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Henry St. George Tucker.

Commentaries on the laws of Virginia, comprising the substance of a course of lectures delivered to the Winchester law school: (Volume 1) online

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will agree to give time upon receiving a deed of ttust or mortgage upon
real or personal property. As where A being indebted to B, gave him a
deed of trust on lands and slaves, payable three years after date. It lias
not been, and probably would not be decided, that this is void, unless some
intent to delay or defraud appears, since a debtor may prefer one creditor
to another, if he acts bona fide. Yet see 2 T. R. 5'ji, in notes. In such
ease, however, the other creditor's remedy is to proceed with despatch to
get his judgment, and extend the lands, and proceed in equity against the
slaves subject to the deed of trust : so that he acquires at least the interme-
diate value in payment of his debt.

It has been long the established doctrine in England, that an execution
cannot be levied on personal property, conveyed by a debtor in trust for the
payment of debts so as to reach the possible residuary interest of the mort-
gagor therein. 8 East, 467. 4John.C. G90. 5 John, Rep. 335. 2 John.
283. Our statute has been deemed to be more comprehensive than the
English statute, which subjects trust estates to the payment of debts. It
is believed to embrace both personal and real estate ; and an opinion has
been intimated, that where the cestui que trust has an immediate equitable
right to the possession and enjoyment of the property, it may now be reach-
ed by an execution at law. But even now it cannot, it seems, be the sub-
ject of such execution where the rights of the cestui que trust are only co7i-
tingent, and his interest unascertained. Such is the case of the mortga-
gor of personal property, whose equity of redemption, it would seem, can-
not be reached by a fieri facias, but ought to be subjected in equity by a
bill against the debtor and incumbrancer. See G Ran. 308, 309, and 2
Leigh 279.

It is otherwise, however, with real estate. An equity of redemption, on
a mortgage in fee, may be reached by extent even at law. 5 John. C. 455.
Caines C. 47. I John. C. 55. And the same principle prevails as to all
trust estates in land. I Cruise, 330. Sed vide, 2 Leigh, 279. Hence, I
think, we may infer that trust estates are now legal assets, and not equita-
ble as they formerly were. This will be found to be an important variation
from the ancient law, when we come to consider the administration of in-
testates' estates.

It is important to observe, that when the creditor comes into equity to
get at the equitable interest of the debtor, he must have previously issued
an execution appropriate to the subject. 4 John. 690. 2 Rand. 384. Tem-
ple vs. Chamberlayne. And in such case, he who first issues execution
gains a preference which will be respected in equity. 4 John. 690. As to
the right to come into equity, for such purpose, see 4 John. C. 450, 67L
This subject will be resumed hereafter.



' UAK. 25.] FRAUD PER SE. 337

3. "Actions, suits, debts, accoanln, damages, penalties, or forfeitures."
These words are very broad, and seem to comprehend the case of every per-
son having any kind of demand against the vendor. In the P^nglish statute,
also, the word forfeiture is found. It became a question under it, whetlier
a conveyance, intended to prevent a forfeiture for felony, was not a fraud on
the king.' and it was decided to be so, because the statute is not confined
to creditors, as the preamble speaks of creditors and others. Now our sta-
tute has no preamble, yet, as its phraseology shews an intent to extend it
to every imaginable case ; as the statute has been re-enacted here in the
words of an English statute which had received the broadest construction,
and as statutes for prevention of frauds are construed liberally, we may as-
sume it as law, that the act is not confined to creditors and after-purchasers,
but will embrace the caseofo^Aers having actions, suits, or demands against
the fraudulent debtor. See 1 Con. Rep. N. S. 295, &.c. 18 John. Rep.
425, cited by Taite, 104.

4. '■■ Only as against the persons who n)ight be injured or defrauded."
Hence it will be observed, that every conveyance made with intent to de-
fraud others, is nevertheless good between the parties, and though it may
be entirely voluntary, and without any value received, it never can be set
aside : so that in such case, if the vendee or donee is base enough to hold
it to his own use, the vendor is without remedy : 4 Ran. 268. 2 Barn &,
Aid. 387. Starkie, part 4, 583. See also ante 321, in notes : for the law de-
clares the deed to be good between the parties, and it is a principle of courts
of equity, that he who has done iniquity shall have no assistance from the
tribunals of justice, in relation to the iniquitous transaction : the fraudu-
lent debtor has no one to blame but himself; he is justly punished for his
perfidy — " a woodcock taken in his ovi'n springe."

5. " And moreover." Observe, the first part of the act declares that
every conveyance made with intent to defraud or delay, shall be void. The
latter part of it goes farther ; for it avoids conveyances of a certain descrip-
tion, whether they are intended to defraud or not, and however upright may
have been the designs of the parties. Thus "a conveyance shall be taken
to be fraudulent within the act, if it be of goods and chattels," and " be not
on consideration deemed valuable in law, unless it be made by will or deed
duly recorded, ok unless possession shall really and bona fide remain with
the donee."

From a recent decision, it would appear, that according to the principles
of the common law, the title to personal property may pass either by delive-
ry or by deed. 2 Barn. & Aid. 551. And this delivery may also be con-
structive as well as actual. Thus, the delivery of the key of the warehouse,
where goods are deposited, is a good symbolical delivery, and passes the
title to the property. 1 Atk. 171. 1 East, 195. 3 John. Rep. 395. 6
Ran. 473. Starkie, part 4, title Possession. Yet however valid the transfer
of personal property by deed without delivery might have been, so far as
respected the rights of the vendor and vendee alone, yet as it respected the
creditors of the vendor and after-purchasers from him, the case was very
different even at common law, and independent of every statutory provision
on the subject of frauds. Thus it was among the very early principles of
the common law, that if a deed be made, purporting to be a conveyance of
personal property immediately and absolutely, it was void as to all creditors
of the vendor, unless the possession of the property accompanied and fol-
lowed it. Twine's case, 3 Co. 81. This principle of the common law
has its foundations laid in good sense and sound policy. For personal
property being the source to which all dealers look for payment of their
debts, the grossest frauds might be practised if one man held a deed or title
43*



338 FRAUD PER 8E. [ book 2

to property, while another had the possession, and was ostensible owner.
Hence it is an established principle, that au absolute conveyance of personal
property, the possession ol" which remains with the vendor, is fraudulent
per se as to creditors:* It is not nicrcly evidence of fraud, and liable to
be rebutted by countervailing testimony of fair intention. It is, in law lan-
guage, fraud per se. It is a fact from which the law inli^rs that there is
fraud, whether intended or not; for it works deception and injury, however
fair the design, since the possession being the only indicium of property in
personal estate, purchasers and creditors are led to trust the possessor up-
on the faith of it. These doctrines arc fully recognized in various cases.
2 T. R. 687, 591. I Cranch, 310. 2 H. & M. 303. 2 Mun. 341. 3 Mun.
1. Gilm. 15. 5 Ran. 211. 6 Ran. 78, 285. See other cases cited
Taite's Dig. 104, by which it is clearly established, that if a deed be made
of goods and chattels and possession is permitted to remain with the donor
or vendor, though good between the j)nrties, (5 Mun. 28,) it is altogether
void as to creditors and purchasers, unless the retaining the possession be
consistent with the deed. In tlie words of Mr. Buller, if possession doca
not " accompany and follow" the deed, it is void. The meaning and ex-
tent of this qualification of the doctrine, it is important to ascertain.

It seems to be agreed oi> all hands, that it an absolute bill of sale be made
of goods, and possession remains with the donor, this fact unexplained, is
per se fraud. The deed is avoided as to creditors, whatever niay have been
the fairness of intent on the part both of vendor and vendee ; for the effect
of the transaction is to defraud others, and it cannot, and it ought not to be
sustained as a valid transaction as to them, however valid it may be between
the parties. When, indeed, from the character and provisions of the instru-
ment, the possession is to remain vi^ith the vendor or donor, its so remain-
ing is consistent with the deed, and does not avoid it. As in the case of a
deed of trust to secure a debt, or a mortgage on personal property, where
it is expressly provided that the debtor shall retain possession, and the deed
is recorded under our law, the conveyance is good ; for it is of the nature of
a security that the debtor should retain possession until the day of payment
be past. However doubtful this might seem under the decision and opinion
in Ryalvs. Rolls, (1 Atk. 168. 1 Ves. 348,) yet it seems no longer ques-
tioned, in Virginia, since the case of Claiborne's executors vs. Hill, (1
Wash. 177,) where the rnatter was discussed and apparently decided upon
the effect of our recording acts. -3 Cranch. 89. 6 Ran. 82. So, also, in
Cadogan vs. Kennet, (Cow. 4-32,) when a husband by marriage settlement
before marriage, conveyed all his household goods to trustees to the use of
himself for life, remainder to his first and other sons, with a provision that
his trustees should permit him to hold possession and enjoy the property :
his daing so being consistent with the object, intent, and provisions of the
deed, did not render the deed void. So where the possession remaining
Avith the vendor, arises out of the very nature of the transaction, as where
the situation of the goods precludes a delivery of possession. Such is the
case of the sale of a ship at sea, for then the delivery of the grand bill of
sale is ex necessitate considered a sale and delivery of the ship itself, provi-
ded the party takes immediate possession on her arrival in port. 2 T. R.
462. See, also, 1 Atk. 157, 159, 153. 2 Vez. 272. 7 T. R. 67, case of
canal company. So if I buy a slave, pay for him, and take an absolute bill
of sale, and leave him for months with the seller. This, unexplained, would
amount to fraud. But if I prove, that during the whole of that time he was

* It is said in 2 Jolin. C. 46, tliat thia principle prevailed also as to real estate. Chancellor Kent
crtcs 2' Bulst. '£15, 2 Vez. jr. 292. The receipt o-f rents and profits by the vendor is in such case evi-
dence of a secret trust ; and where deeds are not required In lie recorded, frauds might easily be
practised on creditors it tlie conveyance were not considered void. It would seem otherwise with
ii5, where the conveyance is pldcod upon record.



OHAP. 25.] FRAUD PER SE. 339

so ill that a removal would have endangered his life, this would, it is said,
remove the imputation of fraud. 5 Ran. 216. So if I buy a horse in the
country, and tell the seller I will send for him to-morrow, and in the mean
time an execution is levied on him ; yet my title to recover him is unques-
tionable. Id. It is in reference to circumstances and cases such as these,
we are told, tliat we are to understand the expressions in some recent adju-
dications, which seem at first view at variance with the broad and strongly
marked principle, that want of possession along with the deed is per se
fraud. Thus in 10 Vez, 144, Lord Eldon says, " the mere circumstance of
wantof possession, however familiar it is to say that it proves fraud, amounts
to no more than that it is prima facie evidence of property in the party in
possession, until a title not fraudulent is shewn, under which that posses-
sion has followed. Every case from Twine's case downward supports that."
Similar opinions are attributed to the bench in 2 Boss. & P. 58, and 4 Taun.
823 ; and in 1 Binney 502, Chief Justice Tilghman observes "that the statute
of 13 Eliz. which goes no further than the common law, never had it in
contemplation to impeach a fair transaction. Continuance of possession in
the vendor, is one of the strongest marks of fraud, especially if it continues
a long time. But possession is not always conclusive evidence of fraud, but
is open to explanation." In citing and relying on these cases, in the case
of Land vs. Jeffries, (5 Ran. 211,) Judge Carr also uses these strong ex-
pressions : " It is not every possible case in which possession remaining
with the grantor constitutes fraud." " If it remain with the grantor longer
than in the natural course of a fair transaction it ought, it creates a strong
presumption of a secret trust: and, unexplained, constitutes a fraud : but it
may be explained." He then puts the cases before stated of the purchase
of a sick slave, and of a horse in the country.

In the case of Clayton's. Anthony, iS Ran. 285, he refers to the opinion
just cited for his views of the general doctrine of fraud per se, with the ad-
ditional remark, pa. 293, that he agrees fully to the rule laid down in Ed-
wards vs. Harben, 2 T. R. 587, that the absolute transfer of personal chat-
tels without a delivery of possession is in law fraud per se : but that this be-
ing a legal presumption is not absolutely conclusive as to fraud, but may be
explained; and when the explanation is satisfactory to prove the fairoess of
the transaction, and that the inconsistency of title and possession formed
no part of the original contract, the case is taken out of the rule. He refers
to 2 Starkie on Evidence, 617—18, 19, 20.

In the same case of Claytor vs. Anthony, Judge Green reviews this doc-
trine, " which he said a few years since was thought to be conclusively set-
tled by an uniform course of decisions in England and in the Supreme
Court of the United States, and is now thought (as it seemed to him with-
out good reason) to be entirely unsettled and doubtful." He approves ful-
ly the doctrine of Edwards vs. Harben, as founded on the early principles
of the common law declared and enforced by statutes. It proceeds, says
he, on the ground, that a possession ajid use of property, (professedly trans-
ferred to another,) inconsistent with the professed object of the transaction,
is conclusive proof of a secret trust, and therefore fraudulent as to creditors.
He goes on to examine the doctrine in some detail, pronouncing the rule
in Edwards vs. Harben to be fortified by the most venerable authorities, as
well as by the most recent decisions. He cites 2 Bulst. 226. 2 Vern. 262.
€h. Prec. 287. 1 Cranch, 310. 2 H. & M. 203. 2 Mun. 341. 3 Mun.
1. 5 Mun. 28. Gilm. 15. He then observes, " The decisions elsewhere,
which are supposed to be modifications or exceptions to this rule, are not
so. In all those cases the possession was not inconsistent with the profes-
sed purposes of the transaction; as if the sale be conditional or the situ-
ation of the parties or property be such as that it cannot be conveniently de-



840 FRAUD PER SE. [ BOOKi?.

livered to the purchaser, so it be delivered as soon as it coiweniently can ; ov
it is avowedly pledged as a security for jKiyineiit of debts by being conveyed
to trustees for that purpose ; in all tiiese, and such like cases, the posses-
sion of the vendor is not inconsistent with tiie deed, and tlie character of
fraud is not necessarily stamped on the transaction.

In Land vs. JeflTries, the same judg*; observes, " that parol proofs cannot
be given, for the purpose of explaining a possession inconsistent with the
deed, by showing an agreement of the parties collateral to it ; yet such
proofs may be given to show that there is really no inconsistency between
the possession and the deed itself. As, if the deed be conditional, proofs
may be given as to the performance or non-pcrforrnnnce of the condition ;
or ij upon the face of the deed the property is to be disposed of by the
grantor for the benefit oj the grantee; or if the grantor retains the posses-
sion not for his own use, and does not use it, but only for safe keeping till
the grantee can take possession, as if the grantee be at a distance ; or the
deed is to trustees for the purpose of selling and paying debts, and the pro-
perty remains for safe keeping with the debtor (as is usual in such cases)
until a sale can be made ; or if the property be in such a situation as that
it cannot be delivered (as at sea) provided it be delivered as soon as practi-
cable ; or if the grantee purchase at a sheriff's sale and leave possession
with the debtor and for his use, this is not inconsistent with the idea of
a bona fide, absolute, and effectual conveyance from the sheriff to the pur-
chaser : or if the possession be a social possession, so that a possession of
the grantee may be implied ; such cases do not come within the rule, but
shew a possession not in fact inconsistent with the terms of the instrument."
5 Ran 252.

I have given these opinions pretty much at large, that the student may
have the rule with its modifications fairly before him. The laboured efforts
of these distinguished judges to preserve the rule, and yet to admit such a
construction of it, as the purposes of justice seemed to them to require, suf-
ficiently evinces the difficulty of the subject, and will be an adequate apo-
logy for my not attempting to draw a line which, I think, even they have
failed to lay down distinctly. I cannot but remark, however, that they seem
to me, after all, to have frittered away the rule, and to have brought it down
to the principle that retaining possession is very strong evidence of fraud
but not conclusive ; in other words, it does not amount to fraud /Jtr sc. Be
this as it may, it is admitted that the rule does not apply where there is an
express trust on the face of the deed, which provides ior the continuance
of possession in the vendor for the vendee's benefit, as in Bushnal rs. Rois-
ton, cited 2 T. R. 596. New. 374, and Kidd vs. Robinson, 2 Boss. &
Puller, 59, cited ibid, 375. So it is said if the goods of A are sold under
execution and bought by B, and left in A's possession, this is not void.*
Bull N. P. 258. 1 Ray. 266. 2 Boss. & Pull. 59. This case, however,
seems in no wise within the general principle, but is resolvable in another
manner ; for B did not purchase of A, but of the sheriff hy whose levy the
possession of A was completely broken and divested.

But though these principles be fully admitted, yet it still remains to be
enquired, whether the deed is fraudulent per se, where it contains an ex-
press provision for the continuance of possession in the vendor, though
such a provision is inconsistent with the character of the instri'.ment. Thus,
if an absolute bill of sale contains a clause that the vendor may retain pos-
session for his own use, would such possession be consistent with the deed,

* Provided the transaction wa» fair and hona fide. 4 Barn. & CreF. 652. See 1 Barn.& Cre». 288,
where the property vvai not considerrd a? cliang^d. I think that case, however, turned on the pro-
visions of eome of the bankrupt law«.



I

CHAP. 25.] STATUTE OF FRAUDS. S4f

within the meaning of iho authority ? i3y no means : lor tlie provisioie
itself is inconsistent vvitli it, and is void.

Conditional bills of sale, that is, assignments of goods on condition, Jind
with a provision that possession shall not be taken till the condition is bro-
ken, do not seem to come within the xloctrines we have been considering j
7 T. R. 395, '396, Land vs. Jeffries, Judge Green's opinion ; though .liis
doctrine seems not to be countenanced in other cases. See 1 Atk. 167.
New. 376. If, indeed, such conditional bill of sale be a mortgage in ef-
fect, then it would seem that the possession need not accompany the
deed, provided it was duly recorded. See 1 W. 177. 3 Cranch, 69. 6
Ran. 82.

But though a mortgage of personalty, which is duly recorded, wi I be
protected notwithstanding possession remains with the mortgagor, yet if
the mortgagor afterwards sells the property absolutely to the mortgagee,
but retains the possession, the transaction is fraudulent and void. The
mortgage is released by taking the bill of sale, and so no longer protects
the property, although it was duly recorded. And the bill of sale is void
for want of delivery of possession. 6 Ran. 78. 1 W. 177.

A deed absolute on its face, but intended as a mortgage, though good as
a mortorage between the parties, is void as to subsequent mortgagees. 6
John. C. 432. 2 John. C. 191. Cases Temp. Talb. (59. See Bacon's
Tracts, .37.

A deed not fraudulent in its inception, does not become so by matter
subsequent. 6 Ran. 285. Though by concealment and lying by without
asserting his claim, the party may lose the benefit of it. See 2 John. C. 48.

If bonds are assigned, the bonds themselves must be delivered, and no-
tice should be given to the debtor. In assignment of book debts, notice
alone suffices. 1 Atk. 176.

Such being the common law doctrines, let us now see what alterations
have been made by our statute of frauds.

It provides that if a conveyance be not 07i consideration deemed valuable
in law, it shall be taken to be fraudulent and void, unless it be by will or
deed duly recorded, or unless possession remain with the donee. If lands
be included in the deed, the recording must conform to the statute of con-
veyances ; if it be of goods and chattels, it must be upon the acknowledg-
ment of the party, or proof by ttco witnesses within eight months after the
execution, either in the general court, or court where one of the parties lives.

It will be observed, that here the act having used the disjunctive or, it
would seem that either branch of the alternative would suffice, whatever
the species of conveyance : and, therefore, that even an absolute bill of sale,
if duly recorded, would be good, though possession did not follow or ac-
company the deed. But in the case of Hamilton vs. Russell, (1 Cranch,
310,) it was adjudged otherwise, the court deciding that " this act of as-
sembly does not comprehend absolute bills of sale among those where the
title may be separated from the possession, and yet the conveyance be
valid if duly recorded." Yet see an obiter opinion of Judge Green, 2
Ran. .399.

In the case of Claiborne vs. Hill, the deeds and transactions were ante-
rior to this statute. The court was of opinion, that in the case of a mort-
gage, possession need not be delivered to the mortgagee in order to give va-
lidity to the deed ; and their decision seems to have been founded on the
deed's having been recorded under the recording acts then in force. See
also 3 Cr. 89. 6 Ran. 82.

In the case of Moore's executors vs. the Auditor, (3 H. & M. 232,) the
court decided that though this statute permits a conveyance of personal
property to be proved by tivo witnesses only, yet three witncisses are render-



3^2 STATUTE OF FKAUDS. [ book "Z.

ed necessary by the statute of conveyaiicos in mortgages and trust deeds.
It will be obvious at once; that these decisions liave not removed, but have
rather increased, the dilHculties growing out of this act. If we are to un-
.der.'tand, from the case of Hamilton vs. llussell, that absolute bills of. sale
arc not within the statute to one intciit, how shall they be construed to be
within it to any intent. So, likewise, il" mortgages and deeds of trusts are
not within it so far as respects the number of witnesses necessary for the
probate of them, according to the case of Moore's executors vs. the Audi-
tor, how shall they be within it in any other respect? The words of the act
seem to comprehend all these conveyances as to every intent, if they are
included as to any intent.

If, on the other hand, wc consider absolute bills of sale and mortgages
as not comprehended by the act, what can be comprehended by it? The
same argument which, in Moore's executors vs. the Auditor, proved that
mortgages of personal property came within the provisions of the act of
conveyances, and were not to be recorded according to the provisions of
this act, equally proves that all other conveyances of personal property are
to be governed by the former and not by the latter. If from this decision



Online LibraryHenry St. George TuckerCommentaries on the laws of Virginia, comprising the substance of a course of lectures delivered to the Winchester law school: (Volume 1) → online text (page 91 of 117)