4. It has been frequently held, that the device of covering property as neutral, when in truth it was belligerent, is not contrary to the laws of war or of nations. Contracts made with underwriters in relation to property thus covered, have always been enforced in the courts of a neutral country, where the true character of the property, and the means taken to protect it from capture, have been fairly represented to the insurers. The same doctrine has always been held where false papers have been used to cover the property, provided the underwriter knew, or was bound to know, that such stratagems were always resorted to by the persons engaged in that trade. If such means may be used to prevent capture, there can be no good reason for condemning with more severity the continuation of the same disguise after capture, in order to prevent the condemnation of the property, or to procure compensation for it, when it has been lost by reason of the capture. Courts of the capturing nation would never enforce contracts of that description; but they have always been regarded as lawful in the courts of a neutral country. De Valengin's Administrators v. Duffy, 14 Peters, 282.

5. The Bank of the Metropolis contracted to deliver a title in fee simple to Guttschlick, of a lot of ground; and at the time of the contract, they held the lot by virtue of a sale made under a deed of trust, at which sale they became the purchasers of the property. The same lot had, by a deed of trust executed by the same person, been previously conveyed to another person, to indemnify an endorser of his notes; and it was by the trustee afterwards, and after the contract with Guttschlick, sold and purchased by another. Held, That at the time of the contract of the bank, they had not a fee simple in the lot which could be conveyed to Guttschlick. The Bank of the Metropolis v. Guttschlick, 14 Peters, 19.

6. The United States instituted an action of debt against the defendant, William Linn, and his sureties, to recover a sum of money in the hands of Linn, he having been appointed a receiver of public moneys at the land office of the district of Vandalia, on the 12th of February, 1835. The first count in the declaration stated that the defendants had executed, on the 1st of August, 1836, a "writing obligatory, sealed with their seals," to the United States, in the sum of one hundred thousand dollars, for the faithful performance of the duties of his office by Linn; and that certain sums of money had been paid into the hands of Linn, as receiver, which he had failed to account for and pay over to the United States. The second count stated the execution of "an instrument of writing" to the United States by the defendants, signed by them, by which they promised to pay one hundred thousand dollars to the United States, which was to be void and of no effect in case Linn faithfully executed the duties of the office of receiver of public moneys; and alleging that Linn had received a large sum of public money belonging to the United States, which he had failed to pay

judges of the circuit court of Illinois were divided in opinion, and the division was certified to the supreme court, upon two questions: 1. Whether the obligation of the defendants, being without seal, is a bond within the act of congress. 2. Whether such an instrument is good at common law. Held, 1. That the obligation, being without seal, is not a bond within the act of congress. 2. That such an instrument is good at common law. The United States v. Linn, 15 Peters, 290.

7. If the contract signed by the defendants was entered into for a lawful purpose, not prohibited by law, and is founded on a sufficient consideration, it is a valid contract at common law. Ibid.

8. From the decision of this court in the case of The United States v. Tingey, it follows that a voluntary contract, or security, taken by the United States for a lawful purpose, and upon a good consideration, although not prescribed by any law, is not entirely void. Ibid.

9. Linn had been appointed receiver of public moneys before the execution of the instrument declared upon, and was entitled to the emoluments of the office. This was a sufficient consideration appearing on the face of the instrument to support the promise. A benefit to the promissors, or a damage to the promissee, constitutes a good consideration. A consideration to the principal was sufficient to bind the sureties. Ibid.

10. The mere appointment of Linn as receiver of public moneys was not the consideration of the contract; but the emoluments and benefits resulting from the appointment, formed the consideration. It was a continuing consideration, running with his continuance in office, and existed in full force at the time the instrument was signed. Ibid.

11. The act of congress under which this instrument was taken, directs that a receiver of public moneys shall, before he enters on the duties of his office, give bond, with approved securities, for the faithful discharge of the duties of his trust. This statute does not profess to give the precise form of the bond. It is only a general direction to give a bond for the faithful discharge of the trust. There were no negative words in the act, nor anything, by implication or otherwise, to make void a security taken in any other form; nor is there anything in reason or sound principle that should lead to such a conclusion. Ibid.

12. The actual difference between an instrument under seal, and one not under seal, is, that in the one case the seal imparts a consideration, and in the other it must be proved. There ought to be some very strong grounds to authorize a court to declare a contract absolutely void, which has been voluntarily made, upon a good consideration, and delivered to the party for whose benefit it was intended. Ibid.

13. It is a general principle, if one have knowledge of particular facts, upon which he intends to rely to exempt him from a pecuniary obligation about to be contracted with another, of which

on the ground that the vendor has rescinded the contract. Utterback v. Binns, 1 M'Lean's C. C. R. 243.

31. A contract made in fraud of the law, or against public policy, is void. Piatt v. Oliver et al., 1 M Lean's C. C. R. 295.

32. Time may be made of the essence of the contract. Longworth v. Taylor, 1 M'Lean's C. C. R. 395.

33. And is never to be wholly disregarded. At law it is always essential. Ibid.

34. A contract made in fraud of the law, which grows out of an immoral act, will not be enforced. Piatt v. Oliver et al., 2 M'Lean's C. C. R. 267.

35. An agreement not to bid against each other at a sale on execution, is void, as against public policy. Ibid.

36. But an association of individuals, to buy public lands at a public sale, is not unlawful. Ibid.

37. It may well be doubted whether such sale stands upon the same footing as a sale upon execution. Ibid.

38. The agreement was, to purchase certain tracts for a certain company; not that the individuals composing the firm should not bid against each other. Ibid.

39. An agent, and one of the parties, should not avail himself of the illegal contract. Ibid. 40. The public sale was sanctioned by the government. Ibid.

41. Where A, being post-master, gave an official bond to the United States, and subsequently employed B as assistant, and the receipts from the post-office were deposited in their joint names, an action was brought against A, on his bond, and judgment recovered, but he having subsequently become bankrupt, the present action was brought against A and B, it was held, that the deposit in the joint names of A and B did not make them jointly responsible; that there was no privity of contract between B and the United States; and that, even if there were, the former judgment against A was a bar to the present suit. Trafton v. United States, 3 Story's C. C. R.

646.

See AGREEMENT, Ante, page 122.

CONVEYANCES IN FRAUD OF CREDITORS.

1. An absolute bill of sale of personalty, by an insolvent, is fraudulent against creditors, unless possession of the property assigned or transferred accompanies or follows the deed. The absence of such possession is not merely evidence of fraud, but is a circumstance, per se, which makes the transaction fraudulent. Hamilton v. Russell, 1 Cranch, 309; 1 Cond. Rep.

318.

of the English judges therefore apply to this case. Ibid.

3. The fact, that the grantor retains possession of property which he has conveyed, is not an evidence of fraud, where the conveyance, from its terms, is to leave the possession in the vendor. United States v. Hooe et al., 3 Cranch, 75; 1 Cond. Rep. 458.

4. A deed made upon an adequate and valua ble consideration, which is actually paid, and the change of property is bona fide, or such as it purports to be, cannot be considered as a conveyance to defraud creditors. Wheaton v. Sexton's Lessee, 4 Wheat. 503; 4 Cond. Rep. 519.

5. A debtor has a right to prefer one creditor to another; and his private motives in giving this preference, provided the preferred creditor has done nothing improper, cannot annul this right. But any unlawful consideration, moving from the preferred creditor to induce this preference, may avoid the deed which gives it. Marbury v. Brooks, 7 Wheat. 556; 5 Cond. Rep.

344.

6. It is not necessary to the validity of such a deed, that the creditors, for whose benefit it is made, should have notice of the execution of the deed, provided they afterwards assent to the provisions made for their benefit. Ibid.

7. A debtor has a right to prefer one creditor in payment; and it is no objection to the validity of an assignment for this purpose, that it was made by the grantor and received by the grantee, a mere trustee to execute this design; in the hope and expectation, and with a view of preventing the creditor thus preferred from instituting a prosecution for forging the instruments on which the debt originated, if the creditor had done nothing to excite that hope; and the assignment was made without his knowledge of the motive which influenced the grantor, or was not afterwards assented to by him under some engagement, express or implied, to suppress or forbear the prosecution. Brooks v. Marbury, 11 Wheat. 78; 6 Cond. Rep. 223.

8. A grant or assignment of goods and chattels is valid between the parties, without actual delivery; and the property passes immediately upon the execution of the deed. But, as to creditors, the title is not considered as perfect, unless possession accompanies and follows the deed. Meeker et al. v. Wilson, 1 Gallis. C. C. R. 419.

9. In general, the want of possession is not merely an evidence or badge of fraud, but con stitutes in itself a fraud, which renders the trans. action, as to creditors, void. Ibid.

10. The statute of 13 Eliz., ch. 5, is now fully settled to be only an affirmance of the common law. Ibid.

the same inference of legal fraud arises as if the property had been originally capable of imme

12. If there has been a fraudulent concealment of the assignment, or gross negligence, such as establishes an original fraudulent design, the assignment is void in toto. It is void, ab initio, as to creditors, injured by the fraud, as to all the property included in it. But if the assignment was bona fide, mere negligence, as to taking possession of a particular part of the property assigned, would not take away the title of the assignor to other property, as to which there had been due diligence. The question, as to the validity of such an assignment, reduces itself to a question of good faith, valuable consideration, and reasonable diligence. D'Wolf v. Harris, 4 Mason's C. C. R. 537.

13. An insolvent debtor has a right to prefer one creditor to another in payment, by an assignment made bona fide; and no subsequent attachment or subsequently acquired lien will avoid such assignment. Spring et al. v. S. C. Insurance Company et al., 8 Wheat. 268; 5 Cond. Rep. 434.

14. Such an assignment made, includes choses in action, as a policy of insurance; and will entitle the assignee, in case of loss, to receive from the underwriters the amount insured: and it is not necessary that such an assignment should be accompanied by an actual delivery of the policy. Ibid.

15. Every debtor has a legal right to assign property for the security of debts due to him; and so far from such act being reprehended by the law, it is justified and approved. Pearpont & Lord v. Graham, 4 Wash. C. C. R. 232.

16. In general, the want of possession is not merely an evidence or badge of fraud; but constitutes, in itself, a fraud, which renders the transaction, as to creditors, void. 1 Gallis. C. C. R. 419.

17. Without undertaking to suggest, whether, in any case, the want of possession of the thing sold, constitutes, per se, a badge of fraud; or is only, prima facie, a presumption of fraud; it is sufficient to say, that in case even of an absolute sale of personal property, the want of such possession is not presumption of fraud, if possession cannot, from the circumstances of the property, be within the power of the parties. Conrad v. The Atlantic Ins. Co., 1 Peters, 449.

18. In cases where the sale is not absolute, but conditional, the want of possession, if consistent with the stipulations of the parties, and, a fortiori, if flowing directly from them, has never been held to be, per se, a badge of fraud. Ibid. 19. If, at the time of the transfer, the property was out of the country, possession must be taken within a reasonable time after its return, or the grant will be held fraudulent. Meeker v. Wilson, 1 Gallis. C. C. R. 419.

20. Notice to a judgment creditor, of an assignment of the property of his debtor, where possession had not been taken under the assignment, does not affect the right of the sheriff or the creditor to seize the property in execution, as the property of the assignor. Ibid.

22. A conveyance of the whole of his property by a husband to trustees, for the benefit of his wife and his issue, is a voluntary conveyance; and is at this day held by the courts of England to be absolutely void under the statute of the twenty-seventh of Elizabeth, against a subsequent purchaser, even although he purchased with notice. These decisions do not maintain that a transaction valid at the time is rendered invalid by the subsequent act of the party. They do not maintain that the character of the transaction is changed; but that testimony afterwards furnished may prove its real character. The subsequent sale of the property is carried back to the deed of settlement, and considered as proving that deed to have been executed with a fraudulent intent to deceive a subsequent purchaser. Cathcart et al. v. Robinson, 5 Peters,

264.

23. A subsequent sale, without notice, by a person who had made a settlement not on valuable consideration, was presumptive evidence of fraud; which threw on those claiming under such settlement the burden of proving that it was made bona fide. This principle, therefore, according to the uniform course of the supreme court, must be adopted in construing the statute of the twenty-seventh of Elizabeth as it applies to this case. Ibid.

24. Even if the grantor in deeds be justly chargeable with fraud, but the grantees did not participate in it; and when they received their deeds had no knowledge of it, but accepted the same in good faith; the deeds upon their face purporting to convey a title in fee, and showing the nature and extent of the premises: there can be no doubt the deeds do give colour of title under the statute of limitation. Gregg v. The Lessee of Sayre und Wife, 8 Peters, 244.

25. G., the executor of his father, who had devised his estate to G. and his other children, sold the estate and became himself the pur chaser of it; and in order to secure the portions of the other devisees, who were minors, confessed a judgment, June 1, 1819, on a promissory note, in favour of two persons, without their knowledge, in a sum supposed to be sufficient to be a full security for the amount of the portions of the minors. The judgment was kept in full operation by executions regularly issued upon it; so as, under the laws of South Carolina, to bind the property of G. He was then engaged in mercantile pursuits, and had other property than that so purchased by him. G. afterwards became insolvent, and the claims of the devisees of his father, under the judgment, were con tested by his creditors as fraudulent; the plaintffs, in the judgment, having no knowledge of it when it was confessed, the amount of the sum due to the co-devisees not having been ascertained when it was confessed, no declaration of trust having been executed by the plaintiffs, and

false representations of his situation having been made by G. after the judgment, whereby his creditors were induced to give him time on a judgment confessed to them subsequently. The judgment of June 1, 1819, was held to be valid, and the plaintiffs in that judgment entitled to the proceeds of the sales of the estate of G., for the satisfaction of the amount actually due to the co-devisees by G. Bank of Georgia v. Higginbottom, 9 Peters, 48.

26. Upon principle and authority, to make an antenuptial settlement void as a fraud upon creditors, it is necessary that both parties should concur in, or have cognizance of the intended fraud. If the settler alone intend a fraud, and the other party have no notice of it, but is innocent of it; the wife is not, and cannot be affected by it. Marriage, in contemplation of the law, is not only a valuable consideration to support such a settlement, but is a consideration of the highest value, and from motives of the soundest policy, is upheld with a strong resolution. The husband and wife, parties to such a contract, are therefore deemed, in the highest sense, purchasers for a valuable consideration; and so that it is bona fide, and without notice of fraud, brought home to both sides, it becomes unimpeachable by creditors. Magniac v. Thompson, 7 Peters, 348.

27. Fraud may be imputed to the parties, either by direct co-operation in the original design, at the time of its concoction, or by constructive co-operation from notice of it, and carrying the design upon such notice into operation. Ibid.

28. Among creditors equally meritorious, a debtor may conscientiously prefer one to another; and it can make no difference that the preferred creditor is his own wife. Ibid.

29. Marriage articles or settlements are not required by the laws of New Jersey to be recorded, but only conveyances of real estate; and as to conveyances of real estate, the omission to record them avoids them only as to purchasers and creditors, leaving them in full force between the parties. Ibid.

30. A purchase was made of one hundred and ninety-eight boxes of sugar, for which certain acceptances, drawn by the purchaser, and endorsed and accepted for his accommodation, were to be given to secure payment. The sugars were to be shipped on board of a ship belonging to the purchaser, then lying in the same port, and bound on a foreign voyage. The accep tances were to be delivered upon the return of the purchaser from Boston: he failed, and assigned his property. During his absence, a part of the sugars were put on board of the ship. After his return, he kept his own failure a secret, and also the failure of his endorsers and acceptor, and procured a delivery of the residue of the sugars, on the faith that the acceptances were to be duly given. Held, by the circuit court, that if the delivery of the sugars, under these circumstances, was not intended by the parties to be an absolute delivery, but a delivery on condition only, that the terms of the contract were complied with; then the vendor might re

claim the sugars, and his property in them was not gone. It was further held, that if the delivery of the sugars, after the failure, was proved by a fraudulent suppression of that fact, the delivery, as to that portion, was altogether without any legal validity, whatever might be the case as to the other parcels. D'Wolf, Jr. v. Babbett, 4 Mason's C. C. R. 289.

31. Want of possession of real estate is not, as it is of personal estate, a presumption of fraud. Pettiplace v. Sayles, 4 Mason's C. C. R. 312.

32. Where A made an assignment of a vessel at sea, in trust to B, to indemnify B for endorsements, and also to pay the demands of certain other creditors named in the conveyance: Held, that the taking possession of the vessel by B, in a reasonable time and manner after her return, would be a sufficient delivery and possession to support the assignment; although the creditor of it should attach the vessel before such possession was attained: Held, also, that it was not necessary to the validity of the assignment, that the creditors should be technical parties to it, nor that their assent should in any manner be given to it at the time of its execution, if they assented before any attachment of the property. Held, further, that the assignment being for the benefit of the preferred creditors unconditionally, and without any stipulation for a release or otherwise, the law would, in such a case, presume the assent of the creditors. Wheeler v. Sumner, 4 Mason's C. C. R. 183.

33. If a marriage contract is executed, the wife is a purchaser, and the contract is valid, though the husband was in debt at the time. Magniac v. Thompson, 1 Baldwin's C. C. R. 353. 34. It is a general principle, that a voluntary conveyance, made by a person indebted at the time, is void as to the creditors whose debts existed when the gift was made. But, though the fact of the donor's being indebted at the time of such voluntary conveyance, is a strong badge of fraud; yet, where the donor's fortune was ample, and a gift made by him to his daughter at her marriage was comparatively trivial, and the husband received and retained possession of the subject of the gift; though the donor afterwards became insolvent, the court refused to set aside the gift as fraudulent; a reasonable advancement made under such circumstances, not being embraced by the statute of frauds. Hopkirk v. Randolph et al., 2 Brockenb. C. C. R. 132. See also, 7 Peters, 204.

35. Query, How far the intervening marriage of the daughter would affect a question, as between the creditors of the donor, and the husband of the daughter? Would the subsequent or contemporaneous marriage of the daughter render valid a gift, which, independent of that marriage, would be void as to the antecedent creditors of the donor? It seems, that if the gift could be considered, in any fair construction, as the inducement to the marriage, the marriage would give validity to a gift, which, otherwise, would be void as to the creditors. Ibid.

36. It seems, that where a father executes a voluntary bond to his son-in-law, the obligee