
    John Clayborn Executor of A. Clayborn v. Hill.
    April Term, 1793.
    ,'ior ip.-ge of Personalty — When Continuing in Possession Not Evidence of Fraud —Failure to Record Deed of Release of Equity of Redemption — Effect.—Continuing in possession by a mortgage of personal property, is not an evidence of fraud, if the mortgage appear to have been made upon a bona fide consideration, and was duly recorded. But the mortgagor haying afterwards by deed released, the equity of redemption to the mortgagee, (which deed was not duly recorded) and still retaining the possession, such deed is void against creditors.
    This was an appeal from a decree of the High Court of Chancery, in a suit commenced there by the appellee, to set aside a conveyance from Herbert Clayborn, to Augustine Clayborn, his father and the testator of the appellant, as being fraudulent. The pray'erof the bill is, that the ap-pellee may be let in to have the estate of an execution, issued against the estate of the said H. Clayborn.
    The bill states, that the plaintiff sued out an execution against the estate of Herbert Clayborn, which in November 1784, was served upon certain slaves, some corn, stocks of cattle and tobacco, then being on a plantation in King William county, in the possession of the said Herbert Clay-born, who exercised over the whole property, every act of ownership. That the property was claimed by Augustine Clay-born, under certain deeds of conveyance to him, from the said Herbert. These conveyances are charged to be fraudulent.
    The answer states, that long previous to the 11th of June 1780, A. Clayborn, and Carter Braxton, having engaged in a ’‘'commercial connection, the former being entitled in right of his wife, to an estate in England, did with her consent sell it to Braxton for .£6000, which formed his part of the stock in trade. That A. Clayborn, some time afterwards, withdrew himself from the business, which had been profitable, and on the 11th of June 1780, relinquished his share of the profits, to his son Herbert, for the consideration of £3000, which Herbert, b3* articles in writing of that date, (reciting, that those profits had been made from a capital, furnished by the wife of A. Clayborn), agreed to paj' to the said A. Clayborn and his wife. That H. Clayborn becoming afterwards indebted to C. Harrison, in a considerable sum of money he, on the 1st of February 1783, by indenture, conveyed to his father, and to the said Harrison, jointly, and to their heirs, 60 slaves by names, some horses, described by names, colour, and the use made of them — sundry articles of household and kitchen furniture, together with sundry-other articles of household furniture; also 36 head of cattle, 40 of sheep, and 100 of hogs; to have, and to hold, all the above property, as per list delivered in, and a charriot and harness, unto the said A. Clayborn, and C. Harrison, &c. in trust, that after default in the said H. Clayborn, in paying the .£3000 to the said A. Clay-born, and the debt due to the said Harrison, they, or either of them, or the survivor, or their heirs, to take and sell the property thereby granted, or a sufficiency thereof to pay' the same, and the surplus, to be paid to said Herbert. This deed was recorded in the court of New Kent county, on the 14th of August 1783.
    In April 1783, H. Clayborn, by deed of trust, conveyed to said A. Clayborn, C. Harrison, and another, three tracts of land lying in King William and New Kent counties, to be by them sold, and the proceeds thereof, applied to the discharge of debts, due from him to the trustees, and of engagements entered into by certain other persons on his account, the surplus to be paid to the said Herbert. This deed was proved in New Kent County Court, on the 14th of August following, and was recorded.
    On the 20th of November 1783, Augustine Clayborn, assigned the two deeds above mentioned, so far as he had an interest in the lands, slaves, and other property conveyed by them, to John Nash, in trust, as a provision for the wife of the said Augustine; this was done, in consideration of her interest in the English estate, which her said husband had sold. This deéd of assignment, was recorded in Sussex County Court.
    *On the 12th of August 1783, Herbert Clayborn (to satisfy an execution, the benefit of which belonged to C. Brax-ton,) sold and conveyed to Braxton, 30 slaves, part of those before conveyed to Clayborn and Harrison, but with the assent of Griffin, a prior mortgagee. The debt due by Herbert Clayborn, to Braxton, being on the same day, paid by A. Clayborn, Brax-ton assigned, over to him and his wife, this bill of sale for the 30 negroes; and this assignment, was proved in New-Kent County Court two days afterwards.
    The answer states, other claims of Augustine Clayborn against Herbert Clay-born ; — and admits the possession of Herbert, (of all the property conveyed to his father,) on the day, when the plaintiff’s execution was levied.
    On the Sth of May 1784, an - account was stated, between Herbert, and Augustine Clayborn, commencing in October 1783; wherein Augustine is charged, as of that day, for slaves (by name,) that day sold £445: 0
    sundries as by account settled
    20th November, 540: 8:
    negroes [by name] then sold 500:
    May 5th 1784, personal estate then sold 303:
    1788: 18:
    And on this day a bill of sale was executed by H. Clayborn, to A. Clayborn, for the above property; the amount to be credited him on his agreement with the said Augustine and his wife, dated the 11th of .Tune 1780. This bill of sale is proved, and admitted to record in New Kent County Court, on the 14th of April 1785. The property conveyed by this bill of sale, is the same, which had before been mortgaged to the said Augustine Clayborn.
    The court decreed the deed of the 1st of February 1783, to be fraudulent, and void as to the creditors of Herbert Clayborn ; and that the defendant, out of the assets of his testator should pay to the plaintiff, the amount of his judgment and costs. From this decree, the defendant in chancery appealed.
    Duval, for the appellant.
    The first decision we meet with, ' upon the subject of fraudulent conveyances of personal estate, is Twine’s case 3 Co. Rep. 80. But it is to be recollected, that the English cases are for many reasons too high toned, to apply in this Country. The bankrupt laws, which forbid one creditor from being preferred to another, have excited a desire in the courts of that country, to make the same principle as general as possible; and consequently a jealousy is entertained against all conveyances, which give such a preference: *and thus it is, that small circumstances are caught at, to set them aside — again, in that country, deeds respecting personal estate are not registered, and of course, possession is. the highest evidence of property. But by our law, mortgages of personal property, and of slaves, are required to be recorded; see the act of 1748, C. 1. So that there is not the same danger of fraud, as to subsequent purchasers and creditors, in this, as in that country. That the consideration in this case, was bona fide, is completely established; and if so, all the arguments of inconvenience, which can be urged, may be repelled by the maxim, caveat emptor, which strictly applies to this case — he cited 2 Durnf. and East 375 — -3 Atk. 44.
    Marshall for the appellee.
    Whether the reason assigned, why the English cases, do not apply in this country be a substantial one, or not, will depend upon the just construction of the act of 1748, which is certainly very obscurely expressed.
    The first clause of that law declares, that no lands, tenements or hereditaments, shall alter, pass, or change, whereby any estate of freehold shall be made to take effect, unless the same be recorded in the General Court, or court of that county, where the land shall lie, within a certain time. — Now, this clause cannot possibly apply to slaves, because the deed is to be recorded in the county where the land lies. The fourth clause declares, that all deeds of trust, or mortgage, must be recorded according to the directions of this act. But the directory part of that act, as to the place of registration, is applicable to land onl3r, for the reason before given.— Bat, if slaves are meant by the law, then by analogy to land, this deed, ought to have been recorded in King William County Court, because, the slaves were in that county, at the time the deed was made, and the execution served upon them. So that, either a mortgage of slaves is not comprehended within the law, or if it be, then, this deed has been registered in an improper county.
    Ijyons, J., requested Mr. Marshall, toread the tenth section of the law, which requires, that a memorial of all mortgages, containing the number, and names of the slaves, and the description of the personal estate, if any be mortgaged, shall be registered in the General Court.
    Mr. Marshall. I contend that if the law apply to a mortgage of slaves, the deed in question, was not recorded in the proper County.
    ‘"It is also an important question, whether the mortgagor of personal property, can retain the possession of it. The English cases lay it down, that a security upon personal property, is not properly a mortgage, but a pledge, or deposit, and remains in the pawnee’s possession. What influence, the custom of this country (which is otherwise,) may have upon this point, I will not pretend to determine. But, if all these points be against me, I rely with confidence, upon the many badges of fraud which attend this case.
    In the first place, consider the connection between the parties; a mortgage by a son, to the father. — The time; — just previous to the affairs of Herbert Clayborn becoming desperate, and whilst his creditors were pressing him. A conveyance too, of every thing he possessed, down to a knife case, with a sweeping clause, that nothing might be omitted. It is remarkable too, that only that sjjecies of property is conveyed, which might be resorted to by his creditors: for his real estate (not encumbered) was considerable, and is not conveyed. — Tf the transaction were bona fide, would he deprive himself of all the comforts of life, and the means of deriving profit from his lands? or would he not rather have retained a part of his personal, and in its room, substituted some of his real estate. All the cases agree, that a total disposition of a man’s estate, or the remaining in possession, are certain badges of fraud — there is also something remarkable in the consideration stated — to wit, that the father, and Braxton, in 1777, had formed a commercial connection — the father’s capital was ^6000. —In 1782, it is decided to have been a losing business; and yet, in 1780, the father sells the tJroiits of this trade, to the son, for ^3000 sterling, which is the consideration of the mortgage. But again : in 1784, the son makes an absolute conveyance to the father, for _£1788: 18, after which, it must be agreed, that the son’s retaining the possession is so strong an evidence of a secret trust, as not to be fairly accounted for. The property continues in his possession, when the execution is served, he receives the crops, disposes of them, converts the cattle, hogs, &c. to his own use, and in short, exercises the most compleat ownership over the whole.
    Warden on the same side. Ho case can come more compleatly up to Twine’s case, than this. The conveyance is general, and possession is retained by the mortgagor. In Powell on mortgages is laid down, that the possession of personal property, which is mortgaged, should remain with the mortgagee; or if it do not, the reason should appear, from the nature and import of the mortgage; from p. 1 to 66.
    *So, where a supercargo on a voyage, mortgaged by way of Bottomry and Hypothecation, the vessel and cargo, and proceeded on the voyage, and sold the cargo, and bought other goods with the proceeds, and so bartered it two or three times; this was determined not to be fraudulent, because from the very nature of the transaction, it was understood, that the supercargo was to make the most of the property. But where in a mortgage of personal property, it was stipulated, that the mortgagor should retain the possession, and receive the profits, it was adjudged fraudulent against creditors — so that, even an express agreement to retain possession, will not save such deeds from being fraudulent, unless the transaction itself, necessarily accounts for, and justifies it.
    Marshall. There is but one possible way of construing the act of assembly, so as to make all its parts consist together, and at the same time, effect the purpose, for which deeds ought to be registered. The first section of the law directs, that deeds of land shall be recorded in the General Court, or Court of the County, in which the land lies. — The 4th section directs, that all mortgages, shall be recorded according to the directions of that act. — The 9th and 10th sections declare, that for the purpose of giving notice to purchasers of lands, slaves,. &c. of prior incumbrances, memorials of all deeds of lands, slaves, &c. shall be registered, by the clerk of the General Court; and the clerks of the different County Courts, are also directed to furnish the clerk of the General Court, with memorials of all deeds, recorded in their respective courts, which are also to be registered in the General Court. If then, the deed be of lands and slaves, it ought to be recorded in the Gen- ; eral Court, or court of the county where the laud lies — if of slaves only, then in the General Court: In this way only, will there be eompleat notoriety of all deeds — if it may be recorded in the county where the mortgagee lives, a purchaser must first know, who is the mortgagee-, before he can know to what County Court to apply. If it may be recorded in any county, then, if the clerk should fail to send forward the memorial to the General Court, the registration will afford no notice whatever.
    The PRESIDENT requested Mr. Marshall, to read the act of 1758, respecting the fraudulent gilts of slaves, observing, that this question might perhaps be determined by analogy to that.
    Mr. Marshall. — That act relates to positive gifts, the act of 1748, to mortgages- — ■ that, to conveyances without consideration.
    —This, to conveyances with consideration. — The deeds *spoken of in that law, may be proved by two witnesses. Those mentioned in this law must be proved by three. — That is passed ten years after, and has no reference to this: there can therefore be no analogy between them.
    Campbell for the appellant in reply.
    This case, depends entirely upon principle, and its own peculiar circumstances — no aid can be derived from English cases, because the reason, which has produced them in that country, do no exist in this.
    I contend 1st, that the deed in question, is valid under the act of 1748, and 2dly, that the circumstances attending the transaction, cannot invalidate it upon the principle of fraud.
    First, the law of 1748, is not creative of the right to mortgage personal property, because it existed at common law, but it directs the manner of giving notoriety to such deeds. The notice intended, is to be obtained, by referring to the registration of the memorials of them, in the General Court. It is therefore unimportant, in what county they are recorded, since the General Court is the place, where information is to be obtained, respecting the county in which, the deeds were recorded. And if the officer, whose duty it is to forward these memorials fails to do it, the parties are not thereby to suffer.
    Secondly, Before the English cases are considered, let us recollect how this subject stood, at the time when Twine’s case was decided; and it will be found, that the facility, with which secret conveyances might be made, rendered it proper for the judges, to exercise a strictness (in order to defeat every attempt to commit a fraud,) which would have been unnecessary, if a mean had been adopted, whereby creditors and purchasers might have guarded themselves against it. This inconvenience, produced that statutes of Elizabeth, respecting fraudulent conveyances. The preamble, recites the mischief which resulted from the possession remaining in one person, whilst the property was transferred to another, whereby creditors, and purchasers were defrauded; and the judges stretched as far as they well could, to cafry this statute into full effect. The cases referred to in Powell, furnish a satisfactory reason for the distinction, between real, and personal property, continuing in possession of the mortgagor. In the first, purchasers may obtain notice, by recurring to the vicinage in cases of feoffments, or to the records, in cases of bargains and sales. But in the latter, possession is the highest evidence of property. Attend to the difference between the statute of Elizabeth, and our law. The former, only punishes the fraud, which it did not attempt to prevent. The "latter, prevents its commission, by directing the deeds to be recorded. The principle of caveat emptor therefore, cannot with propriety apply in England, because there is no -possible mode, by which a purchaser can guard himself against prior, secret conveyances; it is otherwise in this country.
    Under all the inconveniencies above pointed out, Twine’s case came forward. The conveyance was absolute and was of all his property. No inventory of the particular articles; and want of notoriety; is there stated as the foundation of the decision. This, is the case of a mortgage, which from its nature imports, that the-possession is to remain with the mortgagor. There is a specification of the property conveyed, and an appraisement annexed. As to the inconveniences arising from the want of notoriety, see 2 Blac. Com. 338 — 342— Pow. on Mortg. 2 Ed. p. 286 — -290.
    If then, possession remaining with the mortgagor, be not in this country, an evidence of fraud, what are the other circumstances relied upon? relationship — if the transaction be otherwise fair, the preference given by a son to a father, can be no-evidence of fraud. The time, — Since there are no bankrupt laws, or principles growing out of them in this country, which prohibits a debtor from prefering one creditor, to another, the circumstance of time is unimportant, if it be antecedent to the execution delivered. But the strongest proof that this transaction was real, and not col-orable, is, that in April 1784, H. Clayborn, mortgaged his land (which his creditors could not have touched,) to his father, Harrison, and William P. Clayborn, whose claims were found to exceed the value of the property first mortgaged. If he found himself safe in the power of a father, would he also have thrown himself upon the mercy of strangers, if the transaction had not been real?
    
      
      Mortgage of Personalty — Retention of Possession— Fraud. — m Davis v. Turner, 4 (lra.lt. -MO. it is said, ('Imjhorn r. Hill, 1 Wash. 177. was the case of a sweeping sale by an embarrassed debtor of his slaves and other personal property to his son, to whom the same liad been previously mortgaged for a debt of a dubious character, and the bill of sale recorded, after the creditor’s levy of his execution upon the property in the possession of the son, by whom-notwithstanding the alleged sale, it had been held, used and enjoyed as his own. It was a suit in equity in which the whole question of law and fact was to be decided by the court, and the sale was held to be fraudulent. The question whether the mere fact of the grantor’s retaining possession rendered the transaction fraudulent was neither discussed nor decided; and there were no proofs in the case to repeal the prima facie presumption of fraud, but on the contrary strong circumstances to confirm it. In this case though it was held that the retaining possession of personal property by the vendor, after an absolute sale, is prima facie fraudulent; but the presumption may be rebutted by proof.
      Mortgages — Recordation,—On this question the principal case is cited in Moore v. Auditor, 3 Hen, & M. 235; Beasley v. Owen, 3 Hen. & M. 458; Glasscock v. Batton, (i Rand. 82'; Rose v. Burgess, 10 Leigh 196: Bond v. Ross, 3 Fed. Oas 845. See monographic note on “Mortgages" appended to Forkner v. Stuart, 6 Gratt. 197.
    
   The PRESIDENT

pronounced the following opinion and decree, viz. “The deed of mortgage, dated the 1st of February 1783, from Herbert Clayborn to Augustine Clay-born, in the decree mentioned, if made for a valuable and bona fide consideration, was not void by reason of Herbert Clayborn the mortgagor, retaining possession, of the slaves and other estate thereby mortgaged to the said Augustine, as the said deed was duly recorded, and that therefore the consideration should have been enquired into, and accounts taken and settled between the parties, before the deed was declared void on that principle, which could not be properly done in this suit, as *Charles. Harrison one of the mortgagees is not a party. But this court is of opinion, that as the said Augustine suffered the said Herbert to retain the possession of the slaves, and other estate, on which the ap-pellees execution was levied, after the sales in October and November, for which bills of sale were made, (as referred to in the answer of the appellant, and filed among the exhibits in this cause,) releasing' the equity of redemption,' and conveying the absolute property in the estate, thereby conveyed and confirmed, to the said Augustine, which bills of sale were not recorded until the 14th of April 1785; that they were fraudulent and void as to the appellee, and neither the said sales, nor the prior mortgage which had ceased to operate, did protect the estate, (then sufficient to satisfy his demand) from his execution, and that there is no error in the decree for the payment of the appellee’s debt and costs.

Decree affirmed.  