DELIVERED TEE OPINION ON THE COURT, CHIEF JU STICE PBYOB DISSENTING.
September 10, 1884, tlie Bank of Commerce instituted this action against Payne & Yiley, a firm composed of TI. C. Payne and John T. Yiley, doing business prior to that time in the city of Louisville.
In the petition it is stated the plaintiff held four promissory notes, not then due, on the firm for the aggregate amount of eighteen thousand five hundred dollars; that each of the defendants had departed from the county of his residence to avoid the service of summons, and had sold, conveyed or otherwise disposed of *452Ms or their property, or suffered or permitted it to be ■sold with the fraudulent intent to cheat, hinder or delay his creditors. In an amended petition it is stated the deed hereafter referred to was made by them with like intent.
An attachment was issued, and The Fidelity Trust and Safety Yault Company, created a corporation by the General Assembly, was, with others, summoned on the same day as a garnishee.
September 12 the plaintiff filed in the clerk’s office its amended petition, making said corporation a party defendant, and stating therein that September 6 Payne & Yiley executed and acknowledged a pretended deed of trust purporting to transfer to it all the property owned by them as partners and as-individuals, except such as was by law exempt from execution, the kind and description of which is set out in the amended petition.
It is recited in the deed, a copy thereof being filed as an exhibit, that the conveyance was made to the corporation In trust to collect all the property mentioned therein, and with convenient speed sell the same for cash, or on such reasonable credit as the trustee in its discretion might deem for the best interest of the creditors of Payne & Yiley; and that the trustee should, of the money collected, first pay all charges, costs and reasonable compensation to itself, and the balance left to all creditors of the firm and of the individual members thereof, according to such priorities or liens as existed by' law or contract, and then to distribute ratably.
It is. also stated in the amended petition that said *453corporation September 8, took possession of a considerable portion of the property, and sold some of it before this action was commenced, bnt did not by any one of its officers qualify as trustee until after the writ of attachment was issued and executed upon divers garnishees, nor had executed the bond required by law in such cases when the amended petition was filed.
The relief prayed for was judgment setting asidé the deed, subjecting the property conveyed thereby and that attached to the' satisfaction of the debts, and in a subsequent pleading, the notes having become due in the meantime, personal judgment against Payne & Yiley thereon was also asked.
Payne & Yiley, though not actually summoned, entered by counsel their appearance, and filed answer, denying the deed was executed with the intent alleged by the plaintiff, and controverting the grounds of the attachment, as was likewise done. by the trustee in its answer; but the justice of the debts sued on was not controverted by either of the defendants.
The judgment appealed from is, that the attachment be discharged and petition dismissed at the plaintiff’s costs.
There is very little room for discussion about the facts of this case, but legal questions arise, some of which have not heretofore been passed on by this court.
It appears that Payne & Yiley commenced business as warehouse and commission merchants in 1878, and were from the beginning in the habit of giving warehouse receipts on bagging in, or by them represented to be in, their warehouse, as collateral security'for the payment of money borrowed from banks. One of the *454members also contracted individual debts, for which he pledged his private property, consisting principally of stocks and bonds, and in the end became heavily involved.
In the summer of 1882, as both members of the firm in their depositions admit, they knew it was insolvent, but except their book-keeper no one else was aware of, or seemed to suspect it, and, consequently, they were enabled to effect new loans, or postpone the payment of existing debts by means of the warehouse receipts, although, as the book-keeper testifies, “they disposed of the bagging while the receipts were still outstanding without the consent of the holders of such receipts.”
In July, 1884, however, being convinced they could not much longer conceal the actual financial condition of the firm, they commenced to devise some plan by which to obtain a composition settlement satisfactory to its creditors, and consulted a friend on the subject, and soon after employed counsel to advise and aid them.
There was at first a difference of opinion as to the feasibility of obtaining such settlement without the execution of a deed of assignment, which, for manifest reasons, they wished to avoid, one of the members of the firm and the friend consulted believing it could be done, while the other and their counsel believed it could not.
But it was understood and agreed between them, that in order to have the required time in which to determine upon and carry out the plan most likely to accomplish the object of settling with and satisfying the creditors, it was essential to obtain a renewal of such *455of tlieir notes as fell due about that date. And to induce the banks, their creditors, to agree to it, the members of the firm, or one of them, represented that .as the season for the sale of bagging did not commence until about September, it was necessary for payment ■of the debts to be deferred until that time to enable the firm to sell the bagging for which the receipts held by the banks had been given, and with the proceeds -of such sales as made to take up the receipts.
Accepting that representation as true, and believing the bagging was still in possession of the firm, the officers of the banks applied to, except one, the Breckinridge Bank, consented to the proposed renewal and ■extension, while the debt of the one that refused was then paid off in full.
Immediately after that transaction Payne, who seems to have been the leading and controlling member of the firm, left his place of business and county of his residence, and remained away until Saturday September 8, when, being notified by his friend, he returned to Louisville for the purpose of executing and acknowledging the deed of assignment, which was done in the •office of their counsel after 9 p. m., the President of the Fidelity Trust and Safety Yault Company being there ready to accept, and a deputy clerk present to take acknowledgment of the deed, both of whom were admonished to say nothing about the transaction.
In each of the two daily newspapers published in Louisville the next morning, Sunday, an article ap■peared, prepared at the instance of Payne & Yiley, in which the assignment was announced, and the statement made the debts were less than half the amount *456they turned out to be, and the assets sufficient to pay them. And on the same day, by the first outgoing railroad train, they both left and went to another county of' the State, for the purpose, as they substantially admit, to avoid inquiries as to the actual condition of the firm, and to await the action of their creditors on the proposition for a settlement to be submitted at a meeting' which was held the next day, Monday.
The estimated value of the firm and individual assets, as appears from a memorandum furnished by them to their creditors, was about ninety-three thousand dollars; but two items of the list, valued at twenty-five thousand dollars, could not then be regarded as more-than possibly available in paying the debts, even if in good faith so designed, because they consisted of' proceeds of land lying in a distant State, the property of Payne’s wife, the power to sell which for that purpose was questionable, and a gift from his father, which might or might not be made.
On the other hand, the indebtedness of the firm was' about one hundred and sixty-one thousand dollars, and that of Payne about fifty-nine thousand dollars, while, of about forty-two thousand rolls of bagging, for which they had issued and delivered to their creditors warehouse receipts as collateral security,, about thirty-seven thousand, valued at about one hundred and forty-four thousand dollars, had been disposed of, only about five thousand five hundred rolls being, upon examination made after the execution of' the deed, found in their warehouse or under their control.
Being, as they state in their depositions, advised by *457their counsel that- their creditors had rejected their proposition for a settlement, were very angry with them, and that it was the only thing left for them to do, both Payne & Yiley immediately after the creditors’ meeting left the United States and went to the Dominion of Canada, where they remained up to the time the judgment was rendered.
Whether the deed of assignment be. valid or not, we think the lower court was not authorized by the pleadings and proof in this case to either dismiss the petition or discharge the attachment.
The record shows Payne & Yiley, by their employed counsel, went into court and filed an answer, which was not only duly sworn to by them, but, as they admit, expressly authorized by them to be filed. They should, therefore, be regarded as waiving actual service of summons and before the court; and such being the case, the plaintiff; was clearly entitled to personal judgment against them for the debt sued on. The proof is sufficient to sustain both the alleged grounds of attachment.
The purpose of Payne in absenting himself from the county of his residence from July to September, as is substantially admitted by him, was to prevent inquiry and investigation by creditors in regard to the true condition of the firm, and the fraudulent methods of business used by the members, which he knew would inevitably cause meritorious actions to be brought and summons issued against them.
Their flight to Canada, though for the purpose of avoiding arrest to answer a criminal charge, had the effect to prevent the service of summons to answer in *458a civil action, for the same wrong. . While, therefore, the proof does not bring this case within the letter, it does come within the reason of subsection 4, section 194, Civil Code.
The second ground existed beyond question. For if the disposal by the debtor for’his own benefit, without consent of the creditor, of goods for which warehouse receipts have been issued and delivered as collateral security for money borrowed be not an act done with the fraudulent intent to cheat, hinder and delay such creditor in the meaning of subsection -7, it is hard to conceive a case that would be. Such an act is not only fraudulent, but by statute is made criminal.
The bagging for which warehouse receipts were held by the Bank of Commerce was, as its chief officer testifies, of value sufficient to satisfy the whole of its debts against the firm; but.it had been fraudulently disposed of, and none was to be found when this action was commenced.
The remaining inquiry in this connection is, then, whether there was any property besides that attempted to be conveyed by the deed of - assignment subject to the plaintiff s debts.
The trustee did "not acquire by the deed any interest in or control of the property of H. C. Payne that was then exempt from execution by reason of his status of bona fide housekeeper with a family, then, as it is conceded, existing, for it was expressly excepted from the conveyance. Nor has Payne, though a party, set up any claim to that property, or to the proceeds of such of it as has been sold.
Therefore, though we think the evidence shews he *459had, before the judgment was rendered, ceased to be such housekeeper, it is immaterial whether he had or not. For whatever right he had to the property or its proceeds was waived by his failure to set up claim to it in this action, and it was in the power of the court and its duty, having control of the fund arising from that source, to have applied it to the debts of the plaintiff, the only other party having any claim to it.
The two grounds upon which it is contended the deed of assignment is invalid and inoperative against the attachment are:
1. That the trustee failed to comply with section 1, chapter 109, General Statutes.
2. That it was made with intent to delay, hinder or defraud creditors^
The section referred to is as follows
‘ ‘ That hereafter it shall not be lawful for the trustee or assignee, in any conveyance made for the benefit of creditors, in anywise to proceed to execute the trust until he shall appear in the county court of the county where such conveyance may have been recorded, and take an oath faithfully to execute the duties confided to him by such conveyance agreeably to law ; and shall likewise execute a covenant in open court with good and sufficient security, to be approved by said court, payable to the grantor, or any beneficiary in such conveyance, to the effect that he will faithfully, in proper time, discharge all the duties of trustee or assignee imposed upon him by the conveyance, or by the laws of the land.”
It appears that the attachment was issued and levied, and summons executed on the Fidelity Trust and *460Safety Vault Company, before either the required oath, was taken or bond executed, and that it was not until February, 1875, that any bond with personal security was made, the first one having been given without. It is, however, contended for appellees that by section' 9 of the act incorporating the company, and empowering; it to act as an assignee, it was exempted from the duty of giving personal security in such cases. That section is as follows: “The capital of said company shall betaken and considered as the only security required by law for the faithful performance of its duties; and other security shall not be required upon its appointment to any of the offices or duties mentioned herein, except when required by the courts or by parties in interest.”
We perceive no necessary conflict between the two sections; for the court may, in its discretion, require the company, at the time the bond is executed, to give personal security, or may dispense with it, and in either case the instrument would be good as a statutory bond.
But we do not assent to the proposition of counsel that the assignee did not, under the statute, acquire title to the property, and as a consequence the attachment lien of the plaintiff should prevail, merely because process in this action &as executed before the oath was taken or bond was executed.
To sustain [ that position we have to disregard a rule, admitting of no exception, that a trust never fails for want of a trustee, and to assume the Legislature intended by the section quoted that the beneficiary interest already vested in creditors, so far as a deed of *461assignment, duly executed, acknowledged and accepted, -can vest suck an interest in property,- may be divested by any appreciable delay to take the oath and give the bond, by the mere recipient of the nominal legal interest.
Before the enactment of the section quoted it was settled by this court, that if a deed of assignment be valid, it cannot be rendered invalid by omission or negligence of the assignee. (Bank U. S. v. Huth, 4 B. M., 423.) And counsel admit that, prior to that section, the deed, if valid, operated to pass the title of the property to the assignee, and, as a necessary consequence, it was not subject to attachment.
It seems to us that admission is fatal to their argument. For both the reason for the statute and the language used show it was intended to benefit, not prej udice, the beneficiaries, to render more certain and secure, not more uncertain and precarious, their rights and interests. It was manifestly for the better security of creditors against the fraudulent and improvident conduct of assignees that the oath and bond are required, and for no other apparent reason; for the faithful execution of his duties by the assignee enures to their benefit, and to them and the grantor, who is entitled to the residuum, is the bond made payable.
We think if it had been intended that the omission or delay of the assignee should so unjustly prejudice the rights of the beneficiaries, not at all in fault, language not susceptible of misconstruction would have been used to say so.
The principal ground upon which the deed is assailed is, that it was in the language of section 1, article 1, *462chapter 44, General Statutes, made “with the intent to delay, hinder or defraud creditors.”
But we will first consider the effect to be given to the attendance at a creditors’ meeting held September 8, and the assent by the chief officer of the plaintiff to a resolution then adopted, in substance authorizing and requesting the assignee to proceed to collect and apply the property conveyed to pay the debts.
In the reply of the plaintiff it is stated, and not controverted, that at the time of that meeting its president was not informed of the nature and contents of the deed, and he testifies to the same fact.
The circumstances of this case preclude the belief that officer acted fraudulently or in bad faith to either the grantors, assignee or the other creditors. And in view of the short time that had elapsed since the execution of the deed, and the conduct of the grantors, of which the creditors were not then fully advised, we think it would be an improper and unreasonable application of the doctrine of estoppel to deprive the plaintiff of the right to have it set aside, if, as alleged, it was fraudulently made.
The ruling of this court as to the true test of the validity of deeds of assignment, which are in terms embraced by the statute, has been uniform and unvarying, for the language used admits of but one interpretation.
“ It is the intent and purpose with which the grantor acts that characterizes the conveyance and renders it fraudulent under the statute.” (Taylor v. Eubank, 3 Mar., 239; Lyne v. Bank of Ky., 5 J. J. M., 545; Lowry v. Fisher, 2 Bush, 76.)
*463“We readily concede that if the intention in the execution of the deed be to hinder or delay creditors, such an intention entering into and producing its execution, being against the statute and bad, will vitiate the whole deed though it be made upon a good consideration, or for the just and equitable purpose of securing an equal distribution of the effects among all the creditors. * * Where it appears on the face of the deed of trust that the motive for making it was to prevent a sacrifice of the property a bad motive is shown — a motive to obstruct the ordinary process of law in the subjection of the property, to the payment of the debts, which vitiates the whole deed. So, if that motive and intention be proved aliunde. (Vernon v. Morton, 8 Dana, 263.)
“ In every such assignment some delay is unavoidable. It is not, therefore, the fact of delay but its character, and the motive which actuated it, that is deemed fraudulent in law.” (Christopher v. Covington, 2 B. M., 358.)
“The object of the statute was to prevent deeds, etc., fraudulent in their inception and intention, and not merely such as in their effect - might hinder or delay other creditors. It is the corrupt and covinous motive, the fraudulent intention, the mala mens with which the assignment or conveyance is made, that constitutes the fraud against which the denunciations of the statute are directed; and without the existence in fact, or presumed existence, of an immoral or bad intention or motive, fraud cannot be perpetrated, either at common law or under the statute. The motive or intention is to be arrived at from the facts and circumstances ap*464pearing in each particular case. ’’ (Bank U. S. v. Huth, 4 B. M., 430.)
In German Insurance Bank v. Nunes, 80 Ky., 334, is this language: “In all cases where conveyances are made for the ostensible purpose of securing an equal distribution among creditors of the property of the debtor, the validity of the conveyance depends upon the intention of the debtor. If the intention is to hinder and delay creditors in the enforcement of their demands against the debtor, rather than to secure an equitable distribution, of the property among creditors and for their benefit, the conveyance is fraudulent and void. It is not the effect of such conveyances that determines their validity, for every such conveyance in effect hinders and delays creditors. It is the intention that controls, and that intention cannot be better determined than from the language of the conveyance, although it may be established by extrinsic evidence.”
In Codogan v. Kennett, 2 Cowp., 432, Lord Mansfield, construing the English statute 13 Elizabeth, said: "The question in every case is whether the act done is a bona fide transaction, or whether it is a trick or contrivance to defeat creditors.”
And as said in Burrill on Assignments, section 332, “the same test has been referred to as decisive by Story in his work on Equity Jurisprudence, and by Chief Justice Marshall in U. S. v. Hare, 3 Cranch, 73.
The preamble to the English statute, from which our own against fraudulent conveyances was taken, so clearly and fully sets forth the reason and object of such enactment as to leave no room for doubt or construction. It is as follows: “For the avoiding and *465•abolishing of feigned, covinous and fraudulent - feoffments, gifts, grants, alienations, conveyances, etc., more commonly used and practiced in these days than hath 'been seen or heard of heretofore, which feoffments, etc., have been and are devised and contrived of malice, fraud, covin, collusion or guile, to the end, purpose and intent to delay, hinder and defraud creditors and others of their just and lawful actions, suits, ■debts, accounts, damages, penalties, forfeitures, etc., not only to the let and hinderance of the due course .and execution of law and justice, but also to the overthrow of all true and plain dealing, bargaining and •chevisance between man and man, without the which no Commonwealth or civil society can be maintained ■or continued.”
It seenis to us impossible, looking at either the language or reason of the statute, to adopt any other test of "the validity of a deed of assignment. For having the necessary effect of suspending and in many cases •defeating altogether “remedy by the due course of law,” guaranteed by the Constitution, it should never, when attacked by a complaining creditor, be upheld, if made in ■ bad faith and tainted with fraud. Accordingly, as held in Yernon v. Morton, though such deed be made upon a good consideration, or for the just and ■equitable purpose of securing an equal distribution of the effects among all his creditors, yet, if the intention in the execution of it be to delay, hinder or defraud them, such an intention entering into and producing it will vitiate the whole deed. And as said in Christopher v. Covington, in every such assignment some •delay is unavoidable; but it is not the fact of delay *466or hinderance, but the intent or purpose which actuates-the assignment that stamps it as bona fide or fraudulent.
As, then, it is not the actual tendency or effect of such a deed, but the intent with which it is made, that determines the question of its validity, it follows that if it be a trick or contrivance for the debtor’s own advantage, an equal and honest distribution of his estate-among his creditors being a secondary and subordinate-consideration, or part of a plan or scheme previously concocted, in pursuance of which creditors are intended to be, or have been deceived into false security, overreached and defrauded, then the transaction should be held tainted and the deed vitiated and void.
It does not appear that the assignee, or the beneficiaries under the deed, participated in the fraud imputed to the grantors, nor is it necessary they should have done so in order to render it invalid. For, as recently held by this court, an assignee for the benefit of creditors generally is not a purchaser for value. He stands in the position of his assignor, and can assert no equity that could not be asserted by the debtor himself. (Bridgeford, Trustee, v. Barbour, &c., 80 Ky., 529; Dietz’s Assignee v. Sutcliffe, 80 Ky., 650.) Nor does it affect the question that in setting aside the deed the attaching creditor may, to the partial exclusion of others, be paid his entire debt. For it is not the right of a debtor, unless in good faith and legally done, to-deprive any creditor of the remedies given by law, and the injury to those who choose to abide by a fraudulent deed is of less consequence than the necessity of en forcing “true and plain dealing between man and man.”
*467In. testing the deed of assignment in question by the rules mentioned, so plainly in accord with the letter, object and scope of the statute, the first inquiry that naturally arises is why, if the intent of' Payne & Yiley was to make an honest, fair and full transfer of their estate for the benefit of creditors, it was not done in July ? The hopeless bankruptcy of the firm was then known to them; its business was at an end and practically abandoned.
This record • places it 'beyond question that their leading and controlling purpose was to bring about a composition settlement with creditors, whereby to obtain a release from their debts, and get possession of and destroy the outstanding warehouse receipts, which were indisputable evidence of their criminal violation of law. It is eqiially clear that the assignment was a secondary consideration, and not made until they were advised and became satisfied the main object could not be accomplished without it.
They, therefore, in order, using the language of Payne, “to hold the thing in its present shape until ripe for settlement,” not only delayed until September what good faith to their creditors required done in July, but intentionally and studiously kept the true condition of the firm in the meantime Concealed from them. But as most of the debts were falling due, and suits would be commenced for their collection, unless an arrangement deferring' payment could be made, they got all of them renewed but that. due to the Breckinridge Bank, by falsely representing they still had the bagging for which the receipts were given. The Breckinridge Bank is not shown to have had. any *468.greater claim upon them than the others, and the only-reason for discriminating in its favor by paying its debt in full, when they knew their estate was not sufficient to pay 'one-half of the whole indebtedness, was that it was necessary to prevent suit by it, and the consequent exposure of the condition of the firm, which it was their purpose to then conceal.
The same motive induced Payne to leave Louisville after the debts were renewed, for he admits he left to avoid inquiry and investigation by the creditors.
The time and circumstances under which the deed was executed, and the false statement made the next day in newspapers, show the same leading and consistent purpose to deceive creditors as to the actual condition of the firm and their methods of business, and thus more certainly bring about the settlement and enable them to secure possession of the warehouse receipts.
The evidence makes it plain to us that the deed was executed, not in good faith and with intent to deal fairly and justly by creditors, but in furtherance and as part of a scheme devised by the debtors to obtain an advantageous settlement, and to prevent the enforcement of the statute violated by them, in the accomplishment of which they had already deceived, defrauded and wronged their creditors.
To adjudge such deed valid merely because under it there may be an equal distribution of such of their estate as the debtors may have seen proper to give up, would be neither wise policy nor sound morals.
The judgment of the lower court is reversed foi further proceedings consistent with this opinion.