fraudulent conveyance

A conveyance is illegal if made with an intent to defraud the creditors of the grantor, but equally it is illegal if made with an intent to hinder and delay them.

A conof which is to avoid some duty or debt due by or incumbent on the party making it. 2 Kent, Comm. 440; 4 Kent, Comm. 462. There must be:,(a) A creditor to be defrauded; but subsequent creditors are entitled to impeach a conveyance for fraud. 118 Mass. 527. (b) A conveyance by the debtor; but the form of the conveyance is immaterial. 89 Ind. 117. (c) Of property of value, out of which the creditor could have made a portion of his claim. 46 Mich. 243; 52 Vt. 45; 67 Me. 183. (d) With intent to hinder, delay, or defraud (88 N. Y. 669); but the fraud may arise from the nature and necessary result of the transaction, without regard to the actual intention of the parties (108 111. 502). Statute of Fraudulent Conveyances. Fraudulent conveyances received early attention; and the statutes of 13 Eliz. c. 5, and 27 Eliz. c. 4, made perpetual by 29 Eliz. c. 18, declared all conveyances made with intent to defraud creditors, etc., to be void. This statute, on which all subsequent legislation has been patterned, defined a fraudulent conveyance as "a conveyance, the object, tendency, or effect of which is to avoid some duty or debt due by or incumbent upon the party making the conveyance." By a liberal construction, it has become the settled English law that a voluntary conveyance shall be deemed fraudulent against a subsequent purchaser, even with notice. 9 East, 69; 2 Sharswood, Bl. Comm. 296; Roberts, Fraud. Conv. 2, 3. Voluntary conveyances are not so construed in the United States, however, where the subsequent purchaser has notice, especially if there be a good consideration. 2 Gray (Mass.) 447. These statutes have been generally adopted in the United States as the foundation of all the state statutes upon this subject. 1 Story, Eq. Jur. 353; 4 Kent, Comm. 462, 463.

A conveyance, the object, tendency,’ or effect of which is to defraud another, or the intent of which is to avoid some duty or debt due by or incumbent on the party making it. 2 Kent 440; 4 id. 462; and if fraudulent as to any provision therein, is void in toto as against creditors; Webb v. Ingham, 29 W. Va. 389, 1 S. E. 816. Fraudulent conveyances received early attention; and the statutes of 13 Ellz. c. 5, and 27 Eliz. c. 4, made perpetual by 29 Eliz. c. 18, declared all conveyances made with intent to defraud creditors, etc,, to be void. By a liberal construction, it has become the settled English law that a voluntary conveyance shall be deemed fraudulent against a subsequent purchaser even with notice; 9 East 69; 2 Bla. Com. 296; Roberts, Fraud. Conv. 2, 3; 17 Ad. & El. N. R. 723. Voluntary conveyances are not so construed in the United States, however, where the subsequent purchaser has notice, especially if there be a good consideration; Wait, Fraud. Convey. 97 Beal v. Warren, 2 Gray a (Mass.) 447. These statutes have been generally adopted as the foundation of all the state statutes upop this subject; 4 Kent 462. The mere fact of indebtedness alone will not render a voluntary conveyance void, if the grantor has property amply sufficient remaining to pay his creditor; Terry v. O’Neal, 71 Tex. 692, 9 S. W. 673; Joiner v. Van Alpaid and the settlor retaining a reasonable Income, is not fraudulent as against subsequent creditors of the settlor; [1900] 2 Q. B. 608. In the case of ante-nuptial settlements, the consideration of marriage supports only such limitations as can be Justly Inferred to have been purchased on behalf of the party claiming such limitation, so that such party was not taking as a volunteer; 1 Atk. 265; 6 H. & N. 849; 6 Ch. Div. 610; [1891] A. C. 264. The voluntary settlement by a husband upon his wife, when this can be done without impairing existing claims of creditors, and without intent to defraud, is valid as against subsequent creditors; Jones v. Clifton, 101 U. S. 225, 25 L. Ed. 908; Schreyer v. Scott, 134 U. S. 405, 10 Sup. Ct. 579, 33 L. Ed. 965. The conveyance must be founded on good consideration and made with a bona fide intent; if defective in either of these particulars, although good as between the parties, it is void as to creditors; Smith v. Muirheld, 34 N. J. Eq. 4; Glenn v. Randall, 2 Md. Ch. 220. The statute of 27 Eliz., unlike the statute of 13 Eliz., is limited to conveyances of real property; Bolce v. Conover, 64 N. J. Eq. 631, 35 Atl. 402; Garrison v. Brice, 48 N. C. 85; Bohn V. Headley, 17 Harr. & J. (Md.) 257; contra, on the ground that the statute is only declaratory of the common law and the common law applies to personal property, for which reason it may be interpreted as defining the nature and effect of fraudulent conveyances generally; Gibson v. Love, 4 Fla. 217; Harper v. Scott, 12 Ga. 125; Avery v. Wilson, 47 S. C. 78, 25 S. B. 286. A voluntary gift for charitable purposes is not to be treated as “covinous,” within the meaning of 27 Eliz. c. 4, atid is not avoided by a subsequent conveyance for value; [1892] App. Cas. 412. When a mortgage is given to one person for the purpose of securing debts due to himself and others, with Intent on the part of the mortgagor to defraud other creditors, it is valid as to an innocent beneficiary whose debt is an honest one, although the mortgagee himself is a party to the fraud; Morris v. Llndauer, 64 Fed. 23, 4 C. C. A. 162, 6 U. S. App. 610. Voluntary conveyances by a debtor who is financially embarrassed are prima facie fraudulent as to existing creditors, and where conveyance is made mala fide, and the fraud Is participated in by both parties thereto, it cannot be upheld in derogation of the claims of creditors, existing or subsequent; Walsh v. Byrnes, 39 Minn. 527, 40 N. W. 831; Driggs & Co.’s Bank v. Norwood, 50 Ark. 42, 6 S. W. 823, 7 Am. St Rep. 78; Neal V. Foster, 36 Fed. 29. But although such conveyance is void as regards purchasers and creditors, it is valid as between the parties; 266; Worth v. Northam, 26 N. 0. 102; Clapp V. Tlrrell, 20 Pick. (Mass.) 247; Burgett’s Lessee v. Burgett, 1 Ohio 469, 13 Am. Dec. 634; Hendricks v. Mount, 5 N. J. L. 738, 8 Am. Dec. 623; Osborne v. Moss, 7 Johns. (N. Y.) 161, 6 Am. Dec. 252; 1 W. Bla. 262; Romans V. Maddux, 77 la. 203, 41 N. W. 763. An offence within 13 Ellz. c. 6, S 3, is also indictable; 6 Cox, Cr. Cas. 31. This subject is fully treated in a note to Twyne’s case, 1 Sm. Lead. Cas. (continued in 18 Am. L. Reg. N. S. 137), and in Bump; May, Fraud. Conv. See Badges of Fbaud. FRA US (Lat.). Fraud. The term of the civil law was, however, dolua (q. v.). It has been said that fraus was distinguished from dolua and had a more extended meaning. Calv. Lex. ^RAUS DANS LOCUM CONTRACTU!. A misrepresentation or concealment of some fact that is material to the contract, and had the truth regarding which been known the contract would not have been made as made, is called a “fraud dana locum contractui," i. e. a fraud occasioning the contract, or giving place or occasion for the contract FRAUS LEGIS (Lat). Fraud of law. in Civil Law. The institution of legal proceedings for a fraudulent purpose. See In Fbaudum Leois.

A conveyance or transfer of property, the obj'ect of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach. Seymour v. Wilson, 14 N. Y. 509; Lock-yer v. De Hart, 6 N. J. Law, 458; Land v. Jeffries, 5 Rand. (Va.) 601; Blodgett v. Webster, 24 N. H. 103. Every transfer of property or charge thereon made, every obligation incurred, and every judicial proceeding taken with intent to delay or defraud any creditor or other person of his demands, is void against all creditors of the debtor, and their successors in interest, and against any person upon whom the estate of the debtor devolves in trust for the benefit of others than the debtor. Civ. Code Cal. § 3439

Defined under Fraudulent in Black's Law Dictionary.

A conveyance, the object, tendency or effect of which is to defraud another, or the intent of which is to avoid some debt or duty due by, or incumbent on, the party making it.

A conveyance or transter of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach. Every transfer of property or charge thereon made, every obligation incurred, and every judicial proceeding taken with intent to delay or defraud any creditor or other person of his demands, is void against all creditors of the debtor, and their successors in interest, and against any person pon whom the estate of the debtor devolves in trust for the benefit of others than the debtor. Civil Code Cal. § 3439. A transfer made by a person indebted or In embarraussed circumstances, which was intended or will necessarily operate to defeat the right of his creditors to have the property applied to the payment of theirdemands. Abbott.

A conveyance, the object, tendency or effect of which is to defraud another, or the intent of which is to avoid some debt or duty due by, or incumbent on the party making it.* See 2 Kent's Com, 440. 4 Id, 462. An immoral and corrupt motive is not essential to render the act fraudulent as to creditors. It is constructively so, if it necessarily leads to the injury of the creditor. 1 jB. Monroe's E. 167. 2 Kent!s Com. 441, note.