Rich v. Levy

<p>A bill by a creditor who had not reduced his claim to judgment and execution, nor in any other manner acquired a lien upon his debtor’s property, alleged that the debtor is selling his goods and applying the proceeds to his own use, and the use of others without consideration, and thus, and in other ways, is wasting his resources, and is sending large quantities of his goods beyond the reach of his creditors, and is utterly insolvent. Held :</p> <p>That these allegations do not make a case for the interposition of a court of equity, to restrain, by injunction, the debtor in the enjoyment and . power of disposition of his property.</p> <p>Where answers are called for and given -under oath, denying the allegations of fraud in the bill, they are strong evidence for the defendants, and unless rebutted by the degree of evidence required by the rule in such cases, must be taken as proof of what they allege.</p> <p>A mortgage to be valid must be bona fide, for if it be made with intent to defraud or defeat creditors, it will be void, though there may be, in the strictest sense, a valuable and adequate consideration.</p> <p>When a sale, assignment, or other conveyance, merely amounts to giving - preference to one creditor over another, it is not to be treated as mala fide, but as merely doing what the law admits to be rightful; it is not necessarily fraudulent because it operates to the prejudice of a particular creditor.</p>