FRAUDULENT CONVEYANCE. A con veyance, the object, tendency, or effect of which is to defraud another, or the intent of which is to avoid some duty or debt due by or incumbent on the party making it. 2 Kent 440; 4 id. 462; and if fraudulent as to any provision therein, is void in toto as against creditors ; Webb v. Ingham, 29 W. Va. 389, 1 S. E. 816.
Fraudulent conveyances received early at tention; and the statutes of 13 Eliz. c. 5, and 27 Eliz. c. 4, made perpetual by 29 Eliz. c. 18, declared all conveyances made with intent to defraud creditors, etc., to be void. By a construction, It has become the set tled English law that a voluntary conveyance shall be deemed fraudulent against a subse quent purchaser even with notice; 9 East 59 ; 2 Bla. Com. 296; Roberts, Fraud. Cony. 2, 3 ; 17 Ad. & El. N. R. 723.
Voluntary conveyances are not so con strued in the United States, however, where the subsequent purchaser has, notice, especial ly if there be a good consideration ; Wait, Fraud. Convey. 97 ; Beal v. Warren, 2 Gray (Mass.) 447.
These statutes have been generally adopted as the foundation of all the state statutes up on this subject ; 4 Kent 462.
The mere fact of indebtedness alone will not render a voluntary conveyance void, if the grantor has property amply sufficient re maining to pay his creditor ; Terry v. O'Neal, 71 Tex. 592, 9 S. W. 673; Joiner v. Van Al styne, 22 Neb. 172, 34 N. W. 366.
A voluntary settlement, all debts being paid and the settlor retaining a reasonable income, is not fraudulent as against subse quent creditors of the settlor ; [1900] 2 Q. B. 508.
In the case of ante-nuptial settlements, the consideration of marriage supports only such limitations as can be justly inferred to have been purchased on behalf of the party claim ing such limitation, so that such party was not taking as a volunteer ; 1 Atk. 265 ; 6 H. & N. 849 ; 5 Ch. Div. 619; [1891] A. C. 264. The voluntary settlement by a husband upon his wife, when this can be done without im pairing existing claims of creditors, and with out intent to defraud, is valid as against subsequent creditors ; Jones v. Clifton, 101 U. S. 225, 25 L. Ed. 908 ; Schreyer v. Scott, 134 U. S. 405, 10 Sup. Ct. 579, 33 L. Ed. 955. The conveyance must be founded on good consideration and made with a bona fide in tent ; if defective in either of these particu lars, although good as between the parties, it is void as to creditors; Smith v. Muirheid,
34 N. J. Eq. 4; Glenn v. Randall, 2 Md. Ch. 220.
The statute of 27 Eliz., unlike the statute of 13 Eliz., is limited to conveyances of real property ; Brice v. Conover, 54 N, J. Eq. 531, 35 Atl. 402 ; Garrison v. Brice, 48 N. C. 85 ; Bohn v. Headley, 17 Harr. & J. (Md.) 257 ; contra, on the ground that the statute is only declaratory of the common law and the com mon law applies to personal property, for which reason it may be interpreted as defin ing the nature and effect of fraudulent con veyances generally ; Gibson v. Love, 4 Fla. 217; Harper v. Scott, 12 Ga. 125 ; Avery v. Wilson, 47 S. C. 78, 25 S. E. 286.
A voluntary gift for charitable purposes is not to be treated as "covinous," within the meaning of 27 Eliz. c. 4, and is not avoided by a subsequent conveyance for value ; [1892] App. Cas. 412.
When a mortgage is given to one person for the purpose of securing debts due to him self and others, with intent on the part of the mortgagor to defraud other creditors, it is valid as to an innocent beneficiary whose debt is an honest one, although the mortgagee himself is a party to the fraud ; Morris v. Lindauer, 54 Fed. 23, 4 C. C. A. 162, 6 U. S. App. 510.
Voluntary conveyances by a debtor who is financially embarrassed are prima facie fraudulent as to existing creditors, and where a conveyance is made ma/a fide, and the fraud is participated in by both parties thereto, it cannot be upheld in derogation of the claims of creditors, existing or sub sequent ; Walsh v. Byrnes, 39 Minn. 527, 40 N. W. 831; Driggs & Co.'s Bank v. Norwood, 50 Ark. 42, 6 S. W. 323, 7 Am. St. Rep. 78; Neal v. Foster, 36 Fed. 29. But although such con veyance is void as regards purchasers and creditors, it is valid as between the parties Reichert v. Castator, 5 Binn. (Pa.) 109, 6 Am. Dec. 402 ; Sherk v. Endress, 3 W. & S. (Pa.) 255; Worth v. Northam, 26 N. C. 102 ; Clapp v. Tirrell, 20 Pick. (Mass.) 247; Burgett's Lessee v. Burgett, 1 Ohio 469, 13 Am. Dec. 634; Hendricks v. Mount, 5 N. J. L. 738, 8 Am. Dec. 623; Osborne v. Moss, 7 Johns. (N. Y.) 161, 5 Am. Dec. 252; 1 W. Bla. 262; Ro mans v. Maddux, 77 Ia. 203, 41 N. W. 763. Au offence within 13 Eliz. c. 5, § 3, is also indictable ; 6 Cox, Cr. Cas. 31.
This subject is fully treated in a note to Twyne's case, 1 Sm. Lead. Cas. (continued in 18 Am. L. Reg. N. S. 137), and in Bump ; May, Fraud. Cony. See BADGES OF FRAUD.