is presumptive only, and in reality may not have existed." The fraud in the class of cases under consideration does not fall within that category. It is of the kind referred to by the same author at page 468, in these words: "In some cases fraud is self-evident; and when so, it is the proper province of the court to adjudge upon it." Any criticism in the premises, based on considerations applicable to presumptive fraud, must therefore be misleading.

Again, it is frequently supposed that the terms “fraud in law" and "constructive and presumptive fraud" are equivalent expressions, and that the terms "fraud in fact" and "actual fraud" are also synonymous. This is based upon the supposition that “actual fraud" always implies a fraudulent intent on the part of the person complained of; and further, that as such intent is always a question of fact to be determined by a jury, therefore "actual fraud" is always a question for a jury. Hence it is reasoned that "actual fraud" is never the equivalent of "fraud in law," but that the latter is always the equivalent of "presumptive fraud." It follows by easy transition, in regular mental processes, that whenever a court, without the aid of a jury, has adjudicated that fraud exists, it can be no other than "presumptive or constructive fraud." These ideas colored the views of Judge Lowell in Brett v. Carter, where he "supposed it to be well settled" that in the class of cases under consideration "the question whether this was a fraud or not was one of fact for the jury, excepting under a peculiar clause in the bankrupt law of England;" and he thought it strange that after legislatures had so generally "met the difficulties of Twyne's case by requiring registration" and providing that "fraud shall be a question of fact for a jury," the Supreme Court of the United States and other courts should hold the transactions in question fraudulent and void in law. So, the REVIEW article in question echoes these doubts; and says that "an arbitrary rule declaring void all mortgages of personal property containing provisions that the mort

1 Big. on Fraud, lviii.

2

2 Low. 458

YALE LAW LIBRARY

gageor may retain possession, and sell in the usual course of business, must have the effect of annulling very many transactions which are without fraud in fact;" and that in all such cases "the question of fraud is one for the jury, to be determined from all the facts."

Further, it is urged that the State tribunals opposing this doctrine "have adhered to the safe and just rule that fraudulent intent is in all cases a question of fact," and that those courts who take the affirmative "have revived the old, rejected doctrine of constructive fraud." The difficulty in all these views of such transactions arises from a misconception of the nature and character of fraud as a legal question. The classification of fraud into "fraud in law" and fraud in fact" is not a happy one. The classification into "actual fraud" and "constructive fraud" is logical and explicable. But "actual fraud” and “fraudulent intent" are far from synonymous, and he who fails to distinguish between them will always err. "Actual fraud" means that which actually exists, whether determined by a court or found by a jury; and it may frequently be, and often is, found to exist in the absence of fraudulent intent. Wherever the intent to defraud becomes material, in a jury case, it is always "a question of fact for a jury;" but it by no means follows that if a court, without a jury, finds fraud to exist, it is always done upon the theory of a conclusive presumption. "Where the fraud is self-evident," says Mr. Bigelow, "it is the proper province of the court to adjudge upon it." I In such a case, it is as much fraud in fact, or actual fraud, as if some question had arisen for a jury to pass upon.

The truth is, that fraud is in one sense always a question of law; that is to say, it is to be determined by a court, as a matter of law, upon the facts of the case. In another sense, fraud is often to a certain extent a question of fact; that is to say, facts must be ascertained upon which the court can base its judgment. When the facts do not disclose either actual or intentional fraud, the judgment of the

1 Big. on Fraud, 468.

BOD

court frequently determines fraud as a presumption of law in the strict sense; and this alone is constructive or presumptive fraud. In a second class of cases, the intent of the parties is material, and in all jury cases that intent is to be determined by the jury; if the jury find the fact of a fraudulent intent, then the judgment of fraud is pronounced by the court. Of course, a court of equity may determine the fact of a fraudulent intent without the aid of a jury; or such aid may in many jurisdictions be invoked at the discretion of the court, or at the option of a party to the cause. In still a third class of cases, the facts of the case are apparent to the court, as, for instance, upon the face of a written contract; and without reference to the intent of the parties, the court sees the fraudulent character of the transaction as plainly as if an intent to defraud had been proven. Here the duty of the court is plain, to adjudge the fraud. Sometimes, therefore, actual fraud is adjudicated by the court upon the intent of the parties, irrespective of other facts (as, for instance, the bona fides of the indebtedness in the case); and sometimes, also, actual fraud is adjudicated by the court upon the facts of the case, irrespective of the intent of the parties. These classes of cases have been comprehended in the frequent declarations of the courts that fraud is the "judgment of the law upon facts and intents." A very full explanation of the relative offices of the court and the jury in these cases is given in Hughes v. Cory, by Judge Dillon, who, but for the controlling influence of the Iowa statutes, would doubtless have applied his own rules to the case of a mortgage on a stock of goods then under examination. He says: "A mortgage may be fraudulent in fact because there is no real debt; or, if one, because it is knowingly and purposely overstated, to deceive and keep off other creditors. When these facts are proved, fraud is an inference of law, and the jury is, under the direc

1 Doe dem. Otley v. Manning, 9 East, 64; Pettibone v. Stevens, 15 Conn. 26; Beers v. Botsford, 13 Conn. 154; Sturtevant v. Ballard, 9 Johns. 342; Morgan v. Elam, 4 Yerg. 438; Worseley v. De Mattos, I Burr. 474.

tion of the court, bound to find it; or though there be a real debt, yet if it can be shown that the controlling motive and object in making and taking the mortgage were not to secure the debt, but to hold the instrument as a shield to protect the debtor from his other creditors, this would make the mortgage fraudulent. The court should so instruct and the jury so find. These are merely instances of actual fraud, and other cases may easily be imagined. Any instrument is fraudulent which is a mere trick or sham contrivance, or which originates in bad motives or intentions, that is, made and received for the purpose of warding off other creditors." Here the learned judge refers to sham contrivances as one class of cases indicating actual fraud, and transactions originating in fraudulent intent as simply another class of similar cases, in which the judicial duty is the same. The process in the judicial mind, therefore, in those cases where putative mortgages of merchandise are declared fraudulent, is a familiar one, corresponding to that adopted in all cases where self-evident or actual fraud is declared by a court. If the agreement that the mortgageor shall retain the possession, potential control, and right of disposition of the goods appear on the face of the mortgage, the court, in exercising the duty of construction, ascertains the fraud; and no further duty could in such a case be assigned to a jury than to find the fact of the execution of the instrument, if that were disputed. If such an agreement appears by evidence aliunde, the result is the same when the fact is found; and no further duty can properly be assigned to a jury than to determine the fact of the agreement; when that fact is found, by verdict of a jury or otherwise, the judicial process is the same as if the fact appeared on the face of the mortgage. In each of these cases, the fraud adjudicated by the court is actual, not presumptive fraud.

But are the courts right who hold such a transaction to be actually fraudulent? Inasmuch as there is not and cannot be any universal and common definition of fraud, it may be that this is a question to be determined simply by the preponderance of authority; and if, as has been shown, the

logical processes of jurisprudence have been properly employed in reaching the result that such a transaction is actually fraudulent, the weight of authority, if on that side, ought to be allowed to close the discussion. But the reasoning employed and the elucidation given by the courts in adjudicating the fraud in these transactions are surely sufficient to bring them within the general definition of fraud as deceit or covin. Is it a fraud for A. to execute a so-called mortgage on his stock of goods to B., ostensibly to secure a debt, but reserving to himself the power to dispose of the goods in the usual course of trade? We are at once sent back to the fountain-head of the whole doctrine, Twyne's case, in which one reason given for the judgment of fraud was, "the donor continued in possession, and used them as his own, and by reason thereof he traded and trafficked with others and defrauded and deceived them." Said Lord Mansfield, in a case of this sort: "They who dealt with him trusted to his visible trade and stock; they were imposed on by false appearances." "It was inconsistent," said Lord Kenyon, that the grantor should "execute acts of ownership" after having ostensibly parted with her property to another. Such a transaction the Virginia courts hold to be "a felo-de-se," "as a security, naught," but reducing the whole contract into personal security; and reserving to the grantor a full power of revocation, and therefore "fraudulent per se." Such a transaction not being designed by the parties as operative between themselves, and necessarily operating to the prejudice of others, the New York courts pronounce it "conclusively fraudulent." The Ohio courts find its only and necessary effect to be that of "a ward to keep off other creditors." The Supreme Court of the United States takes the same view; says that such a mortgage "is inconsistent with the nature and character of a mortgage, is no protection to the mortgagee, and of itself furnishes a pretty effectual shield to a dishonest debtor;" and further, of the one in question, "manifestly it was executed to enable

1 Worseley v. De Mattos, 1 Burr. 467. 2 Paget v. Perchard, 1 Esp. 205.