#### Cox v. Jackson.

A person who has a chati cl in possession belonging to another, and exchanges it tor another article, acquires no property in the article taken m exchange, if the real owner thinks proper to approve of the transaction. Wlu-re the possession of a chattel does not follow the conveyance, it is ■ strong circumstance to show fraud, though it may be explained or rebutted.

Ti espass to recover the value of a horse sold by the. Defendant, a Constable, to satisfy an execution delivered *489to him at tbe suit of Williams v. John Cox, the brother of the Plaintiff, upon which he took the horse in question as the proneríy oí John. The Plaintiff alleges the horse was his. Tiie evidence proved John to have, been very much indebted to sundry persons — that he liad a horse and soma other trifling articles — Hun Collins had a judgment- against him, and took out execution and put. it into the hands of an officer; that other officers who had executions found it, and levied the execution on the horse and other arti-cíes, and sold the smaller articles, and did not sell the horse for some time, leaving him in the possession of John Cox, until it began to be rumored that tin* execution was fraudulent; when Collins ordered the officer to sell, who sold accordingly, and George Cox, the brother of John, as the agent of Collins, became the purchaser, and loft the horse in the possession of John for some time, and until the Defendant levied Williams’ execution on him, and appointed a day of sale; on which day, Collins appeared and provul the sale and purchase as above, and bad the horse delivered to him ; and the next morning, sold him to George Cox, without receiving any money, but only taking ids note ; part of* which Collins said was paid after the trial of this cause in the County Court, about 18 months after the date of Use note, by discounting a debt with a creditor of bis — Coe residue be said was remitted in the hands of George Cox, to satisfy a debt of Collins due to another creditor, which debt however Isas not yer been paid. A short time- after George purchased the horse, he was again in the possession of John, and continued in his possession till he. exchanged him as his own for another horse with a stranger, receiving some money, as the difference of value. Soon after tbe. exchange, he brought tins horse received from the stranger, to George, who approved of the exchange and Sent the horse to John; in whoso possession he- continued for some months, and until tbe Defendant seized and sold him to satisfy Williams' execution. It was proven, that George had ridden this latter horse once or twice offer the exchange took place.

Mr. Williams — Before Mr. Taylor proceeds to make his remarks upon this case, it will be proper for me to apprize him of the grounds of our defence. ’We rely principally upon ‘his, that the transaction between Collins and George ••uni John Cox, was fraudulent and calculated to protect the horse against the claim of other ere ■ *490(]itors, and therefore void. And for the purpose of ascertaining what are the marks of a fraudulent transaction, we shall rely'upon Twigne’s case, S Co. Rep. 81 — being a construction upon the art of 13 Elia. ch. 5, from which our own act of 17i5, ch. 38, sec. 8, is taken.

Taylor — The case cited by Mr. Williams is certainly sound law, hut it can never be made to hear upon a case circumstanced as the present one is. None of the marks of fraud laid down in Twigne’s case, are found in that now before the court. The sale and purchase,by Collins were not made pending any suit, bj another creditor with a design to defeat his suit. The property when purchased was not pul into the possession of John by Collins, or with his consent. These is no trust between them, and these transactions were not done in secret; but here was an open levying of execution, advertising it for sale, and an open purchase, publicly made by the highest bidder. One of the most prominent features of fraud, is its being done in .wcrct; here nothing like secrecy is attempted. After the purchase of Collins, John indeed had possession again ; and possession of the former owner, after a sale made by him, is mentioned in Twigne’s case as a mark of fraud ; but every mark ot fraud may he explained by circumstances, and overturned where the circumstances prove that no fraud was intended. in our case, the horse was not left with John Cox by Collins’s consent, hut after he understood the horse had been left in his possession, he then agreed John Cox should keep him for some short time, (hat he might procure the money in the mean time, if he could, audreueem the horse. The money was what he was chiefly anxious to obtain. This shews he was not in John’s possession for the purpose of defrauding creditors — it shews the purchase was not made to vest the legal property in ihe purchaser with a view of securing the use to the former owner. It is not every possession of the former owner after a sale, that will make it fraudulent; but only such a possession as is incapable of a fair explanation, and shews that the benefit of the property was intended for the former owner. Notwithstanding the sale, if ttie retaining of possession by John, is explained by the evidence to havs^ been for no fraudulent purpose, then this ca-e has not. one mark of fraud mentioned iu the case cited by Mr. Williams.

*491 Williams for tin* Defendant

\Viicrc a transaction is secret betweeen a creditor and ois debtor, for vesting the property of the latter in Hie former, to the. defeaiing of other creditors, it is surely a mark of fraud as Mr. Taylor has admirted ; but this though it is one feature of a fraudulent transaction, is not the only one — a transaction may be-ft audulent though done in the most public manner. I take ibis to be one of the definitions of fraud — > where a creditor forms a scheme with his d¡ btor to become the ostensible purchaser of his property, and to allow him the benefit of it in such a manner that o>her creditors cannot resort to if for the satisfaction of their debts, whether the means made use of for these purposes were secret or public, or whether the creditor icraves an apparent transfer of the properly for his debt ¡o the exrlusion of other creditors, whet* in reality, the beneficial interest is not vest'-d in him, but remains with the debtor. A creditor’s debt, although it he a just one, and the properly received in satisfaction of it, be of no more value than liie debt, yet if it be received not for the real and true purpose of satisfying his debt, but for the purpose of putting the property out of the reach of other creditors, it is not. a bonajide transaction, not what it purports to b>*— in appearance it is one thing, in reality another; and the true enquiry always is, if the transaction is in reality, what it purports to be or not. The true answer is to be collected, not from positive evidence only, for that is seldom to be had in cases of fraud; but frmn a careful attention to and comparison of circumstances: and every transaction, whether secret or public, by way of voluntary sale and purchase, or by way of judgment, execution and sale made publicly, when attended by circumstances sufficiently indicative of fraud, may be rendered void by them. iNo possible form or legal ceremony is exempt from scrutiny when suspected of fraud, nor from being made void by it. The law has been so enIargén from time to time, for the purpose of detecting and obviating fraud in ail shapes, that it is n* w competent to poduce the effect of rendering void any tr msactions with which fraud is mingled. The Legislature at a very early period. were obliged to fix their attention upon the inventions >f men in involved circumstmces. Conveyances of estilles, in trust for the grantor, first called their attention, and they applied a remedy by the 50th Echo. 3. 3 *492 Reev. 401. After this, though no trust was expressed, tli*- grantor took the profits not withstanding the c mvey-anr<‘ — this also whs remedied. 3 Reeves 176. 174 173. £ Rd. 2. Debtors betook themselves to .privileged plores, by toe superstition of the times they could not he taken from thence — this also was remedied. £ Rd. 2. St. £c. 3. Then eatne tin* 3d H. 7. c 4. making all gifts m trust for the donor, void. 4 Reeves 140, 141. Then the l.^th EL c. 5. intended to overturn every possible case of fraud ; and 1 -fitly our own ait of 1715. c. 38. So solicitous have different Legislatures been to suppress fraud in whatever shape it may endeavor to conceal itself The endeavors of the Legislature have been seconded by the courts of justice in interpreting these several acts. The rule of interpretation lias always been, to give the most extensive operation to these aets in suppiession of fraud ; so that at !|*'3 although a convey anee may purport to be ab-sojUfe> if any circumstance attends it from whence a jury may reasonably believe it to be fraudulent, it is void. Thus if a man conveys by feoffment, and still takes the profits, the law deems it a mark of fraud — the conveyance is mn what, it purports to be, and is void if the jury will find it fraudulent. 3 Bac. Jib. 60S. 6''4. If a man indebted, conveys all bis property to one of his eredi'ors, and yet continues in possession and uses it as his own, it is fraudulent. 3 Re, 81. If 'he debtor has goods to the value of twenty pounds, and five several creditors to the value of twenty pounds each, and he conveys to the first creditor I a is effects, upon a secret trust, that the creditor will deal favorably with him, and let him have the use of the go c,s or some part thereof, it is fraudulent; or where tie ..eiler continues in possession notwithstanding the sale. Ere, Ch. £85. Or where the debtor conveys all liis estate wiibout exception of any part, the generality of the conveyance induce!, suspicion, and is evidence of fraud. 2 Bac. M, 604, 605. Or if the seller continues in pns-ession, and is to account annually. 2 Bac, M. 608. Or where, though a valuable consideration be given, the conveyance is not bona,fide, but with a view to defeat some credhor or purchaser. Cowp. 433,434. Or where a mao initig sued and issue joined, before trial, conveys to a third person to the use of his son, with a proviso to be void up. n lender of a small sum by th< grantor, who still co•■¡nines to uke the profits. 3 Dyer £94. Or where a principal grants to his surety, before the surety is dam*493aged, fo the prejudice of another person. 3 Dyer Or where a creditor has his execution lev ¡éd, and orders the sale to be delayed,to the prejudice of oilier mdit'>rs. 1 PFÜS- 44. Or where a landlord distrains the father’s goods and sells them-, and the son porch vses, and the father continues in possession. Pre. Oh. 233. AH these and the like-circumstances, are the indicia of fraud ; and none of them stronger 'han that ofthcfmmer owner stili continuing the possession after a sale.

in the present case, John Cox, the debtor, was continued in possession after a seizure by the Constable, until it became necessary to sell, to suppress the clamor of the neighborhoods After the saie, his brother was made the agent of the creditor, and he is stdl continued in possession, until the execution of another creditor is levied. Then the former purchaser interposes his claim, and sells to the brother, for which he has never re,reived any thing; and immediately afterwards, John Cox is in possession again, exchanges the horse as Ins o.vn. receives money as the difference of value,, which he never accounted for, nor has ever since been mptired to account, for — so that from the time of the levying on this horse, to the time of the sale to satisfy the last execution, tlie debtor has continued possession all but a few days, during which it was thought proper the brother should keep him, till the suspicions and clamors of the neighborhood had subsided. These circumstances appear to me t*> be completely adequate to the proof offraud between thesepe sons. They shew the, property was not intended to pass into the creditor for his own hern fit, hut that the use was to be for the debtor, to the exclusion of the claims of other creditors. But say. that these circumstances are, nor .efficient, tlr-rc is still another which shews the right th« Constable had to seize and sell the horse gotten in exchange. John exchanged the first mentioned horse as his own, and received the other as his own $ he did not act as the agent of-his brother ; the property therefore, of the la1 ter horse vested in him, however he mignt be liable to itis brother’s action fin* disposing of the other ; and then, die property thus acquired, was clearly liable, to Williams’ execution then in the hands of the officer. It issued th ,’9th September, 1792, and the exchange took p! re ¡.fir,‘Wards,, whilst the execution was in the hands of die. officer. The. law is clear, that goods are bound from the teste of the *494execution; and that the execution will so attach upon them as to disable the debtor from selling them after-wards — they will lie, liable to be seized in the hands of a vendee. Esp. -¡92. 1 Mo. 188. Cro. Elia. 174, 440.— In which latter case, the goods were sold the same day the Writ of execution bore teste ; and though in general, there is no prius or posterius in the same day, yet in suppression of fraud, the execution was construed to have issued before the sale, and so the sale was void — therefore in the present case, as the execution attached upon the horse the instant lie became the property of the debtor, the officer was well justified iu selling him.

Pei’ curiam

'The goods are hound from the teste of (he writ of execution, but that rule will not apply to the present case — John acted as the agent of his brother, who having approved of what he did, ratified the transaction ab initio — so that the property of the latter horse passed to George Cox, and not to John, if the- first horse really Was George's — as to that the court differed.

Judge Wimams. — The circumstances do not amount to proof of fraud — the possession which John lead after the purchase by his brother, is not to be taken into consideration, the brother having a right to indulge him with the rue of his property as he thought proper. As to the possession lie had after the seizure by the constable, and before the sale, that was by the consent of the constable, who was answerable if the property was not after-wards forthcoming, it is the usual practice, with officers in this country, who seldom remove the property before the day of sale, unless where they suspect the Defendant will remove out of the way. As to the possession lie had after the purchase by Collins's agent, that was without the privity of Collins — no part of his possession appears to have been continued by the consent of the creditor, and in that particular differs widely from the possession mentioned in Twigne’s case, and the other subsequent cases grounded upon it.

Judge Haywood. — All the circumstances subsequent' to the sale, are to be taken into consideration as explanatory of the real state of the precedent transactions — the possession of John alw ays continued — George gave nothing for the horse, though a valuable consideration was pretended and held up. The debtor having used the horse *495as bis own, and disposed of him, are visible marks of fraud. The jury (bund for tiie Plain!iff.

Note. — Upon the question of fraud, see Hodges v. Blount, and the note thereto, ante 414.