which may make registration absolutely essential to their validity for any purpose; others make recording a condition precedent to the existence of an incumbrance, such as a mechanic's lien. In such cases an unrecorded title is not good even against assignees in bankruptcy. But the interposition of a decree in bankruptcy will not invalidate a lien recorded within the statutory time. Even in Massachusetts, where it was held that unrecorded mortgages of chattels are not binding on assignees in insolvency, the contrary rule prevails as to unrecorded transfers of shares, and goods sold but not delivered.4 § 310. Subject to Equities. As early as the year 1742 Chief Justice Willes, in Scott v. Surman,5 expressed the opinion that even at law nothing vested in the assignees excepting that in which the bankrupt was beneficially interested. He said that his associates did not agree with him, and the case was decided upon another point; but his opinion has prevailed, and equitable defences have ever since been admitted in actions at law brought by assignees, though in actions between other persons it was for some three-quarters of a century after 1742 necessary to file a bill to establish such defences. It became an accepted aphorism that assignees, when plaintiffs at law, must have both the legal and the equitable title; and many eminent judges have expressed their concurrence in this equitable rule.6 § 311. Property held by Bankrupt in Trust. The assignees take nothing which the bankrupt held in trust as executor, trustee, assignee, or otherwise, or as agent or consignee; but as they are entitled to everything of which he had the beneficial 1 Moss v Charnock, 2 East, 399; Bloxam v. Hubbard, 5 East, 407; Ex parte Neilson, 3 DeG. M. & G. 556. 2 Clifton v. Foster, 103 Mass. 233; Re Coulter, 2 Sawyer, 42, Fed. Cas. No. 3276. 3 Bingham v. Jordan, 1 Allen, 373. * Dickinson v. Central Bank, 129 Mass. 279; Dugan v. Nichols, 125 Mass. 43; Sibley v. Quinsigamond Bank, 133 Mass. 515. [And so of an unrecorded deed of land. Smythe v. Sprague, 149 Mass. 310.] 5 Willes, 400; see L'Apostre v. Le Plaistrier, cited 1 P. Wms. 318. 6 See remarks in Mitford v. Mitford, 9 Ves. 87; Tatham v. Andree, 1 Moore P. C. N. s. 386, 410; Fleeming v. Howden, L. R. 1 Sc. App. 372, 380; Cowden v. Pleasants, 9 Penn. St. 59; Gibson v. Warden, 14 Wall. 244, and the decision in Garry v. Sharratt, 10 B. & C. 716. ownership, so they can take nothing of which the beneficial ownership is in others.1 Even if creditors can by process of law attach and hold land or shares standing in the name of the bankrupt, if they have no knowledge that he is not the true owner, this right or power does not pass to the assignees, for they take with notice.2 If the Statute of Frauds requires all trusts of land to be evidenced by writing, it seems to be the better opinion that the bankrupt may declare the trust after the date to which the title of his assignees relates.3 § 312. Property held by Bankrupt in Secret Trust. It has been ruled that if a bankrupt holds the legal title to property on a secret trust for his grantor, in fraud of the creditors of the grantor, he should put the property into his inventory and surrender it to his assignees.* But this may be doubted. It is true that the trust is illegal, but it is nevertheless a trust, and by operation of law a trust for the creditors of a third person. Even if no such creditors appear, the grantee has no equitable interest in the property, and is bound by that honor which is said to exist even with thieves to return it to its former owner. In one case it was held that when the assignees in bankruptcy of such a grantee have obtained possession of the property, their equity is equal to that of judgment creditors of the fraudulent grantors, and therefore that the first in possession is the first in right. This, too, is to be doubted. §313. Assignees bound by Completed Bargains of the Debtor. -The assignees are bound by all the debtor's completed bargains, by his representations and estoppels. For instance, if he 1 Ontario Bank v. Mumford, 2 Barb. Ch. 596; Pratt v. Wheeler, 6 Gray, 520; Gladstone v. Hadwen, 1 M. & S. 517; Scott v. Surman, Willes, 400; Winch v. Keeley, 1 T. R. 619; Dangerfield v. Thomas, 9 A. & E. 292; Ex parte Gennys, Mont. & McA. 258; Ex parte Armitstead, 2 Gl. & J. 371; Thompson v. Giles, 2 B. & C. 422; Nutter v. Wheeler, 2 Lowell, 346, Fed. Cas. No. 10,384; Holmes v. Winchester, 133 Mass. 140; Low v. Welch, 139 Mass. 33 2 See Heritable Reversionary Co. v. Millar (1892), A. C. 598, and cases cited at the argument. 8 Gardner v. Rowe, 5 Russ. 258. 4 Re O'Bannon, 2 N. B. R. 15, Fed. Cas. No. 10,394. 5 Harrison v. Walker, Peake N. P. 111; Gibbs v. Chase, 10 Mass. 125. 6 Aiken v. Edrington, 15 N. B. R. 271, Fed. Cas. No. 111. has represented or agreed that he resided in a certain place;1 that certain fixtures are chattels ; 2 that certain goods have been paid for; that directors of an insolvent company, with whom the plaintiff dealt, had been duly chosen; that a chattel had been delivered; so if he has given an acknowledgment to take a debt out of the Statute of Limitations; has suffered a judgment to be irregularly entered against him. In these and similar cases the assignees are bound if the waiver, estoppel, or laches would be binding on the bankrupt himself under the circumstances; 8 with the single condition that the situation shall not have been contrived between the parties to give the creditor a preference in bankruptcy. § 314. Secret Liens. - In the absence of fraud, a secret lien, valid in law, equity, or admiralty, holds good against assignees in bankruptcy.9 Great loss is often suffered by the general creditors from the operation of this rule; but the remedy is to be found in statutes requiring publicity to be given to liens, rather than in depriving innocent persons of the fruits of their diligence. A latent trust in land, that is, one which has not been recorded, was held by the House of Lords to prevent the land from passing to the assignees.10 And a bankrupt's declaration of trust after the time to which the assignees' title related was held good, if the fact of the trust were proved.11 § 315. Property conveyed in Fraud. Most of the statutes on the subject of bankruptcy expressly vest in the assignees all property conveyed or disposed of by the bankrupt in fraud 1 Allen ". Whittemore, 8 Ben. 485, 586; Ex parte Fairman, 3 Dea. 467; Fed. Cas. No. 241. Mont. & Ch. 125. 2 Ex parte Ames, 1 Lowell, 561, Fed. Cas. No. 323. 8 Harris v. Truman, 7 Q. B. D. 340, 9 Q. B. D. 264. See People v. City Bank, 96 N. Y. 32. 4 Mahony v. East Holyford Co, L. R. 7 H. L. 49; Middleton v. Pollock, 4 Ch. D. 49. 7 Charlesworth v. Ellis, 7 Q. B. 678. 8 See Ex parte Reay, 3 D. & Ch. 175; Jenkins v. Armour, 14 N. B. R. 276, Fed. Cas. No. 7260; Cook v. Sherman, 20 Fed. Rep. 167. 9 In Bayley v. Greenleaf, 7 Wheat. 46, Marshall, C. J., doubts the universality of this rule, but it is now well 5 Re Rockford R. R. Co., 1 Lowell, settled. 345, Fed. Cas. No. 11,978. 10 Heritable Reversionary Co. v. Ex parte Wilson, 1 M. D. & De G. Millar (1892), A. C. 598. 11 Gardner v. Rowe, 5 Russ. 258. of his creditors; and whether expressed or not, they will have the right to set aside such conveyances. "A deed," said Baron Parke, "which is void as against creditors, is void also as against those who represent creditors."1 So Mr. Justice Curtis: "Their [creditors'] remedy is absorbed in the great and comprehensive remedy under the commission." 2 § 316. Assignees may avoid any Deed which Creditors could avoid. Any act, deed, or transaction, therefore, which is voidable by creditors by the law of the debtor's residence, may be avoided by his assignees, whether it was made or done before or after the bankrupt law was passed. Where the bankrupt act itself creates the fraud, its language may be such as to limit the power of the assignees; as where the statute used the word "convey," it was limited to conveyances by deed, and where it spoke only of preferences by gift and transfer, a payment of money, or the creation of a lien or charge, were not voidable. But whatever is fraudulent under any general law or under the bankrupt law may be avoided by the assignees, though creditors could not have maintained a bill without first obtaining judgment at law.5 4 § 317. Assignees' Right exclusive. This right of the assignees to set aside frauds is exclusive of the right of the 1 Doe v. Ball, 11 M. & W. 531. 2 Carr v. Hilton, 1 Curtis C. C. 230, Fed. Cas. No. 2436. 3 Martin v. Pewtress, 4 Burr. 2477; Butcher v. Harrison, 4 B. & Ad. 129; Sands v. Codwise, 4 Johns. Ch. 536; Bank of Alexandria v. Herbert, 8 Cranch, 36; Englebert v. Blanjot, 2 Whart. 240; Waters . Dashiell, 1 Md. 455; Atkinson v. Phillips, 1 Md. Ch. 507; Carr v. Hilton, 1 Curtis C. C. 230, Fed. Cas. No. 2436; Norcutt v. Dodd, Cr. & P. 100; Doe v. Ball, 11 M. & W. 531; Gibbs v. Thayer, 6 Cush. 30; Bank of Leavenworth v. Hunt, 11 Wall. 391; Re Wynne, 4 N. B. R. 23, Fed. Cas. No. 18,117; Bradshaw v. Klein, 2 Biss. 20, Fed. Cas. No. 1790; Allen v. Massey, 1 Dillon, 40, Fed. Cas. No. 231; 17 Wall. 351; Re Meyers, 2 Ben. 424, Fed. Cas. No. 9518; Edmondson v. Hyde, 2 Sawyer, 205, Fed. Cas. No. 4285; Knowlton v. Moseley, 105 Mass. 136; Re Duncan, 14 N. B. R. 18, Fed. Cas. No. 4131; Southard v. Benner, 72 N. Y. 424; Re Leland, 10 Blatch. 503, Fed. Cas. 8234; Pratt v. Curtis, 2 Lowell, 87, Fed. Cas. 11,375; Platt v. Matthews, 10 Fed. Rep. 280; Pittsburg Carbon Co. v. McMillin, 119 N. Y. 46; Act of 1898, § 70 e, infra, § 533. 4 Martin v. Pewtress, 4 Burr. 2477; Clavey v. Hayley, Cowp. 427; Smith v. Hodson, 4 T. R. 211; Livermore v. Bagley, 3 Mass. 487; Dutton v. Morrison, 17 Ves. 193. 5 Platt v. Matthews, 10 Fed. Rep. 280; Re Duncan, 14 N. B. R. 18, Fed. Cas. No. 4131; Southard v. Benner, 72 N. Y. 424; Dudley v. Easton, 104 U. S. 99, 103, per Waite, C. J. creditors themselves and overrides it. In frauds against the bankrupt law itself, it is plain that if such a fraud, for instance, a preference, has been committed, it is inchoate until bankruptcy, and that to set aside a preference to one creditor at the suit of another is merely to substitute one preference for another. It is now entirely settled that a preference or other fraud upon the bankrupt law can be avoided only by the assignees.1 It is equally true, though not so readily perceived, that after a decree in bankruptcy the assignees are the only persons who can avoid acts which are fraudulent under the general laws.2 Charges by creditors that the assignees will not prosecute, or even that they are in collusion with the debtor, are of no avail, because there are easy and direct remedies for such a state of things by obtaining from the court of bankruptcy leave for creditors to sue in the name of the assignees, or in extreme cases by removing them and appointing others.2 That a special 1 Holbird v. Anderson, 5 T. R. 235; Ingliss v. Grant, ib. 530; Meux v. Howell, 4 East, 1; Carr v. Acraman, 11 Ex. 566; Johnson v. Osenton, L. R. 4 Ex. 107; Dodge v. Sheldon, 6 Hill, 9; Atkins v. Spear, 8 Met. 496; Penniman v. Cole, 8 Met. 496; Burt v. Perkins, 9 Gray, 317; Seaman v. Stoughton, 3 Barb. Ch. 344; Maltbie v. Hotchkiss, 38 Conn. 80; Gardner v. Lane, 9 Allen, 492; National Mechanics' & Traders' Bank v. Eagle Sugar Refinery, 109 Mass. 38, (explaining several earlier cases in Massachusetts which seemed to be inconsistent with the true rule); Fenlon v. Lonergan, 29 Penn. St. 471; Shryock v. Basehore, 82 Penn. St. 159; Bourne v. Buffington, 125 Mass. 481; Bromley v. Goodrich, 40 Wis. 131; Talcott v. Harder, 119 N. Y. 536. See Act of 1898, § 60 b, infra, § 523. 2 Spragg v. Binkes, 5 Ves. 583; Benfield v. Solomons, 9 Ves. 77; Saxton v. Davis, 18 Ves. 72; Hammond v. Attwood, 3 Mad. 158; Kaye v. Fosbrooke, 8 Sim. 28; Yewens v. Robinson, 11 Sim. 105; Heath v. Chadwick, 2 Ph. 649; Major v. Aukland, 3 |