Sec.6. In many of the states, this perplexing question has been settled by statute. In the state of New-York, the law expressly declares, that a sale or an assignment without immediate delivery and a change of possession, shall be presumed to be fraudulent and void as against creditors, unless the party claiming the property under the assignment shall make it appear that the same was made in good faith, and without any attempt to defraud. Laws more or less similar to this, and securing to the assignor the use of the mortgaged property, are believed to exist in a majority of the states. The instruments conveying the property are usually called chattel mortgages, and are required to be recorded as deeds; in New-York, and perhaps a few other states, only filed in the town or county clerk’s office.
Sec.7. In the sale of personal property, though there should be a judgment against the vendor, and the purchaser should have notice of it, that fact would not of itself render the sale fraudulent. But if the purchaser, knowing of the judgment, purchases with the view or purpose to defeat the creditor’s execution, the transaction is fraudulent. The question of fraud depends upon the motive.
Sec.8. Assignments are sometimes made by debtors for the benefit of their creditors. A person deeply indebted, or in embarrassed circumstances, assigns his property, in trust, to one or more persons, who are to dispose of it, and to apply the avails to the payment of his creditors, or a part of them; for the law does not forbid a debtor’s giving a preference to one or more creditors over others, provided the assignment is for a sufficient consideration. A debtor may directly assign or transfer all his property to a single creditor, and the assignment be valid; but if the value of the property is manifestly excessive, and disproportionate to the debt which it is intended to cover, the other creditors have a right to the surplus.
Sec.9. When an embarrassed debtor agrees to pay his creditors a certain proportion of their claims in consideration of a discharge of their demands, if he privately agrees to give a better or further security to one than to others, the contract is void; because the condition upon which they agree to discharge the debtor is, that they shall share equally.
Sec.10. A gift, or conveyance founded merely upon a consideration of affection, or blood, or consanguinity, may be set aside by creditors, if the grantor was in embarrassed circumstances when he made it; for a man is bound, both legally and morally, to pay his debts before giving away his property. But if he is indebted to only a small amount in proportion to the value of his property, and wholly unembarrassed, the gift is not rendered voidable by his indebtedness, even though he should afterwards become insolvent.
Sec.1. The word bailment is from bail, French, to deliver. (Chap. XVIII, Sec.14.) Bailment, in law, is a delivery of goods, in trust, upon agreement that the trust shall be executed, and the goods restored by the bailee, when the purpose of the bailment shall have been, answered.