as B. might advance, with a covenant that on failure in the performance of the conditions, B. should take possession of the effects; the conveyance was holden to be fraudulent, and an act of bankruptcy, although the transaction, as between the parties, was fair and for a good and valuable consideration; 1st, on the ground of A.'s remaining in possession (8) after the execution of the deed, and thereby obtaining a false credit; and 2ndly, on the ground of an undue preference having been given by the deed to B. contrary to the spirit of the bankrupt laws, which anxiously provide for an equal distribution of the estate of the bankrupt among all his creditors (9). So where a trader, being in distressed circumstances, executed a deed of assignment of all his estate to one of his creditors, purporting to be a security for an unliquidated sum, without delivering any kind of possession, except giving a letter of attorney to his own clerk (who had before this transaction managed his affairs,) to collect debts, &c. the assignment was holden fraudulent on the ground of undue preference, and there not being any alteration of possession (10). A trader finding his circumstances on the declinem, executed at midnight a bill of sale of all his goods (with the exception of a few articles to the amount of about 1007.) to some favourite creditors, in trust to pay them their full debts, leaving other debts to the amount of 9001. unprovided for, and absconded the next morning; the deed was holden fraudulent, for the interest which was excepted in the assignment was too minute to make a difference. 1 Wilson v. Day, 2 Burr. 827. London Sittings after H. T. 1762. (8) The circumstance of the assignee of the effects not taking possession is only evidence of fraud, and consequently may be explained. Per Lord Mansfield, C. J. 1 Burr. 484. (9) The principle of all the cases is, that if the conveyance to a particular creditor necessarily prevents the property of the trader from being distributed as the law requires in cases of bankruptcy, that is itself an act of bankruptcy. Per Le Blanc, J. in Newton v. Chantler, 7 East, 145. (10) It is observable that in this and in the preceding case the deed was valid as between the parties, which circumstance was adverted to by Lord Mansfield, in Wilson v. Day, where he said, that it was not necessary that the deed should be fraudulent as between the parties; it was sufficient if it was a fraud on the creditors generally. In order to render an assignment of a trader's effects an act of bankruptcy, it must be shewn that he assigned all or so nearly all his effects, as to put it out of his power to carry on the trade". It is incumbent on the party who sets up an act of this description, to shew the general situation of the property to have been such, that insolvency would have been the effect of the transfer. But where a trader assigned by deed all his property in trust for the benefit of his creditors, it was holden? an act of bankruptcy; for, per Parke, B. “It is clearly settled, that if the necessary consequence of a man's act is to delay his creditors, he must be taken to intend it. When a man assigns all his property, and puts it into a different course of distribution from what the bankrupt laws direct, he commits an act of bankruptcy." The circumstance of the trader being at the time of the conveyance under arrest, at the suit of the creditor to whom the conveyance is made, will not vary the case. Where a trader being in insolvent circumstances, in consideration of a loan of 120l. without interest, assigned one-third part of all his effects to the lender, who was his brother, and within two days after the execution of the deed, the trader absconded; it was holden, that the bill of sale was fraudulent, on the ground of its being made in contemplation of bankruptcy, and its being partial and unjust to other creditors. So where a trader, in insolvent circumstances, having an act of bankruptcy in contemplation, and being threatened with an attachment for non-payment of money under a decree of the Court of Chancery, voluntarily by deed assigned a lease, part of his estate, to three of his creditors, (one of whom had lent him money, and the others had indorsed notes for him,) as a security for the payment of these debts, and then in trust for himself; the deed was holden an act of bankruptcy, 1st. As a fraud upon the creditor under the decree, who might have claimed the benefit of the lease, notwithstanding the assignment was for a valuable consideration, on the authority of Twyne's case; and 2ndly. As being a voluntary preference contrary to the general policy of the bankrupt laws. Where a trader, being arrested for debt by one creditort, executed a bill of sale to another creditor (who had been induced to give a bond for his appearance at the return of the writ) of all his n Per Parke, B. Carr v. Burdiss. 1 Cr. M. and R. 447. 5 Tyrw. 136. S. C. o Wedge v. Newlyn, 4 B. and Ad. 831. p Stewart v. Moody, 1. Cr. M. and R. 777. q Newton v. Chantler, 7 East, 138. r Linton v. Bartlet, 3 Wils. 47. s Devon v. Watts, Doug. 85. t Butcher v. Easto, Doug. 294. See also Law v. Skinner, 2 Bl. R. 996. which is not inserted, because the report was questioned in Hassels v. Simpson, Doug. 91, 92. n. effects, for the purpose of paying, in the first instance, the debts due to both the creditors, and afterwards the overplus, if any, to himself; and the creditor, to whom the bill of sale was executed, took possession of the effects the day after the execution of the deed, on which day the trader committed an act of bankruptcy by keeping house; it was holden, that the execution of the bill of sale was an act of bankruptcy. A trader, being urged by the importunity of a creditor, executed a conveyance of lands in trust to sell, and to pay such creditor, with a further trust to pay debts to certain relatives, in order to give them an undue preference in contemplation of bankruptcy, it was holden, that the deed so executed was an act of bankruptcy"; but that the deed was valid so far as related to the protection of the urgent creditor. By stat. 7 Geo. 4. c. 57. s. 32. "if any prisoner who shall file his petition for his discharge under that act, shall, before or after his imprisonment, being in insolvent circumstances, voluntarily assign any real or personal property to or in trust for any creditor, such assignment shall be deemed fraudulent and void as against the provisional or other assignee." The word "voluntarily" is used here to denote either an assignment made without such valuable consideration as is sufficient to induce a party acting really and bona fide under the influence of such consideration, or an assignment made in favour of a particular creditor spontaneously, and without any pressure on his part to obtain it. Hence where A., being distrained on for rent arrear, applied to one creditor to advance him money, who refused unless upon security, whereupon A. assigned to him all his personal estate in trust to pay him and other creditors: it was holden not a voluntary conveyance within 7. G. 4. c. 57. s. 32. Arnell v. Bean, 8 Bingh. 87. A trader, knowing himself to be in insolvent circumstances, and being under arrest in execution, at the suit of a creditor, executed a bill of sale of all his goods to the creditor, for the purpose of paying his debt, with a reservation of the surplus to himself; it was holden that this assignment, although executed under the compulsion of an arrest, was fraudulent, and an act of bankruptcy; the necessary consequence of the deed being to prevent the bankrupt from carrying on trade, and thereby operating as an injury to the other creditors. But a sale by a trader of his whole stock, with intent to abscond and carry off the purchase money to a bona fide purchaser who pays the fair price of it, in ignorancey u Morgan v. Horseman. 3 Taunt. 241. y Baxter v. Pritchard, 1 Ad. & Ellis, x Newton v. Chantler, 7 East, 138. 456. Rose. Haycock, 1 Ad. & Ellis, 460 n. S P. of any fraudulent intention of the seller is not an act of bankruptcy. So a deed, by which F. one of two traders in partnership, conveyed his separate estate to trustees, for the joint creditors of both, the joint creditors agreeing that the traders should continue in possession of their stock, and carry on their business with a view to retrieve themselves; and that upon their paying 48. 6d. in the pound by certain instalments, they should receive a general release; it was holden that it was not an act of bankruptcy; and that it was properly left to the jury to say, whether the deed was executed bona fide to enable the traders to retrieve themselves, or was executed by F. with intent to defraud his separate creditors. It must be observed, that it is not competent to those persons who have signed the fraudulent deed, or to those who, without executing, have assented to the deeda, and are privies to the transaction, to set it up as an act of bankruptcy. A commission was sued out on the petition of A. B. founded on an act of bankruptcy in December, and it appeared, that in the preceding October, the bankrupt by a deed to which A. B. was a party, assigned all his property: it was holden', that the assignees (although A. B. was not one of them,) could not avail themselves of this deed as an act of bankruptcy in order to recover money subsequently paid by the bankrupt, inasmuch as the creditors represented by the assignees derived all their rights under the commission from the petitioning creditor, who was a party to the deed. But where a commission of bankruptcy was sued out on a fraudulent deed, upon the petition of a creditor who had not concurred in such deed, but who was chosen assignee, together with other creditors who had concurred and were privy to the fraude; it was holden, that it was not any objection to an action brought by them as assignees for the recovery of part of the bankrupt's estate, that some of the assignees had concurred in the fraudulent deed, the petitioning creditor not having so concurred. An asignment by bankers (then in failing circumstances, and who had stopped payment,) of their estate and effects to trustees for the benefit of their creditors, is an act of bankruptcy, although the assignment be made merely for the purpose of making an act of bankruptcy; the trustees not being z Bamford v. Baron, 2 T. R. 594. n. cited by Eldon, C. exp. Harcourt, 2 Rose, 213. See also Prosser v. Smith, Holt's N. P, C. 442. and exp. Gane, Mont. and M'Arth. 399. a Hicks v. Burfit, Winton Lent Ass. 1812. per Chambre, J. 4 Campb. 235 n. Back v. Gooch, ib. 232. Gibbs, C. J., S. P. 1 Holt's N. P. C.13. S. C. b Tope v. Hocking, 7 B. and C. 101. privy to the purpose for which the deed was made. By stat. 1 and 2 W. 4. c. 56. s. 42. no commission of bankrupt shall be superseded nor any fiat annulled, nor any adjudication reversed, by reason only that the commission, fiat, or adjudication has been concerted by and between the petitioning creditor and the bankrupt, except where any petition to supersede a commission for any such cause shall have been already presented, and shall be then pending. This statute applies to concerted commissions, &c. only, and does not include concerted acts of bankruptcy-But by the 7th section of 6 G. 4 c. 16. one species of act of bankruptcy, viz. a declaration of insolvency, though concerted between the bankrupt and a creditor, is rendered valid by express enactment. A. having contracted with a canal company to build works on the canal, as their engineer, purchased, with money advanced by the company, timber and other articles for that purpose, which were deposited on the premises of the company. Being considerably indebted, he borrowed of the company a further sum of money to pay his creditors the full amount of their debts, and as a security executed a bill of sale of his effects, which were then lying on the premises of the company, and delivered them by the delivery of a copper halfpenny. It was insisted, that the bill of sale was fraudulent, because the possession remained to all appearances the same after as before the conveyance, and the bankrupt continued to gain a false credit as the owner of the goods; but the court held, that possession of the goods having been delivered to the company at the time of the execution of the bill of sale, as far as possession under these circumstances could be given, the deed was not fraudulent. The statute does not require that the conveyance should be made in contemplation of bankruptcy, it is sufficient if it be made voluntarily, in order to give a preference to particular creditors, to the prejudice of general creditors". Formerly, the act of bankruptcy drew the line of separation between that property which might be disposed of by the bankrupt, and that which was vested in the assignees; afterwards it was established, that if a trader, in contemplation of bankruptcy, make a voluntary disposition of his property, with a view to give a preference to a particular creditor, such disposition is void. This doctrine of voluntary preference was not distinctly laid down until the case of Harman, assignee of Fordyce v. Fisher, q Marshall v. Barkworth, 4 B. & Ad. 508. r Manton v. Moore, 7 T. R. 67. Pulling v. Tucker, 4 B. and A. 382. cited by Patteson J. as in point in Botcherby v. Lancaster, 1 Ad. & El. 79. |