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them null and void." It is held that this statute does not apply to subsequent creditors in the absence of an actual fraudulent intent on the part of the debtor. First National Bank v. Bayliss, 96 Ga. 684 (23 S. E. Rep. 851). The court say: "Before the conveyance will be declared void against subsequent creditors, there must be proof of an actual intent to defraud in making the conveyance. There seems to be some conflict in the authorities on this subject, but, upon the examination of the cases, it will be found that the conflict is more apparent than real. In determining whether there was an actual intent to defraud subsequent creditors or not, each case must depend upon its own facts and circumstances. It is difficult to prove the actual intent which is in the mind of a man at the time he makes such a conveyance, and it must be arrived at from a consideration of the facts and circumstances of the particular case. If it should be shown that a man made a voluntary gift of a large part or all his property to his wife, and remained in possession and withheld the deed from record, and immediately or soon after the making of the gift embarked in some hazardous enterprise, and created debts in connection therewith, this would indicate such an actual intent to defraud creditors as would authorize a jury to set aside the conveyance. On the other hand, if a man who is engaged in business should make a voluntary conveyance to his wife, reserving property sufficient in his opinion to meet his existing indebtedness, and, in the conduct of his business, should borrow money and pay such indebtedness, and it should appear that he did this in good faith, and without any intent to defraud the person from whom the money was borrowed, the conveyance ought not to be set aside. A man engaged in business might, with the best of motives, donate a portion of his property to his family, believing that he has reserved enough to carry on the business and pay his debts, and yet, from some unforeseen cause, become shortly thereafter insolvent. The financial crisis through which we have been passing furnishes many instances of this kind. Men deeming themselves amply solvent have made gifts of this character, and afterwards, by reason of a monetary panic, and a consequent inability to collect their debts, have unexpectedly found themselves insolvent. Where a conveyance is made under

such circumstances, and nothing is done to mislead subsequent creditors as to the fact of the conveyance, it would be highly unjust to set it aside at the instance of such creditors, even though their debts may have been created to pay indebtedness existing at the time of the conveyance. For a full discussion

of this subject see Wait, Fraud. Con., § 96, et seq., and an extended note by Mr. Freeman to Hagerman v. Buchanan, 45 N. J. Eq. 292 (17 Atl. Rep. 946; 14 Am. St. Rep. 732, 745, 751, et seq.), in which numerous decisions are collated. See, also, Horn v. Ross, 20 Ga. 210 (65 Am. Dec. 621); Fullington v. Association, 48 Minn. 490 (51 N. W. Rep. 475; 31 Am. St. Rep. 663); Rudy v. Austin, 56 Ark. 84 (19 S. W. Rep. 111; 35 Am. St. Rep. 85); Wallace v. Penfield, 106 U. S. 260 (1 Sup. Ct. Rep. 216); Carr v. Breese, 81 N. Y. 584."

Sec. 355. Preference of creditors-Constitutionality of statute. Where the right of an insolvent debtor to prefer the payment of one creditor to another is recognized, the fact that a preferred creditor is a near relative to the failing debtor does not affect the application of the rule. Goetter v. Norman, 107 Ala. 585 (19 So. Rep. 56). In Illinois it is held that an insolvent corporation as well as an insolvent natural person, has the right, in the absence of fraudulent intent, to make preference among creditors, and such preference may be even given to the wife or a relative of the directors or officers of the corporation, provided no pecuniary advantage is thereby obtained by such directors or officers. Blair v. Illinois Steel Co., 159 Ill. 350 (42 N. E. Rep. 895; 31 L. R. A. 269). A mortgage given for a bona fide debt although executed as a preference to the mortgagee in case of the mortgagor's future insolvency, is not for that reason fraudulent as to his creditors. Webber v. Webber, 109 Mich. 147 (66 N. W. Rep. 960). W. Va. Code 1891, ch. 74, § 2; Acts 1891, p. 353, ch. 123, providing that a conveyance by an insolvent creditor giving any creditor a preference shall as to such preference be void, and the instrument shall be taken and held to be made for the benefit of all the creditors and the grantee be treated as their trustee, applies in such cases whether the conveyance be executed in good faith or fraudulently; and a creditor who first

assails a conveyance on account of its containing preferences, under this statute, does not acquire any preference over other creditors. First Nat. Bank v. Parsons, 42 W. Va. 137 (24 S. E. Rep. 554). A statute which provides: "that whenever any assignment, deed of trust, mortgage, deed, sale, or pledge, or any other conveyance or transfer of a part or portion of a debtor's property, estate or assets, is made for the purpose of preferring one or more creditors, or would have that effect, it shall be illegal and void, and all such property, estate, or assets shall be divided pro rata among all of the creditors of said debtor," is held to be unconstitutional on the ground that it amounts to taking property without due process of law. The taking from property its chief element of value and denying its possessor the right to use and transfer it in any proper and legitimate method is as much depriving him of his property as if the property itself were taken. Third National Bank v. Divine Grocery Co., 97 Tenn. 603 (37 S. W. Rep. 390).

Sec. 356. Taking mortgage upon property in excess of the amount of the debt. While a diligent creditor, in order to secure a just debt, may take a mortgage upon the debtor's property in excess of the amount of the debt, if he participates in any fraudulent intent on the part of the debtor to use such mortgage as a means of depriving other creditors from seizing his property, such mortgage will be void. Richards v. Schreiber, C. & W. Co., 98 Ia. 422 (67 N. W. Rep. 569). The court say: "The taking of a mortgage for an amount greater than the indebtedness actually intended to be secured, although ordinarily a badge of fraud, is not necessarily fraudulent. Rubber Co. v. King, 90 Ia. 313 (57 N. W. Rep. 864). Nor does the taking of a mortgage of property of much greater value than the debt to be secured, even though the property comprise all the mortgagor has subject to execution, alone indicate fraud. But when it is charged that a mortgage is fraudulent as against creditors, the mortgagees knowing that the mortgagor is embarrassed when the mortgage was taken, the amount of the liability to be secured, and the value of the security given, and whether it is all the debtor owns subject to execution, may

well be considered with other facts, to aid in ascertaining the true nature of the transaction. A creditor may take security for the debt due him, even though he is aware that the purpose of the debtor in giving it is to hinder, delay and defeat, and thus to defraud, other creditors. Chase v. Walters, 28 Ia. 460; Kohn v. Clement, 58 Ia. 589 (12 N. W. Rep. 550); Lead Co. v. Haas, 73 Ia. 404 (33 N. W. Rep. 657; 35 N. W Rep. 494); Jones v. Loree, 37 Neb. 816 (56 N. W. Rep. 391). But if the creditor know of the fraudulent purpose of the debtor, and accept the mortgage wholly or in part to aid in accomplishing it, he participates in the wrong, and the mortgage is fraudulent against creditors, although it was only on a reasonable amount of property to secure a valid debt. Headington v. Langland, 65 Ia. 276 (21 N. W. Rep. 650); Clark v. Raymond, 86 Ia. 664 (53 N. W. Rep. 354); Crawford v. Nolan, 70 Ia. 101 (30 N. W. Rep. 32); McCreary v. Skinner, 83 Ia. 363 (49 N. W. Rep. 986); Jones, Chat. Mortg., § 334."

Sec. 357. Taking mortgage to secure pre-existing debt or in discharge of prior liens. A mortgage given to secure a pre-existing debt will not be declared void from the fact alone that the mortgagee at the time of its execution had notice of the intention on the part of the mortgagor to defraud creditors of the latter. In order to avoid the security in such case, the mortgagee must have participated in the fraudulent purposes of the mortgagor. Grosshans v. Gold, 49 Neb. 599 (68 N. W. Rep. 1031); Bleiler v. Moore, 94 Wis. 385 (69 N. W. Rep. 164). A voluntary conveyance is not per se void, except as against present debts. An accommodation indorser of a promissory note that is not dishonored is not a present debtor. Severs v. Dodson, 53 N. J. Eq. 633 (34 Atl. Rep. 7; 51 Am. St. Rep. 641). A wife of one of the parties interested in the enterprise having advanced all the money to pay for certain land, and substantially all that was paid towards the erection of a salt plant thereon, although not enough to complete the payment for the same, it was not a fraud upon other simple contract creditors for her to take title to the property as a security for the money advanced in pursuance of a prior agreement. Crystal Salt & Min. Co. v. Leckie, 57 Kan. 165 (45 Pac. Rep. 604). Where property is incumbered to its

its full value by reason of prior liens thereon, an insolvent debtor may convey it in satisfaction of such prior liens on the ground that such conveyance is not to the exclusion or prejudice of other creditors, but only amounts to the surrender of a valueless equity of redemption. Johnson v. Riley, 41 W. Va. 140 (23 S. E. Rep. 698).

Sec. 358. Sale and conveyance of exempted realty. Exempted property may be sold and conveyed by the debtor without regard to his motives or the effect upon creditors Wheeler & Wilson Mfg Co. v. Bjelland, 97 Ia. 637 (66 N. W. Rep. 885); Bank of Commerce v. Northwestern Nat. Bank, 93 Wis. 241 (67 N. W. Rep. 423). A conveyance of exempted property cannot be assailed as fraudulent. Green v. Blackwell, N. J. Eq. (35 Atl. Rep. 375). There can be no fraudulent conveyance of property exempt from execution. Winter v. Ritchie, 57 Kan. 212 (45 Pac. Rep. 595; 57 Am. St. Rep. 331); Haynes v. Hoffman, 46 S. C. 157 (24 S. E. Rep. 103). Property exempt from execution is not susceptible of fraudulent alienation. Roberts v. Robinson, 49 Neb. 717 (68 N. W. Rep. 1035; 59 Am. St. Rep. 567). A conveyance of homestead lands exempt from their claims cannot be attacked by creditors though the purpose thereof was to defraud creditors. Mundt v. Hagedorn, 49 Neb. 409 (68 N. W. Rep. 610).

Sec. 359. Conveyances in fraud of marital rights. A voluntary conveyance made by one who contemplates marriage with another may be set aside on the ground of fraud. The right to relief is not affected by the fact that the injured party was ignorant of the existence of the property or of the fraudulent conveyance at the time of its execution. Leary v. King, 6 Del. Ch. 108 (33 Atl. Rep. 621). A conveyance by a husband to his children of the whole of his estate immediately prior to his death, having the effect to deprive his wife of her inheritance, shall be set aside. Smith v. Smith, 22 Colo. 480 (46 Pac. Rep. 128; 55 Am. St. Rep. 142; 34 L. R. A. 49). A wife may be the creditor of her husband and as such is within the protection of the statutes against fraudulent con

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