Page images
PDF
EPUB

shall, or might, be in anywise disturbed, hindered, or defrauded) to be clearly and utterly void, frustrate, and of none effect; any pretence, colour, feigned consideration, expressing of use, or any other matter or thing to the contrary notwithstanding (a).

Every party to such a fraudulent conveyance shall incur the forfeiture of one year's value of such lands, and the whole value of such goods and chattels and the money contained in such bond, &c., and also being convicted thereof, shall suffer imprisonment for one halfyear (b).

The Act not to extend to any assurance made upon good consideration and bonâ fide to any person not having at the time of such assurance any notice or knowledge of covin, fraud, or collusion (c).

The gift or conveyance must be with intent to defraud creditors (d). Volunteers who are creditors, for instance, under bonds or obligations given without valuable consideration, are nevertheless creditors within the meaning of the Act (e).

The statute applies equally to real and personal property. With regard to personal property the statute applies only to such things as can be taken in execution (ƒ); and only in this respect do assignments of choses in action fall within the statute (g).

A valuable consideration will not be effectual if there be mala fides and an intent to delay or defraud creditors, or to place the property beyond reach of process (h).

(a) 13 Eliz. c. 5, ss. 1, 2.
(b) Id. s. 3.
(c) Id. s. 6.

(d) Gooch's Case, Co. Pt. V. 60a; Nunn v. Wilsmore, 8 T. R. 521; 5 R. R. 434; Doe v. Ball, 11 M. & W. 531.

(e) Adames v. Hallett, L. R. 6 Eq. 468.

(f) Rider v. Kidder, 10 Ves. Jun. 360; 1 & 2 Vict. c. 110, ss. 12, 14, 15, 18; 3 & 4 Vict. c. 82; and R. S. C. 1883; Warden v. Jones, 2 De G. & J. 76; Norcutt

v. Dodd, Cr. & P. 100; Barrack
v. McCulloch, 3 K. & J. 110;
Stokoe v. Cowan, 29 Beav. 637.
(g) Norcutt v. Dodd, supra.

(h) Harman v. Richards, 10 Ha. 89; Strong v. Strong, 18 Beav. 408; Bott v. Smith, 21 Beav. 511; Colombine v. Penhall, 1 Sm. & G. 228; Barling v. Bishopp, 29 Beav. 417; Reese River Co. v. Attwell, L. R. 7 Eq. 347; Blenkinsopp v. Blenkinsopp, 1 D. M. & G. 495; Pauncefoot's Case, Lane, 44, 45;

Yet it was held that a mortgage, if executed as a security for money actually lent, is not fraudulent within the Act, although its object was to defeat an expected execution of a judgment creditor (i).

Policies of assurance are securities for money within 1 & 2 Vict. c. 110, and are therefore seizable by the sheriff (j).

Voluntary conveyances have been held to be within the statute if made to hinder or defraud creditors; but the mere fact that it is voluntary will not invalidate it; but the solvency or insolvency at the time of the transaction will be taken into account ().

On the other hand, the mere fact that the grantor may be solvent and able to meet all his just debts at the time of the grant will not necessarily validate the conveyance (); for the grantor may be indebted at the time, and yet the conveyance be good (m). The conveyance is only void to the extent that may be necessary to satisfy the grantor's creditors (n). It will still be good against the grantor (0); parties who are privy to it (p); volunteers claiming under the grantor, e.g., devisees (q); and also against mere strangers (r).

Ward v. Lant, Pr. Ch. 182; Raleigh's Case, Lane, 48; Saunders v. Watson, 4 Giff. 179; Chowne v. Baylis, 31 Beav. 351; Wood v. Dixie, 7 Q. B. R. 892.

(i) Darvill v. Terry, 6 H. & N. 807; Hale v. Saloon Omnibus Co., 4 Drew. 492; Alton v. Harrison, L. R. 4 Ch. Ap. 622.

(j) Stokoe v. Cowan, supra; Law v. The Indisputable Life Assurance Soc., 1 K. & J. 223; Robinson v. M'Creight, 25 Beav. 272; Freeman v. l'ope, L. R. 9 Eq. 206; Taylor v. Coenen, 1 Ch. D. 636.

(k) Lush v. Wilkinson, 5 Ves. Jun. 384; Holmes v. Penney, 3 K. & J. 90; Skarf v. Soulby, 1 Mac. & G. 364, 375; Thompson v. Webster, 4 De G. & J. 600; Kent v. Riley, L. R. 14 Eq. 190; Taylor v. Coenen, L. R. 1 Ch. D. 636; Spencer v. Slater, 4 Q. B. D. 13.

(1) Spirett v. Willows, 3 D. G. J. & S. 293: Freeman v. Pope, L. R. 5 Ch. Ap. 538; Mackay v. Douglas, L. R. 14 Eq. 106; Cornish v. Clark, L. R. 14 Eq. 184; Crossley v. Elworthy, L. R. 12 Eq. 158; Barling v. Bishopp, supra.

(m) Stephens v. Olive, 2 B. C. C. 90; French v. French, 6 D. G. M. & G. 95; Neale v. Day, 4 Jur. N. S. 1225.

(n) Curtis v. Price, 12 Ves. Jun. 103; 8 R. R. 303; Bill v. Cureton, 2 M. & K. 503; De Hoghton v. Money, L. R. 2 Ch. Ap. 164.

(0) Robinson v. M'Donnell, 2 B. & Al. 134.

(p) Olliver v. King, 2 Jur. N. S. 312.

(a) Villers v. Beaumont, 1 Ver. 100.

[blocks in formation]

If the conveyance is voidable, the voluntary grantee may, before it is avoided, make a valid transfer to a purchaser for value (s); but the consideration must not be grossly inadequate, or a presumption of fraud and collusion will arise (t). When the subsequent conveyance is a mortgage, the voluntary grantees will be entitled subject to the mortgage (u).

Where a specialty creditor brought an action to set aside a conveyance as fraudulent under the Act nearly ten years after the death of the grantor, and the creditor had been aware of the facts during the whole of that period, it was held, that as the creditor sought to enforce a legal right his mere delay to take proceedings was no defence against him, as it had not continued long enough to bar his legal right, the case standing on a different footing from a suit to set aside on equitable grounds a deed which was valid at law (v).

A conveyance will not be taken out of the operation of the statute merely in consequence of the fact that the consideration given is not for the benefit of the grantor, but for that of a third person, e.g., an annuity to the grantor's wife (w). Again, although there were actually no creditors at the date of the execution of the deed, yet if the deed were in fact fraudulent, and executed with the express intention of delaying and defeating the claims of future creditors, such deed may be impeached by such future creditors (x).

Moreover, the creditor may bring his action to impeach the validity of such a document without having previously obtained a judgment, lien, order, or decree of any kind in respect of his claim against the grantor;

(s) Morewood v. S. Yorks. Rail. Co., 3 H. & N. 798; Daubeny v. Cockburn, 1 Mer. 626; 15 R. R. 174.

(t) Doe v. Routledge, Cowp. 705; Metcalfe v. Pulvertoft, 1 V. & B.

184.

(u) Hales v. Cox, 32 Beav. 118. (v) In re Maddever, 27 Ch. D.

523; Golden v. Gillam, 20 Ch. D. 389.

(w) French v. French, 6 D. G. M. & G. 95; Neale v. Day, 4 Jur. N. S. 1225.

(x) Barling v. Bishopp, 29 Beav. 417; Reese River Co. v. Attwell, L. R. 7 Eq. 347.

but in the absence of such a lien or charging order the Court will not apply the property in satisfaction of the creditor's claim. It would appear, also, that a bill to set aside such a conveyance ought to be on behalf of all the creditors of the grantor (y).

An assignment of part of his property by a man, who cannot pay all his debts, to a trustee for the benefit of a particular class of creditors may still be within the operation of the statute, although the grantor may have been heavily pressed by those particular creditors (2).

But a creditor for valuable consideration, who has no notice or suspicion that his debtor is insolvent at the time when payment or transfer is effected by way of fraudulent preference to him, may be protected from attack (a).

Where A. is indebted to B. and to C., if, after B. has obtained judgment against A. and issued but delayed the levy of execution, A. goes to C. and voluntarily gives to C. a warrant of attorney to confess judgment, on which judgment is immediately entered and execution levied on the same day on which B. would have been entitled to execution and had threatened to sue it out, the preference thus given by A. to C. is not unlawful, nor fraudulent, within the meaning of the statute 13 Eliz. c. 5 (b).

Similarly, a debtor expecting that a writ of sequestration would issue against him for non-payment of a sum of money ordered to be paid by him in the Court of Chancery, executed a deed of mortgage, which was registered as a bill of sale, vesting substantially all his property in trustees for the benefit of five (some only) of his creditors. The deed contained a proviso that the

(y) Reese River Co. v. Attwell, supra. But see Colman v. Croker, 1 Ves. Jr. 161; Collins v. Burton, 4 D. G. & J. 612.

(z) Ex parte Saffery, 4 Ch. D.

555.

(a) Ex parte Butcher, L. R. 9 Ch. Ap. 595.

(b) Holbird v. Anderson, 5 T. R. 235. Cp. Wood v. Dixie, 7 Q. B. R. 892.

debtor should remain in possession of his property for six months, but not so as to let in any execution or sequestration, and in case any such should be enforced his possession was to cease. A writ of sequestration was subsequently issued. It was held: That the deed was not void under 13 Eliz. c. 5, notwithstanding the fact that it conveyed the whole of the debtor's property for the benefit of some of his creditors, and that it contained the above-mentioned proviso (c). Further, the onus probandi is on those who impeach the deed (d).

A bill of sale of all the grantor's then existing and after-acquired property, by way of mortgage to secure an existing debt and future advances, is not necessarily void under 13 Eliz. c. 5, unless made malâ fide and as a mere cloak for retaining a benefit to the grantor (e).

Where possession of goods has been taken under a bill of sale, part of the consideration for which is money advanced for the bonâ fide purpose of obtaining security for a pre-existing debt, the transaction is not invalid, although the creditor be aware, at the time of the advance, that the debtor has committed felony and intends to leave the country and to apply a portion of the money advanced for that purpose (ƒ).

An assignment of funds (e.g., stock, reduced annuities) by a prisoner on a charge of felony to secure payment of an antecedent debt, and costs to be incurred in his defence, is perfectly valid notwithstanding his subsequent conviction (g).

A clerk robbed his employers of money, and upon the discovery of his frauds and previously to his prose

(c) Alton v. Harrison, 20 L. T. N. S. 1001; L. R. 4 Ch. Ap. 622. See also Allen v. Bonnet, 18 W. R. 183; Ex parte Games, 12 Ch. D. 314; Bittlestone v. Cooke, 4 W. R. 493; 6 E. & B. 296; In re Colemere, 14 W. R. 318; L. R. 1 Ch. 128; Bell v. Simpson, 5 W. R. 688; 2 H. & N. 410.

(d) Allen v. Bonnet, 18 W. R. 183.

(e) Ex parte Games, 12 Ch. D.

314.

(f) Bagot v. Arnott, 2 Ir. Rep. C. L. 1.

(g) Perkins v. Bradley, 1 Hare,

219.

« EelmineJätka »