and, for the payment of past and future debts, a more full provision was made by the conveyance, than would have otherwise existed. There was no fraud contemplated, nor any evasion of the policy of the bankrupt law, and the transaction at the time of the conveyance appeared to be beneficial to creditors. It was not secret and therefore not injurious to future creditors.

If the property had been personal, and if it had been a conveyance of all, a different question would have been presented; bankruptcy might then have been the necessary consequence.

Such a conveyance of personal property, not followed by possession, would have been within the case of Worsely v. Demattos.

If the conveyance had been made in contemplation of bankruptcy, but for the pretended purpose of raising money to continue the trade, or if in that contemplation the conveyance had been injurious to creditors, or calculated to delay them, it would undoubtedly have been an act of bankruptcy.

Such cases must always turn upon the question of fraud, and whenever the natural consequence of a conveyance was to deprive creditors of rights which they would have otherwise enjoyed, the burden of proof would fall upon the debtor and those who claimed under his assignment. And it would be necessary to show that bankruptcy was not in contemplation, and that the intent of the conveyance was not to disappoint the policy of the law.

Many conveyances and payments by an insolvent trader, followed by a speedy bankruptcy, have been supported on the ground that they were not made voluntarily, but on the threat of legal coercion, when otherwise the preference would have been deemed fraudulent and illegal.

The coercion showed that there was no fraud, that the motive of the debtor was to obtain personal relief, not to prefer a creditor.

The principle upon which these cases proceeded appears to be sound, when bankruptcy was not the necessary consequence of the conveyance.

The presumption of fraud is repelled by the threat of legal diligence.

As when a trader,' in contemplation of bankruptcy, permitted a creditor to have goods in discharge of his debt, under the apprehension of legal process being sued out against him, though these fears were unfounded, it was holden by the court not to be a fraudulent preference; lord Mansfield observing, a party in contemplation of his bankruptcy cannot, by his voluntary act, favor any one creditor,, but, if under fear of legal process, he give a preference, it is evident that he does not do it voluntarily.

And when goods have been given in satisfaction of a debt which was not due, on application for further security, this is not decisive evidence of a fraudulent preference.*

Lord Alvanley said "that it had never been held, that if a creditor press for payment of his debt, and thereby obtain goods, that the intention of the bankrupt shall be called in aid to set aside the transfer. If the goods be delivered. through the urgency of the demand, or the fear of prosecution, whatever may have been in the contemplation of the bankrupt, this will not vitiate the proceeding."

In a case, where the property was given to stay the importunities of a creditor, but there were no threats of legal coercion, the delivery was held to be valid, there having been no voluntary offer on the part of the bankrupt.

4

In another case, it was held that the depositing of goods at the urgency of the defendant as security for a debt not

1 Thompson v. Freeman, 1 T. R. 155.

4

Hartshorn v. Scodden, 2 B. & P. 582.

Smith v. Payne, 6 T. R. 152.

Crosby v. Crouch, 2 Camp. R. 166; S. C. 11 East R. 256.

due, was not a voluntary preference, though the creditor had no immediate right of action.

Lord Ellenborough said: "Strictly, only the acts of a trader subsequent to the bankruptcy are void. Precedent acts, supposed to be in contemplation of bankruptcy, have likewise been invalidated; but this is an excrescence upon the bankrupt laws. The cases upon the subject have gone far, and far enough, and I am not disposed to give them any extension. If the debt had been due here, the preference would certainly not have been fraudulent. It wants voluntariness, in which the fraud consists. The consideration, upon which a payment made to an importunate creditor of a debt actually due has been allowed to be valid, has not been that he might resort to a suit to enforce the payment, but that his demand repels the presumption that the bankrupt, upon the eve of bankruptcy, made a distinction amongst his creditors, and spontaneously favored one to the prejudice of the rest. A demand of further security has the same effect."

Lord Ellenborough, in the above case, manifested a disposition to restrict the decision which made the acts of a trader in contemplation of bankruptcy fraudulent; still he admitted, that when a debtor, on the eve of bankruptcy, spontaneously made a distinction amongst his creditors, there was a presumption of an intent to evade the policy of the bankrupt law.

1

But in another case it was decided that payment of a bill of exchange before it became due was fraudulent.

Lord Eldon submitted the case to the jury as a bargain for a fraudulent preference. The bankrupt had called upon the creditor and disclosed his situation, two days before the bill became due. An alteration was made in the date and time of payment, and the bill was paid. The jury consid

1 Singleton v. Butler, 2 B. & P. 283.

ered the payment fraudulent, and found a verdict accordingly.

If the two last cases are compared, it will be seen that the same result, an actual preference, was effected in each, notwithstanding the different conclusion at which the triers arrived in the two cases.

The fraud is not constructive, nor inferrible necessarily from the invasion of the right of the creditor to the equal distribution secured by the bankrupt law.

There is a presumption of fraud, but the presumption is not irrefragable, as when the debtor conveys his property without consideration. It is sufficient to show that no actual fraud was intended, and if a motive is shown for the act which was not fraudulent, the transaction will be sustained, though it works the same injury to a creditor as if the motive were merely fraudulent. Hence arise the difficulty and doubt which attend cases under the bankrupt law.

It is not sufficient to show that a conveyance operates to make an unequal distribution, that it invades the rights of creditors, and disturbs the policy of the law. A strong presumption of fraud is thus shown; but it is capable of being repelled, by showing the fears, the apprehensions, the mistaken views, and the various motives, not always incompatible with fraud, which may have influenced the conduct of the debtor.

The security of the creditor is not therefore ascertained by known and fixed rules, but may depend upon the uncertain impulses, which influence the mind of his debtor. It may be very difficult also for the triers to determine the motives under which the parties may have acted, and it might not be difficult to simulate a motive, under the supposed existence of which the whole purpose of the law

would be avoided.

1

In the case of De Tastet v. Carroll, property was trans

ferred, under the apprehension of a prosecution for forgery, and lord Ellenborough left it to the jury to determine whether the transfer was voluntary, or made under the apprehension that a degree of force, civil or criminal, was about to be applied, and observed, that every thing which might overcome the free-will of the party was sufficient to exclude voluntary preference. The decision, in this case, is worthy of observation. It turned altogether upon the feelings which influenced the mind of the debtor. In other cases, payments have been sanctioned in the course of business, under legal coercion, brought into application for the purpose of enforcing payment as a duty. But in this case the apprehension of a criminal prosecution was the only motion, and the right of the creditor to any equal distribution was destroyed, because the debtor apprehended prosecution for a crime.

In one case the traders returned a quantity of goods, which they had purchased, because they were obliged to suspend payment, and it was decided that this was not done in contemplation of bankruptcy. The debtors were embarrassed, and in difficulty; but supposed that they had an overplus of £17,000. The court said, "A man may be under temporary difficulties, and yet not stop payment; he may suspend his payments, and yet not be in a state of total insolvency; and he may be an insolvent, and yet not become a bankrupt."

The question depended not upon the act which prevented an equal distribution, and obstructed the policy of the law, but upon the motive of the debtor, and the judgment which he had formed respecting his circumstances. In this case the debtors were mistaken, and their hopes were not realized. If they had reasoned correctly respecting their affairs, the rights of the creditors would have been main

Fidgeon v. Sharp, 1 Marsh. 196; S. C. 5 Taunt. 539.