§ 10. Fraudulent intent of grantor.-A complaint in an action to set aside a conveyance as fraudulent as against creditors must show fraud in the conveyance, and must either allege a fraudulent intent on the part of the grantor or set forth the facts logically indicating the existence of such intent.88 A distinction is made between fraud and intent to defraud. The intent to de

fraud is a fact, an essential fact in the cause of action, without an allegation of which the complaint is defective; the fraud is a legal conclusion, being an inference from particular facts. It is therefore held in some cases that an allegation of a fraudulent intent, which is the material fact in the case, is sufficient, without allegations of facts to show that intent, which would be simply a pleading of evidence.89 Other authorities hold, however, that the general averment of a fraudulent intent, without alleging specific facts showing such fraudulent intent, presents no issue as against a proper demurrer." Some of the cases, especially where by statute the question of fraudulent intent is made a question of fact, hold that the fraudulent intent must be alleged in terms.91 In other

88. Pritz v. Jones, 102 N. Y. Supp. 549.

89. N. Y.-Fuller v. Brown, 76 Hun, 557, 28 N. Y. Supp. 189; National Union Bank v. Reed, 12 N. Y. Supp. 920, 27 Abb. N. Cas. 5; Hastings v. Thurston, 18 How. Pr. 530; Bogert v. Haight, 9 Paige, 297.

Cal.-Threlkel v. Scott (1893), 34 Pac. 851.

Iowa.-Burlington Protestant Hospital Assoc. v. Gerlinger, 111 Iowa, 293, 82 N. W. 765.

Neb.-McIntyre v. Malone, 3 Neb. (Unoff.) 159, 91 N. W. 246.

N. D.-Paulson v. Ward, 4 N. D. 100, 58 N. W. 792.

S. D.-Probert v. McDonald, 2 S. D. 495, 51 N. W. 212, 39 Am. St. Rep. 796.

Wis.-Evans v. Williams, 82 Wis. 666, 53 N. W. 32.

Can.-Sawyer v. Linton, 23 Grant Ch. (U. C.) 43.

90. Ala.-Little v. Sterne, 125 Ala. 609, 27 So. 972; Warren v. Hunt, 114 Ala. 506, 21 So. 939; Heinz v. White, 105 Ala. 670, 17 So. 185; Curran v. Olmstead, 101 Ala. 692, 14 So. 398.

Colo.-Burdsall V. Waggoner, 4 Colo. 256.

Ga.-Rowland v. Coleman, 45 Ga.

204.

Ind. Spaulding v. Myers, 64 Ind.

246.

Kan.-Gleason v. Wilson, 48 Kan. 500, 29 Pac. 698.

Mo.-First Nat. Bank v. Rohrer, 138 Mo. 369, 39 S. W. 1047.

91. Cal.-Wetherly v. Straus, 93 Cal. 283, 28 Pac. 1045.

Ind.-National State Bank v. Vigo County Nat. Bank, 141 Ind. 352, 40 N. E. 799, 50 Am. St. Rep. 330; Wil

93

cases this is held not to be essential, although it is customary and proper, but that it is sufficient if facts are averred which, if proved, would authorize an inference of fraudulent intent.92 The complaint is not defective for not alleging that the conveyance was in fraud of the plaintiff, if it alleges that it was made to defraud creditors generally, and the fact appears that the plaintiff was a creditor at the date of the conveyance." Where it is alleged by a creditor that the debtor was insolvent and that the transfer was a mere gift, it is not necessary that he should also allege a fraudulent intent, since a voluntary conveyance by an insolvent debtor is fraudulent as to creditors and such a creditor is required only to state the facts necessary to sustain his action, the law drawing the legal conclusion from these facts.94

§ 11. Knowledge and intent of grantee.-In an action by a creditor to set aside, on the ground of fraud, a voluntary conveyance, made by an insolvent debtor, it is not necessary to aver that the grantee participated in the fraud, or that he had knowledge or notice of the grantor's fraudulent intent or purpose, as the fraud of the grantor is implied fraud on the part of a voluntary grantee."

lis v. Thompson, 93 Ind. 62; Lockwood v. Harding, 79 Ind. 129; Bentley v. Dunkle, 57 Ind. 374. See also Hutchinson v. First Nat. Bank, 133 Ind. 271, 30 N. E. 952, 36 Am. St. Rep. 537.

Kan.-Van Vliet v. Halsey, 37 Kan. 116, 14 Pac. 482.

Mass.-Carpenter v. Cushman, 121 Mass. 265.

Miss.-Hogan v. Burnett, 37 Miss.

617.

Mo.-Martin v. Fox, 40 Mo. App.

664.

N. D.-Dalrymple v. Security L. & T. Co., 9 N. D. 306, 83 N. W. 245.

92. Whittlesey v. Delaney, 73 N. Y. 571; Cohen v. Plonsky, 60 Hun (N. Y.), 103, 14 N. Y. Supp. 324; Beall v. Lehman Durr Co., 110 Ala.

95

446, 18 So. 230; Cola City Coal, etc., Co. v. Hazard Powder Co., 108 Ala. 218, 19 So. 392; Sides v. Scharff, 93 Ala. 106, 9 So. 228; O'Kane v. Vinnedge, 108 Ky. 34, 55 S. W. 711, 21 Ky. L. Rep. 1551.

A positive denial of fraud in an answer will not prevail against admissions, in the same pleading, of facts which show that the transaction was fraudulent. Robinson v. Stewart, 10 N. Y. 189; Jackson v. Hart, 11 Wend. (N. Y.) 349.

93. Harrison v. Jaquess, 29 Ind. 208.

94. Gray v. Brunold, 140 Cal. 615, 74 Pac. 303; Catchings v. Manlove, 39 Miss. 655.

95. McGee v. Importers', etc., Nat. Bank, 93 Ala. 192, 9 So. 734; State v.

An allegation that a debtor transferred his property wholly without valuable consideration, leaving nothing with which to pay his debts, is sufficient of itself to show fraud as against existing creditors. But in the case of a conveyance or transfer by a debtor for a valuable consideration, although an inadequate one, the complaint should allege that the grantee had knowledge of the grantor's insolvency or failing circumstances, and that he had knowledge of or participated in the grantor's purpose or scheme to defraud his creditors." It is sufficient if the facts alleged,

unexplained, fairly sustain the conclusion that the conveyance or transfer was both made and received with the intent to defraud the creditors of the grantor." The complaint need not allege that there existed a conspiracy to defraud creditors." An allegation that the grantee had notice of the grantor's fraudulent intent is sufficient, notwithstanding the payment of a consideration.

But an allegation that the grantee knew that the grantor was insolvent is not sufficient to show that the grantee had notice of the grantor's fraudulent intent."

§ 12. Fraudulent intent and knowledge as to subsequent creditors or purchasers.-A creditor whose debt accrued after a conveyance by the debtor may maintain an action to set aside the conveyance as fraudulent, where it was made with intent to defraud subsequent creditors, and as a rule he must allege and prove that the conveyance was made with intent to defraud future or subsequent creditors, with whom the grantor intended to deal on the faith of his owning the property transferred, by putting his property beyond their reach and that he was fraudulently affected thereby. A voluntary conveyance is good, as against subsequent creditors, unless made with intent to defraud them, or made secretly so that knowledge thereof was withheld from them and they dealt with the grantor upon the faith of his owning the property transferred, or the transfer was made with a view of entering into some new and hazardous business, the risk of which the grantor intended should be cast upon those giving him credit in such business, or as a cover for some future schemes of fraud."

98. Cohen v. Plonsky, 60 Hun (N. Y.), 103, 14 N. Y. Supp. 234.

99. Alden v. Gibson, 63 N. H. 12. 1. State v. Parsons, 147 Ind. 579, 47 N. E. 17, 62 Am. St. Rep. 430.

2. Arbertoli v. Branham, 80 Cal. 631, 22 Pac. 404, 13 Am. Sc. Rep. 200. 3. Little v. Sterne, 125 Ala. 609, 27 So. 972; Heinz v. White, 105 Ala. 670, 17 So. 185; Dickson v. McLarney, 97 Ala. 383, 12 So. 398; Seals

A

v. Robinson, 75 Ala. 363; Petree v. Brotherton, 133 Ind. 692, 32 N. E. 300; O'Kane v. Vinnedge, 108 Ky. 34, 55 S. W. 711, 21 Ky. L. Rep. 1551; Willett v. Frodich, 28 Ky. L. Rep. 798, 90 S. W. 572; Seager v. Armstrong, 95 Minn. 414, 104 N. W. 479.

4. N. Y.-Neuberger v. Keim, 134 N. Y. 35, 31 N. E. 268.

U. S.-Schreyer v. Scott, 134 U. S. 405, 10 Sup. Ct. 579, 33 L. Ed. 755;

Subsequent purchasers likewise must allege and prove that a conveyance was intended as a fraud upon subsequent purchasers, in order to have it set aside on the ground that it was made to hinder, delay, and defraud creditors. The nearness or remoteness, however, of the time of the contraction of the creditor's claim sued upon to the date of the conveyance, while important as an evidentiary fact, is not decisive, and the statement of it, therefore, is not essential to the statement of a good cause of action. Where a plaintiff seeks the aid of equity on the ground of being a bona fide purchaser without notice of land sought to be subjected to the payment of a judgment against another, he must fully and explicitly deny notice in his bill."

6

§ 13. Suing in behalf of all creditors.-That an action by a creditor to set aside an alleged fraudulent transfer by a debtor is prosecuted in behalf of himself and all other creditors interested must appear on the face of the complaint, a statement to that effect in the title of the cause being insufficient. It should be alleged that there are other creditors and that the suit is brought for the benefit of the plaintiff and all other creditors of the defendant who choose to come in and share in the relief and contribute to the expenses of the suit. But a bill may properly be considered a

Horbach v. Hill, 112 U. S. 144, 5 Sup.
Ct. 81, 28 L. Ed. 670; Burton v.
Platter, 53 Fed. 901, 4 C. C. A. 95.
Ark. Cunningham v. Williams, 42
Ark. 170.

Colo.-Emery v. Yount, 7 Colo. 107, 1 Pac. 686.

Del.-Hood v. Jones, 5 Del. Ch. 77. Ill.-Moritz v. Hoffman, 35 Ill. 553; Edgerly v. First Nat. Bank, 30 Ill. App. 425; Cramer v. Bode, 24 Ill. App. 219.

Ind. Stumph v. Bruner, 89 Ind. 556.

Tenn.-Templeton v. Twilty, 88 Tenn. 595, 14 S. W. 435.

See Subsequent creditors, chap. V,

§ 3, supra; Want of consideration as to subsequent creditors, chap. VIII, § 36, supra.

5. Reynolds v. Faust, 179 Mo. 21, 77 S. W. 855; Evans v. David, 98 Mo. 405, 11 S. W. 975; Bonney v. Taylor, 90 Mo. 63, 1 S. W. 740. See also Subsequent purchasers, chap. V, § 3,

supra.

6. Loehr v. Murphy, 45 Mo. App.

519.
7. Brinkerhoff v. Lansing, 4 Johns.
Ch. (N. Y.) 65.

8. N. Y.-Louis v. Belgard, 63 Hun, 630, 17 N. Y. Supp. 882; Elwell v. Johnson, 3 Hun, 558; Brown v. Ricketts, 3 Johns. Ch. 553.