creditor's naked claim against the property ought to receive the most effective support, and every rule calculated to prevent the debtor from secreting or masking property to be sustained with fortitude and vigour. There is the same reason for the inflexible stability of the rule of law, that a vendor of chattels should not, at the expense of his creditors, sell them and yet retain the use of them, as there is for that greatly admired rule of equity, that a trustee shall not be permitted to buy or speculate in the trust fund on his own account; or for that other salutary and fixed principle, that the voluntary settlement of property shall be void against existing creditors. Such rules are made to destroy the very temptation to fraud, in cases and modes that are calculated to invite it, and be. cause such transactions may be grossly fraudulent, and the aggrieved party not able to show it from the character of private agreements, and the infirmity of human testimony. However innocent such transactions may be in the given case, they are dangerous as precedents, and poisonous in their consequences; and the wise policy of the law connects disability with the temptation, and thus endeavors to prevent impositions, which might be inaccessible to the eye of the court. If a debtor can sell his personal property, and yet, by agreement with the vendee, continue to enjoy it for six years, as in one state, or for sixteen months, as in another, in defiance of his

creditors, who can set bounds to the term of *532 enjoyment, or know when and where to bestow

credit, or how he is to make out a case of actual fraud ? Fraud, in fact, is reluctantly drawn by a jury, and their sympathies must be overcome by strong and positive proof, before they will readily assent to the existence of a fraud ulent intent, which is so difficult to ascertain, and frequently so painful to infer.a

a In 1 Peters' U.S. Rep. 386, the supreme court of the United States waive the question, whether the want of possession of the thing sold constitutes per se a badge of fraud, or is only prima facie a presumption of

(2.) The validity of voluntary assignments of their property by insolvent traders and others, has been another and a fruitful topic of discussion. Under a code of bankrupt law, such assignments giving preferences, are held to be fraudulent, for they interfere with its regulations and policy. But where there is no bankrupt system, these assignments are a substitute for a commission in bankruptcy, and become, like that, of the nature of an execution for the creditors. A conveyance in trust to pay debts is valid, and founded on a valuable consideration.b

fraud; but in the case of Phettiplace v. Sayles, 4 Mason's Rep. 321, 322, the general doctrine, that non-delivery in the sale of chattels, and a continuation of possession in the seller, renders the sale void, is explicitly asserted, as having its foundations in a great public policy. On the other hand, it has been declared by the same court, in D'Wolf v. Harris, 4 Ma. son's Rep. 515, that a bill of sale of a ship and cargo in port is valid, though possession be not taken, provided it appear to have been given by way of mortgage. The notes added to Twyne's case in Smith's Selection of Leading Cases, in the American edition of the Law Library, N. S., vol. 27, contain a full view of the decisions, and especially of the American cases in the federal and state courts, on the great doctrines in Twyne's case, which is perhaps the most celebrated case in the English law, and has given rise to the most protracted and animated discussions. I have endeavoured, in the preceding pages, from p. 515, to give as full a note of the progress of these discussions as the plan of this work would allow.

• As the congress of the United States, since the 4th edition of these Commentaries, enacted a bankrupt law, a wide field of inquiry was opened, as to the question of conveyances fraudulent under that new system. The subject is well discussed on the basis of English authorities in the American Jurist for January, 1843. But the subject ceases to be important, inasmuch as the bankrupt act was repealed March 3d, 1843.

Stephenson v. Hayward, Prec. in Ch. 310. Dey v. Dunham, 2 Johnson's Ch. Rep. 188. Shaw, Ch J., in Russell v. Woodward, 10 Pick. Rep. 413. State of Maryland v. Bank of Maryland, 6 Gill & Johnson, 205. In making assignments of property, the owner cannot assign part only of one entire debt without the consent of the debtor, for that would subject him to distinct demands on one single contract. Gibson v. Cooke, 20 Pick. 15. Nor does the assignee of a voluntary assignment for the benefit of creditors, stand in a better situation than the assignor. Neither he nor the creditors whom he represents are purchasers for a valuable consideration without notice, as against prior equitable liens. Haggarty v. Palmer, 6 Johnson's Ch. Rep. 437. Knowles v. Lord, 4 Wharton, 500. As between

A debtor pending a suit may assign to trustees all his effects for the benefit of all his creditors, and deliver possession, and it will be valida A debtor in failing circumstances, by assignment of his estate in trust, and made in good faith, may prefer one creditor to another, when no bankrupt, or other law prohibiting such preference, and no legal lien binding on the property assigned, exist. This is a well settled principle in the English and American law, and admitted by numerous authorities.b The assent of the creditors to be benefitted by the

different assignees of a chose in action, the one prior in point of time is preferred, though no notice be given, either to the subsequent assignee or the debtor; but notice is requisite to the debtor as between him and the first assignee, in order to protect the latter from payment by the debtor. Muir y. Schenck, 3 Hill, 228. Wood v. Partridge, 11 Mass. Rep. 488. Notice, is, however, requisite under the Scotch law, (which is there termed an intimation) to the debtor, in order to render the assignment a complete preference as against a subsequent assignee. Redfearn v. Ferrier, 1 Dow's Parl. Cases, 50. So in Connecticut, an assignment of debts or choses in action is not valid, as against subsequent purchasers and attaching creditors without notice of such assignment given to the debtor within a reasonble time. The rule in New York is different, and an assignment made in New York of a debt due in Connecticut will be held valid without such notice, on the principle of the lex loci. 14 Conn. Rep. 141. 583.

* Pickstock v. Lyster, 3 M. f. Selw. 371. So a conveyance or transfer of goods, if made by a party in insolvent circumstances, to a creditor, in pursuance of a bona fide demand by the creditor, is not voluntary within the English insolvent act of 7 Geo. IV. Mogg v. Baker, 4 Meeson & W. 348.

o Pickstock v. Lyster, 3 Maule f. Selu. 371. The King v. Watson, 3 Price's Exch. Rep. 6. Wilt v. Franklin, 1 Binney's Rep. 502. Hendricks v. Robinson, 2 Johns. Ch. Rep. 307, 308. Stevens v. Bell, 6 Mass. Rep. 339. Nicoll v. Mumford, 2 Johns. Ch. Rep. 529. Brown v. Minturn, 2 Gall. Rep. 557. Moore v. Collins, 3 Dev. N. C. Rep. 126. Moffat v. M'. Dowall, 1 M'Cord's Ch. Rep. 434. Buffum v. Green, 5 N. H. Rep. 71. Haven v. Richardson, Ibid. 113. Marbury v. Brooks, 7 Wheaton, 556. Brashear v. West, 7 Peters' U. S. Rep. 608. Sutherland, J., in Grover v. Wakeman, 11 Wendell's Rep. 194, 195. State of Maryland v. Bank of Maryland, 6 Gill g. Johnson, 205. Marshall v. Hutchison, 5 B. Monroe, 305. The directors of an insolvent corporation may, equally with individuals, give preferences by assignment of their effects. Catlin v. Eagle Bank, 6 Conn. Rep. 233. State of Maryland v. Bank of Maryland, 6 Gill of Johnson, 205, S. P. Conway, ex parte, 4 Arkansas Rep. 302. See, also,

assignment, has been held, under the New-England attachment and trustee process, to be essential to its validi

supra, p. 315. The law in New Jersey is an exception to the rule in the text. It is made essential there by statute (Elmer's Dig. p. 16,) to the va. lidity of an insolvent's assignment, that it create no preferences, and that it be for the equal benefit of the creditors. An assignment of real and personal property in trust, to pay a favoured creditor, and then to divide the residue rateably among the other creditors, and the surplus, if any, to return, though good in New York, where it was made, was consequently adjudged void as to property, personal as well as real, in New Jersey. Varnum v. Camp, 1 Green's N. J. Rep. 326. So, in Georgia, by statute of 19th December, 1818, all assignments and transfers of property by insolvent debtors, giving preferences, are declared to be fraudulent and void. Prince's Dig. 164. The insolvent act of Massachusetts of 1838, ch. 163, establishes the principle that when a debtor is unable to pay his debts, his property is to be equally divided anjong his creditors, and that if the insolvent debtor has not been guilty of fraud or gross misconduct, he is to be discharged from liability upon surrendering all his property for the benefit of his creditors. The discharge goes to all debts actually proved against his estate, and to all debts founded on contracts made after the statute, if made within the state and to be performed therein and provable under the act, or due to persons resident within the state at the first publication of notice of the proceeding by warrant, and to all demands for goods wrongfully obtained, taken or withheld by the debtor. The statute destroys all voluntary payments, assignments and preferences made in contemplation of insolvency. It is a simple and well digested system of bankrupt law. The proceedings under this law may be commenced on the voluntary application of the debtor himself, or if he omits to do it, then on the application, under certain circumstances, of a portion of the creditors to compel an assignment of his property for the general benefit of the creditors.

The statute of Ohio of 1838, prohibits assignments in trust in contemplation of insolvency, with the design to prefer one creditor to another, and such assignments are made to enure rateably to all. So, the Connecticut act of 1828, declares all assignments of lands, chattels or choses in action with a view to insolvency, to any person in trust for his creditors, or any of them, to be void as to creditors, unless made in writing for the benefit of all the creditors, in proportion to their claims, and be lodged for record in the probate office of the district, and the duty of such trustee is specially regulatod. Statutes of Connecticut, 1838, p. 300. In Pennsylvania, by statute of 24th March, 1818, voluntary assignments, for the benefit of creditors, must be recorded within thirty days, or they are void as against any of the creditors of the assignor without as wetl as within the assignment. It is settled in New York, that a voluntary assignment by an insolvent debtor must declare the uses and settle the rights of creditors under the as.

ty, so far as that the intervening attachment, of another

creditor who is no party to the assignment, issued 533* before *such assent be given, has been preferred.a

But, subject to this qualification, the assent of the creditors need not be given at the time of the assignment; and a subsequent assent in terms, or by actually receiving the benefit of the assignment, will be sufficient.b The assignment has been held to be good against a subsequent attachment, if the creditors had assented to the assignment prior to the attachment;c and the assignment has been supposed to be valid, even without such intervening assent, in the case of an assignment to trustees, for the benefit of the perferred creditors. The legal estate passes and vests in the trustees; and a court of equity will compel the execution of the trust for the benefit of the creditors, though they be not, at the time, assenting,

signment, and not leave it to the assignees, or reserve to himself the right of subsequently doing it. That would be arbitrary and liable to uncertainty and abuse, and such an assignment is fraudulent and void. The debtor must, in the assignment, declare preferences, if any, among his creditors, and he cannot transfer that power to his assignee. Wakeman v. Grover, 4 Paige, 41. Barnum v. Hempstead, 7 Id. 568. Boardman v. Halliday, 10 Id. 223. The right of allowing preferences to be given at all by the insolvent debtor has been strongly condemned by judges in various parts of the United States as inequitable and unjust. 10 Paige, 229.

• Widgery v. Haskell, 5 Mass. Rep. 144. Stevens v. Bell, 6 Ibid. 339. Ward v. Lamson, 6 Pick. Rep. 350. Jewett v. Barnard, 6 Greenleaf's Rep. 381. In Boyden v. Moore, 11 Pick. Rep. 326, it was held, that an assignment in trust to pay the assignee and other creditors who were par. ties, and assenting, was valid. But if not parties, and assenting, an intervening attachment prior to the assent will have preference. So, a voluntary assignment in contemplation of insolvency and giving preferences made in Pennsylvania, is not good in Delaware against a subsequent attachment by a citizen there, of the insolvent's effects in Delaware. Mayberry v. Shiseler, 1 Harrington's Rep. 349.

Marbury v Brooks, 7 Wheaton, 556. Brooks v. Marbury, 11 Ibid. 78. Brashear v. West, 7 Peters' U. S. Rep. 608. Ellison v. Ellison, 6 Vesey, 656. Cunningham v. Freeborn, 1 Edw. Ch. Rep. 262.

e Brown v. Minturn, 2 Gall. Rep. 537. Halsey v. Whitney, 4 Mason's Rep. 217. Hastings v. Baldwin, 17 Mass. Rep. 552.

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