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to discharge it in; and it was contended also that the creditor in this case, supposing him to be one then, could not be said to have been delayed, as he had been punctually paid in due time, and could not have protested the bill till after five o'clock. But the court approving the direction of the judge, refused to grant a rule. There is no authority to shew that a mere direction given by a trader to his servant to deny him to his creditors generally, or to any particular creditor by name, not followed up by an actual denial, or by any other act which is evidence of an actual beginning to keep house, is an act of bankruptcy. Hence where a trader, under apprehension of arrest, gave directions to his servant to deny him, in case A., a sheriff's officer, called; it was holden, that the sheriff's officer not having called, this of itself was not any evidence of a beginning to keep house.
7. Yield himself to Prison.
B. was arrested for 281., and although he had money sufficient to pay the debt, yet chose rather to go to prison, in order, as he declared, to force his creditors to come to a composition. Ld. Talbot, C. held this to be an act of bankruptcy, but observed, that if there had not been an intention to delay creditors, yielding himself to prison would not constitute an act of bankruptcy. Exp. Barton, 7 Vin. Abr. tit. Cred. and Bankr. 61, 62, pl. 15.
9. Procure himself to be arrested, or his goods, money, or chattels, to
be attached, sequestered, or taken in execution.
It was said by Lord Mansfield, C. J. in Clavey v. Hayley, Cowp. 428. that the word “attachment,” being coupled with “arrests and sequestrations,” shewed that the legislature meant that sort of attachment by which suits are commenced, and that they plainly had in view the customs of London, and other towns, where that species of process is made use of. Hence, where a person executes a bond and warrant of attorney to confess judgment, either for a bonâ fide debtd, or for a
c Fisher v. Boucher, 10 B. & C. 705.
d Harman v. Spottiswood, Co. B. L.
5th edit. p. 100.
larger sum than is really duee, and judgment is entered up accordingly, and the debtor's goods taken in execution, such execution is not an “attachment,” and consequently is not an act of bankruptcy, within the meaning of this clause. questration in London is a method of proceeding in an action of debt, where the party cannot be found; in which case, upon the action being entered, the officer goes to the warehouse of the defendant where the goods are, and fixes a padlock on the door, and if the defendant does not put in bail in time, judgment is given against him, and his goods are sold in satisfaction.
10, 11. Make, either within this realm or elsewhere, any fraudulent grant
or conveyance of any of his lands, tenements, goods, or chattels, or make any fraudulent surrender of his copyhold lands or tenements, or make any fraudulent gift, delivery, or transfer of any of his goods or chattels. (6)
If a trader, in contemplation of bankruptcy, in order to pay even a just and bonâ fide creditor, or one who, by possibility may become a creditor (viz. a suretyf) assigns by deed alle, or even a part (7) of his effects to such creditor, the deed is fraudulent, and consequently an act of bankruptcy within the meaning of this clauseh. And the same rule holds if the assignment be to some creditors, but in total exclusion of others. If all the creditors do not concur, the deed is fraudulent and an act of bankruptcyiHence where a conveyance by deed was made by A., a traderk, of all his effects, as a security to B., who had agreed to become A.'s banker, and to answer his drafts, for the purpose of enabling him to carry on his trade, subject to a defeasance on his paying such sums
e Clavey v Hayley, Cowp. 427.
field, in 1 Burr. 477. Kettle v. Hamf Hassels v. Simpson, Doug. 88. n. mond, Middlesex Sittings after H. & Worseley v. Demattos, i Burr. 467. 7 Geo. 3. Bull. N P. 40.
2 Kenyon, 218. S. C. Wilson v. i Eckhardt v. Wilson, 8 T. R. 140. Day, 2' Burr. 827.
k Worseley v. Demattos, 1 Burr. 467. h Ex parte Foord, cited by Lord Mans
(6) A bill of exchange is a chattel, within the meaning of these words, the fraudulent delivery or transfer of which will constitute an act of bankruptcy. Cumming v. Baily, 6 Bingh. 363.
(7) The language of the old statute was, conveyance of his lands, &c.; but in 6 Geo. 4. c. 16. the words are conveyance of any of his lands,” &c.
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; Ist, 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 1001.) to some favourite creditors, in trust to
them their full debts, leaving other debts to the amount of 900l. 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 tradea. 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 holdenP 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 1201. 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 circumstancess, 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. i 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.
s Devon v. Watts, Doug. 85.
also Law v. Skinner, 2 Bl. R. 996.
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 bankruptcyų; 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 v. Haycock, 1 Ad. & El
lis, 400 n. S P.