were made by the assignee in the performance of a specified condition, the presumption of fraud does not arise (r).

And where the transfer is founded on a good consideration, (either a previous debt, or a price to be paid,) and there is no intention in fact to defraud creditors, the legal presumption of fraud created by the non-delivery of possession does not arise, if the transaction or transfer were a matter of publicity or notoriety. And it seems that, in these cases, the notoriety of the transfer is the question on which the validity or invalidity of the assignment depends. If the assignment be notorious, fraud cannot be inferred from the omission to take possession (s). And it appears, that the want of a change of possession shall not be deemed fraudulent where an intent to defraud is negatived by the facts (t).

This doctrine of presumed fraud does not apply where the party in possession was not the original owner of the goods, and in fact never acquired any property therein, and had nothing more ab initio than the mere occupation of the goods by the consent of the true owner. It is only under the bankrupt act, 6 Geo. IV. c. 16, s. 72, and insolvent act, 1 & 2 Vict. c. 110, s. 52 (u), that the real proprietor of goods who suffers the bankrupt and insolvent to have the apparent ownership, forfeits his right for the benefit of the creditors of the party who was in possession, and was thus enabled to obtain a credit to which he was not entitled. If A. lend B. money to purchase goods, and at the same time A. take a bill of sale of the goods, though B. have the possession, the bill of sale will not on that account be fraudulent, but the transaction will be a valid transaction (v). And it seems, that if A. were himself to buy goods, and lend

(r) See per Buller, J., Edwards v. Harben, 2 T. R. 595, 596; Roberts on Statute of Frauds, 558; Haselinton v. Gill, 3 T. R. 620, note; Armstrong v. Baldock, Gow, R. 35, per Dallas, C. J.; and particularly Martindale v. Booth, 3 B. & Ad. 498; Minshall v. Lloyd, 2 M. & W. 450; Reeves v. Capper, 5 Bing. N. C. 136, 138; 6 Scott, 887.

(s) Armstrong v. Baldock, Gow, R. 33; Wooderman v. Baldock, id., 35, note; 8 Taunt. 676; 3 Moore, 11, S. C.; Hoffman v. Pitt, 5 Esp. R. 25; Reed v. Blades, 5 Taunt. 212; Latimer v. Batson, 4 B. & C. 652; 7 D. & R. 106, S. C.; Leonard v. Baker, 1 M. &

Sel. 251; Kidd v. Rawlinson, 2 B. &
P. 59.

(t) Eastwood v. Brown, 1 R. & M. 312; and Martindale v. Booth, 3 B. & Ad. 498; Reeves v. Capper, 5 New Cases, 138.

(u) Bull. Ni. Pri. 258. Meggott v. Mills, 1 Lord Raym. 286; Kidd v. Rawlinson, 2 B. & P. 60; Smith v. Scott, 2 M. & S. 35; Hickenbotham v. Groves, 2 Car. & P. 492; Watson v. Peuche, 5 M. & Scott, 149; 1 New Cases, 327, S. C.

(v) Dawson v. Wood, 3 Taunt. 260, per cur. see Leonard v. Baker, 1 M. & Selw. 251.

them to B., the want of possession in A. would not be fraudulent, for it has never been decided that a man may not give the possession of his goods to another (x). And where the plaintiff, having purchased a public-house, for which he could not get a license, because he resided in another tavern, put B., an insolvent person, into the house as his servant, and supplied him with money to pay for the license, which was granted to B., it was held by the majority of the judges of the Common Pleas, that the sheriff was not authorised to take the goods in the house, under an execution against B. (y).

We must also remember, that by the express words of the statute, the transfer, however fraudulent against creditors, is operative between the parties themselves, and their representatives after their deaths. Even if there were no consideration, but the transfer were by deed, it would be binding between them as a gift by deed, although no possession were given. If the transfer were without consideration, and possession were delivered, then the assignment, though not by deed, would be good as an executed gift. In any event, the intention to defraud crcditors could only be objected by the creditors themselves (z).

But where there is a good consideration for the bill of sale to a particular creditor, and possession is given before an adverse creditor can obtain execution, the transfer is not invalidated merely by the preference shown to the assignee of the goods (a). Thus, where A., being indebted to B. and C., after being sued to execution by B., went to C. and voluntarily gave him a warrant of attorney to confess a judgment, on which judgment was immediately entered, and execution levied on the same day on which B. would have been entitled to execution, and on which day B. had threatened to sue it out; the preference so given by A. to C. was held by the court not to be unlawful, or fraudu

(r) See note (v), preceding page. (y) Dawson v. Wood, 3 Taunt. 256. (2) Steel v. Brown, 1 Taunt. 381; Baker v. Lloyd, Bull. N. P. 258; Hawes v. Leader, Cro. Jac. 270; Yelv. 196, S. C. Robinson v. Macdonnell, 2 B. & Ald. 134; Doe v. Roberts, id., 367; Deady v. Harrison, 1 Stark. R. 60. That a gratuitous gift of goods is not binding on the parties, unless it be by deed, or unless possession be

delivered, see Irons v. Smallpiece, 2 B. & Ald. 551; see Hewlins v. Shippam, 5 B. & C. 228; 7 D. & R. 783, S. C.; ante, 51.

(a) The bankrupt act, 6 Geo. 4, c. 16, s. 82, and the insolvent debtors' act, 1 & 2 Vict. c. 110, s. 59, invalidate preferences in contemplation of bankruptcy or discharge as an insolvent. And see ante, 193; and Knight v. Ferguson, 5 Mee. & W. 389.

lent, within the statute of Elizabeth (b). And where a debtor, being in insolvent circumstances, and having been sued by a creditor pending the suit, and before execution, executed an assignment of all his effects to trustees for the benefit of all his creditors, under which assignment possession was immediately taken; it was held, that the assignment was not fraudulent, though made with intent to delay the creditor suing of his execution. The Court considered it so far from being fraudulent, that it was the most honest act the party could do, arising out of a discharge of the moral duties attached to his character of debtor, to make the fund available for the whole body of the creditors (c); but an assignment authorizing the trustees to carry on the debtor's trade, and containing such terms that the creditors subscribing it would become partners in the business, is not valid against creditors who do not execute it, they not being bound to submit to such terms (d).

If a person having several creditors convey by deed the legal estate in part of his real and personal property, to a trustee in trust (after deducting the expenses respecting the trust), out of the rents and profits to pay half the surplus to the grantor for his own use, and the residue among certain creditors named in the schedule, without any intention of fraudulently delaying the creditors not named in the schedule in obtaining their demands, the deed is good in law (e).

It seems that the change of possession necessary to rebut the inference of an intention to defraud creditors, must be substantial, bonâ fide, and exclusive; and consequently that the sale or assignment will be considered fraudulent and void, and the assignor's possession colourable, if the goods be left upon the premises of the assignor, and in his apparent disposal and order; although the vendee or his servant enter upon the premises, and be also in possession of the goods (f); this is, however, applicable only to assignments in presenti, for where an assignment made to secure an annuity contained a power to seize the

(b) Holbird v. Anderson, 5 T. R.

235.

(c) Pickstock v. Lyster, 3 M. & Selw. 371; The King v. Watson, 3 Price, 6, accord; see also Meur v. Howell, 4 East, 1. As to when such a deed would be void as a fraudulent preference under the insolvent act, see

Binns v. Townsey, S N. & P. 91; Davies v. Acocks, 2 C., M. & R. 461; and see Knight v. Ferguson, 5 Mee. & W. 389.

(d) Owen v. Body, 5 Ad. & E. 37. (e) Estwick v. Caillaud, 5 T. R. 420. (f) Paget v. Perchard, 1 Esp. R. 205; Wordall v. Smith, 1 Camp. 333; Benton v. Thornhill, 7 Taunt. 149.

goods on default of payment, the not taking possession immediately on default was held not to avoid the assignment (g).

By the statute 7 & 8 Geo. IV. c. 29, s. 57, the owner of goods, obtained from him by false and fraudulent pretences, with intent to defraud him, is entitled to restitution, notwithstanding any intermediate bonâ fide sale, provided such owner prosecute the offender to conviction; and a writ of restitution shall be awarded. There are exceptions in the case of a valuable security, if it appear before the order for restitution is made, that it was bonâ fide paid by the party liable thereon; and of negociable instruments, bonâ fide and without notice or suspicion, taken or received by transfer or delivery for a valuable consideration. The original owner's property in the goods is not, however, divested by the fraud, though the law, as a matter of policy, postpones his right to recover until after the conviction of the offender (h).

In Irving v. Motley (i), Tindal, C. J., said, "It is put very forcibly, that it would be very dangerous to lay down the rule, where a person purchases commodities, which at the time he is conscious he shall be unable to pay for, that, though those goods may have afterwards passed through other hands in the fair way of purchase, the original seller shall have a right to recover them, whosoever hands they may be in. I agree to the truth of that proposition."

If a defendant sell his goods bonâ fide, and for a valuable consideration, before the delivery of the writ to the sheriff, they cannot be taken in execution (k); and though he sell them fraudulently, yet, if they be afterwards sold to another bonâ fide, they are not liable to be taken in the hands of the second vendee (1); although in general a second vendee of a chattel cannot stand in a better situation than his vendor (m).

Action for Deceit.-Although a vendor is at liberty to vacate

a contract for the sale of goods in cases of fraud, and may bring trover, he is not bound to adopt that remedy. He may affirm the contract and maintain an action on the case (n), to recover damages for the fraud or deceit. This action is maintainable by the vendee; although it was agreed, that if he disliked the goods, the seller should exchange them for others of cqual value (o); and although there was a written agreement, and the fraudulent representation had reference to collateral matters not expressly noticed therein (p). And there may be a fraudulent representation sufficient to avoid a contract, and to be ground for an action of deceit, without any actual active declaration from the party contracting; as where a vendor knowingly permits a third party to make a false representation, and the vendee to contract under the impression that it is true (q).

So an action on the case for deceit may be maintained for falsely warranting a gun to be safe whereby the plaintiff, for whose use it was bought, and who used it, was injured, though the plaintiff were no party to the contract for the purchase of the gun, and the representation were not made to him (r). But the action does not lie against a person making an untrue representation, if he did not know it to be untrue (s).

In Vernon v. Keys (t), which was an action on the case for deceitful representations, whereby the plaintiff was induced to sell his interest in certain buildings, trade, and stock, at a less price than he otherwise would have taken, Lord Ellenborough, in delivering the judgment of the court, said, "To support the action, there must be a fraud clearly alleged to have been committed by the defendant, and a damage resulting from such fraud to the plaintiff. The fraud must consist in depriving the plaintiff, by deceitful means, of some benefit which the law entitled him to demand or expect." "A seller is unquestionably liable to an action of deceit, if he fraudulently misrepresent the

(n) See 2 Chitty Pl. 6th ed. 480; 2 Chit. jun. Prec. Plead. 528; 3 Chitty Com. L. 306; Miles v. Dell, 3 Stark. R. 23 Indictment for conspiracy to sell an unsound horse; Rer v. Pegwell, 1 Stark. R. 402; see Rex v. Gill, 2 B. & Ald. 204.

(0) Wallace v. Jarman, 2 Stark. R. 162.

(p) Dobell v. Stevens, 3 B. & C. 623; 5 D. & R. 490, S. C.; Meyer v.

Fxerth, 4 Camp. 23, per Lord Ellenborough, C. J.; see ante, 108, 113.

(q) Pilmore v. Hood, 5 New Cases, 99; 6 Scott, 827; 7 Dowl. P. C. 136, S. C.

(r) Langridge v. Levy, 2 M. & W. 519, affirmed in error, 4 M. & W. 337. (s) Freeman v. Baker, 5 B. & Ad.

797.

(t) 12 East, 632, affirmed in error, 4 Taunt. 488.