Settlements to defraud creditors, void under 13 Eliz. c. 5.

(u) Sup., p. 4-45.

(x) Kennedy v. Daly, (1804) 1 Sch. & L. at p. 379.

(y) See inf., p. 937 el seq.

(z) S. 5 ; Halifax Joint Stock Bky. Co. v. Gledhill, 1891, 1 Ch. 31 ; 60 L. J. Ch. 181; see Wood v. Dixie, (1845) 7 Q. B. 892 ; Colombine v. Penhall, (1853) 1 Sm. & G. 228; Penhall v. Elwin, (1853) ib. 258 ; Ex p. McBurnie, (1852) 1 D. M. & G. 441 ; Marlow v. Orgill, (1862) 8 Jur. N. S. 789, 829 ; Darvitl v. Terry, (1861) 6 H. & N. 807 ; 30 L. J. Ex. 355 ; and see, on the general construction of the Statute, Twyne's case, 1 Sm. L. C. 11th ed. ; and Skarf v. Soulby, (1849) 1 M. & G. 364; Townsend x. Westacott, (1810) 2 Beav. 340 ; Goldsmith v. Russell,

(1855) 5 D. M. & G. 547 ; Christy v. Courtenay, (1850) 13 Beav. 97 ; French v. F., (1855) 6 D. M. & G. 95 ; Neale v. Day, (1858) 4 Jur. N. S. 1225 ; 28 L. J. Ch. 45 ; Acraman v. Corbett, (1861) 1 J. & H. 410 ; Thompson v. Webster, (1861) 7 Jur. N. S. 531 ; and see, as to settlements, pendente lite, Blenkinsopp v. B., (1852) 1 D. M. & G. 495 ; 21 L.J. Ch. 401.

(a) Holmes x. Penney, (1856) 3 K.

& J. 90, 99; 20 L. J. Ch. 179.

(b) Bott v. Smith, (1856) 21 Beav. 511; see Re Trouahton, (1S9 4) 71 L. T. 427, where administrator, who was also residuary legatee, assigned for value to avoid a call on shares.

(x) Holmes x. Penney, sup.

(d) Re Tetley, 1S96, 66 L. J. Q. B. 1ll, 114 ; affd. 3 Manson, 321.

(e) Exp. Some, (1886) 54 L. T. 301.

(f) Goodricke v. Taylor, (1863) 2 H. &M. 380 ; (1864) 2 D. J. & S. 135.

(g) Cornish v. Clark, (1872) 14 Eq. 184 ; 42 L. J. Ch. 14 ; and see per Lord Esher in lie Tetley, (1896) 3

Manson, 321, 323.

(h) Kevan v. Crawford, (1877) 6 Ch. D. 29; 46 L. J. Ch. 729; Re Reis, 1904, 2 K. B. 769.

(i) Goodricke v. Taylor, sup.; see Ridler v. R., (1882) 22 Ch. D. 74.

(k) Re Tetley, (1896) 66 L. J. Q. B. Ill ; affd. 3 Manson, 321.

The fact that the settlor at the date of the settlement was largely engaged in speculative transactions (/), or was about to engage in a hazardous business (m), is of course strong evidence that, notwithstanding his apparent solvency, the real intention of the settlor was to place the property beyond the reach of his creditors; and the fact that he has already made provision for the objects of the settlement may not be immaterial in estimating the good faith of the transaction (n).

It has been repeatedly held that an assignment of property incapable of being taken in execution, is not, within the words of the Statute, an assignment with intent to delay creditors (o). Thus, copyholds, and money and securities for money were not within the original scope of the Act (p) : and it was considered a doubtful point whether a person largely indebted might not purchase and settle property, which his creditors, in the absence of direct fraud, would be unable to follow (q). Now, however, by the Judgments Act, 1839, copyholds may be taken in execution under a writ of elegit, and money, bank notes, and securities for money under a writ of fi. fa. (r). Since this extension of the law of judgments, a voluntary purchase of stock, by a person largely indebted, in the names of trustees, upon trust for the benefit of his children, has been held fraudulent within the Act (s); so, also, an assignment by a person in extremis of a policy on his life (t). To bring a case within the 13 Eliz. it was stated by Lindley, L. J. (u), that the disposition must be of the whole or substantially the whole of the settlor's property.

What property is within it.

(I) Crossley v. Elworthy, (1871) 12 Eq. 158 ; 40 L. J. Ch. 480 ; Taylor v. Coenen, (1876) 1 Ch. D. 636.

(m) Mackay v. Douglas, (1872) 14 Eq. 106 ; 41 L. J. Ch. 539 ; Ex p. Russell, (1882) 19 Ch. D. 588; 51 L. J. Ch. 521 ; Be Holland, 1902, 2 Ch. 360, 373; 71 L. J. Ch. 518.

(n) Crossleyv. Elworthy, sup.

(o) Rider v. Kidder, (1805) 10 Ves. 360 ; and see Barrack v. WCulloch, (1856) 3 K. & J. 110 ; 26 L. J. Ch. 105 ; and oases there cited and judgment.

(p) See Mathews v. Feaver, (1786)

1 Cox, 278.

(q) Fletcher v. Sedley, (1704) 2 Vern. 490; but see Barton v. Van Heythuysen, (1853) 11 Ha. 12G ; Sug. 14th ed. 706 ; and see judgment in Neale v. Bay, (1858) 4 Jur. N. S. 1225; 28 L. J. Ch. 45.

(r) See ss. 11 and 12.

(s) Barrack v. M'Culloch, (1856) 3 K. & J. 110; 26 L. J. Ch. 105.

(t) Stokoe v. Cowan, (1861) 29 Beav. 637 ; as to policies of insurance being securities for money within the Judgments Act, 1838, s. 12, see Law v. Indisputable Life Ass, Co., (1855) 1

The simple test to be applied in each case is, whether the transaction is entered into in good faith, or a mere contrivance for the personal benefit of the settlor, or of others whom he wishes improperly to favour (x) ; the whole of the circumstances surrounding the execution of the conveyance must be looked at to ascertain whether the conveyance was in fact executed with intent to defeat and delay creditors (y). Thus, an ordinary creditor's deed is not within the Act (z) ; unless it is so framed that a creditor, willing to take his fair share of the property, cannot reasonably be expected to accede to it (a) ; but the fact that it contains provisions in favour of the debtor or intentionally excludes a particular creditor does not necessarily make it void under the Act (b). So, where a trader debtor, knowing that a writ of sequestration was about to be issued against him, vested the whole of his property in trustees for the benefit of certain of his creditors, and the deed contained a proviso that he should remain in possession for six months, and that if any sequestration should be enforced his possession was to cease, it was held that the deed, though an act of bankruptcy, if any of the excluded creditors had filed a petition upon it, was not void under the 13th Eliz. c. 5 (c). Where, as in the case just cited, the transaction is in the nature of a mortgage, retention of possession by the grantor until default is made is no evidence of fraud; but it is otherwise where the possession is retained after what purports to be an absolute conveyance of the property (d) ; though, even in this case, the presumption of fraud may be rebutted (e). Where a creditor was entitled to a memorandum by which the debtor had a fortnight before his death, insolvent, declared himself trustee of certain property then in mortgage to him and of a bill which he had endorsed to the creditor to secure repayment of a sum of money, it was held that the creditor was entitled to the security as against the other creditors, the debtor having gained no personal benefit by the transaction (/). And even on the eve of bankruptcy, suspected by both parties, a negotiation in good faith for security will be supported (g). Where A. conveyed all her property in trust for her daughters in consideration of a covenant by them to pay all her debts incurred up to date in connection with the property, and to maintain her, the transaction was held to be a family arrangement made in good faith not intended to defraud creditors (h).