Fraudulent conveyance

“ The law which is considered by the plaintiff's counsel as limiting this power in the case at bar, is the statute of 13 Eliz. ch. 5. against fraudulent conveyances, which is understood to be in force in the county of Washington. That statute enacts, that 'for the avoiding and abolishing of feigned, covenous, and fraudulent feoffments,' &c. 'which feoffments,' &c. 'are devised and contrived of malice, fraud, covin, collusion, or guile, to the end, purpose, and intent, to delay, hinder, or defraud creditors, and others, of their just and lawful actions,' &c. ”

“ So, whatever may be suggested or surmised as to possible fraudulent intentions of Parker, Sr., in the conveyance, its validity cannot be questioned in the absence of any evidence of participation in them by the defendant. The fraud which will vitiate a sale must be mutual ”

“ The charge, it is, therefore, submitted, annuls the whole law of notice as to fraudulent conveyances, and makes every one a fair purchaser, who is not a participator in the fraud; so that a wife or father have only to remain wilfully ignorant of a husband's fraud, and a family settlement will be valid of property acquired by highway robbery. ”

“ Fraud in law consists in acts which, though not fraudulently intended, yet as their tendency is to defraud creditors, if they vest the property of the debtor in his grantee, they are void for legal fraud, which is deemed tantamount to actual fraud, full evidence of fraud, and fraudulent in themselves, the policy of the law making the acts illegal. ”

“ On the other hand, if the fraud itself be secret in its nature, and such that its existence cannot be readily ascertained, or if there be fiduciary relations between the parties, there need be no evidence of a fraudulent concealment other than that implied from the transaction itself. ”

“ It is too obvious for comment that in all this the only use of the words fraud and fraudulent is to stigmatize acts which are adverse to the plaintiff's view of his own rights. But there is not a syllable which defines an act fraudulent in nature, or done or performed under the influence of corrupt motives, or by corrupt means, by the defendant or by any of the land officers who have had to deal with his claim. ”

“ The principle laid down in the charge of the judge, that one who claims to have been drawn into a fraudulent purchase must exercise care and vigilance to discover the fraud, and must be prompt in repudiating his contract on the ground of such fraud, is a sound one. ”

“ Again, at the instance of the plaintiff, the court said: 'The mere sale by a party of his stock of goods to a relative is not a badge of fraud. If such sales were fraudulent in themselves, it would be impossible for family connections to aid each other, in case of financial embarrassment, without danger of being placed in a false position, and losing the entire sum loaned. ”

“ The defendants insist that it was made with the fraudulent purpose, on the part of the vendors, of cheating, hindering, and delaying their creditors, and that the vendees either intended by their purchase to aid in accomplishing that result, or, at and before their purchase, were chargeable in law with notice of the fraud designed by the vendors. It is unnecessary to set out all the facts which, according to the bill of exceptions, the evidence tended to establish. ”

“ So fraud is in essence the exception. By fraud we mean conscious wrongdoing, an intention to cheat or be dishonest. The decision of the department head, absent fraudulent conduct, must stand under the plain meaning of the contract. ”

“ A mere doubt or suspicion of the fairness of the transaction, ought not to be sufficient to lead to the finding of any act to be fraudulent, unless the conduct and situation of the parties, and the effects intended to be produced by the act, appear inconsistent with their integrity, and admit of no reasonable interpretation but meditated fraud, to be effected by the agreement, sale or deed ”

“ When the intent is to pay, it is necessarily understood by both parties, and need not be expressly represented as existing. When the intent is not to pay, it is of course concealed. Whether the deceit is called a false and fraudulent representation of the existence of an intent to pay, or a fraudulent concealment of the existence of an intent not to pay, the fraud described is, in fact, one and the same fraud. ”

“ And thereupon the said defendants further excepted to the following matters or propositions of law contained in the said charge, to wit:
'We now come to the inquiry, whether the assignment is valid or void.
'It is alleged to be fraudulent in fact, and in law. Fraud, in fact, consists in the intention to prevent creditors from recovering their just debts, by any act which withdraws the property of a debtor from their reach; both parties must concur in the illegal intention. ”

“ Their language is that the officers and people have conspired together for the purpose of defrauding the plaintiffs, and to prevent them from obtaining service of process. Is it fraud in a debtor to endeavor to evade the service of process? Is it any more fraudulent than it is not to pay the debt? Fraud is not the proper term to apply to such conduct. It may be morally wrong. It may be dishonest; but it is not fraudulent in the legal sense of the term. Inability to serve process on a defendant has never been deemed an excuse for not commencing an action within the prescribed period. ”

“ Equally unfounded is it that the complaint is defective because it does not use the word 'fraudulently,' the allegation being 'that the accused wrongfully, unlawfully, and feloniously appropriated said money.' As the word 'embezzled' itself implies fraudulent conduct on the part of the person receiving the money, the addition of the word 'fraudulent' would not enlarge or restrict its signification. ”

“ As an initial matter, I note that §17 (a) (2) does not require scienter, so the maker of the statement may still be liable under that provision. Aaron, supra, at 695–697. Moreover, an ongoing, “egregious” fraud is likely to independently constitute a primary violation of the conduct-based securities laws, wholly apart from the laws prohibiting fraudulent misstatements. ”

“ It is, for instance, clearly settled, that the making of a false instrument, which is the subject of forgery, with a fraudulent intent, although in the name of a non-existing person, is as much a forgery as if it had been made in the name of a person known to exist, and to whom credit was due. ”

“ In every deportation case where fraud has been proved, federal courts have held that the crime in issue involved moral turpitude. This has been true in a variety of situations involving fraudulent conduct: obtaining goods under fraudulent pretenses, Bermann v. Reimer, 2 Cir., 1941, 123 F.2d 331; conspiracy to defraud by deceit and falsehood, Mercer v. Lence, 10 Cir., 1938, 96 F.2d 122; forgery with intent to defraud, United States ex rel. ”

“ It is no answer to this liability to say that the act done by the agent was of a fraudulent character, and that the principal did not authorize the commission of a fraud. For a fraud committed by a partner or an agent the principal is not liable criminally; but he is liable in a civil suit if the fraud be committed in the transaction of the very business in which the agent was appointed to act. ”

“ It is different from the case of a lost note of bond. Fraud is charged, and documents exist which in equity ought not to exist. I think the complainant is entitled to have the fraudulent transaction wiped out, and to be restored to his original status. ”

“ We cannot agree with counsel. The statute is broader than is claimed. Its letter shows this: 'Any scheme or artifice to defraud.' Some schemes may be promoted through mere representations and promises as to the future, yet are none the less schemes and artifices to defraud. Punishment because of the fraudulent purpose is no new thing. ”

“ The burden is upon the attacking creditor, but where the fraudulent intent on the grantor's part is made out, and the circumstances are suspicious, the purchaser must show that he has paid value; and, if he does, it must then appear that the purchaser had notice of the fraud. ”

“ The question before us, then, is whether, in view of the state of the evidence upon the defense that the notes were procured by fraud, the trial court erred in directing a verdict for the plaintiff. It is apparent that there was evidence sufficient to go to the jury that the signatures of some of the defendants had been obtained by means of fraudulent representations. Upon this point, the supreme court of the territory said: 'The defense, as we have seen, was principally that the signing of the notes was procured by fraud. ”

“ There was no evidence of fraud, unless the facts which have been referred to justify the inference of fraud. We are at a loss to understand how fraudulent conduct can justly be imputed to a pledgee when it appears that whatever was done in executing the power of sale was on e in full compliance with the terms of the pledge, and when there is no evidence that any unconscionable advantage was taken of the pledgeor or his creditors. ”

“ If, nevertheless, we assume that mandamus would lie upon a clear case of fraud adequately alleged and proved (State Bd. of Equalization v. People, 191 Ill. 528, 539, 58 L. R. A. 513, 61 N. E. 339) , it would be a strong thing to revise the judgment of the board on the strength of allegations of undervaluations, and the single adjective 'fraudulent' without more specific allegations of fact. ”

“ If some temper had not been thrown into the case at first, there probably would not have been any charge of fraudulent intention. No one will be surprised from the proceedings in the cause, and the argument made upon it in this court, that its merits were lost sight of, in the effort made on the one side to establish fraud, and on the other to resist it. ”

“ The promise not to assign with preferences against the bank does not of itself avoid such an assignment for fraud.
'It is claimed, however, that the deed is fraudulent and void on its face, (1) because it appropriates partnership assets to the payment of individual debts in preference to the debts of the partnership; and (2) because of the peculiar provision which is made for bidding by the creditors of the second class at any public sale that may be made of the assigned property. ”

“ But we are not. To obtain money was the sole object of this fraud. The use of the mails was crucial to the total success of the fraudulent project. We are not justified in chopping up the vital banking phase of the scheme into segments and isolating one part from the others. That would be warranted if the scheme were to defraud the collecting bank. ”

“ But he may not fraudulently or by deceitful representations induce another to withhold from sale his products without being answerable for the injury occasioned by the fraud. Whether negotiations for a purchase never concluded were in fact fraudulent; whether they were commenced and continued solely with the purpose of dishonestly inducing the plaintiff to forego offering his goods until the market had been supplied, and whether such was the consequence of the defendants' fraudulent conduct, were questions of fact which should have been submitted to the jury on the evidence. ”

“ Section 35, as amended, makes it a crime knowingly and willfully to 'make or cause to be made any false or fraudulent statements or representations', or to 'make or use or cause to be made or used any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement of entry in any matter within the jurisdiction of any department or agency of the United States'. ”

“ Cases of fraud are recognized exceptions to the general rule that the commission of one wrongful act has to legal tendency to prove the commission of another. Such other acts always have a bearing upon the questions of fraudulent intent or guilty knowledge where they are in issue. Thus, a single act of passing counterfeit money is very little, if any, evidence that the party knew it was counterfeit, since the innocent passing of such money is an every-day occurrence ”

“ This is especially so when, as in the case before us, the partners, who were not themselves guilty of wrong, received and appropriated the fruits of the fraudulent conduct of their associate in business. ”

“ Moreover, under the plan defendants, while refusing to refund the fee, pretended to investigate complaints from their victims and encouraged their salesmen to deny having made false representations, all the time seeking by false and fraudulent statements to make the victims believe that the defendants had faithfully performed and would continue to perform the promised services. ”

“ The offenses charged under this article were not one and the same offense. This is apparent if the test of the identity of offenses, that the same evidence is required to sustain them, be applied. The first charge alleged 'a conspiracy to defraud,' and the second charge alleged 'causing false and fraudulent claims to be made,' which were separate and distinct offenses, one requiring certain evidence which the other did not. ”

“ To advance money for a son-in-law to repair the frauds he had committed, even with the hope of concealing the perpetration of them, is not, we think, an offence which may not be excused; nor can a security taken for the repayment of money so advanced be deemed fraudulent. If the notes were to be taken upon condition that the holders would forbear to prosecute the criminal, or if the repayment of the money advanced were to depend upon his escape from prosecution, the validity of the contract might well be questioned. ”