The Law and Practice in Bankruptcy

cases of fraudulent conveyances, that is to say, voluntary conveyances without a valuable consideration, which are rendered void as against creditors, by the stats. 13 El. c. 5, and 27 El. c. 4 (p); and all grants and conveyances which a court of equity would declare fraudulent (q); as well as all cases which either appear from the facts themselves to be, or from the conclusion of law arising from these facts would be deemed to be, fraudulent as against third parties, however fair they might be as between the parties themselves (r).

Again, the words in the above statute of James are, any fraudulent conveyance," which has been always deemed to mean, a conveyance by deed only (s); and the deed must have been complete and valid; therefore such a deed not properly stamped (t), or not executed by a party who must have joined in it, in order to render it complete and effective (u), would not have been an act of bankruptcy.

In Pulling v. Tucker (x), however, it was held that a conveyance of the above description was an act of bankruptcy, although after executing it the bankrupt retained it in his possession, and continued to carry on his trade for three years afterwards, before a commission issued.

But in the present statute the words are, any grant or conveyance of lands, goods," &c.; and a grant of goods, however untechnical it may sound, may possibly be construed to mean any assignment of goods by deed or otherwise. However, the matter is put beyond doubt, by a subsequent part of the statute, namely, that which is here inserted as the 12th act of bankruptcy (post, p. 57). Again, the words of the statute of James are, any fraudulent conveyance of his lands, tenements, goods, or chattels." This has been construed to include all conveyances by a trader of the entire of his property, whether for a past consideration, as, for instance, to a creditor for debt already incurred (y), or for a present consideration, as, for instance, to indemnify a surety, or to secure a person about to advance money to him (z), or without consideration (vide supra); and whether the grantor afterwards retained possession of the property or not (a); and this, although the conveyance were made even three or more years before the docket were struck (b).

(p) Hassells v. Simpson, 1 Doug. 88: and see Whitwell v. Thompson, 1 Esp. 68.

(q) Jacob v. Sheppard, 1 Burr. 471: Unwin v. Oliver, 481.

(r) Worsley v. Demattos, 1 Burr. 467, 474. And see, under this head, passim.

(8) Martin v. Pewtress, 4 Burr. 2478, 80, 82: Rust v. Cooper, Cowp. 633, 635: 1 Doug. 87, cit.: Alderson v. Temple, 4 Burr. 2235: Harman v. Fisher, Cowp. 117: Manton v. Moore, 7 T. R. 71: Jolly v. Walle, 3 Esp. 228.

(t) See Whitwell v. Dimsdale, Peake, N. P. C. 168.

(u) See Dutton v. Morrison, 17 Ves.

193: Antram v. Chase, 15 East, 212: Beech v. Gooch, 1 Holt, 15.

(x) 4 B. & A. 382.

(y) Newton v. Chantler, 7 East, 138: Wilson v. Day, 2 Burr. 827: Hooper v. Smith, 1 W. Bl. 441: Siebert v. Spooner, 1 M. & W. 714.

(2) Worsley v. Demattos, 1 Burr. 467: Butcher v. Easto, 1 Doug. 295: Hassells v. Simpson, 1 Doug. 88, n.; Cook, 104: Hoffman v. Pitt, 5 Esp. 80.

(a) Worsley v. Demattos, 1 Burr. 467: Wilson v. Day, 2 Burr. 827: Butcher v. Easto, 1 Doug. 295.

(b) Pulling v. Tucker, 4 B. & A. 382: Law v. Skinner, 2 W. Bl. 996: Hasseils v. Simpson, 1 Doug. 89, n.

And the same where the conveyance contained a colourable exception of a comparatively small part of the property (c).

So, if a trader make a conveyance of all his property to trustees, in trust for all his creditors (d); and although the trader did not in fact intend to delay or defeat his creditors, yet such being the necessary consequence of an assignment of all his property, the law will presume that to have been his intention (e). This was an act of bankruptcy under the above statute of James, but could be set up as an act of bankruptcy only by those who had not signed the composition deed (f). And the same as to a conveyance by a trader in trust for his creditors, excepting one or more therein specified (g); and though it contain a proviso to be void if all the creditors should not sign (h), or to be void if the trustee think fit to avoid it (i), and although the assignment was made for the purpose of making an act of bankruptcy (k), and although the deed is not executed by the trustee or any of the creditors, and is not further acted upon (1). But if the assignment purports to be by partners jointly, and one partner does not execute, it is not an act of bankruptcy (m). And a sale to a bonâ fide purchaser of the whole of a trader's stock in trade, is not an act of bankruptcy, although the intention of the trader is to abscond with the purchase money (n); and the party who seeks to avail himself of the sale as an act of bankruptcy, must shew some facts from which fraud may be inferred (o). So also, where a trader conveyed all his property to a canal company upon their advancing money to pay all his debts, it was holden not to be an act of bankruptcy, as a fraudulent conveyance (p).

A conveyance by a trader of a part only of his property, if it were made in contemplation of bankruptcy, would be an act of bankruptcy (9); otherwise not, if the conveyance were bonâ fide and without fraud (r).

And lastly, the conveyance, to come within the meaning of the statute of James, must have been by the bankrupt (s), to some

(d) Tappenden v. Burgess, 4 Fast. 230: Dutton v. Morrison, 17 Ves. 193: Kettle v. Hammond, Cooke, 106; Bull. N. P. 40: Harman v. Fisher, Cowp. 123: Er p. Scudamore, 3 Ves. 84: Newton v. Chantler, 7 Fast, 138: Buck v. Gooch, 4 Camp. 232: Joly v. Wallis, 3 Esp. 229: Alderson v. Temple, 4 Burr. 2240.

(e) Stewart v. Moody, 1 Scott, 777.

(f) Eckhardt v. Wilson, 8 T. R. 140: Jackson v. Irvine, 2 Camp. 49: Bamford v. Baron, 2 T. R. 594, n.: Er p. Shaw, 1 Madd. 598: Er p. Kilner, Buck. 104: and see Doe v. Anderson, 5 M. & S. 162.

(g) Pulling v. Tucker, 4 B. & A. 382: Gayner's case, 1 Burr. 477, cit.: Butcher v. Easto, 1 Doug. 294: and see 2 Cowp. 633.

(h) Dutton v. Morrison, 17 Ves. 191.

(i) Tappenden v. Burgess, 4 East, 230.

(k) Simpson v. Sykes, 6 M. & S. 295. (1) Botcherly v. Lancaster, 3 N. & Man. 383; 1 Ad. & E. 77.

(m) Dutton v. Morrison, 17 Ves. 193. (n) Barter v. Pritchard, 3 N. & Man. 638; 1 Ad. & E. 456.

(0) Rose v. Haycock, 3 N. & Man. 644; 1 Ad. & E. 460.

(p) Manton v. Moore, 7 T. R. 67.

(q) Linton v. Bartlett, 3 Wils. 47: Devon v. Watts, 1 Doug. 86: Round v. Byde, Cooke, 110: Whitwell v. Thompson, 1 Esp. 68: Morgan v. Horseman, 3 Taunt. 241: Shaw v. Jakeman, 4 East, 201: and see Law v. Skinner, 2 Bl. 996.

(r) Jacob v. Sheppard, 1 Burr. 478: Unwin v. Oliver, 1 Burr. 481: Wheelwright v. Jackson, 5 Taunt. 109: Manton v. Moore, 7 T. R 67.

68.

(8) See Whitwell v. Thompson, 1 Fsp.

creditor or other person. Where a trader secretly carried his goods out of his house, to prevent their being taken in execution, it was holden not to be an act of bankruptcy (t). So a mere sale of property, or exchange of it for other property, would not be an act of bankruptcy (u).

But under the present statute, not only a conveyance of all the bankrupt's property, even in trust for creditors, or a conveyance of part in contemplation of bankruptcy (x) are acts of bankruptcy, as upon the above statute of James, but also all other grants or conveyances of any part of his property, if made with intent to defeat or delay the creditors in the recovery of their debts (see post, p. 58); but a conveyance of part of the property of a trader in trust to sell and dispose of the property as he shall direct, is not an act of bankruptcy (y). Where a trader, after having committed acts of bankruptcy, conveyed his freehold and leasehold estates upon trust for sale or mortgage, and to apply the proceeds as he should direct, and it appeared that the purpose of the trust was a conversion of the property with a view to an arrangement with the creditors, to which, on account of his health, he was personally incompetent, the trust deed was held not to be an act of bankruptcy (z). And where a soap manufacturer, being indebted to his bankers, assigned to them his leasehold premises, with all his stock in trade, utensils, and effects therein, and also a policy of assurance as a security for monies advanced or to be advanced, with a power of sale, and a proviso that the trader should retain possession until default, but the assignment did not include all the trader's property, it was held that the deed, being made bonâ fide, was not an act of bankruptcy (a); so also, where two traders in partnership, being in a state of insolvency, entered into a composition deed to pay 4s. 6d. in the pound by instalments, the creditors agreeing to release them upon payment of the last instalment, and the traders retained possession of their stock in trade, and by the same deed one of the partners, as a security for payment of the residue of the debt, assigned a policy of assurance upon his life, the entire of his separate property, this was held not to be a fraudulent conveyance, so as to constitute an act of bankruptcy (b); but if the property conveyed away by a trader is to such an extent as to prevent his continuing his business, and render him insolvent, it is an act of bankruptcy; and it is on the part of those who rely on the fact as an act of bankruptcy, to shew that the act would have that effect (c).

It is doubted if the assignment of book-debts (d), or of policies

(t) Cole v. Davies, 1 Lord Raym. 725.

(u) Whitwell v. Thompson, 1 Esp. 68 and see Rust v. Cooper, Cowp. 629: Martin v. Pewtress, 4 Burr. 2478: and see Berney v. Davison, 4 Moore, 127: Berney v. Vyner, 4 Moore, 322.

(x) Gibbons v. Phillips, 7 B. & C. 529.

(y) Robinson v. Carrington, 1 Mon. & A. 1.

(z) Greenwood v. Churchill, 1 M. & K. 546.

(a) Carr v. Burdiss, 1 C., M. & R. 443.

(b) Abbot v. Burbage, 2 Scott, 656; 2 Bing. N. C. 444.

(d) 1 Mont B. L. 31, n: but see Er p. Richardson, 14 Ves. 186.

of insurance on the trader's life (e), can amount to an act of bankruptcy.

Under this act, and formerly under the statute of James, it should seem necessary, in order to render a conveyance of property an act of bankruptcy, that it must have been a voluntary, and not a compulsory conveyance (f). So, where the bankrupt gave security upon his property to a creditor, under apprehension, although groundless, of legal process (g), or upon the pressing importunity of the creditor (h), it was held valid. But where the deed was executed manifestly in contemplation of bankruptcy, it was held to be fraudulent and an act of bankruptcy, notwithstanding the fact of the trader's being under arrest at the suit of his creditor (i), or being urged by the importunity of a creditor (k), or being under the influence of the fear of legal process at the suit of the creditor (1), at the time of the conveyance (m).

Lastly, by 6 Geo. 4, c. 16, s. 4, where any such trader shall, after this act shall have come into effect, execute any conveyance or assignment, by deed, to a trustee or trustees, of all his estate and effects, for the benefit of all the creditors of such trader, the execution of such deed shall not be deemed an act of bankruptcy unless a commission issue against such trader within six calendar months from the execution thereof by such trader; provided that such deed shall be executed by every such trustee within fifteen days after the execution thereof by the said trader, and that the execution by such trader and by every such trustee be attested by an attorney or solicitor, and that notice be given within two months after the execution thereof, by such trader, in case such trader reside in London, or within forty miles thereof, in the London Gazette, and also in two London daily newspapers; and in case such trader does not reside within forty miles of London, then in the London Gazette, and also in one London daily newspaper, and one provincial newspaper published near to such trader's residence; and such notice shall contain the date and execution of such deed, and the name and place of abode respectively of every such trustee, and of such attorney or solicitor.

11. Or make or cause to be made any fraudulent surrender of any of his copyhold lands or tenements.] This was formerly bolden not to be an act of bankruptcy; because, as it was said, it could not be done with intent to defeat or delay creditors, inasmuch as creditors could not have execution of copyhold lands (n).

12. Or make or cause to be made any fraudulent gift, delivery,

(e) Grogan v. Cooke, 2 B. & P. 230. (f) See Crosby v. Crouch, 2 Camp. 166; 11 East, 256; and see Cooke, 102.

(g) Thompson v. Freeman, 1 T. R. 155.

(h) Ex p. Scudamore, 3 Ves. 85: Ar. bouin v. Hanbury, 1 Holt, N. P. 575. (i) Newton v. Chantler, 7 East, 138.

(k) Morgan v. Horseman, 3 Taunt. 241: Singleton v. Butler, 1 B. & P. 283.

(1) Butcher v. Easto, Doug. 295: Thornton v. Hargreaves, 7 East, 549. (m) And see De Tastett v. Carroll, 1 Stark. 88.

(n) Ex p. Cockshott, 2 Bro. 502.

or transfer of any of his goods or chattels.] This includes mere manual delivery or transfer, as well as conveyances by deed or otherwise, the former of which was not provided for by the repealed statutes (see ante, p. 53). In other respects this clause requires the same construction as the 10th act of bankruptcy, (ante, p. 53), and must be done in contemplation of bankruptcy (o). A bill of exchange is a chattel within the meaning of this section, and the fraudulent delivery or transfer of which will constitute an act of bankruptcy (p).

Every such trader doing, suffering, procuring, executing, permitting, making or causing to be made, any of the acts, deeds, or matters aforesaid, with intent to defeat or delay his creditors, shall be deemed to have thereby committed an act of bankruptcy.] So that every act of bankruptcy, hereinbefore described, consists, first, of the act itself; and, secondly, of the intention with which it was committed. Of the acts themselves, we have already treated: we shall now make a few observations on the intention with which they must be committed, in order to render them acts of bankruptcy, premising merely, that if the intention to defeat or delay the creditors actually existed at the time the act was committed, it is little matter whether a creditor was thereby defeated or delayed or not (q).

As to the intent: this can be evidenced only by the trader's acts or admissions. If a man admit that he committed the act with the intent of defeating or delaying his creditors in the recovery of their debts, it is almost conclusive evidence of it, and can scarcely be explained away (r); anything said or written by the bankrupt before his bankruptcy, tending to shew the intent of an act equivocal in itself, is admissible (s). So, if the act be accompanied by circumstances from which the intent may fairly be presumed, it will be sufficient: and where a trader wrote to his son at his manufactory that he was unable to meet his engagements with his creditors, and requested to be denied to any that might call, and shortly after left the house, and was absent from his home and place of business the whole of that and the next day, and such absence unaccounted for; this was held to be an act of bankruptcy (t). If a creditor be in fact delayed by the act, this of itself is no evidence of the trader's intention in committing it (u); but if the necessary consequence of the act be, that his creditors must be thereby defeated or delayed, this is presumptive evidence of his intention to defeat or delay them (x), even although it appear that he had other v. Ramsbottom, 2 D. & R 142; 1 B. & C. 55.

(0) Fidgeon v. Sharpe, 1 Marsh. 196; 5 Taunt. 539: Wheelwright v. Jackson, 5 Taunt. 109.

(p) Cumming v. Bailey, 6 Bing. 363. (q) Robertson v. Liddle, 9 East, 487: Wydown's case, 14 Ves. 86: Chenoweth v. Hay, 1 M. & S. 676: Aldridge v. Ireland, 1 Taunt. 273: Colkett v. Freeman, 2 T. R. 59: Er p. White, 3 Ves. & B. 128: Er p. Harris, 2 Rose, 27: Bayley v. Schofield, 1 M. & S. 338: Hammond v. Hincks, 5 Esp. 139: Williams v. Nunn, 1 Taunt. 270: and see Harvey

(r) See Rawson v. Hay, 2 Bing. 99. (8) Smith v. Cramer, 1 Scott, 541: Scott v. Thomas, 6 Car. & P. 611.

(t) Johnston v. Woolf, 2 Scott, 372. (u) Ex p. Osborne, 2 Ves. & B. 177: Fowler v. Padget, 7 T. R. 509.

(a) Ramsbottom v. Lewis, 1 Camp. 279: Holroyd v. Whitehead, 3 Camp. 530: Er p. Kilner, 2 Dea. 325; 3 Mon. & A. 722.

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The Law and Practice in Bankruptcy: As Founded on the Recent Statutes