A bill of sale by a company is within the Bills of Bill of sale Sale Act of 1878, except that if unregistered it is not by company. thereby avoided against the liquidator of the company,

as he represents the company and its contributories as well as the creditors (s).

It has been held that an ordinary bill of sale by a company is as much within the mischief of the Act of 1882 as a bill of sale by a private individual; and therefore a bill of sale by a company, if to secure the payment of money, must be made in compliance with that Act, and duly registered under the Act of 1878 (t).

It is only when the security given by a company is a "debenture" (u) within the meaning of the exception in section 17 of the Act of 1882 that the document (if a bill of sale) comes within the Act of 1878 alone (v).

(8) Re Marine Mansions Co., L. R. 4 Eq. 601, 610; In re Asphaletic Wood Pavement Co., 49 L. T. (N.S.) 159; In re Cunningham, 28 Ch. D. 682.

(t) In re Cunningham, 28 Ch. D. 682.

(u) Brocklehurst v. Railway Printing and Publishing Co., W. N. (1884) 70. As to what is a debenture, see British India Steam Navigation Co. v. Commissioners of Inland Revenue, 7 Q. B. D. 165, 172, 173.

(v) Ross v. Army and Navy Hotel Co., 55 L. J. (N.S.) Ch. 697.

Who are
"creditors
and others."

General creditors

intended.

Nor mortgagees.

WHO ARE ENTITLED TO RANK AS CREDITORS UNDER 13 ELIZ. C. 5.

THE statute 13 Eliz. c. 5, is expressed to be to avoid conveyances, &c., "to delay, hinder, or defraud creditors and others (v) of their just and lawful actions, suits, debts, accounts, damages, penalties, forfeitures, heriots, mortuaries, and reliefs."

It is conceived that the words "creditors and others" are wide enough to include any person who has a legal demand against the settlor, so that he may rank as a creditor, although at the date of the settlement he may have no legal right to enforce it. The character of the claim, so long as it is a legal one, seems immaterial (w).

This is the construction which the statute has received in America, where the words "creditors and others" are not restricted to such as are creditors in the strict sense of the word (x).

The enactment is clearly intended to prevent persons from conveying away the whole or any part of their property in derogation of the rights of those who as general creditors have a claim on the general assets of their debtor (y).

Mortgagees, therefore, who have a specific portion of property set aside, and, so far as their interest is concerned, freed from liability to the general debts, and to which they can, primarily at least, resort for the satisfaction of their claim, are not to be regarded as "creditors," or at least a mortgage debt is not properly speak

(v) Ante, p. 64.

(w) Post, p. 184.

(x) See 13 Eliz. c. 5, s. 2; Taylor v. Atkinson, 2 Atk. at p. 600; Holmes v. Penney, 3 K. & J. 100; In re Ridler, 22 Ch. D. 74; ante, p. 64; post, pt. vi. ch. i.; Bump. Fr. Conv. (Amer.), 2nd ed. 491, 492.

(y) George v. Milbanke, 9 Ves. 190, 196.

*

ing a debt for the purposes of the statute (z), for a fully secured debt is generally excluded from [* 164] an estimate of liabilities. There seems at one time to have been some uncertainty on the point, and some confusion as to whether mortgagees were to be looked upon as creditors under this statute, or as purchasers under 27 Eliz. c. 4 (a); but it has been decided that they are purchasers under the latter statute (b). If the property Unless for mortgaged is not sufficient to satisfy the debt, the mort- surplus. gagee of course will be a creditor for the balance (c).

And a mortgagee may, by relinquishing the security Mortgagee of his mortgage, become entitled to sue as a creditor; relinquishing security. so that where a plaintiff who had an equitable mortgage sued in the double character of purchaser and creditor, although the deed was held void against him as a purchaser (d), it was held (on a question of costs) that he had a right to sustain the suit as a creditor (e).

husband

to invest for

In Barrack v. McCullock (f), the plaintiff was held Barrack v. to be a creditor under the following circumstances:- McCullock: M. was a friend of the plaintiff and his wife; the wife creditor of a had, without her husband's knowledge, from time to person to time given M. money to invest for her benefit. This whom his money she took partly out of the profits of her hus- wife had band's business, and partly, during the time when the given money business was being carried on by trustees for the bene fit of her husband's creditors, out of moneys allowed to her from time to time by such trustees. M. furnished an account of investments which he represented he had made with the moneys so given to him, but it was found on his death that such investments were not then in existence, if they had ever been made; and the

(z) Stephens v. Olive, 2 Bro. C. C. 90; Lush v. Wilkinson, 5 Ves. 384; Freeman v. Pope, L. R. 5 Ch. 538; and see Ex parte Huxtable, 2 Ch. D. 54.

(a) See 1 Eq. C. Ab. 148, pl. 1, where the case of Dolin v. Coltman, 1 Vern. 294 (in which an agreement was set aside as fraudulent against subsequent mortgages), is put under the heading of "What conveyance or disposition shall be fraudulent as to creditors," and the 13 Eliz. c. 5, is cited in the margin; and see Naylor v. Baldwin, 1 Rep. Ch. 69; Girling v. Lowther, 2 Rep. Ch. 136; post, pp. 208 et seq.

(b) Lister v. Turner, 5 Hare, 281; Dolphin v. Aylward, L. R. 4 H. L. 486.

(c) Harman v. Richards, 10 Hare, 81; and see Doe v. Knight, 5 B. & C. 671, 695.

(d) See Doe v. Knight, 5 B. & C. 671, 695; and Ede v. Knowles, 2 Y. & C. Ch. 172.

(e) Lister v. Turner, 5 Hare, 281.

(f) 3 K. & J. 110.

her.

covenant with her trustees.

*

plaintiff now claimed against M.'s estate the moneys so given to him, and interest thereon. It was held by Lord Hatherley (then Sir W. P. Wood, V.C.) that the [* 165] husband, the plaintiff, was entitled to sue as a creditor of the estate of M., to set aside investments of stock made by him in his lifetime in the names of trustees for the benefit of his daughters.

Wife creditor In Rider v. Kidder (g) a husband on his marriage on husband's covenanted with the trustees of the settlement, in case his intended wife should survive him, within twelve months next after his decease to pay her £3000, with interest at 4 per cent. per annum, for her own use, and in case there should be any issue, to pay to the trustees within the time aforesaid £2000, with the same interest, upon trust for the benefit of the wife and children; and Lord Eldon was of opinion that under this covenant the wife was a creditor of the husband's estate after his death, as against a fraudulent conveyance made by him (h).

Debts founded in maleficio.

In Lewkner v. Freeman (i) a curious distinction was taken between debts founded in maleficio and real debts. After the plaintiff had brought his action against M. for lying with his wife, M. made a conveyance of his land to trustees for the payment of certain scheduled debts and such other debts as he should appoint. The plaintiff recovered £5000 damages against M. and brought his bill to be relieved against the deed as fraudulent against him and made to defeat him of his debt. Per Curiam: "This deed is not fraudulent, either in law or equity, for such debts as are named in the deed; for the plaintiff was no creditor at the making of the deed; and though it were made with an intent to prefer his real creditors to this debt, when it afterwards came to be a debt, yet it was a debt founded in maleficio, and therefore it was conscientious in him to prefer the other debts before it." But the plaintiff was allowed to have an interest in the surplus after the other debts were paid (k).

A creditor of an ancestor of the author of a voluntary settlement is a creditor of the heir to whom lands

(g) 10 Ves. 360; Ex parte Robinson, 1 Moll. 291.

(h) 10 Ves. 369.

(i) 1 Eq. C. Ab. 149. See S. C. Prec. Ch. 105, and Freem. Ch. 236.

(k) See Pickstock v. Lyster, 3 M. & S. 371; ante, pp. 105 et seq.

have descended from that ancestor. So where a man Ancestor's to whom lands had descended as the heir of his father debts avoid made a voluntary settlement of them, it was [* 166] the heir's voluntary held void as against his father's creditors; and the conveyance. Court agreed "that the conveyance of the heir shall be fraudulent as a conveyance by the father, who is the principal debtor" (1). In Gooch's Case (m) the plaintiff brought his action in the Court of King's Bench against the defendant, as heir to his father, in debt on a bond made by the father, in which he bound himself and his heirs; to the plea of riens per descent the plaintiff proved that the father died seised of certain lands which had descended to the defendant as his heir; in answer to which the defendant gave in evidence a feoffment in fee made by him before this action. Plaintiff's counsel alleged and proved that this was made by fraud and covin to defeat the then action. But it was strongly urged and insisted on, that it ought to have been pleaded, and could not on this issue (of riens per descent the day of the writ purchased) be given in evidence. The Court, however, declared that the plaintiff, who was a stranger to it, could not be driven to plead the feoffment, of which he had no knowledge, but might give it in evidence (n), and that the statute was to be favourably interpreted for the suppression of fraud.

So a voluntary conveyance by a devisee is void Or that of against the creditors of the testator (o).

devisee.

But (in the absence of special circumstances) land is But not his not liable to the debts of the ancestor after it has been conveyance for value. alienated by his heir or devisee for the purposes of a marriage settlement (p).

A voluntary conveyance by an executor or adminis- Or by an trator is void as against the creditors of the testator or intestate (q).

(1) Gooch's Case, 5 Rep. 60 a; Apharry v. Bodingham, 1 Cro. Eliz. 350; Richardson v. Horton, 7 Beav. 112; Shep. Touch. 66. (m) 5 Rep. 60 a.

(n) See Kidney v. Coussmaker, 12 Ves. 136, 155, as to the difference between cases where a bill in Chancery is filed expressly to set set aside a settlement, and where the settlement first comes out in the answer; and post, pt. vi. ch. i.

(0) Gooch's Case, 5 Rep. 60; Apharry v. Bodingham, 1 Cro. Eliz. 350.

(p) Mathews v. Jones, 2 Anstr. 506; Richardson v. Horton, 7 Beav. 112, 124, post, p. 333.

(q) Doe v. Fallows, 2 Tyr. 460.

executor or administrat

or.