Pratt, Jr. v. Curtis et al. fraud of his creditors;" being intended, I suppose, to meet any possible doubt that might remain, notwithstanding that decision. THIRD. Does the bill state a case of fraud on creditors? The defendants very justly draw a distinction between creditors at the time of the conveyance and those who become such afterwards. Under our laws, which require the recording of deeds for the very purpose of notifying creditors as well as purchasers, this general distinction, which is admitted even in England, is highly just and equitable. It has been fully adopted by the courts of the United States in the cases cited. It is however the statute of 13 Elizabeth as adopted and construed in Massachusetts, which governs this case, and I have therefore examined the decisions of this state with some care. From them I derive the following propositions: FIRST. A voluntary conveyance to a wife or child is not fraudulent per se, but it is a question of fact in each case whether a fraud was intended. · SECOND. Such a deed made by one who is considerably indebted is prima facie fraudulent, and the burden is on him to explain it. THIRD. This he may do by showing that his intentions. were innocent, and that he had abundant means, beside the property conveyed, to pay all his debts. FOURTH. If the deed was not in fraud of existing creditors the burden of proof is on the subsequent creditors to show a fraud on them. Thatcher v. Phinney, 7 Allen, 146; Lerow v. Wilmarth, 9 Allen, 382; Winchester v. Charter, 12 Allen, 606; s. c. 97 Mass. and 102 Mass. The bills do not allege the facts which would be necessary to show a fraud on subsequent creditors only; but the rule appears to be that if a deed is avoided by antecedent creditors, the land or its proceeds goes to creditors generally. Walker v. Burrows, 1 Atk. 94; Townshend v. Windham, 2 Ves. Sr. 11; Jenkyn v. Vaughan, 3 Drew, 419; Whittington v. Jennings, 6 Sim. 493. The case last cited went this length: that a creditor whose account had been running when the voluntary settlement was made, might Pratt, Jr. v. Curtis et al. set it aside, though the items of debt at the date of the deed. had all been paid, the balance having always been increasing. I am not aware that the precise point has arisen in Massachusetts; but the dicta support of the plaintiff's view, that if a conveyance is fraudulent as to existing creditors, it is so as to all. Winchester v. Charter, 12 Allen, 609. In England there appears to be another rule in equity, that if there be nothing to impeach the settlement excepting that it is voluntary, no secret trust and no intent to defraud subsequent creditors, they will not be permitted to impeach the deed without showing one or more antecedent debts outstanding when the bill is filed. Halloway v. Millard, 1 Mad. 414; Lush v. Wilkinson, 5 Ves. 384. This doctrine is not easily to be reconciled with the other, nor with preinple, because it makes the validity of the conveyance depend on matters arising ex post facto. It probably gained a footing in the courts at a time when such conveyances were held to be absolutely fraudulent in law as against existing creditors, and was a sort of equitable mitigation of the rigor of that doctrine. Whether this is the law here, I do not now inquire, because this bill alleges the existence of antecedent debts. Whether the grantor must be actually insolvent at the time, in order to render the conveyance fraudulent against existing creditors, has been mooted. In Winchestor v. Charter, 12 Allen, 609, BIGELOW, C. J., says that a voluntary transfer of property by a person deeeply indebted and whose property was inadequate " or barely sufficient" for the payment of his debts, would furnish strong presumptive evidence of fraud. At another place on the same page he says it is necessary to show that he was indebted beyond his probable means of payment. In Parish v. Murphree, 13 How, 100, MCLEAN, J., says that in case of a merchant, insolvency need not be proved; it is enough to show that his situation was such that a prudent man with an honest regard for the rights of his creditors could not have made such a settlement. I am much inclined to believe that if insolvency were distinctly Pratt, Jr. v. Curtis et al. proved, as matter of fact, the intent to defraud existing creditors would follow as matter of law, because one who undertakes to make a voluntary conveyance must be presumed to know the state of his affairs. Christy v. Courtenay, 13 Beav. 96. It has been so held even in cases of preference; but the argument applies much more strongly to a gift, because a trader may often make payments of just debts in the ordinary course of business without any thought of his standing in respect to other creditors; but in making a gift he undertakes to say that he is in a position to make it with justice to them. On the other hand, if insolvency is not clearly shown, the true inquiry perhaps is that put by Mr. Justice McLean, whether a prudent man, having a just regard for the rights of his creditors, would have permitted himself to do the act. These bills do not allege insolvency; but all the cases agree that if the grantor is much indebted or is embarrassed, the burden of proof is on him to explain the transaction, if questioned by existing creditors, and these facts are alleged; it follows that the bills are sufficient to require the respondents to answer, unless their objection that the deeds can be set aside only to the extent that may be necessary to pay antecedent debts, and that the assignee cannot work out this equity, is well taken. We have already seen that the doctrine of courts of equity in England appears to be, that if the deed is set aside, the property becomes assets. I do not decide this point, however, because in my opinion, the assignee in bankruptcy and he only has the right to impeach the deed in the interest of any class of creditors. Great confusion would arise from any rule which required creditors to follow the property on their own account and in the state courts; and on the other hand full power is given to this court to set aside all fraudulent conveyances to which creditors are affected and to marshal all assets. Many cases might arise in which the only difficult point to be decided would be whether all the creditors or only certain of them were interested, and upon the theory of the defence it would depend upon the decision of that point whether the suit Davis v. Anderson et al. should stand or fall, though it was clear that the deed was fraudulent as to some creditors; while if the assignee can bring the suit in either event, that difficulty is obviated. The second bill seems to be defective so far as Mr. Wiswall is concerned, in not alleging distinctly his participation or knowledge of the fraud. He is not a necessary party to the bill, because the other defendants may be required to account for the proceeds of the sale, although his title should be found or be admitted to be unimpeachable. Indeed MARSHALL, C. J., has said in such a case, that no decree ought to be made against a purchaser, so long as there were volunteers before the court who were able to pay the debt. Hopkirk v. Randolph, 2 Brock, 132. The demurrer is sustained as to the defendant Wiswall, with costs, unless the plaintiff chooses to amend within ten days upon the terms of paying his costs up to this time. The other defendants are to answer over in two weeks, their demurrer being overruled. UNITED STATES DISTRICT COURT-E. D. MISSOURI. Creditors of bankrupt having security, whether by judgment, mortgage or otherwise, must prove their debts against the bankrupt and foreclose their liens under the authority of the court in bankruptcy, or they may not only be barred of their debt, but may also lose the benefit of their securities. A sale of the debtor's land by virtue of an execution issued and levied after the filing of the petition in bankruptcy, will not pass the title to the land as against the assignee, although the judgment was entered and the lien created prior to the bankruptcy. After the commencement of the proceedings in bankruptcy, all the property and assets of the bankrupt are in custodia legis, within the control of the bankrupt court only, and no other tribunal can interfere with its process. It is not essential to the title of the assignee that the assignment to him by the register should be recorded within six months from its date. title of the assignee takes effect by relation from the commencement of the proceedings in bankruptcy, and the recording is not required for the mere purpose of giving notice to purchasers. The The limitation of two years in section two of the bankrupt act applies only to property held adversly to the bankrupt and his assignee. Where the bankrupt fraudulently conveyed his lands to avoid a judgment, a purchaser under the judgment and a sale made under execution after proVOL. VI.-10 A Davis v. Anderson et al. ceedings in bankruptcy commenced, cannot defend on the ground that the assignee did not commence suit to set aside the execution, sale and deed within two years after the assignment. No cause of action accrued to the assignee against such purchaser until he acquired his title under the judgment and execution sale. The bankrupt court may order a sale of the bankrupt's property free and clear of encumbrances, and the secured creditor will then have his remedy only against the fund in court. If the secured creditor fails to prove his debt and proceeds against the fund, he does so at his peril. DAVIS, Assignee, v. ANDERSON et al. TREAT, J.-This is a bill to set aside certain sheriff's deeds for bankrupt's property, the levy, sale and deeds having been made after adjudication had in bankruptcy. On the fourth of April, eighteen hundred and sixty-seven, six judgments were rendered in the circuit court of Scott county in favor of said county against Archibald P. Lane and others. On the first of February, eighteen hundred and sixtyeight, Lane filed his petition and was adjudicated a bankrupt. On the twenty-sixth of March following, the plaintiff was appointed assignee. On March thirteenth, eighteen hundred and sixty-eight, executions were issued on said judgments, and a levy made on a portion of bankrupt's real estate; and on April ninth, eighteen hundred and sixty-eight, the sale thereof was made to Joseph T. Anderson and William B. Anderson, and the deed therefor executed and delivered October sixth, eighteen hundred and sixty-eight. On September fifteenth, eighteen hundred and sixty-eight, a levy was made on another portion of bankrupt's real estate, and a sale had thereunder October seventh, eighteen hundred and sixty-eight, to said Anderson, to whom the sheriff's deed therefor was made and delivered November thirteenth, eighteen hundred and sixty-eight. On March nineteenth, eighteen hundred and sixty-nine, another levy was made under said judgments, and a sale on April ninth, eighteen hundred and sixty-nine, of another portion of the bankrupt's real estate, was made to Joseph T. Anderson, and a deed therefor delivered. The price paid at the first sale was twenty-five dollars; at the second fifty-five |