bankruptcy, and also that he had, on the 4th (the previous day), executed a conveyance of all his property to trustees, for the benefit of his creditors. On the afternoon of the 5th, the goods which had been taken in execution were sold. The petition in bankruptcy was presented on the 11th of December, and on the following day C. D. was adjudicated a bankrupt. In an action by the assignees of the bankrupt against A. B., to recover the amount of the proceeds of the goods so sold after an act of bankruptcy, and notice under the 133rd section of the 12 & 13 Vict. c. 106: it was held, that the notice was sufficient. Hope v. Meek, 10 Exch. 829. Where an act of bankruptcy has been in fact committed, any communication which brings to the knowledge of the execution creditor before the sale the alleged fact, that an act of bankruptcy has been committed in a way which ought to induce him, as a reasonable man, to believe that the notification was true, is a sufficient notice. Per Parke, B.; Hope v. Meek, 10 Exch. 829; see p. 845. A party to whom a notice of an act of bankruptcy is sent by the post is not to be deemed to have had notice until the day when, in the ordinary course of post, he would receive the letter containing it. Loader v. Hiscock, 1 Fost. & F. 132. Evidence that the defendant in an action by assignees was aware that the bankrupt had left his home and place of business in difficulties and contrary to the rules of his employment as post-master, and had not returned, was held evidence of the defendant's knowledge of an act of bankruptcy, by absenting with intent to delay and defeat creditors. Smith v. Osborn, 1 Fost. & F. 267.

A bonâ fide execution is defeated by bankruptcy, if notice Notice of of an act of bankruptcy be served on the plaintiff's attorney act of bankat any time, however short, before seizure, though the notice ruptcy. is served in London, and the writ has been sent into the bailiwick in the country. Pike v. Stephens, 12 Q. B. 465. But a mere delivery at the attorney's chamber, as in the case of notices in a cause, is not sufficient; and the notice must be served on the attorney himself, or a clerk so far entrusted with the management of his business as to have the power of acting on such a communication in his absence. Ib. Therefore, an announcement in bankruptcy, made at the attorney's office to a person who had lodged the writ of execution with the sheriff, but not further described in evidence than as a clerk to the attorney, did not affect the client, the execution creditor. Ib.

On the 22nd of November an execution was put into the house of W., a trader at S. W. left his house on the 23rd, and thereby committed an act of bankruptcy. On the 24th, U., an attorney at S., was informed by the attorney of the creditors that W. had committed an act of bankruptcy. On the morning of the 25th U. received a letter from the attornies of the execution creditor, instructing him in the matter,

Fraudulent

ruptcy.

which, after directing him to get an assignment from the sheriff, ended thus: "You will be good enough to let this have your immediate attention, as if anything is to be done it must be done quickly." After the receipt of this letter, U. was told by the auctioneer that he had received notice that W. had committed an act of bankruptcy. U. sent for the sheriff's officer, who said that he also had received notice. U. nevertheless told the officer to get an assignment to the execution creditor executed by the sheriff, which was accordingly done. On the evening of the 25th U. wrote to the attornies of the execution creditor, saying, "I fear my services have been called in when too late." In an action against the execution creditor by the assignees of W., who had been adjudged a bankrupt, it was held, that the letter of the attornies for the execution creditor constituted U. such an agent of the execution creditor, that notice to him of an act of bankruptcy was notice to the execution creditor, within 12 & 13 Vict. c. 106, s. 133, and that the information U. received and his letter to the attornies for the execution creditor showed that he had notice of an act of bankruptcy before the execution of the assignment. Brewin v. Briscoe, 5 Jur. N. S. 1206; 28 L. J., Q. B. 329.

An intimation given by a clerk of a defendant's attorney to a clerk of the plaintiff's attorney, that the defendant has committed an act of bankruptcy, the clerk to whom it is given not being shown to be a managing clerk, or to have communicated the matter to his principal, is not such a notice as will defeat an execution. Pennell v. Stephens, 7 C. B. 987; 7 D. & L. 133. It was questioned whether notice to one who is shown to be a managing clerk would suffice. Ib. If execution be taken out in the name of two parties jointly interested as co-plaintiffs, and one knows of an act of bankruptcy already committed by the defendant, his knowledge is prima facie the knowledge of both; and the execution is not protected, even though the execution be in fact sued out by one party only, of whose knowledge there is no evidence. Edwards v. Cooper, 11 Q. B. 33. It seems that even actual ignorance of an act of bankruptcy on the part of one co-plaintiff would not prevent notice to the other from taking effect as notice to both. Edwards v. Cooper, 12 Q. B. 38.

The doctrine of fraudulent preference, which, as Lord preference in Ellenborough has termed it, is an excrescence on the bankcontemplation of bankrupt law (2 Camp. 168), is of more recent introduction than the general law depending upon the old doctrine of relation to the act of bankruptcy. "Formerly," as observed by that learned judge (1 Stark. 89), "the act of bankruptcy drew the line of separation between that property which might be disposed of by the bankrupt, and that which vested in the assignees. But it occurred to those who presided in the courts, that it was unjust to permit a party on the eve of bankruptcy to make a voluntary disposition of his property in favour of a

particular creditor, leaving the mere husk to the rest; and therefore that a transfer made at such a period, and under such circumstances as evidently showed that it was made in contemplation of bankruptcy, and in order to favour a particular creditor, should be void."

Legal preference is where the property is duly and regu. larly transferred, because that excludes fraud. Harman v. Fisher, Cowp. 123. Lord Mansfield, C. J., said, it never entered into the mind of any judge to say that a man, in contemplation of an act of bankruptcy, could sit down and dispose of all his effects to the use of his different creditors, for that would be a fraud upon the statutes of bankruptcy. But if done in a course of trade, and not fraudulent, it may be supported. See Alderson v. Temple, 4 Burr. 2240; 1 W. Bl. 660. A trader cannot, in contemplation of bankruptcy, dispose of his goods of his own accord, without application on the part of the creditor; but it is not sufficient to avoid the delivery of goods by a trader that such delivery be made voluntarily on his part, and that an act of bankruptcy ensues, it must also appear that he had the act of bankruptcy in contemplation at the time of delivery. So if a creditor obtain goods through the urgency of the demand or the fear of prosecution, the proceeding will not be vitiated, whatever may have been in the bankrupt's contemplation. Hartshorn v. Slodden, 2 Bos. & P. 584, 585; Crosby v. Crouch, 11 East, 256.

To constitute a fraudulent preference two things must concur: first, insolvency in the trader; and, secondly, a voluntary payment or transfer by him. The reason of the rule is, that all the creditors who have trusted to the general credit of the bankrupt should share his property equally. Hunt v. Mortimer, 10 B. & C. 44. In order that a payment should constitute a fraudulent preference, it is not necessary that the bankrupt should have intended to benefit the creditor to whom the payment is made, or that the creditor should have derived benefit from such payment. Marshall v. Lamb, 1 Dav. & M. 315; 5 Q. B. 115. Therefore, where a bankrupt who, together with his wife, had joined in mortgaging for 7401. a sum of 2,000l. in the three per cent. reduced annuities, settled to the separate use of the wife, with a power of appointing to the husband for life, and to their children in remainder, paid off the creditor: it was held, that this was a fraudulent preference, although the object of the payment was to redeem the stock and benefit the bankrupt's own family. Ib. In an action by assignees to recover money paid by way of fraudulent preference, and in contemplation of bankruptcy, it must be shown that the party paying contemplated an actual bankruptcy; it is not sufficient to show that he knew himself to be in a state of insolvency. Atkinson v. Brindall, 2 Bing. N. C. 225; 2 Scott, 369. A party who seeks to avoid a payment or transfer of goods, on the ground that it was volun

tarily made by a trader in contemplation of bankruptcy, must show, not merely that the trader was insolvent when it was made, but also that he then contemplated bankruptcy. Morgan v. Brundrett, 5 B. & Ad. 289. The following acts of traders have been held to be fraudulent preferences: inclosing bills of exchange to a trader the night before the bankrupt absconded. Harman v. Fisher, Cowp. 127; see Wilson v. Balfour, 2 Camp. 579; by making a pretended sale on the eve of bankruptcy; Rust v. Cooper, Cowp. 269; by paying a bill of exchange before it became due; Singleton v. Butler, 2 Bos. & P. 283; payment of a debt by cheque may be a fraudulent preference; Ex parte Simpson, 1 De Gex, 9. Such payment made without pressure, after a resolution had been come to by the debtors to suspend payment of their debts generally: it was held, under the circumstances of the case, a fraudulent preference, whether the debtors contemplated actual bankruptcy or not. Ib.

An innocent purchaser from the fraudulent possessor of goods may acquire an indefeasible title to them, though it is voidable between the original parties. White v. Garden, 10 C. B. 919; Stevenson v. Newnham, 13 C. B. 285. Therefore, where a transfer had been made before the bankruptcy, and the transferee, after the appointment of assignees, had brought an action for an excessive distress upon the goods made shortly before the bankruptcy, and the jury found that the transfer to the plaintiff was a fraudulent preference, but the assignees had not taken any steps to affect the plaintiff's title: it was held, that the defendant could not set up the title of the assignees against the plaintiff's right to recover. The mere commencement of an action of trover by the assignees against the plaintiff for the conversion of the goods was held no election on the part of the assignees to avoid the transfer. Stevenson v. Newnham, 13 C. B. 285; 17 Jur. 600, Exch. Cham.; S. C., 10 C. B. 713. It was also held, that the assignees had a right to disaffirm the fraudulent execution and claim the goods, as the transaction was voidable, but not void; but Erle, J., dissented to the proposition that such disaffirmance had no relation back, and that the goods at the time of the seizure by the defendants and until the assignees assumed their right were the plaintiff's property, and consequently that he was entitled to maintain an action for the illegal taking. Ib. Parke, B., observed, "The first question in this case is, whether the receipt of the goods by the plaintiff under the circumstances stated would have been a mere fraudulent preference to be treated simply as such in this action, or as an act of bankruptcy. The fraudulent delivery of goods, or the causing them to be taken in execution with intent to defeat or delay creditors, is an act of bankruptcy; and if, in this case, the assignees under this fiat could have resorted to such an act of bankruptcy, we should

have thought their title related back to the delivery of the goods, or the fraudulent execution itself, as an act of bankruptcy, and the property in the goods would thereby have been vested in the assignees from that moment, and so the plaintiff would not have been entitled to sue for the sale of or damages to their goods, though he might still, perhaps, have been able to sue for a part of this alleged cause of actionthe loss of the temporary possession of the excess more than ought to have been taken as a distress. And if the fiat had been issued on the petition of any of those creditors to whom the bankrupt was indebted at the time of the transfer of the goods to the plaintiff in a sufficient sum to make them good petitioning creditors, the assignees under that fiat would have had a title to the goods by that very transfer." Stevenson v. Newnham, 13 C. B. 299.

The defendant's wife having before her marriage become, as surety, joint and several maker with F. of a promissory note, afterwards, at the suggestion of her husband, applied to F. for money to enable him to take up the note. F., being then insolvent, voluntarily paid the amount of the note to the defendant, in contemplation of bankruptcy, and by way of fraudulent preference. The defendant afterwards paid the money to an indorsee of the note: it was held, that the assignees of F., who afterwards became bankrupt, were entitled to recover the money from the defendant as money had and received to their use, inasmuch as it was money handed over by the bankrupt under such circumstances that it was against the law that he should retain it. Groom v. Watts, 4 Exch. 727; 19 L. J., Exch. 154.

The 17 & 18 Vict. c. 36, for the registration of bills of sale has in no degree affected the doctrine of reputed ownership. Stansfield v. Cubitt, 2 De G. & J. 222; 1 Ib., Bank. App. 168; 4 Jur. N. S. 395; 27 L. J., Ch. 266. See Shelford on the Law of Bankruptcy, pp. 697-704 (3rd ed.).

In order to render a preference on the eve of bankruptcy What valid, it is not necessary that there should be a threat or pres- amounts to sure, with an immediate power of rendering it available by fraudulent preference. taking legal steps. Van Castell v. Booker, 2 Exch. 691; 18 L. J., Exch. 9. To defeat a payment or transfer made to a creditor, the assignees must show it to be fraudulent as against the body of creditors, by proving it to be voluntary on the part of the bankrupt, and in contemplation of his bankruptcy; and if it is made in consequence of the act of the creditor, it is not voluntary. Ib. A payment is voluntary when it originates from the bankrupt himself; but if a creditor demands payment, pressure is not necessary on his part to take it out of the class of voluntary payments; 4 Mee. & W. 348. In an action by the assignees of bankrupts to recover back from the defendant, who was a creditor of the bankrupts, the amount of debt paid him by the bankrupts, which the