debtor is not a fraud upon his creditors where the grantee assumes the payment of their claims. Old Nat. Bank v. Heckman, 148 Ind. 490 (47 N. E. Rep. 953). A conveyance made and accepted with an intention to defraud creditors will be held void as to them, although the grantee paid a valuable consideration therefor. Conley v. Buck, 100 Ga. 187 (28 S. E. Rep. 97). Where debtors for the purpose of defeating their creditors enter into a fraudulent agreement with a landowner, whereby they gratuitously furnish him with materials for the erection of improvements on his real estate, their creditors may have a lien thereon to the extent of the materials so furnished. People's Nat. Bank v. Loeffert, 184 Pa. St. 164 (38 Atl. Rep. 996). A testator's widow to whom he has devised all of his property during her widowhood with full power and authority to dispose of the same by her last will and testament in any manner she may think proper, cannot exercise such power in favor of volunteers to the exclusion of her creditors. Freeman's Adm'r v. Butters, 94 Va. 406 (26 S. E. Rep. 845). The fact that a conveyance executed by an insolvent to one to whom he occupied the position of parent, was in discharge of a promise not legally binding on him, will not render it valid, where the other facts surrounding the transaction are such as to show that it was a fraud upon his creditors. Gamet v. Simmons, 103 Ia. 163 (72 N. W. Rep. 444). Where one holding the legal title to lands in trust for another, although in a manner not authorized by the statute, executes the trust by a conveyance of the lands to his beneficiary, before his creditors acquire any lien thereon, they cannot assail such conveyance for fraud, all the parties thereto having acted in good faith, it not appearing that they extended credit to him in reliance upon his ownership of the property. Wis. Rev. Stat., § 2090, construed. Strong v. Gordon, 96 Wis. 476 (71 N. W. Rep. 886).

Sec. 373. Voluntary conveyances. In the absence of actual fraud, a voluntary conveyance will be sustained, where, at the time of its execution, the debtor retains sufficient property to pay all his existing debts. Fair Haven Marble & M. S. Co. v. Owens, 69 Vt. 246 (37 Atl. Rep. 749). The voluntary conveyance by a debtor corporation of

all its property to another corporation owned by the same stockholders, may be avoided by the grantor's creditors. Mason v. Fischer & Burnett Lum. Co., Miss. (21

So. Rep. 5). Where the judgment of a creditor, taken after the execution of a fraudulent conveyance by his debtor, embraces several items of indebtedness, some of which accrued after the conveyance was made and recorded, it will be held void only as to that part of the debt incurred before its execu. tion. Cole v. Brown, 114 Mich. 396 (72 N. W. Rep. 247). A failing debtor's conveyance to his wife to pay a debt, will be treated as voluntary to the extent the value of the property exceeds the debt. Hansen v. Gregory, Ia. (73 N. W. Rep. 478). A voluntary conveyance by a husband to his wife is void as to his creditors. The fact that a conveyance from a husband to his wife is made in pursuance of a verbal antenuptual agreement between them which is void under the statute of frauds, does not show such a consideration as will allow such conveyance to prevail over the rights of his creditors acquired while the property was in him. Keady v. White, 168 Ill. 76 (48 N. E. Rep. 314). Applying Md. Code, art. 45, § 1, which makes a voluntary conveyance from a husband to his wife void as against existing creditors, it is held that it is not error for a court on setting aside such a conveyance to decree it absolutely null and void to all intents and purposes whatsoever," where it is further directed by the decree that the property be sold and the proceeds be brought into court to be distributed under its direction. Norberg v. Ricords, 84 Md. 568 (36 Atl. Rep. 116).

"

Sec. 374. Insolvency of debtor as affecting his deed -What constitutes insolvency. Where prior creditors assail their debtor's mortgage as fraudulent, which has been given for a valuable consideration, they must show that he was embarassed financially at the time of its execution, of which fact the mortgagee had notice or knowledge of facts calculated to put him on inquiry. Roden v. Ellis, 113 Ala. 652 (21 So. Rep. 71). In discussing what constitutes insolvency and its effect upon a voluntary conveyance by a debtor, the supreme court of Georgia, in the case of Cohen v. Parish, 100 Ga. 835 (28 S. E. Rep. 122), say: "In the case of

Powell v. Westmoreland, 60 Ga. 572, it was held that notes and accounts and other evidences of debt are property, and should be counted as such in the issue of the solvency or insolvency of the grantor or donor.' This being true, it follows necessarily that cash in hand, whether coin, currency, or bank notes, is also property, to be counted in determining the question of solvency or insolvency. Insolvency,' as applicable to a case of this kind, has been similarly defined by other courts and text writers. Insolvency, then, is the inadequacy of the debtor's means, with all of his whole means or resources (including not only money or its equivalent, but property in its most extensive sense), for the payment of all his debts. Debts are paid with property; and so long as a debtor is in possession of means of any kind with which or out of which he can himself at once discharge all liabilities in full, or out of which his creditors can collect their debts by legal process, it is hardly necessary to say that he cannot be considered insolvent, in the sense now under consideration.' Burrill, Assignm. § 43; Herrick v. Borst, 4 Hill 650. In the case of Toof v. Martin, 13 Wall. 40, Mr. Justice Field, in the opinion, says: The term "insolvency" is not always used in the same It is sometimes used to denote the insufficiency of the entire property and assets of an individual to pay all his debts. This is its general and popular meaning.' 'Insolvency is the inadequacy of a man's funds to the payment of his debts.' Wait, Insol. Corp., p. 41, § 29. See, also, Bouvier's and Anderson's Law Dictionaries, Solvency' and Insolvency'; and the same in 11 and 12 Am. & Eng. Enc. Law. It is needless to multiply authorities. If the property of a person, whether real or personal, tangible or intangible, leviable or nonleviable, be in value more than sufficient to discharge all his debts, such person can in no proper sense be termed an insolvent.' But, while such person would not be insolvent, still, if, by a voluntary conveyance, he should deprive himself of all property which would be subject to legal process, such conveyance, as to creditors, would be prima facie fraudulent; and it would be incumbent on the grantee to show, not only that the grantor was solvent, but that the conveyance was made in good faith and not with the intention to hinder, delay, or defraud his creditors. Cothran v. Forsyth, 68 Ga.

sense.

Y." Particular evidence held insufficient to show that a poration was insolvent. In re Bloomfield Woolen Mills, 101 La. 181 (70 N. W. Rep. 115). Md. Code, art. 47, § 24, construed and applied-deeds executed in contemplation of solvency. Applegarth v. Wagner, 86 Md. 468 (38 Atl. Rep. 940).

Sec. 375. Preference of creditors. An insolvent or Failing debtor may pay or secure one or more of his creditors the exclusion of others equally meritorious, even if, by so doing, he exhausts the whole of his property. Vietor v. Glover, 17 Wash. 37 (48 Pac. Rep. 788; 40 L. R. A. 297); Kincaid v. Irvine, 140 Mo. 615 (41 S. W. Rep. 963); John

v. Johnson, 101 Ia. 405 (70 N. W. Rep. 598). The prefence may be made by the giving of a mortgage. Union Nat. Bank v. State Nat. Bank, 168 Ill. 256 (48 N. E. Rep. 19); McMorran v. Moore, 113 Mich. 101 (71 N. W. Rep.

5); Cathcart v. Grieve, 104 Ia. 330 (73 N. W. Rep. 835); Fanson v. Johnson, 101 Ia. 405 (70 N. W. Rep. 598). An strument creating a preference is not affected by the motive the debtor where the creditor taking it has done nothing proper. Union Nat. Bank v. State Nat. Bank, 168 Ill. 256 18 N. E. Rep. 169); Johnson v. Johnson, 101 Ia. 405 (70 N. W. Rep. 598). A trust deed executed to prefer a creditor is not invalidated by the fact that it was executed by the grantor and received by the grantee as trustee with an intent to prewent a prosecution of the grantor for a felony in his transactions with creditors of which the preferred creditor had no notice. Jones v. Cullen, 100 Tenn. 1 (42 S. W. Rep. 873). Where a conveyance giving a preference is for the security of several claims, some of which are fraudulent, it will be susEined in favor of those which are valid. Vietor v. Glover, 17 Wash. 37 (48 Pac. Rep. 788; 40 L. R. A. 297). A failing

insolvent debtor having the right to prefer creditors, may prefer his relatives who are his bona fide creditors; but the Burden is upon them to show good faith in the transaction. National Bank of Commerce v. Chapman, 50 Neb. 484 (70 N. W. Rep. 39). The wife of a failing debtor may be his preferred creditor. Sprague v. Benson, 101 Ia. 678 (70 N. W. Rep. 731); Heiney v. Lontz, 147 Ind. 417 (46 N. E. Rep.

665). And so may his children.

Citizens' State Bank v.

Weston, 103 Ia. 736 (72 N. W. Rep. 542).

Construing Hill's Ann. Or. Laws, § 3173, providing that "no general assignment of property by an insolvent or in contemplation of insolvency shall be valid unless it shall be made. for the benefit of all the creditors in proportion to the amount of their respective claims," it is held that the provisions of the statute are confined to general assignments for the benefit of creditors made by an insolvent debtor or in contemplation of insolvency, and the statute does not affect the common law right of a debtor to prefer one creditor to another, if done in good faith. Ladd v. Johnson, 32 Or. 195 (49 Pac. Rep. 756). Citing, Inman, Poulsen & Co. v. Sprague, 30 Or. 321 (47 Pac. Rep. 826); Sabin v. Wilkins, 31 Or. 450 (48 Pac. Rep. 425) ; Loomis v. Stewart, 75 Ia. 387 (39 N. W. Rep. 660); Campbell v. Iron Co., 9 Colo. 60 (10 Pac. Rep. 251). Applying Minn. Gen. Stat. 1894, § 4243, it held that to render a conveyance voidable under this statute on account of its being made to prefer creditors, an intent on the part of the debtor to give or allow a preference to one creditor over others must be shown. A conveyance of or lien upon land cannot be avoided by a purchaser of the property from an assignee in insolvency on account of its constituting a preference in violation of the statute. This can only be done by the assignee or receiver himself by legal proceedings instituted for that purpose. Fisher v. Utendorfer, 68 Minn. 226 (71 N. W. Rep. 29). It cannot be held as a matter of law, that because a technically insolvent merchant or trader suffers an action to be commenced against him upon a claim against which he has no defense, by creditors who know him to be technically insolvent, and allows a judgment to be entered and docketed against him for want of answer, which judgment becomes a lien upon real property, the debtor intended to permit the judgment creditors to obtain unlawful preference. Bean v. Scheffer, 68 Minn. 33 (70 N. W. Rep. 854). This case is supported by, Fisher v. Utendorfer, 68 Minn. 226 (71 N. W. Rep. 29).

Sec. 376.

Preference of creditors by partners and corporations. Partners may prefer their creditors the same Vietor v. Glover, 17 Wash. 37 (48 Pać.

as other persons.