CHAPTER XIX.

FRAUDULENT INSOLVENCY.

I. FRAUDULENT CONVEYANCES.

Under statute Eliz. making fraud

ulent conveyances is indictable,
§ 1238.

II. SECRETING GOODS.

Secreting goods made indictable

ute Eliz. making

convey

by recent statutes, § 1239.

ance is in

Secreting or assigning must be actual, § 1240.

Intent or scienter must be show, § 1241.

I. FRAUDULENT CONVEYANCES.

§ 1238. By the statute 13 Eliz., which makes void all conveyUnder stat- ances, etc., with intent to defraud creditors, it is provided that the parties to any "such feigned, covinous, or fraudfraudulent ulent feoffment, gift, grant, alienation, bargain, conveyance, bonds, suits, judgments, executions," etc., "which dictable. at any time shall wittingly and willingly put in use, avow, maintain, justify, or defend the same, or any part of them as true, simple, and done, had, or made bonâ fide, and upon good considerations; or shall aliene or assign any the lands, tenements, goods, leases, or other things before mentioned, to him or them conveyed, as is aforesaid," besides the civil penalty, "being lawfully convicted thereof, shall suffer imprisonment for one half year without bail or mainprise." By statute 27 Eliz. the same provision is extended to those concerned in similar devices to defraud purchasers.1 Similar statutes have been adopted in several States of the American Union.

In a leading case reported under the statute of 13 Eliz., it was held in arrest of judgment, by Maule, J., delivering the opinion of his brethren, that an indictment lies under the act for a fraudulent alienation of real estate.3

1 See 2 Russ. on Crimes, 315; Roberts's Digest Brit. Stat. 294; 1 Chitty's Stat. 385.

R. v. Smith, 6 Cox C. C. 31. As to the English statute on fraudulent bank

ruptcy, may be consulted Steph. Dig. C. L. art. 388; Brett, ex parte, L. R. 1 Ch. D. 151.

9 See, for form of indictment, Whart. Prec. 518.

II. SECRETING GOODS.

§ 1239. By statutes in force in many States, the secreting of goods with intent to defraud creditors is an indictable offence. To constitute this offence it is necessary that there should be,

1st. An actual fraudulent secreting, assigning, or con

Secreting goods is

made indictable by statute.

veying of goods, etc., or a fraudulent reception of the same.

2d. An intent to prevent such property from being made liable for the payment of debts, or, in case of reception, a guilty knowledge of such intent.1

Secreting

or assigning must

be actual.

§ 1240. 1st. There must be an actual secreting or assigning of the goods. It is not enough that the debtor, to his creditor's face, refuses to surrender property which the creditor claims. Thus it was held that a refusal of a defendant to deliver up a watch to the sheriff's deputy was not within the statutes.2 The object of the law is not to make a man indictable who resists process, since for this another procedure exists, but to prevent the secret and covinous disposal of property in such a way as to elude the pursuit of the law and baffle an execution. A pointed illustration of this is the case of a trader, who, after obtaining credit by stocking his store with goods, either hides such goods until such time as he may be able, without suspicion or disturbance, to convert their proceeds to his own use, or consigns them to auction under such covers as may enable him to turn them into cash without his creditors' knowledge. It would seem, from analogy to the statutes of Elizabeth, that the offence would continue to be indictable, even if a consideration were received, if the intent to defraud were proved.

1 See State v. Marsh, 36 N. H. 196; Com. v. Damon, 105 Mass. 580. Under a recent English statute, see ruling in R. v. Rowlands, L. R. 8 Q. B. D. 530; 44 L. T. (N. S.) 286; where it was held that in such cases the questions for the jury were: (1) Did the defendant, either subsequent to the judgment being obtained against him, or within two months before the date of any unsatisfied judgment, remove or conceal VOL. II.-8

66

his goods? (2) Did he do so in defraud
of the particular creditor who had ob-
tained the judgment? (3) Does the
fact of his having done so, coupled
with the general evidence in the case,
satisfy the jury that his intention was
to defraud any and every person to
whom he might be indebted ?” See
London Law Times, May 27, 1882, p. 59.
2 People v. Morrison, 13 Wend. 399.
See People v. Underwood, infra.
113

§ 1241. 2d. An intent must be shown to prevent the property from being made liable for the payment of debts; or, in case of receivers, a guilty knowledge of such intent.' It is not enough that the debtor's object was to give a preference to a particular creditor.2

Intent or scienter must be shown.

When "all creditors" are protected by the act, as "creditors," it seems, may be classed even those whose debts are not yet due.3 Under such a statute it is unnecessary that the prosecutors should be judgment creditors.

The fact of indebtedness of some kind, however, on the part of the defendant, must be distinctly averred."

The federal statute, making it indictable to obtain goods by false pretences three months prior to bankruptcy, has been held unconstitutional, as not limited to acts in contemplation of bankruptcy.

1 See Com. v. Brown, 15 Gray, 189; Com. v. Strangford, 112 Mass. 289. Selling property with intent to defraud the lien holder is, in some States, made indictable. Nixon v. State, 55 Ala. 120; Robberson v. State, 3 Tex. Ap. 502.

2 Com. v. Hickey, 2 Parsons, 317. Johnes v. Potter, 5 S. & R. 519. People v. Underwood, 16 Wend. 546, citing Wiggins v. Armstrong, 2 John. Ch. 144.

little public importance. This is not like the case of a creditor seeking a civil remedy against a fraudulent debtor. There the creditor must complete his title by judgment and execution, before he can control the debtor in the disposition of his property; he must have a certain claim upon the goods before he can inquire into any alleged fraud on the part of the debtor. But this is a public prosecution, in which the creditor has no special interest.

Thus, in New York, Bronson, J., The legislature has relieved the honest said :

"The language of the act plainly extends to all creditors, and I can perceive no sufficient reason for restricting its construction to such creditors as have obtained judgments for their demands. The fraudulent removal, assignment, or conveyance of property by a debtor, which the legislature intended to punish criminally, usually takes place in anticipation of a judgment, and for the very purpose of defeating the creditor of the fruits of his recovery. If there must first be a judgment before the crime can be committed, the statute will be of very

debtor from imprisonment, and subjected the fraudulent one to punishment, as for a criminal offence. The crime consists in assigning or otherwise disposing of his property, with intent to defraud a creditor, or to prevent it from being made liable for the payment of his debts. The public offence is complete, although no creditor may be in a condition to question the validity of the transfer in the form of a civil remedy." Ibid. See, for forms, Whart. Prec. 507 et seq.

5 State v. Robinson, 9 Foster, 274. 6 U. S. v. Fox, 95 U. S. 670.