bust deed of 18 hume 191
February 28, 1895.]
and defest creditors, as it could have been produced at any time, and he contended that under the statute any disposal of property, whether voluntary or not, whether the assignors were or were not indebted at the time, if so framed, or likely to operate, so as to defeat or de- lay creditors present or future, if bearing on it the palpable marks of frand as recognized by the Court of Justice, will be at once set aside if the Court finds that it is not bona fide, and if the effect of it is to defe it and delay oreditors. Mr. Franois then referred to the Statute 13 Elizabeth, chap. 5, remarking that the first two sectious avoided all feoffments, gifts, grants, etc., which had been devised or made with the and or intent of delaying, hindering, or defrauding creditors and others; that these sections were complete and contained no proviso or exception: That all deeds having the intent or purpose aforesaid where declared void. Section 6 made an exception only for estates in lands, grants, eto, which had been upon good consideration and bona fide lawfully conveyed, ete, and the assignees must be inuocent of the fraud, if any exists. Mr. Francis then proceeded to consider the recognized marks or badges of fraud. (1.) The generality of the assignment. (2.) The omission of the schedule which if it does not invalidate the document is a badge of fraud. (3.) The concealment of the charge, which is the greatest. (4.) It is given for a past consider ation, and not for the correct sum, and therefore
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the plaintiffs having alleged fraud, it is for tion and later on sold to Mr. Ewen Cameron, them to prove it, and they have not done so. According to documents B, E, F, and K, the I will now proceed to set out the facts which I registered Crown lessee of Inland lots No. 83 find admitted or proved. I will then refer to and 721 and Marine lots 202 and 203 is John the large number of cases which have been cited | Murray Forbes. With reference to paragraph and then give the grounds for my decision. Be-1 of the petition stating that at the time of the yond Mr. Forbes's statement that the letter was said letter of hypothecation the said firm was the first security given, and that the only object about to take over the fleet of steamers of the was to secure J. M. Forbes, as he should not China Merchants' Steam Navigation Company, have lent money without security, we have with the wharf, godown, and other property no evidence under what circumstances it was of the said company, and to incur heavy asked for or given; but by letter or risks and liabilities, there is no evidence memorandum dated the 31st March, 1884, whatever, and with regard to the allegation also addressed to John Murray Forbes, Jr., trustee contained in that 10th paragraph that the said for Howqua, and signed "Russell & Co.." the firm was heavily indebted to the plaintiff said Russell & Co. acknowledged to have de- Banks or some of them we have only the evidence posited with him “the documents and securities of Mr. William Howell Forbes that at the time for property or money hereunder mentioned the letter was given the firm of Russell & Co. as collateral security for the payment of was in good credit and able to meet its engage- our promissory note dated this 31st day of mants, and that the Banks lost nothing until March, 1884, for the sum of taels two the present time. With regard to par. 17 stating hundred and fifty-eight thousand, Shanghai that possession of the documents and securities currency, and interest thereon according to the mentioned in the said charge was never given to rate of taels seven per cent. charged by year," J. M. Forbes, but remained in the control of The letter then went on to confer certain powers William Howell Forbes or the other partners for on the said John Murray Forbes in case of de- the time being in charge in Hongkong, and were fault in the payment of the said sum. After the sold, trausferred, and dealt with in the ordinary signature is written in the sime hand and ink course of the business of the firm we have as the body of the letter. "Particulars of the evidence of Mr. W. H. Forbes, who says securities above referred to." There is no doubt the title deeds of the property in Hongkong that at the time the said letter was signed and were locked up in the firm's safe bere. I parted handed over to John Murray Forbes no particu- with the Hongkong deeds in June of this year e burden of proving the debt is on the defend.lars were given. What now appears as follow- to Mr. Ewens," and in cross-examination he said ant. (5). That the assignor remained in possessioning that signature was added afterwards in "The shares were all handed over; but the title of the property. Mr. Francis then, as part of his
deeds of the Hongkong property were in my speech, read passages from May on Fraud, dwell
private safe. I knew of the documents and I was ing particularly ou passages respecting the badges
holding them for Mr. John Murray Forbes of fraud which, unless satisfactorily explained, will
and I made no use of them." With respect to be evidence of bad faith, viz.. the generality of
paragraph 12 alleging that the fi m of Russell & Co. the gift; the continuance in possession; se-
the oreoy; frandalent preference, and again cited May on Fraud, p. 96 A conveyance by a debtor for the benefit of creditors to whom the conveyance is not communicated and who was not in any manner privy to it will not be good against other creditors; that the whole transaction must be free from doubt. Mr. Francis commented on the blank schedule, amounting practically to a power of re- Vocation which has always been looked upon as a strong circumstance of fraud, and will in gene- ral make a deed void. Mr. Francis when alluding to other passages in May, pp. 512, 520, 528, again referred to the burthen of proof as arising from the petition and answer and the facts of the case and then referred to the following casos (here follows a long list of authorities). and in the course of his argument on these varions passages and authorities put forward two propositions.-1st. That no disposition of pro- perty for a valuable consideration will stand if the effect of it is to defeat or delay creditors; and, secondly, if there is fraud, or signs of frand, it is indifferent whether the settlement was for valuable consideration or not or whether there were debts or bot. Mr. Leach chiefly relies on the absence of evidence of any fraud given by the plaintiffs in support of his allega- tion contained in the paragraph of their petition that the whole of these pleadings are based solely and entirely on fraud or fraudulent ntent, and contends that in that case, as this is a settlement for valuable coneration, the whole burthen of proof is on the plaintiff. That as the plaintiff had alleged fraud, in p. 13, they must come prepared to prove it; that he relies en Forbes's evidence to the effect that the security was given bona fide to J. M. Forbes because he had advanced trust money without security, and contends that there must be facts proved which would lead the Court to say that in the mind of Forbes at the time there was an intent to defraud. Mr. Leach then dealt with the several badges or evidence of fraud put forward by Mr. Francis and commented on the eases cited, pointing out the difference between cases of voluntary settlement aud conveyances for valuable consideration, and after explaining the different facts, which Mr. Francis has termed badges of fraud, contended that these were all consistent with honest intention on the part of Howell Forbes to secure the sum advanced by J. Murray Forbes out of the Flowqua trust; and that as it was for valuable consideration I must looking at all the circumstances of the caso, be satisfied there was a fraudulent in- tent. Suspicions are not sufficient; I must be satisfied that there was actual fraud. In a word, Mr. Leach's contention has been that
another handwriting. At the bottom of that page and of the next are the initials "R. & Co.," which to all appearances were written and so placed at the time of the signing of the letter. According to that schedule of particulars the following Hongkong real estate was pledged
not at the
to time indebted the sum said Howqua in
of Tls. Inland Lot No. 83, The Hermitager Inland Lot No. 148, Roge Hill.
258.000 or in any sum of money, we have the Inland Lot No. 578, Rose Hill,
evidence of W. H. Forbes, given in the de bena Inland Lot No. 721, Kerosino Godowne, X
`esse examination aforesaid, to the effect that he Marine Lot No. 202, Godown. Marine Lot No. 203, Godown.
had been senior partner of the firm for fifteen Marino Lot No. 225, Remaining portion of section years and during the greater part of that time A of 22 and 23, Praya West he had been mostly resident in Hongkong and and 22 and 25, Tunga Lane, managing the business here, and he says that the Then comes mention of the Foochow property. sum of Tls. 258,000 referred to in the hypothe the title deeds of which are said to be in J. cation was an old debt; it was only the settlement M. Forbes's, Jun., tia box in Hongkong (see W. H. of an old account; he could not give any dates Forbes's letter dated January 21st. 1885). The when the money was advanced; he would say that reference to this letter clearly proves that this part of it was advanced since he joined in 1861 schedule was not written until after date of that and part of it beforo. He does not think there letter. Amongst the property mentioned in this are any accounts in Hongkong showing when schedule is Marine lot No. 25. At the date the money was advanced; they had a running note of the letter of hypothecation it did not belong to with Howqna which appeared in the Hongkong Russell Co., who bought it in July or August, books long ago and then it was transferred to 1884, and it was sold to Mr. Ewen Cameron Shanghai; it appeared in the books as bills pay- on the 17th February, 1886. From these able; be cold not tell when the amount was ad- two dates, it is songht to infer when the vanced; so far as he knew the promissory note of schedule was added. With respect 10 the Howqua was taken out of the accounts between ownership of the leasehold mentioned in that 1884 and 1886 and there may have been payments schedule, the 10th paragraph of the petition made in reduction of the 258,000 taels; the prin alleges that the whole of the contentions of the cipal and perhaps only reduction was the pro- plaintiffs and defendants are fully set out in the missory note reducing in 1886 the amount from 10th paragraph of the petition and in the answer 258.000 to 157,000 taels, and on cross-examination thereto. The only point in dispute seems to be he said there wasan old Bowqua debt and there was whether this property was held by Murray another sum lent by J. M. Forbes which was in- Forbes as trustee for the firm Russell & Co. and cluded in the 258,000, but we intended that the Then in 1886 for the successive partners therein, or for him- old debt was not to be included. self and two other members of the firm, viz., Tls. 157,000 represented the trust and Tis. 101,000 William Howell Forbes and De Courcy Forbes. represented the old debt due by the firm to How- It was then wholly unencumbered. In the qua personally, and again later on he says that year 1888 the Crown leases for the properties
the knew that J. Murray Forbes got the present in Hongkong were surrendered and fr shtrust in 1877. He held a distinct sum of money. leases were granted in the name solely of John on trust nothing to do with the two laks, and be Murray Forbes; but in support of the statement advanced us monies out of this trust from time that these new leases were granted in the name
to time; he had no security until the letter of aforesaid solely for the purpose of giving effect bypothecation was signed; the advances must to the said letter of Lypothecation;-the-defend. have been made before this; that letter was the ants have offered no evidence, although they first security given; it was given in considera- could easily have proved them and made the tion of a previous advance of trust funds.” task of the Court easier than it is at present. Beyond the facts admitted the following may After considering the evidence of W. H. Forbes therefore be taken:-On the 31st March, 1884. I find that these leaseholds in 1884 were the Russell & Co. being indebted to J. M.
Forbes. trustee for Howqua, în a property of Russell & Co.; they were then re. gistered in the name of J. M. Forbes and Tls. 157,000 for monies advanced by him remained so until the registration of the letter out of the trust funds, gave him a of hypothecation. Of the lots of Hongkong missory note for the sum of Tls. 258,000, which property mentioned in the said schedule as hav- represented not only the trust money but also ing been given as security. the following have an old debt of Tls. 101,000, which at the time since the date of the letter been sold, namely:
they did not intend to include, and as a collateral Inland Lot No. 148, Rose Hill
security gave him the letter of hypothecation, Inland Lot No 578, Rose Hill.
the terms of which I have above ret out. There is no evidence of why they were sold or cording to this letter they purposed to have de- what became of the proceeds. Marine Lot posited with J. M. Forbes the documents and, No. 225 was purchased by Russell & Co. sub- securities for property or money as hereinafter sequent to the date of the letter of hypotheca- mentioned, the reasons given by W. H. Forbes
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