■..pinion
that it is only where a fraudulent
purpose on the part of the wife is
shown that her land can he so
charged ; )>ut he admits that this
opinion does not accord with the

weight of authority. This doctrine

is opposed in the cases of Webster v.
Hildreth, :;:; Vt. 457 ; Corning v.

Fowler. 24 la. 584 : h'ohinson v. Huff-
man. 15 B. Mon. (Ky.) 80."
»60 Barb. (N. Y.) :«0.

§26 IMPROVEMENTS — RENTS AND PROFI1 . 6l

fraudulent transaction, and the personal property of the
judgment-debtor has merged in, and become part of
the real estate of another in this way, the appropriate, if
not the only remedy is to fasten the judgment upon the
real estate to the extent of the judgment-debtor's property
thus made part of the realty." In a New Hampshire case
it was held that a guardian could not purchase property
and place it on the land of his ward to the injury of his
creditors j1 but the property was not attached to the free-
hold, and the doctrine may well be doubted whether an
infant's land can be subjected to the claims of creditors
against a debtor who has placed improvements on it.2
In Lynde v. McGregor,3 where it appeared that an insol-
vent husband had made extensive expenditures upon
lands belonging to his wife, and had increased the value
of the estate, Gray, J., observed: "The amount of such
increase in value, for which no consideration has been
paid by the wife, and which has been added to her estate
by the husband in fraud of his creditors, in equity belongs
to them, and may be made a charge upon the land for
their benefit." Temporary or perishable improvements,4
which do not add to the permanent value of the land, can-
not ordinarily be reached.

It is certainly reasonable, and it seems to be clear, that
rents and profits can be recovered from a fraudulent gran-
tee who holds the property under a secret trust for the
debtor.5 A creditor, by filing a bill after the return of an

1 Tenney v. Evans, 14 N. H. 343, Title to Land, (2d. ed.) § 702 ; Dick v.
40 Am. Dec. 194. Hamilton, 1 Deady, 322.

2 Mathes v. Dobschuetz, 72 111. 438. 5 Marshall v. Croon. 60 Ala. 121.
Compare Washburn v. Sproat, 16 See Kipp v. Hanna, 2 Bland's Ch.
Mass. 449. (Md.) 26 ; Robinson v. Stewart. 10 N.

3 13 Allen (Mass.) 182; Seasongood Y. 190. Compare Edwards v. Ent-

v. Ware, 104 Ala. 212, 16 So. Rep. wisle. 2 Mackey (D. C.) 43; Hadley

51; Humphrey v. Spencer, 36 W. Va. v. Morrison, 39 III. 392; Thompson v.

11. Bickford, 19 Minn. 17: McGahan \.

4 See Sedgwick & Wait on Trial of Crawford (S. < . i 25 S. E. Rep. 123.

62 RULE AS TO CROPS. § 2*]

execution unsatisfied, may also obtain a lien upon the
rents and profits of the real estate of his judgment-debtor,
which accrued during the fifteen months allowed bylaw to
redeem the premises from a sale by the sheriff on execu-
tion, and satisfaction of the judgment may be decreed
out of such rents and profits. The chancellor said : "Upon
what principles of justice or equity can the debtor claim
to retain the whole rents and profits of a large real estate,
for the period of fifteen months, when such rents and
profits are necessary to pay the debts which he honestly
owes to his creditors?"1 In Loos v. Wilkinson,2 Earl,
J., used these words: "These debtors could no more
give away the rents and profits of their real estate than
they could give away the real estate itself."3

§ 27. Rule as to crops. — The same general principle per-
vades the cases as to growing crops. Thus, in Fury v.
Strohecker/ it was decided that a judgment-creditor was
entitled to resort to crops grown upon the land of his
debtor after it had been transferred in fraud of his rights,
so far at least as the fraudulent orantor retained an interest
in them, by an understanding with the grantee ; and where
there was reason to suppose such collusion existed all
doubts should be solved in the creditor's favor.5 And in
Massachusetts it was decided that if a debtor conveyed
land to his wife, with a design to defraud his creditors,
and the wife participated in the intent, hay cut on the

1 Farnham v. Campbell, 10 Paige 8 But compare Robinson v. Stewart,

(N. Y.) 598-601. See Campbell v. L0 N. Y. 189 ; Collumb v. Read, 24 N.

Genet, 2 Hilt. (N. Y.) 396; Dow v. Y. 505.

Platner, 16 N. Y. 565; Scbermerhorn 'II Mich. 337.

\. Merrill,! Barb. (N. Y.) 517: Strong 5 Compare Pierce v. Hill, 35 Mich.

v. Skinner, t Barb. (N. Y. 1 558. 201 ; Petera v. Light, 7(5 Pa. St. 289

■in> N. Y. 214, inn. E Rep.99. Jones v. Bryant, 13 N. H. 53 ; Garbutt

ad appeal, LIS N. Y 485, 21 N. E. v. Smith, 40 Barb. (N. Y.) 22.
Rep. '■'<'->2, involving rules as to an ac-
count Lng bj a fraudulent grantee.

§28 PROPERTY SUBSTITUTED OR MINGLED. 63

land was liable to be taken on execution to satisfy the
claim of a creditor of the husband, upon a debt contracted
subsequent to the conveyance.1 Even if the land itself
is exempt, the crops growing thereon, if subject to levy,
can be reached in the hands of a fraudulent grantee.'*1
The rule here laid down applies also to the product of
mineral lands.3

§ 28. Property substituted or mingled. — Property cannot
be placed beyond the reach of creditors by a change in its
form or character. It may be traced and identified. In
McClosky v. Stewart,4 the creditor sought to reach cer-
tain machinery, tools, etc., constituting the "plant" of a
business fraudulently transferred, and the defendant
attempted to limit the recovery to such property as was
in existence at the time of the transfer. The court
declined to apply this rule to the new tools and machin-
ery which had been purchased for the purpose of supply-
ing the waste incident to ordinary wear and tear. The
parties in possession having had the benefit of the
machinery and tools, and having partially worn them out
in the business, might be said to have had the benefit of
the waste, and there was no reason in law or in equity
why the repairs and new tools, which were rendered neces-
sary to supply such waste, should not follow the property
itself.5

1 Dock! v. Adams. 125 Mass. 398. A same case that where a fraudulent
mortgage of crops by which an in- transferee mingled his own property
terest is reserved to the moi'tgagor is with that which he had fraudulently
void. Merchant's & M. Sav. Bank v. received, he would not be allowed to
Lovejoy, 84 Wis. 601, 55 N. W. Rep. claim that the property so mingled
108. should subsequently be assorted and

2 Erickson v. Paterson, 47 Minn, set aside for the payment of the credi-
525, 50 N. W. Rep. 699. tors. The inference seems to be that

3 State v. McBride, 105 Mo. 265, 15 he would lose it all. If the property
S. W. Rep. 72. could be readily identified and sepa-

463 How. Pr. (N. Y.)142. See Leh- rated, it is difficull to sec why this

man v. Kelly, 68 Ala. 192. harsh rule should be applied. Com-

5 It was further decided in this pare Hooley v. Gieve, affirmed 82 N.

64 ESTATES IX REMAINDER AND REVERSION. § 29

? 29. Estates in remainder and reversion. — A vested
remainder in fee is liable for debts in the same way as an
estate vested in possession. Though the time of posses-
sion is dependent upon the termination of a life estate,
this only lessens its value for the time being. The lia-
bility of the estate to creditors is not in the least affected.
In Nichols v. Levy,1 Swayne, J., delivering the opinion of
the United States Supreme Court, said : "It is a settled
rule of law that the beneficial interests of the cestui que
(rust, whatever it may be, is liable for the payment of his
debts. It cannot be so fenced about by inhibitions and
restrictions as to secure to it the inconsistent character-
istics of right and enjoyment to the beneficiary and
immunity from his creditors. A condition precedent, that
the provision shall not vest until his debts are paid, and a
condition subsequent that it shall be divested and for-
feited by his insolvency, with a limitation over to another
person, are valid, and the law will give them full effect.
Beyond this, protection from the claims of creditors is
not allowed to go."- In French v. French,3 it was held
that a contingent reversionary interest is within the
statute.4 An assignment without consideration of an
estate in expectancy by an insolvent heir apparent has
been held to be fraudulent.5 The husband's half or por-
tion in an estate in entirety can be reached by his creditors.6

Y. 625, on opinions iif New York Com- eon, 18 Ves. 420: Piercy v. Roberts,

mon Plea- ; 3. C, 9 Abb. X. C. (N. 1 Mylne & K. 4; Dirk v. Pitchford, 1

Y.) 8, 41, and aote of the editor; Dev. & Bat. (N. C.) Eq. 484,

Dow v. Berry, IT Fed. Rep. 121; GDeG. M. & G. 95. See Neale

Smith v. Sanborn, 6 Gray(Mass.) L34 ; v. Day, 28 L. J. Ch. 45.

The " Idaho," 93 U. S. 575. 4A contingent remainder is not

1 5 Wall. 4:5:1 subject to execution. Jackson v.

'Citing Graves v. Dolphin, 1 Simon, Middleton, 52 Barb. 'X. Y.)9; Wat-

66 Biebane v. Mebane, 1 [red. Eq. son v. Dodd, 68 N. C. 528.

(X. C.) 181 : Bank v. Forney, 2 [red. Read v. Mosby, 87Tenn.759, 11 S.

Eq. (N. C.) L81 ivl: Snowdon v. W. Rep. 940.

Dales, 6 Simon, 524 ; Foley v. Burnell, 'Newlove v. Callaghan, 86 Mich.

1 Bro. 0. C. 374 : Brandon v. Robin- 297, 18 X. \V. Rep. 1096.

§ 30 EQUITABLE INTERESTS. 65

§30 Equitable interests. — Equitable interests constitute
a frequent subject-matter of creditors' suits. In Sanford
v. Lackland,1 the learned Dillon, J., held that if property
was given to trustees to hold for A. until he reached the
age of twenty-six years, when it was to be paid over to
him, and A. became bankrupt before he arrived at twenty-
six, his assignee in bankruptcy was entitled to the prop-
erty. Chief-Justice Gray, in Sparhawk v. Cloon,3 says,
that "the equitable estate for life is alienable by and
liable in equity to the debts of the cestui que trust, and
that this quality is so inseparable from the estate that no
provision, however express, which does not operate as a
cesser, or limitation of the estate itself, can protect it
from his debts."3 We shall presently consider the cases,
which must be distinguished from the ones just cited, in
which it is held that the founder of a trust may secure the
enjoyment of it to other persons, the objects of his
bounty, by providing that it shall not be alienable by
them, or be subject to be taken by their creditors, and
that his intentions in this regard will, in certain cases, be
respected by the courts.4

A creditor's bill, through the instrumentality of a re-
ceiver, will reach the interest of the debtor in his deceased

> 2 Dillon, 6. Wall. 433, 441 ; Fox v. Peck, 151 111.

2 125 Mass. 266. 226, 37 N. E. Rep. 873. Compare

3 See Brandon v. Robinson, 18 Ves. Potter v. Couch, 141 U. S. 296, 11 S. C.

429, 1 Rose, 197; Rochford v. Rep. 1005.

Hackman, 9 Hare, 475 ; 2 Spence's 4See Sparhawk v. Cloon, 125 Mass.

Eq. Jur. 89, and cases cited ; Tilling- 266 ; White v. White, 30 Vt. 338,

hast v. Bradford, 5 R. I. 205 ; Mebane 344 ; Arnwine v. Carroll, 8 N. J. Eq.

v.Mebane, 4 Ired. Eq. (N. C.) 131 ; 620, 625 ; Holdship v. Patterson, 7

Heath v. Bishop, 4 Rich. Eq. (S. C.) Watts. (Pa.) 547; Brown v. William-

46 ; Smith v. Moore, 37 Ala. 327 ; Mc- son, 36 Pa. St. 338 ; Rife v. Geyer,

Ilvaine v. Smith, 42 Mo. 45 : Sanford 95 Pa. St. 393 ; Nichols v. Eaton. 91

v. Lackland, 2 Dillon, 6 ; Walworth, U. S. 716, 727-729 ; Hyde v. Woods,

C, in Hallett v. Thompson, 5 Paige 94 U. S. 523, 526; Broadway Nat.

(N. Y.) 583, 585 ; Comstock, J., in Bank v. Adams, 133 Mass. 171 ; Spin-

Bramhall v. Ferris, 14 N. Y. 41, 44 ; die v. Shreve, 9 Biss. 199, 4 Fed.

Swayne, J., in Nichols v. Levy, 5 Rep. 136. See §§ 39, 40.

5

66 EQUITY OF REDEMPTION — RESERVATIONS. §§31,32

father's estate ; ] so an inchoate interest such as a tenancy,
by the courtesy,- and a widow's dower,3 may be reached
by the aid of a court of equity.

§ 31. Equity of Redemption. — In a controversy which
arose in Alabama,4 it was said that, aside from constitu-
tional and statutory exemptions, a debtor could not own
any property or interest in property -which could not be
reached and subjected to the payment of his debts, and
that an equity of redemption was property, and was a valu-
able right capable of being subjected to the payment of
debts, in courts of law and in equity ; and hence a transac-
tion by which an embarrassed debtor concealed the exist-
ence of such an interest from his creditors must necessarily
hinder and delay them.5

§ 32. Reservations — Debtors often make reservations
in conveyances for their own benefit, but such subterfuges
are idle so far as subserving the debtors' personal interest
is concerned.6 In Crouse v. Frothin£ham,7 the debtor
reserved the right to use and occupy a part of the premises
conveyed for three years without rent, and it was shown
that such use and occupation were worth $750. The
court held that if the reservation was effectual to vest in
the debtor a legal interest in the premises to the extent
stated, his judgment-creditors could reach it. And if the
debtor merely had a parol lease for three years, which was
void by the statute of frauds, the consideration being fully
paid, equity would decree a specific performance of it, and

1 Mr Arthur v. Hoysradt, 11 Paige 5 See Chautauque County Bank v.

(N. Y.) 495. Risley, 19 N. Y. 369; Campbell v.

» Ellsworth v. ('<»»k, s Paige (N. Fish, 8 Daly (N. Y.) 102.

Y.)643; Beamish v. Hoyt, 2 Root. 6 Young v. Heennans, 66 N. Y. 382,

(N. Y.) 307. and cases cited; Todd v. Monell, 19

Tompkins v. Fonda, 4 Paige (N. Hun (N. Y.) 362.

Y.) 447; Payne v. Becker, 87 N. Y. 7 27 Hun (X. Y.) 125; reversed, 97

157. N. Y. 105. See Elias v. Farley, 2 Abb.

Suns v. Gaines, 64 Ala. 393. Ct. App. Dec. (N. Y.) 11.

§ 33 CHOSES IN ACTION. 67

thus the debtor would have an equitable interest of some
value which the creditors miodit reach. The court of last
resort, however, reversed the decision on the insufficiency
of the evidence.1

§ 33. Choses in action. — While the books and cases are
full of general expressions to the effect that intangible
interests fraudulently alienated by the debtor may be
reclaimed by the creditor, yet the rule that choses in
action can be reached by creditors and subjected to the
payment of debts, has not been established without a
struggle, and is not even now universal in its operation. '
When we consider that vast fortunes may be concentrated
in this species of property, it manifestly becomes of para-
mount importance to a creditor to know whether his
process will cover it. Cases can be found holding that
even equity is ordinarily powerless to require the debtor
to apply choses in action in liquidation of debts,3 but it
seems to us that the better authority by far is to the effect
that such interests can be reached by creditors,4 and
many cases, more or less founded upon statutory provi-
sions, upholding the creditors' right to reach this class of
assets might be cited.5 Thus creditors may reach the

1 Crouse v. Frothingham, 97 N. Y. 4 Drake v. Rice, 130 Mass. 410 ;

105. Bragg v. Gaynor, 85 Wis. 468 ; 55 N.

'2 See § 17 ; Greene v. Keene, 14 R. W. Rep. 919, case citing the text ;

I. 388 ; Clapp v. Smith, 16 R. I. 717, Bayard v. Hoffman, 4 Johns. Cli. (N.

19 Atl. Rep. 330. Y.) 450; Powell v. Howell, 03 N. C.

;iGrogan v. Cooke, 2 Ball. & B. 283 ; Ahbott v. Tenney, 18 N. H. 109:

2:::; ; Nantes v. Currock, 9 Ves. 188 ; Sargent v. Salmond, 27 Me. 539 ;

Rider v. Kidder, 10 Ves. 368 ; McCar- Stinson v. Williams, 35 Ga. 170:

thy v. Goold, 1 Ball. & B. 387; Rogers v. Jones. 1 Neb. 417 ; Pend I e-

Dundas v. Dntens, 1 Ves*. Jr. 196; ton v. Perkins, 49 Mo. 565 ; Edmeshm

McFerran v. Jones, 2 Litt. (Ky.) 219; v. Lyde, 1 Paige (N. V.) 637 ; Hadden

Green v. Tantnm, 19 N. J. Eq. 105 ; v. Spader, 20 Johns. (N. Y.) 554;

Wallace v. Lawyer, 54 Ind. 501 ; Mtna Nat. Bank v. Manhattan Life

Stewart v. English, 6 Ind. 176 ; Wat- Ins Co., 24 Fed. Rep. 769.

kins v. Dorsett, 1 Bland's Ch. (Md.) 5City of Newark v. Funk, 15 Ohio

533. See Greene v. Keene, 14 R. I. St. 462 ; Bryans v. Taylor, Wright

388. (Ohio) 245 ; Davis v. Sharron, 15 B.

68 CLAIMS FOR PURE TORTS. §34

proceeds of a fraudulently transferred insurance policy.1
The principle running through these cases is highly im-
portant, for under it the creditor may impound money of
the debtor in the hands of a sheriff,2 money earned but
not yet due,3 money due to heirs or distributees in the
hands of personal representatives,4 and dower before
admeasurement.5 And creditors of a corporation may
sustain a bill to compel stockholders to pay their
subscriptions.6

§ 34. Claims for pure torts — Damages. — The mere right
of action of a judgment-debtor for a personal tort, as for
assault and battery, slander, or malicious prosecution, can-
not, in the nature of things, be reached by a complainant
in a judgment-creditor's action.7 Nor will a claim of this
kind pass to a receiver under the usual assignment by the
defendant in such a suit.8 This rule proceeds upon the
theory that such claims or rights of action are non-assign-
able. It must be remembered in this connection, how-
ever, that, in the case of a tort, causing an injury to the

Mon. (Ky.) 64; Hitt v. Ormsbee, 14 106: Ryan v. Jones, 15 111. 1 ; Sayre

111.283: Burnes v. Cade, 10 Bush. v. Flournoy, 3 Ga. 541.

(Ky.) 251 ; Tantum v. Green, 21 N. '' Stewart v. McMartin, 5 Barb. (N.

J. Eq. 364. "The words ' cliose in Y.) 438 ; Tompkins v. Fonda, 4 Paige

action' might be broad enough to (N. Y.) 448. See note to Donovan v.

include even actions for damages in Finn, 14 Am. Dec. 542.

torts, were it no1 that they probably 6Miers v. Zanesville & M. Turnp.

have never been regarded strictly as Co., 11 Ohio 273, 13 Ohio, 197 ;

property; nor as assignable." Ten- Henry v. Vermilion R. R. Co., 17

Broeck v. Slue, 13 Bow. Pr. (X. V.) Ohio 187; Hatch v. Dana, 101 U. S.

30. See Budson v. I'rets, 11 Paige 205; Ogilvie v. Knox Ins. Co., 22

V. I ISO. Sec £ 34. How. 380 ; Pierce v. Milwaukee Con-

•iEtna Nat. Bank v. Manhattan struetjon Co., 38 Wis. 253. See

l.itv In-, (o 24Fed. Rep. 769. Marsh v. "Burroughs, 1 Woods, 467.

Brennan v. Burke, •'- Rich. Eq.(S. 7 Hudson v. Plets, 11 Paige (N. V.)

J00. is:; ; Ten Broeck v. Sloo, 13 How. Pr.

Thompson v. Nixon, 3 Edw. Ch. (X. Y ) 30. See Garretson v. Kane,

(N. Y.i 457. S<«- Browning v. Bettis, 87 N. .1. Law, 211.

8 Paige N y.)568 8 Benson v. Flower, Sir W. Jones'

>Moorea v. White, 3 Gratt. (Va.) Rep. 215 ; Budson v. Plets, 11 Paige

139; Caldwell v. Montgomery, 8 Ga. (N. Y.) 183.

§35 SEATS IN STOCK EXCHANGES. 69

property of the judgment-debtor, accruing before the filing
of the creditor's bill, by means of which injury certain
property to which the creditor was entitled to resort for
the payment of his debts has been disminished in value
or destroyed, the right of action appears to be such an
interest as may properly be reached and applied to the
payment of the complainant's claim.1

§ 35. Seats in stock exchanges.— Counsel have contended
in many cases that a membership of a stock exchange was
a mere personal privilege or license, and was not property
or a right to property which the creditors of the member
could reach. Probably the enormous pecuniary value
which not infrequently attaches to such a membership has
inspired the courts to consider this so-called privilege as a
species of property, the value of which the debtor should
not be allowed to withhold from his creditors. It maybe
said to differ from the membership of a social club in that
the latter has no general value or marketable quality,
there being usually no provision for its transfer, and noth-
ing remaining after the member's death. Stock exchange
memberships, on the other hand, being held for pur-
poses of pecuniary gain, may, ordinarily, be bought and
sold subject to the regulations of the association, and,
after the owner's death, may be disposed of and the
proceeds distributed. For these reasons such inter-
ests are held to be assets,2 and, in a certain sense, prop-

1 Hudson v. Plets, 11 Paige (N. Y.J Grant. 42 L. T. (N. S.) 387, 22 Alb.

184. See Ten Broeck v. Sloo, 13 How. L. J. 70. In re Gallagher, 19 N. B.

Pr. (N. Y.) 30. R. 224, it was decided that a license

'2 See Grocers' Bank v. Murphy, 60 or permit to occupy certain stalls in

How. Pr. (N. Y.) 426; Matter of Washington Market, New York City,

Ketchum, 1 Fed. Rep. 840 : Ritterband was property that passed to an as-

v. Baggett, 42 Superior Ct. (N. Y.) signee. But In re Sutherland, 6 Bis

556; Colby v. Peabody, 52 N. Y. Su- sell, 526, on the contrary, maintains

perior, 394 ; Piatt v. Jones, 96 N. Y. that a right of membership of a board

29 ; Smith v. Barclay, 14 Chicago Leg. of trade does not become vested in an

News, 222; and compare Ex parte assignee. Compare Barry v. Ken-

JO SEATS IN STOCK EXCHANGES. § 35

erty.1 In Hyde v. Wood,2 such a membership is character-
ized as an incorporeal right which, upon the bankruptcy of
the member, passed, subject to the rules of the stock board,
to an assignee. It is said, however, not to be a matter
of absolute purchase or sale, but is to be taken with the
incumbrances and conditions which its creators imposed
upon it. Hence, a provision that debts due other mem-
bers shall be first paid is valid and must be carried out.
In Powell v. Waldron,3 Finch, J., one of the most facile
judicial writers, declared: "Although of a character
somewhat peculiar, its use restricted, its range of pur-
chasers narrow, and its ownership clogged with conditions,
it was nevertheless a valuable right, capable of transfer
and correctly decided to be property. It was something
more than a mere personal license or privilege, for it could
pass from one to another of a certain class of persons and
belong as fully to the assignee as it did to the assignor.
That characteristic gave it not only value which might
attach to a bare personal privilege, but market-value
which usually belongs only to things which are the sub-
jects of sale. However it differed from the incorporeal
rights earlier recognized and described, it possessed the
same essential characteristics. It could be transferred
from hand to hand and all the time keep its inherent

nedy, 11 Abb. Pr. N. S. (N. Y.) 421. seat in the board of brokers is not

It seems clear that the seat or license property subject to execution in any

is not liable to legal proceedings on form. It is a mere personal privilege,

fit ri facias or execution; Eliot v. Mer- perhaps more accurately a license to

chants' Exchange of St. Louis, 38 Alb. buy and sell at the meetings of the

L. J. 512. In Thompson v. Adams, board. It certainly could not be

93 Pa. St. 55, 66, in a per curiam levied on and sold under a ft. fa."

opinion in which the learned Justice There is a tendency in these cases

Sharswood participated, it is said: that is to be regretted.

" The seat is not property in the eye ' Piatt v. Jones, 96 N. Y. 29.

of t lie law; it could not be seized in 294 U. S. 524. See Sparhawk v.

execution for the debts of the mem- Yerkes, 142 U. S. 12, 12 S. C. Rep. 104.

bers." Again, it is observed in Pan- 3 89 N. Y. 331. See Piatt v. Jones,

coast v. Gowen, 93 Pa, St. 71: "A 96 N. Y. 29, and cases cited.

§ t,6 TRADE-MARKS. 7 1

value, and be as freely and fully enjoyed by the permitted
purchaser as by the original owner. We should make of
it an anomaly, difficult to deal with and to understand, if
we fail to treat it as property. The authorities which
determine it to be such seem to us better reasoned and
more wisely considered than those which deny to it that
character, although the subject of ownership, of use, and
of sale." The cases upon this subject are fully reviewed
by the St. Louis Court of Appeals, in Eliot v. Merchants'
Exchange of St. Louis,1 and the court in conclusion say :
"There can be no doubt that the weight of authority is,
that the seat of a member in a stock board or merchants'
exchange is a species of property not subject to ordinary
execution, but which may be reached by equity processes
in such a way as to respect the rules of the exchange and
the rights of all parties interested, and at the same time,
by proceedings in aid of the execution, to compel an insol-
vent member to transfer his seat under the rules of the
board, and apply the proceeds to the satisfaction of the
debts of his judgment-creditor." ~

§36. Trade-marks. — It seems to be regarded as settled
law that the right to use a trade-mark, in connection with
the business in which it has been used, is property which
will be protected by the courts, and which may be sold
and transferred.3 In Sohier v. Johnson,4 the right to use
a trade-mark was recognized as property which would

1 28 Alb. L. J. 512. Cadyi 14 How. 528 ; Powell v. Wald-

2 In Sparhawk v. Yerkes, 142 U. S. ron, 89 N. Y. 328 ; Belton v. Hatch,
12, 12 S. C. Rep. 104, Chief Justice 109 N. Y. 59:5, 17 N. E. Rep. 225 ;
Fuller, writes concerning membership Habenicht v. Lissak, 78 Cal. 351, 20
seats : "While the property is pecu- Pac. Rep. 874 ; Weaver v. Fisher, 110
liar and in its nature a personal privi- 111. 146."

lege, yet such value as it may possess, 3 Warren v. Warren Thread Co., 28

notwithstanding the restrictions to Alb. L. J. 278, 134 Mass. 247 ; Enier-

which it is subject, is susceptible of son v. Badger. 101 Mass. 82 ; Oilman

being realized by creditors. Ager v. v. Hunnewell, 122 Mass. 139.

Murray, 105 U. S. 126 ; Stephens v. 4 111 Mass. 238.

REACHING BOOK ROYALTIES. §37

pass to an assignee, as an incident under a transfer of
the business and good-will.1 The fact that the trade-
mark bears the owner's name and portrait does not render it
unassignable.^ The same general principle may be found
in the English law, and it has been held that under the
bankrupt law a trade-mark passes to the assignee of the
owner.8 It may be doubted whether mere personal trade-
marks, the use of which, by any person other than the
originator, would operate as a fraud upon the public, are
subject to this rule. Where, however, the trade-marks are
mere signs or symbols designating the place or the estab-
lishment at which the goods are manufactured, and not
implying any peculiar skill in the originator as the manu-
facturer, or importing necessarily that the goods are
manufactured by him, they constitute property and pass
to an insolvent assignee.4

§ 37 Reaching book royalties.— An instructive case, illus-
trative of the nature of creditors' remedies, is Lord v.
Harte.5 The plaintiff was a judgment-creditor of Bret

1 Kidd .v. Johnson, 100 U. S. 617 ; tured at a particular establishment and
Trade-mark Cases, 100 U. S. 82; War- acquires a special reputation in con-
ren v. Warren Thread Co., 28 Alb. L. nection with the place of manufac-
J. 278. line, and that establishment is fcrans-

2 Richmond Nervine Co. v. Rich- f erred either by contract or operation
niond, 159 U. S. 293, 16 S. C. Rep. 30 ; of law to others, the right to the use of
I i-h Bros. Wagon Co. v. La Belle the trade-mark may be lawfully trans-
Wagon Works 82 Wis. 546, ■">2 X. W. ferred with it. Its subsequent use by
Rep. 595; Brown Chemical Co. v. the person to whom the establishment
Meyer, 139 U. S. 540, 11 S. C. Rep. 625. is transferred is considered as only in-

8 Leather Cloth Co. v. American dicating that the goods to which it is

Cloth Co., 11 II. L. Cas. 523; Motley affixed are manufactured at the same

v. Downman, 3 Myl. &Cr. 1 ; Hudson place and are of the same character as

\. Osborne, 39 L. J. Ch. 79. those to which the mark was attached

1 Warren v, Warren Thread Co., 134 by its original designer." See Trade-

247. Sec ( 'ovcll v. ( 'had wick, L53 .Mark < 'ases, 100 U. S. 82 ; Royal Bak-

267; Prince's Metallic Paint Co. ing Powder Co. v. Sherrell, 93N. Y. 334;

v. Prince Mfg. Co., 57 I'd. Rep. 942. Richmond Nervine Co. v. Richmond,

I,, Kidd v. Johnson. LOO U. S. 617, L59 U. S. 293, 16 S. C. Rep.. 30.

the court said: "When the trad.- '■ 1 IS Mass. 271.

mark is affixed to articles manufac-

§33

PATENT RIGHTS.

73

Harte, the well-known writer of prose and poetry, and
the bill in question was filed, under the General Statutes
of Massachusetts,1 against Harte and his publishers, to
reach moneys due or that might thereafter accrue to him
for royalties upon books sold by the publishers. Devens, J.,
after observing that the defendant Harte had a valu-
able interest under an existing contract which could not
be attached, said : " Any remedy which the plaintiffs
may have by the trustee process, and no other is sug-
gested, is uncertain, doubtful and inadequate, and there
is, therefore, presented a case for relief by this bill." '

§ 38 Patent rights. — The monopoly which a patent con-
fers is considered as property ; 3 the interest of the
patentee may be assigned by operation of law in case of
bankruptcy of the patentee,4 and it may be subjected by
a bill in equity to the payment of his judgment debts,5

1 Gen. Sts. c. 113, § 2.

'2 See Stephens v. Cady, 14 How.
531.

3Gayler v. Wilder, 10 How. 477,
per Taney, Chief-Justice ; Ager v.
Murray, 105 U. S. 126 ; Barnes v.
Morgan, 3 Hun (N. Y.) 704. See
Railroad Co. v. Trimble, 10 Wall. 367.

4 Hesse v. Stevenson, 3 Bos. & P.
565 ; Bloxam v. Elsee, 1 Car. & P. 558 ;
6 Barn. & C. 169 ; Mawman v.Tegg, 2
Russ, 385 ; Edelsten v. Vick, 11 Hare,
78 ; Campbell v. City of Haverhill, 155
U. S. 619, 15 S. C. Rep. 217, and cases
cited ; Barton v. White, 144 Mass. 281,
10 N . E. Rep. 840. In the latter case
the court say (p. 283): " In Stearns
v. Harris, 8 Allen (Mass.), 597, it was
said that ' the words of the insolvent
law, describing and enumerating the
property and rights of property which
pass by the assignment, are large
and comprehensive, and have always
been liberally construed by the court,
so as to include every valuable right
in property, real or personal, not

clearly excepted, whether legal in-
equitable, absolute or conditional,
which could have been enforced by
the debtor in any kind of judicial
process.' The defendants further con-
tend, though without laying very
much stress upon this ground of argu-
ment, that the state has not the power
to enact a statute which has the effect
to pass a title to letters-patent of the
United States ; but we have no doubt
upon this point." But, compare Ash-
croft v. Walworth, 1 Holmes, 152;
Gordon v. Anthony, 16 Blatchf. 234 ;
Carver v. Peck, 131 Mass. 291 ;
Cooper v. Gunn, 4 B. Mon. (Ky.) 594.
See Ager v. Murray, 105 U. S. L26.

5 Ager v. Murray, 105 U. S. 126 ;
Campbell v. City of Haverhill. 155 U.
S. 619, 15 S. C. Rep. 217; Barton v.
White, 144 Mass. 281, 10 N. E. Rep.
840 ; Gillette v. Bate, 10 Abb. N. C.
(N. Y.) 38; Gorrell v. Dickson, 26
Fed. Rep. 454. But see Greene v.
Keene, 14 R. I. 388.

74 PATENT RIGHTS. § 38

and may be taken by a receiver,1 or assignee in insol-
vency.2 Lord Alvaney, referring to the proposition that
an invention was an idea or scheme in a man's head,
which could not be reached by process of law, said : " But
if an inventor avail himself of his knowledge and skill,
and thereby acquire a beneficial interest, which may be
the subject of assignment, I cannot frame to myself an
argument why that interest should not pass in the same
manner as any other property acquired by his personal
industry."3 And in Stephens v. Cady,4 Justice Nelson
said in relation to the incorporeal right secured by the
statute to an author to multiply copies of a map by the
use of a plate, that, though from its intangible character
it was not the subject of seizure or sale at common law,
it could be reached by a creditor's bill and applied to the
payment of the author's debts.5 If the courts should
declare patent rights exempt from appropriation, it would,
as suggested in Sawin v. Guild," be practicable for a
debtor to lock up his whole property, however ample,
from the grasp of his creditors, by investing it in profit-
able patent rights, and thus to defeat the administration
of justice.7 We find the statement, advanced, however,
that it is the patent only which gives the exclusive prop-
erty, and while the right is inchoate it is at least doubtful
whether it has the characteristics of property, such as to
justify a compulsory transfer by the debtor. 8

Tnre Eeach, 14 R. I. 571. Cal. 520; Stevens v. Gladding, 17

Barton v. White, Ml Mass. 281, How. 447 ; Massie v. Watts, 6 Cranch,

10 X. E. Rep. 840; Campbell v. City 148; Storm v. Waddell, 2 Sandf. Ch.

of Baverhill, 155 U. S. 619, 15 S. < '. (X. Y.) 494

Rep. 217. 61 Gall. 485.

Besse v. Stevenson, 3 Boss. & P. 'See Barnes v. Morgan, 3 Hun (N.

565. Y.) 704; Campbell v. City of Haver-

'11 Bow. 531; Sparhawk v. hill, 155 U. S. 619, 15 S. C. Rep. 217.

Yerkes, 142 U. S. 12, 12 S. C. Rep. 104. Gillette v. Hate, 86 X. Y. 94;

> Sadden v. Spader, 20 .Johns. Besse v. Stevenson, 3 Bos. & P. 565.

(N. Y.) 564; Gillette v. Bate, 86 X. Compare Ashcroft v. Walworth, 1

V.sT; Pacific Bank \. Robinson, 57 Holmes, 152; Campbell v. James, 18

§39 POWERS, WHEN ASSETS FOR CREDITORS. 75

§ 39. Powers, when assets for creditors. — Chief-Justice
Gray, in delivering the opinion of the Supreme Judicial
Court of Massachusetts,1 said : " It was settled in the
English Court of Chancery, before the middle of the last
century, that where a person has a general power of
appointment, either by deed or by will, and executes this
power, the property appointed is deemed in equity part
of his assets, and subject to the demands of his creditors
in preference to the claims of his voluntary appointees or
legatees.3 The rule perhaps had its origin in a decree of
Lord Somers, affirmed by the House of Lords, in a case
in which the person executing the power had in effect
reserved the power to himself in granting away the
estate.3 But Lord Hardwicke repeatedly applied it to
cases .of the execution of a general power of appointment
by will of property of which the donee had never had any
ownership or control during his life ; and, while recog-
nizing the logical difficulty that the power, when executed,
took effect as an appointment, not of the testator's own
assets, but of the estate of the donor of the power, said
that the previous cases before Lord Talbot and himself
(of which very meagre and imperfect reports have come
down to us) had established the doctrine, that when there
was a general power of appointment, which it was
absolutely in the donee's pleasure to execute or not, he
might do it for any purpose whatever, and might appoint
the money to be paid to his executors if he pleased, and,
if he executed it voluntarily and without consideration for

Blatchf. 92 : Prime v. Brandon Mfg. ■ See Olney v. Balch, L54 Mass.

Co., 16 Blatch, 453 ; Clan Ranald v. 318, 28 N. E. Rep. 258. Compare

Wyckoff, 41 N. Y. Superior, 530; O'Donnell v. Barbey, 139 Mass. 453 ;

Potter v. Holland, 4 Blatchf. 206; Wales v. Bowdish, 61 Vt. 33, 1 1 Atl.

Barnes v. Morgan, 3 Hun, (N. Y.) 703. Rep. 1000.

1 Clapp v. Ingraham, 126 Mass. 200 ; 3 Thompson v. Towne, Prcc. Ch. 52,

Olney v. Balch, 154 Mass. 318, 28 N. 2 Vern. 319.
E. Rep. 258 : Brandies v. Cochrane,
112 U. S. 352.

76

POWERS, WHEN ASSETS FOR CREDITORS.

§39

the benefit of third persons, the money should be con-
sidered part of his assets, and his creditors should have
the benefit of it.1 The doctrine has been upheld to the
full extent in England ever since.3 Although the sound-
ness of the reasons on which the doctrine rests has been
impugned by Chief-Justice Gibson arguendo, and doubted
by Mr. Justice Story in his Commentaries, the doctrine
is stated both by Judge Story and Chancellor Kent as
well settled ; and it has been affirmed by the highest
court of New Hampshire, in a very able judgment,
delivered by Chief-Justice Parker, and applied to a case in
which a testator devised property in trust to pay such
part of the income as the trustees should think proper to
his son for life ; and after the son's death, to make over
the principal with any accumulated income, to such per-
sons as the son should by will direct.3 A doctrine so
just and equitable in its operation, clearly established by
the laws of England before our Revolution, and sup-
ported by such a weight of authority, cannot be set aside
by a court of chancery because of doubts of the technical
soundness of the reasons on which it was originally
established." Cases establishing this general rule are
numerous.4 The jus disponcndi is to be considered as

1 Townshend v. Wildham, 2 Ves.
Sen. 1, !), 10; Ex parte Caswell, 1
A t lv . 559, 560; Bainton v. Ward, 7
Ves. 503. note ; cited 2 Ves. Sen. 2,
and Belt's Suppl't, 243 : 2 Atk. 172 ;
Pack v. Bathurst, 3 Atk. 269.

2 Chance on Powers, c. 15, § 2 ; 2
Sugden onPowers (7th ed.)27; Flem-
ing v. Buchanan, 3 De G. M. & G.
070.

8 Commonwealth v. Duffield, 12
Penn. St. 277, 27!) 381 ; Story's Eq.
Jur. .' L76, and note; 4 Kent's Com,
339, 340; Johnson v. Cushing, 15 N.
H. 298.

1 Smith v. (Jarey, 2 Dev. & Bat.

Eq. (N. C.) 49: Mackason's Appeal,
42 Pa. St. 338 ; TaUmadge v. Sill, 21
Barh. (N. Y.) 51 (but compare Cutting
v. (Jutting, 86 N. Y. 522) ; 2 Chance
on Powers, £ 1817; Whittington v.
Jennings, 6 Simons, 493 : Lassells v.
Cornwallis. 2 Vein. 465 ; Bainton v.
Ward, 2 Atk. 172; Cackv. Bathurst,
3 Atk. 269; Troughton v. Troughton,
3 Atk. 656; Townshend v. Windham,
2 Ves. Sen. 1 ; Jenny v. Andrews, 6
Madd. 201 ; Ashfield v. Ashfield, 2
Vein. 287; Cutting v. Cutting, 20
Huu (N. Y.) 366; reversed, in part,
in 86 N. Y. 522 ; George v. Milbanke,
9 Ves. Jr. 196 ; Flemming v.

39

POWERS, WHEN ASSETS FOR CREDITORS.

77

the property itself,1 and the general power of disposition
is in effect property.3 In Williams v. Lomas,3 the court
said: "Jenney v. Andrews,4 which has been followed by
other authorities,5 decides this : that where a person
having a general power of appointment by will makes an
appointment, the appointee is a trustee for the creditors,
and the appointed fund is applicable to the payment of
the debts of the donee of the power." And it has been
observed that there is no reason in the nature of things
why a gift or bequest of personal property, with a power
of disposition, should not be measured by the same rule
as a grant or devise of real estate with the same power.0

Buchanan, 3 DeG., M. & G. 976;
Palmer v. Whitmore, 2 Cr. & M. [in
note] 131 ; Nail v. Punter, 5 Sim. 555.
As to creditor's right to enfoi*ce the
execution of a power, examine Rogers
v. Ludlow, 3 Sand. Ch. (N. Y.) 104,
108 ; Kinnan v. Guernsey, 64 How.
Pr. (N. Y.) 253. In Brandies v. Coch-
rane, 112 U. S. 352, the court say :
" It is indeed a rule well established
in England, and recognized in this
country, that where a person has a
general power of appointment, either
by deed or by will, and executes this
power, the property appointed is
deemed, in equity, part of his assets,
and subject to the demands of his cred-
itors in preference to the claims of
his voluntary appointees or legatees."

1 Holmes v. Coghill, 12 Ves. 206.
See Piatt v. Routh, 3 Beav. 257.

2 Bainton v. Ward, 2 Atk. 172.
See Adams on Equity, 99, note 1. In re
Harvey's Estate, L. R. 13 Ch. Div. 216;
Crooke v. County of Kings, 97 N. Y.
457. Mr. May says : ;< The exercise
of a general power of appointment,
either of land (Townshend v. Wind-
ham, 2 Ves. Sr. 1), or a sum of
money (Pack v. Bathurst, 3 Atk. 269),
may be fraudulent and void under

the statute, but where a man has
only a limited or exclusive power of
appointment of course it is different.
He never had any interest in the
property himself which could have
been available to a creditor, or by
which he could have obtained credit."
May on Fraud. Con v. p. 29. See
Sims v. Thomas, 12 Ad. &. E. 536 ;
Hockley v. Mawbey, 1 Ves. Jr. 143,
150.

3 16 Beav. 3.

46Madd. 264.

5 2 Sugden on Powers (6th ed.) 29 ;
1 Sugden on Powers (6th ed.) 123.

6 Cutting v. Cutting, 86 N. Y. 547 ;
Hutton v. Benkard, 92 N. Y. 295.
The reservation of a power of revoca-
tion or appointment to other uses
does not affect the validity of a con-
veyance until the power is exercise. 1,
nor does it tend to create an
imputation of bad faith on the tran-
sact ion. See Huguenin v. Baseley,
14 Ves. 273 ; Coutts v. Acworth, L.
R. 8 Eq. 558 ; Wallaston v. Tribe, L.
R. 9 Eq. 44 ; Everitt v Everitt, L. R.
10 Eq. 405 ; Hall v. Hall. L. R. 14 Eq.
365; Phillips v. Mullings, L. R. 7 Ch.
App. 244; Hall v. Hall, L. R. 8
Ch. App. 430 : Toker v. Toker, 3 De

78 POWERS IN NEW YORK. § 40

§ 40. Statutory change as to powers in New York. — The
principle which we have been considering did not meet
the entire favor of the revisers of the statutes of New
York, and the rule just laid down seems to have been
practically overturned by statute in that State.1 The
facts in Cutting v. Cutting, a case in which the statutes
relating to the abolition of powers in New York were
construed, were as follows : C. gave real and personal
estate to her executor to collect the income during the
life of her son and apply it to his use, and after his death
to transfer the estate to the person the son might desig-
nate by will. The son having made the appointment, it
was held that the estate was not chargeable after the
son's death with a judgment obtained against him in his
lifetime. It will be apparent at a glance that the result
of the legislation in New York as interpreted in this case,
constitutes an important innovation upon what was a set-
tled principle of equity, and places beyond the reach of
creditors property which equity considered should be sub-
ject to their remedies.3 A policy which enables debtors
to contract obligations, and defeat their payment by exer-
cising a power of appointment in favor of a gratuitous
appointee, deprives creditors of an important source of
relief, and tends to establish in the debtor rights over
property which the creditor cannot reach, a result to be
universally deplored.3

G., .1. & S. 487. The power is not an Clifton, 101 U. S. 225, per Field, J.;

Lnteresl in the property which can be Brandies v. Cochrane, 112 U. S. 353.

transferred t'> another, or Hold on 'Cutting v. Cutting, 20 Hun (N.

ution, '>r devised by will. The Y.) 367, on appeal, 86 X. Y. 537;

grantor could exercise 1 1 1 « - power Crooke v. County of Kings, 07 X. Y.

either by deed or will, hut he could 457. See Hume v. Randall, 141 X. Y.

Dot vesl the power in any other per- 499, 36 N. E. Rep. 402.

3on to be thus executed. Nor is the ' See § 39, and cases cited,

power a chose Inaction; nor does it :; Where the debtor is entitled to

constitute assets of a bankrupl which the proceeds of lands arising under a

will vest in an assignee. Jones v. power, such lands or the proceeds

§ 41 GIFTS OF SMALL VALUE. 79

§ 41. Gifts of small value. — The Supreme Court of
Maine1 recognize the rule already adverted to that gifts
cannot be regarded as fraudulent if, from their almost
infinitesimal value, the rights of creditors would not be
impaired. In French v. Holmes,2 it appeared that the
father made a gift to his child of a lamb which the ewe
refused to recognize. The court observed that if the
lamb had been attached it would not have sold for a sum
sufficient to pay the fees of the officer making the sale,
much less the costs of obtaining the judgment. Gifts of
insignificant intrinsic value, made from time to time by a
husband to his wife, will not be avoided because he dies
insolvent.3 If the property was exempt, the gift was
clearly no interference with the rights of creditors. The
court further argued : " Now could such a gift hinder,
delay, or defraud creditors? The fraudulent intent is to
be collected from the comparative value and magnitude
of the gift. Can any one believe the existence of a
fraudulent intent?" The opinion cited with approval
Hopkirk v. Randolph,4 where the gift consisted of two
negro girls and a riding horse. The learned Chief-Justice
Marshall in that case seemed to consider that trivial gifts,
made without any view to harm creditors, and with inten-
tions obviously fair and proper, ought to be exempted
from the general rule in favor of creditors. " They do
not," continued the Chief-Justice, "much differ from wed-
ding clothes, if rather more expensive than usual, from

cannot be taken on execution. The attaches to the proceeds and does not

equitable interests of the debtor follow the land. Sayles v. Best, 140

therein must be reached in equity, N. Y. 368; Ackerman v. Gorton, 07

and the return of execution is a con- N. Y. 63.

dition precedent to maintaining the ' French v. Holmes, 67 Me. 193 ;

suit. Harvey v. Brisbin, 143 N. Y. Klosterman v. Vader. 6 Wash. 99, 32

151, 38 N. E. Rep. 108. Where the Pac. Rep. 1055.

debtor is vested with the title to land 2 67 Me. 193. See § 23.

subject to a power to be exercised for 3 Estate of Gross. 19 Phila (Pa.) 80.

his benefit a judgment against him 42 Brock. 140.

So DEBTS FORGIVEN OR CANCELLED. §§42,43

jewels, or an instrument of music, given by a man whose
circumstances justified the gift. I have never known a
case in which such gifts so made have been called into
question." '

§ 42. Debts forgiven or cancelled. — In Sibthorp v.
Moxom,2 it was said that where a testator gave or for-
gave a debt this was a testamentary act, and would not be
good as against creditors.3 Manifestly a cancellation by
an insolvent of a live and subsisting asset, is a fraud upon
creditors. Hence, where a debtor gave up and cancelled
without payment, a note held by him against a third
party, the court very promptly decided that, after the
debtor's decease, his administrator might ignore the can-
cellation, and sue upon the note for the benefit of
creditors.4 Martin v. Root5 is a pointed illustration of
a different phase of this doctrine. One Larned conveyed
a farm to Root and others, and furnished the grantees
the means with which to remove the incumbrances upon
it, the conceded object of the transaction being to keep
the farm out of the reach of Larned's creditors. Root
gave Larned a note for $5,072.43, and at the same time
took back a written promise from Larned that the note
should never be collected. Larned having died insolvent,
his administrator was allowed to recover on the note, and
the agreement that the note should not be collected was
held void in respect to creditors.

§ 43. Enforcing promises of third parties. — The doctrine

• Partridge v. Gopp, Ami.. 596. 8 Compare, generally as to the efted

Compare Eanby v. Logan, I Duv. of cancellation, Martin v. Root, I?

(Ky.) 342; Garrison v. Monaghan, 33 Mas , 322, per Chief-Justice Parker;

Pa. St 232; Estate of Gross, 19 Phila. McGay v. Keilback, II A.bb. Pr. iX.

JO, reviewing the cases, Lush v. Y.i 142; Wise \. Tripp, 13 Me. 12.

Wilkinson, 5 Ves. 384; Chambers v. 'Tolman v. Marlborough, 3 N. H.

Spencer, 5 Watte (Pa.) 104. See §§ 57.

15, 23, and note. 5 17 Mass. 322.

-:; Alkyn

§ 43 PROMISES "I 1 MIKl. PAR III-. 8l

of Lawrence v. Fox,1 and cases embodying the general
principle that where one person, for a valuable considera-
tion, engages with another, by a simple contract, to do
j ome act for the benefit of a third person, the latter, who
would enjoy the benefit of the act if performed, may
maintain an action for breach of the engagement/- has
been successfully invoked in aid of creditors. Tims in
Kingsbury v. Earle,3 it appeared that a father had con-
veyed* lands to his sons upon their orally agreeing, in
consideration of the conveyance, to pay all his debts.
The court held that the creditors of the father might
avail themselves of the agreement, and bring actions
founded on the promise against the sons to recover
debts, even though the amount of the debts exceeded
the value of the land, and that the consideration named
in the deed would not determine its actual value.
An agreement of this character is not a promise to pay
the debt of another within the statute of frauds. And
where partnership assets are assigned, and as part of the
consideration the purchaser agreed to pay the firm debts,

'20 N. Y. 268. See Prime v. Koeh- Y. 236: Hall v. Marston, 17 Mass.

ler, 77 N. Y. 91; Gifford v. Corrigan, 575 ; Cross v. Truesdale, 28 Ind. 1 1 ;

117 N. Y. 263, 22 N. E. Rep. 756 ; Scott v. Gill, 19 Iowa, 187; Rice v.

Clark v. Howard, 150 N. Y. 238. Savery, 22 Iowa, 470; Devol v. M,

2 Hand v. Kennedy, 83 N. Y. 154 ; Intosh, 23 Ind. 529 ; Allen v. Thomas.

Wager v. Link, 134 N. Y. 122, 31 N. 3 Met. (Ky.) 198 : Jordan v. White, 20

E. Rep. 213; First Nat. Bk. v. Chal- Minn. 91; Rogers v. Gosnell, 58 Mo.

mers, 144 N. Y. 432, 39 N. E. Rep. 590; Wiggins v. McDonald, IN Cal.

331; Clark v. Howard, 150 N. Y. 238; 126 ; Miller v. Florer, 15 Ohio St. 151 ;

Burr v. Beers, 24 N. Y. 178 ; Glen v. Green v. Richardson, 4 Col. 584 ; Hank

Hope Mutual Life Ins. Co., 56 N. Y. of the Metropolis v. Guttschlick, 11

381; Ricard v. Sanderson, 41 N. Y. Peters, 31; Bradwell v. Weeks, 1

179; Secorv. Lord, 3 Keyes (N. Y) Johns. Ch. (N. Y.) 206. Compare

525; Thorp v. Keokuk Coal Co., 48 Mtna, Nat. Bank. v. Fourth Nat. Bank,

N. Y. 253: Campbell v. Smith, 71 N. 46 N. Y. 82 ; Lean v. Edge, M X. Y.

Y. 26; Van Schaick v. Third Ave. R. 514 ; Simson v. Brown, (is X. Y.

R. Co., 38 N. Y. 346 ; Coster v. Mayor Belknap v. Bender, 75 X. Y. 449.
etc., 43 N. Y. 411 ; Barker v. Bradley, 3 27 Hun (N. Y., 141, cf. O'Neil v.

42 N. Y. 319 ; Vrooman v. Turner, 69 Hudson Valley [ce Co., M Sun (N.

N. Y. 284 ; Garnsey v. Rogers, 47 N. Y.) 105, 26 N. Y. Supp. 598.

6

82 PROMISES OF THIRD PARTIES. § 43

any creditor may avail himself of the promise and sue the
purchaser for the amount of his claim j1 and if, under
such circumstances, a bond is taken, the creditors may
get the benefit of it.~ But the principal running through
these cases is not universally recognized. It does not
fully obtain in the English cases or in Massachusetts. In
the latter Commonwealth, Gray, J., in the course of an
opinion, said : " The general rule of law is, that a person
who is not a party to a simple contract, and from whom no
consideration moves, cannot sue on the contract, and con-
sequently that a promise made by one person to another,
for the benefit of a third person who is a stranger to the
consideration, will not support an action by the latter."3
It is foreign to the scope of this treatise to fully discuss in
all its bearings the rule allowing third parties to enforce
these promises made for their benefit. It certainly has
obtained a deep and wide foundation in our law; its
operation avoids circuity of action, reduces the expense
and volume of litigation, and brings the real claimant and
party beneficially interested in the controversy before the
court. The arguments against its adoption, based upon
common-law theories and rules, are inequitable and
technical, and lead to a harsh result.4

1 Sanders v. Clason, 13 Minn. 379 ; the latter would sell the property

Barlow v. Myers, 6 T. & C. (N. Y.) and apply the proceeds upon the

183 ; Meyer v. Lowell, 44 Mo. 328. plaintiff's execution. The receiver

1 Kimball v. Nbyes, 17 Wis. 695; realized on the sale. The plaintiff

Devol v. Mcintosh, 23 Ind. 529. Es- in the execution Drought this action

pecially Claflin v. Ostrom, 54 N. Y. against the receiver on the parol

581. promise made to the sheriff for plain-

3 Exchange Bank of St. Louis v. tiff's benefit. The court decided that

Rice, 107 Mass. 41. although the promise was not made

4In Beckfr v. Torrance, 31 N. Y. totheplaintiffdirectly.it was avail-

631-643, it appeared thai the plaintiff able to him on the principle of Law-

had levied upon certain property of rencev. Fox, 20 N. Y. 268, and Burr

tin defendant; subsequently ;i re- v. Beers, 24 N. Y. 178, and that he

ceiver was appointed al tin- instance had the right to adopt and enforce the

of another creditor. The sheriff re- promise inst cud of proceeding directly

1 the levy upon receiving a against the sheriff,
promise from the receiver that

44

TRACING THE FUND.

83

44. Tracing the fund. — It is a clearly established prin-
ciple in equity jurisprudence that whenever a trustee, has
been guilty of a breach of trust, and has transferred the
property by sale or otherwise to any third person, the cestui
que trust has a full right to follow such property into the
hands of the third person, unless the latter stands in the
position of a bona fide purchaser for valuable consideration
without notice ; and if the trustee has invested the trust
property or its proceeds in any other property into which
it can be distinctly traced, the cestui que trust may follow
it into the new investment.1 This doctrine has been ap-
propriated and applied to cases of property alienated in
fraud of creditors ; and it has been expressly held that a
complaining creditor has a right to follow the fund result,
ing from the covinous alienation, into any property in

1 Oliver v. Piatt, 3 How. 401 ; Mc-
Leod v. First Nat. Bank, 42 Miss. 99 ;
Jones v. Shaddock, 41 Ala. 262 ; La-
throp v. Bainpton, 81 Cal. 17 ; Story's
Eq. Jur. § 1258 ; Mansellv. Mansell, 2
P. Wins. 079 ; Dewey v. Kelton, 18
N. B. R. 218 ; Pennell v Deffell, 4 De
G., M. & G. 372 ; Frith v. Cartland, 2
Hem. & M. 417, 420 ; In re Hallet's
Estate, Knatchbull v. Hallet, L. R. 13
Ch. D. 096 ; Farmers & Mechanics'
Nat. Bank. v. King, 57 Pa. St. 202.
Compare Smith v. Bowen, 35 N. Y.
83 ; Lyfordv. Thurston, 10 N. H. 399 ;
Barr v. Cubbage, 52 Mo. 404 ; Hooley
v. Gieve, 9 Abb. N. C. (N. Y.) 8. See
§ 28. Examine especially National
Bank v. Insurance Co., 104 U. S. 54 ;
Jones v. Van Doren, 130 U. S. 691,
9 S. C. Rep. 085 ; Union Stock Yards
Bank v. Gillespie, 137 U. S. 421, 11 S.
C. Rep. 118 ; Spokane Co. v. Clark, 61
Fed. Rep. 538 ; Peters v. Bain, 133 U.
S. 070, 10 S. C Rep. 354. It is said
by Mr. Justice Bradley in Freling-
huysen v. Nugent, 30 Fed. Rep. 229,

239. " Formerly the equitable right of
following misapplied money or other
property into the hands of the parties
receiving it, depended upon the ability
of identifying it ; the equity attaching
only to the very property misapplied.
This right was first extended to the
proceeds of the property, namely, to
that which was procured in place of
it by exchange, purchase, or sale.
But if it became confused with other
property of the same kind, so as not
to be distinguishable, without any
fault 011 the part of the possessor, the
equity was lost. Finally, however,
it has been held as the better doctrine
that confusion does not destroy the
equity entirely, but converts it into a
charge upon the entire mass, giving
to the party injured by the unlawful
diversion a priority of right over the
other creditorsof the possessor. This
is as far as the rule has been carried."
Quoted in Peters v. Bain, 133 U. S.
094, 10 S. C. Rep. 354.

84 INCOME OF TRUST ESTATE. § 45

which it was invested, so far as it can be traced,1 But in
creditors' suits the subject-matter of pursuit should be
something so specific that, as to it, either in law or in equity,
the plaintiff's judgment or execution, or the filing of the
bill, or the appointment of a receiver, will create a lien
or make a title.2 In Gillette v. Bate,:i the fraudulent
grantee had taken stock in a corporation in exchange for
the property fraudulently transferred, and it was held
that creditors could reach the stock, although it had
increased in value.4 Where property is obtained by
fraud, and the proceeds of a sale of it, such as notes, are
identified in the hands of a voluntary assignee of the
fraudulent vendee, a court of equity may reach such pro-
ceeds for the defrauded vendor.5 So a defrauded ven-
dor may follow the proceeds of his goods in the hands of
a sheriff who has levied on them,6 and a cestui que trust
may recover the proceeds of a life-insurance policy taken
out by a defaulting trustee with the trust moneys in the
name of the trustee's wife.7 To sustain a claim for pay-
ment out of a fund in the hands of an assignee or receiver
upon the ground of fraud, it must appear that the fund
was increased by having in its mass the very thing parted
with or its proceeds.8

§45. Income of trust estate. — Williams v. Thorn9

1 Clements v. Moore, 6 Wall. 315, 6 Converse v. Sickles, 146 N. Y.
31 G. See Chalfont v. Grant, 1 Am. 200, 40 N. E. Rep. 777.

Insolv. R. 251 ; Marsh v. Burroughs, ' Holmes v. Gilman, 138 N. Y. 369,

1 Woods, 463 ; Solinsky v. Lincoln 34 N. E. Rep. 205.

Savings Bank, 85 Tenn. 372. 8 City Bank of Hopkinsville v.

2 Ogden v. Wood, 51 How. Pr. (N. Blackmore, 43 U. S. App. 617 ; Boone
Y.)375. See §28. Co. Nat. Bank v. Latimer, 67 Fed.

8 10 Abb. N. C. (N. Y.) 92. Rep. 27; Cragie v. Hadley, 99 N.

4 See Steere v. Hoagland, 50 111. 377. Y. 131, 1 N. E. Rep. 537.

Compare Phipps v. Sedgwick, 95 .U. '■> 70 N. Y. 270. See McEvoy v.

S. 3. Appleby, 27 Hun (N. Y.) 44; Tolles

American Sugar Refining I !o. v. v. Wood, (.)U X. Y. 616; Wetmore v.

Fancher, 145 N. V. 553,40 N. E. Rep. Wetmore, 149 N. Y. 520. Compare

206. Spindle v. Shreve, 111 U. S. 546, 4 S.

§ 45 INCOME OF TRUST ESTATE. 85

firmly established the doctrine, in New York State at
least, that the income of a trust fund enjoyed by the
debtor beyond a sum considered necessary for the actual
support of himself, his wife and infant children,1 may be
reached by judgment-creditors, and, like the rest of the
debtor's estate, such surplus income is liable to be taken
for the payment of creditors. This doctrine was not
established without a struggle, and debtors are still con-
stantly seeking to circumvent it.3 The Chancellor
observed in Hallett v. Thompson3 that it was contrary
to sound policy to permit a person to have the ownership
of property for his own purposes, and be able at the same
time to keep it from his creditors. A creditor, by filing
a bill, acquires a lien on such surplus income superior to
the claims of general creditors or assignees of the
beneficiary.4 In Williams v. Thorn,5 Rapallo, J., said:
" By the analogy which courts of justice have always
endeavored to preserve between estates or interests in
land, or the income thereof, and similar interests in
personal property, the right of a judgment-creditor to
reach the surplus rents and profits of land, beyond what
is necessary for the support and maintenance of the
debtor and his family, entitles him to maintain a creditor's
bill which will reach a similar interest of the debtor in the
surplus income of personal property held by another for
his use and benefit ; but not that part of the income

C. Eep. 522; Nichols v. Eaton, 91 U. Hun (N. Y.) 117; McEvoy v. Ap-

S. 716 ; Cutting v. Cutting, 86 N. Y. plehy, 27 Hun (N. Y.) 44.

546. If in a suit to which the benefi- -' See Nichols v. Eaton, 91 U. S.

ciary is a party a trust has been de- 716 ; Spindle v. Shreve, 111 U. S. 542,

clared valid, the decree is binding on 546, 4 S. C. Rep. 522 ; Wetmore v.

the judgment creditors. Pray v. Wetmore, 149 N. Y. 520 ; also Chap.

Hegeman, 98 N. Y. 351 ; Cook v. Lowry, XXIII.

95 N. Y. 111. 5 Paige N. Y. 586.

1 Wetmore v. Wetmore, 149 N. Y. 4Tolles v. Wood, 99 N. Y. 616, 1 N.

529 ; Tolles v. Wood, 99 N. Y. 616 ; E. Rep. 251.

Bunnell v. Gardner, 4 App. Div. (N. 5 70 N. Y. 273.
Y.) 321 ; Andrews v. Whitney, 82

86 INCOME OF TRUST ESTATE. § 45

which may be necessary for the support of the judgment-
debtor." The debtor's station in life, the manner in
which he has been reared and educated, his habits and
the means he may have to aid in his support are consid-
ered.1 The doctrine of Williams v. Thorne, with refer-
ence to reaching surplus trust income seems to have been
acknowledged in the earlier New York cases, both as to
the income of realty and personalty 2 though there is a
dictum by Wright, J., in Campbell v. Foster,3 denying
that the income of the cestui que trust can be diverted to
creditors.4 The confusion introduced into this branch of
the law in New York State which led to the general, but
erroneous, belief that a debtor's trust income, though
fabulous in amount, was not, in any form, available to
creditors, was partially attributable to the fact that the
unsuccessful actions had been instituted by receivers in
supplementary proceedings,5 as to whom the courts held
the right to reach income did not pass until it had actu-
ally accumulated.0 But where the judgment creditor
sues, not only the income accumulated in the trustees'
hands,7 which may also be reached by supplementary
proceedings, but the future income, above the sum found
necessary for the support and use of the cestui que
trttst, and those legally dependent upon him, may be
impounded.8 Hann v. Van Voorhis,9 holding that only

1 Wetmore v. Wetmore, 149 N. Y. Scott v. Nevius, 6 Duer (N. Y.) 672 ;
520. Locke v. Mabbett, 2 Kcyes (N. Y.)

2 See Rider v. Mason, 4 Sandf. Ch. 457 ; Campbell v. Foster, 35 X. Y.
(N. Y.) 351 ; Sillick v. Mason, 2 Barb. 361.

Ch. (N. Y.) 79 ; Braiuhall v. Ferris, 14 7The beneficiary may assign ac-

N. Y. 41 : Scott v. Nevius, 6 Duer (N. crued income. Tolles v. Wood, 99 N.

X.) 072 : Graff v. Bonnctt, 31 N. Y. 9. Y. 01(5, 1 N. E. Rep. 251 ; Matter of

35 X. Y. 361. Valentine, 5 Misc. (N. Y.) 479, 26 N.

'See Locke v. Mabbett, 2 Keyes (N. Y. Sup]). 716.

Y.)457, ••; AM.. A pp. I ).--•. (N. Y.) 68. " Williams v. Thorn. 70 X. Y. 270;

Continental Trust Co. v. Wet- Wetmore v. Wetmore, 149 N. Y. 520 ;

more, M Hun (N. V. 1 9, 21 N. Y. Howard \. Leonard, 3 App. Div. (X.

Supp. 746. Y.)277.

•See Graff v. Bonnett, 31 N. Y. 9 ; »15 Abb. Pr. X. S. (N. Y.) 79.

§ 46 RULE AS TO EXEMPT PROPERTY. Sj

actual accumulations in the hands of the trustees could
be reached, must be regarded as overruled by Williams
v. Thorn.1 The burden of proving that the income
exceeds the requirement of the debtor rests upon the
creditor.2 A creditor, it may be noted, may also get the
benefit of an annuity given by a will in lieu of dower.3
A wife may also reach her former husband's surplus
income and apply it to the payment of the alimony due
her. In some respects she stands in the position of an
ordinary creditor, in others her rights are superior to those
of an ordinary creditor, as it is the duty of the husband to
maintain her according to the directions of the decree not-
withstanding- the divorce. 4

§ 46. Rule as to exempt property.— It being a test of a
fraudulent transfer that the property alienated must be of
some value out of which the creditor could have realized
the whole or a portion of his claim,5 it would seem to
follow logically that exempt property is not susceptible

1 70 N. Y. 279. Wetmore v. Wet- Greene, 125 N. Y. 506, 26 N. E. Rep.

more, 149 N. Y. 529. See, also, infra, 739.

Chap. XXIII on Spendthrift Trusts; -Bunnell v. Gardner, 4 App. Div.

and compare Nichols v. Eaton, 91 U. (N. Y.) 321 ; Kilroy v. Wood, 42 Hun

S. 716 ; Broadway Nat. Bank v. (N. Y.) 636. Where a wife is the

Adams, 133 Mass. 170; Billings v. beneficiary and debtor her creditors

Marsh, 153 Mass. 311, 26 N. E. Rep. may reach such surplus income as is

1000 ; Wemyss v. White, 159 Mass. not needed for the support of the

484, 34 N. E. Rep. 718; Spindle v. wife and children. Howard v.

Shreve, 9 Biss. 199 ; Hyde v. Woods, Leonard, 3 App. Div. (N. Y.) 277.

94 U. S. 523, 526. Wetmore v. Trus 3Degraw v. Clason, 11 Paige (N. Y.)

low, 51 N. Y. 338, was not a suit to 136.

reach surplus, but the whole income, 4 Examine Romaine v. Chauncey,

on the ground that the beneficiary 129 N. Yr. 566 ; Wetmore v. Wetmore,

was also a trustee. As to the effect 149 N. Y. 520; Andrews v. Whit my,

of appointing the beneficiary trustee 82 Hun (N. Y.) 117 ; Miller v. Miller,

see Losey v. Stanley, 147 N. Y. 560, 7 Hun (N. Y.), 208 ; Thompson v.

42 N. E. Rep. 8; Rose v. Hatch, 125 N. Thompson, 52 Him (N. Y.) 456, 5 N.

Y. 427, 26 N. E. Rep. 467 : Greene v. Y. Supp. 604.

5 See 8 23.

RULE AS TO EXEMPT PROPERTY.

46

of fraudulent alienation.1 As the creditor possesses no
right to have that class of property applied in satisfaction
of his claim while the debtor owns it, and would be power-
less to seize or appropriate it for that purpose were it
restored to the debtor's possession, the legitimate
deduction would seem to be that the creditor's process
could not be fastened upon it in the hands of the debtor's
alleged fraudulent vendee." As to alienations of exempt
property there may be a bad motive but no illegal act.3
When a fraudulent transfer has been avoided, it leaves the
creditor to enforce his remedy against the property in the
same manner as if the fraudulent transfer had never been
executed. The creditor cannot ask to be placed in a
better position in respect to the property than he would
have occupied if no fraudulent bill of sale had ever
been made.4 On the point whether the fact that

1 In Denny v. Bennett, 128 U. S.
495, 9 S. C. Rep. 134, the court say:
"No reason has been suggested why
the legislature could not exempt all
interests in landed estate from exe-
cution and sale under judgments
against the owner, and perhaps all
his personal property."

8 See Wood v. Chambers, 20 Texas,
247 ; Foster v. McGregor, 11 Vt. 595 ;
Whiting v. Barrett, 7 Lans. (N. Y.)
106 ; Bean v. Smith, 2 Mason, 252 ;
Winchester v. Gaddy, 72 N. C. 115 ;
Legro v. Lord, 10 Me. 161 ; Smith v.
Allen, 39 Miss. 469; Youmans v. Boom-
bower, 3 T. & C. (N. Y.) 21 ; Pike v.
Miles, 23 Wis. 164 ; Dreutzer v. Bell,
11 Wis. 114 : Smillie v. Quinn. 90 N.
Y. 493 ; Robb v. Brewer. 15 Rep.
048 ; Premo v. Hewitt, 55 Vt. 363 ;
Blair v. Smith, 114 Ind. 114. 15 N. E.
Rep. 817; Bloedorn v. Jewell, 34 Neb.
650, 52 N. W. Rep. 367; Shawano
County Bank v. Koeppen, 7s Wise 5:;:!,
17 N. \V. Rep. 723; Beyer v. Thoeming,
81 la. 517, 46 N. W. Rep. 1074 ; Payne

v.Wilson, 76 la. 377, 41 N. W. Rep. 45 ;
Dull v. Merrill, 69 Mich. 49, 36 N. W.
Rep. 677 ; Horton v. Kelly, 40 Minn .
193, 41 N. W. Rep. 1031 ; Munson v.
Carter, 40 Neb. 417, 58 N. W. Rep.
931 ; Rozek v. Redzinski, 87 Wise.
525, 58 N. W. Rep. 262 : Nance v.
Nance, 84 Ala. 375, 4 So. Rep. 699 ;
Kvello v. Taylor, 5 N. Dak. 78.

3 O'Connor v. Ward, 60 Miss. 1037.
"To property so exempted the credi-
tor has no right to look, and does not
look, as a means of payment when his
debt is created ; and while this court
has steadily held, under the constitu-
tional provision against impairing the
obligations of contracts by State laws,
that such exemption laws, when first
enacted, were invalid as to debts then
in existence, it has always held, that,
as to contracts made thereafter, the
exemption were valid." Nichols v.
Eaton, 91 U. S. 726.

'Sheldon v. Weeks, 7 N. Y. Leg.
Obs. 60.

§ 46 RULE AS TO EXEMPT PROPERTY. 89

land has been purchased with money which itself
was exempt, such as pension money, prevents the
claims of creditors from attaching to it, the decisions
are conflicting. Kentucky denies the exemption,1 while
New York favors it.2 And it seems from the current
of adjudications that a conveyance of lands set aside for
fraud at the suit of creditors does not estop the grantor
from claiming a homestead in the premises thus con-
veyed. Such a conveyance does not constitute an
abandonment of the homestead so as to open it to cred-
itors.3 A person may change his homestead, and where
in order to reduce the encumbrance on his new home-
stead he gives such encumbrancer a mortgage on his old
one, this transaction cannot be attacked by his creditors.4
A general assignment is not invalidated by a clause which
reserves all exempt property;5 nothing is withheld
which the creditors are entitled to have included in the
trust ; and in New York a receiver of a judgment-debtor
gets no title to exemptions.6 The exemption is said, how-
ever, to endure only during the lifetime of the party, and

1 Johnson v. Elkins, 90 Ky. 163, 13 tors is not predicable of the convey-
S. W. Rep. 448 ; Hudspeth v. Hani- ance of property thus exempt ; and
son, 6 Ky. Law Rep. 304. so the title to it is not impeachable

2 Yates Co. Nat. Bank v. Carpenter, by creditors of the debtor making
119 N. Y. 550, 23 N. E. Rep. 1108. such conveyance." Proutv. Vaughn,

3 Turner v. Vaughan, 33 Ark. 460 ; 52 Vt. 459.

Thompson on Homesteads, J: 408, etc., 4 Palmer v. Hawes, 80 Wise. 474,

and cases cited. " It is evident," says 50 N. W. Rep. 341 ; Bogan v. Cleve-

Mr. Freeman, " that creditors cannot land, 52 Ark. 101, 12 S. W. Rep. 159.

be defrauded, hindered, or delayed by 5 Richardson v. Marqueze, 59 Miss,

the transfer of property which, neither 80, 42 Am. Rep. 353; Hildebrand

at law nor in equity, can be made to v. Bowman, 100 Pa. St. 580. See

contribute to the satisfaction of their Smith v. Mitchell, 12 Mich. 180 ;

debts. Hence it is almost universally Mulford v. Shirk, 26 Pa. St. 473;

conceded that property which is, by Heckman v. Messinger, 49 Pa. St.

statute, exempt from execution, can- 465. Contra, Sugg v. Tillman, 2 Swan

not be reached by creditors on the (Tenn.) 208.

ground that it has been fraudulently 6 Finnin v. Malloy, 33 N. Y. Super,

transferred." Freeman on Execu- Ct. 383 ; Cooney v. Cooney, 65 Barb,

tions, § 138. " Fraud against credi- (N. Y.) 524.

9o

PURCHASES OF EXEMPT PROPERTY.

47

consequently a gift of exempt personalty, intended to
take effect upon the death of the donor, and made with
the object of defrauding" creditors, cannot be sustained.1
The property must have been exempt at the time
the conveyance was made ; if the right of exemption
has arisen since the alleged fraudulent conveyance,
the better rule is that it cannot be relied upon as a
defense. ~

§ 47. Fraudulent purchases of exempt property. — In con-
formity with the general rule that exempt property is not
usually susceptible of fraudulent alienation as regards
creditors,3 the courts have decided that there is no intel-
ligible ground upon which it can be held to be fraudulent
for a person whose property does not, in the aggregate,

1 Martin v. Crosby, 11 Lea (Term.)
198. In Tillotson v. Wolcotfc, 48 N.
Y. 190, it appeared that the debtor
had recovered a judgment against a
creditor for an unlawful levy upon
and sale of the debtor's exempt prop-
erty. A creditor sought to get the
benefit of this judgment on the ground
that the character of the property had
been changed. The court said: "It
would be useless to grant the privi-
lege contained in the statute if it
could be rendered of no effect by re-
fusing an adequate remedy for the
invasion of the exemption ; or by per-
mitting a recovery, when obtained
for such invasion, t<> be wrested from
the debtor by proceedings on behalf
of his creditors. The judgment,
when recovered by the debtor for
the wrongful invasion of his privilege
of the exemption of his property
from Levy and sale, represents the
property for the value of which it
was recovered. Ee may make an-
other investment of the money to be
recovered in the same description of

property, in the possession of which,
as a householder, or person providing
for the support of his family, the

statute will again protect him

The proceeds of the judgment should
be held to be protected under the
statute, as exempt property, until
sufficient time lias elapsed to afford
the debtor a reasonable opportunity
to again purchase the description of
property necessary to enable him to
support his family, and in the pos-
session of which the law will protect
him as against the claims of credi-
tors." See Andrews v. Rowan, 28
How. Pr. (N. Y.) 120.

' Phenix Ins. Co. v. Fielder, 133
Ind. 557, 33 N. E. Rep. 270; Kingen
v. Stroh, 130 Ind. 010, 36 N. E. Rep.
519.

8Boggs v. Thompson. 13 Neb. 403;
Derby v. Weyrich, 8 Neb. 174; Crum-
inen v. Be 1, 08 N. C. 494. See

16; Nelson v. Frey, 4 Tex. App. Civ.
(as. 248; Yates County Nat. Bank
v. Carpenter, 119 N. Y. 550, 23 N. E.
Rep. 1108.

§ 47 PURCHASES OF EXEMPT PROPERTY. 91

exceed the value of all the exemptions, but a portion of
which property is in a form not exempt, to convert or
exchange it into the particular kinds of property which
are exempt. Thus in O'Donnell v. Segar,1 the court
argued: "The only fraud claimed to have existed in
reference to the oxen, was that he might fraudulently
have acquired them from the proceeds or exchange of
other property which was not exempt, and this with the
intent to defeat the claims of creditors. This, in my
opinion, if true, does not constitute legal fraud, so long
as he was, in fact, engaged in one of the occupations

mentioned in which the use of the cattle was

needed." In Randall v. Buffington,2 the court decided
that a general creditor of an insolvent debtor could not
subject a homestead to liability for his debts notwith-
standing the insolvent had applied property in his hands
to the payment of a debt which was a lien on the home-
stead.3 " It must be remembered," said Chief-Justice
Breese, "that it is not a fraud on creditors to buy a home-
stead which would be beyond their reach."4 This would
seem to afford a debtor an opportunity to practice a
species of petty fraud upon his creditors, but, as exemp-
tions of property from execution are usually very limited
in amount,5 and the policy of the law is to prevent the
creditor from absolutely stripping the debtor of every
vestige of property, and of all the necessary conveniences
of living, or means of gaining a subsistence, the result
is not to be deprecated. Manifestly the creditor should
not be favored to the extent of absolutely crippling and
pauperizing the debtor,6 or rendering him a public charge.

'25 Mich. 377. 5See Nichols v. Eaton, 91 U. S. 726.

MOCal. 493. BSee Hixon v. George, 18 Kansas

»kSee In re Henkel, 2 Sawyer, 308. 253. "The debtor, by securing a

"Cipperly v. Rhodes, 53 111. 350. homestead for himself and family,

See, also, Finn v. Krut, (Tex. Ct. Civ. whether by an arrangement with

App. 1896) 34 S. W. Rep. 1013. creditors who might levy on it, or bj

92

COVINOUS ALIENATIONS OF EXEMPTIONS.

§48

But where the statute exempts from the claims of cred-
itors a homestead, especially when such exemption is
irrespective of its value, it would lead to the grossest
fraud if a debtor, on the eve of insolvency, were allowed
to invest his money in exempt property of this kind.1

§48. Covinous alienations of exemptions. — A convey-
ance of homestead by an embarrassed debtor and his wife
to a third party, and by the third party to the wife, cannot
be set aside as fraudulent and void as to creditors, for the
homestead is out of their reach,2 and in general a volun-
tary conveyance of property exempt from execution vests
a good title in the donee, as against the creditors of the
donor.8 The creditor, as we have said, cannot be injured
or defrauded by the transfer of property which is, by
positive law, expressly exempt from seizure to satisfy
their debts.4 The dissolution of an insolvent firm and

the purchase of a house, or by moving
into a house which lie already owns,
takes nothing from his creditors
which the law has secured to them,
or in which they have any vested
right. He conceals no property. He
merely puts his property into a shape
in which it will be the subject of a
beneficial provision for himself which
the law recognizes and allows."
Hoar, J., in Tucker v. Drake, 11 Allen,
(Mass.) 146.

/// re Boothroyd, 3 Fed. Cases, 892,
14 N. B. R. 223 ; Peninsular Stove Co.
v. Roark, (la.) 63 N. W. Rep. 726.
But see Jacob}' v. Parkland Distilling
Co., 41 Minn. 227, 43 N. W. Rep. 52.

- Morrison \. Abbott, 27 Minn. 1 10.
See Ferguson v. Knmler, 27 Minn.
L56 ; Baldwin v. Rogers, 28 Minn.
.144; McFarland v. Goodman, 6 Biss.
Ill; Vogler v. Montgomery, 54 Mo.
578; Cox v. Wilder, 2 Dillon, 46;
White v. (iivi'iis, 29 La. Ann. 571;
Midler v. Inderreiden, 79 111. 382;

Hugunin v. Dewey, 20 Iowa, 368 ;
Buckley v. Wheeler, 52 Mich. 1 ;
Schribar v. Piatt, 19 Neb. 631 ; Moore
v. Flynn, 135 111. 74, 25 N. E. Rep. 844 ;
Hodges v. Winston, 95 Ala. 514, 11 So.
Rep. 200.

3 Furman v. Tenny, 28 Minn. 77 ;
Duvall v. Rollins, 68 N. C. 220 ; Mose-
ley v. Anderson, 40 Miss. 49 ; Anthony
v. Wade, 1 Bush (Ky.) 110 ; Patten v.
Smith, 4 Conn. 450 ; Tracy v. Cover,
28 Ohio St. 61. See § 46.

4 Morrison v. Abbott, 27 Minn. 116 ;
Carhart v. Harshaw, 45 Wis. 340,
30 Am. Rep. 752, and notes ; Delash-
mut v. Trau, 44 Iowa, 613 ; Smith v.
Rumsey, :::: Mich. 183 ; Derby v. Wey-
rich, 8 Neb. 174; Megehe v. Draper,
21 Mo. 510 ; Washburn v. Goodheart,
88 111. 229; Hixon v. George, 18 Kans.
•-'■">:; ; O'Conner v. Ward. 60 Miss. 1036 ;
Thomson v. Crane, 73 Fed. Rep. 327;
Simsv. Phillips, 54 Ark. 198, MS.W.
Rep. 461.

§ 49 CONFLICTING CASES. 93

division of the assets among the partners with a view of
securing the members the benefit of individual exemp-
tions, if accomplished without actual fraud, is valid.1
Unsevered partnership property is, of course, not
exempt.2

§ 49. Conflicting cases. — The cases are not, however,
uniform in this regard, and are in some instances disin-
clined to allow a debtor to turn what was intended as a
shield of poverty into an instrument of fraud;3 and
there are decisions of at least local authority which deny
the benefit of the exemption laws to a dishonest debtor
who shuffles and conceals his property,4 or executes a home-
stead deed in furtherance of a design to hinder, delay,
and defraud creditors in the recovery of their just debts.5
And it has been held that the privileges of the homestead
act may be forfeited by fraud,6 and the right to claim
exemption also forfeited and lost.7 This does not, it
seems to us, vary the general principle already stated, for
in these latter cases the property is not considered to be
under the cover or protection of the exemption statutes,

1 Bates v. Callender, 3 Dak. 256, 16 barrasses the officers of the law in the
N. W. Rep. 506. execution of their legal duties, he for-

2 Bates v. Callender, 3 Dak. 260, 16 feits his right to exemption.''

N. W. Rep. 506 ; Bonsall v. Comly, 44 s See Rose v. Sharpless, 33 Gratt.

Pa. St. 442 ; Russell v. Lennon, 39 (Va.) 156. See generally Smith v.

Wis. 570; Hawley v. Hampton, 160 Emerson, 43 Pa. St. 456; Gilleland v.

Pa. St. 18, 28 Atl. Rep. 471 ; Gaylord Rhoads, 34 Pa. St. 187 ; Diffenderferv.

v. Imhoff, 26 Ohio St. 317 ; Pond v. Fisher, 3 Grant's Cases (Pa.) 30 : Piper

Kimball, 101 Mass. 105. v. Johnston, 12 Minn. 67; Chambers

3 Brackett v. Watkins, 21 Wendell v. Sallie, 29 Ark. 407 ; Huey's Appeal,
(N. Y.) 68. 29 Pa. St. 219 ; Currier v. Sutherland,

4 Strouse v. Becker, 38 Pa. St. 192 ; 54 N. H. 475, 20 Am. Rep. 143, and
Imhoff 's Appeal, 119 Pa. St. 355. In note.

Kreider's Estate, 135 Pa. St. 584, the 6 Pratt v. Burr, 5 Biss. 36.
court says: " The authorities cited by 'Cook v. Scott, 6 III. 335; Cassell
the court fully sustain the position v. W7illiams, 12 111. 387 ; Freeman v.
that if the debtor equivocates and Smith, 30 Pa. St. 264; Larkin v. Mr-
dissembles, denies the ownership of Annally, 5 Phil. (Pa.) 17 ; Carl v.
that which he cannot hide, and em- Smith, 8 Phil. (Pa.) 569.

94 ABANDONED EXEMPTIONS. §§ 50, 50a

and by the rule of construction just stated, is liable to
the claims of creditors much the same as though it had
never been even colorably embraced within the exemp-
tions.

§ 50. Abandoned exemptions. — It is asserted in Crosby v.
Baker,1 that if the debtor changes his purpose to use the
exempt articles in his business, and determines to and
does in fact sell them to a third person, such bargain
being made to defraud creditors, and this purpose being
participated in by the vendee, the conveyance gives no
title to the purchaser, and the property may be reclaimed
and held by the assignee of the insolvent debtor in an
action against the purchaser.2 The change of intention,
it is argued, takes away one of the requisites for the
exemption of the property. The same principle applies
to abandoned homesteads.3

§ 50a. What cannot be reached.— While the property or
accumulations of a debtor may be reached by his
creditors, this is not trueof his talents or industry.1 Said
Hunt, C. :5 "The application of the debtor's property is
rigidly directed to the payment of his debts. He cannot
transport it to another country, transfer it to his friend,
or conceal it from his creditor. Any or all of these
things he may do with his industry. He is at liberty to
transfer his person to a foreign land. He may bury his
talent in the earth, or he may give it to his wife0 or

'6 Allen (Mass.), 295. Abbey v. Deyo, M X V. 347;

See Stevenson v. White, 5 Allen Eilers v. Conradt, 39 Minn. 243 ; Knox

(Mass.) 148. v. Fow, 91 Ga. 367, IT S. E. Rep. 654;

»Cox v. Shropshire, 25 Texas, 113. city Bank v. Smisson, 73 Ga. 422.
See Edwards v. Eteid, 39 Neb. 645, 58 See Voorhees v. Bonesteel, 16

X. \V. Rep. 202; Belden v. Younger, Wall. 31 ; Tresch v. Wirtz, ;;i X. .1.

76 Iowa, 567, 41 N. W. Rep. 317. Eq. L29 ; Aldridge v. Muirhead, 101

'Compare Boggese \ Richards, 39 U. S. 399 ; Wilson v. McMillan, <'-j

\V. Va. 575; Penn v. Whitehead, 1*3 Ga. m 1 Osborne v. Wilkes. 108 X. C.

Gratt. (Va.)527;Trapnellv. Conklyn, 654, 13 S. E. Rep. 285.
:;? \V. Va. 242, 16 S. E. Rep. 570.

§ 50b PAYMENTS MADE TO A DEBTOR. 95

friend. No law, ancient or modern, of which I am aware,
has ever held to the contrary." l In Mayers v. Kaiser,-
the court say : " We are unable to understand how the
husband's creditors can be said to be defrauded, when
they cannot compel him to labor for their benefit, if he
voluntarily bestows on others, or on his wife, that which
under the law they cannot reach for the satisfaction of
their demands." Justice Bleckley says : "While a debtor
cannot give away his property to the prejudice of his
creditors, he may give away his labor." :? And a debtor who
receives the title of property for the specific purpose of
conveying it to another, acquires no such interest in it as
would make the execution of the trust a fraud upon his
creditors.4 A husband's curtesy initiate in his wife's
lands cannot be sold to pay his debts.5

g 50b. Payments made to a debtor. — In the case of
Simpson v. Dall,6 it was declared that where a debt was
about to be attached by a creditor of the person to whom
it was due, and the person owing the debt made pay-
ment and settled the matter in full, the creditor of such
creditor could not compel payment by such debtor over
again to him, though it might be inferred that a settle-
ment was had or hastened with his creditor, the effect of
which was to prevent an attachment being levied on the
debt in his hands issued against his creditor.

1 Compare Lynn v. Smith. 35 Hun ; Wilson v. McMillan, 62 Ga. 16, 19.

(N. Y.) 275 ; Ross v. Hardin. 79 N. Y. 4 First Nat. Bk. v. Dwelley, 72 Me.

90, 91 ; Gage v. Dauchy, 34 N. Y. 223.

293 ; Gillett v. Bate, 86 N. Y. 94. See 5 Welsh v. Solenherger, 85 Va. 441 .

§303. Buckley v. Dunn, 67 Miss. 710, 8 S. E. Rep. 91; Breeding v. Davis,

7 So. Rep. 550 ; Osborne v. Wilkes. 108 77 Va. 639 ; Alexander v. Alexander,

N. C. 651, 13 S. E. Rep. 285 ; Mayers v. 85 Va. 353, 7 S. E. Rep. 335.

Kaiser, 85 Wis. 382, 55 N. W. Rep. 688. 6 3 Wall. 460.

8 85 Wis. 282, 396, 55 N. W. Rep. 688.

CHAPTER III.

CREDITORS' REMEDIES.

§51. Concurrent remedies — Legal
and equitable.
52. No injunction against debtor

before judgment.
53- Certain exceptional cases.

54. Joinder of claims.

55. Uniting causes of action.

56. Exclusive jurisdiction in equity.

57. Land purchased in name of third

party.

58. Relief before and after sale.

59. The remedy at law.

60. By suit in equity.

61. Supplementary proceedings.

62. Assumpsit — Case — Conspiracy.
62a. Reference not ordered.

£ 63. Relief collateral to main action.

64. Remedy governed by lex fori.

65. Cumulative remedies — Allowed

and disallowed.

66. Effect of imprisonment of

debtor.

67. Election of remedies.

68. Creditors' bills.

69. Direct and collateral attack —

Exceptional doctrine in Louis-
iana.

70. Forms of relief in cases of fraud

on wife.

71. Procedure in Federal tribunals.

72. Recapitulation.

§ 51. Concurrent remedies — Legal and equitable. —
Equity has concurrent jurisdiction with law over frauds
under the statute 13 Eliz. c. 5, or similar enactments,1 and
the same general rules of construction govern in both
courts.2 Thus it was remarked by the Supreme Court of
New Jersey : " Courts of law and courts of equity have

1 Orendorf v. Budlong, 12 Fed Rep.
24; Potter v. Adams, 125 Mo. 118,
126, 28 S. W. Rep. 490. citing the
text : Cox. v. Gruver, 40 N. J. Eq. 474,
3 Atl. Rep. 172; Moore v. William-
Mi,. 44 N. J. Eq. 496. 15 Atl. Rep.
587; Smith v. Wood, 42 N. J. Eq.
563, 7 Atl. Rep. 881. In Potter v.
Adams, 125 Mo. 125, the court say :
"If that deed was made to hinder,
delay or defraud the creditors of
Thomas Baine, then it was and is void
at law as well as in equity, and such

an issue ma}' be tried in an action of
ejectment as well as in a suit in equ it y
to set aside the fraudulent convey-
ance."

'-' Sexton v. Wheaton, 1 Am. Lea.
Cas. (5th ed.) 58, 59, note; Hopkirk
v. Randolph, 2 Brock. 133. The con-
tractual relation of debtor and cred-
itor remains unchanged in equity,
and the creditor is entitled to prove
his full claim without regard to col-
laterals. People v. Remington, 121 N.
Y. 328, 24 N. E. Rep. 793. See § 4.

§ 51 CONCURRENT REMEDIES. 97

concurrent jurisdiction over frauds, under the statute con-
cerning fraudulent conveyances. In cases where the legal
title to the property is such that it cannot be seized under
execution, resort to equity is necessary — as where the
legal title has never been in the debtor, having been con-
veyed by a third person directly to another, in secret trust
for the benefit of the debtor, with a design fraudulently
to screen it from his creditors.1 But where the lecal title
has been in the debtor, so as to be subject to execution
at law, and might be made available for the satisfaction
of the debt, if the fraudulent conveyance had not been
interposed, the creditor, or a third person having taken
title under a sheriff's sale, may bring ejectment, and avoid
the fraudulent conveyance by proof of the illegal purpose
for which it was made."2 It will be seen presently that
this latter illustration is not of universal application.3
The forms of relief available to creditors are outlined in
our opening chapter,4 where it is shown that creditors
may invoke the aid of equity in two cases, after proceed-
ing to judgment and execution at law, without obtaining
satisfaction of the debt.5 In the first class of cases the
complainant proceeds simply upon the ground of fraud,
and in support or furtherance of the remedy at law, while
in the other class of cases relief is sought upon the theorv
that the remedy at law has been exhausted, and that it is
inequitable and unjust on the part of the debtor to refuse
to apply any intangible property or choses in action
toward the payment of the judgment.0 Resort by cred-

1 See §57. Ch. (Mich.) 28; Cornell v. Radway,

2 Mulfordv. Peterson, 35 N.J. Law, 22 Wis. 264; Beck v. Burdett, 1

133. See Cox v. Graver, 40 N. J. Eq. Paige (N. Y.) 305 , Jones v. Green, 1

474, 3 Atl. Rep. 172. Wall. 331.

3 See^ 69. 6 Williams v. Hubbard, Walker's

4 See § 4. Ch. (Mich.) 29.

5 Williams v. Hubbard, Walker's

98 CONCURRENT REMEDIES. § 5 I

itors to courts of equity is of very frequent occurrence
because the common-law is not sufficiently flexible.1 Of
necessity, in a common-law action, a purchase is treated
as either valid or void.2 There is no middle ground.3
Proof of absolute fraud, which is usually difficult, is, for
that reason, generally required at law, while in equity it
is said that an unfair or inequitable transaction — one
not of necessity absolutely fraudulent in the full sense of
that term — may be unraveled in the interest of cred-
itors.4 In such cases the rights of an innocent vendee
can be preserved and protected by the plastic hand of
equity. In other words, certain cases seem to imply that
proof of fraud need not be so complete in equity as at
law ;5 but it is not so easy to illustrate the distinction or
to state clearly a substantial justification for its existence.6
Mr. Abbott observes in an editorial in the New York
Daily Register .• 7 " In the quaint language of Westmin-
ster Hall, ' legal fraud ' means illegal fraud, that is to say,
fraud for which an action at law lay to recover damages.
So 'equitable fraud' means inequitable conduct, not illegal
in the sense of sustaining an action for damages, but yet

1 In Mississippi Mills v. Colin, 150 in equity a more extensive significa-
U. S. 207, 14 S. C. Rep. 75, the court tion than at law, and, as charged
say : " A court of equity will aid a here, involved the consideration of
judgment-creditor to reach the prop- the principles applicable to fiduciary
erty of his debtor by removing fraud- and trust relations between the parties
ulent judgments, or conveyances or throughout the period of their con-
transfers which defeat his legal rem- nection, we concur with the Supreme
edy at law." Citing 2 Beach on Mod- Court of the District in sustaining the
ern Eq. Jur. £ 883. jurisdiction."

8 See Chap. XIII. Warner v. Daniels, 1 Woodb. &

-See §193. Foster v. Foster, 56 Vt. M. 103: Fullagar v. Clark, 18 Ves.

540. 483; Earl of Chesterfield v. Janssen,

'Sec Eilbourn v. Sunderland, 130 2 Ves. Sen. 143 ; Kilbourn v. Sunder-

U. S. 515, 9 S. C. Rep. 594, where the land, 130 IT. S. 515, 9 S. C. Rep. 594.

court say : " As the remedy at law See ~ (in.

in the case in hand was rendered em- 6 See Marksbury v. Taylor, 10 Bush,

barrassed and doubtful by the con- (Ky.)519.

duct of the defendants, and fraud has ' Nov. 15, 1888.

§ 51 CONCURRENT REMEDIES. 99

so like it in effect that the Chancellor would give a
remedy." *

Though in some States legal and equitable jurisdictions
have been united in the same tribunals, yet the distinc-
tions which formerly appertained in the forms of action,
of pleading, and of relief, are by no means superseded
or obliterated. In territory where the system of common
law and chancery both prevail, and the only adequate
relief is in equity, and the pleadings are framed in accord-
ance with this view, the suit must be tried as a chancery
case by the modes of procedure known to courts of
equity. The judge or chancellor is responsible for the
decision, and, though he may, by means of feigned issues,
refer any questions of fact to a jury,3 still his own con-
science must be satisfied that the finding is correct, and
the decree must be rendered as the result of his indi-
vidual judgment, aided, it may be true, by the finding of
the jury. Hence, where the trial in such a case is con-
ducted as though it were a controversy in a common-law
action, and a judgment is rendered upon a verdict as at com-
mon law, it will be reversed for error.3 In an equitable
proceeding of this character, as will presently be shown,
a decree in the nature of a judgment for damages cannot

1 In United States v. Union Pacific that the remedy at law was not as

Railway, 160 U. S. 51, the court re- effectual as in equity, said, among

mark: "In Boyce v. Grundy, 3 other things, that a ' direct proceed-

Peters 210, 215, this court said : ' It ing in equity will save time, expense,

is not enough that there is a remedy and a multiplicity of suits, and settle

at law ; it must be plain and adequate, finally the rights of all concerned in

or, in other words, as practical and one litigation.' "

efficient to the ends of justice and its - See Wright v. Nostrand, 94 X. Y.

prompt administration as the remedy 31 ; Coleman v. Dixon, 50 N. Y. 572.

in equity.' The circumstances of 3Dunphy v. Kleinsmith, 11 Wall.

each case must determine the applica- 615. In an equity suit to set aside a

tion of the rule. Watson v. Suther- fraudulent transfer the defendant is

land, 5 Wall. 74, 79. In Oelrichs v. not entitled to a jury trial, but the

Spain, 15 Wall. 211, 228, an objection court may in its discretion frame

was raised that the remedy at law issues to be tried before a jury.

was ample. The court, observing Wright v. Nostrand, 94 N. Y. 31.

IOO NO INJUNCTION BEFORE JUDGMENT. § 52

be rendered against the defendant who is alleged to have
fraudulently taken an assignment of the insolvent's prop-
erty. The decree must be for an accounting as to the
property which has come into the hands of the fraudulent
vendee.1 Where property which is legally liable to be
taken in execution has been fraudulently conveyed or en-
cumbered, the jurisdiction is usually concurrent, as the
creditor may either issue an execution at law and sell the
property, or file a bill in equity to have the conveyance
set aside.2 The remedy in equity, as will presently
appear,3 is necessarily exclusive in cases where the sub-
ject-matter of contention is not subject to execution.

§ 52. No injunction against debtor before judgment. — As a
general rule, a simple contract creditor who has no lien on
the property, cannot enjoin his debtor from selling it, nor
will he be allowed to come into equity to invoke its inter-
ference to preserve the property until a judgment can be
obtained.4 If the property of an honest struggling
debtor could be tied up by injunction upon mere unad-
justed legal demands, he might be constantly exposed
to the greatest hardships and grossest frauds, for which

■See §§ 176-179. Cates v. Allen, 149 U. S. 451, 13 S. ( '.

*Seenoteto Sexton v. Wheaton, 1 Rep. 883, 977; Dortic v. Dugas, 52

Am. Lea. Cas. (5th ed.) 58, 59; Bisp- Ga. 231 ; Buchanan v. Marsh, IT

ham's Equity, £242; Blenkinsopp v. Iowa, 494; Rich v. Levy, 16 Md. 74:

Blenkinsopp, 1 De. G., M. & G. 500 ; Phelps v. Foster, 18 111. 309 ; Brooksv.

Partee v. Mathews, 53 Miss. 146; Stone, 19How. Pr. (N. Y.) 395 ; Uhl v.

Sheafe v. Sheafe, 40 N. H. 516 ; Scott Dillon. 10 Md. 4()0 ; Hubbard v. Hub-

v. Indianapolis Wagon Works, 48 Ind. hard. 14 Md. 356; National Trades-

75; Gallman v. Perrie, 47 Miss. 131, men's B'k v. Wetmore, 124 N.Y. 241.

140; Barto's Appeal, 55 Pa. St. 886 ; Compare Case v. Beauregard, 99 U. S.

Tupper v. Thompson, 2G Minn. 386; 125; Locke v. Lewis, 124 Mass. 1. See

Henry v. Einman, 25 Minn. 199. £73. Nor can a creditor having pos-

8See .' 56. session of the debtor's property, with-

4 Peyton v. Lamar. 42 Ga. 134
(uhbedge v. Adams 42 Ga 124
Oberholser v. Greenfield, 47 Ga. 530

Shufeldt v. Boehm, 96 111. 560 ; Moran the debt. Xenia Bank v. Stewart,

v. Dawes, 1 Hopk. Ch. (N. Y.) 365; 114 U.S. 224, 5 S. C. Rep. 845.

out judicial process and against the
debtor's will, sell the property and

apply its proceeds to the payment of

§52 NO INJUNCTION BEFORE JUDGMENT. IOI

the law would afford no adequate remedy. It would
deprive him of the means of payment, or of defending
himself against vexatious litigation, and force him into
unconscionable compromises to prevent the ruin of his
business pending the controversy.1 An injunction ought
not to issue to compel parties to hold goods pending a
trial at law, with the expectation that they may be wanted
to answer an execution upon a judgment which the cred-
itor hopes to obtain.2 " The authorities are clear," says
the learned and lamented Mr. Justice Campbell,3 " that
chancery will not interfere to prevent an insolvent from
alienating his property to avoid an existing or prospective
debt, even when there is a suit pending to establish it."
" The reason of the rule," says Chancellor Kent, " seems
to be that until the creditor has established his title he
has no right to interfere, and it would lead to an unneces-
sary and, perhaps, a fruitless and oppressive interruption
of the exercise of the debtor's rights. Unless he has a
certain claim upon the property of the debtor, he has no
concern with his frauds"4 So the simple contract cred-

1 Shufeldt v. Boelim, 96 111. 560. lecting debts clue to him, with the

2 Phelps v. Foster, 18 111. 309; Hea- intention to defraud creditors and
cock v. Durand, 42 111. 230 ; Horner abscond. An injunction was allowed
v. Zimmerman, 45 111. 14. and a receiver appointed. Theappel-

3 Adler v. Fenton, 24 How. 411; late court in reversing the decree and
see Findlay v. McAllister, 113 U. S. dismissing the bill, said (p. 503):
114, 5 S. C. Rep. 401. " The bill filed by the appellees in

4 Wiggins v. Armstrong, 2 Johns. this cause, states no sufficient case
Ch. (N. Y.) 145, and the able opinion entitling them to the relief prayed,
of Chancellor Kent. Gates v. Allen, No authority lias been shown to this
149 U. S. 458, 13 S. C. Rep. 883, 977 ; court, nor can any be produced enti-
Smith v. Railroad Co., 99 U. S. 398 ; tied to consideration, which sanctions
Artman v. Giles, 155 Pa. St. 415, 26 the exercise of the high and extra-
Atl. Rep. 668. Uhl v. Dillon, 10 Md. ordinary power of a court of clian-
500, was a bill for an injunction and eery, to interpose, by writ of injunc-
receiver filed by a simple contract tion, in a case like the one before us,
creditor, charging that the defendant restraining a debtor in the enjoymenl
was deeply in debt ; that he was dis- and power of disposition of his prop-
posing of his stock ; had already par- erty. The appellees (the complain
ted with his real estate ; and was col- ants below) are merely general cred-

102

CERTAIN EXCEPTK »NAL CASES.

§ 53

itors of a firm ordinarily have no specific lien upon the
firm property which will enable them to interfere with any
disposition which the firm ma)- make of it.1 And a wife
having no judgment cannot restrain her husband's vendee
from taking possession of real estate upon the ground
that the transfer was in fraud of her right of support, and
deprived her of the right to attach the land in a suit for
divorce and alimony.2

§53. Certain exceptional cases. —Occasional exceptions
may be found in some States to the rule that equity will
not interfere at the instance of a simple contract creditor.
But the exceptions prove the force of the rule. In Moore
v. Kidder,3 the bill distinctly charged a fraudulent inten-
tion on the part of a debtor summoned as trustee, and
an attempt to dispose of his property, and put it beyond
the reach of creditors, for the purpose of defeating the
plaintiffs in the collection of any judgment that might be
obtained in a suit at law, and asked for an injunction to

itors of the appellant, who have nut
prosecuted their claim to judgment
and execution, nor in any other man-
hit acquired a lien upon the debtor's
property, ami were not entitled to the
writ of injunction nor to the appoint-
ment of a receiver. Whatever may
be the supposed defects of the exist-
ing laws of the State, in leaving to
the debtor the absolute power of dis-
posing of his property, and leaving
the creditor to the slow and veryin-
adequate Legal remedies now pro-
vided, if such defects exist, it is solely
in tin power of the legislature to cor-
rect them. It is not within the prov-
ince of the chancery courts to stretch
their power beyond the Limits of the
.-iiit uorities of the law, for the purpose
of remedying such defects. Such a
course would in- productive of greal
mischief, ami make the rights of tlie

citizen depend upon the vague and
uncertain discretion of the judges,
instead of the safe and well-defined
rules of law."

1 Wilcox v. Kellogg, 11 Ohio. 394 ;
Gwin v. Selby, 5 Ohio St. 97; Sigler
v. Knox County Bank, 8 Ohio St. 511 ;
Potts v. Blackwell, 4 Jones" Eq. (N.
I 58; Field v. Chapman, 15 Abb. Pr.
(N. Y,) 434 ; State v. Thomas, 7 Mo
App. 205; Shackelford v. Shackel
lord. 32 Gratt. (Va ) 481; Allen v.
Center Valley Co., 21 Conn. 130;
Schmidlapp v. Currie, 55 Miss. 507 :
Reeves v. Ayers, 38 111. 418 ; Mayer v.
Clark, 40 Ala. 259 ; see Case v. Beau-
regard, 99 (J. S. 125.

2 Ullrich v. Ullrich, G8 Conn. 580.

3 55 N. II. 491. See People ex rel.
Cmil'man v. Van Buren, 136 N. Y.
261, 32 N. E. Rep. 775.

§53 CERTAIN EXCEPTIONAL CASES. 103

prevent that mischief and wrong. The court said that
the bill very clearly showed a case for equitable interfer-
ence, in aid of the remedy at law, and that without such
relief the suit at law would be rendered fruitless by the
active fraud of the defendant.1 Clearly this would be a
proper case for the issuance of an attachment or other
suitable provisional relief in the action at law. In an-
other case where a bill charged insolvency in the debtor,
and averred that he had fraudulently transferred his goods
to a third person, who was implicated in the fraud, and
that the debtor had purchased the goods with intent to
defraud the plaintiffs, a receivership was allowed before
judgment.2 Here the relief was extended upon the the-
ory that the goods for which the indebtedness was cre-
ated were fraudulently obtained, and that the debtor
never acquired title to them. This would seem to be
substantially substituting a bill in equity for the relief
usually incident to replevin. An equitable action in the
nature of a creditor's bill for an injunction, may be
brought in aid of a lien by attachment before the recov-
ery of judgment in the attachment action where there is
danger that the property may be removed from the juris-
diction of the court.3 The court in People ex rel. Cauff-
man v. Van Buren4 claim that there is no conflict be-
tween Thurber v. Blanck5 and Mechanics' and Traders'
Bank v. Dakin.6 But as will presently appear,7 People
ex rel. Cauffman v. Van Buren8 has been in a measure

1 Compare Bowen v. Hoskins, 45 775. Compare Burtis v. Dickinson,
Miss. 183; Cottrell v. Moody, 12 B. 81 Hun (N. Y.) 345, 30 N. Y. Supp.
Mon. (Ky.) 502; Thompson v. Diffen- 886.

derfer, 1 Md. Ch. 489. 4 136 N. Y. 252, 259, 32 N. E. Rep.

2 Cohen v. Meyers, 42 Ga. 46. Com- 775.

pare Hyde v. Ellery, 18 Md. 500 ; Ro- 6 50 N, YT. 80.

senberg v. Moore, 11 Md. 376 ; Hag- 6 51 N. Y. 519.

garty v. Pittman, 1 Paige (N. Y.) 298. ' See § 81.

3 People ex rel. Cauffman v. Van 8 136 N. Y. 252, 32 N. E. Rep. 775.
Buren, 136 N. Y. 252, 32 N. E. Rep.

104 JOINDER OF CLAIMS. § 54

limited by the more recent case of Whitney v Davis.1
Where goods are sold on credit, but such credit has been
obtained by false representations and concealment of
insolvency, such as would entitle the vendor to rescind,
he is not considered as being an ordinary creditor, but he
may disaffirm and obtain an injunction against the dis-
posal of the goods."-' Creditors will, as a rule, find these
exceptional cases not easy to support.

^ 54. Joinder of claims. — The assets of the fraudulent
debtor are, as a rule, scattered among different friends, in
different forms, and by transactions had at different
times. This requires some notice of the authorities as to
uniting or joining claims. In cases where the sole object
of the bill is to secure satisfaction of a judgment out of
property fraudulently alienated, the suit may be framed
to avoid several distinct conveyances made to as many
grantees. Such a bill is said to embody a single cause
of action.3 This principle applies although the defend-
ants may have separate and distinct defenses.4 In Lattin
v. McCarty,5 it was decided that an equitable cause of
action to cancel and remove, as a cloud upon plaintiff's
title, a deed given by mistake by a third party to the
defendant, under which the latter had fraudulently
obtained possession, could be united with a claim to
recover possession of the premises, and asserted in the
same complaint. The principle of this case was expressly

' 148 X. V. 261, 42 N. E. Rep. 661. v. Tucker. 29 Mo. 850 ; Snodgrass v.

1 Fecbheimer v. Baum, 87 Fed. Rep. Andrews, ::o Miss. 472: Reed v.

167; cf. England v. Adams, 157 Mass. Stryker, 4Abb. App. Dec. (N. Y.)26;

449, 32 N. E. Rep. 665; Donaldson v. Dimmock v. Bixby, 20 Pick. (Mass.)

Farwell, 93 U. S. 633 ; Stewart v. 368.

Emerson, 52 N. B. 301. 4 Donovan v. Dunning. 69 Mo. 436.

'Trego v. Skinner, 42 M«!. 432; Ml N. Y. 107; Stock Growers'

Nortb v.Broadway, 9 Minn. 183; Chase Bank v. New! 13 Col. 247, 22 Pac.

\. Searles, 16 N. II. 51 1 ; Jacot v. Rep. 444.
Boyle, is How. Pr.(N. Y.) 106; Tucker

§55 UNITING CAUSES OF ACTION. 105

repudiated in Missouri in an action involving substan-
tially the same state of facts, on the theory that a bill in
equity was not a proper form of action for the recovery
of the possession of real estate, there being an adequate
remedy at law.1 But this latter reason does not com-
mend itself as necessarily conclusive. Fraudulent con-
fessions of judgments entered in different courts may be
attacked in one suit.3 So a partner may sue his copart-
ners for an accounting, and may join in the same action
alienees of his copartners, to whom the latter have collu-
sively transferred partnership assets in fraud of the part-
nership, and seek a cancellation of the transfer as well as
an accounting. " Why," it has been said, " should not all
this be embraced in one action ? The object is single,
viz. : To bring about a complete and final settlement of
the partnership." 3

§ 55. Uniting causes of action. — Questions relating to
the joinder of causes of action of necessity frequently
arise for adjudication in contests of the class under
consideration, where debtors have sought to conceal
property by different subterfuges. In Palen v. Bushnell,4
the plaintiff, as receiver in supplementary proceedings,
instituted an action against the debtor and a third party,
([). To recover moneys usuriously exacted by the third
party from the debtor ; (2). To compel the third party to
account for securities belonging to the debtor ; and
(3). To set aside as fraudulent certain transfers of real
and personal property alleged to have been made by the
debtor to the third party. The court observed : " What

1 Peyton v. Rose, 41 Mo. 257 ; Curd solvent railroad corporation maj in
v. Lackland, 43 Mo. 140. Ohio join in the same action a claim

2 Uhlfelder v. Levy, 9 Cal. 607. to compel payment of unpaid sul>-

3 Compare, upon this general sub- scriptions and a claim to enforce the
ject, Webb v. Helion, 3 Rob. (N. Y.) individual liability of stockholders.
625 ; Wade v. Rusher, 4 Bosw. (N. Y.) Warner v. Callender, 20 Ohio St. 190.
537. A judgment-creditor of an in- 4 46 Barb. (N. Y.) 25.

106 EXCLUSIVE JURISDICTION IN EQUITY. § 56

is the subject of the action in this case ? It is the restitu-
tion of the property of the judgment-debtor whom the
plaintiff represents. To entitle himself to this relief, the
plaintiff avers in his complaint different transactions out
of which his right to restitution flows." i This statement
is criticised by Mr. Pomeroy,2 as follows : " There is here
a plain confusion of ideas. The restitution of the debtor's
property, which is the relief demanded, is the object of the
action. If there is anything connected with this matter
clear, it is that the authors of the code used the terms
'subject of action' and 'object of the action' to describe
different and distinct facts." The criticism upon the
particular language employed in this case has some foun-
dation, but we cannot suppress the conviction that a sys-
tem of procedure which prohibited the joinder of claims,
such as those specified in a single action, would furnish
most unsatisfactory and inadequate redress to creditors.

^56. Exclusive jurisdiction in equity.— The subjects of
fraud and trusts are peculiarly matters of equity jurisdic-
tion.3 Manifestly in cases where property is of such
nature that it never was subject to execution at law, the
remedy of creditors desiring to reach it, as we have
observed, is exclusively in chancery.4 Thus, as has
already been shown,5 it was observed by Chief- ustice
Gray, in delivering the opinion of the Supreme Court of
Massachusetts, in Drake v. Rice,0 that, "by the law of

1 A cause of action against one for :; National Tradesmen's B'k v. Wet-

fraudulently pnnuring a conveyance more, 124 X. Y. 241.

of property from a decedent in his 4SeeWeed v. Pierce, 9 Cow (N. Y.)

life-time cannot be joined with a cause 722: Sexton v. Wheaton, I Am. Lea.

of action against another for fraudu- Cas. (5th ed.) 59 ; Drake v. Rice, 130

\< nth procuring the making of a will Mass. 412 ; Abbott v. Tenney, 18 N.

cutting oil the plaintiff. Heath v. H. 109 ; Sargent v. Salmond, 27 Me.

Heath, 18 Misc. (N. Y.) 521. 539.

Remedies and Remedial Rights, BSee§ L7.

§ 470. 1 180 .Mass. 112. See Bragg v. Gay-

nor, 85 Wis. 4G8, 55 N. VV. Rep. 919.

57

PURCHASES IX NAME OF THIRD PARTY.

107

England before the American Revolution, .
fraudulent conveyances of choses in action, though not
specified in the statute, were equally void, but from the
nature of the subject, the remedy of the creditor must
be sought in equity."1

§57. Land purchased in name of third party. — The
creditor may encounter a practical difficulty in reaching
realty paid for by the debtor, the title to which is fraudu-
lently taken in the name of a third party. This is a very
common device. The courts are somewhat at variance
upon the question as to whether or not real estate so held
can be sold on execution against the debtor, and recovered
by the purchaser in ejectment, or, in fact, whether it can
be reached by any proceedings at law. Authorities can
be cited to the effect that an execution sale of land, the
title to which is held in this manner, passes nothing to
the purchaser ; 2 the creditor's proper remedy to reach it

'Citing Taylor v. Jones (1743), 2
Atk. 600 ; King v. Dupine (1744), 2
Atk. 603, note ; Horn v. Horn (1749),
Ainbl. 79; Ryall v. Rolle (1749), 1
Atk. 165, 1 Ves. Sr. 348 ; Partridge v.
Gopp (1758), 1 Eden, 163, Ambl. 596 ;
Bayard v. Hoffman, 4 Johns. Ch. (N.
Y.) 450 ; Hadden v. Spader, 20 Johns.
(N. Y.) 554 ; Abbott v. Tenney, 18 N.
H. 109 ; Sargent v. Salmond, 27 Me.
539. See §§ 17, 33.

2 Mulford v. Peterson, 35 N. J. Law,
133 ; Haggerty v. Nixon, 26 N. J. Eq.
42 ; Garfield v. Hatrnaker, 15 N. Y.
475; Dewey v. Long, 25 Vt. 564;
Davis v. McKinney, 5 Ala. 719 ; Web-
ster v. Folsom, 58 Me. 230 ; Low v.
Marco, 53 Me. 45 ; Jimmerson v. Dun-
can, 3 Jones (N. C.) Law, 537 ; Carlisle
v. Tindall, 49 Miss. 229; Howe v.
Bishop, 3 Met. (Mass.) 26. See Hamil-
ton, v. Cone, 99 Mass. 478. In Niver
v. Crane, 98 N. Y. 40, it was decided
that the fact that the debtor paid the

consideration for property conveyed
to another did not alone authorize
a judgment taking the property to
satisfy the debt. Under the provision
of the statute of uses and trusts (1 R.
S. 728, £§ 51, 52), which declares that
a grant made to one person, the con-
sideration for which is paid by
another, shall be presumed fraudu-
lent as against the creditors at that
time of the person paying the con-
sideration, and where fraudulent in-
tent is not disproved, a trust shall re-
sult in favor of such creditors, to
make out such a trust the considera-
tion must be paid at or before the
execution of the conveyance. See
Decker v. Decker, 108 N. Y. 128.
Such trust is exclusively in favor of
creditors; the heirs al law cannot en-
force it. Robertson v. Sayre, i.34 V
Y. 97, 31 N. E. Rep. 050 ; Miner v.
Lane, 87 Wis. 348. 57 N. W. Rep. 1105.

108 RELIEF BEFORE AND AFTER SALE. §58

is declared to be by bill in equity ; ' the grantee is
considered to hold the title impressed with a trust in
favor of creditors, ~ and may be compelled to quit-claim
his interest.3 The principle embodied in these authori-
ties seems to commend itself as logical, but it is not uni-
versally recognized. There are cases holding that an
execution purchaser on a judgment against the debtor
may recover the lands in ejectment, even though the
title was never in the debtor, if it is shown that the
fraudulent grantee held it for the debtor's benefit,4 and
that such an interest may be attached.5 It may be
observed that a purchase of personal property by a
debtor in the name of a third party does not exempt it
from direct seizure by creditors.6

§ 58. Relief before and after sale. — The jurisdiction of a
court of equity is ample either before or after sale under
a judgment, to set aside a deed made in fraud of cred-
itors— before sale to enable the creditor to present and
sell an unembarrassed title ; after sale to remove clouds
from the title." It will thus be seen how important the
jurisdiction of equity becomes in connection with fraudu-

1 Mul ford v. Peterson, 35 N. J. sucli a case? See Ocean Nat. Bank v.

Law, L33. Olcott, 46 N. Y. 22. See infra. Chap.

^Garfield v. Hatmaker, 15 N. Y. IV.
475; Corey v. Greene, 51 Me. 114; 'Kimmel v. McRight, 2 Pa. St. 38 '<
Simmons v. Ingram, 60 Miss. 900. Tevis v. Doe, 3 Ind. 129; Pennington
Such fcrusl exists in favor of all the v. Clifton, II Ind. 1U2 ; Guthrie v.
creditors of the person who pay e the Gardner, L9Wend.(N. Y.) 414; Brew-
consideration; one creditor cannol ster v. Power, 10 Paige (N. Y.) 569;
acquire a preference by taking pro- Garfield v. Hatmaker, 15 X. Y. 477.
ceedinga in equity. Minn- v. Lane, Cecil Bank v. Snively, 23 Md. 253.
87 Wis. 348, 57 X. W. Rep. L105 ; cf. "Godding v. Brackett, 34 Me. 27.
Brown v. Chubb, L35 X. Y. 174, 31 X. See§ 82.
E. Rep. 1030. < oilman v. IVrrie. II Miss. 131.

3 Cutter v. Griswold, Walker's Ch. See Orendorf v. Budlong, 1. Fed.

(Mich.) 137; Lnsorge v. Barth, 88 Wis. Rep. 25 ; Partee v. Mathews, 53 Miss.

558, 60 X. W. Rep. L055. Musi the 1 10.
creditor lirsl recover judgment in

§59 TI1E REMEDY AT LAW. 109

lent transfers. It would often be impossible, especially
in cases affecting realty, to render the title marketable
until the flexible hand of a court of equity had removed
the simulated transfers and incumbrances in which the
debtor has involved it. Equity alone can disentangle the
title from the doubts and embarrassments which interfere
with a realization of a fair price ; and to that extent and
for that purpose its invaluable assistance is usually asked.1
In Rhead v. Hounson,2 the court said: "The bill must
be construed in reference to its nature. It is not filed to
reach property incapable of seizure on execution, and
therefore based on the theory that the legal remedy has
been exhausted. Very far from it. The principle on
which it proceeds is that a legal remedy is in fact pro-
gressing, and which, being fraudulently obstructed, the
aid of the court is needed to remove that obstruction.
The claim made is that the deed from the judgment-
debtor to his son is fraudulent as against the creditor,
and that the farm is therefore subject to levy and the
deed exposed to be removed out of the way of it by tin-
assistant jurisdiction of equity."

§ 59. The remedy at law. — A judgment-creditor may
proceed at law to sell under execution lands or property
which his debtor has fraudulently alienated:5 which are
subject to execution. The attempted transfer may be
treated as a nullity, and the property subjected to seizure
and sale upon execution the same as though no such

■Partee v. Mathews. 5:] Miss. 146; 90; Fowler v. Trebein, Hi Ohio St.

Calm v. Person, 56 Miss. 363. 493; Staples v. Bradley, 33 Conn. L67;

2 46 Mich. 246. Foley v. Bitter, 34 Md. 646; Gor

3Carter v. Castleherry, 5 Ala. 277; merlyv. Chapman, 51 (la. 421 ; Rus

Booth v. Bunce, 33 N. Y. 139 ; Henry sell v. Dyer. 33 N. H. 186 ; Smith v.

v. Hinman, 25 Minn. 199; Brown v. Reid, 134 NY. 576, 577, 31 N E.

Snell, 46 Me. 490; Thomason v. Rep. 1082: Maders v. Whallon, 71

Neeley, 50 Miss. 313 ; Jacoby's Appeal, Hun (N. Y.) 378, 26 X. Y. Supp.

67 Pa. St. 434 ; Allen v. Berry, 50 Mo. 614. But see g 69.

110 THE REMEDY AT LAW. §59

covinous transfer had ever been made.1 The creditor in
such cases may consider the debtor as still the owner of
the property, and may pursue it to secure satisfaction of
the claim the same as though the title were unembarrassed
by the fraudulent deed or transfer.3 The general prin-
ciple was involved in Rinchey v. Stryker,3 in which case
it was decided that where an attachment was issued to a
sheriff he was entitled to seize under it any property
which the debtor might have disposed of with intent to
defraud his creditors ; that by such seizure a specific lien
was acquired upon the property attached, and the sheriff,
when sued for wrongfully taking the property, had a right
to show, even before judgment in the attachment suit,
that the title of the purchaser from the debtor was
fraudulent and voidable as against the attaching creditor.1
Incidentally it may be recalled that where the plaintiff has
the legal title to land, and it is held out of possession by
the defendant, he must proceed at law. Bills quia timet
cannot ordinarily be brought by one out of possession,5

1 Tupper v. Thompson, 26 Minn. 24 How. 227; Baldwin v. Peet, 22

386 ; Henry v. Hinman, 25 Minn. 199; Tex. 708, note. In Massachusetts,

National Park Bank v. Lanahan, 60 jurisdiction in equity is limited to

Md. 513 ; Smith v. Reid, 134 N. Y. property or rights which cannot be

568 ; 31 N. E. Rep. 1082 ; Maders v. attached or taken on execution.

W ha lion, 74 Hun, 372, 26 N. Y. Supp. Schleisinger v. Sherman, 127 Mass.

614; Wagner v. Law, 3 Wash. St. 209.

500, 28 Pac. Rep. 1109, 29 Id. 927; 326 How. Pr. (N. Y.) 75, 31 N. Y.

Bergen v. Carman,79 N. Y. 153. 1 40.

- Thomason v. Neeley, 50 Miss. 313. 4 See Greenleaf v. Munford, 30

It has been observed that where the How. Pr. (N. Y.) 30, 31. But com-

"deed is a mere pretence, collusively pare Thurber v. Blanck, 50 N Y. 83,

devised, and the parties do not intend with Mechanic's & Traders' Bank v.

other than an ostensible change of the Dakin, 51 N. Y, 519, reaffirmed in

property, fche property does not pass Peopleexrel. Oauffman v. Van Buren,

as to creditors; and even when the 136 N. Y. 252, 32 N. E. Rep. 775. See

parties intend an irrevocable dispo- Lawrence v. Bank of the Republic, 35

sition of the property, but the convey- N. Y. 320 ; infra, £ 81.

ance has been made with the intent ■' United States v. Wilson, 118 U.

to defraud creditors," it may be S. 89, 6 S. C. Rep. 991.
avoided. Chandler v. Von Roeder,

6o

BY SUIT IN EQUITY.

II I

unless the absence of possession is excused by local
statute.

§ 60. By suit in equity. — Fraud is one of the recognized
subjects of equity jurisdiction, and is the most ancient
foundation of its power.1 The primary jurisdiction in
equity is in personam: The existence of a remedy at
law does not interfere with the riorht of a creditor to
resort to a court of equity3 to secure a cancellation of a
fraudulent conveyance as an obstacle in the way of the
full enforcement of a judgment, and a cloud on the
title to the property sought to be reached.4 The same
rule applies where it is sought to set aside fraudulent
chattel mortgages and judgments fraudulently confessed.5
The suit in equity is sometimes said to be an ancillary
relief in aid of the legal remedy/' since a court of equity
does not intervene to enforce the payment of debts.7 It

1 Hartshorn v. Eatnes, 31 Me. 97 ;
Story's Equity, § 68. See Warner v.
Blakeman, 4Keyes (N. Y.)507 ; Logan
v. Logan, 22 Fla. 564.

2 Wilson v. Martin- Wilson, etc. Co.,
151 Mass. 517, 24 N. E. Rep. 784.

3 See §51.

4 Planters' & M. Bank v. Walker, 7
Ala. 926 ; Sheafe v. Sheafe, 40 N. H.
516 : Dargan v. Waring, 11 Ala. 988 ;
Cookv. Johnson, 12 N. J. Eq. 52 ;
Bean v. Smith, 2 Mason, 253; Harnlen
v. McGillieuddy, 62 Me. 269 ; Waddell
v. Lanier, 62 Ala. 347 ; Traip v. Gould,
15 Me. 83; Beaumont v. Herrick, 24
Ohio St. 456 ; Sockman v. Sockman,
18 Ohio, 368 ; Musselman v. Kent, 33
Ind. 452 ; Dockray v. Mason, 48 Me.
178. In Gormley v. Potter, 29 Ohio
St. 599, the court said : " The petition
was founded upon the fact that the
land had been taken in execution,
and had for its object the removal of
the cloud cast upon the title by the
fraudulent conveyance. The removal

of this cloud was in the interest
of both the debtor and the creditors
by enabling the property to be sold
at a better price." Again, it has
been observed that "The creditor
has not only a right to have the
property subjected to the pay-
ment of his judgment, but to have
it subjected in such manner thai it
will bring its fair market value."
Fowler v. McCartney, 27 Miss. 510.

5 Sweetser v. Silber, 87 Wis. 102,
58 N. W. Rep. 239; Gullickson v.
Madsen, 87 Wis. 19, 57 N. W. Rep.
965.

6 See McCartney v. Bostwick, 32
N. Y. 57, and compare Niver v.
Crane, 98 N. Y. 40, and Estes v. Wil-
cox, 67 N. Y. 264.

'Dunlevy v. Tallmadge, 32 N. Y.
459; Voorhees v. Howard, I Keyes
(N. Y.) 383; Griffin v. Nitcher, 57
Me. 272 ; Logan v. Logan, 22 Fla. 564.
See§ 73.

112 BY SUIT IN EQUITY. § 60

may be asked why resort is so frequently had to a credi-
tor's bill seeking a decree to avoid or cancel the covinous
transfer when the property may be more expeditiously
seized under attachment or execution. The creditor's bill,
or a suit to clear the fraudulent transfer, is, for many rea-
sons, entitled to preference as a means of relief. Should
the creditor attempt to sell the disputed property arbi-
trarily under execution, bidders would be deterred from
purchasing lest they should buy a lawsuit, hence the mar-
ket value of the land embraced in the covinous transfer
is practically destroyed. Then the seizure of the prop-
erty subjects the creditor to the peril incident to proving
that the transfer was fraudulent, and in the event of fail-
ure to establish fraud, of paying damages for the unwar-
rantable interference, seizure, and sale. By filing a
creditor's bill practically the only risk incurred is the costs
and expense of the suit, for generally no seizure is effected
unless the suit is successful, in which event the covinous
transfer and cloud on the title is cleared away. Then, as
already stated, equity procedure is more flexible than the
procedure at law,1 and in equity an inequitable transaction,
not absolutely fraudulent in the full sense of that term,
maybe avoided at the suit of a creditor. Fraud it is said
may be presumed in equity but must be proved at law ;2
but this is a loose and unreliable statement, for it must
be proved in either forum. Courts of equity it is true
will act upon circumstance indicating fraud which courts
of law might scarcely deem satisfactory proofs ; and will
grant relief upon the ground of fraud established by pre-
sumptive evidence of such character as courts of law
would not always deem sufficient to justify a verdict.3

'Sec §51. 3 See Jackson v. King, 4 Cow. (N.

King v. Moon, 42 Mo. 555. See Y.) 207, 3 Greenl. Ev. § 254, 1

Kilbourn v. Sunderland, 130 U. S. Story's Eq., Jur. §§ 190-193. "Fraud

515, 9 S. C. Rep. 594. is not to be considered as a Bimple

6o

BY SUIT IN EQUITY.

113

In Kilbourn v. Sunderland,1 the court says " Fraud has in
equity a more extensive signification than at law." The
Supreme Court of Pennsylvania,2 in commenting upon
the applicability of equity to suits involving fraudulent
alienations, remark : " It is especially adapted to this
class of cases. Its process is plastic and may be readily
moulded to suit the exigencies of the particular case.
A court of equity proceeds with but little regard to
mere form. It moves with celerity, and seizes the
fruits of a fraud in the hands of the wrong-doer." Having
jurisdiction for one purpose equity will make a complete
disposition of the cause.3 Equity endeavors to deal with
the substance of affairs ; to look beyond the observance
of mere forms ; 4 to regulate its judgment according to the

fact, but a conclusion to be drawn
from all the circumstances of the
case. It may be inferred from the
nature of the contract itself, or from
the condition or circumstances of the
parties. The general principle is well
settled, that equity will give relief
against presumptive frauds, and
therein will go further than courts of
law, where fraud must be proved and
not presumed .... There are many
instances of fraud that would in
equity affect instruments in writing
concerning lands, of which the law
could not take notice." Burt v.
Keyes, 1 Flipp. 63. Compare United
States v. Amistad, 15 Pet. 594 ; Lloyd
v. Fulton, 91 U. S. 483. See g 15.

1 130 U. S. 515, 9 S. C. Rep. 594.
Compare 1 Story, Eq. Jur. § 450.

4 Fowler's Appeal, 87 Pa. St. 454.
In Artman v. Giles, 155 Pa. St. 416, 26
Atl. Rep. 668, the right of simple con-
tract or attaching creditors to restrain
a judgment-creditor from enforcing
his judgment was denied. The court
says : " The only case at all analogous
to the present, in which a creditor not
having a judgment has been per-

mitted to interfere with the debtor's
disposition of his property, is Fow-
ler's Appeal, 87 Pa. St. 449. In that
case the bill averred that the debtor
had conveyed land to his son-in-law,
by collusion to defraud his creditors,
and that the grantee was about to
convey to bona fide purchasers. The
debtor having died, the bill was
sustained upon the ground that the
creditor complainant, though without
a judgment, had an express statutory
lien, which gave him a standing. To
sustain the present injunction would
be going a decided step farther than
any case adjudicated, and in opposi-
tion to established principles."

3 Manufacturing Co. v. Bradley, 105
U. S. 182 ; Oelrichs v. Spain, 15 Wall.
211 ; Crane v. Bunnell, 10 Paige (N.
Y.)333; Billups v. Sears, 5 Gratt.
(Va.) 31 ; Pearce v. Creswick, 2 Hare,
296 ; Martin v. Tidwell, 36 Ga. 345 ;
Sanborn v. Kittredge, 20 Vt. 632;
Souder's Appeal, 57 Pa. St. 498, 502;
Corby v. Bean, 44 Mo. 379.

"Wright v. Oroville M. Co., 40 Cal.
20. In Buck v. Voreis, 89 Ind. 117,
Elliott, J., said: " Forms are of little

114 SUPPLEMENTARY PROCEEDINGS. § 6l

real purposes which controlled parties in the various mat-
ters brought before it for relief or correction; ^ to tear aside
the covering beneath which the perpetrators of the fraud
seek concealment ; to deal with actual facts, not with pre-
texts and disguises. The Supreme Court of Illinois say :
"Equity will penetrate beyond the covering of form, and
look at the substance of a transaction, and treat it as it
really and in essence is, however it may seem." 2

Rules of pleading in equity are not so strict in matters
of form as at law.3

§ 61. Supplementary proceedings. — Supplementary pro-
ceedings have, in New York and in some of the other
States which have appropriated its reformed system of
procedure, taken, in some measure, the place of creditors'
actions or suits in equity to reach equitable assets. This
remedy is now a special proceeding in New York,4 and
not a proceeding in the original action. These proceed-
ings furnish, to a certain extent, a substitute5 for a

moment, for where fraud appears system of equity jurisprudence that
courts will drive through all matters fraud vitiates every transaction ; and,
of form and expose and punish the however men may surround it with
corrupt act." Of course, equity " can- forms, solemn instruments, proceed-
not create a title where none exists." ings conforming to all the details re-

. . . . " Creditors can work out quired in the laws, or even by the

equities only through the rights of formal judgment of courts, a court of

the parties where there is no fraud." equity will disregard them all, if

Rush v. Vought. 55 Pa. St. 438,444, necessary, that justice and equity

quoted in Curry v. Lloyd, 22 Fed. may prevail."

Rep. 365. 4 N. Y. Code Civ. Pro. § 2433. Com-

1 Livermore v. McNair, 34 N. J. pare West Side Bank v. Pngsley, 47

Eq. 482 ; Buck v. Voreis, 89 Ind. 117. N. Y. 368.

•Wadhams v. Gay, 73 HI. 415, 435. B In Importers* and Tr. Nat. Bk. v.

See Gay v. Parparfc, 100 U. S. 699, 1 Quackenbush, 143 N. Y. 571, the court

S. ('. Rep. 456. says: '* Proceedings supplementary to

8 Birely's Ex'rs v. Staley, 5 Gill. & execution are remedies in equity for

J. (Md.)432; Ridgely v. Bond, 18 Md. the collection of the creditor's judg-

I50-. Small v. Owings, 1 Md. Ch. "(;7. ment, and were intruded asasubsti-

ln Warner v. Blakeman, 4 Keyes (N. tute for the creditor's bill, as formerly

Y.) 507, Woodruff, J., said : " It is the used in chancery."
just and proper pride of our matured

6i

SUPPLEMENTARY PROCEEDINGS.

Ii;

creditor's bill,1 for the discovery and sequestration of
property,2 and by their commencement a lien is said to
be acquired upon the debtor's equitable assets,8 though
another creditor may gain precedence if, after the service
of the order for the examination of the debtor, and
before the appointment of a receiver, he discovers prop-
erty liable to execution and levies upon it.4 Generally
speaking these proceedings will reach whatever property
is available on a creditor's bill,3 and have, as we have
seen, been held to be a simple substitute for it,6 and are
entitled to all the presumptions of regularity which apper-
tain to proceedings in courts of general jurisdiction.7
Supplementary proceedings are not exclusive.8 The judg-
ment-creditor may abandon them and institute a suit in
his own name to annul a fraudulent alienation,9 and he
may invoke both remedies at the same time.10 If a third

1 Spencer v. Cuyler, 9 Abb. Pr. (N.
Y.) 382 ; People v. Mead, 29 How. Pr.
(N. Y.) 360 ; Pope v. Cole, 64 Barb. (N.
Y. 409 ; afiTd, 55 N. Y. 124 ; Importers'
& Tr. Nat. Bk. v. Quackenbiish, 143
N. Y. 571, 38 N. E. Rep. 728. Com-
pare Catlin v. Doughty, 12 How. Pr.
(N. Y.) 459.

2 Becker v. Torrance. 31 N. Y. 631 ;
Billings v. Stewart, 4 Dem. (N. Y.)
269.

3 Lynch v. Johnson, 48 NT. Y. 33;
Storm v. Waddell, 2 Sandf. Ch. (N.
Y.) 494 ; Brown v. Nichols, 42 N. Y.
26: Edmonston v McLoud, 16 N. Y.
544 ; Billings v. Stewart, 4 Dem. (N.
Y.) 268. Compare Dubois v. Cassidy,
75 N. Y. 300 ; Campbell v. Genet, 2
Hilt. (N. Y.) 290; Robinson v. Stewart,
10 N. Y. 196. Although the lien ac-
quired by the judgment-creditor in
these proceedings is not divested by
the death of the debtor, it cannot be
enforced in a Surrogate's Court un-
less prior to the death a receiver was
appointed or an order was made di-

recting the application of the debtor's
property to the satisfaction of the
judgment. Billings v. Stewart, 4
Dem. (N. Y.) 265.

4 Becker v. Torrance, 31 N. Y. 631.
See Davenport v. Kelly, 42 N. Y. 193.

5 Barnes v. Morgan, 3 Hun (N. Y.)
703: Barker v. Dayton, 28 Wis. 367.

6 Lynch v. Johnson, 48 N. Y. 33 ;
Smith v. AVeeks, 60 Wis. 100, 18 N.
W. Rep. 778: Importers' & Tr. Nat.
Bk. v. Quackenbiish, 143 N. Y. 571,
38 X. E. Rep. 728. Compare Williams
v. Thorn, 70 N. Y. 270. See .' 45.

1 Wright v. Nostrand, 94 N. Y. 31.

8 Williams v. Sexton, 19 Wis. 42.

9 Bennett v. McGuire, 58 Barb. (N.
Y.) 625; Anderson v. Pilgrim, II S.
('. 423, 19 S. E. Rep. 1002, 20 Ed. 64.

10 Gates v. Young, 17 Weekly Dig.
(N. Y.) 551 ; Schloss v. Wallach, 16
Abb. N. C. (N. Y.) 319??, 38 Hun (N.
Y.) 638, 102 N. Y. 683; Matter of
Sickle, 52 Hun (N. Y.) 527, 5 N. Y.
Supp. 703. See §§51, 65.

n6

SUPPLEMENTARY PROCEEDINGS.

6l

party makes claim to any property which the examination
discloses, the rights of the claimants cannot be determined
in this proceeding, but resort must be had to a suit.1 The
procedure is usually by order, made upon proof of the
return of an execution unsatisfied, requiring the debtor to
appear in person in court, to be examined concerning his
property.2 The judgment upon which the order is pro-
cured must be in personam? Property or equitable
assets being thus disclosed, a receiver is appointed, who,
upon qualifying, becomes vested with the debtor's assets
and equitable interests, without conveyance or assign-
ment,4 though he does not get title to exempt property.5
The receiver represents creditors, and thus may impeach
the debtor's fraudulent sales G in the right of creditors. It
seems to be no objection to the exercise of the juris-
diction appointing a receiver that the debtor has no
assets,7 or that such property as he is possessed of is sub-

1 West Side Bank v. Pugsley, 47 N.
Y. 372 ; Bennett v. McGuire, 58 Barb.
(N. Y.) 634; Rodman v. Henry, 17 N.
Y. 484 ; Sebrauth v. Dry Dock Sav-
ings Bank, 20 Alb. L. J. 197. Sup-
plementary proceedings may be insti-
tuted before a judge of a Federal
court, on a judgment at law recovered
in the United States Courts. Ex parte
Boyd, 105 U. S. 647 ; Canal & C. Sts.
R. R. Co. v. Hart, 114 U. S. 654, 661.
Compare Senter v. Mitchell, 5 McCra,
147. But the examination cannot be
held in a State court upon a Federal
judgment. Tompkins v. Pureed, 12
Hun (N. Y.) 662. Compare Goodyear
Vulcanite Co. v. Frisselle, 22 Hun (N.
Y.) 175.

■ Bartlett v. McNeil, 49 How. Pr.
(N. Y.) 55 ; affi'd 60 N. Y. 53.

■•> Bartlett v. McNeil, 3 Hun (N. Y.)
221. Compare Schwinger v. Hickok,
53 N. Y. 280.

4 Porter v. Williams, 9 N. Y. 142;
Cooney v. Cooney, 65 Barb. (N. Y)

524 ; Bostwick v. Menck, 40 N. Y.
383.

5 Cooney v. Cooney, 65 Barb. (N. Y.)

525 ; Hudson v. Plets, 11 Paige (N. Y.)
180; Andrews v. Rowan, 28 How. Pr.
(N. Y.) 126. SeeTillotson v. Wolcott,
48 N. Y. 190 ; Hancock v. Sears, 93 N.
Y. 79.

6 Dollard v. Taylor, 33 N. Y. Super.
498; Bostwick v. Menck, 40 N. Y.
384 ; Porter v. Williams, 9 N. Y. 142.

1 See Browning v. Bettis, 8 Paige
(N. Y.) 508; Bloodgood v. Clark, 4
Paige (N. Y.) 574; Shainwald v.
Lewis, 6 Fed. Rep. 776. Monell J.,
held, in Dollard v. Taylor, 33 N. Y.
Superior Ct. 496, that where the only
purpose of appointing a receiver in
supplementary proceedings was to at-
tack a fraudulent assignment, the
application was properly denied as
the judgment-creditor could himself
fde a bill for that purpose, and in a
proper case secure a receiver pending
the suit.

§62 ASSUMPSIT — CASE — CONSPIRACY. I I 7

ject to execution.1 As an illustration of the utility of this
remedy it may be stated that a widow's unassigned right
of dower can be reached by her creditors2 in supplement-
ary proceedings,3 for it is liable to their claims,4 and a
receiver appointed in these proceedings may bring an
action for its admeasurement.5

§ 62. Assumpsit — Case — Conspiracy. — A fraudulent
assignment will not ordinarily authorize a judgment
against the purchaser for the original debt ; u nor is an
action on the case considered to be an appropriate form of
procedure against the debtor and his fraudulent alienee.
The latter form of action is discussed at much leneth in
Lamb v. Stone,7 and the language of the court is quoted
with approval by the learned and lamented Mr. Justice
Campbell, in Adler v. Fenton,8 as follows: "The plaintiff
complained of the fraud of the defendant in purchasing
the property of his absconding debtor, in order to aid
and abet him in the fraudulent purpose of evading the

' Bailey v. Lane, 15 Abb. Pr. (N. Y.) 4 Tompkins v. Fonda, 4 Paige (N.

373, an note. Tbe order in supple- Y. ) 448 ; Mutual Life Ins. Co. v. Ship-

mentary proceedings usually forbids man, 119 N. Y. 324, 24 N. E. Rep.

the debtor from making a transfer of 177.

his property until further directions : 5 Payne v, Becker, 87 N. Y. 153.
but in New York his earnings within See Stewart v. McMartin, 5 Barb. (N.
sixty days of the commencement of Y.) 438. It may be noted in conclud-
the proceedings are exempt and it is ing this section that an attorney em-
not considered, a contempt of the ployed to collect a claim has author-
court's order for him to apply them ity to institute supplementary pro-
to the support of his family. Han- ceedings, but is not authorized under
cock v. Sears, 93 N. Y. 79 ; Newell v. the original retainer to direct the re-
Cutler, 19 Hun (N. Y.) 74, is over- ceiver to institute an action to annul
ruled. The salary of a municipal a fraudulent transfer. Ward v. Roy,
officer cannot be reached in these pro- 69 N. Y. 9(3.

ceedings. Waldman v. O'Donnell, 57 6 Aspinall v. Jones, 17 Mo. 212.

How. Pr. (N. Y.) 215. But examine See Chap. XL

Singer v. Wheeler, 6 111. App. 225. 7 11 Pick. (Mass.) 527.

2 Mutual Life Ins. Co. v. Shipman, s24 How. 412; compare Find lay
119 N. Y. 330, 24 N. E. Rep. 177. v. McAllister, 113 U. S. 104, 5 S. C.

3 Strong v. Clem, 12 Ind. 37 ; Payne Rep. 401.
v. Becker, 87 N. Y. 153.

I I S ASSUMPSIT — CASE — CONSPIRACY. §62

payment of his debt. The court ask, what damage has
the plaintiff sustained by the transfer of his debtor's
property? He has lost no lien, for he had none. No
attachment has been defeated, for none had been made.
He has not lost the custody of his debtor's body, for he
had not arrested him. He has not been prevented
from attaching the property, or arresting the body
of his debtor, for he had never procured any writ
of attachment against him. He has lost no claim upon,
or interest in the property, for he never acquired either.
The most that can be said is, that he intended to attach
the property, and the wrongful act of the defendant has

prevented him from executing his intention

On the whole, it does not appear that the tort of the
defendant caused any damage to the plaintiff. But even
if so, yet it is too remote, indefinite and contingent, to
be the ground of an action." Many cases might be cited
to the same general effect.1 In an action on the case for
conspiracy which arose in Rhode Island,2 the plaintiffs,
who were simple contract creditors, claimed that the
defendants and the debtor had combined together to pre-
vent plaintiffs and other creditors from obtaining payment
of their debts ; that the debtor, among other things, had
made fictitious mortgages t0 the defendants under cover
of which the latter had secreted the property and removed
it out of the debtor's possession, so that plaintiffs were
prevented from attaching it, and had thus lost their
claims. The court ruled that the action could not be
maintained.3 "A simple conspiracy," says Nelson, J.,

'Smith v. Blake, 1 Day (Conn.) (Mass.) 146; Bradley v. Fuller, 118

258; Moody v. Burton, 27 Me. 427; Mass. 239; Mowry v. Schroder, 4

( Gardiner v. Sherrod, 2 Hawks (N. C.) Strob. (S. C.) Law 69.

1?:! : Kimball v. Barman, 34 Md. 407; !Klous v. Hennessey, 13 R. I. 335.

Austin v. Barrows, 41 Conn. 287; 8 Chief- Justice Durfee said: "There

Green v. Kimble, 6 Blackf. (Ind.) is some conflict of authority on the

552; Wellington v. Small, 3 Cusb. question thus raised, but the more

§62

ASSUMPSIT — CASE — CONSPIRACY.

[19

in Hutchins v. Hutchins,1 " however atrocious, unless it
resulted in actual damage to the party, never was the
subject of a civil action, not even when the old form of a
writ of conspiracy, in its limited and most technical char-
acter, was in use."2 Yet authority can be cited tending
to uphold a recovery in such cases. In Meredith v.
Johns,3 it appeared that an action of tort had been
brought, and a verdict for ^500 rendered, against a third
party, for secretly and maliciously taking, carrying away,
and concealing the slaves and property of one Peter May
(against whom the plaintiff had a cause of action), and
also for aiding, assisting and counseling May to absent
himself, to the end that the creditor might be pre-
vented from recovering against him. The Supreme Court
of Appeals of Virginia declined to interfere in equity to
restrain the enforcement of the judgment, and took the
position that the defense was a legal one, and that the
party aggrieved must seek redress in a law court. It seems,

numerous, and, we think, the better
reasoned and stronger cases are
against the action. The principal
ground of decision in these cases is
that the damage, which is the gist of
the action, is too remote, uncertain
and contingent, inasmuch as the cred-
itor has not an assured right, but
simply a chance of securing his claim
by attachment or levy, which he may
or may not succeed in improving. It
is impossible to find any measure of
damages for the loss of such a
mere chance or possibility. Another
ground, added in some of the cases,
is that no action would lie in favor of
such a creditor against the debtor for
putting his property beyond the reach
of legal process, if the debtor were to
do it by himself alone, and that what
would not be actionable if done by
himself alone, cannot be actionable
any the more when done by him with

the assistance of others. The first of
these grounds, which is the funda-
mental one, and has been chiefly re-
lied on, has been so exhaustively
analyzed and discussed in the cases
that it is impossible for us to add any-
thing to the reasons adduced in sup-
port of it." Klous v. Hennessey, 13
R. I. 335.

1 7 Hill (N. Y.) 107.

2 In Brackett v. Griswold, 112 N.
Y. 467, 20 N. E. Rep. 376, the court
say : "A mere conspiracy to com-
mit a fraud is never of itself a cause

of action The principles

which govern an action for fraud and
deceit are the saint', whether tin-
fraud is alleged to have originated in
a conspiracy, or to have been solely
committed by a defendant without
aid or co-operation."

H H. &M. (Va.) 595.

120 ASSUMPSIT — CASE — CONSPIRACY. §62

however, to have approved the procedure.1 The case of
Ouinby v. Strauss,2 of which the reports are meagre and
unsatisfactory, is another illustration. The action was
instituted by judgment-creditors of one of the defendants
against such defendant and his attorney, charging them
with having fraudulently conspired together to keep the
debtor's personal property out of the reach of his cred-
itors by the execution of chattel mortgages thereon to
secure fictitious debts, one of them to the attorney, under
which the property had been sold and bid off in the
attorney's interest. The property so sold exceeded in
value the amount of the creditor's judgment. The jury
found that there was a conspiracy and the judgment was
upheld, the appellate court saying that as the property
appropriated by the attorney to his own use exceeded in
value the amount of the creditor's claim, it was but just
that he should pay the creditor whose demand he had
sought to defeat. The point that nominal damages only
could be awarded was expressly overruled. The re-
covery in this case must, however, be rested upon the
ground that the attorney had a sufficient amount of the
debtor's property in his hands to satisfy the complaining
creditor's claim. In such a case the rule that only nomi-
nal damages are recoverable is not controlling.3

1 Compare Mott v. Danforth, G and its purpose was to recover dam-
Watts (Pa.) 307 ; Penrod v. Morrison, ages which the plaintiffs claim to have
2 P. & W. (Pa.) 126. suffered by the alleged tortious and

- 90 N. Y. 664. But in Braem v. wrongful act of the defendant in tak-
Merchants' Nat. Bank, 127 N. Y. 514, ing its judgment and issuing execu-
28 N. E. Rep. 597, a damage suit by tion upon it, thus apparently defeat-
one creditor against another was de- ing the lien of their execution and
feated. The defendant had procured the benefits which they otherwise
a judgment by consent against a cor- would have derived from it." The
poration in violation of the statute court adds that plaintiff had no lien
forbidding corporate preferences and when defendant levied its judgment,
collected its claim. Plaintiff sued the and that redress could not be had in
defendant for so doing. The action this form of action.
failed. Bradley, J., said: "This is in 3 The authorities establish the right
the nature of an action on the case, of a judgment creditor to his action

§§ 62a, 63 RELIEF COLLATERAL TO MAIN ACTION. 121

§ 62a. Reference not ordered. — In New York State an
action to set aside a fraudulent conveyance will not be
referred. Gilbert, J., said : " References are proper only
as aids to facilitate the transaction of business. The
growing multiplication of them within the last fifteen
years has been an evil prolific of individual injustice and
public alarm."1

§ 63. Relief collateral to main action. — The rule is estab-
lished in New York that in surplus-money proceedings in
a foreclosure suit, the referee has the authority to inquire
as to the validity of liens or conveyances, and they may
be attacked as fraudulent.2 In a reference as to title in
partition, a party can assail a mortgage held by another
party on the ground that it is fraudulent and void as
against creditors.3 It is asserted that no good reason
exists why the fraudulent character of conveyances can-
not be tested in such proceedings. When the jurisdic-
tion of equity is once acquired, the court has the right to
proceed to the end and administer complete justice
between the parties.4 This practice is considered more
convenient for the disposition of cases of this character,
and avoids the tedious process and increased expense
incident to a distinct and separate action instituted for that
purpose. Again, actions in aid of an execution at law are
ancillary to the original suit, and are, in effect, a continu-

against rescuers of the person or s Bergen v. Carman, 79 N. Y. 147 ;

goods of the debtor, seized by the 1 Am. Insolv. Rep. 341. Compare

sheriff to satisfy the judgment, or Sehafer v. Reilly, 50 N. Y. 61 ; Mutual

against those who prevent the Life Ins. Co. v. Bowen, 47 Barb. (N.

seizure of the debtor's goods on exe- Y.) 618; Fliess v. Buckley, 90 N. Y.

cution, or who conspire to prevent 292.

the levy of a tax to satisfy a judg- 3 Halsted v. Halsted, 55 N. Y. 1 12.

ment. Findlay v. McAllister, 113 U. " Manufacturing Co. v. Bradley,

S. 104, 5 S. C. Rep. 401, and cases 105 U. 8. 182; Oelriclis v. Spain, 15

cited. Wall. 211 ; Martin v. Tidwell, 36 Ga.

1 Bushnell v. Eastman, 2 Abb. Pr. 345 ; Souder's Appeal, 57 Pa. St. 498,

N. S. (N. Y.) 411. 502.

122 REMEDY GOVERNED BY LEX FORI. § 64

ance of the suit at law to obtain the fruits of a judgment,
or to remove obstacles to its enforcement.1 Usually the
titles of adverse claimants cannot be litigated in
foreclosure.2

§ 64. Remedy governed by lex fori. — In a case already
cited which arose in Massachusetts,3 it was said that the
law of New York respecting fraudulent conveyances was
the same as the common law and the law of Massachu-
setts ; and that although choses in action could not be
attached or levied upon in New York, yet after execution
issued on the judgment at law, such interests might be
reached by supplementary proceedings ; while in Massa-
chusetts these kinds of rights were subject to trustee
process. The court said that the assignment having been
found by the judge, before whom the case was tried with-
out a jury, to have been made in fraud of the plaintiff, as
a creditor of the assignor, and being" under the law of
either State voidable by creditors in some form of judicial
process, the question whether it should be relieved
against on the common-law, or on the equity side of the
court, was a question of remedy only, and governed by
the lex foi'i.x It may be observed that the general rule
that the lex fori governs the remedy controls the right to
arrest the debtor. Thus where goods were sold in New
York on credit to parties who transacted business in
Alabama, and the debtors subsequently disposed of their
property in the latter State with intent to defraud their

' (Jlafflin v. McDermott, 12 Fed. 4 In the case of a sale of horses and

Rep. 375, 20 Blatchf. 522. mules that took place in Virginia,

2 Kinsley v. Scott, 58 Vt. 420 ; Mer- where the stock was subsequently

chants' Bank v Thompson, 55 X. Y. sent to Pennsylvania for pasturage,

11 ; Lewis v. Smith, '.) N. Y. 51 t ; and was there seized on a foreign at-

Ruyter v. Reid, 121 N. Y. 50:>, 24 N. tachment against the vendor, it was

E. Rep. 791. held that the validity of the transfer

8 Drake v. Rice, 130 Mass. IK!. See must he tested by the lawsof Virginia.

§ 17. Born v. Shaw, 29 Pa. St. 288.

§64 REMEDY GOVERNED BY LEX FORI. 123

creditors, the New York Supreme Court held that an
order of arrest was properly issued against the defendants
by that court1 In Pritchard v. Norton,2 the court said :
" The principle is that whatever relates merelv to the
remedy, and constitutes part of the procedure, is deter-
mined by the law of the forum, for matters of process
must be uniform in the courts of the same country; but
whatever goes to the substance of the obligation, and
affects the rights of the parties, as growing out of the
contract itself, or inhering in it or attached to it, is gov-
erned by the law of the contract."3 It is foreign to the
scope of this treatise to discuss at length the question of
how far a transfer of personal property, which is lawful in
the owner's domicil, will be respected in the courts of the
country where the property is located, and where a dif-
ferent rule as to transfer prevails. This is a question
upon which the courts are much at variance. It must be
remembered that there is no absolute right to have such
a transfer respected in the foreign forum, and it is only
on a principle of comity that it is ever allowed. And this
principle of comity always yields in cases where the laws
and policy of the State in which the property is located
have prescribed a different rule of transfer from that of
the State in which the owner lives.4 The general rule

'Claflin v. Frenkel, 3 Civ. Pro. (N. S. 652, 13 S. C. Rep. 466; Metcalf v.

Y.) 109; Brown v. Ashbough, 40 How. Watertown, 153 U. S. 073, 14 S. C.

Pr. (N. Y.) 226. See § 191. A fraud- Rep. 947.

ulent disposition of property in Penn- 4 Green v. Van Buskirk, 7 Wall.
sylvania may be made the subject of 151, reversing mb nomine, Van Bus-
attachment in New York. Kibbe v. kirk v. Warren, 4 Abb. App. Dec. 1 N .
Wetmore, 31 Hun (N. Y.) 424. Y.) 457. Compare Guilhmder v. Eow-

2 106 U. S. 129 ; Coghlan v. South ell, 35 N. Y. 657 ; Ockerman v. Cross,

Carolina R. R. Co., 142 U. S. 109, 12 54 N. Y. 29; Howard Nat. Bank, v.

S. C. Rep. 150. King, 10 Abb. N. C. (N. Y.) 346;

3See McDougall v. Page, 55 Vt. People ex rel. Hoyt v. Commissioners

187, 28 Alb. L.J. 372; Great West- of Taxes, 23 N. V. 235; Chafee v.

ern Tel. Co. v. Burnham, 162 U. S. Fourth Nat. Bank, 71 Me. 514, and

339, 16 S. C. Rep. 850, and cases cited, cases cited in the arguments of counsel.

Compare Bauserman v. Blunt, 147 U. See, also, Matter of Dalpay, 41 Minn.

124 CUMULATIVE REMEDIES. § 65

that a voluntary transfer of personal property, where-
soever situated, is to be governed by the law of the
owner's domicil, always yields where the policy of the
State where the property is actually located has pro-
vided a different rule of transfer.1

§ 65. Cumulative remedies allowed and disallowed. — We
have disclaimed the consideration of fraud in the li^ht of
a crime," and entertain no design of noticing the penal
statutes enacted for the punishment of fraudulent insol-
vents or their co-conspirators. This subject more legiti-
mately appertains to a treatise on criminal law,3 and is a
matter regulated by statute, Sometimes resort to the
penal statutes conflicts with the pursuit of the civil rem-
edy. In a controversy which arose in Maine it was de-
cided that one who had commenced an action to recover
the penalty provided by the Revised Statutes4 of that
State, for knowingly aiding a debtor in the fraudulent
transfer of his property to secure it from the creditors,

532, 43 N. W. Rep. 564. As to real O'Neil, 44 N. Y. 301 ; Monroe v. Doug-
property the rule seems to be that the lass, 5 N. Y. 447. In Barnett v. Kin-
validity of the transfer must be ney, 147 U. S. 476, an assignment
judged by the law of the State where with preferences made by one citizen
the land was situated. So a mort- of Utah to another, valid by the laws
gage on land situated in Maine to of Utah, was held to be valid in Idaho
secure an antecedent indebtedness, against an attaching creditor as to
valid by the laws of Maine, was up- property in Idaho, of which the
held in Massachusetts, although not assignee had taken possession, though
authorized by the laws of that State. the statutes of Idaho prohibited as-
Chipman v. Peabody, 159 Mass. 420, signments containing preferences.
34 N. E. Rep. 563. There is See Frank v. Bobbitt. 155 Mass. 112,
do presumption that the common- 29 N. E. Rep. 209.
law prevails in Russia (Savage v. 'Keller v. Paine, 107 N. Y. 83,13
O'Neil, 44 N. Y. 300)— a presumption N. E. Rep. 635.
of its existence is indulged in by the 2 See §3.

courts only in reference to England 3 An indictment alleging the mak-

and the States which have taken the ing of a fraudulent conveyance is

common law. [n the absence of proof sufficient where its recitals charge the

of the foreign law, the law of the language of the statute. State v.

forum must furnish the rule for the Miller, 98 Ind. 70.

guidance of the court. Savage v. * Chap. 118, § 51.

§ 6$ CUMULATIVE REMEDIES. 1 25

waived his right to prosecute his suit by filing a petition
against his debtor and having him declared a bankrupt,
and then causing a suit to be commenced against the
alleged fraudulent transferee by the assignee in bank-
ruptcy, to recover the value of the property alleged to
have been fraudulently transferred.1 As to civil reme-
dies it was decided in Michigan that where a judgment-
creditor had elected to treat as fraudulent a conveyance
made by his debtor before the judgment, and, notwith-
standing the transfer of title, had proceeded to sell the
property on an execution, he could not afterward main-
tain a bill in equity to set aside the conveyance.2 The
logic of this ruling is scarcely apparent. Again, a credi-
tor who has instituted an action at law for the recovery
of a debt, and levied an attachment, cannot, before judg-
ment, bring a second suit to recover the debt, annul an
alleged fraudulent judgment recovered against the debtor
and restrain its collection.3 In New York, on the other
hand, a complainant may institute supplementary pro-
ceedings and prosecute a suit to establish his judgment
as a lien upon real estate ; he may prosecute either or
both proceedings until his judgment is satisfied.4 So he
may bring a creditor's action to remove a cloud upon
title, and also sell the debtor's land under execution.5
And in Massachusetts a remedy is given by statute,0
which enables a creditor to maintain a bill to reach any
property of a debtor liable to be attached or taken on
execution in a suit at law and fraudulently conveyed.
Before that statute a creditor could reach property fraud-

1 Fogg v. Lawry, 71 Me. 215. (N. Y.) 551 ; Schloss v. Wallach, 16

2 Crimson v. Smith, 47 Mich. 647. Abb. N. C. (N. Y.) 319n, 38 Hun (N.
But see Erickson v. Quinn, 15 Abb. Y.) 638, affi'd 102 N. Y. 683.

Pr. N. 8. (N. Y.) 168. 5 Erickson v. Quinn, 15 A.DD. Pr

3 Mills v. Block, 30 Barb. (N. Y.) N. S. (X. Y.) 166.

549. See §85. 6 Public Statutes, Ch. 151, § 3.

4 Gates v. Young, 17 Weekly Dig.

126 EFFECT OF IMPRISONMENT OF DEBTOR. §§66, 67

ulently conveyed by attachment and execution. The
statute gave him a concurrent remedy in equity to enforce
the same right, without having previously recovered a
judgment at law, and without admitting other creditors
to join in prosecuting the suit.1 It was decided that this
remedy was not superseded by the grant of general equity
powers.2

§ 66. Effect of imprisonment of debtor. — It may be con-
sidered as settled law that while the creditor has the body
of the debtor in execution on a ca. sa. his right to pro-
ceed against propertv is suspended.3 So long as the de-
fendant is in custody the creditor cannot file a bill in
chancery to reach his equitable assets.4 This rule pro-
ceeds upon the theory that the arrest and imprisonment
of the debtor constitute a satisfaction of the judgment
during the continuance of the imprisonment.5 When
the constructive imprisonment is terminated by operation
of law, the creditor's remedy is no longer suspended.6

^67. Election of remedies. — In Cone v. Hamilton,7 the
Supreme Court of Massachusetts said it had been decided
in that State that levies of executions in favor of creditors
passed no title where, at the time of the conveyance (which
was before the Stat, of 1844, c. 107, took effect), there was
no statute by which land paid for and occupied by a debtor,
the legal title to which had never been in him, but had
been conveyed by his procurement to other persons in
order to secure it from his creditors, could be attached or

'Bernard v. Barney Myroleum Co., 5 Koenig v. Steckel, 58 N. Y. 475 ;

147 Mass. 356, 17 N. E. Rep. 887. Bowe v. Campbell, 63 How. Pr. (N.

Barry v. Al.l.ot. 100 Mass. 396. Y.) 170; Ryle v. Falk, 24 Hun (N. Y.)

3 See Flack v. State of New York, 2.">. Compare, especially, Kasson v.

95 N. Y. 469. People. 44 Barb. (N. Y.) 347.

* Stillwell v. Van Epps, 1 Paige (N. "Sandman v. Seaman, 84 Hun (X.

, 615; Tappan v. Evans, 11 N. H. Y.) 337, 32 N. Y. Supp. 338.

321; King v. Trice, 3 [red. Eq. (N. C.) 7 102 .Mass. 57.
573.

§6? ELECTION OF REMEDIES. I 27

taken on execution at law as his property.1 Gray, }.,
continuing, said : " Upon this state of facts, either of
two remedies was opened to the judgment-creditors.
The conveyance being fraudulent as against them, the
parties who took the legal title (though not participating
in the fraud), paying no consideration for the conveyance,
and the equitable title being in the debtor who paid the
purchase-money, the judgment-creditors might doubtless
have maintained bills in equity to charge the land with
their debts.2 Or, it appearing that the land cannot be
held under their levies, they might by scire facias, have
obtained new executions on the original judgments.3 It
does not, however, follow that this bill can be maintained
in its present form. The plaintiff has acquired no inter-
est in those judgments, or in the debts on which they
were recovered. The only transfers from the judgment-
creditors, under which she claims are quit-claim deeds,
without covenants of warranty, of the land taken on
execution, which, as the grantors had no title, passed
none. Those creditors are not made parties to this suit,
either as plaintiffs or defendants, and would, therefore, be
at liberty, notwithstanding any decree therein, to pursue
their remedy by scire facias against their debtor. It
would be inconsistent with the principles and the
practice of courts of equity to maintain this bill, upon the
ground that the original conveyance was fraudulent and
void as against the judgment-creditors, without making
them parties to the suit in due form." It may be further
observed that a judgment-creditor is not obliged to follow
all the fraudulent conveyances which may have been

1 Hamilton v. Cone, 99 Mass. 478. Johns Ch. (N. Y.) 450 ; Lynde v. Mc-

3Huguenin v. Baseley. 14 Ves. 273; Gregor, 13 Allen (Mass.) 182.

Neate v. Marlborough, 3 Myl. & Cr. 3 Dennis v. Arnold, 12 Met, (Mass.)

407; Goldsmith v. Russell, 5 DeG., 449; Dewing v. Durant, 10 Gray

M. & G. 547 ; Bayard v. Hoffman, 4 (Mass. ) 29 ; Gen. Stats, of Mass. c

103, &22.

[28 creditors' bills. §68

made by several execution defendants, but may leave
some of them to stand while he seeks to set aside
others ;: nor can the debtor or the fraudulent alienee, as
a general rule, compel the creditor to elect which method
of procedure or class of property he will pursue.2 But
after a creditor has made his election between two incon-
sistent remedies, he is bound by it. So it was held
that a judgment-creditor who had sold on execution
the equity of redemption, belonging to his debtor, could
not afterwards bring an action to set the mortgage aside
as fraudulent.3 The same rule applies when he sells
simply all the debtor's right and title. In such case the
right to attack the existing mortgage as fraudulent passes
to the purchaser on such sale.*

§ 68. Creditors' bills. — It is said in New York,5 that
the object of a creditor's bill in that State6 is to reach
choses in action and equitable assets of the judgment-
debtor which cannot be reached by execution. And,
before such a bill can be filed, it is always necessary that
an execution should be issued to the county where the
judgment-debtor resides,7 and be returned unsatisfied;8

1 First Nat. Bank v. Hosmer, 48 of creditors, may be readied !>\ a

Mich. 200, 12 N. W. Rep. 212; Miller creditor's bill; a remedy which may

v. Dayton, 4? Iowa, 312. be considered as having originated in

'Gray v. Chase, 57 Me. 558 : Vasser the case of Spader v. Davis (5 Johns.

v. Henderson, 40 Miss. 519 ; Edmunds Ch. [N. Y.] 280, decided by Chancellor

V. Mister, 58 Miss. TOO ; Baker v. Ly- Kent) in the year 1*21. and winch has

man, 53 Ga. 339. been very extensively employed since

»Knoop \. Kelsey, 102 Mo. 291, 14 that time"

8.W. Rep. 110; Messmore v. Buggard, 6See 2 R. S. 171 ; 2 Barb. Ch. Pr.

40 Mich. ."-VJ, 0 N. W. Rep. 853. 147.

'Knoop %•. Kelsey, 121 Mo. 642,20 'Compare Wadsworth v. Schissel-

S. W. Rep. 683. bauer, 32 Minn. 87, 19 N. W. Rep.

Kmx v. Moyer, 54 N. Y. 128. Mr. 890 ; Northwestern Iron Co. v. Central

Bispham Bays, in his Principles of Trust Co., 90 Wis. 570, 63 N. W. Rep.

Equity, ;' 346: "In many of the 752, 64 Id. 828.

States, property of an equitable char- h< 'ompare the llolladay Case, 27

acter, and property conveyed in fraud Fed. Rep. 845.

§ 68 CREDIT" >RS' BILLS.

and in such an action all the judgment-debtors arc neces-
sary parties, unless it can be shown that one omitted is
insolvent or a mere surety for the defendant. The filing
of a creditor's bill, and the service of process, as we have
said,1 creates a lien in equity upon the effects of the judg-
ment-debtor.2 It has been aptly termed an "equitable
levy."3 It maybe here observed that a creditor's bill, in
many of our States, is an appropriate remedy to annul a
conveyance in fraud of creditors. It ought always to be
resorted to where this latter relief is desired. " A creditor's
bill is the continuation of the former controversy, so far
as the fruits of the judgment are concerned. The com-
plainant asks the aid of the court to reach the assets of
the defendant, so as to be made liable to his judgment,
which assets have been secreted or fraudulently assigned
to defeat the judgment." 4 Usually creditors' bills are
largely regulated by statute, and the relief extended is
often, in a measure, dependent upon the local laws gov-
erning the subject. It may be asked in what respects a
creditor's bill differs from an ordinary bill in equity, pro-
secuted to cancel a covinous conveyance or remove a
fictitious transfer. The answer is that the creditor's bill,
at least in some States, is broader and more effectual in its
operations and results. The ordinary bill or suit in equity
is generally brought to unravel some particular transac-
tion, and to annul some particular conveyance, or remove

1 See § 61. 25 Barb. (N. Y.) 662 : I ieorge \ . Wil

2 Per Swayne, J., in Miller v. liamson, 26 Mo. 190; State v. Bowen,
Sherry, 2 Wall. 249. Citing Bayard 38 W. Va. 91, is S. E. Rep. 375;
v. Hoffman, 4 Johns. Ch. (N. Y.) 450 ; Sweeny v. Grape Sugar Refining
Beck v. Burdett, 1 Paige (N. Y. 308; Co., 30 W. Va. 443, I S. E. Rep. 431;
Storm v.Waddell, 2Sandf. Ch. (N.Y.) First Nat. B'k v. Shuler, L53 NY. I 12.
494; Corning v. White, 2 Paige (N. 3Tilford v. Burnham, 3 Dana(Ky.)
Y.) 569 ; Edgell v. Haywood, 2 Atk. 110 ; Miller v. Sherrj . 2 Wall. J r.».
352. See Brown v. Nichols, 42 N. Y. 4Hatch v. Dorr, l McLean 113 ;
26; Lynch v. Johnson, 48 N. Y. 33; Havi,ls.»n v. Burke, 143 111. 139, 32 X.
Roberts v. Albany & W. S. R. R. Co., E. Rep. 511.

9

130

CREDITORS BILLS.

68

a specific cloud on a particular title.1 A creditor's bill,
on the other hand, is usually in the nature of a bill of dis-
covery,2 and is more extended in its results ; not only does
it reach property described therein, but by means of this
form of remedy every species of assets, and even debts
due the debtor of which the creditor knew nothing,
and which were not referred to in the bill, may
be reached through the instrumentality of a receiver,
and applied to the claim. For this reason it is appro-
priately called an omnibus bill.3 " Creditors' bills," says

1 See Brown v. Nichols, 42 N. Y.
26 ; Lynch v. Johnson, 48 N. Y. 33 ;
Roberts v. Albany & W. S. R. R. Co.,
25 Barb. (N. Y.) 662; George v. Wil-
liamson, 26 Mo. 1S»0.

2 See Newman v. Willetts, 52 111 101.

3 In Conro v. Port Henry Iron Co.
(12 Barb. [N. Y.] 58), the court said :
" There are two sorts of creditor's bills
known to our jurisprudence; the one is
the statutory bill, framed under 2 R. S.
173, in aid of a judgment-creditor who
has exhausted his remedy at law, to
enable him to discover the debtor's
property, and to reach his equitable in-
terests. This bill was known before
the statute. (Hadden v. Spader, 20
Johns. [N. Y.] 554.) And the statute
was framed to aid in carrying out the
principle of that and other like deci-
sions. In proceedings under such bill,
it had always been held that several
creditors, by judgment, of the same
debtor, might unite in the action,
though they had no other common in-
terest than in the relief sought. (Ed-
meston v. Lyde, 1 Paige [N. Y.] 637 ;
Wakeman v. Grover, 4 Paige [N. Y.]
23.) All the judgment-creditors were
proper parties, though not necessary
parties, because the action could nol be

ii itained by n single judgment-cred-
itor. The same ruleexisted before I he
statute, and was applied in a creditor's

suit by Chancellor Kent in McDermutt
v. Strong (4 Johns. Ch. [N. Y.] 687).
The other class of creditors' suits, not
depending upon any statute, are suits
brought for the administration of as-
sets, to reach property fraudulently
disposed of, or held in trust, etc. The
bill in such case is filed in behalf of the
plaintiff or plaintiffs, and all others
standing iu a similar relation, who may
come in under such bill and the decree
to be made. It may be filed by simple
contract creditors; and does not re-
quire a judgment to have been ob-
tained. (Barb. Chan. Prac. vol. II, p.
149)." In Fusze v. Stern, 17 Bradw.
(111.) 432, the court said : " There are
several kinds of original bills known
to our laws, wherein courts of equity
entertain jurisdiction to aid a creditor
in obtaining satisfaction of his claim
from his debtor, and which are gen-
erally denominated creditors' bills,
not only by the members of the legal
profession, but by the courts as well,
as where a debtor seeks to satisfy his
debt out of some equitable estate of
the defendant which is not subject to
levy and sale under an execution at
law ; then before be can have the aid
of a <<>mt of equity to decree the
cqiiifiibfc estate, subject to the pay-
ment of his debt, the creditor must
show by his bill, as in other cases

68

CREDITORS BILLS.

131

Mr. Bispham,1 " are bills filed by creditors for the pur-
pose of collecting their debts out of the real or personal
property of the debtor, under circumstances in which the
process of execution at common law could not afford
relief. This equitable remedy may be made use of dur-
ing the life-time of the debtor, or after his death. Cred-
itors' bills filed against the estate of a decedent, gen-

where invoking equitable jurisdiction,
that he has no adequate remedy at
law, which can only be shown by al-
leging and proving that he has ex-
hausted all the means provided by the
law for the collection of his debt, viz.,
a recovery of judgment, the issuing
of execution, and its return nulla
bona by the officer charged with its
collection. A nother kind of bill analo-
gous to this is where the creditor, hav-
ing recovered judgment against his
debtor, seeks to remove a fraudulent
conveyance or incumbrance out of
the way of an execution issued or to
be issued upon such judgment. In
such case equity will afford relief on
the ground that such judgment is an
equitable lien upoii real estate, nomi-
nally held by a third party under such
fraudulent conveyance, and the cred-
itor having this lien is entitled to levy
upon and sell upon his execution such
real estate discharged and untram-
meled from the cloud upon it caused
by such conveyance. In bills of this
kind the complainant need not even
prove the return of execution nulla
bona, as such conveyances are void by
the statute, and courts of equity do
not hesitate to declare them void be-
cause of such fraud, and place the
creditor in the same position, respect-
ing his judgment, that he would have
occupied if such conveyance had not
been made. A recovery of a judg-
ment which atTtime of filing the bill

would, in absence of such conveyance,
be a legal lien under the statute upon
the land, is all that is necessary to
aver and prove." Citing Miller v.
Davidson, 8 111. 518; Weigtman v.
Hatch, 17 111. 281 ; Shufeldt v.Boehm,
96 111. 561. See also McKenna v. Crow-
ley, 16 R. I. 364, 17 Atl. Rep. 354. Mr.
Bispham says, in Principles of Equity,
§ 527: "The threefold advantage of
reaching property otherwise exempt,
of setting aside fraudulent convey-
ances, and of discovery, renders a
creditor's bill a very effective instru-
ment for the collection of debts."
Creditors' bills are much used against
insolvent corporations where the capi-
tal stock is treated as a trust fund.
See Sawyer v. Hoag, 17 Wall. 610 ;
Sanger v. Upton, 61 U. S. 56 ; Hol-
lins v. Brierfield Coal & Iron Co., 150
U. S. 381 ; Hatch v. Dana, 101 U. S.
205 ; County of Morgan v. Allen, 103
TJ. S. 498; Crandall v. Lincoln, 52
Conn. 73 ; Terry v. Anderson, 95 U.
S. 628, 636 ; Clark v. Bever. 139 U.
S. 110 ; Fogg v. Blair, 139 U. S. 125 :
Messersmith v. Sharon Savings Bank,
96 Pa. St. 440 ; Stone v. Chisolm, 113
U. S. 302, 5 S. C. Rep. 497. Such a
bill can be entertained by a Federal
court by virtue of the jurisdiction at-
taching in cases of fraud and inde-
pendent of any statute. Lewi-, v.
Shainwald, 48 Fed. Rep. 492.

1 Bispham's Principles of Equity,
§ 525.

132 DIRECT AND COLLATERAL ATTACK. §69

erally, though not necessarily, partake of the nature of
administration suits."

§ 69. Direct and collateral attack. — Exceptional doctrine in
Louisiana. — A novel principle relating to covinous con-
veyances, derived from the civil law, prevails in Louisiana.
If a sale is fraudulent as to creditors, it must be regularly
set aside in a direct action or proceeding instituted for
that purpose. Not only is it binding between the original
parties, which is the universal rule,1 but it is conclusive
upon third parties until nullified by the form of action
which the law provides, and the possession of the vendee
is legal until the fraudulent instrument is avoided in
the due course of law.2 The reasons for this practice
are ingeniously given in Peet v. Morgan,3 by Porter, J.,
who there says : " Of its correctness the court enter-
tains no doubt. It is clearly supported by authority,
and it is sanctioned by reason and utility. The principle
on which it rest is,, that men are presumed to act
honestly until the contrary is proved ; that the con-
veyances alleged to be fraudulent are prima facie cor-
rect and fair ; and that it is improper in opposition to these
presumptions, the creditor should exercise rights that
could only properly belong to him, in case the acts of his
debtor were null and of no effect. In many instances,
should a contrary doctrine prevail, sales which were alleged
fraudulent might turn out to be bona fide, and the pur-
chaser be deprived of the use and enjoyment of property
which was honestly his. In the uncertainty which must
prevail until the matter undergoes a judicial investigation,

' Sir 1 lhap. XXVI. missioners, 7 Rob. (La.) 234 ; Presas v.

2 Yocum v. Bullit, 6 Mart. N. S. Lanata, 11 Rob. (La.) 288 ; Collins v.

(La.) 334, 17 Am Dec. 184, and the Shaffer, 20 La. Ann. 41; Payne

learned note of \. < '. Freeman, Esq. v. Graham, 23 La. Ann. 771 ; Ford v.

s.-c Barbarin v. Saucier, 5 Mart. N.S. Douglas, 5 How. 160.
(La.) 361; I." Goaster v. Barthe, 2 :; 0 Mart. X. S. (La.) 1:57.
Rob. (La.) 388 ; Drumrnond v. Com-

§69 DIRECT AND COLLATERAL ATTACK. I 33

it is certainly the wisest course, and the one most con-
ducive to general utility, to consider the thing sold as
belonging to him in whom the title is vested." It is idle
to speculate as to the utility of this doctrine, for it is en-
tirely opposed to the general practice in the other States,
and 'to the English and American authorities. The
fraudulent transfer is not generally regarded as being
effectual against creditors ; it does not as to them divest
the debtor's title, but his interest remains subject to their
remedies, and may be seized and sold on execution.1
The property may be treated and reached by creditors as
though the transfer had never been made.2 Thus in
Imray v. Magnay,3 the court said ; " It is now of fre-
quent occurrence that the sheriff is bound to take goods
which have been fraudulently conveyed or assigned to
defeat creditors, and is responsible in an action for a
false return at the suit of a creditor." Though the prin-
ciple embodied in these Louisiana cases may seem logical
and fair upon its face, certainly its practical operation
would not be commensurate with the needs of creditors
generally. The creditor cannot be expected to lay for-
mal siege to every semblance of an obstruction that the
debtor rears in his pathway. The theory concerning a
fraudulent conveyance is that it has only the color and

1 Jacoby's Appeal, 67 Pa. St. 434 ; 4 Col. 595 ; citing Jackson v. Myers,

Hoffman's Appeal, 44 Pa. St. 95 ; 11 Wend, (N. Y.) 535 ; Jackson v.

Russell v. Dyer, 33 N. H.186; Allen v. Bnrgott, 10 Johns. (N. Y.) 456 ; Rem-

Berry, 50 Mo. 90 : Ryland v. Callison, ington v. Linthicum, 14 Pet. 84;

54 Mo. 513; Fowler v. Trevein, 16 Rogers v. Brent, 10 111.580; Jamison

Ohio St; 493 ; Staples v. Bradley, 23 v. Beaubien, 4111. 114 ; Baze v. Arper,

Conn. 167 ; Foley v. Bitter, 34 Md. 6 Minn. 220 ; Cook v. Swan, 5 Conn.

646 ; Gormerly v. Chapman, 51 Ga. 140 ; Marcy v. Kinney, 9 Conn. 397 ;

421; Freeman on Executions, § 136. Lillie v. Wilson, 2 Root (Conn.) 517.

" In an action of ejectment it is com- -Russell v. Winne, 37 N. Y. 591;

petent to show that a conveyance re- Brown v. Snell, 46 Me. 490 : Booth v.

lied upon by one of the parties to the Bunce, 33 N. Y. 139 ; Angier v. Ash,

action was made with intent to de- 26 N. H. 99.

fraud creditors." Knox v. McFarran, 311 M. &. W. 267.

134 CASES OF FRAUD ON WIFE. § 70

appearance of a valid act, and is not in itself effectual ;
why then should the creditor be forced to undergo the
vexatious delay and expense incident to procuring a
formal adjudication vacating every covinous alienation of
property which the ingenuity of the debtor may devise ?
If the transfer is in fact fraudulent, then, by seizing and
selling the property on execution, the controversy is
practically concluded without further trouble or suit,
and the fraudulent alienee will not be rash enough to
attempt to reclaim it. On the other hand, if the transfer
is bona fide, the creditor is legally accountable for the
seizure. If the creditor unjustly refuses to treat the
transfer as valid the purchaser, if it relate to realty, may
hold the possession and defend in ejectment ; while if it
be personalty, he may recover it by replevin or sue in
trover. In either case, if the vendee claims the property,
indemnity would be exacted by the officer making the
seizure. Under the Louisiana system a debtor, by
selecting an irresponsible vendee, could shield him with
a simulated transfer, and enable him to dissipate the
property in practical defiance of the creditor.

§ 70. Forms of relief in cases of fraud on wife. — Special
treatment of the relationship of husband and wife as bear-
ing upon fraudulent transfers will be found in the body of
the work.1 We may allude here to the rule that where a
husband has fraudulently alienated his real property, as
against the rights of his wife or prospective wife, she may,
even during his lifetime, bring suit to annul the deed as
a fraud upon her right of dower ; ~ for an inchoate right of
dower is an interest which the courts will protect.3 It is
as much a fraud for a man to place his property out of his

'See Chap. XX. ; Mills v. Van Voorhies, 20 N. Y.

2 Youngs v. Carter, 10 Hun (X. Y.) 412; Simar v. Canaday, .53 N. Y.

194 ; Petty v. Petty, 4 B. Mon. (Ky.) 293.
210.

§ yi PROCEDURE IN FEDERAL TRIBUNALS. 1 35

hands for the purpose of avoiding the right of dower
which is about to attach to it, as it is for a debtor who
contemplates the contraction of debts to voluntarily dis-
pose of his property in order to defeat the efforts of
future creditors to secure their payment. The latter
result, it is conceded, as elsewhere shown,1 cannot be suc-
cessfully accomplished.2 The wife may in such cases
maintain a bill in equity to reach the property fraudu-
lently conveyed,3 or she may, according to some of the
cases, file a bill in chancery to recover her dower in the
property as though no conveyance had ever been
executed.4

§ 71. Procedure in Federal tribunals. —Statutes passed by
State legislatures affecting rights of creditors, being local
enactments and involving a rule of property, the Federal
courts will adopt the construction which has been given
to the statutes by the highest judicial tribunal of the
State,5 even though, were it an open question " depend-
ing upon the general principles of jurisprudence," the
conclusion of the court might have been different.6 A
Federal court is bound to apply such a rule of property
precisely as though it were sitting as a local court in the
State ; and this is true as to the observance of a State rule
governing voluntary conveyances,7 general assignments,8

1 See Chap. VI. Beach v. Viles, 2 Pet. 675. See Wil-

2 See Savage v. Murphy, 34 N. Y. Hams v. Kirtland, 13 Wall. 306 ; Ross
508 ; Case v. Phelps, 39 N. Y. 164. v. M'Lung, 6 Pet. 283 ; Morse v. Rib-
Wilson v. Hutchinson, 120 Mass. let, 22 Fed. Rep. 501.

27 ; Petty v. Petty, 4 B. Mon. (Ky.) 6 Nichols v. Levy, 5 Wall 443.

215. 1 Lloyd v. Fulton, 91 U. S. 485.

4 See Brown v. Bronson, 35 Mich. 8 Parker v. Phetteplace, 2 Cliff. 70 ;

415 ; Jiggitts v. Jiggitts, 40 Miss. 718. Jaffray v. McGehee, 107 U. S. 364, 2

6 Nichols v. Levy, 5 Wall. 443, 444; S. C. Rep. 367; Sumner v. Hicks. 2

Sumner v. Hicks, 2 Black, 532 ; Dun- Black, 532 ; Union Bank v. Kansas

das v. Bowler, 3 McLean, 397 ; Hey- City Bank, 136 U. S. 223, 10 S. C. Rep.

dock v. Stanhope, 1 Curtis, 471; 1013.

136 PROCEDURE IN FEDERAL TRIBUNALS. §71

exemptions,1 or sales rendered void for want of a change
of possession." And sometimes relief may be had in a
Federal court where the jurisdiction of the State court
would have proven imperfect.3 Where a State court
acquires possession and control over an insolvent debtor's
property it has power to dispose of it and to give a good
title. To this extent, as against a Federal court, the
State law is a rule of property.4 Where a creditor's suit
is removed from a State court to a Federal court on the
ground that the controversy is between citizens of differ-
ent States, jurisdiction is not lost by admitting as plain-
tiffs other creditors who are citizens of the same State as
the defendants.5 As we have shown, the local law where
the property has its situs governs in controversies to
reach such property by creditors.6 It may be here
observed that leave to sue and defend in forma pauperis
will be accorded to infants in the Federal courts, though
a different rule prevailed in the State tribunals,7 and that
equity jurisdiction in the Federal courts is wholly inde-
pendent of the local laws of the State,8 and is the same
in its nature and extent in all the States ; and that
Federal courts are bound to proceed in equity causes
according to the principles, rules and usages which belong

'Wilson v. Perrin, 62 Fed. Rep. 629. 7 Ferguson v. Dent, 15 Fed. Rep.

2 Allen v. Massey, 17 Wall. 351. 771. See Southworth v. Adams, 2

See Howard v. Prince, 11 N. B. R. Flipp. 282. in notis.

327. As to supplementary proceed- 8In Hollins v. Brierfield Coal &

inge in Federal courts, see § 61, n. Iron Co., 150 U. S. 379, 14 S. C. Rep.

Si e Gorrell v. Dickson, 26 Fed. 127, the court say: "The line of

Rep. 454. demarcation between equitable and

4 Burt v. Keyes, 1 Flipp. 62. See legal remedies in the Federal courts

Wiswall v. Sampson, 14 How. 52; cannot be obliterated by State legisla-

Williams v. Benedict, 8 How, 107; tion." See Cates v. Allen, 149 U. S.

Payne v. Drewe, 4 East, 523. 451, 13 S. C Rep. 883, 977 ; Rich v.

"Stewart v. Dunham, 115 TJ. S. 61, Braxton, 158 U. S. 405, 15 S. C. Rep.

5 S. C. Rep. 1163. 1006.

'Spindle v. Shreve, 111 U.S. 542,4
S. C. Rep. 522.

§ 72 RECAPITULATION. I 37

to the courts of chancery, as contradistinguished from
common-law courts.1 But " the general proposition as
to the enforcement in the Federal courts of new equitable
rights created by the States, is undoubtedly correct, sub-
ject, however, to this qualification, that such enforcement
does not impair any right conferred, or conflict with any
inhibition imposed, by the Constitution or laws of the
United States."2 Federal courts have no jurisdiction to
entertain a creditor's bill for a simple contract creditor.3
Questions as to appellate jurisdiction in Federal
tribunals will be presently considered.4

§ 72. Recapitulation. — As regards the enforcement of a
judgment against real property fraudulently conveyed a
creditor then may be said to have three modes of obtain-
ing satisfaction of his demand.

First. To obtain a decree of a court of equity declaring
the conveyance fraudulent, setting it aside, and thereafter
proceeding to sell the land on execution.

Second. By inserting in the decree in an equitable
action, in addition to the provisions avoiding the transfer,
a further clause appointing a referee to sell at public auc-
tion and directing the debtor to unite in the conveyance ;
or a clause appointing a receiver and directing that the
debtor convey the land to him and that he sell it.

Third. The creditor may sell the land on execution,
and the purchaser may then set up the fraud in the

1 Gordon v. Hobart, 2 Sumner, 405 ; right. Adler v. Eckler, I McCrarj

Burt v. Keyes, 1 Flipp. 69, per Story, 257.

J.; McFarlane v. Griffith, 4 Wash. 2 Scott v. Neely, 140 U. S. 109, 11

C. C. 585 ; Gaines v. Relf, 15 Pet. 9. S. C. Rep. 712.

See Green v. Creighton, 23 How. 90. 3 England v. Russell, 71 Fed. Rep.

A creditor having a standing in the 818 ; Cates v. Allen, 149 U. S. 458, 13

Federal courts can contest the validity S. C. Rep. S83, 997.

of a voluntary assignment, and a 4 See Chap. XXVII.
State law cannot deprive him of this

I38 RECAPITULATION. § 72

debtor's conveyance, and if this is established, obtain a
judgment entitling him to the possession of the land.1

The advantages incident to a judicious selection from
these remedies in particular cases should not be over-
looked.2

Stated in a form of more universal application, it is, as
we have seen, a familiar and unquestioned doctrine of
equity, that the court has power to aid a judgment-creditor
to reach the property of his debtor, either by removing
fraudulent judgments or conveyances which obstruct or
defeat the plaintiff's remedy under the judgment, or by
appropriating toward the satisfaction of the judgment
rights or equitable interests of the debtor, which are not
the subject of legal execution.3

1 Dawley v. Brown, 65 Barb. (N. 3 Robert v. Hodges, 16 N. J. Eq.
Y.) 120. 302.

2 See Chap. XI.

CHAPTER IV.

STATUS OF ATTACKING CREDITORS.

§73.
74.

76.

77.
78.
79.

81.

Rights of creditors at large.

Judgment conclusive as to in-
debtedness.

Creditor must have lien before
filing bill.

Judgments sufficient.

Judgments insufficient.

Foreign judgments.

Creditors of a decedent.

Rule as to judgments in equitable
actions.

Specific lien by attachment.

82.

83.
84.

86.

87.

88.

Property of the debtor taken in
name of third party.

When judgment is unnecessary.

Absconding and non-residen1
debtors.

Practice in Indiana, North Caro-
lina, Alabama and Texas.

Return of execution unsatisfied.

Distinction between realty and
personalty as to issuance of
execution.

Raising the objection.

" Courts of equity are not tribunals for the collection of debts."— Webster v. Clark, 25 Me.
314.

§73. Rights of creditors at large. — A creditor at large,
commonly called a simple creditor, cannot assail, as fraudu-
lent against creditors, an assignment or transfer of property
made by his debtor, until the creditor has first established
his debt by the judgment of a court of competent jurisdic-
tion, and has either acquired a lien upon specific property,
or is in a situation to perfect a lien thereon, and subject it
to the payment of his judgment, upon the removal of the ob-
stacle presented by the fraudulent assignment or transfer.1

1 Southard v. Benner, 72 N. Y. 426.
See Case v. Beauregard, 101 TJ. S. 668 ;
Cates v. Allen, 149 U. S. 457, 13 S. C.
Rep. 883, 977, citing the text : Spel-
man v. Friedman, 130 N. Y. 425, 20
N. E. Rep. 765 ; England v. Russell,
71 Fed. Rep. 818 ; Taylor v. Bowker,
111 U. S. 110, 4 S. C. Rep. 397; Briggs
v. Oliver, 68 N. Y. 336; Kyle v.
O'Neil, 88 Ky. 127, 10 S. W. Rep. 275;
Chadbourne v. Coe, 10 U. S. App. 78,

2 C. C. A. 327, 51 Fed. Rep. 479;
Morrow Shoe Mfg. Co. v. Peabody,
18 U. S. App. 256, 6 C. C. A. 508,
57 Fed. Rep. 685; Scott v. Neely, 1 10
TJ. S. 106, 11 S. C. Rep. 712; Trow-
bridge v. Bullard, 81 Mich. 451, 45 N.
W. Rep. 1012 ; Klosterman v. Mason
County Cent. R. Co., 8 Wash. 281,
36 Pac. Rep. 136 ; Weber v. Weber, 90
Wis. 467, 63 N. W. Rep. 757; Clarke
v. Laird, 60 Mo. App. 289 ; Fleming

140

RIGHTS OF CREDITORS AT LARGE.

§73

This principle is elementary.1 A rule of procedure
which allowed any prowling creditor, before his claim

v. Grafton, 54 Miss. 79 ; Francis v.
Lawrence, 48 N. J. Eq. 511, 22 Atl.
Rep. 259 ; Hollins v. Brierfield Coal
& Iron Co., 150 U. S. 371, 14 S.C. Rep.
127 ; Weaver v. Haviland, 142 N. Y.
534, 37 N. E. Rep. 641 ; Whitney v.
Davis, 118 N. Y. 256, 42 N. E. Rep.
661 ; Frothhlgham v. Hodenpyl, 135
N. Y. 630, 32 N. E. Rep. 240 ; Talbott
v. Randall, 3 N. Mex. 226. 5 Pac. Rep.
533 ; Goode v. Garrity, 75 la. 713, 38
N. W. Rep. 150 ; Arbuckle Bros. Coffee
v. Werner, 77 Texas, 45, 13 S. W. Rep.
963. See §52.

1 Dodd v. Levy, 10 Mo. App. 122 ;
Smith v. Railroad Co., 99 U. S. 401 ;
Turner v. Adams, 46 Mo. 95 ; Crim v.
Walker, 79 Mo. 335 : Dawson v. Cof-
fey, 12 Ore. 519, 8 Pac. Rep. 838; Bax-
ter v. Moses, 77 Me. 465 ; Bassett v.
St. Albans Hotel Co., 47 Vt. 314; Pen-
dleton v. Perkins, 49 Mo. 565 ; Jones
v. Green, 1 Wall. 330; Skeele v. Stan-
wood, 33 Me. 309 ; Meux v. Anthony,
11 Ark. 411 ; Webster v. Clark, 25
Me. 313 ; Voorhees v. Howard, 4
Keyes (N. Y.) 371 ; Barrow v. Bailey,
5 Fla. 9 ; Burnett v. Gould, 27 Hun
(N. Y.) 366; Reubens v. Joel, 13 N. Y.
488; Alnutt v. Leper, 48 Mo. 319;
Mills v. Block, 30 Barb. (N. Y.) 552 ;
Martin v. Michael, 23 Mo. 50 ; Public
Works v. Columbia College, 17 Wall.
530; Kent v. Curtis, 4 Mo. App. 121 ;
Tate v. Liggat, 2 Leigh (Va.) 84 ;
Greenway v. Thomas, 14 111. 271 ;
Fletcher v. Holmes, 40 Me 364; Adsit
v. Butler, 87 N. Y. 585 ; Tyler v.
Peatt,30 Mich. 63 ; Tolbert v. Horton,
31 Minn. 520, 18 N. W. Rep. 647; Vas-
ser v. Henderson, 40 Miss. 519; Peo-
ple's Savings Bank v. Bates, 120 U.
S. 562; 7 S. C. Rep. 679: McKinley v.
Bowe, 97 N. Y. 93 : Webster v. Law-
rence, 17 Hun (N, Y.) 566; Lichten-
berg v. Herdtf elder, 33 Hun (N. Y.)

57 : Bennett v. Stout. 98 111. 47 ; De-
troit, etc. Rolling Mills v. Ledwidge,
162 111. 305, 44 N. E. Rep. 751 ; Mc-
Auliffe v. Farmer, 27 Mich. 76; Smith
v. Millett, 12 R. I. 59 ; Ferguson v.
Bobo, 54 Miss. 121 ; Claflin v. McDer-
mott, 12 Fed. Rep. 375 ; Haggerty v.
Nixon, 26 N. J. Eq. 42 ; Cropsey v.
McKinney, 30 Barb. (N. Y.) 47; Stew-
art v. Fagan, 2 Woods, 215 ; McMinn
v. Whelan, 27 Cal. 300; Hunt v. Field,

9 N. J. Eq. 36: Robinson v. Stewart,

10 N. Y. 189 ; McDermott v. Blois, 1
R. M. Charlt. (Ga.) 2S1 ; Sturges v.
Vanderbilt, 73 N. Y. 384 ; Evans v.
Hill, 18 Hun (N. Y.) 464 ; Sexey
v. Adkinson, 34 Cal. 346 ; Dahlman
v. Jacobs, 15 Fed. Rep. 863 ; Miller v.
Miller, 7 Hun (N. Y.) 208; Griffin v.
Nitcher, 57 Me. 270 : Nugent v. Nu-
gent, 70 Mich. 52, 37 N. W. Rep. 706 ;
See Ex parte Boyd, 105 U. S. 653.
Compare Case v. Beauregard, 101 U.
S. 688, and see Taylor v. Bowker, 111
U. S. 110. In Alabama "a creditor
without a lien may file a bill in chan-
cery to subject to the payment of his
debt any property which has been
fraudulently transferred, or attempted
to be fraudulently conveyed, by his
debtor." Revised Code, § 3446. In
construing this statute the court said
that it was obviously the intention of
the legislature to enlarge the juris-
diction of the court of chancery, and
in cases where the simple and pure
relationship of debtor and creditor
existed to invest the creditor without
a lien or a judgment with the privi-
lege formerly confined to judgment-
creditors. Reynolds v. Welch, 47 Ala.
200. It must appear that the debt has
become due and that he is in a posi-
tion to enforce it at law. Freider v.
Lienkauff, 92 Ala. 469, 8 So. Rep. 758;
McGhee v. Importers' & T. Nat. Bank,

§ 73 RIGHTS OF CREDITORS AT LARG1 . 141

was definitely and finally established by formal judg-
ment, and without reference to the character of his
demand, to file a bill to discover equitable assets, or to
impeach transfers, or interfere with the business affairs of
the alleged debtor, it is asserted would, manifestly, be
susceptible of the grossest abuse. A more powerful
weapon of oppression of a debtor, could not be placed
at the disposal of unscrupulous litigants. x A
creditor at large,2 having no lien or trust,3 is not
favored in the class of litigation under consideration,4
and, generally speaking, has absolutely no status in
court for the purpose of filing a creditor's bill.5
The possibility of a judgment will not suffice.6 The
rule is peremptory. " A court of equity never inter-
poses," says Rufifin, C. J.,7 " in behalf of a mere legal
demand, until the creditor has tried the legal remedies,
and found them ineffectual." It was recently said in
New York, " the creditor must pursue his remedy at

93 Ala. 192, 9 So. Rep. 734. In Mis- Compare Manufacturing Co. v. Brad

sissippi equity is given jurisdiction by ley, 105 U. S. 175.

section 503 of the Code of 1892, even 4 Herring v. New York, L. E. & W.

where no judgment has been obtained R. R. Co., 63 How. Pr. (N. Y.) 502.

or execution been returned. The debt 5 Dunlevy v. Tallmadge, 32 N. V.

must be actually due before the bill is 459. But the simple contract credi-

filed. Browne v. Hernsheim, 71 Miss, tor is not always without redress in

574, 14 So. Rep. 36. The statute in cases where a fraudulent disposition

West Virginia recognizes the same of property has been made An at-

rule. State v. Bowen, 38 W. Va. 91, tachment or process in that aature

18 S. E. Rep. 375. So in Indiana, see maybe secured against the fraudu-

Field v. Holzman, 93 Ind. 205. Same lent debtor, and the property iuiprop-

rule applied in Brown v. J. Wayland erly transferred, or any other prop

Kimball Co., 84 Me. 492, 24 All. Rep. erty the debtor may have, can be

1007. seized under such provisional process

1 Cited in Artman v. Giles, 155 Pa. and held pending the suit.

St. 417, 26 Atl. Rep. 668. See Swan 6 Griffin v. Nitcher, 57 Me. 272.

Land & Cattle Co. v. Frank, 148 U. Compare Crompton v. Anthony, IS

S. 612, 13 S. C. Rep. 691. Allen (Mass.) 36 ; Stephens v. White-

2 Button v. Rathbone, 126 N. Y. 192, head. 75 Ga. 297.

27 N. E. Rep. 266; Jones v. Graham, 'Brown v. Long, 1 Ired. Eq. (N.

77 N. Y. 628. C.) 193.

3 Case v. Beauregard, 101 U. S. 688.

142 RIGHTS OF CREDITORS AT LARGE. § 73

law to every available extent before he can resort to
equity for relief." * It is not intended by this rule to
exclude simple contract creditors from the operation of
the statutes against fraudulent conveyances, they being,
except, perhaps, as regards statutory liens, as much pro-
tected, in theory of law, as creditors by judgment ; but
until such creditors have obtained a judgment and
acquired a lien, or a right to a lien upon the debtor's
property, they are not in a position to assert their rights
by a creditor's action.3 It is observed by Brown, J., in
Paulsen v. Van Steenbergh,3 that " a court of equity is
not the forum for litigating disputed claims, and, as a
general rule, will not entertain an action or afford relief
to a creditor until he has established his debt in a court
of law."4 Courts of equity are not tribunals for the
collection of ordinary demands.5 " The debt," said
Field, J., " must be established by some judicial proceed-
ing, and it must generally be shown that legal means for
its collection have been exhausted.6 So the statute of
limitations does not begin to run against the right to main-
tain a creditor's action till the recovery of judgment on the

1 Importers' &Tr. Nat. Bk.v. Quack- 5Webster v. Chirk. 35 Me. 314.

enbush, 143 N. Y. 567, 071, 38 X. E. See Dunlevy v. Tallmadge. 32 N. Y.

Rep. 728. 457 ; Bownes v. Weld, 3 Daly (N. Y.)

2 Southard v. Benner, 72 N. Y. 426; 233.

Karst v. Gane, 136 N. Y. 323, 32 N. "Public Works v. Columbia Col-

E. Rep. 1072 ; Thompson v. Van lege, 17 Wall. 530 ; Powell v. Howell,

Vechten, 27 N. Y. 568 ; Geery v. 03 N. C. 284 ; Fox v. Moyer, 54 N. Y.

Geery, 63 N. Y. 256. See Frisbey v. 128. Compare Case v. Beauregard,

Thayer, 2:. Wend. (N. Y.) 396 ; Na- 101 U. S. 688. Wisconsin Granite Co.

fcional Bank of Rondout v. Dreyfus, v. Gerrity, 144 111. 77, 33 N. E. Rep. 31;

14 Weekly Dig. (N. Y.) 160. Prentiss v. Bowden, 145 N. Y. 342, 40

»65 Bow. Pr. (N. Y.)342; Eowev. N. E. Rep. 13. A creditor's bill may

Whitney, Wi Me. 17 ; Taylor v. Bow- be filed on a judgmenl al law, after

ker, 111 U. S. 110, 4 S. C. Rep. 3(J7 : execution, aotwithstanding the re-

Webster v. Clark, 25 Me. 313; Griffin covery of another judgment on the

v. Nitcher, 57 Me. 270; Fleming a-, judgment. Elizabethtown Savings

Grafton. .-,| Miss. 79. Inst. v. Gerber, 34 N. J. Eq. 132,

*See Tasker v. Moss, S2 Ind. 62; note ; Bates v. Lyons, 7 Paige (N. Y.)

Baxter v. Moses, 77 Me. 465. 85.

§ 73 RIGHTS OF CREDITORS AT LARGE. 1 43

general claim and the return of execution unsatisfied.1
When a conveyance is said to be void or voidable
against creditors the reference is to such parties when
they are clothed with judgments and executions, or such
other titles as the law has provided for the collection of
debts.2 Judge Bronson, in Noble v. Holmes,3 after
declaring that a fraudulent sale could not, under the
provisions of the Revised Statutes of New York, be
impeached by a creditor at large, added : " It must be
a creditor having a judgment and execution, or some other
process which authorized a seizure of the goods!' It
may be urged that, where a debtor is manifestly guilty
of fraudulent conduct with reference to his property, the
prerequisites of a judgment and execution will prove seri-
ous impediments to an ordinary contract creditor who
desires to take immediate action to reach the property
which the debtor is dissipating or concealing.4 But the
answer to this proposition has generally been that the
remedy of a creditor so situated is not by creditor's bill ;
he must seek provisional relief by arrest or attachment,
or both, in a suit founded upon his contract claim.5 A
creditor in this position is not, as we have seen, usually
entitled to interfere by injunction before judgment with
any contemplated alienation of property by the debtor,0

1 Weaver v. Haviland, 142 N. Y. v. Davis, 148 N. Y. 260, 42 N. E. Rep.

534, 37 IS . E. Rep. 641. 661.

-Per Denio, J., in Van Heusen v. 5See Dodcl v. Levy, 10 Mo. App.

Radcliff, 17 N. Y. 580 ; Gross v. Daly, 121. " The non-existence of a judg-

5 Daly (N. Y.) 545 ; McElwain v. Wil- ment and execution in favor of Wax-

lis, 9 Wend. (N. Y.) 561 ; Button v. ner & Co. is a radical defect. It is

Rathbone, 126 N . Y. 192, 27 N. E. not in the nature of a technical or

Rep. 266, and cases cited. formal objection, bul one going to the

35 Hill (N. Y.) 194; Rinchey v. essential merits of the case." In re

Stryker, 28 N. Y. 45; Lux v. Davidson, Collins, 6 Fed. Cas. 116.

56 Hun (N. Y.) 347, 9 N. Y. Supp. * Wiggins v. Armstrong, 2 Johns.

816. Ch. (N. Y.) 145; Adler v. Fenton, 24

4See People ex rel Cauffman v. How. 411; Moran v. Dawes, Hopk.

Van Buren, 136 N. Y. 252 ; Whitney Ch. (N. Y.) 365. See § 52.

144

RIGHTS OF CREDITORS AT LARGE.

73

even after instituting- suit by attachment,1 though an
attempt has been made under peculiar circumstances, to
extend equitable relief to preserve an attachment lien
and hold the property in the jurisdiction of the court.2
So stockholders cannot sue in the right of a corporation
without first trying to set the body itself in motion ;3 and
a creditor or member who desires to sue in place of a
receiver must set forth that the receiver declines to pro-
ceed,4 unless it appears that the receiver is himself one
of the parties to be sued.5

To recapitulate, then, the judgment and execution are
usually necessary to a creditor before proceeding in
equity — First, to adjudicate and definitely establish the
leeal demand, and save the debtor harmless from inter-
ference at the instigation of unconscionable claimants;
second, to exhaust the legal remedy.6

1 Martin v. Michael, 23 Mo. 50. See
Whitney v. Davis, 148 N. Y. 260, 42
N. E. Rep. 661.

2 People ex rel. Cauffman v. Van
Buven, 136 N. Y. 252, 32 N. E. Rep.
775. But see Whitney v. Davis, 148
N. Y. 260, 42 N. E. Rep. 661, affi'g 88
Hun (N. Y.) 168, 35 N. Y. Supp. 531.

3 Taylor v. Holmes, 127 U. S. 402,
8 S C. Rep. 1192; Greaves v. Gouge,
69 N. Y. 157 ; Moore v. Schoppert, 22
W. Va. 291 ; Hawes v. Oakland, 104
U. S. 450.

4 Fisher v. Andrews, 37 Hun (N.
Y.) 180 ; Wait on Insol. Corps. § 100.

5 Brinckerhoff v. Bostwick, 88 N.
Y. 52.

'See Merchants' National Bank v.
I '.huh, 13 R. I. 594. In Stone v. West-
■ mi, 18 R. I. 518, 28 Atl. Rep. 662,
the court said : "In Merchants' Na-
tional I lank v. Paine, 13 R.I 592, the
defendant had absconded, leaving no
legal assets which could be attached
so thai a judgment at law could be
obtained against him, and tins court

held that as legal process was thereby
rendered impossible, the reason for
said rule failed, and the plaintiff
might therefore proceed at once to
enforce his claim in equity. In Gard-
ner v. Gardner, 17 R. I. 751,24 Atl.
Rep. 785, it was held that if the
debtor be dead the creditor may pro-
ceed in equity without first pursuing
his legal remedy. In the case at bar the
defendant bad not absconded, be was
not dead, nor is it even alleged that he
was insolvent, so as to bring the case
within the exception made by those
authorities which bold that such an
allegation dispenses with the necessity
for the issue and return of an execu-
tion before proceeding in equity. Sec
cases cited in Ginn v. Brown, 14 R. I.
524. Nor does the Mil allege that the
defendant has conveyed his property
to another in fraud of the judgment-
creditor so as to excuse him from the
service of execution. See Payne v.
Sheldon, 63 Barb. (N. Y.) 169." See
also National Tradesmen's Bank v.

§ 74 JUDGMENT CONCLUSIVE. 145

The maxim, " Lex neminem cogit ad vaua sen, inutilia
per agenda," has struggled for application in cases where it
is manifest the judgment at law will be ineffectual or
worthless,1 but, though the sympathy of the profession
seems to favor a relaxation of the rule requiring a judg-
ment and execution before a proceeding by creditor's bill
will lie, yet, generally speaking, the absence of a judgment
proves fatal to such a bill.2 A guarded statutory reform
might be suggested with a view to enlarge the facilities
of creditors to reach equitable assets. Complainants
holding liquidated demands, founded upon written instru-
ments or express contracts, might safely be given a right
to proceed to attack transfers, against debtors who have
made General assignments, or against whom unsatisfied
judgments rest, or who have suspended business solely
from lack of funds or have become notoriously insolvent.

§74. Judgment conclusive as to indebtedness. — In cases
where fraud is established, the creditor does not claim
through the debtor, but adversely to him, and by a para-
mount title, which overreaches and annuls the fraudulent
conveyance or judgment by which the debtor himself
would be estopped. It follows, from the principles sug-
gested, that a judgment obtained without fraud3 or col-
lusion, and which concludes the debtor, whether rendered
upon default, by confession or after contestation, is, upon
all questions affecting the title to his property, conclusive

Wetmore, 124 N. Y. 241, 26 N. E, Hogan, 53 Me. 554; Terry v. Ander-

Rep. 548 ; Patchen v. Rofkar, 12 App. son, 95 U. S. 636. See § 83.

Div. (N. Y.) 475, 42 N. Y. Supp. 35. * See Taylor v. Bowker, 111 U. S.

1 See Lichtenberg v. Herdtfelder, 33 110, 4 S. C. Rep. 397; Baxter v.

Hun (N. Y.) 57, 60, dissenting opinion Moses, 77 Me. 476, 1 Ail. Rep. 350;

of Davis, P. J.; case affi'd, 103 N. Y. Jones v. Green, 1 Wall. 330.

302, 8 N. E. Rep. 526 ; Case v. Beaure- 3 Equity will interfere to restrain

gard, 101 U. S. 690; Hodges v. Silver the enforcement of a judgmem

Hill Mining Co., 9 Ore. 202 ; Turner grounded on a fictitious demand,

v. Adams, 46 Mo. 95; Des Brisay v. Schroer v. Pet lib L63 111. 42, 45

N. W. Rep.

IO

14*5

JUDGMENT CONCLUSIVE.

74

evidence against his creditors, to establish, first, the rela-
tion of creditor and debtor between the parties to the re-
cord, and secondly, the amount of the indebtedness.1 This
principle is assumed in the New York statute in relation
to creditors' bills,2 and is so decided in Rogers v. Rogers.3

1 In Whitney v. Davis, 148 N. Y.
261, 42 N. E. Rep. 661, Gray, J., said :
' ' The principle of equitable interven-
tion to annul or set aside transfers of
a debtor's property, for being fraudu-
lent as to his creditors, demands for
its application an adjudication of the
fact of the debt."

2 2 R. S. 174, § 38.

s3 Paige (N. Y.) 379. See 2 Greenl.
Ev. 531 ; Marsh v. Pier, 4 Rawle (Pa.)
288 ; Candee v. Lord, 2 N. Y. 270 ;
Decker v. Decker, 108 N. Y. 128, 15
N. E. Rep. 307 ; Mattingly v. Nye, 8
Wall. 373, and cases cited ; Sbaw v.
Manchester, 84 Iowa, 246, 50 N. W.
Rep. 985. Compare Teed v. Valen-
tine. 65 N. Y. 471. Creditors may of
course attack a collusive judgment
when it is a fraud upon them. Lewis
v. Rogers, 16 Pa. St. 18 ; Sidensparker
v. Sidensparker, 52 Me. 481 ; Edson v.
Cumings, 52 Mich. 52 ; Clark v. Doug-
lass, 62 Pa. St. 416, per Sbarswood, J. :
Wells v. O'Connor, 27 Hun (N. Y.)
428. Compare Voorhees v. Seymour,
26 Barb. (N. Y.) 569 ; Meeker v. Har-
ris. 19 Cal. 278 ; Thompson's Appeal,
57 Pa. St. 175 ; Clark v. Foxeroft, 6
Mr. 398; Uhlfelderv. Levy, 9 Cal. 607.
Nee especially Sh;i\v v. Dwight, 27 N.
Y. 244; Mandeville v. Reynolds, 68 N.
Y. 545 ; Bums v. Morse, 6 Paige (N.
Y.) 108; Whittlesey v. Delaney, 7:! X.
V. 571. So the alienee from whom it
j- soughl to recover property may
show thai the judgment is fraudulent
and collusive (Collinson v. Jackson, 14
Fed. Rep. 309, 8 Sawyer, 357. See
Freeman on Judgments, §§ 335-7), or
thai there is, in fact, no indebtedness
M'hi.k v. Anlhoin, 31 Ark. 519; King

v. Tharp, 26 Iowa, 283 ; Esty v. Long,
41 N. H. 103), for judgments may be
fraudulent as well as deeds. Carter
v. Bennett, 4 Fla. 283; Decker v.
Decker, 108 N. Y. 128. Finch, J., said :
" It does not alter the character of this
fraudulent arrangement, or enable it
to defy justice, that it was accom-
plished through the agency of a valid
judgment regularly enforced. That
often may be made an effective agency
in accomplishing beyond its own
legitimate purpose a further result of
fraud and dishonesty." Decker v.
Decker, 108 N. Y. 128, 135, 15 N. E.
Rep. 307. One who is in possession
of property of the debtor trans-
ferred with intent to defraud cred-
itors cannot defend himself on the
ground that the debtor might have
had a defense against the judg-
ment had he chosen to assert it
(Dewey v. Mover, 9 Hun [N. Y.] 479);
but confession of judgment by an ad-
ministrator cannot deprive the grantee
of his intestate of the defense of the
statute of limitation. McDowell v.
Goldsmith, 24 Md. 214. Then a de-
cree confirming a conveyance of real
estate from a husband to a wife in a
suit bet ween them, is not conclusive
upon the husband's assignee in bank-
ruptcy, seeking to annul the transfer
as having been made in fraud of
creditors. Humes v. Scruggs, 94 U.
S. 22. Mr. .Justice Hunt said in this
case : "There would be little difficulty
in making and sustaining fraudulent
transfers of property, if the parties

thereto could by a subsequent suit be-
tween themselves so fortify the deed
that no others could attack it." See

§ 75 T-IKN BEFORE FILING BILL. 147

The execution issued upon the judgment shows that
the remedy afforded at law has been pursued and of
course is the highest evidence of the fact. The return
shows whether the remedy has proved effectual or not,
and, because of the embarrassments which would attend
any other rule, the return is generally considered to be
conclusive. The court will not ordinarily entertain
inquiries as to the diligence of the officer in endeavoring
to find property upon which to levy.1 A general cred-
itor cannot attack another creditor's judgment.2 But the
fraudulent use of a valid judgment may be overturned 3 and
the validity of an execution maybe assailed in a creditor's
suit,4 and a judgment-creditor attacking another credit-
or's judgment by suit assumes the burden of showing
that the judgment assailed was not bona fide and repre-
sented no debt.5

§ 75. Creditor must have lien before filing bill. — We must
then accept the general rule that a court of equity will not
usually interfere to enforce the payment of debts until the
creditor has exhausted all the remedies known to the
law to obtain satisfaction of the judgment. It is usually
essential, in order to give the court jurisdiction, and to

also Van Kleeck v. Miller, 19 N. B. R. ' Jones v. Green, 1 Wall. 332 ; Pier-

494, and compare Garner v. Second stoff v. Jorges, 86 Wis. 129, 56 N.

Nat. Bank, 151 U. S. 420-435, 14 S. C. W. Rep. 735.

Rep. 390. A debtor may attack a ? Frothingham v. Hodenpyl, 185 N.

judgment as having been obtained by Y. 630, 32 N. E. Rep. 240.

fraud. Richardson v. Trimble, 38 3 Decker v. Decker, 108 N. Y .135.

Hun (N. Y.) 409 ; Matter of Hill, 2 4Prentiss v. Bowden, 145 N. Y. 348,

Con. (N. Y.) 27. We may here state 40 N. E. Rep. 13. See [reporters & Tr.

that the frauds which will sustain a Nat. Bk. v. Quackenbush, 143 X. Y.

bill to set aside a judgment or decree 567, 38 N. E. Rep. 728.

between the parties rendered by a 6 Columbus Watch Co. v. Hodenpy]

court of competent jurisdiction are 135 N. Y. 430, 32 X. E. Rep 239.

those which are extrinsic or collateral See Brooks v. Wilson. 125 X. Y. 256,

to the issues litigated. United States 26 N. E. Rep. 258; Sweel v. Con-

v. Throckmorton, 98 U. S. 61, and verse, 8« Mich. I. lit X. W. Rep. 899.
cases cited; Ross v. Wood, 70 N. Y. 9.

148 LIEN BEFORE FILING BILL. § 75

reach equitable assets, that an execution should have
been issued upon the judgment, and returned unsatisfied,
or, if an action is brought in aid of an execution at law,
that it be outstanding. The commencement of the action
will then give the creditor a specific lien J except as
regards chattels subject to be taken on execution.3 The
rule that the legal remedy must be exhausted by the judg-
ment-creditor before relief can be solicited to reach property
not subject to the lien of the judgment is an ancient one.
It existed in England, and was recognized by the Court
of Chancery in New York, before the provisions made
by the Revised Statutes3 of that State, which require
that an execution be issued and returned unsatisfied in
whole or in part, before a bill can be filed to compel a
discovery of property and to prevent a transfer of it.
" This statute," says Chancellor Walworth, in Child v.
Brace,4 " is only declaratory of a principle which had
before been adopted in this court."5 Hence the cred-
itors of an insolvent partnership must acquire a legal or
an equitable lien upon the property of the firm to author-
ize them to invoke the equitable powers of the court in its

1 Adsit v. Butler, 87 N. Y. 587 ; be- or defeated by the death of the debtor

low, 23 Hun (N. Y.) 45 ; Crippen v. before judgment Brown v. Nichols,

Hudson, 13 N. Y. 161 ; Beck v. Bur- 42 N. Y. 26."

dett, 1 Paige (N. Y.) 305; Dunlevy v. 2 First National Bank v. Shuler,

Tallmadge, 32 N. Y. 461. In First 153 N. Y. 172.

National Bank v. Shuler, 153 N. Y. 3 2 N. Y. R. S. 174, §38.

171, the court says : " The rule is well 44 Paige (N. Y.) 309.

settled in this state that the plaintiff Sec Dunlevy v. Tallmadge, 32 N.

in a creditor's action acquires, by the Y. 460 ; Adsit v. Butler, 87 N Y. 587 ;

commencement of the suit, a hen Wiggins v. Armstrong, 2 Johns. Ch.

upon the choses in action and equit- (N. Y.) 144 ; Hendricks v. Robinson, 2

able assets of the debtor, which en- Johns Ch. (N. Y. ) 283 ; Brinkerboff v.

titles him, in the successful evenl of Brown, 4 Johns. Ch. (N. Y.) 671;

the action, to priority of paymenl Spader v. Davis, 5 Johns. Ch. (N. Y.)

thereout in preference to other credit- 280; 8. con error, 20 Johns. (N. Y.)

ore irrespective of the priority of the 554; Willetts v. Vandenburgh, 34

respective judgments (Edmeston v. Barb. (N.Y.) 424; Crippen v. Hudson,

Lyde, 1 Pai. 637; Corning v. White, 2 13 N. Y. 161; Brooks v. Stone, 19 How.

Id. 567), and this lien is not displaced Pr. (N. Y.) 396.

§7^ JUDGMENT SUFFICIENT. i.|>,

administration.1 Nor does the fact that the debtor is an
insolvent corporation, and has alienated its property in
contravention of the statute, authorize a resort to equity
until the remedy at law has been exhausted by judgment
and execution returned unsatisfied.2 But where in such
case the property is in the hands of the receiver, against
whom no execution can be levied, a creditor's bill will lie
without such an execution.3 In general it may be said
that while the mere fact that the execution will probably
prove worthless is not enough to warrant the bring-ine of
a creditor's action without a levy and a return nulla bona,
it is different where such levy is impossible by provision
of law.4

§ 76. Judgment sufficient. — An ordinary money-judg-
ment rendered in the State in which the debtor resides
and the concealed property is located, is manifestly a
proper foundation for a creditor's suit. A bill of this
character may also be filed " to aid in the collection of
money decreed in chancery."5 "I have no doubt, how-
ever," said Chancellor Walworth, " that a creditor, by a
decree in chancery, upon the return of his execution
unsatisfied, is entitled to the same relief, against the
equitable rights and property of his debtor, as a creditor
by a judgment at law."6 A justice's judgment will
suffice/ especially if docketed in a court of record.8 And

1 Crippen v. Hudson, 13 N. Y., 161; Le Fevre v. Phillips, 81 Hun (N. Y.)
Dunlevy v. Tallmadge, 32 N. Y. 457. 232. 30 N. Y. Supp. 709.

See Greenwood v. Brodhead, 8 Barb. 5 Farnsworth v. Strasler, 12 111.

(N. Y. ) 593; Young v. Frier, 9 N. J. 485; Weigtinan v. Hatch, 17 111.281.

Eq. 465. 6Clarkson v. De Peyster, 3 Paige

2 Adee v. Bigler, 81 N. Y. 349. (N. Y. ) 320.

3 Blair v. Illinois Steel Co., 159 111. ' Bailey v. Burton, 8 Wend. (N. Y.)
350, 42 N. E. Rep. 895. 339; Newdigate v. Jacobs, 9 Dana

4 National Tradesmen's Bank v. (Ky.) 18 ; Heiatt v. Barnes, 5 Dana
Wetmore, 124 N. Y. 241, 26 N. E. Rep. (Ky.) 220; Ballentine v. Beall, 4 111. 204.
548; Patchenv. Rofkar, 12 App. Div. * See Crippen v. Hudson, 13 N. Y.
(N. Y.) 475, 42 N. Y. Supp. 35. See 161.

150 JUDGMENT INSUFFICIENT. §77

a judgment by confession, even though defective in form
and particularity of statement, authorizes the creditor to
impeach a fraudulent transfer.1 Judgment entered upon
an offer will stand,2 and will not be set aside at the suit
of another creditor because this method was adopted for
the purpose of avoiding the statutory form of confession
of judgment.3 So a demand classified and allowed by a
probate court will suffice.4 Under a judgment against
joint debtors only part of whom were served with process,
a creditor's action may be prosecuted to reach joint prop-
erty, but not the separate property of those not served
with process in the original suit.5 Supplementary pro-
ceedings may be taken on a judgment so recovered to
reach joint property.6

§ 77. Judgment insufficient.— It seems clear in New York,
at least, that a creditor's action cannot be founded upon
a judgment recovered in a justice's court where the exe-
cution had only been issued to and returned by the
justice.7 It should be docketed in, and made a judg-
ment of, a court of record. It then becomes as much
entitled to the aid of a court of equity as though originally
recovered in a court of record.8 So supplementary pro-

1 Neusbaum v. Keim, 24 N. Y. 325. 6 Billhofer v. Heubach, 15 Abb. Pr.
Compare Harrison v. Gibbons, 71 N. (N. Y.) 143. See Produce Bank v.
Y. 58. If a creditor attacks a con- Morton, 67 N. Y. 199. Compare
fession of judgment as being fraudu- Howard v. Sheldon, 11 Paige (N. Y.)
lent against him he must plead the 558; Commercial Bank of Lake Erie
grounds of the objection. A general v. Meach, 7 Paige (N. Y.) 448.
averment will not suffice. Meeker v. 6 Perkins v. Kendall, 3 Civ. Proc.
Harris, 19 Gal. 278. (X. Y.) 240.

2 Columbus Watch Co. v. Hoden- ' Crippen v. Hudson, 13 N. Y. 161.
pyl, 135 N. Y. 430, 32 N. E. Rep. See Dix v. Briggs, 9 Paige (N. Y.) 595;
239 ; Trier v. Herman, 115 N. Y. 163, Coe v. Whitbeck, 11 Paige (N. Y.) 42 ;
21 X. E. Rep. 1034. Henderson v. Brooks, 3 T. & C. (N.

* Trier v. Herman, 115 N. Y. 163, Y.) 445.

21 N. E. Rep. 1034. BBailey v. Burton, 8 Wend. (N.

*Wrigh1 v. Campbell, 27 Ark. 637. Y.) 339 ; Newdigate v. Jacobs,9Dana

Compare Catchings v. Manlove, 39 (Ky.)18; Heiatt v. Barnes, 5Dana(Ky.)

Miss. 671. 220: Ballentine v. Beall, 4 111. 204.

§77

JUDGMENT INSUIFTCIEXT.

ceedings\ or a creditor's bill cannot be founded upon a
judgment that did not bind all of the debtor's property.1
Again, a judgment in an attachment suit, where the
defendant has not been brought into court so as to make
it a personal judgment, is not evidence of the debt in
another suit founded upon that record ; 2 and a creditor's
bill cannot be brought upon a judgment barred by the
statute of limitations,3 or upon a claim the consideration
of which is illegal.4 And an action based upon a judg-
ment rendered against executors in their representative
capacity, is not maintainable to set aside, as fraudulent as
against creditors, a conveyance of real estate made by a
decedent.5 This latter combination of facts might well
in some instances result in a seeming denial of justice.
The court said that if the facts recited in the complaint
were true, it was the duty of the executors to reclaim the
real estate. Earl, J., observed: "The fact that the
fraudulent grantee is one of the executors furnishes no

1 Importers & Traders' Nat. Bank
v. Quackenbush 143 N. Y. 567, 38 N.
E. Rep. 728 ; Thomas v. Merchants'
Bank, 9 Paige (N. Y.) 215; Rocky
Mountain Nat. Bank v. Bliss, 89 N.
Y. 338.

3 Manchester v. McKee, 9 111. 520.
"It is apparent that the plaintiff
could in no way secure a judgment
in this State against the assignor
for the amount of his indebtedness
before commencing this action. The
assignor was not within the juris-
diction of the courts in this State,
and no personal service of sum-
mons could be made upon him No
service could be made by publication
of the summons so as to procure a
personal judgment against him, in-
asmuch as no attachment could be
levied upon any property of his in
this State after the making of the
assignment. Code Civ. Proc. § 1217;

Capital City Bank v. Parent, 134 N.
Y. 527, 31 N. E. Rep. 976. The money
in the hands of the assignee could qoI
be attached. McAllaster v. Bailey,
127 N. Y. 583, 28 N. E. Rep. 591 ;
Patchen v. Rofkar, 12 App. Div. (X.
Y.) 477, 42 N. Y. Supp. 35."

3 Fox v. Wallace, 31 Miss. 660.

"•Alexander v. Gould, 1 Mass. 165.
See Brooks v. Wilson, 125 N. Y. 262,
26 N. E. Rep. 258.

5 Litchtenberg v. Herdtfelder, 103
N. Y. 302, 8 N E. Rep. 526. In New
York the personal representative must
sue to annul a fraudulent transfer
made by the decedenl (National Bank
v. Levy, 127 N. Y. 552, 28 N. E. Rep.
592 ; Barton v. Hosner, 24 Hun (N.Y.)
467, Laws of 1858, ch. 314; butthe
creditor may bring action where the
personal representative refuses. Nat-
ional Bank v. Levy, L27 X. Y. 552,
28 N. E. Rep. 592.

15- FOREIGN JUDGMENTS. §78

insurmountable obstacle. If she should refuse to restore the
lands to the estate, she could be removed from her office
of executrix, and then the remaining two executors could,
under the act of 1858, disaffirm the conveyances of the real
estate and bring an action to set them aside. Or the two
executors could commence the action making1 the execu-
trix a defendant, and in such an action obtain for the
estate the relief demanded. If the two defendants
refused to commence the action upon the application of
the creditors or some of them, they could be compelled to
commence it by an order of the surrogate." Parties
experienced in suits instituted to annul fraudulent con-
veyances will readily appreciate the perfunctory manner
in which these executors would be likely to prosecute
their associate.

§ 78. Foreign judgments. — Usually a foreign judgment
will not suffice as the foundation of a creditor's bill.1 In
Buchanan v. Marsh,2 which was an action in the courts of
the State of Iowa on a judgment rendered in Canada, an
injunction was asked restraining the defendants from alien-
ating or encumbering their real estate until the rights of
the parties should be determined at law. Wright, C. J.,
said : " Plaintiffs are not judgment-creditors. For the
purpose of the present inquiry, their action is like any
ordinary one upon a note, account, or any simple contract,
or evidence of indebtedness. They have a foreign judg-
ment ; but until it becomes a judgment in our courts, they
are no more than creditors at large, and until they obtain
the recognition of their claim by the adjudication of our
State tribunals, they have no other or different rights as to
the property of their debtor than if their demand was

Patchen v. Rofkar, 12 A.pp. Div. Mountain Nat. Bank v. Bliss, 89 N. Y.
(X. Y.i 175, 12 N. 5T.Supp.35; Rocky 338.

2 17 Iowa. 494.

§ 7§ I ' > REIGN JUDGMENTS. I 53

indorsed by a less solemn or conclusive proceeding or
instrument. For, however effectual such judgment may
be, or whatever the faith and credit to which it may be
entitled, it is very certain that it cannot be enforced here
until its validity is recognized and passed upon by the
judgment of our courts. This being so upon common
law principles, we know of no principle upon which plain-
tiffs were entitled to this injunction. The rule is, as far
as we know, without exception, that the creditor must
have completed his title at law, by judgment (if not by
execution) before he can question the disposition of the
debtor's property." In Rocky Mountain National Hank
v. Bliss,1 the court say : "In requiring- the creditor to
exhaust his legal remedies against the corporation, befon •
resorting to the personal liability of the stockholders, the
statute could not have contemplated that the recovery of
a judgment and issue of an execution against the com-
pany in any State of the Union should be a compliance
with the condition. The legal remedies afforded by the
courts of this State, where the corporation was created
and is domiciled, are those which the legislature must
be deemed to have intended." The weight of authority
sustains this view.~ On the other hand, upon a judg-
ment recovered in Pennsylvania, an attachment was issued
in New Jersey, and the lien thereby created was held to
be sufficient to enable the creditor to attack a fraudulent
transfer.3 A^ain, in Wilkinson v. Yale,4 a creditor's bill
was maintained in the United States Circuit Court,

1 89 N. Y. 342. Eq. 430 ; Crim v. Walker, 79 Mo, 335 ;

•See McCartney v. Bostwick, 31 Brown v. Campbell, 100 Cal. 03.""), 35

Barb. (N. Y.) 390, Overruled 32 N. Y. Pac. Rep. 433.

53; Claflin v. McDerniott. 12 Fed. 3 Smith v. Muirheid, 34 X. -I. Eq. I.

Rep. 375 ; Davis v. Bruns, 23 Hun(N. See Watkins v. Wortnian, 1!) W. Va.

T.) 648; Berryman v. Sullivan, 21 79; Chicago Bridge Co. v. An.ulo-

Miss. 65; Tarbell v. Griggs, 3 Paige Amer. Pack. Co., 46 Fed. Rep. >l

(N. Y.) 207; Farned v. Harris, 19 46 McLean 16. See Bullitt v. Tay-

Miss. 366 ; Davis v. Dean, 26 N. J. lor, 34 Miss. 708.

154

CREDITORS OF A DECEDENT.

§79

founded upon a judgment of a court of the State in which
the Federal court was sitting.1 Still the general rule is
that a foreign judgment ranks as a simple contract debt ;
it does not have the force and operation of a domestic
judgment except for the purposes of evidence, beyond the
jurisdiction in which it is obtained.2

§ 79. Creditors of a decedent— The question of the neces-
sitv of a judgment as the foundation of a creditor's pro-
ceedings, in cases where the debtor is dead, has created
much dissension in the courts. Estes v. Wilcox,3 an
important case in the New York Court of Appeals, is to
the effect that a creditor without judgment and execution
returned, cannot maintain an action to enforce a resulting
trust under the statutes of uses and trusts, in lands pur-
chased and paid for by the debtor, and deeded to another,
although the debtor died insolvent. It was held that
these facts did not dispense with the observance of the

'Compare, however, Tompkins v.
Purcell, 12 Hun (N. T.) 664 ; Tarbell
v. Griggs, 3 Paige Ch. (N. Y.) 208;
Steere v. Hoagland, 39 111. 264 ; Bul-
litt v. Taylor, 34 Miss. 708, 743 ; Brown
v. Bates, 10 Ala. 440; Goodyear Vul-
canite Co. v. Frisselle, 22 Hun (N. Y.)
174; Crim v. Walker, 79 Mo. 335;
Claflin v. McDermott, 12 Fed. Rep.
375. Bui see to the effect that a judg
ment in a United States courl is to he
considered a domestic judgment of
the State within which it is rendered.
Firsl Nat. Ilk. v. Sloman,42 Neb. 350,
en X. W. Rep. 589 ; Ballin \ Loeb,78
Wis. 104, 17 N. W. Rep. 516; Embry
v. Palmer, L07 U. 8. 3, -J S. < '. Rep,
25 ; A. lams v. Way, 33 Conn. 119. In
Johnson v. Powers, 139 i'. S. 156, 159,
tin- courl said : " A judgment re-
covered against tin- administrator of
;i deceased person in one State is no
evidence of debt, in a subsequent suit
by tin- same plaint ill' in anol her state.

either against an administrator,
whether the same or a different per-
son, appointed there, or against any
other person having assets of the
deceased. Aspden v. Nixon, 4 How.
KIT: Stacy v. Thrasher, 6 How. -11 ;
McLean v. Meek, 18 How. 16 : Low
v. Bartlett, 8 Allen (Mass.) 259." As
to when a foreign judgment is only
prima fade evidence in this country
and for an exhaustive review of. the
authorities, see Bilton v. Guyot, 159
U. S. li:'>, and cases cited. To im-
peach a foreign judgment, the fraud
must be distinctly alleged, Ritchie \.
McMullen, 159 V. S. 342; White \.
Hall. 12 Ves. 321.

'McElmoyle v. Cohen, 13 Pet. 312.
An administrator appointed in one
State cannot sue in another state,
Johnson v. Powers. 139 U. S. 156, 11
S. ('. Rep. 525.

3 67 N. Y. 264.

§79 CREDITORS OP A DECEDENT. [55

general rule that a debt must be fixed and ascertained by
judgment, and the legal remedies exhausted.1 It is con-
tended that the reason of the rule that a creditor's debt
must be ascertained by judgment before proceeding in
equity, does not necessarily fail by the death of the debtor
before judgment recovered upon the debt. The creditor
may prosecute the claim to judgment against the personal
representatives of the debtor, and although it will not be
conclusive against his heirs or his grantees by title
acquired before his death, it would conclude the creditor
as to the amount of his claim.2 But we cannot discover
that the judgment against the personal representatives
would be of much worth to the creditor.3 This case cer-
tainly extended the requirement to an extreme limit.4
Recent cases uphold the rule in all its strictness where the
action is brought exclusively for the benefit of the com-
plainant.5 But by recent legislation creditors can bring
without judgment or execution an action to set aside a
fraudulent conveyance, if it is brought on behalf of all
parties interested.6 In a number of States the principle is
asserted that no proof of the recovery of judgment is
necessary where the debtor is dead,7 as the judgment

'See Allyn v. Thurston, 53 N. Y. 5 Prentiss v. Bowden, 145 N. Y.

622; Fox v. Mover, 54 N, Y. 129; 342, 40 N. E. Rep. 13 ; ch. 487, Laws

Shaw v. Dvvight. 27 N. Y. 249 : North of 1889.

American Fire Ins. Co. v. Graham, 5 6See§112. See N. Y. Lawsl889,ch

Sandf. (N. Y.) 200 ; Jones v. Green, 1 487 ; Brown v. Brown, 83 Hun (N. 5 . I

Wall. 332, per Justice Field ; Chitten- 162, 31 N. Y. Supp. 650. See Nat.

den v. Brewster, 2 Wall. 196. See Tradesmen's Bank v. Wetmore, 124

also § 73. N. Y. 241, 26 X. E. Rep. 2 18.

'2Estes v. "Wilcox, 67 N. Y. 266; 7 Johnson v. Jones, 79 Ind. 141;

Burnett v. Gould, 27 Hun(N. Y.) 366; Kipper v. Glancey, 2 Blackf. (Ind.)

followed in Ohm v. Superior Court, 356; O'Brien v. Coulter, 2 Blackf.

85Cal. 548, 26 Pac. Rep. 244. See (Ind. ) 421 ; Spencer v. Armstrong, 12

O'Connor v. Boylan, 49 Mich. 209, 13 Heisk. (Tenn.) 707; Love v. Mikals,

N. W. Rep. 519; Fletcher v. Holmes, 11 Ind. 227; Spicer v. A.yers, 2 T. &

40 Me. 364. C. (N. Y.) 628 : Reeder v. Speake, I S.

3 Lichtenberg v. Herdtfelder, 103 C. 293 ; Haston v. Castner, 29 N. J.

N. Y. 302. Eq. 536; Offutt v. King, 1 MacA.

4See Merchants' Nat. Rank v. (D. C.) 314; Fowler's Appeal, 87 Pa.

Paine, 13 R. I. 594. St. 449 ; Shurts v. Howell, 30 N. J.

156 JUDGMENTS IN EQUITABLE ACTIONS. § 80

would be useless and unmeaning.1 In Hagan v.
Walker,'' Mr. Justice Curtis, a very learned and able
jurist, held that a simple creditor might maintain a suit to
remove a covinous conveyance and reach assets, against
the administrator and the fraudulent alienee of a deceased
debtor. The court was of opinion that such a case was
not to be treated as an application by a judgment-cred
itor for the exercise of the ancillary jurisdiction of the
court to aid him in executing legal process, but came
under the head of original jurisdiction in equity.3 The
authorities upon this subject cannot be reconciled. The
best reasoning would seem to be with the cases holding
that no judgment need be recovered against the deced-
ent's estate, and in favor of allowing the creditor both
to establish his claim, and to discover assets to be applied
toward its payment, in the same action. The practice of
allowing executors and administrators to prosecute actions
to annul fraudulent transfers, in the interest and right of
creditors, will be noticed presently. Where the personal
representatives sue, the necessity for judgment and exe-
cution returned unsatisfied is superseded.4

S 80. Rule as to judgments in equitable actions. — The
remedy, it seems, must also be exhausted where the judg-
ment proceeded upon was rendered in an equity suit.
Thus in Geery v. Geery,5 which was an action brought to

Eq. 418; Phelps v. Piatt, 50 Barb. (N. 10(5; Bqy v. Cook, 31 111. 336; Merry

Y.) 430: Steere v. Hoagland, 39 111. v. Fremon, 44 Mo. 518; Snodgrass v.

264 ; Lyons v. Murray, 95 Mo. 23, 8 S. Andrews, 30 Miss. 472. Compare Hills

W. Rep. 170. v. Sherwood, 48 Cal. 386.

1 Piatt v. Mead, 9 Fed. Rep. 9G ; 4 Barton v. Hosner, 24 Hun (N. Y.)

Loomis v. Tifft, 16 Barb. (N. Y.) 541, 471. Compare National Bank v. Levy,

(contra, Estee v. Wilcox, 67 N. Y. 127 N. Y. 552, 38 N. E. Rep. 592;

264); Dora 11 \ . Simpson, 1 Ves. 651 ; Lichtenberg v. Herdtfelder, 103 N. Y.

A-lsagerv. Rowley, 6 Ves. 749 ; Wright 302, 8 N. E. Rep. 526. See§§ 112,113.

v. Campbell, 27 Ark. 637. » 63 N. V. 252; overruling White v.

*14How.32 See Merchants', etc. Geraerdt, 1 Bdw. Ch. (N. Y.) 336. See

Trans. Co. v. Borland, 53 N. J. Eq. Sullivan v. Miller, 106 N. Y. 641, 13

282, 31 Atl. Rep. 272. N. E. Rep. 772.

'See Green v. Creighton, 23 How.

§ 8o JUDGMENTS F\ EQUITABLE ACTIONS. 157

set aside conveyances of real estate alleged to have
been made by the defendant, through other persons, to
his wife, in fraud of creditors, there was no proof of the
docketing of a judgment, and of execution returned
unsatisfied, and the point was taken that the ordinarj
remedy usually available to creditors had not been
exhausted. The creditor sought to obviate this objection
by urging that the rule did not apply where the judgment
sought to be collected was rendered in an equitable action.
It appeared that the foundation of the complainant's
claim was a judgment rendered upon a partnership
accounting, but the judgment had not been docketed, nor
had any execution been issued upon it. Earl, J., said :
"I can perceive no reason for a distinction. A suit in
equity to enforce satisfaction of a judgment should not
be allowed so long as there is a more simple and obvious
remedy. The statute law gives a remedy by execution,
and that remedy, upon every reason of public policy and
convenience, should be exhausted before a new suit
should be allowed to be maintained." ' Then Johnson, J.,
observed, in Crippen v. Hudson, ~ that "the court of
chancery required executions to be returned unsatisfied,
when issued on its own decrees, before it would entertain
creditors' bills founded upon them."3 There is, however.
a rule running through some of the cases to the general
effect that, where the claim asserted is purely equitable,
and such as a court of equity will take cognizance of in
the first instance, equity will at the same time go to the
extent of inquiring into the matter of obstructions which
have been placed in the way of enforcing the demand.1

•See supra, %% 76, 77. Clarkson v. myer v. Crawford, G Paige (N. Y.)

De Peyster, 3 Paige (N. Y.) 320 : S. p., 254.

Adsit v. Butler, 87 N. Y. 585-r»s!t. * Halbert v. Grant, -1 Mon. (Ky.)

2 13 N. Y. 161. 583. Compare Shea v. Knew ill'' &

3 See North Am. Fire Ins. Co. v. Kentucky R. R. Co.. <i Baxter (Tenn. )
Graham, 5 Sandf . (N. Y.) 198 ; Speigle- 277.

158 SPECIFIC LIEN BY ATTACHMENT. § 8l

For instance, where a surety has paid money for a princi-
pal, chancery has jurisdiction of a suit for its recovery,
and the complainant ma)' add a prayer seeking to annul a
fraudulent conveyance that stands in the way of a settle-
ment or is calculated to defeat or embarrass the remedial
action of the court.1

§ 81. Specific lien by attachment. — In cases where the
sheriff takes property upon attachment, which is of a
nature subject to seizure and sale, but which has been
fraudulently transferred, it seems rather clearly estab-
lished that the plaintiff, after the service of the attach-
ment, is not considered a mere creditor at large, but,
according to some of the authorities, one having a specific
lien upon the goods attached, and that the sheriff has a
like lien, and the right to show, as a defense to an action
for taking the property, or in support of his possession,
that the title of the party claiming it from the officer is
fraudulent as against the attaching creditor.2 Hence it
was held, in an action brought by a general assignee for
the benefit of creditors, to recover goods seized by a
sheriff on a warrant of attachment issued against the
assignor, that it was permissible for the sheriff to show
that the assignment was fraudulent and void as against
the attaching creditors.3 There is some confusion, how-

1 Waller v. Todd, 3 Dana (Ky.) 508. App. 704, 4 C. C. A. 205, 54 Fed.

Compare Smith v. Rumsey, 33 Mich. \lf\>. 93.

184; especially Swan v. Smith, 57 s Carr \. Van Boesen, 26 Hun (N.

Miss. 548. Butsee§85. 5 1 316; Rinchey v. Stryker, 28 N. Y.

Gross v. Daly, 5 Daly (N. Y.i 542 ; 15; Eess v. Hess. 11TN Y. 308, 22 N. E.

Rinchey v. Stryker, 28 N. Y. 4"), 26 Rep. i»o(i. In the hitter case the court

How. Pr. ?•"> ; Noble v. I loliin's. ."i Hill says: '-Goods and chattels fraudu-

(N Y.) 194; Van Etten v. Burst, 6 lently assigned by a debtor, to hinder,

IlilhN. F.)311; Sheaf e v. Sheafe, 40 delay and defraud creditors, are at-

X. I! 516; Webster v. Lawrence, 47 tachable in the bands of his volun-

IIuiiiN. 5f.) 565 ; Lux v. Davidson, 56 tary assignee al the suit of ;i creditor

Bun(N. r.)345,9N. Y. Supp. 816; defrauded bj the assignment. Rin-

Waples Platter Co. v. how. 10 U. S. chej v. Stryker, 28 N. Y.45; Frosl v.

§ 8l SPECIFIC LIEN BY ATTACHMENT. 1 59

ever, in the authorities on the question of the right of an
attaching creditor to attack fraudulent transfers. The
Supreme Court of Nebraska and the courts of some other
States deny such right in a variety of instances.1 The
Nebraska case is rested upon the authority of Brooks v.
Stone,2 which proceeds on the theory that the creditor's
remedy at law is not exhausted, his claim is not definitely
established, and perhaps he will never succeed in getting
a judgment.3 So garnishment process does not create a
sufficient lien to uphold a creditor's bill.4 In New York,
a State in which the authorities relating to different
phases of our general subject are burdened with sub-
tle distinctions, and show apparent conflicts, it is said
that an attaching creditor could not maintain an inde-
pendent action in the nature of a creditor's bill to set
aside a fraudulent transfer of a chose in action.5 This
case rested upon the theory that the attachment, owing
to the nature of the property, created no lien ; but where
a lien is in fact acquired, the rule, as already stated, may be
different,6 as for example, when the attaching creditor or

Mott, 34 id. 253. The rule which pre- nent v. Battey, 18 Kan. 324 ; Martin

vents the levy of an execution, under v. Michael, 23 Mo. 50 ; Greenleaf v.

similar circumstances, upon equitable Mumford, 19 Abb. Pr. (N. Y.) 469

assets or choses in action, proceeds Mills v. Block, 30 Barb. (N. Y.) 549

upon peculiar grounds, not applicable Melville v. Brown, 16 N. J. Law, 364

to chattels, of which there can be a McMinn v. Whelan, 27 Cal. 300.

manual tradition. Thurber v.Blanck, - 19 How Pr. (N. Y.) 395 : see Dun-

50 N. Y. 80; Anthony v. Wood, 96 levy v. Tallmadge, 82 X. Y. 157.

id. 180. If, therefore, the present ac- s Compare Jones v. Green, 1 Wall,

tion had been continued against the 331. See § 73.

sheriff, there can be no doubt that he 4 Bigelow v. Andress, :i! Ml.

could have defended the original tak- 5 Thurber v. Blanck, 50 X. Y. 80.

ing by showing that he took the See Whitney v. Davis, 14S N. Y. 260,

goods "under a valid attachment 42 N. E. Rep. 661, explaining People

against Hirschhorn & Co., and that ex rel. Cauffman v. Van Buren, 136

the assignment to the plaintiff was N. V. 252, 32 N. E. Rep. 775

fraudulent as to the plaintiff in the 'Carr v. Van Boesen, 26 linn (N.

attachment suit." Compare Bates v. Y.) 316 ; Rinchey v. Stryker, 28 V Y.

Plonsky, 28 Hun (N. Y.) 112. 45. Compare Frost v. Moll. 3 1 N. Y.

1 Weil v. Lankins, 3 Neb. 384 ; Ten- 255 ; Smith v. Longmire, 24 Hun (N.

i6o

SPECIFC LIEN BY ATTACHMENT.

§8l

the sheriff is a defendant, at the suit of the fraudulent
alienee, and relief will be, in certain instances, extended,
both in that State and in sister States, for the protection
and vindication of the lien.1 The words of the statute
usually make a judgment an absolute prerequisite to
the creditor's bill. While it is admitted that a creditor
may attach assets fraudulently transferred, it remains
doubtful whether he can use the attachment lien for any
other than purely defensive purposes, at least until he
has obtained judgment. But where there is danger that
assets fraudulently transferred which have been attached
will be taken from the jurisdiction of the court, an injunc-
tion will be granted to the attaching creditor.2 In Whit-
ney v. Davis,3 the case of People ex rel. Cauffman v. Van
Buren,4 is explained and certainly not extended.5 In Bowe
v. Arnold6 the courts of New York held that the plaintiffs,
in an action instituted by attachment, could not join with
the sheriff in a suit against an assignee claiming the prop-
erty under an assignment which it was sought to set aside
in the action as fraudulent. It was conceded that such

Y.) 257; Hall v. Stryker, 27 N. Y.
596 ; Castle v. Lewis, 78 N. Y. 131 ;
Ocean Nat. Bank v. Olcott, 46 N. Y.
12 ; Deutsch v. Reilly, 57 How. Pr.
(N. V.) 75 ; Whitney v. Davis, 148 N.
Y. 260, 42 N. E. Rep. 661.

1 Heyneinan v. Dannenberg, 6 Cal.
378 ; Scales v. Scott, 13 Cal. 76; Joseph
v. McGill, 52 Iowa, 128: Heye v.
Bolles, 33 How. Pr. (N. Y.) 266 ; Mer-
riam v. Sewall, 8 Cray (Mass.) 316;
Falconer v. Freeman, I Saudi'. Cli.
i X. Y.i 565 : Stone v. Anderson, 26 N.
II. 506 ; Dodge v. Griswold, 8 N. H.
425; Hunt v. Field, 9 N. J. Eq. 36;
Williams v. Michenor, 11 X. .) . Eq.
520: shear.- v. Sheafe, i<» X. ii. 516:
Whit lies v. Davis. IIS X. Y. 260, 42
X. E. Rep. 661,

2 People ex rel. Cauffman v. Van
Buren, 136 N. Y. 252, 32 N. E. Rep. 775.

3 148 N. Y. 256, 42 N. E. Rep. 661.

4 136 X. Y. 252, 32 N. E. Rep. 775.

6 "Where the attachment is issued
against property of nonresident
debtors, the righl maj now be en-
forced in New York by an act ion in
aid of the attachment. Chap. 504, X.
Y. Laws 1889; Hardin- v. Elliott, 91
Hun (N. Y.) 506, 36 N. Y. Supp, 648.
Tn New .lersev an affirmative action
may lie brought by a creditor having

a lien. Cocks v. Varnev, 45 X. .1. Eq.
72, 17 Atl. Rep. 10S. See Taylor v.
Branscombe, 71 Iowa. 534, 38 X. W.
Rep. 400.

• is Weekly Dig. (X. Y.) 326; 31
I Inn (N. Y.) 256 ; affi'd 101 X. Y. 652.

§ 8l SPECIFIC LIEN BY ATTACHMENT. 161

parties might join in that State,1 in actions to collect
debts, effects, or choses in action attached by the sheriff,2
but the court observed that this was not such a case.
The counsel sought, upon the authority of Bates v.
Plonsky,3 to maintain the action as being instituted for
the protection, preservation, and enforcement of the lien
obtained by the supposed levy of the attachment, but the
court said that the precedent cited was a suit of a differ-
ent nature, and was prosecuted merely to enjoin the
distribution of a fund until the rights of the conflicting
claimants could be established. It is observed in the
course of the opinion that a creditor could only file a bill
to annul a fraudulent transfer after return of execution
unsatisfied,4 or in aid of the execution after the recovery
of a judgment.5

The judgment in this case may have been correct, but
in view of the other authorities cited, the decisions of
that State relative to the rio-hts of an attaching creditor
are not in a very clear or satisfactory condition. We
incline to deny that a mere attaching creditor can, under
any correct theory of law and without legislative aid,
become an actor in a creditor's suit. Indeed the under-
lying principles of the cases in which it is sought to make
a lien acquired by the provisional remedy of attachment
the practical equivalent of a lien procured by final judg-
ment, are subversive of the time-honored policy and rule
of the courts, that a creditor's bill must be founded upon

1 See N. Y. Code Civ. Pro. §£ 655-667. N. Y. 261, 82 N. E. Rep. 775 ; Keller

'•'Compare Thurber v. Blanck, 50 N. v. Payne, 22 Abb. N. C. (N. Y.)

Y. 86; People ex rel. Cauffman v. Van 1 N. Y. Supp. 148 ; W hitnej \. I

Buren, 136 N. Y. 252, 32 N. E. Rep. 148 N. Y. 256, 42 N. E. Rep. 661.
775 ; Whitney v. Davis, 148 N. Y. 260, 4 See Chatauque Co. Bank v. Risley,

42 N. E. Rep. 661; Lynch v. Ciary, 52 10 N. Y. 370 ; Cole v. Tj Ler, 65 N. Y.

N. Y. 183. 73 : Ballou v. Jones. 13 Hun (N. Y.)

3 28 Hun (N. Y.) 112. See People 629.
ex rel. Cauffman v. Van Buren, 136 5See Adsit v. Butler, 87 X. Y. 585.

II

1 62 SPECIFIC LIEN BY ATTACHMENT. § 8 1

a definite claim, established by a judgment at law.1 If
the innovations in modern procedure call for the abroga-
tion of this old chancery practice, it should not be super-
seded by indirection, but deliberately, and by some care-
fully formulated legislative substitute. The requirement
is neither artificial nor technical ; it is a necessary pro-
tection and safeguard to the debtor. Manifestly, where
the property in controversy is of such character as not to
be susceptible to an attachment lien, the attaching cred-
itor cannot, either as plaintiff or defendant, avoid or
attack any alienation or disposition that may have been
made of it ; he has no status and no lien. Where, how-
ever, an attachment lien has been actually acquired, and
the officer or attaching creditor is made defendant in a
suit by the fraudulent alienee, the efficacy of the lien
may be vindicated by setting up the fraud by way of
defense, because the plaintiff will be forced to recover
upon the strength of his own title, and if it be shown that
such title is affected with fraud as regards the defendant
or attaching creditor, the plaintiff will fail to make out a
good title.2 Chancellor Green said in New Jersey:

1 See § 73. Wales v. Lawrence, 36 attaching creditor to maintain, ordi-
N. J. Eq. 209. narily, prior to judgment and execu-

2 In Whitney v. Davis, 148 N. turn, nor to introduce any innovation
Y. 201, 42 N. E. Rep. 661, Gray, upon the settled rule It was con-
J., said: ''All that the Cauffman sidered, however, that where the
case (People ex rel. Cauffman v. debtor's property was about being
Van Buren, 136 N. Y. 252, 32 N. E. transferred beyond the reach of the
Rep. 775) decided was, that special sheriff, in whose hands it was, a case
circumstances mighl exist and if was presented where the court might
shown thai they would authorize the properly extend its equitable arm and

granting of equitable relief at the in- stay the threatened transfer

stance <«t' an attaching creditor, What reason is there, or what justifi-

though prior to judgment and execu- cation exists for allowing an attach-

tion, in order to preserve tin- debtor's ing creditor, before hi' has established

property in a condition where a re- his claim against his alleged debtor,

covery by the attaching creditor to attack an apparently valid transfer

could be made effective. It was not of real estate?" An attaching creditor

mtended to hold thai an equitable may proceed by creditor's hill in New

action was within the power of the Jersey. Francis v. Lawrence, 48 N.

§ 82 PROPERTY TAKEN IN NAME OF THIRD PARTY. 1 63

" Equity will not, of course, grant its aid to enforce legal
process." 1

§ 82. Property of the debtor taken in name of third party. —
The rules of procedure in cases where property has been
paid for by the debtor, but the title taken in the name of
third parties, have already been noticed.3 The New
York Court of Appeals, in The Ocean National Bank v.
Olcott,3 said, ill-advisedly as we think, that it was diffi-
cult to perceive the reason for any distinction between
the rights of creditors as to the property fraudulently
transferred by the debtor personally, and property paid
for by him and transferred by the vendor or grantor to a
third person. " Why," said Chief-Justice Church, " should
creditors have different and superior rights to enforce
their debts, in the latter case, to those enjoyed in the
former? I can see no reason for any distinction, and I
do not believe the statute has created any. But, in either
case, the commencement of an equitable action is neces-
sary to constitute a lien or charge, in any legal sense,

upon the land The harmony and analogies of the

law are better preserved by requiring all available legal
remedies to be resorted to, as a preliminary requisite to
an action for the application of the trust property." In
Ohio it is said that the statute4 does not apply to cases
where the title is taken in the name of a third party for the

J. Eq. 512, 22 Atl. Rep. 259. An at- 77 N. Y. 219; Scott v. Morgan, 94 N.

taching creditor was allowed in Na- Y. 509, as bearing upon the jurisdic-

tional Park Bank v. Goddard, 131 N. tion wnich was hotly contested.

Y. 494, to file a bill and secure an > Robert v. Hodges, 16 N. J. Eq. 303.

injunction, the appointment of are- See Wales v. Lawrence, 36 N. J. Eq.

ceiver and the sale of an attached 209.

stock of goods, also claimed by numer- 2 See § 57.

ous defendant creditors who had 346N. Y. 23.

revoked the sales for fraud and had ' Swan & Sayler's Stats. 397, regu-
brought replevin suits, each claiming lating the mode of administering as-
disputed portions of the partially signments in trust for t he benefit "|
manufactured stock. Compare Su- creditors.
pervisors of Saratoga Co. v. Deyoe,

164 PROPERTY TAKEN IN NAME OF THIRD PARTY. § 82

reason that the avoidance of the conveyance merely leaves
the title in the grantor, which, of course, does not benefit
the creditor; 1 such an interest it is argued must be reached
by a creditor's bill.- It cannot be sold on execution.3 This
question arose in Spaulding v. Fisher.4 It was held that
property purchased with the funds of the debtor, though
taken in the name of a third party, was the property of the
debtor as regards his creditors. The court said: u Its
fraudulent transfer and concealment is equally established,
whether the transfer is directly from the debtor or from
another by his direction and procurement, the property
transferred having been purchased with his funds. The
object of the statute is to afford a remedy to the creditor
against any one to whom the property of his debtor no mat-
ter in what it consisted, or how situated, has been fraudu-
lently transferred for the purpose, and with the intent on
the part of the debtor transferring, and the individual
receiving such transfer, to conceal the same, so as ' to secure
it from the creditors and prevent its attachment or seizure
on execution.'"5 Even where by statute his interest can
be sold on attachment or execution it has been held that
this did not change the nature of the interest which those
claiming under him take in the property so conveyed.

1 Shorten v. Woodrow 34, O. S. 645. 1844, c. 107, took effect, land paid for

2 Bomberger v. Turner, 13 O. S. 263. and occupied by a debtor, the legal
See Martin v. Elden, 32 O. 8. 282. title to which had never been in him,
Compare Combs, v. Watson, 32 0. S. but had been conveyed to another per-
228. son in order to secure it from hiscred-

3Garliel<] v. Hatmaker,15 X. Y. !?.">. itors, could not be attached or taken on

An equitable trust arises in favor of execution as his property. Hamilton

creditors enforceable in equity. Brown v. ( !one, 99 Mass. 47 s; Howe \ . Bishop,

v. Chubb, i:::. \. Y. 177, :!l X. E. Rep. 3 Met. (Mass.) 26. See also Gar-

1030. Batesv. Ledgerw I M'f'gCo., field v. Hatmaker, 15 N. Y.475;Web-

130 X. Y. 205,29 X. E. Rep. 102. ster v. Folsom, 58 Me. 230. Compare

Robertson v. Sayre, 184 N.Y. '■><). :ii Guthrie v. Gardner, 19 Wend. (N. Y.)

N. E. Rep. 250. 114 ; and see Arbuckle Brothers Coffee

'•-)7 Me. 415. See § 57. Co. v. Werner, 77 Tex. 43; 13 S. W.

In Massachussetts, until the St. of Rep. 963.

§ 83 WHEN JUDGMENT tS UNNECESSARY. [65

As to them the conveyance is valid, so that e. g. his wife
is not entitled to any interest in the propertyby virtue of
the marriage.1

§ 83. When judgment is unnecessary.— It has been
decided, though the question is a debatable one, that in
special cases, if the execution cannot be issued in the State
in which the land lies, it will suffice if issued in the State of
the debtor's residence ;2 and if the debtor's property is in
the hands of a receiver appointed by the court, so that a
levy cannot be made, levy is excused; 3 the same rule
applies when the property is in the hands of an assignee
in bankruptcy;4 and where, by reason of special circum-
stances, the creditor has no remedy at law, it has been
argued that the legal remedy cannot be exhausted before
proceeding in equity.5 McCartney v. Bostwick 6 seems
to be in its general statements overruled by Estes v.
Wilcox ; 7 at least the courts have so held.8 A distinc-
tion is drawn in McCartney v. Bostwick between prop-
erty fraudulently alienated by the debtor, and property
paid for by him and taken in the name of a third party.
In the former instance, the proceeding is to remove imped-
iments in the way of reaching the debtor s property; in the
latter, it is to charge with a statutory lien the property of
a third party, which the debtor never owned ; in the one
case, it is to exercise auxiliary jurisdiction in aid of legal
process ; in the other to enforce a trust of which the courts

1 Marshall v. Whitney, 43 Fed. Rep, See also Adsit v. Sanford, 23 Hun

343 ; but see Whitney v. Marshall, 138 (N. Y.) 49.

Ind. 472, 37 N. E. Rep. 964. 4 Barker v. Barker, Assignee, 2 Fed.

- McCartney v. Bostwick, 32 N. Y. Cas. 807.

53. 6Kamp v. Kamp, 46 How. Pr. (N.

3 Stewart v. Beale, 7 Hun (N. Y.) Y. ) 143 ; overruled in other respects, 59

405. This case contains an important N. Y. 212. See § 80.

review of the authorities, and is af- 632 N. Y. 53. Compare Niver v.

firmed without an opinion in the Crane, 98 N. Y. 40.

Court of Appeals. See 68 N. Y. 629. 7 67 N. Y. 264.

8 Evans v. Hill, 18 Hun (N. Y.) 465.

l66 WHEN JUDGMENT IS UNNECESSARY. § 83

of law have no jurisdiction. We have already shown that
Chief-Justice Church, in a later case, could see no reason
for this distinction.1 In a controversy which arose in
Georgia, it was decided that where a creditor of an insol-
vent estate was under injunction not to sue the executor,
this constituted a good excuse for not obtaining judgment
on his debt before proceeding by bill in equity to cancel a
voluntary conveyance made by the testator in his lifetime.2
The court in this case seemed determined to favor the
creditor, for it was held that if, during the pendency of the
bill, a judgment or decree establishing the amount of the
debt was obtained against the executor, it might be brought
into the bill by way of amendment, and used as effectively
as if the adjudication had preceded the filing of the bill,
and had been originally alleged therein.3 Where the
performance of a condition becomes impossible or illegal,
performance is excused.4 So in some States creditors
may proceed against an insolvent estate without the
return of an execution.5 In Case v. Beauregard,6 Mr.
Justice Strong observed : " But, after all, the judgment
and fruitless execution are only evidence that his legal
remedies have been exhausted, or that he is without

■The Ocean National Bank v.Olcott, pare Crompton v. Anthony, 13 Allen

46 N. Y. 22. See§ 82. (Mass.) 36; Wright v. Campbell, 27

'Compare Shellington v. Howland, Ark. 637 ; Everett v. Raby, 104 N. C.

53 N. Y. 371. 479, 10 S. E. Rep. 526; Gilbert v.

3 Cleveland v. Chambliss, 64 Ga. Stockman, 81 Wise. 802, 51 N. W. Rep.

352. 1076, 52 Id. 1045.

4 Shellington v. Howland, 53 N. Y. • 101 U. S. 690. "This rule is not

374; Cohen v. N. Y. Mutual Life Ins. so unrelenting as to deny to a party

Co., 50 N. Y. 610; Semmes v. Hartford the interposition of the equity powers

Ins. Co., 13 Wall. 158. of the court when the situation is such

5 Steere v. Hoagland, 39 111. 264 ; as to render impossible the aid of a

McDowell v. Cochran, 11 111. 31 ; Bay court of law to there take the pre-

v. Cook, 31 111. 336 ; Hagan v. Walker, liminary steps and produce what

14 How. 32 ; Merry v. Fremon,44 Mo. ordinarily may be treated as the con-

518; Haston v. Castner, 29 N. J. Eq. dition precedent to the application

536; Johnson v. Jones, 79 Ind. 141; for equitable relief." National Trades-

Platt v. Mead, 9 Fed. Rep. 96. Com- men's Bk. v. Wetmore, 124 N. Y. 249.

§ 83 WHEN JUDGMENT IS UNNECESSARY. 1 67

remedy at law. They are not the only possible means of
proof. The necessity of resort to a court of equity may
be made otherwise to appear. Accordingly the rule,
though general, is not without many exceptions. Neither
law nor equity requires a meaningless form, ''Bona, sed
imposs'ibilia non cogit lex' It has been decided that
where it appears by the bill that the debtor is insolvent
and that the issuing of an execution would be of no
practical utility, the issue of an execution is not a neces-
sary prerequisite to equitable interference.1 This is cer-
tainly true where the creditor has a lien or a trust in his
favor."2 The observations of Mr. Justice Strong were
not accorded hearty approval for a long time in the
Supreme Court itself.3 The rule laid down by him has
been followed, however, in many cases, especially where a
trust existed in favor of the creditor.4 In Russell v.
Clark,5 Chief-Justice Marshall, in discussing the general
subject, said : " If a claim is to be satisfied out of a
fund, which is accessible only by the aid of a court of
chancery, application may be made, in the first instance,
to that court, which will not require that the claim should
be first established in a court of law."6 Then, as we
shall presently see,7 in cases where the statute gives a

'Citing Turner v. Adams, 46 Mo. Pack. Co., 46 Fed. Rep. 584 ; Consoli-

95 ; Postlewait v. Howes, 3 la. 365
Ticonic Bank v. Harvey, 16 la. 141
Botsford v. Beers, 11 Conn. 369

dated T. L. Co. v. Kansas City Var-
nish Co., 45 Fed. Eep. 7 ; Kanka-
kee "Woolen Mill Co. v. Kampe,

Payne v. Sheldon, 63 Barb. (N. Y.) 38 Mo. App. 234; Reyburn v. Mitch-

169. See Fink v. Patterson, 21 Fed. ell, 106 Mo. 365, 16 S. W". Rep. 592 ;

Rep. 609. Sage v. Memphis, etc. R. R. Co.,

- See Austin v. Morris, 23 S. C. 403. 125 U. S. 376, 8 S. C. Rep. 887 ; Blanc

3 Taylor v. Bowker, 111 U. S. 110, v. Paymaster Mining Co., 95 Cal. 524.
4 S. C. Rep. 397; People's Savings 30 Pac. Rep. 765.

Bank v. Bates, 120 U. S. 556, 7 S. C. 5 7 Cranch 89.

Rep. 679. Compare Thompson v. 6 See Shufeldt v. Boehm, 96 111.563;

Van Vechten, 27 N. Y. 568, 582; Bax- Steere v. Hoagland, 39 111. 264.

ter v. Moses, 77Me. 476 1 Atl. Rep. 7 See Chap. VII. Bennett v. Minotl

350 ; Jones v. Greene, 1 Wall. 330. 28 Oreg. 339, 44 Pac. Rep. 288.

4 Chicago Bridge Co. v. Anglo- Amer.

1 68 ABSCONDING DEBTORS. § 84

new remedy in favor of creditors at large, by giving to
an assignee or trustee for their benefit a statutory right
to property conveyed in fraud of creditors, this statutory
right takes the place of the specific lien required by law
as a condition of the ri^ht of individual creditors to con-
test the validity of the transfers.1

§ 84. Absconding- and non-resident debtors. — The fact
that the debtor is a non-resident, and has no property
within the State, has been considered not to be proof
that all the legal remedies have been exhausted. ~ If he
has fraudulently alienated real property within the State,
his interest, whatever it may be, must be first reached by
attachment.3 Where, however, the debtor has absconded
so that no personal judgment can be obtained against
him, and there is no statutory- proceeding by which his
property can be reached, it has been held that a creditor's
bill will lie in the first instance, and from the necessity of
the case,4 and where a State statute provides that in case
of fraudulent alienations a trust results to creditors
where the debtor is a non-resident and has no property
in the State, an action to enforce the trust may be begun
without first obtaining judgment.5 It is considered as
analogous to a proceeding to reach and subject the
equities of a deceased debtor to the claims of creditors,
or to satisfy a debt from a specific equitable fund, as to
enforce a lien, in neither of which cases is a personal

'Southard v. Benner, 72 N. Y.427; Greenway v. Thomas, 14111. 372. Con-
Barton v. Hosner, 24 Hun (N. Y.) 471; tra, Anderson v. Bradford, 5 J.J.
Cadj v. Whaling, 7 Biss. 430;Cragin Marsh. (Ky.) 69 ; Scott v. McMillen, 1
v. Carmichael, 2 Dillon, 520; Piatt, As- Litt. (Ky.) 302.
signee.v. Matthews, 10 Fed. Rep. 280. 4See Turner v. Adams, 46 Mo. 95 ;

'Ballou v. Jones, 13 Hun (N. Y.) Pope v. Solomons, 36 Ga. 541 ; Taylor

631. I!m 1 see National Tradesmen's v. Branscombe, 74 la. 534, 38 N. W.

Bank r.Wetmore, 124 N. Y. 241, 20 N. Rep. 400.
E. Rep. 548. Overmire v. Ha worth, 48 Minn.

3Dodd v. Levy, 10 Mo. App. 121; 372, 51 N. W. Rep. 121.

§85 PRACTICE IN INDIANA, NORTH CAROLINA, ETC. 169

judgment required.1 A full review of the authorities
upon this question may be found in Merchants' National
Bank v. Paine,2 an important and well-considered case.
The court there maintain the right of a creditor, before
the recovery of judgment, to file a bill to reach equitable
assets where the absconding debtor had left no legal
assets liable to attachment,3 and cite in support of their
conclusion cases from Kentucky,4 Virginia,5 Indiana/'
South Carolina,'' and Missouri,8 and adopt the views of
the Supreme Court of Missouri, already quoted. Where
a judgment by personal service, or jurisdiction by attach-
ment, are both impossible, the courts of New York are
now inclining to allow a simple contract creditor to file a
creditor's bill.9

§ 85. Practice in Indiana, North Carolina, Alabama and
Texas. — In some States where the tendency to dispense
with the prerequisite of a judgment has been introduced a
novel practice as to joinder of claims prevails. Thus a claim
to cancel a conveyance of real property from a husband to
his wife, as being fraudulent against creditors, may be
united with a demand against the husband arising out of
contract.10 Then in an action against a husband and wife,

■Pendleton v. Perkins, 49 Mo. 565. 5 Peay v. Morrison's Exrs., 10 Gratt.

Compare O'Brien v. Coulter, 2 Blackf. (Va.) 149.

(Ind.) 421; Russell v. Clark, 7 Cranch 6 Kipper v. Glancey. 2 Blackf. (Ind.)

89, per Chief -Justice Marshall. See 356; O'Brien v. Coulter, 2 Blackf.

§79. (Ind.) 421.

513R. I. 592. Tarrar v. Haselden, 9 Rich. Eq.

3 Scott v. McMillen, 1 Litt. (Ky.) (S. G) 331.

302. Compare Russell v. Clark, 7 8 Pendleton v. Perkins, 49 Mo. 565.

Cranch 69, 89 ; Miller v. Davidson, 8 9Nat. Tradesmen's Bank v. Wet.

111. 518, 522; Greenway v. Thomas, 14 more, 124 N.Y. 241, 26N. E. Rep. 548;

111. 271; Anderson v. Bradford, 5 J. J. Patchen v. Rofkar, 12 App. Div. (X.

Marsh. (Ky.) 69; Meux v. Anthony, 11 Y.) 475, 42 X. Y. Supp. 35. See Le

Ark. 411. See Turner v. Adams, 46 Fevre v. Phillips, 81 Hun (N. Y.)

Mo. 95, 99; McDermutt v. Strong, 4 30 N. Y. Supp. r09.

Johns. Ch. (N. Y.) 687, 689. 10Lindley v. Cross, 31 Ind. 106.

4 Scott v. McMillen, 1 Litt. (Ky.)
302.

170 PRACTICE IN INDIANA, NORTH CAROLINA, ETC. § 85

instituted to obtain judgment against the husband for
the price of goods sold, a fraudulent conveyance from the
husband to the wife may be set aside so as to let in the
lien of the judgment when recovered.1 In North Caro-
lina the court declares it obvious that the rule exacting the
recovery of a judgment at law before proceeding inequity
grew out of the relations of the two courts under the
former system, one acting as an aid to the other, and
that it was essential to the harmony of their action in
the exercise of their separate functions in the administra-
tion of the law. Chief-Justice Smith continuing, said :
" It must of necessity cease to have any force, when the
powers of both, and the functions of each, are committed
to a single tribunal, substituted in place of both. Why
should a plaintiff be compelled to sue for and recover
[judgment on] his debt, and then to bring a new action to
enforce payment out of his debtor's property in the very
court that ordered the judgment ? Why should not full
relief be had in one action, when the same court is to be
called on to afford it in the second ? The policy of the
new practice, and one of its best features, is to furnish a
complete and final remedy for an aggrieved party in a
single court, and without needless delay or expense."2
The same rule is recognized in Texas,8 and in Alabama

1 Prank v. Kessler, 30 Ind. 8. 77 Tex. 43, 13 S. W. Rep. 963. But it

8 Bank v. Harris, 84 N. C. 210. was held in Cassaday v. Anderson, 58

Claims for judgment ujjou coupons Tex. 535, that while as between two

and for a mandamus to coerce pay- creditors if one lias already obtained

ment were joined. McLendon v. Com- his judgment and instituted proceed-

missioners of Anson, 71 N. C. 38. So ings to set the fraudulent conveyance

it was held competent to proceed in aside, lie will have the right to have

the same action against an insolvent his debl satisfied out of the property,

debtor bank and against stockholders but the bringing of a suit to set aside

upon their individual liabilities under the conveyance by a simple contract

the charter. Glenn v. Farmers" Bank, creditor gives him no priority over the

72 X. C. 626. purchaser at an execution sale of

< assaday v. Anderson, 53 Tex. 535; another creditor.
Arbuckle Bros. Coffee Co. v. Werner,

§85 PRACTICE IN INDIANA, NORTH CAROLINA, ETC. \J\

a creditor without a lien may file a bill in chancery to dis-
cover assets.1 The method of procedure indicated seems
to be an innovation. New York, the birthplace and
stronghold of the reformed procedure, clings, in the main,
tenaciously to the old practice of requiring a judgment
and execution before an appeal can be made to the equity
side of the court. Not only has the rule been rigidly
enforced in that State,, but, as is shown elsewhere, it has
been in some respects extended and strengthened.2 The
rule has been relaxed in other States, but the cases which
completely subvert or overturn it are comparatively few
The old method of procedure did not result, as the court
supposed in Bank v. Harris,3 wholly from the relation of
courts of law to courts of equity, nor is the necessity for
its observance abrogated by the amalgamation of these
jurisdictions. If the creditor is to be allowed to prove and
recover judgment upon his simple demand, and cancel
fraudulent conveyances, or reach equitable assets in the
same action, it would seem to follow that the usual inci-
dents of a creditor's suit would attach to the proceeding.
The creditor in an action for assault and battery, libel, or
slander,4 might apply for an injunction against the debtor,
or for a receiver of his property, or embarrass him by
filing a lis pendens. The time-honored rule that the
debtor's management and control of his property should
not be interfered with by injunction or otherwise, before
judgment, would be uprooted,5 and an unscrupulous
creditor, having only the faintest shadow of a claim, could
work out the debtor's financial destruction. The ancient
practice must not be regarded as technical or artificial,

1 Wooten v. Steele, 109 Ala. 565. ne}' v. Davis, 148 N. V. 356, 12 N E.

s See Estes v. Wilcox, 67 N. Y. 264 ; Rep. 661. See §§ 79, 80.

Burnett v. Gould, 27 Hun (N. Y.) 366 ; 3 84 N. C. 210.

Crippen v. Hudson, 13 N. Y. 161 ; 4 See § 90.

Adee v. Bigler, 81 N. Y. 349 ; Whit- 5 See § 52.

172

RETURN OF EXECUTION UNSATISFIED.

§86

but as a safeguard to the debtor dictated alike by reason
and necessity. If the practice is to undergo a change, as
seems likely in some States, then the joinder should be
limited to cases of liquidated demands of creditors, certain
in their character, and provisional relief should be with-
held. The union of remedies is calculated to crowd into
a single action a multitude of complicated issues concern-
ing distinct transactions, as to the debt and the facts
attending the alienation, a result always to be deprecated;
and would necessitate the presence of the alleged fraud-
ulent vendee in the action.1

§ 86. Return of execution unsatisfied.— A cloud of cases
may be cited to the general effect that, to reach personal
property or equitable assets, by bill, a creditor must first
secure the return of an execution unsatisfied 2 unless it can
be shown that the property is not susceptible to levy.3
And it is immaterial that the return of the execution was

lSee§ 181.

2 Morgan v. Bogue, 7 Neb. 429 ;
Castle v. Bader, 23 Cal. 76 ; Newman
v. Willetts, 52 111. 98 ; Brown v. Bank
of Mississippi, 31 Miss. 454 ; McElwain
v. Willis, 9 Wend. (N. Y.) 548;
Hogan v. Burnett, 37 Miss. 617 ; Yas-
ser v. Henderson, 40 Miss. 519 ; Scott
v. Wallace, 4 J. J. Marsh. (Ky.) 654 ;
Roper v. McCook, 7 Ala. 318 ; Baxter
v. Moses, 77 Me. 465; Weigtman v.
Hatch, 17 111. 286 ; Bigelow v.
Andress, 31 111. 334 ; Beach v. Bestor,
45 111. 346. In National Tube Works
Co. v. Ballou, 146 U. S. 523, 13 S. C.
Rep. 165, Mr. Justice Blatchford
said : " Where it is sought by equi-
table process to reach equitable in-
terests <il' a debtor, the bill, unless
otherwise provided by statute, causi
set forth a judgment in the juris-
diction where the suit in equity is
brought, the issuing of an execution
thereon, ami its return unsatisfied, or

must make allegations showing that
it is impossible to obtain such a judg-
ment in any court within such juris-
diction." Citing Taylor v. Bowker, 111
U. S. 110, 4 S. C. Rep. 397 : Webster v.
Clark. 25 Me. 313 ; Parish v. Lewis,
Freeman's Ch. 299 ; Brinkerhoff v.
Brown, 4 Johns. Ch. (N. Y.) 671 ; Dun-
levy v. Tallmadge, 32 N. Y. 457;
Terry v. Anderson, 95 U. S. 628 ;
Smith v. Railroad Co., 99 U. S. 398;
Hawkins v. Glenn, 131 U. S. 334, 9
S. C. Rep. 739 ; McLure v. Benini, 2
Ired. Eq. (N. Car.) 513; Famed v.
Harris, 19 Miss. 371 ; Patterson v.
Lynde, 112 111. 196; Swan Land, etc.
Co. v. Frank, 148 U. S. 612, 13 S. C.
Rep. 691. In Illinois I lie judgment-
creditor need nut wait for the return
• if execution unsatisfied. I Jill man v.
Nadelhoffer, 162 111. 625, 45 N. E.
Rep. 680.

3Snodgrass v. Andrews, 30 Miss.
472.

RETURN OF EXECUTION UNSATTSI III'.

173

made at the request of the plaintiff and within sixty days
after its issuance.1 A seeming conflict of decisions, more
or less embarrassing, must be noticed, between the
Court of Appeals of New York, in Thurber v. Blanck,-'
and the Commission of Appeals of the same State, in
Mechanics' and Traders' Bank v. Dakin.3 The Commis-

1 Forbes v. Waller, 25 N. Y. 430.

250N. Y. 80.

3 51 N. Y. 519 ; reargument de-
nied, 54 N. Y. 681. Compare Mc-
Elwaine v. Willis, 9 Wend. (N. Y.)
561 ; reviewed in Smith v. Weeks, 60
Wis. 100. See the reconciliation of
these cases stated by Maynard, J.
In People ex rel. Cauffman v. Van
Buren, 136 N. Y. 259, 32 N. E.
Rep. 775, the court says: "In
Thurber v. Blanck (50 N. Y. 80),
it was held that an attaching creditor
had no standing in court to reach
equitable assets until his remedy at
law was exhausted, nor to attack a
fraudulent transfer of the property of
his debtor until after judgment ; and
in the Mechanics' and Traders' Bank
v. Dakin (51 N. Y. 519), the Commis-
sion of Appeals held that an attaching
creditor, after the recovery of judg-
ment and the issuing of execution
may maintain an equitable action in
his own name to set aside a fraudu-
lent transfer of the property which
had been seized under the attachment.
The impression seems to have pre-
vailed that there was an irreconcilable
conflict between these two cases, and
the reporter, in a foot note in the 51
N. Y., says: 'This case, it will be per-
ceived, was argued prior to the de-
cision of the case of Thurber v.
Blanck (50 N. Y. 80). with which it
is in conflict. That case had not been
brought to the attention of the Com-
mission at the time of the decision
herein.' But we fail to discover any
real ground of antagonism between

them. In Thurber v. Blanck the
court was dealing with an attempl
on the part of an attaching creditor to
reach equitable assets, which it has
been uniformly held cannot be done
until judgment has been recovered,
execution issued and returned un-
satisfied, and an action or proceeding
in the nature of a creditor's bill insti-
tuted. The provisions of the Revised
Statutes (now g§ 1871-9 of the Code)
which authorized a judgment-cred-
itor's action imperatively required the
recovery of a judgment and the issue
and return of an execution unsatisfied
as an indispensable condition of the
creditor's right to bring the action.
In Bank v. Dakin, the attaching
creditor had, by the recovery of judg-
ment and the issue of execution, ac-
quired the right to have the attached
property applied to the satisfaction of
the execution, but in the assertion of
this right he found the way obstructed
by the interposition of a conveyance
of the property by his debtor, which
was apparently valid, but which was,
in fact, void. In such cases it has
always been held thai while the pro-
cess for the collection of the debl was
outstanding the equitable jurisdiction
of the court could be invoked to re
move the fraudulent obstruction to
the legal process and permit it to be
effectually enforced. The subsequent
decisions bearing upon the question in
tins court have all been in line with
the principles enunciated in these two
typical cases, but none of them in-
volved the point here presented of

174 RETURN OF EXECUTION UNSATISFIED. ■ § 86

sion held that when a suit had been commenced by attach-
ment, and a judgment recovered, the plaintiff, after
issuance of execution, and before its return, could main-
tain an equitable action to set aside a fraudulent assign-
ment of a bond and mortgage, to the end that it might be
applied toward the satisfaction of the judgment ; the theory
being, that, by the service of the attachment, a lien was
acquired upon the bond and mortgage, which could be
enforced after judgment, and to which the fraudulent
assignment was no impediment.1 The Court of Appeals
held, however, that an equitable action could not be
brought in a somewhat different case until the remedy at
law was first exhausted ; that is, until the execution on
the judgment had been returned unsatisfied ; that no lien
could be acquired by the attachment upon a bond and
mortgage, the legal title to which was in a third person ;
that in the case of choses in action and debts, the lien is
constructive, and cannot operate through an intermediate
or inchoate legal title ; that in such a case no debt at law
is owing- to the defendant, and there is nothing for the
attachment to operate upon, since it can only act upon
legal rights, and not upon mere equitable interests ; that
debts and choses in action are legal assets under the attach-
ment law only when the process acts directly upon the
legal title, and that when they are so situated as to
require the exercise of the equitable powers of the court

the right of an attaching creditor to ment had not issued." Judge Gray

prevent the application of the at- also says in Whitney v. Davis, 148 N.

tached property to the payment of a Y. 260, 42 N. E. Kep. 661, that Thur-

prior lieu. It must he apparent that ber v. Blanck, 50 N. Y. 80, and Me-

unless such a right exists the remedy chanics' and T. Bank v. Dakin, 51 N.

by attachment will be lost in many Y. 519, " were not in conflict with each

cases. The sheriff must sell the other, because contemplating different

property under the prior executions conditions of the property sought to

and apply the proceeds to their pay- be reached."
ment, and the plaintiff would be in 'See §81.
no better condition than if his attach-

§ 86 RETURN OF EXECUTION UNSATISFIED. 1 75

to place them in that condition they are to be regarded
as equitable assets only, and that, in such a case, to allow
the equitable action upon the issuance of an execution
and before its return, would be in direct conflict with the
rule that a creditor has no standing in court to reach
equitable assets until his remedy at law is exhausted.
The decision of the Commission of Appeals, it may be
observed, was unanimous, while that of the Court of
Appeals was rendered by a majority of the court, three
judges dissenting, and three concurring with the chief-
justice. The Commission of Appeals was a temporary
court, called into existence to relieve the overcrowded
calendar of the Court of Appeals. Its duration as a court
was limited and it has ceased to exist. The Court of
Appeals being the permanent appellate court its' decision,
if there be a real conflict, which the cases attempt to deny,
has been generally followed,1 though it must be conceded
that the relief which the Commission of Appeals attempted
to extend would, in many instances, prove highly ser-
viceable to creditors. The decision of the New York
Court of Appeals, in Thurber v. Blanck,a is not to be
taken as being in conflict with the class of cases in which
it has been held that an equitable action may be brought
after the issuance of an execution, and before its return
unsatisfied, to set aside a fraudulent transfer of goods
and chattels, or of real estate which can be levied upon
under the execution when the fraudulent impediment is
removed.3 A rule ought to be deduced from the authori-

1 Gross v. Daly, 5 Daly (N. Y.) 54:! ; 3 Gross v. Daly, 5 Daly (N. Y. 1 5 1 J :
Castle v. Lewis, 78 N. Y. 137. See McElwain v. Willis, 9 Wend. (N. V .)
Smith v. Longmire, 1 Am. lnsolv. R. 561 ; Heye v. Bolles, 2 Dalj (N. Y.)
426; Anthony v. Wood, 96 N. Y. 185, 231; McCollough v. Colby, 5 Bosw
citing this section. (N. Y.) 477 ; North America Fire I us.

2 50 N. Y. 80. See People <:r rel Co. v. Graham, 5 Sandf. (N. Y> 300 ;
Cauffman v. Van Buren, 136 N. Y. Falconer v. Freeman, 4 Sandf . Ch. (N.
252, 32 N. E. Rep. 775. Y.) 565; Greenleaf v. Mumford, 30

176

REALTY AND PERSONALTY

§87

ties that no return of an execution need be shown where
the creditor is seeking equitable assets solely.

§ 87. Distinction between realty and personalty as to issu-
ance of execution. — The predicate of the jurisdiction as
affecting realty is that the creditor has a lien,1 and of
course if the lien has expired the creditor's action will fail.2
A judgment is usually a lien upon real property by statute,
and hence authority can be found for the proposition
that a covinous conveyance of real property can be
attacked by a judgment-creditor without the issuance,
levy, or return of an execution.3 Jurisdiction is invoked
in such cases in aid of the remedy at law. It may be
observed that, as a creditor must usually exhaust the
personal property of the judgment-debtor before having
recourse to the realty, it is generally essential to show, in
proceedings to reach the latter, that an execution has
been issued.4 There is, however, an absence of harmony
in the authorities. The question came before the New

How. Pr. (N. Y.) 30. See Gibbons v.
Pemberton, 101 Mich. 397, 59 N. W.
Rep. 663. Although in some States
the distinction between suits to re-
move obstructions and suits to reach
equitable assets is lost sight of, and it
is required in both cases that execu-
tion should issue, the correct rule is
thai it is only required in the first
class of cases. Wisconsin Granite
Co. v. Gerrity, 144 111. 77, 33 N. E. Rep.
31 ; Fecheimer v. Hollander, 6 Mackey
l I ). C.), 512.

1 Partee v. Mathews, 53 Miss. 146 :
Pulliam v. Taylor, 50 .Miss. 551-554 ;
Carlisle v. Tindall, 49 Mis.. 229-232.
Evans v. Kill, is linn (N. Y.) 464.

"Cornell v. Radway, 22 Wis. 260 ;
Mohawk Bank v. Atwater, 2 Paige
(N. Y.) 58 : Clarkson v. De Peyster, 3
Paige (N. Y.)320; Shaw v. Dwight,

27 N. Y. 249 (contra, Adsit v. Butler,
87 N. Y. 5S7) ; Brinkerhoff v. Brown,
4 Johns. Ch. (N. Y.) 671 ; Royer
Wheel Co. v. Fielding, 61 How. Pr.
(N. Y.) 437 ; McCalmot v. Lawrence,
1 Blatcli. 232 ; Newman v. Willetts,
52 111. 98; Dillman v. Nadelhoffer,
162 111. 625, 43 N. E. Rep. 378 ; Vasser
v. Henderson, 40 Miss. 519; Baldwin
v. Ryan, 3 T. & C. (N. Y.) 253 ; Bin-
nie v. Walker, 25 111. App. 82 : Mult-
nomah Sheet Ry. Co. v. Harris, 13
Ore. 198, 9 Pac. Rep. 402; Payne v.
Sheldon, 63 Barb. (N. Y.) 169; Weigt-
inan v. Batch, 17 III. 281 ; Dargan v.
Waring, 11 Ala. 993. See Buswell
v. Lincks, 8 Daly (N. Y.) 518.

1 North Am. Fire Ins. ( !o. v. Gra-
ham, 5 Saudf. (N. Y.) 197 : reviewed
in McCollough v. Colby, 5 Bosw. (N.
Y.) 477.

87

REALTY AND PERSONALTY.

177

York Court of Appeals,1 and the result of the decision is
briefly to the effect that, in an action to set aside a fraud-
ulent conveyance of realty, the complaint must allege the
issuance of an execution and its return unsatisfied, or the
action must be brought in aid of an execution then out-
standing. The authorities in that State, on the general
proposition that all available legal remedies must be
pursued before resort to equity,2 are reviewed, and
Shaw v. Dwight3 distinguished. This decision being an
important utterance of the court of last resort, it follows
that in New York State, at least, execution must issue
upon a judgment before a creditor's action, or a suit to
annul a fraudulent conveyance of realty can be supported.
This places real property and equitable interests on
substantially the same basis, as regards the status of an
attacking creditor, and in some measure restricts his
rights.4

1 Adsit v. Butler, 87 N. Y. 586. See
Spelman v. Freedman, 130 N. Y. 425,
29 N. E. Rep. 705 ; Weaver v. Havi-
land, 142 N. Y. 537, 37 N. E. Rep.
641 ; Gardner v. Lansing, 28 Hun (N.
Y.) 415; Importers' & Tr. Nat. Bank
v. Quackenbush, 143 N. Y. 571, 38 N.
E. Rep. 728.

2 Ocean Nat. Bank v. Olcott, 40 N.
Y. 12 ; Geery v. Geery, 63 N. Y 252 ;
Estes v. Wilcox, 67 N. Y. 264 ; Allyn
v. Thurston, 53 N. Y. 622 ; McCartney
v. Bostwiok. 32 N. Y. 62; Fox. v.
Moyer, 54 N. Y. 125 ; Crippen v. Hud-
son, 13 N. Y. 161.

3 27 N. Y. 244.

4 See Verner v. Downs, 13 S. C.
449 ; Hyde v. Chapman, 33 Wis. 399 ;
Dana v. Haskell, 41 Me. 25. In the
Holladay Case, 27 Fed. Rep. 845, the
court say : " The issue of an execu-
tion, and the return of nulla bona
thereon, is considered sufficient evi-
dence of the insolvency of the judg-

12

ment-debtor, and that the judgment-
creditor is remediless at law. But it
is not the only evidence of that fact,
nor, in my judgment, always the
best. The authorities are in appar-
ent conflict on this question. Wait
Fraud. Conv. § 68; Bump, Fraud.
Conv. 518, 527. But where the diver-
sity is not the result of local legisla-
tion, I think the apparent conflict
arises from confounding creditors'
bills to subject personal propery to the
satisfaction of a judgment with an
ordinary bill in equity to set aside or
postpone a conveyance of real prop-
erty on which the plaintiff's judgment
is, as against his debtor, a lien without
an execution. In the latter case the
right to maintain the suit is based on
the unsatisfied judgment, the fraudu-
lent conveyance, and the insolvency of
the debtor ; which latter fact may be
proved by any competent evidence, as
well as a return of nulla bona <>n an

178 RAISING THE OBJECTION. § 88

To obtain an equitable lien upon property not the sub-
ject of levy and sale under execution, the creditor must, of
course, have exhausted his remedy under his judgment or
decree by the return of an execution unsatisfied.1 The
return of the execution, even as to personalty capable of
being subjected to a lien, is not always essential. In Bus-
well v. Lincks,'~ Chief-Justice Daly said : "The equitable
aid of the court to set aside a fraudulent conveyance is
given where the one invoking it has a lien upon the prop-
erty which is obstructed by the conveyance. In the case
of personal property, a judgment-creditor acquires, by the
issuing of an execution, a lien upon the personal property
of the debtor as against a fraudulent conveyance, and the
aid of the court is given in that case to remove the
obstruction in the way of the execution, which cannot be
done if the execution has been returned, for the lein
under it is them at an end."3

§ 88. Raising the objection.— The objection that the cred-
itor's remedy is at law, or that his bill is without equity, or
his lien is suspended, may be raised at the hearing,4 though
it is, of course, safer to bring it up by demurrer, if apparent
on the face of the pleading, or by answer, if the defect is
not so shown. The court may itself raise the objection.5

execution." "Wisconsin Granite Com- 3 Citing Forbes v. Logan, 4 Bosw.

panyv. Gerrity. 144 111.77, 33 N. E. (N. Y.) 475; Watrous v. Lathrop, 4

Rep. 31. As to proof of insolvency, Sandf. (N. Y.) 700.

see Hodges v. Silver Hill Mining Co., 4 Meux v. Anthony, 11 Ark. 423;

9 Ore. 200 ; Terry v. Tubman, 92 U. Tappan v. Evans, 11 N. H. 311 ; Brown

S. 156; Case v. Beauregard, 101 U. v. Bank of Mississippi, 31 Miss. 454.

s. 688; McCalmont v. Lawrence, 1 5 Oelrichs v. Spain, 15 Wall. 211.

Blatchf. 232. " The doctrine of these and similar

1 Clarkson v. De Peyster, 3 Paige cases is, that the court, for its own

(N. Y.) 320; Shaw v. Dwight, 27 N. protection, may prevent matters

Y. 249; Brinkerhoff v. Brown, 4 Johns, purely cognizable at law from be-

Ch. (N. V.) <;?<)•, Adsil v. Butler, 87 ing drawn into chancery, at the

N. Y. 587; Fox v. Mover, 54 N. Y. 128. pleasure of the parties interested ; but

• 8 Daly (N.XY.) 518. it by no means follows, where the sub-

§88 RAISING THE OBJECTION. I 79

In concluding this chapter we may state that, as a general
rule, under both the old Chancery system and the reformed
procedure in New York, the bill should generally show
affirmatively that an honest attempt has been made to col-
lect the debt by the issuing of an execution against the
debtor and its return unsatisfied, and, where there are sev-
eral defendants jointly liable, that such effort has been made
and the remedy exhausted against all the judgment-
debtors before jurisdiction will be entertained in chan-
cery.1 Where the sole purpose of the bill is to subject
real property fraudulently aliened to the lien of a judg-
ment the exaction that execution should have been
returned is not uniformly enforced.

ject-matter belongs to the class over altogether too late even though, if

which a court of equity has juris- taken in limine, it might have been

diction, and the objection that the worthy of attention." Reynes v.

complainant has an adequate remedy Dumont, 130 U. S. 354, 395, 9 S. C.

at law is not made until the hearing in Rep. 486.

the appellate tribunal, that the latter J Voorhees v. Howard, 4 Keyes (N.

can exercise no discretion in the dis- Y.) 383. See Child v. Brace, 4 Paige

position of such objection. Under the (N. Y.) 309 ; Reed v. Wheaton, 7 Paige

circumstances of ^this^case, it comes (N. Y.) 663. .

CHAPTER V.

EXISTING CREDITORS.

§89. Classes of creditors — existing
and subsequent.

90. Contingent creditors.

91. Who are not creditors.

92. Transfer of right to sue.

§93

Voluntary alienations as to exist-
ing creditors.

94. Such conveyances only presump-

tively fraudulent.

95. Evidence of solvency.

" The complainant, not showing that he was at the time a creditor, cannot complain. Even
a voluntary conveyance is good as against subsequent creditors, unless executed as a cover for
future schemes of fraud."— Mr. Justice Field in Horbach v. Hill, 112 TJ. S. 149.

§89. Classes of creditors — existing and subsequent.— As
appertaining to the subject-matter of this treatise, credit-
ors may be said to resolve themselves into two great
classes or subdivisions, commonly named existing credit-
ors and subsequent creditors. Existing creditors are
those whose claims or demands against the debtor were
in being, or in existence, in some form at the date of the
alleged voluntary1 or fraudulent alienation.2 Subse-
quent creditors are those to whom the insolvent became
indebted at a time subsequent to the alienation which is

1 See Thomson v. Crane, 73 Fed.
Eep. 327; Horbach v. Hill, 112 U. S.
144, 149, 5 S. C. Rep. 81 ; Trezavent
v. Terrell, 96 Tenn. 528.

2 See Horbach v. Hill, 112 U. S. 149,
5 S. C. Rep. 81 ; Schreyerv. Scott, 134
U. S. 410, 10 S. C. Rep. 579. A person
who becomes a creditor after the con-
veyance, but before possession under it
is changed or notice given, is an exist-
ing creditor. Goll & F. Co. v. Mil-
ler, 87 la. 431, 54 N. W. Rep. 443;
Fox v. Edwards, 38 la. 215. Con-
cerning what evidence will be held
not sufficient to show that the

debt was in existence at the time
of the conveyance, see Pidcock v.Voor-
hies, 84 la. 705, 42 N. W. Rep. 646, 49
Id. 1038. It was decided in Minnesota
that a judgment-creditor who brings
an action to set aside a conveyance
made prior to his judgment is bound
to show affirmatively that the debt
for which it was rendered existed at
the time the conveyance was made.
Bloom v. Moy, 43 Minn. 397, 45 N. W.
Rep. 715. As to a debt contracted
partly before and partly after the con-
veyance, see Henderson v. Hender-
son, 133 Pa. St. 399, 19 Atl. Rep. 424.

§ go CONTINGENT CREDITORS. l8l

the subject of inquiry. The rights of these two classes of
creditors are manifestly and necessarily different ; x the
proofs in each case vary, and the measure of relief
extended by the courts in particular instances is largely
dependent upon the question as to which of these two
classes or subdivisions the complaining creditor belongs.
"The difference," says Chancellor Williamson, "between
existing and subsequent debts, in reference to voluntary
conveyances, is this — as to the former the fraud is an
inference of law, but as to the latter there must be fraud
in fact."2 This latter distinction, as we shall presently see,
is not universally applied. Manifestly if the debtor has
made any secret reservation for his own benefit the aliena-
tion may be overturned by either class of creditors.3
A party, we may observe, loses no rights by a change of his
securities, and the holder of a new note given in exchange
for an old one may attack a conveyance which is fraudu-
lent as to the old note.4

§90. Contingent creditors. — In a multitude of cases it
has been repeatedly adjudged that a party bound by a
contract upon which he may become liable for the pay-
ment of money, although his liability be contingent, is a
debtor within the. meaning of the statute avoiding all
grants made to hinder or delay creditors.5 A contin-

1 See Gordon v. Reynolds, 114 111. Gardner v. Hiker, 25 la. 348 ; Lowry
123, 28 N. E. Rep. 455 ; Jones v. King, v. Fisher, 2 Bush (Ky.) 70 ; Treza-
86 111. 225 ; Severs v. Dodson, 53 N. J. venfc v. Terrell, 96 Tenn. 530, :j:5 S. W.
Eq. 633, 34 Atl. Rep. 7. Rep. 109 ; Miller v. Hilton, 8S .Mr. 429.

2 Cook v. Johnson, 12 N. J. Eq. 54. 34 Atl. Rep. 266.

3 See Gordon v. Reynolds, 114 111. 5 Young v. Heerrnans, 66 N. Y. 384 ;
133, 28 N. E. Rep. 455 ; Neuberger v. Fearn v. Ward, 65 Ala. 33 ; Van
Keim, 134 N. Y. 38, 31 N. E. Rep. 268; Wyck v. Seward, 18 Wend. (N. Y.)
Schreyerv. Scott, 134 U. S. 411, 10 S. 375, 383, and cases cited; Shontz v.
C. Rep. 579; Clement v. Cozart, 109 Brown, 27 Pa. St. 123; Bibb v. Free-
N. C 180, 13 S. E. Rep. 862. man, 59 Ala. 612; Cook v. Johnson,

"Thomson v. Hester, 55 Miss. 656. 12 N. J. Eq. 52; Hamet v. Dundass,

See Cansler v. Sallis, 54 Miss. 446 ; 4 Pa. St. 178 ; Jenkins v. Lockard, 66

182

CONTINGENT CREDITORS.

90

uing liability to pay rent under a lease constitutes the
relationship of debtor and creditor.1 It follows that the
person to whom the debtor is bound is a creditor.2 A
wife is a creditor under 13 Eliz. c. 5, in a case where her
husband covenanted with trustees to pay her a sum of
money after his death.3 A surety is a creditor from the
time the obligation is entered into,4 or the bond signed ;5
a person liable contingently as an accommodation in-
dorser is a creditor before the dishonor of the note ; 8 and a
warrantor, if at the date of the deed a paramount title
was outstanding, is, from the time of the conveyance, a
debtor to the warrantee.7 A remainderman is a cred-
itor against whose claim a voluntary conveyance made
during the lifetime of the life tenant will be set aside.8
A municipal corporation is, upon the issuance to the
proper officer of a tax warrant, a creditor within the
statute.9 The date when the agreement or obligation

Ala. 381 ; Benson v. Benson, 70 Md.
253 ; Yardley v. Torr, 67 Fed. Rep.
857 ; Petree v. Brotherton, 133 Ind.
6!)."). 32 N. E. Rep. 300.

1 O'Brien v. Whigani, 9 App. Div.
(N. Y.) 113.

8 See Jackson v. Seward, 5 Cow.
(N. Y.) 67; Jackson v. Myers, 18
Johns. (N. Y.) 425.

a Rider v. Kidder, 10 Ves. 360.

4 Pennington v. Seel, 49 Miss. 525 ;
Howell v. Thompson, 95 Tenn. 396,
32 S. W. Rep. 309 ; Matter of Rea, 82
Iowa 231, 48 N. W. Rep. 78; Reel v.
Livingston, 34 Fla. 377, 16 So. Rep.
284 ; Humphrey v. Spencer, 36 W. Va.
11, 14 S. E. Rep. 410 ; cf. In re Reyn-
olds, 20 Fed. Cases, 615 ; Barnes v.
Summons, 128 Ind. 596, 27 N. E. Rep.
747. So held in the case of a surety
on a guardian's bond. Benson v.
Benson, 70 Md. 253.

'• Yeend v. Weeks, 104 Ala. 330, 16
So. Rep. 165.

6 Harnet v. Dundass, 4 Pa. St. 178.

1 Gannard v. Eslava, 20 Ala. 740 ;
Pennington v. Seal, 49 Miss. 525. It
is said in Severs v. Dodson, 53 N. J.
Eq. 637, 34 Atl. Rep. 7, that none of
the cases decide "that a contingent
liability will, per se, raise an irrefu-
table inference of fraud so as to in-
validate a conveyance made during
the continuance of such a condition
of affairs."

8 Soden v. Soden, 34 N. J. Eq. 115.

9 Stimson v. Wrigley, 86 N. Y. 332.
A judgment for costs accrues at the
time the judgment is rendered, and
not when the action is commenced,
as regards the question of whether
the claimant is an existing or subse-
quent creditor. Inhabitants of Pel-
ham v. Aldrich, 8 Cray (Mass.) 515 ;
Ogden v. Prentice, 33 Barb. (N. Y.)
160; Stevens v. Works, 81 Ind. 449.

§ 9°

CONTINGENT CREDITORS.

I83

came into existence governs1 in determining the com-
plaining or attacking creditor's rights. As elsewhere
shown, a person whose claim arises from a tort,~ such as
libel or slander,3 is a creditor. The date the tort or in-
jury was committed governs in determining the creditor's
status, where the conveyance was made in pursuance of a
fraudulent design to defeat the judgment which might
be recovered upon it.4 In such case the transfer will be
set aside, if actual fraud is established. It is not enough
that the conveyance is constructively fraudulent.5 So a
transfer to defeat a claim for deceit,6 for usury penal-
ties,7 breach of promise to marry,8 seduction,9 bastardy,10
and assault and battery,11 may be annulled. And a wife may
attack alienations intended to defeat claims for alimony.12

1 Van Wyck v. Seward, 18 Wend.
(N. Y.) 375 ; Seward v. Jackson, 8
Co wen (N. Y.) 406. See Wooldridge
v. Gage, 68 111. 158 ; Stone v. Myers,
9 Minn. 309.

2 Post v. Stiger, 29 N. J. Eq. 558 ;
Scott v. Hartman, 26 N. J. Eq. 90 ;
Pendleton v. Hughes, 65 Barb. (N. Y.)
136; Barling v. Bishopp, 29 Beav. 417;
Shean v. Shay, 42 Ind. 375 ; Bongard
v. Block, 81 111. 186 ; Weir v. Day, 57
Iowa 87; Jackson v. Myers, 18 Johns.
(N. Y.) 425 ; Shontz \. Brown, 27 Pa.
St. 131 ; Harris v. Harris, 23 Gratt.
(Va.) 737 ; Tobie & Clark Mfg. Co. v.
Waldron, 75 Me. 472 ; Hepworth v.
Union Ferry Co., 62 Hun (N. Y.) 257,
16 N. Y. Supp. 692 ; Boid v. Dean, 48
N. J. Eq. 203, 21 Atl. Rep. 618. See

1 § 123.

3 Cooke v. Cooke, 43 Md. 522 ; Hall
v. Sands, 52 Me. 355. But see Fowler
v. Frisbie, 3 Conn. 320.

4 Miller v. Dayton, 47 Iowa 312;
Evans v. Lewis, 30 Ohio St. 11 ; Ford
v. Johnston, 7 Hun (N. Y.) 563 ; Hep-
worth v. Union Ferry Co. ,62 Hun (N.
Y.)257, 16 N. Y. Supp. 692.

6 Fuller v. Brown, 76 Hun (N. Y.)
559, 28 N. Y. Supp. 189. See Sanders

v. Logue, 88 Tenn. 355, 12 S. W. Rep,
722.

6 Miner v. Warner, 2 Grant (Pa.)
448.

I Heath v. Page, 63 Pa. St. 108.

8 Hoffman v. Junk, 51 Wis. 613, 8
N. W. Rep. 493 ; Thompson v. Rob-
inson, 89 Me. 56; McVeigh v. Rite-
nour, 40 Ohio St. 107.

9 Hunsinger v. Hofer, 110 Ind. 390,
11 N. E. Rep. 463.

10 Schuster v. Stout, 30 Kans. 530,
2 Pac. Rep. 642. Leonard v. Bolton,
153 Mass. 428, 26 N. E. Rep. 1118.

II Martin v. Walker, 12 Hun (N. Y.)
46.

12 Morrison v. Morrison, 49 N. H. 69;
Bouslough v. Bouslough, 68 Pa. St.
495; Turner v. Turner, 44 Ala. 437;
Dugan v. Trisler, 69 Ind. 553 ; Bailey
v. Bailey, 61 Me. 361 ; Livermore \ .
Boutelle, 11 Gray (Mass.) 217; ('has.'
v. Chase, 105 Mass. 385: Hinds v.
Hinds, 80 Ala. 225, 227, citing this
section; Foster v. Foster, 56 Vt. 546;
Stuart v. Stuart, 123 Mass. 370; Bur-
rows v. Purple, 107 Mass. 435 : Picket
v. Garrison, 76 Iowa 347, II X. W.
Rep. 38; Boog v. Boog, 78 Iowa 534,
43 N. W. Rep. 515.

184 WHO ARE NOT CREDITORS. §91

In Pendleton v. Hughes,1 the defendants, at the
date of the fraudulent alienation, had in their possession
a 5-20 U. S. bond belonging to plaintiff which they after-
ward converted. The court held that plaintiff was equi-
tably entitled to protection against the fraudulent trans-
fer to the same extent as though the defendants had been
indebted to her in that amount at the time of the fraudu-
lent alienation.

§ 91. Who are not creditors. — In Baker v. Gilman,2 the
court, speaking by Johnson, J., said that the sole object
of the statute " in declaring conveyances void, is to pro-
tect, and prevent the defeat of, lawful debts, claims or
demands, and not those which are unlawful, or trumped
up, and which have no foundation in law or justice, and
the verity of which is never established by any judgment
or by the assent of the person against whom they are
made. As against claims and demands of the latter class,
the statute does not forbid conveyances or assignments,
nor declare them void." So a party who is not a bona
fide creditor is not entitled to equitable relief on a cred-
itor's bill.3 A pretended creditor whose claim is illegal,4
or void as against public policy,5 or barred by statute at
law,8 or who is not concerned in the transfer,7 or is estop-
ped by his knowledge and acquiescence,8 cannot support

1 65 Barb. (N. Y.) 136. 8Scholey v. Worcester, 4 Hun (N.

- 52 Barb. (N. Y.) 37. Y.) 302. See Olliver v. King, 8 De G.

3 Townsend v. Tuttle, 28 N. J. Eq. M. & G. 110 ; Phillips v. Wooster, 36
449. See §73. N. Y. 412. See § 402. Greene v.

4 Fuller v.Brown, 30 N. H. 861; Sprague Mfg. Co., 52 Conn. 330.'
Alexander v. Gould, 1 Mass. 165. See In Beaupie v. Noyes, 138 U. S. 401,
Walker v. Lovell, 28 N. H. 138; Tay- the court says : "That ground is thai
lor v. Van Deusen, 3 Gray Mass.) 498. there was evidence tending to show

I'.ruggerman v. Hocrr, 7 Minn, that t lie defendants acquiesced in and

337. assented to all that was done, and

•Edwardsv. M'Gee, 31 Mi-s 143. waived any irregularity in the mode

7 Morrison v. Atwell. <j Bosw. (N. in which the assignee conducted the

F.)508; Powers v. Graydon, 10 Bosw. business; and that the question

(N. Y. j 630. whether the defendants so acquiesced

§§92,93 TRANSFER OF RIGHT TO SUE. 185

a creditor's action. A court of equity can only lend its
aid to enforce a judgment which could be enforced at
law, and the creditor must have clean hands.

§ 92. Transfer of right to sue.— It may be here observed
that the right to avoid a fraudulent conveyance is not
personal to the then existing creditor ; his successors
and assigns may enforce the right. Thus the subsequent
purchaser of a pre-existing note may attack a transfer.1
Campbell, J., says :2 " No change in the ownership or the
form of the debt affects the right incident to the debt
to attack a conveyance fraudulent as to it." Davis, J.,
observed : " The conveyance was void as against the
person intended to be defrauded, and his heirs, suc-
cessors, executors, administrators, and assigns, if their
actions, suits, debts, etc., were liable to be delayed or
hindered thereby.3" In Massachusetts it has been held
that a fraudulent conveyance may be avoided by an
assignee in insolvency, but not by a transferee of such
assignee, unless the assignee has first distinctly mani-
fested his election to avoid the transfer.4

§ 93- Voluntary alienations as to existing creditors. — At
first blush it would seem apparent that every voluntary
alienation of a debtor's estate, aside from, or ignoring
the question of intent, ought to be avoided as to existing
creditors. The debtor's property is sometimes character-

and assented with knowledge of all by agreement with other creditors,

the facts, and thereby waived their designed to prevent a sacrifice of the

right to treat the assignment as assigned property, by a disposal of it

fraudulent, was properly submitted to in the ordinary way, by the assignees."

the jury." See Eustis v. Bolles, 150 'Warren v. Williams, 52 Me. 349.

U. fl. 368 ; Clay v. Smith, 3 Pet. 411. 2 Cook v. Ligon, 54 M iss. 655.

In Rapalee v. Stewart, 27 N. Y. 314, 3 Warren v. Williams, 52 Me. 849.

the court says : "Here is not only a 4Morgan v. Abbott, 148 Mass. 507,

waiver of any right to attack the as- 20 N. E. Rep. 165. Sec Freeland v.

signment for fraud, but a ratification Freeland, 102 Mass. 475 ; Tuite v

of it, by coming in and taking action, Stevens, 98 Mass. 305.

1 86 VOLUNTARY ALIENATIONS. § 93

ized as the fund or evidence of means or stability upon
which the creditor relied in extending the credit, and it is
urged that, after the creditor's claim accrued, this fund
should not be depleted and allowed to pass into the hands
of persons who did not pay value for it to the detriment of
the creditor whose claim remains unpaid. Exactly how
to accomplish substantial justice in such cases to all
parties, and yet to give full scope and effect to the proper
presumptions and rules of law and evidence is not easily
determined. Shall such voluntary conveyance be declared
prima facie or absolutely void, or must the creditor
assume the burden of showing something more than that
the conveyance was voluntary?

Some of the confusion and uncertainty which has been
introduced into this subject in this country may be traced
to the discussion over the celebrated decision of Chan-
cellor Kent in the widely known case of Reade v. Liv-
ingston,1 in which it was held that a voluntary marriage
settlement, after marriage, was of itself void as to existing
creditors. This case has been declared by an essayist2
to be " the grandest monument of legal acumen and wide
and varied erudition which New York has ever produced,"
and while it is conceded that the case was repudiated by
the courts of the very State which gave it birth,3 it was
asserted that " unless indications are wholly delusive the
learned Chancellor was not more than a century in

'3 Johns. Ch. (N. -Y.) 481, 8 Am. where shown, the question of fraud is

Dec. 520 ; Lloyd v. Fulton, 91 U. S. made one of fact, and no conveyance

479, and cases cited. See Haston v. is considered fraudulent as against

Castner, 31 X. J. Eq. G97. creditors or purchasers solely on the

- Fraudulent Conveyances to Bona ground that it was not founded upon

Fide Purchasers, etc., by John Key- a valuable consideration. See Dygert

uold-, Esq., cited, supra. v. Bemerschnider, 32 N. Y. 636 ; Kain

3 Seward v. Jackson, 8 Cow. (N. Y.) v. Larkin, 131 N. Y. 300, 30 N. E.

406. By statue in New York, as else- Rep. 105.

§ 93 VOLUNTARY ALIENATIONS. 1 87

advance of his age." ' The English Court of Chancery
in Freeman v. Pope,2 substantially acknowledged the
doctrine of this case and gave the following emphatic and
extreme illustration : If at the time of a voluntary settle-
ment, the settler had ,£100,000, and put £100 in the set-
tlement, and a creditor for say ^10, happened to be
unpaid in consequence of the settler losing his money in
the interval, that would be quite sufficient to set aside the
voluntary settlement;" and the doctrine of the case is
unreservedly followed in many American cases.3 Salmon
v. Bennett,4 a leading early case created an exception to
the rule set forth in Reade v. Livingston, and tends to
uphold voluntary conveyances to relatives as distin-
guished from strangers, where actual fraud is not found.5
In New York the Revised Statutes expressly declare that
no conveyance shall be held fraudulent solely upon the
ground that it was not founded on a valuable consider-
ation. In that State it is declared that the burden to
prove that the deed left the grantor insolvent and with-
out property to pay his liabilities, rests upon the plain-
tiff.6 In England it is provided by a recent statute, 56

1 See Doe d. Davis v. McKinney, 5 Emerson v. Bemis, 69 111. 540 ; Annul

Ala. 719 ; Foote v. Cobb, 18 Ala. 585
Gannard v. Eslava, 20 Ala. 732
Spencer v. Godwin, 30 Ala. 355
Crawford v. Kirksey, 55 Ala. 282

v. Annin, 24 N. J. Eq. 184; Richard-
son v. Rhodus, 14 Rich. Law (S. C.)
96 ; Clement v. Cozart, 109 N. C. 1 73,
13 S. E. Rep. 862 ; Jackson v. Lewis,

Early v. Owens, 68 Ala. 171 ; Cook v. 34 S. C. 1, 12 S. E. Rep. 560 ; Loehr v.

Johnson, 12 N. J. Eq. 51 ; Smith Murphy, 45 Mo. App. 519 ; Gardner v.

v. Vreeland, 16 N. J. Eq. 198 ; Kuhl Kleihke, 46 N. J. Eq. 90, 18 Atl. Rep.

v. Martin, 26 N. J. Eq. 60 ; Haston v. 457.

Castner, 31 N. J. Eq. 697 ; City Na- 41 Conn. 525.

tional Bank v. Hamilton, 34 N. J. Eq. 5See§242. Foster v. Foster, 56

158 ; Aber v. Brant, 36 N. J. Eq. 116 ; Vt. 548 ; Lloyd v. Fulton, 91 V. S.

Fellows v. Smith, 40 Mich. 689 ; Mat- 479 ; Babcock v. Eckler, 24 N. Y. 623 ;

son v. Melchor, 42 Mich. 477. Gale v. Williamson, 8 M. & W. 405.

2L. R. 9Eq. at p. 211. 6 Kain v. Larkin, 131 N. Y. 300, 30

3 See Crawford v. Kirksey, 55 Ala. N. E. Rep. 105 ; cf . Fuller v. Brown,

282 ; Spencer v. Godwin, 30 Ala. 355 ; 76 Hun (N. Y.) 557, 28 N. Y. Supp.

Hanson v. Buckner, 4 Dana (Ky.)251 ; 189.

1 88 CONVEYANCES PRESUMPTIVELY FRAUDULENT. §94

and 57 Vict. ch. 21, that a voluntary conveyance, if made in
good faith, shall not be avoided under the statute of
Elizabeth. Thus do the principles of Twyne's case,1 van-
ish from view. The burden imposed upon the creditor of
being forced to show facts tending to establish fraud in
addition, so to speak, to proof that the conveyance was
voluntary, certainly creates a feeling of unrest in the
courts, and in Smith v. Reid2 the opinion sets forth the
familiar rule that a voluntary conveyance by one indebted
is presumptively fraudulent, while in the dissenting opin-
ion, Kain v. Larkin,8 is referred to as establishing that
mere proof of the voluntary character of the conveyance
will not make out the creditor's case.

§ 94. Such conveyances only presumptively fraudulent. —
If the majority rule is to be applied in determining this
conflict, or the cases are to be counted and not weighed,
then it must be conceded that a voluntary alienation by a
person who happens to be indebted at the time, is only
prima facie fraudulent.4 In Smith v. Vodges,5 Swayne, J.,
said : " In order to defeat a settlement made by a hus-
band upon his wife, it must be intended to defraud existing
creditors, or creditors whose rights are expected shortly

1 See § 22. Warner v. Dove, 83 Md. 579 ; Babcock

2 134 N. Y. 575, 31 N. E. Rep. 1082. v. Eckler, 24 N. Y. 623 ; Greenfield's

3 131 N. Y. 300, 30 N. E. Rep. 105. Estate, 14 Pa. St. 489 ; Clark v. De-
1 See note to Jenkins v. Clement, 14 pew, 25 Pa. St. 509; Pomeroy v

Am Dec 705 : 1 'once v. Croan, 51 Bailey, 43 N. H. 118 ; Dewey v. Long,

In<l. 336 : Gwyer v. Figgins, 37 Iowa 25 Yt. 564 ; Lloyd v. Fulton, 91 U. S.

517; Wilson v. Kohlheiru, 40 Miss. 485; Hoarie v. Price, 31 Wis. 82;

346; Bank of U.S. v. Housman, 6 Blake v, Boisjoli, 51 Minn. 296, 53 N.

Paige (N. Y.) 526; Eolden v. Burn- W. Rep. 037; Emerson v. Opp. 139

ham, 63 X. Y. 71 ; Eigleberger v. Ind. 27, 38 N. E. Rep. 330. The

Kibler, 1 Hill's Ch. (S. C.) 113, 26 voluntary donee " is entitled only to

Am. Dec. 192: Heiatt v. Barnes, 5 that which his donor could honestly

Itana (Ky.)220; Koater v. Hiller, 4 give." Adams' Equity, p. 149. See

Bradw. (111.) 21 ; Fellows v. Smith, Green v. Givan, 33 N. Y. 343.
10 Mich. 691 ; Grant v. Ward. G4 Me. 592 U. S. 183; Schreyer v. Scott,

239 ; French v. Holmes, 07 Me. 190 ; 134 U. S. 411, 10 S. C. Rep. 579.

§95 EVIDENCE OF SOLVENCY. 1 89

to supervene, or creditors whose rights may and do so super-
vene ; the settler purposing to throw the hazards of busi-
ness in which he is about to engage upon others, instead
of honestly holding his means subject to the chance of
those adverse results to which all business enterprises are
liable."1 " The sentiment of these cases," says Mr. Free-
man,2 is well expressed in Lerow v. Wilmarth,3 by Chief-
Justice Bigelow : 'We do not wish to be understood as
giving our sanction to the doctrine that a voluntary con-
veyance by a father for the benefit of his child is per se
fraudulent as to existing creditors, although shown not to
have been fraudulent in fact, and is liable to be set aside,
because the law conclusively presumes it to have been
fraudulent, and shuts out all evidence to repel such pre-
sumption. The better doctrine seems to us to be that
there is, as applicable to voluntary conveyances made on
a meritorious consideration, as of blood and affection, no
absolute presumption of fraud which entirely disregards
the intent and purpose of the conveyance, if the grantor
happened to be indebted at the time it was made, but
that such a conveyance under such circumstances affords
only prima facie or presumptive evidence of fraud which
may be rebutted and controlled.' " 4

§95. Evidence of solvency.— The Supreme Court of
Maine regard it as established law that mere indebted-
ness is not sufficient to render a voluntary conveyance
void. Consequently it was said that a man, though

'Citing Sexton v. Wheaton, 8 11 Wheat. 199 ; Verplani v. Sterry,

Wheat. 229 : Mullen v. Wilson, 44 Pa. 12 Johns. (N. Y.) 536, 559 . Seward v.

St. 413 ; Stileman v. Ashdown, 2 Atk. Jackson, 8 Cow. (N. Y.) 40f> ; I >unlap

481. v. Hawkins, 59 N. Y. 846 ; Walter v.

2 See note to Jenkins v. Clement, Lane, 1 MaeAr. (D. C.) 284 ; Parish v.

14 Am. Dec. 705. Murphree, 13 How. 92; Moritz \.

39 Allen (Mass.) 386. Hoffman, 35 111. 553; Koster v. Bil-

4 See Hinde's Lessee v. Longworth, ler. 4 111. App. 24.

193 EVIDENCE OF SOLVENCY. § 95

indebted, may make a valid gift.1 Mere insolvency will
not, of course, render a deed fraudulent provided it was
made with the sole view of paying a debt due to the
grantee.2 As a general rule if the donor is solvent, and
has, after making the gift, sufficient assets remaining to
satisfy his creditors, the gift will be upheld.3 Subsequent
insolvency will not generally render it invalid.4 In such
cases the creditors' trust fund, so called, cannot be said
to have been depleted by the alienation. If their claims
remain unsatisfied it is due to some subsequently accruing
cause. Judge Lowell, in Pratt v. Curtis,5 derives the
following propositions from the cases: "(i). A volun-
tary conveyance to a wife or child is not fraudulent per se ;
but it is a question of fact in each case whether a fraud
was intended. (2). Such a deed, made by one who is
considerably indebted, is prima facie fraudulent, and the
burden is on him to explain it. (3). This he may do by
showing that his intentions were innocent, and that he
had abundant means, besides the property conveyed, to
pay all his debts." 6 The rule may be summed up to the
effect that the gift, conveyance, or settlement will be
upheld u if it be reasonable, not disproportionate to the

1 French v. Holmes, 67 Me. 198 ; Rose v. Colter, 76 Ind. 590 ; Evans v.

Stevens v. Robinson, 72 Me. 381 ; Hamilton, 56 Ind. 34 ; Sherman v.

Langhton v. Harden, 68 Me. 212. See Hogland, 54 Ind. 578 ; Pence v.

McFadden v. Mitchell, 54 Cal. 628 ; Croan, 51 Ind. 336.

Patterson v. McKinney, 97 111. 47 ; 6 2 Lowell 90.

Hinde's Lessee v. Longworth, 11 6See also note to Jenkins v. Cle-

Wheat. 213 ; Merrell v. Johnson, 96 ment, 14 Am. Dec. 707 ; Herring v.

111. 230. Richards, 1 McCrary 574. The ques-

1 Fuller v. Brewster, 53 Md. 362. tion whether the funds left were

See Copis v. Middleton 2 Madd. 410; ample to pay existing indebtedness is

Phettiplace v. Sayles, I Mason 312; for the. jury. Clement v. Cozart, 112

Eardey v. Green, 12 Beav. 182 ; At- N. C. 412, 17 S. E. Rep. 486, and the

wood v. Impson, 20 N. J. Eq. 150. proof to rebut the presumed fraudu-

3 Stewart v. Rogers, 25 Iowa, 395 ; lent intent must be clear and satis-
(iridley v. Watson, 53 111. 193; Win- factory. Snyder v. Free, 114 Mo.
Chester v. Charter, 97 Mass. 140. 360; 21 S. W. Rep. 847.

4 Dunn v. Dunn, 82 Ind. 43. See

§95 EVIDENCE OF SOLVENCY. [9]

husband's means, taking into view his debts and situation,
and clear of any intent, actual or constructive, to defraud
creditors."1 Dunlap v. Hawkins2 embodies an important
statement of the law upon this subject. The principle is
asserted that a creditor cannot impeach a conveyance
founded on natural love and affection, free from the impu-
tation of fraud, when the grantor had, independent of the
property granted, an ample fund 'to satisfy his creditors.3
Allen, J., in the course of the opinion, said : " By proving
the pecuniary circumstances and condition of the grantor,
or him who pays for and procures a grant from others, his
business and its risks and contingencies, his liabilities and
obligations, absolute and contingent, and his resources
and means of meeting and solving his obligations, and
showing that he was neither insolvent nor contemplating
insolvency, and that an inability to meet his obligations
was not and could not reasonably be supposed to have
been in the mind of the party, is the only way by which
the presumption of fraud, arising from the fact that the
conveyance is without a valuable consideration, can be
repelled and overcome, except as the party making or
procuring the grant may, if alive, testify to the absence
of all intent to hinder, delay, or defraud creditors." And
in Parish v. Murphree,4 the court observed : " To hold
that a settlement of a small amount, by an individual in
independent circumstances, and which, if known to the
public, would not affect his credit, is fraudulent, would be
a perversion of the statute." In Carpenter v. Roe,5 the

•See Herring v. Richards, 1 Mc- Paige (N. Y.) 526 ; Fox v . Moyer, 54

Crary, 574. N. Y. 125 ; Van Wyck v. Seward, 6

2 59 N. Y. 346; Carr v. Breese, 81 Paige (N. Y.) 62; Jackson v. Miner,

N. Y. 588; Jencks v. Alexander.il 101 111.554: Rogers v. Yerlander, 30

Paige (N. Y.) 619. W. Va. 619, 5 S. E. Rep. 817.

3 See Jackson v. Post, 15 Wend. (N. 4 13 How. 98.

Y.) 588 ; Phillips v. Wooster, 36 N. Y. 6 10 N. Y. 227.
412 ; Bank of U. S. v. Housman, 6

I92 EVIDENCE OF SOLVENCY. § 95

New York Court of Appeals held that, to invalidate a
voluntary conveyance, belief by the debtor as to his
insolvency was not absolutely necessary; it was sufficient
if his solvency was contingent upon the stability of the
market in the business in which he was engaged. In
other words, a debtor has not the right to make voluntary
alienations so as to leave himself in a condition in which
he hazards the rights of creditors on the contingency of a
fluctuating market. In Cole v. Tyler,1 the court say :
" It was at one time the rule that a voluntary conveyance
by one indebted at the time was fraudulent, as a matter
of law, towards his creditors. No evidence was allowed
to rebut the presumption of fraud.2 This rule was sub-
sequently deemed to be too severe by the courts, and the
less stringent rule was adopted that, while a conveyance
by a person indebted was presumptively or prima facie
fraudulent, the presumption might be rebutted by proof
to the contrary.3 This presumption, however, is not to
be overthrown by mere evidence of good intent, or gen-
erous impulses or feelings. It must be overcome by
circumstances showing on their face that there could have
been no bad intent, such as that the gift was a reasonable
provision, and that the debtor still retained sufficient
means to pay his debts. He can no more delay his
creditors by such voluntary conveyance than he can
actually defraud them."4 The statutory rule in New
York that lack of consideration alone will not suffice to
overturn a conveyance, and that other facts must be
shown, is not to be overlooked.5

1 65 N. Y. 78. Babcock v. Eckler, 24 N. Y. 623 ; Dy-

2 Reade v. Livingston, 3 Johns. Oh. gert v. Remerschnider, 32 N. Y. 648 ;
(N. Y.) 481. See Kain v. Larkin, 131 Curtis v. Fox, 47 N. Y. 300.

N. Y. 300, 30 N. E. Rep. 105. See 5 Kain v. Larkin, 131 N. Y. 300, 30

nls.. § 93. N. E. Rep. 105 ; Smith v. Reid, 134 N.

3 Seward v. Jackson, 8 Cow. 406. Y. 581, 31 N. E. Rep. 1082.

4 Carpenter v. Roe, 10 N. Y. 230 ;

CHAPTER VI.

SUBSEQUENT CREDITORS.

§ 96. ) Fraud upon subsequent cred-

97. f itors.

98. Proof of intent.

99. Conveyance by embarrassed

debtor.

100. Placing property beyond the risk

of new ventures or specula-
tions.

101. Convevances avoided.

§ 102

Conveyances not considered
fraudulent.

103. Subrogation of subsequent cred-

itors.

104. Subsequent creditors sharing

with antecedent creditors.

105. Mixed claims accruing prior and

subsequent to alienation.

106. Creditors whose claims accrued

after notice of alienation.

§ 96. Fraud upon subsequent creditors. — The great prac-
tical distinction between existing or antecedent creditors
and subsequent creditors in most of the States is, that a
voluntary alienation is usually considered, as to the former,
presumptively fraudulent, while as to the latter the burden
of proving an intention to commit a fraud, or the existence
of a secret trust or reservation, rests upon the creditor.
Generally speaking, subsequent creditors must elicit facts
showing contemplation of future indebtedness by the
insolvent,1 or future schemes of fraud.2 Voluntary deeds,

1 See Todd v. Nelson, 109 N. Y. 327,
16 N E. Rep. 360 ; Teed v. Valentine,
65 N. Y. 474 ; Savage v. Murphy, 34
N. Y. 508; McClaugherty v. Morgan,
36 W. Va. 191, 14 S. E. Rep. 992;
Thompson v. Crane, 73 Fed. Rep. 327:
Horbach v. Hill, 112 IT. S. 114, 5 S.
C. Rep. 81 ; Schreyer v. Scott, 134 U.
S. 405 ; 10 S. C. Rep. 579 : Neuburger
v Keim. 134 N. Y. 38, 31 N. E. Rep.
268; Petree v. Brotherton, 133 Ind.
692, 32 N. E. Rep. 300: Buckley v.
Duff, 114 Pa. St. 59), 8 Atl. Rep. 188 ;
Eames v. Dorsett, 147 111. 540, 35 N. E.

13

Rep. 735 ; Hagerman v. Buchanan,
45 N. J. Eq. 292, 17 Atl. Rep. 946 ;
Craft v. Wilcox, 102 Ala. 378, II So.
Ken. 658; Ditman v. Raule, 124 Pa.
St. 225, 16 Atl. Rep. 819 : Bluthenthal
v. Magnus, 97 Ala. 530, 13 So. Rep. 7 ;
Marshall v. Roll, 139 Pa. St. 399, 20
Atl. Rep. 999.

2Horbach v. Hill. 112 U. S. 111. 1 1!».
5 S. C. Rep. 81 : Schreyer v. Scott, 134
U. S. 411. 10 S. C. Rep. •">:'.»: Bilton v.
Morse, 75 Me. 258; Neuberger v.
Keim, 134 N. Y. 35, 31 N. E. Rep. 268 ;
Burton v. Platter, 53 Fed. Rep. 901.

194

FRAUD UPON SUBSEQUENT CREDITORS.

§96

it should be remembered, are ordinarily invalid or liable
to attack only at the suit of antecedent creditors,1 and the
absence of evidence showing fraud in the transaction will
usually defeat the actions of subsequent creditors.- As
we shall presently see there is not the same presumption
to aid the latter class.3 A specific intent to defraud subse-
quent creditors will manifestly avoid the transfer as to
them.4 In the absence of proof of such an intent the
transaction will stand.5 Chancellor Kent, in his cele-
brated judgment pronounced in Reade v. Livingston,6 a
case already noticed, said : " The cases seem to agree that
the subsequent creditors are let in only in particular cases ;
as where the settlement was made in contemplation of
future debts, or where it is requisite to interfere and set
aside the settlement in favor of the prior creditor." '
Judge Story observed: "Where the settlement is set
aside as an intentional fraud upon creditors, there is strong
reason for holding it so as to subsequent creditors, and to

1 Uncle's Lessee v. Lonywortli, 11
Wheat. 211; Sexton v. Wheaton, 8
Wheat. 229, 252, 1 Am. Lea. Cas. 17;
Loeschigk v. Addison. 4 Abb. X. S.
(N.Y.)210, affi'd51 X.Y. 000; Metropo-
lite Bank v. Rogers, 47 Fed. Rep.
lis. See § s(), and Chap. V.

Ford 1 . Johnston, 7 Hun (N. V. I
568; Dygert v. Remerschnider, 82 X.
Y. 010; Cole v. Varner, 31 Ala. ','44 ;
Jackson v. Plyler, 38 S. C. 196, 17 s.
E. Rep. 255.

Herring v. Richards, 1 McCrary,
:.71 : Barrett v. Nealon, 110 Pa. St.
177, 12 Atl. Rep. 861. In Jones v.
Light, si; Me. 442, 30 Atl. Rep. 71, the
court says : "If the transaction is
actually fraudulent againsl any
creditor, any and all creditors may
impeach and resist it. ami are entitled

to the aid of the law in appropriating
the property , fraudulently com eyed,

1.. the paymenl of 1 heir debts. The

uniform construction of that statute
includes subsequent as well as exist-
ing creditors." See Wit/, v. Osburn,
83 Va. 229. 'J S. E. Rep. 33; Link v.
Denny, 75 Va. 00:5.

4McPherson v. Kingsbaker,22Kan.
646; United state- v. Stiner, 8 Blatchf.
544; Candee v. Lord. 2 N. Y. 'J7.j ;
Anon. 1 Wall. Jr. lb: ; Horn v. 1:
•jo Ga. 223 ; Black v. Nease, 37 l'a. St.
433 : Johnston v. Zane. 11 Gratt. (Va.)
552 : Day v. Cooley, IIs Mass. 524 ;
Plimpton v. Goodell, 1 13 Mass. 365,
0 N. E. Rep. 791 ; Leonard v. Bolton,
i:.3 Mass. 431. 26 N. E. Rep. His.

Teed v. Valentine, 65 N. Y. 474,
and cases cited ; Bouquet v. Heyman,
50 N. .1. Eq. 114, '21 Atl. Rep. 266.

•■:; Johns. Ch. (N. Y.) 10;. See

Chap. V.

: See Walter v. Lane, 1 MacAr. (D.
■ 27o.

§ 96 FRAUD UPON SUBSEQUEN1 CREDITORS. [95

let them into the full benefit of the property."1 In
Savage v. Murphy,2 it appeared that the judgment-debtor
was engaged in an extensive business on credit, in which
he was considerably indebted, and that he stripped himself
of the title to all his property by transfer to his wife and
children for a merely nominal pecuniary consideration,
without any visible change of possession, and with the
intent to contract and continue a future indebtedness in
his business on the credit of his apparent ownership of the
property transferred, and to avoid payment of his debts.
After the transfer he continued in business, making new
purchases on credit, and using part of the avails of each
successive purchase to pay the indebtedness then existing,
during a period of about ten months, at the end of which
time he failed, owing debts thus contracted amounting to
$3,500. The court, upon these facts, held that it was clear
that the transfer thus made was fraudulent and void as
against subsequent creditors. The design to obtain a
credit after the conveyance by means of the continued
possession and apparent ownership of the property, which
the debtor thus placed beyond the reach of those who
might give him future credit, was plainly fraudulent. The
conclusion of fraud was not repelled by the circumstance
that the debts owing by him at the time of the transfer
were paid with the proceeds of credit subsequently
acquired by the means already stated. The indebted-
ness then existing was merely transferred, not paid, and
the fraud was as palpable as it would have been if the

'See also Ede v. Knowles, 2 Y. & 109 N. Y. 327. 16 X. E. Rep. 360:

C. N. R. 172-178, cited in Story's Eq. Neuberger v. Eeim, l-l N. Y. 38,

Jur. § 361, n.; Dewey v. Moyer, 72 N. 31 N. E. Rep. 268 ; Truesdell v. Sarles

Y. 76; May v. State Nat. Bank. 59 Ark. 10-1 N. Y. 161, 10 X. E. Rep. 139, and

614, 28 S. W. Rep. 431. cases cited.

2 34 N. Y ."KIN. See Todd v. Nelson,

196

FRAUD ri'ON Sl'I!SK(Jl'KNT CREDITORS.

97

debts remaining- unpaid were owing to the same creditors
to whom he was obligated at the time of the transfers.1

^ 97. — It ma)' be here observed that a fraudulent and
deceitful conveyance of property, made without valuable
consideration, and with intent to injure the rights or
avoid the debts of any other person, is invalid as to sub-
sequent creditors as well as to those who were creditors
at the time of the conveyance.'2 In Parkman v. Welch,3
Dewey, J., in speaking of the rights of subsequent credit-
ors, said : " This raises the question whether the effect
of the statute of 13 Eliz. c. 5, is to avoid conveyances
made upon secret trust and with fraudulent intent, as
well in favor of subsequent as previous creditors. On

this subject we apprehend the law is well settled

that a conveyance fraudulent at the time of making it,
might be avoided in favor of subsequent creditors."4 In

1 See s. P. Carr v. Breese, 18 Hun
(N. Y.) 134, 1 Am. Insolv. Rep.
355. In Todd v. Nelson. 109 N. Y.
327, Peckham, J., said : "The theory
upon which deeds conveying the prop-
erty of an individual to some third
party have been set aside as fraudulent
in regard to subsequent creditors of
the grantor lias been that he has made
a secret conveyance of his property
while remaining in the possession and
seeming ownership thereof, and has
obtained credit thereby , while embark-
•ng in some hazardous business requir-
ing such credit, or the debts which he
has incurred wore incurred soon after
the conveyance, thus making the
fraudulent intent a natural and alniOSl
a accessary inference, and in this way
he has hern enabled to obtain the
property of others who were relying
upon an appearance which was wholly
delusive." See Schreyer v. Scotl L34
[ 3. 411. 10 s. C. Rep 579

• McLane v. Johnson, 43 Vt. 48.

See Clark v. French. 23 Me. 221 : ( !ar-
biener v. Montgomery (Iowa), 66
N. W. Rep. 900.

3 19 Pick. (Mass.) 237.

1 See Carpenter v. McClure, 39 Vt.
9. In Day v. Co., ley, lis Mass. 527,
the court observed: " It is well sett led
that if a debtor makes a conveyance
with the purpose of defrauding either
existing or future creditors, it may be
impeached by either class of creditors.
or by an assignee in insolvency or
bankruptcy who represents both.
Parknian v. Welch, 19 Pick. (Mass. |
231 : Thacher v. Phinney, 7 Allen
(Mass.) 1 It! : Winchester v. Charter,
12 .Mien (Mas.-.) 606 ; Wadsworth v.
Williams, 100 Mass. 126. As it was

proved in this case that the grantor

had an actual fraudulent design which

was participated in by the grantee, it
is immaterial whether the demand-
ants are to be regarded as subsequent

or exist inn' creditors as to Hie convey-
ance." See also Clement v. Cozart,

§97

I'k M 1) I ['( iN SU;SE< 'I l.\ I CREDITORS.

197

Tony v. McGehee,1 the rule; is recognized that a volun-
tary conveyance may be impeached by a subsequent

112 N. C. 412, 17 S. E. Rep. 486. In
some States a different rule prevails,
and a specific intent to def nun I credit-
ors must be found in order to a void
the deed as to them. Gardner v.
Kleinke, 46 N. J. Eq. 90, 18 Atl.
Rep. 459; cf. Ditmanv. Raule, 124 Pa.
St. 225, 16 Atl. Rep. 819; May v.
State Nat. Bank, 59 Ark. 614, 28 S. W.
Rep. 431 ; Fullington v. Northwestern
Importers' etc. Assoc. 48 Minn. 490,
51 N. W. Rep. 475. The question
whether such intent to defraud sub-
sequent creditors exists is for the
jury. Marshall v. Roll, 139 Pa. St.
399, 20 Atl. Rep. 999.

'38 Ark. 427 ; 1 Story's Eq. Jurisp.
§ 361 ; Claflin v. Mess, 30 N. J. Eq.
211; Pope v. Wilson, 7 Ala. 690;
Smith v. Greer, 3 Humph. (Tenn.)
118 ; Reade v. Livingston, 3 Johns.
Ch. (N. Y.) 481.

Rights of subsequent creditors —
Laughton v. Harden. — The rights of
subsequent creditors are considered
and the general policy of the courts
in dealing with fraudulent transfers
learnedly discussed in Laughton v.
Harden, 68 Me. 208. The doctrine is
there asserted that a voluntary con-
veyance from father to son, made with
the intent to defraud creditors, may be
avoided as to such creditors without
allegations or proof that the grantee
participated in the fraudulent intent.
The court said: " The exact question
presented is this : Is a voluntary con-
veyance from father to son, made by
the grantor with an intent to defraud
subsequent creditors, void as to such
creditors, when there is no proof that
the grantee participated in that intent
when he received or accepted the (\t'o>\ ':
The statute of Elizabeth, c. 5, answers
the question in the affirmative. It
pronounces every conveyance, made

to hinder, delay,' or defraud creditors,

utterly void as against such creditors,
unless the estate shall he, • u| good

consideration, and bona fide, lawfully
conveyed to sucfa person,' not having

at the 1 inie ■ any manner of not ice ' of
such fraud. ( 'an it he said that this
estate was bona fide, 'law fulls ' con-
veyed, or that a grantee who pays no
consideration for land fraudulently
conveyed to him has ' no manner of
notice ' of the fraud ? lint this is not
all of the statute. It threaten- a pen-
alty against a party to such convey-
ance who, being privy and knowing
thereto, ' shall wittingly and willingly
put in use. avow, maintain, justify,
and defend the same,' as true and
bonafide and upon good consideration.
When a grantee in such a thvd he-
comes informed of the grantor's intent
does he not assist in executing that in-
tent by an endeavor to uphold and
maintain the deed? Is he not, in the
eye of the law. presumed to be a par-
ticipator in thefraud? Should not an
honest grantee repudiate the deed ?
The grantee, by the fraudulent acl of
his grantor, becomes the trustee or de-
positary of property which belongs to
the grantor's creditors. By attempt-
ing to withhold it from the creditors,
does not the grantee himself commil a
fraud? If innocent in the beginning,
does he not become guilty in the end?
The governing and acting intent was
the grantor's. Does not the grantee
endeavor to avail himself of it and
adopt it when he holdson tot he deed?
No other conclusion can be reached.

( )f course it will not at tin- day he

questioned that any conveyance maj
he avoided by subsequent as well as
by prior creditors, if fraud wasbj such
conveyance meditated against subse-
quent creditors. W'vinanv. Brown,

198

PROOF OF INTENT.

§98

creditor on the ground that it was made in fraud of exist-
ing creditors; but, to be successful, the subsequent
creditor must show either that actual fraud was intended,1
or that there were debts still outstanding, which the
grantor owed at the time it was made."

§ 98. Proof of intent. — The subject of the intent of the
parties to an alleged fraudulent transfer will be considered
presently.3 Speaking of the sufficiency of the evidence of
the intent to defraud subsequent creditors, Johnson, J.,
said:4 "Upon the question of fraudulent intent, or
whether the conveyance is fraudulent in fact, as to subse-
quent creditors, it is proper to consider the circumstances
of its being voluntary, and the party indebted at the
time ; and if additional circumstances connected with
those two be sufficient to show fraud in fact, it is void as
to subsequent creditors. It is not necessary that there

50 Me. 139 ; Bailey v. Bailey, 61 Me.
361 . Any other view of this question
than the one taken by us would permit
ami encourage most iniquitous frauds
upon the pari of badly disposed debt-
ors. A man might convey all his
property to his wife or minor children
upon the eve of an expected bank-
ruptcy, and, on account of Ins un-
doubted credit and apparent posses-
sion of means and property, be en-
abled to create a very great amount
of subsequent indebtedness. How
could a creditor show thai the wife.
and a fortiori, that the young minor
children knew of the grantor's fraud,
unless the knowledge can he imputed
to them under such circumstances as
a necessary implication of law ? It
would tic unnatural for a debtor's
wife and children to believe him to
lie a di-honest man. and uncommon
for then) to know much of his busi-
ness affairs."

' Schreyer v. Scott 134 U. S. 111.
10 S. C. Rep. 579: Horbach v. Hill.
112 U. S. 144. 149. 5S. C Rep. 81 :
Neuberger v. Keim, 134 N. Y. 38, 31
N. E. Rep. 268.

• In Day v. Cooley, 1 is Maes. 527.

the court says: " It is well settled

that if a debtor makes a conveyance
with the purpose of defrauding either
existing or future creditors, it may
be impeached by either class of
creditors, <>r by an assignee in in-
solvency or bankruptcy who repre-
sents both. Parkman v. Welch, 19
Pick. 231 . Thacher v. Phinney, 7
Allen. 146; Winchester v. Charter,
12 Allen, 606; Wadsworth v. Wil-
liams. 100 .Mass. 126."
See Chap. XIV.
1 Rose v. Brown, 11 W. Va. 134.

See Kanawha Valley Hank v. Wilson,
25 W. Va. 242: Hurt v. Timmons. 29
W. Va.453, 2 S. E. Rep. 780.

§ 98 PROOF < IF INI ENT.

should be direct proof to show the fraud ; it is to be
legally inferred from the facts and circumstances ol the
case, where those facts and circumstances are of such
a character as to lead a reasonable man to the conclusion
that the conveyance was made with intent to hinder, delay,
or defraud existing or future creditors.1 Where such
actual intent to defraud future creditors is proved it is
no defense to the action that the debtor may have in his
hands at the time property sufficient to pay all existing
debts.3 Folger, J., delivering the opinion of the New
York Court of Appeals in Shand v. Hanley,3 observes
upon this subject that " there is no difference in result, as
there is no difference in the intention to produce; the
result, between a transfer of property to defraud a creditor
existing at the time, and a creditor thereafter to be
made."4 Some of the re-enactments of the statute of
Elizabeth mention subsequent creditors which the Eng-
lish statute does not do.5 A conveyance intended to
defraud creditors is voidable not only as to existing but
as to future creditors.6 The intent must be mutual.
Marriage, as we shall elsewhere see, is a valuable consid-
eration which is much respected in the law, and an
ante-nuptial settlement, though made by the settler with
the design of defrauding his creditors, will not be annulled
in the absence of the clearest proof of participation in
the fraud on the part of the wife.7

1 See Carpenter v. Roe, 10 N. Y. Y.) 586. See Case v. Phelps, 39 N. Y.
227 ; Larkin v.McMullin, 49 Pa. St. 29. 164 ; Carr v. Breese, 81 N. Y. 584;

2 Dosche v. Nette, 81 Tex. 2V,7>. 10 Thomson v. Dougherty, L2 S. .V R.
S. W. Rep. 1018. (Pa.) 448; Lockhard \. Beckley, 10

3 71 N. Y. 319. 82> ; Matter of W. Va. 87; Rogers v. Verlander, 30
Brown,!'.!) Hun (N. V.) 27; Case v. W. Va. 619, 5 S. E. Rep. 847; May v.
Phelps, 39 N. Y. 164. Slate Xat. Bk. 59 Ark. 614, 28 S. W.

'See Mullen v. Wilson. 44 Pa. St. Rep. 131.

41G. Trewit v. Wilson. 103 t". S 32

BMay v. State Nat. Bk. 5!) Ark. G14, See Burton v. Platter, ■".:: Fed. Rep 901.

28 S. W. Rep. 433. See Chap. XX.

6Patridge v. Stokes, 66 Barb. (N.

200 CONVEYANCE BY EMBARRASSED DEBTOR. §99

ii 99. Conveyance by embarrassed debtor. — In Wallace v.
Penfield,1 it appeared that the debtor, who was somewhat
indebted at the time, made a voluntary settlement upon
his wife, by causing the title to the lands in question to be
taken in her name, with the intention of immediately build-
ing upon and improving the land and using it as a perma-
nent residence for himself and family. It was shown by
a preponderance of evidence that when the settlement was
effected, and during the period the land was being built
upon and improved, the debtor had property which cred-
itors could have reached, exceeding in value his indebted-
ness by several thousand dollars, and was engaged in an
active business with fair prospects. All the creditors whose
claims existed at the date of the settlement, or during the
period when the debtor was making expenditures for
improvements, had been fully paid and discharged. The
plaintiff's claim accrued subsequently. The Supreme
Court of the United States very properly decided that
these facts were entirely consistent with an honest pur-
pose to deal fairly with any creditors the debtor then had,
or might thereafter have, in the ordinary course of his
business, and that neither the conveyance to the wife, nor
the withdrawal of the husband's means from his business
for the purpose of improving the land settled upon the
wife, had the effect to hinder or defraud his then existing1
or subsequent creditors. In Pepper v. Carter,2 the
Supreme Court of Missouri said : " Some would make an
indebtedness per sc evidence of fraud against existing
creditors ; others would leave every conveyance of the
kind to be judged by its own circumstances, and from
them infertile existence or non-existence of fraud in each

1 106 U. S. 260, 1 S. C. Rep. '210. v. Scott, 134 U. S. 400. 10 S. ( !. Rep.

Where a husband acquires property 579.

in his own name by the use of the Ml Mo. 543. See Can- v. Breese,

separate property of the wife, a trans- 81 N. Y. 584; Schreyer v. Scott, 134

1.1 to her is urn voluntary. Schreyer U. S. 419, 10 S. C. Rep. 579.

§99 CONVEYANCE r>\ EMBARRASSED DEBTOR. 201

particular transaction. Without determining the ques-
tion as to existing creditors, we may safely affirm that all
the cases will warrant the opinion that a voluntary con-
veyance as to subsequent creditors, although the party be
embarrassed at the time of its execution, is not fraudulent
per se as to them ; but the fact, whether it is fraudulent or
not, is to be determined from all the circumstances. 1 do
not say that the fact of indebtedness is not to weigh in
the consideration of the question of fraud in such cases,
but that it is not conclusive." The language of this case
is quoted approvingly by the same court in the later
case of Payne v. Stanton,1 where it is said : " The doc-
trine is well settled that a voluntary conveyance by a
person in debt is not, as to subsequent creditors, fraudu-
lent per se. To make it fraudulent as to subsequent
creditors, there must be proof of actual or intentional
fraud. As to creditors existing at the time, if the effect
and operation of the conveyance are to hinder or defraud
them, it may, as to them, be justly regarded as invalid,
but no such reason can be urged in behalf of those who
become creditors afterwards." These cases in Missouri
are quoted from at length, and declared to be controlling,
by the United States Supreme Court in Wallace v. Pen-
field.2 In the latter case, however, the facts proved and
found by the court expressly repel the idea that the
debtor was embarrassed or insolvent when the settlement
was made ; and the decision can scarcely be regarded as
fully approving Payne v. Stanton and similar cases to the
effect that an embarrassed debtor may make a voluntary
conveyance which will be upheld against subsequent
creditors. Some of these Missouri cases are at least
dangerously near the border line. The court, in Payne

'59 Mo. 159. See Boatmen's Sav- 515; Loehr v. Murphy, 45 Mo. App.
ings Bank v. Overall, 16 Mo. App. 524.

-' 106 U. S. 260, IS i. Rep 216.

202 PLACING PROPERTY BEYOND RISK. §IOO

v. Stanton, draws the distinction between existing and
subsequent creditors, and says that the conveyance
might hinder, delay, and defraud the former, " but no such
reason can be urged in behalf of those who become credit-
ors afterwards." This, we respectfully urge, is attaching
undue importance to the exact date or period of time
when the creditor's claim accrued. The embarrassed
debtor, under this rule, might voluntarily alienate the mass
of his property, then secure loans or incur obligations to
creditors, whose claims would thus be subsequent to the
voluntary conveyance, and with the money thus acquired
liquidate the obligations existing when the conveyance
was effected. The embarrassment of the debtor when the
transfer was made calls into being the claims of, and obli-
gations to, the new creditors ; the deficit then existed, and
the liability has been merely transferred to new parties,
while the debtor's embarrassed estate has been further
crippled or rendered hopelessly insolvent by the voluntary
alienation. It seems to follow that the safer and more
prudent rule would be to hold that no voluntary convey-
ance by an embarrassed debtor should be upheld against
creditors, whether their claims accrued prior or subsequent
to the transfer.

§ ioo. Placing' property beyond the risk of new ventures or
speculations — This brings us to the most important
branch of the subject, viz., the effect of conveyances, gifts
and settlements made to avoid the risks of losses likely to
result from new business schemes. To illustrate, a baker
who had been carrying on business for some years, being
about to purchase a grocery business, which he intended to
carry on together with his own trade, made a voluntary set-
tlement of nearly the whole of his property upon his wife
and children. He then purchased the grocery business,
and having lost money sold it, but continued in business as a
baker. Three years after the settlement he filed a liquida-

§ IOO PLACING PROPERTY BEYOND RISK. 203

tion petition. The court held that independently of the
question whether he was solvent at the date of the settle-
ment, it was voidable as against the trustee in liquidation,
under the stat. 13 Eliz. c. 5, on the ground that it was e\ i-
dently executed with the view of putting the settler's prop-
erty out of the reach of his creditors in case he should fail in
the speculation on which he was about to enter, in carrying
on a new business of which he knew nothing.1 If a settle-
ment is made " on the eve of a new business, and with a view
of providing against its contingencies, it is as unavailing
against new creditors as against old ones."2 This same
general principle was involved in Case v. Phelps,11 in the
New York Court of Appeals. Woodruff, J., a judge of
much learning and great vi^or of mind, said: "May a per-
son about to engage in business which he believes may
involve losses, with a view to entering upon such business,
convey his property to his wife, voluntarily, without con-
sideration, to secure it for the benefit of himself and family,
in the event that such losses should occur? I cannot
regard this question, as in substance, other than the inquiry,
May a man, for the purpose of preventing his future credit-

1 Ex parte Russell. In re Butter- 2 Black v. Nease, 37 Pa. St. 438. The

worth, 19 Ch. D. 588, 51 L. J. Ch. law should not be so framed orcon-

521, 46 L. T. N. 8. 113, 30 W. R. strued as to tempt men to desert their

584 ; following Mackay v. Douglas, 14 legitimate business, and engage in

L. R. Eq. 106. Compare Winchester specious and hazardous speculations,

v. Charter, 102 Mass. 272; Beeckman concerning the dangers of which thej

v. Montgomery, 14 N. J. Eq. 106: are ignorant, by allowing them to

Cramer v. Reford, 17N. J. Eq. 383 ; Na- "make a feather bed on which they

tional Bank of Metropolis v. Sprague, may fall lightly," under the plea of

20 N. J. Eq. 25; Annin v. Annin, 24 affection for their wives and children.

N. J. Eq. 194 ; Case v. Phelps, 39 N. Thomson v. Dougherty, 12 S. & R

Y. 164; Gable v. Columbus Cigar (Pa.) 451.

Co., 140 Ind. 563, 38 N. E. Rep. 474 ; 339 N. Y. 169 ; Neuberger v. Keim,

Bates v. Cobb, 29 S. C. 395, 7 S. E. 134 N. Y. 35, 31 X. E. Rep. 868;

Rep. 743; Lewis v. Simon, 72 Tex. 470, Schreyer v. Scott. 134 O. S. 106, 111,

10S. W. Rep. 554; Sommermeyer v. 10 S. C. Rep. 579; Eorbach v. Hill,

Schwartz, 89 Wis. 66, 61 N. W. Hep. 112 U. S. 144, 149, 5 S. C. Rep. 81.
311.

204 PLACING PROPERTY BEYOND RISK. § IOO

ors from collecting their demands out of his property then
owned, and for the purpose of casting upon them the haz-
ards of his success in the business in which he is about to
engage, convey his property without consideration to his
wife, in order to secure the benefit of it to himself and
family, however disastrous such business may prove, and
continue in the possession, not even putting the deeds upon
record until after such subsequent indebtedness arises?"1
The question of the validity of a gift or settlement, as to
subsequent creditors, as we have said, turns upon the ques-
tion as to whether it was made in contemplation of future
debts,'2 or to secure the debtor " a retreat in the event of a
probable pecuniary disaster in a hazardous business in which
he proposed to embark."3 To bring the transfer within
this rule, " it must be executed with the intention and
design to defraud those who should thereafter become his
creditors,"4 the debtor proposing to throw the hazards of
the business in which he is about to engage upon others,
instead of honestly holding his means subject to the chance
of the adverse results incident to all business enterprises.6
But these cases must be co.nsidered within proper restric-
tions. Thus, where a man who was solvent paid for prop-
erty which he procured to be conveyed to his wife, and
there was no evidence tending to show that by so doing
he intended to defraud any subsequent creditors, it has
been held that the conveyance is perfectly valid in her

'See City Nat. Bank v. Hamilton, See AVilliams v. Banks, 11 Md. 198;

34 N. J. Eq. 160. Moore v. Blondheini, 19 Md. 172.

2 Walter v. Lane, 1 MacAr. (D. C.) Smith v. Vodges, 92 U. S. 183;

282. Sexton v. Wheaton, 8 Wheat. 229 ;

3 Fisher v. Lewis, 69 Mo. 631 ; Neu- Mullen v. Wilson, 44 Pa. St. 418;

berger v. Keim, 134 N. Y. 33. 38, :il Stileman v. Ashdown, 2 Atk. 481.

N K. Re]>. 268; Schreyer v. Scott, Compare United States v. Griswold, 7

134 U. S. 406, 411 ; 10 S. C. Rep. 579. Sawyer, 335; McPherson v. Kings-

See Carver v. Barker, 73 Hun (N. Y.) baker, 22 Kan. 646; Sheppard \.

416, 26 N. Y. Supp. 919. Thomas, 24 Kan. 780; Kirksey v.

1 Matthai v. Heather, 57 Md. 484. Snedecor, 60 Ala. 192 ; Marshall v.

Groom, 60 Ala. 121.

§ 100

PLACING PROPERTY BEYOND RISK.

205

favor as against his subsequent creditors, and that a hus-
band had a right to make a settlement of property upon
his wife, provided it was free from fraud.1 Subsequent
indebtedness cannot be invoked to make that fraudulent
which was honest and free from impeachment at the
time.3 In Graham v. Railroad Co.,3 a leading and im-
portant case, it is said to be a well-settled rule of law
that if an individual, being solvent at the time, without any
actual intent to defraud creditors, disposes of property for
an inadequate consideration, or even makes a voluntary
conveyance of it, subsequent creditors cannot question
the transaction. The argument advanced is that such
creditors are not injured ; they gave credit to the debtor
in the status which he had after the voluntary conveyance
was made. This rule was applied to an alienation by a
corporation.4

1 Curtis v. Fox, 47 N. Y. 301 ; Phil-
lips v. Wooster, 36 N. Y. 412. The
rule obtaining in New York is clearly
laid down in Scrheyer v. Scott, 134
U. S. 411, 10 S. C. Rep. 579, where
it is said: "It is evident that the
rule obtaining in New York, as well
as recognized by this court, is
that even a voluntary conveyance
from husband to wife is good as
against subsequent creditors; unless it
was made with the intent to defraud
such subsequent creditors ; or there
was secrecy in the transaction by
which knowledge of it was withheld
from such creditors, who dealt with
the grantor upon the faith of his own-
ing the property transferred ; or (lie
transfer was made with a view of
entering into some new and hazard-
ous business, the risk of which the
grantor intended should be cast upon
the parties having dealings with him
in the new business." This language is
cited with approval in Neuberger v.
Keim, 134 N. Y. 38, 31 N. E. Rep. 2(58.

2 See Babcock v. Eckler, 24 N. Y'.
630 ; Reade v. Livingston, 3 Johns.
Ch. (N. Y.) 500; Seward v. Jackson.
8 Cow. (N. Y.) 406 ; Hinde's Lessee \.
Longworth, 11 Wheat. 199.

3 102 U. S. 148. See Wallace v.
Penfield, 106 U. S. 260, 1 S. C. Rep.
216; Mattingly v. Nye, 8 Wall. 370;
Schreyer v. Scott, 134 U. S. 41 I, 10 S.
C. Rep. 579; Sexton v. Wheaton, 8
Wheat. 239, per Marshal, C. .1.:
1 Am. Lea. Cas. 17, where the law
upon this subject is learnedly dis-
cussed in a note. In Porter v. Pitts-
burg Bessemer Steel Co., 120 U. S.
673, 7 S. C. Rep. 1206, the court said :
"It is a well-settled principle that
subsequent creditors cannol be heard
to impeach an executed contract,
where their dealings with the com-
pany, of which They claim the benefit,
occurred after the contract became
an executed contract."

4 Compare Wabash, St. L. & P. Ry.
Co. v. Ham, 114 TJ. S. 587, 594, 5 S. C.
Rep. 1081.

206 CONVEYANCES AVOIDED. § IOI

§ 101. Conveyances avoided.— The Chancellor said, in
Beeckman v. Montgomery:1 "Aside from the fact that
the deed was made by the father in contemplation of
future indebtedness, there are strong circumstances indi-
cating the existence of actual fraud. The deed was made
on the eve of the grantor engaging in mercantile busi-
ness, which would require for its successful pursuit both
capital and credit. He disposed, at the time of the con-
veyance, of the entire control of his real estate, which
constituted the bulk of his property, leaving him-
self an inadequate capital for conducting his business or
raising loans. The credit which he obtained was due to
his former standing as a man of responsibility. The con-
veyances to his children were not advancements adapted
to the means and situation in life of the grantor — they
absorbed his whole property. The deed to the defendant
was made while he was an infant but sixteen years of age,
not needing an advancement, and not of discretion to
take charge and management of the property. It was
kept secret for more than a year, and was not left at the
office to be recorded till the day after a suit at law was
commenced by the complainants for the recovery of their
debt."2 If a person about to contract debts makes a
voluntary conveyance, with the intent to deprive future
creditors of the means of enforcing collection of their
debts, and this purpose is accomplished, it is very clear
that such creditors are injured and defrauded.3 A cred-

■II X. J. Eq. 112; see Haston v. 413; Barling v. Bishopp, 29 Beav.

Castner, 31 N. J. Eq. 704; Francis v. 417; Clark v. Killian, 103 U. S. 766,

Lawrence, 18 X. .1. Eq. 508, 22 Atl. affi'g Killian v. Clark, 3 MacAr. (D.

Rep. 259. C.) 37!) ; Hitchcock v. Kieley, -11 Conn.

2 See City Nat. Bank v. Hamilton, 34 (ill ; Williams v. Davis, 69 Pa. St. 21 ;

N.J. Eq. 158 ; Carpenter v. Carpenter, Pawley v. Vogel, 42 Mo. 303; Hersch.

25 N. .1. Eq. 194; Dick v. Hamilton, feldt v. George, 6 Mich. 456 ; Hilliard

Deady, 322; Burdick v. Gill, 7 Fed. \. Cagle, 46 Miss. 309; Huggins v.

Rep. 668 : Cart* r v. Grimshaw, 49 N. Perrine, 30 Ala. 396.

II. LOO; Snyderv. Christ, 39 Pa. St. * Burdick v. Gill, i Fed. Rep. 670.
199; Mullen v. Wilson, II Pa. St.

§102 CONVEYANCES NOT FRAUDULENT. 207

itor has a right when extending credit, to rely upon the
honesty and good faith of the debtor, and may assume,
without inquiry, that the debtor has made no fraudulent
conveyances of property.1 In Francis v. Lawrence8 the
court say : "The deed was not delivered to the grantee.
and not placed upon the record, but was held by the wife,
and the husband was thus enabled to trade upon the false
credit which he acquired by being the apparent owner of
the property, while the deed was ready to be put upon
the record at a moment's notice This transac-
tion cannot be regarded in any other light than as a fraud
upon the creditors."

§102. Conveyances not considered fraudulent. — But the
courts will not willingly overturn a settlement or volun-
tary alienation at the suit of a subsequent creditor, upon
slight, unsubstantial, or intangible proof. Carr v.
Breese3 is an illustration. In that case the New York
Court of Appeals, overruling the court below, decided that
where a husband, worth $22,000, owing debts amounting to
$2,800, which were subsequently paid, and engaged in a
prosperous business, purchased property costing about
$16,000, and took it in the name of his wife, and paid
about $10,000 of the consideration by mortgage on his
real estate, and the balance by mortgage upon the
premises purchased, the settlement was not unsuitable or
disproportionate to his means. Miller, J., speaking for
the court, said : " There was no insolvency in fact or in
contemplation, no new enterprise started which involved
unusual or extraordinary hazard, but the continuance of
the business of the grantor for the period of three years,
and no dishonest failure, or attempt in any form to
defraud. An existine indebtedness alone does not render

'Ibid. (N. Y.) 134. s><' s. i>. Phoenix Bank

2 48 N. J. Eq. 511, 2,2 Atl. Eep. 259. v. Stafford, si) N. Y. 105 . Truesdell v.
381 N. Y. 584; overruling- 18 Hun Sarles,104 N.Y. Wis, LON. E. Rep. 189.

208 SUBSEQUENT CREDITORS. § 103

a voluntary conveyance absolutely fraudulent and void as
against creditors, unless there is an intent to defraud.1
This is especially the case when it is shown that the resi-
due of the property was amply sufficient to pay all
debts," ~ and that the credit was given without any reli-
ance on the ownership of the land conveyed.3 It may be
observed that although in Babcock v. Eckler,4 the dis-
proportion was far greater than in Carr v. Breese,5 the
conveyance was upheld; but in this case evidence was
introduced tending to show that the conveyance was not
entirely voluntary.6 Again in Carpenter v. Roe,7 the
court, citing Hinde's Lessee v. Longworth,8 says: " If it
can be shown that the grantor was in prosperous circum-
stances and unembarrassed; and that the gift was a reason-
able provision, according to his state and condition in
life, and leaving enough for the payment of the debts of
the grantor," the presumptive evidence of fraud would be
met and repelled.9

£ 103. Subrogation of subsequent creditors. — A device to
which fraudulent insolvents often resort consists in making
a voluntary coveyance and following this up by paying
all the antecedent or existing creditors, practically with
the moneys derived from the credit extended by subse-
quent creditors. Savage v. Murphy,10 already quoted,

•Citing Van Wyck v. Seward, G 6 See Childs v. Connor, :;* N. Y.

Paige (X. V.) 62 ; Second Nat. Bank Superior Ct. 471.

of Beloit v. Merrill, 81 AVis. 142, 50 MO N. Y. 227.

N. W. Rep. On;',. 11 Wheat. 213.

'Citing Jackson v. Post, 15 Wend. Sec Crawford v. Logan, 97 HI.

(N. Y. 1 588; Phillips v. Wooster, 36 396 ; Clark v. Killian, 103 U. S. 766 ;

X. Y. 112 : Dunlap V. Hawkins, 59 N. Wallace v. Penfield, 106 IT. S. 200, 1

Y.342. S. C. Rep. 216; Pepper v. Carter, 11

'Sorenson v. Sorenson, 69 Mich. M<>. 540; Payne v. Stanton, 59 M<>.

351 37 N. W. Rep. 358. 158; Genesee River XTat. Bank v.

'j I X. Y. 623. Mead, 92 N. Y, 637.

>81N. Y. 584. "ol X. Y 508. Barhydl v. Perry.

57 Iowa419, 10 N. W. Rep. 820.

§ 104 SUBSEQUENT AND ANTECEDENT CREDITORS. 20Q

was such a case.1 It is a most unsubstantial mode of
paying a debt to contract another of equal amount. It is
the merest fallacy to call such an act getting- out of
debt,2 and the case should be treated as if the prior
indebtedness had continued throughout/5 or as a case of
a continued or unbroken indebtedness.4

§ 104. Subsequent creditors sharing with antecedent credit-
ors.—In a case which arose in Massachusetts, in which an
administrator sought to annul a fraudulent alienation made
by his intestate, Dewey, J., said: "Though the ground
of avoiding this conveyance is that the land was liable to
be taken to satisfy existing creditors only, yet when the
conveyance is avoided, the proceeds of the sale will be
assets generally, and other creditors will receive the ben-
efit thereof incidentally."5 ' In Kehr v. Smith,6 Davis, ].,
observed : " It is well settled, where a deed is set aside
as void as to existing creditors, that all the creditors,
prior and subsequent, share in the fund pro rata.''
Mr. Peachey observes :8 "It has, however, never been
disputed but that a subsequent creditor would participate
in the benefit of a decree instituted by a prior creditor,
and would have the same equity for having the property

'See § 96. See also Churchill v. 10 N. Y. 189 ; Thomson v. Dougherty,

Wells, 7Coldw. (Term.) 364; Moritz 12 S. & K. (Pa.) 448; Henderson v.

v. Hoffman, 35 III. 553. Hoke, 3 Dev. (N. C.) Law 12-14;

2 Paulk v. Cooke, 39 Conn. 566. Kissam v. Edmundson, 1 Ired. Eq.

3 Edwards v. Entwisle, 2 Mackey (N. C.) 180; Sexton v. Wheaton, 1
(D. C.) 43; Antrim v. Kelly, 8 N. B. Am. Lea. Ca*. 45; Norton v. Norton,
R. 587, 1 Feci. Cases, 1062; Rudy v. 5Cush. (Mass.) 529 ; O'Daniel v. Craw-
Austin, 56 Ark. 73, 19 S. W. Rep. 111. ford, 4 Dev. | X. ( !. Law. 197-204 :
. 4 Paulk v. Cooke, 39 Conn. 566. Reade v. Livingston, 3 .Johns. ( !h. (N.

5 Norton v. Norton, 5 Cush. (Mass.) Y. ) 4*1-4!)!! ; Townshend v. Windham,

530. 2 Ves. Sen. 10; Jenkyn v. Vaughan,

620Wall. 30. 3 Drewry, 419-124. See Bassetl v.

" Citing Magawley's Trust, 5 De G. MeKenna, 52 Conn. 412. citing this

and Sm. 1 ; Richardson v. Smallwood, section; Day v. Cooley, L18 Mass.

Jacob 552-558 ; Savage v. Murphy, 34 524.

N. Y. 508; lley v. Niswanger, Harp. "Peachey on Marriage Settlements,

Eq. (S. C.) 295 ; Robinson v. Stewart, p. 197.
14

2IO MIXED CLAIMS. § 105

applied. Again no distinction has been drawn in such
cases between the different classes of creditors, that is,
between those whose debts existed at the time the deed
was executed, and those who became creditors subse-
quently, or that any priority can be given to those who
were creditors at the date of the instrument over the
subsequent creditors ; all would, in fact, participate pro
rata"1 There has been, however, some hesitancy on the
part of the courts in holding that a deed which existing
creditors could avoid, was, after avoidance by them, to be
considered void as to all creditors ; for that is practically
the effect of letting in subsequent creditors, especially to
share pro rata. Though the deed cannot be set aside at
the instance of subsequent creditors, yet the authorities
seem to give them the same benefit when the antecedent
creditors succeeded in annulling it. It would seem to
result that while there is a discrimination in the right to
attack the conveyance, there is none as to sharing in the
successful result. In considering this feature, however,
the rule that a creditor, by filing a bill, acquires an
equitable lien and preference in certain cases, must not
be overlooked.3

J; 105. Mixed claims accruing prior and subsequent to alien-
ation.—The right of a grantee or vendee, from whom a
creditor seeks to wrest property held in trust for a debtor,
to require the creditor to show, in a proper case, that his
debt accrued before the conveyance which is questioned,
is clearly established. As a voluntary or fraudulent con-
veyance is ordinarily good between the parties, and can
be upheld except as against certain classes of persons, it

■Cited with approval in Amnion's Thomson v. Dougherty, 12 S. & R.

Appeal, ii:; I'a.St. 289. SeeChurchill (Pa.) 448; Kidney \. Coussmaker, 12

\ Wills. ', Coldw. (Tenn.) 364 ; Trim- Ves. Jr. 136, note. Compare Converse

ble v. Turner, 21 Miss. :;4S : Kipp v. v. Hartley. 31 Conn. 379.

Hanna, 2 Bland's* !h. (Md. ) 26 ; Beach 2See Pullis v. Robinson, 3 Mo. App.

\ White, Walker's Ch. (Mich.) 495; 548. See §61; also Chap. XXV.

§ 105 MIXED CLAIMS.

21 l

follows that the vendee can force the plaintiff to show
that he comes within some privileged class entitled to
impeach the transaction.

Where it is important or vital to the creditor's success
to show that he was an existing creditor as to the con-
veyance, and it appears that some of the items of his
claims accrued prior and others subsequent to the con-
veyance, and all these items are embodied in one judg-
ment, it has been held in several cases that he is to be
treated as a subsequent creditor, not entitled to attack
the conveyance.1 In Baker v. Gilman,2 the creditor was
an attorney, and his claim was for services. Johnson, J.,
said : " The plaintiff was clearly a subsequent creditor of
Gilman. His employment, by virtue of his retainer,
was a continuous one until the determination of the
actions. It was a single demand for services, a small
portion of which were rendered before the conveyance,
and the far larger portion long afterwards. This being
embraced in one judgment, nearly two years after the
conveyance, renders the plaintiff clearly a subsequent
creditor." In Reed v. Woodman,3 it appeared from the
evidence that the greater part of the debt which was
the foundation of the judgment rendered in favor of
the demandant accrued subsequent to the date of the
challenged conveyance. The court said : " The levy was
entire, and cannot be so apportioned or divided as to
constitute a satisfaction for that part of his debt which
was due prior to that deed. The demandant, having
taken judgment for his whole demand, is to be regarded
as a creditor subsequent to the conveyance of the land

•See Miller v. Miller, 23 Me. 22, Pittsb. L. J. (Pa.) 135; Henderson v.

39 Am. Dec. 598, and notes; Reed v. Henderson, 133 Pa. St. 399, 19 \tl.

Woodman, 4 Me. 400 : Usher v. Hazel- Rep. 424.

tine, 5 Me. 471 ; Quimby v. Dill, 40 2 52 Barb. (N. Y.) 33.

Me. 528 ; Moritz v. Hoffman, 35 111. 3 4 Me. 400.
558. Contra, Ecker v. Lafferty, 20

212 STATUS Ol CREDITORS. § 106

in question by his debtor. He cannot therefore impeach
that conveyance but by showing actual fraud." 1

$ 106. Status of creditors whose claims accrued after notice
of alienation. — As a general rule a subsequent creditor
who acquired his claim with knowledge or notice of the
conveyance sought to be annulled, cannot attack it as
fraudulent.' In Baker v. Gilman,3 Johnson, J., said :
"I do not think a creditor, who has trusted his debtor
after being fully informed by the latter that he has put
his property out of his hands, by a conveyance, valid as
between him and his grantee, though voidable as to exist-
ing creditors, should ever be allowed to come into court
and claim that such conveyance was fraudulent and void,
as to him, on account of such indebtedness. As to such
creditor, a conveyance of that kind would not be fraudu-
lent, in any sense, and could not, on that ground, be
avoided." But the mere recording of a conveyance is not
constructive notice to a creditor.4

1 See Humes v. Scruggs, 94 TJ. S. ' 3 52 Barb. (N. Y.) 39. See Sledge
22. v. Obenchain, 58 Miss. 670 ; Kane v.

2 Lehrnberg v. Biberstein, 51 Tex. Roberts, 40 Md. 594 : Williams v.
457 ; Monroe v. Smith, 79 Pa. St. 459 ; Banks, 11 Md. 198; Sheppard v.
Herring v. Richards, 3 Fed. Rep. 443. Thomas, 24 Kan. 780. Compare
See Knight v. Forward, 63 Barb. (N. Kirksey v. Snedecor, 60 Ala. 192.
Y.) 311 ; Lewis v. Castleman, 27 Tex. 4 Marshall v. Roll, 139 Pa. St. 399,
107 20 Atl. Rep. 999.

CHAPTER VII.

WHO MAY BE COMPLAINANTS.

§ 107.
108.
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.

Parties complainant.

Joinder of complainants.
Suing on behalf of others.
"And others."
Surety.

> Executors and administrators.

Assignee in bankruptcy.

General assignee.

Receivers.

Receivers of corporations.

Foreign receivers.

^ 119. Creditors of corporations.

120. Sheriff.

121. Heirs — Widow.

122. Husband and wife.

123. Tort creditor.

124. Overseer of the poor.

125. Creditors having liens.

126. Purchaser removing ii

brances.

127. Creditors opposing will.
127a. Cestui que trust.

§ 107. Parties complainant. — The rights of the two great
classes — existing and subsequent — into which creditors
are necessarily divided, having been considered,1 the dis-
cussion would not be complete without noticing, in
detail, the cases in which complainants in different capac-
ities are permitted to prosecute the various litigations
under consideration. The principle must be kept con-
stantly in view that fraudulent conveyances and secret
trusts can be assailed only by those who have been
injured,3 andare voidable only in favor of parties occupying

'See Chaps. V., VI.

3 Sides v. McCullough, 7 Mart. (La.)
654 : 12 Am. Dec. 519 ; Edwards v.
McGee, 31 Miss. 143; Philips v.
Wooster, 36 N. Y. 412 ; Morrison v.
Atwell, 9 Bosw. (N. Y.)503 ; Scholey
v. Worcester, 4 Hun (N. Y.) 302;
Pass v. Lynch, 117 N. C. 454. In
Nash v. Geraghty, 105 Mich. 382, 63
N. W. Rep. 437, the court says :
' ' Before a decree is granted on behalf

of creditors setting aside a convey-
ance, it should be made affirmath ■ l\
to appear that the creditors have
been substantially injured by the
transfer." Hal] v. Moriarity, 57 Mich.

345. A. conveyed to B. in hand of

creditors. A railroad company

to take the land and pay an award of

damages. Whensued for the amount

Of the award the c pany Se1 up that

15. derived title by fraud The plea

214

PARTIES COMPLAINANT.

§ I07

the positions of non-assenting-1 creditors2 or subsequent
purchasers.3 The creditor who first institutes a suit in
chancery to avoid a fraudulent conveyance is entitled to
relief, without regard to other creditors standing- in the
same right, who have not made themselves joint parties
with him,4 or taken any proceedings. The creditors
spoken of as entitled to discover equitable assets, or
annul covinous transfers, are the creditors of the grantor
or donor who has made the fraudulent conveyance,'' or
has title to the equitable assets. That a " fraud upon
the public" was the design of the transfer is not regarded
as a sufficient ground for avoiding it.6 A fraudulent pur-
pose is harmless if unattended with any wrongful effect.7
Manifestly, the fraudulent intent, as we shall show, must
be connected with the transaction assailed, and spring
out of it, and not relate merely to some entirely inde-
pendent act.s It does not follow from this rule that it is

was held bad. Lacrosse & M. R. R.
Co. v. Seeger, 4 Wis. 268. So a party
with whom goods are deposited for
safe keeping cannot set up fraud in
the title, the court in one case saying :
•■ We recognize the right of no man,
in this way. to turn Quixote and fight
against fraud, for justice sake alone.
In the mouth, therefore, of this de-
fendant. 1 do not perceive the righl to

Sel up this defense, even if it were

true in fact." Hendricks v. Mount, 5
N. .J. L. 738, 743. Compare Bell v.
Johnson, ill III. 374. Sec § 91.

( Ireene v. Sprague Mfg. Co., 52
Conn. 330.

8( e Mosely v. Mosely. 15 N Y.
334 : .Mien v. Steiger, 17 Col. 556,
31 Pac. Rep. 226; Pass v. Lynch, 117
N. ('. 158; Allenspach v, Wagner, 9
Col. 132, lu Pac. Rep. 802; Burke v.
Adams, 80 Mo. .".04. The creditor's
debl musl be due before the bill will
lie. Browne v. Hernsheim, 71 Miss.
r.74. 14 So. Rep. 36.

"Burgett v. Burgett, 1 Ohio 4G9,
13 Am. Dec. 634 ; Thompson v. Mooi-e,
86 Me. 47 ; Jewell v. Porter. 31 N. H.
34; Byrod's Appeal, 31 Pa. St. 241.

*McCalmonl v. Lawrence,! Blatchf.
235.

Sec Chapter 111. Morrison v. At-
well, 9 P.osw. (N. Y.)503; Powers v.
Graydon, 10 Bosw. <X. Y.) 630. A
creditor's bill lias been supported

founded upon the judgmenl claim of

a cestui que trust, against the personal
representative of the trustee, to reach

the proceeds of laud sold liv the trus-
tee, which were held under a trust

for the benefit of creditors. Diefen-
dorf v. Spraker, 10 N. Y. 240.

8 Griffin \. Doe. d. Stoddard, 12 Ala.
783.

• Buford v. Keokuk X. L. Packet
('0.. :i Mo. A pp. 159.

8 Wilson v. Forsyth, 24 Barb. (N.
Y.) 128.

§ ioS JOINDER 01 COMPLAINANTS. 21 5

necessary that any particular creditor should be men-
tioned by name.1 If the proofs establish that the
alienation was made to defeat creditors, and that the plain
tiff was a creditor, a case is made out.

It is well observed by Chancellor Kent, in Brown v.
Ricketts,3 that the question of parties to a suit is fre-
quently perplexing and difficult to reduce to rule. The
remark, as will be manifest, is peculiarly appropriate to
the different actions and proceedings affecting fraudulent
alienations. We may further state that suits by creditors
against fraudulent debtors or their alienees, form no
exception to the general rule which requires that all the
parties in interest who are in esse shall be brought into
the case.3

§ 108. Joinder of complainants.— Let us first notice the
authorities relating to the joinder of complainants in the
various forms of actions instituted by creditors against
fraudulent alienees. It may be stated as a general propo-
sition that parties who are creditors by several judgments
may join as complainants in an action to reach property
fraudulently alienated by a debtor."1 Such parties

1 Blount v. Costen, 47 Ga. 584. Kan. 331; Chapman v. Banker .v

23 Johns. Ch. (N. Y.) 555. Tradesmen Pub. Co., 128 Mass. t78 ;

3Bowen v. Gent, 54 Md. 555. Com- Gates v. Boomer, 17 Wis. 155; Wall

pare Christian v. Atlantic & N. C. R. v. Fairley, 73 N. C. 464; Reed v.

R. Co., 133 U. S. 241, 10 S. C. Rep. Stryker, 4 Abb. App. Dec. (N. Y.) 26 ;

260. Murray v. Hay. 1 Barb. Ch. (N. 5

4 Buckingham v. Walker, 51 Miss. Elliott v. Pontius, 136 1ml. 641. 35

494 ; Butler y. Spann,: 27 Miss. 234 ; N. E. Rep. 562, 36 Id. 421. In

Sage v. Mosher, 28 Barb. (N. Y.) 287 : Boniaf v. Means, 37 S. C. 520,

Snodgrass v. Andrews, 80 Miss. 472 : 16 S. E. Rep. 537, the courl says : " It

North v. Bradway, 9 Minn. 183; is true, that such a proceeding, called

Dewey v. Mover, 72 N Y. 74 ; Simar a creditor's bill, is usually brought in

v. Canaday, 53 N. Y. 305: Bank- the name of one creditor, for himself

night v. Sloan, 17 Fla. 286; Ballen- and such others as will co in and

tinev. Beall, 4 111 203 ; White's Bank contribute to il xpenses. Bui 1

of Buffalo v. Farthing, 9 Civ. Pro. do not understand that, where several

(N. Y.) 64, 101 N. Y. 344. 4 N. judgment-creditors go on the record

E. Rep. 734; Higby v. Ayres, 14 as plaintiffs, it is a misjoinder oi

2l6

rOINDER OF COMPLAINANTS.

§ 108

possess the same status, and are in pursuit of a com-
mon object against the same fraudulent vendee, and the
embarrassment of a multitude of suits is thereby avoided.
In Robbins v. Sand Creek Turnpike Co.,1 the court
quoted the following language approvingly: "Several
persons having a common interest arising out of the same
transaction or subject of litigation, though their interests
may be seperate, may join in one suit for equitable relief,
provided their interests be not adverse or conflicting.
. . . . And several judgment-creditors, holding different
judgments, may unite in filing a creditors' bill to reach
the equitable interests and choses in action of the debtor,
or to obtain the aid of the court to enforce their liens at
law." ~ And in Powell v. Spaulding,3 the principle is
laid down to the effect that "where there is unity in inter-
est, as to the object to be obtained by the bill, the parties
seeking redress in chancery may join in the same COm-

plaintiffs, of which the defendant
del it i >r, or those win) claim under him,
have any right to complain. The
judgment-creditors do not therehy
inake themselves partners with the
other creditors, or claim that they
have a joint interest in the cause of

action, but that, as creditors, they
are separate and distinct, having an
interest iii common to set aside
fraudulent convej ances of t heir com-
mon debtor, which stand in the way
of t heir being paid, according to their
respective priorities " Hut compare
Veaton v. Lenox, 8 Pet. 123; Seaver
v. Bigelows, 5 Wall. 208. Judgment-
i-i editors cannot thus unite in an
action at law. Sage v. Mosher. 28
Barb. (N. Y.) 288. Compare Carroll
v. Aldrich, 17 Vt. 569. The court de-
cided, in Elmore v. Spear, 27 Ga. 196,
that where a creditor proposed to
reach legal as distinguished from
equitable assets, the suit technically

was not a creditor's bill. Hence a
single creditor was held to he entitled
to institute a suit to reach legal assets,
and if he thereby gained a priority
over other creditors it was said he
could retain this advantage, and was
not forced to divide with the others,
hut was entitled to the control of his
own case, and could not be required
to make other creditors parties to his

bill. See ii 54, 55. Ill States where

the practice prevails that a bill can be
brought by simple contract-creditors,
it has been held that several creditors
can join in one suit. Ruse v. Brom-
berg, 88 Ala. 620, 7 So. Rep. 384.

'34 End. 401. See Hank of Rome
v. Haselton, 1."") H. J. Lea(Tenn.) 216.

-In New Jfork a motion to allow
other judgment-creditors to intervene
is discretionary with the court below.
Whites Bank v. Latching, 101 N. Y.
:;i». 1 N. E. Rep. 7:; I.

3 3 Greene (Iowa) 44:!, 461.

§ 108 JOINDER OF CI >MPL \l\ A\ I S. :\]

plaint and maintain their action together."1 In Brinker-
hoff v. Brown,- Chancellor Kent ruled that different
creditors might unite in one bill, the object of which was
to set aside a fraudulent conveyance of their common
debtor. It was so held also in McDermutt v. Strong,8
Edmeston v. Lyde,4 Conro v. Port Henry Iron Co.,5
Wall v. Fairley,6 and Mebane v. Layton.7 And where a
defendant in two separate bills, brought by different
judgment-creditors to reach the same land, files one
answer to both bills, it seems that he thereby virtually
consolidates the suits, and they may be heard together as
one cause, or as two causes under one style, without
entering any specific order of consolidation.8 In one case
a sheriff, and the judgment-creditor under whose execution
a levy had been made, were allowed to join in a creditors'
bill.0 Each, it was said, had an interest in preventing a
multiplicity of suits, and in closing the matter in a single
.controversy; their interests were in harmony, and in no
respect conflicting, and hence of such character as entitled
them to unite in the suit.10 There is, however, no obli-

1 See Strong v. Taylor School Town- 9 Adams v. Davidson, LO X. V. 309,
ship, 79 Ind. 208; Cohen v. Wolff, 92 315, where the court said: " It was
Ga. 199, 17 S. E. Rep. 1029. In Ham- also objected thai the plaintiffs
lin v. Wright, 23 Wis. 494, the court had no common interest in the
observed that "different judgment- recovery that entitled them to file
creditors may join in one suit against their bill Bach had an interest in
the judgment-debtor and his fraudu- preventing a multiplicity of suits.
lent grantees, though the interests of and havingthis whole matter closed
the latter are separate and distinct, by a single controversy. It could nol
and were not acquired at the same have been done otherwise than by the
time. The object of such a suit is to course adopted ; their interests were
reach the property of the debtor." in harmony with each other, in no

2 6 Johns. Ch. (N. Y.) 139. respect conflicting and were such as
34 Johns. Ch. (N. Y.) 687. entitled them to unite in this suit."
41 Paige (N. Y.) 637. See p 81.

5 12 Barb. (N. Y.) 27. I0 Compare Bates v. Plonsky, 28

673N.C. 464. Bun (N .Y.) 112. See also Dohertj

'86 N. C. 571. v. Holliday, 137 End. 382, 32 \. I'..

8Rogers v. Dibiell, 6 Lea (Tenn.) Rep. 315, 36 Id. 907; Armstrong v.

69. Dunn, 143 End. 133, 41 N. E. Etep. 540.

218

fOINDER OF COMPLAINANTS.

§ 1 08

Ration upon judgment-creditors to join.1 Creditors by
judgment and by decree may unite in one suit,2 but

judgment-creditors and simple contract-creditors cannot
join.3

Where one party is a creditor by judgment and another
by decree, both having acquired liens upon the property
of their debtor which entitle them to similar relief against
an act of the defendant, which is a common injury, they
may join in a bill.4 The general theory upon which
creditors are permitted to unite as complainants is that
they are seeking payment of their judgments out of a
common fund, viz., the property of the debtor ; his fraudu-
lent conduct with reference to his assets affects them all,
and is the subject-matter of investigation. A receiver is
often appointed to reach and take possession of equitable
interests or property fraudulently alienated, and as he can
act equally well for the different creditors, the expense,
delay, and confusion incident to conducting different
suits are avoided.5 A judgment-creditor of a firm who is

Existing and subsequent creditors
may join in a bill to sot aside a con-
veyance. O'Neil v. Birmingham Brew-
ing Co., 101 Ala. 382, 13 So. Rep. .-,70.
While's Bank of Buffalo v. Farth-
ing, 9 Civ. Pro. (N. Y.)64.

'-' Brown v. Bates, 10 Ala. 432.

Bauknight v. Sloan, 17 Fla. 284.
4 ciarkson v De Peyster, :i Paige
N Y. I 320.

See Gates v. Boomer, 1 7 Wis. 455 ;
Eamlin v. Wright, 23 Wis. 491 ; Ruff-
ing v. Tilton, 12 tnd. 259; Baker v.
Bartol, 0 Cal. 483; Pierce v. Milwau-
kee Construction Co., 38 Wis. 253;
Dewej >. Mover, 72 N Y. 71 ; below, (J

I Bin (N. V.i 170 ; Bigby v. Ayres, 14
Kan. 381 , Buckingham v. Walker,
51 Miss. 194. In Smith v. Schulting,

I I Hun i N. Y.) 54, the courl says :
•• The principal issue presented by

this complaint is the invalidity of the
alleged release. It is manifest by the
admissions of the complaint itself,
that unless the release be set aside
there can be no recovery of the in-
debtedness to the several firms. They
have a cOQimon interest, therefore, in
this principal issue, and inasmuch as
the release is, or under t he allegations
of the complaint must be assumed to
be, a joint one, obtained by a common
fraud, there is no reason why all the
parties tu ii may not unite in an action
brought for the purpose of declaring
it void, and setting it aside because of
a common fraud practiced upon them
in obtaining i(. We think it comes
directly within the principle of the
ea>es cited by appellant's counsel,
and although the plaintiff s were un-
connected parties with respect to the

§ io8

JOINDER Of COMP] UNANTS.

also a judgment-creditor of one of the members of the
firm, may sue on both judgments to overturn an assign-
ment.1

Obviously, hostile claimants cannot join in any form of
action,2 and a bill is demurrable where it appears that one
of the complainants has no standing in court, or antago-
nistic causes of action are set forth, or the relief for
which the complainants respectively pray in regard to a
portion of the property sought to be reached, involves
totally distinct questions requiring different evidence and
leading to different decrees. :i

indebtedness to them, they may join
in the suit because there was one con-
nected interest among them all center-
ing in the principal point in issue."
Citing Binks v. Rokeby, 2 Madd. 234 ;
Ward v. Northumberland, 2 Anstr.
469, 477 ; Whaley v. Dawson, 2 Sch.
& Lef . 3 70.

1 Genesee County Bank v. Bank of
Batavia. 43 Hun (N. Y.) 295.

2 See Hubbell v. Lerch, 58 N. Y.
237 ; St John v. Pierce, 22 Barb. (N.
Y.) 362, affi'd in Court of Appeals, 4
Abb. App. Dec. (N. Y.) 140 ; Sedg. &
Wait on Trial of Title to Land, 2d ed.,
§188.

3 Walker v. Powers, 1!)4 U. S. 245.
( umpare United States v. Amer. Bell
Telephone Co., 128 U. S. 352, 9 S. C.
Rep. 90; Merriman v. Chicago, etc. R.
R. Co., 64 Fed. Rep. 550; Emans v.
Emans, 14 N. J. Eq. 114 ; Sawyer v.
Noble, 55 Me. 227. The creditor may
proceed by ancillary proceedings in
any other court of concurrent juris-
diction with the court rendering the
judgment, to remove clouds from the
titles of any property which is deemed
to be subject to the lien of the judg-
ment. Each judgment makes a sepa-
rate cause of action. Scottish-Ameri-
can Mortgage Co. v. Follansbee. 14

Fed. Rep. 125. [n Ostrander v. Weber,
114 N. Y. 101, 21 N. E. Rep. 112, the
court says : " The complaint Bets forth
these several subjects of equitable
jurisdiction, viz: The foreclosure of
chattel mortgages. (Briggs v. Oliver,
68 N. Y. 339; Hart v. Ten Eyck, 2
Johns. Ch. 99; Thompson \. Van
Vechten, 5 Duer. 624 ; Dupuy v.
Gibson, 36 111. 200; Charter v.
Stevens, 3 Denio, 33. ) The determin-
ation of the extent and priority
of various and conflicting lien-, be-
tween creditors under chattel morl
gage and a judgment-credjtor under
levy by execution ; a multiplicity of
actions between such creditors(Super-
visors v. Deyoe, 77 X. Y. 219; N. Y. >v
N. H. H. R. Co. v. Schuyler, 17 N. ^ .
608) and the advantage of a sale ■ •!
property suitable, used and adapted
to a particular business, in lump, and
not in separate parcels, 1<> the end
that the greatest sum may lie realized
for the benefit of all the creditors.
(Prentice v. Janssen, 79N. V. L79 490
Every one of these subjects bus been
held sufficient to maintain an action
inequity. Their combination in one
complaint should not !»■ held i" de-
feat an equity action.'"

220 SUING ON BEHALF OF OTHERS. § 109

g 109. Suing on behalf of others. — Mr. Pomeroy says : l
•• I >ne creditor may sue on behalf of all the other credit-
ors in an action to enforce the terms of an assignment
in trust for the benefit of creditors, to obtain an account-
ing and settlement from the assignee, and other like
relief; also, in an action to set aside such an assignment on
the ground that it is illegal and void; and also one judg-
ment-creditor may sue on behalf of all other similar
creditors in an action to reach the equitable assets, and
to set aside the fraudulent transfers of the debtor. In
all these classes of cases the creditors have a common
interest in the questions to be determined by the contro-
versy.2 The complainant may sue alone or with other
judgment-creditors.3 It is remarked by Nelson, J., in
Myers v. Fenn,4 that " the practice of permitting judg-
ment-creditors to come in and make themselves parties
to the bill, and thereby obtain the benefit, assuming at
the same time their portion of the costs and expenses of
the litigation, is well settled ; " 5 but this intention must
be manifested by suitable averments in the bill ;6 and the
creditor so applying must not have been guilty of laches ; 7
and if, after a finding of a court annulling a fraudulent
preference, other creditors seek to come in as co-com-
plainants, they may be allowed to do so, but their de-
mands will be postponed in favor of the original com-

1 Pomeroy's Remedies & Remedial 4 111. 203; Terry v. Calnan, 4 S. C.

Rights, ; 394 See Pfohl v. Simpson, 508.

74 X. Y. 137. Marsh v. Burroughs, 1 Woods,

Greene v. Breck, 10 Abb. Pr. 467, and cases cited.

(N. Y 12; Brooks v. Pock, 38 » 5 Wall. 207.

Barb. (N. Y.) 519; Innes v. Lansing, 7 B Compare strike v. McDonald, 2

Paige (N. ST.) 583;Conro v. Port Eenry 1 1 . & < ! . (Md.) 192 ; Shand v. Hanley,

Iron Co., 12 Barb. (N.Y.) 59; Hammond TIN. Y. 324: Barry v. Abbot, 100

-. Budson River I. & M. Co., 20 Barb. Mass. 396; Neely v. Jones, 16 W.Va.

(N. Y) 878 : I Ihewetl \ Moran, 17 625.

Fed. Rep. 820; Ponsford v. Bartley, ' Burl v. Eeyes, 1 Flipp, 72.

2 Johns. & II. 736; Ballentine v. Beall, ' See Flash v. Wilkereon, 22 Fed.

Rep. 689.

§ I IO "AND OTHERS." 22]

plainant.1 Where an action is brought in aid of an
assignment to subject to it property fraudulently diverted,
it can be prosecuted by any creditor whether he has
obtained a judgment or not."

Stockholders may sue in the right of the corporation
where the latter refuses to proceed ; :? but where there is
unreasonable delay in bringing the suit, the cause of action
may be defeated by the application of the doctrine of
equitable estoppel.4 " Where one incurs expense in
rescuing property belonging to many, a court of equity
has power unquestionably to direct that the expenses so
incurred shall be paid from the common fund."1

§ no. "And others." — It is a mistake to suppose that the
statute of Elizabeth only avoids deeds and conveyan.
coming within its exact provisions as to creditors. The
statute is much broader in its operation.'5 It enacts that
every conveyance made to the end, purpose and intent to
delay, hinder, or defraud creditors and others of their just
and lawful actions, etc., shall be void. " It extends not
only to creditors, but to all others who have cause of action
or suit, or any penalty or forfeiture ; " and, as elsewhere
shown, embraces claims for slander, trespass, and other
torts.7 The claimant may not come within a sharply
defined meaning of the word "creditor," but he may

1 Smith v. Craft, 11 Biss. 340. Merwin v. Richardson, 52 Conn.

- Spelman v. Freedman, 130 N. Y. 223, 237.

421, 29 N! E. Rep. 765; Maass v. 6See § 16. Tyler v. Tyler, 136 Dl.

Falk, 146 N. Y. 34, 40 N. E. Rep. 504; 536, 21 N. E. Rep. 616.

Abegg v. Bishop, 142 N. Y. 286, 36 ' Gebhart v. Merfeld, 51 Md. 325.

N. E. Rep. 1058. See Cooke v. Cooke, 43 Md. 523 ;

'Taylor v. Holmes, 127 U. S. 492, ton v. "Wheaton, 1 Am. Lea. Cas. 42,

8 S. C. Rep. 1192 ; Ha wes v. Oakland, notes; Jackson v. Myers, L8 Johns

104 U. S. 450; Greaves v. Gouge, 69 (N. Y.) 425; Lillanl v. McGee, 4 Bibb.

N. Y. 157; Wait on Insolvent Corps. (Ky.) 165; Lowry v. Pinson, 2 Bailey's

§ 74. (S. C.) Law. 324, 328, and other i

" 4 Sheldon Hat Blocking Co. v. there cited ; McKenna v. Crowley, 16

Eickemeyer Hat Blocking Machine K. I. 366, 17 AH. Rep. 354.
Co., 90 N. Y. 607.

SURETY

§ III

maintain his standing " in the equity of creditors." ' So in
Feigley v. Feigley,2 the court say: "The statute seems
to design to embrace others than those who are strictly
and technically creditors ; and if, under such a compre-
hensive clause as 'creditors and others,' a wife, who has
been made the victim of her husband's fraud, is not to be
included, we are at a loss to ascertain to whom else it was
designed to relate."3 Then the principle that a volun-
tary post-nuptial settlement made by a person indebted is
prima facie fraudulent, as to creditors, applies as well in
behalf of the representatives of a deceased partner as of
general creditors;4 and a partner who liquidates firm
judgments stands in the position of a creditor with regard
to fraudulent alienations of his co-partner.5

§ in. Surety. — Sureties on an appeal bond may be sub-
rogated to the rights of the judgment-creditor, to bring a
creditor's action to set aside fraudulent deeds0 even

1 Shontz v. Brown, 87 Pa. St. 131.
7 Md. 561.

Welde v. Scotten, 59 Md. 72.

Conveyance to defeat alimony. — In
Bailey v. Bailey, 61 Me. 363, the court
very properly ruled that if an estate
was conveyed to prevent the enforce-
ment of a decree awarding alimony,
or other proper aid, such conveyance
waH fraudulenl as to the wife and
mighl I"- avoided. It was contended
on tin- part of the husband that a
person in the situation of the wife
could not he regarded as a creditor so
a- to .Mine within the statutes of
Elizabeth relating to fraudulenl con-
veyances. The courl derided, how-
ever, that t be statute covered creditore
mul others, ami cited Livermore v.
Boutelle, 1 1 Gray | Mass. 31 ;. a simi-
lar case, in which the courl said : " If
-he was not a creditor she wae of

the other- whose JUSI and lawful

actions, suits, and reliefs would be
delayed, hindered, or defeated by such
conveyance." See Green v. Adams,
59 Vt. 602, 10 Atl. Rep. 742 ; Foster v.
Foster. 56 Vt. 546 : Burrows v. Purple,
107 Mass. 428; Morrison v. Morrison.
49 N. H. 69; Seott v. Magloughlin,
133 111. :i(i, 24 N. E. Rep. 1030. In
Tyler v. Tyler, 126 111. 536, 21 N. E.
Rep. 616, the court says : "If the wife
be not, technically, a 'creditor.' she
surely conies within the language
' ot lnr persons,' and she is, obviously,
as much injured by Buch ;i convey-
ance as any creditor can he." This
language was used in a case wheie a

busband conveyed property to defeat
a claim for maintenance.

Alston v. Kowles, 13 Fla. 118.

Swan v. Smith, 57 Miss 548.

S,e Lewis v. Palmer, 28 N. Y. 271 :
Hinckley v. Kreitz, 58 N. Y. 590.

I 12

I \ ECUTORS AND A.DMINISTRA1 i

though the principal informed the sureties of the fraud
before they became bound.1 Sureties may enforce their
rights in the creditor's name if their interests require it,:;
for "a surety who pays a debt for his principal is entitled
to be put in the place of the creditor, and to all the means
which the creditor possessed to enforce payment against
the principal debtor."" It maybe here recalled that a
surety is a creditor of the principal obligor, and of his
co-sureties from the time the obligation is entered into,1
and that a conveyance by a surety for inadequate con-
sideration to defeat a contemplated liability for contribu-
tion to a co-surety will be set aside."' A person who pays
a debt as security for a firm becomes a creditor of the
firm, and is not entitled to any greater rights than simple
contract creditors.6

§ 112. Executors and administrators. — Ordinarily an
executor or administrator will not be allowed to impeach
the fraudulent conveyance of his testator or intestate.
Like the heirs, he is bound by the acts of the deceased.7

1 Martin v. Walker, 12 Hun (N. Y.)
53.

2Townsend v. Whitney, 75 N. Y.
425 ; affi'g 15 Hun (N. Y.) 93. Com-
pare Cuyler v. Ensworth, 6 Paige (N.
Y.) 32 ; Speiglemyer v. Crawford, 6
Paige (N. Y.) 254.

3 Lewis v Palmer, 28 N. Y. 271.
See Wads worth v. Lyon, 93 N. Y.
214 ; Shutts v. Fingar, 100 N. Y. 543,
3 N. E. Rep. 588.

4 Pennington v. Seal, 49 Miss. 525 :
Williams v. Banks, 11 Md. 242 ; Sex-
ton v. Wheaton, 1 Am. Lea, Cas. 37 :
Rider v. Kidder. 10 Ves. 360. See
§90.

5 Pashby v. Mandigo, 42 Midi. 172.

6 McConnel v. Dickson. 43 111. 99.
Chief -Justice Thurman said, in a case
in Ohio: "A surety against whom
judgment lias been rendered, may,

without making payment himself,
proceed, inequity against his princi-
pal, to subject the estate of the latter
to tlie paymentof thedebt." Hale v.
Wetmore, 4 Ohio St. 600. See Mc-
Connel] v. Scott, 15 Ohio. 101 ; Borsey
v. Heath, 5 Ohio, 354; Stump v.
Rogers, 1 Ohio, 533.

1 Blake v. Blake. 53 Miss. 193:
Merry v. Fremon, 11 Mo. 522 ; /.<>ll \.
Soper. 75 Mo. 462 ; Davis v. Swanson,
54 Ala. 277; George V.Williamson, 26
Mo. 11)0; Loomis v. Tillt. 16 Barb. (N.
Y. ) 545 ; Van Wickle v. Calvin. 2:'.
La. Ann. 205 : Chofceau v. Jones, 1 1
111. 319; Snodgrass v. Andrews, 80
.Miss. 472 ; Peaslee \ . Barnaj , 1 D.
Chip. ( Yt.) 331 : Bawes v. Loader,
Y'elv. 196; Livingston v. Livingston,
3 Johns. Ch. (N. Y.) L48 ; Estes v.
Eowland, 15 R. I. 128 ; Burton v.

224 EXEC1 rORS WI» ADMINISTRATORS. §112

•• As a party to a fraudulent conveyance cannot allege
its illegality, with a view to its avoidance, so neither can
his heirs nor representatives coming in as volunteers,
and standing, as it were, in his shoes."1 This language
is employed in Rhode Island : " If the deceased has
conveyed his estates away in fraud of his creditors, the
creditors who have been defrauded are the proper parties
to prosecute the remedy."2 Statutory changes sup-
ported by the tendency of the courts to prevent the
confusion incident to splitting, up the administration of
estates between creditors and personal representatives,
have led to the general establishment of the practice of
permitting and imposing the duty upon executors and
administrators to sue for property fraudulently alienated
by the deceased in his lifetime.3 Thus in New York,
executors and administrators, who could not formerly
effectually impeach the conveyances of the deceased
on the ground that the same were made in fraud of cred-

Farinholt, 8G X. C. 260. An excep- Knight v. Morgan, 2 Barb. (X. Y.)

t i< xi is often recognized to exist inde- 171; Morris v. Morris, 5 Mich. 171;

pendent of statute where the estate is McLane v. Johnson, 43 Vt. 48 ; Parker

insolvent. Clark v. Clough. 65 X. v. Flagg, 127 Mass. 30 ; Bonslough v.

1 1 43, 23 Atl. Rep. 526. Bonslough, 68 Pa. St. 495 ; Bushnell v.

■McLaughlin v. McLaughlin, 16 Bushnell, 88 Ind. 403 ; Cross v. Brown,

Mo. 342. See Hall v. Callahan, 66 51 N. H. 486; also note to Ewing v.

Mo. 316 ; Beebe v. Saulter, S7 111.518: Handley, 14 Am. Dec. 157; Barton v.

< Irawford v. Lehr, 20 Kan. 509 ; Rhem Hosner, 24 Hun (X. Y.) 468 ; Johnson

v. Tull. 13 [red. Law (X. C.) 57. It v. Jones, 79 Ind. 141; Holland v.

has been held in New York, thai a Cruft, 20 Pick. (Mass.) 321 ; Martin v.

surrogate had no jurisdiction to deter- Bolton, 75 Ind. 295; German Bank

mine the validity of such a transfer, v. Leyser, 50 Wis. 258, 6 N. W. Rep.

Richardson v. Root, 19 Hun (X. Y.) 800; Garner v. Graves, 51 Ind. 188;

17.;; Barton v. Hosner, 24 Hun iX. Forde v. Exempt Fire Co., 50 Cal.

Y. i 168. 200 ; Norton v. Norton, 5< lush. (Mass.)

>. Howland, 15 R. I. 129, 23 524: Sullice v. Gradenigo, 15 La.

Ail. Rep. 624. Ann. 582 ; note to Hudnal v. Wilder,

Martin v. Root, 18 Mass. 222: 17 Am. Dec T44, 4 McCord's S. < !.

Welsh v. Welsh, 105 Mass. 229; Gib- Law, 294; Bassetl v. McKenna, 52

boh \. Crehore, 5 Pick. (Mass) L54 ; Conn. 437.
Hills \. Sherwood, 18 < !al. 392 . Mc-

§112

EXECUT< >kS AND ^DMINIS fRATO

itors, are now enabled to do so by statute.1 This new
remedy, however, is not exclusive. Formerly in that
State a creditor could bring an action only when the per-
sonal representative was in collusion with the fraudulent
vendee, against the personal representative and vendee
to have the covinous transfer set aside, and the property
applied as assets,2 but by recent legislation 8 the right to
sue is extended, and it is not necessary that the plaintiff
should reduce his claim to judgment. The action must
be brought on behalf of himself and other creditors, bul
the absence of such allegation is waived if not taken
by demurrer or answer.4 In Wisconsin the cred-

'N. Y Laws, 1889, ch. 487. See
Moseley v. Moseley, 15 N. Y. 336 ;
Bate v. Graham, 11 N. Y. 237 ; Barton
v. Hosner, 24 Hun (N. Y.) 469; Bry-
ant v. Bryant, 2 Rob. (N. Y.) 612:
Southard v. Benner, 72 N. Y. 427 ;
Mc Knight v. Morgan, 2 Barb. (N. Yr.)
17! ; Lore v. Dierkes, 19 J. &. S.
(N. Y.) 144. National Bank of West
Troy v. Levy, 127 N. Y. 549 ; Lichten-
berg v. Hartf elder. 103 N. Y. 302.
Where the deed was not delivered
till after the death of the testa-
tor his executor can bring no
action to set it aside. Rosseau v.
Bleau. 131 N. Y. 177, 30 N. E Rep.
52 : Putney v. Fletcher, 148 Mass. 247,
19 N. E. Rep. 370. In Massachusetts
the remedy is exclusive. The same
rule applies in Indiana. Ind. R. S.
1881. £2333. SeeGalentine v. Wood,
137 Ind. 532. 35 N. E. Rep. 901.

2 See Phelps v. Piatt, 50 Barb. (X.
Y.) 430 ; Sharpe v. Freeman, 45 N. Y.
802; Bate v. Graham, 11 N. Y. 237 ;
Barton v. Hosner, 24 Hun (N. Y.) 468.
See §§ 114. 115.

:;N. Y. Laws, 1889, ch. 487. In
National Bank v. Levy, 127 N. Y. 551,
the court says: "The plaintiff as a
creditor, on the refusal of the admin-

i5

istrator to bring the action, was al
liberty as it did to do so, making her
a party defendant with a view to the
same equitable relief which ma\ have

been awarded if she had I n the

party plaintiff. (Bate v. Graham, 11
N. Y. 237; Greaves v. Gouge, 69 N.
Y. 154 ; Grouse v. Frothingham, 97 N.
Y. 105)."

4 Brown v. Brown, 83 Hun | X. Y. i
162,31 N. Y. Supp. 650; Nat. Trades
men's Bank v. Wet more, 124 N. Y.
241, 26 N. E. Rep. 248. Tn Prenl
Bowden. 145 N. Y. 342, 10 N. E Rep.
13, Finch, J., says: "Our whole
theory of administration rests upon
the idea that when a man dies his
estate shall answer to Ids creditors
equally and without preference, and
the surrogate is purposely mad.' mas.
ter of the situation to prevenl in-
equality of payment. This plaintiff
could undoubtedly have maintained
an action for the benefil of all the
creditors, alter refusal of the repre-
sentatives, to se1 Hds conveyance
aside, bu1 instead of thai she
ing, by an ordinary creditor's action,
to secure payment of her own debt,
regardless of what may happen to
others."

226 EXEC! rORS AND ADMINISTRATORS. § 112

itor may, in a proper case, 'compel the executor or
administrator to bring the action, or bring it him-
self.1 In Pennsylvania it is said that the admin-
istrator's intervention would not seem to be neces-
sary if the creditors prefer to proceed for themselves.3
In Wisconsin the insufficiency of the estate to pay debts
must first be ascertained by the county court.3 This pre-
requisite of a formal establishment of the debt as already
shown4 is not now universally conceded to be essential.
The Supreme Court of the United States asserts'' that
the authorities are abundant and well settled, that a
creditor of a deceased person has a right to go into a
court of equity for the discovery of assets, and to secure
the payment of the debt ; and the creditor, when there,
would not be turned back to a court of law to establish
his debt. The court being in rightful possession of the
cause for a discovery and account, will proceed to a final
decree upon all the merits.0 So debts which are made
by statute a lien upon lands of a deceased debtor, will
furnish a creditor at large, the correctness of whose
claim is acknowledged by the executor, a standing in
court to file a creditors' bill to set aside conveyances
alleged to have been made bv the testator in fraud of
creditors.7 In California the rule is recognized that a
creditor may bring the action, if the executor refuses, and
that no request is necessary where the executor is also
the alleged fraudulent grantee.8 The action can only

'German Bank v, Leyser, 50 Wis. S. 165, IIS. C. Rep. 525, dissenting

6 V W. Rep. 809. See Andrew opinion of Brown, J,

\. Hinderman, 71 Wis. lis, :;r, x. w. 'Thompson v. Brown, 4 Johns.

Rep 824. ' Ch. (N. Y.) 619. See ? Tit.

Appeal of Fowler, sr pa. si 154. 'Haston v. Castner, 31 X. J. Eq.

German Bank v. Leyser, 50 Wis. 697, and cases cited. Sec Jones v.

BN. W. Rep. 809 Davenport, UN. J. Eq. 34, 13 Atl.

79. Rep. 652. See §87.

Kennedy v. Creawell, 101 U.S. 'Emmons \. Barton, 109 Cal. 062,

645. See Johnson \ Powers, 189 U. 12 Pac. Rep. 303.

£ I 13 EXECUTORS VND ADMINISTRATE >RS. 2 2J

be brought by the executor where there is an insufficiency
of assets in his hands.1

The creditor's bill in Kennedy v. Creswell 2 was filed
against an executor and devisees, and alleged that the
complainant held the testator's notes for $1,2,000; and
recited that the personal assets were insufficient to
meet the debts, and that the executor was paying some
of the claims in full, and leaving others unsatisfied. The
creditors prayed for an accounting of the personal
estate, a discovery of the real estate, and an application
of all the property to the payment of the debts. A
plea was interposed setting forth that the executor had
assets sufficient to pay the complainant and all other
creditors. A replication was filed and proofs taken,
which sustained the allegations of the bill, and demon-
strated the falsity of the plea. The court decided that
the complainant was entitled to a decree pro confcsso':'
and the defendant could not claim the right to answer
after interposing a false plea ; that the admission of the
executor that he had assets, could "be taken against
him for the purpose of charging him with a liability," but
it could not "serve him as evidence to prove the truth
of his plea."

§ U3- — The personal representative may render himself
individually liable to creditors for a failure to recover prop-
erty fraudulently alienated by the testator or intestate,4

'Field v. Andrada, 106 Cal. 107, Smith, 4 Texas, 411. See Sawyer v.

39 Pac. Rep. 323; Smith v. N. Y. Thayer, 70 Me 340; O'Connor v . Gif-

Life Ins. Co., 57 Fed. Rep. 133; to ford, 117 N . Y. 275, 22 N. E. Rep.

same effect, McCall v. Pixley. 48 1036. In Matter of Hart, 60 Hun (N

Ohio St. 379, 27 N. E. Rep. 887. Y.)516, L5 X. V. Sup,.. 239, the courl

2 101 U. S. 641. See Johnson v. say: "It appeared thai Archibald

Powers. 139 U. S. 156. Johnston, who died in August,

3 See Dows v. McMichael, 2 Paige was for years prior to his decease insol-
(N. Y.) 345. vent, and thai the administrators had

4 Lee v. Chase, 58 Me . 436 ; Cross v . knowledge of his insolvency . H fur
Brown, 51 N. H. 488; Danzey v. ther appeared that in 1886, for a nom-

!28

1 XEi UTORS AND ADMINISTRATORS.

113

and he should include such property in the inventory,1
unless, of course, he has no knowledge of it.2 The per-
sonal representative, as he stands for creditors when so act-
ing, can only attack fraudulent transfers in cases where the
estate is insolvent,'5 and with a view to recover a sum suffi-
cient to satisfy the creditors. The complaint should allege
that the action is instituted for the benefit of creditors.4
The legislation clothing personal representatives with the
power to appeal to the courts to annul covinous alienations
made by the deceased is often highly salutary in practice.
The concurrent right of the creditor to seek redress is mani-
festly of the utmost importance, for the personal repre-
sentative is usually selected by, or is a near relative of, the
deceased and may, in some cases, be prompted by motives
of friendship or self-interest to shield the parties who have
depleted the estate; and, in some instances, is himself the
fraudulent alienee. Where the personal representatives
sue. a multiplicity of suits is prevented in cases where the
creditors are numerous and the necessity of a judgment

inal consideration, he conveyed to one
Harris an interest in this leasehold
estate, w hich I [arris upon the same
day conveyed to tin' wife of said
Johnston I'm- a like consideration.
Johnston being insolvent at the time
of this conveyance, the same was a
fraud upon his creditors if tin1 Lease
was of any value whatever ; and it
would appear from the transactions
had by the administrators, in respeel
to other interests in this [ease, thai it
was valuable. I rnder these circum-
stances it certainlj was the duty of
the administrators to take proceed-
to recover this property which
Johnston had disposed of in fraud <>f
his creditors. This the administra-
tors, with full knowledge of these
facts, failed to do, and it seems to us

that they arc chargeable with neglect
of duty."

'Minor v. Mead, 3 Conn. 289 ;
Bourne v. Stevenson, 58 Me. 504;
Booth v. Patrick, 8 Conn. 106; And-
russ v. Doolittle, 11 Conn. 283.

Booth v. Patrick, 8 Conn. Kit;.
In Alabama au administrator hassuch
a right to the lands of his intestate as
will enable him to maintain a hill in
equity for the cancellation of a con-
veyance of the lands obtained by
fraud, provided the heirs are made
parties. Waddell v. Lanier, 62 Ala.
347.

I!,-,, v Hess, lit Ind. 2:5s; Pringle
\ . Pringle, ."Hi Pa. St. 281 ; Wall v.
Provident Inst., :J Allen (Mass I '.m.

1 ( rocker v. Craig, 46 Me. 327.

§H4

ASSIGNEE l\ BANKRUPTCY .

or execution is avoided,1 features important to the body
of creditors.3

£114. Assignee in bankruptcy. — An assignee in bank-
ruptcy, under the late bankrupt act, represented the whole
body of creditors, and could in their behalf impeach, as
fraudulent, a conveyance of property by the bankrupt,
whenever the creditors might, by any process, acquire the
right to contest its validity. This rule is of quite general
application.3 It is said, however, in the New York Court
of Appeals,4 that, ''if the assignee should refuse or neg-
lect to sue for and reclaim property fraudulently trans-
ferred, it is abundantly established that the creditors may
commence an action to reach the property, making the
assignee, the debtor, and his transferees parties defendant.
And, in such an action, the property will be administered
directly for the benefit of the creditors."5 It is believed,
however, that it is impossible to reconcile this doctrine

1 Barton v. Hosner, 24 Hun (N. Y.)
471.

* Fletcher v. Holmes, 40 Me. 364.

tin re Collins, 6 Fed. Cases, 114;
Foster v. Hackley, 9 Fed. Cases, 545 ;
Southard v. Benner, 72 N. Y. 427 :
Piatt v. Mead, 7 Fed. Rep. 95; Butcher
v. Harrison, 4 Barn. & Adol. 129 ;
Brackett v. Harvey, 25 Hun (N. Y.)
503 ; Nicholas v. Murray, 5 Sawyer,
320; Trimble v. Woodhead, 102 U. S.
047: Bates v. Bradley, 24 Hun (N. Y.)
84; Doed Grimsby v. Ball, 11 M. &
W. 531; Moyer v. Dewey, 103 IT. S.
301 ; Ball v. Slafter, 20 Hun (N. Y.)
354; Phelps v. McDonald, 99 CJ. S.
298; Glenny v. Langdon, 98 I". S. 28;
Shackleford v. Collier, 6 Bush (Ky.)
149 ; Badger v. Story, 16 N. H. 168 ;
Day v. Cooley, 118 Mass. 527 : Wads-
worth v. Williams, 100 Mass. 126.
The adjudication exempted the debt-
or's property from attachment. W i I
liams v.Merritt, 103 Mass. 184. As to

when an assignee in bankruptcy can-
not overturn a fraudulent convey-
ance, see Warren v. M ly, 122 U.S.

132, 7 S. C. Rep. 1063.

4 Dewey v. Moyer, 72 X. Y. 78;
Crouse v. Frothingham, 97 X Y. 106;
Harvey v. McDonnell, 113 X. Y. 531,
21 N. E. Rep. 695; Spelman v. Freed-
man, 130 X. Y. V21, 29 X. E. Rep. 765.

■• Citing Sands v. ( lodwise, 2 Johns.
iX Y.) 481 ; Freeman v. Deming, 3
Sandf. Cli. (X. Y.) 327 ; Seaman v.
Stoughton, 3 Barb. Ch. (N. Y.) 344 ;
Fori Stanwix Bank \ . Leggett, 51 X.
V. 552 : Card v. Walbridge, 18 Ohio,
41! ; Phelps v. Curts, 80 111. 109;
Francklyn v. Fein. Barn. Ch. 30
First Nat. Bank v. Cooper, 9 X I '■ R
529 ; Boone v. Ball, ' Bush 1 Ky.) 66.
See Bank v. Cooper. 20 Wall. 171;
Sands v. Codwise, I Johns N Y 1
536; Kid. lei- v. Borrobin, 72 X. 5 .
104 : Bates v. Bradley. 24 Bun X Y.)
84.

ASSIGNEE IX BANKRUPTCY

§ 114

with the decisions of the United States Supreme Court,1
for, according' to the latter court, if the assignee in whom
the right is vested neglected to prosecute during the two
years allowed by the act, the right to attack the fraudu-
lent transfer would be absolutely gone.~ The assignee
appointed under the act became vested with the title to
the bankrupt's assets by an assignment from the court,
into whose custody the estate was, in theory of law, in-
trusted. Even a claim in favor of the bankrupt against
a foreign government passed to the assignee. 3 The
assignee is regarded merely as a trustee for creditors.
When his accounts are passed, and he is discharged, the
property not disposed of reverts to the debtor by opera-
tion of law without reassignment.4 The assignee in
bankruptcy takes only such rights as the bankrupt had,
and, in the absence of actual fraud, a general assignment

1 Compare Mover v. Dewey, 108 U.
s. 303; Trimble v. Woodhead, 102
is 649 : Glenny v. Langdon, 98 U.
S. 20 : Lowry v. Coulter, 9 Pa. St.
349; M. Master v. Campbell, 41 Mich.
514; McCartin v. Perry, 39 X. J. Eq.
201 .

'Compare Bates v. Bradley, 24 Hun
(N. V.i s} : Allen v. Montgomery, 48
Miss. 101.

Phelps v. McDonald, 99 U. S. 302;
( Iomega s v. Vasse, l Pet. 195.

'See Dewey v. Mover, 9 Hun iX.
Y 180; Colie v- Jamison, 4 Hun
(N. V. 284 ; Page v. Waring. 76 X.
Y. 4?:;. and cases cited ; Boyd v. 01-
v.-.v, 82 End. 294. In Stewart v. Piatt,
nil r. s. 738, the courl said : " In

Y.itinan v. Savings Institution. !)")

1 '. s 764, we held it to be an estab-
lished rule that, ' excepl in cases of
attachment - aga ins! the property of
the bankrupt within a prescribed time
preceding the commencement of pro-
ceedinga in bankruptcy, and except

in cases where the disposition of prop-
erty by the bankrupt is declared by
law to he fraudulent and void, the
assignee takes the title subject to
all equities, liens or incumbrances,
whether created by operation of law
or by act of the bankrupt, which ex
isted against the property in the hands
of the bankrupt.' Brown v. Heath-
cote, 1 Atk. 160; Mitchell v. Winslow,
2 Story, 630; Gibson v. Warden, 14
Wall. 244 ; Cook v. Tullis, is Wall.
332 ; Donaldson v. Farwell, 93 U. S.
631; Jerome v. McCarter, 94 U. S. 734.
He takes the property in the same

• plight and condition ' that the bank-
rupt held it. Winsor v. McLellan, 2
Story, 402." Actual fraud is neces-
sary to give the assignee a standing
in court. Metropolitan Nat. Hank v.
Rogers, 8 C. C. A. 666, 53 Fed. Rep.

770 ; Warren v. M ly, 122 U. S. 138,

7 S ('. Hep 1063; In re Thomas,
15 Fed. Hep. 784.

§115 GENEK \l A.SSIGNE] .

made prior to the assignment in bankruptcy is good

against the assignee.1

§ 115. General assignee. — It is a general rule of law that
a person cannot, by any voluntary act of his own transfer
to another a right which he does not himself possess. A
fraudulent transfer of property by a debtor, made with
intent to defeat creditors, is, as we shall presently show, con-
clusive upon the debtor so that he cannot himself reclaim
it. No logical theory can be easily framed upon which it
can be said that an assignment, wholly voluntary on tin-
debtor's part, vests in his assignee the right to attack fraud-
ulent transfers." Consequently, it has been decided that
the right to impeach or set aside a mortgage which is
fraudulent and void as against the creditors of the mort-
gagor, did not pass to an assignee of the mortgagor, by a
voluntary general assignment in trust for the benefit of
creditors, subsequently executed, and unaffected by any
statute in force at the time.3 Still, there are many States
in which an assignment in insolvency or a voluntary assign-
ment is held to vest in the assignee the right to avoid ;i
conveyance made in fraud of creditors ; and in some States
the power is statutory.4 Such an assignee may also set

1 In re Arledge, 1 Fed. Casey, 1127. 4Hallo\vell v. Bayliss, in Ohio Si

'Pillsbury v. Kingon, 31 N. J. Eq. 537 ; Oil.hs v. Thayer, •', Cush (Ma

619; Brownell v. Curtis, 10 Paige (N. 30; Blake v. Sawin, L0 Allen (M

Y. ) 210 ; Storm v. Davenport, 1 Sandf. 310; Freeland v. Freeland 102 Ma

Ch. (N. Y.) 135; Sere v. Pitot, G 475 ; Spring v. Short, 12 Weeklj Dig.

Cranch, 332; Estabrook v. Messer- (N. Y ) 360, affi'd 90 N. Y. 544 ; Lynde

smith, 18 Wis. 545; Browning v. v. McGregor, 13 Allen (Mass.) 172;

Hart, 6 Barb. (N. V.) 91 ; Leaeli v. Waters v. Dashiell, 1 Md. 155. Simp-

Kelsey, 7 Barb. (N. Y.) 466 ; Maiders son v. Warren, 55 Me. L8; Shipman

v. Culver's Assignee, 1 Duv. (Ky.) v. iEtna Ins. Co., 29 Conn. 245; Shirley

164; Carrv. Gale, 3Woodb.& M. 68; v. Long. 6 Rand. (Va.) 735; Clough v.

Flower v. Cornish, 25 Minn. 473, 1 Thompson, 7 Gratt. (Va.) 26 ; Staton

Am. Insolv. Rep. 184; Day v. Cooley, v. Pittman, 11 Gratt. (Va 99; Doyle

118 Mass. 527; GofT v. Kelly, 74 Fed. v. Peckham, u R. I. 21 : Southard \

Rep 327. Benner, 72 X. Y. 421. McMahon v.

^ Flower v. Cornish, 25 Minn. 473. Allen, 35 N. Y. 403; Moncure \ Han

232

GENERAL ASSIGNEE.

§ 115

aside a mortgage or other conveyance which is void as to
creditors, for want of registration or other defects.1 And
in some cases it is held that the assignee may affirm such
fraudulent conveyance, and thereby estop creditors from
impeaching it.2 In New York creditors cannot assail a
fraudulent alienation so long as there is a valid assign-
ment in force. The right of attack is vested by statute
in the assignee.8 But a creditor can, where the assignee
refuses to act, bring an action in behalf of the whole body

son. 15 Pa. St. 385 ; Tarns v. Bullitt,
35 Pa. St. 308; Matter of Cornell, 110
N. Y. 360, 18 X. E. Rep. 142. See 22
A Hi. L. J. 60, 81 ; Kilbourne v. Fay,
29 Ohio St. 264. In Walton v. Ely,
53 Kan. 260, 36 Pac. Rep. 332,
the court says: " This question has
been practically decided in the affirma-
tive in Chapin v. Jenkins, 50 Kan.
385, 31 Pac. Rep. 1084. In that
case, the difference between com-
mon-law and statutory assignments
was recognized. Under the former,
the relations of the parties were
controlled by contract, and the
assignee had no (tower except such
as was conferred upon him by
contract. As he stood in the shoes of
the assignor, he could assert no claim
to property fraudulently conveyed
which the assignor could not himself
ha\c asserted As has been decided
in 1 he cited case, our statute; changes
the effect of an assignment, and also
the powers of the assignee, as well as
his relations to the creditors. While
the assignment, in the first instance,
is the act of the assignor, thereafter
the control and disposition of the-
property, and also the powers and

duties of the assignee, are regulated

by statute, and no direction or Limita-
tion of the assignor is of any effect.
Undei our statute, the assignee is
made the representative of all the
creditors, and it is his duty to protect
the estate and defend the property as-

signed against adverse and unjust
claims." Mansfield v. First Nat.
Bank, 5 Wash. 665 ; Brown v. Farm-
ers' & M. Banking Co., 36 Neb. 434 ;
Red River Valley Bank v. Freeman, 1
N. Dak. 196 ; Moorer v. Moorer,
87 Ala. 545 ; Starks v. Curd, 88 Ky.
164. It has been held in some States
that if the assignee refuses to bring
the action, the creditor may bring it.
Kalmus v. Ballin, 52 N. J. Eq. 290, 28
Atl. Rep. 791 ; Lee v. Cole, 44 N. J. Eq.
31 S, 15 Atl. Rep. 531.

'Rood v. Welch, 28 Conn. 157;
Hanes v. Tiffany, 25 Ohio St. 549 ; hi
re Leland, 10 Blatchf. 503 ; Barker v.
Smith, 12 N. B. R. 474. But see
Williams v. Winsor, 12 R. I. 9; Dor-
sey v. Smithson, 6 H. & J. (Md.) 61 ;
Van Heusen v. Radcliff, 17 N. Y. 580 :
Ball v. Slaften, 98 N. Y. 622. He may
set up the fraudulent character of the
conveyance or mortgage when it is
attempted to he enforced against him.
Hutchinson v. First Nat. Bank, 133
Ind. 271, 30 N. E. Rep. 952.

Butler v. Hildreth, 5 Met. (Mass. |
49 : Freeland v. Freeland, 102 Mass.
477. But see Matter of Leiman, 32
Md. 225 ; Dugan v. Vattier, 3 Blackf.
(Ind.) 245.

3 Loos v. Wilkinson. HON. Y. 209,
18 N. E. Rep. 99 ; Spring v. Short, 90
N. Y. 538 ; Crouse v. Frothingham,
97 N. Y. 105, 113: Laws of 1858,
Chap. 314. In matter of Cornell, 110
X. Y. 360, the court says: "Under

§ I 15 GENERAL ASSIGNEE.

of creditors, in aid of the assignment, where the instru-
ment is valid as a whole, but certain of its provisions tend
to deprive the creditors of property to which they are
justly entitled.1 The right to bring such an action is not
revived by the discharge of the assignee.'-' The right to
the cause of action and to the proceeds vests exclusively
in him; after his appointment the judgment-creditors can-
not bring an independant action.3 In Minnesota it was
held that a receiver in insolvency can bring suit to set
aside fraudulent conveyances, and that it is not necessary
that the claims of the creditors on whose behalf he sues
should first have been reduced to judgment.4 It is also
held in the same State that it is to be presumed that the
assignee represents creditors when he sues, and that a
purchaser from the assignee may maintain a suit to avoid
a fraudulent mortgage affecting the property purchased.5
Of course the creditor may be estopped from attacking
the assignment by accepting benefits under it.,; It has
been asserted that where the assignee is given by statute
full power to attack fraudulent transfers, stronger reasons
for setting aside an assignment on the ground of fraud
must be shown.7

the act chapter 314 of the Laws of ' Voorhees v. Carpenter, I".'? Ind.

1858, an assignee for creditors, under 300, 26 N. E. Rep. 838.

a general assignment, may assail 3 Passavant v. Bowdoin, 60 linn,

fraudulent transfers of property made (N. Y.) 433, 15 N. Y. Supp. 8.

by the assignor prior to the assign- * Chamberlain \. O'Brien, H"> Minn.

ment, by action to set them aside. 80, 48 N. W. Rep. 447.

(Southard v. Benner, 72 N. Y. 424; 5 Shay v. Security Bank, •',!) N. W.

Ball v. Shaften, 98 Id. 622 ; Lichten- Rep. 920.

berg v. Herdtfelder, 103 Id. 306). Nor " Groves v. Rice, 1 18 N. Y. 22

do we entertain any doubt that it 42 N. E. Rep. 664; Mills v. Parkhurat,

would be his duty so to do in a proper 126 N. Y. 89, 26 X. E. Rep. mil.

case, and that his negligent omission Cerf v. Wallace, 14 Wash. 249, 252,

of this duty would constitute a breach 44 Pac. Rep. 264.

of trust. \ln re Colin, 78 N. Y. 248) " 'Batten v. Smith, 62 Wis. 92, 96,

■Spelmanv. Freedman, 130 N. Y. 22 N. W. Rep. 3*2. Bui see Krura-

421, 29 N. E. Rep. 765; Abegg v. dick v. White. 107 Cal. 37, 39 Pac.

Bishop, 142 N. Y. 286, 36 N. E. Rep. Rep. 1060; Green v. Wallis Iron

1058; Maassv. Falk, 146 N. Y. 34, 40 Works, 49 N. J. Eq. 18, 23 Ad. Rep.

N. E. Rep. 504. 498.

234

RE( EIVERS.

§ 116

^ 116. Receivers.— Under the practice in New York, and
in some of the other States, the receiver of a debtor may
impeach fraudulent transfers,1 and disaffirm fraudulent
dealings of the debtor.'-' The appointment confers upon
him the right to set aside all transfers made by the debtor
to defraud his creditors, which the creditors themselves
could have avoided1' In Bostwick v. Menck,4 it was
decided that the right of a receiver representing creditors,
and acting in their behalf, was no greater than that of the
creditors themselves ; that the legal and equitable right of
the creditors was limited to securing a judgment setting
aside transfers as fraudulent only in so far as might be
necessary to satisfy debts ; and that, when this was accom-
plished, the receiver's duties, and consequently his pow-
ers, and his right to act further in behalf of the creditors,
ceased as to the property that had been conveyed by the
debtor.5 The receiver stands in the place of the judg-
ment-creditor.6 In Olney v. Tanner,7 after a careful

1 Osgood v. Laytin, 48 Barb. (N. Y.)
Mi:; ; atfi'd •-» Abb. Pr. X. S. (X. Y.) 9 ;
Hamlin v. Wright, ',»:! Wis. 492; Bar-
ton v. Bosner, .'I Hun (N. Y.) 469 ;
Porter v. Williams, 9 X. Y. 142 ; Un-
derwood v. Sutcliffe, 77 N. Y. 62;

Erdall v. Alw 1, 7!) Wis. 1.47X.W.

Rep. 1 124 : Dunham v. Byrnes. 36
.Minn. L06, 30 X. W. Rep. 402. In
Mandeville v. Avery, 124 X. Y. 385,
'.'»■> N. E. Rep. 9.11, Brown. J., said :
"A receiver appointed in supplemen-
tary proceedings under the Code is
rested \\ itu tin- legal title to all I he
personal property of the judgment-
debtor, and has the further right to
prosecute actions to sel aside all
transfers of property made by the
debtor to defraud his creditors." s. P.,
Stephens v. Perrine, 143 N. ^ l?(i. 39
N. I-'. Rep. i l. See I Leineman v. I [art,
55 Mich. 84, 80 N. \V. Rep. r92

Pittsburg < iarbon < !o. v. McMil-
lm. L19N. Y. 46, 38 N. E. Rep. 530.

A new receiver (Bowden v. John-
son, 107 U. S. 264, 2 S. C. Rep. 246). or
an assignee of a bankrupt, may be
substituted as plaintiff in the appellate
courts.

4 40 N. Y. 386. In Stephens v. Per-
rine, 143 X. Y. 483, 39 N. E. Rep. 11,
the courl say : '• It has been decided
by this courl that such a receiver can
maintain an action of this nature
where the assignment or mortgage is
void on the ground that it was exe-
cuted for the purpose of defrauding
creditors, and we think the same prin-
ciple reaches the case where the
mortj;a.i;e is void because it was not
tiled and there was no change of
possession."

See .Manley v. Rassiga, 13 Hun
(N. Y.i 290.

' Kennedy v. Thorp. .".1 N. Y. 17 1.
See Olney v. Tanner, 18 Fed. Rep. 636.

■ 10 Fed. Rep. 113; affi'd 18 Fed.
Rep. 636.

§ u6 i i\ ii;s. 235

examination of the authorities,1 the conclusion is reached
that a receiver appointed in supplementary proceedings
cannot be held to be vested by virtue of his appointment
\vith the title to property fraudulently conveyed by the
judgment-debtor. The court will refuse to put him sum-
marily in possession of the property covinously alienated ;
it will not authorize him to meddle with it, and will rel
to protect him in so doing. The receiver may, as we
have seen, assail the covinous transfer by an action.'
Grover, J., said, in Bostwick v. Menck:3 "He (tin-
receiver) acquires no right to the property (fraudulently
assigned), by succession to the rights of the debtor ;
.... no rights (2. e. of property) other than those of
the debtor are acquired. He does not acquire the legal
title to such property by his appointment. That is con-
fined to property then owned by the debtor ; and the
fraudulent transferee of property acquires a good title
thereto as against the debtor, and all other persons, except
the creditors of the transferrer. The only right of the
reciver is, therefore, as trustee of the creditors. The latter
have the right to set aside the transfer and to recover the
property from the fraudulent holder ; and the receiver is,
by law, invested with all the rights of all the creditors
represented by him in this respect."4

'See Rodman v. Henry, 17 N. Y. 647; Moyer v. Dewey, 103 I". S. 301.

484; Lathropv. Clapp, 40 N. Y. 333; Where there is an assignee a receiver

Brown v. Gilmore, 16 How. Pr. (N.Y.) has no standing. Olney v. Tanner, 18

527; Teller v. Randall, 40 Barb. (N. Fed. Rep. 637.
Y.) 242; Field v. Sands, 8 Bosw. ■ i<» X. Y. 383.

(N. Y.) 685; Bostwick v. Menck, 'In New York the receiver takes

40 N. Y. 383; Becker v. Torrance, 31 title to the debtor's real property bj

N. Y. 637 ; Mandeville v. Avery, 124 virtue of his appointment. Cooneyv.

N. Y. 376, 26 N. E. Rep. 951. I loouey, 65 Barb. (N. Y 525 : Fessen-

- It is only through the instrumen- den v. W Is, 3 Bosw. V ST.) 556;

tality of an asssignee. that a creditor Bostwick v. Menck, 10 N. Y. 384 ; tin-
can reach property fraudulently derwood v. Sutcliffe, 77 N. Y. 63.
transferred by a bankrupt prior to ad- See Stephens v.Meriden Britanni
judication. Olney v. Tanner, 18 Fed. 13 App. Div. (N. Y 372, 13 N. Y.
Rep. 637 ; Glenny v. Langdon, 98 U. Supp. 226.
S. 20 ; Trimble v. Woodhead, 102 U. S.

236

RECKIVEKS.

Il6

In New Jersey, a receiver, appointed by virtue of the
statute providing a method for discovering the concealed
property of a judgment-debtor,1 can, in his official charac-
ter, exhibit a bill in chancery to annul sales of such prop-
erty or encumbrances upon it, on the ground that such
sales or encumbrances are in fraud of creditors. ~ In the
case first cited, Parker v. Browning,3 is quoted with appro-
val. In the latter case, in speaking of the course to be
taken, when property, which is claimed by a receiver
appointed by the chancellor, is in the hands of a third
party, who claims the right to retain it, Chancellor Wal-
worth says : " The receiver must either proceed by suit,
in the ordinary way, to try his right to it, or the com-
plainant should make such third person a party to the
suit, and apply to have the receivership extended to the
property in his hands."4 A sequestrator or receiver of
personal property and rents appointed in an action may,
under the direction of the court, test a fraudulent aliena-
tion of property,5 though this question is much confused
in New York.1'

1 Revision of 1877, p. 393.

2 Miller v. Mackenzie, 29 N. .1. Eq.
292. But compare Higgins v. Grilles
heiner, 2G N. J. Eq. 308.

s I'uige (N. V.i 1588.
'See Carr v. Hilton, 1 Curt. C. C.
280 ; Hamlin v. Wright, 23 Wis. 492 ;
Bostwich v. Menck, 4 Daly (N. Y.)
68. Willard, .1.. in Porter v. Wil-
liam-, '.) N. Y. 142, 150, said : "The
ait which the receiver seeks to avoid

in this case was an illegal act of the
debtor. The object of the action is
to set aside an assignment made by
the debtor with intent, as is alleged,
to defraud the creditor under whose
judgment and execution 1 he plaintiff
was appointed receiver, and t be other
creditors of the assignor. Such con-
veyance was void at common law,
and is expressly forbidden by the
1 ami.. h j. void as against the

creditors of the party making it,
though good as between him and his
grantee. The plaintiff, representing
the interests of the creditors, has a
right to invoke the aid of the court to
set aside the assignment. He stands

in this respect, in the same condition
as the receiver of an insolvent corpo-
ration, or as an executor or adminis-
trator, and like them can assail the
illegal and fraudulent acts of the
debtor whose estate be is appointed to
administer."

See Donnelly v. West, 17 Hun (N.
Y.) 564; Foster v. Townshend, 2 Abb.

N . ( '. ( N. Y. ) 29.
6See Foster V. Townshend, 68 X.

Y. 203 : Ogden v. Arnot, 'Jit Hun (N.

Y.) 150; Keeney V. Home Ins. Co., 71

X. Y. 396; Fincke v. Funke, 25 Hun

(X. Y.) 618.

§ 11/

RECEIVERS i IF CORP< (RATIONS.

?37

§ 117. Receivers of corporations. - Receivers of insolvenl
corporations, when suing for portions of the capital, rep-
resent creditors,1 and not the corporation,'' and are
clothed with other rights than those which the corpora-
tion possessed.3 It is a fundamental principle, upon
which the American cases at least proceed, that the capi-
tal of a corporation, especially after insolvency, is a trust
fund for the benefit of creditors.4 The same is true cf

1 Van Fleet, V. C, in Graham lint-
ton Co. v. Spielmann, 50 N. J. Eq.
124, said : " The receiver of an insol-
vent corporation becomes, as soon as
he qualifies, invested, by force of the
statute, with full power to demand,
sue for and take into his possession
all of the property of every descrip-
tion belonging to the corporation, and
to convert the same into money.
.... From that time forth its
property is. by law, appropriated ex-
clusively and irrevocably to the pay-
ment of its debts. Power is conferred
on its receiver to take possession of
all of its property and to convert it
into money, to the end that the
money thus obtained may be dis-
tributed among its creditors. No
other application or disposition can
be made of the money realized from
its property. It must be paid to its
creditors, and in distributing it
among unsecured creditors, the statu-
tory direction is that they must be
paid equally in proportion to their
respective debts.*'

2 Osgood v. Ogden, 4 Keyes (N. Y.)

70 ; Ruggles v. Brock, 0 Hun (N. Y. )
164; Sawyer v. Hoag, 17 Wall. G10.
619 ; Webster v. Upton, 91 U. S. 65,

71 ; Chubb v. Upton, 95 U. S. 665,
667; Dayton v. Borst, 31 N. Y. 435,
Wait on Insolv. Corps. Chap X.

3 Ruggles v Brock, 6 Hun (N. Y.)
164; Pittsburg Carbon Co. v. McMil
lin. 119 N. Y. 46. 23 N. E. Rep. 530 ;
Graham Button Co. v. Spielmann, 50

N. J. Eq. 120, 24 Ail Rep. 571 ; Upton
v. Englehart, 3 Dillon, 196, 503 ; Os-
good v. Ogden, 4 Keyesi X. Y.) 70 8H ,
Porter v. Williams, 9 N. Y. 142. L49 ;
Osgood v. Laytin, 3 Keyes (N. y.)521;
Gillet v. Moody, :: N. Y. 179. A cor
poration is like a natural person in
that any conveyance of its property
without authority of law, and in
fraud of existing creditors, is void as
against them. Waba'sh, St. L. & P.
R. R. Co. v. Ham, 114 U. S. 591. 5 S.
C. Rep. 1081; Richardson v. Green,
133 U. S. 44, 10 S. C. Rep. 280.

4 Wood v. Duinmer, 3 Mason, 308 ;
Sawyer v. Hoag, 17 Wall. 610; Batch
v. Dana. 101 U. S. 205 : Dayton \.
Borst, 31 N. Y. 435; New All.an>
v. Burke, 11 Wall. 96, 106: Upton v.
Tribilcock, 91 U. S. 45, 17 ; Bartletl v.
Drew, 57 N. Y. 587; Lamar [ns. I ...
v. Moore, 1 Am. Insolv. Rep. 62 ;
Wait on Insolv. Corps., £ 1 12 : Vance
v. McNabbCoal. etc. Co., 92Tenn. 17.
20 S. W. Rep. 424 ; Hospes \. North-
western Mfg., etc. Co., 48 .Minn 1 ; I, .Mi
N.W. Hep. 1117: Bradley v. Converse,
3 Fed. Cases, 1143; Richardson \.
Green, 133 U. S. 30, 10 S. C. Rep. 280;
Clark v. Bever, L39 U. S. 109, lis « .
hep. 468; Fogg v. Blair, 139 D S.
125, 17 S. C. Rep. 176 . Cole v. Miller-
ton Iron Co . L33 X. Y. Mis, 30 X. E.
Rep. si:; Handle} v. Stutz, 189 U.
S. 427, 11 S. C. Rep. •->:;<); Buck v.
Ross. 68 Conn. 31 ; Crandall v.
Lincoln, 52 Conn. 73, 91.

238 FOREIGN RE< I.I \ IKS. § I I S

unpaid subscriptions.1 It is foreign to our purpose to
enter into the wide field of corporation law relative to
insolvency,2 but the principles of these cases are valuable
as showing that the representative, receiver,3 or liquidator
of a corporation is, like an administrator, assignee, or
receiver of a debtor, vested with the status of a creditor.
Where a statute creates a cause of action in favor of cred-
itors who are within certain prescribed conditions a
receiver cannot enforce it.4 The courts of the United
States will not ordinarily interfere with a receiver
appointed in the State court.5 It may be observed here
that the power of the comptroller of the currency to wind
up the affairs of a national bank in certain contingencies
does not exclude the authority of a competent tribunal
to appoint a receiver in other cases.0

r? 118. Foreign receivers.— In Booth v. Clark,7 the
court says: "A receiver is appointed under a creditor's
bill for one or more creditors, as the case may be, for
their benefit, to the exclusion of all other creditors of the

debtor, if there be any such Whether appointed,

as this receiver was, under the statute of New York, or
under the rules and practice of chancery, as they may be,
his official relations to the court are the same. A statute
appointment neither enlarges nor diminishes the limita-
tion upon his action. His responsibilities are unaltered.
Under either kind of appointment he has at most only a
passive capacity in the most important part of what it
may be necessary for him to do, until it has been called
by the direction of the court into ability to act. He has

Fogg v. Blair, 139 U. S. 125, II S. 'Farnsworth \. Wood, !)l N. Y.

C. Rep. 476 ; < laniden \. Stuart, 308.

Ml U. s. 104, 12 s. C. Rep. 585. Porter v. Sabin, 149 U. S. 480, 13

Wail "ii [nsolvenl Corpora- K. »'. Rep, 1008.

tions. Baker, Voorhis & Co., 1888. 'Irons v. Manufacturers' Nat,

Pittsburg Carbon Co. v. McMillin, Bank, 6 Biss. 301.

119 N. Y. Hi. 33 N. I-:. Rep. 580. LI Bow. 338.

§ 1 18 I ' iREIGN RE( l.l\ ERS.

no extra-territorial power of official action; none which
the court appointing him can confer, with authority to
enable him to go into a foreign jurisdiction to take p
session of the debtor's property ; none which can give
him, upon the principle of comity, a privilege to sue in a
foreign court or another jurisdiction, as the judgment-
creditor himself might have done, where his debtor may
be amenable to the tribunal which the creditor may
seek."1 So in Brio-ham v. Luddin^ton,2 which was a bill
filed in the southern district of New York by a receiver
appointed on a judgment-creditor's bill in the eastern dis-
trict of Wisconsin, the suit was dismissed.3 To the sugf-
gestion of counsel that, by the statutes of Wisconsin,
receivers appointed on creditor's bills are vested with
full title, and have full authority to maintain suits, which
the Circuit Court of the United States for the southern
district of New York ought to recognize, Mr. Justice
Woodruff said: "(0- This receiver was appointed
under and by virtue of the general power of courts of
equity, and with such effect only as is due to the order
of the court making the appointment. He was not
appointed under or by virtue of any statute. (2 ). The
statutes of the State of Wisconsin cannot enlarge or
alter the effect of an order or decree of the Circuit Court
of the United States, nor enlarge or modify the jurisdic-
tion of that court or its efficiency."4 A doctrine: is
growing up in favor of recognizing foreign receivers by
comity.5

1 See especially Olney v. Tanner. 'National Trust Co. v. Miller, 33

10 Fed. Rep. 104, and cases cited. N. J. Eq. 159 ; Falk v. Janes, 49 N. J.

212Blatchf. 237. Eq. 489, 23 Ail. Rep. 813; Bidlack v.

■'■ See Hope Mutual Lif e Ins . Co . v . Mason, 26 X. J. Eq. 230; National

Taylor, 2 Rob. (N. Y.) 278, 284. Trust Co. v. Murphy. 30 N. J. Eq.

4Citing Payne v. Hook, 7 Wall. 408. Compare Matter of Wait< . 99

425 N. Y. 433.

?40

CRE] >IT< >RS l IB C< »RP< ►RATH >NS.

II9

?j 119. Creditors of Corporations. — Creditors of an indebted
corporation may have the aid of a court of equity against
the corporation and its debtors to compel the collection
of what is due, and the payment of its debts,1 and the
winding up of its affairs.2 In Graham v. Railroad Co.8
will be found an important discussion, by the learned Mr.
Justice Bradley, of the effect of a voluntary alienation of
property by a corporation as affecting subsequent cred-
itors. In this case counsel urged that the property of a
corporation was a trust fund for creditors,4 and that this
meant all creditors becoming such during the life of the
corporation. The court, however, could discover no
reason why the disposal by a corporation of any portion
of its assets should be questioned by subsequent creditors
of the corporation, any more than a like disposal by an
individual of his property should be so attacked.5 This
would seem to put corporations and individuals upon the
same footing as to voluntary alienations, as regards a
certain class of creditors; but the distinction must not be
overlooked that the corporation itself may recover the
property, where the voluntary or fraudulent transfer was
effected by faithless or corrupt officials.

Creditors of a corporation who have exhausted their

1 Ogilvie v. Knox [ns. Co., 22 Bow.
380; 2d appeal, 2 Black, 539; Hatch
v. Dana, 101 U. S. 205.

Tradesman I'ul>. ( !o. v. Knox-
ville Car Wheel Co., 95 Tenn. 634, 32
S. W Rep. 1097.

»102 D". S. 148; Montgomery Web
Co. v. Dienelt, 133 Pa. St. 585, 19
Ml Rep. 128.

1 Bee Railroad < !o. v. I Coward, ~<
Wail. 392; Sawyer v. Hoag, 17 Wall.
610 Dayton v. Borst, 31 N. Y. 135 ;
Dpton v. Tribilcock, 91 U. S. 45, 17 ;
Marti, it v. Drew, 57 N. Y. 587. In
I Blair, 139 D". S. 126, 11 S. C.

Rep. 476, the court says: "The princi-

ples which, by established law, govern
the relations between a corporation
and its creditors and stockholders,
and the management <>f thecorporate
property, would be <>f little value, if
the corporation, by its directors,
could sell or dispose of its assets to
the prejudice of creditors and stock-
holders under such circumstances, <>n
such terms and at such prices as indi-
cated, upon the lace of the trans-
action, thai they were being squan-
dered recklessly or fraudulently in
disregard <>f the trust committed to

them." See g 117.

See < lhap. VI.

§ 120 SHERIFF

241

remedy at law, may proceed in equity to compel a stock-
holder to pay up a balance due upon a subscription.1 So
judgment-creditors of a corporation may follow corporate
assets into the hands of stockholders amongst whom
it was divided before the debts of the association were
paid.2 Where a corporation has changed its name or
assumed a new organization to evade its liabilities, cred-
itors may, as against stockholders who are not purchasers
for value without notice, pursue the assets.5

§ 120. Sheriff. — When process comes to his hands the
sheriff may undoubtedly attach any property which has
been transferred by an alleged fraudulent assignment,
and hold it subject to the decision of the court upon the
question of fraud. In such a case the sheriff must defend
the seizure in behalf of the creditors, and show that the
assignment was fraudulent as to them. As to creditors
the title to such property does not pass if the assignment
is fraudulent, but it remains liable to seizure to satisfy
their debt.4 The case is different when the assigned
property has been sold by the vendee and its identity
destroyed ; the proceeds cannot be attached or levied
upon by the sheriff as the debtor's property. Merely
setting aside the assignment would not vest the title to
such proceeds in the debtor. The only remedy of the
creditor in such a case is to institute a creditor's suit, and
fasten a trust upon such proceeds for the benefit of cred-

1 Hatch v. Dana, 101 U. S. 205; 3 Montgomery Web Co. v. Dienelt,

Ogilvie v. Knox Ins. Co., 22 How. 380; 133 Pa. St. 597 : Hibernia tns. < !o. v.

Pierce v. Milwaukee Constr. Co., 38 St. Louis, etc. Transportation Co., 13

Wis. 253 ; Gogebic Investment Co. v. Fed. Hop. 516.

Iron Chief Min. Co., 78 Wis. 427, 47N. l See Kelly v. Lane, 13 Barb. V

W. Rep. 726. Y.) 610. Compare Greenleaf v. .Mum

2Bartlett v. Drew, 57 N. Y. 587; ford, 4 Abb. Pr. N. S. (N. Y 184;

Missouri, L. M. &S Co. v. Reinhard, Cross v. Daly. 5 Daly (N. Y

114 Mo. 218, 21 S. W. Rep. 488 ; Fort Rinchey v. Strj ker, 28 N. Y 45 ; l

Payne Bank v. Alabama Sanitarium v. Van Hoesen, 26 Hun (N. Y 316.

Co., 103 Ala. 358, 15 So. Rep. 618. See § 81.
16

242

111 tRS

WIDOW.

121

itors, which necessarily confirms the legal title of the
assignees to the assigned property, instead of annulling
it, as would be the case if the sheriff had seized the
assigned property instead of the proceeds.1

>J 121. Heirs — Widow. — The heir of a grantor cannot
impeach his ancestor's deed on the ground that it was
made in fraud of creditors, for he can claim no right
which the ancestor was estopped from setting up. "This
rule is a penalty imposed by the law for the prevention
of frauds and for the protection of subsequent pur-
chasers." ~ This rule applies even where the grantee was
not a participant in the fraud, as where the title was taken
in his name originally without his knowledge.3 The
statutes avoiding fraudulent transfers are, as we have
shown,4 available only to the person or persons who might
be delayed, hindered, or defrauded.5 The heir at law is

1 Lawrence v. Bank of the Repub-
lic, 35 X. V. 320. See Thurber v.
Blanck,50 X. Y. 83; Adams v. David-
Bon, in X. V. 309, 315. Sec § 81.
( lompare < (lark v. Foxcroft, 6 Me. 20G,
and Quincy \. Ball, 1 Pick. (Mass.)
357, 11 Am Dec. [98. In Robertson v.
Sayre. L34 X. Y. 99, 31 X. E Rep. 250.
where Follett, < !h. J., said ; " D. H.

Robertson having procured these lots
to be conveyed to Messenger for the
purpose of defrauding his creditors,
bad no Legal estate in then] which

could be reached by execution <( tar-
field v. Hat maker. 15 X. Y. 475) or
which on his death descended to his
heirs (Moseley \. Moseley, 15 Id. :;:;! ;
Wait on Fraud. Convey, g 121. See
also 1 R, S. 728, §? 50, 51, 52 ; Under-
wood v, Sutcliffe. 71 X. Y 58 ; Brew-
v. Power, H> Paige, 562 ; Bates v.
Lidgerwood Mfg l !o 50 Hun |X. Y.]
120 ; Hamilton v. < 'one, 99 .Mas-,. 478),
This rule in a penalty impose 1 by the
law for t he prevention of frauds and
for the protection of subsequenl pur-

chasers (Revisers' notes to sections
cited), and the reason for its applica-
tion is not weakened in case the
grantee, as in the case at bar, was not
a participant in the fraud."

* Robertson v. Sayre, 134 X. Y. 99;
.Moseley V. Moseley, 15 X. Y. 334.
See Vance v. Schro.ycr, 79 Ind. 380;
Robertson v. Sayre, 134 N. Y. 9<J. 31
N. E. Rep. 250.

:; Robertson v. Sayre, 134 X. Y. 99,
31 X. E. Rep. 250, citing the text.

1 See Chap 111 ; also§ 107.

See Dutton v. Jackson, 2 Del. Ch

si; : Morrison v. At well, 9 Bosw, iX.

\.\ 503 : Powers v. Graydon, 10 Bosw.

(N. Y.) 630 See infra, Chap. XXVI.

Legatees. — A Legatee cannot avoid,

OH the ground of fraud, a transaction

which was binding on bis testator.
Guidry v. Grivot. 2 Mart. X s. (La.)
13, 1 1 Am. Dec. L93 ; hut in Addison

v. Bowie, 2 Bland's Ch. (Md.) 606, it

is said, a legatee may in certain cases
file a ere ditor's bill.

§ 122 HUSBAND VND WIFE.

not a proper party to enforce an alleged trust in personal
property in favor of an intestate.1 It may be here
observed, though possibly extraneous to our general
theme, that one of several heirs may maintain a suit to
set aside a conveyance procured from the ancestor by
means of the fraud and undue influence of the grantee

o i

and that the other heirs may testify in the suit as to
personal transactions with the deceased.2

A widow cannot sue in chancery to have her husband's
lands sold, her dower right satisfied, and the balance
applied to creditors;3 nor can a widow who has know-
ingly joined in a fraudulent deed maintain a bill to set
the transfer aside.4

§ 122. Husband and wife. — The relationship of husband
and wife assumes considerable prominence in our subject,
and will be specially treated We may here observe that
a husband compelled to pay ante-nuptial debts of his wife
becomes her creditor, and as such is entitled to set aside
fraudulent conveyances made by her in contemplation of
marriage ;5 so also a wife may attack conveyances exe-
cuted by her husband with intent to defeat her right of
dower which was about to attach,6 or pending an action
for support,7 and is, when a creditor of the husband,

1 Ware v. Galveston City Co., Ill multiplicity of suits, and accumula-

U. S. 170, 4 S. C. Rep. 337. In Mc- tion of costs, which, where the cred

Call, Adm'r, v. Pixley, 48 Ohio St. itors are numerous, is a matter of

379, 388, 27 N. E. Rep. 887, the court importance."

says :" The statute which permits the 2 Smith v. Meaghan, 28 Bun V

sale, by an administrator, of lands Y.) 423: Ho bar I v. Bobart, 62 N.

which his intestate had conveyed in Y. 80.

fraud of creditors, was not designed for Bull v. Hull, 26 W. Va I.

the benefit of the heirs, or distributees ; Barnes v. Gill, 21 111. App. 129.

of the estate. It was enacted solely 5 Wester man v. Westerman, 25

in the interest of the creditors, whose Ohio St 500; affi'g 9 Am. Law Reg.

remedy it advances, by enabling the (N. S.) 690.

administrator to accomplish in a sin- '' See § 70 ; also < hap. XX.

gle proceeding, what formerly might ' Tyler v. Tyler, 126 111. 525, 21 X.

require many actions, thus avoiding E. Rep. 616.

-44

T( IRT CREDITOR.

12

entitled to file a creditor's bill.1 "It seems to be well
settled that, pending a divorce suit, a wife asserting a
just claim for alimony is, within the meaning of statutes
prohibiting fraudulent conveyances, to be deemed a
creditor." ~

^ 123. Tort creditor. — A right to damages arising from a
tort is within the protection of the statute 13 Eliz. ch. 5,3
and a conveyance made to defeat such right will be set
aside.1 If the intent was in part to evade fines upon
criminal prosecution, and also to evade the payment of
any judgment which might thereafter be obtained in the
civil action, the conveyance would be wholly fraudulent.
It cannot be upheld in part and avoided in part.5 Hence
it has been decided that an action at law, although in viale-
ficio, is within the meaning of the statute which protects
"creditors and others" against conveyances made to
defraud them of their just and lawful actions, suits, debts,

1 Houseman v. Grossman, 177 Pa.
St. MS3, 35 At!. Rep. 7:J6 ; Chase v.
Chase. 105 Mass. 385.

•I, nit v. Kaiser, 61 Tex. 665,
67::, citing Feigley v. Feigley, 7 Md.
538; Clagetl v. Gibson, 3 ('ranch.
C. C 359; Boils v. Boils, 1 Goldw.
(Tenn. ) 285; Morrison v. Morrison,
19 X. II. 69; Turner v. Turner, 44
A la 438 ; Brooks v. i Jaughran, 3
Head (Tenn.) 165; Bouslough v.
Bouglough, 68 Pa. St. 495 ; Frakes v.
Brown, 'J Blackf (Ind.) 295. Bui see
Fein v. Fein, :; Wyoming, 163, 13
I 'a-. Rep. 7'.».

Posl v. Stiger, 29 X .1. Eq. 558.
See Lillard v. McGee, 4 Bibb. (Ky.)
165 : Jackson \ Myers, 18 Johns. I X.
■ Farnsworth v Bell, 5 Sneed
(Tenn. •■>-'\ ; Langord v. Fly, 7 Humph.
(Tenn.) 585 : Walradl v. Brown, '< III.

4 Scott v. Hartman, 26 N. J. Eq.
DO; Boid v. Dean, 48 N. J. Eq.
203, 21 At I. Rep. 618, citing the
text ; .Jackson v. Myers, IS Johns.
(N. Y.) 42."); Clapp v. Leather-
bee. IS Pick. (Mass.) 138; Fox v.
Hills, 1 Conn. 295; Pendleton v.
Hughes, 65 Barb. (N. Y.i 136; Barling
v. Bishopp, 29 Beav. 1 1 T : Shean v.
Shay, 42 End. 375 ; Bongard v. Block,
SI III. 186; Weir v. Day, 57 Iowa, 87;
("order v. Williams, 40 Iowa, 582;
Harris v. Harris. 23 Grafct. (Va.) 737 ;
Hoffman v, Junk, 51 Wis. 613, 8 X.
W. Rep. 493; Westmoreland v. Pow-
ell, 59 Ga. 256; Prouty v. Prouty, 4
Wash. 174, 29 Pac. Rep. 1049 ; Kain v.
Larkin, I App. Div. <N. Y.) 209,38 N.
Y. Supp. 546. Bui compare Evans v.
Lewi., 30 Ohio St. II.

Weir v. Day. 57 Iowa 87, 10 N.
W. Rep. 304.

§§ 124, I25 OVERSEER OF THE POOR. 2 | ;

accounts, damages, penalties, forfeitures, and demands.1
The judgment-creditor in an action of trespass has a
judgment for such a cause of action as justifies his attai Ic-
ing, in some form, any conveyance made by the defend-
ant pending the suit, as being fraudulent against him, and
should not be prevented by injunction from putting him-
self into such a position that he may have the question of
the bona fides of the grantee's purchase tested in a court
of law and before a jury through an action of ejectment.2

§ 124. Overseer of the poor. — In New York an overseer
of the poor has no standing in court before judgment to
impeach the voluntary deed of the father of a lunatic
child, upon the theory that the conveyance was executed
with the intention of imposing the burden of supporting
the son upon the town. It seems to be clear that an
overseer cannot secure equitable relief setting aside a
fraudulent transfer, if he is not a creditor by judgment
or by simple contract ; and no liability has been estab-
lished in his favor, by adjudication or otherwise, against
the alleged fraudulent grantor.5

§125. Creditors having liens. — A conveyance is not
considered fraudulent as to a creditor whose debt
is secured by judgment or other lien upon the land
transferred. The grantee necessarily takes subject to
the lien, and the creditor may pursue the land in the

1 Scott v. Hartman, 26 N. J. Eq. 90 ; peal.C! Pa. St. 426 ; M e v. Cord,

Jackson v. Myers, 18 Johns. (N. V.) 14 Wis. 413; Heywood v. (it\ of

425. See Leukener v. Freeman, Buffalo, 14 N. 5T. 539 ; Townsend v.

Freem. Ch. Rep. 236; Fox v. Hills, Mayor of New York, 77 X V. 542;

1 Conn. 295; Barling v. Bishopp, 29 Van Doren v. Mayor, etc. 9 Paige (N.

Beav. 417. See § 110. Y.) 388. A conveyance made !•

3 Welti e v. Scotten, 27 Alb. L. J. cape payment of fines can be attacked

337, 59 Md. 72. See Gebhart v. Mer- by the State. State v. Burkeholder,

feld, 51 Md. 325 ; Bockes v. Lansing, 30 W. Va. 593, 5 S. E. Rep t39

74 N. Y. 441; Freeman v. Elmen- 3Bowlsby v. Tompkins, 18 Hun

dorf, 7 N. J. Eq. 475; Winch's Ap- (N. Y.) 220.

246

PURCHASER REMOVING [NCUMBRANCES.

126

same manner as if it had been conveyed to one who had
purchased in good faith for a full consideration. He may
follow the land irrespective of changes in the title, whether
honest or dishonest. A judicial sale upon his lien vests
in the purchaser the title which the debtor had when the
lien attached, and of course divests the title of the
debtor's grantee. The creditor, therefore, stands in no
need of aid from a court of equity to revoke the debtor's
transfer.1 This question was considered in Armington
v. Rau,2 in which Haak's Appeal3 was cited with
approval, and the court further said : '' The debtor con-
veys subject to the lien. He has a right, upon such con-
dition, to sell or give away his land, and if he does so
fraudulently, the grantee's title is good against all the
world, except creditors and persons intended to be hin-
dered, delayed or defrauded. A prior lien creditor is not
such person. The conveyance, whether bona fide or
fraudulent as respects creditors who have no liens, is
no obstruction or hindrance to the enforcement of pay-
ment of the prior lien."

§ 126. Purchaser removing incumbrances. — A purchaser
at execution sale takes the creditor's right to avoid all
fraudulent conveyances and incumbrances,1 and may file
a bill in equity for that purpose.5 A creditor who has

Haak's Appeal, LOO Pa. St. 62 ;
Zuver v. (lark. 104 Pa. St. 326.
LOO Pa. St. L68.
LOO Pa. St. 62.

1 ish v. Mace, 'J ( Jray | Mass. )

Orendorf v. Budlong, 12 Fed.

Rep. .'I : Hildretb v. Sands, -,' .(..litis.
el.. (N. Y.) 35 : Besl v. Staple, 61 N.
Y. 78 ; ( iallniaii \ . Perrie. 17 Miss.
L31. < Iliief Justice Sherwood sai.l :

■■ Tli.- law is well -,.-tt Led in tliis State

that, where a debtor conveys liis la ml
with tin- fraudulent design above
mentioned, a resulting trust is thereby

created in favor of his creditors, and
is the subject of execution sale Ami

it Is equally well settled, that a pur-
chaser at such sale will occupy as

advantageous a position as t hough lie
were a creditor, when proceeding

to set aside the debtor's conveyance
..11 the -round of fraud." 1,'ylaml v.
Callison, Til .Mo. r>14.

(e.uld v. Steinburg, 84 111. 170.
See Hoxie v. Price. :!1 Wis. 82-89.
It appeared in this action that a deed
of lands from defendant to a third
person, and from him hack to the

§ 127

CREDITORS l »PP< (SING WILL.

obtained judgment and issued execution, may seize and
sell the property of his debtor, and try the title of any
one who sets up a prior lien or incumbrance affected with
usury.1 So a conveyance of property gives to the
grantee or assignee the right to tile a bill to annul a
previous invalid conveyance made by the same grantor,2
and a judgment-creditor may compel the cancellation of
prior judgments against the debtor upon the ground that
they have been paid.3

§ 127. Creditors opposing will.— As a general rule no
creditor has the right to oppose the probate of a will.4

wife, and a patent of certain other
lands to the wife, were considered as
fraudulent and void as to the hus-
band's creditors. A purchaser of the
land, at execution sale under a judg-
ment against the hushand, and before
becoming entitled to the sheriff's

d 1, brought a suit to set aside the

wife's deed and patent and to restrain
her from incumbering the land. The
suit was upheld upon the theory that
the wife, by alienating or incumbering
the land to a bona fide purchaser or
mortgagee, would absolutely defeat
complainant's equitable rights. See
Avery v. Judd, 21 Wis. '362 ; Phalen
v. Boylan, 23 Wis. 679 ; Wood v.
Chapin, 13 N. Y. 509. In Remington
Paper Co. v. O'Dougherty, 81 N. Y.
481. the complainant was an execu-
tion purchaser ; the time for re-
demption had expired as to the
debtor but not as to other creditors.
The purchaser was held to be pos-
sessed of an inchoate title and equi-
table interest sufficient to maintain an
action for the cancellation of instru-
ments or incumbrances, which, within
the doctrine of courts of equity, are
considered as clouds upon title. See
Hager v. Shindler, 29 Cal. 4S ; Wag-
ner v. Law, 3 Wash. St. 500, 28 Pac.
Rep. 1109, 29 Id. 927. In Mulock v.
Wilson, 19 Col. 302, 35 Pac. Rep. 532,

the court says: "A judgment-creditor
desiring to set aside a supposed
fraudulent deed of real estate may
bring his action therefor to test the
validity of the deed before attempting
to subject the premises to execution
sale; or the purchaser, after such sale,
may bring his action to remove tin-
cloud from the title by cancelling the
supposed fraudulent deed, and to re-
cover possession of the premises "
See Stock-Growers' Bank v. Newton,
13 Col. 249, 22 Pac. Rep. 444.

1 Dix v. Van Wyck, 3 Mill (N. Y.)
525; Mason v. Lord, 40 X Y. 186
See Post v. Dart, 8 Paige (N Y 639
reversed, 7 Hill (N. Y.) 391 ; Thomp-
son v. Van Vechten, 27 N Y. 568

" McMahon v. Allen. :;:. N. Y. 103 .
See Dickinson v. Burrell, I. I.' l I'm
337. Put compare < lockell v. Taj lor,
15 Beav. 103; Anderson v. Radcliffe,
D. B. & E. 806 ; Milwaukee ,y M. R.
R. Co. v. Milwaukee cV W R R Co.,
20 Wis. 174 : Prosser v. Edmonds, 1
Y. & C. 481 ; French v. Shotwell, 5
Johns. Ch. tX. Y.i 555 ; especially,
Graham v. Railroad Co . 102 D S.
1 56.

• Shaw v. Dwight, 37 X. Y. 311.

1 Menzies v. Pulbrook, 2 I lurteis,
845; Heilman \ . Jones, 5 Redf. N.
V.) 398 : Elme v. Da Costa, 1 Phillim.
173.

24K CESTUI QUE TRUST. § 127a

The right of contest is limited to the heirs at law and
next of kin.1 It may be here observed that, in Fisher v.
Bassett, 2 it is said that no debtor of an estate could be
allowed " to plead nc ungues administrator in bar of an
action for the recovery of a debt due to the estate The
greatest confusion and mischief would ensue if such were
the law ; for then, wherever delay was desired, every
debtor would deny the jurisdiction, and arrest the
recovery of a just debt, by embarrassing inquiries as to
the decedent's domicil or the place of his death." :i

§ 127a. Cestui que trust. — A cestui que trust is not
required to establish his claim by an action at law where
he seeks an enforcement of the trust or desires to pro-
tect the trust property from unlawful interference.4

Taff v. Hosmer, 14 Mich. 249. (N. Y.) 392; Drexel v. Berney, 1 Dem.

2 9 Leitfl) (Va.) 133. (N. Y.) 163.

'See Fosdick v. Delafield, 2 Redf. 4 Spelman v. Freedman, 130 N. Y.

421, 29 N. E. Rep. 765.

CHAPTER VIII.

PARTIES DEFENDANT.

§ 12tf. Debtor as defendant in credit-
ors' actions.

129. When debtor not necessary de-

fendant.

130. Defendants need not be equally

guilty.
181. Fraudulent assignee or grantee

must be joined.
132. Joining defendants.
132a. Conveyance pending suit.
1326. Bringing in representatives.

jj 133. Assignee and receiver as de-
fendant.
L33a. Suing directors

134. Objection as to non-joinder —

How raised.

135. Misjoinder <>f causes of action.

136. Executors, administrators, heirs

and legatees.

137. Trustee and cestui que trust.

138. Party having lien.

139. Stockholders.

§ 128. Debtor as defendant in creditors' actions.— The
doubts and difficulties incident to the selection or joinder
of proper parties in creditors' suits are not restricted to
complainants as a class, but, on the contrary, cases of
alleged misjoinder and non-joinder of defendants are fre-
quently up for adjudication in different forms. The
general rule certainly is that all persons whose interests
are directly to be affected by a suit in chancery must be
made parties,1 in order to give finality to litigation.8
The general proposition that all persons participat-
ing in making a fraudulent conveyance are proper
parties to a suit to set the transfer aside may be
accepted. 3 " It is a general rule that all parties inter

1 Christian v. Atlantic, etc, R. R. Co.
133 U. S. 241, 10 S. C. Rep. 260;
Shields v. Barrow, 17 How. 130, 139 ;
Ribon v. Railroad Co's., 16 Wall. 446 ;
Williams v. Bankhead, 19 Wall. 563 ;
McArthur v. Scott, 113 U. S. 340, 5
S. C. Rep. 052; Green v. Mill .aide, 3
Abb. N. C. (N. Y.) 156; Lynchburg
Iron Co. v. Taylor, 79 Va. 671.

-First National Hank v. Schuler,
153 N. Y. 170.

8Miller v. Jamison, 24 N. J. Eq. 41.
Swan Land & Cattle Co. v. Frank,

I is c. S.610, 13S.C. Rep. 691 ; W I

v. Sidney Sash, etc. Co., 92 Bun (N.
Y.)35 : 37 N. Y. Supp B85 Watts v.
Wilcox. 22 Civ. Pro. (X. Y. 164, L8
\ Y. Supp. 192 ; Welsh v. Solen-

;

I 'I- BTOR AS DEFENDAN I.

§ 128

ested in a controversy, or who may be affected by a
decree rendered therein, should be made parties ; all who
are nominally or really interested may therefore be joined
although the interests of all may not be affected alike by
the relief which may be granted."1 The burden of secur-
ing the presence of the necessary parties rests upon the
plaintiff.8 Let us briefly look through the authorities.
The question of the necessity of joining the grantor
or debtor as a party defendant in an action brought
by a creditor to secure a discovery of assets, or
cancel a fraudulent conveyance, is involved in
some obscurity and confusion, and the authorities
relating to the subject must be carefully distinguished
and classified. Prof. Pomeroy says,3 that " in an action
by a judgment-creditor to reach equitable assets of the
debtor in his own hands, or to reach property which has

berger, 85 V.-i. 444, 8 S. E. Rep. 91 ;
Mahler v. Schmidt, 43 Hun (N.
V. ) "314. In Mahr v. Norwich Union
Fire Ins. Soc, 127 N. Y. 460, 28 N.
K. Rep. 391, the court say: "There
is an essential difference between the
practice at law and in equityin deter-
mining who are proper and necessary
parties. Story, in his work on Equity
Pleadings (§ 72), says that two gen-
eral principles control courtsof equity
in this respect : I. That the rights of
in. man Bhall l»e finally decided unless
he himself is present, or at least lias
had a lull opportunity to appear and
vindicate his rights : 2. That when
a decision is made upon any particu-
iai subject-matter, the rights of all

persons whose interests are imi li-

ately connected with thai decision
and affected by it, -hall be provided
for as far as they reasonably may be.
The learned author adds : ' It is I he
'■"ii^tant aim of courts of equity to do
complete justice, by deciding upon
and settling the rights of all persons

interested in the subject-matter of the
suit, so that the performance of the
decree of the court may be perfectly
safe to those who are compelled to
obey it, and also, that future litigation
may be prevented.' As Lord llard-
wicke once said, all persons ought to
be made parties who are necessary to
make the determination complete and
to quiet the question (Poore v. Clark,
2 Atk. 515). Not only all persons
whose rights may be affected by the
judgment should be brought into
court, but all whose presence is essen-
tial to the protection of any party to
the action (Gray v. Schenck, -1 N. Y.
460; Russell v. Clark, 7 Cranch, 69,
98; Picquet v. Swan, 5 .Mason, 561 ;
Fell v. Brown, 2 Brown's ( !h. 218)."

1 Raynor v. Mintzer, <',; Cal. 164,
7 I'ae. Rep. 431.

- .Mahr v. Norwich Union Fire Ins.
Soc, 127 N. Y. 452, SH N. E. Rep. 391.

'Pomeroy on Rei lies and Re-
medial Rights, .s' 347.

§ 128 DEBTi IR A.S DEFENDAN l . 25 I

been transferred to other persons, or property which is
held by other persons under such a state of facts that the
equitable ownership is vested in the debtor, the judg-
ment-debtor is himself an indispensable part)- defendant,
and the suit cannot be carried to final judgment without
him." This statement of the matter is, as we shall presently
see, entirely too general and sweeping. In New York the
necessity for making the debtor a party defendant is made
to depend upon the nature of the particular proceeding.
In Miller v. Hall1 the action was brought to have an
assignment of a bond and mortgage made by the debtor
to the defendant declared fraudulent and void as to cred-
itors. The New York Court of Appeals held that it was
well settled, in the case of a creditors' bill to reach a
chose in action, which was the character of the suit in
question, the judgment-debtor was a necessary party.
The earlier authorities show that the practice of joining
the debtor prevailed.2 In Shaver v: Brainard3 the action
was in the nature of a creditors' bill brought by a receiver
to set aside a conveyance of real estate as fraudulent, and
apply the proceeds upon the plaintiff's judgment. The
grantor and judgment-debtor was not made a party
defendant, and the judgment was reversed for that reason.4
In another case, where a receiver filed a bill against a
trustee of the debtor to reach equitable interests of the
latter in a trust fund, tjie debtor was declared to be a
necessary party.5 In Haines v. Hollister11 the assignee'

'70 N. Y. 252; below, 40 N. Y. 3 29 Barb. (N. Y.) 25.

Supr. Ct. 266; Sprague v. Cochran, 4See Allison v. Weller, :: Hun (N.

84 Hun (N. Y.) 240, 32 N. Y. Supp. V.) 603, affi'd W X. Y. 61 I ; North v.

570; Hubbell v. Merchants' Nat. Bk. Bradway, !> Minn. 183.

42 Hun (N. Y.) 200. B Vanderpoel v. Van Valkenburgh,

5 Ednieston v. Lyde, 1 Paige (N. Y.) 6 N. V. L90. See Voorhis v. Gamble,

637 ; Boyd v. Hoyt, 5 Paige (N. Y.) 65 ; 6 Mo. App. 1: Lawrence v. Bank of

Fellows v. Fellows, 4 Cow. (N. Y.) the Republic, 35 X. Y. 320 : Beai'dslej

682; Bobb v. Bobb, 8 Mo. App. 259; Scythe Co. v. Foster, 36 X Y 561 ;

Greenjv. Hicks, 1 Barb. Ch. (N.Y.)309. .Miller v. Hall, 70 X. Y. 252

See Wallace v. Eaton, 5 How. Pr. (N. ' M X Y. 1.
Y.)99.

DEBTOR AS DEI ENDANT. § [28

of an insolvent firm, the personal representatives of a
deceased partner, and the surviving partners, were held
to be properly joined in a creditors' action to compel an
accounting by the assignee, and to recover of the repre-
sentatives the balance of the plaintiffs' claims.1 In Law-
rence v. Bank of the Republic2 the court observed: " In
a creditors' suit against a judgment-debtor to set aside a
prior assignment made by him in trust for the benefit of
creditors, on the ground of fraud, he is a necessary party.
Indeed he must be deemed the principal party, otherwise
different persons, claiming portions of the assignee's
property, could not be joined as defendants. The com-
mon point of litigation is the alleged fraudulent transfer
of the property." 3 The controversy is over the debtor's
single scheme to defraud creditors consummated, it may
be, by several acts.4 The case of Gaylords v. Kelshaw r>
is sometimes cited0 as an authority for the proposition
that in any form of action to annul a conveyance as
fraudulent the debtor must be summoned. The court
said that the debtor was properly made defendant to the
suit, as it was a debt which he owed which the creditor
sought to collect, and it was his insolvency that was to be
established, and his fraudulent conduct that required
investigation. It was expressly held, however, that it was
not necessary to decide whether the suit could proceed
without him, because, as matter of fact, he had been found
in the district and had answered the bill. Miller, J., said :
" It is simply the case of a person made a defendant by

'Compare Wells v. Knox, 17 Civ. Mahler v. Schmidt, 43 Hun (N. Y.)

Pro. (N. Y., 59, J N. Y. Supp. 45; 514; Graves v. Corbin, 132 IT. S. 586,

Murray v. Fox, 39 Hun (N. Y.) ill. 10 S. C. Rep. 196.

• Y 324. I Wall. 81; Judson v. Courier

8e Beardsley Scythe Co. v. Foster, Co., 25 Fed. Rep. 708 ; Swan Land &

36 V Y 566; Bradner v. Holland, 83 Cattle Co. v. Frank, 148 D". S. 610, 13

Hun \ 5 s. C. Rep. 691.

• Wood v. Sidney Sash, etc. I !o., 92 ' See Taylor v. Webb, 54 Miss. 42.
1 1 'in ■ N Y) 26, 37 X. V. Supp. 885;

§129 DEBTOR NO! NECESSARY DEFENDANT.

the bill, who is also a proper [the court did not sa\ nei
sary] defendant, according to the principles which govern
courts of chancery as to parties, and who has been served
with process within the district and answered the bill ; but
whose citizenship is not made to appear in such a manner
that the court can take jurisdiction of the case as to him."
A corporation is a necessary party to a creditors' bill
against officers or stockholders who have divided the
assets among themselves.1

In an action for unpaid subscriptions a judgment-ci editor
may join all the stockholders, or if they are too numerous
he should so allege in the bill ;~ and the corporation may
be joined.3 In a suit to set aside as fraudulent a trust
deed giving preferences to creditors, the beneficiaries
should be parties,4 and as we have seen, the debtor must
be joined in a creditor's suit brought to impeach and set
aside a general assignment.5

§ 129. When debtor not necessary defendant. — Fox v.
Moyer6 is an illustration of a case in which the debtor is
not a necessary party defendant ' The plaintiff was a judg-

1 Deerfield v. Nims, 110 Mass. 115. 915; and compare First National

See Swan Land & Cattle Co. v. Frank, Bank v. Shuler, 153 N. V. 170; Buf-

148 U. S. 610, 13 S. C. Rep. 691. fington v. Harvey, 95 I'. S. 103.

2Adler v. Milwaukee Patent Brick ' See Hickox v. Elliott, 22 Fed. Rep.

Mfg. Co., 18 Wis. 57 ; Vick v. Lane, 56 20, citing the text. The courl say:

Miss. 681; Wetherbee v. Baker, 35 " So far as Ben Holladay is concerned,

N. J. Eq. 501 ; Holmes v. Sherwood, his indebtedness to the assignor of the

3 McCra. 405; Bronson v. Wilming- plaintiff is established by the decree,

ton, N. C, Life Ins. Co., 85 N. C. 41 I. and is no longer open to controversy .

3 Wetherbee v. Baker, 35 N. J. Eq. and the transfers and conveyances in
501 ; Perkins v. Sanders, 56 Miss. 733 : question are good against him, and
Patterson v. Lynde, 112111. 196 ; Tay- can only be avoided at the suil of a
lor on Corps., ^ 704. creditor. He lias, then, do interesl in

4 Simon v. Ellison, 90 Va. 157, IT this controversy. Bisindebtedni

S. E. Rep. 836. fixed, and the property sought to be

5 First National Bank v. Shuler, affected has passed beyond his eon-
ISSN. Y. 168. trol, and he cannot be prejudiced, in

6 54 N. Y. 130. See Leonard v. any legal sense, by a decree which
Green, 34 Minn. 140, 24 N. W. Rep. may subject it to the paymenl of his

254

DEBTOR NOT NECESSARY DEFENDANT.

§ *29

ment-creditor with execution returned unsatisfied. He
claimed that his judgment was a lien upon certain real
estate which one of the judgment-debtors had fraudulently
conveyed to the defendant, and he commenced this action
to have the cloud resting on the lien of his judgment
removed, and to have his judgment satisfied out of this land,
notwithstanding the conveyance. Earl, C, in delivering
the opinion of the New York Commission of Appeals,
said : "The conveyance was good, as between the parties
thereto, and hence no one had any interest to defend this
suit but the defendant, and he was therefore the only proper
party defendant." J Fox v. Moyer was relied upon by the
plaintiff's counsel in Miller v. Hall2 as controlling, but the
Court of Appeals said that the former case was not a cred-
itors' bill, and was plainly to be distinguished from the
other cases which we have noticed. In Burlington v. Har-
vey3 it was urged that the assignee's bill was defective

debts.

Linson

Bump,

Fraud.

Mover,

/// re Kstr-s, (» Sawy. 4o9 : Col-

v. Jackson, 8 Sawy. 365;
Fraud. Conv. 548; Wail,

Conv. i=s; 129, 171 ; Fox v.

■11 N. Y. 128. Tt follows that
while Hen Holladay is a proper party
to tin-, suit, he is not a necessary one
and might have been omitted from
Ihebill. And Ins agents and trustees,
who conveyed this property to Joseph
Holladay under his direction, have
less interest in the suit, or the subject-
matter of it, if possible, than he has.
As against them, also, the convey-
ances an- good. They passed the
legal title to Joseph Holladay. These
parties have no longer any Interest in
the property or power over it. No
relief i- sought against them, and they
cannot !»• prejudiced by anj decree
thai maj be given in the 3uit. The
of (ia\ lords \ . Kelshaw, i Wall.
sl . cited by counsel for Joseph Holla-
day, decides nothing tot he '-out rary
of tin-. K. Idiau . being the debtor

ami grantor in the alleged fraudulent
conveyance, was a proper, although

not a necessary, party in that case.
I'nt, being made a party defendant,
without any averment as to his citi-
zenship, it did not appear that the
court had jurisdiction. Accordingly,
the case was remanded, with leave to
the plaintiffs to amend their bill gen-
erally, which they might do by alleg-
ing the citizenship of Kelshaw, if it
was sufficient to give the court juris,
diction, or by omitting his name from
the hill. The general ride is that no
person need he made a party t<> a suit
who has no interest in it. and against
whom not hing i- demanded."

'See Campbell v. Jones, 25 Minn
155 : Bomar v. Means, ■'.: S. < '. .VJO, 16
S. K. Rep. 537 ; Blanc v. l'a\ master
Mining Co., 95 Cal, 524, 30 Pac. Rep.
765.

It) N. V
\ . 252.
95 r. s.

Supr. Ct. 268, affi'd in V

io:j.

§129 DEBTOR MM NECESSARY DEFENDANT. -55

because the bankrupt was not joined. Bradley, [., after
remarking that the bankrupt had no interest to be affected
except what was represented by the assignee, said : "As to
the bankrupt himself the conveyance was good ; if sel aside
it could only benefit his creditors. He could not gain or
lose, whichever way it might be decided." ' In Potter v.
Phillips? the court said that though the debtor was a proper
party, it did not see why he was to be regarded as a neces-
sary party ; whether the conveyances were fraudulent or in
good faith the property irrevocably passed beyond his con-
trol. He could be prejudiced in no way, in a legal sense,
by a determination which subjected the property to the
payment of his debts. So it was decided in Minnesota
that where a creditor sold land which the debtor had fraud-
ulently alienated, the fraudulent grantee might bring an
action against the purchaser to determine his title without
brineine in the fraudulent crrantor.3 It is remarked in
some of the cases that the fraudulent grantor should be
joined because it is his conduct that is to be investigated.
The Supreme Court of Mississippi observe, however, that
the object of the proceeding is to reach property, not char-
acter. In truth the proceeding is in rem, and while the
complainant may, if he choses so to do, join as defendants
all who are connected with the property, or the transac-
tions to be investigated, he is only compelled to join those
in whom the legal title vests, or those who have a bene-
ficial interest to be affected.4 Cases are cited in conso-
nance with this reasoning.'

'Benton v. Allen, 2 Fed. Rep 448; v. Paymaster Min. Co . 95 Cal. 584, 30

Weise v. Wardle, L. R. 19 Eq. 171 ; Pac. Rep. 765.
Hickox v. Elliott, 22 Fed. Rep. 20. 'Smith v. Grim, 26 Pa St. 95;

2 44 Iowa, 357; Capital City Bank Dockray v. Mason, 18 Me. 178; Laugh-
s'. Wakefield, 83 Iowa 48, 48 N. W. ton v. Barden, 68 Me. 209; Merry v.
Rep. 1059. Fremon, H Mo. 518; Cornell v. Rad-

^ Campbell v. Jones, 25 Minn. 155. way. 22 Wis. 260. See Shaw v. Mill-

<Tavlorv. Webb 54 Miss. 36 : Blanc saps, 50 Miss. 380 ; Jackman v. Robin-
son, G4 Mo. 289.

256 DEBTOR NOT NECESSARY DEFENDANT. § I J<j

What inference then is to be deduced from this mass
of authority, and which class of cases embodies the best
log-ic ? Should the debtor be joined as a defendant in
an action to annul a fraudulent transfer? The best
reasoning of the authorities seems to establish the rule
that the debtor's presence as a defendant is superfluous
in suits brought against fraudulent alienees to annul
specific covinous conveyances. The transfer is conclu-
sive upon him, and hence his joinder cannot aid the
creditor, or benefit the debtor ; the suit is a proceeding in
rem to clear the title to the property only so far as the
creditor's needs may require ; under established principles
of law the debtor can gain nothing by it ; he is practically
a stranger to the property, nor can he be prejudiced by
a decree which applies the property to the payment of a
fixed judgment debt. On the other hand, where the suit
prosecuted is purely a creditors' bill, embodying the
elements of a bill of discovery, the debtor's presence
would seem to be essential to the jurisdiction of the
court.1 The practitioner must be careful to distinguish
between an action instituted to reach specific property
fraudulently alienated, and a suit brought to discover
equitable interests which are not subject to execution,
and the title to which is in the debtor. In the latter case
the debtor must of necessity be a defendant. Especially
should the complainant make the debtor a defendant
where it appears that parties holding separate property
under distinct conveyances are joined. In such proceed-
ings the debtor constitutes the king-pin of the action. In
any case it is the safer and more prudent practice to
summon the debtor as a defendant, for a vexed question
is then put at rest, and the misfortune similar to that

Compare Firsl National Bank v. Shuler, 153 N. V. 174.

§ 130 DEFENDANTS NOT EQ1 AIM G1 II IN. j;;

which overwhelmed the creditors' representative in Mil-
ler v. Hall ! will be averted.2

§ 130. Defendants need not be equally guilty A.S a
general rule where the subject-matter of a suit is real
or personal property, and the purpose of the plaintiff is to
set aside fraudulent judicial proceedings in reference to it,
the complainant should make all persons parties who
were actors in the proceedings, especially if they claim a
present interest in the property in dispute. A complaint
so framed is not demurrable on the theory that there is an
improper joinder of several causes of action against
different persons ; on the contrary it is regarded as a
single cause of action affecting all the defendants.
Westcott, J., in delivering the opinion of the Supreme
Court of Florida,3 very appropriately says : " It is
apparent from the case stated that all of the defendants
were not jointly and equally concerned in each distinct
fraudulent act charged. There was a series of acts in this
well-conceived network of fraud, all terminating in tin-
deception and injury of the plaintiff. The defendants
performed different parts in the drama. These acts
affected the property of the debtor — some the personal
property, others the real estate. The object of the plain-
tiff in this complaint is to get the assistance of this court
in unravelling this network of fraud in respect to each
species of property, and to have a due application of the
same to the payment of the claims of creditors. 1 he
right of the plaintiff is against the whole property, and his
right against all portions of it is of the same nature. The

1 70 N. Y. 252. against whom no fraud or conceal-

2 When the sole design of a bill is ment is imputed, no discovery Bought,
to have individual property of one and no ruling asked, is neither a nec-
partner claimed to have been fraudu- essary nor a proper party. Randolph
lently alienated, applied in payment v. Daly. 16 N. J. Eq. 315.

of a firm judgment, another partner 3 Howse v. Moody, 1 I Fli

1/

258 FRAUDULEN1 ASSIGNEE. §131

decree in chancery and the sale thereunder are but acts of
fraud, which are sought to be set aside in order to enforce
this general riofht. In fact, the ri^ht to set aside these
proceedings can only coexist with an equity affecting the
property which was the subject of them. There can be
no such thing as an equity or right to set aside these pro-
ceedings distinct and independent of rights and equities
attached to the subject-matter that they affect. The
result is that these are not several causes of action, but
are acts which, connected with the debt due plaintiff, con-
stitute a ground for one action alone."

§ 131. Fraudulent assignee or grantee must be joined.— A
judgment as a general rule only binds parties and privies.
As the property which is the object of pursuit is usually
in the hands of a transferee, it follows that such person
must be joined as defendant, so that he may be affected
and concluded by the judgment. The proceeding would
be futile if it omitted him.1 It was accordingly held, in
a case where a creditors' bill was filed to reach moneys
due upon a mortgage which was alleged to have been
fraudulently assigned by the debtor, that the assignee of
the mortgage, although he resided out of the State, must
be joined as a defendant.2 It is the plaintiff's mis-
fortune if he is unable to secure the presence of the
necessary parties.3 Parties to intermediate conveyances

1 Sage v. Mosher, 28 Barb. (N. Y.) (Va.) 15 ; Jackman v. Robinson, 64

287 In Stillwell \. Stillwell, IT N. Mo. 289 ; Bamniond v. Budson River

J. Eq. 275, 20 All. Rep. 960, it was 1. & M Co, 20 Bail .. (N. Y.) 379;

held that where a decree was made Copis v. Middleton, 2 Madd. 410;

setting aside the conveyance as Thornberry v. Baxter, 24 Ark. 7C ;

fraudulenl to which the fraudulent Winslow v. Dousman, 18 Wis. 156;

grantee was not made a party, and a Hamlin v. Wright, 23 Wis. -491;

sale was had under such decree an Main- v. Norwich Union Fire Ins.

action could be broughl bi the Soc, 127 N. Y. 461. 28 N. E Rep. 391.

grantee to eel aside such sale. 3 Mahr v. Norwich Union Fire Ins.

Gi Schenck, 1 X Y. 160. Soc, 127 N. Y. 452, 28 N. E. Rep. 391.
richenor \ . Allen, 13 < rral t.

§132 JOINING DEFENDANTS.

need not be joined,1 nor grantees pendente lite, for they
stand in no better position than those under whom they
claim. ~

In a suit to set aside a fraudulent conveyance there is
no necessary inconsistency in averring the grantee to be a
fictitious person, and stating that the deed in his name
was made to hinder and defraud creditors/'

§ 132. Joining Defendants.— The rules with reference to
the joinder of defendants will be noticed somewhat at
length in discussing the subject of complaints bad for
multifariousness. J The cases there reviewed seem to
establish the principle that different fraudulent purchasers
of distinct pieces of property may be joined as defend-
ants. In such cases the debtor is a necessary party, as he
is " the very link which unites them all together, the com.
mon centre to which they are all connected, and it is
because he is a party defendant that they can all be
joined in one action as co-defendents."'' The defendants
in such cases are said to be united in a common design.
Each is charged with colluding with the debtor in order
to defraud his creditors. Where there is one entire
case stated, as against the debtor, it is no objection that
one or more of the defendants to whom parts of the prop-
erty had been fraudulently conveyed had nothing to do
with the other fraudulent transactions.0 The case
against the debtor is so entire that it cannot be prose-

1 Stout v. Stout, 77 Ind. 537: Van-Valkenburgh, 6 N. Y. 190 ; Wal-
Walter v. Riehl, 38 Md. 211 ; Jack- ier v. Shannon. 53 Miss. 500; Baulk-
man v. Robinson, 64 Mo. 289. nighl v. Sloan, IT Fla. 284 ; Donovan

2 Schaferman v. O'Brien, 2S Md. v. Dunning, 69 Mo. 136; Van Kleeck
060. v. Miller, 19 X. B. R. 184; Bank v.

3Purkitt v. Polack, 17Cal. 327. Harris, 84 X. C. 206 - L50.

4 See £§ 150, 151, 152. Chase v. Searles, 45 X. 11 51 1. Alii

5Potueroy's Remedies and Rome- son v. Weller, 6 T. & C X. Y 291,

dial Rights, g 347 ; Lawrence v. Bank affi'd 66 X. V. 614 ; Boone Count} \.

of the Republic, 35 N. Y. 324 ; Trego Keck, 31 Ark. 487.

v. Skinner. 42 Md. 432; Haines v. sSeeWood v. Sidnej Sash, Blind,

Hollister, 64 N. Y. 1 ; Vanderpoel v. etc. Co., 92 Hun | X. Y. 24

260

I I IN\ EYANCE PENDING SI I I.

§ IS^a

cuted in several suits, and yet each of the defendants is
a necessary party to some part of the case stated.1 If,
however, the party reached and made defendant has a
remedy over against other parties for contribution or
indemnity, it will be no defense to the primary suit
against him that such persons are not made parties. A
creditor might never get his money if he could be stayed
until all the parties who were obligated could be made to
contribute their proportionate shares of the liability.2

£ 132a. Conveyance pending suit. — The law is established
that a party who intermeddles with property in litigation
does so at his peril, and is as conclusively bound by the
results of the litigation, whatever they may be, as if he
had been a party to it from the outset.3 Were the rule
otherwise endless entanglements would result.'

'Way v. Bragaw, 16 N. J. Eq.
216. Compare A.tty.-Genl. v. Corpo-
ration of Poole, 4 Mylne & Cr. 31 ;
Brinkerhoff v. Brown, 4 Julius. Cli.
N. Y 1 671 ; Fellows v. Fellows, 4
t'ow. (N Y.) 682; Boyd v. Hoyt, 5
Paige 1 X. Y.) 78 ; Turner v. Robinson,

I Sim. & s. 313 ; Marx v. Tailer, 12
N. Y. Civ. Pro. 226. In Rosenthal v.
Coates, 11* CT. S. 147, the court say:
"The suit was, in effect, one hy the
assignee to disencumber this fund in

I I is possession of alleged liens, and the
fact that each defendanl had a sepa-
rate defense to this Claim did not create
a separable controversj as to him.
Fidelity Insurance Co. v. Huntington,
11? r. s. 280 ; Graves v\ Corbin, 132
r. s. 571, 586 ; Young v, Parker, 132
U. s. 267."

Marsh v. Burroughs, 1 Woods,
168. Where an action is brought to
forfeil a charter a lessee of the corpo-
ration may be Lei in to defend. Peo-
ple v. Aibanj & Vt R. R Co., 77 N.
Y. 282. The husband of the tra

proper defendanl in an
action to sel aside the transfer. Lore

v. Dierkes, 19 J. & S. (N. Y.) 144. \s
to when a cause of action to set aside
a mortgage on the ground of usury
and a cause of action to annul a
fraudulent conveyance cannot be
joined, see .Marx v. Tailer, 12 N. Y.
Civ. Pro. 226. In Artman v. Giles,
155 Pa. St. 11 1, 26 All. Rep. 668, the
bill was filed by a contract-creditor to
prevent judgment-creditors and the
sheriff from unking a sale. The
court says: "It joins separate re-
spondents, acting in different capaci-
ties, upon different rights, and not
chargeable with any joint liability
or interest in the relief sought.
Among these respondents are the
sheriff ;iikI the assignee for the bene-
fit of creditors, neither of whom is a
proper party to a bill of this nature."
Tilton v. Cofield, 93 U. S. 168;
Inloes' Lessee v. Harvey, 11 Md. 524;
Salisbury v. Morss, 7 Lans. (N, Y.)
359. affi'd 55 N. Y. 075 ; Bovey v.
Elliott, 118 N. Y. 133, 23 N. E. Rep.
575 : Lacassagne v. Chapuis, 144 TJ.
s. 125, 12 S. ('. Rep. 659.

'See ^ 157.

§§ I32b, 133 ASSIGNEE AND RECEIVER AS~DEFENDANT.

132b. Bringing in representatives. Where, pending an
action to set aside an assignment and certain specific
transfers, the debtor dies, the action cannot proceed to
judgment without the presence of his personal represen-
tatives.1

§133. Assignee and receiver as defendant. — In a case
which arose in New York, in which the assignee of an
insolvent copartnership had been joined as defendant,
the Court of Appeals said : " As this is an equity action,
the assignee of the firm, who had received its assets and
never rendered any account for the same, was a proper
party. He represents the firm, stands in its place so far
as property is concerned, and the avails of the same in his
hands are first liable to be appropriated to pay the
demands of the plaintiffs. No valid reason exists why a
person thus situated is not a proper party, in connection
with the survivors of the copartnership and the represent-
ative of the deceased partner."3 If an action is brought
by a judgment creditor to reach property fraudulently
alienated, the fact that the debtor has made a general
assignment for the benefit of creditors is no defense to
the debtor or to his fraudulent alienee, because they can
have no interest whatever in the fund, and are not vested
with the right to guard any interests the assignee may
possibly have ; it is the assignee's exclusive privilege to
personally assert such rights.3 Furthermore, under some
circumstances, the creditor may maintain an action in his
own name to set aside a fraudulent conveyance, even
though the assignee has the same right, if it can be shown
that the assignee is in collusion with the fraudulent par-
ties, or has refused on proper request to become a

1 First National Bank v. Shuler, » Fort Stanwix Bank v. Leggett. 51

153 N. Y. 171. N. Y. 554.

'-' Haines v. Hollister, 64 N. Y. 3.

262 OBJECTION AS TO NON-JOINDER. §§ 133a, 1 34

plaintiff.1 In any case the defense of the non-joinder of
the assignee, to be available, should be taken by demurrer
or answer,2 disclosing the names of the omitted parties,3
or it will be considered waived.4 Chattels fraudulently
assigned may be attached by a creditor in the hands of a
voluntary assignee.5

§ 133a. Suing directors. — The receiver of a national
bank may, in his own name or in the name of the corpo-
ration, prosecute directors for the benefit of depositors
and creditors of the bank for negligence or failure to
perform duties.0 The corporate capacity of the bank
continues till its affairs are wound up and its assets dis-
tributed.7 The directors are held liable for a want of
that care which a man of ordinary prudence would exer-
cise in the management of his own affairs.8 But each
case rests largely upon its own facts, and the general
theme is too broad for extended discussion.

> 134. Objection as to non-joinder — How raised. — Dur-
and v. Hankerson11 is perhaps an extreme illustration of
the effect of the failure to raise the issue as to non-joinder.
That action was prosecuted by a creditor to cancel a
deed. The conveyance was held to be good, but it
appeared that the debtor had taken back a mortgage
upon the property, which remained unsatisfied, and the
evidence tended to show that the debtor had assigned

1 Bate v. Graham, 11 X. Y. 237 ; 28 X V. 45; Frost v. Mott, 34 N. Y.

Barvey v. McDonnell, L13 X. Y. 531, 253.

21 X. K. Rep. B95. See§ 114. »Movius v. Lee, 30 Fed. \U>V. 300 ;

Fori Stanwix Bank v. Leggett, 51 Bank v. Kennedy, 17 Wall. 19.

X. V. 551. 'See Rosenblatt v. .Johnston, 104

P.;n State Iron (o. v. Goodail, 39 U. S. 402.

X. II. 234. hHun v. Gary, 82 N. Y. 05. Com-

'Annin v. Annul, 24 N. J. Eq. 184; pare Briggs v. Spaulding, ill U. s.

Lyman v. Place, 2U X. .1. Eq. :'.<>. 132, 1 1 s. I '. Rep. 924.

Bess v. Bess, 111 N V 308, 22 X. "39 X. V. 287.
1; Rep 956. See Rinchej v. Stryker,

§ 135 MISJOINDER OF ( a i SES OF u HON.

the mortgage to a person not a party to the suit. It was
proved and found that this assignment was fraudulent,
and the purchaser from the debtor was directed to pay
the mortgage to a receiver. The purchaser strenuously
resisted this decree, upon the ground that the pretended
assignee of the mortgage not being a party, was not
bound by the judgment, but the learned Woodruff, [.,
held that while it presented a case of possible hardship,
as payment might perhaps be enforced a second time,
yet the purchaser should have protected himself by raising
the objection in the manner prescribed by law. The
defendant who neither by answer nor demurrer takes such
an objection, waives it, and therefore cannot afterward In-
heard to object on that ground to any decree to which,
upon the facts alleged and proved, the plaintiff ma)' be
entitled. The cause thereafter proceeds, as to him, with
the like right in the plaintiff to a decree as if the sup-
posed proper or necessary party had been brought into
court.

We may here observe that the appointment of a
receiver does not absolutely dissolve a national bank,
and that in an action to establish the rejected claim of a
creditor, the bank and the receiver may both be made
parties defendant.1

§ 135. Misjoinder of causes of action. — A cause of action
against sureties upon the bond of an administrator, claim-
ing a breach of its condition, cannot be united in the
same complaint with a cause of action arising out of the
fraudulent disposition of property,- against the adminis.
trator of the deceased intestate and others.

'Green v. Walkill Nat. Bank, 7 son, 8 Wall. 498; <'ii\ of Lexington

Hun (N. Y.) 04; Brinckerhoff v. v. Butler, 14 Wall. 283.
Bostwiek, 88 N. Y. 61; Turner v. Howse v. Moody, I1 Fla. 59.

First Nat. Bank, 26 Iowa, 562. Com- Compare generally, N. Y. & N. B, R

pare Pahquioque Bank v. Bethel R. Co. v. Schuyler, [1 N. V. 607;

Bank, 36 Conn. 325; Kennedy v. (Jil>- Town of Venice v. Woodruff , 68 N.

Y. 470.

-"4

HEIRS AND LEGATEES.

SI36

sj 136. Executors, administrators, heirs, and legatees. —
We have already considered the status of personal repre-
sentatives,1 heirs, and legatees,2 as complainants. Let
us briefly advert to the question of their joinder as
defendants. In Allen v. Vestel,8 it was said that a cred-
itor, in an action to set aside a fraudulent conveyance to
heirs of a deceased debtor, should allege that the per-
sonal property had been first exhausted, and should make
the administrator a party ; or, if there was none, should
secure one to be appointed.1 This is but another phase
of the general question as to the necessity of joining the
debtor as a defendant. Authorities can be cited to the
effect that the administrator is not a necessary party to
the creditor's proceedings,5 and to the opposite effect,6
and holding that heirs need not be joined,7 and, in New
York, as is elsewhere shown,8 a distinction is made as to

1 See §§ 112, 113.

*See ? 121.

'60 1ml. 245.

; Boggs v. McCoy, 15 W. Va. 344.
Contra, Jack man v. Robinson, 64 Mo.
289. Compare Smith v. Grim, 26 Pa.
St. 95.

Dorkray v. Mason, 4S Me. ITS;
Merry v. Fre 1, 4-1 Mo. 518; Tay-
lor v. Webb, 54 Miss. 36; Corn. 'II v.
Radway, 22 Wis. 260; Zoll v. Soper,
75 Mo. 462 : Jaekman v. Robinson, 64
Mo. 289. See Coffee v. Norwood, 81
Ala. 516; Munn v. Marsh, 38 N.J.
Eq. 410.

• Alexander v. Quigley, 2 Duv. (Ky.)
400; Postlewail v. Hours, 3 Iowa,
366 : 1 oates v. Day, 9 Mo. 300 ; Boggs
v. McCoy, 15 W. Va. 344 ; Pharis v.
Leachman, 20 Ala. 662. See Bach-
man v. SepuB eda, 39 ( !al, 688.

Smith \. Grim, 26 Pa. St. 96 ;
Wall v. Fairley, 73 X. C. 464 ; Shaw
\ Millsaps, 50 .Mis>. 884. Compare
Simmon.-, v. Ingram, 60 Miss. 886.

The conveyance made by their ances-
tor, it is said, though fraudulent,
concludes them, and effectually cuts
off all their interest in the property.
Harlin v. Stevenson, 30 Iowa, 371. It
may here be observed that the power
of a court of equity to charge real
estate in the hands of heirs with the
p.i\ mcnt of the ancestor's debts is un-
doubted. Chewett v. Moran, IT Fed.
Rep. 820: Payson v. Hadduck, 8 Hiss.
293 ; Riddle v. Mandeville, 5 Cranch,
323; Stratford v. Ritson, 10 Brav. -2:,:
Ponsford v. Hartley, 2 Johns. &. II.
730; Adams Eq. 257; Story's Eq.
Plead. 99-102. By statute in New
York heirs of an intestate who have
inherited I md must, in certain cases,
be sued jointly, and not separately,
for a debt due from the deceased.
Krllog v. Olmstead, li How. Pr. (N.
Y.i487. See Selover v. Cor, 03 N.
Y. 438.

8 See ?? 128, 129.

§ 136

HEIRS AND I EGA fEES.

the form of the action, the debtor being a necessary
party in a creditor's action,1 but not in a suit in equity to
remove a fraudulent cloud.2 Where this distinction is
recognized, it might be extended to cover the cases of
personal representatives and heirs. The United States
Supreme Court leans to the view that in a suit to chai
real estate with the payment of a debt, the heirs and
devisees should be made parties to the bill.3

In a creditors' bill under which an executor had been
removed from office, the Supreme Court of South
Carolina held that the legatees were necessary parties,
and that the receiver appointed in the place of the
deposed executor did not represent them.4 Again the
Supreme Court of Ohio has decided, that where the
grantee dies after the rendering of a decree in favor of a
judgment-creditor setting aside a conveyance and order-
ing a sale of the property, the failure to revive the decree

1 Miller v. Hall, 70 N. Y. 252.

2 Fox v. Moyer, 54 N. Y. 130.

3 Walker v. Powers, 104 U. S.
251.

Administrator not necessary party
— Cornell v. Radway. — In an action
which arose in Wisconsin, it appeared
that a debtor in his lifetime received
an absolute deed of land and failed
to record it, and subsequently de-
stroyed the deed with a fraudulent
design, and procured the grantor to
execute another deed to a third per-
son without consideration. A judg-
ment-creditor of the deceased debtor,
whose judgment was recovered while
the deceased held the first deed,
brought a suit against the third party,
and the widow and heirs of the de-
ceased debtor, to establish the debtor's
title and enforce the lien of the judg-
ment. Objection was raised that the
administrator was not a party. The

court said : "This is well answered
when it is said that this is a proceed-
ing for the benefit of (lie estate, and
that the administrator could make n«>
opposition if he were present. Wedo
not see, therefore, bow the estate can
be prejudiced or the plaintiff's righl
to relief affected by the absence of
the administrator. The conveyance
to the defendant Jones [the third
party] being sel aside, and the title
adjudged to have been in thedeceased
judgment-debtor from the time of his
purchase, the plaintiff will then pro-
ceed as if the debtor had died seized
of the land with lull evidence of title-
in himself. The administrator is nol
a aecessarj partj ." < lornell \ . Rad-
way, 22 Wis. 265. Compare Hentz v.
Phillips, 23Abb. N. C. V Y 15.6N.
Y. Supp. L6.

4 Fraser \ . < lharleston, 18 S I
533.

266 TRUSTEE AND I EST1 I QUE TRUST. § [37

against the heirs of the grantee did not affect the title of
a purchaser under the decree.1

What then is the result of the cases upon this point ?
Necessarily much the same conclusion must be reached
as is gathered from the authorities upon the question of
the joinder of the debtor in an action to reach assets in the
hands of a third party. We have already seen that the
personal representatives may, in certain cases, annul covin-
ous alienations made by the deceased, but only so far as
may be necessary to satisfy creditors.2 In States where
the right of the creditor to seek direct relief is upheld, it
is difficult to see why the personal representatives or
heirs should be joined ; the conveyance is conclusive
upon such parties, and their presence in the suit will
neither aid the creditors nor benefit them.

;: 137. Trustee and cestui que trust. — Mr. Pomeroy
says :3 " There is a broad distinction between the case of
an action brought in opposition to the trust, to set aside
the deed or other instrument by which it was created, and
to procure it to be declared a nullity, and that of an action
brought in furtherance of the trust, to enforce its pro-
visions, to establish it as valid, or to procure it to be
wound up and settled. In the first case, the suit may be
maintained without the presence of the beneficiaries, since
the trustees represent them all and defend for them."
The Supreme Court of Georgia,4 adopting this general
rule, held that where a creditor claims not under but in
opposition to a deed of trust made by his debtor, and
seeks to set the same aside on the ground that it is, as to
him, fraudulent and void, he is at liberty to proceed against
the fraudulent trustee who is the holder of the legal
estate in the property, without joining the cestui que

Beaumont v. Herrick, 21 Ohio St. 'Remedies and Remedial Rights,

1 10. ? 3.-,7.

- • .1 28, 1 '-".1 4 Tucker v. Zimmerman, 61 Ga. 599.

§ 1 3S PARTY HAVING LIEN.

trust! The oreneral rule is that, in suits affectim-- the
trust, the trustee and res//// que trust must be joined.8
There is an exception to the rule in case of voluntary
general trusts for the benefit of creditors, growing out of
the difficulty of joining all the creditors, and in such case
it is sufficient to bring in the trustee, and the creditors
will be bound on the principle of representation.'5
A decree setting aside the deed, or charging the property
with the creditor's demand, will, if fairly and honestly
obtained, conclude the cestui que (rust as being repre-
sented by the trustee, but is subject to be impeached for
fraud or collusion.4

§ 138. Party having lien. — It certainly is reasonable, and
seems to be recognized as an established rule, that, where
a party has a lien, by way of mortgage for example, upon
the property which is the subject of contention, and no
ruling is asked against such lien, and it is not assailed, but
the title under it is conceded to be valid, there is no
ground upon which the holder of the lien can be regarded
as a necessary party to the suit.5 The creditors, having
elected to avoid the fraudulent conveyance, take the prop-
erty as though the transfer had never been made, and
subject to all lawful liens upon it.,; But where the lien-
holder is made a party to the suit, and the validity of
his claim is investigated and disposed of by the judgment
adversely to the validity of the lien, a sale by the receiver

1 Rogers v. Rogers, 3 Paige (N. Y.) B Trego v. Skinner, 42 Bid. 151. See
379. See Phenix Nat. Bk. v. A. B. Walter v. Riehl, 38 Md. 211 : Venable
Cleveland Co., 11 N. Y. Supp. 877. v. Bank of the United States, 2 Pet.

2 Landon v. Townshend, 112 N. Y. 107; Erfort v. Consalus, i: Mo. 218.
99, 19 N. E. Rep. 424. Compare Reynolds v. Park, 5 Lans.

3 Landon v. Townshend, 112 N. Y. (N. Y.) 14!); reversed 53 N. Y. 36.

99. 6 Hutchinson v. Murchie, 7 1 Me.

4 Russell v. Lasher, 4 Barb. (X. Y.) 190; Avery v. Backley, 20 Wall. HI.
232; Wheeler v. Wheedon, 9 How. Compare Murphj v. Briggs, 88 \. Y.
Pr. (N. Y.)300. 446.

268 STOCKHOLDERS. § 1 39

will transfer to the grantee a title superior to such lien or
claim.1

§ 139. Stockholders. — The assets of a corporation are, as
we have seen,' regarded as, in a sense, a trust fund for the
payment of its debts/5 and its creditors have a lien upon
it, and the right to priority of payment over its stock-
holders.4 Hence where property of a corporation had
been divided among" its stockholders before its debts had
been paid, the court decided that a judgment-creditor,
with execution returned unsatisfied, could maintain an
action in the nature of a creditors' bill against any one
stockholder to reach whatever had been received by him,
whether wrongfully or otherwise. It is unnecessary to
make all the stockholders defendants.5

The question of the statutory liability of stockholders
to the creditors of a corporation where the capital has
not been all paid in and a certificate to that effect filed
as required by statute, has given rise to much litigation
in New York and other States where such provisions
exist. This liability is sometimes said to rest in contract,6

1 Sliand v. Hanley, 71 N. Y. 324. 476; Peters v. Bain, 133 U. S. 691,

See Chautauque Co. Bank v. Risley, 10 S. C. Rep. 354.

19 N. Y. 372. Where a debtor has * Bartlett v. Drew, 57 N. Y. 587:

conveyed property in fraud of cred- Upton v. Tribilcock, 91 U. S. 45-47 ;

[tors, and the alienee at the debtor's Sawyer v. Hoag, 17 Wall. 610: Cole

request lias given a mortgage upon it v. Millerton Iron Co., 133 N. Y. 164,

to a creditor whose debt existed at 30 N. E. Rep. 847.

the date of the conveyance, the latter 5 Bartlett v. Drew, 57 N. Y. 587;

is regarded as a purchaser " for a val- Wheeler v. Millar, 90 N. Y. 361. A

liable consideration," 2 R. S.N. Y. stockholder of an insolvent bank may

137, §5; and although the conveyance be compelled to pay an unpaid sub-

i- ~f\ aside by other creditors, the lien scription to the assignee, and he has

of the mortgage cannot be affected, no right to set off the amount of his

Murphy v. Briggs, VM N. Y. 146, dis- deposit in the bank. Macungie Sav-

tinguishing and limiting Wood v. ings Bank v. Bastian, 1 Am. Ensolv.

Robinson, 82 X. Y. 564. Hep. 484.

|| 117-119; Wait on Insolvenl 6 Flash v. Conn, 109 U. 8. 371, 3 S.

< iorps. Chap. VII. C. Rep. 263 ; Wiles v. Suydam, 64 N.

Swan Land & Cattle Co. v. Frank, Y. 173 ; Cochran v. Wiechers, 119 N.

148 U.S. 609, 18 S. ( !. Rep. 691 ; Fogg Y. 403,23 N. E. Rep. 803.
\. Blair, 189 U. 8. 126, US. 1'. Rep.

§ 139

STi h kik ILDERS.

but the liability of directors for failure to file an annual
report, as directed by statute, is considered to be penal.1
The statute in the former case in effect withdraws the
protection of the corporation from the stockholders, and
holds them liable as copartners.- If the liability was
penal the statute could, of course, have no operation in
another State,3 for penal statutes are strictly local in their
operations and results.4 Hence it was held that, as the
obligation imposed upon a stockholder under the New
York statute rested in contract, it could be enforced in
Florida,5 the rule being that a transitory action may be
brought in any court having jurisdiction of the parties and
the subject-matter.'5

1 Gadsden v. Woodward, 103 N. Y.
244, 8 N. E. Rep. 653; Veeder v.
Baker, 83 N. Y. 160 ; National Bank
v. Dillingham, 147 N. Y. 609, 42 N. E.
Rep. 338.

2 Corning v. MeCullough, 1 N. Y.
17. See Rogers v. Decker, 131 X. Y.
492 ; Rogers v. Decker, 62 Hun (N.
Y.) 17, 16 N. Y. Supp. 407 ; National
Bank v. Dillingham, 147 N. Y. 608,
42 N. E. Rep. 338.

3 Flash v. Conn, 109 U. 8 . 376, 3 S.
C. Rep. 263; Marshall v. Sherman,
148 N. Y. 25, 42 N. E. Rep. 419 : Hunt-
ington v. Attrill. 146 U. S. 657, 13 S.
C. Rep. 224.

4 See The Antelope, 10 Wheat, 66 ;
Huntington v. Attrill, 146 U. S. 666,
13 S. C. Rep. 224 ; Scoville v. Can-
field, 14 Johns. (N. Y.) 338 ; Western
Transp. Co. v. Kilderhouse, 87 N. Y.

430; Lenimon v. People, 20 N. Y.
562; Henry v. Sargeant, 13 X. II.
321: Story's Conflict of Laws (8th
ed.), § 621.

5 Flash v. Conn, 109 U. S. 379, 3 S.
C. Rep. 263.

"Denniok v. Railroad Co., 103 (J. S.
11; Texas A: Pacific Ry. Co. v. Cox,
L45 U. S. 593, 12 S. ('. Rep. 905 ; Mar
shall v. Sherman, 84 Hun (N. Y.) 190.
32 N. Y. Supp. 193. We cannot here
venture, except incidentally, into the
wide field regulating the remedies <>f
creditors against insolvent corpora-
tionsor their officers. See Wait en
Insolv. Corps. Chap. II. But it may
be noted that a creditors' bill may be
filed against a county. Lyell v. Super-
visors of St. Clair, 3 McL. 580 ; Wait
on Insolv. Corps. §111.

CHAPTER IX.

COMPLAINT.

| 140. Recitals of the complaint.
141. Pleading fraud.

143. Evidence not to be pleaded.
14:>. Alleging insolvency.

144. Allegations concerning consid-

eration.

145. Fraudulent intent.
140. Pleading in equity.

147. Seeking discovery.

148. Excusing laches — Concealment

of fraud.

149. Explaining delay — Discovery of

fraud.

§ 150. Complaints bad for multifari-
ousness.

151. ) Pleadings held nut niultifari-

152. I oils.

153. Alternative relief.

154. Attacking different convey-

ances.

155. Prayer of complaint — Variance

— Verification.

156. Amendment.

157. Description — Lis pendens.
157m. Change of venue —Territorial

jurisdiction.

§ 140. Recitals of the complaint.— To successfully impeach
a fraudulent conveyance, it ordinarily devolves upon the
complainants to aver in the pleading that they were
creditors at the time of the alienation in controversy,1 and
to state against whom the judgment proceeded upon was
recovered.3 The complaint will ordinarily be considered
defective unless it appears upon its face that an indebted-
ness exists,3 and that the plaintiff has exhausted his
remedy at law ; 4 and such averments cannot usually be

1 Merrell v. .Johnson, 96 III. 230
[Thre v. Meluui, 17 Bradw. (Ill ) 182
Donley v. McKiernan, 62 Ala. 34
Walthall v. Rives, 34 Ala. 91. Com-
pare Newman v. Van Duyne, 42 N. J.
Eq. 185.

'■ Lipperd v. Edwards, 39 End. 169.
See 1 lhap. IV. a bill in chancerj is
nol good as an attempt to sel aside a
fraudulent conveyance, procure d by
a debtor to be made to his daughter, if
it neither alleges thai there is a judg

nient against the father, nor that the
debt due at the time the conveyance
was made is still due, and fails to pray
for such relief. Ferguson v. Bobo, 54
Miss. 121.

Elwell v. Johnson. :; Hun (X. Y.)
558, 71 N. V. 80: Carpenter v. Os-
born, 102 N. Y. 558, 7 N. E. Rep.
823.

Beardsley Scythe Co v. Foster, 36
X. Y. 565. See Allyn v. Thurston. 53
N. Y 622 ; Suydam v. Northwestern

§140 RECITALS OF THE COMPLAINT. .71

supplied by an allegation of a total want of property,1 or
the uselessness of an execution,2 and, if it does not appear
that the execution was issued to the county of the debt-
or's residence, or other proper county, the complaint is
not aided by an averment that it was returned unsatis-
fied.3 It must appear that a debt or duty due to the
plaintiff has been in some way injuriously affected by the
conveyance attacked.1 According to some of the cases
it is not sufficient to entitle the creditor to the aid of a
court of equity merely to show that the debtor made a
fraudulent disposition of a portion of his property. The
complainant must set forth that the alienation of prop-
erty complained of embarrassed him in obtaining satis-
faction of his debt, " for if the debtor has other property
subject to the judgment and execution sufficient to satisfy
the debt, there is no necessity for the creditor to resort to
equity."5 An allegation that the execution has been
returned wholly unsatisfied, and that the defendant has
no other property out of which the plaintiff could collect
the judgment, has been held sufficient on a demurrer
based on the contention that these allegations failed to
show that the defendant did not have sufficient property
at the time of the conveyance.0

Ins. Co., 51 Pa. St. 394; Scott v. Mc- " A.lsit v. Sanford, 23 Hun <N. Y.i

Farland, 34 Miss. 3G3 ; Cassidy v. 45.

Meacham, 3 Paige (N. Y.) 311 ; Spel- 3 Payne v. Sheldon, 63 Barb. (N. Y.)

man v. Freedman, 130 N. Y. 425, 29 176.

N. E. Rep. 765 ; Weaver v. Haviland, 4 Ullrich v. Ullrich, 68 ( !onn. 580.
142 N. Y. 537, 37 N. E. Rep. 641 ; Ad- 5 Dunham v. Cox, 1 * » N. J. Eq. 467.
sit v. Butler, 87 N. Y. 585; Wales v. A complaint alleging that an assign-
Lawrence, 36 N. J. Eq. 209; Easton ment was void on its face and made
Nat. Bank v. Buffalo Chem. Works, to hinder, delay and defraud creditors,
48 Hun (N. Y.) 560, 1 N. Y. Supp. 250. slates one cause of action. Pittsfield
See Chap. IV. Nat. Bank v. Tailer, 60 Bun (N. V l

1 See McElwain v. Willis, 9 Wend. 130, 14 X. Y. Supp. 557.
(N. Y.) 548; Crippen v. Hudson, 13 6 Cook v. Tibbals, 1.2 Wash. 207, 10

N. Y. 165; Beardsley Scythe Co. v. Pac. Rep. 935; Pierce v. I lower, 142

Foster, 36 N. Y. 565 ; Ryan v. Spieth, Ind. 626, 42 N. E. Rep. 228; Hartlepp

18 Mont. 47. v. Whiteley, 129 Ind. 577, 28 N I

-7-

l:l l 1 1 A.LS < IF THE I I (MPLAINT,

§ HO

The bill should recite facts sufficient to indicate that
the judgment cannot be collected without equitable aid.1
This averment is material, and a decree upon proofs with-
out this necessary allegation is said to be erroneous, since
" the defendant cannot be required to meet and overcome
evidence not responsive to the pleadings." 3 General
averments of facts from which, unexplained, a conclusion
of law arises, are sufficient.3 It may be here observed
concerning the rules of pleading that, generally speaking,
it is the right of an antagonistic defendant to have all the
material facts on which relief is sought specifically set
forth in the bill, to the end that such facts maybe admit-
ted or controverted by the answer and testimony ; and
usually no proofs will be admitted unless secundum alle-
gata} Hence, where it is the purpose of the complain-
ants to seek relief for creditors other than themselves,
such intention should be manifested by suitable aver-

Rep. 535, 31 Id. 203. But see Wind-
standley v. Stipp, 132 Ind. 548, 32
X. E. Rep. 302.

Emery \ Yount, I West Coast,
Rep. 499, 7 Col. 109. In an action to
sel aside a conveyance of land upon
tin- ground of fraud the complaint
should aver the delivery of the deed
claimed to be fraudulent. Doerfler v.
Schmidt, 04 Cal. 265, 30Pac.Rep. 810.

Thomas v. Mackey, '■'• Col. 393. In
Randolph v. Daly, 16 X. J. Eq. 317,
the court said : " It is not necessary
to aver thai the firm is insolvent in
order to entitle the complainants t<>
relief. The partnership property may
be amph sufficienl to satisfy all the
debts of 1 he firm, yel it rnaj be so
covered up, or placed beyond the
reach of process, as nol to be amen-
able to execution al law, and to ren-
der the interference of equity essen-
tial to the ends of jusl ice, All 1 hal
can be required is thai it should ap-

pear by the bill that the complainant

has exhausted his remedy at law,
and that the aid of this court is neces-
sary to enable him to obtain satisfac-
tion of his judgment.*' So the com-
plaint need not aver that the defend-
ant has transferred all his property
and is without means to satisfy the
judgment where it shows the re-
turn of execution unsatisfied and
alleges fraud in the conveyance at
tacked. Citizens' Nat. Bk. v. Hodges,
80 Hun (X. Y.) 175, 30 N. Y. Supp.
44.") ; Kain v. Larkin, 141 N. Y. 111.
36 X. E. Rep. 0.

:; Williams v. Spragins, 102 Ala.
430? l5So. Kep.'Ji; ; Pickett v. Pipkin,
HI Ala. 520: Burford v. Steele, 80
Ala. 148.

4 Burt v. Ke.ves, ] Flipp. 72. Un-
certainty in a pleading should he
reached by motion. Moorman v.
Shockney, 95 End. ss.

§i4i

PLEADING FRAUD.

27.}

ments in the bill. It must be alleged thai the plaint ill i ,
the owner of the unsatisfied judgment.1

§ 141. Pleading fraud. — Fraud has been said in a general
way to be a conclusion of law,2 though perhaps, more
correctly speaking, it is the judgment of law upon fa
and intents.'5 Fraud lies in the intent to deceive.4 A
mere general averment that a deed was fraudulent, or that
it was made with the intent to hinder, delay or defraud
creditors, has been regarded as an insufficient method of
pleading. Manifestly no judgment can be given in favor
of a plaintiff upon grounds not stated in the complaint
and no relief can be extended for matters not charged.'
If statements showing fraud are followed by recitals
contradictory thereof or inconsistent therewith, the
pleading is insufficient, though fraud be charged."
" A suitor who seeks relief on the ground of fraud must
do something more than make a general charge of fraud." ;
Peckham, J., has said: "Mere general allegations of
fraud or conspiracy are of no value as stating a
cause of action."8 There must, ordinarily, be averments

1 Ryan v. Spieth, 18 Mont. 49.

2 Horsford v. Gudger, 35 Fed. Rep.
388.

3 See § 13. Hutchinson v. First
Nat. Bk., 133 Tnd. 283, 30 N. E. Rep.
952.

4 Higgins v. douse, 147 N. Y. 415 ;
42 N. E. Rep 6.

6 Dickinson v. Banker's Loan, etc.
93 Va. 502.

6 Truesdell v. Sarles, 104 N. Y. 167,
10 N. E. Rep. 139 ; Southwick v. First
Nat. Bk., 84 N. Y. 420 ; Southall v.
Farish, 85 Va. 410, 7 S. E. Rep. 534.

1 Smith v. Wood, 42 N. J. Eq. 567,
7 All. Rep. 881 ; St. Louis, & S. F. Ry.
Co. v. Johnston, 133 U. S. 577, 10 S. ( '.
Rep. 390; Leasure v. Forquer, 27
Ore. 334, 41 Pac. Rep. 665 ; West Coast
18

Grocery Co. v. Stenson, 13 Wash.
255, 43 Pac. Rep. 35.

8 Wood v. Amory, 105 X. V. 282;
11 N. E. Rep. 636, citing Van Weel v.
Winston, 115 U. S. 228, 6 S. C. Rep.
22 ; Cohn v. Goldman, 76 X. Y. 284 ;
Knapp v. City of Brooklyn, 07 X. Y.
520; Cm-ran v. Olmstead 101 Ala. 692,
14 So.TJep. 398; Leasure v. Forquer,
27 ore. 334, 41 Pac. Hep. 665; Knight
v. Glasscock, 51 Ark. 390, 11 S.W. Rep.
580; Reed v. Bott, 100 Mo. 62, 12 S.
W Rep. 347, 14 Id. 1089. An
allegation thai a mortgage was
fraudulent is not sufficienl to allow
evidence thai part of the sum appar-
ently secured by the mortgage was
fictitious. Blair v. Finlay, '.'< Tex.
210, 12 S. \V. Rep. 983.

74

I AIM \<; FRAUD.

§ 141

of the facts,1 which constitute the fraud, or which tend to
support the conclusion/ Relief will not be afforded
upon the ground of fraud unless it be made a distinct
allegation in the bill, so that it may be put in issue by the
pleadings.3 " The words ' fraud ' and ' conspiracy ' alone,
no matter how often repeated in a pleading, cannot make
a case for the interference of a court of equity."4 In
Flewellen v. Crane,5 the averments were that a convey-
ance, purporting on its face to be made in payment of
a debt due from the grantor to the grantee, was '' fraudu-
lent and void as against pre-existing creditors,1' and that
it was " made with the intent to hinder, delay, or defraud
said creditors."6 There was no averment impeaching

1 In St. Louis, & 8. F. Railway Co. v.
Johnston, 133 U. 8. 506, 577, the court
say : " The material facts on which
the complaint relies must he so dis-
tinctly alleged asto put them in issue.
Barding v. Handy, 11 Wheat. 103.
And if fraud is relied on, it is not suf-
ficient to make the charge in general
terms. 'Mere words, in and of them-
selves, and even as qualifying adjec-
tive- of more specific charges, are not
sufficient grounds of equity juris-
diction, unless the transactions to
which they refer are such as in their
essential nature constitute a fraud or
a breacb of trust, for which a court
of chancery can give relief.' Van
Weel v. Win-ton, 115 U. S. 228, 237 ;
Imbler v. Choteau, 107 U. S. 586,
591. The defendant should not be
subjected to being taken by surprise,

and enougb should he stated to justify
the conclusion of law, though with-
out undue minuteness."

Pickett \. Pipkin, 64 Ala. 523 ;
Flewellen \. ( Irane, 58 Ala. 627 ; Gil-
bert v. Lewis. 1 De <;.. .1. & s. 19 ;
D xter \ Mc Ifee, 163 III. 508 ; Myers
\. Sheriff, 21 La. Ann. 1 ;•_> ; Rhpad v.

II son, 16 .Mich. 246; .lone- \.

Massej . 79 Ala 370. In a n nt de-

cision in New York, however, an
allegation that the conveyance was
without consideration and with the
intent to hinder, delay and defraud
creditors was held sufficient. Kain v.
Larkin, 141 N. Y. 144, 36 N. E. Rep. 9.

3 Patton v. Taylor, 7 How. 159 ;
Noonan v. Lee, 2 Black, 508 ; Voor-
hees v. Bonesteel, 16 Wall. 29 ; Beau-
bien v. Beaubien, 23 How. 1 90 :
Lewis v. Burnham, 41 Kans. 546,
21 Pac Rep. 572. AVhere the party
relying on the invalidity of the
conveyance is the defendant, e. </. a
sheriff, holding the property under
an attachment, it is not necessary to
plead fraud ; a denial of plaintiff's title
is sufficient. Mason v. Vestal, 88 Cal.
396, 26 Pac. Rep. 213; Welcome v.
Mitchell, SI Wis 566, 51 N. W. Rep.
L080 ; Holmberg v. Dean. 21 Kan. 73 ;
see Nat. Bank v.Barkalow, 53 Kan.
69, 35 Pac. Rep. 796.

1 Ambler v. Choteau, 107 U. S.
586, 591, 1 S. C. Rep. 556. See Dick-
inson v. Bankers' Loan, etc., 93 Va.
502.

58 \la 627.

6 See Rowland v. Coleman, 15 Ga.

204 ; .Meeker v. Hani-. 19 Cal. 278.

§ 141 PLEADING FRAUD.

the adequacy or bona fides of the consideration expressed ;

nor asserting that the debt was not justly due from the
grantor to the grantee ; no setting up a secret trust for
the grantor. The pleading was declared insufficient to
support a final decree, rendered upon a decree pro con-
fesso, which adjudged the conveyance void for fraud.
The rule is that the facts upon which the fraud is predi-
cated cannot be left to inference, but must be distinctly
and specifically averred.1 If a bill is filed to set aside; a
deed upon the ground of undue influence, it is not neces-
sary to allege every fact showing the actual exercise of
undue influence, but the relations of the parties ought to
be stated, and the general fact of undue influence alleged,
and some specific instances given from which the court
could infer it.3 " No rule of equity pleading is better
settled than that which declares that every material fact
which it is necessary for a complainant to prove to estab-
lish his rio-ht to the relief he asks must be alleged in the
premises of his bill, with reasonable fullness and particu-
larity." 3 The common-law rule was clearly settled that
fraud must be distinctly alleged and as distinctly proved,
and that it was not allowable to leave fraud to be inferred
wholly from the facts. While it may not be absolutely
essential to employ the word "fraud" in the pleading, yet
the facts stated should show distinctly that fraud is
charged.4 The New York Court of Appeals say that the
use of the word "fraud" or "fraudulent," in order to

'Thomas v. Mackey, 3 Col. 393; 'Smith v. Wood, 12 X. J. Eq. 566,

Small v. Boudinot, 9 N. J. Eq. 391 ; 7 Atl. Re]>. 881. See Virginia Fire

Klein v. Horine, 47 111. 430 ; Bryan v. & .Marine [ns. Co. v. Cottrell, 85 Va.

Spruill, 4 Jones1 Eq. (N. C.) 27; On- 864, 9 S. E. Rep. 132; Bierne v. Kay,

tario Bank v. Root, 3 Paige (N. V.) 37 W. Va. 577, 16 S. E. Rep. 804;

478; Williams v. Spragins, 102 Ala. Pusey v. Gardner, 21 W. Va. 176, 177.

424, 15 So. Rep. 247; Marston v. ' See Davy v. Garrett, 7 Ch. D. 489 ;

Dresen, 76 Wis. 418, 45 N. W. Rep. Smith v. Kay. 7 II. L. Cas. ffi3 ; Cadj

110; Smith v. Wood, 42 N. J. Eq. v. Leonard, 81 Cal. 622, 22 Pac. Rep.

563, 7 Atl. Rep. 881. 694.

2 1 Drewry's Eq. PI. 15.

|\ I hi- \< T. NOT TO BE PLEADED.

§ HI

characterize the transaction, or specify the ground of relief,
is not absolutely necessary.1 Where the circumstances
are such as do not warrant the court in avoiding the trans-
action in toto, it may be avoided as an absolute convey-
ance, and permitted to stand as a security;2 but such
relief cannot be afforded unless the complaint contains
allegations adapted thereto.3 An averment of an intent
to defraud is one of fact, and not a statement of a conclu-
sion of law.4 It must be alleged as well as proved,5 and
it may be directly testified to as a fact.6 An allegation
that a mortgage was not executed in good faith, but for
the purpose of hindering, delaying and defrauding cred-
itors is not sufficiently specific.7 Where a valuable con-
sideration has passed, it is also necessary to charge that
the grantee had notice or knowledge of the fraudulent

1 Whittlesey v. Delaney, 73 N. Y.
575 : Warner v. Blakeman, 4 Abb. Ct.
App. Dec. (N. Y.) 530; Maher v.
Hibernia Ins. Co.. 07 N. Y. 283. See
Hamlen v. McGillicuddy, 62 Me. 268.
In Goldsmith v. Goldsmith, 145 N. Y.
318, the couri says: "It is true that
an intended fraud is not explicitly
and by the use of that word chai'ged
in the complaint, but all the facts are
there, fully and clearly stated, show-
ing the fraud attempted to be perpe-
trated, and all that is omitted is the
word or expression characterizing the
necessary inference. We have held
thai such an omission after judgment

i- Dot material where the facts tliem-

bi Ives have been sufficiently pleaded.
Whittlesey v. Delaney, 73 X. Y. 575."
low v. Ayrault, 16 Barb. 1 X.
\ ' 143; May on Fraudulent Convey-
ances, p. 235 s'',. ; 51.

Van Wyck v. Baker, 16 I Inn (X.
\ L71.
■ Piatt v. Mead, 9 Fed. Rep. 91.

5 Genesee River Nat. Bank v. Mead,
18 Hun (N. Y.) 303 ; Threlkel v. Scott,
89 Cal. 351, 26 Pac. Rep. 879.

6 Seymour v. Wilson. 14 N. Y. 570.
"The complaint contains a distinct
charge that the assignment was made
to hinder, delay and defraud the
creditors of the assignor, and that it
is therefore fraudulent and void.
This is unexceptionable and sufficient
pleading, where the vice of the, instru-
ment is inherent in its terms. When
an assignment contains provisions
which necessarily tend to hinder, de-
lay, and defraud creditors, these pro-
visions are conclusive evidence of the
design of the parties to the instru-
ment It is not necessary in

pleading to point out the particular
features or clauses of the instrument
which arc objected to." Jessup v.
Hulse, 29 Barb. (N. Y.) 541 ; reversed,
21 X. Y 168, on another point.

'Gleason \. Wilson, 18 Kan. 500,
29 Pac. Rep. 698.

§§ 142, 143 EVIDENCE NOT TO BE PLEADED.

design.1 And where subsequent creditors sue, the com-
plaint must allege fraud as to them.2

§142. Evidence not to be pleaded. — General certainty is
sufficient in pleading in equity; and though a mere gen-
eral charge of fraud is insufficient, it is not to be under-
stood that the particular facts and circumstances which
confirm or establish it should be minutely charged.8 It is
not necessary, or proper, that pleadings at law or in equity
should be incumbered with all the matters of evidence
the complainant may intend to introduce.4 A general
averment of facts — not of conclusions of law — upon
which the rights of the parties depend, is sufficient. By
the elementary rules of pleading facts may be pleaded
according to their legal effect, without setting forth the
particulars that lead to it; and necessary circumstances
implied by law need not be expressed in the plea.5 So
much of the complaint, however, as sets out in detail the
inceptive steps which culminated in the alleged fraudulent
conveyance, is not irrelevant or redundant matter.6

§143. Alleging insolvency.— As elsewhere shown, a vol-
untary conveyance is not generally regarded as fraudulent
per se.7 If a debtor is perfectly solvent, he can do what
he will with his property so long as he does not dispose
of so much of it as to disable him from paying his debts.
This is a rule of pleading as well as of evidence. Heine
a bill which contained no allegation that the debtor at

1 Seeleman v. Hoagland, 19 Col. 5 Sullivan v. Iron cV silver Mining

231, 34 Pac. Eep. 995. Co., 109 U. S. 555.

3 Hutchinson v. First Nat. Bk. 133 *; Perkins v. Center, 35 Cal. 71 1.

Ind. 285, 30 N. E. Rep. 952 ; Barrow 'Young v. Heermans, 66 N. \

v. Barrow, 108 Ind. 345, 9 N. E. Rep. 374: Holden v. Burnham, 63 N 5

371. 75; Thomas v. Mackey, 3 Col. 390.

3 Story's Eq. PI. § 352. See §§ 93 and 208. Grover & Baker

4 Zimmerman v. Willard, 114 111. Sewing Machine Co. v. Radcliff, 63
370. 2 N. E. Rep. 70. Md. 496;Kain \. Larkin, 131 N Y.

306, 30 N. E. Rep. 105.

278 ALLEGING [NSOLVENCY. §143

the time of the alienation was insolvent or embarrassed,
was held bad,1 for it is only when an inadequate amount
of property remains that creditors have the legal right to
complain.2 The court said that, for aught that appeared
in the pleading, the debtor might have been possessed of
ample means, other than the property in controversy, to
pay his debts ; and in such a case the conveyance is not
ordinarily open to the attack of creditors. A complaint
by an executor attacking a fraudulent conveyance should
allege the existence of debts as to which the conveyance
is void.3 But it is not necesssary in the case of a volun-
tary conveyance to allege also that there was fraud on
the part of the grantee.4

A man is said to be insolvent " when he is not in a
condition to pay his debts in the ordinary course, as per-
sons carrying on trade usually do," 5 or when all his
obligations could not be collected by legal process out of
his own means,0 or his means of payment are so crippled
and his embarrassment is so great that he cannot proceed
with and carry on his business in the usual course of
trade.' A complaint which states that " the said W. L. J.,

1 BurdsaJl v. Waggoner, 4 Col. 2G1. Piatt v. Mead, 9 Fed. Rep. 91 ; Noble

Sec Merrell \. Johnson, 96 111. 23U ; v. Hines, 72 Ind. 12; Whitesel v.

McCole v. Loehr, 79 Ind. 431 ; Spauld- Hiney, 62 Ind. 168; McConnell v.

ing v. Blythe, 73 Ind. 93; Noble v. Citizens' State Bank, 130 Ind. 132,27

llin.-. 72 [nd.12; Sherman v. Hog- N. E. Rep. 616 ; Aibertoli v. Branliani,

land, 54 [nd. 578, 584; Xeyers v. SO Cal. 631, 22 Pac. Rep. 404: Mc-

Llack, 138 Ind. 263; :!7 X. E. Rep. 791 ; Connell v. Citizens' State Bank, 130

Kir,, v. Perry, 01 Me. I 15; Kings Heirs Ind. 127, 27 N. E. Rep. 616.

v. Thompson, 9 Pet. 204 ; Warner v. ■■ Walker v. Pease, 17 Misc. (N. Y.)

Dove, :;•; Md. .'>7'.t. But see Walkow 415, 41 N. Y. Supp. 219.

v. Kingsley, 45 Minn. 283, 47 X. W. * McAninch v. Dennis, 123 Ind. 21,

Rep. 807; contra, Bea.) v. Lehman- 22 N. E. Rep. 881.

Durr Co. ,110 Ala. 446, 18 So. Rep. 230; 5 Shone v. Lucas. :; Dowl. & Ry.

Snyder v. Dangler, 44 Neb. 600, 63 N. 218; Washburn v. Huntington, 78

W. Rep. 20, holding thai bad faith Cal. 573, 21 Pac. Rep. 305.

may !«■ t id even in the absence of 6 Herrick v. Burst, 4 Hill (N. Y.)

insolvency. See Sides v. Scharff, 652 ; Riper v. Poppenhausen, 43 N. Yr.

'.»:; Ala. KMi, 9 So. Rep. 228. 08, 75 ; Potter v. McDowell, 31 Mo. 73.

Lee v. Lee, 77 Ind. 253. See 1 Curtis v. Leavitt, 15 N. Y. 141.

§ T44

ALLEGATIONS C< »NCERN1 \< ! I !( iNSl I >ERA I l< »\.

79

at the time of making said deed, did not have sufficient
property remaining, subject to execution, to pay all his
said debts, but by means of said conveyance rendered
himself wholly insolvent, and has not now, nor has, at any
time since said conveyance, had sufficient property, sub
ject to execution, out of which said debts could be made,"
is sufficient.1 The insolvency must exist both at the
time the suit was brought and the conveyance was
made.2

§ 144. Allegations concerning consideration. — As regards
allegations of consideration, the bill will be upheld if it
distinctly recites either of three things : First, that the
conveyance was wholly without consideration ; second,
that it was fraudulent and there was a consideration
which, in cases of technical or constructive fraud, the com-
plainant was willing to allow or has offered to return ; or
third, that the complainant is not informed and has no
means of ascertaining whether there was a consideration,
and that these facts are peculiarly within the defendant's
knowledge. In this latter case the bill should pray for a
discovery.3

1 Jennings v. Howard, 80 Ind. 216.
See Price v. Sanders, 60 Ind. 310;
Miller v. Lehman, 87 Ala. 517, 6
So. Rep. 361 ; York v. Rock wood, 132
Ind. 353, 31 N. E. Rep. 1110. It is
said by Danforth, J., in an important
case before the New York Court of
A 1 ipeals, Van Dyck v. McQuade, 86
N. Y. 44 : " An individual may pur-
chase property, contract debts, incur
new liabilities, and keep on in busi-
ness, although he has debts unpaid ;
and if he does this in good faith and
hope of a more prosperous fortune, he
violates no moral or legal duty. And
this is so, although at the time of
purchase he is aware that liis prop-
erty is not sufficient to pay his debts
(Nichols v. Pinner, 18 N. Y. 295). The

principle of this rule applies to the
managers of corporations (Scull v.
Depeyster, 1 Edw. Ch. [X. V. | 513;
Hodges v. New England Screw Co.,
1 R. I 312)." In Smith v. Collins. 94
Ala. 3!)4. 10 So. Rep. 334, il was held
that a person who has sufficienl prop-
erty amenable to legal process i" sat-
isfy all demands is not insolvent,

although he may not have money on
hand to meet his liabilities as they
may fall due in 1 he course "I trade.

- Petree v. Brotherton, 133 Ind. 692,
32 N. E. Rep. 300: Nevers \. Hack,
138 Ind 260, 37 X. E. Rep. 791 ; cf.
Coot v.Tibbals, 12 Wash. 307, 10 Pac.

Rep. 935.

■■ Des Moines & M. i;. • !o. \. Alley,
16 Fed. hep. 733. See ;' 1 17.

280 FRAUDULENT [NTENT — PLEADINGS IX EQUITY. §§ 145, 146

£ 145. Fraudulent intent.— It is usually of vital import-
ance that the creditor should allege in the bill that the
conveyance attacked was made with the intent to hinder,
delay, or defraud creditors.1 The effect of intent, as
related to fraudulent alienations, is elsewhere made a
special subject of discussion.2 We may here observe
that an averment to the effect that the grantee, the
debtor's wife, gave no consideration, and that the whole
consideration came from the debtor, sufficiently shows
bad faith or fraudulent intent on her part.3 An intent
to defraud is properly pleaded by an allegation of such
intent without alleging any fact to show such intent.4
There is manifestly in this regard a distinction between
pleading fraud and pleading fraudulent intent.

£ 146. Pleading in equity. - - The plaintiff's title and claim
to the assistance of a court of equity must always be ex-
posed by the pleadings ; but the style and character of
pleading in equity has always been of a more liberal cast
than is permitted in other courts,5 as mispleading in mat-
ter of form has never been held to prejudice a party, pro-
vided the whole case is just and right in matter of sub-
stance, and supported by proper evidence.0 As a credit-
ors' bill is often brought for a discovery as well as for
relief, the complainant is at liberty to avail himself of
any objections to proceedings on the part of the defend-
ant affecting his rights, even though not specified or
charged in the bill. This rule results from the necessity
of the case, &s a creditor cannot be supposed to be
thoroughly acquainted with the conduct of his debtor

1 See Morgan v. Bogue, 7 Neb. 434; 4 Union Nat. Bank v. Reed,27Abb.

Eutchinson v. Firsl Nat. Hank, 133 N. C. 5.

h .1. 283, 30 X. E. Rep. 952. See §§ 9, See § 60.

10, 11. "Tiernan v. Poor, 1 Gill & J. (Md.)

■ hap. XIV. See§3 9, 10. 11. 21G ; 19 Am. Dec. 225. See § CO.

8 Newman v. Cordell, 1:; Barb. (N. Ridgely v. Bond, 18 Md. 450 ; Warner

Y. 148. v. Blakeman, 4 Keyes (N. Y.) 507.

§§ 14/, 14s SEEKING DISCOVERY EXCUSING I VCIIES. _\X I

toward third persons, especially when, as is generally the
case in fraudulent transactions, efforts have been made to
conceal the circumstances from the public.1

§ 147. Seeking discovery. — The complainant, especially
if he is prosecuting in a representative capacity, as, for
instance, an assignee in bankruptcy, in seeking to set
aside a fraudulent conveyance of real and personal prop-
erty, has the right, as ancillary to the principal relief, to
have a discovery from the defendants, and he properly
seeks it with a view to supply the deficiency in his own
knowledge ; and his ignorance of the particulars sought
not only entitles him to the discovery, but excuses the
want of more precise specification of the particular fraud
alleged.3 Since parties in interest have been allowed to
give testimony as witnesses, bills of discovery have been
in a measure superseded.3

§ 148. Excusing laches — Concealment of fraud. — It fre-
quently becomes vitally important to excuse, by appropri-
ate recitals in the bill, apparent laches on the part of the
creditor in commencing the suit.4 In Forbes v. Overby,5
which was a bill filed by an assignee, charging fraud and
conspiracy, and praying for a discovery and disclosure, the
defendants contended, upon a motion to dissolve an injunc-
tion, that the bill was insufficient in form and substance,
and ought to be dismissed ; first, because of complain-
ant's laches in bringing this suit (it having been brought

1 Burtus v. Tisdall, 4 Barb. (N. Y.) Y.) 283 ; Mountford v. Taylor, 6 V,
580. Jr. 788.

2 Verselius v. Verselius, 9 Blatchf. 3 Field v. Hastings A Bradley
190, per Woodruff, J. Cargill v. Co., 65 Fed. Rep. 279: Preston v.
Kountze, 86 Tex. 386, 22 8. W. Rep. Smith, 06 Fed. Rep. 884; Ex parte
1015, 25 Id. 13. See Bowden v. Boyd, 105 U. S. 657.

Johnson, 107 U. S. 263, 2 S. C. l Lant v. Morgan's Admr. , 43 U. S.

Rep. 246, per Blatchford, J. : Ex App. 623.

parte Boyd, 105 U. S. 653, 655 : Hen- 5 4 Hughes, 441, 444.

dricks v. Robinson, 2 Johns. Ch. (N.

EXCUSING LACHES. § 148

within a year from the discovery of the clue to the fraud) ;
and second, because the bill failed to set forth specifically
the impediments to an earlier prosecution of the claim.
It was objected that the bill did not explain why the com-
plainant had remained in ignorance of his rights, and that
it failed to recite the methods employed by defendants to
fraudulently keep the complainant in such ignorance ; and
that it did not disclose how and when the complainant
first came to a knowledge of the matter alleged as the
basis of the suit. The court observed that there had been
a great variety of decisions upon the question as to
what lapse of time was sufficient to bar cases of this
character, and declared the general rule to be that each
suit must be governed by its own peculiar circumstances.
The case under consideration, being a bill for a discovery,
was distinguished by the court, on that ground, from
Badger v, Badger,1 and it was said that a court would not
compel a complainant, who was manifestly ignorant of the
particulars of a fraud, to set out in his bill the very par-
ticulars concerning which a disclosure was sought.

Lord Erskine said : " No length of time can prevent
the unkennelling of a fraud." In Alden v. Gregory,3
Lord Northington exclaims: "The next question is in
effect whether delay will purge a fraud? Never while I
sit here ! Every delay arising from it adds to the injus-
tice, and multiplies the oppression." Mr. Justice Story
stated the rule as follows :* "It is certainly true that
length of time is no bar to a trust clearly established ;
and in a case where fraud is imputed and proved, length
of time ought not, upon principles of eternal justice, to
be admitted to repel relief. On the contrary, it would
seem that the length of time during which the fraud has
been successfully concealed and practiced is rather an

2 Wall 87, and infra. a Prevosi v. Gratz, 6 Wheat. 497.

2 Eden, 285

§ 149 EXPLAINING DELAY. 283

aggravation of the offense, and calls more loudly upon
a court of equity to give ample and decisive relief." It
must be remembered, however: First, that the trust
must be "clearly established;" second, that the facts
must have been fraudulently and successfully concealed
by the trustee from the knowledge of the cestui que
trust} Long acquiescence and laches by parties out of
possession, are productive of much hardship and injustice
to others, and cannot be excused but by showing some
actual hindrance or impediment caused by the fraud or
concealment of the parties in possession which will
appeal to the conscience of the chancellor. The party
who makes such an appeal should set forth in his bill
specifically what the impediments to an earlier prosecu-
tion of his claim were,3 how he came to be so long igno-
rant of his rights, and the means used by the respondent
to fraudulently keep him in ignorance; and how and
when he first came to a knowledge of the matters alleged
in the bill. Otherwise the courts will not grope after the
truth of facts involved in the mists and obscurity conse-
quent upon a great lapse of time.3

§. 149 Explaining delay — Discovery of fraud. — In cases
where it is sought to avoid the statute of limitations, or

'Badger v. Badger, 2 Wall. 92. In from the facts pleaded. As in the

Felix v. Patrick, 145 U. S. 331, 12 S. case of any oilier Legal conclusion, ii

C. Rep. 862, the court say : " We is not sufficient to make a mere

are left to infer that his concealment averment thereof, bul tin' facts from

was that of mere silence, which is not which the conclusion follows musl

enough. Wood v. Carpenter, 101 U. themselves be pleaded." LadyWash-

S. 135, 143; Boyd v. Boyd, 27 Ind. ington Consol. Co. v. Wood, 113 Cal.

429; Wynne v. Cornelison, 52 Ind. 486.
312." ;; Mammon. 1 v. Hopkins, 1 13 I'. S.

2 " ' Discovery ' and 'knowledge' 252, 12 S. C. Rep. 418; PearsalJ v.

are not convertible terms, and Smith, 149 I'. S. 236, 13 S. C. Rep.

whether there has been a ' discov- KM ; Kirby v. Lake Shore, etc. R. I.'.

ery' of the facts 'constituting the Co., 120 U. S. 137,7 S. < '. Rep. 130;
fraud,' within the meaning of the . Wollensak \. Reiher, 115 U. S. 101,

statute of limitations, is a question of 5 S. C. Rep. 1 137.
law to be determined by the court

284 DISCOVERY OF FRAUD. § 149

rather to come within the exception to it, the plaintiff has
been held to stringent rules of pleading and evidence.
" Especially must there be distinct averments as to the
time when the fraud, mistake, concealment, or misrepre-
sentation was discovered, and what the discovery is, so
that the court may clearly see whether, by ordinary dili-
gence, the discovery might not have been before made."1
This is necessary to enable the defendants to meet the
fraud and disprove the alleged time of its discovery.2
A general allegation of ignorance at one time, and of
knowledge at another, is of no effect. If the plaintiff
made any particular discovery, it should be stated when
it was made, what it was, how it was made, and why it
was not made sooner.3 Fraud that will arrest the run-
ning of the statute must be secret and concealed, and not
patent or known.4 The party seeking to elude the stat-
ute by reason of fraud must aver and show that he used
due diligence to detect it;b and if he had the means of

Wood v. Carpenter, 101 U. S. 140; S. C. Rep. 382; Bailey v. (Mover, 21

Stearns v. Page, 7 How. 819, 829; Wall. 342 ; Gifford v. Eelms,98U.S.

National Bank v. Carpenter, 101 U. S. 248 ; Upton v. McLaughlin, 105 U. S.

.-)UT ; Rosenthal v. Walker, 111 U. S. 640.

190, 4 S. C. Rep. 382; Wollensak v. * In Hardt v. Heidweyer, 152 U.

Reiher, 115 U. S. 96, 5 S. C. Rep. 1137 ; S. 558, 560, 14 S. C. Rep. G71,

Ajrnett v. Coffey, 1 Col. App. :!4, the court says: "It is well settled

27 Pac. Rep. 014 ; .Morrill v. Little that a party who seeks 1.) avoid the

Falls Mfg. ('<>.. ,-,;; Minn. 371, 21 L. R. circumstances of an apparently un

A. 171, 55 X. W. Rep. 547. reasonable delay in the assertion of

'Moore v. Greene; 1!) How. 72; his rights on the ground of ignorance

Beaubien v. Beauhien, 23 Id. 190 ; must allege and prove, not merely

Badger v. Badger, 2 Wall. 95. the fact of ignorance, l>nt also when

• hit v. Hilton, 1 (int. C. C. 230. and how knowledge was obtained, in

1 Martin v. Smith, 1 Dill. 85. This order that the court may determine

Case Contains a full review Of the an- whether reasonable ell'ort was made

thorities. See also McLain v. Ferrell, by him to ascertain the facts

1 Swan (Tenn.) 4S ; Buckner v. Cal- Tested by this rule, it is apparent
cote, 28 Miss. 432; Cook v. Lindsey, that this bill must be held deficient

:;i MiSB. 451 : I'baleii \. Clark. 1!) in not showing how knowledge

Conn. 121; Moore v. Greene, 2 Curt, of the wrongs complained of wasob-
C. C 202, affi'd 19 Bow. (ii), 72; tained by the plaintiffs. It is alleged
Rosenthal v. Walker, 111 U. S. 189, A that they were ignorant, and now

§ 149 Disci (VERY I )l I k \i D.

discovery in his power he will be held to have known it.'
In Cole v. McGlathry,2 it appeared that the plaintiff had
provided the defendant with money to pay certain debts.
The defendant falsely affirmed that he had paid them,
and fraudulently kept possession of the money. It was
decided that the plaintiff was not entitled to recover for
the reason that he had at all times the means of dis-
covering the truth of the statements by making inquiries
of the parties who should have received the money. This
principle is further illustrated in the analogous case of
McKov/n v. Whitmore,3 in which it appeared that the
plaintiff had handed the defendant money to be deposited
for the plaintiff in bank. The defendant told the plain-
tiff that he had made the deposit. It was held that even
though the statement was false, and made with a fraudu-
lent design, the plaintiff could not recover because he
might at all times have inquired at the bank and learned
the truth.4 In Boyd v. Boyd,5 it was ruled that the con-
cealment which would avoid the statute must go beyond
mere silence. It must be something done to prevent dis-
covery. The concealment must be the result of positive
acts.6 An allegation that the defendants pretended and
professed to the world that the transactions were bona fide
was looked upon as being too general. In Wood v. Car-
penter,7 a pleading which reads as follows : *' And the

have knowledge: and that they ac- 14 8. C. Rep. 071 ; Stearns v. I

quired such knowledge within a 7 How. 829.

month prior to bringing the suit : but - 9 Me. 131.

how they acquired it, and why they :; 31 Me. 448.

did not have the same means of as- 4 See, further, Rouse v. Southard,

certaining the facts before, is not 39 Me. 404 ; Woods v. James, 87 Ky.

disclosed." 513, 9 S. W. Rep. 513.

1 Buckner v. Calcote, 28 Miss. 432, 5 27 Ind. 429; Dorsey Machine ('■-.

434. See Nudd v. Hamblin, 8 Allen v. McCaffrey, 139 In- 1. :.:,;. 38 K

(Mass.) 130. Compare Baldwin v. Rep. 208.

Martin, 35 N. Y. Super. Ct, 98; Bar- ' Stanley v. Stanton, 36 Ind. 145.

lowv. Arnold. 6 Fed. Rep. 355; Erick- ' 101 U.S. 135; Hard) v. II. M

son v. Quinn, 3 Lans. (N. Y.) 302 ; weyer, 152 U. S. 559, lis < . Rep. 671.
Hardt v. Heidweyer, 152 U. S. 559,

DISCOVERY OF FRAUD.

§ '49

plaintiff further avers that he had no knowledge of the

facts so concealed by the defendant until the year a. D.
i S 7 2 , and a few weeks only before ^the bringing of
this suit," was held to be clearly bad. The court in
this case, in a critical and exhaustive opinion, review
many of the cases which have just been considered, and
then observe that a wide and careful survey of the
authorities leads to the following conclusions: First,
the fraud and deceit which enabled the offender to do the
wrong may precede its perpetration. The length of time
is not material, provided there is the relation of design
and its consummation. Second, concealment by mere
silence is not enough. There must be some trick or con-
trivance intended to exclude suspicion or prevent inquiry.
Third, there must be reasonable diligence, and the means
of knowledge are the same thing in effect as knowledge
itself. Fourth, the circumstances of the discovery must
be fully stated [pleaded] and proved, and the delay which
has occurred must be shown to be consistent with the
requisite diligence.1

In New York the statute expressly provides that,
in actions to procure a judgment other than for a sum of

1 In Erickson v. Quinn, 47 X. Y.
II:;. Rapallo, .1., said : "The funda-
mentaJ fait from which the conclu-
sion of a fraudulent intent is
drawn, is i lie absence of any valu-
able consideration for the convey-
ance. So long as tin' creditor was
ignoranl of thai essential ami con-
trolling fact, the statute ought not
to run againsl him." In Dorsey
Machine < !o. v. Mc( Jaffrej , 139 Ind.
39 X. E. Rep. '.'us, thecourl says :
•'In -nit- of equitj t he decided weigh!
of authority is in favor of the propo-
sition t li.it « here a pari \ has been
injured by l he fraud of am 't her, and
1 1 and i concealed, or is of such
cha > ■ conceal it -ell', whereby

the injured party remains in igno-
rance of it without any fault or want
of diligence on his part, the bar of the
statute does not begin to run until
the fraud is discovered, though there
be no special circumstances or efforts
on tlie part of the person committing
the fraud to conceal it from the
knowledge of the other party. Wear
v. Skinner, 46 Md. 265 ; Booth v.
Warrington, 1 lit.,, I'. ( '. Ki:;; Fisher
v. Tuller, 12-2 Ind. 31, 2:! N. E. Rep.
523; Stearns v. Page, 7 How. (TJ. S.)
819 : Moore v. Greene, lit Bow. 1 1'.
s i 69 : Sherwood v. Sutton, 5 Mason.
il'.S) l l:; ;Snodgrass v. Branch I'.k.,
25 Ala. 161."

g T 50 COMPLAINTS BAD FOK Ml I Ml UlIOUSNESS.

money, on the ground of fraud, the cause of action is not
deemed to have accrued till the discover)- of the facts
constituting the fraud.' It has been held that a knowl-
edge of the fraud will he imputed where a party
deliberately shuts his eyes to the facts which call for
investigation,3 though this question of what constitutes
notice is one that is much debated.

>J 150. Complaints bad for multifariousness. — Judge Story
says that multifariousness is " the improperly joining in
one bill distinct and independent matters, and thereby
confounding them; as, for example, the uniting in one
bill of several matters, perfectly distinct and unconnected,
against one defendant, or the demand of several matters
of a distinct and independent nature against several
defendants in the same bill." 3 It is also said : " What is
more familiarly understood by multifariousness as applied
to a bill, is where a party is brought as a defendant upon a
record, with a large portion of which, and of the case made
by which, he has no connection whatsoever."4 In United
States v. Bell Telephone Company,5 Mr. Justice Miller
used these words : " The principle of multifariousness is
one very largely of convenience, and is more often
applied where two parties are attempted to be brought
together by a bill in chancery who have no common
interest in the litigation, whereby one party is compelled
to join in the expense and trouble of a suit in which he
and his co-defendant have no common interest, or in
which one party is joined as complainant with another
party with whom in like manner he either has no interest
at all, or no such interest as requires the defendant t<>

1 N. Y. Code Civ. Proc. § 382. Story's Ex. PI. ; 271. See Walker

2 Higgins v. Crouse, 147 N. Y. 411, v. Powers, 10! U. S. 251.

42 N. E. Rep. 6. Set', also, Gillespie 'Story's Eq. PI. § 530. See Camp

v. Cooper, 36 Neb. 775, 55 V W. Rep. bell v. Mackay, 1 Mylne & Cr. 61 I
302. ' L28 U.S. 352.

288

II I U3INGS lll-.l.li NOT MULTIFARIOUS.

§ 151

litigate it in the same action."1 The authorities bearing
upon this question are very numerous, but there is deduci-
ble from them all no positive inflexible rule as to what, in
the sense of courts of equity, constitutes multifariousness,
which is fatal on demurrer.2 Indeed it seems to be
generally recognized as an impossibility to formulate a
general rule as to what is considered multifariousness ;
every case must be governed by its own circumstances,
and the court must exercise a sound discretion on the
subject.3 The rule in relation to multifariousness, say
the Supreme Court in Iowa, is one of convenience, and
though the matters set forth in the pleadings are distinct,
yet if justice can be administered between the parties
without a multiplicity of suits, the objection will not pre-
vail.4 The objection that the bill is multifarious is
always discouraged by the courts when, instead of
advancing, it will defeat the ends of justice.5

§ 151. Pleadings held not multifarious. — Such being the
general condition of the authorities as to multifarious plead-
ings, it follows that the practitioner must rely upon

' Citing Oliver v. Piatt, 3 How.
333; Walker v. Powers, 104 U. S.
245

1 De Wolf v. Sprague Mfg. Co.,
49 Conn. 292. See generally Att'y
General v. Cradock, 3 Mylne & Cr.
85 ; Knye v. Moore, i Sim. & S. 01 ;
Kensington v. White, :'. Price, 164;
I lornwell v. Lee, 11 I lonn. 524 ; Mid-
dletown Sav. Bank v. Baoharach, 46
Conn. 522 ; Board of Supervisors v.
Deyoe 71 X Y. 225; Brinkerhoff v.
Brown, 6 Johns. Ch.(N. Y.i 151 ; New
York, & X. II. I: I.'. Co. v. Schuyler,
i; X. Y. 608.

( raines v. Chew, 2 I tow. 619 ;
Oliver v. Piatt, :: How. 333. See .Me.
Lean v. Lafayette Bank, :! McLean,
LIS ; A.bbo1 \. Johnson, 32 X. II. 26 ;

Carter v. Kerr, 8 Blackf. (Ind.) 373 ;
Butler v. Spann, 27 Miss. 234 ; Brown
v. Haven, L2 Me. 164; Richards v.
Pierce, 52 Me. 560; Warren v. War-
ren, 56 Me. 360; Bugbee v. Sargent,
23 Me. 269 ; Weston v. Blake, (il Me.
452. See § 132.

4 Bowers v. Keesecher, 9 Iowa, 422.
Marshall v. Means, 12 Ga. 61 ;
Stephens v. Whitehead, 75 Ga. 298.
Where two distinct subjects are em-
braced in a bill, e. (/.. the avoidance
of a marriage settlement ami the

annulment of a will, though the
necessary parties to the suit may he
the same, their interests and attitude
are decidedly at variance, ami the

hill is had for multifariousness. Mc-
Donnell v. Baton, 18 Fed. Rep. 710.

§ 15' PLEADINGS III. I I) NOT Ml I III VRK I 289

instances, and illustrations drawn from reported cases, for
his guidance.

In a suit before the Supreme Judicial Court of New
Hampshire,1 it was decided that it was not multifarious to
join in a creditor's bill, as parties defendant with the debtor,
several persons to whom he conveyed distinct parcels « if
property, out of which the creditor sought satisfaction of
his debt, although such persons might have no common
interest in the several parcels conveyed/-' And in I Hmrnock
v. Bixby,3 it was held that a demurrer for multifariousness
would hold good only when the plaintiff claimed several
matters of a different nature, and not when one general
right was asserted, although the defendants might have
separate and distinct rights. The same principle is recog-
nized in Boyd v. Hoyt.4 That was a case of a creditor's
bill brought to reach property of a judgment-debtor which
has been fraudulently transferred to two or more persons
holding different portions of it by distinct conveyances,
and it was decided that such persons might be joined.
The chancellor lays it down that when the object of a suit
is single, but different persons have or claim separate inter-
ests in distinct or independent matters, all connected with
and arising out of the single object of the suit, the com-
plainant may bring such persons before the court as
defendants, so that the whole object of the bill may be
effected in one suit, and further unnecessary and useless
litigation prevented. The case of Morton v. Weil8 is an
important illustration in point. Creditors by different judg-
ments united in brineinea suit against the executors under
the will of a decedent, alleging the fraud of that person in

1 Chase v. Searles, 45 N. H. 519. The debtor and all persons through
See Hale v. Nashua & L. R. R., 60 N. whom hr lias conveyed the prop* n\
H. 339. as well as the pi*esen1 holder ma\ '"•

2 See §§ 54, 55, 132. j<>i I. Crafl \. Wilcox, 102 Via.

3 20 Pick. (Mass.) 377. 378, 1 I So. Rep. 653.

4 5 Paige (N. Y.) 05. See Rineharl 533 Barb. (X. Y. 1 30.
v. Long, 95 Mo. 396, 8 S. W. Rep. 559.

19

290 PLEADINGS HELD NOT MULTIFARIOUS. § I 5 I

contracting the debts, and joined as defendants various par-
ties having liens upon, or title to, the property in question
by reason of judgments or assignments, alleging that such
liens or titles were fraudulently obtained, and praying that
the same might be vacated, and the defendants compelled
to account for and pay over the property. On demurrer to
the bill it was decided that the parties to it were properly
joined, and that in other respects it was sufficient.1 In
anothercase,2 a creditors' bill filed against the debtor and his
grantees, for the purpose of setting aside a number of volun-
tary conveyances, severally made to each of the parties, was
held to be good. And in Harrison v. Hallum,3 the court
say that it is proper, where there are several judgment-debt-
ors in the same judgment, and one of them has made a
fraudulent conveyance to one grantee, and another has
made a similar conveyance to another grantee, and a third
has made a like conveyance to still another grantee, to
unite all the debtors and their several fraudulent grantees
in one common bill for the relief of the judgment-cred-
itors. Again, where a debtor, with intent to defraud his
creditors, purchased land, causing the deed to be made
to his wife, who participated in the fraud, and conveyed
the land to another person with the same intent, who in
turn conveyed it to a third, both grantees being cognizant
of the fraud, it was held, in an action brought by a cred-
itor to set aside the conveyances, that both transactions
being of the same nature, though different in form, could
be properly joined in the same complaint.4 A bill is not

See Lawrein •<• v. Hank of the Re- Hicks v. Campbell, 1!) X. J. E<]. 183;

public, 35 N. V. 320 : Reed v. Stryker, Randolph v. Daly, 16 N. J. Eq. 313.

L2 Abb. Pr. (N. Y.) IT; Fellows v. -Williams v. Neel, 10 Rich. Eq. (S.

Fellows, 1 Cow. (N. Y.i 682; Lewis v. C.) 338.

St. Albans Iron and Steel Works, 50 5 CJoldw. (Tenn.) 525.

\i. 181 : \xnold \. Arnold, II W. Va. 'North v. Bradway, 9 Minn. is;?.

449; Shafer \. O'Brien, 31 W. Va. See Jones v. Morrison, 31 Minn. 140,

606, 8 S. E. Rep. 298. See, further, 16 N. W. Rep. 854.
Way v. Bragaw, 16 N. J. Eq. 213 ;

§152 PLEADINGS HELD NOT MULTIFARIOl 2f)I

regarded as multifarious, though brought to recover dif-
ferent portions of the estate of a debtor from several
defendants, if the alleged illegal transfers were the result
of a common purpose on the part of the defendants to
dismember the estate.1

§ 152. — The cases upon this subject are almost without
number. In De Wolf v. Sprague Mfg. Co.,3 it appeared
that the plaintiff held a judgment lien upon certain real
estate upon which a trust-mortgage had been executed,
which, if valid, was entitled to priority. The suit was
brought to set aside or postpone the mortgage, on the
ground that it was void against the complaining creditor,
and for a foreclosure of the judgment lien, and for pos-
session, and the mort^a^ors and the trust-mort^aofee
were made defendants. The court, after protracted argu-
ment and an extended review of the authorities, held that
the bill was not multifarious. In Parker v. Flagg,8 the
court says: "The bill is brought by the executor, repre-
senting all the creditors of an insolvent estate, to set
aside conveyances made by the testator of all his prop-
erty, real and personal, in fraud of those creditors, to his
wife, who is the sole defendant ; some of the property
consists of mortgages, to recover which the plaintiff has
no adequate remedy at law ; all the conveyances appear
to have been part of one scheme, and no objection is, nor,
it would seem, could be taken to the bill for multifarious-
ness. The demurrer was erroneously sustained, and
should have been overruled."* It is perhaps unnecessary
to further multiply illustrations. Some of the cases have
certainly gone to an extreme limit, and parties have been

1 Van Kleeck v. Miller, per Choate, 249 ( lonn. 282.

J.. 19 N. B. R. 486; citing Boyd v. 3 127 Mass

Hoyt, 5 Paige (N. Y.) 65; Piatt v. 4 Chase v. Redding, 13 Graj

Preston, 19 N. B. R. 241. See Brad- 418; Welsh v. Welsh, 105 Mass.

ner v. Holland, 33 Hun (N. Y.) 290. Gilson v. Butchiuson, 120 Mass. 27.

2Q2 ALTERNATIVE RELIEF. § 1 53

held together as defendants in one action by a very
slender thread of reasoning. The St. Louis Court of
Appeals, commenting upon the subject, says: "The
principle that it is not sufficient that the defendants are
all concerned in some general charge, such as fraud on
the part of the debtor, or that as grantees of distinct
properties by distinct conveyances they obtained title
through him, but that all the defendants should at least
have an interest in the principal point in issue in the case,
is surely of some value as a general test. In cases like
the present it would be decisive. Here there is no mate-
rial issue in which all the defendants have a common
interest, and consequently no tie to make them defend-
ants in one suit It is obvious that, merely from

convenience to plaintiffs, the defendants ought not to be
put to the trouble and expense of litigating matters with
which they are unconnected."1 These observations were
made in a case in which there were twenty defendants
having a common source of title from an alleged fraudu-
lent grantor; the conveyances were separate and made
at different times, and the defendants were beneficiaries
and trustees indiscriminately joined. The bill was pro-
nounced multifarious. The decision, however, can
scarcely be harmonized with some of the authorities
already discussed.2

§ 153. Alternative relief. — In Alabama it was held that
a creditors' bill maybe filed for a double purpose ; asking
in the alternative to have two or more conveyances can-
celled as intended to hinder, delay, and defraud creditors,
or to have them construed as together constituting a
general assignment inuring, under the statute of that
State, to the benefit of all the insolvent's creditors

1 Bobb v. Bobb, 8 Mo. A.pp. 260. Carious, see Richmond v. Erons, LSI U.
\ to lolls held not t.. be multi- S. 27, 7 S. C.Rep. 788.

§§ 154. !55 PRAYER OF C< tMPLAINT.

equally.1 But in a later case in that State/2 the court
feel constrained to depart from and overrule the decision
upon this point.

§ 154. Attacking different conveyances. — The fact that a
plaintiff seeks to set aside two or more conveyances as
fraudulent, does not require that each conveyance shall
be set forth in a separate paragraph as the basis of a
separate cause of action. They constitute but one cause
of action, the fraudulent disposition of his property by
the judgment-debtor.3

§ 155. Prayer of complaint —Variance — Verification. — As
a general rule in the modern procedure a mistake in the
demand for relief is not fatal.4 In Buswell v. Lincks/'
the court said: "The point is made that the bill was
framed upon the basis of a claim that there had been a
fraudulent trust-deed, and a receiver had been prayed for,
while the relief given in setting aside the fraudulent con-
veyance and adjudging a sale of the leasehold under
execution was inconsistent with the prayer of the com-
plaint. The sufficient answer to this proposition is, that
the judgment was such as the court was bound to give
upon the allegations and proofs without reference to the
relief demanded." It may adapt the relief to the exi-
gencies of the case.0 And where the bill, in addition to
the general demand for relief, contained a prayer that a
deed be set aside, it was held that, merely because of a
prayer that the defendant be decreed to give the com-
plainant possession of the land, the bill would not be

1 Crawford v. Kirksey, 50 Ala. 591. gregation, etc., St. Francis, 138 N. Y.

8 Lehman v. Meyer, 67 Ala. 404; 459, 34 N. E. Rep. 281 ; Valentine v.

Moog v. Talcott, 72 Ala. 210. Richardt, 12G N. Y. 277, 27 N. E. Rep.

3 Strong v. Taylor School Town- 255 ; Murtha v. Curley, 90 N. Y. 372.
ship, 79 Ind. 208. See Wright v. B 8 Daly (N. Y.) 527.

Mack, 95 Ind. 332. 6 Dudley v. Congregation, etc., St.

4 See Bell v. Merrifield, 109 N. Y. Francis, 138 N. Y. 459, 34 N. E. Rep.
202, 10 N. E. Rep. 55 ; Dudley v. Con- 281.

294 PRAYER OF COMPLAINT. § 155

treated as a bill for possession, nor dismissed on the
ground that ejectment was the proper remedy.1 As a
general rule complainants are entitled under a prayer for
general relief, to any judgment consistent with the case
made in their bill,"' but they are not usually entitled to a
decree covering and including matters not referred to in
the pleadings, and as to which the respondents have
never had their day in court.'5 The court will not hesi-
tate to dismiss a bill which presents a case totally differ-
ent from the testimony in the record;4 and no decree
can ordinarily be made on grounds not stated in the bill. 5
" The rule is explicit and absolute, that a party must
recover in chancery according to the case made by his
bill or not at all, 'secundum allegata] as well as 'pro
bata.1 '' G Matters not charged in the bill should not be
considered on the hearing.7 If, however, the special
prayers are inapt and incongruous, and so framed that no
relief can be granted under them, the court under the
prayer for general relief may render any appropriate judg-
ment consistent with the case made by the bill.8 Courts
of equity give judgment for money only where that is all
the relief needed.9 The bill may be framed in a double
aspect, and ask for relief in the alternative, but the state
of facts upon which relief is prayed must not be incon-
sistent.1" The prayer of the complaint is sometimes

1 Miller v. Jamison, 24 N. J. Eq. 41. Wright v. Delafield, 25 N. Y. 266;

SeeSedg. & Wail on Trial of Title to Gordon v. Reynolds, 114 111. 123, 28

Land, 2nd ed., .: 169. N. E. Rep. 455.

Bell v. Merrifield, 109 X. Y. 206, 8 Bailey v. Ryder, 10 X. Y. 370;

16 N. E. Rep. 55. Clark v. Krause, 2 Mackey (D. C.)

Wilson v. Borr, 15 Iowa. 492; 573 ; Eyre v. Potter, 15 How. 42.

Tripp v. Vincent, 3 Barb. Ch. (N. Y.t • Eunter v. Hunter, 10 W. Va. 821.

613; Parkhursl v. McGraw, 24 Miss. ' Annin v. Annin, 24 N. J. Eq. 188.

L39; Hovey v. Holcomb, 11 111. 660. ' Bell v. Merrifield, 109 X. Y. 807,

• Roberts r.Gibson.6 II. &J. (Md.) 10 N. E. Rep. 55; Murtha v. Curley,

123; TruesdeU v. Sarles, 104 N. Y. 90 N. Y. 872.

10 N. E. Rep. 139. 10 Zell Guano Co. v. Heatherly, 38

i..\ v. Ryder, 10 X. Y. 303; W. Ya. 410, 18 S. E. Rep. 611.

§ 156 AMENDMENT.

resorted to in determining whether the action is legal or
equitable, and the court will be guided by the relief asked
in reaching a conclusion.1

The objection that a bill is not verified is immaterial,
as a bill in equity need not usually be sworn to unless it
is sought to use it as evidence upon an application for a
provisional injunction or other similar relief.2

§ 156. Amendment. — A variance between the actual date
of the judgment and that set forth in a creditors' bill
based on it, may be corrected by amendment at any time
during the proceedings ; but as the complainant is not
absolutely confined to the exact date stated in the bill the
amendment may be unnecessary.3 An amendment of a
bill as to the description of the property, under well-
established rules of procedure only operates from the
time of the service of the amended pleading.4 The bill
may be amended on the final hearing in the United States
Circuit Court, so as to state that the value of the matter
in dispute exceeds five hundred dollars.5 Speaking upon
the subject of amendments, Davis, J., said, in Neale v#
Neales :G " To accomplish the object for which a court of
equity was created, it has the power to adapt its proceed-
ings to the exigency of each particular case, but this
power would very often be ineffectual for the purpose,
unless it also possessed the additional power, after a cause
was heard and a case for relief made out, but not the case
disclosed by the bill, to allow an alteration of the plead-
ings on terms that the party not in fault would have no
reasonable ground to object to. That the court has this
power and can, upon hearing the cause, if unable to do

1 O'Brien v. Fitzgerald, 143 N. Y. 3 First Nat. Bank of Bf. v. Hosmer,
377, 38 N. E. Rep. 371. 48 Mich. 200, 12 N. W. Rep. 212.

2 Hughes v. Northern Pacific R. R. ' Miller v. Sherry, 2 Wall. 250.
Co. 1 West Coast Rep. 24. 'Collinson v. Jackson,8 Sawyer.858,

6 9 Wall. 8.

296 DESCRIPTION. § 157

complete justice by reason of defective pleadings, permit
amendments, both of bills and answers, is sustained by
the authorities." x The granting of amendments of
pleadings in chancery rests in the sound discretion of the
court.2

§157. Description — lis pendens. —Aside from interests
not liable to execution, the fact that a creditor is com-
pelled to file a bill in equity usually implies ignorance on
his part of the exact character and form in which the
debtor has invested or secreted his property. If such
were not the case, process of execution would be invoked.
It should not, therefore, be necessary to particularly
describe or indicate in the complaint, the assets, whether
legal or equitable, which it is proposed to reach by the
bill.3 Thus a bill was entertained which alleged that the
defendant " has equitable interests, things in action, and
other property which cannot be reached by execution, and
that he has also debts due to him from persons
unknown."4 In Miller v. Sherry5 the original bill was
in the form of a creditors' bill. It contained nothing spe-
cific except as to certain transactions between the debtor
and one Richardson. There was no other part of the
bill upon which issue could be taken as to any particular
property. The court held that it was effectual for the
purpose of creating a general lien upon the assets of the
debtor, as a means of discovery, and as the foundation
for an injunction and an order that the debtor execute a

'Citing Mitford's ChaDcery Plead- * Lanmon v. Clark, 4 McLean, 18.

in--. 326, 331 : Story's Equity Pleading, "The jurisdiction of a court of equity

3 904, 905 ; Daniel's Chancery Pr. & to reach the property of a debtor

PI. 463, 466 ; Smith v. Babcock, 3 Sum- justly applicable to the payment of

tier, 583 : McArtee v. Engart, 13 III. his debts, even when there is no spe-

242. cific lifii on the property, is un-

'Gordon v. Reynolds, 111 III. lis, doubted." Public Works v. Colum-

28 \. E. Rep. 155. bia College. 17 Wall. .130.

Shainwald v. Lewis, 6 Fed. Rep. 52 Wall. 249.
766.

§ 15/ DESCRIPTK >N.

conveyance to a receiver. Furthermore, that if it became
necessary to litigate as to any specific claim, other than
that against Richardson already specified, an amendment
to the bill would have been indispensable. The bill did
not create a lis pendens^ operating as notice affecting an y
real estate. To have that effect the recital in the descrip-
tion must be so definite that any one reading it can
thereby learn what property is intended to be made the
subject of the litigation.3 Where the complainant in a
creditors' bill seeks to obtain satisfaction out of lands
inherited or devised,3 and is unable to specify the lands,
he may state that fact in the bill, and call upon the heirs
to discover the lands devised or inherited, so that they
may be reached by amendment of the bill or otherwise.1
If the description be indefinite, it may be aided by the
evidence.5

The rule that an alienation of property made during the
pendency of an action is subject to the final decree is, as
shown by Mr. Bishop,0 of very ancient origin. Murray
v. Ballou " is the leading case in this country. The doc-

1 As to the application of the doc- 4 Parsons v. Bowne, 7 Paige (N. V.)

trine of lispendens to creditors' suits, 354. See § 117.

see Webb v. Read, 3 B. Mod. (Ky.) Williams v. Ewing, 31 Ark. 235.

119; Jackson v. Andrews, 7 Wend. The circumstance that a deed did ool

(N. Y.) 152. give an accurate description of the

'-See Griffith v. Griffith, 9 Paige land intended to be conveyed will nol

(N. Y.)317. Compare Sharp v. Sharp, defeat asettlement where the descrip-

3 Wend. (N. Y.) 278; King v. Trice, 3 tion usvd could leave noonein serious

Ired. (N. C.) Eq. 573; McCauley v. doubt as to the laud intended. Wal-

Rodes, 7 B. Mon. (Ky.) 4G2 ; Brown v. lace v. Penfield, 106 U. S. 263, 1 S. ( '.

John V. Farwell Co., 74 Fed. Rep. Rep. 216.

764. "Bishop on Insolvent Debtors, sup-

3 Compare Read v. Patterson, 134 plement, § 238a.

N. Y. 128, 31 N. E. Rep. 445, where ' 1 Johns. Ch. (N. Y.) 566.

creditors sought to reach property in Tilton \. Cofield, 93 LJ S. L68 ;

the hands of heirs and the executor's Thompson v. Baker, Ml I'. S. 648, 12

schedule was held not to be evidence S. C. Rep. 89; Tuttle \ Turnei

of the debts due by the testator. See Tex. 759, 773; Union Trusl Co. v.

Adams v. Fassett, 73 Hun (N. Y.) Southern Inland Nav. <S hup. Co.,

430, 26 N. Y. Supp. 447. 130 U. S. 570, 9 S. ( '. Rep. 606.

I 'I S< RIPTION. § 157

trine is important both as regards the titles of purchasers
and the question of preferences among" judgment-cred-
itors. In Scouten v. Bender,1 where an assignment was
overturned, it was decided that the creditors were entitled
to satisfaction of their judgments, respectively, out of the
funds derived from the real estate in the order of priority
of the judgments; and out of the personal fund in the
order in which the bills were filed and the equitable liens
created. The doctrine of lis pendens, it may be further
remarked, is said to have no application to corporate
stock,2 or negotiable securities.3 Mr. Justice Bradley
said in County of Warren v. Marcy : i " Whilst the doc-
trine of constructive notice arising from lis pcnde?is,
though often severe in its application, is, on the whole, a
wholesome and necessary one, and founded on principles
affecting the authoritative administration of justice, the
exception to its application is demanded by other con-
siderations equally important, as affecting the free oper-
ations of commerce, and that confidence in the instru-
ments by which it is carried on, which is so necessary in
a business community." 5 In New York, where an action
in which a lis pendens was filed has been dismissed and
the notice canceled, it ceases to be a statutory notice to
dona fide purchasers of the premises described in it.0 An
attempt to discuss the various phases of the law of lis

'3 Bow. 1'r. (N. Y.) 185. See affi'd 101 N. Y. 656; Davei rt v.

.' 1 32a. Kelly, 42 N. Y. Hi:1. ; Van Alslyne v.

"Holbrook v. New Jersey Zinc Co., Cook, 25 N. Y. 489; Becker v. Tor-

57 N. V. GIG. ranee, 31 N. Y. 631; Boynton v.

'County <»r Warren v. Marcy, 97 Rawson, 1 Clarke (N. Y.) 584; Clafliri

1 8. '.in. v. Gordon, 39 Hun (N. Y.) 57 ; Shand

4 97 U. S. 109. v. lianley, 71 N. Y. 324 ; Johnson v.

For phases of the doctrine of lis Rogers, 15 X. B. R. 1, 13 Fed. Cases,

pendens, and of the rule as to the 794; Clarke v. kisi, 5 Fed. ('as. 978,

preference obtain. . I l.y tiling a hill, 3 McLean, (U. S.) 494; cf. Stewart v.

Leitchv. Wells, 48 X. Y. 585; [sidor, 5 Abb. Pr. N. S. (N. Y.) 68.

Fitch v. Smith, 10 Paige (N. Y) 9; 'Valentine v. A-ustin, 124 N. Y.

Albert \. Back, 20 J. & S. (N. Y.) 550, 400, 20 N. E. Rep. 973.

§ I57;i ' HANGE OB \ ENUE.

pendens is not possible in this connection. Certainly
under the reformed procedure which does not usually
require the filing of the pleadings before judgment the
old doctrine of lis pendens cannot be said to relate to
innocent purchasers of personal property.1 The excep-
tions that have crept into the rule that a party who med-
dles with property in controversy does so at his peril
have frequently brought the proceedings of diligent
creditors to naught.

§ 157a. Change of venue — Territorial jurisdiction. — In
New York State a motion to change the place of trial of
an action, brought to annul a fraudulent conveyance, to
the county in which certain real estate passing under the
assignment is situated, cannot be defeated by an offer on
the part of the plaintiff to stipulate that he will nol
attempt to reach such real estate.2 When a court of
equity attempts to act directly upon real or personal
property by its decree the property must be within the
territoral jurisdiction of the court. " It is equally well
settled that where one is the owner of land or other prop-
erty in a foreign jurisdiction, which in equity and good
conscience he ought to convey to another, the latter may
sue him in equity in any jurisdiction in which he may be
found, and compel him to convey the property. The
decree in such case directing a conveyance of the prop-
erty does not directly affect the title to the property, yet
the enforcement of it does result in the complete change
of the title.3

1 Leitch v. Wells, 48 N. Y. G09 ; 502. Compare Acker v. Leland, 96
Holbrook v. New Jersey Zinc Co., 57 N. Y. 384.

N. Y. 610; Zoeller v. Riley, 100 N. Y. 8 Johnson v. Gibson, 116 III. 294, 6

102, 2 N. E. Rep. 388. N. E. Rep. 205.

2 Wyatt v. Brooks, 42 Hun (N. Y.)

CHAPTER X.

OF THE PLEA OR ANSWER

sj L58. Answer and burden of proof.
General denial.

159. Avoiding denial.

160. Answer as evidence for or

against co-defendant.

161. Pleading to the discovery and

the relief.

162. Particularity of denial in

answer.
162a. Bill of particulars.

163. Denying fraud or notice.

164. Admission and avoidance.
163. Avoiding discovery.

166. Affirmative relief.

167. Waiver of verification.

§ 158. Answer and burden of proof. General denial. —
Usually, as we have seen, in creditors' actions to reach
assets, or bills in equity to annul fraudulent alienations,
the debtor and the fraudulent alienees are made parties
defendant. The latter are necessary parties to the end
that the judgment may conclude them, and the court
obtain jurisdiction over and possession of the property or
assets in their hands, and annul the colorable transaction.
It is manifest that the defendant alienee has rights in the
suit different from and sometimes superior to those of the
debtor. The latter is naturally concluded by the judg-
ment upon which the bill should proceed, and can with-
hold from his creditor nothing but exempt property or
certain trust income originating from third parties.1
The alienee, on the other hand, may claim to be a
bona fide purchaser, having a complete title, or may
show the absence of actual fraud, and thus be allowed to
hold the property as security for the amount of actual
advances. The grantor may " intend a fraud, but if the
grantee is a fair, bona fide, and innocent purchaser, his

See Chap. XXIII.

g 1 5S ANSWER \\l> BURDEN OF PROOF. $01

title, is not to be affected by the fraud of his grantor." '
It follows that the alienee cannot be prejudiced by the
fact that judgment /r<? confesso passes against tin- debtor,2
or that fraud is admitted or alleged in the debtor's
answer.3 The defense that a party is a bona fide pur-
chaser is an affirmative defense only in cases where fraud
in some previous holder of the title has been shown,1 and
ordinarily a sworn answer responsive to a direct inter-
rogatory or specific charge of fraud must be accepted as
true until disproved.5 Fraud, as we have already seen,6
is not a thing to be presumed, but must be proved and
established by evidence sufficient for that purpose,'
although, as already made manifest,8 it is sometimes prac-
tically a legal deduction from uncontroverted facts, or
from evidence the weight of which is practically
conclusive.9 Distinct and even inconsistent grounds of
defense may be set up.10

Where a defendant's title is attacked on the oround of
fraud he may, under a general denial, introduce any proof
showing that his title is not fraudulent.11 In recent
Colorado cases it is held that if a party desires to subject
property held by a vendee under apparently valid indicia
of ownership. to the payment of a debt of his vendor, the
attacking party must plead and prove the facts that vitiate
such title, whether they constitute fraud or estoppel.1'-

1 Sands v. Hildreth, 14 Johns. (N. " Grover v. Grover, 3 Mil. Ch. 35.

Y.) 498, per Spencer, J.: Hollister v. s See g§ 9, 10.

Loud, 2 Mich. 310 ; Kittering v. Par- 9 See £ 10.

ker, 8 Ind. 44 ; Loeschigk v. Bridge, !0 Goodwin v. Wertheimer, 99 N.

42 N. Y. 423. See Chap. XXIV. Y. Mil, 1 N. E. Rep. 404; Societa

* Thames v. Rembert, 63 Ala. 501. Italiana v. Sulzer, 138 N. Y. 172, 34
See Dick v. Hamilton, 1 Deady, 322 : N. E. Rep. 193.

Fulton v. Woodman, 54 Miss. 158-173. "Kay v. Teabout, 65 [owa, 157:

3 See Scheitlin v. Stone, 43 Barb. Sec £141.

(N. Y.) 637. lsTucker v. Parks, i Col 62; !><■

* Fulton v. Woodman, 54 Miss. 172. Votie v. McGerr, 15 Col. 161 Seel<
'- Fulton v. Woodman, 54 .Miss. 159 ; man \. Boagland, 19 Col. 231, 34 Pac

Hartshorn v. Fames, 31 Me. 98. Rep. 996.

6 See § 6.

302 AVOIDING DENIAL. §159

The lack of allegations of knowledge or notice of the
fraudulent design, or complicity therewith, or participation
therein on the part of the purchaser, will be sufficient to
exclude evidence of such knowledge or conduct.

§ 159. Avoiding denial. — The general rule prevails, under
equity procedure, that an answer under oath, so far as it
is responsive, is to be taken as true unless overcome by
competent proof.1 When the defendant, by his answer
under oath, has expressly negatived the allegations of the
bill, and the testimony of only one person has affirmed
what has been negatived, the court will not decree in
favor of the complainant." There is, then, oath against
oath.8 The complainant generally calls upon the defend-
ant to answer on oath, and is therefore bound to admit
the answer, so far as he has called for it, to he. prima facie
true, and as much worthy of credit as the testimony of
any witness. This rule does not extend, however, to
averments embodied in the answer not directly responsive
to the allegations contained in the bill, since the com-
plainant has not called for such averments.4 Allegations
not responsive to the bill, if denied by a general repli-
cation, must be proved before becoming available to the
party making them.5 In Green v. Tanner,6 the court
said : " That the answer, being responsive to the bill, is
evidence for the defendant as to facts within their own
knowledge, is not denied. And by a well-established rule
of equity, the answer must be taken to be true, unless
contradicted by two witnesses, or by one witness with

1 Wright v. Wheeler, 11 Iowa, 13: S. C. Rep. 534, the court says : "An

Allen v. Mower, 17 Vt. 61 ; Parkhurst answer under oath is evidence in

v. McGraw. 24 }!iss. 184. favor of the defendant, because made

1 Birmingham Nat. Bank v. Steele, in obedience to the demand of the

98 Ala. 85, 12 So. Rep. i^ ; Beene v. Kill for a discovery, and therefore

Randall, 23 Ala. 514. only so far as it is responsive t<, the

Jacks s. Nichols, ■""> X. Y. 178. bill."

'Sen/ v. Mitchell, 94 I', s, 582. ■ Humes v. Scruggs, 94 U. S. 24.

In I arley v. Kittson, 120 U. S. 317, 7 6 8 Mete. (Mass.) 122.

§ 159 AVOIDING DENIAL

303

probable and corroborating- circumstances."1 A plea
which avoids the discovery prayed for is no evidence in
the defendant's favor, though under oath and negativing
material allegations of the bill.2 In Bowden v. Johnson,
it was contended by counsel that, as the bill prayed that
the defendant should answer its allegations on oath, the
answer was evidence in his favor, and was to be taken as
true unless it was overcome by the testimony of one wit-
ness, and by corroborating circumstances equivalent to the
testimony of another witness. The court found facts
"sufficient to satisfy the rule of equity," and cite from
Greenleaf,4 to the effect 'that the sufficient evidence to
outweigh the force of an answer may consist of one wit-
ness, with additional and corroborative circumstances,
which circumstances may sometimes be found in the
answer itself ; or it may consist of circumstances alone,
which, in the absence of a positive witness, may be suffi-
cient to outweigh the answer even of a defendant who
answers on his own knowledge." 5 It seems that the
credibility of the defendants' answers setting forth con-
sideration, will be destroyed by proof that the vendee
permitted the vendor to assert in his hearing, without
contradicting him, that no indebtedness existed.0

1 Flagg v. Mann, 2 Sumner, 487. the circumstances, must be taken as

See Tompkins v. Nichols, 53 Aia. 198 ; true. Tobey v. Leonards, 2 Wall.

Parkman v. Welsh, 19 Pick. (Mass.) 430; Seitz v. Mitchell, 94 O. S. 582 ;

234 ; Hoboken Bank v. Beckman, 33 Voorbees v. Bonesteel, 16 Wall. 30 ;

N. J. Eq. 55 ; Morse v. Hill, 136 Mass. Collins v. Thompson, 22 I [ow, 253."

71. In Hill v. Ryan Grocery Co., 78 ' Farley v. Kittson, 120 U. s. :UT,

Fed. Rep. 25, the court says : " With 7 S. C. Rep. 534 ; Eeartl v. ( iorning,

only one witness, therefore, whose 3 Paige (N. Y. ) 566.

testimony was scarcely material, sup- :i 107 U. S. 262, 2 s. < '. Rep. '.' 16.

plemented by the written instruments, 4 Greenleaf on Evidence, vol.8, £

which upon their face negative the 289.

case made by the bill, the complain- 6 s. P. Williamson v. Williams, 11

ants were without proofs to outweigh Lea (Tenn.) 365.

or impair the force of the positive 6 Bradley v. Buford, Sneed (Ky .) 12.
denials of the answers, which, under

304 DISCOVERY \\l> RELIEF. §§ 1 60, 161

§ 160. Answer as evidence for or against co defendant. —
The equity practice seems to be settled that, generally
speaking, the answer of one defendant cannot be used
against another defendant.1 In Salmon v. Smith,2 the
rule is recognized that the answer of one defendant to a
bill in chancery which shows that the complainant is not
entitled to the relief sought inures in favor of his
co-defendant as evidence:' So it is said by Mr. Green-
leaf,1 "that where the answer in question is unfavorable
to the plaintiff, and is responsive to the bill, by furnishing
a disclosure of the facts required, it may be read as evi-
dence in favor of a co-defendant, especially where the
latter defends under the title of the former."5 Where
the complainants choose to rely upon admissions or con-
fessions in an answer, the denials and admissions must,
of course, be considered as a whole.6 A sworn answer
should be taken as true unless overcome by the testi-
mony,' but the denials to make an answer evidence must
be of facts stated in the bill.8 It may be here recalled
that the testimony of a single witness, uncorroborated by
circumstances, has been considered not sufficient to over-
come a verified answer positively denying fraud.9

?i 161. Pleading to the discovery and the relief. — Chan-
cellor Walworth stated in Brownell v. Curtis,10 that, in

Salmon v. Smith, 58 Miss. 408; 261. But see Camion v. Norton, 14

Powles v. Dilley, 9 Gill. (Md.) 222; Vt. 178.

McKim v. Thompson, 1 Bland (Md.) 6 Crawford v. Kirksey, 50 Ala. 597.

161. 'Hurd v. Ascherman, 117 111. 501,

58Miss. 100,408; BanoverNat. Bk. 6N. E. Rep. 160. See United Stafcesv.

v. Kl.in, (M .Miss. 151, s So. Rep. 208. Budd, 111 I'. S. Hi.-,, v: s. ( '. Rep. 575.

liavis v. Clayton, 5 Humph. 3Gainerv. Russ, 20 Fla. 162.

(Tenn.) 1 16 » See Garrow v. Davis, 15 How.

l3Greenl. Ev. g 283. 272; Evans v. Bicknell, 6 Ves. 184;

Mills \. Gore, 20 Pick. (Mass.) Lord Cranstown \. Johnston, 3 Ves.

Miles v. Miles, 32 X II. 147; 170; Pilling v. A.rmitage, 12 Ves.

Powles \ Dilley, '.» Gill. (Md.) 222; r8 ; Thompson v. Sanders, <! .J. .1.

Field v. Holland, 6 Cranch 8 ; Clason Marsh (Ky.) 93. Compare Allen v.

\. Morris, 10 Johns. (N. Y.) 524; Cole, 9 N. J. Eq. 286.

Linganv. Henderson, i Bland (Md.) 1010 Paige (N. X".) 214.

§ 162 DENIAL IN ANSWER.

certain cases, where the discover)' asked for would tend
to criminate the defendant, or subject him to a penalty or
forfeiture, or entail a breach of confidence, the defendant
was not bound to make a discovery to aid in establishing
the facts,1 although the complainant might be entitled to
relief. In the course of the opinion it was further said :
"But where the same principle upon which the demurrer
to the discovery of the truth of certain charges in the
complainant's bill is attempted to be sustained, is equally
applicable as a defense to the relief sought by the bill,
the settled rule of the court is that the defendant cannot
be permitted to demur as to the discovery only, and
answer as to the relief.2 This general rule is equally
applicable to the case of a plea ; and the defendant can-
not plead any matters in bar of the discovery merely,
when the matters thus pleaded would be equally valid as
a defense to the relief."

§162. Particularity of denial in answer. — Chancellor
Kent, in Woods v. Morrell,3 in discussing the sufficiency
of an answer to the allegations of a bill in equity, said :
" The general rule is, that to so much of the bill as is
material and necessary for the defendant to answer, he
must speak directly, without evasion, and not by way of
negative pregnant. Fie must not answer the charges
merely literally, but he must confess or traverse the sub-
stance of each charge positively, and with certainty ; and
particular precise charges must be answered particularly
and precisely, and not in a general manner, even though
a general answer may amount to a full denial of the
charges." i This rule is well illustrated in Welcker v.

•Citing Atty.-Gen. v. Brown, 1 129; Story's Eq. Pleadings, 254 n. 1 ;

Swanst. 294 ; Dummer v. Corporation Welf. Eq. Pleadings 133.

of Chippenham, 14 Ves. 245 ; Hare on :; 1 Johns. ( '!.. | X Y. 1

Discovery, 5. See § 165. 'See Eunter v. Bradford, 3 Fla.

2 Citing Morgan v. Harris, 2 Bro. C. 285 : Barrow v. Bailey, 5 Fla. 23.
C. 124: Waring v. Mackreth, Forresl
20

3o6 BILL OF PARTICULARS. § 162a

Price,1 where the bill charged that the land conveyed by
the debtor to his wife was " all the property of which the
said John F. was possessed." The answer set forth that
the debtor ''was then in good circumstances, with means
enough and more than enough to pay all his debts."
This latter statement was characterized as a mere legal
conclusion which a party was not permitted to draw for
himself, or to express an opinion concerning, without dis-
closing facts to justify it, and as being a mere evasion of
the real issue as to the possession of other property.

It is a familiar rule that a positive denial of fraud in an
answer will not prevail against admissions, in the same
pleading, of facts which show that the transaction was
fraudulent ; 2 also, that in weighing the whole evidence in
the case, the fact that the defendant answers only gener-
ally, denying the fraud, will operate against him whenever
the bill charges him with particular acts of fraud.3
A charge in a bill that the deed in question was never prop-
erly delivered, and that the grantor retained possession
after the conveyance, should, if untrue, be specifically
denied.4

§ 162a. Bill of particulars, — The granting of an order
for a bill of particulars in an action rests largely in the
sound discretion of the court. In actions ex delicto a bill
of particulars is only allowed by grace.5 Such orders
have been granted in almost every form of action.0 In a
Special Term case in New York, prosecuted to set aside
an assignment as having been made in fraud of creditors,

1 2 Lea (Term.) 667. « Hudgine v. Kemp, 20 Eow. 52.

Robinson v. Stewart, 10 X. Y. 5 Harding v. Bunnell, 14 Pa. Co. Ct.

194 ; Jackson v. Hart, 11 Wend. (N. Rep. 417.

y.) 349, per Savage, Ch. J. See IH>- 'See Dwight v. Germania Life Ins.

boken Bank v. Beckman, 33 X. J. Eq. Co., 84 X. V. 493; Tilton v. Beecher,

53; Sayre v. Fredericks, Hi X. .]. 59 X. Y. 176 ; Byrnes v. Lewis, 88

Eq. 205. II X. Y.i, 310, 31 N. Y. Supp.

•Parkman v. Welch, 19 Pick. 1028 ; Townsend v. Williams, 117 N.

Ma J34. C. 336, 23 S. E. Rep. nil.

§ 1 62a

MIL l. < »F PARTICULARS.

Lawrence, J., ordered the plaintiff to furnish certain pre-
ferred creditors with a bill of particulars of the times,
places, acts, and things which it was intended to prove,
as showing the fraudulent intent.1 A similar application
was denied in a later case upon slightly dissimilar facts.3
It would be destructive to creditors' proceedings in many
cases to allow a debtor to exact in advance a bill of par-
ticulars of the specific acts of fraud relied upon to support
the action. Fraud is generally established by developing
a series of minute circumstances, earmarks, and indicia.
These sometimes appear at the trial for the first time
when the creditor has obtained an opportunity to explore
the enemy's country by cross-examination it may be. As
the presumption of good faith in all transactions rests
with the defendant, and the general character of the
plaintiff's cause of action must be outlined in the plead-
ing, it would seem to be most unjust to require, in addi-
tion, a statement of the items of the creditors' evidence
in advance of the trial. Creditors are considered to be

1 Claflin v. Smith, 13 Abb. N. C.
(N. Y.) 205. See Byrnes v. Lewis, 83
Hun (N. Y.), 310, 31 N. Y. Supp.
1028 ; Gilhooly v. American Surety
Co.. 87 Hun (N. Y.) 395, 34 N. Y.
Supp. 347.

2 Passavant v. Cantor, 21 Abb N.
C (N. Y.) 259, 1 N. Y. Supp. 574,
48 Hun (N. Y.) 546; Faxon v. Ball, 50
N. Y. St. Reporter, 495, 21 N. Y. Supp.
737. Compare Isaac v. Wilisch, 69
Hun (N. Y.) 341, 23 N. Y. Supp. 589 ;
Constable v. Hardenbergh, 76 Hun
(N. Y.), 436, 27 N. Y. Supp. 1023;
Passavant v. Sickle, 14 Civ. Pro. (N.
Y.) 57 ; Riggs v. Buckley, 2 App. Div.
(N. Y.) 618, 37 N. Y. Supp. 1095. In
Gilhooly v. American Surety Co., 87
Hun (N. Y.), 397, an assignee sued for
personal property. The answer de-
nied that the assignor had assigned
all his property, and alleged that the

assignment was fraudulent. The
court said : " We think the defendant
should state whether it claims the
assignment to be void on accounl oi
fraudulent preferences, in which case

it Should State What preferences are

claimed to be fraudulenl ; or, if the
alleged fraud consists in the failure
of the assignor to transfer all his as-
sets to the plaintiff, in that event the
defend an! should particularize what
property, if any, il expects or intends
to prove on the trial was withheld i'.\

the assignor from the assigi and,

if on both -rounds, then all the par-
ticulars above specified should be
given." In Harding v. Bunnell, 11
Pa. Co. Ct. Rep. 419, the courl says :
■ We think the plaintiff Bhould state
what property was fraudulently in-
cumbered and in whal waj ."

308 DENYING FRAUD — ADMISSION AND AVOIDANCE. §§163,164

a favored class, and are entitled, with proper restrictions,
to " fish " through the debtor's transactions in pursuit of
hidden assets, and should not be fettered by any restrict-
ing orders. An application for a bill of particulars is
addressed to the sound discretion of the court, and, of
course, will be denied where the moving party may fairly
be presumed to possess the information.1

§ 163. Denying fraud or notice. — In order to entitle a
party to protection as a purchaser without notice he must
deny notice of the fraud fully and particularly, whether the
defense be set up by plea or answer,2 and even though
notice is not charged in the bill.3 A plea of bona fide pur-
chaser for value and without notice must be as full under
the Code as under the former system of equity pleading.4
We may here observe that constructive fraud is not
regarded as a fact, but is treated rather as a conclusion of
law drawn from ascertained facts. Hence, as has been
shown,5 where an answer denies the fraud, but neverthe-
less admits facts from which the existence of fraud follows,
as a natural and legal if not a necessary and unavoidable
conclusion, the denial will not avail to disprove it.6

£ 164. Admission and avoidance. — It is an established
rule of evidence in equity that, where an answer filed in
a cause admits a fact, and insists upon a distinct fact by
way of avoidance, the fact admitted is established, but the
fact insisted upon must be proved; otherwise the admis-
sion stands as if the fact in avoidance had not been
averred.7

: Kink v. Jetter.38 Bun(N. Y.iir,:;. 1 Weber v. Rothchild, 15 Ore. 388.

itanton v. Green, 34 Miss. 592; B See § 162.

Gallatin v. Cunningham, 8 < low. (N. Sayre v. Fredericks, 16 N. J. Eq.

J Lea. Cas in Eq. pp. 85, 86 ; 209; Cunningham v. Freeborn, 11

Miller v. Fraley.21 Ark. 22. Compare Wend. (N. V.) 253.

Friedenwald v. Mullan, in Beisk. * Clements v. M -e, 6 Wall. 315 :

Tenn | . Presley's Evidence, |>. K5 ; Han v.

'Manhattan Co. v. Evertson, (i Ten Eyck, 2 Johns. Ch. (N. Y.) 62 ;

Paige (N. Y.) 466. Clarke v. While, 12 Pet. 190. See

§§ 165, l66 AVOIDING l)lM'n\ ERV — AFFIRMATIV] RELIEF.

§165. Avoiding discovery. — An important question is
frequently presented as to whether or not a defendant can
defeat a discovery by pleading that the disclosure may
subject him to a criminal prosecution. Such a plea lias
been held not sufficient to excuse a discovery,1 while in
many cases it is regarded as sufficient to excuse the party
from answering." This same question comes up in vari-
ous forms in civil procedure, and at least in the United
States, the general rule and practice is that a party may
omit to verify a pleading, or decline to make a disclosure
which will tend to degrade or criminate him.

§ 166. Affirmative relief. — No affirmative relief can ordi-
narily be accorded to the defendant unless it is claimed
by cross petition, or as an affirmative defense ; yet where
such relief has been granted without objection in the
court below, the decree will not always, for that reason,
be reversed on appeal.3 It may be here observed that
jnder the practice in Alabama the fact that the debtor has
other property which might be subjected to the payment
of the judgment, is not available to a voluntary alienee
unless presented by cross bill.4 The homestead may 1"'
protected by cross bill.5 As elsewhere shown, the vendee,
when deprived of the property, may obtain reimburse-
ment for the amount actually advanced if no intentional
wron£ is shown. It is intimated in McLean v. Letch-
ford/'' that the court would not consider his claim to

Ringgold v. Ringgold, 1 H. & G. » Kellogg v. Aherin, 4S Iowa. 299.

(Md.) 11, 18 Amer. Dec. 250. 4 Leonard v. Forcheimer, 49 Ala.

1 Devoll v. Brownell, 5 Pick. (Mass.) 145.

448; Bunn v. Bunn, 3 New Rep. 679. 5 Thomason v. Neeley, 50 Miss. 313.

See Wich v. Parker, 22 Beav. 59. Where a homestead exemption ia

Compare Reg. v. Smith, 6 Cox C. C. relied on, it must be specifically

31. See g 161. pleaded. Graham v. Culver, 3 Wyo.

2 Michael v. Gay, 1 Fost. & Fin. 409; 639, 29 Par. Rep. 270 ; 30 W
Bay State Iron Co. v. Goodall, 39 N. 6 60 Miss. 182.

H. 237 ; Horstman v. Kaufman, 97
Pa. St. 147.

3IO WAIVER OF VERIFICATION. § l67

reimbursement in the absence of a cross bill, though it is
conceded that reimbursement has been made, in a proper
case, where no cross bill had been filed.1

§ 167. Waiver of verification. — The pleadings in the class
of litigation under discussion are usually verified. Where
code practice prevails, if a verified bill of complaint is
filed, all subsequent pleadings must be under oath except
demurrers, which, of course, only raise questions of law.
Though the complainant waive an answer under oath
from the defendant, yet the latter may nevertheless verify
the pleading. So held in Clements v. Moore.2 Swayne,
J., said : " It was her right so to answer, and the complain-
ants could not deprive her of it. Such is the settled rule
of equity practice, where there is no regulation to the
contrary." It is said that the practice of waiving an
answer under oath originated in the State of New York,
by virtue of a provision incorporated in the statute,3 at
the suesfestion of Chancellor Walworth, and was intended
to introduce a new principle into the system of equity
pleading. It was designed to leave it optional with the
complainant to compel a discovery in aid of the suit, or
to waive the oath of the defendant if the complainant was
unwilling to rely upon his honesty, and chose to estab-
lish his claim by other evidence.4

■Compare Dunn v. Chambers, 4 ant, though under oath, except such

Hark (X. Y.)381 ; Grant v. Lloyd, 20 part thereof as shall be directly respon-

Miss. L92 ; Alley v. Connell, 3 Head sive to such interrogatories, shall not

(Tenn.) 578. See?; 51. be evidence in his favor, unless the

■ 1; Wall. 314. The 41st Rule in cause be set down for hearing on bill

Equitj of the Supreme Court now and answer only," etc.

provides : " [f the complainant in ■' N. Y. R. S., p. 175, § 44.

his bill shall waive an answer under 4 See Armstrong v. Scott, 3 Greene

oath, or shall only require an answer (la.) 433; Burras v. Looker, 4 Paige

with regard to certain specified inter- (N. Y. ~22~.
rogatories, the answer of the defend-

CHAPTER XI.

OF THE JUDGMENT OR DECREE.

§ 168. The judgment conclusive.
1G9. Judgment res adjudicat a though
the form of procedure be
changed.

170. Judgment appointing receiver.
170a. Enforcing judgment at law.

171. Judgment avoids sale only as to

creditor — not absolutely.

172. Judgment transferring title.

173. No judgment in favor of unrep-

resented parties.
173a. Creditor suing in place of as-
signee.

174. Confession of judgment.

^ 175. Impounding proceeds of a fraud-
ulent sale.
170. Accounting by fraudulenl ven-
dee to debtor or creditor.

177. ) Personal judgment againsl

178. j fraudulenl vendee.

IT'.i. Monej judgment, when <li^al

lowed.
ISO. Personal judgment against wife.

181. Judgment must conform to re-

lief demanded.

182. Must accord with complaint.

183. Contradictory verdicts..
183a. New trial.

§ 168. The judgment conclusive.— The form of the judg-
ment or decree in suits to annul fraudulent transfers, or to
reach equitable assets, and the rights secured by the adju-
dication, constitute important branches of our subject
from a practical standpoint. The usual attributes attach
to the judgment in this class of cases. The recovery of
a judgment is regarded as an estoppel upon the parties
as to the subject-matter investigated.1 But the estoppel
has no wider effect. Raymond v. Richmond- is an illus-
tration of our meaning. There the action was instituted
by an assignee against a sheriff and an execution cred-
itor, for levying upon property which had theretofore
been adjudged to belong to the assignee, in an action to

■See In re Hussman, 2 N. B. R. * 78 N. V. 351 ; second appeal, 88

441; Downer v. Rowell, 25 Vt. 336; N. Y. 671 ; Brooks v. Wilson, 125 N.

Raymond v. Richmond, 78 N. Y. 351 : V. 256, 26 X. E. Rep. 258 , Eumes v.

Bell v. Merrifield, 109 N. Y. 211, 10 Scruggs, 94 U. S. 22.
N. E. Rep. 55 ; Hymes v. Estey, 116
N. Y. 509, 22 N. E. Rep. 1087.

312 JUDGMENT RES ADJUDICATA. § ^9

which the assignee, the assignor and the execution
defendant were parties. The court very properly held
that, as the creditor under whose judgment and execution
the seizure had been effected, was not a party to the prior
litigation, the adjudication did not conclude him. Hence
such creditor was entitled to show that the transfer made
by the execution defendant, although the title had been
adjudged to be in the assignee, was fraudulent in fact,
and the seizure of the property by the creditor therefore
justifiable. Manifestly a purchaser of a chattel mort-
gage is not concluded by a subsequent adjudication in an
action against the mortgagor and mortgagee to which he
was not a party, declaring the mortgage to be fraudu-
lent.1 And a decree between husband and wife, estab-
lishing in the wife's favor a resulting trust in the
husband's lands, is not conclusive upon the husband's
existing creditors.2 Nor is a judgment obtained on an
attachment even prima facie evidence against a person
who claims to be a bona fide purchaser for value of the
property attached.3

Where fraud is essential to a cause of action it must be
found as stated.4

If a court of equity has jurisdiction and entertains the
case it will ordinarily retain the case till the whole subject
is disposed of.5

§ 169. Judgment res adjudicata though the form of pro-
cedure be changed. —Where creditors seek by bill in equity
to subject a vested estate in remainder to their claims,

'Zoeller v. Riley, 100 N. Y. 102, 2 4 Brunei- v. Brown, 139 Intl. 610,38

N . E. Rep- 388. N. E. Rep. 318 ; Fletcher v. Martin,

-Old Folks' Society v. Millard, 86 126 Ind. 55, 25 N. E. Rep. 886.
Tenn. 657 ; Humes v. Scruggs, 94 U. 5 Ostranderv. Weber, 114 N. Y. 102,
S. 22; Branch Bank of Montgomery 21 N. E. Rep. 112; Taylor v. Taylor,
v.Hodges, 12 Ala. 118. 43 N. Y. 578, 584; Ludlow v. Si-
nn \. Smith, 68 .Miss, 773, 10 So. mond, 2 Cai. Cas. (N. ST.) 55.
Rep. 70. See also Goodwin v. Snyder,
75 Wis. 450, II X. W. Rep. 746.

§ I/O JUDGMENT APPOINTING REi l [VER.

and the courts decide against them, the question will be
res adjudicata if the creditors afterward try to levy by
execution on the same interest, when it has become an
estate in possession by the death of the life tenant.1

§ 170. Judgment appointing receiver. — The particular
form of a decree in a creditor's action to cancel a fraudu-
lent conveyance is, in some instances, of vital importance
to the complainant. A court of equity undoubtedly pos-
sesses the power to pronounce a judgment annulling and
clearing away the fraudulent obstruction, and then, 1>\
acting upon the person of the debtor, to compel him to
convey the title to a receiver.5-' It is considered irregular
to appoint a referee in the judgment ; there should be a
receiver and a direction that the defendant convey to
him.3 The practitioner should be cautious about enter-
ing up judgment, as the title which the receiver or a
purchaser from him acquires rests upon the debtor's own
conveyance, and has no relation to the original judg-
ment which is the foundation of the bill in equity. It has
been intimated that when the creditor pursues this course
he abandons the lien of his judgment and seeks satisfac-
tion of his debt out of the debtor's property generally.
In Chautauque County Bank v. Risley,1 the creditor's

1 Nichols v. Levy, 5 Wall. 438. 1030, the court said : "On a hill filed

■ Chautauque County Bank v. Ris- to reach real property fraudulently

ley, 19 N. Y. 374 ; Cole v. Tyler, 65N. transferred by the debtor, the claims

Y. 77. Compare McLean v. Cary, 8S of several creditors are satisfied in the

N. Y. 391 ; White's Bank of Buffalo order of the priority of the judg-

v. Farthing, 9 Civ. Pro. (N. Y.) 66, ment." In Wilkinson v. Paddoci

101 N. Y. 344, 4 N. E. Rep. 734; Hun (X. Y.) 197, affi'd, 125 N. V. 748,

New York Life Ins. Co. v. Mayer, 19 the court says : " The doctrine of the

Abb. N. C. (N. Y.) 92; Union Nat. authorities seems to be t" tl"- effect

Bk. v. Warner, 12 Hun (N. Y.) that, as to real estate, judgment-

306. creditors acquire liens thereon in the

3 Union Nat. Bk. v. Warner, 12 order in which their judgments
Hun (N. Y.) 306. docketed, and that their priori!

4 19 N. Y. 374. In Brown v. not affected by -^uits brought to sel
Chubb, 135 N. Y. 180, 31 N. E. Rep. aside a fraudulent transfer of such

514 ENFORCING JUDGMENT AT LAW. § I/Oa

action was founded upon the first judgment recovered
against the debtor, and the property was, under the order
of the court, conveyed by the debtor to a receiver. It
was decided that another creditor, whose judgment was
subsequent to that which was the foundation of the
creditor's bill, but which was entered prior to the time the
bill was filed, might sell the real estate on execution, and
the purchaser at such sale would acquire a better title
than the grantee from the receiver. The creditor should
therefore be careful not to sacrifice the advantage which
the prior judgment gives him, and, having cleared the
fraudulent conveyance out of the way, should, especially
if subsequent judgments have been entered, proceed by
execution and sale on his first judgment.1 In Cole v.
Tyler,2 the judgment set aside the conveyance and merely
directed that the receiver should sell, execute deeds, etc.
It is not easy to discover the theory upon which the
receiver could be said to have acquired the title. The
improper form of the judgment was assigned as a ground
for its reversal, but the court said that if the direction to
sell, etc., was erroneous, the error would not be rectified
by an appeal, but the correct procedure was by motion to
correct the judgment, the matter being one merely of
detail, and not affecting the decision upon its merits.

§ 170a. Enforcing judgment at law. — The position was
urged by counsel in Smith v. Reid,3 that, though the
creditor's judgment and execution were regular, yet the
real estate in controversy could not be sold until the

real estate. (White's Hank v. Farth- Rep. 734; Sband v. Eanley, 71 N. Y.

Lng, 101 N. Y. 346,347 ; Underwood v. 319; Union Nat. Bank v. Warner, 12

Sutcliffe, 77 N. Y. 62 ; N. Y. Life Ins. Hun (N. Y.) 309; Cole v. Tyler, Go N.

Co x. Mayer, 19 AM.. N.C.(N. 5T.)92 ; Y. 73.

s. c. L2 N. Y. Stat.- Rep. 119 ; O'Brien * G5 N. Y. 77.

v Browning, 49 How. Pr.(N.Y.)113)." 3 134 N. Y. 568, 577, 31 N. E. Rep.

1 Compare White's Bank of Buffalo 1082.
v. Farthing, 10] N. Y. 344, 4 N. E.

§ i7i

JUDGMENT AVOIDS SALE.

15

alleged conveyance of it had been set aside 1»\ a valid
judgment decreeing such conveyance to be fraudulent.
Brown, J., said: "A judgment-creditor cannot be
deprived of his legal right to enforce collection of his
judgment against the lands of his debtor by a fraudulent
conveyance thereof prior to the entry of the judgment,
nor can he by such a conveyance be forced to pursue an
equitable remedy for the collection of his debt, instead of
a legal one, and the whole current of authority in this
State is to the effect that notwithstanding the fraudulent
conveyance, the judgment-creditor may sell the land
under execution upon his judgment, and the purchaser
may impeach the conveyance of the land in a suit at law
to recover possession, or if he can gain possession defend
the title thus acquired against the fraudulent grantee or
those claiming under him." ]

The jurisdiction over equitable interests at law is being
extended.3

§ 171. Judgment avoids sale only as to creditor — not abso-
lutely.—The principle must always be kept in view that

1 See Chautauque County Bank v.
Risley, 19 N. Y. 369 ; Bergen v. Car-
man, 79 N. Y. 153; Smith v. Reid, 11
N. Y. Supp. 739, 19 Civ. Pro. (N. Y.)
363. Compare, however, Lamont v.
Cheshire, 65 N. Y. 30; Porter v.
Pico, 55 Cal. 165, 175; Bergen v.
Snedeker, 8 Ahb. N. C. (N. Y.) 50-58 ;
Bockes v. Lansing, 74 N. Y. 437 ;
Erickson v. Quinn, 15 Abb. Pr. N.
S. (N. Y.) 168. Tbe rule as to lis
pendens must be observed in this con-
nection. In Hovey v. Elliott, 118
N. Y. 138, 23 N E. Rep. 475, the court
says: " The theory of the doctrine of
lis pendens is to preserve the situation,
as it is when the original litigation
is commenced, until its termination,
that the successful party may then
take the fruits of it without interrup-

tion from another, who may have,
during its pendency, sought to obtain
some right to the property in contro-
versy. Tilton v. Cofield, 93 0. S.
163; Lamont v. Cheshire, <'>•"» X. Y.
36, and cases there cited." An active
creditor must inform himself con-
cerning the exact status of pending
controversies affecting the propertj
which he has pursued, lest subse-
quent adjudications may relate hack
and undermine the apparenl title or
right which he has gained.

■ Anderson v. Briscoe, 12 Bush.
(Ky.) oil : Kennedy v. Nunan, 52< !al.
326' ; LeRoy v. Dunkerly, 51 < al. 152 ;
Johnson v. Conn. Bank, 21 < !onn, 1 Is :
Eutchins v. Heywood, 50 N. II. 591 ;
Carleton v. Banks, 7 Ala. 82.

l6 JUDGMENT avoids SALE. §171

a fraudulent sale is good between the parties. Giving
effect to this doctrine generally controls the form of the
judgment in a creditor's action. Thus in Orr v. Gil-
more,1 the conveyance was found to be voidable as
against the creditor, but the court decided that the only
judgment to which the complainant was entitled was a
decree for the sale of the lot in suit and the payment of
the amount of the claim with interest and costs. The
sale being valid between the debtor and the fraudulent
vendee, there was nothing to warrant a judgment declar-
ing it null and void as to every one. In the case cited
the judgment which was held by the higher court to be
erroneous declared that the property belonged to the
debtor. This was manifestly wrong, for, where it does
not appear that there are other creditors, the judgment,
whether it directs a sale on execution by the sheriff,- or
by a receiver,3 should only declare the conveyance void
as to the plaintiff's judgment, and direct a sale for the
payment of that alone. The grantee is entitled to all
that might remain of the proceeds in the shape of sur-
plus,4 and, when the creditor is paid, the decree can-
celling the conveyance is satisfied.5 " The action of
chancery," said Nelson, J., "upon the fraudulent grantor
or assignee, is only to the extent of supplying a remedy
to the suitor creditor ; as to all other parties, the assign-
ment remains as if no proceedings had been taken."
Under the Civil Code in Louisiana if the action is suc-
cessful the judgment is that the conveyance be avoided

1 T Lans. (N. Y.) 345; Duncan v. ' Van Wyck v. Baker, 10 Hun (N.

Custard, '.'1 W. Va. 731 ; Kennedy v. Y.) 40; Colhnson v. Jackson, B Saw-

Barandon, 67 Barb. (N. Y.) 209. yer, 365 ; In re Estes, <> Sawyer. 460.

Orr v. Gilmore, T Lans. (N. S\) Rawson v. Fox, 65 111. 202. See

345; Kennedy v. Barandon, 6? Barb. Bostwick v. Menck, 40 N. Y. 383;

X. Y) 309; Belgard v. McLaughlin, Kerr v. Hutchins, 46 Tex. 384.

t4Hun(N.Y.)557, 9N.Y. St. Rep. 38. ' McCalmont v. Lawrence, 1

Chautauque Co. Hank v. Bisley, Blatchf. 235.
19 X. Y 869.

§ 1/2 H DGME1S I Tl; VNSFERRING I II I I . 317

as to its effect on the complaining creditors.1 Nor is
the judgment-creditor entitled to get satisfaction out of
anything but the actual interest of his debtor in the prop-
erty conveyed; if he is a junior judgment-debtor, the
fact that his judgment is used as a means of attack gives
him no priority over senior judgments."

§ 172. Judgment transferring title. — The court has no
power to effect a transfer of title to land by ordering a sale
of it, except in special cases authorized by statute, such
as mortgage and partition sales, sales of infants' lands,
ordinary execution sales, and the like. In suits brought
to reach lands conveyed with intent to defraud creditors,
the proper decree, in New York at least, is to set aside
the fraudulent conveyance, and permit the creditor to
issue an execution and sell under it, or compel the debtor
to convey to a receiver and direct the latter to sell. It
was said by Gilbert, J., in Van Wyck v. Baker,3 that " the
fraudulent deed being annulled, the title remains in the
debtor, and can be passed only by her deed." 4 If how-
ever, the receiver is directed to sell without obtaining a
prior conveyance from the debtor, the erroneous judgment
is not, as we have seen,5 to be rectified by an appeal from
the judgment, but a motion should be made to correct
it.'3 Where an execution purchaser seeks to cancel a cloud
on his title, of course no conveyance is requisite, as the
plaintiff will be left in the full enjoyment of the title
acquired by the sheriff's deed.7

1 Claflin v. Lisso, 27 Fed. Rep. 420. Paige (N. Y.) 404 ; I lhautauque ( •>

-'Henderson v. Henderson, 133 Bk. v. Whit.', 6 N. Y. 236 ; Chau-

Penn. St. 399. 19 Atl. Rep. 424; tauque Co. Bk. v. Risley, 19 V V.

White's Bank v. Faithing, 101 N. Y. 369. See Dawley v. Brown, 65 Barb.

346, 4 N. E. Rep. 734; Wilkinson v. (N. Y.) 107.

Paddock, 57 Hun (N. Y.) 191, 11 N. See : L70.

Y. Supp. 442, affi'd 125 X. Y. 748, 27 "Cole v. Tyler, 65 N 5

N. E. Rep. 407. : Hager \. Schindler, 29 < !al. 69. li

3 10 Hun (N. Y.) 40. is sai'l in Auks v. Gilmore, 59 Mo.

4 Citing Jackson v. Edwards, 7 541, that courts of chancery may, in

5 I S UNREPRESENTED PARTIES— CREDITOR SUING. §§ 1/3, 173a

£ 173. No judgment in favor of unrepresented parties. — In
a case before the Supreme Court of California1 it was
said to be an anomaly in practice to render judgment in
favor of a party who was not before the court, and was
not represented in any manner in the action. This obser-
vation was made in an action brought by a creditor against
a fraudulent grantee to set aside a conveyance made by a
deceased debtor, the ground of relief assigned being that
the conveyance was made to hinder and delay creditors.
The representative of the deceased debtor was not a party.
The court very properly decided that it was error to ren-
der a judgment declaring a trust against the fraudulent
grantee and in favor of the unrepresented estate of the
grantor

§ 173a. Creditor suing in place of assignee. — If an as-
signee refuses in a proper case to institute proceedings
to get possession of the assigned property, the creditors
collectively, or one suing in the right of all who may join
in the action, may compel the execution of the trust in
equity,2 or cause the removal of the assignee and the
appointment of another. It seems, however, that in
either case a decree for a single debt would be erroneous ;
the decree must follow the assignment, and the fruits of
a recovery must be distributed according to its terms.3

suits to annul a fraudulent deed, not ' Bach man v. Sepulveda, 39 Cal.

only divest the title of a fraudulent 688.

grantee, but the decree may proceed -' Lee v. Cole, 44 N. J. Eq. 322, 15

to vest thetitle in the plaintiff. See All. Rep. 531 ; White v. Davis, 48 N.

Kinealy v. Macklin, 2 Mo. A.pp. -Ml ; .1 Eq. 22,21 Atl. Rep. 1ST: Kalnius v.

Epperson v. Burgett, 33 A.rk. 328. Ballin, 52 N. J. Eq. 294, 28 Atl. Rep.

Tin' Logical theory upon which (his 791.

procedure is founded is not easily dis- 8Crouse v. Frothingham, 97 N. Y.

covered, [n the absence of statutory 105. Compare Bate v. Graham, 11 N.

authority how can :i court become Y. '.':'>T : Everingham v. Vanderbilt,

1 1 of anj title which ii can 12 Hun (N. Y.) ','> ; Manning v. Beck,

confer or bestow upon the creditor? 129 X. Y. 1. '.".) N. E. Rep. 90; Lee v.

h^ province is to clear incumbrances Cole, II N. .1. Eq. 318, 15 All. Rep.

ierce 1 ransfers. 581 ,

§§ 174- T75 CONFESSION l II JUDGMEN I .

§ 174. Confession of judgment. — A transfer of property
by a person heavily indebted, made by means of a con-
fession of judgment and sale on execution, was adjudged
void in Metropolitan Bank v. Durant,1 upon proof that
it was intended to defraud creditors, and that the pur-
chaser had knowledge of the facts Collusive judgments,
as we have seen,3 are always open to the attack of cred-
itors. A judgment entered by confession upon an insuf-
ficient statement of facts is effectual and binding: between
the parties, and a sale of property under it is legal and
valid against all the world except existing creditors having
a lien upon the property.3 And while in the absence of
knowledge on the part of the creditor the fraudulent in-
tent of the debtor alone will not invalidate the judgment,
yet where the judgment is entered and execution levied
originally without his knowledge, his rights will be subor-
dinate to the ricrhts of creditors who took an attachment
before the said acts were ratified.4

§ 175. Impounding proceeds of a fraudulent sale. — W hile
it may be true that the money received by a fraudulent
vendee from the sale of the property is not legally a debt
due by the vendee to the fraudulent vendor, because the
court will not assist to enforce or render effectual the
fraud, yet in the intention of the parties it is a debt, and
creditors may treat it as such and attach or reach it by
judicial process.5 The beneficent and remedial provi-
sions of the statute 13 Eliz. would be of little avail if a
fraudulent grantee could pass the property over to a mere
volunteer without notice of the fraud, and upon that

1 22 N. J. Eq. 35; White v. Beiij;i- 17 N. Y. 9; Mitchell v. Van Buren,

min, 3 Misc. (N. Y.) 490, 23 N. Y. 27 N. Y. 300.
Supp. 981. 'Galle v. Tode, 148 N. Y. 270, 12 N.

'-' See § 74, and note. E. Rep. 673.

-Miller v. Earl.', 24 N. V. 112. 'Heath v. Page, 63 Pa. Si 124;

Compare Marrin v. Man-in, 27 llmi French v. Breidelman, 2 Granl (Pa.)

(N. Y.) G02; Dunham v. Waterman, 319; Mitchell v. Stiles, 13 Pa. SI

320

OUNTING BY FRAUDULENT VENDEE.

176

ground claim that the property or its proceeds were safe
from the pursuit of creditors.1

§ 176. Accounting by fraudulent vendee to debtor or
creditor. — Though a party may have intended to defraud
the creditors of a debtor by taking- and converting his
property into cash, such intent is rendered harmless by
his delivering the proceeds of the sale to the debtor or his
authorized agent. If the party has accounted to the
debtor for the proceeds of the property before proceedings
are taken against him by the creditor, he cannot be forced
to account for it over again." The creditor must show
that something remains which ought to be applied on the
judgment. Where a third person has in good faith
received a conveyance of the property in trust for an
alleged fraudulent grantee, and has subsequently con-

" Where a transfer of property is
made, which is held void under the
provisions of the bankruptcy act, as
againsl tin- assignee in bankruptcy,
the transferee is properly to be re-
garded as a trustee for tin- plaintiff,
and to I"' held to account as such, es-
pecially where, as in this case, il
appears that sonic, it' not all, of the
property, has passed away from the
transferee." Schrenkeisen v. Miller,
'.) Ben. 65. It dors not affed the
right of th^ creditor to an accounting
that the property was no longer
actually in tie- hands of the fraudu-
lent grantee at t he time the creditor
obtained judgment, if tin- fraudulent
grantee still retains a benefit from
the illegal transaction. McConihe v.
Derby, 62 Hun (N. V. . 90, 16 N. Y.

Supp. IT 1.

Cramer v. Bl I. 57 Barb. X. Y.)

If,:;, affi'd 48 N. Y. 684 ; Murphy v.
Briggs, 89 N. Y. 1 16 See < Iramer v.

Bl I. 57 Barb. (N. i .'171 ; Clements

\. M -e, 6 Wall. 299; Davis \.

.".' Barb. (N. Y | 180. In

Greenwood v. Marvin, 111 N. Y. 434,
19 N. E. Rep. 228, the New York
Court of Appeals said: "The equi-
table rights of the parties were to re-
main the same ; the legal owner was
to account to the other party for the
net profits of the business, and no
other mode of division is suggested
than that of equality". If, therefore,
that agreement effected any change
in the relations of the parties, it
operated as a temporary expedient to
bridge over the period of Le Grand
Marvin's pecuniary embarrassment,
presumably with a view of restoring
the original relations of the parties at
some future time when it would be

safe to <h> so. If that agreement was

executed. ;|s seelUS Very probahle,

with a view of hindering and delay-
ing the creditors of Le Grand, it was
-till competent for the parties, in the
absence of interference h\ creditors,
to rescind it at any time, and restore
t< > each ol her an equal legal interest
in the property acquired under such
agreement."

§ i77

PERS< >NAL 1 1 I >i . \1 | \

veyed it to such grantee, pursuant to the trust, it has been
held that such third person is not a proper defendant in a
creditor's action, simply because no cause of action exists
against him.1 The trustee, under an assignment of lands
which is declared fraudulent at the suit of a creditor,
cannot be compelled to account for the rents received and
applied according to the provisions of the trust, before
the commencement of the action." And a fraudulent
grantee who is forced to account to a creditor for rents
and profits, is entitled to an allowance for payments made
by him for taxes, interest on mortgages and repairs
necessary for the preservation of the propertv. The
accounting must proceed on equitable principles ;

§ 177. Personal judgment against fraudulent vendee. -The;
right of a judgment-creditor to a personal or money judg-

1 Spicer v. Hunter, 14 Abb. Pr. (N.
Y.)4.

Relief at law and in equity. — In
Clements v. Moore, 6 Wall. 312, the
court said : " When the fact of fraud
is established in a suit at law, the
buyer loses the property without
reference to the amount or applica-
tion of what he has paid, and he can
have no relief either at law or in
equity. When the proceeding is in
chancery, the jurisdiction exercised
is more flexible and tolerant. The
equity appealed to — while it scans
the transaction with the severest
scrutiny — looks at all the facts, and
giving to each one its due weight,
deals with the subject before it ac-
cording to its own ideas of right and
justice. In some instances it visits
the buyer with the same consequences
which would have followed in an
action at law. In others it allows a
security to stand for the amount ad-
vanced upon it. In others it compels
tlir buyer to accounl only tor the
difference between the under price
21

which he paid and the value of the
property. In others, although he
may have paid the full value, ami the
property may have passed beyond the
reach of the process of the court, it
regards him as a trustee, and charges
him accordingly. Where lie has
honestly applied the property to the
liabilities of the seller, it may hold
him excused from further respon
sibility."

2Coilumh v. Read, -J I X. 5
See ?' 36. As to when a judgment
against an assignee cancelling an as-
signment as fraudulent is a final judg
inent. and how the same should he

entered and enforced, see Myers v.
Becker, 95 N. V. 486.

3 Loos v. Wilkinson, 113 X. Y. [H5,
21 N. E. Rep. ".'•i-'. See Smith v.
Wis... 132 X. Y. 179, 30 N. E Rep.
329 ; Hamilton Xat. Bk. \. Balsted,
134 X. Y. 530, 31 N. E Rep 900

i lompare I >a\ is v. I pold, s? N Y

020 ; Cutcheon y . I orbitt, '■»'.» Mich
578, 58 X. W. Rep IT'.i : Swift v.
Hart, 35 Bun (N Y.

322 PERSONAL JUDGMENT. §177

ment against a fraudulent vendee of his debtor l comes
up frequently for adjudication, and is discussed in many
of the authorities. In the case of Ferguson v. Hillman,'~
in the Supreme Court of Wisconsin, the conveyances and
mortgages had been adjudged fraudulent as to creditors,
and knowledge of the fraud had been fastened upon the
grantee. The familiar principle, elsewhere discussed, to
the effect that a fraudulent grantee in possession of the
property of the debtor cannot be protected, as against
the creditors of the debtor, even to the extent of the
money or other consideration given for the transfer, was
invoked and applied.3 The court observed that it
seemed to follow as a necessary consequence that a
fraudulent grantee could not be protected in the posses-
sion of the proceeds of such property received by him
upon effecting a sale of it. The property in the hands
of a fraudulent purchaser is held by him in trust for the
creditors of the fraudulent vendor, and when the property
is converted into money the fund thus created is impressed
with the same trust. Were the rule otherwise, the grantee
might defeat the creditor's claim by fraudulently changing
the character of the property. In equity such money in
the hands of the fraudulent grantee is a fund held for the
benefit of the creditors of the grantor; and while such
creditors may not be able to maintain an action at law
for money had and received for their use, because they
were never the owners of, or had title to the property
which had been converted into money, yet a court of
equity, having all the interested parties before it. pos-
sessed the power to direct such application of it as would

Sei .' 62. v. Johann, 37 Wis. 246; Union Nat.

i5 Wis. lid). 10 X. W. Rep. 389. Bank v. Warner, 12 Bun (X. Y.)306;

Mason v. Pierron, 69 Wis. 585. 34 Briggs v. Merrill. 58 Barb. (N. Y.)

\. W. Rep. 921; Ringold \. Suiter. 389; Fullerton v. Viall, 42 Bow. Pr.

35 W. V.-i. 186,13 8. E Rep. 46. (N. Y. ) 294 ; Salt Springs Nat. Bank v.

Gardinier \. Otis, 13 Wis. 160; Fancher, 92 Bun(N. Y.), 327, 36 N. Y.

Stein \. Hermann, ',':; Wis. 132; Avery Supp. 742.

S 177 PERSONAL JUDGMEN I .

be just. The court further held that if, in a proper 1
equity had the power to order the fraudulent grantee to
pay or apply the money received by him in satisfaction of
the debt of a creditor, then the fact that it directed a per-
sonal judgment to be rendered against him for the money
so received, and that the amount be collected on execu-
tion, was merely a matter of form, which did not prejudice
his rights, and of which he could not complain. Fuller-
ton v. Viall 1 is an authority in point in this discussion.
This important case, which certainly embodies features
of vital interest to creditors and vendees whose good
faith is questioned, seems to have been affirmed both at
the general term of the Supreme Court and in the Court
of Appeals of New York, without any written opinion
having been given. The published report of the case was
prepared by one of the counsel. The facts were briefly
as follows : The defendant had taken from a debtor a con-
veyance of real estate, subject to a mortgage of $800,
agreeing to pay $1,000 in addition. The sum of $500
was paid to the debtor in cash, and $500 by cancelling a
debt due from the debtor to the grantee. Before the
creditor's suit was instituted the grantee had sold the real
estate to a bona fide purchaser, and realized from such
sale the sum of $2,270. The court found that the con-
veyance was made in fraud of the grantor's creditors, and
that the creditors were entitled to judgment against the
fraudulent grantee for the value of the premises over and
above the prior valid incumbrances. The recovery was
not limited to the amount received by the fraudulent
grantee on the sale, but his liability was held to extend
to the value of the property fraudulently received by him.

1 42 How. Pr. (N. Y.) 294; Swin- Chamberlin v. Jones, ill 1 n< i. mi. 16

ford v. Rogers, 23 Cal. 233; .tones v. N. E. Rep 17s : Mason \. Pierron, 60

Reeder, 22 Ind. 111; Hubbell v. Wis. 583, 34 N. W. Rep.921 ; Christian

Currier, 92 Mass. 3:j:! : Dilworth v. v. Greenwood, 23 Ark. 258. See Rob

Curts, 139 111. 508, 29 N. E. Hep. S(il ; inson v. Holt. :'.'.) N. II. 557.

324 Pi RS< >N \l JUDGMENT. § 1 78

and which he had put beyond the reach of the creditors
of his fraudulent grantor, subject, as already stated, to
the prior valid incumbrances The grantee must have
found in this case that the way of the transgressor was
hard, for he was neither allowed credit for his own debt,
which constituted part of the consideration, nor for the
$500 paid to his grantor in cash.1

£ 178. — Murtha v. Curl.ey2 apparently puts this ques-
tion of the creditors' right to a personal judgment against
the fraudulent vendee at rest in New York. The vendee
had foreclosed a fictitious chattel mortgage upon the
property of the debtor, and had converted the proceeds,
which exceeded the creditors' claim, to his own use.
A money judgment was directed against the vendee for the
amount of the plaintiffs' claim. The court held that this
did not stamp the action as being legal rather than equi-
table, and that the judgment was proper in form. Earl, J.,
said : " A court of equity adapts its relief to the
exigencies of the case in hand. It may restrain or
compel the defendant ; it may appoint a receiver, or
order an accounting ; it may compel specific performance,
or order the delivery to the plaintiff of specific real or
personal property ; or it may order a sum of money to be
paid to the plaintiff, and give him a personal judgment
therefor." Where the property has been converted there
is nothing to be sold, and no occasion for a receiver and

See Union Nat. Bani v. Warner, Farlin v. Sook, 30 Kan. 401, I Pac.

1.' Hun. 306-308; Ferguson v. Hill- Rep. 123. In Solinsky v. Lincoln

man. 55 Wis 192, 12 X. W. Rep. 389. Savings Bank, 85 Tenn. 372, the court

mi X. Y. :;:•.': 12 AM.. N. C. (N. says: "When a fraudulent vendee

Y 12, and notes; s p., Warner v. has so concealed or disposed of the

Blakeman, 4 Abb. Ct A.pp. Dec. (N. property that creditors cannot reach

Y.iVin: Smith \. Sands, I? Neb. Ill*, or identify it. the creditor may. in

23 x. \\'. Rep. 356, citing the text : equity at least, recover the proceeds

Valentine \. Richardt, 126 X. Y. J 7 7 . or value thereof." Compare Bads v.

'.-; X. E. Rep. 255; Bell v. Merrifield, .Mason, L6 Brad w. (111.) 545.
Hi!) X. Y. 207, Hi X. E. Rep. 55 ;

§ 179 ^|( »NEY JUDGM1

no special need to state an account.1 In Williamson v.
Williams,' the fraudulent vendee had sold the land to a
bona fide purchaser, and it was said that having deprived
the creditor of the property, and obtained its price, he
must be held responsible by reason of this fraudulent
disposition of the property to the amount of the consid-
eration received by him. The money stood for the land
in his hands."

§ 179. Money judgment, when disallowed.— McLean v.
Cary,4 in the New York Court of Appeals, is a peculiar
case in which a money judgment was denied. Plaintiff
was a judgment-creditor. It was proved substantially thai
the debtor Greene sold to the other defendants certain
machinery with an agreement that $12, coo of the consid-
eration was to be paid in steam power. At a time when
$9,000 remained unpaid a settlement was effected practi-
cally on the basis of a balance of $4,000. The court
avoided the settlement as being fraudulent against the
creditor, and the question as to the authority to render a
money judgment against the defendants was presented
The complaint, it may be observed, prayed that the settle-
ment beset aside as fraudulent, that a receiver be appointed,
and that the creditor be paid out of the moneys realized
by the receiver. No money judgment was demanded,
and the court held that under the circumstances none

1 See also Gillett v. Rate, 86 N. Y. poses of this case, I" considered in

87, 10 Abb. N. C. (N. Y.) 88; Steere equity as the laud Itself."

v. Hoaglaud, 50 111. 877; Quinby v. ; In Wheeler v. Wallace, 53 Mich.

Strauss, 90 N. Y. 664. 355, ill N. W. Rep. :!:'.. it was held

•11 Lea (Tenn. ) 370. In Valentine that creditors levying upon property

v. Richardt, 126 1ST. Y. 277, 27 N. E. fraudulently transferred had no

Rep. 255, the court says : "The fraud- right to take from the transferee the

ulent conveyance which the defend- increase it thej had allowed ii '■>

ant obtained from the owner of the accumulate for a long time under his

land enabled him to sell it to a pur- management before attacking the

chaser in good faith and the money transaction,

that he received therefor, with the 4 88 X. V. 391.
interest thereon, can, for all the pur-

326 PERSONAL JUDGMENT AGAINST WIFE. § 180

was authorized, as the contract was payable in steam
power and not in money. Under the practice in Illinois
it seems to be implied that a personal or money judgment
is improper in an action to annul a fraudulent transfer. In
Patterson v. McKinney ' this objection was taken, but the
court said that as the cause was to be remanded it could be
obviated by making an alternative decree providing that,
if the judgment was not paid within a time to be limited,
the land should be sold on execution. In Dunphy v.
Kleinsmith,2 which was a creditors' suit against a fraudu-
lent vendee, a judgment for damages was held to be
improper ; the correct relief was said to be by decree for
an account.3

>: 180. Personal judgment against wife.— Where property
is conveyed to a wife in fraud of her husband's creditors, it
seems that a judgment in personam for its value cannot be
taken against the wife, nor in case of her death, against her
executors.4 Miller, J., said : " While the books of reports
are full of cases in which real or personal property con-
veyed to the wife in fraud of the husband's creditors has
been pursued and subjected to the payment of his debts
after it had been identified in her hands, or in the hands of
voluntary grantees or purchasers with notice, we are not
aware of any well-considered case of high authority where
the pursuit of the property has been abandoned, and a judg-
ment in personam for its value taken against the wife.
Certainly no such doctrine is sanctioned by the common
law ; and, though the present suit is a bill in chancery, the
decree in this case is nothing more than a judgment at law,
and could as well have been maintained in a separate suit

1 97 111.41. 52. followed. Trust Co. v. Sedgwick, 97

II Wall. 615 ; compare Maun v. U. S. 304; Huntington v. Saunders,

Appel, 31 Fed. Rep. 383. 100 U. S. 78, 7 8. C. Rep. 356. The

See .' "il rases are approved in< 'lark v. Beecher,

* Phippa v. Sedgwick, 95 U. S. 9: 154 U. S. 631.

§ l80 PERSONAL JUDGMENT AGAINST Will.

at law for the money as in this suit. And the liability of
the executors of the wife to this personal judgment must
depend on the same principle as if, abandoning the pursuit
of the res, the assignee had brought an action at law for
the money." The modifications in the law peculiar to the
relationship of husband and wife with reference to their
property are so many and important that it would In-
impracticable to attempt to formulate rules intended for
general application to the subject. These Supreme Court
cases certainly accomplish an unfortunate result, and prob-
ably will not be universally accepted, if, indeed, the princi-
ples they embody are not superseded in some States by the
removal of the disabilities incident to coverture. In Post
v. Stiger 1 it appeared that property had been conveyed to
a wife in fraud of the husband's creditors. The wife set
up as a defense the fact that she had disposed of it. The
court said that she must answer for its value. An attempt
was made to show that she had subsequently lost by bad
bargains all the property that she had acquired by the con-
veyance. The proofs did not seem to sustain this view.
but the court remarked that even if it had been so proved
this would not relieve her from liability, and continuing
said: "She held the property as trustee of her husband's
creditors, and dealt with it at her peril. A fraudulent
grantee cannot repel the claims of the creditors of the
grantor, by simply saying : ' I have lost, by imprudent bar-
gains or collusive foreclosures, the property I attempted to
conceal, and, therefore, I am answerable for nothing.'" It
may be urged that this case is a dictum on the point cited.
This is probably a legitimate criticism, for the court prac-
tically found that the wife still had the property; yet as an
expression of opinion of a highly intelligent court pointing,
as we claim, in the right direction, we regard the dictum
as worthy of adoption as an absolute authority.

1 29 N. J. Eq. 55S. See Lee v. Cole, 44 N. J. Eq. 318, m Ail. Rep. 531.

5 ;8 FORM OF JUDGMENT. § l8l

§ 181. Judgment must conform to relief demanded. — As a
aeneral rule, the judgment must harmonize with the

O JO

demand for relief,1 though, as we have seen under the
modern procedure, a mistake in the prayer is not fatal, and
equity may, in its discretion, award a judgment such as the
facts justify. In Curtis v. Fox,2 the plaintiff failed to
establish that the conveyance by the debtor to his wife
was fraudulent, and the complaint was consequently dis-
missed. It appeared that the wife died pending the action,
and the creditor contended that the debtor defendant
thereupon acquired a legal interest in her real estate, and
that, instead of dismissing the complaint, a judgment
should have been rendered providing for the sale of such
interest, and an application of the proceeds to the satis-
faction of the creditor's judgment. Cases like the Bank
of Utica v. The City of Utica,;J and Cumming v. The
Mayor of Brooklyn,4 were cited, in which it was held that
where both parties agree to submit the case to the juris-
diction of chancery, or the defendant omits to raise the
objection by plea or in his answer, the court will retain
jurisdiction and determine the case, although the plaintiff
may have an adequate remedy at law. But the court held
that the principle of these cases had no application to the
case of Curtis v. Fox above cited, because in that case Fox
had no legal interest in the land, and did not acquire any
until long after putting in his answer. The complaint did
not allege any such interest, but sought relief solely upon
the ground that the title of the wife was fraudulent
as against the plaintiff, and this was the matter litigated.
As the husband had no opportunity to raise the objection
that a sale on execution was the proper remedy of the
plaintiff, so far as the interest acquired upon the death of
his wife was concerned, his silence did not waive it.

1 Dumpliy v. Kleinsmith, 11 Wall. :i4 Paige (N. Y.) 399.
615. * 11 Paige (N. Y.) 596.

i; \. Y. 299.

§ [82 MUST ACCORD Willi COMPLAINT.

§ 182. Must accord with complaint.— It lias been held in
New York to be no ground of reversal of a judgment thai
the relief it extended was not prayed for in the complaint,
provided it was such a decree as the plaintiff was entitled
to upon the evidence.1 While the effect of an erroneous
prayer in a complaint can ordinarily be overcome, yet the
general rule is that the allegations of the complaint must
support the judgment. Thus, it was said by the Supreme
Court of California, that a judgment which was not sup-
ported by the pleadings was as fatally defective as one
which was not sustained by the verdict or finding. The
judgment must accord with and be warranted by the plead-
ings of the party in whose favor it was rendered. ~ This
may be true under the liberal interpretation of the statutes
regulating the reformed procedure, but it is unwise for a
complainant to place strong reliance upon such a rule of
practice. On the contrary, the bill should shadow forth the
case which the evidence is calculated to disclose, or the
variance may prove fatal. Thus, where the bill impeached
a deed, and prayed its avoidance upon allegations of actual
fraud, there is authority that, where the defendant is
brought into court to answer such a charge, and so effect-
ually repels it that the court would not be justified in
holding that the averment was proved, the complainant is
not at liberty to change his ground, and obtain other
relief, based upon proof of constructive fraud, or other
equities supposed to be established by the evidence.3
And, where a bill charges actual and intentional fraud.

1 Buswell v. Lincks, 8 Daly (N. 574. "If a bill charges fraud as a
Y.) 518. ground of relief, fraud must be proved.

2 Bachman v. Sepulveda, 39 Cal. The proof of other facts, though such
689; Bailey v. Eider, 10 N. Y. 363. as would be sufficient, under some
The plaintiff cannot support a re- circumstances, t<> constitute a claim
covery on a ground that be expressly for relief under another bead of
repudiates. McCarthy v. Scanlon, equity, will nol prevent the bill from
176 Pa. St. 262, 35 Atl.Rep. 189. being dismissed." See also Fisher v.

3 Clark v. Krause, 2 Mac-key (D. C.) B ly, 1 < nil. C. C. 206.

330 CONTRADICTORY VERDICTS — NEW TRIAL. §§ I S3, [83a

and the prayer for relief proceeds upon that theory, the
complainant cannot, under the prayer for general relief,
rely upon circumstances which make out a case for relief
under a distinct head of equity, although such circum-
stances substantially appear in the bill, but are charged
only in aid of the actual fraud alleged.1

Manifestly a court of equity may adapt its relief to the
exigencies of the case.3

§ 183. Contradictory verdicts. — In Love v. Geyer,3 which
was an action brought by a judgment-creditor of the
grantor, against the grantor and grantee, to avoid a fraudu-
lent conveyance, a general verdict was returned against
both defendants. A new trial was awarded to the grantor
and denied to the grantee, and the case was continued
without judgment. At a subsequent term the cause was
tried by the court as to the grantor, and a finding and
judgment rendered in his favor. The court, over the
objection of the grantee, rendered judgment against him,
upon the former verdict of the jury setting aside the con-
veyance as fraudulent. On review, the judgment was
very correctly held to be erroneous.4 Clearly, if no fraud
had been practiced by the grantor, it was an absurdity to
find that, as to the grantee, the conveyance was fraudu-
lent. Both parties must necessarily be implicated in the
fraud.

§ 183a. New trial. — The statutes granting statutory new
trials as matter of right are not applicable to suits brought
to annul fraudulent conveyances.5

1 Eyre v. Potter, 15 How. 42. See 346 ; also Hollingsworth v. Crawford,

§ 155. 60 lnd. 70.

Valentine v. Richardt, 126 N. Y. 5 See Somerville v. Donaldson, 26

272 ; Murtha v. Curley, 90 N. Y. 372 ; Minn. 75, 1 N. W. Rep. 808 ; Shumway

Van Rensselaer v. Van Rensselaer, v. Shumway, 1 Lans. (N. Y.) 474,

I!:; N. V. 208, 214, 21 N. E. Rep. 75. affi'd 42 N. Y. 143; Perry v. Ensley,

3 1 1 11.I. 12. 10 lnd. 378 ; Sedg. & Wail on Trial of

'See Romine \. Romine, 59 lnd. Title to Land, (2d ed.) § 595.

CHAPTER XII.

PROVISIONAL RELIEF — INJUNCTION — RE-
CEIVER — ARREST.

£ 184. Provisional relief.
185. Injunction, when allowed.
lS(i. When injunction refused.
187. Receiver in contests over real
property.

188. Receivers of various interests.

189. Title on death of receiver.

190. Removal and dismissal of re-

ceiver.

191. Arrest of defendant.

§ 184. Provisional relief. — In view of the class of debtors
and alleged purchasers against whom creditors are com-
pelled to litigate, it is perhaps needless to recall the great
importance of prompt and efficient provisional remedies
easily accessible to complainants. The defendants may
be contemplating flight, or may be engaged in wasting or
converting the property with a view of thwarting the
creditors' proceedings. The relief afforded by final decree
will perhaps come too late to be practically effectual.
In some instances an order of arrest may be procured
against the person of the debtor, or of his co-conspira-
tors ; in others an injunction may issue restraining any
misuse, incumbrance, or disposition of the property claimed
to have been covinously alienated; while in others a
receiver may be appointed to take possession and care of
the property pending the litigation.1 Indeed, the appoint,
ment of a receiver in a creditors' suit is said to be almost
a matter of course,3 though this broad proposition has
been denied.3 A receiver may even be appointed before

1 Ellett v. Newman, 92 N. C. 523. appoint a receiver, Shainwald v.

2Bloodgood v. Clark, 4 Paige (N. Lewis, 7 Sawy. 148.
Y.) 577 ; Fitzburgh v. Everingham, 6 Rodman r. Harvey, L02 N

Paige (N. Y.)29; Runals v. Hardin-, 8 S. E. hep- 888; Dollard v. Taylor,

83 111. 75 ; Shainwald v. Lewis, 6 Fed. 33 N. Y. Super. Ct. 196.
Rep. 770. See as to jurisdiction to

332 [NJUNCTK >\. § 185

answer filed in an urgent case,1 or before judgment,2 but
only when it is manifest that the fund is in danger of
being lost.3 Misconduct and insolvency of the defendant
enter into the merits of the application.4 The receiver-
ship will be denied when it does not distinctly appear that
there is any property to be preserved.0

£ 185. Injunction, when allowed. —As has been elsewhere
shown, the courts will not, ordinarily, interfere by injunc-
tion, or otherwise, at the instance of a contract-creditor,
to restrain the debtor's control over his business, or
any disposition of his property.6 Hyde v. Ellery7 is an
exception to the usual rule, additional to those heretofore
noticed.8 It appeared in that case that the debtor
had, by fraudulent means, purchased a large quantity of
goods from various merchants, upon credit, and had sold
the goods at auction so that it was practically impossible
to trace them. An injunction was allowed in favor of
simple contract creditors, upon the theory that its issuance
would prevent a multiplicity of suits, and furthermore,
because, as the relief sought was to set aside a transaction
entered into with the intention to defraud creditors, an
injunction was necessary as ancillary to that relief. In
another case which arose in Pennsylvania it was decided
that a fraudulent severance of fixtures, made with a design

1 Weis v. Goetter, 72 Ala. 259 ; Micou 5 First National Bank v. Gage, 79

\. Moses, 72 Ala 439. 111. 207.

2Co1hh v. Meyers, 42 Ga. 46. See 6 Uhl v. Dillon, 10 Md. 500 ; Mc-

Heyneman v. Dannenberg, 6 Cal. Goldrick v. Slevin, 43 Ind. 5:2:2 :

376; Field v. Holzmati, 93 Ind. 205; Dodge v. Pyrolueifce Manganese Co.,

Wblfev.Claflin,81Ga.64,6S.E. Rep. 69 Ga. 665; Johnson v. Farnum, 56

599; ortoi, v. Madden, 75 Ga. 83; Ga. 144; Adee v. Bigler, 81 X. Y.

Cogburn v. Pollock, 54 Miss. 639. 349; May v. Greenbill, 80 Ind. 124;

Rheinstein v. Bixby, 92 X. C. 307. Whitney v. Davis, 148 X. V. 250, 42

See W. Thorn v. Kalm. 93 Ala. 207,9 N. E. Rep. 661; Spelman v. Freed-

So. Rep. 729. man, 130 X. Y. 425, 29 N. E. Rep. 765.

*Werborn v. Kalm, 93 Ala. 207, 9 See § 52.

So. Rep. 729. 718 Md. 501.

»See ? 5:?.

§ I 85 [NJUNCTII IN. 5 5 j

to defeat the lien of a judgment, could be restrained in
equity.1 And an injunction has been issued in aid of an
attachment.3

In suits to annul fraudulent transfers relief by injunc-
tion is often indispensable. Thus, where the petition
alleged that an action was pending by plaintiff against one
of the defendants, in which certain real estate, which had
previously been fraudulently conveyed to another defend-
ant, was attached, and the defendants were about to dis-
pose of such real estate for the purpose of defeating
plaintiff's claim, it was decided that a temporary injunc-
tion restraining such sale was properly continued to the
final hearing, notwithstanding the filing of an answer deny-
ing all fraudulent intent.3 In a case in which the bill
charged that the defendant, who was a trustee under an
assignment for creditors, was a notoriously bad character,
and had refused to allow an inventory of the assigned
property to be made, and hence, if loss resulted, the cred-
itors would be unable to show the extent of it, the court
held that it was justified in granting an injunction and
appointing a receiver without notice.'1 Doubts as to the
good faith of an assignment and the solvency of the
assignee will justify an injunction against a sale."' And
where a suit was brought by creditors of a deceased
debtor to reach property fraudulently alienated by him
in his lifetime, it was decided that pending the suit the
court properly enjoined the defendant from incumbering
or conveying the land.'5 So an injunction may issue to
stay waste.7 So a defendant may be restrained pending

1 Winner's Appeal, 45 Pa. St. 455. 'Rosenberg v. Moore, 11 Md ::;>'•

Compare Gill v. Weston. 110 Pa. St. See Blondheim v. Moore, 11 Md

317, 1 Atl. Rep. 921. Preiss \ Cohen, 112 N. C 278, 17

-People, ex rel. CaufTman, v. Van S. E. Rep 520.

Buren, 136 N. Y. 252, ::\! X. E. Rep. ' Appeal of Fowler, 81 Pa St. M9

775, i Tessier v. Wyse, 3 Bland'e I !h.

3 Joseph v. McGill, 52 Iowa, 127. (Md. i 29.

334 WHEN INJUNCTION REFUSED. §§186,187

the hill from incumbering shares of stock sought to be
reached by a creditor.1 A chattel mortgagee may be
restrained from exercising his power of sale on a bill filed
to annul the mortgage.2 It may be observed that a
denial in the defendant's answer that he has any property
does not constitute a cause for dissolving an injunction
restraining him from assigning or disposing of his prop-
erty.3 And if creditors choose to permit the officers and
directors of an insolvent corporation to remain in posses-
sion and control of its assets, the mere fact of insolvency
will not operate as an injunction against any creditor
from obtaining a preference through legal process or by
agreement with the corporation.4

§186. When injunction refused. — An injunction will not
be issued unless facts are shown from which an issuance
appears to be a necessity in order to save the creditor's
rights, and to prevent the wasting of the subject-matter
of which he is in pursuit. Thus, in Portland Building
Association v. Creamer,5 it appeared that a creditor's
bill was was filed to set aside as fraudulent a conveyance
of lands about one-half of which was woodland. The
court held that an injunction which restrained the grantee
from cutting and removing the timber from the premises
would not be continued, it being shown that the value of
the land, without the timber, was ample to satisfy the
creditor's claim in case the conveyance should ultimately
be annulled.

.^187. Receiver in contests over real property. — Where
real property is fraudulently transferred, the court, as we
have seen, may adjudge and direct a transfer to a

1 MacKaye v. Soule, 25 N. Y. Supp. 3New v. Bame, 10 Paige (N.Y.) 502.

798. 1 Rickerson Rolling .Mill <'<>. v. Far-

■ Bennetl v. Wright, ;; linn (N. fell F. & M. Co., 13 U. S. App. 172.

V.i 331, 28 N. Y. Supp. I.-,:;. ;;| N. .). Eq. 107.

§ 1 87

REl EIVER.

335

receiver.1 Vause v. Woods2 is an illustration of the dis-
inclination of the court to interfere by the appointment
of a receiver of real property, where the party in posses-
sion has what purports to be the legal title. The <
came up on appeal from an order appointing a receiver
upon a creditor's bill to take possession of the property
alleged to have been conveyed in fraud of the plaintiff.
Simrall, J., said (p. 128) : " As against the legal title, the
interposition is with reluctance ; it will only be done in
case of fraud clearly proved, and danger to the property."''
Provisional relief is not encouraged in land cases, because
the subject-matter of contention is immovable, practically
indestructible, and, unlike personalty, cannot be spirited
away. l In New York a receiver will not be appointed
in ejectment before judgment.5 This practice has been
a subject of criticism.0 The rule is otherwise in an
equitable action to annul a conveyance of real prop-
erty, even though it is conceded that ejectment could
have been brought in the place of the equitable action ; '

1 Cole v. Tyler, 65 N. Y. 77 ; Mc-
Caffrey v. Hickey, 66 Barb. (N. Y.)
489, 492 ; Chautauque County Bank
v. Risley, 19 N. Y. 369 ; White's Bank
of Buffalo v. Farthing, 9 Civ Pro. (N.
Y.) 66, 101 N. Y. 344, 4 N. E. Rep.
734. See § 170.

2 46 Miss. 120.

3 Compare Lloyd v. Passingham, 16
Ves. Jr. 68 ; Mays v. Rose, Freem.
Ch. (Miss.) 718; Jones v. Pugh, 8
Ves. 71 ; Walker v. Denne, 2 Ves. Jr.
170 ; Mapes v. Scott, 4 111. App. 268 ;
Sedg. & Wait on Trial of Title to Land,
Chapter XXIII ; Rheinstein v. Bixhy,
92 N. C. 307 : Beach on Receivers,
§ 67.

4 Sedg. & Wait on Trial of Title.
§ 631.

5 Guernsey v. Powers, d Bun (N.
Y.) 78; Burdell v. Burdell, 54 Mow.

Pr. (N. Y.) 91 ; Thompson v.Sherrard,
85 Barb. (N. Y.) 593; Sedg. & Wad
on Trial of Title (2d ed.), ?' 615. In
La Ban v. Huetwohl, 60 Hun (N. Y.)
408, 15 N. Y. Supp. 491, the court
says: " The law will not take the prop-
erty of a defendant from him pending
an action for its recovery : and that
wise and salutary rule would be vio-
lated if a receiver could be appointed
to take the rents."

6 Sedg. & Wait on Trial of Title (2d
ed.), >?632.

i Mitchell v. Barnes, 22 Bun (N. Y.
194. See the dissenting opinion of
Learned, P. J., in this case. The suit
was instituted to annul a deed upon
the -round that the grantor was in
sane, and the conveyance was pro
cured by improper influences. The
same relief could have been procured

RECEIVERS OF VARIOUS INTERESTS.

§ 188

but even in such cases the relief is not easily se-
cured.1

£ 188. Receivers of various interests. — Receiverships are
ordinarily allowed only in clear cases.2 The receiver is
appointed for the benefit of all parties who may establish
rights in the case.3 The pendency of the proceeding
supersedes the right of the debtor to transfer his prop-
erty.4 On supplementary proceedings under the Wis-
consin Code to enforce a decree for alimony, the court
may appoint a receiver to take possession of the effects
of the defendant in the divorce proceedings ; the sheriff's
return of the execution is sufficient ground therefor, and
the receiver thus appointed may attack a fraudulent con-
veyance of the debtor's real estate made with intent to
defeat the decree for alimony.0 A receiver has been
appointed of crops growing on a plantation ;6 and in a
case where an annuity, which was charged upon real
property, was in arrear,7 and also of a living.8 That the

in ejectment. Van Deusen v. Sweet.
51 N. Y. 378. Hence, as a receiver
could not be had in ejectment, it was
argued, in this dissenting opinion,
that, by analogy, none should he
appointed in the suit in equity. The
majority of the court declined to
adopl this view. A i-eceiver is fre-
quently appointed in suits to foreclose
mortgages, when it appears that the
seen riiy is insufficient and the mort-
gagor is insolvent. See Haas v. Chi-
cago Building Society, 1 Am. Insolv.
Rep. 301 : Myers v. Estell, 48 Miss.
372; llyinan v. Kelly, 1 Nev. 179.
See [ns. Co. v. Stebbins, 8 Paige (N.
Y i 565 : Cheever v. Rutland & B. R.
R. Co., 39 Yi. 654 ; Brown v. Chase.
Walker's Ch. (Mich.) 43; Finch v.
Houghton, 1!) Wis. 150 : < 'allanan v.
Shaw. 19 Iowa. 183. Ami a receiver
may be had in an action to foreclose

a contract for the sale of land. Smith
v. Kelley, 31 Hun (N. Y.) 387.

1 McCool v. McNamara, 19 Abb N.
C. iX. V.)344.

2 Fox v. Curtis. 176 Pa. St. 52. 34
Atl. Rep. 952; Chicago & A. Oil &
Mining Co. v. U. S. Petroleum Co.,
57 Pa. St. 83.

3 First Nat. Bk. v. Barnum Wire &
Iron Works, 60 Mich. 199.27N.W. Rep.
567; Delany v. Mansfield, 1 Hogan
'Irish Rolls Ct.) 234; Hooper v. Win-
ston. 21 III. 353.

4 Journeay v. Brown, 26 N. J. Law,
111.

Marker v. Dayton. 2S Wis. 307.

" Micou v. Moses, 72 Ala. 1:59. See

llemlriv v. American F. L. Mortgage

Co., 95 Ala. 313, II So. Rep. 213.

Sankey v. O'Maley, 2 Moll. 491.

N Hawkins v. Gathercole, 31 Kng. L.

& Eq. 305 : Beach on Receivers, § 619.

§ 189, I90 TITLE OX DEATH OF I' I I I ! ', ER.

debtor is insolvent, the grantee a non-resident, and the
goods are being taken from the jurisdiction will warrant
a receiver.1 The allegation of insolvency is vital under
the reformed procedure, allowing a bill by a simple con-
tract creditor.'3 Where a decision is rendered setting
aside a sale of land, a receiver may be appointed to sell
and convey the property.5 A receiver was appointed
after judgment in New Jersey to receive rings and
jewelry, which were decreed not to be wearing apparel.1
So a receiver may be had of a stock exchange seat.6

§ 189. Title on death of receiver. — Where a receiver of
a debtor's property has been appointed, and the debtor
has executed the usual assignment of the property to him.
upon the death of the receiver the title to the property
vests in the court. The receiver's possession is the
court's possession, and he is merely its agent or repre-
sentative. The functions of the receiver continue after
the death of the appointee, and it is competent for the
court to appoint a successor to conduct and complete the
litigation, and in other respects fulfil the duties which
the first receiver left incomplete.0 Nor is it necessary
that the defendants in the suits should be given notice of
proceedings for the appointment of a successor to the
first receiver."

§ 190. Removal and dismissal of receiver. — I he removal
of a receiver is a matter resting in the sound discretion

•Heard v. Murray, 93 Ala. 127. 9 * Frazier v. Barnum, 19 X. J. Eq.

So. Rep. 514. 316.

8 Moritz v. Miller, 87 Ala. 331, 6 So. Habenich* v. Lissak, Ts ' !al. 351,

Rep. 269. 20 Par. Rep. 874.

3Shand v. Hanley, 71 X. Y. 319. 6 NicoU v. Boyd, 90 V Y. 519.

In Massachusetts a receiver will not A change in receivers either l»\

be appointed to collect choses in ac- resignation or removal does nol abate

tion due the debtor from persons re- the action. Begewisch v. Silver, 140

siding in another jurisdiction. Amy X. Y. 111. 35 N\ E. Rep. 658

v. Manning, 149 Mass. 487, 21 X. E. : NicoU v. Boyd, 90 X. Y. 519

Rep. 49:}. ~ also Ativ.-(M.nl. v. Day, 2 Madd

338 REMOVAL AND DISMISSAL OF RECEIVER. § I90

of the court.1 "The jurisdiction of a court of equity,"
says Mr. High,2 " which is exercised in the removal
of receivers, bears a striking resemblance to that which
is called into action upon the dissolution of an interlocu-
tory injunction, and in both cases the power to terminate
seems to Mow naturally and as a necessary sequence
from the power to create. And as an interlocutory
injunction is usually dissolved upon the coming in of
defendant's answer, denying under oath the allegations
of the bill,3 so in the case of a receivership, if the answer
under oath fully and satisfactorily denies the equities of
the bill, or the material allegations upon which the appoint-
ment was made, and these allegations are not sustained
by any testimony in the case, the order of appointment
will be reversed and the receiver removed." 4 It is said that
the high prerogative act of taking property out of the hands
of a party and putting it in pound ought not to be exercised
except to prevent manifest wrong imminently impending.
And when the court, upon the coming in of the answer,
discovers that the danger is not imminent, and that there
is no pressing necessity for the order, it may be revoked
or modified on such terms as the court thinks wise/' We
may here state that it is not a sufficient cause for remov-
ing a receiver of a judgment-debtor that he has employed
the debtor as an agent to assist in collecting the assets,
the receiver being solvent and the trust otherwise prop-

1 First Nat. B'k v. E. T. Bamum fern v. Butler, 18 N. J. Eq. 220 ; Park-
Wire & Iron Works, 60 Mich. 499, 27 inson v. Trousdale, 4 111. 367 ; Roberts
N. \V. Rep. 657. v. Anderson, 2 Johns. Ch. (N. Y.)202 ;

- High on Receivers, £ 826. Harris v. Sangston. 4 Md. Ch. Dec.

I Lting Hollister v. Barkley, 9 N. 394; Kaighn v. Fuller, 14 N. J. Eq.

II. 230; Armstrong v. Sanford, 7 419; Schoettier v. Schwarting, 17

.Minn. 19; Anderson \. Reed, 11 Iowa, Wis. 30.

177; Stevens v. Myers, 11 Iowa, 183; 4 Citing Voshell v. Hynson, 26 Md.

Taylor v. Dickinson, 15 Iowa, 483; 83 ; Drury v. Roberts, 2 Md. Ch. Dec.

Hatch v. Daniels, 5 N. J. Eq. 14; 157.

Washer v. Brown, 5 N. .1. Eq. 81 ; Suf- BCrawford v. Ross, 39 Ga. 49.

§ 191 ARREST OF DEFENDAN 1 .

erly executed.1 In many cases the debtor's knowle
of the business peculiarly qualifies him to render valu-
able services to the receiver. And the receiver should be
served with notice and a specification of the grounds upon
which the removal is sought.' It may also be observed
that where the order appointing- a receiver was fraudu-
lently procured, and was subsequently annulled, the
receiver will be required to account for the fund intact,
and will not be allowed any deductions.3

§ 191. Arrest of defendant.— In New York, to authorize
the arrest of a defendant in an action for alleged fraudu-
lent disposition of his property, actual intent to defraud
must be clearly established.4 Proof must be adduced of
an actual and guilty intent to defraud creditors. A mere
constructive fraud such as the law implies because an act
is done in violation of the statute or of the rights of the
creditors at common law, is not sufficient.5 Hence an
order of arrest against a partner who, with knowledge of
the insolvency of the firm, paid individual debts with firm
assets, was vacated.'5 Where there is no evidence of
guilty knowledge, the debtor should not be subjected to
arrest for acts of constructive fraud." The lex fori, as
we have seen,8 governs in cases involving the question of
the right of arrest.

1 Ross v. Bridge, 24 How. Pr.(N.Y.) S. 311, 11 S. C. Rep. 811; Wolf v.

163. Stix, 99 U. S. I ; Eennequin v. < Hews,

* Bruns v. Stewart Mfg. Co., 31 111 U. S. 670, 4 S. C. Rep. 576;

Hun (N. Y.)197 Upshur v. Briscoe, 138 O. S 865, 11

3 O'Mahoney v. Belmont, 37 N. Y. S. C. Rep. 313.

Super. Ct. 224. s Compare Wilson v. Robertson, 21

4Hoyt v. Godfrey, 88 N. Y. 669. N. Y. 587 ; Menagb v. Whitwell, 52

5 Sherill Roper Air Engine Co. v. N. Y. 146.

Harwood, 30 Hun (N. Y.) 11. Com- ' Sherill Roper Air Engine Co. v.

pare Neal v. Clark, 95 U. S. 704. Harwood 30 Bun (N. Y. ■ 11

Noble v. Hammond, 129 U. S. 65, 9 People v. Kelly, 35 Barb. (N 5 1 444.

S. C. Rep. 235 ; Ames v. Moir, 138 LI. 8See ? 64.

CHAPTER XIII.

REIMBURSEMENT AND SUBROGATION.

1 92. Actual and constructive fraud —

Security or reimbursement
of purchaser.

193. No reimbursement at law.

§ 194. Void in part void in toto.
195 Subrogation of purchaser to
creditors' lien.

" The law cares very little what a fraudulent party's loss may be, and exacts nothing forhis
sake." — Andrews, J., in Guckenheimer v. Angevine, 81 N. Y. 397.

§ 192. Actual and constructive fraud — Security or reim-
bursement of purchaser. —There is a plain and highly
important distinction to be found in the authorities
between actual and constructive fraud as affecting- the
question of repayment of the money actually advanced by
a purchaser. If the transaction is fraudulent in fact, or
tainted with moral fraud, it cannot stand even for the
purpose of reimbursement,1 or indemnity ;2 while if it is
only constructively fraudulent,3 it may be upheld in favor
of the vendee or purchaser to the extent of securing resti-
tution of the amount of the actual consideration given or
paid by him, and only the excess of the property after
such payment was made will be subjected to the creditor's
debt.4 When the grantee purchases without actual notice

Baldwin v. Short, 125 X. V. 559,
26 X E. Rep. «.»28.

Millington v. Hill, 47 Ark. 311 ;
Davia v. Leopold, 87N. V. 620; Shep-
herd v. Woodfolk, 10B. J. Lea(Tenn.)
598 : Alley v. Connell, ■) Bead (Tenn.)
582 ; Con. I,, v. Hall. 9'.' Hun (X. V.)
335, :'.T X. Y. Supp. Ill ; Thompson v.
Bickford, l9Minn 23 ; Ulen v. Berry,
50 Mo 90; Borland v. Walker, i Ala.
269 ; Loos v. Wilkinson, 118 N. V.
L90, 21 X. E. Rep. 392 ; W I v. Hunt.

38 Barb. (N. Y.) 302 ; Smith v. Wise,
132 N. Y. 172, 30 N. E. Rep. 229.

3 Lobstein v. Lehn, 20 111. App. 261.
See S. c. 120 111. 549, 12 N. E. Rep.
68 ; Loos v. Wilkinson, 113 N. Y. 491,
21 X. E. Rep. 392.

4 Wood v. Goffs Curator, 7 Bush
(Ky.) 63; Short v. Tinsley, 1 Met.
(Ky.) 398; Crawford v. Beard, 12
Ore. 458, 8 Pac. Rep. .737 ; Lobstein
v. Lehn, 120 111. 777 12 N.E. Rep. 68 ;
Cone v. Cross, 72 Md. 102, 19 Atl.

§192

A.CTUAL WD CONSTRUC l'I\ T. FRAUD.

341

of the fraud, but for a consideration which is so inadequate
that it would be inequitable to allow the deed to stand as
a conveyance, a court of equity may, upon appropriate
allegations and proof, give it effect as a security for the
consideration actually paid.1 And in cases of mere sus-
picious circumstances as to the adequacy of the consid-
eration and fairness of the transaction, the court will not
entirely annul the conveyance, but, on the contrary, will so
frame its judgment as to protect the purchaser to the
amount of the money advanced.2 Again, where strangers
to the fraud paid off valid incumbrances upon the property,
they are held entitled to be reimbursed, and to be pro-
vided for in the decree, before the complainant's claim is
satisfied.3 Where the bill in equity contains no offer to
restore the purchase-money, the court may extend the
relief conditional upon such repayment.4

The rule is laid down by Chancellor Kent in the great
and leading case of Boyd v. Dunlap,5 that a deed, fraudu-

Rep. 391. It is not necessary to offer
in the bill to repay the consideration ;
the court niay make such repayment
a condition for granting the relief.
Thomas v. Beals, 154 Mass. 51, 27 N.
E. Rep. 1004.

1 Van Wyck v. Baker, 16 Hun (N.
Y.) 171. See Clements v. Moore, 6
Wall. 312 ; McArthur v. Hoystradt, 11
Paige (N. Y.) 495; Hull v. Deering, 80
Md, 424, 31 Atl. Rep. 416. In Colgan
v. Jones,' 44 N. J. Eq. 274, 18 Atl.
Rep. 55, it appeared that a debtor
who had sustained personal injuries
assigned his claim for $330 to his
attorney, who recovered thereon a
judgment of $4,000. It was decided
that the assignment as to the excess
beyond a reasonable compensation to
the attorney for his services was void-
able as to the debtor's antecedent
creditors.

2 United States v. Griswold, 8 Fed.

Rep. 504, citing Boyd v. Dunlap. 1
Johns. Ch. (N. Y.) 478; Crockett v.
Pliinney, 33 Minn. L57, 32 X. W. Rep.
292. See Taylor v. Atwood, 47 Conn.
508 ; Oliver v. Moore, 26 Ohi< 1 St . 398 .
First Nat. Bank v. Bertschy, 52 Wis.
443, 9 N. W. Rep. 534 ; May on Fraud-
ulent Conveyances, p. 235. In Borden
v. Doughty, 42 N. J. Eq. 314, 3 Ml
Rep. 352, a wife was allowed to
recover for improvements made in
good faith where a deed to her was
set aside as being in effect voluntary
See Rucker v. Abell, 8 B. Mon. (Ky.
566; King v. Wilcox, II Paige X Y.
589.

b Swan v. Smith, 57 Miss. 548
Young v. Ward. 115 III. 264, 3 X. E
Rep. 512.

4 Thomas v. Beals, 151 Mass, 51 31
N. E. Rep. 1004.

1 Johns. Ch. (N. Y) 41

342 ACTUAL AND CONSTRUCTIVE FRAUD. § 192

lent in fact, will be declared absolutely void, and not permit-
ted to stand as a security for any reimbursement or indem-
nity, and this principle is upheld and followed in many
cases.1 Thus in Shand v. Hanley,3 the vendee was not
allowed to absorb the value of the premises in a claim for
improvements made after constructive notice to her of the
insecurity of her title, and of the equitable lien of the cred-
itor. In Briggs v. Merrill,8 Johnson, J., said: A party
bargaining with a debtor with fraudulent intent, " does it
at the peril of having that which he receives taken from
him by the creditors of the debtor whom he is attempting
to defraud, without having any remedy to recover what
he parts with in carrying out the bargain.4 The learned
judge adds : " The law will leave him in the snare his
own devices have laid." The court, in Stovall v.
Farmers' and Merchants' Bank,5 said that there was no
rule which gave a lien under a fraudulent contract.
Every person who enters into a fraudulent scheme for-
feits all right to protection at law or in equity. The law
does not so far countenance fraudulent contracts as to
protect the perpetrator to the extent of his investment.
This would be holding out inducements to engage in
schemes of fraud, as nothing could be lost by a failure
to effectuate the entire plan. Judge Spencer said he
presumed there was " no instance to be met with of any
reimbursement or indemnity afforded by a court of chan-

1 See Davis v. Leopold, 87 N. Y. Rep. 392; Baldwin v. Short, 54 Hun

620; Union Nat. Bank v. Warner, 12 (N. Y.) 473, 7 N. Y. Supp 717,affi'd 125

linn (N. Y.) 306; Wood v. Hunt, 38 N. Y. 553, 26 N. E. Rep. 928; Mande-

Barb. (N. Y.) 302 ; Briggs v. Merrill, ville v. Avery, 124 N. Y. 387, 26 N. E.

58 Barb. (N. Y.) 389; Alley v. Con- Rep. 951.

nell. 3 Head (Tenn.) 582 ; Shepherd v. 71 N. Y. 323.

Woodfolk, 10 B. J. Lea (Tenn.) 598; 3 58 Barb. (N. Y.) 389.

Millington v. Hill, 47 Ark. 311, 1 S. 4 Union Nat. Bk. v. Warner, 12

W. Rep. 547; Beidler v. Crane, 135 Hun (N. Y.) 306.

111. 92, 25 N. E. Rep. 655; Loos v. 16 Miss. 316.
Wilkinson, 113 N. Y. 490, 21 N. E.

§ 192 ACTUAL AND CONSTRUCTIVE FRAUD.

eery to a particeps criminis in a case of positive fraud."1
And Judge Story remarked, in Bean v. Smith :8 " I agree
to the doctrine laid down by Chancellor Kent in Boyd v.
Dunlap3 and Sands v. Codwise,4 that a deed fraudulent
in fact is absolutely void, and is not permitted to stand
as a security for any purpose of reimbursement or
indemnity; but it is otherwise with a deed obtained under
suspicious or inequitable circumstances, or which is only
constructively fraudulent."5 "The loss of the amount
paid by a fraudulent grantee is the penalty that the law
inflicts for the fraudulent transaction. To refund to
such a grantee the amount he has paid would be to
destroy the penalty." 6 But while the court will not pro-
tect the participant in a fraud, it will not hold him liable
beyond the actual interest which the debtor had in the
property. So, it was held, that where stock was fraudu-
lently transferred, which was hypothecated for a valid
debt, the grantee was to be held liable only for the sur-
plus remaining, not for the nominal amount of the stock.7
So disbursements for the benefit of the creditors will be
allowed.8 In Baldwin v. June,9 it was held that the
grantee was entitled to be credited with the value of the
property given in exchange for the property fraudulently
conveyed to him. The court cannot punish the fraudu-

1 Sands v. Codwise, 4 Johns. (N. court says: "The mortgage being
Y.) 598. Compare note to Lore v. void, all proceedings under it were
Dierkes, 16 Abb. N. C. (N. Y.) 47. void, and although he may posses- an

2 2 Mason, 296. honest claim, he cannot retain prop-

3 1 Johns. Ch. (N. Y.) 478 ; but see erty obtained by him under a fraudu-
Meigs v. Weller, 90 Mich. 629, 51 N. lent mortgage against a pursuing
W. Rep. 681. creditor." See Wcll> \. Langbein,

4 4 Johns. (N. Y.) 549. 20 Fed. Rep. 183.

5 See Henderson v. Hunton, 26 ' Hamilton Nat. Bank v. Balsted,
Gratt. (Va.) 935 ; Coiron v. Millaudon, 134 N. Y. 520, 31 N. E. Rep. '.mid.

19 How. 115; Brown v. Chubb, 135 8 Loos v. Wilkinson, 118 N. Y. 185,

N. Y. 174, 31 N. E. Rep. 1030. 21 N. E. Rep. 392.

6 See Seivers v. Dickover, 101 Ind. fl 68 Hun (N. Y | 284, 32 N. Y.
495, 498. In Mandeville v. Avery Supp. 852.

(124 N. Y. 387, 26 N. E. Rep. 951), the

344 ACTUAL AND CONSTRUCTIVE FRAUD. § 1 92

lent vendee by ordering judgment in excess of the value
of the interest transferred.1

It may be here observed that there seems to be author-
ity for the proposition that loss resulting from depreciation
may be apportioned between the debtor and the grantee,
according to the sums respectively invested,2 when the
conveyance is attacked by creditors. Thus in Shaeffer v.
Fithian,3 an insolvent purchased real estate for his wife
taking the title in her name, and advancing $2,460 of the
consideration, the wife paying the balance of $4,000.
The court ordered a sale of the property, and directed
that twenty-four-hundred-and-sixty sixty-four-hundred-and-
sixtieths of the proceeds of sale be applied in payment
of the complainant's debt. The court, after observing
that they could see no error in this decree to the preju-
dice of the wife, said : " She might well have been
regarded as the sole owner of the property, and the
quasi debtor of her husband. As such, she would be
bound to bear the whole loss arising from depreciation
of the property. The court below seems, however, to
have considered the husband's interest as a kind of result-
ing trust in the property, making him in equity a tenant
in common. This was certainly the most favorable view
in behalf of the wife that could have been taken of the
case. It results in saddling the loss arising from depre-
ciation pro rata upon both parties." In Karstorp's
Estate,4 the debtor and his wife had both contributed
toward the purchase of the property about to be sold,
and the relief extended to the husband's creditor was
limited to the amount contributed by the debtor toward
the purchase with interest. The Supreme Court of Mis-
souri say, in Alien v. Berry,5 that there is no principle

1 Hiiiiiiltoii Nat. Bk. v. Halsted, 3 26 Ohio St. 282.
i:,l N. Y. 520, 31 N. E. Hep. 900. « 158 Pa. St. 30, 27 Atl. Rep. 739.

Shaeffer v. Fithian, 26 Ohio St. 282. 6 50 Mo. 91.

§ 193 N0 REIMBURSEMENT AT LAW. 345

of equity which allows a fraudulent grantee to offset
against the value of the property the amount he may
have paid for it. "The fraud," observes Adams, [.,
" renders the deeds absolutely void as to creditors, and
the plaintiff, who was a creditor, and as such became the
purchaser, is entitled to recover the property and its
rents, etc., as though no such fraudulent deeds ever had
been made." Allowing the vendee to recover back the
money would be in effect repaying him the amount which
he expended in accomplishing the very thing which the
law prohibits and condemns. As it was a wrong in him
to obtain the title and the possession for a fraudulent
purpose, it must be equally wrong to refund to him the
price paid for it.1 But where a mortgagor conveyed to
the mortgagee in payment of the mortgage, and the con-
veyance was set aside, it was considered that the mort-
gage was in force as to the creditors.3 In part, the
theory of not allowing the fraudulent grantee any relief
for partial consideration or necessary outlay, as regards
the avoided transaction, is that the rights of creditors
would be impaired by such allowance. Creditors might
have seized the property intact but for the wrongful
alienation. But equity sometimes hesitates, and, in its
desire to do equity, evinces an inclination to allow the
alienee for any consideration or outlays which the cred-
itors could not have escaped paying.3

§ 193. No reimbursement at law. — While a court of
equity, in setting aside a deed of a purchaser upon
grounds other than those of positive fraud, annuls it

'McLean v. Letchford, 60 Miss. 520, 31 N. E. Rep. 900. Compare

183. Loos v. Wilkinson, 113 X. Y. 485, 31

2 Irish v. Clayes, 10 Vt. 81. N. E. Rep. 392 ; Stevens v. Brennan,

3 See Baldwin v. June, 68 Hun (N. 79 N. Y. 254; Clift v. Moses, 75 Bun
Y.) 286,22 N. Y. Supp. 852; Hamil- (N. Y.) 520, 27 N. Y. Supp.

ton Nat. Bk. v. Halsted, 134 N. Y. Clements v. Moore, 6 Wall. 312.

346

NO REIMBURSEMENT AT LAW.

T93

upon terms, and requires a return of the purchase-money,
or directs that the conveyance stand as a security for its
repayment, this principle has no place as applied to an
action at law. This constitutes one of the essential dif-
ferences already discussed1 between relief in equity and
the judgment extended by a court of law. The latter
court, as we have said, can hold no middle course. The
entire claim of each party must rest and be determined
at law upon the single point as to the validity of the
deed ; but it is the ordinary case in the former court to
decree that a deed not absolutely void, yet, under the
circumstances, inequitable as between the parties, may be
set aside upon terms.2

1 See Chapter III. S£ 51, 60 ; Foster
v. Foster, 56 Vt. 540.

- Coiron v. Millaudon, 19 How. 115.
See Clark v. Krause, 2 Mackey (D. C.)
574 ; Drury v. Cross, 7 Wall. 299 ;
Worthington v. Bullitt, 6 Md. 172.

Flexible jurisdiction of equity. — In
Clements v. Moore, 6 Wall. 312, a case
which we have frequently quoted and
cited, the court said : " A sale may be
void for bad faith, though the buyer
pays the full value of the property
bought. This is the consequence,
where his purpose is to aid the seller
in perpetrating a fraud upon his cred-
itors, and where he buys recklessly,
with guilty knowledge. When the
fact of fraud is established in a suit
;it law, the buyer loses the property
without reference to the amount or
application of what he has paid, and
he can have no relief either at law or
in equity. When the proceeding is
in chancery, the jurisdiction exercised
L8 more flexible and tolerant. The
equity appealed to, while it scans the
transaction with the severest scrutiny,
looks at all the facts, and giving to
each one its due weight, deals with
the subject before it according to its

own ideas of right and justice. In
some instances, it visits the buyer
with the same consequences which
would have followed in an action at
law. In others, it allows a security
to stand for the amount advanced
upon it. In others, it compels the
buyer to account only for the differ-
ence between the under price which
he paid and the value of the property.
In others, although he may have paid
the full value, and the property may
have passed beyond the reach of the
process of the court, it regards him as
a trustee, and charges him accord-
ingly. Where he has honestly ap-
plied the property to the liabilities of
the seller, it may hold him excused
from further responsibility. TJie car-
dinal principle in all such cases is,
thai Hi* property of the debtor shall
not be diverted from the payment of
his debts to the injury of his creditors.
by means of I In' fraud." See Tomp-
kins v. Sprout, 55 Cal. 36; Clif t v.
Moses, 75 Hun ( X. Y. | 520. A grantee
may be allowed for improvements.
King v. Wilcox, 11 Paige (N. Y.) 589 ;
see Sliand v. Hanley, 71 N. Y. 319,
and the amount of incumbrances

§ 194 VOID IN PART VOID IN TOTO.

§ 194. Void in part void in toto. — As a general rule, a
transaction void in part for any cause is entirely void.1
Russell v. Winne'~ is an illustration of our meaning. In
that case the question presented was whether a mortgage
which was fraudulent against creditors as to a part of
the property mortgaged, could be upheld as to the
residue. The court decided that as the mortgage was a
single instrument, given to secure one debt, to render it
valid it must have been given in good faith, for the
honest purpose of securing the debt, and without any
intent to hinder or defraud creditors. Grover, J., con-
tinuing, said: "This cannot be true when the object, in
part, or as to part of the property, is to defraud creditors.
This unlawful design vitiates the entire instrument. The
unlawful design of the parties cannot be confined to one
particular parcel of the property. Entire honesty and
good faith is necessary to render it valid ; and whenever
it indisputably appears that one object was to defraud
creditors to any extent, the entire instrument is, in judg-
ment of law, void."3 It is different where the instru-
ment is given to secure separate debts, some of which
are valid, and others fraudulent. In that case it will be
sustained as to the former.4 The rule, as we have seen,

satisfied by the vendee may be al- win v. Short. 125 X. Y. 553, 26 N. E.

lowed. Potter v. Gracie, 58 Ala. 303. Rep. 928.

So, when a conveyance is annulled, a - 37 N. Y. 591, 596. See Showman

mortgage in favor of a trust may be v. Lee, 86 Mich. 560, 49 N. W. Rep,

validated. First Nat. Bank v. Cum- 578.

mins, 39 N. J. Eq. 577. Compare $ Baldwin v. Short, 125 N. J

Murphy v. Briggs, 89 N Y. 446. 26 N. E. Rep. 928.

'National Bank v. Barkalow, 53 4 Rider v. Hunt, 6 Tex. Civ. *.pp

Kan. 68,35 Pac. Rep. 796; Bank v. 238,25 S. W. Hep- 314. See Morris

Brier, 95 Tenn. 331, 32 S. W. Rep. v. Lindauer, 4 C. C. A 163, VI Fed.

205; State v. Hope. 102 Mo. 410, 14 S. Rep. 23; Ruffner v. Welton Coal .V

W. Rep. 985 ; Brasher v. Jamison, 75 S. Co., 36 W. Va. 244, I ■"> S E.

Tex. 140, 12 S. W. Rep. 809; Roberts Rep. 48; Gordon v. Cannon, 18 Gratl

v. Vietor, 130 N. Y. 600, 29 N. E. Rep. (Va.) 423 ; Riggan v. Wolf, 58 \rk

1025 ; Hangen v. Hachemeister, 114 538, 14 S. W. Rep. 922 Teffl v. Stern,

N. Y. 570, 21 N. E. Rep. 1046 ; Bald- 73 Fed. Rep. 591.

348 SUBROGATION OF PURCHASER. § IQ5

applies only where there is actual fraud. In cases where
the fraud is constructive only, the court will uphold the
valid provisions of the instrument, if it can be done with-
out defeating the general intent.1

§ 195. Subrogation of purchaser to creditors' lien. — The
doctrine of subrogation is founded upon principles of
equity and benevolence, and it may be decreed where no
contract or privity of any kind exists between the parties.2
The rieht of subrogation is not founded on contract. It
is a creature of equity ; is enforced solely for the purpose
of accomplishing the ends of substantial justice ; and is
independent of any contractual relations between the par-
ties.3 In Lidderdale v. Robinson,4 Chief-Justice Mar-
shall said : " Where a person has paid money for which
others were responsible, the equitable claim which such
payment gives him on those who were so responsible, shall
be clothed with the legal garb with which the contract he
has discharged was invested, and he shall be substituted,
to every equitable intent and purpose, in the place of the
creditor whose claim he has discharged."5 It may be
noted that the party seeking subrogation must come into

1 Peters v. Bain, 133 U. S. 670, 10 the principal debtor has given to his

S. C. Rep. 354 ; Hayes v. Westcott, 91 surety, endorser or guaran tor any por-

Ala. 143. 8 So. Rep. 337 ; Cunning- tion of his estate as a protection

ham v. Norton, 125 U. S. 77, 8 S. C. against liability, and both become in-

Rep. 804 ; Muller v. Norton, 132 U. S. solvent, the creditor is entitled to be

501, 10 S. C. Rep. 147. subrogated to the rights of such

' Cottrell's Appeal, 23 Pa. St. 294. surety, guarantor or endorser, and

Compare Graff's Estate, 139 Pa. St. to claim directly, and not through

70, 21 Atl. Rep. 233 : Pease v. Egan, the representative of such surety,

L31 N. Y. 272, 30 N. E. Rep. 102. guarantor or endorser, tbe application

; Memphis, & L. R. R. v. Dow, to the discharge of his claim of all

120 U. S. 301, 7 S. C. Rep. 482; Pease such assets." Whittaker v. Amwell

v. Egan, 131 N. Y. 272, 30 N. E. Rep. Nat. Bank. 52 N. J. Eq. 418, 20 Atl.

102. See Gans v. Thieme, 93 N. Y. Rep. 203 ; New Bedford Inst, for Sav-

225. ings v. Fairhaven Bk., 9 Allen

* 2 Brock. 168. See Pease v. Egan, (Mass.) 175; Aldrich v. Blake, 134

131 N. Y. 272, 30 N. E. Rep. 102. Mass. 585.
"It is also safe to say that when

§ 195 SURROGATION OF PURCHASER. ;.,,,

court with clean hands.1 The court will not protect a
fraudulent party from loss.3 This doctrine of subrogation
is frequently invoked in cases where fraudulent convey-
ances are annulled. Thus, in Selleck v. Phelps,'3 it was
said that a person who acquired the title to property under
circumstances which enabled the creditors of the vendor
to avoid the sale, whether he be a purchaser or a volun-
tary grantee, would, after the payment of the claims of
attaching creditors, be subrogated to their rights so as to
enable him to hold the property against subsequent
attachments.4 Where goods were fraudulently conveyed,
but promptly seized by the creditors, and sold by them,
it was held that the fraudulent vendee should not be
charged a greater sum than was realized upon the sale,
and that he was entitled to a lien upon the proceeds of
sale for the amount of a bona fide debt paid by the debtor
out of the price given by the vendee.5 The right of sub-
rogation was recognized in Cole v. Malcolm.0 It appeared
that one Crawford conveyed real estate to his wife with
intent to defraud creditors Subsequently his wife died
intestate and her heirs assigned the property to the
defendant. One of Crawford's creditors then entered a
judgment against him, and subsequently secured a decree
setting: aside the convevance. The defendant then
tendered the judgment-creditor the amount due him and

1 Wilkinson v. Babbitt, 4 Dili. 207: 4 See Sheldonon Subrogation, . I".

Railroad Co. v. Soutter, 13 Wall. 517 ; Compare Acker v. White, 35 Wend.

Griffith v. Townley, 69 Mo. 13. The (N. Y.) 614 ; Tompkins v. Sprout, 55

doctrine of equitable subrogation will Cal. 31; Merrell v. Johnson. 96 111.

not be applied to relieve a party from 224.

a loss occasioned by his own unlaw- 5 Flash v. Wilkerson, 20 Fed. Rep.

ful act. Guckenheimer v. Angevine, 257. Compare note i>> Lore v. Dierkes,

81 N. Y. 394; Kley v. Healy, 127 N. 16 Abb. N. C. (N. Y.) 17.

Y. 561, 28 N. E. Rep. 593. 6 66 N. Y. 363 : overruling the court

" Guckenheimer v. Angevine, 81 below, 7 Hun (N. Y.) 31. See Pease ^

N. Y. 394; Masson v. Bovet, 1 Denio Egan, 131 N. Y. 262, ::<» N. E. Rep.

(N. Y.) 74. 102.

3 11 Wis. 380.

350 SUBROGATION OF PURCHASER. § I95

demanded an assignment of the judgment against Craw-
ford. The court held that, under such circumstances,
upon payment of the judgment, which he was obliged to
satisfy in order to save his land from sale, the principles
of justice and equity required that he should be subro-
gated to all the rights and securities of the judgment-
creditor, especially as the latter had, when his judgments
were paid, secured everything to which he was entitled.1
So then, again, the tendency of the court to prevent a
merger where injustice would result, has been applied to
cases of this character. Thus, in Crosby v. Taylor,2 it
appeared that a grantee of land held it by a deed which
was fraudulent as against the grantor's creditors. By a
subsequent deed the grantee secured from a prior mort-
gagee a deed of quitclaim of all the latter's interest in
the premises, containing this clause, "which said mort-
gage is hereby canceled and discharged." The court held
that the deed constituted an assignment of the mortgage,
and did not operate by way of merger of it as against the
grantor's creditors.

A fraudulent vendee may create a valid lien upon the
property in favor of a mortgagee in good faith.3

1 See Snelling v. Mclntyre, 6 Abb. N. J. Eq. 577; Munoz v. Wilson, 111

N. C. (N. Y.) 471. Compare Robin N. Y. 305, 18 N. E. Rep. 855; Royer

son v. Stewart, 10 N. Y. 190. Wheel Co. v. Frost, 13 Daly (N. Y.)

8 15 Gray (Mass.) 64. 233 ; Martin v. Bowen, 51 N. J. Eq.

Murphy v. Briggs, 89 N. Y. 446; 464, 26 Atl. Rep. 823.
First National Bank v. Cummins, 39

CHAPTER XIV.

INTENTION.

§196. What is intention? S 201. Of intention vsrhere considera-

197. Actual intent not decisive. tion is adequate.

198. Fraud of agent binding upon

principal.

199. Mutuality of participation in

fraudulent intent.

202. Intention to defraud subsequenl

creditors.

203. When question of intenl res

ad judicata.

200. Intent affecting voluntary alien- 1 204. Intent a question for the jury.
ations. 2Q~). Testifying as to intent.

206. Proving intent.

" The intent is seldom disclosed on the face of the transaction." — Andrews, Ch. J., in Beuerlitn
v. O'Leary, 149 N. Y. 38, 43 N. E. Rep. 417.

"The vital question is always the good faith of the transaction." Mr. Justice Swayne in
Lloyd v. Fulton, 91 U. S. 485.

" The mental emotion is inferred from the facts." - Finch, J., in Higgins v. Crouse, 147 X. Y
415, 42 N. E. Rep. 6.

" Where there is an actual intent to defraud, no form in which the transaction is put can shield
the property so transferred from the claims of creditors." — Chief Judge Ruger in Hillings v.
Russell, 101 N. Y. 226, 234.

§ 196. What is intention? — Further time cannot be
devoted to the discussion of the practical details of pro-
cedure in creditors' suits and proceedings. Let us n<
direct attention to a more complete consideration of the
general principles and theories of law which these various
remedies are devised to render effectual under the statute
of Elizabeth. The rules of evidence commonly invoked
in these proceedings which, as will appear, constitute a
most important branch of the subject, will then be noticed
in a very general way.

First, what is the fraudulent intent under the statute
of Elizabeth which must ordinarily exist, and be found
as a fact,1 to enable a creditor to defeat the debtor's
alienation?2 Sutherland, J., in Babcock v. Eckler,

1 Sickman v. Wilhelrn, 130 Ind. 481, See Knox v. Moses, 104 Cal. 502
29 N. E. Rep. 908. Pac. Eep. 318.

2 Harrnan v. Hoskins, 56 Miss. 142. ::2I N\ Y. 632. S. P., Snyder v.

Free, 114 Mo. 376, 21 8. W. Re]

352 WHAT IS INTENTION. § 196

case already cited, used these words: "Intent or inten-
tion is an emotion or operation of the mind, and can
usually be shown only by acts or declarations ; and, as
acts speak louder than words, if a party does an act which
must defraud another, his declaring that he did not by
the act intend to defraud is weighed down by the evi-
dence of his own act." 1 Fraud, it must be noted, does
not consist in mere intention, but in intention acted out,
or made effectual by hurtful acts,2 in conduct that operates
prejudicially upon the rights of others, and which was so
intended.3 A fraudulent purpose is an important ele-
ment in the case, but it is not the only essential requisite ;
there must be superadded to it, besides the sale or trans-
fer, actual fraud, hindrance, or delay resulting therefrom
to the creditors.4 While it may possibly be true that the
impressions, emotions, or operations of the mind are
never effaced, yet they can be reproduced only by the
person whose mind gave them birth. Their true nature
can only be determined or guessed at by other persons
from the color of the outward acts which the emotions
inspired ; from their nature, connection and effect.5

1 See Newman v. Cordell, 43 Barb. erty so transferred from the claims of

(N. Y.i 156; Monteith v. Bax, 4 Neb. creditors, even though a full and ade-

171 ; Snyder v. Free, 114 Mo. 361, 21 quate consideration be received for

S. W. Rep. 847; Booth v. Carstar- the same." Billings v. Russell, 101

phen, 107 X. ('. 395, 12 S. E. Rep. 375. N. Y. 226, 234, 4 N. E. Rep. 531. In

2See§ i:s. Learned, P. J., said in People v. Cook, 8 N. Y. 67, 79, Willard,

Billings v. Billings, 31 Hun (N. Y.) J. .said: "Fraud can never, in judi-

65, 69: "There must be not only the cial proceedings, be predicated of a

intent, but the intent must be so mere emotion of the mind, discon-

carried out thai some creditors are uected from an acl occasioning an

actually hindered, delayed, or de- injury to some one." See Masterton

frauded \ conveyance is v. Beers. 1 Sweeny (N. Y.) 419.

made with fraudulent intent (inly as ' Bunn v. Ahl, 29 Pa. St. 390. Com-

to those who are in fact defrauded." pare Smith v. Smith, 21 Pa. St. 370 ;

This case was reversed, and the court Worthy v. Brady, 91 N. * '. 269.

says: "Where there is an actual in- 4 Rice v. Perry, (51 Me. 150.

tent to defraud, no form in which the Booth v. Carstarphen, 107 N. 0.

transaction is put can shield the prop- 395, 12 S. E. Rep. 375.

§ 196 WHAT IS INTENTION. J53

Hence the court, as we have shown, will not be con-
cluded by the statement of the debtor's mental opera-
tions, for he is usually an interested party ; nor will it
accept his standard of morality as its test. In Potter v.
McDowell,1 this language is used : "When a voluntary
deed is made by a debtor in embarrassed circumstances,
and a question arises as to its validity, in order to ren-
der the deed fraudulent in law as to existing creditors, it
is not necessary to show that the debtor contemplated
a fraud in making it, or that it was an immoral or corrupt

act The law does not concern itself about

the private or secret motives which may influence the
debtor;" he may believe he had the right to make it, and
that it was his duty to do it, yet if the deed is voluntary,
and hinders and delays his creditors, it is fraudulent. It
may be observed here that a conveyance is fraudulent if
the grantor meant to hinder or defraud any of his cred-
itors, and a charge conveying the idea that he must have
meant to defraud all his creditors is misleading." Also
that it is not necessary to show that the fraudulent intent
constituted the sole purpose, but only that it constituted
a part of the purpose and design with which the scheme
was entered into ; if it is a part of the scheme to hinder
or delay creditors, the whole transaction is void.H "The
intent is the essential and poisonous element in the
transaction."4 The court will discriminate and frame
its decree accordingly. Hence a mortgage made to two
creditors may be sustained as to an innocent mortgagee

■31 Mo. G9. See White v. Mc- 2 Allen v. Kinyon, 41 Mich. 2

Pheeters, 75 Mo. 294. In Wartman v. 'Manning v. Reilly, 16 Weekly

Wartman, Taney's Dec. 370, Chief- Dig. (N. Y.) 230; Boll v. Creamer,

Justice Taney said : ,; As regards the 34 X. J. Eq. 181 ; Russell v. Winne,

question, whether a contempt has or 37 X. Y. 596, and cases cited ; Mead

has not been committed, it does not v. Combs, 19 X. ■). Eq. 112.

depend on the intention of the party, ' M 'e v. Hinnant, 89 N. C. 155,

but upon the act he has done." See 459; Worth} v. Brady, 91 X. C. 269;

Cartwright's Case, 114 Mass. 239. Hollister v. Loud, 2 Mich. 309.

23

354

ACTUAL INTENT NOT DECISIVE.

I97

and avoided as to a fraudulent mortgagee.1 It must be
borne in mind that an intent to hinder, delay, or defraud,
is sufficient to avoid the sale ;2 it is not essential to show
a union of these elements, though it must be conceded
that it is not always an easy task to distinguish between
an intent to hinder and an intent to delay.3 It is con-
sidered in Massachusetts that knowledge of the fraudu-
lent intent does not itself constitute participation in it.4
The statute against fraudulent conveyances is aimed at
the intent of the debtor, not the fraudulent intent of the
grantee practiced upon a debtor, to procure a convey-
ance by unfair means.5

§ 197. Actual intent not decisive. — The question of the
donor's actual intent is not then necessarily decisive.6
A man may give his property to his wife or children in
the belief that he has the right to do so, but if by so
doing his existing creditors are hindered or delayed, the

1 Riggan v. Wolf, 5:3 Ark. 537, 14
S. W. Rep. 922.

2 See § 11.

3 Rupe v. Alkire, 77 Mo. 642. See
Burgert v. Borchert, 59 Mo. 83. See
Weber v. Mick, 131 111. 520, 23 N. E.
Rep. 646.

4 Can- v. Briggs, 156 Mass. 80, 30
N. E. Rep. 470; Banfield v. Whipple
II Allen (Mass.) 13.

'Parker v. Roberts, 116 Mo. 657,
22 S. W. Rep. 914. In Morton v. Mor-
ris, 36 U. S. App. 55(), 560, the court
says : "The intent which actuates a
creditor in seeking to enforce a legal
claim or demand i- ordinarily of no
concern to the debtor, and is not a
matter for judicial inquiry ; t he debtor
1- only entitled to complain when
some acl is done <>r threatened by the
creditor which is in itself unlawful,
orisconl rary to equity. In the present
case, the acts charged in tit** answer
bhe basis foi relief consisted in a

demand made by the plaintiff for an
accounting and settlement when the
defendant was in embarrassed cir-
cumstances, and in a threat to enforce
such demand by a civil action. Neither
of these acts was unlawful, or so far
harsh, oppressive or unconscionable
as to vitiate the settlement subse-
quently made. Silliman v. United
States, 101 U. S. 465; Hackley v.
Headley, 45 Mich. 569 ; Snyder v.
Braden, 58Ind. 143 ; Dunham v. Gris-
wold, 100 N. Y. 224 ; Fuller v. Roberts,
35Fla. 110; McClairv. Wilson, 18 Col.
82; Farmer v. Walter, 2 Edw. Ch.
( X. Y.) 601 ; Skeate v. Beale, 11 Ad.
& El. 983; Wilcox v. Howland, 23
Pick. (Mass.) 167."

■; Haas v. Sternbach, 156 111. 54,
41 N. E. Rep. 51 ; Lawson v. Funk,
108 111. 502; Brisco v. Norris, 112 N.
C. 676, 16 S. E. Rep. 850; Marks v.
Bradley. 69 Miss. 1, 10 So. Rep. 922.

§ 197 ACTUAL INTEN r NO! DECISIVE.

transaction is wrongful, and the conveyance will be set
aside.1 In McKeown v. Allen,2 the court says: " Hie
defendants deny that their intention was to defraud, hin-
der or delay creditors, in the execution of the convey-
ance between them. Such hindrance and delay of the
complainant, however, has clearly been the result of the
conveyance. Where such has been the effect of the con-
veyance, the real motives of the parties thereto are
immaterial."3 In Briggs v. Mitchell, ' the court said:
"The property conveyed to the wife so far exceeds in
value the amount of the money which it was conveyed to
secure, it is of itself sufficient to authorize the holding
that the conveyance was fraudulent as against antecedent
creditors, without the finding of actual or meditat<<l
fraud." The inference of fraud may arise despite an
honest intent.5 In Lukins v. Aird,'1 Davis, J., said : " It
is not important to inquire whether, as matter of fact, the
defendants had a purpose to defraud the creditors of
Aird, for the fraud in this case is an inference of law, on
which the court is as much bound to pronounce the con-
veyance in question void as to creditors, as if the fraudu-
lent intent were directly proved." " An act innocent in
the intention may be so injurious in the consequences,
that the law declares it to be a fraud and forbids it."
An assignment which delays certain creditors is void.

'Winchester v. Charter, 97 Mass. s6 Wall. 79; Sukeforth v. Lord, 81

140; Potter v. McDowell, 31 Mo. 62 ; Cal. 400,25 Pac. Rep. 497; Wolf v.

Patten v. Casey, 57 Mo. 118 ; Marmot) Arthur, 118 N. < ' s'»s. -'I S. E, Rep.

v. Harwood, 124 111. 104, 16 N. E. 671.

Rep.236. See Chaps. V., VI. ' Kisterbock's Appeal, 51 P

2 37 Fla. 497, 20 So. Rep. 556. 485. Compare Lawson v. Funk

3 Citing Marmon v. Harwood. 124 111. 507; Personette v. Cronkbite, it"
111. 104, 16 N. E. Rep. 236. Ind. 586, l<> X. E. Rep th v.

4 60 Barb. (N. Y.) 316. Caxstarpben, in? N. C. 895, 12 -

5 Coleman v. Burr, 93 N. Y. 17: Rep. 375; Sutherland v. Bradner. 116
Roberts v. Vietor, 130 N. Y. 600, 29 N. Y. 410, 22 N. E. Rep. 554 ; Cou

N. E. Rep. 1025 ; Sutherland v. Brad- v. Morton. 132 N. V. 556, 8

ner, 116 N. Y. 410, 22 N. E. Rep. 554. Rep. 231.

356 FRAUD OF AGENT. § I98

though no fraud was intended by the assignor or
assignee.1 A different doctrine seems to be recognized
in Minnesota. An actual corrupt and dishonest design
or purpose seems to be required. ~ That the debtor
made the conveyance to avoid the plaintiff's claim
because he did not believe it to be just will not sustain
the transfer.3 This subject has already been discussed.4

§ 198. Fraud of agent binding upon principal. — Warner
v. Warren,5 establishes the principle that actual fraudu-
lent intent, sufficient to avoid a transfer, need not be
personal to the debtor. In this case a husband obtained
a power of attorney from his wife authorizing him to
transact business as her agent. By means of false state-
ments he established a fictitious credit for her, incurred
liabilites in her name, and then induced the wife to make
an assignment. The wife was a guileless, artless woman,
who took no part in the business, and intended to com-
mit no wrong, but was a mere passive instrument in the
hands of her husband, by whom the frauds were perpe-
trated. In avoiding the assignment, in favor of an
attaching-creditor, Grover, J., said that the husband's
" objects became hers ; his frauds were her frauds ; and
she is responsible therefor, however destitute of any
knowledge thereof." This case is a valuable precedent,
showing that intent may be established by implication or
substitution, and that mental operation or emotion is not
necessarily the test.0

1 Sutherland v. Bradner, 116 X. V. N. Y. Superior, 95; affi'd 62 N. Y.

no, 22 N. 1:. Rep. 554. See Chap. 535.

XXI * See § 8. In Trumbull v. Hewitt,

In re Shotwell, 43 Minn. 339, 15 <i~> Conn. 60, 31 Atl. Rep. 492, the doc-

N. W. Rep. 843. trine of Warner v. Warren, 46 N. Y.

Barrefl v. Nealon, 119 Pa. St. 171, 228, is applied to a case where a con-

1\! Atl. Rep. 861. veyance was made by the husband to

\ 9, !<). his wife for a valuable consideration,

Hi X. Y. 228 , Wicks v. Eatch, 38 and without knowledge or fraudulent

i99

PARTICIPATION l\ FRAUDULEN1 l\i

$57

Incidentally it may be noted that there must be clear
proof that the knowledge or notice was present in the
mind of the agent at the time of the transaction in ques-
tion in order to charge the principal.1

§ 199. Mutuality of participation in fraudulent intent.
Generally speaking, to render a conveyance fraudulent
and voidable as against creditors, there must have been
mutuality of participation in the fraudulent intent, on the
part of both the vendor and the purchaser."

intent on her part, on the ground that
the facts showed that, in the transac-
tion, the husband acted not merely as
gi-antor, but as agent for his wife,
and therefore his fraud was held to
be imputable to her. See also Smith
v. Water Commrs. of Norwich, 38
Conn. 208 ; O'Connell v. Kilpatrick,
64 Md. 130, *21 Atl. Rep. 98.

1 See Constant v. University of
Rochester, 111 N. Y. 604, 19 N. E.
Rep. 631 ; Hall v. Germain, 131 N. Y.
536, 30 N. E. Rep. 591 ; Slattery v.
Schwannecke, 118 N. Y. 543, 23 N. E.
Rep. 922 ; Denton v. Ontario County
Nat. Bank, 150 N. Y. 137, 44 N. E.
Rep. 781.

2 Curtis, v. Valiton, 3 Mont. 157;
Mehlhop v. Pettibone, 54 Wis. 652,
11 N. W. Rep. 553, 12 Id. 443 ; Hall
v. Arnold, 15 Barb. (N. Y.) 600 ; Wil-
son v. Prewett, 3 Woods 635 ; Hop-
kins v. Langton, 30 Wis. 379 ; Steele
v. Ward, 25 Iowa 535 ; Schroeder v.
Walsh, 120 111. 403, 11 N. E. Rep. 70 ;
Miller v. Bryan 3 Iowa 58 ; Chase v.
Walters, 28 Iowa 460 ; Kittredge v.
Sumner, 11 Pick. (Mass.) 50; McCor-
mick v. Hyatt, 33 Ind. 546 ; Cooke v.
Cooke, 43 Md. 522, 525; Fifield
v. Gaston, 12 Iowa 218 ; Preston v.
Turner, 36 Iowa 671 ; Drummond
v. Couse, 39 Iowa, 442 ; Kellogg v.
Aherin, 48 Iowa, 299 ; Rea v. Missouri.
17 Wall. 543 ; Demarest v. House, 91

Hun (N. Y.)29(), 36 X. Y. Supp. 291 :
Wolf v. Arthur, lis \. fj. 898, 24 S.
E. Rep. 671; Jackson v. Glaze, •". Okl.
143.41 Pac. Rep. 79; Schram v. Tay-
lor. 51 Kan 552,33 Pac. Rep. 315; Wil-
son v. Spear, OS Vt. 1 15, ::i Atl. Rep.
429; First Nat. Bk. v. Hamilton, 59
N. V. St. Rep. 331 ; Salmi v. Colum-
bia Fuel Co., '25 Ore. 1.".. Ml Pac. Rep.
692; Tolman v. War. I, 86 Me.
Atl. Rep. 1081 ; Stevens Lumber Co.
v. Kansas City Planing Mill Co.,
59 .Mo. App. :;?:!; Uberger v.
Whit.'. 117 Mo. 347, 23 S. W. Rep.
92; The State v. Mason, 112 Mo.
374, 20 S. W. Rep, 629 : Leach v.
Francis, 41 Vt. 670 ; Partelo v. Harris,
26 Conn. 480; Ewingv. Runkle, 20 III.
448 ; Violett v. Violett, 2 Dana K\.
323 ; Foster v. Hall, 12 Pick. (Mass.)
89; Byrne v. Becker, 42 Mo. 264;
Bancroft v. Blizzard, 13 Ohio 30;
Splawn v. Martin, 17 Ark. 146; Gov-
ernor v. Campbell, 17 Ala. 566 ; Run]
v. Phillips, 4.s X. V. L25 ; Jaeger v.
Kelley, 52 X , Y. 274 ; Clements v.
Moore, (i Wall. 312; Astor v. Wells,
1 Wheat, l1'1' i Howe Machine < !o. v.
Claybourn, 0 Fed. Rep. HI ; Pier-
son v. Slifer, .v.1 Mo. A.pp
Blumer v. Bennett, 11 N

X. W. Rep. 14; W Iruff \. Bowles,

nil \. C. L97, L0 s. E. Rep. 182

oinl Xai. Bank of Beloil v. Merrill,

SI Wis. 142, 50 X. W. Rep. 503 ;

358

PARTICIPATION IN FRAUDULENT INTENT.

I99

In discussing- this subject Chief-Justice Church used
these words : " Nor is the vendor's fraudulent intent suffi-
cient. The vendee must be also implicated." 1 So in
another case it is asserted that in order to set aside, as
fraudulent against creditors, a conveyance to one cred-
itor, he must have participated in or have been cognizant
of the grantor's unlawful motives when he accepted the

v. Garrison, 85 Iowa 447. 52 N. W.
Rep. 359 ; LePage v. Slade. 79 Tex.
473, 15 S. W. Rep. 496 ; Bannister v.
Phelps, 81 Wis. 256, 51 N. W. Rep.
417 ; Nadal v. Britton, 112 N. C. ISO,
16 S. E. Rep. 914.

No participation by infant in
fraudulent intent. — The creditor is
sometimes embarrassed or foiled by a
conveyance to some person not sni
juris, as for instance an infant. In
Hamilton v. Cone, 99 Mass. 478,
Gray, J., said : " The only case cited
for the tenant which requires special
consideration is that of Goodwin v.
Eubbard, 15 Mass. 210. But in that
case the person to whom the convey-
ance was made, as well as his subse-
quent grantee, the demandant, par-
ticipated in the fraudulent intent of
the debtor, who paid the purchase-
money ; and the decision by which
this court, having then no jurisdic-
tion in equity to redress fraud, held
that a grantee who participated in the
fraudulent intent could not maintain
a writ of entry against a creditor who
had taken the land on execution
against the fraudulent debtor, cannot
I"- extended to this case, tn which
tin- demandant at the time of the
conveyance to him was an infant of
less than a year old, and could not
participate in the fraud, and there
was do offer to show that the convey-
ance was without adequate considera-
tion." ( Siting Howe v. Bishop, :'. Met.
Mass.) 30; Clark v. Chamberlain, 13

Allen (Mass.) 257. See Mathes v.
Dobschuetz, 72 111. 438: Tenney v.
Evans, 14 N. H. 343; 40 Am. Dec.
194. See, also, § 26. In Matthews v.
Rice, 31 N. Y. 460, it is asserted that
the fact that the plaintiff was an in-
fant and purchased partly upon credit
from a firm in apparently straitened
pecuniary circumstances, did not ren-
der the sale void in law as against
creditors. The court said : "The in-
fancy of the plaintiff did not alter or
affect the transaction, save as a cir-
cumstance bearing upon the question
of fraud in fact. There is no legal
bar to the right of an infant to pur-
chase property either for cash or
upon credit ; and the vendor cannot
avoid or retract the sale, or question
its validity on the ground that the
vendee is an infant, much less can a
stranger impeach the sale on that
ground. In this, as in other cases of
a sale of chattels, its invalidity as to
creditors depends upon whether it
was made with intent to defraud
them." See Washband v, Washband,
27 Conn. 424 : ( larter v. Grimshaw, 49
N. H. 100.

■Jaeger v. Kelley, 52 ;N. Y. 275.
See Starin v. Kelly, 88 N. Y. 421 :
Grunsky v. Parlin, 110 Cal. 179, 42
Pac. Rep. 575 ; American Brewing
Co. v. McGruder (Ky.) 32 S. W. Rep.
603 ; Galle v. Tode, 148 N. Y. 270. 42
X E. Rep. 673 ; Flemington Nat. Bk.
v. Jones, 50 N. J. Eq. 249, 24 All
Rep. 928.

§199 PARTICIPATION !\ FRAUDULEN1 INTENT.

conveyance.1 In Prewit v. Wilson,8 Field, [., observed :
"When a deed is executed for a valuable and adequate
consideration, without knowledge by the grantee of any
fraudulent intent of the grantor, it will be upheld, how-
ever fraudulent his purpose. To vitiate the transfer in
such case, the grantee also must be chargeable with
knowledge of the intention of the grantor. :! It is held in
Dudley v. Danforth,4 by the New York Commission of
Appeals, that where a vendee purchased property solely
with a view of receiving payment of an honest debt, an
intent on the part of the debtor to hinder and defraud
creditors would not affect the vendee's title, although the
vendee had notice of the intent, provided he did not par-
ticipate in it.5 In such case the purchase is in reality a
preference of a creditor; an act allowed by law unless
actual participation in the fraud is shown. A distinction
should be made between conveyances made for a con-
sideration paid to the grantor at the time of the convey-
ance and those made in payment of a debt. In the
first case knowledge of the fraudulent intent on the part
of the grantor, and his purpose to deprive the creditors
of the consideration received should be enough to invali-
date the conveyance. In such cases the payment of a
consideration, knowing that the object of the sale is to

1 Roe v. Moore. 35 N. J. Eq. 526. See Curtis v. Leavitt, L5 X. Y. '•• In

2 103 U. S. 24. Graham v. Railroad Co., 102 '

3 Werner v. Zierfuss, 162 Pa. St. 161, Bradley, J., said: "We Bee no
365, 29 Atl. Rep. 737. reason whythe disposal by a corpora-

4 61 N. Y. 626. tion of any of its property should !»•
6 Knower v. Central Nat. Bank, questioned by subsequent creditors of

124 N. Y. 552, 27 N. E. Rep. 217; the corporation any more than a like

Harris v. Russell, 93 Ala. 59, 9 So. disposal by an individual of his prop

Rep. 541 ; Werner v. Zierfuss. 162 Pa. erty should be so. The same princi-

St. 360, 29 Atl. Rep. 737; Treusch v. pies of law applj to each." Morrow

Ottenburg 4 C. G. A. 629, 51 Fed. Shoe Mfg Co. v. New England Shoe

Rep. 867. ' Co., 60Fed. Rep. 341; rTollin

Rules' as to Corporations. -The field Coal, etc., Co., 150 tT. S

rules governing fraudulent transfers S. C. Rep. L27 I tole v. Millerton I

are also applicable to corporations. Co., 133 N. V. 164, 30 N E Rep

360 INTENT AFFECTING ALIENATIONS. § 200

facilitate the covering up of assets, is an actual participa-
tion. It is different in the second case. A creditor has
a right to have his debt paid, and by accepting such
payment he does not enable the grantor to defraud his
creditors, and mere knowledge of a fraudulent intent, in
which he does not participate, should not invalidate the
conveyance as to him.

S200. Intent affecting voluntary alienations. — The rule as
to intent in voluntary alienation, as we shall presently see,
necessarily differs from cases where a valuable consider-
ation ' is present. In the latter class of cases mutual
participation in the fraudulent design must, of course,
ordinarily be established. Where the alienation is volun-
tary the invalidity may, as already shown, be predicated of
the fraudulent intent of the vendor without regard to the
knowledge or motives of the vendee. In such cases the
vendee is, of course, cognizant of the fact that nothing
was paid for the property. The cases relating to this
branch of the inquiry are reviewed by the Supreme Court
of Maine in Laughton v. Harden,2 an important case
from which we have already quoted.3 Judge Story thus

1 See Chap. XV. ticipated in the fraud or not.' In that

- 68 Me. 213. See Tucker v. An- case, the contending party was a

drews, 13 Me. 124 ; Lee v. Figg, 37 creditor subsequent to the convey-

Cal. 328 ; Watson v. Riskamire, 45 ance. In Beecher v. Clark, 12 Blatchf.

Iowa 233; Stearns v. Gage, 79 N. Y. 256. ;i voluntary conveyance was set

102 ; Jackson v. Lewis, 34 S. C. 1; aside for the benefit of both prior and

Wilson v. Marion, 147 N. Y. 597, 42 subsequent creditors. Hunt, J., says :

X. K. Rep. 190 ; Jacobs v. Morrison. • I cannot assent to the proposition,

136 N. V. 105, 32 N. E. Rep. 552. that it is necessary that the grantee

See g§ 07, 98. should have known that the intent of

The cases as to intent - Voluntary t lie grantor was fraudulent, and that

conveyances. — The court, in Laughton she should have been an intentional

v. Earden, 68 Mo. 213, summarize the party to the fraud. The fact that a

m-isiis follows: "In Hitchcock v. wife received a voluntary conveyance

Kiely, 11 Conn. 611, it was decided of the same, in ignorance of these

that ' a voluntary conveyance, fraudu- facts (showing fraud in fact), will

hut in fact, will be set aside in favor not make the conveyance a valid one.'

of creditors, whether the grantee par- Savage v. Murphy, 8 Bosw. (N. Y.)

201

WHERE CONSIDERATION IS ADEQUATE.

states the rule borrowed from the civil law by both the
common law and the courts of chancery : " Hence, all
voluntary dispositions, made by debtors, upon the score of
liberality, were revocable, whether the donee knew of the
prejudice intended to the creditors or not." '

§201. Of intention where consideration is adequate. — The
rule that a voluntary conveyance of property by a debtor

75, contains a learned review by Hoff-
man, J., of the earlier decisions by
which subsequent purchasers and
creditors were permitted to quest inn
conveyances as being fraudulent
against them, and this proposition is
there laid down: 'Where a deed is
made to defraud creditors, by one at
the time in debt, and who subse-
quently continued to be indebted, it
is fraudulent and void, as to all such
subsequent as well as existing cred-
itors.' See also Carpenter v. Roe, 10
N. Y. 227. In Mohawk Bank v. At-
water, 2 Paige (N. Y.) 54, Chan-
cellor Walworth says : ' It is of no
consequence in this suit whether the
son knew of the extent of his father's
indebtedness or not. The grantee
without valuable consideration can-
not be protected, although he was not
privy to the fraud.' In Carter v.
Grimshaw, 49 N. H. 100, the intent of
minor children upon whom a settle-
ment was made was considered of no
consequence at all. Coolidge v. Mel-
vin, 42 N. H. 510, 534, sustains the
same view. In Savage v. Murphy, 34
N. Y. 508, the same idea is strongly
presented by the court. Among other
things said about the rights of subse-
quent creditors against a voluntary
deed, this is added: 'The indebted-
ness then existing was merely trans-
ferred, not paid, and the fraud is as
palpable as it would be if the debts
now unpaid were owing to the sa mi'
creditors who held them at the time
of the transfers.' In Clark v. Cham-

berlain, 13 Allen (Mass.) 251
Hoai\ J., remarks : ' Winn the pur-
pose of the grantor is shown to have
been actually fraudulent as in cred
itors, ii is sufficienl to prove thai the
.-ran tee takes without consideration,
without proving otherwise his par-
ticipation in the fraudulent intent.1
Lee v. Figg, 37 Cal. 328, concludes an
opinion thus : ' It (the allegation I
avers thai the com ej ance to ( >gden

was without consideration, and this is

sufficient to avoid it as to creditors of
Lee (the grantor), whether Ogden
was aware of the fraudulent purpose
of Lee and actively aided it or not.'
Lassiter v. Davis, 64 N. < '. 198, decides
thai 'a voluntary gift is void, if it
was the maker's intent to hinder, de-
lay or defraud creditors, whether the
party who takes the gifl participated
in the fraudulent intent or not.' In
Foley v. Bitter, 34 Md. 646, it was
held to the same effect, and it i> then'
said : ' The innocence of the trustee,
or of the creditors named in the deed,
will not save it (an assignment) from

condemnation under the statu! t

Elizabeth) it' fraudulent in fact on the
part of the grantor.' "
story's Eq. Jur. .
Spaulding v. Blythe, 73 [nd. 94
liland v. dunes. 1 II [nd. 662, 18 N E
Rep. 939 ; Trumbull v. Hewitt, 65
Conn. 73,31 Atl. Rep. 192; Bitchcock
v. Kiely, 41 Conn. 611 : McKenna \.
Crowley, 10 R, 1. 364, 17 All. R< p.
354, citing the text.

62 WHERE CONSIDERATION IS ADEQUATE. 8 201

may be annulled at the suit of creditors, where such con-
veyance leaves the debtor without the means to pay the
remaining creditors,1 seems to commend itself as being
both necessary and reasonable. The theory of the law is
sometimes said to be that the debtor's property consti-
tutes a fund upon which the creditors are supposed to
have relied in extending the credit,2 and to which they
are entitled to resort for payment of their claims, but this
has been termed an inaccurate use of language. The
technical qualities of a trust fund do not pertain to a
debtor's estate. The plainest dictates of common sense
and the simplest principles of justice require that any
depletion of a debtor's estate should not be permitted to
stand in favor of a voluntary alienee, in cases where cred-
itors remain unpaid. Chief-Justice Shaw said : "In a
voluntary absolute conveyance, the fact that no consider-
ation is paid is, of course, known to both parties. If the
grantor was in debt at the time, as such conveyance must
necessarily tend to defeat the rights of creditors, and as
all persons are presumed to contemplate and intend the
natural and probable consequences of their own acts, the
conclusion is irresistible that such conveyance was
intended to defeat creditors, and is therefore fraudulent." 3
A different question, however, is presented where full
pecuniary consideration has been paid by the purchaser.4
Can the transfer be nullified in .such cases, and if so, in
what instances, by what procedure and upon what theory?
The answer is that, generally speaking, a debtor's convey-
ance can be set aside where it is made with a mutual
fraudulent intent to hinder, delay . and defraud creditors,
and that adequacy of consideration will not save it.
In this class of cases " the question of intent becomes

1 McKeown v. Allen, 37Fla. 490,20 104. See First Nat. Bank v. Bertschy,

So. Rep. 556. 52 Wis. 443, 9 N. \V. Rep. 534.

See < lhap. II.. 4 Marmon v. Harwood, 124 111. 104.

Warden v. Babcock 2Met. (Mass.) I.G N. E. Rep. 230. See Chap. XV.

§ 201 WHERE CONSIDERATION IS ADEQUA l I .

prominently material."1 Lord Mansfield said, in dis-
charging a rule for a new trial in Cadogan v. Kennetl : -
" If the transaction be not bona fide, the circumstance of
its being done for a valuable consideration will not alone
take it out of the statute. I have known several cases
where persons have given a fair and full price for goods,
and where the possession was actually changed, yet, being
done for the purpose of defeating creditors, the transaction
has been held fraudulent, and therefore void." The
" several cases " of which this learned jurist had knowledge,
where conveyances founded upon adequate consideration
had been overturned by reason of the bad faith of the
participants, have grown to many thousands, and the prin-
ciple has become one of vital interest and paramount
importance to the parties concerned. That a conveyance,
whether it be of real or personal property, founded upon
adequate consideration, may be* vacated at the suit of
creditors for fraud, is established in an endless variety of
cases, a few only of which we consider it necessary to
cite.3 A mere volunteer from a fraudulent grantee is in no
better position.4 In Wadsworth v. Williams,3 Hoar. J.,

1 Bradley v. Ragsdale, 64 Ala. 559 ; the reach of his creditors, would be a

Scott v. Davis, 117 Ind. 232, 20 mala fide purchaser and entitled to no

N. E. Rep. 139 ; Plunkett v. Plunkett, protection as against creditors."

114 Ind. 484, 16 N. E. Rep. 612, 17 a 2 Cowp. 434.

Id. 562; Marmon v. Harwood, 124 'Brinks v. Heise, 84 Pa. St. 351 ,
111. 104, 16 N. E. Rep. 236. "A sale Ashmeadv. Hean, 13 Pa. St. 584 ;< os
of property, even for full value, in v. Miller. 54 Tex. 27 ; Stinson v. Haw-
order to hinder or delay creditors, kins, 13 Fed. Rep. 833; Eartshorn \.
both vendor and vendee knowing the Eames, 31 Me. 93 ; Holbird v. Ander-
fraudulent purpose, cannot be up- son, 5 T. R. 235 ; Pickstock v. Lyster,
held." Treat, J., in Stinson v. Haw- 3 M. &. S. 371 ; Covanhovan v. Bart,
kins, 4 McCrary 504. In Greenleve v. 21 Pa. St. 500 ; Grover v. Wakeman,

Blum, 59 Tex. 127, the court says : "A 11 Wend. (N. Y.) 192 ; Si v. Spen-

purchaser not a creditor who should cer, 77 Mo. 359; Collier v. Banna, 71

buy the property of a debtor, how- Md. 253, 17 Atl. Rep. L017.

ever adequate might be the consider- 4 Dexter v. Smith, 2 Mason

ation which he paid, with a knowledge Fed. Cases, 621 .

that^it was'the intention of the debtor 5 100 Mass. 130.
by the sale to put the property beyond

364 WHERE CONSIDERATION IS ADEQUATE. § 201

in delivering the opinion of the Supreme Court of Massa-
chusetts, said : " A conveyance made with an actual pur-
pose and intent to defraud creditors, present or future, is
not valid against them in favor of a grantee who partici-
pates in the fraudulent intention, although made for a full
consideration, and by a grantor in the possession of any
amount of property." The learned Chief-Justice Black
observed : " If a debtor, with the purpose to cheat his
creditors, converts his land into money, because money is
more easily shuffled out of sight than land, he, of course,
commits a gross fraud. If his object in making the sale
is known to the purchaser, and he nevertheless aids and
assists in executing it, his title is worthless, as against
creditors, though he may have paid a full price. But the
rule is different when property is taken for a debt One
creditor of a failing debtor is not bound to take care of
another. It cannot be said that one is defrauded by the
payment of another. In such cases, if the assets are not
large enough to pay all, somebody must suffer. It is a
race in which it is impossible for every one to be fore-
most.'" J It matters not what price was paid, or how early
after the sale possession was changed, or how notorious
the transaction was, if the vendor made the sale in order
to defraud his creditors, and the vendee purchased with
the design to aid him in the perpetration of the fraud,
the sale is no more valid or effectual against such creditors
than as if no consideration had passed.2 The right of a
debtor, even in failing circumstances, to prefer a creditor,3
or to sell and dispose of his property in good faith and
for value, to whomsoever he wishes, is generally unques-

1 Covanhovan v. Hart. 21 Pa. St. ' Bostwick v. Burnett, 74 N. Y.

500; Nichols v. Ellis, 98 Mo. 344, 319 ; Hauselt v. Vilmar, 2 Abb. N. C.

11 S. W. Eep. T41 ; Werner v. Zier- (N. Y.) 222 : Gray v. MrCallister, 50

fuss, L62 Pa. St. 866, 29 Atl. Rep. 737. Iowa 497.
Stone v. Spencer, 77 Mo. 359.

§ 201 WHERE CONSIDERATION IS ADEQ1 VII.

tioned in the courts.1 Thus the intention to defeat an
execution creditor will not render the sale fraudulent if it
was made for a valuable consideration, and is bona fide
and absolute.3 So a confession of judgment with intent
to give priority is valid.3 The transfers which we have
instanced as objectionable are those which are merely
colorable, or in which some secret right, benefit, favor, or
interest is reserved to the debtor, or some unusual incident
attends the transaction, stamping it as being out of the
ordinary course of business, and as having been contrived
to hinder, delay, or defraud creditors. Payment of the
consideration is often in such cases a part of the scheme
to more completely cover and conceal the fraud. Hence
it is said that it is not the consideration, but the intent
with which a conveyance is made, that makes it good or
bad as to creditors.4 Where such fraudulent intent is
proved, the fact that the debtor had property in another
State sufficient to pay his debt will not save the trans-
action.5

In Jones v. Simpson,6 it was said that where bad faith
in the vendor appeared, the burden was cast upon the
vendee to show consideration, and this being established
the creditors must assume the burden of attacking the
vendee's good faith. This seems to state the rule cor-
rectly, but general expressions to the effect that proof of

1 Hobbs v. Davis, 50 Ga. 214; Hall Beards v. Wheeler, I! Bun(N. Y.)
v. Arnold, 15 Barb. (N. Y.) 599. See 539 ; affi'd 76 N. V, 213. See Trier \ .
Chapter XXV. Herman. 115 X. V. Hi:!. 21 N. E. Rep.

2 Wood v. Dixie, 7 Q. B. 892; 1034: Holbird v. Anderson, 5 '1'. I:.
Storey v. Agnew, 2 111. App. 353 ; Wil- 235. See i 1 1 .

son v. Pearson, 20 111. 81 ; Francis v. ' Hunters v. Waite, 3 Gratt. \ a.

Rankin, 84 111. 169; Dudley v. Dan- 26; Lockhard v. Beckley, LOW. Va.

forth, 61 N. Y. 626 ; Dalglish v. Mc- 96.

Carthy, 19 Grant (Ont.) 578; Ninimo Barding v. Elliott, 91 Hun (N Y.)

v. Kuykendall, 85 111. 476 ; Ricbes v. 502, 36 N. Y. Supp. 648.
Evans, 9 C. & P. 640; Frazer v. ''116 U. S. 610, 6 S. C Re]

Thatcher, 49 Texas, 26; Clark v. Mor- See Bamberger v. Schoolfield, L60 Q.

rell, 21 U. C. Q. B. 600; Darvill v. S. 150, 16 S. C. Rep. 225.
Terry, 6 H. & N. 807.

366 INTENTION TO DEFRAUD. § 202

bad faith in the vendor throws the burden of establishing
both consideration and good faith upon the vendee are
frequently encountered in the authorities.

§ 202. Intention to defraud subsequent creditors. — We
have elsewhere seen that, generally speaking, a voluntary
alienation is, as to existing creditors, according to some
cases, presumptively fraudulent, but, as to subsequent
creditors, a fraudulent intent must be proved or estab-
lished.1 The element of contemplated future indebted-
ness or future schemes of fraud must be introduced.2
While a conveyance made to defraud a subsequent judg-
ment-creditor is within the statute,3 it seems to be laid
down in some of the cases that subsequent creditors can
only avail themselves of the fraud which is practiced
against them.4 In Simmons v. Ingram,5 the court said :
" To make a deed void as to subsequent creditors, there
must be proof of an intent to defraud them ; it is not
sufficient that there is an intent to defraud others whose
debts were in existence at the time." ° In Florence Sew-
ing Machine Company v. Zeigler,7 it was held that in
order to avoid a sale founded upon an adequate new con-
sideration— that is, not in payment of an antecedent
debt — on the alleged ground that it was made to hinder,
delay and defraud creditors, the creditor attacking the

'Rose v. Brown. 11 \V. Va. 134; 3 Hoffman v. Junk, 51 Wis. 614,8

Shand v. Hanley, 71 N. Y. 319-322; N. W. Rep. 493.

Burdick v. GK11.2 McCrary 1SS ; Flor- 4 Harlan v. Maglauglin, 90 Pa. St.
ence S. M. Co. v. Zeigler, 58 Ala. 221 ; 293 ; Snyder v. Christ, 39 Pa. St. 499 ;
Earlan v. Maglaughlin, 90 Pa. St. 293. Monroe v. Smith, 79 Pa. St. 459 ; Kim-
See Mullen v. Wilson, 44 Pa. St. 416; ble v. Smith, 95 Pa. St. 69; Haak's
Partridge v. Stokes, 66 Barb. < X. Y.) Appeal, 100 Pa. St. 62.
586; Berring v. Richards, 1 McCrary 60 .Miss. 898.

574 : City Nat. Bank v. Hamilton, 34 6 Citing Hilliard v. Cagle, 46 Miss.

X. .1. Eq. 160. See Chapters V, VI. 309; Prestidge v. Cooper, 54 Miss. 74.

96, Eorbach v. Hill, 112 U. Compare Teed v. Valentine, 65 N. Y.

S. Ill, 1 19 5 S. ( !. Rep. 81 : Hilton v. 474, and cases cited.

Morse 75Me. 258; Neubergerv. Keim, : 58 Ala. 224. See Kellar v. Tay-

184 N. Y. 85, 31 N. E. Rep. 268. lor, 90 Ala. 290, 7 So. Rep. 907.

§ 203 RES ADJ1 DI( ATA.

sale must show two things : first, that the vendor made
the sale with such intent, and second, that the purchaser
participated in such intent, or knew of its existence, or
had knowledge of some fact calculated to put him on
inquiry, and which, if followed up, would have led to the
discovery that the vendor's intent was fraudulent.1

§ 203. When question of intent res adjudicata. — In Stock-
well v. Silloway,2 the Supreme Court of Massachusetts
said : " To prove the intent of the defendant in making
the conveyances alleged to be fraudulent in the charges
filed by the plaintiff, it was competent to show other
fraudulent conveyances made about the same time, and as
a part of the same scheme of fraud. For this purpose
the plaintiff introduced the record of a judgment of the
Superior Court rendered in proceedings between the same
parties, under the provisions of the general statutes in
relation to poor debtors, adjudging the defendant guilty
of the charges therein alleged against him. The plaintiff
asked the court to rule that this judgment was conclusive
evidence that the conveyances set forth in the former
case as fraudulent, and upon which the defendant was
then convicted, were fraudulent as alleged. We are of
the opinion that the court erred in refusing this ruling.
When a fact has once been put in issue and determined
by a final judgment in the course of a judicial proceeding,
such judgment is conclusive evidence of the existence of
the fact in all controversies between the same parties in
which it is material. It is to be regarded as a fixed fact
between the parties for all purposes."1

1 Crawford v. Kirksey, 55 Ala. 282 ; B See Burlen v. Shannon, 99 Mass.

Montgomery v. Bayliss, 96 Ala. 344, 200, and cases cited ; Commonwealth

11 So. Rep. 198 ; Edwards v. Reid, 39 v. Evans, 101 Mass. 25 ; Dennis' I

Neb. 646, 58 N. W. Rep. 202. 110 Mass. 18.

2 113 Mass. 385.

[NTENT \ QUESTION FOR THE JURY.

204

< 204. Intent a question for the jury.— The question of
fraudulent intent is almost uniformly* one of fact,1 to be
submitted in certain cases to a jury," and it is regarded as
error for the court to interfere with the province of the
jury in this particular, unless,3 as we have seen,4 the fraud
is apparent on the face of the instrument from a legal con-
struction of it,r> and is so manifest that but one conclusion
can prevail. In determining the intent great latitude is
allowed." The rule as to submission to the jury is not
departed from even in strong and apparently conclusive
cases. If the jury err the verdict may be set aside.
Thus, in Vance v. Phillips,' it appeared that an insolvent
merchant sold his entire stock of goods to an infant, who
was also his clerk and brother-in-law, taking the infant's
note in payment, and then absconded. A verdict of a
jury, affirming the validity of the transaction, was
promptly set aside as contrary to evidence.8 Especially
will the verdict be overturned where it is apparent that
the jury must have misapprehended the evidence.9 By
statute in New York the question of fraudulent intent in

: Morgan v. Becker, Tl Cal. 543,16
Pac. Rep. 307 ; Mackellar v. Pills
bury, 18 Minn. 396, 51 N. W. Rep.
223; Billings v. Russell, 101 N. Y.
233, I N E. Rep, 531 ; Citizens' Bank
v. Bolen, 121 End. 301, 23 X. E. Rep.
1 16. In Indiana this is provided by
statute. See Sickman \. Wilhelm,
180 Lnd. 180, '.".I X. E. Rep. 908 i Per-
Bonette v. Cronkhite, 1 10 lnd. 586, W
X E. Rep. 59.

Weaver v. Owen . L6 < Oregon 304,
Weeksv. Hill. 88 Me.
\M & p. 778 . II- '.mii v. Com-
mercial Banking I !o., 10 Neb. 820, 59
X. W, Rep 698 ; Kaufer v. Walsh. 88
Wia. 63,59 X.W. Rep. 160; Grimes Dry
Co. v Shaffer, II Neb. 1 12, 59
X \v Rep. tii 1 i.i\ in - \ 1
Ml N E. Rep. ii<;.

3 Peck v. Grouse, 46 Barb. (N. Y.)
151; Monteith v. Bax, 4 Neb. 171;
Vance v. Phillips, 6 Hill (N. Y.) 433;
Eobbs v. Davis, 50 Ga. 214; Murray
v. Burtis, 15 Wend. (X. Y.) 214 : Syra-
cuse Chilled Plow Go. v. Wing, 85 N.
Y. 126 ; Van Bibber v. Matins, 52 Tex.
109 : Winchester v. Charter, 102 Mass.
272 : Peiser v. Peticolas, 50 Tex. 638.

1 See §§ 8, 9, 10.
Van Bibber v. Mathis, 52 Tex.
409.

' Winchester v. Charter, 102 Mass.
276.

6 Hill (N. Y.) 433.

8 See also Dotld v. McCraw, s .\rk.
83: Potter v Payne, 21 Conn. 362;
Marston v. Vultee, L2 .\hl». Pr. (N.
Y.) 143.

Edwards v. Currier, 43 Me. 474.

§ 204 INTENT A QUESTION FOR THE JURY. 369

these cases " shall be deemed a question of fact, and not
of law," * and it was strenuously claimed in behalf of the
vendee, in the widely known case of Coleman v. Burr,"
that there was no finding by the referee of a fraudulent
intent ; but that, on the contrary, he had found the whole
transaction to be fair and honest, and that, therefore, the
transaction should stand. The court say, however, that
the referee has " found facts from which the inference
of fraud is inevitable, and although he has characterized
the transactions as honest and fair, that does not make
them innocent, nor change their essential character in the
eye of the law. Mr. Burr [the debtor] must be deemed
to have intended the natural and inevitable consequences
of his acts, and that was to hinder, delay and defraud his
creditors." 3 This principle has already been discussed in
the opening chapter,4 but in view of the peculiar wording
of the New York statute, it is deemed important to give
the construction placed upon it by the court of final
resort.5 In Bulger v. Rosa,6 the court says : " The stat-
ute relating to fraudulent transfers and conveyances,
which declares that the question of fraudulent intent aris-
ing thereunder shall be deemed a question of fact, and
not of law,7 does not, as now interpreted, interfere with
the prerogative of the court to direct a verdict, provided
the fraudulent intent is conclusively established on the
face of the instrument of transfer, or by the uncontra-
dicted verbal evidence." 8

1 2 N. Y.R. S. 137, § 4. Williams, 24 N. Y. 359 : Babcock v.

2 93 N. Y. 31 ; Bulger v. Rosa, 119 Eckler, 24 N. Y. 623, 632.
N. Y. 459, 24 N. E. Rep. 853. See ' See §§ 9, 10.

Neisler v. Hai'ris, 115 Ind. 565, 18 N. ■' See, as to intent to violate usury

E. Rep. 39. statutes, Fiedler v. Damn, 50 X. Y.

3 Citing Bump on Fraud. Con v. (3d 438.

ed.) 22, 24, 272, 278; Cunningham v. " 119 N. V. 164, .* I N. E. Rep. 858.

Freeborn, 11 Wend. (N. Y.) 241 ; Ed- 7 2 R. S. 137, § 4.

gell v. Hart, 9 N. Y. 213; Ford v. "Citing Ed-ell \ •. i lar! . 9 N. Y 213;

Ford v. Williams, 24 X. Y. 359.

24

370 riFYING AS TO INTENT. § 205

§ 205. Testifying as to intent. — A party called as a wit-
ness may testify as to his intention in performing an act
where such intention becomes material.1 The purchaser
or vendee may, in answer to a question, testify directly
that he did not have any fraudulent intent, and that the
purchase was made by him in good faith. That it is
proper to put such a question to the purchaser was
directly decided in the case of Bedell v. Chase,3 though
the contrary seems to be held in Minnesota,3 and Ala-
bama.4 In Blaut v. Gabler,5 this question was asked :
•• Had anything transpired between Blaut and yourself —
conversation or otherwise — whereby you gave him to
understand, or whereby it was understood, that the trans-
action was for an improper purpose, or the purpose of
defrauding your creditors ? " The court decided that the
question was properly excluded upon the theory that it
did not call for a statement of the witness as to his intent
to defraud, but went far beyond this, and asked for a con-
clusion from what had transpired. The question was
characterized as being indefinite and complicated, and as
not coming within the rule which sanctions an inquiry as
to the intent of a party. As a general rule, it is proper
to allow the parties to testify concerning their intentions,6

'Graves v. Graves, 45 X. II. 323. 3 Hathaway v. Brown, 18 Minn.

Hale v. Taylor, 15 X. H. 406; Ml. See also Minis v. Carpenter, 4

Royce v. Gazan, 76 Ga. 79; Sedgwick Col. App. :J0, 34 Pac. Rep. 1011.

v. Tucker, 90 Ind. 281; Gardoni v. ' Hinds v. Keith, 5? Fed. Rep. 10,

W I ward, 44 Kan 758, 25 Pac. Rep. 6 C. C. A.. 231 ; McCormick v. Joseph,

r.i'.i. cf. Sweeney v. Conley, 71 Tex. 77 Ala 236; Richardson v. Stringfel-

548 9 8. W. Rep. 548 Bice v. Rogers, low, 100 Ala. 416, 14 So. Rep. 283.

52 Kan. 207, 34 Pac. Rep 796; Phifer 11 X. V. 465.

*in, 100 N.C. 59,6 S. E. Rep. 672; • Bedell v. Chase. 34 N. Y. 388;

Gentry r.Kelley, 19 Kan. 82, 30 Pac. Griffin v. Marquardt, 21 N. Y. 121;

Rep. 186; Seymour v. Wilson, 11 X. Snow v. Paine, 114 Mass. 520; Thacher

''■'■ Compare Cake > Pottsville v. Phinney, 7 Allen (Mass.) 146; Sey-

Bank, 116 564, 9 Atl Rep. 302 ; mour v. Wilson, 14 N. Y. 567. An ac-

Dillon v. Anderson, 13 N Y cused person may testify- as to his in-

3tarin \. Kelly, ~> tention in receiving a certain sum of

money. Peoplev. Baker,96N. V. 340.

206

PROVING INII \ 1 .

37 '

though this class of testimony is necessarily subjected to
close scrutiny. When the circumstances present conclu-
sive evidence of a fraudulent intent, no proof of innocent
motives, however strong, will overcome the presumption ;
but where the facts do not necessarily prove fraud, but only
tend to that conclusion, the evidence of the party who
made the conveyance, when he is so circumstanced as to
be a competent witness, should be received for what it
may be considered worth.1 It is believed, however, not
to be proper to allow a witness to testify concerning the
intent or motive of another person,2 even though he be
an agent and has full knowledge of the transaction.1

§206. Proving intent. — The intent must be gathered
from all the circumstances.4 In King v. Poole,5 the court

1 Seymour v. Wilson, 14 N. Y. 569,
570 ; s. P. Edwards v. Currier, 43 Me.
474 ; Forbes v. "Waller, 25 N. Y. 430 :
Wheelden v. Wilson. 44 Me. 1 ; Miner
v. Phillips, 42 111. 123.

2 See Hathaway v. Brown, 22 Minn.
216 ; Peake v. Stout, 8 Ala. 647. " It
is not competent for one person to
state the motives influencing the con-
duct of another.'" Riley v. Mayor, etc.
of N. Y., 96 N. Y. 337. And it was
said in the case last cited that : "Evi-
dence of a secret and undisclosed in-
tent, entertained by one party at the
time of the making of a contract,
either express or implied, is not ad-
missible to vary the legal presump-
tions arising from the acts and
conduct of the parties." Riley v.
Mayor, etc., of N. Y., 96 N. Y. 339.
See Talcott v. Hess, 31 Hun (N. Y. )
285. In Tooley v. Bacon, 70 N. Y.
37. the defense was that the properly
was placed in the intestate's hands
for the purpose of defrauding cred-
itors. Eaid, J. , said : " The plaintiff
could not be examined as a witness
' in regard to any personal transaction

or communication' between him and
Bacon. The placing of property in
the hands of Bacon was a personal
transaction with him. and the intent
with which it was dour accompanied
and characterized the transaction and
was an element thereof. A witness
examined as to such intent must,
within the meaning of the Code, be
held to be examined in regard to the
transaction. There is the same reason
for excluding the living party from
testifying as to the intent with which
a personal transaction with a deceased
party was performed, as for exclud-
ing him as a witness to any other
part of the transaction." See Hard
v. Ashley, u; X. V. 619, 33N. I'.. Rep
177.

3 Rindskopf v. Myers, 77 Wis.
049, 46 N. W. Rep. sis

4 Zimmer v. Miller, 64 Md. 896, I
Atl. Rep. 858; Ecker v. McAllister,
45 Md. 309; Lincoln Exec's v. Foster,
45 U. S. App. 623

'- 61 Ga. 874. See Kempner v.
Churchill, 8 Wall. 369.

572 PROVING INTENT. § 2C>6

said : " In investigating an alleged fraud, the relevancy
of a given fact does not depend upon its force, but upon
its bearing. Does it bear, either directly or indirectly,
with any weight whatever, on the main controversy or
any material part of it ? Not only is fraud subtle, but
that ingredient of a transaction which renders it fraud-
ulent in fact, namely, intention, is covered up in the
breast, hidden away in the heart. Outward manifesta-
tions of it may be slow in appearing, and when they do
appear, may be dim and indistinct. To interpret their
meaning, or the full meaning of any one of them, it may
be necessary to bring them together and contemplate
them all in one view. To do this, one has to be picked
up here, another there, and so on till the collection is
complete." * Great latitude is allowed.2 On an inquiry
as to the state of mind, sentiments, or disposition of a per-
son at a particular period, his declarations and conver-
sations are admissible.3 In concluding this chapter we
may recall to the reader's attention the rule promulgated
in some of the cases that, if a transaction is entered into
for the purpose of defrauding any creditor, it is voidable
at the suit of all creditors.4

Burdick v. Gill, 7 Fed. Rep. Riddell v. Munro, 49 Minn. 532, 52 N.

W. Rep. 141.

Winchester v. Charter, 102 Mass. 3 1 Greenleaf's Ev. §108; Tyler v.

Rea \. Missouri, L7 Wall. 542; Angevine, 15 Blatch. 537 : Baker v.

3V. Beeman~87 Mich. 481, 4!) Kelly, 41 Miss. 703.

N. W. Rep. 483 ; Gumberg v. Treusch, 'Allen v. Rundle, 50 Conn. 31.

l":: Mich. 544, 61 X. W. Rep. 872; See Warner v. Percy, 22 Vt. 155.

CHAPTER XV.

CONSIDERATION.

§ 207. Concerning consideration and I £ 215. Moral obligations

good faith.

208. Voluntary conveyances.

209. What is a valuable considera-

tion ?

210. Love and affection.

211. Transfer for grantor's benefit.
211a. Exchange of property.

212. Ante-nuptial settlement — Mar-

riage as consideration.

213. Illicit intercourse.

214. Illegal consideration.

216. Individual and copartnership

debts.

217. Future advances.
217a. Gifts to charity.

218. Services by members of a family.

219. Proof of consideration.

220. Recitals of consideration as evi-

dence.

221. Explaining recitals.

222. Sufficient consideration.

223. Insufficient consideration.

"Almost invariably some honest consideration is made the agency for floating a scheme of
fraud against creditors." Finch, J., in Baldwin v. Short, 125 N. V. 553, 560, 26 N. E. Rep. 928.

§ 207. Concerning- consideration and good faith — Consid-
eration has been said to consist "either in some right, in-
terest, profit, or benefit accruing to the one party, or some
forbearance, detriment, loss, or responsibility, given, suf-
fered, or undertaken by the other." ' It is not essential
that the payment of the consideration be in money ; it
may be made in anything of value.3 The subject cannot
be here considered from an elementary point of view in all
its ramifications, but some of its general bearings upon
our particular topic will be briefly noticed. It will be
found upon investigation that, generally speaking, the
question of consideration becomes important in the class
of litigation under discussion only in bona fide transac-
tions. If the alienation is effected with a mutual design
to hinder, delay or defraud creditors, the presence of even
the most bounteous or adequate consideration 3 will not

1 Currie v. Misa, L R. 10 Exch. 162. a Billings v. Russell, 101 X. V. 882,

•-' Taylor v. Miles, 19 Ore. 550, 553, 4 N. E. Rep. 531,
25 Pac. Rep. 143.

574

CONSIDERATION AM) GOOD FAITH.

§207

save or cure it.1 Thus a mortgage though given for a
just debt may be assailed as fraudulent.2 Unilateral evil
intent will not, of course, suffice to overturn the transac-
tion.3 "Mala fides" says Mr. May, "supersedes all
inquiry into the consideration, but bona fides alone is not
always sufficient to support a transaction not founded on
any valuable consideration."4 The inadequacy of the
consideration, as is elsewhere shown, is not a matter which
the court will go into, except in so far as it may con-
stitute evidence tending to show that the transaction was
a sham:"' and the law will not "weigh consideration in
diamond scales."' Though grossly inadequate consider-
ation will render a conveyance fraudulent,7 the avoidance
maybe only to the extent ot the inadequacy.8 Generally
speaking, as we have already seen, the question whether
a conveyance is fraudulent or not depends upon its being

See Chap. XIV. Billings v. Rus-
sell. 10. N. Y. 282, 4 N. E. Rep.
531; Boyd v. Turpin, 94 X. < '. 137 ;
Landauer v. Mack, 43 Neb. 430,
ill N. W. Rep. 597: Gillespie v.
Allen, 37 \Y. Va. <;:.->, 1? S. E. Rep.
1 v 1 ( Sable v. ( iolumbus t ligar ( !o .
IK) ln.i. 563, 566, 38 N. E. Rep. 174.
citing the text. In Bradley v. Rags-
dale, <;i Ala. 559, ilii' court says: "If
tin' conveyance !>•• upon a valuable
consideration, then tin- question of
intent becomes pn iniinentrj material.
The consideration may lie paid in
nn.ij.v —may \»- valuable ami fully
adequate, 3 el it il was made ' with
intent i>> binder, delay, or defraud
creditors, purchasers or other per-
sons, of their law lu I ^niis, damages,
forfeitures, debts, or demands,' it is
void and stands for nothing." Citing
Codeol 1876, .: 2124 . Planters' & M.
Bank \. Borland, 5 Ala 581 ; < !um-
\. Met lullough, •"> Ala :;■.') :

Hubbard v. Allen, 5!) Ala. 283;
Howell v. Mitchell, in manuscript.

- Billings v. Russc-ll, 101 N. Y. -233.
1 X. E. Rep. 531; Syracuse Chilled
l'h.w Co. v. Win-. 85 X. Y. 421, 42G ;
Schmidt v. Opie, 33 X. J. Eq. 141 :
Blennerhassett v. Sherman, 105 U.
S. 117.

; Prewit v. Wilson, 103 U. S. 24 ;
Wood v. Stark. 1 Hawaiian Rep. 10;
Herring v. Wickham, 29 Graft. (Va 1
628 See chap. XIV.

' .May on Fraud. Conveyances, p. 23:5.

6 Per Sir W. M.James, in Bayspoole
v. Collins. IS W. R. 730.

1 Per Lord Talbot, as quoted bj
Wilmot. ('. J., in Roe v. Mitton, 2
\\'il>. 858 n

'Singree v. Welch, 32 Ohio St. 320;
Cable \. Columbus cigar Co., 140
[nd. 568, 568, 38 X. E Rep. 474. See
[looker v. Rooker, •.".» Ohio St. 1.

■ Jamison v. McNally, 21 OhioSi ',".'■">
See Black v. Kuhlman, 30 Ohio St. 196.

§ 208 VOLUNTARY CONVEYANi J75

made upon good consideration and bona fide. It is not
sufficient that it be upon good consideration or bona fide;
it must be both.1 The separation of these elements is
fatal to the transaction as against creditors.'- This rule is
concisely stated in a case of much importance in the
United States Supreme Court. " It is not enough," says
Woods, J., " in order to support a settlement against cred-
itors, that it be made for a valuable consideration. It
must be also bona fide. If it be made with intent to hin-
der, delay, or defraud them, it is void as against them,
although there may be in the strictest sense a valuable or
even an adequate consideration," 3 unless at least the
creditor has obtained the benefit of the consideration.4
" Forms," said Elliott, J., in a well considered case, "are
of little moment, for where fraud appears courts will drive
through all matters of form and expose and punish the
corrupt act. A conveyance is not protected, although
full consideration is paid, where grantor and grantee
unite in a fraudulent design to defraud creditors."5 The
vendee will be protected only to the extent of the consid-
eration parted with before notice of the fraud.6

§ 208. Voluntary conveyances. — It is perhaps unneces-
sary to observe that a voluntary conveyance "implies the

1 Sayre v. Fredericks, 16 N. J. Eq. Bunn v. Ahl, 29 Pa. St. 387 ; Root v.

209; Schmidt v. Opie, 33 N. J. Eq. Reynolds, 32 Vt. 139 ; Kempner v.

141; Billings v. Russell. 101 N. Y. Churchill, 8 Wall. 362; Kerr on Fraud

232, 4 N. E. Rep. 531, citing the & Mistake, p. 200 ; Davis v. Schwartz,

text. 1. 55 U. S. 639, 15 S. C. Rep. 2

- See § 15. 4 Davis v. Schwartz, 155 D". S. 689.

3 Btennerhassett v. Sherman, 105 U. 15 S. C. Rep. 237.

S. 117. SeeTwyne's Case, 3 Rep. 80, 5 Buck v. Voreis, 89 [nd. 117 : Bil-

2 Coke 212; Holmes v. Penney, 3 lings v. Russell, 101 N. Y. 226, I X.

Kay & J. 90 ; Gragg v. Martin, 12 E. Rep. 531. See Baldwin v. Short, 125

Allen (Mass.) 498 ; Brady v. Briscoe, N. Y. 559, 26 N. E. Rep. 928.

2 J.J. Mar. (Ky.) 212; Bozman v. 6 Hedrick v. Strauss, 42 Neb. 192,

Draughan, 3 Stew. (Ala.) 243 ; Farm- 60 N. W. Hep. 928; Bush \. Collins,

ers'Bankv. Douglass, 19 Miss. 469; 35 Kan. 535, 11 Par. Rep. 425.

Ij6 VOLUNTARY CONVEYANCES. § 208

total want of a substantial consideration," ] or " is a deed
without any valuable consideration." ~ Such a transfer
is more easily susceptible to attack than a conveyance
founded upon an adequate consideration ; for a transfer
by a debtor without consideration, made for the purpose
of defrauding his creditors, can be impeached by the
creditors for fraud, even though the grantee was ignorant
of the fraudulent purpose for which the covinous convey-
ance was given.3 The onus of establishing a fraudulent
intent is not so great. In Lee v. Figg 4 the court observed
that whether the voluntary alienee participated in and
aided the covinous intent or not was immaterial ; u he was
not a purchaser in good faith. " The distinction may be
restated as follows : A voluntary gift or settlement is
voidable if it was the intent of the maker to hinder, delay,
or defraud creditors, whether the party who received the
gift participated in the fraudulent intent or not ; an abso-
lute conveyance for a valuable consideration is good,
notwithstanding the intent of the maker to defraud,
unless the other party participated in the fraud.5 We
have elsewhere shown that, in the majority of the cases,
a voluntary alienation is regarded as presumptively fraudu-
lent as to existing creditors,'1 while in other cases this
presumption is conclusive.7 Where, however, a corpo-
ration, or individual, perfectly solvent at the time, and
having no actual intent to defraud creditors, disposes of
lands or property for an inadequate consideration, or by

'Washband v. Washband, 27 Conn. *37Cal. 336.

181. Lassiter v. Davis, 64 N. C. 498.

•Seward v. Jackson, 8 Cow. (N. Y ''Lloyd v. Fulton, 91 U. S. 485;

180. Holden v. Burnham, 63 N. Y. 74;

'Lee n Cal. 828; Beecher Dunlap v. Hawkins, 59 N. Y. 342;

v. <'lark. 12 Blatchf. 256; Laughton v. Dminebaum v. Tinslev. 54 Tex. 365.

Harden, 68 Me. 318;Mohawk Bank v. 'City Nat. Bank v. Hamilton. 34 N.

Uwater, .1 Bitchcock J. Eq. 160. Compare McCanless v.

■■. Kielj . 11 Conn. 611; ( larterv. Grim- Flinchurn, 89 N. C. 373.
19 V II loo. s..,. Chap. XIV.

§ 20Q VALUABLE CONSIDERATION. ^jy

a voluntary conveyance, subsequent creditors of the cor-
poration cannot question the transaction.1 If, as we have
seen, it was made with the design to defraud subsequent
creditors, this will render it fraudulent. It must be
remembered, however, that in New York the question of
fraudulent intent is in all cases to be deemed a question
of fact, and not of law, and it is declared that no convey-
ance or charge shall be adjudged fraudulent as against
creditors or purchasers solely on the ground that it was
not founded on a valuable consideration.2 It is not
per se void even as to existing creditors,3 and the burden
of proof that the deed left the debtor insolvent is on the
plaintiff.4 In California the New York rule prevails, and
a voluntary conveyance is not presumptively fraudulent
even as against existing creditors.5

§ 209. What is a valuable consideration? — Much has been
said concerning the true import of the expression " a valu-
able consideration." It may be other than the actual
payment of money, and may consist of acts to be done
after the conveyance,0 or of a note on promise to pay,7
or of a pre-existing debt,8 or of an assumption of lia-
bility.9 A moneyed consideration for an assignment
of goods greatly disproportionate to the value of the
property transferred, would not take a conveyance out

1 Graham v. Railroad Company, 102 N. E. Rep. 105. See also Phelps v.
U. S. 148; Rudy v. Austin, 56 Ark. Smith, 116 Ind. 387, 17 N. E. Rep. 602,
73, 19 S. W. Rep. 111. 19 Id. 156.

2 Babcock v. Eckler, 24 N. Y. 629 : 5 Windhus v. Boot/., 92 Cal. 617,
Dunlap v. Hawkins, 59 N. Y. 345 ; 28 Pac. Rep. 557 : Bull v.« Bray. 89
Dygert v. Remerschnider, 32 N. Y. Cal. 286, 26 Pac. Rep. 873.

629. Compare Coleman v. Burr, 93 6 Stanley v. Schwalby, 162 U. S. 376,

N. Y. 31; Genesee River Nat. Bank v. 16 S. C Rep. 754.

Mead, 92 N. Y. 637; Emmerich v. ' Weaver v. Nugent, 72 Tex. 278, 10

Hefferan, 21 J. & S. (N. Y.) 101; Jack- S. W. Rep. 458.

son v. Badger, 109 N. Y. 632, 16 N. E. 8 McMurtrie v. Riddell, '.» I !ol. 197,

Rep. 208. 13 Pac. Rep. 181; Redpath v. Law-

3 Dygert v. Remerschnider, 32 N. Y. rence, 42 Mo. App. 101.

629. 9Smith v. Spencer, ?:: \l.-i. 299;

4 Kain v. Larkin, 131 N. Y. 300, 30 Page v. Dillon (Vt.) 18 Atl. Rep. 814.

VALUABLE CONSIDERATION. §209

of the statute against covinous alienations. The con-
sideration must be adequate ; not that the courts will
wt-i'li the value of the eoods sold and the price received
in very nice scales, but after considering all the circum-
stances they will hold that there should be a reasonable
and fair proportion between the price and the value.
Cases in which the question of inadequacy of consider-
ation arises between the grantor and grantee of a deed,
where suit is instituted for the purpose of setting aside
the grant on the ground of imposition, are not applicable
in determining a question of the fairness of a consider-
ation between a vendee and creditor under the statute
concerning fraudulent conveyances. Such inadequacy of
consideration as would induce a court to set aside a con-
veyance at the instance of the grantor on the ground of
imposition, presents an entirely different question from
that degree of inadequacy which would avoid an assign-
ment on the ground of fraud, in a suit instituted by
a creditor or purchaser against the alleged fraudulent
assignee. A grantor must of necessity make out a stronger
case, calling for the interference of the courts, than a
creditor, because the latter is not a participant in the trans-
action, is guilty of no negligence or fraud, and belongs to
a favored class. Unreasonable inadequacy of price is
evidence of a secret trust, and it is said to be prima facie
evidence that a conveyance is not bona fide if it is accom-
panied with any trust.1 In Cook v. Tullis ~ the court ob-
served that " a fair exchange of values may be made at
any time, even if one of the parties to the transaction be
insolvent."8

It is said in the New York Court of Appeals that a
valuable consideration is something mutually interchanged
between the parties, and that it is not necessary that the

KuykendaU v. McDonald, 15 Mo. 18 Wall. 340.

»See Stewart v. Piatt, 101 U. S. 738.

§ 2IO LOVE AND AFFECTION. $Jij

subject-matters should be of equal values.1 An assump-
tion by a surety of the debt of his principal constitutes a
valuable consideration." It is also established that a
gratuity cannot be subsequently converted into a debt so
as to become the consideration of a conveyance made by
the grantor to the injury of his creditors.3 A covenant
from which the covenantor may be relieved by reason of
the failure of the transfer for which it was made is not a
valuable consideration.4 An insignificant or practically
nominal consideration will not make the vendee a pur-
chaser for valuable consideration under the New York
Recording Act.5

§ 210. Love and affection.— In Mathews v. Feaver6 Sir
Lloyd Kenyon said : " This is a transaction between the
father and the son, and natural love and affection is men-
tioned as part of the consideration, upon which, as against
creditors, I cannot rest at all. It is true it is a consider-
ation which, though not valuable, is yet called meritorious,
and which in many instances the court will maintain, but
not against creditors." Natural love and affection is a
sufficient consideration 7 for a gift or voluntary transfer
between a brother and a sister,8 but as a general rule a
conveyance for such a consideration cannot be supported
against the rights of existing creditors.9 It was said in

1 Dygert v. Remerschnider, 32 N. Y. Yardley v. Torr, 67 Fed. Rep. 857. In
642. Scott v. Davis, 117 Ind. 233, 20 N. E,

2 Pollock v. Jones, 96 Ala, 492, 11 Rep. 139, the court says: "A convej
So. Rep. 529. ance is not fraudulent because the

3 Clay v. McCally, 4 Woods 605. purchaser, in addition to the con-

4 Arnold v. Hagerman, 45 N. J. sideration paid in money and notes
Eq. 200, 7 Atl. Rep. 93. to third persons, agrees to support Ins

s Ten Eyck v. Witbeck, 135 N. Y. father and mother during their life-

40, 31 N. E. Rep. 994. time; nor does such an agreement

6 1 Cox Eq. Cas. 278. 280. constitute a secret trust invalidating

7 See Bliss v. West, 58 Hun (N. Y.) the conveyance, in cases where it is
75, 11 N. Y. Supp. 374. otherwise supported l>> an adequate

8 Anderson v. Dunn, 19 Ark. 658. consideration, anil the grantee is not

9 Moreland v. Atchison, 34 Tex. 351; [guilty of fraud."

;8o

LOVE AND AFFECTION.

§2IO

H hide's Lessee v. Longworth,1 and the rule is still good,
that "a deed from a parent to a child, for the consider-
ation of love and affection, is not absolutely void as
against creditors. It may be so under certain circum-
stances ; but the mere fact of being in debt to a small
amount would not make the deed fraudulent, if it could
be shown that the grantor was in prosperous circum-
stances, and unembarrassed, and that the gift to the child
was a reasonable provision according to his state and con-
dition in life, and leaving enough for the payment of the
debts of the grantor." The same principle appertains
generally to conveyances founded upon such consider-
ation.2 A conveyance by a husband to a wife, made in
consideration of love and affection and her promise to
pay certain preferred claims and to support him, will not
be upheld against creditors.3

1 11 Wheat. 213. The same rule
applies to a conveyance to an illegiti-
mate child. An<ni\ iiimis, 1 Wall, .Jr.
107, 1 Fed. Cases, 1027.

Good and valuable considera-
tion.— Judge Story observes (1 Story's
Eq. Jur. i 354) : " A good considera-
tion is sometimes used in the sense
<>f a consideration which is valid in
point of law : ami then it includes a
meritorious as well as a valuable con-
sideration. Bodgson v. Butts, 3
Cranch 140; Copis \. Middleton, 2
Madd. 430 ; Twyne's Case, 3 Rep. 81,
2 Coke 212; Taylor v. Jones, 2 Atk.
601 : Newland on < lontracts, <•. 23,
p, 386; Partridge v. Gopp, Ambler
599, I Eden, 167, 168; Atherley
on Mar. Sett. <■. L3, pp.191, 192. But
it i- more frequently used in a sense
contradistinguished from valuable;
and then it imports m consideration
of blood or natural affection, a-, when
:i man grants an estate to a near re-
lation, merely Founded upon motives

!' pi lldence and natural

duty. A valuable consideration is
such as money, marriage, or the like,
which the law esteems as an equiva-
lent given for the grant, and it is
therefore founded upon motives of
justice. 2 Black. Com. 297, 1 Fonbl.
Eq. B. 1, c. 4, § 12, note. Deeds
made upon a good consideration only
are considered as merely voluntary ;
those made upon a valuable con-
sideration are treated as compensa-
tory. The words 'good considera-
tion' in the statute may be properly
construed to include both descrip-
tions ; for it cannot be doubted that
it meant to protect conveyances made
hinia fide and for a valuable con-
sideration, as well as those made
bona fide upon the consideration of
blood or affection. Doe v. Routledge,
Covvp. 708, 710, 711. 712; Copis v.
Middleton, 2 Madd. 430 ; Hodgson v.
Butts, :', ('ranch, 140; Twyne's Case,
3 Rep. 81, 2 Coke 812."

a Park v. Battey, 80 Ga. 353, 5 S. E.
Rep. 492.

§§ 211, 2Iia TRANSFER FOR GRANTOR'S BENEFIT. 381

§ 211. Transfer for grantor's benefit. — As w as observed
by Peck, J., in Stanley v. Robbins,1 one cannot transfer
his property " in consideration of an obligation for sup-
port for life, or perhaps for support for any considerable
length of time, unless he retains so much as is necessary
to satisfy existing debts,3 even if he acts in good faith.8
In Crane v. Stickles,4 the court said : " It seems, that one
week before the plaintiff's note fell due, they took a
sweeping sale of all the property of which the defendant
was possessed, real and personal, and obligated them-
selves that they would support her for the same, as the
only consideration, paying nothing, and agreeing to pay
nothing, only by way of support — and leaving nothing
for the payment of debts. Now if the law would tolerate
a proceeding like this, any person, having the means,
may make ample provision for himself and family during
life, at the expense of his creditors. But that would not
be permitted." But it has been held in some cases that,
where such support had actually been given during a
number of years, the conveyance will be upheld, if no
actual fraud was intended.5

§ 211a. Exchange of property. — Converting property
into a new or different form is a favorite subterfuge of
debtors. In Billinos v. Russell,6 the New York Court
of Appeals says : " Other situations can readily be con-
ceived where the transfer of property, for a valuable con-
sideration, may be made the cover for fraudulent prac-

1 36 Vt. 432. 4 15 Vt. 257.

2 See Crane v. Stickles, 15 Vt. 252 ; fl Hisle v. RudasiU, 89 Va. 519, Hi
Briggs v. Beach, 18 Vt. 115 ; Wood- S. E. Rep. 673 ; Hays v. Montgomery,
ward v. Wyman, 53 Vt. 647 ; Tyler v. 118 Ind. 91. 20 N. E. Rep. 646 ; Eelsej
Tyler, 126 111. 525, 521 N. E. Rep. 616 ; v. Kelley, 63 Vt. 41, 22 Ail. Rep. 59? ;
Pease v. Shirlock, 63 Vt. 622, 22 Atl. Keener v. Keener, 34 W. Va. 131, Hi
Rep. 661. But see Chandler v. Par- S. E. Rep. 729.

sons, 100 Mich. 313, 58 N.W. Rep. 1011. ''101 N. Y. 2:11. I N. G. Rep.

3 Davidson v. Burke, 143 111. 139, 531.
32 N. E. Rep. 514.

ANTE-N1 PTIAL SETTLEMENT. §212

tices. Exchanges by which one kind of property is
converted into another more easily concealed or trans-
ported ; the incumbrance of visible and unavailable
property, and the retention of that which is convertible,
or even the reverse of this, and other cases, where the
ao-oreo-ate value of the debtor's property is not dimin-
ished, but an apparent obstacle to a creditor's proceed-
ings is created, are among the methods by which frauds
may be perpetrated, by an insolvent debtor."

§212. Ante-nuptial settlement — Marriage as considera-
tion. - An ante-nuptial settlement, though made by the
intended husband with the design of defrauding his cred-
itors, will not be set aside in the absence of the clearest
proof of the wife's participation in the fraud,1 even though
the husband be insolvent at the time of the settlement.-
In Magniac v. Thompson,3 the court said : " Nothi-ng can
be clearer, both upon principle and authority, than the
doctrine that to make an ante-nuptial settlement void, as
a fraud upon creditors, it is necessary that both parties
should concur in, or have cognizance of, the intended
fraud. If the settler alone intended a fraud, and the
other party have no notice of it, but is innocent of it, she
is not and cannot be affected by it. Marriage, in con-
templation of the law, is not only a valuable considera-
tion to support such a settlement, but is a consideration
of the highest value,4 and from motives of the soundest
policy is upheld with a steady resolution" The courts
are averse to annulling such a settlement, because there
can follow no dissolution of the marriage which was the

Prewil v. Wilson, L03 U. S. 32. L94; Wright v. Wright, 59 Barb. (N.

199. Y.) 50.-, ; affi'd 54 N. Y. 437 ; Comer v.

• Nance v. Nance, ^1 Ala :;:.-,. I So. Allen, 72 Ga. 12 ; Cohen v. Knox. 90

Rep. 699 Gal. 266, 27 Pac. Rep. 215.

; Pet. 34H 393; approved and * Tolman v. Ward, 86 Me. 305, '-)(.>

adopted in Prewil v. Wilson, L08 U. Ail. Rep. 1081.
. 34; Frank's Appeal, 59 Pa. St.

§ 212 ANTE-NUPTIAL SETTLEMENT. 383

consideration for it.1 The marriage subsists in full force,
even though one of the parties should forever be ren-
dered incapable of performing his or her part oi the
marital contract.2

Marriage is not only a valuable consideration, but, as
Coke says, there is no other consideration so much
respected in the law." The wife is deemed to be a pur-
chaser of the property settled upon her in consideration oi
the marriage, and she is entitled to hold it against all claim-
ants.4 In Sterry v. Arden,5 Chancellor Kent observed :
" The marriage was a valuable consideration, which fixed
the interest in the grantee against all the world ; she is
regarded from that time as a purchaser, and as much so as
if she had then paid an adequate pecuniary consider-
ation It is the constant language of the books, and

of the courts, that a voluntary deed is made good by a sub-
sequent marriage, and a marriage has always been held to
be the highest consideration in law.'"1 It is unnecessary
to dilate upon this branch of the subject. Where the
wife participated in the fraudulent intent and scheme, the
transaction may, of course, be annulled.7 The difficulties
of implicating the wife in the fraudulent scheme are from
the very nature of things often insuperable. Our meaning
is illustrated by the language of Mr. Justice Field in a
case which we have frequently cited : " It is not at

1 Prewit v. Wilson, 103 U. S. 22; 4 Herring v. Wickham, 29 Gratt.
Barrow v. Barrow, 2 Dick. 504 ; Nairn (Va.) 628; Clay v. Walter, :'•' Va. 96.
t. Prowse, 6 Ves. 752; Campion v. 51 Johns. Ch. (N. Y) 260 271 :
Cotton, 17 Ves. 264 ; Sterry v. Arden, affi'd Verplank v. Sterry, 12 Johns.
1 Johns. Ch. (N. Y.) 261 ; Herring v. (N. Y.) 536.

Wickham, 29 Gratt. (Va.) 628; An- "Jones' Appeal, 62 Pa. St. 324;

drews v. Jones, 10 Ala. 400. Armfield v. Aruafield, Freem. Ch.

2 Herring v. Wickham, 29 Gratt. (Miss.) 311 ; Smith v. Allen, 5 Allen
(Va.) 635. (Mass.) 454 : Andrews v. .Jours. 10 Ala.

3 See Bishop's Law of Married Wo- 400 : Barrow v. narrow. 2 Dick. 504.
men, 775, 776 : Magniac v. Thompson, ' Ex parte McBurnie, 1 DeG., M. &
7 Pet. 348; Dygert v. Remerschni- G. 441 ; Fraser v. Thompson, IDeG
der, 32 N. Y. 642 : Prewit v. Wilson, & J. 659.

103 U. S. 24.

J84 ANTE-NUPTIAL SETTLEMENT. § 212

all likely, judging from the ordinary motives governing
men. that, whilst pressing his suit with her, and offering
to settle property upon her to obtain her consent to the
marriage, he informed her that he was insolvent, and
would, by the deed he proposed to execute, defraud his
creditors. If he intended to commit the fraud imputed to
him, it is unreasonable to suppose that he would, by
unfolding his scheme, expose his true character to one
whose good opinion he was at that time anxious to secure.
If capable of the fraud charged, he was capable of deceiv-
ing Mrs. Prewit as to his pecuniary condition. She states
in her answer that she knew he was embarrassed and in
debt, but to what extent, or to whom, she did not know,
and that it was because of the knowledge that he was
embarrassed that she insisted upon his making a settle-
ment upon her." ' This is perhaps an extreme case, but
it illustrates the statement already advanced, that the
creditor will be forced to travel a thorny pathway to annul
an ante-nuptial settlement. It is sometimes urged that
the courts should not encourage a practice the result of
which is, so to speak, to allow a man to barter for a wife
for a pecuniary consideration.' This is scarcely a fair
view of the transaction. By marriage the woman assumes
new duties and responsibilities ; forsakes a home to which
the marriage will ordinarily unfit her to return ; promises
to live with her husband, and to bear her share of the
burdens and cares of the family. Surely in assuming
these responsibilities she is entitled to guard against pov-
erty and distress. In Piper v. Hoard,3 the court says :
'• There are some anomalies in the law relative to con-
tracts or negotiations having marriage for their consid-

Prewil v. Wilson, 103 U.S. 23, negroes, as he would sell a lamb for

"There i certainly something the shambles." Davidson v. Craves

repulsive in tb< idea of a parenl Riley's (S. C.) Eq. 236.

ring off an amiable and accom- lo? N. Y. 77, 13 N. E. Rep. 626.
pushed daughter for lands and

§ 213 ILLICIT INTERCOURSE. $85

eration, and such contracts are based upon considerations
which obtain in no other contract. The family relations
and their regulation are so much a matter of public policy
that the law in relation to them is based on principles not
applicable in other cases ; and all business negotiations
having marriage for their end are regarded in much the
same light by our courts."

§ 213. Illicit intercourse. — A contract the consideration of
which is future illicit cohabitation is said to be utterly
void.1 But a conveyance in consideration of past cohabi-
tation, intended or regarded as reparation or indemnity
for the wrong done, is treated at common law as founded
on a good consideration, and may be upheld.2 A trans-
fer, however, to a mistress or her children, by way of gift
or advancement, although not looking to future cohabi-
tation, and intended merely as a provision for mainte-
nance, is invalid as against existing creditors.3 This
distinction is manifestly important. In Wait v. Day4
the court said, that although the debtor " may have been
under no legal liability to the defendant, yet if he paid the
money in discharge of what he deemed a moral obligation
to indemnify the defendant against the consequences
which had already resulted from their illicit intercourse, I
think the case would not be within the statute. He had
made her the mother of two illegitimate children, and was
at liberty to refund the money which she had already
expended for the necessary support and education of
those children. Where there is an existing obligation,
either legal or moral, to pay so much money, and the pay-
ment is not made with any reference to the future,
nor by way of mere gratuity, the case is not within the
mischief against which the legislature intended to pro-

1 Potter v. Gracie, 58 Ala. 305; * Potter v. Gracie, 58 Ala. 805.
Jackson v. Miner, 101 111. 559. "4 Den. (N. Y.) 439, 441.

3 Ibid.

25

ILLEGAL CONSIDERATION. §§ 214, 21 5

vide." The same principle was applied in Fellows v.
Hmperor.1 In that case the grantee had been deceived
into a marriage with the grantor, and had innocently lived
with him for years, supposing she was his lawful wife. It
subsequently transpired that he had another wife living,
whereupon she left him. The court, in sustaining the
conveyance, held that the grantor was under the strongest
moral, if not legal obligation, to compensate the grantee
for her services, and to indemnify her as far as he could in
a pecuniary point of view, against the consequences of
his fraudulent and illegal acts. The conveyance was
upheld against creditors.2

^ 214. Illegal consideration. — One who has freely paid
his money upon an illegal contract is particeps criminis,
and no cause of action arises in his favor upon an implied
promise to repay it. But when an insolvent debtor, or one
in embarrassed circumstances, pays his money upon such
illegal consideration, he stands, in relation to his creditors
in the same position as if he had made a voluntary con-
veyance of his property. In contemplation of law he has,
in fact, parted with his money for no consideration,3
because it is no consideration which can be set up in a
court of law.1

^ 215. Moral obligations. — A debtor may acknowledge
and prefer a claim barred by the statute of limitations,5
and such conduct is not conclusive evidence of a want of

L3 Barb. (N. ^ 312; Kessinger \. kVssinger, 37 Ind.

Improper influences. — Convey- 841. See §13 and note on "Undue

ances made by a dissolute man to a Influence," giving the substance of

prostitute, who had a strong influence the opinion in Shipman v. Furniss,

biin, may be annulled. Shipman 69 Ala. 555.

I hi m--. 69 Ala. 555, and ca 1 Story's Eq. §§ 353, 354 ; Clark v.

cited, it Am. Rep. 528, and the Gibson, 12 N. H. 386.

learned note of [rving Browne, Esq., Weeks v. Bill, 38N. II. 305.

••'i p. 537; also Leighton v. Orr, 11 Manchester v. Tibbetts, 121 N. Y.

Dean v. Negley, 11 Pa. St. 219, 'J I N. E. Rep. 304.

§ 2l6 COPARTNERSHIP DEBTS. 387

good faith;1 and he is not bound to set up the statue of
frauds;2 and an agreement by a husband to convey cer-
tain lands to his wife in consideration of her relinquishing
an inchoate interest in his lands, which she carried out, is
founded upon a valid consideration which the husband had
a right to discharge.3 So it is not absolutely necessary
to the bona fides of a charge of interest in an account, that
it should be of such a character that it mi^ht be recov-
ered in a suit at law brought by a creditor against his
debtor. There are many dealings amongst men in which
interest is habitually charged and paid, when it could not
be claimed on the ground of strict legal right. These
transactions are regarded as fair and just as between the
parties, and they cannot be considered fraudulent as to
others.4

§ 216. Individual and copartnership debts. — One partner,
it is asserted, cannot usually make a valid transfer of firm
property in payment of his individual debt without the
consent of his copartner.5 It is said that every one is
bound to know that a partner has no right to appropriate
the partnership property to the payment of his individual
debts, and if one so deals with him he must run the risk

1 French v. Motley, 63 Me. 326 ; 3 Brown v. Rawlings, 72 Ind. 505.
Keen v. Kleckner, 42 Pa. St. 529 ; But compare Collinson v. Jackson, 8
Davis v. Howard, 73 Hun (N. Y.) Sawyer 357.

347. 26 N. Y. Supp. 194 ; Del Valle v. * Spencer v. Ayrault, 10 N. Y. 205 ;

Hyland, 76 Hun (N. Y.) 493, 27 N. Y. Wolford v. Farnham, 47 Minn. 95, lit

Supp. 1059; affirmed without opinion, N. W. Rep. 528. In Missouri one

148 N. Y. 751, 43 N. E. Rep. 986. But partner may execute a mortgage on

the fact that the debt is so barred is a firm assets to secure certain firm

circumstance upon which fraud may claims. Union Bk. v. Kansas Citj

be predicated. Sturm v. Chalfant, 38 Bk., 136 U.S. 223, 10 S. C. Rep. 1013

W. Va. 248, 18 S. E. Rep. 451 ; McCon- "Hartley v. White, 94 Pa. St. 36;

nellv. Barber, 86 Hun (N.Y.) 360, 33 Todd v. Lorah. 75 Pa. St. 155. Se<

N. Y. Supp. 480. Erb v. West (Miss. » 19 So. Rep. 829 ;

2 Cresswell v. McCaig, 11 Neb. 227, Brickettv. Downs. 163 Mass. 70, 39N.
9 N. W. Rep. 52 ; Cahill v. Bigelow, E. Rep. 776.

18 Pick. (Mass.) 369. But see Lloyd v.
Dutton, 91 U. S. 479.

388 COPARTNERSHIP DEBTS. § 2l6

of the interposition of partnership rights.1 This broad
proposition is disputed in Schmidlapp v. Currie.2 The
court said : " The firm creditors at large of a partner-
ship have no lien on its assets, any more than ordinary
creditors have upon the property of an individual debtor.
The power of disposition over their property, inherent in
every partnership, is as unlimited as that of an individual,
and the jus disponendi in the firm, all the members co-op-
erating, can only be controlled by the same consider-
ations that impose a limit upon the acts of an individual
owner, namely, that it shall not be used for fraudulent
purposes. So long as the firm exists, therefore, its mem-
bers must be at liberty to do as they choose with their
own, and even in the act of dissolution they may impress
upon its assets such character as they please. The doc-
trine that firm assets must first be applied to the payment
of firm debts, and individual property to individual debts,
is only a principle of administration adopted by the
courts, where from any cause they are called upon to wind
up the firm business, and find that the members have
made no valid disposition of, or charges upon, its assets."3
But if while such prior right of the firm creditors must
generally be worked out through the rights of the part-
ners as between themselves, still where the transfer of
all the partnership assets to one member of the firm is
done clearly with the intent of hindering the partnership
creditors, their rights will be held to be superior to those
of the individual creditors.4

A transfer by one of the partners, or a lien created by
him on the corpus of the partnership property to pay an

Id v. Lorah, 76 Pa. St. L5G. Co. v. Bannon, 85 Tenn, 712. 4 S. W.

600. Rep. 831.

Roach v. Brannon, 57 .Mi^s. * Arnold v. Second Nat. Bank, 45

Goodbar v. Cary, 4 Woods N. .1. Eq. 186,17 Atl. Rep. 93; Jack-

u i I. 99 U.S. 119; son Hank v. Durfey, 72 Miss. 971, 18

Ids v. Johnson, •">! Ark. 149, 16 S... Rep. 4o6.
8. W. Rep. 124 • Carver Gin. & N.

§216

CI >PARTNERSH] P DEBTS.

individual debt, has been in effect declared in New York
to be fraudulent and void as to the creditors of the firm,
unless the firm was solvent at the time.1 The converse
of the proposition is not generally admitted. Chief-
Justice Ruger said, in Crook v. Rindskopf :~ "It is law-
ful for an insolvent member of a firm to devote his
individual property to the payment of firm debts, to the
exclusion of his individual creditors." 8 Where the members
of the partnership are all liable for a debt, although it was
originally a debt of one of them only, it is no fraud on the
partnership creditors to devote partnership funds to its
payment.4 The mere fact, however, that the money was
used for the benefit of the partnership does not make the
debt a partnership obligation.5 It is settled in New
York that it is a fraud upon firm creditors for a member
of the -firm to take firm property and apply it to his
individual debt, or for an insolvent firm to apply firm prop-
erty to the payment of the debt of an insolvent partner.6

1 Menagh v. Whitwell, 52 N. Y.
146 ; Goodbar v. Cary, 4 Woods, 668.
See Wilson v. Robertson, 21 N. Y.
587 ; Keith v. Fink, 47 111. 272 ; Marks
v. Bradley, 69 Miss. 1, 10 So. Rep. 922 ;
Cribb v. Morse, 77 Wis. 322, 46 N.
W. Rep. 126 ; Taylor v. Missouri Glass
Co., 6 Tex. Civ. App. 337, 25 S. W.
Rep. 466 ; Hubbard v. Moore, 67 Vt.
532, 32 Atl. Rep. 465 ; Cox v. Peoria
Mfg. Co., 42 Neb. 660, 60 N. W. Rep.
933 ; Collier v. Hanna, 71 Ind. 253 ;
Hanford v. Prouty, 133 111. 339, 24 N.
E. Rep. 565 ; Sexton v. Anderson, 95
Mo. 373, 8 S. W. Rep. 564 ; Reyburn
v. Mitchell, 106 Mo. 365, 16 S. W.
Rep. 592; Darby v. Gilligan, 33W.
Va. 246, 10 S. E. Rep. 400. Compare
Case v. Beauregard, 99 U. S. 119 ;
Shanks v. Klein, 104 U. S. 18 ; Crook
v. Rindskopf, 105 N. Y. 482, 12 N. E.
Rep. 174 ; Booss v. Marion, 129 N. Y.

536, 29 N. E. Rep. 832 ; Smith v.
Smith, 87 Iowa 93, 54 N. W. Rep. 73.

2 105 N. Y. 482.

8 Citing Dimon v. Hazard, 32 N.
Y. 65 ; Saunders v. Reilly, 105 N. Y.
12 ; Royer Wheel ('<>. v. Fielding, 101
N. Y. 504, 5 N. E. Rep. 431 ; Kirby v.
Schoonmaker, 3 Barb. Ch. N. Y. 46.
See Citizens' Bank v. Williams, 128
N. Y. 77, 28 N. E. Rep. 33.

4 Citizens' Bank v. Williams, 128
N. Y. 77,28N. E. Rep. 33; Nordlinger
v. Anderson, 123 N. Y. 544, 25 N. E.
Rep. 992.

6 Roe v. Hume, 72IIun, N. Y. 1, 2:>
N. Y. Supp. 576 ; Smith v. Sipperley,
9 Utah, 267, 34 Pac. Hop. 54.

6 Berinheimer v. Rundskopf, 116 N.
Y. 428, 22 N. E. Rep. 1074 ; Nordlinger
v. Anderson, 123 N. Y. oil. 25 N E.
Rep. 992 : Bulger v. Rosa, L19 N. Y.
459, 24 N. E. Rep. 8

390 FUTURE ADVANCES. § 217

In Bulger v. Rosa1 the court says: "Where an indi-
vidual creditor of one of the members of an insolvent
firm, knowing of such insolvency, takes a transfer of firm
property in payment of his individual debt, his act is not
merely a violation of an equitable right of the firm
creditors, but it constitutes a fraud under the Statute of
Elizabeth.'"" The authorities as to what disposition of
individual or of copartnership assets will be upheld as
against the respective classes of creditors are not in very
satisfactory shape. In some States it is held that an
appropriation of firm assets to individual debts by consent
of all the partners, is valid, even when the firm is insol-
vent.3 Other cases hold that such appropriation,
while not in itself fraudulent, will be set aside if there is
an actual intent to defraud firm creditors.4 It seems per-
fectly clear, however, that where the courts get possession
of the funds for distribution, the distinction between the
rights of the two classes of creditors will be respected5
and preserved.6

§ 2 i 7. Future advances. — A judgment or mortgage
may be taken and held as security for future advances and
responsibilities to the extent of the security, when that
forms a part of the original agreement between the

1 119 X. Y. 459, 465, 24 N. E. Rep. N. W. Rep. 181 ; cf. Smith v. Smith,

87 Iowa 93, 54 N. W. Rep. 73.

In re Douglass, L. R. TCh. 537; 5 Coffin v. Day, 34 Fed. Rep. 687.

Kendal v. Wood, L. R. 6 Exch. 243: See § 319 1>.

Piercy v. Fynney, L. R. 12 Eq. 69; 6 An assignment for the benefit of

Gallagher's Appeal, 111 I'a. St. 353, creditors, including all the property

cf Euiskamp \. Moline Wagon <>1' the partners, as members of the

Co., L21 D". 8. 810, 9 S. C. Rep. 899. firmand individually, should be con-

\ 1- 1 1 1 - 1 * . . 1 1 _' \ Carr, 116 N. C. 499, Btrued so as to apply partnership

21 S. K. Rep. 175; Reynolds v. John- assets to partnership debts, and in-

'-1 \il.. 149, 16' S. w. Rep. 124. dividual assets for individual debts.

■ tr an elaborate discussion of this Griffin v. Peters, 133 U. S. 070, 10 8.

subject, see 18 \m St. Rep. 364 380. < !. Rep. 354.

• K. II. s v. Flory, 84 Iowa 671, 51

§ 217a, 2l8 GIFTS 1 IF CHARITY.

parties.1 "It is frequent," says Chief-Justice Marshall,
" for a person who expects to become more considerably
indebted, to mortgage property to his creditor, as a security
for debts to be contracted, as well as for that which is
already due."2 But in order to secure good faith and
prevent error and imposition in dealing, it is necessary
that the agreement, as contained in the record of the lien,
whether by mortgage or judgment, should give all the
requisite information as to the extent and character of the
contract. 3 A conveyance in consideration of future serv-
ices is declared to be void as against existing creditors, '
and creditors may reach money paid to a third party as
board money for two years in advance. 5

§ 217a. Gifts to charity. — An insolvent debtor can no
more give away his property for a charitable use in fraud
of the rights of his creditors than he can to an individual.0

§ 218. Services by members of a family. — In the absence
of an express agreement the law will not imply a promise
to pay a daughter for services rendered in the debtor's
family,7 and a mortgage given to a daughter under such

1 Truscott v. King, 6 N. Y. 157, and -United States v. Hooe, 3 Cranch

cases cited ; Robinson v. Williams, 22 89. See Lawrence v. Tucker, 23 How.

N. Y. 380; Tapiav. Demartini, 77 Cal. 14 ; Leeds v. Cameron, 3 Sumner 492,

383, 19 Pac. Rep. 641; Boswell v. per Story, J. ; Conard v. Atlantic Ins,

Goodwin, 31 Conn. 74; Brace v. Ber- Co., 1 Pet. 448.

dan, 104 Mich. 356, 62 N. W. Rep. 3Hart v. Chalker, 14 Conn. 1',. The

568; Holt v. Creamer, 34 N. J. Eq. fact that the debtor is insolvent al the

188; Griffin v. New Jersey Oil Co., 11 time does not prevent the enforce-

N. J. Eq. 49 ; Bell v Fleming's Ex'rs, ment of the contract. Exparh Ames,

12 N. J. Eq. 13; Central Trust Co. v. 1 Low. 561, 1 Fed. Cases 746.

Continental Iron Works, 51 N. J. Eq. * Lehman v. Bentley, 60 N. Y. Su-

607, 28 Atl. Rep. 595 ; Mowry v. Agri- per. 473, 18 N. Y. Supp. 778.

cultural Ins. Co., 64 Hun (N. Y.) 143, I >.iv is v. Briggs, 24 X. Y. Stat< Rep.

18 N. Y. Supp. 834 ; Barnard v. Moore, 896, 5 N. Y. Supp. 323.

90 Mass. 274; Robinson v. Consolidated G St. Geor-v's ( ihurch S«.c. v. Branch,

Real Estate & F. I. Co. 55 Md. 109 ; 120 Mo. 238, 35 S. W. Rep. 818.

Collins v. Carlile, 13 111.254; McCon- " Miller v. Sauerbier, 30 X. J. Eq.

nell v. Scott, 67 111. 276; Wilson v. 74; [rish v. Bradford, 64 [owa 303,

Russell, 13 Md. 496. See Ackerman 20 N. W. Rep. 147; Stumbaugh \.

v. Hunsicker, 85 N. Y. 50. Anderson, 46 Kan. 541, 26 Pac. Rep.

392

SERVICE BY MEMBERS OF A FAMILY.

§218

circumstances will be held to be without consideration,
and fraudulent as against creditors.1 A conveyance by
an insolvent husband to his wife, in pursuance of a con-
tract to compensate her for services in taking care of
his aged mother, who resided with him, has been held in
New York to be invalid and voidable as against creditors.
The Court of Appeals of that State decided that the
wife, by rendering service to her husband's mother, was
simply performing a marital duty which she owed to her
husband ; that where she received no payment for the
discharge of this duty from the person to whom the serv-
ice was rendered, and was entitled to none, and brought
no money or property to the husband by her service, she
could not stipulate for compensation.2 Earl, J., said : " It
would operate disastrously upon domestic life, and
breed discord and mischief, if the wife could con-
tract with her husband for the payment of services
to be rendered for him in his home ; if she could
exact compensation for services, disagreeable or other

1045 ; Byrnes v. Clarke, 57 Wis. 13, 14
X. W. Rep. 815; Ionia Co. Savings
Bank v. McLean, B4 Mich. 625, 48 N.
w. Rep. 159.

Gardner's Admr. v. Schooley, 25
N. .1. Eq. 150. Sec Ridgway v. Eng-
lish, 22 X. J. Law 409; Updike v.
Titus. 13 N. J. Eq. 151; Coley v.
Coley, 11 X. J. E.j. 350: CTpdike v.
Ten Broeck, 32 X. J. Law 105;
Prickett v. Prickett, 20 X. J. Eq. 478.
The services of a sod after reaching
majority were held t<> be a good con-
sideration in Graves v. Davenport, 50
I ■ 'i . Rep. 881 ; I [eeren v. Batson,
28 III. App. 268. Parents may, as
against creditors, compensate chil-
dren for services. I Inward v. Rynear-
Bon, 50 Mich. 309, 15 X. W. Rep. 486,
!>•-!- Cooley, •! : Wilson \. McMillan,
17.'

I loleman \ Burr, 93 X. Y. 17, 25 ;

17 Weekly Dig. (N. Y.) 233. Com-
pare Filer v. N. Y. Central R. R.
Co., 49 N. Y. 47 : Blaechinska v. How-
ard Mission, etc., 130 N. Y. 499. 29 N.
E. Rep. 755 ; Coursey v. Morton, 132
N. Y. 556, 559, 30 N. E. Rep. 231 ;
Suan v. Caffe, 122 X. Y. 320, 25 N. E.
Rep. 488 ; Snyder v. Free, 114 Mo.
371, 21 S. W. Rep. 847 ; McGarvy v.
Roods, 73 la. 363. 35 N. W. Rep. 488 ;
Hart v. Flinn, 36 la. 366; McAfee
v. McAfee, 28 S. C. 188, 5 S. E. Rep.
480 ; Whitaker v. Whitaker, 52 N. Y.
368 ; Brooks v. Schwerin, 54 X. Y. 344 ;
Birkbeck v. A.ckroyd, 74 N. Y.
356; Reynolds v. Robinson, 64 N. Y.
589 ; Gable v. Columbus Cigar Co. ,
140 End. 563, 38 N. E. Rep. 474. As
against a subsequent creditor her serv-
ices have been held to be a good con-
sideration. Daggett, B. & H. Co. v.
Bulfer, 82 Iowa 101, 47 N.W. Rep. 978.

§219 PROOF OF CONSIDERATION. 3<j3

wise, rendered to members of his family ; if she
could sue him upon such contracts, and establish them
upon the disputed and conflicting testimony of the mem-
bers of the household. To allow such contracts would
degrade the wife by making her a menial and a servant in
the home where she should discharge marital duties in
loving and devoted ministrations, and frauds upon credit-
ors would be greatly facilitated, as the wife could fre-
quently absorb all her husband's property in the payment
of her services, rendered under such secret, unknown con-
tracts." ! But the husband owes no duty to the wife to
render her service in her separate business without com-
pensation.2 Manifestly a father may work for his son,
and a debt for wages due by the father to the former will
sustain a conveyance.3

§ 219. Proof of consideration.— In Hanford v. Artcher,4
in speaking of the presumption of fraud arising from a
failure to change possession, the court said that, to rebut
this presumption, the statute imposed upon the party
claiming under a sale or a mortgage, the burden of prov-
ing good faith and an absence of any intent to defraud
creditors. " Proof of a valuable consideration," said
Senator Hopkins, "or an honest debt, is essential to show
good faith ; and, if there be no such proof, I take it that
the requirement of the statute in this respect is not com-
plied with, and that the court may order a nonsuit

Such proof of consideration, too, must go beyond a mere
paper acknowledgment of it. that might be binding
between the parties." It is said by Chief-Justice Elliott, in
Rose v. Colter,5 that " if it be shown that a valuable con-
sideration was paid for the property, and that when the

1 See Grant v. Green, 41 Iowa 88: 575, 30 N. W. Rep. 368; State Bank

Dowell v. Applegate, 8 Sawyer 427. v. Whittle, 48 Mich. 1, 11 X. W Rep.

4 Third Nat. Bk. v. Guenther 123 756.
N. Y. 576, 25 N. E. Rep. 986. 4 4 Hill (N. Y.) 295.

'Woodhull v. Whittle, 63 Mich. ;,76Ind. 51K3.

394 EXPLAINING RIXITALS. §§ 220, 221

sale was made the seller was possessed of property far
more than sufficient to pay all his debts, the presumption
arising from the retention of possession is plainly over-
come." As we have already said, there ought to be a fair
and reasonable consideration corresponding to the value
of the article sold.1 When the consideration is large
there should be clear proof by the vendee, if his ability to
purchase is questioned, of his means, or of the source
from which he obtained the money. Absence of evidence of
the disposition made by the grantor of the money alleged
to have been received becomes a material circumstance.2

| 220. Recitals of consideration as evidence. — It is said in
Hubbard v. Allen,3 that when a controversy arises between
the grantee and an existing creditor as to the validity of
a conveyance, it is a settled rule to regard the recital of a
consideration as a mere declaration or admission of the
grantor, and not as evidence against the creditor.4
Recitals or statements of consideration in a deed, how-
ever specific, will not be sufficient to protect a purchaser
where there is any fraud.0 and, as we shall see, any kind of
consideration may be proved.6

^ 22i. Explaining recitals. — A conveyance of land made
by a husband to his wife purported to be executed in consid-
eration of love and affection, " and for the sum of one

'State v. Evans, 38 Mo. 150-154; Ala. 137; McCaskle v. Amarine, 12

Klosterman v. Vader, 6 Wash. 99, 32 Ala. 17; Falkner v. Leith, 15 Ala. 9;

Pac. Rep. 1055. See§209. Dolin v. Gardner, 15 Ala. 758. See

'Thompson v. Tower Mfg. Co., 104 Kimball v. Fenner, 12 N. H. 248;

Ala. 146, 16 So. Rep. 116; Barrell v. Cohnv. Ward, 32 W. Va. 34, 9 S. E.

Mitchell, 61 AJa. 270 Rep. 41 ; Ball v. Campbell, 134 Pa. St.

.v.i \l.i. 296; Cohn v. Ward, 32 602, 19 Atl. Rep. 802 ; Childs v. Hurd,

W. Va. 34, 98. E. Rep. 41 ; Rogers v. 32 W. Va. 66-101, 9 S. E. Rep. 362 :

Verlander, 30 W, \:, 619, 5S. E. Rep. De Farges v. Ryland, 87 Va. 408. 128.

347. E. Rep. 805.

•Citing McCain v. W I, I Ala. 5 Snyder v. Free, 114 Mo. 368, 21 S.

Branch Bank of Decatur v. Kin- \V. Rep. ^17.

■ McGintrj v. Reeves, L0 B Leach v. Shelby, 58 Miss. 681.

§ 221 EXPLAINING RECITALS. 395

dollar cash in hand paid, the receipt whereof is hereby
acknowledged." The court held that, the money consid-
eration being manifestly nominal, parol evidence was inad-
missible, in an action brought to set aside the deed as in
fraud of creditors, to show that there was, in fact, an ade-
quate pecuniary consideration.1 But, in another case,
where the consideration expressed in the deed was " five
hundred dollars and othergood causes and considerations,"
it was held competent to prove the consideration of blood.~
This general subject is referred to in Hinde's Lessee v.
Longworth,3 where it was said that if the evidence had
been offered for the purpose of showing that the deed
was given for a valuable consideration, and in satisfaction
of a debt, and not for the consideration of love and affec-
tion, as expressed in the deed, it might well be considered
as contradicting- the deed. It would then be substituting
a valuable for a good consideration, and a violation of
the well-settled rule of law, that parol evidence is inad-
missible to annul or substantially vary a written agree-
ment.4 The subject was further considered in Betts v.
Union Bank of Maryland,5 a case argued by Reverdy
Johnson on one side, and by Roger B. Taney, after-
ward Chief-Justice of the United States, on the other,
and the conclusion of the court was that marriage can-
not be given in evidence as the consideration of a deed
of bargain and sale expressed to be made for a money
consideration only.6 A mortgage, the expressed con-

'rHouston v. Blackman, 66 Ala. 559, 6 Galbreath v. Cook, 30 Ark. 425;

564 ; Galbreath v. Cook, 30 Ark. 417. Davidson v. Jones, 26 Miss. 63 ; I '

See Potter v. Gracie, 58 Ala. 308; v. McCullough, 69 Md. 592, 16 At I.

Reynolds v. Gawthrop, 37 W. Va. 3, Rep. 453. In Scoggin v. Schloath. 15

16 S. E. Rep. 364. Ore. 383, 15 Pac. Rep. 635, the court

2 Pomeroy v. Bailey, 43 N. H. 118. said : "The better rule appears to be

3 11 Wheat. 214. that if the consideration expressed in

4 See Cunningham v. Dwyer, 23 Md. the deed is natural love and affection,
219. it cannot be shown to have been exe-

5 1 Harr. & G. (Md.) 175. cuted for a valuable consideration ; or

396 SUFFICIENT CONSIDERATION. § 222

sideration for which was $1,000, may be explained by
showing that it was, in fact, given to secure the mortgagee
against liability on two accommodation notes of $500
each.1 The recital that the consideration has been paid
may generally be contradicted by parol evidence ; 2 and
indeed there seems to be a prevalent tendency in the
courts to admit parol proof of the true consideration of
a deed in almost every case,3 though a policy sometimes
manifests itself to exclude evidence of consideration dif-
ferent in kind from that set forth in the instrument.
Manifestly the recitals are not binding upon creditors in
any event.

§ 222. Sufficient consideration.— A bond given by a minor
son to his father in consideration of permission to leave
home and work for himself, or for his board while he
remains at home and works on his own account, if bo?ia
fide, is neither against the policy of the law nor fraudulent
as to creditors.4 And where a wife advances to her hus-
band money to purchase land, under an agreement that
the money shall be repaid to her children and its payment

if voluntary, or on consideration of Perry, 28 Iowa 63 ; Lawton v. Buck-

marriage and the like, it cannot be ingham, 15 Iowa 22 ; Pierce v. Brew,

shown that the consideration was a 43 Vt. 295 ; Anthony v. Harrison, 14

moneyed one. This would be proving Hun (N. Y.) 210; Morris v. Tillson, 81

by parol that the consideration was 111. 616 ; Taggart v. Stanbery, 2 Mc-

differenl in kind from that expressed Lean 546 : Wheeler v. Billings, 38 N.

in the deed, and upon well-considered Y. 264 ; Adams v. Hull, 2 Denio (N.

authority, is not allowable." Y.)306 ; Miller v. McKenzie, 95 N. Y.

iMcKinster v. Babcock, 26 N. Y. 578 ; Scoggin v. Schloath, 15 Ore. 383,

378. See Truscott v. King, 6 N. Y. 15 Pac. Rep. 635.

147; Lawrence v. Tucker, 23 How. 14. :i Buford v. Shannon, 95 Ala. 211,

• Bingham v. Weiderwax, 1 N. Y. 10 So. Rep. 263; Leach v. Shelby, 58

514 : Baker v. Connell, 1 Daly (N. Y.) Miss. 681; McKinster v. Babcock, 26

470; Altringer v. Capeheart, 68 Mo. N. Y. 380; McCrea v. Purmort, 16

411 : Miller v. McCoy, 50 Mo. 214; Wend. (N. Y.) 469; Ham v. Van

Rhine v. Ellen, 86 Cal. 868, 870 ; San- Onlen, 84 N. Y. 257; Hebbard v.

ford v. Sanford, 61 Barb. (N. Y.) 303 ; Eaughian, 70 N. Y. 54; Baird v.

\ni..i v. Erie Railway Co., 81 N. Baird, 145 N. Y. 866, 40 N. E. Rep.

Y i'.'.'l ; Baker v. Union Mutual 222.

l-if" I"- Co., 18 N. Y. 887 ; Barper v. * Geist v. Geist, 2 Pa. St. 441.

§223 INSUFFICIENT CONSIDERATION.

secured by mortgage, the contract is valid and may be
set up as a defense to a suit charging the husband with
mortgaging the lands to his children in fraud of credit-
ors.1 The liability of a surety on a bond for the acts of
his principal is a sufficient consideration for a mortgage
given as indemnity.2

§ 223. Insufficient consideration.— A deed from a debtor
to his creditor is voluntary and not founded on a sufficient
consideration if it is given for a pre-existing debt which
was afterward treated by the parties as still due.3 And,
as against creditors of an insolvent, a party cannot make
title to his property as a purchaser for a valuable consid-
eration, where what purports to be the consideration is a
debt against a third person which is found, as matter of
fact, to be worthless ; and this is true even though the
transaction was in good faith on the part of the vendee.4
So a conveyance in consideration of future services has
been held void against existing creditors.5

1 Goff v. Rogers, 71 Ind. 459. 3 Oliver v. Moore, 23 Ohio St. 47!) ;

s State v. Hemingway, 69 Miss. Starr v. Starr, 1 Ohio 321.

491, 10 So. Rep. 575. See Tudor v. De 4 Seymour v. Wilson, 19 N. Y. 417.

Long, 18 Mont. 499, 46 Pac. Rep. 5 Lehman v. Bentley, 60 N. Y.

258. Super. Ct. 478, 18 N. Y. Supp. 778.

CHAPTER XVI

INDICIA OR BADGES OF FRAUD.

Suppression or concealment —
Not recording — Subsequent
fraud.

Evidence aliunde.

Concealment in fraud of bank-
rupt act.

Absolute conveyance by way
of security.

Excess of property mortgaged.

Insolvency.

Sales upon credit.

Unusual acts and transactions.

Effect of relationship upon
debtor's transactions.

Prima fade cases of fraud.

Comments.

" Fraud is one of the broadest issues known to the law." — Vann, J., in White v. Benjamin, 150
N. V., 265, 11 N. E. Rep. 956.

224.

Tlic creditor's embarrassments
— Proof of fraud.

g 235.

225.

Badges of fraud defined.

226.

Question for the jury.

236.

227.

Circumstantial and direct evi-
dence.

237.

228.

Recital of fictitious considera-
tion.

238.

229.

Antedating instrument.

238a

230.

Description of the property.

239.

231.

Conveyance of whole estate.

240.

231a.

Continued possession.

241.

232.

inadequacy of purchase price.

242.

233.

Transfer pending suit.

234.

K\ idence of secrecy.

243.

234a.

Secrel trust.

244.

§ 224. The creditor's embarrassments — Proof of fraud. —
The practical difficulties which a creditor encounters in
seeking to discover equitable assets, or to reach property
fraudulently alienated by the debtor, have already been
the subject of comment.1 A transaction or conveyance
having every appearance of fairness and legality, and to
which the ordinary presumptions of good faith attach,2 is
usually presented at the threshold of the litigation. The
debtor, and the fraudulent alienees acting in collusion
with him, will be found, in most instances, to have taken
ry pre< aution to hide the evidences and traces of their
frauds behind barriers of apparent good faith,3 and,

6, 18 v. Schoolfield, 100 U. S. L49, 16 S. C.

Jones \ . Simpson, 1 L6 I'. Rep. 225.
8. 815, 6 s. C. Rep. 588 Bamberger ' Cowling v. Estes, 15 111. A.pp. 201.

§224 creditor's embarrassments.

ordinarily, the guilty participants develop into wit-
nesses prolific of plausible statements and ingenious
subterfuges devised to uphold the colorable transactions
An intent to defraud is not proclaimed or published to
the world, but, on the contrary, the usual course of the
guilty participants is to give to the contract the appear-
ance of an honest transaction, and to have the conduct of
the interested parties correspond, as far as possible;, with
a bona fide act.1 Parties practicing fraud naturally and
almost uniformly resort to expedients to conceal the evi-
dence of it.2 Fraud always takes a tortuous course, and
endeavors to cover and conceal its tracks.3 Lord Mans-
field said : " Hardly any deed is fraudulent upon the mere
face of it."4 Chief-Justice Bricknell observed: "Where
a fraud is contemplated and committed upon creditors,
concealment of it is the first, and generally the most per-
sistent, effort of those who are engaged in it. Publicity
would render their acts vain and useless. Leaving direct
and positive evidence accessible to those injured by it
would be the equivalent of a confession of the culpable
intent, and of the defeasible character of the transaction.
There are numerous circumstances, so frequently attend-
ing sales, conveyances, and transfers intended to hinder,
delay and defraud creditors, that they are known and
denominated badges of fraud. They do not constitute —
are not elements of fraud, but merely circumstances from
which it may be inferred."5

The question presents itself, How can a creditor most
effectually thwart the deep-laid schemes of the debtor and

1 Tognini v. Kyle, 15 Nev. 463. Weaver v. Owens, 16 Ore. 301, 18 Pac.

'l Sarle v. Arnold, 7 R. I. 585 ; Cowl- Rep. 57!) ; Hickman v. Trout, 83 \ a.

ing v. Estes, 15 111. App. 261. 491, 3 S. E. Hop. 131 ; State, ex rel.

3 Marshall v. Green, 24 Ark. 418. Brown v. Mitchell, 102 N. C. 347, '.'

See § 13. S E. Rep. 702; Earwick v. \V,,i

"Worseley v. Demattos, 1 Burr, dington, 73 Iowa 302,34 X. W. Rep

467,484. 868: Williams v. Barnett, 52 Tex.

6 Thames v. Rembert, 63 Ala. 567 ; 130.

400 PROOF OF FRAUD. §224

his fraudulent alienees, and overcome the usual presump-
tions of honesty and good faith which the parties will
invoke? No witness can look into the minds of the parties
and thus be able to swear positively that they intended to
defraud the creditors of the vendor ; and hence, as we
have already shown in this discussion,1 fraud can gener-
ally be established only by facts and circumstances which
tend directly or indirectly to indicate its existence.2 It is
said in Maryland : " Although the actions of men can be
conclusively proven, the motives which lurk in their
bosoms and control their actions are not susceptible of
positive proof." Experience shows that positive proof
of fraudulent acts is not generally to be expected, and for
that reason, amoncx others, the law allows a resort to cir-
cumstances as a means of ascertaining the* truth.4 " A
deduction of fraud," says Kent, " may be made not only
from deceptive assertions and false representations, but
from facts, incidents, and circumstances which may be
trivial in themselves, but decisive evidence in the given
case of a fraudulent design."5 " Circumstances altogether
inconclusive.'1 says Clifford, J.,G " if separately consid-
ered, may, by their number and joint operation, especially
when corroborated by moral coincidences, be sufficient to
constitute conclusive proof."7 Or they may be " a link
in a chain, which, altogether, is very strong.'' 8 Wills
says : 9 " Although neither the combined effect of the evi-

1 See§ 18. Hendrickson v. People, 10 N. Y. 13,

5 Thomas v. Sullivan, 13 Nev. 249 ; 81; Moore v. United States, 150 U. S.

Wbeelden v. Wilson, 44 Me. 18. 60, 14 S. C. Rep. 26. In New York

•Zimmer v. Miller, 64 Md. 300. 1 Mutual Life Ins. Co. v. Armstrong, 117

\<l Rep- 358 U. S. 591, 6 S. C. Rep. 877, the action

'Castle v. Bullard, 2:s Bow. 17'J, involved the obtaining of an insur-

181 Goshorrj v. Bnodgrass, 1 7 W. Va. ance policy for a fraudulent purpose,

717. and evidence was admitted that poli-

- Kent's Com. 184 cies in other companies had been

tie v. Bullard, 33 Eow. 187. obtained with like intent.

iderable latitude (mould be BEngraham v. Pate, 51 Ga. 587.

allowed on the question of motive. » Wills on Circumstantial Ev., p. 278.

§ 224 PR! »OF OF FRAUD. 40!

dence, nor any of its constituent elements, admits of
numerical computation, it is undubitable that the proving
power increases with the number of the independent cir-
cumstances and witnesses, according- to a geometrical pro-
gression. 'Such evidence,' in the words of Dr. Reid,
' may be compared to a rope made up of many slender fil-
aments twisted together. The rope has strength more
than sufficient to bear the stress laid upon it, though no
one of the filaments of which it is composed would be suf-
ficient for that purpose.' "' It can seldom be the duty of
the court to instruct the jury that a single fact will war-
rant the jury in finding fraud. All the facts surrounding
the transaction must be taken into account collectively.'
The attention of the jury should be called to the effect of
the evidence as a whole ; it is error to take up each
circumstance, one by one, discussing it with the remark
that it does not prove the case.3 The judgment must be
based " upon all the circumstances of the particular
case." 4 Clear proof leading to a " hearty conviction" is
not the test, but rather proof that creates a belief that a
fraud has been perpetrated.5 The frequency with which
fraud is practiced upon creditors ; the difficulties of its
detection; the powerful motives which tempt an insolvent
debtor to commit it ; ° the plausible casuistry by means
of which it is sometimes reconciled to the consciences
even of persons whose previous lives have been without
reproach ; these are the considerations which prevent the
court from classing it among the grossly improbable
violations of moral duty; and therefore judges often pre-

1 Citing Reid's Essay on the Intel * Wait v. Bull's Head Bank, 19 X
lectual Powers, Chap. III. B. R. 501 ; Cox v. Cox, 39 Kan. 121,

2 Sleeper v. Chapman, 121 Mass. 17 Par. Rep. 847.

404-409. 5Gumberg v. Treusch, L03 Mich.

3 Montgomery Web Co. v. Dienelt, 543,61 N. W. Rep. 872.
133 Pa. St. 585, 19 Atl. Rep. 428. " See § '2.

26

402 BADGES OP FRAUD. § 225

sume it from facts which may seem slight.1 " Fraud,"
says the Supreme Court of Iowa, "cannot always be
shown by direct evidence, but is usually proved by circum-
stances. Neither can the knowledge of or partici-
pation in fraudulent designs and transactions be
proved in many cases except by circumstances."2
The very charge of fraud "implies color and dis-
guise, to be dissipated by indicia alone." : The signs
or earmarks of fraud instanced in Twyne's Case4 have
already been given,5 and should be kept fresh in the
memory of parties interested in this class of litigation.
Mr. Roberts says, that the general conclusion to be
derived from this remarkable case is "that evidence of
the fraudulent intent supersedes the whole inquiry into
the consideration, for no merit in any of the parties to
a transaction can save it if it carries intrinsically or extrin-
sically the plain characters of fraud." ' 1 1 may be observed
that extrinsic proof of fraud can rarely be found unless it
be in cases where the possession of a debtor contradicts
'' the visible purport of an absolute conveyance."

§ 225. Badges of fraud denned — Badges of fraud are
suspicious circumstances that overhang a transaction,7
or appear on the face of the papers.8 The possible indicia
of fraud are so numerous9 that no court could pretend
to anticipate and catalogue them."1 A single one may

1 Goshorn v. Snodgrass, 17 W. Va. 'Roberta on Fraudulent Convey-
ances, 546.
•Craig v.Fowler. 59 Iowa 203, 13 ' Eelms v. Green, 105 N. C. 265, II
N. W. Rep. 116. S. E. Rep. 170.

Water bur j v. Sturtevant, 18 8 Douglass Merchandise Co. v. Laird,
Wend. (N. Y.) 853, 362, per Co wen, J.; 37 W. Va. 687, i; S. E. Rep. 188.
King v. Moon, 42 Mo. 555. "See Bank v. Gilmer, 116 N. C.

; ■■ Rep 80, 2 1 !oke 212). See Davis 685. 22 S. E. Rep. 2.

bwartz, 155 U S. 639, 15 S. C "> Phinizj v. Clark, 62. Ga. 623-627;

!■'• p Hickman v. Trout, 83 Va. 191, 3 S. E.

Rep. i::i : Newman v. Kirk, 45 N. .).
Eq. 686, 18 All. Rep. 224.

§225

B UH.I.s ( if FRAUD.

[03

stamp the transaction as fraudulent, and when several are
found in combination, strong and clear evidence on tin-
part of the upholder of the transaction will be required to
repel the conclusion of fraud.1 " Badges are as infinite in
number and form, as are the resources and versatility of
human artifice." 2 The statutes of Elizabeth produce the
most beneficial effects, by placing parties under a dis-
ability to commit fraud in requiring for the characteristics
of an honest act such circumstances as none but an honest
intention can assume.3 A badge of fraud was said by
Chief-Justice Pearson, in Peebles v. Horton,4 to be " a
fact calculated to throw suspicion on the transaction,"
and which "calls for explanation."5 Substantially the
same language is used by Elliot, J., in Sherman v. Hog-
land.0 So in Pilling v. Otis,7 the court, in construing the

1 Hickman v. Trout, 83 Va. 491, 3
S. E. Rep. 131.

2 Shealy v. Edwards, 75 Ala. 411,
417.

3 McKibbin v. Martin, 64 Pa. St.
356; Avery v. Street, 6 Watts (Pa.)
274.

* 64 N. C. 376 ; Shealy v. Edwards,
75 Ala. 417 : Terrell v. Green, 11 Ala.
213; Hickman v. Trout. 83 Va. 491,
3 S. E. Rep. 131.

5 In Hickman v. Trout, 83 Va. 491,
3 S. E. Rep. 131, the court says:
" Certain circumstances are often
referedto as indicia of fraud, because
they are usually found in cases where
fraud exists. Even a single one of
them may be sufficient to stamp the
transaction as fraudulent. When
several are found in the same transac-
tion, strong and clear evidence will be
required of the upholder of the trans
action to repel the conclusion of
fraudulent intent. In the case here,
.... quite a number of the usual
badges of fraud are found grouped
together and left unexplained. These

are : gross inadequacy of price ; do
security taken for the purchase-
money; unusual length of credit for
the deferred instalments ; bonds taken
payable at Ion- periods, when the
pretence is that the deferred instal-
ments evidenced by them had already
been satisfied in the main by ante-
cedent debts due by the obligee to the
obligor : the conveyance made in pay-
ment of alleged indebtedness of
father to son, residing together as
members of one family: the indebt-
edness and insolvency of the grantor,
and well known to the grantee; the
threats and pendency of suits: the
secrecy and concealmenl of the trans-
action ; keeping the deed unacknowl-
edged and unrecorded tor over a
year; grantor remaining in posses-
sion as before the conveyance, and
cautioning the kinsman justice, who
took the acknowledgment, to keep
the matter private, and the relation
between grantor ami grantee."

" 7o I nd. lot.
' 13 Wis. 195.

404 • BADGES I 'I- FRAUD. § 225

meaning of the expression "badge of fraud" as used in
the charge of a judge, said : " It docs not mean that the
evidence must be conclusive, nor that it must require the
jury to find fraud, but only that it is one of the signs or
marks of fraud, and has a tendency to show it. There
may be great difference in the weight to which different
facts, constituting; badges of fraud, are entitled as evi-
dence. One may he almost conclusive, another furnish
merely a reasonable inference of fraud. Yet both would
be badges of fraud, and either might be so explained by
other evidence as to destroy its effect. The books
accordingly speak of strong badges and slight badges of
fraud, of conclusive badges, and badges not conclusive,
meaning by the word ' badge' nothing more than that the
fact relied on has a tendency to show fraud, but leaving
its greater or less effect to depend on its intrinsic
character." The expression is used "to distinguish the
lighter grounds on which fraud may be established " as
distinguished from the cases where the fraud is apparent
upon the lace of the instrument and necessarily involves
its invalidity.1 The circumstances which the law con-
siders badges of fraud, and not fraud perse, should, as we
shall see, be submitted to the jury, so that they may draw
their own conclusions.'-' Where, then, a creditor shows
indicia, or badges of fraud, the burden rests on the
grantee to repel the presumptions which the facts so
shown generated.8 It may here be observed that when
the consideration for the transfer is clearly established,
and tin- transaction is in effect a preference, it will not be
'ted by any weak, foolish, or even criminal conduct in
the way of an attempt to sustain tin; case by manu-
factured evidence.*

Bun-ill 011 Assignments, § :J46. 'Mill v. Bowman, 35 Midi. 191,

1 10 T< 133. per Cooley, < '. J.

1 1. 11 pll \. Mitchell, ill Ala. 270

§§226,227 QUESTION FOR THE URN". (.05

>J 226. Question for the jury. — The question of fraud in a
transfer must usually be submitted to a jury,' save in a
few cases where the transaction is manifestly fraudulent
upon its face. The distinction between legal and equit-
able jurisdiction as to this has already been pointed
out ;3 and where the suit is in its nature purely equitable,
the judge or chancellor is responsible for the decision,
though, of course, he may secure the aid of a jury to pass
upon framed issues.'5 Otherwise the jury must he per-
mitted to consider and draw their own inferences from
badges of fraud, and the court should not interfere to
formulate conclusions for them.1 To say that badges of
fraud "constitute fraud in themselves, would be to carry
the doctrine beyond the limits of reason or authority,
and to shut out the light of wisdom and truth." 5 Where
the entire suit is tried by and submitted to the court,
without the aid of a jury, as is frequently the case in
equity, the same consideration and effect should be given
by the court to badges of fraud as though ajury had
been summoned.

§ 227. Circumstantial and direct evidence.— Circumstantial
evidence is often the only kind of evidence of which the
case admits.0 In Kempner v. Churchill ~ it appeared that
the purchaser said to the debtor : " You had better not
delay this matter. You had better let me have the goods

'Weaver v. Owens, 16 Ore. 304, Herkelratli v. Stookey, <;:'. III. 486;

18 Pac. Rep. 579; State v. Mason, 112 Kin- v. Russell, 40 Tex. 183.

Mo. 374, 20 S. W. Rep. 629 ; McKel- ' Wilson v. Lott, 5 Fla. 316.

lar v. Pillsbury, 48 Minn. 396, 51 N. 6 Bartletl v. Cleavenger, 35 W.Va.

W. Rep. 222 ; Ferris v. McQueen, 94 719, II S. E. Rep. 273; Goshonfs

Mich. 367, 54 N. W. Rep 164 ; Ladnier Ex'r v. S Igrass, IT W. Va. ?H

v. Ladnier, 64 Miss. 373, t So. Rep. Reynold's Admr. v. Gawthrop, 37 W.

492. Va. L3, 16 S. E. Rep. 364 : Davis S. M.

2 See§ 51. Co. v. Dunbar, 29 W. Va. 617, 622, 2

3Dunphy v. Kleinsmith, 11 Wall. S. E. Rep. 91.

615. 7 8 Wall. 369.

4 Leasure v. Coburn, 57 End. 274 ;

FICTITK »US CONSIDERATE IN.

§ 228

and put the money in your pocket, and let the creditors
go to the devil." The circumstantial evidence which was
held ample to confirm this direct evidence of fraud was
as follows : First, false receipts given for full value on
Saturday ; second, account of stock made out on Sun-
day ; third, removal of the goods into a cellar on Mon-
day. " It is true the fraud must be in the inception of
the transaction, but the subsequent acts of the parties are
calculated to explain the motives which actuated them
in the beginning, and give tone to the then original
purpose." '

£ 228. Recital of fictitious consideration. — Let us now pro-
ceed to consider more minutely the particular circum-
stances and surroundings of a transaction which constitute
badges of fraud, or awaken suspicions or create presump-
tions of the existence of fraud.

A false statement of the consideration of a mortgage, a
or of a conveyance3 or transfer,4 or the creation of a

• Adler v. Apt, 31 Minn. 348, 350.

See Bungerford v. Earle, 2 Vein. 261;

Blennerhassetl v. Sherman, L05 U. S.

100; Blackmail v. Preston, 24 111. App.

24<i : Coates v. Gerlach, 44 Pa. St. 43.

' United States v. Griswold, 7 Saw-

yer 306 . Stinson v. Hawkins, 16 Fed.

Rep. B50; Patrick v. Riggs, in.-) Midi.

616 Lynde v. McGregor, 13 Allen

Mass.) 179 . McKinster \. Babcock, 26

N. V. 38*2 : Weeden v. Bawes, 10

I '..mi :>o ; Units v. Peacock, 2:; Wis.

v.i Blakeslee v. Rossman, 43 Wis.

123 ; Mason v. Franklin. 58 la. 507,

12 N. W. Rep. 554 ; Ferris v. McQueen,

in Mich. ::»;:. :,i N. w. Rep. 164:

Sanson <. Bean. 51 Minn. 546, 53 N

w Rep 871 . Rice v. Morner. 64 Wis.

• N. W. Rep. 668; Beintze v.

Bentley, ;;i \. .1 Eq 562 ; Benrj v.

Barrell, :.i Ark 569, 228. W. Rep.

1 . Berringlon, 7 Ala. 1 12 ;

• us, 71 I ml. 459 : < lordes \ .

Straszer, 8 Mo. App. 61 ; Venable v.
Bank of U. S., 2 Pet. 112, per Story,
J.; King v. Bubbell, 42 Midi. 599, 4
N. W. Rep. 440; per Cooley, J. If
the actual amount of the debt in-
tended to be secured by a deed of
trust is more than the actual value of
I lie property, it is immaterial that the
deed recites that it is given to secure
a Larger amount than is actually due.
Sawyer v. Bradshaw, 125 111. 440, 17
N. F. Hep. 812. See Keith v. Proctor,
8 Baxt. (Tenn.) 189 ; Shin-as v. Caig,
7 Cranch 50; Dobson v. Snider, 70
Fed. Hep. 10; Davis v. Schwartz,
155 U. S. 644, 15 S.
Wood v. Scott, 55 la.
Rep. 465; Taylor v
la. 562, 24 N. W. Hep. 40.

:; Benne v. Schnecko 100 Mo. 2*>0,
13 S. W. Rep. 82.

1 Peebles v. Borton, 64 X. <\ 374 ;
Enders v. Swayne, 8 Dana (Ky.) 105 ;

C. Rep. 237 ;
111, 7 N. W.
Wendling, 66

§228

i M ruious 1 1 >nsii ii:k.\ rit i\.

407

fictitious or exaggerated ' indebtedness,2 or a misleading
statement as to an encumbrance3 is a badge of fraud, and
is a proper element for the consideration of the jury in
determining the bona fides of the transaction.1 Such a
recital does not usually render the instrument voider
se,s and in some instances the transaction will be allowed
to stand for the amount of the consideration given,8 and
will be void only for the excess 7 So the issuing of an
execution for an excessive amount will, in the absence of
bad faith, avail the plaintiff to the extent of the debt
remaining due.8 It may be observed here that the
recital of the excessive consideration must be inten-
tional, and not the result of a mere mistake in computa-
tion,9 and both parties must have participated in the
fraudulent purpose.10 Hence, where a wife is ignorant

Thompson v. Drake, 3 B. Mon. (Ky.)
570 ; Foster v. Woodfin, 11 Ired. (N.
C.) Law 346; Gibbs v. Thompson, 7
Humph. (Term.) 179 ; Perry v. Hardi-
son, 99 N. C. 29, 5 S. E. Rep. 230;
Turbeville v. Gibson, 5 Heisk. (Tenn.)
565 ; Marriott v. Giveus, 8 Ala. 694 ;
Divver v. McLaughlin, 2 Wend. (N.
Y.)600; Newman v. Kirk, 45 N. J.
Eq. 677, 18 Atl. Rep. 224 ; Bartlett v.
Cleavinger, 35 W. Va. 719, 14 S. E.
Rep. 273 ; Benne v. Schnecko, 100 Mo.
250, 13 S. W. Rep. 82 ; Seger's Sons
v. Thomas Bros., 107 Mo. 644, 18 S.
W. Rep. 33 ; Harris v. Russell, 93
Ala. 59, 9 So. Rep. 541.

1 Kellogg v. Clyne, 54 Fed. Rep.
696, 4C. C. A. 557.

'2 Winchester v. Charter, 97 Mass.
140 : Newman v. Kirk, 45 N. J. Eq.
677, 18 Atl. Rep. 224.

3 Newman v. Kirk, 45 N. J. Eq.
687, 18 Atl. Rep. 224.

4 Miller v. Lockwood, 32 N. Y. 299 ;
Willison v. Desenberg, 41 Mich. 150,
2 N. W. Rep. 201; Lawson v.
Alabama Warehouse Co., 80 Ala.
343. Elliott, J., said, in Goff v.

Rogers, 71 Ind. 461: " There are no
cases, however, that we have been
able to find, going so far as to hold
that a mortgage is to be conclusively
presumed fraudulent from the bare
fact that it purports, on its face, to
secure a sum in excess of the debt
really due. The farthest thai any of
the cases go. except those based on an
express statute, is to hold that the
fact that a mortgage expresses on its
face an amount materially greater
than the true amount of indebtedness,
is a badge of fraud."

5 Frost v. Warren, 42 N. V. 207;
Barkow v. Sanger, 47 Wis. 505,3 N.
W. Rep. 16 ; Cole v. Yancey, 62 Mo.
App. 234.

• Coleyv. Coley, 14 N.J. Eq. 854.

"Davenport v. Wright, 51 Pa. St.
292. See g§ 192, 195.

8 Harris v. Alcock, 10G. <& .1 (Md
227.

9Kalk v. Fielding, 50 Wis. 340, 7
N. W. Hep. 296.

10 Carpenter v . Muren, 42 Barb. (N.
Y.) 300. See £199.

408 FICTITIOUS CONSIDERATION. §228

and innocent of fraud, the insertion of an inaccurate or
untrue recital in a settlement will not vitiate it.1 An
immaterial misrecital will not be regarded.2

It is not our purpose, however, to lead the reader to
consider an exaggerated or false recital of consideration
as an unimportant factor in proving- fraud. Far from it.
In Hawkins v. Alston,3 Chief-Justice Ruffin forcibly
said : " No device can be more deceptive and more likely
to baffle, delay, or defeat creditors, than the creating
incumbrances upon their property by embarrassed men,
for debts that are fictitious or mainly so. The false pre-
tense of a debt, or the designed exaggeration of one, is
an act of direct fraud." Mr. May observed, that the fact
that confession of judgment " covers more property than
is necessary, for satisfying the debt, is a suspicious cir-
cumstance." 4 Sharswood, J., declared that "a judgment
confessed voluntary by an insolvent or indebted man for
more than is due, is prima facie fraudulent within the
statute of 13 Eliz. c. 5."5 Then, in Warwick v. Petty,0
it is asserted that a judgment laid upon property of a
debtor for more than was actually due and owing, is a
clear violation of the policy of the law, and is fraudulent,
and subject to attack by junior creditors.7 The judg-
ment, however, must be knowingly, intentionally, and

Kevan v. Crawford, L. R. 6 Ch. Tolputt v. Wells, 1 M. & S. 395;

Benton v. Thornhill, 7 Taunt. 149, 2

•Fetter v. Cirode, 4B. Mon. (Ky.) Marsh. 127; Hodgson v. Newman,

l-l ; Norris v. Lake, 89 Va. 518, 16 8. mentioned in Holbird v. Anderson, 5

B. Rep. 663 ; Schroeder v. Bobbitt, T. R. 236, 239.

108 Mo. 290, 188. W. Rep. 1093. In 5 Clark v. Douglass, G2 Pa. St. 415.

Keagj v. Trout, 85 Va. 399, 7 S. E. See Werner v. Zierfuss, 162 Pa. St.

Rep 829, the court says : " It Deed 860, 29 Atl. Rep. 737.

onlj be added thai the validity of a II \. J. Law 552.

deed of trust executed bona fide is ' Clapp v. Ely, 27 N. -J. Law 555.

no! affected bj the fad thai the Compare Sayre v. Hewes, 32 N. J.

amount of 1 be debl Becured is nol de- Eq. 652 ; Hoag v. Sayre, 32 N. J. Eq.

scribed with accuracy ." 552; Holt v. Creamer, 34 N. J. Eq.

1 [red. Eq (N. C.) 115. is; . Russell v. Wmne, 37 N. V. 596.

1 M.i . Fraud. < !onv. |». 88 ; 1 iting

§§229,230 ANTEDATING INSTRUMENT.

fraudulently obtained for a greater sum than was due.1
The same rule applies to a mortgage given lor more than
the amount actually due.3 A transaction which, on its
face, speaks an entirely different language from the real
one, will always be "viewed by the law with the highest
degree of distrust and disapprobation," 3 and will be " the
object of doubt and suspicion," ' though, as we have seen,
suspicion alone is insufficient to establish fraud."'

It results, then, from a review of the authorities, that
a false recital of consideration in an instrument, in the
absence of explanation, justifies a finding of fraud ; that
the misrecital must be intentional and not accidental, and
is subject to explanation ; and that the evil design must
be mutual ; otherwise the transaction will stand against
creditors except as to the, excess.

§ 229. Antedating instrument. — Antedating an instru-
ment seems to be regarded as an indicium of fraud,'' and
testimony tending to establish a fraudulent antedating of
a paper is competent.7 Antedating a mortgage, though
very improper, does not, however, affect a mortgagee
who is not privy to it.8 It may be remarked that the
date of a deed is not generally regarded as an essential
part of the instrument ; it may be good with an impos-
sible date, or have no date; and though the date is prima
facie evidence of the time of delivery, it may be con-
tradicted.

§ 230. Description of the property. — A suspicion or
inference of fraud is sometimes predicated of a loose and

■Fairfield v. Baldwin, 12 Pick. 8 Ayres v. Husted, 15 Conn. 513.

(Mass.) 388 : Davenport v. Wright, 51 4 Pickett v. Pipkin, 64 Ala. 520

Pa. St. 293. Compare Peirce v. Part Sec §§ 5, <i.

ridge, 3 Met. (Mass.) 4-1; Felton v. "Wright v. Hencock, 3 Munf. (Va.)

Wadswortli, 7 Cush. (Mass.) 589 521. Bui compare Patterson v. Boden-

- Hanson v. Bean, 51 Minn. 546, 53 hamer, 9 lied. (N. ( '. 1 Law 96.

N. W. Rep. 871: Stuart v. Smith ' Moog v. Benedicks, 49 Ala. 513.

(Tex. Civ. App.. A pi. 5, 1893)21 S. W. s Lindle v. Neville, 13 S. & R (Pa.)

Rep. 1026. 228.

410 CONVEYANCE OF WHOLE ESTATE. §23]

vague description of the goods or property conveyed.
•• All the entire stock of goods in the possession of the
said Lee, in his store in the city of Williamsburg," were
the words used in Lang v. Lee,1 and, in commenting
upon the case, the court said : " Does this look like a real
bona fide transaction ?" A clause in a mortage by which
after-acquired property was attempted to be covered, was
regarded as a feature for the consideration of the jury in
Gardner v. McEwen.2 So in a case in Tennessee,3 in
which the description in the conveyance was so indefinite
and general that it was impossible to designate the
property, this was considered a circumstance to be taken
into account by the jury as an evidence of fraud.4 Still,
it does not follow by any means that an imperfect
description of property in an instrument is of much
weight as a badge of fraud. Carelessness in the character
of the description in conveyances of realty, or in bills of
sale, or mortgages of personalty, is very common in trans-
actions concerning the good faith of which no question
can fairly be raised. Misdescriptions are often the handi-
work of honest but blundering scriveners.

§ 231. Conveyance of whole estate.— Lowell, J., observes :
" I have often decided that the conveyance of the whole
property of a debtor affords a very violent presumption
of a fraudulent intent, so far as existing creditors are con-
cerned." r° In Bigelow v. Doolittle,0 however, the court

3 Eland. 1 Va.) 423. Fredericks, 16 N. J. Eq. 2<i7 ; ('lurk v.

19 N. ?. 125. Wise, 39 How. Pr. (N. Y.> !)7 : re-

Overton v. Holinshade, 5 Hoisk. versed, 40 N. Y. 612: MoneU v. Scher-

T.nn. 683 rick, 54 ill. 270; Redfield v. Buck, 33

157 Conn 328; Bradley v. Buford, Si I

In re Alexander, 4 N. B. I;. 181 (Ky.), 12; Reillj v. Barr, 34 W. Va.

born \. Snodgrass, 17 95, 11 s. E. Rep. 750; Benne v.

W Va. 717: Glenn v. Glenn, 17 Iowa Schnecko, 100 .M<>. 250, 13 S. W. Rep.

01 . Hartshorn v. Barnes, 31 Me. 82; Daugherty v. Daugberty, 104 Cal.

3arle \. Arnold, 7 R. I 582; 221. 37 Pac. Rep. 889; Karll v Kuhn,

Mitchell v. Mitchell, 42 8. C. 475, 20 38 Neb. 589, 57 X W Rep. 379.

H 1. Rep. 105; Zimmer v. Miller, 64 »36 Wis. 119. See r.islmp v. Steb-

00, 1 \tl Rep. 858;Sayre v. bins, 41 Bun (N. V.i 246.

§231 CONVEYANCE OF WHOLE ESTATE. |il

refused to charge that "the conveyance of the whole
property of a debtor affords a very violent presumption
of a fraudulent intent, so far as existing creditors arc con-
cerned." In sustaining the ruling the appellate court
observed that the generality of the conveyance was
merely a circumstance to be considered by the jury in
connection with all the other facts of the case, in deter-
mining whether or not the sale was fraudulent. Lyon, J.,
said: "Under some conditions the jury might regard
such conveyance as raising a very violent presump-
tion of fraud, while under other and different conditions
the jury might properly determine that it was but a slight
indication of a fraudulent intent." 1 Such a transfer
must, however, be regarded as altogether unusual and
extraordinary. The instances in which such transactions
would occur in the usual course of business are very infre-
quent, and when the alienation proceeds from an embar-
rassed debtor, it creates a presumption of dishonesty and
fraud.3 The transfer, however, is not to be declared void
as matter of law under such circumstances. Hence a
sale by an insolvent debtor of all his real and personal
estate, taking back notes payable in six, twelve and
eighteen months, is not per se fraudulent ; to avoid it
there must be a finding of an actual fraudulent intent."
When questions of relationship intervene, the motive for
making these absolute conveyances becomes important.
Hence where, pending a suit, a debtor transferred all his

1 Bigelow v. Doolittle, 36 Wis. 119; the burden in such eases to prove

s. P. Kerr v. Hutchins, 46 Tex. 389- that such debt was not a bona fide

390. one is on the creditor. Basie v. Con-

8 See Bibb v. Baker, 17 B. Mon. nor. 5:', Kan. 71:'., :,7 Pac Rep. 128

(Ky.), 305; Wbeelden v. Wilson, 44 But see contra, Lehman v. Green hut,

Me. 30; Hughes v. Roper, 42 Tex. 126; 88 Ala. 47s, 7 So. Rep. 299.

Ex parte Ames, 1 Low. 501, 1 Fed. 'Clark v. Wise, 16 N. Y 612. See

Cases, 746; Beels v. Flynn, 28 Neb. Bigelow v. Doolittle, 36 Wis. 119;

580, 44 N. W. Rep. 732. Itisotherwise Alton v. Harrison, I.. R. 4 Ch. A.pp.

where the conveyance is made to a 626. Compare Bank of Ga. v. Big

creditor in payment of a debt, and ginbottom, 9 Pet. 61.

412 CONVEYANCE OB WHOLE ESTATE. .^-31

property, save that which was exempt, to his wife, and
hired out to her for his "board, clothing and lodging,"
the transaction was held to afford grounds for suspicion,
and to call for satisfactory proof of good faith and fair
consideration.1 Commenting upon the effect of the gen-
erality of the gift, Mr. May says'- that it is, "when taken
in conjunction with other circumstances, a mark of fraud3
for dolus versatur in generalibus ,A yet it is no concluding
proof either under this statute (13 Eliz. c. 5) or by the
common law.""' Then, as we have seen6 in Twyne's
Case, the very first mark of fraud specified was " that the
gift was general, without exception of the donor's apparel,
or of anything of necessity." Chief-Justice Marshall, in
the leading- case of Sexton v. Wheaton,7 observed :
" The proportional magnitude of the estate conveyed
may awaken suspicion, and strengthen other circum-
stances ; but, taken alone, it cannot be considered as
proof of fraud." Among the prominent badges of fraud
affecting a conveyance as to subsequent creditors ma)' be
mentioned the contracting of debts, and engaging in a
hazardous business or speculation, with the intention of
shouldering the risk of loss upon creditors. The cases
and principles appertaining to this subject have already
been considered/ To this class of evidence McCrary, J.,
adds another badge, viz.: " The fraudulent disposition of
the remaining estate of the grantor verv soon after the

Dresher \. Corson, 23 Flan. 313; 'Citing Twym 3 Rep. 81a :

Booher \. Worrill, ■",: 6a. 235. See Stone v. Grubham, 2 Bulstr. 225.

- 1 Sting Chamberlain v. Twyne, F.
■a Fraudulent Conveyances, Moo 638; Nunn v. Wilsmore, 8 T. R.

[nglise v. Grant, •""> T. I;. ->:;<»:
Citing Chamberlain v. Twyne Meux v. Bowell, 4 Easl 1; Janes v.
. 1 Moo. 638; Stile- Whitbread, 11 < '. 1'.. 166; Alton v.
man v. Aahdown, 2 Atk. 477; Mathews Harrison, L. Ft 1 Ch. App. 622;
580 . Ware Evans \. Jones, 11 Jur. | N. S. 784
irdner, 1.. I: 7 Eq. :;17. S
Blennerh Sherman, 10513 S. ' 8 Wheat. 229, 250.

»Se<- .7 96, 99, 100.

§§23ia, 232

CON'IIM I D l'< >SSESSI< 'N.

■I 1 5

conveyance."1 The conveyance of the greater part <>f

the assets of a partnership to a corporation formed by
the partners in consideration of the issue of stock was
held to constitute a badge of fraud where; it was made
immediately before an assignment.-'

§ 231a. Continued possession. — Continued possession by
the debtor of the property attempted to be conveyed is
a circumstance more or less potent as evidence that the
debtor retains some hidden form of interest." But an
agreement with the creditor made; at the time of. the de-
livery of the conveyance that the debtor should remain
upon the land to care for the stock kept thereon is not
necessarily fraudulent.4 Such a compact may be entered
into in perfect good faith and be susceptible of complete
explanation.

£232. Inadequacy of purchase price. — As has already
been shown, to enable a creditor to invalidate a sale of
property, tangible facts must be proved, from which a
legitimate inference of a fraudulent intent can be drawn
It will not suffice to create a suspicion of wrong, nor will
the jury be permitted to guess at the truth.5 Mere proof
of inadequacy of price by itself has been considered in-
sufficient to implicate the vendee in the fraudulent intent
or to impeach his good faith0 and inadequacy of consid-

' Burdick v. Gill, 7 Fed. Rep. 6(38.
670.

- Buell v. Rope, 6 App. Div, (N. Y.)
113, 39 X. Y. Supp. 475, cf.; First
Nat. Bank v. Wood, 86 Hun (N. Y.)
491, 33 N. Y. Sup].. 777.

■ See ('hap. XVII. Munson v. Ar-
nold, 55 Mich. 134, 20 N.W. Rep. 825;
Foster v. Knowles, 42 N. .1. Eq. 226, 7
At I. Rep. 290 ; Zimuier v. Miller, Q4
Md. 297, 1 Atl. Rep. 858 ; Cooper v.
Davison. Si; Ala. :!li7, 5 So. Rep. 650 ;

Second Nat. Bk. v. Yeatman, ■">:'. Md.
II:;.

1 stroii v. Swafford, si la. 695, 7 1
N. W. Rep. 1023.
See §§5, 6.

' Jaeger v. Kelley, 52 N. 5
See Sherman v. Bogland, 7-: [nd. 171 ;
McFadden v. Mitchell, 54 Cal. 629;
Mathews v. Reinhardt, I 19 III. 635, 37
N. E. Rep. 85 ; Shober v. Wheeler,
113 X.<\ 378, ISS. E. Rep. 328 ; Bierne
v. Ray, -; W. Va. 571, 16 S. E Rt p
804. See § 6.

414 INADEQUACY 01 PURCHASE PRICE. §232

eration, unless extremely gross,1 does not per se prove

fraud." It must appear that the price was so manifestly
inadequate as to shock the moral sense and create in the
mind at once, upon its being mentioned, a suspicion of
fraud8 It is even considered that, in the absence of
other evidence tending- to show fraud, the court would
not deem inadequacy of consideration sufficient to do so.4
In North Carolina it has been declared by recent decis-
ions that inadequacy of price, however gross, and whether
considered alone or in connection with other suspicious
badges, was only a circumstance tending to show fraud.0
Gordon, )., said : " Other things being fair and honest,
mere inadequacy of price cannot, of itself, beget even a
presumption of fraud, much less is it per sc fraudulent."6
Still, authority is abundant to the effect that where a
creditor or purchaser obtains the property or estate of an
insolvent debtor at a sacrifice or an under rate or value,
there is a strong and even violent presumption of a
fraudulent intent.7 Thus, where a first lien for $[,200011
a farm worth $13,000, was transferred for a consideration

1 Archer v. Lapp, 12 Ore 202. 6 Pac. ' Emonds v. Termehr, (in Iowa 92,

Rep. 672; Dawson \. Niver, L9 S. 1 '. W, II X. W. Rep. HIT. See Cavender

606; Lionberger v. Baker, 88M0. I">1; v. Smith, 8 Iowa 360 ; Boyd v. Ellis,

Witherwas v. Riddle, 121 III. 14."). 13 11 Iowa 97.

Rep. 545 : Shay v. Wheeler, 69 5 Bery v. Hall, L05 N. C. 154, 10 S.

Mich 254. 37N. W. Rep. 210; Math E. Rep. 903 ; Hank v. Gilmer, llfiN.

ews v. Reinhardt, 149 111. 635, 37 X. C. 684, 22 S. E. Rep. 2. bee Davis v.

1; Rep. 85. Getchell, 32 Neb. 792, 49 X. W. Rep.

Kenipner v. Churchill, 8 Wall. 369 776.

3e Rouett v Milner, 57 Mo. App. 50. » Schatz v. Kirker, 4 East. Rep.

1 lark \ Krause, 2 Mackey - 1 >. C.) (Pa.) Ill, 1 II.

566. In Liming v. Kyle, 31 Neb. 649, 48 'See She! ton v. Church, 38 Conn.

X. W. Rep. 170, it was held thai a 420; Bartles v. Gibson, IT Fed. Rep.

charge to the effeel thai if the de- 297;.Brown v. Texas Cactus Hedge

fendanl Bold g Is to paj biB lebts, Co., 64 Tex. 400 ; Stern Auction & C.

the transaction should be upheld irre- Co. v. Mason, 16 Mo. A.pp. ITT: Mer-

tive ol the adequacy or inade tensv Welsing, 8-1) Iowa 508, 52 N. W.

t|uacy of the consideration, was erro Rep. 362 ; Sommermeyer v. Schwartz,

• nn. Mm. Lit. In- Cm. v. 89 Wis. 66, 61 N. W. Rep. 311.
Smith, Hi Mo, 261, 22 S W. Rep. 623

§232

[NADEQTJ VCS i H PURCHASE PRK I .

415

of $400, this was considered evidence of fraud which must
be submitted to a jury.1 Again it is more strongly stated
in Davidson v. Little,2 that " the sale of lands or goods by
an indebted person for less than their value is ipso facto
a fraud in both vendor and vendee."3 Where the value
was $7,700, and the estimated consideration $1,537, 't
was held to be conclusively fraudulent.4 The difference
was regarded as "so great as to shock the common sense
of mankind, and furnish in itself conclusive evidence of
fraud."5 The question, however, is usually submitted to
the consideration of a jury,6 to determine the intent of
the parties,7 and is almost always linked with other
circumstances or indicia of fraud.8 Inadequacy of con-
sideration is a fact calling for explanation, and is often
treated as a badge of fraud.9 Insufficiency of price and
insolvency of a debtor, say the Supreme Court of Cali-
fornia, may be circumstances more or less potential in
the determination of fraud as a question of fact, but fail-
ure of consideration is not in itself sufficient to justify a
court in finding fraud as matter of law.10

1 Rhoads v. Blatt, 84 Pa. St. 32, 1
Am. Insolv. E. 45. A conveyance
by a husband to his wife of property
worth $5,000, subject to a mortgage
of $1,000, and for a consideration of
$1,000 additional, was set aside. Sand-
man v. Seaman, 84 Hun (N. Y.) 337,
32 N. Y. Supp. 338.

* 22 Pa. St. 252.

3 See Doughten v. Gray, 10 N. J.
Eq. 330.

4 Wilson v. Jordan, 3 Woods 642.
See Ratcliff v. Trimble, 12 B. Mon.
(Ky.) 32; Borland v Mayo, 8 Ala.
104 ; Prosser v. Henderson, 11 Ala.
484.

5 Hoot v. Sorrell, 11 Ala 400.
■Craver v. Miller, (55 Pa. St. 456.
'Motley v. Sawyer, 38 Me. OS.
"Hudgins v. Kemp, 20 How. 50.

9 See Fisher v. Shelver, 53 Wis.

498, ION. W. Rep. 681; Williamson
v. Goodwyn, 9 Gratt. (Va.) 503;
Laidlaw v. Gilmore, 47 How. Pr.
(N. Y.) 08 ; Hudgins v. Kemp, 2lJ
How. 50; Fuller v. Brewster, 53 Md.
361; Delaware v. Ensign, 21 Barb.
(N. Y.) 85; Ames v. Gilmore, 59 Mo.
537; Scott v. Winship, 20 Ga. 429;
Apperson v. Burgett, 33 Ark. 338;
Boyd v. Ellis, 11 Iowa 97 ; Barrow v.
Bailey, 5 Fla. 9 ; Loring v. Dunning,
16 Fla. 119; Bickler v. Kendall, 66
Iowa 703, 24 X. W. Rep. 518; Dout-
hitt v. Applegate, 33 Kan. 396, 6 Pac.
Rep. 575;Easum v. Pirtle, 81 Ky.
563 ; Steere v. Hoagland, 39 III. 264 ;
Stevens v. Dillman, 86 111. 233. See
Metropolitan Bank v. Durant, 22 N.
J. Eq. 35.

'o McFadden v. Mitchell, 54< !al 629 .
Jamison v. King, 50 Cal. 133. See

4 ' 6

TRANSFER PENDING SU1 I.

§ ?33

£233. Transfer pending suit. — The transfer of all, or,
according to some authorities, of a portion of a man's
goods during the pendency of a suit against him is a
mark of fraud.1 One of the circumstances specified in
Twyne's case'-' was that the " transfer was made pending
the writ."3 This fact usually induces the suspicion that
the conveyance was made to secure the property from
attachment or execution in the pending suit, and to hin-
der, delay, or defraud creditors.1 This inference may,
of cotirse, be rebutted."' In Ray v. Roe ex don. Rrown,6
the court said that the pendency of a suit was "one of
the many badges of fraud" which would induce a court
of equity to set aside a conveyance, or a jury to regard it
as covinous. In Shean v. Shay7 it is characterized as
" only one of the badges." The court further said :
" The deed may be shown to be fraudulent and void as
to creditors when no suit was pending to recover the debt
or damages when it was made."

Motley v. Sawyer, 38 Me. 68. In
Day v. Cole, 11 [owa 152, the court
-ay that where tli'1 incumbrances
upon realty, with the consideration
paid for its conveyance, very nearly
equal its reasonable value, the facl
that tin- consideration is small does
nol constitute a badge of fraud.

' Redfield & Rice Mfg. Co. v.
Dysart, ''.'J Pa. St. 63 ; Godfrey v.
Germain, .' 1 Wis. 416; Babb v.
Clemson, 10 S. >v I.'. (Pa. 1 \SA ;
Thompson v. Robinson, 89 Me. 53;
Ford v Johnston, 7 linn (N. Y.) 568;
I Ihited stall-, v. Lotridge, t McLean
246 : Thomas \ Pyne, 55 (owa -Is
7 N. W. !,'• haferman v.

O'Brien, 23 Md, 565; Crawford
■. Kni.- \ 50 U-i. 590 : Hartshorn v.
E hip - ::i Me. 99 ; Soden \ Soden,
::i \ .1. Eq 11:. : Bean \ . Smith, 2
Ma 1 '. .Man v. Statham

How. 1;; Stoddard \ Butler, 20
Wend. (N Y. 501 Booher v. Wor-

rill, 57 Ga. 2:5.-): Stewart v. Wilson,
12 Pa. St. 450; King v. Wilcox, 11
Paige iX. Y.) 589; Cole v. Millerton
Inn, Co., 133 N. Y. Mil. 30 N. E. Rep.
847 ; (Sri-gory v. Cray, ^* (ia. 172, 14
s. E. Rep. 187; Dent v. Ferguson,
132 I'. s. 50, 10 S. C. Rep. 13; Low
v. Wort man, 44 X. J. Eq. 200, 7 At I.
Rep. 654, 14 Id. 586; Christie v.
Bridgman, 51 X. J. Eq 334, 25 At I.
Rep. 939, 30 Id. 420: Morris Canal &

Banking Co. v. Stearns, 23 X. J. Eq.
110.

3 Rep. 80 : 1 Smith's Lea.. Cas. 33.
See ; 22

' See Merrill v. Locke, 41 X. II. 490;
Dorr v. Beck, 76 Hun (N. Y.) 540, 28
V Y Shim,. 200.

8 Sipe v. Earman, 26 Gratt. (Va.)
563. See Skipwith v. Cunningham,
8 Leigh 1 Va.)271.

»2 Blackf. 1 In. 1. 1 258.

1 12 I ml. 377.

§234 EVIDENCE OF SECRECY. 41 7

The pendency of a suit is a warning to a dishonest
debtor to make haste to alienate and cover up his assets.
While the service of process in a suit does not usually
create a lien upon the defendant's property, and the doc-
trine of lis pendens is limited in its application, yet trans-
fers pending a suit are justly scanned with very greal
suspicion ; and where it is certain that judgment would
be rendered against the vendor, and evidence of inade-
quacy of consideration is adduced, the courts will conclude
that the conveyance is colorable, and made with a view to
hinder, delay, and defraud creditors.1 Mr. May~ states
the rule to be that where the conveyance is made pendente
lite, it is, "when coupled with other circumstance, sugges-
tive of fraud, but where the consideration is adequate,
not a strong mark of a fraudulent intention." This, how-
ever, can scarcely be regarded, under the American
authorities, as giving this important element of proof its
proper weight.

§ 234. Evidence of secrecy.— An unusual degree of secrecy
observed between the parties in the making of the sale is
a badge of fraud ;3 and the secret removal of the property
immediately after the sale indicates a dishonest purpose.4
Circumstances indicative of concealment, or of a design
to give a man the appearance of possessing property
which he does not own, are evidences of fraud, and are

1 Jaffers v. Aneals, 91 111. 487,493. ance were it shown to have been

2 May's Fraudulent Conveyances, done directly or indirectly for the
p. 83. benefit of Schwartz; bul the goods

3 Fishel v. Ireland, 52 Ga. 632 ; seem to have been taken away in a
Stewart v. Mills Co. Nat. Bk., 76 Iowa sleigh by some of the clerks, who
571. 41 N. W. Rep. 318. See Callan took this method of paying them-
v. Statham, 23 How. 480; Corlett v. selves for the amounts due them for
Radcliffe, 14 Moo. P. C. 140. In Davis wages. * * *' There is no evidence
v. Schwartz, 155 U. S. 642, 15 S. C. to connect either Schwartz or the
Rep. 237, the court says : "The fact mortgagees with it."

that goods were spirited away front 4 Delaware v. Ensign, 21 Barb. (N.

the store on Sunday night would tin- Y.) 88.
doubtedly assume a serious import-
27

4i8

I VIDENCE I »1 SECRECY

§ 234

proper for a jury to weigh.1 Secrecy "is a circumstance
connected with other facts from which fraud may be
inferred. " a An agreement, however, to conceal the fact
of a purchase is not perse fraudulent, but is merely matter
of evidence in favor of avoiding- the sale, which, although
perhaps very strong, is still capable of explanation3 In
Haven v. Richardson,' the court said: " Secrecy is not
of itself evidence of fraud. It is likely to accompany
fraud, and may give force to other evidence, under par-
ticular circumstances." Thus it is held in Massachusetts
that an arrangement or understanding in regard to with-
holding mortgages from record until the mortgagors
should have trouble, did not render the mortgages void,
but was a matter entitled to consideration by the jury in
passing upon the question of fraud at common law.5 On
the other hand, an agreement that the transaction is to be
kept secret until the debtor has an opportunity of escap-
ing beyond the reach of process issued by his other cred-
itors, or by which the deed is not to be offered for record
until the other creditors threaten suit, will render it fraud-
ulent'1 Secrecy in such cases is a part of the considera-

l; »ss \. ( Irutsinger, ? Mo. 249 ;
I >obson v. Snider, 70 F< d. Rep. 10.

Warner \ Norton, 30 Bow. 460.
In Small \. Small, 56 Kan. 8, '.), 42
Pac. Rep. 323, thi court says: "Secrecy
is often « - ; * 1 1 • -< 1 a badge of fraud, bul it
i- not fraud itself. I f a man's dispo-
sit ion of his property is fair and law-
ful, the concealment of the trans-
action cannot render it fraudulent."

Gould v. Ward, I Pick. (Mass.)

104 Da) v. Q Ibar, 69 .Miss. 687 \-:

So. Rep. 80.

' 5 X. II. 127. See Blennerhassetl
v. Sherman, 105 is. 117.

Folsom \ Clemence, ill Mass.

1 houron \ Pearson, 29 V

.1 Eq eei v. < >'Brien, 30 W.

i Rep, 14 . Reynolds

v. Gawthrop. :57 W. Va. 3, 10 S. E.
Rep. 364 : White v. Benjamin, '■*> Misc.
(N. Y. )!!»(), 23 N. V. Supp. 981. Bui
where there is no evidence that any
one was induced to give credit to the
grantor on the faith of his apparent
ownership, the failure to promptly

register the deed was held to I E no

importance. Nadal v. Britton, 112 N.
C. 180, 16 s. E. Rep. 914. See Insur-
ance • '<». v. Shoemaker. 95 Tenn. 72,

::i s. W. Rep. 270. The presumption
of fraud arising from failure to record
is overcome by proof t hat the grantee
was an alien, ignoranl of the fact thai
registration was required. Tryon v.
Flournoy, so Ala. 321.

'See Hutchinson v. First Nat. Bk.,
I:;:; I ii< I 284, 30 N. E. Rep. 952; Blen-

§§ 234a, 23s

SECRET TRUST

419

tion ; the transaction is contaminated by it, and ought
not to be regarded as bona fide}

§ 234a. Secret trust.— Of course, any form of a secret
trust originating from the property of and created or
reserved for the benefit of the debtor, vitiates the transfer
as to creditors" entitled to attack it.3

§ 235. Suppression or concealment— Not recording — Subse-
quent fraud. — As long ago as the case of Hungerford v.
Earle,4 it was held that, " a deed not at first fraudulent
may afterwards become so by being concealed, or not
pursued, by which means creditors are drawn in to lend
their money." This doctrine has been repeatedly recog-
nized and reaffirmed indifferent forms in State and Fede-
ral tribunals.5 In Coates v. Gerlach0 it appeared that a
deed of land had been made by a husband directly to his
wife. The deed was dated March 23, 1857, but was not
filed for record until December 2, 1857, over eight months

nerhasset v. Sherman, 105 U. S. 100 ;
Hilliard v. Cagle, 46 Miss. 309 ; Stock
Growers' Bk. v. Newton, 13 Col. 245,
22 Pac. Rep. 444 ; Putnam v. Rey-
nolds, 44 Mich 113, 6 N. W. Rep. 198
Folsom v. Clemence, 111 Mass. 273
Stewart v. Hopkins, 30 Ohio St. 502
Dickson v. McLarney, 97 Ala. 383, 12
So. Rep. 398.

1 Hafner v. Irwin, 1 Irerl. (N. C.)
Law, 499. Mr. May regards secrecy
as always evidence, but not of itself
conclusive evidence of fraud. May's
Fraudulent Conveyances, p. 83. See
Griffin v. Stanhope, Cro. Jac. 454
Worseley v. Demattos, 1 Burr. 467
Leonard v. Baker, 1 M. & S. 251
Corlett v. Radcliffe, 14 Moo. P. C. 139.

9 Bostwick v. Blake, 145 111. 85. 34
N. E. Rep. 38 ; Plimpton v. Goodell,
143 Mass. 367, 9 N. E. Rep. 791 : Plun-
kett v. Plunkett, 114 Ind. 484. 16 N.
E. Rep. 612, 17 Id. 562; Pattison v.
Letton, 56 Mo. App. 331 ; Vietor v.

Levy, 72 Hun (N. Y.) 263, 25 X. Y.
Supp. 644.

3 It was not regarded as a secret
trust as to subsequent creditors for a
debtor to provide a home for his fam
ily by a conveyance, through a third
person, to his wife, but this case is
certainly on the border line. Edgerly
v. First Nat. Bk., 30 111. App. 425.

4 2 Vera. 261.

5 Hildreth v. Sands, 2 Johns. Ch.
(N. Y.) 35 ; Scrivenor v. Scrivenor, 7
B. Mon. (Ky ) 374 ; Bank of the U.S.
v. Housman, 6 Paige (N. YT. t 526;
Beecher v. Clark, 12 Blatchi
Blennerhassett v. Sherman, 105 U. S.
100; Coates v. Gerlach, 4 1 Pa. St. 48 ,
Hafner v. Irwin, 1 Ired. (N. C.) Law
490 ; Blackman v. Preston, 24 III. App.
240. See Hildeburn v. Brown, 17 B.
Mon. (Ky.) 77!); Thouron v. Pearson,

29 N. .1. Eq.487 ; Stewart v. Bopkins,

30 Ohio St. 502.

6 44 Pa. St. 43, 46.

420 SUPPRESSION OR CONCEALMENT. §235

thereafter. On January 21, 1858, the husband, professing
to act as the agent of the wife, effected a sale of the lands
to a third part)-. The creditors of the husband attached
the moneys in the hands of the vendees, and a contest
arose as to which had the better right to the proceeds of the
sale. Touching this controversy, Strong, J., said : "There
is .mother aspect of this case, not at all favorable to the
claim of the wife. It is that she withheld the deed of
her husband from record until December 2, 1857. In
asking that a deed void at law should be sustained in
equity, she is met with the fact that she asserted no right
under it ; in fact, concealed its existence until after her
husband had contracted the debts against which she now
seeks to set it up. There appears to have been no aban-
donment of possession by the husband Even if

the deed was delivered on the day of its date, the supine-
ness of the wife gave to the husband a false credit, and
equity will not aid her at the expense of those who have
been misled by her laches." i In Blennerhassett v. Sher-
man," Woods, J., in delivering the unanimous opinion of
the United States Supreme Court, observed : " Hut where
a mortgagee, knowing that his mortgagor is insolvent,
for the purpose of giving him a fictitious credit, actively
conceals the morteaee which covers his entire estate and
withholds it from the record, and while so concealing it
represents the mortgagor as having a large estate and
unlimited credit, and by these means others are induced to

DfcWilliams v. Rodders. .Vi rord. In Jeffrey v. Brown, 2\) IV<I.

Ala, ST. Rep. 481, thecourl said : " The niort-

• 105 r. S. 11T; Saner v. Behr, 49 gages to all the relatives of the de-

M" X 1 - 1 • . s»'> ; Wafer v. Harvey Co. faulting linn .... were recorded

Bk., Mi Kan. 598, '.'<; Pac Rep 1032. October lltli. three days before the

Sternbach v. Leopold, 50 111 A.pp. assignment. The suppression of these

176; Baker v. Pottle, is Minn. 479, mortgages until this critical moment

51 N W. Rep. 388 ; Dobsoa \ Snider, is a badge of fraud as to creditors,

'■" 1 • 1 R< p. 11 In iIm- latter case it and they will be denied validity and

id that forgetfulness maj be ac- effectiveness as linns upon the prop-

cepted 1- an excuse for failure t<> re- erty of debtors."

§ 236 I'A 1 1 il M 1 \IH NDE. 42 I

give him credit, and lie fails and is unable to pay the
debts thus contracted, the mortgage will be declared
fraudulent and void at common law, whether the motive
of the mortgagee be gain to himself or advantage to his
mortgagor." ] But there must be some evidence of a
preconcerted and contrived purpose to deceive and
defraud the other creditors 8 of the mortgagor, of which
scheme the withholding of the instrument from the record
constitutes a part. The non-filing of the deed is a cir-
cumstance to be considered on the question of fraud.11
It is said in Curry v. McCauley : l "When the mortgage
was executed and delivered nothing further was necessary
to its validity as a complete transaction. It has, there-
fore, been held in Pennsylvania, by a long series of deci-
sions, that, as between the parties, a mortgage takes effect
upon delivery, and that an unrecorded mortgage is good
against an assignee for the benefit of creditors." So it is
decided that new creditors cannot follow the proceeds of
a sale of property made under the undisclosed security.6

§ 236. Evidence aliunde.— In a controversy which arose in
Mississippi6 it was decided that a deed of trust in the

1 In cases where the statute re- Sav. Bank v. Buck, 123 Mo. 153, 2? S.
quires that a deed should be recorded W. Rep. 341; Second Nat. Bk. v.
within a certain period, and the gran- Merrill, 81 Wis. 142, 50 N. W. Rep
tee neglects so to record it, a cred- 503; Tryon v. Flouruoy. 80 Ala. 321.
Ltor of the grantor may pursue the 3 Day v. Goodbar, 69 Miss. 690, 12
ostensible title of the grantor, even So. Rep. 30 ; Klein v. Richardson, 04
though it may not be the real title of Miss. 41, 8 So. Rep. 204 ; Dobsou v.
the debtor. Nelson v. Henry, 2 Snider, 70 Fed. Rep. 11 ; Stock Grow-
Mackey (D. C.) 259. The creditor ers' Bank v. Newton, 13 Col. 256 ; Haas
must not, however, lose sight of the v. Sternbach, 150 111. 14. 41 N. E.
general rule that a judgment is not Rep. 51 ; Mull v. Dooley, 89 Iowa 312,
usually good against an unrecorded 56 N. W. Rep. 513.

conveyance. If the conveyance is 4 20 Fed. Hep. 584.

made with a fraudulent design the ' W. O. Tyler Paper Co. v. Orcutt-

mere recording of it will not make it Killick Lith. Co., 35 111. App. 502 ;

valid. Carver v. Barker, 73 Hun (N. Field v. Ridgelj , 116 111. 424, G N. E.

Y.), 418, 26 N. Y. Supp. 919. Rep. 156.

2 See Hegeler v. FirstNat. Bk., 129 8 Hilliard v. I lagle, 46 Miss. B09.
111. 157, 21 N. E. Rep. 812 ; State

422 CONCI \l MENT. § 237

nature of a mortgage, valid on its face, and not made or
received with any intent to defeat existing or future cred-
itors, may nevertheless be held to be fraudulent and void
as to all creditors, existing and future, by evidence aliunde
showing the conduct of the parties in their dealings in
reference to the deed. The principal circumstances relied
on in this case to avoid the deed were the facts that the
grantor retained possession of the property, and that the
deed was withheld from record. This enabled the mort-
gagor to contract debts upon the presumption that the
property was unincumbered. The court said : " The
natural and logical effect of the agreement and assign-
ment, and the conduct of the parties thereto, was to mis-
lead and deceive the public, and induce credit to be given
to Baggett [the mortgagor], which he could not have
obtained if the truth had been known, and therefore the
whole scheme was fraudulent as to subsequent creditors,
as much so as if it had been contrived with that motive
and for that object." '

i 237. Concealment in fraud of bankrupt act.— In Blenner-
hassett v. Sherman,' a very important case, reviewing the
authorities concerning suppression and concealment of
transfers, the court held that a mortgage executed by an
insolvent debtor with intent to give a preference to his
creditors, was void under the bankrupt act. It appeared

'.ill v. Griffith, 2 Mil. Ch. the last renewal upon record, to the
Dec -J7<). In this rase fche court de- prejudice of the other creditors who
d thai a part] could not be per- had trusted the debtor on the strength
mitted to take for bis own securitya of the possession and ostensible owner-
hill of sale or mortgage of chattels si up of the mortgaged property. The
from another, leaving the mortgagor mortgage which was in controversy
at his request in possession and osten- was declared void, and the decree
Biblj the owner, and keep the public was affirmed on appeal. See, further,
from a knowledge of the existence of Bafner v. Irwin, 1 Ired. (N. C.) Law
the mortgage bj withholding it from 490; Worseley v. Demattos, 1 Burr.
record for an indefinite period, renew- 107; Tarback v. Marbury, 2 Vern.
ing 1! periodically, and then receiving •"> 1 0 ; Neslin v. Wells, 104 U. 8. 428.
the benefit of the security by placing • 105 U. S. 100-121.

§ 238 ABSOLUTE t'o\\ EYANCS. [2 j

that the creditor had reasonable grounds to believe the
mortgagor insolvent, and knew that the instrument whs
made in fraud of the provisions of the bankrupt act; and
that the mortgagee had, for the purpose of evading the
bankrupt law, actively concealed the existence of the
instrument, and withheld it from record for a period of
more than two months. The security was avoided, not-
withstanding it was executed over two months before the
filing of the petition in bankruptcy.1

£ 238. Absolute conveyance by way of security. — It is
familiar learning that a deed absolute on its face may,
despite the statute of frauds, be shown by extrinsic evi-
dence to be a mortgage,2 and that the relationship of
mortgagee and mortgagor with all the usual incidents may
thus be established. If, however, the transfer was not
devised by the debtor to defraud or delay his creditors,
or if it was so designed, and the trustee or mortgagee
afforded no aid in carrying out the intention of the prin-
cipal, the transaction is valid,3 though perhaps open to
suspicion.4 A conveyance by way of security must be in
all respects as clean and clear as a conveyance for perma-

1 The repeal of the Federal Bank- Stultz, 60 Ind. 170: MeCarron v. Cas
rupt Act renders unimportant the con- sidy, 18 Ark. 34 ; Kitts v. Wilson. ISO
sideration of cases arising exclusively Ind. 492, 29 N. E. Rep. 401 : Wrighl \ .
under its provisions. Mahaffey, 76 Iowa 96, 40 N. W. Rep.

2 Horn v. Keteltas, 46 N. Y. 605 ; 112 ; Kemp v. Small, 32 Neb. 318,49
Carr v. Carr, 52 N. Y. 251 ; Murray v. N. W. Rep. 169.

Walker, 31 N. Y. 399 ; McBurney v. 3 Stevens v. Hinckley, 43 Me. 411 ;

Wellman, 42 Barb. (N. Y.) 390; Reed v. Woodman, 4 Me. 400; Firs!

sub nomine Dodge v. Wellman, 43 Nat. Bank v. Jaffray, 41 Kan. 694,

How. Pr. (N. Y.) 427 ; Odell v. Mont- 21 Par. Rep. 242; Carey-Hallidaj

ross, 68 N. Y. 499; Hassam v. Bar- Lumber Co. v, Cain, 70 .Miss 628

rett, 115 Mass. 256; Henley v. L3 So. Rep. 239 ; Beidler v. Crane, 135

Hotaling, 41 Cal. 22 ; Sedg. and Wait 111. 92, 25 N. E. Rep. 655 : Ruse v.

on Trial of Title to Land, 2d ed., Bromberg, 88 Ala. 620, 7 So. Rep.

§337; Gayv. Hamilton, 33 Cal. 686; 384. Sec Pattisoti v. Letton, 56 Mo.

French v. Burns, 35 Conn. 359 ; Clark App. 325.

v. Finlon, 90 111. 245; Butcher v. * Smith v. Onion, 19 Vt. 129.

4-4

Al;Si (LUTE CONVEYAN< I .

§238

nent ownership.1 If no fraud was in fact intended, the
security may be enforced ; * but if the debtor made a
secret reservation,3 or the creditor comes into court with
a fraudulent claim of an absolute title,"4 other creditors
may avoid the transaction.5 Williams, Ch. J., said in
Barker v. French : 6 " Although it is true that a person
may take security for a debt by a deed absolute, or by a
bill of sale, when it was intended for security, yet there
should be no disguise, nor dissembling, nor falsehood;
and if the party claims an absolute purchase when the
sale was only intended for security, and thereby seeks to
protect from the creditors the property of the vendor, and
endeavors to conceal the true nature of the transaction, it
is evidence of fraud." Probably the weight of the better
authority and the sounder reasoning is to the effect that
an absolute conveyance by way of security is a badge of
fraud as regards creditors which may be removed by evi-
dence of an honest intent.7 It may be noted with refer-

1 Phinizy v. (Mark, 62 Ga. 623-627 :
Palmour v. Johnson, 84 Ga. 100, 10 S.
E. Rep. 500.

Gaffney's Assignee v. Signaigo, 1
Hill. 158 : Chickering v. Batch, 3 Sum-
ner 174; Smith v. Onion, 19 Vt. 427.
Lukins v. Ainl. •; Wall. 78. See
Oriental Bank v. Haskins, 3 Mete.
(Mass,

* Thompson v. Pennell, 07 Me. 162.
The law is settled in Alabama 1 hal
an absolute conveyance of lands
intended as 3ecurity for a debt, or, in
other words, designed to operate as a
mortgage, is fraudulent and void as
to existing creditors. The court say
that the parties may uol intend fraud,
there may be no actual intent to
hinder, delay, <»r defraud creditors,
because BUch is it- im-\ [table con-
sequence, the law condemns it. Sims
\ . < l-aines, <it Ala. 396. See Bryant v.
Young, 21 Ala. 264 ; Eartshorn v.
William^. :;i Ala. 1 19. To the Bame

general effect, see Ladd v. Wiggin, 35
X. EL 426, and cases cited. Compare
Prescott v. Hayes, 43 N. H. 593 ; Chen-
ery v. Palmer, 6 Cal. 122.

8 18 Vt. 460 ; Spence v. Smith, 34
W. Va. 697, 12 S. E. Rep. 828.

1 Ross v. Duggan, 5 Col. 85, 100 ;
Stevens v. Hinckley, 43 Me. 440;
Emmons v. Bradley, 56 Me. 333 ;
Moore v. Roe, 35 N. J. Eq. 90. See
Gibson v. Seymour, 4 Vt. 522 ; Co-
lumbia Bank v. Jacobs, 10 Mich. 349 ;
Harrison v. Trustees of Phillips Aca-
demy, 12 .Mass. 156 ; McClure v. Smith,
14 Col. 299, 23 Pac. Rep. 786; Puller
v. Griffith, 91 Iowa 632, 60 N. W. Rep.
247, citing the text ; Stralton v. Put-
ney, 63 N. H. 577.4 Atl. Rep. 876 ;
Watkins V. Arms. 04 N. H. 99, 6 Atl.
Rep. 92. In Connecticut a deed
intended as a mortgage is not valid
against attaching creditors, the de-
feasance not being recorded. Ives
v. Stone, 51 Conn. 446.

§ 238a EXCESS OF PROPERTY MORTGAGED.

ence to the law upon this subject, that an absolute
conveyance by way of security affords a convenient and
tempting cover for fraud upon creditors, and the tendency
to regard transactions of this kind with suspicion should
be encouraged. Where the security is corrupted with
fraud, not only can creditors secure it to be avoided,1 but,
as is elsewhere shown, the parties themselves can get no
relief,2 and in some courts a disposition is manifested to
declare void as to creditors absolute conveyances taken as
security.3 Certainly such conveyances are calculated to
mislead creditors.

§ 238a. Excess of property mortgaged. — The United
States Supreme Court recently declared that it was not
even a badge of fraud that a mortgage was made to cover
more property than would secure the debt due.4 In
Downs v. Kissam,5 Mr. Justice McLean said : " It is
no badge of fraud for a mortgage, which is a mere secu-
rity, to cover more property than will secure the debt
due. Any creditor may pay the mortgage debt, and pro-
ceed against the property." But the cases upon this
feature of the law are not entirely in harmony, and the
taking of greater security than is needed is a circum-
stance that is often considered,0 in connection with other
facts as bearing upon the intent and good faith of the
parties.

'Jones v. Light, 86 Me. 437, 30 Atl. King, 90 Iowa 345, 57 X. W. Rep.

Rep. 71. 8G4; Smith v. New York Life \n>. Co.

- Hassam v. Barrett, 115 Mass. 258. 57 Fed. Rep. 133 ; Smith v. Boyer, 29

3 Beidler v. Crane, 135 111. 98, 25 N. Neb. 76, 45 X. W . Rep. 265 : Thomp-
E. Rep. 655. son v. Richardson Drug Co., '■)'■'> Neb.

4 Davis v.Schwartz, 155 U. S. 641, 714. 50 X. W. Rep. 948; Showman v.
15 S. C. Rep. 2;;:. SeeMcKinney v. Lee, 86 Midi. 556. I!) N. \Y Rep. 578
Wade, 43 Mo. App. 152; Colbern v. Hardt v. Heidweyer, 152 U. S. 547, 14
Robertson, 80 Mo. 541 ; Grand Island S. C. Rep. 671 ; Kilpatrick-Koch D. G.
Banking Co. v. Costello, 45 Xeb. 139, Co. v. Strauss. 45 Neb. 793, 64 X. W.
63 N. W. Rep. 376. Rep. 223; Clinton Hill Lumber & Mfg.

5 10 How. 108. Co. v. Strieby, 52 N. .1. Eq. 571

6 See McKinney v. Wade, 43 Mo. Atl. Rep. 589.
App. 152; Lycoming Rubber Co. v.

tjn INSOLVENCY . § 239

§ 239. Insolvency. — Insolvency, as we have seen, does
not deprive the owner of the power to sell or mortgage
his property 1 to pay or secure his debts, whether to one
or more of his creditors.' Indebtedness or hopeless
insolvency is, however, an important element of proof in
marshalling badges of fraud to overturn a covinous trans-
action.3 The distinction between the right of existing
and subsequent creditors which, of course, has an import-
ant bearing upon this subject,1 is elsewhere considered.
The conveyance, to be fraudulent, should bear such a
ratio to the indebtedness as to tend directly to defeat the
claims of creditors.5 It is not necessary that the con-
veyance should leave the grantor entirely without prop-
erty, but the amount transferred and the part retained
are all circumstances to be weighed.0 A heavy indebt-
edness of the grantor, together with a sale to a relative,
of necessity form strong badges or indications of collusion
and fraud,7 but are not in themselves, unsupported by
other material facts, deemed conclusive proofs of fraud.8
Again, it is said that insolvency of the grantor, although
a circumstance which may be taken, together with other

•Singer v. Goldenburg, 17 Mo. 69 ; Blodgett v. Chaplin, 48 Me. 322 ;

A pp. 549 ; Sanger v. Colbert, 84 Tex. Clark v. Depew, 25 Pa. St. 509 ; Bar-

(568, 19 S. W. Rep. 863. row v. Bailey, 5 Fla. 9. Compare

•-' Crawford v. Kirksey, 50 Ala. 591; Cox v. Fraley, 26 Ark. 20; State ex

Stover v. Herrington, 7 Ala. 142; rel. Peirce v. Merritt, 70 Mo. 277;

Samuel v. Kittenger, 6 Wash. 261, Fuller v. Brewster, 53 Mil. 358 ; Earn-

38 Pac. Rep. 509. See §§ 52, 95. In- shaw v. Stewart, 64 Mil. 513, 2 Atl.

solvency of a corporation does not Rep. 734.

necessarily entitle stockholders to 4 See Chaps. V, VI.

secure ;i receiver. Denike v. N. Y. & 5 Clai'k v Depew, 25 Pa. St. 509.

Rosendale I- A:. C <'<>., so N. Y. 599. 6 Citizens' ^at. Bank v. Hodges, so

Wail on Insolv. Corps. § 178. Hun (N. Y.) 471, 30 N. Y. Supp. 445 ;

Hudgins v. Kemp, 20 How. 45; Kain v. Larkin, 141 N. Y. 144, 36 N.

McRea v. Branch Bank of Alabama, E. Rep. 9; cf., Phillips v. Eesterson,

19 How. 377; Bibb v. Baker, 17 B. 154 111. 572, 39 N. E. Rep. 599.

Mon 1 K v.) 292 ; Bulkley v. Burlington, ' Mertens v. Welsing, 85 Iowa 508,

5 McLean 451 Purkitt v. Polack, 17 52 N. W. Rep. 362.

I al. 827 ; Eartshorn v. Eames, 31 Me. » Merrill v. Locke, 41 N. H. 490.
9:5 ; Ringgold v, Waggoner, 14 Ark.

§ 240 SALES UPON CREDIT. 427

material facts, to show a fraudulent design in disposing of
property, is not regarded as sufficient of itself to establish
it.1 The sale of all the effects of an insolvent copartner,
ship upon credit at a fair valuation, to a responsible
vendee, who knew of the insolvency, is not per se fraudu-
lent ;2 nor does proof of a sale upon credit, by a party in
failing circumstances, to one who had knowledge of these
circumstances, necessarily establish fraud.3

§ 240. Sales upon credit. — It must be remembered that
every delay to which a creditor is subjected in the collec-
tion of his debt is not necessarily fraudulent.4 Insolvency
as is elsewhere shown, does not deprive a debtor of the
right to sell his property ; 5 and if the sale is made in
good faith, and without any intent to hinder, delay, or
defraud creditors, the mere fact that it was made upon
credit does not require that it should be declared invalid.0
The court, in Roberts v. Shepard, said :7 " A sale upon
credit of part of their property, by an insolvent firm, is a
circumstance which may be considered, with others, bear-
ing upon the question of fraudulent intent, but alone does
not necessarily establish it." Certainly it will not do to
say that the law presumes that every man who sells on
credit does so with intent to hinder and delay his cred-
itors.8 In Ruhl v. Phillips,11 the New York Commis-
sion of Appeals, reversing the court below,10 held that
the sale of the entire effects of an insolvent copartnership
at a fair valuation, upon a credit ranging from four to
twenty-four months, to a responsible vendee, having

1 Leffel v. Schermerhorn, 13 Neb. 5 See $ 52. Beasley v. Bray, 98 X.
342. C. 266, 3 S. E. Rep. 497.

2 Ruhl v. Phillips. 48 N. Y. 125, 6 Beasley v. Bray, 98 N. C. 266, 3
8 Am. Rep. 522. S. E. Rep. 497.

3 Loeschigk v. Bridge, 42 N. Y. 421. 7 2 Daly (N. Y.) 112.

4 Loeschigk v. Bridge, 42 Barb. (N. N Gillet v. Phelps, 12 Wis. 899.
Y.) 173 : affi'd 42 N. Y. 421. s 48 N. Y. 125.

10 2 Daly (N. Y.) 45.

428 UNUSUAL ACTS AND TRANSACTIONS. § 24]

knowledge of the insolvency, was not fraudulent per se.
In the New York Court of Appeals1 the principle is
enunciated that the mere fact of a sale of his property by
a party in failing circumstances, to a purchaser having
knowledge of his condition, upon an average credit of
sixteen months, did not per ^'establish fraud, or an intent
to hinder or delay creditors.2 Where, however, it appears
upon the face of the transaction that the parties contem-
plated a large surplus, and the property is practically pro-
tected from forced sales or attachments or levies for two
years, the instrument will be declared void as hindering
and delaying creditors.3 A sale upon a long credit to an
irresponsible purchaser with no security is declared in
Tennessee to be a badge of fraud.4 So in Texas a sale
on an indefinite credit is a badge.5

§ 241. Unusual acts and transactions. — Courts and juries
are often influenced in favor of creditors by slight circum-
stances connected with the transaction indicating exces-
sive efforts to give the conveyance the appearance of
fairness,0 or by facts which are not the usual attendants
of business transactions.7 Honesty requires no strata-
gem or subterfuge to support and aid it.8 In Adams v.
1 )avidson 9 the assignee took a fellow-clerk with him
to witness an attempted transfer of possession, and
requested him to " pay attention and recollect what he
heard." The court were plainly influenced by the evi-

1 Loeschigk v. Bridge, 42 N. Y. 5 Jacobs v. Totty, 76 Tex. 343, 13

421. S. W. Rep. 372.

< !ompare Brinley v. Spring. 7 Me. 6 Hart v. Sandy, 39 W. Va. G44, 20

241; Harris v. Burns, 50 Cal. 140; S. E. Rep. 665.

Lewis v. Caperton, 8 Gratt. (Va.) 148. "Stevens v. Pierce, 147 Mass. 510,

Bigelow v. Stringer, 40 Mo. 195. 18 N. E. Rep. 411 : Danjean v. Black-

Compare Reynolds v. Crook, 31 Ala. eter, 13 La. Ann. 597; Peabody v.

634 Jacobs v. Totty, 76 Tex. 343, 13 Knapp, 15:; Mass. 242, 26 N. E. Rep.

S. W. Rep. 372. 696.

1 Robinson \. Frankel, 85Tenn.484, B Comstock v. Ray ford, 20 Miss. 391.

3 S. W. Rep. 652. » 10 N. Y. 309, 312.

§241 UNUSUAL ACTS AND TRANSACTIONS. 429

dence of this request, and observed that it was wholly
unnecessary if the parties intended to comply with the
exactions of good faith in taking and holding possession
of the property assigned. To a similar effect is the case
of Hartshorn v. Eames.1 In that case the court said
that there was no indication of great formality in trans-
acting business between the parties, except on the occa-
sion in question, when great precision was resorted to ;
an accurate calculation and valuation gone into, and the
claim of the grantee made to overbalance the valuation.
These with other facts led the court to believe that the
transaction resembled a farce rather than a bona fide
transaction. Painstaking legal formalities may be a
badge of fraud.3 Again it is said that " bona fide trans-
actions do not need to be clothed with the extraordinary
pretense of prompt payment."3 In Langford v. Ply4 the
deed of grift contained this clause : " Now this indenture
is not to hinder or delay the collection of any of my just
debts, but the same are to be paid." A suit for slander
was pending at the time. The court said that this clause
was evidently the result of a consciousness on the part of
the assignor that others might think the deed was made
with a fraudulent design, and, as he was otherwise free
from debt, it indicated that his purpose in making the
transfer was to defeat the judgment which might possibly
be recovered in the action for slander.5 " Studied for-
mality and apparent fairness " will not save a fraudulent

1 31 Me. 100. go through with the formality of pro-

* Higgins v. Spahr, 145 Ind. 167, 43 curing, executing and delivering a

N. E.Rep. 11. hill of sale of the property : conducl

3 King v. Moon, 42 Mo. 551, 561; unusual in respect to property of this
Hart v. Sandy, 39 W. Va. 644, 20 S. character where the sale is honestly
E. Rep. 665. made." This was regarded as one of

4 7 Humph. (Tenn.) 587. the circumstances attending the sale
•IH Mead v. Noyes, 44 Conn. 491, which tended strongly to show the

"the parties took the precaution to existence of actual fraud.

430 UNUSUAL ACTS AND TRANSACTIONS. £24!

transaction.1 In Crawford v. Kirksey2 it was contended
1)}- counsel that very great and unusual particularity fur-
nished badges of frauds The court observed that if the
transaction was consummated quietly and without wit-
nesses, then the complaint would be that it was secretly
effected. If unusual publicity or particularity character-
ized the transaction, this would be urged as a badge of
fraud. This, it was said, savored of the water test which
in former years was applied to those suspected of witch-
craft. If they sank they were innocent, but they incurred
great hazard of losing their lives by drowning ; if they
swam they were adjudged witches and perished at the
stake.

It may be observed that the absence of memoranda, or
of any record of the consideration;4 the failure to take
an account of the stock and no agreement as to the exact
terms of settlement ;"' a false admission of the receipt of
the consideration ; ,; unusual clauses in the instrument ; r
giving the vendee power to prefer other creditors to the

1 First Nat. Hank v. Snowies, 67 The act, therefore, would rather he

Wis. 385, 28 N. W. Rep. 235. evidence of caution, like the direc-

1 55 Ala. 300. tion sometimes given to scriveners to

The tacts in Lake v. Morris, 30 draw up strong writings, which, to

Conn. '204. afford illustration of the say the least, would furnish as much

general subject. The vendee was in ground to suspect the honesty of a

actual possession of the property pur- transaction as it would evidence of

chased. Hence counsel contended its bona fides."

that the sale was void because there 'Hubbard v. Allen, 59 Ala. 300;

bad hecn no actual delivery of posses- Alexander v. Todd, 1 Bond 179; Mc-

Bion. The court, in overruling the Carty v. Fletcher, 12 Wash. 244, 40

argument, said: "No such delivery Pac. Rep. 939.

■"ill. I have taken place without first Wlieelden v. Wilson, 44 Me. 20;

taking the horses from the plaintiff's Frisk v. Reigehnan, 75 Wis. 499.43

»ion for the mere purposeof re- N. W. Rep. 1117, 44 Id. 766.
delivering them to him again. But a fi Alexander v. Todd, 1 Bond 180:

merely formal act like this we pre- Balto. & O. R. R. Co. v. Hoge, 34 Pa.

BU would never occur between St. 214 ; Watt v. drove. 2 Sch. & Lef.

parties whose only object was t<> 501.

place the purchased property in the Pilling v. Otis, 13 Wis. 496 ; Gibba

hands of the purchaser for his use. v. Thompson, 7 Humph. (Tenn.) 179.

§ 24i

UNUSUAL i.CTS A.ND TRANSACT!* >NS.

43 >

extent of the surplus;1 a sale to a creditor without a
surrender of the evidence of indebtedness;- a sale not
conducted in the " usual and ordinary course of busi-
ness ; 8 conduct of the parties which is "exceptional and
peculiar ; " 4 a conveyance of real estate without adequate
security ;5 a sale of a horse on the Sabbath without trying
the same;'"' absence of authentic evidence of indebted-
ness, considerable in amount, other than a pencil memo-
randum ;7 contradictory and irreconcilable accounts of the
transaction given by the vendor and vendee ;8 receiving
the rents and managing the. estate by the vendor after
the alleged sale,0 under an assumed agency from the
vendee, but without any evidence of a genuine agency
other than the uncorroborated assertion of the party ; 10
absence of means in the vendee;11 preparation of the
deed at the sole instance of the grantee;12 leaving the
business sign the same;13 continuing to act as owner,"
employment of the vendor after the sale;1' sacrificing

1 Seger's Son v. Thomas Bros., 107
Mo 643, 18 S. W. Rep. 33 ; Barnum
v. Hempstead, 7 Paige (N. Y.) 568.

2 Gardner v. Broussard, 39 Tex. 372 ;
Webb v. Ingham, 29 W. Va. 389, 1 S.
E. Rep. 816.

3 State ex rel, Peirce v. Merritt, 70
Mo. 283 ; Snell v. Harrison, 104 Mo.
158, 16 S. W. Rep. 152 ; Godfrey v.
Miller, 80 Cal. 420, 22 Pac. Rep. 290.

4 Brinks v. Heise, 84 Pa. St. 253 ;
Gollober v. Martin, 33 Kan. 255, 6
Pac. Rep. 267 : Hart v. Sandy, 39 W.
Va. 644, 657, 20 S. E. Rep. 665.

6 Owen v. Arvis, 26 N. J. Law 32.

6 Godfrey v. Miller, 80 Cal. 420, 22
Pac. Rep. 290.

7 Brinks v. Heise, 84 Pa. St. 253.

8 Marshall v. Green, 24 Ark. 419.

9 Banner v. May, 2 Wash. St. 221,
26 Pac. Rep. 248 ; Mertens v. Welsing,
85 Iowa 510, 52 N. W. Rep. 362.

"' Sands v. Codwise, 4 Johns. (N. V.)
536.

11 Danby v. Sharp, 2 MacAr. (D. C.)
435 ; Stevens v. Dillman, 86 111. 233.
See Castle v. Billiard, 23 How. 186.
In Morford v. Dieffenbacker, 51 Mich.
593, 607, 20 N. W. Rep. 600, Cooley,
C. J., said : " A sale to a person with-
out means, when ready money was
the nominal purpose, must neces-
sarily be suspicious."

12 Sears v. Shafer, 1 Barb. (N. Y.)
408.

13 Danby v. Sharp, 2 MacAr. (D.C.)
435; Wright v. McCorniick, 6'i Mo
430.

14Second Nat. Bk. v. Yeaton, •">:: Md.
443.

If,McKibbin v. .Martin. 64 Pa. St.
352: Eurlburd v. Bogardus. in Cal.
518: Rothgerber v. Gough, 52 [11.438.

See Bird v. Andrews, 10 < 'mill. ■> 12

45-

UNUSUAL \( rS AND TRANSACTIONS.

; 241

property for one-fourth of its value;1 deeding property
to relatives without their knowledge;'" concealment;3
absence of evidence which is supposed to be within the
reach of the party charged with the fraudulent act ; 4 vague
and partial explanations;5 taking goods in excess of a
debt;6 neglect to testify;7 or to offer explanation;8
destruction of letters relating to the controversy;'-'
tendering security without solicitation;10 transferring

' Stevens v. Dillman, 36 111. 235;
Frisk v. Reigelman, 75 Wis. 499, 43
X W. Rep. HIT. 11 Id. 766.

Lavender v. Boaz, 17 111. App.
421; Omaha Hardware Co. v. Dun-
can, 31 Neb. 217. 47 N. W. Rep. 846.

»Hoffer v. Gladden, 75 Ga. 538.

4 Newman v. Cordell, 43 Barb. (X.
Y.) 148-461 ; Peeblee v. Horton, 64 X.

• :. 374.

Smith v. Brown, 34 Mich. 455;
Helms v. Green, 105 XT. C. 252. 11 S.
E. Rep. 470.

"McVeagh v. Baxter. 82 Mo. 518 ;
Hart v. Sandy, 39 W. Va 644, 657,
■mi s. E. Rep. 665.

" Graham v. Furber, 14 C. B 410 ;
Goshorn v. Snodgrass, 17 W. Va. 770;
Conn. Mutual Life Ins. Co. v. Smith,
117 Mo. 261, 22 S. \V. Rep. 023; Ham
v. Gilmore, 7 Misc. (N. Y.) 596,
59 X. Y. St. Rep. 291, 28 X. Y.
Sii|»|i. 126; Throckmorton v. Chap-
man, 65 Conn. 454, 32 Atl. Rep.
930; Whitney v. Rose, 43 Mich. 27. 1
X. W. Rep. 557 : Second Nat. Bk. v.
Yeaton, 53 Md. 4 17 ; Henderson
v. Henderson, 55 Mo. 559. See
Harrell v. Mitchell, 61 Ala. 270. "The
omission of Johnson t<> testily as a
witness for himself, in reply to the
evidence againsl him, is of greal
n eight ." Bom den v. Johnson, 101 1 '.
2 S. I !. Rep 246. See Clark
\. Van Riemsdyk, '.t Cranch L53 ;
Clements v. Moore, 6 Wall. 299;
Hoffer v. Gladden, 75 Ga. 538;

Schwier v. N. Y. Cent, & H. R. R.
R. Co., 90 N. Y. 564. In Bleecker

v. Johnston, 69 N. Y\ 311, the
court says: "The non-attendance
of the absent defendant at the trial
may have been a proper subject of
remark and for consideration by the
jury, and if they, under all the cir-
cumstances, thought his absence sus-
picious, they might take a less favor-
able view of the testimony on the
part of the defense ; but this was the
extent to which the plaintiff was en-
titled to any benefit from the circum-
stance. (People v. Dyle, 21 N. Y.
578). It was not a case for the ap-
plication of the stringent maxim,
'Omnia presumatur contra spoliato-
/•<///." That is applied in its rigor to
cases of a tortious destruction or sup-
pression of documents, or other in-
struments of evidence, or resorting to
improper means to get or keep wit-
nesses away from the trial. If a party
by his own tortious act withhold the
evidence by which the nature of the
case would be made manifest, a pre-
sumption to his disadvantage may be
indulged by the jury." But see Clark
v. Krause, 2 Mackey (D. C.) 570.

a Schumacher v. Bell, 164 111. 184,
15 X. E. Hep. 428.
' Burke v. Burke. 31 Mich. 155.
10 Kellogg v. Root, 23 Fed Hep. 525;
Wis.' v. Wilds. 77 Iowa 592, 42 X. W.
Rep. 553.

§241 UNUSUAL ACTS A.ND TRANSA \S. (.33

professedly to prevent the sacrifice of the property;1
circuitous and evidently covinous series of transfers
through relatives;2 doing things for effect;3 taking
additional security by way of chattel mortgage on a claim
already secured by mortgage on real estate;4 extending
unusual credit;5 taking currency in payment instead of a
check;6 all these are indicia of fraud upon creditors
proper for the consideration of the jury, or of a court of
equity in cases where a jury trial is not had.

On the other hand, the purchase of land by an attorney
without making an abstract of title is not necessarily evi-
dence of fraud ; 7 nor is a sale by an insolvent of his whole
stock in trade upon credit always covinous,8 though it is
circumscribed by fraudulent presumptions. It has been
even held that evidence of a sale by a party indebted, of
an uninventoried stock of goods, on credit, to a near rela-
tive failed to establish fraud ; nor is a trust void because
not particularly declared.9 Then the fact that the pur-
chaser has no use for the property is not evidence of
fraud.10 The want of minute accuracy of language, and
the disregard of the usual forms, will not render an
assignment void,11 nor is it affected by a failure to file
schedules,12 nor by the failure to record it for a few days.13
The failure to describe the debt secured by a chattel
mortgage will not invalidate it.1*

In a Massachusetts case it was decided that a party was

1 German Ins. Bank v. Nunes, 80 9 Forbes v. Scannell, 13 Cal. 287.
Ky. 334. '"Grubbs v. Greer, 5 Coldw. (Tenn.)

2 Greer v. O'Brien, 36 W. Va. 287, 548.

15 S. E. Rep. 74. "Meeker v. Saunders, 6 Iowa 67.

3 Comstock v. Rayford, 20 Miss. 370. Compare State v. Keeler, 49 Mo.

4 Crapster v. Williams, 21 Kan. 109. 548.

6 Cowling v. Estes, 15 111. App. 260. 1S Produce Bank v. Morton, 67 N. Y.

6 Smith v. White, 50 Hun (N. Y .), 203. See Brennan v. Wilson, 1 Am.
603, 2 N. Y. Supp. 855. Insolv. Rep. 77.

7 Jenkins v. Einstein, 3 Biss. 129. 13Hoopes v. Knell. 31 Md. 553.

8 Scheitlin v. Stone, 43 Barb. (N. Y.) 14Magirl v. Magirl, 89 Iowa 342, 56
634, Sutherland, J., dissenting. N. W. Rep. 510.

28

434

RELATIONSHIP.

§242

not entitled to offer the testimony of witnesses to the
effect "that the giving of a mortgage, such as the mort-
gage in question, would not be in the usual and ordinary
course of such business." That was considered to be the
question for the jury to decide.1

>f 242. Effect of relationship upon debtor's transactions. —
The cases relating to the effect of proof of relationship
of parties dealing with the debtor to him are numerous.
A clearly formulated rule on the subject is not possible.
It is said by the Supreme Court of Pennsylvania that
" there is no law prohibiting persons, standing in near
relations of business or affinity, from buying from each
other ; or requiring them to conduct their business with
each other in special form.1' ~ The sale of property by a
father to his son, or by the son to his father, cannot in
itself be considered as a badge of fraud,3 and sometimes
the strongest considerations of duty may prompt a son to
prefer the claim of a widowed mother.4 The court may
require a mother to show that she had the means to
make advances as claimed to her son.5 " The relation-
ship of assignor and assignee," says Finch, J., "and their

Buffum v. Jones, 144 Mass. 29, 31,
10 N. E. Rep. 471.

Dunlap v. Bournonville, 26 Pa.
St. ?:i. See Reehling v. Byers, 94 Pa.
si. 333 . McVicker v. May, :i Pa. St.
224 , Forsyth v. Matthews, 14 Pa. St.
100; Bumpas v. Dotson, 7 Humph.
(Tenn.) 310; Shearon v. Henderson,
38 Tex. '-'■")') ; Wilson v. Lott, 5 Fla
305 ; Bowman v. Houdlette, is Me.
245 : Tyberandl v. Raucke, 96 111. 71 ;'
Pusej v. Gardner, 21 W. Va. 477 ;
Lininger \. Berron, 18 Neb. 452, 25
N. W. Rep. 578; Oherholtzer v.
Bazen, 92 [owa 602, til N. \V. Rep.
365 ; Rockland County v. Summer
vill.-. 1 i'.i I ml. lilt:.. :!'.» X. E Rep. 307;
Barr v. Church, 82 Wis. 382, 52 N. W.
Rep. 591 : Gray \. Galpin, 98 Cal. 633,

33 Pac. Rep. 725 : Bierne v. Ray, 37
W. Va. 577, 16 S. E. Rep. 804 ; Steel
v. De May, 102 Mich. 274, 60 N. W.
Rep. 684 ; Leppig v. Bretzel, 48 Mich.
321, 12 N. W. Rep. 199; Kelly v.
Fleming, 113 N. C. 133, 18 8. E. Rep.
81 : Reehling v. Byers, 94 Pa. St. 316 ;
Kitchen v. McCloskey, 150 Pa. St.
384, .'I AH. Rep.68S; Bank v. Bridgers,
114 N. C. 383, 19 S. E. Rep. 666.

Shearon v. Henderson, 38 Tex.
251 ; Fleischer v. Dignon. 53 Iowa

2S8; Wl lden v. Wilson, 44 Me. 11 ;

s. p., Drmarst v. Terhune, 18 N.J. Eq.
49: Low v. Wortman, 44 N. J. Eq.
193, 7 Atl. Rep. 654 : 14 Id 586.
1 Colej v. Coley, 14 N. J. Eq. 350.

Thompson v. Tower Mfg. Co.,

101 Ala. 110, Iti So. Rep. 116.

§ 242

RELATIONSHIP.

435

intimacy and friendship, and the preference given to the
latter as a creditor prove nothing by themselves. They
are consistent with honesty and innocence, and become
only important when other circumstances, indicative of
fraud, invest them with a new character and purpose, and
transform them from equivocal and ambiguous facts into
positive badges of fraud." l The majority of the cases
hold that relationship of the parties, however, is cal-
culated to awaken suspicion,2 and the transaction will be
closely scrutinized,3 if there are any facts which tend to
indicate fraud, though the relationship is not of itself
sufficient to raise a presumption of fraud.* It may be

1 Shultz v. Hoagland, 85 N. Y. 468 ;
s. p., Clark v. Krause, 2Mackey(D. C.)
566 ; Gottlieb v. Thatcher, 151 U. S.
271, 14 S. C. Rep. 319 ; Kitchen v.
McCloskey, 150 Pa. St. 376, 24 Atl.
Rep 688 : Barr v. Church, 82 Wis.
382, 52 N. W. Rep. 591 ; First Nat.
Bk. v. Smith, 93 Ala. 99, 9 So. Rep.
548; Shober v. Wheeler, 113 N. C.
370, 18 S. E. Rep. 328 ; Smith v. Reid,
134 N. Y. 568, 31 N. E. Rep. 1082 ;
Bierne v. Ray, 37 W. Va. 571, 16 S.
E. Rep. 804 ; Martin v. Fox, 40 Mo.
App. 664. See Renney v. Williams,
89 Mo. 145, 1 S. W. Rep. 227

2 Bumpas v. Dotson, 7 Humph.
(Tenn.) 310; Forsyth v. Matthews, 14
Pa. St. 100; Harrell v. Mitchell, 61
Ala 271 ; Engraham v. Pate, 51 Ga.
537; Sherman v. Hogland, 73 Ind.
473 ; Moog v. Farley, 79 Ala. 246 ;
Gregory v. Gray, 88 Ga. 172, 14 S. E.
Rep. 187 ; Fisher v. Moog, 39 Fed. Rep.
665; Davis v. Schwartz, 155 U. S.
638, 15 S. C. Rep. 237 ; First Nat. Bk.
v Moffatt, 77 Hun (N. Y. ) 468, 28 N. Y.
Supp. 1078; Robinson v. Frankel, 85
Tenn. 478. 3 S. W. Rep. 652.

3 Marshall v. Croom, 60 Ala. 121:
Fisher v. Shelver, 53 Wis. 501, 10 N.
W. Rep. 681 ; Seitz v. Mitchell, 94 U.

S. 580 ; Simms v. Morse, 4 Hughes
582 ; Fisher v. Herron, 22 Neb. 185, 34
N. W. Rep. 365; Bartlett v. Chees-
brough, 23 Neb. 771, 37 N. W. Rep.
652; Farrington v. Stone, 35 Neb.
456, 53 N. W. Rep. 389 ; Middleton v.
Sinclair, 5 Cranch, C. C. 409, 17
Fed. Cas. 275 ; McEvony v. Row-
land, 43 Neb. 97, 61 N. W. Rep.
124 ; Archer v. Long, 32 S. C.
171, 11 S. E. Rep. 86 ; Livey v. Win-
ton, 30 W. Va. 554, 4 S. E. Rep. 451 ;
Shauer v. Alterton, 151 IT. S. 607, 14
S. C. Rep. 442. Mr. May says: "A
settlement or other conveyance in fa-
vor of a near relative is open to more
suspicion than one to a mere stran-
ger, inasmuch as it is more likely t<>
be intended, not as a real transfer of
property by which the donor puts it
out of his own reach, but a feigned
and collusive arrangement by which
it is secretly understood thai tli"
donee shall hold the property against
the claims of creditors or purchasers,
and still let the donor receive benefits
from it." May's Fraudulent Convey-
ances, p. 236.

* King v. Russell, 40 Tex. 13*2 ; Mar-
shall v. Croom, 60 Ala. 121. Bierne
v. Ray, :)7 W. Va. .-,70. 16 S. E. Rep.

436 RELATIONSHIP. § 242

considered, with the other facts, by the jury,1 and rather
tends to aid the creditors, ~ for it is regarded as highly
probable that a party intending to perpetrate a fraud
would look for aid and connivance to a relative rather
than to a stranger. Still an instruction to a jury that a
deed given to a brother to secure a debt is prima facie
fraudulent is erroneous.3 When relationship is coupled
with secrecy in the transaction, it may, unless explained
or justified, be regarded as fraudulent.4 The same rule
applies when the transfer conveys the debtor's entire
estate, and other badges accompany it.5 In some cases
it is held that in transactions between relatives no clearer
proof of good faith is required than in transactions
between strangers.0 It may be observed here- that the
fact that the creditors who obtained judgments by con-
fession bore intimate relations to the debtors, the delay
in the levy of the execution, the unusual time and order
under which the assignee took possession, and the agency
of the same attorney in all the proceedings, though, per-
haps, casting suspicion upon the proceedings, are not in
themselves sufficiently strong to sustain an imputation of
bad faith, or a charge of fraudulent preference.7 We
may here advert to the rule of the common law that a
debtor has a right to prefer one class of creditors to
another, and that it is error "to encourage a jury to take
into consideration the exercise of this right as 'a circum-

804 : Ridge \. Greenwell, r>8 Mo. App. C. 883, 19 S. E. Rep. 666. See Gott-

179; Bleiler v. Moore, 88 Wis. 438, lieb v. Thatcher, 151 U.S. 27!). 14 S.

60 X. W. Rep. 792; Robinson v. C. Rep. 319 ; Bleiler v. Moore. 88 Wis.

I rank( I. 85 Tenn 175, 8 8. W. Rep. 138, 60 N. W. Rep. 792.

Ml. n v. Kirk, si [0wa 658,47 l Reiger v. Davis, 67 N. C. 189.

X W. Ren 006. . Embury v. Klemm. 30 N. J. Eq.

Engrahaoi \. Pate, 51 Ga. 537; 523; Johnston v. Dick. 27 Miss. 277.

Burton \ Boyd, 7 Kan. 17. 'Teague v. Lindsey, 106 Ala. 266,

1 Demares! v Terhune, is n. J. 17 So. Rep. 538.

Baldwin v. Freydendall, 10 111.

Citj Nat. I'.k v. Bridgers, II I X. App. L07.

§ 242

RELATIONSHIP.

In-

stance of suspicion ' in deciding upon the fairness of the
transfer." '

The case of Salmon v. Bennett2 has exerted a potent
influence over decisions in this country concerning
voluntary conveyances. In the course of the opinion
Swift, C. J., said :3 " Mere indebtedness at the time will
not, in all cases, render a voluntary conveyance void as to
creditors, where it is a provision for a child in considera-
tion of love and affection; for if all gifts by way of
settlement to children, by men in affluent and prosperous
circumstances, were to be rendered void upon a reverse
of fortune, it would involve children in the ruin of their
parents, and in many cases might produce a greater evil
than that intended to be remedied." This rule has been
applied to conveyances to wives,4 as well as to children,5
grandchildren,0 and other near relatives.7

1 Born v. Shaw, 29 Pa. St. 292.

2 1 Conn. 525. See 24 Am. Law
Reg. N. S. 496.

3 Salmon v. Bennett, 1 Conn. 525,
542. •

4 See Clayton v. Brown, 17 Ga. 217 ;
s. c. again 30 Ga. 490 ; Weed v.
Davis, 25 Ga. 684 ; Goodman v. Wine-
land, 18 Reporter (Md.) 622 ; Kipp v.
Hanna, 2 Bland Ch. (Md.) 26 ; Filley
v. Register, 4 Minn. 391 ; Walsh v.
Ketchum, 12 Mo. App. 580 ; Patten v.
Casey, 57 Mo. 118 ; Potter v. Mc-
Dowell, 31 Mo. 62 ; Amnion's Appeal,
03 Pa. St. 284 ; Carl v. Smith, 8 Phila.
(Pa.) 569; Perkins v. Perkins, 1
Tenn. Ch. 537 ; Yost v. Hudiburg, 2
Lea (Tenn.) 627 ; Morrison v. Clark,
55 Tex. 437 ; Belt v. Raguet, 27
Tex. 471 ; Smith v. Vodges, 92 U.
S. 183 ; Lloyd v. Fulton, 91 U. S.
479 ; French v. Holmes, 67 Me. 186 ;
Winchester v. Charter, 12 Allen
(Mass.) 606.

5 See Dodd v. McCraw, 8 Ark. 83 ;

Smith v. Yell, 8 Ark. 470 ; Clayton v.
Brown, 17 Ga. 217 ; Patterson v. Mc-
Kinney, 97 111. 41 ; Worthington v.
Bullitt, 6 Md. 172; Worthington v.
Shipley, 5 Gil] (Md.) 449 : Smith v.
Lowell, 6 N. H. 67 ; Brice v. Myers, 5
Ohio 121 ; Crumbaugh v. Kugler, 2
Ohio St. 373; Grotenkemper v. Harris,
25 Ohio St. 510; Miller v Wilson, L5
Ohio 108; Posten v. Posten, 1 Wharl.
(Pa.) 27 ; Chambers v. Spencer, 5
Watts (Pa.)404 Mateer v. Hissim, 3
P. & W. (Pa.) 160 ; Burkey v. Self, I

Sn 1 (Tenn.) 121 ; Hinde's Lessee v.

Longworth, 11 Wheat. L99 ; Bracketl
v. Wait.', 4 Vt. 39, 6 Vt. Ill ;
Church v. Chapin, 35 Vt. 223 ; Lerow
v. Wihnarth, 9 Allen (Mass 386
Laughton v. Harden, 68 Me. 208;
Stevens v. Robinson, 72 Me. 381.

6 Bird v. BoMiir, 1 Mo. 701 ; Wil-
liams v. Banks. 11 Md. 198.

7 Pomeroy v. Bailey, 13 N. 11. 118.
See 24 Am. Law Reg. N. S. 497.

438 PRIMA FACIE CASES OF FRAUD. § 243

§ 243. Prima facie cases of fraud. — Taking a deed for prop-
erty in the name of the wife, which property was purchased
and paid for by the husband, who was involved in debt at
the time, was said to make a prima facie case of fraud
against creditors.1 In Purkitt v. Polack 2 the court
observed : " The control of the property after the alleged
sale, the indebtedness of the grantor at the time, the
absence of the grantee from the State, and the failure on
the part of the latter to show any payment of considera-
tion, were amply sufficient to raise a prima facie intend-
ment of fraud in the transaction." In Reiger v. Davis,3
the court remarked that when a much-embarrassed debtor
conveyed property of great value to a near relative, and
the transaction was secret, no one being present to witness
it but relatives, it was to be regarded as fraudulent. In
Wilcoxen v. Morgan4 the court said that in addition to
the evidence of certain declarations made at the time of the
preparation of the conveyance, " the relationship of
the parties ; the fact that the conveyance was made with-
out the knowledge of the grantee ; the absence of
consideration, and the subsequent long-continued posses-
sion and dominion cf the premises by the grantor,
sufficiently manifest that the purpose of G. in this con-
veyance was to put the estate beyond the reach of his
creditors." When it appeared that after the conveyance
the debtor had no other property subject to execution,
that the grantee was his brother and had not means
sufficient to enable him to pay for the property, that the
debtor remained in possession and the grantee removed
out of the State, these, and certain admissions of the cov-
inous nature of the transfer, were considered sufficient to
show that the conveyance was made to protect the prop-

: Alston v. Rowles, L3 Fla. 117. 3 67 N. C. 186.

17 Cal. 327-332. « 2 Col. 477, 478.

§ 244 COMMENTS. 439

erty from creditors.1 In Danby v. Sharp 8 it is -said that
a sale of an entire stock-in-trade to a clerk in the employ-
ment of the vendor is colorable and fraudulent as to the
creditors of the vendor, when the vendee has no means
except that he receives ten dollars a week for his services,
and where he pays nothing at the time of the sale, but
gives his unsecured promissory notes for the whole
amount of the purchase-money, and no public notice is
given of the change, but the business sign remains the
same, and the vendor is frequently about the premises.
In Moore v. Roe3 the court held that the transfer of all
a debtor's property pending a suit against him ; the taking
of an absolute deed as security for money owing by the
debtor, and looseness or incorrectness in stating the con-
sideration of the conveyance, or in determining the value
of the property conveyed, were indications of fraud.

The further multiplication of these illustrations is a
work of doubtful utility. Indeed the resources of fraud-
ulent debtors are too great, the color and variety of the
devices to elude creditors too numerous, to render classi-
fication of the different schemes by attempted recitals of
details practicable. It is to be noticed that the illustra-
tions last given combine different badges of fraud, and it
is very common in creditors' suits to find many of these
indicia existing in a single case.

§ 244. Comments. — Frequent comment is made upon the
extreme difficulty of the task of defining and establishing
fraud, and it seems to be regarded as impossible to
formulate exact rules as to what is and what is not fraud.
" To do so would be to give to persons fraudulently
inclined the power of evading the jurisdiction of the courts
by fresh contrivances which might be invented to elude

'McDonald v. Farrell, 60 Iowa *2 MacAr. (D. C.) 435.

337, 14 N. W. Rep. 318. 3 35 N. J. Eq. 90.

44<-> ' ' "MMENTS. § 244

any invariable, inflexible rule." ' " As to relief against
frauds," says Hardwicke, " no invariable rules can be
established. Fraud is infinite, and were a court of equity
once to lay down rules how far the) would go, and no
further, in extending their relief against it, or to define
strictly the species or evidence of it, the jurisdiction
would be cramped and perpetually eluded by new schemes,
which the fertility of man's invention would contrive."
Vice-Chancellor Kindersley expressed the modern doc-
trine in these terms : " It was at one time attempted to
lay down rules that particular things were indelible badges
of fraud, but in truth, every case must stand upon its own
footing, and the court or the jury must consider whether,
having regard to all the circumstances, the transaction
was a fair one, and intended to pass the property for a
good and valuable consideration."2 In Jones v. Nev-
ers,3 Allen, C. J., said : " Every case must stand on its
own footing." But this leads to unsatisfactory and uncer-
tain results. The profession are not given sufficient
fixed rules with which to guide their actions, or advise
clients, and must resort to the wilderness of single
instances and complicated facts contained in the reports
to discover analogous cases. The courts protest that it
is not permissible to guess at the truth in the pursuit and
attempted discovery of fraud ; that fraud must be proved
and not presumed, and that speculative inferences are
not the proper foundation of a legal judgment.4 Yet the
most casual reading of many reported decisions will
demonstrate that transfers of property have been avoided,
especially in equity, upon the most shadowy and intangi-
ble grounds, and that in many instances innocent pur-

M.iv - Fraudulenl Conveyances, •'Hale v. Metropolitan Omnibus
l» 80; Parke'a Hiatorj of Courl of Co., 28 L. J. Ch. 777.
Chancer; p 508 8e< §18 and note. 3 18 New Brunsw. 629.

J See §§ 5, 6.

§ 244 < OMMENTS. 44 l

chasers have been the victims of unfortunate circum-
stances. That, on the other hand, fraudulent alienees
have constantly escaped the meshes of the law, and
secured their ill-gotten gains, though the defrauded
creditors, and in some cases the courts, were inwardly
conscious of the fraud which both were powerless to
establish, is a matter of common experience. The
impulse " to color more strongly the constructive indica-
tions of fraud, for the protection of valuable rights," is to
be encouraged. The degrees of weight to be attached to
particular classes of indicia should be carefully considered,
for, in the present aspect of the law, the marks of fraud
which assume such prominence in this class of litigation
often, like a two-edged sword, injure both creditors and
bona fide alienees.

CHAPTER XVII.

CHANGE OF POSSESSION — DELIVERY.

Change of possession must be
continuous.

Temporary resumption of pos-
session.

Concurrent possession insuffi-
cient.

Possession of bailee.

No delivery where purchaser
has possession.

When technical delivery is not
essential.

Excusing want of change of
possession.

Change of possession of realty.

Change of possession on judicial
sale.

Delivery of growing crops.

Possession with power of sale.

' ' By the possession of a thing we always conceive the condition in which not only one's own
dealing with the thing is physically possible, but every other person's dealing with it is capable
of being excluded." — Von Savigny's Treatise on Possession, translated by Sir Erskine Perry,
p. 2.

§245. Concerning possession.— Possession, or " the own-
ing or having a thing in one's own power," ! with the right
to deal with it at pleasure, to the exclusion of others,2 is
said to be a degree of title, although the lowest.3 The
effect of a failure to change possession, more especially
as relating to sales of personalty, will be found upon
investigation to occupy a very prominent place in the law
regulating fraudulent conveyances. Indeed some of the
writers seem to lose sight of the other characteristics of

§245.

Concerning possession.

§257.

246.

Change of possession.

247.

Possession as proof of fraud.

258.

248.

Transfers presumptively or

prima facie fraudulent.

259.

249.

The New England cases.

250.

Rule in New York and various

260.

other States.

261.

251.

Fraudulent per se or conclu-

sive.

262.

252.

Practical results of the conflict-

ing policies.

263.

253.

Actual change of possession re-

quired.

264.

254.

Question for the jury.

265.

255.

Overcoming the presumption.

256.

Possession within a reasonable

266.

time.

267.

1 Brow i) v. Yolkening, 64 N. Y. 80.

Compare Pope v. Allen, 90 N. Y. 298.

•• Sullivan v. Sullivan, 66 N. Y. 41.

3 Swift v. Agnes, 33 Wis. 240 ; Raw-
ley v. Brown, 71 N. Y. 85 ; Mooney v.
Olsen, 21 Kan. 691.

§ 245 CONCERNING POSSESSION. 443

Twyne's Case,1 and mistakenly treat the question of the
failure to change possession of the property as not only
the controlling but the exclusive feature of the case. In
Twyne's Case3 the court said : " The donor continued in
possession and used the goods as his own, and by reason
thereof he traded and trafficked with others, and
defrauded and deceived them."3 Hence Coke, in com-
menting upon this case, gives the following advice to a
donee : " Immediately after the gift take possession of
the goods, for continuance of possession in the donor is
a sign of trust." It will be at once manifest from this
statement that the modern law upon the subject must
have undergone a very material change since Coke wrote,
for the failure to consummate the sale or gift by change
of possession was then considered to be merely a mark,
sign, or badge of fraud.4 We cannot but regard this
feature of the law as occupying too prominent a place,
and as receiving too great attention as applied to trans-
actions which it is sought to annul as fraudulent under
the statute of Elizabeth.5 The theory is that a sale or
gift, unaccompanied by possession, is not apparent to third
parties, but, on the contrary, is contradicted by the con-
tinued visible possession of the vendor. Yet, in the case

1 See § 22. deceive and to defraud creditors and

8 3 Rep. 80, 81« ; Davis v. Schwartz, purchasers ; and the law always pre-

155 U. S. 639, 15 S. C. Rep. 237. sumes, even in criminal matters, that

3 See Putnam v. Osgood, 52 N. H. a person intends whatever is the natu-

156 : Wright v. McCormick, 67 Mo. ral and probable consequence of his
430 ; Barr v. Reitz, 53 Pa. St. 256; own actions." Uriswold v. Sheldon, 4
Manton v. Moore, 7 T. R. 72 ; also N. Y. 593. For exceptions to the gen-
Twyne's Case, 1 Smith's Lea. Cas. 1 ; eral rule see Bissell v. Hopkins, SCow.
" Sales and Conveyances without De- (N. Y.) 166, in notis.

livery of Possession," 18 Am. Law 5 In Davis v. Turner, 4 Gratt. (Va.)

Reg. (N. S.)137. See § 22. 441, the court observed : "Thetruth

4 " The statute does not introduce a is, there is something rather loose and
new rule, nor does it make a forced indefinite in the idea of a delusive
or unnatural presumption. The direct credit gained by the possessii m 1 »f per
tendency of a conveyance of goods sonal property."

without a change of possession is to

444 CONCERNING POSSESSION. £-45

of bailments in their many forms, the possession is held
by parties who are not the owners, but this feature of the
relationship is not regarded as giving rise to any pre-
sumption of fraud. Any one can safely put his personal
property in another's possession, or give another the use
of it without imperilling his title.1 It is said that " the
possession of property never owned by the possessor
raises no . ... presumption " of ownership.2 This
surely is an unsatisfactory explanation of the distinction.
The acts of ownership exercised over property by a bailee
and by an owner, either before or after sale, are not
necessarily dissimilar. Inquiry in either case would gen-
erally be necessary to ascertain the status of the title.
The exercise of these very acts of ownership constitute
the mischief sought to be obviated by the rule calling for
change of possession. Chattels are not negotiable.
Possession is not, as in the case of mercantile paper and
money, an assurance of title, or of authority or power of
disposition. "The servant," said Woodruff, J., "intrusted
with the possession of his master's property, does not
thereby get authority to sell it, or to authorize another
to sell it. The borrower of a chattel, or the ordinary
bailee, does not, by his possession, gain any such power." :
A man cannot be deprived of his property without his
consent.

1 Capron v. Porter, 43 Conn. 389 gaged, and yet of which lie retained

Dillon, J., observes, that " the rule, the possession, enjoyment and appar-

deducing fraud as a conclusion of law ent ownership. The statute of 13

from the simple retention of pusses- Elizabeth did not declare that such

siuii by th«- vendor or mortgagor, retention would he fraudulent. This

originated in England in a very early was ;i doctrine of the courts."

day, when there were no registry Hughes v. Cory, 20 Iowa 402. See

laws, or none requiring such instru- Bullock v. Williams, H> Tick. (Mass.)

tnente to be registered. It was 33.

founded upon public policy. That 'Capron v. Porter, 43 Conn. 389.

policj was to prevent a part} from See Davis v. Bigler, 62 Pa. St. 242.

acquiring a false and deceptive credit BSpraighte v. Hawley, 39 N. Y.

"ii the strength of the possession of 446.
property which he had Bold <n mort-

§246 CHANCE OF POSSESSION. 445

Surely it is obvious that to prohibit altogether the sepa-
ration of the title from the possession of personal property
would be incompatible with an advanced state of society
and commerce, and productive of great inconvenience and
injustice in the pursuits and business of life.1 It would
be " a remedy worse than the disease."

§246. Change of possession. — It is believed that the rule
of the common law had its foundation in the doctrine
already noticed, that possession of personal property is
prima facie evidence of ownership.2 To allow the owner
of such property to transfer the title by a secret convey-
ance, while retaining the possession and assuming to act
as the owner, was regarded as permitting a fraud upon
all persons who should deal with him upon the faith of
his ownership.3 As we have said, the theory was that
his possession and apparent ownership gave him credit,
and afforded him the means of defrauding others.4 An
agreement to let a vendor retain the possession and use
of the property after an absolute sale is not considered to
be a common and ordinary transaction in the usual course
of business. Such an arrangement, it is urged, excites
suspicion, and it is regarded in many of the cases as the
bounden duty of the courts, for the safety and protection
of creditors, to call upon and hold the vendee in all such

1 Davis v. Turner, 4 Gratt. (Va.) Justice Kent said, in Sturtevant v.
441. Ballard, 9 Johns. (N. Y.) 337, 339 :

2 Wallace v. Nodine, 57 Hun (N. " Delivery of possession is so much of
Y.) 239, 10 N. Y. Supp. 919. the essence of the sale of chattels

3 Roe v. Meding, 53 N. J. Eq. 350, that an agreement to permit the ven-
33 Atl. Rep. 394. dor to keep possession is an extraordi-

4 See Crooks v. Stuart, 2 McCrary, nary exception to the usual course of
15. " The controlling argument .... is dealing, and requires a satisfactory
the danger of false credit and fraudu- explanation." Again it is observed:
lent evasion of debt whenever delivery "Retention of possession not only
and change of possession do not ac- tends to give false credit to the seller,
company and follow change of prop- but it is a sign of a secret trusl in his
erty whether absolute or qualified," favor." Brawn v. Keller, 43 Pa St.
per Verplanck, Senator, in Cole v. 106.

White, 26 Wend. (N. Y.) 523. Chief-

446

CHANGE OF POSSESSION.

246

cases, to explain clearly and satisfactorily how an abso-
lute sale could have been bona fide, and yet the vendor
retain the use and possession.1 The change of which we
are speaking must be open and visible, and apparent by
the changed appearance of the property or of its cus-
tody.- In these controversies regard must be had as to
the character of the property, the nature of the trans-
action, the position of the parties, and the intended use of
the property.3

Such is the general condition of the law relating to
this branch of the subject, whatever may be the force of
the criticisms suggested. The subject, by reason of its
prominence, calls for consideration, and for some discus-
sion of the many exceptions, real and apparent, to the
general rule, arising from the necessities incident to par-
ticular cases and from other causes.4

1 Coburn v. Pickering, 3 N. H. 427.
It must be remembered tbat, by the
common law, delivery was not consid-
ered necessary upon a sale of chattels
to vest the title in the vendee (Miller
ads. Pancoast, 39 X. J. Law 253 ; Fra-
zier v. Fredericks, 24 N. J. Law 169 ;
Meeker v. Wilson, 1 Gall. 424; Mon-
roe v. Hussey. 1 Oreg. 190 : Davis v.
Turner, 4 Gratt. [ Va.] 426), as between
the parties. Philbrook v. Eaton, 134
Mass. 398,400; Parsons v. Dickinson,
11 Pick. (Mass.) 858: Packard v. Wood,
) Gray (Mass.) 307.

• Shauer v. Alterton, L51 U. S. 623,
use. Rep. 442.

iwford v. Davis, 99 Pa. St. 576;
Renninger v, Spat/., 12s pa. St. 526,
18 \tl. Rep. 10:, ; Garretson v. Back-
enberg, 144 Pa. St. 113. 22 A 1 1 Rep.
The possession which will be
equivalent to actual notice to a subse-
quent purchaser, must be an open and
risible occupation. Holland v. Brown,
1 in N. V 848.35 N. E. Rep. 577.

1 Mr. May -a\ - in his 1 reatise "ii

Fraudulent Conveyances. 2d ed., p.
118 : "It by no means follows, though,
that because there is no possession
given therefore a transfer is fraudu-
lent ; for those cases where the judges
have said that if possession was not
given it was fraudulent (Edwards
v. Harben, 2 T. R 587 : Wordall v.
Smith, 1 Camph. 332; Macdona v.
Swiney, 8 Ir. C. L. R. 86) must be
taken with reference to the circum-
stances of each case. The question
of possession is one of much import-
ance, but that is with a view to ascer-
tain the good or bad faith of the
transaction (Abbott, C. J., in Latimer
v. Batson, 4 B. & C. 652; and see
Wundell v. Phipps, 10 Yes. 139 ; Kidd
v. Rawlinson, 2 Ii. & P. .19; Hoffman
v. Pitt, 5 Esp. 22. 25 ; Eastwood v.
Brown, Ry. & Mood. 312). In Arun-
del! v. Phipps (10 Yes. 139, 145), Lord
Eldon said that the mere circum-
stance of tlie possession of chattels.

however familiar it might !»• to say
that it proves fraud, amounts to no

§247 POSSESSION AS PROOF OF FRAUD. 447

§ 247. Possession as proof of fraud. — As we shall pres-
ently show, it is commonly stated in some of the reported
cases that the continued possession of the subject-matter
of the sale by the grantor or vendor is prima facie evi-
dence of fraud, while other authorities regard it as con-
clusive proof that the transaction is covinous. A learned
writer1 has declared this to be a loose method of refer-
ring to the matter, and has ventured to assert that " a
careful examination of this branch of the law will show that
neither of the views so expressed is correct." The argu-
ment advanced by the writer is that bald possession is not
conclusive evidence of fraud ; it is only a circumstance
admissible in evidence with other circumstances as bear-
ing upon the question of the actual existence of fraud.
The conclusion drawn in the article mentioned is that
" possession is a link in a chain of circumstances, perti-
nent in proving fraud, having greater or less weight
according to the circumstances of each case," and " is not
necessarily either conclusive or prima facie evidence of
fraud." Some accompanying circumstances attending the
possession or, so to speak, coloring it, must be shown to
establish fraud.

The statutory policy introduced in a number of the
States, under which a failure to effect a change of pos-
session is made either presumptively or conclusively

more than that it is prima facie evi- and disposition of a bankrupt). There
dence of property in the man possess- is no sufficient authority for Baying
ing, until a title not fraudulent is that the want of delivery of posses-
shown under which that possession sion makes void a bill of sale of goods
has followed ; that every case, from and chattels ; it is prima facie evi-
Twyne's Case (3 Rep. 80 b; see the dence of a fraudulent intention, and
remarks of Littledale, J., in Martin- if it be a badge of fraud only, in order
dale v. Booth, 3 B. & Ad. 498, 505) to ascertain whether a deed be fraudu-
downwards, supports that, and there lent or not, all the circumstances musl
was no occasion otherwise for the be taken into consideration. (Per
statute of King James (21 Jac. 1 C. Patteson, J., in Martindala v. Booth,
19, §g 10, 11, which originated the 3 B. & Ad. 498, 587.)"
law with respect to property remain- ' Possession as Evidence of Fraud,
ing in the reputed ownership or order 11 Cent. L. J. 21.

448 FRAUDULENT TRANSFERS. § 248

fraudulent, has robbed the. question of much of its import-
ance as a general proposition independent of local enact-
ment. We cannot but regard the theory advanced by
the writer referred to as sound, but we fail to discover that
the cases are in line with his arguments.

§ 248. Transfers presumptively or prima facie fraudulent. —
The question of how far retention of possession of the
property by the vendor is to be considered as evidence of
fraud in its sale has been a subject of much consideration
by the courts and in legislative bodies in the United
States.1 In some States the matter is regulated by
statute, but the statutes and the rules for their interpre-
tation vary in the different States. In other States the
question is left to be disposed of by the rules
and principles which obtain at common law The gen-
eral subject is capable of extended discussion, both
because of its importance and for the reason that the
authorities relating to it are full of subtle distinctions.
We can only consider its general outlines and notice the
leading cases and the important exceptions to the general
rule in the principal States. The main struggle is
between two policies and rules of evidence or proof, viz.:
whether the neglect to change possession of the property
shall be considered presumptively or conclusively fraudu-
lent as to creditors. The prevalent policy is to consider
the absence of a change of possession as prima facie or
presumptive evidence of fraud.a

ii must i"- remembered thai "the (N. ?.) 156; Beals v. Guernsey, 8

statute with its presumptions founded Johns. (N. T.) 446 ; Barrow v, Paxton,

11 1 »« » 1 n-delivery and absence of 5 Johns. (N. Y.) 258 ; Curtin v. Isaac-

rhanged possession draws no distinc- sen, 36 W. Va. 891, 15 S. E. Rep. 171 ;

tion between modes of transfer." Bartletl v. Cleavenger, 85 \Y. Va.

Stimson v. Wrigley, 86 N. Y. 387. 71!), MS. E. Rep. 373. [n Bissell v.

•See Crawford v. Kirksey, 55 Ala. Hopkins, :* Cow. (N. Y) L66, 188,

800; Mayer v. Clark, 40 Ala. 259; Savage, Chief .lustier. s:ii.l : "The

Vredenbergh v. White, 1 Johns. Cas. possession by the vendor of personal

§ 249

THE NEW ENGLAND CASES.

I \9

£ 249. The New England cases.— The cases supporting
the former theory will be first noticed, giving brief ((no-
tations from leading authorities. In Massachusetts,
"possession of the vendor is only evidence of fraud,
which, with the manner of the occupation, the conduct of
the parties, and all other evidence bearing upon the ques-
tion of fraud, is for the consideration of the jury. " ' In
New Hampshire it is said that " in cases of absolute sales,
possession and use by the vendor, after the sale, is always
prima facie, and, if unexplained, conclusive evidence of a
secret trust."2 So in Maine failure to change possession
is presumptive evidence of fraud, and the jury are to
determine the good faith of the transaction.3 In Roth-

chattels after the sale is not conclu-
sive evidence of fraud. The vendee
may, notwithstanding, upon proof
that the sale was bona fide and for a
valuable consideration, and that the
possession of the vendor after such
sale was in pursuance of some agree-
ment not inconsistent with honesty in
the transaction, hold under his pur-
chase against creditors." See Davis
v. Turner, 4 Gratt. (Va.) 422, where
the doctrine of fraud per se is exam-
ined and repudiated. See Forkner v.
Stuart, 6 Gratt. (Va.)197; Howard v.
Prince, 1 1 N. B. R. 322.

1 Ingalls v. Herrick, 108 Mass. 354 ;
Shurtleff v. Willard, 19 Pick. (Mass.)
202 ; Brooks v. Powers, 15 Mass. 244 ;
Hardy v. Potter, 10 Gray (Mass. ) 89 :
In Dempsey v. Gardner, 127 Mass.
381, Gray, C. J., said: "By the law
as established in this commonwealth,
it was necessary, as against subse-
quent purchasers or attaching cred-
itors, that there should be a delivery
of the property. No such delivery,
actual or symbolical, was proved.
The buyer did no act by way of tak-
ing possession or exercising owner-
ship, and the seller did not agree fco
29

hold or keep the horse for him

There was no evidence of delivery for
the consideration of the jury, excepl
such as might be implied from tin-
execution and delivery of the bill of
sale. That was not enough. Carter
v. Willard. 19 Pick. (Mass.) I ;
Shumway v. Rutter, 7 Pick. (Mass.)
56, 58, 8 Pick. (Mass.) 443. 147;
Packard v. Wood, 4 Gray (Mass. ) 307 ;
Rourke v. Bullens, 8 Gray (Mass.)
549 ; Veazie v. Somerby, 5 Allen
(Mass.) 280, 289; Ashcrofl v. Sim-
mons, 163 Mass. 437, 40 N. E. Rep.
171."

2 Coburn v. Pickering, 3 N. H. 428 ;
Doucet v. Richardson 1 X II. 1892)
29 Atl. Rep. 635. See Lang v. Stock-
well, 55 N. H. 561 ; Cutting v. Jack-
son, 56 N. H. 253; Sumner \ Dal tun,
58 N. H. 295; Stowe v. Tall, 58 N.
H. 445; Shaw v. Thompson, 43 V II.
130 ; Harrell v. Godwin, 102 N. ( . 330,
8 S. E. Rep. 925;Rawson Mfg. Co.
v. Richards, 69 Wis. 643, 35 N. W.
Rep. 40.

8 Shaw v. Wilshire, 65 Me 485;
Bartlett \. Blake, 37 Me. [24 . Fair
field Bridge Co. v. Nye, 60 M<
( roogins v. » lilmore, IT Me. 9 ; Reed

450

i;i |] in NEW YORK AND OTHER STATES.

§ ?5o

child v. Rowe ' the Supreme Court of Vermont said :
" The law is well settled in this State that there must be
a substantial and visible change of possession to protect
property from attachment by the creditors of the vendor.
. . . . The vendee must acquire the open, notorious and
exclusive possession of the property, and this implies that
the vendor is divested of the use, possession, or employ-
ment of the property."2 The rule that non-delivery of
possession is prima facie evidence of fraud obtains in
Rhode Island.3

S 250. Rule in New York and various other States. — After
much fluctuation and discussion, the general rule is now
established by statute in New York, that the retention of
possession by the vendor is presumptively fraudulent.
This presumption may be overcome by proof satisfactory
to a jury that the retention of possession was in good
faith, for an honest purpose, and with no design to
defraud creditors.1 In other words, evidence may be

v. Reed, To Me. 506. In the latter
tin- omrt says : "Without de-
livery the title does doI pas- as
against an attaching creditor.'1 Rob-
. n- v Bawn, 20 < '"I. 77, 36 Pac. Rep.
Barkness v. Russell, 118 U S
663, 7S. C Rep. 51 ; cf., Stephens v.
Gifford, 137 Pa St. 319, 20 Atl. Rep.
542.

11 Vt. 389,

1 Sompare Kendall v. Samson. 12
Vt. 515; Ridoul v. Burton, 27 Vt
Jewetl v. Guyer, 38 VI 209;
Fish v. Clifford. .->l Vt. 34 I ; Weeksv.
Preucott. 58 VI

Sarle v. Arnold, 7 R. I. 582 ;

Head v Gardiner, 1:; R. I. 257. See

[with v Burrough, L3 R. I 294 ;

1. II v Fairbrother, L2 R. I '.':;:{

\- to tin- rule in Connecticul

.' 251

1 v. Loomis, 29 N Y U2 ;

Blaul v. Gabler, 77 X. Y. 461 : Stark
v. Grant, 42 X. Y. St. Rep. 36, 16 N. Y
Supp. 526 ; Parmenter v. Pitzpatrick,
60 Hun (N. Y.) 580, 11 N. Y. Supp.
71s: Wallace v. Nodine, 57 linn
(N. Y.) 250, 10 N. Y. Supp. 919;
Siedenbach v\ Riley, ill N. Y. .")60,
20 X. Y. St. Rep. 124, L9 N. E Rep.
275 ; Preston v. Southwick, 115 X. V.
139, 21 X. E. Rep. 1031; PrentissToolA
Supply Co. v. Schirmer, 136 X. Y. 305,
32 N. E. Rep. 849. The facl thai a
valuable consideration was paid does
m»t shift the burden <>(' proof. Wal-
lace v. Nodine, 57 Hun (N. Y. 1 239,
in N. Y. Supp. 919; Miller v. Lock-
wood, 32 N. Y. 293 ; Ford v. Wil-
liam-. 24 X. Y. 359; Hollacher v.
I ' Brien, 5 Bun (N. Y.) 277 ; Burn-
ham \. Brennan, 71 N. Y. V)7 ;
Thompson v. Blanchard, I X. V. 303 ;
Mumper v. Rushmore, 79 X. Y. 1«J.

§250

RULE TN NEW VdkK A.ND OTHER S'l V.TES.

I-Si

given to repel the arbitrary inference of fraud resulting
from the neglect to change possession.1 If good faith is
established, it is not essential in that State to show "a
good reason for the want of change of possession,"8 which
is certainly crowding the rule to an extreme limit hostile
to the creditor interests. The principle that the possession
may be explained is extensively recognized. In addition
to the States already named, it obtains in New Jersey,3
Rhode Island,4 West Virginia,5 Virginia,6 Alabama,7
Louisiana,8 Ohio,9 Indiana,10 Michigan,11 Minnesota,1" Wis-

1 Stark v. Grant, 42 N. Y. St. Rep.
36, 16 N. Y. Supp. 526.

2 Mitchell v. West, 55 N. Y. 107 ;
Hanford v. Artcher, 4 Hill (N. Y.) 271.

3 Miller ads. Pancoast, 29 N. J.
Law 253 ; Sherron v. Humphreys,

14 N. J. Law 220. " The possession
by the vendor of personal chattels,
after the sale, is not conclusive evi-
dence of fraud. The vendee may,
notwithstanding, upon proof that the
sale was bona fide and for a valuable
consideration, and that the possession
of the vendor after sale was in pur-
suance of some agreement not incon-
sistent with honesty in the trans-
action, hold under his purchase
against creditors." Miller ads. Pan-
coast, 29 N.J. Law 253. But see Roe
v. Meding, 53 N. J. Eq. 356, 33 Atl.
Rep. 394, and Fletcher v. Bonnet, 51
N. J. Eq. 618, 28 Atl. Rep. 601, as to
the necessity for and effect of filing
mortgages on chattels.

4 Harris v. Chaffee, 17 R. I. 193, 21
Atl. Rep. 104 ; Mead v. Gardiner, 13
R. I. 257 ; Sarle v. Arnold, 7 R. I. 582.

5 Curtin v. Isaacsen, 36 W. Va. 391,

15 S. E. Rep. 171.

6 Howard v. Prince. 11 N. B. I." .
322 ; Davis v. Turner, 4 Gratt. (Va. )
423, a leading case of international

repute; Norris v. Lake, 89 Va. 513,
16 S. E. Rep. 663.

7 Mayer v. Clark, 10 Ala, 259;
Crawford v. Kirksey, 55 Ala. 282;
Moog v. Benedicks, 49 Ala. 512 ; Mc-
Ghee v. Importers' & T. Nat. I '.aide, 93
Ala. 192, 9 So. Rep. 734.

8 Keller v. Blanchard, 19 La. Ann.
53; Guice v. Sanders, 21 La, Ann. 463 ;
Devonshire v. Gauthreaux, 32 La. Ann.
1132; Yale v. Bond, 45 La. Ann. 997,
13 So. Rep. 587.

9 Hombeck v. Vanmetre, 9 Ohio
153 : Collins v. Myers, 16 Ohio 547 :
Thorne v. Bank, 37 Ohio St. 254.

111 Kane v. Drake. 27 Ind. 29 ; Rose
v. Colter, 76 Ind. 590; New Albany
Ins. Co. v. Wilcoxson, 21 Ind. 355;
Seavey v. Walker, 108 Ind. 78, 9 N. E.
Rep. 347.

11 Molitor v. Robinson, 40 Mich. 800,
perCooley J. ; Kipp v. Lamoreaux, 81
Mich. 304,45 N. W. Rep. 1002; Buhl
Ironworks v. Teuton, 67 Mich. 623,
35 N. W. Rep. 804.

'• Blackmail v. Wheaton, L3 Minn.
326; Benton v. Snyder, 22 Minn. 247;
Lathrop v. Clayton, 15 Minn. 104, 47
N. W. Rep. 544 ; Mack, liar v Pills-
bury, 48 Minn. 399, 51 N. W. Rep. 222;
( lamp v. Thompson, 25 Minn. l?">.

FRAl I 'i I 1 NT PER SI . § 25 1

consul,1 Nebraska," Nevada,' Arkansas,1 Kansas,"' South
Carolina," Texas,7 in the Federal tribunals,8 and the
District of Columbia.9

S251. Fraudulent per se or conclusive. — The cases just
considered give what may be termed the equitable and
charitable view of the question. But the policy embodied in
many of these cases, and in the statutes upon which they
are in certain instances founded, is not considered in some
of the States rigid or severe enough to suppress the evils
supposed to be engendered by this class of transactions.
Thus, in Connecticut, Loomis, J., in delivering the opinion
of the court in the case of Capron v. Porter,10 observed :
"That the retention of the possession of personal property
by the vendor after a sale raises a presumption of fraud
which cannot be repelled by any evidence that the trans-
action was bona fide and for valuable consideration, is
still adhered to and enforced by the courts in this State
with undiminished rigor, as a most important rule of public
policy. The reason of the rule is that as against a person
who was once the owner of the property, and all who
claim by purchase from him, the continued possession is

1 Wheeler v. Konst, 46 Wis. 398, Rep. 835: Stix v. Chaytor, ■">•'.. Ark.

1 X. W. Rep. 96; BlakesJee v. Ross- 117. 1? S. W. Rep. 707.

man, 13 Wis. 116; Osen v. Sherman, Phillips v. Reitz, 16 Kan. 396.

27 Wi- 505; Manufacturers' Bk. v. « Pregnall v. Miller, 21 S. C. 335.

Rugee, 59 Wis. 221,18 X. W. Rep. 'Traders' Nat. Bank v. Day. 87

251; Norwegian Plow ('<>. v. Han- Tex. in:;, jus. W. Rep. 1019; Gibson

thorn, 71 Wis. 529, 37 N. W. Rep. 825. v. Hill, 21 Tex. 225; Edwards v.

» Uhl v. Kol>is«m, 8 Neb. 272: Dickson, 66 Tex. 613, 2 S. W. Rep.

Densi • F.Tomer, 11 Neb. 392, 15 71*.

N. W Rep 731 : Paxton v. Smith, II s Warner v. Norton, 20 How. 448.

Neb. 56, 59 N. W Rep. 690. But Bee Hamilton v. Russel, 1 Cranch

Conway v. Edwards, <; Nev. 190. 310: Traversv. Ramsay, 3 Cranch »'.

Compare Doak v. Brubaker, 1 Nev. C. 354, 24 Fed. Cas. 1 13.

nini v. Kyle, 17 Nev, 209 » Justh v. Wilson, 19 Dist. Col. 529.

43 I lonn. 383 ; Gilbert v. Decker,

Norris, 28 \rk. 128. It 53 Conn. 405, 1 \tl. Rep. 685 ; Hueb-

is held in that State thai a construe- ler v. Smith. 62 Conn. 191, 25 Atl.

tive delivery i- sufficient. Shaul v. Rep. 658; Batetal v. Blakeslee, II

Harrington, 54 Ark, 805, 15 S. W. Conn. 302.

§ J51 FRAUDULENT PER SE. 45 5

to be regarded as a sure z'ndz'czum of continued ownership,
and that the possessor would obtain by such continued
possession a false credit to the injury of third persons,
if there was no such rule to protect them." 1 Clow v.
Woods2 is the leading- case in Pennsylvania. Gibson, J.,
said : " Where possession has been retained without any
stipulation in the conveyance, the cases have uniformly
declared that to be, not only evidence of fraud, but fraud
per sc. Such a case is not inconsistent with the most
perfect honesty ; yet a court will not stop to inquire
whether there be actual fraud or not ; the law will impute
it, at all events, because it would be dangerous to the
public to countenance such a transaction under any cir-
cumstances. The parties will not be suffered to unravel
it and show that what seemed fraudulent was not in fact
so."3 In Born v. Shaw,4 the court observed: "When
possession is retained by the vendor, it is not only
evidence of fraud, but fraud per se." In Maryland5 a bill
of sale may be recorded, and the title of the grantee is then
as effectually protected as if the sale had been accom-
panied by delivery.0 It is a well-settled doctrine in Ken-

1 Compare Osborne v. Tuller, 14 Shaw v. Levy, IT S. & R. (Pa.) 99 ;

Conn. 529; Norton v. Doolittle, 32 Born v. Shaw, 29 Pa. St. 288 ; Young

Conn. 405 ; Elmer v. Welch, 47 Conn. v. McClure, 2 W. & S. (Pa.) 151.

56; Hull v. Sigsworth, 48 Conn. 258; "Clow v. Woods, 5 S. & R. (Pa.) 275,

Hatstat v. Blakeslee, 41 Conn. 301 ; decided by this court inl819, is the

Seymour v. O'Keefe, 44 Conn. 128; magna charta of our law upon this

Meade v. Smith, 16 Conn. 346. See subject," per Sharswood, J., in

especially Hamilton v. Russel, I McKibbin v. Martin, 64 Pa. St. 356

Cranch 310 ; and compare Warner v. Stephens v. Gifford, IS7 Pa. Si 219,

Norton, 20 How. 448 ; Gibson v. Love, 20 Atl. Rep. 542. But as to Bubse-

4 Fla. 217; Monroe v. Hussey, 1 quent creditors, actual intent to

Oregon 188. defraud must be shown. Ditman v.

J5S. &R. (Pa.) 280. • Raule, 124 Pa. St. 225,16 Atl. Rep

3 See Thompson v. Paret, 94 Pa. St. 819.

275 ; Pearson v. Carter, 94 Pa. St. 4 29 Pa. St. 292,

156; McKibbin v. Martin, 61 Pa. B Kreuzer v. Cooney, 45 Md. 582,

St. 352; Garman v. Cooper, 72 Pa. « Clary v. Prayer. 8 G. & J. (Md.)

St. 37 ; Worman v. Kramer, 73 Pa. St. 416. See Price v. Pitzer, 11 Md. 527.

378 : Dawes v. Cope, 4 Binn. (Pa.) But see Smith v. Hunter, 5 Cranch < !

258 ; Davis v. Bigler, 62 Pa. St. 242 ; C. 467, 22 Fed. Cas. 574.

454

< ONFL1CTING POLICIES.

§252

tucky that where there is an absolute sale of movable
property, the possession must accompany the title, or the
sale will be void in law as to creditors or subsequent pur-
chasers, even though the contract contain a stipula-
tion that the vendor is to retain the possession till a
future day.1 After much conflict,' the rule seems to be
established in Missouri that a sale without delivery of
possession is conclusively presumed to be fraudulent.8 In
Illinois it is fraud per se to leave the vendor in posses-
sion.4 Much the same policy is pursued in Iowa,5 Cali-
fornia,0 Colorado,7 and Delaware.8

§ 252. Practical results of the conflicting policies. — Brush-
ing aside for the present the objections already outlined
to the prominence accorded the question of change of

Robbins v. Oldham, 1 Duv. (Ky.)
28 ; Brummelv. Stockton, 3 Dana (Ky.)
135; Bradley v. Buford, Sneed
(Ky.) 12; Morton v. Ragan, 5 Bush
K\ . I 334; cf. Vanmeter v. Estill, 78
K j 456. See Cummins v. Griggs, 2
DuvalliKv -:

8 See Claflin v. Rosenberg, 42 Mo.
448: Rocheblave v. Potter, 1 Mo. 561;
Foster v. Wallace, 2 Mo. 231; Siblej v.
Bood, :; Mo. 290; King v. Bailey, 6
Mo 575; Shepherd v. Trigg, 7 Mo. 151.
Claflin \. Rosenberg, 4-2 Mo, 448 ;
Bishop v. O'Connell, 56 Mo. 158; Bur-
gerl v. Borchert, 59 Mo. 80; Wrighl
v. McCormick, 67 Mo. 426. See state
ex ril. Baumunk v. Goetz, 131 Mo.
33 s w. Rep. 161.

•Thompson \. Seek, 2] III. 73;
Ticknor v. McClelland, 84 111. 471 ;
Deering \ Washburn, ill 111. 153, 29
N. E. Rep. 558 Buschle v. Morris,
131 111. 588, ,':; N. E. Rep. 648; Rozier
v. Williams. 92 III. is? ; Johnson v.
Holloway, 82 III. :'.:JI . Richardson
\ Rardin, 88111. 124; ( Ireenebaum v.
Wheeler,90 III. 296 ; Hart v. Win-. II
III. 1 ! 1 I'.nt the rule 'Iocs not apply

when the possession of the vendor is
consistent with the deed of sale, or
where the sale is of such a public
character as to give notoriety thereto.
Lowe v. Matson, 140 111. 108, 29 N. E.
Rep. 1036.

5 Prather v. Parker, 24 Iowa, 26;
Boothby v. Brown, 40 Iowa 104 ; Hes-
ser v. Wilson, 36 Iowa 152 ; Sutton v.
Ballou, 46 Iowa 517. See Wessels v.
McCann, 85 [owa 424, 52 N. W. Rep.
346.

,; See Lay v. Neville, 25 Cal. 552 .
Hesthal v. Myles, 53 Cal. 623 ; Woods
v. Bugbey, 29 Cal. 466; Brown v.
O'Neal, 95 Cal. 262, 30 Pac. Rep. 538 ;
Howe v. Johnson, 107 Cal. 67, 40 Pac.
Hep. 42 ; Rohrbough v. Johnson, 107
Cal. 149, 40 Pac. Rep. 37.

1 Allen v. Steiger, 17 Col. 552, 31
Pac. Rep. 226; Ray v. Raymond, 8
Col. 167, 9 Pac. Hep. 15; Finding v.
1 1 art man, 14 Col. 596, 23 Pac. Rep.
1004 ; Roberts v. Hawn, 20 Col. 77, 36
Pac. Rep. 886.

■ Mill.-r v. Lacey, 7 Houst. (Del.) 8,
30 Atl. Hep. 640.

§252 CONFLICTING POLICIES. 455

possession in controversies of the class under con-
sideration, it becomes important to consider which of
the two rules or policies just instanced is the more
salutary in practice. Possibly the creditor class would
oftener effect a recovery when the presumption of
fraud from failure to change possession is absolute.
It does not follow, however, that the latter rule is
a wise one, or the recovery in such cases always just. " In
seeking to catch rogues" it is not the proper function of
the courts to " ensnare honest men. We may become so
zealous against fraud as to restrain the free action of
honesty, a result that would be most disastrous. Better
is it that many frauds should go undetected than that the
means of detection or prevention should treat honest men
as guilty, or teach them to be always suspicious of their
neighbors, and watchful that honest acts be precisely
measured according to the standard of legal morality." '
Parties designing to make covinous alienations will so
frame their actions as to endeavor to leave no indicia, or
to create no presumptions of fraud. Honest people, on
the other hand, conscious of no design to wrong others,
and giving little thought to the appearance or form of the
transaction, are often the victims of unfortunate circum-
stances, and suddenly discover that the law imputes to
their innocent acts or omissions wicked designs, than
which nothing- was further from their minds. Hence
Cabell, J., in commenting upon the mischievous operation
of the absolute rule as to change of possession, said : " I
have found myself compelled as judge to pronounce
transactions to be fraudulent and void as to creditors
which were known to be perfectly fair and bona fuh\ and
were not intended or calculated to delay, hinder, or
defraud creditors."2 The rule creating a fraudulent

1 Hugus v. Robinson, 24 Pa. St. 2 Davis v. Turner, t GJratt. (Va.)

11. 422. 471.

456 CONFLICTING POLICIES. §252

presumption in these cases seems to be sufficiently severe
in its operation. A policy which blindly ignores the real
intent of the parties, practically excludes all evidence
concerning the transaction or its underlying motives, and
conclusively brands it as fraudulent by closing the
mouths of the witnesses, should be adopted with great
reluctance. In such cases "the question is not whether
the transaction was honest or otherwise, but whether
there is not that evidence of fraudulent intent which pre-
cludes inquiry into its integrity as a question of morals."
It is a rule of policy as well as of evidence.1 It seems
clear that : " The statute of frauds ought not to be con-
strued to make innocent parties sufferers." 2 That such
is often the result cannot be questioned. It was found in
Virginia that the cases of honest transfers in which the
vendor retained possession were too numerous and too
frequent to allow of a further adherence to the old
arbitrary rule of fraud per se. It resulted in the decision
of Davis v. Turner,3 repudiating the rule as to absolute
presumptions. The court said : " It seems to be carrying
a distrust of juries too far to suppose them incapable,
with the aid of a wholesome prima facie presumption, to
administer justice on this subject, in the true spirit of the
statute, and it is better to confine the interposition of the
court to guiding, instead of driving them by instructions,
and to the power of granting new trials in cases of plain
deviation." In the same case the court observe that the
conclusive presumption as a test of a fraudulent purpose
has no claim to certainty ; on the contrary, it concedes
its own fallibility, by crushing mercilessly the most
convincing evidence of fairness and good faith.4

Kirtland \. Snow, 20 ('nun. 28. 4 Cole, v. White. — "But when we

1 Sydnor v. Gee, 4 Leigh (Va.) 545 ; lookatthe daily business of life, out

Cadogan v. Kennett, 2 Cowp. 132, of court, another aspect of this ques-

I" 1 Lord Mansfield tion presents itself. Mortgages of

I Gratt. (Va.) 428, 111 personal property, as ships, lake

§253

CHANGE I IF Pi ISSESSION.

45/

i< 253. Actual change of possession required. — The words
" actual and continued change of possession " in the stat-
ute in New York, are construed to mean "an open pub-
lic change of possession, which is to continue and be
manifested continually by outward and visible signs, such
as render it evident that the possession of the judgment-
debtor has ceased." l In Crandall v. Brown,2 the court
observed that " possession cannot be taken by words and
inspection." It must be unequivocal, carrying with it the
usual marks and indications of ownership by the vendee.3
In Otis v. Sill,4 Paige, J., said : " It has been repeatedly
decided that ' if an assignee or morteaeee leaves o-oods
assigned or mortgaged in the possession of the assignor
or mortgagor as his agent, this is not an actual change of

vessels, canal boats, and river craft ;
the stock and implements of the
mechanic or small manufacturer ; the
furniture of the innkeeper ; assign-
ments for the benefit of creditors,
leaving the goods and debts assigned
publicly to be managed and disposed
of by the original owner as an agent,
best acquainted with the business,
and acting for the benefit of creditors
who have full confidence in his
integrity : all these have grown out
of the usages of modern society ; the
necessities of commerce ; the conven-
iences of daily life ; the wants and
usages of trade and industry. They
have followed in the train of com-
merce, credit, and enterprise. Like
them, they have been largely produc-
tive of benefits to society ; yet those
benefits, like the results of all other
human action, are not unmixed with
evil. By such means the adventure,
capacity, acquirements, and industry
of the young or needy have been aided
and stimulated ; large concerns of
honorable but unfortunate merchants
have been settled to the greatest
advantage of the creditors and the

least possible loss of the insolvent ;
and the kindness of parents or the
generosity of friends has been enabled
to preserve the comforts of a home to
the wife and children of a bankrupt
without the slightest injury or fraud
(save in legal fiction) to prior creditors
or subsequent purchasers. Society
reaps nothing but unquestioned
benefit from nine -tenths of such
assignments or securities occurring in
actual life." Cole v. White, 26
Wend. (N. Y.) 52:5.

1 Topping v. Lynch, 2 I Job. (N. Y.)
488; approved in Steele v. Benham,
84 N. Y. 638. Compare Hale v.
Sweet, 40 N. Y. 97; Cutter v. < ope-
land, 18 Me. 127; Osen v. Sherman.
27 Wis, 501; Lesem v. Herriford, II
Mo. 323 ; Morgan v. Ball, 81 Cal. 93,
22 Pac. Rep. 331, 5 L. K. A. 579 .
Smith v. Moore, 4 Tex. App. Civ.
Cases, S 217.

- 18 Hun (N. Y.)461, 463.

3 Shatter v. Alterton, 151 tf. S. 624,

14 S. C. Rep. 442; Stevens v. hum.

15 Cal. 507.

4 8 Barb. (N. Y.) 102, 122.

458 CHANGE OF POSSESSION. i -S3

possession within the meaning of the fifth section of the
statute of frauds." * Rolling barrels of whiskey apart
from the rest of the stock in the vendor's store and mark-
ing them with the buyer's name is not a change of pos-
session.2 In Billingsley v. White,3 Williams, J., in
delivering the opinion of the Pennsylvania Supreme
Court, said: "The delivery must be actual, and such as
the nature of the property or thing sold, and the circum-
stances of the sale will reasonably admit, and such as the
vendor is capable of making." A mere symbolical or con-
structive delivery, where an actual or real one is reason-
ably practicable, is of no avail, unless the property is not
capable of actual delivery.4 There must be an actual
separation of the property from the possession of the
vendor at the time of the sale, or within a reasonable
time afterward, according to the nature of the property.5
Where a husband gave his wife a bill of sale which she
accepted, and appointed him custodian of the property,
this was deemed sufficient.6 It is good if the possession
taken of the goods is such as the nature of the case would
permit.' The fact that the vendor is retained as a clerk
in charge of the goods is considered in some of the cases
to be only a circumstance bearing upon the question of
good faith,8 and is not in itself sufficient to invalidate the

'See Hanford v. Artcher, 4 Hill 55 Pa. St. 393 ; Pierce v. Kelly, 35 Ore.

N. X-.) 271. 9.1; Chickering v. White, 4'.2 Minn.

Burchinell v. Weinberger, 4 Col. 457, 44 N. W. Rep. 988 ; Morrison v.

A pp. 6, :;i Pac. Hep. 911. Oium, 3 N. Dak. 76, 54 X. W. Rep.

V.) l';i. St. 460. 288 : ('only v. Friedman, 6 Col. App.

• Lathrop v. < layton, 45 Minn. 124, 160, 40 Pac. Rep. 348.

47 N. W Rep. 544. 6 State ex rel. Brown v Mitchell,

Where the goods are Locked up 102 N. C. 348, 9 S. E. Rep. 102.

and the keys are delivered to the Manton v. Moore, 7 T. R. 71.

vendee, ;u><l thevendor removes from ' Smith v. Craft, 123 U. S. 436, 8

tli«' house, tin- is as effectual as S. C. Rep. 196 ; Bamberger v. School-

thougfa the vendee had actually re- held, 160 U. S. 164, 16 S. C. Rep. 225;

moved the property. Barr v. Reitz, Murray v. McNealy, *6 Ala 234, 5

58 Pa 81 556 See Benford v. Schell, So. Rep. 565; Richardson v. String-

§254 QUESTION FOR THE JURY.1 459

sale, but his retention would certainly be a dangerous
act in States where the continued possession cannot be
explained. It may be observed that the fact that a party
testified in a general way that he took possesion, or was
in possession, will have no weight when the evidence
shows precisely what was done.1 Where the purchaser
replenished the stock and waited upon the customers,
this was considered a change of possession ;2 and a wife-
may hold a valid possession against her husband without
separating from him.3

It is obvious from a casual consideration of these
cases that a change of possession which will protect the
title of the purchaser, as against creditors, must consist
of a complete surrender and discontinuance of the exer-
cise of acts of ownership by the vendor and the assump-
tion of such acts on the part of the vendee.

§ 254. Question for the jury. —The doctrine of Massachu-
setts,4 followed by many of the States, makes continued
possession, as evidence of fraud, a question for the jury.5
It is a question of intent to be settled by them as a ques-
tion of fact,0 even though the evidence of good faith and
absence of intent to defraud may be uncontradicted.'
If the jury err, justice may be obtained by setting the

fellow, 100 Ala. 416,4:22, 14 So. Rep. Griswold v. Sheldon, 4 X. V. 581 ;

283; Preston v. South wick, 115 N. Y. Davis v. Turner, 4 Gratt. (Va.) 422;

150, 21 N. E. Rep. 1031. Cutter v. Copeland. 18 Me. 127 ; Til

1 Steele v. Benham, 84 N. Y. 640; son v. Terwilliger, 56 N. Y. 273 . Smith
Miller v. Long Island R. R. Co., 71 v. Welch, 10 Wis. 91 ; Allen v. Cow. 11.
N. Y. 380. Compare Stanley v. Na- 23 N. Y. 507 ; Hollacher v. O'Brien, 5
tional Union Bk., 115 N. Y. 122. 22 N. Hun (N. Y.) 277 : Warner v. Norton,
E. Rep. 29. 20 How. 460; Scott v. Winship, 20

2 Butler v.Howell, 15 Col. 249,25 Ga. 430; Chamberlain v. Stern, 11
Pac. Rep. 313. Nev. 268; Goddard v. Weil, 165 Pa.

-Stanley v. National Union Bk.. St. 419, 30 Atl. Rep. 1000

115 N. Y. 122, 22 N. E. Rep. 29. "Miller ads. Pancoast, 29 N. J. Law

4 Ingalls v. Herrick, 108 Mass. 351. 254; Renninger v. Spat/., 128 Pa. St.

5 See Mead v. Noyes, 44 Conn. 487 ; 524, 18 Atl. Rep. 405.
Thompson v. Blanchard, 4 N. Y. 303 ; " Blaut v. Gabler, 77 X. Y. 461.

460 OVERCOMING PRESUMPTION — POSSESSION. ,^255.256

verdict aside,1 but otherwise the court is not entitled to
interfere with the prerogative of the jury.

§255. Overcoming the presumption. —The presumption
of fraud which the statute raises from the fact that there
was no actual change of possession of the chattels sold,
practically becomes conclusive if not rebutted or over-
come by competent proof in explanation." There is
nothing left for the jury to pass upon or to consider. On
the other hand, where the evidence repels the statutory
presumption, the trial court is justified in refusing to sub-
mit the question of fraud to the jury.3

It was observed in the Supreme Court of Kansas,4
that the law did not imply that one purchasing property
without taking actual possession, if there were creditors
of the vendor, was presumptively engaged in a fraudulent
transaction, and that his conduct was to be scrutinized
accordingly, but simply that one claiming under such a
purchase takes nothing until he shows good faith and
consideration.

£ 256. Possession within a reasonable time. — It is fre-
quently said that the vendee must acquire possession of
the subject-matter of the sale within a reasonable time.
According to some of the cases, a " reasonable time"
must be construed not with reference to the mere con-
venience of the party, but only with reference to the time
fairly required to perform the act of taking possession, or
doing what is its equivalent.5 The cases where it is held
that immediate delivery is not practicable are usually

Bollacher \. O'Brien, 5 Hun (N. -Prentiss Tool & Supply Co. v.

577 ; Potter v. Payne, -21 Conn. Schirmer, 136 N. Y. 305, 32 N. E.

Rep. 849. See Bulger v. Rosa. 119

Mayer v. Webster, 18 Wis. 396; N. Y. 459. 24 N. E. Rep. 853.

Cheatham \ Hawkins, 76 N. C. 338, 4 Kansas Pacific Ry. Co. v. Couse,

and cases cited ; State v. Rosenf eld, 17 Kan. 571-575.

:'-"> Mo. 172 See Grant v. Lewis, 14 See Seymour v. O'Keefe, 44 Conn.

Wis. 187 132; Meade v. Smith. 16Conn. 346.

§ 257 POSSESSION. 46]

illustrated in the books by the case of a sale of a ship at
sea where immediate delivery is a physical impossibility ;
and the same principle has been applied to a case where
the situation of the parties at the time of the sale was so
remote from the place where the property was situated,
that immediate manual delivery was impossible. What
is a reasonable time must be determined by the circum-
stances of each case ;1 no definite rule can be laid down.2
In Mcintosh v. Smiley'5 it was held that even if the taking
of possession was not within a reasonable time, the sale
would be sustained, if possession was taken and contin-
uously retained before the bringing of a suit by an existing
creditor.

§ 257. Change of possession must be continuous. — In a
controversy which arose in New York, it appeared that
the sale was accompanied by an immediate delivery of
the property to the vendee, and an actual change of pos-
session, and that, after considerable time had passed, the
property came again into the possession of the vendor.
It was decided that the law would not measure the lapse
of time from the sale and delivery to the renewed posses-
sion by the vendor directly from his vendee, and say that
a change of possession continued for a longer period
would satisfy the statute, but for a shorter period would
not have that effect. The statute was said to be impera-
tive that the sale must be followed by a continued change
of possession or the fraudulent presumption would
obtain.4 If, however, the vendor takes possession openly

1 State v. King, 44 Mo. 238 37; Young v. McClure, 2 W. <& S.

2 Bishop v. O'Connell, 56 Mo. 158. (Pa.) 147: Bacon v. Scannell, 9 Cal.
'107 Mo. 377. 17 S. W. Kep. 979. 271 ; Miller v. Garman, 69 Pa. St. 134;

Sec also Markev v. Umstattd, 53 Mo. Norton v. Doolittle, :52 Conn. 405;

Api>. 20. Clark v. Lee, 7s Mich. 221, 231, ll N.

4 See Tilson v. Terwilliger, 56 N. Y. W. Rep. 260; Eopkins v. Bishop, 91

27:); Garman v. Cooper, 72 Pa. St. Mich. 328, 51 N. \Y. Rep. 902.

462 RESUMPTION 01 POSSESSION. §258

as agent of the vendee, this fact does not raise a pre-
sumption of fraud.1

£ 258. Temporary resumption of possession. — Where it
appears that the property passed into the hands of the
vendor for a mere temporary purpose, and under circum-
stances which showed that the return of the property was
not effected with a view of enabling the vendor to use it
as his own while the legal title was in another, the cred-
itors of the vendor will not be authorized to attack the
sale as fraudulent and void. This was held where the
subject-matter of the sale was a cutter which the vendee
occasionally allowed the vendor to use.2 Where after
delivery the vendor takes forcible possession, his so doing
does not render the property liable to seizure by his cred-
itors.3 Questions of this class often depend for their
solution upon the locus of the action ; whether it be in a
State where the presumption can be rebutted or one
where it is conclusive. By way of contrast with Knight
v. Forward, is Webster v. Peck,4 where it appeared that
a vendor, who had sold a horse, within a week after the
sale hired him of the vendee, and was using him to all
appearances as his own, in the same manner as before the
sale. This was considered to be a restoration of the pos-
session,5 and the vendee lost his horse to an attaching
creditor of the vendor.6

Stanley v. Nat. Union Bank. L15 i Knight v. Forward, <;:; Hail.. (N.

N. Y. 122,22 N. K. Rep. 29; Hopkins Y.) 311.

\ Bishop. 91 Mich. 328,51 N. W. Rep. Posl v. Berwind-White Coal Min-

Reed v Minor, :: Cranch C. < '. ingCo., 176 Pa. St. 297, 35 Atl. Rep.

I ■ -l Cas. 446; Bell v. Mc- 111.

Closkey, L55 Pa. St. 319, 26 Atl Rep. 4 «1 Conn. 495.

547 . State ex rel. Smith v. Flynn, 56 Sec Davis v. Bigler, 62 Pa. St. 248 :

Wo Ipp. 236; Crawford v. Neal, I II Barr v. Reitz, 53 Pa. St. 256.

1. 9 585, 12 s C. Rep 759; cf. 5 Compare Bond v. Bronson, 80 Pa.

Thornton v. Cook, 97 Ala 630, 12 So. St. 360; Johnson v. Willey, 46 N. II.

R< p W8. 75 ; Lewis v. Wilcox, G Nev. 215.

§§259,260 POSSESSION OF BAILEE. 463

55259. Concurrent possession insufficient. — The authori-
ties seem to be almost unanimous in holding that concur-
rent possession by the vendor and vendee will not satisfy
the rule or the statute requiring a change of possession.1
"There cannot, in such case," said Duncan, J., "be a
concurrent possession ; it must be exclusive, or it would,
by the policy of the law, be deemed colorable."3 Again,
it is said to be " mere mockery to put in another person
to keep possession jointly with the former owner."3 In
Wordall v. Smith,4 Lord Ellenborough observed : " To
defeat the execution by a bill of sale, there must appear
to have been a bona fide, substantial change of posses-
sion A concurrent possession with the assignor

is colorable. There must be an exclusive possession
under the assignment, or it is fraudulent and void as
against creditors." 5 So it is no change of possession to
leave the property in charge of the vendor's agent. (i

§260 Possession of bailee- —The sale of personal prop-
erty in the hands of a bailee is good against an execution
creditor, though there be no actual delivery, provided the
vendor do not retake the possession.7 In Dempsey v.
Gardner,s Chief-Justice Gray said : " Where property
sold is at the time in the custody of a third person, notice

1 Sumner v. Dalton, 58 N. H. 296 ; But compare Allen v. Cowan, 23 N.
Lang v. Stockwell, 55 N. H. 561; Y. 502 ; State ex rel. Smith v. Mynn,
Steelwagon v. Jeffries, 44 Pa. St. 407. 56 Mo. App. 236.

< iompare Townsend v. Little, 109 U. " Linton v. But/, 7 Pa. St. 89 ; Wor-

S. 504, 3 S. C. Rep. 357. man v. Kramer, 7:! Pa. St. 385 ; I tood-

2 Clow v. Woods, 5 S. & R. (Pa.) win v. Kelly, 42 Barb. (N. Y.) 194.
287. SeeMcKibbin v. Martin, 64 Pa. 8 127 Mass. 381, 383. The bailee in
St. 359, per Sharswood, J. ; Regli v. such case must either relinquish to
McClure, 47 Cal. 612: Brawn v. Kel- the purchaser or consent to hold as
ler. 43 Pa. St. 106. his bailee. Campbell v. Hamilton, 63

8 Babb v. Clemson, 10 S. & R. (Pa.) Iowa 293, 19 N. W. Rep. 220; Bil-

428. See Worman v. Kramer, 73 Pa. dreth v. Fitts, 53 Vt. 684; Morrison

St. :57S. v. Oium, 3 X. Dak. 76, 51 N. \V. Rep

4 1 Campb. 332. 288; Buhl Iron Works v. Teuton, 67

5 See Trask v. Bowers, 4 N. H. 31 1. Mich. 623, 35 N. W. Rep. 804.

6 Brunswick v. McClay, 7 Neb. 137.

464 N< ' DELIVERY. § 261

to him of the sale is sufficient to constitute a delivery as
against subsequent attaching creditors." ' The reason of
the rule calling for change of possession is entirely satis-
fied in such cases. ~

S 261. No delivery where purchaser has possession. —
Where at the time of the sale the property is in the pos-
session and subject to the control of the vendee, the law
does not require an act of delivery. The sale is complete
without it.3 In Warden v. Marshall,4 Hoar, J., said :
'' The oil being already in the plaintiff's possession in the
bonded warehouse, no other delivery was necessary to
complete the sale." In Lake v. Morris,5 Hinman, C. J.,
observed: "At the time of the purchase the plaintiff
was keeping the horses for his nephew, and the defendant
claims that, because there was no formal delivery of the
possession of them by the vendor to the purchaser, the
sale was in point of law fraudulent and void against cred-
itors. Of course no such delivery could have taken place
without first taking the horses from the plaintiff's posses-
sion for the mere purpose of redelivering them to him
again. But a merely formal act like this we presume
would never occur between parties whose only object was
to place the purchased property in the hands of the pur-
chaser for his use." But where a principal transferred his
property to his agent who resided at the store and did
business in the name of the principal, it was held that
unless the agent made known to the public that he held

1 Citing Tuxworth v. Moore, 9 Pick. Burlburd v. Bogardus, 10 Gal. 519 ;
Mass.) 347; Carter v. Willard, 19 Doak v. Brubaker, 1 Nev. 218; Flan-
Pick. (Mara.) 1 ; Russell v. O'Brien, agan v. Wood, 33 Vt. 338. See Ches-
127 Mara; 349 See Hildreth v. I'itts. ter v. Bower, 55 Cal. 46.
53 Vt. 684 ; Doak v. Brubaker, 1 Nev. ' Martin v. Adams. 104 Mass. 262;
218 ; How v. Taylor, 52 Mo. 592 ; Ken- Warden v. .Marshall. 99 Mass. 305 ;
• 1 . 1 1 : \. Fitts, 22 N. 111. Nichols \. Patten, 18 Me. 231 ; Lake

• The rule i^ otherwise as l" a mere v. Morris, 30 < !onn. 204.

servant ; the possession "l a servant ' 99 .Mass. 306.

i- 1 In' possession "I' his employer. ' 30 Conn. 204.

§262 TECHNICAL DELIVERY NOT ESSENTIAL. 465

as principal and no longer as agent, the sale would be
treated as fraudulent.1

§262. When technical delivery is not essential. — In some
instances the necessities of the case render a technical
delivery of the property impossible;2 in such cases the
usual penalties will not be visited upon the purchaser.
Thus a sale of cattle roaming over uninclosed plains with
those of other owners, if bona fide, will not be invalid as
against creditors of the vendor, merely for want of deliv-
ery, until the purchaser has had a reasonable time to sep-
arate and brand the cattle ; and the branding of the cattle
by the purchaser will constitute a good delivery, although
the cattle are afterward allowed to remain in the same
uninclosed range of pasture.3 It is not essential that a
transfer of stock should be made on the books of a cor-
poration, to be valid against attaching creditors, when not
called for by some positive provision of the charter.4

A symbolical delivery of a large quantity of logs,
landed upon a stream preparatory to driving, has been
considered sufficient.5 The law accommodates itself to
the necessities of the business and the nature of the
property, making a symbolical delivery sufficient where
nothing but a constructive possession can ordinarily be
had.6 Where actual delivery is not possible by reason of
bulkiness the property should be promptly placed within

1 Comly v. Fisher' Taney's Dec. 57 Me. 9. The same rule applies to
121, 6 Fed. Cas. 207. bricks. Hawkins v. Kansas City Hy-

2 Goddard v. Weil. 165 Pa. St. 419. draulic Press Brick Co., 63 Mo. App.
30 Atl. Rep. 1000 ; Lathrop v. Clay- 64.

ton, 45 Minn. 124, 47 N. W. Rep. 544. 6 Compare Terry v. Wheeler, 25 N.

3 Walden v. Murdock, 23 Cal. 540. Y. 520; Boynton v. Veazie, 24 Me.
Contra, Sutton v. Ballou, 46 Iowa 286: Doak v. Brubaker, 1 Nev. 218;
517. Long v. Knapp, 54 Pa. St. 514 ; Allen

4 Boston Music Hall Assoc, v. Cory, v. Smith. 10 .Muss. 308; Tognini v.
129 Mass. 435. See Beckwith v. Bur- Kyle, 17 Nev. 215,30 Pac. Rep. 819.
rough, 13 R. I. 294, and cases. But compare Wilson v. Hill, 17 Nev.

5 Bethel Steam Mill Co. v. Brown, 401, 30 Pac. Rep. 1070.

30

^66 EX< USING WANT OF CHANGE OF POSSESSION. ^263

the exclusive power and control of the purchaser.1 " It
often happens," says Sharswood, J., "that the subject of
the sale is not reasonably capable of an actual delivery,
and then a constructive delivery will be sufficient. As in
the case of a vessel at sea. of goods in a warehouse, of a
kiln of bricks, of a pile of squared timbers in the woods,
of goods in the possession of a factor or bailee, of a raft
of lumber, of articles in the process of manufacture,
where it would be not indeed impossible, but injurious
and unusual to remove the property from where it happens
to be at the time of the transfer.1' a

£ 263. Excusing want of change of possession. — I he con-
tention was urged by counsel, in Mitchell v. West,8 that
in addition to proof that the sale of the chattels was bona
fide, and that there was no intent to defraud the creditors
of the vendor, it was necessary to show some valid
excuse or reason for leaving the property in the posses-
sion of the vendor, or stated in another form, that the
absence of intent to defraud creditors could not be estab-
lished without showing a good reason for the want of
change of possession. The court, upon the authority of
Hanford v. Artcher,4 held that this was not the case.
The very purpose of the law in presuming fraud from a
failure to deliver possession was to suppress sales made
in bad faith and without consideration. Manifestly this
presumption ought to disappear where both good faith

Bfiller v. Lacey, 7 Houst. (Del.) 8, Mass. 308; Conway v. Edwards, 6

BO Atl. Rep. 640. N.-v. 190 ; Walden v. Murdock, 33

McKibbin v. Martin, tit Pa. St. Cal. 540; Cartwrighl v. Phoenix, 7

Citing Clow v. Woods, 5 S. A Cal. 281 ; Woods v. Bugbey, 29 Cal.

R. (Pa.) 275 ; Cadbury v. Nolen, 5 Pa. 472 ; Lathrop v. Clayton, 45 Minn.

;.'u. Linton v. Hut/.. 7 Pa. St. 89 : 124, 17 X. W. Rep. 544 ; Garretson v.

Eaynesv. Hunaicker. 26 Pa. St. 58 ; Backenberg, 144 Pa. St. 107, 22 Atl.

Chase v Ralston, :;<> Pa. St. 589; Barr Rep. 875 ; Bell v. McCloskey, 155 Pa.

\ Reitz,58 Pa St. 256 . Benford v. St. 319, 26 Atl. Rep. 547.

Schell, 55 Pa Si 898. See ah.. Fitch 55 \. Y. 107.

v. Burk, 88 VI ••.-::: Hutching v. Gil- l4 Hill (N. Y.) 271.
christ, '-,:>. Vi. 82 . Ulen v. Smith, i<»

§ 264 POSSESSION 1 U RE X I IN. 467

and consideration are proved to exist. Clute v. Fitch '
is an illustration of a sufficient excuse for failing to
change possession. A sleigh was sold in July, and owing
to the difficulty of removing it at that season of the year,
was stored, by agreement, in the vendor's barn until the
ensuing winter. This was considered a satisfactory
explanation of the failure to change possession. It may
be here noted that a vendee may continue at the old
stand the business which he has purchased of the
vendor.2

§ 264. Change of possession of realty. — There seems to
be a distinction recognized in the law as to the effect of
a failure to change possession of realty as distinguished
from the rule applicable to personalty. In Phettiplace v.
Sayles,3 a leading and highly important case, Story, J.,
said: "Another circumstance, relied on to invalidate the
good faith of this conveyance, is, that no change of
possession took place, but the grantor continued in
possession notwithstanding the sale, and occupied the
farm as he had been accustomed to do. This circumstance
is not without weight, and, in a doubtful case, would
incline the court not to yield any just suspicions arising
from other causes. But possession, after a sale of real
estate, does VioX. per se raise a presumption of fraud, as it
does in the case of personal estate. In the latter case,
possession is prima facie evidence of ownership, and
where a party, who is owner, sells personal property
absolutely, and yet continues to retain the visible and
exclusive possession, the law deems such conduct a con-
structive fraud upon the public, and the sale as to cred-
itors wholly inoperative, whether it be for a valuable
consideration or not. This doctrine has its foundation in
a great public policy, to protect creditors against secret

1 2o Barb. (N. Y.) 428. ; 4 Mason, 321.

3 Ford v. Chambers, 28 Cal. 13.

ji.S POSSESSION OF REALTY. §264

collusive transfers. The same rule does not apply to real
estates. Possession is not here deemed evidence of
ownership The public look not so much to posses-
sion as to the public records as proofs of the title to such
property. The possession, therefore, must be inconsistent
with the sale, and repugnant to it in terms or operation,
before it raises a just presumption of fraud." ' The rule
seems to be established in New York to the effect that
the continuance in possession of the grantor is merely a
circumstance proper to be considered in connection with
other evidence tending to establish a design to defraud
creditors, but it did not of itself warrant a finding as a
legal conclusion that the deed was fraudulent,2 and no
presumption of fraud is raised by such continuance in
possession and receipt of profits where these acts are in
accordance with the terms of the deed.8

The reader must not be misled by the observation of
Judge Story, that " possession is not here deemed evidence
of ownership." The word " here" is significant in this
connection. The rule enunciated by the learned court is
partially founded on the disinclination of the law to
presume fraud and is limited in its application. Pos-
iion, on the other hand, ordinarily raises a presump-
tion of ownership by the occupant of real property. True

See Every v. Edgerton, 7 Wend, where a chattel is sold, because the

(N. Y. 260; Bant <>r the U. S. v. title to the former is evinced by

Housman, 6 Paige (N. Y.) 526 ; Fuller possession, not of the thine;, but of

v. Brewster, 53 Md. 363; (Mark v. the title deeds, which, like manual

Krause, 2 Mackey d> C.) Mo occupation in the case of a chattel, is

I'lnte v. Newkirk, 16 N. Y. 684. the criterion." SeeTibbakn Jacobs,

Compare Steward v. Thomas, :;.-, \|,,. :;i Conn. 431 ; Merrill v. Locke, 41 N.

a v. Burgett, :;:; Ark. B. 489 ; Ludwig v. Highley, 5 Pa. St.

Tompkins v. Nichols, r,:; Ala. 183; Allentown Bank v. Beck. 49 Pa.

197; Collins x. Taggart, 57 Ga. 355. St. 394; Paulling v. Sturgus, 3 Stew.

^verj x. Street, 6 Watts (Pa.) (Ala.) 95 ; Suiter v. Turner, 10 Iowa

849. Chief -Justice Gibson said : "It is 517,

well established thai where land is Alexander \. Todd, I Bond 175,

conveyed want of correspondent pos I Fed. < 'as. :;s:; : Hildreth v. Sands,

of fraud than 2 Johns. Ch. (X. V.) 46.

§ 265 CHANGE ON JUDIC1 \l. SALE.

it is the lowest degree of title, but nevertheless it is evi
dence of ownership;1 descends to heirs ; 2 is subjeel to
taxation;3 may be sold at sheriff's sale;1 and is suffi-
cient proof of title to support ejectment against tres-
passers.5 In these cases the presumption of ownership
arising from possession is indulged because it does not
conflict with an honest and lawful intention, and does not
lead to a conclusion bearing the stigma of fraud.

§265. Change of possession on judicial sale. — The rule is
promulgated in Pennsylvania that a change of possession
is not necessary to give validity to a judicial sale." Chief
Justice Sharswood said, in Smith v Crisman :7 "Nothing
is better settled in this State than that the purchaser of
personal property at sheriff's or constable's sale may leave
it in the possession of the defendant, as whose property
it was sold, under any lawful contract of bailment." The
retention of possession in such a case is not a badge of
fraud, because the sale is not the act of the party retain-
ing the property, but is the act of the law, and being a
judicial sale, conducted by a sworn officer of the law, is
deemed to be fair and honest until proved otherwis

The rule is quite universal in its application that where
a stranger purchases and pays for property on execution
sale, his failure to remove it from the possession of the
defendant in execution does not render the sale fraudulent
per se or presumptively fraudulent.9 Under the statute

1 Rawley v. Brown, 71 N. Y. 85. Scott, II Bow.282. See Burl \. Pan-

See Ludlow v. McBride, 3 Ohio, 241 ; jaud, 99 U. 8. 180 ; Sedgwick & Wait

Phelan v. Kelly, 25 Wend. (N. Y.) on Trial of Title to Land, Chap.

389 ; Teabout v. Daniels, 38 Iowa 158; XX VII.

Gillett v. Gaffney, 3 Col. 351. G Bisbing v. Third Nat. Hank.'.)::

J Mooney v. Olsen, 21 Kan. G91- Pa. St. 79 ; Maynes v. Atwater, 88 Pa

697. St. 496.

3 Black well on Tax Title?, pp. 5, 6. ' 9J Pa. St. 430.

4 Yates v, Yates, 76 N. C. 142. 'Craig's A.ppeal, 77 Pa. St. 156;
6 Jones v. Easley, 53 Ga. 454 ; Bates Myers v. Harvey, 2 I'. & W. Pa

v. Campbell, 25 Wis. 614 ; Doe v. ' Abney v. Kingsland, 10 Ala

West, 1 Blackf. (Ind.) 135 : Christy v. Latimer v. Batson, 7 DowL & R. 106

47<D DELIVERY OF GROWING CROPS. §266

in New York,1 however, as interpreted by the courts,2 the
execution sale will be presumptively fraudulent unless
accompanied by immediate delivery, and followed by an
actual and continued change of possession, whether the
plaintiff in execution or a third person be the purchaser.
The reason of the rule and the evil at which it is aimed is
said to justify these decisions. Finch, J., observed : "As
an honest purchaser buys because he wants the property
and its possession, and, therefore, naturally and usually
takes it, the absence of this fact indicates some purpose
different from that of an honest purchaser, and requires
proof of good faith and honest intention. These consid-
erations apply equally to cases where the transfer of
title from the vendor is through the agency of a judg-
ment and execution followed by a sheriff's sale."3

£266. Delivery of growing crops. — Where the property
which is the subject-matter of sale is a growing crop,
there is much dissension in the cases as to delivery of
possession. It is said in Illinois that in the case of stand-
ing crops the possession is in the vendee until it is time
to harvest them, and until then he is not required to take
manual possession of them.4 Chief-Justice Cockburn, in
speaking upon this subject, said: " It is impossible that
there can be present delivery of growing crops. A grow-
ing crop is valueless, except so far as by its continuing
growth it may hereafter benefit the purchaser, and it is

Anderson v. Brooks, 11 Ala. 953; Gardenier v. Tubus, 21 Wend. (N. Y.)

Walter v. Gernant, 1:: Pa. St. 515 ; 109.

Dick v. Lindsay, 3 Grant (Pa.) 431 ; ' Stimson v. Wrigley, 86 N. Y. 336.

Poole v. Mitchell, 1 Hill's (S. C.)Law See Wallace v. Nodine, 57 Hun (N.

404;Guignard v. Aldrich, 10 Rich. Y.)245, 10 N. Y. Supp. 919.

Eq. s. C.) 853. See Hanford v. * Ticknor v. McClelland, 84 111. 471.

Obrecht, 49 111. lit; Compare O'Brien See Bull v. Griswold, 19 111. 631;

v Chamberlain, 50 Cal. 285. Thompson v. Wilbite, 81 111. 356;

; 3 N. Y. I:, s. 222, .>:.-,, 6. Bellows v. Wells, 36 Vt. 600. Coni-

Stimson v. Wrigley, 86 X. Y. 336 ; pare Quiriaque v. Dennis, 24Cal. 154.

Fonda v. Gross, ISWend. (N. Y.) 628; Sec State v. Casteel, 51 Mo. App. 148;

State v. Durant, 53 Mo. Apj). 493.

£267 POSSESSION Willi POWER OF SALE. I71

only when it reaches maturity that it can be removed, nor

is it intended that it shall be removed till it is ripe

In a popular and practical sense, growing crops are no
more capable of removal than the land itself." ' Kent
said : " I do not know that corn, growing, is susceptible
of delivery in any other way than by putting the donee
into possession of the soil." Yet authority can be cited
to the effect that the vendee does not acquire good title
in such cases.2

§ 267. Possession with power of sale.— The effect of leav-
ing a mortgagor in possession of the mortgaged goods,
with power to sell the property and substitute by purchase
other property in its stead, has created much dissension
in the courts, and engendered a vast amount of litigation.
The question came up before the United States Supreme
Court in Robinson v. Elliott,3 a case which we shall pres-
ently consider at length.4 The mortgagors were author-
ized by the express terms of the mortgage to continue in
possession of the mortgaged wares and merchandise, sell
the same, supply their places with other goods by pur-
chase, the lien of the mortgage to extend to the replen-
ished stock. The mortgage was adjudged absolutely void.
It was said that whatever might have been the motive
which actuated the parties to the mortgage, it was mani-
fest that the necessary result of what they did was to
allow the mortgagors, under cover of the mortgage, to
sell the goods as their own, and appropriate the proceeds
to their own purposes, and this, too, for an indefinite
length of time. A mortgage which in its very terms con-
templates such results, besides being no security to the

1 Brantoru v. Griffits, L. R. 2 C. P. Stone v. Peacock, 35 Me. 385 See
D. 212. Raventas v. Green, 57 < !al. 255.

2 Smith v. Champney, 50 Iowa 174 ; 3 22 Wall. 513.

Lanison v. Patch, 5 Allen (Mass.) 586; 4 See infra. Chap. XXII.. on Fraud

ulent Chattel Mortgages.

47- POSSESSION WITH POWER OF SALE. §267

mortgagees, operates in the most effectual manner to ward
off other creditors ; and where the instrument on its face
shows that the legal effect of it is to delay creditors, the
law imputes to it a fraudulent intent.1

1 See Egdell v. Hart, 9 N. Y. 213. these shifting liens. See Etlieridge
There is much confusion in the an- v. Sperry, 139 U. S. 266, 11 S. C. Rep.
thorities concerning the validity of 565.

CHAPTER XVIII.

EVIDENCE.

£ 268. Concerning evidence.

269. Competency of party as wit-

ness.

270. Proof and conclusiveness of

judgments.

271. Burden of proof.
271a. Books of account.

272. Secret trust.

273. Proof of insolvency of debtor.

274. Insolvency of vendee.

275. General reputation.

276. Concerning res gestae,.

277. Declarations before sale —

Realty and personalty.

§ 278. Declarations of debtor after
sale.

279. Possession after conveyance.
219a. Professions of good faith.
279l>. Intention — Knowledge.
279c. Consideration.

280. Declarations of co-conspirators.

281. Proof of circumstances.

282. Other frauds.

283. Suspicions insufficient.

284. Proving value
284a. Recitals in deed.

285. Testimony must conform to

pleadings.

"Where fraud appears courts will drive through all matters of form." — Buck v. Ver
Ind. 117.

§ 268. Concerning evidence. — Manifestly general princi-
ples and rules of evidence cannot receive extended con-
sideration in a special treatise relating to fraudulent
alienations and creditors' bills. The sufficiency of the
proofs requisite to uphold or defeat a creditor's proceeding
to discover equitable assets or annul fraudulent transfers
must, however, necessarily receive passing attention in its
prominent and peculiar phases. The character of the
evidence germane to the subjects of consideration,1
notice,2 intention,3 badges of fraud,4 creditors' liens,5 and
change of possession, (i has been regarded as of sufficient
importance to call for incidental treatment in separate
chapters devoted to those topics, and will not be here
discussed anew. Voluntary and fraudulent conveyances,

1 See Chap. XV.

2 See Chap. XXIV.

3 See Chap. XIV.

4 See Chap. XVT

5 See Chap. IV.

6 See Chap. XVII.

474 COMPETENCY AS WITNESS. §269

as elsewhere shown,1 are regarded as valid and operative
between the parties. Only a creditor2 or a purchaser
from the donor or grantor can assail them, or inquire into
the consideration, or the intent inspiring their execution.
If the relationship of debtor and creditor is not admitted,
the burden of proving it rests upon the creditor; the
primary question in such cases is the existence of this
relationship,3 for if it is not established, then the com-
plainant stands in the attitude of an intermeddler, raising
a clamor which a court of equity would be illy employed
in silencing.4 The evidence in these actions takes a wide
range.5 The debtor's acts, statements, correspondence,
the character of his business, and his debts, may be
investigated.6 And contracts are to be interpreted
according to the law of the State where made — the lex
loci — unless it is plain the laws of some other State were
in view.7

£ 269. Competency of party as witness.— Not only is it
permissible for the defendant to testify as a witness in an
equity cause,8 but he may be compelled, under the mod-
ern procedure, to give evidence upon the demand of the
complainant.9 The rule of the common law that no
party to the record could be called as a witness for or
against himself, or for or against any other party to the

1 !hap. WW I 468, 32 N. E. Hep. 666; Ferbrache v.

Sawyer \. Harrison, 43 Minn. 297, Martin (Idaho, L893), 32 Pac. Rep. 252;

46 N. W. Rep. 434. Silvis v. Oltmann, 53 III. A.pp. 392.

Cook \. Eopper, 23 Midi. 517, per 6 Brittain v. Crowther, 54 Fed. Rep.

Cooley, .1. See Stanbro v. Hopkins. 295 ; Jenne v. Joslyn, 41 V). 478.

88 Barb. (N. F.) 271; Edmunds v. ' Chillingworth v. Eastern Tinware

Mister, 58 Miss 765; Donley v. Mc- Co., 66 Conn. 318,33 Atl. Rep. 1009.

Kiernan, 62 Ala. 34. Where fraud is allege. I as the basis

4 Means v. Sicks, 65 Ala. 24:!. of an action, it must he proved.

Nicolay v. Mallery, 62 Minn. 119, Truesdell v. Bourke, 145 N. V. 612,

64 N W. Rep. 108; Trumbull v. Bewitt, 40 N. E. Rep. 83.

an. 67, 81 Ail. Rep. 492; Miller » Clark v. Krause, 2 Mackey(D.C)

Eanley, 94 Mich. 258, 58 N. W. 571.

Rep 962 . O'Donnell v. Hall, 157 Mass. 'Texas v. Chiles, 21 Wall. 488.

§ 270 PROOF OF fUDGMENTS. 475

suit,1 has been almost wholly abrogated.8 Mr. Justice
Swayne said in Texas v. Chiles:3 "The innovation it is
believed, has been adopted in some form in most if not
in all the States and Territories of our Union.4 It is
eminently remedial, and the language in which it is
couched should be construed accordingly." Objections
to the admissibility of testimony must be specified.5

§ 270. Proof and conclusiveness of judgments. — We have
already discussed the principle underlying the rule which
requires a judgment as the foundation of a creditor's pro-
ceeding to annul fraudulent alienations or discover equi-
table assets ;6 and the sufficiency or insufficiency of par-
ticular judgments to satisfy this exaction.7 A judgment,
unless rendered without jurisdiction, is not open to col-
lateral attack.8 It follows from what has been already
said, and indeed has been expressly decided, that a vol-
untary conveyance will be upheld as regards a judgment
rendered against the debtor upon a fictitious debt.'-1 It
may be observed that where no evidence is offered to
impeach the judgments, and it appears that they were
regularly rendered by courts having jurisdiction, and were
conclusive as between the parties, such judgments are
competent evidence tending to prove the debt, even as to
third parties, until something is shown to the contrary by

1 1 Greenleafs Ev. §§ 329. 330. 8 Dreyfuss v. Seale, 18 Misc. (N. Y.)

sSee Texas v. Chiles, 21 Wall. 488 ; 551, 41 N. Y. Supp. 875: Cooper v.

Clark v. Krause, 2Mackey(D. C.)571. Reynolds, 10 Wall. 316; White \

3 21 Wall. 490. Bogart, 73 N. Y. 256, 259: Candee

4 Citing 1 Greenleaf on Evidence, v. Lord, 2 N. Y. 269. A court of on.-
§ 329. State may, where it lias jurisdiction

5 Adams v. Franklin, 82 Ga. 168, of the parties, determine the question
8 S. E. Rep. 44. whether a judgment between them,

6 See Chap. IV. §§ 74-77. rendered in another Stat.', was ob-
1 See §£ 76, 77 ; Lindsey v. Delano, tained by fraud, and if it was may en-

78 Iowa 350, 43 N. W. Rep. 218; join the enforcement of it. Davis v.

Boyer v. Berryman, 123 Ind. 451.24 Cornue, 151 N. V. 179, 15 N. E. Rep.

N. E. Rep. 249 ; Spotts v. Common- 449.

wealth, 85 Va. 531, 8 S. E. Rep. 375. 9 King v. Tharp, 26 Iowa 288

476

PROOF OF JUDGMENT.

§ 2/0

way of impeachment.1 A third party may, as a general
rule, show that the judgment was collusive, and not
founded upon an actual indebtedness or liability.3 Were
the rule otherwise the greatest injustice would result,
since a stranger to the record cannot ordinarily move to
vacate the judgment or prosecute a writ of error or an
appeal.3 The fact that a judgment is entered upon an
offer to allow it does not render such judgment collusive
in any sense.4 Teed v. Valentine 5 is a peculiar case relat-
ing to the admissibility of evidence to explain a judgment
and the motives of the debtor. In that case it appeared
that the debt, which was merged in the judgment, repre-

'Vogt v. Ticknor, 48 N. H. 245;
Church v. Chapin, 35 Vt. 231 ; N. Y.
& Harlem R. R. Co. v. Kyle, 5 Bosw.
(N. Y.) 587; Hills v. Sherwood, 48
Cal. 386 ; Law v. Payson, 32 Me. 521 ;
Clark v. Anthony, 31 Ark. 546. See
Good now v. Smith, 97 Mass. 69 ; Law-
son v. Moorman, 85 Va. 880, 9 S. E.
Rep. 150 ; Wilkerson v. Schoonmaker.
77 Tex. 615, 14 S. W. Rep. 223 ; Por-
mann v. Frede, 72 Wis. 226, 39 N. W.
Rep. 385 ; Schmidt v. Neimeyer, 100
Mo. 207, 13 S. W. Rep. 405 ; Adams v.
Franklin, 82 Ga. 168, 8 S. E. Rep. 44 ;
(rim v. Kessing, 89 Cal. 478, 26 Pac.
Rep. 1074 ; Jamison v. Bagot, 106 Mo.
240, 16 S. W. Rep. 697. See § 74,
especially the note.

■ Vogt v. Ticknor, 48 N. H. 247 ;
Gregg \. Bigham, 1 Hill's (S. C.)
Law. J'.i'.t; Collinson V. .Jackson, 14
Fed. Rep. 309, 8 Sawyer 357;
('lark v. A iithmiv, :;i A.rk. 549 ; Carter
v. Bennett, 1 Fla. 283. See Lewis v.
Rogers, 16 Pa. St. 18; Sidensparker
v. Sidensparker, 52 Me. 481 ; ('lark v.
Douglass, <>',' Pa. St. lit; . Wells v.
O'Connor, '27 Bun (N Y.i 438. Com-
pare Voorhees v. Seymour, 36 Barb.
(N. 5 569 Meeker v. Han-is, l!) Cal.
Shaw \. I )wight. 27 N. Y. 345 ;

Whittlesey v. Delaney, 73 N. Y. 571 ;
Mandeville v. Reynolds, 68 N. Y. 545.
"Fraud and imposition invalidate a
judgment as they do all acts." Dob-
son v. Pearce, 12 N. Y. 165. The
fraud which will authorize one court
to reverse, in a collateral proceeding,
the judgment of another court is a
fraud practiced in the procurement of
the judgment, by which the defend-
ant was excluded from availing him-
self of a defense. Major, etc., of N.
Y. v. Brady, 115 N. Y. 599, 22 N. E.
Rep. 237.

3 See Guion v. Liverpool L. & G.
Ins. Co., 109 U. S. 173, 3 S. C. Rep.
108 ; Sidensparker v. Sidensparker, 52
Me. 487; Leonard v. Bryant, 11 Met.
(.Mass.) 370: Thomas v. Hubbell, 15
N. Y. 405 ; Ex parte Cutting, 94 U. S.
14.

4 Columbus Watch (o. v. Hoden-
pyl, 135 N. Y. 430, 32 N. E. Rep. 239.
But a confessed judgment will be set
aside where, from a consideration of
all the circumstances, it appears to
have been part of a scheme to defraud
creditors. New York Commercial
Co. v. Carpenter, 4 Misc. (N. Y. ) 240,
24 N. Y. Supp. 248.

565N. Y. 471.

§ 2/1 BURDEN OF PROOF. i;;

sented property sold after the delivery of the deed ; that
is, the complainant was a subsequent creditor. The debtor
was allowed to testify that he purchased the property as
agent for his son, and that he did no business for himself.
Though the judgment was conclusive as establishing that
he was liable for the debt, it was considered competent to
show that the debtor acted as agent, and was not person-
ally engaged in business, and hence did not contemplate
future indebtedness, and had no design to defraud future
creditors.1 According to some authorities a judgment is
only evidence of its own existence; the fact that the claim
antedated the fraudulent conveyance must be otherwise
shown.2

§ 271. Burden of proof. — In general the obligation of
proving a fact rests upon the party who substantially
asserts the affirmative of the issue.3 The decisions in
the various States differ on the point whether a prima
facie case is made out by showing fraud on the part of
the grantor, which, in the absence of evidence on the
part of the grantee, that he is both a bona fide purchaser
and a purchaser for value, entitles plaintiff to a judgment,
or whether the plaintiff is bound to show, as part of his
case, fraud or absence of consideration on the part of the
grantee. The correct rule seems to be that a creditor
may succeed by proving a fraudulent intent on the part
of the grantee.4 In some cases the rule is held to be
that, in any contest between a grantee and an existing

1 See Chap. VI., §§ 96-101. especially on the trial and sifting of

2 Sweet v. Dean, 43 111. App. 650 ; facts to unravel the subtleties of fraud,
Burton v. Platter, 53 Fed. Rep. 901; is an important legal right, and if
Troy v. Smith, 33 Ala. 469 ; Means v. improperly denied, demands the
Hicks, 65 Ala. 241: Marshall v. granting of a new trial. Royce v.
Groom, 60 Ala. 121. Gazan, 76 Ga. 79.

3 Greenl. Ev. § 74; Tompkins v. ' See Richards v. Vaccaro, 67 Miss,
Nichols, 53 Ala. 197; Roberts v. 516, 7 So, Rep. 506; cf. Mobile Sai
Buckley, 145 N. Y. 223, 39 N. E. Hep. ings Bk. v. McDonnell, 89 Ala. 134, 8
966. The right to open and conclude So. Rep. 137.

478

KUKHKN OF PROOF.

§ 271

creditor, the burden to prove good faith is on the grantee,
even without evidence-of fraud on the part of the grantee.1
With the possible exception of conveyances to a wife by
a husband,2 the burden of proof, in cases where the
instrument is valid upon its face, generally rests upon the
creditor to show a fraudulent intent3 or absence of
consideration.' Where it is proved that the conveyance
was in satisfaction of a valid indebtedness at a fair price,
the burden to prove the existence of a secret trust or
benefit is on the creditor.5 If, however, the vendee hav-
ing the burden cast upon him,6 shows that valuable
consideration was paid for the transfer of the prop-
erty in controversy, the burden of proof shifts and the
creditor, in order to recover, must prove fraud on the part
of the grantee; 7 then there must be evidence of a fraud-
ulent intent on the part of the vendee,8 or proof that he
had notice of the vendor's evil design 9 Where a strong
doubt of the integrity of the transaction is created, the
duty of making full explanation, and the burden of proof

1 Fisher v. Moog, 39 Fed. Rep. 665.

2 See Chap. XX.

' Kipp v. Lamoreaux, 81 Mich. 299,
45 N. W. Rep. 1002 ; Haynes v.
Rogers, 111 X. C. 228, 16 S. E. Rep.
416.

4 See §§ 5, 6. Fuller v. Brewster,

53 M-l 859; Cooke v. Cooke, 43 Md.
588; Anderson v. Roberts, 18 Johns.

N Y 515 : Meblhop v. Pettibone,

54 Wis. 653, 11 N. W. Rep. 55:5, 12 Id.
448; Starin v Kelly, 88 N. Y. 121 ;
Tompkins v. Nichols, 53 Ala. lit?:
Barkow v. Sanger, 17 Wva. 500, ■> X. W.
Rep. 16; Kellogg v. Slauson, 11 X. Y.
804 . 1*11-. - \ v. Gardner, 21 W. Va.
176 i Hale v. Wes1 Va. Oil A; Land
Co., 11 W Va. 2.".i : Kruse v. Prindle,
s 1 tragon 168 ; Jones \ . Jones, b57

• 88 \ i: Rep. 179; Town
Bend \ Stearns, 82 X. Y. 209. But

see Francis v. Page, 97 Ala. 379, 11
So. Rep. 736.

Pollak v. Searcy, 84 Ala. 259, 4
So. Rep. 187 ; Bamberger v. School-
field, 160 U. S. 149; 16 S. C. Rep. 225.

6 Throckmorton v. Rider, 42 Iowa
86 ; Spence v. Smith, 34 W. Va. 697,
12 S. E. Rep. 828.

' Ross v. Wellman, 102 Cal. 4, 36
Pac. Rep. 402 ; Jones v. Simpson, 116
U.S. 610, 6 S. C. Rep. 53s.

8 Jones v. Simpson, 1 16 U. S. 609,6
S. C. Rep. 538 ; Bluiner v. Bennett,
44 Neb. 873, 63 N. W. Rep. 14 ; Hinds
v. Keith, 6 C. C. A. 231, 57 Fed.
Hep. 10; Tillman v. Heller, 78 Tex.
597, 14 S. W. Rep. 700 ; Bambergerv.
Schooltield, 150 LI. S. 149, 16 S. C.
Rep. 225.

•See Chap. XIV, §§ 196, 197.

§ 271a B( »OKS OF A.CCOUNT. 479

to sustain the transfer, rests with the insolvent.1 And
where a debtor conveys all his unexempt property to a
member of his family in consideration of alleged past
services, a case is made out requiring full explanation on
the part of the purchaser in respect to the consideration
and the honesty of the transaction.2 The same rule
applies where the debtor takes the title to property as
trustee for his daughter:1 The fraud must usually be
established by the party alleging it by a fair preponder-
ance of proof.4

§ 271a. Books of account. — Judgment-creditors can fre-
quently make use of entries in the debtors' books of
account. While such books are not ordinarily received
in evidence in an action at law to recover a debt, except
under peculiar circumstances, or as against the party who
kept the books, vet in an action in equity they are
admitted not only against the judgment-debtor, whose
transactions they are supposed to record, but also against
those deriving property from him, as to such entries as
were made while such property was still in his possession.
The New York Court of Appeals says : " Although the
books are not competent as against a creditor seeking to
recover a judgment for his debt, they maybe introduced
by a judgment-creditor to support an attack in equity
upon the transfer of property by the judgment-debtor to
a third person, claiming a valid debt as the consideration
for the transfer. Entries made in the ordinary course of
business, while the debt in dispute was in process of con-
traction, are competent as to another creditor, for the
purpose of showing that there was no such debt."

1 Clements v. Moore, 6 Wall. 315. » Lavelle v. Clark (Ct. App. Kj
See also Piddock v. Brown, 3 P. 1896)38 8. W. Rep. 181.

Wms. 289; Wharton v. May, 5 * Brown v. Herr, 21 Neb. 128, 31 N.

Ves. 49. W. Rep. 246.

2 Welch v. BradleY, 45 Minn. 540, 'White v. Benjamin, L50 N. Y.
48N.W. Rep. 440. 266, 44 N. E. Rep. 956. See Loos v.

4So

SECRET TRUST.

§ 272

.^ 272. Secret trust. — The most common forms of fraudu-
lent conveyances are those in which a secret trust or
benefit is reserved for the debtor. Manifestly the law
will not permit an insolvent to sell his land and convey it
without apparent reservation, and yet secretly l retain for
himself the right to occupy it for a limited time for his
own benefit.2 A transfer of this character, even though
founded upon a good consideration, lacks the elements
of good faith, is not what it purports to be, conceals the
real agreement existing between the parties, confers upon
the debtor the enjoyment of a valuable right which it is
intended to place beyond the reach of creditors, and con-
stitutes a fraud upon them.3 " A collusive transfer,
placing the property of a debtor out of the reach of his
creditors, while securing to him its beneficial enjoyment,
is not to be tolerated." ' It is immaterial whether the
trust is express and apparent upon the face of the deed
or is implied from extrinsic circumstances.5 The whole

Wilkinson. 110 N. Y. 209, 18 N. E.
Rep. 99; Fleming v. Yost, 137 Ind.
95,36 N. E. Rep. 705; Bicknell v.
Mellett, 160 Mass. 328, 35 N. E. Rep.
1 130. Entries of payments of money
made to a grantor at various times,
the entries being made at the time of
the payments, are admissible as a
part of the resgestoe to illustrate and
bring out the whole transaction in
regard to the transfer and the con-
sideration for it. Fleming v. Yost,
137 Ind. lir>, 30 X. E. Rep. 7u5.

1 strattou v. Putney, •'.:: X. II 577,
1 Atl. Rep 876; Kain v. Larkin, 4
A.pp. Div. <N. \.> -'nil, 38 N. Y . Supp.
546.

- Lukins v. Aird. i; Wall. 79 ;
Birmingham Dry Goods Co. v. Roden,
110 Ala. ail. sub mini, Birmingham

I »i v < ; I- 1 'o v. Kelso, [8 80, Rep.

185. See VVooten v. Clark, 28 Miss.
76 . An l iiit \ . < lommercial & R. R,
Bank, 17 Miss. 394 ; Towle \. Boit,

14 N. H. 61 ; Paul v. Crooker. 8 N.
H. 288 ; Smith v. Lowell, 6 N. H.
67 ; Hills v. Eliot, 12 Mass. 26 ;
Fulkerson v. Sappington, 104 Mo. 472,

15 S. W. Rep. 941; First Nat. Bank of
Mankato v. Kansas City Lime Co., 43
Mo. App 561 ; Justh v. Wilson, 19 Dist,
Col. 532 ; Lang v. Stock well, 55 N. H.
561.

3 See § 22. Young v. Heermans,
66 N. Y. 382 ; Crouse v. Frothingham,
27 Hun (N. Y.) 125 : Dean v. Skinner.
42 Iowa 41S; Sims v. Gaines, 64 Ala.
392-397: Rice v. Cunningham 116
Mass 4C>9 : Giddings v. Sears, 115
Ma>s. 505; Denl v. Ferguson, 182 U.
S. 67. See Macomber v. Peck, 39
Iowa 351 ; Innis v. Carpenter, 4 Col.
App 30,34 Pac. Rep. Ktll ; Bostwick
v. Blake, 145 111. 85. 31 N. E. Rep. 38.

' Crawford v. Xeal, 144 U. S. 595 :
12 S ('. Rep. 759.

» Coolidge v. Melvin. 12 X. II. 510;
Rice v. ( lunningham, 116 Mass. 469.

§273 INSOLVENCY OP DEBTOR. 481

estate of the debtor is in theory of law liable for the pay-
ment of his debts, and it is fraudulent to conceal or secrete

any part of the insolvent's property from his creditors.'
Where a father caused foreclosure proceedings to be
brought against himself, and his son became the pur-
chaser, and the creditors of the latter proceeded to acquire
such interest, it was held that the father would not be
permitted to give evidence of a secret trust in the son for
the benefit of the father.2 So a secret agreement upon
a sheriff's sale to hold the property in trust for the
debtor renders the sale void even as to subsequent
creditors.3

Secret trusts are manifestly most difficult to establish
in court. Surrounding circumstances and the relations of
the parties and their conduct and bearing may be given
in evidence. Sometimes the isolated bits of evidence
shadowing forth the secret arrangement or benefit seem
most inconclusive, and unsatisfactory, but when grouped
together and considered as a whole, the fraudulent device
can be made manifest.

§ 273. Proof of insolvency of debtor. — The term insolvent
is usually applied to one whose estate is not sufficient to
pay his debts,4 or a person who is unable to pay all his
debts from his own means,5 and cannot proceed with his

1 Sparks v. Mack, 31 Ark. 670 ; 5 Riper v. Poppenhausen, 4:5 N. Y.

Paul v. Crooker, 8N. H. 288 ; Moore v. 68 ; Marsli v. Dunckel, 25 Hun (N. 1

Wood, 100 111. 454 ; Conover v. Beck- 169, 170. See Buchanan v. Smith, 16

ett, 38N. J. Eq. 384. See Chap. II. Wall. 308 ; Herrick v. Borst, 4 Hill

-Conover v. Beckett, 38 N. J. Eq. (N. Y.)652; Brouwer v. Earbeck, 9

384. N. Y. 594; Peabody v. Knapp, 153

3 Bostwick v. Blake, 145 111. 85. 34 Mass. 242, 26N. E. Rep. 696; Sabin v.
N. E. Rep. 38; Grimes Dry Goods Columbia Fuel Co.. 25 Ore. 15, 34 Pac.
Co. v. Shaffer, 41 Neb. 112, 59 N. W. Rep. 692; Holcombe v. Ehrmann-
Rep. 741 ; Rucker v. Moss, 84 Va. 634, traut, 46 Minn. 397. 49 X. W. Rep.
5 S. E. Rep. 527. 191 ; Chipman v. McClellan, 159 Mass,

4 Mitchell v. Mitchell, 42 S. C. 483, 368, 34 X. E. Rep. 379; Sacr] v
20 S. E. Rep. 405 ; Akers v. Rowan, Lobree, 84 Cal. 46, 23 Pac. Rep. 1088
33 S. C. 470, 12 S. E. Hep. 165; Toof Wager v. Ball, 16 Wall. 599.

v. Martin, 13 W^all. 47.
31

482

INSOLVENCY OF DEBTOR.

273

business in the usual course of trade.1 On the other
hand, a party is solvent who has property subject to legal
process sufficient to satisfy all his obligations.2 A find-
ing that a man was " financially embarrassed" is not
equivalent to a finding of insolvency. One may be finan-
cially embarrassed and yet be possessed of abundant
property, out of the proceeds of which, when realized upon,
his debts could be paid.3 The inquiry is, has the debtor
such means that payment may be enforced at law?4 An
embarrassed debtor may, of course, effect any sales of his
property which he deems advantageous, to enable him to
raise the necessary means for paying off his creditors,
and, within reasonable restrictions, to prevent its sacrifice
at forced sale under execution, and for this purpose the
law generally recognizes his right to sell either for cash
or on credit.5

Proof of insolvency of the debtor at the date of the
alienation is frequently of vital importance in creditors'
suits/' Evidence of the insolvency of the vendor a year
after the sale is not material,7 and where a debtor has prop-
erty sufficient to satisfy all his creditors he cannot be said
to be insolvent though he lacks sufficient ready money to

1 Curtis v. Leavitt, 15 N. Y. 141.
Berrick v. Borst, 4 Hill (N. Y.)
652 approved, Walkenshaw v. Per-
zel, 32 How I',. ,'\ Y)240 ; Brouwer
x Harbeck,9 N. f.594. See Eddy v.
Baldwin, 32 Mo. 374 ; McKown v.
Furgason, 17 [owa 637. The term
"open and notorious insolvency" is
said I" imply not the want of suffi
>i«iit property to pay all of one's
debts, but the absence of all property

wit 1 1 in reach of the law, applicable to

the payment of any debt. Bardesty
v, Kinworthy, 8 Blackf. (Ind.) :501.

Jacobs \. Morrison, 136 N. Y 104,
82 S. E. Rep. 58

■ Beid v. Lloyd, 52 Mo. A.pp. 282
I Dougherty v. < looper, 77 Mo. 531.

See Hickey v. Ryan, 15 Mo. 62 ; Buck-
ner v. Stine, 43 Mo. 407; Waddams
v. Humphrey. 22 111. 663 ; Nelson v.
Smith, 28 111. 495. In Jacobs v. Morri-
son, 136 N. Y. 104, 32 N. E. Rep. 552,
the court says: "The finding that
the grantor was ' financially embar-
rassed ' docs not affect his conveyance,
and certainly is not equivalent to a
finding of insolvency. One may be
■ financially embarrassed ' and yet be
possessed of abundant property, oul

of the proceeds of which, when real-
ized upon, his debts could be paid."
• Ncve.s v. Back, 138 [nd. 260, 37

V E. Kep. 791, and cases cited.

1 Martin v. Fox, 40 Mo. App.
664.

73

[NSOLVENCS OF DEBTOR.

meet maturing obligations.1 How can the evidence upon
this point of solvency be best adduced? It is the con-
dition of the debtor and not his belief as to solvency that
the law regards.2 The rule has been formulated that
" the opinion of a witness that a person is solvent or
insolvent is inadmissible."3 In Denman v. Campbell4
this question was put: "Is Donal Campbell a man of
responsibility?" and the answer given under objection
was : " So far as I know, he was not responsible." The
reception of this evidence was held to be error. The fact
that a man is reputed among his neighbors to be worth a
given sum does not prove that he is. nor is it admissible

Smith v. ( iollins, 94 Ala. 3

S. Rep. 334.

- Austin v. First Nat. Bk.. 47 111.
App. 225.

3 Lawson on Expert & Opinion Evi-
dence, p. 515. Citing Brice v. Lide,
30 Ala. 647 ; Nuckolls v. Pinkston. 88
Ala. 615 : Royall v. McKenzie. 35
Ala. 363. But see Breckinridge v.
Taylor, 5 Dana iKv. i 114: Crawford
v. Andrews. 6 Ga. 244 : Riggins v.
Brown. 12 Ga. 273; Sherman v.
Blodgett, 28 Vt. 149.

* 7 Ban X. Y. 88. In Babe »ck v.
Middlesex Sav. Bank. 28 Conn. 306,
the court said : "We think that the
court below erred in receiving the
opinion of the judge of probate a- I
the pecuniary ability of H. D. Smith,
for the purpose of rebutting the evi-
dence adduced by the defendant -
show that he whs destitute of prop-
erty. The witness did not profes~ t< i
have any knowledge whatever in re-
gard to the property or pecuniary cir-
cumstances of Smith or any meai
forming a judgment or opinion on
that subject, excepting from the
style in which lie and his family
lived, the manner of his leaving the
State, and the fact that he had made,

before the court of probate, do <li--
-ure of his property under oath, in
the proceedings in insolvency against
him. Although, as to the value of
property we resort to the judgment
or opinion of persons acquainted with
it. its exi-tence and ownership
facts to he proved, whether directly
or otherwise, like other facts, by the
knowledge of wit] 1 not by

their opinions, inferences or surn
derived from whatever source. The
present ie not like the cases where an
opinion i- sought of an expert; or
those in which, for certain purpoG
the reputation of a pen - to

pecuniary ability may be shown )<y
witnesses who have no personal
knowledge of his situation. Tin- in-
quiry here was not whether Smith
- reputed t" be, hut whether he
was m fact, destitute of property.
On such an inquiry nothing could
more dangerous than t the

opinions of persons founded on such
fallacious gro amon run

or a man's pr his cir-

CUlii-

opinions of others, or. what in many
- - - relied on, his

style '>r manner of living."'

|S i [NSOUS l\' V I 'I DEBTOR. § J~3

upon the issue of his making a fraudulent disposition of
his property.1 In a case which arose in New York, in
which the primary and all-important question was whether
a corporation was solvent or not,2 many of the witnesses
examined on the point expressed nothing more than an
opinion upon the subject, without referring to any facts
from which such opinion was formed. It was very prop-
erly ruled that such evidence was entirely insufficient, and
could never form a basis for any action of the court. :;
Evidence that a man was generally reputed to be
insolvent is competent upon the theory that the fact to
be proved is of a negative character, scarcely admitting
of direct and positive proof.4 In the great majority of
cases, it would be impracticable and exceedingly tedious
and expensive to procure any other proof of insolvency
than that of general reputation in the community where
the debtor resides and is known."' If the witness is able
to state numerous facts touching the property of the
debtor, and the amount of his indebtedness, which show
a very full and intimate acquaintance with his affairs and
his utter insolvency, he may be permitted to answer a
question whether or not the debtor was able to pay his

1 Firsl Nat. Bk. v. Buck, 56 Midi, ami his means of knowing the situ-

W. Rep. 57. ation ami circumstances of the l>ail ;

1 On the question of the insolvency certainly there could then be no ob-

<>f a corporation, evidence of a notary jection to his giving hi> opinion from

that In' had protested for non-pay- his knowledge of the bail, and of his

ment commercial paper due by it is affairs, what he thought he was

admissible. Mi-h v. Mam, si Md. 36, worth."

:?] Atl. Rep. T'.i'.. 'Nininger v. Knox, 8 Minn. 148;

Brundredv. Paterson Machine Griffith v. Parks, 32 Md. 1. Crawford

1 95 Compare Ninin- v. Berry, <"> <iill & J. (Md.) 63 ; Met-

Knox. 8 Minn. 140; Andrews calf v. Munson, in Mien (Mass.) 198:

aes, 10 Ala. 460. In Sherman v. Hank of Middlebury \. Rutland, 38

Blodgetl 28Vt. 149, the court said : Vt. 114; I v. Kilburn, :) Gray

" The solvency of an individual is a Mass 594

'"•<" somewhat in opinion ; Griffith v. Parks, 82 Md. 1; Wat-

and. in the present case, the witness kin- v. Wbrthington, 2 Bland (Md.)

had stated whal property the bail 509,540,541.

owned at the time he entered hail

§ 2;4 INSOLVENCY « >F VENDEE. |.'-:,

debts, at a particular time, in the usual course of business.
This is considered as calling for a fact, and not for the
opinion of the witness.1 We may here state that there
is no presumption of law, arising from knowledge of
insolvency, that the assignee knew of the debtor's inten-
tion to defraud creditors.2 Return of an execution nulla
bona is prima facie evidence of insolvency.3 But the
mere fact that a vendee knows that his vendor was
insolvent will not overturn a conveyance founded upon
adequate consideration.1 Where one engaged in com-
mercial pursuit permits his commercial paper to be dis-
honored, and his property to be attached, this is evidence
of insolvency.5 And a statement that a party is indebted
to clivers persons in considerable sums of money, which
he is unable to pay, is a declaration of insolvency.
" When a person is unable to pay his debts, he is under-
stood to be insolvent."6

§274. Insolvency of vendee. — The ability of the vendee
to pay the purchase-money for the property, before and
at the time of the transaction, is a material circumstance
for the consideration of the jury, and testimony upon
that point should be admitted.7 The purchaser may
testify as to the sources from which he procured the

1 Thompson v. Hall, 45 Barb. (N.Y.) 25 N. E. Rep. L33; Ogden State Bank
210. See Blanchard v. Mann, 1 Allen v. Barker, 12 Utah 27, 10 Pac. Rep.
(Mass.) 433; Iselin v. Peck, 2 Rob. 769.

(N. Y.) 639. ' Erdall v. Atwood, 7!) Wis. 1. 17

2 Cannon v. Young, 89 N. C. 264. N. W. Rep. 1124: Warner v. Little-
On the issue whether a conveyance field, 89 Mich. 329, 50 N. W. Rep. 721;
of real estate is fraudulent as to cred- National Bk. of Oshkosh \. Nat. Bk.
itors, evidence of the register of deeds of Ironwood, LOO Mich. 485, 59 N. W .
for the district in which the estate Rep. 231.

lies, that he has searched the records ■''Tuthill v. Skidmore, 124 N Y. 148,

of the registry, and found that there 26 N. E. Rep. 348; Booth \. Powers,

was no other property standing in 5(5 N. Y. 22, 32.

the name of the grantor, is admis- 'Cunningham \. Norton, 125 1 .8

sible. Bristol Co. Sav. Bank v. Heavy, 77, DO, 8 S. C. Rep. 804.

128 Mass. 298. ' Johnson v. Lovelace, 51 Ga. 19.

3 Warmoth v. Drydeu, 125 End. 355,

(.86 GENERAL REPUTATION. £-75

money.1 For the purpose of showing that a mortgage
is fraudulent, it is competent to prove that in the country
where the mortgagee was bom and grew up, and con-
tinued to reside, he was never known to have any property
or means, or to be engaged in any business,2 and was
not in a position to lend money.3 So the creditor may
show that the grantee was a married woman, having no
separate estate, notoriously poor, and destitute of means
to make the payment claimed or contemplated.4 Testi-
mony of this kind is often of vital importance to cred-
itors, as nothing is more common or more persuasive to
the minds of a court or a jury as to the presence of fraud
than proof that the debtor's property has passed into the
hands of an irresponsible figurehead, who was not pos-
sessed of the means with which to purchase it, and had
no use for it.

The schedules of an insolvent debtor are not com-
petent evidence against a third party, to prove the
indebtedness of the assignor.5

.^ 275. General reputation. — Evidence of the general
reputation of all the parties to an alleged fraudulent
transaction, as to their credit and pecuniary responsibility,
may be admitted." In this respect the general reputation
of the grantor is a fact which, with other circumstances,
has some tendency to show that the grantee understood
his motives in making the conveyance, and possibly par-
ticipated in his unlawful purpose; and proof of the

Tuckwood v. Eanthorn, '17 Wis. ■'■ Halm v. Penney, 00 Minn. 4S7,

BO N. W. Rep 705. 62 N. W. Rep. 1129.

Stebbins v. Miller, 12 Allen (Mass.) 6 Hall v. Ritenour, 2 West. Rep,

496; sub nom. Gordon v. Ritenour, 87

Demerit! \ Miles, 22 N. !l. 523. Mo. 54; Ferbrache v. Martin (Idaho,

• Lmsden v. Manchester, 10 Barb. 1892) 32 Pac. Rep. 252 ; Hahn v. Pen-

N f.) 168. Seee P. Danby v. Sharp, aey, 60 .Minn. 487, 62 N. W. Rep.

2 MacAr 1 D C.) 185 . Stevens v. Dill- 1129.
man, 86 111. 288 1 Castle v. Bullard,28
Bow

£2/6 CONCERNING RES GESTAE. 4X7

grantee's want of credit would have a tendency to show
that the conveyance was not made in good faith,
especially if made in reliance upon his future ability to
pay.1 Evidence that the grantee's general credit was
bad, though somewhat remote, cannot be said to be incom-
petent." Where fraud is charged and sought to be
established by proof of circumstances, evidence of general
good character is admissible to repel it, as in criminal
cases.3 General reputation of doing business on bor-
rowed money is admissible on the issue as to whether the
defendant had reasonable cause to believe the debtor
insolvent.4

§ 276. Concerning res gestae. — Where it becomes neces-
sary to discover the intention of a person, or to investi-
gate the nature of a particular act, evidence of what the
person said at the time of doing it or contemporaneous
with the transaction5 is received as part of the res gestce?
This important doctrine has been liberally applied in the
United States, and especially in the class of litigation
under consideration. The declarations must relate to
the act which they characterize ; they must be calculated
to unfold the nature and quality of the facts which they
are intended to explain, and they must so harmonize with

1 Sweetser v. Bates, 117 Mass. 468. H. R. R. R. Co., 95 N. Y. 374 ; Ban

'-' Cook v. Mason, 5 Allen (Mass.) over Railroad Co. v. Coyle, 55 Pa. St.

212. Compare Lee v. Kilburn, 3 Gray 396; Loos v. Wilkinson, 1 10 X. Y. 211,

(Mass.) 594; Metcalf v. Munson, 10 18 N. E. Rep. 99 ; Moore v. Meacham,

Allen (Mass.) 491 ; Amsden v. Man- 10 N. Y. 207 ; Schnicker v. People, 88

Chester, 40 Barb. (N. Y.) 163. N. V. 192; Swift v. Mass. Mutual Life

3 Werts v. Spearman, 22 S. C. 219; Ins. Co., 03 N. Y. 186 ; Sanger v. Col-

Bowerman v. Bowerman, 76 Hun bert, 84 Tex. 668, 19 S. W. Rep. 863 ;

(N. Y.) 46, 27 N. Y. Supp. 579; affi'd Reiley v. Haynes, 38 Kara. 259, 16

145 N. Y. 598 ; 40 N. E. Rep. 163. Pac. Rep. 440 ; Smith v. Nat. Benefit

4Killam v. Perce, 153 Mass. 502, So,-., L33 N. Y. 85, 25 \. I.. Rep

27 N. E. Rep. 520. L97; Jenne v. Joslyn,41 Vt. 178 ; Bar-

5 Flannery v. Van Tassel, 131 X. ton v. Lyons, 97 Tenn. L80, 36 S. W.
Y. 639, 30 N. E. Rep. 24. Rep. 851.

6 Waldele v. New York Central &

488 DECLARATIONS BEFORE SALE. § 277

those facts as to form one transaction.1 The declara-
tions must grow out of the principal fact or transaction
illustrate its character, be contemporaneous with it and
derive some degree of credit from it.2 Thus a wife may
employ her husband as an agent, and his utterances while
so acting, in taking a bill of sale, constitute part of the
res gestce and are competent evidence for the wife.3 The
declarations accompanying an act are admissible as
explanatory of the character and motives of the act.4 They
in this way become part of the res gestce. The declarations
of the grantor made to the notary at the time of executing
the deed may be shown ; 5 so may the statement of the
debtor to a clerk as to who is employing him.0 It is the
duty of the jury to determine the weight of these decla-
rations, by ascertaining whether they were sincere, or
were made to withdraw attention from the real nature of
the act, or to hide the real purpose of it.7 The declara-
tions which are merely narrative of a past transaction are
not admissible as part of the res gesta',s but the declara-
tions of a debtor prior to the alleged inception of the
fraud are admissible in favor of the grantee.9 The test
is as to whether the testimony offered throws light upon
the transaction.111

S 277. Declarations before sale — Realty and personalty. —
The conduct and declarations of the grantor11 respecting

Smith v. Nat. Benefit Soc, L23 • Sweet v. Wright, 57 Iowa 510. 10

N. Y. 85, 25 N. K. Rep. 197; Tilson v. N. W. Rep. 870.

Terwilliger, 56 N. Y. 277. 7 Potter v. McDowell, 81 Mo. 74.

Bush v. Roberts, ill N. Y. 283, B Waldele v. New York Central &

is N. E. Rep ::;.': Lund v. Inhabitants H. R. R. R. Co., 95 N. Y. 274

of Tyngsborough, 9 Cush. (Mass.) 86. aS\van v. Morgan, 88 Hun (N. Y.)

K.IK v. Campbell, 1 Keyes (N. 880, 84 N. Y. Supp. 829.

">Ogden State Bk. v. Barker, 12

'See Stewart v. Fenner, 81 Pa. St. Utah 27, 40 Pac. Rep. 768.

17K m )' I fare v. Duckworth, 4 Wash. 470,

lei ■ Free. 114 Wo. 860. 31 80 Pac. Rep. 724. See Breathwil v.

s. W. Rep Bank of Fordyce, 60Ark.35, 28 S. W.

%^77

DECLARATK )NS BEFi IRE s U.K.

the estate conveyed, tending to prove a fraudulent int. n
tion on his part before the conveyance, arc proper evi-
dence for the jury upon an inquiry into the validity of
the conveyance by a creditor or subsequent purchaser,
who alleges that it is fraudulent.1 This evidence is con-
sidered competent to prove that the conveyance was
fraudulent on the part of the grantor, and does not preju-
dice the grantee, who is not affected if he is a bona fide
purchaser for a valuable consideration. The evidence is
not admissible against him where there is a valuable con-
sideration for the transfer in the absence of proof of
conspiracy.2 To avoid the transaction as convinous frau-
dulent intent must, as we have said, be shown on the
part of the grantee as well as of the grantor.3 So admis-
sions made by one who, at the time, held the title to
land, to the effect that he had contracted to sell it to
another, and had received payment for it, are competent

Rep. 511 ; Chase v. Chase, 105 Mass.
388; Alexander v. Caldwell, 55 Ala.
517 ; Hiner v. Hawkins, 59 Ark. 303,
27 8. W. Rep. G5 ; Seeleman v. Hoag-
land, 19 Col. 231, 34 Pac. Rep. 995.

1 Bridge v. Eggleston, 14 Mass. 245,
per Parker, C. J., 7 Am. Dec. 209. See
Alexander v. Caldwell, 55 Ala. 517 ;
Knox v. McFarran, 4 Col. 596 ; Ran-
degger v. Ehrhardt, 51 111. 101 ; Chase
v. Chase, 105 Mass. 388 : Stowell v.
Hazelett, 66 N. Y. 635 ; Davis v.
Stern. 15 La. Ann. 177 ; McKinnon v.
Reliance Lumber Co., 63 Texas 31.
See Elliott v. Stoddard, 98 Mass. 145 ;
McLane v. Johnson, 43 Vt. 48 ; Grimes
v. Hill, 15 Col 359, 25 Pac. Rep. 69*;
National Bank v. Beard, 55 Kan.
773, 42 Pac. Rep. 320: Wyckoff v.
Carr, 8 Mich. 44. In Truax v.
Slater, 86 N. Y. 632, Earl, J., is re-
ported in memorandum to have sail I :
" The mere declarations of an assignor
of a chose in action, forming no part
of any res gestte, are not competent

to prejudice the title of his assignee,
whether the assignee be one lor value,
or merely a trustee for creditors, and
whether such declarations be ante
cedent or subsequent to the assign
ment." See Bush v. Roberts, 11! N.
Y. 278. This statement of the rule
would seem to be inaccurate. While
a partj holds the title and possession,
it would (dearly seem to be compe
tent to give evidence of Ids declara-
tions made while the possession con-
tinued as characterizing tin- nature
of it. Compare in this connection
Von Kaehs v. Kretz, 72 X. \ . 548 .
Loos v. Wilkinson. 110 X. V. L95 ;
Clews v. Kehr, 90 X. Y. 688.

- Bush v. Roberts, ill X. Y. 278,
is \. |-;. Rep. ;:;-j; B.T. Simon-Gregorj
Dry Goods ( !o. \. McMahan, til .Mo.
App. r>00. See Flannerj \ Van Tas-
sel, 127 N. Y. 631, 27 X. E. Rep. 398.

sCarpenter v. Muren, 42 Barb. (N.
Yj 300 ; 1 In- bes v. Mont} . 24 towa

499. See Chap. XIV.

490

I »E< I.AKAI [ONS AFTER SALE.

§ 278

evidence against those claiming title under him.1 The
principle upon which such evidence is received is that the
declarant was so situated that he probably knew the truth,
and his interests were such that he would not have made
the admissions to the prejudice of his title or possession
unless they were true. The regard which one so situated
would have for his own interest is considered sufficient
security against falsehood. In New York, after some
uncertainty, the rule was finally settled2 that such admis-
sions in controversies concerning personal property would
be excluded.5

£278. Declarations of debtor after sale. —As a general
rule the declarations of a vendor, after transfer and
delivery of possession, cannot be given in evidence
against the vendee,4 unless they are made in his pres-

1 Chadwick v. Former, 69 N. Y. 404.
The declarations of the debtor prior
to the inception of the fraud are
admissible in favor of the grantee.
Swan v. Morgan, 88 Hun (X. Y.)380,
34 X. Y. Supp. 829.

8 Paige v. Cagwin, 7 Hill (X. Y.)
361 ; Chadwick v. Former, 69 X. Y.
407 ; Truax v. Slater, 86 X. Y. 630 ;
Flannery v. Van Tassel, 127 X. Y.
631, '27 X. E. Rep. 393; Dodge v.
Freedman'e Sav. and Trust Co., 93 U.
S. 379.

( lhadwick v. Fonner. 69 X. Y. 407.

■ Tilson v. Terwilliger, 56 N. Y. -.'77 ;
Cii\l.-rv. McCartney, 40 X. Y. 221;
Chase v. Horton, 143 Mass. 118, 9
N. E. Rep. 31 ; Roberts v. Medbery,
132 .Ma-. 106 . Winchester & Part-
ridge Mfg. Co. v. Creary, 116 U. S.
161, 6 s. C. Rep. 869; Burnham v.
Brennan, 71 N. V. 597 ; Ohio Coal
< lompany \ . ! lavenport, 87 I )hio St.
194 : < loyne v. Weaver, 84 X. Y.
886; Flannery v. Van Tassel, 127 X.

Y. 881 . The i'.i.'i Miller si Co. v.

Caaebeer, 58 Mo. A.pp. 840; sparks v.

Brown, 46 Mo. App. 529; Redfield
v. Buck, 35 Conn. 328 ; Tabor v. Van
Tassell, 86 X. Y. 642 ; Randegger v.
Ehrliardt, 51 111. 101 ; Kennedy v.
Divine, 77Ind.493 ; Garner v. Graves,
54 Ind. 188; Hirschfeld v. Wil-
liamson, 1 West Coast Rep. 150 ;
Meyer v. Va. & T. R. R. Co. 16 Xev.
343 ; Sumner v. Cook, 12 Kan. 16a ;
Scheble v. Jordan, 30 Kan. 353. In
Holbrook v. Holbrook, 113 Mass. 76,
Ames, J., said : "It has often ben
held, and is a well-established rule,
that upon the trial of the question
whether a particular conveyance was
made to defraud creditors, it is not
competent to show the acts or decla-
rations of the grantor after the con-
veyance, to impair or affect the power
of the grantee." Citing Bridge v.
Eggleston, 14 Mass. 245 ; Foster v.
Hall, 12 Pick. (Mass.) 89; Aldrich
v. Earle, 13 Gray (Mass. ) 578; Taylor
v. Robinson. 2 Allen (Mass.) 562. See
Clements v. Moore, 6 Wall. 299;
Lewis v. Wilcox, 6 Xev. 215 ; Thorn-
ton v. Tandy, 39 Tex. 544; Pier v.

§278

DECLARATIONS \l- II. R SALE.

491

ence.1 Such declarations are mere hearsay," and not
made under the sanction of an oath ; the debtor bears no
relation to the estate, and it has been frequently held that
exceptions to the exclusion of this class of evidence should
not be multiplied. A vendor after parting with his prop-
erty has no more power to impress the title, either by his
acts or utterances, than a mere stranger.3 The decla-
rations of a former owner to qualify or disparage his title
are only admissible when made while the title is in him.
Such utterances cannot be allowed to affect a title which
is subsequently acquired.4 The declarations of the

Duff, 63 Pa. St. 59 ; City Nat Bank v.
Hamilton, 34 N. J. Eq. 163 ; Garrahy
v. Green, 32 Tex. 202 ; Taylor v.
Webb, 54 Miss. 36 ; Warren v. Wil-
liams, 52 Me. 346 ; Bullis v. Mont-
gomery, 50 N. Y. 358 ; Watlswortb v.
Williams, 100 Mass. 126 ; Silliman v.
Haas, 151 Fa. St. 58, 25 Atl. Rep. 72 ;
McElfatrick v. Hicks, 21 Pa. St. 402 ;
Unangst v. Goodyear I. R. Mfg. Co.,
141 Pa. St. 127, 21 Atl. Rep. 499 :
Tiscb v. Utz, 142 Pa. St. 186, 21 Atl.
Rep. 808 ; Winchester v. Charter, 97
Mass. 140 ; Clark v. Wilson, 127 111.
449, 19 N. E. Rep. 860 ; Jones v. Sny-
der, 117 Ind. 229, 20 N. E. Rep. 140;
Thomas v. Black, 84 Cal. 221, 23 Pac.
Rep. 1037; Hicks v. Sharp, 89 Ga.
311, 15 S. E. Rep. 314 ; O'Donnell v.
Hall, 154 Mass. 429, 28 N. E. Rep. 349.
Declarations after sale but before de-
livery were held admissible as against
the grantee. Bovvden v. Spelhnan, 59
Ark. 251, 27 S. W. Rep. 602. Com-
pare Truax v. Slater, 86 N. Y. 630.

1 Harris v. Russell, 93 Ala. 59, 9 So.
Rep. 541.

- In Winchester & Partridge M fg.
Co. v. Creary, 116 IT. S. 165, the court
said : "The plaintiff was itself in ac-
tual possession, exercising by its agent
full control. The vendors, it is true,
entered plaintiff's service as soon as

the sale was made and possession was
surrendered, but only as clerks or
salesmen, with no authority excepl
such as employees of that character
ordinarily exercise What they might
say, not under oath, to others, after
possession was surrendered, as to the
real nature of the sale, was win 'II \ ir-
relevant. They were competent to
testify under oath, and subject to
cross-examination, as to any facts im
mediately connected with the sale, of
which they had knowledge ; but their
statements out of court, they nol be-
ing parties to the issues to be tried,
were mere hearsay. After the sale,
their interest in the property was
gone. Having become strangers to
the title, their admissions are no more
binding on the vendee than the ad-
missions of others. It is againsl all
principle that their declarations, mad.'
after they had parted with the title
and surrendered possession, should be
allowed to destroy the title of their
vendee."

:iStewart v. Thomas, 35 Mo. 207.

4Noyes v. Morrill. L08 Mass. 396 .
Stockwell v. Blarney, 129 Mass. 312;
Welcome v. Mitchell, 81 Wis. 566, 51
N. W. Rep. 1080. But where both
grantor and grantee are made parties
defendant, such subsequent decla

49-

POSSESSION AFTER CONVEYAN< I.

& 2 79

o-rantee while on his way to the magistrate to obtain the
acknowledgment of the grantor, and before the deeds
were delivered, substantially to the effect that the deeds
were being executed because of apprehensions on the
part of the grantor that the property would be taken to
satisfy the debt due the demandant, were excluded
because the deed had not been delivered at the time the
declarations were made, and it was clear that " as admis-
sions in disparagement of title, the evidence was not com-
petent." !

§ 279. Possession after conveyance. — Elsewhere in this
discussion the failure to effect a change of possession is
shown to raise either a. prima facie or absolute presump-
tion of fraud.2 As proof of the continued possession of
the vendor is competent evidence to impeach the sup-
posed transfer, it would seem to follow that any acts or
declarations of the possessor while so retaining the prop-
erty must also be competent as characterizing his posses-
sion.3 So long as the debtor remains in possession of

rations were admissible to show fraud
of the grantor, although not admis-
sible against the grantee. See also
to same effect McDonald v. Bowman,
40 Neb. 269, 58 X. W. Rep. 704 ; Wright
v. Towle, (17 Mich 255, U N. W. Rep.
578 : Claflin v. Ballance, 91 Ga. ill. 18
8 I. Rep. 309. They are not admis-
sible against the grantee eveo where
there is evidence tending to show con-
spiracy. Scofield v. Spauldlng, 54
Hun (N. Y.i 583, 7 X. V. Sup,, 927 :
Harris v. Russell, 93 Ala. 59, 9 80. Rep.
541.

Stockwell v. Blarney, 129 Mass.
312

1 !hap XVI 1. .:.■ 848 352

Eirby v. Bfasten, 70 X. C. 540;

Carnahan v. W 1,2 Swan (Tenn.)

502 : fates « fates, 76 X. C. 142;
Saenschen v. Luchtemeyer, 19 Mo.
51 : ' 'ani.v v ( iarney, 7 Bax. (Tenn.)

287 ; Tedrowe v. Esher, 56 Ind. 447 ;
United States v. Griswold, 8 Fed. Rep.
560: Caboon v. Marshall. 25 Cal. 202 :
Oatis v. Brown, 59 Ga. 716; Mills v.
Thompson, 72 Mo. 309 ; Adams v.
Davidson. 10 X. V. 309 : Xeal v. Fos-
ter. 36 Fed. Rep. 34 ; United States v.
Griswold. 7 Sawy. 316; Bowden v.
Spellman, 59 Ark. 251. 27 S. W. Rep.
602. See Knight v. Forward. 63 Barb.
(N. V.i 311 ; Hilliard v. Phillips, si
N. C. 104, Smith, C. J., dissenting
upon the ground thai the declarations
in this latter case did not qualify or
explain the possession, nor disparage
declarant's title, but related to a pre-
existing facl to impeach the validity
and effect of his own act in convey-
ing title lt> incompetency for such
a purpose he considered fully estab-
lished by the authorities. 1 Greeul.
Ev. §§ lUit, 110; Ward v. Saunders, 6

-

property which once belonged to him. and which his cr
itor is seeking to condemn as fraudulently conveyed, the
- of the fraud, if any. may be considered as in
progress, and his declarations, though made after he has
parted with the formal paper title, may be given in
dence for the creditor against the claimant.1 by reason of
the continuous possession which accompanied them.
Where the assignor continues in possession of the
assigned property, his acts and declarations while in
actual possession may be given in evidence as part of the
especially if there is absolutely no break made
in the continuity of the possession after the real or pre-
tended sale.3 The declarations are received in such
cases upon the ground that they show the nature, object
or motives of the act which they accompany, and which
is the subject of inquir be a part of the r

however, the declarations must be made at the time the
act was done which they are supposed to characterize ;
they must be calculated to unfold the nature and quality
of the facts which they purport to explain ; and must
harmonize with such facts so as to form one transaction."'
The declarations must be concomitant with the principal
act or transaction of which they are considered a part,
and so connected with it as to be regarded as the result
and consequence of co-existing motives.'

;: - v. iins v. Davidson. 1'

eler, 6 Ired. X. C-. Law, 196; *< «*pare "Williams v. Willi
Hodg st. S . 3: Bur- 143 X. Y. 15 I

bank v. Wiley. ~ • X 601. Loos v. Wilkinson. 110 X. Y

■Williams v. Hart. 10 i: :iep. 99.

citing Oaris v. Brown, X6:

Sav. Bank v. McDonnell. » S
Ala. 434. 8 So. Rep. 137 ; N

ter. 13 Sawy. 2 3 B rton v. Lyons, it is said that the m- it a

- W. Rep. 95 per- . -

X-wlin v
Williamson r. William- 11 Lea which !

-
Humph. 509. thai .udulent

494 GOOD FAITH — CONSIDERATION. %% 2J9&-2Jgc

§ 279a. Professions of good faith.— It is not uncommon
for fraudulent debtors to make professions of honesty.
The Supreme Court of Iowa consider that the bona fide
character of a debtor's transactions, when drawn in ques-
tion, cannot be proved by such professions and that the
same are not competent evidence.1

?j 279b. Intention — Knowledge. — As we have seen,~ a
party may testify concerning- his intention in performing
an act where such intention becomes material.3 Hence
achattle mortgagee, where the mortgage contains a danger
clause, may testify as to his deeming himself in danger
where possession was taken by him prior to the maturity
of the mortgage.1 And a witness may be asked whether
he conveyed away property to prevent it from being
attached.5 And it is competent for a vendee to testify
that he had no knowledge or notice that the vendor
intended to defraud his creditors.'1

§2790. Consideration. — When a debtor undertakes to
transfer his property in recognition of an indebtedness to
his wife, originating twenty-five years before, no account of
which had been kept, and no interest or principal paid or
requested, the financial condition of both parties for the
entire period is a proper subject of inquiry, and the broad-
est latitude should be allowed to the judgment-creditor.7

a creditor. This is certainly a border 1 Tex. Civ. App. 657, -OS. W. Rep.

case. The effeel of the failure to 952.

change possession is elsewhere con- 'Barrett v. Bart, 42 Ohio St. 41 ;

sidered. See Chap. XVII. Buggans v. Fryer. I Fans. (N. Y.)

Barwick v Weddington, 7:: Iowa 276.

802,84 N. W 868. Ballock v. Alvord, 61 Conn. 194,

3eef J05. 23 At I. Rep. LSI.

Graves v. Graves, 45 N. II. 323; 8 Richolson v. Freeman, 50 Kans.

Bedell v. Chase, '64 N V. 888; Wilson 165, L3 Pac. Rep. 772. Compare Gen-

v. Clark, 1 Ind. App. Ct. 182. 27 N. E. trv v. Eelley, 49 Kan. 88, 30 Pac.

Rep 810 : Gentrj v. Kellej . 19 Kan. Rep. 186.

10 Pac. Rep 186; Gardora v. ' Miller v. Hanley, 94 Mich. 253, 58

Woodward, II Kan. 758,25 Pac. Rep. N. W. Rep. 962.
l'.i'.i ; Blankenship & B. Co. v. Willis,

§ 280 DECLARATIONS Of CO-CONSPIRATORS.

False recitals of consideration tend to deceive creditors
and are badges of fraud.1 But the general subject of
consideration has been elsewhere considered -

£280. Declarations of co-conspirators — Where it is proved
that the debtor and others have joined in a conspiracy to
defraud creditors by a fraudulent disposition of property,
the acts and declarations of either of the parties, made in
the execution of the common purpose, and in aid of its
fulfilment, are competent evidence against any of the
parties.3 Nor is it of consequence that the particular
declarations under consideration were in reference merely
to proposed acts of fraud which may not have been con-
summated in the particulars proposed, if such proposed
acts were sui generis with those committed. A founda-
tion must first be laid, by proof sufficient to establish
prima facie the fact of the conspiracy alleged in the com-
plaint.4 That being done, every declaration of the par-
ticipants in reference to the common object is admissible
in evidence.5 It makes no difference at what time the
defendant joins the conspiracy.6 Every one who enters
into a common design is generally deemed in law a party
to every act which has before been done by the others, in
furtherance of the common design ; and this rule extends

1 De Walt v. Doran, 21 Dist. Col. Richards Co., 10 Ind. App. 76, 31 N.
1(33. E. Rep. 362 ; Dodge v. Goodell, 16 R.

2 See §§ 207-223. I. 48, 12 Atl. Rep. 336; Knowerv.

3 Dewey v. Moyer. 72 N, Y. 79, 80, Caddea Clothing Co., 57 < !onn. 202, 1*3
See Newlin v. Lyon, 49 N. Y. 061 : Atl. Rep. 580; Little v. Lichkoff. 98
Cujler v. McCartney, 40 N. Y. 221, Ala. 321, 12 So. Rep. 429. See Kelley
per Woodruff, J.; Tedrowe v. Esher, v. People, 55 N. Y. 565.

56 Ind. 445; Sherman v. Hogland, 73 4 Rutherford v. Schattman, 118 N.

Ind. 472; Stewart v. Johnson, 18 N. Y. 604, 23 X. E. Rep. 440,

J. Law 87 : Lee v. Lamprey, 43 N. H. » Moore v. Shields, 121 Ind. -JUT, 23

13 ; Kennedy v. Divine, 77 Ind. 493 : N. E. Rep. 89.

Adams v. Davidson, 10 N. Y. 309 ; N. 6 Dodge v. Goodell, 16 R. I 50, 12

Y. Guaranty & Ind. Co. v. Gleason, Atl. Rep. 236; Lincoln v. Claflin, 1

78 N. Y. 503 ; Daniels v. McGinnis, 97 Wall. 132.

Ind. 552 ; Benjamin v. McElwaine-

!•!• LAF \TF< iNS I »F a >-C< INSPIRATORS.

§280

to declarations.1 The statements of one of the co-con-
spirators, however, as to past transactions not connected
with or in furtherance of the enterprise under investi-
gation, are not competent.'

In case of conspiracy where the combination is proved,
the acts and declarations of the conspirators are not
received as evidence of that fact, but only to show what
was done, the means employed, the particular design in
respect to the parties to be affected or wronged, and gen-
erally those details which, assuming the combination and
the illegal purpose, unfold its extent and scope, and its
influence either upon the public or the individuals who
suffer from the wrong, or show the execution of the illegal
design. But when the only issue is whether there was a
conspiracy to defraud, these declarations do not become
evidence to establish it.:i The court may, in its discretion,
receive the declaration first and the evidence of connec-
tion subsequently,4 though it is conceded that the rule
calling for preliminary proof should not be departed from
except under particular and urgent circumstances. It has

1 Tyler v. Angevine, 15 Blatchf.
541,1 Greenleafs Ev. §111.

N. y.Guar. & End. Co. v. Gleason,
78 X. Y. 503. See .Johnston v. Thomp-
son, 23 Bun (N, Y.) 90; Baptisl
Church v Brooklyn I'. I. Co., 28 N.
Y. 153 ; Cortland Co. v. Berkimer Co. ,
H N Y. 22

Woodruff, J., in Cuyler v. McCar-

ney, W N. Y 229 . Boyd v. .1 s. <i0

Mr.. 454 . N Y. Guaranty & End. Co.
v Gleason, 7 ALL. N. < !. (N. Y.) :;:;( ;

Kei ly v I >i vine. 77 End. 49 '<■ In

Winchester .\ Partridge Mfg. Co. v.
Creary, in; D. 8. 166, 6 S. C Etep.
869, the <■' «ii it Baid : " Without ex-
tending this opinion bj a review of
tin' adjudged cases in which there
was proof of a concerl or collusion
between vendor and vendee to de-
fraud creditors, and in which subse-

quent declarations of the vendor were
offered in evidence against the vendee
to prove the true character of the
sale, it is sufficient to say that such
declarations are not admissible
against the vendee, unless the alleged
common purpose to defraud is first
established hy independent evidence,
ami unless they have such relation to
the execution of that purpose that
they fairly constitute ;i part of the
res gestae. There was no such inde-
pendent evidence in this case, and
there is no foundation for the charge
of a conspiracy between the vendors
and vendee to hinder creditors, out-
side of certain statements which
Welili is alleged to have made after
his linn had parted w if h the title and
surrendered possession."'

4 Place \ Minster, 65 N. Y. 80.

§ 28l PROOF OF CIRCUMSTANCES. \gj

been said that the testimony of one witness is enough to
let in the acts and declarations of a wrong-doer, and that
the court will not decide upon the question of his cred-
ibility ; * and in Pennsylvania the rule seems to prevail
that the least degree of concert or collusion between
parties to an illegal transaction makes the act of one the
act of all.2

§281. Proof of circumstances. — In litigations of the
class under consideration, great latitude should undoubt-
edly be allowed in regard to the admission of circum-
stantial evidence,3 for the purpose of proving participa-
tion in manifest fraud.4 Objections to testimony as
irrelevant are not favored in such cases, since the force of
circumstances depends so much upon their number and
connection.5 The evidence should be permitted to take
a wide range, as in most cases fraud is predicated of cir-
cumstances, and not upon direct proof.6 Proof is said to
establish the truth, and circumstantial evidence to lead
toward it ; hence any pertinent and legitimate facts, con-
ducing to the proof of a litigated issue, constitute evi-
dence of the disputed fact, stronger or weaker, according
to the entire character and complexion of it, or as affected
by conflicting evidence.7 Though the evidence to prove
fraud may be circumstantial and presumptive, it "must be

1 Abney v. Kingsland, 10 Ala. 355, 37 Minn. 218, 34 N. W. Rep. 21;
361. Brittain v. Crowther, 54 Fed. Rep.

2 Confer v. McNeal, 74 Pa. St. 115; 295: Reynolds v. Gawthrop's Heirs,
Gibbs v. Neely, 7 Watts (Pa.) 307; 37 W. Va. 3, 16 8. E. Rep. 364 See
Rogers v. Hall, 4 Watts (Pa.) 361; § 13: Engraham v. Pate, 51 Ga. 587.
McDowell v. Rissell, 37 Pa. St. 164 ; 6 Sarle v. Arnold, 7 R. I. 586 : ( lastle
Hartman v. Oilier. 62 Pa. St. 37. v. Billiard. 23 How. 187.

3 Schumacher v. Bell, 164 111. 184, 6 Ferris v. Irons, 83 Pa. St lvj.
45 N. E. Rep. 428. See Wright v. Linn, L6 Tex. 84 ; Laird

4 Curtis v. Moore, 20 Md. 96 ; Shealy v. Davidson, 124 End. 412, 25 N. E.
v. Edwards, 75 Ala. 416 ; Nicolay v. Rep. 7; Hinton \. Greenleaf, lis N.
Mallery, 62 Minn. 121, 64 N. W. Rep. C. 7, 23 S. E. Rep. 924

108 ; O'Donnell v. Hall, 157 Mass. 463, 'Miles v. Edelen, 1 Duv. (Ky.)

32 N. E. Rep. 666; Allen v. Fortier, 270.

32

498 PROOF "I CIRCUMSTANCES. § 28 1

strong and cogent, such as to satisfy a man of sound
judgment of the truth of the allegation." ■ But the alle-
gation of fraud in a civil action need not, like the charge
of crime, be proved by evidence excluding all reasonable
doubt ; a preponderance of evidence will suffice.2 But in
order to justify a finding of fraud, the inference to be
drawn from the circumstances relied on must not only be
consistent with the fraudulent acts charged, but incon-
sistent with honesty and good faith.3 So it is not error
to refuse to charge a jury that "they must be satisfied
from the clearest and most satisfactory evidence," since it
is the province of the jury to weigh the evidence.4 "Cir-
cumstantial evidence," said Bradley, J., " is not only suffi-
cient, but in most cases it is the only proof that can be
adduced."5 Often other things which cro to characterize
a transaction are more convincing than the positive
evidence of any single witness, especially of an interested
witness.6 The only true test is whether the evidence can
throw light on the transaction, or whether it is totally
irrelevant.7 It is the duty of the court, however, to see
that such evidence has at least a natural and reasonable
tendency to sustain the allegations in support of which it
is introduced ; that it is of such a character as to warrant
an inference of the fact to be proved, and amounts to
something more than a mere basis for conjecture or

Henry v. Henry, 8 Barb. (N. Y. I Mass. 275, 876; White v. Perry, 14 W.

Va. 66; Butler v. Watkins, 13 Wall.

Strader v. Mullane, 17 Ohio St . 456; Armstrong v. Lachman, 84 Va.

626 726, 6 S. K. Rep. L29; Saunders v.

- Blish \ CoMns, 68 Mich. 542, 3(5 Parrish, 86 Va. 592, 10 S. E. Rep. 748.

N W\ Rep. 781. "Molitor v. Robinson, 40 Mich. 202.

1 Painter v. Drum, 40 Pa. St. 467. Sec Blue v. Penniston, 27 Mo. 274.

Rea « Missouri, 17 Wall. 543. 'Heath v. Page. 63 Pa. St. 108-126,

ookev Cooke, 43 Md. 525 ; King and cases cited. See Stewart v. Fen-

\. Poole. 61 <;.i :;Tl ; Sarle v. Arnold, ner, 81 Pa. St. 177; Booth v. Bunce,

• R- I r>85; Castle v. Bullard, 23 33 N. Y. 159 ; Gollobitsch v. Rainbow,

Bow. 181 Winchester v. Charter, 102 84 Iowa 567, 51 X. W. Rep. 48.

§281

PROOF OF CIRCUMSTANCES.

I.99

vague speculation.1 Evidence may be legally admissible
as tending to prove a particular fact which by itself is
utterly insufficient for that purpose. " It may be a link
in the chain, but it cannot make a chain unless other
links are added." 2 So in England it is settled that the
preliminary question of law for thexourt is not whether
there is absolutely no evidence, but whether there is none
that ought reasonably to satisfy the jury that the fact
sought to be proved is established. If there is evidence
on which the jury can properly find for the party on
whom the onus of proof lies, it should be submitted ; if
not, it should be withdrawn from the jury.3

Greater latitude is undoubtedly allowable in the cross-
examination of a party who places himself upon the stand
than in that of other witnesses.4 The cross-examination
of a witness not a party is usually confined within the
scope of the direct examination.5 Then again proof of

1 Battles v. Laudenslager, 84 Pa.
St. 451.

2 Howard Express Co. v. Wile, 64
Pa. St. 206.

Latitude of the inquiry. — In Balti-
more & Ohio R. R. Co. v. Hoge, 34
Pa. St. 221, Thompson, J., said : " It
is a great error, generally insisted on
by defendants, in cases involving
questions of fraud, that each item of
testimony is to be tested by its own
individual intrinsic force, without
reference to anything else in the case ;
and if on such a test it does not prove
fraud, it must be excluded. The
system of destroying in detail forces
designed for concentrated action does
well, doubtless, in military opera-
tions ; but a skillful general never
suffers such a disastrous result, except
when he cannot prevent it. Courts
have the power, and must prevenl
such a system of assault, otherwise
fraud would ever be victorious. It is

a subtle element, and is to be traced
out, if at all, by the small indices dis-
coverable by the wayside where it
travels : and to enable courts and
juries to detect it, they must in most
cases aggregate many small items,
before the true features of it are dis-
cernible. Hence it is that great
latitude in the investigation is a rule
never departed from in such cases.
This rule is elementary, and a cita-
tion of authorities to prove it would
not only be useless, but superfluous."

3 Ryder v. Wombwell, L. R. 4
Exch. 39; Jewell v. Parr, 13 C. B.
916.

4 Rea v. Missouri, 17 Wall. 542;
Cox v. Einspahr, 40 Neb. 411, 58N.
W. Rep. 941 ; Riddell v. Munro, (9
Minn. 532, 52 N. W. Rep. 141.

5 Rea v. Missouri, IT Wall. 542;
Johnston v. Jones, 1 Black 216 ;
Teese v. Huntingdon. 23 How. 'J.

50O PROOF OF CIRCUMSTANCES. § 281

collateral facts tending to show a fraudulent intention is
held to be admissible whenever a fraudulent intention is
to be established.1 The fact that at the time of the sale
suits were pending against the debtor, or that he was
apprehensive that suits would be commenced, and also his
general pecuniary condition, or that the parties are rela-
tives,2 or the security larger than the debt,3 are matters
which the creditor should be permitted to show.4 A
promise not to disclose the existence of a mortgage is
evidence of fraud.5

The maxim " omnia prasumuntur contra spoliatorem"
is frequently invoked by creditors in cases where the
debtor or those acting in collusion with him have spirited
away witnesses,6 or altered, destroyed, or suppressed
documents.7 And curiously enough the maxim " De
minimus non curat lex" has been applied where the sum
claimed to have been misappropriated by the debtor
was insignificant in value or amount.8

We have already glanced at the effect of inadequacy of
consideration,9 and have seen that it may be so gross as
to shock the conscience and furnish decisive evidence of
fraud.10 In an Oregon case this language occurs: ''The
fact that one person has obtained the property of another,
under a form of purchase, without having paid any con-
sideration therefor, and with a design of acquiring it for

United Slates v. 36 Barrels of 7 See Wardour v. Berisford. 1 Vera.

High Wines, ? Blatchf. 474; Wood 452; Attorney-General v. Dean of

\. United States, 16 Bet. 342-361. Windsor, 24 Beav. 679: Armory v.

Beeves v. Skipper, 94 Ala. 107, 10 Delamirie, 1 Stra. 505. Compare

So Rep. 309. Stateof Michigan v. Phoenix Bank, 33

'Kellogg \. dyne. :,; Fed. Rep. N. Y. '.). Hut we cannot outer this

696 wide field See is Am. Law Rev.

Barrel] v. Mitchell, 61 Ala. 278. 185.

Bee Chap XVI. -Crook v. Rindskopf, l0.-> N. Y.

Wafer n. ll.nvey County Bank, 484, 12 N. E. Rep. 174.

16 Kan. 597, 26 Pac Rep. 1032. 'See .: 282. A.rcher \. Lapp, 12

■ See Kirbj v. Talhnadge, 160 U. S. Ore. 202. 6 Pac. Rep. 672.

'" See Pomeroy's Eq/Jur., § 927.

§ 282 I >THER FRAUDS. 501

nothing, js fraudulent in itself.1 It is error for the court
to direct the jury as to what weight shall be given to
particular items of the testimony.2

§282. Other frauds. — It is competent, in order to estab-
lish the fraudulent intent of the debtor, to give proof of
other fraudulent sales 8 effected about the same time,4
and of his proposals to make other covinous alienations
together with his statements and declarations showing
such intent.5 Johnson, J., said :6 " In actions involving
questions of fraud, the intent is always a material inquiry,
and for the purpose of establishing that, other acts of a
similar character, about the same time, may always be
shown." 7 This is especially the rule where there is any
relation or connection between the different transac-
tions,8 or they form any part of a connected scheme to
defraud.9 When the motives and intent of the parties
to an act become material, they may be shown by separate
and independent acts and declarations accompanying or
preceding the act in question. How far back such proof
may extend must depend upon the nature and circum-
stances of each particular case, and no positive rule can

'Archer v. Lapp, 12 Ore. 202, 6 Brayton, 38 N. Y. 198 ; Withrcra v.

Pac. Rep. 672. Biggerstaff, 87 N. C. 17<i.

2 First National Bank v. Lowrey, \msden v. Manchester, 40 Barb.
36 Neb. 290, 54 N. W. Rep. 568. (N. Y.) 16;!. Proof of other indebted-

3 Compare Trumbull v. Hewitt, 65 ness on the part of the debtor is
Conn. 60, 31 Atl. Rep. 492. admissible on the question of intent.

4 Benerlien v. O'Leary, 149 N. Y. Ross v. Wellman, 102 Cal. 1, 36 Pac.
38, 43 N. E. Rep. 417 ; Gary v. Rep. 402.

Hotailing, 1 Hill (N. Y.) 311. See80 '• Warren v. Williams. 52 Me. 846;

N. Y. 374 n. Flagg v. Willington, »'. Me. 386.

6Pomeroy v. Bailey, 43 N. H. 125. Evidence that the grantee had been

and cases cited; Blake v. White, 13 engaged in other fraudulent transac-

N. H. 267; Pierce v. Hoffman, 24 Vt. tions, entirely distinct from the our

527 ; Beuerlein v. O'Leary, 149 N. Y. under consideration, is not admissible.

33; Spaulding v. Keyesf 125 N. Y. Kaufer v. Walsh, 88 Wis. 68, 59 V

113, 26 N. E Rep. 15. Butsee Staples W. Rep. 460.

v. Smith, 48 Me. 470 ; Huntzinger v. B Erfort v. Consalns, IT Mo. 212.

Harper, 44 Pa. St. 204 ; McCabe v. 'Smith v. Schwed, 9 Fed. Rep.

483; Clarke v. White. 12 Pet. 193.

5<32 SUSPICIONS INSUFFICIENT. § 283

be laid down. In the case of fraudulent conveyances the
proof will usually be limited to similar acts occurring
about the same time.1 Other conveyances tending to
strip the debtor of his property may be proved.2

It has been considered, however, not competent for a
party imputing fraud to another to offer evidence to
prove that the other dealt fraudulently at other times and
in transactions wholly disconnected with the one under
consideration.3 It is believed that such testimony would
tend to prejudice the minds of the jury by impeaching
the general character of the party charged with the fraud,
when he had no right to expect such an attack, and could
not be prepared to defend himself, however unimpeach-
able his conduct might have been.4

§ 283. Suspicions insufficient. — Mere suspicion of the
existence of fraud, as we have said,5 is not sufficient to
establish its existence, but it must be clearly and satis-
factorily shown.6 The evidence must convince the
understanding that the transaction was entered into for a
purpose prohibited by law.7 Tangible facts must be
adduced from which a legitimate inference of a fraudulent
intent can be drawn.8 Again circumstances amounting

1 Pomeroy v. Bailey, 43 N. H. 125 : Petersen v. Schroeder, 75 Wis. 571, 44

Bernheim v. Dibrell, 66 Miss. 199, 5 N.W. Rep. 652; McEvony v. Rowland,

So. Rep. 693. 43 Neb. 98, 01 N. W. Rep. 124. See

• Boffnian v. Eenderson (Ind. §§5,6.

L896) II X. E. Rep. 629. " In actions for false representations

Seating v. Retan, SO Mich. 324, there must be representation, falsity,

45N. W. Rep 111. scienter, deception and injury. Ar-

'Siiims v. Skinner, HI Mass. 360 ; thur v. Griswold, 55 N. Y. 400; Brack-
Grant v. Libby.71 Me. 430. As t<. ett v. Griswold, 112 N. Y. 467. 20 N.
when false statements to a commer- E Rep. 376; Wheadon v. Hunting-
cial agency as to assets and liabilities ton, 83 Hun (N. V.) 372, 31 N. Y.
ina\ in- -how n, see Treusch v. <)t- Snpp. 912.
tenburg 54 I • I Rep. 867. ' Pratt v. Pratt, 96 111. 184.

Sherman v. Bogland, 73 Intl. B Sherman v. Hogland, 73 Ind.

173 . I l.-.rk v. Krause. 12 Mackej 1 D. C.) 177 ; Jaeger v. Kelley, 52 N. Y. 274.

Jaeger v. Kelley, 52 X. V. 274; See Chap. XVI.
Ridge \. Grieswell, 53 Mo. A.pp. 479;

§284

PROVING \ A I i l .

503

to a suspicion of fraud are not to be deemed notice of it,
and where an inference of notice is to affect an innocent
purchaser, it must appear that the inquiry suggested would
have resulted, if fairly pursued, in the discovery of the
defect or fraud.1 The transaction will not be overturned
even though the court finds " that there is ground of
suspicion." 2

§ 284. Proving value. — As we have seen, the value of
the assigned property is always important in the question
of fraud.3 Experts may be called to prove value. In
Bristol Co. Savings Bank v. Keavy,4 the witness was a
real estate broker and auctioneer, and was accustomed
to sell and value lands in various parts of the city in
which the property was located, and had appraised land
on the street where the premises were situated. He was
held to be plainly qualified to testify as to the value of
the land.

1 Simnis v. Morse, 4 Hughes 583.
See Ledyard v. Butler, 9 Paige (N. Y.)
132.

• ! Parker v. Phetteplace, 1 Wall.
683. Mr Jenks, the learned counsel
for the creditor in this action, relied
largely upon the suspicious circum-
stances in evidence, and urged that
proof of a covenant to commit the
fraud could not be adduced, nor even
proof of words. Some of the greatest
crimes which power has ever com-
manded have been consummated
without a word of direct instruction.
The learned reporter, in a note to this
case, aptly quotes from King John,
Act III, Scene III :

King John. ....

" Hear me without thine ears, and make

reply
Without a tongue, using conceit alone,
Without eyes, ears, and harmful sound of

words ;
Then, in despite of broad-eyed watchful day,
I would into thy bosom pour my thoughts ;

Hut ah, I will not : —

Dost thou understand me?
Thou art his keeper.
Hubert. And I will keep him so.

That he shall not offend your majesty."

Again, after the murder,
Scene II. :

Act IV.

King John . ....
" Hadst thou but shook thy head or made R

pause,
When I spake darkly what I purposed ;
Or turn'd an eye of doubt upon my lace.
As bid me tell my tale in express words ;
Deep shame had struck me dumb, made me

break off,
And those tny fears might have wrought

fears in me :
But thou didst understand cue by my signs.
And didst in signs again parley with sin,
Yea, without stop, didst let thy heart consent.
And, consequently, thy rude hand to act
The deed which both our tongues held vile to

name. — "

3 Stacy v. Deshaw, i Bun (N. Y.)
451. See §§23, 41.

4 128 Mass. 303.

504 RECITALS — TESTIMONY. §§2843,285

§ 284a. Recitals in deed. --The recitals in a deed are

manifestly not conclusive against creditors attacking the

deed.1 Any different rule would be destructive of the
rights of creditors.

§ 285. Testimony must conform to pleadings. — 1 he com-
plainant will only be allowed to prove the truth of the
allegations contained in his bill. Evidence relating to
other matters will be excluded upon well-established
principles of pleading which require the complainant to
state the case upon which he seeks relief, to the end that
the court may learn from the pleading itself whether the
creditor is entitled to the relief prayed, and that the
defendant may be advised as to the matters against
which he is to defend.2 Facts admitted in the pleading
cannot be contracted or varied by evidence.

1 De Farges v. Ryland. 87 Va. 404, v. First Nat, Bk., 84 N. Y. 420 ; South-

12 S. E. Rep. 805 ; Hubbard v. Allen, all v. Farisb, 85 Va. 410. 7 S. E. Rep.

59 Ala. 296. 534 ; Pusey v. Gardner, 21 W. Va.

- Parkhurst v. McGraw, 24 Miss. 476, 477; Bierne v. Ray, 37 W. Va.

139. See Truesdell v. Sarles, 104 N. 577, 16 S. E. Rep. 804. See § 140.
Y. 167, 10 N. E. Rep. 139 ; Soutbwick

CHAPTER XIX.

DEFENSES.

§ 286. As to defenses.
28G<x. Another action pending.
2865. Attacking judgment.

287. Laches — Estoppel.

288. )

08g r Lapse of time.

290. Discovery of the fraud.

291. Judge Blatchford's views.

292. Statute of limitations.

293. Limitations in equity.
293a. Statute of frauds.

§ 294. Insolvency or bankruptcy dis-
charges.
395. Existing and subsequent cred-
itors.

29G. Sufficient property left — (iift
of land.

297. What sheriff must show against
stranger.

297a. Set-off.

297o. Attacking consideration.

297c. When controversies not sepa-
rable.

§ 286. As to defenses. — The principal defenses interposed
in suits prosecuted to annul fraudulent transfers, as is
elsewhere shown, are, that the purchaser acquired the
title or property bona fide, without notice of or participa-
tion in the grantor's fraudulent intent, and that adequate
consideration was paid or given for it. The principles
and authorities governing these branches of our investi-
gation have been considered of sufficient moment to call
for treatment in separate chapters,1 and need not be
again discussed, but there are certain lines of defense
common to this class of litigation which command at
least passing attention. It may be observed at the out-
set that the fact that forms of law have been pursued is
no protection in a court of equity, if the result aimed at
and reached, is a fraud.2 The transaction must be judged
by its real character, rather than by the form and color
which the parties have seen fit to give it.3 What cannot

1 See Chaps. XV, XXIV. a Quackenbos v. Saver, 62 N. Y. 346;

-Metropolitan Bank v. Durant, 22 Vreeland v. New Jersej Stone Co., 29

N. J. Eq. 35, 41. N. J. Eq. 190; Fiedler v. Damn, 60

506 ANOTHER ACTION PENDING — LACHES. §§ 286a-287

be done directly cannot be done by indirection ; and
when fraud appears, the forms will be discarded and the
corrupt act exposed and punished.1

It is not a fraud for a debtor to fail to plead the statute
of limitations,2 and an abandonment by a debtor of a
technical defense is not a fraud on other creditors.3

§286a. Another action pending. —The general and salu-
tary principle of procedure that no person shall be twice
vexed for the same cause, of course, applies to proceed-
ings instituted by creditors. Thus, in a case which arose
in Pennsylvania, where a creditor's bill was filed against
directors of an insolvent bank, charging mismanagement
of its affairs, and an assignee of the bank subsequently
brought an action at law, in the name of the bank, against
the directors for the. same cause, it was held that the
pendency of the bill was well pleaded in abatement in
the action at law.4

§286b. Attacking judgment. —The judgment upon which
the creditor's bill is founded is conclusive against the
debtor.5 Clear proof of fraud is required to impeach a
judgment on which a creditor's bill is based.0

§ 287. Laches — Estoppel. — We have elsewhere discussed
the cases relating to the sufficiency of pleas excusing

X. V. 440, where the rule is applied ' Buck v. Voreis, 89 Ind. 117.
to usurious transactions. Judgment- - Christie v. Bridgman, 51 N. J. Eq.
creditors are considered to be acting 333, 25 Atl. Rep. 939, 30 Id. 429 ; Shep-
iu privity with their debtor in attack- pard's Estate, 180 Pa. St. 61, 36 Atl.
ing or defending any usurious con- Rep. 422; Allen v. Smith. 129 U. S.
tract which he may have made. 465, 9 S. C. Rep. 338; French v. Mot-
Chandler v. Powers, 24 N. Y. Daily ley, 63 Me. 326.
Reg., p. 1201 (Dec. 28, 1883). SeeMer- 8 Inglehart v. Thousand Island
chants' Exch. Nat. Bk. v. Commercial Hotel Co., 109 N. Y. 454, 17 N. E.
Warehouse Co., 49 N. Y. 642, and Rep. 358.

QOte. tt seems thai it is not a fraud 4Warner v. Hopkins, 111 Pa. St.

upon creditors for a debtor or as- 328.

signor to provide for the payment of 6See§74.

a usurious debt. See Chapin v. Thomp- 'Walters v. Walters, 28 111. App.

son, B9 N. Y. 371 ; Murray v. Judson, 633.
9 N X". 78

§287 LACHES — ESTOPPEL. 507

apparent laches in filing a bill to annul a fraudulent
transfer.1 Endeavoring to avoid unnecessary repetition,
let us recur to the subject of laches considered as a
defense or bar to a suit. " Courts of equity do not
impute laches by an iron rule. Circumstances are
allowed to govern every case." ~ It may be asserted at
the outset that equity will not be moved to set aside
a fraudulent transaction at the suit of one who, after he
had knowledge of the fraud, or after he was put upon
inquiry, with the means of knowledge accessible to him,
has been quiescent during a period longer than that fixed
by the statute of limitations.3 He must have used
reasonable diligence to inform himself of the facts.4
A stale and uncertain demand, as, for instance, a bill filed
to set aside an alleged fraudulent conveyance nineteen
years old, should not be allowed in a court of equity:'
The rule is peculiarly applicable where the difficulty of
doing entire justice arises through the death of the prin-
cipal participants in the transactions complained of, or of
the witnesses.6 In Eigleberger v. Kibler,7 it appeared
that the complainant had permitted the conveyance in
question to stand for nearly ten years, during which
period many valuable improvements had been made by
the grantee, and the creditor had also suffered other
creditors, junior in date to him, to acquire prior liens, and

1 See §§148,149. See Cedar Rapids ' Foster v. Mansfield C. &. L. M. R.
Ins. Co. v. Butler, 83 la. 124, 48 N. \V. R. Co., 146 U. S. 88, 13 S. ('. Re]
Rep. 1026. Halstead v. Grinnan, 152 U. S. 117. 14

2 Waterman v. Sprague Manuf. S. C. Rep. 641; PearsaU v. Smith. 149
Co., 55 Conn. 574. U. S. 231, 13 S. C. Rep. 833

Ita3 Burke v. Smith, 16 Wall. 401. B Dominguez v. Dominguez, 7 Cal.

Compare Meader v. Norton, 11 Wall. 424.

443 ; Trenton Banking Co v. Duncan, 'Hammond v. Hopkins. 1481 . S

86 N. Y. 221 ; Halstead v. Grinnan, 224, 12 S. C. Rep. 418.

152 U. S. 412, 14 S. C. Rep. 641; 7 1 Hill's Ch. (S. (.) 113, 20 Am.

Hathaway v. Noble, 55 N. H. 508 ; Dec. 192.

Higgins v. Crouse, 63 Hun (N. Y.)

139. 17 N. Y. Supp. 696.

508 LACHES — ESTOPPEL. §287

thus consume the estate of the debtor. Upon this state
of facts, the court very properly decided that the creditor,
having by his supineness allowed the fund to be taken
away, could not subsequently be permitted to make his
own laches aground of injury to another. Fifteen years'
delay was considered fatal in Norris v. Haggin.1 So it
has been considered an important element that the trans
actions out of which the suit arose commenced about thir-
teen years before any attempt was made toward impeach-
ment, and no efforts at concealment or secrecy were
shown.2 "After such delay," said Chief-Justice Waite,
" we are not inclined to set aside what has been permitted
to remain so long undisturbed, simply because of an
inability to explain, with exact certainty, from what pre-
cise source the money came, which went into the purchase
of each particular parcel of property." 3 A delay of twenty
years was deemed fatal in New Jersey.4

Chancellor Kent said, upon this subject : 5 '' There is
no principle better established in this court, nor one
founded on more solid considerations of equity and pub-
lic utility, than that which declares that if one man,
knowingly, though he does it passively, by looking on,
suffers another to purchase and expend money on land,
under an erroneous opinion of title, without making
known his claim, he shall not afterwards be permitted to
exercise his legal right against such person. It would be
an act of fraud and injustice, and his conscience is bound

136 r. 8. 386, 10 S. C. Rep. 942. J Frenche v. Kitchen, 53 N. J. Eq.

Compare Foster v. Mansfield, C. & L. 37, 30 All. Rep. 815.

M. I: R. Co., L46 U. 8. 88, 13 S. C. s Wendell v. Van Rensselaer, 1

Rep 88; Leggett v. Standard Oil Co., Johns. Ch. (N. V.) 354. In Corbitt

149 r. s. 394, 18 8. C. Rep. 903. v. Cutoheon, 79 Mich. 41, 44 N. W.

1 Aldridge \ Muirhead, 101 U. S. Rep. 163, it was held that mere acqui-

401. escence by taking no present measure

Udridge v. Stairhead, 101 U.S. Lb not enough to prevent afterwards

403. See Norria v. Eaggin, 130 U. 8. the bringing of an action, in the ab-

0 s C. Rep. 942. Bence of facts upon which an estoppel

could be predicated.

<J 288 I ^PSE OF 'II Ml . 509

by this equitable estoppel."1 The Court of Appeals of
New York could "see no reason why the same principle
should not protect creditors, who have given credit upon
the faith of the apparent ownership of property in pos-
session of the debtor, against a secret unrecorded con-
veyance, fraudulently concealed by the grantee ; as when,
with knowledge that the debtor is holding himself out as
owner, and is gaining credit upon this ground, he keeps
silence, giving no sign."1 But in this latter case the
creditor's suit failed because of his laches in not examin-
ing the record, and because of a lack of evidence of
knowledge of circumstances which called upon the
defendant to record his deed. Of course, if the creditor,
with full knowledge of the fact which constitutes the
fraud, assents to it, he cannot attack the conveyance,
and he cannot, by making a colorable assignment of his
claim, invest another with the right to attack the convey-
ance. But if he buys a claim from another creditor who
had no knowledge of the fraud, he succeeds to all the
rights of such creditor and can maintain a bill to set the
conveyance aside.3

§ 288. Lapse of time. — The general principle of equity
jurisprudence that lapse of time, independent of limita-
tions or simple laches, may constitute a defense to a suit,
is ably considered by McCrary, J., in United States v.
Beebee,4 in an action brought to annul fraudulent

'Laches and limitations apply to Given, 8 Johng. (N.Y.) 1S7; Alexander

municipal corporations and county v. Pendleton, 8 Cranch 162.
commissioners. Boone Co. v. Burling- 4 17 Fed. Rep. 37; Laughlin v.

ton & M. R. R. Co., 139 U. S. 693, 11 Calumet & Chicago Canal & Dock

S. C. Rep. 687. Co., 13 C. C. A. 1. 65 Fed. Rep ill.

2 Trenton Banking Co. v. Duncan. It is nol easy to define whal consti-
86 N. Y. 229; Randolph's Ex'r v. tutes a stale equity; length of time
QuidnickCo., 135 U. S. 457, 10 S. C. alone is not the test; the question
Rep. 655. must be determined by the facts and

3 Johnson v. Rogers, 15 N. B. K. I, circumstances of each case, and ac
13 Fed. Cas. 795. See Jackson v. cording to the natural principles of

510 LAPSE OF TIME. §288

patents. The court says in substance that the authorities
support the proposition that lapse of time may be a good
defense in equity, independently of any statute of limita-
tions, and it shows that the doctrine rests not alone upon
laches ; it is often put upon one or all of the following
grounds, namely : First, that courts of equity must, for
the peace of society, and upon grounds of public policy,
discourage stale demands by refusing to entertain them ;
second, that lapse of time will, if long enough, be regarded
as evidence against the stale claim, equal to that of
credible witnesses, and which, beinc: disregarded, would in
a majority of cases lead to unjust judgments ; third, that
after the witnesses who had personal knowledge of the
facts have all passed away, it is impossible to ascertain
the facts, and courts of equity will, on this ground, refuse
to undertake such a task. Thus Mr. Justice Story says:
" A defense peculiar to courts of equity is founded upon
the mere lapse of time, and the staleness of the claim, in
cases where no statute of limitations directly governs the
case. In such cases, courts of equity act sometimes by
analogy to the law, and sometimes act upon their own
inherent doctrine of discouraging, for the peace of
society, antiquated demands, by refusing to interfere
when there has been gross laches in prosecuting rights,
or long and unreasonable acquiescence in the assertion of
adverse rights." 1 And in Maxwell v. Kennedy,2 the
Supreme Court of the United States, in answer to the
argument that there was no statute of limitations applica-
ble to the case at bar, said : " We think the lapse of time,
upon the facts stated in the bill and exhibits, is, upon
principles of equity, a bar to the relief prayed, without
reference to the direct bar of a statute of limitations."
Chief Justice Fuller says: "In all cases where actual

justice tfeppacb v. Jones, 20 Ore. l 2 Story's Eq., § 1520.
491, 26 Pac. Rep. 569, 849. • 8 How. 222.

§ 28o LAPSE OF TIME. 51 1

fraud is not made out, but the imputation rests upon con
jecture, where the seal of death lias closed the lips of
those whose character is involved, and lapse of time has
impaired the recollection of transactions and obscured
their details, the welfare of society demands the rigid
enforcement of the rule of diligence. The hour-glass
must supply the ravages of the scythe, and those who
have slept upon their rights must be remitted to the
repose from which they should not have been aroused." '

§ 289. — Again, in Clark v. Boorman's Executors,2 the
same court observed : " Every principle of justice and
fair dealing, of the security of rights long recognized, of
repose of society, and the intelligent administration of
justice, forbids us to enter upon an inquiry into that
transaction forty years after it occurred, when all the
parties interested have lived and died without complain-
ing of it, upon the suggestion of a construction of the
will different from that held by the parties concerned,
and acquiesced in by them through all this time." In
Brown v. County of Buena Vista,3 the doctrine is
expressed in these words : " The lapse of time carries
with it the memory and life of witnesses, the muni-
ments of evidence, and other means of proof. The rule
which gives it the effect prescribed is necessary to the
peace, repose, and welfare of society. A departure from
it would open an inlet to the evils intended to be
excluded." In Harwood v. Railroad Co.4 the principle is
concisely and clearly stated thus : " Without reference
to any statute of limitations, the courts have adopted the

1 Hammond v. Hopkins, 143 U. S. S. 136, 7 S. C. Rep. 430; Phillips v.
224, 274, 12 S. C. Rep. 418. Negley, 117 U. S. 675, 6 S. < ' Rep. 901 :

2 18 Wall. 509. Abraham v. Ordway, 158 U. 8.416,

3 95 U. S. 161. See Emory v. Pal- 15 S. C. Rep. 891 ; Balsey v. Cheney,
mer, 107 U. S. 11 ; National Bank v. 68 Fed. Rep. 763.

Carpenter, 101 U. S. 568; Kirby v. * 17 Wall. 78, 81.
Lake Shore & M. S. R. R. Co.. 120 U.

3,12 DISCOVERY OF THE FRAUD. § 290

principle that the delay which will defeat a recovery must
depend upon the particular circumstances of each case."
Lord Redesdale observed : "It is said that courts of
equity are not within the statute of limitations. This is
true in one respect ; they are not within the words of the
statutes, because the words apply to particular legal
remedies ; but they are within the spirit and meaning of the
statutes, and have always been so considered." J Import-
ant discussions of this general principle may be found in
Elmendorf v. Taylor2 and Badger v. Badger.3 In Boone
v. Childs 4 the rule is thus laid down : " A court of
chancery is said to act on its own rules in regard to stale
demands, and independent of the statute. It will refuse
to give relief where a party has long slept on his rights,
and where the possession of the property claimed has
been held in crood faith, without disturbance, and has
greatly increased in value." In Wilson v. Anthony,5 cited
with approval by the Supreme Court of the United States
in Sullivan v. Portland & Kennebec Railroad Company,6
the doctrine is well stated thus : " The chancellor refuses
to interfere after an unreasonable lapse of time from con-
siderations of public policy, and from the difficulty of
doing entire justice when the original transactions have
become obscured by time, and the evidence may be lost."

^j 290. Discovery of the fraud.— It is a general rule that
where the party injured by the fraud remains in ignorance
of it, without any fault or want of care on his part, the
statute does not begin to run until the fraud is discovered
by, or becomes known to, the party suing, or those in

Hovenden v. Lord Annesley, 2 *94U. S. 311. And see Hume v.

Sch & Let 607. Beale, 17 Wall. 343 ; Ball v. Law, 102

10 Wheat. 172. U. S. 46!) ; Godden v. Kimmell, 99 0".

'■Vail 94 S. 210 ; Pusey v. Gardner, 21 W. Va.

1 10 Pel 481.
• 19 Ark. 16. See Gibson \ Ber
riott, 56 \rk. 98, L7 8. W. Rep 589.

§ 29l

JUDGE BLATCHFORD'S VIEWS.

- « i

privity with him.1 "To hold that by concealing a fraud,"
says Miller, J., " or by committing a fraud in a manner thai
it concealed itself until such time as the party committing
the fraud could plead the statute of limitations to protect
it, is to make the law which was designed to prevent
fraud the means by which it is made successful and
secure."2 This, as we have already shown, is a rule of
pleading,3 as well as a matter of evidence or of defense.
The party defrauded must be diligent in inquiry.4

§ 291. Judge Blatchford's views. — This subject was ably
discussed in Tyler v. Angevine,5 by Blatchford, J., while
a circuit judge. He said: "In suits in equity, the
decided weight of authority is in favor of the proposition,
that, where the party injured by the fraud remains in
ignorance of it without any fault or want of diligence or
care on his part, the bar of the statute does not begin to
run until the fraud is discovered, though there be no special
circumstances or efforts, on the part of the party commit-
ting the fraud, to conceal it from the knowledge of the
other party.6 On the question as it arises in actions at
law, there is, in this country, a very decided conflict of
authority. Many of the courts hold that the rule is sustained
in courts of equity only on the ground that these courts

1 Upton v. McLaughlin, 105 U. S.
640 : Bailey v. Glover, 21 Wall. 349 ;
Gifford v. Helms, 98 U. S. 248 ; Erick-
son v. Quinn, 47 N. Y. 413 ; Richard-
son v. Mounce, 19 S. C. 477 ; Harrell
v. Kea, 37 S. C. 369, 16 S. E. Re].. 42 ;
Weaver v. Haviland. 68 Hun (N. V.)
376, 22 N. Y. Supp. 1012.

2 Bailey v. Glover, 21 Wall. 349,
mpra ; Kirby v. Lake Shore & M. S.
R. R. Co., 120 U. S. 136, 7 S. C. Rep.
430.

3 See §£ 148, 149.

4 Gillespie v. Cooper, 36 Neb. 786,
55 N. W. Rep. 302 ; Norris \. Haggin,

33

28 Fed. Rep. 275 ; O'Dell v. Burnbani,
fil Wis. 562, 21 N. W. Rep. 635 ; Kuhl-
iiKiu v. Baker, 50 Tex. 630; Co<
Lee, 75 Texas 111. 12 s. W. Rep. 188.

5 15 Blatch. 541.

6 Citing Booth v. Warrington, 1
Bro. P. C. 163 ; South Sea Co. v.
Wymcmdsell, :l 1'. Wins. 1 1:: ; Boven-
den v. Lord Aini^lrv, 3 Sch. <\ I .< 1
634; Stearns v. Page, 7 Bow. 819;
Moore v. Greene. 19 Bow. 'i'.i ; Sher-
wood \. Sutton, 5 Mason 143; Snod-
-niss v. Branch Bank of Decatur. 25
Ala. Mil.

514 JUDGE BLATCHFORD S VIEWS. £291

are not bound by the mere force of the statute, as courts
of common law are, but only as they have adopted its prin-
ciple as expressing their own rule of applying the doctrine
of laches in analogous cases. They, therefore, make
concealed fraud an exception on purely equitable prin-
ciples.1 On the other hand, the English courts, and the
courts of Connecticut, Massachusetts, Pennsylvania, and
others of great respectability, hold that the doctrine is
equally applicable to cases at law.2 As the case before
us is a suit in equity, and as the bill contains a distinct
allegation that the defendants kept secret and con-
cealed from the parties interested the fraud which is
sought to be redressed, we might rest this case on what
we have said is the undisputed doctrine of the courts of
equity, but for the peculiar language of the statute we are
considering. We cannot say, in regard to this Act of
limitations, that courts of equity are not bound by its terms,
for its very words are, that no suit at law or in equity
shall in any case be maintained unless brought within two
years, etc. It is quite clear that this statute must be held
to apply equally, by its own force, to courts of equity and
to courts of law, and, if there be an exception to the
universality of its language, it must be one which applies,
under the same state of facts, to suits at law as well as to

suits in equity And we are also of opinion, that

this is founded in a sound and philosophical view of the
principles of the statute of limitations. They were enacted
to prevent frauds ; to prevent parties from asserting
rights after the lapse of time had destroyed or impaired

1 Citing Troup v. Smith, 20 Johns. & C. 149; First Mass. Turnpike Co.

: Callia v. Waddy, 2Munf. v. Field, 3Mass. 201 ; Welles v. Fish,

(Va.)511 : Miles v. Barry, 1 Bill's (S. 3 Pick. (Mass.) 75 ; Jones v. Conoway,

Law 296; York v. Bright, I I Xeates (Pa.) 109; Itusli v. Barr, 1

Humph. (Tenn.) 812. Watts (Pa.) 110; Pennock v. Free

iting Bree v. Holbech. Doug, man, 1 Watts (Pa.) 401 ; Mitchell v.

Clark v. Hougham, 3 Dow], & Thompson, 1 McLean 96; Carr v.

iranger v George, 5 Barn Hilton, I Curtis C. C. 280.

§292 STATUTE OF LIMITATIONS. 5 1 5

the evidence which would show that such rights never
existed, or had been satisfied, transferred or extinguished,
if they ever did exist. To hold that, by concealing a
fraud, or by committing a fraud in a manner that it con-
cealed itself, until such time as the party committing the
fraud could plead the statute of limitations to protect it,
is to make the law which was designed to prevent fraud,
the means by which it is made successful and secure."
Mr. Justice Harlan has said:1 " It is an established rule
of equity, as administered in the courts of the United
States, that, where relief is asked on the ground of actual
fraud, especially if such fraud has been concealed, time
will not run in favor of the defendant until the discovery
of the fraud, or until, with reasonable diligence, it might
have been discovered."

§ 292. Statute of limitations. — It follows then that, as to
a creditor who seeks to impeach a deed made by his
debtor conveying real estate to a third person in fraud of
his creditors, the statute of limitations, when applicable,
begins to run from the time the fraudulent deed is
recorded or from the time the creditor has actual notice
of the conveyance, whichever first occurs.2 In New York
the rule has been laid down that the statute does not
begin to run until the creditor has obtained judgment and
execution has been returned unsatisfied.3 It is familiar
learning that in the absence of a contrary rule established
by statute, a defendant who desires to avail himself of a
statute of limitations as a defense, must raise the question
either in pleading, or on the trial, or before judgment.4

1 Kirby v. Lake Shore & M. S. R. a Weaver v. Haviland, 142 N 5
R. Co., 120 U. S. 136, 7S.C. Rep. 430. 534,37 N. E. Rep. 641; Brown v.

2 Hughes v. Littrell, 75 Mo. 573; Campbell, 100 Cal. 685, 35 Pac. Rep.
Rogers v. Brown, 61 Mo. 187 ; Wright 433.

v. Davis, 28 Neb. 479, 44 N. W. Rep * Retzer v. Wood, L09 U. 8. 187,8

490; Conn. Mut. Life Ins. Co. v. S. C. Rep. 164; storm v. United

Smith, 117 Mo. 261, 22 S. W. Rep. States. 94 U. S. 81 ; Upton v. Mc-

628. Laughlin, 105 U. S. 640.

5 16 LIMITATIONS IN EQUITY. §§293-294

Ten years adverse possession is a good defense in Ala-
bama to a suit to set aside a deed as fraudulent x

£293. Limitations inequity. — In the consideration of
purely equitable rights and titles courts of equity act in
analogy to the statute of limitations,2 but are not bound
by it.3 As was said in the case of Hall v. Russell : '
•• When an action upon a legal title to land would be
barred by the statute, courts of equity will apply a like
limitation to suits founded upon equitable rights to the
same property. So, in cases of implied or constructive
trusts, where it is sought for the purpose of maintaining
the remedy to force upon the defendant the character of
trustee, courts will apply the same limitation as provided
for actions at law."5

§ 293a. Statute of frauds. — A contract to convey land
in consideration of labor or services to be rendered is
manifestly within the statute of frauds."

£ 294. Insolvency or bankruptcy discharges. — I he insolv-
ent laws of a State have, manifestly, no extra-territorial
force. They affect only contracts between citizens of the
State in which such laws were enacted." As was tersely
stated in Cook v. Moffatt,8 a certificate of discharge will
not bar an action brought by a citizen of another State
on a contract with him. Such was the conclusion of the

Snedecor v. "Watkins, 71 Ala. Is. pet. 66; Beaubien v. Reaubien, 23

See Metropolitan Bank v. St. Bow. 207, to which may be added,

Louis Dispatch Co.. 149 U.S. 148, 13 S. Wisner v. Barnet. \ Wash. C. C. 638;

C Rep. 944 ; Whitridge v. Whitridge, Kane v. Bloodgood, 7 Johns. Ch. (N.

76Md.85, 24 A.tl. Rep. 645 ; Godden Y.) 110 ; Michoud v. Girod, 1 How.

v. Kimmell, uu U. s. 201: Hammond 560.

v. Hopkins, 1 13 r. s. 274, l.-s C. Rep. B Masterson v. Little, 75 Tex. 68*,

418. 13 S. W. Rep. 154 ;Spraguev. Haines,

Manning v. Hayden, 5 Sawyer 68 Tex. 217, 4 S. W. Rep. 371.

•Hills v. Carlton, 74 Me. L56 ;

twyer 515. Rhawn v. Pearce, 110 111 350.

Citing Elmendorf v. Taylor, 10 s5How.295
Wheat. 176 ; Miller v. Mclntyre, (i

>M

BANKRl PTCV DIS( IIARG1 S.

Supreme Court of Maine in Felch v. Bugbee,1 where this
question is most carefully examined; and in Baldwin v.
Hale,2 citing that case with approbation, the court decided
that a discharge under the insolvent law of one State was
not a bar to an action on a note given and payable in the
same State, the party to whom the note was given being
a resident of a different State, and not having proved his
debt against the defendant's estate in insolvency, nor in
any manner having been a party to the proceedings.'1 In
Pratt v. Chase4 it is said that "as to creditors of the
insolvent who are not citizens of the same State where
the discharge is granted, the want of binding force to
defeat the obligation of a contract is founded upon the
want of jurisdiction over such creditors."5 A debt con-
tracted and payable in a foreign country is not barred by
a discharge under the United States Bankrupt Act, where

1 48 Me. 9 ; Silverman v. Lessor, 88
Me. 605.

■} 1 Wall. 223. In Brown v. Smart,
145 IT. S. 457, the court says: "So
long as there is no national bankrupt
act, each State has full authority to
pass insolvent laws binding persons
and property within its jurisdiction,
provided it does not impair the obli-
gation of existing contracts ; but a
State cannot, by such a law, (lis
charge one of its own citizens from
his contracts witli citizens of other
States, though made after the passage
of the law, unless they voluntarily
become parties to the proceedings
in insolvency. Sturges v. Crownin-
shield, 4 Wheat. 122 ; Ogden v. Saun-
ders, 12 Wheat. 213; Gilman v. Lock-
wood, 4 Wall. 409."

3 See Guernsey v. Wood, 130 Mass.
503 ; Bedell v. Scruton, 54 Vt. 493 ;
Watson v. Bourne, 10 Mass. 337 ;
Phelps v. Borland, 30 Hun (N. Y)
362, 366, 17 Weekly Dig. (N. Y.)
556; McMillan v. McNeill, 4 Wheat.

209; Hale v. Baldwin. 1 Clitl. 517,
affi'd as Baldwin v. Hale, 1 Wall.
223; Boyle v. Zacharie, 6 Pet. 635,
648; Soule v. Chase, 39 N. Y. 342;
Ogden v. Saunders, \2 Wheal. 313;
Green v. Sarmiento, 1 Pet. ( '. I 1 ; .
Palmer v. Goodwin, 32 Me. 535 : Very
v. McHenry, 29 Me. 206 ; Fiske v. Fos-
ter, 10 Met. (.Mass. | 597 ; ( 'ha-.- \ .
Flagg, 48 Me. L82 ; Savoye v. .Marsh.
10 Met. (Mass.) 594 ; Bell v. Lamprey,
1 Am. Insolv. Rep. it) : Scribner \ .
Fisher, 2 Gray i Mas-,.) 13; Smith v.
Smith, 2 Johns. I X. V. I 335 ; Gardner

v. Oliver 1 '- Bank, 1 1 Barb, i N. Y. i

558 : Towne v. Smith. I Woodb. & M
115; Peck v. Eibbard, 26 Vt. 698 ;

Eawley v. Hunt, -J? rowa 303 ; W I-

bridge v. Allen. 12 Met. i Mass. 170 :
Beer v. Hooper, 32 Miss. 346 ; Ander-
son v. Wheeler. 25 Conn. 608; (row
v. Coons. 27 Mo. 512.
*44N. V. 597.
1 *.iit compare Murray v. Rotten.
ham. 6 Johns. Ch. N >

EXISTING CREDITORS.

§295

the creditor was not a party to and had no personal
notice of the proceedings in bankruptcy.1 The discharge
of the debtor is not necessarily a bar to the creditor's
proceedings to reach property fraudulently alienated.
Thus, in State v. Williams," it appeared that A, having
made a fraudulent conveyance of his real estate, was
afterward sued by B. During the pendency of the suit,
A filed his petition in bankruptcy, and obtained his dis-
charge before judgment was had against him. After-
ward B filed a bill to set aside the fraudulent conveyance,
and to subject the property to the payment of the judg-
ment against A. The court held that the discharge in
bankruptcy was no bar to the proceeding. The creditor's
proceedings are quasi in rem?

§ 295. Existing and subsequent creditors. — It is said in
Collins v. Nelson 4 that, in a suit by a creditor to set
aside a conveyance of real estate, alleged to have been
executed by his debtor for the fraudulent purpose of
cheating, hindering and delaying the creditor in the

McDougall v. Page, 55 Vt. L87,
28 Alb. L. J. 372; See McMillan v.
McNeil, -1 Wheat. 309 ; Smith v. Bu-
chanan, 1 East 6; Klli^ v. McHenry,
!.. R. 6 I P. 22
• 9 Baxt. (Tenn.) 64.
A plea of discharge under a for-
Lnsolvency law must Bel forth the
law under which it was procured, and
show that it discharged the debt sued
upon. Baker v. Palmer, 1 Am [nsolv.
Rep eas granted

under the United States Bankrupl
\<[ to corporations. AnsoniaB. &C.
• u Lamp < Ihimney Co., 53
N. \ 12 ;. I 0 - ure the benefil of a
harge in bankruptcy it should be
promptly interposed as a defense to
a pending against t he bank-
rupl Dimock v. Rei ere I topper Co.,
ll?i 3. 559. 8 s C. Rep. 855, and

a cited; Bradford v. Rice, 102
Mass. 472; Hollister v. Abbott, 31
N. II. 442. As to attacking a dis-
charge, see Poillon v. Lawrence, i?
X. V. 207, ami casos cited. As to
claims barred ami not barred, see
Eennequin v. Clews, 111 I". S. 676, I
s. t '. Rep. 576; Strang v. Bradner,
ill I '. s. 555, 5 s. ( '. Rep. 10as ; Noble
v. Hammond, 129 V. S. 69, 9 S. C.
Rep. 235; Ann-, v. Moir, 138 U S. 311,
11 S. c Rep. 311. It may be here
noted that, in New Fork, an impris-
oned debtor is not entitled to a dis-
charge upon making a voluntary
gnment under the statute it' it is
shown that he made a disposition of
his property with intent to defraud
creditors. Matter of Brady, 69 N. Y.
215, 1 Am [nsolv. Rep. 102.
•m End. 7.-..

§ 296, 297 GIFT OF LAND. 5 [9

collection of the debtor's indebtedness to him, the answer
of the debtor to the effect that, at the time of the com-
mencement of the suit, no part of his indebtedness to the
creditor was due and unpaid, will constitute a complete
defense in bar of such suit. This statement is, it seems
to us, misleading. As is elsewhere shown, subsequent
creditors may attack conveyances made with the inten-
tion to avoid future liabilities l or schemes of fraud, or
to place the risks of new ventures and speculations upon
the creditor's shoulders.2

§ 296. Sufficient property left— Gift of land. — The general
rule applicable to conveyances of both real 3 and per.
sonal property,4 as announced by the Supreme Court of
Indiana, is, that a sale cannot be impeached as fraudulent
unless it is shown that the debtor had no other property
subject to execution at the time the conveyance was
made.5 This is also a rule of pleading.6

Where a father in solvent circumstances made an oral
gift of land to his son, who entered into possession and
made lasting improvements on the property, the latter
was considered to have a good title as against creditors
of the father.7 " Taking possession under a parol agree-
ment with the consent of the vendor, accompanied with
other acts which cannot be recalled so as to place the
party taking possession in the same situation that he pre-
viously occupied, has always been held to take such
agreement out of the operation of the statute" of fraud.

§ 297. What sheriff must show against stranger. — As a
general rule process regular on its face, and issued by a

1 See Chap. VI, g$ 96-101. 6 See § 140.

2 See §100. 1 Dozier v. Matson, 94 Mo.

3 Hardy v. Mitchell, 67 Ind. 485; S. W. Rep. 268.

Nohlev. Hines, 72 Ind. 12 ; Spaulding B Sedg. & Wait on Trial of Title to

v. Blythe, 73 Ind. 93. Land (2ded.), §321a; Lowrj v. Tew,

«Rose v. Colter, 76 Ind. 592. 3 Barb. 1 !h. (N. Y. I 407; Freeman v

5 See Emerson v. Opp, 139 Ind. 27. Freeman, 13 N. Y. 34.
38 N. E. Rep. 330.

520 SET-OFF — CONSIDERATION. §§ 297a, 297b

tribunal or officer having authority to issue it, is sufficient
to protect the officer, although it may have been irregu-
larly issued. But when an officer attempts to overthrow
a sale by a debtor on the ground that it was fraudulent as
to creditors, he must go back of his process and show the
authority for issuing it. If he acts under an execution, he
must show a judgment; and if he seizes under an attach-
ment, he must show the attachment regularly issued.1

§ 297a. Set-off. - — The cases relating to set-off are full of
technical statements. The field is a broad one. We may
observe that where an assignee seeks to enforce a bond
and mortgage which was part of the assigned estate, the
defendant mortgagor is entitled to set-off in equity a debt
due to him from the assignor, though the mortgage may
not have been due when the assignment was made."

§ 297b. Attacking consideration and good faith. — The sub-
ject of consideration is elsewhere discussed.3 A mortgagor
may, in defending foreclosure, show want of considera-
tion, and, when this is shown, the mortaaofee cannot
rebut the defense by proving that the notes and mortgage

1 Keys v. Grannis, 3 Nev. 550; 41 ; Savage v. Smith, 2 W. Bl. 1104;

Thornburgh v. Sand 7 Cal. 561. See Bac. Abr. Trespass, G. 1." See, also,

81. In Damon v. Bryant, 2 Pick. Hargetv. Blackshear, 1 Taylor (N.

(Mass.) 413, Chief -Justice Parker said: C. ) »107 ; High v. Wilson, 2 Johns.

" Where the goods taken are claimed (N. Y.) 46; Doed. Bland v. Smith,

l>\ a person who was not a party to the 2 Stark. 199; Weyand v. Tipton, 5

suit, and be brings trespass, and his Serg. & R. (Pa.) 332; Casanova v.

title is contested on the ground of Aregno, 3 La. 211; Trowbridge v.

fraud, under the statute 13 Eliz. c. 5, Bullard, 81 Mich. 451, 45 N. W. Rep.

a judgmenl musl be shown if the 1012; Bartlett v. Cheesebrough, 32

officer justifies under an execution, or Neb. 339, 49 N. W. Rep. 360.

a debt it under a writ of attachment, '-' Richards v. La Tourette, 119 N.

because it is only by showing that he Y. 54, 23 N. E. Rep. 531. See Roths-

acted f<>! a creditor, that he can ques- child v. Mack, 115 N. Y. 1, 21 N. E.

tion thetitleof the sendee, The au- Rep. 726; Smith v. Felton, 43 N. Y.

tborities to this poinl arc Lake v. Bil- 419.

lers, 1 Ld. Raym. 783 ; Bull. N. P. 'SeeChap.XV.
91, 2-> I . A ck worth v. Kenipe, Doug.

§ 29/c

\\ HEN f'.< >\ I R< >VERSIES N( > I SEP \k.\i:l I .

521

were also given to defeat creditors.1 A trust deed made
with the design of preventing the enforcement of a judg-
ment for alimony, will not be enforced in a court of
equity,2 and the facts may be brought out as a defense.

§ 297c. When controversies not separable. — In a suit by
an assignee for the benefit of creditors, to disencumber a
fund of alleged liens claimed by different creditors, the
fact that each defendant had a separate defense will not
create a separable controversy as to each.3

1 Clark v. Clark. 62 N. H. 271 ;
Wearse v. Pierce, 24 Pick. (Mass.) 141.

2 Scott v. Magloughlin, 138 [1136,
24 N. E. Rep. 1030.

3 Rosenthal v. Coates, 148 U. S.
143, 13 S. C. Rep. 576. See Fidelity 1 11s.

T. &S. D. Co. v. Huntington. 117 I'. S.
280, 6 S. C. Rep. 733 : Young v. Par-
ker, 132 U. S. 207. Hi S C. Rep. 75 ;
Graves v. Corbin, 132 U. S. 586, 10
S. C. Rep. 196; Brinkerhoff v, Brown,
6 Johns. Oh. (N. V.) 139.

CHAPTER XX.

HUSBAND AND WIFE — FRAUDULENT MARRIAGE
SETTLEMENTS.

§298.
299.
299a
300.

301.
302.

303.
304.
305.

305a
306.

Tbe marriage relationship.

Wife as husband's creditor.

. Claim for support.

Transactions between, how re-
garded.

Burden of proof.

Mutuality of fraudulent design
in cases of ante-nuptial settle-
ments.

Husband as agent for wife.

Wife's separate property.

Mingling property of husband
and wife.
Book entries of transactions.

Marriage settlements — Amount
of settlement.

§ 307. Post nuptial settlement.

308. Purchase by wife after mar-

riage.

309. Valid gifts — Subsequent insol-

vency.

310. Articles of separation.

311. Statute of frauds.

312. Policies of insurance.

313. Competency of wife as witness.
314 Fraudulent conveyances in con-
templation of marriage.

315. Fraudulent transfers as affect-
ing dower.
315a. Judgment against wife.

§ 298. The marriage relationship. — It would be impracti-
cable to devote separate chapters to the consideration of
the different frauds upon creditors incident to each of the
various relationships recognized by law; but, as the fair-
ness and good faith of transactions and conveyances
between husband and wife are so frequently challenged
and assailed by creditors, the rules and decisions govern-
ing this branch of our subject must be discussed. As
will appear, husband and wife have been made by legisla-
tion independent legal personages.1 A debtor, when
threatened with insolvency, naturally reposes confidence
in his wife ; the relationship inspires this confidence,
and it very often results that she becomes wrongfully

I-" Page, Ml U. 8. 118, 88 N. Y. 304 ; Manchester v. Tibbetts,
4 s. C Rep. 888; Whiton v. Snyder, 121 N. Y. 219, 24 N. E. Rep. 304.

§ 299

WIFE AS HUSBAND S CRED1 n >R.

5-3

possessed of " the creditor's trust fund," so called. The
statutes conferring upon married women the power to
hold and convey property much the same as though they
were single, have unfortunately encouraged husbands to
confide to the keeping of their wives property which
should have been turned over to creditors or held subject
to their process. Frauds committed by the husband and
wife upon one another, or in contemplation of, or after
entering into the relationship, will call for incidental dis-
cussion as we proceed.

§ 299. Wife as husband's creditor.— A wife can become a
creditor of her husband,1 and he may pay an honest debt
to her,2 though as to other creditors the claim may appear
stale and ancient. The debtor is not compelled by law
to resort to the statute of limitations as a defense,3 nor
can others interfere or insist upon it for him, nor is the
wife estopped to receive payment of a debt of this char-

1 Garr v. Klein, 93 Iowa 313 ; Man-
chester v. Tibbetts, 121 N. Y. 219. 21
N. E. Rep. 304 ; Robinson v. Stevens,
93 Ga. 538. 21 S. E. Rep. 96 ; Romans
v. Maddux, 77 Iowa 203, 41 N.W. Rep.
763 ; Ardis v. Theus, 47 La. Ann. 1438,
17 80. Rep. 865 ; Stramann v. Schee-
ren, 7 Col. Ct. App. 1, 42 Pac. Rep.
191 ; First Nat. Bk. v. Kavanagh, 7 Col.
Ct. App. 160, 43 Pac. Rep. 217; Wil-
liams v. Harris, 4 S. Dak. 22, 54 N.
W. Rep. 926.

8 Patton v. Conn, 114 Pa. St. 183, 6
Atl. Rep. 468: Hewitt v. Williams, 47
La. Ann. 712 ; Fulp v. Beaver, 136
Ind. 319, 36 N. E. Rep. 250 ; Robinson
v. Stevens, 93 Ga. 535, 21 S. E. hep.
96 ; Lassiter v. Hoes, 11 Misc. (N. Y.)
1, 31 N. Y. Supp. 850 ; Hugbes v. Bell,
62 111. App. 74 ; National Bank of Re-
public v. Dickinson, 107 Ala. 265, 18
So. Rep. 144; Tarsney v. Turner, 48
Fed. Rep. 818. Where money was
loaned in good faith by the wife to

the husband, it is no objection to the
validity of the deed of the land given
in repayment of such loan t li.it it was
given after a creditor bad recover.. I
judgment. Qaar v. Klein, 93 Iowa
313, 01 X. W. Rep. wis: cf., Carson v.
Stevens, 40 Neb. 112, 58 N W. Rep.
845. In Woodbridge v. Tilton, 84
Me. 95. 24 Atl. Rep. 583, the court
says: "A husband who is justly in-
debted to Ins wife may appropriate
his property to the payment of her
claim, io the exclusion of his other
creditors. Ferguson v. Spear, 65 Me
277." See DeBerry v. Wheeler, 128
Mo. 84, 30 S. W. hep 388; Winfield
Nat. Hank v. Croco, 4'i Kan. 629, 26
Pae. Rep. 942. See Schreyi r v. Scott,
134 U. S. 405, H» s. c. Rep

Manchester v. Tibbetts, 121 N V
219, 24 X. E. lop. -ot ; Burnham \
McMichael, 6 Tex. Civ. App. 196, 26

S. \\ . h'e] 1. 887.

524

WIFE VS II (JSBAND S CREDIT! >R.

.: 299

acter.1 She has the same standing as any other creditor.-
The rule as it prevailed at common law was, that a hus-
band could not contract with his wife. Her money not
held to her separate use, coming into his possession, was
regarded as his property ;3 and his promise to repay such
money to her could not be enforced either at law or in
equity.4 This rule, as we have said, has now been almost
universally abrogated.5 In many respects a wife may,
under the existing policy of the law, deal with her hus-
band, as regards her separate estate, upon the same terms
as though the relationship had no existence. " When the
wife, by proper and sufficient proof, shows that her hus-
band owes her, she is entitled to the same remedies and
has the same standing to enforce any security for the
payment of the debt that she may have received as any
other creditor."6 Thus, in a case in Massachusetts, in
which the opinion was rendered by Chief-Justice dray,
now one of the justices of the Supreme Court of

1 Brookville Nat. Bank v. Kimble,
7C ln.l. 195.

• Manchester v. Tibbetts, 121 N. Y.
219, 24 .V I-:. Rep. 304.

8 Joiner v. Franklin, 12 B. J. Lea
(Tenn.) 422, Whiton v. Snyder, 88 N.
Y 302; rates v. Law, si; Va. 117, 9
S. E. Rep. Vis : Granl v. Sutton, 90
Va. 771, I'.i S. K. Rep. 784.

' Atlantic Nat. Bank v. Tavener,
130 Mass 109; Vlexander v. Crit-
tenden, 4 Allen (Mass.) 342; Turner
< Nye, 7 Allen (Mass.) 176 ; Phillips
v. Frye, it Allen (Mass.) 36; Degnanv.
Farr, 12(5 Mass. 397, 299 : Kesner v.
Trigg, 98 U. S. 54 ; Jaffrey v. Mc-
Gough, 88 Ala. 202, 3 80. Rep. 594.
In West Virginia (Miller v. Cox, 38
W Va. 717, 18 8. K. Rep. 960 : Kana-
wha Valley Hank v. Atkinson, 82 W.
Va 203, 9 s. 1:. Rep. 175) it is held
that the presumption <>r law, where
money is delivered l>\ a wife t<>a hus-

band, is that it is a gilt, which pre
sumption can only be overcome bj
cdear evidence of a contrary under-
standing. But see Hood v. Jones, "i
Del. Ch. 77. Compare Iseminger v.
CrisweU (Iowa, 1896) (17 X. W. Rep.
289.

'Towers v. Eagner, 3 Whart,
(Pa.) 48; Johnston v. Johnston,
1 Grant (Pa.) 468; Kutz's Appeal.
10 Pa. St. 90; Grabill v. Mover,
45 Pa St. 530 ; Atlantic Nat. Bank
v. Tavener, 130 Mass. 409; Bab-
cock v. Eckler. 24 N. Y. 623
Whiton v. Snyder, 88 N. Y. 299:
Savage v. O'Neil, 44 N. Y. 298 ; Stead-
man v. Wilbur, 7 R. I. 181 ; //; re
Blandin, 1 Lowell 543; Horton v.
Dewey, 53 Wis. 410, 10 N. W. Rep
599.

• Manchester v. Tibbetts, 121 N. Y.
222, 24 N. E. Rep. 304.

§ 2(J9 V\ III'. AS HUSBAND'S l REDITOR.

the United States, it was decided that where a
wife loaned to her husband upon a promise of repay-
ment money constituting a part of her separate estate,
a conveyance of land made by him to her, through a
third person, in repayment of such loan, and free from
a fraudulent design, would be valid against his creditors.1
A husband may, of course, give his wife a mortgage to
secure a valid debt.2 The wife may loan monev to her
husband and he has the right to prefer her,3 and the wife
when not questioned is not bound to proclaim the fact
that she is a creditor.4 While a husband has a risrht to
pay his wife a bona fide debt, yet a deed by the husband
to the wife cannot be supported as being founded upon a
valuable consideration which rests upon his mere volun-
tary promise that he would at some time give her a sum
of money ; 5 nor will it be upheld where the consideration
is grossly inadequate.6

Manifestly a wife's relinquishment of her dower right
is a sufficient consideration for a reasonable settlement
upon her out of the husband's property.7 But joining in
a release of property incumbered to almost its full value,
is not sufficient consideration to support a conveyance of
other realty by the husband to the wife ;8 and where the
value of the property greatly exceeds the value of the
dower right, the deed will be set aside as to such excess '•'

1 Atlantic Nat. Bank v. Tavener, 3 Laird v. Davidson, 1'24 Ind. 111.

130 Mass. 407 ; followed and approved 25 X. E. Rep. 7; Strauss v. Parshall,

by the United States Supreme Court 93 Mich. 475. 51 X. W. Rep. 1117.

in Medsker v. Bonebrake, 108 U. S. 'Robinson v. Stevens, 93 Ga

66, 2 S. C. Rep. 351. See Tomlinson 21 S. E. Rep. «-#»;.

v. Matthews, 9S 111. 178; Jewett v. ■'•Wynne v. Mason, 72 Miss. 183 L8

Noteware, 30 Huh (N. Y.) 194; So. Rep. 422.

French v. Motley, 63 Me. 326 ; Gra- 'Case Manufacturing Co. v. Per-

bill v. Mover, 45 Pa. St. 530; Stead- kins (Mich, 1895), 64 N. W. Rep. 301.

man v. Wilbur, 7 R. I. 481: Lang- Eershy v. Latham. 46 \rk. 542.

ford v. Thurlby, 60 Iowa 105, 14 N. 'Commonwealth [ns.&TrustCo v

W. Rep. 135. Brown. 166 Pa. St. 477, 31 Ml Rep 205

'Spaulding v. Keyes, 125N. Y.113, 'Glascock v. Brandon, 35 W. Va.

26 N. E. Rep. 15. 84,112 S. E. Rep. 1 102.

526 CLAIM FOR SUPPORT. §§ 299a, 300

§ 299a. Claim for support. — As has already appeared,
a wife may bring suit to annul a conveyance made to
defeat her claim for alimony,1 but it seems to be doubted
in a recent Connecticut case2 whether the debt or duty
to support the wife, which is a continuing one, is a debt
or duty within the protection of the statute, or the rules
of the common law against fraudulent conveyances. The
court says: "We are not aware of any case anywhere,
which holds that a duty of this kind is within the protec-
tion of any statute, or of the rules of the common law,
against fraudulent conveyances The duty protected by
such rules or statutes is generally some particular spe-
cific duty to pay money or money's-worth, and not a
general continuing duty, like this of support, to pursue a
certain course of conduct." Naturally the rule that a
conveyance made to defeat a contingent claim will be
overturned, should be applied to the case of a failure to
discharge the duty of support.

§ 300. Transactions between— How regarded. — Transac-
tions between husband and wife, to the prejudice of the
husband's creditors, are, however, to be scanned closely,3
and their bona fides must be clearly established,4 as fraud

'See ? 90. Chase v. Chase, 105 Rep. 580; Skellie v. James, 81 (ia.

Mass. 385 ; Livermore v. Boutelle. 11 11'.), s S. E. Rep. GOT; Brownell v.

Gray l M.-bs. > 217; Stoddard, 42 Neb. 184, 60 N. W. Rep.

"Ullrich v. Ullrich, 63 Conn. 585. 380; Wynne v. Mason, 72 Miss. 433,

Eershy \ Latham, 40 Ark. 550; L8 So. Rep. 422 ; Billington v. Sweet-

Graves v. Davenport, 50 Fed. Rep. ing, 172 Pa. St. 161, 33 Atl. Rep. 548 ;

881 ; White v. Benjamin, 150 X. V. Reese v. Reese, 157 Pa. St. 200, 27

.1 N i: Rep. 956; Duttera v. Ml. Rep. 70:5 : Town of Norwalk v.

Babylon, -:; Md. 544, 35 AH. Rep. 64; [reland, 68Conn. 1 4, 35 Atl. Rep. 804.

Robinson v. Clark, 76 Me. 494 ; Frank *Booher v. Worrill, 57 Ga. 235.

v.King, 121 111 254, L2 N. E. Rep. See Thompson v. Feagin, 60 Ga. 82 ;

Williams v. Barris,4S Dak. 22, Hinkle v. Wilson, :>■', Md. 292; Seitz

■"■I N W. Rep. 926; Binchman v. v. Mitchell, 94 D". S. 584 ; Lee v. Cole,

Parlin & O. Co., 71 Fed. Rep. 698 ; 44 N. J. Eq. 828, 15 Atl. Rep. 531;

Kennedy v. Lee, 72 Ga. 10; Gross v. Webb v. [ngham, 29 W. Va. 389, 1 8.

Eddii 3 8. W. Rep. E Rep. 816 ; Curtis \. Wortsman, 2fi

L ; Reese v. Shell, 95 Ga. 750, 22 S. E. Fed. Rep. 893; Bayne v. state, 02

§ 300 TRANSACTIONS BETWEEN. 5.;;

is so easily practiced and concealed under cover of the
marriage relation.1 Lord Mardwicke said: "1 have
always a great compassion for wife and children, yet. on
the other side, it is possible, if creditors should not have
their debts, their wives and children may be reduced to
want." The court observed in Hoxie v. Price:2 "On
account of the great facilities which the marriage relation
affords for the commission of fraud, these transactions
between husband and wife should be closely examined and
scrutinized.3 to see that they are fair and honest,4 and
not mere contrivances resorted to for the purpose of
placing the husband's property beyond the reach of his
creditors." In all such cases the parties are under temp-
tation to do themselves more than justice.5 What is
secured to the one is apt to be shared by the other. Ordi-
narily the claim of a creditor against a debtor is
antagonistic, but in this class of cases they are sure to be
in harmony, the debtor supporting the claims of the cred-

Md. 103 : Grant v. Sutton. 90 Va. 771, be regarded with watchful suspicion,

19 S. E. Rep. 784; Kemp v. Folsom, and, when attempted to be asserted

14 Wasli. 16, 43 Pac. Rep. 1100. See against creditors upon the evidence

§308. of the parties alone, uncorroborated

'White v. Benjamin. 150 N. Y. 265, by other proof , should be rejected at

44 N. E. Rep. 956 ; Williams v. Har- once, unless their statements are so

ris, 4 S. Dak. 22. 54 N. W. Rep. 926 ; full and convincing as to make the

Town of Norwalk, v. Ireland, 68 fairness and justice of the claim

Conn. 14, 35 Atl. Rep. 804. manifest." Diggs v. McCullough. Hi)

8 31 Wis. 86. See Fisher v. Shelver, Md. 592, 16 Atl. Rep. 45:! : Manning v.

53 Wis. 501, 10 N. W. Rep. 681. Carruthers, 83 Md. 6, 34 Atl. Rep. 254

3Resse v. Shell, 95 Ga. 749. 22 S. E. Seitz v Mitchell, 94 U. S. 583 ; Town of

Rep. 580; Lambrecht v. Patten, 15 Norwalk v. Ireland, 68 Conn. 11. 35

Mont. 260, 38 Pac. Rep. 1063. Atl. Rep. 804. See s. v.. I v.

4 Gable v. Columbus Cigar Co., 140 Cole, 44 N. J. Eq. 338 \ con-
Ind. 563, 38 N. E. Rep. 474 : Knappv. veyanee by a husband to a wife may
Day, 4 Col. App. 23, 34 Pac. Rep be treated as voluntary, where the
1008. alleged debt had not been n

5 In Post v. Stiger, 29 N. J. Eq. 556, nized for many years, and no account
the court says : " A claim by a wife kept or interest required. Dillman v.
against a husband, first put in writ- Nadelhoffer, 162 [11.625,45 N. E. Rep.
ing when his liabilities begin to 680; Frank v. King, 121 III. 250, 12
jeopardize his future, should always N. B. Hep. 720.

BUROICN OF PROOF

§ 301

itor. ' When a creditor challenges such a contract for
fraud, slight evidence will change the onus and cast on the
conjugal pair the duty of manifesting the genuineness and
good faith of the transaction by such evidence as will
satisfy or ought to satisfy an honest jury.2 " Dealings
between husband and wife which result in the appropria-
tion of the husband's property for the payment of a debt
claimed to be due to the wife, to the exclusion of other
creditors, it must be. admitted, furnish uncommon oppor-
tunities for the perpetration of fraud, and should be
carefully and rigidly scrutinized." 3 There is, however,
no absolute legal presumption that a conveyance of land
made by a debtor to his wife is fraudulent as against a
creditor of the husband whose judgment was recovered
after the conveyance.4 A wife may be held as trustee
ex maleficio for the benefit of her husband's creditors.5

§ 301. Burden of proof. — It is said by Mr. Justice Taylor,
in the case of Horton v. Dewey, ^ that, " in a contest
between the creditors of a husband and the wife, if the
wife claims ownership of the property by a purchase, the
burden of proof is upon her to prove, by clear and satis-
factory evidence, such purchase, and that the purchase

Knapp v. Day. 4 Col. App. 24, 34
Pac. Rep. 1008.

h has been said, however, that
"such dealings (though to be care-
fully scrutinized on account of the
temptation i<> give an unfair advant-
age to the wife over other creditors)
i ■ 1 ■ ■ — t be tested by tin- same principles
a- a conveyance by a debtor to a
stranger, when brought into question
as fraudulenl againsi creditors."
Kaufman v. Whitney, "i1* Mis-,, ins.
Citing Mangum v. Pinucane, 38 Miss.
Vertner v. Humphreys, 22 Miss.
130 ; Roach \ . Bennett, 21 Miss. 98;
Wilej \ Gray, 36 Miss. 510 ; Butter
field v. Stanton, M Miss. L5, Tins

does not seem to us to harmonize with
the best authority relating to the
subject.

• Manchester v. Tibbetts, 121 N. V.
222. 24 X. E. Rep. :J04 : Town of Nor-
walk v. [reland, 68 Conn. 14.

Hussey v. Castle. 41 Cal. 239;
Grant v. Ward. 64 Mr. 239. But see
$308.

5 James Goold I '<>. v. Maheady, 38
I inn X. Y 1 296.

' 53 Wis. 413, 10 N. W. Rep. 599;
Hoffman \. Nolte, 127 Mo. 120. 29
S. W. Rep. 1006; Peeler v. Peeler,
109 N. C. 681, 11 S. E. Rep. 59;
Helms v. Green, 105 X. 1 '. 257, 11 S.
1; Rep. 170.

*30i

BURDEN OF PROOF.

was for a valuable consideration, paid by her out of her
separate estate, or by some other person for her." And
it is further observed, in the course of the opinion, that :
" In all such cases the burden of proof showing the bona
fides of the purchase is upon her, and she must show by
clear and satisfactory evidence that the purchase was
made in good faith, with her separate estate, or for a con-
sideration moving from some person other than her hus-
band. In all such cases the presumptions are in favor of
the creditors, and not in favor of the title of the wife."8
The mere recital of a valuable consideration in the instru-
ment or bill of sale has been considered insufficient to
support a verdict in favor of the wife.3 Such a recital is
regarded as evidence only between the parties and their
privies.4

It must be remembered that the presumption of posses-
sion of the wife's property by the husband, and that he
is therefore prima facie the owner, has been impaired by

1 Citing Stanton v. Kirsch, 6 Wis.
338 ; Horneffer v. Duress. 13 Wis. 603 ;
Weymouth v. Chicago & N. W. Ry.
Co., 17 Wis. 550 ; Duress v Horneffer,
15 Wis. 195 ; Beard v. Dedoph, 29
Wis 136 : Stimson v. White, 20 Wis.
56:}; Elliott v. Bently. 17 Wis. 591 ;
Putnam v. Bicknell, 18 Wis. 333;
Hannan v. Oxley, 23 Wis. 519 ; Fen-
elon v. Hogoboom, 31 Wis. 172 ;
Hoxie v. Price, 31 Wis. 82 ; Car-
penter v. Tatro, 36 Wis. 297 ; Gettel-
mann v. Gitz, 78 Wis. 439, 47 N. W.
Rep. 660. In that case the ruling was
put on the ground that the circum-
stances raised a strong presumption
that the property belonged to the
husband , which could be overcome
only by clear proof on the wife's part.
See also Glass v. Zutavern, 43 Neb.
334, 61 N. W. Rep. 579.

s See Gable v. The Columbus Cigar
Co., 140 Ind. 563-569, 38 N. E. Rep.

34

474; Stevens v. Carson, 30 Neb. 550,
4<J N. W. Rep. 655; Thompson v.
Loenig, 13 Neb. 386, 11 N. W Rep
168; Seasongood v. Ware. H>4 Ala.
212, 16 So. Rep. 51 : Kelley v. Con-
nell, 110 Ala. 543. 18So. Rep. 9 ; Glass
v. Zutavern. 43 Neb. 334. 61 N. W.
Rep. 579; Hoffman v. Nolte, 1*37 Mo.
120, 29 S. W. Rep. 1006 ; Grant v. Sut-
ton, 90 Va. 772, 19 S. K Rep 784 :
Wood v. Harrison. 41 W. V
23 S. E. Rep. 560 ; Clarliu v Ambrose,
37 Fla. 78,' 19 So. Rep 628; Butch-
inson v. Boltz, 35 \V. Va. 754, 1 1 S E.
Rep. 267; Peeler v. Peeler, 1"'.' V C.
628, 14 s. E. Re]

3 See Sillyman v. King. 36 Iowa 207.
But compare, contra, stall v. Fulton,
30 N. J. Law 430 ; Horton v. Dewey,
53 Wis. 410. ION. W. Rep 599
* Sillyman v. King, 86 [ow
Long v. Dollarhide 24 Cal. 218 ; Kim-
ball v.Fenner, 12N.H 248. See§ 220.

530 FRAUDULENT DESIGN. § 302

modern innovations in the law. Since under the present
rule the wife may generally take by gift from her hus-
band ' as well as from others, and, by purchase, from any
one, her separate and personal possession of specific
articles must draw after it the presumption of ownership,
and there is no longer any controlling reason for making
her case exceptional, or excluding her from the operation
of the general rule.'-' Of course the wife will not be pro-
tected when she co-operates with her husband in any
scheme to keep his creditors at bay.3

£ 302. Mutuality of fraudulent design in cases of ante-nup-
tial settlements. — To render an ante-nuptial settlement
fraudulent and voidable as to creditors, it is, as we have
seen, necessary that both parties should concur in or have
cognizance of the intended fraud.4 If the settler alone
intended a fraud, and the prospective wife had no notice
of it, she cannot be affected by it.5 Marriage, as already
shown, is a consideration of the highest value, which, from
motives of the soundest policy, is upheld with a steady
resolution.''

FYaud may be imputed to the parties either by direct
co-operation in the original design at the time of its
concoction, or by constructive co-operation in carrying
the design into execution after notice of it.' The

' Armitage v. Mace. 96 N. Y. 538. Nat. Bk. v. Hamilton. 59 N. Y. St.

Whiton v. Snyder, s* N". Y. 304 ; Rep. 331, 27 X. Y. Supp. 1029.

Gilben v. Glenny, 75 Iowa 513, 39 Prewil v. Wilson, 103 U.S. 22 ;

N. W. Rep. 818; Chadbourn v. Wil- Berring v. Wickham, 29 Gratt. (Va.)

liams, 45 .Minn. 294, 47 X. W. Rep. 628. Magniac v. Thompson, T Pet.

812; Ettlinger v. Eahn, L34 Mo. 198, 392.

\v Rep. 37 ; Coyne v. Sayre, 54 ' Prewil v. Wilson, 103 U. S. 22;

N .1 Eq 702, 36 \tl. Rep. 96 ; Rhodes See Nance v, Nance, 84 Ala. 375, 4 So.

v. Wood.93Tenn. 702,288. W. Rep. Rep.699; ('ohm v Knox, 90 Cal. 266,

294 27 Pac. Rep. 215. See Chap. XV.

Sloan v. Huntington, 8 *.pp. Div. §§210,212.

(X. Y | 98. 10 V Y. Supp. 393. Magniac \. Thompson, 7 Pet. 398j

• See Chap. XIV, .7 199, 200. Firsl per Story, J.

§303 HUSRAND As \(.i:\i FOR WIFE. 5 3 1

question of intent must, as in other cases, he submitted
to the jury l

§ 303. Husband as agent for wife. -- It is settled beyond
controversy that a husband may manage the separate
property of his wife without necessarily subjecting it, or
the profits arising from his management, to the claims of
his creditors.2 The wife being vested with the right to
hold and acquire property free from the control of her
husband, the legitimate inference seems to result that she
can employ whomsover she desires as an agent to man-
age it.3 To deny her the right to select her husband for
that purpose would constitute a very inequitable limita-
tion upon her right of ownership, compelling her to resort
to strangers for advice and assistance, and would perhaps
seriously mar the harmony of the marriage relation. In
Tresch v. Wirtz,4 the vice-chancellor said : " A man's
creditors cannot compel him to work for them. A debtor
is not the slave of his creditors. The marital relation
does not disqualify a husband from becoming the agent of
his wife. All the property of a married woman is now
her separate estate * she holds it as a feme sole, and has a
right to embark it in business. She may lawfully engage
in any kind of trade or barter. If she engages in busi-
ness, and actually furnishes the capital, so that the busi-
ness is in fact and truth hers, she has a right to ask the

1 Monteith v. Bax, 4 Neb. 166; Y. 568. 25 X. E. Rep. 986 ; Ladd v.

Primrose v. Browning, 59 Ga. 70. See Newell. 34 Minn. 107, 24 N M Rep.

tJ254. 366; Osborne v. Wilkes, 108 X. C.

- Voorhees v. Bonesteel. 16 Wall. 672, 13 S. E. Rep 285; Eirklej \

16; Aldridge v. Muirhead. 101 U. S. Laeey, 7 Houst.(Del.)213, 30 Atl. Rep.

399, per Chief-Justice Waite ; Tresch 994.

v. Wirtz, 34 N. J. Eq. 129 ; Hyde v. s Hyde v. Frey 28 Fed. Re|

Frey, 28 Fed. Rep. 819 ; Second Nat Woodworth v. Sweet, 51 X. V 11;

Bk. v. Merrill, 81 Wis. 151, 50 N. W. Garner v. Second Nat. Bk., 151 I 8

Rep. 505; Garner v. Second Nat. 420, 14 S. C. Rep. 390

Bk.. 151 U. S. 420, 14 S. C. Rep. 390 ; '34 N. J. Eq. 129 ; A.bbej v. Deyo,

Third Nat. Bk. v. Guenther, 123 N. 44N. Y. 347. Compare j .".

532 wife's separate property. ^304

aid of her husband, and he may give her his labor and
skill without rendering her property liable to seizure for
his debts." l In Merchant v. Bunnell,2 Davies, Ch. J.,
said : " This court has frequently held that there is noth-
ing in the marriage relation which forbids the wife to
employ her husband as her agent in the management of
her estate and property, and that such employment does
not subject her property or the profits arising from such
business, to the claims of the creditors of her husband. "J
But a husband cannot use his wife's name as a mere
device to cover up and keep from his creditors the assets
and profits of a business which is in fact his own. It
must clearly appear that his wife is the bona fide owner of
the capital invested, and that the accumulations which
result from the conduct of the business are the legitimate
outcome of the investment of her property.4 In Boggess
v. Richards Adm.,5 it was held that in equity the wife's
separate estate is chargeable with the debts of her hus-
band when it is acquired by his skill and experience, even
if the capital is furnished by her. We fail to perceive
how this rule can be supported, for* a debtor may give
away his services if he desires.0

^304. Wife's separate property. — It follows from the
cases cited that a creditor cannot subject to the payment
of his claim lands belonging to the debtor's wife, the pur-
chase-money of which constituted a part of her separate
estate ; " and where the wife was the owner of a farm

('itin_r V -hees v. Bonesteel, 16 4 Lachman v. Martin, 139 111.450.

Wall. 81. See 28 N. E. Rep. 795.

3 Keyes N Y. 1 539, 541. 539 W. Va. 5G7. 20 S. E. Rep. r>99-

•CSting Sherman v. Elder. 24 N. Abbej v. Deyo, 44 N. Y. 347:

Y 381 : Knapp v. Smith, 27 N. Y. Mayers v. Kaiser, 85 Wis. 382,55 N.

Buckley v Wells, 33N. Y. 518; W. Rep. 688. See § 50a ; Osborne v.

v. Dauchy, 34 X. Y. 293. See Wilkes, 108 X. C. 054, 13 S. E. Rep.

Milwaukee Barvester <'n. v. Culver, 285.

89 Bun (N. Y , 601, 35 X Y. Sup,,. 'Davis v. Fredericks, 104 U. S. 61$

289: Abbey v. Deyo, II X. Y. 345. Compare Rutherford v. Chapman, 59

Ga.!177.

§305 MINGLING PROPERTY. 533

upon which she resided, and which the husband carried
on in her name, without any agreement as to compensa-
tion, it was held that neither the products of the farm, nor
property taken in exchange therefor, could be attached
by creditors of the husband.1 A husband must account
to his wife for her moneys received by him.8 And where
a debtor conveyed to his father-in-law, in consideration of
a debt due the latter, and the father-in-law conveyed by
way of gift to the debtor's wife, the conveyance was upheld
as against creditors of the debtor.3

^ 305. Mingling property of husband and wife — If a wife
permits her husband to take title to her lands, and to hold
himself out to the world as the owner of them, and to
contract debts upon the credit of such ownership, she can-
not afterward, by taking title to herself, withdraw them
from the reach of his creditors, and thus defeat their claims.'
At least the courts of New Jersey so hold. And where
a husband and wife acquire property by their joint indus-
try and management, the title being taken and held in the
husband's name, a conveyance of the property to the wife,
without consideration, to the prejudice of existing cred-
itors of the husband, will not, it seems, be supported.6

'Gage v. Dauchy, 34 N. Y. 293. of the law, put in motion by his cred-

See Buckley v. Wells, 33 N. Y. 518; itors, the very property Bhe had per-

Garrifcy v. Haynes, 53 Barb. (N. Y.) mitted him, year after year, \>>

599; Bancroft v. Curtis, 108 Mass. 47. represent to be liis and the apparent

2 Pitkin v. Mott, 56 Mo. App. 401. ownership <>f which had given him

:: Smith v. Riggs, 56 Iowa 488, 8 N. his business credit and standing."

W. Rep. 479, 9 Id. 385. Besson v. Eveland. 26 X -I. Eq. 17!

4 City Nat. Bank v. Hamilton, 34 See Sexton v. Wheaton, 8 Wheat 829;

N. J. Eq. 162. " Having constantly Riley v. Vaughan, 116 Mo. 169, 22 8

consented he should hold himself out W. Rep. 707 ; Frederick v. Shorey, 4

to the world as the owner of this Wash. 75, 29 Pac. Rep. 766 Stuart

property, and contract debts on the v. McClelland. 31 Neb. 646
credit of it, up to the very hour of 5 Langf ord v. Thurlby, 60 towa

his disaster, it would be against the 107, 14 N. W. Rep. 185; Riley v.

plainest principles of justice, and Vaughan, 116 Mo. 169, 32 S. W. Rep

utterly subversive of everything like 707 ; Frederick v Shorey, I Wash. 75,

fair dealing, to permit her to step in 29 Pac. Hep. 766.
now and withdraw from the process

534 MINGLING PROPERTY. §305

It is said by the Supreme Court of the United States :
"If the money which a married woman might have had
secured to her own use is allowed to go into the business
of her husband, and be mixed with his property, and is
applied to the purchase of real estate for his advantage,
or for the purpose of giving him credit in his business,
and is thus used for a series of years, there being no spe-
cific agreement when the same is purchased that such real
estate shall be the property of the wife, the same becomes
the property of the husband for the purpose of paying
his debts. He cannot retain it until bankruptcy occurs
and then convey it to his wife. Such conveyance is in
fraud of the just claims of the creditors of the husband."1
But the fact that the title was so placed in the husband for
the purpose and the intent on the part of the wife that he
should thereby acquire a fictitious credit, and that such
credit was extended, must be specially alleged and proved.2
If the creditor, when he extended the credit, had knowl-
edge or notice sufficient to put a prudent man upon inquiry
as to the real state of the title, the wife is not estopped to
claim the property as her own.3 Humes v. Scruggs is
discussed and analyzed by Choate, J., in Van Kleeck v.

Bumes v. Scruggs, 94 U. S. 27. 468; Moore v. Page, 111 U. S. 119,4

Citing Fox v. Moyer, 44 N. Y. 125, S. G. Rep. 388 ; Beecher v. Wilson, 84

l:;i : Savage v. Murphy, :J4 X. Y. Va. 813, 6 S. E. Rep. 209; Diggs v.

508; Babcock v. Eckler, 24 X. V. MeCullough, 69 Md. 592; Porter v.

<;■.':;: Robinson v. Stewart, 10 X. V. Goble, 88 Iowa 565, 55 N. W. Rep.

L90; Carpenter v. Roe, 10 X. V. 227; 530; Hopkins v. Joyce, 78 Wis. 443,

Hinde'a Lessee v. Longworth, 11 47 N. W. Rep. 722.

Wheat. 199; City Nat. Bk. v. Hamilton, Brisco v. Harris, 112 N. C. 671, 16

34 N.J Eq. 158; Kennedy v. ] ,72 S. E. Rep. 850 ; De Votie v. McGerr, 15

Ga W; Rilej \. 7aughan, 116 Mo. Col. 467. 24 Pac. Rep. 923 ; Hews v.

178, 22S. W. Rep. 707 ; Flynn v. .lack- Kenney. 4:5 Neb. si:,, <;j x. \y. Rep.

son, 93 Va.341,25S. E. Rep 1, which 204; Marston v. Dresen, 85 Wis. 530,

do ii"i all seem to be entirelj 55 N. W. Rep. 896 : Girault v. A. P.

in point lor so broad a proposition. Iloialin^ Co., 7 Wash. 90, 34 Pac. Rep.

See Wake v. Griffin, '.) Neb. 47, 2 N. 171.

W. Rep. 461 . <).|, 41 v. Flood, 8 Ben. Chadbourn v. Williams, 45 Minn.

»n v Eveland, 26 X. .1. Eq. 294, 47 N. W. Rep. 812.

§305

MINGLING PROPERTY

535

Miller,1 and it was very properly considered that the lan-
guage was not to be deemed as asserting the doctrine
that the wife, whose moneys were so received by the hus-
band, ceased to be his creditor for the money so retained,
or forfeited by the use which she had allowed the hus-
band to make of the money any of her rights as creditor
in case of bankruptcy." If the money is received by the
husband as his wife's, and to be accounted for or secured
by him to her, he waiving his marital rights thereto, she
has an equitable right to the fund sufficient to sustain a
mortgage subsequently given to secure it, and the mere

•19 N. B. R. 496 ; Garner v. Second
Nat. Bk. 151 U. S. 420 , 14 S. C. Rep.
390. This language is employed by
Hopkins, J., In re Jones, 6 Biss. 68,
73, in deciding a motion to expunge a
proof of debt in bankruptcy filed by
a wife against a husband: "She al-
lowed him [the husband] to collect,
deposit and use the money when col-
lected as his own, and to enjoy the
credit and reputation that the recep-
tion and use of the money necessarily
gave him ; and after parties have
dealt with him, supposing and be-
lieving he was the owner of such
money, she cannot be heard to assert
her right to it, and thus defraud honest
creditors who have trusted him, rely-
ing upon the truth of appearances of
ownership which she permitted him
to present." See Briggs v. Mitchell,
60 Barb. (N. Y.) 317, where Potter,
P. J., said: " A quiet acquiescence that
her husband should use her estate as
his own, mingling it indiscriminately
with his own, in business, for a period
of from twelve to nineteen years,
without the recognition of its sepa-
rate existence by even a written re-
ceipt, memorandum, or separate
investment, and without ever having
during that period accounted for in-

terestor principal or even having

talked about it until the bona
fide creditors were aboul to call
for it, is a kind of trust or settle-
ment that cannot be recognized by
any rule of law or equity to stand
against the rights of antecedent cred-
itors." The arguments advanced in
the cases last quoted tend strongly
toward the repression of fraudulent
transfers of assets by husband to wife
Since the emancipation of married
women from the bondage of the com-
mon law as regards their right to hold
property, they have become tbe con
venient alienees of dishonest hus-
bands who are seeking to elude the
just claims of creditors. Nothing is
more natural than that courts should
rigidly examine, and, in proper ca8es,
overt urn transfers of this character.

The chief ground usually assigned,
that the husband gains a false credit

bythe apparent ownership and use of
the wife's money and property, might,
it seems t" us, be urged against any
creditor who sold personal property
to the debtor upon credit, reserving
title, or any bailor who had entrusted
the debtor with the temporary cua
tody of chattels.
2 See Grabill v. Mover, 05 Pa. St. 580,

3 0

6 BOOK ENTRIES. §§ 305a, 306

lapse of time would not invalidate the security.1 " When-
ever a husband acquires possession of the separate prop-
erty of his wife, whether with or without her consent, he
must be deemed to hold it in trust for her benefit, in the
absence of any direct evidence that she intended to make
a gift of it to him."2 Some of the cases, however, dis-
tinguish between principal and income, and incline to
regard the use of the latter by the husband as implying a
gift of it from her.3 Where husband and wife both own
a lot which they convey away for another which is con-
veyed directly to the wife, the creditors of the husband
can sell the land to satisfy their claims, but the wife is
entitled to the return of the amount which she con-
tributed toward the purchase.4

I 305a. Book entries of transactions. — Where a husband
acts as the wife's agent his entries in his books of account
may be given in evidence against her.5

£ 306. Marriage settlements — Amount of settlement. —
Marriage settlements are always watched with consider-
able jealousy owing to the relations of the parties and the
chances of fraud on creditors.6 If the amount of prop-
erty settled is extravagant, or grossly out of proportion to
the station and circumstances of the husband, this has
been regarded as of itself sufficient notice of fraud.7 In
an able opinion, in the case of Davison v. Graves,8 Jus-
tice Nott says : " There is no case that I have seen where

1 Syracuse Chilled Plow Co. v. « Burton v. Gibson, 32 W. Va. 406,

Wing, 85 N. Y. 426; Woodworth v. 9 S. E. Rep. 255.

Sweet, 51 N. Y. 9. See Reel v. Eiv- B White v. Benjamin, 150 N. Y.

ingston, 34 Fla. 377, 16 80. Rep. 284. 264, 44 N. E. Rep. 956.

'lamer v. Second Nat. Bk., 151 « Benne v. Schnecko, 100 Mo. 250,

U. S. 433, 14 S. C. Rep. 390 ; Stickney 13 S. W. Rep. 82.

v. Stickney, 131 U. S. 227, 9 S. C. Rep. 1 Ex parte McBurnie, 1 De G., M.

677. & G. 441 ; Croft v. Arthur, 3 Dessaus.

Bauer's Estate, 140 Pa. St. 420, (S. C.) 223.

21 A 1 1 Rep. 445; McGlinsey's App., * Riley's Eq. (S. C.) 236 ; Colombine

! 1 s. &. B (Pa I 64 ; In r< Flamank v. Penhall, 1 Sm. & G. 228 ; Bulmer

I, R., 40 ( !b. Div. 461. v. Hunter, L. R. 8 Eq. Cas. 46.

§ 306 MARRIAGE SETTLEMEN1

a man has been permitted to make an intended wife a
mere stock to graft his property upon, in order to place
it above the reach of his creditors. A marriage settle-
ment must be construed like every other instrument.
The question may always be raised, whether it was made
with good faith, or intended as an instrument of fraud." '
The usual test is that the settlement must be reasonable
considering the grantor's circumstances.2 If it complies
with this requirement it will be upheld. When a person
possesses a large estate, and, owing debts inconsiderable
in amount, makes a voluntary settlement of a part of
his property upon a wife and child, retaining enough of his
property himself to pay his existing debts many times
over, it would not be a fair or reasonable inference that
such a transaction was intended to hinder or defraud per-
sons to whom he happened to owe trifling debts.5 A
settlement upon a wife of all a man's property exempt
from execution, cannot, of course, be upheld, unless the
marriage was not only the sole consideration for it. but
the agreement was entered into by the wife in ignorance
of her husband's indebtedness, and without knowledge of
circumstances sufficient to put her upon inquiry.4 In
Colombine v. Penhall,5 a celebrated English case, the
court said : " Where there is evidence of an intent to
defeat and delay creditors, and to make the celebration of
a marriage a part of a scheme to protect property against
the rights of creditors, the consideration of marriage can-
not support such a settlement." 6

See Phipps v. Sedgwick. 95 D - - hnider,

Sommermeyer v. Schwartz. ^ Y. 637
Wis. 71, 61 N. W. Rep. 311 ; Bohn v. rdon v. Worthier, 48 Iowa

Weeks, 50 111. App. 236. -i:J.l

rawford v. Logan. 97 II!. Bfl ' 1 Sin. & < •■ -

DeFargesv Ryland. 87 Va. 405, 12 S. 3 Bulmer v. Bunter, 1. R, -

E. Rep. 805 : Nichols v. Wallace, 41 Eq. Cas. 46.

111. App. 627.

538 POST-NUPTIAL SETTLEMENTS. §§ 307, 308

§ 307. Post-nuptial settlements. — The court decided, in
French v. Holmes,1 that a voluntary gift by a husband to
his wife, if he was indebted at the time, was prima facie
fraudulent as to creditors2 Davis, J., states the rule to
be that a voluntary post-nuptial settlement will be upheld
" if it be reasonable, not disproportionate to the hus-
band's means, taking into view his debts and situation,
and clear of any intent, actual or constructive, to defraud
creditors."3 Mr. Justice Field observes: "A husband
may settle a portion of his property upon his wife, if he
does not thereby impair the claims of existing creditors,
and the settlement is not intended as a cover to future
schemes for fraud." * Post-nuptial settlements are pre-
sumed to be voluntary.5 A settlement consummated
after marriage, in pursuance of an agreement entered
into before marriage, will be upheld against creditors,6
and a voluntary conveyance for the benefit of a wife and
children will not be overturned at the suit of a mortgage
creditor who, by reason of his own laches, has lost ample
security.7 An agreement by a wife to remove to and reside
in a particular county does not as against creditors con-
stitute a valuable consideration for a transfer to her, by the
husband. s

§ 308. Purchase after marriage. - Purchases of either
real or personal property made by the wife of an insolvent
debtor during coverture are justly regarded with sus-

67 Me. L89. See De Farges v. ' Mo ore v. Page, ill U. S. 118,4

Ryland, *7 Va. 404, 12 S E. Rep. 805. S. C. Rep. 388. See Jones v. Clifton,

Otis v. Spencer, L02I11. 622; Man- 101 U. S. 225.

ning v. Riley, 52 N. J. Eq. 39, 27 Ail. r> Robbins v. Armstrong, 84 Va. 810,

Rep. 810; Massey v. fancey, 90 Va. 6 S. E. Rep, 130.

L9 3 E. Rep L84; Adams v. » Kinnard v. Daniel, 13 B. Mon.

rton, 18 Ark U9,3S W. Rep. 628. I Ky.)499.

Kehr v. Smith, 20 Wall. 85 ; Cook 'Stephenson v. Donahue, 40 Ohio

■. Holbrook, 1 16 Mass. 66, M X. E. St. 184.

Rep 948 See Wi-u.n v. Jarvis, 9 B Radley v. Riker, 80 Hun (N. V.)

I ed. Rep. ^7 i Bonn v. Weeks, 50 111. 354, 30 N. Y. Supp. 130.

A|'|>

§ 3o8

PURCHASE VFTER MAKHI M.l .

picion, unless it clearly appears that the consideration
was paid out of her separate estate.1 The community of
interest between husband and wife requires that purchases
of this character which are so often made a cover for a
debtor's assets, and so frequently resorted to for the pur-
pose of withdrawing his property from the reach of his
creditors and preserving it for his own use, should be
closely scrutinized, and in a contest between the creditors
of the husband and those of the wife, there is, and should
be, a presumption against her which she must overcome
by affirmative proof. This was the rule of the common
law, and it continues, though statutes have modified the
doctrine which gave the husband title to the wife's
personalty.3

1 Seitz v. Mitchell, 94 U. S. 582 ;
Hinkle v. Wilson, 53 Md. 287 ; Simms
v. Morse, 4 Hughes 579 ; Knowlton v.
Mish, 8 Sawyer 627 ; Garrett v. Wag-
ner, 125 Mo. 461, 28 S. W. Re}.. 762.
In Hoey v. Pierron, 67 Wis. 262, 269,
30 N. W. Rep. 692, the court said :
" As to whether the debtor made and
executed that mortgage to his wife
with the intent to hinder, delay, or
defraud his creditors, the court
charged the jury that the burden of
proof was upon the defendant to show
by clear and satisfactory evidence
that it was made by him with such
intent. This is assigned as error.
Undoubtedly the burden of proving
that the mortgage to the wife was
given to secure an actual indebted-
ness to her from her husband for
moneys or property advanced by her
from her separate estate, or by some
other person for her use, was upon
the wife ; but when that was proved
and, in effect, admitted, it shifted
such burden to the defendant. Sem-
mens v. Walters, 55 Wis. 683, 684, 13
N. W. Rep. 889 ; Evans v. Rugee, 57
Wis. 624, 16 N. W. Rep. 49. Assum-

ing that the defendant mad'- a case
within the provisions of i 2319, R S.,
which, in such case, declares that
' the burden shall be upon the plain-
tiff to show that such mortgage was
given in good faith, and to secure an
actual indebtedness and the amounl
thereof,' yel it has often been held, in
effect, by this court that the estab-
lishment of such 'actual indebtedness
and the amount thereof," satisfies the
requirements of the section and shifts
the burden of proof to such defend-
ant." See § 300.

-' Seitz v. Mitchell, 94 0. -
583; Gamber v. Gamber 18 P
366; Keenev v. Good, 21 Pa si 349;
Walker v. Reamy, 36 Pa. St. 410 ; Par-
vin v.Capewell, 45 Pa Si 89 ; Robin
son v. Wallace, 39 Pa, St 129 ; \u
,-and v. Schaffer, 43 Pa St 363;
Bradford's Appeal, 29 Pa. St. 518 .
(Mann v. Younglove, 27 Barb. I N. Y
isii; Edwards v. Entwisle, 2 Mackej
,1). C.) 43 ; Ryder v. Bulse, 24 N J
372 ; Duncan v. Roselle, 15 lov
Cramer v. Reford, 17 N J Eq 36*3 ;
Elliott v. Bently, n Wis. 591. See
Edson v. Harden. ^> Wis.

540 VALID GIFTS — ARTICLES OF SEPARATION. §§309, 310

§ 309. Valid gifts. — Subsequent insolvency. — It is said in
a recent case in Texas, that a gift from the husband to
the wife is not necessarily fraudulent and void as to exist-
ing creditors. It might be a badge of fraud, a circum-
stance to be considered in determining whether the intent
was fraudulent, if it were shown that he was then heavily
in debt. But it does not follow that, because a man may
be indebted to an inconsiderable or even a considerable
amount at the time, he cannot settle a part of his prop-
erty upon his wife or children, provided, as we have seen,
he retains an ample amount of property to liquidate his
just debts.1 Nor will the settlement be affected because
it may turn out afterward, from accident or ill-fortune,
that his property has perished or been swept away.8 The
general rule then is that a conveyance by a husband,
solvent at the time, to his wife and children will be
supported,3 if he retains ample means to pay his debts,4
and the gift or conveyance is a reasonable one.5 If, on
the other hand, the conveyance is made with the actual
intent of defrauding persons who may subsequently
become creditors, it is void as to them.6

§310. Articles of separation. — Where a husband and
wife executed articles of separation by which the husband
bound himself to pay, in trust for his wife, a certain
amount of capital, and interest on it till paid, it becomes
a voluntary settlement if the parties become reconciled

1 Van Bibber v. Matins, 52 Tex. 5 When a partner uses firm funds

407 ; Morrison v. Clark, 55 Tex. 444. to purchase property to settle upon

See Emerson v. Bemis, 69 111. 537; his wife, creditors of the copartner-

Eindee's Lessee v. Longworth, 11 ship may pursue the property in

Wheat. 199. equity. Edwards v. Entwisle, 2

'Ibid.; Cooper, Chancellor, in Per- Mackey (D. C.) 43; Emerson v.

kins v. Perkins, 1 Trim Ch. 543. Bemis, 69 111. 537 ; Mattingly v. Nye,

Brown v. Spivey, 53 Ga. 155. 8 Wall. 370; Kesner v. Trigg, 98 U.

1 < lhambers v. Sallie, 29 Ark. 407 ; S. 54.

Kenl v. Riley, L. R. 14 Eq. Cas. 6 Wynne v. Mason, 72 Miss. 424, 18

190. S<>. Rep. 422. See §§ 93. 242.

§§3IT«312 STATUTE 01 FRAUDS. -|i

and again cohabit, even though there be an agreement
that the settlement shall stand.1 A settlement has been
avoided upon this theory, where it appeared that the
amount of the husband's estate was $16,132, while the
settlement was $7,000, leaving $9,132 to meet the debts
confessedly due, amounting to $9,306.

§311. Statute of frauds. — In New York every agreement
or undertaking made upon consideration of marriage,
unless reduced to writing, and subscribed by the parties,
is void,2 and a settlement made subsequently, in pur-
suance of such void agreement, is to be considered as
voluntary as against creditors.3

I 312. Insurance policies.— As we have shown in New
York, policies of life insurance may be placed upon a hus-
band's life for the benefit of his wife, free from the claims
of creditors,4 the annual premiums being limited. But
where assignments of policies, taken out by a debtor who
was insolvent, are made in trust for the benefit of his
wife, such transfers may be annulled in favor of cred-
itors.5 The court, however, says in the case last cited that
they " do not mean to extend it to policies effected with-
out fraud directly and on their face for the benefit of the
wife, and payable to her; such policies are not fraudulent
as to creditors."6 In cases where a debtor at his own

1 Kehr v. Smith. 20 Wall. 31. Co., 24 Fed. Rep. 770 ; Charter < >ali

3 Dygert v. Remerschnider, 32 N. Life Ins. Co. v. Brant, 47 Mo. 419. In

Y. 629. Michigan it was held that a policy

3 Reade v. Livingston, 3 Johns. Ch. originally taken out to the insured's
(N. Y.) 481 ; Borst v. Corey, 16 Barb, executors or administrators, and Bub-
(N. Y.) 136, and cases cited. The sequently assigned t<. the vrife, «>
same rule exists in Massachusetts, not protected by the statute. Ionia
Deshon v. Wood, 148 Mass. 132. 19 County Saw Bank v. McLean, 84
N. E. Rep. 1. Mich. 625, 48 N. W. Rep. L59

4 See § 23. Stokes v. Amerman, 5 Appeal of Elliott's Exrs., 50 Pa
121 N. Y. 337, 24 N. E. Rep. 819 ; St. 75.

Central Bank of Washington v. Hume, 6 See Thompson v. Cundiflf, I I Bush

128 U. S. 195, 9 S. C. Rep. 41 ; JEtna (Ky.)567. Compare Nippes' Appeal,

Nat. Bank v. United States Life Ins. 75 Pa. St. 478; Gould v. Emerson, 99

542 COMPETENCY OF WIFE AS WITNESS. §,§313, 3 14

expense effects insurance on his life as security to a cred-
itor, the representative of the debtor gets title to the sur-
plus after the debt is paid. And if the debtor in his life-
time pays the debt, he is entitled to have the policy
delivered up to him.1 As already shown, a man may
devote a portion of his earnings to insurance for the ben-
efit of his family.2

>? 313. Competency of wife as witness. — On a creditor's
bill to set aside a conveyance of land by a husband to his
wife, she is regarded in Illinois as a competent witness to
prove the consideration of the conveyance and its good
faith.3 It seems, however, to be doubted whether a wife
can be compelled to testify against her husband when he
is a co-defendant with her, if the husband objects to her
examination.4 While the act of Congress5 cut up by the
roots all objections in Federal courts to the competency
of a witness on account of interest, it is considered that
the statute has no application to a wife, as her testimony
is excluded solely upon considerations of public policy
and not of interest.15

> 314. Fraudulent conveyances in contemplation of mar-
riage.— Alienations of real property by a man about to be
married, made without the knowledge of his intended

Muss. 154 ; Durian v. Central Verein, 3 Payne v. Miller, 103 111. 443. The

7 Daly (N. Y.) 171 ; Leonard v. Clin- testimony of a husband in favor of his

ton, 26 Bun <N. V.) 290; Estate of wife, on a bill to subject land in her

Henry Trough, 8 Phila. (Pa.) 214. name to the payment of his debts,

1 Re Newland, T N. B. R. ITT. Sre when not impeached, must be re-
Lea '■ llmtoii. 5 De G., M. & <;. 823; garded the same as thai of any other
Drysdale v. Piggott, 22 Beav. 238; witness having a personal interest or
Courtenay v. Wright, 2 ('•\t\. 337; feeling as to the matters about which
Morland v. Isaac, 20 Beav. 389. A.s to he testifies. Eads v. Thompson, 109
who should sin- to reach the proceeds 111. 87

'.f a policy where the debtor has ma < It • ' < 'lark v. Krause, 2 Mackey (D. C.)

a genera] as ignment, see Lowery v. 572.

Clinton, 32 Hun (N. Y.) 207. 'U.S. Rev. St. § 858.

'Central Bank of Washington v. " See Lucas v. Brooks, is Wall. 453.
Hum.'. 128 U. s. 195, 9 s. ( !. Rep. li.

§314 CONTEMPLATION O* MARRIAGE. 543

bride, and with the intent and object of depriving her of
the rights which she would otherwise acquire in his prop
erty by the marriage, may, as we have already seen,1 be
avoided by the wife as fraudulent.2 In Smith v. Smith,3
the chancellor said: "I am of opinion that a voluntary
conveyance by a man, on the eve of marriage, unknown
to the intended wife, and made for the purpose of defeat-
ing the interest which she would acquire in his estate by
the marriage, is fraudulent as against her." The doctrine
is not limited to covinous conveyances of realty, but
where personal property is disposed of by a colorable
transfer, the husband retaining a secret interest, and the
ultimate object being to deprive the wife of her share of
it, the conveyance may be avoided.' The rule is also
applied and enforced where the conveyance is made by
the husband during coverture with a like intent and pur-
pose.5 Thus in Gilson v. Hutchinson6 it appeared that
a mortgagor procured a sale of the mortgaged estate
under a power contained in the mortgage, with a view to
evade liabilities to his wife, from whom he had been sep-
arated, and to deprive her of her right of dower. The
court held that she could maintain a bill in equity for the

1 See § 70. 3 6 N. J. Eq. 522.

2 DeArrnond v. DeArrnond, 10 Ind. 4 See Littleton v. Littleton, 1 Dev. &
191; Pomeroy v. Pomeroy, 54 How. B. (N. C.) Law 327 ; Davis \. Davis, •">
Pr. (N. Y.) 228; Swaine v. Perine, 5 Mo. 183: Stone v. Stone, L8 Mo. 389 ;
Johns. Ch. (N. Y.) 482 ; Youngs v. Tucker v. Tucker, 29 Mo. 359 ; U •
Carter. 1 Abb. N. C. (N. Y.) 136, n., v. MeGee, Ired. Law (N. C.) L05 ;
affi'd 10 Hun (N. Y.) 194; Smith v. Smith v. Smith, 22 Col. 180, 16 Pac.
Smith 6N. J. Eq. 515 ; Simar v. Cana- Rep. 128 : Stewart v. Stewarl 5 I lonu.
day, 53 N. Y. 298 ; Petty v. Petty, 4 B. 316.

Mon. (Ivy.) 215; Thayer v. Thayer. 14 See Walker v Walker, 66 N. B.

Vt.,107 ; Brown v. Bronson, 35 Mich. 390. 31 Atl. Rep. 14.

415; Smith v. Smith, 12 Cal. 217 ; 6 120 -Mass. 27. See Killinger v.

Kelly v. McGrath, 70 Ala. 7."") : Man- Reidenhauer, 6 S. & R. I Pa 531 ;

ikee v. Beard, 85 Ky. 20, 2S. W. Rep. Brewer v. Connell, 11 Humph. (Tenn.)

545 ; Smith v. Smith, 22 Col. 480, 46 500 ; Jennj v. Jenny, 24 VI 324;

Pac. Rep. 128. See b- 70. Jiggitts v. Jiggitts, 40 Miss

544

CONTEMPLATION OF MARRIAGE.

§ 3H

recovery of the property, both as administratrix and in
her own right.1 The rule has been said to embrace con-
veyances made by the intended wife as well as by the
husband.2 Brickell, C. J., said: " We confess an inability
to distinguish the ante-nuptial frauds of the husband from
the ante-nuptial frauds of the wife, or to perceive any
sound reason for repudiating and avoiding the one, while
permitting the other to work out its injustice and
injury."3 But making a settlement of a moderate
amount on children of a former marriage does not con-
stitute fraud as to the wife.4 Whether a conveyance
constitutes a fraud on the wife must depend on all the
circumstances of the case5 The weight of opinion is that
mere non-communication to the wife is not in itself conclu-
sive evidence of fraud.6 In any case such conveyance
can only be set aside by her to the extent of her dower
right.7

1 In Littleton v. Littleton, 1 Dev. &
B. Law(N. C.)331. Chief - Justice Ruf-
fin observed: "But bona fide con-
veyances, that is to say, such as are
not intended to defeat the wife,
do not seem to be more than
within the words of the act.
Such are sales, to make which an
unfettered power is allowed the
husband. Such, too, appear to be
bona fide gifts, whereby the husband
actually and openly divests himself of
the property and enjoyment in his
lifetime, in favor of children or oth-
ers, thereby making, according to his
circumstances and the situation of his
family, a just and reasonable present
provision for persons having meri-
torious claims on him, and with that
view, and not with the view to defeat
nor for the sake of diminishing the
wife's dower." Compare Mcintosh v.
l/idd. 1 Humph. (Tenn.) 4.19; Miller
v. Wilson, 1.1 Ohio 108 ; Stewart v.

Stewart, 5 Conn. 317 ; Kelly v. Mc-
Grath, 70 Ala. 75.
3 Kelly v. McGrath, 70 Ala. 75.

3 See Butler v. Butler, 21 Kans.
522 ; Spencer v. Spencer, 3 Jones' Eq.
(N. C.) 404; Terry v. Hopkins, 1
Hill's Ch. (S. C.)l ; Williams v. Carle,
10 N. J. Eq. 543 ; Freeman v. Hart-
man, 45 111. 57 ; Belt v. Ferguson, 3
Grant (Pa.) 289 ; Duncan's Appeal, 43
Pa. St. 67; Fletcher v. Ashley, 6
Gratt. (Va.) 332.

4 Alkire v. Alkire, 134 Ind. 350, 32
N. E. Rep. 571 ; Murray v. Murray,
90 Ky. 1, 13 S. W. Rep. 244.

St. George v. Wake, 1 Mylne&K.
610 ; Strathmore v. Bowes, 2 Cox 28.

s England v. Downs, 2 Beav. 522 ;
( handler v. Hollingsworth, 3 Del. 'Ch.
99.

1 Dudley v. Dudley, 76 Wis. 567, 45
N. W. Rep. 602 ; Chandler v. Hollings-
worth, 3 Del. Ch. 99.

I 31

FRAU DULENT TK A NSF I . RS.

§ 315. Fraudulent transfers as affecting dower. — It seems
to be quite clearly established ' that where a deed made
by a husband and wife is set aside as a fraud upon cr
itors, the judgment will not operate to bar the wife's right
of dower. The creditors cannot claim under the con-
veyance and against it, or ask to have it annulled as to
creditors and held valid as against the wife.- The theory
of the law is that the wife cannot release her dower in
her husband's real estate, except by joining with him in a
conveyance;3 a release to a stranger to the title is
ineffectual,4 and as the husband's deed is declared void
at the creditor's instigation, the wife's release falls
with it.5

Dower is not barred by an assignment under the Bank-
rupt Act.6

§ 315a. Judgment against wife. — It has appeared7 that, in
the Federal courts, a personal money judgment cannot
be had against a wife though she be a fraudulent alienee.8

1 See '"Effect of Fraudulent Con-
veyances upon the Right of Dower."
5 Cent. L. J. 459, and cas^s cited.

1 Robinson v. Bates. 3 Mete. (Mass
40 : Summers v. Babb, 13 111. 483 ;
Dugan v. Massey, 6 Busb (Ky.) 81 :
Cox v. Wilder, 2 Dillon 47 : Wood-
worth v. Paige, 5 Ohio St. 70 ;
Richardson v. Wyman, 62 Mi
Hutchinson v. Boltz. 35 W. Va. 754,
14 S. E. Rep. 267 : Morton v. Noble, 4
Chic. L. X. 157; Maloney v. Horan,
12 Abb. Pr. (N. Y. 1 X. S 389, 49 N. Y.
Ill ; Lowry v. Smith, 9 Hun (N, Y. I
515 ; Follansbee v. Follansbee, 1 D.
C. App. 326 ; Miller v. Miller, 140
Ind. 174. 39 X. E. Rep. 547.

3 Tompkins v. Fonda. 4 Paige N
Y.) 448: Merchant-," Bank v. Thom-
son. 55 X. Y. 12.

4 Harriman v. Gray, 49 Me. 5:J7.

0 Munger v. Perkins, 62 Wis. 499,

22 X. W. Rep. 511 ; Bohannon v.
Comb>. 97 .Mo. 446. 11 S. W Rep.
232; Horton v. Kelly, 40 Minn. L93,
41 X. W. Rep. 1031 ; Hinchliffe v.
Shea, in:; X. Y. 155, B N E. Rep, 477:
Wilkinson v. Paddock. 57 Hun, 191,
11 X. Y. Supp. 442; afiPd 185 N. Y.
74-: 27 X. E. Rep. 407 A- to the
question whether t!i-' wife has a right
of dower in land paid for by her bus-
band but taken in tin- name of a third
parry, if such land is subjected to the
claims litors the authorities

differ -
6 Porter v. Lazear, L09 '" - 84,

"Phipps - k, :<"■ 1

Trust C - ck 97 U. 8

Clark v. Beecher, 154 it 8.

C. Rep. ue

JO

CHAPTER XXI.

FRAUDULENT GENERAL ASSIGNMENTS.

g 316. Voluntary assignments.
316a. Property transferred by assign-
ment.
316b. Assent of assignee.
316c. Creditor's proceedings.

317. Word " void" construed.

318. Delay and hindrance.

319. Intent affecting assignments.
319a. Rights and duties of assignee.
3196. Partnership assignments.

:!J0. Fraud must relate to instru-
ment itself.
32'. Good faith.

322. Void on its face.
323a. Power to reform.

3226. Purchaser under void assign-
ment.

323. Constructive frauds defined

by Story.

324. Assignments contravening

statutes.

335. Transfers to prevent sacrifice

of property.

336. Reservations — Exempt prop-

erty.
:>27. Kesris in- surplus.

328. Releases exacted in assign-
ments.

339. Preferring claims in which as-
signor is partner — Rights
of sur\ ivor.

330. Authorizing trustee to con-

t inue business.

331. Illustrations and authorities.

'" i Delay— Sales upon credit.
333 I

333a. Exceptional rule.

334. Exempting assignee from lia-

bility.

335. Providing for counsel fees.

336. Authority to compromise.

337. Fraud of assignee.

338. Ignorance or incompetency of

assignee as badge of fraud.

339. Transfers inuring as assign-

ments.
339a. White v. Cotzhausen and con-
flicting cases.

340. Assets exceeding liabilities.

341. Assignments to prevent prefer-

ence.

341a. Excessive preferences.

341&. Preferences of laborers.

341c. Notice to preferred creditors.

341d. Bill of particulars.

343. Threatening to make assign-
ment.

343a. Antecedent agreement.

343. Construction of assignments.

344. Explaining obnoxious pro-

visions.

345. Assignments held void.

345a. Insufficient grounds of attack.
345&. Defeated creditor entitled to

dividend.
8 16. Foreign assignments.
346a. Assignments by corporations.
346b. Contingent creditors.

§ 316. Voluntary assignments. —To discuss the general
phases of the law regulating voluntary assignments made
by debtors for the benefit of creditors would require a

316

VOLUNTARY ASSIGNMENTS.

547

volume,1 and is foreign to our purposes. Certain elemen-
tary features and principles easily traced through tin
multitude of cases illustrating this branch of our subject,
will be considered. When, as is frequently the case,
these assignments are mere contrivances, called into being
to hinder, delay or defraud creditors, and from their sur-
roundings, or upon their face, contravene the provisions
of the statute 13 Eliz. c. 5, creditors or their representa-
tives may attack and annul them. The principles of law
regulating this branch of the subject are legitimately
within the line of our discussion, and will, upon close
investigation, be found to constitute a prolific source of
legal controversy. It seems remarkable that the instru-
ment under which an insolvent surrenders up his depleted
estate to his creditors should be itself so frequently tainted
with the poison of fraud. Historically it may be stated

1 See Bur rill on Assignments, 6th
ed. Baker, Voorhis & Co., New
York. See, especially. Chapter XXV
of that work. See Bishop on Insol-
vent Debtors, 3d ed. Baker, Voorhis
& Co., 1895. See §§ 114. 115 of the
present treatise for the rules as to
complainants. Also, Spelman v.
Freedman, 130 N. Y. 427, 29 N. E.
Rep. 765 ; Reynolds v. Ellis, 103 N. Y.
115, 123, 8 N. E. Rep. 392 ; Harvey v.
McDonnell, 113 N. Y. 526, 531, 21 N.
E. Rep. 695; Matter of Cornell, 110
N. Y. 360 18 N. E. Rep. 142. As to
election to accept benefits which will
estop creditors from attacking an
assignment, see Wilson Bros. W. &
T. Co. v. Daggett, 9 Civ. Pro. (N. Y.)
408, and cases cited by McAdam, C. J. ;
Ryhiner v. Ruegger, 19 III. App. 162 ;
Groves v. Rice, 148 N. Y. 233, 42 N. E.
Rep. 664 ; Mills v. Parkhurst, 126 N.
Y. 89, 26 N. E. Rep. 1041 ; Terry v.
Munger, 121 N. Y. 161, 24 N. E. Rep.
272 ; Conrow v. Little, 115 N. Y. 387,
22 N. E. Rep. 346 ; Cavanagh v. Mor-

row, 67 How. Pr. (N. Y.) 211 . Levy
v. James, 49 Hun (N. V.) 161. 1 N. Y.
Supp. 604. Compare Robei
Winne, 144 N. Y. 70!). 39 N E. Rep.
631 ; Thompson v. Fry, 51 Hun (X.
Y.) 296, 4 N. Y. Supp. 166. In
Wright v. Zeigler, 70 Ga. 512, the
court said : " Soa creditor cannot be
permitted both to assail and claim
under an assignment ; one or the
other of these alternatives be musl
lake. His election should he made

before he commences pro- lings,

and he should not be permitted to
await tin' result of his suit in order
to make his flection. This would !»■
unfair to others claiming under the
assignment." Compare Haydock v.
Coope, 53 N. V. (is. \ creditor
may be estopped from impeaching
an assignmenl by accepting bene-
fits under it. Groves \. Rice, it^
N. Y. '.':;.;. 12 X. E Rep. )'>'''! ; Mills
v. Parkhurst. 120 X. Y. 89, 26 N E.
Rep. KHl.

548

VOl UNTARY ASSIGNMENTS.

§316

that an assignment for the benefit of creditors has been
characterized as a recent American device, though this
statement has been challenged.1 The word assignment
is sometimes used with reference to the instrument which
affects the transfer, and is sometimes applied to the trans-
fer itself considered as a legal effect or result." The
validity of the assignment is generally determined, as
we shall see, by the common law,3 and the instrument
will, as a rule, be favored where equality of distribution
of assets is attempted.4

It may be recalled, as a preliminary to exploring this
field, that to constitute a general assignment there must
be an element of trust,5 and the conveyance must be vol-
untary.6 Voluntary assignments, for the benefit of cred-

1 Dunham v. Waterman, 17 N. Y.
9-15 ; G rover v. Wakeman, 11 Wend.
(N. Y.) 187, 216.

2 Richardson v. Thurber, 104 N. Y.
610, 11 N. E. Rep. 138; Berger v.
Varrelmann, 127 N. Y. 289, 27 N. E.
Rep. 1065.

3 Schroder v. Tompkins, 58 Fed.
Rep. 672 : Johnson v. Sharp, 31 Ohio
St. 611.

4 Reed v. Mclntyre, 98 U. S. 507 ;
Mayer v. Hellman, 91 U. S. 496 ;
Boese v. Kin-, 108 U. S. 379, 2 S. C.
Rep. 765 ; Commercial Nat. Bank v.
Nebraska State Bank, 33 Neb. 292,50
X. W. Rep. L57.

5 Hine v. Bowe, 46 Hun (N. Y.) 196;
Brown v. Guthrie, 110 N. Y. 435 ;
Fecheimer v. Robertson, 53 Ark. 101,
1:; S. W. Rep. 423; May v. Tenney,
1 is r. s. 66, 13 S. C. Rep. 491 ; Box
v. Goodbar, 54 Ark. 6. 14 S. \V. Rep.
925.

•' 1 -wis v. Miller, '.';; Weekly Dig.
(N. V.i 195. hi Brown v. Guthrie,
IK) N. Y 111, 18 X E. Rep. 254.
Finch, J., said: "The view of the
case which prevailed with the Gen-

and the agreement which led to
it, taken together, amounted to a
general assignment by an insolvent
debtor, which was void because it re-
served to him a possible surplus at
the expense of unpaid creditors, and
the right to make preferences subse-
quent to the conveyance. If the
basis of the reasoning be sound, the
result reached was a proper infer-
ence ; but we are not satisfied that
the mortgage and agreement
amounted to a general assignment
by the debtor. In form it was an
absolute sale upon a chattel mortgage
given for a fixed and agreed con-
sideration ; and while, nevertheless,
such a sale, in spite of its form, may
In' proved to be an assignment in
trust (BrittoTi v. Lorenz, 45 X. Y. 51),
yet, in the present ras<\ we are un-
able to discover any such proof. The
material and essential characteristics
of a general assignment is the pres-
ence of a trust. The assignee is
merely trustee, and not absolute
owner. He buys nothing and pays
nothing, but takes the title for the
performance of trust duties. There

§3l6 VOLUNTARY ASSIGNMENTS. 549

itors, have been defined to be transfers of property to an
assignee, in trust, to apply the same in payment of debts
and return the surplus to the debtor.1 The requisite of
good faith must appear.2 A general assignment may be
made in the absence of a statute.3 The assignment
is not a creature of the statute, but the voluntary act of
the debtor, regulated by the statute as to details in its
execution.4

The assignment is the exercise of the absolute dominion
which a person possesses over his own property.5 In
Thrasher v. Bentley,6 Folger, J., said : "The act of i860
does not give the right to make an assignment in favor
of creditors, with or without preferences. The right
exists at common law, and if exercised honestly, and with
no design to hinder, delay or defraud creditors, does not
require the act of i860 to warrant it. The act of i860 is
a statute, not of creation, but of direction. It recognizes
the existence of the power in the citizen to make an
assignment of his property to trustees, for the benefit of
his creditors, and does no more than prescribe the mode
in which the power shall be used, and furnish some safe-
guards against abuse." The general scope and object of
the statute " was to secure a faithful application of the
debtor's assets, under the terms and provisions of the
assignment, and in that way to protect both debtors

was no such element in the trans- * Wright v. Lee, 2 S. Dak. 596, 51

action between these parties. The N. W. Rep. TOG.

purchaser became absolute owner, 3 Tompkins v. Hunter, 111* N. Y.

and paid or secured the full amount 121, 43 N. E. Rep. 532; Weider v.

of his mortgage.'* See Warner v. Maddox, 66 Tex. 372, 1 S \V. Rep.

Littlefield, 89 Mich. 329, 50 N. W. 168.

Rep. 721. 4 See Sanger v. Flow, 48 Fed. Rep.

1 Weber v. Mick, 131 111. 533, 23 N. 152. 156 ; Baer v. Rooks, 50 Fed Rep.

E. Rep. 646. See Ginther v. Richmond, 898,901; Thompson v. Rainwater, 49

18 Hun (N. Y.) 232. A power of attor- Fed. Rep. 406.

ney cannot be converted into an as- B Brashear v. West, 7 Pet. 614.

signment. Beans v. Bullitt, 57 Pa. St. 6 1 Abb. X. C. I N. V. 1 43.
221; Banning v. Sibley, 3 Minn. 389.

550 VOLUNTARY ASSIGNMENTS. § 3 I 6

and creditors against the waste, improvidence, negligence
and infidelity of the assignee, in the execution of the
trusts created by it." ' The property in possession of
the assignee is not in custodia legis? for the reason that
the assignee is not technically an officer of the court,3
but is a trustee, bound to account according to the terms
of the instrument itself, and his authority depends upon
the validity of the assignment, and is not technically con-
ferred by the court.4 Some cases consider him a quasi
public officer,5 in so far as the statutes regulate his
procedure.

The assignee derives his power from the assignment,
which is both the guide and measure of his duty, is the
language of some of the cases.6 It is the chart which he
must follow.7 Beyond that instrument or outside of its
terms he is, ordinarily, powerless and without authority.
The control of the court over his actions is limited in the
same way, and can only be exercised to compel his per-
formance of the stipulated and defined trust, and protect
the rights which flow from it. He distributes the pro-
ceeds of the estate placed in his care according to the dic-
tation and under the sole guidance of the assignment, and
the statutory provisions merely regulate and guard his
exercise of an authority derived from the will of the
assignor. The courts, therefore, cannot direct him to pay
a debt of the assignor, or give it preference in violation

People ^.Chalmers, I llnuiN*. Y.) ; But see Farwell v. Cohen, 138 111.

686, affd. 60 \. Y. L54. 216, 28 N. E. Rep. 35, 32 Id. 893.

- ■ Lehman v. Rosengarten, 23 ' Adler v. Erker, 1 MK'rary 257.

Fed Rep. 642; Stafo exrel. Enderlin s Levy's Accounting, 1 Abb. X.C

State Bk. v. Rose, I N. Dak.819,52 X. (N. Y.) 187; Nichols v. McEwen, 17

\v. Rep. 614 : Mattbewsv. Ott,87 Wis. \. V 22, 27.

399; B. C. sub nom. Tnre Morgan, 58 "Citizens" Hank v. Williams. 128

N.W. Rep ;?i. In [owaand Minne- N. Y. 77,28 X. E. Rep. 33; Matter of

sota, a contrarj rule prevails. Ham- Hevenor, 144 X. Y. 273, 39 X. E, Rep.

ilton Brow n Shoe I '<-. v. Mercer, 84 393.

Iowa 587, 51 X. W. Rep. 415; Second 7 Middleton v. Taber, 46 S. C. 355,

Nat. Bk. v. Schrauck, 48 .Minn. 88, 44 24 S. E. Rep. 282.
X W. Rep. 542.

§316 VOLUNTARY ASSIGNMENTS. 551

of the terms of the assignment and the rights of other
creditors under it. To hold the contrary would be to put
the court in the place of the assignor, and assert a right
to modify the terms of the assignment, after it had taken
effect, against the will of its maker, and to the injury of
those protected by it. The assignee is merely the repre-
sentative of the debtor and must be governed by the
express terms of his trust.1 The assignee is required to
recognize and pay only claims which could be ascertained
and fixed at the time when the assignment was made.~
The parties cannot change the terms of the instrument,3
or withdraw the property from the jurisdiction of the
court, or absolve the assignee from its control. Nor can
the assignor substitute a successor if the assignee resigns.
The new appointment must be made by the court.4

Under a valid assignment the assignee, having pos-
session of the goods taken in pursuance thereof, has a
valid title to them as against the claims of subsequent
attaching creditors.5 There must, of course, be a change
of possession to satisfy the statute,0 or the presumption
of fraud in the transfer will arise."

1 Finch, J., in Matter of Lewis, 81 209; Butler v. Wendell. 57 Mich. 62,
N. Y. 424. See Nicholson v. Leavitt, 23 N. W. Rep. 460 ; May v. First Nat.
6 N. Y. 519. Where, therefore, the Bank. 122 111. 556, 13 X. E. Rep. 806;
debts set out in the assignment are Smith's Appeal, 104 Pa. St. 381;
fictitious or excessive, this may be a Chafee v. Fourth Nat. Bank. 71 Me.
ground for setting aside the assign- 514 : Goflin v. Kelling, 83 Ky. 649 ; Eg-
ment, and the debts cannot be re- bert v. Baker 58 Conn. 319, 20 At I.
duced to the proper amount, and the Rep. 466 : Receiver of State Bk. v.
assignment as thus modified sus- First Nat. Bk., 34 N. J. Eq. 450;
tained. Roberts v. Victor, 130 N. Y. Thurston v. Rosenfield 42 Mo. 474.
585, 29 N. E. Rep. 1025. 8McConihe v. Derby, 62 Hun (N. Y.)

2 Matter of Hevenor, 144 N. Y. 274, 90, 16 N. Y. Supp. 474 ; Ball v. Loomis,
39 N. E. Rep. 393. 29 N. \r. 412 ; South Danvers Nat. Bk.

3 See § 322a. v. Stevens, 5 App. Div. (N. Y.) 892,
4Chapin v. Thompson, 89 N. Y. 39 N. Y. Supp. 298; Mcllhargj v.

280. Chambers, 117 N. V. 532, 23 X. E.

5 Schroder v. Tompkins, 58 Fed. Rep. 561 ; Cram v. Mitchell, 1 Sandf.

Rep. 676; Barnett v. Kinney, 147 U. Ch. (N. Y.) 251.

S. 476, 13 S. C. Rep. 403; Frank v. 'Compare Mcllhargy v. Chambers,

Bobbitt, 155 Mass. 112, 29 N. E. Rep. 117 N. Yr. 532, 23 N. E, Rep. 561

552 PROPERTY TRANSFERRED. §3'6a

In Mills v. Parkhurst,1 Gray, J., in explaining the gen-
eral characteristics of these voluntary conveyances, said:
•• The assignment is not like a gift of property upon con-
ditions, open to the acceptance or rejection of the donee.
It is a payment by the assignor of his debts upon his own
plan. The deed of assignment is in no sense a contract
between the debtor and his creditors, and it does not
depend for its validity in law upon their assent. It is a
means or mode which the statute permits to be adopted
by an insolvent debtor, for the distribution of his estate
among his creditors, and so long as he has acted without
fraud, in fact or in law, and has complied with the pre-
scriptions of the act, his conveyance to an assignee for
the purposes stated therein, will stand and be effective."

>? 316a. Property transferred by assignment. — I he discus-
sion has already embraced the authorities declaring what
assets creditors may reach by bill or other proceeding.2
As creditors are frequently forced practically to accept
as payment of their claims whatever the assignee is able
to realize from the property, it is important to know what
estate is acquired by such voluntary transfer. Every
interest to which the personal representatives of a
deceased person could succeed may pass by a properly
framed assignment.3 The assignee may acquire title to
a claim for conversion ; ' may gain a right to recover in

'126 N Y 89, 94. 26 N E. Rep. nients of government claims, see Taft

1041. v. Marsily, 120 N. V. 474, 24 N. E.

'See Chap. II Rep. 926 ; Bachman v. Lawson, 109

9ee Zabriskie v. Smith, 13 N V. U. S. 659, 3 S. C. Rep. 479 ; Leonard

385. See Bishop on Ensol. v. Nye, 125 Mass. 455 ; Heard v. Stur-

Debtors, / 1 18 : Norfolk & W. R. R. gis, 146 Mass. 545. 16 N. E. Rep. 437.
Co. v Read,87 Va. L85, L2 S. E. Rep. 4 Whittaker v. Merrill, 30 Barb. (N,

395 Property forfeited to the gov- Y.i 389; Richtmeyer v. Remsen, 38

eminent does not pass to the assignee, N. Y. 206 ; Sherman v. Elder, 24 N.

and a Bubsequenl remission <>f 1 he for- V. 381 ; McKee v. Judd. 12 N. Y. 622 ;

feiture will nol inure to the benefit of Man maun v. Jefferson, 4 Misc. (N. Y.)

the assignee. Ward v. Webster, 9 147, 23 N. Y. Supp. 085.
Daly (N Y.i 182. But, as to assign-

§3i6a

PROPERTY TRANSFERRED.

553

replevin,1 and to sue a common carrier for the loss of
goods.2 He takes judgments,3 moneys deposited in
bank,4 and lands5 which belonged to the assignor. In
Warner v. JafTray,6 the court said : " The assignment was
a mere voluntary conveyance, and can have no greater
effect, so far as passing title to the property assigned,
than any other conveyance.7 In New York State by
statute the assignee is clothed with power to assail fraudu-
lent alienations of property made by the assignor.8
Rights of action for personal torts which die with the'
person are not assignable ; !t as, for instance, damages for
an assault and battery,10 and false imprisonment ; n so the
title to trust property does not pass ; l2 nor does property
in transit;13 nor a wife's dower right;11 nor exempt
property.15

It is, of course, as we shall see, fraudulent for the
assignor to withhold assets from the assignee.16

1 Jackson v. Losee, 4 Sandf. Cli.
(N. Y.) 381.

• Merrill v. Grinnell, 30 N. Y. 594;
McKee v. Judd, 12 N. Y. 622 ; Jordan
v. Gillen, 44 N. H. 424.

3 Emigrants' Ind. Sav'gs Bank v.
Roche, 93 N. Y. 374.

4 Beckvvitli v. Union Bank, 9 N. Y.
211.

6 Matter of Marsh, 3 Cow. (N. Y.) 69.

* 96 N. Y. 254.

1 Bank of Commerce v. Payne, 86
Ky. 446, 8 S. W. Rep. 856.

H Southerd v. Benner. 72 N. Y. 424 ;
Spring v. Short, 90 N. Y. 538 ; Ball v.
Slaften, 98 N. Y. 622 ; Fort Stanwix
Bank v. Leggett, 51 N. Y. 552 ; Mat-
ter of Raymond, 27 Hun (N. Y.) 508 ;
Matter of Cornell, 110 N. Y. 360, 18
N. E. Rep. 142. The assignee cannot
divest himself or be divested of his
right to sue for assets so long as the
trust continues. Stanford v. Lock-
wood, 95 N. Y. 582.

9 People v. Tioga Common Pleas,
19 Wend. (N. Y.) 73 ; Brooks v. Han-
ford, 15 Abb. Pr. (N. Y.) 342 ; Hodg-
man v. Western R. R. Co., 7 How. Pr.
(N. Y.)492; Cent. R. R. & B. Co. v.
Brunswick & W. R. R. Co., 87 Ga.
386, 13 S. E. Rep. 520.

10 See Pulver v. Harris, 52 N. Y. 7:; .
Bishop on Insol. Debtors, ^ 143.

11 Hunt v. Conrad, 47 Minn. 557, 50
N. W. Rep. 614.

15 Kip v. Bank of New York, 1(1
Johns. (N. Y )63.

13 Lacker v. Rhoades, 51 N. Y. (ill.

14 Dimon v. Delmonico, 35 Barb.
(N. Y.) 554.

: ■ Heekman v. Messinger, 49 Pa. St.
465; Baldwin v. Peet, 22 Tex. 708;
Smith v. Mitchell. 12 .Midi. L80

16 Coursey v. Morton, 182 N. Y.
556, 30 N. E. Rep. 231. Shultz v.
Hoagland, 85 N. Y. 464.

534 ASSENT OF A.SSIGNEEE. ^3l6b

The assignment, it may be here recalled, takes effect
from the time of its delivery,1 and the instrument should
be so construed as to give effect to the intention of the
parties.2 The recording of the instrument is not a
necessary prerequisite to the vesting of the title to the
assigned property in the assignee.3

£ 316b. Assent of assignee. — To render the transfer
effectual, the assignee must accept the trust. In New
York State his assent to act as assignee must be acknowl-
edged. After some controversy it has been decided' that
the assent may be written or contained on a paper sepa-
rate from the assignment itself.1 Without the assent of
the assignee the assignment is void.5 In Scott v. Mills,"
the court says : " No form of consent is prescribed, and
no place for its appearance in the assignment is desig-
nated, and the statute is fully satisfied by an appear
ance of assent in the instrument." T

Where the assignment is made to more than one
assignee, all who accept must act.8

1 Nieoll v. Spowers, 105 N. Y. 1, l Franey v. Smith, 125 N. V. 41. 25

11 N. E. Rep. 138 ; Warner v. Jaffray, N. E. Rep. 1079.

90 N. Y. 248 ; Dutchess County 5 Rennie v. Beau, 24 Hun (N. Y.)

Mutual Ins. Co. v. Van Wagonen, 132 123 ; Crosby v. Hillyer, 24 Wend. (N.

N. Y. 398, 30 N. E. Rep. 971. " Deliv- Y.) 284 : Lawrence v. Davis, 3 McL.

ery is as essential since the statute of 177: Pierson v. Manning, 2 Mich,

assignments as before its passage. It 462.

is the final act without which all 6 45 Hun (N. Y.) 264, affi'd 115 N.
othei formalities arc ineffectual, and Y. 376, 22 N. E. Rep. 156.
the real date of the instrument is the 'The assignment "must be in
time of its delivery." Mcllhargy v. writing and acknowledged, and the
Chambers, 1 17 N. Y. 539, 23 N. E. assignee must assent thereto in writ-
Rep. 561 ; Betz v. Snyder, 48 Ohio St. ing. and when it has thus been exe-
192, 88 X. E. Rep. 234. cuted and delivered, it takes effect,

- Kmi.-nmt hid. Savings hank. v. and the title to the property passes to

Roche, '•»:; N. Y. 374. the assignee." Warner v. Jaffray, 98

Winner v. Jaffray, 96 N. Y. 248; N. Y. 252.

Ryanv. Webb, 39 Hun (N. Y.) 435 ; 8 Brennan v. Willson, 7 Daly(N.Y.|

Franej v. Smith, 125 N. Y 19, 25 N. 59; affi'd, 71 N. Y. 502.
I. Rep. 1079 Pancoast v. Spowers,
20 J. & s. (N. Y.) 528.

§§3160-318 creditor's proceedings.

D33

§ 316c. Creditor's proceedings. The creditor, feeling
aggrieved by an assignment, may proceed by action claim-
ing the right to set it aside, and also institute supple-
mentary proceedings.1 The fact that the examination of
the debtor may disclose the fraudulent character of the
assignment is not a valid reason for declining to answer
questions on the examination,3 and a refusal to testify
may be punished as a contempt:' In New York the
assignee may be directed to account before a referee.4

§ 317. Word "void" construed. — The distinction between
void and voidable acts is constantly arising. The term
" void " is often interpreted to mean nothing more than
" voidable," and this construction is especially true as
applied to voluntary assignments.5 Though the statute
in characterizing assignments constantly uses the term
" void as to creditors," it is obvious that " nothing more
is intended than inoperative or voidable;"" or, as was
observed by Chief-J jstice Shaw, " such conveyance is not
absolutely void, but voidable only by creditors."7 It is
the distino-uishinor characteristic of a void act that it is
incapable of ratification, but an assignment which is
fraudulent upon its face is capable of confirmation by
creditors,8 and is good between the parties, hence it is
not, logically speaking, void.

§318. Delay and hindrance. — Mr, Burrill says:9 "The
term delay has an obvious reference to time, and hindrance

1 Matter of Sickle, 52 Hun (N. Y.) ,; Per Redfield, Ch. J., in Merrill v.

527, 5 N. Y. Supp. 703 : Schloss v. Englesby, 28 Vt. 155.

Wallach, 38 Hun (N. Y.) 638, 102 N. 'Edwards v. Mitchell, 1 Gray

Y. 683. (Mass.) 241.

- Lathrop v. Clapp, 40 N. Y. 328. s See White v. Banks. 21 Ala. 713.

8 Lathrop v. Clapp, 40 N. Y. 328: Compare Hone v. Henriquez, 13

Tremain v. Richardson, 68 N. Y. 617. Wend. (N. Y.) 242 ; Geisse v. Beall, 8

J Produce Bank v. Morton, 67 N. Wis. 367.

Y. 199 ; Myers v. Becker, 95 N. Y. 486. 9 Burrill on Assignments, § 335.

6 See Burrill on Assignments, § 319.

556 DELAY AM) HINDRANCE. § 318

to the interposition of obstacles in the way of a creditor;
but, to a certain extent, the one involves and includes the
other. In point of fact, and as actually applied by the
courts, they are always taken together. The following
are prominent instances in which assignments have been
declared void on the ground of hindrance and delay.
Where the time of sale,1 or of collection by the assignee,2
or of finally closing the trust,3 has been, by the terms of
the assignment, unreasonably or indefinitely postponed ;
where the assignee has been expressly authorized to sell
at retail, and on credit,4 or on credit simply ; 5 where the
assignment has been made with a view to prevent a sacri-
fice of the property ; 6 where the proceeds of the assigned
property have been directed to be used in defending all
suits which might be brought by creditors to recover their
debts,7 and where creditors who should sue have been
expressly debarred from the benefit of the assignment ; 8
or postponed until all the other creditors are paid.9 All
these were instances of delaying and hindering creditors
in the prosecution of their remedies in the strict sense of
the terms used in the statute." In the famous Sprague
litigation it is said that a debtor has no right to postpone
or put in peril the claims of his creditors without their
consent, and that a conveyance which attempts so to do,
or which is executed for the purpose of depriving cred-
itors of their right to enforce their just claims against the

'Citing Hafiicr v. Irwin, 1 Ired. 6 Citing Van Nest v. Yoe, 1 Sandf.

(N. C.) Law, 4'JO. Ch. (N. Y.i 4; Vernon v. Morton, 8

•Citing Storm v. Davenport, 1 Dana (Ivv.) 217. But see Cason v.

Sandf. Ch. (N. Y.) 185. Murray, 15 Mo. 378.

'Citing Arthur v. Commercial & 'Citing Planck v. Schermerhorn,

I; I; Bk., L7Miss.394. 3 Barb. Ch. (N. Y.) 644 ; Mead v.

4 Citing Meacham \ Sternes, 9 Phillips, 1 Sandf. Ch. (N. Y.) 83.

Paige (N. Y.) 398, 406. - Citing Spence v. Bagwell, GGratt.

I iting Barney v. Griffin, . N. Y. (Va.)444; Berry v. Riley, 2 Barb. (N.

865; Nicholson v. Leavitt, 6 N. Y. Y.) 307.

510. » Citing Marsh v. Bennett, 5 Mc-

Lean 117.

§319 INTENT AFFECTING ASSIGNMENTS. 557

property of their debtor, by placing it beyond their reach
or control for an unlimited, indefinite, or uncertain period,
is in conscience, as well as in law, fraudulent.1 An
assignment or transfer with intent to delay the collec-
tion of a debt is condemned by the statute and the com-
mon law, no less than a transferor assignment into which
the element of actual fraud enters.2

§ 319. Intent affecting assignments. — " It is clear, how-
ever," says Mr. Burrill, " from the language of the Eng-
lish statute of 13 Elizabeth, that its provisions were
directed exclusively against conveyances made with an
actual intent? on the part of debtors, to hinder, delay or
defraud creditors, as distinguished from the mere effect ox
operation of such conveyances. The expressions in the
preamble — ' devised and contrived' ' to the end, purpose,
and intent to delay,' etc., leave no room for doubt on this
point. Hence, it has sometimes been very expressively
designated as the ' statute against fraudulent intents in
alienation.' "4 It will be presently shown that the learned
writer has stated the rule too broadly, for a fraudulent
intent is often imputed by the law in cases where the
assignor's motives were undoubtedly honest.5 Generally
speaking the subject of inquiry in these cases is the intent
of the assignor or debtor,6 at the time of the execution of

1 De Wolf v. Sprague Mfg. Co., 49 23 Minn 242, 1 Am. Insol. Rep. 36

Conn. 325. Peck v. Crouse, 40 Barb. (N. Y.) 157

- Buell v. Rope. G App Div. (N. Putnam \ . Hubbell, 42 N. Y. 106

Y.) 115, 39 N. Y. Supp. 475. Citing Rubl v. Phillips, 48 N. Y. 125 : Lesher

McConnell v. Sherwood, 84 N. Y. 530. v. Getman, 28 Minn. 93, 9 N. W. Rep.

3 See Moore v. Stege, 93 Ky. 27, 18 585 : Jaeger v. Kelley, 52 N. Y. 274 ;
S. W. Rep. 1019. Dudley v. Danforth, 61 N. Y. 626 ;

4 Burrill on Assignments, § 332. State ex rel. Enderlin State Bk. v.

5 See §§ 8, 9, 19, 322. Kose, 4 N. Dak. 325, 58 N. W. Rep.

6 Wilson v. Forsyth, 24 Barb. (N. 514; Rouse v. Bowers, 108 N. C. 182,
Y.) 120; Mathews v. Poultney, 33 12 S. E. Rep. 985; Main v. Lynch, 54
Barb. (N. Y.) 127; Griffin v. Mar- Md. 658; Forbes v. Waller, 25 N. Y.
quardt, 17 N. V. 28 ; Cuyler v. McCart- 439. " An assignee for the benefit of
ney, 40 N. Y. 221 ; Bennett v. Ellison, creditors stands in the place of the

558

INTENT AFFECTING ASSIGNMENTS.

§ 3 '9

the instrument,1 though there is a growing line of authority
tending to establish the rule that the fraudulent purpose
sufficient to defeat or overturn the instrument must be par-
ticipated in by the assignee, trustee 3 or beneficiaries.3 The
latter idea is certainly gaining ground. The testimony
of both the assignor and assignee upon the question of
intent is proper.4 Recognizing the general rule, else-

assignor, and is so affected with hie
intent, thai if it is unlawful the in-
strument cannot stand." Tabor v.
Van TasseU, 86 N. V. 643. See g 316.
In Ailler v. Ecker, 1 McCrary 356,
the court remarks that the only intent
which will dot ermine the validity of
an assignment is that of the assignor,
at the time it is mad'', and contem-
poraneous fraudulent acts are evi-
dence of this intent. It is then
observed of the case under consider-
ation, that it is in proof that one E.
being insolvent, and owing debts
amounting to more than double the
value of bis assets, took from his busi-
ness, within four weeks before bis
assignment, a sum equal to one-half
of the value of the property assigned,

and with it erected a building upon a
lot owned by his wife. Within a
short time then-after he joined with

1n> wife in giving a mortgageupou

this property to bis father-in-law. for

three times the amount of any debt
owing either by him or his wife, and
i In- mortgage and accompanying
notes wer,- senl to the father-in-law,
without any request on his pari, or
any information on t be subject, until
the papers were receu ed. The court
comment upon the fact that there is
no <-\ jdi nee to counteract or explain
why the mortgage was given for so
large a Bum, after one-fourth of the
debtor's entire assets had been taken
from In- business in the manner

Stated, and under circumstances cal-

culated to show an intent to put a
portion of his available means beyond
the reach of his creditors, and arrive
at the conclusion that the assignment
was fraudulent and void.

Shultz v. Hoagland, 85 N. Y. 464 ;
Hardmann v. Bowen, 39 N. Y. 200.

2 Baer v. Rooks. 50 Fed. Rep. 901 ;
Emerson v. Senter, 118 U. S. 3, 6 S.
C. Rep. 981.

3 See Thomas v. Talmadge, 16 Ohio
St. 433: Governor v. Campbell, 17
Ala. 566 ; Byrne v. Becker, 42 Mo.
264; Abercrombie v. Bradford, 16
Ala. ."WO ; State v. Keeler, I!) Mo. 548 ;
Wise v. Wimer. 23 Mo 237; Mandel
v. Peay, 20 Ark. 329: Penn's Execu-
tor v. Penn, 88 Va. 361. 13 S. E. Rep.
7* » 7 : Zell Guano Co. v. Heatherly.
38 W. Ya. 410, 18 S. E. Rep. 611 :
Porter v. James, 30 U. S. App. 260;
Pettit v. Parsons, 9 Utah 223, 33 Pac.
Rep. 1038: Peters v. Bain, 133 U. S.
670, Ut S. ('. Rep. 354. See Emerson v.
Scute,-. 118 U. S. 3, 10, 6 S. C. Rep.

'. S|, where the court says : "It the
intentional omission by the grantor
of certain property from his schedule,
and his appropriation of it to his own
Use, was such a fraud as wotdd vitiate

the deed where the assi^ne ■ the

preferred creditors have previous
notice of E.uch omission, that result
cannot happen when they were igno-
rant of the fraud at t he time they ac-
cepted the benefit of the conveyance."
1 Forbes v. Waller, 25 N. Y 48».
Sec g 205. While it is proper to allow

§3[9 INTENT AFFECTING ASSIGNMENTS. 559

where discussed, that a voluntary conveyance or gift may
be annulled at the instigation of creditors, without proof
of an absolute fraudulent intent on the part of the donee,1
it would seem to follow by analogy that the cases which
hold that proof of the fraudulent intent of the debtor or
assignor is sufficient, establish the more logical and salu-
tary rule. In a case which arose in New York it was
expressly decided that an assignment by a debtor, with
the intent to hinder or defraud creditors, may be avoided
although the assignees were free from all imputation of
participation in the fraudulent design, and were them-
selves bona fide creditors of the assignor.'-' In Loos v.
Wilkinson,3 Earl, J., said: "An innocent assignee may
not be permitted to act under a fraudulent assignment.
.... It may be true that in a particular case an honest
assignee may .... undo all the fraudulent acts of the
assignor preceding and attending the assignment and the
preparation of the schedules under it. Yet, if the assign-
ment was made by the assignor with the fraudulent intent
condemned by the statute, the assignment may be set
aside at the suit of judgment-creditors, and all powers of
the assignee, however honest he may be, taken away.
In assailing a voluntary assignment for the benefit of
creditors, it is important only to establish the fraudulent

parties to testify as to their intentions, ticipation in the fraud intended by the

yet as against third parties in aeon- assignor. The uprightness of his in-

troversy as to whether a paper is an tentions, therefore, will not uphold

assignment or a mortgage, they can- the instrument, if it would others ise,

not be allowed to testify as to what for any reason, be adjudged fraudu-

they had in mind in executing the lent and void." Griffin v. Marquardt,

paper. Appolos v. Brady, 49 Fed. 17 N. Y. 30. See Loos v Wilkinson.

Rep. 401. 110 N. Y. L95, is X. E. Rep. 99 ; Starin

■See §200. v. Kelly, 88 N. Y. 418, and compare

*Rathbun v. Plainer, 18 Barb. (N. Sipe v. Earman, 26 Gratt. (V&.) 570.
Y.) '272. "An assignee in trust for :; 110 N. Y. 209, is X. K. Rep. 99.

the benefit of creditors is not ' a pur- Sees. C. again 113 N. Y. 485, '.'1 N. E.

chaser for a valuable consideration,' Rep. 392.
however innocent lie may be of par-

560 RIGHTS OF ASSIGNEE. § 319a

intent of the assignor,1 and when that has been established
the assignment may be set aside, and creditors may then
pursue their remedies and procure satisfaction of their
judgments as if the assignment had not been made."
Mere suspicion of a fraudulent intent is not enough to
sustain an action to set aside an assignment.2

There should be evolved from the decisions a distinc-
tion between cases where the assignee is honest and where
he has been guilty of bad faith. Where the trust estate
has come into the hands of an honest assignee, the reasons
upon which it may be overturned should be restricted.
The technical grounds of assault upon this convenient
form of liquidating an insolvent estate should be circum-
scribed, and the struggles of sharp attorneys to gain
preferences for unconscionable clients by overturning
these transfers on unsubstantial grounds should be
repressed. The guiding consideration with the courts
should be the general welfare of the body of creditors
and the safety of the assets.

§ 319a. Rights of assignee — An assignee acting in per-
fect good faith under an assignment, subsequently declared
fraudulent, will be protected from personal liability,3 and
need not account a second time for moneys paid out in
good faith to creditors.4 The assignee is not necessarily
bound to take goods ordered by the assignor,5 and is
without power to proceed with the performance of the

1 Citing St.irin v. Kelly, 88 N. Y. Y. 397, 22 N. E. Rep. 1031 : Smith v.

H8. Wis... 132 N. V. 172, 30 N. E. Rep. :i*4 :

McClure v. Goodenough, 19 Civ. Wilson v. Marion. 147 X. Y. 589, 42

Pro. (N. V. 191, 12 N. Y. Supp. 459. N. E. Rep. 190.

Rouse v Bowers, 108 N. C. 182, 12 'Sullivan v. Miller, 106 N. Y. 643,

S 1:. Rep 985: Burrill on Assign- 13 X. E. Rep. 772; Wakeman v.

in. nt-, f.ii, ed., |>. 567, Baydock Car- Grover, 4 Paige (X. Y.) 28; Young v.

Co. v Pier, 7* Wis. aTii, 47 X. Brush, 28 X. V. t;71 ; Ames v. Blunt,

\V. Rep. 945; Barney v. Griffin, 4 5 Paige (N. Y.) 13.

s. m. It Ch. 1 X. Y.i 552; Hawlej \ 'Compare ''lark v. Dickinson, 74

.Ian,.-, if. Wend. iN. Y.i 182; Nat. X. Y. 17.
Butchers & It. I'.k. v. Hnl.li.4l. 117 X.

§ 319a RIGHTS 01 ASSIGNEE. 561

assignor's incomplete contracts, yet if he does so without
the sanction of the court, or the parties beneficially inter-
ested, and sues for such performance, the defendant may
counterclaim damages.1 For the purposes of completing
such a contract, the matter must be treated as a transaction
had with the assignee as an individual.2 It may be further
recalled that goods obtained by the assignor by the prac-
tice of fraud may be taken from the assignee, as the lat-
ter does not, according to the weight of authority, occupy
the position of a purchaser for value.3 But demand for
such goods should precede any action to recover them
from an innocent assignee.4

The obligations of an assignee for the benefit of cred-
itors are those which appertain to voluntary trustees, not
acting gratuitously, without compensation. They are
bound to exercise that degree of diligence which persons
of ordinary prudence are accustomed to use in their own
affairs.5 The trust fund should not be used for the indi-
vidual benefit of the assignee, or mingled with other
money,6 or expended except for the care of the property
and its conversion into cash." Where the assignee is a
party to the fraud which results in overturning an assign-
ment, he will not be allowed for expenses incurred in
defending himself8 or commissions.9 The assignee

'Patton v. Royal Baking Powder 777: Nat. Butchers and Drovers'

Co.. 114 X. Y. 1, 20 N. E. Rep. 631. Bank v. Hubbell, 117 N Y. 384, 398,

'Patton v. Royal Baking Powder 22 X. E. Rep. 10:31.

Co., 114 X. Y. 5, 20 N. E. Rep. 621. 5 Matter of Cornell, 110 X. V

See Thompson v. AYhitmarsh. 100 X. is X. E. Rep. 142. See Matter of

Y. 35, 2 X. E. Rep. -273. Buckland v. Barnes, 140 X. Y. 488, 35 X. E. Rep.

Gallup, 105 N. Y. 453. 11 X. E. Rep. 653.

843. 5Matter <>f Barnes. 140 X. V. W8,

3 See Raymond v. Richmond. 7* X. 35 X. E. Rep. 653.

Y. 351 ; Chaffee v. Fort, 2 Lans. (N. '• Matter of Dean. 86 X 7. 398.

Y.)81. -Smith v Wise, 132 X. Y. 172. 30 X.

4 Good win v. Wertheim^r. 99 X. Y. E. Rep. 229.

I X. E. Rep. 404; Converse v. »Slingluff v. Smith. 7'. Ml

Sickles, 140 X. Y. 207, 40 X. E Rep. Atl. Rep. 674

36

562

PARTNERSHIP ASSIGNMENTS.

3I9b

takes the debts or choses in action subject to the right of
set-off.1 The equitable rule as to set-off may also be
compelled against the assignee.2 Where several persons
accept the trust they must act together.3

§ 319b. Partnership assignments. —The distinction be-
tween individual and copartnership creditors must be
preserved,4 especially where the possibility of an attempt
to pay individual creditors with partnership assets is
present.5 In some cases it is declared absolutely that a
transfer of partnership property to an individual creditor
of one of the partners when the firm is insolvent is fraud-
ulent as to partnership creditors,6 but it seems the con-
verse of the proposition is not true," for an assignment
of individual assets for the benefit of firm creditors will
usually be upheld.8 Evidently the theory upon which the
cases proceed is that the appropriation of firm assets to
individual debts is a fraud upon the partner who does not
owe the debt, and also violates the equitable rule as to the
marshalling of assets. The solvency of the partnership is

1 Jordan v. Nat. Shoe and Leather
Bank. 74 X. V. 471 : Martin v. Kunz-
muller, ■!? X. V. 396; Myers v. Davis,
■2 -J X. Y.489.

*See Bughitt v. Hayes, 136 X. V.
L63, 32 X. E. Rep. 706. Compare
Fera v. Wickham, 1:;."") X. Y. 223, 31
\ I. Rep. 1028.

Thatcher v. Candee, 1 A.bb. Dec.
N ST.) 387 ; Anon. v. Gelpcke, 5 Hun
( X. Y. I 245, 255 : Brennan v. Willsdn,
•1 Abb. X. ('. (X. Y.) 279.

■ Peters v. Bain, 133 U. S. 670, 10
s. < '. Rep. 354 : Nordlinger v Ander-
son, L23 N. V. .-.II. 25 N. E. Rep.
992.

v. Hume, 72 Hun (X. Y.) I,

25 N Y. Su|)|». 576; Wilson v. Rob-

ertson, 21 N. Y. 587 ; I',. pons v. Marion,

Y. 541, '-".1 N. E. Rep. 832 ;

Lord v. Devendorf , r,4 Wis. 495, 11 N.
W. Rep. 903.

6 Erb v. West (.Miss.) 1!) So. Red
829: Hill v. Draper, 54 Ark. 395. 15
S. W. Rep. 1025; .Marks v. Bradley,
il'.i Miss. 1. 10 So. Rep. 922; Nord-
linger v. Anderson, 12:; X. Y. 5 is.
25 N. E. Rep. 992: Wilson v. Rob-
ertson, 21 N. Y. 587.

'Crook v. Rindskopf, 105 N. Y.
176, 12 X. E. Rep. Ill : Saunders v.
Reilly, 105 X. Y. 12. 12 X. E. Rep

170; Rover Wl 1 Co. v. Fielding,

101 X. Y. 504, 5 N. E. Rep. 131.

• Crook v. Rindskopf, 105 N. Y.
476, 12 N. E. hep. 174 : Erb v. Wesl
(Miss.) p.) So. Rep. 829; co/itra .lack-
son v. ( 'ornell, 1 Sandf. Ch. (N. Y.)
348. See O'Neil v. Salmon, 25 How.
I'r. (.V Y.) 246.

3i9b

PARTNERSHIP ASSIGNMENTS.

563

an issuable fact l in insolvency cases. The court will
resent schemes to defraud a firm's creditors.' On the other
hand, firm creditors cannot set aside as fraudulent a vol-
untary transfer of property of an individual partner unless
the firm assets are deficient and there are no individual
creditors.3 The respective powers of the partners in
assignment cases have been a subject of much con-
troversy. Only leading characteristics will be noticed.
An insolvent surviving partner may make an assignment
embracing both partnership 4 and his individual prop-
erty.5 In Illinois, in the absence of proof of a crisis in
the affairs of the firm, two general partners cannot make
an assignment in the absence of the assent of the third
partner.6 Ordinarily the partners must all join in an
assignment." A special partner need not unite,8 nor a
party who may possibly be liable as a partner as regards
third parties.9 A limited partnership cannot in New
York assign with preferences.10 A partner has no right
to make a general assignment because his copartner is

1 McDonald v. Cash. 45 Mo. App.
66.

5 Kelley v. Flory, 84 Iowa 671,51 N.
W. Rep. 181 ; Smith v. Smith, 87 Iowa
93, 54 X. W. Rep. 73 : Baer v. Wil-
kinson, 35 W. Va. 422, 14 S. E. Rep. 1 ;
Roe v. Hume, 72 Hun (X. Y.) 1, 25 X.
Y. Supp. 576 : Booss v. Marion, 129 X.
Y. 536 ; 29 N. E. Rep. 832 ; Dura 11 1 v.
Pierson, 124 X. Y. 444. 26 X. E. Rep.
1095 ; Xordlinger v. Anderson, 123 X.
Y. 544, 25 X. E. Rep. 992 ; Wilson v.
Robertson, 21 X. Y. 587.

3 Hull v. Deering, 80 Md. 424, 31
Atl. Rep. 416.

4 McFarland v. Bate. 45 Kan. 7, 25
Pac. Rep. 238.

5 Hanson v. Metcalf, 46 Minn. 25.
48 X. W. Rep. 441 ; Riley v Carter,
76 Md. 581, 25 Atl. Rep. 667 ; Williams
v. Whedon, 109 X. Y. 333, Hi X. E.
Rep. 365; Haynes v. Brooks, 116 X.

Yr. 487, 22 X. E. Rep. 1083 : Emerson
v. Seuter, 118 U. S. 3. 6 S. C. Rep. 981 ;
Durant v. Pierson. 124 X. Y. 452,
26 X. E. Rep. 1095 : Beste v. I
17 Abb. X. C. (X. Y.) 162, affi'd 110
X. Y. 644. 17 X. E. Rep. 734.

' Trumbull v. Union Trust I
111. App. 319.

: Kellogg v. Cayce, 84 Tex. 213.
lit S. W. Rep. 388 ; Fox v. Curtis. 176
Pa. St. 52. 34 Atl. Rep. 952; Welles v.
March, 30 X. Y. 350; Klumpp v.
Gardner, ill X". Y. 158,21 X. E. Rep.
99; Gates v. Andrews, 37 X Y. 659.

BTracy v. Tuffey, 134 U. S. 200, 10
s. C. Rep. 527.

9 See Adee v. Cornell. 93 X. Y 572,
affi'g25Hun (X. Y >

hwartz v. Soutter, 103 X. V.
683, 0 X. E. Rep. 448. s. •
Grant, 97 X. Y. 263

564

IK \WI>.

§ 320

temporarily insane.1 But where one partner absconds
those remaining- may assign for the benefit of creditors.2
And where after dissolution the firm assets have been
transferred in good faith to one of the late partners as
an individual, he may assign for the benefit of his
individual creditors.'' The omission to convey indi-
vidual property in a partnership assignment may
invalidate the instrument,1 though this conclusion has
been denied.5 The certificate of acknowledgment of an
assignment executed by one member of a firm need not
state that the partner was authorized to sign his co-
partners' names to the instrument. The assignment will
be upheld if in fact he had such authority/' Oral
assent of the non-joining partners is good.7 The assent
may be shown in a variety of ways.8

>J 320. Fraud must relate to instrument itself. — Where it
is sought to annul a fraudulent transfer, the evidence
must ascertain and establish the assignor's intent at the
time0 of the execution of the instrument.10 If the assicrn-

1 Stadelman v. Loehr, 47 Hun (N.
Y.) 327: Friedburgher v. Jaberg, 20
AM,. N. C. (N. Y.) 279.

2 Welles v. March, HO N. Y. 344 ;
National Bank of Balto. v. Sackett,
2 Daly >X. Y.) 395; Palmer v. My-
ers, 13 Hail,. iX. Y. 509; Kelly v.
Baker, 2 Hilt. (X. Y.) 531. See
Khun])]) \. Gardner. 114 N. Y. 153,
21 X. E. Rep. 9.1.

3 See Dimon v. Hazard, 32 N. Y.

65 : Stanton v. Westover, 101 X. V.
265, I X. E. Rep 529.

Kennedy v. McKee, I 12 r. S.
606, 12 s. C. Rep. 303 ; Still v. Fooke,

66 Tex. 715, 2 s. W. Rep. 59 ; Coffin
v. Douglas, 61 Tex. 106, 107.

Bradley v. Bischel, 81 [owa 80, 46
X. w. Rep. 755 ; McFarland w Bate,
45 Kan I, 25 Pac. Rep. 238.

Hooper \ Baillie, 1 18 X. 5 . U3,
H6 -•■; X. E. Rep, 569 . Klumpp v.

Garduer, 114 N. Y. 160, 21 X. E. Rep.
99 ; National Bank of Troy v. Scriven,
63 Hun (N. Y.) 375, is X. Y. Supp.
277.

'Hooper v. Baillie. 118 N. Y. ID'.,
23 X. E. Rep. 569. See Sullivan v.
Smith, 15 Neb. 476, 19 X. \Y. Rep.
620; Rumery v. McCulloch, 54 Wis.
565, 12 N. W. Rep. 65.

•Klumpp v. Gardner, 114 X. Y.
157. 21 X. E. Rep. 99.

'Cuyler v. McCartney. 40 X. Y.
221; Olney v. Tanner, 10 Fed. Rep. 115.

" Shultz v. Hoagland, 85 X. Y. 467 :
Mathews v. Poultney, 33 Barb. (N.
Y.) 127; Beck v. Parker. 65 Pa. St.
262; Bailey v. Mills, 27 Tex. 434-438;
Cornish v. Dews, 18 Ark. 172; Klapp
v Shirk. 13 Pa. St. 589; Owen v.

Aivis. ■!<; \ .1. Law22; Hill v. W 1-

berry, 1 C. C. A. 206, 49 Fed. Rep.
138.

§ 32° FRAUD. 565

merit was valid in its creation, having been honestly and
properly executed and delivered, no subsequent illegal
acts, either of omission or commission, can in any man-
ner invalidate it.1 The subsequent acts should, however,
be considered, as they "may reflect light back upon the
original intent," and help to characterize and discern it
more correctly/ It may be observed that neither
conveyances without consideration, nor other frauds com-
mitted by a failing debtor prior to a general assignment
for the benefit of his creditors, will operate to make it
void as matter of law. These are circumstances which
may be taken into consideration by a court and jury, if
nearly contemporaneous, but are not conclusive of a
fraudulent intent.3 To render the assignment invalid,
when good on its face, the fact of a fraudulent intent in
making it must be legitimately found from evidence that
will fairly support the finding, and it must also be an
intent to commit a fraud on creditors by making- the
assignment, and not by some entirely iudepe?ident act
which might and probably would have been done precisely
as it was, had no assignment been made or contemplated.4

1 Hardmaiin v. Bowen, 39 N. Y. for its recovery, and, if successful, it

200 ; English v. Friedman, 70 Miss. will be for the benefit of the creditors

457, 12 So. Rep. 252. In Estes v. precisely as if it had been included in

Gunter, 122 IT. S. 455, 7 S. C. Rep. the assignment."

1275, the court says: "The assign- - Shultz v. Hoagland, 85 N. Y. 468;

ment was subsequent to the deed and McNaney v. Hall, 80 Hun (X. V. ) 415,

carried all that could in any way be 33 N. Y. Supp. 518.

considered as a benefit secured by the 3 Livermore v. Northrup, 44 X. Y.

deed to the assignor. The creditors 111; Probsl \. Welden, 4(i Ark. ins

were not, therefore, in any way 4 Wilson v. Forsyth, 24 Barb X. Y. >

hindered or defrauded by the alleged 12S. In Aaronson v. Deutsch, 24

reservation. There is nothing in Fed. Rep. 166, the court said : "The

Gunter's payment to his wife of the rule which the defendant seeks in

), which can affect the validity of invoke, thai a deed valid in its incep-

the assignment. . . . . A fraudu- tion will not lie rendered invalid \<\

lent disposition of property does not any subsequent fraudulent or illegal

of itself impair a subsequent general act of the parties, has no application

assignment. The assignee may sue where the fraudulent or illegal art is

566 FRAUD. § 320

A fraudulent disposition of property invalidates a subse-
quent assignment only when the deed is actually part of
a scheme to defraud creditors.1 Proof of an intentional
omission from the schedules of assigned property, of
items of valuable property, is sufficient to establish a
fraudulent intent. Referring to this subject, Finch, J.,
said : " The intentional omission, calculated to deceive,
and to lull into slumber and inactivity the interest and
diligence of the creditor, would plainly argue a fraudu-
lent purpose Not so, however, if shown to have been
unintentional, and the result of accident or oversight. It
would be hard to find any schedules absolutely perfect,
or any debtor who could inventory every item of his
property with strict accuracy. Room must be allowed
for honest mistake, and possibly even for careless and
thoughtless error; but, where the omission cannot thus
be explained or excused, the inference of a fraudulent
intent must follow."2 Preferring fictitious claims will
constitute a ground for attacking an assignment on the
ground of fraud.3 The motive to prevent creditors from
gaining a preference will of course not avoid the assign-
ment.4 It may be here remarked that if an assignment
is made in the form and manner provided by law, and
duly recorded so as to pass all the property of the
assignor, it is difficult to see how the motive existing in
the assignor's mind can affect its validity. If in morals
the motive be a bad one, yet in law it produces no for-
bidden result. In so far as it hinders or delays creditors
it is a lawful hindrance and delay, and cannot be held

the consummation of an illegal agree- Sec Baird v. Mayor, etc., of N. Y., 90

men! made contemporaneously with N. Y. 593. Beardsley v. Frame, s">

tli.' deed." < Sal 134, 24 Pac. Rep. 721 .

Hill v. Woodbury, l C C. A 306, Roberta v. Vietor, 130 N. V. 586,

49 Fed. Rep. 138; Baer v. Rooks, 2 29 N. E. Rep. 1025.
C. C A.. 76, 50 Fed. Rep. 898. k See § 341. Borwitz v. Ellinger,

Shultz i Eoagland, 85 N. t . 169. 33 M<l. 504.

§§ 32I, 322 GOOD FAITH. 567

fraudulent. The commission of a lawful act is not made
unlawful by the fact that it proceeded from a malicious
motive.1

§321. Good faith. — The term "good faith,"- if inter-
preted to mean " sincerity or honesty of purpose,'1 can
scarcely be applied in that sense to voluntary assign-
ments, for these instruments are often annulled from con-
siderations of public policy in cases where nothing was
more foreign to the intention of the debtor than a dis-
honest design considered as an emotion. The usual pre-
sumption of honesty and good faith incident to acts and
transactions generally,3 appertains to a voluntary assign-
ment, and the instrument will be upheld where the lan-
guage contained in it justifies a construction which will
support it.4 A mere mistake in the making of the inven-
tory will not invalidate an assignment.5

§ 322. Void on its face. — An assignment for the benefit
of creditors may undoubtedly contain a clause so plainly
indicative of the fraudulent intent pointed out by the
statute, or recognized by the policy of the law, '' as to
carry its death-wound upon its face." An instance of this
might be a gratuitous provision out of the assigned prop-
erty for the insolvent assignor or his family.0 The New

1 Wilson v. Berg, 88 Pa. St. 172, 6 Roberts v. Buckley, 115 N. Y. 315,

1 Am. lnsolv. Rep. 109 ; Jenkins v. 39 N. E. Rep. 9GG.

Fouler, 24 Pa. St. 3')8 ; Fowler v. 6 Nightingale v. Harris, 6 R. I. 329 ;

Jenkins, 28 Pa. St. 176; Glendon Iron criticised in Gardner v. Commercial

Co. v. Uhler, 75 Pa. St. 467; Smith Nat. Bank, 13 R. 1. 155. Danforth,

v. Johnson, 76 Pa. St. 191. J., said, in McConnell v. Sherwood.

• See Wood v. Conrad, 2 S. Dak. 84 N. Y. 526: '■ Where, upon the face

334, 50 N. W. Rep. 95. of an assignment or by proof aliunde,

3 See §§5, 6, 224, 271. it appears to have been made with in-

4 Tovvnsend v. Stearns, 32 N. Y. tent to hinder <>r delay creditor-, it
209, 218; Brainerd v. Dunning. :!<> affords no protection to the a — 1.

N. Y. 211 ; Campbell v. Woodworth, against a sheriff, who seeks to enforce

24 N. Y. 304; Shultz v. Hoagland, 85 by execution a judgment against the

N. Y. 464 ; Coyne v. Weaver, 84 N. Y. debtor."
386, and cases cited .

POWER TO REFORM. § 322a

York cases clearly establish the rule that where the
assignment shows upon its face that it must necessarily
have the effect of hindering and defrauding the creditors
of the assignor, it is conclusive evidence of a fraudulent
intent, and may be avoided.1 The actual motive, emotion
or belief of the debtor in such cases is immaterial.
Where it is apparent from the face of the instrument
itself that it is a conveyance to the use of the assignor,
it is the duty of the court trying the cause to tell the
jury, as a matter of law, that the conveyance is fraudulent
as against creditors.'3 In the case of Dunham v. Water-
man,3 Mr. Justice Selden, referring to the opinion of the
Court of Errors, in Cunningham v. Freeborn,4 remarked :
" It follows from the reasoning of Mr. Justice Nelson,
which I regard as unanswerable, that wherever an assign-
ment contains provisions which are calculated per se to
hinder, delay or defraud creditors, although the fraud
must be passed upon as a question of fact, it nevertheless
becomes the duty of the court to set aside the finding, if
in opposition to the plain inference to be drawn from the
face of the instrument. A party must in all cases be held
to have intended that which is the necessary consequence
of his acts." 5

§ 322a. Power to reform. — It seems clear on principle
and authority that an assignment void on its face cannot
be reformed by an action so as to cut off a lien of a
judgment recovered after the execution of the illegal

Kavanagh v. Beckwith, 44 Barb. s. p. Bigelow v. Stringer, 40 Mo. 205,

(N. Y i Vxi : Goodrich v. Downs, 6 and cases cited .

Hill (N. Y.) lis See Wakeman v. * Bigelow v. Stringer, 40 Mo. 205.

Dalley, 44 Barb. (N V. 1 503, affi'd 51 » 17 N. Y. 9, 21.

N. V. 27 : Griffin v. Marquardt, 21 N. * 11 Wend. (N. Y.) 840-351.

Y 121 ; Coleman v. Burr, 93 X. Y. 81. See opinion of Ingraham, J., in

See Marks v. Bradley, 69 Miss. 1, 10 Wakeman v. Dalley, 44 Barb. (N. Y.i

Rep 922: Weis v. Dittman, 4 Tex. 503; Gere v. .Murray, 6 Minn. 305.

Civ. A 1 -i .. 35, 28 S. W. Hep. 229 ; Rilev See §§ 9, lo.
v 1 larter, 76 Bid. 581, 25 Ail. R< p. 667;

§§ 322b, 323 PURCHASER UNDER VOID ASSIGNMENT.

assignmen tand before its reformation.1 A clerical error
in an assignment where the true meaning of the instrument
cannot be doubted will not avoid it, and no reformation
is essential.2

§ 322b. Purchaser under void assignment. — An assignee
under an assignment that might be declared fraudulent
and void as to creditors may nevertheless convey a
good title to a purchaser for valuable consideration who
had no notice of the fraud of the assignor.3 As else-
where shown, an assignee will be protected, as regards
acts done in good faith, before any other creditor has
secured a lien.4

§323. Constructive frauds denned by Story — "By con-
structive frauds," observes Mr, Justice Story, "are meant
such acts or contracts as, although not originating in any
actual evil design or contrivance to perpetrate a positive
fraud or injury upon other persons, are yet, by their tend-
ency to deceive or mislead other persons, or to violate
private or public confidence, or to impair or injure the
public interests, deemed equally reprehensible with posi-
tive fraud, and therefore are prohibited by law, as within
the same reason and mischief as acts and contracts done
malo animo"* Again the commentator says: "Another
class of constructive frauds upon the rights, interests, or
duties of third persons, embraces all those agreements
and other acts of parties, which operate directly or virtually
to delay, defraud, or deceive creditors. Of course we

'Sutherland v. Bradner. 116 N. Y. 2 Smith v. Bellows, 3 N. Y. State
410, 416, 22 N. E. Rep. 554 ; Whitaker Rep. 305. Compare Fairchild v.
v. Gavit. 18 Conn. 522; Whitaker v. Lynch ,-42 N. Y. Super. .265.
Williams, 20 Conn. 98; Farrow \. Wilson v. Marion, 117 N. Y. 589,
Hayes, 51 Md. 504. In Van Winkle 42 N. E. Rep. 190.
v. Armstrong, 41 N. J. Eq. 402, 5 Atl. * Nat. Butchers' <S D. Bk. v. Hub-
Rep. 449. -i bill was filed to rectify an bell, 117 N. Y. 397, 22 N. E. Rep. 1081.
assignment by inserting words of in- See § 319a.
heritance therein. The suit was be- 5 1 Story's Eq. Jur. r 358
fore the court on motion.

5;o ASSIGNMENTS CONTRAVENING STATUTES. §324

do not here speak of cases of express and intentional
fraud upon creditors, but of such as virtually and indi-
rectly operates the same mischief, by abusing their confi-
dence, misleading their judgment, or secretly undermining
their interest. It is difficult, in many cases of this sort,
to separate the ingredients which belong to positive and
intentional fraud, from those of a mere constructive
nature, which the law pronounces fraudulent upon princi-
ples of public policy. Indeed, they are often found mixed
up in the same transaction." '

§ 324. Assignments contravening statutes. — I he burden
rests upon the attacking party to point out the illegal
provision, or to establish the dishonest purpose in the
assignment.2 It may be stated, as a general rule, that
an assignment which contravenes the provisions of a
statute, or vests the assignee with a discretion contrary
to the terms of an express provision of law, and authorizes
him to effect sales of the assigned property in a manner
not permitted by the statute, will be declared void.' This
principle is learnedly discussed in a case in the Supreme
Court of the United States.4 The assignment provided
as follows : " The party of the second part [the assignee]
shall take possession of all and singular the property and
effects hereby assigned, and sell and dispose of the same,
either at public or private sale, to such person or persons,
for such prices and on such terms and conditions, either
for cash or upon credit, as in his judgment may appear
best and most for the interest of the parties concerned,

'1 Story's Eq. Jur. §349. Q. B. 618; Jackson v. Davison, 1

Roberta v. Buckley, 145 N. Y. 215, Barn. & Aid. 691 : Miller v. Post, 1

39 N. E. Rep. 966. Allen (Mass.) 434; Parton v. Hervey,

Jaffray v. MoGhee, L07 IT. S. 361- 1 Gray (.Mass.) 119; Bathaway v.

365, .' s. ( '. Rep. :;ii7 ; < lollier v. Davis, Moran, 44 Me. 67.

IT Ark. :;<;'.). I S. W. Rep. 684. See * Jaffray v. McGb.ee, 107 U. S. 861,

Peck v. Burr, 10 N. Y. 394; Mac- 2 S. C. Rep. 367.
- 1 \. Dover <\ Deal R. R. Co., 18

§324 ASSIGNMENTS CONTRAVENING STATUTES. 3JI

and convert the same into money. It will be observed
that the assignment did not, by its terms prevent the
assignee, in the administration of his trust, from fol-
lowing the directions of the statute in all particulars.
Counsel contended that the assignment was valid
(i) because the discretion given the assignee by the
assignment left him at liberty to follow the law, and
(2) because even if the assignment required him to
administer the trust in a manner different from that pre-
scribed by law, only such directions as conflicted with
the law would be void, and the assignment itself would
remain valid. The Supreme Court of the United States,
however, did not adopt this view, but followed the local
construction given to the assignment law of Arkansas by
the Supreme Court of that State in Raleigh v. Griffith,1
to the effect that such an assignment was void as to cred-
itors, and held that the construction put upon the law by
the highest court of the State where the assignment was
made, was binding on the courts of the United States.2
The substance of the opinion in Raleigh v. Griffith,8 is
that the statute is disregarded in the deed of assignment,
the assignee being authorized to sell at private or public
sale, and for cash or on credit. The assignee was vested
with a discretion to prolong the closing of the trust for
an indefinite period. The legislature having deemed it
expedient, as a matter of public policy, to require an
assignee for the benefit of creditors, to sell the property
within a specified time and prescribed manner, the dis-
senting creditors are not barred by a deed made in direct
contravention of a plain provision of the statute. 1 he
provisions of the statute are mandatory and not director),'

1 37 Ark. 153. Branch Lumber Co. v. 011. 142 I' S.

*Brashear v. West, 7 Pet. 608; 622, 12 S. C. Rep. 318. See § 71.
Sumner v. Hicks, 3 Black 532 : Left- ; :'.7 Ark. 15:;.

ingwellv. Warren, 2 Black 599; South 'See French v. Edwards, 18 Wall.

506.

572 SACRIFICE ''I PROPERTY. 5*3-5

and it follows, in the words of Mr. Justice Woods, that
an assignment ''which vests the assignee with a dis-
cretion contrary to the mandates of the statute, and in
effect authorizes him to sell the property conveyed
thereby in a method not permitted by the statute, must
be void, for contracts and conveyances in contravention
of the terms or policy of a statute will not be sanctioned." '

£ 325. Transfer to prevent sacrifice of property. — Super-
fluous recitals as to the intention with which the volun-
tary conveyance was made sometimes prove fatal to the
paper. In German Insurance Bank v. Nunes~ the
material part of the deed read : " That whereas, the said
first party is indebted to sundry persons in various sums,
amounting in the aggregate to about thirty-eight thousand
dollars, and is the owner of a large amount of assets, esti-
mated to be worth more than fifty thousand dollars; and
whereas, the said first party is unable to convert his said
assets into money fast enough to discharge his said
indebtedness as it matures, and is desirous that the same
shall not be sacrificed, but so managed and disposed of
that they will realize their fair value at as little cost as
possible, and satisfy his creditors, in full, and leave a resi-
due for him, etc." The court said, in the course of the
opinion, that it was the intention of the parties which con-
trolled, and that this intention could not be better deter-
mined than from the language employed in the convey-
ance. The deed declared that it was made "to prevent a
sacrifice" of the property and " to leave a residue " to the
debtor. It also avowed in the instrument that the assets
were largely in excess of the liabilities, and it would seem

1 Jaffray v. McGhee, 107 U. S. 365, v. IJ<>st, 1 Allen (.Mass. 134 ; Parton v.

.Rep.367 Citing Peck v. Burr, Hervey, 1 Gray (Mass.) 119 ; Batba-

10 N" Y. -t'.n -, Macgregor v. Dover A: way v. Moran, 14 Me. <>7.
Deal I;, k. Co., 18 Q. B. 618; Jackson 2 80 Ky. 334, 335.
v. Davison, I Barn & Aid. cur, ; Miller

§ 326 RESERVATIONS. 573

to follow from the language that the primary object of
the deed was not to secure creditors, but, on the contrary,
to obstruct them in the enforcement of their legal reme-
dies in order that the debtor might be benefited. The
deed was declared to be fraudulent upon its face and was
set aside.1

§326. Reservations — Exempt property. — A favorite
ground of attacking voluntary assignments made by debt-
ors for the benefit of creditors is, that a reservation has
been made in the debtor's interest,2 or that there has not
been a complete surrender of the debtor's dominion and
control over the assigned property.3 The question comes
up in various phases. Davis, P. J., observes : "It is well
settled that the reservation of the least pecuniary charac-
ter by the assignor or his family, and any device to cover
up the property for the benefit of the assignor, or secure
to him directly or indirectly any benefit, is fraudulent, and
has always received the condemnation of the courts.
The debtor who makes an assignment of this character
must devote all his property to the payment of his debts,
except such as is by law exempt from execution. The
withholding of any considerable sum of money at the
time of making an assignment, from the assignee, must,
we think, in some form be explained, otherwise it is suffi-
cient to establish a fraudulent intent."4 An assignment
in Michigan is void which does not include the assignor's

1 See, also, Vernon v. Morton, 8 Y. 520. it was lield that an express

Dana (Ky.) 247, 264 : Van Nest v. Yoe, exception from the grant of a portion

1 Sandf. Ch. (N. Y.) 4; Ward v. of the property of the assignor, there

Trotter, 3 Mon. (Ky.) 1; Bigeknv v. being no reservation of benefil in the

Stringer. 40 Mo. 195. property actually assigned, did ool

'Means v. Dowd, 128 U. S. 273, 9 render the instrument void. SeeMat-

S. C. Rep. 65; McReynolds v. Ded- ter of Gordon, 49 Hun (N. Y.) 372, 3

man. 47 Ark. 351,1 S. W. Rep. 552 ; N. Y. Supp. 589: Dow v. Platner,

Grove? v. Wakeman, 11 Wend. (N. Y.) L6 N. Y. 562.

187, 1 Am. L. Cas. 63; Goodrich v. 'White v. Fagan, 25 N. V. Daily

Downs. 6 Hill (N. Y.) 438. [leg. p. 269 (Feb. 8. 1884). See is

3 In Carpenter v. Underwood, 19 N. Weekly Dig. (N. Y.) 358.

374 RESERVATIONS. §326

real estate.1 A reservation of $800 worth of property *
renders an assignment void on its face. The fact that
the money so reserved is to be used for the purpose of a
compromise is no excuse.3 Nor. generally, that it was
paid over to the assignee after the action to set aside the
assignment was brought.4 If, however, the amount
retained was small and was handed over to the assignee
before the suit was brought, the assignment will not neces-
sarily be set aside.5 An assignment is invalid if the
debtor prefers his landlord's claim for rent of a dwelling-
house with intent to secure occupation for himself and
family subsequent to the assignment without further pay-
ment1' An assignment for the benefit of creditors who
will accept sixty per cent., reserving the surplus to the
debtor, is manifestly invalid.7

We have already shown that according to the weight
of the best authority, a conveyance of a debtor's exempt
property or homestead8 cannot be annulled as fraudu-
lent. The same principle appertains in the law regulat-
ing fraudulent voluntary assignments reserving property
exempt by statute. The assignment is not rendered void
for the reason that creditors are " not hindered or delayed
by the reservation of that which they have no right to
touch." !l This is an exception to the rule clearly deduci-

Price v. Baynes, :!T Mich. 4S7. per • In re Beadle, 5 Sawyer351.

Cooley, C. J., 1 Am. tnsolv. Rep. L38. K See Reeves v. Peterman, in1,) Ala.

(lark v. Robbins, 8 Kan. 574. 368, 19 So, Rep. 512.

Eleine v. Nie, 88 Ky. 542, 11 S. W. 9 Hildebrand v. Bowman, 100 Pas

Rep. r,90. St. 582. See Mulford v. Shirk, 26 Pa.

Coureey v. Morton. 132 N. Y. 556, St. 474; Ehrisman v. Roberts, 68

:;<» X E. Rep. 231. Pa. St. :!11 ; Richardson v. Marqueze,

Fas v. Grant, 53 Hun, 44, 5 N. Y. 59 Miss. 80, 42 Am. Rep. 353. See

Sup],. 910, affi'd 126 X Y. 624, 2*3 N. Derby v. Weyrich 8 Neb. 176,30 Am.

E Rep HO. See, also, Rothschild \. Rep. 827; 1><>w v. Platner, Hi X. Y.

Solomon, 52 linn (N Y.) 186, :, X. 562 ; Heckman v. Messinger, 49 Pa. St.

Y. Sup. si;:,. |65. Red River Valley Bank v. Free

Elias v. Farley, 3 Vbb. Ct. A.pp. man. 1 N. Dak. 196, 46 X. W. Rep

Dec, X. Y. 11. 36; Richardson v. Stringfellow, 100

§ 327 kl.M.m i\i, SURIM 1 S. 575

ble from the cases, " that no debtor can, in an assignment,
make a reservation at the expense of his creditors of any
part of his income or property for his own benefit, nor
can he stipulate for any advantage either to himself or

family." J If exempt property is not reserved it seems
it cannot be claimed.2 Another reservation must be
considered.

£ 327. Reserving surplus. In cases where a debtor has
assigned all of his property in trust to pay certain speci-
fied creditors, and then, without making provision for
other creditors, to reconvey the residue of the property
to the debtor, the instrument was declared fraudulent
upon its face. The court held that it could not be made
effectual by showing that there was, as matter of fact, no
possible surplus resulting to the debtor after the pre-
ferred creditors were paid. Bronson, J., observed : " The
parties contemplated a surplus, and provided for it; and
they are not now at liberty to say that this was a mere
form which meant nothing. And although it should ulti-
mately turn out that there is no surplus, still the illegal
purpose which destroys the deed is plainly written on the
face of the instrument, and there is no way of getting rid
of it."8 In Knapp v. McGowan,4 Earl, J., said: "An
insolvent, and even a solvent debtor cannot convey all his
property to trustees to pay a portion of his creditors,
with a provision that the surplus shall be returned to him,
leaving his other creditors unprovided for; because such

Ala. 416. 14 So. Rep. 283; Bobbitt v. Leavitt, 6 N. Y. 521. The defect can-

Rodwell, 105 N. C. 236, 11 S. E. Rep. not l>e remedied by ;i supplementary

245. See £;; 46-50. assignn* tit, so as to cul off lien

1 McClurg v. Lecky, 3 P. &. W. quired in the meantime. Sutherland
(Pa.) 91. v. Bradner, 1 16 N. Y. U0, 22 N. E.

2 Carroll v. Else. 75 Md. 301, 23 Atl. Rep. 554. The New York rule is dis-
Rep. 740. approved in Muchmore v. Budd, 58

(iritlin v. Barney, 2 X. Y. 371. N.J. Law 369, 22 Atl. Rep. 518.
See Smith v. Howard, 20 How. Pr. ' 96 N. Y. 85.

(N. Y.) 12S. Compare Nicholson v.

S>i

j6 RESERVING SURPLUS. $ 5-7

a conveyance ties up his property in the hands of his
trustees, places it beyond the reach of his creditors by
the ordinary process of the law, and thus hinders and
delays them, and is, therefore, void as to the creditors unpro-
vided for." x The Supreme Court of Nebraska,2 how-
ever, refused to follow this doctrine, and considered that
such a reservation was partial and only incidental. It
merely stipulated for that which, had it been omitted,
the law would have implied, and required to be done.3
So in Hubler v. Waterman,4 the court observed : " The
reversionary clause is mere surplusage, for it would have
been implied if it had not been expressed." 5 The princi-
ple set forth in these latter cases certainly embodies the
more logical rule. There is, however, an obvious dis-
tinction in these cases. In Griffin v. Barney the surplus
was to revert before all the creditors were paid, which
was palpably fraudulent, while in the other cases the sur-
plus contemplated was that remaining after all the cred-
itors had been satisfied. Of course the law will not
permit a debtor in failing circumstances to convey all his
property to trustees, with a view to exempt it from execu-
tion for an indefinite time, to authorize them to hold it
against creditors until the profits pay all charges,
expenses and debts, and then to reconvey it or permit it
to revert to the original owner. Property cannot be thus
withdrawn from the operation of the law in its due course
against the consent of existing creditors.6 A provision
in an assignment to a creditor to the effect that am- sur-
plus should be paid to another creditor has been held to
be valid.'

Sutherland v. Bradner, 116 N. * 33 Pa, St. 414.

Y. 410. 22 N K. Rep. 554 Sees, p., Johnson v. McAllister, 30

Morgan v. Bogue, 7 Neb. 133. Mo. 327; Richards v. Levin, 16 Mo. 598.

•See Curtis v. Leavitt, l"> N. V. '.) ; 'Arthur v. Commercial & R. R.

Coulter v. Lumpkin, 88 Ga. 277, US. Bank, 17 Miss. 133.

E. Rep. 614; Bluthenthal v. Magn< Perkins v. Hutchinson, 17 R. 1.

'.»; Ala. 530, L3So. Rep. 7. 150, 22 Ail. Rep. 1111.

§ 328 Kl ' ■' N 31 577

§ 328. Releases exacted in assignments - Voluntary
assignments exacting releases from creditors are looked
upon with great disfavor by the courts.1 The law seems
to be settled that assignments will be declared fraudu-
lent and void if creditors are preferred on condition of
their subsequently executing releases of their respective
demands. The reason is obvious.2 It is a clear attempt
on the part of the debtor to coerce his creditors to
accede to his terms,3 and a withholding of his property
from them unless they do so accede. As was observed
in Hyslop v. Clarke :4 "It does not actually give a prefer-
ence, but is, in effect, an attempt on the part of the
debtors to place their property out of the reach of their
creditors, and to retain the power to give such prefer-
ence at some future period If they can keep it

locked up in this way in the hands of the trustees, and set
their creditors at defiance for three months, they may do
so for three years, or for any indefinite period."5 The
right of giving preferences cannot be so exercised as to
secure to the debtor the future control of the assigned
property or its proceeds, as continuing the business in
another's name.6

'Hubbard v. McNaughton, 43 Rep. 36; May v. Walker. :>,:> Minn.

Mich. 224. See Lawrence v. Norton, 194; Greeley v. Dixon, 21 Fla. 426 :

4 Woods 406; Leitcb v. Hollister, 4 cf. Stewart v. Spenser, 1 Curt 157, 88

N. Y. 211 ; Baldwin v. Peet, 22 Tex. Fed. Cas. 72. Clayton v. Johnson, 36

708; Barney v. Griffin, 2 N. Y. 365 ; Ark. 406; Wolf v. Gray, 58 \rk. 75,

Bennett v. Ellison, 23 Minn. 242, 1 13 S. W. Rep. 512. in that State

Am. Insolv. Rep. 36 ; Curtain v. preference of assenting creditors is

Talley, 46 Fed. Rep. 580; Oliver-Finnie allowed provided thai all the surplus

Grocer Co. v. Miller, 53 Mo. App. 107; is devoteil to payment of aon-assent-

Turner v. Douglass, 77 Tex. 619, 14 ing creditors.

S. W. Rep. 221 ; McWilliams v. Cor- » Qliver-Finnie Grocer Co. v. Miller,

nelius, 66 Tex. 301, 17 S. W. Rep. 767 : 53 Mo. App. 107.

Focke v. Blum, 82 Tex. 436, 17 S. W. * 14 Johns. (N Y.) 458,

Rep. 770. l See Grover v. Wakeman, 11 Wend

5 Spaulding v. Strang, 38 N. Y. 12 ; (N. Y.> 1ST.

Brown v. Knox, 6 Mo. 303 : Bennett v. > Haydocfc v. Coope, 53 N Y. 68
Ellison, 23 Minn. 242, 1 Am. Insolv.

37

;;S PREFERRING CLAIMS. ^5^9

It has been considered competent for a debtor in fail
in«'' circumstances to make an assignment for the benefit
of creditors, providing that accommodation creditors shall
be paid first ; secondly, those creditors who had executed
a conditional release should receive fifty per cent. ; and
thirdly, the residue of the creditors should be paid.1 The
whole estate was by this instrument devoted to the pay-
ment of the debts. It was considered that in no sense
could it be said that an agreement by a debtor with a
creditor to prefer him for one-half of his demand in an
assignment, on condition or in consideration that the bal-
ance should be released, was a fraud upon those who
refused to become parties to the contract. These cases
certainly go to the verge in upholding an assignment of
this character ;~ and where it is apparent from the face of
the deed, or is a moral certainty, that nothing will be left
to the non-assenting- creditors, the court will annul the
assignment.3

§ 329. Preferring claims in which assignor is partner —
Rights of survivor. —It was contended by counsel in Welsh
v. Britton,4 that if an insolvent person made an assign-
ment for creditors, and preferred a debt due another firm,
one member of which was also a member of the assign-
ing firm, this constituted such a reservation to one of the
assignors as would avoid the assignment. The case of
Kayser v. Heavenrich "' was cited, but the court said that
it could not be said to establish so broad a principle. In
that case a preference was given to one Lowentholl, and
one of the assigning firm was an equal partner with
Lowentholl in the preferred claim. This was held to be

Spaulding v. Strang, 37 N. V. 135, s Seale v. Vaiden, 1 Woods661.

38 N. Y. 9; explai I, Baydock v. ;I Scale v. Vraiden, 4 Woods 661. Sol

Coope, 53 N. Y. 74. Compare Nat. Lawrence v. Norton, I Woods 106.
Park Kink v.Wuitmore, nil X. Y. 304, ' 55 Tex. 122.
LO N. E. Rep. 524 Smith v. Munroe, ' 5 Kan. 324.

1 \|.|,. Div.(N.Y.)77, :;7 N.Y. Supp. 62.

§ 329 PREFERRING CLAIMS.

a secret trust for the benefit of that member oi the firm
and to invalidate the assignment. The fad "I se< rei cy
was also given prominence. ( )n the other hand, the i
of Fanshawe v. Lane1 asserts the absolute right of an
assigning firm to prefer such debts. The Supreme Court
of Texas followed this latter case. In Bonwil \. Hey-
man,a it was held that a preference by mem hers of a
partnership of another firm of which they are the sole
partners, will not be upheld unless it be clearly shown
that the transaction is free from fraud. We may here
state that the insolvent cannot delegate to the assignee
the power to give preferences at his discretion. ;

As we have seen, a special partner cannot be preferred
for the amount of his investment,4 and where a limited
partnership becomes insolvent its assets are a special
fund for the payment of its debts except those due to the
special partner.5 A surviving partner may make a
general assignment of the firm assets.0 Mr. Justice
Harlan said : " But while the surviving partner is under
a legal obligation to account to the personal representa-
tive of a deceased partner, the latter has no such lien
upon joint assets as would prevent the former from dis-
posing of them for the purpose of closing up the partner-
ship affairs. He has a standing in court only through the
equitable right which his intestate had, as between him-
self and the surviving partner, to have the joint property
applied in good faith for the liquidation of the joint lia-
bilities. As with the concurrence of all of the partners the
joint property could have been sold or assigned, for the

1 16 Abb. Pr. (N. Y.) 82. • Emerson v. Senter, 118 CJ. 8. 3, 6

2 43 Neb. 537. 61 N. W Rep. 716. S. C. Rep. 981 ; William- \. Whedon,
'Boardman v. Balliday, 10 Paige L09 V Y. 341, 16 X. E. Rep. 865

iN. Y.) 223. Haynes v. Brooks, 12 Hun N Y.i

•Whitcomb v. Fowle, 10 Daly (N. 528; Beste v. Burger, 17 AM. N.C

5 23, 1 Am. [nsolv. Rep. 160 (N. Y. L6i and note on the rights of

limes v. Lansing, 7 Paige (N. Y.) surviving partners, and represents

583. tives "i a deceased partner.

580 TRUSTEE. § 330

benefit of preferred creditors of the firm, the surviving
partner — there being no statute forbidding it — could make
the same disposition of it. The right to do so grows out
of his duty, from his relations to the property, to admin-
ister the affairs of the firm so as to close up its business
without unreasonable delay ; and his authority to make
such a preference — the local law not forbidding it — can-
not, upon principle, be less than that which an individual
debtor has in the case of his own creditors. It neces-
sarily results that the giving of preference to certain part-
nership creditors was not an unauthorized exertion of
power by Moores, the surviving partner." 1 A preference
given by a board of directors to a firm of which two of
them are members was held void.2

§ 330. Authorizing trustee to continue business. — An
assignment drawn precisely as it ought to be will not
undertake to speak to the assignee in detail in regard to
his duties under the trust. These duties, unless the cred-
itors themselves direct otherwise, are simply to convert
the estate into money and pay the debts in the order and
with the preferences indicated in the instrument.3 There
are numerous cases reported in which assignments in
trust for the benefit of creditors have been sustained,
although they contained provisions for the continuance
of the business of the assignor, either by himself or by
his trustee.4 It will be found upon examination that, in

1 Emerson v. Senter, 118 U. S. 3, 8, assigned, and may also direct upon

<i S. ( '. Hep 981. what debts and in what order the

* Hulings \ Hillings Lumber Co., proceeds shall be applied: but beyond

38 W. Va. ;',.",i, 188. E. Hep. 620. this can prescribe no conditions what-

1 Ogden v. Peters, 31 N. Y. 24. ever as to the management or dispo*

'• The true principle applicable to all sition of the assigned property."

Buch cases is. that a debtor who Selden, J., in Dunham v. Waterman,

makes a voluntary assignment for 17 N. Y. 20; Jones v. Syer, 52 Md.

the benefit of his creditors may di- 211.

rect, in general terms, a Bale of the ' !>.• Forest v. Bacon, 2 Conn. 6881

property ami collection <>f the dues Kendall \. The New England Carpet

§33' ILLUSTRATIONS AND AUTHORITIES. 581

many of these cases, the business authorized to be carried
on by the assignment was merely ancillary to winding up
the debtor's affairs, and that the authority was given with
the view of more effectually promoting the interests of
the creditors.1 In cases where the authority is given
chiefly for the benefit of the debtor,2 or where it is
intended or calculated to hinder and delay creditors for
an unreasonable period in the collection of their debts, it
renders the deed fraudulent and void3

§ 331. Illustrations and authorities. — Authorities relating
to this class of voluntary assignments are numerous. In
Owen v. Body,4 the assignment was made to trustees for
the benefit of creditors, giving preferences, and contained
provisions investing the trustees with power to carry on
the trade of the debtor, and in furtherance of that pur-
pose to lay out money in payment of rent and keeping
up the stock in trade. The deed was adjudged void as
being an instrument to which creditors could not reason-
ably be expected to assent. Lord Wensleydale, in giving
his opinion in the House of Lords in the case of Wheat,
croft v. Hickman,5 referring to this deed said that the
provisions contained in it allowing the effects of the
debtor, which ought to have been divided equally amongst
his creditors, to be put in peril by being employed in
trade, prevented it from being a fair deed and good
against creditors. In American Exchange Bank v.
Inloes,6 the deed contained a provision empowering the

Co., 13 Conn. 383 ; Foster v. Saco • Acme Lumber Co. v. Hoyt, 71

Manuf. Co., 12 Pick. (Mass.) 451; Miss. 106, 14 So. Rep. 64.

Woodward v. Marshall, 22 Pick. 3 Webb v. Armistead, 26 Fed. Rep.

(Mass.) 468; Hitchcock v. Cadmus, 70; Jones v. Syer, 52 Md. 211.

2 Barb. (N. Y.) 381 ; Ravisies v. Al- 4 5 Adol. & El. 28, 31 Eng. C. L

Ston, 5 Ala. 297; Janes v. Whitbread, 254 ; Acme Lumber Co. v. Hoyt, 71

11 C. B. 406 ; Stoneburner v. Jeffreys, Miss. 106, 14 So. Rep. 64 ; Jones v.

116 N. C. 78, 21 S. E. Rep. 29. Syer, 52 Md. 211 ; Renton v. Kelly, 49

! See De Wolf v. Sprague Mfg. Co., Barb. (N. Y.) 536.

49 Conn. 326. » 9 C. B. [N. S.] 101.

» 7 Md. 380.

582 ILLUSTRATIONS AND AUTHORITIES. §331

trustee at his discretion to sell the property conveyed
gradually, in the manner and on the terms in which, in
the course of their business, the assignors had sold and
disposed of their merchandise. For that reason the deed
was adjudged void. Mason, J., said: "Without advert-
ing to other objectionable, if not fatal, provisions in this
deed, the one to which we have just referred is sufficient,
in the judgment of this court, to render the deed null
and void as against creditors. It simply seeks through
the instrumentality of a trustee, to provide for carrying
on the business of the concern in the same manner
in which it had been before conducted, and for an
indefinite period, free of all control or interference
on the part of creditors. Surely if such a provision in a
deed is not calculated to hinder and delay creditors, we are
at a loss to know what could have such an effect, short of
a conveyance in trust for the benefit of the grantor himself.
A debtor cannot thus postpone his creditors to an indefi-
nite period without their assent. A conveyance which
thus attempts to deprive creditors of their just rights to
enforce their claims against the property of their debtor,
by placing it beyond their control for an uncertain and
indefinite period, must be regarded in conscience and law
as a fraud." In a later case in the same State1 an
assignment in trust for the benefit of creditors, author-
izing the trustee to carry on and conduct the business
" for such time as in his judgment it shall be beneficial to
so do," or to sell all the goods and stock in trade " at such
times, in such manner, and for such prices as he may
deem proper," was adjudged void as against creditors.
The court said: "It is obvious, the certain effect of this
clause would be to hinder and delay creditors ; and as
against them such provision renders the deed utterly
void. It is an attempt on the part of the debtor to place

Jones v. Syer, 52 M<1. 311.

§33?

DI I W .

583

his property, for an uncertain and indefinite period, beyond
the reach of his creditors, and to make their rio;hts in a
great measure dependent upon the uncontrolled discretion
of a trustee of the debtor's own selection. The law will
tolerate no such attempt, but treats the act as a fraud
upon creditors, and the instrument of conveyance as
simply void as against them." ' Where the deed required
the trustee to carry on a school for eighteen months, and
if unprofitable to pay the loss from the assigned estate
the instrument was avoided.2

§ 332. Delay — Sales upon credit. — An insolvent debtor,
it is held in New York, cannot deprive his creditors of

1 See, also, Dunham v. Waterman,
17 N. Y. 9. Authority given in the
assignment to the assignee to finish up
unfinished work will not necessarily
avoid the instrument. Robbins v.
Butcher, 104 N. Y. 575, 11 N. E. Rep.
272. In this case the assignment con-
tained the following clause : " And it
is further provided that should it be
necessary and to the better perform-
ance of the trust that the party of the
second part shall have full power and
authority to finish such work as is
unfinished, to complete such build-
ings as are incompleted, and to pay all
necessary charges and expenses for
such completion prior to the payment
of all debts and liabilities hereinbefore
mentioned and provided." Finch, J.,
said : " The repetition of the word
•that* permits it to be said that this
provision is an unfinished sentence
and confers no authority at all; but
M" such criticism is made, and the
meaning of the language is more ac-
curately expressed by disregarding
the word 'that" where it occurs the
second time. Both parties have ar-
gued the case upon such construction.
The appellant claims that the provi-
sion confers upon the assignee an au-
thority derived from the assignor to

unduly delay the execution of the
trust and divert the trust funds, in
the exercise of his discretion, and
free from the supervision and control
of the courts, and so is fraudulent
and void upon its face. The respond-
ent contends that the authority given
is upon a condition which rests in the
discretion and judgment of the
courts, and if exercised by the as-
signee without their prior permission
and approval, must be so exercised at
his peril and subject to their prohibi-
tion or direction at any moment, and
upon the application of any person
interested or aggrieved, and so does
not involve an intent to hinder, delay,
or defraud the creditors of the as-
signor. We think the latter view of
the instrument discloses its true and
intended meaning." Aprovision com-
pelling the trustee to sell at the usual
retail prices will vitiate the assign-
ment. Gregg v. Cleveland, 82 Tex.
187, 17 8. W. Rep. 777; see also
Kansas City Packing Co. v. Hoover,
1 D. C. Ct. of App. 274; Chafee v.
Blatchford, 6 Mackey (D. C.) 459.

• Catt v. Win. Knabe & Co. Manuf.
Co., 93 Va. 741, 26 So. Rep. 246. See
Sheppards v. Turpin, 3 Gratt. (Va. )
373.

584 DELAY. § 332

their right to have his property converted into money
without delay. He can make an assignment with prefer-
ences, but he cannot authorize his assignee to sell on
credit.1 Xo delay is permitted other than such as is
reasonably necessary to secure the application of the
property to the payment of his debts.' In Dunham v.
Waterman,3 Selden, J., following the reasoning of Nel-
son, J., in Cunningham v. Freeborn,4 said: "That
wherever an assignment contains provisions which are
calculated per se to hinder, delay, or defraud creditors,
although the fraud must be passed upon as a question of
fact, it nevertheless becomes the duty of the court to set
aside the finding, if in opposition to the plain inference
to be drawn from the face of the instrument. A party
must in all cases be held to have intended that which is
the necessary consequence of his acts."5 It follows that
when this objectionable feature is embodied in the face
of the assignment, the court itself will stamp it as fraudu-
lent. A provision that realty embraced in the assign-
ment shall be held for two years, and then sold partially
upon credit renders the assignment void.6 In Beus
v. Shaughnessy r the insolvent directed that the " times,
places, and terms of selling the property shall be agreed
on by the trustee and the majority in interest of the first
and second-class creditors," and that if they did not agree,
then two-thirds of all of the creditors should direct such
" times, places, and terms." The court said there seemed

1 Nicholson v. Leavitt, 6 N. Y. 510 ; Donaldson, 20 Kans. 165, 1 Am.

Kansas City Packing Co. v. Hoover, [nsolv. Rep. 15:5.

1 D. C. CI \pi>. 268; Rosenstein v. * 17 N. T. 21.

Coleman, 18 Mont. ir.:5. 15 Pac. Rep. 411 Wend. (N. Y.) 251-254.

L081 ; Barney v. Griffin. 2 N. Y. 365. :' See Coleman v. Burr, 93 N. Y.

Compare Bracketl \ Barvey, 91 N. 31; also §§ 9, 10.

Y 220 6 Bank v. Martin, 96 Tenn. 3, 33 S.

Bennett v. Ellison, 2:; Minn. 242, W. Rep. 565.

1 Am. Insolv. Rep. 36. See Keevil v. T2 Utah 499. See McCleery v.

Allen, 7 Neb. 21.

§ 332 SALES UPON CREDI1 . 585

to be but one question to consider, and that turned entirely
upon the construction to be placed upon the words " terms
of selling," whether these words in the deed of trust
embraced the power to sell upon credit. Continuing, it
was said that the courts generally held that deeds of
assignment, giving authority to the assignee to sell upon
credit, were fraudulent and void as to creditors not
assenting thereto, and especially was this the case where
the deeds made preferences between creditors. In New
York this general rule is fully recognized. The case of
Kellogcr v. Slauson,1 at first reading, would seem to be a
departure from the rule, but upon a more careful con-
sideration it will be found to be consistent with it. The
assignees in that case were authorized to sell the property
u on such terms as in their judgment might be best for
the parties concerned, and convert the same into money."
The court, in upholding the assignment, said that this dis-
cretion must be exercised within legal limits. In Brigham
v. Tillinghast2 the case of Kellogg v. Slauson is referred
to, and the court says that the words "convert the same
into money," limited the disposition of the property to
sales for cash, and that such was the purport of the ruling
in that case. The same rule is reiterated in Rapalee v.
Stewart.3 The assignment held to be valid in the case
of Sumner v. Hicks4 contained language similar to that

1 11 N. Y. 302. diate application, will avoid the

- 13 N. Y. 215. instrument, because it shows that it

1 37 N. Y. 311. "The true rule to was made with ' intent to hinder and

l»o observed is this : An insolvent delay creditors in the collection of

debtor may make an assignment of their debts.' Such an intent expressed

all his estate to trustees to pay his in the instrument or proved aliunde,

debts with or without preferences; is fatal alike by the language of our

hut such assignees are bound to make statute and the well-settled adjudica-

an immediate application of the prop- tione of the English and American

erty. And any provision contained courts." Brigham v. Tillinghast, 13

in the assignment which shows that N. Y. 215 220.

the debtor, at tin- time of its execu- 4 2 Black 532.
tiou, intended to prevent such imme*

586 SALES UPON CREDIT. § 333

found in Kellogg v. Slauson, and, indeed, the closing
words of the objectionable provision were precisely the
same, viz.: "And convert the same into money." x The
inference from these cases is that if these last words had
been omitted the assignments would have been held void
as authorizing sales upon credit.

The word "term" signifies, among other things, "a
limit," "a boundary." If we say the power of sale is
oranted without "limit," without "boundary," it can be
exercised to an unlimited extent and without bounds. In
the case of Beus v. Shaughnessy 2 there was no restric-
tion whatever upon the power of sale granted to the trus-
tees and a fixed proportion of the creditors. They were
authorized to sell upon such " terms " as they might deem
proper, and this power had no limits, no bounds. This
broad grant certainly would necessarily embrace the
power to sell upon credit.

§333- — 1° Wisconsin, in the case of Hutchinson v.
Lord,3 where the assignment empowered the assignee to
sell in such manner and " upon such terms and for
such prices as to him shall seem advisable," it was held
that this language gave power to sell upon credit, which
would necessarily operate to hinder and delay creditors,
and rendered the assignment fraudulent and void. In the
case of Keep v. Sanderson,4 although the objectionable
words were exactly those found in Kellogg v. Slauson,
yet the court held that they conferred an authority to
sell upon credit, and thus avoided the whole assignment.
In Woodburn v. Mosher5 the authority to the assignees
was to convert the property into money "within conve-
nient time as to them shall seem meet." It was held that
the assignment was void upon its face. In Keep v.

'See Keep v. Sanderson, 12 Wis. • 1 Wis. 286.

362. « 2 Wis. 42.

-' It ah 499. 6 9 Barb. (N. Y.) 255.

§§ 333a> 334 EXEMPTING ASSIGNEE. 5S7

Sanderson l it was decided that a clause in an assignment
authorizing the assignee to sell and dispose of the
assigned property "upon such terms and conditions as in
his judgment may appear best and most to the intei
of the parties concerned," was authority to sell on credit,
and that it was void as to creditors, in accordance with the
decision on the former appeal.2

>J 333a. Exceptional rule. — In other States a different
rule is adopted, and it is held that a general power to
give credit is perfectly consistent with good faith, and not
only does not render the assignment fraudulent in law.
but is not even a badore of fraud. :i

§ 334. Exempting assignee from liability.— Another sub-
terfuge of insolvent debtors must be noticed. In De
Wolf v. Sprague Mfg. Co.4 the deed contained a clans.-
which provided that " in case the same (meaning the mill,
etc.) are thus run by him or otherwise, he shall not be
liable personally for the expenses or losses arising there-
from, but the same shall be chargeable to the trust fund
vested in him." This was held in connection with the
right to run the mills and print works, to furnish additional
evidence of the fraudulent purpose for which the assign-
ment was executed. A failing debtor cannot be permitted
to put at hazard the trust fund which justly belongs to
his creditors by authorizing the trustee to manage it with-
out due prudence and caution. This question was before
the New York Court of Appeals in Litchfield v. White.5
In that case the assignment contained a clause by which
it was mutually agreed between the parties to it that the

1 12 Wis. 361. S. E. Rep. 682 ; Johnson v. McAllis-

2 A trustee in bankruptcy may sell ter, 30 Mo. 327: Scott v. Alfonl. 53
the property of the estate on credit Tex. 82.

where he deems such action most for 4 49 Conn. 328.

the benefit of creditors. Traer v. 5 7 N. Y. 442 ; Kansas ( it y Packing

Clews, 115 U. S. 528, 6 S. C. Rep. 155. Co. v. Hoover, 1 D. C. App.

3 Kreth v. Rogers, 101 N. C. 263, 7 268.

588 PROVIDING F<>R COUNSEL FEES. §335

assignee should not be held liable or accountable for any
loss that might result to the trust property or the pro-
ceeds of it, unless the same should happen by reason of
the gross negligence or willful misfeasance of the assignee.
The assignment was adjudged void. Chief-Justice Rug-
gles said : "A failing debtor by an assignment puts his
property where it cannot be reached by ordinary legal
process. He puts it into the hands of a trustee of his own
selection, often his particular friend, sometimes a man to
whom the creditors would not have been willing to con-
fide such a trust. The debtor has an interest in the
application of the trust funds to the payment of his debts ;
but the creditors have usually a far greater interest
therein ; and that interest depends in many cases on the
competency and diligence of the assignee. The debtor
cannot be permitted, by creating a trust for his creditors,
to place his property where it cannot be reached by
ordinary legal remedy, and at the same time exempt the
trustee from his proper responsibility to his creditors."1

§ 335- Providing for counsel fees. — The question of the
right of the assignor to provide for or interfere in the mat-
ter of the assignee's counsel fees has been before the
courts in various forms. In Heacock v. Durand2
the assignee was a lawyer, and by the provisions of the
assignment was to be entitled to " a reasonable and lawful
compensation or commission for his own services, both as
assignee as aforesaid, and as the lawyer, attorney, solicitor,
and counsel in the premises." The assignment was
annulled on the theory that the power given to charge
counsel fees tended so directly to the impairment of the
fund and the injury of creditors, that it was impossible to
offer a valid reason in its support. The provision places

1 Compare Casey v. Janes, 37 N. Y. Dean, 86 N. Y. 398, as to duties of
611 ; Matter of Cornell, 110 N. Y. assignee.
B57, 18 N. E. Rep. 142; Matter of M2 111. 231.

§ 336 AUTHORITY TO COMPROM]

the assignee in two inconsistent positions. Tin's question
was before the New York Court of Appeals in Nichols \.
McEwen,1 and the court held that such a clause was
fraudulent in its character, and would vitiate the assign-
ment. Roosevelt, J , observed that to sanction such a
clause " would be establishing a practice pregnant in many
cases with the most mischievous consequences." I lenio.
J., says, that an insolvent debtor has no right "to create
such an expensive agency for the conversion of his
property into money, and distributing it among his cred-
itors. Besides being wrong in principle, it is calculated to
lead to obvious abuses." 2 It is no objection, however,
to the instrument, that provision is made for the payment
of a reasonable attorney's fee for the examination of the
facts, and for advice and services in drawing up the
assignment 3 and securing it to be properly acknowledged
and placed on record. But at this point the control of the
assignor ceases,4 and the assignor has no power to con-
tract with attorneys for any further services ; that is a
matter entirely within the control of the trustee.

>f 336. Authority to compromise.— The authority given to
the assignees "to compromise or compound any claim by
taking a part for the whole, when they shall deem it expe-
dient so to do," was considered by the New York Supreme
Court not to expressly authorize or require an illegal act

1 17 N. Y. 22; Norton v. Matthews, 3 See Bryce v. Foot. 25 S. ('. 467 ;

7 Misc. (N. Y.) 569, 28 N. Y. Supp. Drucker v. Wellhouse, 82 Oa. 129, 8

265 ; Matter of Gordon, 49 Hun (N. S. E. Rep. 40.

Y.) 370. 3 N. T. Supp. 589; Hill v. 4 Hill v. Agnew, 12 Fed. Rep. 888.

Agnew, 12 Fed. Rep. 232. A provision allowing the assignee

" Compare Campbell v. Wood- his "reasonable costs, charges and

worth, 24 N. Y. 305 ; Dimon v. Hazard, expenses, including the necessary at-

32 N. Y. 71. Where an assignment torney's fees,"' was held unobjectioo

gives preferences it cannot provide for able. National Hank of the Repub-

the payment of a counsel fee incurred lie; v. Hodge, 3 Ct App. (1>

by the preferred creditors in defend- 140 ; see Mills v. Pessels, 55 Fed. Rep

ing such preference. Simon v. Norton, 588.
56 Mo. App. 338.

590 FRAUD OF ASSIGNEE. § $$7

to be done, and the court refused to vitiate the assign-
ment.1 And where the instrument authorized the
assignee to compound " choses in action, taking a part for
the whole when he shall deem it expedient," the assignment
was sustained. This clause was held to vest no arbitrary
power in the assignee to compromise where such action
was neither necessary nor proper, but merely to confer
the discretion which the law recognizes to compound
doubtful and dangerous debts in cases where the safety
and interest of the fund demanded such action. " It
confers upon the assignee," said Finch, J., "no unlawful
or arbitrary power, and takes away from the creditors no
just protection."2 On the other hand, the power given
in the assignment to the assignee to compromise with
creditors, is held to restrain the creditors until the attempt
to compromise is made. Thus they would be hindered,
and a delay even for a single day would be fatal to the
assignment, and whether the delay was directed by the
instrument, or justified by its provisions, or made neces-
sary in the execution of its provisions, made no difference.3

§ 337- Fraud of assignee. — The fiduciary character of his
position precludes the assignee from taking any advantage
of his influence as such, or from using, for purposes of
personal gain or profit, any information acquired while
acting in that capacity. Every agreement having such

1 Ginther v. Richmond, 18 Hun (N. assignment to prefer creditors, or to
y.) 234. change preferences made by the in-

2 Coyne v. Weaver, 84 N. Y. 391, strument, or to compromise the debts
I A in. Insolv. Rep. 395; S. i'., McCon- of the insolvent, or when the instrn-
nell v. Sherwood, 84 X. Y, 522 ; Bag ment does not declare the uses for
ley v. Bowe. 105 X. Y. ITT, 11 N. E. which the property was assigned, the
Rep. 386. assignment is fraudulent and there-

McConnell v. Sherwood, 81 X. V. fore void." Citing Caton v. Mosely,

531. In Noyes v. Sanger Bros., 8 25 Tex. 375 ; Home v. Chatham. <il

Tex. Civ. \pp. 393, 21 S. W. Rep. Tex. 36 ; McConnell v. Sherwood, si

L022, the court says : «« We think il is X. V. 522; Grover \. Wakeman, 11

the law, thai when an assignee of an Wend. (N. Y.) 203,
insolvent debtor lias power under the

^ 337 FRAUD i IF VSSIGNE] , 501

an object in view, made with the assignors, or with an)
of the creditors, especially if not approved by and com-
municated to all the parties in interest, is looked upon
by the courts with great suspicion and distrust, and if
tainted with the slightest evidence of fraud, concealment,
or misconduct on the part of the assignee in its procure-
ment, will be set aside as inequitable and unjust, and he
will not be permitted to reap any personal ad wantage
from it.1 The fact of his having an interest conflicting
with his duties as assignee, is a sufficient ground for
removal 2

An assigment honestly made for a lawful purpose can-
not be defeated by proof that the assignee abused his
trust, misappropriated the property, or acted dishonestly
in its disposal.3 Where the assignee is guilty of neglect
or misfeasance, the creditor feeling aggrieved should
apply to the court for a compulsory accounting,4 or seek
his removal, and secure the appointment of a new trustee
or assignee.5 Brown, J., said, in Olney v. Tanner :!1 "If
an assignment is legally complete and perfect, and is
intended to devote, and does devote, all the debtor's
property to the payment of his debts, it cannot be invali-
dated through the subsequent remissness or inefficiency
of the assignee. Creditors have ample remedy against
the assignee for his misconduct, if any ; and they should
be held to these remedies, rather than be allowed to sub-
vert the assignment on the claim that such remissness is

1 Clark v. Stanton, 24 Minn. 232, * Shattuck v. Freeman, 1 Mel

1 Am. Insolv. Rep. 86. See Failey v. (Mass.) 15.

Stockwell, 12 Pa. Co. Ct. Rep. 403. ft Olney v. Tanner, 10 Fed. Rep. 1 15.

a Brown v. Armstrong, 18 R. I. 537. Compare Glenny v. Langdon, 98 '

3 Cuyler v. McCartney, 40 N. Y. 29, and cases cited ; Benfield v. Solo-

237; Olney v. Tanner, 10 Fed. Rep. raons, 9 Ves. 83; Matter of Cohen, 78

114, 115; Eieks v. Copeland, 53 Tex. N. Y. 248, 1 Am. [nsolv. Rep. 221.

5S1. But see Kelley-Goodfellow Shoe 610Fed. Rep. 114, 115.

Co. v. Scales, 12 iT. S. App. 01m, 58

Fed. Rep. 161, 7 C. C. A. 140.

5 9^

INCOMPETENCY OF ASSIGNEE.

§338

an evidence of original fraudulent intent." l On the other
hand, if the assignment is set aside as fraudulent, the acts
of the assignee, performed in good faith in the execution
of the trust, will not, as elsewhere shown, be disturbed ;
whether the assignment be fraudulent in fact or construct-
ively so, the assignee will not be held to account for the
property or its proceeds which have been paid out by him
in good faith.2

§ 338. Ignorance or incompetency of assignee as badge of
fraud. — The selection of an incompetent assignee is
regarded in the law as a badge of fraud.3 Blindness in
the assignee is considered an indicium of fraud on the
part of the assignor who selects him.4 So, choosing an
insolvent assignee has been said to be prima facie evi-
dence of an intent to defraud ; 5 as is the selection of an
assignee unfit to attend to business by reason of a
lingering disease.6 It was with much doubt and hesita-
tion that entire latitude in the selection of the trustee or

1 Citing Hardmann v. Bowen, 39 N.
Y. 200 ; Shultz v. Hoagland, 85 N. Y.
465.

2 Smith v. Craft, 11 Biss. 351 ;
Wakeinan v. Grover, 4 Paige (N. Y.)
23 ; Knower v. Central Nat. Bank,
124 N. Y. 552, 27 N. E. Rep. 247;
Sullivan v. Miller, 106 N. Y. 643, 13
N. E. Rep. 772 ; Ames v. Blunt, 5
Paige (N. Y.) 13. In Pennsylvania
the assignment vests the title although
the assignee may be ignorant of the
assignment ; it is valid whether the
assignee accepts the trust or not, for
a trust will not fail for want of a
trustee (Mark's Appeal H5 Pa. St.
281 : sub imin. First Nat. Bank v.
Holmes, 1 Am. [nsolv. Rep. 150. See
Johnson v. Herring. 40 Pa. St. 415 ;
Blight \. Schenck, 10 Pa. St. 285),
but in New York the trust must be
assented to, ami the instrument

acknowledged by the assignee.
Rennie v. Bean, 24 Hun (N. Y.) 123,
1 Am. Insolv. Rep. 420 ; Hardmann
v. Bowen, 39 N. Y. 196 ; Britton v.
Lorenz, 45 N. Y. 51. If a party
allows his name to be used in a fraud-
ulent assignment and suffers the
property to be squandered he may be
compelled to account to creditors.
Hughes v. Bloomer, 9 Paige (N. Y.)
269.

3 Guerin v. Hunt, 6 Minn. 395.

4 See Cram v. Mitchell, 1 Sandf.
Ch. (N. Y.)252.

5 Reed v. Emery, 8 Paige (N. Y.)
417. But in some States the court
may uphold the deed and appoint a
receiver to carry it into effect. Cohn
v. Ward, 32 W. Va. 34. 9 S. E. Rep.
41.

8Currie v. Hart, 2 San. If. Ch. (N.

§338

[NCOMPETENCY < >F ASSIGN I I .

assignee was confided to the debtor,1 and the insolvent
having the choice of his own assignee,8 without consulta-
tion with or consent of his creditors, must see to it that he
appoints a person competent to protect the rights of all
parties interested under the assignment. If it appears
that the selection of an incompetent assignee* was made
in order to allow the assignor to control the administra-
tion of the estate, then the assignment will be avoided,
because such an intent would be a fraud upon creditors B
Where the assignee, however is selected without any
improper motive, and proves incompetent, he may be
removed upon a proper application, and a suitable person
substituted by the court to carry out the trust.4 The
words "misconduct" and " incompetency," as used in the
New York statute relating to the removal of an assignee,
are construed to have no technical meaning, but were
intended to embrace all the reasons for which an assignee
ought to be removed.5

1 See Cram v. Mitchell, 1 Sandf.
Ch. (N. Y.) 253.

2 See Burr v. Clement, 9 Col. 1, 9
Pac. Rep. 633.

3 In Davis v. Schwartz, 155 U. S.
638, 15 S. C. Rep. 237, the court says :
"The fact that the assignee or the
preferred creditor of an insolvent
debtor is a relative or intimate friend
is doubtless calculated to excite sus-
picion ; yet in reality there is nothing
unnatural in a dealer or trader who
is in need of credit, or a loan of
money to carry on his business, first
applying to his relatives for such
loans, and if the evidence be undis-
puted that the money was advanced,
the fact that the persons making the
loan are relatives, ought not to debar
them from receiving security. Their
rights are neither increased nor di-
minished by the fact of relationship."
Citing Magniac v. Thompson, 7 Pet.

38

348 ; Prewit v. Wilson, 103 U. S. '-"J ;
Estes v. Gunter, 122 U. S. 450, 7 8 I
Rep. 1275; Bean v. Patterson, 122 U.
S. 496, 7 S. C. Rep. 1298 ; Garner v.
Second National Bank, 151 U. S. 120,
432,14 S. C. Rep. 390: Aulman v.
Aulman, 71 Iowa 124, 32 N. W. Rep.
240.

4 See Guerin v. Hunt, 0 Minn. 395.

B Matter of Colin. 78 N. V. 248, 1
Am. Insolv. Rep. 223. As to the
effect of the selection of an incompe-
tent assignee, see Jennings v. Pren-
tice, 29 Mich. 421 ; Connah v.
Sedgwick, 1 Barb. (N. Y.) 210;
Shryock v. Waggoner, 28 Pa. St. 430 ;
Shultz v. Hoagland, 85 N. Y. 4*14 ;
Baldwin v. Bucklaud, 11 Micl
Matter of Cohn, 7s N. V. 18, 12 Am.
Insolv. hep. 221 ; Montgomery v.
Kirksey, 26 Ala. 172 ; White v. Davis,
48 N. J. Eq. 22, 21 Ail. Rep. 1-7 :
Burrill on Assignments, ?! 92. The

594 ASSIGNMENTS. § 339

In Bachrack v. Norton,1 Mr. Justice Bradley said :
" Independently of a statute on the subject, we do not see
why, as a mere matter of law, an assignment should be
held void because the assignee is not a citizen or resi-
dent of the State where the assignment is made and the
debtor resides, provided he complies with the conditions
prescribed by the law. A citizen, or resident of another
State may, in a particular case, be a very proper assignee.
A large part of a debtor's assets may be located in a State
other than that in which he resides."

§ 339 Transfers inuring as assignments. — Preferences in
the absence of a bankrupt act are usually upheld, though
avoided by the statutory system prevailing in some parts
of the Union. A curious policy exists upon this subject
in some of the States.2 Thus in Alabama it is said to be
a settled proposition of law that a mortgage or deed of
trust which conveys substantially all the debtor s pi'opcrty
for the security of one or more particular creditors to the
exclusion of others, the intention of which is to give a
preference or priority of payment to the former, operates
as a general assignment under the statute, and inures to
the benefit of all the creditors equally.3 In Illinois there
has been much confusion upon this feature of the law.4 It

facl thai the assignee is required riage Works v. Ward, 101 Ala. 670,

to give a bond will not relieve the 14 So. Rep. 417.

assignor from the exercise of prudence 4 White v. Cotzhausen, 129 U. S.

in his selection. Hohnberg v. Dean, 329, 9 S C. Rep. 309 ; Weber v. Mick,

21 Kan 7Z, 131 111. 520, 23 N. E. Rep. 046; Far-

' 132 U. S. 339, 10 S. C. Rep. 106. well v. Nilsson, 133 Til. 45, 24 N. E.

! See Wymaii v. Mathews, 53 Fed. Rep. 74. See Tompkins v. Hunter,

Rep. 678; Kiser v. Dannenberg, 88 149 X. Y. 126, 43 N. E. Hep. 532:

Ga. 541, 15 S. K. Rep. 17. Kellog v. Richardson, 19 Fed. Rep.

'Shirley v. Teal, ff; Ala. 451 ; Code. 70, 72; Martin v. Hausman 14 Fed.

Ala. (1876). g 2126; Warren v. Lee, Rep. 160 ; Freund v. Vnegennan. 26

32 Ua. 11"; Stetson v. Miller, 36 Ala. Fed. Rep. 812, si 1 ; Perry \. Corby,

642; Fairfield Packing Co. v. Ken- 21 Fed. Rep. 737 ; Clapp v. Dittman,

tuckj Jeans Clothing Co. 110 Ala. 21 {■'<•<]. Rep. 15; Kerbs v. Ewing, 23

.-,::•;. 20 So. Rep. 6:;: AJiniston Car- Fed. Rep. 61)3: Stout v. Watson, 19

§ 339a CONFLICTING i \-l.s.

is held in Mississippi that "any assignment thai purports
to convey only specific property must be treated as a
partial assignment until the contrary be shown. But, if it
be clearly shown that in fact it does convey all of the
assignor's property liable for his debts, then it become
general assignment, regardless of its terms, and must be
so dealt with."1 In New Jersey several separate instru-
ments may be construed together as constituting an
assignment and declared void as creating a preference. ~
A mortgage given by way of preference immediately
preceding an assignment will be construed as part of one
transaction, and if equality of distribution does not result
the transaction will not stand in Florida.3 In Colorado
conveyances made prior to an assignment for creditors,
and in fraud of it, will not operate to invalidate the
assignment, but the assignee may recover the property so
fraudulently conveyed.4 In New York, however, it was
held that a specific assignment of property by a debtor
for the benefit of one or a portion of his creditors did not
come within the provisions of the assignment act of that
State, and was not void by reason of its not being
executed in compliance with the provisions of the assign-
ment act.5

§ 339a. White v. Cotzhausen, and conflicting cases. — The
decision of the Supreme Court of the United States in
White v. Cotzhausen6 to the effect that a preferential
transfer by an insolvent debtor of substantially his entire
estate, with a possible view to evade the provisions of

Ore. 251, 24 Pac. Rep. 230. See also 4 Cleghorn v. Sayre, 22 Col. 100,45

§ 339a. Pac. Rep. 370.

1 Newman v. Black, 73 Miss. 244, 18 6 Royer Wheel Co. v. Fielding, 101

So. Rep. 543. N. Y. 504.

2Stites v. Champion, 49 N.J. Eq. 6 129 U. S. 329, 9 B. C. Rep. 309.

446, 24 Atl. Rep. 403. Compare South Branch Lumber Co.

"Armstrong v. Holland, 35 Fla. v. Ott. 142 U. S. 629, 12 S. C Rep.

160, 17 So. Rep. 366. 318.

596 CONFLICTING CASES. §339^

the State Assignment Act operates as an assignment, has
resulted in much controversy over insolvent estates.
The decision purports to follow Illinois decisions, but
has been repudiated in that State,1 and there is a tendency
not to regard it as a controlling authority. ~ In a later
case Mr. Justice Brewer said: "Several instruments
executed by a debtor, at about the same time, may be
considered as parts of one transaction, and in law form-
ing but one instrument ; and if, as thus construed, they
have the effect of a general assignment with preferences,
they are within the denunciation of the statute," 8 providing
that no general assignment for the benefit of creditors
shall be valid unless made for the benefit of all creditors
in proportion to their respective claims. The attempts
to construe meanings into these instruments, which were
probably not in the contemplation of the parties at the
time such instruments were executed, have not been
uniformly fortunate.

The case of White v. Cotzhausen 4 was not followed in
Tompkins v. Hunter.5 In the latter case the insolvent
made a preferential transfer by bill of sale of all his prop-
erty to one creditor. A technical general assignment was
not made and the court refused to construe the transfer
to the preferred creditor so as to convert it into a general
assignment. Martin, J., said : " There is a broad and
well defined distinction between such an assignment
and a deed or bill of sale. The former is a transfer by a

1 Weber v. Mick. 131 111. 520. 23 N. Har.lt v. Heidweyer, 152 U. S. 556, 14

E. Rep. 646; Yoang v. Clapp, 117 111. S. C. Rep. 671.

184, 32 N. E. Rep. 1ST, 35 Ed. 372; 3 South Branch Lumber Co. v.ott.

FarweLl v. Nilsson, 133 Ell. 45, 24 N. 142U.S 622, 629.12S.C. Rep. 318, fol-

E. Rep. 74. Compare Tompkins v. lowing Van Patten v. Burr, 52 Eowa

Hunter. 1 19 N Y. 126, 43 \. E. Rep. 518, 3 N. W. Rep. 524. See Ellison v.

Moore v. Meyer, 47 Fed. Rep. 99; Moses, 95 Ala. 321, n So. Rep. 347.

I l.i 1 - it \. Heidweyer, 152 CJ. S. 556, I I 4 129 EJ. s 329, 9 s. C. Rep. 309.

Rep. 671. 1 1 lit N. Y. 117, 13 N. E. Rep.

: Moore v. Meyer, 17 Fed. Rep. (.t!) ; 532.

§ 339a CONFLICTING I ASKS.

debtor of his property to another in trust to sell, convert
it into money, and distribute the proceeds among his
creditors. It implies a trust, and contemplates the inter,
vention of a trustee. The others import an absolute sale
and transfer of the title, to be held and enjoyed by the
purchaser without any attending trust." In Berger v.
Varrelmann * the court decided that a preferential con-
fession of judgment followed by a general assignment was
voidable under the statute of 1887, prohibiting prefer-
ences in excess of a particular portion of the estate,
and the same rule was followed in Spelman v. Frerd-
man.- The cases were followed in later decisions
where the confession was a part of the scheme which was
to culminate in a general assignment and hence was
within the prohibition of the assignment act.3 In Man-
ning v. Beck4 the court says: " But the statute does not
and was not intended to prevent a creditor from obtaining
payment of or a security, and thereby a preference for his
debt, even from an insolvent debtor." The court further
adds : " The debtor might also neglect to make an assign-
ment and then it would look as if the acts of preference
would be legal." In Central Nat. Bank v. Seligman,5
/indrews, Ch. J., said : " If no assignment had been made
the judgments could not have been assailed by the other
creditors." It results from these decisions that in some of
the States at least the danger of forfeiting a prefer-
ence is avoided in cases where the insolvent omits to
follow up the preferential act by making a voluntary
assignment.

1 127 N. Y. 281, 27 N. E. Rep. 1065. Hardware Co. v. Implement Co., 47

2 130 N. Y. 421, 29 N. E. Rep. 705. Kan. 423, 28 Pac. Rep. 171 ; Watkina

3 See Manning v. Beck, 129 N. Y. Nat. Bk. v. San. Is. 47 Kan. 59
1, 29 N. E. Rep. 90; Central Nat. Pac. Rep. 618.

Bank v. Seligman, 138 N. Y. 435, 34 4 129 N. Y. 14. 16, 29 N. E. Rep. 90.

N. E. Rep. 196 ; Abegg v. Bishop, 142 8 138 N. V 135, 445, 34 N. E. Rep.

N. Y. 286, 36 N. E. Rep. 1058. See 196.

598 ASSETS EXCEEDING LIABILITIES. § 34-0

§ 340. Assets exceeding liabilities. — The question often
arises as to what classes of persons are entitled to make
assignments. Where it is clear that the assets are largely in
excess of the liabilities of the debtor, it may raise a presump-
tion of an intent to hinder and delay creditors in the collec-
tion of their just demands, and amount to 2Lprt7>ia facie case
of fraud.1 In the Missouri Court of Appeals an assign-
ment which, after reciting that the assets amounted to
three times the liabilities, clothed the trustees with dis-
cretionary power to carry on the business of the firm " for
such time as the trustees shall deem for the best interest
of the creditors, and necessary for the purpose of pre-
venting shrinkage and loss, and of closing out and liqui-
dating the same to the best advantage," was declared
voidable as tending to hinder, delay, and defraud cred-
itors.2 It is sometimes contended that, as assignments
for the benefit of creditors are generally made by embar-
rassed and insolvent debtors, such dispositions of prop-
erty can only be made by that class of persons. " This
doctrine," said Comstock, J., "has no foundation in
principle or authority. These assignments are in their
nature simply trusts for the payment of debts. The
power to create such trusts is certainly not peculiar to
insolvent men. On the contrary, it is a power more
unquestionably possessed by men who are entirely solvent.
. . . . This right of disposition, on general principles of
law and justice, was never doubtful except in case of a
debtor's inability to meet his engagements. In that con-
dition the claims of creditors are in justice paramount,
and the debtor's power to dispose of his estate, even for
their benefit, was not established without a struggle. In
short, it was the insolvency rather than the solvency of a

1 Livermore v. Northrup, 44'N. Y. -First Nat. Bank v. Hughes, 10

109 ; Guerin v. Hunt, 8 Minn 477. Mo. App. 14.
See Bates v. Ableman. Y-) Wis. 644.

§ 341 ASSIGNMENTS L'O PREVENT PRE] ERENCE.

debtor which suggested the doubt in regard to the right
of putting the whole or any part of his property in trust
for the benefit of creditors."1 As gathered from the
authorities, the vital question in these cases is, whether
the transfer is honestly made with the sole intention of
applying the property in satisfaction of the creditor,'
demands, or whether it is merely a scheme or contrivance
to place the debtor's estate, for a time, beyond the reach
of the creditors' remedies, prevent a sacrifice of the
property, secure the payment of the creditors' claims,
and ultimately realize a surplus to the assignor. In the
latter case it should clearly be regarded as a plan devised
to hinder and delay creditors. Resort by a solvent man
to the methods devised for insolvents is justly calculated
to arrest attention and excite the most searching inquiry
as to hidden motives.

§ 341. Assignments to prevent preference. — According to
the doctrine of the common law, the validity of an assign-
ment cannot be assailed simply because its effect is to
prevent a party from obtaining, by judgment and execu-
tion, a priority and preference over other creditors2
Temporary interference with particular creditors in the
prosecution of their claims by the ordinary legal remedies,
is a necessary and unavoidable incident to a just and
lawful act, which, however, in no respect impairs the
validity of the transaction.3 The rule of equity requires
the equal and ratable distribution of the debtor's prop-
erty for the benefit of all his creditors. It would be
strange indeed if the debtor, by making a disposition of
his property with the design to effectuate the application
of this rule, should be adjudged guilty of hindering and
delaying his creditors. This precise question arose in

1 Ogden v. Peters, 21 N. Y. 24. Mayer v. Helhuan, 91 U. S. 500.

5 Reed v. Mclntyre, 98 U S. 510
See Chap. XXV.

6(X) ASSIGNMENTS TO PREVENT PREFERENCE. § 341

Pickstock v. Lyster.1 In that case a debtor, being sued,
made an assignment by deed of all his effects, for the
equal benefit of his creditors. The jury having been
instructed that they must find the deed void if made with
the intent to defeat the plaintiff in his execution, returned
a verdict in his favor. But the verdict was set aside upon
the ground that the jury was misdirected. Lord Ellen-
borough held that the assignment was "to be referred to
an act of duty rather than of fraud, when no purpose of
fraud is proved. The act arises out of a discharge of the
moral duties attached to his character of debtor, to make

the fund available for the whole body, of creditors

It is not the debtor who breaks in upon the rights of the
parties by this assignment, but the creditor who breaks in
upon them by proceeding in his suit. I see no fraud ;
tlfe deed was for the fair purpose of equal distribution."
In the same case, Bayley, J., said: "It seems to me that
this conveyance, so far from being fraudulent, was the
most honest act the party could do. He felt that he had
not sufficient to satisfy all his debts, and he proposed to
distribute his property in liquidation of them ; this was
not acceded to, for the plaintiff endeavored by legal pro-
cess to obtain his whole debt, the obtaining of which
would have swept away the property from the rest of the
creditors."2 If the assignment has been fairly and legally
made, and creditors obtain a benefit from it, their rights
cannot be divested by proof of any stratagem practiced

1 3 Maule & S. :!7 1 . only object and consideration, as

• See Pike v. Bacon, 21 Me. 281 ; stated in the instrument, was to

Hauselt v. Vilmar, 2 Abb. N. C. (N. defeat the liability of tbe property to

Y.) 222, affi'd 76 X. Y. 680: Baldwin be attached, whereby some of the

v. Peet, 22 Tex. 70S ; Bowen v. Bram- creditors might obtain an unjust pref-

idge. 6 C. & !'. 140. See Solbird v. erence, and to secure it to be applied

Anderson, 5 T. R. 235. It is said, for the benefit of all the creditors,

however, in Dalton v. Currier, 40 N. the assignment was fraudulent and

II 246, thai as the avowed purpose void.
and aim <>!' tli^ assignment, and its

§ 34Ia EXCESSIVE^PREFERENCES. CHJ\

by the assignor to prevent attachments till this object
could be secured. If no attachments were issued, even
fraud practiced by the debtors to defeat such pro.
would give the creditor no lien upon the property ; not-
withstanding the grossest dishonesty of this kind, it would
remain as it was; and so long as it continued the prop-
erty of the debtors, unaffected by any attachments, no
fraudulent conduct, calculated to impose upon a creditor
and keep him at bay, would disqualify the debtor from
making a valid assignment under the statute for the
benefit of creditors generally.1 Fraud or misrepresenta
tion on the part of the assignor, entering into or affecting
the debt of a particular creditor, will not be sufficient to
annul a general assignment in favor of creditors.2

Jaques v. Greenwood,3 constitutes a possible excep-
tion to the rule above stated. A judgment had been
entered against the members of a firm by default ; they
secured a stay of proceedings upon pretence of a defense
to the action, which they failed to show, and upon an
assurance given by their attorney that no assignment
would be made. Meanwhile a preferential assignment
was filed, and the judgment-creditors were prevented
from realizing anything upon execution issued on the
judgment. The assignment was, upon this state of facts,
adjudged to be made to hinder and delay creditors in the
collection of their debts.

§ 341a. Excessive preferences.— In New York a prefer-
ence in excess of the amount allowed by statute does not
invalidate the instrument.4 Gray, J. said: ''The pur-

1 Pike v. Bacon, 21 Me. 286. 3 12 Al»b. Pr. (N. Y. 23 1.

* Kennedy v. Thorp. 51 N. Y. 174; 4 Central Nat. Rank v. Seligman,

Spencer v. Jackson, 2 R. I. 35; Lin- 138 N. Y. 435, 34 X. E. Rep. 196;

ingerv. Raymond, 12 Neb. 19, 9 N. Cutter v. Hume, 43 St. Rep. (N ^

W. Rep. 550; Horwitz v. Ellinger, 31 242, 17 N. V. Supp. 255; Rose v.

Md. 504. But compare Waverly Nat. Renton, 37 St. Rep. (N. Y.) 683, 13

Bank v. Halsey, 57 Barb. (N. Y.) 249. X. Y. Supp. 592.

602 PREFERENCE OF LABORERS. § 341b, 34IC

pose of the statute is to prevent any preference, other
than that for wages or salaries of employees, beyond one-
third of the assigned estate, and if that amount is
exceeded, the penalty is not the annihilation of the assign-
ment, but the reduction of the preference to the pre-
scribed limit.1 Where that is the condition of affairs under
a general assignment of the debtor's property, the remedy
of creditors aggrieved by their debtors' act is by an action
in aid of the assignment for the benefit of the body of
creditors, if their rights are not asserted by the
assignee.'12

§ 341b. Preferences of laborers. — In New York3 it is
provided that wages and salaries due employees shall in
assignment proceedings be preferred before any other
debt. The omission to prefer such debts will not invali-
date the assignment, as the instrument will be read in
connection with the statute.4

§ 341c. Notice to preferred creditor. — There seems to
be a struggle in the authorities over the question whether
the preference given in anticipation of making an assign-
ment may be avoided in all cases, or whether it will be
avoided only in cases where the preferred creditor had
knowledge of the impending assignment and knew of the
debtor's insolvency at the time of receiving the preference.
In a Pennsylvania case5 this language is used: "Nor
can we agree that a mere intent of a debtor, unexpressed

1 Citing Central Nat. Bank v. as amended by Chap. 328, Laws of

Seligman, 138 N. Y. 435, 34 N. E. 1884.

Rep. 196. 4 Richardson v. Tlmrber, 104 N. Y.

4Maass v. Falk, 146 N. Y. 40, 40 N. 606, 11 N. E. Rep. 133; Burley v.

E. Rep. 504. Citing Spelman v. Hartson, 109 N. Y. 656, 16 N. E. Rep.

Freedman, 130 N. Y. 421, 29 N. E. 684 ; Roberts v. Tobias, 120 N. Y. 5, 23

Rep. 765; Central Nat. Bank v. N. E. Rep. 1105 ; Dutchess County

Seligman, 138 N. Y. 435. 34 N. E. Mutual Ins. Co. v. Van Wagonen, 132

Rep. 196 ; Abegg v. Bishop, 142 N. Y. N. Y. 402, 30 N. E. Rep. 971.

286, 36 N. E. Rep. 1058. 5 Lake Shore Banking Co. v. Ful-

* See Chap. 466, Laws of 1877, § 29, ler, 110 Pa. St. 156, 1 Atl. Rep. 731.

§ 34!C NOTICE TO PREFERRED CREDITOR.

to the creditor, to give him a preference by paying or
securing the debt, although at the time he contemplated,
and soon after executed, a general assignment, operated to
defeat such preference on the ground that it is contrary
to the act of 1843. Such an intent is not unlawful and
cannot be inferred from a proper act. But even if it were,
the creditor who has a perfect right to accept payment or
security of his debt, and has not participated in the
alleged unlawful intent, should not be compelled to forfeit
his preference on that account. He at least is innocent
and may in good conscience hold the advantage he has
obtained." The New York Court of Appeals followed
this case in Manning v. Beck.1 In Berger v. Varrel-
mann^it is intimated that a want of knowledge on the
part of the creditor of the debtor's intention to prefer him
on the eve of an assignment will not save the preference.
In Spelman v. Freedman 3 the preferred creditor mani-
festly had knowledge of the insolvency and contemplated
assignment, and his preference was lost. In Central
National Bank vr. Seligman 4 the preference was cut down
to the statutory limit of one-third of the estate, but the
assignment was otherwise sustained. In Maass v. Falk6
the preference was upheld, as it appeared that the cred-
itor was innocent of any knowledge of the impending
assignment, and Manning v. Beck 6 was followed. These
two cases are recognized and re-stated in Galle v. Tode,'
but the preferred creditor in the last case did not have a
valid levy and the preference was for that reason lost.
In the lower courts in New York8 various conclusions

1 129 N. Y. 1, 15, 29 N. E. Rep. 90. 6 129 N. Y. 1, 29 N. E. Rep. 90.

3 127 N. Y. 281, 27 N. E. Rep. 1065. ' 148 N. Y. 270, 280, 42 N. E. Rep.

3 130 N. Y. 429 29 N. E. Rep. 765. 673.

See Warner v. LittlefieM, 89 Mich. 8 A.begg v. Bishop, 66 Hun (N. Y.)

329, 50 N. W. Rep. 721. 8, 20 N. Y. Supp. 810 ; reversed, 142

4 138 N. Y. 435, 34 N. E. Rep. 196. N. Y. 286. 36 N. E. Rep. 1058; London

5 146 N. Y. 42, 40 N. E. Rep. 504. v. Martin. 79 Hun (N. Y. i 239, 29 N .

604

BILL OF PARTICULARS.

§§ 34id. 342

have been formulated, but it would seem to be the pre-
vailing idea in that State at present, that an innocent
preferred creditor may hold his advantage as against a
subsequent voluntary assignment.

§ 34id. Bill of particulars. — As already shown,1 the
courts are not disposed to readily grant applications for
bills of particulars of the alleged fraudulent acts upon
which the creditor relies in attacking an assignment.2

§ 342. Threatening to make assignment. — Threatening
to make a voluntary assignment seems to constitute no
ground for provisional relief by attachment in New
York,3 provided the threat is not to make a fraudulent
assignment. " An unlawful coercion of a creditor," says
Fullerton, J., "cannot be predicated of the declaration of
an intention by a debtor to do what the law sanctions as
right and proper." 4

Y. Supp. 396 ; Johnson v. Rapalyea,
1 App. Div. (N. Y.) 463, 37 N. Y.
Supp. 540.

1 See § 162a.

5 Passavant v. Cantor, 21 Abb. N.
C. (N. Y.) 259, 1 N. Y. Supp. 574.

3 Kipling v. Corbin, 66 How. Pr.
(N. Y.) 13 ; Evans v. Warner, 21 Hun
(N. Y.) 574 ; Dickerson v. Benham, 20
How. Pr.-(N. Y.)343.

4 Spaulding v. Strang, 37 N. Y. 139;
Davis v. Howard, 73 Hun (N. Y.) 347,
26 N. Y. Supp. 194 ; Farwell v. Fur-
niss, 67 How. Pr. (N. Y.) 188. In
the case of National Park Rank v.
Wliitmore, 104 N. Y. 305, 10 N. E.
Rep. 524, Earl, J., said: "But we
think there were sufficient facts set
forth in the affidavits to give the court
jurisdiction to <k't ermine whether or
not the defendants in threatening to
make and in making the assignment,
were actuated by a fraudulent intent.
A few days before the assignment
was made the defendants reported

that they were entirely solvent and
could pay all their debts in full, and
they made a statement of their affairs
showing a large surplus of assets over
liabilities. Soon after these repre-
sentations they claimed that they
could not pay their debts in full, and
that they were insolvent, and pro-
posed to pay their creditors a compro-
mise of fifty cents on the dollar,
payable in nine, twelve and fifteen
months without security. The evi-
dence tended to show that they had
been engaged in a prosperous busi-
ness, yielding them large profits, and
they gave no satisfactory or intelligi-
ble explanation of their sudden al-
leged insolvency. They threatened
that unless their offer of compromise
was accepted they would make an
assignment, preferring Whiting, and
that then the rest of their creditors
would get little or nothing. The
efforts of the defendants, with the
co-operation of their assignee after

§§ 342a, 343 antecedent agreement.

On the other hand, there are cases tending to supporl
the view that a debtor cannot use the power he pn
of assigning his property preferentially to intimidate
creditors into abstaining from pressing the remedies
allowed by law to collect debts, without beim-- chargeable
with intent to defraud creditors.1 In Gasherie v. App
the court observed : "The law allows a debtor to assign
his property to pay his debts, and even to make prefer-
ences ; but compels him to make his selection without
any conditions for personal gain to himself ; thus he can-
not, by an assignment, hold out a hope of an extra share
of his assets, or a fear of loss of any participation therein
as a means to induce a creditor to abandon all, or any part
of his claim, or to forbear pursuing his legal remedies
therefor." This certainly embodies the safer rule.

§ 342a. Antecedent agreement. — As elsewhere shown,0'
a secret agreement to prefer a creditor is not fraudulent,
and such a preference will be upheld.4

§ 343. Construction of assignments. — In construing the
provisions of a general assignment, we are to be gov-
erned by the rules applicable to ordinary conveyances.5

the assignment, apparently to coerce solvent, to coerce a favorable conipro-

a compromise of twenty-five cents on mise from their creditors, .and thus

the dollar, their offer 'to fix it up' secure a benefit to themselves."

with a creditor afterward if he would ' See Anthony v. Stype, 19 Hun 1 N .

assent to the compromise, their se- Y.) 267; Gasherie v. Apple, 14 Abb.

lection of a foreign assignee, the rela- Pr. (N. Y.) 64 ; Livermore v. Rhodes,

tions between him and them, and the 27 How. Pr. (N. Y.) 0O6.

secret promise of a future preference, ' 14 Abb. Pr. (N. Y.) 64, 68.

are also pertinent facts. The court at 3 See § 394.

General Term, looking at no one fact, * National Park Bk. v. Whitmore,

but at all the facts, before and after 104 N. Y. 304. 10 N. E. Rep. 524 .

the assignment, could, we think, find Pierce Steam Heating Co. v. Ransom,

that the assignment was threatened 16 App. Div. (N. Y.) 260.

and made by the assignors, not solely B Townsend v. Stearns. 32 N. V.

for the honest purpose of devoting 213; Bagley v. Bowe, 105 N. Y. 171,

their assets to the payment of their UN. E. Rep. 386; Khappv. MoGowan,

just debts, but, while not actually in- 96 N. Y. 75 ; Crook v. Rindskopf, 105

6o6

CONSTRUCTION OF ASSIGNMENTS.

§343

Such a construction should be adopted as will sustain the
assignment, rather than defeat it,] especially if the effect
of overturning the instrument by reason of its preferential
surroundings results in creating a preference in favor of
a subsequent attaching creditor.2 Preferential assign
ments are not usually encouraged.3 The law tolerates
rather than approves such instruments, and they can only
be supported when they make a full and unconditional
surrender of the property to the payment of debts.4 In
Read v. Worthington,5 in construing a general assign-
ment, the court said : " There are three general rules of
interpretation, which, applied to this case, show that the

N. Y. 485, 12 N. E. Rep. 174 ; Ginther
v. Richmond. 18 Hun (N. Y.) 234.
Compare Rapalee v. Stewart, 27 N.
Y. 315.

1 Roberts v. Buckley, 145 N. Y.
323, 39 N. E. Rep. 966.

3 South Branch Lumber Co. v. Ott,
142 U. S. 622, 12 S. C. Rep. 318.

» Nichols v. McEwen, 17 N. Y. 24.
See Boardnian v. Halliday, 10 Paige
(N. Y.) 230.

4 Griffin v. Barney. 2 N. Y. 371.

5 9 Bosw. (N. Y.) 626. In Crook v.
Rindskopf, 105 N. Y. 485, 12 N. E.
Rep. 174, Ruger, Ch. J., said : "While
heretofore there has been some diver-
sity of opinion in the courts in respect
to the proper rule to be applied in the
construction of such instruments, we
think the tendency of modern de-
cisions, especially those of most ap-
proved authority, has been to adopt
the same rules which obtain in the
interpretation of other contracts.
(Knapp v. McGowan, 96 N. Y. 75, 87 ;
Rapalee v. Stewart, 27 N. Y. 310, 315;
Benedict v. Huntington, 32 X. Y. 219;
Townsend v. Steam-, 32 X. Y. 209.)
Among those rules is thai requiring
such an interpretation as will render
the instrumenl consistent with inno-
cence, and the general rules of law. in

preference to such as would impute a
fraudulent intent to the assignor, or
defeat the general purpose and intent
of the conveyance. (Bagley v. Bowe,
105 N. Y. 171, 11 N. E. Rep. 386 ; Gin-
ther v. Richmond, 18 Hun [N. Y.J 232,
234 ; Rapalee v. Stewart, 27 N. Y. 315 ;
Benedict v. Huntington, 32 N. Y.
219 ; Townsend v. Stearns, 32 N. Y.
209.) Such transfers are sanctioned
by law, and are, when made, like
other contracts, to be fairly and rea-
sonably construed with a view of
carrying out the intentions of the
parties making them. When au-
thority to do an act is conferred in
general terms it will be deemed to be
and to have been intended to be ex-
ercised within the limits prescribed
by law. (Kellogg v. Slauson, 11 N.
Y. 302.) In such cases, as in others,
doubtful and ambiguous phrases ad-
mitting of different meanings, are, in
accordance with the maxim, ' ut res
magis valeat gudm pereat,'' to be so
construed as to authorize a lawful
disposition of the property only, al-
though there may l>c general lan-
guage in the instrument susceptible
of a different construction. (Town-
send v. Stearns, 32 N. Y. 209.)"

§343 CONSTRUCTION OF ASSIGNMENTS. 607

intent on the face of the instrument was honest to cred-
itors : Firstly, that the general intent of the parties is to
govern ; secondly, that the leaning of all constructions
should be in favor of supporting, and not overthrowing
an instrument; and thirdly, that fraud is not to be pre-
sumed,1 and assignments are subject to no different
rules."2 Courts are therefore under no obligation tube
astute to destroy them,3 and an unreasonable construction
should not be given to the language used in the assign-
ment to render it void.4 The scope of the assignment is
to be gathered from the whole instrument,5 and where
two constructions are possible, that is to be chosen which
upholds and does not destroy the instrument." "A
court," said Finch, J., " may wrestle, if need be, with
unwilling words to find the truth or preserve a right
which is endangered." " It must be remembered that if
a general clause be followed by special words which
accord with the general clause, the deed should be con-
strued according to the special matter.8 The case may,
however, be taken out of its operation by the evident
intent of the parties and the clearly expressed purpose

1 Citing Kellogg v. Slauson, 15 6 Price v. Haynes, 37 Mich. 487,
Barb. (N. Y.) 56; Kellogg v. Barber, 1 Am. Insolv. Rep. 137.

14 Barb. (N. Y.) 11; Barnum v. "Coyne v. Weaver, 84 X. Y. 390.

Hempstead. 7 Paige (N. Y.) 569 ; See Townsend v. Stearns, 32 N. Y.

Kuhlman v. Orser, 5 Duer (N. Y.) 250 ; 209 ; Brainerd v. Dunning, 30 X. Y.

Bank of Silver Creek v. Talcott, 22 211 ; Campbell v. Woodworth, 24 X.

Barb. (N. Y.) 5(51. See £§ 5, 6. Y. 304 ; Benedict v. Huntington. 33

2 Citing Pine v. Rikert, 21 Barb. N. Y. 219 ; Coffin v. Douglass, 61 T< \
(N. Y.)469. 406.

3 See Turner v. Jaycox, 40 Barb. 7 Coyne v. Weaver, 84 X. Y. 390,
(N. Y.) 164 ; affi'd, 40 N. Y. 470. Es- 1 Am. Insolv. Rep. 392. A voluntary
pecially Townsend v. Stearns, 32 N. assignment act is to be liberally con-
Y. 209; Grover v. Wakeman, 11 strued. White v. Cotzhausen, 129 U.
Wend. (N. Y.) 193; Kellogg v. S. 329, 9 S. C. Rep. 309, and cases
Slauson, 11 N. Y. 302. cited.

4 Whipple v. Pope, 33 111. 334; Bank 8 Munro v. Alain , 2 I laines (N. Y |
v. Martin, 96 Tenn. 5, 33 S. W. Rep. 320. See Moore v. Griffin, 22 Me.
565, citing the text. 350; Wilkes v. Ferris, 5 Johns

Y.) 335.

6o8 OBNOXIOUS PROVISIONS. §344

of the deed.1 Thus where the instrument under con-
sideration is a general assignment of all the property and
effects of the assignor, and the intent to place all the
property of every description within the trust is apparent
in every part of the deed, although it contain a reference
to a schedule of the assigned affects as annexed, this will
not be construed as indicating an intention to qualify or
limit the comprehensive or general language, and prop-
erty not mentioned in the schedule will pass to the
trustee2 In construing assignments the rule favoring
constructions " ut res majis valeat quain pa-cat" must be
observed.3 In Kansas, it is said: "It is the creditors
who are the real parties beneficially interested in the
assignment. Unless it is apparent that they are to be
defrauded the assignment should be upheld.''4

^ 344. Explaining obnoxious provisions. — I he acts relat-
ing to assignments should be liberally construed.5 When
it is shown that the obnoxious provisions of the deed
were not made deliberately, understandingly, or even
knowingly, then the law's presumption of the intent to
defraud is rebutted. The reason ceasing, the rule ceases.
In an inquiry collateral to the deed it is competent to
show by parol that the deed was made in its objection-
able form by the mistake of the scrivener, and without
the intention and knowledge of the parties to it, and so
to rebut the presumption of fraud.0

§ 345. Assignments held void. — It would be an arduous
task to collate and cite the numerous cases in which

1 Piatt v. Lott, 17 N. Y. 478. * Marshall v. Van De Mark, 57

> Eolmes v. Hubbard, 60 N. V. 185: Kan. 310, 46 Pao. Rep. 308.

Turner v. Jaycox, 10 N. Y. 470; Emi- ■■ Farwell v. Cohen, 138 111. 216,28

-rant [nd siiv. Bank v. Roche, 93 N. N. E. Rep. 35, 32 1.1. 893.

V. 377. ' Farrow v. Hayes. :.l Md. 500, 501.

* Baum v. Pearce, 67 Mi<s. Too. 7 See Carpenter v. Buller, 8 M. & W.

So. Rep. 548 212; Parks v. Parks, 19 Md. 323;

Smith v. Davis, 49 Md. 470.

§345

A.SSIGNMEN fS HELD V( >||>.

voluntary assignments have been overturned al the in
gation of creditors or their representatives. The importanl
features of some of the cases will, however, be briefly
noticed. The instrument was avoided where it provided
that the debtor " shall have the privilege of continui
his business for one year."1 In fact, it may be regarded
as settled that any reservation of benefit to the grantor is
considered fatal to the transfer.2 Stipulating for pos
sion of the assigned property,'1 and providing for the
payment of individual debts out of copartnership assets,4
are additional illustrations of obnoxious provisions which
will annul the instrument.5 So, as we have seen, the
instrument is rendered void by intentional omissions of
assets,6 and the insertion of fictitious liabilities.7 Whether
the insertion of a provision for the continued employment
of the assignor furnishes some evidence of fraudulent

'Holmes v. Marshall, 78 N. C. 262.

* Cheatham v. Hawkins, 76 N. C.
335 ; Bigelow v. Stringer, 40 Mo. 195 ;
Griffin v. Barney, 2 N. Y. 371 ; Leitch
v. Hollister, 4 N. Y. 211 ; Mackie v.
Cairns, 5 Cow. (N. Y.) 547 ; Harris v.
Sumner, 2 Pick. (Mass.) 129; Marks
v. Bradley, 69 Miss. 1, 10 So. Rep. 922 ;
Burrill on Assignments, § 343.

3 Billingsly v. Bunce, 28 Mo. 547 ;
Reed v. Pelletier, 28 Mo. 173 ; Brooks
v. Wimer, 20 Mo. 503 ; Stanley v.
Bunce, 27 Mo. 269. See Cheatham
v. Hawkins, 76 N. C. 335 ; Harman v.
Hoskins, 56 Miss. 142 ; Joseph v. Levi,
58 Miss. 843.

4 Wilson v. Robertson, 21 N. Y. 587;
Schiele v. Healy, 61 How. Pr. (N. Y.)
73, 1 Am. Insolv. Rep. 417 ; Roe v.
Hume, 72 Hun (N. Y.) 1, 25 N. Y.
Supp. 576 ; Booss v. Marion, 129 N. Y.
541, 29 N. E. Rep. 832; Haynes v.
Brooks, 116 N. Y. 487, 22 N. E. Rep.
1083: Piatt v. Hunter, 11 Weekly
Dig. (N. Y.) 300. But see Crook v.

39

Rinkskopf, 105 N. Y. 476, [2 X. E.
Rep. 174.

5 An assignment is invalid as a con-
veyance of a, debtor's estate under t lie
insolvency statutes of New ?ori (2 R.
S., p. 16), when the preliminary pro-
ceedings upon which it is based are
void. Rockwell v. McGovern, »'>'.» N.
Y. 294, 1 Am. Insolv. Rep. 59. See
Ely v. Cooke, 28 N. Y. 365. But com
pare Striker v. Mott, 28 X. Y. 90. In
such a case the only beneficial interest
vested in the assignee is thai pre-
scribed by the statute.

6 Probst v. Welden, !•', Ark. 109 ;
Shultz v. Hoagland, 85 N. Y. 164;
Waverly Nat. Bank v. i I
Barb. (X. Y.) 249 ; White v. Benja
min. 3 Misc. (N. Y.)497, 23N. Y. Supp.
981, affi'd 150 X. Y. 258, 1 1 X. E. Rep,
956; Rothschild v. Salomon, 52 Hun
(N. Y.)486, 5 N. V. Supp. 865 . Cour-
sey v. Mmton. 132 X. 1 . 556, 30 N E
Rep. 231 ; Craft v. Bloom, 59 Miss. 69

'Talcotl v. Eess,31 Mm, V 5

6lO ASSIGNMENTS HELD VOID. § 345

intent is a point as to which the authorities differ.1 An
attempt to restore the proceeds of property fraudulently
transferred in connection with an assignment will not
purge the fraud in the instrument.2 An assignment
which directs a disposition of property different from that
prescribed by statute ;3 or that omits creditors; ' or that
is immediately preceded by a gift of a sum of money to
the assignor's wife ; 5 or that reserves a sum of money to
be used by the assignor in purchasing necessaries for
his family,6 and the transaction is not satisfactorily
explained;7 or that gives power to lease or mortgage ;8
or that directs the assignee to sell the assets and pay the
assignor the amount of his exemptions;9 or that inten-
tionally withholds property not exempt ; 10 or that omits
property;11 or that places any surplus indefinitely beyond
the reach of creditors;13 or that provides for the payment
of attorney's services to be rendered after the transfer;13
or that retains the assignor at a salary ; 14 or that prefers a
fictitious debt ; 15 or that reserves the right to the assignor to

1 Frank v. Robinson, 96 N. C. 32, 1 8 Darling v. Rogers, 22 Wend. (N.
S. E. Rep. 781. Cf. Richardson v. Y.) 483 ; Planck v. Scbermerhorn, 3
Stringfellow, 100 Ala. 416, 14 So. Barb. Ch. (N. Y.) 644.

Rep. 283. ;| King v. Ruble, 54 Ark. 118, 16 8.

2 Friedburgher v. Jaberg, 20 Abb. W. Rep. 7.

N. C. (N. Y.) 279. 10 Penzel Grocer Co. v. William, 53

3 Churchill v. Hill, 59 Ark. 54, 26 Ark. 81, 13 S. W. Rep. 736.

S. W. Rep. 378. "McMillan v. Knapp, 70 Ga. 171.

4 Stunt v. Watson, 19 Ore. 251, 24 ''Gregg v. Cleveland, 82 Tex. 1S7,
Pac. Rep. 230. 17 S. W. Rep. 777.

i Chambers v. Smith, 60 Hun (N. 13Norton v. Matthews, 7 Misc. (N.
Y.)24^, 14 N. Y. Supp. 706; Roths- Y.) 569, 28 N. Y. Supp. 265 ; Brain-
child v. Salomon. 52 Hun (N. Y.)486, erd v. Dunning. 30 N. V. 211 : Matter
5 N. Y. Supp. 865. Contra, Estes v. of Gordon, 49 Hun (N. Y.) 370, 3 N.
Gunter, 122 U. S. 450. 7 S. C. Rep. Y. Supp. 589 ; Mattison v. Judd, 59
1275. Miss. 99; Winfield Nat, Bk. v. Croco,

• Montgomery v. Goodbar, 69 Miss. 46 Kan. (i.,,.). 20 Pac. Rep. 942.

333, 1:5 So. Rep. 624; Constable v. 14 Stephens v. Regenstein, 89 Ala.

Hardenbergh, 4 App. Div. (X. Y.) 561, 8 So. Rep. 68.

L43, 38 N Y. Supp. 694. > Stafford v. Merrill, 62 Hun (N. 1 1

I av v. Grant, 53 Hun (N. V ill. 147, Hi N. Y. Supp. 467; Bickham v.

5 N. Y Supp. 910. Lake, 51 Fed. Rep. 892. In Bickham

345

ASSIGNMENTS HELD VOID.

'Ml

make future preferences ; ' or that authorizes the a
to compromise with creditors ;'-' or that delays the collection
of a debt ;3 or that provides for payment of part ol the
creditors,4 and the restoration of the surplus back to the
assignor;5 or that permits the grantor to occup) and use
the property ; H or that is accompanied by the secreting of
assets ;r or is accompanied with the abstracting and hiding
of a considerable sum of money on the eve of an assign-
ment,8 these are illustrations of fraudulent acts which by
themselves, or in combination, have been deemed sufficient
to overturn voluntary transfers for the benefit of creditors.
Falsehoods recited in an assignment calculated to deceive

v. Lake, 51 Fed. Rep. 895, the court
says : " I think it must follow that a
general assignment like the present,
providing for the payment of fictitious
or simulated debts, is fraudulent and
void for all purposes. The question
is, what are simulated and fictitious
debts? To be held such, the debt
must be fabricated and trumped up,
must have no consideration to sup-
port it, must be a pretense, and noth-
ing more. For the assignment to be
rendered void on this ground, the
conveyance, debt, or assignee debt
must have been inserted by the
grantor with a knowledge that it was
not a real and valid debt, or that he
was so careless and negligent in ascer-
taining whether or not it was a ficti-
tious debt as to estop him from deny-
ing his knowledge of its invalidity,
and not an honest mistake."

1 Boardman v. Halliday, 10 Paige
(N. Y.) 223; Averill v. Loucks, 6
Barb. (N. Y.)470 ; Kercheis v. Schloss,
49 How. Pr. (N. Y.) 284.

2 McConnell v. Sherwood, 84 N. Y.
522

3 Buell v. Rope, 6 App. Div. (N. Y.)
115, 39 N. Y. Supp. 475.

4 Bickham v. Lake, 51 Fed. Rep. 892.

5 Sutherland v. Bradner, 116 N. V.
410, 22 N. E. Rep. 554. In Knapp v.
McGowan, 96 N. Y. 85,thecourl says :
" An insolvent, and even a solvent
debtor cannot convey all his property
to trustees to pay a portion of his
creditors, with a provision that the
surplus shall be returned to him,
leaving his other creditors unprovided
for ; because such a conveyance ties
up his property in the hands of his
trustees, places it beyond the reach of
his creditors by the ordinary process
of the law and thus hinders and de-
lays them, and is, therefore void asto
the creditors unprovided for."

6 Saunders v. Waggoner, 82 Va.
316.

1 Newman v. Clapp, 20 Misc. (N,
Y.) 68; Coursey v. Morton, 132 N Y
556, 30 N. E. Rep. 231 : Shultzv. Boag-
land. 85 N. Y. 464 : Rothschild v.
Salomon, 52 Hun (N. Y.) 486, 5 X.
Y. Supp. 865.

«Coursey v. Morton, L32 X. V :>",r,.
30 N. E. Rep. 231; Shultz v. Hoag
land, 85 N. V. 464 ; Rothschild v.
Salomon, 52 Hun (N. Y.) 186, 5 N. V.
Supp. 865.

6l2 INSUFFICIENT GROUNDS OF ATTACK. § 345a

creditors constitute notice to the assignee of the assignor's
fraudulent intent.1

§ 345a. Insufficient grounds of attack. — A cancellation by
a surviving partner, by agreement, on the eve of making
an assignment, of a claim against his son, who had
rendered services to the firm of the reasonable value of
the cancelled claim, will not invalidate an assignment;2
nor is the instrument rendered void by bad management
of the assignee ; 3 nor by the fact that a debt preceding
the assignment was fraudulently contracted ; 4 nor by the
fact that the assignor expected to compromise with his
creditors;5 nor, in Texas, by the fact that the schedule
embraces a debt that cannot be paid ratably with the
claims of other creditors;0 nor because the insolvent's
wife took a small amount of supplies from the assignor's
store;7 nor by the insolvency of the assignee,8 though
certainly such a transfer should be scrutinized ; nor by
the failure to comply with a statute directing that the
residence, kind and place of business, etc.. of the assignor

'Douglass Merch. Co. v. Laird, 37 that a debtor assigns without at least

W. Va. 687, 17 S. E. Rep. 188. some expectation of this character."

'Cutter v. Hume, 62 Hun(N. Y.) 6 Tracy v. Tuffly, 134 U. S. 225, 10

622, 17 N. Y. Supp. 255 ; affi'd 138 N. S. C. Rep. 527.

Y. 630, 33 N. E. Rep. 1084. ' Estes v. Gunter, 122 U. S. 450, 456.

8 Bradley v. Bischel, 81 Iowa 80, 46 7 S. C. Rep. 1275. The court says that

N. W. Rep. 755. .Mrs. Gunter " was a clerk in the store

* South Branch Lumber Co. v. Ott, and took the money from the drawer

142 U. S. 622, 12 S. C. Rep. 318. in the course of business, and supplies

' Moore v. Stege, 93 Ky. 27, 18 S. for Gunter's house were generally
W. Rep. 1019. In this case, the court taken from the store. It was quite
says : ' ' His evidence shows, however, natural, therefore, that he should take
that he was then conducting his busi- needed supplies before the assign-
in sss honestly, and the most that can ment was executed, There is no evi-
be said, when all the testimony is dence that the supplies were excessive
considered, \h, that when the assign- or unreasonable, but even if they
ment was made he had an expectation, were, that fact would constitute no
;i hope <>f compromising with his ground for Betting the subsequent
creditors. This does not vitiate the assignment aside."

pnment. If so, <>m. would rarely 8Cohn v. Ward, 32 W. Va. 40, 9S.

be upheld. It is, probably, seldom E. Rep. 41.

§345b>346 DEFEATED CREDITOR ENTITLED TO DIVIDEND. I

shall be stated;1 nor by omitting preferred claims of
laborers;2 nor by a mistake in the inventory of the prop-
erty, or in the assignment with respect to the description
of the debt, or its amount or form, in the absence of
actual fraud ;3 nor because a preference is made in order
to carry out an antecedent promise to prefer ; ' nor by
withdrawing a small sum of money to apply to family
wants;5 nor by mistakes as to individual and copartner-
ship debts ; G nor by reserving exempt property.7

§ 345b. Defeated creditor entitled to dividend. — A cred-
itor who fails to overturn an assignment is not precluded
from sharing in a distribution of the assigned estate.8
And a judgment-creditor will not forfeit or lose his honest
judgment against the debtor because he may have advised
the latter to cheat another creditor.9

§ 346. Foreign assigments. — The rule generally obtains
that the statute laws of a particular State regulating
assignments for the benefit of creditors, do not apply to

1 Dutchess County Mutual Ins. Co., head Banking Co. v. Whitaker, 110
etc. v. Van Wagonen, 132 N. Y. 398, N. C. 345, 14 S. E. Rep. 920.

30 N. E. Rep. 971. 8 Mills v. Parkhurst, 126 N. Y. 89,

2 Richardson v. Thurber, 104 N. Y. 26 N. E. Rep. 1041.

606, 11 N. E. Rep. 133. 9 Fidler v. John, 178 Pa. St. 117, 35

3 Roberts v. Buckley, 145 N. Y. 223, Atl. Rep. 976, where the court Bays :
39 N. E. Rep. 966. SeeGoodbar Shoe " If the owner of the honest judgment
Co. v. Montgomery, 73 Miss. 73, 19 had a valid lien, which is not and
So. Rep. 196. cannot be disputed, by what con-

4 Smith v. Munroe, 1 App. Div. (N. ceivable process of reasoning did he
Y.) 77, 37 N. Y. Supp. 62; National lose it? If he had il before he advised
Park Bank v. Whitmore, 104 N. Y. the fraudulent conveyance how did
304, 10 N. E. Rep. 524. See § 394. he lose it because of that ad\ ice? H

5 Vietor v. Nichols, 13 St. Rep. (N. it was a good judgment before the
Y.)461, affi'd 114 N. Y. 617, 20 N. E. advice was given, because it was
Rep. 880 ; Birdsall W. & P. Mfg. Co. given for a valuable consideration, it
v. Schwarz, 3 App. Div. (N. Y.) 301, was a good judgment thereafter be-
38 N. Y. Supp. 368. cause it was still a judgment which

6 Gorham v. Innis, 115 N. Y. 87, 21 was given for a valuable consideration.
N. E. Rep. 722. Therefore, it was still a good judg-

7 Haynes v. Hoffman, 46 S. C. 157, ment. The fact of good considers
24 S. E. Rep. 103; Adler v. Cloud, 42 tion was precisely the Bame ati

S. C. 272, 20 S. E. Rep. 393 ; More- before the advice was given."

614

FOREIGN ASSIGNMENTS.

§346

foreign assignments ; * such transfers, if valid by the law
of the place where made, are valid everywhere,2 and will
protect the property from attachment,3 except perhaps as
regards creditors who are residents of the particular State
in which it is sought to enforce the provisions of the
instrument. As the foreign assignment is allowed
to operate partially as a matter of comity, the court some-
times refuse to enforce it to the prejudice of their own
citizens,4 and seize upon the absence of local require-
ments as a means of accomplishing that result.5 In New
York State no discrimination is permitted between resi-
dents of that State and of other States.6 Manifestly an
assignment will not take effect to pass title to personal
property situated in another State, in express contraven-
tion of the statute law of that State.7 The distinction
should not be overlooked between assignments by act of
the party and those which are involuntary,8 or by oper-

1 Ockeririan v. Cross, 54 N. Y. 29 ;
Chafee v. Fourth Nat. Bank of N. Y.,
71 Me. 524; Bentley v. Whitteraore,
19 N. J. Eq. 4G2.

'See Benevolent Order, etc. v.
Sanders, 28 W. N. C. (Pa.) 321 ;
Woodward v. Brooks, 128 111. 222, 30
N. E. Rep. 685.

3 Ockerman v. Cross, 54 N. Y. 29 ;
Bholen v. Cleveland, 5 Mason 174 ;
Barth v. Backus, 140 N. Y. 234, 35 N.
E. Rep. 425.

* Chafee v. Fourth Nat. Bank, 71
Me. 534. See Matter of Waite, 99 N.
Y. 433, 3 N. E. Rep. 440. Compare
Train v. Kendall, 137 Mass. 366.

6 See Faulkner v. Hyman, 142
Mass. 53, GN. E. Rep. 846; Bentley
v. Whittemore, 19 N. J. Eq. 462;
Bacon v. Home, 123 Pa. St. 452, 16
Atl. Rep. 794; St. -el v. Goodwin, 113
Pa. St. 288, 6 \tl. Rep. 49.

Bibernia Nat. Bank v. Laconibe,
84 N. Y. 367 ; Vanderpoel v. Gorman,

140 N. Y. 563, 573, 574, 35 N. E. Rep.
932. See Paine v. Lester, 44 Conn.
196 ; Hanford v. Paine, 32 Vt. 442.

1 Warner v. Jaffray, 96 N. Y. 248.
In Hallgarten v. Oldham, 135 Mass.
1, 7, the court says : " When a sale,
mortgage, or pledge of goods within
the jurisdiction of a certain State is
made elsewhere, it is not only com-
petent, but reasonable, for the State
which has the goods within its power
to require them to be dealt with in the
same way as would be necessary in a
domestic transaction, in order to pass
a title which it will recognize as
against domestic creditors of the
vendor or pledgor."

8 Schroder v. Tompkins, 58 Fed.
Rep. 675; Smith's Appeal, 104 Pa.
St. 381 ; Weider v. Maddox, 66 Tex.
372, 1 S. W. Rep. 168; Walters v.
Whitlock, 9 Fla. 86 ; Barth v. Backus,
140 N. Y. 235, 35 N. E. Rep, 425.

§ 346a

ASSIGNMENTS BY CORPORA! I

ation of law. The latter class of conveyances arc gen-
erally founded upon statutory provisions, and have no
extra-territorial force.1 A conveyance of personal prop-
erty, valid according to the lex loci contractus, is ordi-
narily binding and effectual to transfer title when
located.2 This, however, is a line of inquiry foreign to
our subject.

§ 346a. Assignments by corporations. — Where charter
restrictions or statutory inhibitions do not exist, a corpor-
ation may make a general assignment.3 Such a transfer
was formerly not possible to carry out under the statute
in New York,4 but the rule in that State has been
changed5 In Vanderpoel v. Gorman,'1 Peckham, J., said:
" There can be no doubt that an insolvent corporation
could at common law make a general assignment in trust
to an assignee for the benefit of its creditors."7

1 See Hutcheson v. Peshine, 16 N.
J. Eq. 167 ; Kelly v. Crapo, 45 N. Y.
86 ; reversed, Crapo v. Kelly, 16
Wall. 610. See § 294.

- Schroder v. Tompkins, 58 Fed.
Rep. 675 ; Barnett v. Kinney, 147 U.
S. 476, 13 S. C. Rep. 403; Catlin v.
Wilcox Silver Plate Co., 123 Ind. 477,
24 N. E. Rep. 250 ; Barth v. Backus,
140 N. Y. 234, 35 N. E. Rep. 425.

3 Albany & R. Iron & S. Co. v.
Southern Agricultural Works. 76 Ga.
135 ; De Ruyter v. St. Peter's Church,
3 Barb. Ch. (N. Y.) 124, affi'd 3 N. Y.
238 ; Haxtun v. Bishop, 3 Wend. (N.
Y.) 13 ; Bowery Bank Case, 5 Abb.
Pr. (N. Y.) 415; Hill v. Reed, 16
Barb. (N. Y.)280 ; DeCamp v. Alward,
52 Ind. 473; Nelson v. Edwards, 40
Barb. (N. Y.) 279; Union Bank of
Tenn. v. Ellicott, 6 Gill & J. (Md.)
363 ; Vanderpoel v. Gorman, 140 N.
Y. 568, 35 N. E. Rep. 932 ; Home
Bank v. Brewster & Co., 17 Misc. (N.
Y.) 442, 41 N. Y. Supp. 203 ; Savings
Bank of New Haven v. Bates, 8 Conn.

505 ; Coats v. Donnell. 94 N. V. 178;
Chew v. Ellingwood, 86 Mo. 27:!;
Lenox v. Roberts, 2 Wheat. 37:'» ;
Warner v. Mower, 11 Vt. 385 ; Flint
v. Clinton Co.. 12 \. II 431 ; Ex
parte Conway, 4 Ark. :i04 ; Catlin v.
Eagle Bank, 6 Conn. 233 : Ardesco
Oil Co. v. North Am. Oil & M. I
Pa. St. 375. A transfer by officers of
an insolvent corporation conveying
all its property to another corporation
without providing for debts and
dividing the bonds received in pay-
ment among the stockholders and
officers is fraudulent as to the vendor.
Fort Payne Bank v. Ala. Sanitarium,
103 Ala. 358. 15 So. Rep. 618.

4 Chap. 564, Laws of 1890, § 48,

5 Vanderpoel v. Gorman. 140 N. Y
568, 35 N. E. Rep. 932 ; Borne Bank v.
Brewster & Co , 17 Misc. (N. Y.) I1J
41 N. Y. Supp. 203.

6 140 N. Y. 563, 568, 35 N. E. Rep.
932.

7 Franzen v. Zimmer, 90 Hun (N.
Y.) 103, 35 N. Y. Supp. 612.

6l6 CONTINGENT CREDITORS. § 346b

Where assignments by corporations are allowed they
are subject to attack " upon substantially the same
grounds as in the cases of similar transfers by individ-
uals." l Hence a conveyance by an insolvent corporation
to one of its directors, who assumed the debts and agreed
to pay them within eighteen months is voidable.2

A corporation, like an insolvent person, may permit
its creditors to take hostile proceedings and allow those
to obtain preferences who are the most vigilant.3

But the ramifications of corporation law cannot be
followed in detail.

§ 346b. Contingent creditors. — The fact that the assignor
has incurred obligations that are of a contingent nature
at the date of the assignment will not preclude provision
being made for the protection of such contingent creditors
out of the assigned estate.4

1 In Cole v. Millerton Iron Co. 133 drews, 145 N. Y. 443, 40 N. E. Rep.
N. Y. 164, 30 N. E. Rep. 847, it was 214.

held that a transfer by a corporation 4 Brainerd v. Dunning, 30 N. Y.

of all its assets, which lias the effect 211 ; Griffin v. Marquardt, 21 N. Y.

of terminating the regular business of 121 ; Keteltas v. Wilson, 36 Barb. (N.

the corporation is illegal as against Y.) 298; Cunningham v. Freeborn,

creditors. 11 Wend. (N. Y.) 241 ; Webb v.

2 Berney Nat. Bank v. Guyon, Thomas, 49 St. Rep. (N. Y.) 462,
(Ala. 1896) 20 So. Rep. 520. 21 N. Y. Supp. 69 ; Read v. Worth-
s'Varnum v. Hart, 119 N. Y. 105, ington, 9 Bosw. (N. Y.) 628.

23 N. E. Rep. 183 ; French v. An-

CHAPTER XXII.

FRAUDULENT CHATTEL MORTGAGES.

§347.
348.
349.
350.
351.
352.
353.
354.

355.

Chattel Mortgages.

y Rule in Robinson v. Elliott.

Proof extrinsic to the instrument.
Comments in the cases.

j- Opposing rule and cases.

Discussion of the principle in-
volved.

Authorizing sales for mort-
gagee's benefit.

§ 356. Sales upon crc lit.
356a. Secret trust.
356t». Change of possession.

357. Possession — Independent valid

transactions.

358. Right of revocation — R«

tions.

359. Rule as t<> consumable prop-

erty.
359m. Distinct claims.

§ 347. Chattel mortgages.— Questions affecting the valid-
ity of chattel mortgages as regards creditors are so largely
dependent upon and regulated by local statutory pro-
visions, that the general principles governing the subject
can be discussed with but little satisfaction. These
instruments are in some respects a higher security than
a mortgage on land. Such mortgages are, as a general
rule, valid between the parties,1 even though not

1 Stewart v. Piatt, 101 U. S. 731 ;
Hackett v. Manlove, 14 Cal. 85. See
Lane v. Lutz, 1 Keys (N. Y.) 213 ;
Smith v. Acker, 23 Wend. (N. Y.) 653.
See Chap. XXVI. In Stewart v.
Piatt, 101 U. S. 739, the court said:
"Although the chattel mortgages, by
reason of the failure to file them in
the proper place, were void as against
judgment-creditors, they were valid
and effective as between the mort-
gagors and the mortgagee. Lane v.
Lutz, 1 Keys (N. Y.) 213; Wescott
v. Gunn, 4 Duer (N. Y.) 107 ; Smith v.
Acker, 23 Wend. (N. Y.) 653. Sup-
pose the mortgagors had not been

adjudged bankrupts; and there bad
been no creditors, subsequent pur-
chasers, or mortgagees in good faith
to complain, as they alone might, of
the failure to file the mortga
the towns where the mortf
respectively resided, it cannot be
doubted that Stewart, in thai event,
could have enforced a lien upon the
mortgaged property in satisfaction of
his claim for rent. The assignee took
the property subject to such equities,
liens, or incumbrances as would have
affected it, had no adjudication in
bankruptcy been made. While th<
rights of creditors whose executions

6l8 CHATTEL MORTGAGES. § 347

recorded ; l and recording the instrument is made by
statute in some States a substitute for actual change of
possession, and repels the imputation of fraud which
would arise from the retention of possession by the
vendor.2 The creditor must keep in mind in taking a
chattel mortofaee to secure his debt that he cannot use his
claim for any other purpose than his own indemnity.3
Taking a mortgage in excess of the debt,4 or upon all the
property of the debtor of a value greatly in excess of the
debt;5 making an unfair sacrifice at the sale so as to
prevent a surplus;6 taking the mortgage, among other
things, to hinder other creditors;7 or reciting an over
statement of the consideration ;8 or obtaining the instru-
ment under duress 9 or altering a mortgage ; 10 are illustra-
tions of acts and combinations of facts which will overturn
such a security. Many questions concerning the validity of
these instruments are to be found in the reports, only the
more prominent of which will be noticed. Naturally, from

preceded the bankruptcy were prop- will not be considered a badge of

erly adjudged to be superior to any fraud. Stevens v. Breen, 75 Wis.

which passed to the assignee by 595, 44 N. W. Rep. 645.

operation of law, the balance of the 3 Hughes v. Epling, 93 Va. 424 ; 25

fund, after satisfying those execu- S. E. Rep. 105. See State v. Busch,

tions, belonged to the mortgagee, and 38 Mo. App. 440.

not to the assignee for the purposes of 4 Patrick v. Riggs, 105 Mich. 610,

his trust. The latter representing 63 N. W. Rep. 532.

general creditors, cannot dispute such 5 Thompson v. Richardson Drug Co.,

claim, since, had there been no ad- 33 Neb. 714, 50 N. W. Rep. 948 ;

judication, it could not have been dis- Brown v. Work, 30 Neb. 800, 47 N.

puted by the mortgagors." SeeHau- W. Rep. 192.

selt v. Harrison, 105 U. S. 406. 6 Collingsworth v. Bell, 56 Kan. 342,

1 Stewart v. Piatt, 101 U. S. 731 ; 43 Pac. Rep. 252.

Lane v. Lutz, 1 Keyes (N. Y.) 213 ; 7 Weber v. Mick, 131 111. 526, 23 N.

Pyeatt v. Powell, 10 U. S. App. 200, E. Rep. 646 ; McCreary v. Skinner,

51 Fed. Rep. 551, 2 C. C. A. 367. 83 Iowa 366, 49 N. W. Rep. 986.

'' See Bullock v. Williams, 16 Pick. « Kalk v. Fielding, 50 Wis. 339, 7

(Mass.) 33: Feurt v. Rowell, 62 Mo. N. W. Rep. 296.

524 ; Hughes v. Cory, 20 Iowa 403, » Lightfoot v. Wallis, 12 Bush (Ky.)

and cases cited ; Spraightsv. Hawley, 498. See Bane v. Detrick, 52111. 19.

39 N. Y. 441. A reasonable delay by 10 Bowser v. Cole, 74 Tex. 222, 11 S.

the mortgagee in taking possession W. Rep. 1131.

§348

ROBINSON V. ELLIOTT.

619

what precedes, a mere creditor-at-large cannot assail a
chattel mortgage.1

§348. Rule in Robinson v.Elliott. — The Supreme Court
of the United States, in Robinson v. Elliott,2 committed
itself to the doctrine that an instrument which provided
for the retention of the possession of the mortgaged
personalty by the mortgagor, accompanied with the power
to dispose of it for his own benefit in the usual course of
trade, was inconsistent with the idea of a security, or the
nature and character of a. mortgage, and of itself furnished
a pretty effectual shield to a dishonest debtor, and con-
sequently should be regarded as voidable as to creditoi

1 Button v. Rathbone, 126 N. Y.
190, 27 N. E. Rep. 266; Jones v.
Graham, 77 N. Y. 628.

2 22 Wall. 513.

3 See Worseley v. Dernattos, 1 Burr.
467, per Lord Mansfield ; Edwards v.
Harben, 2 T. R. 587 ; Bannon v. Bow-
ler, 34 Minn. 418, 26 N. W. Rep. 237 ;
Paget v. Perchard, 1 Esp. 205, per
Lord Kenyon ; Lang v. Lee, 3 Rand.
(Va.) 410 ; Addington v. Etheridge,
12 Gratt. (Va.) 436; McLachlan v.
Wright, 3 Wend. (N. Y.) 348 ; Edgell
v. Hart, 9 N. Y. 213 ; Brackett v.
Harvey, 91 N. Y. 214 ; Potts v. Hart,
99 N. Y. 168, 1 N. E. Rep. 605;
American Oak Leather Co. v. Fargo,
77 Fed. Rep. 671 ; Hangen v. Hache-
meister, 114 N. Y. 566, 21 N. E.
Rep. 1046 ; Mandeville v. Avery,
124 N. Y. 376, 26 N. E. Rep. 951 ;
Sparks v. Brown, 46 Mo. App. 530 ;
Sauer v. Behr, 49 Mo. App. 86;
Russell v. Rutherford, 58 Mo. App.
550 ; Cook v. Bennet, 60 Hun (N. Y.)
8, 14 N. Y. Supp. 683 : Gallagher v.
Rosenfield, 47 Minn. 507, 50 N. W.
Rep. 696 ; Randall v. Carman, 89 Hun
(N. Y.) 86, 35 N. Y. Supp. 53 ; Sberwin
v. Gaghagen, 39 Neb. 238, 57 N.W . Rep.
1005 ; State v. Busch, 38 Mo. App. 442;

Martin-Perrin Merc. Co. v. Perkins, <i:;
Mo. App. 310 ; Pabst Brewing Co. v.
Butchart (Minn.) (i!) X. W. Rep.
809; Chapman v. Sargent, 6 Col A.pp.
438, 40 Pac. Rep. 849; Coburn v.
Pickering, 3 N. H. 415 ; Bank of
Leavenworth v. Hunt, 1 1 Wal. 391 ;
Coolidge v. Melvin, 42 X. II 520;
Collins v. Myers, 16 Ohio 517 ; ( !hop-
hard v. Bayard, 4 Minn. .V.;! ; Eorton
v. Williams, 21 Minn. 187 ; Bishop v.
Warner, 19 Conn. 400; Place v. Lang-
worthy, 13 Wis. 629; Blakeslee \.
Rossman, 43 Wis. 116 : Smith v. Ely,
10 N. B. R. 553 ; In re Cantrell, 6
Ben. 482 ; In re Kahley, 'J Biss. 388 ;
Southard v. Benner, 72 X. Y. I.' I Ex
parte Games, L. R. 12 Ch. 1>. 314
Cheatham v. Hawkins, 80 N. ('. 104;
Tennessee Nat. Bank v. Ebbert, '•»
Heisk. (Tenn.) 154; Joseph v. Levi,
58 Miss. 815; Harman v. Hoskins, 56
Miss. 142; Dunning v. Mead, '.til III.
379; Goodheart v. Johnson, 88 111. 58 :
Davenport v. Foulke. 0* I ml. 882 :
Barnet v. Fergus, 51111.352; Davis
v. Ransom, 18 111. 396; Simmons v.
Jenkins, 76 111. 479 ; Mbbley v. Lette,
61Ind. 11 : Garden v. Bodwing, 9 W.
Va. 122 : City Nat. Bank v. Goodrich,
3 Col. 139; Sparks v. Mack, 31 Ark.

620

ROBINSON V. ELLIOTT.

348

Davis, J., said: "In truth, the mortgage, if it can be so
called, is but an expression of confidence, for there can be
no real security where there is no certain lien. What-
ever may have been the motive which actuated the parties
to this instrument, it is manifest that the necessary result
of what they did do was to allow the mortgagors, under
cover of the mortgage, to sell the goods as their own, and
appropriate the proceeds to their own purposes ; and this,
too, for an indefinite length of time." : The same court,
following a State decision, was, later, inclined to uphold a
mortgage of this kind, where the State from which the ap-
peal was taken tolerated such an arrangement.2 That the
courts should look with any favor upon such instruments
seems extraordinary, but the principle of Robinson v.
Elliott is certainly not gaining ground. It must be remem-

6G6 ; Orton v. Orton, 7 Ore. 378 ;
Peiser v. Peticolas, 50 Tex. 638 ; Scott
v. Alford, 53 Tex. 82 ; Weber v; Arm-
strong, 70 Mo. 217 ; Tallon v. Ellison,
3 Neb. 63 ; McCrasly v. Hasslock, 4
Baxt. (Tenn.) 1; Catlin v. Currier, 1
Sawyer, 7 ; Orman v. English & S.
Merc. Inv. Trust, 9 C. C. A. 356, 61
Fed. Rep. 38 ; Pierce v. Wagner
(Minn.) 66 N. W. Rep. 977 ; Bank v.
Brier, 95 Tenn. 331, 32 S. W. Rep.
205 ; American Oak Leather Co. v.
Wyeth Hardware & Mfg. Co.. 57 Mo.
App. 297; Paxton v. Smith, 41 Neb. 56,
59 N. W. Rep. 690; Eckman v.
Munnerlyn, 32 Fla. 367, 13 So. Rep.
922 ; First Nat. Bank v. Wittich, 33
Fla. 681, 15 So. Rep. 552 ; Rock Island
Nat. Bank v. Powers, 134 Mo. 444, 34
S. W. Rep. 869, 35 Id. 1132. See " An
American Phase of Twyne's Case,'"
by James O. Pierce, Esq., 2 Southern
L. Rev. (X. S.) 731; "Fraudulent
Mortgages of Merchandise," by Leon-
ard A. Jones, Esq., 5 Southern L.
Rev. (N. S.) 617; " A Reply," by Mr.
Pierce, 0 Southern L. Rev. (N. S.)

96; " Frauds in Chattel Mortgages,"
by Mr. Jones, 7 Southern L. Rev.
(N. S.) 95 ; Reviewed by Ed. J. Max-
well. Esq., 7 Southern L. Rev. (N.
S.) 205. This discussion relates
mainly to Robinson v. Elliott, 22
Wall. 513. The controversy gave
birth to a work entitled " Fraudulent
Mortgages of Merchandise, a Com-
mentary on the American Phases of
Twyne's Case, by James O. Pierce,"
F. H. Thomas & Co., 1884. The posi-
tions taken by Mr. Pierce in the Law
Review, in support of Robinson v.
Elliott, are re-stated in this volume
with commendable clearness and
force, and the different authorities
in State and Federal tribunals bearing
upon the question are collated and
discussed down to that date.

1 Robinson v. Elliott, 22 Wall. 525.
See Means v. Dowd, 128 U. S. 284, 9
S. C. Rep. 65 ; Etheridge v. Sperry,
139 U. S. 266, 11 S. C. Rep. 565.

2 Etheridge v. Sperry, 139 U. S.
266, 11 S. C. Rep. 565.

§ 349 ROBINSON V. ELLIOTT.

bered that, in Twyne's Case, where the transfer was
avoided, one of the objections urged against the tran
tion was that the debtor used the goods as his own.1 Mr.
Pierce observes: "A mortgage or conveyance of this
kind presents a false appearance, is only a pretence
as a mortgage, is calculated to deceive, cannot fail
to deceive if it be operative, furnishes unusual facili-
ties for fraud, reserves benefits to the grantor, and
prejudices other creditors. When it thus appears that
the transaction is, in its result, so fraudulent, and
injurious to creditors, that few transactions could be more
so, even where an intent to defraud exists so as to bring
them within the statute of 13 Eliz., the courts are as
ready to adjudge the transaction fraudulent as they would
be if a fraudulent intent appeared.""

§ 349. _ In Edgell v. Hart,3 the license to sell was
inferred from a written schedule attached to the instru-
ment. Chief-Justice Denio held, with the concurrence of
a majority of the court, that " the existence of such a
provision out of the mortgage or in it, would invalidate
it as matter of law, and that where the facts are undis-
puted this court should so declare."4 " Such an agree-
ment," said Finch, J., " opens the door to fraud, and
permits the mortgagor to use the property for his own
benefit, utilizing the mortgage as a shield against other
creditors."5 The debtor, in the language of Kent,
''sports with the property as his own." 6 A debtor can-

1 See § 22. 4 Compare Gardiner v. McEwen, l'.i

5 Pierce on Fraudulent Mortgages N. Y. 123; Mittnacht v. Kelly, 3

of Merchandise, § 122. Compare Keyes (N. Y.) 407 ; Russell v. Winne,

Birmingham Dry Goods Co. v. Roden, 37 N. Y. 591.

110 Ala. 511 ; s. C, sub nom. Binning- B Brackett v. Harvey, 91 N. Y. 228,

ham Dry Goods Co. v. Kelso, 18 So. 224.

Rep. 135 ; Lukins v. Aird, 6 Wall. 78. 6 Riggs v. Murray, 2 Johns. Ch. (N.

3 9 N. Y. 213. See Hangen v. Y.) 565.

Hachemeister, 114 N. Y. 566, 21 N. E.

Rep. 1046.

622 ROBINSON V. ELLIOTT. § 349

not as against creditors be allowed to make an apparently
valid transfer of property so that it shall continue a source
of profit to him.1 In Mittnacht v. Kelly,3 Parker, J.,
observed: "The mortgaging the whole stock in trade,
.... with the increase and decrease thereof, and the pro-
viding for the continued possession of the mortgagor, can
have no other meaning than that the mortgagee should
all the time retain a lien on the whole stock by way of
mortgage, the mortgagor making purchases from time to
time, and selling off in the ordinary manner, the intent
being not to create an absolute lien upon any property,
but a fluctuating one, which should open to release that
which should be sold and take in what should be newly
purchased. This is just such an arrangement as was held
in Edcrell v. Hart3 to render the mort^aore void. The
case cannot be distinguished from that, and the law as
pronounced in that case, must be held applicable to this."
In Griswold v. Sheldon,4 Bronson, C. J., says: "There
would be no hope of maintaining honesty and fair dealing
if the courts should allow a morto-a^ee or vendee to sue-
ceed in a claim to personal property against creditors and
purchasers, after he had not only left the property in the
possession of the debtor, but had allowed him to deal
with and dispose of it as his own." "To attempt," says
Mr. Pierce,5 "to fasten a valid and certain lien upon
goods which may at any moment, at the will of the
debtor, fly out from under the lien, is to attempt a legal
and moral impossibility." It is a sham, a nullity — a
mere shadow of a mortgage, only calculated to ward off

1 Birmingham Dry Goods Co. v. 53 ; Mandeville v. Avery, 124 N. Y.

Roden, lin Ala. 511; s.c.submon. Bir- 376, 26 N. E. Rep. 951; Barton v.

mingham Dry Goods Co. v. Kelso, 18 Kitlin^ton, 128 Mo. 164, 30 S. W. Rep.

So. Rep. 135 ; Lukins v. Ainl, 0 Wall. 514.

7^ *4 N. Y. 590.

• :; Keyea (N. V . 1 407. 5 Pierce on Fraudulent Mortgages

9 N. Y. 213; Randall v. Carman, of Merchandise, § 125.
89 Hun (N. Y.) 86, 35 N. Y. Supp.

§ 35° EXTRINSIC PROOF.

other creditors — a conveyance in trust for the benefit of
the person making it, and therefore void as against
creditors.1

§350. Proof extrinsic to the instrument. — The rule, as we
have seen, is the same, whether the agreement is re< ited
in the instrument or is extrinsic to it.~ Thus Allen, f.
remarked : u Whether the agreement is in or out of the
mortgage, whether verbal or in writing, can make no dif.
ference in principle. Its effect as characterizing the trans-
action would be the same. The difference in the modesof
proving the agreement cannot take the sting out of the fact
and render it harmless. If it is satisfactorily established,
the result upon the security must be the same." : When
not embodied in the instrument the agreement to sell must
be proved. The mere expectation of one party or the
other that this right is to be given is not enough ; there
must be a conscious assent of both.4 In Potts v. Hart.'
Earl, J., said : <;A mortgage thus given is fraudulent and
void as to creditors because it must be presumed that at
least one of the purposes, if not the main purpose for giving
it, was to cover up the mortgagor's property and thus hin-
der and delay his other creditors. It matters not whether
the agreement that the mortgagor may continue to
deal in the property for his own benefit is contained in
the mortgage or exists in parol outside of it ; and where
the agreement exists in parol, it matters not whether it

1 Catlin v. Currier, 1 Sawyer 12 ; 623; Bo wen v. Clark, 1 Bisa 128; In
Orman v. English & S. Merc. Inv. re Kahley, 2 Bias. 383 ; ZnreCantrell
Trust, 9 C. C. A. 356, 61 Fed. Rep. 6 Ben. 482; Smith v. Ely, 10 X. B R.
38. A provision requiring the mort- 553 ; Re Kirkbride, 5 Dill. 116 ; < atlin
gagor in possession to replenish the v. Currier, 5 Fed. < 'as. 300, 1 Saw-
stock will not render such mortgage yer 7.

valid. Greenebaum v. Wheeler, 90 'Southard v. Benner, 72 N. 5

111. 296 ; Gallagher v. Rosenfield, 47 S. P. Russell v. Winne, 37 N. 5

Minn. 507. 50 N. W. Rep. 696. ' Brackett v. Harvey, !U N. Y 224.

- Edgell v. Hart, 9 N. Y. 213; Mc- 5 99 N. Y. 172.
Lean v. Lafayette Bank, 3 McLean

624 COMMENTS IN THE CASES. §351

is valid, so that it can be enforced between the parties or
not ; for whether valid or invalid, it is equally effectual
to show the fraudulent purpose for which the mortgage
was given, and the fraudulent intent which characterizes
it. It is always open to creditors to assail, by parol evi-
dence, a mortgage or a bill of sale of property as fraudu-
lent and void as to them. While between the parties
the written contract may be valid, and the outside parol
agreement may not be shown or enforced, yet it may be
shown by creditors for the purpose of proving the fraudu-
lent intent which accompanied and characterized the giv-
ing of the written instrument. It is usually difficult to
prove by parol an agreement in terms that the mortgagor
may continue to deal in the property for his own benefit.
Parties concocting a fraudulent mortgage would not be
apt to put the transaction in that unequivocal form. But
all the facts and circumstances surrounding the giving of
the mortgage, and the subsequent dealing in the property
with the knowledge and assent of the mortgagee, may be
shown, and they may be sufficient to justify the court or
jury in inferring the agreement ; and so the parol agree-
ment was inferred in all the cases which have come under
our observation." The intent to defraud and the power
of sale must be found to have existed at the time the
mortgage was made, and the subsequent conduct of the
mortgagor is relevant only in so far as it shows the exist
ence of such intent ab initio}

§ 351. Comments in the cases. — Chief-Justice Parker, in
speaking of these shifting liens, observes that " if this
doctrine were admitted, a mortgage of personal property
would be like a kaleidoscope, in that the forms repre-
sented would change at every turn ; but, unlike that
instrument, in that the materials would not remain the

1 Filebeck \. Bean, 45 .Minn. 307,47 :;i tfeb. 44:'., 51 X. W. Rep. 972 ; State
X. W. Rep. 969 ; Whitney v. Levon, v. Roever, 55 Mo. App. 448.

§ 352 OPPOSING Rl II-. \\h . \-i

same."1 The objection may be re-stated, to the efl
that the mortgagor may dispose of the property, defeat
the mortgage, and put the money in his own pocket; but
if he refuses to pay a debt, and creditors seize the prop-
erty in execution against his will, the mortgagt in
and restores it to the debtor.2 Again, it is said tliat
there is no specific lien, but "a floating mortgage, which
attaches, swells, and contracts, as the stock in tra
changes, increases, and diminishes; or may wholly expire
by entire sale and disposition, at the will of the mort-
gagor."3 Such stipulations are not only inconsistent
with the idea of a mortgage, but tend inevitably to give
a fraudulent advantage to the debtor over his other
creditors.4

§ 352. Opposing rule and cases. -- The rule embodied in
Robinson v. Elliot5 has, however, been a subject of
much discussion and dissension. It seems to be conceded
in the great mass of the cases, that an agreement for the
retention of possession, with power of disposition by the
mortgagor, may constitute evidence of fraud, proper to
be considered by the jury or the court as a fact in con-
nection with all the circumstances arising in each particu-
lar case. The contention against the rule in Robinson
v. Elliott is that the agreement does not render the
instrument vox A per se, or as matter of law or conclusively
fraudulent, and that whether it is fraudulent in fact or
not, should be "decided upon all the evidence, including,
of course, the terms of the instrument itself.'"

1 Ranlett v. Blodgett, 1? N. H. ■S3 Wall. 518. See Means v. Dowd,
305 ; Mercantile Trust Co. v. Wood, 8 128 U. S. 284,0 S. < !. Rep. 65; Etheridge
C. C. A. 658, 60 Fed. Rep. 346. v. Sperry, 139 U. S. 266, LI S. C. Rep.

2 Collins v. Myers, 16 Ohio 547. 565.

3 Collins v. Myers, 16 Ohio 554; 6 Hughes v. Cory, 20 tow
McConihe v. Derby, 62 Hun (N. Y.) 410, per Dillon. J. ; Bret! v. Carter, 2
90, 16 N. Y. Supp. 474. Lowell. 458 : Gay v. Bidwell, 7 Mich.

4Tennessee Nat. Bank v. Ebbert, 519; Googins v. Gilmore, 17 Me. 9\

9 Heisk. (Tenn.) 153. Clark v. Eyman, 55 towa II. ' N.
40

626 OPPOSING RULE AND CASES. § 353

§ 353- — Lowell, J.,1 seemed ''to doubt both the gene-
rality and the justice" of the rule stated by Davis, J., in
Robinson v. Elliott,2 and regarded the doctrine as sub-
stantially settled, that when a vendor or mortgagor was per-
mitted to retain the possession and control of his goods
and act as apparent owner, the question whether this was
a fraud or not was one of fact for the jury. The court
observed: "A conveyance for a valuable present con-
sideration is never a fraud in law on the face of the deed,
and if fraud is alleged to exist, it must be proved as a
fact." It is considered plain that the doctrine of Robinson
v. Elliott "virtually prevents a trader from mortgaging
his stock at any time for any useful purpose; for if he
cannot sell in the ordinary course of trade, or only as the
trustee and agent of the mortgagee, he might as well
give possession to the mortgagee at once and go out of
business."

It is to be noticed that the court by this sentence
expresses the belief that shifting liens upon merchandise,

W. Rep. 386 ; Fletcher v. Powers, 131 275, 11 S. C. Rep. 565. See s. C. 17

Mass. 333 : Briggs v. Parkman, 2 Met. Alb. L. J. 359, and cases cited. It

(Mass.) 258; Jones v. Huggeford, 3 may be observed that Dillon, J.,

Met. (Alass.) 515 ; Hunter v. Corbett, adopted the other rule when sitting

7 U. C. Q. B. 75 ; Miller ads. Pancoast, as a circuit judge. He said: "A

29 N. J. Law, 250 ; Price v. Mazange, conveyance of personal property to

31 Ala. 701 ; Sleeper v. Chapman, 121 secure creditors, when the grantor,

Mass. 404 ; People v. Bristol, 35 Mich. by the understanding of the parties,

28 ; Wingler v. Sibley, 35 Mich. 231 ; expressed or implied, is to remain in

Hedman v. Anderson, 6 Neb. 392 ; possession of the property, with a

Cheatham v. Hawkins, 76 N. C. 335; power of sale, is void upon a princi-

Mitchell v Winslow, 2 Story 647; pie of public policy embodied in the

Miller v. Jones, 15 N. B. R. 150 ; Bar- State, irrespective of any question of

run v. Morris, 14 N. B. R. 371 ; Frank- actual and intended fraud." Re

houser v. Ellett, 22 Kan. 127, 31 Am. Kirkbride, 5 Dill. 117.

Rep. 171; Willams v. Winsor, 12 R. 'Brett v. Carter, 2 Lowell 458;

I '.i : Sherwin v. (Jaghagen, 39 Neb. Francisco v. Ryan, 54 Ohio St. 313;

57 X. W. Rep. 1005; Jaffrav v. Peoples' Savings Bk. v. Bates, 120 U.

Greenbaum, 64 [owa 492, 20 N. \V. S. 561, 7 S. C. Rep. 679.

Rep. 775 : v'anmeter v. Estill. 7* Ky. 222 Wall. 513.
iv, : Etheridge v. Sperry, 139 O. S.

§ 353 OPPOSING RULE AND CASKS.

which open and close at the will of the mortgagor, are
not necessarily fraudulent contrivances devised to defeat
creditors; on the contrary, such mortg ;eem to be

contemplated as capable of subserving a "useful pur-
pose." Many of the cases, however, which follow Brett
v. Carter, in holding that fraud is a question of fact, con-
cede, and often expressly state, that contrivances of this
class are convenient covers for fraud upon creditors. It
seems to have been admitted in Brett v. Carter,1 that
there was no fraud in fact as it is commonly termed :
that the transaction showed that all the stock, present and
future, was hypothecated to the payment of a certain debt
by instalments. "No offer is made," said Lowell, J.,
"to prove that any one was deceived, or even was igno-
rant of the mortgage; but I am asked to find fraud in
law, when I know, and it is admitted, there was none in
fact." The court cites Mr. May's treatise as authority
for the statement that fraud is a question of fact,* but
omits to note that the learned author was on the page
cited discussing the question of the effect of the simple
retention of possession, and fails to note the following
observation :3 "The rule seems to be that where there
is an absolute conveyance, and the grantor remains in
possession in such a way as to be able to use the goods as
his own, it is always void against creditors, even though
made on valuable consideration.4

In Etheridge v. Sperry,5 Mr. Justice Brewer said :
"Indeed if this were an open question, we could not be
blind to the fact that the tendency of this commercial
age is towards increased facilities in the transfer ol
property, and to uphold such transfers so far as they are
made in good faith ; and it is at least worthy of thought,

1 2 Low. 458. "See Pierce on Fraudulent Mort-

,J May on Fraudulent Conveyances, gages of Merchandi

p. 106. 5139 L. S. 'Ill, 11 s. C. Rep. 566.
3 Ibid. p. 100.

628 THE PRINCIPLE INVOLVED. § 354

whether the rulings made by the Supreme Court of Iowa
do not tend to make chattel mortgages more valuable for
commercial purposes, without endangering the rights of
unsecured creditors. The law now generally requires a
record of all such instruments, and that, like the record-
ing of a real estate mortgage, gives notice to all parties
interested of the fact' and extent of incumbrances. Why
should a transaction like this be condemned, if made in
good faith and to secure an honest debt? The owner of
a stock of goods may make an absolute sale of them to
his creditor, in payment of a debt If an absolute, why
not a conditional, sale, with such conditions as he and his
creditor may agree upon ? As between the parties no
court would question this right, or refuse to enforce the

conditions If the question were open, or a new

one, unaffected by any settled law of the State, we incline
to the opinion that the question is not one of law, so
much as it is one of fact and good faith."1 The ideas
advanced by Judge Lowell in Brett v. Carter2 are cer-
tainly being favored, and are said to prevail in one-half
of the States of the Union.

§ 354. Discussion of the principle involved. — It is foreign
to our design to kindle the smouldering embers of this
discussion into new flame. It will be seen at a glance
that the subject-matter of contention in the controversy
is the much-debated distinction between fraud in law and
fraud in fact. The conclusion is reached in our opening
chapter,3 that this distinction is largely mythical, and
relates only to the character and quantity of the proof

1 See Torbert v. Hayden, 11 Iowa 426, 8 S. C. Rep. 193 ; Smith v. Craft,

435 ; Bughes v. < !ory, 20 Iowa 399 ; 123 U. 8. 436, 8 S. C. Rep. 196 ; Barron

< Hark v. Hyman, 55 Iowa 14, 7 N. W. v. Morris, 14 Nat. Bk. Reg. 371 ; Miller

Rep. 386; Sperry v. Etheridge. 6:} v. Jones, 15 Nat. Bk. Reg. 150.
[owa 543, 19 N. \V. Rep. 657 ; Jaffraj 22 Lowell 458.

v. Greenbaum, 64 Iowa 492, JON. W. 'See §§9, 10.

Rep. 77.") : Jewell v. Knight, 123 U. S.

§354 THE PRINCIPLE INVOLVED.

adduced to nullify the transaction. Where the evidence
is of such a conclusive nature that the fraudulent intent
unmistakably fastens its fangs upon the transfer, so that a
verdict or finding contrary to the evident evil design so
established would be erroneous, the court pronounces the
transaction covinous, and imputes the fraudulent intent
to the parties in obedience to the principle of law that
they must have contemplated the natural and necessary
consequences of their acts. Where the facts an; not con-
troverted and do not admit of a construction consistent
with innocence, surely the burden is cast upon the court
to declare the result. There is no question of intention
to be submitted to the jury. As the mortgage shows
upon its face that it was not designed by the parties as an
operative instrument between them, its only effect is to
prejudice others. The court should "pronounce it void,
for the reason that the evidence conclusively shows it
fraudulent." 1 It is because such trusts are calculated to
deceive and embarrass creditors, because they are not
things to which honest debtors can have occasion to
resort in sales of their property, and because they con-
stitute the means which dishonest debtors commonly and
ordinarily use to cheat their creditors, that the law does
not permit a debtor to say that he used them for an honest
purpose in any case.2 Chief-Justice Ryan said : " Intent
does not enter into the question. Fraud in fact goes to
avoid an instrument otherwise valid. But intent, bona
fide or mala fide, is immaterial to an instrument per se
fraudulent and void in law. The fraud which the law

imputes to it is conclusive Fraud in fact imputed

to a contract (valid on its face) is a question of evidence ;
not fraud in law. And no agreement of the parties in

1 Russell v. Winne, 37 N. Y. 595. s Coolidge v. Melvin, 42 X. II. 520

Winkley v. Hill, 9 N. H. 31.

630 SALES FOR MORTGAGEE'S BENEFIT. §§ 355, 356

parol can aid a written instrument fraudulent and void in
law." 1

§ 355. Authorizing sales for mortgagee's benefit. — Three
cases,' decided in the New York Court of Appeals in
rapid succession, and approved in the same court in a
later case,3 held that a chattel mortgage was not per se
void because of a provision contained in it allowing the
mortgagor to sell the mortgaged property and account to
the mortgagee for the proceeds, and apply them to the
mortgage debt.4 " These cases,'' says Finch, J., " went
upon the ground that such sale and application of pro-
ceeds is the normal and proper purpose of a chattel
mortgage, and within the precise boundaries of its lawful
operation and effect. It does no more than to substitute
the mortgagor as the agent of the mortgagee, to do
exactly what the latter had the right to do, and what it
was his privilege and his duty to accomplish." 5 It may
be observed that a subsequent judgment-creditor is
entitled to have an account of the sales so made stated,
and to have the amount thereof applied to reduce the
mortgage debt,6 and the mortgagee must be charged with
the amount of any goods sold on credit.7

§ 356. Sales upon credit. — The rule being established
that the mortgagor may sell the property and account for

1 Blakeslee v. Rossnian, 43 Wis. 5 Brackett v. Harvey, 91 N. Y. 221 ;

124. s. P. Wilson v. Sullivan, 58 N. H.

* Ford v. Williams, 24 N. Y. 359 ; 260 ; Hawkins v. Hastings Bank, 1

Conkling v. Shelley, 28 N. Y. 360; Dillon 462 ; Overman v. Quick, 8 Biss.

Miller v. Lock wood, 32 N. Y. 293. 134 ; Abbott v. Goodwin, 20 Me. 408 ;

3 Brackett v. Harvey, 91 N. Y. 221. Crow v. Red River Co. Bank, 52 Tex.
See Hawkins v. Hastings Bank, 1 362; Fletcher v. Martin, 126 Ind. 55,
Dillon 462 ; Spaulding v. Keyes, 125 25 N. E. Rep. 886 ; Lane v. Starr, 1 S.
N. V. 117, 26 N. E. Rep. 15 ; Gleason Dak. 107, 45 N. W. Rep. 212.

v. Wilson, 48 Kan. 500, 29 Pac. Rep. 6 Ellsworth v. Phelps, 30 Hun (N.

698. Y.) 646.

4 See Prentiss Tool and Supply Co. 7 Warren v. His Creditors, 3 Wash.
v. Schirmer, 186 N. Y. 305, 32 N. E. St. 48, 28 Pac. Rep. 257.

Rep. 849.

§ 35^ SALES UPON CREDIT.

the proceeds to the mortgagee, and that such an arran
ment is not fraudulent in law if made with an hon
intention,1 another phase of the controversy must be i
sidered. What will be the effect if the mortgagor is not
restricted to sales for cash, but is allowed to sell upon
credit, in his discretion? Elsewhere it is shown that
general assignments permitting the assignee to sell upon
credit are regarded as fraudulent, because such
ments hinder and delay creditors and prevent the imme-
diate application of the debtor's property to the payment
of their claims.2 The same principle has been extended
and applied to sales of the mortgaged property made upon
credit by the mortgagor for the mortgagee. The arrange-
ment is calculated to keep the creditors at bay, and is
regarded as fraudulent /^r se.z If, however, the accounts,
where the sales are effected on credit, are immediately
transferred to the mortgagee at their face, and credited
or allowed upon the mortgage debt, the objectionable
elements of the transaction are eliminated, and the
arrangement will be tolerated.4 In Brown v. Guthrie,5
Finch, J., said : " The dealing, therefore, must be treated
as a chattel mortgage by the debtor to his creditor, the
consideration of which was evidenced and settled by the
outside agreement. So regarded, the findings declare it
to have been in good faith and not fraudulent. The
arrangement for the sale on credit was made harmless by
the stipulation that Guthrie should take the credits as
cash, and himself bear the delay, and risk the solvency of
the purchasers." 6

'Ford v. Williams. 24 N. Y. 359; 3 City Bank v. Westbury, i»i Mm.

Brackett v. Harvey, 91 N. Y. 221 ; (N. Y.) 458.

Hawkins v. Hastings Bank, 1 Dill. 462. 4 Caring v. Richmond, 22 Bun (N.

4 Nicholson v. Leavitt, 6 N. Y. 510; Y.) 370.

Barney v. Griffin, 2 N. Y. 365 ; Dun- 5 110 N. Y. 435, 443.

ham v. Waterman, 17 N. Y. 21. See 6 Citing Brackett v. Barvey, 91 N

§§ 332, 333. Y. 214.

632 CHANGE OF POSSESSION. §§ 356a-357

§ 356a. Secret trust. — In a controversy in Nebraska,
where the chattel mortgage covered all the debtor's prop-
erty, and was not recorded, and the mortgagee took
formal possession and held the same subject to the
direction of the mortgagor, until by sale or lease the
debt secured should be paid, the mortgagor to receive
the balance, the arrangement was held fraudulent as to
the other creditors.1

§ 356b. Change of possession. — In most States it is pro-
vided by statute that a mortgage of chattels not accom-
panied by a change of possession shall be void as against
creditors unless the mortgage shall be filed. It is a
necessary feature of the possession to which the statute
refers that it should be open, visible and free from con-
cealment. It then becomes notice in its highest form of
the claim of the possessor, and the constructive notice
which arises from the filing of the mortgage becomes
unnecessary. But when the change of possession is not
of that character, so that it fails to disclose itself to others
than the immediate parties to the transfer, however honest
they may have been in their intentions, the situation
exists which the statute was designed to prevent."

§ 357- Possession — Independent valid transactions. —
Manifestly selling or taking possession of the property
under and by virtue of the fraudulent mortgage cannot
purge it of the vice of fraud.3 The title remains fraudu-

1 Bacon v. P. Brockman Com. Co., Supreme Court of New York, in Dela-

18 Neb. 365, 67 N. W. Rep. 304. ware v. Ensign, 21 Barb. (N. Y.) 35,

'J Tedesco v. Oppenheimer, 15 Misc. and Dutcher v. Swartwood, 15 Hun

(N. Y.) 524, 37 N. V. Supp. 1073; (N. Y.) 31; the Court of Appeals of New

Crandall v. Brown, 18 Hun (N. Y.) York, in Parshall v. Eggert, 54 N. Y.

461 ; Hale v. Sweet, 40 N. Y. 97 ; 18 ; the Supreme Court of Wisconsin,

Steele v. Benhain, 84 N. Y. 634. in Blakeslee v. Rossman, 43 Wis. 116,

8 In Wella v. Langbein, 20 Fed. and the Supreme Court of Minnesota,

Rep. 183, 186, the court observes: in Stein v. Munch, 24 Minn. 390,— all

" The Supreme Court of California, in hold that where the mortgage is void

Chenery v. Palmer, 6 Cal. 123; the for fraud as to creditors, taking pos-

§ 357 POSSESSION.

lent and voidable still as against creditors.1 Before and
after taking possession, the title of the mortgagee i
equally upon the mortgage, and the question, as regards
creditors of the mortgagor, is the validity of his paper
title. The mortgagee's possession under the mortg
is as good or as bad as the mortgage itself, and the court
has not the power to transmute a void mortgage into a
valid pledge.2 In Stephens v. Perrine,3 the court says :
" The mortgage, as to the creditors of the mortgagor, was
always void. It continued to be void notwithstanding the
fact that the mortgagee assumed to take possession under
and to sell the property by virtue of such void instru-
ment I cannot see the force of the reasoning

which, while admitting that the mortgage is void as to
creditors, nevertheless asserts that a title to the property
covered by it may be obtained by the mortgagee by pro-
ceedings taken under it and which assert the validity of
such instrument If void, what right has the mort-
gagee, as against creditors, to take possession in her char-
acter of mortgagee and to sell or dispose of propem
described in it?" But even in cases where the mortgage
is fraudulent, if the mortgagee repudiates the instrument
and casts it aside, and obtains a pledge of the goods,
accompanied by delivery and an open change of posses-
sion, and by a distinct agreement subsequent to and inde-

session thereunder, before a lien is ob- 448; Hedges v. Polhemus, 9 Misc. (N.

tained on the property in favor of a Y.) 680, 30 N. Y. Supp. 556; In n

creditor, will not render it valid. The Forbes, 5 Biss. 510 : Janvrin v. Fi

fraud existing in the mortgage itself 49 N. H. 340 ; Wells v. Langbein, 30

vitiates all steps taken under it." Fed. Rep. 183, 186 ; Mandeville v.

1 Smith v. Ely, 10 N. B. R. 563. Avery, 124 N. Y. 376, 26 N. K. Rep.

2 Blakeslee v. Rossman, 43 Wis. 951 ; Karst v. Gane, 136 N. Y. 816, 82
127. See Robinson v. Elliott, 22 Wall. N. E. Rep. 107:;. But compare Bald
513 ; Dutcher v. Swartwood, 15 Hun win v. Flash, 59 Miss. 66, and <

(N. Y.) 31 ; Stimson v. Wrigley, 86 N. cited.

Y. 332 ; State v. Roever, 55 Mo. App. s 143 N.Y. 476, 480. :«• N. E. Rep. 11

634 RIGHT OF REVOCATION. §§ 358, 359

pendent of the mortgage, his rights will be protected as
against the other creditors.1

§ 358. Right of revocation — Reservations. — We have
seen that a debtor, before any lien attaches in favor of cred-
itors, possesses the right to make any disposition of his
property.3 The contract, however, by which he parts
with it must be absolute and unconditional, for if he
retain the right to revoke the contract and resume the
ownership of the property, the reservation is considered
as inconsistent with a fair, honest and absolute sale, and
renders the transfer fraudulent and void.3 In the great
case of Riggs v. Murray,4 in which the various instru-
ments of transfer contained powers of revocation, Chan-
cellor Kent held the transfers void, saying that there was
a necessary inference of a purpose to " delay, hinder or
defraud creditors," that the only effect of these assign-
ments was " to mask the property ;" and that such powers
of revocation are fatal to the instrument and poison it
throughout, appears to have been well established by
authority.5 So a deed reserving the right to the grantor
to sell and convey the property without the consent of the
grantee, is inconsistent with the idea of a sale, and may
be avoided by creditors.6

§ 359. Rule as to consumable property. — The mortgaging
of property, the use of which involves its consumption, is

1 Pettee v. Dustin, 58 N. H. 309 ; 6 Compare Smith v. Conkwright, 28
Brown v. Piatt, 8 Bosw. (N. Y.) 324; Minn. 23; Shannon v. Common-
First Nat. Bank v. Anderson, 24 wealth, 8 S. & R. (Pa.) 444 ; The King
Minn. 435 ; Baldwin v. Flash, 58 Miss. v. Earl of Nottingham, Lane 42 ;
593 ; Bowdish v. Page, 153 N. Y. 104 ; Smith v. Hurst, 10 Hare 30.
Nat. Shoe & Leather Bank v. August, 6 Fisher v. Henderson, 8 N. B. R.
54 N. J. Eq. 182. 175. Compare Henderson v. Down-

3 See § 52. ing, 24 Miss. 106 ; Coolidge v. Melvin,

3 West v. Snodgrass, 17 Ala. 554. 42 N. H. 510 ; Donovan v. Dunning,

4 2 Johns. (N. Y.) 565. But see 69 Mo. 436; Lukins v. Aird, 6 Wall.
Murray v. Riggs, 15 Johns. (N. Y.) 78. See May on Fraudulent Convey -
571. ances, 93,94. See § 11, and cases cited.

§ 359a DISTINCT CLAIMS.

an evidence of fraud of much weight Unless satisfac-
torily explained it will cause the condemnation of the
instrument.1 Of course articles in their nature subject
to be consumed in their use maybe mortgaged without
any imputation of fraud, provided they are not to be used,
and may be kept without damage until the mortgage debt
shall become payable.2 If, however, the mortgage cov<
articles which would perish or be destroyed before the
debts secured by the mortgage mature, it becomes mani-
fest that the object was not to apply these things to the
payment of the mortgage, but to secure the debtor in
their possession and enjoyment.8

§ 359a. Distinct claims. — Manifestly an honest creditor
does not lose his security because the mortgage consti-
tuting the security embraces the separate claim of a party
who participated with the mortgagor in perpetrating a
fraud.4

'Farmers' Bank v. Douglass, 19 9 Misc. (N. Y.) 680, 30 N. V. Sui.il

Miss. 540 ; Brockenbrough v. Brock- 556.

enbrough, 31 Gratt. (Va.) 590 ; Som- 2Robbins v. Parker, 3 Met. (Mi

merville v. Horton, 4 Yerg. (Tenn.) 130. Compare Miller v. Jones, 15 N.

550 ; Shurtleff v. Willard, 19 Pick. B. R. 154.

(Mass.) 202; Robbins v. Parker, 3 3 Farmers' Bank v. Douglass, 18

Met. (Mass.) 120. See Googins v. Gil- Miss. 541. See Quarles v. Kerr, 11

more, 47 Me. 14 ; Putnam v. Osgood, Gratt. (Va.) 48.

51 N. H. 200; Hedges v. Polhemus, 4 Morgan v. Worden, 145 tnd. 600.

CHAPTER XXIII.

SPENDTHRIFT TRUSTS.

360. Aversion to exemptions other

than statutory.

361. Restraints upon alienation.

" i Repugnant conditions.

363. ) L °

364. Nichols v. Eaton ; the point

actually involved.

365. The dictum in Nichols v. Eaton.

366. The correct rule.

§367. Broadway National Bank v.
Adanis.
367a. Spread of the doctrine.
3676. New York rule as to trust

income.
368. Spendthrift trusts in Pennsyl-
vania.
368a. Powei's — When not assets.

"The general introduction of spendthrift trusts would be to form a privileged class, who could
indulge in every speculation, could practice every fraud, and yet, provided they kept on the safe
side of the criminal law, could roll in wealth. They would be an aristocracy, though certainly
the most contemptible aristocracy with which a country was ever cursed." — Professor Gray in
Restraints on Alienation, § 262.

" It is a settled rule of law that the beneficial interest of the cestui que trust, whatever it maybe,
is liable for the payment of his debts. It cannot be so fenced about by inhibitions and restrictions
as to secure to it the inconsistent characteristics of right and enjoyment to the beneficiary and
immunity from his creditors." — Mr. Justice Swayne in Nichols v. Levy, 5 Wall. 441; over-
shadowed in Nichols v. Eaton, 91 U. S. 716.

§360. Aversion to exemptions other than statutory. —
Aside from statutory exemptions trivial in amount,1 the
idea of the existence of rights of property of any kind,
legal or equitable, in a debtor, which cannot be reached
by creditors and applied toward the satisfaction of debts,
is or should be abhorrent to modern convictions of jus-
tice toward the creditor class. This sentiment is reflected
in the legislation limiting exemptions to very small sums.
The personal liberty of the debtor being no longer in
danger, and his body being exempt from torture or
slavery at the hands of infuriated creditors, there exists

1 See §§ 46-50, 365. Arkansas,
Kansas, Texas and Nevada are States
that have rather liberal exemption
statutes. Beyond the point of protect-

ing absolute necessaries, sucli statutes
are harmful to a State, as they frighten
away commerce and capital and de-
stroy the credit of the people.

§ 360 AVERSION TO EXEMPTIONS.

no controlling check upon his recklessness and improvi-
dence,1 other than his sense of honor, which too often
proves to be an undeveloped quantity. This is the sour, e
of the strong tendency, manifested in some of the coui
to strengthen, enlarge and perfect the creditors' remedies
and recourses against the property and interests of the
debtor class, who operate under the guise of conti
obligations, skillfully eluding the sharp edges of the stat-
utes against larceny. The plain purpose manifested
in our modern law in extending relief to creditors is two-
fold : first, to enforce the creditors' equitable lien upon the
debtor's property considered as somewhat in the nature
of a trust fund;3 and secondly, to inflict a species of
negative punishment upon the debtor by depriving him
of the personal comforts and enjoyments which result
from the possession and use of property or accumulated
wealth. This latter wise and necessary policy of the law
has been almost obscured by an out-pouring of sentimental
sophistry in the courts. There should be no spectacle
more revolting to the mass of mankind, and especially in
a community such as ours, than that of a bankrupt or
insolvent debtor revelling and dwelling in luxury, and
disporting himself with the proceeds of another man's
goods, and enjoying a trust income that judicial writs
cannot touch. It is opposed to a wise public policy that
a man ''should have an estate to live on, but not an
estate to pay his debts with,"3 or that he should possess
" the benefits of wealth without the responsibilities."4
Chief-Justice Denio said : " It is against general principles
that one should hold property, or a beneficial interest in
property, by such a title that creditors cannot touch it."

1 See § 2. 4 Gray on Restraints on AJienation,

2 See Egery v. Johnson, 70 Me. 258 ; p. 169.

Seymour v. Wilson, 19 N. Y. 418. Rome Exchange Bank v. Barnes,

3 Tillinghast v. Bradford. 5 R. I. 4 Abb. App. Dec (N. Y.> 88, ft,
205, 212. "That grown men should be kepi all

638 AVERSION TO EXEMPTIONS. § 360

We earnestly protest against almost every line of these
obnoxious income exemption cases. The force of the
bad example seems to be forgotten in permitting the
growth of spendthrift trusts. The spectacle of a judg-
ment-debtor living unmolested upon protected income, or
money that is under a charm, without fleeing from his
creditors to sanctuary ground as of yore, is not calculated
to awaken feelings of thrift, or to inspire habits of economy,
in other people. It tends rather to suppress the natural
and laudable ambition of industrious people to accumu-
late property through the usual lawful channels of intelli-
gent enterprise, having due consideration for the rights
of creditors, and proper respect for the perils of insolvency,
and a wholesome dread of its privations. It tends also
to cheapen regard for accumulated wealth, and its com-
forts, considered solely as an honest reward for skill and
patient industry. It neglects to enforce necessary pre-
cepts of honesty. It lifts the profligate insolvent above
the class in which his own achievements would place him.
and clothes him with borrowed plumage and deceptive
indicia of thrift.

The feelings of the industrial world were shocked at
the dictum of Wright, J., in Campbell v. Foster,1 to the
effect that the surplus of a trust fund created by a third
party, for the benefit of a judgment-debtor, was not
available to his creditors. The more recent opinion of
Rapallo, J., in Williams v. Thorn,2 holding that, whether

their lives in pupilage, that men not ' 35 N. Y.361 ; Howard v. Leonard,

paying their debts should live in 3 App. Div. (N. Y.) 277, 38 N. Y. Supp.

luxury on inherited wealth, are 363. See § 45.

doctrines as undemocratic as can well 570N. Y. 270 ; 2d Appeal, 81 N. Y.

be conceived. They are suited to the 381 ; Wetmore v. Wetmore, 149 N. Y.

times in which the Statute De Donis 520, 44 N. E. Rep. 169 ; Tolles v. Wood,

was enacted, and the law was 99 N. Y. 616, 1 N. E. Rep. 251 ; Thomp-

administered in the interest of rich son v. Thompson, 52 Hun (N. Y.) 456 ;

and |". wilful families." Gray <>n Spindle v. Shreve. Ill U. S. 546, 4S. C.

Restraints on Alienation, p. 174. Rep. 522; Kilrov v. Wood, 42 Hun

§ 36l RESTRAINTS UPON ALIENATION.

the trust relate to realty or personalty, the surplus income
of such an estate, beyond what was needed for the
suitable support and maintenance of the cestui que trust
and those dependent upon him, could be reached by a
creditors' bill, was greeted with satisfaction, as being good
as far as it went. A tendency is manifesting itself, how-
ever, to close another source of possible relief to credit
ors, by the classes of cases already referred to1 and
which will presently be considered more at length,2 depriv-
ing creditors of the right to treat powers as assets and
limiting or denying their right to reach trust income
arising from third parties. First, however, we will glance
at the authorities which discuss the rights of the parties
in cases where property has been conveyed with a restraint
imposed upon its alienation, or an attempt has been
made to vest it in the grantee without subjecting it to
liability to his creditors.

§ 361. Restraints upon alienation. — The theory of the law
is that no person shall be permitted to enjoy or hold any
interest in property to which the incidents of ownership,
i. e., the right of alienation and liability to the claims and
remedies of creditors, do not attach.3 A condition or
proviso in a grant or devise that the land shall not be
subject to alienation, attachment, or levy, is commonly
treated as void.4 The policy of the law will not permit

(N. Y.) 636; Bunnell v. Gardner, 4 Am. Law Reg. N. S. 180; and the

App. Div. (N. Y.) 322; Andrews v. learned note by Henry Wade Rogers,

Whitney, 82 Hun (N. Y.) 123, 31 N. Y. Esq., at page 185, reviewing the

Supp. 164; Genetv. Beekman, 45 Barb. authorities. Prof. Gray Bays (Gray's

(N. Y.) 382 ; Watkyns v. Watkyns, Restraints on Alienation), p. 14 : \.B

2Atykns96. See Arzbacher v. Mayer, in England, so in America, a condi-

53 Wis. 391, 10 N. W. Rep. 440. tion, or a conditional limitation,

1 See §§ 40, 45, and note, restraining the owner in fee simple

2 See §§ 364-367. from selling his land, is bad. " Potter
3SeeChap. II. v. Couch. Ill I'. S. 296 ; Munn
4Blackstone Bank v. Davis, 21 Hall, 97 N. C. 806; In re Watson &

Pick. (Mass.) 42; McCleary v. Ellis, Woods, 14 Out, 48; Kahanaii

54 Iowa 311, 6 N. W. Rep. 571, 20 Kohala Sugar Co., 6 Hawaiian 694

640

RESTRAINTS UPON ALIENATION.

§36l

property to be so limited as to remain in a party for life,
free from the incidents of property, and not subject to

Helming v. Harrison, 13 Bush (Ky.)

723 ; Smith v. Clark, 10 Mtl. 186 ;
Gleason v. Fayerweather, , 4 Gray

(Mass.) 348 ; Campau v. Chene, 1
Mich. 400; McDowell v. Brown, 21
Mi>. 57; Pardue v. (.livens, 1 Jones'
Eq. (N. C.) 306 ; Schermerhorn v.
Negus, 1 Denio(N.Y-) 448; Lovett v.
Kingsland, 44 Barb. (N. Y.) 560;
sub n< >nt. Lovett v. Gillender, 35 N.
Y. 617: Walker v. Vincent, 19 Pa.
St. 369 ; Williams v. Leech, 28 Pa.
St. 89 ; Naglee's Appeal, 33 Pa. St.
89 ; Jauretche v. Proctor, 48 Pa. St.
466 ; Kepple's Appeal, 53 Pa. St. 211 ;
Lario v. Walker, 28 Grant (Out. ) 216.
These cases are decisions directly in
point, and dicta to the same effect are
found in abundance, e. g., in Taylor v.
Mason, 9 Wheat. 325, 350; Mc-
Donogh v. Murdoch. 15 How. 367,
412 ; Andrews v. Spurlin, 35 Ind. 262,
268 ; Deering v. Tucker, 55 Me. 284,
289 ; Hawley v. Northampton, 8 Mass.
3, 37 ; Gray v. Blanchard, 8 Pick.
(Mass.) 284, 289 ; Van Rensselaer v.
Dennison, 35 N. Y. 393 ; Turner v.
Fowler, 10 Watts (Pa.) 825; Reifsnyder
v. Hunter, 19 Pa. St. 41 ; Doebler's
Appeal, 64 Pa. St. 9 ; Grant v. Car-
penter, 8 R. I. 36 ; Doe d. Mclntyre
v. Mclntyre, 7 IT. C. Q. B. 156 ; Mc-
Master v. Morrison, 14 Grant (Ont.)
138, 141 ; Crawford v. Lundy, 23
Grant (Ont.) 244, 250; Fulton v.
Fulton, 24 Grant (Ont.) 422. See De-
horty v. Jones, 2 Hair. (Del.) 56, note ;
NYwkerk v. Newkerk, 2 Cai. (N. Y.)
345 : and see Allen v. Craft, 109 Ind.
476, 483 ; Todd v. Sawyer, 147 Mass.
570; Winsor v. Mills, 157 Mass. 362,
364 ; Jauretche v. Proctor, 48 Pa. St.
m ; James v. Card, 13 Vict. L. R.
miis, 913; Bassett v. Budlong, 77

Mich. 338. The authorities arc in

much confusion as to the validity of

a condition against alienation, con-
fined to a limited period. SeeCowell
v. Springs Co., 100 U. S. 55, 57; Black-
stone Bank v. Davis, 21 Pick. (Mass.)
42 ; Munroe v. Hall, 97 N. C. 206, 210 ;
In re Northcote, 18 Ont. 107 ;
Mandelbaum v. McDonell, 29 Mich. 78;
In re Rosher, 26 Ch. Div. 801 ; Potter
v. Couch, 141 U. S. 296 ; Bennett v.
Chapin, 77 Mich. 526 ; Prit< hard v.
Bailey, 113 N. C. 521. A gift over of
a fee simple, if the owner does not
convey, is not valid. See Van Home
v. Campbell. 100 N. Y. 287 ; Mc-
Kenzie's Appeal, 41 Conn. 607 ; Wead
v. Gray, 78 Mo. 59 ; Perry v. Cross,
132 Mass. 454 ; Carr v. Effinger, 78
Va. 197 ; Wolfer v. Hemmer, 144
111. 554 ; Ball v. Hancock, 82 Ky. 107 ;
Hoxsey v. Hoxsey, 37 N. J. Eq. 21 ;
Stowelt v. Hastings, 59 Vt. 494. The
rule applies also to personalty. Foster
v. Smith, 156 Mass. 379 ; Hoxsey v.
Hoxsey, 37 N. J. Eq. 21 ; Allen v.
White, 16 Ala. 181. On this general
subject of the ineffectual nature of
restrictions upon alienations see
Oxley v. Lane, 35 N. Y. 340 ; Wil-
liams v. Leech, 28 Pa. St. 89: Murray v.
Green, 64 Cal. 363 ; Lane v. Lane, 8
Allen (Mass.) 350 ; Turner v. Hallo-
well Sav. Inst. 76 Me. 527 ; Be
Traynor & Keith, 15 Ont. 469 ; Black-
stone Bank v. Davis, 21 Pick. (Mass.)
42 ; Sears v. Putnam, 102 Mass. 5, 9 ;
Winsor v. Mills, 157 Mass. 362. So
provisions that equitable interests in
fee shall not be liable for the debts of
the cestuis que trust are inoperative.
Taylor v. Harwell, 65 Ala. 1 ; Turley
v. Massenftill, 7 Lea (Tenn.) 353. See
Gray v. Obear, 54 Ga. 231, cited in
Grayon Restraints, § 115. Bramhallv.
Ferris, 14 N. Y. 41, 44. Some
authorities assert that where the
beneficiary is also the trustee his

§ 362 REPUGNANT CONDITIONS. ' , , |

his debts.1 At least this is what has been taught and
commonly accepted.

§362. Repugnant conditions. — Restraints upon either vol-
untary or involuntary alienation are not favored in the
law, and are defeated upon another ground. In De
Peyster v. Michael,2 after a careful n.-vicw of the authori-
ties, the New York Court of Appeals observed : "Upon
the highest legal authority, therefore, it may beaffirmed
that in a fee-simple grant of land, a condition that the
grantee shall not alien, or that he shall pay a sum of
money to the grantor upon alienation, is void, on the
ground that it is repugnant to the estate granted." In
Potter v. Couch,3 the court says : " The right of aliena-
tion is an inherent and inseparable quality of an estate in
fee simple. In a devise of land in fee simple, therefore, a
condition against all alienation is void, because repugnant
to the estate devised." So in Bradley v. Peixoto,4 the
court say that it is " laid down as a rule long ago estab-
lished, that where there is a gift with a condition incon-
sistent with, and repugnant to such gift, the condition is
wholly void. A condition that tenant in fee shall not
alien is repugnant.''5 In Mandlebaum v. McDonell 6
will be found an elaborate review of the cases and an
exhaustive consideration of the question. The court
conclude that the only safe rule of decision is that which
prevailed at common law for ages, to the effect that " a
condition or restriction which would suspend all power of

interest may be taken on execution. 50 Hun (N. Y.) 328, 3 X. Y. Supp,

Bolles v. State Trust Co., 27 N. J. 361.

Eq. 308. See Hobbs v. Smith, 15 Ohio 3 141 U. S. 296, 315, list. Rep.

St. 419. 1005.

1 4 Kent's Com., p. 311. See Menken * 3 Ves. Jr. 324.

Co. v. Brinkley, 94 Tenn. 730, 31 S. 5 See Brandon v. Robinson, 18 Vea

W. Rep. 92. Jr. 429 ; McCullough v. Gilmore, 11

3 6 N. Y. 467, 497 ; Oxley v. Lane, Pa. St. 370.

35 N. Y. 346 ; Wieting] v.; Bellinger, 6 29 Mich. 78, 107.

41

642 REPUGNANT CONDITIONS. § 363

alienation for a single day is inconsistent with the estate
granted, unreasonable, and void.1' In Blackstone Bank
v. Davis,1 a leading and important case, it appeared that
one Davis devised to his son the use of a farm of one
hundred and twenty acres, with a provision that the land
should not be subject or liable to conveyance or attach-
ment. The plaintiffs recovered a judgment against the
devisee and levied an execution upon the premises as
being land held by the defendant in fee. The court
said : '' By the devise of the profits, use, or occupation of
land, the land itself is devised. Whether the defendant
took an estate in fee or for life only, is a question not
material in the present case. The sole question is,
whether the estate in his hands was liable to attachment
and to be taken in execution as his property. The plain-
tiffs claim title under the levy of an execution against the
defendant, and their title is valid if the estate was liable
to be so taken. That it was so liable, notwithstanding
the proviso or condition in the will, the court cannot
entertain a doubt."

§ 3&3- — In Walker v. Vincent2 the testator devised
certain real estate to his daughter and to her legal heirs
forever, upon the express condition that she should "not
alien or dispose of the same, or join in any deed or con-
veyance with her husband for the transfer thereof, during
her natural life." The court held the condition void, and
that a fee-simple estate was devised, and said : " It makes
no difference that the testator has expressly withheld one
of the rights essential to a fee-simple, for the law does
not allow an estate to be granted to a man and his heirs,
with a restraint on alienation, and frustrates the most clear
intention to impose such a restraint, just as it allows alien-
ation of an estate tail, though a contrary intent is manifest.

31 Pick. (Mass.) 42. »19 Pa. St. 369.

§ 3°4 NICHOLS V. EATON.

And it would be exceedingly improper, in any court,
in construing a devise to a man and his heirs, to endeavor
to give effect to the restraint upon alienation by changing
the character of the estate to a life estate, with a remainder
annexed to it, or with an executory devise over."1 In
Hall v. Tufts2 the testator devised certain real estate to
his wife for her life, and "the remainder of his estate,
whether real or personal, in possession or reversion, to his
five children to be equally divided to and among them,
or their heirs, respectively, always intending and meaning
that none of his children shall dispose of their part of the
real estate in reversion before it is legally assigned them."
The court held that the children took a vested remainder
in the real estate given to the wife for her life, and that
the clause restraining them from alienating it before the
expiration of the life estate was void.3 It is also a canon
of construction that an estate in fee created by will, can-
not be cut down or limited by a subsequent claim unless
it is as clear and decisive as the language of the clause
which devises the estate.4

§ 364. Nichols v. Eaton ; the point actually involved.—
This brings us to the question of the liability of trust
income for debts. The principle embodied in Nichols v.

1 Restraints upon personalty. — A the estate; they do not destroy or
condition against alienation cannot be limit its alienable or inheritable char-
imposed upon an absolute interest in acter." Field, J., in Cowcll v. Springs
personalty. Lovett v. Kingsland, 44 Co., 100 U. >S. ."iT, citing, Sheppard'a
Barb. (N. Y.) 560, affi'd sub nom. Touchstone, 129, 131. SeeWinsorv.
Lovett v. Gillender, 35 N. Y. 617 ; Mills, 157 Mass. 362, 364,32 N. E. Rep.
Barker v. Davis, 12 U. C. C. P. 344. 352; Jackson v. Schutz, 1* Johns.
4 18 Pick. (Mass.) 455. (N. Y.) 174, 184. Contra, Anderson
3 " Repugnant conditions are those v. Gary, 36 Ohio St. 506 : Met lullough

which tend to the utter subversion of v. Gil more, 11 Pa. St. 370. C pan

the estate, such as prohibit entirely Potter v. Couch. Ml U. S. 315, 11 8

the alienation or useof the property. Rep. 1005. The authorities cannot be

Conditions which prohibit its aliena- reconciled.

tion to particular persons or for a * Byrnes v. Stilwell, in:; N \ WO,

limited period, or its subjection to 9 N. E. Rep. 241 ; Roseboom v 1

particular uses, are not subversive of boom, 81 N. Y. 356.

644

NICHOLS V. EATON.

§364

Eaton,1 and succeeding cases, and more especially the
language employed by Mr. Justice Miller, in delivering
the opinion of the Supreme Court in that case, have pro-
voked extended discussion and sharp criticism,2 in reviews,
philosophical productions and dissenting opinions. The
influence of the case has spread like the murrain among
sheep. The importance that the case has assumed seems
to call for an extended statement of the facts and features
involved. It appeared that property had been devised
to trustees with directions to pay the income to the
children of the testatrix in equal shares, and on the
death of each child, his or her share was to go over. If

1 91 U. S. 716. See Roberts v.
Stevens. 84 Me. 325, 24 Atl. Rep. 873 ;
Maynard v. Cleaves, 149 Mass. 307,
21 N. E. Rep. 376 ; Smith v. Towers,
69 Md. 77, 14 Atl. Rep. 497 : 15 Id. 92;
Garland v. Garland, 87 Va. 763, 13 S. E.
Rep. 478 ; Jarboe v. Hey, 122 Mo. 349,
26 S. W. Rep. 968; Lam pert v. Hay-
del, 96 Mo. 439, 9 S. W. Rep. 780;
Conger v. Lowe, 124 Ind. 371, 24 N.
E. Rep. 889.

2 This decision called forth an essay
by Professor Gray, already cited, en-
titled Restraints on the Alienation of
Property. These sentences may be
found in the preface : " How far the
law will allow a man to enjoy rights
in property which he cannot transfer,
and which his creditors cannot take
for their debts, is a question becoming
more and more frequent in this coun-
try. In 1876 I shared the surprise,
common fco man; lawyers, at the opin-
ion of the Supreme Court of the
United States, in the case of Nichols
v. Eaton, 91 U. S. 716, containing, as
it did, much that was contrary to
what, both in teaching and practice,
Iliad hitherto supposed to be settled
law." The preface adds that the
hook was substantially written before
the decision of the Supreme Judicial

Court of Massachusetts in Broadway
Nat. Bank v. Adams, 133 Mass. 170,
See infra, §367. In the preface to the
second edition of his essay Professor
Gray says : " If I had written with
any expectation of affecting the course
of decision, I should have been griev-
ously disappointed. State after State
has given in its adhesion to the new
doctrine ; the courts of Maine, Mary-
land, Illinois, and Vermont have
adopted it ; those of Delaware, In-
diana, and Virginia have used lan-
guage which leaves little doubt that
they will adopt it at the first oppor-
tunity ; and in Missouri and Ten-
nessee, where the old doctrine has
been expressly declared, it has now
been thrown aside, and the new views
embraced. Were it not for an occa-
sional dissenting opinion, especially
an extremely able one of Chief Jus-
tice Alvey, late of the Court of
Appeals of Maryland, T should be vox
clamantis in dcserto." The authori-
ties pertaining to trust incomes and
spendthrift trusts down to 1895 may
be found stated and classified in tins
essay to which the student desiring
to study all the cases in detail is
referred .

364 NICHOLS V. EATON.

the sons respectively should alienate, or by reason of bank-
ruptcy or insolvency, or any other cause, the income could
no longer be personally enjoyed by them respectively, but
would become vested in and payable to some other per-
son, then the trust as to such portion so divested should
immediately cease and determine. In that event, during
the residue of the life of such son, the income was to be
paid to his wife or child, and in default of such person, to
be added to the principal, and further, "in case, after the
cessation of said income as to my said sons respectively,
otherwise than by death, as hereinbefore provided for, it
shall be lawful for my said trustees, in their discretion,
but without its being obligatory upon them, to pay to or
apply for the use of my said sons respectively, or for tin-
use of such of my said sons and his wife and family, so
much and such part of the income to which my said sons
respectively would have been entitled under the pre-
ceding trusts, in case the forfeiture hereinbefore provided
for had not happened." One of the sons became a bank-
rupt, and his assignee in bankruptcy brought a bill against
the trustees to have the income of the son's share applied
for the benefit of creditors.1

Mr. Justice Miller, in the opening sentences of his opin-
ion, observes that the claim of the assignee is founded on the

1 Nichols v. Eaton, re-stated. — In subject to other dispositions. The as-
Hyde v. Woods, 94 U. S. 526, Mr. signee of the bankrupt sued to recover
Justice Miller observes that his own the interest bequeathed to the bank-
opinion ha Nichols v. Eaton, 91 U. S. rupt, on the ground thai this con-
716, " was well considered," and says: dition was void as against public
"In that case, the mother of the policy. But this court, on a full
bankrupt Eaton, had bequeathed to examination of the authorities, both
him by will the income of a in England and this country, held
fund, with a condition in the trust that the objection was not well taken ;
that on his bankruptcy or insolvency that the owner of property mighl
the legacy should cease and go to his make such a condition in tin- trai
wife or children, if he had any, and if of that winch was his own, and in
not, it should lapse into the general doing so violated do creditor's rights
fund of the testator's estate, and be and no principle of public policy."

646 NICHOLS V. EATON. §3^4

proposition " that a will which expresses a purpose to vest
in a devisee either personal property, or the income of
personal or real property, and secure to him its enjoy-
ment free from liability for his debts, is void on
grounds of public policy, as being in fraud of the rights of
creditors ; or as expressed by Lord Eldon in Brandon v.
Robinson:1 'If property is given to a man for his life,
the donor cannot take away the incidents to a life estate.' '
" There are two propositions," continues the learned
judge, " to be considered as arising on the face of this
will as applicable to the facts stated: (i) Does the true
construction of the will bring it within that class of cases,
the provisions of which on this point are void under the
principle above stated? and (2), If so, is that principle to
be the guide of a court of the United States sitting in
chancery?" After reviewing the English authorities, the
opinion continues : " Conceding to its fullest extent the
doctrine of the English courts, their decisions are all
founded on the proposition that there is somewhere in the
instrument which creates the trust a substantial right, a
right which the appropriate court would enforce, left in
the bankrupt after his insolvency, and after the cesser of
the original and more absolute interest conferred by the
earlier clauses of the will. This constitutes the dividing
line in the cases which are apparently in conflict. Apply-
ing this test to the will before us, it falls short, in our
opinion, of conferring any such right on the bankrupt.
Neither of the clauses of the provisos contain anything
more than a grant to the trustees of the purest discretion
to exercise their power in favor of testatrix's sons. It
would be a sufficient answer to any attempt on the part of
the son in any court to enforce the exercise of that dis-

! 18 Vea. -i-U. For variations of the & M. 197; Graves v. Dolphin, 1 Sim.

English rule see Be Coleman, 39 Ch. 66 ; Green v. Spicer, Taml. 396 ; Jos-

Div. 448, 452 ; Barton v. Briscoe, Jac. selyn v. Josselyn, 9 Sim. 63; Lord v.

603 ; Woodmeeton v. Walker, 2 Russ. Bunn, 2 Y. &C. C. C. 98.

§364

NICHOLS V. EATON.

cretion in his favor, that the testatrix has in express term 1
said that such exercise of this discretion is not 'in an\
manner obligatory upon them,' -- words repeated in both
these clauses. To compel them to pay any of this in< ome
to a son after bankruptcy, or to his assignee, is to mak
will for the testatrix which she never made ; and to do it
by a decree of a court is to substitute the discretion oi
the chancellor for the discretion of the trustees, in whom
alone she reposed it." Thus far we cannot but consider
the case as correctly reasoned and decided, since a gift <>|
a life estate or interest, with a proviso that it shall go
over to a third person upon alienation, voluntary or
involuntary, by the life tenant, is considered valid. We
can formulate no well-founded objection to such a trans-
action. Probably the earliest case in which the point is
so held is Lockyer v. Savage,1 decided in 1773, but the
question seems now to be no longer a matter of disput

1 2 Stra. 947.

•Shee v. Hale, 13 Ves. Jr. 404;
Cooper v. Wyatt, 5 Madd. 482 ; Mar-
tin v. Margham, 14 Sim. 230 ; Roch-
ford v. Hackman, 9 Hare 475 ; Bran-
don v. Aston, 2 Y. & C. N. R. 24 : Re
Edgington's Trusts, 3 Drew 202 ;
Manning v. Chambers, 1 DeG. & Sin.
282 ; Carter v Carter, 3 Kay & J.
617 ; Barnett v. Blake, 2 Dr. & Sm.
117 ; Re Muggeridge's Trusts, John-
son 625 ; Sharp v. Cosserat, 20 Beav.
470; Haswell v. Haswell, 28 Beav.
26 ; Dorsett v. Dorsett, 30 Beav. 256 ;
Townsend v. Early, 34 Beav. 23 ;
Freeman v. Bowen, 35 Beav. 17 ;
Montefiore v. Behrens, 35 Beav.
95 ; Oldham v. Oldham, L. R. 3 Eq.
404 ; Roffey v. Bent, L. R. 3 Eq. 759 :
Craven v. Brady, L. R. 4 Eq. 209,
L. R. 4 Ch. App. 296; In re Am-
herst's Trusts, L. R. 13 Eq. 464; Bill-
son v. Crofts, L. R. 15 Eq. 314 ; Ex
parte Eyston, 7 Ch. D. 145 ; Caul-

field v. Maguire, 5 Ir. Ch. 78 ; Nichols
v. Eaton, 91 U. S. 716; BramhaJJ v.
Ferris, 14 N. Y. 41; Emery \. Van
Syckel, 17 N. J. Eq. 564, cited in
Gray's Restraints on Alienation
Where a man settled Ids property
upon himself for life, or until be
should become a bankrupt or insolv-
ent, and after Ins death, bankruptcy
or insolvency, in trust for lii-> wife
and children, and the settlor being in
solvent assigned his property to trus
tees for the benefit of creditors, it
was held that the trust was void as
against the assignee. In re Casey's
Trusts, 4 Irish Ch. 347. A bond pay-
able to trustees for the benefit "i a
wife on bankruptcy of the obligor is
not good. Ex paid Hill, l Cooke'e
Bkr. Law 228; Ex parte Bennet, l
Cooke's Bkr. Law 228 ; In re Murphy.
1 Sch. & Lef. 44 ; Ex parte Taaffe, I
Glyn& J. 110.

648 NICHOLS V. EATON. § 365

§ 365- The dictum in Nichols v. Eaton. — -The court, how-
ever, seemed disinclined to limit the discussion to the ques-
tions before it. The controverted doctrine against which
we complain is declared to be a dictum, for the court says:1
" We have indicated our views in this matter rather to
forestall the inference, that we recognize the doctrine
relied on by appellants, and not much controverted by
opposing counsel, than because we have felt it necessary
to decide it." The opinion adds that the lack of time has
not "permitted any further examination into the decisions
of the State courts." Even the successful counsel did
not argue in favor of, and manifestly did not believe in
the advanced positions taken by the court. These posi-
tions were not necessary to gain his case. Referring to
the implication in the remark of Lord Eldon, already
quoted, the court were unable to see that the power of
alienation was a necessary incident to a life estate in real
property, or that the rents and profits of real property,
and the interest and dividends of personal property, might
not be enjoyed by an individual without liability for his
debts attaching as a necessary incident to such enjoyment.
The statement is made that the English Chancery
doctrine hostile to spendthrift trusts " is comparatively
of modern origin." These obnoxious trusts certainly are
modern creations, and Chancery was loyally following
the common law in promptly declaring the estate of
the beneficiary therein alienable and liable for debts.
The ruling of Chancery was not "ingrafted" upon the
common law as stated in Nichols v. Eaton ; it followed
it.2 The opinion continues : " Nor do we see any reason,
in the recognized nature and tenure of property and its
transfer by will, why a testator who gives, who gives
without any pecuniary return, who gets nothing of prop-
erty value from the donee, may not attach to that gift

• 91 U. S. 729. 8 See Gray on Restraints, § 256.

§ 365 NICHOLS V. EATON.

the incident of continued use, of uninterrupted benefil of
the gift, during the life of the donee. Why a parent, or
one who loves another, and wishes to use his own prop-
erty in securing the object of his affection as far as
property can do it, from the ills of life, the vicissitudes ol
fortune, and even his own improvidence, or incapacity for
self-protection, should not be permitted to do so, is not
readily perceived." In other words vagabond spend
thrifts are, with infants and lunatics, to be favored with
special protection. But the infant cannot use his pro-
tection as a sword; if he does the protection is forfeited ;
while the beneficial contracts of a lunatic are binding
upon his estate. The spendthrift, on the other hand,
may with impunity use the exemption of his trust income
as a rapier. We lodge our protest not against provision
being made for " the ills of life," or " improvidence," or " in-
capacity " of the object of the donor's affection, but against
raising barrieis for the protection of the donee from the
righteous wrath of the creditor whom he has wronged.
If the spendthrift enjoys the comforts of income, so does
the creditor whose property he has taken. If the spend-
thrift has children dependent upon him, so has the
creditor. Is it a wise public policy to allow individuals
to practically create disabilities in cases where the general
policy of the law has raised none, and to devise trust
schemes to enable worthless insolvents to elude the pay-
ment of righteous claims ? Should we allow a donor to
cover the worthless object of his regard with an asbestos
blanket which judicial writs cannot penetrate. The opinion
argues that the only ground on which a spendthrift trust
is against public policy "is that it defrauds the creditors
of the beneficiary." This is scarcely correct. Public
policy is, or should be, hostile to inalienable estates,
whether legal or equitable, and opposed to repugnant
conditions that hamper property; hostile to properu

650 NICHOLS V. EATON. § 365

rights divested of property responsibilities ; hostile to the
creation of unnecessary disabilities to protect people sui
juris ; hostile to exemptions which protect more than the
simple necessaries of life ; hostile to combinations that
divest insolvency of its sting. The cases cited in support
of the views of the court l were chiefly from Pennsylvania,8
and closed with the well-known and unfortunate New
York case of Campbell v. Foster.3 This authority, as we
have already seen,4 contains a dictum to the effect that
the interest of a beneficiary in a trust fund created by a
person other than the debtor, is not available to creditors,
but, as heretofore shown,5 this dictum is expressly
repudiated and exploded by Rapallo, J., in delivering the
opinion of the New York Court of Appeals in Williams
v. Thorn,6 and the principle in support of which the case
is cited in Nichols v. Eaton has been proved over and
over aeain never to have been the law of that State.

Nichols v. Eaton embodied a dangerous and startling
dictum, the influence of which is spreading like the black
plague. It refused to recognize or follow the law of the
State7 where the appeal originated,8 and repudiated

1 Leavitt v. Beirne, 21 Conn. 1; Wood, 42 Hun (N. Y.) 636 ; Spindle v.

Nickell v. Handly, 10 Gratt. (Va.) Shreve 111 U. S. 546, 4 S. C. Rep. 522 ;

336; Pope's Ex'rs v. Elliott, 8 B. Andrews v. Whitney, 82 Hun (N. Y.)

Mon. (Ky.) 56. 123, 31 N. Y. Supp. 164 ; Bunnell v.

■' Fisher v. Taylor, 2 Rawle (Pa.) Gardner, 4 App. Div. (N. Y.)322, 88

33; Holdship v. Patterson, 7 Watts N. Y. Supp. 569 ; McEvoy v. Applehy,

(Pa.) 547; Shankland's Appeal, 47 Pa. 27 Hun (N. Y.) 44. See Tolles v.

St. 113; Ashhurst v. Given, 5 W. & Wood, 99 N. Y. 616, 1 N. E. Rep. 251,

S. (Pa.) 323 ; Brown v. Williamson, 16 Ahb. N. C. (N. Y.) 1, and the col-

36 Pa. St. 338; Still v. Spear, 45 Pa. lection of eases in the notes .

St. 168. See § 368. ' Local decisions on legal or equit-

3 35 N. Y. 361. See Cutting v. Cut- able property rights will be fol-
ting, 86 N. Y. 546. lowed in Federal tribunals. Orvis

4 See §§ 45, 360. v. Powell, 98 U. S. 176; Lloyd v.
6 See §§45, 360. Fulton, 91 U. S. 479; Brine v. Ins.
6 70 N. Y. 270 ; 2d Appeal, 81 N. Y. Co., 96 U. S. 627.

381,44 N. E. Rep. 169; Wetmore v. 8 Tillinghast v. Bradford, 5 R. 1.

Wetmore, 149 N. Y. 520 ; Kilroy v. 205.

§ 3^5 NICHOLS V. EA'loN.

the settled English rule.1 It revives in a measure
the principle of the objectionable statute 1 )<• Donis
which was practically superseded by Taltarum in

1472. Are we to be turned back to the thirteenth century
rule in which family pride and military oppression v.
rampant ? If the question whether or not it was permissible
aside from the rules of law establishing the tenure by
which property is held and transferred, to allow a debtor
to enjoy a right or interest in property free from the claims
of creditors, were an open one, we should certainly answer
that popularly speaking such a policy was neither judi-
cious, safe nor wise.3 This conclusion is not necessarily
rested wholly upon the theory that such a form of \>
ing property in a debtor is a fraud upon creditors, but
rather upon the idea that property, by the rules of law.
should include not only the right of enjoyment, but also
the right of alienation and the incident of liability for
debts. While it is true that the owner of property may,
while he owns it, use it as he likes, yet he should not be
permitted to limit or control its use after he parts with
it 4 by creating an income for a spendthrift which in its
power to confer enjoyment upon the beneficiary is, in gen-
eral essentials, much the same as a property right, but
which the beneficiary need not guard or protect by keep-
ing his obligations or respecting the rights of his fellow
men, since the income cannot be touched or taken from
him. These trust estates and incomes are, in the opinion,
likened to statutory exemptions; the analogy is mis-
takenly considered perfect ; the creditor, it is said, has no
right to look to either of these sources for satisfaction of
his claim. We challenge the justness of the analogy and
question the correctness of the rule sought to be formu-
lated from it. It must have been thoughtlessly employed.

1 Brandon v. Robinson, 18 Ves. 433. 3See § 360.

3 12 Ed. 4, 19 PI. 25. 4See 10 Am. Law Rev. 595.

652 NICHOLS V. EATON. § 365

Statutory exemptions are trivial in value ; they do not
clothe the debtor with indicia of wealth, or furnish him
with comforts or luxuries while his creditors remain
unpaid It would be inhumane to permit the creditor to
take the insolvent's clothing from his back, the food from
his table or the bed from his house. It is equally against
a wise public policy to deprive the professional man of his
library, the mechanic of his tools, or the teamster of his
horses, for by so doing the insolvent would be pauper-
ized and perhaps rendered a public charge, and the possi-
bility of repairing his ill-fortune by future industry irre-
trievably lost. These guarded exemption statutes, so uni-
versal in their operation, reflect the charitable sentiments
of a noble and generous people, and exhibit a willingness
on the part of the law-makers to extend a protecting hand,
in a limited way, to unfortunate struggling insolvents by
enabling them to work and to restore their fallen fortunes
unmolested ; not by protecting them in a life of opulent
idleness. We deny that the kindly spirit which inspired
this humane and necessary legislation can be tortured or
perverted so as to subserve the purpose of shielding vaga-
bond spendthrifts from the remedies of their creditors1

1 In Spindle v. Shreve, 9 Biss. 199, could be held for the benefit of the
200, 4 Fed. Rep. 136, the will con- creditors; or whether it was an estate
tained this provision: "One-half of which was to be held for his personal
each share (which half I wish to be benefit for life, and over which he had
income-paying real estate) I desire to no power or control, and which could
be set apart and conveyed to a trustee, not go for the benefit of creditors. I
to be held for the use and benefit of have come to the conclusion," con-
each child during his or her life, and tinues Drummond, J., "that under
then descend to his or her heirs, with- the provisions of this will there was no
out any power or right on the part of estate which passed to the assignee,
said ctyld to encumber said estate, or but that the property in Chicago is to
anticipate the rents thereof." One of be held by the trustee to whom it was
the children became a bankrupt, and conveyed by the executor, for the Den-
tin- question presented upon a bill filed efit of the son during his life, and that
by his assignee was whether this child the rents and profits of the estate are
' ' had such an interest in this property to be paid over to him personally, and
that it passed to the assignee, and so that he has no power to transfer any

§ 365 NICHOLS V. EATON.

In Mississippi the court says : " Our statutes upon the sub-
ject of exemptions indicate a clear public policy that
exemption from personal pauperism is of greater concern
than the rights of creditors." ' This is true as regards
mechanics' tools, simple household essentials and similar
exemptions, but trust incomes are not within the spirit.
letter or equity of these statutes. The analogy is being
abandoned and the exemption of trust incomes justified
upon the ground that the donor of the trust may do as he
pleases with his money. But is it wise to permit him in
so doing to violate public policy; to attach repugnant
conditions to equitable estates, to create funds which con-
fer the comforts of wealth divested of its responsibilities ;
to put creditors out of the category of the favored class ;
to create estates that are exempt from judicial writs ; and to
control the execution of these extraordinary trusts from
the tomb ? Is it not wiser that the donor's power to dis-
pose of his wealth should be regulated by reason and
made to conform to a wise public policy ?

interest which he has in the estate so by creditors." See Spindle v. Shreve,

as to defeat the provisions made in 111 U.S. 547. It is said in New Jei

the will. This will is attacked on the sey that the jurisdiction of the Court

ground that the provision made for the of Chancery in reaching property 1 >f .1

son is contrary to public policy, and judgment-debtor does not extend to

is, therefore, inoperative and void. I trust properly where the trusl has

hardly think the authorities warrant been created by some person other

that conclusion, and, if they do not, than the debtor. Hence where a mum

then the only question is, What is the was left to executors in trusl to

legal effect of this provision in the will, pay the income and such part of the

and what was the testator's intention principal as the cestui que trust Bh< Mild

in relation to the estate which was to wish, to her, and she requested the

be held by the trustee? The author- trustees to invest the fund in a farm,

ities collected in the case of Nichols v. it was held that such farm could not

Eaton, 91 U. S. 716, show that it was be reached by a creditor of the ,•, stui

competent for the testator to make que trust. Lippincott v. Evens.

such a provision as this, namely: to J. Eq. 553. See Easterly v. Keney,

declare by his will that his estate, or 36 Conn. 18.

any portion of it, might be held for a 'Leigh v. Earrison, 69 Miss 928,

child's sole benefit during life, and in 934, 11 So. Hep. 604
such a wav that it could not be readied

654 THE CORRECT RULE. § 366

§366. The correct rule. — The true rule should be that
'* whatever a man can demand from his trustees, that his
creditors can demand from him." 1 In Tillinghast v.
Bradford,2 it appeared that the devise was to T. in trust
to pay the income to H. for life ; anticipation or
payment to assigns was prohibited, the income being
intended for the sole and separate use of H. An assignee
of H. for the benefit of creditors was awarded the income
for the life of H. The court said: "This has been the
settled doctrine of a court of chancery, at least since
Brandon v. Robinson,3 and, in application to such a
case as this, is so honest and just that we would not
change it if we could. Certainly no man should have an
estate to live on, but not an estate to pay his debts with.
Certainly property available for the purposes of pleasure
or profit should be also amenable to the demands
of justice."4 In Bramhall v. Ferris,6 Comstock, J.'
observed that if a bequest is given "absolutely for life,
with no provision for its earlier termination, and no
limitation over in the event specified, any attempt of
the testator to make the interest of the beneficiary
inalienable, or to withdraw it from the claims of creditors,
would have been nugatory. Such an attempt would be
clearly repugnant to the estate in fact devised or
bequeathed, and would be ineffectual for that reason as
well as upon the policy of the law." 6 And where trustees
held property with power to apply such portion of it as

1 Gray on Restraints, § 166. Com- Eaton, 91 U. S. 716, came up on ap-

pare Parsons v. Spencer, 83 Ky. 305 ; peal from the State in which Tilling-

Smith v. Towers, 69 Md. 103, 14 Atl. hast v. Bradford, 5 R. I. 205, was

Rep. 497; 15 Id. 92. decided.

!5R. I . 205. s 14 N. Y. 41.

lv Ves. 429. « Citing Blackstone Bank v. Davis,

4 Sec Pace v. Pace, 73 N. C. 119; 21 Pick. (Mass.) 42 : Hallett v. Thonip-

Bailie v. McWhorter, 56 Ga. 183; eon, 5 Paige (N. Y.) 583; Graves v.

Easterly v. Keney, 36 Conn. 18. It Dolphin, 1 Sim. 66; Brandon v. Rob-

Bhould be noted that Nichols v. Lnson, 18 Ves. 429.

§ 367 BROADWAY BANK V. ADAMS.

they saw fit to the education and maintenance ol a bene
ficiary until he should reach twenty-five years, and then
to convey the principal with all accretions to him, the
power being given to the trustees in their discretion to
convey the estate to the beneficiary before he was tw<
five years of age, it was held that the beneficiary's inl
est was liable for his debts.1

But what are we to expect next when the courts declare
that "large masses of property are, in pursuance of a
public policy, finding expression in legislation, exempt
from liability for debts?"2 And what are we to expect
when the courts of a State like Massachusetts incline to
hold that equitable rights can be exempted from tin-
process of creditors by a declaration to that effect con-
tained in the deed or will ?

§367. Broadway National Bank v. Adams. — We will
next notice an important case in Massachusetts — Broad-
way National Bank v. Adams,3 another pillar in the tem-
ple of spendthrift trusts. The object of the bill was to
reach and apply to the payment of the plaintiff's claim
the income of a trust fund created for the debtor's
benefit by the will of his brother. Briefly the will gave
$75,000 to executors, in trust, to pay the net income to
the debtor semi-annually during his natural life, the pay-
ments to be made personally or upon his order or
receipt in writing, " in either case free from the inter-
ference or control of his creditors, my intention being

'Daniels v. Eldredge, 125 Mass. Massengill, 86 Tenn. 81, 5 S. W. Rep.

356. See Havens v. Heal}% 15 Barb. 719; Roberts v. Stevens, si M

(N. Y.) 296. 24 Atl. Rep. 873, and cases cited;

3 Jourolmon v. Massengill, 86 Term. Smith v. Towers, 69 M.I. 84,14 Ail.

81, 104, 5S. W. Rep. 719. Rep. 497, 15 [d. 92; Garland v. Oar-

3 133 Mass. 170. See Billings v. land, 87 Va. 703, 13 S. E. Rep 478;

Marsh, 153 Mass. 311, 26 N. E. Rep. Leigh v. Harrison, 69 Miss.

1000; Wemyss v. White, 159 Mass. So. Rep. 604.
484, 34 N. E. Rep. 718; Jourolmon v.

656 BROADWAY BANK V. ADAMS. § 367

that the use of said income shall not be anticipated by
assignment." The income after the debtor's death was
to go to his wife and children, and upon the death or
remarriage of the wife, the principal and accumulations
were to be divided among the children. Manifestly the
intention of the testator was that the income should be
free from the claims of creditors, and that the courts
should be unable to compel the trustee to divert the income
unless the provisions and intention were unlawful. The
court observe at the outset that " the question whether
the founder of a trust can secure the income of it to the
object of his bounty, by providing that it shall not be
alienable by him or be subject to be taken by his cred-
itors, has not been directly adjudicated " in Massachu-
setts, but say that the tendency of the decisions has been
in favor of such a power in the founder.1 The reason
of the rule that a restriction upon the power of aliena-
tion is void because it is repugnant to the grant, is said
not to apply to the case of a transfer of the property in
trust, as by the creation of the trust the property passes
to the trustee with all its incidents and attributes unim-
paired. The trustee ''takes the whole legal title to
the property, with the power of alienation ; the cestui
que trust takes the whole legal title to the accrued
income at the moment it is paid over to him. Neither the
principal nor the income is at any time inalienable." It
is conceded by the court that, from the time of Lord
Eldon, the rule has prevailed in the English Court of
Chancery, to the effect that when the income of a trust
estate is given to any person (other than a married
woman) for life, the equitable estate for life is alienable
by, and liable in equity to the debts of, the cestui que

Citing Braman v. Stiles, 2 Pick. Mass. 425; Ball v. Williams, 120
160; Perkins v. Bays, 3 Gray Mass. 344; Sparhawk v. ("loon, T2.">
Mass.i 406; RuBseU v. Grinnell, lOo Mass. 263.

§ 367 BROADWAY BANK V. ADAMS. 657

trust, and that this quality is so inseparable from the
estate that no provision, however express, which does
not operate as a cesser or limitation of the estate itself,
can protect it from his debts.1 The English rule, the
court observes, has been followed in some of the American
cases,2 while other courts " have rejected it, and have
held that the founder of a trust may secure the benefit of
it to the object of his bounty, by providing that the
income shall not be alienable by anticipation, nor subject
to be taken for his debts."3 Morton, C. J., said : " The
founder of this trust was the absolute owner of his prop-
erty. He had the entire right to dispose of it, either by
an absolute gift to his brother, or by a gift with such
restrictions or limitations, not repugnant to law, as he saw

fit to impose We do not see why the founder of a

trust may not directly provide that his property shall go
to his beneficiary with the restriction that it shall not be
alienable by anticipation, and that his creditors shall not
have the right to attach it in advance, instead of indirectly
reaching the same result by a provision for a cesser or a
limitation over, or by giving his trustees a discretion as to
paying it. He has the entire jus disponendi, which imports
that he may give it absolutely, or may impose any restric-
tions or fetters not repugnant to the nature of the estate
which he gives. Under our system creditors may reach
all the property of the debtor not exempted by law, but
they cannot enlarge the gift of the founder of a trust, and
take more than he has given."

'Brandon v. Robinson, 18 Ves. & B. Eq. (N. C.) 480; Mebane v.

429 ; Green v. Spicer, 1 Russ. & Myl. Mebane, 4 Ired. Eq. (N. C.) 131.
395 ; Rochford v. Hack man, 9 Hare 3 Citing Holdsbip v. Patterson, 7

475 ; Trappes v. Meredith, L. R. 9 Watts (Pa.) 547 ; Shankland's Appeal,

Eq. 229; Snowdon v. Dales, 6 Sim. 47 Pa. St. 113; Rife v. Geyer, 59 Pa.

524 ; Rippon v. Norton, 2 Beav. 63. St. 393 ; White v. White, 30 Vt. 338 ;

2Tillinghast v. Bradford, 5 R. I. Pope's Ex'rs v. Elliott, 8 B. Mon.

205; Heath v. Bishop, 4 Rich. Eq. (Ky.)56; Nichols v. Eaton, 91 U. S.

(S. C.) 46 ; Dick v. Pitchford, 1 Dev. 716,; Hyde v. Woods, 94 U. S. 523.
42

658 SPREAD OF THE DOCTRINE. § 367a

This is probably one of the most advanced statements
of the objectionable doctrine, though Claflin v. Claflin 1
in some respects outranks it. Reference is here made to
cases like Broadway National Bank v. Adams, and to the
dictum in Nichols v. Eaton, now much quoted and relied
upon, not as embodying salutary rules or wise principles
of law, but rather to record a protest against the existence
and growth of a class of cases of which these have been
the forerunners. The creation of an aristocracy of prodi-
o-als who can dwell in luxury and defy their creditors,
brings the administration of justice into disrepute, and has
a demoralizing influence upon industrious people. The
creditor, as we have said, is unjustly deprived of the power
to compel his debtor to forego the comforts and luxuries of
wealth, or to feel the privations and inconveniences inci-
dent to insolvency. The tendency of these cases must
be checked by legislation, or the sober second thought of
the courts ; the doctrine will not be indefinitely tolerated
by the American people, for it is both undemocratic and
not in keeping with the spirit of American institutions.^

§ 367a. Spread of the doctrine. — None of the defects and
inaccuracies instanced moved the courts to re-examine the
dictum in Nichols v. Eaton. It has spread in all directions,
and some States have reversed former well-decided cases
and hastened to adopt the unfortunate conclusions of the
dictum. Smith v. Towers,2 in Maryland, is one of the most
startling and instructive of the cases following Nichols v.
Eaton,3 and Broadway National Bank v. Adams,4 and
.departing from the old landmarks. The devise was made to
a trustee to pay the income into the debtor's "own hands,

L49 Mass. 19, 30 N. E. Rep. 454. 452, '.) S. W. Rep. 785; Jourolmon v.

69 Md. 77. II At). Rep. 197, 15 I<1. Massengill, 86 Tenn. 81, 5 S. W. Rep.

92 : Maryland Grange A.gency v. Lee, 719; Garland v. Garland, *7 Va. 75S,

72 Md L61, L9 All. Rep. ".34. 'Sees. P. 18 S. E. Rep. 478.

Barnes? Dow, 59 Vt. 530, 10 Atl. Rep. 91 U.S. 727.

258; Partridge v. Cavender. 9<> Mo. ' !:'.:{ M;iss. 170.

§ 367^ SPREAD OF THE DOCTRINE. 659

and not into another, whether claiming by his authority
or otherwise." On the debtor's demise the property was
given in fee to his children. The creditor's suit failed
to reach the debtor's interest in this income. Alvey, C. J.,
filed a strong dissenting opinion which clearly sets forth
the arguments advanced against these obnoxious trusts.1
In Connecticut the cases are not uniform. The court
employs this language in one decision : " All property
exempt by statute from attachment is within the excep-
tion ; so is ordinary trust property designed to secure a
maintenance for some unfortunate debtor ; so also the
income of trust property, where it is payable to the bene-
ficiary at the discretion of the trustee." ~ In Pennsyl-
vania it is said : " We do not approve of that portion of
the opinion of the learned court below in which it was
held that a married woman cannot make a valid spend-
thrift trust in favor of her husband. " 3 As will appear,
the decisions are in some confusion in that State. In
Wanner v. Snyder,4 a charge upon the income was held
to exempt it from the attack of the creditors of the bene-
ficiary, and much the same position is assumed in West
Virginia.5 North Carolina now leans somewhat against
alienations of equitable estates,6 though some cases are
the other way.7 The trust tendency shows itself a little
in Alabama,8 though most of its cases follow the English

1 Compare Baker v. Keiser, 75 Md. 5 McClure v. Cook, 39 W. Va. 579,
338, 23 Atl. Rep. 735. 20 S. E. Rep. 612.

2 Tolland County Ins. Co. v. Under- s Monroe v. Trenholm, 112 N. C.
wood, 50 Conn. 493. But compare 634. 17 S. E. Rep. 439; Kirby v.
Farmers' & M. Savings Bank v. Boyette, 116 N. C. 165, 21 S. E. Rep.
Brewer, 27 Conn. 600; Tarrant v. 697 ; S. c. again 118 N. C. 244, 24 S. E.
Backus, 63 Conn. 277, 287, 28 Atl. Rep. 18.

Rep. 46 : Donalds v. Plumb, 8 Conn. 7 See Mebane v. Mebane, 4 Ired.

447 ; Easterly v. Keney, 36 Conn. 18. Eq. (N. C.) 131 ; Dick v. Pitchford, 1

3 Wanner v. Snyder, 177 Pa. St. Dev. & Bat. Eq. (N. C.) 480; Pace v.
208, 35 Atl. Rep. " 604. See § 368 ; Pace, 73 N. C. 119.

Rife v. Geyer, 59 Pa. St. 393. s Moses v. Micou, 79 Ala. 564. Cotn-

4 177 Pa. St. 208. pare Bell v. Watkins, 82 Ala. 512.

66o

SPREAD OF THE DOCTRINE.

§367^

rule.1 The new doctrine has been taken up in Vermont,2
Missouri,3 Tennessee,4 Virginia,5 Mississippi,6 Indiana,7
Delaware,8 Massachusetts,9 Illinois10 and Maine.11 Against
these trusts are Rhode Island,12 New York prior to its
statutory policy,13 and in a limited way under its statutory
policy,11 South Carolina,15 Georgia,16 Ohio,17 Kentucky,18
though the decisions waver,19 New Jersey but for its statu-

1 Jones v. Reese, 65 Ala. 134 ; Rob-
ertson v. Johnston, 36 Ala. 197.

8 Barnes v. Dow, 59 Vt. 530, 10 Atl.
Rep. 258. Compare White v. White,
30 Vt. 338.

3 Partridge v. Cavender, 96 Mo.
452, 9 S. W. Rep. 785 ; Jarboe v. Hey,
122 Mo. 349, 26 S. W. Rep. 968. Com-
pare Mcllvaine v. Smith, 42 Mo. 45 ;
Lackland v. Smith, 5 Mo. App. 153 ;
Pickens v. Dorris, 20 Mo. App. 1 .

4 Jonrolmon v. Massengill, 86 Tenn.
81, 5 S. W. Rep. 719. See Porter v.
Lee, 88 Tenn. 782, 14 S. W. Rep. 218.
Compare Turley v. Massengill, 7 Lea
(Tenn.) 353 ; Hooberry v. Harding. 3
Tenn. Ch. 677 ; s. c. on appeal, 10 Lea
(Tenn.) 392.

5 Garland v. Garland, 87 Va. 758, 13
S. E. Rep. 478. Compare Johnston v.
Zane, 11 Gratt (Va.) 552; Perkins v.
Dickinson, 3 Gratt (Va.) 355.

6 See Leigh v. Harrison, 69 Miss.
923.

1 See Thompson v. Murphy, 10 Ind.
App. 464, 37 N. E. Rep. 1094 ; Martin v.
Davis, 82 Ind. 38.

8 Gray v. Corbit, 4 Del. Ch. 135.

9 Broadway Nat'l Bank v. Adams,
188 Mass. 170; Billings v. Marsh, 153
Mass. 311. In Evans v. Wall, 159
Mass. 104. the court says: "The
general rule is that income may be
reached by a creditor, unless there is
something in the language of the in-
strument creating the trust clearly
showing an intention to the contrary
Sears v. Choate, 146 Mass. 395, 398,
15N. E. Rep. 786; Maynard v. Cleaves,

149 Mass. 307, 308, 21 N. E. Rep.
376."

10Steib v. Whitehead, 111 111.247.
See Springer v. Savage, 143 111. 301,
32 N. E. Rep. 520.

"Roberts v. Stevens, 84 Me. 325,
24 Atl. Rep. 873. In Maine a guardian
may be appointed for a spendthrift.
Young v. Young, 87 Me. 44, 32 Atl.
Rep. 782.

12 Tillinghast v. Bradford, 5 R. I.
205. Compare Ryder v. Sisson, 7 R. I.
341 ; Stone v. Westcott, 29 Atl. Rep.
833.

13 Bryan v. Knickerbacker, 1 Barb.
Ch. (N. Y.) 409 ; Havens v. Healy, 15
Barb. (N. Y.) 296 ; Bramhall v. Ferris,
14 N. Y. 41.

14 See § 367b.

15 Heath v. Bishop, 4 Rich. Eq. (S.
C.) 46. Compare Wylie v. White, 10
Rich. Eq. (S. C.) 294.

18 Bailie v. McWhorter, 56 Ga. 183.
Compare Kempton v. Hallowed, 24
Ga. 52; Mathews v. Paradise, 74 Ga.
523.

11 Wallace v. Smith, 2 Handy (Ohio)
79 : Hobbs v. Smith, 15 Ohio St. 419 ;
Stanley v. Thornton, 7 Ohio C. C. 455.

18 Flournoy v. Johnson, 7 B. Mon.
( Ky.) 693 ; Cosby v. Ferguson, 3 J. J.
Marsh. (Ky ) 264 ; Eastlake v. Jordan.
3 Bibb (Ky.) 186: Samuel v. Salter, 3
Met. (Ky.)»59; Ernst v. Sliinkle, 95
Ky. 608, 26 S. \V. Pep. 813; Knefler
v. Shreve, 78 Ky. 297,

19 White v. Thomas, 8 Bush (Ky.)
661 : Pope v. Elliott, 8 B. Mon. (Ky.)
56.

§ 367b NEW YORK RULE. 66 1

tory policy,1 such policy exempting income unless it
reaches $4,ooo,2 Arkansas 3 and Wisconsin.* These
trusts have certainly gained a stronger footing since our
last edition. The Federal decisions are not to be recon-
ciled and are naturally overshadowed by Nichols v.
Eaton,5 though Nichols v. Levy,6 where the English
rule is stated, is sometimes cited.

§ 367b. New York rule as to trust income. — Cases
arising outside the provisions of the Revised Statutes of
New York favor the seizure of equitable interests.7 The
statute provides that income " beyond the sum that may
be necessary for the education and support " of the bene-
ficiary shall be liable in equity for debts, and that the
beneficiary cannot assign his beneficial interest.8 It has
already appeared,9 that under these statutes surplus
income may be reached by a creditor's bill.10 Kilroy v.
Wood,11 in that State, has been sharply criticised because
it alludes to the debtor as " a gentleman of high social
standing, whose associations are chiefly with men of
leisure, and is connected with a number of clubs, with the
usages and customs of which he seems to be in harmony
both in practice and expenditure." But the court was, in

1 Hardenburgh v. Blair, 30 N. J. 15 Barb. (N. Y.) 296 ; Bramhall v.
Eq. 42 ; Halstead v. Westervelt, 41 Ferris, 14 N. Y. 44.

N. J. Eq. 100. Compare Force v. » See Tolles v. Wood. 99 N. Y. 616,

Brown, 32 N. J. Eq. 118 ; Frazier v. 1 N. E. Rep. 251.

Barnum, 4 C. E. Green (N. J.) 316 ; 9 See Chap. II.

Lippincott v. Evans, 35 N. J. Eq. 553. 10 Williams v. Thorn, 70 N. Y. 270,

2 Freeholders of Hunterdon v. 81 N. Y. 381 ; McEvoy v. Appleby, 27
Henry, 41 N. J. Eq. 388. Hun (N. Y.) 44 ; Tolles v. Wood, 99

3 Lindsay v. Harrison. 8 Ark. 302. N. Y. 616, 1 N. E. Rep. 251 ; Hallett

4 Bridge v. Ward, 35 Wis. 687 ; v. Thompson, 5 Paige (N. Y.) 583
Lamberton v. Pereles, 87 Wis. 449, 58 Craig v. Hone, 2 Edw. Ch. (N. Y.) 376
N. W. Rep. 776. But see Sumner v. Scott v. Nevius, 6 Duer (N. Y.) 672
Newton, 64 Wis. 210; 25 N.W. Rep. 30. DeCamp v. Dempsey, 10 N. Y. Civ.

5 91 U. S. 716. Pro. 210 ; McEwen v. Brewster, 17

6 5 Wall. 433. Hun (N. Y.) 223.

7 Bryan v. Knickerbacker, 1 Barb. " 42 Hun (N. Y.) 636.
Ch. (N. Y.) 409. See Havens v. Healy,

662 SPENDTHRIFT TRUSTS. § 368

the language quoted, merely stating the claim of counsel,
for it adds that " it would seem that evidence might have
been adduced which would establish his ability to live
upon a smaller sum than the whole income," and regrets
that the plaintiff was so weak with his proofs.1 The
range of the inquiry and the nature and extent of the
judgment impounding income is fully set forth in Wet-
more v. Wetmore.~ In New Jersey trust income beyond
$4,000 may be the subject of discovery in aid of
execution.3

§ 368. Spendthrift trusts in Pennsylvania. — It is common
to refer to Pennsylvania as the birthplace and stronghold
of the doctrine of spendthrift trusts.4 Professor Gray
places the blame on Chief-Justice Gibson and adds : '4 The
interference of equity to compel people to pay their
debts seems to have moved the wrath of that sturdy com-
mon lawyer." '' Chief-Justice Agnew said, in Overman's
Appeal :6 "It [a spendthrift trust] is exceptionable in its
very nature, because it contravenes that general policy
which forbids restraints on alienation and the non-pay-
ment of honest debts A trust to pay income for

life may last for the longest period of human existence,
and may run for seventy or eighty years. While the law
simply tolerates such a trust, it cannot approve of it as
contributing to the general public interest. Property tied
up for half a century contributes nothing to the general

1 See Estate of Hoyt, 12 N. Y. Civ. St. 113 ; Ashhurstv. Given, 5W.&S.

Pro. 308, 230; and compare Stow v. (Pa.) 323; Brown v. Williamson, 36

< Ihapin, 4 N. Y. Sup]). 496. Pa. St. 338 ; Still v. Spear, 45 Pa. St.

* 149 N. Y. 521 ; 44 N. E. Rep. 169. 168; Stambaugh's Estate, 135 Pa.

Laws N. J. 1880, p. 274. See Hal- St. 596, 19 Atl. Rep. 1058 ; Gliormley

stead v. Westervelt, 41 N. J. Eq. 100 ; v. Smith, 139 Pa. St. 584, 19 Atl. Rep.

Hunterdon Freeholders v. Henry, 41 135; Mehaffey's Estate, 139 Pa. St.

N.J. Eq. 283, 20 Atl. Rep. 1056.

4 See Fisher v. Taylor, 2 Rawle (Pa. ) 6 Gray on Restraints, § 219.

Holdship v. Patterson, 7 Watts '' 88 Pa. St. 276, 281.
:.H ; Shankland's Appeal, 47 Pa.

§ 368a POWERS. 663

wealth, while it is a great stretch of liberality to the owner-
ship of it to suffer it to remain in this anomalous state for
so many years after its owner has left it behind him.
Clearly it is against public interest that the property of an
after generation shall be controlled by the deed \gu. dead]
of a former period, or that the non-payment of debts
should be encouraged." x The case of Ghormley v.
Smith3 seems to show a disposition to limit spendthrift
trusts to settlements made by a parent in favor of a child.
It is doubtful if such a limitation will stand in that State.
The court says that Brandon v. Robinson 3 is in part the
law of the State, and gravely says that "a person sui juris
could not settle his entire estate upon himself, free from
liability for debts." The cases applicable to these trusts
are in much confusion in Pennsylvania. The authorities
were started in the wrong direction partially by the lack
of equity jurisdiction in the early history of that State.
Even the proverbial Philadelphia lawyer could not deduce
from them any unbending rule.4 Generally the creditor
is defeated in that State in pursuing income, though in a
measure each case is a law unto itself. The creation
of spendthrift trusts has conflicted with the rule against
restraints and repugnant conditions, and is not approved
by some of the judges.

§ 368a. Powers— When not assets. — Elsewhere 5 the stat-
utory policy of New York State in effect removing pow-
ers from the category of assets for creditors6 is considered

1 See Gray on Restraints, £ 234 . 19 Atl. Rep. 302; Goe's Estate, 146

2 139 Pa. St. 584, 592, 21 Atl. Rep. Pa. St. 431, 23 Atl. Rep. 383 ; Bark-

135. er*s Estate, 159 Pa. St. 518, 28 Atl.

3 18 Ves. 429. Rep. 365, 368 ; Wanner v. Snyder. 177

4 See Smeltzer v. Goslee, 172 Pa. St. Pa. St. 208, 35 Atl. Rep. 604.

298, 34 Atl. Rep. 44 ; Keyser's Appeal, 6 See § 40.

57 Pa. St 236; Cooper's Estate, 150 Pa. 6 See Cutting v. Cutting, 20 Hun

St. 576, 24 Atl. Rep. 1057; Hinkle's (N. Y.) 367, on appeal, 86 N. Y. 537;

Appeal, 116 Pa. St. 490, 9 Atl. Rep. Crooke v. County of Kings, 97 N. Y.

938; Beck's Estate, 133 Pa. St. 51, 457.

664 powers. § 368a

and deplored. The same general principle of the exemp-
tion of powers from the process of creditors has been
introduced into Pennsylvania,1 a State in which the courts
evince a tenacious disposition to shield equitable assets
from the attacks of creditors.

1 Commonwealth v. Duffield, 12 Pa. 306 ; s. c. under name of Swaby's Ap-
St. 277; King's Estate, 16 Phila. (Pa.) peal, 14 W. N. C. 553.

CHAPTER XXIV.

BONA FIDE PURCHASERS— ACTUAL AND CON-
STRUCTIVE NOTICE — FRAUDULENT GRANTEES.

§369. Rights of bona fide purchasers.

370. Generality of the rule.

371. Mortgagee as bona fide pur-

chaser.
371a. Execution purchaser.

372. Without notice.

373. Kinds of notice.

374. Constructive notice of fraud.

375. )

„ ' y Rule in Stearns v. Gage.

376a. Anderson v. Blood.

377. Carroll v. Hay ward— Actual be-

lief.

378. Parker v. Conner.

379 1

' ! Facts sufficient to excite in-

380. r

381. j qUUT-

i 382. Actual belief.

383. Purchaser with notice.

384. Purchaser with notice from

bona fide purchaser.
384a. Possession as notice.

385. Fraudulent grantee as trus-

tee.

386. Title from fraudulent vendee.

387. Creditors of fraudulent gran-

tees.

388. Liability between fraudulent

grantees.

389. Fraudulent grantee sharing in

the recovery.
389a. Purchaser pendente lite.

§ 369. Rights of bona fide purchasers. — As has been
observed, creditors have an equitable interest in the
property of their debtors, or in the means the latter have
of satisfying the creditors' demands,1 which the law will,
under certain circumstances, enforce, since the insolvent's
property constituted the foundation and inducement of
the trust and credit.2 But the interests of a bona fide
purchaser3 of a debtor's property are superior to those of

Seymour v. Wilson, 19 N. Y. 418.
See Chap. II.
* Egery v. Johnson, 70 Me. 261. See

3 In Ricker v. Ham, 14 Mass. 141,
the court says : " The term bona fide,
as used in the law upon this subject,
means only that the purchase shall be

a real and not a feigned one." s. p.
Jones v. Light, 86 Me. 443, 30 Atl.
Rep. 71. One who purchases from
an assignee for the benefit of cred-
itors underavoid assignment may be
a purchaser for a valuable considera-
tion. Wilson v. Marion, 147 N. Y.
589, 42 N. E. Rep. 190. A bona fide

666

BONA FIDE PURCHASERS.

369

creditors,1 for the obvious reason that the former has not,
like a mere general creditor, trusted " to the personal
responsibility of the debtor, but has paid the considera-
tion upon the faith of the debtor's actual title to the
specific property transferred."2 In such a case the inter-
ests of the general creditors are superseded or defeated 3
by the purchaser's superior equity.4 It is merely a sub-
stitution of property. The value given or paid by the
purchaser has taken the place of the property which he
received. Hence the rights of a bona fide grantee who
has paid a full valuable consideration are protected,5
though the grantor may have been actuated by a fraudu-
lent intention.6 Still, as we have seen, a grantee is not
protected when he has not paid such a consideration,

purchaser from a fraudulent vendee
takes a good title. O'Neil v. Patter-
son & Co., 52111. A pp. 26.

1 Compare Valentine v. Lunt, 115
N. Y. 496, 22 N. E. Rep. 209, where
a bona fide purchaser for value from
a fraudulent vendee, held the title
against the defrauded vendor.

* Seymour v. Wilson, 19 N. Y. 417,
420 ; Holmes v. Gardner, 50 Ohio St.
175, 33 N. E. Rep. 644. See Frieden-
wald v. Mullan, 10 Heisk. (Tenn.)
229 ; Goshorn v. Snodgrass, 17 W.
Va. 717 ; Thames v. Rembert, 63 Ala.
561 : Collumb v. Read, 24 N. Y. 516 ;
Mansfield v. Dyer, 131 Mass. 200 ;
Comey v. Pickering, 63 N. H. 126 ;
Zoeller v. Riley, 100 N. Y. 102, 2 N.
E. Rep. 388; Simpson v. Del Hoy o,
94 N. V. 189 ; Paddon v. Taylor, 44
N. Y. 371 ; Lore v. Dierkes, 16 Abb.
N. C. (N. Y.) 47; Saunders v. Lee,
101 N. C. 3, 7 S. E. Rep. 590; Bishop
, . Stebbins, 41 Hun (N. Y.) 248.

'See Dorr v. Beck, 76 Hun (N. Y.)
R40 28 X. V. Supp. 206.

• in Zoeller v. Riley, 100 N. Y. 108,
2 N. E. Rep. 388, Earl, J., said : "A
debtor may dispose of his property

with the intent to defraud his cred-
itors and yet give a good title to one
who pays value and has no knowl-
edge of, and does not pai-ticipate in
the fraud. (2 R. S. 137, § 5 : Starin
v. Kelly, 88 N. Y. 418; Murphy v.
Briggs, 89 N. Y. 446 ; Parker v. Con-
ner, 93 N. Y. 118.)" It seems that
where the title of an innocent pur-
chaser is relied on he must positively
deny notice of the equitable rights of
another, although not specifically
charged. Seymour v. McKinstry, 106
N. Y. 230, 12 N. E. Rep. 348, 14 Id.
94.

5 See Hawkins v. Davis, 8 Baxt.
(Tenn.) 508 ; Zick v Guebert, 142 111.
154, 31 N. E. Rep. 601 ; Rindskoph v.
Kuder. 145 111. 607, 34 N. E. Rep. 484 ;
Carnahan v. McCord. 116 Ind. 67. 18
N. E. Rep. 177 ; Sipley v. Wass, 49 N.
J. Eq. 463, 24 Atl. Rep. 233.

' Where a resulting trust is not
evidenced by anything of record, an
innocent bona fide purchaser without
notice will take the estate divested of
the trust. De Mares v. Gilpin, 15 Col.
76, 24 Pac. Rep. 568.

§ 369 BONA FIDE PURCHASERS. 667

though he may have acted in good faith. The two must
concur.1 If no consideration has been given then there
has been no substitution of property. The amount of the
consideration is not necessarily material when the grantor
is solvent,^ but when he is insolvent the kind and amount
of consideration become material and important, even in
the absence of actual intent to defraud. Thus an agree-
ment to support an insolvent grantor may be a valuable
consideration, but it is not sufficient to uphold a convey-
ance as against prior creditors,3 even though there may
have been no actual intent to defraud.4 Persons receiving
a conveyance from a grantor for such a consideration
must see to it that the existing debts of the grantor are
paid,5 and it is immaterial that the consideration com-
prises a present sum of money paid in addition to the
agreement for support, provided the money alone were
palpably inadequate.6

Three things must concur to protect the title of the
purchaser.7 (1) He must buy without notice of the bad
intent on the part of the vendor. (2) He must be a pur-
chaser for a valuable consideration ; and (3) He must
have paid the purchase money before he had notice of

1 Savage v. Hazard, 11 Neb. 327. 3 Rollins v. Mooers, 25 Me. 192-199.

9 N. W. Rep. 83 ; Danbury v. Robin- 4 Webster v. Withey, 25 Me. 326.

son, 14 N. J. Eq. 213. See §§ 15, 207. 5 Hapgood v. Fisher, 34 Me. 407.

In Keyser v. Angle, 40 N. J. Eq. 6 Sidensparker v. Sidensparker. 52

481, 4 Atl. Rep. 641, it appeared that a Me. 481. See Egery v. Johnson, 70

sister purchased land of a brother who Me. 261.

was in debt. She paid $50 cash and ' Dougherty v. Cooper, 77 Mo. 532 ;
gave her note for $650, which he held Herman v. McKinney, 47 Fed. Rep.
for four years though very needy. It 758. The purchaser is protected only
was held that if the sister had notice to the extent of actual payments made
of the fraud before she paid the note before he had notice of the fraud, tin-
she was not a bona fide purchaser, less he be liable on his contract in
even though she had no notice when excess of that amount. Wetmore v.
she took the deed. Woods, 62 Mo. App. 265 ; Riddell v.

5 Usher v. Hazeltine, 5 Me. 471 ; Munro, 49 Minn. 532, 52 N. W. Rep.

Hapgood v. Fisher, 34 Me. 407. 141.

668 BONA FIDE PURCHASERS. § 369

the fraud.1 Chief-Justice Marshall observes that "the
rights of third persons, who are purchasers without notice
for a valuable consideration, cannot be disregarded.
Titles, which, according to every legal test, are perfect,
are acquired with that confidence which is inspired by
the opinion that the purchaser is safe. If there be any
concealed defect, arising from the conduct of those who
had held the property long before he acquired it, of
which he had no notice, that concealed defect cannot be
set up against him. He has paid his money for a title
good at law ; he is innocent, whatever may be the guilt
of others, and equity will not subject him to the penalties
attached to that guilt. All titles would be insecure, and
the intercourse between man and man would be very
seriously obstructed if this principle be overturned."2 In
a recent Minnesota case it is said that the burden of
rebutting the presumption of a fraudulent intent arising
from the continued possession of the property by the
vendor rests on the vendee as against creditors. The
court continued : " But there is no such burden resting
upon the vendee to show that the vendor was not impli-
cated in the fraud, because the fraudulent intent of the
vendor cannot legally affect the rights of a bona fide
purchaser for a valuable consideration and without notice.
It is sufficient if the vendee is innocent of any fraud, and
did not participate therein, and had no notice of the
fraudulent intent of the vendor." 3 Dillon, J., in Gardner
v. Cole,4 said that " where the first conveyance originates
in a fraudulent purpose, and is without any consideration

'See Arnholt v. Hartwig, 73 Mo. pays for it is not entitled to protection

485 ; Bishop v. Schneider, 46 Mo. 472 ; as a bona fide purchaser. Jetton v.

Dixon v. Bill, 5 Mich. 408: Hedrick Tobey, 62 Ark. 84, 34 S. W. Rep. 531.

v. Strauss, 42 Neb. 485, 60 N. W. Rep. 3 Leqre v. Smith, 63 Minn. 26, 65 N.

9SJ8, \V. Rep. 121. See also Leach v. Flack,

« Fletcher v. Peck, 6 Cranch 133. 31 Hun (N. Y.) 605; Griffin v. Mar-
Manifestly one who purchases per- quardt, 21 N. Y. 121.
sonal property on credit and never 4 21 Iowa 205, 214.

§ 37° GENERALLY OF THE RULE. 669

of value, and the grantor remains in possession, and
claiming ownership, sells the property as his own to a
party who buys without actual notice of the prior deed
and pays value, the latter purchaser may avoid the prior
voluntary and fraudulent conveyance." 1 We have seen
that conveyances are void which are made to defraud
subsequent purchasers for a valuable consideration2 Of
course, as we have seen, where it is found as matter of
fact that the purchase of the property was made by col-
lusion with the debtor, with the intent to hinder and
delay creditors, the purchaser has no equities against
such creditors even as regards the amount actually paid.3

§ 370. Generality of the rule. — A court of equity acts
only on the conscience of the party ; and if he has done
nothing that taints it, no demand can attach so as to give
jurisdiction.4 The rule is not limited to cases where
conveyances are made in fraud of creditors, but applies
to cases in which the vendor has been swindled out of
his property by a vendee, for whenever the property
reaches the hands of a bona fide purchaser for value, the
rights and equities of the defrauded owner are cut off.5

1 8ee Hurley v. Osier, 44 Iowa (546. little means, for an expressed con-
See note as to the rights of trans- sideration of $4,900, $800 being paid
ferees and others under conveyances in cash, $250 in a span of horses, and
in fraud of creditors and of trusts, at $450 for labor alleged to have been
end of Lore v. Dierkes, 16 Abb. N. previously performed, two unsecured
C. (N. Y.) 47, 59 notes, one for the sum of $1,000, pay-

2 Anderson v. Etter, 102 Ind. 121, able in two years, and one for $2,000,
26 N. E. Rep. 218. See g 21. payable in five years, and $900 to be

3 Bank of Commerce v. Fowler, paid in certain mortgages. It was
93 Wis. 245 ; Ferguson v. Hillman. 55 held, on the testimony, that the son
Wis. 190, 12 N. W. Rep. 389. See § 198. was not a bona fide purchaser of the

4 Boone v. Chiles, 10 Pet. 177. In land, and that it was liable for the
Knowlton v. Hawes, 10 Neb. 534, 7 payment of the judgment.

N. W. Rep. 286, it appeared that a 6 Paddon v. Taylor, 44 N. Y. 371 ;

father, after an obligation had been Brower v. Peabody, 13 N. Y. 121 ;

incurred, but before judgment, con- Load v. Green, 15 M. & W. 216 ;

veyed his real estate, worth more Smart v. Betnent, 4 Abb. App. Dec.

than $5,000, to his son, who had but (N. Y.) 253 ; Bruen v. Dunn, 87 Iowa

6/0

MORTGAGEE AS A BONA FIDE PURCHASER.

371

" A purchaser for a valuable consideration, without notice
of a prior equitable right, obtaining the legal estate at
the time of his purchase, is entitled to priority in equity
as well as at law, according to the well-known maxim
that when the equities are equal the law shall prevail."1
If creditors condone the fraud the grantee's title is
eood against all comers.2

§ 371. Mortgagee as bona fide purchaser. — A mortgagee
is a purchaser3 to the extent of his interest.4 New York
has taken an advanced position on this question. It is
held in that State that where property is conveyed to a
voluntary grantee, and the latter, at the grantor's request,
executes a mortgage upon the land to a creditor of the
grantor, to secure a debt of the grantor's which existed at
the time of the conveyance, the mortgagee is a bona fide
purchaser for a valuable consideration, and though the
conveyance may be set aside by other creditors, the
mortgagee will not be affected.5 The giving of the mort-

483, 54 N. W. Rep. 468. Though the
Rhode Island statute omits the pro-
vision about bona fide purchasers for
value contained in the English stat-
ute, it is considered that the statute
should be construed the same as
though that provision had not been
omitted. Tiernay v. Claflin, 15 R. I.
220, 2 Atl. Rep. 762.

1 Townsend v. Little, 109 U. S. 512,
3 S. C. Rep. 357. Citing Williams
v. Jackson, 107 U. S. 478, 2 S. C. Rep.
814 ; Willoughby v. Willoughby, 1 T.
R. 763 ; Charlton v. Low, 3 P. Wms.
328; Ex parte Knott, 11 Ves, 609;
Tildesley v. Lodge, 3 Sm. & Giff. 543 ;
Shine v. Gough, 1 Ball & B. 436;
Bowen v. Evans, 1 Jones & La T. 264 :
Vattier v. Hinde, 7 Pet. 252. Ab-
sence <>i good faith must be made out
bya clear preponderance of evidence.
Bradford v. Bradford, 60 Iowa 20-2. I I
N. W. Rep. 254.

2 Millington v. Hill, 47 Ark. 309,
1 S. W. Rep. 547.

3 Boice v. Conover, 54 N. J. Eq.
531, 35 Atl. Rep. 402.

4 Ledyard v. Butler, 9 Paige (N. Y.)
132 ; Murphy v. Briggs, 89 N. Y. 451 ;
Zoeller v. Riley, 100 N. Y. 108, 2 N.
E. Rep. 388; Holmes v. Gardner, 50
Ohio St. 167, 33 N. E Rep. 644 ; Jones
v. Light, 86 Me. 443, 30 Atl. Rep. 71 ;
Chapman v. Emery, I Cowper 278 ;
Hill v. Ahern, 135 Mass. 158 ; Valen-
tine v. Lunt, 115 N. Y. 496, 22 N. E.
Rep. 209.

5 Murphy 'v. Briggs, 89 N. Y. 446.
See upon this confused question 2
Pomeroy's Eq. Jur. ££ 748, 749, and
cases cited ; Metropoliton Bank v.
Godfrey, 23 111. 579 ; Manhattan Co.
v. Evertson, 6 Paige (N. Y.) 457 ; Low-
ry v. Smith, 9 Hun (N. Y.) 514;
Smart v. Betnent, 4 Abb. App. Dec.
(N. Y.) 253; Willoughby v.Willoughby,

§§ 37 la» 37- EXECUTION PURCHASER — WITHOUT NOTICE. 671

gage was regarded as merely applying the property for
the benefit of creditors by rescinding the fraudulent
transaction, and entering into a new valid contract. As
we have seen,1 the law does not deprive parties of the
right to restore to its legitimate purposes property which
has been fraudulently appropriated.2

§ 371a. Execution purchaser. —A purchaser at an execu-
tion sale may bring suit to set aside a prior deed of the
land made in fraud of the judgment-creditor's claim. :i

§ 372. Without notice. — Judge Story observes that : " It
is a settled rule in equity that a purchaser without notice,
to be entitled to protection, must not only be so at the
time of the contract or conveyance, but at the time of the
payment of the purchase-money." 4 On the other hand, it
was said in a case which arose in Georgia that the pur-
chaser at a sale made with intent to defraud creditors, if
himself free from all responsibility for the fraud, was not
affected upon afterward discovering the seller's fraud-
ulent intent, even though he had not then paid the pur-
chase-money, and the notes given for it had not passed
beyond the control of himself and the seller, it not appear-
ing- that he alone could control the notes without the
co-operation of the seller, or that the latter could have
been induced to cancel or surrender the notes, which were
negotiable.5 In the United States, even in States where
the statutes are a literal rescript of the English statutes
of 13 and 27 Elizabeth, the general doctrine is, that the
right of the subsequent purchaser to avoid the first

1 T. R. 763 ; Dickerson v. Tillinghast, 3 Fuller v. Pinson, 98 Ky. 441, 33 S.

4 Paige (N. Y.) 215; Boyd v. Beck, W. Rep. 399.

29 Ala. 713; Wells v. Morrow, 38 Ala. 4Wormley v. Wormley, 8 Wheat.

125 ; Porter v. Green, 4 Iowa 571. 449 ; Hedrick v. Strauss, 42 Neb. 485,

1 See § 176. 60 N. W. Rep. 928. See Arnholt v.

2 Murphy v. Briggs, 89 N. Y. 446. Hartvvig, 73 Mo. 485.

But compare Wood v. Robinson, 22 5 Nicol v. Crittenden, 55 Ga. 497.

N. Y. 564.

672 KINDS OF NOTICE. § 373

conveyance will depend on whether he had notice of its
existence at the date of his purchase.1 This leads us to
the consideration of one of the most important branches
of our subject, the doctrine of notice as applied to covin-
ous alienations.

§ 373- Kinds of notice.— Notice is of two kinds, actual
and constructive.'* Actual notice may be shown to have
been received or given by all degrees and grades of evi-
dence, from the most direct and positive proof to the
slightest circumstance from which a jury would be war-
ranted in inferring notice. It is a mere question of fact,
and is open to every species of legitimate evidence which
may tend to strengthen or impair the conclusion. Con-
structive notice, on the other hand, is a legal inference
from established facts ; and, like other legal presumptions,
does not admit of dispute.3 " Constructive notice," says
Judge Story, "is in its nature no more than evidence of
notice, the presumption of which is so violent that the
court will not even allow of its being: controverted."4
Substantially the same language is employed by Mr. Jus-
tice Woods in Townsend v. Little.5 Chancellor Kent
said : " I hold him chargeable with constructive notice, or
notice in law, because he had information sufficient to
put him upon inquiry."6 "Constructive notice," says
Wright, J., "" is a legal inference from established facts ;

'See Prestidge v. Cooper, 51 Miss. Griffith, 1 Hoffm. Ch. (N. Y.) 155;

77. Wyman v. Brown, 50 Me. 148, Hiern v. Mill, 13 Ves. 120 ; Claflin v.

lays down the rule, however, that a Lenheim, 66 N. Y. 306 ; Birdsall v.

fraudulent voluntary conveyance is Russell, 29 N. Y. 220, 249.

void as against a subsequent pur- 4 Story's Eq. Jur. § 399 ; Rogers v.

chaser even with notice. See Hud- Jones, 8 N. H. 270 ; Cambridge Val-

nal v. Wilder, 4 McCord's (S. C.) Law ley Bank v. Delano, 48 N. Y. 339.

295. 5109 U. S. 511, 3 S. C. Rep. 357.

2 Lord Erskine in Hiern v. Mill, 13 Citing Plumb v. Fluitt, 2 Anstr. 432;

Ves. 120. Kennedy v. Greene, 3 Mylne & K. 699.

5Selden, J., in Williamson v. 6 Sterry v. Arden, 1 Johns. Ch. (N.

Brown, 15 N. Y. 359; Griffith v. Y.) 261, 267.

§ 374 NOTICE OF FRAUD. 673

and when the facts are not controverted, or the alleged
defect or infirmity appears on the face of the instrument,
and is a matter of ocular inspection, the question is one
for the court." 1 Constructive notice has been said to be
of two kinds ; that which arises upon testimony and that
which results from a record.2

Actual notice is usually a question for the jury, and is
to be established by implication or inference from other
facts3 or circumstances.4 There is no particular kind of
evidence necessary to establish it ; anything- that proves
it or constitutes legal evidence of knowledge is com-
petent.5 It is otherwise as to constructive notice. There
the law imputes notice to the purchaser, and whether or
not this will be done upon a conceded state of facts is
not a question for the jury.6

§ 374- Constructive notice of fraud. — The principles
which govern and control the general doctrine of con-
structive notice of fraud as bearing upon our subject are
not always entirely clear. Williamson v. Brown,7 already
cited, contains an important review of the authorities by
the learned Justice Selden, as to the general subject of

1 Birdsall v. Russell, 29 N. Y. 249. innocent and free from any guilty
See Page v. Waring, 76 N. Y. 471. knowledge, or even suspicion of

2 Griffith v. Griffith, 1 Hoffm. Ch. fraud ; but if they find that facts
(N. Y. ) 156. were known to him which were cal-

3 Bradbury v. Falmouth, 18 Me. 65; dilated to put him on inquiry, his
H. T. Simon-Gregory Dry Goods Co. want of diligence in making such in-
v. Schooley, 66 Mo. App. 413. quiry is equivalent to a want of good

4 McNally v. City of Cohoes, 127 N. faith, and the presumption of notice
Y. 350, 27 N. E. Rep. 1043 : Ross v. is a legal presumption which is un-
Caywood, 16 App. Div. (N. Y. ) 592 ; controvertible." Rapallo, J., in Par-
Anderson v. Blood, 152 N. Y. 285, 46 ker v. Conner, 93 N. Y. 124. "The
N. E. Rep. 493. whole basis of the rule is negligence

5 Trefts v. King, 18 Pa. St. 160 in the purchaser. It is a question of

6 Birdsall v. Russell, 29 N. Y. 249. good faith in him." Peckham, J.,
" If the doctrine of constructive notice in Acer v. Westcott. 46 N. Y. 384, 389.
is applicable, it is immaterial how the ' 15 N. Y. 362; H. T. Simon-Gregory
fact is. The jury may be satisfied that Dry Goods Co. v. Schooley, 66 Mo.
the purchaser was, in fact, entirely App. 413.

43

674 NOTICE OF FRAUD. • § 374

notice. Baker v. Bliss,1 where the question was as to
whether or not a purchaser took with knowledge of the
fraud affecting the title of his vendor, seems to clearly
establish the rule that to charge a party with such notice
the circumstances known to him must be of such charac-
ter as ought reasonably to have excited his suspicion,
and led him to inquire.2 It appeared that the purchaser
had paid a valuable consideration, and had testified and
the referee had found, that he had no actual notice or
knowledge of the fraud which rendered the conveyance
void as against creditors, '' but that he had sufficient
knowledge to put him upon inquiry, and that such knowl-
edge was equivalent to notice, and in law amounted to
constructive notice." Cases like Williamson v. Brown 8
are cited and applied in the opinion. In Ellis v. Horr-
man,4 a record act case, Tracy, J., said : " Notice suffi-
cient to make it the duty of a purchaser to inquire, and
failure so to do when information is easily accessible, is
equivalent to actual notice within the rule of the author-
ities." Paige, J., observed in Williamson v. Brown : 5
"A party in possession of certain information will be
chargeable with a knowledge of all facts which an inquiry
suggested by such information, prosecuted with due dili-
gence, would have disclosed to him."6 In Reed v.

1 39 N. Y. 70. Paige (N. Y.) 421 ; Taylor v. Baker, 5

- See Burnham v. Brennan, 10 J. Price 306 ; Jones v. Smith, 1 Hare 43-

& S. (N. Y.) 79; reversed, 74 N. Y. 55. Compare Pringle v. Phillips. 5

597; Blum v. Simpson, 71 Tex. 628, Sandf. (N. Y.) 157; Danforth v. Dart,

9 S. W. Rep. 662 ; Hadock v. Hill, 75 4 Duer (N. Y.) 101 ; Roeber v. Bowe,

Tex. 193, 12S. W. Rep. 971. 20 Hun (N. Y.) 556; Pitney v.

15 N. Y. 362. Leonard, 1 Paige (N. Y. 461; Peters

4 90 N. Y. 473. v. Goodrich, 3 Conn. 146 : Booth v.

15 N. Y. 364. Barnum, 9 Conn. 286; Whitbread

■ See Howard Ins. Co. v. Halsey, 4 v. Jordan, 1 Y. & C. 328; Shaw v.

Sandf. (N.Y.) 578; Kennedy v. Green, Spencer, 100 Mass. 390; Jenkins

3 Mylne<& K. 699; Flagg v. Mann, 2 v. Eldredge, 3 Story lsi ; Heaton v.

Sumner 534; Be stl v. Buchan, 76 Prather, 84 111. 330; Garahy v. Bay-

N. Y. 386; Grimstone v. Carter, 3 ley, 25 Tex. Supp. 294; Birdsall v.

§375 STEARNS V. GAGE. 675

Gannon,1 it appeared that the parties dealt upon the
assumption that there were liens or incumbrances upon the
property, but their number, extent or character was not
stated. Rapallo, J., said : "The insertion of these clauses
in the instrument was sufficient to put the plaintiffs on
inquiry as to the extent and description of the existing
incumbrances referred to." It was such notice as in the
language of the authorities " would lead any honest man,
using ordinary caution, to make further inquiries."2
" Constructive notice," said Haight, J., in Farley v. Car-
penter,3 " is a knowledge of circumstances which would put
a careful and prudent person upon inquiry, or such acts as
the law will presume the person had knowledge of, on the
grounds of public policy ; as, for instance, the laws and
public acts of the government, instruments recorded pur-
suant to law, advertisements in a newspaper of a notice or
process authorized by statute."4

§ 375- Rule in Stearns v. Gage. — The question of what
constitutes " notice " of fraud, or of a fraudulent intent, is
one of manifest importance to creditors and purchasers.

Russell, 29 N.Y. 220; Moore v. William- generally applied to the examination

son, 44 N. J. Eq. 496, 15 Atl. Rep. 587 ; of titles to real estate. It is the duty

Kellar v. Taylor, 90 Ala. 289, 7 So. of a purchaser of real estate to inves-

Rep. 907 ; Allen v. Stingel, 95 Mich, tigate the title of Ids vendor, and to

195, 54 N. W. Rep. 880 ; Weare v. take notice of any adverse rights or

Williams, 85 Iowa 253, 52 N. W. Rep. equities of third persons which lie has

328 ; Washburn y. Huntington, 78 the means of discovering, and as to

Cal. 573, 21 Pac. Rep. 305. which he is put on inquiry. If he

1 50 N. Y. 345. See Parker v. Con- makes all the inquiry which due dili-
ner, 93 N. Y. 126. gence requires, and still fails to dis-

2 Whitbread v. Jordan. I Y. & C. cover the outstanding right, he is ex-
328. See Acer v. Westcott, 46 N. Y. cused ; but if he fails to use due dili-
384 ; Cambridge Valley Bank v. De- gence, he is chargeable, as matter of
lano, 48 N. Y. 340. Compare, how- law, with notice of the facts which
ever, Battenhausen v. Bullock, 11 111. the inquiry would have disclosed."
App. 665. Parker v. Conner, 93 N. Y. 124. See

3 27 Hun (N. Y.) 362. Acer v. Westcott, 46 N. Y. 384, and

4 "The doctrine of constructive no- cases cited,
tice," says Rapallo, J. " has been most

6y6 stearns v. gage. § 375

Some apparent dissension has been introduced into this
branch of the subject by a dictum of Miller, J., in Stearns
v. Gage,1 followed by the New York Supreme Court in
Farley v. Carpenter,2 and approved in Parker v. Con-
ner,3 and still being applied in the Court of Appeals.1
According to the court's own statement it could not "be
claimed that any question as to constructive notice was
presented upon the trial" in Stearns v. Gage, and it seems
unfortunate that the debatable sentences should have been
embodied in the opinion. The court observes that " actual
notice is required where a valuable consideration has been
paid." The statute relating to fraudulent conveyances ''
in New York contains a provision that it " shall not be
construed in any manner, to affect or impair the title of a
purchaser for a valuable consideration, unless it shall
appear that such purchaser had previous notice of the
fraudulent intent of his immediate grantor, or of the
fraud rendering void the title of such grantor." The court
says that "this plainly means that actual notice shall be
given of the fraudulent intent or knowledge of circum-
stances which are equivalent to such notice. Circum-
stances to put the purchaser on inquiry where full value
has been paid are not sufficient? .... No authority has
been cited which sustains the principle that a purchaser

1 79 N. Y. 102. See Wilmerding v. Rep. 629; Van Raalte v. Harrington,

Jarraulowsky, 85 Hun (N. Y.) 285, 32 101 Mo. 610 14 S. W. Rep. 710 ; State

X. Y. Supp. 983; Wilson v. Marion. v. Merritt, 70 Mo. 275; Knower v.

147 X. Y. 596. 42 N. E. Rep. 190: Cadden Clothing Co., 57 Conn. 221, 17

Jacobs v. Morrison, 136 N. Y. 105, 32 Atl. Rep. 580; Seavy v. Dearborn, 19

X. E. Rep. 552; Anderson v. Blood, N. H. 3.r)l ; Summons v. O^Neill, 60

152 X. Y. 285, 46 N. E. Rep. 493 ; King Mo. App. 536 ; Wilson v. Marion, 147

v. Holland Trust Co., 8 App. Div. N. Y. 596 ; 42 N. E. Rep. 190.

N. Y.) 117, 40 N. Y. Supp. 480. *Wilson v. Mario,.. 117 N. Y. 596,

-' 27 Hun (X. Y. i 359. See 23 Alb. 42 X. E. Rep. 190 ; Jacobs v. Morrison.

I.. I. 126. 136 N. Y. 10.-), 32 X. Rep. 552.

93 X. Y. 118. See Lyons v. 2 R. S. N. Y. 137, § 5.

Leahy, L50re. 8, 11. 13 Pac. Rep. 643; "Compare Anderson v. Blood, 152

State v. Mason, 112 Mo. 380, 20 S. W. X. Y. 285, 46 X. E. Rep. 493.

§ 375 STEARNS V. GAGE. 677

for a valuable consideration, without previous notice, is
chargeable with constructive notice of the fraudulent
intent of his grantor ; and such a rule would carry the
doctrine of constructive notice to an extent beyond any
principle which has been sanctioned by the courts and
cannot be upheld."

It must be noted that the word "actual" is not embod-
ied in the statute, but has been, in effect, interpolated
by this construction. We dissent decidedly from the
statement that the statute <k plainly means that actual
notice shall be given of the fraudulent intent." Such a
construction violates the settled rule that statutes of this
character shall be liberally construed for the suppression
of fraud.1 It is to be regretted that the utterances quoted
occur in a case in which no facts sufficient to put a pur-
chaser on inquiry, or to constitute what is often called
and sometimes miscalled, constructive notice of fraud,
were found or were actually present. Had the court been
confronted with such facts and compelled to squarely state
the rule in the presence of such facts, these remarks,
which we consider unfortunate, might never have been
made. It is idle to assail the arguments of the case with
violent language, as has more than once been done, but
we should rather view the objectionable sentences as
unguarded utterances, and entertain the hope that the
questionable features of the opinion will be limited
and distinguished, and perhaps ultimately overturned.
" Knowledge of circumstances which are equivalent to"
actual notice are regarded in the opinion as sufficient evi-
dence of notice. This plainly implies that the court does
not mean to require proof that, as a matter of fact, the
purchaser was informed personally of the debtor's or ven-
dor's fraudulent intention, but leaves open the wide field
of circumstances by which actual notice may be inferred,

1 See § 20.

678 STEARNS V. GAGE. § 376

implied and fastened upon him. In other words, " cir-
cumstantial evidence" will suffice.1 In Farley v. Carpen-
ter,2 which follows and adopts Stearns v. Gage,3 the court
at General Term says : " A person may be chargeable with
constructive notice and still have no actual notice. Fraud
implies an evil or illegal intent. Such intent can only
exist in case of knowledge. Under this statute fraud is
not a question of negligence, it is a question of knowl-
edge and intent ; a party may be negligent in not exam-
ining the records for liens and incumbrances on real estate
before effecting a purchase, and still be strictly honest,
and innocent of fraud."

We deny that fraud necessarily "implies an evil or
illegal intent." The transaction may be pure and honest
as regards the debtor's mental emotions, or his belief, or
when measured by his standard of morality, and yet be
pronounced by the courts fraudulent and void in law.
Nor is fraud always " a question of knowledge and intent,"
because, by a fiction of law, knowledge is constantly im-
puted by statutes, and by the courts, in cases where it
did not in fact exist, and no evil intent considered as a
mental emotion was present.

§376. — It seems startling if not preposterous to say
that circumstances which ought to "put the purchaser on
inquiry" are "not sufficient" to taint a transaction with
fraud, or to warrant the conclusion that a vendee is not a
bona fide purchaser. We submit that this statement is
inaccurate and misleading. The confusion undoubtedly
results in part from a failure to distinguish between cir-
cumstantial evidence sufficient to establish or justify a
finding of actual notice of fraud and facts which raise
the presumption of constructive notice.4 The facts and

1 Farley v. ( larpenter, 27 Hun (N. f79 N. Y. 102

?.)362. 4 In Garesche v. MacDonald, 103

»27 Hun (N. Y.) 862. Mo. 10, 15 S. W. Rep. 379, the court

§376 STEARNS V. GAGE. 679

circumstances sufficient in either phase of the question to
establish notice or bad faith in the vendee bear a close
resemblance, if indeed they are not often identical ;
hence the doctrine of Stearns v. Gage, if it is effectual for
any purpose, is to be regarded as seriously impeding, if
not breaking the force of indicia and circumstances as
evidence of guilty knowledge. What object is to be sub-
served in endeavoring to establish knowledge or notice of
a fraudulent intent by proof of surrounding circumstances,
if facts sufficient to put an honest man "on inquiry"
count for nothing ? Are not facts manifestly sufficient
to excite grave suspicions of good faith, at least evidence
tending to prove actual notice?1 Is not a court or jury
justified in finding actual notice from facts which should
excite inquiry or raise a presumption of constructive
notice? In short, is a court or jury justified in finding,
as matter of fact, absence of actual notice in cases where
facts sufficient to create a clear presumption of construc-
tive notice are in evidence ? Can such a verdict or finding
be said to honestly reflect the evidence ? It seems incred-
ible that a party whose suspicions concerning the fairness
and good faith of a transaction must have been excited
by the exceptional and peculiar conduct of the parties,
can preserve the character of a bona fide purchaser, either
by listless inattention and indifference concerning the
indicia of fraud, or by active and positive efforts to avoid
all knowledge of the true motive or design of the debtor.

says: " While fraud may be inferred inquiry would have discovered the

when it is a legitimite deduction from fraud, but the fact that he had such

all the facts and circumstances in evi- knowledge may be given in v\ idence

dence in a given case, it is never to be and maybe considered by the jury,

presumed. " with the other facts and circumstances

1 In Sammons v. O'Neill, 60 Mo. in the case, in determining the ques-

App. 586, the court says: "It is not tion whether he really had actual

sufficient that he may have had knowledge of the fraud." See H. T.

knowledge of such facts as would have Simon-Gregory Dry Goods Co. v.

put a prudent man on inquiry, which Schooley, 66 Mo. App. 413.

68o STEARNS V. GAGE. § 376

This would be offering a premium to vendees who mas-
queraded as mutes, or who declined to use their eyes and
ears to discover the fraud, the evidence of which sur-
rounded them on every side. Is not such a vendee guilty
of a " fraudulent turning away from knowledge ?" Must
not a person who willfully closes his eyes to avoid seeing
what he believes he would have discovered had he kept
them open, be considered as having perceived or detected
" what any man with his eyes open would have seen ? " 1
Is a party who has eyes to be permitted to say that he
saw not, and who has ears to be permitted to say that he
heard not? When the warning signal has been sounded,
and the attention of a party has been aroused, is it not
incumbent on such party to stay his hand, until he shall
ascertain by the requisite inquiries the facts foreshadowed
by the suspicious circumstances?2 In Farley v. Car-
penter3 the purchaser testified that he thought some-
thing was up from the way the debtor talked : " He sent
for me ; he wanted to sell me his farm ; I said, ' What is
up ? ' he said, ' You need not ask any questions nor say
anything for two or three days.' ' The court said it did
"not necessarily follow that he should infer" that the
debtor "was designing to cheat and defraud his creditors
and flee from the State." This case, it seems to us, is
squarely opposed to Baker v. Bliss,4 and can scarcely be
reconciled with the views of Rapallo, J., in a case to be
presently noticed, in which he entertains "no doubt that
it is legitimate for the jury in such cases to consider
whether the vendee had knowledge of facts pointing to a
fraudulent intent or calculated to awaken suspicion, and

1 De Witt v. Van Sickle, 29 N. J. 2 Compare Pinckard v. Woods, 8

Eq. 214. A party "has no right to Graft. (Va.) 140.

shut his eyes or his ears to the inlet of 3 27 Hun (N. Y.) 361.

information, and then say he is a 4 39 N. Y. 70.
bona fide purchaser without notice."
Burwell v. Fauber, 21 Gratt. (Va.) 463.

§ 376 STEARNS V. GAGE. 68 1

that actual notice of a fraudulent intent on the part of tin-
vendor need not be established by direct proof. The fact of
notice or knowledge may be inferred from circumstances ." '

Let the reader briefly consider this subject in its prac-
tical application and bearing. A debtor contemplating
flight, suddenly offers to sell his tangible property at a
sacrifice for cash to a vendee who sees in the transaction
the usual indicia surrounding fraudulent alienations, suffi-
cient to put a purchaser "on inquiry." No inquiry is
made, the vendee takes title to the debtor's property, or
to what is sometimes called the creditors' trust fund,2 and
provides the debtor with its equivalent in money, which
has no earmarks and is easily secreted or dissipated, and
the latter absconds. Here the vendee has actually facili-
tated the consummation of the fraud by furnishing the
debtor with a portion of its value in cash in consideration
of receiving the property at a sacrifice.3 Is not the pur-
chaser at least a quasi conspirator in such a case, even
though the debtor did not openly avow his fraudulent
purpose? Imprudence or inattention to the suspicious
circumstances may possibly be overlooked, but can will-
ful blindness be pardoned?4

Again, suppose a deed is made for full value by A. to
B., containing recitals or provisions which render it void-

1 Parker v. Conner, 93 N. Y. 124 ; picion and led to inquiry, the pur-
s. p. Carroll v. Hayward. 124 Mass. chaser is regarded as having received
122 ; Moore v. Williamson, 44 N. J. Eq. notice of a fraudulent intent and re-
504, 15 Atl. Rep. 587 ; Bush v. Roberts, quired to investigate, and on the trial
111 N. Y. 282, 18 N. E. Rep. 732; to explain or in some way overcome
Lyons v. Leahy, 15 Ore. 8. 13 Pac. the effect of the notice thus given.
Rep. 643 ; Knower v. Cadden Clothing Purchasers, under the circumstances
Co., 57 Conn. 202, 17 Atl. Rep. 580. suggested, cannot shut their eyes and

2 See § 14; Egery v. Johnson, 70 shield themselves by proof of the pay -
Me. 261. ment of a consideration. They fur-

3 Compare Singer v. Jacobs, 11 Fed. ther and perfect the wrongful intent
Rep. 561 ; Clements v. Moore, 6 Wall, of the debtor when they assist him to
299. dispose of his property." Herrlich v.

4 "If the facts and circumstances Brennan, 11 Hun (N. Y.) 195.
are such as ought to have excited sus-

682 ANDERSON V. BLOOD. § 376a

able as to creditors provided A. is not solvent. In other
words, its provisions stamp it as fraudulent in law or void
against creditors upon its face if A. is insolvent.1 The
instrument is effectual between the parties,2 and is good
against all the world if A. was solvent ; it is voidable as
matter of law if A. was insolvent. Do not these recitals
cast upon B. the duty of investigating and inquiring as
to the solvency of A. ? If no inquiry is made, and, as
matter of fact A. is insolvent, do not the recitals of the
instrument then constitute constructive ?iotice to B. of
the fraud intended by A. ? The whole supposition of the
case is that B. had no actual knowledge or notice of
the intended fraud.

It is difficult to assign any reason why the doctrine of
constructive notice, if it has any application to our sub-
ject at all, should not be applied in a case in which ade-
quate consideration has been given. Where the fraudu-
lent intent is present, proof of consideration will not
save the transaction ; it is merely a fact, a piece of evi-
dence, tending among other things to establish want of
notice ; but it clearly has no such controlling or over-
shadowing effect, and bears no such strong relation to
the transaction as to justify the court in disregarding, as
the basis of a finding of notice, proof of facts sufficient
to excite inquiry or suspicion, or to constitute construc-
tive notice. Indeed actual or pretended payment of con-
sideration is almost a necessary incident of a covinous
transaction, and often serves as a convenient cover for
fraud.

§ 376a. Anderson v. Blood. — The proposition as to what
constitutes sufficient notice to a party to deprive him of
the character of a bona fide purchaser was re-discussed by
Gray, J., in the recent case of Anderson v. Blood.3

1 See ?£ 9, 10, 322. 3 152 N. Y. 285, 293, 4G N. E. Rep.

* See Chap. XXVI. 493.

§ 376a ANDERSON V. BLOOD. 683

Evidently conflicting opinions prevailed in the deliber-
ations of the court, as three judges dissent from the
prevailing conclusions. In the course of the opinion
Gray, J., says : " The rule, as it was early laid down in
the case of Williamson v. Brown,1 has not been departed
from in any subsequent case, of which I am aware. That
was that, where a purchaser of land has knowledge of
any facts sufficient to put him upon inquiry as to the exist-
ence of some right, or some title, in conflict with that he
is about to acquire, he is presumed either to have made
the inquiry and ascertained the extent of such prior right,
or to have been guilty of a degree of negligence equally
fatal to his claim to be considered a bona fide purchaser.
Many subsequent cases in this court have rested upon the
rule in Williamson v. Brown. But all are to the point
that a purchaser for a valuable consideration is entitled to
be protected in his title and, in the absence of actual
notice of fraud, it is necessary that the facts and circum-
stances, relied upon to charge him with knowledge of the
fraud, should be of a character equivalent to notice. If
the facts within the knowledge of the purchaser are of
such a nature, as, in reason, to put him upon inquiry,
and to excite the suspicion of an ordinarily prudent
person and he' [fails to make some investigation, he will
be chargeable with that knowledge which a reasonable
inquiry, as suggested by the facts would have revealed.2
I will assume in the present case, for the purpose of
the discussion, that the beneficiaries of this estate might
be regarded as having such equitable interests in the
property as to impose a stricter duty of vigilance in the
case of an intending purchaser, than would be required

1 15 N. Y. 354. v. Conner, 93 N. Y. 118 ; Bush v.

2 See Le Neve v. Le Neve. Amb. Roberts, 111 N. Y. 278, 18 N E. Rep.
436, 2 Lead. Cas. Eq. (6th ed.) 26; 732; Jacobs v. Morrison, 136 N. Y.
Williamson v. Brown, 15 N. Y. 354 ; 101, 32 N. E. Rep. 552.

Stearns v. Gage, 79 N. Y. 102 ; Parker

684 ANDERSON V. BLOOD. § 376a

where the parties interested were the general creditors of
the grantor, and with that assumption, which perhaps is
barely justified in this case, I still am unable to perceive in
what way Mrs. Blood was chargeable with the neglect
of any duty of inquiry resting upon her by reason of the

circumstances The question is not whether Mrs.

Blood could have discovered the existence of any fraud by
an inquiry; but it is whether, acting as an ordinarily pru-
dent person would have done, she was called upon, under
the circumstances, to make inquiry. Were the circum-
stances such as to necessitate the making of some inquiry,
at the peril of being charged with the knowledge of some
then unperceived fact? However strong the circum-
stances may have seemed to militate against the good
faith of Hernz and Melhado in the transaction, I do not
think they would have warranted Mrs. Blood in then
declaring that some collusion existed to defraud the
beneficiaries of the trust estate."

It will be noticed that in this case the court intimate a
distinction between a bona fide purchaser claiming against
the beneficiaries of a trust estate, and parties who are
merely the general creditors of the grantor. Certainly
the tendency of this decision is to establish, at least as
regards the argument of the court and the words
employed in reaching its conclusion, a result some-
what more favorable to creditors than the expressions
employed in Stearns v. Gage1 and Parker v. Conner,2
where the duty of the purchaser to make inquiry in the
presence of suspicious facts and circumstances was in
effect denied.3

1 79 N. Y. 102. Statute of Limitations to bar him,

* 93 N. Y. 118. Finch, J., said : '• Let us suppose that

3 In Higgins v. Crouse, 147 N. Y. the injured party does not know all the

415, 42 N. E. Rep. 6, the question arose facts, is not aware of enough of them

as to whether a party had such knowl- to justify a decided inference of

edge of a fraud as would cause the fraud, but does know sufficient to

377

CARROLL V. IIAYWARD.

685

§377- Carroll v. Hayward — Actual belief. — This question
of notice, as applied to our subject, has frequently been
up for adjudication in Massachusetts. " Reasonable
cause to know," said Ames, J., u is evidence having a ten-
dency, and generally a strong tendency, to prove that the
party in question did know, but it is a mistake to say
that it is the same thing as knowledge. What might con-
vince one man might be insufficient to satisfy the mind
of another."1 Thus in an action for deceit by false rep-
resentations the scienter must be proved and found as
matter of fact, and it is not enough merely to prove that
the party had reasonable cause to believe the representa-
tion untrue, and from that infer scienter as a question
of law.2 The distinction between reasonable cause to
believe and actual belief is pointed out in Coburn v.
Proctor.3

fairly arouse suspicion, to create a
probability, to suggest the need of an
inquiry. Can a party so situated omit
all investigation, remain purposely
blind, neglect the duty of inquiry,
when reasonable and natural action
would reveal the truth and disclose
the fraud ? I think not. In such a
case, it seems to me, that we are
bound to impute to the party the
knowledge which he ought to have
had and would have had if he had
done his duty, and say for the pur-
poses of the Statute of Limitations
that there was in law a discovery of
the facts which constitute the fraud.
.... I think the true rule is that,
where the circumstances are such as
to suggest to a person of ordinary in-
telligence the probability that he has
been defrauded, a duty of inquiry
arises, and if he omits that inquiry
when it would have developed the
truth, and shuts his eyes to the facts
which call for investigation, knowl-

edge of the fraud will be imputed to
him.*' The facts, however, in this
case were held not to bring it within
the rule as stated .

1 Carroll v. Hayward, 127 Mass.
122 ; State v. Mason, 112 Mo. 380, 20
S. W. Rep. 629. Compare Bicknell v.
Mellett, 160 Mass. 328, 35 N. E. Rep.
1130.

2 Pearson v. Howe, 1 Allen (Mass.)
207; Tryon v. Whitmarsh, 1 Met.
(Mass.) 1.

3 15 Gray (Mass.) 38. The statute
provided (Laws Mass. 1856, chap. 284,
§ 27) that preferential conveyances
made to any person who had "reason-
able cause to believe such debtor in-
solvent," might be avoided by (lie
assignee. In a suit brought to avoid
such a transfer, testimony that the
defendants believed the debtor per-
fectly solvent was declared incompe-
tent. It was considered that the only
inquiry which under the statute was
relevant to the issue was whether the

686

PARKER V. CONNER.

§378

v* 378. Parker v. Conner. — The New York Court of
Appeals again reverted to this general subject in Parker v.
Conner.1 Baker v. Bliss,2 and Reed v. Gannon,3 are there
emasculated so that creditors can draw little aid or com-
fort from them, and Stearns v. Gacre4 is considered "suffi-
cient to dispose of the present controversy." Rapallo, J.,
one of the ablest judges and clearest writers in the court,
said : "We think that in cases like the present, where an
intent to defraud creditors is alleged, the question to be
submitted to the jury should be whether the vendee did
in fact know or believe that the vendor intended to
defraud his creditors, not whether he was negligent in
failing to discover the fraudulent intent The ven-
dor's title and legal right of disposition are unquestioned,
and the ground upon which the transfer is impeached is
not any defect in the chain of title, but that the vendor's
motive in selling was to hinder, delay or defraud his own

defendants had reasonable cause to
believe the debtor insolvent ; that is
whether, in view of all the facts and
circumstances which were known to
tin- defendants concerning the busi-
ness and pecuniary condition of the
debtor in connection with the time
and mode of transfer of the property
taken, they as reasonable men, acting
with ordinary prudence, sagacity and
discretion, had good ground to believe
that the debtor was insolvent. " It
was not intended by the statute," said
Bigelovv, J., "to make the actual be-
lief of the party concerning the sol-
vi iicy of the debtor one of the stan-
dards by which to test the validity of
the transfer of property to him.
Such belief might or might not be
well founded. It would be an uncer-
tain and fluctuating standard. That
which would satisfy the mind of one
mail would be wholly insufficient to
convince another ; and those facts

which would fall far short of produc-
ing a belief in a person who was dis-
interested and impartial might have
a very different effect upon the same
person when acting under the strong
influence of self interest." Coburn v.
Proctor, 15 Gray (Mass.) 38.

1 9:j N. Y. 118, 45 Am. Rep. 178.
See especially the learned note by
Irving Browne, Esq., in which many
of the cases here cited are discussed.
See 29 Alb. L. J. 244 ; Bush v. Rob-
erts, 111 N. Y. 282, 18 N. E. Rep. 732 ;
Van Raalte v. Harrington, 101 Mo.
610, 14 S. W. Rep. 710 ; Knower v.
Cadden Clothing Co., 57 Conn. 202,
221, 17 Atl. Rep. 580 ; Seavy v. Dear-
born, 19 N. H. 351 ; Wilson v. Marion,
147 N. Y. 596, 42 N. E. Rep. 190 ;
Jacobs v. Morrison, 136 N. Y. 105, 32
N. E. Rep. 552.

-' 39 N. Y. 70.

;:.0 N. Y. 345.

479N. Y. 102.

§ 37'S PARKER V. CONNER. 687

creditors. In such a case there is no duty of active
vigilance cast upon the purchaser, for the benefit of
creditors of the vendor, which should require him to sus-
pect and investigate the motives of the vendor. If he
knows or believes them to be fraudulent, he has no right
to aid the vendor in his fraudulent scheme, and by so
doing he makes himself a party to the fraud. But fraud
should not be imputed by the application of the strict
rules of constructive notice in such a case, and actual
good faith should be sufficient to protect the purchaser."
It will thus be seen that the dictum of Stearns v. Gage is
adopted in a qualified sense. We respectfully urge that
the proposed test, Did the vendee " in fact knozu or believe
that the vendor intended to defraud his creditors?" is
loose, uncertain and unsatisfactory. The court proceed
to state that on general principles, independent of the
statute, the same rules are applicable in such cases as
govern in determining the bona fides of commercial paper,
viz.: not whether the holder took the bill or note without
exercising sufficient prudence and care, but whether it
came into his hands under such circumstances as to charge
him with receiving it mala fide, and that unless he is
fairly chargeable with notice of the fraud, even negligence
will not defeat his title.1 There certainly is novelty in
the idea of invoking the rule governing commercial paper
for the protection of the alienees of fraudulent debtors.

It is foreign to our plan to further trace this line of
cases. While conceding that there is plausibility in the
reasons assigned for the non-application of the doctrine
pure and simple of constructive notice to fraudulent trans-

1 See this rule applied to cotnmer- Branch Bank v. Hoge, 35 N. Y. 65,

cial paper. Cook v. Jadis, 5 Barn. & overruling Pringle v. Phillips, 5

Adol. 909; Blackhouse v. Harrison. Sandf. (N. Y.) 157; Danforth v. Dart,

5 Barn. & Adol. 1098; Goodman v. 4 Duer (N. Y.) 101. See Parker v.

Harvey, 4 Adol. & El. 870 ; Magee v. Conner, 93 N. Y. 128.
Badger, 34 N. Y. 247; Belmont

688 FACTS TO EXCITE INQUIRY. § 379

fers, we bow to some of these decisions of the highest court
of a great State with hesitation and reluctance. The great
embarrassments under which creditors labor in over-
coming the presumptions of legality and good faith which
ordinarily inhere in all alienations and transactions of
the debtor have already been considered.1 Proof of
fraud is usually an herculean task, and creditors should
not consent without a struggle to be divested of so
important and useful a factor in their litigations as the
doctrine of constructive notice of fraud, at least con-
sidered as a circumstance, would be likely to prove.
Before further discussing- in the abstract what we con-
sider the objections to the principles embodied in some of
these cases we will glance at the many authorities which
tend at least to establish a more favorable rule for the
creditor class.

§ 379- Facts sufficient to excite inquiry. — Let us notice the
cases. In Bartles v. Gibson,2 Bunn, J , with whom
Harlan, J., of the United States Supreme Court con-
curred, said: " The defendant testified that he knew that
his brother was in some difficulty, and that the trouble
was of a financial character. Whether he knew all or not,

he knew enough to put him upon inquiry If he

had knowledge of facts sufficient to excite the suspicions
of a prudent man and put him on inquiry, he made him-
self a party to the fraud? 3 This is a wholesome and

1 See§§ 5, 6, 7, 8, 244, 271. Singer v. Jacobs, 11 Fed. Rep. 559 ;

-' 17Fed. Rep. 297; Bedford v. Penny, Hadock v. Hill, 75 Tex. 193, 12 S. W.

58 Mich. 424, 25 N. W. Rep. 381; Brit- Rep. 974 ; Richolson v. Freeman, 56

tain v. Crowther, 54 Fed. Rep. 295 ; Kan. 464, 43 Pac. Rep. 772 ; Jerome v.

Redhead v. Pratt, 72 Iowa 103, 33 N.W. Carbonate Nat. Bank, 22 Col. 42, 47

Rep. 382; Hasie v. Connor, 53 Kan. 721, Pac. Rep. 215.

37 Pac. Rep. 128 ; Dodd v. Gaines. 82 3 Citing Atwood v. Impson, 20 N.

Tex. 429, 18 S. \V. Rep. 618 ; Martin J. Eq. 156 ; Baker v. Bliss, 39 N. Y.

v. Marshall, 54 Kan. 148, 37 Par. Rep- 70; Avery v. .Johanii, 27 Wis. 251 :

977 ; Walker v. Collins, 4 U. S. App. Kerr on Fraud, 236; David v.

415, 50 Fed. Rep. 737, 1 C. C. A. 642 ; Birchard, 53 Wis. 492, 10 N. W. Rep.

§379

FACTS TO EXCITE TNOUIRV.

689

refreshing statement. Chancellor Zabriskie, after ob-
serving that if the object of a debtor in making an
alienation is to hinder and delay any of his creditors, the
transaction may be avoided, if made to any one having
knowledge of the intent, continues : " This knowledge
need not be by actual positive information or notice, but
will be inferred from the knowledge by the purchaser of
facts and circumstances sufficient to raise such suspicions
as to put him upon inquiry."1 In Singer v. Jacobs,2 the
court adopt the summary of Mr. Bigelow,3 as follows : '' If
facts are brought to the knowledge of a party which
would put him as a man of common sagacity upon
inquiry, he is bound to inquire,4 and if he neglects to do
so, he will be chargeable with notice of what he might

557. See Zimmerman v. Heinrichs,
43 Iowa 260 ; Coolidge v. Heneky, 11
Ore. 327, 8 Pac. Rep. 281. In William-
son v. Brown, 15 N. Y. 362, an im-
portant and leading case, Selden, J.,
lays down the rule that "where a
purchaser has knowledge of any fact
sufficient to put him on inquiry as to
the existence of some right or title in
conflict witli that he is about to pur-
chase, he is presumed either to have
made the inquiry and ascertained the
extent of such prior right, or to have
been guilty of a degree of negligence
equally fatal to his claim to be con-
sidered as a bona fide purchaser."
See Hinde v. Vattier, 1 McLean 110 ;
Nantz v. McPherson, 7 Mon. (Ky. )
599 ; Cotton v. Hart, 1 A. K. Marsh.
(Ky.) 56 ; Hawley v. Cramer, 4 Cow.
(N .Y.)718 ; Morrow Shoe Mfg. Co. v.
New England Shoe Co., 6 C. C. A. 508,
57 Fed. Rep. 693 ; Dyer v. Taylor, 50
Ark. 320, 7 S. W. Rep. 258. Knowl-
edge that the debtor is selling goods
below cost is not notice of fraud to a
vendee. Hinds v. Keith, 57 Fed.
Rep. 10. But guilty knowledge of an
agent may be imputed to his prin-

44

cipal. Morris v. Lindauer, 54 Fed.
Rep. 23.

1 Atwood v. Impson, 20 N. J. Eq.
156. See De Witt v. Van Sickle, 29
N. J. Eq. 214; Magniac v. Thompson.
7 Pet. 393 : Millholland v. Tiffany, 4
East. Rep. 214 ; The Holladay Case,
27 Fed. Rep. 830 ; Clements v. Moore,
6 Wall. 312 ; Kitch v. St. Louis K.
C. & N. Ry. Co.. 69 Mo. 224 : Gollober
v. Martin, 33 Kan. 255, 6 Pac. Rep.
267 ; Walker v. Collins, 1 C. C. A.
642, 4 U. S. App. 415, 50 Fed. Rep.
737 ; Haskett v. Auhl, 3 Kan. App.
744, 45 Pac. Rep. 608 ; Richolson v.
Freeman, 56 Kan. 463, 43 Pac. Rep.
772 ; Hooser v. Hunt, 65 Wis. 71, 26
N. W. Rep. 442. Where the vendee
stated that there were no claims
against him, the mere fact that the
purchaser knew that there was a small
claim is not enough to put such pur-
chaser on inquiry. B. C. Evans Co.
v. Reeves, 6 Tex. Civ. App. 254, 26 S.
W. Rep. 219.

*11 Fed. Rep. 361.

3 Bigelow on Frauds, pp. 288-9.

••Compare Cowling v. Estes, 15,
111. App. 260.

69O FACTS TO EXCITE INQUIRY. §379

have learned upon examination.1 .... If, however, there
be no fraudulent turning away from knowledge which the
res gestce would suggest to a prudent mind ; if mere want
of caution, as distinguished from fraudulent or willful
blindness, is all that can be imputed to a purchaser of
property, the doctrine of constructive notice will not apply
to him." In Wilson v. Prewit,2 a suit brought to annul
an ante-nuptial settlement, Woods, J., said : " Actual
knowledge of the fraudulent intent is not necessary. A
knowledge of facts sufficient to excite the suspicions of a
prudent man or woman, and to put him or her on inquiry,
amounts to notice, and is equivalent to actual knowledge
in contemplation of law.3 It has even been held that the
means of knowledge, by the use of ordinary diligence,
amounts to notice."4 The judgment in this case was
reversed,5 but upon the very excellent ground that the
knowledge of the facts which the wife possessed " rather
dispelled than created any suspicion that the husband had
a design to defraud his creditors." In Shauer v. Alter-
ton,6 the court says : ''While the plaintiff was not bound
to act upon mere suspicion as to the intent with which
his brother made the sale in question, if he had knowl-
edge or actual notice of circumstances sufficient to put
him, as a prudent man, upon inquiry as to whether his

1 See Walker v. Collins, 4 U.S. App. 80 Cal. 421, 22 Pac. Rep. 290; Dyer

415, 50 Fed. Rep. 737, 1 C. C. A. 642 ; v. Taylor. 50 Ark. 314, 7 S. W. Hep.

Shauer v. Alterton, 151 U. S. 607, 622, 258; Rugan v. Sabin, 53 Bed. Rep.

14 S. C. Rep. 442. 415 : Bland v. Fleeraan, 58 Ark. 84,

*?, Woods 641. 23 S. W. Rep. 4 : Percy v. Cockrill,

3 Citing At wood v. Impson, 20 N. 53 Fed. Rep. 872 ; De Mares v. Gilpin,

J. Eq. 150; Tantumv. Green, 20 N. J. 15 Col. 84, 24 Pac Rep. 568; Norria

Eq. 364; Jackson v. Mather, 7 Cow. v. Haggin, 13(5 U. S. 380, 10 S. C.

(X. V., 301; Smith v. Henry, 2 Rep. 942.

Bailey's (S. C.) Law lis: Mills v. 4 Citing Farmers' Bank v. Douglass,

Howeth, l'.nVx. 257. Sec also Blum 1!) Miss. 469.

v. Simpson. 71 Tex. 628, 9 S. \V. Rep. 1'ivwit v. Wilson. 103 U. S. 22.

662; Nicholson v. Condon, 71 Md. 621, ' 151 r. s. 621, 14 S. C. Rep. 442.
is Atl. Rep. B12 : Godfrey v. Miller,

§ 38° FACTS TO EXCITE ENQUIRY. 6<jl

brother intended to delay or defraud his creditors, and he
omitted to make such inquiry with reasonable diligence,
he should have been deemed to have notice of such fact,
and, therefore, such notice as would invalidate the sale to
him." This utterance certainly puts the Supreme Court
in line with our contention. In Kansas the court says :
" If the facts brought to his attention are such as to
awaken suspicion, and lead a man of ordinary prudence
to make inquiry, he is chargeable with notice of the
fraudulent intent, and with participation in the fraud."1
In Bush v. Roberts,2 Gray, J., observed: "The action
could only prevail by proof" that the purchaser "had
actual notice of a fraudulent motive" on the part of the
seller " or knowledge of circumstances which was equiva-
lent to such notice. If he knew, or had believed the
motives of his vendor to be fraudulent, then, by aiding
him in his scheme, he made himself a party to the fraud.3
But no evidence is competent proof to affect him, or his
right to the possession of his property, which falls short
of proving the nature of the transaction, and of illustra-
ting the guilty participation of the vendee."

In some of the States the doctrine of the cases is that
knowledge of the existence of suspicious circumstances is
merely evidence from which actual knowledge of fraudu-
lent designs may be inferred by the jury.4

§380. — Swayne, J., in delivering the opinion of the
United States Supreme Court, said : " A sale may be void
for bad faith, though the buyer pays the full value of the
property bought. This is the consequence where his pur-
pose is to aid the seller in perpetrating a fraud upon his

1 Gollober v. Martin, 33 Kan. 255. W. Rep. 629 ; State v. Purcell. 131 Mo.

1 111 N. Y. 282, 18 N. E. Rep. 732. 312; Van Raalte v. Harrington, 101

3 Citing Parker v. Conner, 93 N. Mo. 602, 14 S. W. Rep. 710. See also
Y. 118. Knower v. Cadden Clothing Co., 57

4 State v. Mason, 112 Mo. 374, 20 S. Conn. 202, 17 Atl. Rep. 580.

692 FACTS TO EXCITE INQUIRY. §380

creditors, and where he buys recklessly with guilty knowl-
edge." ] In a controversy in Alabama2 it is said that
" participation by the grantee may be proved by any cir-
cumstances sufficient to charge his conscience with knowl-
edee or notice of the fraudulent designs of the orrantor.":
In a Maryland case this language occurs : " All that was
necessary to make him take subject to the fraud was suffi-
cient knowledge of the suspicious circumstances to put
him on inquiry." 4 In David v. Birchard,5 where a mort-
gage was attacked, the court says that " this knowledge
need not be actual positive information or notice, but may
be inferred from the knowledge of the mortgagee of facts
and circumstances sufficient to raise such suspicions as
should put him on inquiry." In De Witt v. Van Sickle6
the court observed : "A person who deals in the avails of
a scheme to defraud creditors, to keep what he gets, must
not only pay for it, but he must be innocent ot any pur-
pose to further the fraud, even to protect himself. Actual
notice need not be shown. If the purchaser has before
him, at the time of his purchase, facts and circumstances
from which a fraudulent intent, either past or present, on
the part of the vendor, is a natural and legal inference, or
such facts or circumstances of suspicion as would naturally
prompt a prudent mind to further inquiry and examina-

1 Clements v. Moore, 6 Wall. 312. facts and surrounding circumstances,

Compare Howe Machine Co. v. Clay- pregnant with inference and provoca-

bourn, G Fed. Rep. 442. tive of inquiry, is as potent to impart

- Hoyt & Bros. Manuf. Co. v. Tur- notice as a public proclamation or an

ner, 84 Ala. 528, 4So. Rep. 058. army with banners. Conn. Mut. Life,

See Hooser v. Hunt, 65 Wis. 71. Ins. Co. v. Smith, 117 Mo. 292, 22 S.

79, 26 N. W. Rep. 442, declining to W. Rep. 623.

follow Steam v. Gage, 79 X. V. 102, * Biddinger v. Wiland, 67 Md. 362,

and Parker v. Conner, 93 N. Y. 118. 10 Atl. Rep. 202.

Ii is said in a Missouri case that courts 5 53 Wis. 495, 10 N. W. Rep. 557.

of equity, since their earliest founda- See Millholand v. Tiffany, 4 Hast.

tion, bave always recognized the fact Rep. 214 ; Green v. Early, 39 Md. 225 ;

that- the still small voice of suggestion, Thompson v. Duff, 19 III. A.pp. 78.

emanating as ii will from contiguous ' 29 N..I. Eq. 215.

§ 380 FACTS TO EXCITE INQUIRY. 693

tion, which, if pursued, would lead necessarily to a dis-
covery of the corrupting facts, he is chargeable with
notice." ! In Prewit v. Wilson 2 the court observed that the
grantee to lose the benefit of the transfer " must be charge-
able with knowledge of the intention of the grantor," not
that explicit and direct proof of actual knowledge must
be adduced. In Hopkins v. Langton,3 Chief-Justice
Dixon said : " Knowledge by the vendee of the fraudu-
lent intent, or the existence within his knowledge of
other facts and circumstances naturally and justly calcu-
lated to awaken suspicion of it in the mind of a man of
ordinary care and prudence, thus making it his duty to
pause and inquire, and a wrong on his part not to do so,
before consummating the purchase, is essential in order

to charge the vendee The vendee cannot shut his

eyes, but must look about him and inquire."4 "What-
ever is notice enough to excite attention and put the
party on his guard, and call for inquiry, is also notice of
everything to which it is afterwards found that such
inquiry might have led.5 When a person has sufficient
information to lead him to a fact, he shall be deemed
conversant with it." G There must be some reason to
awaken inquiry and direct diligence in the channel in
which it would be successful. That is what is meant by

1 Citing Tantum v. Green, 21 N.J. short of this would be sufficient to
Eq. 364. charge them ivith knoxvledge." The

2 103 U. S. 24. court above said : " A proposition so

3 30 Wis. 381 . wide from the true rule of law gov-
. 4 In this same case the court had erning in such case requires no argu-
instructed the jury that in order to ment to elucidate its error." Hopkins
affect the parties with notice of a v. Langton, 30 Wis. 382, 383.
fraudulent intent, so as to avoid 8 See Staauer v. Alterton, 151 U. S.
the sale, they must have "had be- 607, 622, 14 S. C. Rep. 442.

fore them,'" at the time the goods 6 Kennedy v. Green, 3 Myl. & K.

were purchased, " good and substan- 719; adopted in Wood v. Carpenter,

tial evidence of it, such as sends con- 101 U. S. 141 ; Shauer v. Alterton, 151

viction home to the mind and' estab- U. S. 607, 622, 14 S. C. Rep. 442.
lishes a well-founded belief ; nothing

694 FACTS TO EXCITE INQUIRY. § 38 1

reasonable diligence.1 " The presumption is that if the
party affected by any fraudulent transaction or manage-
ment might, with ordinary care and attention, have sea-
sonably detected it, he seasonably had actual knowledge

OI It. "

^381. — "Means of knowledge are the same thing in
effect as knowledge itself," 3 and " are equivalent to
actual knowledge," 4 is the language employed in some
of the cases. As applied to our subject at least, it is
conceded that these statements are inaccurate, for guilty
knowledge would of course defeat the purchaser's title,
while the means of knowledge would not have that effect
unless the duty to inquire was cast upon him. Again,
while a preference would not be avoided under the late
bankrupt act, by reason of a mere suspicion of the debtor's
insolvency in the mind of the creditor, yet knowledge of
facts calculated to produce such a belief in the mind of
an ordinarily intelligent man would avoid the security.5

It may be urged that some of the citations given are
from cases in other branches of the law than that govern-
ing fraudulent transfers. This may be true as to a few
of the citations, but the mass of the authorities collated
directly involved the question of notice of a fraud in an
alienation made to defeat creditors. It is submitted that
in no department of the law is there greater need for

1 Maule v. Rider, 59 Pa. St. 171. Tin Co., 7 Sawyer 418; New Albany
See Wilson v. Hunter, 30 Ind. 472 ; v. Burke, 11 Wall. 107; Broderick's
Cambridge Valley Bank v. Delano, 48 Will, 21 Wall. 518, 519; Ashhursfa
N. Y. 336, 339, 340. Appeal, 00 Pa. St. 290 ; Wood v. Car-

2 Angell on Limitations, § 187, and penter, 101 U. S. 141.

note. 5 Grant v. National Bank, 97 U. S.

Wood v. Carpenter, 101 U. S. 82 ; Barbour v. Priest, 103 U. S. 297.

L35, 143. See Kurtz v. Miller, 26 See Stucky v. Masonic Sav. Bank, 108

Kan. 319 ; Lady Washington Consol. U. S. 75 ; Swan v. Robinson, 5 Fed.

Co. v. Wood, 113 Cal. 487, 45 Pac. Rep. 294; Reber v. Gundy, 13 Fed.

Rep. 809. Rep. 56; May v. Le Claire, 18 Fed. Rep.

4 Dannmeyer v. Coleman, 8 Sawyer 164.
51 , 58. Citing Mannng v. San Jacinto

§ 3§2 ACTUAL BELIEF. 695

increased facilities to detect and unearth fraud than in
that regulating covinous alienations, and therefore the
cases illustrating other branches of the law are not irrele-
vant. Clearly the dictum of Miller, J., already quoted,
that "circumstances to put the purchaser on inquiry
where full value has been paid are not sufficient" notice
of fraud, cannot be supported or recognized as against
this multitude of authorities.

If the creditor is to be divested of the benefits of the
doctrine of constructive notice in and by itself, or as a
circumstance, as some of the cases cited seem to indi-
cate, then we contend that facts sufficient to excite
inquiry or to put a prudent man upon his guard should
raise a presumption of guilty knowledge or constitute
prima facie proof of actual notice of the fraudulent
design or of participation therein, which, in the absence
of satisfactory explanation, should be conclusive. Con-
structive notice in this connection may be likened to the
rule still prevailing in some States to the effect that a
failure to effect a change of possession on a sale of per-
sonalty is conclusively presumed to be fraudulent as to
creditors. The doctrine which we advance is akin to the
common and generally prevalent doctrine that continued
possession on the part of the vendor is prima facie
fraudulent, that is, it raises a presumption which may be
explained or rebutted.1

§382. Actual belief. — There is another view already out-
lined in part to be taken of this question. In New York
fraud, in cases of alienations to defeat creditors, is
" deemed a question of fact and not of law." 2 In Coleman
v. Burr,3 the claim was made that there was no finding
by the referee of a fraudulent intent ; but that, on the
contrary, he had found the whole transaction to be fair

1 See Chap. XVII. 3 93 N. Y. 31.

* 2 N. Y. R. S. 137, § 4.

696 ACTUAL BELIEF. § 382

and honest. The court, however, observed that as the
referee has "found facts from which the inference of
fraud is inevitable, and although he has characterized the
transactions as honest and fair, that does not make them
innocent nor change their essential character in the eye
of the law." The assignor " must be deemed to have
intended the natural and inevitable consequences of his
acts, and that was to hinder, delay, and defraud his cred-
itors." There is nothing novel or unusual in this case.
The principle it enforces is founded in public policy, and
is very frequently applied.1 It will be seen at a glance
that under this rule a fraudulent intention can be conclu-
sively fastened upon the debtor when no such wrongful
motive was present in his mind, and he was as free from
the design to defraud as our first parents were of knowl-
edge of sin before tasting the forbidden fruit. From the
necessity of the case the substituted fraudulent intent
prevails, because experience, from which the rule springs,
has shown that transactions, where this presumption
obtains, hinder and defraud creditors in enforcing pay-
ment of their claims. The difficulty of proving, other
than by circumstantial evidence, that a vendee had actual
knowledge of the vendor's fraud, or participated therein,
is manifest.'2 The law labels certain facts and combina-
tions of circumstances as being sufficient to excite inquiry
and suspicion on the part of a purchaser, and supplements
this by asserting that in certain cases, means of knowl-
edge are the same thing as knowledge itself.3 The prin-
ciple of imputing a fraudulent intent to an innocent
debtor is frequently invoked. Is there any legal absurd-
ity or moral wrong in imputing it to a vendee ? Do not
the necessities of the case often demand it?4 It is

1 See §§ 8, 9. Wood v. Carpenter, 101 U. S. 135,

:,,c, 143.

* See g§9, 10.

§§ 383> 384 PURCHASER WITH NOTICE. 697

respectfully contended that the test, " whether the ven-
dee did in fact know or believe that the vendor intended
to defraud his creditors," ! would furnish a very uncertain
and fluctuating- standard, and would not in fact constitute
a general rule of any utility. The intellectual and moral
perceptions are stronger or weaker in different men,
according to their natures and education, and a man mor-
ally obtuse might look upon a transaction as honest which
to the average person would appear to be manifestly
unfair or fraudulent. We have seen that a man may
commit a fraud without believing it to be a fraud.2

§383. Purchaser with notice. — It is manifest that one
purchasing of the fraudulent grantee, with notice of the
prior fraud, takes the title subject to all the infirmities
with which it was affected in the hands of his grantor.
To hold otherwise would be equivalent to saying that
three conspiring together might accomplish a fraud which
would be impossible to two.3 Purchasers pendente lite
are bound by the result of the litigation.4

§ 384. Purchaser with notice from bona fide purchaser. —
It is a well-settled rule in equity that a purchaser with
notice himself from a bona fide purchaser for a valuable
consideration, who bought without notice, may protect
himself under the first purchaser.5 The only exception
to this rule is where the estate becomes revested in the
original party to the fraud, in which case the original
equity will re-attach to it in his hands/' A volunteer

1 Parker v. Conner, 93 N. Y. 118, v. Church, 25 Pa. St. 278. See Oliver
126. v. Piatt, 3 How. 401 ; Johnson v.

2 See g 8. Gibson. 116 111. 294, 6 N. E. Rep. 205.

3 Wilcoxen v. Morgan, 2 Col. 478. In Ryan v. Staples, 40 U. S. App. 749,

4 Tilton v. Cofield, 9?> U. S. 108; the court says: "One who buys
Allen v. Halliday, 28 Fed. Hep. 263. property from an innocent bona Jide

3 Allison v. Hagan, 12 New 55, 2 purchaser is protected by the good

Fonb. Eq. 149, 1 Story's Eq. Jur. 409. faith and innocence of his grantor,

6 1 Story's Eq. Jur. § 410 ; Church although he may himself have notice

698 FRAUDULENT GRANTEE AS TRUSTEE. §§ 384a, 385

with notice, who derives his title from a bona fide pur-
chaser for value without notice, is unaffected by the fraud-
ulent character of the original transaction. This is neces-
sarily the case ; otherwise the party holding the perfect
title might be unable to dispose of it, and its value would
be greatly impaired. The party purchasing with notice
recovers in the riorht of his vendor.1

£ 384a. Possession as notice. — Naturally where persons
are in actual occupation of real estate as a home a person
proposing to purchase is bound to make inquiry as to the
title of the possessors. a

S 385. Fraudulent grantee as trustee. — Elliott, J., observed
in a recent case in the Supreme Court of Indiana, that
"where property is fraudulently conveyed, the grantee
holds it as trustee for the creditors of the grantor."3 In
Blair v. Smith 4 the court said : " Mrs. Smith received the
money as trustee, and as such must account for it. If she
had received a stock of goods from her husband pursuant
to a corrupt scheme to defraud his creditors, she certainly
could have been charged as trustee. The fact that she
received one species of property rather than another can
make no difference. The governing principle is the same,
no matter what kind of property the fraudulent participant
in the positive wrong receives. Mr. Pomeroy asserts,
what is well-known to be the law, that a fraudulent grantee

of antecedent defects or equities that - Kirby v. Talhnadge, 160 U. S. 879,

would have defeated his title if he 16 S. C. Rep. 349; Landes v. Brant,

bad been the first purchaser. Trull 10 How 348, 375; McLean v. Clapp,

v. Bigelow, 16 Mass. 406: Glidden v. 141 U. S. 429, 436, 12 S. ('. Rep. 39;

Hunt, 24 Pick. (Mass.) 221, 225; Noyes v. Hall, 97 U. S. 34

Boynton v. Rees, 8 Pick. (Mass.) 329 ; • Buck v. Voreis, 89 Ind. 117,

Funkhouser v. Lay, 78 Mo. 465; Blair v. Smith. 1 14 Ind. 125, 15 N. E.

\V I v. Cbapin, 13 N. Y. 509." Rep. 817: Chamberlain v. O'Brien, 46

See Pulton v. Woodman, 54 Miss. .Minn, so, is N. W. Rep. 447.

L58; Goshorn v. Snodgraes, 17 W. Va. 'ill Ind. 114, 125, 15 N. E. Rep.

717. 817.

§ 386 TITLE FROM FRAUDULENT VENDEE.

takes as trustee, and says: 'The lien upon the original
articles will extend to the resulting fund or the substituted
goods.'" !

§386. Title from fraudulent vendee.— It was at one time
sought to establish the rule, at least in some of the author-
ities, that a bona fide purchaser from a fraudulent grantee
was not entitled to protection against the claims of the
creditors of the fraudulent grantor.2 The argument in sup-
port of this docrine was to the effect that by the very terms
of the statute against fraudulent transfers, the conveyance
was pronounced utterly void, frustrate and of no effect,
and consequently a subsequent conveyance from the fraud-
ulent grantee could have no foundation on which to rest.
So also it was contended that it was against the policy of
the statute to afford protection to a subsequent purchaser
from the fraudulent grantee, though he parted with value,
in ignorance of any infirmity in the title he wasacquiring.
Quoting the words of Chancellor Kent : " Though the
debtor himself may fraudulently, on his own part, convey
to a bona fide purchaser, for a valuable consideration, yet
his fraudulent grantee cannot ; for it is understood that the
proviso in the 13 Eliz. does not extend to such subsequent
conveyance. The policy of that act would be defeated by
such extension. Its object was to secure creditors from
being defrauded by the debtor ; and the danger was, not
that he would honestly sell for a fair price, but that he
would fraudulently convey, upon a secret trust between
him and the grantee, at the expense of the creditors. If
the debtor sells, himself, in a case where the creditor has
no lien, and sells for a valuable consideration, he acquires

1 Citing Pomeroy's Eq. Jur., vol. 3, Rembert, 63 Ala. 570. A judgment-
§1291. creditor of a fraudulent grantee is not

2 Roberts v. Anderson, 3 Johns. Cb. a purchaser within the meaning of
(N. Y. ) 371 ; Preston v. Crofut, 1 the statute. Couse v. Columbia Pow-
Conn. 527, note ; Hoke v. Henderson, der Mfg. Co. (N. J. Ch.), 33 Atl. Rep.
3 Dev. (N. C.) Law 12 ; Thames v. 299 ; Devoe v. Brandt, 53 N. Y. 463.

700 FRAUDULENT GRANTEE. § 387

means to discharge his debts ; and it may be presumed he
will so apply them. If his fraudulent grantee be enabled
to sell, the grantor cannot call those proceeds out of his
hands, and the grantee can either appropriate them to his
own use, or to the secret trusts upon which the frandulent
conveyance was made. There is more danger of abuse,
and that the object of the statute would be defeated, in
the one case than in the other." 1 The decree of Chan-
cellor Kent was reversed on error; 2 and it was dissented
from and the contrary doctrine held by Judge Story, in
Bean v. Smith,3 and now in nearly if not all the States,
the doctrine is settled, that a fraudulent conveyance will
not, at the instance of the creditors, be vacated to the
prejudice of an innocent purchaser from the fraudulent
grantee.4 Of course one who purchases from a fraud-
ulent a-rantee, with notice of the fraud and of the inval-
idity of his title, can acquire no better right than the
fraudulent grantee has.5

§ 387. Creditors of fraudulent grantee. — In Susong v. Wil-
liams ° the court held that where a conveyance was made
by a mother to her son upon a secret trust, to reconvey
to the grantor when peace should be re-established, the
motive of the grantor in making the conveyance being
fear of confiscation, the convevance was valid between the
parties, and the reconveyance, being without considera-
tion, was void as to the creditors of the son. This is

1 Roberts v. Anderson, 3 Johns. Ch. 12 Am. Rep. 603 ; Gordon v.

(N. Y.) 371, 378. Ritenour, 87 Mo. 61. It is held in

* Anderson v. Roberts, 18 Johns. Michigan that the burden to prove

(N. Y.) 515. good faith and payment of consider-

3 2 Mason 252 ; Sawyer v. Almand, ation rests on the purchaser from
89 Ga. 314, 15 S E. Rep. 315. the fraudulent grantee. Schaible v.

4 Sec note to Basset v. Nosworthy, Ardner, 98 Mich. TO, ."iO N. W. Rep.
2 Lea. Cas. in Eq. (4th Am. Ed.) 42; 1105.

Schaible v. Ardner, 98 Mich. 73.56N. 5 Spence v. Smith, 34 W. Va. 706,

W. Rep. L105; Sawyer \. Almand, 89 12 S. E. Rep. 828; Goshorn's Ex'r v.

Ga. 314, 1". S. E. Rep. 315; 4 Kent Snodgrass, 17 W. Va. 717.

I'M : Young v. Lathrop, 07 N. C. 63, cl Heisk. (Tenn.) 625.

§ 388 FRAUDULENT GRANTEE. ;<>[

based upon the principle that the grantor, by making this
conveyance to her son, valid and effectual on its face, and
permitting it to be recorded, thereby held her son out to
the world as the owner of the property whereby he was
enabled to obtain credit. The principles of this case
would seem to render it unsafe for any owner of property
to allow the title of it for any cause to rest in another
person. Certainly it behooves the fraudulent debtor to
exercise care and good judgment in selecting a vendee
who not only will consummate the secret trust, but who
will not be frustrated in so doing by his own creditors.
This doctrine of apparent ownership may be variously
illustrated. In Budd v. Atkinson J it appeared that a
father bought a farm and caused it to be conveyed to his
son by a deed which was recorded. The son entered into
possession of the property and lived upon it. Subse-
quently he contracted debts on the credit of his ownership
of the farm. Then at his father's request he conveyed
the property to the father, without consideration, and
upon the ground that the latter had never intended to
give the farm to him, and that the son was not aware that
the conveyance had been made to him. The court held
that the deed to the father was fraudulent as against the
son's creditors.2 Where, however, a fraudulent mort-
gagee reconveys the land to the fraudulent mortgagor,
before any lien attaches in favor of the creditors of the
former, they cannot subject the land to the payment of
their debts.3 In Springfield Homestead Association v.
Roll 4 it was held that where a erantor jn a fraudulent

1 30 N. J. Eq. 530 of the vendor who have come in

2 Where a fund arising from prop- (although after the creditors of the
erty fraudulently assigned has been fraudulent vendee) are fully paid,
brought into court at the instance of Mullanphy Sav. Bank v. Lyle, T Lea
creditors of the vendor, creditors of (Tenn.) 431.

the fraudulent vendee will not be 3 Powell v. I vey, 88 N. C. 256. See

permitted to have satisfaction of their § 398.

-laims out of it until all the creditors 4 137 111. 205, 27 N. E. Rep. 184.

7<D2 FRAUDULENT GRANTEES. §§ 388-3893

conveyance, which was duly recorded remained in open
possession and received a reconveyance from the fraudu-
lent grantee, which was not recorded, a subsequent mort-
gagee of the fraudulent grantee will be deemed to have had
notice of the title of the original grantor, arising out
of his possession, and the mortgage will be declared void
at the instance of such grantor.

^ 388. Liability between fraudulent grantees.— I n Riddle v.
Lewis 1 the court decided that fraudulent grantees, as
between themselves, incur no responsibility to one another
by permitting the grantor to have or dispose of any part
of the property conveyed.

vj 389. Fraudulent grantee sharing in recovery. — Where a
fraudulent scheme or purchase, under which a creditor
obtained property of an insolvent debtor, is set aside in
a suit brought by another creditor against the fraudulent
vendee, the latter will not be allowed to share with the
complainant in the proceeds of the property.2 But, as
we have shown, where an illegal preference is set aside,
the creditor who attempted to secure such preference is
not necessarily thereby debarred from participating in a
distribution of the debtor's property under a voluntary
assignment act, including the property thus illegally con-
veyed to him.3

§ 389a. Purchaser pendente lite. — Purchasers pendente
lite are chargeable with notice 4 of all the facts of which
the record of the suit would inform them. This rule
relates only to parties to the suit, and does not apply to
other separate suits or parties.5

1 7 Bush (Ky.) 193. 3 White v. Cotzhausen, 129 U. S.

• Smith v. Craft, 11 Biss. 351 : Wil- 329. 9 S. C. Rep. 309.

son v. Horr, 15 Iowa 493. See Riggs 4See Tilton v. Cofield. 93 U. S.

v. Murray, 2 Johns. Ch. (N. Y.) 582; 168; Allen v. Halliday, 28 Fed. Rep.

Murray v. Riggs, r> Johns. (N. Y.) 263.

5T1; Harris v. Summer, 2 Pick. h Stout v. Phillippi Mfg. & M. Co..

(Mass.) 129. 41 W. Va. 339, 26 S. E. Rep. 571.

CHAPTER XXV.

PREFERENCES.

^ 390. Preferences legal.

391. Must represent actual debt.
391a. Preference on the eve of a gen-
eral assignment.

392. Vigilant creditors.

392a. Preferences in New York for
wages.

§ 393. Compromises — Secret preferen-
tial agreements.

393a. Illegal composition preference.

394. Secret antecedent agreement to
prefer.

394a. Rights of attaching creditor.

," Equity delights in equality."

§ 390. Preferences legal. — In the absence of a bankrupt
act, the principle prevails in most of the States that an
insolvent debtor may make preferences1 among his
creditors," even* to the extent of transferrino- all his

1 The debtor cannot delegate the
power to make preferences. Seger's
Sons v. Thomas Bros., 107 Mo. 643,
18 S. W . Rep. 33 ; Barnum v. Hemp-
stead, 7 Paige (N. Y.) 568.

2 Smith v. Craft, 11 Biss. 347 : Swift
v. Hart, 35 Hun (N. Y. ) 130, citing this
section; Sweetser v. Smith, 22 Abb. N.
C. (N. Y.) 320 and note, 5 N. Y. Supp.
378; Leavittv. Blatchford, 17N.Y.537;
Wan-en v. Jones, 68 Ala. 449 ; Craw-
ford v. Kirksey, 55 Ala. 282 Shealy
v. Edwards, 75 Ala. 418 ; Bishop v.
Stebbins, 41 Hun (N. Y) 246 ; Osgood
v. Thome, 63 N. H. 375 ; Low v.
Wortman, 44 N. J. Eq. 202, 7 Atl.
Rep. 654, 14 Id. 586; Walden v.
Murdock, 23 Cal. 550; Giddings
v. Sears, 115 Mass. 505 ; Ferguson v.
Spear, 65 Me. 279 ; French v. Motley,
63 Me. 328 ; Forrester v. Moore, 77
Mo. 651 ; Gomez v. Hagaman, 84 Hun
(N. Y.) 148, 32 N. Y. Supp. 453 : Cut-

ter v. Pollock, 4 N. Dak. 205, 59 N.
W. Rep. 1062 ; Drury v. Wilson, 4
App. Div. (N. Y.) 232, 38 N. Y. Supp.
538 ; Sweet v. Scherber, 42 111. App.
237 ; Jewell v. Knight, 123 U. S. 426,
434, 8 S. C. Rep. 193 ; People's Sav-
ings Bank v. Bates, 120 U. S. 556, 7S.
C. Rep. 679; Huntley v. Kingman,
152 U. S. 532, 14 S. C. Rep. 688 ; Saw-
yer v. Levy, 162 Mass. 190, 38 N. E.
Rep. 365 ; Warner Glove Co. v. Jen-
nings, 58 Conn. 74, 19 Atl. Rep. 239 ;
Hasie v. Connor, 53 Kans. 713, 37 Pac.
Rep. 128 ; Vietor v. Levy, 72 Hun (N.
Y.) 263. 25 N. Y. Supp. 644, aff'd 148
N. Y. 739, 42 N. E. Rep. 726 ;
Schroeder v. Bobbitt, 108 Mo. 289, 18
S. W. Rep. 1093 : Alberger v. Na-
tional Bank of Commerce, 123 Mo.
313, 27 S. W. Rep. 657 : Hoffman v.
Susemibl, 15 App. Div. (N. Y.) 405 ;
Warner v. Littleheld, 89 Mich. 329, 50
N. W. Rep. 721 ; Talcott v. Harder,

704

PREFERENCES J.ECAE

§390

property to one creditor to the exclusion of the others 1
The common law favors and rewards the vigilant and
active creditor. The right of a debtor under the rules of the
common law to devote his whole estate to the satisfaction
of the claims of particular creditors, by confession of
judgment or otherwise,3 results as Chief-Justice Marshall
declares, "from that absolute ownership which every man
claims over that which is his own."3 If, while a man

11!) N. Y. 536, 23 N. E. Rep. 1056:
Glover v. Lee, 140 111 102, 29 N. E.
Rep. 680 ; Clark v. Krause, 2 Mackey
(D. C.)567; Richardson v. Marqueze,
59 Miss. 80 ; Eldridge v. Phillipson, 58
Miss. 270 ; Jewett v. Note ware, 30
Hun (N. Y.) 194 ; Totten v. Brady. 54
Md. 170; Preusser v. Henshaw. 49
Iowa 41 ; Atlantic Nat. Bank v. Tav-
ener, 130 Mass. 407 ; Savage v. Dowd,
54 Miss. 728: Shelley v. Boothe, 73
Mo. 74 ; Spaulding v. Strang, 37 N. Y.
135 ; Auburn Exchange Bank v. Fitch,
48 Barb. (N. Y.) 344; Allen v. Ken-
nedy, 49 Wis. 549, 5 N. W. Rep. 906 ;
Keen v. Kleckner, 42 Pa. St. 529 ;
Jordan v. White, 38 Mich. 253 ; Mur-
phy v. Briggs, 89 N. Y. 451 ; Hill
v. Bowman, 35 Mich. 191; Smith v.
Skeary, 17 Conn. 47; Frazer v.
Thatcher, 49 Tex. 26; Holbird v. An-
derson, 5 T. R. 235 ; Estwick v. Cail-
laud, 5 T. R 420 ; Goss v. Neale, 5
Moore 19. By statute in New York a
preference is prohibited except as re-
gards wages and salaries of em-
ployees, beyond one-third of the as-
signed estate, and if that amount is
exceeded, the penalty is not the anni-
hilation of the assignment, but the re-
duction of the preference to the pre-
scribed limit; Maass v. Falk, 14<i N.
Y. 40, 40 N. E. Rep. 504; Central
Nat. Bk. v. Seligman, 138 N. V. 485,
::i N. E. Rep. 196, or as to the excess,
Cutter v. Hume, 62 Hun (N. Y.) 622,
17 X. Y. Supp. 255. The law toler-

ates preferences. Burr v. Clement, 9
Col. 1, 9 Pac. Rep. 633. A copartner-
ship may create preferences. Rich-
ards v. Leveille. 44 Neb. 38, 62 N. W.
Rep. 304 : Deitrich v. Hutchinson, 20
Neb. 52, 29. N. W. Rep. 247.

1 Richardson v. Marqueze, 59 Miss.
80; Drake v. Paulhamus, 29 U. S.
App. 522.

Purpose of bankrupt act. — The great
object of the late Bankrupt Act, so
far as creditors' were concerned, was
to secure equality of distribution of
the bankrupt's property among them.
It set aside transactions had within
four or six months prior to the bank-
ruptcy, depending upon their char-
acter, defeating or tending to defeat
such distribution. See Mayer v.
Hellman, 91 U. S. .101. The fact that
an insolvent debtor after the com-
mencement of bankruptcy proceed-
ings against him, conveyed property
by way of preference in violation of
the bankrupt act, is not under the
state law evidence of fraud. Talcott
v. Harder, 119 N. Y. 536, 23 N. E.
Rep. 1056.

- Victor v. Levy, 72 Hun (N. Y.) 263,
25 N. Y. Supp 644; afiTd 148 N. Y.
738, 42 N. E. Rep. 726.

:i Brashear v. West, 7 Pet. 608. 614 ;
Reed v. Mclntyre, 98 U. S. 510;
Mayer \ . Hellman, 91 IT. S. 500 ; Camp-
bell v. Colorado Coal & Iron Co., 9
Col. 65, 10 Pac. Rep. 248; Citizens'
Bank v. Williams, 128 N. Y. 77, 28

§39° PREFERENCES LEGAL. yo$

retains his property in his own hands, the right of giving
preferences should be denied, he would so far lose the
dominion over his own that he could not pay anybody,
because whoever he paid would receive a preference.1 It
makes no difference that the creditor and debtor both
knew that the effect of the application of the insolvent's
estate to the satisfaction of the particular claim would be
to deprive other creditors of the power to reach the
debtor's property by legal process or enforce satisfaction
of their claims.2 If there is no secret trust agreed upon or
understood between the debtor and creditor in favor of
the former, but the sole object of a transfer of property is
to pay or secure the payment of a debt, the transaction is
a valid one at common law.3 It is no evidence of fraud
that a debtor against whom bankruptcy proceedings were
pending made a preferential transfer of property.4 The
distinction is between a transfer of property made solely
by way of preference of one creditor over others, which is
legal, and a similar transfer made with a design to secure
some benefit or advantage from it to the debtor.5 It is
an absurdity to say that a conveyance of property which

N. E. Rep. 33; Tompkins v. Hunter, of fraud?" Cited in Bamberger v.

149 N. Y. 117, 43 N. E Rep. 532; Schoolfield, 160 U. S. 160, 16 S. C.

Robinson Notion Co. v. Foot, 42 Neb. Rep. 225.

156, 60 N. W. Rep. 316. 3 In Smith v. Craft. 123 U. S. 436, 8

1 Tillou v. Britton, 9 N. J. Law 120, S. C. Rep. 196, it was held that a bill
cited in Campbell v. Colorado Coal & of sale of a stock of goods in a shop,
Iron Co.. 9 Col. 65, 10 Pac. Rep. 248. by way of preference of a bona fide

2 Wood v. Dixie, 7 Q. B. 892. In creditor, was not rendered fraudulent
Hodges v. Coleman, 76 Ala. 103, 119, against other creditors as matter of
the court says : " What injury can law by containing a stipulation that
such secret motive do to a non-pre- the purchaser should employ the
ferred creditor? The act, as we have debtor at a reasonable salary to wind
seen, is lawful. Can human tribunals up the business.

set aside a transaction, lawful in itself, 4 Talcott v. Harder. 119 N. Y. 536,

because the actors had an evil mind 23 N. E. Rep. 1056.

in doing it ? Can there be fraud in 5 Banfield v. Whipple. 14 Allen

doing a lawful act, even though it be (Mass.) 13; Giddings v. Sears, 115

prompted by an evil motive or badges Mass. 507.

45

706 PREFERENCES LEGAL. § 39O

pays one creditor a just debt and nothing more, is fraudu-
lent as against other creditors of the common debtor.1
" The mere preference in payment of one honest cred-
itor over another was never at common law evidence of
a fraudulent intent."2 In a fair race for preference if a
creditor by diligence secures an advantage, it may be
maintained ; but if his purpose is not to collect the claim,
but to help the debtor cover up his property, he cannot shield
himself by showing that his debt was bona fide? Rela-
tionship will not take away the right to make a preference.
We may here observe that an insolvent debtor may prefer
his daughters to the extent that they are his creditors as
his wards, although such preference may leave the debtor
without the means of paying his other debts.4 The same
rule applies to a wife,5 and between father and son,6 and
daughter.7 In a controversy recently before the Supreme
Court of the United States,8 construing the statute of
Illinois, it was decided that a preferential disposition of
all the assets of an insolvent debtor operated as a general
assignment. The decree appealed from entirely excluded
the preferred creditors from participating in the fund.
In modifying this decree Mr. Justice Harlan said : "The
mother, sisters, and brother of Alexander White, Jr., were
his creditors, and, so far as the record discloses, they only
sought to obtain a preference over other creditors. But
their attempt to obtain such illegal preference ought not

1 Auburn Exchange Bank v. Fitch, v. Croco, 46 Kan. 629, 26 Pac. Rep.

48 Bail) ( X. Y ) 354. 942 ; Rockford Boot & Shoe Mfg. Co.

! Abegg v. Bishop, 142 N. Y. 289, v. Mastin, 75 Iowa 112, 39 N. W. Rep.

36 N. E. Rep. 1058. 21!).

Smith v. Schwed, 9 Fed. Rep. 483. ' Rockland Co. v. Summerville, 139

See David v. Birchard, 53 Wis. 494, Ind. 09., 39 N. E. Rep. 307: Ban- v.

1<» N. W. Rep. 557 : Menton v. Adams, Church, 82 Wis. 382, 52 N. W. Rep.

49Cal. 620. 591.

1 Mirun v. National Bank, 104 U. S. : Nelson v. Kinney, 93 Trim. 428,

543. 25 S. W. Rep. 100.

Laird v. Davidson, 124 Ind. 412. 8 White v. Cotzhausen, 129 U. S.

25 N. E. Rep. 7 . Winfield Nat. Bank 345, 9 S. C. Rep. 309.

§§39I»39Ia ACTUAL DEBT. JOJ

to have the effect of depriving them of their interest
under the statute, in the proceeds of the property in
question, or justify a decree giving a prior right to the
appellee. It was not intended, by the statute, to give
priority of right to the creditors who are not preferred.
All that the appellee can claim is to participate in such
proceeds upon terms of equality with other creditors." A
preference will not be overturned because the creditor on
receiving payment illegally promises as a part of the
transaction to compound a felony of which the debtor is
guilty.1

sj 391. Must represent actual debt. — The preferred cred-
itor must have a valid subsisting- claim against the debtor
which the transfer was given to satisfy or secure. In
Union National Bank v. Warner2 the conveyance was
made by a father to his sons, who were, however, not
creditors. The mutual fraudulent intent being shown, the
conveyance was annulled, their agreement to pay some of
his debts being deemed a part of the fraudulent scheme
which fell with it. So in Davis v. Leopold,3 the con-
veyance by a husband through a third person to his wife
was set aside, the wife not being a creditor;4 while in
Crowninshield v. Kittridge 5 a mortgage was annulled
because it was given for a fictitious or excessive amount,
and executed for the double purpose of securing a bona
fide debt and preventing creditors from attaching the
property. This does not contradict the general rule that
debtors may prefer the genuine claims of relatives.6

§ 391a. Preferences on the eve of a general assignment. —
The fact that a preference is given on the eve of making

1 Traders' Nat. Bank v. Steere, 165 4 Compare Jewett v. Noteware, 30
Mass. 393, 43 N. E. Rep. 187. Hun (N. Y.) 194.

3 12 Hun (N. Y.) 306. 6 7 Met. (Mass.) 522.

B 87 N. Y. 620. 6 Rockland Co. v. Summerville, 139

Ind. 700, 39 N. E. Rep. 307.

708 VIGILANT CREDITORS. § 392

a general assignment, as already shown, does not render it
fraudulent.1 In New York, where preferences in excess
of a certain proportion of the assets are prohibited in
general assignments, ~ it has been held that where, shortly
before the assignment was executed, assets in excess of
such proportions have been transferred to a bona fide
creditor, who was ignorant of the intention to make an
assignment, the transfer would be upheld.3 It would be
different if the assignee knew of such intention.4

§392. Vigilant creditors- — The general rule in equity
only requires that the fund acquired by a creditor's pro-
ceeding should be distributed among the creditors pro
rata? And where a creditor has not obtained any lien
at law, not having obtained any judgment, he is not enti-
tled to a priority over the other creditors.6 The com-
mencement of a creditor's suit in chancery by a judgment-
creditor, with execution returned unsatisfied, gives him a
lien upon all the equitable assets of the debtor,7 and the
same general rule is applied to supplementary proceed-
ings.8 An equitable lis pendens is acquired by filing the
bill.9 The first party to move is rewarded as a vigilant
creditor, the commencement of his suit being regarded as
an actual levy upon the equitable assets of his debtor,10

1 Dalton v. Stiles, 74 Mich. 726, 42 89 Va. 755. 17 S. E. Rep. 229. Ex-

N. W. Rep. 169. amine Freedman's Savings & Trust

*Ch. 503, Laws of 1887. Co. v. Earle, 110 U. S. 710,4 S. C.

3 Manning v. Beck. 129 N. Y. 1, 29 Rep. 226 ; Safford v. Douglass, 4 Edw.

N. E. Rep. 90 ; Maass v. Falk. 146 N. Ch. (N. Y.) 538; Boynton v. Rawson,

Y. 34, in X. E. Rep. 504. 1 Clarke Ch. (N. Y.) 592; Hone v.

* Berger v. Varrelmann, 127 N. Y. Henriquez, 13 Wend. (N. Y.) 244:

286, 27 N. E. Hep. 1065. Voorhees v. Seymour. 26 Barb. (N.

'■> Robinson v. Stewart, 10 X. Y. 196. Y.) 580.

6 Ibid. 8 Edmondston v. McLoud, 16 N. Y.

■storm v. Waddell, 2 Sandf. Ch. 544. See § 61.

(N. Y.) 494 ; Brown v. Nichols. 42 N. 9 Rothschild v. Kohn,93 Ky. 107. 19

Y. 26 ; Werborn v. Kahn. 93 Ala. 201, S. W. Rep 180.

9 So. Rep. 729: Wallace v. Treakle, " Lynch v. Johnson, 48 N. Y. 33;

27Gratt. (Va.) 479 ; Davis v. Bonney, The Deposit Nat. Bank v. Wickham,

§ 392 VIGILANT CREDITORS. 709

and entitles him to a priority,1 unless he elects to bring
the action for the benefit of himself and others similarly
situated.2 A purchaser pendente lite with notice, will
take subject to the rights of the complainant.3 " The
vigilant creditor, pursuing his claim, acquires a preferable
equity, which attaches and becomes a specific lien by the
filing of his bill."4 But it has been held in other cases
that all creditors who make reasonable and appropriate
application will be let in,5 and that all creditors should
be permitted to participate upon due application in the
proceeds of property fraudulently conveyed.0 This pref-
erential right is said in some cases to be as well defined
and as exclusive of the claims of other creditors as is the
right secured by a judgment lien upon the debtor's prop-
erty,7 but the cases are not uniform. Where a party
purchased lands pending a suit to reach the judgment-
debtor's interest therein, and entered into possession and
made improvements, such a grantee is not entitled to
have his improvements discharged from the lien of the
decree rendered against the lands.8 Equity will not
relieve a party from a risk which he voluntarily assumes.

44 How. Pr. (N. Y.) 422 ; Roberts v. 4 Burt v. Keyes, 1 Flippin 72. See

Albauy & W. S. R. R. Co., 25 Barb. Douglass v. Huston, 6 Ohio 156 ; Miers

(N. Y.) 662 ; Field v. Sands, 8 Bosw. v. Zanesville & M. Turnpike Co., 13

(N. Y.) 685. Ohio 197 ; Corning v. White, 2 Paige

•George v. Williamson, 26 Mo. (N. Y.) 567 ; George v. Williamson, 26
190 ; 2 Hoffman's Ch. Pr. 114 ; Corn- Mo. 190 ; Albany City Bank v. Sober-
ing v. White, 2 Paige (N. Y.) 567; merhorn, 1 Clarke's Ch. (N. Y.) 297;
Neal v. Foster, 13 Sawyer 237. As Storm v. Waddell, 2 Sandf. Ch. (N.
between various creditors who bring Y.) 494.

suit, their priority is determined by 5 Pendleton v. Perkins, 49 Mo. 565 ;

the date of their suit. Baer v. Doherty v. Holliday, 137 Ind. 282, 32

Wilkinson, 35 W. Va. 422, 14 S. E. N. E. Rep. 315, 36 Id. 907.

Rep. 1; Stamper v. Hibbs, 94 Ky. 358, 6 Voorhees v. Carpenter, 127 Ind.

22 S. W. Rep. 607 ; Fordyce v. Hicks. 300, 26 N. E. Rep. 838 ; Doherty v.

76 Iowa 41, 40 N. W. Rep. 79. Holliday, 137 Ind. 282, 32 N. E. Rep.

8 Claflin v. Gordon, 39 Hun (N. Y) 315, 36 Id. 907.

56. 1 Burt v. Keyes, 1 Flippin 72.

3 Jeffres v. Cochrane, 47 Barb. (N. 8 Patterson v. Brown, 32 N. Y. 81.
Y.) 557.

/IO PREFERENCES IN NEW YORK. § 392a, 393

This is a phase of the general rule that no allowance will
be made for improvements placed upon land after suit
brought.1 The Court of Chancery does not, however,
give any specific lien to a creditor at large against his
debtor, further than he has acquired at law. It is only
when he has obtained a judgment and execution in seek-
ing to subject the property of his debtor in the hands of
third persons, or to reach property not accessible to an
execution, that a legal preference is acquired which a
Court of Chancery will enforce2 In New York "the
law gives no preference to a vigilant creditor in the estate
of a decedent." 3

§ 392a. Preferences in New York for wages. — By statute
in New York4 it is provided that, in all assignments
made pursuant to the act, the wages or salaries of
employes shall be preferred before any other debt. The
money must be actually due for wages and not for money
loaned.5 The Court of Appeals held that an assign-
ment was not rendered void by reason of the omission to
insert therein a clause giving such preference, as the
instrument would be read in connection with the statute
with the same effect as though the provisions formed a
part of it.0

§ 393- Compromises — Secret preferential agreements. — The
law has ever scrupulously guarded the integrity and good
faith required in the general compromises of creditors
with their debtors. From considerations of public policy
and sound morals, transactions of this character should be
conducted with truth and fairness, lest any undue secret
advantage be secured to one creditor at the expense of

1 Sedgwick & Wait on Trial of Title amended by Laws of 1884, Ch.
to Land, 2.1 <•<!., g 705. 328.

2 Day v. Washburn. 24 How. 355. 5 Clark v. Andrews, 19 N. Y.

3 Lichtenberg v. Herdtfelder. 103 Supp. 211.

X. Y. 306, 8 N. E. Rep. 526. • Richardson v. Thurber, 104 N. Y.

4 Laws of 1877. Ch. 466, § 29, as 606, UN. E. Rep. 133.

§393 compromises. 711

another.1 Attempts to thwart the application of these
salutary principles are common and when detected will
be overthrown.2 In Cockshot v. Bennet,3 the defendants
being indebted to plaintiffs and other creditors, a com-
promise was effected at 11^. in the pound as to all cred-
itors except plaintiffs, who refused to sign the deed unless
the defendants gave them a note for the remaining 9^. in
the pound. The note was accordingly given, and defend-
ants made a subsequent promise to pay it. Lord Kenyon,
in defeating a recovery, placed his opinion upon the
foundation that the note was a fraud upon the creditors
who were parties to the deed by which their debts were
to be cancelled in consideration of receiving iu. in the
pound, and observed that " all the creditors being
assembled for the purpose of arranging the defendants'
affairs, they all undertook and mutually contracted with
each other that the defendants should be discharged from
their debts after the execution of the deed." Upon the
point, as to the revival of the debt by a subsequent
promise, the learned Chief-Justice said • "Contracts not

founded on immoral considerations may be revived

But this transaction is bottomed in fraud, which is a
species of immorality, and not being available as such,
cannot be revived by a subsequent promise." Mr. Justice
Ashurst remarked in the same case that the creditors
"were induced to enter into the agreement on principles
of humanity in order to discharge the defendants from
their incumbrances; and if they had not thought that
such would have been the effect, they would not probably
have agreed to sign the deed, but each would have

1 Fenner v. Dickey, 1 Flippin 30. to make disclosures concerning his

See White v. Kuntz, 107 N. Y. 518, property. Graham v. Meyer, 99 N.

14 N. E. Rep. 423 ; Hanover Nat. Bank Y. 611, 1 N. E. Rep. 143.

v. Blake, 142 N. Y. 404, 37 N. E. Rep. s Bliss v. Matteson, 45 N. Y. 22.

519. The debtor seeking a com- 3 2 T. R. 763.
position is not bound unless requested

7i2 compromises. § 393

endeavored to obtain payment of his whole debt. There-
fore I think that this security is not merely voidable, but

absolutely void The note was void on the ground

of fraud, and any subsequent promise must be nudum
pactum" So in Jackson v. Lomas,1 a secret agreement
was made by a debtor with a creditor to pay an additional
sum, the consideration of which agreement was that the
creditor should sign a composition deed with the other
creditors. Mr. Justice Buller declared the secret agree-
ment absolutely void, and refused to enforce it.2 The
principle of these English cases is upheld in the early case
of Payne v. Eden,3 in New York, where a note given in
consideration of the creditors signing the insolvent's peti-
tion to make, up the statutory proportion was adjudged
void. And in Wiggin v. Bush,4 a note executed by a
debtor to his creditor, to induce him to withdraw his
opposition to the debtor's discharge under an insolvent
law was adjudged void. So a note given by a third per-
son to a creditor in consideration of his withdrawing all
opposition to the discharge of his debtor as a bankrupt,
even though without the knowledge of the debtor, is
void.5 In Case v. Gerrish,6 Chief-Justice Shaw, in
deciding upon an agreement of this character where a
note had been ^iven, said : " This was an unwarrantable
coercion upon the debtor, and a fraud upon the other
creditors, which renders the note void."

1 4 T. R. 166. 33 Caines (N. Y.) 213.

* See Jones v. Barkley, 2 Doug. 4 12 Johns. (N. Y.) 306.

696; Sumner v. Brady, 1 H. Bla. ''Bell v. Leggett, 7 N. Y. 176. See

647; Jackson v. Duchaire, 3 T. R. Waite v. Harper, 2 Johns. (N. Y.)

551 , Feise v. Randall, 6 T. R. 146; 386; Tuxbury v. Miller, 19 Johns.

Leicester v. Rose, 4 East 372 ; Hoi mer (N. Y.) 311 ; Drexler v. Tyrrell, 15

v. Yiner, 1 Esp. 131 ; Knight v. Hunt, Nev. 132 ; York v. Merritt, 77 N. C.

5 Bing. 4:i2 ; Howson v. Hancock, 8 214 ; Sharp v. Teese, 9 N. J. Law

T. R. 575 ; Solinger v. Earle, 82 N. Y. 352.

393. 6 15 Pick. (Mass.) 49.

§§ 393a> 394 ILLEGAL COMPOSITION PREFERENCE. 713

§ 393a. Illegal composition preference. — When a creditor
signs a composition agreement under a secret agreement
with the debtor, giving him a preference or some undue
advantage over other creditors, this does not as to such
creditor nullify the composition agreement. The secret
agreement to prefer is fraudulent and void and the com-
position agreement stands.1

Gray, J., said : " It seems wiser simply to regard the
secret agreement as one which the law avoids for its
fraud. The creditor makes it with the risk of its worth-
lessness, if repudiated, and the debtor makes it with the
peril that its discovery will furnish cause for his other
creditors to avoid the composition agreement."3

§ 394. Secret antecedent agreement to prefer. — An agree-
ment between a debtor and creditor that, in consideration
of receiving a loan, the debtor will prefer such creditor in
the event of insolvency, has been considered to be in the
nature of a secret lien, which is a fraud upon subsequent
creditors of the debtor who are ignorant of the arrange-
ment, and a subsequent disposition of the property in
accordance with such an arrangement can be avoided by
such subsequent creditors.3 We doubted the soundness of
this conclusion in our first edition, and the case cited has
since been overturned4 and its conclusions departed from.5
In National Park Bank v. Whitmore,6 Earl, }., said: "A
debtor may obtain credit by a promise to pay in the future,
either in cash or in property, or by promising to give his
check or an indorsed note, or a confession of judgment.

■Hanover Nat. Bank v. Blake, 142 4 17 Fed. Rep. 705.
N. Y. 404. 37 N. E. Rep. 519. 5See National Park Bank v. Whit-

* Hanover Nat. Bank v. Blake, 142 more, 104 N. Y. 304, 10 N. E. Rep.

N. Y. 404, 415. 37 N. E. Rep. 519. 524, and cases cited. Compare (lark

See White v Kuntz, 107 N. Y. 518, v. Andrews, 19 N. Y. Snpp. 211:

14 N. E. Rep. 423. Pierce Steam Heating Co. v. Ransom,

3 See Smith v. Craft, 11 Biss. 340, 16 App. Div. (N. Y.) 200.
123 U. S. 441, 8 S. C. Rep. 196. c104 N. Y. 303, 10 N. E. Rep. 524.

714 SECRET ANTECEDENT AGREEMENT. § 394

Neither such a promise, nor its performance, is a legal fraud
upon any one ; and why may he not promise to give
security upon the property purchased, or other property ?
Such a promise, honest in fact, has never been held to be
a fraud or to work a fraud upon creditors. Security hon-
estly given in pursuance of such a promise relates back to
the date of the promise, and, except as to intervening rights,
is just as good and effectual as if given at the date of the
promise ; and it has generally been so held, even in bank-
ruptcy proceedings.1 But here the agreement was to make
the preferential assignment in case it became necessary
to protect the creditor ; and it is further claimed that
such a conditional agreement is a fraud upon other cred-
itors. A failing debtor may make an assignment prefer-
ring one or more creditors because he is under a legal,
equitable, or moral obligation to do so, or he may do it
from mere caprice or fancy, and the law will uphold such
an assignment honestly made. If he may make such an
assignment without any antecedent promise, why may he
not make it after and in pursuance of such a promise ?
How can an act otherwise legal be invalidated because
made in pursuance of a valid or invalid agreement hon-
estly made ? In Smith v. Craft,2 Judge Gresham held
that such a conditional agreement for a future preference
was a fraud upon creditors. But in the same case,3 upon
a rehearing, Judge Woods held that the same agreement
was not fraudulent, and in a very satisfactory opinion
showed that such an agreement as we have here, for a
future preference in case of insolvency, is not a legal
fraud upon creditors.4 This agreement did not create

1 Citing Bump's Bankruptcy [10th ner, L. R. 13 Ch. Div. 245 ; Mercer v.

ed.] 821 ; Forbes v. Howe, 102 Mass. Peterson, L. R. 2 Ex. 304, L. R. 3 Ex.

127 : Bank of Leavenworth v. Hunt, 104.

11 Wall. 391; Burdick v. Jackson, 7 * 11 Biss. 340.

Hun (N. Y.) 488; Ex parte Ames, 1 3 17 Fed. Rep. 705.

Lowell's Dec. 561; Ex parte Fisher, * Citing Walker v. Adair, 1 Bond

L. R. 7 Ch. App. 636 ; Ex parte Kil- 158 ; Anderson v. Lachs, 59 Miss. Ill ;

§ 394a RIGHTS OF ATTACHING CREDITOR. 715

any lien, legal or equitable, upon the property of the
defendants. It was not an agreement for a future lien
upon the specific property, which is sometimes held to
create an equitable lien which may be enforced in equity.
It was not an agreement for any lien at all. It was sim-
ply an agreement, in case of an assignment by the
defendants, to prefer Whiting. The agreement did not
bind defendants' property, nor encumber it, but left it
subject to all the remedies of their creditors, and it
neither hindered nor delayed those creditors. They
could have made the same assignment without a previous
agreement, and it is impossible to perceive how the agree-
ment worked any legal harm to any one. It is not
important to determine whether this was an agreement
of which a court of equity would enforce specific per-
formance, but we do not believe it was, and think it must
stand both in law and equity like an agreement to pay at
a future day."

§ 394a. Rights of attaching creditor. — A preference given
by an insolvent debtor to a bona fide creditor cannot be
avoided by an attaching creditor in Massachusetts,
whether the form of preference which is adopted is a
general assignment for the benefit of such creditors as
should assent thereto, or an assignment for the benefit
of certain specified creditors, or an assignment directly
to a single creditor. Otherwise it would simply amount
to giving a preference to an attaching creditor, instead
of to the creditor or creditors selected by the debtor.1

Spaulding v. Strang, 37 N. Y. 135, 3S ' Sawyer v. Levy, 162 Mass. 190,

N. Y. 9 ; Haydock v. Coope, 53 N. Y. 38 N E. Rep. 365, and cases cit<><l.
68.

CHAPTER XXVI.

CONVEYANCES VALID BETWEEN THE PARTIES
RELIEF TO DEFRAUDED GRANTORS.

£ 395. Conveyances binding between
the parties.

396. The theory — No reconveyance.

397. Massachusetts cases.

398. General rule and policy.

399. When aid will be extended to

grantors.

400. Cases and illustrations.

401. The cases just considered ex-

ceptional.

£ 402. Grantee enforcing fraudulent
deed .

403. Fraud upon debtor as distin-

guished from fraud upon
creditors.

404. Declaring deed a mortgage.
404o. Redeeming mortgaged prop-
erty.

" That court is not a divider of the inheritance of iniquity between .... two confederates
in fraud." Mr. Justice Lamar in Dent v. Ferguson, 132 U. S. 50, 66, 10 S. C. Rep. 13.

§395- Conveyances binding between the parties. — The
statute under which fraudulent and voluntary convey-
ances may be set aside, 13 Eliz. c. 5, ordinarily has no
application to the parties to such instruments or their
representatives. In Jackson v. Garnsey,1 Spencer, C. J.,
in referring to this subject, used these words : " As
between the parties they are expressly excluded from its
operation, and are left as they stood at the common law ;
and before the statute the heir could never set up his
title against the voluntary alienee of his ancestor, nor
call upon him for contribution, where both were amenable
to the creditors of the ancestor as ter-tenants ; nor will
courts of equity assist the party making a voluntary
conveyance or his representative claiming as such by

1 16 Johns. (N. Y.) 189. See Harvey Y. 552, 27 N. E. Rep. 247 ; Farrar v.

v. Varney, 9ft Mass. 118 ; Hudson v. Bernheim, 41 U. S. App. 172, 21 ( '. ( '.

White, 17 R. I. 528, 23 Atl. Rep. 57 ; A. 264. See £§ 112, 113, 121.
Knower v. Central Nat. Bk., 124 N.

8 395

CONVEYANCES HIND INC.

717

setting them aside." The cases holding such convey-
ances binding between the parties are numerous.1 The
same rule appertains to general assignments which,
though voidable by creditors, are always valid between the
immediate parties.- The conveyance as between the par-
ties stands upon the same ground as if a full and adequate
consideration had been paid.3 In conformity with this rule

1 See Mercer v. Mercer, 29 Iowa 557 ;
Tan turn v. Miller, 11 N. J. Eq. 551 :
Bonesteel v. Sullivan, 104 Pa. St. 9 ;
Lerow v. Wilmarth, 9 Allen (Mass.)
386; Bullitt v. Taylor 34 Miss. 708,
737 ; Armington v. Rau, 100 Pa. St.
168 ; Haak's Appeal, 100 Pa. St. 62 ;
Doe d. Abbott v. Hurd, 7 Blackf.
(Ind.) 510 ; McGuire v. Miller, 15 Ala.
394, 397; Williams v. Higgins, 69
Ala^ 523 ; Dyer v. Homer, 22 Pick.
(Mass.) 253 ; Keel v. Larkin,83 Ala, 142,
3 So. Rep. 296 ; Songer v. Partridge,
107 111. 529 ; Barrow v. Barrow, 108
Ind. 345, 9 N. E. Rep. 371 ; Reichart
v. Castator, 5 Binn. (Pa.) 109, 6 Am.
Dec. 402, and note ; Newell v. Newell,
34 Miss. 385 ; Shaw v. Millsaps, 50
Miss. 380 ; Davis v. Swanson, 54 Ala.
277; Noble v. Noble, 26 Ark. 317:
Lloyd v. Foley, 6 Sawyer 426 ; Van
Wy v. Clark, 50 Ind. 259 ; Crawford
v. Lehr, 20 Kans. 509 ; Peterson v.
Brown, 17 Nev. 173, 30 Pac. Rep. 697 ;
Allison v. Hagan, 12 Nev. 38 ; Stewart
v. Piatt, 101 .U. S. 738; Harmon v.
Harmon, 63 111. 512; Graham v. Rail-
road Co., 192 U. S. 148; George v.
Williamson, 26 Mo. 190 ; Sharpe v.
Davis, 76 Ind. 17 ; Nichols v. Patten,
18 Me. 231 ; Ellis v. Higgins, 32 Me.
34 ; Bush v. Rogan, 65 Ga. 321 ;
Goodwyn v. Goodwyn, 20 Ga. 600 ;
McCleskey v. Leadbetter, 1 Ga. 551 ;
Muller v. Balke, 154111. 110, 39 N. E.
Rep. 658; Francisco v. Aguirre, 94
Cal. 181, 29 Pac. Rep. 495 : Springfield
Homestead Assoc, v. Roll, 137 111.

205, 27 N. E. Rep. 184 ; Dent v. Fer-
guson, 132 U. S. 50, 10 S. C, Rep. 13 ;
Kirkpatrick v. Clark, 132 111. 342, 24
N. E. Rep. 71; Hudson v. While. 17 R.
I. 519, 23 Atl. Rep. 57 ; Kitts v. Will-
son, 130 Ind. 492, 29 N. E. Rep. 401 ;
Phenix Ins. Co. v. Fielder, 133 Ind.
557, 33 N. E. Rep. 270 : Weatherbee v.
Cockrell, 44 Kan. 380, 24 Pac. Rep.
417 ; Doughty v. Miller, 50 N. J.
Eq. 529, 25 Atl. Rep. 153 ; Stephens
v. Adair, 82 Tex. 214, 18 S. W.
Rep. 102. In Barrow v. Barrow. 108
Ind 345, 9 N. E. Rep. 371, it was
held that where a wife joined her
husband in conveying his land in
fraud of creditors, she could not,
after obtaining a divorce, have the
conveyance set aside, and the land
subjected to the payment of her judg-
ment for alimony.

5 Ames v. Blunt, 5 Paige (N. Y.) 13 ;
Mills v. Argall, 6 Paige (N. Y.) 577 ;
Smith v. Howard, 20 How. Pr. (N. Y.)
121. 126; Bradford v. Tappan, 11
Pick. (Mass.) 76 ; Van Winkle v. Mc-
Kee, 7 Mo. 435 ; Bellamy v. Bellamy,
6 Fla. 62 ; Rumery v. McCulloch, 54
Wis. 565, 12 N. W. Rep. 65. Sec
Chap. XXI.

3Chapin v. Pease, 10 Conn. 73.

Relaxation of the rule. — Bowes v.
Foster, 2 H. & N. 779. seems to evi-
dence an intention to relax this salu-
tary rule. Plaintiff being in financial
difficulties, and fearing proceedings
on the part of his creditors, made an
agreement with defendant, who was

7i8

CONVEYANCES BINDING.

395

it is held that a debtor who has conveyed his property in
order to defraud his creditors has no standing in a court
of equity to question the fairness or adequacy of price
obtained at the public sale of the premises under a cred-
itor's bill to reach such property.1 It is not material
whether the party is alleging the fraud as matter of
defense, or as a ground of action,2 for, as was said by
Lord Mansfield,3 " no man shall set up his own iniquity
as a defense, any more than a cause of action." 4 The
same rule applies between the heirs of the original
parties.5 The grantor cannot avoid the application of this
rule by purchasing through another, under a subsequent

also a creditor, that a pretended sale
of a stock of goods should be made to
defendant. An invoice was prepared,
a receipt given for the purchase-
money, and possession delivered to the
defendant. The latter sold the goods
as his own. Plaintiff brought trover
and was permitted to recover upon
the theory that the transaction never
was in reality a sale. Pollock, C. B.,
said : " I am by no means sure that a
man who, under the pressure of dis-
tress and misfortune, lends himself to
such a transaction, is in the same
delictum as a man who does so with-
out such motive." Still more re-
markable is the statement of Martin,
B., who observed : "It is said that a
person ought not to be allowed to set
up his own fraud. But here there
was no fraud : it was only in-
tended to give the defendant the
I lower to pretend that he was the
owner of the goods." If observations
such as these are to pass unchallenged
the principle of law for which we
are contending would be practically
nullified.

1 Guest v. Barton, 32 N. J. Eq. 120.

• Williams v. Higgins, 09 Ala. 523.

3Montefiori v. Montefiori, 1 W. Bla.
364.

4 "As between the grantor and
grantees the conveyances made were
good and passed title to the property.
And as to the creditors of the grantor
they were not void, but merely voida-
ble at their option ; they, by proper
proceedings, could have them set
aside, but if no steps were taken by
them for such purpose, then undoubt-
edly the title of the grantees would
be and remain indisputable." Mc-
Master v. Campbell, 41 Mich. 516, 2
N. W. Rep. 836. Whenever it ap-
pears that the object of a suitor in
filing a creditor's bill is to aid a person
who has placed his property in the
name of another to hinder creditors
to regain control of it, equity will
refuse assistance. Ruckman v. Con-
over, 37 N. J. Eq. 583 ; Hamilton Nat.
Bank v. Halsted, 56 Hun (N. Y.) 533,
9 N. Y. Supp. 852 ; affi'd 134 N. Y.
520, 31 N. E. Rep. 900 : Winans v.
Graves, 43 N. J. Eq. 263, 275, 11 Atl.
Rep. 25.

5 McClintock v. Loisseau, 31 W. Va.
865, 8 S. E. Rep. 612.

§ 396 THE THEORY. 719

judgment against him.1 As to every one but creditors the
deed fraudulently made is good,2 and it will be set aside
only in so far as is necessary to satisfy the claim of the
attacking creditor ; any surplus remaining will be returned
to the grantee.3 In some States, however, the deed if
made for an inadequate consideration, the grantee
remaining in possession, is void not only as to creditors,
but also as to subsequent purchasers for value, whether
they had notice of the deed or not.4

§ 396. The theory — No reconveyance. — Lord Chancellor
Thurlow 5 declared his opinion to be that in all cases
where money was paid for an unlawful purpose the party,
though particeps criminis, might recover at law ; and the
reason was that if courts of justice meant to prevent the
perpetration of crimes it must be, not by allowing a man
who has possession to hold it, but by putting the parties
back in the condition in which they were before entering
into the transaction. The doctrine of the learned Lord
Chancellor would seem to be sufficiently broad to cover
the cases of conveyances made in fraud of creditors. Yet
the authorities, as a general rule, reveal a singular
absence of any disposition on the part of the courts to
extend relief to fraudulent grantors.6 A fraudulent
vendee is under no legal obligation to reconvey, though
morally bound to do so ; and a court of equity will give
no aid where both the vendor and vendee participate in
the illegal transaction.7 It is familiar learning that

1 Eisner v. Heileman, 52 N. J. Law 6Farrar v. Bernheim, 41 U. S.

378. 20 Atl. Rep. 46. App. 172, 21 C. C. A. 264.

2Kitts v. Wilson, 140 Ind. 604, ,39 'Powell v. Ivey, 88 N. C. 256, 28

N. E. Rep. 813. Alb. L. J. 254 ; Farrar v. Bernheim,

•Comyns v. Riker, 83 Hun 471, 31 41 U. S. App. 172, 21 C. C. A. 264.

N. Y. Supp. 1042. In Carll v. Emery, 148 Mass. 32,

4 Jones v. Light, 86 Me. 437, 30 Atl. 34, 18 N. E. Rep. 574, the court

Rep. 71. says : " It would seem equally clear,

6 See Neville v. Wilkinson, 1 Bio. that, when a party who has trans-

C. C. 547. ferred property to delay or defraud

720

THE THEORY.

§396

equity will not decree a specific performance of an agree-
ment by the fraudulent grantee to reconvey the property
to the debtor,1 and will not interfere to correct a mis-
take in a deed that was executed for a fraudulent pur-
posed " This rule is a penalty imposed by the law for
the prevention of frauds.'13 And if a party obtains a
deed without consideration upon a parol agreement that
he will hold the land in trust for the grantor, there is
authority to the effect that such trust will not be enforced,
as it would violate the statute of frauds, and also the
general rule that parol evidence cannot be admitted to
vary, add to, or contradict a written instrument.4 In a
New Jersey case5 it was decided that a note which was
given for property transferred to the maker for the pur-
pose of defrauding the creditors of the payee could not

creditors abandons his fraudulent
purpose, apprising the other party
thereof, and seeks to reinstate him-
self in the possession of his prop-
erty in order to pay his creditors, lie
may do so. It cannot be that the
other party, who has been a par-
ticipant in the fraudulent transaction,
by reason of such participation should
be able to hold the property the
possession of which he had so
acquired, and thus prevent it from
being devoted to its legitimate uses."
'Walton v. Tusten, 49 Miss. 577;
Sw.-et v. Tinslar, 52 Barb. (N. Y.) 271 ;
Canton v. Dorchester, 8 Cush. (Mass.)
525 ; Grider v. Graham, 4 Bibb (Ky.)
70; Baldwin v. Cawthorne, 19 Ves.
L66; Ellington v. Currie, 5 Ired. (N.
C.) E.|. 21 ; St. John v. Benedict, (i
Johns. Ch. (N. Y.) 111; Waterman
on Specific Performance (ed. 1881),
§340; Chapin v. Pease, 10 Conn 72;
Tyler v. Tyler. 85 III. App. 343. Even
if the conveyance contained an ex-
press agreement to reconvey on
demand, it is competent for the pails

especially bound by the contract to
go behind the language of the writing
and show that its real purpose was to
defraud creditors. Tyler v. Tyler,
126 111. 525, 21 N. E. Rep. 616. If,
however, a distinct and independent
contract is entered into, subsequent
to the conveyance, for a fair and
valuable consideration, it will not be
tainted by the fraud of the main
transaction. Dent v. Ferguson, 132
U. S. 50, 10 S. C. Rep. 13. So an
agreement to account for the profits
made while the property was in the
grantee's hands, was enforced in
Stillings v. Turner, 153 Mass. 534, 27
N. E. Rep. 671. See § 429.

-'Gebhard v. Battler, 40 Iowa 152.
Robertson v. Sayre, 134 N. Y. 99.

1 Pusey v. Gardner, 21 W. Va. 474,
31 N. E. Rep. 250 ; Troll v. Carter, 15
W. Va. 567 ; Zane v. Fink, 18 W.
Va. 755. See Cutler v. Turtle, 19 N.
J. Eq. 549.

Church v. Muir, 33 N. J. Law
319.

§ 396 THE THEORY. 721

be enforced in the hands of the payee against the maker.
In the course of the opinion Chief-Justice Beasley
indulged in the following refreshing observations: "It
was urged that the statute for the prevention of frauds
and perjuries does not invalidate transactions the end of
which is to prevent or make difficult the collection of just
claims, except so far as concerns creditors, and that,
inter partes, such transactions, if containing no other
infirmity, will be effectuated at law. It is certainly true,
the statute referred to does not, propria vigore, annul
beyond the extent thus defined, the conveyances and
contracts at which it is levelled. Nothing- more than
this was necessary to effect its purpose, which was the
relief and protection of creditors against this class of
frauds. But it is also clear, that it has no tendency to
legalize any act which was not legal at the time of its

enactment A contract, the purpose of which is to

protect a debtor against the just claims of creditors, is an
immoral act. Such an affair is inimical to social policy.
It is in direct opposition both to the letter and spirit of

the statute for the prevention of frauds In their

essence and in their effects such contracts are as immoral
and pernicious as many of those which the law has
declared to be utterly void. In these respects how are
they to be distinguished from contracts to indemnify
persons against the consequences of their illegal acts ;
against liability for the publication of a libel ; from
promises by uninterested parties to furnish money for
the prosecution of law-suits ; from agreements in contra-
vention of the bankrupt or insolvent acts, or in general
restraint of trade ; or from that host of other conventions,
which have been so often judicially condemned, not on
account of any enormous immorality, but on the score of
their inconsistency with public interest and good govern-
ment ? I can see no reason why contracts to defraud
46

722 MASSACHUSETTS CASES. § 397

creditors should stand on a different footing from the
rest of those embraced in the class to which they evi-
dently belong. They are hostile to fair dealing and
commercial honesty, and, on this account, should be sub-
jected to the ban of outlawry." 1 As long as an agree-
ment of this kind remains executory the court will allow
a party to it to set up his own fraud, in an action brought
to enforce it.2 It has been held that in an action to
foreclose a mortgage the fact that it was given in fraud
of creditors may be interposed as a defense.3

§ 397. Massachusetts cases. — In Massachusetts a long
series of cases has established the rule that a transfer
either of real or personal property, made with a view to
defraud the creditors of the grantor, although the grantee
has participated in this intention, is good between the
parties, and void only in favor of creditors ; or to speak
accurately, is voidable by creditors at their election. If
no creditors intervene, the conveyance stands ; if creditors
elect to affirm the transfer and receive the consideration,
it is thereby ratified and confirmed. Payment of the
grantor's debts to the full value of the property purges
the fraud.* This doctrine extends to executory con-
tracts.5 In Freeland v. Freelaod,6 the court says :
" A conveyance made in fraud of creditors is valid as
between the parties, and can be avoided only by cred-
itors, or by the assignee in insolvency, representing them ;

1 Compare Nellis v. Clark, 20 Wend. 3 Williams v. Clink, 90 Mich. 297,

(N. Y.) 37, and dissenting opinion of 51 N. W. Rep. 453.

Chief -Justice Nelson ; Briggs v. Mer- 4 Drinkwater v. Drink water, 4

rill, 58 Barb. (N. Y.) 389 ; Ager v. Mass. 354 ; Oriental Bank v. Raskins,

Duncan, 50 Cal. 325 ; Goudy v. Geb- 3 Met. (Mass.) 332 ; Crowninshield v.

hart, 1 Ohio St. 262 ; Hamilton v. Kitridge, 7 Met. (Mass.) 520.

Scull, 25 Mo. 165; Andruss v. Doo- 5 Knapp v. Lee, 3 Pick. (Mass.)

little, 11 Conn. 283 ; Merrick v. But- 452 ; Dyer v. Homer, 22 Pick. (Mass.)

ler, 2 Lans. (N. Y.) 103; Dent v. Fer- 253. See The Lion, 1 Sprague 40;

guson, 132 U. S. 64, 10 S. C. Rep. 13. Harvey v. Varney, 98 Mass. 120.

5 Galpin v. Galpin, 74 Iowa 454, 38 6 102 Mass. 477.
N. W. Rep. 156.

§ 39^ GENERAL RULE AND POLICY. 723

and, if he affirms it, it stands good." ! But where the
action is brought by the grantor, not in his own behalf,
but for the purpose of having the grantee account for the
proceeds of the property conveyed for the benefit of the
grantee's creditors, the action can be maintained." In
Traders' National Bank v. Steere,3 the court says : "The
conveyance of property by a contract which is void as
being against public policy in a particular which has no
reference to creditors does not necessarily give creditors
a right to pursue the property after the contract has been
fully executed. Such a contract may or may not be
fraudulent as against creditors. If it is, they may set it
aside ; if it is not, they cannot." In hi re Mapleback,4 cited
in the last case, it appeared that the debtor owed one of
his creditors one hundred pounds, and forged his name
upon a bill of exchange for one hundred pounds more,
which was discounted at a bank. Just before the bill of
exchange became due, the debtor wrote to the creditor
confessing his crime, and entreating him to furnish the
money to enable the debtor to take up the bill and con-
ceal the crime, and offering security. The creditor fur-
nished the money and took the conveyance as security
for the amount and also for his former debt. The Lord
Justices, without expressly deciding that the transaction
was illegal, held, that, if it was, the assignee could not
take advantage of it, because it was not a fraud upon
creditors nor a fraud against the bankrupt act.

§398. General rule and policy. — These covinous con-
veyances are binding upon heirs,5 legatees,6 and, as is

1 Citing Butler v. Hildreth, 5 Met. 4 4 Ch. D. 150.

(Mass.) 49 ; Snow v. Lang, 2 Allen B Moseley v. Moseley, 15 N. Y. 334 ;

(Mass.) 18; Harvey v. Varney, 98 Dent v. Ferguson, 132 U. S. 50, 10 S.

Mass. 118; Morgan v. Abbott, 148 C. Rep. 13; Robertson v. Sayre, 134

Mass. 507, 20 N. E. Rep. 165. See g 107. N. Y. 99, 31 N. E. Rep. 250. See g 121.

2 Carll v. Emery, 148 Mass. 32. 18 6 Guidry v. Grivot, 2 Martin, N. S.
N. E. Rep. 574. (La.) 13. 14 Am. Dec. 193. See §

3 165 Mass. 393, 43 N. E. Rep. 187. 121, n.

724 GENERAL RULE AND POLICY. § 398

elsewhere shown,1 in certain cases upon personal repre-
sentatives 8 and assignees.3 The fraudulent conveyance
is treated as so far valid that creditors of the vendee may
seize upon the property and may even cancel a recon-
veyance of it to the grantor.4 A court of equity will
not intervene to give relief to either party from the
consequences of a fraudulent conveyance. The maxim
"in pari delicto potior est conditio defendentis" must
prevail.5

Though a reconveyance cannot be enforced,6 the
fraudulent vendee is said, in some of the cases, to be
under a high moral and equitable obligation to restore
the property.7 The law is not so unjust as to deny to
men the right, while it is in their power to do so, to
recognize and fulfill their obligations of honor and good
faith. And until the creditors of the vendee acquire
actual liens upon the property, they have no legal or
equitable claims in respect to it, higher than or superior

1 See §§ 112, 113. v. American Preservers' Co., 157 111.

2 Blake v. Blake, 53 Miss. 193 : 316, 41 N. E. Rep. 765.

Merry v. Fremon, 44 Mo. 522 ; Davis 6 Where a person fraudulently and

v. Swanson, 54 Ala. 277 : Loomis v. collusively accepts a conveyance of

Tifft, 16 Barb. (N. Y.) 545. land from another, to aid the grantor

3 See § 115 ; also Chap. XXI. in defrauding creditors, the wife and

4 Chapin v. Pease. 10 Conn. 69. children of the grantee after his death
See £ 387. In Allison v. Hagan, 12 are mere volunteers, and take no
Nev. 46, the court said: "Nor will greater rights than the grantee had
the courts, as between the parties to in his lifetime. Farrar v. Bernheim,
a fraudulent conveyance, or between 41 U. S. App. 172, 21 C. C. A. 264.

a fraudulent grantee and his cred- " In Fargo v. Ladd, 6 Wis. 106, it

itors, permit either the fraudulent was held that where the grantee of

grantor or grantee to be heard in property fraudulently conveyed had

avoidance of the fraudulent act." voluntarily reconveyed to the grantor,

5 Randall v. Howard. 2 Black, 588 ; in apparent execution of his trust, he
Dent v. Ferguson, 132 U. S. 64, 10 S. could not thereafter make a valid
C. Rep. 13 ; Wheeler v. Sage, 1 Wall. claim to the property, or its proceeds,
518; Bartle v. Nutt, 4 Pet. 184, on the ground of the original fraudu-
189 ; Schermerhorn v. De Chambrun, lent conveyance. See Second Na-
64 Fed. Rep. 206; Kirkpatrich v. Clark, tional Bank v. Brady, 96 Ind. 505.
132 111. 342, 24 N. E. Rep. 71 ; Bishop

§ 399 WHEN AID WILL BE EXTENDED. 725

to, those of the grantor.1 It has been contended that
the transfer only made visible an ownership which already
existed, though secretly.2 While the fact that title to
real estate was put in one to hold for another with intent
to defraud creditors, might be a defense by the trustee in
an action to establish the trust, yet where the trust has
been completed by a conveyance to the equitable owner
the principle has no application.3

The boundaries of these rules as to the conclusiveness
of voluntary or covinous conveyances between the parties
have, however, been broken over in some instances. And
the rule itself has been questioned upon the theory that
both parties are seldom equally to blame in a transaction
tinctured with fraud in each, and if they are, the doctrine
seems to encourage a double fraud on the one side to pun-
ish the single fraud on the other.4

§ 399. When aid will be extended to grantors. — This rule,
it has been said, did not in the nature of things apply
where the grantor was not in pari delicto* with the
grantee, as where a creditor availed himself of his power
over a debtor and induced him by misrepresentation to

1 Davis v. Graves, 29 Barh. (N. Y.) was with similar caution provided

485 ; Stanton v. Shaw, 3 Baxt. (Term.) that the voluntary conveyances in

12 ; Dunn v. Whalen, 21 N. Y. Supp. the contemplation of that act should

869. Mr. Roberts says (Roberts' Fraud- be void only as against those who

ulent Conveyances, p. 641), that should thereafter purchase upon yail,

" voluntary conveyances were always i. e. valuable, consideration,

binding upon the party, and all claim- 2 See Keel v. Larkin, 83 Ala. 146, 3

ing voluntarily under him ; and the' So. Rep. 296, and cases cited ; Lillis v.

statutes of Elizabeth against fraud- Gallagher, 39 N. J. Eq. 94.

ulent conveyances have expressly 3 Campbell v. First Nat. Bk. 22 Col.

guarded against a construction in 177, 43 Pac. Rep. 1007 ; Ownes v.

derogation of this rule." Thus in the Ownes, 23 N. J. Eq. 60.

statute 13 Elizabeth, c. 5, it was pro- 4 Gowan v. Gowan, 30 Mo. 476.

vided that the fraudulent gifts and Compare Nichols v. McCarthy. 5:!

grants therein denounced should be Conn. 299.

void only against those persons whose B Melbye v. Melbye, 15 Wash. 650,

actions, debts, and accounts are hin- 47 Pac. Rep. 16; Place v. Hay ward,

dered and delayed ; and in 27 Eliz. it 117 N. Y. 487, 23 N. E. Rep. 25.

726 WHEN AID WILL BE EXTENDED. § 399

make a fraudulent conveyance to him.1 Thus in Roman v.
Mali.2 the doctrine is asserted that there may be differ-
ent degrees of guilt as between the parties to a fraudu-
lent or illegal transaction, and if one party act under
circumstances of oppression, imposition, undue influence,
or at a great disadvantage, with the other party con-
cerned, so that it appears his guilt is subordinate to that
of the defendant, the court in such case will extend relief.
Parker, J., said in James v. Bird : a " There is no case in
equity where any relief has been given to a fraudulent
grantor of property, the conveyance being made to pro-
tect it against his creditors, except that of Austin v.
Winston,4 decided by a divided court, and perhaps, under
the circumstances, properly decided." The authority of
the case, however, has been in some measure acknowl-
edged in several States.5 The court in Fletcher v.
Fletcher,6 concedes that it would assist the grantor in
cases where circumstances were shown which warranted
its interposition on recognized and settled grounds of
equity jurisprudence, " such as fraud in procuring the
deed, imposition by the grantee in violation of some fidu-
ciary relation, delusion, or the like, on the part of the
grantor, at the time of executing the deed." In Pinck-
ston v. Brown,7 it appeared that at the time the deed was

1 Austin v. Winston, 1 Hen. & M. 4 1 Hen. & M. (Va.) 33.

(Va.) 33 ; Holliway v. Holliway, 77 6 See Bellamy v. Bellamy, 6 Fla.

Mo. 396. In Mississippi it is held that 104; Freeman v. Sedwick, 6 Gill

a defendant cannot resist payment of (Md.) 41 ; Cushwa v. Cushwa, 5 Md.

the purchase-price of goods sold and 53; Quirk v. Thomas, 6 Mich. 111.

delivered to him, on the ground that But compare Clay v. Williams, 2

the sale was in fraud of the creditors Munf. (Va.) 121 ; Starke v. Littlepage,

of the seller. Gary v. Jacobson, 55 4 Rand. (Va.)371: Jones v. Comer, 5

Miss. 'Juj. gut see, contra, Church v. Leigh (Va.) 357; Griffin v. Macaulay,

Muir, :;:; N. J. Law 318: Nellie 7 Gratt. (Va.) 564.

v. ( lark, 4 Hill (N. Y. ) 424 : Walton v. 6 2 MacAr. (D. C.) 39, 40.

Bonham, 24 Ala. 513. SeeMoseleyv. ' 3 Jours' Eq. (N. C.) 490. See

Mosely, 15 N. Y.334 Nichols v. McCarthy, 53 Conn. 299,

U Md. 513. 23 Atl. Rep. 93.

z 8 Leigh (Va.) 510.

§ 399 WHEN AIL) WILL BE EXTENDED. ;_V

executed the plaintiff was old, infirm, weak of mind, and
much diseased and distressed in body. The deed was
made with a view to hinder and delay the collection of a
debt. The party benefited was the plaintiff's oldest son,
in whose ability and integrity she had the greatest confi-
dence. The transfer had undoubtedly been consummated
by means of the undue influence and deceit practiced
upon and exercised over the aged and confiding mother
by the son. The court held that the mother and son
were in delicto, but not in pari delicto, and at the suit of
the mother set the transaction aside.1 In a case which
came before the Supreme Court of New York,2 A. sued
B. for slander. B., to protect himself, conveyed property
to C, who agreed to reconvey. B. defeated the slander
suit. It was held that C. must reconvey. Johnson, J.,
said : " Gilman had at the time no other creditors, and
his sole design was to get his property out of the way of
any judgments which might possibly be recovered in
those actions, and not to hinder, delay, or defraud any
other person whatever. It turned out that the several
plaintiffs in those actions had no 'lawful' claim against
Gilman. They were not creditors, and, as to them, the
conveyance was valid, as it was, also, between the grantor
and grantee. It was not designed to defraud the plaintiff
of his claim, as the referee expressly finds. As this con-
veyance was not made with intent to hinder, delay, or
defraud any existing creditor, or any person having a law-
ful claim, but only a person making an unlawful and
unfounded claim, which the defendant Gilman disputed
and denied, and ultimately defeated, it may present a
grave question, whether it falls at all within the condem-

1 See Osborne v. Williams, 18 Ves. 209, 38 N. Y. Supp. 546 ; Block v.

382 , Story's Equity Jur. § 300. Darling, 140 U. S. 239, 11 S. C. Rep.

s Baker v. Gilman, 52 Barb. (N. Y.) 832.
36. See Kain v. Larkin, 4 App. Div.

728 CASES AND ILLUSTRATIONS. § 4OO

nation of the statute The sole object of the statute

here, in declaring conveyances void, is to protect, and
prevent the defeat of law fid debts, claims, or demands,
and not those which are unlawful, or trumped up, and
which have no foundation in law or justice, and the verity
of which is never established by any judgment, or by the
assent of the person against whom they are made. As
against claims and demands of the latter class, the statute
does not forbid conveyances or assignments, nor declare
them void." It may well be seriously questioned, how-
ever, whether this contention can be uniformly upheld.
The courts would be justified in refusing to inquire
whether the grantor's apprehensions as to the recovery
of a judgment against him were well or ill founded, and
might well incline to leave the parties in the position in
which it found them.1 In a Massachusetts case property
fraudulently conveyed had been retransferred to the
grantor the grantee agreeing to account for the profits.
It was decided that this agreement was valid and binding
upon him.2

§ 400. Cases and illustrations. — In Boyd v. De La Mon-
tagnie 3 it appeared that a husband had secured a gratu-
itous transfer of property from his wife by means of false
representations on his part, that she was liable for a debt,
when in fact no such liability existed. Though the trans-
action was consummated in the belief that the effect of the
transfer would be to hinder and delay the creditors, or in
some way to save the property, it was held to be no
answer that the wife consented to the act with a view to
defraud creditors. Chief-Justice Church said: "The
parties do not stand on equal terms, and the husband

1 Compare Tan turn v. Miller, UN. 2 Stillings v. Turner, 153 Mass. 534,

J. Eq. 551 ; Harris v. Harris, 23 Gratt. 27 N. E. Rep. 671.

(Va.) 7:57, 764. and see contra, Flet- :; 7^ N. Y. 498; Haack v. Weicken,

cher v. Fletcher, 2 MacAr. (D. C.) 38. 118 N. Y. 74, 23 N. E. Rep. 133.

§ 400 CASES AND ILLUSTRATIONS. 729

cannot avail himself of the plea of particeps en' minis on
the part of the wife." A court of equity will interpose its
jurisdiction to set aside instruments between persons
occupying relations in which one party may naturally
exercise an influence over the conduct of another. A
husband is held to occupy such a relation to his wife, and
those equitable principles apply to them in respect to
gratuitious transfers by the wife to the husband.1 So in
Freelove v. Cole 2 it was decided that as there are degrees
of crime and of wrong, the courts can and will give relief
in many cases as against the more guilty. " To exclude
relief in such cases," said Smith, J., " the parties must not
only be in delicto but in pari delicto!' Applying this doc-
trine it was held that where the plaintiff was infirm of
mind and incompetent to manage and conduct his busi-
ness affairs with ordinary prudence and discretion, and the
defendant was his son-in-law, confidential friend, and legal
adviser, and had procured a conveyance to himself of
the property in order to place it beyond the reach of the
plaintiff's creditors, relief might still be accorded the
plaintiff.3 Ford v. Harrington,4 an important and lead-
ing case in the New York Court of Appeals, in which
judges of the eminence of Denio, Johnson, Comstock,

'See Barnes v. Brown, 32 Mich, and the grantee. The rule is not uni-

146. versal, and, as stated, is not supported

2 41 Bart). (N. Y.) 326; affirmed, 41 by the authorities.'' Cited and quoted
N. Y. 619, without an opinion. are Osborne v. Williams, 18 Ves. 382 ;

3 In O'Conner v. Ward, 60 Miss. Pinckston v. Brown, 3 Jones' Eq. (N.
1025-1035 (decided in April, 1883), the C.) 494 ; Smith v. Bromley, 2 Don.-.
Supreme Court of Mississippi said: 696; Browning v. Morris, Cowp. 790 ;
"We do not agree with the proposi- Boyd v. De La Montagnie, 73 N. Y.
tion announced by Mr. Bump in his 498 ; W. v. B. 32 Beav. 574 ; Ford v.
work on Fraudulent Conveyances, Harrington, 16 N. Y. 285.

that where a person has sufficient 4 16 N. Y. 285. See Freelove v.

capacity to contract, and makes a con- Cole, 41 Barb. (N. Y.) 318 ; Gibson v.

veyance with intent to hinder, delay, Jeyes, 6 Ves. 266 ; Smith v. Kay. 7 II.

or defraud his creditors, a court of L. Cas. 771; Place v. Hayward, 117

equity will not inquire into the N. Y. 496, 23 N. E. Rep. 25.
degrees of guilt between the grantor

730 CASES AND ILLUSTRATIONS. § 4OO

Selden, and Brown participated, seems clearly to establish
the same general principle. It was there expressly held
that where an attorney procured from a client a convey-
ance of a valuable interest in land for a manifestly inade-
quate consideration, the conveyance being advised by the
attorney with a view to defeat a creditor of the grantor,
though the agreement was illegal, yet the rule prohibiting
the attorney from obtaining any unconscionable advantage
in dealing with his client must prevail, and the attorney
could be compelled to convey the land.1 And where the
parties to a conveyance are brothers, the grantor being
crippled and diseased in body, weak in mind, and easily
influenced, and under the control of the grantee, who was
a person vigorous in both body and mind, the conveyance
was set aside at the suit of the grantor, it appearing that
no consideration was paid, that a reconveyance was prom-
ised, and that the transfer was induced by operating upon
the grantor's fears that he was in danger of losing the
property by reason of a breach of promise suit which had
no foundation in fact.2

1 See Boyd v. De La Montagnie, 4 to leaving the son gave the father
T. <fe C. (N. Y.) 153; Place v. Hay- scant security for the liability. W., a
ward, 117 N. Y. 496, 23 N. E. Rep. 25 ; justice of the peace, was employed to
Moore v. Jordan, 65 Miss. 232, 3 So. draw the papers. Thereafter W., by
Rep. 737 ; Block v. Darling, 140 U. S. threats to the effect that the convey -
239, 11 S. C. Rep. 832. ance was fraudulent and could be set

2 Holliway v. Holliway, 77 Mo. 396, aside, persuaded plaintiff to give de-
See Cadwallader v. West, 48 Mo. 483 ; fendants a mortgage to secure a debt
Bradsbaw v. Yates, 67 Mo. 221 ; Ford of the son which the father was under
v. Hennessy, 70 Mo. 581 ; Ranken v. no obligations to assume. Ruger, Ch.
Patton, 65 Mo. 378; Garvin v. Wil- J., said: "The extent to which the
Hams. 44 Mo. 465 ; Watkins v. Jones, plaintiff confided in the defendant
78 Hun (N. Y.) 496, 29 N. Y. Supp. Wattles is clearly shown by the fact
557; Place v. Hayward, 117 N. Y. that he had frequently employed him
496, 23 N. E. Rep. 25. In Fisher v. in business transactions, and that the
Bishop, 108 N. Y. 25, 29, 15 N. E. conveyances which he then threat-
Rep. 331, it appeared that plaintiff, ened to annul and overthrow were
ulio was much advanced in years, be- drawn by him, and accepted under
came involved as indorser for his son, his advise and co-operation. It was
who failed and absconded. Just prior a gross breach of good faith for a

§40i

THE CASES JUST CONSIDERED EXCEPTIONAL.

731

§ 401. The cases just considered exceptional —The practi-
tioner, however, must be careful to remember that the
cases just considered are exceptions to a well-defined rule.
While it is possible to deduce from them a general prin-
ciple that degrees of guilt will be recognized in such trans-
actions, and that grantors may, in certain cases, reclaim
the property fraudulently alienated where the transaction
was superinduced by the unfair action of a vendee who
occupied some relation of confidence which enabled him

person thus trusted, and who had by
conducting the business, vouched for
its validity and lawfulness, to turn
around for the purpose of gaining a
personal advantage, and assert that
he had been engaged in an illegal
transaction, which he could at his
own option annul and destroy. The
case shows that by these means the
defendants have obtained security for
a large amount, from an old man
who was under no legal or moral
obligation to give it, and without any
consideration to support it except the
nominal one of a dollar, and that
this was extorted at a time when he
was laboring under much distress and
anxiety of mind, on account of the
trouble that encompassed him. The
parties in this case did not meet on
equal terms, and the defendant took
an unfair advantage of the position in
which the j' had been placed, and of
the confidence reposed in them by the
plaintiff, to procure from him a val-
uable security to which they had no
legal right." In Block v. Darling, 140
U. S. 239, 11SC. Rep. 832, the court
says: "Nor did the court below
err in excluding evidence offered
by the defendants conducing to
show that the money claimed by
the plaintiff to have been depos-
ited with them to be paid to him on
his order was so deposited with the
intent to cheat and defraud his cred-

itors. The evidence, if admitted,
would not have relieved the defend-
ants from responsibility to account for
it. The plaintiff's suit to compel the
return of the money may be regarded
as one in disaffirmance of the arrange-
ment under which the defendants
claimed to have received it ; and, if
successful, would tend to defeat the
alleged purpose of defrauding his
creditors by having it kept upon secret
deposit with the defendants. It is
not a suit to recover money received
and paid out under an illegal or im-
moral contract which has been fully
executed. The suit is necessarily a
disavowal upon the part of the plain-
tiff of any purpose to hide this money
from his creditors. To allow the
defendants to retain it upon the
ground that he had originally the pur-
pose to conceal it from his creditors,
would be inconsistent with the spirit
and policy of the law. (Spring Co. v.
Knowlton, 103 U. S. 49, 58, and
authorities there cited.) Besides, the
deposit was good as between the
parties. The defendants do not rep-
resent the plaintiff's creditors, and tin'
latter are not suing." It is submitted
that a tendency is reflected in this
opinion which is opposed to tin-
general current of decisions and that
recoveries upon the theory indicated
by the court in the case cited should
not be encouraged.

732 THE CASES JUST CONSIDERED EXCEPTIONAL. §401

to unduly influence the vendor, yet a very clear case with
well-defined reasons for excepting it from the general
rule must be presented. Debtors contemplating fraudu-
lent alienations should draw little encouragement from
these exceptional cases, for, as a general rule, after
passing through the troubled waters of insolvency, they
will find themselves stripped of the power to reach or
recover the secreted property in the hands of their
fraudulent grantees. The ancient rule, in pari delicto
melior est conditio possidentis} is not to be easily uprooted,
and must not be considered as overthrown or abrogated
by these cases.2 The great effort has been, in at least a
portion if not all of the cases just considered, to show
that the parties were not in pari delicto because of the
reliance and confidence placed in the grantee, especially
when he assumed to advise or act in a professional
capacity, or occupied a position where he could exercise
undue influence over the vendor. In Renfrew v.
McDonald,3 the fraudulent grantor, seeking to set aside
a conveyance made to hinder creditors, was summarily
dismissed on the opening oral statement of his counsel.
The plaintiff alleged great intimacy with and confidence
in the defendant, and charged that it was through his
influence and procurement that the fraudulent convey-
ance had been made, and that defendant had knowingly
advised plaintiff that he had no defense to certain notes,
the collection of which plaintiff sought to hinder and
delay by the conveyance in question, when in fact a
defense did exist. The court said : " Nothing is alleged
by way of excuse for the attempted fraud, except what
might be with more or less truth alleged in every case.
The recipient of property with intent to defraud creditors,

1 Kirkpatrick v. Clark, 132 111. 347. a Cited in Pride v. Andrew, 51

24 N. E. Rep. 71 : Smith v. Hubbs, 10 Ohio St. 405, 38 N. E. Rep. 84.
Me. 71. 311 Hun (N. Y.) 255.

§ 40- ENFORCING FRAUDULENT DEED.

/ 33

possesses the intimacy and confidence of the fraudulent
debtor, and advises the attempted fraud and consents to
be made the instrument thereof. To allow the grantor
in such a case to set aside the grant and be restored to
all he has parted with for the illegal purpose, would be to
afford great encouragement to future attempts of that
character." In Fredericks v. Davis,1 the doctrine is
asserted that the grantor in an alleged fraudulent con-
veyance, made with full knowledge of the facts, is estopped
by his own warranty of title from testifying that the con-
veyance is fraudulent.2 This doctrine is supported by the
case of Phillips v. Wooster,3 wherein the court says :
"The position which the plaintiff occupies in relation to
the transaction complained of as fraudulent, excludes him
from alleging the fraud, or claiming any benefit against
it. The conveyance against which he now seeks to
derive advantage from the property, was made by him-
self, with a full knowledge of all the facts as they existed
at the time, as we are bound to presume since he has
shown nothing to the contrary.4 So that if the money
paid was the debtor's, as he now insists it was, and the
conveyance to the wife therefore fraudulent as against
creditors, it was not fraudulent as against him, for he
was not only consenting to the act, but himself per-
formed it."

§ 402. Grantee enforcing fraudulent deed. — The rule being
established that the courts will not interfere to set aside a
fraudulent executed contract as between the parties, it has

'3 Mont. 251. ' 751, 42 JN. W. Rep. 566; Rozell v.

2 Compare Dodge v. Freedman'e Vansyckle, 11 Wash. 79, 39 Pat. Rep.

Sav. & Trust Co., 93 U. S. 383 ; Pitts 270 ; Harper v. Harper, 85 Ky. 160,

v. Wilder, 1 N. Y. 525 ; Gates v. 3 S. W. Rep. 5.

Mowry, 15 Gray (Mass.) 564 ; Harvey 3 36 N. Y. 414.

v. Varney, 98 Mass. 118; Watkins v. "Citing Grant v. Morse. 22 N. Y.

Jones, 78 Hun (N. Y.) 496, 29 N. Y. 323.
Supp. 557 ; Wiley v. Carter, 77 Iowa

734

ENFORCING FRAUDULENT DEED. § 402

been contended that the same principle would preclude
the grantee both from enforcing his apparent right to the
possession of the land under the deed, and from collecting
the rents or damages.1 A consideration of the reason
and policy of the rule, however, led the courts to hold
otherwise. It is considered a mistake to suppose that the
parties being in pari delicto, the court would refuse the
grantee all remedy. The deed as between the parties is
perfectly good. The grantor, by a stern but necessary
policy of the law, is excluded from presenting the proof
which would show the fraud. He is in this respect the
actor; his fraud silences and estops him from averring
against his deed.2 The rule operates only in cases where
the refusal of the court to aid either party frustrates the
object of the transaction, and destroys one of the tempta-
tions to enter into contracts violating the policy of the
law.3 To permit the grantor, when sued by the grantee,
to plead the mutual fraud of the parties, in order to
enable him to avoid the effect of the deed by being per-
mitted to remain in possession of the property without
the payment of rent or damages, would virtually be per-
mitting him to reap the reward of his own iniquity since
he was the real actor in the fraud, and would tend to
encourage others to violate the law, with the hope of
profiting by committing frauds upon their creditors. It
would nullify the rule.4 There is a distinction between
an executed and an executory fraudulent contract. As
to the latter the court, where the parties are equally
participants in the fraud, in pari delicto, will leave them

1 Peterson v. Brown, 17 Nev. 176, 4 Rand. (Va.) 372. See Cushwa v.

30 Pac. Rep. 697. Cushwa, 5 Md. 52 ; Murphy v.

2Broughton v. Broughton. 4 Rich. Hubert, 16 Pa. St. 57.
Law (S. C.) 497. See Bonesteel v. * Murphy v. Hubert, 16 Pa. St. 57;

Sullivan, 104 Pa St, 9. Peterson v. Brown, 17 Nev. 177-179,

3 Peterson v. Brown, 17 Nev. 177, 30 Pac. Rep. 697.
30 Pac. Rep. 697 ; Starke v. Littlepage,

§ 403 FRAUD UPON A DEBTOR. 735

in the predicament where they place themselves, refusing
any relief or interference. And where the contract is
executed, as by a deed transferring the title, the court
acts upon the same principle, declining either to cancel
the deed or restore the title. But the effect is very
different ; in one case a specific performance will be
refused ; in the other the fraudulent grantee remains
owner of the estate as against the grantor, and all the
world, except the defrauded creditors.1 In Stillwell v.
Stillwell,2 the court said: " Whether the appellant's title
was fraudulent or not, was of no consequence in the
present case. Admitting, as has been admitted, that the
appellant's title, as derived from her husband, was void at
the instance of creditors, that fact did not prevent her
from setting up in a court of equity, that either her hus-
band or some one else had, by fraud, got the title from
her. To hold otherwise would be to lay down the
doctrine that the holder of one of these surreptitious
titles was, with respect to it, put out of the protection of
the law. There is no such principle of law or equity."

§ 403, Fraud upon a debtor as distinguished from fraud
upon creditors. — Fraud practiced by a third party upon a
debtor is manifestly a different thing from fraud upon
creditors, and it may well be doubted whether a creditor
can seize property the title to which has passed to a third
party, or attack such a conveyance where the creditor
proceeds upon the ground that the purchaser committed
a fraud upon the seller which entitled the latter to avoid
the sale. In Garretson v. Kane,3 the court used these
words : " A creditor cannot redress all the wrongs done
to his debtor. He cannot claim damages for a trespass
or for a deceit. A fraud like that offered to be proved in
this case would entitle the seller to relief in a court of

1 Walton v. Tusten, 49 Miss. 576. 3 27 N. J. Law 211 .

2 47 N. J. Eq. 278, 20 Atl. Rep. 960.

7 $6 DECLARING DEED A MORTGAGE. § 404

equity upon proper terms, and possibly a creditor may
have relief there; but he cannot step in and claim that
such a sale was absolutely void at law. If he can inter-
fere at all his rights will be the same as those of his debtor.
. . . . A creditor who seeks to avoid a sale as fraudulent
against him, does not represent his debtor, but exercises
rights paramount to his. There is in truth, no similarity
between [the] two kinds of fraud. In the one case it is,
either in fact or in law, the fraud of the debtor himself,
while in the other the debtor is the victim, and guilty of
no wrong. A case may occur combining both descrip-
tions of fraud."1 It will be at once apparent that this
element of the law enters largely into the cases in which
the debtor or grantor has a standing to attack or avoid
his own transfer.

§404. Declaring deed a mortgage. — As is elsewhere
stated, an absolute conveyance may be shown to be a
mortgage.2 The theory of the decisions is that dealings
between the borrower and the lender of money, or debtor
and creditor, conducted by requiring an absolute deed for
security, and a renunciation of all legal right of redemption
are so significant of oppression, and so calculated to invite
to or result in wrong and injustice on the part of the stronger
toward the weaker party in the transaction, as in them-
selves to constitute a quasi fraud against which equity
ought to relieve, as it does against the strict letter of an
express condition of forfeiture. The grounds of relief
being purely equitable, it may and should be refused if
the equitable considerations upon which it rests are want-

1 See Graham v. Railroad Co., 102 2 Campbell v. Dearborn, 109 Mass.

U. S. 148. Compare Eaton v. Perry, 130: Carr v. Carr, 52 N. Y. 251;

29 Mo. 96 ; Prosserv. Edmonds. 1 Y. Stevens v. Wiley, 165 Mass. 406, 43 N.

& C. 481 ; French v. Shotwell, 5 E. Rep. 177 ; Minchin v. Minchin, 157

Johns. Ch. (N. Y.) 555 ; Crocker v. Mass. 265, 32 N. E. Rep. 164. See

li.-llangee, 6 Wis. 645 ; Hovey v. Hoi- § 238.
comb, 11 111. 660 ; McAlpine v.
Sweetzer, 76 Ind. 78.

§ 404^ MORTGAGED PROPERTY. 737

ing. Therefore an absolute deed made by a debtor to
one creditor, with the intention to defraud other creditors,
will not be adjudged an equitable mortgage at the solici-
tation of the debtor. Fraud against creditors cannot be
set up, it is true, by any one not standing upon the rights
of a defrauded creditor to defeat any legal claim or inter-
est which 'the fraudulent debtor may seek to enforce.
But such a party is in no condition to ask a court of
equity to interfere actively in his behalf, to secure to him
the fruits of his fraudulent devices. One who comes for
relief into a court whose proceedings are intended to
reach the conscience of the parties, must first have that
standard applied to his own conduct in the transactions
out of which his grievance arises. If that condemns him
he cannot insist upon applying it to the other party. *

§ 404a. Redeeming mortgaged property. — The courts
will not seek to enlarge the scope or legal effect of a
transaction that is tainted with a design to defraud
creditors. Hence where property is pledged or mort-
gaged by a debtor the pledgor or mortgagor will be per-
mitted to redeem it though the design to defraud
creditors may have been present in his mind when the
pledge was made or the loan procured. Such a trans-
action does not in itself purport to vest an absolute title
in the pledgee or mortgagee, and the courts will not
strive to enlarge or vary its operation merely to inflict
punishment upon a fraudulent debtor by cutting off the
right to redeem.2 Another illustration may be cited. In
Gowan v. Gowan 3 it was expressly decided that where a
debtor deposits personal property with a bailee to protect
it from creditors, the bailee cannot defeat the debtor's
action to recover the property by setting up the fraud.

1 Hassam v. Barrett, 115 Mass. 256, 2 See Smith v. Quart/. Mining Co.,

258; Brown v. Reilly, 72 Md. 489, 20 14 Cal., 242 : Taylor \. Weld, ■"> Mass.

Atl. Rep. 239; but see Halloran v. 109, 116; Jones v. Rahilly, 16 Minn. 320.

Halloran, 137 111. 100, 27 N. E. Rep. 82. 330 Mo. 472.
47

CHAPTER XXVII.

JURISDICTIONAL QUESTIONS — CONCLUSION.

§ 405. Jurisdiction beyond State bound-
aries.
406. Outside county of defendant's
residence.

§ 407. Appeal to United States Su-
preme Court — Uniting claims.
407a. Certificate of division.

§ 4°5- Jurisdiction beyond State boundaries. — A few gen-
eral observations will bring the discussion to a close.

Parties conducting litigations for creditors may be
reminded that the courts of one State cannot entertain
jurisdiction of an action to recover lands lying in another
State, where the proceeding is in rem? for actions for the
recovery of real property, or for the determination of an
interest therein, are local and must be brought in the
State and county where the premises are situated.2 But
where the court has jurisdiction of the proper parties, it
may, by its judgment or decree, as we have seen, compel
them to do equity in relation to lands located without its
jurisdiction. The court in such case acts in personam?
and may compel a specific performance of a contract for
the sale of land beyond the borders of the State,4 or a
conveyance of lands outside the State jurisdiction when

1 Gardner v. Ogden, 22 N. Y. 333.

' Sedgwick & Wait on Trial of Title
to Land 2d, ed., § 465, and cases cited.
See American Union Tel. Co. v. Mid-
dleton, 80 N. Y. 408 ; Blake v. Free-
man. 13 Me. 130. Foreign statutes
have no force ex proprio vigore, but
the title of a foreign assignee may be
recognized by comity if this can be
done without injustice to home citi-
zens. Matter of Waite, 99 N. Y. 433.

s Gardner v. Ogden, 22 N. Y. 333 ;
Arglasse v. Muschamp, 1 Vera. 75 ;
Penn v. Lord Baltimore, 1 Ves. Sr.
444; Paschal v. Acklin, 27 Tex. 173;
Dale v. Roosevelt, 5 Johns. Ch. (N. Y.)
174; Newton v. Bronson, 13 N. Y.
587 ; Sutphen v. Fowler, 9 Paige's Ch.
(N. Y.) 280 ; Great Falls Mfg. Co. v.
Worster, 23 N. H. 462.

4 Newton v. Bronson, 13 N. Y. 587.

§ 4°6 defendant's residence. 739

the title has been fraudulently obtained by a defendant ; ]
and a debtor may be compelled to convey lands in
another State for the benefit of creditors, so as to vest
in the grantee the legal title.3 So the court has power
to decree the cancellation of a void mortgage which is an
apparent lien and cloud upon property beyond the jur-
isdiction of the court. "This power," says Johnson, J.,
" has been frequently exercised to compel parties to per-
form their contracts specifically, and execute conveyances
of lands in other States, and also to set aside fraudulent
conveyances of lands in other States."8 "Where the
necessary parties are before a court of equity," said
Swayne, J., " it is immaterial that the res of the contro-
versy, whether it be real or personal property, is beyond
the territorial jurisdiction of the tribunal. It has the
power to compel the defendant to do all things necessary,
according to the lex loci rei sitcz, which he could do vol-
untarily, to give full effect to the decree against him."4
Without regard to the situation of the subject-matter,
such courts consider the equities between the parties,
and enforce obedience to their decrees by process in
personam?

The law of the domicile of the owner governs the
validity of a transfer of personal property. 6

§ 406. Outside county of defendant's residence. — In a case
which arose in Georgia,7 it appeared that the constitution
and laws of that State required that suits must be brought
in the county in which the defendant resided, and it was

1 Gardner v. Ogden, 22 N. Y. 827. 6 Miller v. Sherry, 2 Wall. 249 ;

* Bailey v. Ryder, 10 N. Y. 363. Mitchell v. Bunch, 2 Paige (N. Y.)
' Williams v. Ayrault, 31 Barb. (N. 606.

Y.) 364, 368. 6 Barth v. Backus, 140 N. Y. 230,

* Phelps v. McDonald, 99 TJ. S. 308 ; 35 N. E. Rep. 425.

Municipal Investment Co. v. Gardiner, 7 Taylor v. Cloud, 40 Ga. 288. See

62 Fed. Rep. 956 ; Hart v. Sansom, Johnson v. Griffin, 80 Ga. 553, 7 S. E.

110 U. S. 151, 3 S. C. Rep. 586. Rep. 94.

740 UNITING CLAIMS. § 407

held that it was good ground of demurrer to a bill in
equity to set aside a fraudulent conveyance of land that
it was not filed in the county of the defendant's residence.
The defect was held not to be cured by the fact that the
bill was filed in the county where the land was situated,
or because a lessee of the defendant in possession of the
property was a party to the bill, when no substantial
relief was sought against such tenant.1 This is exceptional
practice, for, at least so far as realty is concerned, the
action to set aside a conveyance would be local, and local
actions should be brought in the county where the land
lies.2

In Missouri a judgment-creditor who acquires title to
land situated in different counties, by purchase at sheriff's
sale, may bring a single action to set aside conveyances
made by the debtor to a single person. Separate suits
in each county need not be brought.3

$ 407, Appeal to United States Supreme Court— Uniting
claims. — When judgment-creditors join in a suit to set
aside a fraudulent conveyance by their debtor, and the
amounts found due to the creditors respectively are less
than the jurisdictional limit of the United States Supreme
Court, the several claims cannot be united to give juris-
diction on appeal.4 In Seaver v. Bigelows,5 Nelson, J.,
said : " The judgment-creditors who have joined in this

1 See Smith v. Bryan, 34 Ga. 53. U. S. 42, 12 S. C. Rep. 364 ; Busey v.
See Caswell v. Bunch. 77 Ga. 505. Smith, 67 Fed. Rep. 13 ; Putney v.

2 Sedgwick & Wait on Trial of Title Whitmire, 66 Fed. Rep. 386. See
to Laud, 3ded., §465; Augusta Sav. Fourth National Bank v. Stout, 113
Bank v. Stelling, 31 S. C. 360, 9 S. E. U. S. 681, 5 S. C. Rep. 695 ; Hawley
Rep. 1023. v. Fairbanks. 108 U. S. 548, 2 S. C.

3 Lindell Real Estate Co. v. Lin- Rep. 846 ; Ex parte. Phoenix Ins. Co.,
dell, 133 Mo. 394, 33 S. W. Rep. 466. 117 U. S. 369, 6 S. C. Rep. 772 ; Tup-

1 Schwed v. Smith, 106 U. S. 188; per v. Wise, 110 U. S. 398, 4 S. C.

Gibson v. Shufeldt, 122 U. S. 27, 7 S. Rep. 26 : Stewart v. Dunham, 115 U.

C. Rep. 1066 ; Davis v. Schwartz, 155 S. 61, 5 S. C. Rep. 1163.
U. S. 647, 15 S. C. Rep. 237; New 5 Wall. 203: Hunt v. Bender, 154

Orleans Pac. Ry. Co. v. Parker, 143 U. S. 556, 14 S. C. Rep. 1163.

§ 407a CERTIFICATE OF DIVISION. 74 1

bill have separate and distinct interests depending upon
separate and distinct judgments. In no event could tin-
sum in dispute of either party exceed the amount of their

judgment The bill being dismissed each fails

in obtaining payment of his demands. If it had been
sustained, and a decree rendered in their favor, it would
only have been for the amount of the judgment of each."
In Schwed v. Smith x the same court held that if the
decree was several as to creditors it was difficult to see
why it was not also several as to their adversaries, the
theory being that although the proceeding was in form
but one suit, its legal effect was the same as though
separate suits had been instituted on each of the separate
causes of action.3

§ 407a. Certificate of division. — Whether a sale and deliv-
ery of a debtor's stock of goods, by way of preference of
a bona fide creditor, is fraudulent against other creditors,
involves a question of fact, depending upon all the circum-
stances and cannot be referred to the United States
Supreme Court by certificate of division of opinion.3

This closes the discussion. We have traced the famous
statute of Elizabeth from its enactment to the present
time, and have seen how important the place it fills has
become in our jurisprudence. Twyne's case is still a
great land-mark in this branch of the law. The volume
of litigation engendered by covinous alienations is scarcely
creditable to the integrity of our people. The ability of
the courts to successfully grapple with fraudulent debtors
and purchasers in bad faith, without the coercive aid of
imprisonment, in view of the growth of statutory exemp-
tions and spendthrift trusts, frequently becomes a matter

1 106 U. S. 188, 1 S. C. Rep. 221. 3 Jewell v. Knight, L23 U. S. 426,

2 See Ex parte Baltimore & O. R. 8 S. C. Rep. L93. Compare Graver v.
R. Co., 106 U. S. 5, 1 S. C. Rep. 35. Faurot, 162 U. S. 435, 16 S. C. Rep. 136.

742 CONCLUSION. § 407a

of grave doubt. Hence it is that the existence of cases
accomplishing results like those of Cutting v. Cutting,1
and Broadway Bank v. Adams,3 is to be so deeply
deplored. That the law formulating the rights and regu-
lating the remedies of creditors against covinous convey-
ances and for the conversion of equitable assets is develop-
ing in the right direction, and becoming more effectual
against the debtor class is claimed in some directions. It
is still, however, in an unsatisfactory condition. The
many forms in which a debtor's assets can be secreted or
spirited away, and his income protected, and the endless
varieties of fraudulent devices, render the solution of the
problem a matter of extreme difficulty. Time and
experience alone can work out a satisfactory conclusion.
The development must of necessity be in the courts, and
there is need that the pendulum should swing to the
creditor's side ; we doubt the ability of the legislative
power to further materially progress this branch of our
law.

1 See § 40. 2 See § 367.

INDEX.

\References are to sections^

ABANDONED exemptions, 50.

creditors may seize, 50.

rule applies to homestead, 50.
ABOLITION of imprisonment, 2.

cause of fraudulent transfers, 2.

effect upon remedies, 2.

restricts creditors' rights, 2, 407a.
ABSCONDING and non-resident debtors, 84.

remedies against, 84.

policy of the different States, 84.
ABSENCE of means in vendee, 241, 274.
effect of proof of, 241, 274.
general reputation as to means, admissible, 274.

of presumptions of fraud, 5, 6, 224.
ACCOUNT BOOKS, as evidence, 271a.
ACCOUNTING, by fraudulent vendee to debtor, 176.

effect of, 176.

vendee need not account second time, 176.

for rents, 26, 176.

for improvements, 26.

judgment on, 51, 176.
ACCUSED person, may testify as to intent, 205 ?i.
ACQUIESCENCE. See Ratification.

by laches, 148, 287.

estoppel by, 91.
ACTION, alienation pending, 157.
ACTION AT LAW. See Creditors' Remedies — Complainants.

creditors may proceed by execution, 59.

treat transfer as nullity, 59.

does not interfere with remedy in equity, 60.

advantages of suit in equity over, 60.
ACTIONS, ex delicto, bill of particulars allowed by grace, 162a.

744 References] INDEX. [are to sections.

ACTS speak louder than words, 8, 196.

done or omitted, 8, 8 n.
ACTUAL motive or intent, when unimportant, 9, 10, 197, 322, 382.
ACTUAL AND CONSTRUCTIVE FRAUD, 60, 192.

distinction between, as regards reimbursement, 192.

fraud in fact defeats reimbursement, 192.

the principle discussed, 192.

change of possession required, 253.

intent not decisive, 10, 197, 322, 382.
ACTUAL NOTICE, 372, 389.

See Notice.
ADJUDICATION, of debt, 74, 74 n.
ADMEASUREMENT, dower before, available to creditors, 2,2,.

reached in supplementary proceedings, 61.
ADMINISTRATORS, as complainants, 112, 113.

as defendants, 136, 136 n.

conveyance binding upon, 112, 113, 398.

rule in New York, 112.

may sue for cancelled debt, 42.
ADMITTED facts in pleading, 285.

cannot be contradicted, 285.
ADVANCES, future, 217.

ADVERSE POSSESSION, as defense to suit, 292.
AFFIRMANCE, of common law, statute of Elizabeth, 16.
AFFIRMATIVE, relief, rule as to, 166.

statute does not repeal common law, 16.

proof of deceit, 5.
AGENT, husband as, for wife, 303.

fraud of, affects principal, 198.

knowledge and notice must be clear, 198.
AGREEMENT to prefer, validity of, 390, 394.
AID, when extended to grantors, 399, 400.

See Existing Creditors, Subsequent Creditors.
AIDING DESCRIPTION, by evidence, 157.

attachment by injunction, 53.
ALABAMA, creditor without judgment may file bill, 73 ", y5-

joinder of claims, 85, 108.

debt must be due, 73 n.

as to change of possession, 250.

spendthrift trusts, 367a.

personal representative may file bill, 113 n.
ALIENATION, restraints upon, 14, 361, 362.
See Spendthrift Trusts.

References^ INDEX. [are to sections. 745

ALIENATION — continued.

property susceptible of fraudulent, 23.

aversion to restraints upon, 360, 362.

English and American cases concerning, 361 n.

claims prior and subsequent to, 105.

pending suit, 157.

doctrine of lis pendens, 157.
ALIMONY, conveyance to defeat, no n.

may be avoided, no ;/.

receiver for collection of, 188.

reaching trust income, 45.

no injunction to hold land subject to, 52.
ALIUNDE evidence of fraud, 236.
ALLEGING insolvency, 143.

fraud, 141.

conspiracy generally, insufficient, 141.

consideration, 144.

See Complaint.
ALLOWANCE, for improvements, 192 n, 193 n.

for wife, may be reached by her creditors, 22.

to fraudulent vendee, 176.
ALTERING MORTGAGE, effect of, 347.
ALTERNATIVE RELIEF, when extended, 153.

cumulative remedies, 65.
AMENDMENT OF COMPLAINT, 83, 156.

as to description, 156.

as to statement of value, 156.

rule as to permitting, 156.

of pleading, discretionary, 156.
AMERICAN, devise, assignments claimed to be, 316.
AMOUNT, of settlement, 306.

of consideration, 207, 223.
ANCESTOR'S DEED, not impeached by heir, 121.
ANCIENT LAWS, against insolvents, 1, 1 n.
ANCIENT POWER, of creditors, 1, 1 n.
ANCIENT PRACTICE, as to necessity of judgment, 85.
ANCILLARY RELIEF, by equity, 60.

collateral to maintain action, 63.

discovery as, 147.
ANDERSON v. BLOOD, change in the law, 376a.
"AND OTHERS," meaning of, 110.

who embraced in, no.

claimant of alimony, no n.

J '46 References'^ INDEX. [are to sections.

ANNUITIES may be reached, 24, 45.
ANOTHER ACTION, pending, 2860.
ANSWER OR PLEA, 158-167.
(1.) Generally, 158.

accepted as true, when, 158, 159, 160.

fraud not presumed, 5, 6, 158.

affirmative defense, 158.

inconsistent defenses, 158.

facts attacking title, 158.

allegations of knowledge or notice, 158.

bill of particulars, 162a.

denying fraud or notice, 163.

overcoming denial in, 159.

as evidence, 159, 159 n, 160.

admission and avoidance, 164.

evidence of witness against, 160.

receiver before, 184.
(2.) Pleading to discovery and relief , 161.

rules as to, 161.

particularity of denial in, 162.

avoiding discovery, 165.
(3.) Affirmative relief, 166.

must be claimed in answer, 166.

what accomplished by, 166.
(4.) Verification, 167.

pleadings usually verified, 167.

waiver of verification, 167.

sworn answer taken as true, 160.
ANTECEDENT agreement to prefer, 342a, 394.

creditors, sharing with subsequent, 104.
ANTEDATING instrument, badge of fraud, 229.
ANTE-NUPTIAL SETTLEMENT, marriage as consideration,
212, 306.

fraud in, 302.
ANTICIPATING income by assignment, 367.
APPARENT FAIRNESS, will not save transaction, 241.
APPARENT LACHES, excusing, 148.
APPARENT OWNERSHIP, rights acquired, 287.
APPELLATE TRIBUNAL, objection to jurisdiction in, 88, 88 ;/.
APPOINTMENT of receiver, in judgment, 170.

in supplementary proceedings, 61, 116.

of corporation, 117.

contests over realty, 187.

References]. INDEX. [are to sections. 74-7

APPOINTMENT — continued.
to collect alimony, 188.
of various interests, 188.
when matter of course, 184.
in foreclosure, 187 n.

See Receiver.
ARKANSAS, change of possession, 250.

trust income, 367a.
ARREST OF DEFENDANT, 191.
rule in New York, 191.

actual intent to defraud must be shown, 191.
constructive fraud insufficient, 191.
of partner, 191.

lex fori governs right to, 64, 191.
ARTICLES OF SEPARATION, 310.

become voluntary settlement upon reconciliation, 310.
ASSAULT, claims for, cannot be reached, 34.
claims do not pass to assignee, 316a.
alienations to avoid demands for, 22.
ASSENT, of assignee, 316^.
ASSERTIONS OF GOOD FAITH, inconclusive, 8.

See Bona Fide Purchasers.
ASSETS, available to creditors, 23-42.

membership of stock exchange constitutes, 35.

tangible property may be reached, 24.

expectant estate, 24, 29.

products of land, 24.

promissory notes, 24.

bank bills, 24.

money, 24.

improvements, rents, and profits are, 26.

crops constitute, 27.

exceeding liabilities in assignments, 340.

property substituted or mingled, 28.

estates in remainder or reversion, 29.

equitable interests, 30.

equity of redemption, 31.

reservations, 32, 272.

of corporation, trust fund, 117, 119, 139.

chosss in action, 33.

trade-marks, 36.

book royalties, 37.

patent rights, 24, 38.

748 References] INDEX. \_are to sections.

ASSETS — continued.

powers, 39, 40.

promises of third parties, 43.

income of trust estate, 45, 360, 364, 366.

intentional omission of, 345.

pursuit of, when corporation changes name, 119.

squandering, by directors, 119.
What are not assets.

exempt property, 46-50, 365.

gifts of small value, 41.

powers, in New York, 40, 368a.

powers, in Pennsylvania, 368a.

claims for torts, 34.

income of trust estate, 360-368.

talents or industry, 50^.

payments made to a debtor, 50^.
ASSIGNED PROPERTY, value as affecting, 23.
ASSIGNEE. See Fraudulent General Assignments.

gets title to trade-marks, 36.

property transferred to, 316a.

may sue in replevin, 316a.

not an officer of the court, 316.

control of courts over, 316.

general, rights of, as complainant, 92, 115.

attacks fraudulent conveyances in New York, 115.

in bankruptcy, as complainant, 114.

title of, 35, 36, 114, 115, 364.

may sue carrier, 316a.

exempting from liability, 334.

authority of, to compromise, 336.

fraud of, 337.

innocent, rights of, 319.

ignorance or incompetency of, as badge of fraud, 338.

as defendant, 133.

assignor cannot substitute successor for assignee, 316.

rights and duties of, 319a.

not personally liable, 319^.

must exercise ordinary prudence, 319^.

in bankruptcy, as complainant, 114.

represents creditors, 114, 115.

property reverts after discharge, 114.

discharge of, 114.

reaching fund in hands of, 44.

References^ INDEX. \ are to sections. 7 AQ

ASSIGNEE —continued.

no attachment of funds in hands of, 77 n.

estoppel of creditor by accepting benefits, 115.

effect of neglect to sue, 115 n.
ASSIGNMENT, 316-346.

See Fraudulent General Assignments.

what constitutes, 316.

construed like other contracts, 20 n, 343.

action in aid of, 109.

creditors may overturn, 108.

bill of particulars as to fraud in, 162a.

creditors, when estopped to attack, 115.

assailing and claiming under, 316 n.

debtor defendant in suit to cancel, 128.

takes effect from delivery, 316a.
ASSIGNOR, must not withhold assets, 3i6tf.

See Fraudulent General Assignments.
ASSUMPSIT, remedy by, 62.

will not lie against fraudulent vendee, 62.

damages in, 62.
ASSUMPTION, of liability as consideration, 209.

by surety of principal's debt, 209.
ATROCIOUS frauds, under forms of law, 5 //.
ATTACHMENT, against property in name of third party, 57.

specific lien by, 81.

New York rule, 81, 81 n.

not usually sufficient to support creditors' bill, 81.

judgment in suit by, 77.

conveyance to defeat, void, 11.

injunction in aid of, 53, 73, 185.

not good against assignee, 77 //.

rights of creditors, 394a.

simple contract creditors may have, 73 n.
ATTACKING CREDITORS, status of, 73-88.

See Status of Attacking Creditors.
ATTACKING, different conveyances, 154.

title on ground of fraud, 158.

judgments, 286^.

consideration, 297^.
ATTORNEY, authorized to take supplementary proceedings, 61 //.

provision for fees of, 335.

renders assignment fraudulent, 335.

7 CO References} INDEX. [are to sections.

ATTORNEY — continued.

as fraudulent vendee, 62.

conspiring with debtor, 62.
AUTHORITY, to compromise debts, 336.

effect of, in assignment, 336.
AVAILABLE assets for creditors, 23-50, 50(7.

what interests may be reached, 23-45.

not exempt property, 46-50, 365.

what cannot be reached, 50a.
AVERMENTS of complaint, 140-157.

of delivery of deed, 140 ;/.

of answer, 158-167.

of fraud, 141.
AVERSION to exemptions not statutory, 360.
AVOIDING, denial in answer, 159.

must be overcome by competent proof, 159.

discovery, 165.
AWAKENING SUSPICION, is notice, 379.
BADGES OF FRAUD, 224-244.

(1.) Indicia or badges of fraud, 6, 224, 225.

what constitute, 224, 225.

suspicious circumstances, 225.

in Twyne's case, 22.

theory of the law, 224.

" a fact calculated to throw suspicion on the transaction,
225.

not conclusive evidence, 225.

strong and slight badges, 225.

burden of proof changed by, 225.

must be passed upon by jury, 226.
(2.) Recital of fictitious consideration, 228.

how considered, 228.

important badge of fraud, 228.

exaggerated indebtedness, 228.

misleading statement, 228.

excessive mortgage, 228.

must be intentional, not accidental, 228.
(3.) Antedating instrument, 229.

is an indicium of fraud, 229.

date not essential part of instrument, 229.
(4.) Vague description as badge of fraud, 230.

submitted to jury as a circumstance, 230.

how explained, 230.

References^ INDEX. [are to sections. 75'

BADGES OF FRAUD — continued.

(5.) Generality of the conveyance, 22, 231.
raises presumption of fraud, 231.
different views of the courts, 231.
regarded as unusual, 231.

was one of the badges in Twyne's case, 22, 231.
various illustrations, 231.
continued possession, 231^, 245-267.
(6.) Inadequacy of purchase price, 232.
effect of, as evidence, 232.
does not prove fraud, 232.
unless extremely gross, 6, 232.
only a circumstance, 232.
(7.) Transfer pending suit, 22, 157, 233.
how regarded, 233.
scanned with much suspicion, 233.
(8.) Secrecy, evidence of, 234, 272.

is fact from which fraud may be inferred, 234.
is not fraud by itself, 234 //.
secret trust, 234a:.
(9.) Suppression or concealment, 235, 236.

subsequent acts of fraud avoiding transfer, 235.
failure to record instrument, 234 n, 235.
excusing failure to record, 235, 235 ;/.
(10.) Concealment ifi fraud of bankrupt act, 237.

the test applied, 237.
(11.) Absolute conveyance by way of security, 238.

proving absolute conveyance a mortgage, 238.
valid if no fraud intended, 238.
effect of secret reservation, 238.
convenient cover for fraud, 238.
excess of property mortgaged, 2380.
(12.) Sales upon credit, 240, 332, 333.
not necessarily fraudulent, 240.
is a circumstance, 240.
when considered fraudulent, 240.
(13.) Unusual acts and transactions, 241.
many illustrations, 241.
partial explanations, 241.
neglect to offer explanations, 241.
non-attendance of defendant, 241 n.
unusual particularity, 241.
absence of memoranda, 241.

HC2 References^ INDEX. [are to sections.

BADGES OF FRAUD — unusual acts and transaction* — continued .

false receipt, 241.

exceptional and peculiar conduct, 241.

absence of means in the vendee, 241, 274.

painstaking legal formalities, 241.
(14.) Effect of relationship, 242.

calculated to awaken suspicion, 242.

transaction will be closely scrutinized, 242.

not necessarily evidence of fraud, 242.

when coupled with other badge, 242.

mother and son, 242.
(15.) Prima facie cases of fraud, 243,

comments, 244.
BAILEE, cannot set up fraudulent title, 107 n.
BANK BILLS., may be reached, 24.
BANKRUPT ACT, concealment in fraud of, 237.

purpose of, to defeat preference, 390 n.

assignee under, 114.
BANKRUPTCY, bond payable on, when void, 364 n.

assignee in, as complainant, 114.

discharges as a defense, 294.

and insolvency discharges, 294.

property reverts after, 114.

dower not barred by, 315.
BEGIN AND REPLY, right to, 271 n.
BENEFICIARIES, as defendants, 128.
BENEFITS, estoppel by accepting, 115.
BILL IN EQUITY, 68.

See Creditors' Bills — Complaint.

merits of relief by, discussed, 51, 60, 68.

forms of relief, 4, 51-72.

offer to repay purchase price, 192.
BILL OF PARTICULARS, discretionary, 162a, 341^.

actions, ex delicto, allowed by grace, 162^.

when granted or refused, 162^.
BISPHAM, definition of creditors' bills by, 68.
BLACK, J., views as to presumptions, 7.
BLATCHFORD, J., views of, 291.

as to ignorance of fraud, 291.

limitations in equity, 291.
BLINDNESS of assignee, badge of fraud, 338.
BONA FIDE purchasers, 21, 369-384.

See Notice.

References] INDEX. \are to sections. 7CJ

BONA FIDE— continued.

rights of, superior to creditors, 369.

theory of the law, 369.

payment of consideration constitutes substitution of prop
erty, 369.

statute 27 Eliz., 21.

plea of, 163.
(1.) Title of purchaser, how protected, 369.

three things must concur, 369.

must buy without notice, 369.

must be purchaser for value, 369.

burden of proof, 158.
(2.) Generality of the rule, 370.

when equities are equal the law prevails, 370.
(3 . ) Mortgagee as bona fide purchaser, 371.

rule in New York, 371.

pre-existing indebtedness as consideration, 371.
( 4 . ) Withou t notice, 372.

kinds of notice, 373.

constructive notice of fraud, 374-382.

rule in Stearns v. Gage, 375, 376.

Parker v. Connor, 378.

facts sufficient to excite inquiry, 378, 380, 381.

actual belief, 382.

purchaser with notice, 383, 384.
BONA, sed impossibilia non cogit lex, 83.
BOND OF GUARDIAN, surety on, 90 n.
BOOK ENTRIES, proof of against debtor,27i#.
BOOK ROYALTIES, may be recovered, 24, 37.

remedy to recover, 37.
BOOKS OF ACCOUNT, as evidence, 271^.
BOTH PARTIES, must be implicated in fraud, 183.
BRANDING CATTLE, sufficient delivery, 262
BRETT v. CARTER, rule embraced in, 353.
BROADWAY NATIONAL BANK v. ADAMS, 367.

the case criticised, 367.
BROTHER, conveyance by sister to, not fraudulent, 5.
BURDEN OF PROOF, 158, 208, 271.

conveyances by husband to wife, 301.

rests on party asserting affirmative of the issue, 271.

generally rests on creditor, 271.

shifting, by showing fraudulent intent, 271.

as to explanations, 271.
48

yCA References] INDEX. [are to sections.

BURDEN OF PROOF — continued.

as to consideration, 201.

to repel presumption, 225.

right to begin and reply, 271 n.

as to trust income, 45.

to secure parties, on plaintiff, 128.
BUSINESS, authorizing trustee to continue, 330.

continuance by insolvent, 143 n.
BUSINESS TRANSACTIONS, presumed to be honest, 5.

CALIFORNIA, fraudulent sale absolutely void, 16 ;/.

proceedings against debtor's estate, 112.

voluntary conveyance not presumptively fraudulent, 20c
CAMPBELL v. FOSTER, relied on in Nichols v. Eaton, 365.

discarded in Williams v. Thorn, 45, 365.

not the law of New York, 45, 365.
CANCELLING worthless debt, not a fraudulent alienation, 23.

debts, when fraudulent, 42.

by testator, not good against creditors, 42.
CAPITAL STOCK, a trust fund, 117, 119, 68 n.

See Corporation.
CARELESS EXPRESSIONS, not poof of fraud, 5.
CARELESSNESS, not proof of fraud, 5.
CASE, action on the, 62.

not appropriate against vendee, 62.

damages too remote, 62.
CASE v. BEAUREGARD, discussed, 83.
CATTLE roaming over plains, delivery of, 262.

requisites of the change of possession, 262.

branding cattle, sufficient delivery, 262.
CAUFFMAN v. VAN BUREN, explained, 81.

re-explained, 86 n.
CAUSE, of fraudulent transfers, 2.
CAUSES OF ACTION, misjoinder of, 135.

uniting, 55, 154.
CERTIFICATE of division, 407a.
CESTUI QUE TRUST, and trustee, 137.

need not have judgment, 127^.

decree, when binding on, 137.

suits in furtherance of, and opposition to trust, 137.

when to be joined, 137.

may trace insurance money, 44.
CHAIN of evidence, 224.

References^ INDEX. \are to sections. 755

CHANGE IN ASSIGNMENT, parties cannot make, 3x6
CHANGING SECURITIES, existing creditor, 89.
CHANGE OF POSSESSION, delivery, 245, 246-267.

concerning possession, 245.

defined, 245, 253, 257, 259.

feature of Twyne's case, 22, 245.

changes in the law, 245.

undue prominence of the subject, 245.

cases of bailments, 245.

excusing want of change of possession, 263.

on judicial sale, 265.

of growing crops, 266.

under general assignment, 316.

as regards chattel mortgage, 356^.
(1.) Possession as proof of fraud, 247.

prima facie evidence, 247, 248.

criticisms of the doctrine, 247.

statutory policy, 247.

New England cases, 249.

rule in New York and various other States, 250, 251.

repelling inference of fraud, 250.

rule in Federal tribunals, 250.

between husband and wife, 253.
(2.) Conclusive evidence, when, 251.

theory of the cases, 251.

results of the conflicting policies, 252.

the principle discussed, 252.
(3.) Actual change of possession required, 253.

change cannot be effected by words, 253.

must be by outward and visible signs, 253.

assumption of ownership by vendee, 253.

questions for the jury, 254.

overcoming the presumption, 255.
(4.) Requisites of the change, 253, 256, 257, 258, 259.

possession within a reasonable time, 256.

change must be continuous, 257.

separating stock, 253.

temporary resumption of possession, 258.

concurrent possession insufficient, 259.

possession of bailee, 260.

no delivery where purchaser has possession, 261.

overcoming presumption, 255.

7t6 References} INDEX. [are to sections.

CHANGE OF POSSESSION — continued.

(5.) When technical delivery is not essential, 262.

cattle roaming over plains, 262.

delivery of logs, 262.

vessel at sea, 262.

squared timber, 262.
(6.) Change of possession of realty, 264.

rules as to, stated, 264.
CHANGE OF VENUE, territorial jurisdiction, 157a.
CHARACTERISTICS of fraudulent conveyances, 15.

made to avoid a debt or duty, 15.

mutual fraud and injury, 15.
CHARITY, gifts to, '2170.
CHATTEL MORTGAGES, questions affecting, 347.

rights of purchaser of, 168.

when fraudulent, 347-359.

can be used only as security, 347.

fraud in vitiates, 357 //.

of perishable property, 359.

higher security than land mortgage, 347.

in excess of debt, 347.

overstatement of debt, 347.

altering mortgage, 347.

creditor at large cannot assail, 347.
(1.) Questions affecting, regulated by statute, 347.

effect of record of, 347.

repels presumption of fraud, 347.
(2.) Mortgage with power of sale, 267, 348-355.

rule in Robinson v. Elliott, 348-351, 354.

the case stated, 348.

similar cases, 349.

proof extrinsic to the instrument, 350.

comments in the cases, 351.
(3.) Rule opposed to Robinson v. Elliott, 352.

Brett v. Carter, and similar cases, 353.

recent opinion of Supreme Court, 353.

discussion of the principle involved, 354.
(4.) Sales for mortgagee' s benefit, 355.

considered legal, 355.

New York cases, 355.

mortgagor acts as agent, 355.
(5.) Sales upon credit, 240, 332, 7,2,2,, 356-

not tolerated, 356.

References] INDEX. [are to sections. J CJ

CHATTEL MORTGAGES— sales upon credit— continued.

tend to hinder and delay creditors, 356.
(6.) Possession, independent valid transaction, 357.

void mortgage cannot be transmuted into valid pledge, 357.

pledge, independent of fraudulent mortgage, sustained, 357.
(7.) Right of revocation: reservations, 358.

when inconsistent with transfer may be avoided, 358.
(8.) Rule as to consumable property, 359.

mortgage upon, fraudulent, 359.

when valid, 359.

intent in such cases, 359.
(9.) Generally, 356a, 356/;.

secret trust, 356^.

change of possession, 356^.

distinct claims, 3590.
CHOSES IN ACTION, covinous transfers of, voidable, 17, 22, 35.

conflict in the cases, 33.

true rule applicable to, ^7,.

what included in, 7,7, u.
CIRCUMSTANCES, proof of fraud from, 5, 13, 224, 225, 227, 281.

evidence of, 281.

must be persuasive, 5, 6.

intent inferred from, 8, 206.

great latitude in admission of evidence of, 281.

suspicious, as proof of fraud, 225.

evidence of, wide range given, 281.

proof of fraud from, must be strong, 281.

test as to admission of, 281.

direct proof of fraud not attainable, 13.
CIRCUMSTANTIAL and direct evidence, 5, 5 //, 6, 227.
CLAIMS, for pure torts not assignable, 34, 316a.

injury to property may be reached, 34.

joinder of, 54, 55.

prior and subsequent to alienation, 105.
CLASSES of fraudulent conveyances, 15.

three elements must concur, 15.

of creditors, existing and subsequent, 89.

of creditors' suits, 68, 68 //.
CLASSIFIED demand, sustains bill, 76.
CO-CONSPIRATORS, declarations of, 280.

when admissible, 280.

must relate to transaction under investigation, 280.

purpose ofvthe rule, 280.

7C8 References] INDEX. I are to sections.

COLLATERAL ATTACK of transfers, rule as to, 69.

exceptional practice in Louisiana, 69.
COLLATERAL, relief to main action, 63.

facts as evidence of fraud, 281, 282.

attack on judgment, 270.
COLLATERALS, not considered in proving claim, 51 n.
COMBINATIONS, in equity, allowed, 108 n.
COMITY, between States, 64, 346.

the principle applied, 64, 346.

yields in favor of residents, 64, 46.

recognition of receivers by, 118.
COMMON FUND, when liable for expenses, 109.
COMMON LAW, suspension of alienation void at, 362.

statute of Elizabeth declaratory of, 16.

enjoins integrity, 16.

rule as to presumption of its existence, 64 //.

rule as to competency of party, 269.

maxims of, 20 n.

fraudulent conveyances at, 16.

affirmative statute does not repeal, 16.

how far statute abrogates, 20 n.
COMPETENCY, of party as witness, 269.

defendant may be compelled to testify, 269.

rule of the common law, 269.

of wife as witness, 313.
COMPLAINANTS, who may be, 107-127, 127*7, 89-106.
(1.) Who may assail fraudulent conveyances, 73, 107.

status of complainants, 73-88, 107.

conveyances voidable only as to creditors, 107, 395-404.

question of parties difficult, 107.

interested parties in esse must be joined, 107.

sequestrator as, 116.
(2.) 'Joinder of complainants, 108, 108 //.

creditors by several judgments, 108.

judgment-creditors cannot unite at law, 108//.

creditors by judgment and decree, 108.

theory as to joinder, 108.

motion to intervene discretionary, 108 n.

laches in application, 109.

combinations allowed, 108, 108 //.

hostile claimants cannot join, 108.
(3.) Suing for others, 109, no.

rules regulating, 109.

References ] INDEX. [are to sections. 7 Cg

COMPLAINANTS — suing for others — continued.

" and others " interpreted, no.

equity of a creditor, no.

in aid of assignment, 109.

stockholders suing for corporation, 109.

wife as creditor, no n.
(4.) Surety, subrogation of, 111.

entitled to stand in place of principal, in.
(5 . ) Executors and administrators, 112, 113.

ordinarily bound by decedent's act, 112, 398.

statutory changes, 112.

rule in New York, 112.

may now impeach fraudulent transfers, 112, 113.

importance of the change, 113.

liability of representative, 113, 113//.
(6.) Assignees, 114, 115.

assignee in bankruptcy, 114.

title of, 114.

title of general assignee, 115.

when creditor may sue, 115.
(7.) Receivers, 116.

rights of, as complainants, 116.

disaffirm fraudulent dealings, 116.

of corporations, 117.

who represented by, 117.

foreign receivers, 118.

rule of comity, 118.

creditors of corporations, 119.
(8.) Rights of various complainants, 120-127.

sheriff, 81, 120.

heirs, 121.

legatee, 121//.

when heirs cannot sue ,121.

husband and wife, 122, 298-315.

widow, when not proper complainant, 121.

tort creditor, 123.

conveyance to avoid fine, 123//.

overseer of the poor, 124.

creditors having liens, 125.

purchasers removing incumbrances, 126.

cestui que trust, 127 a.

creditors opposing will, 127.

wife, when creditor, 122.

76o References'] INDEX. \jire to sections.

COMPLAINT, requisites of, 140-157^.
(1.) Recitals of the complaint, 140.

complainants must be creditors, 140.

indebtedness must be shown, 140.

alternative relief, 153.

in double aspect, 155.

remedy at law exhausted, 140.

alleging insolvency, 143.

concerning consideration, 144.

general averments, 140, 140 «, 141.
(2.) Pleading fraud, 141, 141 //.

fraud defined, 13, 141.

alleging fraud, 141, \^\n.

word " fraud " need not be used, 141.

material facts must be alleged, 141.

charging knowledge, 141.

fraud in subsequent creditors, 141.

complaint by executor, 143.
(3.) Evidence not to be pleaded, 142.

general certainty sufficient, 142.

circumstances not to be minutely charged, 142.

circumstances applied in law, 142.
(4.) Pleading in equity, 60, 146.

more liberal than at law, 146.

seeking discovery, 147.

excusing laches, 148.

New York rule, 149.

explaining delay; discovery of fraud, 149, 149 //.

allegations concerning consideration, 144.

concerning intent, 145.
(5.) Multifariousness, 150, 151, 152.

complaints bad for, 150.

pleadings held not to be, 151, 152.
(6.) Details of complaint, 155-157.

prayer and verification, 155.

amendment of, 156.

description in, 157.

variance, 155.

seeking discovery, 147.

attacking different conveyances, 154.

lis pendens, 157.
COMPOSITION WITH CREDITORS, must be fair, 393.

illegal preference, 393a.

References^ INDEX. far* to sections. ~C)\

COPMROMISE, power in assignee to, 336.

how construed, 336.

with creditors, must be honest, 393.

effect of secret preferential agreement, 393.

when a fraud upon other creditors, 393.

antecedent agreement to prefer, 394.
CONCEALMENT OF FRAUD, 148, 234, 235.

pleading concerning, 148.

in fraud of bankrupt act, 237.
CONCLUSIVENESS of judgments, 74, 168, 270.

of transfers between parties, 395-401.
CONCURRENT remedies, legal and equitable, 51, 60.

cumulative remedies, 65.

possession insufficient, 259.
CONDITIONS treated as void, 361.

repugnant, are void, 362.

what are, 363 //.
CONDONATION of fraud, perfects title, 370.
CONDUCT that is fraudulent, 13.
CONFESSIONS, of different judgments, 54.

may be attacked in one suit, 54.

set aside in equity, 60.

collusive confessions avoided, 74 //, 174.

by administrator, 74 u.

sufficient to uphold creditors' bill, 76.

transfer by confessed judgment, 174.

ratification of, by creditor, 174.
CONFORMING testimony to pleadings, 285.
CONFUSION, of goods, does not destroy equity, 44, 44 //.
CONNECTICUT, change of possession, 251.

spendthrift trusts in, 367c?.
CONSIDERATION, inadequacy of as evidence of fraud, 6.

disparity must be great, 6, 232.

allegations of complaint concerning, 144.

general subject, 207-223.

need not be in money, 207, 209.

promise to pay, 209.

pre-existing debt, 2.

assumption of liability, 209.

assumption by surety, 209.

paid by debtor for third party, 57, 57 //.

burden of proof, 208.

rule in New York, 208.

762 References] INDEX. [are to sections.

CONSIDERATION —continued.
in California, 208.

insignificant, 209.
(1.) Concerning consideration and good faith, 207-223.

defined, 207, 209.

moral obligations, 215.

individual and firm debts, 216.

when important as affecting alienations, 207.

what is valuable consideration, 209.

services by member of family, 218.

husband and wife, 210, 218.

sufficient consideration, 222.

insufficient consideration, 223.

exchange of property, 211a.

future services, 223.

alleging, 144.
(2.) Voluntary conveyance, 208.

implies total want of substantial consideration, 208.
(3.) Good and valuable consideration, 210/1.

Judge Story's views, 210 n.
(4.) Marriage as consideration, 212, 306.

the cases reviewed, 212.

when part of fraudulent scheme, 306.

no other consideration so highly respected, 212.
(5.) Illegal consideration, 214.

illicit intercourse, 213.
( 6 . ) Proofs of consideration, 219.

future advances, 217.

gifts to charity, 217^.

means of vendee, 219.

recitals as evidence, 220.

explaining recitals, 221.

attacking, 297^.

may be varied by parol, 221.
CONSPIRACY, remedy by action of, 62.

damages in action for, 62.

when not cause of action, 62 n.
CONSPIRATORS, declarations of, 280.

why admitted, 280.

statement of one witness, 280.
< '< INSTRUCTION, of instrument, intent gathered from, 10, 322.

rules of, same in equity as at law, 51.

of assignments, 20 n, 343, 316a.

References] INDEX. [are to sections. 763

CONSTRUCTION — continued.

assignments construed -like other contracts, 20 //.

of bill, 54, 146.

statutes as to frauds, liberal, 19, 20.

rule in Twyne's case, 20, 22.

principle applying to construction, 20.

innocent, to be preferred, 20 //.
CONSTRUCTIVE FRAUD, does not justify arrest, 191.

reimbursement allowed in cases of, 192.

defined by Story, 323.

is a conclusion of law, 163.
CONSTRUCTIVE NOTICE OF FRAUD, 374, 382.

not applicable to creditor, 106.
See Notice.
CONTEMPLATION, of future indebtedness, 96, 97, 100, 202.

subsequent creditors must show, 96, 202.

of marriage, fraud in, 314.
CONTEMPORANEOUS TRANSACTIONS, evidence of, 276.
CONTEMPT, depends upon act done, 196 n.
CONTINGENT CREDITORS, entitled to protection, 90, 346/'.
CONTINGENT REVERSIONARY INTEREST, recoverable, 29.

remainder not liable to execution, 29 n.
CONTINUED, indebtedness, 103.

possession as evidence of hidden interest, 231a, 245-267.
CONTINUOUS, change of possession must be, 257.
CONTRACT CREDITORS, rights of, 73, 73 n.
CONTRACTS, how interpreted, 268.
CONTRAVENING STATUTES, assignments, 324.
CONTRIVANCE, to cover up fraud, 149.

evidence of, 235.
CONTROVERSY, all parties interested should be joined, 128.
CONVERSION, claim passes to assignee, 316a.
CONVEYANCE, hindering creditors by its terms, voidable, 9.

fraudulent at common law, 16.

of whole estate, presumption of fraud, 22, 231.

valid between parties, 395-399.

the theory, 396.

fraudulent, defined, 15.

meaning of word, 14 n.

of choses in action, fraudulent, 17, 33.

avoided by subsequent creditors, 101.

to defeat attachment, void, 11.

avoided in ejectment, 69, 69 n.

70A References^ INDEX. [are to sections.

COPARTNERS, and fraudulent alienees as defendants, 54.

may sue copartner and fraudulent alienee, 54.

special, cannnot be preferred, 329.

arrest of, 191.

debts of, 216.

preferring claims, 329.

rights of, limited, 329.

assignment by, 319/;.

corporators, when liable as, 139.

limited partnership assets, trust fund, 329.

power to assign, 319^.

various forms of partnership, 319/'.
CORPORATION, creditors of, may file bill, 33, 119.

may be joined in bill as defendant, 128.

receiver of, rights to bring suit, 117.

and individuals on same footing, 119.

no damages for procuring judgment against, 62 ;/.

organized for fraudulent design, 15.

assets a trust fund, 117, 119, 139.

like natural person, 117.

continuing business when insolvent, 143 n.

stockholders, suing in right of, 109.

stockholders of, suit against, 139.

when corporators liable as partners, 139.

unpaid subscriptions of, 117.

change of name to evade liability, 119.

rules relating to subsequent creditors, applied to, 100.

when insolvency not ground for receiver, 239 n.

no discharge granted to in bankruptcy, 294 n.

rules as to fraudulent conveyances apply to, 199 n.

assignments by, 346a.
COSTS, judgment for, rights of creditors, 90 n.
COUNSEL FEES, providing for in assignment, 335.
COUNTY, creditor's bill against, 139 n.

jurisdiction outside of, 406.

execution issued to, 68.
COUPONS, suit for judgment on and mandamus united, 85 ;/.
COVINOUS alienations of exemptions, 48.
COVINOUS TRANSFERS, 16-17.

of choses in action, 17, 33.

valid between the parties, 395-400.
CREDIT, sales upon, 11, 240, 332, 333.

sale on, to son, 11.

References j INDEX. [are to sections. 7^S

CREDIT — continued.

effect of, 332, m.
CREDITORS, ancient, power of, 1, 1 n.

rights of in life insurance, 23, 23a.

rights to proceeds of power, 39.

lien on trust income, 45.

must prove trust income excessive, 45.

burden of proof, 158, 271.

when judgment unnecessary, 83.

must have clean hands, 91.

suing in place of assignee, 115.

status of. See Status of Attacking Creditors.

of attacking creditors, 73-88.

who are not, 91.

when estopped, 91.

no right of, to oppose probate of will, 127.

when they may sue stockholders, 119.

when wife is creditor, no //, 122.

policy of the law to protect assets available to, 23-50.

existing and subsequent, 89-106.

must invoke process against debtor, 52.

recitals not binding on, 221.

See Existing Creditors; Subsequent Creditors.
CREDITORS' ACTIONS, purpose of, 4.

bill to reach surplus income, 360.

of corporations, relief to, 119.

who may be complainants, 107-127.
CREDITORS AT LARGE, rights of, 52, 73.

cannot assail debtors' transfers, 73.

cannot assail chattel mortgage, 347.

not entitled to injunction, 52, 73.

rights of, not favored in equity, 73.

of a decedent, 79.
CREDITORS' BILLS, 68.

See Creditors' Remedies; Supplementary Proceedings.

why preferable, 60.

merits of relief in equity discussed, 60.

object of, in New York, 68.

to reach equitable assets, 68.

execution must precede, 68.

when execution excused, 75.

filing of, creates lien, 61, 68, 392.

fraudulent conveyances annulled by, 68.

766 References] INDEX. \ are to sections.

CREDITORS' BILLS — continued.

usually regulated by statute, 68.

distinguished from bill in equity, 68.

is in nature of a discovery, 68.

supplementary proceedings, substitute for, 6i.

simple creditor cannot maintain, 71, 73.

two kinds of, 68, 68 //.

complainants in, 107-127.

defendants in, 128-139.

of fraudulent grantee, 387.
CREDITORS' PROCEEDINGS, assignment cases, 316^
CREDITORS' REMEDIES, 51-72.

See Remedies of Creditors.

legal and equitable, 51, 51 n.

injunction against debtor before judgment disallowed, 52.

exceptions to the rule, 53.

joinder of claims, 54, 55.

land in name of third party, 57.

relief before and after sale, 58.

at law and in equity, 59, 60.

aiding attachment, 53.

supplementary proceedings, 61, 61 ;/.

assumpsit, case, conspiracy, 62, 62 n.

reference not ordered, 62^.

relief collateral to main action, 63.

framing issues, 51 n.

action against rescuers, 62 n.

remedy governed by lex fori, 64.

cumulative remedies, 65.

various illustrations, 65.

imprisonment of debtor, 66.

election of remedies, 67.

creditors' bills, 68.

equity jurisdiction in personam, 60.

direct and collateral attack, 69.

in federal courts, 71.

recapitulation of, 72.
CRIME, fraud in light of, not considered, 3.

indictment changing fraud, 65 n.
CRIMINATING disclosure, party need not make, 165.
CROPS, rule as to, 27.

liable to creditors' remedies, 27.

on exempt land, 27.

References^ INDEX. [art to sections. J< >J

CROPS — continued.

delivery of, 266.
CROSS-BILL, affirmative relief, 166.

homestead protected by, 166.
CROSS-EXAMINATION OF PARTY, 281.

great latitude allowed, 281.
CROSS-PETITION, relief by, 166.
CUMULATIVE REMEDIES, allowed and disallowed, 65.

civil and criminal jurisdiction, 65.

election of remedies, 67.
CURTESY, right of, available to creditors, 30.

reached by creditors' bill, 30.

initiate, cannot be reached, 50(7.

DAMAGES, judgment for, not allowed in equity, 51.

decree must be for an accounting, 51.

too remote in action of case, 62.

exceptional cases, 62.

in action for conspiracy, allowed, 62.

in assumpsit, 62.
DATE OF AGREEMENT, governs creditors' rights, 90.

antedating instrument, 229.
DAUGHTER, claim for services, 218.

no promise to pay implied, 218.
DE MINIMUS NON CURAT LEX, 281.
DEATH, of receiver, title on, 189.

punishment of insolvent under Roman law, 1.

rule as to in England, 1 n.

of debtor, effect on lien in supplementary proceedings, 61 //.
DEBT, worthless, cancellation of, not fraudulent, 23.

foundation of the principle, 23.

forgiven or cancelled, when fraudulent, 42.

administrator may sue for, 42.

must be in judgment before filing bill, 73.

equity not forum to collect, 73.

property of debtor must be devoted to payment of, 14.

judgment conclusive as to, 74, 270.

must be adjudicated, 74, 74 n.
DEBTOR, reservation by, avoids conveyance, 10, 32, 272.

declarations by, 277, 278.

as defendant in creditors' suit, 128, 129.

absconding and non-resident, 84.

rule as to, 128.

768 References} INDEX. [are to sections.

DEBTOR — continued.

insolvency of, 273.

embarrassed, conveyance by, 99.

injunction against, before judgment, disallowed, 52.

theory of the law, 52.

exceptions to the rule, 53.

trust income for, 45, 360, 364.

may assign accrued income, 45 n.

payments made to, 50^.

effect of imprisonment of, 66.

secret trust for benefit of, 272.

punishment of, in early times. 1 n.

cannot secure delay, 11.

sale to son, 1 1.
DECEDENT, creditors of, 79.

when must have judgment, 79.

confusion in the cases, 79.

theory of the law, 79.

judgment necessary in New York, 79.

personal transactions with, 121.
DECEIT, action for, innocence presumed, 5.
DECEPTIVE ASSERTIONS, and incidents, proving fraud. 7.
DECLARATIONS before and after sale, 277.

as to realty and personalty, 277.

declarations after sale, 278.

in presence of vendee, 278.

of co-conspirators, 280.

must relate to act characterized, 276.

of past transactions, 276.

as to acts sui 'generis with those committed, 280.

not received to prove the conspiracy, 280.

admitted to show its scope and extent, 280.

of one witness as to the conspiracy, 280.

the test, 276.
DECLARATORY, of common law, statutes are, 16.
" DECLARE," word commented upon, 16.
DECREE, 168-1830.

See Judgment.

when conclusive, 168.

appointing receiver, 170.

transferring title, 172.

against fraudulent vendee, 177.

against wife, 180.

References^ INDEX. [are to sections. 7&Q

DECREE — continued.

affecting foreign land, 157*7.

must accord with relief demanded, 181.

conform to complaint, 182.

personal against vendee, 177, 178.
DEDUCTION OF FRAUD from facts and incidents, 224, 281, 282.
DEED, fraudulent, mistake in not corrected, 396 .

evidence sufficient to overturn, 6.

fraud shown by separate instrument, 6.

not avoided by loose evidence, 6.

delivery of should be averred, 140.

recitals in, 2840.
DEFECTIVE, complaint, 140.
DEFENDANT, parties, 128-139.

(1.) Debtor as defendant in creditors' actions, 128, 129, 132.

general rule stated, 128.

finality to litigation the object, 128.

conflict in the cases, 128, 129.

when debtor not necessary defendant, 129.

result of the cases, 129.

defendants need not be equally guilty, 130.

plaintiffs' duty to secure parties, 128.
(2.) Fraudulent grantee must be joined, 131.

the reason, 131.

New York cases, 131.

parties to intermediate conveyances, 131.
(3.) Assignee and receiver, 133.

assignee of a firm a defendant, 133.

raising objection to non-joinder, 133, 134.
(4.) Executors, administrators, heirs, and legatees, 136.

rule as to joinder of, as defendants, 136.

Cornell v. Radway, 136 n.

result of the cases, 136.
(5.) Trustee and cestui que trust, 137.

distinction in the cases, 137.

affirmance and disaffirmance of the trust, 137.
(6.) Generally, 132, 136, 138, 139.

stockholders, 139.

corporation as party with stockholders, 128.

beneficiaries as defendants, 128.

conveyance pending suit, 132a.

bringing in representatives, 132^.

suing directors, 132a.
49

770 References} INDEX. [are to sections.

f ) K 1'' K \ I > A N T — generally — continued.

cestui que trust, 137.

parties having liens, 138.

arrest of, 191.
DEFENSES, as to, 286-297.
See Evidence — Intention — Consideration — Badges of Fraud.

" forms " no protection, 286.

transaction judged by real character, 286.

principal defenses, 286, 369-371.

rebutting fraud, 158.

of discharge in bankruptcy, 294 ;/.

imprisonment of debtor, 66.

against attachment, 81.

another action pending, 286a.

attacking judgment, 286^.

set off, 297a.

attacking consideration, 297^.

controversies not separable, 297*-.

statute of frauds, 293*7.
(1.) Laches as a defense, 287.

excusing apparent, 148, 149.

equity will not aid party guilty of, 287.

stale demands disallowed, 287, 289.
(2.) Lapse of time, 109, 288, 289.

constitutes a defense, 288.

various illustrations, 288, 289.
(3.) Discovery of the fraud, 290.

statute does not begin to run until, 290.

effect of a different rule, 290.

Judge Blatchford's views, 291.
(4.) Statute of limitations, 292, 293.

runs from notice of fraud, 292.

must be pleaded as defense, 292.

limitations in equity, 293.
(5.) Insolvency or bankruptcy discharges, 294.

have no extra-territorial force, 294.

not conclusive on non-residents, 294.

the reasons stated, 294.

pleading discharge, 294 ;/.
(6.) Generally, 295.

existing and subsequent creditors, 96-101, 295.

fraud upon subsequent creditors, 100, 295.

what sheriff must show against stranger, 297.

References] INDEX. \ arc to sections. 77 I

DEFENSES —generally — continued.

by bailee, 107 //.
DEFINITION of fraud, none possible, 13.

judgment of law on facts and intents, 13.

undue influence, 13 //.

of insolvency, 273.

of badge of fraud, 225.

of general assignment, 316.

of fraudulent conveyances, 15.

of creditors' bill, 68.
DEFRAUDED VENDOR, tracing fund, 44.

relief to, 399.
DEGREES of guilt, 399, 400.
DELAWARE, spendthrift trusts, 367a.

change of possession, 251.
DELAY, sales upon credit, 240, 332, ^t,t,.

exceptional rule, 2>Z2>a-

and hindrance, 11, 318.

applied to general assignments, 318, 2,2>Z-

defraud, and hinder, n.

refers to time, 318.

hindrance to obstacles, 318.

debtor cannot secure, 318.
DELAY OF CREDITORS, 11, 318.

and hinder, 11.

explaining, in pleading, 149.

refers to time, 318.

hindrance to obstacles, 318.

debtor cannot secure, 11.
DELIVERY, 245-267.

See Change of Possession.

essential to validity of sale as against creditors, 245-267.

failure to effect, presumption of fraud, 248.

conflicting policies as to, 252.

must be actual, 253.

must be continuous, 257, 258.

of growing crops, 266.

of possession of realty, 264.

when not essential, 261, 262.

symbolical, 262.

of deed should be averred, 140 //.

assignment takes effect from, 316a.
DENIAL IN ANSWER, 158-162.

772 References^ INDEX. [are to sections.

DENIAL IN A N S \Y E R — continued.

particularity of, 162.

of fraud or notice,, 163.
DENYING FRAUD or notice, 163.
DESCRIPTION in complaint, 157.

assets need not be specifically disclosed, 157.

sufficient to operate as lis pendens, 157.

discovery may be called for, 157.

in marriage settlement, 157 n.

vague, as badge of fraud, 230.

amendment of complaint, 156.
DEVICES, ineffectual" against creditors, 15.
DEVISE OF PROFITS is devise of land, 362.
DIRECTORS, suits against, 1330.

rule of liability, i33<?.
DIRECT AND COLLATERAL ATTACK, 69.

necessity for, 69.

exceptional doctrine in Louisiana, 69.

merits of rule, discussed, 69.
DISBURSEMENTS, of assignee, 319a.
DISCHARGE, in insolvency or bankruptcy, 294.
DISCOVERY, seeking, 147.

of fraud, statute begins to run, 290, 291.

New York rule, 149.

creditors' bill is in nature of, 68, 68 n.

advantages of, 68 ;/.

pleading to the discovery and the relief, 161.

avoiding discovery, 159, 165.

of lands, inherited or devised, 157.

and knowledge, not convertible, 148 n.
DISCRETION, granting bill of particulars rests in, 162*7.

removal of receiver is matter of, 190.
DISHONEST PURPOSE not presumed, 5.

not necessary to defeat conveyance, 8, 9, 10, 382.

secret removal of property, 234.
DISJUNCTIVE, words hinder, delay or defraud used in, 11.
DISMISSAL of receiver, 190.

of assignee, 337.
DISPARITY, as to consideration, 6, 232.

must be glaring, 6, 232.
DISPOSED, word construed, 12.
DISSOLUTE man, conveyance by, 213 //.
DISSOLUTION, appointment of receiver does not effect, 134.

References] INDEX. \are to sections. JJ^

DISSOLUTION —continued.

of firm, exemptions, 48.
DISTINCT, claims united, 54.

defenses, 158.

claims under chattel mortgage, 359^.
DISTINCTION, existing and subsequent creditors, 89.

fraud in fact and fraud in law, 9, 10, 322, 382.
DISTRIBUTEES, reaching money of, 33.
DISTRICT OF COLUMBIA, statute of Elizabeth in, 19 //.

change of possession, 250.
DIVIDEND, to defeated creditor, 345/'.

collaterals not considered, 51 n.
DIVISION, certificate of, review, 407^.
DIVORCE, after, when wife cannot overturn conveyance, 395 //.

conveyance to defeat alimony, no //.

right of wife against trust income, 45.
DOMICIL, law of, governs, 64.

when law of, yields, 65.
DOWER RIGHT, creditors may reach, 30.

before admeasurement, 33.

in supplementary proceedings, 61.

relief in cases of fraud on, 70.

relinquishment as consideration for settlement, 299.
DURESS, obtaining instrument under, 347.
DUTIES, of assignee, 319^.

EARLY STATUTES avoiding fraudulent conveyances, 18.

declaratory of common law, 16.

object of statutes, 18.

13 Eliz.,c. 5, and its object, 19.

its interpretation and construction, 20.

27 Eliz., c. 4, and its object, 21.
EARNINGS, not liable in supplementary proceedings, 61 n.

exempt for sixty days, 61 n.

of daughter, 218.

of wife, 218.

of members of family, ,218.
EDUCATION of debtor, as regards income, 45-
EJECTMENT and equitable relief united, 51, 51 n, 54-

conflict in the cases, 54.

no receiver in, 187.

theory of the law, 187.

rule as to receiver in New York, 187.

774 References^ INDEX. [are to sections.

EJECTMENT — continued.

conveyance avoided in, 51.

by execution purchaser, 57.

when purchaser may defend in, 69.

what may be shown, 69 n.

question of fraud tested by jury in, 123.
ELDON, LORD, views of, as to restrictions on life estate, 364.
ELECTION OF REMEDIES, 67, 316 n.

debtor or alienee cannot compel, 67.

creditor bound by, 67.
ELIZABETH, statutes of, 19-21.

object of, 11, 19.

to prevent deeds fraudulent in their concoction, 19.

interpretation and construction of, 20.

interpretation refers to legal intent, 8.

bottomed on immoral intention, 9 //.

merely declaratory of common law, 16.

universally adopted, 19, 22.

Mr. Reeves' comments upon, 19.

preamble to, 25.

subsequent creditors not mentioned, 98.
EMBARRASSED DEBTOR, conveyance by, 99, 273.

conveyance to defeat attachment, n.

when considered valid, 99.

the cases criticised, 99.

the conclusion drawn from them, 99.
EMOTION, intent is, 8, 196, 196 n.

not conclusive, 197, 322, 382.

fraud without evil emotion, 8, 382.
EMPLOYMENT, of husband by wife, 303.

of assignors, 345, 390 n.
ENFORCING promises of third parties, 43.

judgment at law, 170a.
ENGLAND, Twyne's case in, 22.

statute of Elizabeth, 19, 21.

statute of Victoria, 93.
ENGLISH STATUTES as to property recoverable, 25.

concerning fraudulent conveyances, 16, 18, 19-22.
ENTIRETY, estate in, husband's interest liable, 29.
EQUALLY GUILTY, defendants need not be, 130.
EQUILIBRIUM, of evidence, does not prove fraud, 5
EQUITABLE fraud, meaning of, 51.

subrogation, when not applied, 195 n.

References^ INDEX. | a re to sections. JJC

EQUITABLE — continued.

estoppel, 287.
EQUITABLE INTERESTS, 30.

frequent subject-matter of creditors' suits, 30.

action, judgment in, 80.

suit, 60.

jurisdiction, 4, 51, 56, 60.

levy, 68, 392-

in real property, situs governs, 24.
EQUITABLE, lis pendens, 392.
EQUITIES are equal, law prevails, 370.

applied to bona fide purchasers, 370.
EQUITY, invoked in two cases, 51.

See Creditors' Remedies.

in furtherance of remedy at law, 51.

to reach equitable rights, 51, 60.

jurisdiction more extensive than at law, 51, 51 n.

reasons for resort to, 51, 60, 176 n.

purchase at law either valid or void, 51.

different rule in equity, 51.

when jurisdiction exclusive, 56.

relief before and after sale, 58.

the jurisdiction explained, 58, 60.

jurisdiction, its great importance, 60.

proceeds without regard to forms, 60, 60 n.

jurisdiction once acquired holds throughout, 63.

jurisdiction of trusts, 56.

will restrain fictitious demand, 74 n.

objection to jurisdiction, 88, 88 n.

power of, to protect right of dower, 70.

not remedy to collect debts, 73.

of a creditor, 1 10.

pleadings in, rules of, 146.

limitations in, 293.

procedure in federal courts, 71.

cannot create a title, 60 //.
EQUITY OF REDEMPTION, available to creditors, 31.

transaction to conceal, 31.
ERRONEOUS, judgment, correction of, 172.
ESTATES, in remainder and reversion, 29, 30.

vested remainder liable for debts, 29.

attempted exemption of, 29, 360-368.

contingent reversionary interest, 29.

776 References^ INDEX. \art to sections.

ESTATES — continued.

creditors' bills against, 68.

no preference to vigilant creditors, 392.

expectant, may be reached, 24.
ESTOPPEL, equitable, 287.

to attack, 316 //.

notice of alienation, 106.

judgment is, 168.
EVIDENCE, 268-285.
See Badges of Fraud — Consideration — Defenses — Inten-
tion.

to prove fraud, 5, 6.

of solvency, 95.

creating equilibrium insufficient, 5.

to annual instrument in writing, 6.

not to be pleaded, 142.

to vary recital of consideration, 221.

recitals in deed, 284a.
(1.) Concerning evidence, 268.

burden of proof, 268, 271.

how changed, 271.

answer as, 160.

personal transactions with decedent, 121.

omnia prozsumunter contra spoliator em, 281.

books of account, 27 1</.

professions of good faith, 279a.

intention, knowledge, 279^.

takes a wide range, 268.

secret trust, 272.

interpretation of contracts, 268.

acts and statements of debtor, 268.

objections must be specified, 269.

schedules as evidence, 274.
(2.) Proof and conclusiveness of judgment, 270.

judgment essential to creditor's proceeding, 74-77, 270

evidence until impeached, 270.

attacking for collusion, 270, 74 n.
(3.) Insolvency of debtor, 273.

application of the term, 273

who considered solvent, 273.

evidence of insolvency, 87, 87 n, 273.

illustrations, 273.

general repute as to, 273.

References^ INDEX. [a re to sections. JJJ

EVIDENCE — insolvency of debtor — continued.

opinion as to, 273, 273 n.
(4.) Insolvency of vendee, 274.

effect of proof of, 274.

shown by general repute, 274.

insolvency of corporation, 273, 273 n.
(5 . ) General reputation, 275.

evidence of, admitted, 275.

tendency and effect of proof of, 275.
( 6 . ) Concerning res gestoz, 276.

declarations admissible, 276.

duty of jury to weigh, 276.

importance of the doctrine, 276.
(7.) Declarations, rule as to, 277, 278.

before sale, admissible, 277.

theory governing their admission, 277.

concerning personality, excluded, 277.

declarations after sale, 277.

excluded as mere hearsay, 278.

illustrations, 278.
(8.) Possession after conveyance, 279.

effect of proof of, 279.

declarations characterizing, 279.

constitute part of res gestce, 279.
(9.) Declarations of co-conspirators, 280.

in execution of common purpose, 280.

proposed acts must be sui juris with those committed, 280.

foundation for, 280.

prima facie case must be shown, 280.

admissions of declarations, 280.

as to past transactions, incompetent, 280.

not admissible to prove the conspiracy, 280.

received to show its scope, 280.
(10.) Proof of circumstances, 281. *

must be persuasive, 5, 6.

great latitude permitted, 281.
, objections for irrelevancy, not favored, 281.

wide range of inquiry, 281.

must be strong and cogent, 281.

the test given, 281.

latitude of the inquiry, 281 n.

collateral facts, proof of, 281.
(11.) Other frauds, 282.

778 References'] INDEX. [_are to sections.

E V I D E N C E — other frauds — continued.

proof of commission of, 282.

intent the object of inquiry, 282.

other similar acts show it, 282.

independent acts and declarations, 282.

scope of the inquiry, 282.

exception to the rule, 282.
(12.) Suspicions insufficient, 3, 5, 6, 283.

tangible facts must be shown, 283.

of fraud, not notice of it, 283.
(13.) Generally, 284, 285.

proving value by experts, 284.

testimony must conform to pleading, 285.

consideration, 279^, 207-223.
EVIDENCE OF FRAUD, generally circumstantial, 13.

proof of circumstances as, 281.

great latitude allowed, 281.

direct proof not attainable, 13.

the test, 281.

proof of collateral facts, 281.

other frauds, 282.

declarations, 280.
EVIDENCE OF INTENTION, when cannot change presumption,

9, 322, 382.

when not necessary to establish frauds, 8-10, 382.

of solvency, 95.

not to be pleaded, 142.

answer as, 160.

of secrecy, 234.

of wife, 313.

See Intention.
EXAGGERATED, indebtedness badge of fraud, 228.
EXCEPTIONS to rule concerning injunction against debtor, 53.

receivership, when allowed before judgment, 53.
EXCESS, of property mortgaged, 238^.

of debt, taking mortgage in, 347.
EXCHANGE, of property, 211a.
EXCLUSIVE jurisdiction in equity, 56.

property not subject to legal process, 56.

as to choses in action, 22, ^1, 56.

supplementary proceedings not, 61.

suits by personal representatives not, 112.
EXCUSING want of change of possession, 263.

References^ INDEX. [are to sections. 77Q

EXCUSING — continued.

rebutting presumptions of fraud, 263.

laches, 148.
EXECUTION, contingent remainder not liable to, 29 n.

seat in stock exchange not liable to, 35 //.

property purchased in name of third party, 57.

remedy by, 59.

to county of debtor's residence, 68.

must precede creditor's bill, 68.

return of, unsatisfied, 74, 68, 86, 86 n.

return of officer conclusive, 74.

when execution excused, 75.

New York rule explained, 86 //.

conflict in New York, 86.

Supreme Court rule, 86 n.

distinction between realty and personalty as to, 87.

raising the objection, 88.

what bill should allege as to, 88.

where jurisdiction is concurrent, 51.

selling land under, 72.

in State where land lies, 83.

what bill should show as to, 88.

not reach proceeds of power, 40 n.

return of, evidence of insolvency, 273.

purchaser, may bring suit to set aside deed, 371a.
EXECUTORS AND ADMINISTRATORS, as complainants, 112,

"3-

New York legislation, 112.

as defendants, 136.

as fraudulent grantees, 77.

conveyance binding upon, 112, 113, 398.

may sue for canceled debt, 42.

complaint by, 143.

judgment against, 77.
EXEMPTING assignee from liability, 334.

renders assignment void, 334.

theory of the law, 334.
EXEMPTIONS, rule as to, 46-50, 50a.

policy of the law, 365.

no restriction on legislation, 46 n.

reservation of, in assignments, 326.

does not render assignment void, 326.

do not pass by assignment, 316a.

ySO References^ INDEX. [are to sections.

EXEMPTIONS — continued.

receiver gets no title to, 46.

endure for life-time, 46.

aversion to exemptions not statutory, 360.

fraudulent purchase of, 47.

purchase on eve of insolvency, 47.

covinous alienations of, 48.

conflicting cases, 49.

forfeited by fraud, 49.

equivocation as to, 49, 49 n.

what cannot be reached, 50a.

crops on exempt lands, reached, 27.

pension money in lands, 46.

must exist at date of transfer, 46.

partnership property not exempt, 48.

on dissolution of firm, 48.
EXHAUSTING LEGAL REMEDY, 73, 86.

object of, 73.

establishes claim, 73.

saves debtor from interference, 52, 73.
EXISTING CREDITORS, 89-95.

See Subsequent Creditors.
(1.) Classes of creditors, existing and subsequent, 8c

who are existing creditors, 89.

renewal creditor, 89.

change of securities, 89.

subsequent creditors, 89, 96, 97.
their respective rights, 89, 96.

may join in Alabama, 108 ;/.

decree when not binding, on, 168.
(2.) Contingent creditors, 90.

wife and surety as creditors, 90.

indorser and warrantor, 90.

municipal corporation, 90.

date of agreement governs, 90.

tort claimant, 90.

remainderman, 90.

who are not creditors, 91.

acquiescence, 91.

transfer of right to sue, 92.
(3.) Voluntary alienations as to, 93, 94.

presumptively fraudulent, 94.

New York rule, 93.

References^ INDF.X. f arc to sections. "Si

EXISTING CREDITORS — voluntary alienations — continued.

modern English rule, 93.

early conflict as to, 93.

recent cases, 94.
EXPECTANT ESTATE, may be reached, 24.

assignment of, vacated, 29.
EXPENSES, when chargeable to common fund, 109.

of rescuing property, 109.
EXPERTS, proving value by, 284.

illustrations, 284.
EXPLAINING delay, discovery of fraud, 149.

judgment, 270.

recitals of consideration, 221.

contradicting allegations of deed, 221.

substituting valuable for good consideration, 221.
EXPLICIT PROOF, not exacted, 5.
EXTENDING UNUSUAL CREDIT, as evidence of fraud, 241.

FACTS, sufficient to excite inquiry, 379, 380, 381.

as notice of fraud, 379-381.

may be implied, 142.

means of knowledge, 381.

the test, 380, 381.

admitted in pleading, 285.

equity deals with, 60.

to establish fraud, 5.

must be substantial, 5.
FAILURE, to record, ioi, 235, 236, 237.
FAIR PREPONDERANCE, fraud must be shown by, 271.
FAMILY, services by members of, 218.

by daughter to debtor, 218.

no promise to pay implied, 218.

wife to husband, 218.

when claim of cannot be collected, 218.

insurance for, 23.
FATHER, gift by, improvements, 296.

to son, sale by, 242.
FEDERAL COURTS, rules of procedure in, 61 «, 71.

supplementary proceedings in, 61 ;/.

not allowed in State court on federal judgment, 61 «, 78,
78 n.

rules of property in, 20, 71.

local rules govern in, 20.

782 References'] INDEX. [are to sections.

FEDERAL COURTS— continued.

State decisions followed, 71.

as to fraudulent and voluntary assignments, 71.

pauper litigants in, 71.

chancery practice prevads, 51, 71.

suit against stockholder in, 139.

judgment in, 78, 78 ;/.

bill in equity in, 68 ;/.

no bill by simple contract creditor, 71.

not interefere with State receiver, 117.

as to change of possession, 250.
FEDERAL TRIBUNALS, procedure in, 71, 407, 4°7<*-

heirs and devisees as parties, 136.

local rule governs in, 20.
FICTITIOUS CONSIDERATION, recital of, badge of fraud, 228.

either in mortgage or conveyance, 228.

to be considered by jury, 228.

not fraud per se, 228.

immaterial mis-recital, 228.

to be fraudulent must be intentional, 228.
FICTITIOUS, grantee, setting aside deed, 131.

claim may avoid assignment, 320.

debt, avoids assignment, 345.
FIELD OF INQUIRY, must be broad, 6.
FILING chattel mortgage, 347 n.

FINES, conveyance to defeat, attached by State, 123 n.
FIRM, judgment creditor of, suit by, 108.

exemptions of, 48.

assignments by, 319^.

fraud in firm creditors, 216.

assets of, how distributed, 216.
FLEXIBLE JURISDICTION OF EQUITY, 60, 193 n.
FORECLOSURE, proceedings attacking fraudulent conveyance, 63.

in surplus-money proceedings, 63.

receiver in foreclosure, 187 n.
FOREIGN JUDGMENT, does not have the force of domestic
judgment, 78.

rule as to, stated, 78.

federal court judgment, 78, 78 n.

government, claims against, pass to asignee, 114.

assignments, 346.

statutes, no force ex proprio vigore, 405 /;.

receiver as complainant, 118.

References] INDEX. [are to sections. "X ^

FOREIGN RECEIVERS, recognized by comity, m

FORMS, equity looks beyond, 60.

FORMS OF LAW, observance of, will not save transaction, 5, 5 //.

FORMS OF RELIEF, 4, 51-72.

See ( 'kkditoks' Rkmi di i

not regarded in equity, 60.

in cases of fraud on wife, 70.
FRAMING ISSUES, for jury, 51, 5. n.
FRAUD, divisions of, 10.

never presumed, 5, 5 ;/, 6.

under forms of law, 5 n.

not proved positively, 7.

tested by human nature, 7.

more extensive signification in equity than at law, 60.

compounded of law and fact, 13 n.

equitable, 51.

rule as to pleading, 141.

fraud in law and fraud in fact, 10.

no definition of, 13.

proof of, 5, 6.

evidence must be persuasive, 5.

loves darkness, 6.

under bankrupt act, 13 ;/.

as to existing creditors, 89-95.

as to subsequent creditors, 96-106.

lies in intent to deceive, 141.

general charge of, insufficient, 141.

indicia or badges of, 224-244.
FRAUD INFERRED FROM TRUST, an inference of law, 10 //.
FRAUD IN LAW and fraud in fact, 9, 9 //, 10, 382.

distinction discussed, 9, 9 /z, 10, 382.

different intent cannot be shown, 9.

cases explained, 9, 9 n, 10.
FRAUD, MUST BE PROVED, 5, 5 «, 283.

one of recognized heads of equity jurisdiction, 60.

is intention carried out by hurtful acts, 13, 196.

as a legal deduction, 10.

to annul written instrument, 6.

possession as proof of, 247.

character of, 6.

perpetrated in secret, 6.

may be unintentionally committed, 8.

pleading fraud, 141.

784 References'} INDEX. \are to sections.

FRAUD, MUST BE PROVED — continued.

word need not be used, 141.

cannot be denned, 13.

nature and effect of, considered, 13.

constructive, 323.

suspicions as to, insufficient, 5, 283.

shown from circumstances, 281.

the test, 281.

equilibrium will not establish, 5.

disconnected acts as evidence, 280, 282.

in conveyances, characteristics, 15.

badges of, 224-244.

in fact and in law, 8, 9, 10, 322, 382.

as to existing creditors, 82-95.

as to subsequent creditors, 96-106.

irregularities and carelessness, 5.
FRAUDS, statute of, agreement out of, 296.
FRAUDULENT, conveyance of equity of redemption, 31.

purpose, when harmless, 107.
FRAUDULENT CHATTEL MORTGAGES, 347-359^-

See Chattel Mortgages.
FRAUDULENT CONVEYANCES, defined, 15.

classes of, 15.

necessary elements of, 15.

at common law, 16.

statutes declaratory, 16.

early statutes avoiding, 18.

property that may be reached; 23-50.

grantee, creditors of, 387.

liability between, 388.

grantees sharing in recovery, 389.

valid between the parties, 395-400.
FRAUDULENT GENERAL ASSIGNMENTS, 316-346.
(1.) Voluntary assignments, 316.

general comments, 316.

claimed to be American devise, 316.

defined, 316.

made in absence of statute, 316.

right exists at common law, 316.

change of possession, 316.

property transferred, 3160.

property that does not pass, 316a.

References | INDEX. [are to sections. 785

FRAUDULENT GENERAL ASSIGNMENTS— voluntary— cont'd.

delivery of assignment essential, 316a, 316a, ;/.

assent of assignee, 316/;.

rights of assignee, 319a.

trust fund in assignee's hands, 319a.

antecedent agreement to prefer, 342^.

property not in custodia legis, 316.

assignee quasi-public officer, 316.

assignee not officer of court, 316.

must obey provisions of assignment, 316.

derives authority from instrument, 316.

control of court over, 316.

parties cannot change character of, 316.

assignor cannot substitute successor to assignee, 316.

assent of assignee, 316^.

creditors' proceedings, 316c

word void construed, 317.
(2.) Delay and hindrance, 31 8.

meaning of delay, 318.

of hindrance, 318.

instances, 31S.
(3.) Intent affecting assignment, 319.

actual intent not exclusive test, 319.

of assignor generally governs, 319.

conflict in the cases, 319.

drift of the cases, 319.

suggestions as to correct procedure, 319.
(4.) Partnership assignments, 319^.

courts protect from creditors, 319^.

all partners must join, 319^.

special partner need not join, 319^.

limited partnership, cannot prefer, 319^.

acknowledgment of instrument, 319^.

preferring a partner, 329.
(5.) Fraud must relate to instrument itself, 320.

subequent illegal acts immaterial, 320.

independent acts not considered, 320.

preferring fictitious claim, 320.

effect of omission from schedules, 320.
(6.) Good faith, 321.

means " sincerity or honesty of purpose," 321.

presumption of, appertains to asignments, 321.

mistake not fatal, 321.
50

786 References] INDEX. \are to sections.

FRAUDULENT GENERAL ASSIGNMENTS— continued.

(7.) Void on its face, 9, 10, 322.

instances given, 322.

actual motive or belief immaterial, 322.

power to reform, 322a.

purchaser under void assignment, 322a.
(8.) Contravening statutes, 324.

burden on creditor, 324.

may be avoided, 324.

an illustration, 324.
(9.) Transfers to prevent sacrifice, 325.

will be set aside, 325.
(10.) Reservations, 326.

when fatal to instrument, 272, 326.

for debtor's benefit, 326.

of exempt property not fraudulent, 326.

reserving surplus, 327.

apparent conflict in the cases, 327.

preferring claims in which assignor is partner, 329.
(11.) Releases exacted in assignments, 328.

looked upon with disfavor, 328.

render assignments fraudulent, when, 328.

different cases considered, 328.
(12.) Authorizing trustee to continue business, 330, 331.

when such provisions permissible, 331.

power to continue a school illegal, 331.
(13.) Delay sales upon credit, 332, 333.

creditors' right of immediate payment, 332.

holding realty two years void, 332.

the cases reviewed, 332, 333.

exceptional rule, 333a.
(14.) Exempting assignee from liability, 334.

renders assignment void, 334.
(15.) Other features, 335, 337.

authority to compromise, 336.

fraud of assignee, 337.

providing for counsel fees, 335.

assets exceeding liabilities, 340.

excessive preferences, 341a.

preferences to laborers, 341b.

notice to preferred creditors, 341^.

bill of particulars, 34id.

assignments to prevent preference, 341.

threatening to make assignment, 342.

References] INDEX. [art i ■

FRAUDULENT GENERAL ASSIGNMENTS — continued.

(16.) Transfers inuring as assignments, 339.

White v. Cotzhausen, 339a.

conflict in the cases, 339a.
(17.) Incompetency ami removal of assignee, 337,

badge of fraud, 338.

word " incompetency " construed, 3

conflicting interests, 337.

selection of blind assignee, 3
(18.) Construction of assignment, 20 ;/, 343.

rules applicable to, 20 n, 343.

explaining obnoxious provisions, 344.

assignments held void, 345.

insufficient grounds of attack, 345a .
(19.) Foreign assignments, 346.

operate as matter of comity, 346.
(20.) Generally, defeated creditor entitled to dividend, 345^.

assignments by corporations, 346a.

contingent creditors, 346^.

preference on eve of, 391^.
FRAUDULENT GRANTEES, valid title from, 386.

as defendants, 131.

proceedings futile, if omitted, 131.

intermediate grantees, 131.

as trustees, 385.

creditors of, 387.

liability between, 388.

sharing in recovery, 389.
FRAUDULENT INTENT, fact for jury, 9, 204.

allegations concerning, 145.

when res adjudicata, 203.

where consideration is adequate, 201.

proving intent, 206.

of agent binding on principal, 198.

actual, not decisive, 197, 382.

mutuality of participation in, 199, 302. 319.
See Intention.
FRAUDULENT JUDGMENTS, removed, 51 n

set aside in equity, 60.
FRAUDULENT PARTY, not protected from loss, 195.
FRAUDULENT PURCHASES OF EXEMPTIONS, 47-

legality of, 47.

conflicting cases as to, 49, 50.
FRAUDULENT transferee, judgment against, 3 n, 176-1S0.

788 References^ INDEX. [are to sections.

FRAUDULENT TRANSFERS, prevalence of, 2.

cause of, 2.

of choses in action, 17, 33.

of exemptions, 47.

early statutes avoiding, 18.

characteristics and classes of, 15.
FRAUDULENT vendee, liability of, 176, 178, 195.
FUND may be traced by creditors, 44.

followed, in new investment, 44.

the rule illustrated, 44.

lien on the mass, 44 //.
FUTURE ADVANCES, rule as to, 217.

judgment or mortgage for, 217.

should be shown on face of lien, 217.
FUTURE INCOME, creditor may reach, 45.
FUTURE, schemes of fraud, 96, 202.

creditors, intent to defraud, 98, 202.
FUTURE SERVICES, as consideration, 223.

GENERAL ALLEGATIONS of fraud of no value, 141.
GENERAL ASSIGNMENT, 316-346.

See Fraudulent General Assignment.

will supplant suit, when, 23.

character of, 316.

property transferred by, 316^.

surviving partner may make, 319/', 329.

all partners must join, 319^.

when void, 345.

by corporation, 3460.

specific assignment is not, 339.

threatening to make, 342, 342 /;.

construction of, 343.

assignee under, as complainant, 115.
GENERAL DENIAL, evidence under, 158.

valid title may be shown under, 158.
GENERAL REPUTATION, evidence of, allowed, 275.

as to absence of means in vendee, 274.

as to want of credit, 275.

is competent, 275.
GENERALITY of gift or conveyance, 22, 231.

evidence or badge of fraud, 231.

commented on in Twyne's case, 22.

views of Lowell, J., 231.

creating violent presumption of fraud, 231.

References^ INDEX. [are to sections. 789

GENERALITY - continued.

considered unusual and extraordinary, 231.

various comments, 231.
GENEROSITY, when not evidence of fraud, 5.
GEORGIA, spendthrift trusts in, 367a.
GIFT, condition repugnant to, void, 362.

oral, title by, 296.

of small value not fraudulent, 41.

from husband to wife, 309.

of labor, valid, 50^.

as badge of fraud, 309.

generality of, as evidence of fraud, 22, 231.

to charity, 217^.
GOOD and valuable consideration, 210.

defined by Story, 210 n.

See Bona Fide Purchaser.
GOOD CHARACTER, evidence of, 275.
GOOD FAITH, settled presumption of law, 6.

the vital question in these suits, 196.

and consideration, 207.

defined, 321.

relating to fraudulent assignments, 321.

protecting purchasers, 369, 372.

professions of, 279^.
GRANT, conditions repugnant to void, 362, 363, 367.

of entire estate, evidence of fraud, 231.
GRANTEE, fraudulent, as trustee, 385.

creditors of, 387.

when they may seize the property, 387.

doctrine of apparent ownership, 387.

liability between, 388.

sharing in recovery, 389.

enforcing fraudulent deed, 402.
GRANTING AMENDMENTS, discretionary, 156.
GRANTOR'S BENEFIT, transfer invalid, 211.

secret trust for, 272.

conveyances fraudulent, 272.
GRANTORS, defrauded of property, 399, 4°°-

aid extended to, 399, 400.

degrees of guilt, 399.
GRATUITY, cannot be transformed into a debt, 209.
GRAY, PROFESSOR, views as to spendthrift trusts, 364 n, 366.
GROSSLY inadequate consideration, 207, 232.

will overturn transfer, 6, 232.

INDEX.

GROWING CROPS, change of p :- :66.

unposs *66.

cc: . - ::6.

available to ::: _ it - : -

: ■ ; : i ■ - - I - : - . : "
GUILTY KNOWLEDGE, of debtor's

ARSAY. - sale "

•• hearty eviction

BE IRS - s, 121.

■ :per parties, 121.
t impeach a

121.
testim . _ . f2i.
rea g 53-

i • -
HINDEJ - stmed, ii, ii *.

5, II.

-:.t to do either - B&c " n.

ect of the statute, n.

t, 24 556.

dela; - to time, 318.

hindrance.- obstacles

HINDRANCE AND DELA. - :i.

1 between, 1 1 n.
I tei - ' : •
es upon ere t, 24c $32 -

HOMESTEAD, abandcr.
%<

exemp-

rill, 166.
HONEST PURPOS :. -. 6.

HONESTY, presumption of, pr e
: D
es to be impu:-:

. by deb: r —
HOSTI1

HUMAN NATURE, know!- g

HUSBAND AN1

f

confidence

frauds in tl

hush

husband m

when conv<

: i. ~ : : r f

- : : z : u r. i

'. v. . .. . :.-...

Transactumk

K, 122, a

. ..- -

"

l:;:r ;: v;:e ; . .

-•

-: ;•• ::' ■ .:- : ;_

in her sepa ite

-

:

aero, 299.

: : :

4 -

-mption of ownership

:

:. rer.ier ?r::le~e~: zziziz -: .: ;c:

(6.) Husband

1 - . -

wife may se title t ere

r. ;: v.\r:r ..;;:::::;:: ;. . ..; rx;s:s. ;c;

3 .

amour.. $06.

7Q2 References'] INDEX. [are to sections.

HUSBAND AND WIFE — marriage settlements — continued.

when avoided, 306.

post-nuptial settlements, 307.

purchase after marriage, 308.

gift from husband to wife, 309.
(9.) Fraudulent conveyances in contemplation of marriage, 314.

illustrations of the enforcement of the rule, 314.

applies to both husband and wife, 314.

fraudulent transfers affecting dower, 315.
(10.) Life insurance, 23, 23 n, 312.

creditors' rights in, 23, 23 n.
(11.) Estate in entirety, 29.

husband's interest liable, 29.

ILLEGAL, consideration is no consideration, 214.

claim, insufficient, 77.

composition preference, 393a.
ILLICIT INTERCOURSE, illegal consideration, 213.
ILLINOIS, return of execution, 86 ;/.

trust income cases, 3670.
IMPEACHING, judgment, 78 n.

burden as to, 74.
IMPOSSIBLE, to secure judgment, 84.
IMPOUNDING, proceeds of fraudulent sale, 175.
IMPRISONMENT, of debtor, effect of, 66.

constitutes satisfaction of claim during its continuance, 66,

termination of revives remedy, 66.
IMPROVEMENTS, recovering, 26, 26 //, 192 n, 193 n.

on another's land, 26.

the law follows them, 26.

temporary or perishable, 26.

by husband on wife's land, 26.

to support gift, 296.
INADEQUACY of purchase price, 232.

as evidence of fraud, 6, 232.

not per se fraudulent, 232.

illustrations, 232.

does not per se prove fraud, 232.

unless extremely gross, 6, 232.

the test, 232.

is fact calling for explanation, 232.
INCEPTION OF TRANSACTION, fraud must be in, 227.
INCHOATE INTEREST may be reached, 30.

References^ INDEX. [are to sections . 7g ■}

INCHOATE INTEREST —continued.

curtesy and dower, 30.

unassigned dower, 61.
INCOME, surplus may be reached, 45, 360.

See Spendthrift Trusts.

the rule applied, 45, 360.

exempt earnings for sixty days, 61 n.

creditors' lien on, 45.

burden of showing, 45.

interest of wife in, 45.

station in life of debtor, 45.
INCOMPETENCY of assignee, 338.

badge of fraud, 338.

ground of removal, 337.
INCONSISTENT DEFENSES, may be set up, 158.
INCORPOREAL RIGHT, membership of stock exchange is, 35.
INCUMBRANCES, purchaser removing, 126.
INDEFINITE TRUST, fraudulent, n.
INDIAN TERRITORY, statute of Elizabeth in, 16 n.
INDIANA, creditor's bill against absconding debtor, 84.

exceptional practice in, as to joinder of claims, 85.

its features considered, 85.

suit by general creditor, 73 ;/.

as to change of possession, 250.

as to spendthrift trusts, 3670.
INDICIA OF FRAUD, 224-244.

See Badges of Fraud.

are circumstances or elments of fraud, 224.

defined, 225, 225 //.
INDICTMENT, alleging fraudulent conveyance, when sufficient,

65 n.
INDIVIDUAL and copartnership debts, 216.

consideration as affecting, 216.
INDORSER as creditor, 90.

INDUSTRY AND TALENTS, cannot be reached, 50*7.
INFANT, fraudulent intent applied to, 199 n.

no participation in fraudulent intent, 199 n.

interest in parents' trust income, 45.
INFERENCE, of fraud from circumstances, 7.

of fraud, despite honest intent, 197.

how justified, 281.
INJUNCTION against debtor before judgment, not allowed, 52, 185.

theory of the rule, 52.

7Q4 References^ INDEX. [are to sections.

INJUNCTION — continued.

exceptions to the rule, 53, 185.

vexation and hardship incident to any other rule, 52.

creditor must have certain claim, 52.

against debtor, 185, 186.

against sale, 185.

against encumbrancing stock, 185.

when allowed, 185.

when disallowed, 186.

not allowed to wife, when, 52.

in aid of attachement, 53, 185.

in cases of false credit and disaffirmance, 53.
INJURED PARTIES, only can assail fraudulent conveyances, 107.
INNOCENCE, presumed in actions for deceit, 5.

of assignee, does not save assignment, 319.
INNOCENT CONSTRUCTION, to be preferred, 20, 20 n.
INQUIRY, facts sufficient to excite, 379, 380.

facts that constitute notice of fraud, 380.

scope of, in this work, 3.

field of, broad, 6.
INSIGNIFICANT GIFTS, not avoided, 41.
INSOLVENCY, evidence of, 239, 273.

importance of proof of, 239.

as proof of fraud, 239.

considered a circumstance, 239.

seeking provisional relief, 184.

meaning of the term, 273.

opinions as to, 273.

of vendee, 274.

proof of, 271.

continuing business after, 143 n.

of debtor, evidence of, 273.

discharges as defense, 294.

rule as to, 294.

alleging in pleading, 143.

when must exist, 143.

defined, 143.
INSOLVENT, punished under early law, 1, 1 n.

proof that person is, 239.

station in life as regards income, 45.
INSOLVENT CORPORATION, capital stock of, 68 n, 117

evidence of insolvency, 273, 273 n.
See Corporation.
INSTRUMENT, fraud shown by separate, 6.

References^ INDEX. [are to sections. 7QC

INSUFFICIENT CONSIDERATION, 223.

illustrations, 223, 232.

judgments, 77.

statement of confession, 174.
INSUFFICIENT, judgments, 77.

grounds to attack assignment, 345a.
INSURANCE, when not assignable, 23.

policies, rights of creditors, 23, 23 n, 312.

by married man, 23.

murder to secure, 20 //.

when not in fraud of creditors, 23 n.

annual premium limited, 23.

insurance money may be traced, 44.
IN PERSONAM, judgment to sustain supplementary proceedings, 61.

to uphold creditor's suit, 77.

primary jurisdiction of equity is, 60.
INTANGIBLE interests may be reached, 17, 27.

choses in action recoverable, 17, 24, t,^.

stocks, patent rights, legacies, 24, 37, 38.
INTEGRITY, paramount to generosity, 16.
INTENT, is an emotion, 8.

See Intention.

essential element, 196.

inferred from circumstances, 8.

fraudulent pleading, 145.

as a conclusion of law, 9, 10, 197, 322.

cases considered, 10.

evil, not evidence by gifts of small value, 41.

not conclusive, 197, 382.

determined by act done, 8 «, 196.

seldom disclosed on face of transaction, 196.
INTENTION, may oppose legal conclusion, 8, 382.

when cannot change presumption, 9.

seldom disclosed on face of transaction, 196.

reached by construction of instrument, 10, 322.

as affecting subsequent creditors, 98, 202.

generally, 8, 9, 10, 41, 196-206, 279^.

must be found as a fact, 196.

discrimination in decree, 196.
(1.) Defined or outlined, 196.

is an emotion or operation of the mind, 196.

shown by acts or declarations, 196.

fraud as affected by, 8, 9, 10, 196.

yg6 References^ INDEX. [are to sections.

INTENTION — defined or outlined — continued.

debtor's statements not conclusive, 196, 197.

insolvent's standard of morality not the test, 196.

hinder, delay or defraud, sufficient, 11, 196.

when question of res adjudicata, 203.

question for the jury, 204.

testifying to, 205.

as to another person's intent, 205.

proving it, 206.

intent of debtor the test, 196, 196 n.

gathered from circumstances, 206.
(2.) Actual intent not decisive, 197.

fraudulent purpose may be implied, 8, 9, 10, 197.

debtor's belief immaterial, 8, 9, 10, 196, 197, 322, 382.

professions of good faith, 279^.
(3.) Fraud of agent binding on. principal, 198.

intent established by implication or substitution, 198.
(4.) Mutualitx of participation in fraudulent intent, 199, 207.

the general rule, 199.

vendor's intent insufficient, 199.

fraudulent intent as applied to infant, 199 n.
(5.) As affecting voluntary alienations, 200, 319.

the cases reviewed, 200 //.

differs from cases where consideration is present, 200.

not essential to show mutual evil intent, 200.

relating to general assignments, 319.
(6.) Where consideration is adequate, 201.

the rule considered, 201.
(7.) To defraud subsequent creditors, 96, 97, 98, 100, 202.

applications of the rule, 96, 97, 98, 100, 202.

creditor must show, 98.

future schemes of fraud, 202.
INTENTIONAL FRAUD, under bankrupt act, 13 n.
INTENTIONAL OMISSION of assets, avoids assignment, 345.
INTERESTED parties, in esse, must be joined, 107.
INTERESTS that may be reached, 23-50.

tangible interests, 24.

intangible rights, 17, 24, n, 37, 38.

rule in England, 25.

profits and inprovements, 26.

crops, 27.

choses in action, 33.

powers, 39, 40.

References^ INDEX. [are to sections. 7Q7

INTERESTS — continued.

trust income, 45, 360.
INTERPRETATION and construction, 20, 20 n.

maxims of common law, 20 n.

of contracts, 268.
INTERVENTION, motion for in New York, 10S n.

creditor must not be guilty of laches, 109.
INTRODUCTORY observations, 1-22.
IRREGULARITIES, not proof of fraud, 5.
IRRESISTIBLE, evidence to establish fraud need not be, 7.
ISSUE OF FACT, referred to jury in equity, 51.

See Jury.
ITEMS, of evidence, jury to weigh, 281.

JOINDER OF CLAIMS, 54, 108.

rule in Ohio, 54.

uniting causes of action, 55, 108.

several grantees may be joined, 54.

although separate defenses exist, 54.

ejectment and equitable relief in one bill, 54.

conflict in the cases, 54.

exceptional practice in Indiana and North Carolina, 85.

for judgment on coupons and mandamus, 85 //.
JOINDER OF COMPLAINANTS, 108, 108 n.

creditors by distinct judgments, 108.

various illustrations, 108.

by judgment and decree, 108.

general theory, 108.

of hostile claimants, 108.
JOINING DEFENDANTS, the rule, 128, 132, 150, 151, 152.

the theory, 132.

objections to non-joinder, 134.

debtors, 128, 129.

stockholders, 128.
JUDGMENT-CREDITORS, may follow corporate assets, 119.

may attack fraudulent conveyance, 73-88.

See Status of Attacking Creditors.

may attack other judgments, 74.

when execution excused, 75.
JUDGMENT OR DECREE, rules as to, 168-183, 183^.

status of attacking creditors, 73-88.

lien and order of payment, 170, 170 ;/, 171.

collateral attack on, 270.

7Q8 References'] INDEX. [are to sections.

JUDGMENT OR DECREE — continued.

confession, 270 n.

when judgment unnecessary, 83.

receiver before, 184.

on offer, valid, 76.

judgments sufficient, 76.

judgments insufficient, 77.

foreign judgment, 78.

when judgment unnecessary, 83, 83 ;/.
(1.) Judgment conclusive, 168, 169, 270, 286^.

attributes of the judgment, 168.

operates as an estoppel, 168.

conclusive, though form of action be changed, 169.

judgment transferring title, 172.

when not conclusive, 168.
(2.) Judgment appointing receiver, 170.

the pratice explained, 170.

appointing referee irregular, 170.

effect of, 170.
(3.) Judgment avoids sale only as to creditor, 171, 395-402.

the principle, 171, 395.
effect of action of chancery, 171.
(4. ) Impounding proceeds of fraudulent sale, 175.

accounting by fraudulent vendee to debtor, 176.
(5.) Relief at law and in equity, 176 n.
equity more flexible, 176 n.
enforcing judgment at law, 170^7.
(6.) Personal judgment against fraudulent vendee, 3 //, 177, 178.
the subject discussed, 177.
rule in various States, 3 n, 177, 178, 178 n.
allowances to vendee, 176.
money in place of land, 178 //.
money judgment, when disallowed, 179.
personal judgment against wife, 180.
( 7 . ) Must conform to relief sought, 181, 182.
illustrations, 181, 182.
fraud must be found as stated, 168.
form in Louisiana, 171.
(8. ) Generally.

no judgment in favor of unrepresented parties, 173.
enforcing judgment at law, 170a.
confession of judgment, 174.
contradictory verdicts, 183.

References^ INDEX. \ are to sections . 799

JUDGMENT OR DECREE— generally — continued.

status of attacking creditors, 73-88.

attaches to proceeds of power, 40 //.

as to trust, when binding on creditors, 45 n.

when fraudulent, removed, 5 1 n.

equity will restrain when demand fictitious, 74 //.

creditor attacking, burden as to, 74.

in supplementary proceedings, 77.

cestui que trust need not have, 127a.

statutory new trial, 1830.

case retained till disposed of, 168.
JUDGMENT, FOR DAMAGES, improper in equity, 51.

must be for accounting by fraudulent vendee, 51.

fraudulent confessions of, attacked in one suit, 54.

creditor must have, before filing bill, 71-88.

conclusive as to indebtedness, 74, 270.

proof of, 270.

attacking for collusion, 74 //.

sufficient to sustain a bill, 76, So.

insufficient for that purpose, 77.

foreign, effect of, 78.

foreign, not sufficient, 78.

object of, 73.

establishes debt, 73.

exhausts legal remedy, 73.

lien by statute, 87.
JUDICIAL SALE, change of possession on, 265.

not necessary in Pennsylvania, 265.

considered essential in New York, 265.
JURISDICTION IN EQUITY, when exclusive, 56.

when property not subject to execution, 36.

limited in Massachusetts to property not subject to execu-
tion or attachment, 59 n.

united jurisdictions, effect of, 51.
JURISDICTIONAL QUESTIONS, 405-407-

beyond State boundaries, 405.

outside county, 406.

appeal to Supreme Court, 407.
JURY, issues of fact referred to in equity, 51.

framing issues, 51, 51 //.

to weigh items of testimony, 281.

to weigh declarations, 276.

800 References] INDEX. yare to sections.

JURY — continued.

consider badges of fraud, 228.

intent, questions for, 9, 204.

fraud on subsequent creditors, question for, 97, 97 //.

court cannot interfere, 204.

in conclusive cases verdict ordered, 204.

rule in New York as to, 204.

effect of badges of fraud submitted to, 226.

continued possession as evidence of fraud, question for, 254.

error by, how corrected, 254.

KANSAS, change of possession, 250.
KENTUCKY, rule as to absconding debtors, 84.

as to land bought with pension money, 46.

rule as to trust income, 367^.

as to change of possession, 251.
KNOWLEDGE, of facts sufficient to excite inquiry, 379, 380, 381.

See Notice.

of facts, as notice of fraud, 379-381.

buying with guilty knowledge, 380.

LABOR, debtor may give away, 50^.

debtor may bestow on wife, 50^.

preference for claim for, 341^.
LACHES, excusing apparent, 148.

not imputed by iron rule, 287.

circumstances govern each case, 287.

pleading as to, 148, 149.

as a defense, 287.

stale demands discouraged, 287.

lapse of time, 288, 289.

effect of, 287-289.

creditor applying to intervene, 109.
LAND, change of possession of, 264.

as distinguished from personalty, 264, 264 n.

possession evidence of ownership, 264.

purchased in name of third party, 57.

in name of third party, trust as to, 57 ;/.
LAPSE OF TIME, as a defense, 288, 289.

rests not alone on laches, 288.

peace of society, 288.

loss of witnesses, 288, 289.
LATITUDE ALLOWED, in proving circumstances, 281.

References^ INDEX. [are to sections. $0 I

LATITUDE ALLOWED — continued.

in cross-examination, 281.
LAW, purchase either valid or void at, 51.

no reimbursement at law, 193.

remedy at, 59.

creditor may proceed by execution at, 59.

attempted transfer treated as nullity, 59.

and equity, distintion observed between, 51.
LAWRENCE v. FOX, rule in, applied, 43.
LEASE, liability on, creditor, 90.
LEGACIES, recovered by creditors, 24.
LEGAL AND EQUITABLE JURISDICTION, 4, 51, 59, 60.

changes in modern procedure, 51.

who responsible for decision in equity, 51.

judgment for damages not allowed in equity, 51.

reimbursement in equity, 192.

equity more flexible than law, 60.
LEGAL FRAUD, meaning of, 51.
LEGAL PRESUMPTIONS, 7.

Judge Black's views, 7.
LEGATEE, cannot avoid testator's transfer, 121 //.
LEGISLATION, tendency of, to protect honest debtors from pun-
ishment, 1 //.

to enlarge remedies against property, 3.

may exempt all property, 46 n.

as to creditors of decedent, 79.
LEVY, when excused, 75, 83.

cannot be made against receiver, 83.
LEX FORI, governs remedy, 64.

cases and illustrations, 64.

governs right to arrest, 64, 191.

matters of procedure, regulated by, 64.
LEX NEMINEM COGIT AD VANA SEU INUTILIA PERA-
GENDA, 73.

struggle for application of maxim, 73.
LIBEL, claimant for damages from, is creditor, 90.
LIEN, in supplementary proceedings, 61.

See Status of Attacking Creditors.

creditors must have, to file bill, 73, 75, 76, 88.

created by creditor's bill, 68, 75, 392.

by attachment, not sufficient to support bill, 81, 81 n.

creditors having rights of," 125.

parties having, as defendants, 138.
51

802 References] INDEX. [are to sections.

LIEN — continued.

judgment sufficient, 76, 80.

judgment insufficient, 77, 78, 81.

when unnecessary, 83.

upon rents and profits, 26.

judgment by statute, 87.

order of payment, 170, 171.
LIFE INSURANCE, policies, may be reached, 23, 24.

when non-assignable, 23.

by married man, 23.

murder to secure, 20 ;/.
LIGHTLY IMPUTED, fraud is not, 5.
LIMITATIONS upon ownership not favored, 360-368.

inconsistent, are void, 362.

statute of, 292.

in equity, 293.

effects of discovery of fraud, 290, 291.

must be pleaded or raised, 202.

acknowledgment of debt, 215.

judgment barred by, 77.

rule in New York, 73.
LIMITED partnership, cannot assign with preference, 319^.
LIS PENDENS, rule as to, 157.

to create, must describe property, 157.

doctrine as to, very ancient, 157.

not applicable to bonds, 157.

or to negotiable securities, 157.

or personal property, 157.
LITIGATION engendered by fraudulent transfers, 2.

not creditable, 407.
LOCAL, penal statutes are, 139.

territorial jurisdiction, 1570.
LOCAL RULE, governs federal courts, 20.
LOGS, delivery of, 262.

symbolical delivery sufficient, 262.

illustrations, 262.
LONG CREDIT, sale on, 240.
LOUISIANA, doctrine as to collateral attacks, 69.

its features discussed, 69.

derived from civil law, 69.

not generally acknowledged, 69.

objections to rule, 69.

form of judgment, 171.

References] INDEX. [are to sections. 80"

LOUISIANA — continued.

as to change of possession, 250.
LOVE AND AFFECTION as consideration, 210.

good between brother and sister, 216.

not good against existing creditors, 210.

explaining recitals in deed as to, 221.

MAINE, suit by general creditor, 73;;.

spendthrift trusts, 367*7.
MAINE'S ANCIENT LAW, punishment of debtors, 1 n.
MALICIOUS PROSECUTION, claims for, cannot be reached, 34.

do not pass by assignment, 34.
MANIFEST, fraud must be made, 5.
MARRIAGE, as consideration, 212.

the rule in the cases, 212.

public policy as to, 212.

relationship, 298.

settlement, rule as to, 306.

post-nuptial settlement, 307.

fraudulent conveyances in contemplation of, 314.

settlement, description in, 157 n.

statute of frauds, 311.
MARRIED MAN, may devote earnings to life insurance, 23.

See Agent.
MARRIED WOMEN, rights of, 298.

claiming life insurance, 23.

assignments of policies by, 23.

See Husband and Wife.
MARSHALL, Chief-Justice, views of, as to moral turpitude, 8.
MARSHALLING assets, 216.
MARYLAND, change of possession, 251.

spendthrift trusts in, 367*7.
MASS, of property, charge upon in equity, 44, 44 ;/.
MASSACHUSETTS, rule as to spendthrift trusts, 367, 367*7.

rule as to crops on lands fraudulently conveyed, 27.

jurisdiction of equity in, 49 //.

choses in action reached, 64.

remedies allowed, 65.

when receiver not appointed, 188 //.

no reconveyance, 397.

knowledge of intent, 196.

promises of third parties, 43.
MATERIAL FACTS, must be alleged in complaint, 141.

SOA References} INDEX. yare to sections.

MAXIMS, of common law, control laws and contracts, 20 //.
MEMBER, suing in place of receiver, 73.
MEMBERSHIP of stock exchange is assets, 35.

not liable to execution, 35 ;;.
MENTAL OPERATION and legal conclusion opposed, 8.

illustrated in Coleman v. Burr, 382.

intent is, 196.
MESNE PROFITS recoverable, 26.

during period of redemption, 26.

when property is held under trust, 26.
METHODS of obtaining redress, 72.

annulling fraudulent deed, 72.

appointing referee or receiver, 72.

selling on execution, 72.
MICHIGAN, change of possession, 250.
MINGLED property, 28.

rule as to, 28.

of husband and wife, 305.

wife may lose it, 305.

conflicting views, 305.

rule in bankruptcy, 305 //.
MINNESOTA, proof of existing debt, 89 n.

suit by receiver in insolvency, 115.

dishonest design must be shown, 197.

change of possession, 250.
MISJOINDER of causes of action, 135.

hostile claimants cannot join, 108.
MISSISSIPPI, general creditor may sue, 73 n.

debt must be due, 107 n.

exemptions in, 365.

trust income cases, 3670.
MISSOURI, issuance of attachment in, 12.

creditor's bill against absconding debtor, 84.

trust income cases, 367^.

conveyance by embarrassed debtor, 99.

change of possession, 251.
MISTAKE, in fraudulent conveyance, not corrected, 396.

in assignment, not fatal, 321.
MIXED CLAIMS, prior and subsequent to alienation, 105.
MODERN CHANGES in the law, 1.
MONEY EARNED, but not due, available, 33.
MONEY JUDGMENT, when disallowed, 179.

alllowed against vendee, 177, 178.

References] INDEX. [are to sections. 805

MONEY JUDGMENT — continued.

in equity, 51.
MONEY, may be reached, 24.

consideration need not be in, 207.
MONOPOLY, which patent confers, is property, 38.
MORAL SENSE, weak in some men, 8, 382.

of debtor, not binding on creditor, 8.
MORAL TURPITUDE, proof of, 8, 382.

not exacted, 8.

under bankrupt act, 13 n.

obligations as to consideration, 215.

duty to pay debt barred by statute, 215.

obligation, statute of frauds, 215.
MORTGAGEE as bona fide purchaser, 371.

rule in New York, 371. .
MORTGAGES, 347-359-

See Chattel Mortgages.

when fraudulent, 347-359.

promise not to disclose existence of, 281.

for just debt, may be overthrown, 207.

absolute conveyance as security, 238, 404.

pre-existing indebtedness as consideration, 371.

declaring deeds to be, 404.

future advances should be shown on mortgage, 217.

redeeming from, 404a.

assignee may set aside, 115.
MOTHER, and son, transactions between, 242.
MOTION, uncertainty in pleading reached by, 14° «•
MOTIVES, often unimportant, 8, 382.

not controlling, 187.

of transactions, 7.

latitude on question of, 224 n.

testifying to, 205, 205 //.
MULTIFARIOUS complaints, 150, 151, 152.

complaints bad for, 150.

pleadings held not to be, 151, 152.

rules applicable to, 150-152.
MUNICIPAL CORPORATION as creditor, 90.

from date of tax warrant, 90.
MURDER, not presumed, 5 n.

to secure proceeds of insurance, no recovery, 20 n.
MUTUALITY of participation in fraudulent intent, 199, 302, 319.

vendor's intent alone sufficient, 199.

806 References] INDEX. [are to sections.

MUTUALITY — continued.

participation by infant, 199 n.

as to voluntary alienations, 200, 200 n.

Laughton v. Harden, 200 ;/.

NATIONAL BANK, receiver of, 117.

not dissolved by receivership, 134.
NATURAL, presumptions, 7.

Judge Black's views, 7.

consequence of an act, presumption as to, 9, 10, 382.

person, corporation like, 117 n.
NEBRASKA, change of possession, 250.

NEGOTIABLE INSTRUMENTS, lis pendens doctrine not applica-
ble, 157.
NEVADA, change of possession, 250.
NEW ENGLAND cases as to change of possession, 249.

transfers presumptively fraudulent, 249.
NEW APPOINTMENT of assignee made by court, 316.
NEW JERSEY, bill by creditor having lien, 81 n.

spendthrift trusts, 367c.

bill by receiver, 116.

receiver of jewelry, 188.
NEW TRIAL, not a matter of right, 183a.
NEW VENTURES, placing property beyond, 100.
NEW YORK, value as affecting right to bring bill, 23 n.

and Massachusetts, choses in action may be reached, 64.

creditor's bill and supplementary proceedings at the same
time, 65.

no receiver in ejectment, 187.

rule as to change of possession, 250.

declarations as to personalty, 277.

sales by mortgagor for mortgagee valid, 355.

pension money in land, exempt, 46.

judgment by creditors of decedent, 79.

statutory policy, 79.

supplementary proceedings are special proceedings, 61.

assignee must attack fraudulent conveyance, 115.

title of receiver to real property, 116.

specific assignment not a general assignment, 339.

rule as to limitations, 73.

personal representative must sue, 77, 77 n.

suit in aid of attachment, 81, 81 n.

rule as to voluntary conveyances, 93, 208.

References] INDEX. \jire to sections. §07

NEW YORK — continued.

fraud on subsequent creditors, ioo u.

intervention motion, 108 u.

executors may sue, 112.

rule as to discovery of fraud, 149.

rule as to lis pendens, 157.

spendthrift trusts, 367a, 367^.
NICHOLS v. EATON, the point actually decided, 364.

the case stated, 364.

the dictum, 365.

criticised, 365.

the true rule, 366.

re-stated, 361 //.
NON-ATTENDANCE, of defendant, 241, 241 n.
NON-FILING of deed, 234 n, 235.
NON-RESIDENT DEBTOR, jurisdiction over, 84.
NO REIMBURSEMENT at law, 193.
NO DEFINITION of fraud, 13.
NORTH CAROLINA, exceptional practice as to joinder of claims, 85.

the practice deprecated, 85.

spendthrift trusts, 367a.

inadequacy of consideration, 232.
NOTICE, actual and constructive, 372-389.
( 1 . ) Wit ho u t notice, 372.

Judge Story's rule, 372.

possession as notice, 384a.

creditors after notice, 106.
( 2 . ) Kinds of notice, 373.

two kinds, actual and constructive, 373.

both defined, 373.
(3.) Constructive notice of fraud, 374-376, 378-382.

various definitions, 374.

rule in Stearns v. Gage, 375.

the doctrine discussed, 375, 376.

rule in Anderson v. Blood, 376a.

illustrations, 376.

actual belief, 377, 382.

rule in Parker v. Conner, 378.

comments, 382.
(4.) Facts sufficient to excite inquiry, 379-381.

many illustrations, 379-381.

means of knowledge equivalent to knowledge, 381.

notice to preferred creditors, 341^.

References^ INDEX. \ are to sections.

NOTICE — facts sufficient to excite inquiry — continued.

purchaser pendente lite, 389a.
NOTORIETY of change of possession, 253.

symbolical delivery insufficient, 253.
NULLA BONA, execution returned, 86/87, 87 //.
NULLITIES, attempted transfers treated as, 59, 69.

OATH against oath, effect of, 159.
OBJECTIONS, as to non-joinder, how raised, 134.

to jurisdiction in equity, 88, 88 n.
OBSTACLES to development of the law, 5.
OFFER, judgment entered on valid, 76, 270.

judgment on, 270.

of reimbursement, 192.
OHIO, rule as to change of possession, 250.

as to spendthrift trusts, 367a.
OMISSION from schedules, when fraudulent, 320.
OMNIA PRAESUMUNTUR CONTRA SPOLIATOREM, 281.
OMNIBUS BILL, creditors' bill so called, 68.
ONUS, as to fraud, 5, 6, 224.

affecting marriage relationship, 300.
OPEN AND CONCLUDE, right to, 271, 271 n.
OPINION, evidence as to insolvency, 273, 273 n.

as to value, 284.

of the parties, accorded little weight, 8.
ORDER OF ARREST, when vacated, 191.
OTHER CONVEYANCES, evidence of, 382.
OTHER FRAUDS, as evidence, 282.
" OTHERS," meaning of, no.

who included in, no.

suing on behalf of, no.

design of the statute as to, no.
OVERCOMING presumption from failure to change possession, 255.
OVERSEER OF POOR, as claimant, 124.

PAINSTAKING formalities, badge of fraud, 241.
PARENT AND CHILD, daughter's services to father, 218

no implied promise to pay, 218.
PAROL EVIDENCE, to vary consideration, 221.
PARTICEPS CRIMINIS, no relief to, 192, 214.
PARTICULARITY of denial in answer, 162.

general answer operates against defendants, 162.
PARTICULARS, bill of, ordering, 162a.

References^ INDEX. [are to sections. SOO

PARTIES COMPLAINANT, 68, 73j 107-127.
See Complainants.

joinder of complainants, 108.

when heirs cannot sue, 121.

when widow not entitled to proceed, 121.
PARTIES DEFENDANT, 128, 129.

See Defendant.

joinder of defendants, 132, 133.

in forfeiture action, 132^,

question of, perplexing, 107.

competency of, as witnesses, 269.

cross-examination of, 281.

interested parties in esse must be joined, 107.
PARTY, as witness, 269.

competency of, 269.
PARTITION SUIT, mortgage assailed as fraudulent, 63.

the theory, 63.
PARTNERS, may sue copartners and fraudulent alienees, 54.

object of suit in such case, 54.

arrest of, 191.

preferring claims, 329.

no exemptions, 48.

special, cannot be preferred, 329.

survivor may make assignment, 329.

limited, assets are trust fund, 329.

corporators, when liable as, 139.

copartnership and individual debts, 216.

frauds on partnership creditors, 216.

partnership assignments, 319^.

power of to make assignments, 319^.
PAST TRANSACTIONS, declarations as to, 276.
PATENT RIGHTS, monopoly secured by, is property, 38.

may be assigned by operation of law, ^8.

can be reached by creditors, 24, 38.

inchoate right to, non-assignable, 38.

receiver of, 38.
PAYMENTS, made to debtor, 50^.
PENALTY for non-payment of debts, 1.

inflicted upon stockholders, 139.
PENDENTE LITE, purchaser, 389a, 392.
PENDING the writ or suit, conveyance made, 22, 132a.

badge of fraud, 233.

purchaser bound, 1320.

8 10 References^ INDEX. [are to sections.

PENNSYLVANIA, rights of administrators, 112.

change of possession, 251.

spendthrift trusts, 367^, 368.

powers not assets, 368a.
PENSION MONEY, in lands, 46.

PER SE FRAUDULENT, inadequacy of price is not, 232.
PERSONAL, judgment against fraudulent vendee, 177, 178, 178 n.

money judgment, when disallowed, 179.

against wife, 180.

to sustain bill, 77.

transaction with deceased, testifying to, 122.
PERSONAL liability, assignee protected against, 319a.
PERSONAL PROPERTY, mortgages upon, 347-359.

delivery of possession of, 245-267.

distinction between, and realty, 264.

as to return of execution, 87.

lis pendens inapplicable to, 157.
PERSONAL REPRESENTATIVES, as complainants, 112, 113.

rule in New York, 112, 113.

as defendants, 136.

conveyances binding upon, 112, 113, 398.

may sue for cancelled debt, 42.

claims of, pass by assignment, 316^.
PERSONAL TRANSACTIONS with deceased person, 121.

evidence of, 121, 205 n.
PERSONALTY, restraint upon, not allowed, 363 n.

in name of third party, liable to seizure, 57.

admissions concerning title to, excluded, 277.
PLAINTIFFS, in creditors' suits, 68, 73, 107-127.

See Complainants.
PERSUASIVE, proof of fraud must be, 5.
PLEA, or answer, 158-167.

See Answer.

of bona fide purchaser, 163.

PLEADING, 141-167.

See Complaint.
testimony must conform to, 285.
amendment of, 156.
bill of particulars, 162a.
charging fraud, 141.
general allegations insufficient, 141.

References] INDEX. [are to sections. 3jj

PLEADINGS IN EQUITY, not so strict as at law, 60, 146.

held not multifarious, 151, 152.
PLEDGE, void mortgage not basis of, 357.
PLEONASMS, in English statutes, 11 ;/.
POLICIES of insurance for wife's benefit, 23, 312.

when not assignable, 23.
POSITIVE TESTIMONY, not requisite, 5.
POSSESSION, change of, 245-267.

See Change of Possession.

must be open and visible, 246, 253.

definition of, 245.

evidence of title, 245.

concerning possession, 245.

possession as proof of fraud, 247.

rebutting inference, 250.

transfers prima facie fraudulent, 248.

as evidence of fraud per se, 251.

rule in different states, 250, 251.

rule in federal tribunals, 250.

between husband and wife, 253.

replenishing stock, 253.

separating stock, 253.

overcoming presumption, 255.

result of the cases, 252.

change of, must be continuous, 257.

temporary resumption of, 258.

concurrent, 259.

excusing want of change of possession, 261, 263.

change of possession of realty, 265.

possession with power of sale, 267.

after conveyance, 279.

declarations characterizing, 277-279.

by wife, presumption of ownership, 30 r.
POSSIBILITY of judgment will not sustain bill, 73.
POST-NUPTIAL marriage settlement, 307, 308.
See Husband and Wife.

upheld, if reasonable, 307.

presumed to be voluntary, 307.
POWER OF ATTORNEY, from wife to husband, 198.
POWER OF SALE, by mortgagor in mortgages, 347-359-

policy of the law considered, 347-359-
POWER, to reform assignment, 322^.
POWERS, when assets for creditors, 39, 39 >i, 40.

8 12 References] INDEX. fare to sections.

POWERS — continued.

English rule as to, 39, 39 //.

rule in Supreme Court, 39 //.

views of Hardwicke and Somers, 39.

rule the same both as to realty and personalty, 39.

cannot be transferred, 39 ti. '

statutory changes as to, 40.

judgment attaches to proceeds of, 40 n.

Pennsylvania rule, 368a.

New York policy as to, deplored, 40, 368^.

of alienation, restraints upon, 360-368.
PRACTICE, 71.

See Complaint; Answer; Complainants; Defendants.

in federal courts, 71.

equity practice prevails, 71.

following State rules, 71.
PRAYER OF COMPLAINT, 155.

mistake as to, not fatal, 155, 181.

inapt and incongruous prayers, 155.
PREFERENCE, IS LEGAL, 390, 391.

must represent actual debt, 391.

excessive, 341a.

to laborers, 341^.

notice to preferred creditors, 341^.

on eve of general assignment, 39 1#.

illegal composition, 3930.

attaching creditor, "3940.

of vigilant creditors, 392.

why rewarded, 392.

of claim in which assignor is partner, 329.

of special partner, disallowed, 329.

assignments to prevent, 341.

purpose of bankrupt act to defeat, 390 n.

theory of, 390.

secret, when avoided, 393, 394.

for wages, 392a.

by supplementary proceedings, 61.

when upheld, 11.

by agreement with corporation, 185.
PRE-EXISTING debt, as consideration, 209.
PREMIUMS, suit to recover, proofs, 23 n.

PRESUMPTION, that natural consequence of an act was con-
templated, 9, 10, 382.

References^ INDEX. [are to sections . Si;

PRESUMPTION — continued.

does not obtain that common law prevails in Russia, (.4 «.

against fraud, 5-7.

ride as to, 7.

of good faith, 5, 6.

of innocence, 5.

of fraud in equity, 60.

that assignee represents creditors, 1 \$.
PRESUMPTIONS, legal and natural, 7.

PRESUMPTIVELY FRAUDULENT, conveyances, 94, 248.
PRETENDED CREDITOR has no status, 91.
PREVALENCE of fraudulent transfers, 2.

the cause, 2.
PRIMA FACIE, cases of fraud, 243.

numerous illustrations, 243.

evidence of fraud, 247, 248.

true, answer, 159.

failure to change possession, 248, 250, 252.
PRIMARY JURISDICTION, in equity, 60.
PRINCIPAL, knowledge sufficient to charge, 198.
PROCEDURE in federal courts, 71.

at law and in equity, 51, 59, 60.
PROCESS, service of, creates lien, 61, 68, 392.
PROCRUSTEAN FORMULA, statutes not limited by, 22.
PRODUCTS, of land, may be reached, 24.
PROFESSIONS, of good faith, 279^.
PROFITS, devise of, is devise of lands, 262.

debtor cannot give away, 26.
PROMISES, of third parties available, 43.

doctrine of Lawrence v. Fox, 43.

the rule not universal, 43.

not recognized in Massachusetts, 43.

nor in England, 43.

theory of the rule, 43.

avoids circuity of action, 43.
PROMISSORY NOTES, may be reached, 24.
PROOF of moral turpitude, 8, 382.

not essential to avoid transfer, 8.

intent to defraud subsequent creditors, 98.

judgment or lien, 270.

of consideration, 209, 222.

mutuality of intent, 199.

See Intention — Evidence.

5 1 A References'} INDEX. [are to sections .

PROPER AND NECESSARY PARTIES, 68 n.

See Parties.
PROPERTY, susceptible of fraudulent alienation, 23-50.

the rule, 24, 25.

in name of third party, 57, 82.

of debtor, theory as to, n.

subject to immediate process, n.

value of, affecting question of fraud, 23, 41.

proving value of, 284.

substituted or mingled, 28.

of equitable character, 68 //.

stock exchange seat is, 35, 35 //.

trade mark, 36.

book royalty, 37.

patent right, ^&.

powers, 39, 40.

insurance, 23.

exempt property, 46, 49.

property not reached, 50^.
PROTECTION OF CREDITORS is the policy of the law, 1.
PROVING intent, 206.

circumstances, 281.

consideration, 219.

recitals as evidence, 220.

explaining recitals, 221.

value, 284.
PROVISIONAL RELIEF, injunction, receiver, arrest, 184-191,
(1.) Importance of prompt relief , 184.

forms of relief, 184.
(2.) Injunction as form of, 185, 186.

when allowed, 184, 185.

misconduct and insolvency, 184.

when disallowed, 186.

when issued against sale, 185.

against incumbrancing shares, 185.
(3.) Receiver in contest over real property, 187.

disinclination of the courts to appoint, 187.

why provisional relief is discouraged, 187.

no receiver in ejectment in New York, 187.
(4.) Receiver to collect alimony, 188.

practice in Wisconsin, 188.

may attack fraudulent transfers, 188.
(5.) Of various interests, 188.

References] INDEX. [are to sections. gjC

PROVISIONAL RELIEF — of various interests — continual.

allowed only in clear cases, 188.

to sell land, 188.

of stock exchange, 188.

removal of, 190.

title in death, 189.
(6.) Arrest of defendant, 191.

actual intent to defraud necessary, 191.
PUBLIC, fraud upon, not avoid conveyance, 107.
PUNISHMENT, power to inflict, abrogated, 2, 3, 3 n, 178.
PURCHASE PRICE, inadequacy of, 232.

offer to restore, 192.
PURCHASER, removing incumbrances, 126.

recovering in ejectment, 57.

bona fide, 369.

notice to, 369-389*2.

with notice from bona fide purchaser, 384.

mortgagee as, 371.

of chattel mortgage, 168.

subrogation to creditor's lien, 195.

at execution sale may attack deed, 37 ia.

pending suit, 389^7, 392.

See Notice; Bona Fide Purchaser.
PURPOSE of the inquiry, 3.

QUASI, public officer, assignee is, 316.
QUESTION FOR COURT, fraud in law, 9, 10, 382.

of equity, 51.
QUESTION FOR JURY, intent, 9, 204.

effect of badges of fraud, 226.

to weigh declarations, 276.

as to change of possession, 254.
QUI H^ERET IN L1TERA H^RET IN CORTICE, 20 n.
QUIA TIMET, bills, when maintainable, 59.

RATIFICATION, of assignment, 3.6 n.
of judgment and execution, 174.
REACHED, property that cannot be, 50, 50^7.
REAL PROPERTY, receiver of, 187.

change of possession of, 264.

possession evidence of title, 264.

the cases considered, 264.

land in foreign state, 15 ,a.

3 1 6 References] INDEX. [are to sections.

REAL PROPERTY — continued.

change of venue, 157*7.

receivers, title to, 116 //.

situs of, governs, 24.
REALTY AND PERSONALTY, declarations, 277.

as to issuance of execution, 87.
REASONABLE TIME, possession within, 256.
RECAPITULATION of creditors' remedies, 72.
RECEIVER, has no title to tort claims, 34.

when cannot represent creditor, 117.

no claim to exemptions, 46.

in supplementary proceedings, 61, 116.

as complainant, 116, 188.

bill by, 116.

power to appoint over national bank, 117.

recognition of, by comity, 118.

appointed before answer, 184.

when denied, 184.

directing transfer to, 187.

of various interests, 188.

only allowed in clear cases, 188.

of annuity, 188.

to sell and convey land, 188.

of a living, 188.

of a patent, 38.

of a stock exchange seat, 188.

in action to foreclose contract, 187 /;.

represents creditors, 116.

may disaffirm dealings of debtor, 116.

appointed for benefit of all parties, 188.

of corporation, rights of, 117.

when insolvency not ground for, 239 //.

judgment appointing, 170.

in contests over real property, 1S7.

title of, 117, 117 //.

title to realty, 116 //.

to collect alimony, 188.

of jewelry, 188.

title on death of, 189.

removal of receiver, 190.

entitled to notice, 190.

employment of debtor not ground of removal, 190.

References], INDEX. \are to sections. 8l7

RECEIVER — continued.

foreign, has no status, 118.

summary process not extended to, 116.

as defendant, 133.

reaching fund in hands of, 44.

when stockholder may sue, 73.

federal court not disturb State receiver, 117.

suing in place of, 73.
RECITALS, of consideration as evidence, 220.

of fictitious consideration, 228.

where fraud is present, 219.

of deed, avoiding transfer, 10, 322.

of complaint, 140-157.

of answer, 158-167.

in deed, 284a.

explaining, 221.

not binding on creditors, 221.
RECONVEYANCE cannot be enforced, 396.

theory of the law, 396.

when allowed, 399.
RECORD, of chattel mortgage, effect of, 347.

withholding instrument from, effect of, 101, 234 //, 235,

235 «> 236-

failure to record in fraud of bankrupt act, 237.
RECOVERING, improvements and rents, 26.

assets, 23-50.
RECOVERY, must conform to relief sought, 181.

must accord with complaint, 182.
REDEEMING mortgaged property, 4040.
REDEMPTION, recovering of mesne profits during period of, 26.

equity of, may be seized, 31.
REFEREE, judgment appointing irregular, 170.

assignee directed to account before, 316*:.
REFERENCE, when not ordered, 62a.

views of Gilbert, J., as to, 620.
REIMBURSEMENT, and subrogation, 192-195.

actual and constructive fraud, 192.

actual fraud defeats, 192.

constructive fraud does not defeat, 192, 194.

inequitable transactions set aside upon terms, 192.

when bill contains no offer of, 192.

when husband and wife are interested, 192.

outlay by creditor, 192.
I 52

8 1 8 References] INDEX. [are to sections .

REIMBURSEMENT — continued.

policy of the law, 192.
(1.) JVo reimbursement at law, 193.

transaction at law wholly valid or wholly void, 193.

constructive fraud, 194.

not so in equity, 192, 193.
(2.) Subrogation of purchaser to creditors lien, 195.

when permitted, 195.
RELATIONSHIP, effect of, 93, 242.

calculated to awaken suspicion, 242.

transaction will be closely scrutinized, 242.

influence of Salmon v. Bennett, 242.

not necessarily evidence of fraud, 242.

when coupled with other badges, 242.

as regards preferences, 390.
RELEASES exacted in assignments, 328.

regraded with disfavor, 328.

in what form permitted, 328.
RELIEF before and after sale, 58.

at law and in equity, 59, 60, 176 n.
RELINQUISHMENT of dower, consideration for settlement, 299.
REMAINDER, estates in, recoverable, 29.

man, is creditor, 90.
REMEDIES OF CREDITORS, 51-72.

See Creditors' Remedies.

two-fold object, 360.

governed by lex fori, 64.

forms of relief, 4, 51.

reference not ordered, 62a.
REMEDY at law, 59.

by suit in equity, 60.
REMOVAL, or dismissal of receiver, 190.

similar to jurisdiction dissolving injunction, 190.

employment of debtor no ground of, 190.

to federal courts, 71
RENEWAL CREDITOR, is existing creditor, 89.
RENTS, and profits recoverable, 26.

debtors cannot give away, 26.
REPAYMENT, of purchase price, 192.
REPELLING, inference of fraud, 250.
REPLEVIN, assignee may bring, 3160.
REPRESENTATIVES, as complainants, 112, 113.

bringing in as defendants, 132^.

References^ INDEX [are to sections.

REPRESENTATIVES - continued.

suits against, 136.
REPUGNANT CONDITIONS, void, 362, 363.

denned, 363 n.

theory of the law, 362.
REQUISITES of a fraudulent conveyance, 23.

characteristics and classes, 15.
RES ADJUDICATA, question of intent, when, 203.

judgment, when, 168.

conclusive in other forms of procedure, 169.
RESCUERS, judgment creditor's right against, 62.
RESERVATIONS, by debtor, creditors may reach, 32.

secret, effect of, 272.

avoid assignments, 326.

of exempt property, not fraudulent, 326.

of surplus, by assignor, 327.
RES GESTx'E, concerning, 276, 279.

importance of the rule, 276.

illustrations, 276.

must be concomitant with principal act, 279.

duty of the jury as to, 276.
RESTITUTION, reimbursement and subrogation, 192, 193, 195.
RESTRAINTS upon alienation, 14, 361.

by debtor in fraud of creditors, 14.

theory of the law, 361.

English and American cases, 361 n.

not favored, 362.

upon personalty, not allowed, 263 n.
RETURN of execution unsatisfied, 74, 86.

See Status of Attacking Creditors.

distinction between realty and personalty, 87.

raising the objection, 88.

chancery rule, 75.

of officer, conclusive, 74.
REVERSION, estates in, may be reached, 29.
REVOCATION, reserving power of, 358.
RHODE ISLAND, practice as to absconding debtors, 84.

as to change of possession, 250.

as to spendthrift trusts, 367a;.
RIGHT, to sue, transfer of, 92.

of creditors, existing and subsequent, 89, 97 n.

of creditors, protection of, 1.

of subrogation, not founded on contract, 195.

820 References] INDEX. [are to sections .

ROBINSON v. ELLIOTT, rule embraced in, 348.

discussed in later case, 348.

opposing rule and cases, 352, 353.
ROMANS, laws of, concerning insolvents, 1.
ROYALTIES on books, recoverable by creditors, 37.
RULE as to exempt property, 46.

fraudulent purchases of exemptions, 47.

covinous alienations of exemptions, 48.

conflicting cases, 49.

abandoned exemptions, 50.

of construction of statute of Elizabeth, 20.

same at law and in equity, 29.

of procedure in federal courts, 71, 407, 4070.

judgment in personal actions, 80.

of property, in federal courts, 20.

RUSSIA, no presumption that common law prevails in, 64 n.
SACRIFICE, transfer to prevent, 325.

to prevent surplus, 347.
SALARY, not reached in supplementary proceedings, 61 n.

exempt sixty days before proceedings, 61 n.

of municipal officer, exempt, 61 n.
SALE, possession with power of, 267.

doctrine of Robinson v. Elliott, 348-351.

relief before and after, 58.

judgment avoids, only as to creditors, 171, 395-401.

declarations before and after, 277, 278.
SALES UPON CREDIT, effect of, 240, 332, 333, 356.

hinder and delay creditors, 332, 333.
SCHEDULES, fraudulent omissions from, 320.

not evidence, 274.

unintentional omission, 320.
SCHEMES of fraud, future, 96.
SEATS in stock exchange are assets, 35.

the cases discussed, 35.

not liable to execution, 35 n.
SECRECY, evidence of, 234.
is badge of fraud, 234.

and concealment to be considered by jury, 234.
agreement to conceal not per se fraudulent, 234.
Mr. May's views as to, 234 n.
SECRET PREFERENCE, 393.

References^ INDEX. [are to sections. 821

SECRET PREFERENCE — continued.

when avoided, 393, 394.
SECRET TRUST, 234a, 272.

common form of fraudulent conveyance, 272.

policy of the law, 272.

apparent on face of deed, 272.

implied from extrinsic circumstances, 272.

as regards chattel mortgage, 356a.
SECURITY, more than necessary, effect, 241.

permitting conveyance to stand as, 141.

corrupted with fraud, no relief, 238.
SELECTING transfers to attack, 67.
SEPARATE estate of wife, free from husband, 304.
SEQUESTRATOR, when entitled to sue, 116.'
SERVICES by member of family, 218.

do not constitute valuable consideration, 218.
SET OFF, illustration of, 297^.

assignee takes property subject to, 319a.
SETTLEMENT, payable on bankruptcy, void, 364 ;/.

release of dower as basis of, 299.

See Marriage Settlement.
SEVERITY of Roman law, 1.
SHAM contrivance a fraud, 15.
SHERIFF, money in hands of, reached, t,^.

promise made to, available to creditor, 43 //.

as complainant, 81, 120.

what he must show against stranger, 297.
SHIFTING of burden, 271.
SHIP at sea, possession of, 256.

SILENCE, concealment of fraud by, not enough, 148, 148 ;/.
SIMPLE CREDITORS, cannot sue alienee in case, 62.

rights of, 73.

not entitled to injunction, 52.

rights of, 73.

remedies of, 73 n.

no bill by, in federal courts, 71.

cannot unite with judgment-creditors, 108.
SISTER, conveyance by, to brother, not fraudulent, 5.

preference to, dividend, 390.
SITUS, law of, governs in following real estate, 24.
SLANDER, claims for, cannot be reached, 34.
SLAVE, debtor sold as under early law, 1, 1 ".
SOLVENCY, evidence of, 95.

822 References^ INDEX. [are to sections.

SOLVENCY — continued.

the cases considered, 95.
SON, to father, sale by, 242.

father may work for, 218.

sale to by debtor, 11.

services by, 218 ;/.
SMALL VALUE, gifts of, not avoided, 41.
SOUTH CAROLINA, creditor's bill against absconding debtor, 84.

trust income, 367^.

change of possession, 250.
SPECIFIC LIEN, by attachment, 81.
SPECIFICATION, of ground for removal of receiver, 190.

of particulars of action, 162^.
SPECULATION, placing property beyond risk of, 100.

such conveyances avoided by subsequent creditors, 100.
SPECULATIVE INFERENCE, not evidence of fraud, 5.
SPENDTHRIFT TRUSTS, 360-368.

policy of the law concerning, 360.

protests against, 360, 365.

Nichols v. Eaton, reviewed, 364, 365.

spread of the doctrine, 367a.
(1.) Aversion to exemptions not statutory, 360.

purpose of the law, 360.

creditor's property a trust fund, 360.

Williams v. Thorn, 360.

wife's interest in trust income, '45.
(2.) Restraints upon alienations, 361, 362.

theory of the law, 361.

treated as void, 361.

repugnant conditions, 362.

illustrations, 362.
(3.) Nichols v. Eaton ; the point actually decided, 364.

the dictum, 365.

comments upon it, 365.

the correct rule, 366.
(4.) Broadway National Bank x. Adams, 367.

review of the case, 367.

doctrine dissented from, 367.

trend of the cases, 3670.
(5.) Spendthrift trusts in Pennsylvania, 368.

birth-place of the doctrine, 368.

dissent from it in that State, 368.
STAND by, doctrine of, 287.
STATE, may attack conveyance to defeat fines, 123 //.

References] INDEX. \_are to sections. g21

STATE COURT, proceeding on judgment in Federal court, 78.
STATUS OF ATTACKING CREDITORS, 73-78, 106.
(1.) Rights of creditors at large, 52, 73.

cannot assail assignments, 73.

must have a lien, 73.

protecting attachment lien, 73.

equity not a remedy to collect debts, 73.

judgment and execution essential, 73.

remedy at law must be pursued, 73.

judgment conclusive as to indebtedness, 74.

adjudication of debt, 74 n.

rule as to necessity for judgment ancient, 75.

creditor must have lien, 75.

existed in England, 75.

recognized in chancery, 75.

statute of limitations, 73.
(2.) Judgments sufficient, 76.

ordinary money judgment, 76.

judgment in chancery sufficient, 76.

justice's judgment, when docketed, 76.

confession of judgment, 76.

judgment on offer, 76.

demand classified by probate court, 76.

in equitable actions, 80.
(3.) Judgments insufficient, 77.

barred by statute, 77.

judgment not personal, 77.

justice's judgment, 77.

foreign judgment, 78.

must bind all property, 77.
(4.) Creditors of a decedent, 79.

must have judgment in New York, 79.

statutory change, 79.

rule otherwise in other States, 79.

reasons of the rule, 79.
(5.) Specific lien by attachment, 81.

the cases reviewed, 81.

New York cases, 81, 81 //.

lien by attachment insufficient, 81.
(6.) When judgment is unnecessary, 83.

no remedy at law, 83.

creditor under an injunction, S^.

controversy in the cases, 83.

absconding and non-resident debtors, 84.

824 References^ INDEX. \are to sections.

STATUS OF ATTACKING CREDITORS —where judgment is
unnecessary — continued.

exceptional practice in several States, 85.

cestui que trust, need not have, 127^.
(7.) As to execution, 86, 87.

return of execution unsatisfied, 86.

property in name of third party, 82.

distinction between realty and personalty, 87.

raising the objection, 88, 88«.
STATUTE, 13 Eliz., c. 5, 19.

basis of all legislation, 19.

its object, 11, 19.

to prevent fraudulent deeds, 19.

universally adopted, 19, 19 n.

prevails in District of Columbia, 19 ;;.

bottomed on immoral intention, 9 n.

its interpretation and construction, 20.

merely declaratory of common law, 16 n.

27 Eliz., c. 4, 21.

of limitations, begins to run when, 292.

of limitations, in equity, 293.

of frauds, 311.

controlling in Federal courts, 71.

2 Rich. II, 18.
its purpose, 18.

3 Hen. VII, c. 4, 18.
50 Edw. Ill, c. 6, 18.

foreign statutes, effect of, 405 n.
STATUTE OF FRAUDS, debtor not bound to plead, 215.

contract to convey land within, 293a.

agreement outside of, 296.
STATUTES OF ELIZABETH, declaratory of common law, 16.
STATUTES OF LIMITATIONS, 292.

rule in New York, 73.

in equity, 293.
STATUTORY EXEMPTIONS, 46-50.

aversion to exemptions not statutory, 360.

covinous alienations of, 48.

conflicting cases, 49.

abandoned, 50.
STATUTORY liability of stockholders, 139.

STATUTORY PROCEEDINGS, changes as to executors and
administrators, 112.

References] INDEX.- [are to sections. 82 5

STEARNS v. GAGE, rule in, 375.
STOCK EXCHANGES, seats in, are property, 35.
may be reached by creditor, 35.
seats not liable to execution, 35 n.
character of, discussed, 35.
STOCKHOLDERS, as defendants, 119, 139.
when creditors may sue, 119.
statutory liability of, rests in contract, 139.
may be sued in foreign court, 139.
when not entitled to sue, 73.
suit when receiver is defendant, 73.
suit by, 109.
joining, 128.
STOCKS may be reached, 24.

lis pendens does not apply, 157.
STORY, J., constructive fraud denned by, 323.
STUDIED FORMALITY, will not save transaction, 241.
SUBROGATION, of surety, in.

of purchaser to creditor's lien, 195.
the rule in New York, 195.
r and reimbursement, 192, 193, 195.
of subsequent creditors, 103.
not founded on contract, 195.
no protection of fraudulent party, 195.

See Reimbursement and Subrogation.
SUBSEQUENT ACTS, to prove original purpose, 227.
SUBSEQUENT CREDITORS, 96-106.

See Existing Creditors.
(1.) Fraud upon subsequent creditors, 96, 96 n, 97 n, 141.
the practical distinction, 96.
the cases considered, 96-106.
intent to defraud, 96, 97, 202.
question for the jury, 96 n.
rights of, considered, 97, 97 n.
statute of Elizabeth did not mention, 98.
(2.) Intent as affecting, 96, 202.

must be directly shown, 98.
may be inferred, 98.

no difference between existing and subsequent, 98.
alleging fraud on, 141.
(3.) Placing property beyond risk of ventures or speculations, 100, 101.
theory of the law, 96, 97, 100, 101.
rule restated, 100 n.

826 References] INDEX. [are to sections.

SUBSEQUENT CREDITORS —placing property beyond risk of
ventures or speculations. — continued.

conveyances avoided, 101.

failure to record, 101.

transfers sutained, 102.
(4.) Mixed claims, 104, 105.

subsequent creditors sharing with antecedent creditors, 104.

accruing prior and subsequent, 104.

subrogation of subsequent creditors, 103.
(5.) With notice, 106.

constructive notice not sufficient, 106.

cannot generally avoid alienation, 106.
SUBSEQUENT PURCHASERS, attacking fraudulent convey-
ance, 21, 107.
SUBSTANTIAL FACTS, to prove fraud, 5.
SUBSTITUTED PROPERTY, rule as to, 28.

goods, lien extended to, 385.
SUFFICIENT CONSIDERATION, 222.

not sufficient, 223.

judgment to sustain bill, 76.
SUING on behalf of others, 109. y

SUIT IN EQUITY, 51, 60.

advantages of, 60.
SUPPLEMENTARY PROCEEDINGS, nature of, 61, 61 n, 64.

remedy of, 61, 61 n.

a special proceeding in New York, 61, 116 n.

substitute for creditors' bills, 61, 61 n.

commencement of, confers lien, 61.

lien of, how defeated, 61.

lien, effect of death, 61 ;;.

what can be reached, 61, 64.

not exclusive, 61.

judgment to sustain, 76.

judgment must bind all property, 77.

creditors may abandon, 61.

claims of third party, 61.

must be based on judgment in personam, 61, 76.

receiver appointed in, 63, 188.

receiver represents creditors, 61.

title of receiver, 116, 116 n.

interests reached by, 61.

may be brought in federal courts, 61 n.

when not in State courts, 61 n.

References^ INDEX. \are to sections. X 1 J

SUPPLEMENTARY PROCEEDINGS — continued.

salary and earnings, 61 n.
SUPPORT, of debtor in early times, i ;/.

as consideration for transfer, 211.

attacking transfer to defeat, 122.

claim of wife to, 299a.
SUPPRESSION or concealment, subsequent fraud, 235.

of deed or mortgage, 235, 235 n.

in fraud of bankrupt act, 237.
SUPREME COURT, follows State rule, 71.

rule of property in, 20.

appeals to, 407, 407^.

certificate of division, 407a.

opinion about chattel mortgages, 348, 353.
SURETY, as creditor, 90, in.

on guardian's bond, 90 ;/.

procedure by, 111 n.

assumption by as consideration, 209.

claim against misjoinder, 135.

on appeal bond, 111.

entitled to subrogation, in.

as simple creditor, in.
SURPLUS, income may be reached, 45, 360.

theory of the law, 45.

creditor's lien on, 45.

moneys reached, 63.
SURROGATE, cannot determine as to fraudulent transfer, 12 //.
SUSPICION, insufficient to establish fraud, 5, 228.

tangible facts must be shown, 283.

evidence must convince the understanding, 283.
SWORN ANSWER, taken as true when, 160.
SYMPATHY, with fraudulent debtors, 5.

TALENTS of debtor, creditor cannot command, 500.
TANGIBLE FACTS, to establish fraud, 5.

suspicions insufficient, 5, 6, 283.
TANGIBLE PROPERTY may be reached, 23.
TEMPORARY resumption of possession, 258.

when does not render sale fraudulent, 258.

opposing illustration, 258.

improvements, 26.
TEMPTATION of debtors to commit fraud, 2.
TENANT IN FEE, condition not to alien, void, 362.

82o References], INDEX. \ are to sections.

TENNESSEE, spendthrift trusts, 367^.
TERRITORIAL jurisdiction, change of venue, 157a.
TESTIFYING as to intent, 205.

as to value, 284.

See Evidence.
TESTIMONY must conform to pleading, 285.

to overcome answer, 160.

as to intent, 205.

as to matters not in issue, excluded, 285.
TESTS, of fraudulent conveyances, 15, 15a.
TEXAS, joinder of claims, 85.

change of possession, 250.
THIRD PARTY, reaching property purchased in name of, 57, 82.

is it liable to execution, 57.

may be attached, 57.

consideration paid by debtor for, 57, 57 n.

enforcing promises of, 43.

doctrine of Lawrence v. Fox, 43.

conflict in the cases, 43.

promise to sheriff available to creditor, 43 n.

claiming property in supplementary proceedings, 61.
THREATENING to make assignment, 342.

not considered a ground of attachment, 342.

conflict in the cases, 342.

the safer rule, 342.
TITLE, on death of receiver, 189.

possession as evidence of, 245.

from fraudulent vendee, 386.

of personal representatives, 112 ,113.

of assignee in bankruptcy, 114.

of general assignee, 115.

of receiver, 116, 116 //.

of receiver of corporation, 117, 117 n.

judgment transferring, 172.

equity cannot create, 60 n.
TORT CLAIMS, cannot be reached, 34.

creditor, 123.

not transferred by assignment, 3160.
TORT, to property, is assignable, 34.

claimant is a creditor, 90, 123.

creditor as complainant, 123.

illustrations of rights of, 123.

References] INDEX. [are to sections. g2Q

TRACING, THE FUND, 44.

misapplied money, 44, 44 n.

following insurance money, 44.

goods in hands of sheriff, 44.

may be followed into any property, 44.
TRADE-MARKS, are assets, 36.

pass to assignee as property, 36.

under bankrupt law, 36.

personal, rule as to, 36.
TRANSACTIONS, palpably fraudulent, 10.

presumed to be honest, 5.

motives of, 7.

fraud must be inception of, 227.

with deceased, testimony concerning, 121.

between husband and wife, 300.

proof of, in separate instrument, 6.
TRANSFER pending suit, effect of, 22, 233.

is mark of fraud, 233.

of right to sue, 92.

to prevent sacrifice, 325.

of property by assignment, 316a.
TRANSFERS inuring as assignments, 339.

presumptively fraudulent, 248.
TRESPASS, judgment-creditor in, as complainant, 123.
TRIAL, framing issues for, 51, 51 /;.

TRICK AND CONTRIVANCE to defraud creditors, 15.
TRIVIAL VALUE, property which is of, 23, 41.

not fraudulent to assign, 23.
TRUST, for debtor's benefit avoids conveyance, 10.

spendthrift, 360-368.

See Spendthrift Trusts.

for indefinite period, fraudulent, 11.

decree declaring binds creditors, 45 n.

fraud apparelled and clad with, 22.

enforcement of, without judgment, 84.

property in name of third party, 57, 57 n.

essential to create assignment, 316, 316 n.

matter of equity jurisdiction, 56.
TRUST FUND, creditor's property considered as, 360.

capital of corporation is, 117.
TRUST INCOME available to creditors, 45, 360.

above, what is needed for support, 45.

Williams v. Thorn considered, 45.

8^0 References] INDEX. \are to sections.

TRUST INCOME — continued.

interest of wife in, 45.
TRUST PROPERTY, does not pass by assignment, 316^.
TRUSTEE, and cestui que trust as defendants, 137.

when may sell on credit, ^^ "■

fraudulent grantee as, 385.

ex maleficio, 300.
TURPITUDE, need not be shown, 8.

tendency of the cases, 8.
TWELVE TABLES, law as to insolvents, 1 n.
TWYNE'S CASE, stated and discussed, 22.

decided in 1601, 22.

its great importance, 22.

restated in Supreme Court, 22 //. j^

1
badges of fraud in, 22, 231.

rule as to change of possession in, 245.

its limited scope, 22.

growth of the law since, 22.

effect of secrecy as shown by, 22.

generality of gift, 22.

construed, use by vendor, 22.

expression of honesty in deed, 22.

rule in New York, 93.

in England, 93.

UNCERTAINTY IN PLEADING, reached by motion, 140 n,
UNDISCLOSED INTENT, evidence of inadmissible, 205 ;/.
UNDUE INFLUENCE, 13 ;/.

not defined by the courts, 13 ;/.
UNFINISHED WORK, finishing up by assignee, 330, 331, 331 ;/.
UNILATERAL evil intent will not overturn transaction, 207.
UNITED STATES courts, practice in, 71.

judgment in, 78, 78 n.

local rule governs in, 20.

not interfere with State receiver, 117.
UNITED STATES SUPREME COURT, appeal to, 407.

certificate of division, 407^.
UNITING causes of action, 55.

joinder of claims, 54.

various illustrations, 55.

ejectment and equitable relief, 55.

complainants, 107.

defendants, 132.

References^ INDEX. [are to sections. %"1\

UNNECESSARY, judgment when, 83.

UNPAID SUBSCRIPTIONS, joinder of stockholders, 128.

trust fund, 117.
UNREASONABLE inadequacy of price, 209.

evidence of secret trust, 209.
UNRECORDED DEED or mortgage, 235, 235 n.

concealment in fraud of bankrupt act, 237.
UNREPRESENTED PARTIES, no judgment in favor of, 173.
UNSATISFIED EXECUTION, return of, 86, 86 //.

distinction between realty and personalty, 87.

when excused, 75.
UNUSUAL ACTS and transactions, 241.

constitute badges of fraud, 241.

various illustrations, 241.
USURY, claims not joined, 132 n.

debt, providing for, 286.

VALID or void at law, 51.

different rule in equity, 51.

title from fraudulent vendee, 386.

between the parties, fraudulent conveyances, 395-400.
VALUABLE CONSIDERATION, 207-223.
See Consideration.

what is, 209.

what may consist of, 209.
VALUE, as affecting fraudulent transfer, 23.
See Consideration.

property heavily encumbered, 23.

an important element, 23.

consideration anything of, 207.

former rule in New York, 23 //.

change of rule as to, 23 //.

Pennsylvania cases, as to, 23 n.

gifts of small value not fraudulent, 41.

proving it by experts, 284.

recovering judgment for, 177, 178, 178 n.

judgment cannot exceed, 3 n, 177, 178.
VARIANCE, rule as to, 155.

testimony must conform, 285.

judgment must be for relief demanded, 181.

must accord with complaint, 182.
VENDOR, recision for fraud, 53.

relief to, 399.

832 References^ INDEX. \ are to sections.

VENDOR — continued.

evidence of insolvency of, 273.

possession, 245-267.

change sufficient, 255-258.

resumption, 258.
VENDEE, insolvency of, 274.

fraudulent, may create valid lien, 195.

judgment against, 192, 177, 180.

evidence of, 274.

title from fraudulent, 386.

allowance to fraudulent, 176.

extent of protection to, 207.

change of possession, 253.

marking with vendee's name, 253.

declarations in presence of, 278.

proof of ability to pay, 219.

power to confer preferences, 241.

testifying as to intent, 279^.
VENTURES, placing property beyond new, 100.
VENUE, change of, 157a.

land in foreign country, 157^.
VERDICTS, contradictory, 183.

when set aside, 204.

when given under misapprehension, 304.
VERIFICATION of pleading, 155, 167.

waiver of, 167.

defendant may verify, 167.
VERMONT, spendthrift trusts in, 367*7.

change of possession, 249.
VESSEL AT SEA, delivery of, 262.

VICTORIA, statute of as to voluntary conveyances, 93.
VIGILANT CREDITORS, entitled to preference, 392.

no preference in estate of decedent, 392.
VIRGINIA, creditor's bill against absconding debtor, 84.

trust income, 367a.

as to change of possession, 250.
VOID, assignment, purchase under, 322^.

word construed, 317.
VOID AND VOIDABLE ACT, as to fraudulent conveyances,

73, 317-
Chief Justice Shaw's view, 317.
VOIDABLE ACTS, " void " means "voidable," in act of Eliza-
beth, 31.7.

References^ INDEX. [are to sections. 833

VOID CONDITIONS, 361.
VOID IN PART, void in toto, 194.

when valid provisions upheld, 194.

illustrations of the rule, 194.

the word construed, 317.
VOLUNTARY CONVEYANCES, as to existing creditors, 92.

to relatives, 242.

confusion in the cases, 93.

rule in New York, 93, 208.

in California, 208.

statute 56 and 57 Victoria, 93.

assignment for benefit of creditors, 316.

only presumptively fraudulent, 94, 208.

intent as affecting, 200, 208, 319.

the cases as to intent affecting, 200.

need not be mutual, 200.

assignments, 316.

See Fraudulent General Assignments.

defined, 208.

what is consideration, 209.

by corporation, 119.
VOLUNTEER, from fraudulent grantee, 201.

WAGES, preference in New York, 392^.
WAIVER of verification, 167.

amendment of 41st rule, 167 n.

defendant may verify answer, 167.

of defect of parties, 133.
WARRANTOR as creditor, 89.
WEST VIRGINIA, general creditor may sue, 73 n.

as to change of possession, 250.
WHAT CANNOT BE REACHED, 50a.
WHITE v. COTZHAUSEN, and conflicting cases, 339*7.
WHOLE ESTATE, conveyance of, 231.
WIDOW, as complainant, 121.

dower of, 30, 33, 61, 70, 299.

when cannot sue in chancery, 121.

when not entitled to annul transfer, 121.
WIFE, assignment of policy by, 23, 298-315.
See Husband and Wife.

right to life insurance, 23, 23 n.

crops on land of, 27.

fraud upon, form of procedure, 70.
53

834 References^ INDEX. [are to sections.

WIFE — continued.

as creditor, 90, 122.

when claim should be rejected, 300 ?i.

services by, to husband, 218.

husband may act as agent for, 303.

husband need not work for in separate business, 218.

proof of fraud against, 212.

advances by, defense, 222.

separate property of, 304.

transfers affecting dower, 315.

money judgment against, 180.

judgment where husband's interest is reached, 192.

interest in trust income, 45.

enforcing alimony, 45.

status of, against husband, 45.

surplus income of, 45 n.

when injunction not granted to, 52.

wife as creditor, no n.

knowledge imputed to, 198 n

claim to support, 299^.
WILL, no right of creditors to oppose, 127.
WILLIAMS v. THORN, its doctrine approved, 46, 360.
WISCONSIN, right of personal representatives, 112.

insufficiency of estate, how determined, 112.

change of possession, 250.

trust income, 367*7.
WITNESS, competency of party as, 269.

competency of wife as, 313.

party as, 281.

cross-examination of, 281.

to overcome answer, 159.
WORD " disposed " construed, 12.

" fraud," use of in pleading, 141.
WORDS " hinder, delay, or defraud," 11.

discussed, 11.

intent to do either sufficient, n.

not synonymous, 11.
WRITTEN INSTRUMENT, difficulty of proving fraudulent, 6.
WRONG, suspicion of, not sufficient to maintain suit, 5.
WRONGFUL EFFECT, must accompany wrongful purpose, 107.

Whole Number of Pages, 904.

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