error? But, incidentally, the discussion embraced the general 1802. doctrine of the efficacy of voluntary conveyances by debtors, in trust for the benefit of creditors, upon specific conditions, or stipulations. The points and authorities were as follow:

For the plaintiff in error. 1st. A voluntary conveyance of the description now under consideration, tends to defraud creditors of the just fruits of legal process. 2 Bac. Abr. 601. Cowp. 433. And is, therefore, void under the statutes of 13 & 27 Eliz. On the face of the decd, it appears to have been intended to defeat judgment creditors; to delay and hinder plaintiffs in their recoveries at law; or, to give it the most favourable construction, the deed was intended to preserve the property for creditors in general, instead of allowing those who were suitors in a Court of law, the advantage due to their meritorious vigilance. 2d. The terms of the trust are indefinite, as to its mode and time of execution, even in favour of the accepting creditors; while, from the very nature and operation of the deed, an interest is reserved for the debtor. Thus, only those who accept the trust, with all its appendages, can receive a benefit from it; and that benefit is confined to a share in the small part only of the debtor's estate, which the deed attempts to convey. Nine months are allowed for an election, to the creditors indiscriminately, during which there could be no distribution, and after the lapse of that period, the debtor is entitled to the share of every non-accepting creditor, as well as to the intermediate perception of the rents, &c. But suppose there was no accepting creditor, did not the property remain in the debtor? It did not pass to the general creditors; and the trustees had paid no consideration for it. 3d. Then, it is a fraud, where there is a conveyance to a trustee for the benefit of a debtor; and the strongest badges of fraud put in the books, are to be found in the present case: for the possession remains in M'Clenachan; the trust was not announced, even by recording, till the 24th of November 1797; the conveyance was made pending suits, to avoid judgments; the deed is not made to a creditor, but to strangers, of the debtor's own nomination; and the possession of the land was never delivered in pursuance of the deed. Cowp. 435. 3 Co. 80. 2 Lev. 147. Nay, even the deed itself was not delivered to the trustees, for two months after its execution, during which period, McClenachan might have destroyed it; or he might have sold the land effectually to others, for a valuable consideration. 2 Vern. 510. 4th. The acceptance of the creditors was a condition precedent to the raising of a use in their favour; and if no use was so raised, the conveyance to the trustees was merely voluntary, and void by the statute of Eliz. against creditors. Besides, the performance of the condition precedent was legally barred, by the lien, which the testatum execution had previously secured for the plaintiff VOL. IV.

M

in

1802. in error. 2 Bac. Abr. 608. 1 Sid. 133. Cr. J. 454. 5 Vin. Abr. "Condition." 76. pl. 20. Ibid. 178. pl. 37. Ib. 89. pl. 10. 5th. By the express requisition of the deed of trust, the acceptance of the creditors must be in writing; and, of course, no assent, by implication, can render the use absolute. Corp. 117. 1 Cha. Ca. 141. 143. 3 Go. 28. b. 3 Co. 29. It is stated in the case, that the creditors did once refuse to accept; by which they had determined their right of election, and could not afterwards reverse it; particu larly so as to affect and destroy the liens of judgment creditors. And even as to the act authorising an acceptance, it is a mere minute of proceedings of a meeting; it is not subscribed by all the creditors at the meeting; and the notice from the committee can only operate, on the terms of the trust, as a notice in writing, for those who actually signed it; since, a parol delegation of power to a committee, could not be deemed a performance, in writing, of the condition precedent. 6th. The plaintiff in error obtained a lien upon the land by the delivery of the testatum fi. fa. to the sheriff on the 16th of November 1797; and the acceptance of the creditors, even by their committee, was not sooner than the 31st of May 1798. Then, it would be contrary to the principles of equity, and to the rules of law, that the estate thus vested by the execution, should be divested, by a relation from the time of the acceptance, to the date of the trust deed, against a person, who is neither party, nor privy, to the acceptance, or the deed. 3 Co. 25. 27. 26. 2 Vin. Abr. 285, 286. 288. 287. pl. 3. 1 W. Black. Rep. 642. Plowd. 482. b. 2 Ventr. 200. 13 Co. 21. a. Finch. 6. Style's Pr. Reg. 367. 18 Vin. Abr. 162. pl. 1. 5 Co. 119. b.

For the defendants in error. 1st. The title of the lessors of the plaintiff, arises from a fair and honest transaction; though it would be enough to remark, that the silence of the verdict (as the case must be considered) is a legal negative of the insinuation of fraud. 10 Co. 56. And there is a valuable consideration in law, for the trust deed, though it is no more than five dollars; which, however, coupled with a fair intention, completely vests the title in the trustees. 2 Bl. C. 296. 2d. The statute of 13 Eliz. c. 5. secures the rights of creditors, against motives of "malice, fraud, covin, collusion, and guile," by annulling the act which they produce. But if the present case is not so generated, it is not an act within the letter of the statute," to the "end and purpose to delay, hinder, and defraud creditors, and "others, of their just and lawful actions." In the construction of the statute, it must, also, be remembered, that there is an essential difference between "the end and purpose," of an act, and the consequence and result, which naturally follow it. For, certainly, a creditor, on the eve of obtaining a judgment, may be hindered, or delayed, as the necessary consequence of his debtor's

making a conveyance of his estate, unquestionably valid, upon 1802. a bona fide sale. To invalidate a conveyance, therefore, there must not only be an intent, which consequentially hinders and delays the creditor; but it must be a covinous and fraudulent intention, to that end and purpose. Giving, therefore, the statute the most liberal construction (and it ought to be liberally construed. Cowp. 434.) still the inquiry terminates, in ascertaining whether the conveyance is fraudulent, or not. 10 Co. 56. 1 Cha. Ca.. 291. 1 Vent. 194. 1 Mod. 119. 1 Atk. 15. Cowp. 708. 434. 2 Vez. 11. 2 Atk. 481. And what is fraudulent, depends on the moral intention; on the impulse of the will, to perform the act, which necessarily produces the obnoxious consequence. Bull. N. P. 257. By this test, what taint, or colour, of fraud appears in the present case? The object of McClenachan was not fraudulently to hinder and delay any creditor; but honestly to secure an equal distribution of the property among all the creditors. If the purpose was fair and lawful, the deed contains every formality, that is necessary for carrying it into effect; and on the 2d of September 1797 the legal estate was absolutely vested in Dallas and Huston. 3d. Reviewing, then, the opposite argument, let us give to each point an answer. It is urged, that the conveyance is not of all M'Clenachun's property. We answer, that this does not appear from the facts stated; but admitting it to be true, it strips the case of some of the badges of fraud imputed to it; and leaves a fund to which the dissenting creditors might resort for satisfaction. Again: it is urged, that the deed was made to trustees of his own choice. We answer, that there is no authority that declares this to be fraudulent. In the case of General Stewart's settlement on Mrs. Stewart, though the whole field of legal objection seemed to be travelled over, this obstacle never occurred. But it is of the essence of a voluntary conveyance, that trustees should not be forced on the debtor; and, as it is generally a case of confidence, not of interest, a friend, or a brother, is more naturally resorted to, than a creditor. If, indeed, the trustees were insolvent, or if any collusion could be charged upon them, it might be deemed a ground to suspect, repudiate and annul the act; but the circumstances of the present case exclude every idea of the kind; and a mere possibility of wrong affords no rule for argument. Again: it is urged, that the deed does not let in all creditors, but only such creditors as assent in writing, within a limited period. We answer, that the trust is open to all; Prec. Ch. 105. and that even if a particular class of creditors only had been included, the deed would have been valid. Again: it is urged, that the shares of the non-accepting creditors were to be paid to McClenachan, to enable him to compound with, them. We answer, that there is no evidence in this, of a fraudulent intention; for, it is merely an arrangement to pay the same debts, through different hands;

that

1802. that it was a provision, which depended entirely upon the creditors; for, if they accepted, there would be nothing payable to M'Clenachan; that MClenachan's person was still liable to a ca. sa. as no release was exacted; and the effect of the arrangement is precisely the same, as would be produced by a bona fide sale of the premises. 4 T. Rep. 166. Again: it is urged, that if the trustees had a right to sell, and did sell, before the creditors assented, and none of them assented in nine months, McClenachan must receive the whole of the money. We answer, that the objection proves too much; it attacks all voluntary assignments; and, indeed, almost all conveyances. Assent, ex vi termini, is a matter subsequent; and trustees never can certainly know, that the creditors will take their dividends. The rule is, that the legal estate must operate; and it vests, in the present instance, to the full extent of selling and conveying the property. If creditors will not then receive, does their refusal work an avoidance of the title of the vendee? The vendee, in fact, and in law, has nothing to do with the creditors, though he is bound to see, that the sale is in execution of the trust. 1 Vern. 260. 1 Vez. 173. And the creditors may give notice, and afterwards claim. 1 Vern. 319. Again: it is urged, that during the period of nine months, the trustees are restrained from making distribution. We answer, that it is proper in all such cases to fix a reasonable period for distribution; and that the bankrupt and the insolvent laws do so, as well as most voluntary conveyances. Whether the period of nine months is reasonable, or not, must be determined; but it is unfair to argue, that the power to fix a reasonable period, carries with it a power to fix an unreasonable one. And here, it must be observed, that there is no right reserved by M'Clenachan to receive the rent of the premises, during that, or any other, period. But, if the trustees, either as to the sale, or the distribution, were guilty of any laches, or irregularity, they might be controuled under the act of 1774. 1 State Laws, 690. Dall. edit. Again: it is urged, that the possession was not changed. We answer, that the continuance of possession in the debtor, even of chattels (a forticri of real estate) is not, in itself, fraudulent, but evidence of fraud, which may be rebutted. 1 Ld. Raym. 286. Prec. Chan. 285. 1 P. Wms. 321. 2 T. Rep. 587. Cowp. 435. But the legal possession, or seisin, did pass to the trustees, according to the law of Pennsylvania, at the moment of executing the deed. Though no rent is paid, the possession of the lessee, is the possession of the lessor. 3 Atk. 469. Shep. Touch. 65. Ambl. 599. 57. Rep. 424, 5. 1 Eq. Abr. 149. 1 Fonbl. 194. Again: it is urged, that the deed was executed in secret, and not delivered to the trustees for sometime after the execution; of which, too, the plaintiff in error had no notice till it was recorded, on the 24th of November 1797. We answer, that the execution of a deed does not call for publicity; that the case does not negative the fact,

that

that the deed was delivered to the trustees long before the 24th of 1802. November, but simply states that it was then in the possession of one of them; that the deed shows, by inspection, a sealing and delivering on the 2d of September, and the legal presumption, till the contrary is proved, is, that it remained with the trustees, from the time of the delivery; that the deed was recorded within six months, and thereby became good, even against a purchaser; and that there is no evidence, or suggestion, that the plaintiff in error lost any opportunity of recovering his debt, by the transactions respecting the deed. Cro. E. 7. Sheldon's case. Cro. E. 483.. 1 P. Wis. 205. 577. 4th. Having thus reviewed, and answered, the opposite arguments, it remains to consider, in the abstract, whether the execution of the plaintiff in error, so intercepted the interest in the land, as to defeat the trust? From the very nature and operation of a trust, the legal title, an estate in fee, immediately passed from McClenachan to the trustees. 2 Bl. Com. 271. Nothing was left to him, but a contingent equitable interest; if none of the creditors accepted; if only a part of the creditors ac cepted; or if there should be a surplus of property, after paying all the creditors. This equitable interest attaches to the land, if it is unsold; or it follows the proceeds of a sale, in the hands of the trustees; and this interest, and no more, is subject to the lien of a judgment creditor; Gilb. Chan. 230. 2 P. Wms. 491. 2 Vez. 662. 1 Eq. Abr. 325. Pow. Mortg. 197. whose testatum into Montgomery county cannot, in this respect, enlarge his right, or his security, beyond the effect of the judgment, upon lands in Philadelphia county. 5th. The right of a debtor to make a voluntary conveyance of his estate, independent of the statutes of bankruptcy, has never before been controverted, in England, nor in Pennsylvania, even where a preference was given to one, or more, of the creditors, in exclusion of the rest. 1 Fonbl. 260. 5 T. Rep. 420. 8 T. R. 521. 530. Prec. Ch. 105. 5 T. Rep. 530. 532. The insolvent laws annul private family settlements made by a debtor; 1 vol. State Laws, 257. 259. 4 vol. 270. but as to voluntary assignments, the right to make them, and their validity when made, are expressly recognised. 1 vol. State Laws, 690. The practice of making them in various forms is notorious; sometimes on condition of a general release to the debtor; sometimes with a classification of property, according to which the sales must be effected; and sometimes with a classification of creditors, according to which a priority of payment is to be observed. The Courts of Pennsylvania have uniformly recognised and supported, voluntary conveyances, of these several descriptions, made bona fide, and not colourably, with a latent and fraudulent use for the debtor. (1) 1 Dall. Rep. 139. 430. 72. 2 Bl. Com. 333.

(1) This was agreed to be law by the counsel, on both sides; and ŚMITH, Justice, (during the argument) declared, that it had been frequently so de eided in the Supreme Court.