1833.

ROBINSON

บ.

Davidson is to the case now before the Court. Mr. Serjeant Lens in argument said, " A transfer of part of a and another trader's property, for the purpose of raising money by CARRINGTON way of mortgage, or for the purpose of carrying on and others. trade, is not an act of bankruptcy. Here there was a transfer of only part of his property, to protect and not to defraud or delay his creditors; neither does the transfer amount to a fraud in law, as there was a very large surplus remaining after the property was conveyed. The general principle, with respect to such transfer of property, must be confined to the particular circumstances of each particular case; a principle which was recognized by the Court in Berney v. Viney, 4 Moore, 326, where the Court says, "It appears that the legal effect of the deed was to provide a speedier payment to the creditors at large by converting his real into personal property."

Such is the case of Berney and Davidson, every fact of which is totally different from the present. In Berney and Davidson the debtor was an old man of eighty, of large property, who was wholly ignorant of business, having been only a dormant partner, and involved in ruin by the misconduct of his partner. His only wish was to pay the creditors by a sale of part of his realty. In the present case the debtor was an active solicitor, was steeped in bankruptcy, having dishonoured all his bills, and being surrounded by executions, of which one was for the small sum of 271. He was insolvent beyond the possibility of redemption, and the conveyance, as is proved by the event, was so far from being beneficial to creditors, that it has secured 20s. in the pound to a portion, and left the general body a dividend not amounting to 2d. in the pound.

With respect to the position, that this conveyance is not productive of any evil, as it is merely doing what the

creditors might themselves have done, the answer is obvious. It has produced all the evil; it has produced this suit; it has given to one class of creditors 20s. in the pound, and to the others not as many pence, by placing the property beyond the reach of the law, by which each creditor has been delayed, and may ultimately be defeated. If the execution creditors had proceeded in regular course, it would have been attended with the result of every day's practice. The general creditors, attentive to their own interests, would have inquired and discovered anterior acts of bankruptcy (which did exist) by which the executions would have been defeated; inquiries which, by this assignment, have been prevented.

2dly, The parties had, in legal construction, notice that the deed was an act of bankruptcy; for notice of the existence of a deed, with notice of such facts as existed in the present case, is implied notice both at law and in equity. In Heirne v. Mill, 13 Ves. 121, the Lord Chancellor, when considering the various cases of constructive notice, says, "Another case is, where the law imputes that notice, which, from the nature of the transaction, every person of ordinary prudence must necessarily have. In the case of Hill v. Simpson, Fitz. 211, 3 Atk. 294, 2 Atk. 242, 3 Atk. 392, there is a direct recognition of the principle which is laid down in many cases. In Taylor v. Hibbert, 2 Ves. sen. 437, Lord Rosslyn states it thus: "I have no difficulty to lay down, and am well warranted by authority, and strongly founded in reason, that whosoever purchases an estate from the owner, knowing it to be in the possession of tenants, is bound to inquire into the estates those tenants have. It has been determined, that a purchaser, being told particular parts of the estate were in possession of a tenant, without any information as to his interest, and taking

1833.

ROBINSON and another

v.

CARRINGTON

and others.

1833.

ROBINSON

v.

CARRINGTON and others.

for granted it was only from year to year, was bound by the lease that tenant had, which was a surprise upon

and another him. That was rightly determined, for it was sufficient to put the purchaser upon inquiry that he was informed the estate was not in the actual possession of the person with whom he contracted; that he could not transfer the ownership and possession at the same time; that there were interests, as to the extent and terms of which it was his duty to inquire."

The same principle is laid down in Ferrars v. Cherries, 2 Vern. 384; and the reason is, that the titles of other men ought not to be shaken by creating a title, vested in a third person, through his own folly. The settlement after marriage did not recite the previous agreement, but it was held that the party ought to have gone to the wife's relations. In Spratt v. Hobhouse, 4 Bing. 180, upon a question whether a party had notice of an act of bankruptcy, it being admitted that he had notice of a docket having been struck, and he having refused to pay without an indemnity, the Court says, "On the other side of Westminster Hall, direct notice of an incumbrance has never been esteemed necessary to fix a purchaser; it is enough if he has been fairly put on his guard. The rule is, that where a purchaser could not have satisfied himself with a title but by looking at a deed which was necessary to complete the title, he shall be holden to have done so, otherwise he must take the consequence of crassa negligentia. According to the late acts, a party paying money after an act of bankruptcy is not liable to refund, unless at the time he was apprised of the circumstance; but he may be apprised in various ways; and though notice of a docket may not of itself be esteemed notice of a bankruptcy, yet, connecting such a notice with the circumstances of the defendants requiring security before they made the payment, no jury could

doubt that they had been sufficiently apprised of the act

of bankruptcy."

1833.

ROBINSON

V.

CARRINGTON and others.

It is the same with respect to a deed as with respect and another to any other act of bankruptcy. A denial to a stranger would not excite any suspicion in his mind, or, if he did not inquire into the cause of the denial, would it be any evidence of notice of an act of bankruptcy; but denial to a creditor who called again and again for payment of a debt would be such notice of the act as to be evidence of his notice of the intent. With respect to the case of Read and Ward, 7 Vin, 122, the words of the Chancellor are," Notice of the deeds is not notice of the fraudulent intent, other than to M. K. who was a party."

To apply this doctrine to the present case. The parties knew the situation of the bankrupt, that he was insolvent, violating engagements to meet his creditors, with eight or ten executions in his house, and one for such a small sum as 271. Were not these facts sufficient to apprise them of the necessity of inquiring with what intent the deed was executed?

2dly, If they had notice of the deed and of the intent, it is not protected because the commission did not issue within two months. Mr. Beames says, "that the deed, although it might be an act of bankruptcy, and invalidated under a commission which issued within two months of its execution, cannot be invalidated under this commission, which did not issue until more than two months after the execution; and in proof of this position he has referred to Tucker and Barrow, 3 Carr. & P. 87, by which it is determined that a preference cannot be invalidated under a commission that does not issue until after the lapse of two months from the time of the preference; but this nisi prius decision, which was clearly a mistake, is overruled by Beven v. Nunn, 9 Bing. 110, and 2 M. & S. 132.

1833.

ROBINSON

V.

CARRINGTON and others.

4thly, He committed an act of bankruptcy by absenting himself, as he broke an appointment to meet his creand another ditors, and broke it with the intent to delay them, of which the parties had notice. The cases upon this subject are, in order of time, as follow: Schooly v. Lee, 1822, 3 Stark. 149. The bankrupt was liberated on a promise that he would return and execute a bail-bond; he did not return according to his promise. Abbot, C. J.:-He absented himself, not in order to avoid a creditor with whom he had made an appointment, but merely to avoid the execution of a bail-bond. Tucker v. Jones, 1824, 2 Bing. 3-9, B. M. 24. The bankrupt promised to meet an agent of the creditors, as to giving security for a debt; he broke his appointment; the Court held that it was not an act of bankruptcy, as there was no evidence of an intent to delay creditors. Key v. Shaw, 1832, 1 M. & S. 464. In this case Mr. Justice Park said, "There was one point urged in argument to which I do not accede, viz. that a failure to keep an appointment made with a creditor constitutes an act of bankruptcy. In Toleman v. Jones it was expressly held, that merely appointing to meet a creditor at a given place, and failing to do so, is not an act of bankruptcy." Lord Chief Justice Best there said, "The intent to delay a creditor (which is a proof of fraud or insolvency) is the essence of the act of bankruptcy which this person is supposed to have committed. There was not even prima facie evidence of such an intent. It was only proved that he made an appointment with a creditor to meet him, and he did not keep that appointment. If a jury could, without more evidence, presume that he broke that engagement to delay his creditor, there are very few in the commercial world that could be assured they were not bankrupts. Robson v. Rolls, 1833, 9 Bing. 648. A trader, apprehensive that a ca. sa. had been issued against him in Middlesex,