v. Bartlett, 6 New Ca. 61. An assignment by a trader to a creditor of all his effects and stock in trade is of itself an act of bankruptcy, and the question of fraud should not be left to the jury. Siebert v. Spooner, 1 M. & W. 714.

An assignment of part of a trader's effects to a particular creditor (unlike, in this respect, to an assignment of the whole,) carries with it no intrinsic evidence of fraud; a trader must in the course of his business have the power to make over parts of his property either for past debts or for future advances. Thus it has been held that an assignment of part of a trader's property upon trust to sell and dispose of the proceeds as he shall direct, is not, in itself, an act of bankruptcy. Robinson v. Carrington, 1 Mont. & Ayr. 1.; and it is prima facie lawful. Chase v. Goble, 2 M. & G. 930. A trader, entitled to large freehold and leasehold estates, but greatly embarrassed, and having committed acts of bankruptcy, conveyed his freehold and leasehold estates to trustees upon trust to sell or mortgage, and to apply the produce as he should direct. It appearing that the trust deed was executed under advice for the purpose of effecting a conversion of the trader's property with a view to an arrangement with his creditors, to which he was himself considered incompetent from the state of his health, it was held, that the trust deed was not an act of bankruptcy. Greenwood v. Churchill, 1 Mylne & K. 546.; and see Carr v. Burdiss, 1 C. M. & R. 443.; Abbott v. Burbage, 2 New Ca. 444.

But when an assignment is made in contemplation of bankruptcy, and consequently with the intent to give the creditor a preference over the other creditors, it is contrary to the spirit and policy of the bankrupt law, and is not only void, but, whether it be by deed (as formerly), or by gift, delivery, or transfer of goods and chattels, is an act of bankruptcy. Eden, 32. A transfer of goods in satisfaction of a bona fide debt, made voluntarily and in contemplation of bankruptcy, is an act of bankruptcy, and is not protected by the sect. 81. of 6 Geo. 4. c. 16., though made more than two months before a commission issues. Bevan v. Nunn, 9 Bing. 107. In one case it appears to have been the opinion of the court, that a deed voluntarily executed by a trader in order to give a preference to particular persons to the prejudice of his general creditors, was fraudulent and an act of bankruptcy, although not made in contemplation of bankruptcy. Pulling v. Tucker, 4 B. & 4. 382. But it has since been held that, in order to render the conveyance of part of the bankrupt's effects fraudulent, something more than mere voluntariness is necessary; as contemplation of bankruptcy, see Gibbins v. Phillipps, 7 B. & C. 529.; Morgan v. Brundrett, 5 B. & Ad. 289. In order to constitute an act of bankruptcy, the conveyance must be both fraudulent and in delay of creditors; and contemplation of bankruptcy is evidence of fraud. Bayley J., in Gibbins v. Phillipps, supra. Whether the party contemplated bankruptcy is a question for the jury under all the circumstances of the case. Poland v. Glyn, 4 Bing. 22. (n.); Flook v. Jones, 4 Bing. 20. An assignment by an insolvent is void if made with the intention of petitioning the court for his discharge, though made more than three months before the commencement of the imprisonment. Becke v. Smith, 2 M. & W. 191. And an assignment may be fraudulent without contemplation of bankruptcy. Cook v. Caldecott, M. & M. 522.

Proof that a trader is in embarrassed circumstances is not conclusive evidence that he contemplated bankruptcy. A., a trader, purchased goods from B. on the 8th Oct. for exportation, but finding that he must stop payment, and that he could not apply them to the purpose for which they were bought, he returned them on the 16th Oct. to B., and on the 17th stopped payment, though expecting remittances from abroad more than sufficient to pay his debts, and though he had no doubt that his creditors would give him time. They, however, refusing, he was made bankrupt on the 2d Nov. Under these circumstances it was held, that the jury were warranted in finding that the delivery of the goods was not made in contemplation of bankruptcy. Fidgeon v. Sharp, 1 Marsh. 196.; and see Wheelwright v. Jackson, 5 Taunt. 109., Moore v. Barthrop, 1 B. & C. 5. To make out a case of fraudulent preference the actual bankruptcy must have been contemplated; the trader's knowledge that he was in a state of insolvency is not sufficient. Atkinson v. Brindall, 2 New Ca. 225. But see Porter v. Walker, 1 M. & G. 686.

In order to constitute a fraudulent preference, the transaction on the part of the trader must be voluntary. If the assignment or transfer be upon the importunity of a creditor, the transaction will be valid, and it is immaterial whether the trader had or had not an act of bankruptcy in contemplation at the time the creditor pressed for payment or security, and thereby obtained such payment or security. Hartshorn v. Slodden, 2 B. & P. 582.; Crosby v. Crouch, 11 East, 261; Belcher v. Jones, 2 M. & W. 258. Nor will it render such a transaction fraudulent that it was conducted under circumstances of secrecy. If the creditor was entitled to demand and to receive a security in goods for a running debt, upon what principle is he obliged to insist upon the transaction being conducted by his debtor with any particular circumstances of publicity, which might be, in other respects, injurious to the general credit of such debtor? Per Lord Ellenborough, C. J., Crosby v. Crouch, 11 East, 261. If a trader gives a preference to a creditor under an apprehension, however groundless, of legal process, such preference is valid. Thompson v. Freeman, 1 T. R. 155. And where a creditor, knowing his debtor to be in distressed circumstances and not able to pay his debts, applied to him for a security, and took part of his stock in trade for that purpose, it was held no undue preference, though the creditor did not threaten a suit in case of refusal. Smith v. Payne, 6 T. R. 152. So where A., a shopkeeper, procured B. to discount accommodation bills drawn by him and accepted by third persons, and B. afterwards required A. to give him a collateral security for the payment of the bills, upon which A. secretly deposited with him a quantity of goods from his shop to be sold for B.'s benefit, if the bills should not be paid; and soon after A. became a bankrupt, and the bills were dishonoured; it was held that the depositing of the goods in this manner as a security was not a preference in contemplation of bankruptcy. Crosby v. Crouch, 2 Camp. 166.; S. C. 11 East, 256. The consideration upon which a payment, made to an importunate creditor of a debt actually due, has been allowed to be valid, has not been that he might resort to a suit to enforce payment, but that his demand repels the presumption that the bankrupt, upon the eve of bankruptcy, made a distinction among his creditors, and spontaneously favoured one of them to the prejudice of the rest. A demand of further security for a debt

not yet due has the same effect, and in neither case is there any fraud upon the bankrupt laws, on which ground alone transactions previous to the bankruptcy can be set aside. Per Lord Ellenborough C. J., ibid. Again, where a trader, at the instance of his creditor, gave goods out of his shop in part payment of a bond not then due, the transaction was held valid. Hartshorn v. Slodden, 2 B. & P. 582.; Crosby v. Crouch, 11 East, 260. And where a trader, without solicitation and in contemplation of stopping payment, put three cheques into the hands of his clerk, to be delivered to a creditor at the counting-house of the latter, but, before the delivery, the creditor called upon the trader and demanded payment of his debt, it was ruled that, the intention of making a voluntary preference not having been consummated, the payment stood good. Bayley v. Ballard, 1 Camp. 416.; but see Singleton v. Butler, 2 B. & P. 283. post, and Cook v. Rogers, 7 Bing. 446., where Bayley v. Ballard is doubted. A debtor, being insolvent and in prison, went under a day rule to receive a sum of money due to him from an office; a creditor met him there and demanded and received, out of the money, payment of his debt, having no notice of the debtor's insolvency and imprisonment. Eight days afterwards a commission issued against the debtor. It was held that this was no fraudulent preference. Churchill v. Crease, 5 Bing. 177. A trader had property to a considerable amount standing in the Custom House in his own name, but in fact purchased on account of A. A bill deposited with A. by the trader, as a security, appearing to be a forgery, A. insisted upon having the property transferred to himself, which was done on the 14th and 15th of January. On the 17th the trader became bankrupt. Lord Ellenborough said that the question for the jury was, whether the transfer was voluntary, or made under the apprehension that a degree of force, civil or criminal, was about to be applied. De Tastet v. Carroll, 1 Stark. 88. ; and see Atkins v. Seward, Manning's Index, 62, 63. In these cases the length of time elapsing between the transaction and the bankruptcy, is a material consideration, and, with regard to the contemplation of bankruptcy the question is not what was the real state of the trader's affairs, but what was its state in his own judgment. Belcher v. Prittie, 10 Bing. 408.

But where a trader, being pressed by a creditor for payment or security, gave a bill of sale of certain wools and cloths in a mill apparently the whole of his stock, and immediately left his business and home and became bankrupt, it was held that, inasmuch as the act done did not redeem the trader even from any present difficulty, which is the ordinary motive for such an act when really done under the pressure of a threat, it was evidence that it was not done under such a pressure, but voluntarily, and with a view to prefer the particular creditor in contemplation of bankruptcy. Thornton v. Hargreaves, 7 East, 544. The acceptor of a bill of exchange, two days before the expiration of the time for which the bill was originally drawn, called upon the indorser, and informed him privately that he was insolvent: the indorser insisted on being paid the amount of the bill, offering at the same time to become security to the creditors for so much as the estate should produce; whereupon the acceptor paid it, and four days after became bankrupt. It appeared also, that the bill had been altered so as to make it fall due before this transaction, but without the indorser's knowledge. These circumstances were held to afford evidence of a fraudulent preference. Singleton v.

Butler, 2 B. & P. 283. See Bayley v. Ballard, 1 Camp. 416., supra. Where a trader, being pressed, conveyed estates in trust to sell and pay the pressing creditor, with a further trust to pay debts to certain relatives, it was held a preference in contemplation of bankruptcy. Morgan v. Horseman, 3 Taunt. 241. If evidence of a threat is given to shew that the transaction was not a voluntary one on the part of the bankrupt, it is still matter of consideration for the jury whether that threat had any operation or not, and the motives of the trader may be properly inquired into. Cook v. Rogers, 7 Bing. 438. Where a payment is clearly made in contemplation of bankruptcy, and voluntarily, the question whether it be a fraudulent preference becomes a matter of law rather than of fact. Semb. Gibson v. Muskett, 4 M. & G. 160.

The declarations of the trader connected with the fraudulent assignment are evidence towards establishing the act of bankruptcy. Ridley v. Gyde, 9 Bing. 349. To prove that goods had been fraudu lently given to certain creditors by the bankrupt, the plaintiff tendered evidence that they had, since the fiat, returned them to the assignees : Held inadmissible; for it only amounted to the expression of an opinion by them that they were not entitled. Backhouse v. Jones, 6 New Ca. 65.

Evidence of act of bankruptcy-lying in prison.] This act of bankruptcy, under sect. 5. of 6 Geo. 4. c. 16., does not relate to the first day of the imprisonment. Higgins v. M‘Adam, 3 Y. & J. 1.; Moser v. Newman, 6 Bing. 556. In order to render a lying in prison twentyone days an act of bankruptcy, the arrest must be for a subsisting legal debt. Eden, 35. A penalty due to the crown has been considered a sufficient debt. Cobb v. Symonds, 5 B. & A. 516. The time of lying in prison commences from the first arrest, the day of arrest being included. Glassington v. Rawlins, 3 East, 407. Where bail is put in, and the defendant surrenders in discharge of his bail, the time is computed from the surrender; Tribe v. Webber, Willes, 464.; but where the bankrupt was arrested in Kent on the 31st of March, and on the 8th of May brought by habeas corpus to be bailed, and on the road to the judge's chambers was permitted to call at his attorney's house, which was out of the county of Kent, whence he was carried directly to a judge's chambers, to be bailed, and was bailed accordingly, and immediately surrendered by the bail, it was held, that the act of bankruptcy had relation to the 31st March. Rose v. Green, 1 Burr. 437. If the defendant is suffered to go at large after the arrest, and afterwards returns into custody, the time is computed from the return. Barnard v. Palmer, 1 Camp. 509. Where the defendant at the time of the arrest was sick, and consequently suffered to remain some time in his own house, the key of which was kept by the officer's follower not named in the warrant, the time was held to run from the arrest. Stevens v. Jackson, 4 Camp. 164.; S. C. 6 Taunt. 106. And so where the party has the benefit of day rules during the period. Soames v. Watts, i C. & P. 400. If a commission (or fiat) issues before the time expires, it cannot be supported, though it would be no objection that the requisite time had not expired when the docket was struck. Gordon v. Wilkinson, 8 T. R. 507.; Wydown's case, 14 Ves. 80.

The arrest may be proved by an examined copy of the writ, and return of cepi corpus, or by proof of the writ, the warrant, and the

Actions by Assignees of Bankrupts. — Act of Bankruptcy.

513

arrest; see antè, pp. 75. 388. The fact of lying for twenty-one days in prison may be proved by the production of the prison books. Salte v. Thomas, 3 B. & P. 188. The cause of the commitment may be proved by production of the committitur. Ibid.

Evidence of act of bankruptcy — filing petition to take the benefit of the insolvent act.] This act of bankruptcy is introduced in the insolvent acts, of which the latest is 1 & 2 Vict. c. 110. s. 39. The filing of the petition is not, however, to be an act of bankruptcy, unless the party be declared bankrupt before the time advertised in the Gazette for hear ing the petition, or within two calendar months from the filing of it; within which time it will have the effect of avoiding the assignment under the insolvent act. The filing of the petition is not complete till it reaches its final destination in the proper office. Garlick v. Sangster, 9 Bing. 46. An office copy of the petition under the seal of the Insolvent Court is made evidence by sect. 105. of the same act.

Evidence of act of bankruptcy — filing an affidavit of debt.] By 1 & 2 Vict. c. 110. sect. 8., for abolishing arrest on mesne process, a creditor may make his debtor a bankrupt (if a trader) by filing an affidavit of debt in a court of bankruptcy, and by serving him personally with a copy, and with a written notice demanding immediate payment. If the trader does not pay, secure, or compound for the debt within twenty-one days after such service, or enter into a bond approved of by the commissioner to pay such sum and costs as shall be recovered in an action, or render himself into custody in the court in which the action is brought, such trader shall be deemed to have committed an act of bankruptcy on the 22d day, provided a fiat issues within two calendar months after filing the affidavit.

Similar acts of bankruptcy have been introduced into 5 & 6 Vict. c. 122. (see next head); but it has been considered that the former provisions are not repealed by those of the latter act. Ex parte Cheese, 12 Law Journ., N. S. 33.

Evidence of act of bankruptcy — under 5 & 6 Vict. c. 122.] By sect. 11, 12, & 13. of this act, if the creditor of a trader files an affidavit of debt in any bankruptcy court after an account delivered and a notice demanding immediate payment, the debtor is summoned to appear; upon appearance he is required to make a written admission of the debt, or an affidavit that he has a good defence; if he refuses to do either, or to appear, and does not, within fourteen days after personal service of the summons, pay, secure, or compound to the satisfaction of the creditor, or execute a bond to pay the sum, with costs, to be recovered in an action for the debt, he shall be deemed to have committed an act of bankruptcy on the fifteenth day, provided a fiat shall issue within two months after filing the affidavit.

By sect. 14., if the debtor upon such summons admits the debt, and does not pay, tender, secure, or compound for it as above within fourteen days, this also is an act of bankruptcy on the fifteenth day, provided the fiat issues within two months. A like provision is made by sect. 15., where the debtor admits part only of the debt.

By sect. 20. nonpayment of a judgment debt within fourteen days after personal service of a notice demanding payment is an act of