This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
"Who may impeach.
(I) Tarleton v. Liddell, (1851) 17 Q. B. 390 ; (1851) 4 De G. & S. 538 ; 20 L. J. Q. B. 507; Wakefield v. Gibbon, (1857) 1 Giff. 401 ; 26 L. J. Ch.505.
(m) Barling v. Bishopp, (1860) 29 Beav. 417.
(n) Reese River Co. v. Ativcll, (1869) 7 Eq. 347.
(o) Exp. Mercer, (1886) 17 Q. B.D. 290 ; 55 L. J. Q. B. 558. See judgment of Lindley, L. J., p. 301.
(p) Marlow v. Orgill, (1862) 8 Jur. N. S. 789, 829 ; Darvill v. Terry, (1861) 6 H. & N. 807 ; 30 L. J. Ex. 355.
(q) Ede v. Snowies, (1843) 2 Y. & C. C. C. 172, 178; see Be Magawley"s Trust, (1851) 5 De G. & S. 1; Barton v. Van Heythuysen, (1853) 11 Ha. 126, 133; Strong v. S., (1854) 18 Beav. 408.
(r) See Barton v. Van Heyt-huysen, sup. ; Graham v. Furber, (1854) 14 C. B. 410 ; 23 L. J. C. P. 51 ; Jenkyn v. Vaughan, (185G) 3 Dr. 419 ; 25 L. J. Ch. 338 ; Crossley v. Elworthy, (1871) 12 Eq. 158; 40 L. J. Ch. 480; Mackay v. Lour/las, (1872) 14 Eq. 106; 41 L. J. Ch. 539; and see inf.
(s) See Jenkyn v. Vaughan, sup.
(t) Holmes v. Penney, (1856) 3 K. & J. 90, 99 ; 26 L. J. Ch. 179.
(u) (1864) 3 D. J. & S. 293.
(x) See, however, as to this dictum, Freeman v. Tope, (1870) 5 Ch. 538; 39 L. J. Ch. 689 ; Re Lane-Fox, 1900, 2 Q. B. 508, 513 ; 69 L. J. Q. B. 722.
(y) Approved and followed in Re Lane-Fox, sup.
The first of the above dicta of Lord Westbury in the case of Spirett v. Willows requires some qualification (b). The mere circumstance that the debt of the creditor impeaching the deed was existing at the date of the settlement will not of itself entitle him to relief against it, unless from all the circumstances an intention to defraud creditors must be presumed. Actual proof of an express fraudulent intention is not required, except in cases where the settlement sought to be set aside is founded on a valuable consideration (c); and even in these cases, it is submitted, the difference consists not so much in the nature of the proof required, as in the degree of its cogency - the fact of a valuable consideration of itself rebutting any prima facie presumption of fraud.
Remarks on Spirett v. Willows.
Where the deed comes within the statute, the creditor's right is a legal one, and will not be affected by any delay in enforcing it, short of such a delay as bars the debt altogether (d).
Mere delay no bar to creditor's rights under statute.
(z) Ware v. Gardner, (1869) 7 Eq. 317; 38 L. J. Ch. 348.
(a) Ridler v. R., (1882)22 Ch.D. 74.
(b) Freeman v. Pope, sup. ; and see Kent v. Riley, (1872) 14 Eq. 190 ; 41 L. J. Ch. 569 ; Re Holland, 1902, 2 Ch. 360 ; 71 L. J. Ch. 518.
(c) See per Giffard, L. J., in Freeman v. Pope, sup. ; Vaughan Williams, J., in Re Tetley, (1897) 66 L. J. Q. B. 1ll, 114.
(d) Three Towns Bkg. Co. v. Mad-dever, (1884) 27 Ch. D. 523 ; 53 L. J. Ch. 998.
It was held, that a person who has assisted in the preparation and carrying out of a voluntary deed, is not thereby necessarily precluded from enforcing his claim adversely to it, as a creditor of the settlor; but this was reversed on appeal (e). It has also been decided that an indictment will lie against both the grantor and grantee in a fraudulent deed (/) ; and therefore where a bill is filed to set aside a deed as fraudulent under the Statute, a defendant who is a party to the deed, either as grantor or grantee, may decline to answer the interrogatories (g).
Person who has assisted in preparing a voluntary deed may not claim adversely to it.
The Bankruptcy Act, 1883 (h), has introduced several important provisions with reference to the avoidance of voluntary settlements. By s. 47, any settlement of property (not being a settlement made before and in consideration of marriage, or in favour of a purchaser (/) or incumbrancer in good faith and for valuable consideration (k), or a settlement, made on or for the wife or children of the settlor, of property, which has accrued to him after marriage in right of his wife (7) ) is made void as against his trustee under the Act, if he becomes bankrupt within two years after the date of the settlement; and if he becomes bankrupt at any subsequent time within ten years from such date, then it is also to be void, unless the parties claiming under it can prove that the settlor was, at the time of making the settlement, able to pay all his debts without the aid of the property comprised in such settlement (m), and that the interest of the settlor in such property had passed to the trustee of such settlement on the execution thereof. And any covenant, or contract made in consideration of marriage, for the future settlement upon or for the settlor's wife or children of any money or property wherein he had not, at the date of the marriage, any estate or interest whether vested, or contingent, in possession, or remainder, and not being money or property of or in right of his wife, is made void as against his trustee under the Act, in the event of his becoming bankrupt before such property or money has been actually transferred or paid, pursuant to such contract or covenant; and the word "settlement " (n) is for the purposes of this section to include any conveyance or transfer of property. But it has been held not to include a gift of money to a son for the purpose of setting him up in business (o). The section does not apply, where the estate of the settlor is being administered as insolvent by the Court of Bankruptcy (p). Nor does it make a voluntary settlement void against the settlor's trustee in bankruptcy from its date, but only from the time when the trustee's title accrues; hence, if the property comprised in the settlement has been sold to a purchaser in good faith and for value, before the trustee's title accrued, the purchaser's title will be good against the trustee (q). And where a settlement is void against the trustee, it is void for all purposes, and does not give him any priority over incumbrancers subsequent to the settlement (r).