therefore, fraudulent within the statute; for such is the effect pro tanto of every assignment that can be made by one who has creditors. But the feoffment, judgment, &c., must be devised of malice, fraud, and the like, to bring it within the statute (s); and if the consideration is bonâ fide, the intent to defeat other creditors is not a fraud, independently of the Bankruptcy Acts; as where a debtor mortgaged all his property to secure some creditors to the exclusion of the rest, the deed was held not to fall within the statute (†), though it contained a proviso that the debtor should remain in possession for six months (u). Similarly, a sale of goods, if bonâ fide, is not invalidated by knowledge that an execution is intended (x). Chap. XXXI. § 1 (ii). An assignment to defeat a particular creditor is not necessarily Assignment void under the statute (y). So an assignment by an insolvent to defeat a particular debtor of all his property for his creditors, in order to defeat a creditor. particular creditor's execution, is not within the statute (≈); but persons claiming under a writ of sequestration issued by the Court have priority over a mortgagee who takes his security with a knowledge that it was made to avoid the effect of the sequestration (a). It has been said that to bring a transaction within the statute Whether it should include the whole, or substantially the whole, of the whole property must debtor's property (b); but this statement of the law is directly be assigned. opposed to that laid down in an earlier case (c). intent to de The intent to defraud may be inferred from various circum- Circumstance stances, and it may be useful in this place to refer briefly to from which the cases which indicate what circumstances may be taken into fraud may be consideration in determining this question so far as such cases bear upon mortgages. inferred. An element which may be taken into consideration as leading What insolto an inference of fraudulent intent to defeat or delay creditors, vency is withis, if the debtor is at the time, or by such conveyance becomes, (s) See Gale v. Williamson, 8 M. & W. 405. (t) Alton v. Harrison, L. R. 4 Ch. 622; Gladstone v. Padwick, L. R. 6 Ex. 211; Allen v. Bonnett, L. R. 5 Ch. 581. (u) Alton v. Harrison, sup. (x) Hale v. Metropolitan Saloon Omnibus Co., 4 Drew. 492; Westbury v. Clapp, 12 W. R. 511; Wood v. Dixie, 7 Q. B. 892. (y) Maskelyne v. Smith, 72 L. J. K. B. 237, C. A. VOL. I.-C. (z) Pickstock v. Lyster, 3 M. & S. 371; Wolverhampton, &c. Co. v. Marston, 7 H. & N. 148; Darvill v. Terry, 6 H. & N. 807; Marlow v. Orgill, 8 Jur. N. S. 829. (a) Ward v. Booth, L. R. 14 Eq. 195. See Empringham v. Short, 3 Ha. 461. (b) Re Hirth, (1899) 1 Q. B. at p. 260, per Lindley, M. R. (c) Alton v. Harrison, L. R. 4 Ch. at p. 626, per Giffard, L. J. Q Q in the statute. Chap. XXXI. in insolvent circumstances, in which case it falls within the Act (d); but the mere owing some debts is not sufficient (e). § 1 (ii). It is not, however, necessary to prove a state of actual insolvency (f). Act may apply though grantor is solvent. Mortgage not communicated to mortgagee. If, after deducting the property which is the subject of an assurance, sufficient available assets are not left for the payment of the grantor's debts, then that is an element from which the law may infer an intent to defeat creditors (g); but although a grantor is in embarrassed circumstances, yet, if the property not included in the assurance is ample to pay his debts, the assurance will be good, even if some of the debts remain unpaid (h). The question is whether the grantor was in a position that would justify him in putting a considerable part of his property into a particular assurance (i). If there is an actual intent to defeat creditors, it is immaterial whether the grantor was or was not solvent at the date of the settlement (k); or whether he was or was not indebted at the time; as if, being a trader, he settled all his present and future property (); and that notwithstanding the assurance was of a very trifling amount considering the extent of his business (m). A mortgage executed by the mortgagor when solvent in favour of a creditor, without his knowledge and without any communication with him, is valid, although the mortgagor kept it in his own possession up to the time of his death; unless it was delivered as an escrow, or fraud is proved (n). So a delivery of the mortgage deed by the mortgagor to his own solicitor, who retained it till the mortgagor's bankruptcy, was held a valid delivery to the mortgagees (o). But a voluntary mortgage, not communicated to the creditor, and kept to be made use of if convenient, was held fraudulent under the statute 27 Eliz. c. 4 (p). (d) Shears v. Rogers, 3 B. & Ad. 362. (f) Townsend v. Westacott, 2 Beav. (g) Freeman v. Pope, L. R. 5 Ch. 538, 545; Taylor v. Coenen, 1 Ch. D. 641; Spirett v. Willows, 3 De G. J. & S. 293. (h) Kent v. Riley, L. R. 14 Eq. 190. (i) Crossley v. Elworthy, L. R. 12 Eq. 158. (k) Spirett v. Willows, 3 De G. J. & S. 293. (1) Ibid.; Ware v. Gardner, L. R. 7 Eq. 317; Taylor v. Coenen, 1 Ch. D. 641. (m) Taylor v. Coenen, sup. (n) Doe v. Knight, 5 B. & Cr. 671; Exton v. Scott, 6 Sim. 31. See Dillon v. Coppin, 4 My. & Cr. 662. (0) Grugeon v. Gerrard, 4 Y. & C. Ex. 119. (p) Cracknall v. Janson, 11 Ch. D. 1, C. A. See Perry-Herrick v. Attwood, 2 De G. & J. 21. The cases referred to in this section are, for the most part, cases in which questions have arisen as to setting aside voluntary settlements for want of consideration and other circumstances indicating an intent to defraud creditors within the meaning of the statute; but the principles underlying the decisions seem to apply to cases of mortgages. It must, however, be borne in mind that, in the case of a mortgage, an equity of redemption of more or less value is left in the mortgagor and is available after payment of what is due to the mortgagee for principal, interest, and costs, for the purpose of satisfying the claims of creditors. 595 Chap. XXXI. How far § 1 (ii). to settlements cases relating bear on mortgages. in extremis. Where an insolvent debtor, shortly before his death, pur- Assignment ported to assign absolutely certain policies of assurance on his by debtor own life of considerable amount to a particular creditor in consideration of the release of a debt due to him, the assignment, though held to be voluntary and void under the statute as an absolute assignment, was ordered to stand as a security for the debt due at the time of the assignment (9). considera The adequacy of consideration is another important, though Adequacy of not conclusive, element in determining the bona fides of a trans- tion. action ("). It has been held that a past debt is an adequate consideration for a mortgage within the statute (s); à fortiori, if the consideration is not only an antecedent debt, but also a substantial advance made at the time when the mortgage is given (t). And a bill of sale to secure an existing debt and future advances will not be void under the statute if made in good faith (u). But, though a mortgage is given in consideration of a sum actually advanced, the deed will be liable to be set aside if, by its form or effect, it shows that its intention is to protect the goods from claims of other creditors and retain the benefit and enjoyment of them to the grantor (x). It makes no difference whether the deed deals with the whole or only a part of the grantor's property, or even if it extends to after-acquired property; if the deed is bonâ fide, that is, if it is (g) Stokoe v. Cowan, 29 Beav. 637. (r) See Doe v. James, 16 East, 212; Golden v. Gillam, 20 Ch. D. 389. (s) Edwards v. Harbin, 2 T. R. 587; 1 R. R. 548. (t) Martindale v. Booth, 3 B. & Ad. 498; Riches v. Evans, 9 C. & P. 640. (u) Exp. Games, Re Bamford, 12 Ch. D. 314, C. A. (x) Reed v. Blades, 5 Taunt. 212; Latimer v. Batson, 4 B. & C. 652; Graham v. Furber, 14 C. B. 410; Hale v. Metropolitan Saloon Omnibus Co., 4 Drew. 492; Bott v. Smith, 21 Beav. 511. Chap. XXXI. § 1 (ii). not sufficient not a mere cloak for retaining a benefit to the grantor, it is a good deed under the statute of Elizabeth (y). But a deed, though made for valuable and adequate consideraConsideration tion, may yet be void under the statute if an actual and express if fraud exists. intent to defeat creditors is proved (≈), subject, however, to the rights of the parties from whom the valuable consideration proceeded, in ignorance of such intention (a). Voluntary settlements. Laches. The statute also avoids mortgages of interests derived under settlements or other instruments which are themselves fraudulent and void under the statute, as against the creditors of the settlor or grantor. As regards voluntary settlements, it was said by Taunton, J., in Shears v. Rogers: "It is established by a long train of decisions that a voluntary assignment made without valuable consideration, so as to defeat the rights of creditors, is fraudulent within the meaning of the statute" (b). But the question as to the avoidance of voluntary settlements, &c., is one of the mortgagor's title, and beyond the scope of the present treatise. The effect of sect. 5 of the statute is to except from the operation of the Act in favour of a purchaser for value without notice, any interest, whether legal or equitable, derived under a settlement, which that statute would make void against creditors, as to other persons claiming under it. So, where by a settlement, which was fraudulent against creditors under the statute, a reversionary life interest was reserved to the settlor, who charged such interest by way of equitable mortgage to a person who advanced his money without notice that the settlement was fraudulent, it was held that the mortgage was protected by sect. 5, and was accordingly good as against the creditors of the settlor (c). Fraud will not be imputed to a purchaser merely because his solicitor was privy to it (d). A suit to set aside a deed under the statute is not barred by any delay short of the period prescribed by the Statute of Limitations (e). (y) Alton v. Harrison, L. R. 4 Ch. 622; Exp. Games, Re Bamford, 12 Ch. D. 314, C. A.; Re Kelcey, (1899) 2 Ch. 530. (2) Per Lord Mansfield in Cadogan v. Kennett, Cowp. 432; Strong v. Strong, 18 Beav. 408; Holmes v. Penney, 3 K. & J. 90; Bott v. Smith, 21 Beav. 511; Corlett v. Radcliffe, 14 Moo. P. C. 121; Cornish v. Clark, L. R. 14 Eq. 184; Three Towns Banking Co. v. Maddever, 52 L. J. Ch. 733. (a) Golden v. Gillam, 20 Ch. D. 389; Halifax Banking Co. v. Gledhill, (1891) Ch. 31. (b) 3 B. & Ad. 370. (c) Halifax Banking Co. v. Gledhill, (1891) 1 Ch. 31. (d) Re Tetley, Exp. Jeffrey, 3 Mans. 226, 321. (e) Re Madderer, Three Towns Banking Co. v. Maddever, 27 Ch. D. 523. Chap. XXXI. fraudulent iii.—Against what Creditors a Fraudulent Conveyance will be Avoided. The statute renders void conveyances made with intent to defraud creditors only as against persons whose § 1 (ii). actions, &c. may be defrauded or hindered, and the representa- Validity of tives of such persons. An assurance, though fraudulent under conveyances the statute, will therefore be valid as against the assignor as against assignor. himself, and as against strangers other than creditors; it will also be valid as against creditors who are cognisant of and take part in the arrangement under which the assignment is made (f). It has been held at law that an assurance cannot be void Subsequent creditors. against a person who only became a creditor after its date (g). But in equity an assurance is void if made with a view to defeat future debts (h); and when an assurance is once avoided under this statute, subsequent creditors may be let in together with antecedent creditors (i); and a subsequent creditor may himself bring an action to avoid the assurance, if any antecedent debt remains due (k). An assurance may be made under such circumstances as to be void against subsequent creditors, although all the antecedent creditors are paid off (1); as where it is made to defeat a plaintiff in an action (m); or where the grantor immediately afterwards realizes all the rest of his property and denudes himself of everything (n); or where he makes the assurance on the eve of entering into a hazardous trade, in which case the onus would fall on him to show that he was in a position to make it (0). A creditor under a voluntary post obit bond is as much entitled to the benefit of this statute as any other creditor (p). It is not necessary for a creditor to have a lien or charge on the property the subject of the settlement to entitle him to a (f) Steel v. Brown, 1 Taunt. 381; Robinson v. McDonnell, 2 B. & Ald. 134; Bessey v. Windham, 6 Q. B. 166; White v. Morris, 11 C. B. 1015; Olliver v. King, 8 De G. M. & G. 110. (g) Oswald v. Thompson, 2 Exch. 215. But see Graham v. Furber, 14 C. B. 410, per Williams, J. (h) Stileman v. Ashdown, 2 Atk. 481; Ware v. Gardner, L. R. 7 Eq. 317; Re Lane Fox, (1900) 2 Q. B. 508. (i) Barton v. Vanheythusen, 11 Ha. 126, 133; Strong v. Strong, 18 Beav. 408. (k) Jenkyn v. Vaughan, 3 Drew. 419; Freeman v. Pope, L. R. 5 Ch. 545; Crossley v. Elworthy, L. R. 12 Eq. (1) Richardson V. Smallwood, Jac. (m) Barling v. Bishopp, 29 Beav. 417; Kidney v. Coussmaker, 12 Ves. 148. (n) Spirett v. Willows, 3 De G. J. & S. 293, 302; Freeman v. Pope, L. R. 5 Ch. 538. (0) Mackay v. Douglas, 14 Eq. 106; Exp. Russell, 19 Ch. D. 588, C. A. (p) Adames v. Hallett, L. R. 6 Eq. 468; Dening v. Ware, 22 Beav. 184, |