Henry Baldwin

“ There must be an assignment, either voluntary or compulsory, or else there can be no assignee to be made liable to the United States under the enacting clause. If a mere act of bankruptcy be sufficient to give rise to the preference of the United States from the moment of its commission, where is the assignee who is first to satisfy the claims of the United States out of the estate of the debtor, under the penalty, stated in the enacting clause, of satisfying it out of his own estate. ”

“ But when we are upon the subject of motives and intention, the improbability of their existence deserves consideration. If, indeed, the illegal abduction of the teas, with the anticipated and known connivance of the customhouse officers, formed a part of the contrivance, a case of fraud would be made out; and it will be for the jury to decide whether the participation of the plaintiff, or of Smith and Nicoll, in those disgraceful transactions, is made out by the evidence in the cause. ”

“ But to uphold the credit of a merchant by advances to any amount made by his friends, or by his creditors, for the purpose of preventing his failure, and of enabling him to go on, under the expectation that he may thereby acquire the means of discharging his debts, and of maintaining a standing in the commercial world; has never yet been decided, by any English or American court, to be a fraud upon any third person, who, misled by appearances, may have dealt with and given credit to the person so assisted. ”

“ The first instance of alleged fraud, by the plaintiff, or by Smith and Nicoll, is the taking of these securities from a man known by those persons to be a debtor to the United States, and believed by them to be in a state of insolvency. ”

“ The Atlantic Insurance Company; that it would be a waste of time for this court to notice it further than by observing, that the outward cargoes and their proceeds were mortgaged, not conveyed absolutely to the plaintiff that the ships were at or beyond sea, at the time they were conveyed; and that possession of them was demanded and refused by the officers of the United States as soon as they arrived. These facts are not disputed, and the legal result is, that under these circumstances the want of possession is not a badge of fraud. ”

“ From a view of all that has been said by learned judges and jurists upon this subject, it may be safely laid down, that, to constitute actual fraud between two or more persons to the prejudice of a third, contrivance and design, to injure such third person, by depriving him of some right or otherwise impairing it, must be shown. ”

“ Let it always be kept in mind, that these cargoes were not sold to the plaintiff, but were merely pledged as collateral security. If on their arrival they were redeemed, they would then become the absolute property of Edward Thomson; who would be absolved from his obligation to deliver the particular bills of lading to the plaintiff, and be entitled to enter them as owner under the general bill of lading. If they were not redeemed, then the plaintiff would enter them as the owner of the bills of lading to order, and which by the agreement were to be delivered to him. ”

“ If the person against whom fraud is alleged, should be proved to have been guilty of it in any number of instances; still if the particular act sought to be avoided be not shown to be tainted with fraud, it cannot be affected by those other frauds, unless in some way or other it be connected with or form a part of them. ”

“ I know of no principle which prevents a person from taking a valid security, by respondentia or otherwise, in consideration of responsibilities entered into by him for debts due by the person giving them, which he afterwards pays off or satisfies, and from which he had discharged such person, as against his original creditor. ”

“ That a false representation by one person of the credit of another, by which a third person is deceived and injured, is a fraud upon the parties so deceived, is undeniable. A letter of credit, giving to the person in whose favour it is written a character for solidity, which the writer knows to be untrue, is of this description. ”