FRAUD-continued.

set aside the judgment of a Court of Common Law; but it may decree the successful party who is successful through a fraud to reconvey or hold in trust for the party thereby defrauded any property or profit he may have acquired as the fruits of or under the judgment. Barnesby v. Powell, 1 Ves. 120, 285; Allen v. Macpherson, 1 Ph. 145; 1 H. L. C. 213.

In pleadings in Equity the fraud must be specifically alleged in the bill; and evidence is admissible to prove the case therein stated, and that case only. In case the fraud should not be proved, but a case for some relief be made, the bill may pray for such alternative relief. One bill may be brought against a single principal in respect of two totally distinct frauds committed by his two agents. Walsham v. Stainton, 1 De G. J. & S. 678.

In the case of the defence of purchase for value without notice of the fraud, that defence must be pleaded specially; but it is sufficient to deny the notice generally, unless particular facts are alleged as evidence of the notice, in which latter case, in addition to the plea, an answer denying the facts as specially and particularly as they are charged in the bill must accompany the plea (Pennington v. Beechey, 2 Sim & Stu. 282). And in every case of an answer being put in alone, the answer must be full, and it must also expressly set up the defence of purchase for value without notice, if that is a defence intended to be relied on.

Sometimes Law has jurisdiction in cases of fraud where Equity has none. Thus, (1.) Equity will not rescind a contract, where the parties to it cannot be restored to their respective original positions; and Law is, in that case, the only forum for redress (Great Luxembourg Ry. Co. v. Magnay, 25 Beav. 587). And again, (2.), where the party to the contract is neither the person who committed the fraud nor a privy of such person, the party defrauded can have no rescission of the contract in Equity; and unless therefore the misrepre sentation may be made good, he must seek redress at Law against the person guilty of the fraud; whence, for the fraudulent representations of the directors of a company, not being representations authorized by the company, the redress is at Law (Brockwell's Case, 4 Drew. 205). Again, (3), where a person has given a general representation of the character or credit of another, which is fraudulent, the person injured thereby, from his reliance thereon, can have no redress in Equity, but must proceed at Law in an action for damages. Whitmore v. Mackeson, 16 Beav. 128.

On the other hand, Equity has some

FRAUD-continued.

times jurisdiction where Law has none. For, in general, Courts of Equity act upon much slighter evidence of fraud than Courts of Law do, inferring it, whereas at Law it must be proved, e.g., from the condition of the injured parties in the cases of fraud enumerated above. And in the great majority of cases, although there is a remedy at Law, yet the remedy in Equity is concurrent, and it is therefore optional for the plaintiff to sue in either jurisdiction, according as he finds the remedy either more convenient or more adequate; thus in Colt v. Woollaston (2 P. Wms., 154), a bill for the mere recovery of moneys was held not demurrable, and that case has been often followed since; and in Barry v. Crosskey (2 J. & H. 30), a bill in Equity was more convenient, as avoiding a multiplicity of actions.

FRAUD, LEGAL, APART FROM MORAL FRAUD. The question has been raised whether legal fraud, unaccompaned by moral fraud, is actionable. This question only amounts to this, whether a false representation made without knowledge that it is false, and without any dishonest intention, should make the person (who has made it) liable in damages. The question is rendered more complex where the fraud occurs under the following circumstances: A. employs B. as his agent to sell a house. C. goes to the agent, intending to buy the house, and asks B. whether there is anything objectionable about the house or the neighbourhood. B. answers-no, and honestly believes there is nothing objectionable, but A., his principal, knows that the next house has a bad reputation. C. thereupon sues A. for the false representation of B., his agent:-Held, that A. was not liable, as he did not give B. any instructions to make the misrepresentation. Cornfoot v. Fowke, 6 M. & W. 358.

FRAUDS, STATUTE OF. This is the famous stat. 29 Car. 2, c. 3, which applies as well to Real Property as to Equity and to Common Law.

I. As applying to Real Property. It enacts that all leases, &c., of lands made without writing signed by the parties or their agents lawfully authorized in writing, shall have the force of leases, &c., at will only (s. 1); except, nevertheless, leases not exceeding three years from the making thereof which reserve two-third parts at the least of the full improved value of the lands demised (s. 2); and that no lease, &c., of lands (not being copyholds) shall be assigned, &c., or surrendered, unless it be by writing, signed by the party assigning,

FRAUDS, STATUTE OF—continued. &c. or surrendering, or his agent lawfully authorized in writing, except, nevertheless assignments, &c., and surrenders by act and operation of law (s. 3).

II. As applying to Equity. It enacts that all declarations or creations of trusts of lands shall be in writing signed by the party declaring or creating the same (s. 7); except, nevertheless, trusts arising or resulting by the implication or construction of law, or transferred or distinguished by act or operation of law (s. 8); that all grants and assignments of trusts shall be in writing signed by the party granting or assigning the same (s. 9); and that the sheriff may take upon an execution for the debts of the cestui que trust all lands of which any one is seised or possessed in trust for him at the time of execution sued in like manner as the sheriff might or could have done if the cestui que trust had been himself seised thereof at that time; also, that such lands being fee simple lands descending to the heir of the cestui que trust shall be deemed assets by descent for payment of such debts, in like manner as they would have been if the estate had been legal (s. 10).

III. As applying to Common Law. It enacts that no action shall be brought,

(1.) Whereby to charge any executor or administrator upon any special promise to answer damages out of his own estate; or

(2.) Whereby to charge the defendant upon any special promise to answer for the debt, default, or miscarriage of another person; or

(3.) Whereby to charge any person upon any agreement made upon consideration of marriage; or

(4.) Whereby to charge any person upon any contract or sale of lands or any interest in or concerning them; or

(5.) Whereby to charge any person upon any agreement that is not to be performed within the space of one year from the making thereof,

Unless the agreement or some memorandum or note thereof is in writing and signed by the party to be charged therewith, or his agent lawfully authorized (s. 4);

And it further enacts, that no contract for the sale of any goods for the price of £10 or upwards shall be allowed to be good; unless

(1.) The buyer shall accept part of the goods so sold and actually receive the

same; or

(2.) Give something in earnest to bind the bargain, or in part payment; or

(3.) Some note or memorandum in writing of the said bargain be made and signed by the parties to be charged by such con

FRAUDS, STATUTE OF-continued. tract or their agents lawfully authorized (s. 17);

And it further enacts that [judgments against lands shall bind the lands as against purchasers only from the day of signing judgment; and that] judgments against goods shall bind the property of the goods only from the day that the writ of execution thereon is delivered to the sheriff to be executed (ss. 14, 15).

FRAUDULENT GIFTS. Gifts, whether of lands or of personal estate, which are fraudulent, are so either (a.) By the Common Law; or (b.) By the Statute Law; and where they are fraudulent by Statute Law, they are so, either (aa.) Under the Statutes of Elizabeth against Fraud (13 Eliz. c. 5, and 27 Eliz. c. 4); or (bb.) Under the Bills of Sale Act. 1854, and the amending Acts; or (cc.) Under the Bankruptcy Act, 1869.

(A.) By the Common Law;-The criterion of fraud at the Common Law is not single but complex, its chief element being, however, the debtor's continuance in possession of the goods after the gift thereof. Edwards v. Harben, 2 T. R. 587.

(B.) Under the Statutes of Elizabeth :By the Act 13 Eliz., c. 5, all gifts inter vivos, whether of lands or of goods, contrived of fraud to the end of delaying creditors and others of their lawful actions, suits, debts, or dues, are declared to be void, but only as against the creditor who is delayed thereby, his heirs, executors, administrators, and assigns; and by the Act 27 Eliz. c. 4, all gifts inter vivos of lands made of purpose to defraud or deceive subsequent purchasers thereof (s. 1), and all such gifts made revocable at the will of the maker thereof (s. 4), are declared to be void, but only as against the subsequent purchaser thereof, his heirs, executors, administrators, and assigns, and other persons lawfully claiming under him or them. And by s. 2, of the former Act and s. 2 of the latter Act, a penalty is inflicted upon the parties and privies to the fraud. Poulton v. Wiseman, Noy, 105.

In the construction of the two statutes it has been held that in raising a case of fraud to upset the gift, the fraud against creditors under the 13 Eliz. c. 5, must be proved to have existed and been complete at the date of the gift (Stone v. Grubham, 2 Bulst. 225), but that the fraud against purchasers under the 27 Eliz. c. 4, is only complete as from the date of the subsequent sale, from the mere fact of which having been afterwards made the fraud is conclusively inferred. Townshend v. Windham, 2 Ves. Sen. 1.

FRAUDULENT GIFTS-continued. And in consequence of this distinction the following points have been established: I. Under the 13 Eliz. c. 5:

(1.) There must at the date of the gift have been creditors in existence, or, in other words, the maker of the gift must at that time have been indebted, which means embarrassed (Townsend v. Westacott, 2 Beav. 340). If, therefore, the maker was not indebted at the date of the gift the gift is good (Houghton v. Tate, 3 Y. & J. 486); as it also is, even where he is indebted at that date, provided he be not also then embarrassed, but have ample (Skarf v. Soulby, 1 Mac. &. G. 364), or even less than ample (Holmes v. Penny, 3 K. & J. 90), means of then clearing off his indebtedness; but the maker's ignorance of his embarrassment will not make the gift a valid one (Christy v. Courtenay, 13 Beav. 96), the objective fraud and not the subjective innocence being the criterion looked at (Spirett v. Willows, 34 L. J. (Ch.) 365), in this country at the least, although the subjective innocence is regarded in America (Hinde's Lessee v. Longworth, 11 Wheaton, 199). Any contrivance to get rid of the creditors existing at the date of the gift, otherwise than by a bona fide payment of their debts, e.g., a contrivance to substitute fresh creditors in their places, paying the former with the moneys of the latter, will not succeed (Richardson v. Smallwood, Jac. 552); but the substituted creditors will be allowed to stand in the places of the former creditors for the purpose of defeating the gift (Freeman v. Pope, L. R. 9 Eq. 206); for generally when there is a fraudulent intent the proof of indebtedness at the date of the gift is not material (Graham v. Furber, 14 C. B. 410), and the word others in the statute following the word creditors, has been considered as referring to subsequent creditors as distinguished from creditors already in existence. Taylor v. Jones, 2 Atk. 600; and see also Barling v. Bishop, 29 Beav. 417.

(2.) The subjective innocence of the person to whom or in whose favour the fraudulent gift is made will not render it good (Partridge v. Sopp, 2 Amb. 596), but will save him from being placed in a worse position (Tarleton v. Liddell, 17 Q. B. 390) in consequence of the fraud: and if he or any person for him should have given value, the gift will be valid (Copes v. Middleton, 2 Madd. 410; Holmes v. Penny, 3 K. & J. 90), as it will also be in favour of a purchaser under him. Doe v. Martyn, 1 B. & P. 332.

(3.) The creditors intended by the statute are general creditors (George v. Milbanke, 9 Ves. 190), not mortgage creditors (Stephens v. Olive, 2 Bro. C. C. 90), unless

FRAUDULENT GIFTS-continued.

as to the unpaid surplus after realising their securities (Harman v. Richards, 10 Hare, 81), or unless, semble, as to the whole amount of the debt when they abandon their securities (Lister v. Turner, 5 Hare, 281). A voluntary creditor may sue (Markwell v. Markwell, 34 Beav. 12), provided he have a legal debt vested in him. Sewell v. Moxey, 2 Sim. (N. S.) 189, and Judicature Act, 1873.

II. Under the 27 Eliz. c. 4:

(1.) The statute extending only to lands, a fraudulent settlement of goods is not void under it (Jones v. Croucher, 1 S. & S. 315). All voluntary conveyances of lands are fraudulent under it, not as being voluntary merely, but as being conclusively fraudulent (Doe v. Routledge, 2 Cowp. 705; Perry Herrick v. Attwood, 2 De G. & J. 21). If the subsequent purchase is merely a contrivance to get rid of the voluntary deed, that makes no difference under the statute, as neither does mala fides in the subsequent purchasers (Doe v. Manning, 9 East, 59), at least in this country, although the rule is otherwise in America (2 N. York Rev. Stat. p. 134). A mortgagee is a purchaser within the meaning of the statute (Rand v. Cartwright, 1 Ch. Ca. 59), but a judgment-creditor is not (Beavan v. Oxford (Earl of), 6 De G. M. & G. 492). And it does not matter that the voluntary gift is to a charity being private (Hinton v. Toye, 1 Atk. 465), or, semble, being public. 43 Eliz. c. 4; Trye v. Corporation of Gloucester, 14 Beav. 173.

(2.) The purchase-money, as such, is not liable to be appropriated by the volunteers in specific recompense for the avoidance of the gift to them (Daking v. Whimper, 26 Beav. 568), but, as forming part of the general moneys belonging to the maker of the gift, it is liable to recompense them in certain ways (Hales v. Cox, 1 N. R. 344; Dolphin v. Aylward, L. R. 4 H. L. 486). Moreover, the voluntary deed is only void so far as the validity of the subsequent purchase or mortgage requires. Rand v. Cartwright, 1 Ch. Ca. 59.

(3.) The subsequent purchase which is to avoid the voluntary deed must be made from the vendor personally (Richards v. Lewis, 20 L. J. (C.P.) 177), not from his devisee (Doe v. Rusham, 17 Q. B. 724), nor from his heir-at-law. Lewis v. Rees, 3 K. & J. 132.

(C.) Under the Bills of Sale Act, 1854.By the Act 17 & 18 Vict. c. 36, every bill of sale of personal chattels made on or after the 10th of July, 1854, whereby, whether the same be absolute or conditional, the grantee or holder thereof shall have power, either with notice or without notice, and either as from, or at any future time after, the execution of the bill of sale,

FRAUDULENT GIFTS-continued.

to seize or take possession of any property comprised in such bill, is as against all assignees in bankruptcy, general assignees, and execution creditors void to all intents and purposes to the extent of such part of the property therein comprised as consists of personal chattels being in the possession or apparent possession of the maker of the bill of sale at or after the date of the bankruptcy, general assignment, or execution (as the case may be), and after twentyone days from such date, unless the following requisites have been complied with, namely,

(1.) The bill of sale (including the schedule thereto, if any), or a true copy thereof, is to be filed with the docquets and judg ments clerk in the Court of Queen's Bench within twenty-one days from the execution of the bill of sale;

(2.) An affidavit (a) of the time of making the bill of sale, (b) of the residence and occupation of the maker thereof, and (c) of the residence and occupation of the witnesses attesting the bill, is at the same time with filing the bill of sale (Grindell v. Brendon, 6 C. B. (N.S.) 698), and within twenty-one days from the execution thereof, to be filed in like manner as the bill of sale itself.

And by the interpretation clause a bill of sale means or includes assignments and all other assurances of personal chattels; also, licenses, or other authorities, to take possession of personal chattels, as security for a debt. Moreover, the phrase "personal chattels" means or includes goods, furniture, and fixtures, meaning tenants' fixtures.

By the Bills of Sale Act, 1866 (29 & 30 Vict. c. 96), amending the Bills of Sale Act, 1845, every such bill of sale as aforesaid must be re-registered every five years; such re-registration being made by the Master upon the applicant filing an affidavit in the Master's office in the form given in Schedule B of the Act of 1866.

Under these Acts a bill of sale which would be void in itself is not made valid by registration (Re Daniel, Ex parte Ashby, 25 L. T. 188). But assuming that the bill of sale is good in itself, then the assignee has twenty-one days during which he may neglect registration (Banbury v. White, 2 H. & C. 300); and if he takes possession during these twenty-one days he obtains a valid possession which dispenses with the necessity for registration altogether (Marples v. Hartley, 30 L. J. (Q.B.) 92). The twenty-one days are reckoned exclusively of the day of the execution of the bill of sale. Williams v. Burgess, 12 Ad. & E. 635.

If the first registration is informal and is invalid, the bill of sale may be taken off

FRAUDULENT GIFTS-continued. the file and then put on again, and a proper registration of it made, provided the first twenty-one days have not elapsed. In re Wright, 27 L. T. 192.

An unregistered bill of sale, being good in itself, is of course good against the maker of it; it is also good against a subsequent registered bill of sale (Maugham v. Sharpe, 17 C. B. (N.S.) 443). Where successive bills of sale are given within every successive period of twenty-one days, there, if a fraud is inferable, the attempt to evade the statute fails (Ex parte Foxley, Re Nurse, L. R. 3 Ch. 515); but if no fraud is inferable, the evasion succeeds. Ex parte Harris, Re Pulling, L. R. 8 Ch. 48.

Mere registration will not make a bill of sale valid in case of the subsequent bankruptcy of the maker, unless possession is taken before the act of bankruptcy on which the adjudication is founded (Badger v. Shaw, 29 L. J. (Q.B.) 73; Stansfield v. Cubitt, 27 L. J. (Ch.) 266); and conversely, the neglect of registration in such a case will make the bill invalid, although otherwise it would have been good. Ashton v. Blackshaw, L. R. 9 Eq. 510.

The Bills of Sale Act expressly exempts marriage settlements from its provisions; but this exemption extends only to antenuptial and not also to post-nuptial settlements. Ashton v. Blackshaw, supra.

In the case of a mortgage of land or a messuage with the fixtures, the Courts used to take this distinction

(a.) That if the fixtures pass with the land or messuage under the words of grant (in the case of freeholds, Mather v. Fraser, 2 K. & J. 536), or of demise or assignment (in the case of leaseholds, Boyd v. Shorrock, L. R. 5 Eq. 72), then the mortgage deed, being only secondarily and not primarily a bill of sale, requires no registration, even as to the fixtures being tenant's fixtures comprised therein;

But (b.) That if the fixtures did not pass with the land or messuage under the words of grant (in the case of freeholds) or of demise or assignment (in the case of leaseholds), then the mortgage deed, being primarily and not secondarily merely a bill of sale as to the fixtures being tenant's fixtures comprised therein, required registration as to such fixtures. Begbie v. Fenwick, 19 W. R. 402; Hawtrey v. Butlin, 21 W. R. 633; L. R. 8 Q. B. 290.

But this distinction has unfortunately been exploded. Ex parte Daglish, In re Wilde, 21 W. R. 893.*

(D.) Under the Bankruptcy Act, 1869.

FRAUDULENT GIFTS-continued. By s. 6 of this Act, a fraudulent conveyance, gift, delivery, or transfer by a debtor of his property, or of any part thereof, is made an act of bankruptcy, upon which he may be adjudicated a bankrupt within six months thereafter. By s. 15 of the Act, all goods and chattels being at the date of such act of bankruptcy in the possession, order, or disposition of the bankrupt, being a trader, by the consent and permission of the true owner, of which goods and chattels the bankrupt is reputed owner, or has acted as owner thereof, vest in the trustee in bankruptcy upon the adjudication in bankruptcy. By s. 87 of the Act, the proceeds of the goods of a trader which have been taken in execution in respect of a judgment for a sum exceeding £50 and sold, are to be retained in the hands of the selling sheriff or bailiff for a period of fourteen days, and upon notice within these days of a bankruptcy petition having been presented against such trader, are to vest (less the sheriff's or bailiff's expenses) in the trustee in the bankruptcy. By s. 91 of the Act, ante-nuptial settlements remain as under the Common Law, and post-nuptial settlements of property coming to the wife, or to her husband (being a trader) in her right during the coverture, are expressly exempted from the operation of the Act, but all other post-nuptial settlements, being voluntary, made by traders on their wives and families are prima facie fraudulent in the case of a subsequent bankruptcy, subject to this distinction, viz.

(1.) If the settlement is made within two years of the bankruptcy, it is ipso facto fraudulent and invalid;

(2.) If the settlement is made within ten years, but outside of two years, of the bankruptcy, it is prima facie fraudulent and is invalid, until proof of the absence of fraud is adduced; and apparently

(3.) If the settlement is made outside of ten years of the bankruptcy, it is left to the Common Law, and the primâ facie presumption of fraud is excluded.

Also, by s. 92 of the Act, any conveyance or charge made within three months of his bankruptcy by a debtor unable to pay his debts with the intent to favour a particular creditor, is fraudulent and void.

But subject to the aforesaid provisions, the 95th section of the Act enacts, that the following transactions being in good faith and for value shall be valid notwithstanding any prior act of bankruptcy, viz.

(1.) Any contract regarding, or conveyance of, property made by the bankrupt in good faith and for value before the date of the order of adjudication, with or to a person not having notice of any act of bankruptcy; (2.) Any execution executed in good

FRAUDULENT GIFTS-continued. faith against the debtor's land by seizure, or against the debtor's goods by seizure and sale before the date of the order of adjudication on behalf of a creditor not having notice (in the case of lands) before the seizure and (in the case of goods) before the seizure and sale of any prior act of bankruptcy. Ex parte Villars, In re Rogers, L. R. 9 Ch. App. 432.

FREEBENCH.

A name by which the dower of widows is known in the case of copyhold lands. It is subject to many varying customs, but extends usually to one-third of the lands of which her husband at his death was possessed.

FREEHOLD. A freehold is the holding of a freeman; and as no freeman could originally receive more, or would originally accept less, than an estate for his own life, therefore the original freehold was a life estate. And although, at the present day, as indeed from a very early period, freehold estates of larger quantity than for life are numerous enough, yet the original quality of the freehold is still expressed in the customary definition of that term which is, as commonly expressed, the following:-An estate of freehold is any estate of uncertain duration which may possibly last for the life of the tenant at the least. Whence an estate granted to a widow during her widowhood is an estate of freehold.

FREIGHT. This is the reward which is payable for the carriage of goods by sea, whether in a chartered or in a general ship; the usual time for payment being upon completion of the voyage, although (in charterparties more especially) the payment may be otherwise agreed; e.g., it may be specially agreed that freight shall be paid in advance; and when this is so, the amount paid cannot be recovered back, even if the voyage fails, unless there is a distinct agreement to that effect.

Where the freight has not been paid in advance, but, the goods having been duly laden on board, the ship has broken ground, i.e., has fairly started on the voyage, then, although the voyage should afterwards fail, the freight is nevertheless due by Maritime Law; but, in such a case, the shipowner acquires by English Law only a right of action against the freighter, i.e., shipper, for the damage consequential on his breach of contract, and not for freight properly so called (Curling v. Young, 1 B. & P. 636). In some cases, however, of a failure of the voyage, freight may be recoverable pro ratâ itineris (Kay's Law of Shipmasters, pp. 309-313). The Court of Admiralty possesses an equitable jurisdiction over questions of freight.