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 And Presented February 14. >893 
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FRAUDULENT MORTGAGES 
 
 OF 
 
 MERCHANDISE. 
 
 A COMMENTARY ON THE AMERICAN PHASES 
 
 TWYNE'S CASE. 
 
 JAMES O. PIEECE. 
 
 Crescit in Orbe Dolus. 
 
 ST. LOUIS: 
 F. H. THOMAS & CO. 
 
 1884 
 
Entered according to Act of Congress, in the year 1883, by 
 
 JAMES O. PIERCE, 
 
 In tlie Office of the Librarian of Congress at Washington. 
 
 PRESS OF NIXON-JONIS PRINTING CO., 313 PIKK ST., ST. LOUIS. 
 
PREFACE 
 
 This commentary is an outgrowth of the controversy 
 which has distinguished the investigation, in the American 
 courts, of the questions of the legal characteristics of mort- 
 gages on stocks of goods jn trade, with power of sale re- 
 served to the mortgager, and of the legal status and relations 
 of the parties to such transactions. It will doubtless be 
 generally understood that no treatment of these questions 
 could be of much value, which should attempt to present 
 the law upon the subject without entering into the con- 
 troversy. For this reason, no apology is deemed necessary 
 for the controversial character of much of this commen- 
 tary. 
 
 While entertaining decided views on the subject treated, 
 the author has endeavored to present fairly those views of 
 it with which he is not in accord, and to subject them to 
 such criticism only as should tend to test their relation to 
 the acknowledged fundamentals of our American jurispru- 
 dence. The difficulties which have caused the particular 
 controversy are believed to lie deeper than its immediate 
 subject. They have probably grown out of certain defec- 
 tive and erroneous views concerning the question of fraud 
 as a question of jurisprudence, and more j)articularly fraud 
 in conveyances considered in respect to the rights of those 
 
 (ill) 
 
IV PREFACE. 
 
 not parties to such conveyances; views which characterized 
 judicial decisions on the subject before mortgages on stocks 
 of goods in trade because of frequent use. In the absence 
 of well defined and clearly understood rules on the general 
 subject of fraud in conveyances, it is not strange that there 
 should be want qf accord in regard to the class of convey- 
 ances here treated. 
 
 Was the statute of 13th Elizabeth, which made void as to 
 third parties conveyances into which a fraudulent intent 
 entered, creative of a new rule of law, or only declarator}' 
 of an old one? If declaratory did it announce exhaustively 
 all the principles of the common law on the subject? Or 
 were there other features sometimes found in conveyances, 
 besides an intent to defraud, which ought to or might make 
 them fraudulent as to third parties? Is the term fraudu- 
 lent to be applied alone to the intent of the parties, or is it 
 properly applicable to the transaction itself into Which 
 the parties have entered? Does the law look with 
 more favor upon deceit which is not intended by those 
 who fail to stop and calculate the consequences of 
 their acts, than upon deceit which is anticipated and 
 intended? Must jurisprudence place all such cases upon 
 a Procrustean bed of "intent," and follow the fiction of 
 imputing an intent where none exists? What is the char- 
 acter of the fraud which is adjudicated by the court in any 
 such case, and is the degree of the fraud affected, limited 
 or enlarged by the intent of the parties ? In any such case, 
 can the rule of jurisprudence be in any way affected, either 
 in its scope or effect, or the manner of its application to 'the 
 facts of the case, by the mode in which those facts are 
 ascertained ? May we use the terms ' ' actual fraud, ' ' ' ' c-on- 
 
PREFACE. V 
 
 structive fraud," and "presumptive fraud," in discussing 
 these questions ; and if we do, should we apply these ad- 
 jectives to the subject of fraud with any other than their 
 usual and strict signification? How should we use the term 
 " fraud in law," if used at all ; and what do we mean by 
 "fraud in fact"? 
 
 These are some of the questions which must be consid- 
 ered, and to which the legal sense of the profession must, 
 by general accord, furnish clear and satisfactory answers, 
 before the law upon the subject of fraud in conveyances 
 can be said to be well settled. In the meantime, much dis- 
 cussion is inevitable, and doubtless treatises will be written 
 and re-written on the general subject of fraud as a legal 
 question, distinguished from fraud as a question of morals. 
 This commentary is offered as a tentative contribution to 
 the discussion. 
 
 Memphis, January 1 1884. 
 
CONTENTS. 
 
 Sections 
 CHAPTER I. 
 
 The Controversy 1-5 
 
 CHAPTER II. 
 The Doctrine of the English Cases 6-32 
 
 CHAPTER III. 
 The Doctrine of the American Majority . . . 33-76 
 
 CHAPTER rV. 
 The Majority Doctrine Favored .... 77-87 
 
 CHAPTER V. 
 The Views of the American Minority 88-100 
 
 CHAPTER VI. 
 The Minority Views Favored . . .... 101-106 
 
 CHAPTER VII. 
 The Question not Vital in some Jurisdictions . . . 107-113 
 
 CHAPTER VIII. 
 Criticisms upon the Doctrine Examined .... 114-132 
 
 CHAPTER IX. 
 Supposed Qualifications of the Doctrine .... 133-163 
 
 CHAPTER X. 
 Other Forms op Fraudulent Reservation .... 154-162 
 
FRAUDULENT MORTGAGES 
 
 MERCHANDISE. 
 
 CHAPTBE I. 
 
 THE CONTROVEESY. 
 
 Section 1. The controverted questions. 
 
 2. The doctrine of Robinson v. Elliott. 
 
 3. Distinction between actual fraud and constructive fraud. 
 i. The dissenting doctrine of Brett v. Carter. 
 
 6. Twyne's case the origin of the American doctrine. 
 
 § 1. The controverted questions. — Two questions in 
 jurisprudence, arising in a class of cases of frequent occur- 
 rence, have been extensively agitated in the United States 
 during the present century, the discussion of which has de- 
 veloped much radical difference of opinion. They are 
 questions of fundamental or substantive law, whose settle- 
 ment upon a basis satisfactory to all candid and inquiring 
 minds is a matter of importance. If jurisprudence be to 
 any extent a science, it is eminently desirable that such sub- 
 stantive rules as it has should be accurately ascertained and 
 correctly formulated. It is the recognition of this truth 
 which has led to and stimulated the discussion referred to. 
 These questions may be stated as follows : — 
 1. Is a mortgage of a stock of goods in trade, under 
 which the mortgager is permitted by the mortgagee to sell 
 
 1 1 
 
§ 2 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 the goods at his discretion in the usual course of his busi- 
 ness, inherently and essentially fraudulent as to creditors of 
 the mortgager? 
 
 2. If it be, is it still so in case the agreement or under- 
 standing between mortgagee and mortgager, permitting 
 such sales, is not shown upon the face of the mortgage, but 
 is proven by evidence aliunde? 
 
 Growing out of these fundamental questions are other 
 incidental or subsidiary ones, which are merely questions of 
 procedure, but which have been often but improperly treated 
 as questions of substantive law, and the discussion of which 
 as such has sometimes led to a confused understanding of 
 the extent of the rules of substantive law on the subject. 
 Without at present stating these incidental questions, they 
 may be classed as : First., those concerning the manner in 
 which the facts shall be ascertained in controverted cases; 
 and second, those concerning the sources, form, and quality 
 of evidence admitted. It may be assumed that both these 
 classes of questions relate merely to procedure, and that 
 they should not be confounded with fundamental questions. 
 The two inquiries above formulated will probably be ac- 
 cepted as a fair presentation of all the questions of funda- 
 mental law, or jurisprudence, which are involved in the 
 controversy. The following pages have been written 
 in the belief that a candid and impartial investigation finds 
 both these questions answered in the affirmative by the 
 great weight of American authority, considering the deci- 
 sions not only as precedents, but as enunciations of prin- 
 ciple. 
 
 § 2. The doctrine of Robinson v. Elliott. — In the case 
 of Eobinson v. Elliott,^ the Supreme Court of the United 
 States was confronted with the duty of determining deci- 
 sively for the first time, the first of these questions, upon 
 
 1 22 Wall. 513 (1874). 
 
THE CONTEOVEKSY. § 2 
 
 distinctively common-law principles.^ The question hav- 
 ing been already much controverted in America, would, it 
 had been expected, be sooner or later presented to the Su- 
 preme Court for its consideration. Its answer in the affirm- 
 ative commits that court to a doctrine which originated in 
 England, but which, though exotic, has been so effectually 
 transplanted, and has developed so extensive a growth in 
 the soil of American jurisprudence, by reason of its adapta- 
 tion to the peculiar exigencies of our commercial interests, 
 that it may now be well characterized as American. Its 
 tardy growth in England, a misunderstanding of its original 
 scope and application, and a confusion of views as to the 
 office and effect of certain early English statutes, had 
 conspired to create many doubts in the minds of jurists, 
 both as to the soundness of the English doctrine and the 
 propriety of its cis-Atlantic application. The settlement of 
 these doubts, it had been supposed, would be materially 
 promoted by the enunciation of a rule on the subject by our 
 highest tribunal. This result has been attained only in 
 part, although, the court threw the weight of its unanimous 
 decision upon one side of the question. The controversy 
 continues to such an extent as to suggest, and perhaps to 
 justify, an attempt to explain and illustrate the question 
 more fully than has yet been done, by examining closely 
 the doctrine in question, inspecting its origin, tracing its 
 growth, and testing its soundness. 
 
 It was decided in Eobinson v. Elliott that a chattel mort- 
 gage upon a stock of goods in trade, which permits the 
 mortgager to remain in possession of the property, and in 
 its disposition by sale in due course of trade at his discre- 
 tion, until the maturity of the debt purporting to be se- 
 cured by it, is fraudvilent as to other creditors, and is 
 absolutely void as to them, without reference to the bona 
 
 1 The question had been presented, but not adequately considered, in the 
 earlier case of Banks. Hunt, 11 Wall. 891 (1870). 
 
 3 
 
§ 3 FRAUDULENT MORTGAGES OF MEKCHANDISE. 
 
 one of constructive fraud, his logic will lead him astray. 
 It will appear on careful examination that such a premise is 
 unwarranted. The question is not one of constructive 
 fraud. There is nothing in such a case as Robinson v. 
 Elliott which necessarily raises a suspicion of fraudulent 
 intent, such as the suspected party should disprove or such 
 as a jury must consider. There is no occasion for resort to 
 presumption or construction, • On the facts of such a case ^ 
 as stated in the preceding section, there is an immediate and 
 conclusive judgment of fraud. The fraudulent tendencies 
 and features of the transaction form the basis of fact on 
 which the judgment of the court rests ; just as in cases 
 turning on intent, the verdict or finding that such an intent 
 exists, forms the basis of fact for the judgment or conclu- 
 sion of the court. The facts being made apparent, the 
 judgment of the law thereon is inevitable. The truth is, 
 that ' ' constructive f i-aud ' ' is simply a convenient rule of 
 practice, by which courts and juries are assisted in settling 
 the facts in doubtful cases. In such cases, the law in effect 
 says to the suspected party, " The circumstances are against 
 you, and raise a presumption of fraud, which will cause a 
 decision adverse to you unless you successfully rebut that 
 presumption." No one doubts this to be a salutary rule in 
 cases to which it applies. But it should be definitely and 
 accurately understood, and should not be confounded with 
 the rule in Robinson v. Elliott. "Constructive fraud" 
 and "fraud in law" are not synonymous or convertible 
 terms. "Actual fraud " and " fraud in fact " are not sy- 
 nonymous or convertible terms. "Actualfraud" and " con- 
 structive fraud" are antithetical terms, when properly 
 applied. But the expressions " fraud in law " and " fraud 
 in fact" are ambiguous, and when used antithetically, 
 are misleading; and they might well be disused; for 
 in every case of fraud, as well as in all other litigated 
 cases, the elements of both law and fact are necessarily in- 
 volved. 
 6 
 
THE CONTBOVEKSY. § 4 
 
 These preliminary observations may serve to illustrate 
 the controverted questions to be now considered, and may 
 assist in explaining, in part at least, the occasion for the 
 controversy. 
 
 § 4. The dissenting- doctrine of Brett v. Carter. — In 
 
 the present aspect of the controversy, Brett v. Carter ^ may 
 be considered the leading case in opposition to the doctrine 
 of Robinson v. Elliott. In this case, Lowell, J., of the 
 United States District Court for Massachusetts, ventured 
 " to doubt both the generality and justice " of the doctrine 
 announced in Eobinson v. Elliott, and dissented from it as 
 a new doctrine of only local application. His opinion states 
 so forcibly the leading objections offered to this rule of law, 
 and is so boldly critical as to the decision of his superior 
 tribunal, as to make it perhaps the best exponent of the 
 views which it supports, and the best test which can be ap- 
 plied to the soundness of the doctrine in question. 
 
 Brett V. Carter was a bill in equity by an assignee in 
 bankruptcy of the mortgager, against the mortgagee of a 
 stock of stationery. The debt was for the purchase-money 
 of the stock of goods, sold by the mortgagee on a credit, 
 the notes maturing at different times during four years. 
 The mortgager was permitted by his creditor to sell the 
 goods in the ordinary course of his trade. It did not ap- 
 pear, however, that any provision to this effect was incor- 
 porated into the writings. This feature of the case must 
 be observed, in view of the distinction which some jurists 
 have taken, that in all cases where the provision allowing the 
 debtor to sell the goods does not appear on the face of the 
 instrument, but is shown by evidence aliunde, the court 
 will not find fraud in law, but will leave it to the jury to 
 find fraud in fact. The opinion of the court was, in part, 
 as follows. 
 
 " The Court of Appeals of New York decided, by a bench 
 
 • 2 Low. 458; 3 C. L. J. 286 (1875). 
 
§ 4 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 which was equally divided in opinion, that a mortgage of 
 chattels which permits the mortgager to continue in pos- 
 session and to sell the goods in the ordinary course of busi- 
 ness, is void on its face as mere matter of law.^ This 
 decision has had a remarkable following, and its doctrine 
 appears to have become the settled law of New York, Ohio, 
 and Illinois, It is not the law of England, Maine, Massa- 
 chusetts, Michigan, or Iowa; in several States it has not 
 been passed upon. But as this new doctrine, or rather, 
 revival of an old one, has been said by Mr. Justice Davis, 
 of the Supreme Court, to be so general and just that it may 
 be presumed to be the law of Indiana, in the absence of 
 express and unambiguous decisions of the courts of that 
 State to the contrary, and as I venture to doubt both the 
 generality and the justice of the doctrine, it becomes me, 
 with all the respect I feel for that opinion, to state my rea- 
 sons for not acceding to it. If the rule, whichever way it 
 may be, were a settled rule of property in Massachusetts, 
 inquiry into its history or justice would be unnecessary ; but 
 although I have no doubt my decision will accord with the 
 law of Massachusetts, I have not found a case in this State 
 in which the decisions in New York were reviewed, and it is 
 possibly still a question for discussion. I had supposed it 
 to be well settled, after much debate and conflict of opinion, 
 certainly, but substantially settled, that when a vendor or 
 mortgager was permitted to retain the possession and con- 
 trol of his goods, and act as apparent owner, the question 
 whether this was a fraud or not was one of fact for the jury, 
 excepting under a peculiar clause of the bankrupt law of 
 England. It is so pronounced by Mr. May in his valuable 
 treatise on Voluntary and Fraudulent Conveyances, page 
 126,^ and by the cases he cites ; and by the learned edi- 
 
 1 Griswold v. Sheldon, 4 N. Y. 581. 
 
 2 Query, p. 106. 
 
 8 
 
THE CONTKOVEKSY. § 4 
 
 tors, both English and American, of Smith's Leading Cases.^ 
 By the law of England, as I understand it, there are no 
 constructive or artificial frauds, or, if the term is preferred, 
 frauds in law, remaining, excepting, 1st, such as are ex- 
 pressly made so by statute; as, for instance, when a bank- 
 rupt retains the order and disposition of goods as apparent 
 owner, with the consent of the true owner. We have not 
 adopted this part of the bankrupt law, as was sbmewhat 
 emphatically said in a late case in the Supreme Court, Saw- 
 yer V. Turpin.^ Or, 2d, where the act is necessarily a fraud 
 on creditors; as where an insolvent person gives away a 
 part of his estate for no valuable consideration, or the 
 whole of it to one antecedent creditor. These, to be sure, 
 are examples ; but very few others could be adduced ; and 
 I understand the true law, both here and in England, to have 
 been, until lately, that a conveyance for a valuable present 
 consideration is never a fraud in law on the face of the 
 deed, and if fraud is alleged to exist, it must be proved as 
 a fact ; and that was the law even before registration was 
 required for the benefit of persons dealing with the mort- 
 gager. 
 
 " It is very strange that after our legislatures have met 
 the difficulties of Twyne's Case, by requiring registration, 
 which gives not only constructive, but, in most cases, actual 
 notice of mortgages, and when many of them have pro- 
 vided that fraud shall be a question of fact for the jury, 
 the decisions which I have cited, and others following them , 
 should have reverted to the harsher doctrine, which had al- 
 ready grown obsolete before the laws provided any notice at 
 all, or any rule of evidence about fraud. It is plain that 
 such a doctrine virtually prevents a trader from mortgaging 
 his stock at any time for any useful purpose ; for if he can 
 not sell in the ordinary course of trade, or only as the trustee 
 
 ' Notes to Twyne's Case, vol. I., p. 1, etc. 
 ' 91 U. S. 114. 
 
§ 4 FEAUDULENT MORTGAGES OF MBECHANDISE. 
 
 and agent of the mortgagee, he might as well give posses- 
 sion to the mortgagee at once and go out of business. In 
 this case, he never could have begun business, for the whole 
 stock was supplied by the defendant. 
 
 " I would refer in this connection to the very able opinions 
 of Judge Dillon in Hughes v. Cory,i ^nd of Judge Camp- 
 bell in Gay v. Bidwell,^ in which they refuse to follow the 
 decisions in New York, and give reasons for that refusal, 
 which, in my judgment, are unanswerable. 
 
 "If it be said that this is one of those cases in which 
 fraud is a necessary result of the deed, all I can say is, that 
 this brings us to an ultimate fact of observation and expe- 
 rience ; and I am unable to see the necessity. Indeed, it is 
 much more difficult for me to see how creditors can be de- 
 frauded in such a case, when they are told in the deed itself 
 that the debtor has no credit, and no property that he can 
 call his own, than that the mortgagee is most outrageously 
 defrauded by such a rule, which devotes his property to the 
 payment of another person's old debts, the very instant 
 that he has parted with the possession, taking back a se- 
 curity which is admitted to be honestly given. Take this 
 very case as an illustration. It is admitted that there was 
 no fraud in fact ; that the trader's whole stock was supplied 
 by the defendant ; that the mortgage shows that all the 
 stock, present and future, is hypothecated, not as a cover 
 or blind, for there was none, but to the payment of a certain 
 debt by certain instalments. No offer is made to prove 
 that any one was deceived, or even was ignorant of the 
 mortgage ; but I am asked to find fraud in law, when I 
 know, and it is admitted,. there was none in fact." 
 
 These positive views of Judge Lowell are stated with all 
 the earnestness of conviction. To fully illustrate the char- 
 acter of the issue presented between him and the appellate 
 
 1 20 Iowa, 399. 2 7 Mich. 519. 
 
 10 
 
THE CONTBOVEESY. § 4 
 
 court, it is only necessary to quote the equally incisive 
 language of Mr. Justice Davis in Eobinson v. Elliott,^ in 
 which case the stipulation allowing the debtor to remain in 
 possession, control, and disposition of the stock of goods, 
 appeared on the face of the instrument. 
 
 " If chattel mortgages were formerly, in most of the 
 States, treated as invalid unless actual possession was sur- 
 rendered to the m'ortgagee, it is not so now, for modern 
 legislation has, as a general thing (the cases to the contrary 
 being exceptional), conceded the right to the mortgager to 
 retain possession, if the transaction is on good consideration 
 and bona fide. This concession is in obedience to the wants 
 of trade, which deem it beneficial to the community that 
 the owners of personal property should be able to mdke 
 bona fide mortgages of it, to secure creditors, without any 
 actual change of possession. 
 
 " But the creditor must take care, in making his contract,, 
 that it does not contain provisions of no advantage to him,, 
 but which benefit the debtor, and were designed to do so, 
 and are injurious to other creditors. The law will not sanc- 
 tion a proceeding of this kind. It will not allow the credi- 
 tor to make use of his debt for any other purpose than his 
 own indemnity. If he goes beyond this, and puts into the 
 contract stipulations which have the effect to shield the 
 property of his debtor, so that creditors are delayed in the 
 collection of their debts, a court of equity will not lend its 
 aid to enforce the contract. These principles are not dis- 
 puted, but the courts of the country are not agreed in their 
 application to mortgages with somewhat analogous provi- 
 sions to the one under consideration. The cases cannot be re- 
 conciled by any process of reasoning, or on any principle of 
 law. As the question has never before been presented to this 
 court, we are at liberty to adopt that rule on the. subject 
 which seems to us the safest and wisest. It is not difficult 
 
 1 22 Wall. 513. 
 
 11 
 
§ 4 FKAUDULKNT MORTGAGES OF MERCHANDISE. 
 
 to see that the mere retention and use of personal property, 
 until default, is altogether a different thing from the reten- 
 tion of possession accompanied with a power to dispose of 
 it for the benefit of the mortgager alone. The former is 
 permitted by the laws of Indiana, is consistent with the 
 idea of security, and may be for the accommodation of the 
 mortgagee ; but the latter is inconsistent with the nature 
 and character of a mortgage, is no protection to the mort- 
 gagee, and of itself furnishes a pretty effectual shield to a 
 dishonest debtor. We are not prepared to say that a mort- 
 gage under the Indiana statute would not be sustained, 
 which allows a stock of goods to be retained by the mort- 
 gager, and sold by him at retail for the express purpose of 
 applying the proceeds to the payment of the mortgage 
 debt. Indeed, it would seem that such an arrangement, if 
 honestly carried out, would be for the mutual advantage of 
 the mortgagee and the unpreferred creditors. But there are 
 features engrafted on this mortgage which are not only to 
 the prejudice of creditors, but which show that other con- 
 siderations than the security of the mortgagees, or their ac- 
 commodation even, entered into the contract. Both the 
 possession and right of disposition remain with the mort- 
 gagers. They are to deal with the property as their own, 
 sell it at retail, and use the money thus obtained to replenish 
 their stock. There is no covenant to account with the mort- 
 gagees, nor any recognition that the property is sold for 
 their benefit. Instead of the mortgage being directed solely 
 to the bona fide security of the debts then existing, and 
 their payment at maturity, it is based on the idea that they 
 may be indefinitely prolonged. 
 
 " Manifestly it was executed to enable the mortgagers to 
 continue their business, and appear to the world as the ab- 
 solute owners of the goods, and enjoy all the advantages 
 resulting therefrom. It is idle to say that a resort to the 
 record would have shown the existence of the mortgage ; 
 
THE CONTROVERSY. § 4 
 
 for men get credit by what they apparently own and pos- 
 sess, and this ownership and possession had existed without 
 interruption for ten years. There was nothing to put cred- 
 itors on their guard. On the contrary, this long-continued 
 possession and apparent ownership were well calculated to 
 create confidence and disarm suspicion. But apart from 
 this, security was not the leading object. If so, why does 
 Mrs. Sloan's note remain overdue for twenty-one months, 
 and why does Robinson continue to indorse ? This conduct 
 is the result of trust and confidence, which, as Lord Coke 
 tells us, are ever found to constitute the apparel and cover 
 of fraud. 
 
 " In truth, the mortgage, if it can be so called, is but an 
 expression of confidence, for there can be no real security 
 where there is no certain lien. Whatever may have been 
 the motive which actuated the parties to this instrument, it 
 is manifest that the necessary result of what they did do 
 was to allow the mortgagers, under cover of the mortgage, 
 to sell the goods as their own, and appropriate the proceeds 
 to their own purposes, and this, too, for an indefinite length 
 of time. A mortgage which in its very terms contemplates 
 such results, besides being no security to the mortgagees, 
 operates in the most effectual manner to ward off other 
 creditors ; and where the instrument on its face shows that 
 the legal effect of it is to delay creditors, the law imputes 
 to it a fraudulent purpose. The views we have taken of 
 this case harmonize with the English common-law doctrine, 
 and are sustained by a number of American decisions." 
 
 The diversity of conclusions drawn in these two opinions, 
 as to what is the English law on this subject, is no more 
 striking than is the difference they disclose as to the duty 
 of judicial opinion on the subject. The Supreme Court 
 finds itself impelled to the conclusion that the transaction 
 is inherently fraudulent, which is accordingly adjudicated. 
 The District Court does not think it should have, or that 
 
 13 
 
§ 5 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 the law does have, any opinion on the subject. Yet the 
 only substantial difference in the aspect of the two cases, as 
 presented to the courts for adjudication, is in the character 
 of the evidence by which the reserved privilege of selling 
 the goods was proven. In Kobinson v. Elliott, this reser- 
 vation appeared on the face of the instrument. In Brett 
 V, Carter, it appeared by evidence aliunde; but that it did 
 appear is manifest from the facts stated in the opinion of 
 the court. There was one entire transaction in each case. 
 What the transaction was, appeared in one case partly by 
 written and partly by parol evidence. In the other case, 
 it was sufficiently shown by the written contract alone. 
 But that this difference in procedure, as to the mode by 
 which the agreement is proven, can furnish no reason for a 
 difference in the application of the proper rule of law, will 
 be clearly seen from the adjudicated cases. 
 
 § 5. Twyne's Case the origin of the American doc- 
 trine. — The controversy will be best understood, not only 
 as to its merits, but also as to its occasion, by a careful 
 examination of the English cases, with a view of observing 
 the origin and tracing the development of the doctrine in 
 question. The visible origin of this doctrine is to be found 
 in Twyne's Case.^ It has come down to us with as little 
 apparent variation from its original form as has any other 
 of the principles announced in that case, while it is per- 
 haps the most important of them all. The exhibitions of 
 this doctrine, as an active force in the jurisprudence of this 
 country, have been called American phases of that cele- 
 brated case, because the doctrine has been adopted into 
 our jurisprudence in precisely the form announced in the 
 Star Chamber in 1601, and finds a ready adaptation to 
 the various exigencies of our jurisprudence. Singularly 
 
 1 3 Coke, 80. 
 14 
 
THE CONTROVEESY. § 5 
 
 ;nough, it is virtually outgrown and practically abandoned 
 n England. 
 
 Attention is invited at the outset to the fact that it is not 
 ;he mere question of the possession of the goods by the 
 Jebtor that is now to be looked to as the leading question 
 n that case. 
 
 It has too frequently been supposed that the chief and 
 most important, if not the only, principle of law adjudica- 
 tions in Twyne's Case, was, that the retention of possession 
 by the grantor of chattels conveyed by him, by mortgage 
 3r otherwise, as security for debt, would alone suffice to 
 I'ender the transaction fraudulent and void, as to his other 
 3reditors ; and the idea has often been advanced, that the 
 principle of law adopted in that case was established upon 
 bhe basis of a presumption of fraudulent intent, thus pre- 
 senting a case under the statute 13 Eliz., c. 5. Both of 
 these views, it is now submitted, were erroneous. Twyne's 
 Case did not turn upon the question of retention of pos- 
 session alone ; nor was it necessary to the determination 
 of that case to impute a fraudulent intent to the grantor 
 in the conveyance, or to refer to the statute 13 Eliz., c. 5, 
 for the rule of law which should govern the case. 
 
 It is in these misapprehensions as to the scope and effect 
 of Twyne's Case, that the careful student of the law of 
 fraud will find the occasion for all the various contro, 
 versies that have arisen in reference to chattel mortgages, 
 including the one now under consideration. Thus, in the 
 earlier decades of the present century, there was waged in 
 this country an earnest and learned controversy over these 
 questions : 1st, whether retention of possession under such 
 a mortgage is conclusively fraudulent ; or, 2d, whether it 
 is only prima facie fraudulent; and, 3d, if the latter, then 
 what explanation of such possession will suffice to nega- 
 tive the suspicion of fraud. The disputants very generally 
 took the view of Twyne's Case above stated. The learned 
 
 15 
 
§ 5 FRAUDULENT MOBTGAGES OF MERCHANDISE. 
 
 American editors of Smith's Leading Cases, in their notes 
 on Twyne's Case,^ have given their chief attention to the 
 question of possession, practically overlooking the one now 
 under consideration. In a recent article in the American 
 Law Register,^ entitled " Sales and Conveyances without 
 Delivery of Possession," the writer, taking up the subject 
 where the editors of Smith's Leading Cases left it, like them 
 treats retained possession alone as the imj)ortant question 
 in Twyne's Case. 
 
 The text-writers have very generally fallen into the 
 same misapprehension. Mr. Cowen, in his note to Bissel 
 V. Hopkins,^ where the rule was disaffirmed that reten- 
 tion of possession alone renders a mortgage of chattels 
 fraudulent, criticises this rule, enumerates twenty-four 
 exceptions thereto which he finds then already estab- 
 lished by decisions in England and America, and asks : 
 "What does the rule amount to? "What is it worth? 
 And does its preservation merit a struggle ? " ; adding, 
 ' ' Some of the exceptions are almost as broad as the rule 
 itself." This rule is now. abandoned in nearly all the 
 American States, and the controversy over it is here re- 
 ferred to merely as an illustration of past misapprehensions 
 concerning the scope of Twyne's Case ; for it was that case 
 to which reference was usually made for the origin of the 
 rule ; yet it cannot now be well supposed that that case was 
 ever an authority for such a rule. The courts of a few 
 of the States still adhere to this rule, probably because it 
 became at an early day too well fixed in their jurisprudence 
 to be disturbed, and not because it would now be advisedly 
 adopted. 
 
 It is obvious, too, from the language of the opinion in 
 Brett V. Carter, above quoted, that the court delivering 
 
 1 Vol. 1, p. 47. 
 ^ 18 Am. L. Reg. 137 (1879). 
 » 3 Cowen, 166 ; 15 Am. Dec. 259. 
 16 
 
THE CONTROVEESY. § 5 
 
 that opinion supposed Twyne's Case to have been decided 
 upon rules of constructive or artificial fraud, probably by 
 imputing to the parties a fraudulent intent ; and considered 
 that the applicability of these rules to such cases had been 
 destroyed by modern statutes, and that the only fraud in 
 fact of which courts take cognizance, is fraud existing in 
 the intent of the parties, to determine which will of course 
 usually require the verdict of a jury. It is further obvious 
 that that court supposed the secrecy of the transaction to be 
 the principal invalidating feature of Twyne's Case, a feature 
 which would have been effectually removed by notoriety, 
 and that this result has been fully accomplished for all sim- 
 ilar cases in the future, by the modern statutes requiring 
 registration of chattel mortgages; for registration gives 
 " not only constructive, but in most cases actual notice," 
 and thus meets all " the difficulties of Twyne's Case." But 
 it is submitted that these views also rest in a grave misap- 
 prehension of the law of that case ; that the secrecy of the 
 transaction was not its worst feature ; that the broadest 
 notoriety, either constructive or actual, would not have 
 made it a valid or legal transaction ; that the fraud therein 
 discovered was actual, not presumptive or artificial fraud ; 
 that it rested particularly, not in the intent of the debtor, 
 but in the inherently fraudulent character and tendency of 
 the transaction ; and that for this reason, the case did not 
 find its rule alone in the statute 13 Eliz., c. 5, but in the 
 common law, which would have furnished an apt and ade- 
 quate rule, without the statute. 
 
 Instances of this broader view of the characteristic ele- 
 ments of Twyne's Case are found in our American jurispru- 
 dence, even at an early day. Mr. AngelP observed the 
 indicia of fraud in that case to be " that the vendor, after 
 a bill of sale of chattels for a valuable consideration, re- 
 
 1 Angell on Assignments, 80. 
 
 2 17 
 
§ 5 FRAUDULENT MOETGAGES OF MEBCHANDISB. 
 
 mained in possession, and exercised acts of ownersJiip over 
 the goods.'' Chancellor Lansing, in 1808, criticised the 
 remarlc of Lord Mansfield, that " even before the statute,^ 
 if a man had conveyed his own goods to a third person, and 
 had kept the possession, such possession would have been 
 void, as being fraudulent according to the doctrine in 
 Twyne's Case, 3 Eep. 81,"* saying of it, "This opinion 
 rather narrows the doctrine in Twyne's Case, as it required 
 the execution of the power to sell to constitute the possession 
 fraudulent."' 
 
 To ascertain the doctrine properly to be drawn from 
 Twyne's Case, a careful scrutiny will, in the next chapter, 
 be made of that case and those succeding English cases 
 which presented similar states of facts. 
 
 1 21 Jac. 1. 
 
 " Mace ». Cadell, 1 Cowp. 232 (1774). 
 
 ' Sands v. Codwise, 4 Johns. 536 (at p. 564) ; 4 Am. Dec. 305. 
 18 
 
DOCTRINE OF THE ENGLISH CASES. § 6 
 
 CHAPTBK II. 
 
 THE DOCTRINE OF THE ENGLISH CASES. 
 
 Section 6. Retained power of disposition tlie important element in 
 Twyne's Case. 
 
 7. Ryall v. Eowles; the same element present. 
 
 8. Worseley v. De Mattos; Lord Mansfield's opinion. 
 
 9. Edwards v. Harben; power of disposition the fatal feature. 
 
 10. Lord Kenyon's opinion in Paget v. Perohard. 
 
 11. Wordall v. Smith; the same element present. 
 
 12. Reed ». Blades ; views of Chief Justice Mansfield. 
 
 13. Armstrong i;. Baldock; the same element present. 
 
 14. Cases supposed to be antagonistic; Benton ». Thornhill. 
 
 15. Bucknall c. Eoiston of doubtful authority. 
 
 16. The element of a reserved power of sale found in eight cases. 
 
 17. Mere retention of possession unimportant. 
 
 18. Retention of possession alone not conclusive of fraud; Stone 
 
 v. Grubham. 
 
 19. Lord Holt's dietum in Meggot v. Mills. 
 
 20. Views of Lord Mansfield in Cadogan v. Kennett. 
 
 21. Lord Eldon's views ; BuUer's synopsis of Twyne's Case. 
 
 22. Lord Eldon's further views of Twyne's Case; Arundel b. 
 
 Phipps, and Ex parte Williams. 
 
 23. Lord Elienborough's views. 
 
 24. Views of Chief Justice Mansfield in Steel v. Brown. 
 
 25, 26. Judicial doubts; Jezeph v. Ingram, Wooderman u. Baldock, 
 and Steward v. Lombe. 
 
 27. Lord Tenterden's views; Latimer v. Batson, and Eastwood 
 
 V. Brown. 
 
 28. The question of the effect of possession alone settled la 
 
 Martindale o. Booth. 
 
 29. Edwards v. Harben further explained in Macdona v. Swiney. 
 80. Late English cases ; the question of power of sale not con- 
 sidered. 
 
 31. Late English cases ; the question not involved. 
 
 32. The doctrine of Twyne's Case superseded in England. 
 
 § 6. Retained, power of disposition the important ele- 
 ment in Twyne's Case. — The rule of Twyne's Case which 
 
 19 
 
§ 6 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 is applied in Kobinson v. Elliott, is illustrated in the second 
 resolution of the Star Chamber, viz. : "The donor con- 
 tinued in possession, and used them as his own; and by 
 reason thereof he traded and trafficked with others, and de- 
 frauded and deceived them ; " and in the fifth resolution, 
 which is allied to, if not drawn from and depending on, the 
 second, viz. : " Here was a trust between the parties, for 
 the donor possessed all, and used them as his proper goods, 
 and fraud is always apparelled and clad with a trust, and 
 trust is the cover of fraud." If one be indebted to sev- 
 eral, and makes a gift of all his goods to one creditor in 
 satisfaction of his debt, says the learned reporter, " but 
 there is a trust between them that the donee shall deal 
 favorably with him in regard of his poor estate, either to 
 permit the donor, or some other for him, or for his benefit, 
 to use or have possession of them, and is contented that he 
 shall pay him his debt when he is able, this shall not be 
 called bona fide." This language, though applied to a sup- 
 posed case of a sale or a gift — perhaps secret, as in Twyne's 
 Case — yet describes very aptly the result of all cases under 
 mortgages, such as Eobinson v. Elliott, or Brett v. Carter. 
 Publicity, notice, registration, actual consideration, all fade 
 into immateriality in view of an agreement under a mort- 
 gage that the mortgager shall continue to use the goods as 
 " his own proper goods," and practically shall pay his se- 
 cured creditor when he is able, or is ready, to do so ; for 
 that is all that is in reality left of the arrangement mis- 
 called a mortgage. Some of the later English cases have 
 not announced this vicious principle, in the most apt terms, 
 as the reason for their decisions. But, in the cases below 
 referred to, the fact notably existed of a reservation of 
 this kind by the debtor for his benefit. It has been often 
 said that courts may, and frequently do, give most correct 
 judgments without illustrating them by the logical reason- 
 ing which might have been presented as their inherent 
 20 
 
DOCTRINE OF THE ENGLISH CASES. § 7 
 
 strength and support. Doubtless, in England as in America, 
 jurists have felt the full force of the facts of the case, and 
 the necessarily fraudulent tendency df a reservation of a 
 power of sale and disposition under such conveyance, with- 
 out expressing their feelings and convictions in apt terms. 
 Especially may we accept this as the fact when we find 
 them referring, without further explanation, to Twyne's 
 Case as authority, and find the proper authority in the sec- 
 ond and fifth items of the Judgment of the Star Chamber, 
 and the facts to which that judgment applied. ' 
 
 § 7. Ryall v. Kowles; tlie same element present. — 
 
 The earliest reported case, after Twyne's Case, is Eyall v. 
 Howies,' arising in 1749. (It is reported, also, as Ryall v. 
 Eolle.*) This was a case of a mortgage of utensils and 
 stock of goods in trade of a brewer, the mortgager having 
 not only retained possession, but continued, as usual, with 
 his business. The goods conveyed were "utensils, hops, 
 malt, fixtures to the freehold, and stock in trade," as stated 
 by one of the judges.' 
 
 The case was considered under the statute 21 Jac. I., c. 
 19, relating to insolvencies. But it was argued on general 
 principles, applicable to every case,* and the principle under 
 discussion, which had its origin prior to that statute, was 
 found to be involved, and was adjudicated. Burnet, J., 
 said: " The leading case on this is Twyne's Case, where it 
 is held that it was upon a valuable consideration, but not 
 iona fide, from the continuing in possession and trading 
 therewith. It is difficult, unless in very special cases, to 
 assign a reason why an absolute or conditional vendee 
 of goods should leave them with the vendor, unless to 
 
 1 1 Ves. sr. 348. 
 
 2 1 Atk. 165, and 1 Wilson, 260. 
 
 3 1 Atk. 175. 
 
 * See May on Fraud. Couv. 117. 
 
 21 
 
§ 7 FRAUDULENT MORTGAGES OF MERCHANDISE, 
 
 procure a collusive credit ; and it is the same, whether in 
 absolute or conditional sales." ^ Lord Hardwicke, during^ 
 the argument of counsel, replied to their suggestions as 
 follows : " The chattels are stock and utensils in trade, the 
 debts due and to be due ; and yet, possession of the whole 
 left with the bankrupt, who had the order and disposition 
 of them as before, sold, altered and disposed as owner, 
 was reputed as such, and all this with the express consent 
 of the mortgagee, who might have prevented this. Nor 
 was he to account with the desponee for what he should 
 sell, nor for any of the debts he should recover; that 
 might probably have altered the case."^ All the four 
 judges agreed in exposing, in their opinions, the fraudu- 
 lent and delusive characte^r of such misnamed mortgages; 
 and it was stated that the statute of 13 Eliz., on which 
 in part the decision was rested, was "only declaratory 
 of the common law."' The case of Stephens v. Sole, in 
 which fraud was adjudicated by Lord Chancellor Talbot, in 
 1736, was referred to approvingly by all the judges. The 
 substance of that case was thus cited by Lord Hardwicke, 
 in Bourne v. Dodson.* " There a person, owner of three 
 hoys belonging to the river Thames, mortgaged them, and 
 after he had so done, was suffered by the mortgagee ta 
 make use of them in the same manner as before for three 
 years together, and appeared to all intents the visible owner, 
 and persons lent him money upon the credit of his being 
 the owner, and therefore a very strong case." 
 
 Eyall V. EoUe was reported by Wilson in a -brief and 
 concise form, in language which shows clearly what was 
 then understood to be the doctrine of the case. The entire 
 report of the decision is as follows : * 
 
 " Ryall V. Eolle. In chancery, before Lord Hardwicke, 
 assisted by Lee, Chief Justice B. R., Parker, Chief Baron 
 
 ' 1 Ves. sr. 360. 2 1 yes. jp. 853. 
 
 » 1 Atk. 178. * 1 Atk. 157. 
 
 * 1 Wilson, 260. 
 22 
 
DOCTRINE OF THE ENGLISH CASES. § 8 
 
 of the Exehequer, and Burnett, one of the judges of the 
 C. B ; who delivei-ed their opinions seriatim upon the 27th 
 of January,^ and unanimously gave judgment that if a man 
 mortgages his goods and chattels and debts for a valuable 
 consideration, and the mortgagee permits the mortgager to 
 keep possession, and to have the ordering, selling, and dis- 
 posing thereof, this gives the mortgager a false credit, is 
 fraudulent against creditors, and the mortgager afterwards 
 becoming bankrupt, the assignees under the commission are 
 entitled to have these goods." 
 
 § 8. Lord Mansfield's opinion in Wopseley v. De 
 Mattes. — Worseley v. De Mattos^ was determined in 
 1758. One Slader had mortgaged all his goods, materials, 
 and stock in trade as a brewer, as security for debt, and 
 had authorized the mortgagee to enter and take possession 
 upon default of payment. A feigned issue was sent out of 
 chancery to determine whether Slader, by this mortgage, 
 had committed an act of bankruptcy. It was held that he 
 had, not by virtue of any provision of the statutes of bank- 
 ruptcy, but because the transaction was fraudulent as to 
 creditors, under 13 Eliz., though made by way of security 
 and for a valuable consideration. Lord Mansfield cited the 
 second resolution in Twyne's Case, emphasizing the words 
 referring to the power of disposition of the goods, and 
 said : " By the express tenor of the deed, Slader was to have 
 the absolute order and disposition as before. In fact, he 
 was permitted to continue in possession and act as owner. 
 They who dealt with him trusted to his visible trade and 
 stock. They trusted to the bankrupt law, that he could 
 neither have sold nor mortgaged; and in case of a misfor- 
 tune, that his effects must be equally distributed. They 
 were imposed upon by false appearances." 
 
 11749. 'Burr. 467. 
 
 23 
 
§ 9 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 § 9. Edwards v. Harben; Power of disposition the 
 fatal feature. — Next in order of time came the cele- 
 brated case of Edwards v. Harben,* involving a bill of sale 
 of household furniture, medicines, and a stock in trade, of 
 which possession was not to be delivered until after four- 
 teen days from the date of the bill, which was in effect a 
 mortgage, being given to secure a debt. Possession was 
 not, in fact, taken under it until after the death of the 
 grantor. Buller, J., said, in deciding the case: " We are 
 all of opinion that if there is nothing but the absolute con- 
 veyance without the possession, that, in point of law, is 
 fraudulent." The power over and disposition in trade of 
 the stock of goods were urged upon the court, by the coun- 
 sel attacking the conveyance, as material to show the 
 fraud. He argued, first, that continued possession of chattels 
 sold was prima fade evidence only of an intent to defraud ; 
 and secondly, that " whenever there is a positive agreement 
 between the parties that the vendor shall be permitted after 
 the sale, to have for any space of time, not only the mere 
 manual occupation, but also the disposition of the goods 
 sold, to trade with them as his own, it is an actual fraud on 
 the creditors of the vendor." He stated in the following 
 words the collusive proposition from the creditor to the 
 debtor, which is, in fact, embodied in such a transaction, 
 whether spoken or not. " If you will put me in a situa- 
 tion to be safe against your other creditors, I will leave you 
 in that which shall induce them not to attack you. You 
 shall preserve the creditors from having possession ; I will 
 retain the security from the real ownership. Give me the 
 command of the property, you shall have it to hold out to 
 the world and your creditors as your own." ^ 
 
 Though these features of the case are not specifically 
 mentioned by the court, yet it is difficult to avoid the con- 
 
 • 2 Term R. 587 (1788). » pp. 589, 590. 
 
 24 
 
DOCTBINE OF THE ENGLISH CASES. § 10 
 
 elusion that they influenced and controlled its decision. 
 But this case has been extensively followed as the leading 
 precedent for the rule that retention of possession by the 
 mortgager will alone suffice to render a mortgage of chat- 
 tels fraudulent. It is with reference to this case that Mr. 
 Cowen criticised this supposed rule as above mentioned.^ 
 Indeed, it is not strange, in view of the inexact language of 
 Mr. Justice Buller, just quoted, that such a view should be 
 taken of the case in America, particularly as the same error 
 is observed in many of the English cases. Yet there are 
 not wanting English cases, as will be seen below, which 
 support the view of Edwards v. Harben, here presented, and 
 recognize it as an authority to precisely this extent. 
 
 Bamford v. Baron is referred to by Buller, J., in con- 
 nection with Edwards v. Harbfen, and is reported in con- 
 nection with it.^ It was a case where the debtor, after con- 
 veying a stock of goods in trade to trustees, had retained 
 possession and made sales, but he alleged that he had un- 
 dertaken to account to the trustees for all the profits of the 
 trade. This was held not sufficient to validate the transac- 
 tion, and applying the same doctrine announced in Edwards 
 V. Harben, the court by Buller, J., granted a new ti'ial, set- 
 ting aside the verdict which sustained the transaction. 
 
 § 10. liord Kenyon's opinion in Paget v. Perchard. — 
 
 In Paget v. Perchard,^ one Mrs. Spencer, an inn-keeper, 
 had given to her distillers a bill of sale of all her effects, 
 including the liquors in the house, as well as furniture. 
 The grantees were in possession, yet they had permitted 
 Mrs. S. to sell liquors in the usual way of trade, for one day, 
 and to receive the money, not accounting for it to them. 
 Lord Kenyon said: "That the allowing Mrs. Spencer to 
 appear, as usual, mistress of the house, and to execute acts 
 
 1 See sect. 5. » 2 Term K. 594. ' 1 Bsp. 205 (1794). 
 
 25 
 
§ 12 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 of ownership, after having parted with all her property by 
 the bill of sale, was inconsistent with such situation, and a 
 sufficient evidence of fraud as against bona fide executions ; ' ' 
 and he therefore directed a non-suit, thus evidencing his 
 view of the judicial duty to declare a fraud. 
 
 § 11. Wordall v. Smith ; the same element present. — 
 
 Wordall v. Sniith,i tried before Lord EUenborough in 1808, 
 is a case much like the preceding. After a bill of sale of 
 the household furniture and the stock in trade of a publican, 
 the grantee took a colorable possession by putting his ser- 
 vant into the house ; but the grantor continued the business 
 as before and had control of the sales of liquor. Lord 
 EUenborough' s charge to the jury based the fraudulent 
 character of the transaction* upon the colorable possession ; 
 still, it is evident that, as in Twyne's Case, the control of 
 the property by the grantor, rather than the mere posses- 
 sion, was felt by the court as the vital feature of the case. 
 
 § 12. Sir James Mansfield's views in Reed v. Blades. — 
 
 Reed v. Blades,^ in the Common Pleas in 1813, is an 
 instructive case. Though it is reported with the head-note 
 that ' ' a conveyance of chattels unaccompanied with pos- 
 session is void," it is not an authority for so broad a prop- 
 osition. The case presented a conveyance to trustees, in 
 trust for certain purposes, including the payment of debts, 
 of the goods, chattels and other movable property in an 
 opera house, together with the rents, issues, profits, sub- 
 scriptions, door money, and other income of the building 
 and the business. The trustees never took possession of the 
 opera house, nor the chattels named, nor assumed the con- 
 duct of the business, nor did Sandell, the present claimant, 
 who claimed under a subsequent purchase . During the period 
 
 1 1 Camp. 332. 2 5 Taunt. 212. 
 
 26 
 
DOCTEINE OF THE ENGLISH CASES. § 12 
 
 from 1808 to 1811, the report states, Taylor, the grantor, 
 " continued to act as the ostensible owner of the property; 
 he made all contracts in his own name, received all the pro- 
 ceeds, paid them to his own account at the bankers, and drew 
 lor moneyfrom thence in his own name." Mansfield, C. J., 
 who presided at the trial, directed the Jury, that Sandell, 
 the claimant of the goods, never having acted nor had any 
 concern in the management or possession of the opera 
 house, the supposed sale to him in 1799 was wholly inopera- 
 tive, and that the goods were liable to seizure as the prop- 
 erty of'Taylor ; and this direction controlled the verdict. On 
 a motion for a new trial before the full bench, the judges all 
 agreed in refusing it, on the ground that Taylor had con- 
 tinued in not only the possession, but the visible actual 
 ownership, control and disposition of the property and the 
 business. Mansfield, C. J., said: " The case, when exam- 
 ined, depends on very simple points. The first question is, 
 whether Taylor and Goold had, quoad their creditors, the 
 legal possession of the goods in this opera house. Taylor 
 is the only person who has the management, orders the 
 dresses, purchases the goods, is, to all the world, the visible 
 owner and possessor. In 1792, a secret trust deed is exe- 
 cuted to trustees for certain creditors, etc. What do the 
 trustees do? Nothing. What do those creditors getf 
 Nothing. Taylor continues the acting and visible owner 
 and possessor ; it is nevertheless contended, this legal 
 property all passed to these trustees. Now, where the • 
 subject of the deed is goods, and the possession never taken 
 by the trustees, and nothing done under it, how can it be 
 said these goods may not be taken in execution under a 
 judgment against Taylor ? I do not wonder that the trus- 
 tees should be unwilling to act in such a troubled business, 
 but then they should not undertake such trusts ; they might 
 appoint agents to make all contracts and conduct all man- 
 agement, or they may let Taylor make contracts with their 
 
 27 
 
§ 14 FKAUDULENT MORTGAGES OF MERCHANDISE. 
 
 express assent ; but they do nothing of all this ; as to all 
 the world, then, the trust deed is void, and I cannot at all 
 feel that it stands in the way of the right of creditors to 
 take these goods as the goods of Taylor. Though I wished 
 to avoid this question, and send it where all the conflicting 
 interests might be better taken care of, I am obliged to de- 
 cide it by saying, that they who sell goods to Taylor may, so 
 far as these trustees are concerned, take the goods in exe- 
 cution as the goods of Taylor." And he disposed in like 
 manner of the claim that Sandell had acouired, under the 
 circumstances, a valid title to the goods. 
 
 § 13. Armstrong v. Baldock ; the same element pres- 
 ent. — Armstrong v. Baldock^ is a case where the instruc- 
 tions to the jury were placed on the ground alone that 
 possession remaining with the grantor is fraudulent in law ; 
 the case being one of a conveyance which included a stock 
 in trade together with household furniture. The action was 
 trover for the furniture only, not for the stock in trade. The 
 case has, however, been recognized by the English bar as 
 really resting on the same basis as the cases above referred 
 to. The language of Dallas, C. J., plainly refers to the 
 point that the grantor had reserved and exercised a power 
 of sale. " Here Nicholas brought the furniture from his 
 former residence, and he alone, from the time of the as- 
 signment until the seizure, exercised acts of ownership over 
 it. Indeed, it could not be predicted from appearances 
 that any other person than himself was the proprietor of 
 the property." 
 
 § 14. Cases supposed to be antagonistic ; Benton v. 
 Thornhill. — There are a few cases to be found in the Eng- 
 lish reports which have been sometimes taken as authorities 
 against the proposition supported by the preceding cases. 
 
 ' 1 Niel Gow, 33 (1818). 
 
 28 
 
DOCTRINE OF THE ENGLISH CASES. § 15 
 
 One of these is Benton v. Thornhill.^ But in this case, 
 there was conflicting evidence on the point in question, 
 which was left to the jury ; they were told that an intent to 
 reserve any benefit to the grantor would avoid the convey- 
 ance ; there was not a complete and undisputed possession 
 by the debtor, the agent of the creditor having been in at 
 least partial possession; and the verdict in favor of the 
 creditor was taken by the court (Gibbs, C. J.), as sustain- 
 ing the possession of the mortgagee, and negativing the idea 
 that he had assented to any acts of ownership on the part 
 of the debtor, or that there was any reservation for his 
 benefit. The case is, therefore, in harmony with rather 
 than in opposition to the doctrine in question. 
 
 § 15. Bucknall v. Boiston of doubtful authority. — 
 
 Bucknall v, Eoiston ^ was a case of a cargo of goods, taken 
 out on shipboard for the purpose of foreign trade, which 
 was pledged to a creditor, not only by a bill of sale of the 
 goods, and of " the produce and advantage that should 
 be made thereof," but also by a bottomry bond for three 
 years ; and the chancery court, on the theory of a trust 
 for the faithful accounting of the goods and profits thereof, 
 held the conveyance good as against a creditor by a prior 
 judgment ; and gave the bond-creditor an account of the 
 goods that were brought home, though the goods had re- 
 peatedly changed form, the original stock having all disap- 
 peared. In the light of more modern decisions, a contrary 
 conclusion might well have been reached. This case is re- 
 ferred to by BuUer, J., in Edwards v. Harben, as having 
 been decided alone on the ground of the trust ; and it may 
 be read between the lines of the latter decision, that Buck- 
 nall V. Eoiston is not to be regarded as an adverse author- 
 ity. The same may be observed in the opinions of the 
 judges in Eyall v. Eowles, Burnet, J., saying of the Lord 
 
 1 7 Tauraton, 149 (1816). 
 
 » Prec. in Chancery, 285 (1709). 
 
 29 
 
§ 16 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 Chancellor's opinion in Bucknall v. Roiston: " His words 
 are, ' That here was no possession calculated to acquire a 
 false credit,' which is a plain declaration that a possession 
 so calculated as to acquire a false credit, would have made 
 the transaction void." ^ 
 
 § 16. Reserved power of sale an element in eigrht 
 
 cases. — It will be observed, then, that there are eight Eng- 
 lish cases, all decided prior to the introduction of the doc- 
 trine in question into this country, and in which the element 
 existed of a power of sale or disposition reserved to the 
 debtor; and that this element was, in each case, acknowl- 
 edged as influential, to a greater or less extent, in determin- 
 ing the decision of the court. Whether so acknowledged 
 at the time or not, it is plain in the light of subsequent 
 comment on these cases, to be hereafter referred to, that 
 this element in them was the controlling one. According to 
 well settled principles, it is necessary, in considering ques- 
 tions of law as illustrated by authority, to look particularly 
 to the facts of the case decided. In no other manner can 
 proper distinctions be drawn, or proper limitations upon 
 legal rules be established. Now, that jurists are generally 
 agreed that retention of possession by a mortgager does 
 not alone render a mortgage of chattels fraudulent, it is 
 idle to cite as an authority for such a proposition, or even 
 as a case which was formerly taken as an authority for it, 
 any of these English cases which did not rest upon retention 
 of possession alone, but which was distinguished by the ele- 
 ment of a reserved power of sale added to the possession. 
 This element is plainly found in Twyne's Case and the suc- 
 ceeding cases above cited. The conclusion seems inevitable 
 that these cases are direct authorities in support of the 
 doctrine of Robinson v. Elliott, as a common-law doctrine, 
 and that its visible origin is to be found in Twyne's Case. 
 
 » 1 Atk. 168. 
 30 
 
DOCTRINE OF THE ENGLISH CASES. § 17 
 
 § 17. Mere retention of possession unimportant. — It 
 
 is not strange, however, that American courts and lawyers 
 were at first inclined to treat Twyne's Case, Edwards v. 
 Harben, and kindred cases, as authorities on the question 
 of retention of possession alone. Neither Twyne's Case, 
 nor Edwards v. Harben, rested merely on possession; yet 
 the language of Buller, J., in the latter case, plainly leads 
 to a supposition that this was really the point decided. So, 
 also, it frequently occurred, that in considering cases where 
 retention of possession alone was the feature under discus- 
 sion, Twyne's Case, and^notably Edwards v. Harben, were 
 referred to as holding that such retention of possession 
 alone would suffice to make a mortgage fraudulent. Taking 
 the expressions of Mr. Justice Buller, in the last named case, 
 as exact statements of the legal rule, it was quite natural, 
 when the facts of any new case indicated the necessity of 
 distinguishing it from Edwards v. Harben, to resort to the 
 expedient of establishing exceptions to the general rule, of 
 which exceptions, as before stated, Mr. Cowen enumerated 
 twenty-four. The controversy thus arose, and was thus 
 waged, about Edwards v. Harben, in misapprehension of 
 what now seems to be the true doctrine of that case. 
 
 There appears, nevertheless, to be a continuous line of 
 English decisions, running pari passu with those above 
 cited, in which the element of possession alone under a 
 chattel mortgage was involved and was distinctively con- 
 sidered. 
 
 In a number of these cases, to which reference will now 
 be made, it was distinctly held, as a common-law rule, 
 that retention of possession alone did not render such a 
 conveyance fraudulent ; and this without either overruling 
 or ignoring Twyne's Case. Doubtless, if in every case the 
 distinction had been carefully drawn between retention of 
 possession alone, and retention of possession with power of 
 sale and disposition, and if the court had explained in every 
 
 31 
 
§ 18 FEAUDULENT MOBTGAGES OF MERCHANDISE. 
 
 case, that in one of these classes of cases the conveyance 
 would be held conclusively fraudulent, while in the other 
 it would not be so held, neither misunderstanding nor con- 
 troversy upon this question would ever have arisen. But 
 courts are not usually so astute as this in endeavoring to pre- 
 vent misapprehensions concerning their decisions. It is 
 well understood that the influence of every decision is to be 
 limited by the facts of the case decided. Students of the 
 law should always observe this rule in studying cases as 
 authorities ; and when mistakes or misapprehensions prevail, 
 as frequently happens, it may become necessary to correct 
 them by a careful review of the authorities in the light of 
 this rule. Turning, then, once more to the English cases, 
 we shall find very considerable authority for the rule that 
 retention of possession alone did not at common law render 
 a mortgage of chattels or other conveyance thereof as se- 
 curity fraudulent or void. 
 
 § 18. Retention of possession alone not conclusive of 
 fraud ; Stone v. Grubham. — The earliest case to be re- 
 ferred to is Stone v. Grubham,^ which arose soon after 
 Twyne's Case. Though hardly an authority, inasmuch as 
 the conveyance was of a lease for years, yet the case indi- 
 cates the early view of the law. The grantor had made a 
 gift to the grantee of all his goods and chattels, including 
 the lease, by way of security, but continued in possession of 
 the land, the lease being surrendered to the grantee. Sir 
 Edward Coke and his associates held that the retention of 
 possession by the grantor would not be considered fraudulent 
 except upon proof that it was done to defraud and deceive 
 creditors. The language of the court implies that the lease 
 was treated as a chattel interest, and the case, therefore, has 
 been sometimes regarded as an authority in cases involving 
 chattels. 
 
 ' 2 Bulst. 225 (1615). 
 32 
 
DOCTRINE OF THE ENGLISH CASES. § 19 
 
 § 19. Liord Holt's dictum in Meggot v. Mills. — Meg- 
 got V. Mills,^ which arose in 1697, was a case where the 
 conveyance, being a bill of sale given as security, covered 
 only the household furniture of an inn. The grantor re- 
 tained possession, but there was no power of sale reserved. 
 The case thus presents the question of retention of posses- 
 sion alone. Lord Holt, C. J., sustained the conveyance as 
 a security, though apparently with some doubts. In this 
 case the secured creditor became such only at the time of 
 and in connection with the conveyance, he having supplied 
 the money with which the debtor purchased the furniture. 
 It was upon these facts particularly that Lord Holt sus- 
 tained the conveyance, saying : " If these goods of Wilson's 
 had been assigned to any other creditor, the keeping of the 
 possession of them had made the bill of sale fraudulent as 
 to the other creditors." 
 
 This indicates plainly the opinion of Lord Holt that such 
 was the general rule of law, to which he was establishing an 
 exception. 
 
 Twelve years later, in the argument of Bucknall v. Eois- 
 ton, in chancery,'' Sir Edward Northey as counsel said : 
 , "It has been ruled forty times, in my experience, at Guild- 
 hall, that if a man sells goods and still continues in posses- 
 sion as Arisible owner of them, such sale is fraudulent and 
 void as to creditors, and that the law has been always so 
 held." The singular feature of this matter is, that no case 
 which supports the dictum of Lord Holt or the argument of 
 Sir Edward Northey has ever been found in the reports. 
 
 If this doctrine was ever seriously entertained, it was 
 evidently for but a brief period. Mr. Justice Burnet said, 
 among other things, in Ryall v. Kowles,' in 1749: "Pos- 
 session is no otherwise a badge of fraud, unless as calcu- 
 lated to deceive creditors." 
 
 1 1 Lord Eaym. 286. 
 
 2 Free, in Chancery, 285 (1709). 
 ' 1 Ves. sr., at p. 360. 
 
 3 33 
 
§ 20 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 § 20. "Views' of Liord Mansfield in Cadogan v. Ken- 
 nett. — In Cadogan v. Kennett,^ decided in 1776, but not 
 involving the precise question, Lord Mansfield expressed 
 his views on the general subject as follows: "There are 
 many things which are considered as circumstances of 
 fraud. The statute says not a word about ^ossessiora. But 
 the law says, if after a sale of goods, the vendee continue 
 in possession, and appear as the t»m6?e owner, it is evidence 
 of fraud; but it is not so in the case of a lease, for that 
 does not pass by delivery. * * * The question, there- 
 fore, in every case is, whether the act done is a bona fide 
 transaction, or whether it is a trick and contrivance to de- 
 feat creditors. If there be a conveyance to a trustee for 
 tKe benefit of the debtor, it is fraudulent." 
 
 § 21. Lord Eldon's Views ; Buller's synopsis of Twyne's 
 Case. — Kidd v. Rawlinson^ was a controversy over certain 
 household furniture, under the following circumstances. 
 The plaintiff advanced money to one Aburn with which to 
 purchase the furniture, and took from him a bill of sale 
 therefor as security, but left Aburn in possession. The 
 defendant, a creditor of Aburn, procured from him a 
 second bill of sale, and took possession of the goods, though 
 with notice of plaintiff's prior title; and the defendant 
 having sold the goods, plaintiff sued him for their value 
 and recovered judgment. Lord Eldon, in sustaining the 
 verdict, said: " It appears to me that this does not fall 
 within the principle of Twyne's Case and the other cases 
 on the subject." He also cited, with his sanction, the 
 following passage from Buller's Nisi Prius, which is that 
 author's brief synopsis of the entire doctrine of Twyne's 
 Case : — 
 
 "A., being indebted to B. in £400, and to C. in £200, 
 C. brings debt, and hanging the writ, A. makes a secret 
 
 1 2 Oowper, 432. 2 2 Bos. & Pul. 69 (1800). 
 
 34 
 
DOCTRINE OF THE ENGLISH CASES. § 22 
 
 conveyance of all his goods and chattels to B. in satis- 
 faction of his debt, but continues in possession, and sells 
 some, and sets his mark on other sheep ; and it was holden 
 to be fraudulent within this act: (1) because the gift is 
 general ; ( 2 ) the donor continued in possession and used 
 them as his own; (3) it was made pending the writ, and it 
 is not within the proviso, for though it is made on a good 
 consideration, yet it is not bona fide. 
 
 " But yet the donor continuing in possession, is not in all 
 cases a mark of fraud ; as where a donee lends his donor 
 money to buy goods, and at the same time takes a bill 
 of sale of them for securing the money." ^ 
 
 § 22. liOrd Bldon's further views of Twyne's Case. — 
 
 In Lady Arundel v. Phipps,^ Lord Eldon gave further 
 expression to his views, as follows: "Upon this case, I 
 believe, my decision in the Court of Common Pleas was 
 disputed.' My opinion upon the trial of that cause was, 
 that possession is only prima facie evidence of fraud ; and 
 as that property could not be reached by bankruptcy, and 
 the possession was according to the deed, which created 
 the title, and the title was publicly created, that was not a 
 fraudulent possession against the creditors in general; and, 
 upon a motion, for a new trial, the court agreed with me. 
 With great deference, if Lord Ellenborough thinks other- 
 wise, I am at present of the same opinion. * * * The 
 mere circumstance of possession of chattels, however fa- 
 miliar it may be to say that it proves fraud, amounts to no 
 more than that it is prima facie evidence of property in 
 the man possessing, until a title, not fraudulent, is shown, 
 under which that possession has followed. Every case, 
 from Twyne's Case downward, supports that, and there 
 
 ' Buller's Nisi Prius, 4th ed., 1785. 
 
 2 10 Ves. 139 (1804). 
 
 ^ Kidd V. Kawlinson, supra. 
 
 35 
 
§ 23 FRAUDULENT MORTGAGES OF SIERCHANDISE . 
 
 was no occasion otherwise for the statute of 21 Jac. 1, c. 
 19, s. 11." 
 
 In this language, Lord Eldon has been by English com- 
 mentators understood (and with evident correctness) to 
 refer to his opinion in Kidd v. Kawlinson. This is further 
 apparent from what this distinguished jurist said, a year 
 later, in Ex parte Williams,^ manifestly in continuation 
 of the same line of thought, and with the view of aiding^ 
 in the removal of the prevalent misunderstandings and 
 clearing up the existing doubts on the subject. " Having^ 
 had occasion lately to look into that doctrine from Twyne's 
 Case, I think in modern times a tendency has prevailed ta 
 give more effect to the q,ctual manual possession, as evidence 
 of fraud, than Twyne's Vase was intended to sanction.'' 
 
 § 23. liord EUenborough's views. — In Dewey v. Bayn- 
 tun,* the same conveyance was under consideration which 
 was involved in Arundel v. Phipps. A verdict for plaintiff 
 had been found on these circumstances : " (1) The previous 
 embarrassment of the husband ; (2) the want of notoriety 
 of the conveyance at the time ; (3) the want of an inven- 
 tory ; (4) the continuance of the husband's possession, 
 though consistent with the deed, yet without notice of the 
 change of property; and (5) the appropriation by the hus- 
 band of a part of the money raised by the trustees to his 
 own use, without objection." In setting aside this verdict 
 and granting a new trial , Lord Ellenborough said : "Indeed , 
 if the several facts upon which this alleged inadequacy is 
 founded had been given in evidence to the jury, viz., the 
 annual value of the estates, the age of Lord Arundel, the 
 value of Lord Arundel's life interest therein, and -the 
 value of the goods, it would have raised a most im- 
 portant question, whether an assignment, by the terms of 
 which the creditors of the party assigning such property 
 
 ' 11 Ves. 3 (1805). » 6 East, 257 (1805). 
 
 36 
 
DOCTRINE OF THE ENGLISH CASES. § 25 
 
 "were to be so materially prejudiced, was not a covinous act 
 between the parties thereto, and on that account void as 
 against creditors, both at common law and within the 
 statute ISEliz." 
 
 In Hoffman v. Pitt,^ the question was whether it was 
 fraudulent for the purchaser of household furniture at 
 a sheriff 's execution sale, who had left the same in 
 the debtor's house subject to his use, to pay off a 
 second execution, and then take a second bill of sale from 
 the debtor, still leaving the goods in the house ; and Lord 
 Ellenborough said : ' ' The not taking possession was in 
 some measure indicative of fraud, but was not conclusive." 
 
 § 24. Views of Chief Justice Mansfield in Steel v. 
 
 Brown. — In 1808, in the Common Pleas, the precise ques- 
 tion came before Sir Jaines Mansfield, chief justice, in 
 Steel V. Brown. ^ This case involved a bill of sale of " fix- 
 tures and goods " in a public house, the grantor retaining 
 possession, but not reserving a power of sale or disposition. 
 The chief justice, in sustaining the conveyance, said : " No 
 oase has decided that a bill of sale unaccompanied by the 
 possession may not under certain circumstances be fair and 
 valid." 
 
 § 25. Judicial doubts ; Jezephv. Ingram, and Woode- 
 man v. Baldock. — Jezeph V.Ingram'' was a conveyance 
 of farm stock, utensils, produce, etc. The grantor re- 
 mained in possession and continued to conduct the business 
 of the farm, but for the benefit of the grantee. The con- 
 veyance being attacked, was sustained by the court, but with 
 the expression of some doubts as to whether they were 
 not "ripping up old cases" and "removing the land- 
 marks." 
 
 1 5 Esp. 22 (1803). 
 
 2 1 Taunt. 381. 
 
 « 8 Taunt. 838; 1 Moore, 189 (1817). 
 
 37 
 
§ 27 TRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 In Wooderman v. Baldock^ the sole evidence of fraud, 
 outside of the fact of the use of the goods by the grantor, 
 was that the trustees had advertised the goods for sale as 
 the goods of the grantor; but as the judges were of opin- 
 ion that there was nothing in these circumstances inconsis- 
 tent with the trust deed, the verdict of a jury in favor of 
 the transaction was sustained. 
 
 § 26. Judicial doubts; Steward v. Liombe. — Steward 
 i;. Lombe^ was a case of a mortgage on land on which was 
 a windmill, specifically conveyed in the mortgage. Tlie 
 windmill having remained in the mortgager's possession, 
 was levied on at the instance of his execution creditor. 
 The mortgager having the right to remove the mill from the 
 land at pleasure, it was held that the mill was under these 
 circumstances a chattel. But the possession of the mort- 
 gager was held not to invalidate the mortgage as to the mill ; 
 actual change of possession was held unnecessary under the 
 circumstances of the case, even had it been more feasible ; 
 the court did not consider an actual change of possession 
 requisite in all cases of conveyance of chattels as security, 
 and expressed doubts whether such was to be considered 
 the proper doctrine to be drawn from Edwards v. Harben, 
 which was pressed upon the court as an authority for that 
 view. 
 
 § 27. Lord Tenterden's views. — Latimer v Batson^ 
 was a conveyance of household furniture, farming stock, 
 and other property, including wine, made by a sheriff on 
 execution sale. The purchaser from the sheriff put his 
 own man-servant in nominal possession of the property, 
 but left it virtually in the hands of the Duke of Marlborough, 
 the execution debtor, who was allowed to use the goods at 
 
 1 8 Taunt. 676 (1819). 
 
 2 1 Brod. & Bing. 506 (1820). 
 » 4 B. & 0. 652 (1825). 
 
 38 
 
DOCTEINK OF THE ENGLISH CASES. § 28 
 
 pleasure. The transaction was sustained by the court; the 
 case being distinguished from Woi'dallt;. Smith,^ which was 
 distinctly approved. Abbott, C. J., said: "I perfectly 
 agree that possession is to be much regarded ; but that is 
 with a view to ascertain the good or bad faith of the trans- 
 action." No reference was made by the court to the wine 
 which was included in the purchase ; a conspicuous silence, 
 which the impartial student of the law is inclined to ascribe 
 to the influence of the great name of Marlborough. 
 
 But the views of this eminent judge on the question of 
 possession alone were again unequivocally expressed, during 
 the same year, in Eastwood v. Brown. ^ In this case, a debtor 
 had sold and transferred to one of his creditors his house- 
 hold furniture, retaining the occupation and possession of 
 his house and the furniture as before ; and Abbott, Lord 
 C. J., held that this did not furnish conclusive evidence of 
 fraud, and left it to the jury to determine the question of 
 fraudulent intent. 
 
 § 28. The question of the effect of possession alone 
 settled in Martindale v. Booth ; Gdwards v. Harben dis- 
 tinguished. — In Martindale v. Booth, ^ there are evidences 
 that the judicial mind in England had at last settled down 
 upon the proposition that retention of possession alone 
 was not suflScient to invalidate a mortgage or conveyance 
 of chattels. The case was a bill of sale of furniture and 
 fixtures in a tavern, as security, with a reservation of the 
 possession and use, which, of course, under the circum- 
 stances, did not imply a power of sale or disposition, or 
 any other reservation by the grantor inconsistent with the 
 conveyance as a security. Lord Tenterden and his asso- 
 ciate judges agreed that the conveyance was valid. Lord 
 
 ' 1 Camp. 332 ; sect. 11, sttpra. 
 2 1 Eyan & M. 312 (1825). 
 ' 3 B. & Ad. 498 (1832). 
 
 39 
 
§ 28 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 Tenterden's opinion was sutastantially the same as that given 
 by him in Latimer v. Batson and Eastwood v. Brown ; all 
 the other judges discussed the preceding authorities with 
 the evident view of drawing such distinctions as to deduce 
 from them a harmonious general rule. Attention was par- 
 ticularly directed to tte circumstance that the case of 
 Edwards v. Harben had been frequently misunderstood. 
 Keference was made to the denial of Dallas, J., in Jezeph 
 V. Ingram, that Edwards v. Harben lays down any general 
 rule that want of possession alone will render a mortgage 
 of chattels fraudulent. Parke, J., for himself, referred to 
 the statement of Buller, J., in the last named case, that, 
 "if there is nothing but the absolute conveyance without 
 possession, that, in point of law, is fraudulent," as a mere 
 dictum. This plainly implies that the question of posses- 
 sion alone was not the one involved in Edwards v. Harben, 
 and that the real point in that case was whether possession, 
 with a power of disposition reserved, would be considered 
 fraudulent. It thus appears that Edwards v. Harben is 
 understood in England as an authority for the doctrine 
 of Robinson v. Elliott, namely, that the retention of pos- 
 session under such conveyances, when combined with an 
 unrestricted power of sale or disposition, is wholly incon- 
 sistent with the conveyance as a security, and is fraudulent 
 and invalid. But, on the other hand, Edwards v. Harben 
 should never have been taken as an authority for the 
 proposition that retention of possession alone will neces- 
 sarily invalidate such a conveyance. 
 
 Accordingly, in Hunter v. Corbett.^ which was a contro- 
 versy over a bill of sale of furniture in an inn, given as a 
 mortgage, the vendor remaining in possession, but without 
 any power of sale or disposition, the case was tref.ted as 
 turning on fraudulent intent; and it was said, as to the 
 
 ' 7 Up. Can. Q. B. 75 (1849). 
 40 
 
DOCTRINE OF THE ENGLISH CASES. § 29 
 
 retention of possession, ',' that has long been held not to 
 be an absolutely conclusive proof of fraud, but only to 
 furnish evidence of it." 
 
 § 29. Edwards v. Harben further explained in Mac- 
 dona V. Swiney. — That the view here taken of the case of 
 Edwards v. Harben is the correct one, and that it is a mis- 
 take to refer to that case as an authority for the doctrine 
 that retention of possession alone renders a conveyance of 
 chattels fraudulent in law, maybe further seen by reference 
 to the case of Macdona v. Swiney.^ In that case the plain- 
 tiff, having purchased at an execution sale certain goods 
 levied on as the property of his debtor, left the goods for 
 some months in the possession of the latter, when they 
 were again levied on at the instance of a creditor by a judg- 
 ment junior to the first execution, the date of the indebted- 
 ness to the junior creditor not appearing. The Court 
 of Queen's Bench declined to declare the transaction fraudu- 
 lent in law, on the authority of Edwards v. Harben. That 
 case, as well as Twyne's Case, was distinguished from the 
 one at bar by the circumstance before mentioned, that the 
 debtor remained not only in the possession, but the control 
 and disposition also of the goods. The arguments of coun- 
 sel who attacked the conveyance in Edwards v. Harben 
 were especially referred to, as indicating the drift of that 
 case ; and the absence of any j'lcs disponendi in the case at 
 bar was pointed out. The statement of BuUer, J., that his 
 brethren and himself were agreed in that case, that " unless 
 possession accompanies and follows the deed, it is void," 
 was construed to refer to nothing other than possession un- 
 der the circumstances of that case, where possession implied 
 ditsposal also. The like inference was drawn from the de- 
 cision of the Court of King's Bench in Jarman v. Woollo- 
 
 1 8 Irish Law Rep. 73 (1853). 
 
 41 
 
§ 30 FRAUDULENT MOKTGAGES OF MERCHANDISE. 
 
 ton^ and Haselinton v. Gill,^ each of which cases involved 
 and sustained an ante-nuptial settlement of a wife's stock 
 in trade, etc., which was attacked in each case by creditor* 
 of the husband, on the ground of the possession of the lat- 
 ter; Buller, J., who sat m both cases, saying in one, that 
 " possession alone is not evidence of fraud ; the transactio-n 
 must be shown to be fraudulent from other circumstances ; 
 if the possession be inconsistent with the conveyance, that 
 is evidence of fraud; " and in the other, " it is sufficient to 
 say that the husband had not the order and disposition of 
 this property with the consent of the real owner ; the trustee 
 was the legal owner." 
 
 § 30. Late English cases ; tlie question of power of 
 sale not considered. — No contrary view is disclosed in the 
 late English cases. The precise question has not since been 
 considered by the courts in any reported case, though occa- 
 sionally such facts have been presented as would have war- 
 ranted a discussion of it. Gale v. Burnell' was a case of a 
 conveyance of furniture and farming stock, given as secur- 
 ity for debt, which was attacked by an execution creditor 
 of the grantor. The deed was held valid and operative as 
 to the property on hand when it was executed, but not as to 
 after acquired property. The principal question considered 
 was, whether the deed operated as a present conveyance of 
 the property. The stipulation in it that the grantor might 
 "make use of" the property, was held equivalent to a 
 license to consume such ai'ticles as were perishable, if any ; 
 but this license was passed by as not defeating the original 
 grant, or implying any power of disposition for the benefit 
 of the grantor; so the question of a reservation to his use, 
 or of any other fraudulent aspect of the transaction, was 
 
 ' 3 Term B. 618 (1790). 
 ■' Id. 620. 
 
 « 7 Q. B. 850 (1845). 
 42 
 
DOCTEINE OF THE ENGLISH CASES. § 30 
 
 not mooted. Graham v. Chapman ^ was a conveyance by a 
 trader of all his tangible property, including his stock in 
 trade, to secure one creditor ; and it being a sweeping con- 
 veyance, the execution of it was held an act of bankruptcy, 
 which was the question at issue. The minor question of a 
 reserved power of sale, which might possibly have arisen in 
 view of the trader's retained possession and control under 
 the circumstances of the case, for several months, received 
 no attention. Upon the more general question it was said : 
 ' ' Every person must be taken to intend that which is the 
 necessary consequence of his own act ; and if a. trader make 
 a deed which necessarily has the effect of defeating or de- 
 laying his creditors, he must be taken to have made the 
 deed with that intent." And so in Spencer v. Slater,^ where 
 an insolvent trader made a general assignment for creditors, 
 to trustees who were to carry on the business, but no 
 creditors were to receive dividends who did not affirmatively 
 assent to the conveyance, this was held to hinder and delay 
 creditors, and therefore, to be fraudulent and void under 
 the common law, without reference to the rules in bank- 
 ruptcy cases. In Ex parte Games,^ where a farmer had as- 
 signed to one creditor, by way of mortgage, all his house- 
 hold furniture, " stock in trade," and crops and implements 
 on his farm, the mortgager to remain in possession until 
 demand of payment, and the mortgage to cover such goods 
 as might be "substituted in lieu" of those conveyed, it 
 was charged that this mortgage was fraudulent as to other 
 creditors under the statute of Elizabeth ; and the chief 
 judge in bankruptcy held it to be so, because it necessarily 
 hindered and delayed creditors. In the chancery division of 
 the High Court, on appeal, the contrary view was taken that 
 the transaction was merely an ordinary and lawful pref er- 
 
 1 12 C. B. (74 E. C. L.) 85 (1852). 
 
 2 L. K. 4 Q. B. D. 13 (1878). 
 
 3 L. R. 12 Ch. D. 314 (1879). 
 
 43 
 
§ 30 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 ence of a particular creditor; and without any consideration 
 of the power of sale in the mortgager as a reservation for 
 his own benefit inconsistent with the security, the point was 
 dismissed with the remark, that this provision was but a 
 mode by which the mortgagee secured the substitution of 
 new chattels in the place of old ones. The High Court 
 could not "see any fraud in that," nor did it think the 
 conveyance was in any manner a cloak for retaining a 
 benefit to the grantor, because there did not appear to be 
 any fraudulent intent in the case. Fraud in the transaction 
 was considered solely as turning on intent, and the question 
 of the operation of the power of sale, as involving a necessar- 
 ily fraudulent tendency, was not argued or considered. It 
 should be observed that the mortgagee in this case had 
 taken possession of the property before the controversy 
 arose. 
 
 In the two recent cases of Ex parte Popplewell ^ and Ex 
 parte Bolland,^ the question may perhaps have been fairly 
 involved, though the meagre report of the facts leaves this 
 doubtful. In each case the debtor had made a conveyance 
 of goods and chattels, including what is styled " stock in 
 trade." In the first named case, the debtor had been car- 
 rying on the business of manufacturing mantles, and in the 
 last case that of brewer ; and in each case he retained pos- 
 session until he became bankrupt. Such a conveyance by a 
 brewer would seem by implication to reserve to him the 
 right of selling the property ; though in the case of a man- 
 tle manufacturer, this implication would not be so clear, 
 and it might well be that no power of sale was contem- 
 plated. But the question seems not to have been raised or 
 conside^d. In each case, the trustee in liquidation applied 
 for an order declaring the conveyance void as against him, 
 but urging as the principal ground that the consideration 
 
 • 21 Ch. D. 73 (1882). ' 21 Ch. D. 543 (1882). 
 
 44 
 
DOCTRINE OF THE ENGLISH CASES. § 31 
 
 had not been truly stated therein, and making no mention 
 of any power of sale reserved to the grantor, if such there 
 were. The cases are considered in much the same manner 
 as if the contest had been between the parties themselves, 
 or as if the trustee merely stood in the shoes of the grantor 
 in the conveyance. 
 
 § 31. Late English cases ; the question not involved. — 
 
 Three cases were heard and decided in 1880, involving 
 conveyances similar in their nature, and which have been 
 sometimes supposed to present a variation of this question. 
 In National Mercantile Bank v. Hampson,^ the judges of 
 the Queen's Bench Division held that where, under a bill 
 of sale of growing crops on farming lands, the grantor is 
 allowed " to hold himself forth as having not only the pos- 
 session, but the property in the same," he has an implied 
 license to sell the crops, and a sale of wheat by him to a 
 third party passes the title, so that the grantees in such bill 
 of sale can sustain no action against the purchasers for 
 conversion of the wheat. A similar question arose in 
 Walker v. Clay,^ in the Common Pleas Division of the 
 High Court, where the grantor in a similar bill of sale, 
 covering, among other things, a " stock in trade," sold a 
 pony which was included in the conveyance, and it was 
 held that his vendee acquired title as against the grantee 
 in the bill of sale, and that the case was undistinguish- 
 able from Bank v. Hampson. These cases proceed on the 
 familiar principle that every such conveyance, though it 
 might have been in a proper case declared fraudulent as to 
 creditors, is good between the parties. The only question 
 considered in either is the proper construction of the 
 instrument, from which it appeared that the grantee had 
 licensed the act of the grantor of which he was com- 
 
 ' L. E. 5 Q. B. Div. 177 (Feb. 1880). 
 » 42 L. T. (n. s.) 369 (Mar. 1880). 
 
 45 
 
§ 31 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 plaining. But in Taylor v. McKeand,^ a careful construc- 
 tion of the bill of sale led to a different conclusion. Here 
 the grantor, retaining possession, had the privilege of sell- 
 ing the goods of his stock in trade " in the ordinary way 
 of business." He having, however, sold part of the goods 
 in a manner which the jury described as "fraudulently, 
 and not in the ordinary course of his business" (that is, 
 fraudulently as to the grantee in the bill), it was held that 
 the purchaser from the grantof acquired no title as against 
 the grantee, though he made his purchase in good faith 
 and without knowledge of the fraud. This decision was 
 made without conflicting with the case of Bank v. Hampson, 
 from which it is plainly distinguishable. Payne w./Fern''* 
 is a similar case to Taylor v. McKeand, and is decided 
 similarly. As none of these cases exhibited the element 
 of a complaint by a creditor of the grantor, the question 
 of fraud upon creditors was not involved in any of them ; 
 and they all stand in perfect harmony with Edwards v. 
 Harben and Eobinson v. Elliott, so far as concerns that 
 question. 
 
 Somewhat similar to Bank v. Hampson was the later case 
 of Ex parte AUard,* in which the trustees under a compo- 
 sition in bankruptcy had allowed the debtor to go on with 
 the business, and his transfer of certain book debts to a 
 third party as security, being questioned, was sustained as 
 • being within the implied authority conferred by the trus- 
 tees. 
 
 In Ex parte Symmons,* the conveyance had reserved a 
 power of sale to the grantor, but before his bankruptcy he 
 had delivered the remaining goods to his creditor in satis- 
 faction of the debt, and this was held to give him a valid 
 
 1 L. E. 5 C. P. Div. 858 (May, 1880). 
 = L. K. 6 Q. B. Div. 620 (Feb. 1881). 
 » 16 Ch. Div. 505 (1881). 
 • 14 Ch. Div. 693. 
 46 
 
DOCTRINE OF THE ENGLISH CASES. § 32 
 
 title to them.^ In Ex parte Bayly ,^ where the same ele- 
 ment existed, the creditor had before the bankruptcy 
 taken possession of the remaining goods, claiming them 
 under his conveyance, and it was held that an injunction 
 against his exercise of ownership, ponding further pro- 
 ceedings, could not properly be granted. The principle 
 under consideration was not, therefore, involved in either 
 of these cases. Nor did it enter into Crawcour v. Salter,' 
 the decision in which merely sustained a conditional transfer, 
 or letting to hire, of hotel furniture, as retaining title in the 
 vendor. 
 
 § 32. Tlie doctrine of Twyne's Case superseded in 
 England. — The desuetude into which this once vigorous 
 doctrine of Twyne's Case has fallen in England, is doubt- 
 less to be attributed to the fact that it has been so supple- 
 mented by the English statutes as to become superseded. 
 But for this fact, the citations made from the English cases 
 show that this doctrine might well have remained as still an 
 active force in the English jurisprudence. But the contin- 
 ued and general operation of their established bankrupt sys- 
 tem draws into the bankruptcy courts all cases involving 
 this question, in which insolvency has occurred and has been 
 declared ; and the bankrupt laws render void all such con- 
 veyances where the goods remain in the " order and dispo- 
 sition " of the bankrupt; which is, pro ianto, a statutory 
 adoption of the precise principle. Since 1854, nearly all 
 such cases, not within the rules pertaining to bankruptcy, 
 fall under the statute of that year, or the subsequent stat- 
 ute of 1878, which require the registration of all bills of 
 sale and conveyances of chattels within twenty-one days 
 
 1 See sect. 144, post, for a reference to the American cases, in which a formal 
 delivery of goods, under similar circumstances, was advisedly sustained. 
 » 15 Ch. Div. 223. 
 • 18 Ch. Dlv. 30. 
 
 47 
 
§ 32 FKAUDULENT, MORTGAGES OF MERCHANDISE. 
 
 after their execution ; in default of which, the conveyance 
 is to be void as to all goods found thereafter in the " appar 
 ent possession ' ' of the grantor. So many of the cases 
 which arise, therefore, fall under these statutory provisions, 
 that it is of rare occurrence that a case is presented in Eng- 
 land, depending for its decision upon the ancient common-laM 
 doctrine. It is possible that a case may arise, where a trader 
 not declared a bankrupt has mortgaged his goods by a regis- 
 tered conveyance, and he continuing in " apparent posses- 
 sion," and in the disposition of the goods by sale, the 
 question of inherent fraud would be presented, to be deter- 
 mined, not by an appeal to the registration acts, but by a 
 reference to the rules of the common law, irrespective as well 
 of these acts as of the bankrupt statutes. The English courts 
 investigate even registered conveyances to see if they are 
 fraudulent; ^ and they declare the fraud when ascertained.^ 
 The object of the registration acts not being to make good 
 a conveyance fraudulent as to creditors, even "the most 
 fraudulent deed will be well registered," if the provisions 
 of the act are complied with." But the indications are, 
 from such cases as Gale v. Burnell and Ex parte Games, 
 that the question would not now be considered in England 
 as of vital importance. 
 
 » Darvill v. Terry, 6 H. & N. 812 (1861) ; Mercer v. Peterson, L. B. 2 Eich. 
 304 (1867). 
 
 2 Oriental Banking Co. v. Coleman, 3 Giff. 11 (1861). 
 ' Darvill v. Terry, aupra. See May on Fraud. Conv. 120. 
 48 
 
DOCTRINE OF THE AMERICAN MAJORITY. 
 
 CHAPTEE III. 
 
 THE DOCTRINE OF THE AMERICAN MAJORITY. 
 
 Section 33. The Doctrine of Twyne's Case vital in America. 
 34. Tlie doctrine first announced in Virginia. 
 25. The doctrine adhered to in Virginia. 
 
 36. Distinction as to the purpose of the reserved power; agency 
 
 for the trustee. 
 
 37. The reserved power of sale ascertained by implication 
 
 38. Early New York cases. 
 
 39. The leading case of Wood v. Lowry; views of Bronson, J. 
 
 40. Griswold v. Sheldon explicit and not doubtful upon this 
 
 question. 
 
 41. The doctrine established in New York. 
 
 42. Frequent applications of It in practice. 
 
 43. The doctrine advisedly adhered to and clearly explained. 
 
 44. The doctrine received with favor in New Hampshire. 
 
 45. The doctrine adopted and applied. 
 
 46. Distinction in case of agency for mortgagee. 
 
 47. Collins v. Myers; the doctrine illustrated in Ohio. 
 
 48. The doctrine adhered to. 
 
 49. Distinction in case of agency for mortgagee. 
 
 50. The doctrine adopted in Minnesota; registration of instru- 
 
 ment immaterial. 
 
 51. Transaction not validated by act of mortgagee in taking pos- 
 
 session of goods. 
 
 52. The doctrine applied in Wisconsin; intent of parties imma- 
 
 teri il. 
 
 53. Distinction In case of agency for mortgagee; recent cases. 
 
 54. The doctrine applied in Illinois; registration of instrument 
 
 immaterial. 
 
 65. The doctrine adhered to. 
 
 66. The doctrine as applied in Missouri. 
 
 57. The doctrine adhered to; intent of parties immaterial. 
 
 58. Limitations upon the application of the rule. 
 69. Early cases in Tennessee ; conflicting decisions. 
 
 60. The question settled; Bank v. Ebbert and later cases. 
 
 61. Fraudulent tendency a vicious feature. 
 
 62. The doctrine advisedly adopted in Mississippi. 
 
 4 49 
 
§ 33 FRAUDULENT MOETGAGES OF MEKCHANDISE. 
 
 Section 63. Earlier recognitions of the propriety of the rule. 
 
 64. The doctrine established in Mississippi. 
 
 65. The doctrine well settled in Colorado. 
 
 66. Oregon adopts the doctrine ; registration of instrument im- 
 
 material. 
 
 67. Reserved power of sale proven by implication in West Vir- 
 
 ginia. 
 
 68. The doctrine enforced In the United States Circuit and Dis- 
 
 trict courts. 
 
 69. The fraud illustrated in the opinions of the courts. 
 
 70. Other cases In the lower United States courts; the doc- 
 
 trine recognized. 
 
 71. An earlier decision by the Supreme Court. 
 
 72. Antagonistic cases in the United States courts. 
 
 73. Mitchell ». Winslow examined. 
 
 74. The state of the law in Indiana prior to Robinson v. Elliott. 
 
 75. The doctrine of Robinson v. Elliott adopted in Indiana. 
 
 76. Doubtful cases in Indiana. 
 
 § 33. The doctrine of Twyne's Case vital in America. — 
 
 In America we have not, as in England, a uniform system, 
 under which a common-law principle may be completely 
 supplanted by statutes, so as to lose its vital force and 
 cease to influence the course and development of juris- 
 prudence throughout the whole land. Not only have we a 
 complicated system, under which various independent tri- 
 bunals may essay to administer much of the common law, 
 each in its own way, so that even an established bankrupt 
 system could not wholly deprive the doctrine under discus- 
 sion of its common-law interest, but it seems doubtful 
 whether our attempts at a bankrupt system are ever to 
 rise above the level of experiments. These are reasons 
 which have given the common-law questions growing out 
 of Twyne's Case a practical interest in America, exceeding 
 that which they have had or can acquire in the mother 
 country. 
 
 The American phases of the doctrine will be best illus- 
 trated by a careful review of the leading cases decided in 
 each of the States which uphold it ; and the best exposition 
 50 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 34 
 
 of the doctrine will doubtless be found in the language 
 of the judges themselves. 
 
 Virginia. 
 
 § 34. The doctrine first announced in Yirginisc. — In 
 
 this review of the American cases, those from Virginia 
 will be first examined, for the double reason that the doc- 
 trine was first applied in that State, and that the opinion 
 in which it was announced has not since been excelled in 
 the terseness and perspicuity with which the fraudulent 
 tendencies, inherent in these transactions, are exposed. 
 This is the case of Lang v. Lee, decided in 1825.^ 
 
 The deed in trust conveyed a stock of goods, stipulating 
 that " the goods are to remain in the possession of the Laid 
 Lee, and he is empowered to make sales of them, always 
 accounting with the trustee herein named, if required to do 
 so." Carr, J., used the following language : ^ 
 
 " Now, I ask, what possible security could the deed fur- 
 nish, encumbered with a stipulation like this? Is it not 
 completely a felo de se? A security is taken on goods, 
 and they are left in the possession of the debtor for ten 
 months, with a power to sell and dispose of them as he 
 may think proper; no check whatever; for the clause 
 about accounting relates only to the 'money for which he 
 has sold the goods. Does not this resolve the whole matter 
 into personal security? And is the debtor more bound to 
 account for the money than he was before for the debt ? 
 * * * Suppose he had sold every article in the store the 
 next day, could Lang call back the goods ? ' Certainly not, 
 for he had given Lee express power to sell. As a security, 
 then, this deed was naught. What other possible purpose 
 could it have than to delay, hinder, or defraud the cred- 
 itors of Lee? The reason of Edwards v. Harben, Ham- 
 ilton V. Eussell, etc., applies strongly to this case." 
 
 1 3 Band. 410. « p. 423. 
 
 51 
 
§ 34 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 Again,^ " All the cases concur in the position, that if 
 the power retained enable the grantor to defeat the pro- 
 visions in the deed, it is null and void; and this, upon 
 the known principles of the common law, of which the 
 statutes on the subject of fraud are merely declaratory. 
 Now, can we imagine a power more completely adequate 
 to the destruction of the avowed purpose of the deed 
 than that retained by the grantor in this case? The 
 goods, the identical articles of merchandise, constituted 
 the sole security provided by the deed for the pay- 
 ment of the debts; and yet the debtor, while affecting 
 to devote the goods to that purpose, retains the pos- 
 session, the use, the power of selling every article to whom, 
 in what manner, and on what terms, he pleases. He is to 
 account, though, if called on. But is this more than a 
 personal accountability ? The goods are gone. You can 
 not follow them. The money received for them has no ear- 
 mark. You cannot follow it though the grantor pay it 
 away the moment after he receives it, in satisfaction of his 
 own debt. What are you then, after all, but a general 
 creditor? To this purpose the case of Eyall v. RoUe'is 
 very strong. That, it is tirue, was a case under the bank- 
 rupt acts, and they are particularly strong and high-toned 
 on these subjects, Especially 21 James I. Yet the quota- 
 tions I shall make do not seem so much founded on them as 
 deduced from the principles of the common law." He 
 then quotes from the language of Burnet, J., and Lord 
 Hardwicke ; and says in a note to the same case : "I would 
 not be understood to impugn the doctrine so well estab- 
 lished, and applicable to the common case of mortgages 
 and deeds of trust, that possession is no evidence of fraud, 
 where it follows the deed, and is consistent with its purposes. 
 My remarks, indeed, have been made to little purpose, if 
 
 ' p. 425. > 1 Atk. 165. 
 
 52 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 35 
 
 they have not shown the wide difference between such cases 
 and that at bar." 
 
 § 35. The doctrine adhered to in Virginia. — Janney v. 
 Barnes * was a case where an entire stock of goods in trade 
 was conveyed to secure all the debts of the grantors, and 
 the latter were to remain in possession for the purpose of 
 converting the property into money and paying the debts, 
 but this only as agents of the grantee. The conveyance 
 was sustained as a valid security. The failure of the ap- 
 pellate court to give in an opinion the reasons for their 
 judgment detracts from the value of the case, and leaves the 
 real basis of the decision indeterminate. But it has been 
 treated as resting on the question of the grantor's agency 
 for the grantee, in the later case of Sheppards v. Turpin,* 
 where the opinion of Daniel, J., recognizes it as not con- 
 flicting with or detracting from the authority of Lang v. 
 Lee, " an authority which stands unshaken by any decision 
 of this court." His opinion proceeds as follows : "It (the 
 deed under examination) conveys the whole of his estate, 
 real and personal, including all Ms choses in action, avow- 
 edly with the purpose of securing all his creditors ; yet re- 
 serves to the debtor the right to retain possession of the 
 whole subject-matter conveyed, as against all having debts 
 against him at the date of the deed, for three years ; also 
 the right to carry on his business of a brickmaker to any 
 extent that he and his trustees may think proper; and em- 
 powers ham to borrow from the trustees, and the trustees to 
 advance him, any sums they in their judgment shall deem 
 sufficient for the prosecution of his business ; authorizes the 
 trustees to become his securities in all contracts for the hire 
 of laborers he may make ; and if, at any time after such 
 loans or advancements are made, the trustees shall deem his 
 conduct injudicious or unthrifty, they have full power to 
 
 1 11 Leigh, 100 (1840). " 3 Gratt. 357 (1847). 
 
 53 
 
§ 35 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 sell the whole of the trust property, if necessary, to pay 
 such loans and advancements, and discharge those contracts 
 for the laborers , to which they may have become sureties • All 
 the creditors who do not assent to the terms of the deed 
 on or before the 1st day of April ensuing its date, are to be 
 postponed to those who do ; and power is given to a major- 
 ity in number of those who do assent, to extend the time of 
 closing the deed to a period undefined, and unlimited except 
 by their own discretion. No power is expressly retained to 
 the grantor to sell his stock in trade on hand, which is em- 
 braced in the deed, but it is necessarily implied in the right 
 reserved to carry on his business during the three years. 
 May we not properly ask, as Judge Carr did, in the case of 
 Lang V. Lee : ' Can we imagine powers more completely 
 adequate to the destruction of the avowed purposes of the 
 deed than those retained by the grantor in this case ? ' The 
 debtor, whilst professing to dedicate his whole property to 
 the payment of his debts then due, reserves to himself a 
 power by which he may, without any violation whatever of 
 the express stipulations of the deed, divert the whole of the 
 property to uses and purposes wholly foreign to the leading 
 object avowed." 
 
 In Spence v. Bagwell ^ a deed was held bad which gave 
 the grantor possession from its date, November 1, 1841, to 
 the maturity of the debt secured, March 1, 1843, with power 
 during that period to sell and dispose of the property con- 
 veyed, consisting of land, slaves, bacon, tobacco, and a 
 tobacco factory with its fixtures, and to give and make title 
 thereto, and to collect proceeds of sales; but on condition 
 that he pay over the moneys collected to the trustee named 
 in the deed. Though here, as in a former case, we have no 
 written opinion of the court, yet it may be observed that 
 while counsel defending the deed demurred to Lang v. Lee 
 as an authority, that case and Sheppards v. Turpin were 
 
 • 6 Gratt. 444 (1849). 
 54 
 
DOCTEINE OF THE AMEBICAN MAJOKITY. § 37 
 
 pressed upon the attention of the court by the counsel at^ 
 tacking the deed ; so the decision may be taken as an ad- 
 herence to the doctrine of those cases. 
 
 It is clear that that doctrine was already well established, 
 from the later case of Addington v. Etheridge.^ In this 
 case, the trust deed provided that Harrison, the grantor, 
 should keep possession of and sell the stock of goods in the 
 usual line of his trade, and occupy the store, until default 
 in the payment of any of the debts secured, or until the 
 trustee should be requested by any of the creditors to close 
 the deed by a sale. Daniel, J., held that " this power is 
 one incompatible with the avowed purpose of the grantor to 
 furnish an indemnity to his creditors ; is equivalent, in its 
 effects, to a power of revocation ; and fully adequate to 
 the defeat of the provisions of the deed. And, therefore, 
 that this deed is, according to the principles adjudicated 
 by this court in the cases of Lang v. Lee and Sheppards v. 
 Turpin, fraudulent ^erse, nuU and void." 
 
 § 36. Distiuction as to the purpose of the reserved 
 power; agency for the trustee. — The last-named case, 
 and the two others which it sustained, are recognized as au- 
 thorities in Marks v. Hill,'' where the conveyance to a trustee 
 of a stock of goods in trade was sustained solely on the 
 ground that the retention of the grantor as a salesman of 
 the goods was but as an agent of the trustee ; Lang v. Lee, 
 Sheppards v. Turpin, and Addington v. Etheridge, being 
 especially distinguished by reason of the damaging fact of 
 the potential control reserved to the grantor over the goods 
 conveyed. This case enunciates clearly the rule which, in 
 fact, governed Janney v. Barnes.- 
 
 § 37. The reserved power of sale ascertained by im- 
 plication. — Still later is the case of Perry v. Shenandoah 
 
 » 12 Gratt. 436 (1855). ' 15 Gratt 400 (1859). 
 
 55 
 
§ 37 FRAUDULENT MOETGAGBS OF MERCHANDISE. 
 
 Nat. Bank,^ in which the grantor in a trust deed conveyed, 
 with other property, "all of his stock in trade, with all 
 accretions to and replenishments of said stock," and con- 
 tinued in possession and in the conduct of his business as 
 formerly. The court adhered to the doctrine of Lang v. 
 Lee and the other cases above cited, furnishing the follow- 
 ing reasons for its ruling. " Now it is true that in the deed 
 under consideration, there is no express provision that the 
 grantor should retain possession of the goods (the stock in 
 trade) and carry on the business, selling and receiving the 
 proceeds as before ; but the power to do so, though not 
 conferred in express terms, arises by clear and irresistible 
 implication. The trustee, by the terms of the deed, can 
 only sell « upon the written direction of either of the par- 
 ties secured ; ' and it is provided that ' the trustee shall 
 not be held responsible for any of the property conveyed 
 until he is ordered to sell the same.' If the written direc- 
 tion is never given, the property is never to be sold by the 
 trustee. The trustee has no control of it, and no account- 
 ability with respect to it. Where, then, does the posses- 
 sion remain? Who alone has the control over, and 
 disposition of, these goods ? Plainly, the grantor, until a 
 sale is directed in writing by one of the parties' secured. 
 Under this deed the grantor might, for an unlimited time, 
 go on and sell, and buy, and conduct his trade just as be- 
 fore, without accounting to the trustee or any one else, if 
 the parties to the deed did not choose to give written direc- 
 tions to the trustee to sell. By clear implication from the 
 face of the deed, this power is conferred upon the grantor. 
 And the record shows that he acted under this implied 
 authority /or two years; and but for the action of the ap- 
 pellants in levying their execution, might have gone on for 
 years longer. Up to the date of the levy of the execution, 
 the grantor carried on his business just as he did before the 
 
 » 27 Gratt. 755 (1876). 
 66 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 38 
 
 execution of the deed, aelling the goods, receiving the 
 money, buying other goods, rendering no account, but con- 
 ducting his business as iS no deed had been executed. 
 Such a power as this, whether it arises from express provi- 
 sions of the deed, or from clear implication, is entirely in- 
 consistent with the avowed purposes of the trust, and, upon 
 the authority of the cases above cited, must be declared 
 fraudulent per se, and therefore null and void." 
 
 New York. 
 
 § 38. Early New York cases^ — The cases in New York 
 deserve especial attention, on account not only of their 
 number, but also of the numerous criticisms that have 
 been made upon them. Examples of these are seen in the 
 quotations above made from the opinion in Brett v. Carter.^ 
 In arguing Robinson v. Elliott, counsel characterized the 
 New York cases as " vacillating and unsatisfactory." But 
 an examination of the leading cases from this State dis- 
 closes far more harmony. than discord. 
 
 Diwer v. McLaughlin, the earliest case, arose in the Su- 
 preme Court of the state in May, 1829.^ One Stephens, 
 to secure a note for $800, due in four months from its date, 
 gave to McL. a mortgage on his goods and chattels in the 
 house occupied by him, including, among others, his stock 
 of goods in his grocery store. The mortgage provided that 
 he was to remain in quiet and peaceable possession of the 
 goods, and in the full, free enjoyment of the same. It 
 appeared in evidence that the mortgagee had never taken 
 possession of the property, but had allowed S. to continue 
 to conduct business therewith until maturity of the debt, 
 and thereafter indefinitely, on account of misfortunes of 
 S. Three years after the mortgage was executed, Diwer 
 obtained a judgment against S., and levied on the stock 
 
 1 Ante, sect. 4. » 2 Wend. 596 ; 20 Am. Deo. 655. 
 
 57 
 
§ 39 FKAUDULENT IHOBTGAGBS OF MEECHAOTJISB • 
 
 of goods then in the store, being nominally the same stock 
 mortgaged, but really different goods. 
 
 The court decided, among other things, that the retention 
 of possession and the actual selling of goods by the debtor, 
 without accounting to the creditor, rendered the mortgage 
 fraudulent in law, and void as to the fixtures and standing 
 casks no less than as to the goods. It was held that on a 
 conceded or settled state of the facts, fraud is a question 
 of law. It was said : " To sanction a transaction like this 
 would open a door to frauds innumerable, and to an extent 
 incalculable." 
 
 McLachlan v. Wright ^ resembled the preceding case, the 
 stipulations being similar, and the property conveyed being 
 a brewer's stock of beer, malt and hops, with utensils, 
 furniture, etc. The debtor remained in charge, and sold 
 goods without accounting to his creditor, or being required 
 to do so. The verdict of a jury that this transaction was 
 fraudulent was sustained, as a matter of law, on the ground 
 that the debtor not only retained possession of the prop- 
 erty, '* hut used and disposed of it as his own." 
 
 § 39. The leading case of Wood v. Lowry; views of 
 Brouson, J. — Wood v. Lowry^ occupies a leading posi- 
 tion on this question. The debtor, a merchant, remained 
 in possession, and "proceeded to sell the goods in the 
 usual course of business of a country merchant, and in 
 other respects used them as his own." The jury was 
 instructed that if the effect of this arrangement would be 
 " to hinder, delay, and defraud creditors, they were author- 
 ized to infer, and ought to infer, that such was his intent." 
 Bronson, J., pronouncing the opinion of tbe court, said: 
 " Kellogg was not the agent or servant of the plaintiffs to 
 sell the goods and account to them for the proceeds, but 
 was avowedly in business for himself. He had the posses- 
 
 1 3 Wend. 348 (1829). « 17 Wend. 492 (1887). 
 
 58 
 
DOCTEINE OF THE AMERICAN MAJORITY. § 39 
 
 sion of the property, with full authority, by the express 
 assent of the plaintiffs, to sell and dispose of it at his 
 pleasure, and to deal with it in all respects as other mer- 
 chants did with their merchandise. It is true that Kellogg 
 said he would remit to the plaintiffs the avails of such 
 property as he should sell before the 1st of June ; but 
 this was mere matter of confidence between the parties ; it 
 was no part of the contract under which plaintiffs make 
 title. The property was not left with Kellogg to be kept 
 until the debt was paid or the plaintiffs should call for it, 
 but he had it for the purpose of trading with it, and making 
 profits from the sale of it. When sold, the fruits were his 
 own, except that, like every other debtor he was under an 
 obligation to satisfy the demands of his own creditors. He 
 treated the property as his own. It is impossible to say 
 that the plaintiffs had any legal claim to it as against the 
 creditors of Kellogg or purchasers under him." " Instead 
 of leaving the matter to the jury, as a question of fact for 
 their determination, the judge would have been well war- 
 ranted in instructing them that the transaction was fraudu- 
 lent and void in law, and that the defendants were entitled 
 to a verdict in their favor." 
 
 The question was mooted again, though it did not fairly 
 arise and was not decided, in Stoddard v. Butler.^ This was 
 a case of an assignment of a stock in trade by way of 
 mortgage, the assignor being left in possession, to sell ag 
 agent only, for the benefit of the grantees. Chancellor 
 Walworth's decision, holding this assignment fraudulent 
 and void, was reported sub nom. Butler v. Stoddard.^ Upon 
 appeal, this decree was aflirm^ed in the Court of Appeals 
 by a divided court. Though no principle was thus settled, 
 yet the full and exhaustive opinions of several of the sena- 
 tors on both sides are interesting and valuable contributions 
 to the literature of this subject. 
 
 1 20 "Wend. 507. ' 7 Paige, 163. 
 
 59 
 
§ 40 FRAUDULENT MORTGAGES OF BIERCHANDI8E. 
 
 The decision of "Wood v. Lowry corrected the aberra- 
 tion induced by the contrary case of Levy v. Welsh ,^ in 
 which Vice-Chancellor McCoun held a mortgage of a cer- 
 tain stock of goods, with all the grantor might acquire, to 
 be only prima facie fraudulent, and open to explanation. 
 Smith V. Acker* cannot be considered a discordant case. 
 There it was not perishable or trading property, but a 
 printing press, that was mortgaged. Though the mort- 
 gager was to remain in "the full and free enjoyment 
 of it," this could scarcely intend a sale of the press. The 
 question of fraudulent intent in such a case would prop- 
 erly be submitted to a jury. 
 
 § 40, Griswold v. Sheldon explicit and not doubtful 
 upon this question. — In Griswold v. Sheldon,* which has 
 sometimes been considered a doubtful case, the eight judges 
 of the Court of Appeals were, indeed, divided as to the 
 reasons for their decision, though concurring as to the re- 
 sult. But this difference of opinion, so far from sufficing 
 to weaken the authority of "Wood v. Lowry, did not reach 
 the question of a reserved power of sale. So far as the 
 judges differed in any respect upon this subject, their dif- 
 ference referred merely to an incidental feature of it, 
 namely : the proper construction of the instrument before 
 the court, and did not involve the main question in any re- 
 spect. Bronson, C. J., who had delivered the opinion in 
 the former case, drew from the language of the mortgage 
 in this case the plain implication that the mortgager was to 
 continue business with the goods as before ; upon which he 
 would have adjudged the transaction fraudulent, without the 
 necessity of leaving any question of fact to the jury ; and 
 in this view he had the concurrence of three judges, one of 
 whom (McCoun,) was the Vice Chancellor who had decided 
 
 » 2 Edw. Ch. 438 (1835). ' 23 Wend. 658. 
 
 » 4 N. Y. 581 (April, 1851). 
 60 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 41 
 
 Levy V. Welsk. The other four judges insisted that the 
 language of the mortgage did not warrant such implication, 
 and, therefore, declined to entertain it; but admitted that 
 if such were the proper construction of the instrument, it 
 would be void under the authority of Wood v. Lowry. 
 Thus, though they were agreed as to the law on the point 
 now under consideration, there was no adjudication upon it 
 by the court, because they disagreed as to that primary 
 matter ; and the case was decided on other grounds. The 
 criticism made in Brett v. Carter^ is, therefore, inaccurate, 
 that the court decided by " a bench equally divided in opin- 
 ion," that the mortgage was "void on its face as mere 
 matter of law." As the difference of opinion in this case 
 had no reference to the rule of substantive law, Griswold 
 V. Sheldon cannot be properly cited, either as an authority 
 opposed to the doctrine of Eobinson v. Elliott, or as weak- 
 ening the support to that doctrine found in the other New 
 York cases. 
 
 § 41. The doctrine established in New York. — Edgell 
 V. Hart soon followed. It was decided in the Supreme 
 Court in June, 1851,^ without reference to Griswold v. 
 Sheldon. The decision of the Court of Appeals in 1853* 
 settled the question which was supposed to have been left 
 doubtful in Griswold v. Sheldon. The license to sell in this 
 case was inferred from a written schedule attached to the 
 instrument. Denio, C. J., held, with the concurrence of 
 a majority of the court, that " the existence of such a pro- 
 vision, out of the mortgage or in it, would invalidate it as 
 matter of law, and that, where the facts are undisputed, the 
 court should so declare." 
 
 In 1859 was presented the case of Gardner v. McEwen,* 
 in which no retreat is manifest from the position taken in 
 
 1 2 Low. 458. • 9 N. T. 213. 
 
 » 13 Barb. 380. * 19 N. Y. 123. 
 
 61 
 
§ 41 FRAUDULENT MOETGAGES OF MERCHANDISE. 
 
 Edgell V. Hart. Here the agreement to allow sales in course 
 of trade did not appear on the face of the mortgage, nor 
 was it proved. Denio, C. J., adhering to the doctrine of 
 the last named case, held, that while the facts proved «' made 
 a pretty strong case for the jury," still it was one for them- 
 selves to determine. It is plain that here the question of 
 doubt was as to the weight of proof and the facts proved. If 
 the fatal fact should be finally "admitted or ascertained," 
 the rule in Edgell v. Hart would apply, of fraud in law. It 
 would seem that, upon clear proof, the court might direct a 
 verdict of fraud in those States where such directions are 
 allowed when the evidence is clear ; substantially as was 
 done in Paget v. Perchard by Lord Kenyon. This is done 
 in New York.^ 
 
 The two later cases of Mittnacht v. Kelly ^ and Russell v. 
 Winne ^ present the question in both phases of the facts as 
 to the reservation of a power of sale. In the former case 
 the reservation appeared on the face of the mortgage; in 
 the latter it was shown by facts aliunde. In both cases the 
 mortgage was ruled to be fraudulent in law, following 
 Edgell V. Hart and Wood v. Lowry. 
 
 In Mittnacht v. Kelly, Parker, J. , said : ' ' The mortgaging 
 the whole stock in trade, with the increase and decrease 
 thereof, and the providing for the continued possession of 
 the mortgager, can have no other meaning than that the 
 mortgagee should all the time retain a lien on the whole 
 stock, by way of mortgage, the mortgager making pur- 
 chases from time to time, and selling off in the ordinary 
 manner, the intent being not to create an absolute lien on 
 any property, but a fluctuating one, which should open to 
 release that which should be sold, and take in what should 
 be newly purchased. This is just such an arrangement as 
 was held in Edgell v. Hart to render the mortgage void. 
 
 > See post, sect. 42. 2 3 Keyes, 407 (1867). ' 87 N. Y. 591 (1868). 
 62 
 
DOCTKINE OF THE AMERICAN MAJORITY. § 41 
 
 The case cannot be distinguished from that, and the law, as 
 propounded in that case, must be held applicable to this." ^ 
 
 And in Eussell v. Winne, Grover, J., said : " The ques- 
 tion is whether an agreement by the mortgagee made with 
 the mortgager that the latter may sell, for his own benefit 
 and as his own, portions of the property covered by the 
 mortgage, renders the mortgage fraudulent and void as to 
 such portions. It would seem that the bare statement of 
 the proposition would be sufficient to warrant an affirma- 
 tive answer. 
 
 "If there is an agreement by the mortgagee that the 
 mortgager may sell or dispose of any of the property for 
 his own benefit, it is established conclusively that the mort- 
 gage was given for some purpose other than that of secur- 
 ing a debt to the mortgagee, or of giving him any real 
 interest in such property. It is evident that, as to such 
 property, the mortgagee not having any real estate therein, 
 such real interest remains in the mortgager. Why, then, 
 is the mortgage given upon such property ? Evidently, the 
 better to enable the mortgager to enjoy the benefit thereof, 
 at the expense of creditors. Were there no creditors of 
 the mortgager, there would be no object in giving or taking 
 mortgages accompanied with such an agreement. It is, I 
 think, clear that such an agreement shows that the mort- 
 gage was not made in good faith, and without a design to 
 hinder creditors. There is no question of intention to be 
 submitted to a jury. It already appears that, as to such 
 property, the mortgage was not designed by the parties as 
 an operative instrument between them ; and its only opera- 
 tion must be to the prejudice of, others. The court should, 
 as to such property, pronounce it void, for the reason that 
 the evidence conclusively shows it fraudulent." 
 
 Ford V. Williams,^ Conkling v. Shelly,' and Miller v. 
 
 » p. 408. ' 24 N. Y. 359. ' 28 N. Y. 360. 
 
 63 
 
§ 41 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 Lockwood^ cannot be regarded as exceptional cases. In 
 these cases it was a part of the agreement for sales by the 
 mortgager that he should remit the proceeds to the mort- 
 gagee, which was held sufficient to sustain the arrangement, 
 though not actually carried out by the mortgager. In the 
 latter case, however. Potter, J., dissented on the ground 
 that the case really fell within the rule of Wood v. Lowry 
 and Edgell v. Hart, so that there was no certain security. 
 
 Nor is it clear that the late case of Yates v. Olmsted ^ is 
 be regarded as an exceptional case. The Supreme Court* 
 followed the cases above referred to, and concluded that it 
 was intended in this case to allow sales by the mortgager in 
 due course of trade, although the referee had found that the 
 mortgagee had made no such agreement, and did not know 
 that such sales were made. The dissenting opinion* states 
 that the mortgagee was not in the store during the existence 
 of the mortgage, and relies on this fact as distinguishing the 
 case. The Court of Appeals put their decision sustaining 
 the mortgage upon the finding of the referee, as a determi- 
 nation of the facts, treating it as of equal weight with the 
 verdict of a jury; from which it resulted that no agree- 
 ment for sales was made, and no fraudulent intent existed. 
 
 This is the only case, if this be one, showing any sub- 
 stantial deflection from the rule established in Wood v. 
 Lowry and Edgell v. Hart, and which was succinctly stated 
 as follows in Eussell v. Winner " It may, therefore, be re- 
 garded as settled that an agreement between mortgager and 
 mortgagee, that the former may dispose of the mortgaged 
 property to his own use, renders the mortgage fraudulent 
 as to creditors, whether the agreement be contained in the 
 mortgage or not." In Frost v. Warren," the majority of 
 the court sustained the verdict of the jury in favor of the 
 conveyance, in view of the slight and unsatisfactory char- 
 
 >32N. T.293. ' 65 Barb. 462. 
 
 » 66 N. Y. 632. 6 42 n. r. 204. 
 
 » 65 Barb. 43. 
 64 
 
DOCTRINE OP THE AMERICAN MAJOKITY. § 43 
 
 acter of the evidence, while still recognizing the principle of 
 law above stated. 
 
 An exhaustive statement of all the New York cases has 
 not been attempted, but suflScient citations have been made 
 to show a clear and lively understanding, in the New York 
 courts, of the legal fraud underlying all such so-called 
 mortgages. 
 
 § 42. Frequent applications of the doctrine in prac- 
 tice. — This doctrine has been frequently applied by the 
 inferior courts in New York, as the well settled law of the 
 State ; ^ even to the extent of directing a verdict or order- 
 ing a non-suit, where the facts are plain and well-estab- 
 lished,^ as is done in other cases involving fraud;* there 
 being in such a case no question to be submitted to a jury.* 
 It may be noted also, as a different application of the same 
 principle, that a conditional sale, reserving title, though 
 ordinarily sustained as valid, will be deemed fraudulent and 
 void, if the grantee is, pending the maturity of the contract, 
 allowed to dispose of the goods at his own discretion.® 
 
 § 43. The doctrine advisedly adhered to and clearly 
 explained. — This line of cases is well supplemented by the 
 recent decision in Southard v. Benner,* which eliminates all 
 that has been heretofore criticised as " vacillating and un- 
 satisfactory " in the law of this State on the subject, and 
 
 ' Delaware v. Ensign, 21 Barb. 85 ; Maraton v. Vultee, 8 Bosw. 129 ; Car- 
 penter V. Simmons, 1 Bob. 360; National Bank v. O'Brien, 6 Hun, 231; 
 Butcher v. Swartwood, 15 Id. 31 ; City Bank v. Westbury, 16 Id, 458 ; Bain- 
 bridge V. Kichmond, 17 Id. 391 ; Spies v. Boyd, 1 B. D. Smith, 445 ; Ball v. 
 Slafter, 26 Hun, 353 ; Smith v. Cooper, 27 Id. 565. 
 
 2 Dodds V. Johnson, 3 Thomp. & C. 215. 
 
 ' Carnes v. Piatt, 1 Sweeney, 147. 
 
 * Marston v. Vultee, supra. 
 
 *■ Ludden v. Hazen, SI Barb. 650 ; Bonesteel v. Flack, 41 Barb. 485 ; Pow- 
 ell V. Preston, 1 Hun, 613. The same rule is adopted in Connecticut, see 
 post, sect. 79 ; and approved in Tennessee, see post, sect. 61. 
 
 6 72 N. T. 424 (1878). 
 
 5 65 
 
§ 43 FRAUDULENT MOETGAGES Or MERCHANDISE. 
 
 which was apparently intended to close the controversy in 
 New York. Here the evidence outside the mortgage showed 
 that the mortgager had continued to make sales of the 
 mortgaged property as usual theretofore, and tended to 
 prove that this was done by permission of the mortgagee. 
 The jury found that there was an arrangement to that effect 
 between the parties. The Court of Appeals, without dis- 
 sent, held that the fraud in this case was to be ruled on ju- 
 dicially, as a question of law, and that Edgell v. Hart, 
 Frost V. Warren, Gardner v. McEwen, and Eussell v. Winne 
 were concurrent witnesses to the existence of this rule as 
 fundamental in the jurisprudence of New York. Said 
 Allen, J., in pronouncing the opinion of the majority: 
 "Whether the agreement is in or out of the mortgage, 
 whether verbal or in writing, can make no difference in 
 principle. Its effect as characterizing the transaction would 
 be the same. The difference in the modes of proving the 
 agreement cannot take the sting out of the fact and render it 
 harmless. If it is satisfactorily established, the result upon 
 the security must be the same. It is the fact that such an 
 agreement has been made and acted upon that in law con- 
 demns the security, and not the fact that it is proved by the 
 instrument of suretyship, instead of by parol or in some 
 other way." ^ 
 
 This clear statement of the distinctions between rules of 
 substantive law and rules of mere procedure, inherent in 
 this class of cases, was evidently designed to meet the criti- 
 cisms of those who have supposed a judgment, based on 
 facts apparent on the face of a written conveyance, to be a 
 judgment of mere constructive or presumptive fraud. It 
 is actual fraud that is adjudged in such cases ; fraud inher- 
 ent in the transaction to which the parties have agreed ; and 
 a class of fraud which is no more or less vicious and reprehen- 
 
 1 The case digested under the name of Southard v. Pinckney, in 6 N. T. 
 W. D. 328, is evidently the same case as Southard v. Benner. 
 66 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 43 
 
 sible, whatever be the character of the evidence by which 
 the facts of the transaction are proven. 
 
 Still more recently, in Brackett v. Harvey,^ the Court 
 of Appeals has been called upon to give an equally clear 
 explanation of the distinguishing features of those cases in 
 ■which the power of sale is not reserved to the mortgager's 
 use, but inures to the benefit of the mortgagee. The 
 ground upon which Ford v. Williams,* Conkling v. Shelly,* 
 and Miller v. Lockwood* correctly rest is clearly pointed 
 out. It is that a sale of the goods, and the application 
 of the proceeds upon the mortgage debt, " is the normal 
 and proper purpose of a chattel mortgage, and within the 
 precise boundaries of its lawful operation and effect ; it 
 does no more than to substitute the mortgager as the agent 
 of the mortgagee, to do exactly what the latter had the 
 right to do, and what it was his privilege and duty to 
 accomplish." This is shown to be an independent doc- 
 trine of law, of equal force and dignity with the doctrine 
 of Southard v. Benner, with which, it in no manner con- 
 flicts. In the case under consideration, an agreement that 
 the mortgagee should accept, as a payment on his debt, the 
 notes taken by the mortgager for goods sold on credit, and 
 an agreement that the proceeds of sales might in part be 
 used to purchase new stock, which should then be covered 
 by new mortgage for the same debt, were shown to be but 
 modes of paying the mortgage debt, or holding the pro- 
 ceeds of sales subject to the lien. The validating feature 
 of the transaction was that "in no respect did it permit 
 anything mortgaged to escape the mortgage ; if it did not 
 turn into cash or paper, which reduced the mortgage debt, 
 it turned into other property which became itself the sub- 
 ject of the mortgage lien." 
 
 1 91 N. y. 214; 17 Cent. L. J. 112 (1883). = 24 N. Y. 359. 
 
 » 28 Id. 360. * 32 Id. 293. 
 
 67 
 
§ 44 FEAUDULENT MORTGAGES OF MERCHANDISE. 
 
 These distinctions were carefully made in reversing the 
 decision of the lower court, which had been adverse to the 
 mortgage on the ground that in other respects the trans- 
 action indicated a reserved power of sale for the benefit 
 of the mortgagers.^ The Court of Appeals disagreed with 
 the lower court in its opinion that the proof sustained this 
 view, and reversed the case solely on the ground of the 
 weight of evidence, saying, " we see no evidence of an agree- 
 ment for such diversion (of the proceeds of sales), or of 
 such diversion in fact." 
 
 The two cases named thus furnish an admirable view of 
 the doctrine under, consideration, both as applied on the 
 one hand, or found to be inapplicable on the other. 
 
 New Hampshire. 
 
 § 44. The doctrine received with favor in New Hamp- 
 shire. — In New Hampshire, the early case of Coburn v.. 
 Pickering ^ held that possession retained by the mortgager,, 
 under a mortgage, with the right to the full use of the 
 property, rendered the mortgage fraudulent and void. 
 This case went, probably, farther than necessary, inas- 
 much as the property mortgaged consisted of household 
 ■goods, and it did not appear that their use was tantamount 
 to their destruction. But the case is an instructive one, 
 by reason not only of the very elaborate and well-con- 
 sidered opinion of the court, in which the rule we are 
 considering is drawn from Twyne's Case, but also of the 
 close and interesting argument of counsel seeking to up- 
 hold the mortgage. 
 
 This and subsequent cases have been taken as placing 
 New Hampshire in the list of those States which adopt the 
 rule that retention of possession alone suflSces to invali- 
 date such conveyances. Her variation of the rule was 
 
 » 25 Hun, 502. » 8 N. H. 415 ; 14 Am. Deo. 375 (1826). 
 
 68 
 
DOCTEINE OF THE AMERICAN MAJOEITY. § 45 
 
 applied, in Lang v. Stockwell,i to a sale of a horse and 
 wagon, an agreement being proven that the vendor should 
 retain the property, pay taxes on it, and use it in all 
 respects hs his own ; which use the courts held to consti- 
 tute the very essence of the idea of property, and to be 
 inconsistent with the idea of a lawful sale. It was also 
 applied, in Cutting v. Jackson,^ to a sale of certain live 
 stock and some hay, in which case the agreement allowed 
 even a more extended use of the property for the con- 
 venience of the grantor, for the hay was to be eaten by 
 the stock. The test applied in Twyne's Case was taken as 
 plainly illustrating this case also, e.e., the vendor retained 
 the property and used it as his own. It will be seen that 
 this application of the rule covers more than mere retention 
 of possession. It is a trust of any kind, reserved for the 
 benefit of the mortgager, that avoids such a transaction; 
 and, while the jury finds the facts in all cases, the fraud is 
 predicated of those facts by the court, as matter of law, 
 in all cases. The same rule is applied in Winkley v. HilP 
 and Coolidge v. Melvin,* to conveyances of land with trusts 
 reserving a benefit to the grantor. The question of the 
 debtor's intent is considered immaterial. "It is because 
 such trusts are calculated to deceive and embarrass cred- 
 itors, because they are not things to which honest debtors 
 can have occasion to resort in sales of their property, and 
 because they are the means which dishonest debtors com- 
 monly and ordinarily use to cheat their creditors, that the 
 law does not permit a debtor to say that he used them for 
 an honest purpose in any case." ° 
 
 § 45. The doctrine adopted and applied. — On the 
 
 authority of Coburn v. Pickering, a like rule was applied 
 to mortgages on stocks of goods in trade with power of 
 
 1 55 N. H. 561. * 42 Id. 510. 
 
 ' 56N. H. 353 (1875). * Id- 520. 
 
 8 9 N. H. 31 ; 81 Am. Deo. 215. 
 
 69 
 
§ 45 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 sale reserved, in Kanlett v. Blodgett^ and Putnam v. Os- 
 good.^ In the earlier case, Parker, C. J., referring to the 
 provision that the mortgage should cover future acquired 
 gocfds as additions to the stock, thus aptly supplemented 
 the criticisms of other courts upon the uncertain and shifting 
 character of such transactions: "If this doctrine were ad- 
 mitted, a mortgage of personal property would he like a 
 kaleidoscope, in that the forms represented would change 
 at every turn, but unlike that instrument in that the mate- 
 rials would not remain the same." The result of the ar- 
 rangement, the court conceived to be that the grantor " was 
 the owner, by the agreement, for all purposes except the 
 rights of creditors;" a description which at once charac- 
 terized the transaction as fraudulent. 
 
 In Putnam v. Osgood, which was twice reported,' it ap- 
 peared that the mortgage was given and received in good 
 faith, and that there was no contemporaneous agreement 
 that the mortgager should continue selling; nevertheless, 
 he did so continue, and with the knowledge of the mortga- 
 gee ; and these facts, when proven, were held to establish 
 fraud in law. This case as last reported holds, that wher- 
 ever, by any such arrangement, there results, as here, a 
 secret trust for the benefit of the grantor, " it is well settled 
 in New Hampshire that the fraud is a conclusion of law," 
 and this, " without stopping to inquire what were the real 
 motives and intentions of the parties." * This last of the 
 two decisions in this case, though less full, is in complete 
 accord with the first, where Chief Justice Bellows thus 
 summed up the vital features of this class of conveyances." 
 
 " The avowed object of a mortgage is to secure a debt. 
 If the secret purpose be to protect the mortgager in the en- 
 joyment of the property, and enable him to set his other 
 
 1 17 N. H. 298 ; 43 Am. Dec. 603 (1845). * 52 Id. at p 154 
 ' 51 Id. 192 (1871) ; 62 Id. 148. 6 51 Id. at p. 202." 
 
 ' 51 Id. 192, and 52 Id. 148. 
 70 
 
DOCTBINE OF THE AMEKICAN MAJOEITY. § 46 
 
 creditors at defiance, then the mortgage is deemed to be 
 fraudulent and void as to those creditors ; and of this there 
 is no controversy. If a trust, inconsistent with the legiti- 
 mate purpose of a mortgage, is reserved for the benefit of 
 the mortgager, and that is proved, then a fraudulent intent 
 is, with us and in many other jurisdictions, a conclusion of 
 law. A secret understanding that the mortgager shall retain 
 the possession of the goods, and continue to sell them as 
 before for his own benefit, is clearly such a trust. As be- 
 tween the parties, the mortgager remains the owner of the 
 goods, and the mortgage is practically effective only to 
 ward off the claims of other creditors. If such a mortgage 
 should be held to be valid, it would furnish the readiest 
 means of affording shelter to an embarrassed debtor, under 
 which he could carry on his business and defy his creditors. 
 The practical effect of such a mortgage is to delay and de- 
 feat creditors, and it is to be presumed that the parties in- 
 tended to do what their acts were naturally calculated to 
 accomplish. 
 
 " The right of other creditors to attach the mortgaged prop- 
 erty could afford but little relief against these mischiefs. 
 It could only be done by paying the mortgage debt, which, 
 in many instances, would leave little or nothing for the 
 creditor. In the meantime, the mortgager would dispose 
 of the goods for his own benefit and without' paying the 
 mortgage debt, and then mortgage the goods, obtained to 
 replenish his stock, to the same friend for the same debt, 
 and so continue his business and be enabled to snap his 
 fingers at his other creditors. 
 
 "A doctrine which should hold such a transaction to be 
 valid would be most disastrous in its consequences, and 
 finds no countenance in the established doctrines on the 
 subject, either here or elsewhere." 
 
 § 46. Distinction in case of agency for the mortga- 
 gee. — The rule is recognized in its application to mort- 
 
 71 
 
§ 47 FRAUDULENT MORTGAGES OP MERCHANDISE. 
 
 gages on stocks of goods in trade, as the existing rule in 
 New Hampshire, in the recent case of Wilson v. Sullivan ;i 
 but in this case, the sales of goods having been made by 
 the mortgager as the agent and for the benefit of the mort- 
 gagee, and for the purpose of extinguishing the mortgage 
 debt, it was naturally held, in accordance with the ruling in 
 other States, that such a transaction is valid in law, if free 
 from fraudulent intent. 
 
 The doctrine is also recognized in a different aspect, in 
 another case in the same volume.^ 
 
 Ohio. 
 
 § 47. Collins v. Myers ; the doctrine illustrated In 
 Ohio. — The Supreme Court of Ohio, though later in point 
 of time, was in no respect less incisive in its judgment 
 upon such transactions, and no less felicitous in illustrating 
 their pernicious character, than those of the other States 
 already referred to. The case of Collins v. Myers ^ has 
 justly been assigned a leading position among those treating 
 of the subject. It was a contest in equity between the 
 assignees under a mortgage and judgment creditors of the 
 mortgager, who had continued to traffic with the stock of 
 goods mortgaged ; though the agreement permitting this 
 appeared, not on the face of the instrument, but by proof 
 aliunde. That the question arising out of these facts far 
 transcends that of mere possession, is clearly shown. The 
 language of the opinion has deservedly become proverbial. 
 " The object of a mortgage is to obtain a security beyond a 
 simple reliance upon the honesty and ability of the debtor to 
 pay, and to guard against the risk of all the property of the 
 debtor being swept off by other creditors, by fastening a 
 specific lien upon that covered by the mortgage. But a 
 
 1 58 N. H. 260; 9 Reporter, 614 (1878). 
 " Pettee v. Dustin, p. 309 ; see post, sect. 144. 
 ' 16 Ohio, 547 (1847). 
 72 
 
DOCTRINE OF THK AMERICAN MAJORITY. § 47 
 
 mortgage, with possession and power of disposition in the 
 mortgager, is nothing at last but a reliance upon the honesty 
 of the mortgager; and, in fact, is no security, as it is within 
 the power of the mortgager, at any moment, to defeat the 
 mortgage lien by an entire disposition of the whole property 
 covered by the mortgage. Such a mortgage, then, is no 
 security, so far as the debtor is concerned, and is of no 
 benefit except as a ward to keep off other creditors. ' ' ' ' The 
 very nature of a mortgage is to fasten a lien upon specific 
 property ; and the courts have gone far enough when they 
 have permitted an honest possession in the mortgager. * * * 
 But in this case there ik-no specific lien, but a floating mort- 
 gage, which attaches, swells, and contracts as the stock in 
 trade changes, increases, and diminishes ; or may wholly ex- 
 pire by entire sale and disposition, at the will of the mort- 
 gager. Such a mortgage is no certain security upon specific 
 property." 
 
 " In such case the whole right to dispose of the property 
 to pay a debt depends upon the will of the debtor, not 
 affected by the rights of the mortgagee ; and what reason is 
 there in permittingthe will of the debtor to determine whether 
 property shall legally go to pay a debt or not ? If it be the 
 will of the debtor to appropriate the mortgaged property to 
 pay the debt, it is binding as against the mortgagee ; but if 
 it be not the will of the debtor, and the property is seized 
 upon execution, the rights of the mortgager fasten upon the 
 property, and take it away from the execution creditor. Then 
 the property is not held by the mortgage, but by the will of 
 the debtor; because, if the debtor sees proper to dispose of 
 it, he has the power under the mortgage. He may dispose 
 of the property, defeat the mortgage, and put the money in 
 his own pocket ; but if he refuses to pay a debt, and you 
 seize the property in execution against his will, the mortgage 
 steps in and restores it to the debtor. The whole matter, 
 then, appears to rest upon the option of the debtor, to ap- 
 
 ' 73 
 
§ 48 FBAUDXH/ENT MORTGAGES OF MEKCHANDISE. 
 
 propriate the mortgaged property to the payment of his 
 debts or not, and not upon the mortgage. No reasoning 
 will change this result if a mortgager retains possession and 
 the full power of dispositionoverthe mortgaged property." 
 
 "A mortgage upon a specific article, with possession and 
 power of disposition left in the mortgager, is in truth no 
 mortgage at all; it is no certain lien. The power to hold 
 possession and dispose of the property is inconsistent with 
 the very nature of a mortgage. It, indeed, would not, per- 
 haps, be going too far to say that such an instrument was a 
 nullity." 
 
 "As to all the world except the parties themselves, such a 
 mortgage will be held void as against the policy of the law." 
 
 The court dissented explicitly from the doctrine enunci- 
 ated by Mr. Justice Story, in Mitchell v. Winslow,^ and, re- 
 ferring to his suggestion, that though part of the goods 
 should be lost to the creditor by sales, others might be sub- 
 stituted by consent, replied : " This is no answer, for it may 
 be that others will not be substituted, and, if we look to ex- 
 perience, in all cases where a trader has felt himself bound 
 to mortgage his whole stock, it is not the usual result." 
 The fallacy adopted by a class of logicians represented by 
 Story and Lowell is then pointed out. "The whole error 
 appears to be in regarding the word stock as a fixed thing 
 which must always remain, the same as a horse which pre- 
 serves his identity, although in process of time every parti- 
 cle composing him may be thrown off and renewed. ' ' * • The 
 error is in treating a word as a thing, mortgaging a word 
 instead of a substance, and permitting the substance to be 
 sold, while the mortgage attaches and remains fixed to the 
 word." 
 
 §48. TTie doctrine adhered to. — The doctrine thus 
 comprehensively stated remains the law in Ohio. Freeman 
 
 I 2 Story, 630. 
 74 
 
DOCTKINE or THE AME2ICAN MAJORITY. § 48 
 
 V. Eawson ^ was another case where the agreement that the 
 mortgager should continue to sell the merchandise mort- 
 gaged, appeared decora the instrument; but the lower court 
 is sustained in its ruling that the instrument was equally 
 fraudulent and void as if this arrangement had appeared on 
 its face. The ruling in Coburn v. Pickering, as to a secret 
 trust, is referred to and* approved, and it is said: "The 
 mortgage must be precisely what it purports and professes 
 to be, and must operate an absolute surrender of the prop- 
 erty for the security of the mortgagee." " What possible 
 arrangement could be more directly inconsistent with the 
 nature and purjDOses of the conveyance, or could more pal- 
 pably secure to the mortgager all the beneficial uses of the 
 property, than the power to use and dispose of it for his own 
 benefit? It is simply and plainly saying that, as between 
 the parties, the mortgager's enjoyment of and dominion 
 over it shall be no less than before, while it is put beyond 
 the reach of other creditors." 
 
 In Harman v. Abbey ^ the mortgage provided nominally 
 that the mortgagee should have possession, but only as 
 against all other persons than the mortgager, and the latter 
 was to continue the business at retail; while no provision 
 was made as to the proceeds of sales, except as to paying 
 expenses. This arrangement, which merely expressed more 
 plainly in terms what the court discovered lurking under 
 the surface of the two last named cases, was, in accordance 
 with the previous ruling^ declared absolutely void m law. 
 
 Goodenough v. Harris' and Morris v. Devon* are cases 
 in which the same ruling was applied in the inferior courts. 
 
 It is to be observed particularly that before Collins v. 
 Myers, the rule was already well established in Ohio that 
 retention of possession alone, after a bill of sale of chat- 
 
 1 5 Ohio St, 1. » 1 Disney, 53. 
 
 » 7 Ohio St. 218. « 2 Id. 218. 
 
 75 
 
§ 50 FEAUDULENT MORTGAGES OF MERCHANDISE. 
 
 tels, whether absolute or conditional, would furnish only 
 presumptive evidence of fraud, and might be consistent 
 with an honest intent, or open to explanation.' This rule 
 was adopted at a time when, while it was approved in New 
 York, it had been rejected by Pennsylvania, Connecticut, 
 and Vermont, which States had applied the contrary rule 
 of conclusive fraud to such cases.* 
 
 § 49. Distinction in case of agency for tbe mort- 
 gagee. — Brown v. Webb^ and Kleine v. Katzenberger^ 
 do not vary the rule adopted in Collins v. Myers. In the 
 former case, the mortgage provided that the mortgager 
 should make sales for the purpose of paying the mortgage 
 debt, but the- mortgagees took immediate possession, and 
 themselves carried out this provision, which was held a 
 valid transaction. In Kleine v. Katzenberger, the provi- 
 sion of the mortgage was that the mortgager might sell, 
 but only in order to raise money to pay over to the mort- 
 gagees on their debt, and the court followed the New York 
 courts in distinguishing this as a valid- transaction, the power 
 of sale being allowed only for the benefit of the mortga- 
 gees, and being " entirely consistent with the idea of a lien 
 upon the goods for the security of the mortgagees," when 
 the arrangement is made in good faith. 
 
 Minnesota. 
 
 § 50. Tlie doctrine adopted in Minnesota; registration 
 
 of instrument immaterial In Minnesota, a similar ruling 
 
 was made as to a mortgage on a stock of goods in trade, in 
 the first reported case of Chophard v. Bayard.* The doc- 
 trine of the New York cases was approved, and it was held 
 that permission to the mortgager to sell the goods is wholly 
 inconsistent with the idea of a security, and leads the judi- 
 
 ' Hombeck v. Vanmetre, 9 Ohio, 153 (1839). » 20 Ohio, 389. 
 
 8 20 Ohio St. 110 ; 5 Am. Eep. 680 (1870). * 4 Minn ' 533 
 
 76 
 
DOCTRINE OF THE AMEKICAN MAJORITY. § 51 
 
 cial mind irresistibly to the conclusion that the instrument 
 ■was made for some other purpose. 
 
 This doctrine was followed in Horton v. Williams,^ a 
 case of a mortgage on stock and farm produce, some of 
 which the mortgagee had allowed the mortgager to sell. 
 The rule was laid down in this case, (and also in Gei'e v. 
 Murray^, ) that the province of the jury is to find only the 
 facts as to the acts or intent of the parties, and that the 
 court is to declare whether such acts or intent are fraudu- 
 lent, as a question of law. In case the intent of the parties 
 be inconsistent with the idea of an honest security, " the law 
 declares such intent fraudulent." The case of Chophard 
 V. Bayard was said to be " in accordance with sound prin- 
 ciple and the weight of authority," in holding " that such 
 a mortgage was necessarily fraudulent, as against the mort- 
 gager's creditors." In reference to the question of regis- 
 tration, as affecting this doctrine, the court said, further: 
 "The law, as held in Chophard v. Bayard and Gere v. 
 Murray, has not been changed by the act requiring chattel 
 mortgages to be filed, unless accompanied by immediate 
 delivery, and followed by an actual and continued change 
 of possession of the things mortgaged. Unlike the stat- 
 utes of Massachusetts and Iowa on this subject, our statute 
 does not make the filing of the mortgage legally equivalent 
 to actual delivery and continued change of possession ; but 
 like the statute of New York, of which it is a copy, ' it 
 merely adds another to the grounds on which a mortgage 
 of personal chattels shall be void.' "' 
 
 § 51. TransactioD not validated by act of mortgagee in 
 taking possession of goods. — The rule was further af- 
 firmed in Stein v. Munch,* as to a mortgage on a retail 
 
 1 21 Minn. 187. 
 
 2 6 Id. 305. 
 
 ' Citing Wood v. Lowry, 17 Wend, 492, and Smith o. Acker, 23 Id. 653. 
 * 24 Minn. 390 (1878). 
 
 77 
 
§ 52 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 stock of drugs with power of sale reserved. In this case» 
 it was held that the transaction was not validated by the 
 mortgagee taking possession of the goods under and by 
 virtue of the mortgage ; for which important principle the 
 cases of Kobinson v. Elliott/ Delaware v. Ensign,^ Blakes- 
 lee V. Kossman,' and Janvrin v. Fogg* were cited, all which 
 save the last were similar cases of mortgages on stocks of 
 goods in trade. 
 
 But in another case of a similar mortgage, heard at the 
 same term," in which the mortgager had, by a new act, vol- 
 untarily turned the property over to the mortgagee, for the 
 purpose of paying in part the mortgage debt, this was sus- 
 tained as a valid and legal transaction, it appearing to be 
 bona fide. 
 
 The rule was reaffirmed as the settled law of Minnesota, 
 in Mann v. Flower,*' where a similar mortgage on goods in 
 trade was held fraudulent ; the same mortgage having been, 
 in Flower v. Cornish,' held valid as between the parties. 
 In this as in the preceding cases, the adjudication proceeds 
 on the theory of the fraudulent intent of the parties, as con- 
 clusively proven by their dealings. 
 
 Wisconsin. 
 
 § 52. The doctrine applied in Wisconsin ; intent of 
 parties immaterial. — The Minnesota court, ip Horton v. 
 Williams, refers approvingly to Place v. Langworthy * and 
 Steinart v. Deuster,' two cases in Wisconsin, involving 
 mortgages of this character. Place v. Langworthy, in its 
 turn, is professedly based on Collins v. Myers," the lan- 
 guage of which is quoted and adopted. In this case the 
 
 ' 22 Wall. 513. e £5 Minn. 500 (1879). 
 
 = 21 Barb. 85. ' 25 7i 473. 
 
 ' 43 Wis. 116. 8 13 -Wis. 629 (1861). 
 
 «49N.H.340. »28 7dl36. 
 
 ■■ Bank v. Anderson, 24 Minn. 435. lo 16 Ohio 547 
 78 • 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 52 
 
 provision for sales was exhibited on the face of the mort- 
 gage. In Steinart v. Deuster, it appeared to have been 
 agreed on verbally between the parties. But the two cases 
 were held to be not distinguishable in this particular. The 
 duty of the court was recognized, so soon as the fact is con- 
 ceded or established in the case, to expose the inherently 
 vicious tendencies of such a transaction, and to rule upon 
 it as fraudulent in law. Allowing sales of the mortgaged 
 goods by the mortgager is said to be " a provision directly 
 calculated, in our judgment, to hinder, delay and defraud 
 creditors."^ A verbal agreement to this effect is no less 
 vicious, than a written one. 
 
 These cases established the doctrine in Wisconsin. In 
 Oliver v. Town,^ the trial court charged the jury in con- 
 formity to the rulings in the two earlier cases ; and on ap- 
 peal, the judgment resulting therefrom was sustained 
 without discussing the propriety of such a charge. 
 
 The Supreme Court of Wisconsin has lately been invited 
 to revise these rulings, but it has by a full bench adhered 
 to them in the most decided manner, in Blakeslee v. Eoss- 
 man; * announcing that " the validity of such a mortgage is 
 not an open question in this State," and expressing the be- 
 lief that the rule elsewhere " is veiy generally, if not uni- 
 versally, the same as here." The terse and incisive 
 language of Eyan, C. J., is calculated to give this case a 
 leading position on the subject. He said: "Intent does 
 not enter into the question. Fraud in fact goes to avoid 
 an instrument otherwise valid. But intent, bona fide or 
 mala fide, is immaterial to an instrument per se fraudu- 
 lent and void in law. The fraud which the law imputes to 
 it is conclusive. * * * Fraud in fact imputed to a con- 
 tract (valid on its face) is a question of evidence ; not fraud 
 in law. And no agreement of the parties in parol can aid 
 » a written instrument, fraudulent and void in law." 
 
 - » 13 Wis. 629. ' 28 Wis. 828. ' 43 Wis. 116 (1877). 
 
 79 
 
§ 53 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 It being urged upon the court that a seizure of the goods 
 in this case by the mortgagee, claiming under the mort- 
 gages, had given him a valid possession, this claim was 
 overruled in decisive language, it being considered impossi- 
 ble for the mortgagee to acquire any legal rights under a 
 transaction so fraudulent. 
 
 § 53. Distinction in case of agency for the mortgagee ; 
 recent cases. — The still later case of Fisk v. Harshawi 
 exhibited the fact of sales of the mortgaged goods by the 
 mortgager ; but it turned upon the question of the weight 
 of evidence, as to whether the mortgagee had allowed the 
 mortgager to apply any of the proceeds of the sales to his 
 own use; it was claimed that the proceeds were all to be 
 remitted to the mortgagee ; and the finding in the lower 
 court in favor of the mortgagee on these points was sus- 
 tained, upon the weight of evidence, by the majority of the 
 court, without withdrawing or detracting from the authority 
 of Blakeslee v. Eossman or the preceding cases. Cotton u. 
 Marsh ^ was cited and approved, where the mortgagee of a 
 stock of goods, by his agent, put the mortgager in posses- 
 sion, with instructions to sell and remit the proceeds ; and 
 this Was held to be an arrangement not necessarily fraudu- 
 lent, but valid if free from fraudulent intent. 
 
 On similar principles, sales of mortgaged chattels by the 
 mortgager, without the knowledge or consent of the mort- 
 gagee, will not have the effect to avoid the mortgage.^ 
 
 The recent case of David w. Birchard* involved a chattel 
 mortgage on a stock of goods, but the report does not dis- 
 close any reservation by the mortgager of a power of sale 
 of the goods, and the case was litigated on the question of 
 fraudulent intent. 
 
 In Eice v. Jerenson,^ though the mortgage was one of a 
 
 1 45 "Wis. 665 (1878). . 53 Id. 492. 
 
 ' 3 Id. 221 (1854). 6 54 j^, 248. 
 
 ^ Barkow v. Sanger, 47 Id. 500. 
 
 80 
 
DOCTEINK OF THE AMEKICAN MAJORITY. § 54 
 
 stock of goods with a reserved power of sale, the question 
 of inherent.fraud in such a conveyance was not involved or 
 discussed ; the only question in connection with the convey- 
 ance being whether it furnished sufficient proof of an intent 
 to defraud to warrant the issuance of a statutory attach- 
 ment. The evidence showing no intent to defraud, no 
 ground appeared for the attachment, which was accordingly 
 dissolved. This case thus illustrates in another form the 
 entire immateriality of the intent of the parties, in deter- 
 mining the fraudulent character of a reserved power of 
 sale. Though the mortgage in question was essentially 
 fraudulent, under Blakeslee v. Rossman, it yet furnished no 
 proof whatever of fraudulent intent. 
 
 Illinois. 
 
 § 54. The doctrine applied In Illinois ; registration of 
 Instrnment Immaterial. — In Illinois it was urged upon the 
 consideration of the Supreme Court, in Davis v. Eansom,^ 
 that the statute of that State allowing possession by the 
 mortgager of chattels for two years, in case the mortgage 
 be recorded, had, as intimated by Lowell, J., in Brett v. 
 Carter, met all the difficulties of Twyne's Case, so as to 
 validate the mortgage in question. But the court was not 
 blind to the fact that possession and publicity were minor 
 matters, compared with the reservation of a power of sale ; 
 and the difference was plainly pointed out. Said the court : 
 " The statute contemplates the retaining of possession by 
 the mortgager of chattels capable of description and identi- 
 fication only, and the retaining of such possession for use 
 or custody, and not for sale and disposition in the course 
 of business and trade." This accords with the ruling in 
 Horton v. Williams,^ that such statutes do not change the 
 rules of the common law, but " merely add another to the 
 grounds on which a mortgage of chattels shall be void." 
 
 ' 18 111. 896 (1857). ^ j^^nte, sect. 50. 
 
 6 81 
 
§ 54 FRAUDULENT MORTGAGES OF BIERCHANDISE . 
 
 In Davis v. Eansom a stipulation on the face of the mort- 
 gage allowed the mortgager to sell the goods in the usual 
 course of trade, with a proviso that the proceeds should be 
 paid over to the secured creditoi's. The mortgager had 
 paid over certain of the proceeds to one of said creditors, 
 and thus far had manifested an intent not fraudulent. Not- 
 withstanding this, the inherent vice of the arrangement was 
 relentlessly exposed by the court. *' This instrument does 
 not provide for possession remaining with the mortgager 
 within the meaning of the statute, but seeks, under cover 
 of a mortgage, to enable the mortgager, in defiance of his 
 creditors, to retail goods according to the course of mer- 
 chants, and is against the evident policy of the statute. In 
 effect, this instrument is no less than an assignment or bill 
 of sale of a stock of goods, reserving to the assignor the 
 absolute dominion and power of disposition for the period 
 of fifteen months, during which time it contemplates that 
 the assignor shall, with the goods, carry on his business of 
 storekeeping as by him heretofore followed ; that what he 
 should add to the stock should enure to, and become a part 
 of, the assigned or mortgaged property ; and that, for this 
 period, the creditors of the assignor should be hindered in 
 subjecting the property to the satisfaction of their legal de- 
 mands. * * * The law gives no sanction to such ar- 
 rangements, and, however well intended in fact, wiU hold 
 them void as against creditors, as tending to encourage and 
 sustain frauds, and to hinder creditors in the collection of 
 their just demands." 
 
 Eead v. Wilson* was a like case, with a like clause in the 
 mortgage ; but here the mortgagees had, in fact, taken pos- 
 session under the mortgage before the contest arose, even 
 before the execution creditor had taken out his execution, 
 and they had commenced and continued for some time the 
 sale of the goods for the satisfaction of their debt; and the 
 
 1 22 ni.3 77. 
 82 
 
DOCTBINB OF THE AMEEICAN MAJOBITY. § 55 
 
 court held that they were protected by their possession un- 
 der the circumstances of the case, without abandoning the 
 principles settled in the former case. 
 
 In Barnet v. Fergus ^ the mortgage covered a " stock in 
 trade" among other things, but did not on its face grant 
 permission to the mortgager to sell the goods ; this permis- 
 sion appeared by evidence to have been given aliunde. 
 The court re-affirmed it decisions that such an agreement 
 on the face of the instrument amounted to " fraud in law ; ' ' 
 and, as to the particular case, held that such permission 
 granted " would be such a perversion of the mortgage from 
 its legitimate purposes as to withdraw from its protection, 
 and place within the reach of other creditors, all the prop- 
 erty which the mortgagee had permitted the mortgager to 
 hold for sale in the ordinary course of his business." 
 
 This court had previously decided, in Ogden v. Stewart,^ 
 that in a case like Barnet v. Fergus, all lien of the mort- 
 gage is lost by a sale of the goods, and that the vendee 
 from the mortgager acquires a title to them. In the last 
 named case, the distinction is taken that as the mortgage 
 was on its face free from any imputation of a fraudulent 
 agreement, the permission by the mortgagee that sales be 
 made by the mortgager affected his lien only as to that por- 
 tion of the goods allowed to be sold, and it was unaffected 
 as to those goods which were not, directly or by implication, 
 covered by the permission to sell. 
 
 § 55. Tlie doctrine adhered to in Illinois. — Cleaves v. 
 Herbert ^ might possibly induce doubts as to the intention 
 of the Ilhnois Supreme Court to adhere to this rule. The 
 case was a chattel mortgage on a stock of liquors and saloon 
 furniture and fixtures, contained ina " saloon," the grantor 
 to <' retain possession of said property, and at his own 
 expense to keep, and to use and enjoy the same until de- 
 
 1 51 lU. 352. 2 29 Id. 122. • 61 Id. 126. 
 
 83 
 
§ 55 FKADULENT MOKTGAGES OF MERCHANDISE. 
 
 fault," etc. The Appellate Court could not see that to 
 "keep, use and enjoy" this property was designedly to 
 allow the grantor to sell it, but thought it possible the jury 
 had considered the keeping of the liquors intact for the 
 purpose of improvement by age, the " use" of it meant 
 in the conveyance. Hence the verdict of the Jury in favor 
 of the transaction, upon conflicting evidence, was allowed 
 to stand. But doubtless, this case, like Fisk v. Harshaw^ 
 and Yates v. Olmstead,^ is to be taken only as an adjudica- 
 tion upon the province of the jury to settle disputed ques- 
 tions of evidence ; inasmuch as we find this court, less than 
 four years later, holding, in Simmons v. Jenkins,' that any 
 such arrangement between mortgager and mortgagee, 
 whether express or implied, even if proven by circum- 
 stances, to allow sales at retail by the mortgager, will ren- 
 der the conveyance unavailing as against creditors. There 
 is also a plain adherence to the rule of Barnet v. Fergus, in 
 the later case of Goodheart v. Johnson,* where the same 
 court sustain the conveyance then in dispute ; carefully dis- 
 tinguishing the case from Barnet v. Fergus by the fact that 
 the sale made in this case was for the express account of, 
 and under the direction of the mortgagee, except in three 
 instances where inconsiderable portions of the property 
 were sold by the mortgagee for his own benefit, which were 
 thought not sufficient to invalidate the otherwise legal trans- 
 action. 
 
 But the question is placed beyond doubt by the more re- 
 cent cases of Greenebaum v. Wheeler^ and Dunning v. 
 Mead,* both decided at the September term, 1878. In 
 Greenebaum v. Wheeler the chattel mortgage was on the 
 materials and stock in business of a carriage factory, the 
 mortgager continuing the business and making sales, and re- 
 taining a certain sum per month for the use of himself and 
 
 1 Ante, sect. 63. s 76 HI. 479. ° 90 Id. 296. 
 
 ' Ante, sect. 41. « 88 Id. 68. « 90 Id. 376. 
 
 84 
 
DOCTRINE OF THE AMERICAN MAJORITY § 56 
 
 family. The court said: " If this was not intended to de- 
 fraud other creditors, it certainly was well calculated to do 
 so, as it placed all of Reach's property beyond their reach 
 for fifteen months, and enabled him to carry on his business 
 with the property precisely as though it was not incum- 
 bered, * * * Such a transaction must be held to be 
 against the policy of the law, as tending to delay and 
 defraud creditors. If such mortgages or pledges were 
 sanctioned, it would form one of the most convenient 
 and effectual means of hindering and delaying credit- 
 ors in collecting their debts that could be devised." In 
 Dunning v. Mead, the mortgage covering a stock in trade 
 was valid on its face, inasmuch as it did not stipulate for 
 sales by the mortgagers. But on the day after its execu- 
 tion, the mortgagees, by letter, authorized the mortgagers 
 to continue to sell the mortgaged property at retail, and re- 
 tain the proceeds subject to their order. It appeared in 
 proof that this was used as a cover to enable the mortgagers 
 to appropriate the proceeds to their own use. The court 
 sustained the instruction to the jury that this mortgage was 
 void as to creditors, saying that it had •' been repeatedly 
 held by this court ' ' that such a transaction was fraudulent, 
 and referring to the cases above cited. 
 
 Missouri. 
 
 § 56. The doctrine as applied in Missonri. — The Su- 
 preme Court of Missouri at first held that sales unaccompa- 
 nied by possession, whether absolute or conditional in their 
 terms, were in law fraudulent and void per se, independent 
 of statutes respecting fraudulent conveyances, and indepen- 
 dent of the intentions of the parties. See Kocheblave v. 
 Potter,^ Foster v. Wallace,^ Sibly v. Hood,' and King v. 
 Bailey;* these decisions extending over the period from 
 
 1 1 Mo. 561 ; 14 Am. Dec. 405. » 3 Id. 290. 
 
 2 2 Id. 231. « 6 Id. 575. 
 
 85 
 
§ 56 FEAUDULENT MORTGAGES OF MERCHANDISE. 
 
 1825 to 1840. But in 1841 this rule was completely aban- 
 doned, and in Shepherd v. Trigg,^ Ross v. Crutsinger,^ and 
 IQng V. Bailey,' the contrary rule was established that pos- 
 session left with the vendor raises no question of fraud in 
 law, but merely a c[uestion of fraud in fact, to be submitted 
 to the jury. It is somewhat remarkable that King v. Bai- 
 ley, in 6 Mo., appears to be the same case which is decided 
 in a precisely opposite manner in 8 Mo. "When this court, 
 in 1848, was confronted with a case of a trust deed on a 
 stock of goods in trade, it was at first evidently embarrassed 
 by the prominence given in its earlier decisions above cited 
 to the question of possession alone ; and was led to sustain 
 the transaction in question on the ground that no provision 
 for sales by the grantor appeared on the face of the deed, 
 notwithstanding the fact appeared that sales at retail were 
 regularly made with the assent of the creditor.* But in 
 subsequent cases in which the power of sale was reserved 
 to the grantor on the face of the instrument, this was held 
 fraudulent and void in law, there being no question of fact 
 to go to the jury ; ^ even in case the instrument bound the 
 grantors to apply the proceeds of sales to the replenishment 
 of the stock; " and, also, where the vicious provision does 
 not appear in terms on the face of the deed, but is neces- 
 sarily implied from other provisions, as in Stanley v. Bunce ^ 
 and Billingsley v. Bunce,* where the deeds covered all the 
 merchandise, which the grantor might " at any time within 
 twelve months purchase for the purpose of renewing or re- 
 plenishing said stock." This clause, it was held, neces- 
 sarily implied that the grantor " should retain possession of 
 
 1 7 Mo. 151. - Walter v. "Wimer, 24 Id. 63. 
 
 » 7 Id. 245. ' 27 Id. 269. 
 
 ' 8 Id. 332. 8 28 Id. 547. 
 
 * Milburn v. Waugh, 11 Id. 369. 
 
 » Brooks V. Wimer, 20 Id. 603; Martin v. Maddox, 24 M. 475; Martin v. 
 Bice, 24 Id. 581. 
 86 
 
DOCTKINE OF TKE AMERICAN MAJOEITY. § 56 
 
 his goods and proceed with his business as a merchant." 
 These principles are reaffirmed in Armstrong v. Tuttle ^ and 
 Lodge V. Samuels,' and so stands the law in Missouri. It 
 is true the Supreme Court of this State found itself, in 
 State V. Tasker^ and Voorhis v. Langsdorf,* embarrassed 
 in construing deeds that covered goods "which may be 
 added from time to time to said stock," and " all things 
 whatsoever now, or that may be hereafter, used, bought, or 
 belong to the said party of the first part in the course of 
 his usual trade or business ; ' ' and was unable to find in 
 these provisions an intent, necessarily implied, to reserve 
 the po^er of sale in the usu-al course of business. So the 
 instruments in these cases were upheld, while the principle 
 governing the earlier cases was still recognized. But the 
 court had, in Eeed v. Pelletier,^ applied the rule that an 
 agreement of the grantee to allow the grantor to continue 
 selling the goods, could be established by very slight evi- 
 dence, so as to defeat the conveyance ; and in Hall v. Webb,® 
 Napton, J., who prepared the opinions in the two cases in 
 31 Mo., had expressly disavowed the authority of Judge 
 Story's opinion in Mitchell v. Winslow,' and antagonized 
 his views. Lodge v. Samuels, in its turn, had tended to a 
 renunciation of the exceptions adopted in State v. Tasker 
 and Voorhis v. Langsdorf . There the mortgage conveyed 
 "the entire stock in the broom-making business lately 
 owned by " the grantors, " consisting of all the broom- 
 corn on hand, and all the brooms and machinery," and left 
 the grantors in possession. From these recitals the plain 
 meaning was inferred that the grantors were to continue to 
 manufacture and sell brooms ; and the deed was declared 
 fraudulent and void upon its face. 
 
 1 34 Mo. 432. ' 28 Id. 173. 
 
 ' 50 Id. 204 (1872). • 28 Id. 408. . 
 
 3 31 Id. 445. ' 2 Story, 630. 
 
 ' 31 Id. 451. 
 
 87 
 
§ 56 FEAUDTJLBNT MORTGAGES OF MEECHANDISE. 
 
 But in the later cases of Weber v. Armstrong* and 
 Hewson v. Tootle,* this court disregarded Lodge v. Sam- 
 uels on this point, and returned to the exceptions an- 
 nounced in State v. Tasker and Voorhis v. Langsdorf. 
 It is plain, however, that the distinctions introduced by 
 these decisions into, the jurisprudence of Missouri are 
 technical, and i-elate to the questions of evidence and 
 procedure, and in no way affect the substantial law 
 of the subject. The substantive rule adopted in the 
 earlier cases is expressly recognized and approved. But 
 it is considered that the court should draw no conclu- 
 sions from certain equivocal language in the deed, be- 
 cause it is so easy to introduce evidence as to the extent 
 to which sales were actually made by the mortgager, and 
 then let the jury find the facts. In Voorhis v. Langsdorf* 
 it was said : " The court is not called upon or warranted in 
 pronouncing a deed void upon a mere conjecture. It is 
 easy to show, aliunde, how the truth is, and go to the jury 
 on the facts. If they are satisfied that this was the under- 
 standing and intention of the parties, where the deed may 
 be silent on the subject, the same result follows as though 
 there was an express or implied stipulation in the instru- 
 ment. The jury will pronounce it void, under instructions 
 from the court, if the evidence warrants such a conclusion." 
 And this was the purport of the distinctions taken in the 
 later cases above referred to. In Weber v. Armstrons, 
 where there was no evidence, outside the instrument, of an 
 agreement to allow sales, the court found " not a syllable in 
 the instrument from which it can be fairly implied, much less 
 from which it must necessarily be implied, that the grantors 
 were to have the power to sell." In Hewson v. Tootle, the 
 court found considerable evidence to support the view that 
 the sales were allowed only to raise money to be applied on 
 
 1 70 Mo. 217 (1879). » 72 Mo. 632 (1880). » 31 Mo. 451, 
 
 88 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 57 
 
 the mortgage debt. In the first case, the judgment was 
 reversed and the case was remanded for a new trial, in con- 
 formity with the law as stated in Brooks v. Wimer, Stan- 
 ley V. Bunce, and Billingsley v. Bunce, namely, that if 
 " the grantor is to retain possession with a power of sale, 
 the court will declare the deed to be void as a matter of 
 law ; ' ' which rule was in no way affected by anything said 
 in the last named case of Hewson v. Tootle. 
 
 § 57. The doctrine adhered to ; intent of parties im- 
 material. — The rule of Brooks v. Wimer and the earlier 
 cases was expressly aflSrmed and applied in White v. 
 Graves,^ to a case where the goods mortgaged were to be 
 retained by the mortgager " as stock in trade," from which 
 it appeared to the court that " the goods were to remain in 
 possession of the grantor and be disposed of in the usual 
 eourse of business." It was applied also as settled law, by 
 the St. Louis Court of Appeals, in State v. Jacob,* Cator v. 
 Collins,^ and State v. Mueller ; * and it was recognized as 
 such in Greeley v. Eeading." 
 
 Throughout these cases in Missouri runs the idea, dis- 
 tinctly expressed, that the applicability of this rule does 
 not depend in any manner upon the intentions of the par- 
 ties. Frequently, it is expressly declared as a distinct rule 
 of law, that the tendency of these transactions is fully as 
 fraudulent as would be a fraudulent intent of the parties ; 
 these two elements of actual fraud being clearly distin- 
 guished.* In State v. Mueller,' the language of the court 
 was : ' ' The intentions of all parties may have been excellent, 
 but the arrangement is one which the law will not allow an 
 insolvent debtor to make." 
 
 1 68 Mo. 218 (1878). s 2 Mo. App. 225. 
 
 ' 2 Mo. App. 183 (1876) * 10 Id. 87. 
 
 5 74 Mo. 309 (1881). 
 
 • State V. Tasker, State v. Jacob, Brooks ». Wimer, supra; State w. 
 D'Oench, 31 Mo. 453. 
 I 10 Mo. App. 87. 
 
 89 
 
§ 59 FEAUDULENT MORTGAGES OP MEKCHANDISE. 
 
 Thompson v. Foerstel ^ was distinguished from the cases 
 above referred to, by the circumstance that the power of 
 sale of the property (consisting of horses, cattle, wagons, 
 and farm utensils) was to be exercised only by consent 
 of the mortgagee, and the proceeds thereof were all still to 
 remain under the lien ; which arrangement was sustained as 
 valid. In Nash v. Norment,^ where the mortgage itself was 
 declared invalid as a security, the new transaction of the 
 delivery of the property was held to give the mortgagee a 
 title thereto. 
 
 § 58. Liimltations upon the application of the rule. — = 
 
 If it be stipulated that all the proceeds of sales made by the 
 grantor while he remains in possession, shall be applied to 
 the payment of the debts secured, presumptions will in Mis- 
 souri be in favor of the transaction, and it will be sustained 
 in the absence of evidence tending to show that the pro- 
 ceeds of sales were not so applied.^ 
 
 The application of the rule in Missouri, is in practice 
 subject to the limitation that the fraudulent mortgage will 
 be void only as to those goods which are subject to such a 
 power of sale, and will be valid as to the residue ; * a doc- 
 trine which is disallowed in some of the States. 
 
 Tennessee. 
 
 § 59. Early cases in Tennessee. — Conflicting deci- 
 sions. — In Tennessee, early cases had applied a similar 
 rule to mortgages upon property consumable in the use, 
 holding that the reservation of possession and use in such 
 cases was necessarily a reservation for the benefit of the 
 debtor, and therefore fraudulent; " and those decisions 
 
 1 10 Mo. App. 290. 
 
 2 5 Mo. App. 545. 
 
 ' Metzner v. Graham, 57 Mo. 404 ; HewBon v. Tootle, supra. 
 * State V. D'Oench, 81 Mo. 453; Donnell v. Byem, 69 Mo. 468. 
 ' Sommervilla v. Horton, 4 Yerg. 540; 26 Am. Dec. 242; Simpson v. 
 Mitchell, 8 Yerg. 416. 
 90 
 
DOCTEINE OF THE AMERICAN MAJORITY. § 59 
 
 were followed as authority in Alabama, Massachusetts, 
 Missouri, Mississippi, and other States — in some of them 
 being relied on as applying in principle to the cases of 
 mortgages on stocks of goods. It, therefore, appears sin- 
 gular that, in respect to the latter class of cases, there 
 should have been any doubt or vacillation exhibited in the 
 Tennessee decisions. But the reservation to the use of the 
 grantor by way of sale of the mortgaged goods has not al- 
 ways appeared as clear to the Supreme Court of this State 
 as has the reservation, intrinsically no plainer, by way of 
 use and consumption. In the first case which arose. Gait 
 V. Dibrell,^ it took but few words to determine, without 
 reference to authorities, that a reserved power of sale made 
 such a mortgage fraudulent and void in law, though there 
 was no fraud in fact, and nothing more was intended than 
 an honest design to secure a just debt ; because such ar res- 
 ervation "is totally inconsistent with the rights of other 
 creditors, and of necessity vitiates " the transaction. In 
 Peacock v. Tompkins,^ the deed of trust secured, besides 
 certain bona fide debts, an indebtedness which was created 
 only to represent a sum to be advanced to the grantor for 
 the support of himself and family, and for the further con- 
 duct of his business ; and it was declared to be for this 
 reason fraudulent by operation of law, without reference 
 to the intention of the parties.^ 
 
 Saunders v. Turbeville* tended to a contrary rule, 
 though not decisive. There a sort of qualified joint-posses- 
 sion between the grantor and trustee was provided for ; but, 
 in fact, the grantor had possession and control for his own 
 purposes and benefit, without regard to the deed of trust. 
 The arrangement was sustained as a valid security, on the 
 
 1 10 Yerg. 145 (1836). 
 
 ' Meigs, 317 (1838). \ 
 
 ^ See a similar case in Conn., cited in sect. 80. 
 
 * 2 Hum. 272. 
 
 91 
 
§ 60 FEAUDXJLENT MOETGAGBS OF MEKCHANDISB. 
 
 ground that the debtor's offence in using the property for 
 his own benefit was a slight one, and was committed with- 
 out the knowledge or assent of the creditors secured by the 
 deed of trust. 
 
 But in Doyle v. Smith/ where the terms and circum- 
 stances of a general assignment for creditors, to a trustee 
 who took possession, showed that the main object of the 
 transaction was the continuance of the debtor's business, 
 the plain intent to reserve a benefit to the latter was held 
 suflicient to vitiate the entire transaction. The pendulum 
 oscillated to the other extreme in Hickman v. Perrin,^ where 
 the objections to a reserved power of sale were abandoned, 
 and a mortgage on a stock of goods was sustained on the 
 two grounds, drawn from the Michigan case of Gay v. Bid- 
 well,^ first, that no creditors appeared with claims older 
 than' the mortgage, and that subsequent creditors could not 
 complain of the transaction, (as if it were like a voluntary 
 conveyance), and second, to hold that a merchant could not 
 make such a mortgage without closing his doors would be 
 to hold that no merchant could mortgage his stock. 
 
 § 60. The question settled ; Bank v. Ebbert, and later 
 cases. — But all these aberrations have been corrected in 
 the case of Tennessee National Bank v. Ebbert,* where a 
 trust deed upon a stock of goods allowed the grantors to 
 continue their business, making sales as before, and to re- 
 plenish their stock from time to time, but professed to make 
 this " subject to all the provisions of the trust." In a full 
 and logical opinion, the characteristics of such mortgages 
 are freely and thoroughly examined, and the correct rule is 
 laid down with such perspicuity as to give to this case a 
 leading position on the subject. The peculiar views ad- 
 
 ' 1 Cold. 15. 
 2 6 Cold. 135. 
 » 7 Mich. 519. 
 
 « 9 Heis. 158; 2 So. Law Kev. (1st series) 175, (1872). 
 92 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 60 
 
 vanced in Hickman v. Perrin are expressly repudiated. It 
 is said: "Admitting that there was no specific intent to de- 
 fraud any particular creditor, or no actual fraud in fact, 
 yet here are such facilities for fraud, contracted for on the 
 face of the deed, that it must be held as wanting in legal 
 good faith, on the plain principle that every reasonable man 
 is presumed to intend the probable consequences of his own 
 acts ; and, besides, there is clearly a benefit contracted for 
 to the grantors on the face of the deed, and a prejudice to 
 the rights of other creditors." " We hold that the deed of 
 trust in question cannot be sustained, on the plain principle 
 that it does hinder and delay creditors in the enforcement of 
 their claims, not by a bona fide appropriation of the prop- 
 erty of the debtor to the payment of his preferred creditor, 
 which would be allowable, but by placing it in his own pos- 
 session and control, with absolute power of disposition, and 
 the means of using the proceeds for his own benefit, as before 
 the conveyance ; and that such stipulations are not only in- 
 consistent with the idea of a mortgage, but tend inevitably 
 to give a fraudulent advantage to the debtor over his other 
 creditors, while his property is protected by being in the 
 name of a trustee." " The rule we lay down in this case 
 requires only that there be a bona fide and certain appropri- 
 ation of the property for the benefit of a creditor; not a 
 colorable one, in which the creditors have only a contingent 
 interest, dependent on the good faith of the assignor, while 
 the assignor himself has an equally certain interest secured 
 to him." 
 
 This rule remains the law in Tennessee. It was applied 
 in the case of Woodward v. Goodman,^ to a somewhat 
 different instrument, in which, however, the reservation for 
 the grantor appeared in the provision allowing him to con- 
 tinue to use the property conveyed by deed in trust, while 
 the trustee could not sell it, and the creditors could thus 
 
 1 8 Cent. L. J. 43. 
 
 93 
 
§ 61 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 have, not the property, but only the profits derived from its 
 use, subjected to their demands. Under the principles set- 
 tled in Doyle v. Smith and Bank v. Ebbert, this trust-deed 
 was declared void on its face. 
 
 The rule was again expressly applied in the later case of 
 McCrasly v. Hasslock,^ where, after stating the nature and 
 character of the transaction between the parties, the case 
 of Bank v. Ebbert is referred to as an authority conclusive 
 to stamp the transaction as a fraud. 
 
 In the recent case of Nailer v. Young,^ the same author- 
 ity is cited as controlling the case then before the court, 
 where the vendor of a stock of goods attempted to reclaim 
 them by virtue of a recital in the note given for the pur- 
 chase price, as follows : "A lien is retained on said stock or 
 stocks of goods at Crowder's mill until the purchase money 
 is paid." The proof showed that the goods were sold for 
 the express purpose of being disposed of at retail by the 
 vendee, in his own business, and for his own benefit, and 
 were in part so disposed of. 
 
 § 61. Fraudulent tendency a vicious feature in such 
 transactions. — The opinion in the last named case was de- 
 livered by Cooper, J., who had, as Chancellor, previously 
 decided the case of Phelps v. Murray,' in which the princi- 
 ples applicable to this class of cases had been examined 
 with care and minuteness. A stock of goods had in this 
 case been covered by a trust deed, which on its face was de- 
 signed to include accretions of after-acquired goods, and 
 allowed sales, the profits thereof to be applied to the pay- 
 ment of the secured debt. It was claimed that this convey- 
 ance should be decreed valid by a chancery court, because 
 enforceable in equity. The learned judge, however, dis- 
 tinguished the case from those where a contract to mortgage 
 after-acquired property is enforceable in equity, by the cir- 
 
 » 4 Baxter, 1. « 7 Lea, 735 (1881). s 2 Tenn. Ch. 746. 
 
 94 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 62 
 
 cumstance that it was an attempt to create a lien on chat- 
 tels, whose only profitable use is as articles of commerce, 
 and as to which an unlimited power of disposition was re- 
 served. He further explained that such conveyances are 
 not deemed fraudulent by reason of any presumption of 
 fraud which is in conflict with the general rule that the in- 
 tent to defraud is a fact to be proven in every case ; but 
 that they are condemned because they are against public 
 policy, in that they throw open " too wide a door for possi- 
 ble fraud;" they are contracts "invalid at law, and not 
 enforceable in equity." 
 
 A dictum in the recent case of McCombs v. Guild, ^ the 
 opinion being by the same judge, shows that the two cases 
 last named, and that of Bank v. Ebbert, are considered as 
 together evidencing the rule on this subject in Tennessee. 
 It was there stated further that, in analogy to this doctrine, 
 the court would probably treat a sale of chattels, reserving 
 title to the vendor, but allowing the vendee to sell them as 
 as his own, as " tending to hinder and delay creditors," or 
 as "contrary to public policy and void," in accordance 
 with the New York cases above cited ,^ and the Connecticut 
 case of Lewis v. McCabe.^ 
 
 Mississippi. 
 
 § 62. The doctrine advisedly adopted in Mississippi. — 
 
 In Harman v. Hoskins * the Supreme Court of Mississippi 
 follows the ruling in Kobinson v. Elliott and Collins v. 
 Myers, and holds that a conveyance in trust of a stock of 
 goods in trade, with a provision allowing the grantor to 
 carry on his usual business, is fraudulent and void. Like 
 some other courts, this court infers from the vicious char- 
 acter of such an instrument that the parties thereto intend 
 
 1 9 Lea, 81. s See post, sect. 79. 
 
 ^ Ante, sect. 42. * 56 Miss. 142 (1878). 
 
 95 
 
§ 62 FBAUDULENT MOBTGAGES OF MERCHANDISE. 
 
 to commit the fraud that results. It is said in this case: ^ 
 "The effect and operation of a written instrument is a 
 question of law, and where the natural and necessary con- 
 sequence of its provisions is to delay, hinder, or defraud 
 creditors, the court will so declare. The intent is gathered 
 from the instrument, and no external aid is necessary to de- 
 velop it. A party will be held as ' intending ' the natural 
 and inevitable effects of his acts. If his deed necessarily 
 operates to interpose unreasonable hindrance and delay to 
 creditors, or to defeat them altogether, the intent will be a 
 conclusion of law." Though this view of these cases seems 
 based on the idea that a fraudulent intent must always ap- 
 pear, it does not in substance differ from the view that the 
 transaction is actually fraudulent, irrespective of intent. 
 The intent here imputed to the grantor is found alone in the 
 instrument and in the circumstances of the case, not in his 
 motive ; and the view of the question above presented is 
 equivalent to saying that the transaction is inherently fraud- 
 ulent. In the same case, it was further said : " Though the 
 act, in a moral view, was entirely fair, suggested by affec- 
 tion, and though the real purpose was to pay all debts, yet 
 if the conveyance be of the character and operation just 
 described, it will not stand against creditors." That char- 
 acter and operation were furthermore portrayed in these 
 succinct terms:'' "If the deed should be valid, the effect 
 would be that White held a shifting lien, which took hold 
 of the goods on hand, and as these were sold off, it separ- 
 ated itself from the effects in the hands of Harman's cus- 
 tomers, but at once fastened upon the note or book-account 
 owing by the buyers ; and when the merchandise was brought 
 into the store, it at once became impressed with the lien ; 
 from the merchandise it passed to the debts of the custom- 
 ers who bought it. And thus, the plan was that the busi- 
 
 ' p. 145. 1 p. 147. 
 
 96 
 
DOCTRINE OF THE AMEKICAN MAJOEITY. § 63 
 
 ness should revolve in this cycle, the subjects of the lien 
 undergoing mutations from goods to debts, for the space of 
 three years. In the meantime, the other creditors must 
 stand the varying fortunes of the venture, without power 
 or right to move against the goods or the credits of Har- 
 man, for White's security attaches to both, as they may be 
 severally acquired." It was observed that not only as to 
 the cash receipts from the business, which were subject to 
 the " control and disposition " of the grantor,' but in other 
 respects also, the arrangement would operate greatly to his 
 benefit. For these reasons the trust deed was declared 
 fraudulent as to the creditor who attacked it. 
 
 § 63. Ejarlier recognitions of the propriety of the 
 rule. — Tliis was the first case in which the question was 
 fully considered by the Supreme Court of Mississippi. 
 Earlier cases had, however, led the way to this decision. 
 In Farmer's Bankw. Douglas^ the question was presented 
 of a reservation, under a mortgage conveying farming 
 property,' implements, crops, and furniture, of the right to 
 use property consumable in the use, such as corn, fodder, 
 and potatoes. The same principle was applied here as in 
 Harman v. Hoskins, the court saying: ^ " The mortgaging 
 of property, the use of which involves its consumption, is 
 an evidence of fraud, not indeed conclusive, but of much 
 weight. Unless it be explained satisfactorily, it must cause 
 the condemnation of the instrument ; and it imposes the 
 burthen of proof upon those claiming under such instrument ; 
 and when the right to use it is also reserved in the mortgage 
 itself, it is fraudulent upon its face. In this case, one of the 
 debts secured by the mortgage did not become due until 
 twenty-eight months after its execution, and the other until 
 more than four years. The corn, the fodder, the potatoes, 
 and perhaps other articles, would be destroyed in much less 
 
 ' 11 Smed. & M. 469 (1848). ' p. 540. 
 
 7 97 
 
§ 63 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 time. It is thus very manifest that the object was not to 
 apply these things to the payment of the debts, but to se- 
 cure the debtor in their possession and enjoyment. The 
 reservation in the conveyance, of so much of these articles 
 as was necessary for the support of the property, puts an 
 impress of fraud upon it, from which there is no escape. 
 It was a direct benefit secured to the debtor at the expense 
 of his creditors, which the law does not sanction." 
 
 In Summers v. Eoos * a case was jiresented of a trust 
 deed conveying, among other property, a stock of goods in 
 trade, to secure a debt due in ninety days. The deed was 
 sustained as valid, and the case was distinguished from Col- 
 lins V. Myers and similar cases, by the circumstances that 
 here was no power of sale contained in the deed, and that 
 the trustee had taken possession under the deed before ad- 
 verse creditors had asserted their claims. It appeared in 
 the deed that the grantor was to retain possession until de- 
 fault, and if he failed to pay at maturity, he was then " to 
 deliver possession of the real estate and of so much of said 
 personal property as may then be on hand." This was not 
 construed as being equivalent to a power of sale. Evidence 
 that the beneficiaries had permitted the grantor to make 
 sales of the goods was held to be only a circumstance to go 
 to the jury. The case, it should be observed, was a suit at 
 law to try the right of property in the goods. But in the 
 case of Hilliard v. Cagle,' the same conveyance came again 
 before the court for examination, in a chancery suit brought 
 by creditors -of the grantor to set aside the conveyance ; 
 and on the whole case as then presented, the deed was de- 
 clared fraudulent and void as to other creditors. In part, 
 the conduct of one of the beneficiaries under that deed, in 
 inducing others to sell goods to the grantor on credit, in- 
 fluenced the court to its conclusions. But in the cai-eful 
 
 ' 42 Miss. 749; 2 Am. Kep. 653 (1869). ' 46 Miss. 309 (1872). 
 
 98 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 64 
 
 review by the court of all the facts of the case, it appears 
 that the circumstance of the grantor's continuing to trade 
 with the goods made a decided impression. Among other 
 things, it was said: "The arrangement between Baggett 
 and Summers was antagonistic to the regular and usual 
 course of business, tended to break down commercial con- 
 fidence and credit, and to entail losses upon those who trusted 
 their goods and property to the retail merchant." The in- 
 tent of the parties was held immaterial ; the court did not 
 think the arrangement was made " with a fraudulent scheme 
 and purpose, to defeat existing or future creditors ; " but 
 still considered •' the whole scheme fraudulent as to subse- 
 quent creditors, as much so as if it had been contrived with 
 that motive and for that object." The decision in Sum- 
 mers V. Eoos was interpreted as meaning simply that the 
 conveyance was not void upon its face. 
 
 § 64. The doctrine established in Mississippi. — In the 
 recent case of Joseph v. Levi,' the doctrine of Harman v. 
 Hoskins is reaffirmed, briefly and unqualifiedly. The 
 grounds for this opinion as to such conveyances are stated 
 to be, " because of their susceptibility of abuse, by reason 
 of the ease with which they may be employed for wrong 
 purposes, to the injury of creditors." And this is stated 
 as the settled doctrine in Mississippi, in Baldwin v. Flash,^ 
 where it was held that the claim of the beneficiary to the 
 goods conveyed by a similar instrument might be sustained, 
 on the ground that prior to the intervention of adverse 
 creditors, and by a new, independent act, he had taken, and 
 the grantor had surrendered to him the goods on hand ; and as 
 to this, the case was to be submitted to a jury under proper 
 instructions as to the good faith and honest intent of such 
 surrender. This, if free from fraudulent intent, would 
 
 ■> 58 Miss. 843 (1881). ^ 58 Miss. 593 ; 59 Id. 61. 
 
 99 
 
§ 66 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 present only the ordinary occurrence of a preference of one 
 creditor by an embarrassed debtor. 
 
 Colorado. 
 
 § 65. The doctrine well settled in Colorado. — In this 
 State, in the case of Bank v. Goodrich,^ a mortgage on a 
 stock of goods in trade, which allowed the mortgager to 
 " retain possession of the mortgaged property, and use and 
 enjoy the same, until default made," was held to be fraud- 
 ulent and void ; the rule being regarded by the court as 
 " too well settled to require argument," though the Illinois 
 and some other cases were referred to as authorities. The 
 evidence furnished by the mortgage itself was supplemented 
 by proof that the mortgagers not only continued in posses- 
 sion of the goods, but carried on their business in its or- 
 dinary course, manufacturing and selling goods as usual, to 
 the knowledge of the mortgagee. 
 
 Oregon. 
 
 § 66. Oregon adopts the doctrine ; registration of in- 
 strument immaterial. — In Oregon, the earliest case was 
 Orton V. Orton,'' which presented the question fairly, the 
 property mortgaged being a stock of goods, the mortgager 
 of which retained possession and the power of sale, and 
 applied the proceeds of sales to his own use with the per- 
 mission of the mortgagee ; but the mortgage was duly filed 
 for record, and it was claimed that the statutes, provid- 
 ing for the registration of such mortgages, removed all 
 presumptions of fraud which could arise in any such case. 
 It was, however, held that this statute did not in any man- 
 ner apply to the case, but the question still remained to be 
 considered, as to the legal effect of such an agreement, in 
 view of the rights of the mortgager's creditors. The mort- 
 
 1 3 Colo. 139 (1876). « 7 Oregon, 478 (1879). 
 
 100 
 
DOCTEINE OF THE AMERICAN MAJORITY. § 67 
 
 gage was held fraudulent and void, in accordance with the 
 decisions in Eobinson v. Elliott^ and Collins v. Myers,* 
 which were recognized as representing " the weight of 
 authority as well as reason." 
 
 The question again arose in Jacobs v. Ervin,' in which 
 case the court approved and followed Orton v. Orton, say- 
 ing of the doctrine of that case: "The reasons upon 
 which it is based seem to us to be sound, and the author- 
 ities cited in its support are both able and well consid- 
 ered. We have no hesitancy in affirming it here as a 
 sound and authoritative exposition of the law upon the 
 subject in this State." In the later case of Bremer v. 
 Fleckenstein,* this was declared to be " settled doctrine " 
 in Oregon. In both these cases, the power of sale was 
 proven by a verbal agreement, additional to the mortgage, 
 which, it was said, " as effectually invalidates the mortg- 
 age as an agreement incorporated into the mortgage 
 itself." 
 
 West Virginia. 
 
 § 67. The reserved power of sale proven by implication 
 In West Virginia. — The few cases of this class presented 
 in West Virginia have all been decided in conformity to 
 this view. Kuhn v. Mack ^ was a case of a trust deed con- 
 veying, among other property, a stock of goods, with stip- 
 ulations referring to sales made by the grantor " in the 
 regular course of his business . ' ' The Court of Appeals held 
 this reservation of a power of sale ' ' inconsistent with the 
 object of the trust, and adequate to the defeat thereof ; " 
 citing Lang v. Lee° and other Virginia cases. The same 
 principle was applied in Garden v. Bodwing,' where a sim- 
 ilar trust deed, though it contained no express reference to 
 a power of sale or disposition, recited that the grantor 
 
 1 22 Wall. 513. » 9 Ore. 52. « 3 Kand. 410. 
 
 ' 16 Ohio, 647. * 9 Id. 266. ' 9 W. Va. 121 (1876). 
 
 s 4 W. Va. 186 (1870). 
 
 101 
 
§ 68 FRAUDULENT MORTGAGES OF JMERCHANDISE . 
 
 "agrees and obligates himself to keep always on hand a 
 stock of goods equal in quality, description and value, to 
 the personal property herein above mentioned, until the 
 debt which this deed is drawn to secure, is paid in full." 
 Deducing from this clause the inference that the grantor 
 thereby retained not only possession, but an absolute power 
 of sale, the court held the deed fraudulent, though there 
 was no other proof of fraudulent intent. And in Gardner 
 V. Johnston,^ where a miller had conveyed all his milling 
 stock and property to secure debts due in about a year and 
 five months, the circumstance that a large portion of the prop- 
 erty conveyed was grain, purchased for milling, was taken 
 as conclusive of an understanding that the grantor should 
 use and dispose of the property ; and the case was held to 
 call for an application of the rule in Lang v. Lee and other 
 similar cases, to wit: that where there are provisions in the 
 deed which will enable the grantor to defeat its expressed 
 object as a security, the deed is fraudulent ^er se. Neces- 
 sary implication was held as effective, for such a construc- 
 tion, as an express provision m the deed. 
 
 The Federal Courts. 
 
 § 68. The doctrine enforced in the Circuit and Dis- 
 trict Courts. — There are numerous cases in the United 
 States Circuit and District Courts, many of which arose in 
 bankruptcy, in which mortgages of this class have been 
 held fraudulent and void, not with reference to the provi- 
 sions of the bankrupt law, but independently of that or 
 other statutes, and under the general rules of the common 
 law. Decisions to this effect have been given in such cases, 
 in the federal courts of nine different States ; and several 
 of these were rendered prior to Eobinson v. Elliott. In 
 Smith V. McLean,^ Ke Forbes,' and Re Bloom,* the power 
 
 ' 9 W. Va. 403. s 5 Biss. 510 (Ilia.) 
 
 ^ 10 N. B. R. 260 (Miss.). * 17 N. B. R. 425 (New Jersey). 
 
 102 
 
DOCTKINK OF THE AMERICAN MAJORITY. § 68 
 
 of sale and disposition appeared upon the face of the instru- 
 ment. In McLean v. Bank,* Bowen v. Clark,^ReKahley,' 
 Re Cantrell,* Re Morrill,* Re Burrows,® Smith v. Ely,' 
 Catlin V. Currier,* and Re Kirkbride,' it was shown by evi- 
 dence aliunde. In Crooks v. Stuart,'" there were two 
 mortgages, one of which exhibited such a power upon its 
 face, it being shown as to the other by evidence aliunde. 
 It appeared to the court by clear implication from the stip- 
 ulations of the instrument, in Re Manly; ** and, inferen- 
 tially, in the same manner also in Re Perrin.'*' Two late 
 cases in the Supreme Court for the District of Columbia, 
 Smith V. Kenney'* and Fox v. Davidson,** dispose of the 
 general question in like manner; though in the first named 
 case, the point was not under decision, the case turning on 
 another question. In Fox v. Davidson, the power of sale 
 appeared by clear implication. 
 
 In Re Kirkbride,** a case arising in Missouri, Dillon, C. J., 
 respected and applied the rule adopted in that State as to 
 such conveyances, and held the mortgage in question fraud- 
 ulent and void as to the goods in trade, though valid as to 
 the fixtures, which were not included in the reservation of a 
 power of sale. In this case the reservation appeared, not 
 on the face of the instrument, but from evidence aliunde. 
 
 1 3 McLean, 623 (Ohio. 1845). 
 
 2 1 Biss. 128; 5 Am. L. Keg. 203 (Wis. 1856). 
 
 3 2 Bis3. 383 ; 4 N. B. R. 124, 378 (Wis.). 
 * 6 Ben. 482 (New York). 
 
 5 2 Saw. 356 ; 8 N. B. E. 117 (Nevada). 
 
 6 7 Biss. 526 ; 5 C. L. J. 241 (Indiana). ' 
 ' 10 N. B. B. 553 (New York). 
 
 ' 1 Sawyer, 7 (Oregon). 
 
 » 5 Dillon, 116 (Mo.) 
 
 1" 2 McCrary, 13 ; 7 Fed. Eep. 800 (Iowa, 1881). 
 " 2 Bond, 261 ; 3 N. B. K. 75, 291 (Ohio). 
 " 7 N. B. R. 283 (New York). 
 " 1 Maokey, 12 ; 9 Wash. Law Rep. 69. 
 " 1 Id. 102; 9 Id. 26S. 
 15 5 Dillon, 116 (1878). 
 
 103 
 
§ 69 FRAUDULENT MOETGAGES OP MERCHANDISE. 
 
 Dillon, C. J., stated the Missouri rule as follows : "A con- 
 veyance of personal property to secure creditors, when the 
 grantor, by the understanding of the parties, expressed or 
 implied, is to remain in possession of the property, with a 
 power of sale, is void upon a principle of public policy em- 
 bodied in the State, irrespective of any question of actual 
 and intended fraud." 
 
 § 69. The fraud illustrated in the opinions of the 
 courts. — In Re Kahley,"^ the court said: "A mortgage 
 accompanied by such an agreement or consent is no protec- 
 tion to the mortgagee. Such an arrangement defeats its 
 essential nature and quality as a mortgage, so that it can- 
 not in a legal sense be called a security. It is nothing 
 more than the expression of a confidence by the mortgagee 
 in the mortgager." In Catlin v. Currier,^ it was said: 
 "The law allows the property pledged to remain in the 
 possession of the mortgager, if the mortgage is put on record 
 as notice to the world. But if the mortgage be also coupled 
 with a condition or agreement that the mortgager may treat 
 the goods as if he were the owner of them, may sell them at 
 his option and receive the proceeds to his own use, such 
 condition or agreement avoids the mortgage. The two can- 
 not stand together. Such use of the mortgaged property 
 by the mortgager is utterly inconsistent with the idea of 
 giving a pledge or security to the mortgagee. In legal 
 effect it is a sham ; a nullity ; a mere shadow of a mort- 
 gage, only calculated to ward off other creditors ; a convey- 
 ance in trust for the benefit of the person making it, and 
 therefore void as against creditors." "The law assumes 
 absolutely, and, beyond doubt correctly, that in no circum- 
 stances can such a transaction be upheld in justice to credi- 
 tors. That is this case, and whatever may have been the 
 intention of the parties, the law, for the protection of the gen- 
 
 • 2 Bi83. at p. 887 (1870). » 1 Saw. 12-14 (1870). 
 
 104 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 70 
 
 eral creditors of the debtor, declares the so-called mortgage 
 void, because made in trust for Daly." In Re Burrows,^ it 
 was said: " Such an agreement necessarily hinders and de- 
 lays other creditors; " and in Re Bloom, ^ the court said : 
 "A mortgage embraces a single idea, to wit: the pledge of 
 property as security for the payment of a debt. If it con- 
 tam other stipulations and provisions, which, in their neces- 
 sary effect, accomplish other results, and these other results 
 are unlawful, the whole instrument is void. The parties 
 assert that the end and purpose of the mortgage are to 
 enable the mortgager to sell for his own benefit the goods 
 and chattels specifically enumerated, and to make it a lien 
 upon all new goods brought into th^ . store. In other 
 words, it is a device, whereby the mortgager can carry on 
 his ordinary business, with all his property, present and 
 future, fully covered from his other creditors. An instru- 
 ment operating in this manner necessarily hinders, delays 
 and defrauds creditors." 
 
 § 70. Other cases in the lower courts ; the doctrine 
 recognized. — In Johnson v. Patterson,' Woods, J., while 
 deciding the case adversely, under the provisions of the 
 Georgia statute, gave unqualified recognition to the doctrine 
 of the common law, when unaffected bylegislation, in these 
 words : " To one unacquainted with the statute law of this 
 State * this case would present no difficulty whatever. The 
 general rule is, that a chattel mortgage, with possession left 
 in the mortgager, and power of sale, is fraudulent and void." 
 Hawkins v. Bank® and Overman v. Quick 'in like manner 
 recognize the doctrine as well established ; but in each of 
 
 » 7 Biss. 526. 
 
 = 17 N. B. E. 425 (1878). 
 
 ' 2 Woods, 443, (Georgia, 1875). 
 
 * See reference to this statute, post, sect. 111. 
 6 1 Dillon, 462 (Minn.). 
 
 • 8 Biss. 134. 
 
 105 
 
§ 70 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 these cases, the mortgagers being allowed to make sales only 
 as agents for the mortgagee who was to control the pro- 
 ceeds, the transaction was held valid. In Harvey v. Crane ^ 
 and Re Eldridge,' the question, though possibly involved, 
 was not raised or considered. The former of these cases 
 was considered onjy as to the statutory validity of chattel 
 mortgages, and the latter only as to the matter of after 
 acquired property. In Bank v. Small,' the power of sale 
 appeared by implication, but the question was not consid- 
 ered ; and the main question discussed was that of a delay 
 in recording the mortgage, which was considered and de- 
 cided with reference to the intent of the parties, the court 
 referring afterward to Mitchell v. Winslow* as an authority. 
 Field V. Baker* in' like manner ignores the question which 
 might have been raised upon the record, and the case is 
 considered solely with reference to other Questions as to the 
 validity of chattel mortgages. 
 
 In Johnson i;. Patterson,' it will be observed that the rule 
 under the Georgia statute, which is recognized and applied 
 in the decision, is taken as a rule of property, which should 
 be locally binding upon the federal courts. The same idea 
 evidently controlled the decision in Ee Kirkbride.' Per 
 contra, in Crooks v. Stuart,* the doctrine of Robinson v. 
 Elliott was held conclusive upon the court, for the reason 
 that no Iowa statute made any contrary provision ; and the 
 well settled doctrine of the Iowa courts on this subject was 
 disregarded, McCrary, C. J., saying: "This is a doctrine 
 of general jurisprudence, not depending for its support 
 upon any provision of State law ; and we are, therefore, 
 bound by the decision of the Supreme Court of the United 
 States." 
 
 1 2 Biss. 496 ; 5 N. B. R. 218 (111.). ' 12 Blatch. 438. 
 
 ' 2 Biss. 362 (Wis.). « 2 Woods, 443. 
 
 » 7 Ped. Bep. 837 (Me. 1881). ' 5 Dillon, 116. 
 
 ' 2 Story, 630. s 7 ped. Kep. 800; 2 McCrary, 13. 
 106 
 
DOCTRINR OF THE AMERICAN MAJORITY. § 71 
 
 § 71. An earlier decision by the Supreme Court. — . 
 
 This principle of law was not wholly devoid of support in 
 the expressed views of the Supreme Court, even before 
 Robinson v. Elliott, though it was in that case considered 
 and discussed as a new proposition in that forum. The 
 question arose incidentally in Bank of Leavenworth v. 
 Hunt.^ In that case it appeared by evidence outside the 
 mortgage that the mortgagers of a stock of goods in trade 
 remained in possession and continued to sell the goods, with 
 the assent of the mortgagee, until a certain time, when the 
 balance remaining was transferred to the mortgagee under 
 the mortgage. The question at issue was, whether this 
 transfer, being made in view of and just prior to the bank- 
 ruptcy of the mortgager, was valid and effectual under the 
 bankrupt law. The Supreme Court declined to assume it 
 to be so in the face of the testimony, which showed it to 
 be invalid in several respects ; one of which was that, if 
 the facts had been found by the jury which the testimony 
 tended to establish, as to the power of sale, the mortgage 
 would have been fraudulent and void as against creditors, 
 under the common-law rule announced in Wood v. Lowry.^ 
 The recent case of Wood v. Weimar,' which arose in 
 Michigan, may be here noticed, though merely because it 
 exhibits an entire disregard of the question. It presented 
 a mortgage on a stock of goods, under which the mortgager 
 was suffered to continue business and to sell goods as usual, 
 and creditors attached the remaining goods before the ma- 
 turity of the preferred debt, complaining as to the state- 
 ment made of the amount thereof. The case was heard in 
 the Supreme Court on the errors assigned, and neither by 
 the counsel or the court was the question of the reserved 
 power of sale presented, discussed, or considered. Appar- 
 ently this question was treated by counsel as one not fairly 
 arising in a Michigan case.* 
 
 Ml Wall. 391 (1870). » 17 Wend. 492. ' 104 U. S. 786. 
 
 * See the Michigan law on this subject stated, poii, 8ecte.88, 89. 
 
 107 
 
§ 72 FKAUDULENT MORTGAGES OF MEKCHANDISE . 
 
 § 72. Antagonistic cases in the TJijited States courts. — 
 In addition to Brett v. Carter,^ there are in the reported 
 decisions of the United States Circuit Courts, two cases 
 which hold the same view of the law, and another in which 
 that view is very strongly favored although not expressly 
 adopted. The case last referred to is Miller v. Jones,^ in 
 which Associate Justice Strong heard on appeal a contro- 
 versy involving a mortgage on a stock of goods. The only 
 point decided, with reference to the question of a power of 
 sale, is one of practice. The trial court had thought the 
 implication of a power of sale so strong upon the face of 
 the mortgage, that the case would fall within Robinson v. 
 Elliott, and he accordingly directed a verdict adverse to the 
 conveyance. This was, on the appeal, held erroneous. 
 The case was distinguished from Eobinson v. Elliott, by 
 the circumstance that no power of sale was given in the in- 
 strument, but that its recitals expressed by implication a 
 denial of any such power. Though the proof showed 
 that such power had been exercised, it was never- 
 theless erroneous to direct a verdict. The existence or 
 non-existence of an agreement or understanding to allow 
 sales is a fact to be found by the jury, under proper in- 
 structions. In reversing the decision of the District Court 
 on this ground, Mr. Justice Strong referred to the diver- 
 sity of opinion on the main question concerning the reser- 
 vation of a power of sale under such mortgages ; and while 
 he did not in any manner dissent from the conclusions 
 reached in Robinson v. Elliott, he spoke with apparent ap- 
 proval of the contrary authorities in Maine, Massachusetts, 
 Iowa, and Michigan, and said: " It has in many cases been 
 decided that a mortgage of chattels which permits the mort- 
 gager to remain in possession, and to dispose of the goods 
 in the ordinary course of his business, is not of course 
 
 I 2 Low. 458. » 16 N. B. K. 150 (Now Jersey, 1876). 
 
 108 
 
DOCTRINE OP THE AMERICAN MAJORITY. § 7S 
 
 fraudulent as a matter of law." In Re Bloom ,^ Nixon, J., 
 distinguished this case materially from Robinson v. Elliott. 
 Barron v. Morris'' was an appeal from the District Court 
 in Texas, heard by Mr. Justice Bradley in the Circuit 
 Court, involving a trust deed on carriages and harness, 
 which were used partly as a stock in trade. The case had 
 been tried by the district judge without a jury, and it ap- 
 peared in evidence that sales had been made by the grantor 
 in the conveyance with the knowledge and assent of the 
 beneficiary, the proceeds being sometimes, but not always, 
 applied to the secured indebtedness. The report of the 
 case is meager and unsatisfactory upon this point, and 
 the disposition made of the proceeds of sales does not fully 
 appear. The opinion of Mr. Justice Bradley is devoted 
 mainly to questions of practice, all that is said on the ques- 
 tion of the trust deed and the power of sale being that " the 
 fact that the bankrupt disposed of the property as his own 
 did not vitiate the deed as to the other creditors, but was a 
 matter that affected no one but Brush (the secured cred- 
 itor), and that the latter was not bound to apply the pro- 
 ceeds of the sales of the encumbered property to the secured 
 debt." 
 
 § 73. Mitchell v. Wlnslow examined. — The great name 
 of Mr. Justice Story has made the case of Mitchell v. Win- 
 slow * a leading and influential authority in support of the 
 supposed validity of this class of conveyances. It will be 
 seen, however, upon examination of this case, that the pre- 
 cise question was not carefully considered according to the 
 habit of this learned judge. The transaction presented was 
 a mortgage deed upon a manufacturing establishment, cov- 
 ering not only tools and machinery, but stock in trade ; the 
 debt secured to mature in four years, and the grantors '• to 
 
 1 17 N. B. B. 425. ' K N. B. B. 371 (1876). 
 
 * 2 Story, 630 (Maine, 1843). 
 
 109 
 
§ 73 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 hold and enjoy all and singular the premises hereby granted, 
 and to secure and take the rents and profits therefor, to and 
 for their own use and benefit." The grantors continued 
 their business in the usual way for two and one-half years, 
 when they became bankrupt ; and the suit was brought by 
 their assignee to recover property remaining on hand from 
 the mortgagee who had taken possession of it. For the as- 
 signee, it was argued that the reserved power and dominion 
 over the mortgaged property, with the right to sell for their 
 own use, reserved by the mortgagers, was inconsistent with 
 the nature and objects of such a mortgage, and made the 
 transaction invalid, as against the policy of the law. The 
 learned judge conceded that the reserved power of sale was 
 fairly deducible from the language of the instrument, but 
 thought this not inconsistent with the validity of the mort- 
 gage. Said he: " lamnot aware of any policy of the law, or 
 of any principle of law, which makes any conveyance of this 
 sort invalid as to creditors, if they have full notice, or may 
 have full notice of it by the exercise of reasonable diligence." 
 In his view, the material questions to be considered were, the 
 registration of the mortgage, the possession retained by the 
 mortgager, and the mortgagee's lien on the newly acquired 
 or manufactured goods by substitution. The mere reten- 
 tion of possession by the mortgager was not fraudulent per 
 se, and registration operated as constructive and sufficient 
 notice to creditors. The question of the reserved power of ' 
 sale was treated as a question of the efficacy of a lien by 
 substitution. As authorities in support of the validity 
 of such conveyances, the cases of Abbott v. Goodwin^ and 
 Macomber v. Parker^ were cited. Each of these cases, 
 however, has features of marked distinction from Mitchell 
 V. Winslow. In Abbott v. Goodwin, where there was a 
 conveyance of a stock of goods, the sales were to be made 
 
 ' 20 Maine, 408 (1841). ' 14 Pick. 497 (1833). 
 
 110 
 
DOCTRINE OF THE AMEKICAK. MAJORITY. § 74 
 
 by the grantor solely as agent of the grantees, who secured 
 to themselves the control of the entire proceeds of sales ; 
 and the goods in dispute had been purchased with those pro- 
 ceeds, " through his agency, under their authority ; " so the 
 element of the grantor's control of the' sales, or of the pro- 
 ceeds thereof, for his own use, or at his own discretion, did 
 not exist in the case. Macomber v. Parker presented a case 
 of the manufacture of bricks, in the brickyard of H. & L., 
 by E. as their agent and joint-contractor; the manufactured 
 bricks to be divided, H. & L. retaining a lien onE.'s share 
 thereof until payment of their advances. This arrangement 
 being attacked by a creditor of E. as fraudulent, was sus- 
 tained by the court on the theory of ♦' an agreement for the 
 pledging of the bricks as they should be made . ' ' No element 
 existed in the case of a discretionary power of sale by E. 
 He had been allowed to sell only as agent for H. & L. 
 These cases, together with an English case cited by Mr. 
 Justice Story, presented only this question of equitable lien 
 by substitution, without any feature of a reserved power of 
 sale, such as the learned court recognized in Mitchell v. 
 Winslow. While, therefore, the decision in this case, like 
 that in Barron v. Morris, is distinctly in favor of the 
 validity of such a conveyance, it seems to have been given 
 without full consideration of the real difficulties inherent in 
 such transactions, and in deference to the supposed author- 
 ity of cases which are, in fact, irrelevant. 
 
 Indiana. 
 
 § 74. The state of the law in Indiana prior to Robin- 
 son v. Elliott. — It is fortunate, in some respects, that when 
 the Supreme Court of the United States was again called 
 on to examine and pass upon this question in Robinson 
 V. Elliott, the case before it was one originating in Indiana; 
 for in that State the law upon the subject of fraudulent in- 
 tent was in so peculiar a condition as to necessitate a close 
 
 111 
 
§ 74 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 analysis of the precise province of the court in dealing with 
 the subject. Jordan v. Turner ^ held a mortgage of cattle 
 and horses fraudulent where the grantor had retained pos- 
 session, and traded and trafficked with the stock, much 
 after the manner of Twyne's Case. The possession of the 
 grantor was here held to be conclusively fraudulent as a 
 matter of law. But in the case of "Watson v. Williams,^ 
 which presented a question of possession merely, and where 
 there was " no evidence that the mortgager used, traded 
 on, or treated the mortgaged goods as his own," the rule 
 was deduced from all the English and American decisions 
 that fraud, in all cases of mere possession, was a question 
 of fact for the jury. The same rule was applied in the suc- 
 ceeding case of Hankins v. Ingols,' and it remains the doc- 
 trine of Indiana on the question of possession alone. The 
 distinguishing feature of Jordan v. Turner was the power of 
 sale . In that case , the same judge who soon after pronounced 
 the opinion in Watson v. Williams, said : " The mortgager 
 not only kept possession of the goods, but he also used and 
 treated them as his own ; converted them to his own use ; 
 traded and trafficked on them as his own ; sold them as his 
 own, and converted the proceeds to his own use. These 
 proceedings are not only contrary to the face of the mort- 
 gage, but are inconsistent with, and in direct opposition to 
 the intention, spirit and meaning of it, and render it wholly 
 fraudulent and void as to creditors." 
 
 New Albany Ins. Co. v. Wilcoxson* had gone far toward, 
 approving the doctrine of the New York, Wisconsin, Ohio, 
 and Minnesota cases. It sustained the finding of the lower 
 court, that a provision, in a mortgage upon a stock of goods 
 in a manufacturing establishment, allowing the grantor to 
 continue his business, was necessarily fraudulent and void 
 as against creditors, and cited the advanced case of Free- 
 
 1 3 Blackf. 309 (1883). s 4 ja, 35. 
 
 ' 4 Id. 26 ; 28 Am. Dec. 36. » 21 Ind. 855 (1863). 
 
 112 
 
DOCTEINE OF THE AMEEICAN MAJORITY. $ 74 
 
 man v. Rawson.^ This was done rather argumentatively 
 than decisively, with expressions of doubt as to how far the 
 principles of that case would reach ; but still declining to 
 disturb the finding made by the lower court without a jury. 
 But, on the other hand was the similarly indecisive case of 
 Maple V. Burnside.'' The Legislature had engrafted upon 
 the statutes of Indiana the provision, adopted in several 
 other States, that the question of fraudulent intent should 
 in all cases be deemed a question of fact. The jury in 
 Maple V. Burnside had been told that if the mortgager " re- 
 mained in possession of the mortgaged property, using and 
 trading with it as the owner, it is a fraud and you must find 
 for the plaintiffs;" and the appellate court reversed the 
 judgment, on the grounds, first, that the instruction was cal- 
 culated to confuse the jury, and second, that it disregarded 
 the statute as to fraudulent intent. Thus stood the law in 
 Indiana when Kobinson v. Elliott arose; and counsel in 
 that case, seeking to uphold the mortgage, cited and relied 
 on Maple v. Burnside. It was thus an important consider- 
 ation before the Supreme Court of the United States 
 whether all questions of fraud in law were not pretermitted 
 by the statute, so far at least as concerned Indiana cases. 
 It was urged that " constructive fraud " ceased to have any 
 existence in Indiana, and that the courts had no right to en- 
 tertain or express any opinion whatever upon the question 
 of the fraudulent character of a conveyance which reserved 
 upon its face the right to continue selling the goods in trade 
 as theretofore. But the Supreme Court held that the statute 
 in question could have no reference to the power or duty of 
 courts to pass upon questions of law. The Indiana case 
 was cited of Jenners v. Doe,' a case referring to lands, 
 where it was considered that the statute in question was 
 merely declaratory of the law, and that the question of 
 
 1 5 Ohio St. 1. " 22 Ind. 139 (1864). ' 9 inj. 461. 
 
 8 113 
 
§ 75 FEAUDULENT MORTGAGES OF MEECHANDISE. 
 
 fraudulent intent, which it referred to the jury, was only 
 the fact of such intent in cases hinging upon the actual in- 
 tent of the parties. It was well said in that case: " If the 
 court determines that the legal effect of the instrument is to 
 delay creditors, the instrument is rejected. There is no 
 occasion to go into the question of intent, for that could not 
 aid a void instrument. Intent will not control the plain 
 legal effect of the terms of an instrument ; and if that effect 
 would be to delay creditors, any intent that the party might 
 have had to the contrary would not help the matter." The 
 United States Supreme Court takes the same view, and, 
 recognizing its duty to declare the law in all cases of fraud, 
 supplements the foregoing views with a clear illustration of 
 that feature of fraudulent tendency in the transaction, and 
 of that conduct to which the law conclusively imputes a 
 fraudulent effect, which are totally independent of any of 
 the intentions of the actors. 
 
 The same distinction had been early taken in New York, 
 in Goodrich v. Downs ^ and Cunningham v. Freeborn,'' viz: 
 that the question of fraudulent intent to be left to a jury 
 was a wholly different question from that of fraud in law, 
 which the courts are impelled to declare existing in any 
 conveyance which reserves a benefit to the assignor.' 
 
 § 75. The doctrine of Kobinson v. Elliott adopted in 
 Indiana. — This decision of the highest court in America 
 has not been without influence even in Indiana. The ques- 
 tion has been again presented there, in Mobley v. Letts.* 
 Perhaps it was impossible that the issues could be more 
 sharply presented, with a view of eliciting a conclu- 
 sive adjudication of the question, in respect to not only 
 
 1 6 Hill, 438. 
 
 2 11 Wend. 240. 
 
 = See a further consideration of thia question, poit, sect. 151. 
 * 61 Ind. 11 (1878). 
 114 
 
DOCTEINE OF THE AMERICAN MAJORITY, § 75 
 
 the Indiana statute before referred to, but the common law 
 doctrine also. In the Circuit Court, a jury had found a 
 general verdict in favor of the mortgagee, and against his 
 antagonists who were execution creditors of the mortgager ; 
 and had also found by a special verdict, at the instance of 
 the mortgagee, that there was in the transaction no fraudu- 
 lent intent. But at the instance of the execution creditors, 
 the jury had also found, by special verdict, an understand- 
 ing between the parties that the mortgager was to continue 
 in possession of the stock of goods with the right to con- 
 tinue business and to make sales as usual ; though they 
 found also that the mortgagee did not consent to have the 
 proceeds of sales applied to the payment of any debt besides 
 his own. The Circuit Court, declining to give judgment for 
 the execution creditors on the special verdict they relied on, 
 gave judgment for the mortgagee on the general verdict in 
 his favor. Thus it was imperative upon the appellate court 
 to determine whether the statute as to fraudulent intent 
 controlled the case, and also whether the question of intent 
 was at all involved. Nor did the court hesitate, as in New 
 Albany Ins. Co. v. Wilcoxson, to decide the case upon 
 principle. The stipulation in the mortgage, which allowed 
 the mortgager " the privilege of using " the stock of goods, 
 was held to imply necessarily " the sale thereof by him in 
 the ordinary course of his business,' ' and nothing else. The 
 proposition advanced argumentatively in New Albany Ins. 
 Co. V. Wilcoxson, that " if a mortgage is executed merely 
 as a cloak to protect property in the hands of a mortgager 
 from creditors other than the mortgagee, the mortgager 
 still retaining possession, and the right of disposition, and 
 these facts appearing upon the face of the instrument, they 
 would, as a legal proposition, vitiate it, and a court should 
 so declare," was adopted as the law of the case; and this, 
 and the further proposition that " if , as in this case, the 
 mortgage does not contain any stipulation or covenant, on 
 
 115 
 
§ 76 FEAUDULENT MORTGAGES OF MEBCHANDISE . 
 
 the part of the mortgager, that he will apply the 'proceeds 
 of the sales of the mortgaged stock, so used by him, to the 
 payment of the mortgage debt, or the debt of any other 
 creditor, in our opinion, such mortgage is, and ought to be 
 declared to be, void on its face, as against the other credit- 
 ors of the mortgager," were announced as the law of 
 Indiana. Eobinson v. Elliott was cited with express ap- 
 proval. Thus early was realized the confident expectation 
 of Mr. Justice Davis, expressed in the latter case, ^ that when 
 a similar case should again arise in the Supreme Court of 
 Indiana, " it would be decided in accordance with the views 
 we have presented." 
 
 This decision was advisedly adhered to in Davenport v. 
 Foulke,^ in which case, again, no difficulty was experienced 
 in construing the retained possession and use of the stock 
 of goods, under the circumstances of the case, as necessarily 
 implying a power of sale, which would be "the only rea- 
 sonable use the mortgager could make of it." Mr. Her- 
 man's condensed statement of the doctrine was cited with 
 approval: "It is not the simple fact of possession by a 
 mortgager that will avoid the mortgage, but it is the pos- 
 session with the power of sale which defeats the instru- 
 ment." » 
 
 The same rule will not apply, however, if the stipulation 
 be that the proceeds of sales, after paying expenses, are to 
 be paid to the mortgagees ; this arrangement will be sus- 
 tained unless shown by extrinsic facts to be otherwise ob- 
 jectionable.* 
 
 § 76. Doubtful cases in Indiana. — In Morris v. Stern,' 
 where the mortgage had no stipulation on the subject, an 
 
 1 22 Wall, at p. 526. 
 
 ^ 68 Ind. 382 ; 34 Am. Rep. 265 (1879). 
 
 ' Herman on Chat. Morts. 236. 
 
 ' McLaughlin o. Ward, 77 Ind. 383; Lockwood w. Harding, 79 Ind. 129. 
 
 " 80 Ind. 227. 
 
 116 
 
DOCTRINE OF THE AMERICAN MAJORITY. § 76 
 
 allegation by the administrator of the mortgager that the 
 mortgager was allowed to retain and sell the goods, was 
 held to be no defence to the mortgagee's action for a fore- 
 closure of the mortgage, unless intentional fraud were 
 proven. The cases of Mobley v. Letts and Lockwood v. 
 Harding were cited as authorities ' in this case, upon the 
 question of fraud; but it is difficult to see their pertinence, 
 in view of the general principle that all conveyances, though 
 fraudulent as to third persons, are good between the par- 
 ties. It may have been this citation which subsequently led 
 the " Supreme Court Commissioners " of Indiana to decide 
 McFadden v. Hopkins ^ without reference to either Mobley 
 V. Letts or Davenport v. Foulke. The case was a contro- 
 versy between two successive mortgagees of the same stock 
 of goods, each of whom had allowed the mortgager to con- 
 trol and sell the goods. The junior mortgagees having pur- 
 chased of the mortgager a portion of the mortgaged goods, 
 were sued for their value by the senior mortgagee, who 
 recovered judgment against them therefor. The case was 
 disposed of on the ground that the prior mortgage was 
 valid as against a sale by the mortgager, unless intentional 
 fraud were proved. If the principle of Mobley v. Letts 
 and Davenport v. Foulke had been applied to the senior 
 mortgagee alone, he would have failed in his action because 
 of the fraud in his own transaction ; and if it were applied 
 to both mortgages, alike, as it might properly have been, 
 the case might have been dismissed without judgment, both 
 parties being ^?^joan delicto. How far the failure to apply 
 that principle renders this case of McFadden v. Hopkins a 
 disturbing element in the jurisprudence of Indiana will de- 
 pend on the extent to which the decisions of the ' ' Commis- 
 sioners," when adopted by the Supreme Court, are 
 considered as authority. 
 
 The later case of Louthain v. Miller ^ suggests further 
 
 » 81 Ind. 469 (1882). ' 85 Ind. 161. 
 
 117 
 
§ 76 FBAUDULBNT MORTGAGES OF MERCHANDISE. 
 
 doubts as to the present position of the Supreme Court of 
 this State upon the question. As in Mobley v. Letts, while 
 the mortgagee had a general verdict in his favor, his adver- 
 saries had a special verdict finding the fact of an agreed 
 power of sale. The court, while reversing the judgment 
 on another and different ground, declined to declare the 
 transaction fraudulent by reason of the reserved power of 
 sale, and said that the question of fraud in this case was 
 one of fact for the jury, not one of law to be decided by 
 the court. Mobley v. Letts was overlooked, and no kindred 
 case was referred to ; the authorities cited being Morris v. 
 Stern, McLaughlin v. Ward, Lockwood v. Harding, and 
 Rose V. Colter ;^in which last named case a reserved power 
 of sale was not involved. 
 
 1 76 Ind. 690. 
 118 
 
THE MAJOBITY DOCTKINE FAVOBED. § 77 
 
 CHAPTEE lY. 
 
 THE MAJORITY DOCTRINE FAVORED. 
 
 SeCTiON 77. Reserved power of sale recognized in Pennsylvania as a vic- 
 ious feature. 
 
 78. Fraud not resting in intent, distinguished. 
 
 79. Reserved power of sale recognized in Connnecticut as a vic- 
 
 ious feature. 
 
 80. Fraudulent tendency a fatal feature of sucli conveyances. 
 
 81. The North Carolina view of fraiid in conveyances; a legal 
 
 question purely, but resting on intent. 
 
 82. Confusion resulting from supposed distinction between fraud 
 
 in law and actual fraud. 
 
 83. Attempt to solve the difficulty by treating fraud in convey- 
 
 ances as a question of procedure. 
 
 84. Renewed difficulty in cases involving a reserved power of 
 
 sale. 
 86. The doctrine in question enforced as a rule of presumptive 
 evidence. 
 
 86. Arkansas approves the doctrine unqualifiedly. 
 
 87. Nebraska adopts the doctrine ynth limitations. 
 
 Pennsylvania. 
 
 § 77. Reserved power of sale recognized as a vicious 
 feature. — Pennsylvania is one of those States which ad- 
 heres to the rule, early adopted, that retention of posses- 
 sion by the grantor in a sale or mortgage of chattels is 
 fraudulent per se.^ Possession is in this State deemed to 
 be the matter of principal consideration in this class of 
 cases. This feature of her jurisprudence allows her courts 
 but little opportunity for considering the precise question 
 now under discussion. But the cases which involve the 
 
 > Carpenter v. Mayer, 5 Watts, 483 (1836) ; Q-arman v. Cooper, 72 Fenn. 
 St. 32 (1872). 
 
 119 
 
§ 77 FEATIDULENT MORTGAGES OP MERCHANDISE. 
 
 element of a power of disposition of the goods are in accord 
 with those from other States already referred to. In 
 Welsh V. Bekey,^ a mortgage of crops, under which the 
 mortgager was to retain possession and make sales, the 
 mortgagee to have nothing but the proceeds of the sales, 
 was held fraudulent. It was stipulated in the instrument 
 that " Hayden shall take care of the crop while growing, cut, 
 thresh and carry it away, under the direction and control of 
 "Welsh, whoisto have his money OM^o/"</je^Wce of it." The 
 court said : ' ' Taking care of grain, growing, reaping, thresh- 
 ing SLXid selling it, include all the notorious acts of ownership 
 that are ordinarily exercised in relation to this species of 
 property ; while the act of giving directions is a matter 
 usually known only to the parties." So, notwithstanding 
 the " admitted purity of their intentions," this transaction 
 between the parties was declared fraudulent as to creditors, 
 upon the authority of Kyall v. Eolle,^ on the subject of re- 
 taining possession with power of disposition of the goods. 
 In Clow V. Woods, ^ a somewhat similar case, involving a 
 tannery and the tanning business, including hides in vats, 
 the possession of the mortgager was held fraudulent under 
 the authority of the English cases. Gibson, C. J., did not 
 object to the transaction " altogether on the ground of the 
 possession not having been immediately delivered," and 
 thought, if this were the only question, " a good reason 
 might be assigned for the mortgager continuing in posses- 
 sion as the agent of the mortgagee." But the difficulty in 
 the case was that after a general conveyance, without a 
 schedule, the grantor continued in possession, and went on 
 with the tanning business as before, so that he "might have 
 continued to carry on business, and to purchase hides, bark 
 and tools as usual ; and whether he should be able to shelter 
 
 1 1 Penn. 57 (1829). 2 1 Wilson, 260. 
 
 ' 5 Serg. & E. 275 ; 9 Am. Dec. 346 (1819). 
 120 
 
THE MAJORITY DOCTEINE FAVORED. § 77 
 
 such property under the mortgage, would depend on the se- 
 crecy and adroitness with which the matter was managed." 
 The learned judge added, as to the inherent fraud in the 
 transaction: " I do not suppose the parties had, in fact, a 
 fraudulent view ; but as such a transaction might be turned 
 to a dishonest use, it was their duty, as far as in their power, 
 to secure the public against it." 
 
 Hower v. Geesaman^ and Bentz v. Kockey* are the 
 most satisfactory authorities upon the immediate question. 
 
 In the first named case, the assignor, under a general as- 
 signment for the benefit of creditors, carried on as usual his 
 business as a tavern-keeper, and also his business as a hatter. 
 The transaction was held fraudulent in law and void, the 
 question devolving upon the court to settle as one of law 
 purely. It was not alone the omission of a schedule, nor the 
 preferences given, nor the limitation of time, nor the mere 
 retention of possession, which dictated the judgment. The 
 court said : " We are all of opinion that the deed of assign- 
 ment was null and void as against creditors, and fraudulent 
 in law. The deed is absolute upon its face ; the grantor 
 retained possession ; he held and used the property as be- 
 fore ; he sold and disposed of it as his own." 
 
 So in Bentz v. Rockey, where it appeared to be a part of 
 the contract of sale of a tannery an4 fixtures, that the ven- 
 dor, who remained in possession, was to have a part of the 
 property used in the tanner's business as compensation for 
 " working out the stock," this was held such a reservation 
 to his own use as constituted fraud in law and avoided the 
 transaction . The established Pennsylvania rule was referred 
 to, that a want of delivery of possession would render the 
 transaction fraudulent ; but outside of this point, the court 
 said that " the sale, whether fraudulent in fact or not, was 
 clearly fraudulent in law, because a portion of the property 
 
 1 17 Serg. & E. 251 (1828). ' 69 Penn. St. 71 (1871). 
 
 121 
 
§ 78 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 embraced in the bill of sale was secretly reserved for the use 
 and advantage of KoUer." 
 
 § 78. Fraud not resting in intent, distingaished. — 
 
 Throughout the Pennsylvania decisions upon the subject of 
 conveyances in fraud of creditors, the distinction is taken 
 and carefully preserved, between fraud proven by a fraud- 
 ulent intent, and fraud not resting in intent. In Wilt v. 
 Franklin,^ the distinction was thus stated by Tilghman, C. 
 J.: "Although the statute 13 Eliz. is bottomed on the 
 supposition of an immoral intention, yet it has been judged 
 necessary to determine that certain circumstances, which in 
 their nature tend to deceive and injure creditors, shall be 
 considered as sufficient evidence of fraud." In numerous 
 cases, it is declared that the rule as to mere retention of 
 possession, above referred to, is a rule of law for the courts 
 to act on, and which cannot properly be submitted to a jury ; 
 the fraud in such cases is a sort of constructive fraud, or 
 fraud in law.^ The inferior courts are sometimes criticised 
 for failing to observe this distinction. Fraudulent intent 
 is in certain cases the vital question to be submitted to a 
 jury ; but when the facts are found, whether they estab- 
 lish fraud resting in intent, or fraud of some other kind, it 
 is for the court to render judgment as to the fraud. The 
 case of McKibbin v. Martin^ exhibits the very pronounced 
 views of the Supreme Court of this State upon this ques- 
 tion. It is with manifest reluctance that a transfer of a 
 hotel business under doubtful and suspicious circumstances 
 is there allowed to stand, after a verdict of the jury that 
 there was an actual and sufficient change and delivery of 
 possession to the grantee; but this verdict is taken as 
 
 ' 1 Binn. 502 ; 2 Am. Deo. 474 (1809). 
 
 • See Worman v. Kramer, 73 Penn. St. 878 ; Graver ». Miller, 65 Id. 456 ; 
 Bhattuck v. Ha-worth, 91 Id. 449 ; Boud v. Bronson, 80 Id. 360. 
 » 64 Penn. St. 352 ; 8 Am. Eep. 588. 
 122 
 
THE MAJORITY DOCTRINE FAVORED. § 79 
 
 removing the case out of the category of those where pos- 
 session was retained by the vendor. The occasion was 
 deemed opportune for a full and explicit statement of the 
 distinction observed in this State. Clow v. Woods was 
 declared to be the Magna Charta of Pennsylvania law on 
 the subject ; and after defining actual fraud as being identi- 
 cal with fraud resting in the intent of the parties, the court 
 gave this definition of legal or imputable fraud: " Fraud in 
 law consists in acts which, though not fraudulently in- 
 tended, yet as their tendency is to defraud creditors, if they 
 vest the property of the debtor in his grantee, are void for 
 legal fraud, which is deemed tantamount to actual fraud, are 
 full evidence of fraud, and are fraudulent in themselves, 
 the policy of the law making the acts illegal." This state- 
 ment of the rules of law was approved in Evans v. Scott.^ 
 In the light of this distinction, the cases of Clow v. Woods, 
 Hower v. Geesaman, and Bentz v. Kockey may be more 
 clearly understood, in reference to their adjudications of 
 fraud as conclusively shown by the retention of the goods 
 with discretionary power of disposition, and entirely irre- 
 spective of all questions of intent. 
 
 The Pennsylvania cases cited not only show that the doc- 
 trine of Eobinson v. Elliott, Collins v. Myers and kindred 
 cases meets with favor in this State, but they indicate 
 further that even if the doctrine of fraud as resulting from 
 possession alone were to be abandoned, the courts would 
 adhere to the view that possession accompanied by a dis- 
 cretionary power of disposition must be considered fraudu- 
 lent jaer se. 
 
 Connecticut. 
 
 § 79. Keserved power of sale recognized as a vicious 
 feature. — The Supreme Court of Errors of Connecticut 
 reached a similar conclusion in Bishop v. Warner,* but with- 
 
 1 89 Penn. St. 136 (1879). ' 19 Conn. 460 (1849). 
 
 123 
 
§ 79 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 out giving similar reasons for its judgment. Mortgages had 
 been given upon the stock in trade of a carriage manufac- 
 tory; there was a formal delivery of possession to the 
 mortgagees, after which the mortgagers continued business 
 with the goods as usual. The court found that that "up 
 to the time of the attachment, the mortgagers were carrying 
 on an extensive manufacturing business with the mortgaged 
 property ; supplying their customers from day to day ; sell- 
 ing the carriages as they were finished, and as they were 
 able to find purchasers; " "generally, we are aware, pro- 
 fessing to act as agents for those in whom it was claimed, 
 for the time being, was the paper title to the property ; but 
 yet, in fact, acting without accountability to any one ; pay- 
 ing their debts to other creditors with the mortgaged prop- 
 erty, as if they were the undisputed owners." The vivid 
 picture thus afforded of the necessary results of the trans- 
 action satisfied this intelligent court of the vice inherent in 
 it, without the necessity of reference to cases adjudicated 
 elsewhere. The principle announced by the court as the 
 ostensible basis of its decision, was simply that the posses- 
 sion of the mortgagees was colorable and not real ; and it 
 is intimated that the parties must have intended, because 
 they must have known, the fraudulent consequences of their 
 transaction. It is plain that the court felt and appreciated 
 the necessary effect and tendency of the transaction, as in 
 itself sufficient to make it fraudulent; but the case was 
 treated as turning on intent, doubtless in deference to the 
 traditional practice of testing all such cases by the statute of 
 13 Eliz. This court has, however, clearly seen that actual 
 fraud need not always rest on intent. It had already been 
 announced in Pettibone v. Stevens^ and Beers v. Botsford,^ 
 as the doctrine in this State, that when the facts of a case 
 are ascertained, fraud then becomes a question of law from 
 
 1 15 Conn. 19; 38 Am. Deo. 57. a ]3 Id 146 
 
 124 
 
THE MAJORITY DOCTRINE FAVORED. § 79 
 
 those facts ; " i< is the judgment of the law on facts and 
 intents; " a principle which has since been of frequent appli- 
 cation in the adjudications upon fraud, in Connecticut. It 
 had also been previously held,^ as the law of this State, that 
 mere retention of possession by the grantor in a sale or con- 
 veyance of chattels furnishes only presumptive, not conclu- 
 sive, evidence of fraud; for which doctrine the English 
 cases of Latimer v. Batson ^ and Martindale v. Booth ^ were 
 cited; and in De Forest v. Bacon,* where the assignees for 
 preferred creditors under a general assignment were to take 
 the manufactory and raw materials on hand, and themselves 
 conduct the business until those materials were worked up, 
 it was held that this was not fraudulent per se, but that the 
 question of fraud was to be determined by the intent of the 
 parties. 
 
 A more clear expression of the views of this court on the 
 particular subject was. given in the recent case of Lewis v. 
 McCabe.* The immediate question was whether a condi- 
 tional sale of goods, reserving title in the vendor until pay- 
 ment of the price, should be sustained as valid; which was 
 decided in the affirmative. But the goods in this case were 
 liquors, which the vendee placed in his stock in trade, it 
 being expected and understood that he should sell the same 
 in the course of his business ; and this was recognized as a 
 distinguishing feature of the case. It was therefore consid- 
 ered material to inquire whether the arrangement contem- 
 plated sales by the vendee as of his own goods, or sales as 
 agent for the vendor which should transfer his reserved title. 
 The latter construction was adopted by the court, in view 
 of the facts of the case. A contrary construction would 
 
 ' Meade v. Smith, 16 Conn. 346 ; Calkins v. Lookwood, Id. 276 ; 41 Am. 
 Dec. 143. 
 
 2 4 B. & C. 652. 
 
 3 3 B. & Adol. 498. 
 • 2 Conn. 633. 
 
 « 49 Conn. 141; 21 Am. Law Reg. 217 (1881). 
 
 125 
 
§ 81 FEAUDULENT MORTGAGES OF MEECHANDISE. 
 
 have led to a different result. It was conceded that there 
 was much force in the doctrine that possession, with the jus 
 disponendi, renders such transactions fraudulent, " without 
 regard to the real intent of the parties; " and it was said, 
 " If, however, the contract in question must be construed 
 to mean that the plaintiff authorized McAvoy to sell the 
 property as his own, we should be constrained to hold it so 
 absolutely inconsistent with the retention of title in the 
 plaintiff, as to waive or make void the condition." ^ 
 
 § 80. Fraudulent tendency a fatal feature. — The 
 
 principle of the case of Bishop v. Warner was involved in 
 Pettibone v. Stevens,* where the failing debtor, instead of 
 retaining possession and power of sale of his stock of 
 goods, took a note from a third party, the payments on 
 which he was to use for the support of himself and family, 
 giving to the same third party his own note for an equal 
 sum, which was to be secured by the conveyance of the 
 goods. This, as a reservation to the use of the debtor, was 
 condemned. The court said the question was " whether the 
 transaction is not one of the kind calculated to hinder, delay 
 and defraud creditors," and ruled on it accordingly as a 
 question of law, adding, " we have no hesitation in saying 
 that, if tolerated, it would become an inlet to fraud, and 
 lead to all imaginable abuse." ' These citations show that 
 fraudulent tendency is plainly recognized in Connecticut as 
 sufficient to invalidate such conveyances.* 
 
 NoETH Carolina. 
 
 § 81. The North Carolina view of fraud in convey- 
 ances — A legal question purely, hut resting on intent. — 
 
 Among the States which are now to be recognized as ap- 
 
 > Tor Kew York cases to the same effect, see ante, sect. 42. 
 " 15 Conn. 19. 
 " p. 26. 
 
 * See a similar case in Tennessee, cited sect. 59. 
 126 
 
THE MAJORITY DOCTRINE FAVORED. § 81 
 
 proving this rule of law, is North Carolina. The decisions 
 in this State, in the first cases presented which involved a 
 conveyance of a stock of goods in trade, with power of dis- 
 position, are somewhat peculiar ; but their divergence from 
 the general authorities on the subject pertains to procedure 
 rather than to substantive law. This will appear from an 
 examination of the current of earlier adjudications in this 
 State on the subject of fraudulent conveyances in general. 
 On questions of fraud, the Supreme Court'of this State had 
 already made some peculiar distinctions, which related 
 mainly to procedure, as they have been interpreted in the 
 later decisions. 
 
 It was well established that reservations of whatever kind, 
 to the use of the grantor, would in North Carolina serve to 
 invalidate a conveyance ; such as a parol agreement for 
 redemption ; ^ an agreement that part of the property be 
 transferred to the debtor's wife and children ; ^ an agree- 
 ment to keep the transaction secret for a time ; ' or a pref- 
 erence given to such creditors as will release in full.* 
 
 On the question of possession alone, under conveyances 
 of property, it was settled, after some discussion, that this 
 circumstance furnished only presumptive evidence of fraud, 
 which might be rebutted." 
 
 In two cases, Euffin, C. J., for the Supreme Court, had 
 carefully explained and illustrated the respective provinces 
 of court and jury in cases involving fraud in conveyances, 
 in which it was clearly shown that all such cases present the 
 elements of both law and fact. In Leadman v. Harris,* 
 where it was claimed that the entire secret purpose of a 
 
 • Gregory v. Perkins, 4 Dev. Law, 50 (1833). 
 
 2 Kissam ». Edmundson, 1 Ired. Eq. 180 (1840). 
 
 » Hafner v. Irwin, 1 Ired. Law, 490 (1841). 
 
 ' Falmer v. Giles, 5 Jones Eq. 75 (1859). 
 
 » Cox V. Jackson, 1 Hay. 423 (1796) ; Ingles v. Donalson, 2 Hay. 57 
 (1798) ; Trotter v. Howard, 1 Hawks, 320 (1821) ; Kea v. Alexander, 5 Ired. 
 Law, 644 (1845). 
 
 « 3 Dev. Law, 144 (1831). 
 
 127 
 
§ 81 FRAUDULENT MORTGAGES OF MEHCHANDISE. 
 
 conveyance was to secure the property conveyed to the 
 benefit of the debtor, and the case thus presented the ques- 
 tion of fraudulent intent, the learned judge said: " I do 
 not question the power, nor the sole power, of the jury, to 
 find the intent, when it is to be made to appear by matter 
 extrinsic of the deed. But what intent is in law fraudu- 
 lent, the court must inform the jury; else the latv can Jiave 
 no rule upon the doctrine of fraud, and every case must 
 create its own law." And again, " If, therefore, as is men- 
 tioned in Twyne's Case, a conveyance be taken for a true 
 debt, upon the understanding that the debtor is to have the 
 use of the property, that although it is apparently conveyed 
 in satisfaction or security for it, yet the beneficial owner- 
 ship is to be with the debtor, it is void. Why? Because it 
 is taken, that in truth, it was not taken for the very pur- 
 pose of satisfying the debt, but under the cover thereof, 
 for the ease and favor of the debtor, either generally or for 
 some definite time. What temptations would it not hold out 
 to dishonest men to run up scores, without the smallest in- 
 tention of making payment, if, by finding a friend amongst 
 their creditors, they could enjoy their property all their 
 lives against the other creditors ? " So it was held that the 
 trial court should have plainly told the jury that the imputed 
 intent in this case would have rendered the conveyance 
 void, leaving them simply to find the facts as to such intent. 
 And in Gregory v. Perkins,^ where the trial court had 
 refused to instruct the jury that a secret agreement for re- 
 demption would render void a conveyance absolute on its 
 face, and had " ruled that the question of fraud was for the 
 jury alone," the appellate court conceived that its decisions 
 on the question of possession alone, as evidence of fraud, 
 had been misunderstood; and Ruffin, C. J., further ex- 
 plained the law of all such cases as follows: ^ "Fraud is 
 matter of law. It is stated in the books to be a conclusion 
 
 1 4 Dev. Law, 60. » p. 63. 
 
 128 
 
THE MAJORITY DOCTRINE FAVORED. § 81 
 
 of law upon facts and intents found or admitted. The word 
 is expressive of a legal idea, and admits of a legal defini- 
 tion; and, therefore, is correctly stated, as a general propo- 
 sition, to be matter of law. When an act or intent is 
 stated, it is the province of the court to pronounce whether 
 that is injurious and covinous. But as persons perpetrating 
 frauds seldom express them explicitly, but generally con- 
 ceal them under the appearance of fairness, it is often — 
 indeed seldom otherwise — difficult to ascertain the real 
 purpose of the transaction. It is then the province of the 
 jury to find the actual intent. In that sense, fraud is called 
 a mixed question of law and fact. But it is never exclusively 
 one of fact, as was supposed in this case ; nor do the cases in 
 this court, alluded to, support such an idea, when properly 
 understood. ' ' And after stating the rule in North Carolina, 
 on the subject of possession alone, to be, that the jury find 
 simply the fact as to the intent of the possession, whether 
 to give a false credit, or otherwise, he continued: " It is 
 not held, that the jury shall give to those intents, or to a 
 delusive credit, such effect as to them may in each case 
 seem proper. That the law declares ; and the security of 
 the creditors depends upon the fixed principles of the law, 
 and not on the uncertain judgment of jurors as to what is 
 covin. If a debtor convey his property without considera- 
 tion and in trust for himself, it is fraudulent; and if that 
 appear in the conveyance, the court adjudges it to. be void; 
 for the party cannot show the deed under which he claims 
 title, without also showing the intent. If it be not so ex- 
 pressed, but be secretly reserved, then its existence must 
 be found by the jury. Then the same consequence, as a 
 legal consequence, follows from the fact thus found by the 
 jury, as from the same fact as admitted by the party." 
 These views are again industriously reaffirmed, with 
 further explanations, in Foster v. Woodfin,^ a case of re- 
 
 ' 11 ired. Law, 339 (1850). 
 
 9 129 
 
§ 81 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 tained possession of a slave. They are in entire harmony 
 with the numerous cases in which mortgages on stocks of 
 goods, with power of sale reserved, have been declared 
 fraudulent jjer se, with the single exception that Euffin, C. 
 J., did not make an explicit recognition of fraudulent 
 tendency as a basis of fraud, distinct from fraudulent 
 intent. In the opinion of that learned judge and his 
 associates, fraud in disputed conveyances always depends 
 on intent; it is necessary always that the intent to de- 
 fraud be ascertained or admitted; in cases where such 
 intent does not distinctly appear, it is by a process of 
 imputation of such intent that the law declares the transac- 
 tion fraudulent ; and where the real character of the agree- 
 ment is involved in doubt, a verdict of a Jury on the facts 
 is required, and is always to be sought with reference to 
 the question of intent. These opinions may be *ead be- 
 tween the lines in the cases above named. They appear 
 more clearly in Moore v. Collins,^ Cannon v. Peebles ^ 
 and Hafner v. Irwin ; ^ in which last named case it was said 
 by Gaston, J. : " Every contrivance to'the intent to hinder 
 creditors, directed to that end, is malicious, that is to say, 
 wicked. Where such hindrance is but an incidental conse- 
 quence of an act not directed to that end, and bona fide done 
 with another and rightful intent, it may be regretted as an 
 unfortunate result, but cannot be held to impart to the act a 
 wicked or malicious intent." Even these nice distinctions 
 do not of necessity conflict with the idea that a fraudulent 
 tendency is inherently fraudulent ; for if it be said that an 
 agreement which has such a tendency cannot in law be con- 
 sidered as done with " a rightful intent," there would be 
 room for the exercise of the North Carolina imputation of 
 a fraudulent intent. 
 
 1 8 Dev. Law. 126 (1831). ■> 4 Ired. Law, 204 (1848). 
 
 ' 1 Lred. Law, 490 (1841). 
 130 
 
THE MAJOBITr DOCTRINE FAVORED. § 82 
 
 § 82. Confusion resulting from supposed distinction 
 Tjetween fraud In law and actual fraud. — But the prin- 
 cipal element of conJ^usion in these distinctions is the 
 resulting one as to " fraud in law " and " fraud in fact," 
 involving, as it does, the attempt to place " fraud in law " 
 and "actual fraud" in antithesis, and to make the latter 
 term synonymous with fraudulent intent. If "fraud in 
 law ' ' can be only such fraud as the court can declare from 
 the face of a conveyance, or from facts which are susceptible 
 alone of a construction adverse to the transaction, and if 
 actual fraud always has a fraudulent intent as its basis, how 
 can the court find and declare the fraud in any doubtful or 
 complicated case, when a jury has rendered a verdict in 
 favor of the conveyance, no matter how thoroughly the 
 court may be convinced that its own view, primarily, would 
 have been otherwise? This was the problem which was 
 presented to the learned court in Hardy v. Skinner^ and 
 Young V. Booe.^ In each of these cases, there was a deed 
 of trust upon property, including grain and provisions on 
 a farm, the use of which was reserved to the grantor. In 
 each case, the party attacking the conveyance claimed that 
 this reservation of the use of consumable property made the 
 transaction fraudulent in law, and asked the judgment of 
 the court accordingly ; but it was expressly admitted that 
 there was no intent to defraud creditors, and a verdict was 
 thereupon taken in favor of the conveyance. Thus the 
 question was sharply presented of fraud as a conclusion of 
 law, upon the facts of the case, irrespective of the verdict 
 of a jury. In Hardy v. Skinner, the reservation of the 
 use was for the period of three years ; and the Supreme 
 Court thought it was " a singular and extremely suspicious 
 transaction," and that it denoted " a part of the purpose 
 to have been to secure a benefit to the insolvent debtor," 
 
 1 9 Ired. Law, 191 (1848). ' 11 Ired. Law, 347 (1850). 
 
 131 
 
§ 82 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 and intimated that the jury, as men of common sense, 
 should have so found. But even the inclination of the 
 court to rest the security of the cr^itors "upon the fixed 
 principles of the law, and not on the uncertain judgment 
 of jurors," did not avail the creditors in this case. The 
 verdict of the jury was based, in part, on the admission 
 that there was no " fraud in fact," that is, no fraudulent 
 intent ; and the Supreme Court considered that the attack- 
 ing party gave up his case by this admission; and that 
 inasmuch as there might have been other favorable circum- 
 stances, not indeed appearing in the case, but which might 
 have been assumed by the jury, the verdict could not be 
 set aside ; the fraud could not " be inferred absolutely, as 
 a dry matter of law, by the court." In Young v. Booe, 
 the reservation of the use was for eleven months only, and 
 there were other circumstances in the case, favorable to 
 the secured creditor, among them being the fact that the 
 possession of the grantor was virtually as agent of the 
 creditor ; so that there was considerable evidence in sup- 
 port of the verdict. Still, the circumstances were so 
 suspicious in many respects, that Euffin, C. J., in his 
 opinion, said that " without the admission on the part of 
 the defendant, that there was no actual fraud intended in 
 the execution of the deed, the court would hold the judg- 
 ment to be erroneous." Hardy v. Skinner was referred 
 to as an authority on this point, and as in that case, it was 
 the admission that there was no fraudulent intent in the 
 case, which sustained the verdict. It appears from these 
 cases that the distinction taken was not one of substantive 
 law. But for the verdict of the jury, each of these cases 
 would have been decided otherwise. Indeed, in Dewey v. 
 Littlejohn,^ where the same question arose in equity, 
 though the ultimate decision was in favor of the convey- 
 
 1 2 Ired. Eq. 495 (1848). 
 JLoa 
 
THE MAJORITY DOCTRINE FAVORED. § 83 
 
 ance (because the reservation was found not to be for the 
 debtor's benefit), it had been said that a conveyance of 
 crops or other property consumable in the use, with the 
 possession retained by the grantor for his own use, would 
 be fraudulent. The law of North Carolina seemed, there- 
 fore, plain. The only difficulty was as to how the question 
 should be determined in a case presented to a jury. It 
 was a question of procedure merely ; and this became im- 
 portant in jury cases only, in respect to the further ques- 
 tion of the province of the jury, and the issue to be sub- 
 mitted to them. 
 
 § 83. Attempt to solve the difficulty by treating fraud 
 In conveyances as a question of procedure. — This diffi- 
 culty was apparently solved in Hardy v. Simpson,^ by resort 
 to the rules of procedure concerning presumptive evidence. 
 The controversy here was over the same deed involved in 
 Hardy v. Skinner. A new suit had been brought, again 
 attacking the conveyance ; and additional evidence having 
 been taken, a jury had again rendered a verdict in favor of 
 the deed. Counsel had again asked the trial court to adjudge 
 the deed fraudulent upon its face, which had been declined. 
 On this point, the appellate court adhered to the doctrine 
 of Hardy v. Skinner, in which case, it was said, " the mat- 
 ter is so elaborately discussed as to make it unnecessary to 
 add another word." But counsel had now gone farther, 
 and had requested the trial court to instruct the jury that, 
 upon the face of the deed, there was prima facie evidence 
 of fraud, and that the defendant had offered no evidence to 
 explain or rebut this presumption. This view was taken by 
 the appellate court, and on this ground a venire de novo 
 was awarded. Hardy v. Skinner was interpreted as decid- 
 ing that this deed bore upon its face a presumption of 
 fraud, which it was incumbent upon the defendant to rebut 
 
 1 13 Ired. Law, 132 (1861). 
 
 133 
 
§ 84 FEAUDULENT MORTGAGES OP MERCHANDISE. 
 
 by evidence ; and it was held to be error in the trial court 
 to decline to tell the jury that there was no such evidence, 
 and " to leave the case with the jury upon a general charge 
 as to the matter of fraud." The rules of law in such cases 
 were further stated as follows : ' ' What constitutes fraud is 
 a question of law. In some cases the fraud is self-evident, 
 when it is the province of the court to so adjudge, and the 
 jury has nothing to do with it. In other cases, it depends 
 upon a variety of circumstances, arising from the motive 
 and intent ; then it must be left as an open question of fact 
 to the jury, with instructions as to what, in law, constitutes 
 fraud. And in other cases, there is a presumption of fraud 
 which may be rebutted. Then, if there is any evidence 
 tending to rebut it, that must be submitted to the jury; but 
 if there is no such evidence, it is the duty of the court so to 
 adjudge, and to act upon the presumption. Fraud is very 
 subtle, and frequently eludes the grasp, both of the court 
 and jury. "When, therefore, the court has hold of it, there 
 is no reason for passing it over to the jury, unless there is 
 some evidence that will justify them in coming to the con- 
 clusion that the presumption is rebutted." This case was 
 placed by the court, not in the first named class, where the 
 fraud is self-evident, and is so declared by the court, but in 
 the third class, where presumptions are indulged. The case 
 thus turns upon this question of procedure, with respect to 
 presumptive evidence. 
 
 § 84. Renewed difficulty in cases involving a reserved 
 power of sale. — So when, in the recent case of Cheatham 
 V. Hawkins,^ a mortgage deed was presented, conveying a 
 stock of goods, the mortgager reserving possession of them 
 for nine months, " the implication being irresistible, from 
 the very nature of the business, that he was to continue in 
 selling and trading as before;" the case being recognized 
 
 1 76 N. 0. 835 (1877). 
 134 
 
THE MAJORITY DOCTRINE FAVORED. § 84 
 
 as " unlike and stronger than the cases of Young v. Booe 
 and Hardy v. Skinner ; ' ' and yet the case was to be tried as a 
 jury case by the court, without the aid of a jury, new 
 questions arose. How was the case to be treated? And 
 if such a conveyance were deemed fraudulent, how 
 should the fraud be declared? And again, if the trial 
 judge should decide, as was done in this case, that the deed 
 was not fraudulent, how should an appellate court, holding 
 the contrary view, proceed in reversing the decision ? In 
 analogy to the doctrine of the earlier cases above cited, the 
 case was treated with reference to the rules concerning 
 presumptive evidence. The fatal features of such a trans- 
 action were clearly understood and vividly portrayed. 
 Said the appellate court : "The merchandise retailed lost 
 the power of identity as soon as sold. The corpus itself 
 was lost and destroyed beyond pursuit or recovery. The 
 power to sell was the power to destroy, and the sale was 
 the destruction and extinction of the property. If there 
 were other unsecured creditors at the time of this assign- 
 ment, and no other property of the debtor than that con- 
 veyed in the mortgage, out of which creditors could make 
 their debts, the fraudulent intent would seem to be irrebut- 
 table." But all this was held to be only presumptive 
 evidence. " This deed approaches the verge of being 
 fraudulent in law, but is not so. To find fraud, as a mat- 
 ter of law, it must so expressly and plainly appear in the 
 deed itself as to be incapable of explanation by evidence 
 dehors." If all the other facts of the case had appeared 
 in the deed, the court could have pronounced it fraudulent 
 in law. But as they appeared aliunde, the case as pre- 
 sented did not call for a final judgment, but for rebutting 
 evidence. And inasmuch as there was no evidence to rebut 
 the presumption of fraud, the trial judge, as a court, erred 
 in instructing himself as a jury, that there was evidence to 
 sustain his judgment; and the case was remanded in order 
 
 135 
 
§ 84 FRAUDULENT MORTGAGES OF MEBCHAITOISE. 
 
 that evidence to rebut the presumption might be intro- 
 duced. On the same principle proceeded the case of Holmes 
 V. Marshall,^ where there was a trust deed upon a stock of 
 goods, the power of disposition appearing simply from the 
 recital giving the grantors "the privilege of continuing 
 their business for one year." The trial court had applied 
 to the case the rule of procedure approved in Hardy v. Simp- 
 son, and had charged the jury that the deed was presump- 
 tively fraudulent, and that there was no evidence to rebut 
 the presumption. The appellate court sustained the ver- 
 dict, holding that the mere ignorance of the grantee con- 
 cerning other debts owing by the grantor was no evidence 
 at all in rebuttal of the presumption ; and thus the convey- 
 ance was declared fraudulent. In the succeeding year, 
 again arose the preceding case of Cheatham v. Hawkins,^ 
 and this time with evidence offered on both sides in respect 
 to the presumption of fraud ; and the trial court and the 
 appellate court were both of the opinion that on the whole 
 case the presumption was not rebutted. The mortgage 
 deed was accordingly adjudicated fraudulent. The cases 
 of Collins V. Myers ,^ Gr is wold v. Sheldon,* and Bank v. 
 Ebbert^were referred to, with approval of their declara- 
 tions that such conveyances were fraudulent jjer se; and 
 it was said: " Acts fraudulent in view of the law, because 
 of their necessary tendency to delay or obstruct the cred- 
 , itor in pursuit of his legal remedy, do not cease to be such 
 because the fraud as an independent fact was not then in 
 mind. If a person does and intends to do that which, from 
 its consequences, the law pronounces fraudulent, he is held 
 to intend the fraud inseparable from the act. To leave a 
 stock of goods, after they have been conveyed by mortgage, 
 in the debtor's possession, and subject to his exclusive con- 
 
 1 78 N. C. 262 (1878). » 4 N. Y. 581. 
 
 ' 80 N. C. 161. 6 9 Heis. 153. 
 
 » 16 Ohio, 547. 
 136 
 
THE MAJORITY DOCTRINE FAVORED. § 85 
 
 trol and disposition as if they were tis own, while they are 
 at the same time placed beyond the reach of execution, is 
 iself a fraud." The conclusion is that the presumption of 
 fraud upon the face of the mortgage deed was so strong in 
 the first place that it was almost impossible to repel it, and 
 that it was made a little stronger by evidence of ' ' the sur- 
 rounding facts of the case and the uses made of the goods." 
 The later case of Boone v. Hardie^ illustrates still more 
 clearly the distinction taken in this State as to the mode of 
 procedure. It was another case of a deed in trust on a 
 stock of goods, the proof as to power of sale appearing 
 from evidence aliunde, and fraudulent intent being nega- 
 tived. The appellate court repeated and approved the divi- 
 sion of fraud in such cases into three classes, which was made 
 in Hardy v. Simpson, and held that the third class of fraud, 
 namely, that resting in and proven by intent, was not in- 
 volved in the case ; and an issue having been submitted to 
 the jury on this point, it was held to have been an immate- 
 rial issue. The trial court had been of opinion that the 
 deed was fraudulent upon its face ; but the appellate court 
 held otherwise, and considered it a case involving a presump- 
 tion only, in which the presumption was required to be re- 
 butted. Inasmuch as this precise question had not been 
 submitted to the jury, the judgment adverse to the 
 validity of the conveyance was reversed and a new trial 
 was ordered. Yet the case on the whole was very similar 
 to Cheatham v. Hawkins, the language of the opinion in 
 which, at the last hearing, was cited with approval. 
 
 § 85. The doctrine in question enforced as a rule of 
 presumptive evidence. — It thus appears that the doctrine 
 of the North Carolina courts accords with that of other 
 States named, in opposition to the validity of this class of 
 conveyances. But it is to be enforced in their own peculiar 
 
 1 83 N. C. 470 (1880). 
 
 137 
 
§ 87 FRAUDULENT MORTGAGES OF MERCHAJSTDISB. 
 
 way, so as to preserve, the harmony of the State jurispru- 
 dence on the subject of procedure. The reservation of a 
 power of sale in the usual course of business does not con- 
 stitute self-evident fraud, or make the conveyance fraudu- 
 lent per se; but it creates a presumption of fraud so strong, 
 that theoretically it is almost impossible to rebut it, and in 
 practice it is quite so. The trial court is not allowed to de- 
 clare such a conveyance fraudulent perse; but on the other 
 hand, it must tell a jury to accomplish the same result by 
 apt application of the rules of presumptive evidence ; and 
 should a jury fail to do this, there must be a new trial to 
 the same end before another jury. Such conveyances do 
 not, therefore, fare better in the courts of this State than 
 in those of Virginia, New York or Ohio. 
 
 Arkansas. 
 
 § 86. Arkansas approves the doctrine nnqaalifiedly. — 
 
 In the case of Sparks v. Mack,^ the Supreme Court of 
 Arkansas was not called upon to determine the precise 
 question, the substantial controversy being over the matter 
 of a general reservation to the use of a grantor in an abso- 
 lute conveyance; but incidentally the question was consid- 
 ered in connection with a stipulation similar to that 
 discussed in Eobinson v. Elliott, and the court said plainly 
 that if the absolute conveyance were to be construed as 
 being in effect only a mortgage security, the case would 
 come directly within the ruling in Eobinson v. Elliott. 
 This is an evident concurrence in the general doctrine of 
 that case. 
 
 Nebraska. 
 
 § 87. Nebraska adopts the doctrine with limitations. 
 
 The Supreme Court of Nebraska in Tallon v. Ellison ^ held 
 a mortgage on a stock of goods, with a power of sale re- 
 
 1 31 Ark. 666 (1877). a 3 Neb. 63 (1873). 
 
 138 
 
THE MAJOEITY DOCTRINE FAVOEED. § 87 
 
 served by the mortgager, to be fraudulent and void, referring 
 for authority to the New York and Ohio cases, and quoting 
 from the language used in Collins v. Myers.^ 
 
 This ruling was afterwards limited in its application to 
 eases where the power of sale is expressed on the face of the 
 instrument;^ and it was suggested that a provision that the 
 mortgager might "retain the use " could not " be tortured 
 into a power of sale." In all such cases it was held that 
 ' ' the question of fraudulent intent is a question of fact which 
 must be submitted to a jury." Accordingly, in another 
 case at the same term, the court declined to take the view 
 that an agreement between mortgager and mortgagee allow- 
 ing sales by the former would be fraudulent, irrespective of 
 intent. The trial court had been asked to so instruct the 
 jury, but had refused, and the Supreme Court approved this 
 action, held the case to be one turning on intent, and sus- 
 tained the verdict of the jury in favor of the transaction, 
 on the ground that the question of intent had been submitted 
 under a proper charge.' 
 
 Where, however, the agreement allowing sales appears on 
 the face of the mortgage, it was intimated that the rule of 
 Tallon V. Ellison would be adhered to, though the question 
 in the particular case was as to the validity of the transac- 
 tion between the parties.* This view that the fraudulent 
 agreement must appear on the face of the instrument, in 
 order that the court should rule upon it as a question of law, 
 evidently controlled the decision in the late case of Book 
 Co. V. Sutherland,* where the mortgager remained in pos- 
 session and continued his business, and the controversy, 
 between the mortgagees and one who purchased from the 
 
 1 16 Ohio, at p. 654. 
 
 2 Williams v. Evans, 6 Neb. 216 (1877). 
 ' Hedman v. Anderson, 6 Neb. 892. 
 
 * Gregory v. Whedon, 8 Neb. 373 (1879). 
 « 10 Neb. 334; 6 N. W. Rep. 867 (1880). 
 
 139 
 
§ 87 FBAUDULENT MORTGAGES OF MERCHANDISE. 
 
 mortgager in payment of an old debt, was settled with refer- 
 ence to the question of notice to such purchaser of the 
 mortgage ; and the question of fraud inherent in the trans- 
 action was not referred to by the court, and apparently was 
 not argued by counsel. 
 
 In this State, the statutes make all mortgages of chattels, 
 unaccompanied by delivery thereof, presumptively fraudu- 
 lent as to creditors, and require, in order to avoid the 
 presumption, proof of good faith and of the absence of 
 fraudulent intent. These provisions were held, in Turner v. 
 Killian,^ to apply to a mortgage upon a stock of goods, 
 under which the mortgager retained possession in order to 
 sell the goods and remit all the proceeds to the mortgagees ; 
 provisions which would be held not fraudulent in many juris- 
 dictions ; and it was held that this mortgage, when attacked, 
 could be sustained only by proof that it was " really made 
 in good faith and without any intent to defraud." 
 
 In Marsh v. Burley,^ it was held that recording such a 
 mortgage would not relieve it from this difficulty, and that 
 the registration acts were not intended to make the record- 
 ing of the mortgage an equivalent for change of possession, 
 as had <' been inadvertently stated" in an earlier case; and 
 for this conclusion Horton i;.Williams' and Wood v. Lowry * 
 were cited as authorities. 
 
 Thus it appears that on the whole, the doctrine in ques- 
 tion is favored in Nebraska, though somewhat embarrassed 
 with limitations and statutory provisions. 
 
 1 12 Neb. 580. s 21 Minn. 187. 
 
 ' 13 Neb, 261. i 17 Wend. 492. 
 
 140 
 
VIEWS OF IHE AMEBICAN MINOKITY. § 88 
 
 CHAPTEE V. 
 
 THE VIEWS OF THE AMERICAN MINORITY. 
 
 Section 88. The Michigan view; fraud in conveyances always rests upon 
 intent; a dissenting opinion. 
 
 89. Such conveyances uniformly sustained in Michigan. 
 
 90. Reserved power of sale immaterial in Iowa; the common-law 
 
 rule abolished by statutes. 
 
 91. Such conveyances common in Iowa, and beyond criticism; 
 
 Stare decisis. 
 
 92. The reasons for the Iowa rule examined. 
 
 93. The Iowa view of other frauds in conveyances. 
 
 94. Reserved power of sale merely a badge of fraud in Massa- 
 
 chusetts. 
 
 95. Earlier cases inharmonious. 
 
 96. The doctrine and the practice settled in Massachusetts. 
 
 97. The Maine view; the question one as to evidence merely. 
 
 98. Reserved power of sale merely a badge of fraud in Kentucky. 
 
 99. The question of fraud as shown by mere possession, not well 
 
 settled in Kentucky. 
 100. The Kansas view; the question of the fraudulent character 
 of such conveyances, one of good faith. 
 
 Michigan. 
 
 § 88. The Michigan view; fraud in conveyances always 
 rests upon Intent; a dissenting opinion. — The courts of 
 six of the States have, while not concurring in their reasons, 
 committed themselves severally to the support of convey- 
 ances of this class. They are upheld in Michigan, upon 
 the theory that fraud as a result of a reserved power of 
 sale cannot be declared except as resting in intent, and is 
 therefore to be considered a question of fraud in fact, and 
 not of fraud in law. The law was thus announced in the 
 cases of Oliver v. Eaton^ and Gay u. Bidwell,^ which present 
 
 > 7 Mich. 108 (1859). 2 7 Mich. 519. 
 
 141 
 
§ 88 FEAUDUIiENT MORTGAGES OF MBECHANDISE. 
 
 the question fairly for consideration. In the former case 
 the question was reserved whether power allowed to the 
 mortgager of a stock of goods, to sell in the usual course of 
 trade and control the proceeds, renders the mortgage void 
 as to creditors, irrespective of intent ; which was answered 
 in the negative, sustaining the verdict of a jury in favor of 
 the conveyance. The burden of the case is that the statute 
 in this State, (as in Indiana), makes the question of fraud- 
 ulent intent a question of fact for the jury, which provision 
 the court cordially approves, as "undoubtedly introduced 
 to create or settle a rule of law." The court agrees that 
 " the law, where an instrument contains illegal provisions, 
 and such as are not reconcilable, on any possible hypoth- 
 esis, with an honest or legal intent, declares it void upon 
 jts face, because no evidence could change its character; " 
 but the case at bar is held not to be within that rule. It 
 is apparently assumed that fraud cannot be declared to 
 pertain to such conveyances unless the intent to defraud can 
 be clearly imputed to the parties. 
 
 In an earlier case, the Supreme Court of this State had 
 taken broader ground than this, and had given a more 
 restricted construction to the statute referred to. Pierson v. 
 Manning ^ was a case of a general assignment for creditors, 
 attacked in a court of law. for alleged fraud; and upon a 
 question reserved as to its validity, the Supreme Court de- 
 clared it void by reason of a resulting trust for the grantor, 
 appearing by legal implication from the provisions of the 
 assignment. The statute was urged upon the court, as re- 
 quiring that the question of fraud be submitted to the jury. 
 But the court said that this would be " carrying that 
 provision of the statute entirely beyond what the Legislature 
 ever intended, or it will legally bear; it is not to be presumed 
 that the Legislature intended, by this simple provision, to 
 
 1 2 Mich. 446 (1852). 
 142 ' 
 
VIEWS OF THE AMERICAN MINORITY. § 88 
 
 make such a radical reform as to turn principles of law into 
 questions of fact, nor does it in fact or inferentially do so." 
 This decision is not referred to in the opinion in Oliver v. 
 Eaton. 
 
 Gay V. Bidwell arose in chancery; the power of sale by 
 the mortgagers appeared by plain implication on the face of 
 the mortgage, the provision being that they should not " sell 
 and dispose of said goods and chattels otherwise than in the 
 ordinary course of their usual business ; ' ' and the court, in 
 its own view, was placed face to face with the question, 
 " Were, then, the facts such as to create a legal fraud, not- 
 withstanding the actual good faith of the parties ? " It was 
 thought not, because it is a cardinal rule, never to infer a 
 dishonest meaning, if an honest one is possible. The statute, 
 as its design was explained in Oliver v. Eaton, was held to 
 apply to the" case as fully as if it were before a jury, the case 
 being considered an excellent one for illustrating the statute. 
 " Howcananyone," asked the court, " from the faceof this 
 mortgage, and without reference to extraneous facts, draw 
 any conclusion whatever, concerning either its intent or its 
 bearing upon creditors ? It would certainly be valid under 
 any circumstances if there were no creditors. It does not 
 appear from the mortgage that there were any. It would 
 not injure other creditors if they were abundantly secured. 
 It does not show they were not. It would not be void if 
 they had authorized it. And many other cases might be 
 suggested, showing that, without proof of external facts, 
 there could be no conclusive presumption at all. And of 
 all those outside facts, the jury are sole arbiters under any 
 theory." The court further said : " To hold that a merchant 
 cannot mortgage his goods without closing his doors, would 
 be to hold that no mortgage of a merchant's stock can be 
 made at all. We cannot so hold until the statutes declare a 
 new rule . ' ' The case of Pi erson u . Manning was not referred 
 to as at all apposite to the case, except by one dissenting 
 
 143 
 
§ 89 FRAUDULENT MOETGAGES OF MEECHANDISE. 
 
 judge, who would have decided the case otherwise and in ac- 
 cordance with the New York and Ohio authorities. This judge 
 drew the distinction betweenfraud restingin intent, and fraud 
 shown by the tendency of the transaction, in these words: 
 " There are two kinds of fraud; fraud in law and fraud in 
 fact. When courts say an instrument is fraudulent on its 
 face, or in law, I do not understand them to mean it is made 
 with a corrupt intent, but that it is an instrument the law 
 will not sanction or give effect to, as to third persons, on 
 account of its susceptibility of abuse, and the great danger 
 of such contracts beingused for dishonest purposes. Hence, 
 in many cases, the law has shaped and given form to con- 
 tracts, on which form their effect or legality is made 
 to depend." It is in accordance with these views that, in 
 other jurisdictions, similar conveyances have been held to 
 disclose a tendency so potent for fraud, as to furnish all the 
 facts necessary for an adjudication of fraud, and to dis- 
 pense with any inquiry by the jury as to the intent of the 
 parties. It was, however, the opinion of the majority of 
 the court in this case, that " no court has givenany satis- 
 factory reason why such a provision should necessarily 
 vitiate a chattel mortgage, although it is undoubtedly liable 
 to abuse." 
 
 § 89. Such conTeyances uniformly sustained in Michi- 
 gan. — This question has several times since been re-argued 
 before the Supreme Court of Michigan, but the rulings in 
 these cases are adhered to. In People v. Bristol,^ it was 
 said that the question of the authority left in the mort- 
 gager to dispose of his goods in the usual way was settled 
 and "not open to controversy; " in Wingler v. Sibley,* 
 such conveyances were said to be " uniformly held valid ; " 
 and to the same effect is Cadwell v. Pray.^ Other and fre- 
 quent cases show the execution of these mortgages to be a 
 
 » 35 Mich. 28 (1876). = 35 Mich. 231. a « Id. 307. 
 
 144 
 
VIEWS OF THE AMERICAN MINOKITY. § 90 
 
 common practice in Michigan.* In Leland v. Collver,' the 
 stock of goods had, subsequent to the mortgage, passed 
 into the hands of several successive vendees, each of whom, 
 having had notice, was held to be a trustee as to the mort- 
 gaged property, so the mortgagee thus traced his fund into 
 the stock of goods in the hands of the last vendee. 
 
 Iowa. 
 
 § 90. Reserved power of sale immaterial In Iowa; tbe 
 comnion-law rulg abolished by statutes. — The rule 
 adopted by the Supreme Court of Iowa, in reference to this 
 class of cases, is unqualifiedly opposed to the doctrine of 
 Eobinson v. Elliott. The courts of that State can have no 
 independent opinion upon the question of fraud involved, 
 but it is left to the jury to be determined as a question of 
 fact, apparently with reference to the intent of the parties. 
 It is, however, conceded in Iowa that this rule is peculiar 
 to that State, and is based upon the provisions of their 
 statutes, and that the common-law rule, in the absence of 
 these statutes, would be otherwise. Torbert v. Hayden^ 
 and Hughes v. Cory* are the leading cases, each of which 
 presented the question fairly. Torbert v. Hayden was a 
 mortgage upon a stock of goods to secure a debt running 
 twelve months, the mortgagers continuing their usual sales 
 with the assent of the mortgagee, and using the proceeds 
 for their own benefit ; and the trial court followed the New 
 York and Ohio cases, charging the jury that if these facts 
 were found, the mortgage was fraudulent and void as to 
 creditors. Hughes v. Cory was a similar case in most re- 
 
 > Cigar Co. v. I'oster, 86 Id. 868; Bobson v. Bailroad, 37 Id. 70; Willison 
 V. Desenberg, 41 Id. 156 ; Bank v. Kent, 43 Id. 292 ; Adams v. Kiemann, 46 
 Id. 185; Keables v. Christie, 47 Id. 694; Laing v. Perrott, 48 Id. 298; Curtis 
 V. Wilcox, 49 Id, 425. 
 
 2 34 Id. 418. 
 
 ' 11 Iowa, 435 (1861). 
 
 * 20 Id. 399 (1866). 
 
 10 145 
 
§ 90 FRAUDXILENT MORTGAGES OF MERCHANDISE. 
 
 spects, the power of sale appearing on the face of the 
 mortgage ; and the trial court held the instrument fraudu- 
 lent and void, and excluded it as evidence. The Supreme 
 Court reversed both these cases, and in each instance gave 
 elaborate reasons for its action. It was said that the views 
 of the trial court ' ' harmonize with the English common- 
 law doctrine, and have for their authority quite a number 
 of American decisions; " ^ and that " such an instrument 
 would, by the English courts, be deemed fraudulent at com- 
 mon law and under 13 Elizabeth, because the mortgager 
 was allowed to retain possession and to make sales from the 
 goods." ^ 
 
 But the Iowa statute was held to change the rules of law, 
 and to lead to a different conclusion. This statute de- 
 clares that possession retained under a chattel mortgage 
 shall not invalidate it, if the mortgage shall be duly executed, 
 acknowledged and recorded; the legal effect of which is 
 declared to be equivalent to actual delivery of the property. 
 This statute is similar to those of Illinois, Minnesota, and 
 other States ; but the judicial construction of it in Iowa is 
 far different. It is there supposed that this provision of 
 law removes all the difficulties which attend upon posses- 
 sion in every case, so that even possession with power of 
 disposition loses all its pernicious features. The Ohio cases 
 which take the contrary view are distinguished by the cii:- 
 cumstance that the Ohio statute does not go so far as to 
 make registration of the mortgage equivalent to an actual 
 delivery of the property ; " hence the legal effect of pos- 
 session by the mortgager there, so far as the rights of third 
 persons are concerned, must be somewhat different from 
 what it is here." ' The Ohio cases are commended as 
 probably correct expositions of the results flowing from 
 such conveyances in Ohio ; but like results could not follow 
 
 1 Lowe, C. J., 11 Iowa, at p. 439. ' Dillon, J., 20 Iowa, at p. 401. 
 
 ' 11 Iowa, at p. 442. 
 146 
 
VIEWS OF THE AMERICAN MINORITY. § 90 
 
 in Iowa. Lowe, C. J., said: " It is true that if the mort- 
 gager is permitted to deal with the property as his own, the 
 mortgage security is not altogether safe or certain ; much 
 is necessarily left to the honesty and good faith of the 
 debtor ; but if this confidence is abused, it is the misfortune 
 of the mortgagee, and furnishes no ground of complaint to 
 other creditors. They are n6 worse off than they would 
 have been if no mortgage had ever been executed. To 
 them it can make no' difference whether the mortgaged 
 property is in the possession of the mortgager or mort- 
 gagee. In neither event is the property altogether beyond 
 their reach or control, as it is stated to be under the Ohio 
 laws. It surely would be competent for the creditor, before 
 forfeiture, to pay the mortgage debt, and then seize." ^ 
 Dillon, J., in %tating the doctrine of Torbert v. Hayden to 
 be the settled law in Iowa, elaborated these arguments, 
 with a view of showing what remedies creditors might have, 
 despite the disputed mortgage.^ He furthermore drew the 
 distinction between fraud in law and fraud in fact, and 
 while he held that fraud is always, after the facts are proved, 
 an inference of law, and that the jury is, under the direc- 
 tion of the court, bound to find it, he treated the mortgage 
 under consideration as not possibly fraudulent in fact, and 
 sustained it as valid under the Iowa statute.* It is inti- 
 mated, however, that a fraudulent intent, or a reservation 
 to the use of the debtor, might still suflice to invalidate 
 such a conveyance, even though well registered. But the 
 control of the mortgager of his goods, in the usual course 
 of trade, does not appear to the learned court, in any re- 
 spect, in the light of a reservation to his own use. 
 
 The rule thus adopted has been adhered to in Iowa, and the 
 cases announcing it have been cited as authorities indis- 
 criminately in cases of retained possession under various cir- 
 
 1 p. 443. ' 20 Iowa, p. 407-«. ' 20 Iowa, at p. 405. 
 
 147 
 
§ 91 FRAUDULENT MOKTGAGBS OF MERCHANDISE. 
 
 cumstances. Torbert v. Hay den was declared to furnish the 
 law for the cases of Campbell v. Leonard^ and Wilhelmi v. 
 Leonard,* which apparently involved the question of retained 
 possession only, without power of disposition ; for the case 
 of Jessup V. Bridge,' which was a mortgage upon a railroad, 
 with its rolling stock and accretions, as to which the neces- 
 sities of commerce have established a peculiar doctrine ; 
 and also for the case of Adler v. Claflin,* which was a mort- 
 gage upon a stock of goods, all the proceeds of sales, after 
 paying expenses, to be paid over to the mortgagees. 
 
 § 91. Such conveyances common in Iowa, and beyond 
 criticism ; Stare decisis. — From the cases of Doane v. 
 Garretson,* Allen v. McCalla,® Stephens v. Pence,' Phillips 
 V. Both,^ and Clark v. Hyman,®it appears that mortgages 
 upon stocks of goods in trade are of frequent occurrence in 
 Iowa. In the last named case. Day, J., recurred to the 
 discussion and decision of the earlier cases, in the following 
 words : 
 
 " It is claimed, however, that Hughes v. Cory is not only 
 opposed to the weight of authority, but wrong in principle, 
 and we are asked to overrule it . That case was determined in 
 1866. It received the most careful and deliberate consid- 
 eration. It discusses the rule at common law, and in many 
 of the States of our Union, and shows its inapplicability 
 to the peculiar provisions of our statute. For fourteen 
 years, this decision has been regarded as an authoritative 
 settlement of the questions involved in it. We ought not 
 now to be expected to enter upon a re-examination and re- 
 consideration of these questions. 
 
 ' 11 Iowa, 489. 5 24 Id. 351. 
 
 ' 18 Id. 330. 6 25 Id. 465. 
 
 '"^''•572. '56 7^.257. 
 
 * ^"^ ^^- 89- 8 58 Id. 499. 
 
 , . ' 55 7d. 14 ; 39 Am. Rep. 160 (1880). 
 14o 
 
VIKWS OF THE AMEEICAK MINORITY. § 91 
 
 " ' The rule stare decisis is one of the most sacred in the 
 law.' It is even -of ' more importance that a rule should be 
 fixed and stable, than that it should be strictly just.' If 
 we should disregard the maxim stare decisis, ' like the ever 
 returning but never ending labors of the fabled Sisyphus, 
 we would, in each recurring case, have to enter upon its ex- 
 amination and decision as if all were new, without any aid 
 from the experience of the past, or the benefit of any estab- 
 lished principle or settled law. Each case, with its decision 
 thus limited, as law, to itself alone, would in turn pass 
 away and be forgotten, leaving behind it no record of prin- 
 ciple established, or light to guide, or rule to govern the 
 future.'^ 
 
 "If it be true that the rapidly increasing commercial in- 
 terests of the State require that a merchant desiring to se- 
 cure his creditor upon his stock of goods shall surrender 
 the goods and quit business, rather than that he shall be 
 allowed to continue business in the usual way, the most 
 cogent and controlling reasons require that such a rule of 
 law shall be declared by the Legislature, and not by this 
 court." 2 
 
 From these remarks, the nature and character of the ar- 
 guments addressed to the court may be inferred. The case 
 presented was a " mortgage of a stock of merchandise, ac- 
 companied with an arrangement for sales in the usual course 
 of trade." 
 
 Such mortgages are held valid as to accretions to the 
 stock of goods made by purchase ; ' but it is doubted by 
 the courts whether the principle should be extended to cover 
 crops not planted.* 
 
 1 Barn's Legal Judgt., Am. Ed. pp. 234, 199, 416. 
 
 ' 65 Iowa, at p. 20. 
 
 ' ScharfenbuTg v. Biihop, 35 Iowa, 60 ; Stephens v. Fence, 66 Id. 257. 
 
 ■i Muir V. Blake, 67 Iowa, 662 ; Pennington v. Jones, 67 Id, 87. 
 
 149 
 
§ 92 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 § 92. The reasons for the Iowa rule examined. — 
 
 Elaborate as are the explanations made in Hughes v, Cory 
 and Torbert v. Hayden, of the reasons for sustaining such 
 conveyances, they are yet disappointing in several respects. 
 First, no adequate attention is given to the circumstance 
 that the control of the mortgager over the mortgaged prop- 
 erty is practically unlimited while it continues, so as to en- 
 able him, if he chooses, to secrete or dispose of it ; or to the 
 circumstance that in every such case, where the proceeds are 
 not to be paid over to the mortgagee, the continuance of 
 the business is in reality a continuance for the benefit 
 and in the interest of the debtor himself. Second, the 
 ability of another creditor to levy on the surplus of the 
 the goods, outside of the portion covei?ed by the mortgage, 
 which the learned court considered conclusive as to his com- 
 plaint, is in reality the ability only to levy on so much of 
 the portion not covered as the honesty of the debtor will 
 allow to remain on hand, and not secretly disposed of; and 
 the opinions of the learned court do not appear to consider 
 the possible convenience for dishonesty thus afforded. 
 The ready opportunity which the Iowa practice offers for 
 the appointment of a receiver will secure to the complain- 
 ing creditor only such portion as is left, after the debtor 
 has worked his pleasure with the goods. It is under cover 
 of a mortgage which is upheld as valid , that a dishonest debtor 
 may thus work ; though these possible consequences were 
 involved in the transaction from the beginning. Third, the 
 provision of the Iowa; statute, that registration of a mort- 
 gage shalll " have the same effect as though it had been 
 accon^panied by the actual delivery of the property," while 
 it may well establish a statutory prima facie validity, 
 • can scarcely be supposed to have the effect of eliminating 
 all possibilities of fraudulent conduct. If it were so in- 
 tended, this would be a mere fiction, which a court might 
 readily expose. Even in case of an actual manual delivery, 
 150 
 
VIEWS OF THE AMERICAN MINORITY. § 93 
 
 the efficacy of such deliveiy would be completely nullified 
 by allowing the mortgager to resume the potential control 
 and disposition of the property ; and it would seem that any 
 court might well tell a jury that such a subterfuge would be 
 essentially fraudulent, whether so intended or not. 
 
 § 93. The Iowa view of other frauds in conveyances. — 
 
 In its treatment of the question of fraud as presented in 
 some other aspects in conveyances, the jurisprudence of 
 Iowa does not seem peculiar. In Macomber v. Peck,^ it is 
 held that if a vendor of land, by a secret arrangement with 
 the vendee, reserve to himself the use of the land for a time 
 without rent, such agreement renders the conveyance 
 " fraudulent in law, irrespective of the intention with which 
 it was executed." Lukins v. Aird* is cited as a direct au- 
 thority for this ruling ; in which case the Supreme Court of 
 the United States held the fraud to be inherent in the arrange- 
 ment, as a conclusion of law, which the court was as much 
 bound to pronounce as if a fraudulent intent were proved. 
 But when, in Jordan v. LendTum,' a case was presented of a 
 conveyance of chattels, with the use allowed to the grantor 
 of property consumable in the use, and Lukins v. Aird was 
 cited as an authority in point on the subject of fraudulent 
 reservation, it became pertinent to offer explanations as 
 to the distinction between Macomber v. Peck and the class 
 of cases represented by Hughes v. Cory, which explana- 
 tions further illustrate the peculiarities of the Iowa law. 
 Referring again to the provisions of the Iowa statute which 
 give to the registration of any bill of sale or mortgage of 
 personal property ' ' the same effect as though it had been 
 accompanied by the actual delivery of the property sold or 
 mortgaged," the court said : "It could not have been the 
 purpose of these sections to simply authorize the vendor to 
 retain the naked possession of the property without any 
 
 1 39 Iowa, 351 (1874). ' 6 Wall. 78. ' 55 Iowa, 478 (1881). 
 
 151 
 
§ 93 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 enjoyment of it. It is not the policy of the law to place 
 property in such a situation that it cannot be beneficial or 
 useful. If the vendor has received an actual consideration 
 for the property sold, it can be no disadvantage to creditors 
 that he is allowed to remain in possession of the property, 
 exercise acts of ownership and control over it, and to use 
 and dispose of it, or convert it to his own use. Such con- 
 trol and use only better the financial condition of the ven- 
 dor, render him more able to pay his debts, and thus benefit 
 rather than injure his creditors. If it should be made 
 part of the consideration of the sale that the vendor should 
 retain the possession and use of the property sold, this 
 might enable the vendor to place part of the consideration 
 received beyond the reach of his creditors, and thus perpe- 
 trate a fraud upon them, if the transaction should be sus- 
 tained. This is the doctrine of Macomber v. Peck." 
 
 Two features are noticeable in these explanations. One 
 is the distinction that is taken between an agreement to 
 allow the vendor the use and control of the property, which 
 is made as a part of the consideration of the transaction, 
 and a similar agreement, which is made either expressly or 
 tacitly, after the main transaction, but in connection with 
 it; as to which, it seems somewhat puzzling to understand 
 why the subsequent agreement should be sustained in Jor- 
 dan V. Lendrum, and the contemporaneous agreement should 
 be condemned in Macomber v. Peck, when the result in 
 each case is substantially the same as to the rights of the 
 complaining creditor. The other feature is, the view that 
 the use and control of property by a vendor or mortgager 
 cannot possibly result in any injury or disadvantage to 
 creditors. It has not generally been supposed that the in- 
 jury to creditors was inherent in the simple control of the 
 property of the debtor. Undoubtedly, an increase of assets 
 in the debtor may enure to the benefit of the creditor; but 
 this benefit can be secured to him only by allowing him to 
 152 
 
VIEWS OF THE AMERICAN MINORITY. § 94 
 
 treat the additional assets as the property of his debtor. 
 The injury which he experiences results from depriving him 
 of these assets, by allowing a mortgagee to say, " This 
 property belongs to your debtor only in appearance ; in 
 fact and in law it belongs to me." It is the assertion of a 
 right by the mortgagee, antagonistic to the right of prop- 
 erty in the debtor, which operates injuriously to the general 
 creditor. These views, in common speech, crystallize into 
 the statement that the conveyance, or the transaction, 
 is void because fraudulent as to creditors. In physics, as a 
 result of an accidental breach of the laws of gravitation, it 
 is said that a man is seriously injured by falling from a 
 house-top ; and it is but a play upon words to say that it is 
 not the fall, but the too sudden stoppage, that causes the 
 injury. And in jurisprudence, the doctrine of estoppel by 
 conduct is based nominally upon the injury resulting to some 
 person who is affected by the conduct; but the injury does 
 not in fact result from the conduct alone. Injury would re- 
 sult from allowing an act to be done inconsistent with the 
 previous conduct on which the party relied ; and to avoid 
 this injury the law prevents the performance of the incon- 
 sistent act, or if performed, treats it as null and void ; for 
 to give it effect would operate as a fraud. In fact, the 
 principle of fraud inherent in mortgages under which an 
 inconsistent power of disposition is reserved, might well he 
 called as it has sometimes been, a variety of estoppel. 
 Estoppel and fraud are frequently spoken of as terms de- 
 scribing substantially the same class of cases ; and in the 
 class of conveyances referred to, the intent of the parties 
 would be wholly immaterial in considering the question of 
 Estoppel, and it would seem, should be equally so if the 
 question considered be that of Fraud. 
 
 Massachusetts . 
 
 § 94. Reserved power of sale merely a badge of 
 fraud in Massachusetts. — In a recent case in this State, 
 
 153 
 
§ 95 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 Fletcher v. Powers/ where the question is sharply presented 
 by the power to the mortgager, reserved in the mortgage, to 
 sell the goods in the regular course of his trade, it was said by 
 the Supreme Judicial Court to be no longer an open ques- 
 tion, " it having been repeatedly held that such a power 
 given to the mortgager does not per se avoid the mortgage, 
 but is at most only evidence of a fraudulent purpose, to be 
 submitted to the jury." This view seems to have been 
 advisedly adopted, though without as full an expression of 
 the reasons for its adoption as has been tnade by other 
 courts. 
 
 § 95. Earlier cases inharmonious. — The earlier cases 
 in this State on the subject of fraud in conveyances were 
 not entirely harmonious. In Harris v. Sumner,^ where a 
 reservation for the benefit of a grantor appeared on the 
 face of an instrument, and counsel contended that " it should 
 have been left to the jury to decide upon the whole 
 matter whether the conveyance were fraudulent or not," 
 the court dissented, saying, " "Where the defect is apparent 
 upon the deed itself, the effect of it becomes a question of 
 law ; it would be worse than useless to submit it to the jury 
 to say, upon such evidence, whether it should be void 
 against creditors or not, when if they should happen to 
 decide against the legal effect of the instrument, it would 
 be the duty of the court to set aside the verdict. " In 
 Johnson v. Whitwell,' a power of revocation agreed upon 
 in connection with a deed of land, was held to vitiate it; 
 and it was said, " although no moral fraud was intended, 
 yet it was a legal fraud . " In Foster v . Manufacturing Co . ,* 
 where the mortgage stipulated that the grantors should 
 "remain in possession of all the property, and sell and 
 dispose of all the personal property except machinery, ac- 
 
 ' 131 Mass. 333 (1881). » 7 Pick. 71 (1828). 
 
 ' 2 Pick. 129 (1824). * 12 Id. 451 (1882). 
 
 154 
 
VIEWS OF THE AMERICAN MINORITY. § 95 
 
 cording to the usual course of their business," Shaw,C. J., 
 said : " The first obvious remark is, that this assignment, as 
 to the personal estate, was inoperative and void, against 
 any creditor who should have attached before the trustees 
 took possession. The stipulation that the vendors should 
 remain in possession and have the use of the property 
 would have rendered it void as against creditors." The 
 case was, however, saved to the mortgagees by their having 
 taken possession of the property before the adverse proceed- 
 ings were commenced. 
 
 In the cases of Allen v. Smith ^ and Macomber v. Parker,* 
 which involved bricks divided between joint owners, the maker 
 of them being left in possession with power to sell , it appeared 
 that he acted merely as the agent of the other party, who was 
 to have all the benefit of sales made ; and this circumstance 
 controlled the decision in each case. Shutleff u.Willard' and 
 Bobbins v. Parker* involved mortgages upon hay, grain 
 and farming produce, consumable in use, and part of which 
 was consumed by the mortgager in each case. In Bobbins 
 V. Parker, this was held to make the transaction fraudulent 
 as to creditors, in accordance with the Tennessee case of 
 Sommerville v. Horton;" the court carefully making the 
 distinction, that it was not the retention of possession alone, 
 even of articles consumable in the use, but it was that 
 possession and use which inplied the consumption of 
 perishable articles, which was the vicious feature of the 
 transaction. In Shurtleff v. Willard, this principle was 
 assented to, but not applied directly by the court ; the facts 
 referred to were simply evidence to go to a jury. Codman 
 V. Freeman,® which is often referred to as an authority 
 in this connection, involved a mortgage on household 
 furniture, which was certainly not perishable property ; 
 
 ' 10 Mass. S08 (1818). ' 3 Mete. 117 (1841.) 
 
 > 14 Pick. 497 (1833). ^ 4 Yerg. 540; 26 Am. Deo. 242. 
 
 » 19 Pick. 202 (1837.) « 3 Cush. 306. 
 
 15« 
 
§ 96 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 and the only sales allowed under it were by way of exchange 
 of furniture, the new to be substituted for the old under 
 the mortgage ; and this was held valid as to the property 
 actually covered by the mortgage at its date, which was the 
 only property involved. 
 
 In two cases, involving a general assignment of real and 
 personal property, which was left in the possession of the 
 assignor with the stipulation that he should " commit no 
 waste thereon," it was held that pos^ssion under these cir- 
 cumstances did not invalidate the assignment.^ 
 
 § 96. The doctrine and the practice settled in Massa- 
 chusetts. — The question as to stocks of merchandise 
 first came fairly before the court in Briggs v. Parkman,"^ in 
 which it was held that an agreement under a chattel mortgage 
 on a stock of goods in trade, that the mortgager should keep 
 possession and continue to make sales in the ordinary course 
 of business, applying the proceeds to his own use, was not 
 fraudulent in law ; that while it tended to prove a fraudulent 
 intent, it might be explained consistently with fair dealing ; 
 and that if explanations of good intent were offered, they 
 should be received and credited. Though a chancery case, in 
 which all questions involved were to be tried by the court, 
 and in which parties agreed that the court might draw any 
 inferences from the facts which a Jury might draw, the 
 rule was applied that possession in such cases is only 
 presumptive evidence of fraud, which should be sub- 
 mitted to a jury. Then considering the case as a jury 
 would do, in the light of the intent of the parties, the court, 
 in view of the fact that the mortgager had agreed that 
 " he would not make any large sales," found that there was 
 no intent to defraud. Thus the decision was rested wholly 
 upon the question of a fraudulent intent. It should be 
 
 ' Baxter v. Wheeler, 9 Pick. 21 ; Russell v. Woodward, 10 Id. 408. 
 » 2 Met. 258 ; 87 Am. Dec. 89. (1841). 
 ]^6 
 
VIEWS OF THE AiVlEEICAN MINOKITY. § 96 
 
 noted that the rule applying to cases of mere retention of 
 possession was taken as the rule for this case, and that no 
 distinction was observed as to the element of the reserved 
 power of sale, which was considered to have no other effect 
 than mere possession, except, possibly, to " raise a stronger 
 presumption of fraud." 
 
 This case was approved and affirmed in Jones v. Hugge- 
 ford,^ where the contract was that the mortgager should 
 apply the proceeds of sales, first to the purchase and sub- 
 stitution of new goods, and afterwards to the payment of 
 the mortgage debt. It was announced as the Massachu- 
 setts doctrine that only " fraud in fact " or in the intent of 
 the parties will suffice to vitiate such a transaction. And 
 the rule being adhered to that such a contract as that in 
 Briggs V. Parkman is not fraudulent per se, but furnishes 
 only presumptive evidence, which should be passed on by a 
 jury, no difference was seen between the two cases as to the 
 fact that in the later case, the mortgagee did in reality 
 secure the proceeds of the sales. 
 
 The question arose again in Barnard v. Eaton, ^ where the 
 mortgage was much like that in 3 Mete. , but it was treated 
 lightly in the Supreme Judicial Court and passed by with- 
 out much comment. 
 
 Again, in Cobb v. Farr,' the question arose under a mort- 
 gage providing that the proceeds of sales should be applied 
 to the purchase and substitution of new goods; and the 
 mortgage was sustained without comment, the court being 
 evidently satisfied with the rulings announced in Briggs v. 
 Parkman and Jones v. Huggeford. 
 
 And in Kowley v. Rice,* where a mortgage was presented 
 which was expressed to cover all such goods as the mort- 
 gager might put in to supply the place of those he should 
 sell, the court confined its attention to the question of the 
 
 1 3 Met. 515. » 16 Gray, 597 (1860). 
 
 2 2 Cush. 294 (1848). • 11 Met. 333. 
 
 157 
 
§ 97 FEAUDULENT MOETGAGES OF MERCHANDISE. 
 
 validity of the mortgage as covering the after acquired 
 property ; the reservation of a power of sale was not con- 
 sidered, nor was the distinguishing circumstance that the 
 mortgagee had taken possession of the goods before the con- 
 troversy arose. 
 
 From the frequency of cases in the Massachusetts courts, 
 in which mortgages have been given on stocks of goods in 
 trade, the practice of making such contracts seems to be 
 quite common. In several of the cases, the feature of the 
 mortgager's power of sale received no attention.^ In one 
 case the mortgage stipulated against the exercise of such a 
 power by the mortgager. The mortgagee testified: "I 
 said he might go on and do business as usual for all me." 
 This was simply evidence for the jury, under the Massachu- 
 setts rule. The trial court properly declined to direct a 
 verdict.^ 
 
 It is made by statute, in Massachusetts, a criminal offence 
 for a mortgag&r of personal property to sell it without the 
 written consent of the mortgagee.^ 
 
 And as to a pledge of personal property in this State, it 
 may be noted that a pledgee leaving the property in the 
 hands of the pledger would lose his security.* 
 
 Maine. 
 
 § 97. The Maine vievi' ; the question one as to evidence 
 merely. — In Maine the question has not been thoroughly 
 discussed. The earlier cases of Melody v. Chandler* and 
 Abbott V. Goodwin^ are not in point, though mortgages on 
 
 ' Flood V. Clemence, 106 Mass. 299 ; rolsom v. Clemence, 111 Id. 273 ; 
 Pratt V. Msynard, 116 Id. 388. 
 
 2 Sleeper v. Chapman, 121 Id. 404. 
 
 ' Commonwealth ^. Damon, 105 Id. 580; Commonwealth v. Straneford, 
 112 Id. 289. 
 
 * Thompson v. DoUiver, 132 Mass. 103. 
 
 5 12 Me. 282. 
 
 6 20 Me. 408. 
 
 158 
 
VIEWS OF THE AMERICAN MINORITY. § 97 
 
 stocks of goods in trade, because in these cases, the mort- 
 gager, though left in possession, was there only as the agent 
 of the moi'tgagees, to whose use and benefit all the proceeds 
 of sales were expressly to be applied. In Melody v. Chand- 
 ler, it was said : " He is to be considered as the agent or 
 servant of the plaintiff, employed for a specific purpose, 
 and invested with no other power than what is requisite to 
 enable him to execute his agency. His possession of the 
 chattels entrusted to him is the possession of his principal." 
 And in Abbott v. Goodwin, it was said : " They secured to 
 themselves the power to control the proceeds for the same 
 purposes for which the goods were mortgaged." To the 
 same effect was Cutter v. Copeland." It is, therefore, in- 
 accurate to cite these cases as authorities on the question of 
 a po^er of sale reserved to the mortgager in his own right, 
 or in his discretion. Abbott v. Goodwin is recognized as 
 authority for cases where the mortgagers under such a con- 
 veyance are made the agents of the mortgagees, to sell for 
 their benefit alone, in the recent case of Allen v'. Goodnow ; 
 which case, being a controversy between the parties them- 
 selves, did not present the question under discussion in any 
 form. Nor can Stedman v. Vickery' be properly cited as 
 an authority in this connection, for the reason that it was a 
 case arising under a trustee's disclosure, in which the ques- 
 tion of fraud would be pretermitted by the principle that 
 the contract was good between the parties. 
 
 Googinsv. Gilmore*presentsthepoint, though notatallde- 
 cisive of it as a question of substantive law, for it decides 
 merely that the courts of Maine will not declare any such con- 
 veyance fraudulent in itself, or treat it is as conclusively so, 
 but will, on the theory of a mere presumption, leave the 
 question of fraud to the jury. There the mortgage which 
 allowed the mortgager" to remain in possession, with an 
 
 1 18 Me. 127. = 42 Me.- 132. 
 
 2 71 Me. 420 (1880). « 47 Me. 9 (1859). 
 
 159 
 
§ 97 FRAUDULENT MOETGAGES OF MERCHANDISE. 
 
 understanding that he was to go on as before in control of the 
 goods and his business, was supported, the jury having sus- 
 tained it on the question of fraud in fact. The courts fol- 
 lowed the uniform practice in that State of submitting the 
 question of fraud to the Jury, a practice which the earliest 
 cases show was adopted implicitly from the parent State of 
 Massachusetts. How slight attention has been given in 
 Maine to the vital question in these cases is evident from 
 the curious cases of Chapin v. Cram ^ and Partridge v. White.^ 
 The first named case was a contest between two successive 
 mortgagees of a trader's stock of goods, over goods valued 
 at $25, added to the stock between the dates of the two 
 mortgages, and as to which the later mortgagee prevailed 
 over the prior. In the last named case, in which also the 
 parties were successive mortgagees of a stock of goods, 
 the defendant, who was the prior mortgagee by several 
 years, lost his case because he failed to identify any of the 
 goods then on hand, as in the stock when it was mortgaged 
 to him. 
 
 Sawyer v. PennelP was a controversy between a mort- 
 gagee under a mortgage upon a stock of goods, and an 
 attaching creditor; and the latter prevailed, the question 
 involved being one of notice to him of the mortgage, " there 
 being no fraud alleged on either side." The report does 
 not disclose the facts as to the mortgager's power of sale. 
 In Brown v. Thompson,* which was a similar controversy, 
 and in which a discretionary power of sale might be fairly 
 inferred, the validity of the mortgage is evidently taken for 
 granted, though the question is not discussed in any manner. 
 Wolfe V. Dorr^ involved a similar controversy, in which it 
 appeared the mortgager had made sales of the goods ; but 
 the question of fraud in this respect was not considered, 
 
 ' *0 Me. 561. i 59 Me. 872 (1871). 
 
 ' 69 Me. 564. o 24 Me. 104. 
 
 ' 19 Me. 167. 
 160 
 
VIEWS OF THE AMERICAN MINORITY. § 98 
 
 and the few remarks made upon the subject of fraud apply 
 to a supposed fraudulent intent. In Wheelden v. Wilson,* 
 which was a contest between the mortgagee under such a 
 mortgage and an attaching creditor, the question was not 
 noticed ; still, the mortgage was held fraudulent in intent ; 
 although it was admitted that while • ' it may not have been 
 the intention of either the mortgagee or the mortgager to 
 perpetrate a moral fraud," yet the fact that "they both 
 intended to place the property mortgaged beyond the reach 
 of legal process, and thereby to delay if not to defeat 
 creditors," was held to constitute " a legal fraud." In the 
 recent case of Deering v. Cobb,'' the adjudication was upon 
 the subject of the accretions to the stock of goods pending 
 the mortgage. From these cases, it may be inferred that 
 the propriety of such conveyances is no longer questioned 
 in Maine. 
 
 In none of these cases is any attention paid to the ques- 
 tion of a reserved power of sale by the mortgager, except 
 in Googins v. Gilmore, where it is fairly decided, so as to 
 place Maine in the list of those States sustaining the valid- 
 ity of such conveyances. Still it is plain that the question 
 has not been fully considered, and that they are sustained 
 by indirection, not by positive judicial opinion. The deci- 
 sion of such cases, where the fraudulent character and 
 effect of the transaction are urged upon the court, as was 
 done in Googins v. Gilmore, will be left to the jury as a 
 question of fraud in fact; which, in the absence of any 
 positive rule to be applied by the court as matter of law, is 
 equivalent to an abdication by the court of all opinion on 
 the subject, in favor of the jury. 
 
 Kentucky. 
 
 § 98. Reserved power of sale merely a badge of fraud 
 in Kentucky. — One case is presented in Kentucky, involv- 
 
 1 44 Me. 11. ' 74 Me. 832 (1883). 
 
 11 161 
 
§ 98 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 ing the question, in which the Court of Appeals seems ad- 
 visedly to have adopted the doctrine that the only effect of 
 such an agreement or reservation is that of a badge of 
 fraud. In Boss v. Wilson,^ a chancery case, the mortgage 
 was on a stock of goods in trade, and by plain implication 
 from the recital that it should cover goods " purchased in 
 the usual course of business," the mortgager was to con- 
 tinue to sell the goods in the ordinary way, as he did do. 
 It was held that the mortgagee acquired no right to the. sub- 
 sequently purchased goods. But neither the circumstance 
 that the mortgager had undertaken to give him such right, 
 nor the discretionary power to sell the goods in the ordinary 
 course of business, was considered to render the transaction 
 fraudulent as to creditors, as had been held by the chancel- 
 lor below. The court declined to adopt the views of the 
 courts of New York, Illinois, and New Hampshire, think- 
 ing the cases from those States not exactly analogous. 
 The mortgagee's acquiescence in the sales by the mortgager 
 was taken as a badge of fraud merely ; but the court did 
 " not perceive in it any such evidence of meditated fraud 
 on the part of Seibert, as was requisite to estabUsh the 
 allegation of a sale of his property with the fraudulent in- 
 tention of hindering and delaying his creditors." From 
 this language it is evident that the court considered the 
 question of fraud in such a conveyance as resting in intent. 
 It appears, also, that no distinction was made between pos- 
 session alone and possession with power of disposition. 
 The established rule in Kentucky was referred to as applica- 
 ble to the case, that while absolute sales of personal prop- 
 erty not accompanied by possession are fraudulent per se,^ 
 this rule does not embrace mortgages or deeds of trust, 
 given as security merely, in which class of cases the cir- 
 
 1 7 Bush, 29 (1869). 
 
 ^ See Woodrow v. Davis, 2 B. Mon. 298 (1842) ; Jarvis v. Davis, 14 Id. 529 
 (1854). 
 
 162 
 
VIEWS OF THE AMERICAN MINORITY. § 99 
 
 cumstance of possession is but a matter of evidence. 
 Vernon v. Morton^ and Lyons v. Field ^ were cited on this 
 point, in which cases, however, there was no discretionary 
 power of sale reserved, and possession alone furnished the 
 evidence of fraud. 
 
 § 99. The question of fraud In conveyances as shown 
 hy mere possession not well settled in Kentucky. — The 
 
 law with regard to fraud in conveyances cannot, however, 
 be said to be settled in Kentucky, even to the satisfaction 
 of the courts. As early as 1838, the Court of Appeals 
 observed that the distinction between absolute and condi- 
 tional conveyances of chattels, so far as concerned the 
 question of possession, was purely arbitrary and not founded 
 on reason, and that whatever might be the true distinction 
 as to the effect of possession in such cases, it was not 
 " consistent with either sound policy or the harmony of 
 legal science " to hold that possession alone, when retained 
 under an absolute conveyance, would be fraudulent to any 
 greater extent than possession alone would be under a con- 
 veyance given merely by way of security.' This dissatis- 
 faction was re-echoed in the recent case of Vanmeter v. 
 Estill,* in which the practice was approved of relieving the 
 rule as to absolute conveyances of its harshness, by estab- 
 lishing in particular cases exceptions to the rule. Accord- 
 ingly, in that case, where the vendor of personal property 
 had remained in possession, the distinction was taken that 
 the creditor who complained had given credit after the sale 
 of the property and with notice of it, which circumstance 
 relieved the case of all fraud as to him. 
 
 Probably no reason can be urged against this decision ; 
 and it simply illustrates the power of sound principles of 
 jurisprudence when directed advisedly against musty prece- 
 
 1 8 Dana, 247. ' Daniel v. Morrison, 6 Dana, 182. 
 
 M7 B. Men. 543. ' 78 Ky. 456 (1880). 
 
 163 
 
§ 100 FEAUDULENT MORTGAGES OF MERCHANDISE. 
 
 dents. In truth, there never was any good reason why 
 possession alone should have been regarded, in any jurisdic- 
 tion, as more than evidence to be considered, by either 
 court or jury, in determining the question of fraud; and 
 there was never any sound reason for a distinction in this 
 respect between absolute and conditional sales. Mere 
 possession, therefore, should always be taken as but a cir- 
 cumstance, and not always a badge of fraud ; should be con- 
 sidered by the jury as but a circumstance, under any issues 
 whatsoever that may be presented to them ; and should be 
 weighed in like manner by a court upon which may be de- 
 volved the duty of finding the facts. But possession 
 coupled with a discretionary power of sale in the grantor 
 has a broader effect, and presents new considerations, and 
 these have led many courts to declare a rule for such cases, 
 far different from that which pertains to cases involving- 
 mere possession. In the light of these distinctions, it would 
 be easy to relieve the jurisprudence of any State of all rules 
 on the subject of possession that are merely arbitrary and 
 not founded in sound reason, and to make that jurispru- 
 dence illustrative of both " sound policy " and " the har- 
 mony of legal science," by adopting the rules announced 
 in Robinson v. Elliott, Blakeslee v. Eossman, Collins v^ 
 Myers, and Lang v. Lee. 
 
 Kansas. 
 
 § 100. The Kansas view ; the question of the fraudu- 
 lent character of such conveyances one of good faith. — 
 
 In the case of Frankhouser v. Ellett,^ the Supreme Court 
 of Kansas was, by the opinion of a majority of its three 
 judges, committed to the doctrine that such conveyances 
 are not essentially fraudulent. The case presented was a 
 chattel mortgage upon a stock of goods, the mortgagee 
 continuing in possession, and controlling and disposing of 
 
 ' 22 Kas. 127; 81 Am. Kep. 171. 
 164 
 
VIEWS OF THE AMERICAN MINOEITY. § 100 
 
 the goods " with the consent, knowledge, and agreement" 
 of the mortgagee, until the goods remaining on hand were 
 attached at the suit of his creditor. The opinion of the 
 majority of the Supreme Court, after discussing the gen- 
 eral characteristics of chattel mortgages, first decides that 
 under the Kansas statutes, the mere retention of possession 
 of mortgaged personal property is not at all invalid, pro- 
 vided the mortgage has been duly filed. As authorities 
 for this proposition, a number of cases are cited from Mich- 
 igan, Iowa, Massachusetts, and other States, which are 
 authorities no doubt on that subject. 
 
 Proceeding then to consider the element of a reserved 
 power of sale and disposition, the opinion discusses the 
 ■question, in view of the facts, as one of good faith or inten- 
 tional fraud. The fact of the necessary and inevitable 
 tendency of such an arrangement does not seem to be con- 
 sidered ; and so far as the reservations for the benefit of the 
 debtor are concerned, they are deemed to be, in that case at 
 least, as of small importance, and not worth much reflection, 
 in considering the question of good faith, which is, through- 
 out the opinion, the controlling one as to this feature of the 
 case. The following are announced as the conclusions of 
 the court : " We think the rule to be, that where a mort- 
 gage is given upon a stock of goods, and by agreement out- 
 side the mortgage, the mortgager is permitted to continue 
 business and dispose of the goods in the ordinary way, and 
 use some portion of the proceeds in the support of his fam- 
 ily, the transaction will be upheld or condemned, according 
 as it is entered into and carried out in good faith or not.. 
 The mortgager, if he may keep the possession, may as well 
 make the sales as a stranger. He acts in that respect as a 
 quasi agent, at least, of the mortgagee, and as such agent and 
 salesman is entitled to compensation for his services. 
 Doubtless such arrangements are liable to abuse, and should ■ 
 always be closely scanned •; but still they are not absolutely 
 
 165 
 
§ 100 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 and in all cases to be adjudged void as matter of law." 
 And as authorities for these views, the cases previously 
 cited were referred to generally, some of which do indeed 
 involve the same question, but many of which are cases 
 turning on either the question of possession alone, or that 
 of a lien in equity by substitution. Horton, C. J., dis- 
 sented in a brief but earnest opinion, holding a chattel 
 mortgage with such arrangement engrafted upon it, whether 
 on its face or by outside agreement, to be a mere personal 
 security, a so-called mortgage destroyed in effect by its own 
 provisions, an arrangement not advantageous to the mort- 
 gagee, but beneficial to the mortgager and injurious to other 
 creditors, and therefore fraudulent and void ; in support of 
 which conclusions numerous authorities were cited. Per- 
 haps by reason of this protest from the chief justice, the 
 reference made to this decision in a later case is such as to 
 be calculated to detract somewhat from its value as an 
 authority. 
 
 The case of Cameron v. Marvin^ presented one chattel 
 mortgage on merchandise which on its face allowed the 
 mortgager to continue his regular business, and others with- 
 out such stipulation, much of the property in which he had 
 also sold. The mortgages were declared void for another 
 reason, and the case was considered and decided with ref- 
 erence to the questions of a pledge of chattels, and a race of 
 diligence between creditors. Counsel had however argued 
 that the mortgages Were void by reason of the reserved power 
 of sale in course of business, in reference to which the opinion 
 pronounced by one of the two judges who concurred in the 
 majority opinion in the preceding case, said: "It is at 
 least doubtful whether said mortgages were void merely 
 because the plaintiffs permitted the mortgager to sell some 
 of the mortgaged property;" citing as an authority for this 
 doubt, Frankhouser v. EUett. 
 
 ' 26 Kas. 61'2. 
 166 
 
THE MINORITY VIEWS FAVORED. § 101 
 
 CHAPTBK VL 
 
 THE MINORITY VIEWS FAVORED. 
 
 Section 101. Such conveyances criticised in Alabama, but questions of 
 fraud left to the jury. 
 
 102. The Alabama view as to other frauds in conveyances. 
 
 103. The general doctrine in Texas; the fact of fraud estab- 
 
 lished only by proof of intent. 
 
 104. Eeserved power of sale a fatal feature before a court. 
 
 103. Reserved power of sale not conclusive of fraud when before 
 
 a jury. 
 106. The Texas views of such conveyances summarized. 
 
 Alabama. 
 
 § 101. Such conveyances criticised in Alabama, but 
 questions of fraud left to the jury. — The Supreme 
 Court of Alabama, after apparently assenting most cor- 
 dially to this rule in Wiswall v. Ticknor,^ has subsequently 
 given effect to it in a more qualified manner, surrounding it 
 with certain technical questions ; such as, that insolvency of 
 the debtor must intervene to make the transaction fraudu- 
 lent ; ^ and that the instrument cannot be declared fraudu- 
 lent upon its face as against creditors, when it does not 
 show upon its face tlwkt there are other creditors.^ But 
 the facts calling for the application of the rule are given 
 much consideration (in connection with, other circum- 
 stances) in Johnson v. Thweatt.* In Price v. Mazange,* 
 a£Srming Constantine v. Twelves, the court animadverts 
 
 ' 6 Ala. 178. 
 
 2 Ticknor o. "Wiswall, 9 Ala. 305 ; Constantine v. Twelves, 29 Ala. 607 ; 
 King V. Kenan, 38 Ala. 63. 
 
 3 29 Ala. at p. 614. 
 * 18 Ala. 741. 
 
 6 31 Ala. 701. 
 
 167 
 
§ 102 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 with just severity upon the vicious features of such trans- 
 actions among merchants, saying of the one in question 
 that it " has not even the dubious merit of providing that 
 .the proceeds of sales to be made by Bostwick shall be paid 
 over to the mortgagee." But the idea advanced in Johnson 
 V. Thweatt is, that if the vicious features do not appear on 
 the face of the instrument, the case is to turn upon the 
 question of intent, which must be submitted to the jury. 
 To this class of cases is thus applied the same general rule 
 that in Alabama is allowed to govern all cases of fraud 
 in conveyances, namely, that fraud is a matter resting in 
 intent, and is therefore always to be left to the determina- 
 tion of a jury. 
 
 In Smith v. Leavitts,^ the reservation by the grantor 
 under a trust assignment of a stock of goods, of the power 
 of controlling and selling the goods " in the same manner 
 as before the assignment," and his actual control of the 
 property accordingly, were said to " clearly estabhsh the 
 want of good faith in this entire transaction, and show that 
 the assignment was a device to defraud creditors, and 
 through that medium to give the debtor the control and 
 enjoyment of his property." But these necessary infer- 
 ences from the facts, it was held the jury could alone draw, 
 " as they alone could determine the existence of the facts." 
 
 § 102. The Alabama view as to other frauds in convey- 
 ances. — It was said in one early case that " fraud is a 
 question of law when the facts are ascertained ; " ^ and in 
 another, a reseirvation by the assignor under an assignment 
 for the benefit of creditors, for the support of himself and 
 family, was held to render the assignment fraudulent and 
 void as to creditors; and it was said that where " the con- 
 clusion of fraud naturally flows from the facts of the case, 
 the court is clearly competent, and is bound to pronounce 
 
 ' 10 Ala. 92. 2 Ayres ». Moore, 2 Stew. 336 (1830). 
 
 168 
 
THE MINOEITY VIEWS FAVORED. § 103 
 
 the deed fraudulent and void." ^ But in a later case, the 
 question of fraud, as shown by a reservation to the benefit 
 of the mortgager under a mortgage, was treated as a question 
 purely of fraudulent intent.^ , 
 
 In Wiley v. Knight,* where, under a mortgage upon farm- 
 ing stock, implements, crops and provisions, the mortgager 
 retained the possession and the use of the property, 
 part of it being consumable in the use, this was held to 
 render the mortgage fraudulent and void as to other credit- 
 ors, entirely irrespective of the intent of the parties. But 
 in the later case of Keynolds v. Welch,* this was held to be 
 an adjudication as to constructive fraud only ; and it was 
 said, "there can be no actual fraud without intention." 
 And in other earlier cases of conveyances similar to that in 
 Wiley V. Knight, involving farming property consumable in 
 the use, it was held that this circumstance did not avoid the 
 conveyance per se, because the use and consumption of the 
 provisions and pro'duce on the farm might assist in produc- 
 ing additional assets by the cultivation of the land." 
 
 Texas. 
 
 § 103. The general doctrine in Texas ; the fact of fraud 
 established only by proof of intent. — The attitude of the 
 Supreme Court of Texas toward this question is peculiar. 
 The doctrine of Robinson v. Elliott was expressly adopted 
 in Peiser v. Peticolas.^ Previous to this, it was the general 
 practice in this State to treat all cases of fraud in convey- 
 ances as turning upon intent, and as presenting questions 
 for the jury, and not for the court, whose duty it was to 
 explain the nature and character of fraud to the jury.' 
 
 ' Bichards v. Hazzard, 1 Stew. & P. 139 (1831). 
 
 ' Reynolds o. Welch, 47 Ala. 200 (1872). 
 
 ' 27 Ala. 336. * 47 Ala. 20a. 
 
 ^ Eaviaies v. Alston, 5 Ala. 297 ; Elmes v. Sutherland, 7 Ala. 262. 
 
 6 50 Tex. 638; 32 Am. Kep. 621 (1879). 
 
 ' Howerton v. Holt, 23 Tex. 51 ; Green v. Banks, 24 Id. 508. 
 
 169 
 
§ 103 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 " The greatest means of control which courts have in rela- 
 tion to this subject, are to be found in their power of 
 granting a new trial, if the verdict should not properly re- 
 spond to the facts of the case." ^ So, where the Supreme 
 Court was satisfied, from an examination of the facts of the 
 case, that a general assignment " was made in fraud of 
 creditors, and should certainly have been so found by the 
 jury," a new trial was granted for this reason; the court 
 applying principles of equity in considering the case in this 
 manner.^ And in another case, heard at the same term, 
 and involving the same general assignment, it was said that 
 " a court of equity, having a right to find the facts from 
 the evidence, might well infer, from these established and 
 patent facts, the additional and important fact of fraudulent 
 intent; and having thus found it, declare the legal conse- 
 quence, by setting aside the deed as void, just the same as 
 though the fraudulent intent was confessed in the petition." 
 But this power of ordinary courts of equity, of finding a 
 material fact, was disavowed as not pertaining to the courts 
 of Texas, in causes involving principles of equity, any more 
 than in those involving questions of law.* The same prin- 
 ciple was applied in a later case, where the evidence which 
 might have sustained a jury in declaring fraud was consid- 
 ered insufficient to authorize the court in so doing; for 
 while the court undoubtedly had power to declare a convey- 
 ance fraudulent, it was a power to be exercised with great 
 caution, and only in a very clear case.* To this extent had 
 the action of the courts in reference to fraud in conveyances 
 been embarrassed by this question of procedure, considered 
 in the supposition that fraud can never be shown as a matter 
 of fact except by proof of intent. 
 
 1 Howerton v. Holt, supra, at p. 62. 
 ' Carlton v. Baldwin, 22 Tex. 724. 
 " Baldwin v. Peet, 22 Id. 708. 
 ' Bailey v. Mills, 27 Id. 434. 
 170 
 
THE HINOKITY VIEWS FAVORED. § 104 
 
 § 104. Reserved power of sale a fatal feature before a 
 
 court. — Peiser v. Peticolas ^ presented the question of a dis- 
 cretionary power of sale under a mortgage upon a stock of 
 goods, not appearing upon the face of the instrument, but 
 shown clearly by the facts in evidence. The case being tried 
 by the court without the intervention of a jury, the mort- 
 gage was held valid. Upon appeal, the Supreme Court con- 
 sidered the question presented as one of legal fraud. The 
 practice above referred to of leaving all such" questions to 
 the jury was not now an obstacle in the way of the court ; 
 nor was it embarrassed, as was another court in Cheatham 
 V. Hawkins,'' by the fear that the trial judge as a court 
 might have erred in instructing himself as a jury. It was 
 adopted as a legal conclusion, that a discretionary power of 
 sale under such a mortgage is inconsistent with its true pur- 
 poses, is a reservation for the use and the benefit of the debtor, 
 and makes the instrument a mere expression of confidence ; 
 and the fraud in such a case is characterized as •' well-de- 
 fined legal fraud." Eobinson v. Elliott and Collins v. Myers 
 were cited with express approval ; and it was said that this 
 principle of law " should be declared by the court, if the 
 intent and purpose of the parties to make such a mortgage 
 are manifest from the terms of the instrument itself, or by 
 the jury if not so manifest, but clearly shown by uncontra- 
 dicted testimony; the principle is the same, the only dif- 
 ference being as to the character of the evidence and the 
 mode by which it is established. ' ' ^ The judgment below was 
 reversed, and it was said the verdict of the jury to the same 
 effect as that judgment should have been set aside. 
 
 This doctrine was reaffirmed in Crow v. Bank,* by the 
 court ; but that case was distinguished by the circumstance 
 that the evidence tended to prove that the sales made of the 
 goods by the mortgagers were made as agents of the mort- 
 
 J 60 Tex. 638. s 50 Tex. at p. 639. 
 
 '76N.C.335. «52/(i. 862. 
 
 171 
 
§ 105 FEAUDULENT MORTGAGES OF MEECHANDISE. 
 
 gagees, and the proceeds were applied to their debt ; in view 
 of which the transaction was sustained as valid. 
 
 § 105. Reserved power of sale not conclusive of fraud 
 vfhen before a jury. — But in Scott v. Alford/ where the 
 case was presented to a juiy, quite a different view was 
 taken of the functions of the court. The conveyance in 
 this case was a deed of trust upon a stock of goods in trade, 
 with an express recognition on its face of the power of sale 
 by the grantors in the conduct of their business. The ver- 
 dict having been in favor of the conveyance, the case was 
 considered by the appellate court in reference to a request 
 to the trial court to charge the jury that the feature of the 
 deed above mentioned made it fraudulent and void. This, 
 it was held, was correctly refused. There would be no 
 legal deduction of fraud in such a conveyance. The fea- 
 ture referred to was an obvious badge of fraud, and it may 
 be would have justified the jury, or even have required them 
 to return a verdict of fraud, but it would not warrant a con- 
 clusive deduction of fraud by the court, and therefore there 
 was no error in declining the instruction asked. Peiser v. 
 Peticolas was not in express terms overruled, but it was 
 distinguished. The court was in both cases composed of the 
 same members, but the opinions were rendered by different 
 judges, though without dissent in either case. The distinc- 
 tion taken as to Peiser v. Peticolas was, that it was tried by 
 a court exercising the blended functions of court and jury, 
 so that it could only be in a case where no jury should in- 
 tervene, that such a conveyance would present a case of 
 " well defined legal fraud." So upon these slight distinc- 
 tions, that the instruction asked, as to which error was 
 assigned, was itself technically erroneous, and that no com- 
 plaint was made as to the instructions actually given, or to 
 the finding of the jury on the evidence submitted to them, 
 
 > 58 Tex. 82 (1880). 
 172 
 
THE MINOKITY VIEWS FAVORED. § 106 
 
 the verdict in Scott v. Alford, in favor of the validity of 
 the conveyance, was sustained. 
 
 § 106. The Texas views of such conveyances summar- 
 ized. Recent legislation on the subject. — The result 
 from these cases may be summed up as follows : If a mort- 
 gage, with a discretionary power of sale reserved to the 
 mortgager, be presented to a court without a jury, it 
 will be declared fraudulent as a matter of law. But if 
 presented to a jury, the question of fraud must be submit- 
 ted to thefn, and their verdict will determine the question, 
 subject to the power of the Supreme Court to set that ver- 
 dict aside. If Peiser v. Peticolas be followed, a verdict 
 for the conveyance would not be sustained in any case in- 
 volving a discretionary power of sale. But if Scott v. 
 Alford be followed, the verdict would be sustained ; unless, 
 as intimated in that case, it should satisfactorily appear 
 to the court that " the possession and power of disposition 
 was unreasonable and inconsistent with the bonajide secur- 
 ity of a debt already past due, and a delay and hindrance 
 of the creditors;" for which aspect of such a case, Peiser 
 V. Peticolas was recognized as an authority.^ 
 
 All these cases arose prior to the passage of an act on 
 this subject by the Legislature, in 1879, which went into 
 effect in July of that year, and which is calculated to re- 
 lieve the courts of the necessity of making so fine distinc- 
 tions. It provides as follows : " Every mortgage, deed of 
 trust, or other form of lien, attempted to be given by the 
 owner of any stock of goods, wares or merchandise daily 
 exposed to sale in parcels, in the regular course of the busi- 
 ness of such merchandise, and contemplating a continuance 
 of possession of said goods, and control of said business by 
 sale of said goods by said owner, shall be deemed fraudu- 
 lent and void." ^ 
 
 1 53 Tex. at p. 95. 
 
 2 Act to regulate assignments for benefit of ereditors, Gen. Laws, 1879, ch^ 
 
 63, sect. 17. 
 
 173 
 
§ 107 FKAUDULENT MORTGAGES OF MERCHANDISE. 
 
 CHAP TEE VII. 
 
 THE QUESTION NOT A VITAL ONE IN SOME JURIS- 
 DICTIONS. 
 
 Section 107. Rhode island ; the question not considered. 
 
 108. Maryland; the question not discussed. 
 
 109. New Jersey; general rules respecting fraud in conveyances. 
 
 110. Vermont; the question not a practical one. 
 
 111. Georgia; the question eliminated by statute. 
 
 112. California and Nevada; mortgages of chattels limited by 
 
 statute. 
 
 113. Louisiana; mortgages of chattels unknown. 
 
 § 107. Rhode Island ; the question not considered. — 
 
 The question of the fraudulent character of a reserved 
 power of sale in this class of cases has not addressed itself 
 to the attention of the Supreme Court of Rhode Island. 
 Three cases were presented to that court in 1877, in which 
 it was fairly involved, but was not considered. Williams 
 V. Briggs ^ was a case of a mortgage on the tools, fixtures, 
 and stock in trade of a carriage manufactory, under which 
 the grantor continued to conduct business on his own ac- 
 count for five years ; after which he made a voluntary 
 assignment for the benefit of his creditors generally. The 
 controversy was between the mortgagee and the general 
 assignee, over the claim of the former to hold the property 
 acquired by the mortgager pending the mortgage, which 
 was the larger portion of that on hand at the time of the 
 assignment. The case was considered solely as presenting 
 the question of substituted lien. The court said: "The 
 case raises the question whether a mortgage of property to 
 
 1 11 K. I. 476. 
 174 
 
QUESTION NOT VITAL IN SOME JURISDICTIONS. . § 107 
 
 be subsequently acquired conveys to the mortgagee a title 
 to such property when acquired, which is valid at law «.s 
 against the mortgager or his voluntary assignee.'^ The ac- 
 tion being trover, by the administrator of the mortgagee, 
 for the conversion of the after-acquired goods, the court 
 held that the mortgagee had no legal title in them, and that 
 he could not recover their value in trover. Cook v. Cor- 
 thell ^ was a case of a mortgage on a trader's stock of goods, 
 the grantor remaining in possession, and conducting busi- 
 ness for more than a year, after which the mortgagee took 
 possession. The suit was attachment of the goods by a 
 creditor of the mortgager. The questions considered, both 
 by the majority of the court and the dissenting judge, re- 
 lated to the rights of the mortgagee under his possession. 
 Williams v. Briggs was referred to as an analogous case. 
 In neither of these cases was the character of the transac- 
 tion, in view of the mortgager's retained possession and 
 power of disposition, argued by counsel or considered by 
 the court. 
 
 The plaintiff in Williams v. Briggs, having failed in his 
 action at law, filed his bill in equity to enforce the equita- 
 ble lien which he claimed under the mortgage, upon the 
 after-acquired property, and this case was presented as 
 Williams v. Winsor.^ The lien, which was of no force at 
 law, was considered valid in equity, and the plaintiff now 
 prevailed. This case has been cited as placing Rhode 
 Island in the same category with Iowa and Michigan, on the 
 subject of the fraudulent character of such conveyances. 
 It will be seen, however, upon examination, to be confined 
 to the question of lien by substitution. Counsel for re-j, 
 spondents submitted simply the following proposition on 
 the subject of fraud: " The provision in this mortgage re- 
 lating to after-acquired property does not belong to the 
 
 ' 11 E. I. 482 ; 23 Am. Bep. 518. ^ 12 B. I. 9. 
 
 175 
 
§ 108 FKAUDULENT MORTGAGES OF JXEECHANDISE. 
 
 class of contracts of which an equity court will decree a 
 specific performance, because such a transaction is against 
 public policy, throwing open a wide door to possible fraud." 
 In response to which suggestion the court said : ' ' While in 
 some States a mortgage containing a power to sell and re- 
 place, or where the mortgager retains possession, has been 
 held to be therefore void, such has not been the doctrine of 
 the courts in this State. Here, the question whether such a 
 mortgage is fraudulent or not is a fact for the decision of 
 the jury, upon the circumstances and evidence in the par- 
 ticular case." So far, then, as the question of fraud was 
 considered at all by the court in this case, it was considered, 
 like the whole case, as turning upon a covenant to sell and 
 replace. The reporter of the court, in a note,^ refers to com- 
 ments upon this case in the Albany Law Journal^ in which 
 the same view is taken of the case, viz. : as presenting the 
 questions of power to mortgage property in futuvo, and of 
 a lien by substitution. It can scarcely be supposed that the 
 court, in the language above quoted, intended to deny the 
 power of a court of equity to pass upon such a question of 
 fraud for itself, upon independent examination of the facts, 
 or to say that an issue of fact must of necessity be sent to 
 a jury in every such case. It may seem plainly inferable 
 from the attitude of the Supreme Court toward such ques- 
 tions that Ehode Island will in time adopt the view that 
 such conveyances are not inherently fraudulent ; but it is 
 plain, also, that the question has not yet been fully con- 
 sidered. 
 
 § 108. Maryland; the question not discussed. — The 
 
 question has not been considered by the Court of Appeals 
 of Maryland, though opportunities have been afforded. 
 Hudson V. "Warner* was a contest in equity between the 
 mortgagees under a mortgage of a stock of goods in trade, 
 
 1 12 R. I. at p. 13. 2 17 ^. L, j_ ggg^ , ^ ^^^^ ^ ^jj, ^^g ,jg2g, 
 176 
 
QUESTION NOT VITAL IN SOME JURISDICTIONS. § 108 
 
 and subsequent purchasers from the mortgagers, each party 
 claiming to have received delivery of the property. The 
 case was determined upon the question of notice to the later 
 claimant of the earlier conveyance. The possession of the 
 mortgagers for two years was not considered otherwise than 
 as a question of possession alone ; and this was held to be 
 consistent with the deed, on the authority of Bucknall v. 
 Roiston.^ Hamilton v. Eogers ^ involved a mortgage on a 
 stock of goods in trade, given by one Worley, covering 
 also " all renewals of and substitutions for the same or any 
 part or parts thereof," the professed object being " to in- 
 clude not only the articles at present in said stores, but 
 whatever may be at any time therein, in the course of said 
 Worley's business. ' ' The case was considered by the Coui-t 
 of Appeals solely with reference to the mortgagee's right to 
 the after-acquired goods ; and the action being trespass, it 
 was adjudged that he had no such right as to sustain an 
 action at law. The same principle was again applied in 
 Rose V. Bevan,' which was a suit in equity involving a 
 similar mortgage. But in Butler v. Rahm,* it was held 
 that such a conveyance creates a valid lien in equity as to 
 after-acquired goods; this, however, was the exceptional 
 case of a railroad mortgage and accretions thereunder. In 
 neither Hamilton v. Rogers nor Rose v. Bevan was the 
 question of fraud, as arising from the mortgager's reten- 
 tion of the power of sale and disposition, discussed or con- 
 sidered. 
 
 Mortgages on stocks of goods in trade are of occasional 
 occurrence in Maryland. Triebert v. Burgess * was an 
 equity case, involving a parol agreement to give such a 
 mortgage, of which jurisdiction was taken ; but as the case 
 was inter partes, the question above referred to could not 
 
 » Free, in Chan. 285. * 46 Id. 541. 
 
 ' 8 Md. 301. * 11 Id. 452, 
 
 s 10 Id. 466. 
 
 12 177 
 
§ 109 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 ai'ise. Preston v. Leighton ^ was a contest between two suc- 
 cessive mortgagees of a stock of goods, the earlier mortgage 
 being sustained ; and the question of power of sale by the 
 mortgager was not discussed otherwise than to refer to the 
 fact that no agreement had been made to allow such a 
 power. 
 
 The case of Price v. Pitzer^ indicates a disposition to 
 regard the doctrine of Robinson v. Elliott with favor. A 
 trader conveyed all his stock in trade, with other property, 
 to trustees, for the ostensible benefit of creditors, but re- 
 served the right to carry on his business, paying to the 
 trustees a portion of the proceeds. The Court of Appeals 
 held the deed fraudulent and void, characterizing it as fol- 
 lows: "The practical arrangement contemplated by the 
 provisions of the deed is, by virtue of its authority, to 
 enable Bloomenour to continue his business of merchandis- 
 ing, without interference on the part of his creditors, until 
 the debts are all paid in the manner indicated by him in the 
 deed. If a bold scheme like this, to hinder and delay his 
 creditors, and to make their rights of enforcing payment of 
 their claims subordinate to the mode and process of pay- 
 ment provided by the debtor and grantor in the deed, is 
 not in palpable and unquestionable violation of the provi- 
 sions of the statute of Elizabeth, and absolutely void as to 
 his creditors, it is difficult to define what would be." 
 
 §109. New Jersey; general rules respecting fraud in 
 conveyances. — No decisions on the subject are found in 
 the reports of the State of New Jersey, and apparently a 
 contest has never been made there over the validity of a 
 mortgage of goods in trade with a power of disposition 
 reserved. A dictum in the case of Miller ads. Pancoast^' 
 has sometimes been taken as evidence of an inclination of the 
 Supreme Court toward the doctrine that such a reservation 
 
 1 6 Md. 88. 2 44 Id. 521 (1875). ' 29 N. J. Law, 5 Dutch. 250 (1861). 
 178 
 
QUESTION NOT VITAL IN SOME JURISDICTIONS. § 109 
 
 ■would merely furnish evidence of fraud to go to a jury. It 
 is doubtful, however, if the court intended to express any 
 view on the subject in reference to the legal effect of such a 
 transaction upon the rights of creditors ; the language of 
 the opinion is limited to the question of the rights of pur- 
 chasers. The case presented was a mortgage of chattels, 
 with a reservation to the mortgager of possession only ; the 
 «lement of a reserved power of disposition did not appear ; 
 nor is it stated that the chattels were merchandise. The 
 Supreme Court being appealed to, for advice to the inferior 
 courts as to the validity of the conveyance, it was held that 
 in all such cases, whether the reservation of possession be 
 fraudulent or not • ' is a question of intent to be settled 
 as a question of fact by a jury." After thus deciding the 
 case, the court further expressed its opinion as to other ques- 
 tions which might possibly arise in reference to fraudulent 
 conveyances, as follows : — 
 
 "Although the mortgage may not be invalid against cred- 
 itors or subsequent purchasers for want of possession in the 
 mortgagee, it by no means follows that it may not be void 
 against subsequent purchasers by reason of the mortgagees 
 suffering the mortgager to use and manage the mortgaged 
 chattels in such a way as to deceive bona fide purchasers as to 
 the right of the mortgager to sell and dispose of the chattels ; 
 as in case of the stock of a merchant or manufacturer, if the 
 mortgagee of such a stock should permit the mortgager to 
 remain in possession, selling and disposing of his stock with- 
 out restriction in the ordinary course of trade, such conduct 
 would be evidence of fraud to go to a jury, evidence that 
 the mortgage was kept on foot for fraudulent purposes ; and 
 the mortgage would be held void, at least so far as property 
 sold in the ordinary course of the trade permitted, was con- 
 cerned." This is a statement of the results of the familiar 
 doctrine of estoppel, by which the mouth of the mortgagee 
 "would be closed against any complaint concerning sales to 
 
 179 
 
§ 109 FKAUDULENT MOETGAGES OF JIERCHANDISE. 
 
 bona fide purchasers. Such sales would clearly pass the title 
 to the goods, even as against the mortgagee; and cases 
 applying the rule to such sales are numerous , both in England ^ 
 and America. It by no means follows, from the proposition 
 that the question of fraud as to purchasers must go to a 
 jury, that the courts of New Jersey would be debarred from 
 applying a legal rule to the question of fraud as to credit- 
 ors, when the facts are plain and undisputed. 
 
 The previous course of adjudication in this State does 
 not appear to furnish any rule for this particular class of 
 cases, should one arise. The general rule is that " ques- 
 tions of fraud, being mixed questions, partly of law and 
 partly of fact, must always be determined by the juiy and 
 not by the judges." * But " what is evidence of fraud, is 
 a question of law ;" ^ and if a jury fails to find fraud when 
 the evidence warrants it, their verdict will be set aside as a 
 verdict against law.* It is for the jury merely to find the 
 facts, and the law will pronounce its judgment on the trans- 
 action.* And in the courts of equity, " the existence of 
 fraud is often a presumption of law from admitted or es- 
 tablished facts, irrespective of motive, and too strong to be 
 rebutted ; " * which is the principle that makes a voluntary 
 settlement on a wife by an embarrassed husband, " fraudu- 
 lent as against creditors, no matter how pure the motive 
 which induced it.'" 
 
 Looker v. Peckwell * is inconclusive. It was a mortgage 
 on a stock of goods in trade, with an implied power of sale in 
 
 ' See ante, sect. 31. 
 
 2 Oliver v. Applegate, 5 N. J. Law, 2 South. 479 ; Hendricks v. Mount, 
 Id. 738. 
 
 ' Vanpelt v. Veghte, 14 Id., 2 Green, 207. 
 • Oliver v. Applegate, supra (1819). 
 5 Watkins v. Pintard, 1 N. J. Law, Coxe, 878, 
 « Belford v. Crane, 16 N. J. Eq. 265 (1863). 
 ' Id. p. 270. 
 
 " 38 N. J. Law, 9 Vroom, 253 (1876). 
 180 
 
QUESTION NOT VITAL IN SOME JUKISDICTXONS, § 111 
 
 the usual course of business ; but the mortgage was not at- 
 tacked on this ground, and the only controversy was over 
 twenty barrels of flour, newly purchased by the mortgager, 
 which was levied on at the instance of a creditor ; and it 
 was held that the newly acquired goods did not pass under 
 the lien of the mortgage. 
 
 § 110. Vermont; the question not a practical one. — 
 
 The rule of law in Vermont on the subject of retention of 
 possession is so broad as to offer no opportunity for dis- 
 tinctions between possession with and possession without 
 power of sale. It is well settled in that State, as a matter 
 of public policy, that all transfers of personal property, 
 whether by sale, pledge, or mortgage, must be accompanied 
 by a manifest and substantial change of possession, or they 
 will be voidable at the suit of other creditors of the grantor ,i 
 This rule is explained to be a peculiar doctrine of construc- 
 tive fraud; "it adopts a particular mode of determining 
 the existence of the vitiating fraud in the given case ; in a 
 sense, it propounds a kind of rule of evidence, prescribing 
 what facts proved shall be held to show the existence of 
 such fraud ; " it is " a kind of conclusive estoppel in pais."^ 
 It differs, therefore, from ordinary presumptive fraud only 
 in this, that the presumption is conclusive. 
 
 § 111. Georgia ; the question eliminated by statute. — 
 
 The jui'isprudence of Georgia is in a peculiar condition as 
 to this question. The Legislature of this State has gone 
 so far as to legalize " mortgages " of stocks of goods in 
 trade, by a statute which provides that • ' a mortgage may 
 <;over a stock of goods, or other things, in bulk, but chang- 
 ing in specifics, in which case the lien is lost on all articles 
 disposed of by the mortgager up to the time of foreclosure, 
 
 » Farnaworth v. Shepard, 6 Vt. 521 (1834) ; Houston v. Howard, 89 Vt. 
 M (1866) ; Weeks v. Prescott, 53 Vt. 57 (1880). 
 » Daniels v. Nelson, 41 Vt. 161. 
 
 181 
 
§ 111 FRAUDULENT MORTGAGES OF JIERCHANDISE. 
 
 and attaches on the purchases made to supply their place." ^ 
 This statutory provision has been several times sustained by 
 the Supreme Court .^ Thus is realized the very idea of " a 
 floating mortgage, which attaches, swells and contracts, as 
 the stock in trade changes, increases or diminishes," 
 which has in other jurisdictions been characterized as 
 vicious.^ But this floating lien is not allowed by the Su- 
 preme Court to extend to any such portion of the stock, 
 when seized for foreclosure, as may be in excess of the 
 amount of the stock on hand at the time the mortgage was 
 given. To allow the mortgage as a lien on any greater 
 amount of goods would be, in the opinion of the court, to 
 "open the door to unlimited fraud."* This shows that 
 the judicial mind in Georgia is not wholly insensible to the 
 diflSculties attending such conveyances. The same fact 
 appears in a later case, in which this ruling is adhered to. 
 " The permission to give such a mortgage, though a very 
 convenient privilege, is one very easily used to commit 
 fraud; and we think the spirit of the code, as well as pub- 
 lic policy, requires it to be limited as we have limited it. 
 We have known of several cases where mortgages of this 
 character have been given, with a small stock at the time, 
 and large purchases made on credit soon afterwards. The 
 temptation to do this, if possible, would lead to fraud, and 
 we think the object of the law is best attained by keeping 
 the parties within the amount of stock on hand at the 
 time."* This recognition of the tendency of such trans- 
 actions may perhaps indicate the common-law view which 
 would be entertained in Georgia if the courts were at 
 liberty to apply it. In general, in this State, a reservation 
 
 » Code of Georgia, 1873, sect. 1954. 
 
 ' Chisolm V. Chittenden, 45 Ga. 213; Anderson u. Howard, 49 Ga. 313; 
 Goodrich v, 'WilliamB, 50 Ga. 425. 
 3 Collins V. Myers, 16 Ohio, 547. 
 * Chisolm V. Chittenden, 45 Ga., at p. 219. 
 ' Goodrich v. Williains, 50 Ga., at p. 485. 
 182 
 
QUESTION NOT VITAL IN SOJIE JURISDICTIONS. § 112 
 
 of any kind, for the benefit of the debtor, at the time he 
 makes a conveyance, destroys its validity as to creditors.^ 
 Courts are not, however, called upon to instruct juries as to 
 badges of fraud in such cases, or their effect, unless espe- 
 cially requested.^ 
 
 It results that so far as the jurisprudence of Georgia 
 fails to recognize the reservation by a mortgager of the 
 power of selling the goods mortgaged at his discretion, as a 
 reservation to his use, it is due to the action of the Legis- 
 lature rather than to the rulings of the courts, and that the 
 Georgia cases fall far short of being authorities upon the 
 common-law question. 
 
 § 112. California and Nevada ; mortgages of chattels 
 limited by statute. — The question under discussion cannot 
 arise in California, all controversy over it being eliminated 
 from the jurisprudence of that State by the adoption of 
 peculiar statutory provisions concerning mortgages of 
 personal property. The character of goods which may be 
 made the subject of such a mortgage is indicated in express 
 terms. Twelve classes of chattels are named, in none of 
 which could a stock of merchandise in trade, or other prop- 
 erty which must be sold or consumed to be used, be in- 
 cluded.^ The possession of mortgaged chattels is regulated 
 in .detail by statute. These statutes undoubtedly prevent 
 much vexatious litigation. They are to be commended as 
 prudent applications in the advance of the principles of the 
 wholesome common-law rule which, as has been seen, is 
 adopted so generally by the American courts. Prior to 
 these statutes, it was held in California, under the provi- 
 sions of the law then in force, that retention of possession 
 
 > Edwards v. Stinson, 59 Oa. 443 ; Mitchell v. Stetson, 64 Gta. 442. 
 ' Nicol V. Crittenden, 55 Ga. 497, head-notes 10 and 11. 
 ' Civil Code of Cal., sect. 2955; Codes and Statutes, sect. 7965 ; amendment 
 of 1878, 3 Hittell's Codes, p. 239. 
 
 183 
 
§ 113 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 by a mortgager of chattels would be conclusively fraudulent 
 as to creditors, and that a stipulation for such retention of 
 possession would have that effect, although the mortgagee 
 actually took possession, for it would be a possession in 
 violation of the stipulation in the mortgage.^ 
 
 A similar result is attained in Nevada, as to the class of 
 cases under consideration, by the statute which invalidates 
 all mortgages of personal property, unless possession be de- 
 livered to and retained by the mortgagee ; the single excep- 
 tion being made of growing crops, mortgages of which are 
 to be acknowledged and recorded.^ 
 
 § 113. Ijouisiana; mortgages of chattels unknown. — 
 
 Chattel mortgages are unknown to the law of Louisiana. 
 Movables are not susceptible of being mortgaged. Even if 
 made in another State, and valid there, a chattel mortgage 
 would not be recognized in that State .^ The question will 
 not, therefore, be likely to be presented to the courts of 
 that State. 
 
 In the other States not referred to by name, the question 
 seems never to have fairly arisen for consideration in the 
 courts of last resort. 
 
 » Meyer v. Gorham, 5 Cal. 322 (1855). 
 
 = Compiled Laws of Nevada, 1873, sect. 294; (ch. 26, sect. 66). 
 ' Delop V. Windsor, 26 La. An. 186 (1874). 
 184 
 
CKITICISMS UPON THE DOCTBINE EXAMINED. § 114 
 
 CHAPTEE yill. 
 
 CEITICISMS UPON THE DOCTRINE EXAMINED. 
 
 Section 114. Summary of the views of the American courts. 
 
 115. Objections to the majority doctrine stated. 
 
 116. Is the doctrine one of constructive or presumptive fraud? 
 
 117. Constructive and presumptive fraud considered. 
 
 118. Fraud as a question of law. 
 
 119. Distinction between actual fraud and fraudulent intent. 
 
 120. The law and the facts in cases of alleged fraud. 
 
 121 . Fraud predicated of the transaction itself, rather than of the 
 
 motives of the parties. 
 
 122. The courts test such mortgages by their characteristics. 
 
 123. Registration does not validate a fraudulent transaction. 
 
 124. The policy of allowing such transactions considered. 
 
 125. Arguments in favor of such a policy answered. 
 
 126. Defective views of the subject illustrated. 
 
 127. Characteristics of a chattel mortgage. 
 
 128. Effect of a power of sale reserved to the mortgager. 
 
 129. Reasons for the existence of the doctrine. 
 
 130. Testimony of negative witnesses. 
 
 131. Testimony of affirmative witnesses. 
 
 132. Testimony of other observers. 
 
 § 114. Summary of the views of the Amierlcan courts. — 
 
 From this review of the cases decided in the courts of the 
 various States, it will appear that in the large majority of 
 those where the question has been considered, the result is 
 an adjudication that a mortgage of chattels with such a 
 reserved power of sale in the mortgager is positively fraudu- 
 lent, and may be avoided at the suit of a creditor. This 
 doctrine has been advisedly adopted in fourteen States ; ^ 
 
 1 Virginia, New York, New Hampshire, Ohio, Minnesota, Wisconsin, Uli- 
 nois, Missouri, Tennessee, Mississippi, Colorado, Oregon, West Virginia and 
 Indiana. 
 
 185 
 
§ 114 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 and is received with favor in several others. It is further 
 adopted as a rule of law in Nebraska to this limited extent, 
 that it will be applied by the courts where the power of 
 sale is reserved to the mortgager on the face of the instru- 
 ment, but cases where the power does not so appear will 
 turn upon the question of a fraudulent intent, and must be 
 submitted to a jury. In North Carolina the doctrine is 
 strongly favored, but is applied only as a matter of pre- 
 sumptive evidence, juries being recommended, if not re- 
 quired, to reach the conclusion that such transactions are 
 fraudulent, through a process of presumptions. 
 
 A contrary view is entertained in eight States, where for 
 various reasons it has been held that jurisprudence has no 
 substantive rule on the subject. 
 
 In Michigan, fraud in this class of cases is to be consid- 
 ered only as resting in intent, and thus as presenting an 
 issue of fact in all cases. This arbitrary classification is 
 adopted in deference to a statute which makes fraudulent 
 intent a question of fact for the jury ; which statute is not, 
 however, in other cases allowed to "turn principles of law 
 into questions of fact." ^ In Iowa, fraud in such cases is 
 in like manner left to the jury as a question of fact; but 
 this is in deference to a statute which provides that the 
 mere retention of possession under a chattel mortgage does 
 not invalidate the mortgage, provided it is acknowledged 
 and recorded; to which acts the statute ascribes a legal 
 effect equivalent to actual manual delivery. 
 
 In Massachusetts, fraud in such cases always turns upon 
 the question of fraudulent intent, proof of a reserved power 
 of sale furnishing only presumptive evidence for the jury ; 
 although in other cases of reservations by the grantor, such 
 .as a power of revocation, or the use of property consumable 
 in the use, intent is immaterial, and the law pronounces its 
 judgment of fraud. 
 
 1 Pierson v. Manning, 2 Mich. 446. 
 186 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 114 
 
 In Maine, in like manner, the case furnishes presump- 
 tions only, which are to go to the jury in illustration of the 
 question of fraud in fact, by which is meant fraud resting in 
 intent ; and the courts have practically no opinion on the 
 subject of the fraud in these cases. In Kentucky, the re- 
 served power of sale is treated as only a badge of fraud, to 
 be considered by the jury in connection with the question 
 of intent. In this State as well as in Maine, no distinction 
 seems to be observed between retained possession alone, and 
 possession with a reserved power of disposition. Perhaps 
 the rule is to be considered as not well settled either way in 
 Kentucky, in view of the fact that the old distinction be- 
 tween absolute and conditional transfers, as to the inher- 
 ently fraudulent character of retained possession alone, is 
 considered to be inconsistent with " the harmony of legal 
 science."^ 
 
 In Kansas, the rule is adopted that the question of 
 fraud in the reservation of a discretionary power of 
 sale is a question of good faith or of intent to defraud ; 
 but this rule was announced by a divided court, in but one 
 case, the decision in which has since been considered of 
 doubtful propriety. In Alabama, it is thought that such 
 transactions have a bad appearance, but it must be left to the 
 jury to condemn them, because there is in this State •' no 
 actual fraud without intent." In Texas, heretofore, if the 
 mortgage bore the reservation of a power of sale on its 
 face, and was presented to a court alone, it would be de- 
 clared fraudulent ^er se; though if presented to a jury, the 
 question of fraud would be left to them, subject to review 
 by the court, and probably it would be the duty of the jury 
 to find such a reservation fraudulent; but all these dis- 
 tinctions are now abolished by a statute which declares all 
 such transactions fraudulent. 
 
 1 Daniel v. Morriaon, 6 Dana, 182. 
 
 187 
 
§ 116 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 § 115. Objections to the majority doctrine stated. — The 
 
 dissenting views, which find support in the adjudications of 
 the eight States above named, have been pressed upon the 
 consideration of the courts with persistency, and have been 
 supported by ingenious arguments. A recent treatise pre- 
 sents an elaborate discussion of the question, from which 
 the following conclusions are there deduced : First, that 
 * ' the doctrine of absolute fraud arising in a mortgage of 
 merchandise fi;omthe mortgager's retaining possession with 
 a power of disposal in the usual course of trade • « * 
 is contrary to sound principles of jurisprudence; " second, 
 that " it is contrary to sound policy ; ' ' and third, that ' ' it has 
 no reason for its existence, derived from general observa- 
 tion and experience." ^ This concise statement summarizes 
 the objections urged to the doctrine of Robinson v. Elliott, and 
 furnishes a view upon which the decisions in the eight dis- 
 senting States may be harmonized. It is a view no doubt 
 entertained, in the terms stated, in some of those States ; 
 and it would perhaps be favored in some other States where 
 the question has not been directly passed upon. 
 
 If these views are correct, it is of prime importance to 
 the profession that they be so understood, and be generally 
 adopted. The concurrence of the adjudications of the courts 
 of fourteen of the States with those of the United States, if 
 at war with established principles of jurisprudence, should 
 not be allowed to have influence or weight outside those 
 courts ; but if erroneous, their errors should be fearlessly ex- 
 posed, and by legislation or otherwise, corrected. It is 
 proper, therefore, to examine upon reason and principle the 
 objections presented. 
 
 § 116. Is the doctrine one of constructive or presump- 
 tive fraud? — First, it is supposed that the doctrine of 
 Eobinson v. Elliott, Collins v. Myers and kindred cases is 
 
 ' Jones on Chattel Mortgages, sect. 425. 
 188 
 
CRITICISMS UPON THE DOCTKINE EXAMINED. § 117 
 
 "contrary to sound principles of jurisprudence." This 
 view it is endeavored to substantiate, by an explanation of 
 the characteristics of constructive or presumptive fraud, 
 which terms have commonly, though perhaps erroneously, 
 been used as synonymous. But here is a fundamental error. 
 The doctrine of Eobinson v. Elliott cannot be properly 
 understood or explained by reference to or an explanation 
 of constructive fraud, nor is it in reality a doctrine of pre- 
 sumptive evidence. It may be suggested in advance that 
 this eri'or is responsible for the greater part of the dissent 
 from that doctrine. 
 
 In Brett v. Carter,* frauds of the class under discussion 
 are spoken of as "constructive or artificial frauds." The 
 objection to the doctrine has been urged that "facts not 
 appearing upon the face of the instrument are presumed, 
 in order to help out this presumption of /raud," ^ In Gay 
 V. Bidwell,* it was asked, " How can any one, from the 
 face of this mortgage, and without reference to extraneous 
 facts, draw any conclusion whatever, concerning either its 
 intent, or its bearing upon creditors. It would certainly 
 be valid under any circumstances, if there were no creditors. 
 It does not appear from the mortgage that there were any. 
 It would not injure other creditors if they were abundantly 
 secured. It does not show they were not. It would not 
 be void if they had authorized it. And many other cases 
 might be suggested, showing that, without proof of external 
 facts, there could be no conclusive presumption at all." 
 The dissenting opinion in Griswold v: Sheldon* may be 
 referred to for a full discussion of the question as one of 
 presumptive evidence of fraud. 
 
 § 117. Constructive and presumptive fraud con- 
 sidered. — These various criticisms furnish illustrations of 
 
 1 2 Lowell, 458. ' 7 Mich. 519. 
 
 ' Jones on Chat. Mort, sect. 419. ' 4 N. Y. 581. 
 
 189 
 
§ 117 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 the practice of setting up a man of straw in order to strike 
 him down. Frauds of the class in question are not sup- 
 posed, by those who expose and condemn them, to be con- 
 structive, artificial or presumptive frauds. The courts, in 
 declaring the fraud in such cases, do not proceed upon any 
 theory of either construction or presumption. In Eobinson 
 v. Elliott and analogous cases, the fraud is neither presumed 
 nor inferred ; it is discovered to exist, it is exposed, and it 
 is then adjudged. The fraud thus adjudged is said to be 
 actual. 
 
 Mr. Bigelow says, in his work on Fraud, " Constructive 
 or presumptive fraud is an inference of law, not to 
 the effect that an actual fraud has, in the absence 
 of explanation, been clearly proved, but either that 
 it is probable that fraud was committed, or that the existence 
 of certain things in the relation or conduct of parties begets 
 a probability of actual knowledge of fraud, or what will lead 
 to fraud, on the part of the person complained of. The 
 fraud thus fixed is presumptive only, and in reality may 
 not have existed."^ This is one of the latest of many 
 definitions, in which no difference is observed between 
 constructive fraud and presumptive fraud, the expressions 
 being used interchangeably. The terms there employed are 
 apt to describe fraud which is proved by a resort to presump- 
 tive evidence. There is a constructive fraud which is 
 adjudged by an arbitrary process of jurisprudence, in cases 
 where the relations between parties are so intimate that, 
 for reasons of public policy, no explanation or proof of 
 good faith would be allowed to validate the transaction 
 inter partes; and in these cases, it is scarcely exact to style 
 the fraud presumptive. But without entering into these 
 distinctions, and using the terms "constructive" and 
 *' presumptive ' ' for the present as interchangeable, it suffices 
 
 ' Bigelow on Fraud, Iviii. 
 190 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 118 
 
 to say that the fraud in the class of cases under consideration 
 does not fall within the definition cited. It is rather of the 
 class referred to by the same author elsewhere , in these words : 
 "In some cases, fraud is self-evident; and when so, it is 
 the proper province of the court to adjudge upon U."^ Any 
 criticism in the premises, based on considerations applicable 
 to presumptive fraud or constructive fraud must, therefore, 
 in the nature of the case, be misleading. 
 
 § 118. Fraud as a question of law. — It is frequently 
 supposed that the term "fraud in law," and the term 
 "constructive or presumptive fraud," are equivalent ex- 
 pressions; and that the terms " fraud in fact " and " actual 
 fraud ' ' are also synonymous . This use of terms distinguishes 
 the dissent from the doctrine in question, both in the opin- 
 ions of the dissenting courts and the arguments of the dis- 
 senting controversialists. It is based on the supposition that 
 " actual fraud " always im'plies a fraudulent intent on the 
 part of the person complained of, or, in other words, that 
 there can be no "actual" fraud without such an intent ; 
 and further, that as such intent is always a question of fact 
 to be determined by a jury, therefore, " actual fraud" is 
 always a question for a jury. Hence it is reasoned that 
 " actual fraud " is never, and can never be, the equivalent 
 of " fraud in law," but that the latter is always the equiv- 
 alent of "presumptive fraud." It follows from these 
 views, by easy transition, in regular logical processes, that 
 whenever a court, without the aid of a jury, has adjudicated 
 that fraud exists, it can be no other than " presumptive or 
 constructive fraud." These ideas colored the views of the 
 court in Brett v. Carter,^ where it was " supposed to be well 
 settled" that, in the class of cases under consideration, 
 ' ' the question whether this was a fraud or not was one of 
 fact for the jury, excepting under a peculiar clause in the 
 
 1 Big. on Fraud, p. 468. » 2 Low. 458. 
 
 191 
 
§ 119 FRAUDULENT MOETGAGES OF MEECHANDISE. 
 
 bankrupt law of England ; ' ' and where it was thought 
 " strange that after our Legislatures have met the difficul- 
 ties of Twyne's Case, by requiring registration," and pro- 
 viding that '• fraud shall be a question of fact for the jury," 
 the Supreme Court of the United States and other courts 
 should hold such transactions to be fraudulent and void in 
 law. So it has been thought that ' ' an arbitrary rule, declar- 
 ing void all mortgages of personal property containing pro- 
 visions that the mortgager may retain possession and sell in 
 the usual course of business, must have the effect of an- 
 nulling very many transactions which are without fraud in 
 fact."^ Those courts, therefore, which adopt this rule, 
 have, in so doing, "revived the old rejected doctrine of 
 constructive fraud;" while those which dissent from it 
 " have adhered to the safe and just rule that fraudulent in- 
 tent is in all cases a question of fact." ^ 
 
 § 119. Distinction between actual fraud and fraudu- 
 lent intent. — The difficulty in all of these views of such 
 transactions arises from a misconception of the nature and 
 character of fraud as a legal question. The classification 
 of fraud into " fraud in law " and " fraud in fact " is not 
 a happy one. The classification into " actual fraud " and 
 '• constructive fraud " is logical and explicable. But " ac- 
 tual fraud " and " fraudulent intent " are far from synon- 
 ymous, and he who fails to distinguish between them will 
 err. The term " fraud " has prime reference, not to the 
 intent or motive of the party to the transaction, but to the 
 inherent characteristics and quality of the transaction itself. 
 If essentially unreal or deceptive, it has in itself fraudulent 
 features, and may be characterized as a fraud; but the 
 " intent to defraud," that is, the intent to give the transac- 
 tion a deceptive character, in order thereby to accomplish 
 deception, may or may not have been present. "Actual 
 
 ' Jones on Chat Mort, sect 418. ' Id., sect 415. 
 
 . 192 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 119 
 
 fraud" means that which actually exists, whether deter- 
 mined by a court or found by a jury ; and it may frequently 
 be, and often is, found to exist in the absence of fraudu- 
 lent intent. Wherever the intent to defraud becomes ma- 
 terial, in a jury case, it is always " a question of fact for 
 the jury; " but it by no means follows that if a court, 
 without a jury, finds fraud to exist, it is always done upon 
 the theory of a conclusive presumption. ' ' Where the fraud 
 is self-evident" says Mr. Bigelow, •' it is the proper pro- 
 vince of the court to adjudge upon it." ^ In such a case, 
 it is as much fraud in fact, or actual fraud, as if some ques- 
 tion had arisen for a jury to pass upon. 
 
 The truth is, that fraud is in one sense always a question 
 of law; that is to say, it must be determined by a court, 
 as a matter of law, upon the facts of the case. In another 
 sense, fraud is often to a certain extent a question of fact ; 
 that is to say, facts must be ascertained upon which the 
 court can base its judgment. There is, therefore, •* fraud 
 in law," in a certain sense, in all cases involying fraud ; 
 and in many of them " fraud in fact," in a certain sense; 
 yet these terms are in themselves so ambiguous that they 
 might well be disused. Cases involving fraud are readily 
 divisible into several classes. In one class, the facts may 
 not disclose actual fraud or an intent to defraud ; yet, by 
 reason of the intimacy of the relations between -the parties, 
 the law, from public policy, arbitrarily or by construction 
 sets aside the transaction as fraudulent ; and this is con- 
 structive fraud in the strict sense. In another class, the 
 facts again may not disclose actual fraud or an intent to de- 
 fraud, yet either fraud or a fraudulent intent may be fairly 
 presumed, so as to shift the burden of proof; so that in the 
 absence of a satisfactory explanation, there will be an ad- 
 judication of fraud, which may be classed as presumptive 
 fraud. In another class of cases, the intent of the parties, 
 or one of them, may be material ; if, before a jury, the 
 
 1 Big. on Fraud, 468. 
 
 13 193 
 
§ 119 FBAUDULENT MORTGAGES OF MERCHANDISE. 
 
 fact of such intent is to be determined by the jury ; and if 
 the Jury find such an intent, the judgment of fraud is then 
 pronounced by the court. In many jurisdictions, a court 
 of equity may determine the fact of a fraudulent intent 
 without the aid of a jury ; or in some jurisdictions, such 
 aid may be invoked at the discretion of the court, or at the 
 option of a party to the cause. In still another class ef 
 cases, the facts of the case are apparent to the court; it 
 may be upon the face of a mortgage, or it may be by the 
 admission of the parties to the cause ; and without refer- 
 ence to the intent of any of the parties, the court sees the 
 fraudulent character of the transaction as plainly as if an 
 intent to defraud had been proven or admitted. Here the 
 duty of the court seems plain and unavoidable, to adjudge 
 the fraud as a conclusion of law. Eobinson v. Elliott, 
 Brett V. Carter, and kindred cases fall within this class. It 
 is only those classes of cases which must turn upon a fraud- 
 ulent intent, to which statutes can apply, like those in In- 
 diana and Michigan, which provide that the question of 
 fraudulent intent shall in all cases be a question of fact.' 
 It would be impracticable, if it were desirable, to put all 
 cases involving fraud upon a Procrustean bed of fraudulent 
 intent. Sometimes, therefore, actual fraud is adjudicated 
 by the court upon the intent of the parties, irrespective of 
 other facts, (as, for instance, the bona fides of the indebt- 
 edness in the case); and sometimes, also, actual fraud is 
 adjudicated by the court upon the facts of the case, irrespec- 
 tive of the intent of the parties. All these classes of cases 
 have been comprehended in the frequent declarations of the 
 courts that fraud is the " judgment of the law upon facts 
 and intents." ' 
 
 1 Robinson v. Elliott, 22 Wall. 613. 
 
 » Doe dem. Otley v. Manning, 9 East, 64 ; Pettibone v.. Stevens, 15 Conn. 
 19 ; 88 Am. Dec. 57; Beerg ». Botsford, 18 Conn. 146; Sturtevant v. Ballard, 
 9 Johns. 387 ; 6 Am. Deo. 281 ; Morgan o. Elam, 4 Terg. 488 ; Worseley v. 
 De Mattes, 1 Burr. 467 ; Rea ». Alexander, 5 Ired. L. 644. 
 194 
 
CEITICISMS XJPON THE DOCTRINE EXAMINED. § 120 
 
 § 120. The law and the facts in cases of alleged fraud. — 
 
 A very full explanation of the relative offices of the court 
 and the jury in these cases is given in Hughes v. Cory/ by 
 Judge Dillon, who, it would seem, might have applied his 
 own rules to the case of the mortgage on a stock of goods, 
 then under examination, but for the controlling influence 
 of the Iowa statutes. He says: "A mortgage may be 
 fraudulent in fact because there is no real debt ; or if one, 
 because it is knowingly and purposely overstated, to deceive 
 and keep off other creditors. When these facts are proved, 
 fraud is an inference of law, and the jury is, under the 
 direction of the court, bound to find it ; or though there be 
 a real debt, yet if it can be shown that the controlling 
 motive and object in making and taking the mortgage were 
 not to secure the debt, but to hold the instrument as a shield 
 to protect the debtor from his other creditors, this would 
 make the mortgage fraudulent. The court should so in- 
 struct and the jury so find. These are merely instances of 
 actual fraud, and other cases may easily be imagined. Any 
 instrument is fraudulent which is a mere trick or sham con- 
 trivance, or which originates in bad motives or intentions, — 
 that is, made and received for the purpose of warding off 
 other creditors." Here the learned judg§ refers to sham 
 contrivances as one class of cases indicating actual fraud, 
 and transactions originating in fraudulent intent as simply 
 another class of similar cases, in which the judicial duty is 
 the same. 
 
 The process in the judicial mind, therefore, in those cases 
 where putative mortgages of merchandise are declared 
 fraudulent, is a familiar one, corresponding to that adopted 
 in all cases where self-evident or actual fraud is declared by 
 a court. If the agreement that the mortgager shall retain 
 the possession, potential control, and right of disposition of 
 the goods appear on the face of the mortgage, the court, in 
 
 I 20 Iowa, 399. 
 
 195 
 
§ 121 FRATJDXILENT MORTGAGES OF MERCHANDISE. 
 
 exercising the duty of construing that instrument, ascertains 
 the fraud; and no further duty could in such a case be 
 assigned to a jury than to find the fact of the execution of 
 the instrument, if that were disputed. If such an agree- 
 ment appears by evidence aliunde, the result is the same 
 when the fact is found ; and no further duty can properly 
 be assigned to a jury than to determine the fact of the 
 agreement ; when that fact is found, by verdict of a Jury or 
 otherwise, the judicial process is the same as if the fact 
 appeared on the face of the mortgage. In each of these 
 cases the fraud is adjudicated by the court as actual, not 
 presumptive fraud. 
 
 § 121 . Fraud predicated of the transaction Itself, rather 
 than of the motives of the parties. — But are the courts 
 right who hold such a transaction to be actually fraudulent? 
 Inasmuch as there is no universal and common definition of 
 fraud, and it seems difficult to secure one, it may be that 
 this is a question to be determined simply by the prepon- 
 derance of authority ; and if, as has been shown, the logical 
 processes of jurisprudence have been properly employed in 
 reaching the result that such a transaction is actually fraud- 
 ulent, the weight of authority, if on that side, ought to 
 be allowed to close the discussion. But the reasoning 
 employed and the elucidation afforded by the courts in ad- 
 judicating that there is fraud in these transactions, seem suf- 
 ficient to bring them within the original definition of fraud 
 as deceit or covin. The question is, is it an actual fraud 
 for A. to execute a so-called mortgage on his stock of goods 
 to B., ostensibly to secure a debt, but reserving to himself, 
 by an arrangement in which B. participates, the power to 
 dispose of the goods in the usual course of trade at his dis- 
 cretion ? First, inquiring in what sense the word fraud is 
 used, we find it applicable to the transaction between the 
 parties, rather than to their intent. Covin, in the old 
 196 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 121 
 
 English law, according to the definition given by Montague, 
 Chief Justice, in 1550, was " a secret agreement deter- 
 mined in the hearts of two or more men to the prejudice of 
 another."^ But the word agreement as used in this def- 
 inition did not necessarily imply an agreement to commit 
 intentional deception, or an agreement to attempt prejudice 
 to another. The agreement to do the act in question was 
 the fact to be determined, and the circumstance that it 
 would operate to the prejudice of another was what made it 
 covinous. 
 
 The juridical idea is the same in the adjudications in the 
 class of modern cases under consideration. The intent of 
 the parties (the mortgagee concurring) is that the mortgage 
 shall operate in a certain manner. The transaction being 
 tested by its characteristics, it is observed to be fraudulent. 
 The mortgage is but nominally a mortgage, for the mort- 
 gager retains a full power of disposal of the property, and, 
 in the language of Chancellor Kent, he " sports with the 
 property as his own." ^ To allow this transaction to stand 
 as a mortgage is to treat a sham as a reality, and to allow it 
 to operate as a deceit, for it would furnish the mortgager an 
 effectual shield against his creditors, while he was exercis- 
 ing all practical ownership over the goods. Finding this 
 to be the operation of the transaction, the court adjudges 
 it to be a fraud ; and this without inquiring whether the 
 parties intended to defraud, or intended anything more 
 than to do what they actually did. Is this other than an 
 actual fraud? If the character of "fraudulent" is im- 
 puted to the transaction, and not to the parties thereto, it 
 is difficult to conceive of a more apt application of the 
 term. This, it will be observed, is a rule of jurisprudence, 
 or of substantive law, and not a rule of evidence or of mere 
 procedure. No process of presumption has been employed ; 
 
 1 Wimbish v. Tailbois, Plowden, 38 (at p. 54). 
 ' BiggB V. Murray, 2 Johns. Ch. 665. 
 
 197 
 
§ 122 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 but facts have been found with certainty, to which a definite 
 rule has been applied. 
 
 § 122. The courts test such mortgages by their char- 
 acteristics. — This rule of testing the transaction by its 
 characteristics, is the one applied in both the English and 
 American cases already cited. It is applied as a rule of sub- 
 stantive law, based on the unreal and deceptive character of 
 the transaction, which is held to render the transaction fraud- 
 ulent. Its practical application in this class of cases begins 
 with Twyne's Case,^ where one reason given for the judg- 
 ment of fraud was, " the donor continued in possession and 
 used them as his own, and by reason thereof, he traded and 
 trafficked with others, and defrauded and deceived them." 
 Said Lord Mansfield, in a case of this sort :* " They who 
 dealt with him trusted to his visible trade and stock ; they 
 were imposed on by false appearances." It was incon- 
 sistent," said Lord Kenyon,^ that the grantor should " exe- 
 cute acts of ownership," after having ostensibly jJarted 
 with her property to another. Such a transaction was in 
 Virginia held to be "felo de se;" " as a security, naught," 
 but resulting in merely a personal security ; a reservation 
 to the grantor of a full power of revocation, and therefore 
 " fraudulent per se." * Such a transaction being designed 
 by the parties to be not operative between themselves, 
 and being necessarily prejudicial to the rights of other 
 parties, the New York courts pronounce it "conclusively 
 fraudulent." ^ The Ohio courts find its only and necessary 
 effect to be that of " a ward to keep off other creditors." ^ 
 The Supreme Court of the United States takes the same 
 
 1 3 Coke, 80. 
 
 ^ Worseley v. DeMattos, 1 Burr. 467. 
 " Paget V. Perchard, 1 Esp. 205. 
 ' Lang V. Lee, 3 Band. 410. 
 
 ' EusBsU ». Winne, 37 N. Y. 591 ; Southard v. Benner, 72 N. T. 424. 
 « Collins V. Myers, 16 Ohio, 547. 
 198 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 123 
 
 view, and says that such a mortgage " is inconsistent with 
 the nature and character of a mortgage, is no protection to 
 the mortgagee, and of itself furnishes a pretty effectual 
 shield to a dishonest debtor ;" and that at last "it is but an 
 expression of confidence, for there can be no real security 
 where there is no certain lien." ^ In Wisconsin, such an 
 instrument is thought to be " per se fraudulent and void in 
 law," and " the fraud which the law imputes to it is con- 
 clusive."* In Tennessee, it is considered that in such a 
 transaction there " are such facilities for fraud that it must 
 be held as wanting in legal good faith, on the plain princi- 
 ple that every reasonable man is presumed to intend the 
 probable consequences of his own acts;" and " there is 
 clearly a benefit contracted for to the grantors, and a preju- 
 dice to the rights of other creditors." ^ 
 
 In short, to sum up the whole argument, a mortgage or 
 conveyance of this kind presents a false appearance, is only 
 a pretence as a mortgage, is calculated to deceive, cannot 
 fail to deceive if it be operative, furnishes unusual facilities 
 for fraud, reserves benefits to the grantor, and prejudices 
 other creditors. When it thus appears that the transaction 
 is, in its results, so fraudulent, and so injurious to creditors, 
 that few transactions could be more so, even where an intent 
 to defraud exists so as to bring them within the statute of 
 13 Eliz., the courts are as ready to adjudge the transaction 
 fraudulent as they would be if a fraudulent intent appeared. 
 
 § 123. Reglstrfition does not validate a fraudnlent 
 transaction. — It has been sometimes urged that all the 
 fraudulent characteristics of such a transaction are elimi- 
 nated as soon as the contract is registered. This argument 
 proceeds on the erroneous supposition that constructive 
 notice of a fraud renders the fraud inoperative ; and it in- 
 
 1 Bobinson v. Elliott, 22 Wall. 613. ^ Blakeslee v. Bossman, 43 Wis. 116. '' 
 3 Bank «. Ebbert, 9 Heis. 153. 
 
 199 
 
§ 123 FEAUDULENT MORTGAGES OP MERCHANDISE. 
 
 volves an erroneous understanding of the office of registra- 
 tion of chattel conveyances. It is hardly to be believed 
 that any court would consider constructive notice of an 
 intentional fraud as sufficient to purge the transaction. 
 Suppose A. and B. to enter into a written contract, one 
 stipulation of which provides that B. shall cheat C, and 
 then the contract is registered ; would constructive notice to 
 C. by means of the registration suffice to validate the trans- 
 action between B. and C, so that C. could not avoid it for 
 the fraud? Or suppose D. to convey all his real estate in 
 trust to E. for the benefit of D.'s wife and children, ex- 
 pressing upon the face of the deed that it is to prevent F. 
 from levying his execution upon it ; would registration of 
 that deed operate to prevent F. from having the voluntary 
 conveyance set aside? Yet these are simply cases of fraud, 
 evidenced by different facts. The fraud is still fraud, and 
 it is adjudged to be such, in cases where a mortgager 
 of goods reserves the possession with power of sale in 
 the usual course of trade. The truth is that the construc- 
 tive notice given by registration of chattel conveyances is 
 designed to and does opBrate only upon the question of 
 possession of the property. The distinction has been fre- 
 quently pointed out by the courts, among them the Supreme 
 Court of the United States in Kobinson v. Elliott.^ The 
 rule is the same in England, under the " Bills of Sale Eegis- 
 tration Act." Mr. May says, in his work on Fraudulent 
 Conveyances : " "Of course the mere fact of due registration 
 of a bill of sale under this act does not necessarily make it 
 good against creditors; " though " it gives publicity to the 
 transaction, and in that way removes one great element of 
 fraud," namely, that arising from retention of possession 
 alone. 
 
 Mr. May's treatise sheds still further light on the subject. 
 Judge Lowell, in Brett v. Carter," referred to this valuable 
 
 ' 22 Wall. 513. « p. 120. » 2 Low. 458. 
 
 200 
 
CEITICISMS UPON THE DOCTRINE EXAMINED. § 124 
 
 ■work as stating the law of England to be, that in the cases 
 under discussion the question of fraud is always one of 
 fact. This is taken from page 106, where Mr. May says : 
 " It appears, then, that in all cases of this nature the ques- 
 tion of fraud or not is a question of fact for a jury." But 
 the learned judge overlooked the fact that when using this 
 language Mr. May was speaking of that class of cases where 
 the retention of possession alone is claimed to be fraudu- 
 lent. What that author says of the law of England as 
 affecting the class of cases now under consideration will be 
 found at page 100, in these words: " The rule seems to be 
 that where there is an absolute conveyance, and the grantor 
 remains in possession in such a way as to be able to use the 
 goods as his own, it is always void against creditors, even 
 though made on valuable consideration." This indicates 
 that the substantive law of England is in accord with the 
 prevailing doctrine in America. 
 
 § 124. The policy of allowing such transactions con- 
 sidered. — Second: Is the doctrine of Robinson v. Elliott 
 " contrary to sound policy? " The argument that it is so 
 rests on the proposition that because the statutes requiring 
 registration of chattel mortgages " are a substitute for pos- 
 session by the mortgagee, and repel all imputation of fraud 
 which would arise from the want of it," therefore, there 
 is no reason why a reasonable use of the property by the 
 mortgager should be prohibited ; and that ' • if the use be 
 such that the property is not consumed by the very act of 
 using it, there can be no reasonable objection to allowing 
 such use." ^ This argument presents two difficulties. It 
 does not follow that because the statute relieves the case of 
 all imputation of fraud so far as concerns piossession alone, 
 it is also potent to relieve as to fraud resulting from posses- 
 sion with discretionary power of sale. To suppose so is to 
 
 1 Jones on Chat. Mort., sect. 380. 
 
 201 
 
§ 125 PBAUDTXLENT MORTGAGES OP MERCHANDISE. 
 
 disregard entirely the distinguishing element of such a 
 power of sale. This feature of such conveyances is con- 
 trary to " sound policy," no less than to " sound princi- 
 ples of jurisprudence," and for the same reasons already 
 referred to ; jurisprudence and policy concurring in this 
 respect. Again, it cannot be said of a discretionary power 
 of sale, that it is a use ' ' such that the property is not con- 
 sumed by the very act of using it," for the result under the 
 exercise of such a power is an effectual consumption of the 
 property so far it concerns all creditors and their liens, 
 either present or prospective ; so that a use which implies an 
 unlimited power of sale is precisely equivalent to a use which 
 involves consumption of the property. Even in Massachu- 
 setts, it is held that if a mortgager " uses and consumes the 
 property in the same manner as he would have done if no mort- 
 gage had been made , " ^ the transaction is fraudulent as against 
 creditors. In both classes of cases, whether the grantor 
 has consumed the property or has sold it, he has continued to 
 use it as his own ; in eithet case, the property flies out from 
 under the supposed lien, and is gone ; the debtor has appro- 
 priated it to his own use; it is out of the reach, not only of 
 other creditors, but of the very creditor who, it was pre- 
 tended, was secured; this creditor has, either directly or 
 tacitly, sanctioned the arrangement by which the result was 
 accomplished; and the pretended security has in every such 
 case operated for the benefit of the debtor alone. Can 
 there be any view of sound policy which will allow such 
 results to flow from a conventional arrangement between 
 debtor and creditor? Or could any sound policy do other- 
 wise than to condemn in advance all conventional arrange- 
 ments under which such results are probable? 
 
 § 125. ArgnmentslnfaTOr of such a policy answered. — 
 
 The argument has been frequently pressed with earnestness 
 
 ' Kobbins v. Parker, 3 Met. 117. 
 202 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 125 
 
 in detail ; but' in every instance, the answer to the argument 
 seems plain and irrefragable. A " good reason " why the 
 mortgager of a stock of goods should remain in possession , 
 and continue to make sales in the usual course of his trade, 
 has been assumed to be this, that " he can manage them 
 better than the mortgagee can." ^ The answer to this sug- 
 gestion is : It is because it is better, but better only for the 
 mortgager himself, that jurisprudence and policy interpose 
 an objection. But, " Neither can a trader or manufacturer 
 stop his business in order to give security to a mortgagee of 
 his stock." ^ Answer: Then he should not j)reiend to 
 * ' give security ; ' ' sound policy, as well as the law, demands 
 frankness and honesty, and reprobates pretences ; as the 
 trader or manufacturer cannot in good faith " give secur- 
 ity," it is fraudulent to pretend that he can. But, "It is 
 plain that such a doctrine virtually prevents a trader from 
 mortgaging his stock at any time for any useful purpose." ' 
 Answer: This is a, non sequitur ; the right to mortgage a 
 stock of goods for a useful purpose can scarcely be im- 
 paired by a rule which prohibits a mortgage of such goods 
 for a vicious purpose. But, "If he cannot sell in the or- 
 dinary course of trade, or only as the trustee and agent of 
 the mortgagee, he might as well give possession to the mort- 
 gagee at once and go out of business." * Answer: That is 
 what the law means by " security " and " mortgage; " if 
 the " mortgage " be not a real security, it is but a sham. 
 To attempt to fasten a valid and certain lien upon goods 
 which may at any moment, at the will of the debtor, fly 
 out from under the lien, is to attempt a legal and moral im- 
 possibility. To pretend seriously that such a thing is possi- 
 ble, is fraudulent. But, " To hold that a merchant cannot 
 mortgage his goods without closing his doors, would be to 
 hold that no mortgage of a merchant's stock can be made 
 
 1 Jones on Chat. Mort., sect. 381. ^ Brett v. Carter, 2 Low. 468, 
 
 ' Ibid. * Ibid. 
 
 203 
 
§ 126 FRAUDULENT MOETGAGES OF MEECHANDISB. 
 
 at all." ^ Answer : To this objection it may be replied that, 
 if what is implied be added, viz. : that no mortgage of a 
 stock can be made which shall continue it as a stock in usual 
 trade, it then states and illustrates the case exactly, and 
 thus it is no objection at all. No mortgage can be made of 
 a merchant's stock, which keeps his doors open for the pur- 
 poses of the merchant's business, because such a transaction 
 would be inconsistent with the very character of a mort- 
 gage. 
 
 § 126. Defective views of the subject Illustrated. — A 
 
 good illustration of the defective view of the real question 
 which distinguishes all these objections to the doctrine, is 
 found in the argument which was pressed upon the court in 
 Hedman v. Anderson.^ The trial court had been asked to 
 charge the jury that a mortgage on a stock of goods in 
 trade would be vitiated by an agreement, in or out of the 
 mortgage, allowing sales by the mortgager in the usual 
 course of trade ; and that the jury might consider, in de- 
 termining the question, the fact that such sales were made 
 with the knowledge of the mortgagee, and without objec- 
 tion by him. Counsel for the defendant in ei*ror, arguing 
 to sustain the action of the court in refusing such instruc- 
 tion, said: — 
 
 •' The substance of the alleged error in the rulings of the 
 district court is this : that the mere fact that the mortgager 
 disposed of some part of the property for his own use, with 
 the knowledge and without the dissent of the mortgagee, 
 did not of itself render the mortgage void as to the plain- 
 tiff, provided there was no agreement in or out of the mort- 
 gage that the property might be so disposed of. This was 
 not error. The cases do not say so ; and the proposition 
 that such an acquiescence by the mortgagee necessarily ren- 
 
 1 Gay V. Bidwell, 7 Mich. 519; Hickman v. Perrin, 6 Cold. 135. 
 
 2 6 Neb. 392. 
 
 204 
 
CEITICISMS UPON THE DOCTRINE EXAMINED. § 126 
 
 ders his mortgage void, that it nullifies and makes worthless 
 a security valid and unassailable down to the moment of 
 such permission, is untenable upon grounds of reason. To 
 what results would that doctrine lead ? A mortgage is given 
 for money loaned. There is no intent to defraud. It con- 
 tains no power of sale or disposition by the mortgager. 
 It even says in terms that he shall not sell, or dispose of, or 
 remove it, and if he does so, or attempts to do so, the 
 mortgagee may take possession and foreclose. It covers 
 one thousand barrels of flour; but the mortgager takes one, 
 or ten, and uses them in his family, with the acquiescence or 
 affirmative permission of the mortgagee. It covers a stock 
 of goods. But the mortgagee sees the mortgager sell a few 
 articles to customers, or take a pound of tea for his own 
 use, or cut off a shroud to bury his child in, and makes no 
 objection. Down to this time his mortgage has been honest 
 and valid, and unimpeachable by creditors or others ; but 
 by this act of silent acquiescence, or positive consent, he 
 forfeits all rights under it. His security is blown away with 
 all the suddenness and effectiveness of a dynamite explosion. 
 Yet the position of plaintiff in error leads exactly to that 
 conclusion. It rejects every test of an intent to defraud, 
 all inquiry as to an agreement for a power of disposal, all 
 investigation as to whether any wrong is being done to 
 creditors, and makes the fact of any sale, any disposal, any 
 use of the mortgaged property by the mortgager, operate 
 per se to nullify and invalidate a security not either void or 
 voidable at its inception." 
 
 Inasmuch as the trial court had been asked to leave to the 
 jury the question whether a single instance of a sale of 
 goods by the mortgager would be sufficient proof of an 
 agreement to allow such, sales, the argument drawn from 
 the insignificant character of a single small sale does not aid 
 in the consideration of the question of law. Certainly, the 
 question whether the vicious agreement is sufficiently proven 
 
 205 
 
§ 127 FKAUDXILENT MOETGAGBS OF MBKCHANDISE. 
 
 is merely a question of evidence. The important question 
 is, supposing it to be well proven, what rule of Substantive 
 law or of sound policy applies? The argument above 
 quoted, in cfimmon with all the others on the same side of 
 the question, exhibits a conspicuous inattention to the essen- 
 tial requisite of a mortgage of personalty, that it must be 
 a certain security upon specific property ; and it further 
 ignores the manifest inconsistency of allowing the mort- 
 gager a discretionary power of sale over the property. 
 
 § 127. Characteristics of a Chattel Mortgage. — What is 
 a mortgage ? The definition given by the learned author of 
 the treatise on the ' ' Law of Mortgages of Eeal Property' ' 
 is so succinct and clear that it will doubtless meet universal 
 approval, viz. : A mortgage is " a qualified conveyance of 
 property, whereby the owner parts with it so far as to make 
 it a security to his creditor, and his creditor holds it in such 
 a way that the owner may, by equitably fulfilling his obliga- 
 tion, hsive his own again." ^ Further: "It must clearly 
 indicate the creation of a lien, specify the debt to secure 
 which it is given, and the property upon which it is to take 
 effect." ^ Mutatis mutandis, the same description and con- 
 ditions will apply to and characterize a mortgage of chattels. 
 The same author says of this class of conveyances: "A 
 formal mortgage of personal property is a conditional sale 
 of it as security for the payment of a debt or the perform- 
 ance of some other obligation. If the condition be not 
 performed according to its terms, the thing mortgaged is 
 irredeemable at law, though there may be a redemption in 
 equity, or by force of statute. Such a mortgage is some- 
 thing more than a mere security, it * * * operates 
 to transfer the legal title to the mortgagee, to be defeated only 
 by a full performance of the condition." ^ Such a convey- 
 ance differs from a mortgage of real estate in respect of the 
 
 ' Jones on Mortgages, sect. 8. a id. sect. 60. 
 
 ' Jones on Chattel Mort, sect. 1. 
 206 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 128 
 
 character of the estate vested in the mortgagee. But in the 
 main elements of a mortgage, it bears so close la resem- 
 blance to a mortgage of real estate, as fully to justify the 
 use of the term " mortgage "in describing it . Among these 
 elements are, a certain and unambiguous description of 
 specific property, and a certainty of lien ; and these are 
 essentials. To apply the term to an instrument under which 
 the owner of the property gives his creditor no real security, 
 no certain lien, which takes no effect upon the property de- 
 scribed if the grantor so wills, and under which he may at 
 his pleasure recover the property as his own, by selling it 
 and pocketing the proceeds, without fulfilling his obligation, 
 is to disregard all the foregoing excellent definitions of a 
 mortgage, and to make a sham the equivalent of a reality. 
 If a chattel mortgage having the essential features of cer- 
 tainty of property and lien were suddenly to lose by any 
 means the element of certainty of lien, it may not be a very 
 violent figure of speech to say that the mortgagee's security 
 " is blown away with all the suddenness and effectiveness 
 of a dynamite explosion." But this is only saying in an- 
 other form that the element of certainty of security is 
 essential to a mortgage. 
 
 § 128. Effect of a power of sale reserved to the 
 Mortgager. — One other objection to the doctrine of Eobin- 
 son V. Elliott is said to be that " it assumes a power of dis- 
 position in the mortgager such as is never given, namely, a 
 power to dispose of the whole property at once ; whereas 
 the power of disposal in such mortgages is merely that the 
 mortgager may sell in the ordinary course of trade." A 
 power to sell the whole ' ' might well be regarded as render- 
 ing the instrument void;" J)ut permission to sell at retail is 
 only " permission to free small portions of the goods, from 
 time to time, from the incumbrance of the mortgage."^ 
 
 1 Jones on Chat. Mort,, sect. 420. 
 
 207 
 
§ 129 TEAUDULENT MORTGAGES OP MEECHANDISE. 
 
 This would seem to be a distinction without a difference. 
 Permissipn to sell " portions, from time to time," is exactly 
 equivalent to permission to sell, during the entire lapse of 
 time, the whole. Courts would take judicial knowledge of 
 the fact that merchants buy goods only to sell, and that the 
 success of their business as a whole depends upon the sale 
 of all their goods. Under the usual provisions of such 
 mortgages, it is intended that as fast as " small portions of 
 the goods" ai-e freed from "the incumbrance of the 
 mortgage " by sale, other goods are to be purchased, which 
 shall pass under the incumbrance. 
 
 In Phelps V. Murray,^ it was held by a learned judge that 
 such a contract " is against public policy, throwing open too 
 wide a door for possible fraud." This view is, even by 
 those who insist that the doctrine is contrary to sound policy, 
 admitted to be " entitled to candid consideration."" Must 
 not candor admit further that the possibilities of fraud under 
 such a transaction are exceedingly numerous, and that no 
 sound policy can tolerate them for this reason ? 
 
 §129. Reasons for the existence of the doctrine . — ^Third : 
 The foregoing considerations serve to show, to some extent, 
 that the doctrine in question has reasons for its existence, 
 derived from general observation and experience. Various 
 courts, both English and American, when called upon to deal 
 with such conveyances, have put upon record their judgments 
 as to the operation of these conveyances in actual practice. 
 As observers, their reports of what they have observed 
 are entitled to consideration. It has been assumed that ' ' as 
 a matter of experience and observation, the courts must have 
 seen that such mortgages are no more likely to be fraudulent 
 in fact than any other; and they must have seen that, in a 
 mercantile or manufacturing community, if not elsewhere, 
 
 ' 2 Tenn. Ch. 746, per Cooper, Chancellor. 
 ' Jones on Chat Mort, sect. 428. 
 208 
 
CBIXICISMS XrPON THE DOCTBINE EXAMINED. § 130 
 
 the doctrine works badly."' This assumptioa is not sup- 
 ported by the large majority of the decisions. In the many 
 cases heretofore cited, while the courts have generally agreed 
 that fraudulent intent was immaterial to the inquiry, they 
 have concurred in adjudicating that the transaction is 
 actually fraudulent. Learned courts, as a rule, are acute 
 and trained observers ; and when they not only concur in 
 declaring the doctrine in question a salutary one, but state 
 further the important facts which they find to demand its 
 apphcation in particular cases, they may well be taken as 
 furnishing abundant reasons therefor, derived from their 
 own general observation. 
 
 § 130. Testimony of negative witnesses. — The courts 
 who are unable to see the fraud in such cases have fre- 
 quently placed themselves in the attitude of merely nega- 
 tive witnesses. Judge Lowell said, in Brett v. Carter : ^ " If 
 it be said that this is one of those cases in which fraud is 
 a necessary result of the deed, all I can say is that this 
 brings us to an ultimate fact of observation and experience, 
 and I am unable to see the necessity." Judge Story said, 
 in Mitchell v. Winslow: ^ " I am not aware of any policy of 
 the law, or any principle of law, which makes any convey- 
 ance of this sort invalid as to creditors, if they have full 
 notice, or may have full notice of it, by the exercise of rea- 
 sonable diligence. I profess that / am not able to perceive 
 any." And Judge Dillon, in Hughes v. Cory,* after stat- 
 ing argumentatively the provisions of the Iowa statutes as 
 to attachments and receivers, distinguishing the Iowa prac- 
 tice from that of other States, and claiming that under that 
 practice the mortgage would be no obstacle to other 
 creditors who might wish to levy on the goods, said: 
 " I7br do we see that the mortgage, in the sense prohibited 
 
 1 5 Sou. Law Rev., p. 661. 
 
 
 5 2 Story, 630. 
 
 " 2 Low. 458. 
 
 
 * 20 Iowa, 899. 
 
 
 14 
 
 209 
 
§ 131 FRA.UDULE^'T MORTGAGES OF MERCHANDISE. 
 
 by the law, reserves an interest in or secures a benefit to 
 the mortgager at the expense of his other creditors." 
 
 These are trained observers, who have not, however, been 
 able, as they declare, to see the fraudulent or vicious effect 
 of sttch transactions. 
 
 § 131. Testimony of afllrmatlve witnesses. — On the 
 
 other hand, the trained observers are numerous who pro- 
 fess to have learned by their own observation the reasons 
 for the existence and the application of this doctrine. Mr. 
 Justice Davis said of the mortgage investigated in Eobinson 
 V. Elliott,^ " Manifestly it was' executed to enable the mort- 
 gagers to continue their business, and appear to the world 
 as the absolute owners of the goods, and enjoy all the 
 advantages resulting therefrom. There was nothing to put 
 creditors on their guard. This long-continued possession 
 and apparent ownership were well calculated to disarm sus- 
 picion." In Twyne's Case, the judges of the Star Chamber 
 observed that the donor continued in possession of the goods, 
 " and used them as his own, and by reason thereof he traded 
 and trafficked with others, and defrauded and deceived 
 them." Lord Hardwicke and his associate judges saw 
 that such an arrangement under a mortgage " gives the 
 mortgager a false credit."^ Lord Mansfield thought those 
 who dealt with the grantor under such circumstances " were 
 imposed on by false appearances." ' Mr. Justice Buller's 
 suppositive colloquy between mortgager and mortgagee 
 imputes to the latter the proposition, " Give me the com- 
 mand of the property, and you shall have it to hold out to 
 the world and your creditors as your own." * In Lang v. 
 Lee,^ the court could not " imagine a power more com- 
 pletely adequate to the destruction of the avowed purpose 
 
 1 22 Wall. 513. « Edwards v. Harbtn, 2 Term, 587. 
 
 ' Eyall V. Eolle, 1 "Wils. 260. » 3 Rand. 410. 
 
 " Worseley v. De Mattos, 1 Burr. 467. 
 210 
 
CRITICISMS UPON THE DOCTRINE EXAMINED. § 131 
 
 of the deed ; " which power was described in Sheppards v. 
 Turpin^ as one by which the grantor might, "without any 
 violation whatever of the express stipulations of the deed, 
 divert the whole of the property to uses and purposes 
 wholly foreign to the leading object avowed." ExercJising 
 such a power in another case, " up to the date of the levy 
 of the execution, the grantor carried on his business just as 
 he did before the execution of the deed, selling the goods, 
 receiving the money, buying other goods, rendering no 
 account, but conducting his business as if no deed had been 
 executed." * The New York courts declare that " to sanc- 
 tion a transaction like this would open a door to frauds in- 
 numerable, and to an extent incalculable;"' its effect 
 would be " not to create an absolute lien on any property, 
 but a fluctuating one, which should open to release that 
 
 . which should be sold, and take in what should be newly 
 purchased; " * and " its only operation must be to the pre- 
 judice of others."" Such a mortgage is in New Hamp- 
 shire observed to be "like a kaleidoscope;"* and to be 
 *' practically effective only to ward off the claims of other 
 creditors." ' If it were maintained, " the mortgager would 
 dispose of the goods for his own benefit and without paying 
 the mortgage debt, and then mortgage the goods; obtained 
 to replenish his stock, to the same friend for the same 
 debt, and so continue his business and be enabled to snap 
 
 ' his fingers at his other creditors."* The consequences of 
 maintaining such transactions as valid " would be most dis- 
 astrous." ^ In Ohio, such a mortgage was seen to be " no 
 specific lien, but a floating mortgage, which attaches, swells 
 
 1 8 Grat. 357. ' Perry v. Bank, 27 Grat. 756. 
 
 ' Divver v. McLaughlin, 2 Wend. 596, 20 Am. Deo. 655. 
 
 * Mittnacht ». Kelly, 3 Keyes, 407. 
 
 s Kussellu. Winne, 87 N. T. 591. 
 
 « KanlettB. Blodsett, 17 N. H. 298, 43 Am. Dec. 603. 
 
 ' Putnam v. Osgood, 51 N. H. 192. 
 
 8 Ibid. ' ' Ibid. 
 
 211 
 
§ 131 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 and contracts, as the stock in trade changes, increases and 
 diminishes, or may wholly expire by sale at the will of the 
 mortgager." ^ It was said of such a mortgage in Illinois: 
 " If this was not intended to defraud other creditors, it cer- 
 tainly was well calculated to do so, as it placed all of K.'s 
 property beyond thefr reach for fifteen months, and enabled 
 him to carry on his business with the property, precisely 
 as though it was not incumbered."^- According to the 
 observations of the Tennessee courts, the reservation of the 
 power of sale in such a mortgage ' ' is totally inconsistent 
 with the rights of other creditors, and of necessity viti- 
 ates " the transaction ; ' in it there " are such facilities for 
 fraud, that it must be held wanting in legal good faith; " * 
 such stipulations " tend inevitably to give a fraudulent 
 advantage to the debtor over his other creditors; "* and 
 the mortgage " does hinder and delay creditors in the . 
 enforcement of their claims," * while at the same time it 
 opens "too wide a door for possible fraud." ^ In Missis- 
 sippi, as in New York and Ohio, such a mortgage was 
 looked upon as " a shifting lien, which took hold of the 
 goods on hand; and as these were sold off, it separated 
 itself, but at once fastened upon the note or book account 
 owing by the buyers; " and in the meantime, as the trans- 
 action appeared to the court, "the other creditors must 
 stand the varying fortunes of the venture, without power 
 or right to move against the goods ;"8 from which it was 
 " manifest that the object was not to apply these things to 
 the payment of the debts, but to secure the debtor in 
 their possession and enjoyment." ' The characteristics of 
 another such arrangement were seen to be that it "was 
 
 ' Collins V. Myers, 16 Ohio, 647. 5 jjjj^^ 
 
 ' Greenebaum O.Wheeler, 90111.296. « Ibid. 
 
 3 Gait V. Dibrell, 10 Terg. at p. 155. ' Phelps ». Murrav, 2 Tenn. Oh. 746 
 * Bank v. Ebbert, 9 Heisk. 153. » Haman v. Hoskins, 56 Miss. 14^ " 
 
 ' Bank v. Douglas, 11 S. & M., at p. 541. 
 212 
 
CRITICISMS UPON THE DOCTRINK EXAMINED. § 132 
 
 antagonistic to the regular and usual course of business, 
 tended to break down commercial confidence and credit, 
 and to entail losses upon those who trusted their goods and 
 property to the retail merchant ; " which arrangement was 
 adjudged to be " fraudulent as to subsequent creditors, 
 as much so as if it had been contrived with that motive 
 and for that object." ^ The courts of Wisconsin, Indiana, 
 Pennsylvania, Connecticut and Missouri have in like manner 
 announced, in express terms, their respective observations 
 of the workings of such arrangements between an embar- 
 rassed debtor and his creditor. And the United States 
 courts have given frequent confirmations of these observa- 
 tions; saying of one such mortgage that it was " a sham, 
 a nullity, a mere shadow of a mortgage, only calculated to 
 ward off other creditors ; a conveyance in trust for the 
 benefit of the person making it;"^ and of others, that 
 they must necessarily hinder, delay, and defraud creditors.* 
 
 § 132. Testimony of other observers. — Nor are the ob- 
 servations of the vicious consequences resulting from such 
 attempts to qualify or limit the effect of a mortgage upon 
 chattels confined to those courts which declare these arrange- 
 ments fraudulent. Other courts, which entertain a different 
 view of the substantive law of the case, have professedly 
 seen the difficulties, or some of them, inherent in such 
 transactions. In North Carolina, the following features 
 were observed in a case then under examination: " The 
 merchandise retailed lost the power of identity as soon as 
 sold. The corpus itself was lost and destroyed beyond 
 pursuit or recovery. The power to sell was the power to 
 destroy, and the sale was the destruction and extinction of 
 the property." * In Alabama, one such transaction was ob- 
 
 1 Hilliard b. Cagle, 46 Miss. 309. 
 
 ' Catlin V. Currier, 1 Saw. 7. 
 
 ' Be Burrows, 7 Biss. 526 : Ke Bloom, 17 N. B. K. 425. 
 
 * Cheatham v. Hawkins, 76 N. C. 335. 
 
 213 
 
§ 132 FKAUDULENT MOETGAGES OF MERCHANDISE. 
 
 served to be devoid of " even the dubious merit of providing 
 that the proceeds of sales to be made shall be paid over to the 
 mortgagee ;" ^ and another was seen to be " a device to de- 
 fraud creditors, and through that medium to give the debtor 
 the control and enjoyment of his property." ^ It is believed 
 in Georgia that •' the permission to give such a mortgage, 
 though a very convenient privilege, is one very easily used 
 to commit fraud." ^ In Kansas, it is conceded that " doubt- 
 less such arrangements are liable to abuse, and should 
 always be closely scanned." * Even in Iowa, it is under- 
 stood that " if the mortgager is permitted to deal with the 
 property as his own, the mortgage security is not altogether 
 safe or certain ; much is necessarily left to the honesty and 
 good faith of the debtor." 
 
 These deceptive, misleading, injurious, and vicious char- 
 acteristics, as seen in such transactions by these numerous 
 and careful observers, according to their own statements, 
 furnish the sufficient reasons for the existence of the doc- 
 trine of Eobinson v. Elliott. 
 
 ' Price V. Mazangs, 31 Ala. 701. 
 ' Smith V. Leavltts, 10 Ala. 92. 
 ' Goodrich e. ■WilUamB, 50 Ga. 425. 
 
 * Frankhouserv. EUett, 22 Kas. 127, 31 Am. Rep. 171. 
 
 • Torberts. Eayden, 11 Iowa, 435. 
 
 214 
 
SUPPOSED QUALIFICATIONS OF THE DOCTRINE. § 133 
 
 CHAPTEE IX. 
 
 SUPPOSED QUALIFICATIONS OF THE DOCTRINE. 
 
 Section 133. Supposed qualifications stated. 
 
 134. Importance of the su{)posed qualiflcp.tions. 
 
 135. Substantive law and adjective law. 
 
 136. The law and the facts. 
 
 137. Second supposed qualification. 
 
 138. A misapplied criticism. 
 
 139. A fundamental distinction. 
 
 140. Further examples of this distinction. 
 
 141. Assignee must act in good faith. 
 
 142. Sale by mortgager passes title. 
 
 143. Grantee in fraudulent conveyance acquires no rights there- 
 
 under. 
 
 144. New transaction between parties may be valid. 
 
 145. First supposed qualification. 
 
 146. The qualification examined. 
 
 147. The mode of proof immaterial. 
 
 148. Legal intent, and intent to defraud, distinguished. 
 
 149. Legal intent at common law. 
 
 150. The distinction overlooked. 
 
 151. General doctrine as to legal intent. 
 
 152. Third supposed qualification. 
 
 153. Conclusions. 
 
 § 133. Supposed qualifications stated. — Notwithstand- 
 ing the clearness with which this doctrine has been enunci- 
 ated in America, the numerous cases which illustrate its 
 fundamental position in our jurisprudence, and the abun- 
 dant reasons furnished by the courts for its existence, it has 
 been gravely argued that this doctrine has been so qualified 
 by leading courts as greatly to weaken its force and lessen 
 its value, if indeed it has not been thereby emasculated. In 
 the treatise mentioned in the preceding chapter, the f oUow- 
 
 215 
 
§ 134 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 inghave been stated as substantial qualifications of the doc- 
 trine. " First. If the agreement (2.6., that the mortgager 
 may dispose of the mortgaged goods at discretion) be not 
 contained in the mortgage itself, the question whether there 
 is any such agreement, and what are the indications of fraud 
 arising from it, is one for the jury. /Second. If the agree- 
 ment be to sell for cash for the benefit of the mortgagee, 
 the mortgage is no longer conclusively fraudulent, but raises 
 only a question of good faith for the jury. Third. The 
 mere fact that the mortgager continues to sell the mortgaged 
 goods, with the knowledge of the mortgagee, is not proof of 
 an agreement between the parties for such sales, and does 
 not render the mortgage fraudulent in law." ^ 
 
 § 134. Importance of the supposed qualifications. — It 
 
 is manifest that these, if in fact qualifications of the doc- 
 trine, are serious ones, and that, wherever admitted or 
 recognized, they must tend to embarrass both the court 
 adjudicating and the attorneys contesting any controverted 
 case ; for their efPect would be to rob the doctrine of all its 
 inherent vitality as a rule of law, and virtually to emascu- 
 late it. Counsel cannot safely advise clients as to the appli- 
 cation to their cases of any rule of law, with the contingency 
 in view that the court may abandon its function of adjudi- 
 cation and relegate the whole case to the jury. The accord- 
 ant adoption by the courts of the United States and those 
 of fourteen of the States, of such a rule of law, if well 
 advised, and on clearly understood grounds, would give the 
 doctrine strength and tend to insure its permanence. But 
 if the doctrine in its integrity should receive only a nominal 
 or partial assent, in any or all of the courts named, and 
 were, in fact, frittered away by qualifications in this or that 
 court, it would, to a corresponding extent, lose respect as 
 well as force. Both courts and lawyers are" thus interested 
 
 ■ Jones on Chat. Mort., sect. 424. 
 216 
 
SUPPOSED QUALIFICATIONS OF THE DOCTRINE. § 136 
 
 in ascertaining whether there are any just qualifications to 
 the doctrine in question, and thfe grounds upon which they 
 rest, and also, what is the real effect of the cases which have 
 been supposed to qualify it. This effect will be best seen 
 by searching for the underlying principles of those cases, 
 and observing the manner in which those principles are 
 allowed to operate therein. This, again, will be more fully 
 illustrated by a brief glance at the extent to which, as well 
 as the manner in which, those principles have been allowed 
 to operate in other classes of cases ; cases which are en- 
 tirely different as to their facts, and are analogous only as 
 being controlled by like principles. 
 
 To examine these questions understandingly, it will be 
 necessary, first of all, to observe the essential characteristics 
 of what are called legal doctrines. 
 
 § 135. Substantive law and adjective law. — The dis- 
 tinction between substantive and adjective law has made its 
 way slowly, but apparently surely, to a recognized place in 
 jurisprudence. Doubtless, it is accepted by all students of 
 the law who see it clearly, as inherent and essential. Sub- 
 stantive law not only has different aims, but is based on radi- 
 cally different principles from those which underlie adjective 
 law. The former is, for obvious reasons, intrinsically more 
 permanent and continuous, though not perfectly so ; while 
 the latter is more readily subjected to change and modifica^ 
 tion. Jurisprudence primarily deals with only the body of 
 substantive law ; while the body of adjective law is consid- 
 ered and discussed under the general term Procedure. It is 
 only some rule of jurisprudence, some part of the substan- 
 tive law, which can be called, in the strict sense, a legal 
 doctrine, 
 
 § 136. The law and the facts. — In all forensic contro- 
 versies, two distinct elements are involved, which are 
 
 217 
 
§ 137 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 separately examined, namely, the law and the facts. For 
 these purposes two distinct processes are employed. By 
 one, the state of facts existing in the particular case 
 is to be ascertained; by the other, the proper rule of 
 substantive law is to be sought for and applied. First in 
 order of time is the ascertainment of the facts of the case ; 
 then follows the application of the rule of law. The result 
 of these two processes is an adjudication. Such is the rec- 
 ognized mode adopted by the judicial tribunals of English- 
 speaking peoples ; the Roman method not being in use, by 
 which authoritative adjudications were made upon hypothet- 
 ical cases. The rules of law newly deduced by this process 
 add to the body of our jurisprudence. As it was expressed 
 by a distinguished jurist: " The law does not consist of 
 cases, but of the principles adjudicated in those cases;" 
 and by another: "It consists of legal principles, lying 
 above, and beneath, and around, and amid the decisions." 
 But all questions as to the mode by which the facts shall 
 thus be ascertained, are questions, not of jurisprudence, or 
 of substantive law, but of procedure only. 
 
 Thus, in all forensic controversies, different states of 
 facts usually call for the application of different rules of 
 law ; and this will always follow when the difference in the 
 facts is substantial. It is, therefore, no disparagement of 
 any legal doctrine, nor is it, in a proper sense, a qualifica- 
 tion of it, to say that it has no application to other states of 
 facts substantially different from those in which its appli- 
 cation has become familiar. 
 
 § 137. Second supposed qualification In the case of 
 
 the second supposed qualification of the doctrine of Robinson 
 V. Elliott, to wit : that requiring the proceeds of sales to be 
 paid to the mortgagee takes the poison out of the infected 
 transaction, it should be remembered that in addition to the 
 state of facts to which that doctrine has been so often ap- 
 218 
 
SUPPOSED QUALIFICATIONS OF THE DOCTEINE. § 138 
 
 plied, there has now been introduced a new and substantially 
 different fact, namely, that the sales to be made by the 
 mortgager, whether in his own name, or as agent for the 
 trustee named in the conveyance, are to be for the sole 
 benefit of the secured creditor. Upon this state of facts, 
 the new and different legal proposition is announced, that 
 the stipulation that all sales shall be for the benefit of the 
 mortgagee renders the mortgage no longer conclusively 
 fraudulent, though it may present a new question of fact for 
 the jury. The element of a discretionary power of sale, re- 
 served to the mortgager, has been eliminated, and in its place 
 is found the substantially different element of a power of sale 
 as the mere agent and for the benefit of the secured creditor. 
 The application to this state of facts of the different rule 
 above stated, sustains the conveyance. Both rules stand 
 well together, and jurisprudence shows no want of harmony 
 in adopting both. The new state of facts supposed presents 
 the familiar case of a contract which infringes no rule of 
 law, and which is accordingly sustained. But it is also 
 familiar law, that the most innocently appearing contract 
 may be a cover for fraud. So the new state of facts sup- 
 posed may, perhaps, present a case calling for an inquiry as 
 to fraudulent intent. If so, -it then presents " a question of 
 good faith for the jury," for the question of a fraudulent 
 intent is one always to be submitted to them. But it would 
 be misleading to call this " a qualification" of the doctrine 
 first referred to ; and it would be erroneous to suppose that 
 the submission of this new question to the jury involves an 
 abandonment of the legal opinion of the court as to the 
 substantially different case first stated. 
 
 § 138. A misapplied criticism. — It has been urged : "Is 
 there any the less a trust between the parties, when the 
 mortgage provides that the mortgager shall apply the pro- 
 ceeds of all sales to the mortgage debt, than there is when 
 
 219 
 
§ 138 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 it says nothing about such application? The proceeds of 
 the sales are in the mortgager's hands, and the mortgage 
 lien does not cover them. If a mortgager's retention of a 
 power of disposal of the mortgaged goods is inconsistent with 
 the idea of a security, is the inconsistency any the less 
 when the mortgager agrees to use the proceeds, not for his 
 own benefit, but for the benefit of the mortgagee ? Is not 
 the distinction a mere shadow? " ^ 
 
 This subtle criticism ignores the substantial fact which 
 leads the courts to sustain the cases referred to, as well as 
 one of the most substantial facts of those cases where the 
 transaction is declared fraudulent. It is the use of the pro- 
 ceeds of sales by the mortgager on his own account that 
 stamps such a ' ' mortgage " as a fraud. It is a trust between 
 the parties which reserves something for the benefit of the 
 grantor, which is condemned by the law. A trust between 
 the parties, which in good faith gives all the proceeds of the 
 property to the creditor, is not objectionable. In such a 
 case, " the proceeds of the sales are " not "in the mort- 
 gager's hands," — that is, in his hands alone. They are in 
 his hands only as agent for the mortgagee, and are thus 
 really in the hands of the latter, and the mortgage lien does 
 cover them. The proceeds of the sales of the goods being 
 faithfully devoted to the payment of the mortgage debt, 
 there is no inconsistency with the idea of a security, but, on 
 the contrary, an entire consistency. Of course, in all cases 
 of this class, an entire and unimpeachable good faith in con- 
 stituting the mortgager an agent for the mortgagee should 
 be shown ; and there may frequently be presented questions 
 in this connection for a jury to pass upon. But when the 
 substantial fact appears that the proceeds of the sales of 
 the goods have been fully and unequivocally applied to the 
 payment of the debt secured, then the fact that the mortgage 
 
 1 Jones on Chat. Moits., sect. 424. 
 220 
 
SUITOSED QUALIFICATIONS OF THE DOCTRINE. § 13& 
 
 has operated as a valid and certain security is beyond 
 question. The distinction between this case and one where 
 the mortgager handles and uses the proceeds of sales for 
 his own convenience and benefit is thus seen to be a sub- 
 stantial one, and no "mere shadow" ; and the " vital in- 
 fringement" of the doctrine, which the critic imputes to 
 this distinction,^ disappears entirely. 
 
 § 139. A fundamental distinction. — All cases in which a 
 power of sale of the goods by the mortgager is provided for 
 are, therefore, to be tested by the question whether such 
 sales are to be made in his own behalf and at his own dis- 
 cretion, and with control of the proceeds reserved to him ; 
 or whether they are to be made solely in pursuance of the 
 trust as a real one, that is, for the benefit of the grantee 
 or mortgagee, and with provision that the proceeds shall 
 be applied on his debt. Accordingly, it will be found that 
 the courts which enforce the doctrine of Eobinson v. Elliott 
 will set aside the one class of conveyances and sustain the 
 other, classifying the cases as they are presented by the 
 application of the test stated. A careful observance of 
 these rules by the bench will insure consistency in the 
 decisions; and a careful examination of them by students 
 will obviate any confusion or misunderstanding as to the 
 effect of each decision. 
 
 Conveyances under which it was provided that the grantor 
 should have possession and power of sale, virtually and 
 practically, as agent for the mortgagee, or for the trustee 
 named in the conveyance, have on this ground been sus- 
 tained in Virginia,* New York,' Ohio,* New Hampshire,* 
 
 I Jones on Chat. Morts. sect. 424. 
 
 » Janney v. Bames, 11 Leigh, 100; Marks v. Hill, 15 Gratt. 400. 
 
 » Ford V. 'Williams, 24 N. Y. 359 ; Miller v. Lookwood, 32 N, Y. 293. 
 
 * Kleine v. Katzenberger, 20 Ohio St. 110, 5 Am. Bep. 630. 
 
 ' Wilson V. Sullivan, 58 N. H. 260; Barker v. Hall, 18 N. H. 298. 
 
 221 
 
f 141 FRAUDULENT MORTGAGES OF MEKCHANDISE. 
 
 Wisconsin,^ Illinois,^ Missouri,' Indiana,* Connecticut,^ 
 Nebraska,* and in the United States Circuit Court. ^ In 
 each of these jurisdictions, the contrary doctrine of Rob- 
 inson V. Elliott is enforced in all cases where the reserva- 
 tion to the grantor of a discretionary power of sale calls 
 for the application of that doctrine. 
 
 § 140. Further examples of this distinction. — Nor is 
 
 there any real difference between those cases, so far as 
 concerns the salient facts which should control their deci- 
 sion, and certain other cases in Maine,* Massachusetts,® and 
 lowa,^" in which the conveyance was sustained; for in these 
 it appeared that the possession and management of the 
 business were, in one way or another, for the actual benefit 
 of the secured creditor. The crucial test of a faithful 
 application of the proceeds to the secured debt would have 
 sustained these transactions, even in case the courts of 
 Maine, Massachusetts and Iowa had favored the doctrine 
 of Eobinson v. Elliott. Substantially identical in prin- 
 ciple are cases in the English courts, involving general 
 assignments for the benefit of creditors, in which it was 
 provided that the assignees might employ the debtor as 
 their agent in disposing of the goods, and which were on 
 this ground sustained as valid." 
 
 § 141. Assignee must act in good faith. — As a con- 
 verse to this proposition, it has been held that, under 
 
 • Fisk V. Harshaw, 45 Wis. 665 ; Cotton v. Marsh, 3 "Wis. 2^1. 
 = Goodheart v. Johnson, 88 111. 58. 
 
 » Hewson v. Tootle, 72 Mo. 632 ; Metzner v. Graham, 57 Mo. 404. 
 
 * Lockwood 0. Harding, 79 Ind. 129. 
 
 " Kendall v. Carpet Co., 13 Conn. 383. 
 ' Book Co. u. Sutherland, 10 Neb. 334. 
 
 ' Hawkins v. Bank, 1 Dill. 462 ; Overman v. Quick, 8 Biss. 184. 
 8 Abbott V. Goodwin, 20 Me. 408 ; Melody v. Chandler, 12 Me. 282. 
 ' Jones V. Huggeford, 3 Mete. 515. 
 '» Adler v. Claflin, 17 Iowa, 89. 
 
 " Janes v. Whitbread, 5 Eng. L. & E. 481 ; Coate v. Williams, 9 Id. 481. 
 222 
 
SUPPOSED QUALIFICATIONS OF THE DOCTRINE. § 142 
 
 general assignments, the action of the assignees must be, 
 in fact, as well as in name, for the benefit of the creditors ; 
 and if in any respect it is not such, but is really for the 
 benefit of the grantor, — as, by continuing his business 
 generally and unduly in the old way, — the assignment 
 will be held void, even although the assignees have per- 
 sonally undertaken to execute it.^ It will be "regarded, 
 in conscience and law, as a fraud."'' On a like principle 
 it is held in Massachusetts that if a pledgee permit the 
 property to remain in possession of the pledger, he loses 
 all benefit of the pledge.' 
 
 § 142. Sale by mortgager passes title. — Testing all 
 such cases by this fundamental question of the discretionary 
 control of the mortgager over the mortgaged property, the 
 courts frequently find other consequences logically resulting 
 from the application of this doctrine. One of these is, that 
 under all sales made by the mortgager, the title to the prop- 
 erty will be passed, as was suggested by the Virginia Court 
 of Appeals, in the earliest American case,* a-nd the mort- 
 gagee will be estopped to deny the title of the purchaser. 
 This necessary result from the application of the rule has 
 been frequently adjudicated.^ Even in Massachusetts and 
 Maine, this is recognized as a necessary consequence of 
 allowing the mortgager to make sales of the goods.^ 
 
 > Am. Ex. Bank v, Inloes, 7 Md. 380 ; Owen ». Body, 5 Ad. & B. 28 ; Whal- 
 lon V. Scott, 10 Watts, 237 ; Doyle v. Smith, 1 Ooldw. 15 ; "Woodward v. Good- 
 man, 3 Cent. L. J. 43 ; Eichardson v. Marqueze, 59 Miss. 80, 42 Am. Bep. 
 353; Mattison v. Judd, 59 Id. 99. 
 
 2 Bank v. Inloes, 7 Md. at p. 391. 
 
 = Thompson v. DoUiver, 132 Mass. 103. 
 
 * Lang V. Lee, 3 Band. 410. 
 
 6 Ogden V. Stewart, 29 111. 122 ; Miller ads. Panooast, 29 N. J. L. 250 ; Bank 
 •0. Hampson, L. B. 5 Q. B. Div. 177; Walker v. Clay, 42 L. T. (n. s.) 369. 
 
 6 Shearer v. Babson, 1 Allen, 486 ; Stafford v. Whitcomb, 8 Id. 518 ; Hub- 
 bard V. Lyman, 8 Id. 520; Bank v. West, 46 Me. 15. 
 
 223 
 
§ 144 FEAUDULENT MORTGAGES OP MERCHANDISE. 
 
 § 143. Grantee in fraudulent conveyance acquires no 
 rights thereunder. — Another logical consequence from 
 this doctrine is, that inasmuch as the mortgage transaction 
 is tainted with fraud by the agreement allowing discretion- 
 ary sales by the mortgager, the mortgagee can, under such 
 a conveyance, acquire no rights in or to the goods pretended 
 to be conveyed ; so that his attempt to take possession of 
 the goods under the mortgage so tainted, will in no respect 
 enlarge his rights or his remedies in the premises. The 
 goods will remain subject to levy at the suit of the other 
 creditors of the mortgager, though in the possession of the 
 mortgagee, if it be a possession so obtained. Decisions to 
 this effect are numerous.^ The same rule was applied in 
 one State to a case not involving a stock of goods in trade, 
 but in which a conveyance had been declared void by rea- 
 son of fraudulent intent, clearly proved.^ 
 
 § 144. New transaction between parties may be valid. — 
 
 As a converse to this proposition, it is to be observed that 
 if, instead of acting upon the invalid mortgage, and assert- 
 ing rights under it, the mortgagee practically abandons the 
 mortgage, and enters into a new contract with the mort- 
 gager, by which he purchases the stock of goods, even 
 though he do not pay for them otherwise than by crediting 
 their value on his debt, an entirely new and distinct state of 
 facts is again presented, calling for the interposition of 
 different rules of law. Distinguishing this class of cases 
 from those in which the principal doctrine is applied, may 
 be considered by adverse critics another qualification of the 
 
 1 Robinson u. Elliott, 22 Wall. 513; Blakeslee v. Rossman, 43 Wis. 116; 
 Delaware «. Ensign, 21 Barb. 85 ; Dutcher v. Swartwood, 15 Hun, 31 ; Catlin o. 
 Currier, 1 Sawyer, 7 ; Stein v. Munch, 24 Minn. 890 ; Ee Manly, 2 Bond, 261 ; 
 Be Forbes, 5 Biss. 510; Re Morrill, 2 Saw. 366, 8 N. B. E. 117; Smith v. Ely» 
 10 Id. 563. 
 
 ' Janvrin v. Pogg, 49 N. H. 340. 
 224 
 
SUPPOSED QUALIFICATIONS OF THE DOCTRINE. § 144 
 
 doctrine, like the supposed ones referred to. It is, however, 
 but the familiar case of a new state of facts, to which juris- 
 prudence applies a different substantive rule. A mortgagee, 
 who may have made a fraudulent agreement with his mort- 
 gager, is not, under existing rules of Anglo-Saxon law, to 
 be punished for his offence, otherwise than by an adjudica- 
 tion that the fraudulent transaction is a nullity. He re- 
 mains a creditor to the same extent as formerly ; and he 
 may, by a new transaction with his debtor, receive a pre- 
 ference, to the same extent and with the same limitations as 
 any other creditor. 
 
 In Eobinson v. EUiott,^ in connection with the decision 
 that the mortgagee could not assert or enforce any rights 
 under the mortgage, it was intimated that a new transaction 
 between the parties, by which the goods should be trans- 
 ferred and delivered to the mortgagee, might give the latter 
 a new and legal right to them. This point has been directly 
 decided by the courts of last resort in four cases, arising re- 
 spectively in Minnesota,^ New York,' Mississippi,* and New 
 Hampshire.* It is a logical conclusion from the circum- 
 stances of the case, and the legal relations and rights of the 
 parties outside of the fraudulent mortgage. In the New 
 York case referred to, the court, finding that " before any 
 creditor questioned the validity of the mortgage, the goods 
 in question were delivered into the actual possession of the 
 plaintiffs, upon terms securing to them the custody and the 
 right of disposition, freed from any feature of the kind 
 alluded to," held that, irrespective of the question of their 
 rights under the mortgage, " this delivery of the goods en- 
 titled the plaintiffs to receive and dispose thereof, and appro- 
 priate the proceeds in satisfaction of their own debt." The 
 
 1 22 Wall. 513. » Bank v. Anderson, 24 Minn. 435. 
 
 8 Brown v. Piatt, SBosw. 324. 
 
 • Baldwin v. Plash, 58 Miss. 593 ; 59 Id. 61. 
 
 s Petteei). Dustin, 58 N. H. 309. 
 
 15 225 
 
§ 144 FEAUDULENT MORTGAGES OP MERCHANDISE. 
 
 third of these cases has been twice before the Supreme Court 
 of Mississippi, by whom the question was carefully con- 
 sidered.^ A deed in trust having been given, conveying a 
 stock of goods, and containing provisions which would have 
 rendered the deed fraudulent under the settled jurisprudence 
 of that State,^ the grantor, by a new act of assignment, 
 transferred the remaining goods to the trustee, for the 
 benefit of the same creditor ; and this transaction was held 
 not fraudulent per se as to other creditors who proceeded 
 subsequently against the goods. Though the inducing 
 cause to the surrender of the goods was probably the invalid 
 trust deed, yet as the transaction was not a seizure by the 
 creditor, under the provisions of the deed, but was merely 
 " the very frequent occurrence of a transfer of goods by a 
 debtor to pay his creditor whom he prefers," ' it was held 
 to be a case determinable with reference to the actual in- 
 tent of the parties as to the preference. An instruction 
 having been given to the jury which ignored this salient 
 feature of the case, the verdict against the preferred credi- 
 tor was set aside, and a new trial was ordered, to deter- 
 mine the question of the bona fides of the preference, by 
 inquiring into the actual motives of the parties. On a 
 second appeal, the court re-affirmed and emphasized the view 
 first taken of the case, saying of the surrender of the goods 
 by the debtor to the trustee : "If that possession was sur- 
 rendered on the one side, and received on the other, with the 
 honest intention of paying a just debt, it was not made 
 fraudulent by the unrecorded trust deed of the year before ; 
 it could be made fraudulent only by reason of some im- 
 proper circumstance connected with the transfer itself, or 
 because it was, in the opinion of the jury, but the consum- 
 mation of a scheme devised and carried out for the purpose 
 
 ' Baldwin v. Flash, 58 Miss. 593 ; 59 Id. 61. 
 ' Harmaa v. Hoskins, 56 Miss. 142 ; Jojeph u. Levi, 58 Miss. 848. 
 » 68 Miss. 599. 
 226 
 
SUPPOSED QUALIFICATIONS OF THE DOCTRINE. § 144 
 
 of entrapping third persons." ^ Therefore, "it was for 
 the jury to say, under proper instructions from the court, 
 whether in so doing the parties were then paying a just 
 debt, or were consummating a scheme of fraud, concocted 
 in the beginning or then designed." ^ The court very per- 
 tinently referred to the cases of Rowley v. Eice,^ Cook v. 
 Corthell* and Morrow w. Reed, ° as authorities for the con- 
 clusion reached. In the first two cases, the mortgage was 
 thought ineffective to cover after-acquired goods, and in 
 the last named case, there were formal defects in the mort- 
 gage ; but in each case the delivery of the goods by the 
 mortgager to the mortgagee was held ample to vest in him 
 the title, irrespective of difficulties as to the mortgage; so 
 ■while the facts were different from those in the Mississippi 
 case, the principle of law involved was substantially the 
 same. 
 
 In the New Hampshire case,^ where, after such a mortgage, 
 the mortgagers, by a transaction in the nature of a pledge, 
 turned over the remaining goods, with others, to the mort- 
 gagees, and the goods were then sold for the benefit of the 
 latter, the transaction was sustained as against a complain- 
 ing creditor ; but it was held that if the mortgagees had 
 merely taken possession under the mortgage itself, the 
 doctrine of Janvrin v. Fogg^ would have applied. 
 
 These cases present a novel phase of facts, in connection 
 with fraudulent mortgages of merchandise ; but the con- 
 clusions reached in them are thus seen to harmonize fully 
 with those presented in Eobinson v. Elliott and kindred 
 cases. 
 
 The Missouri case of Greeley v. Eeading^ indicates an 
 inclination to favor the same doctrine. The mortgage in 
 this case reserved on its face a power of sale to the moi:t- 
 
 1.59 Miss. 67. 5 30 "Wis. 81. 
 
 ' Id. 66. « 58 N. H. 309. 
 
 » 11 Met. 833. I Ante, sect. 143 
 
 « 11 K. I. 482 ; 23 Am. Bep. 518. ' 74 Mo. 309. 
 
 227 
 
§ 145 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 gager, and the case was recognized as one which would 
 ordinarily fall within the rule announced in Weber v. Arm- 
 strong.^ But the new transaction between the parties, by 
 which the mortgagee had obtained possession of the goods, 
 was sustained. Though without a full consideration of the 
 question, this was in approval of the conclusion reached in 
 Nash V. Norment.^ In this case, the mortgagee at request 
 of the mortgager took the goods and sold them. The 
 court thought the mortgager had " a perfect right to pay 
 a creditor, and to protect Simpson, who had lent her money on 
 the faith of this mortgage, by turning over to him actual 
 possession of the property;" and that, though the law 
 declared the mortgage " invalid as a security," yet " as a 
 transfer of possession took place before any creditor ac- 
 quired rights to this property, the invalidity of the mort- 
 gage before possession by the mortgagee is unimportant." 
 
 § 145. First Supposed Qualification. — The supposed 
 qualification first above named,^ which is imputed to several 
 of the States in which the doctrine of Robinson v. Elliott 
 has been adopted, presents a partially but not entirely 
 correct statement of the rule of law on the subject in those 
 States. But when correctly stated, it will be seen that this 
 leaves the doctrine stilL wholly unqualified as a rule of sub- 
 stantive law. The error lies in introducing the words, 
 "what are the indications of fraud arising from it" {i.e., 
 the agreement), in stating the question for the Jury. 
 Omitting these words, the proposition would be : "If the 
 agreement be not contained in the mortgage itself, the 
 question whether there is any such agreement is one for the 
 jury;" and this correctly represents the law in all the four- 
 teen States where the doctrine obtains,* as well as in the 
 
 1 70 Mo. 217. 2 6 ]u:o. ^pp. 545, s ^^^^^ ^^^^^ jgg_ 
 
 * Virginia, New York, New Hampshire, Ohio, Illinois, Wisconsin, Minne- 
 sota, Missouri, Tennessee, Mississippi, Indiana, West Virginia, Oregon and 
 Colorado. 
 
 228 
 
SUPPOSED QUALIFICATIONS OF THE DOCTKINE. § 146 
 
 courts of the United States. But in none of these courts is 
 the question, "What are the indications of fraud arising 
 from it? " left to the jury, whether the agreement appears 
 from the instrument itself, or from evidence aliunde. It 
 is fundamental to the doctrine of Eobinson v. Elliott, that 
 ■when the fact of the agreement is established, the strong 
 legal sense of the court makes clear the indications of fraud 
 "which arise from it, and the judgment of the law is pro- 
 nounced accordingly. In those other States, whose courts 
 maintain the contrary doctrine,^ and disaffirm the duty of 
 the court to pronounce upon the fraud, the question of 
 " the indications of fraud arising from " the agreement is 
 one for the jury. This is the principal difference between 
 these respective classes of courts in reference to this 
 subject. 
 
 § 146. The qnallficatloi^ examined. — But the rule, that 
 the fact of the existence of the agreement must, in all dis- 
 puted cases, be determined by the jury, cannot correctly be 
 considered a qualification of the doctrine of substantive 
 law applicable to the case, for it is simply a rule of proced- 
 ure. No number of references to this as a rule of substan- 
 tive law, can well make it other than a rule of procedure. 
 In all disputed cases, tried before juries, the facts are to be 
 found by the jury. The facts must be ascertained before 
 the court can be prepared to apply the proper rule of sub- 
 stantive law ; and the manner of ascertaining the facts is a 
 matter pertaining to procedure only. The process adopted 
 in the class of cases under consideration is the old and 
 familiar one which is of general application in all cases and 
 by all courts. The facts of the case are first to be ascer- 
 tained by the trier of the facts. If the fraudulent agree- 
 ment appears on the face of a written instrument, and the 
 
 ' Michigan, Iowa, Maine, Massachusetts, Kentucky, Kansas, Alabama, and 
 Texas. 
 
 229 
 
§ 146 FRAUDULENT MORTGAGES OP MERCHANDISE. 
 
 execution of that instrument by the party charged is a mat- 
 ter in issue, the fact of such execution is to be determined 
 by the trier of the facts ; by the jury, if there be one 
 sitting in the case as such trier, otherwise by the court. 
 But nothing is more common than to dispense with the for- 
 mality of making proof of facts not really in dispute ; a 
 familiar instance of which often occurs in the case of a 
 written instrument. If, then, the execution of the sup- 
 posed instrument be an admitted fact (as it frequently is)» 
 there is no question for the jury to pass upon, and all the 
 facts appear which are necessary for the application of the 
 rule of law. In these cases, that is, cases in which the 
 fraudulent agreement appears on the face of the instru- 
 ment, it is often adjudged that the instrument is fraudulent 
 per se, or " upon its face;" language not descriptive of 
 any distinct or novel rule of law, but quite pertinent when 
 the instrument itself furnishes, all the necessary evidence 
 of the fraudulent agreement. But if such agreement does 
 not appear upon the face of the instrument, but is disclosed 
 by evidence aliunde, the fact of its existence must be found 
 by the jury, whenever it is the jury that is the trier of the 
 facts. If it be so found by the jury, then again, all the 
 facts appear which are necessary for the application of the 
 rule of law ; and the duty again devolves upon the court of 
 declaring the fraud. In these cases, " while the court can 
 not pronounce the instrument fraudulent per se, it can and 
 does pronounce the whole transaction fraudulent jjer se." 
 In both classes of cases, the process is the same ; first, the 
 facts are established, under the exigencies of the particular 
 case, according to the usual rules of procedure ; and then, 
 by the application to those facts of the proper rule of law, 
 an adjudication is reached. In the one case, the instrument 
 alone furnishes all the facts necessary for the judgment of 
 the court. In the other, it requires all the evidence, includ- 
 ing the instrument, to furnish the necessary facts. To 
 230 
 
6XJPP0SED QUALIFICATIONS OF THE DOCTRINE. § 147 
 
 suppose, as the courts in Gay v. Bidwell ^ and Brett v. 
 Carter ^ supposed, that this Judicial process is in part a re- 
 sort to violent presumptions, is to misunderstand the pro- 
 cess. Some single fact or facts may, of course, as in any 
 controverted case, be ascertained by presumptive evidence. 
 For instance, if the mortgager, being examined as a witness, 
 does not deny that he executed the instrument, while the 
 main contention is as to other matters, it may fairly be pre- 
 sumed that he did execute it ; or if the mortgagee does not 
 prove satisfactorily that the sales made by the mortgager 
 were without his knowledge and against his will, it may 
 perhaps be presumed, as it frequently has been, that he 
 knew and assented to such sales. In such cases, the appel- 
 late court might be called on to determine whether the ver- 
 dict was wholly unsupported by the evidence; but this 
 would be a question of procedure only, the decision of 
 which could, of necessity, have no effect upon the rule of 
 substantive law, by qualification or otherwise ; nor in case 
 the verdict be sustained, would the criticism be either just 
 or pertinent, that " facts not appearing upon the face of 
 the instrument are presumed, in order to help out this pre- 
 sumption of fraud." ' As before suggested, the judicial 
 process in such cases is not a process of either presumption 
 or construction; it is rather that of adjudication, by the 
 application of a rule of substantive law to proven facts. 
 
 § 147. The mode of proof immaterial. — It will be im- 
 material, then, to the question of law, whether the fraudu- 
 lent agreement appear upon the face of the instrument, or 
 be proven by other sufficient evidence. Such has in 
 general been the view entertained by those courts in 
 which the subject has been discussed. It is true that 
 the leading cases in Virginia, West Virginia, Colorado 
 
 1 7 Mich. 519. ' 2 Low. 458. 
 
 ' Per Lowell, J., Brett v. Carter, 2 Low. 458. 
 
 231 
 
§ 147 FRAUDULENT MORTGAGES OF MEHCHANDISE. 
 
 and Mississippi, in which the doctrine has been applied, 
 exhibited the fact of such an agreement on the face of 
 the instrument ; ^ while in the leading cases in Ohio and 
 Oregon, the agreement was proved aliunde.^ But in New 
 York,^ New Hampshire,* Ulinois," Tennessee,® Wisconsin,^ 
 Minnesota,* and Indiana,' and in the courts of the United 
 States,^" cases of both classes have arisen, and the adjudication 
 of fraud, as a rule of substantive law, has been made indiffer- 
 ently in both. Frequently, the agreement has been found 
 on the face of the deed, by implication."^ It is diiKcult to 
 see anj' reason for a distinction in this respect, or for the 
 supposition that such distinction could be admitted other- 
 wise than as a question of procedure. Indeed, the matter 
 has been frequently referred to by the courts as one in no 
 way affecting the question of substantive law.^ 
 
 The ruling in Southard v. Benner^^ may be here repeated 
 
 ' Lang V. Lee, 3 Kand. 410 ; Sheppards v. Turpin, 3 Gratt. 867 ; Kuhn v. 
 Mack, 4 W. Va. 186; Bank v. Goodrich, 3 Colo. 139; Harman v. Hoskins, 56 
 Miss. 142. 
 
 » OoUina v. Myers, 16 Ohio, 547 ; Orton v. Orton, 7 Oreg. 478. 
 
 = Edgell V. Hart, 9 N. Y. 213 ; Southard v. Benner, 72 Id. 424. 
 
 ' Eanlett v. Blodgett, 17 N. H. 298, 43 Am. Dec. 603 ; Putnam v. Osgood, 
 51 N. H. 192, 52 Id. 148. 
 
 6 Davis V. Eansom, 18 111. 396 ; Barnet ®. Fergus, 51 Id. 352. 
 
 6 Bank v. Ebbert, 9 Heiak. 153 ; Nailer v. Young, 7 Lea, 735. 
 
 ' Place V. Langworthy, 13 "Wis. 629 ; Steinart v. Deuster, 23 Id. 136. 
 
 ' Stein V. Munch, 24 Minn. 390; Horton v. Williams, 21 Id. 187. 
 
 9 Ins. Oo.D. Wilcoxson, 21Ind. 355; Mobley v. Letts, 61 Id. 11. 
 w Smith V. McLean, 10 N. B. E. 260 (Miss) ; Ee Forbes, 5 Biss. 510 (111.); 
 Ee Kahley, 2 7d. 883 (Wis.); Ee Morrill, 2 Sawyer, 856 (Nev.); Catlin »1 
 Currier, 1 Sawyer, 7 (Oreg.). 
 
 " Perry v. Bank, 27 Gratt. 755 ; Harman ». Abbey, 7 Ohio St. 218 ; Stan- 
 ley V. Buuce, 27 Mo. 269; Lodge v. Samuels, 50 Id. 204; Garden v. Bod- 
 wing, 9 W. Va. 121 ; Gardner ®. Johnston, 9 Id. 403 ; Davenport v. Foulko, 
 68Ind. 382, 84 Am. Eep. 265 ; Ee Manly, 2 Bond, 261 (Ohio); Pox v. Da- 
 vidson, 1 Mackey, 102, 9 Wash. L. Kep. 268 (D. C). 
 
 " Edgell ». Hart, 9 N. Y. 213; Southard v. Benner, 72 /(i.424; Gardner e. 
 Johnston, 9 W. Va., 408 ; Perry v. Bank, 27 Gratt. 756. 
 " 72 N. Y. 424. 
 
 232 
 
SUPPOSED QUALIFICATIONS OF THE DOCTRINE. § 148 
 
 as a most succinct statement of the status of the doctrine, 
 when considered in connection with questions of procedure. 
 ♦'Whether the agreement is in or out of the mortgage, 
 whether verbal or in writing, can make no difference in 
 principle. Its effect as characterizing the transaction would 
 be the same. The difference in the modes of proving the 
 agreement cannot take the sting out of the fact and render 
 it harmless. If it is satisfactorily established, the result 
 upon the security must be the same. It is the fact that 
 such an agreement has been made and acted upon, that in 
 law condemns the security, and not the fact that it is 
 proved by the instrument of suretyship, instead of by parol 
 or in some other way." 
 
 § 148. Licgal intent, and intent to defraud, distin- 
 guished. — In this connection it may be proper to advert to 
 the fact that the language sometimes employed by the 
 courts in announcing this rule of law indicates a reference 
 to the question of intent as one fundamental to the doctrine. 
 Fraudulent intent being always, in the very nature of the 
 case, a question of fact, even though not made such by any 
 statute, it is proper to submit this question to the jury, in 
 every case where it is involved and they are the triers of 
 the facts. If then, the critic may ask, the adjudication by 
 the court is based in part upon the intent of the parties to 
 the transaction, how can such adjudication be made as 
 based on a rule of substantive law, without invading the 
 province of the jury, and violating to some extent the right 
 of trial by jury? This criticism, which has been sometimes 
 made, is, it is submitted, rather verbal than substantial. 
 It is true that, in leading cases on this subject in New York,' 
 Tennessee,^ Connecticut ' and Mississippi,* the courts have 
 employed the element of imputed intent in adjudicating the 
 
 ' Wood V. Lowry, 17 Wend. 492. ' Bishop v. Warner, 19 Conn. 460. 
 
 ' Bank v. Ebbert, 9 Heisk. 163. * Harman v. Hoakins, 66 Miss. 142. 
 
 233 
 
§ 148 FRAUDULENT MOETGAGBS OF MEKCHANDISE. 
 
 fraud. But it seems plain from a careful consideration of 
 the expressions of these courts, in connection with the facts, 
 that the intent imputed to the parties in these cases is by 
 no means identical with the " dolus " or the intent to de- 
 ceive or defraud, which is the foundation of fraudulent 
 intent when submitted as a question of fact to a jury. 
 It is a " legal intent," in the sense of a conclusion of law. 
 "A party will be held as intending the natural and inevita- 
 ble effects of his acts ; if his deed necessarily operates to 
 interpose unreasonable hindrance and delay to creditors, or 
 to defeat them altogether, the intent will be a conclusion of 
 law.'^^ " It must be held as wanting in legal good faith, 
 on the plain principle that every reasonable man is pre- 
 sumed to intend the probable consequences of his own 
 acts." ^ These are but variations in the mode of stating a 
 rule of substantive law. The intent here referred to, if con- 
 sidered merely as a question of fact, is simply the intent 
 to execute the instrument, or to engage in the transaction, 
 which is found to possess such pernicious features. If this 
 intent be found as a fact of the case, the imputations above 
 stated follow as conclusions of law, as was expressly de- 
 clared by the Supreme Court of New Hampshire, in these 
 words: " If a trust, inconsistent with the legitimate pur- 
 pose of a mortgage, is reserved for the benefit of the 
 mortgager, and that is proved, then a fraudulent intent is, 
 with us, and in many other jurisdictions, a conclusion of 
 law."^ But that such expressions of the courts have no 
 reference to that " fraudulent intent " which is always " a 
 question of fact for the jury," and which rests on the actual 
 motives of the party charged, is plain from the frequent 
 declarations of the same courts, that " there was no specific 
 intent to defraud;"* that "nothing more was intended 
 
 1 Harman v. Hoskins, 56 Miss. 142. » Putnam v. Osgood, 51 N. H. at p. 202. 
 » Bank v. Ebbert, 9 Heisk. 163. * Bank v. Ebbert, 9 Heisk. 163 
 234 
 
SUPPOSED QUALIFICATIONS OF THE DOCTEINE. § 149 
 
 than an honest design to secure a just debt; " ^ that " the 
 act, in a moral view, was entirely fair; "" and that the ar- 
 rangement was not made ' ' with a fraudulent scheme and 
 purpose to defeat existing or future creditors."^ To the 
 same effect that the actual intent or motive of the parties is 
 immaterial to the inquiry, and that there is no question of 
 intent in such a case to be submitted to a jury, are fre- 
 quent cases in Pennsylvania,* New York® and Missouri,* 
 and others in Wisconsin,^ New Hampshire"* and Indiana.' 
 
 § 149. Legal intent at common law. — The "legal" 
 intent thus observed as frequently an element in modern 
 fraud, is the same intent which was seen at an early day 
 to be involved in the ancient "covin," the prototype of 
 our modern fraud. Each of these terms, "covin" and 
 " fraud," is primarily applicable to and descriptive of, not 
 the intent or motive of the parties to the transaction, but 
 the inherent characteristics and quality of the transaction 
 itself. If essentially unreal or deceptive, or having in itself 
 fraudulent features, it may be characterized as a fraud ; and 
 there may or may not have been an intent on the part of the 
 parties to give it that deceptive character, or to accomplish 
 deception by means of it. Covin, according to the definition 
 previously referred to,^" given in 1550, was " a secret agree- 
 ment determined in the hearts of two or more men, to the 
 
 1 Gait V. Dibrell, 10 Terg. at p. 155. 
 ' Harman v. Hogkins, 66 Miss.142. 
 ' Hilliard v. Cagle, 46 Miss. 309 ( at p. 337). 
 
 * "Welsh V. Bekey, 1 Penn. 57 ; Clow v. Woods, 5 S. & K. 275, 9 Am. Dec. 
 346 ; McKibbin v. Martin, 64 Pa. St. 352, 3 Am. Bep. 588. 
 
 5 Kussell V. Winne, 37 N. T. 591 ; Wood v. Lowry, 17 Wend. 492; Mars- 
 ton V. Vultee, 8 Bosw. 129. 
 
 6 State V. Tasker, 31 Mo. 445 ; Brooks v. Wimer, 20 Mo. 503. 
 ' Blakeslee v. Eossman, 43 Wis. 116. 
 
 8 Putnam v. Osgood, 52 N. H. 148. 
 » Mobley v. Letts, 61 Ind. 11. 
 " Ante, sect. 121. 
 
 235 
 
§ 149 FEAUDXJLENT MORTGAGES OP MERCHANDISE. 
 
 prejudice of another." ^ But this, as before suggested, did 
 not necessarily imply an agreement to commit intentional 
 deception, or an agreement to attempt prejudice to another. 
 The agreement to do the act in question was the fact to be 
 determined, and the circumstance that it would operate to 
 the prejudice of another was what made it covinous. This 
 appears from other views expressed by the same judge in 
 the same case; for in answer to the contention that the 
 complaining party must prove the intent to deceive and 
 defraud, he said: "Inasmuch as covin is a secret thing, 
 whereof by intendment of law a stranger cannot have 
 knowledge, for this reason the law will not force a 
 stranger to show the cause thereof." It was held, also, 
 that there might be both " covin apparent," and "covin 
 not apparent; " and that if the covin relied on were 
 " covin apparent," it might well, as a matter of procedure, 
 be proven under a general averment of covin in the plead- 
 ings. So, in a note by Lord Hale to Coke upon Littleton, 
 it is said: "The covin is apparent, though it was not 
 found." * That is to say, the facts of the case being 
 apparent, or being found, the covin was apparent, though 
 no intent to defraud or deceive was proved. The character 
 of the transaction being apparent, no other intent need be 
 proven than the intent to engage in the transaction; the 
 law would then impute to this intent all its necessary con- 
 sequences, and the result would be " covin apparent." 
 
 It is in precise analogy to this line of thought that the 
 American courts, in the cases above cited, have spoken 
 of the intent to engage in the transaction complained of as 
 a "legal intent," in which all the possible consequences 
 of that act were necessarily involved. And so, in a recent 
 treatise on Chattel Mortgages, the doctrine is taught in 
 general terms, that the intent to do an act which will have 
 
 ' Wimbish v. Tailbois, Plowd. 38 (at p. 64). a Co. Lit. 59a, note 4 
 
 236 
 
SUPPOSED QUALIFICATIONS OP THE DOCTEINE. § 151 
 
 a fraudulent effect constitutes a legal fraud, *' although 
 neither of the parties to the mortgage had the intention 
 of perpetrating a legal fraud." ^ 
 
 § 150. The distinction oTerlooked. — It was probably 
 in intended deference to such judicial expressions con- 
 cerning the legal or imputed intent in these cases, that 
 the Supreme Court of North Carolina was led to leave the 
 determination of the question of fraud in this class of con- 
 veyances so much to the discretion of the jury as it has 
 done in recent cases.* Perhaps, also, similar* considera- 
 tions influenced the courts of Maine, Texas and Alabama 
 in abandoning, to so great an extent as they have done, 
 judicial opinion on the subject.^ Keflection must, how- 
 ever, assure the student of the principles underlying these 
 cases, that the question of fraudulent intent, as one of 
 fact, is not logically involved in them, the other patent 
 facts appearing which have been before mentioned; that 
 such judicial references to intent by no means enlarge the 
 province of the jury, or limit the duty or responsibility 
 of the court; and that when the facts are made clearly 
 apparent, in whatever manner, jurisprudence has a substan- 
 tive rule therefor, the application of which is demanded by 
 both principle and policy. 
 
 § 151. General doctrine as to legal intent. — In this 
 respect there is neither novelty nor singularity, in either 
 the doctrine itself or the mode of its application. In many 
 other cases of alleged fraud in business or other transac- 
 tions, similar language is used by the courts, a similar 
 process is employed, and a similar fixed and substantive 
 
 1 Jones on Chat. Mort., sect. 338. 
 
 ' Cheatham v. Hawkins, 76 N. C. 335, 80 Id. 161; Holmes v. Marshall, 78 
 Id. 262 ; Boone v. Hardie, 83 Id. 470. 
 
 ' Googins V. Gilmore, 47 Me. 9 ; Johnson v. Thweatt, 18 Ala. 741 ; Rey- 
 nolds V. Welch, 47 Id. 200; Scott v. Alford, 63 Tex. 82. 
 
 237 
 
§ 151 FRAUDULENT MORTGAGES OF MERCHANDISE 
 
 rule of jurisprudence is applied. A few instances may 
 suffice to illustrate the generality of the rule and the prac- 
 tice; and Michigan herself, whose courts demur to the 
 doctrine of Eobinson v. Elliott, furnishes one of the most 
 clear and succinct statements of the rule. Said Chancellor 
 Farnsworth: "By the term fraud, it should be remem- 
 bered that the legal intent and effect of the acts complained 
 of is meant. The law has a standard for measuring the 
 intent of parties, and declares an illegal act, prejudicial to 
 the rights of others, a fraud upon such rights, although 
 the parties deny all intention of committing a fraud." ^ 
 And this view was re-affirmed, on appeal, by the Supreme 
 Court, which found the transaction fraudulent, without 
 " imputing to the highly respectable parties in this case 
 a ptemeditated or wicked intention to destroy or injure the 
 interest of the complainant." ^ In Maine, also, this doctrine 
 is distinctly announced in Wheelden v. WilSon,^ a case of a 
 mortgage on goods in trade, the validity of which was 
 questioned by an attaching creditor, but in which the ques- 
 tion of a reserved power of sale is not considered. Said 
 the court: "It may not have been the intention of either 
 the mortgagee or mortgager to perpetrate a moral fraud ; 
 they may have intended to act for the benefit of all the 
 creditors of the mortgager ; but that they both intended to 
 place the property mortgaged beyond the reach of legal 
 process, and thereby to delay, if not to defeat creditors, 
 we think the case clearly shows. This constitutes a legal 
 fraud." Mutatis mutandis, this "precise criticism might 
 have been applied to the same case by other courts, who 
 would lay stress on the fact that the parties " both intended 
 to reserve to the mortgager the potential control of the 
 goods, and thereby to delay creditors. 
 
 » Kirby v. Ingersoll, 1 Harr. Ch. 172 (p. 191). 
 » 1 Doug. (Mich.) 477 (1844). s 44 ^e. 11. 
 
 238 
 
SUPPOSED QUALIFICATIONS OP THK DOCTRINE. § 151 
 
 In New York, the rule was announced as follows : " The 
 Statute of Frauds (i.e., 13th Eliz.) refers to a legal, and 
 not a moral intent; that is, not a moral intent as contra- 
 distinguished from a legal intent. It supposes that every 
 one is capable of perceiving what is wrong, and therefore, 
 if he do what is forbidden, intending to do it, he will not 
 be allowed to say that he did not intend to do a forbidden 
 act. A man's moral perceptions may be so perverted as to 
 imagine an act to be fair and honest, which the law justly 
 pronounces fraudulent and corrupt ; but he is not therefore 
 to escape from the consequences of it. " ^ This doctrine, it 
 will be observed, was announced in view of the New York 
 statute, which, like those of Michigan, Indiana, and other 
 States, made the question of fraudulent intent, in all cases, 
 a question of fact and not of law. The distinction was 
 again taken in Goodrich v. DoWns,'' that the question of 
 intent to be left to the jury under such a statute, was a 
 wholly different question from that of fraud which the court 
 would find inherent in any trust conveyance reserving a 
 benefit to the grantor. And to the same effect are the earlier 
 case of Cunningham v. Freeborn' and the later one of 
 Dunham v. Waterman.* In Pennsylvania, where the estab- 
 lished rule is that retained possession alone suffices to make 
 a conveyance fraudulent, it was suggested as early as 1809, 
 that a legal intent .was imputed in such cases, though the 
 actual intent might be entirely wanting.® The same view 
 is apparent throughout the long line of Pennsylvania cases 
 on the subject, having been in 1872 declared to be " ele- 
 mentary law in the Commonwealth," and " a rule of uni- 
 versal application . " * In Illinois, it was said of a conveyance 
 of real estate, impeached for fraud : " It is not important 
 
 > Groyer v. Wakeman, 11 Wend. 187 (at p. 225.) 
 
 » 6 Hill, 438. '11 Wend. 240. • 17 N. Y. 9. 
 
 » Wilts. Franklin, 1 Binn. 502, 2 Am. Dec. 474. 
 
 • Gannan v. Cooper, 72 Pa. St. 32. 
 
 239 
 
( 151 FRAUDULENT MORTGAGES OF JIEECHANDISE. 
 
 7hat further may have been intended by Thomson and 
 'ower, if they intended Thomson should retain a secret use 
 n the property. They may not have intended that this 
 hould hinder or delay creditors. Its legal effect, however, 
 3 to hinder and delay them, and, therefore, the convey- 
 nces are, under the statute, fraudulent and void as to 
 reditors." ^ In other cases, it was again said that " it is 
 ot important what motives may have animated the parties, 
 F they have so disposed of the property that the necessary 
 feet is to hinder and delay creditors." * So, in Tennessee, 
 1 a case of a voluntary conveyance of land, it was 
 lid: " It will be presumed that a party intends the proba- 
 le consequences of his own act." ' And in Missouri, in a 
 ise of an assignment of goods to preferred creditors, it 
 as said: "Every man must be presumed to intend the 
 ecessary consequences of his act." * 
 The same views are entertained in England, where a clas- 
 fication of fraud is adopted, which divides it into: I''irst 
 gal fraud, in which there may be a false representation, but 
 ithout any dishonest intention ; and second, moral fraud, 
 hich rests in knowledge of the falsity, and in dishonest in- 
 intion.* In Graham v. Chapman* it was said: "Every 
 3rson must be taken to intend that which is the necessary 
 )nsequenoe of his own act ; and if a trader make a deed 
 hich necessarily has the effect of defeating or delaying his 
 •editors, he must be taken to have made the deed with 
 lat intent." In Mining Co. v. Grant,^ Jessel, M. R., said: 
 A. man may commit a fraud without believing it to be a 
 aud, that is, without believing it to be a fraud for which 
 ! can be held responsible in law; but the question is, what 
 IS his belief to do with it? " 
 
 » Power V. Alston, 93 El. 567. 
 
 > Moore v. Wood, 100 111. 451 ; Phelps ■». Curts, 80 HI. 109. 
 » Spenoe v. Dunlap, 6 Lea, 457. * Bigelow ». Stringer, 40 Mo. 195. 
 
 * Indermaur, Principles of the Common Law, 217 
 •12C.B.85. '17Ch.D.122. 
 
 240 
 
SUPPOSED QUALIFICATIONS OF THE DOCTKINE. § 152 
 
 In Spackman v. Evans ,^ Lord Cran worth said: " I do 
 ot attribute moral fraud to the appellant, but the whole 
 [■ansaction was fictitious." And in Mining Co. v. Smith,^ 
 (ord Cairns said: ". I apprehend it to be the rule of law, 
 lat if persons take upon themselves to make assertions as 
 ) which they are ignorant whether they are true or untrue, 
 ley must, in a civil point of view, be held as responsible 
 3 if they asserted that which they knew to be untrue." 
 
 It might, in view of the foregoing considerations, be a 
 if er practice for courts to discriminate more carefully than 
 as been habitual, in their use of the term " intent," and 
 ) distinguish in each case between an intent to deceive or 
 efraud others, and an intent to do acts which may have a 
 ke prejudicial effect though not so intended. But 
 hether these distinctions are or are not taken in terms in 
 le decisions, it should not by the student be overlooked 
 lat they in facU exist. Observing them, he will more 
 3adily keep in mind the proper province of the court in all 
 ich cases, and be less likely to confound rules of substan- 
 ve law with canons of procedure, or to suppose that the 
 itter can ever, in a proper sense, qualify the former. 
 
 § 152. Third supposed qualification. — What has been 
 [ready said illustrates sufSciently the fallacy involved in 
 le third supposed qualification of the doctrine.^ Whether 
 
 the mere fact that the mortgager continues to sell 
 le mortgaged goods with the knowledge of the mort- 
 agee" furnishes sufficient proof of an agreement be- 
 veen the parties for such sales, is at best but a question 
 f evidence, and pertains to the adjective rather than 
 ) the substantive law of the subject. When so con- 
 dered, the " mere fact " of course does not of itself 
 
 render the mortgage fraudulent in law." From the gen- 
 
 » L. R. 3 Eng. & Jr. App, 171 (at p. 189). 
 
 ' L. B. 4 Eng. & It. App. 64. » See ante, sect. 138. 
 
 16 241 
 
153 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 ral process employed in adjudication, in most courts, it 
 ould be reasonable to suppose that, ordinarily, proof of a 
 nowledge by the mortgagee of the fact of sales would 
 EEord presumptive eviaence of an agreement, and throw 
 pon the mortgagee the burden of proving the contrary ; 
 ad the ultimate fact as to such agreement would thus be 
 etermined, affirmatively or negatively, just as any other 
 laterial fact would be. This process the student will find 
 ) have been employed in the class of cases in question in 
 le fourteen States before named.^ If the fact of the 
 wreement be proved, the rule of law, without qualification, 
 i applied, and the result is an adjudication of fraud in the 
 ransaction. 
 
 § 153. Conclusions. — As a result of this examination of 
 le questions pertaining to this branch of the law, the foUow- 
 ig general propositions may be advanced. 
 
 1. Fraudulent intent, i.e. , an intent to defraud, is always, 
 K necessitate rei, a question of fact, whether made so by 
 tatute or not. 
 
 2. That intent which courts sometimes call a legal intent 
 3 not identical with the former. By this is meant only the 
 itent to do the act which is recognized as having a neces- 
 arily prejudicial effect. 
 
 3. Whatever may be the facts material to the decision 
 f the case, they are to be ascertained according to the 
 iractice of the court ; and this should be done by the jury 
 a all jury cases. In the first named class of cases, the 
 ntent to deceive is a material fact. In the second, the cor- 
 esponding material fact is the intent to do the act com- 
 ilained of. 
 
 4. The fact being ascertained in either of the two classes 
 if cases above mentioned, the only proper concern of juris- 
 )rudence is to apply a definite and just rule of law to the 
 
 > Ante, sects. 114, 145. 
 242 
 
SUPPOSED QUALIFICATIONS OF THE DOCTRINE. § 153 
 
 ase. This rule, when formulated, may be called a doctrine 
 f substantive law. 
 
 5. The mode of ascertaining the facts cannot detract 
 rom, or affect by either enlargement or limitation, the rule 
 f law. Questions as to the mode of ascertaining the facts 
 an be no other than questions of procedure. 
 
 6. Jurisprudence, being absolutely impartial in its view 
 f all such cases, is ready to consider every important or 
 laterial fact, and, by reference thereto, to determine which 
 ule of substantive law is applicable ; and thus to exclude 
 lie application of the rule which governs cases of fraud 
 r fraudulent tendency, whenever the facts make that rule 
 aapplicable. 
 
 7. In entire harmony with all well considered cases in 
 rhich either of the foregoing propositions is adopted and 
 oUowed, Eobinson v. Elliott and kindred cases apply the 
 ubstantive rule of law, that a reservation to the mortgager 
 if a discretionary power of sale of the goods renders the 
 aortgage fraudulent. 
 
 243 
 
154 FRAUDULENT MORTGAGES OF MEKCHANDISE. 
 
 CHAPTBE X. 
 
 OTHER FORMS^ OF FRAUDULENT RESERVATION. 
 
 ECTiON 164. General principles of law applicable to several classes. of 
 cases. 
 
 155. The abstract rule involved in Robinson v. Elliott. 
 
 156. Different modes of reserving control of property. 
 
 157. Reservations of power of revocation. 
 
 158. Reservations of interest in real estate. 
 
 159. Reservations of the use of property consumable in the use. 
 
 160. Reservations of rights or privileges under assignments for 
 
 creditors. 
 
 161. Reservations of power of appointment. 
 
 162. Summary. 
 
 § 154. General principles of law applicable to several 
 lasses of cases. — Before the student of this subject closes 
 is investigations, his attention should be directed to certain 
 [asses of cases, which do not fall within the category of 
 Jhveyances involving a reserved power of sale, but in 
 hich there are reservations of other incidents of owner- 
 lip, and which are so closely analogous that the principle 
 f substantive law which governs them may be considered 
 lentical. If it shall appear that in the classes of cases 
 ow to be noticed, a given principle of law is applied as 
 andamental, and to so universal an extent that its propri- 
 ty and its salutary character are practically unquestioned, 
 ; will logically follow that the same principle should be ap- 
 lied wherever it properly may be, in order to preserve the 
 armony of jurisprudence. These cases are all believed to 
 3st upon a fundamental general principle, which is com- 
 lonly regarded as an essential of modern jurisprudence. 
 Lpparently it is quite applicable to cases of mortgages on 
 244 
 
OTHEE FORMS OP FBAUDtXLENT RESERVATION. § 155 
 
 stocks of goods with power of sale reserved ; an applicabil- 
 ity which has several times been mentioned by courts and 
 text-writers. Apparently, too, its application to them, in 
 distinct terms, if more generally recognized, would tend to 
 remove many of the difficulties attending this vexed question. 
 It will be remembered that these difficulties largely grow 
 out of misunderstood distinctions between substantive law 
 and adjective law. In determining the propriety, the justice, 
 or the applicability of any rule of substantive law, it is not 
 important to consider, first, what is the character or frame 
 of the action in the particular case; or second, by what 
 sort of evidence the facts of the case are established ; or 
 third, whether an agreement to do or to allow a particular 
 act or course of acts appears in writing, or is proven by 
 parol; or fourth, whether Jhe facts are ascertained by the 
 verdict of a jury, or by the direct investigation of a court; 
 or fifth, any other question of mere procedure; or sixth, 
 whether or not the Legislature has achieved the supereroga- 
 tory work of declaring that a question of fact shall not be 
 considered a question of law. It is, on the other hand, 
 proper to inquire whether, in case a certain state of facts 
 be satisfactorily established, a certain rule, which may be 
 stated in abstract and general terms, is reasonable, sensible, 
 and just in itself, and ought, in consideration of the status 
 and requirements of jurisprudence, to be applied as a prin- 
 ciple fundamental to the particular case and to all similar 
 cases. By this method, the proper distinction between the 
 law and the facts will be kept in mind, each will be confined 
 to its proper province, and the inherent difference between 
 them will be so comprehended, that it will be seen that while 
 no statute can convert one into the other, neither can any 
 statute well assist in keeping them separate. 
 
 § 155. The abstract rule involved in Bobinson v. 
 Elliott. — The doctrine of Kobinson v. Elliott and kindred 
 
 245 
 
156 PEAUDULENT MOBTGAGE8 OF MERCHANDISE. 
 
 ases may be re-stated as follows : that a mortgage upon a 
 tock of goods in trade, under which the mortgager is per- 
 litted by the mortgagee to sell the goods at his discretion in 
 le usual course of business, is inherently and essentially 
 L-audulent as to creditors of the mortgager. The reasons 
 3r this rule have been seen to be, that such a transaction 
 ilsely pretends to be a mortgage, while in reality it is in- 
 ansistent with the idea of a security, and amounts merely 
 ) a cloak for an exercise by the mortgager of the most 
 ractical and substantial power incident to ownership, 
 amely, the power of uncontrolled disposition. Reduced 
 ) its simplest analysis, the abstract rule may be stated thus : 
 lat a reservation by the grantor in a pretended conveyance 
 f property, of a power of controlling or disposing of it, is 
 tterly inconsistent with the idea of a conveyance, and ren- 
 ers the pretended conveyance fraudulent and void. As 
 ms stated, this is a doctrine applicable to the other classes 
 f conveyances now to be noticed, in which other incidents 
 r attributes of ownership are reserved, and which is fre- 
 uently so applied as to avoid them, with little dissent from 
 Durts, practitioners, or text-writers. • 
 
 § 156. Different modes of reserving control of prop- 
 rty. — There is no variation between the salient facts 
 f these cases and those of such cases as Eobinson v. 
 lUiott, which calls for any variation in the statement of 
 liis general doctrine. The variations in the facts of the 
 Bveral classes of cases grow out of differences between 
 lasses of conveyances, or differences in the incidents of 
 wnership which are reserved. Conveyances of land differ, 
 s to their form, objects and purposes, and sometimes as 
 3 parties and solemnities, from conveyances of chattels i 
 nd the variations in conveyances of different classes of 
 battels are numerous. So, there will be observed, first, 
 ifferent modes of reserving control to the grantor : second*. 
 246 
 
OTHFE FOBMS OP FRAXIDULBNT RESERVATION. § 157 
 
 lifferences in the character of control reserved ; and, third, 
 ifferent tests of the inconsistency of such reservations, 
 arying according to the forms, subjects, objects and requi- 
 ites of different conveyances. But under a rule stated in 
 general terms as those employed above, all such differ- 
 nces are minor and immaterial. The abstract essentials of 
 be doctrine of Robinson v. Elliott, namely, a pretended 
 onveyance by the owner of property, and an inconsistent 
 eservation by him of control over it, are found in the 
 lasses of cases now to be observed. 
 
 These cases may, for convenience, be classified according 
 the character of control reserved, as follows : — 
 
 1. Reservations of power of revocation. 
 
 2. Reservations of interest in real estate. 
 
 3. Reservations of use of property consumable in the use. 
 
 4. Reservations of rights or privileges under assignments 
 or benefit of creditors. 
 
 § 157. Beserrations of power of revocation. — In Eng- 
 ind, the doctrine was established at an early day that a 
 eservation in a conveyance, of a power of revocation, 
 rould render the conveyance fraudulent ; and the rule was 
 pplied in favor of both creditors and purchasers, and to 
 onveyances of both lands and chattels. A somewhat 
 ommon form of such conveyances was to insert a condi- 
 on that, on tender of a small sum of money, the convey- 
 nce should be void ; which was recognized as equivalent to 
 a unconditional power of revocation. The statute of 27th 
 lliz., in favor of purchasers, contained a special reference 
 ) powers of revocation, the reservation of which was then 
 5 common. 
 
 In Tyrer v. Littleton,^ in 1612, in the Common Pleas, 
 bke, C. J., referred to a case in the King's Bench, in the 
 8th Eliz., in which it had been adjudged that the reserva- 
 
 ' 2 Brownlow, 187. 
 
 247 
 
t 157 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 ion of a power of revocation made a conveyance fraudu- 
 ent as to a purcliaser; and Wynch, J., remarked that if 
 . conveyance contain a power of revocation, — which is 
 ieclared to be apparent fraud by the statute (27th Eliz.), — 
 he court may take notice of that without any averment. 
 
 The law was thus frequently declare^ by the courts in 
 ases where purchasers complained.^ 
 
 Dyer cites such a case, which arose just prior to the 
 lassage of the statute 13th Eliz., in which there was a 
 •roviso that the conveyance should be void on the payment 
 if ten shillings, and the grantor being then indebted, but 
 ontinuing after judgment to secure the profits of the lands 
 onveyed, his creditors, after the passage of that act, reached 
 nd subjected the land upon an elegit.^ In a note to this 
 ase. Dyer cites several earlier cases, some arising in the 
 eign of Edward III., where conveyances of land, under 
 '^hich the grantor reserved the profits, had been adjudged 
 raudulent as to creditors, thus evidencing the antiquity 
 f this principle of law. 
 
 It would seem from this that the express provision of the 
 batute 27th Eliz., making void as to purchasers any con- 
 eyance of lands- containing a power of revocation, was but 
 eclaratory of a general principle of law, already recog- 
 ized, that such a reservation is fraudulent. So the law 
 3ems to be understood by the learned author of Chance 
 n Powers.* 
 
 Bethel v. Stanhope * was a case of a voluntary gift of 
 oods, with a condition for reconveyance on payment 
 f twenty shillings, which was complained of by a cred- 
 or. ''AH the court held that this gift of the goods is in 
 self fraudulent, as appears by the condition." 
 
 1 Standen v. Bullock, 3 Coke, 82 b (1600); Anon., Lane, 22 (1606); Garth 
 Ersfeild, J. Brldgman, 22 (1616) ; Lavender v. Blackstone, 2 Lev. 146, 3 
 
 eble, 526 (1674). 
 
 2 Anon., Dyer, 295 o. 
 
 » Sect. 1843. « Croke Eliz. 810 (48 Elbi.). 
 
 248 
 
OTHER FORMS OP FRAUDULENT RESERVATION. § 157 
 
 In The King v. Nottingham,^ which was brought in the 
 Exchequer to set aside a conveyance of lands made by Sir 
 lobert Dudley, which contained a power of revocation, 
 he case was argued for the crown upon principles appli- 
 able to conveyances fraudulent as to creditors ; and Sir 
 Valter Raleigh's Case was cited as apposite, in which, 
 mder a conveyance by him of lands, he had reserved 
 nd enjoyed the profits thereof, which had been held 
 raudulent ; and a decision was rendered here also in 
 ayor of the crown, though the reasons therefor are not 
 tated. 
 
 In Tarback v. Marbury," it was expressly decided that 
 he reservation of a power, in a deed of lands, to mortgage 
 r dispose of the same as the grantor should think fit, 
 mounted in effect to a power of revocation, and therefore 
 endered the deed fraudulent as to creditors. In Peacock v. 
 lonk,* Lord Hardwicke said : "If there is a power of revo- 
 ation in such a deed, it is a constant evidence of fraud." 
 n Rock V. Dade,* in 1709, Lord Chancellor Cowper found, 
 1 a voluntary settlement for children, two powers of revo- 
 ation; one, for the grantor and his wife jointly during the 
 overture to revoke, which was in effect the grantor's sole 
 ower, the wife being sub potestate viri; the other, for the 
 rantor to revoke, if he survived his wife ; all which was 
 onsidered void as to creditors. 
 
 Recently, in Smith v. Hurst,* a deed in trust, professedly 
 lade for the benefit of creditors, was discovered upon ex- 
 mination to be " a mere deed of management, which' it was 
 ompetent to Hurst (the grantor) at any time to alter or 
 evoke ; " and the vice-chancellor said that " a deed which 
 le debtor has power to revoke, and attempts to use as a 
 tiield against his creditors, cannot be otherwise than fraud- 
 
 » Lane, 42 (1609). * Cited in May on Fraud. Conv. 520. 
 
 > 2 Vemon, 510 (1705). ' 10 Hare, 30 (1852). 
 
 » 1 Vea. sr. 127 (1748). 
 
157 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 lent and void against the creditors." To the same effect 
 
 Jenkyn v. Vaughan.^ 
 
 The authorities in America on the question of the effect of 
 
 power of revocation are few. The leading case is Eiggs 
 , Murray,^ in which there were five several conveyances 
 y -wsLj of general assignment for creditors. The first 
 )ntained a power of revocation; the second made new 
 Dpointments and reservations ; the third revoked all the 
 rants of the second, and prepared the way for the fourth, 
 hich gave new instructions to the trustees as to their 
 iities ; the fifth made a new provision for creditors, and 
 rovided for the support of the grantors themselves for a 
 eriod of time. Chancellor Kent held all these convey- 
 Qces void, saying that the grantors had be6n " sporting 
 iththe property as their own;" that there was a neces- 
 iry inference of a purpose to " hinder, delay or defraud 
 reditors;" that "the only effect of such an assignment 
 5 to mask the property; " and said further, "that such 
 owers of revocation are fatal to the instrument, and 
 loison it throughout, appears to have been weU established 
 ly authority." 
 
 The reversal of this decision by the Court of Errors ' 
 loes not seem to have received -the endorsement of jurists 
 ;enerally, if indeed, it is to be understood as detracting from 
 he authority of the rules of law announced, which, perhaps, 
 vasnot intended by the appellate court ; * and citations are 
 nost commonly made, both by courts and text-writers, from 
 he opinion of the chancellor. 
 
 In Shannon v. Commonwealth® and West v. Snodgrass,* 
 i sale of personal property, with a reservation to the vendee 
 )f the right to rescind the contract, was in each case held 
 
 ' 3 Drewry, 419. (1856.) » 2 Johns. Ch. 565. 
 
 " Murray v. Eiggs, 15 Johns. 571. 
 * See Lang «. Lee, 3Eand., at p. 425. 
 » 8 e. & B. 444. « 17 Ala. 649. 
 
 250 
 
OTHEK FOKMS OF FRAUDULENT RESERVATION. § 158 
 
 fraudulent and void as to the creditors of the vendor, on 
 the ground that this arrangement was in effect a power of 
 revocation reserved to the latter, and therefore within the 
 general rule above referred to. 
 
 In Cannon ?;. Peebles^ this general rule was approved, 
 though not applied to the case because the facts did not call 
 for its application. 
 
 § 158. Reserrations of interest in real estate. ^-Fre- 
 quent attempts have been made by grantors of real estate 
 to reserve benefits to themselves, either by way of control 
 of the estate, or receipts of its profits, or otherwise; and the 
 courts as a rule have condemned such transactions when 
 called on to examine them. A few instances will suffice to 
 illustrate the subject. 
 
 In Gibbs v. Thompson,^ the grantor of the land by a 
 subsequent conveyance reserved to himself the power to 
 sell the land, make deeds of the same and receive the con- 
 sideration therefor ; which transaction the court set aside, 
 saying : " This power enabled Denton, if he saw proper, to 
 make the conveyance to Thompson nugatory even as a 
 security for the alleged debt." In Smith v. Conkwright,' 
 the land was conveyed absolutely to a trustee, ostensibly 
 to provide funds for the payment of the grantor's debts, 
 but the proceeds were to be so applied by the latter and at 
 his discretion, which feature was held to make him " virtually 
 and potentially the beneficiary of the trust," and thus to 
 render the transaction fraudulent. 
 
 In Fisher v. Henderson,* where, under a deed of settle- 
 ment of land and personal property on a wife, the grantor 
 reserved the right to sell and dispose of the property, this 
 was held fraudulent and void as to creditors. 
 
 1 4 Ired. Law, 204. » 28 Minn. 23. 
 
 » 7 Hum. 179. • * 8 N. B. B. 175; (U. S. Court, Misa., 1873.) 
 
 251 
 
159 FEADDULENT MORTGAGES OF MEECHANDISE. 
 
 In Donovan v. Dunning,^ the reseiTation was of the use of 
 le land for the entire life of the grantor ; and in Coolidge 
 . Melvin^ there was the same reservation, with the addi- 
 on of a conditional defeasance to the children of 
 le grantors after their death. In Mackason's Appeal' 
 lere was the reservation of the use of the land 
 5r life, with power of appointment as to the remainder 
 iterest ; and in Brinton v. Hook,* the settlement by the 
 asband, for the wife's benefit, was under the trusts, first, 
 )r the use of husband and wife for life, with power of ab- 
 )lute disposal ; second, for absolute disposal by the hus- 
 and, in case he survived his wife; and third, for such 
 ersons as he might by his will appoint. 
 
 In Hungerford v. Earle ® there was, under a voluntary 
 jttlement, a reservation of fifty pounds sterling per annum 
 ) the grantor. In Mackie v. Cairns,* Jackson v. Parker' 
 ad Henderson v. Downing,* the reservation was for the 
 ipport of the grantor or his family for a limited period. 
 
 In Lukins v. Aird ' and Macomber v. Peck,!" it was for 
 le use of the land for a limited period, free of rent. 
 
 In Kissam v. Edmundson ,^^ the reservation was of one- 
 alf of the entire property conveyed to a creditor, in trust 
 )r the use of the grantor's wife and children. In Palmer 
 . Giles ,1^^ where the conveyance was a general assignment 
 )r creditors, the reservation was by way of excludinDf all 
 lose creditors who refused to receive fifty cents on the 
 oUar in settlement. 
 
 § 159. Reservations of the use of property consnmable 
 I the use. — While there is not an entire accord in the 
 
 169 Mo. 436. '9 Cow. 73. 
 
 M2N.H.510. 8 24 Miss. 106. 
 
 » 42 Penn. St. 330 9 g "Wall 78 
 
 *3Md.Ch.477. "89Iow^851. 
 
 ' 2 Vernon, 261. u 1 1^^^^ j-^^ igO. 
 
 • 5 Cow. 547, 15 Am. Deo. 477. " 5 Jones Bq. 75. 
 252 
 
OTHER FORMS OF FRAUDULENT RESERVATION. § 159 
 
 American decisions on the subject of the reservation of the 
 use of property, where such use is tantamount to its de- 
 struction, the majority of the courts which have considered 
 the subject have pronounced such reservations fraudulent. 
 With this majority are the courts of at least one State in 
 which the rule of Robinson v. Elliott is not favored. The 
 reason given is that such a reservation is a practical asser- 
 tion of one of the incidents of ownership, which is incon- 
 sistent with the idea of either an absolute or a conditional 
 conveyance of the property, and thus renders the trans- 
 action, of which it forms a part, collusive and fraudulent. 
 Farm and plantation crops and family supplies are the 
 articles which most commonly form the subject of such 
 reservations. 
 
 In Darwin v. Handley,^ the Supreme Court of Tennessee 
 thought the reservation of the use of property consumable 
 in the use was ^nma facie fraudulent, " a badge of fraud 
 so strong as to be almost conclusive, not as a matter of law, 
 but of fact with the jury, that the deed was fraudulent." 
 But in Sommerville v, Horton,^ it was declared that a 
 reservation of use of property of a nature to be consumed 
 and exhausted in the use was not only prima facie fraudu- 
 lent, but " merely colorable, and void, because in fact it 
 had no operation," and the use of such property (which was 
 provisions) "was its destruction." To the same effect is 
 Simpson v. Mitchell.' Such a conveyance was in "Wade v. 
 Green * held good as between the parties, though it would be 
 bad as to creditors. The rule does not apply to any partic- 
 ular kind of property, as such ; but the test is whether the 
 property conveyed with such a reservation is, under the cir- 
 cumstances of the particular case, necessarily consumable 
 in the use.* 
 
 1 3 Terg. 502. » 8 Yerg. 416. 
 
 -' 4 Terg. 540 (1883), 26 Am. Dec. 242. * 3 Hum. 546. 
 
 ' Bobs v. Young, 6 Sneed, 627 ; MasBon v. Anderson, 3 Baz. 290. 
 
 253 
 
159 FEAtlDTJLKNT MORTGAGES OF MERCHANDISE. 
 
 In Eichmond v. Crudup ^ an attempt was made to distin- 
 lish between an agreement for the use of such property, 
 ade as one of the terms of an absolute sale, which would 
 snder it void per se, and a similar agreement made subse- 
 lently and in addition to a deed in trust, which it was 
 lought would be only prima facie fraudulent, as in 
 arwin v. Handley. The case of Charlton v. Lay^ enforces 
 id applies this distinction. The deed in that case not con- 
 Aning such a reservation on its face,. the question of fraud 
 as one for the jury. 
 
 In Massachusetts, this principle appeared in a dictum in 
 hurtleff V. Willard,' to the effect that " there may be 
 lattels so transient in their existence, or of such a nature, 
 leir only use consisting, in their consumption, that they 
 mnot be mortgaged; " for which Sommerville v. Horton 
 as cited as an authority. The point was decided in Eob- 
 ins V. Parker,* where there was a mortgage of hay, grain, 
 nd produce on a farm; with proof that the mortgager used 
 nd consumed the property with the knowledge of the 
 lortgagee; which was held to be " collusive and fraudulent 
 gainst creditors," again citing as authority Sommerville v. 
 lorton. 
 
 It will be observed that while in Tennessee, the courts 
 )lace upon the same basis the reservation of the right to 
 ell and dispose of property mortgaged and the reservation 
 )f the use of the property to exhaustion, Massachusetts sus- 
 ains one class of cases and condemns the other. But in 
 l^ew Hampshire, where the appellate court had to consider a 
 iase of a reserved power of sale of mortgaged goods, in 
 Putnam v. Osgood,^ the Massachusetts case of Eobbins v. 
 Parker was considered an authority in point. 
 
 ' Meigs, 581, 33 Am. Dec. 161. * 8 Meto. 117. 
 
 » 5 Hum. 495. 6 61 N. H. 192 (at p. 200). 
 
 a 19 Pick. 202. 
 254 
 
OTHER FORMS OF FRAUDULENT RESERVATION. § 159 
 
 Cutting V. Jackson ^ was a case of a sale of cattle and 
 hay, the property remaining with the vendor for his use, 
 and the cattle consuming the hay, and the transaction was 
 adjudged fraudulent. 
 
 In Farmers' Bank*. Douglas^ the court, having such a 
 mortgage before it, said: " The mortgaging of property, 
 the use of which involves its consumption, is an evidence 
 of fraud, not indeed conclusive, but of much weight. Un- 
 less it be explained satisfactorily, it must cause the con- 
 demnation of the instrument ; and it imposes the burthen of 
 proof upon those claiming under such instrument; and 
 when the right to use it is also reserved in the mortgage 
 itself, it is fraudulent upon its face." ^ Proceeding then to 
 consider the facts of the case at bar, the court found it 
 " manifest that the object was not to apply these things to 
 the payment of the debts, but to secure the debtor in their 
 possession and enjoyment," and thus adjudicated: " The 
 reservation in the conveyance of so much of these articles 
 as was necessary for the support of the property puts an 
 impress of fraud upon it, from which there is no escape. 
 It was a direct benefit secured to the debtor at the expense 
 of his creditors, which the law does not sanction." * 
 
 The cases in Virginia are not entirely harmonious. The 
 general doctrine was stated in a late case ^ to be, that the 
 reservation of the use of property consumable in the use, 
 such as the crops and provisions on a plantation, furnishes 
 only an indication of fraud, but does not conclusively estab- 
 lish it. In that case and another,* it was thought the grain 
 conveyed might have assisted in maintaining the stock, and 
 thus have indirectly benefited the creditor and not the 
 
 1 56 N. H. 253. ' p. 540. 
 
 2 lis. &M. 469. * p. 541. 
 ^ Brockenbrough v. Brockenbrough, 31 Gratt. 580. 
 
 ' Sipe V. Barman, 26 Oratt. 663. 
 
 255 
 
160 FEAXIDULENT MOETGAOBS OF MERCHANDISE. 
 
 ebtor ; and in still another,^ stress was laid on the circum- 
 tances that the property conveyed in the particular case 
 '&a not necessarily consumable, and also that the amount 
 f consumable property was inconsiderable. But in one 
 ase,* the court, while " recognizing the binding authority " 
 f such cases, held the conveyance in question to be fraud- 
 lent, laying stress on the fact that it embraced "large 
 uantities of property consumable in the use, and which 
 lust be used within the two years to be of any value," 
 3 sufficient to condemn the transaction. Thus there appears 
 ) be in this State a disposition to tolerate reservations of 
 lis kind, provided the grantor is careful not to reserve too 
 luch ; though the reservation may be urged upon the atten- 
 on of a jury as a badge of fraud. 
 
 Similarly, it was thought in North Carolina, in Dewey v. 
 ittlejohn,* that where the use of the crops was such that 
 lereby the stock conveyed could be kept together, the 
 Bed was not fraudulent in law. 
 
 In Alabama, such a mortgage was in Wiley v. Knight * 
 3ld fraudulent as to creditors, irrespective of the question 
 f intent, and Farmer's Bank v. Douglas was expressly 
 pproved as an authority. But in two earlier cases * it was 
 lought otherwise, because the use and consumption of the 
 roduce on the farm might, by the cultivation of the land, 
 ssist in producing additional assets. 
 
 § 160. Keservations of rights or privileges under as- 
 gnments for benefit of creditors. — The general subject 
 f reservations by assignors under assignments for credi- 
 )rs is a prolific one ; and it has been so fully treated by 
 le text-writers,« that a few only of the multitude of cases 
 
 • Cochran v. Paris, 11 Gratt. 348. 
 
 = Quarles v. Kerr, 14 Gratt. 48. 
 
 ' 2 Ired. Bq. 495. * 27 Ala. 336. 
 
 6 Raviaies v. Alston, 5 Ala. 297 ; Blmes v. Sutherland, 7 Id. 262. 
 
 « For a full exposition of the subject, see Bishop's Burrill on Assts., oh. 11; 
 
 imp. on Fraud. Conveyances, ch. 14, 15. 
 
 256 
 
OTHER FOEMS OF FRAUDULENT EESERVATION. § 160 
 
 fill be referred to here ; sufficient in number to direct 
 ttention to the feature of attempted control by the as- 
 ignor, which is their point of resemblance to the cases 
 Iready examined. 
 
 Burd V. Smith ^ presented the case of an assignment for 
 reditors, with a reservation that the assignee, in case cer- 
 lin of the creditors would not accept their respective 
 ortions within nine months, should pay those portions 
 3 the assignor, for the ostensible purpose that he him- 
 slf might therewith settle with such creditors. This was 
 eld void on its face. The court discriminated between 
 le fraud which rests in intent, and the fraud which inheres 
 1 a fraudulent transaction, irrespective of intent, in these 
 icisive terms : ' ' The facts * * * constitute a legal 
 raud, so as to vitiate and destroy the act, without crim- 
 lating the agent." 
 
 In the leading case of Wakeman v. Grover,^ the assign- 
 lent provided for payments, first, to certain preferred 
 reditors; second, partially to such as would release the 
 ssignor in full; third, to another preferred class; and, 
 Durth, if there was any surplus, to the assignor. Such 
 xtensive reservations by the grantor were held to make 
 lie transaction fraudulent. On appeal, under the name 
 f Grover w. Wakeman,' this assignment was declared void 
 ecause of the reservation named in the second clause above 
 bated. 
 
 In Boardman v. Halliday,* the reservation to the assignees 
 f power to give future preferences among the creditors 
 'as held to be quite as fraudulent as if the reservation had 
 een to the assignor himself. To the same effect is Barnum 
 . Hempstead.^ In Armstrong v. Byrne, ^ the assignment 
 roadly cut off all creditors who did not release within a 
 
 1 4 Dallas. 7G (1802). * 10 Paige, 228. 
 
 » 4 Paige, 23. ' 7- Paige, 568. 
 
 s 11 Wend. 187. « 1 Edw. Ch. 79. 
 
 17 257 
 
160 FKAUDULENT MORTGAGES OF MERCHANDISE. 
 
 artain time, which was characterized as being to the 
 3signor's personal advantage, by hindering and delaying his 
 reditors, if not otherwise. So it was held also in Lentil- 
 on V. Moffat,^ of a reservation to the assignor of power, 
 1 case cei'tain creditors should not accept and release their 
 ebtor within sixty days, to appoint the proceeds not thus 
 ccepted to such of the creditors as he saw fit. In Austin 
 . Bell,^ there was a broad reservation that the shares of 
 ich creditors as might refuse to execute releases should 
 Bvert to the assignors ; which, the court said, placed the 
 roperty of the assignors "at their absolute disposal, to 
 pply to their own use, or to pay to their creditors, as they 
 leased; " a reservation of control which made the idea 
 f a security for creditors ridiculous. In Riggs v. Murray,^ 
 le reservation was of a power to appoint new trustees, 
 a Hyslop v. Clarke,* it was not merely a preference to 
 ertain creditors which proved fatal ; it was a reservation 
 y the assignors of the right to make and declare future 
 references, which amounted to retaining potential control 
 ver the property. 
 
 In Pierson v. Manning, ^ the assignment, preferring cred- 
 Dors, provided that all the personalty assigned must first be 
 xhausted and applied to payment of debts, before the 
 eal estate should be resorted to, unless by consent of the 
 ssignor. This was held to be the reservation of a right 
 o control the trustees in relation to a sale of the realty, 
 nd therefore fraudulent and void as to creditors not pre- 
 erred. In Atkinson v. Jordan,^ the assignment excluded 
 reditors not releasing the assignor within ninety days, 
 n Sangston v. Gaither,' there was a reservation of the 
 urplus after paying the preferred creditors. In Green v. 
 
 1 1 Edw. Ch. 451. 6 2 Mich. 445. 
 
 ' 20 Johns. 442, 11 Am. Dec. 297. e 5 Ohio, 293, 24 Am. Dec. 281. 
 ' 2 Johns. Qh. 565. i 8 Md. 40. 
 
 * 14 Johns. 458. 
 258 
 
OTHER FORMS OF FRAUDULENT RESERVATION. § 160 
 
 'rieber,^ the fatal feature was an unnecessary delay, for 
 erhaps an indefinite time, the grantor retaining in the 
 leantime full use of the property. In Grimshaw v. 
 i^'alker,* releases were exacted as a condition of participa- 
 on, and the surplus was reserved to the assignor. In this 
 ase, as in many others of those cited, the court in its 
 pinion illustrated clearly the vice inherent in such a 
 eservation, by an insolvent debtor, of the power "to 
 lace his property beyond the legal pursuit of his cred- 
 ;ors," and at the same time to impose conditions upon 
 [leir sharing in its proceeds. 
 
 One of the clearest expositions of this class of fraud 
 ras given in an early Pennsylvania case,' by Brackenridge, 
 ., who, speaking of the features of such conveyances above 
 ef erred to, said : — 
 
 " It has been left to the astutia Americana of debtors, to 
 evise such a warehousing of effects out of the hands of the 
 iw for a time, for the benefit of particular creditors. I 
 [link it to the let and hindrance of creditors, and that such 
 isposition is void both at common law and by statute ; 
 liough not fraudulent in fact in the particular case, yet 
 raudulent in law, and therefore void. It is not simply the 
 arrender of his property as satisfaction pro rata of his 
 ebts, that the insolvent here has in view. He couples an 
 iterest for himself in obtaining a discharge from that pro- 
 lortion of the respective debts which may remain unsatisfied, 
 t is taking an undue advantage of the situation of a creditor, 
 impose- this condition. It is immoral to exact it. 
 Volenti non fit injuria if the creditor accepts, but it is mak- 
 Qg a volunteer by compulsion, and is in fact a robbery. 
 )ne enlightened on the principles of moral honesty would 
 lever think of it. " This opinion was cited and approved by 
 /hancellor Walworth in Wakeman v. Grover,* 
 
 1 3 Md. 11. 2 12 Ala. 101. 
 
 8 Lippincott u. Barker, 2 Bin. 174 (at p. 191), 4 Am. Dec. 433. 
 
 * i Paige, 23. 
 
 259 
 
161 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 Somewhat like the foregoing cases are those of reserva- 
 ions under conveyances to a favored creditor; as in Wilson 
 nd Wormal's case,^ which was an assignment of goods to 
 ne creditor, reserving an interest in the surplus over that 
 [■editor's debt, of which it was said, " this assignment is 
 Itogether void, because it is fraudulent in part." In 
 'assmore v. Eldridge,^ under a conveyance t)f personal 
 roperty, the jury were instructed that if there was a 
 jservation of a part of the property to the benefit of the 
 rantor, this would be fraudulent and void. In Lang v. 
 tockwell,' the reservation, under a conveyance of a horse 
 ad wagon, of the use for, an unlimited time, was declared 
 ) be a legal fraud. In Sparks v. Mack,* under a sale of a 
 ock of goods to a favored creditor, the grantor reserved 
 1 interest, which made the transaction fraudulent. 
 
 § 161. Reservations of power of appointment. — Still 
 lother class of cases, namely, those involving the exercise 
 I a general power of appointment, as to either real or 
 srsonal property, will be found on examination to resemble 
 3ry closely those above referred to. They are to be dis- 
 nguished by this feature, that the rule is applied alike, 
 hether the donee of the power has been made such by 
 lother person, or by a reservation originally made in a 
 )nveyance or settlement by himself; or, in other words, it 
 
 immaterial whether the property over which he exercises 
 le power was originally owned by himself, or by another, 
 berefore, as the element of original ownership is not always - 
 resent, the grant of such a power is not to be classed solely 
 nong reservations by grantors. But the essential feature 
 ' these cases being that the power granted, as to the 
 jstiture or the use of property, is equivalent to that right or 
 •ntrol over property which appertains to absolute ownership, 
 
 ' Godbolt, 161, (1610.) » 55 N. H. 561 
 
 M2S. &E. 198. * 81 Ark. 666. 
 
 260 
 
OTHER FORMS OF FRAXIDULENT RESERVATION. § 161 
 
 be theory is that such a right, wherever it may have orig- 
 aated, is when exercised the equivalent in all respects of 
 bsolute ownership. Thus it logically follows that, as to 
 11 creditors of the person exercising such power, the 
 iroperty so controlled is his own property and is subject 
 his debts. 
 
 The distinction is taken in these cases that there must 
 ave been an exercise of the power by the donee of it, in 
 rder to put the property within reach of his creditors. 
 ?he mere grant of the power is not sufficient, though it be 
 . general power, for it may be revoked, or it may never be 
 xercised ; it is then like an offer of property, not accepted ; 
 ,nd certain essential features of ownership are lacking. 
 Jut if the power be so general as to authorize the appoint- 
 nent to the donee himself or to his heirs, and he exercise such 
 )ower, he is in an enjoyment of the property not inferior to 
 hat which an absolute owner may exercise, and his creditors 
 vould be defrauded if they could not reach and appropriate 
 t. 
 
 Sir Edward Sugden, in his treatise on Powers,^ states the 
 ule for these cases as follows : ' ' The beneficial interest a 
 nan takes under the execution of a power forms part of 
 lis estate, and is, according to the nature of the property, 
 ubject to his debts like his other property; nor indeed can 
 in appointment be made so as to protect the funds from the 
 lebts of the appointee. But equity goes a step farther, 
 ind holds, that where a man has a general power of appoint- 
 nent over a fund, and he actually exercises his power, 
 whether by deed or will, the property appointed shall form 
 )art of his assets, so as to be subject to the demands of his 
 reditcrrs, in preference to the claims of his legatees or ap- 
 lointees." In Kent's Commentaries,^ the rule is stated in 
 Imost the same terms. In Chance on Powers,^ it is said: 
 
 1 V. 2, p. 27. 2 V. 4, p. 339. = v. 2, sect. 1817. 
 
 261 
 
161 FRAUDULENT MORTGAGES OP MERCHANDISE. 
 
 A power is not property ; * * * if , however, the 
 anee see fit to execute his power, thus assuming a dominion 
 irev the property, it may be thenceforth regarded as a part 
 f his estate, and as such subject, at least in equity, to the 
 aims of his creditors." 
 
 The views of Lord Chancellor Hardwicke were expressed 
 > follows in Bainton v. Ward: ^ " Where there is a gen- 
 ial power given or reserved to a person, for such uses, 
 itents and purposes as he shall appoint, this makes it his 
 Dsolute estate, and gives him such a dominion over it as 
 ill subject it to his debts." In this case Ward, having a 
 ower to charge his wife's estate with a sum not exceeding 
 vo thousand pounds, by his will devised the same, and 
 ied in debt to the plaintiffs ; and the lord chancellor held 
 le sum devised to be subject to the debts of the testator 
 3 his personal assets. The same rule was applied by Lord 
 [ardwicke to similar states of facts, in Pack v. Bathurst,^ 
 roughton v. Troughton^ and Townshend v. Windham;* 
 I which last named case the power of appointment had 
 een executed in favor of the testator's daughters, which 
 ord Hardwicke held to be a voluntary conveyance, saying, 
 A man actually indebted, and conveying voluntarily, 
 iways means to be in fraud of his creditors as I take it." ® 
 hese decisions follow the earlier cases of Thompson v. 
 owne,* Lassells v. Cornwallis' and Hinton v. Toye,* in 
 ich of which, property so placed at the disposal of a party, 
 ho assumed control of it, was held to be his property. In 
 shfield V. Ashfield,' a party had settled property upon 
 •ustees, in trust for such persons or uses as he should by 
 eed or will appoint, and in default of appointment, in 
 
 > 2 Atk. 172 (1741). 
 
 « 2 Vernon, 319 (1694). 
 
 2 3 Atk, 269. 
 
 ' 2 Vernon, 465 (1704.) 
 
 5 3 Atk. 656. 
 
 8 1 Atk. 465 (1739.) 
 
 * 2 Ves. Br. 1 
 
 3 2 Vernon, 287. 
 
 6 p. 11. 
 
 
 262 
 
 
OTHER FORMS OF FRAUDULENT RESERVATION. § 161 
 
 trust for himself or his representatives ; which was held to 
 leave him in equity still the owner of the property, so it 
 was subject to his debts. This doctrine is stated in all 
 these cases as a rule of positive law. It was recognized as 
 such, by Lord Eldon, in George v. Milbanke.^ It was ap- 
 plied and enforced in Attorney General v. Staff, ^ in the Ex- 
 chequer, by charging with probate duty property which had 
 been conveyed by the testamentary exercise of such a 
 power. So in Goodtitle v. Otway,^ it was held that a power 
 of disposition by will gives an absolute fee in real estate. 
 
 This rule was enforced in Johnson v. Gushing* and Tall- 
 madge v. Sill,^ where the power of appointment could be 
 exercised only by will, but it having been so exercised, the 
 principle applied ; the court saying in the former case, 
 " We see no reason to gainsay the soundness and justice of 
 it;" and stating it in the latter case in these words, " that 
 the absolute power of conveying or disposing of property, 
 for one's own benefit, makes the person to whom it is given 
 the owner ; the power of absolute and beneficial control 
 cannot and ought not to be separated from the ownership." 
 
 In the late case in New York,* the rule, receiving assent 
 as a common-law rule, was held to have been abolished by 
 the Revised Statutes. 
 
 These cases have not, as a rule, been based upon con- 
 siderations applicable to fraud in conveyances. Generally 
 originating in equity, it has been found sufficient to apply 
 to them the equity rules usually invoked in favor of cred- 
 itors who seek to reach assets of their debtors. It is plain, 
 however, that the attempt to exercise such a power in defi- 
 ance of creditors would operate a fraud upon them, in 
 the same manner as would any of the reservations treated 
 of in this chapter. As has already been seen. Lord Hard- 
 
 1 9 Ves. jr. 190 (1803). * 15 N. H. 298, 41 Am. Dec. 694. 
 
 2 2 Cromp. & Mees. 124. * 21 Barb. 34. 
 
 » 2 Wilson, 6. » Cutting v. Cutting, 86 N. Y. 522. 
 
 263 
 
162 FRAUDULENT MORTGAGES OF MERCHANDISE. 
 
 icke in one such case adverted to the matter of fraud 
 pon creditors as an element properly to be considered. 
 Q one American case^ it was said by the court: " Under- 
 iking to exercise a power which authorized him to appro- 
 riate the property to the payment of his creditors, by a 
 lere gift or legacy without making provision for them, is 
 fraud upon them." 
 
 § 162. Summary. — In all the cases of reservations by 
 rantors, discussed in this chapter, the courts have found 
 le element present of an attempted control by the grantor 
 ver the property conveyed, inconsistent with the convey- 
 Qce, and consistent only with the idea of a continued own- 
 rship, to some extent if not absolutely, by the grantor, 
 'he harmony of jurisprudence can be preserved, in such 
 ises, only by treating the property thus dealt with as the 
 roperty of him who thus reserves control over its dispo- 
 ition. This rule of substantive law has been admirably 
 ondensed by Mr. Bump, in these words : "Absolute power 
 f disposition is substantial ownership; but liability for 
 ebts is an inseparable incident of ownership." ^ 
 
 This is an accurate statement, from one point of view, 
 f the salient feature of such cases as Eobinson v. Elliott, 
 nd the principles of law applicable" thereto. The reserva- 
 Lon, by a mortgager, of the discretionary power of sale or 
 isposition of the goods mortgaged, is a reservation of one 
 f the most essential and potential features of ownership. 
 L power of revocation, a power to consume by use, or a 
 ower to exercise any other species of control over the 
 roperty, can scarcely be a greater interference with the 
 ights of creditors than a power to sell; indeed, any reason 
 rhich condemns any of these reservations of other powers 
 
 » Johnson v. Gushing, 15 N. H. 298, 41 Am. Deo. 694. 
 ' Article, 4 Cent. Law. Jour. 219. 
 264 
 
OTHER FORMS OP FRAUDULENT RESERVATION. § 162 
 
 seems to apply with even greater force to the reserved 
 power of sale. 
 
 The inconsistency being apparent, shall the transaction 
 be held positively fraudulent ? It is so held in the classes 
 of cases referred to in this chapter. As already seen, it is 
 so held by the majority of the American courts in cases 
 presenting a reservation of a power of sale of mortgaged 
 goods. The language in which these courts have generally 
 characterized all such transactions, as heretofore quoted, 
 may be supplemented by that of a learned writer, whose 
 doubts in reference to reservations of a power of sale do 
 not extend to the classes of reservations referred to in this 
 chapter. Speaking of " Trust Assignments in the Nature 
 of Mortgages," he says that " such an assignment, with 
 any reservation by the debtor for his own use or benefit in 
 any way, is fraudulent per se, and absolutely void; it is 
 also void if it leaves the property to any extent under the 
 control of the debtor or of his assignee." ^ 
 
 It is by the application of the precise principles of sub- 
 stantive law thus expressed, that Eobinson v. Elliott and 
 kindred cases have condemned mortgages on stocks of 
 goods, with power reserved to the mortgager to make 
 discretionary sales in the usual course. Stated compre- 
 hensively, these principles are : — 
 
 First: Such a reservation is inconsistent with the idea 
 of a conveyance for the benefit of a creditor. 
 
 Second: It being consistent only with absolute owner- 
 ship, the property to which the reserved power applies 
 remains subject to the grantor's debts. 
 
 Third: The pretence that a conveyance with such a 
 reservation is a real security, is in itself a fraud, which 
 condemns the conveyance, and requires that it be set aside 
 at the suit of a complaining creditor. 
 
 1 Jones on Chat. Mort., sect. 352. 
 
 265 
 
INDEX. 
 
 [Beferences are to sections.'] 
 
 SECTION 
 
 Absolute ^nd conditional sales, no real distinction between, as to 
 
 fraud tlierein 7, 99 
 
 Act of delivery of goods to mortgagee, though after a fraudulent 
 
 conveyance, may be valid . . 31,51,64,144 
 but must be free from fraudulent Intent . . 144 
 
 of assumption of possession by mortgagee does not validate 
 
 a fraudulent mortgage 51, 62, 143 
 
 Acts and agreements, intent to defraud inferred from . 30, 39, 45, 51, 62 
 of ownership are evidence of fraud .... 155, 156 
 
 are inconsistent with idea of security, 
 
 10, 12, 44, 77, 79, 156 
 
 effect to be given to 7, 8, 13 
 
 Actual fraud, reservation of power of sale is 
 
 9, 43, 52, 60, 78, 84, 117, 120, 121, 129, 131 
 
 fraud in conveyances is one form of . . . 117, 118 
 
 was exhibited in Twyne's Case .... 6 
 
 and fraud in law not antithetical terms . . 3,118-122 
 
 and fraud in fact, not synonymous terms . . 3, 118 
 
 and intent to defraud, distinction between . . 119, 120 
 
 and constructive fraud, distinguished ... 3 
 
 defined and distinguished . 119 
 
 terms misunderstood . . 3, 118 
 
 Adjective law. See Procedure. 
 
 Adjudication, processes of. Illustrated 136, 146 
 
 Agent for mortgagee, power of sale as, not fraudulent per se, 
 
 35, 36, 41, 43, 46, 49, 53, 57, 58, 75, 97, 104, 137, 138, 139, 140 
 but must be free from in- 
 tent to defraud . . 53, 87 
 presents an entirely new 
 
 case .... 137-140 
 calls for a different doc- 
 trine .... 137-139 
 the distinction clearly 
 stated .... 43 
 
 (267) 
 
268 INDEX. 
 
 SECTION 
 
 Agent for mortgagee, power of sale as, substantial features of . 138 
 
 a question of law, after 
 facts are proven . . 146 
 mortgager sells as quasi, in Kansas . . 100 
 Agreement, fraudulent, ascertainment of fact of, a matter of pro- 
 cedure only 2 
 
 mode of proof of, immaterial . 4, 43, 147, 153 
 for power of sale is a question of fact . . . 146, 146 
 
 for a jury in disputed 
 cases . 66, 72, 145, 146 
 to account for sales is not alone suflBcient to validate 
 
 transaction 9, 35, 39 
 
 Alabama, decisions in, as to reserved power of sale . . . 101, 102 
 the rule in, respecting reserved power of sale, left in 
 
 doubt 101 
 
 jury alone can draw inferences of fraud in . . . 101 
 
 decisions in, as to use of consumable property . . 102, 159 
 
 Appointment, reservation of power of, fraudulent . . . 161 
 
 equivalent to assertion of ownership, 161 
 
 inconsistent with any other theory . 161, 162 
 
 Arkansas approves the majority doctrine 86 
 
 Assignee or trustee must not collude with mortgager . . . 141 
 
 must act for himself ... 12, 35, 141 
 
 must control proceeds of sales . . 4, 35, 60 
 
 Assignment for creditors, stipulation under, that creditors must 
 
 assent, fraudulent . . . .30, 160 
 reservation of rights or privileges 
 under, fraudulent . . . .30, 160 
 
 a legal fraud ICO 
 
 immoral and dishonest . . . 160 
 
 trustees under, must act of themselves, 
 
 12, 35, 141 
 and control proceeds of sales . 4, 35, 60 
 
 must not take a, colorable possession . 69, 60 
 nor collude with assignor . . . 14 1 
 
 Bankruptcy statutes, effect of, in England 32 
 
 effect of, in America 33 
 
 the question of fraud in such conveyances is 
 
 independent of 68 71 
 
 Benefit to mortgager, reserved power of sale is a, 
 
 4, 87, 41, 45, 48, 60, 62, 63, 69, 77 
 
 use of consumable property is a . . 159 
 
 of mortgagee, sales made solely for, distinction in case of, 137-140 
 
INDEX. 
 
 269 
 
 Brett V. Carter, doctrine of, stated 
 
 erroneous views of Twyne's Case in . 
 views advanced in, examined 
 Bucknall v. Eoiston of doubtful authority 
 Buller, J., synopsis of Twyne's Case, by . . . 
 views of, in Edwards v. Harben . . 
 views of, as to mere retention of possession 
 Burnet, J., views of, concerning Twyne's Case 
 
 SECTION 
 
 i 
 
 5 
 
 126 
 
 15 
 
 21 
 
 9 
 29 
 
 7 
 
 California, mortgages of chattels limited in 112 
 
 Characteristics, essential, of chattel mortgages . . . .69, 127 
 of a reservation of a power of sale, a controverted 
 
 question 1 
 
 illustrated judiciaUy 9, 34, 47, 69, 123, 130, 131, 132 
 
 the transaction tested by its . . . 120, 121, 122, 131 
 Twyne's Case was tested by its . . . . 122 
 
 Chattel mortgages essentials of 47, fi9, 127 
 
 misunderstood .... 126 
 
 are lost when mortgager is al- 
 lowed power of sale . . 127 
 are allowed on stocks of goods in Georgia, by 
 
 statute Ill 
 
 are limited in California and Nevada . . 112 
 are unknown in Louisiana . . . . 113 
 with reserved power of sale, is not a mort- 
 gage in fact 34, 41, 47, 69, 127 
 
 effect of power of sale upon. See Power of 
 Sale. 
 Circumstances and acts, fraudulent intent may be inferred from, 
 
 ■ 30, 39, 45, 51, 62 
 
 Colorado, decision in, on reserved power of sale .... 66 
 
 Common law, fraud in conveyances a rule of .... 70, 90 
 
 reserved power of sale fraudulent, at . . . 70, 90 
 
 rule of, as to reserved power of sale, changed in 
 
 Iowa, by statute 90 
 
 legal intent, at 149 
 
 reserved power of revocation fraudulent, at . . 157 
 
 Conditional and absolute sales, no real distinction between, as to 
 
 fraud therein 7, 99 
 
 sale reserving title, not sanctioned if vendee allowed 
 
 power of sale 42, 61, 79 
 
 Connecticut, decisions in 79, 80 
 
 Consequences, necessary or usual, parties are held to intend, 
 
 4,„30, 39, 60, 62, 79, 81, 84, 97, 148, 151 
 of reserved power of sale, as stated judicially 
 
 69, 122, 131, 132 
 
270 INDEX. 
 
 SECTION 
 
 Construction not resorted to in such cases as Eobinson v. Elliott, 3, 117 
 
 Constructive fraud, defined 3, 119 
 
 explained 3 
 
 Story's definition of 3 
 
 Bigelow's definition of 117 
 
 and actual fraud, terms misunderstood . 3,118 
 defined and distin- 
 guished . . 119 
 and fraud in law, not synonymous terms . 3, 118 
 and presumptive fraud, considered . . 116 
 distinguished . . 117, 119 
 terms defined . . 119 
 sometimes con- 
 founded . . 117 
 reserved power of sale does not present, 3, 43, 117 
 Twyne's Case did not present ... 5 
 fraud in mortgages of merchandise is not, 3, 43, 117 
 is a convenient rule of practice ... 3 
 statute as to fraudulent intent is not a statute 
 
 as to 74 
 
 in conveyances, doctrine as to. In Vermont . 110 
 
 Consumable property, reservation of use of, is fraudulent, 
 
 44, 59, 63, 95, 102, 159 
 secures a benefit to 
 
 debtor ... 159 
 
 actual intent imma- 
 terial ... 159 
 test of is, whether it 
 is necessarily con- 
 sumable . . 159 
 furnishes a rule for 
 cases of reserved 
 power of sale . 44, 159 
 doubtful views con- 
 cerning, in Va. . 159 
 in Ala. . 102, 159 
 Controversy over effect of mere retention of possession . . 5 
 over effect of possession with reserved power of 
 
 sale 1,2,4 
 
 Conveyances. See Fraud in Conveyances. 
 
 Court, bound to adjudge fraud when facts are proved . . 102, 146, 151 
 power of, not limited by statute as to fraudulent intent 74, 75,' 15;) 
 may direct verdict of fraud in some States . . . 41, 42 
 
 but not when fact is in dispute 70 
 
 and jury, different provinces of . 50, 82, 84, 85, 103, 109, 120, 146 
 
INDEX. 271 
 
 SECTION 
 
 Courts, opinions of, illustrating fraudulent character of reserved 
 
 power of sale 69, 122, 131, 132 
 
 the language used by, does not determine the Importance 
 
 of the question involved 6, 16 
 
 disclaim authority to adjudicate fraud arising from a re- 
 served povFer of sale, in Iowa . . ' . . . 90 
 
 in Maine 97 
 
 in Massachusetts .... 96 
 
 Covin, defined 121, 149 
 
 appa and not apparent 149 
 
 identical with modern doctrine of fraud in conveyances . 121, 149 
 
 fraud shown by a reserved power of sale is . . . 9 
 refers to the transaction rather than the motives of the 
 
 parties 149 
 
 Creditors, rights of, fixed by rules of law, not by opinion of jury, 81 
 
 power of revocation is fraudulent as to . . . 157 
 
 See Assignment; Delay; Hindrance; Power of 
 
 Sale; Trustees. 
 
 Criticisms, of Lowell, J., upon Robinson v. SUiott ... 4 
 
 upon reservation of power of sale, in Alabama . . 101 
 
 in Maryland . 108 
 
 in Georgia . . Ill 
 
 upon the doctrine of Robinson v. Elliott, examined . 138 
 
 Davis, J., opinion of, in Robinson v. Elliott ... 4 
 
 Defraud. See Intent to Defraud. 
 
 Delay of creditors, necessary, makes conveyance fraudulent . 4, 30 
 is an actual result of a reserved power of 
 
 sale . . . . 4, 52, 54, 65, 60, 62, 69, 93 
 
 but not in Iowa 90 
 
 Delivery of Goods, by new act subsequent to mortgage, may be 
 
 valid 31, 51, 64, 144 
 
 if free from fraudulent intent .... 144 
 
 Disposal, power of, equivalent to substantial ownership, 
 
 39, 45, 47 64, 77, 79, 162 
 compared with other forms of reservation to 
 use of grantor .... 154, 165, 156, 162 
 
 Doctrine of Robinson v. Elliott, stated 2, 155 
 
 opinion of Davis, J. . . . 4 
 
 Is of English origin . . . 2, 5 
 Twyne's Case the origin of . 5 
 
 not now vital in England . 30, 31, 32 
 adopted in Indiana ... 75 
 
 in fourteen States . . 114 
 
 received with favor In others . 114 
 
 not favored in eight States . . 114 
 
272 
 
 INDEX. 
 
 SECTION 
 
 Doctrine of Bobinson v. Elliott, summary of views concerning . 114 
 
 abstract form of, stated . . 155 
 harmonizes -with legal doctrines 
 
 as to other frauds . . . 153 
 
 reasons for its existence, 
 
 122, 124, 125, 128, 129, 130, 131, 132, 155 
 testimony of observers in its sup- 
 port . 4, 69, 73, 84, 122, 131, 132 
 erroneously taken to be a doc- 
 trine of constructive fraud . 116, 118 
 not a doctrine of presumptive 
 fraud . . . . 3, 43, 61, 117 
 
 new 
 
 136 
 facts 
 
 criticised by Lowell, J. 
 criticisms upon, examined 
 objections to, stated . 
 
 examined 
 defective views of, illustrated 
 supposed qualifications of, stated 
 133, 137; 
 supposed qualifications of, con- 
 sidered . . 134,137,138 
 Doctrine of Brett v. Carter, stated 
 Doctrine of Twyne's Case, vital in America . 
 
 superseded in England 
 
 Doctrines, Legal, considered 
 
 new, called for, when substantially 
 appear .... 
 called for, when power to sell is reserved 
 only as agent for mortgagee 
 Doubtful cases, in United States courts . 
 
 in Indiana 
 
 in England 
 
 Griswold v. Sheldon, not 
 views of Twyne's Case and Edwards v. Harben 
 
 as to question of reserved power of sale, 
 in Kansas 
 in Texas . 
 in Alabama 
 in various States 
 Edwards v. Harben, facts of, stated 
 
 views of Buller, J., in 
 
 explained . 
 
 how understood in Great Britain 
 
 how misunderstood 
 
 doubtful views of . 
 
 question of possession alone not involved in 
 
 4 
 
 125, 138 
 
 115, 124 
 
 116-128 
 
 126 
 
 145, 152 
 
 145, 152 
 
 4 
 
 33 
 
 5,32 
 
 137, 153 
 
 137, 163 
 
 138, 139 
 72, 73 
 
 76 
 14, 15 
 
 40 
 25, 26 
 
 100, 114 
 
 106 
 
 101 
 
 114 
 
 9 
 
 9 
 
 28,29 
 
 28, 29 
 
 17,28 
 
 25, 26 
 
 28, 29 
 
INDEX. , 273 
 
 SECTION 
 
 Eldon, Lord, views of, concerning Twyne's Case . . . . 21, 22 
 
 Ellenborough, Lord, views of 11, 23 
 
 England, doctrine of Kobinson v. Elliott originated in . . . 2, 6 
 
 not now vital in . 30, 31, 32 
 question as to retention of possession alone, settled in 28 
 
 rule in, as to effect of registration . . . . . 123 
 
 123 
 
 1^1 
 
 6-16 
 
 reservations by grantor 
 modem doctrine in, as to legal intent 
 Englisli cases, reserved power of sale an element in 
 
 late, inconclusive 30, 31, 32 
 
 on retention of possession alone .... 17-28 
 Estoppel, the rule as to reserved power of sale is a form of . 93 
 
 and fraud often used as convertible terms ... 93 
 
 Evidence of reserved power of Sale, found outside of conveyance, 
 
 39, 41, 48, 45, 47, 48, 54, 55, 56, 66, 68 
 form of, whether in writing 
 or by parol, immaterial, 
 4, 41, 43, 52, 55, 56, 66, 120, 147, 153 
 of fraud in conveyances, what is, is a question of law, 
 
 82, 109, 145 
 if suiHcient, jury should find 
 verdict of fraud . . .81, 109 
 the fact of a reserved power of sale, is only, in Mas- 
 sachusetts 94, 96, 114 
 
 in Maine, . 97, 114 
 in Kentucky 98, 114 
 presumptive, proper office of, in considering reserved 
 
 power of sale 152. 
 
 fraud in conveyances is not a question of, 
 when power of sale is shown . 43, 60, 121, 146 
 except in North Carolina . . . 82-85 
 • in Massachusetts ,. . 96 
 
 and Maine' 97 
 
 presumption not resorted to in such cases . 3, 61, 121, 146 
 of fraud, inconsistent acts of ownership are . . . 155, 156 
 mere retention of possession is not conclu- 
 sive 17-24, 27, 28 
 
 questions of, are questions of procedure . . 2, 152, 163 
 
 Fact, a question of, agreement for power of sale is . . . 145, 146 
 
 and for jury in disputed cases . 145, 146 
 
 jury to try all questions of . . . 50, 56, 81, 82, 120, 146, 163 
 
 of fraudulent intentto be found by jury, 74, 109, 119, 137, 144, 148, 153 
 
 of fraudulent agreement, ascertainment of, a matter of pro- 
 
 'cedureonly 2 
 
 and law distinguished 3, 43, 81 
 
 J8 
 
274 INDEX. 
 
 SECTION- 
 
 Facts, jury to find all, in cases InvolviDg fraud . . . 145, 146, 153 
 mode or means of ascertaining, immaterial . . 2, 4, 153, 154 
 
 of cases control their decision, though not so stated by the 
 
 court 16, 17 
 
 and law, different elements of . 3, 74, 81, 120, 136, 137, 146, 153 
 
 and intents, fraud is the judgment of the law on, 79, 81, 83, 119 
 
 Felo de se, a conveyance becomes, with a reserved power of sale, 34 
 
 Praud, legal, defined 78, 149 
 
 power of revocation is 95 
 
 reserved power of sale is 104 
 
 reservation of privileges under assignment is . . 160 
 
 intent as to moral fraud is immaterial in considering 97 
 
 what Is evidence of, is a question of law . . . .82, 109 
 
 are indications of, is not a question for jury, 50, 81, 82, 145 
 
 is always an inference of law after the facts are proved, 
 
 2, 90, 102, 119, 120, 126; 151 
 
 is to be adjudicated by the court when self-evident . . 117 
 
 is the judgment of the law on facts and intents, 79, 81, 83, 119 
 
 ■ as shown by a reserved power of a sale, is a question of 
 
 I law . 34, 39, 40, 41, 44, 52, 54, 56, 59, 62, 69, 74, 75, 77, 78, 81 
 
 jury should find, when evidence warrants it, 81, 85, 90, 109, 123 
 
 reserved power of sale is an inlet to 80 
 
 is an easy means of . . . m 
 
 opens a door to . . . 38, 60, 61 
 at common law, reserved power of sale was ... 90 
 
 and es'toppel often used as convertible terms ... 93 
 
 attempt at classification of, in North Carolina . . .83, 84 
 See Actual Fraud; Constructive Fraud; Presump- 
 tive Fraud. 
 
 Fraud in Conveyances, classified 119 
 
 is one form of actual fraud . . . 117, 118 
 is a rule of jurisprudence .... 121, 122 
 of the common law . . .70, 90 
 similar to the ancient covin . 121, 149 
 is not a rule of procedure .... 121 
 
 is a question of law after the facts are set- 
 tled . 2, 38, 39, 45, 50, 56, 62, 79, 81, 82, 90, 102, 
 117, 119, 120, 126, 151 
 is always a question of law, 81, 119, 120, 145, 146, 151 
 is, in a certain sense, a question of fact 
 
 also 119^ 120 
 
 is not a question of presumptive evidence, 
 
 43, 60, 121, 146 
 
 except in North Carolina . . , 82-85 
 
 is a question of legal intent . . 39, 97, 151 
 
INDEX. 
 
 275 
 
 SECTION 
 
 Fraud in Conveyances is the judgment of the law on facts and 
 
 intents ...'.. 79, 81, 83, 110 
 office of court, when the facts are found, 
 
 102, 117, 145, 146, 151 
 mode or means of ascertaining facts im- 
 material 120, 147, 153' 
 
 may be proved by implication ... 147 
 duty of jury to ilnd, when evidence war- 
 rants it 81, 109 
 
 what is evidence of, is a question of law, 
 
 82, 109, 145 
 characteristics of transaction to be ascer- 
 tained 121 
 
 how tested 146 
 
 refers to the transaction itself, 
 
 48, 62, 79, 119, 121, 149 
 not to the motives of the parties, 119, 121, 149 
 actual intent immaterial, in determining 
 
 the question of . 52, 95, 97, 109, 148, 151, 159 
 
 motives of parties immaterial . 109, 148, 149, 151 
 
 even though pure, 69, 62, 77, 84, 109, 148 
 
 registration does not relieve from . . 32, 123 
 
 is a question independent of bankruptcy 
 
 statutes 68, 71 
 
 makes no distinction between absolute and 
 
 conditional sales 
 
 is an immaterial question, if there be a 
 valid subsequent transaction between 
 
 the parties 
 
 is a question of intent in Kentucky . 
 in Texas 
 unless appearing on face 
 of deed 
 is fatal in Iowa, in conveyances other than 
 those involving reserved power of sale 
 general views concerning, in Iowa . 
 
 Traud in fact an ambiguous expression 
 
 and actual fraud, not synonymous terms . 
 and fraud in law, confusion of the terms 
 
 -Fraud in law an ambiguous expression 
 
 and actual fraud not antithetical terms 
 and constructive fraud not synonymous terms 
 and fraud in fact, the terms confused 
 a question of presumptive evidence in North Caro- 
 lina 82-85 
 
 7, 99 
 
 144 
 
 98 
 
 103 
 
 103 
 
 92 
 
 93 
 
 3 
 
 3,118 
 
 82 
 
 3 
 
 118-122 
 
 3, 118 
 
 82 
 
276 i>'DEx. 
 
 SECTION- 
 
 Fraud In law, clifBculty .as to respective provinces of court and 
 
 jury 82, 84, 85 
 
 attempt to solve the difficulty in North Carolina , 83, 84 
 FraudinMortgagesof Merchandise, the question concerning, stated ^ 1 
 
 a question of law ... 2 
 
 is not presumptive fraud 3, 43, 61, 117 
 is not constructive fraud 3, 43, 117 
 illustrated in the opinions of 
 
 the courts . . 69, 122, 131, 132 
 deprives mortgagee of all rights 
 
 under the conveyance . . 143 
 
 is always held in Michigan to 
 rest in Intent, ... 88 
 
 See Doctrine op Robinson v. Elliott; Mortgagee; Power 
 OF Sale. 
 Fraudulent Agreement. See Agreement. 
 
 Fraudulent Intent, distinguished from actual fraud . . . 119, 120 
 
 from legal Intent 148, 149, 150, 151, 153 
 
 from fraudulent tendency . . 2, 78 
 
 not a necessary element of Twyne's Case . 5 
 
 in Nebraska, a question of fact In some cases 87 
 
 a question of law in others . 87 
 
 the statute says, shall be a question of fact. 
 
 In Indiana ... 74 
 
 In Michigan ... 88 
 
 In New York . . 74, 151 
 the statute as to, is not a statute as to con- 
 structive fraud . . 74 
 does not affect the question 
 
 of legal fraud . . 74,75,151,153 
 
 except In Michigan . . 88 
 
 and there in but one class of 
 
 cases .... 88 
 
 is the Important question. In considering a re- 
 
 , served power of sale, in Massachusetts . 96, 114 
 
 In Kentucky . . 98 
 
 in Kansas . . . 100 
 
 is sometimes imputed as a necessary feature of 
 
 a reserved power of sale . . .4, 39, 51, 151 
 is a proper matter of inquiry In cases of simple 
 
 preference of a creditor .... 144 
 may be inferred from acts, agreements, and cir- 
 cumstances 30, 39, 45, 51, 62 
 
 the existence of, a question for the jury, 
 
 53, 74, 87, 109, 119, 137, 144, 148, 15a 
 
INDEX. 277 
 
 SECTIOX 
 
 Fraudulent Tendency may, in law, render a mortgage fraudulent, 2, 5, 78 
 
 a fatal feature of Twyne's Case ... 5 
 a necessary feature of a reserved power of 
 
 sale . 44, 64, 55,- 67, 60, 63, 64, 77, 78, 79, 80, 131 
 
 distinguished from fraudulent intent . . 2, 78 
 equivalent in its effects to any other form of 
 
 fraud 78 
 
 Georgia, statute in, allows mortgages on stocks of goods in trade 70, 111 
 
 limited in its application by the courts . . Ill 
 otherwise it would open a door to unlimited 
 
 fraud Ill 
 
 applied as a rule of property in the United 
 
 States court 70 
 
 Griswold v. Sheldon not a doubtful case 40 
 
 7 
 157 
 
 Hardwicke, Lord, views of, as to reserved power of sale 
 views of, as to power of revocation . 
 Hindrance to Creditors, actual, reserved power of sale is, 
 
 4, 62, 64, 66, 60, 62, 69, 93, 108 
 
 except in Iowa .... 90 
 
 Holt, Lord, dictum of, in Meggot v. Mills 19 
 
 Illinois, decisions in 64, 55 
 
 Implication, Power of Sale proven by. See Power of Sale. 
 
 Indiana, decisions in 74, 76 
 
 statute of, says fraudulent intent shall be a question of 
 
 fact 74 
 
 doubtful cases in 76 
 
 doctrine of E. ■«. E. adopted in 75 
 
 Inlet to fraud, reserved power of sale furnishes an . . . 80 
 
 Intent to defraud. See Fraudulent Intent. 
 Intent, immaterial, if act be in itself fraudulent, 
 
 62, 95, 97, 109, 148, 149, 151, 159 
 
 If a power of revocation be reserved . . 95 
 
 if the use of consumable property be reserved 169 
 
 if a power of sale be reserved, 41, 46, 52, 53, 57, 69 
 
 62, 63, 74, 77, 78, 79, 84, 121, 129, 148, 161 
 
 purity of, does not avail .... 59, 62, 77, 84, 109, 148 
 
 to defraud, imputed as a necessary feature of a reserved 
 
 power of sale 4, 39, 51 
 
 is not the same question as that of a reserva- 
 tion of power of sale, when construing at- 
 tachment laws 63 
 
 See Fraudulent Intent; Legal Intent. 
 
278 INDEX. 
 
 SECTION 
 Interest in Eeal Estate. See Real Estate. (158.^ 
 Iowa, statute in, makes registration equivalent to actual delivery, 90, 114 
 
 changes common -law rules 90 
 
 effect of, explained by the courts ... 93 
 fraud in conveyances a question of law in, after 
 
 facts are proved 90 
 
 mortgages with reserved power of sale held valid 
 
 in 91 
 
 views in, as to reserved power of sale, examined 92 
 
 as to other frauds in conveyances . 93 
 rule in, not taken as a rule of property in U. S. 
 
 court 70 
 
 Jurisprudence, fraud in conveyances is a matter pertaining to, 121, 122, 154 
 
 deals primarily with rules of substantive law, 135, 136, 153 
 
 questions of procedure are subordinate to . 136, 136, 154 
 
 the doctrine of Robinson v. Elliott a rule of . . 121, 154 
 
 Jury and court, different provinces of . 50, 82, 84, 8.5, 103, 109, 120, 146 
 
 to try all questions of fact ... 50, 56, 81, 82, 120, 146, 153 
 
 question of existence of a fraudulent intent, 
 
 74, 119, 137, 144, 148, 153 
 question of intent as shown by mere possession . . 109 
 
 , question of existence of agreement for reserved power 
 
 of sale 145, 146 
 
 but not question of indications of fraud arising there- 
 from 50, 81, 82, 145 
 
 should find verdict of fraud, when evidence warrants it, 
 
 85, 90, 109, 120 
 
 are urged to do so, in Nor.h Carolina 84, 85 
 
 opinions of, not to determine the rights of creditors . . 81 
 
 exception to this rule, in Alabama . 101 
 
 in Maine ... 97 
 
 no question for, when reserved power of sale 
 
 clearly appears . . . .39, 41, 42, 56, 74 
 are to draw all inferences of fraud, 
 
 in Maine ... 97 
 
 in Alabama . . lOl 
 
 Kaleidoscope, mortgage on stock of goods in trade compared to 
 Kansas, views in, respecting reserved power of sale . 
 
 the rule in, left in doubt .... 
 Kent, Chancellor, opinion of, as to power of revocation 
 Kentucky, reserved power of sale as considered in 
 
 only a badge of fraud in 
 
 questions of fraud in, as shown by mere possession 
 Kenyon, Lord, opinion of, as to reserved power of sale 
 
 46, 131 
 
 100 
 
 100, 114 
 
 167 
 
 98 
 
 98, 114 
 
 99 
 
 10 
 
INDEX. 
 
 279 
 
 SECTION 
 
 Law consists of priuciples, not cases 136 
 
 and fact, distinguished 3, 43, 81 
 
 different elements of . 3, 74, 81, 120, 136, 137, 146, 153 
 offices of. . . . 81,136,137,146,163 
 See Common Law; Fraud; rRAUD in Conveyances; 
 Fraud In Law; Procedure; Substantive Law. 
 Legal Doctrines. See Doctrines. 
 
 Legal Fraud, defined 78, 149 
 
 See Assignment ; Fraud ; Fraud in Law ; Fraud 
 IN Conveyances. 
 
 liCgal Intent, explained 148, 161 
 
 illustrated 151, 153 
 
 at common law ........ 149 
 
 generally • . 151 
 
 is the intent to accomplish the natural effect of one's 
 
 acts 80, 62, 79, 81, 84, 97, 151 
 
 and intent to defraud, distinguished, 148, 149, 150, 151, 153 
 
 the distinction ovei-looked 150 
 
 fraud in conveyances held to present a question of , 39, 97, 151 
 is the intent referred to in the statute 13 Eliz. . 151 
 
 Lien, reserved power of sale creates fluctuating, not absolute, 
 
 41, 47, 62, 131 
 
 certainty of, essential to a mortgage . . . .69, 126, 137 
 
 mortgagee loses, if lie license sales ' . .■ 31,34 
 
 loses only his 144 
 
 may preserve, by controlling pro- 
 ceeds of all sales . . .4, 38, 60, 138 
 
 Louisiana, chattel mortgages unknown in 113 
 
 Lowell, Judge, criticisms of, upon doctrine of Eobinsoni). Elliott, 4 
 
 same examined .... 125 
 
 Maine, mortgages with reserved power of sale in common use in, 
 present cases of presumption, in 
 cases. Story's view of, examined .... 
 Mansfield, Lord, views of, as to reserved power of sale 
 
 as to reservations for benefit of debtor. 
 Sir James, views of, as to reservation of control by 
 debtor .... 
 as to mere retention of possession; 
 Maryland, the question of reserved power of sale not discussed in 
 
 such mortgages of occasional occurrence in 
 Massachusetts, mortgages with reserved power of sale in common 
 
 use in 
 
 reserved power of sale only a badge of fraud in 
 
 presents a question of 
 fraudulent intent, in 
 
 97 
 
 97, 144 
 
 73 
 
 8 
 
 20 
 
 12 
 
 24 
 108 
 108 
 
 94, 
 
 96 
 114 
 
 96, 114 
 
280 INDEX. 
 
 SECTIOX 
 
 Massachusetts, reserved power of sale may raise a stronger pre- 
 sumption of fraud, in 96 
 
 inharmonious decisions in 95 
 
 cases, Story's view of, examined .... 73 
 
 the rule in, taken as a rule of property in the U. S. 
 
 court 4, 73 
 
 Merchandise. See Chattel Mortgage ; Mortgagee; Fraud 
 
 IN Mortgages; Power of Sale. 
 Michigan, mortgages with reserved power of sale in common use in 89 
 
 uniformly held 
 
 valid in . . 89 
 
 though liable to 
 
 abuse in . . 88 
 
 fraud therein, al- 
 ways rests in 
 intent, in . 88, 114 
 fraud an inference of law in, after facts are proved . 151 
 
 statute of, says fraudulent intent shall be a question of 
 
 fact 88 
 
 applies to such mortgages .... 88 
 
 but not to other cases of fraud in 
 
 conveyances 88 
 
 Minnesota, decisions in 60, 51 
 
 Mississippi, decisions in 62-64 
 
 Missouri, decisions in - 56-58 
 
 the rule in, taken as a rule of property in the U. S. Court 68, 70 
 
 Mitchell V. Winslow, views of Story, J., in 73 
 
 Mortgage, essentials of a 69, 127 
 
 may be rendered fraudulent by its fraudulent tendency, 2, 5, 78 
 See Chattel Mortgage. 
 Mortgagee has no rights under a conveyance adjudged fraudulent. 143 
 
 cannot seize goods under mortgage with reserved 
 
 power of sale 61, 62, 143 
 
 loses lien if he license sales 31, 34 
 
 suffers only loss of his lien thereby .... 144 
 
 may preserve lien by controlling proceeds of all sales 
 
 made 4, 36, 60, 188 
 
 trustee must act solely for benefit of . . . .12, 141 
 sales made by mortgager mqrely as agent ,of, and for 
 
 benefit of, sustained, 35, 36, 41, 43, 46, 49, 58, 57, 
 
 68, 75, 97, 104,137, 138, X39, 140 
 
 if free from fraudulent intent . . .53, 87 
 
 this a fundamental distinction . . . 139 
 
 may acquire right to goods by new act of delivery from 
 
 mortgager .... 31, 51, 64, 144 
 
 if it be free from fraudulent intent . . 144 
 
INDEX. 281 
 
 8ECTI0N 
 
 Mortgagee, mortgager sells as qttasi agent for, in Kansas . . 100 
 See Agent for Mortgagee; Fraud in Mortga- 
 ges; Power OP Sale; Trustee. 
 
 Mortgager. See Assignee ; Benefit ; Moetgagbe ; Power of 
 Sale. 
 
 Motive. See Intent. 
 
 Nebraska, decisions in, as to reserved power of sale ... 87 
 mortgager's agency for mortgagee not sustained in, 
 
 unless free from intent to defraud .... 87 
 statutes in, make all mortgages of chattels without de- 
 livery presumptively fraudulent .... 87 
 Nevada, mortgages of chattels limited in . : . . . 112 
 New Hampshire, decisions in, on reserved power of sale . . 44-46 
 New Jersey, general rules in, respecting fraud in conveyances . 109 
 New York, decisions in, on reserved power of sale . . . 88-43 
 
 the question settled in 43 
 
 North Carolina, decisions in, as to fraud in conveyances generally 82 
 
 as to reserved power of sale . . 84 
 
 attempt at classification of fraud in . . . 83, 84 
 reserved power of sale a question of presumptive 
 
 evidence, in 82-86, 114 
 
 Observers, testimony of, as to effect of reserved power of sale, 
 
 4, 69, 73, 84, 122, 131, 132 
 
 Ohio, decisions in 47-49 
 
 Opera House, business of, managed by mortgager of, fraudulent . 12 
 
 Oregon, decisions in 66 
 
 Ownership of property not separable from liability for debts. 12, 161, 162 
 acts of, inconsistent with the idea of se- 
 curity for debt . 10, 12, 44, 77, 79 
 are the evidence of fraud . .155,156 
 effect to be given to, to show the 
 
 fraud 7, 8, 13 
 
 reservation of power of appointment 
 
 amounts to assertion of . . . 16'- 
 power of disposal equivalent to, 
 
 39, 45, 47, 54, 77, 79, 162 
 reserved power of sale invalid in England, 
 if tantamount to 123 
 
 Pennsylvania, decisions in 77, 78 
 
 Pledgee of property loses his security by leaving it in hands of 
 
 pledger 96 
 
 Policy of the law, reserved power of sale condemned by, 44, 47, 54, 65, 61 
 
 public, reserved power of sale condemned by . . 61, 68, 128 
 
 in Vermont, as to possession under conveyances 110 
 
282 INDEX. 
 
 SECTION 
 
 Policy of allowing reserved power of sale, considered . . • 124 
 
 effect of, stated . . 124, 125 
 arguments for . . 90, 124 
 examined . 92 
 
 answered . 125 
 
 defective views con- 
 cerning . . . 126 
 judicial views against 
 
 130, 131, 132 
 Possession, mere, distinguished from possession with power of 
 
 sale ■t, 5, 20, 29, 54, 124 
 
 not fraudulent ;9er se .... 17-24,27 
 
 uniitiportant as evidence of fraud . . 17', 20, 28 
 
 controversy over effect of 5 
 
 erroneous views concerning .... 5 
 
 effect of, a question for a jury .... 109 
 
 English cases involving 17-28 
 
 question of, settled in England ... 28 
 
 not involved in Edwards v. Har- 
 
 ben ,....- 28 
 
 dictum of Lord Holt concerning . ... 19 
 
 Twyne's Case did not turn on . . .5, 17, 21, 22 
 
 views of Buller, J., as to 29 
 
 only a circumstance . 22, 23, 27, 29, 34, 79, 99, 109 
 an unsettled question in Kentucky ... 98 
 no real distinction between absolute and con- 
 ditional sales, as to 7, 99 
 
 delivery of , by mortgager, validates transaction. 31, 51, 64, 144 
 
 but must not be 
 
 colorably for 
 
 grantor's b e n - 
 
 eflt . . . 59, 60 
 
 nor vrtth intent to 
 
 defraud . . 79, 144 
 seizure of, by mortgagee who has allowed mortgager 
 a power of sale, confers no title . . .51, 52, 143 
 Power of Appointment. See Appointment. 
 Power of Disposal. See Disposal. 
 Power of Revocation. See Revocation. 
 
 Power of Sale, Reserved, controversy over effect of . . . 1, 2, 4 
 distinguished from mere retention of 
 
 possession . . . 4, 5, 20, 29, 64, 124 
 
 effect of, stated . 4, 6, 34, 93, 122, 128, 131 
 
 was a feature of Twyne's Cnse . 5, 6, 7, 16 
 
 an element in several English cases 5-13 
 
INDEX. 283 
 
 „ . „ , „ SECTION 
 
 Power of Sale, Reserved, is Invalid in England, if tantamount to 
 
 ownership 123 
 
 characteristics of, as seen by the courts, 
 
 34, 47, 69, 73, 84, 122, 130, 131, 132 
 is fraudulent per se, 
 
 35,37,40,41,45, 62, 67, 84, 155 
 is conclusively fraudulent ... 69 
 
 was fraudulent at common law . . 70, 90 
 the common-law rule changed by 
 
 statute in Iowa ... 90 
 
 exhibits actual fraud, 
 
 9, 43, 62, 60, 78, 84, H7, 120, 121, 129, 131 
 
 Is well-deflned legal fraud . . . 104 
 
 is not presumptive fraud . . 3, 43, 61, 117 
 
 except in Mass. 96 
 
 Me. 97 
 
 N. C. 82-85 
 
 is condemned by public policy . 61, 68, 128 
 
 by the policy of the law, 
 
 44, 47, 64, 55, 61 
 policy of, considered .... 124 
 
 judicially condemned . 130, 131, 182 
 opens a door to fraud ... 38, 60, 61 
 is an inlet to fraud .... 80 
 
 furnishes an easy means of fraud . Ill, 132 
 
 has a fraudulent tendency, 
 
 44, 54, 65, 67, 60, 63, 64, 77, 78, 79, 80, 131 
 has a deceptive character ... 8, 131 
 is liable to abuse . . 88, 90, 100, 101, 132 
 is collusive and covinous ... 9 
 
 gives delusive credit . . . . 4, 7, 8 
 makes conveyance felo de se . . , 34 
 
 a kaleidoscope . . 45, 131 
 is inconsistent with the idea of security, 
 4, 10, 34, 35, 37, 41, 45, 47, 48, 50, 69, 60, 67, 
 69, 74, 84, 127, 131 
 is no real security . . 4, 7, 8, 34, 47, 69, 127 
 is not a mortgage in fact, 34, 41, 47, 69, 127 
 
 creates fluctuating or shifting, not abso- 
 lute, lien .... 41, 47, 62, 131 
 is equivalent to a power of revocation . 34, 35 
 is equivalent to absolute ownership 
 
 39, 46, 47, 54, 77, 79, 162 
 Is only a personal security . . .34, 47 
 is a mere expression of trust and con- 
 fidence . . . . 4,39,45,47,69,138 
 
284 INDEX. 
 
 SECTION 
 
 Power of Sale, Reserved, is a ward to keep off creditors . 4, 47, 69 
 
 actually Injures creditors, 
 
 i, 52, 54, 55, 60, 62, 69, 93, 108 
 and benefits grantor, 
 
 4, 37, 41, 45, 48, 60, 62, 63, 69, 77 
 for one day, vitiates the transaction . 10 
 
 the fraud in, is a question of law, 34, 39, 40, 41, 
 44, 52, 54, 56, 59, 62, 69, 74, 75, 77, 78, 81 
 agreement for, is a question of fact . 145, 14C 
 for a jury in disputed cases. 50, 72, 145, 14G 
 mode or means of proof of, immaterial, 
 
 4, 41, 43, 62, 55, 56, 66, 120, 147, 153 
 may be ascertained by implication, 
 
 35, 87, 56, 57, 67, 68, 75 
 proved by evidence aliunde, 
 
 39, 41, 43, 45, 47, 48, 54, 65, 66, 68 
 intent of parties immaterial, 41, 45, 52, 53, 57, 
 59, 62, 63, 74, 77, 78, 79, 84, 121, 129, 148, 151 
 though their motives are pure, 
 
 59, 62, 77, 84, 109, 148 
 intent to defraud sometimes imputed as 
 
 a necessary feature of . .4, 39, 51, 151 
 importance of the question sometimes 
 
 overlooked 5, 9, 126 
 
 does not depend on lan- 
 guage used by courts . 16 
 vitiates a conditional sale . . 42, 61, 79 
 sale under, passes title to vendee, 
 
 31, 34, 54, 60, 109, 142 
 registration does not validate, 
 
 4, 6, 32, 50, 54, 66, 87, 123 
 mortgagee's assumption of possession 
 
 does not validate . . . 61, 52, 143 
 colorable possession by mortgagee 
 
 does not validate .... 11 
 is valid, if it be only as agent for mort- 
 gagee, 35, 36, 41, 43, 46, 49, 53, 57, 58, 75, 97, 
 104, 137, 138, 139, 140 
 this distinction is fundamental . . 139 
 is not valid, if there be only an agree- 
 ment to account for sales ... 9 
 or to pay debt out of proceeds, 77 
 rules for, are furnished by cases of re- 
 servation of use of consumable prop- 
 erty 44, 169 
 
INDEX. 
 
 285 
 
 SECTION 
 
 68 
 
 84 
 
 88, 89 
 
 90,91 
 
 114 
 
 101 
 
 108 
 
 111 
 
 96 
 
 91 
 
 89 
 
 97 
 
 108 
 
 94 
 
 97 
 
 Power of Sale, Keserved, the fraud in, Is not the same question 
 as intent to defraud in the sense of 
 the attachment laws .... 
 difficulties concerning, in N'th Carolina 
 is favored, in Michigan . 
 in Iowa 
 in eight States 
 is criticised in Alabama 
 in Maryland 
 in Georgia . 
 is common in Massachusetts 
 in Iowa . 
 in Michigan . 
 in Maine 
 is of occasional occurrence in Mary- 
 land .... 
 is only a badge of fraud, in Massachu- 
 setts .... 
 
 in Kentucky 98, 114 
 is to be tested by jury, in Massachusetts, 94, 96 
 in Maine 
 also in Alabama 
 if not shown 
 by the instru- 
 ment, 
 is treated in Kansas as turning on good 
 
 faith lOO 
 
 is fatal in Texas, before a court . . 104, 114 
 not before a jury . 105, 114 
 is prohibited in Texas by statute . . 106, 114 
 Presumption not resorted to in such cases as Bobinson v. Elliott, 
 
 3, 61, 121, 146 
 
 except in Massachusetts ... 96 
 
 in Maine . . . .97, 114 
 
 and North Carolina . . 82-86 
 
 Presumptive E'^dence. See Evidence. 
 
 Presumptive Fraud and constructive fraud, considered 
 
 terms defined . 
 
 confounded 
 
 distinguished, 117, 119 
 
 and fraud in law not synonymous terms . 118 
 
 fraud in mortgages of merchandise not, 3, 43, 61, 117 
 
 is erroneously supposed 
 
 to be . . . 116, 118 
 
 101 
 
 116 
 119 
 117 
 
286 INDEX. 
 
 SECTIOX 
 
 Privileges, reservation of, under assignments for creditors, a legal 
 
 fraud, 160 
 immoral 
 and dis- 
 honest . 160 
 Procedure, questions of, and those of substantive law, distin- 
 guished . . . 1,2,43,51,62,56,136,136,146,134 
 modes of, immaterial, in considering rules of sub- 
 stantive law 2, 4, 147, 154 
 
 mode of ascertaining fraudulent agreement is a ques- 
 tion of 2, 146 
 
 questions of, as to fraudulent conveyances, classified, 1 
 
 questions as to evidence are questions of . .2, 152, 153 
 Proof of fraudulent agreement, mode or means of, inunaterial, 
 
 4, 43, 147, 163 
 See Evidence. 
 Property, Rule of, in the U. S. Court, the rule In the State court 
 
 is a, in Massachusetts 4, 73 
 
 in Georgia 70 
 
 in Missouri 68, 70 
 
 not in Iowa 70 
 
 Property, Consumable. See Consumable Property. 
 Purchasers and creditors, power of revocation fraudulent as to 
 both 157 
 
 Qualifications, supposed, of the doctrine of Robinson v. Elliott, 
 
 stated . . . 133, 137, 145, 152 
 considered . . 134, 137, 138, 145, 152 
 
 Real Estate, reservations of interest in, are fraudulent . . 92, 158 
 Registration does not validate a reservation of a power of sale, 
 
 4, 5, 6, 32, 50, 54, 66, 87, 123 
 does not relieve from fraud in conveyances . . 82, 123 
 immaterial in considering questions of fraud 4, 54, 66, 87 
 
 true ofilce of 123 
 
 views of office of, by Lowell, J. . . . . 4 
 
 is by statute equivalent to actual delivery, in Iowa . 90, 114 
 
 not in Minnesota, 60 
 
 or New York, 60 
 
 or Nebraska, 87 
 
 of conveyances of chattels under English statutes . 32 
 
 Reservations, fraudulent, forms of, other than power of sale . 154-162 
 
 general principles as to . . . 154 
 
 fUfferent forms of, stated . . . 1,56 
 
INDEX. 
 
 287 
 
 157 
 
 157 
 
 92 
 
 158 
 
 159 
 
 SECTION 
 
 Reservations, fraudulent, compared with power of disposal, 
 
 154, 155, 156, 162 
 by debtor for his benefit are fraudulent per se . 44,162 
 
 are inconsistent with idea 
 
 of security . . . 162 
 
 of power of appointment amount to assertions of 
 
 ownership 161, 162 
 
 held fraudulent . . 161 
 
 of power of revocation, fraudulent at common law, 157 
 
 as to both creditors and 
 
 purchasers 
 poison the transaction 
 of use of land, fraudulent .... 
 of interest in land", fraudulent .... 
 of use of consumable property, fraudulent, 
 
 44, 59, 63, 95, 102, 159 
 secure benefits to 
 
 debtor 
 furnish rules for re- 
 served power Qf 
 sale 
 of rights or privileges under assignments for credi- 
 tors, are legal frauds 
 
 are immoral and dishonest 
 Bevocation, power of, characteristics of, considered . 
 
 a legal fraud 
 
 fraudulent at common law 
 
 as to both creditors and pur. 
 
 chasers .... 
 irrespective of intent 
 poisons the transaction throughout . 
 reserved power of sale equivalent to 
 opinion of Chancellor Kent concerning 
 Rhode Island, the question of reserved power of sale not consid 
 
 ered in 
 
 Rights, reservation of, under assignments for creditors, a legal 
 
 fraud 
 
 immoral and dishonest 
 Robinson B. Elliott. See Doctkine of R. ■«. E. 
 Ryall V. Rowles, salient features of . . . . . 
 
 44, 1^9 
 
 30, 160 
 
 160 
 
 157 
 
 95 
 
 157 
 
 157 
 
 95 
 
 157 
 
 34, 35 
 
 157 
 
 107 
 
 160 
 160 
 
 Sale. See Agent of Mortgagee; Conditional Sale; Mort- 
 gagee; Power of Sale. 
 Sales, mere agreement to account for, does not validate a mort- 
 gage with reserved power of sale .... 9, 35, 39 
 
288 INDEX. 
 
 SECTION 
 
 Sales, no real distinction between absolute and conditional, as to 
 
 fraudulent reservations 7, 99 
 
 mortgager makes, in Kansas, as quasi agent of tlie mort- 
 
 gagee 
 
 100 
 
 assignee or mortgagee must control proceeds of . 4, 36, 60 
 
 Security, mortgage with power of sale reserved is not a real, 
 
 4, 7, 8, 34, 47, 69, 127 
 
 is delusive as a . . . 7, 8 
 
 is only a personal . . .34, 47 
 
 not consistent with the idea of, 
 
 4, 10, 34, 36, 37, 41, 45, 47, 48, 60, 69, 60, 67, 69, 74, 84, 127, 131 
 
 acts of ownership are inconsistent with the idea of . 77, 79 
 
 reservations of control are inconsistent with the idea of, 162 
 
 Stare decisis, importance of rule of . ' 91 
 
 State Court. See Property, Eulb op. 
 
 Statute of 13 Eliz. is merely declaratory of the common law 5, 7, 167 
 refers to a legal, not a moral Intent . . 151 
 of 27 Eliz. is merely declaratory of the common law, . 157 
 of bankruptcy, fraud in conveyances is a question inde- 
 pendent of 68, 71 
 
 providing that fraudulent intent shall be a question of fact 
 is not needed in order to make 
 it such . . .74, 76, 151, 163 
 is merely declaratory of the law, 74 
 
 is not a statute as to construc- 
 tive fraud .... 74 
 does not limit power of court as 
 to fraud inherent in a con- 
 veyance . . .74, 76, 153 
 except in Michigan, in cases of 
 
 reserved power of sale . . 88 
 
 and not in other cases in that 
 
 State 88 
 
 cannot prevent all fraudulent 
 
 conduct 92 
 
 of Iowa makes registration equivalent to actual delivery, 90, 114 
 
 of Minnesota does not 50 
 
 of New York does not 50 
 
 of Nebraska does not g7 
 
 of Iowa changes common-law rule 90 
 
 • judicial explanation of 93 
 
 does not change common-law rule in other States . 60, 54, 06 
 
 of Georgia allows mortgages on stocks of goods in trade, 70, 111 
 
 taken as a rule of property in the U, S. court, 70 
 
INDEX. 289 
 
 SECTION 
 
 Statute of Nebraska makes all mortgages of chattels without de- 
 livery, presumptively fraudulent 87 
 
 of Texas prohibits mortgages on stocks of goods in 
 
 trade 106 
 
 limits mortgages of chattels, in California and Nevada . 112 
 
 Story, Judge, views of, in Mitchell v. Winslow, as to reserved 
 
 power of sale 73 
 
 definition of constructive fraud by ... . 3 
 
 Substantive law and Adjective law, distinction between, 
 
 1, 2, 48, 51, 52, 56, 135, 136, 146, 154 
 modes or means of procedure are immaterial, in 
 
 considering questions of . . . . 2, 4, 147, 154 
 the controverted questions are questions of . 1 
 
 See Jurisprudence. 
 Summary of the views of the respective State courts, on the sub- 
 ject of mortgages of merchandise . . . 114, 122 
 
 Tendency. See Fraudulent Tendency. 
 
 Tennessee, decisions in 69, 61 
 
 Tenterden, Lord, views of, on the subject of mere possession . 27, 28 
 Testimony of judicial observers as to effects of reserved power 
 
 of sale . . . . 4, 34, 47, 69, 73, 84, 122, 13X, 13?, 
 Texas, statute in, prohibits mortgages with reserved power of 
 
 sale . . 106, 114 
 
 fraud in conveyances a question of intent in . . . 103 
 
 unless appearing on face of deed . 103 
 
 reserved power of sale fatal in, before a court . . . 104, 114 
 
 not conclusive before a jury . . 105, 114 
 
 Title passes to vendee, if mortgager exercise power of sale, 
 
 31, 34, 54, 60, 109, 142 
 Transaction between parties tested, as to fraud, by its character- 
 istics .... 120, 121, 122, 131 
 •" fraud refers to, rather than to mo- 
 
 tives of parties . 43, 62, 79, 119, 121 149 
 new, between parties. See Delivery. 
 Trust, expression of, mortgage with reserved power of sale is 
 
 merely an . . . . i, 39, 45, 47, 69, 138 
 Trustees under conveyance made as security must act of them- 
 selves . . 12, 35 
 in good faith . 141 
 for benefit of se- 
 cured creditor . 12, 141 
 and control pro- 
 ceeds of sales . 4, 36, 60 
 19 
 
290 INDEX. 
 
 SECTION 
 
 Trustees under conveyance made as security must not take a col- 
 orable posses- 
 sion . . .59, 60 
 for grantor's 
 benefit . 69, 60 
 nor collude with 
 
 grantor . . 141 
 
 assumption of pos- 
 session by, will 
 be valid if free 
 from fraudulent 
 intent . . 79 
 
 may make grantor 
 their agent, 35, 36, 41, 43 
 46, 49, 53, 57, 58, 75, 97, 
 104, 137, 138, 139, 140 
 but In Nebraska 
 must show such 
 agency to be free 
 from fraudulent 
 intent . . 87 
 
 Twjme's Case, mistaken views of 2, 4, 5 
 
 . did not turn on the question of mere possession, 
 
 5, 17, 21, 22 
 did not present constructive fraud ... 5 
 
 exhibited actual fraud ...... 5 
 
 fraudulent tendency .... 5 
 
 reserved power of sale a prominent feature of, 5, 6, 7, 16 
 was tested by its characteristics .... 122 
 
 fraudulent intent not a necessary feature of . . 5 
 
 the doctrine of, vital in America .... 33 
 
 the origin of the American doctrine ... 5 
 
 doubts as to ' . . 25, 26 
 
 Buller's synopsis of 21 
 
 Lord Eldon's views of 21, 22 
 
 Burnet's views of 7 
 
 superseded in England 5,32 
 
 United States Courts, decisions in 68-73 
 
 dissenting opinions in .... 4, 72 
 
 S?e Property, Rule of. 
 
 TJse only, of mortgaged ch.ittels, not fraudxdent in itself, 
 
 17, 23, 26, 27, 28, 39 
 
INDEX. 291 
 
 SECTION 
 
 Vendee. See Title. 
 
 Verdict, court may direct, in some States, when a reserved power 
 
 of sale appears 41 , 42 
 
 but not where the fact of its existence 
 
 is disputed 72 
 
 jury should find, of fraud, when evidence warrants it, 
 
 85, 90, 109, 123 
 are urged to do so, in North Carolina . . .84, 85 
 Vermont, the peculiar doctrine in, of constructive fraud In con- 
 veyances 110 
 
 a rule of public policy 110 
 
 the question of fraud arising from a reserved power of 
 
 sale not a practical one in 110 
 
 Virginia, decisions In, as to reserved power of sale . . . 34-37 
 as to use of consumable property, not har- 
 monious 159 
 
 West Virginia, decisions in 67 
 
 Wisconsin, decisions in 52, 63 
 
CASES CITED. 
 
 [JJ^ereraces are to sections.'] 
 
 SECTION 
 
 Abbey, Harman v., 7 Ohio St. 218. 
 
 48, 147. 
 Abbott V. Goodwin, 20 Maine, 408. 
 
 73, 97, 140. 
 Acker, Smith v., 23 Wend. 653. 
 
 39, 50. 
 Adams v. Niemann, 46 Mich. 135. 
 
 89. 
 Addingten v. Etheridge, 12 Grat. 
 
 436. 35. 
 
 Adler v. Claflin, 17 Iowa, 89. 90, 140. 
 Aird, Lukins v., 6 Wall. 78. 93, 158. 
 Alexander, Eea v., 5 Ired. Law, 
 
 644. 81, 119. 
 
 Allard, Ex parte, 16 Ch. D. 505. 31. 
 Allen ti. Goodnow, 71 Me. 420. 97. 
 Allen 17. McCalla, 25 Iowa, 465. 91. 
 Allen V. Smith, 10 Mass. 308. 95. 
 
 Alford, Scott v., 53 Tex. 82. 
 
 105, 106, 150. 
 Alston, Power v., 93 111. 587. 151. 
 Alston, Ravisies v., 5 Ala. 297. 102, 
 
 159. 
 Anderson, Bank v., 24 Minn. 435. 
 
 51, 144. 
 Anderson, Hedman v., 6 Neb. 392. 
 
 87, 126. 
 Anderson v. Howard, 49 Ga. SI 3. 
 
 111. 
 
 Anderson, Massoni)., 3 Bax. 290. 159. 
 
 Anonymous, Dyer, 295. 157. 
 
 Anonymous, Lane, 22. 157. 
 
 »Applegate, Oliver v., 5 N. J. L. 
 
 479. 109. 
 
 SECTIOir 
 
 Armstrong v. Baldock, 1 Niel 
 
 Gow, 33. 13. 
 
 Armstrong v. Byrne, 1 Bdw. Ch. 
 
 79. , 160. 
 
 Armstrong v. Tuttle, 34 Mo. 432. 56. 
 Armstrong, W^er «., 70 Mo. 
 
 217. 56, 144. 
 
 Arundel v. Phipps, 10 Ves. 139. 22. 
 Ashfield V. Ashfield, 2 Vernon, 
 
 287. 161. 
 
 Atkinson v. Jordan, 5 Ohio, 293 ; 
 
 24 Am. Dec. 281. 160. 
 
 Att'y-Gen'l v. Staff, 2 Cromp. & 
 
 Mees. 124. 161. 
 
 Austin V. Bell, 20 Johns. 442 ; 11 
 
 Am. Dec. 297. 160. 
 
 Ayres v. Moore, 2 Stew. 836. 102. 
 
 Babson, Shearer v., 1 Allen, 486. 142. 
 Bacon, De Forest v., 2 Conn. 638. 79. 
 Bagwell, Spence v.; 6 Grat. 444. 35. 
 Bailey,. King v., 6 Mo. 575. 56. 
 
 Bailey, King v., 8 Mo. 332. 66. 
 
 Bailey v. Mills, 27 Tex. 434. 103. 
 
 Bainbridge v.Eichmond, 17 Hun, 
 
 891. 42. 
 
 Sainton v. Ward, 2 Atk. 172. 161. 
 Baker, Field v., 12 Blatch. 488. 70. 
 Baldock, Armstrong v., 1 Niel 
 
 Gow, 83. 'l3. 
 
 Baldock, Wooderman v., 8 Taunt. 
 
 676. 25. 
 
 Baldwin, Carlton v., 22 Tex. 724. 
 
 103. 
 (293) 
 
294 
 
 CASES CITED. 
 
 BBCTION 
 
 Baldwin v. Flash, 58 Miss. 593 ; 
 
 59 Id. 61. 64, 144. 
 
 Baldwin v. Peet, 22 Tex. 708. 103. 
 Ball V. Slafter, 26 Hun, 353. 42. 
 
 Ballard, Sturtevant v., 9 Johns. 
 
 837 ; 6 Am. Dec. 281. 119. 
 
 Bamford v. Baron, 2 Term, 594. 9. 
 Bank v. Anderson, 24 Minn. 435. 
 
 51, 144. 
 Bank, Crow v., 52 Tex. 362. 104. 
 
 Bank v. Douglas, 11 Smed. & M. 
 
 469. 63, 131, 159. 
 
 Bank v. Ebbert, 9 Heisk. 153. 
 
 60, 61, 84, 122, 131, 147, 148. 
 Bank v. Goodrich, 3 Col. 139. 65, 147. 
 Bank v. Hampson, L. E. 5 Q. 
 
 B. D. 177. 31, 142. 
 
 Bank, Hawkins v., 1 Dill. 462. 
 
 70, 139. 
 Bank v. Hunt, 11 Wall. 891. 2, 71. 
 Bank v. Inloes, 7 Md. 380. 141. 
 
 Bank v. Kent, 43 Mich. 292. 89. 
 
 Bank, McLean v., 3 McLean, 623. 68. 
 Bank v. O'Brien, 6 Hun, 231. 42. 
 
 Bank, Perry v., 27 Grat. 755. 
 
 37, 131, 147. 
 Bank v. Small, 7 Fed. Eep. 837. 70. 
 Bank v. West, 46 Me. 15. 142. 
 
 Bank v. Westbury, 16 Hun, 458. 42. 
 Banking Co. u. Coleman, 3 Giff. 
 
 11. 32. 
 
 Banks, Green v., 24 Tex. 508. 103. 
 Barker v. Hall, 13 N. H. 298. 139. 
 Barker, Lippincott v., 2 Binn. 
 
 174 ; 4 Am. Dec. 433. 160. 
 
 Barkow v. Sanger, 47 Wis. 500. 53. 
 Barnard v. Eaton, 2 Cush. 294. 96. 
 Barnes, Janney «., 11 Leigh, 100. 
 
 86, 139. 
 Barnet v. Fergus, 51 111. 352. 
 
 54, 55, 147. 
 Barnum v. Hempstead, 7 Paige, 
 
 568. 160. 
 
 Baron, Bamford v., 2 Term, 594. 9. 
 Barron v. Morris, 14 N. B. E. 371. 
 
 72, 73. 
 Bathurst, Pack v., 8 Atk. 269. 101. 
 
 SBOTION- 
 
 Batson, Latimer v., 4 B. &. C. 
 
 652. 27, 28, 79. 
 
 Baxter v. Wheeler, 9 Pick. 21. 95. 
 Bayard, Chophard v., 4 Minn. 
 
 638. 60. 
 
 Bayly, Ex parte, 15 Ch. D. 223. 31. 
 Bayntun, Dewey v., 6 East, 267. 23. 
 Beers v. Botsford, 13 Conn. 146. 
 
 79, 119. 
 Bekey, Welsh v., 1 Penn. 57. 77, 148. 
 Belford v. Crane, 16 N. J. Eq. 
 
 266. 109. 
 
 Bell, Austin v., 20 Johns. 442 ; 11 
 
 Am. Dec. 297. 160. 
 
 Benner, Southard v., 72 N. Y. 424. 
 
 43, 122, 147. 
 Benton v. Thornhill, 7 Taunt. 149. 
 
 14. 
 Bentz V. Eockey, 69 Penn. St. 71. 77. 
 Bethel v. Stanhope, Cro. Eliz. 810. 
 
 157. 
 Bevan, Eose v., 10 Md. 466. 108. 
 
 Bidwell, Gay »., 7 Mich. 519. 
 
 4, 59, 88, 116, 125, 146. 
 Bigelow V. Stringer, 40 Mo. 195. 151. 
 Billingsley v. Bunco, 28 Mo. 547. 56. 
 Birchard, David «., 53 Wis. 492. 53. 
 Bishop, Scharfenburg v., 86 Iowa, 
 
 60. 91. 
 
 Bishop V. Warner, 19 Conn. 460. 
 
 79, 80, 148. 
 Blssel B.Hopkins, 3 Cow. 166 ; 15 
 
 Am. Dec. 259. 5. 
 
 Blaokstone, Lavender v., 2 Lev. 
 
 146 ; 8 Keb. 626. 167. 
 
 Blades, Eeed v., 5 Taunt. 212. 12. 
 Blake, Muir v., 67 Iowa, 662. 91. 
 
 Blakeslee v. Eossman, 43 Wis. 
 
 116. 51,52, 68, 122, 143, 148. 
 
 Blodgett, Eanlett v., 17N.H. 298 ; 
 
 Am. Dec. 603. 46, 131, 147. 
 
 Bloom, In re, 17 N. B. E. 426. 
 
 68, 69, 72, 181. 
 Boardman «. Halliday, 10 Paige, 
 
 223. 160. 
 
 Bodwing, Garden v., 9 W. Va. 
 
 121. 67, 147. 
 
CASES CITED. 
 
 295 
 
 SECTION 
 
 Body, Owen v., 5 Ad. & E. 28. 141. 
 Bolland, Ex parte, 21 Ch. D. 643. 30. 
 Bonesteel v. Flack, 41 Barb. 435. 42. 
 Booe, Young v., 11 Ired. L. 347. 
 
 82, 84. 
 Book Co. V. Sutherland, 10 Neb. 
 
 334. 87, 139. 
 
 Boone ». Hardie, 83 N. C. 470. 
 
 84, 150. 
 Booth, Martindale v., 3 B. & Ad. 
 
 498. 28, 79. 
 
 Both, Phillips v., 58 Iowa, 499. 91. 
 Botsford, Beers v., 13 Conn. 146. 
 
 79, 119. 
 Bond V. Bronson, 80 Pa. St. 360. 78. 
 Bourne v. Dodson, 1 Atk. 157. 7. 
 
 Bowen v. Clark, 1 Bias. 128 ; 5 
 
 A. h. Beg. 203. 68. 
 
 Boyd, Spies u., 1 B. D. Smith, 
 
 445. 42. 
 
 Brackett v. Harvey, 91 N. Y. 
 
 214; 17 Cent. L. J. 112; 25 
 
 Hun, 502. 43. 
 
 Bremer v. Tleckenstein, 9 Ore. 
 
 266. 66. 
 
 Brett I). Carter, 2 Low. 458. 
 
 4, 5, 54, 116, 118, 123, 125, 130, 146. 
 Bridge, Jessup v., 11 Iowa, 572. 90. 
 Briggs V. Parkman, 2 Mete. 258 ; 
 
 87 Am. Dec. 89. 96. 
 
 ■ Briggs, Williams v., 11 E. 1. 476. 107. 
 
 Brinton v. Hook, 3 Md. Ch. 477. 158. 
 
 Bristol, People v., 35 Mich. 28. 89. 
 
 Brockenbrough v. Brockenbrough, 
 
 81 Grat. 580. 159. 
 
 Bronson, Boud v., 80 Pa. St. 360. 78. 
 Brooks o. Wimer, 20 Mo. 503. 
 
 56, 57, 148. 
 Brown, Eastwoods)., 1 Kyan&M. 
 
 312. 27, 28. 
 
 Brown v. Piatt, 8 Bosw. 324. 144. 
 Brown, Steel v., 1 Taunt. 881. 24. 
 Brown v. Thompson, 59 Me. 872. 97. 
 Brown v. "Webb, 20 Ohio, 389. 49. 
 Bucknall v. Eoiston, Preo. in Ch. 
 
 285. 15, 19, 108. 
 
 Bullock, Standen v., 8 Coke, 82. 167. 
 
 SECTION 
 
 Bunce, Billingsley v., 28 Mo. 547. 56. 
 Bunco, Stanley «., 27 Mo. 269. 
 
 56, 147. 
 Burd V. Smith, 4 Dall. 76. 160. 
 
 Burgess, Triebert u., 11 Md. 452. 108. 
 Barley, Marsh v., 13 Neb. 261. 87. 
 Burnell, Gala v., 7 Q. B. 850. 30. 
 Burnside, Maple v., 22 Ind. 139. 74. 
 Burrows, In re, 7 Biss. 526 ; 5 C. 
 
 L. J. 241. 68, 69, 131. 
 
 Butler V. Rahm, 46 Md. 641. 108. 
 
 Butler V. Stoddard, 7 Paige, 168. 39. 
 Butler, Stoddard »., 20 Wend. 
 
 507. 39. 
 
 Byern, Donnell v., 69 Mo. 468. 58. 
 Byrne, Armstrong »., 1 Edw. Ch. 
 
 79. 160. 
 
 Cadell, Mace v., 1 Cowp. 232. 5. 
 
 Cadogan v. Kennett, 2 Cowper, 
 
 432. 20. 
 
 Cadwell v. Pray, 41 Mich. 307. 89. 
 Cagle, Hilliard v., 46 Miss. 309. 
 
 63, 131, 148. 
 Cairns, Mackie v., 5 Cow. 547 ; 15 
 
 Am. Dec. 477. 158. 
 
 Calkins v. Lockwood, 16 Conn. 
 
 276 ; 41 Am. Dec. 143. 79. 
 
 Cameron v. Marvin, 26 Kan. 612. 
 
 100. 
 Campbell V. Leonard, 11 Iowa, 
 
 489. 90. 
 
 Cannon «. Peebles, 4 Ired. Law, 
 
 204. 81, 157. 
 
 Cantrell, In re, 6 Ben. 482. 68. 
 
 Carlton v. Baldwin, 22 Tex. 724. 103. 
 Carnes v. Piatt, 1 Sweeney, 147. 42. 
 Carpenter v. Mayer, 5 Watts, 483. 
 
 77. 
 Carpenter v. Simmons, 1 Rob. 
 
 360. 42. 
 
 Carpet Co., Kendall v., 13 Conn. 
 
 883. 189. 
 
 Carter, Brett ».,2 Low. 458. 
 
 4, 5, 54, 116, 118, 123, 125, 130, 146. 
 Catlin u. Curriert 1 Saw. 7. 
 
 68,69,131, 143, 147. 
 
296 
 
 CASES CITED. 
 
 SECTION 
 
 Cator V. Collins, 2 Mo. Ap. 225. 57. 
 Chandler, Melody v., 12 Me. 282. 
 
 97, 140. 
 Chapin v. Cram, 40 Me. 661. 97. 
 
 Chapman, Graham v., 12 C. B. 
 
 85. 30, 151. 
 
 Chapnian, Sleeper v., 121 Mass. 
 
 404. , 96. 
 
 Charlton v. Lay, 5 Hum. 495. 159. 
 Cheatham u. Hawkins, 76 N. C. 
 
 335. 84, 104, 132, 150. 
 
 Cheatham v. Hawkins, 80 Id. 161. 
 
 84, 150. 
 Chisolm V. Chittenden, 45 Ga. 213. 
 
 111. 
 Chittenden, Chisolm v., 45 Ga. 
 
 213. 111. 
 
 Chophard v. Bayard, 4 Minn. 533. 50. 
 Chri-tie, Keables v., 47 Mich. 594. 89. 
 Cigar Co. v. Foster, 36 Mich. 368. 89. 
 Claflin, Adler v., 17 Iowa, 89. 
 
 90, 140. 
 Clark, Bowen v., 1 Biss. 128 ; 5 
 
 A. L. Reg. 203. 68. 
 Clark V. Hyman, 55 Iowa, 14 ; 39 
 
 Am. Eep. 160. 91. 
 
 Clarke, Hyslop v., 14 Johns. 458. 
 
 160. 
 Clay, Walker v., 42 L. T. (n. s.) 
 
 369. 81, 142. 
 
 Cleaves v. Herbert, 61 111. 126. 55. 
 Clemence, Flood v., 106 Mass. 
 
 299. 96. 
 
 Clemence, Folsom *., Ill Mass. 
 
 273. " 96. 
 
 Cliver v. Applegate, 5 N. J. Law, 
 
 479. 109. 
 
 Clow«. "Woods, 5 S. »fe R. 275; 9 
 
 Am. Dec. 346. 77, 78, 148. 
 
 Coate V. Williams, 9 Eng. L. & 
 
 B. 481. 140. 
 Cobb, Deering v., 74 Me. 332. 97. 
 Cobb V. Farr, 16 Gray, 597. 96. 
 Coburn v. Pickering, 3 N. H. 415 ; 
 
 14 Am. Dec. 875. 44, 48. 
 
 Cochran v. Paris, 11 Grat. 348. 159 
 Codman v. Freeman, 8 Gush. 306. 95. 
 
 SECTION 
 
 Cod wise, Sands v., 4 Johns. 536; 
 
 4 Am. Dec. 305. 5. 
 
 Coleman, Banking Co. v., 8 Giff. 
 
 11. 82. 
 
 Collins, Cator v., 2 Mo. Ap. 225. 67. 
 Collins, Moore v., 3 Dev. Law, 
 
 126. 81. 
 
 Collins o. Myers, 16 Ohio, 547. 
 
 47, 52, 68, 66, 84, 87, 111, 116, 122, 
 
 181, 147. 
 
 Collver, Leland »., 34 Mich. 418. 89. 
 
 Colter, Rose v., 76 Ind. 590. 76. 
 
 Commonwealth v. Damon, 105 
 
 Mass. 580. 96. 
 
 Commonwealth, Shannon v., 8 S. 
 
 &E. 444. 157. 
 
 Commonwealth v. Strangford, 
 
 112 Mass. 289. 96. 
 
 Conkling v. Shelly, 28 N. T. 360. 
 
 41, 43. 
 Conkwright, Smith «., 28 Minn. 
 
 23. 158. 
 
 Constantino v. Twelves, 29 Ala. 
 
 607. 101. 
 
 Cook V. Corthell, 11 E. L 482 ; 23 
 
 Am. Eep. 518. 107, 144. 
 
 Coolidge V. Melvin, 42 N. H. 510. 
 
 44, 158. 
 Cooper, Garman v., 72 Penn. St. 
 
 82. 77, 151. 
 
 Cooper, Smith v., 27 Hun, 565. 42. 
 Copeland, Cutter v., 18 Me. 127. 97. 
 Corbett, Hunter v., 7 Up. Can. Q. 
 
 B. 75. 28. 
 
 Cornish, Flower v., 25 Minn. 473. 
 
 51. 
 Cornwallis, Lassells v., 2 Vernon, 
 
 465. 161. 
 
 Corthell, Cook v., 11 R. L 482; 
 
 23 Am. Eep. 518. 107, 144. 
 
 Cory, Hughes jj., 20 Iowa, 399. 
 
 4, 90, 91, 92, 98, 120, 130. 
 Cotton V. Marsh, 3 Wis. 221. 58, 139. 
 Cox V. Jackson, 1 Hay. 423. "81. 
 
 Cram, Chapin v., 40 Me. 561. 97. 
 
 Crane, Belford v., 16 N. J. Eq. 
 
 265. 109. 
 
CASES CITED. 
 
 297 
 
 SECTION 
 
 Crane, Harvey v., 2 Bias. 496 ; 5 
 
 N. B. R. 218. 70. 
 
 Craver v. Miller, 65 Penn. St. 456. 78. 
 Crawcour v. Salter, 18 Ch. J). 80. 31. 
 Crittenden, Nicol v., 55 Ga. 497. 
 
 111. 
 Crooks V. Stuart, 2 McCra. 13 ; 7 
 
 Fed. liep. 800. 68, 70. 
 
 Crow V. Bank, 52 Tex. 362. 104. 
 
 Crudup, Eichmond v., Meigs, 
 
 581 ; 33 Am. Dec. 164. 159. 
 
 Crutsinger, Eosa v., 7 Mo. 245. 56. 
 ^Cunningham ». Preebom, 11 
 
 Wend. 240. 74, 151. 
 
 Currier, Oatlin ■«., 1 Saw. 7. 
 
 68, 69, 131, 143, 147. 
 Curtis V. 'Wilcox, 49 Mich. 425. 89. 
 Curts, Phelps v., 80 111. 109. 151. 
 
 Cashing, Johnson v., 15 N. H. 
 
 298; 41 Am. Deo. 694 161. 
 
 Cutter V. Oopeland, 18 Me. 127. 97. 
 Cutting i>. Cutting, 86 K. Y. 522. 161. 
 Cutting V. Jackson, 56 K H. 253. 
 
 44, 159. 
 
 Dade, Eock v., May Fraud. Conv. 
 
 520. 157. 
 
 Damon, Commonwealth v., 105 
 
 Mass. 680. 96- 
 
 Daniel v. Morrison, 6 Dana, 182. 
 
 99, 114. 
 Daniels v. Nelson, 41 Vt. 161. 110. 
 Darvill v. Terry, 6 H. & N. 812. 32. 
 Darwin v. Handley, 3 Yerg. 502. 159. 
 Davenport v, Poulke, 68 Ind. 
 
 382 ; 34 Am. Eep. 265. 75, 76, 147. 
 David V. Birchard, 53 Wis. 492. 53. 
 Davidson, Pox v., 1 Mackey, 102 ; 
 
 9 Wash. L. Eep. 263. 68, 147. 
 
 Davis, Jarvis v., 14 B. Men. 529. 98. 
 Davis V. Eansom, 18 111. 396. 54, 147. 
 Davis, Woodrow v., 2 B. Mon. 
 
 298. 98. 
 
 Deering v. Cobb, 74 Me. 382. 97. 
 De Forest v. Bacon, 2 Conn. 638. 79. 
 Delaware v. Ensign, 21 Barb. 85. 
 
 42, 51, 143. 
 
 SECTIOlr 
 
 Delop V. Windsor, 26 La. An. 
 
 185. 113. 
 
 DeMattos, Worseley v., 1 Burr. 
 
 467. 8, 119, 122, 131. 
 
 Desenberg, Willison v., 41 Mich. 
 
 156. 89. 
 
 Deuster, Steinart v., 23 Wis. 136. 
 
 52, 147. 
 Devon, Morris v., 2 Disney, 218. 
 
 48. 
 Dewey u. Bayntun, 6 East, 257. 23. 
 Dewey v. Littlejohn, 2 Ired. Eq. 
 
 495. , 82,159. 
 
 Dibrell, Gait v., 10 Yerg. 145. 
 
 59, 131, 148. 
 Diwer v. McLaughlin, 2 Wend. 
 
 596 ; 20 Am. Dec. 655. 38, 131. 
 
 Doane v. Garretson, 24 Iowa, 
 
 851. 91. 
 
 Dodds V. Johnson, 8 Thomp. & 
 
 C."215. 42. 
 
 Dodson, Bourne v., 1 Atk. 157. 7. 
 Doe dem. Otley v. Manning, 9 
 
 East, 64. 119. 
 
 Doe, Jenners v., 9 Ind. 461. 74. 
 
 D'Oench, State v., 81 Mo. 458. 
 
 57, 58. 
 Dolliver, Thompson v., 132 Mass. 
 
 103. 96, 141. 
 
 Donalson, Ingles v., 2 Hay. 57. 81. 
 Donnell v. Byern, 69 Mo. 468. 58. 
 Donovan v. Dunning, 69 Mo. 436. 
 
 158. 
 Dorr, Wolfe v., 24 Me. 104. 97. 
 
 Douglas, Bank v., 11 Smed. &M. 
 
 469. 68, 131, 159. 
 
 Downing, Henderson v., 24 Miss. 
 
 106. 158. 
 
 Downs, Goodrich u., 6 Hill, 438. 
 
 74, 151. 
 Doyle V. Smith, 1 Coldw. 15. 
 
 59, 60, 141. 
 Dudley's (Sir Eobert) Case, Lane, 
 
 42. 157. 
 
 Dunham v. Waterman, 17 N. Y. 
 
 9. 151. 
 
 Dunlap, Spence v., 6 Lea, 457. 151, 
 
298 
 
 CASES CITED. 
 
 SBCTIOW 
 
 Dunning, Donovan v., 69 Mo. 
 
 436. 158. 
 
 Dunning v. Mead, 90 111. 376. 56. 
 
 Dustin, Pettee v., 58 N. H. 809. 
 
 88, 144. 
 Dutcher v. Swartwood, 15 Hun, 
 
 31. 42, 143. 
 
 Earie, Hungerford v., 2 Vernon, 
 
 261. 158. 
 
 Earman, Sipe v., 26 Grat. 563. 159. 
 Eastwood V, Brown, 1 Eyan & M. 
 
 812. 27, 28. 
 
 Eaton, Barnard v., 2 Cush. 294. 96. 
 Eaton, Oliver v., 7 Mich. 108. 88. 
 Ebbert, Bank v., 9 Heisk. 153. 
 
 60, 61, 84, 122, 131, 147, 148. 
 Edgell V. Hart, 9 N. Y. 213 ; 18 
 
 Barb. 880. 41, 43, 147. 
 
 Edmundson, Kissam v., 1 Ired. 
 
 Eb. 180. 81, 158. 
 
 Edwards v. Harben, 2 Term, 587. 
 
 9, 17, 28, 29, 84, 131. 
 Edwards v. Stinson, 59 Ga. 443. 111. 
 Elaiii, Morgan v., 4 Terg. 438. 119. 
 Eldridge, In re, 2 Biss. 362. 70. 
 
 Eldridge, Passmore o., 12 Serg. 
 
 & E. 198. 160. 
 
 Ellett, Erankhouser v., 22 Kan. 
 
 127; 31 Am. Kep. 171. 100, 132. 
 Elliott, Eobinson v., 22 "Wall. 513. 2, 
 
 4, 28, 51, 66, 70, 72, 74, 75, 99, 103, 
 
 116, 119, 122, 123, 131, 143, 144, 145. 
 Ellison, Tallon v., 3 Neb. 68. 87. 
 
 Elmes V. Sutherland, 7 Ala. 262. 
 
 102, 159. 
 Ely, Smith v., 10 N. B. E. 553. 
 
 68, 143. 
 Ensign, Delaware «., 21 Barb. 85. 
 
 42, 51, 148. 
 Ersfeild, Garth v., J. Bridgman, 
 
 22. 157. 
 
 Ervin, Jacobs v., 9 Ore. 52. 66. 
 
 Estill, Vanmeter v., 78 Ky. 456. 99. 
 Etheridge, Addington v., 12 Grat. 
 
 436. 86. 
 
 Evans v. Scott, 89 Penn. St. 186. 78. 
 
 SECTION' 
 
 Evans, Spaokman v., L. E. 8 Eng. 
 
 <fcl. App. 171. 151. 
 
 Evans, Williams v., 6 Neb. 216. 87. 
 
 Ex parte AUard, 16 Ch. D. 505. 31. 
 
 Ex parte Bayly, 15 Ch. D. 223. 31. 
 
 Ex parte BoUand, 21 Ch. D. 548. 80. 
 Ex parte Games, L. E. 12 Ch. D. 
 
 314. 30. 
 Ex parte Popplewell, 21 Ch. D. 
 
 73. 30. 
 Ex parte Symmons, 14 Ch. D. 
 
 693. 31. 
 
 Ex parte Williams, 11 Ves. 3. 22. 
 
 Farmers' Bank v. Douglas, 11 S. 
 
 & M. 469. 63, 131, 159, 
 
 Parnsworth v. Shepard, 6 Vt. 
 
 621. 110. 
 
 Parr, Cobb v., 16 Gray, 597. 96. 
 
 Pergus, Barnet v., 51 HI. 352. 
 
 54, 55, 147. 
 Pern, Payne v., L. E. 6 Q. B. D. 
 
 620. 81. 
 
 Pield V. Baker, 12 Blatch. 438. 70. 
 Field, Lyons v., 17 B. Mon. 543. 
 
 98. 
 Fisher v. Henderson, 8 N. B. E. 
 
 175. 158: 
 
 Pisk V. Harshaw, 45 Wis. 665. 
 
 53, 55, 139. 
 Plack, Bonesteel v., 41 Barb. 435. 42. 
 Plash, Baldwin v., 58 Miss. 593 ; 
 
 59 Id. 61. 64, 144. 
 
 Pleckenstein, Bremer v., 9 Ore. 
 
 266. 66. 
 
 Fletcher v. Powers, 181 Mass. 
 
 833. 94. 
 
 Flood V. Clemenoe, 106 Mass. 299. 
 
 96. 
 Flower v. Cornish, 25 Minn. 478. 51. 
 Flower, Mann «,, 25 Minn. 500. 51- 
 Poerstel, Thompson v., 10 Mo. 
 
 Ap. 290. 57. 
 
 Fogg, Janvrin v., 49 N. H. 340. 
 
 51, 143, 144. 
 Polsom ». Clemenoe, 111 Mass. 
 
 278. 96. 
 
CASES CITED 
 SECTION 
 
 299 
 
 Forbes, In re, 5 Biss. 510. 
 
 68, 343,147. 
 Ford V. Williams, 24 N. Y. 859. 
 
 41, 43, 139. 
 Foster, Cigar Co. v., 36 Mich. 368. 
 
 89. 
 Foster v. Manufg. Co., 12 Pick. 
 
 451. 95. 
 
 Foster v. Wallace, 2 Mo. 231. 56. 
 
 Foster 0. Woodfln, 11 Ired. Law, 
 
 839. 81. 
 
 Foulke, Davenport v., 68 Ind. 
 
 382 ; 34 Am. Rep. 265. 75, 76, 147. 
 Fox V. Davidson, 1 Mackey, 102 ; 
 
 9 Wash. L. Rep. 263. 68, J47. 
 
 Frankhouser v. Ellett, 22 Kan. 
 
 127 ; 81 Am. Rep. 171. 100, 182. 
 Franklin, Wilt «., 1 Binn.502; 2 
 
 Am. Dec. 474. 78, 151. 
 
 Freeborn, Cunningham v., 11 
 
 Wend. 240. 74, 151. 
 
 Freeman, Codman v., 3 Cush. 306. 
 
 95. 
 Freeman v. Rawson, 5 Ohio St. 1. 
 
 48, 74. 
 Frost V. Warren, 42 N. T. 204. 
 
 41, 43. 
 
 Gaither, Sangston v., 8 Md. 40. 
 
 160. 
 Gale V. Burnell, 7 Q. B. 850. 80. 
 
 Gait V. Dibrell, 10 Yerg. 145. 
 
 59, 131, 148. 
 Games, Ex parte, L. R. 12 Ch. D. 
 
 14. 30. 
 
 Garden v. Bodwing, 9 W. Va. 
 
 121. 67, 147. 
 
 Gardner v. Johnston, 9 W. Va. 
 
 403. 67, 147. 
 
 Gardner v. McBwen, 19 N. Y. 123. 
 
 41, 48. 
 Garman v. Cooper, 72 Penn. St, 
 
 32. 77, 151. 
 
 Garretson, Doane v., 24 Iowa, 351. 
 
 91. 
 Garth v. Ersfeild, J. Bridgman, 22. 
 
 157. 
 
 SECTION 
 
 Gay V. Bidwell, 7 Mich. 519. 
 
 4, 69, 88, 116, 125, 146. 
 Geesaman, Hower v., 17 S. & E. 
 
 251. 77. 
 
 George v. Milbanke, 9 Ves. Jr. 
 
 190. 161. 
 
 Gere v. Murray, 6 Minn. 305. 50. 
 
 Gibbs V. Thompson, 7 Hum. 179. 
 
 158. 
 Giles, Palmer v., 5 Jones Eq. 75. 
 
 81, 158. 
 Gill, Haselinton v., 8 Term, 620. 29. 
 Gilmore, Googins v., 47 Me. 9. 
 
 97, 150. 
 Goodenough v. Harris, 1 Disney, 
 
 58. 48. 
 
 Goodheart v. Johnson, 88 HI. 58. 
 
 55, 139. 
 Goodman, Woodward v., 3 Cent. 
 
 L. J. 43. 60, 141. 
 
 Goodnow, Allen v., 71 Me. 420. 97. 
 Goodrich, Bank v., 3 Colo. 139. 
 
 65, 147. 
 Goodrich v. Downs, 6 Hill, 438. 
 
 74, 151. 
 Goodrich i;. Williams, 50 Ga. 425. 
 
 Ill, 132. 
 Goodtitle v. Otway, 2 Wilson, 6. 161. 
 Goodwin, Abbott v., 20 Me. 408. 
 
 73, 97, 140. 
 Googins o. Gilmore, 47 Me. 9. 
 
 97, 150. 
 Gorham, Meyer v., 5 Cal. 322. 112. 
 Graham v. Chapman, 12 0. B. 85. 
 
 30, 151. 
 Graham, Metzner v., 57 Mo. 404. 
 
 58, 139. 
 Grant, Mining Co. v., 17 Ch. D. 
 
 122. 151. 
 
 Graves, White v., 68 Mo. 218. 57. 
 Greeley v. Reading, 74 Mo. 309. 
 
 57, 144. 
 Green v. Banks, 24 Tex. 508. 103. 
 Green v. Trieber, 3 Md. 11. 160. 
 
 Green, Wade v., 3 Hum. 546. 159. 
 Greenebaum v. Wheeler, 90 111. 
 296. 55, 131. 
 
300 
 
 CASES CITED. 
 
 SECTION 
 
 Gregory v. Parkins, 4Dev. Law, 
 
 50. 81. 
 Gregory v. Whedon, 8 Neb. 873. 87. 
 Grimshawi;. Walker, 12 Ala. 101. 160. 
 Griswold v. Sheldon, 4 N. T. 581. 
 
 4, 40, 84, 116. 
 Grover v. Wakeman, 11 Wend. 
 
 187. 151, 160. 
 
 Grover, Wakeman u.,-4 Paige, 23. 
 
 160. 
 Grubham, Stone v., 2 Bulst. 225. 18. 
 Guild, McCombs v., 9 Lea, 81. 61. 
 
 Hafner v. Irwin, 1 Ired. Law, 490. 
 
 81. 
 Hall, Barker v., 13 N. H. 298. 189. 
 Hall V. Webb, 28 Mo. 408. 56. 
 
 Halliday, Boardman v., 10 Paige, 
 
 223. 160. 
 
 Hamilton v. Rogers, 8 Md. 301. 108. 
 Hampson, Bank v., L. E. 5 Q. 
 
 B. D. 177. 31, 142. 
 
 Handley, Darwin v., 3 Yerg. 502. 1 59. 
 Hankins v, Ingols, 4 Blackf. 35. 74. 
 Harben, Edwards v., 2 Term, 587. 
 
 9, 17, "28, 29, 84, 131. 
 Hardie, Boone v., 83 N. C. 470. 
 
 84,150. 
 Harding, Lockwood v., 79 Ind. 129. 
 
 75, 76, 139. 
 Hardy v. Simpson, 13 Ired. Law, 
 
 132. 83. 
 
 Hardy v. Skinner, 9 Ired. Law, 
 
 191. 82, 83, 84. 
 
 Harman v. Abbey, 7 Ohio St. 218. 
 
 48, 147. 
 Harman «. Hoskins, 56 Miss. 142. 
 
 62, 63, 64, 131, 144, 147, 148. 
 Harris, Goodenougb v., 1 Disney, 
 
 53. 48. 
 
 Harris, Leadman v., 3 Dev. Law,- 
 
 144. 81. 
 
 Harris v. Sumner, 2 Pick. 129. 95. 
 Harshaw, Fisk v., 45 Wis. 665. 
 
 53, 55, 139. 
 Hart, Edgell v., 9 N. Y. 213 ; 13 
 Barb. 380. 41, 43, 147. 
 
 SECTION 
 
 Harvey, Braokett v., 91 N. Y. 
 
 214; 17 Cent. L. Jour. 112; 25 
 
 Hun, 502. < 43. 
 
 Harvey v. Crane, 2 Biss. 496 ; 5 
 
 N. B. E. 218. 70. 
 
 Haselinton v. Gill, 3 Term, 620. 29. 
 Hasslock, McCrasly v., 4 Bax. 1. 60. 
 Hawkins v. Bank, 1 Dill. 462. 70, J39. 
 Hawkins, Cheatham v., 76 N. C. 
 
 885. 84, 104, 182, 150. 
 
 Hawkins, Cheatham v., 80 Id. 
 
 161. 84, 150. 
 
 Haworth, Shattuck v., 91 Penn. 
 
 St. 449. 78. 
 
 Hayden, Torbert v., 11 Iowa, 435. 
 
 90, 92, 132. 
 Hazen, Ludden »., 81 Barb. 650. 42. 
 Hazzard, Richards v., 1 Stew. & 
 
 P. 139. 102. 
 
 Hedman v. Anderson, 6 Neb. 392. 
 
 87, 126. 
 Hempstead, Barnum v., 7 Paige, 
 
 568. 160. 
 
 Henderson v. Downing, 24 Miss. 
 
 106. 158. 
 
 Henderson, Fisher i;., 8 N. B. R. 
 
 175. 158. 
 
 Hendricks v. Mount, 5 N. J. Law, 
 
 738. 109. 
 
 Herbert, Cleaves o., 61 111. 126. 55. 
 Hewson v. Tootle, 72 Mo. 632. 
 
 56, 58, 139. 
 Hickman v. Perrin, 6 Cold. 135. " 
 
 59, 125. 
 Hill, Marks v., 15 Grat 400. 30, 139. 
 Hill, Winkley v., 9 N. H. 81 ; 31 
 
 Am. Dec. 215. 44. 
 
 Hilliard v. Cagle, 46 Miss. 809. 
 
 63, 181, 148. 
 Hinton v. Toye, 1 Atk. 465. 161. 
 
 Hoffman v. Pitt, 5 Esp. 22. • 23. 
 Holmes v. Marshall, 78 N. C. 262. 
 
 84, 150. 
 Holt, Howerton v., 28 Tex. 51. 108. 
 Hombeck •«. Vanmetre, 9 Ohio, 
 
 168. 48. 
 
 Hood, Sibley v., 3 Mo. 290. 56. 
 
CASES CITED. 
 
 301 
 
 SUCTION 
 
 Hook, Brinton v., 3 Md. Ch. 477. 158. 
 Hopkins, Bissel v., 8 Cow. 166; 
 
 15 Am. Dec. 259. 5. 
 
 Hopkins, MoFadden v., 81 Ind. 
 
 459. 76. 
 
 Horton, Sommerville v., 4 Tor. 
 
 640 ; 26 Am. Deo. 242. 59, 95, 159. 
 Horton v. Williams, 21 Minn. 
 
 187. 50, 52, 54, 87, 147. 
 
 Hoskins, Harman v., 56 Miss. 142. 
 
 62,63,64, 131, 144, 147,148. 
 Houston V. Howard, 39 "Vt. 54. 110. 
 Howard, Anderson »., 49 Ga. 313. 
 
 111. 
 Howard, Houston v., 39 Vt. 54. 110. 
 Howard, Trotter v., 1 Hawks, 320. 81. 
 Hower v, Geesaman, 17 S. & R. 
 
 251. 77. 
 
 Howerton v. Holt, 23 Tex. 51. 103. 
 Hubbard v. Lyman, 8 Allen, 520. 142. 
 Hudson V. Warner, 2 Har. & Gill, 
 
 415. 108. 
 
 Huggeford, Jones v., 3 Met. 516. 
 
 96, 140. 
 Hughes V. Cory, 20 Iowa, 399. 
 
 4, 90, 91, 92, 93, 120, 130. 
 Hungerford o. Barle, 2 Vernon, 
 
 261. 158. 
 
 Hunt, Bank of Leavenworth v., 
 
 11 Wall. 391. 2, 71. 
 
 Hunter v. Corbett, 7 Up. Can. Q. 
 
 B. 75. 28. 
 
 Hurst, Smith v., 10 Hare, 30. 157. 
 Hyman, Clark v., 55 Iowa, 14 ; 39 
 
 Am. Bep. 160. 91. 
 
 Hyslop V. Clarke, 14 Johns. 458. 160. 
 
 IngersoU, Kirby v., 1 Harr. Ch. 
 
 172 ; 1 Doug. (Mich.) 477. 151. 
 Ingles V. Donjilson, 2 Hay. 57. 81. 
 Ingok, Hankins v., 4 Blackf. 35. 74. 
 Ingram, Jezeph v., 8 Taun. 838. 
 
 25, 28. 
 Inloes, Bank v., 7 Md. 880. 141. 
 
 Insurance Co. a. Wilcoxson, 21 
 
 Ind. 355. 74, 75, 147. 
 
 Irwin, Hafner v., 1 Ired. Law, 490. 81. 
 
 SEcnoif 
 Jackson, Cox v., 1 Hay. 423. 81. 
 
 Jackson. Cutting v., 56 N. H. 253. 
 
 44, 169. 
 Jackson v. Parker, 9 Cow. 73. 158. 
 Jacob, State v., 2 Mo. Ap. 183. 57. 
 Jacobs V. Ervin, 9 Ore; 52. 66. 
 
 Janes v. Whitbread, 5 Eng. L. & 
 
 E. 431. 140. 
 
 Janney v. Barnes, 11 Leigh, 100. 
 
 35, 139. 
 Janvrin v. Fogg, 49 N. H. 340. 
 
 51, 143, 144. 
 Jarman v. WooUoton, 3 Term, 
 
 618. 29. 
 
 Jarvis v. Davis, 14 B. Mon. 529. 98. 
 Jenkins, Simmons v., 76 111. 479. 55. 
 Jenkyn u. Vaughan, 3 Drewry, 
 
 419. 157. 
 
 Jenners v. Doe, 9 Ind. 461. 74. 
 
 Jerenson, Eice v., 54 Wis. 248. 63. 
 Jessup V. Bridge, 11 Iowa, 572. 90. 
 Jezeph V. Ingram, 8 Taun. 838. 
 
 25, 28. 
 Johnson v. Cushing, 15 N. H. 
 
 298 ; 41 Am. Dec. 694. 161. 
 
 Johnson, Dodds v., 3 Thomp. & C. 
 
 215. 42. 
 
 Johnson, Goodheart v., 88 111. 58. 
 
 55, 139. 
 Johnson v. Patterson, 2 Woods, 
 
 443. 70. 
 
 Johnson v. Thweatt, 18 Ala. 741. 
 
 101, 150. 
 Johnson v. Whitwell, 7 Pick. 71. 96. 
 Johnston, Gardner v., 9 W. Va. 
 
 403. 67, 147. 
 
 Jones V. Huggeford, 3 Met. 515. 
 
 96, 140. 
 Jones, Miller v., 15 N. B. E. 160. 72. 
 Jones, Pennington v., 67 Iowa, 
 
 87. 91. 
 
 Jordan, Atkinson v., 5 Ohio, 293 ; 
 
 24 Am. Dec. 281. 160. 
 
 Jordan v. Lendrum, 55 Iowa, 478. 93. 
 Jordan v. Turner, 3 Blackf. 309. 74. 
 Joseph V. Levi, 68 Miss. 843. 64, 144. 
 Judd, Mattison v., 59 Miss. 99. 141. 
 
302 
 
 CASES CITED. 
 
 SECTION 
 
 Kahley, Ke, 2 Biss. 383 ; 4 N. B. 
 
 R. 124, 378. 68, 69, 147. 
 
 Katzenberger, Kleins v., 20 Ohio 
 
 St. 110 ; 6 Am. Eep. 630. 49, 139. 
 Keables t>. Chriatie, 47 Mich. 594. 89. 
 Kelly, Mittnaohto., 3K:eyes,407. 
 
 41, 131. 
 Kenan, King v., 38 Ala. 63. 101. 
 
 Kendall v. Carpet Co., 13 Conn. 
 
 383. 139. 
 
 Kennett, Cadogan v., 2 Cowper, 
 
 432. 20. 
 
 Kenney, Smith v., 1 Mackey, 12 ; 
 
 9 "Wash. L. Eep. 69. 68. 
 
 Kent, Bank v., 43 Mich. 292. 89. 
 
 Kerr, Quarles v., 14 Grat. 48. 159. 
 Kidd (J. Bawlinson, 2 Bos. & Pul. 
 
 59. 21, 22. 
 
 Killian, Turner v., 12 Neb. 580. 87. 
 King V. Bailey, 6 Mo. 575. 56. 
 
 King V. Bailey, 8 Mo. 332. 56. 
 
 King V. Kenan, 38 Ala. 63. 101. 
 
 King ». Nottingham, Lane, 42. 157. 
 Kirby o. Ingersoll, 1 Harr. Ch. 
 
 172 ; 1 Doug. (Mich.) 477. 151. 
 
 Kirkbride, Ke, 5 Dillon, 116. 68, 70. 
 Kissam v. Edmundson, 1 Ired. Eq. 
 
 180. 81, 158. 
 
 Kleine v. Katzenberger, 20 Ohio 
 
 St. 110 ; 5 Am. Eep. 630. 49, 139. 
 Knight, Wiley u., 27 Ala. 336. 
 
 102, 159. 
 Kramer, Wormani)., 73 Penn.St. 
 
 378. 78. 
 
 Kuhn V. Mack, 4 W. Va. 1 86. 67, 147. 
 
 Laing v. Perrott, 48 Mich. 298. 89. 
 Lang ». Lee, 3 Eand. 410. 
 
 34, 67, 122, 131, 142, 147, 157. 
 Lang V. Stockwell, 55 N. H. 561. 
 
 44, 160. 
 Langsdorf, Voorhis v., 31 Mo. 451. 
 
 56. 
 Langworthy, Place v., 13 Wis. 
 
 629. 52, 147. 
 
 Lassells v. Cornwallis, 2 Vernon, 
 465. 161. 
 
 SECTION' 
 
 Latimer v. Batson, 4 B. & C. 652. 
 
 27, 28, 79. 
 Lavender v. Blackstone, 2 Lev. 
 
 146; 3Keb. 526. 157. 
 
 _Lay, Charlton «., 5 Hum. 495. 159. 
 Leadman v. Harris, 3 Dev. Law, 
 
 144. 81. 
 
 Leavitts, Smith v., 10 Ala. 92. 
 
 101, 132. 
 Lee, Lang v., 3 Eand. 410. 
 
 34, 67, 122, 131, 142, 147, 157. 
 Leighton, Preston v., 6 Md. 88. 108. 
 Leland v. CoUver, 34 Mich. 4l8. 89. 
 Lendrum, Jordan v., 55 Iowa, 478. 
 
 93. 
 Lentilhon v. MoflFat, 1 Edw. Ch. 
 
 451. 160. 
 
 Leonard, Campbell v., 11 Iowa, 
 
 489. 90. 
 
 Leonard, Wilhelmi »., 13 Iowa, 
 
 330. 90. 
 
 Letts, Mobley v., 61 Ind. 11. 
 
 75, 76, 147, 148. 
 Levi, Joseph v., 58 Miss. 843. 64, 144. 
 Levy V. Welsh, 2 Edw. Ch. 438. 
 
 39, 40. 
 Lewis V. McCabe, 49 Conn. 141 ; 
 
 21. A. L. Keg. 217. 61, 79. 
 
 Lippincott v. Barker, 2 Bin. 174 ; 
 
 4 Am. Dec. 433. 160. 
 
 Littlejohn, Dewey »., 2 Ired. Eq. 
 
 495. 82, 159. 
 
 Littleton, Tyrer »., 2 Brownlow, 
 
 187. 157. 
 
 Lockwood, Calkins v., 16 Conn. 
 
 276; 41 Am. Dec. 143. 79. 
 
 Lockwood V. Harding, 79 Ind. 
 
 129. 75, 76, 139. 
 
 Lockwood, Miller »., 32 N. Y. 293. 
 
 41, 43, 139. 
 Lodge V. Samuels, 50 Slo. 204» 
 
 56, 147. 
 Lombe, Steward v., 1 Brod. & B. 
 
 506. 26. 
 
 Looker v. Peckwell, 38 N. J. 
 
 Law, 253. 109. 
 
 Louthain v. Miller, 85 Ind. 161. 76. 
 
CASES CITED. 
 
 303 
 
 SECTION 
 
 Lowry, Wood v., 17 Wend. 492. 
 
 89, 40, 41, 50, 71, 87, 148. 
 Ludden v. Hazen, 81 Barb. 650. 42. 
 Lukins v. Aird, 6 Wall. 78. 93, 158. 
 Lyman, Hubbard v., 8 Allen, 520. 
 
 142. 
 Lyons ». Field, 17 B.Mon. 543. 98. 
 
 Macdona v. Swiney, 8 Irish L. Eep. 
 
 73. 29. 
 
 Mace V. Cadell, 1 Cowp. 232. 5. 
 
 Mack, Kuhn v., 4 W. Va. 186. 
 
 67, 147. 
 Mack, Sparks v., 31 Arks. 666. 
 
 86, 160. 
 Mackason's Appeal, 42 Penn. St. 
 
 330. 158. 
 
 Mackie v. Caims, 5 Cow. 547 ; 15 
 
 Am. Dec. 477. 158. 
 
 Macomber v. Parker, 14 Pick. 497. 
 
 73, 95. 
 Macomber v. Peck, 39 Iowa, 351. 
 
 93, 158. 
 Maddox, Martin v., 24 Mo. 575. 56. 
 Manly, In re, 2 Bond, 261 ; 3 N. 
 
 B. K. 75, 291. 68, 143, 147. 
 
 Mann v. Mower, 25 Minn. 500. 51. 
 Manning, Doe dem. Otley v., 9 
 
 Bast. 64. 119. 
 
 Manning, Pierson v., 2 Mich. 445. 
 
 88, 114, 160. 
 Manufactg. Co,, Poster v., 12 Pick. 
 
 451. 95. 
 
 Maple V. Bumside, 22 Ind. 139. 74. 
 Marhury, Tarback v., 2 Vernon, 
 
 510. 157. 
 
 Marks v. Hill, 15 Qi'at. 400. 36, 139. 
 Marqueze, flichardson v., 59 Miss. 
 
 80; 42 Am. Kep. 853. 141. 
 
 Marsh v. Burley, 13 Neb. 261. 87. 
 Marsl* Cotton v., 8 Wis. 221. 
 
 53, 139. 
 Marshall, Holmes »., 78 N. C.262. 
 
 84, 150. 
 Marston v. Vultee, 8 Bosw. 129. 
 
 42, 148. 
 Martin v. Maddox, 24 Mo. 575. 56. 
 
 SECTION 
 
 Martin, MoKibbinu., 64 Penn. St. 
 
 852 ; 3 Am. Rep. 588. 78, 148. 
 
 Martin v. Eice, 24 Mo. 581. 56. 
 
 Martindale v. Booth, 3 B. & Ad. 
 
 498. 28, 79. 
 
 Marvin, Cameron v., 26 Kan. 612. 
 
 100. 
 Masson ti. Anderson, 3 Bax. 290. 159. 
 Mattison v. Judd, 59 Miss. 99. 141. 
 Mayer, Carpenter);., 5 Watts, 483. 77. ' 
 Maynard, Pratt v., 116 Mass. 388. 96. 
 Mazange, Price v , 31 Ala. 701. 
 
 101, 132. 
 MoCabe, Lewis v., 49 Conn. 141 ; 
 
 21 Am. L. Reg. 217. 61, 79- 
 
 McCalla, Allen v., 25 Iowa, 465. 91. 
 McCombs V. Guild, 9 Lea, 81. 61. 
 McCrasly v. Haislock, 4 Baxt. 1. 60. 
 MoEwen, Gardner v., 19 N. Y. 
 
 123. 41, 43. 
 
 McPadden n. Hopkins, 81 Ihd. 
 
 459. 76. 
 
 McKeand, Taylor v., L. R. 5 C. P. 
 
 Div. 358. 31. 
 
 McKibbin v. Martin, 64 Penn. St. 
 
 352 ; 3 Am. Eep. 588. 78, 148. 
 
 McLachlan «. Wright, 3 Wend. 
 
 348. 38. 
 
 McLaughlin, Diwer v., 2 Wend. 
 
 596 ; 20 Am. Deo. 655. 38, 131. 
 
 McLaughlin v. Ward, 77 Ind. 883. 
 
 75, 76. 
 McLean v. Bank, 8 McLean, 623. 68. 
 McLean, Smith v., 10 N. B. E. 
 
 260. 68, 147. 
 
 Mead, Dunning v., 90 111. 376. 55. 
 Meade v. Smith, 16 Conn. 846. 79. 
 Meggot V. Mills, 1 Ld. Ray. 286. 19. 
 Melody v. Chandler, 12 Me. 282. 
 
 97, 140. 
 Melvin, Coolidge «., 42 N. H. 510. 
 
 44, 158. 
 Mercer v. Peterson, L. R. 2 Exch. 
 
 304. _ 32. 
 
 Metzner v. Graham, 57 Mo. 404. 
 
 58, 139. 
 Meyer v. Gorham, 5 Cal. 322. 112. 
 
304 
 
 CASES CITED. 
 
 SBCTION 
 
 Milbanke, George v., 9 Ves. Jr. 
 
 190. 161. 
 
 Milburn v. Waugh, 11 Mo. 369. 56. 
 Miller, Graver v., 65 Penn. St. 
 
 456. 78. 
 
 Miller v. Jones, 15 N. B. E. 150. 72. 
 Millers. Lockwood, 32 N. Y. 293. 
 
 41, 43, 139. 
 Miller, Louthain v., 85 Ind. 161. 76. 
 > Miller ads, Pancoast, 29 N. J. Law, 
 250. 109, 142. 
 
 Mills, Bailey v., 27 Tex. 434. 103. 
 Mills, Meggot v., 1 Ld. Kay. 286. 19. 
 Mining Co. v. Grant, 17 Ch. D. 122. 
 
 151. 
 Mining Co. v. Smith, L. E. 4 Bng. 
 
 & I. Ap. 64. 151. 
 
 Mitchell, Simpson v., 8 Ter. 416. 
 
 59, 159. 
 Mitchell V. Stetson, 64 Ga. 442. 111. 
 Mitchell V. Winslow, 2 Story, 630. 
 
 47, 56, 70, 78, 130. 
 Mittnacht v. Kelly, 3 Keyes, 407. 
 
 41, 131. 
 Mobley v. Letts, 61 Ind. 11. 
 
 75, 76, 147, 148. 
 Moffat, Lentilhon v., 1 Edw. Ch. 
 
 451. 160. 
 
 Monk, Peacock v., 1 Ves. sr. 127. 
 
 157. 
 Moore, Ayres v., 2 Stew. 336. 102. 
 Moore v. Collins, 3 Dev. Law, 126. 
 
 81. 
 Moore u. "Wood, 100 111. 451. 151. 
 Morgan v. Elam, 4 Yerg. 438. 119. 
 Morrill, In re, 2 Saw. 356 ; 8 N. 
 
 B.R. 117. 68,143,147. 
 
 Morris, Barron »., 14N. B. R.371. 
 
 72, 73. 
 Morris v. Devon, 2 Disney, 218. 48. 
 Morris v. Stern, 80 Ind. 227. 76. 
 
 Morrison, Daniel v., 6 Dana, 182. 
 
 99, 114. 
 
 Morrow v. Eeed, 30 Wis. 81. 144. 
 
 Morton, Vernon i>., 8 Dana, 247. 98. 
 
 Mount, Hendricks «., 5 N. J. Law, 
 
 ''^^^ 109. 
 
 SKCTIOir 
 
 Mueller, State v., 10 Mo. App. 87. 
 
 57. 
 Muir V. Blake, 57 Iowa, 662. 91. 
 
 Munch, Stein v., 24 Minn. 390. 
 
 ^ 51, 143, 147. 
 
 Murray, Gere v., 6 Minn. 305. 50. 
 Murray, Phelps u., 2 Tenn. Ch. 
 
 746. 61, 128, 131. 
 
 Murray, Riggs a., 2 Johns. Ch. 
 
 565. 121, 157, 160. 
 
 Murray v. Riggs, 15 Johns. 571. 157. 
 Myers, Collins v., 16 Ohio, 547. 
 
 47, 52, 63, 66, 84, 87, 111, 116, 
 122,131,147. 
 
 Nailer v. Young, 7 Lea, 735. 60, 147. 
 Nash V. Norment, 5 Mo. Ap. 545. 
 
 57, 144. 
 Nelson, Daniels v., 41 Vt. 161. 110. 
 Nicol V. Crittenden, 55 Ga. 497. 111. 
 Niemann, Adams v., 46 Mich. 135. 
 
 89. 
 NornJent, Nash v., 5 Mo. Ap. £45. 
 
 57, 144. 
 Nottingham, The King v.. Lane, 
 42. 157. 
 
 O'Brien, Bank v., 6 Hun, 231. 42. 
 Ogden V. Stewart, 29 111. 122. 54, 1 42. 
 Oliver v. Eaton, 7 Mich. 108. 88. 
 
 Oliver v. Town, 28 Wis. 828. 52. 
 
 Olmsted, Yates v., 56 N. Y.632,- 
 
 65 Barb. 43. 41, 55. 
 
 Orton V. Orton, 7 Or. 478. 66, 147. 
 Osgood, Putnam v., 51 N. H. 192 ; 
 
 52 N. H. 148. 45. 131, 147, 148, 159. 
 Otley, Doe dem., v. Manning, 9 
 
 East, 64. 119. 
 
 Otway, Goodtitleu., 2 Wilson, 6. 
 
 161. 
 Overman v. Quick, 8 Biss. 134. 
 
 70, 189. 
 Owen V. Body, 5 Ad. & E. 28. 141. 
 
 Pack V. Bathurst, 3 Atk. 269. 161. 
 Paget D. Perchard, 1 Esp. 205. 
 
 10, 41, 122. 
 
CASES CITED. 
 
 305 
 
 SBCTION 
 
 Palmer v. Giles, 6 Jones Eq. 75. 
 
 81, 158. 
 Pancoast, Miller ads., 29 N. J. 
 
 Law, 250. 109, 142. 
 
 Paris, Cochran B., 11 Grat. 348. 159. 
 Parker, Jackson v., 9 Cow. 73. 158. 
 Parker, Macomberi;., 14 Pick. 497. 
 
 73, 95. 
 Parker, Bobbins v., 3 Mete. 117. 
 
 95, 124, 159. 
 Parkman, Briggs o., 2 Met. 268 ; 
 
 37 Am. Dec. 89. 96. 
 
 Partridge v. White, 59 Me. 564. 97. 
 Passmore v. Eldridge, 12 S. & B. 
 
 198. 160. 
 
 Patterson, Johnson v., 2 Woods, 
 
 443. 70. 
 
 Payne v. Pern, L. B. 6 Q. B. D. 
 
 620. 31. 
 
 Peacock v. Monk, 1 Ves. sr. 127. 157. 
 Peacock v. Tompkins, Meigs, 317. 59. 
 Peck, Macomber».,^9 Iowa, 351. 
 
 93, 158. 
 Peckwell, Looker v., 38 N. J. 
 
 Law,253. 109. 
 
 Peebles, Cannon v., 4 Ired. Law, 
 
 204. 81, 157. 
 
 Peet, Baldwin v., 22 Tex. 708. 103. 
 Peiser v. Peticolas, 50 Tex. 638 ; 
 
 82 Am. Eep. 621. 103, 104, 106. 
 Pelletier, Beedi!., 28Mo. 173. 56. 
 Pence, Stephens »., 56 Iowa, 257. 91. 
 Pennell, Sawyer v., 19 Me. 167. 97. 
 Pennington u.Joiies, 57 Iowa, 87. 91 . 
 People V. Bristol, 85 Mich. 28. 89. 
 Perchard, Paget v., 1 Esp. 205. 
 
 10, 41, 122. 
 Perkins, Gregory v., 4 Dev. Law, 
 
 60. 81. 
 
 Perrin, Hickman v., 6 Cold. 136. 
 
 69, 125. 
 Perrin, In re, 7 N. B.' B. 283. 68. 
 
 Perrott, Laing v., 48 Mich. 298. 89. 
 Perry v. Bank, 27 Grat. 766. 
 
 37, 131, 147. 
 Peterson, Mercer «., L. E. 2Exoh. 
 
 304. 32. 
 
 SECTION 
 
 Peticolas, Peiser v., 50 Tex. 638 ; 
 
 82 Am. Eep. 621. 103, 104, 106. 
 Pettee v. Dustin, 58 N. H. 309. 
 
 88, 144. 
 Pettibone v. Stevens, 15 Conn. 19 ; 
 
 38 Am. Dec. 57. 79, 80, 119. 
 
 Phelps V. Curts, 80 111. 109. 151- 
 
 Phelps V. Murray, 2 Tenn. Ch. 
 
 746. 61, 128, 131. 
 
 Phillips V. Both, 58 Iowa, 499. 91. 
 Phipps, Arundel v., 10 Ves. 139. 22. 
 Pickering, Coburn v., 3 N. H. 415 ; 
 
 14 Am. Deo. 375. 44, 48. 
 
 Pierson u. Manning, 2 Mich. 445. 
 
 88, 114, 160. 
 Pinckney, Southard v., 6 N. Y. 
 
 W. D. 328. 43. 
 
 Pintard, Watkins v., 1 N. J. Law, 
 
 378. 109. 
 
 Pitt, Hoffman v., 5 Esp. 22. 23. 
 
 Pitzer, Price v., 44 Md. 521. 108. 
 
 Place V. Langworthy, 13 Wis. 629. 
 
 52, 147. 
 Piatt, Brown v., 8 Bosw. 324. 144. 
 Piatt, Carnes v., 1 Sweeny, 147. 42. 
 Popplewell, Ex parte, 21 Ch. D. 
 
 73. 30. 
 
 Potter, Eocheblave v., 1 Mo. 561 ; 
 
 14Am. Deo. 305. 56. 
 
 Powell V. Preston, 1 Hun, 513. 42. 
 Power V. Alston, 93 III. 587. 151. 
 
 Powers, Fletcher v., 131 Mass. 333. 
 
 94. 
 Pratt V. Maynard, 116 Mass. 388. 96. 
 Pray, Cadwell v., 41 Mich. 307. 89. 
 Prescott, Weeks v., 53 Vt. 57. 110. 
 Preston v. Leighton, 6 Md. 88. 108. 
 Preston, Powell v., 1 Hun, 513. 42. 
 Price V. Mazange, 31 Ala. 701. 
 
 - . 101, 132. 
 Price V. Pitzer, 44 Md. 521. 108. 
 
 Putnam v. Osgood, 51 N. H. 192 ; 
 
 52 N. H. 148. 45, 131, 147, 148, 159. 
 
 Quarles v. Kerr, 14 Grat. 48. 159. 
 Quick, Overman v., 8 Biss. 134. 
 
 70, 139. 
 
306 
 
 CASES CITED. 
 
 SECTION 
 
 Kahm, Butler v., 46 Md. 541. 108. 
 Railroad, Eobson v., 37 Mich. 70. 89. 
 Ealeigh's (Sir Walter) Case, Lane, 
 
 42. 157- 
 
 Eanlett v. Blodgett, 17 N. H. 298 ; 
 
 43 Am. Dec. 603. 45, 131, 147. 
 
 Bansom, Davis v., 18 111 396. 54, 147. 
 Eavisies v. Alston, 5 Ala. 297. 
 
 102, 159. 
 Kawlinson, Kidd v., 2 Bos. & Pul. 
 
 59. 21, 22. 
 
 Eawson, Freeman v., 5 Ohio St. 1. 
 
 48, 74. 
 Be Bloom, 17 N. B. R. 425. 
 
 68, 69, 72, 131. 
 Be Burrows, 7 Biss. 526; 6 C. 
 
 L. J. 241. 68, 69, 131. 
 
 Be Cantrell, 6 Ben. 482. 68. 
 
 Re Eldridge, 2 Biss. 362. 70. 
 
 Be Porbcs, 5 Biss. 510. 68, 143, 147. 
 Re Kahley, 2 Biss. 383 ; 4 N. B. R. 
 
 124, 878. 68, 69, 147. 
 
 Be Kirkbride, 5 Dillon, 116. 68, 70. 
 Re Manly, 2 Bond, 261 ; 3 N. B. 
 
 E. 75, 291. 68, 143, 147. 
 
 Re Morrill, 2 Saw. 356 ; 8 N. B. 
 
 R. 117. 68, 143, 147. 
 
 Be Perrin, 7 N. B. R. 283. 68. 
 
 Eea V. Alexander, 5 Ired. Law, 
 
 644. 81, 119. 
 
 Read v. Wilson, 22 111. 377. 54: 
 
 Beading, Greeley v., 74 Mo. 309. 
 
 57, 144. 
 Beed v. Blades, 5 Taunt. 212. 12. 
 
 Beed, Morrow v., 30 Wis. 81. 144. 
 Reed v. Pelletier, 28 Mo. 173. 56. 
 Beynolds v. Welch, 47 Ala. 200. 
 
 102, 150. 
 Bice V. Jerenson, 54 Wis. 248. 53. 
 Bice, Martin v., 24 Mo. 581. 56. 
 
 Rice, Rowley" t)., 11 Met. 333. 96, 144. 
 Richards v. Hazzard, 1 Stew. & P. 
 
 139. 102. 
 
 Bichardson v. Marqueze, 59 Miss. 
 
 80 ; 42 Am. Rep. 353. 141. 
 
 Bichraond, Bainbridgei)., 17 Hun, 
 391. 42. 
 
 SBSTIOlf 
 
 Bichmond v. Crudup, Meigs, 581 ; 
 
 33 Am. Dec. 164. 159. 
 
 Biggs, Murray v., 15 Johns. 571. 157. 
 Biggs «. Murray, 2 Johns. Ch. 565. 
 
 121, 157, 160. 
 Bobbins v. Parker, 3 Mete. 117. 
 
 95, 124, 159. 
 
 Robinson v. Elliott, 22 Wall. 513. 2, 
 
 4, 28, 51, 66, 70, 72, 74, 75, 99, 103, 
 
 116, 119, 122, 123, 131, 143, 144, 145. 
 
 Robson V. Railroad, 37 Mich. 70. 89. 
 
 Eocheblave v. Potter, 1 Mo. 561 ; 
 
 14 Am. Dec. 305. 56. 
 
 Rock V. Dade, May Fr. Conv. 520. 
 
 157. 
 Rockey, Bentz v., 69 Penn. St. 71. 77. 
 Rogers, Hamilton v., 8 Md. 801. 108. 
 Roiston, Bucknall B., Prec. in Ch. 
 
 285. 15, 19, 108. 
 
 RoUe, Eyall v., 1 Wils. 260. 
 
 7, 15, 19, 84, 77, 131. 
 Roos, Summers v., 42 Miss. 749 ; 2 
 
 Am. Eep. 653. 63. 
 
 Eose V. Bevan, 10 Md. 466. 108. 
 
 Eose V. Colter, 76 Ind. 590. 76. 
 
 Ross V. Crutsinger, 7 Mo. 245. 56. 
 Ross V. Wilson, 7 Bush, 29. 98. 
 
 Ross V. Young, 5 Sneed, 627. 159. 
 Eossman, Blakeslee v., 43 Wis. 
 
 116. 51, 52, 53, 122, 143, 148. 
 
 Eowles, Eynll v., 1 Ves. sr. 348 ; 
 1 Atk. 165; 1 Wils. 260. 
 
 7, 15, 19, 34, 77, 181. 
 Rowley v. Rice, 11 Met. 333. 96, 144. 
 Russell V. Winne, 37 N. Y. 591. 
 
 41, 43, 122, 131, 148. 
 Russell V. Woodward, 10 Pick. 408. 
 
 95. 
 Ryall V. Eowles, 1 Ves. sr. 348 ; 
 1 Atk. 165; 1 Wils. 260. 
 
 7, 15, 19, 34. 77, 131. 
 
 Salter, Crawcour »., 18 Ch. D. 30. 31. 
 Samuels, Lodge »., 50 Mo. 204. 
 
 56, 147. 
 Sands v. Codwise, 4 Johns. 536 ; 
 4 Am. Dec. 305. g. 
 
CASES CITED. 
 
 307 
 
 SECTION 
 
 Sanger, Barkow v., 47 Wia. 500. 53. 
 Sangston v. Gaither, 3 Jld. 40. 160. 
 Saunders v. Turbeville, 2 Hum. 
 
 272. 59. 
 
 Sawyer v. Pennell, 19 Me. 167. 97. 
 Sawyer v. Turpin, 91 U. S. 114. 4. 
 Scharfenburg v. Bishop, 35 Iowa, 
 
 60. 91. 
 
 Scott V. Alford, 53 Tex. 82. 
 
 105, 106, 150. 
 Scott, Evans v., S9 Penn. St. 136. 78. 
 Scott, Whallon v., 10 Watts, 
 
 237. 141. 
 
 Shannon o. Commonwealth, 8 S. 
 
 & E. 444. 157. 
 
 Shattuck 0. Haworth, 91 Penn. 
 
 St. 449. 78. 
 
 Shearer v. Babson, 1 Allen, 486. 142. 
 Sheldon, Griswold v., 4 N. Y. 
 
 581. 4, 40, 84, 116. 
 
 Shelly, Conkling v., 28 N. Y. 
 
 360. 41, 43. 
 
 Shepard, Pamsworth v., 6 Vt. 
 
 521. 110. 
 
 Shepherd v. Trigg, 7 Mo. 151. 56. 
 Sheppards v. Turpin, 3 Grat. 357. 
 
 35, 131, 147. 
 Shurtleff v. Willard, 19 Pick. 
 
 202. 95, 159. 
 
 Sibley ». Hood, 3 Mo. 290. 56. 
 
 Sibley, Wingler v., 35 Mich. 231. 89. 
 Sill, Tallmadge v., 21 Barb. 34. 161. 
 Simmons, Carpenter v., 1 Eob. 
 
 360. 42. 
 
 Simmons ». Jenkins, 76 111. 479. 55. 
 Simpson, Hardy v., 13 Ired. Law, 
 
 132. 83. 
 
 Simpson v. Mitchell, 8 Ter. 416. 
 
 59, 159. 
 Sipe V. Barman, 26 Grat. 663. 159. 
 Skinner, Hardy v., 9 Ired. Law, 
 
 191. 82, 83, 84. 
 
 Slafter, Ball v., 26 Hun, 353. 42. 
 
 Slater, Spencer v., L. K. 4 (J. B. 
 
 D. 13. 30. 
 
 Sleeper v. Chapman, 121 Mass. 
 404. 96. 
 
 SECTION- 
 
 Small, Bank v., 7 Fed. Eep. 837. 70. 
 Smith V. Acker, 28 Wend. 653. 
 
 39, 50. 
 Smith, Allen v., 10 Mass. 308. 95. 
 Smith, Burd v., 4 Dall. 70. 160. 
 
 Smith V. Conkwright, 28 Minn. 
 
 23. 158. 
 
 Smith V. Cooper, 27 Hun, 565, 42. 
 Smith, Doyle v., 1 Cold. 15. 
 
 59, 60, 141. 
 Smith V. Ely, 10 N. B. E. 553. 68, 143. 
 Smith V. Hurst, 10 Hare, 30. 157. 
 
 Smith V. Kenney, 1 Mackey, 12 ; 
 
 9 Wash. Law Eep. 69. 68. 
 
 Smith V. Leavitts, 10 Ala. 92. 
 
 101, 132. 
 Smith V. McLean, 10 N. B. E. 
 
 260. 68, 147. 
 
 Smith, Meade v., 16 Conn. 846. 79. 
 Smith, Mining Co. v., L. E. 4 
 
 Eng. & I. Ap. 64. 151. 
 
 Smith, Wordall v , 1 Camp. 332. 
 
 11, 27. 
 Snodgrass, West v., 17 Ala. 549. 157. 
 Sole, Stephens v., 1 Atk. 157. 7. 
 
 Sommerville v. Horton, 4 Yer. 
 
 540 ; 26 Am. Dec. 242. 59, 95, 159. 
 Southard v. Benner, 72 N. Y. 
 
 424. 43, 122, 147. 
 
 Southard v. Pinckney, 6 N. Y. 
 
 W. D. 328. 43. 
 
 Spackman v. Evans, L. E. 3 Eng. 
 
 & 1. Ap. 171. 151. 
 
 Sparks v. Mack, 31 Arks. 666. 86, 160. 
 Spence v. Bagwell, 6 Grat. 444. 35. 
 Spence v. Dunlap, 6 Lea, 457. 151. 
 Spencer v. Slater, L. E. 4 Q. B. 
 
 D. 13. 30. 
 
 Spies V. Boyd, 1 E. D. Smith, 
 
 445. 42. 
 
 Staff, Atty. Genl. v., 2 Cromp. & 
 
 Mees. 124. 161. 
 
 Stafford v. Whitcomb, 8 Allen, 
 
 518. 142. 
 
 Standen v. Bullock, 3 Coke, 82. 157. 
 Stanhope, Bethel v., Cro. Eliz. 
 810. 157. 
 
308 
 
 CASES CITED. 
 
 SBCTION 
 
 Stanley v. Bunee, 27 Mo. 269. 56, 147. 
 State V. D'Oench, 31 Mo. 453. 57, 58. 
 State V. Jacob, 2 Mo. Ap. 183. 57. 
 State V. Mueller, 10 Mo App. 87. 75. 
 , State V. Tasker, 31 Mo. 445. 
 
 56, 57, 148. 
 Stedman v. Vickery, 42 Me. 132. 97. 
 Steel V. Brown, 1 Taunt. 381. 24. 
 Stein V. Munch, 24 Minn. 390. 
 
 51, 143, 147. 
 Steinart v. Deuster, 23 Wis. 136. 
 
 52, 147. 
 Stephens «. Pence, 56 Iowa, 257. 91. 
 Stephens v. Sole, 1 Atk. 157. 7. 
 
 Stern, Morris v., 80 Ind. 227. 76. 
 
 Stetson, Mitchell v., 64 (ja. 442. 111. 
 Stevens, Pettibone v., 15 Conn. 
 
 19 ; 38 Am. Dec. 57. 79, 80, 119. 
 Steward v. Lombe, 1 Brod. & B. 
 
 506. 26. 
 
 Stewart, Ogden v., 29 HI. 122. 
 
 54, 142. 
 Stinson, Edwards v., 59 Ga. 443. 111. 
 Stockwell, Lang »., 55 N. H. 561. 
 
 44, 160. 
 Stoddard v. Butler, 20 "Wend. 
 
 597. 39. 
 
 Stoddard, Butler v., 7 Paige, 163. 39. 
 Stone V. Grubham, 2 Bulst. 225. 18. 
 Strangford, Commonwealth v., 
 
 112 Mass. 289. 96. 
 
 Stringer, Bigelow v., 40 Mo. 195. 151. 
 Stuart, Crooks v., 2 McCra. 13 ; 
 
 7 Ped. Eep. 800. ' 68, 70. 
 
 Sturtevant e. Ballard, 9 Johns. 
 
 337; 6 Am. Dec. 281. II9. 
 
 Sullivan, "Wilson v., 58 N. H. 
 
 260. 46, 139. 
 
 Summers v. Eoos, 42 Miss. 749 ; 
 
 2 Am. Eep. 653. 63. 
 
 Sumner, Harris v., 2 Pick. 129. 95. 
 Sutherland, Book Co. v., 10 Neb. 
 
 834- 87, 139. 
 
 Sutherland, Blmes v., 7 Ala. 262. 
 
 102, 159. 
 Swartwood,Dutcher v., 15 Hun, 
 
 42, 148. 
 
 81. 
 
 SECTION 
 
 Swiney, Macdona v., 8 Irish L. 
 
 Kep. 73. 29. 
 
 Symmons, Ez parte, 14 Ch. D. 
 
 693. 31. 
 
 Tailbois, "Wimbish v., Plowden, 
 
 38. 121, 149. 
 
 Tallmadge v. Sill, 21 Barb. 34. 161. 
 Tallon V. Ellison, 3 Neb. 63. 87. 
 
 Tarback v. Marbury, 2 "Vernon, 
 
 510. 157. 
 
 Tasker, State v., 31 Me. 445. 
 
 56, 57, 148. 
 Taylor v. McKeand, L. K. 5 C. P. ' 
 
 Div. 358. 31. 
 
 Terry, Darvill «., 6 H. & N. 812. 32. 
 Thompson, Brown v., 59 Me. 
 
 372. 97. 
 
 Thompson v. Dolliver, 132 Mass. 
 
 103. • 96, 141. 
 
 Thompson v. Poerstel, 10 Mo. 
 
 Ap. 290. 57. 
 
 Thompson, Gibbs v., 7 Hum. 
 
 179. 158. 
 
 Thompson v. Towne, 2 "Vernon, 
 
 319. 161. 
 
 Thornhill, Benton v., 7 Taunt. 
 
 149. 14. 
 
 Thweatt, Johnson v., 18 Ala. 741. 
 
 101, 150. 
 Tickner v. "Wiswall, 9 Ala. 305. 101. 
 Ticknor, Wiswall v., 6 Ala. 178. 101. 
 Tompkins, Peacock v., Meigs, 
 
 317. 59. 
 
 Tootle, Hewson v., 72 Mo. 632. 
 
 56, 58, 139. 
 Torbert v. Hayden, 11 Iowa, 435. 
 
 90,92,132. 
 Town, Oliver v., 28 Wis. 328. 52. 
 Towne, Thompson v., 2 Vernon, 
 
 319. 161. 
 
 Townshend v. Windham, 2 Ves. 
 
 sr- 1. 161. 
 
 Toye, Hinton v., 1 Atk. 465. 161. 
 
 Trieber, Green v., 3 Md. 11. 160. 
 
 Triebert v. Burgess, 11 Md. 452. 108. 
 Trigg, Shepherd «., 7 Mo. 151. 56." 
 
CASES CITED. 
 
 309 
 
 . ^ SECTION 
 
 Trotter v. Howard, 1 Hawks, 820. 81. 
 Troughton v. Troughton, 8 Atk. 
 
 656. 161. 
 
 •furbeville, Saunders v., 2 Hum. 
 
 272. 59.. 
 
 Turner, Jordan v., 3 Blackf. 309. 
 
 74. 
 Turner v. Killian, 12 Neb. 580. 87. 
 Turpin, Sawyer v., 91 U. S. 114. 4. 
 Turpin, Sheppards v., 3 Grat. 
 
 857. 35, 131, 147. 
 
 Tuttle, Armstrong v., 34 Mo. 
 
 432. 56. 
 
 Twelves, Constantino v., 29 Ala. 
 
 607. 101. 
 
 "Twyne's Case, 3 Coke, 80. 
 
 4, 5, 6, 16, 17, 21, 29, 81, 122, 131. 
 Tyrer v. Littleton, 2 Brownlow, 
 
 187. 157. 
 
 Vanmeter v. Estill, 78 Ky. 456. 99. 
 Vanmetre, Hombeck v., 9 Ohio, 
 
 153. 48. 
 
 Vanpelt v. Veghte, 14 N. J. Law, 
 
 207. 109. 
 
 Vaughan, Jenkyft v., 3 Drewry, 
 
 419. 157. 
 
 Vegiite, Vanpelt v., 14 N. J. 
 
 Law, 207. ■ 109. 
 
 Vernon v. Morton, 8 Dana, 247. 98. 
 Vickery, Stedman v., 42 Me. 132. 97. 
 Voorhis v. Langsdorf, 31 Mo. 451. 56. 
 Vultee, Marston v., 8 Bosw. 129. 
 
 42, 148. 
 
 Wade II. Green, 3 Hum. 546. 159. 
 Wakeman, Grover v., 11 Wend. 
 
 187. 151, 160. 
 
 Wakeman u. Grover, 4 Paige, 
 
 ,23. 160. 
 
 Walker v. Clay, 42 L. T. (n. s.) 
 
 369. 31, 142. 
 
 Walker, Grimshaw v., 12 Ala, 
 
 101. 160. 
 
 Wallace, Foster v., 2 Mo. 231. 56. 
 Walter ». Wimer, 24 Mo. 63. 56. 
 V7ard, Bainton v., 2 Atk. 172. 161. 
 
 SECTION 
 
 Ward, McLaughlin v., 77 Ind. 
 
 388. 75, 76. 
 
 Warner, Bishop v., 19 Conn. 460. 
 
 79, 80, 148. 
 Warner, Hudson v., 2 Har. & 
 
 Gill, 415. 108. 
 
 Warren, Frost v., 42 N. Y. 204. 
 
 41, 43. 
 Waterman, Dunham v., 17 N. 
 
 Y. 9. 151. 
 
 Watkins v. Pintard, 1 N. J. Law, 
 
 378. 109. 
 
 Watson V. Williams, 4 Blackf. 
 
 26 ; 28 Am. Dec. 86. 74. 
 
 Waugh, Milburn v., 11 Mo. 869. 56. 
 Webb, Brown v., 20 Ohio, 389. 49. 
 Webb, Hall v., 28 Mo. 408. 56. 
 
 Weber v. Armstrong, 70 Mo. 
 
 217. 56, 144. 
 
 Weeks v. Prescott, 53 Vt. 57. 110. 
 Weimar, Wood v., 104 U. S. 786. 71. 
 Welch, Keynolds v., 47 Ala. 200. 
 
 102, 150. 
 Welsh V. Bekey, 1 Penn. 57. 77, 148. 
 Welsh, Levy v., 2 Edw. Ch. 438. 
 
 89, 40. 
 West, Bank v., 46 Me. 15. 142. 
 
 West V. Snodgrass, 17 Ala. 549. 157. 
 Westbury, Bank v., 16 Hun, 458. 42. 
 Whallon v. Scott, 10 Watts, 237. 141. 
 Whedon, Gregory v., 8 Neb. 873. 87. 
 Wheelden v. Wilson, ^4 Me, 11. 
 
 97, 151. 
 Wheeler, Baxter v., 9 Pick. 21. 95. 
 Wheeler, Greenebaum v., 90 111. 
 
 296. 55, 131. 
 
 Whitbread, Janes v., 5 Eng. L. 
 
 &. B. 431. • 140. 
 
 Whitcomb, Stafford v., 8 Allen, 
 
 518. 142. 
 
 White V. Graves, 68 M.o. 218. 57. 
 White, Partridge v., 59 Me. 564. 97. 
 Whitwell, Johnson v., 7 Pick. 71. 
 
 95. 
 Wilcox, Curtis v., 49 Mich. 425. 89. 
 Wilcoxson, Ins. Co. v., 21 Ind. 
 355. 74, 75, 147. 
 
310 
 
 CASES CITED. 
 
 SECTION 
 
 Wiley V. Knight, 27 Ala. 336. 
 
 102, 159. 
 Wilhelmi t. Leonard, 13 Iowa, 
 
 330. 90. 
 
 Willard, Shurtleff v., 19 Pick. 202. 
 
 95, 159. 
 Williams v. Briggs, 11 E. I. 476. 
 
 107. 
 Williams, Coate v.., 9 Eng. L. & 
 
 E. 481. 140. 
 
 Williams v. Evans, 6 Neb. 216. 87. 
 Williams, Ex parte, 11 Ves. 3. 22. 
 Williams, Ford v., 24 N. T. 359. 
 
 41, 43, 139. 
 Williams, Goodrich »., 50 Ga.425. 
 
 Ill, 132. 
 Williams, Horton v., 21 Minn. 187. 
 
 50, 52, 54, 87, 147. 
 Williams, Watson v., 4 Blackf. 
 
 26 ; 28 Am. Dec. 36. 74. 
 
 Williams v. Winsor, 12 K. I. 9. 107. 
 Willison V. Desenberg, 41 Mich. 
 
 156. 89. 
 
 Wilson, Bead v., 22 111. 377. 54. 
 
 Wilson, Ross v., 7 Bush, 29, 98. 
 
 Wilson u. Sullivan, 58 N. :^260. 
 
 46, 139. 
 Wilson, Wheeldene., 44 Me. II. 
 
 97, 151. 
 Wilson & Wormal's Case, God- 
 bolt, 161. 160. 
 Wilt V. Frank,lin, 1 Binn. 502; 2 
 
 Am. Dec. 474. 78, 151> 
 
 Wimbish v. Tailbois, Plowden, 38. 
 
 121, 149. 
 Wimer, Brooks v., 20 Mo. 503. 
 
 56, 57, 148. 
 Wimer, Walter v., 24 Mo. 63. 56. 
 Windham, Townshend v., 2 Ves. 
 
 sr. 1. 161. 
 
 Windsor, Delopu., 26 La. An. 185. 
 
 113. 
 Wingler v. Sibley, 35 Mich. 231. 89. 
 
 SECTION" 
 
 Winkley v. Hill, 9 N. H. 31 ; 81 
 
 Am. Dec. 215. 44. 
 
 WJnne, Russell v., 37 N. Y. 591. 
 
 41, 43, 122, 131, 148 
 Winslow, Mitchell v., 2 Story, 630. 
 
 47, 56, 70, 73, 130. 
 Winsor, Williams v., 12 E. 1. 9. 107. 
 Wlswall, Ticknor v., 9 Ala. 305. 101. 
 Wiswall V. Ticknor, 6 Ala. 178. 101. 
 Wolfe V. Dorr, 24 Me. 104. 97. 
 
 Wood V. Lowry, 17 Wend. 492. 
 
 89,40,41,50,71,87,148. 
 Wood, Moore v., 100 111. 451. 151. 
 Wood V. Weimar, 104 U. S. 786. 71. 
 Wooderman v. Baldock, 8 Taunt. 
 
 676. 25. 
 
 Woodfln, Foster »., 11 Ired. Law, 
 
 339. 81. 
 
 Woodrow V. Davis, 2 B. Mon. 298. 
 
 98. 
 Woods, Clow v., 5 S. <fe R. 275 ; 9 
 
 Am. Dec. 346. 77, 78, 148. 
 
 Woodward v. Goodman, 3 Cent. 
 
 L. Jour. 43. 60, 141. 
 
 Woodward, Russell v., 10 Pick. 
 
 408. 95. 
 
 WooUoton, Jarman v., 3 Term, 
 
 618. 29. 
 
 Wordall v. Smith, 1 Camp. 332. 
 
 11, 27. 
 Worman v. Kramer, 73 Penn. St. 
 
 378. 78. 
 
 Worseley v. De Mattos, 1 Burr. 
 
 467. 8, 119, 122, 131. 
 
 Wright, MoLachlan »., 3 Wend. 
 
 348. 88. 
 
 Yates V. Olmsted, 56 N. T. 632 ; 
 
 65 Barb. 43. 41, 55. 
 
 Young V. Booe, 11 Ired. Law, 347. 
 
 82, 84. 
 Y'oung, Nailer v., 7 Lea, 735. 60, 147. 
 Young, Ross v., 5 Sneed, 627. 159. 
 
*:v* "'" 
 
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