must be clearly proved. This is true of an Englishman domiciled abroad.1 Our statutes, as we have seen, apply only to residents; and, accordingly, the act defined in the law of 1867 was to depart from the State, District, or Territory of which the debtor is an inhabitant, that is, resident, as before defined. It may, therefore, be committed by a removal to another State or District within the United States, as well as by departing from the United States. It is not the purpose of the statute to interfere with the freedom of debtors in travelling for business or pleasure; but if the natural consequence of the act is to delay creditors, the intent may be presumed, or it may be proved by the debtor's declarations.3 That creditors have or have not been delayed, is pertinent evidence on this issue; and if they have been, the fact is almost conclusive; but if the intent is proved in any mode, the act is complete at the instant of departure, and before any creditor has been delayed.5 Some of the English cases relate to departure from the dwelling-house, or "otherwise absenting himself," or other acts which are not acts of bankruptcy with us; but upon the point of intent they are pertinent. § 34. Remaining absent. Remaining absent with like intent. This act was added by 6 Geo. IV., c. 16, § 3, because there was much doubt whether, if the original departure were innocent, the debtor could be made bankrupt by any subsequent change of mind or circumstance. 1 See Williams v. Nunn, 1 Taunt. 270; Pleasants v. Meng, 1 Dall. 380; Windham v. Paterson, 1 Stark. 144, 2 Rose, 466; Ex parte Crispin, L. R. 8 Ch. 374; Ex parte Gutierrez, 11 Ch. D. 298; Ex parte Brandon, 25 Ch. D. 500. 2 Ramsbottom v. Lewis, 1 Camp. 279. 8 See Lloyd v. Heathcote, Moore, 129; Ex parte White, 3 Ves. & B. 128; Ex parte Harris, 2 Rose, 67; Ex parte Goater, 22 W. R. 935. 4 Ex parte Kilner, 2 Dea. 324; Young v. Wright, 6 Taunt. 540; Fisher v. Boucher, 10 B. & C. 705; Ex parte Actual delay held 5 See Robertson v. Liddell, 9 East, 487; Harvey v. Ramsbottom, 1 B. & C. 55; Wydown's Case, 14 Ves. 81; Ex parte Geisel, 22 Ch. D. 436. 6 Ex parte Bunny, 1 De G. & J. 309; Ex parte Kirkman, 3 D. & Ch. 450. Act of 1867, § 39, 14 Stat. 536; R. S. § 5021. § 35. Concealment. -The statute next mentions concealment of the debtor to avoid arrest or the service of legal process, and, presently after, concealment or removal of his property to avoid process. The act and intent being proved, it is immaterial that no process has been actually issued.1 Concealment of property includes not only a physical act, but also a concealment of title by fraudulent or fictitious transfers, or by suffering fictitious judgments.2 Legal process does not mean such as issues from courts of common law only, but such as any court may issue by which a debt can be recovered; and has been held to include a proceeding for the examination of a debtor to discover property, or for the appointment of a receiver. But property exempted from process cannot be the subject of this fraud; though if a statute brings a new kind of property within the scope of process, the existing statutes against, frauds will at once apply to it.5 6 § 36. Fraudulent Transfer. Or makes a fraudulent transfer of his property. Transfer is defined in section 1 of the statute to mean any payment, gift, sale, or other mode of parting with property or the possession of property, absolutely or conditionally. A fraudulent transfer is one that is made. so by the law of the State or place governing the transaction; or by the bankrupt law itself, not being fraudulent at common law. As to the former, the reader is referred to the treatises upon the subject of fraud and fraudulent conveyances. The principal acts which are conventional frauds upon the law of 1 Chenoweth v. Hay, 1 M. & S. 676; Robson v. Rolls, 9 Bing. 648; Ex parte Bamford, 15 Ves. 449; Wilson v. Norman, 1 Esp. 334; Rouch v. Great W. R. Co., 1 Q. B. 51; Fox v. Eckstein, 4 N. B. R. 373, Fed. Cas. No. 5009; Warner v. Barber, Holt N. P. 175; Ex parte Bamford, 15 Ves. 449. See infra, $ 466. 2 O'Neil v. Glover, 5 Gray, 144, distinguishing Livermore v. Bagley, 3 Mass. 487; Re Williams, 1 Lowell, 406, Fed. Cas. No. 17,703; Fisk v. Creditors, 12 Cal. 281. Brock v. Hoppock, 2 N. B. R. 7, Fed. Cas. No. 1912; Hardy v. Bininger, 4 N. B. R. 262, Fed. Cas. No. 6057; Hardy v. Clark, 3 N. B. R. 385, Fed. Cas. No. 6058; Re Wash. Ins. Co., 2 Ben. 292, Fed. Cas. No. 17,246; Re Merchants' Ins. Co., 3 Biss. 162, Fed. Cas. No. 9441. 4 See Greenwood v. Churchill, 1 Myl. & K. 546; Mather v. Fraser, 2 K. & J. 536; Fry v. Malcolm, 5 Taunt. 117; Ex parte Smith, 3 M. D. & De G. 144. 5 Sims v. Thomas, 12 A. & E. 536; Edwards v. Cooper, 11 Q. B. 33. 6 See Act of 1898, § 1 (25). bankruptcy, and not at common law, are assignments for the benefit of creditors, and preferences. § 37. General Assignments.—A general assignment by an insolvent debtor for the benefit of his creditors has been held an act of bankuptcy by the courts of England for more than a century, though no creditor was preferred; and the assignment was of itself evidence of insolvency. The criticism of the early decisions, which is still repeated by some learned authors and judges, and which applies equally to the judge-made fraud called a preference, was, that no such fraud was known to the common law or to the statute 13 Eliz., c. 5, as originally expounded. This is true; but the answer is, that when a statute created a system of which the equality of creditors is an essential part, the preference of one creditor to another became constructively fraudulent; and when this statute provided stringent modes of relief by the summary examination of the debtor, by criminal sanctions, and by giving powers of intervention to creditors, it became a constructive fraud for the debtor to evade these remedies, to appoint his own assignees, and to put his property in a course of distribution which could only be regulated by a bill in equity. In this country the authorities are not entirely harmonious, and decisions and opinions of able jurists can be cited which maintain that such assignments are not invalid.2 It is true that such conveyances cannot be impeached excepting by an assignee in bankruptcy, and that if more than 1 Kettle v. Hammond, Cooke, 8th ed., p. 106; Eckhardt v. Wilson, 8 T. R. 140; Tappenden v. Burgess, 4 East, 230, Simpson v. Sikes, 6 M. & S. 295; Stewart v. Moody, 1 C. M. & R. 777; Binns v. Towsey, 7 A. & E. 869; Thompson v. Jackson, 3 M. & G. 621; Jackson v. Thompson, Q. B. 887; Turner v. Hardcastle, 11 C. B. N. S. 683; Ponsford v. Walton, L. R. 3 C. P. 167; Re Wood, L. R. 7 Ch. 302, per Mellish, L. J.; Act of 1898, § 3 (4); infra, § 466. 2 Sedgwick v. Place, 1 N. B. R. 673, Fed. Cas. No 12,622; Langley v. Perry, 2 N. B. R. 596, Fed. Cas. No. 8067 (explained in Globe Ins. Co. v. Cleve land Ins. Co., 14 N. B. R. 311, Fed. Cas. No. 5486); Re Wells, 1 N. B. R. 171, Fed. Cas. No. 17,387; Re Kintzing, 3 N. B. R. 217, Fed. Cas. No. 7833; Haas v. O'Brien, 66 N. Y. 597; Burrill on Assignments, 4th ed., pp. 69 et seq., 6th ed., pp. 42 et seq.; Hewitt v. Northrup, 75 N. Y. 506. six months pass before the bankruptcy, they cannot be impeached at all.1 But the great weight of authority, as well as of reasoning, was in favor of their being acts of bankruptcy.2 The simple reason is that the debtor appoints his own assignee, and escapes examination, validating preferences, and generally avoiding the statute. The rule applies to an assignment or the appointment of a receiver with the powers of an assignee, under the statute of a State, and by order of a State court, if procured by the debtor.2 The statutes in England have adopted the decisions of the courts.3 A deed or transfer which is incomplete, as, if it is still in escrow, or is not signed by the debtors or assented to by all the creditors, if such signatures and assent are conditions precedent to its taking effect, is not an act of bankruptcy, because it is not an act at all. In two English cases, which are still cited as authority, deeds which were found in possession of a bankrupt were held to be such acts; but those decisions are founded 1 Mayer . Hellman, 91 U. S. 496; Boese v. King, 108 U. S. 379. 2 Re Hurst, 7 Wend. 239; Barton v. Tower, 5 Law Reporter, 214, Fed. Cas. No. 1085; McLean v. Meline, 3 McLean, 199, Fed. Cas. No. 8890; McLean v. Johnson, 3 McLean, 202, Fed. Cas. No. 8883; Re Randall, Deady, 557, Fed. Cas. No. 11,551; Gassett v. Morse, 21 Vt. 627; Spicer v. Ward, 3 N. B. R. 512, Fed. Cas. No. 13,241; Re Burt, 1 Dillon, 439, Fed. Cas. No. 2210; Re Goldschmidt, 3 Ben. 379, Fed. Cas. No. 5520; Re Smith, 4 Ben. 1, Fed. Cas. No. 12,974; Hardy v. Clark, 3 N. B. R. 385, Fed. Cas. No. 6058; Platt v. Archer, 6 N. B. R. 465, Fed. Cas. No. 11,213; Hardy v. Bininger, 4 N. B. R. 262, Fed. Cas. No. 6057; Cragin v. Thompson, 12 N. B. R. 81, Fed. Cas. No. 3320; Barnes v. Rettew, 8 Phila. 133; Barnwall v. Jones, 14 N. B. R. 278, Fed. Cas. No. 1027; Globe Ins. Co. v. Cleveland Ins. Co., 14 N. B. R. 311, Fed. Cas. No. 5486; Harding v. Crosby, 17 Blatch. 348, Fed. Cas. No. 6050; Boese v. King, 108 U. S. 379, 385, per Harlan, J.; Re Kasson, 18 N. B. R. 379, Fed. Cas. No. 7617; Platt v. Preston, 19 N. B. R. 241, Fed. Cas. No. 11,219; Re Kraft, 4 Fed. Rep. 523; Re Mendelsohn, 12 N. B. R. 533, Fed. Cas. No. 9420; Re Lawrence, 18 N. B. R. 516, Fed. Cas. No. 8133; Macdonald v. Moore, 15 N. B. R. 26, Fed. Cas. No. 8763; Re Safe Dep. and Sav. Inst., 7 N. B. R. 392, Fed. Cas. No. 12,211; Re Troth, 1 Fed. Rep. 405; Steel Co. v. Manchester Bank, 163 Mass. 252. Wyles v. Beals, 1 Gray, 233, shows very clearly the inconsistency of such an assignment with the provisions of the bankrupt law of Massachusetts, though the decision that an attaching creditor could avoid the assignment is inequitable, and has been changed in Massachusetts. 8 B. A. 1883, § 4 a. See Act of 1898, § 3 (4). 4 Bowker v. Burdekin, 11 M. & W. 128, and cases in the next note. They are all dicta. 5 Pulling v. Tucker, 4 B. & A. 382; Botcherby v. Lancaster, 1 A. & E. 77. upon a policy arising out of the doctrine of relation, which does not obtain in this country. If, however, a transfer is capable of being acted on, and of producing a fraudulent effect. it is no defence that it could not be given in evidence in ordinary cases, for want of a stamp, or that it is voidable or revocable, or may be defeated by breach of a condition subsequent.1 § 38. Procuring Judgment. Or, with intent to defraud his creditors, procures or suffers judgment against him, or gives a warrant to confess judgment, or judgment note, with like intent. Such an act would come within the scope of a preference by giving security; or if it were followed by a seizure of property, and was so intended, would be a fraudulent transfer,2 but the transfer would not be complete until seizure. This clause gives creditors the right to proceed as soon as the security has been given by the debtor, with the intent to defraud, without waiting for action under it. § 39. Knowledge of Transferee. — In ascertaining the bankruptcy of a debtor for any of the acts involving intent, it is by our law immaterial whether the other party, the transferee, grantee, or preferred creditor, has knowledge of the intent.* This is true as a general proposition in the jurisprudence of England. But an exception was there made in the case of sales and mortgages, because the title of the assignee, relating back to the act, might have destroyed the property of an innocent purchaser. Though this is no longer the law of England, the exception remains. No such injustice can be worked under 1 Tappenden v. Burgess, 4 East, 230; Dutton v. Morrison, 17 Ves. 193; Back v. Gooch, 4 Camp. 232; Ex parte Treherne, 2 De G. F. & J. 656; Ex parte Wensley, 1 De G. J. & S. 273; Ponsford v. Walton, L. R. 3 C. P. 167; Ex parte Squire, L. R. 4 Ch. 47; Hobson v. Thelusson, L. R. 2 Q. B. 642; Lees v. Whitely, L. R. 2 Eq. 143. 2 Thompson v. Freeman, 1 T. R. 155; Clarion Bank v. Jones, 21 Wall. 325; Buckingham v. McLean, 13 How. 151; Doe v. Carter, 8 T. R. 300; Sharpe v. Thomas, 6 Bing. 416; Croft v. Lum ley, 5 Ellis & B. 648, affirmed, 682; Stevenson v. Newnham, 13 C. B. 285; Edwards v. Cooper, 11 Q. B. 33. See infra, § 466. 8 Belcher v. Gummow, 9 Q. B. 873. 4 Re Drummond, 1 N. B. R. 231, Fed. Cas. No. 4093. 5 Ex parte Simpson, 1 De G. 9: Smith v. Cannan, 2 Ell. & B. 35; Hall v. Wallace, 7 M. & W. 353. 6 Baxter v. Pritchard, 1 A. & E. 456; Rose v. Haycock, 1 A. & E. 460; Re Colemere, L. R. 1 Ch. 128. |