PRIVATE ARRANGEMENTS G. Y. ROBSOls ^:^ ADIGE By WA Circuit, AGO ByHU( Circuit, and Ne^ THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW RNER, ;EET, w.c. [, cash 5s. SALE OF QOODS )ecisions. TeDij)le and "Western ., cash 4s. IT OF TORTS, " STUDENTS. Temple and Western Law to the Liverpool ■rice 9s. IN By GE( nth Creditors, NT ACT, 1887. er-at-Law, Author of " Treatise on tne Liaw oi uanKruptey. Jl'ST rrBLLSHEJ). Third Ediiion. Post Svo. 502 pp. Price Us. 6d. 1886. REDMAN & LYON'S LAW OF LANDLORD & TENANT Including the PRACTICE of EJECTMENT. jrST ITBLISirED. Third Edit. GOO pp. 8i'o. Price Vis. cloth. THE DUTY & LIABILITY OF EMPLOYERS As well to the PUBLIC as to SERVANTS and WORKMEN. By W. HOWLAND ROBERTS and GEORGE W.tVLLACE, Barristers-at-Law. Tliis Edition gives a complete view of the general position of one who •. carries on operations in connection with which injury may be caused to ! the persons or property of others, as well as of the Law of Master and j Servant infer se. Lord Justice Fry, concurring -witli Lord Justice Bowen, in tho important case of Thi>mns V. Quartermaine (Court of Appeal, March 21, 1887), read page 252 of this work, and adopted it as part of his considered judgment. i Mr. Justice Denman, in Kiddle v. J^ovett (16 Q. B. Div. at p. 612), said, "The point i is discussed in the third edition of Messrs. Roberts & Wallace's valuable work." | Reeves & Turner, 100, Chancery Lane and Carey Street, "W.C. Demy 8ro. Price 12s. 6d. cloth. HE PRINCIPLES AND PRACTICE OF DISCOVERY 'ith an Appendix of Forms, including Suggested Forms for stating Objections to Discovery. By EDWAED BRAY, of Lincoln's Inn, Barrister- at-Law. '■' In point of fulness and careful attention to details, this book is one of the best we ve seen for a long time. Not a case old or new is omitted, and we have many useful 2fgestions in connection with doubtful points, while the table of contents, the table cases, and the index are quite models in their way. We have, therefore, in the thor's words, 'a complete and comprehensive work on discovery.'" — Solicitors' urnal. Second Edition. Thick 8vo. 30s. IE LAW RELATING TO WORKS OF LITERATURE AND ART: nbracing the Law of Copyright, the Law relating to Newspapers, the Lw relating to Contracts between Authors, Publishers, Printers, &c., and e Law of Libel, with the Statutes relating thereto. Forms of Agreements tweenAuthors,Publishers,&c.,andForms of Pleadings. Second Ed. 1884 By JOHN SHOETT, LL.B., of the Middle Temple, Esq., Barrister-at-Law. JUST PUBLISHED. 8ro., 7s. 6«?. JJ^ith Illustrations. QUAY'S INIST: i History and Associations. Compiled from Original and Unpublished Documents. By W. E. Douthwaite, Librarian to the Society. Miv Ready. SECOND EDITION. Price 15s. 1885. IXON'S PROBATE AND ADMINISTRATION. 'This is a very complete manual, both of the non- contentious and contentious 3iness in Probate. The chapters on practice and the appendix of forms are espe- Uy full." — Law Times, January 31, 1885. 8w., ^;>7'ce 15s. chth. 1883. DIVORCE AND MATRIMONIAL CAUSES. LW, Practice and Procedure in Divorce and other Matrimonial Causes. By W. J. Dixon, B.A., LL.M. (Cantab.), Barrister-at-Law. ' The work is well done, and will be highly useful. The Practice and Procedure the Divorce side of the Probate Division is skilfully and very fuUy handled e collection of Forms and Precedents in the Appendix is good and complete." — w Times. — JUST PUBLISHED. Post 8w. 5s. 1886. DIVORCE AND PROBATE MANUAL: Designed for Law Students. By W. J. DIXON, B.A., LL.M. (Cantab), Barrister-at-Law. ' Mr. Dixon, better known in connection with the above subjects by means of his ictical works upon them, has by this manual given students of both branches of the )f ession a simple and inexpensive means of acquiring a rudimentaiy knowledge of ) principles and practice of English Divorce and Probate Law." — Law Times, April ;h, 1886. PRIVATE AERANGEMENTS WITH CREDITORS. A TREATISE ON THE LAW OF PEIYATE AEIUNGEMENTS WITH CEEDITOES. WITH CONTAINING THE DEEDS OF AKRANGEMENT ACT, 1887, THE BILLS OF SALE ACTS, 1878 & 1882, AND THE BANKRUPTCY (DISCHARGE AND CLOSURE) ACT, 1887; WITH TIfE RULES UNDER THE ABOVE ACTS. ALSO PRECEDENTS OF DEEDS OF ARRANGEMENT. BY GEORGE YOUNG EOBSON, Esq., Ml BASBISTEE-AT-LA W. LONDON: REEVES AND TURNER, 100, CHANCEEY LANE, AND CAEEY STEEET, 1888 T LONDON : FEINTED BY C. F. EOWOIlTn, GEEAT NEW STEEET, FETTEE LANE — E.G. PREFACE. Aerangements with creditors outside the Court of Bankruptcy having become much more frequently- resorted to after the ]3assing of the Bankruptcy Act, 1883, than previously, owing greatly to the restrictions imposed by that Act on arrangements with creditors under its provisions, I was induced to j^repare materials for a treatise on the subject of Private Arrangements with Creditors ; but I delayed the publication under the expectation that an Act of Parliament would be passed affecting such arrangements. And as the ex- pected legislation has now taken place, by the passing of the Deeds of Arrangement Act, 1887 (which, with one or two exceptions, applies to Ireland as well as England), it seems to me that the time has arrived when I may venture to pub- lish my proposed treatise. As the law relating to private arrangements with creditors is a good deal mixed up with that of Bills of Sale, I have, in the Appendix, inserted the English Bills of Sale Acts, 1878 and 1882, the provisions of which are the same as the Irish Bills 749551 VI PREFACE. of Sale Acts, 1879 and 1883. I have also added the Bankruptcy (Discharge and Closure) Act, 1887, passed in the last Session of Parliament, relating to the discharge of bankrupts and liquidating debtors under the English Bankruptcy Acts prior to that of 1883, as well as the Rules made under the Acts in the Appendix. I have added also some precedents of Deeds of Arrangement. The present Treatise may be considered as supplemental to the last (or 6th) edition of my Treatise on the Law of Bankru2:»tcy, which in the notes to the present work is referred to as ,the " Treatise." a. Y. R. 5, New Square, Lincoln's Inn, llth January, 1888. ( vii ) CONTENTS. *■ PAGE Preface T v List of Cases ix CHAPTEE I. Intkoduction 1 CHAPTER II. 1. Eegistration of Deeds of Arrangement 10 2. What IxsTRmiENTS require Eegistration 24 CHAPTEE III. Compositions 34 CHAPTEE IV. Assignments for the benefit of Creditors 45 CHAPTEE V. Effect of Private Arrangements on the Eemedies of Creditors 67 CHAPTEE VI. Effect ' of Private Arrangements on Sureties and Secured Creditors 78 Vlii CONTENTS. APPENDIX. I. Statutes. PAGE Deeds of Arrangement Act, 1887 87 Bills of Scolo Act, 1878 94 Bills of Sale Act (1878) Amendment Act, 1882 106 Bankruptcy (Discharge and Closure) Act, 1887 113 II. Precedents of Deeds oe Arrangement. 1 . Composition payable by instalments — Last instalment guaranteed by surety — Indemnity to surety 119 2. Composition payable by instalments — Last instalment guaranteed by surety and promissory notes of debtor and surety — Indemnity to surety 124 3. Composition payable by instalments secured by gua- rantee of sui'ety and assignment of debtor's stock-in- trade, &c. to surety 127 4. Deed of inspection and assignment of debtor's estate to trustees to secure composition 129 5. Assignment by non-trader for the benefit of creditors . 136 6. Assignment by trader for the benefit of creditors .... 145 7. Assignment for the benefit of creditors, -with provision for re-assignment on payment of composition 154 8. Assignment for the benefit of creditors — Short form. . 156 9. Assignment by partners for the benefit of creditors .. 159 m. General Eules. (A.) Under Bankruptcy (Discharge and Closure) Act, 1887 166 (B.) Under Deeds of Ai-rangement Act, 1887 182 (C.) Under Bills of Sale Acts, 1878 and 1882 190 INDEX 193 LIST OF CASES. A. PAGE Acton v. Wood 45 Adams v. Graham 17 Alchin r. Hopkins 57 Alexander v. Duke of Wel- lington 59 Allen V. Thompson 16, 17 Alsager r. Spalding 39 Alton V. Harrison 52 Anderson, Ex parte 62 Angerstein, Ex parte 66 Ansell V. Robson 56 Apthorpe v. Apthorpe 58 Arrowsmith, Ex parte, Re Leveson 57 Atkinson v. Denby 41 B. Badcock, Ex parte 63 Bain v. Cooper 73 Baker's Trusts, Re 48 Bamford v. Burrow 43, 51 BaiTOw, Ex parte, Re Andrews 40 Barwick v. Reade 58 Bateson v. Gosling 80 Bath V. Sutton 18 Beales v. Tennant 17 Beeoh v. Ford 76 Bell V. Sunderland Build. Soc. 84 Bellamy v. Saull 19 Bennett, Ex parte 63, 68 Biron v. Mount 37, 38 BisseU V. Jones 40 Bissett V. Burgess 73 Blackloek v. Dobie 47 Blackstone v. Wilson 73 Blackwell v. England 16 Blount V. Harris 19 Boldero v. London and West- minster Loan Co. 26, 44, 52, 60 Bolton V. FeiTO 84 Boyd V. Hind 36 Bradley v. Gregory 35, 67 Brady v. Shiel 36 Brandling v. Pliunmer 38 R. PAGE Breull, Ex parte. Re Bowie 15, 16, 33 Brier v. Evison 60, 63 Bristow's Case 68 Britten v. Hughes 73 Broadbent v. Thornton 49 Brodrick v. Seale 17 Brown, Ex parte. Re Smith . . 64 Bullen r. Sharp 55 Burdett, Re, Ex parte Byrne . . 27 Burrell, Ex parte. Re Robinson 40 Butler, Ex parte 58, 59 V. Rhodes 36 C. Campbell v. Rothwell 80, 81 Carey v. Barrett 40 Carter v. Warne 55 V. White 78 Castle V. Downton 19 Cathcart v. Blackwood 58 Cazeneau, Ex parte 71 Chaplin, Ex parte. Re Sinclair 52 V. Young 66 Cockshott V. Bennett. . . . 39, 47, 71 Coleman v. Waller 39, 47 Collins r. Reece 37 Collyer v. Fallon 58 Cooling V. Noyes 36 Cooper ('. Davis 17 V. Reilley 58 Cork V. Saunders 36 Cornthwaite v. Frith 45 Corporation of Liverpool v. Wright 58 Couldery v. Bartrum 84 Cowen, Ex parte 39 Cowper r. Green 70 Cox V. Hickman 55 Cracknell v. Janson 84, 85 Crawley v. Hillary 68, 70 Crosbie, Ex parte 68 Cross, Ex parte 42 Cullingworth v. Lloyd . . 39, 47, 83 Cumber v. Wane 34 Cui'teis, Ex parte, Re Curteis 23 b \ LIST OF CASES, D. PAQE Dauirlish r. Tonncnt .... 39, 47, 83 Davty r. Piimlergras.s .... 7-1, 80 Davits c. Hits 27 V. Steiubauk 78 Davis r. Duke of Marlborough 59 Dent r. Dent 59 De Tastet, Ex parte Co Dowhurst r. Jones 37 Dixou, lix parte, Re Dixon . . 51 Dobbiu, Re 15 Doe t'. Anderson 71 V. Bevan 5(5, 57 V. Hogg' 57 V. Powell 57 Dryden r. Hope 18 Dudgeon f. O'CoimoU 75 Duffv r. Orr 73 Dunch V. Kent 38,49 E. Earl of Litchfield, Ex parte . . 63 Easterbrook v. Barker 55, 66 Edmonds, Ex parte. Re Green 64 Edwards v. Coombe 68, 76 Egyptian Coin, and Trading Co., Ex parte, Re Kelson . . 50 Emniett v. Dewhurst 38 Exch. Bank of Yarmouth v. Blethen 72 F. Fazakerley v. McKnight 72 Feistel r. King 57 Feize v. Randall 39 Field V. Dououghmore 36, 48, 49, 60 Fisher v. Bridges 70, 71 Fitzpatrick, Re 19 Flarty v. Odium 58 Foakes v. Beer 34 Forbes v. Jackson 80 Ford V. Beech 75, 76 Forster, Ex parfe. Re Hanson.. 51 Foulger v. Taylor 19 G. Garraud v. Lauderdale 45 Gathercole v. Smith 57 General Furnishing Co. tJ. Venn 26, 41, 44, 60 Gibson, Ex parte. Re Lamb. . 44 Gilbey, Ex parte. Re Bedell. . 81 Gillett V. Whitmarsh 34 Glegg V. Gilbey 81 V. Rees 46 PAOE Glendenning, Ex parte 79 Good v. Cheeseman 35, 70 Goodwin r. Lightbody 54 Gould v. Robertson 37 Grant v. Shaw 18 Gray v. Jones 18 Grenfell r. Dean of Windsor. . 57 Gresty v. Gibson 37 Griffith V. Ricketts 45 Grindell v. Brandon 12, 21 H. Hale V. Saloon Omnibus Co. . . 52 HaU, Ex parte 77 r. Levy 68 Hanson v. Stevenson 56 Harland v. Binks 45 Harnaman, Ex parte 72 Harrison v. Jackson 74 Hart, Ex parte. Re Law .... 40 Hartop, Ex parte 65 Hatton, Ex parte . . 67, 68, 72, 75 V. English 16 Hawker, Ex parte. Re Keely 58 Hawkins v. Gathercole 57 Hawkshaw v. Parkins 74 Heathcote v. Cruikshanks .... 36 Heather v. Webb 77 Heminghara, Ex parte 67 Hewer v. Cox 16, 19 Hobson V. Thelluson 55 Hodges V. Smith 74 Holland v. Cole 57 HoUings worth. Ex parte. Re Hollingsworth 23 Holme V. Branskill 78 Holmir r. Vincr 73 Hooman, Ex parte 17 Hooper v. Marshall 80 Hopkinson v. Lovering 56 Horton v. Riley 39 How V. Kcimett 55 Howden v. Haigh. . 42, 43, 51, 77 Hughes V. Little 27, 28 Hutton V. Eyre 74, 80 Hyde v. Watts 70 Jackman v. Mitchell 47, 71 Jakeman v. Cook 40, 77 James, Ex parte 63 Janes v. Whitbread , 52 Johns V. James .... 45, 46 Johnson v. Kershaw 49 LIST OF CASES. XI PAGE Joint Stock Discount Co., Ex parte, Re Daunt 50 Jolly V. Wallis 36, 48 Jones, Ex parte, Re Walsh . . 44 V. Herbert 74 Joyner, Ex parte 65 K. Kearsley r. Cole 79, 80 Kennard, Ex j^arte 65 Kjlner, Ex parte 43, ol King, Ex parte 72 Knight V. Cox 35 Lamb i\ Bruce 18 Lancaster v. Elee 50 Lane v. Husband 37, 38 V. Tyler 22 Lanyon v. Davey 74 Larchin v. N. W. Dep. Bank. 18 Latter v. White 49, 60 Lee V. Lockhart 71,73 Leicester v. Rose 39, 71 Lenzberg, Re 39, 47 Lewis V. Jones 36, 72, 79 Lloyd V. Cheetham 58 London and West. Loan Co. v. Chase 18 Lovering, Ex parte. Re Aysh- ford 54 Lucas V. Harris 59 Luekin v. Hamlyn 17 M. Macbean v. Deane 58 McHattie,Exparte,ReWoodl6, 19 Mare v. Sandford 71 Marshall, Ex parte 43 V. King 40 Marwood v. South York. Rail. Co 18 Mayor of Bristol v. Westcott. . 57 Meredith v. Facey 38, 49, 60 Metcalfe v. Ry croft 37 Milner, Ex parte. Re Milner . . 39, 47, 71 Morans v. Armstrong 75 Moss V. Hall 78 Murray v. Mackenzie 17 Mutton, Ex parte. Re Cole . . 54 N. PAGE Nat. Dep. Bank, Ex parte. Re Wills 18 Nat. Mer. Bank, Ex parte, Re Haynes 17 Needham, Re 12 Newington v . Levy 68 NichoU, Ex parte, Re Walker. 44 Nicholson, Ex parte, Re Nicholson 40 r. Revill 79 V. Tutin 37, 45 Norman v. Thompson 35, 67 Norris, Ex parte. Re Sadler. . 83, 85 0. Oastler, Ex parte. Re Fried- lander 44 O'Dwyer, Re 27 Official Receiver, Ex parte. Re Richards. . 54 V. Tailby 41 Ogle, Ex parte, Re Pilling . . 50, 64, 65 Oliver, Ex parte 41 V. King 43, 51 Or. Fin. Corp. v. Overend. ... 78 Oram, Ex parte, Re Watson. . 51 Otter V. Lord Vaux 84 Oughton V. Trotter 68, 70 Owen V. Homan 79 P. Paine f. Mathews 62 Palmer v. Bate 58 V. Vaughan 58 Parsons, Ex parte. Re Towns- end 27, 28 Payler r. Homershaw 73 Peacock, Ex parte 72 Peele, Ex parte. Re Dodgson.. 68 Pflag-er v. Brown 39 PhiUips V. FoxaU 78 V. Philhps 69 Pickard v. Bretz 16 Pike V. Dickenson 42 Pinnell's case 34 Pitcher v. Anderson 71 Pitts V. La Fontaine 66 Polak V. Everett 78, 81 Popple well. Ex parte. Re Storey 19 Powell, Ex parte 82 Prater, Ex parte 65 Price V. Barker 79 Priddy v. Rose 59 Proudfoot, Ex parte 36 Xll LIST OF CASES. R. PAGE Rainbow v. Juggons 81 Ransford v. Maule 10 Rawlings, Ex parte, ReForster 53 Reay v. Richardson 36 V. White 67 Reeves v. Watts 37 Richards, Re, Ex parte Official Receiver 54 Ringer r. Cann 55 Roe V. Mut. Loan Fund Co. . . 54 Ross, Ex parte 69 Rowley r. Adams 66 Rumboll, Ex parte 62 S. Sadler and Jackson, Ex parte 36, 39, 48, 71 Samuel v. Howarth 78 Sanderson v. Aston 78 Shaw, Ex parte 63 Sherrington, Ex parte 81 Shipton V. Casson 67 Sibree v. Tripp 34 Siggers v. Evans 45 Slater v. Jones 35, 70, 76 Small V. Marwood 70 Smith r. Chase 18 V. Cuff 39 V. Keating 45 V. Maplebank 74 Societe Geuerale de Paris v. Geen 84 Spencer v. Slater 52 Spottiswoode v. Stockdale 36, 38, 48 Stansford, Ex parte, Re Barber 27, 28 Steinman v. Magnus 35 Stewart v. Todd 35 Strange, Ex parte 65 Stray, Ex pai-te 43, 51 Steele v. Low 66 SoUy V. Forbes 79, 80 Sully, Ex parte, Re Wallis . , 33 Synnot v. Simpson 46 T. Tetley v. Taylor 3 Thimbleby v. Barrow 75 PAGE Thomas r. Courtney 70 Three Towns Bank f.Maddever 51 Tipping, Ex parte, Re Levey 69 Titterton v. Cooper 56 Tomlinson, Ex parte, Re Boyce 54 Tooker's case 74 Townsend, Ex parte 63 Trousdale v. Sheppard 18 Tuton r. Sanoner 17 V. Varley v. Coppard 57 Vaughan, Ex parte, Re Rid- deough , 53 Vere, Ex parte. Re Palmer . . 69 W. Walker v. Neville 76 Walmsley v. Cooper 74, 80 Walwyn v. Coutts 45 Watson V. Halliday 66 V. Knight 37, 38, 49 Watts V. Shuttleworth 78 Webb V. Hewitt 80 Wells V. Foster 59 V. Greenhill 39 White V. Hunt 55, 56 Whitmore v. Tm-quand. .36, 38, 48 Wilkins v Fry 56 Wilkinson, Ex parte 63 r. Byres 35 Willcock r. TerreU 59 Williams v. Mostyn 38 Wilson r. Willani 56 Wild V. Banning 49 Wigg r. Redpath 66 Wolverhampton Bank r. Mar- ston 28 Wood V. Barker 39 r. Dixie 52 V. Roberts 36 Wulfier. Jay 78 Young, Ex parte, Re Symonda 18 \xiMt ^xmnQmmxb foit^ Cr^Mtcrs. CHAPTER I. INTKODUCTION. Deeds for effecting private arrangements between insolvent debtors and tlieir creditors, with a view to a rateable distribution of the residue of the property of such debtors amongst their creditors towards payment of the debts owing to them, or of a composition in satisfaction thereof, and thus avoiding bankruptcy, have been long in use. Great difficulties, however, formerly existed in Difficulties effecting such arrangements, owing partly to the arrangements fact that an assignment of all a debtor's property ^^^^^^^^^'^^to^s- for the benefit of his creditors was held to be an act of bankruptcy, and avoidable by assignees in bankruptcy under their title by relation, which formerly extended back to the first act of bank- ruptcy committed by the bankru2)t, so as to avoid all alienations or dispositions of property made by him after that time ; and partly to the fact that an arrangement of this sort bound only those creditors who assented to it, and was liable to be superseded by a dissenting creditor instituting proceedings in bankruptcy against the debtor. 2 PRIVATE ARRANGEMENTS WITH CREDITORS. Statutory With LI Yiew to oLviate tlicsc difficulties, statu- provisious for , •• pp-Tii* j.'j.l remo^-iIlg toiy provisions lor lacilitating arrangements witn difficulties, creditors without recourse to bankruptcy proceed- ings liavc from time to time been enacted. The first provisions for this purpose were contained in B. A. 1849. the Bankruiitcy Act, 1849 («). Tlicy contcm- under control plated two kiiids of aiTangemciits, namely, ar- '^ ^^ • rangements under the control of the Court, and arrangements by deed independently of the Court. The first description was required to be sanctioned by three-fifths of the creditors who had proved debts to the amount of 10/. and uj) wards. The proceedings for effecting such arrangements were instituted by the filing of a petition by the debtor, stating that he was unal^le to pay his debts and praying that his person and property might be pro- tected from all process, and that such proposal as he might be able to make, or such modification thereof as by three-fifths in number and value of his cre- ditors might be determined upon, might be carried into effect under the superintendence and control of the Court. The debtor was required to lay a full statement of his affairs before his creditors, and upon the requisite majority approving his j^ro- posal, his property was A^ested in the official assignee for realization and distribution : and where this was done, a certificate, operating as a certificate of conformity in baukruj^tcy, was given by the Court to the debtor. Arrangements AiTaiiffements bv dccd outsido the Court were by deed out- ^ "^ {a) 12 & 13 Vict. c. 106, ss. 211, 228. INTRODUCTION. 3 required to be approved by six-sevenths (^) of the side the creditors whose debts amounted to 10^. and up- ^^ ' wards. But such arrangements, whether by way of assignment or composition, were held not to be obligatory on dissenting creditors, unless they comprised a cession by the debtor of the whole of his property for the benefit of his creditors (), must be presented to and filed with the registrar within seven clear days after the execution of the deed (in like manner as a bill of sale given by way of security for the payment of money is now required to be filed («) ), together with an affidavit verifying the time of execution, (a) A bill of sale by way of security for the payment of money is, by the 8th section of the Bills of Sale Act, 1882, required to be registered under the Bills of Sale Act, 1878, the 10th section of which provides that a true copy of the bill of sale and of every schedule or inventor}^ thereunto annexed or therein referred to, with the requisite affidavit, shall be presented to and filed with the registrar in like manner as a warrant of attorney in any personal action given by a trader is required to be filed ; as to which see 3 Geo. 4, c. 39 ; 6 & 7 Vict. c. 36; 32 & 33 Vict. c. 62, s. 86. A bill of sale is in Ireland required to be registered in the same way by the Irish Bills of Sale Acts, 42 & 43 Vict. c. 50, and 46 Vict. c. 7, which are to the same effect as the English Acts. By filing is meant the delivery of the document to bo filed by a person properly authorized to the proper officer at the proper office, with the intention that it should be put on the file. Ratiaford V. Maule, L. R., 8 C. P. 672; 21 W. E. 740; 42 L. J., C. P. 231. {b) This will include a schedule of creditors who execute before registration. REGISTRATION OF DEEDS OF ARRANGEMENT. 11 and containing a description of the residence and occupation of the debtor, and of the place or places where his business is carried on, and an affidavit hj the debtor stating the total estimated amount of property and liabilities included under the deed, the total amount of composition (if any) payable thereunder, and the names and addresses of his creditors " (plication of any party interested and on such terms and conditions as are just and expedient, extend the time for such registration, or order such omission or misstate- ment to be supplied and rectified by the insertion in the register of the true name, residence or description. The above provision is confined to the extension Extent and (J) Under B. A. 1861, twenty-eight days after execution were allowed for the registration of the deed, and provision was made for those cases in which the assent of creditors could not be obtained, by reason of its not being known who ■were the holders of negotiable securities or the absence of creditors abroad. See a7ite, p. 4. Seven days seem hardly a sufficient time to allow for registration when a number of cre- ditors have to be communicated with, especially when regard is had to the avoidance of the deed if not duly registered. {k) Sect. 9. 14 PRIVATE ARRANGEMENTS WITH CREDITORS. effoct of tlio provision. How affi- davits to be framed. Power to rectify regis- ter as against trustee in bankruptcy. of the time for registration and to the rectifica- tion of the register as to tlie omission or mis- statement of the name, residence or description of any person, which will include that of a creditor. If, however, the debtor in his affidavit states the estimated amount of the property and liabili- ties included in the deed honestly and to the best of his ability, this will probably be held to be sufficient although the statement may turn out to be in some respects erroneous. In stating the total amount of the composition payable under the deed there may be more difficulty, as it will depend not merely on the amount of the debtor's liabili- ties, but also on the willingness of the creditors to accept the composition offered by the debtor. It is probable, however, that if the amount stated is sufficient to cover the whole amount which, having regard to the debts and liabilities, would be payable if all the creditors acceded to the arrangement, this would be held to be a sufficient compliance with the requirements of the Act, although some of the creditors may decline to accede, and the actual amount of the composition payable under the deed may be less than that stated. Under a corresponding clause of the Bills of Sale Act, 1878 (w^), for rectifying errors in the registration of a bill of sale, it was held that the Court might exercise the power given to it for this purpose after the trustee in bankruj)tcy of the grantor had taken possession of the j^roperty (w) Sect. 14. REGISTRATION OF DEEDS OF ARRANGEMENT. 15 comprised in the bill of sale, and which he claimed to be entitled to on the ground that the bill of sale, not being 23roperly registered, was void as against him (71). Besides the affidavit (o) by the debtor, required Affidavit of by the Act to be filed with the copy of the deed, execution and there must also be filed an affidavit (;?) verifying occupation°of the time of execution of the deed (q), and con- "i^^**^^- taining a description of the residence and occupa- tion of the debtor and of the place or places where his business is carried on, that is, assuming he has any business within the meaning of the Act(r). This affidavit differs in some respects from the Differs from nn I • ^ -I • • -111 affidavit to be aradavit by the attesting witness, required by the filed under Bills of Sale Acts to be filed with a copy of the Acts.° bill of sale. The latter affidavit was required to be not only of the time of the bill of sale being made and of its due execution and attestation, and of the description, residence and occupation of the grantor, but to contain also a descrij^tion of the attesting witness, including his residence and occupation. It did not, however, require the j)lace of business of the grantor to be stated, but (n) Re Dobhi7i's Settlement, 56 L. J., Q. B. 295. (0) Any affidavit required for the purposes of the Act may be sworn before a Master of the Supreme Court of Judicature in England or Ireland, or before any person empowered to take affidavits in the Supreme Courts of Judicature of England or Ireland. See sect. 14. {p) This affidavit is to be made by the attesting witness. See Forms 1 and 2 to Rules in Appendix III., p. 185. (y) This refers to the first execution of the deed. See sect. 5. (r) As to the construction of the terms "residence" and "business," see Ex parte Breull^ Re Bowie, 16 Ch. D. 484; 29 W. E. 299. 16 PRIVATE ARRANGEMENTS WITH CREDITORS. if stated, that was lield to bo sufficient without stating* the place of sleeping (r). Prinoipieof Tlid'c liavc bccn numei'ous decisions as to the under Bills of corrcctiiess of tlic affidavit required by the Bills to affidavits of Sale Acts so far as relates to the description of Sder Deeds ^^^^ grautor thereof and of the attesting witness. ofA.A. 18S7. And the principle of these decisions would seem to be applicable to the affidavit as to the descrip- tion of the debt or required by the Deeds of Ar- rangement Act, 1887. With resj^ect to bills of sale, it has been decided that it is not sufficient that the bill of sale contains a correct descrij)tion of the grantor, but that the affidavit of the attest- ing witness must also do so (s). It will, however, be sufficient if the affidavit refers to the descrip- tion of the grantor in the bill of sale and states it to be correct (z^). The affidavit was held not to be insufficient because it stated the Christian name of the grantor incorrectly, his residence and occupation being correctly stated, and the credi- tors not being likely to be misled («). "Where there were two grantors the affidavit was held to be insufficient because it did not give the descriji- (r) Heicerx. Cox, 3 El. & Bl. 428 ; Blackwcllv. England, 8 El. & Bl. 541 ; 27 L. J., Q. B. 124. A debtor may be described as carrying on business at the place where he is employed as principal or clerk. Ex parte Brcidl, lie Boivie, stipra. {s) Allen Y. Thompson, 1 H. & N. 15; 25 L. J., Ex. 249; 2 Jur., N. S. 451 ; Hatton v. English, 7 E. & B. 94 ; 26 L. J., Q. B. 161 ; 3 Jur. N. S. 294. (0 Pickard v. Bretz, 5 H. & N. 9 ; 29 L. J., Ex. 19; Jones V. Harris, L. E., 7 Q. B. 157; 20 W. E. 163; 25 L. T. 702; 41 L. J., Q. B. 6. (m) Ex parte Mcllattie, Re Wood, 10 Ch. D. 398; 27 W. R. 327 ; 48 L. J., Bank. 26 ; 39 L. T. 378. REGISTRATION OF DEEDS OF ARRANGEMENT. 17 tion of both (x). If the description of tlie grantor in the deed and affidavit were inconsistent, this was held to be insufficient, though the description in one of the documents was correct (i/). The occupation of a man may be defined to be Definition of the vocation, calling, or trade which he ordinarily °^°^p^ ^°^* and ostensibly follows for the purpose of getting his living (^). The term ''gentleman," therefore, Gentleman. will not be a sufficient description of a person who has such an occupation. Thus, it has been held not to be a sufficient description of a clerk in the Audit Office (a), or of an attorney or attorney's clerk (b). So, also, a person in the employment of a mercantile firm as a buyer of silk was held to be misdescribed as a gentleman (c) ; and a pro- fessional actor and manager of a theatre was held to be misdescribed as an esquire (J). If a person has no occupation, that is, no busi- Where person ness by which he seeks to gain his livelihood, it occupation. will not be a ground of objection if he is described as a gentleman (c). And a person who had been (x) Hooper V. Parmejitcr, 10 W. E. 646. (V) Murray Y. 3Iacke)izw, L. E., 10 C. P. 625; 23 W. E. 595; 32 L. T. 777 ; Cooper v. Davis, 32 W. E. 329 ; 48 L. T. 881. (z) Tuton V. Sanoner, 3 H. & N. 280 ; 4 Jur., N. S. 365 ; Liichm V. Hamhjn, 18 W. E. 43 ; 21 L. T. 366 ; Ex parte Nat. Mer. Bank, Re Haynes, 15 Ch. D. 42 ; 49 L. J., Bauk. 62 ; 43 L. T. 36 ; 28 W. E. 848. («) Allen V. Thompson, 1 H. & N. 15; 25 L. J., Ex. 249; 2 Jur., N. S. 451. (i) Tuton V. Sanoner, supra; Brodrick v. Scale, L. E., 6 C. P. 98 ; 23 L. T. 864; 40 L. J., 0. P. 130; Bealcs v. Tennant, 29 L. J., Q. B. 188. (c) Adams v. Graham, 33 L. J., Q. B. 71. {d) Ex parte Tlooman, 10 Eq. 63; 39 L. J., Bank. 4; 22 L. T. 179. (e) Luckin v. Hamlyn, supra. R. C 18 PRIVATE ARRANGEMENTS WITH CREDITORS. Accountant. Clerk. When more than one occupation. Onus of provinf^ occupation. a medical student and for a short time had acted as a surgeon's assistant, but had ceased to do so or to follow any other occupation for six months before the execution of the bill of sale, was held not to be improperly described as a gentleman (y). ''Accountant" was held not to be a sufficient description of a railway clerk who occasionally did accounts for other people {h). But " govern- ment clerk " was held to be a proper description of a clerk in the Admiralty ; so also '' insurance clerk " of a clerk in an insurance office (^) ; and "clerk" is a sufficient description of a person who fills that character, without specifying the nature of his clerkship (Jc). If a person has more than one occupation, all should be stated (/). But if a person has no occupation, he may be described as having none [m), or his description as to occupation may be left blank [n) ; and the onus of proving that any person has an occupation which is not given will be on the party alleging it [o). { 34 PRIVATE ARRANGEMENTS WITH CREDITORS. CHAPTER III. COMPOSITIONS. Agreement to accept part of debt in satis- faction of the ■\vliole. Where time and mode of payment varied. It has long- been settled that an agreement not under seal by a creditor to accept from his debtor part of a liquidated demand, in the same manner as the whole debt ought to be paid, and in satis- faction thereof, will not o]oerate as an accord and satisfaction, so as to j)i'eclude the creditor from suing for the unpaid balance of the debt (a). But if the time or place of payment be different, part of the debt may be paid in satisfaction of the whole, as where the j^ayment is made before the debt is due (b) ; or if a negotiable security is given instead of money, though for a smaller sum (e) ; or if some chattel, though of greatly less A'"alue, is substituted for a sum of money (osing or acting inconsistently wdth it, he will be entitled to be admitted to the benefit of the arrangement, if the circumstances are such as to make it inequitable to exclude him ; as if the conduct of the other parties to the arrangement has been such as to induce him to think that the limitation as to time would not be strictly insisted upon by them [s) ; or if the non-execution of the deed occurred by accident (t). It has, however, been held that when the debtor can no longer de- rive the benefit contemplated by the arrangement, the time for accession has gone by, as where the period for accej)tance was closed by the death of the debtor {ii). So, also, if a creditor has claimed or acted in opposition to the deed, he cannot afterwards claim to be allowed to have the benefit of it {v). It is essential for the validity of a composition arrangement, in the absence of an express pro- vision to the contrary, that it should be for the general benefit of all the creditors who are parties to it, and that all should be placed on an equal footing. There must therefore be lona fides, not Robertson, 4 De G. & S. 509 ; Brandling v. Plummer, 27 L. J., Ch. 188 ; Williams v. Mosfyn, 33 L. J., Cli. 54. (s) See SjJottisicoode v. Stockdale, supra ; Whitmore v. Tur- quand, supra ; Bunch v. Kent, 1 Vern. 2G0 ; Emmett v. Deio- hurst, 3 Mac. & G. 587 ; 15 Jur. 1115. it) See note (r), p. 37. (t<) Lane v. Husland, supra. See Biron v. Mount, supra. (r) Watson v. Kniyht^ supra j Meredith v. Facey^ 29 Oh. D. 745 ; 33 W. E. 778. COMPOSITIONS. 39 only as between the debtor and the creditors, but also as between the creditors with each other. If, therefore, any creditor makes a secret bargain, Secret bargain either with the debtor or with a third person, for for additional an additional benefit or security, whether such ^^^^^^^^^'i- security be for the payment of the composition or of the original debt (x), as the condition of his signing the instrument of composition or assent- ing to it, not only will such bargain be absolutely void, but it will entitle any of the other creditors Entitles other . Till 1 1; , , 1 ' creditors to to repudiate the arrangement, and to resort to his repudiate original debt (?A And the debtor, if the bargain <^°°^P°^iti°^- . ^ •II- 1 • -PI Payments by IS made with him, or his trustee, if he becomes debtor may bankrupt, will be entitled to recover from the by him. creditor, with whom the bargain is made, any money paid by the debtor pursuant to such bar- gain (;*). And if the additional security is given Bargain by a third party, it will not be enforceable against party not him (a). enforceable. The validity of the composition, however, will Composition not be affected by a compulsory j^ayment to a by compulsory creditor under legal proceedings known to be P^-yment. (x) Leicester v. Rose, 4 East, 271 ; Ex parte Sadler and Jackson, 15 Ves. 52. {y) Dauglish v. Teyinent, L. E., 2 Q. B. 49 ; 36 L. J., Q. B. 10; JFood V. Barker, 1 Eq. 139; Pjiayery. Brown, 28 Bea. 391 ; Ex inirte Coiven, 2 Ch. Ap. 563 ; Re Lenzbcrq, 7 Ch. D. 650; 47 L. J., Ch. 178; 38 L. T. 547; 26 W. E. 258; Ex parte Milner, Re Milner, 15 Q. B. D. 605; 54 L. J., Q. B. 425; 33 W. E. 867 ; 53 L. T. 652. (s) Smith V. Cuff, 6 M. & S. 160 ; Cullingworth v. Lloi/d, 2 Beav. 385; Re Lenzherq, supra; Alsaqer v. Spalding, 4 ]3ing. N. C. 407 ; Horton v. Riley, 11 M. & W. 492. (a) Cockshott v. Bennett, 2 T. E. 766 ; Coleman v. Waller, 3 Y. & J. 212 ; Wells v. Greenhill, 5 B. & A. 869. See and compare Feize v. Randall, 6 T. E. 146. 40 PRIVATE ARRANGEMENTS WITH CREDITORS. Agreement for fresh credit to pay original debt. Assignment by debtor to indemnify surety. Assignment to surety of personal chattels void. Proper arranofement pending' at the time the composition is agreed to (b). And it would seem that the debtor may pay any of his creditors in full after payment of the composition to the other creditors, provided there was no secret bargain to that effect to induce the creditor to assent to the composition (c). So, also, an agreement for payment in full, made for a fresh consideration after the composition is fully joaid, will be valid (d). And an assignment by the debtor to a surety for the payment of the composition of sufficient proj^erty to indemnify the surety will be valid, though not communicated to the creditors, even though the surety is also a creditor, provided no advantage is thereby given to the surety for the payment of his own debt over the other creditors (e). If, however, the assignment to the surety be of personal chattels, it will be a bill of sale by way of security for the payment of money within the Bills of Sale Act, 1882, and the Bills of Sale (Ireland) Act, 1883, and must be in accordance with the form prescribed by those Acts, or it will be void (/). And having regard to the diffi- {b) Carer/ v. Barrett, 4 C. P. D. 379. (c) See jEx parte Hart, Re Law, 47 L. J., Bank. 88 ; Ex parte Barrow, Re Andrews, 18 Ch. D. 464 ; 45 L. T. 97. See also and compare Bissell v. Jones, L. E., 4 Q. B. 49; Ex parte Nicholson. Re Nicholson, 5 Ch. Ap. 332. {(l) Jakeman v. Cook, L. E., 4 Ex. Div. 26; 27 W. E. 91. See Marshall Y. King, 23 W. E. 92 ; 31 L. T. 511. See also Ex parte Barrow, Re Andrews, supra. (e) EiX parte Burrell, Re Robinson, 1 Ch. D. 537 ; 45 L. J,, Bank. 68 ; 35 L. T. 198 ; 24 W. E. 353. (/) B. S. A. 1883, s. 9; Hughes v. Little, 18 Q. B. D. 32; 56 L. J., Q. B. 296 ; 55 L. T. 476 ; 35 W. E. 36. See Treatise, p. 558, as to the construction and operation of the 9th section of the Bills of Sale Act, 1882, which enacts that a bill of sale COMPOSITIONS. 4l culty in making such a deed conformable to that for surety's form, the best course would seem to be either to confine the assignment to property not within the Bills of Sale Acts, such as book debts, or to assign the property, if consisting of personal chattels, to the surety in trust for the payment of the com- position to the creditors, so as to make the deed an assignment for the benefit of creditors within the 4th section of the Bills of Sale Act, 1878, in order to exempt it from registration under the Bills of Sale Acts [g). But the deed, though exempted from registration under the Bills of Sale Acts, will require registration under the Deeds of Arrangement Act, 1887 (/^). A creditor who has bargained for a secret Creditor advantage over the other creditors will be barred STi^'SS ^^^^^^ by a release contained in the composition deed, othe?CTedr-^^ although it may be void as against the other tors not. creditors (^'). And it would seem that a ere- And if debtor ditor who has practised a fraud of this sort on canno"pi^ve the other creditors will not, if the composition is ^^^ ^^^ ^^^bt or not joaid and the debtor becomes bankrupt, be allowed to prove under the bankruptcy for either by way of security for tlie payment of money by the grantor shall be void unless made in accordance with the prescribed form. (arte Stray, 2 Ch. Ap. 374 ; Oliver v. A'%, 8 De Gr., M. & Gr. 110; Treatise, p. 165. (^^) Ex parte Marshall, 1 M., D. & D. 575 ; Hoivden v. Haigh, 11 Ad. & E. 1033. (y) Sect. 43 ; Treatise, p. 577. (V) B. S. A. 1878, s. 4 ; ante, p. 26 ; Treatise, p. 552. 44 PRIVATE ARRANGEISIENTS WITH CREDITORS. please, have the benefit of the assignment by signing or assenting to it, the deed will be for the benefit of creditors within the meaning of the statute (s). And although the deed need not be registered under the Bills of Sale Act, still it must be registered under the Deeds of Arrange- ment Act, 1887 (zf). Whether offer By the Bankruptcy Act, 1883 (u), it is made an composition act of bankruptcy by a debtor if he gives notice bankruptcy, to any of his creditors that he has suspended, or is about to susj^end, payment of his debts. Whether an ofPer by a debtor to pay his creditors a composition on their debts will amount to such a notice, would seem to depend on the terms of the offer, and the circumstances under which it is made. If they are such as to warrant an infer- ence that if the offer is rejected, suspension of payment will follow, an act of bankruptcy would seem to be committed (x). But if there are no grounds for such an inference, such an offer, w^hether accepted or rejected, will not, it is con- ceived, be an act of bankruptcy. (s) General Furnishinrj Co. v. Venn, 2 11. & C. 153; 32 L. J., Ex. 220 ; Boldero v. L. Sf W. Loan Co., 5 Ex. Div. 47; 28 W. E. 154 ; 42 L. T. 57. tfee ante, p. 25. {() See ante, p. 25. (u) B. A. 1883, 8. 4 (h). (x) See Ex parte Kicholl, Re Walher, 13 Q. B. D. 469 ; Ex parte Oastler, Re Friedlander, 13 Q. B. D. 471; 33 W. E. 126; 51 L. T. 814; 54 L. J., Q. B. 23; Ex jmrte Gibson, Re Lamb, W. N. 1887, p. 18 ; 55 L. T. 817; Ex parte Jones, Re Walsh, 52 L. T. 694; Treatise, p. 185. ( 45 ) CHAPTER IV. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. If a person, without any bargain or comnmni- Voluntary .. '.11' Ti. i. >• assignments cation with his creditors, vests property m a in trust to trustee for the purpose of paying- his debts, this ^^^ °^^ does not create a trust for the creditors, and the deed, until communicated to the creditors, whether they are scheduled and named as parties to the deed or not, may be revoked or varied by the debtor («). The object of the debtor in a case of this sort is considered to be his own benefit, by making provision and creating an agency for the payment of his debts, and not the benefit of his creditors (a). But the deed will bind the debtor When • p • j_' 'jt l^ Tl j 1 1 irrevocable. 11 communications with the creditors take place between him and them, or between the trustee and the creditors with his concurrence, express or implied, of such a nature as to give the creditors an interest under the deed, and to create the relation of trustee and ccstuis que trust (h). But («) Garrard v. Lauderdale, 2 E. & M. 451 ; 3 Sim. 1 ; Walmpi V. Coutts, 3 Mer. 707; 3 Sim. 14; Acton v. Wood^ 2 M. & K. 492; Smith v. Keating, 6 0. B. 136; Nicholson v. Tutin, 2 K. & J. 18 ; Cornthwaite v. Frith, 4 De Gr. & S. 552. A deed of the above description will not, it is conceived, require registration under D. A. A. 1887. ih) See cases, last note, also Griffith v. liicketts, 7 Hare, 397 ; Johfis v. James, 8 Ch. D. 744 ; 26 W. 11. 821 ; 30 L. T. 54; Harland v. Binks, 15 Q. B. 713; Siggers v. Evans, 5 46 PRIVATE ARRANGEMENTS WITH CREDITORS. What credi- tors entitled. Assignment for benefit of creditors generally. Bona fides necessary. EfFect of se- cret baro^ains. only those creditors will be entitled to the benefit of the deed and to bring an action to have the trusts executed, to whom it is communicated, and who acquiesce in the arrangement made by it [a). Provisions of the above description for the payment of creditors do not necessarily imply that the debtor is insolvent, or so embarrassed that he cannot meet his engagements. And in this re- spect they differ materially from an assignment of his property by a debtor to a trustee for dis- tribution amongst all his creditors rateably in satisfaction of their debts with a view to avoid bankruptcy, and which is generally and is here meant by an assignment for the benefit of credi- tors (h). An arrangement of this description can only be made with the concurrence of the creditors them- selves, and will only bind those who accede to it. And as in the case of compositions, so also in arrangements of this description, bona fides as between the debtor and his creditors, as well as between the creditors themselves, is essential to the validity and binding operation of the arrange- ment. If, therefore, any creditor secretly stipu- El. & Bl. 367 ; 1 Jur., N. S. 851. See and compare Si/ntioi v. Simpson, 5 H. L. Cas. 121. As to the right of a trustee under such a deed to recover property comprised in it, without making any creditor a party to the suit, see Glegg v. Rees, 7Ch. Ap. 71. [a] Johns v. James, supra. If the trustee is a creditor, and accepts the trust, he will be entitled to the benefit of the deed. Ibid. (b) A deed of this sort will require registration under D. A. A. 1887 ; but not under B. S. A. See ante, Chap. 11., Sect. 2. ASSIGNMENTS FOR THE BENEFIT OF CREDITOES. 47 lates for and secures for himself an advantage over the other creditors, and unknown to them, as a condition to his acceding to the arrangement, he will not be entitled to retain such advantage as against the debtor (c) ; and, as in the case of a composition, any of the other creditors may, if they choose, repudiate the arrangement as frau- dulent towards them, and have recourse to their original demands against the debtor (d). In a case of this sort it is immaterial whether the bargain for the additional benefit is made with the debtor himself, or with some third person, or in the latter case, that it is made without the debtor's concurrence or knowledge (e). If it is made with a third party it cannot be enforced against him (/). Upon a similar principle, an agreement, un- Agreement by known to the creditors, by the trustees of a deed deed to retum purjiorting to assign the debtor's property to them debtor's pro- for the benefit of his creditors, that if the debtor p^S?'**'^ would execute the assignment, and make a full discovery of his property, they would return to him 50/., was held to be fraudulent as against the creditors, and incapable of being enforced by the debtor (^). (c) Cochshott V. Bennett, 2 T. E. 766. (); and that anything which the creditor may have received between that date and the distribution of a dividend ought to be deducted from the amount of his debt. As already noticed, it has long been settled, and is now enacted, that an assignment for the benefit of his creditors by a debtor of the whole, or the whole substantially, of his j)roperty is an act of bankruj^tcy (*/). And the fact that the debtor has, with the assent of a large majority of his creditors, assigned his property to trustees to be administered as in bankruptcy, is not a suf- ficient ground for not making a receiving order against him, founded on such act of bank- (n) See note (??), ante, p. 49. (o) Lancaster V. Lice, 31 Beav. 325 ; 31 L. J., Ch. 789. As to the liability of a trustee for wrongly allowing a claim, see Lx parte Ogle, Re Pilling, 8 Ch. Aj}. 711 ; see Treatise, pp. 637, 797. {p) See Ex parte Egyptian Com. and Trading Co., Re Kelson, 4 Ch. Ap. 125 ; Ex parte Joint Stock Disc. Co., Re Daunt, 6 Ch. Ap. 455. (y) See Treatise, p. 143. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 31" ruptcy (r). But a creditor wlio is a party or Creditors who privy to the assignment will not be entitled to p-ivreT cannot set it up as an act of bankruptcy, unless the deed g^*^* "^ ^^ is fraudulent as against him ; as, for instance, on the ground that an undue preference has been given to some particular creditor (5) ; or that the debtor has been guilty of some fraud or misrepre- sentation as to his property or otherwise (t). An assig-nment for the benefit of creditors will The act of ., -, . Ill PIT bankruptcy not be available or impeachable as an act oi bank- not available ruptcy within the Bankruptcy Act, 1883, after months. the expiration of three months from its execution by the debtor, that being the period for which, under that Act, the title of the trustee in bank- ruptcy has relation back as from the date of the presentation of the bankruptcy petition («). But When assign- if the provisions of the deed are of such a nature lent under as to make it fraudulent against creditors within the 13 Eliz. c. 5, it may be set aside, so long as the right to sue for that purjoose is not barred by the Statute of Limitations (x). And a deed pur- porting to be for the benefit of creditors will be (r) Ex parte Dixon, Re Dixon, 13 Q. B. D. 118; 53 L. J., Q. B. 769 ; 50 L. T. 414 ; 32 W. E. 837 ; Ex parte Oram, lie Watson, 15 Q. B. D. 399 ; 33 W. E. 890 ; 52 L. T. 785. («) Bamford v. Baron, 2 T. R. 594 ; Ex parte Kilner, Buck, 104 ; Ex parte Stray, 2 Ch. Ajx 374 ; Oliver v. Kimj, 8 D., M. &G-. 110. {t) Hoivden v. Haigli, 11 Ad. & E. 1033. (m) B. a. 1883, s. 43. Tlie title by relation is by this Act considerably shortened, thus faciHtatiug private arrangements •with creditors. See Treatise, p. 577. See, as to the cal- culation of the three months, Ex parte Eorster, Re Hanson, 35 W. R. 456. {x) Three Towns Bank v. Maddever, 27 Ch. Div. 523 ; 33 W. E. 286 ; 53 L. J., Ch. 998 ; 52 L. T. 35. e2 52 PRIVATE ARRANGEMENTS WITH CREDITORS. fraudulent witliin 13 Eliz. c. 5, if its provisions arc in fact for the benefit of the debtor rather than the creditors, as where the main object of the deed appeared to be the carrying on the debtor's trade for his own benefit (^). So, also, a deed purporting to be for the benefit of creditors Avas held to be void under the statute of 13 Eliz. c. 5, which contained a provision that the debtor should be entitled to the dividends which would otherwise be payable to non-assenting creditors (.e). Deeds bond If, liowevcr, a deed is bond fide executed by a fottheTenelit dcbtor in favour of his creditors, and not meant noU^lTch- ^^ ^ cloak for retaining a benefit to the debtor, abieunder \^ ^r\[\ j^q^ \yQ YQ^fl under the abovo statute, 13Eliz. CO. . although it might, m the event of the debtor s bankruptcy, be void under the bankrupt law as an act of bankruptcy (a). And it will not, it is conceived, affect the validity of an assignment for the benefit of creditors, if it is not communi- cated to some of them until after it has ceased to be im^^eachable as an act of bankruptcy (h), es- pecially as the deed must be registered under the (y) Owen v. Body, 5 Ad. & El. 28; Janes v. IFhitbread, 11 C. B. 406; 20 L. J., C.P.217. (s) Spencer v. Slater, 4 Q. B. D. 13 ; 48 L. J., Q. B. 204; 27 W. E. 134 ; 33 L. T. 424. See Bolclcro v. L. ^ W. Loan Co., 5 Ex. Div. 47; 28 W. E. 154 ; 42 L. T. 57, in which a discretionan' power, given to the trustees to pay the dividends of non-assenting creditors to the debtor, was held not to affect the validity of the deed. See also Ex parte Chaplin, Re Siii- clair, 26 Ch. D. 319 ; 53 L. J., Ch. 732 ; 51 L. T. 345. (ft) Alton V. Harrison, 4 Ch. Ap. 622 ; 28 L. J., Ch. 609. See also Wood v. Dixie, 7 Q. B. 892 ; Hale v. Saloon Omnibus Co., 4 Drew. 492. As to deeds fraudulent under the statute of 13 Eliz. c. 5, and under the law of bankruptcy, see Treatise, pp. 137, 142. {b) That is, for three months after its execution by the debtor. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 53 Deeds of Arrangement Act, 1887, within seven days after its execution by the debtor or a creditor. Pending- the expiration of three months from Position of the execution by a debtor of an assignment of assfgnm^nt'^'^ his property for the benefit of his creditors, the crecUtor'f* °^ position of a trustee under the deed is often one of considerable difficulty and risk. Any disposi- tion of the debtor's property made by him during that period will be liable to be impeached if before its expiration bankruptcy proceedings are taken against the debtor. And if the trustee takes Liawutyof p , , . , trustee in case possession oi tJie property and carries on the of debtor's debtor's business under the provisions of the deed, ^^ ^^ ^'^' and the debtor becomes a bankru^Dt within the above period, the trustee under the bankruptcy may treat him either as his agent or as a trespasser. If he is treated as an agent, he will be liable to account to the bankruptcy trustee for the pro- perty of which he took possession, and for the profits made by him or which he ought to have made. And, on the other hand, if he is treated as a trespasser, the bankruptcy trustee will be entitled to an account of the proj^erty of which he took possession, and to have any unconverted property delivered up to him, and the value, at the time of 230ssession taken, of such part of the property as the trustee under the deed has con- verted, paid to him (c). (c) Ex jiarte Vaiicjhan, Be Riddeoucjh, 14 Q. B. D. 25; 33 W. E. 151 . See Ex parte Raivlwgs, lie Forster, 36 W. E. 144. Having regard to the decisions in these eases, the prudent course for a trustee to take is not to make any payment under the assignment until after the expiration of three months from its execution by the debtor, unless all the creditors accede to the deed or the trustee is otherwise indemnified. 54 PRIVATE ARRANGEMENTS WITH CREDITORS. "WTierebank- If, liowcver, tlic trustcG ill banki'uptcy takes StTasaiV^ proceedings to compel the trustee of the assign- Sder deed mciit to delivcr up to him the proceeds of the as valid. gg^|g q£ ^|jg goods Comprised in the deed, he will affirm the sale, and cannot afterwards maintain an action for the difference between the value of the goods and the amount realized (d). Allowance to So, also, whcre assignees in bankruptcy availed Sd oT ° themselves of the preparations for a sale of pro- Tration^fOT' P^^'^J ^^J ^^^^ trustccs of a crcditors' deed, which intended sale, -^^s Superseded by the bankruptcy of the debtor, the trustees of the deed w^ere held to be entitled to the expenses incurred by them in respect of such intended sale out of the debtor's estate (e). Enforcement ^j^j wlierc tlic trustcGS uudcr a Creditors' deed by bankruptcy trustee of con- contracted to sell the debtor's joroperty, it was by trustee licld that tlic assigiices under a subsequent adjudi- cation against the debtor could enforce the con- tract against the purchaser (/). Power to carry An assignment by a trader-debtor of his stock- trade and pay iii-tradc aiid other property to trustees upon trust creditors out , i • j i i pj of profits does to caiTy Oil his trade, and aiter paying expenses co-p'^SneJs!"' to divide the net profits rateably amongst his cre- ditors, and after all the creditors are satisfied, in trust for the debtor, does not create a partiierslii]^ as between the creditors themselves or make them {d) Smith V. Bake); L. E., 8 C. P. 350; Eoe v. JIuiual Loan Fund Limited, 19 Q. B. D. 347. (e) Lx parte Tomlinson, Re Boyce, 3 D., F. & J. 745. See and compare Re Richards, Ex parte Official Receiver, 32 W. E. 1001, in which case the trustee under the deed was allowed payments made for the benefit of the estate, but not his costs and charges for work and labour done by him. See Ex parte Mutton, Re Cole, 14 Eq. 179 ; Ex parte Lovering, Re Ayshford, 35 W. E. 652. {f) Goodwin v. Lighthody, Daniel, 153. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 55 partners either with the debtor or the trustees ; but the trade will remain that of the debtor and trustees. And it will make no difference that a power is given to the creditors, or a specified majority of them, to discontinue the business, or to make rules or orders as to its conduct and management [g). By the Bankruptcy Act, 1883, provision is made Liability of for enabling trustees in bankruptcy to relieve respect S themselves from liability in respect of property property. burdened with onerous covenants, such as lease- hold property, or subject to onerous liabilities, such as shares in j)ublic companies (Ji). But there is no legislative provision of this nature applicable to trustees under private arrangements with cre- ditors. And although it was at one time considered No power to doubtful whether a trustee under an assignment aJceptSg^hr for the benefit of creditors of the debtor's personal *^^*" estate could repudiate leasehold property, which he deemed prejudicial to the creditors (^'), it is now settled that he cannot do so, if he executes the deed or otherwise so acts as to signify his acceptance of the trust (Jc). {(/) Cox V. Hickman, 8 H. of L. Cas. 268. See Biillen v. Sharp, L. E., 1 C. P. 56. See and compare Eastcrbrook v. Barker, 6 ibid. 1. (A) B. A. 1883, s. 55. See Treatise, pp.478 et seq. With respect to shares in pubhc companies, they do not carry any liability for calls except to persons registered as shareholders. [i) Carter v. Warne, M. & M. 479 ; Hoio v. Kennett, 1 Ad. & E. 659. That an assignment of all the debtor's jDersonal estate will pass leasehold property, see Rimjer v. Cann, 3 M. & W. 343. {Ji) White V. Hunt^ L. E., 6 Exch. 32. See also Hohsoiiy. Thelluson, L. E., 2 Q,. B. 642, as to the vesting of the property in the trustee. 56 TEIYATE ARRANGEMENTS WITH CREDITORS. When exception of leasehold property advisable. But may- assign to a pauper if the lessor will not accept surrender. Covenant in lease not to assign. It has, therefore, become usual in assignments for the benefit of creditors to except from the assignment leasehold property, such at least as is subject to a rack rent, or onerous covenants, or to vest it in the trustee by way of demise, as in the case of mortgages by demise, with power for the trustee to require the debtor to deal with the lease in the former case, and with the reversion in the latter, as the trustee may think fit. If, how- ever, the property becomes vested in the trustee under the assignment, he will be liable for the rent and covenants from tlie time the property vests in him as long as he holds it (/). But he may get rid of all liability by assigning the lease, that is, liability subsequent to the assignment by him, and he would be justified in assigning the lease to a pauper if the lessor refused to acce2:)t a surrender (wz). But he Avill continue liable after assigning the lease for rent accrued and breaches of covenant committed during his ownership). The delivery of the key of the premises to the landlord will not be sufficient to get rid of the liability (n). A trustee in bankruptcy is not bound by a covenant in a lease not to assign (o). But an assignment of a lease, containing such a covenant, to the trustee of a deed for the benefit of creditors (l) Wi'Ih'ns V. Fn/, 1 Mer. 265 ; White v. Hunt, L. R., 6 Ex. 32 ; Wilson v. XVaUani, 5 Ex. 1). 1 55 ; Titter ton v. Cooper, 9 Q. B. D. 473; 30 W. E. 8G() ; 4G L. T. 870; 51 L. J., Q. B. 472. {m) Wilkins v. Fry, supra ; Rou-lexj v. Adams, 4 M. & Cr. 439 ; Jlopkinson v. Loverimj, 11 Q. B. D. 92. {ii) Ansell V. Rohson, 2 Or. & J. 610 ; Hanson v. Stevenson, 1 B. & A. 303. (o) Doe V. Brvan, 3 M. & S. 358. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 67 will bo a breach of the covenant, and entitle the lessor to enter and avoid the lease (^>). But if the debtor becomes bankrupt before he does so, and within three months after the execution of the assignment, the title of the trustee under the bankruptcy to the lease will not be affected by the assignment, which would in such case be rendered void as an act of bankruptcy [q). There are certain descriptions of property which Property cannot be legally assigned for the benefit of ^^ ^^^^ creditors. Thus a clergyman with cure of souls Emoluments is prohibited by law from charging the emolu- ments of his benefice (r) ; and this prohibition applies to pew rents payable to a clergyman under the Church Building Acts {s). So, also, a judg- ment entered up against a clergyman Avill not operate as a charge on the jorofits of his benefice under the statute 1 & 2 Vict. c. 110, s. 13(?f); neither is the pension payable to a retired vicar under the Incumbents Resignation Act, 1871, alienable {u). But it has been held that an {p) Holland V. Cole, 1 H. & C. 67. Nothing short of what would be an actual assignment will operate as a forfeiture under a covenant not to assign. See Doe v. Hogg, 4 I). & E. 220; Doe v. Bevan, supra; Mayor of Bristol v. Westcott, 12 Ch. Div. 461 ; 27 W. E. 841 ; 41 L. T. 117. See and com- pare rarleg v. C'ojjpard, L. R., 7 C. P. 505. {q) Doe V. Fowell, 5 B. & C. 308. (r) 13 Eliz. c. 20. See Alchin v. Hopkins, 1 Bing. N. C. 99. See also, as to Windsor Canonry, Grenfell v. Dean of Windsor, 2 Beav. 544 ; and college fellowship, Feistel v. King's Coll., 10 Beav. 491. («) Ex parte Arrowsmith, Re Leveson, 8 Ch. Div. 96 ; 26 W. E. 300 ; 47 L. J., Bank. 46 ; 38 L. T. 547. {t) Hawki^is v. Gathercole, 6 D., M. & Gr. 1. [u) Gathercole v. Smith, 17 Ch. D. 1 ; 44 L. T. 473 ; 29 W. E. 434; ibid. 577. 68 PEIVATE ARRANGEMENTS WITH CREDITORS. Emoluments of public offices not alienable. Military and naval pay. Principle of the law. annuity payable to a retiring- incumbent by his successor out of the emoluments of the benefice, under the Union of Benefices Act, 1860, is as- signable (./■). There arc also certain offices of a public nature the emoluments of Avhich are not legally alien- able, such as those which relate to the adminis- tration of the law or the customs, or the like {y). So, also, the full (z) or half-pay («) of a military or naval officer cannot be legally assigned, or any arrears thereof (i). Neither can such an officer, whilst he remains in the service of the Crown, mortgage or pledge his commission so as to give the mortgagee or pledgee any rights in respect of it (c). The principle upon w^iich emoluments of the above description are held not to be assignable is that they are granted for the decent sujoport of persons engaged in the service of the State, and that it would be contrary to public policy to allow such emoluments to be assigned to other parties. (a:) Machean v. Deane, 30 Ch. D. 520 ; 33 W. E. 924. (y) See 5 & G Edw. 6, c. 16; Corporation of Liverpool v. Wright, Jolin. 359 ; Palmer v. Bate, 2 B. & B. 873 ; Ex parte Butler, 1 Atk. 210; Bristoiv' s cane, ib. 212; Palmer n. Vaughan, 1 Swan. 173. The salary of assistant parliamentary counsel to the Treasury was held not to be assignable: Cooper v. Reilly, 2 Sim. 560 ; 1 E. & M. 500. (s) Barwick v. Peade, 1 H. Bl. 627 ; Apthorpe v. Aptliorp>e, 35 W. E. 728. («) Flarty v. Odium, 3 T. E. 681 ; Lloyd v. Cheetham, 3 Giff. 171 ; 47 Geo. 3, c. 25, s. 4 ; Ex j^arte Hawker, Re Keely, 7 Ch. Ap. 214. {b) Cathcart v. Blachoood, Co. B. L., 8th ed. 318; Flarty v. Odium, supra. (c) Collyer v. Fallo7i, T. & E. 459. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 59 Upon the same principle, pensions granted to Pensions for ,v» t> ; J 1 • 1 p . past services. omcers oi government not exclusively tor past services, but partly as a consideration for con- tinuing duty or service, cannot be legally as- signed (^). Thus pensions granted to government officers under the provisions of 4 & 5 Will. 4, c. 24, amended by 22 Vict. c. 26, are not assignable (c?). But if a i^ension is granted exclusively for past services, whether it be for life or at the pleasure of others, it may be assigned (e). So if an office offices legaUy be legally saleable, though in the nature of a ^^^^ public office, it may be assigned (/). Military prize money may also be assigned ((/). By the Bankruptcy Act, 1883, provision is Provisions in made for appropriating for the benefit of creditors to such under bankruptcy proceedings, a portion of emolu- p^°p^^ ^' ments of the above descriptions which are not legally alienable (h) ; but there is no such provi- None appiic- sion in the case of private arrangements with arrangements! creditors. An assignment of personal chattels for the Exemption benefit of all the creditors of the grantor is ex- tration of empted from registration under the Bills of Sale f^ fheTraefit Acts(/). But a deed j^urporting to be such an of creditors. assignment will not be within the exception as to (d) Wells V. Foster, 8 M. & W. 149, and Spooncr v. Payne^ 1 D.', M. & G. 383. See Priddy v. Rose, 3 Mer. 86. (e) Davis v. Duke of Marlhoroiujh, 1 Swan. 74 — 79 ; Will- cod V. Terrell, 3 Exch. D. 323 ; Dent v. Dent, L. E., 1 P. & D. 366. As to Indian officers, see Lucas v. Harris, 35 W. R. 112. (/) Ex parte Butler, 1 Atk. 210. (^) Alexander v. Duke of Wellingtoii, 2 E. & M. 35. (A) See Treatise, pp. 463 et seq. (?) B. S. A. 1878, s. 4. 60 PRIVATE ARRANGEMENTS WITH CREDITORS. Creditor claiming adversely not entitled to benefit of deed. As to whether inspectorship deeds are ex- empted from rearistration. such instruments, unless it is an assignment for the benefit of all the creditors of the grantor (k). If, however, the deed is in fact for the benefit of all the creditors, and all can if they please have the benefit of it by signing or assenting to it, the deed will be for the benefit of creditors mthin the above exception, although it is not stated in the deed that it is for the benefit of all the creditors (/). But although the deed may ostensibly be for the benefit of all the creditors, still if any cre- ditor sets up a claim adversely to the rights of the other creditors under the deed, and it is decided against him, he will not be entitled to the benefit of the deed, although he claims to do so before the property is distributed (m). And where a creditor repudiated a composition and obtained judgment against the debtor who became bank- rupt, it was held that he could not afterwards sue the surety for the payment of the compo- sition (n). An inspectorship deed not containing any as- signment of the debtor's property would not seem to be within the exemption from registration of {k) Ge7ie7-al Furnishing Co.\. Venn, 2 H. &C. 153; 32 L. J., Ex. 220. In this ease the assignment -was to a surety, for the payment of a composition to the creditors who signed the deed, in trust for such creditors : Boldero v. L. &; W. Loan Co., 5 Ex. Div. 47; 42 L. T. 57; 28 W. E. 154. 'See remarks on this case, ante, p. 26, note (//). (/) General Furnishing Co. v. l^enn, supra; Boldero v. L. ^ W. Loan Co., siipra. (m) Meredith v. Facey, 29 Ch. Div. 745 ; 33 W. E. 778. See also Field v. Dononghmorc, 1 Dr. & W. 227. (n) Latter v. White, L. E., 6 Q. B. 474. See ^S". C. on app., L. E., 5 H. L. 578. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 61 assignments for the benefit of creditors contained in the Bills of Sale Act, 1878 (o); the object of such deeds being to retain for the debtor the pos- session and management of his property without making any assignment thereof for the benefit of his creditors, except on certain contingencies which may never hapj^en. Under the Bills of Sale Act, 1854, the language inspectorship of which, in the definition of bills of sale, varied Biiis^of'sale materially from that of the Act of 1878, the ques- tudilnt tion as to whether inspectorship deeds, of the 5849°Ld^*^' description above referred to, were assignments is*^i- for the benefit of creditors and exempt from regis- tration within the Bills of Sale Act, 1854, did not arise (jij). Such deeds however are, it is conceived, Such deeds as to any personal chattels comprised in them, saL^ithin within the definition of bills of sale contained in ^^^ il^s^^ the Bills of Sale Act, 1878, inasmuch as the pro- visions usually inserted in them are sufficient to confer a right in equity to such chattels, or to a charge or security thereon (o). Unless, therefore, such deeds can be considered to be within the above exemption as to assignments for the benefit of creditors, in respect of personal chattels com- prised in them, it would seem that they not only ought to be registered under the Bills of Sale Acts, but that, being bills of sale by way of security for the payment of money, they will be absolutely void under the Bills of Sale Act, 1882, (o) See B. S. A. 1878, s. 4. See also ante, p. 29, as to these deeds. (jo) The Bankruptcy Acts, 1849 and 1861, in fact, contained special provisions for giving effect to inspectorship and other deeds for the benefit of creditors. 62 PRIVATE ARRANGEMBNTS WITH CREDITORS. Unregistered biUs of sale void as against trustee under assignments for creditors. Jurisdiction in bankruptcy as to such deeds. unless thev can be framed so as to be in accord- ance with the form prescribed by that statute, wliich would seem to be impossible (<7). And until there is some authoritative decision that an ordinary inspectorship deed, not containing any assignment of property, constitutes an assignment for the benefit of creditors within the 4th section of the Bills of Sale Act, 1878, such a deed cannot, it is conceived, be safely relied on as a valid instrument for effecting an arrangement between a debtor and his creditors (r). Not only is an assignment for the benefit of creditors exempted from registration under the Bills of Sale Acts, but prior unregistered bills of sale, though not given by Avay of security for the payment of money, will be void as against the trustees under such assignments [s), j^rovided the latter are registered under the Deeds of Arrange- ment Act, 1887. The Bankruptcy Acts, 1849 and 1861, contained special j)rovisions for facilitating arrangements with creditors, and under these Acts and the Bank- ruptcy Act, 1869, the Courts of Bankruptcy had concurrent jurisdiction with the Court of Chancery for the purpose of carrying the trusts of such deeds into effect {t). But the Banki'uptcy Act, 1883, does not contain any provisions of a similar {q) See ante, p. 27, cases note (//), and pp. 28 et seq. (r) Deeds of inspectorship are required to be registered under D. A. A. 1887; but registration thereunder will not make them valid if otherwise invalid : sect. 17. («) B. S. A. 1878, s. 8 ; Paine v. Mathews, 53 L. T. 872. {t) See Ex parte Andersoti, 5 Ch. Ap. 473; Ex parte Rumholl, 6 ibid. 842. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 63 character, and the only jurisdiction which it is conceived the Courts of Bankruptcy now possess res]3ecting' deeds under private arrangements with creditors, is to set them aside if they constitute acts of bankruptcy (z^). If it is desired by any Chancery creditor to have the trusts of the deed carried High Com-t into effect under the direction of the Court, the bumUo"' Chancery Division of the High Court will be the l^^^^^^ *^^ proper tribunal for that purpose. With respect to the duties and liabilities of Duties and ,, 1 . 1 c ii T n , p Habilities of trustees under assignments lor the benent oi trustees. creditors, they have been in some measure already incidentally referred to. So far as relates to the creditors who are the cestuis que trust under the deed, the same principles apply to them as between trustees and their cestuis que trust generally. If, therefore, the trustee acts impro- perly in the administration of the estate he will be liable to the creditors as for a breach of trust (x). The trustee will not be allowed to make any profit out of his office, or to purchase or possess himself of any part of the trust estate for his own benefit [y). He will, however, not be liable for losses arising through agents necessarily employed by him in the execution of the trust (,?), {u) See Treatise, p. 40, as to the jurisdiction of the High Court, and the local courts of bankruptcy, under B. A. 1883. {x) Ex parte Shaiv, 1 G. & J. 156; Ex parte Proudfoot, 1 Atk. 253. {y) Ex parte James, 8 Ves. 337; Ex parte Bennett, 10 ibid. 581 ; Ex parte Badcock, M. & Mc. 231. (s) Re Earl of Lichfield, 1 Atk. 87 ; Ex parte Townsend, 1 Moll. 137; Ex parte Wilkinson, Buck, 197. See Brier V. Evison, 26 Ch. D. 238 ; 32 W. E. 20. G-i PRIVATE ARRANGEMENTS WITH CREDITORS. Not liable for payments to creditors through mis- take of law. Liability for property lost through neglect. if, at least, he has not been guilty of wilful default or culpable negligence in the selection of them [a). As a general rule, ignorance of the law will not exonerate a trustee from liability in respect of money wrongly paid by him (b). But the trustee under an assignment for the benefit of creditors will not be liable to make good money wrongly but bond fide paid by him to a creditor, by way of dividend in resj)ect of a debt claimed to be due to the creditor, under a mistake of law, if at least the law was doubtful and not at the time settled (c). It was said by James, L. J., that the position of a trustee in deciding on the claims of creditors is not merely that of a trustee, but is of a ^2^«5z- judicial character, and that he must be treated as an arbiter or judge, supjDosing he acts to the best of his power (d'). The trustee, however, will be liable for property lost to the estate through neglect on his part amounting to a breach of trust, and also for interest on the value of such property (e). (a) See preceding note. (b) See Lewin on Trusts, Stli ecL, p. 497. {c) Ex parte Orjle, Re PilUny, 8 Ch. Ap. 711; 42 L. J., Bank. 197; 21 W. E. 988. (f/) Ibid. According to the principle of ttis decision, it would seem that a trustee ought not to be held liable for costs occasioned by his erroneously rejecting a claim if he does so honestly, and after careful consideration of the facts. lUit he may be made personally liable for the payment of costs occasioned by his acting unreasonably, and on frivolous grounds, in the rejection of a claim. See Ex parte Broivn, Re Smith, 17 Q. B. D. 488; Ex ^mrte Edmonds, Re Green, 53 L. T. 967. (e) Ex parte Ogle, supra. ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. 65 The trustee will be entitled to be paid out of Trustee the estate all expenses properly incurred by him expenses. in the administration of the estate, including moneys bond fide advanced by him for the pur- poses of such administration, and not covered by his remuneration (/) ; but not sums ]3aid by him to an agent for doing what he ought to have done himself [g). With respect to strangers the trustee will be Liabmtyto liable under any contracts personally entered into by him in carrying on the debtor's business or winding up his estate, but he will be entitled to be indemnified out of the assets in respect of all contracts and liabilities properly entered into and incurred for the purposes of the trust [Ji). And if Liability of the arrangement is that the business of the debtor debtor's shall be carried on, and his estate wound up canied on under the control and superintendence of trustees, superiiiteM- as, for instance, under an inspectorship deed, but ^^^'^'^• so that his business shall continue to be that of the debtor, and that he shall not carry it on merely as the agent or servant of the trustees, the latter will not be liable for contracts entered into by or for goods supplied to the debtor, upon orders given by him in his own name, and without (/) Ex parte Joyner, 2 M. & A. 1 ; Ex parte Strange, M. & Mc. 31 ; Ex parte Be Tastet, 2 G. & J. 403 ; Ex parte Hartop, 9 Yes. 109 ; Ex parte Prater, 4 D. & C. 214 ; Ex parte Kennard, 21 L. T. 484. {g) Ex parte Ogle, supra. {h) See Treatise, p. 633, as to liabilities of trustee in bankruptcy. ^J6 PRIVATE ARRANGEMENTS WITH CREDITORS. any authority for lilm to pledge the credit of the trustees (Ji). LiabiHtyfor The trustco will also be personally liable for costs of p ^• • • ^ 1 1 '111* Htigation. the costs 01 litigation ordered to be paid by him; but subject nevertheless to the right of indemnity out of the trust estate, if such litigation was not improperly entered into by him, as if it was entered into Avith the consent of the creditors, or of the committee of inspection, if authorized by the deed to sanction it (^'). (h) Eastcrhrook v. Barker, L. E., 6 C. P. 1. See Wigg v. Redjxith, L. E., 1 Exch. 335 ; Steele v. Zow, 2 F. «fe F. 772 ; Chaplin v. Young, 33 Beav. 330. (z) As to trustee's liability for costs of litigation, see Ex parte Angerstein, 9 Ch. Aid. 479 ; 30 L. T. 446 ; 22 W. E. 581 ; 43 L. J., Bank. 131 ; Pitts v. La Fontaine, 6 Ch. Ap. 482 ; Watson v. Halliday, 52 L. J., Ch. 543 ; 48 L. T. 545 ; 31 AV. E. 536. ( 67 ) CHAPTER V. EFFECT OF PRIVATE ARRANGEMENTS ON THE REMEDIES OF CREDITORS. As a general rule an agreement by creditors to Composition accept a composition in discharge of the debts wh^eii75irad- owing to them, if no default is made by the acttLV/' *° debtor, may be 23leaded by him by way of creditors. accord and satisfaction as a defence to an action brought by one of the comjjounding creditors for his original debt(/i:). And if everything on the debtor's part is performed, the composition agree- ment may be pleaded by him in bar to an action by a creditor who has failed through his own fault to obtain the full benefit of the agreement, as if the creditor has refused to accept the com- position when tendered (/), or has so acted as to waive his right arising from the debtor's de- fault (wz). It is not incumbent on a creditor to a23j)ly for if composition payment, and the composition arrangement will original' not, in the absence of an absolute release of the (k) Norman v. Thompson^ 4 Excli. E. 760 ; Bradley v. Gregory, 2 Camp. 383. (/) Bradley v. Gregory, supra. See Me Hatton, 7 Ch. Ap. 723 ; Ex liarte Hemingham, ibid. 724, note ; Reay v. White, 1 C. & M. 748. (m) Shipton v. Casson, 5 B. & C. 378. F 2 debts revive. 68 PKIVATE ARRANGEMENTS WITH CREDITORS. And mil be proveable if debtor is adjudged bankrupt. Rule as to proof of original debts : where defeasible release ; debtor by the creditors, be pleadable in bar to an action by them for their original debts, if the debtor does not spontaneously jDcrform his part of the agreement (n). But on the failure of the debtor to pay or tender payment of the compo- sition, or give security for the same according to the terms of the arrangement, the original debts will, as a general rule, revive and be proveable if a receiving order is made against the debtor, subject only to the creditors giving credit for anything paid to them on account of the compo- sition, and delivering uj) any security held by them from the bankruj^t for payment thereof (o). If, however, the composition deed contains a release by the creditors, subject to a proviso that if the composition is not duly paid the release shall be void and the creditors restored to their original remedies, and no default is made by the debtor before a receiving order is made against him, the creditors, in the absence of any stipula- tion to the contrary, will only be entitled to j)rove for the composition or any unpaid instalments thereof, and not for their original debts or the unpaid residue thereof (p). But, on the other (n) Crawleij v. Hillary^ 2 M. & S. 120; Walker v. Seaborne, 1 Taunt. 526'; Oughton v. Trotter, 2 Nev. & Man. 71. (o) Ex parte Bennet, 2 Atk. 526 ; Ex parte Croshie, 2 M. & A. 393; Edwards v. Coombe, L. E., 7 C. P. 519; Re Hatton, supra. (/>) Ex parte Peele, Re Dodgson, 1 Eose, 435. See and compare Hall v. Levy, L. E., 10 C. P. 154. A release subject to a defeasance may be pleaded as a defence before tlie event wliich. is to render it void bas bappened. It amounts to a covenant not to sue except on tbat event. See Newington v. Levy, L. E., 6 C. P. 180, 191, per Blackburn, J. EFFECT OF, ON THE REMEDIES OF CREDITORS. 69 hand, if the release is made conditional on the where debtor's duly i^aying the composition, and a release. receivhig order is made against him before the composition is fully paid, or any default is made by him in the payment thereof, the creditors will be entitled to prove for their original debts or the unpaid residue thereof (q). Under the former Bankruptcy Acts, the Statute statute of of Limitations did not run against the creditors does not run after an adjudication against the debtor, which creditors operated as a trust for the benefit of the JJJ^n^forthSr creditors (/'). And the same rule will prevail benefit. under the Act of 1883, after a receiving order is made against the debtor. So, also, in the case of an assignment of property for the benefit of creditors or to secure the payment of a composi- tion, the Statute of Limitations will not run so far as relates to such property, the statute being no bar to an express trust (5). But it seems Whether it doubtful whether the statute will not run, as ofcompo- against the original debts of the creditors under a composition arrangement without any ccssio hono- nim, if the debtor should fail to pay the composi- tion, unless at least it is expressly stipulated that it shall not in such case be pleadable by the debtor (^f). There would, however, seem to be ground for contending that, by the composition (y) Ex parte Vere, Re Palmer, 1 Rose, 281. (r) Ex parte Ross, 2 Gr. & J. 793 ; Stcrndale v. Hankinson, 1 Sim. 393. See Treatise, p. 230. [s) See Lewin on Trusts, 8th ed., p. 875. {() See Ex parte Topping, Re Levey, 34 L. J., Bank. 44. See and compare Phillips v. Phillips, 3 Hare, 281. sition. i PRIVATE ARRANGEMENTS WITH CREDITORS. arrangement, a new agreement is substituted for the original contract with the debtor, namely, on the part of the creditors, not to sue the debtor for their original debts if he duly performs liis part of the arrangement, and on the part of the debtor, to j^ay the original debts in full if he fails to pay the composition ; and tliat the Statute of Limita- tions will in such case only run as against the ori- ginal debts from the time of the debtor's default (?^.). Creditors on jf tjio debtor makcs default in i^erformino- his (lebtor s _ , ■■■ ^ default may part of the arrangement, this will not render the they wiu avaH composition absolutcly void, but only voidable by themselves ij«j_i Tj i xxl of it. such oi the creditors as may choose to take advantage of the debtor's default (:?^). And a creditor, after taking the benefit of the arrange- ment, cannot elect to treat it as void by reason of any prior default on the part of the debtor [x). Effect of an If the compositioii deed contains an absolute release. release by the creditors, all right to prove in respect of their original debts will be barred, and in such case proof, if the debtor becomes bankrupt, whether before or after default by him, can, as a general rule, only be made in respect of the composition (^). But this will not be the case if {u) See Good v. Cheeseman, 5 B. & Ad. 328 ; Crawley v. Hillartj, 2 M. & S. 120; Omjldon v. Trotter, 2 Nev. & Man. 71; Slater v. Jones, L. E., 8 Exch. 193, 194, per Bramwell, B. (x) Hyde V. Watts, 12 M. & AV. 254, 268. (y) Small v. Manvood, 9 B. & C. 300. The effect of the release will also extend to release any securities held by the creditors, and any sureties for their debts, unless the rights in respect thereof are reserved. See, also, that the release will discharge securities as well as the debts, C'otvper v. Green, 7 M. & W. 633. But this will not be the effect of an agree- ment to release not under seal : Thomas v. Courtney, 1 B. & A. 1 . EFFECT OF, OX THE REMEDIES OF CREDITORS. 71 the deed constituted an act of bankruptcy, as if it Where deed contains an assignment of the whole of the debtor's an act of property, and it is set aside at the instance of the ^^ "^ ^^' trustee under the debtor's bankruptcy (*). In such a case the creditors will be entitled to prove for their original debts, notwithstanding the release in the avoided deed(.e). And this would also seem to be Where release the effect if the deed is avoided for non-registration, on equitable And although the release is in form absolute, still ^^°"^ '^^ if the circumstances are such as to make it in- equitable that the creditors should be bound by it, they will be allowed to set up their original debts, as where the debtor, or some third person on his behalf (a), and either with or without his knowledge or consent, has agreed to give to some particular creditor an advantage over the others, as an in- ducement for such creditor to accept the composi- tion (b) ; or where the debtor has been guilty of misrepresentation, or of concealment of his pro- perty (c), or of some other impropriety ; or where the release is executed on the faith of its pro- moting some particular object which fails (f/j. (z) See Doe d. Pitcher v. Anderson, 5 M. & S. 161. In this case the composition deed, which contained an absokite release, was set aside by reason of a prior act of bankruptcy ; and a creditor who was a party to the deed was held not bound by the release. (a) Jachnan v. Mitchell, 13 Ves. 581 ; Ex jicirte Milner, Re Milner, 15 Q. B. D. 605 ; 33 W. E. 867 ; 54 L. J., Q. B. 425. {b) Jachnan v. Mitchell, supra ; Fisher v. Bridyes, 3 El. & Bl. 642 ; Cockshott v. Bentiett, 2 T. E. 766 ; Marc v. Sandford, 1 Giff. 288 ; Ex imrte Sadler and Jackson, 15 Ves. 52 ; Leicester V. Rose, 4 East, 27 1 . See and compare Lee v. Lockhart, 3 M. & Or. 302. (c) Hoioden v. Haigh, 11 Ad. & E. 1033. (f/) Ex parte Cazeneau, 9 Jur., N. S. 655, 72 PRIVATE ARRANGEMENTS WITH CREDITORS. Where A^'aiii, if the intention was to substitute the composition ^.. ip i ••iii i substituted composition absokitely for the original debts, the ciebtr"^^'^ latter will not be revived by non-payment of the composition, but the composition may be pleaded Where com- ^s ail accord and satisfaction ( /"). So, also, the position not , , . paid through debt of a Creditor will not be revived, if he has so creditor or actcd as to make it inequitable for him to enforce his legal rights [g) ; or if the composition was not paid or tendered through some act of the creditor, or through some accident, and not through any default on the part of the debtor (^). Creditor A Creditor who executes a deed of arrangement executing ., ^- .. ,. deed cannot Containing a general release by the creditors, restrict opera- , i • i l^ i' j> i i i tion of release, caiiiiot restrict the Operation oi such release by appending to his signature a note that it shall only apply to a specified portion of his de- mand [h). But the release will not prejudice any right of set-off which the creditor may have But he may agaiiist tlic dcbtor (^). And a creditor may annex ditionaiiy. to liis signature or assent a condition that he is only to be bound by the arrangement if all or a certain proportion of the creditors assent to it, and such creditor will not be bound if the condi- tion is not fulfilled (Z:). So, also, if a creditor adds to his signature that it is without prejudice {/) Ex parte Harnaman, 12 Jur. 643 ; Re Hatton^ 7 Ch. Ap. 723 ((J) Ex parte Peacock, 8 Ch. Ap. 682 ; 21 W. E. 755 ; 28 L. T. 830 ; Ex parte King, 17 Eq. 332. (h) Exchange Bank of Yarmouth v. Blethen, 10 App. Cas. 293 ; 54 L. J., P. C. 27 ; 33 W. E. 801. ii) Fazakerley v. McKnight, 6 El. & B. 795 ; 26 L. J., Q. B. 30 ; 2 Jur., N. S. 1020. (Ji) Lewis V. Jones, 4 B. & C. 511. EFFECT OF, ON THE EEMEDIES OF CREDITORS. 73 to his securities, the latter will not be affected, unless, at least, the reservation of such securities is concealed from the other creditors (/), and the deed does not contain any general reservation of the rights of creditors to the benefit of their securities. If a creditor who executes or assents to an a creditor ,1 111 • n T • T, •! must disclose arrangement by a debtor with his creditors wil- aiihisde- fully understates the amount of his debts, or, ™^^ ^' having several demands against the debtor, dis- closes only one or some of them, he will be estopped from afterwards suing the debtor in respect of the amount of his debt not stated, or the demands not disclosed (m). Such a conceal- ment would, in fact, be a fraud on the other creditors, who are assumed to accede to the arrangement on the understanding that all the creditors are to be placed on the same footing, and to accept the arrangement in res]3ect of all their demands against the debtor. If this is not the intention, it should be stated in the deed, or it should appear from the nature of the transac- tion itself, that the demands not disclosed were not such as were intended to be comj^rised in the arrangement [n). {I) See Duffi/ v. Orr, 1 CI. & Fin. 253 ; Lee v. Lockharf, 3 M. & Cr. 302. (m) Holmir v. Viner, 1 Esp. 134; Tabram v. Freeman, 2 C. & M. 451 ; Britten v. Hughes, 5 Biug. 460 ; Blackstone v. Wilson, 26 L. J., Ex. 229 ; Bissett v. Burgess, 23 Beav. 278 ; 26 L. J., Ch. 637 ; 2 Jur., N. S. 1221. (n) Payler v. Homersham, 4 M. & S. 423 ; Bain v. Cooper, PRIVATE ARRANGEMENTS WITH CREDITORS. Power of partner to bind co- partner : by release ; by covenant not to sue. One partner has not, as a general rule, any implied authority to bind the firm by a contract under seal (o). But a release by one partner, on belialf of himself and his co-partners, of a debt owing to the firm will bind all the partners (7^). This, however, will not, in an ordinary case, be the effect of a covenant not to sue by one partner, in respect of a debt owing to the firm ((/). Such a covenant will bind the partner who covenants, and render him liable for a breach of it, but it will not, as a general rule, bind his co-partners, unless it w^as made on their behalf and with their consent {q). A perj^etual covenant not to sue will, however, if entered into by one individual with another, operate as a release of the covenantee (y). And if one partner, on behalf of himself and his co-partners, executes or assents to a deed of arrangement by a debtor of the firm with his creditors generally, containing a covenant by the creditors not to sue the debtor in respect of the debts owing to them, all the members of the firm will be bound by the covenant, the doctrine, as to 9 M. & W. 701. In this case the creditor was, under the cir- cumstances, held to have signed the deed only in respect of his own debt, and not the debt of his firm. See Lanyon v. Bavey, 11 M. & AV. 218. (o) Harrison v. Jackson, 7 T. E. 207. (;j) 1 Eoll. Abr. 410; Tooker's case, 2 Eep. 68; Haivkshaio V. Parkins, 2 Swan. 548 ; Jones v. Herbert, 7 Taunt. 421. See Treatise, p. 722. {q) Wahnshy v. Cooper, 11 Ad. & E. 216. (r) Hutton V. pAjre, 6 Taunt. 289 ; Smith v. Maplehack, 1 T. E. 446 ; Hodges v. Smith, Cro. Eliz. 623 ; Davey v. Premier- grass, B. & A. 193. EFFECT OF, ON THE REMEDIES OF CREDITOES. 76 the incompetency of partners to bind each other by contracts under seal, not applying to arrange- ments of this sort (s). And in such cases a per- petual covenant not to sue will be as effectual for the discharge of the debtor as a release (t). It was a rule at common law that a covenant EfPect at law not to sue for a limited time could not be pleaded nours'^iTfor in bar to an action brought contrary to such perSd^*^ covenant, as the effect of such a plea, if allowed, would be to deprive the covenantor of all right to sue in resj^ect of his demand against the cove- nantee, it being a principle of law that if the right to bring a personal action is suspended by the act of the party entitled to it, for ever so short a period, the right of action is extinguished, and cannot be revived (w). In order, therefore, to avoid this result, and to give effect to the intention of the parties in respect of such a cove- nant, it was held that the covenant did not affect the covenantor's right of action, but that it gave to the covenantee the right to bring a cross action for damages to the extent of the injury sustained by breach of the covenant (u). It was, however. Effect of in'oviso that (s) Dudgeon v. 0^ Connelly 12 Ir. Eq. 566; Lindley's Partn., 4th ed., p. 277 ; Morans v. Armstrong, Arm., McAr. & Ogle, Ir. N. P. Ca. 25. See Treatise, p. 722. {t) AVhere there is a perpetual covenant not to sue, the covenant is held to be pleadable in bar as a release, in order to avoid circuity of action, because the damages to be re- covered in an action brought for suing contrary to the covenant would be equal to the debt or sum agreed to be forborne: Ford v. Beech, 11 Q. B. 852; 12 Jur. 310. (m) Ford V. Beech, supra ; Thimblebg v. Barron, 3 M. «& W. 210. 76 PRIVATE ARRANGEMENTS WITH CREDITORS. deed should be pleadable in bar to action in breach of covenant. Effect of composition resolution Tinder B. A. 1869. Probable con- struction of composition arrangement imder Judi- catiu'e Acts. If there is an absolute release a pro- lielcl that if a composition deed contained a cove- nant of this sort, and also a proviso that the deed might be pleaded in bar to an action brought in breach of the covenant, the deed was pleadable in bar to the action (.-?;). And it was held that when creditors passed a resolution for the accej^tance of a composition under the 126th section of the Bankruptcy Act, 1869, the resolution might be pleaded in bar to an action brought, before the debtor's default, by a creditor bound by the reso- lution, on the ground that there was an implied agreement to this effect on the part of the cre- ditor (.?/) ; and, also, that the creditor's right to bring his action for his original debt revived in case of the debtor's default, on the ground that there was an implied agreement to that effect on the part of the debtor (.e). And it Avould probably now be held, having regard to the equitable jurisdiction given by the Judicature Acts to the courts of law, that this is the equitable construc- tion of an ordinary composition arrangement, so as to carry the intention of the parties into effect, and to give them the full benefit of the arrange- ment without any circuity of action (a). If a deed of arrangement with creditors con- tains an absolute release or covenant not to sue, (x) Walker v. Nevill, 3 H. & C. 103 ; 34 L. J., Exch. 73. (y) Slater v. Jones, L. E., 8 Exch. 186. (s) Edivarcls v. Coombe, L. E., 7 C. P. 520 ; lie Hatton, L. E., 7 Ch. Ap. 723. (a) See Slater v. Jones, supra. See and compare Beech v. Ford, 7 Hare, 208. EFFECT OF, ON THE REMEDIES OF CREDITORS. 77 any promise eriven by the debtor to a creditor to mise to pay m 1 • 1 • 1 -. • n n Ml -1 7 JL fuU without ]}a,j him his debt in iiili will be niidimi pactum, fresh consi- ■, , p ii/7\ 1 • , • (> 11 deration is not and not eniorceable(6^), unless it is lounded on enforceable. some fresh valuable consideration (c). (i) Ex parte Hall, 1 Dea. 171. See Heather v. Webb, 3 C. P. D. 1 ; Jaleman v. Cook, 4 Ex. D. 26 ; 27 W. E. 171 ; 45 L. J., Ex. 165. (c) Jakeman v. CooA-, supra. 7'8 PRIVATE ARRANGEMENTS WITH CREDITORS. CHAPTER VI. EFFECT OF PRIVATE ARRANGEMENTS WITH CREDITORS ON SURETIES AND SECURED CREDITORS. Actsby^yiiicii If the contract by winch a surety is bound is so a siiretj is '' ^ y ^ discharged, altered by the creditor and principal debtor as materially to affect the surety's position («), or if the creditor agrees to give time to the principal (5), or if he omits to do anything which his duty to the surety enjoins him to do, and the omission proves injurious to the surety, the latter will be discharged (c). Principles as ^lic principles applicable to the discharge of a to discharge . . of a surety surcty, in consequcncc of acts of the creditor arrangements wliicli arc iujurious to him (<:/), apply where the ■svith creditors. t, ' ^^ i l^ , p,i / creditor, without the consent oi the surety, assents to a deed of composition or of assignment by the debtor for the benefit of his creditors, containing a release by them or a covenant not to sue the debtor in respect of their debts. (a) Holme v. BmnsJcill, 3 Q. B. D. 495 ; Phillips v. Foxall, L. E., 7 Q. B. 610 ; Sanderson v. Asto)i, L. E., 8 Ex. 73. {b) Samuel Y. Iloicarth, 3 Mer. 272; Moss v. Hall, 5 Exch. 4G ; Davies v. Steinbank, 6 De Gr., M. & Gr. 679 ; Or. Fin. Corp. V. Overend, 7 Ch. App. 142 ; 7 H. L. App. 348. (c) JFatis V. Shutfleicorth, 5 H. & N. 235; Wulffv.Jay, L. E., 7 Q. B. 756 ; Polak v. Everett, 1 Q. B. D. 669 ; Carter V. White, 25 Ch. D. 666. {d) See Treatise, p. 284, as to general principles ajiplicable to sureties, and the right of proof by and against them in bankruptcy. EFFECT OF, ON SURETIES AND SECURED CREDITORS. 79 It is competent, however, for the creditors. Reservation 01 rGDlGcliGS when they enter into an arrangement of this sort against third with their debtor, to stipulate for the reservation ^^^ ^^^' of their remedies against other persons, and when this is done such persons will remain liable (e). But the reservation must appear on the face of Thereserva- , T . . , ^ T • -I l^ , ' tion must be the instrument by which the arrangement is stated in the made (/). No mere oral statement of an inten- ^^^ ' tion to reserve remedies against third parties will be sufficient to continue their liability, if the deed itself is silent on the subject (^). A release to one of two joint or joint and Release to one - ^ „, -, - joint debtor separate co-debtors will, as a general rule, operate Will release as a release of the other (/i). If, therefore, a deed of arrangement with creditors contains an abso- lute release of the debtor by the creditors, with- out any reservation of their remedies against other parties liable for their debts, the latter will also be released (/). But this will not be the case if remedies if such remedies are reserved. Where this is sS^etiesare done the release will, with a view to give effect reieairmU^ to the intention of the parties, be regarded covenant not merely as a covenant not to sue(/i:), which, if to sue. entered into with one of two or more joint or joint and several debtors, will not operate as a (e) Oioen v. Homan, 4 H. L. Cas. 997 ; 17 Jur. 851. {f) Ex parte Glendinnmg, Buck, 517. (y) Lewis V. Jones, 4 B. & C. 506. (A) See ante, p. 74, cases note {p). [i) Nicholson v. Revill, 4 Ad. & E. 675 ; Kearsley v. Cole, 16 M. & W. 128 ; Wchh v. Hewitt, 3 K. & J. 438. ik) Lewis V. Jones, 4 B. & C. 511 ; Solhj v. Forbes, 2 B. & B. 38; Price v. Barker, 4 El. & B. 760 ; 1 Jur., N. S. 775 ; 26 L. J., Q. B. 136. 80 PRIVATE ARRANGEMENTS WITH CREDITORS. release of any of tlicm, except the one with Noreserva- whom the covenant is entered into(^). If, how- tion if debts . i i j. extinguished, evcr, the transaction amounts to an absolute extinguishment of the debts, the remedies of tlie creditors against sureties cannot be reserved (m). Reservation If the rights of Creditors against sureties arc against sure- rescrvcd this will operate at law as an implied reser^tiou of rcscrvation of the rights of the latter against the S-ains?^'^'' debtor, on the principle that the debtor, by con- debtor, senting to the reservation of the rights of the creditors against sureties, impliedly consents that the latter shall have their remedy over as against him (n), and this although the surety acquiesces in the arrangement (o). If, therefore, the surety pays the creditor the whole of his debt, or so much as remains due, he will be entitled to stand in the creditor's place for the composition under a composition arrangement, and under an assign- ment for the benefit of creditors, for a dividend Surety pay- ou tlic amount SO paid. And if the surety pays OTtitTed to his the Creditor in full he will also be entitled to an assignment from the creditor of any security held by him for the payment of his debt (7:?). And if (I) Walmsley v. Cooper, 11 Ad. & E. 210; Hutton v. Eyre, 6 Taunt. 289; Davey v. Prendergrass, 5 B. & A. 187; and cases note (/;). (m) Webb v. Heivitt, 3 K. & J. 438 ; Batcson v. Gosling, L. E., 7 C. P. 9. (m) Solly V. Forbes, 2 B. & B. 38 ; Hooper v. Marshall, L. E., 5 C. P. 4 ; 39 L. J., C. P. 14. (o) Kearsley v. Cole, 16 M. & W. 128. {p) Mercantile Law Amendment Act, 19 & 20 Vict. c. 97, s. 5 ; Forbes v. Jackson, 19 Cli. D. 61.5 ; 30 W. E. 652 ; 51 L. J., Ch. 690 ; 48 L. T. 722 ; Campbell v. Rolhwell, 47 L. J., C. P. 144; 38 L. T. 133. securities. EFFECT OF, ON SURETIES AND SECURED CREDITORS. 81 by reason of the creditor's dealings with his secu- rity, he cannot give it up unaltered to the surety, the latter will be entitled to be discharged from liability (^), at least to the extent of the value of the security (r). If the surety acquires the bene- fit of the creditor's securities they must be first applied in recovering the amount paid by him, and the surety Avill only be entitled to a dividend for the deficiency (s). If the payment of the composition is partly Rights of guaranteed by a surety, and default is made by and surety the debtor in 2:)ayment of any instalment not composition. guaranteed, this will not release the surety from his liability to pay the amount guaranteed by him, and the creditors will be entitled to recover from him the amount guaranteed, without pre- judice to their right to recover from the principal debtor the unpaid balance of their debts (^). But the surety, uj^on j^ayment by him of the amount guaranteed, Avill be entitled to prove against the debtor's estate, if a receiving order is made against him, for the amount paid by him to the creditors, pari passu with them in respect of so much of their original debts as remains un- paid (w). And if the composition is made with Where surety {q) Polalc V. Everett, 1 Q. B. D. 669 ; 24 W. E. 689 ; 48 L. J., a B. 218; 35 L. T. 250. (r) Rainhow v. Juggins, 5 Q. B. D. 138; 29 W. E. 422; CamphcU v. RotJiwell, supra. (s) Ex parte Slierrington, 1 M., D. & D. 195. it) Glegg v. Gilbeg, L. R., 2 Q. B. D. 209 ; 46 L. J., Q. B, 325 ; 25 W. E. 311 ; 35 L. T. 927. (?<) Ex parte Gilbeg, Re Bedell, 8 Ch. Div. 248 ; 26 W. E. 768 ; 47 L. J., Bank. 49. 82 PRIVATE ARRANGEMENTS WITH CREDITORS. for origiual debt and for compositiou. Eights of secured creditors in bankruptcy. In ■winding up companies and insolvent estates of deceased debtors. Rule as to secured credi- tors in private arrange- ments. the consent of the surety for the original debt, who becomes surety also for the comj^osition, the liability of the surety will be restricted to the amount of the composition, and he will not, in the absence of any agreement to that effect, be liable to pay the original debt if the debtor fails to pay the composition {:x). It has long been an established principle of the bankruptcy law that a secured creditor cannot retain his security and j)rove for the full amount of his debt (p). He may realize his security, and if the proceeds are insufficient to pay his debt he may prove for the deficiency; or if he has no power to realize his security by sale he may apply to the Court to have his security realized under its direction, and if the proceeds are in- sufficient to satisfy his demand he will be entitled to prove for the deficiency. And if he desires to prove before realizing his security, he may assess the value (^f it and prove for the balance of liis debt after deducting the amount of the assessed value. And the same rule ap^^lies in winding up companies and administering the estate of a deceased insolvent (?/). Upon the principle that creditors, who concur in an arrangement by a debtor with his creditors, are assumed to do so on the understanding that all the creditors shall be placed on an equal foot- ing, and that no creditor shall have a greater {x) ExjjcD'le Poivell, 2 M. & A. 533. (y) As to the rights of secured creditors in bankruptcy, see Treatise, pp. 337 et seq., and under Judicature Act, 1875, s. 10, Treatise, p. 375. EFFECT OF, ON SURETIES AND SECURED CREDITORS. 83 benefit or security than the other, it is incumbent upon a creditor who holds a security for his debt, and desires to have the benefit of the arrange- ment, and also of his security, to disclose the existence of the latter to the other creditors, and to obtain their assent to his retaining the benefit of it (0). Hence, it is usual in deeds of arrange- ment with creditors to insert not only a reserva- tion of the remedies of the creditors against third parties, but also a provision that the arrangement shall not prejudice the rights of the creditors to the securities held by them ; and also a provision corresponding to the above rule in bankruptcy, that if the security is on the property of the debtor, the creditor shall only be entitled to a dividend on the balance of his debt after realiz- ing or giving credit for the value of his security, unless he abandons it. In bankruptcy an option is given to the trustee Option in to redeem the security for the benefit of the for trustee to general creditors, by paying to the secured ere- gecS ditor the amount of the assessed value of his creditors. security (fO- But the secured creditor may amend Effect of surrGndGr or his valuation at any time before he is redeemed redemption by the trustee (b). And if the creditor surrenders his security, or it is redeemed by the trustee, the property comprised in the security will belong to (2) Jackman v. Mitchell, 13 Ves. 581 ; BaiujUsh v. Tennent, L. E., 2 Q. B. 49 ; Cullmgivorth v. Lloyd, 2 Beav. 385 ; Re Lenzberg, 7 Ch. D. 650; 47 L. J., Ch. 178 ; 24 W. E. 258 ; 38 L. T. 547. (a) See Treatise, ji. 339. {b) Ex parte Norris, Re Sadler, 17 Q. B. D. 728 ; 35 W. E. 1 9. g2 84 PEIVATE ARRANGEMENTS WITH CREDITORS. tliG trustee for the benefit of the general credi- tors (c). And the surrender or redemj^tion of a first mortgage will also enure for the benefit of the general creditors, and not for that of a puisne incumbrancer (c). Effect in In the case of a private composition arrange- composition , • ,i t, i ,1 arrangements mCUt With CrGQltorS WhcrC tllGrC IS nO CeSSlO Jmoriunr'^'" ^onorwu, tlic dcbtor would seem to be entitled for his own benefit to redeem a secured creditor, by paying to him the assessed value of his secu- rity, or, if the security is abandoned, to the pro- perty comprised in it (d), unless there is a second incumbrance, in which case it is conceived that the surrender or redemption would enure to the benefit of the second incumbrancer (c). Effect of In the case of an assignment for the benefit of 8ixrrGiiQ,cr or redemption of Creditors, the trustee will, it is conceived, be assignments entitled for the benefit of the general creditors SecUtors^* ^^ ^^ ^1^7 pi'opcrty comprised in a surrendered secu- rity, and also, if authorized by the provisions of the deed, or the resolution of the creditors, to apply part of the trust estate in redeeming a secm-ed creditor by paying him out of the trust estate the amount of the assessed value of his security (/). And if there is a puisne incum- (c) Crachmll v. Jansnn, 6 Ch. Div. 735 ; 46 L. J., Ch. 652 ; 25 W. E. 984; 37 L. T. 118; Bell v. Sunderland Biiildimj Soc, 24 Ch. D. 618; 55 L. J., Ch. 509 ; 49 L. T. 555. (d) Bolton V. Fcrro, 14 Ch. D. 171 ; 28 W. E. 178; 42 L. T. 629; Coulderyy. Bartrum, 19 Ch. Div. 394; 45 L. T. 689; 51 L. J., Ch. 265 ; 30 W. E. 141 ; Sucletc Gcneralc de Paris V. Geen, 8 App. Cas. 606 ; 32 W. E. 97. (e) Otter v. Lord Vaux, 6 D., M. & G. 638. {f) See Otter v. Lord Vaux, supra ; Bell v. Sunderland Building Soc, sujjra. EFFECT OF, ON SURETIES AND SECURED CREDITORS. 85 brancer, the redemption of the first mortgage by the trustee will, it is conceived, also enure for the benefit of the general creditors (^), but without prejudice to the puisne incumbrancer's right to redeem the trustee (/z). It would seem, however, to be doubtful whether, if the first mortgagee surrendered his security, the surrender would enure for the benefit of the general credi- tors in preference to the puisne incumbrancer (z). Under private arrangements, it is conceived Time for that a creditor will not, in the absence of any vXation of special provision to the contrary, be entitled to ^^°^^*^^^- amend the valuation of his security after receiv- ing a dividend under the deed, but that up to that time he will be entitled to do so (k). (ff) See note (/), supra. {h) Bell V. Sunderland Building Soc, supra. (i) See cases note (/) ; see also and compare Crachiall v. Janson, stipra. {k) See Ex parte Norris, Re Sadler, 17 Q. B, D. 728; 35 W. E. 19. APPENDIX. I.— STATUTES. DEEDS OF AEEANGEMENT ACT, 1887 {a). (50 & 51 Vict. c. 57.) An Act to provide for the Registration of Deeds of Arrange- ment. [IGth September, 1887.] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : 1. This Act may be cited for all purposes as the Deeds short title, of Arrangement Act, 1887. 2. This Act shall not extend to Scotland. Extent of ... Act. 3. This Act shall, except as in this Act specially pro- Commence- vided, come into operation on the first day of January one ment of Act. thousand eight hundred and eighty-eight, which date is in this Act referred to as the commencement of this Act. 4. — (1.) This Act shall apply to every deed of arrange- Application of ment, as defined in this section, made after the commence- ^^^- ment of this Act. (2.) A deed of arrangement to which this Act applies shall include any of the following instruments, whether under seal or not, made by, for, or in respect of the affairs of, a debtor for the benefit of his creditors generally (other- wise than in pursuance of the law for the time being in force relating to bankruptcy), that is to say : — [a) An assignment of property; [h) A deed of or agreement for a composition ; (n) For registration xmder this Act, see ante, Chapter II. 88 DEEDS OF ARRANGEMENT ACT, 1887. Avoidance of unregistered deeds of arransrement. Mode of registration. And in cases where creditors of a debtor obtain any control over his property or business : — {c) A deed of inspectorship entered into for the purpose of carrying on or winding up a business ; {(l) A letter of licence authorising the debtor or any other person to manage, carry on, realise, or dispose of a business, with a view to the payment of debts ; and (o) Any agreement or instrument entered into for the purpose of carrying on or winding up the debtor's business, or authorising the debtor or any other person to manage, carry on, realise, or dispose of the debtor's business, with a view to the payment of his debts. 5. From and after the commencement of this Act a deed of arrangement to which this Act applies shall be void unless the same shall have been registered under this Act within seven clear days after the first execution thereof by the debtor or any creditor, or if it is executed in any place out of England or Ireland respectively, then within seven clear days after the time at which it would, in the ordinary course of post, arrive in England or Ireland respectively, if posted within one Aveek after the execution thereof, and unless the same shall bear such ordinary and ad valorem stamp as is under this Act provided. 6. The registration of a deed of arrangement under this Act shall be effected in the following manner : — (1.) A true copy of the deed, and of every schedule or inventory thereto annexed, or therein referred to, shall be presented to and filed with the registrar within seven clear days after the execution of the said deed (in like manner as a bill of sale given by way of security for the payment of money is now rcquu-ed to be filed), together with an afiidavit verifying the time of execution, and containing a description of the residence and DEEDS OF ARRANGEMENT ACT, 1887. 89 occupation of the debtor, and of the place or places where his business is carried on, and an affidavit by the debtor stating the total estimated amount of property and liabilities included under the deed, the total amount of the composition (if any) payable thereunder, and the names and addresses of his creditors : (2.) No deed shall be registered imder this Act unless the original of such deed, duly stamped with the proper inland revenue duty, and in addition to such duty a stamp denoting a duty computed at the rate of one shilling for every hundred pounds or fraction of a hundred pounds of the sworn value of the property passing, or (where no pro- perty passes under the deed) the amount of com- position payable under the deed, is produced to the registrar at the time of such registration. 7. The registrar shall keep a register wherein shall be Form of entered, as soon as conveniently may be after the presen- ^^^i^ter. tation of a deed for registration, an abstract of the contents of every deed of arrangement registered under this Act ; containing the following and any other prescribed par- ticulars : — (rt) The date of the deed : {b) The name, address, and description of the debtor, and the place or places where his business is carried on, and the title of the firm or firms under which the debtor carries on business, and the name and address of the trustee (if any) under the deed : (c) A short statement of the nature and effect of the deed, and of the composition in the pound payable thereunder : {d) The date of registration : (e) The amount of property and liabilities included under the deed, as estimated by the debtor. 90 DEED8 OF ARRANGEMENT ACT, 1887. Registrar and office for registration. Rectification of register. Time for registration. Office copies. 8. — (1.) The Eegistrar of Bills of Sale in England and Ireland respectively shall be the registrar for the purposes of this Act. (2.) In England the BiUs of Sale Department of the Central Office of the Supreme Court of Judicature, and in Ireland the Bills of Sale Office of the Queen's Bench Division of the High Court of Justice, shall be the office for the registration of deeds of arrangement. 9. The Court or a judge upon being satisfied that the omission to register a deed of arrangement within the time required by this Act or that the omission or mis- statement of the name, residence, or description of any person was accidental or due to inadvertence, or to some cause beyond the control of the debtor and not imputable to any negligence on his part, may on the application of any party interested, and on such terms and conditions as are just and expedient, extend the time for such registra- tion, or order such omission or misstatement to be supplied or rectified by the insertion in the register of the true name, residence, or description. 10. When the time for registering a deed of arrange- ment expires on a Sunday, or other day on which the registration office is closed, the registration shall be valid if made on the next following day on which the office is open. 11. Subject to the provisions of this Act, and to any rules made thereunder, any person shall be entitled to have an office copy of, or extract from, any deed registered under this Act upon paying for the same at the like rate as for office copies of judgments of the High Com-t of Justice, and any copy or extract purporting to be an office copy or extract shall, in all Courts and before all arbitrators or other persons, be admitted as prima facie evidence thereof, and of the fact and date of registration as shown thereon. DEEDS OF ARRANGEMENT ACT, 1887. 91 12. — (1.) Any person shall be entitled, at aU reasonable inspection of times, to search the register on payment of one shilling, or registered such other fee as may be prescribed, and subject to such ^<2eds. regulations as may be prescribed, and shall be entitled, at all reasonable times, to inspect, examine, and make extracts from any registered deed of arrangement, with- out being required to make a written application or to specify any particulars in reference thereto, upon payment of one shilling, or such other fee as may be prescribed, for each deed of arrangement inspected. (2.) Provided that the said extracts shall be limited to the dates of execution and of registration, the names, addresses, and descriptions of the debtor and of the parties to the deed, a short statement of the nature and effect of the deed, and any other prescribed particulars. 13. — (1.) When the place of business or residence of Local regis- the debtor who is one of the parties to a deed of arrange- copy°of°* ment, or who is referred to therein, is situate in some place deeds, outside the London Bankruptcy District, as defined by the Bankruptcy Act, 1883, the registrar shall within three clear days after registration, and in accordance with the prescribed directions, transmit a copy of such deed to the registrar of the county court in the district of which such place of business or residence is situate. (2.) Every copy so transmitted shall be filed, kept, and indexed by the registrar of the county court in the pre- scribed manner, and any person may search, inspect, make extracts from, and obtain copies of, the registered copy, in the like manner and upon the like terms, as to payment or otherwise, as near as may be, as in the case of deeds registered under this Act. (3.) This section shall not apply to Ireland. 14. Every affidavit required by or for the purposes of Affidavits, this Act may be sworn before a master of the Supreme Court of Judicature in England or Ireland, or before any person empowered to take affidavits in the Supreme Courts of Judicature of England or Ireland. 92 DEEDS OF ARRANGEMENT ACT, 1887. Fees. 38 & 39 "Vict. c. 77, 8. 26. Amendment of 46 & 47 Vict. c. 52, 8. 28. Saving as to Bankruptcy Acts. Rules. 15. — (1.) There shall be taken, in respect of the regis- tration of deeds of arrangement, and in respect of any office copies or extracts, or official searches made by the registrar, such fees as may be from time to time prescribed ; and nothing in this Act contained shall make it obligatory on the registrar to do, or permit to bo done, any act in respect of which any fee is specified or prescribed, except on payment of such fee. (2.) The twenty-sixth section of the Supreme Court of Judicature Act, 1875, as regards England, and the eighty- fourth section of the Supreme Court of Judicature Act (Ireland), 1877, as regards Ireland, and any enactments for the time being in force amending or substituted for those sections respectively, shall apply to fees under this Act, and orders under those sections may, if need be, be made in relation to such fees accordingly. 16. — (1.) The third sub-section, paragraph [g) of the twenty- eighth section of the Bankruptcy Act, 1883, which enacts amongst other things that one of the facts on proof of which the Court shall either refuse an order of discharge to a bankrupt, or suspend the operation of the order for a specified time, or grant the bankrupt an order of discharge subject to the conditions mentioned in the section, is that the bankrupt has on any previous occasion made a statutory composition or arrangement with his creditors, shall be read and construed with the word "statutory" omitted thereform. (2.) This section shall not apply to Ireland. 17. Nothing contained in this Act shall be construed to repeal or shall affect any provision of the law for the time being in force in relation to bankruptcy, or shall give validity to any deed or instrument which by law is an act of bankruptcy, or void or voidable. 18. — (1.) Rules for carrying this Act into effect maybe made, revoked, and altered from time to time by the like persons and in the like manner in which rules may be DEEDS OF ARRANGEMENT ACT, 1887. 93 made under and for the purposes of the Supreme Court of Judicature Acts, 1873 to 1884, as regards England, and the Supreme Court of Judicature Act (Ireland), 1877, as 40 & 4i Vict. regards Ireland. (2.) Such rules as may he required for the purposes of this Act may he made at any time after the passing of this Act (/v). 19. In this Act, unless the context otherwise requires, — interpretation " Court or a judge" means the High Court of Justice °* terms. and any judge thereof ; "Creditors generally" includes all creditors who may assent or take the benefit of a deed of arrange- ment ; " Person" includes a body of persons corporate or un- incorporate ; "Prescribed" means prescribed by rules to be made under this Act ; "Property" has the same meaning as the same expression has in the Bankruptcy Act, 1883 ; "Kules" includes forms. {h) For rules, see Aj^peudix III. ( »4 ) Short title. Commence- ment. Application of Act. Interpreta- tion of terms. BILLS OF SALE ACT, 1878. (41 & 42 Vict. c. 31.) (a) An Act to consolidate and amend the Law for preventing Frauds npon Creditors by Secret Bills of Sale of Per- sonal Chattels. [22iid July, 1878.] Whereas it is expedient to consolidate and amend the law relating to bills of sale of personal chattels : Be it enacted by the Queen's most Excellent Majesty, by and -vvith the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : 1. This Act may be cited for all purposes as the Bills of Sale Act, 1878. 2. This Act shall come into operation on the first day of January one thousand eight hundred and seventy-nine, which day is in this Act referred to as the commencement of this Act. 3. This Act shall apply to every bill of sale executed on or after the first day of January one thousand eight hundred and seventy-nine (whether the same be absolute, or subject or not subject to any trust) whereby the holder or grantee has power, either with or without notice, and either immediately or at any future time, to seize or take possession of any personal chattels comprised in or made subject to such bill of sale. 4. In this Act the following words and expressions shall have the meanings in this section assigned to them respec- tively, unless there be something in the subject or context repugnant to such construction ; (tliat is to say,) The expression "bill of sale " shall include bills of sale, (a) For the law as to bills of sale under this Act, see Treatise, Chapter XXV. The provisions of this Act are the same (except as to dates) as those of the Bills of Sale (Ireland) Act, 1879, 42 & 43 Yict. c. 50. BILLS OF SALE ACT, 1878. 95 assignments, transfers, declarations of trust without transfer, inventories of goods with receipt thereto attached, or receipts for purchase moneys of goods, and other assurances of personal chattels, and also powers of attorney, authorities, or licenses to take possession of personal chattels as security for any debt, and also any agreement, whether intended or not to be followed by the execution of any other instrument, by which a right in equity to any personal chattels, or to any charge or security thereon, shall be conferred, but shall not include the following docu- ments ; that is to say, assignments for the benefit of the creditors of the person making or giving the same, marriage settlements, transfers or assignments of any ship or vessel or any share thereof, transfers of goods in the ordinary course of business of any trade or calling, bills of sale of goods in foreign parts or at sea, bills of lading, India warrants, warehouse-keepers certificates, warrants or orders for the delivery of goods, or any other documents used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by indorsement or by delivery, the possessor of such document to transfer or receive goods thereby represented : The expression " personal chattels " shall mean goods, furniture, and other articles capable of complete transfer by delivery, and (when separately assigned or charged) fixtures and growing crops, but shall not include chattel interests in real estate, nor fixtures (except trade machinery as hereinafter defined) , when assigned together with a freehold or leasehold interest in any land or building to which they are affixed, nor growing crops when assigned together with any interest in the land on which they grow, nor shares or interests in the stock, funds, or securities of any government, or in the capital or property of incorpo- 96 BILLS OF SALE ACT, 1878. rated or joint stock companies, nor choses in action, nor any stock or produce upon any farm or lands whicli by virtue of any covenant or agreement or of the custom of the country ought not to be removed from any farm where the same are at the time of making or giving of such bill of sale : Personal chattels shall be deemed to be in the "apparent possession " of the person making or giving a bill of sale, so long as they remain or are in or upon any house, mill, warehouse, building, works, yard, land, or other premises occupied by him, or are used and enjoyed by him in any place whatsoever, notwith- standing that formal possession thereof may have been taken by or given to any other person : " Prescribed " means prescribed by rules made under the provisions of this Act [b). Application 5. From and after the commencement of this Act trade machineiy. machinery shall, for the purposes of this Act, be deemed to be personal chattels, and any mode of disposition of trade machinery by the owner thereof which would be a bill of sale as to any other personal chattels shall be deemed to be a bill of sale within the meaning of this Act. For the purposes of this Act — " Trade machinery " means the machinery used in or attached to any factory or workshop ; 1st. Exclusive of the fixed motive-powers, such as the water-wheels and steam engines, and the steam boilers, donkey engines, and other fixed appurtenances of the said motive- powers ; and, 2nd. Exclusive of the fixed power machinery, such as the shafts, wheels, drums, and their fixed appurtenances, which transmit the action of the motive-powers to the other machinery, fixed and loose ; and, {h) For rules, sec Appendix III. BILLS OF SALE ACT, 1878. 97 3rd. Exclusive of the pipes for steam, gas, and water in the factory or workshop. The machinery or effects excluded by this section from the definition of trade machinery shall not be deemed to be personal chattels within the meaning of this Act. " Factory or workshop " means any premises on which any manual labour is exercised by way of trade, or for purposes of gain, in or incidental to the following purposes or any of them ; that is to say, (a) In or incidental to the making any article or part of an article ; or {b) In or incidental to the altering, repairing, ornamenting, finishing, of any article ; or (c) In or incidental to the adapting for sale any article. 6. Every attornment, instrument, or agreement, not Certain in- being a mining lease, whereby a power of distress is given o^i^^^cfpowers or agreed to be given by any person to any other person of distress to 1 c -J f> J (• J J- 1 be subject to by way oi security tor any present, future, or contingent this Act. debt or advance, and whereby any rent is reserved or made payable as a mode of providing for the payment of interest on such debt or advance, or otherwise for the purpose of such security only, shall be deemed to be a bill of sale, within the meaning of this Act, of any personal chattels which may be seized or taken under such power of distress. Provided, that nothing in this section shall extend to any mortgage of any estate or interest in any land, tene- ment, or hereditament which the mortgagee, being in possession, shall have demised to the mortgagor as his tenant at a fair and reasonable rent (c) . 7. No fixtures or growing crops shall be deemed, under Fixtures or this Act, to be separately assigned or charged by reason f^t To be only that they are assigned by separate words, or that deemed sepa- power is given to sever them from the land or building to signed when (c) For construction of this section, see Treatise, pp. 282, oo6. R. H 98 BILLS OF SALE ACT, 1878. the land passes by the same instru- ment. wliich they are affixed, or from the land on which they grow, without otherwise taking possession of or dealing with such land or building, or land, if by the same instru- ment any freehold or leasehold interest in the land or building to which such fixtures are affixed, or in the land on which such crops grow, is also conveyed or assigned to the same persons or person. The same rule of construction shall be applied to all deeds or instruments, including fixtures or growing crops, executed before the commencement of this Act and then subsisting and in force, in all questions arising under any bankruptcy, liquidation, assignment for the benefit of creditors, or execution of any process of any court, which shall take place or be issued after the commencement of this Act. Avoidance of unregistered bill of sale in certain cases. 8. Every bill of sale to which this Act applies shall be duly attested and shall be registered under this Act, within seven days after the making or giving thereof, and shall set forth the consideration for which such bill of sale was given, otherwise such bill of sale, as against all trustees or assignees of the estate of the j)erson whose chattels, or any of them, are comprised in such bill of sale under the law relating to bankruptcy or liquidation, or under any assignment for the benefit of the creditors of such person, and also as against all sheriffs officers and other persons seizing any chattels comprised in such bill of sale, in the execution of any process of any court authoris- ing the seizure of the chattels of the person by whom or of whose chattels such bill has been made, and also as against every person on whose behalf sucli process shall have been issued, shall be deemed fraudulent and void so far as regards the property in or right to the possession of any chattels comprised in such bill of sale which, at or after the time of filing the petition for banki'uptcy or liquida- tion, or of the execution of such assignment, or of execut- ing such process (as the case may be), and after the expiration of such seven days are in the possession or BILLS OF SALE ACT, 1878. 99 apparent possession of the person making such bill of sale (or of any person against whom the process has issued under or in the execution of which such bill has been made or given, as the case may be) {d). 9. Where a subsequent bill of sale is executed within or Avoidance of ,1 • ; • p 1 j-j. XT 1- £ certain dupli- on the expiration oi seven days aiter the execution oi a p^te bills oi prior unregistered bill of sale, and comprises all or any sale. part of the personal chattels comprised in such prior bill of sale, then, if such subsequent bill of sale is given as a security for the same debt as is secured by the prior bill of sale, or for any part of such debt, it shall, to the extent to which it is a security for the same debt or part thereof, and so far as respects the personal chattels or part thereof comprised in the prior bill, be absolutely void, unless it is proved to the satisfaction of the court having cognizance of the case that the subsequent bill of sale was bona fide given for the purpose of correcting some material error in the prior bill of sale, and not for the purpose of evading this Act. 10. A bill of sale shall be attested and registered under Mode of this Act in the following manner : biSilflafe. (1.) The execution of every bill of sale shall be attested by a solicitor of the Supreme Court, and the attestation shall state that before the execution of the bill of sale the effect thereof has been explained to the grantor by the attesting solicitor : (2.) Such bill, with every schedule or inventory thereto annexed or therein referred to, and also a true copy of such bill and of every such schedule or inventory, and of every attestation of the execution of such bill of sale, together with an affidavit of the time of such bill of sale being made or given, and of its due execution and attestation, and a description of the residence and {(1) This section and sub-section 1 of section 10 do not apply to bills of sale for securing the payment of money, B. 8. Act, 1882, ss. 10, 15. H 2 100 BILLS OF .SALE ACT, 1878. occupatiou of the person making or giving the same (or in case the same is made or given by any person under or in the execution of any process, then a description of the residence and occupation of the person against whom such process issued), and of every attesting witness to such bill of sale, shall bo presented to and the said copy and affidavit shall be filed with the registrar within seven clear days after the making or giving of such bill of sale, in like manner as a warrant of attorney in any personal action given by a trader is now by law required to be filed : (3.) If the bill of sale is made or given subject to any defeasance or condition, or declaration of trust not contained in the body thereof, such de- feasance, condition, or declaration shall be deemed to be part of the bill, and shall be written on the same paper or parchment therewith before the registration, and shall be truly set forth in the coj)y filed under this Act therewith and as part thereof, otherwise the registration shall be void. In case two or more bills of sale are given, comprising in whole or in part any of the same chattels, they shall have priority in the order of the date of their registration respectively as regards such chattels. A transfer or assignment of a registered bill of sale need not be registered. Renewal of 11. The registration of a bill of sale, whether executed registration, j^efore or after the commencement of this Act, must be renewed once at least every five years, and if a period of five years elapses from the registration or renewed regis- tration of a bill of sale without a renewal or further renewal (as the case may bo), the registration shall become void. The renewal of a registration shall be effected by filing BILLS OF saij: A(;t, 1878. 101 with the registrar an affidavit stating the date of the bill of sale and of the last registration thereof, and the names, residences, and occupations of the parties thereto as stated therein, and that the bill of sale is still a subsisting security. Every such affidavit may be in the form set forth in the Schedule (A.) to this Act annexed. A renewal of registration shall not become necessary by reason only of a transfer or assignment of a bill of sale. 12. The registrar shall keep a book (in this Act called Foip of "the register") for the purposes of this Act, and shall, upon the filing of any bill of sale or copy under this Act, enter therein in the form set forth in the second schedule (B.) to this Act annexed, or in any other prescribed form, the name, residence, and occupation of the person by whom the bill was made or given (or in case the same was made or given by any person under or in the execution of process, then the name, residence, and occupation of the person against whom such process was issued, and also the name of the person or persons to whom or in whose favour the bill was given), and the other particulars shown in the said schedule or to be prescribed under this Act, and shall number all such bills registered in each year consecutively, according to the respective dates of their registration. Upon the registration of any affidavit of renewal the like entry shall be made, with the addition of the date and number of the last previous entry relating to the same bill, and the bill of sale or copy originally filed shall be there- upon marked with the number affixed to such affidavit of renewal. The registrar shall also keep an index of the names of the grantors of registered bills of sale with reference to entries in the register of the bills of sale given by each such grantor. Such index shall be arranged in divisions correspond- ing with the letters of the alphabet, so that all grantors 102 BILLS OF SALE ACT, 1878. The repristrar. 3G & 37 Vict. c. 66. 38 & 39 Vict. 0.77. Eectification of register. whose surnames begin with the same letter (and no others) shall he comprised in one division, but the arrangement within each such division need not be strictly alphabetical. 13. The masters of the Supreme Court of Judicature attached to the Queen's Bench Division of the High Court of Justice, or such other officers as may for the time being be assigned for this purpose under the provisions of the Supreme Court of Judicature Acts, 1873 and 1875, shall be the registrar for the purposes of this Act, and any one of the said masters may perform all or any of the duties of the registrar. 14. Any judge of the High Cornet of Justice on being satisfied that the omission to register a bill of sale or an affidavit of renewal thereof within the time prescribed by this Act, or the omission or mis-statement of the name, residence, or occupation of any person, was accidental or due to inadvertence, may in his discretion order such omis- sion or mis-statement to be rectified by the insertion in the register of the true name, residence, or occupation, or by extending the time for such registration on such terms and conditions (if any) as to security, notice by advertisement or otherwise, or as to any other matter, as he thinks fit to direct. 15. Subject to and in accordance with any rules to be made under and for the purposes of this Act, the registrar may order a memorandum of satisfaction to be written upon any registered copy of a bill of sale, upon the pre- scribed evidence being given that the debt (if any) for which such bill of sale was made or given has been satisfied or discharged. Copies may be 16. Any person shall be entitled to have an office copy taken, &c. ^^ extract of any registered bill of sale, and affidavit of execution filed therewith, or coj)y thereof, and of any affi- davit filed therewith, if any, or registered affidavit of Entry of satisfaction. BILLS OF SALE ACT, 1878. 103 renewal, upon paying for the same at the like rate as for oflBce copies of judgments of the High Court of Justice, and any copy of a registered bill of sale, and affidavit pur- porting to be an office copy thereof, shall in all courts and before all arbitrators or other persons, be admitted as prima facie evidence thereof, and of the fact and date of registra- tion as shown thereon. Any person shall be entitled at all reasonable times to search the register and every registered bill of sale, upon payment of one shilling for every copy of a bill of sale inspected ; such payment shall be made by a judicature stamp. 17. Every affidavit required by or for the purposes of Affidavits, this Act may be sworn before a master of any division of of the High Court of Justice or before any commissioner empowered to take affidavits in the Supreme Court of Judi- catiu-e. Whoever wilfully makes or uses any false affidavit for the purposes of this Act shall be deemed guilty of wilful and corrupt per j my. 18. There shall be paid and received in common law Fees. stamps the following fees, viz. : On filing a bill of sale ------ 2s. On filing the affidavit of execution of a bill of sale - 2.s, On the affidavit used for the purpose of re-register- ing a bill of sale (to include the fee for filing) - 5s. 19. Section twenty-six of the Supreme Court of Judica- Collection of tm-e Act, 1875, and any enactments for the time being in s^^^s^g vict force amending or substituted for that section, shall apply c. 77, s. 26. to fees under this Act, and an order under that section may, if need be, be made in relation to such fees accord- ingly. 20. Chattels comprised in a bill of sale which has been Order and and continues to be duly registered under this Act shall not ^^^°^^ ^°^' be deemed to be in the possession, order, or disposition of 104 BILLS OF SALE ACT, 1878. the grantor of the bill of sale within the meaning of the Bankruptcy Act, 1869 {c). 21. Rules for the purposes of this Act may be made and altered from time to time by the like persons and in the like manner in which rules and regulations may be made under and for the purposes of the Supreme Court of Judi- cature Acts, 1873 and 1875. 22. When the time for registering a bill of sale expires on a Sunday, or other day on which the registrar's office is closed, the registration shall be valid if made on the next following day on which the office is open. 23. From and after the commencement of this Act, the Bills of Sale Act, 1854, and the Bills of Sale Act, 1866, shall be repealed : Provided that (except as is herein ex- pressly mentioned with respect to construction and with respect to renewal of registration) nothing in this Act shall affect any bill of sale executed before the commencement of this Act, and as regards bills of sale so executed the Acts hereby repealed shall continue in force. Any renewal after the commencement of this Act of the registration of a bill of sale executed before the commence- ment of this Act, and registered under the Acts hereby repealed, shall be made under this Act in the same manner as the renewal of a registration made under this Act. Extent of Act. 24. This Act shall not extend to Scotland or to Ire- land. (e) Tliis section does not apjsly to bills of sale for securing tlie payment of money, B. S. Act, 1882, s. 1 J. 32 & 33 Vict, c. 7L Rules. 36 & 37 Vict. c. 66. 38 & 39 Vict. c. 77. Time for registration. Repeal of Acts. 17 & 18 Vict, c. 36. 29 & 30 Vict, c. 96. BILLS OF SALE ACT, 1878. 105 SCHEDULES. Schedule A. Section 11. I \^A. B.'] of do swear that a bill of sale, bearing date the day of 18 [_inse7't the date of the hilf\, and made between [insert the names and descrip- tions of the parties in the original bill of sale~\, and which said bni of sale [or, and a copy of w^hich said bill of sale, as the case may he'] was registered on the day of 18 [insert date of rcgistration~\, is still a subsisting secu- rity. Sworn, S^c. Schedule B. Section 12. Satis- faction entered. No. By whom given (or against whom process issued). To whom given. Nature of Instru- ment. Date. Date of registra- tion. Date of registra- tion of Name. Resi- dence. Occupa- tion. affidavit of renewaL ( 106 ) 41 & 42 Vict. c. 31. Short title. Commence- ment of Act. Construction of Act. 41 k 42 Vict, c. 31. BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882. (45 & 4G Vict. c. 43) (a). An Ad to amend the Bills of Sale Act, 1878. [18th August, 1882.] Whereas it is expedient to amend tlie Bills of Sale Act, 1878: Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows : 1. This Act may be cited for all purposes as the Bills of Sale Act (1878) Amendment Act, 1882 ; and this Act and the Bills of Sale Act, 1878, may be cited together as the Bills of Sale Acts, 1878 and 1882. 2. This Act shall come into operation on the first day of November one thousand eight hundred and eighty-two, which date is hereinafter referred to as the commencement of this Act. 3. The Bills of Sale Act, 1878, is hereinafter referred to as " the principal Act," and this Act shall, so far as is consistent with the tenor thereof, be construed as one with the principal Act ; but unless the context otherwise re- quires shall not apply to any bill of sale duly registered before the commencement of this Act so long as the regis- tration thereof is not avoided by non-renewal or otherwise. The expression " bill of sale," and other expressions in this Act, have the same meaning as in the principal Act, except as to bills of sale or other documents mentioned in (a) For the law imder this Act, see Treatise, pp. 528 d seg. The proTisions of this Act are the same, except as to dates, as those in the BiUs of Sale (Ireland) Act, 1883 (46 Vict. c. 7). BILLS OF SALE ACT (l878) AMENDMENT ACT, 1882. 107 section foiu' of the principal Act, which may be given otherwise than by way of security for the payment of money, to which last-mentioned bills of sale and other documents this Act shall not apply. 4. Every bill of sale shall have annexed thereto or Bill of sale to written thereon a schedule containing an inventory of the o^pi-o^^o^^ personal chattels comprised in the bill of sale ; and such attached bill of sale, save as hereinafter mentioned, shall have effect only in respect of the personal chattels specifically described in the said schedule ; and shall be void, except as against the grantor, in respect of any personal chattels not so specifically described. 5. Save as hereinafter mentioned, a bill of sale shall be Bill of sale void, except as against the grantor, in respect of any afte^acquSed personal chattels specifically described in the schedule property. thereto of which the grantor was not the true owner at the time of the execution of the bill of sale. 6. Nothing contained in the foregoing sections of this Exception as Act shall render a bill of sale void in respect of any of the tHno-s. following things ; (that is to say) , (1.) Any growing crops separately assigned or charged where such crops were actually growing at the time when the bill of sale was executed. (2.) Any fixtures separately assigned or charged, and any plant, or trade machinery where such fix- tures, plant, or trade machinery are used in, attached to, or brought upon any land, farm, factory, workshop, shop, house, warehouse, or other place in substitution for any of the like fixtures, plant, or trade machinery specifically described in the schedule to such bill of sale. 7. Personal chattels assigned under a bill of sale shall Bill of sale not be liable to be seized or taken possession of by the ^11^0 6x70?'*'' grantee for any other than the following causes : — in certain (1.) If the grantor shall make default in payment of void. 108 BILLS OF SALE ACT (l878) AMENDMENT ACT, 1882. Bill of sale to be void unless attested and reg-istered. Form of bill of sale. the sum or sums of money thereby secured at the time therein provided for payment, or in the performance of any covenant or agreement con- tained in the bill of sale and necessary for maintaining the security ; (2.) If the grantor shall become a bankrupt, or suffer the said goods or any of them to be distrained for rent, rates, or taxes ; (3.) If the grantor shall fraudulently either remove or suffer the said goods, or any of them, to be removed from the premises ; (4.) If the grantor shall not, without reasonable excuse, upon demand in writing by the grantee, produce to him his last receipts for rent, rates and taxes ; (5.) If execution shall have been levied against the goods of the grantor under any judgment at law: Provided that the grantor may within five days from the seizure or taking possession of any chattels on account of any of the above-mentioned causes, apply to the High Court, or to a judge thereof in chambers, and such court or judge, if satisfied that by payment of money or other- wise the said cause of seizure no longer exists, may restrain the grantee from removing or selling the said chattels, or may make such other order as may seem just. 8. Every bill of sale shall be duly attested, and shall be registered under the principal Act within seven clear days after the execution thereof, or if it is executed in any place out of England then within seven clear days after the time at which it would in the ordinary course of post arrive in England if posted immediately after the execu- tion thereof; and shall truly set forth the consideration for which it was given ; otherwise such bill of sale shall be void in respect of the personal chattels comprised therein. 9. A biU of sale made or given by way of security for the payment of money by the grantor thereof shall be void BILLS OF SALE ACT (l878) AMENDMENT ACT, 1882. 109 unless made in accordance with the form, in the schedule to this Act annexed (,/'). 10. The execution of every bill of sale by the grantor Attestation, shall be attested by one or more credible witness or witnesses, not being a party or parties thereto. So much of section ten of the principal Act as requires that the execution of every bill of sale shall be attested by a soli- citor of the Supreme Court, and that the attestation shall state that before the execution of the bill of sale the effect thereof has been explained to the grantor by the attesting witness, is hereby repealed. 11. Where the affidavit (which under section ten of the Local regis- principal Act is requii-ed to accompany a bill of sale when co'ntents of presented for registration) describes the residence of the bills of sale. person making or giving the same or of the person against whom the process is issued to be in some place outside the London bankruptcy district as defined by the Bankruptcy 32 & 33 Vict. Act, 1869, or where the bill of sale describes the chattels ^' '^^' ^' ^^" enumerated therein as being in some place outside the said London bankruptcy district, the registrar under the principal Act shall forthwith and within three clear days after registration in the principal registry, and in accord- ance with the prescribed directions, transmit an abstract in the prescribed form of the contents of such bill of sale to the county court registrar in whose district such places are situate, and if such places are in the districts of different registrars to each such registrar. Every abstract so transmitted shall be filed, kept, and indexed by the registrar of the county court in the pre- scribed manner, and any person may search, inspect, make extracts from, and obtain copies of the abstract so registered in the like manner and upon the like terms as to payment or otherwise as near as may be as in the case of bills of sale registered by the registrar under the principal Act. (/) For the decisions under this section, see ante, pp. 26, 27 ; Treatise, pp. 557 et seq. 110 BILLS OF SALE ACT (l878) AMENDMENT ACT, 1882. Bill of sale 12. Every bill of sale made or given in consideration of be void ^ ^^y ^^°^ under thirty pounds shall be void. Chattels not to be removed or sold. 13. All personal chattels seized or of which possession is taken after the commencement of this Act, under or by virtue of any bill of sale (whether registered before or after the commencement of this Act), shall remain on the pre- mises where they were so seized or so taken possession of, and shall not be removed or sold until after the expiration of five clear days from the day they were so seized or so taken possession of. Bill of sale 14. A bill of sale to which this Act applies shall be no chattels^^*^*^ protection in respect of personal chattels included in such against poor bill of sale which but for such bill of sale would have been and parochial ^^ t ^ , t , i jfji pj rates. liable to distress under a warrant lor the recovery oi taxes and poor and other parochial rates. Repeal of part of Bills of Sale Act, 1878. Inspection of registered bills of sale. 15. The eighth and the twentieth sections of the prin- cipal Act, and also all other enactments contained in the principal Act which are inconsistent with this Act are repealed, but this repeal shall not affect the validity of anything done or suffered under the principal Act before the commencement of this Act. 16. So much of the sixteenth section of the principal Act as enacts that any person shall be entitled at all reasonable times to search the register and every registered bill of sale uj)on payment of one shilling for every copy of a bill of sale inspected is hereby repealed, and from and after the commencement of this Act any person shall be entitled at all reasonable times to search the register, on payment of a fee of one shilling, or such other fee as may be prescribed, and subject to such regulations as may be prescribed, and shall be entitled at all reasonable times to inspect, examine, and make extracts from any and every registered bill of sale without being required to make a written application, or to specify any particulars in refer- ence thereto, upon payment of one shilling for each bill of BILLS OF SALE ACT (l878) AMENDMENT ACT, 1882. HI sale insj)ected, and such payment shall he made hy a judi- cature stamp : Provided that the said extracts shall he Hmited to the dates of execution, registration, renewal of registration, and satisfaction, to the names, addresses, and occupations of the parties, to the amount of the considera- tion, and to any further prescribed particulars. 17. Nothing in this Act shall apply to any debentures Debentures to J 1 . ^ i^i • L 1 "which Act not issued by any mortgage, loan, or other incorporated com- to apply, pany, and secured upon the capital stock or goods, chattels, and effects of such company. 18. This Act shall not extend to Scotland or Ireland. Extent of Act. SCHEDULE. Form of Bill of Sale. This indenture made the day of , between A. £. of of the one part, and C. D. of of the other part, witnesseth that, in consideration of the sum of £ now paid to A. B. by C. B., the receipt of which the said A. B. hereby acknowledges [or whatever else the consideration may he\ he the said A. B. doth hereby assign unto C. D., his executors, administrators, and assigns, all and singular the several chattels and things specifically described in the schedule hereto annexed by way of security for the payment of the sum of £ , and interest thereon at the rate of per cent, per annum [or whatever else may he the rate']. And the said A. B. doth further agree and declare that he will duly pay to the said C. D. the principal sum aforesaid, together with the interest then due, by equal payments of £ on the day of [or whatever else may he the stipulated times or time of payment]. And the said A. B. doth also agree with the said C. D. that he will [here insert terms as 112 BILLS OF SALE ACT (l878) AMENDMENT ACT, 1882. to insurance, payment of rent or otherwise, which the parties may agree to for the maintenance or defeasance of the security^ . Provided always, that the chattels hereby assigned shall not be liable to seizure or to be taken possession of by the said C. D. for any cause other than those specified in section seven of the Bills of Sale Act (1878) Amendment Act, 1882. In witness, ^c. Signed and sealed by the said ^. -B. in the presence of me, H. F. [add witness^ name, address, and description']. ( 113 ) BANKEUPTCY (DISCHAEGE AND CLOSUEE) ACT, 1887. (50 & 51 YicT. c. 66.) An Act to amend the Lmv relating to the discharge of Bank- rupts and the closure of BanTxruptcy proceedings. [16th September, 1887.] Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal and Commons, in this present Parliament assembled, and by the authority of the same, as follows : 1. — (1.) This Act may be cited as the Bankruptcy short title (Discharge and Closure) Act, 1887. 7^^''''^^^'" (2.) Expressions used in this Act shall, unless a contrary intention appears, have the same meaning as in the Bank- ruptcy Act, 1883. 2. — (1.) A debtor who has been adjudged bankrupt, or Proceedings whose affairs have been liquidated by arrangement under of^anki-upf^ the Bankruptcy Act, 1869, or any previous Bankruptcy under re- Act, and who has not obtained his discharge, may apply ruptcy Acts. to the Court for an order of discharge, and thereupon the 32 & 33 Vict. Court shall appoint a day for hearing the application in ^' ' open Court. (2.) Notice of the appointment by the Court of the day for hearing the application for discharge shall twenty- one days at least before the day so appointed be sent by tlie debtor to each creditor who has proved in the bankruptcy or liquidation, or to those of them whose addresses appear in the debtor's statement of affairs or are known to the R. I 114 BANKRUPTCY (DISCHARGE AND CLOSURE) ACT, 1887. debtor, unci shall also, fourteen days at least before the day so appointed, be published in the London Grazette. (3.) On the hearing of the application the Court may hear any creditor, and may put such questions to the debtor and receive such evidence as the Court thinks fit, and, on being satisfied that the notice required by this section has been duly sent and published, may either grant or refuse the order of discharge or suspend the operation of the order for a specified time, or grant the order of discharge subject to any conditions with respect to any earnings or income which may afterwards become due to the debtor, or with respect to his after-acquired property {a) : Provided that the Court shall refuse the dis- charge in all cases where the Coui't is satisfied by evidence that the debtor has committed any misdemeanor under 32 & 33 Vict. Part Two of the Debtors Act, 1869, or any amendment thereof (/>). (4.) The Court may, as one of the conditions referred to in this section, require the debtor to consent to judg- ment being entered against him in the Court having jurisdiction in the bankruptcy or liquidation by the official receiver of the Court, or the trustee or assignee in the bankruptcy or liquidation, for any balance of the debts provable under the bankruptcy or liquidation which is not satisfied at the date of the discharge, or for such sum as the Court shall think fit, but in such case execution shall not be issued on the judgment without the leave of the Court, which leave may be given on proof that the debtor has since his discharge acquired property or income avail- able for payment of his debts (r). (5.) A discharge granted under this section shall have (a) As to grounds for refusing, suspending, or granting, subject to conditions, an order of discharge under B. A. 1883, see Treatise, j)Yi. (i64 et seq. (b) For these misdemeanors, see Treatise, pp. 676 et seq. (c) As to requiring bankrupt to consent to a judgment being entered up against him under B. A. 188,3, see Treatise, pp. 665, 670. BANKRUPTCY (dISCHAEGE AND CLOSURE) ACT, 1887. 115 the same effect as if it liacl Leon granted in pursuance of the Act under which the debtor was adjudged bankrupt or liquidated his affairs by arrangement. 3. — (1.) Every bankruptcy under the Bankruptcy Act, Proceedings 1869, which is pending on the thirty-first day of Decem- bankruptcies ber, one thousand eischt hundred and eighty-seven shall, under Bank- o ./ ' ruptcy Act by virtue of this Act, be closed on that day unless the i869. Court otherwise orders. (2.) Subject to the provisions of this section, the Court may, on the application of the trustee under any such bankrujDtcy, and on being satisfied that there are special circumstances rendering it expedient to postpone the close of the bankruptcy, make an order postj)oning the close of the bankruptcy until such date as the Court may from time to time determine. (3.) The order may be made either before or after the said day, but an application under this section shall not be entertained unless made before the said day. (4.) The trustee shall, before making an application under this section, give notice to the Board of Trade of his intention to do so, and shall supply the Board with such information as the Board may require as to the position of the bankruptcy, and the Com-t before making an order under tliis section shall consider any representation which may be made by or on behalf of the Board of Trade with respect thereto. 4. — (1.) In each of the following cases, that is to say : in bankrupt- (a.) Any insolvency under any Act for the relief of cics,_insol- insolvent debtors ; arrangements (b.) Any commission, fiat, or adjudication in bank- p^^^^ ^^ ^ggg ruptcy within the jurisdiction of the old i^i t^.c London London Bankruptcy Com-t, under any Act official as- prior to the Bankruptcy Act, 1869 ; t^^Z^' (c.) Any administration by way of arrangement pur- supersede suant to an Act of the session held in the assi-'-nuel'' i2 ilG BANKRUrXCY (DISCHARGE AND CLOSURE) ACT, 1887. seventh and eighth years of the reign of Her Majesty, chapter seventy, entitled " An Act for facilitating arrangements between Debtors and Creditors," or pirrsuant to the provisions of the Bankrupt Law Consolidation Act, 1849, or the hundred and ninety-second section of the Banki'uptcy Act, 18G1, within the juris- diction of the old London Bankruptcy Court, in which the estate is now vested in a creditor's assignee, or trustee, or inspector, either alone or jointly with the official assignee, the court may at any time after the passing of this Act, upon the application of any creditor, and upon being satisfied that there is good ground for removing such creditor's assignee, trustee or inspector, or in any other case in which it shall appear to the court just or expedient, appoint the official assignee, or any person appointed under the one hundred and fifty-third section of 46 & 47 Vict, the Bankruptcy Act, 1883, to perform the remaining duties of the office of official assignee, to be sole assignee, or trustee, or inspector of the estate in the place of such creditor's assignee, trustee, or inspector, as the case may be. (2.) Such appointment shall operate as a removal of the creditor's assignee, trustee, or inspector of the estate, and shall vest the whole of the property of the bankrupt or debtor in the official assignee or person appointed by the Board of Trade as aforesaid alone ; and all estate, rights, powers, and duties of such former creditor's assignee, trustee, or inspector shall thereupon vest in and devolve upon the official assignee or person appointed by the Board of Trade as aforesaid alone. Provision to 5. An application by a trustee in a bankruptcy under trittee ^^® Bankruptcy Act, 1869, to the comptroller in bank- ruptcy for a report on his accounts with a view to his release shall not be entertained unless made within twelve months after the close of the bankruptcy. BANKRUPTCY (DISCHARGE AND CLOSUKE) ACT, 18(S7. 117 6. — (1.) "Where on the close of a bankruptcy or liqui- Effect of dation, or on the release of a trustee, a registrar or official receiver or official assignee is or is acting as trustee, and where under section one hundi-ed and fifty-nine, section one hundred and sixty, or section one hundred and sixty- one of the Bankruptcy Act, 1883, an official receiver is or is acting as trustee, no liability shall attach to him person- ally in respect of any act done or default made or liability incurred by any prior trustee. (2.) Section eighty-two of the Bankruptcy Act, 1883 (which section relates to the release of a trustee), shall, with the exception of sub-section four thereof, apply to an official receiver or official assignee when he is or is acting as trustee, and when an official receiver or official assignee has been released under that section he shall continue to act as trustee for any subsequent purposes of the adminis- tration of the debtor's estate, but no liability shall attach to him personally by reason of his so continuing in respect of any act done, default made, or liability incurred before his release [d). 7, All books and papers in the custody of an official Disposal of receiver or official assignee, or of the Acting Comptroller papcrT ^ ^^ in Bankruptcy, and relating to any bankruptcy under the Bankruptcy Act, 1869, may, on the expiration of one year after the close of the bankruptcy, be disposed of in accord- ance with rules made under section one of the Public 40 & 41 Vict. Records Office Act, 1877, and that section shall apply °' ' accordingly, 8. — (1.) Greneral rules for carrying into effect the objects Power to of this Act may from time to time be made, revoked, or aJJjf p^cribe altered by the same authority and subject to the same pro- fees, visions as general rules for carrying into effect the objects of the Bankruptcy Act, 1883 (e). (cZ) As to release of a trustee, see Treatise, p. 638. (<') For rules, see Appendix III. 118 BANICEUPTCY (DISCHARGE AND CLOSURE) ACT, 1887. (2.) There shall be paid in respect of proceedings under this Act such fees as the Lord Chancellor may, with the sanction of the Treasury, from time to time prescribe, and the Treasur}^ may direct by whom and in what manner the same are to be collected and accounted for, and to what account they are to be paid. ( 119 ) IL— PRECEDENTS OF DEEDS OF ARRANGEMENT. 1. COMPOSITION PAYABLE BY INSTALMENTS — Last in- stalment guaranteed hy a surety — Covenant by creditors not to sue — Revival of remedies of creditors if composi- tion not paid — Provisions as to sureties and securities — Arbitration clause — Assignment of book debts to in- demnify surety (a). THIS INDENTURE made the day of between Parties. A.B.oi (hereinafter called " the debtor"), of the first part, C. D. of (surety), of the second part, and the several persons, companies, and jDartnership firms whose names and seals are set and affixed in the first schedule hereto (being respectively creditors of the debtor), and all other (if any) the creditors of the debtor at the date of these presents who shall in writing or otherwise before the day of (b) assent thereto (all of whom are hereinafter referred to as "the said creditors"), of the third part. Whereas the debtor being indebted to the said credi- Recitals, tors respectively in divers sums of money has offered (c;) to pay to them respectively a composition of in the pound on the amount of their said debts, in full satisfaction and discharge thereof by two equal instalments (a) This deed must be registered under B. A. 1887. See ante, p. 24. (&) The day appointed for the payment of the first instalment of the composition. As to the necessity for creditors to assent within the stipulated time, see ante, p. 37. As to what will constitute assent, see ante, p. 36. (c) As to whether the offer of a composition by the debtor, or the acceptance thereof by the creditors, will constitute an act of bank- ruptcy, see ante, p. 44. 120 COMPOSITION GUARANTEED BY SURETY. Covenant by the debtor. Covenant and guarantee by surety. rroviso that surety shall not be released Ijy creditors fjriving time to debtor. of each on the day of and the day of the pajonent of the last of such instalments to bo guaranteed by the said C. Z),, who has agreed to join in these presents in manner hereinafter expressed, upon having such indemnity as hereinafter contained. And avhereas the said creditors have agreed to accept the said offer and to enter into such covenants as hereinafter on their part con- tained. NOW THIS INDENTURE WITNESSETH, that in pursuance of the said agreement, and in consideration of the premises, and of the covenants hereinafter contained on the part of the said creditors, the debtor hereby cove- nants {(I) with the said creditors respectively that he the debtor will pay unto the said creditors respectively a com- position of in the pound upon the amount of the debts now owing from him to the said creditors respec- tively {<) by tw^o equal instalments of each on the days following, that is to say, the day of and the day of , in full satisfaction and discharge thereof. AND THIS INDENTURE ALSO WITNESSETH, that in further pursuance of the said agreement, and for the con- siderations aforesaid, the said C. D. hereby covenants with the said creditors respectively that the debtor will duly perform, and he the said C. D. hereby guarantees the perfor- mance by the debtor of the covenant hereinbefore contained on his part, so far as relates to the second or final instalment of the said composition (./'). Provided always, and it is HEREBY AGREED AND DECLARED, that although aS betwCCn the debtor and the said C. 1). respectively, the said C. D. is only a surety for the debtor as to the second instalment of the said composition, yet as between the said C. 1). on the one hand, and the said creditors on the other hand, he the said {d) As to tlie right of creditors who accept the composition to sue the debtor on his covenant, see ante, p. 36. (c) As to the necessity for creditors to disclose the whole of their demands, see ante, p. 73. (/) As to the respective rights of the creditors and the surety, in case of the debtor's default to pay the first iustahnent, or of a receiving order being made against him, see ante, p. 81. COMPOSITION GUARANTEED BY SUEETY. 121 C. D. is to be considered as a principal debtor for such instalment, so that the said C. J)., his heirs, executors, or administrators, shall not be released or exonerated by time being given to the debtor, his heirs, executors, or adminis- trators, or by any other dealing between the said creditors or any of them, their or any of their executors or adminis- trators, and the debtor, his heirs, executors, or adminis- trators, or by any act or omission of the said creditors, or any of them, their or any of tlieir executors, administrators, or assigns, or by any matter or thing whatsoever, whereby the said C. JD., his heirs, executors, or administrators would, but for this provision, be so released or exonerated (//). AND THIS INDENTURE ALSO WITNESSETH, Conditional that in further pursuance of the said agreement, and in creditor not^ to consideration of the premises, the said creditors hereby re- sue debtor, spectively covenant with the debtor that if the said several instalments of the said composition shall be duly paid at the respective times hereinbefore appointed for the payment thereof {//), they, the said creditors respectively, will not sue, attach, impede, or molest in any manner whatsoever the debtor or his estate for or on account of the debts now owing to them respectively by the debtor ; and that these Provision that presents may be pleaded in bar, or otherwise set up as a beVleaded^m defence to any action or other proceeding which shall be bar to action brought, taken, or prosecuted by or on behalf of the said covenant not creditors or any of them in breach of this covenant (g) . *° ^"®- And, further, that upon due payment of the said composi- Provision that tion in manner aforesaid, these presents shall operate as an conmosition ° absolute release of the debtor from the said debts of the the deed shall said creditors respectively, and from all claims and demands absolute re- in respect thereof, and may be pleaded in bar or otherwise ^^^^^ °^ *^^ {g) As to the effect of a creditor giving time to the debtor or otherwise prejudicing the surety, see ante, p. 78. As to the effect of a covenant not to sue for a limited period, and of a per- petual covenant not to sue, and of a jiroviso that the deed shall be pleadable in bar to an action in breach of a covenant not to sue for a limited period, see ante, p. 75. As to the effect of a covenant not to sue by partners, see ante, p. 71. (/i) Or, " unless and until default shall be made in payment of the said instalments, or of some part thereof respectively." 122 COMPOSITION GUARANTEED BY SURETY. set up as a defence to any action or other proceeding whicli shall be brought, taken, or prosecuted against the debtor or his estate on account of the said debts respectively. rrovisiou for PROVIDED ALAVAYS, AND IT IS HEREBY AGREED AND DECLARED, oriffinal'reme- ^^^^ ^^ ^^6 ^^i^ composition, or any part thereof, shall not dies of ere- }yQ ^^\y paid to any creditor, such creditor shall thereupon composition is bccome and be entitled to sue the debtor, or if a receiving not duly paid. Qj.(jgp ]jq made against him to prove thereunder, for the full amount of the original debt or debts now owing to such creditor less the amount of what, if anything, may have been received by such creditor in respect thereof under these pre- Withoutpro- sents or otherwise (A), and without prejudice to the rights judiceto right £ -^ creditor ag-ainst the said C. D. under his covenant against surety o ^ under his and guarantee hereinbefore contained (/). Provided eruarantee. _ ALSO, AND TT IS HEREBY FURTHER AGREED AND DECLARED, Reservation of • t iv i L^ • ^ l rights of ere- that these presents shall not prejuchce or aitect the rights th*"r ^^.|™^* or remedies of any creditor against any surety or sureties, or any person or persons other than the debtor, his heirs, Reservation of executors or administrators {j), nor shall these presents in rights of any^'ise prejudice or affect any security by way of mort- ditors. g^^^^ charge, pledge, or lien which any creditor may have or claim for his debt or debts {j) ; but if such security shall be enforceable against the debtor or his estate, then and in that case such creditor (unless he shall consent to abandon his security) shall be entitled to receive the said composition upon so much only of his said secured debt or debts as may remain after such security shall have been realized, or after credit shall have been given for the full value thereof, such value to be agreed upon between such creditor, his executors or administrators, and the debtor, his executors or administrators, or in case of dispute to be (7i) As to tlie necessity for a provision of this sort to prevent the operation of the Statute of Limitations, see ante, p. G9. (i ) As to the relative rights of creditors and the surety, in the event of bankruptcy proceedings against the debtor, see ante, p. 81. (,/) As to the reservation of the rights of creditors against third parties, and to the benefit of their securities, see ante, p. 79. As to the right of sureties to stand in place of creditors on payment by them, see ante, p. 80. Tor clause to that effect, see post, p. 143. COMPOSITION GUARANTEED BY SURETY. 123 ascertained by two impartial valuers, one to be chosen by such creditor, his executors or administrators, and the other by the debtor, his executors or administrators, or by an umpire to be named by such valuers before proceeding to the valuation {k) . AND THIS INDENTURE FUETHER WIT- Assignment of NESSETH, that in pursuance of the aforesaid agree- way of in- ment in this behalf, and in consideration of the said ^iemnity to ' surety. C. D. having guaranteed the payment of the second or final instalment of the said composition in manner aforesaid, the debtor as beneficial owner, and with the privity and consent of the said creditors, hereby assigns unto the said C. D. all and singular the debts or sums of money now due and owing to the debtor, the particidars whereof are specified in the second schedule hereto (/), and all securities for the same, together with full power to demand, sue for, and give effectual receipts and discharges for the same in the name or names of the debtor his executors or administrators, or otherwise {m) ; To hold the premises expressed to be hereby assigned unto the said C. B., his executors, administrators and assigns, upon trust Application to receive and get in the same as soon as conveniently may ^e received ° be, and out of the moneys which shall be received in from book respect thereof to pay, in the first place, the costs, charges, and expenses of and incidental to the receipt and recovery thereof, and subject thereto to apply the same in repaying to the said C. B., his executors or administrators, all moneys which shall be paid by him or them pursuant to the covenant and guarantee by the said C. D. hereinbefore contained, and in indemnifying him and his estate there- from, and from and against all costs, expenses, claims, and (7^) For fuller arbitration clause, see post, p. 142. [l) Or " all book debts now or wbicli shall, or may, at any time hereafter become due and owing to the debtor in his said trade or business of ." As to the necessity of specifically describing the debts assigned, see ante, p. 41, note {(j). (m) As to assignments of choses in action, not being by way of charge, see Judicature Act, 1873, s. 25, sub-s. (J. In this case it is proper to add a power of attorney. 124 COMrOSITION GUARANTEED BY SURETY. demands whatsoever for or by reason of the said C. D. having given such guarantee as aforesaid (with full power for him, his executors or administrators, at his or their discretion, to apply the said moneys, or any part thereof, in or towards payment of the said composition or any instalment thereof); and to pay the surplus, if any, of the said moneys, after answering the several purposes aforesaid, unto the debtor, his executors, administrators or assigns {n). In witness, &c. 1st Schedule. [^Creditors.l 2nd Schedule. \_Book debts assicjned as indcmniti/ to the Suretij.~\ 2. COMPOSITION PAYABLE BY INSTALMENTS — Last in- stalment guaranteed by surety and secured by joint and several promissory notes of debtor and surety — Condi- tional release by creditors, S^c, 8^c. — Assignment of book debts to surety by way of indemnity. Parties. THIS INDENTUEE made the day of between A. B. of (hereinafter called "the debtor"), of the first part, C. D. of (surety) , of the second part, and the several persons, companies, and partnership firms whose names and seals are set and afiixed in the first schedule hereto, and all other (if any) the creditors of the debtor at the date of these presents who shaU in writing or otherwise before the day of assent thereto (all of whom are herein- (») As to invalidity of an assignment of personal chattels by way of indemnity to the surety, see ante, jjp. 40, 41. COMPOSITION GUAEANTEED BY SURETY, ETC. 125 after referred to as " the said creditors") , of the third part (o) . Whereas the debtor is indebted to the said creditors in Recitals. divers sums of money, and he has offered to pay to them respectively a composition of in the pound on the amount of their said respective debts, in full satis- faction and discharge thereof, by two equal instalments of each on the day of , and the day of , the second or last of such instalments to be guaranteed by the said C. D. and further secured by the joint and several promissory notes of the debtor and the said C. B., who has agreed to join in these presents in manner hereinafter expressed, upon having such indemnity as hereinafter con- tained. And whereas the said creditors have agreed to accept the said offer and to execute such release as herein- after contained. NOW THIS INDENTURE WIT- NESSETH, that in pursviance of the said arrangement, and in consideration of the release hereinafter contained, the debtor hereby covenants, &c. \_Covcnant by debtor to Covenant by 2mtj the compositioji, see Precedent I.]. AND THIS IN- composition'^ DENTUEE ALSO WITNESSETH, that in further pursuance of the said arrangement, and for the conside- Covenant and ration aforesaid, the said 0. D. \_Covenant and guarantee fi^ety^ *^° ^ by C. D. for pay)nent of last instalment of composition, see Precedent I.]. AND THIS INDENTURE ALSO WITNESSETH, that in further pursuance of the said arrangement, and for the consideration aforesaid, the Covenant by debtor and the said C. D. do hereby respectively cove- surety to nant with the said creditors respectively that they, the deliver pro- . p . 1 1 missory notes debtor and the said C. J)., will forthwith, after the to creditors execution of these presents by the said creditors respec- gtaLment^" tively, or after notice in writing given by them respectively to the debtor of their respective assents thereto, join in making and delivering to the said creditors respectively the joint and several promissory notes of them, the debtor and the said C. D., for the amount of the second or last (o) See Precedent 1 , and notes thereto. 126 COMPOSITION GUARANTEED BY SURETY, ETC. instalment of the said composition, such notes to be made payable at the order of the said creditors respectively, on the day on which such instalment is hereby appointed to be paid, at the bank of Messrs. Bankers, London. Conditional AND THIS INDENTURE FUETHEE WITNES- crcditor./ SETH, that in further pursuance of the said arrange- ment, and in consideration of the premises, the said creditors respectively do hereby, but subject to and con- ditionally upon the due payment of the said composition in manner hereinbefore mentioned, release the debtor, his heirs, executors, administrators, estate and effects from all debts and sums of money now due and owing from the debtor to the said creditors respectively, and from all actions, suits, claims and demands whatsoever in respect thereof {j)). [^Provisions for revival of creditors^ remedies if comjjosition not paid, Reservation of rights against sureties and of securities, Arbitration clause, Assignment of hook debts to indemnify surety, see Precedent I.] In witness, &c. 1st Schedule. \_Creditors.~\ 2nd Schedule. \_Book debts assigned to indemnify Surety.^ (p) As to the eifect of an absolute and conditional release re- spectively on the remetlies of creditors, see ante, pp. 70, 71. A release subject to a defeasance amounts to a covenant not to sue, and may bo pleaded as a defence before the happening of the event contemplated. See ante, p. 68, n. (^>). COMPOSITION GUARANTEED BY SURETY AND ASSIGNMENT, 127 3. (a) COMPOSITION PAYABLE BY INSTALMENTS Guaranteed by sureti/ and assignment of dehto/s stock-in- trade, book debts, 8fc., to surety — Release by creditors, 8fe. THIS INDENTURE made the day of be- Parties. TWEEN^.^.of (hereinafter called "the debtor"), of the first part, C. D. of (surety), of the second part, and the several persons, companies, and partnership firms whose names and seals are set and affixed in the schedule hereto, and all other (if any) the creditors of the debtor at the date of these presents, who shall assent thereto in writing or otherwise (all of whom are hereinafter referred to as " the said creditors"), of the third part (6), Whereas the Recitals, debtor being indebted to the said creditors respectively in divers sums of money has offered to pay to them respec- tively a composition of in the pound on the amount of their respective debts, in full satisfaction and discharge thereof by two equal instalments on the day of , and the day of , the payment thereof to be secured by the guarantee of the said C. D., who has agreed to join in these presents in manner hereinafter mentioned, and by such assignment to the said C. D. as hereinafter contained. And "WHEREAS the said creditors have agreed to accept the said offer, and to execute such release as hereinafter contained. NOW THIS INDENTURE WITNESSETH, that in Covenant by p,T • -, , 1 • •ni- p debtor to pay pursuance oi the said arrangement, and m consideration oi composition, the premises, and of the release by the said creditors herein- after contained, the debtor liereby covenants with the said creditors respectively that he, the debtor, will pay unto the said creditors a composition of in the pound on the amount of the debts now owing from him to the said (a) This deed must be registered under D. A. A. 1887, but not under B. S. A. See a?; • J 1, T_* i. allow debtor on the business oi , now carried on by him at . ^^ ^,^^^ q^ And to deal with and dispose of the property expressed to liis business, be hereby conveyed and assigned for the purposes of the said inspection of business, or in such other manner for the purposes of these trustees, presents as the trustees or trustee shall think proper, but subject to the control and under the inspection and super- intendence of the trustees or trustee. And the debtor Covenants by .,1 ,1 , , , , /• 1 debtor as to HEREBY COVENANTS With the trUStcCS Or trustee respectively, management that he the debtor will, to the best of his skill and ability, thereof. forthwith carry on or wind-up his said business under the superintendence and according to the directions of the trustees or trustee, and will use his best endeavours, subject to the provisions of these presents and in accordance with the directions of the trustees or trustee, to obtain possession of and realize, or otherwise deal with all the pro^^erty and effects belonging to him, and the income thereof, including any leaseholds excepted from these presents, and the in- come thereof ; And will draw, accept, and indorse all As to draw- such bills, cheques, and promissory notes, as shall be re- ^^^l indorsim' quired by the trustees or trustee ; And will, when required bills, &c. by the trustees or trustee, make out and fairly state in "^^ ™''^^^ °"* ■^ ^ , ' . "^ , a correct writing a true and exact account of all and singular his statement of debts and credits, estate, property, and effects, and of the "^ ^ '"^''' several charges, outgoings, liens, and incumbrances upon or affecting the same respectively, and will deliver the and deliver same or a fair copy thereof to the trustees or trustee; tni^ees (c) As to exception of leaseholds, see ante, pj). oo, 56. k2 132 DEED OF INSPECTION AND ASSIGNMENT. To deposit, when required, moneys, &c. in a bank. To keep proper books of account. To preserve letters, &:c. To aUow trustees access thereto and report to them as required. To refer to trustees upon questions of doubt, &c. Not to enter into other business with- out consent of trustees. Application of deposited moneys. And will, if and when so required by the trustees or trustee, deposit in the Bank of , or such other bank and to such account as the trustees or trustee shall direct, all or any of the moneys, cheques, bills, promissory notes, or securities, or the proceeds thereof, which the debtor shall receive in the course of his said business or dealings with the trust estate ; And that he the debtor will keep proper books of account containing proper entries of all his receipts and disbursements, and other things necessary or convenient for showing the true state and condition of the said business and trust estate ; And will preserve all letters received, and copies of all letters written by him, and other documents relating to the said business and trust estate, and will allow the trustees or trustee, or any accountant or other persons or person appointed by them or him, free access to the several books of account, letters, copies of letters and documents aforesaid ; and will, when required by the trustees or trustee, report to them or him the true state and condition of the said business and trust estate, and all his proceedings relating thereto; And will, upon all matters and questions involving doubt, or requiring the exercise of discretion, apply to and act upon the advice of the trustees or trustee, and will attend to and act upon the directions or suggestions of the trustees or trustee in relation to the premises ; and that he, the debtor, will not, during the continuance of this arrangement, without the consent of the trustees or trustee in writing, enter into any other business. And it is iiekeby agreed and declared, that any moneys or securities which shall, upon the requirement of the trustees or trustee, be paid into or deposited in such bank as aforesaid, and shall not after- wards be withdrawn or used (with the consent of the trustees or trustee) for the purpose of carrying on the said business, shall from time to time be applicable and applied, first, in or towards payment of the costs, charges, and expenses of and incidental to the preparation and execu- tion of these presents, and obtaining the signatures and DEED OF INSPECTION AND ASSIGNMENT. 133 assents of the said creditors thereto, and carrying the same into effect, and subject thereto in or towards pay- ment of the respective instalments of the said composition, and the sm'plus (if any) shall be dealt with as part of the estate of the debtor. Provided always, and it is Power for HEREBY AGREED AND DECLARED, that it shall be lawful for expenses of^^ the debtor, out of any moneys which shall come into his himself and . . trustees hands under these presents, to retain and reimburse to him- self, and to allow to the trustees or trustee, all costs and expenses which he or they shall respectively reasonably incur in or about the execution of the powers and provisions of these presents ; And also, that, subject to the provisions ^^^^^ ''®*^^" herein contained, the debtor may, so long as he shall aiiowcance f or observe and perform the covenants and agreements on his maintenance, part herein contained, retain out of his said business or estate the sum of £ per week for the maintenance of himself and his family; And also, that the debtor, out of the moneys and pay rents, which he shall from time to time receive in respect of his taxes', said business and estate, may pay all rents, rates and taxes, payable in respect thereof, and of any leasehold premises excepted from these presents, and all salaries, allowances, and salaries, and wages to clerks and others employed by him in his said |^j^j others. business, and the expenses incmTed by him in respect thereof, and in managing and disposing of the trust estate in pursuance of these presents. Provided always, and Provision for ,1 , •(. ,1 •1 re-transfer of IT IS HEREBY AGREED AND DECLARED, tliat 11 tne SaiO. property to instalments of the said composition shall be duly paid or debtor, provided for to the satisfaction of the trustees or trustee, and the debtor shall discharge and fully indemnify the trustees or trustee from all charges, expenses, and liabilities incurred by them or him in the execution of the trusts and powers of these presents, then in such case the trustees or trustee shall re-transfer the trust estate, or so much thereof as shall remain undisposed-of under the trusts and powers of these presents, unto the debtor or as he shall direct ; and upon such re-transfer the property so re-transferred shall thenceforth be discharged and released from all the trusts 134 DEED OF INSPECTION AND ASSIGNMENT. of these presents, and fi'om all claims by any of the said creditors, and the trustees or trustee shall be discharged from all further trusts in respect of any property so re- Powcr for transferred, and from all liability in respect thereof. Pro- trustees in certain VIDED ALWAYS, AND IT IS HEREBY FURTHER AGREED AND events to -wLqcI ^eclared, that if the said instalments of the said compo- up business, •ii &c. sition, or either oi them, shall not be duly paid, or provided for to the satisfaction of the trustees or trustee, or if it shall appear to the trustees or trustee from the state or position of the said business or trust estate, that the said instal- ments of the said composition, or either of them, will not be duly met or provided for, then and in either of the said cases the trustees or trustee shall, with all convenient speed, take possession of and wind up the said business and trust estate, and get in, collect, and realize the same, by sale or otherwise, in such manner in all respects as the trustees or trustee and (ii%'icle net shall in their or his discretion think fit; and pay and divide amongst ^^® ^®^ moucys to arise therefrom, after payment of all creditors. costs and expenses payable under these presents which shall then remain unpaid (including any debts incurred in carrying on or winding-up the said business, or otherwise in relation thereto, or to the trust estate), unto and amongst all the said creditors rateably in proportion to the amount of their respective debts, in or towards payment thereof. Surplus (if in the same manner as in bankruptcy. And if there shall debtor? ^ °^ ^^ any surplus of the said moneys, after payment of the said creditors in full, the same shall be in trust for the Power for debtor. And it is hereby agreed and declared, that employ ° it shall be lawful for the trustees or trustee to employ any persons to person or persons to assist in winding-up the said business, winding- up. and realizing the said estate, or otherwise in effectuating the purposes aforesaid, and to pay to the person or persons so employed out of the trust estate such salary, wages, or remuneration for the services rendered, as the trustees or Appointment trustee shall think reasonable. And the dei5tor hereby debtor'l^^^ ^^ APPOINTS the trustccs or trustee to be his attorneys or at- attorncys. tomey, in his name and on his behalf to execute, do, and DEED OF INSPECTION AND ASSIGNMENT. 135 concur in all suck deeds, documents, acts, and things as they or he shall think necessary or expedient for winding up the said business and realizing the trust estate, or otherwise for the purposes of these presents, and carrying the same into effect. And it is hereby agreed and Indemnity to DECLARED, that the trustees or trustee shall be respectively indemnified and saved harmless by and out of the trust estate or by the said creditors, according and in proportion to the amount of their respective debts, in respect of all transactions and personal engagements and things what- soever which the trustees or trustee shall lawfully do, or enter into, dii'ect, or sanction under these presents, or in relation thereto ; And the said creditors shall ratify, con- firm, and abide by the same transactions, engagements, and things in all respects, but so that no creditor shall by virtue of this present agreement be liable to pay a larger sum than he shall have received, or be entitled to receive, as and by way of dividend under the provisions herein contained ; And the trustees or trustee shall resjoectively Restriction of be chargeable only for such moneys, stocks, funds, and JjjJ^i^^i^'^ securities as they or he shall respectively actually receive, notwithstanding their or his signing any receipt for the sake of conformity ; and shall respectively be answerable only for theii' or his own acts, receipts, neglects, or defaults, and not for those of the others or other of them ; nor for any banker, auctioneer, or other person with whom or into whose hands any moneys or securities may be deposited or come ; nor for the insufficiency or deficiency of any stocks, funds, or securities ; nor for any loss unless the same shall happen through their or his own wilful default respectively. AND THIS INDENTURE ALSO WITNESSETH, Release by that in further pm'suance of the said arrangement, and in ^^^ °^^' consideration of the premises, the said creditors hereby respectively release {d) the debtor, his heirs, executors, and ((Z) As to the avoidance of release as an act of bankruptcy, or for non-registration, see an^r()vc their debts. Power to settle with dissenting creditors. Power to employ the debtor or others in winding up the estate. To pay salary fur services, or weekly allowance to debtor for luaiutenance. Covenants by the debtor to assist tri'stee when rct^vured, cLAiiED, tliat it sliall be lawful for the trustees or trustee to require any person claiming to be a creditor of the debtor, as to whose claim the trustees or trustee shall have any reasonable doubt (and whether or not such claim shall have been previously admitted or allowed by the trustees or trustee, or such claimant shall have been allowed to sign these presents {[/)), to verify the debt claimed to be due to him, with full particulars as to the nature of and consideration for the same, by statutory declaration. And it shall be lawful for the trustees or trustee, with the sanction of all the members for the time being of the committee, to settle with any creditor or creditors of the debtor who shall decline to assent to these presents, upon such terms, whether by payment in full of his or their respective debts or claims, or otherwise as the trustees or trustee and the committee shall unanimously think expe- dient or desirable (/'). Provided always, and it is HEREBY AGREED AND DECLARED, that it shall be lawful for the trustees or trustee, with the sanction of the com- mittee, to employ the debtor, or any other person or persons, to assist in winding up the affairs of the debtor, and realizing the trust estate, and to pay out of the trust estate to the debtor, or other person or persons so em- ployed, such salary or remuneration for the services so rendered, and also to pay to the debtor if not so employed such weekly or other allowance for the maintenance of himself and his family, as the committee shall from time to time du-ect. And the debtor hereby covenants with the trustees or trustee, that he will at all times during the continuance of these presents, whenever required by the trustees or trustee (and whether employed or not to assist in winding up his affairs under the provisions hereinbefore {g) See ante, p. 50, as to the effect of improperly allowing a creditor to sign the deed. (/() This power should only be inserted if the arrangement is likely to be opposed by creditors whose debts will enable them to obtain a receiving order against the debtor. ASSIGNMENT BY NON-TRADER. 141 in that behalf contained), give his best endeavours and assistance in or towards reahzing the trust estate, and con- verting the same into money, and distributing the proceeds thereof amongst the creditors entitled thereto under the trusts of these presents ; and will execute and do (but at the ^^^ execute cost of the trust estate) all such deeds, assurances, and things agreements, as shall be reasonably required by the trustees or trustee for further and more perfectly assuring the property expressed to be hereby conveyed and assigned, or any part thereof, unto the trustees or trustee, and enabling them or him to obtain possession thereof, and to carry into effect the trusts and purposes of these presents ; And also, that he the To hold GXCGT)tG(X debtor will stand possessed of all leasehold property be- leaseholds ia longing to him, and hereinbefore expressed to be excepted *^"^''^J *°'-' from these presents, in trust for the trustees or trustee, and will deal with and dispose of the same, and the income thereof, in such manner as the trustees or trustee shall direct in connection with the trusts, and for the purposes of these presents; And also, that he the debtor, and all To surrender other necessary parties (if any) will forthwith, at the cost of the trust estate, surrender into the hands of the lords and ladies of the several manors respectively, of which the same are respectively holden, all the copyhold or customary here- ditaments of or to which the debtor, or any person or persons in trust for him, is or are seised or entitled, to the use of the trustees or trustee, their or his heirs and assigns, according to the custom of the said manors respectively, by and under the rents, fines, heriots, suits, and services therefor due, and of right accustomed, upon and for the same trusts and purposes, and subject to the same powers and provisions, as are hereinbefore declared and contained respecting the real estate hereinbefore expressed to be hereby granted ; and that, in the meantime, until such surrender thereof as aforesaid, the debtor and his heirs will hold the said copyhold or customary hereditaments upon trust for the trustees or trustee, and to be disposed of for the purposes of these presents as they or he shall dii-ect. And 142 ASSIGNMENT BY NON-TRADER. Appointment of trustee as debtor's attorney. Release by- creditors. Reservation of rights against sureties and securities. THE DEBTOR HEREBY ATPOINTS the trustecs 01 trusteo to be his attorneys or attorney, in his name and on his behalf to execute and sign any deed or other document which the trustees or trustee shall think necessary or expedient for effectuating the purposes of these presents. AND THIS INDENTUEE FURTHER WITNESSETH, that in pursuance of the aforesaid agreement in this behalf, and in consideration of the premises, and of the conveyance and assignment hereinbefore contained, the said creditors do hereby respectively release and discharge the debtor from all debts now due and owing from him to them respectively, and fi-om all actions, claims and demands whatsoever in respect thereof (/r). Provided always (/), AND IT IS hereby AGREED AND DECLARED, that these presents shall not in anywise prejudice or affect the rights or remedies of any creditor against any surety or sureties, or any person or persons other than the debtor, his heirs, executors, or administrators, nor shall these presents in anywise prejudice or affect any secm'ity by way of mortgage, pledge, charge, or lien which any creditor may have or claim for his debt or debts, but if such security shall be enforceable against the debtor or his estate or effects, then, in that case, such creditor (unless he shall consent to abandon his security) shall be entitled to receive a dividend upon so much only of his said secured debt or debts as may remain after such secmity shall have been realized, or after credit shall have been given for the full value thereof, such value to be agreed upon between such secured creditors and the trustees or trustee, or, in (/i-) Shoiild a receiving order be made against the debtor, and the deed set aside as an act of bankruptcy, the release will also be thereby avoided. So, also, if the deed is avoided by not being duly registered under 1). A. A. 1887. See ante, p. 71. If desired, a perj^etual covenant not to sue the debtor may be substituted, or the release or covenant not to sue may be made conditional on the observance of his covenants by the debtor. As to the operation of release and covenant not to sue respectively, see ante, pp. 70, 74. For covenant not to sue, see j^ost, p. 153. ( I) As to the reservation of the remedies against sureties, and the benefit of secmities, see ante, pp. 78, 82. ASSIGNMENT BY NON-TRADER. 143 case of dispute, to be ascertained by arbitration as herein- after mentioned («?.) . Provided always, and it is Sm-etypay- HEREBY AGREED AND DECLARED, tliat any perSOn wllO, at to°s'tand L his the date of these presents, shall be a surety, or liable for place. any debt of the debtor, shall and may, after payment by such person of the same debt, or of so much thereof as he is liable to pay, stand in respect of the trusts and benefit of these presents in the place of the creditor to whom such debt was owing for the amount so paid by him, notwithstanding the same may be paid after the execution of these presents, and the dividends thereafter payable in respect of such debt, or the amount thereof which shall be so paid as aforesaid, shall be paid to the person making such payment as aforesaid, as in the case of bankruptcy (;?) . Provided also, and it is hereby further Power to ACxREED AND DECLARED, that the trustccs or trustee, or the ^"™™°^ ' ' _ meetings. committee, maj', at the cost of the trust estate, at any time dming the continuance in force of these presents, summon a meeting of the said creditors by a notice in writing, sent by post or otherwise to the said creditors respectively at their respective last-known places of business or abode in England or Wales, or to their respective solicitors or agents, seven clear days before such meeting, stating the time, place, and objects of such meeting ; And all resolu- Resolutions tions passed by the majority in number and three-fourths maiOTity\i in value of the creditors present or represented at any number and such meeting, relating to the matters to be submitted in value to be thereto, shall bind all the said creditors. Provided also, ^i^'^l^o- AND IT IS hereby AGREED AND DECLARED, that any creditor, who shall not be present at any such meeting, may vote by writing under his hand (and delivered to or sent by post to the trustees or trustee previously to the day appointed for such meeting), declaring his assent to (m) As to the effect of the surrender or redemption by the trustee of securities held by creditors, see ante, p. 83. {n) As to rights of a sui'ety who pays the debt for which ho is liable, see ante, pp. 80, 81. 144 ASSIGNMENT BY NON-TRADER. Power to remove a trustee. Power to appoint new trustee. Power to appoint new members of committee. Acts of majority of committee to be effectual. Powers of committee exerciseable or dissent from any one or more of the matters sub- mitted to the meeting, and such vote may be either absolute or subject to any condition or qualification ex- pressed in such writing ; and any absent creditor may, by writing, appoint any other person to act for him as his proxy at any such meeting, whose acts shall be considered as the acts^of the principal. Provided also, and it is hereby AGREED and DECLARED, that any trustee for the time being of these presents may be removed from his office by a reso- lution passed by a majority in number, and three-fomihs in value, of the said creditors present or represented at a meeting called in manner aforesaid for that purpose by the committee ; and that the statutory power of appointing new trustees of these presents shall be vested in, and exerciseable by, the members for the time being of the committee [p). And it is hereby also agreed and DECLARED, that if any member of the committee hereby or hereafter appointed shall die, or go to reside abroad, or desire to be discharged, or become unfit or incapable of acting as a member of the committee, it shall be lawful for a majority in number, and three-fourths in value of the said creditors present or represented at a meeting, to be summoned for that pm-pose in manner aforesaid, to appoint a creditor or other eligible person to fill the place of the member of the committee so dying, or going to reside abroad, or desirous of being discharged, or becoming unfit or incapable of acting as aforesaid ; and the person so appointed as aforesaid may act and assist in the powers and provisions of these presents, as fully and effectually as if he had been hereby constituted a member of the committee. And it is hereby also agreed and DECLARED, that the acts and decisions of the majority of the committee shall (except where hereby otherwise pro- vided) be as effectual for the purposes of these presents as the acts or decisions of the whole of them ; and all the powers and authorities hereby vested in the committee (p) For statutory power, see Conveyaiicing Act, ISSI, s. 31. ASSIGNMENT BY A TRADER. 145 shall, in the case of a vacancy in the office, he exerciseable ^y members by the surviving or continuing members or member thereof beino-. for the time being, until such vacancy shall be filled up in manner aforesaid. Provided lastly, and it is hereby Arbitration AGREED AND DECLARED, that if any difference shall arise clause. between the trustees or trustee and any person claiming to be a creditor of the debtor, and to be entitled to the benefit of the trusts of these presents, the same shall be settled and disposed of by two arbitrators, one to be named by each party, or by an umpire to be chosen by such arbi- trators before entering on the reference, in manner pro- vided by the Common Law Procedure Act, 1854, and all the provisions of that Act relating to references to arbi- tration, so far as the same are applicable, shall apply hereto. In witness, &c. Schedule of Creditor!^. 6. ASSIGNMENT by a trader for the benefit of creditors — Conveyance and assignment of debtor^ s real and personal estate to a trustee— Committee of inspection — Poicerfor trustee to carry on debtor's business — Cove- nant by creditors not to sue— Power to remove and ap- point trustees and members of committee, &^'c. {a). THIS INDENTURE made the day of between a. B. of (hereinafter called "the debtor"), Parties. of the first part ; C. D. of (trustee), of the second part ; E. F. of , G. H. of , and J. K. of (committee), of the third part ; and the several persons, com- («) This deed must be registered under D. A. A. 1887, but not under B. S. A. See notes to preceding Precedents. K. L 146 ASSIGNMENT BY A TRADER. Recitals. Conveyance and assign- ment of debtor's real and personal estate. Excepted property. Trust to realize. panics, and partnersliip firms whose names and seals are set and affixed in the schedule hereto, being respectively credi- tors of the debtor, and all other (a) (if any) the creditors of the debtor at the date of these presents who shall assent thereto in writing or otherwise (all of whom are hereafter refeiTed to as "the said creditors"), of the fourth part: Whereas the debtor is indebted to the said creditors re- S23ectively in divers sums of money, which he is unable at present to pay in full, and he has proposed to make such provision for the payment thereof as hereinafter contained : And whereas the said creditors have agreed to accept such proposal, and to enter into such covenants as herein- after contained on their part : And whereas the said jiarties hereto of the third part have agreed to act as a committee of inspection for the purposes hereinafter men- tioned, and they are hereinafter referred to as " the com- mittee." NOW THIS INDENTUEE WITNESSETH, that for the pm'pose of carrying the said proposal into effect, and in consideration of the premises, and of the covenants hereinafter contained on the part of the said creditors, the debtor, as beneficial owner, and with the privity and assent of the said creditors respectively, hereby conveys and assigns unto the said C. D., All and SINGULAR the real and personal estate, whatsoever and wheresoever, of or belonging to the debtor for his o'wn benefit (except leasehold property held at a rack-rent {b), and the debtor's tools of trade (if any), and the neces- sary wearing apparel and bedding of himself and his family) ; To hold the said premises unto and to the use of the said C. D., his heirs, executors, administrators, and assigns respectively, according to the respective natures and tenures thereof, Upon trust that the said C. D., his executors or administrators, or other the trustees or trustee for the time being of these presents (a) As to the necessity for making all the creditors parties by name or designation, in order to avoid registration under B. S. A., see ante, p. 59. {h) As to excej^tion of leaseholds, sec njit^', p. oo. ASSIGNMENT BY A TRADER. 147 (all of "wliom are respectively hereinafter referred to as "the trustees or trustee"), do and shall call in, collect, compel payment of, and receive such parts of the same premises respectively as can conveniently be realized in that manner ; and do and shall sell (c) , and convert into Power to money, such parts thereof as shall not consist of money, proimse or with full power for the trustees or trustee, with the sanction abaudon • 1-TP1 • 11 actions. of the committee, to bring, defend, compromise, or abandon any action, suit, or other legal proceeding relating to the trust estate, or any part thereof ; and to give time for the payment of any debt or debts owing to the debtor, and to accept payment thereof by instalments, composition, or otherwise, and to abandon any such debt or debts as afore- said which they or he shall consider bad, and generally to Power to ad- adjust and settle all questions, accounts, and disputes re- ^^^ dis'^u^es lating to the trust estate, or any part thereof, between the and to give debtor, or the trustees or trustee, and any other person or ^^^ °f ^'^^ persons, in such manner and upon such terms as the trustees tlebts, &c. ; or trustee shall think fit {d). And it is hereby agreed AND DECLARED, that the trustees or trustee shall stand possessed of the moneys to be realized as aforesaid. Upon to pay TRUST in the first place to pay thereout all the costs, charges, ^^P'^"'''^' ' and expenses attending the realization and conversion into money of the said estate, and all the expenses in connection with the negotiation for, and the preparation and execu- tion of these presents and the arrangement hereby made, including ' the costs of and incidental to the procuring the signatures and assents of creditors to these presents, and to the carrying into effect the trusts and powers thereof, including such remuneration to the trustees or including _ trustee for their or his services as the committee shall to™rustee.^°" think reasonable ; and, in the next place, to pay any rates, preferential taxes, wages, or other claims which would have j)riority "^ebts, &c. (c) As to the sale by trustees of property vested in tliein upon trust for sale, see Conveyancing Act, Ib'Sl, ss. 'So, 36. {d) Eor powers as to mortgages and charges on the debtor's pro- perty, see ante, p. 138. As to copyholds, see ante, -p. 141. l2 148 ASSIGNMENT BY A TRADER. Payment of dividends to creditors, and surplus (if any) to debtor. Power to retain divi- dends. or be payable in full on bankruptcy ; And subject as aforesaid to pay and divide the said moneys unto and amongst all the said creditors rateably, without preference or priority, according to the amount of their respective debts, in like manner as if the debtor's estate was being administered in bankruptcy, and by such instalments, and at such time or times, as the committee shall direct ; And if there shall be any surplus of the said moneys, after paying the said creditors their respective debts in full, then upon trust to pay such sm-plus to the debtor, his executors, administrators, or assigns, for his and their own use and benefit. Provided always, and it is hereby AGREED AND DECLARED, that if any dividend shall be distributed before all the creditors of the debtor shall have signed or assented to these presents, or before the amount of dividend payable to all the creditors shall have been ascertained (c/), the trustees or trustee may retain a suffi- cient sum to pay a like rateable dividend to any creditor or creditors who may not have then signed or assented to these presents, or the amount of dividend payable to whom shall not have been ascertained, and pay the same to such creditor or creditors respectively upon his or their respectively signing or assenting to these presents, or as soon as the amount of dividend payable to him shall have been ascertained, as the case may be ; And in default of any such sum being so retained, the trustees or trustee may pay to such creditor or creditors respectively, upon his or their signing or assenting to these presents, or as soon as the amount of dividend payable to him or them shall have been ascertained, as the case may be, a rateable dividend or dividends out of any moneys for the time being in hand applicable for the payment of dividends, before any further dividend is paid to the creditors generally, but not so as to distm-b any dividend already {d) As to retainer of dividends, see ante, p. 49. As to "wliether non-assenting creditors are entitled to a dividend, see ibid. ASSIGNMENT ]5Y A TIUDER. 149 distributed. And it is hereby also agreed and Power to DECLARED that it shall be lawful for the trustees or of^debtsf^°° trustee to require any creditor, as to whose claim they or he shall have any reasonable doubt (and whether or not such claim shall have been previously admitted by the trustees or trustee, or such claimant shall have been allowed to sign these presents (e) ), to verify such claim by a statutory declaration ; And also, that it shall be lawful Power to for the trustees or trustee, with the sanction of the com- dissenting mittee, to settle with any creditor or creditors who shall c^^^ditors. decline to accede to these presents upon such terms, either by payment of his or their respective debts or claims in full or otherwise, as the trustees or trustee and committee shall unanimously think desirable or expedient (/). Provided also, and it is hereby Power to AGREED AND DECLARED, that it shall be lawful for the £?^t^^«;L trustees or trustee, if they or he shall think it desii-able for the advantageous administration thereof for the pur- poses of these presents, to postpone the sale, conver- sion, and collection of the whole or any part or parts of the debtor's estate ; And, in the meantime, and until the same shall have been called in, collected, sold, and converted into money under the trusts of these presents, it shall be lawful for the trustees or trustee to Power to manage, repair, and insure against loss by fire, or other- ™anage and wise, the said estate, or any part thereof, at the cost of conversion, the trust estate, and also out of such estate to pay all and pay rent rents, rates, and taxes, or other outgoings payable in outo-oint^' respect of the said estate, or any part thereof, or of any premises, not being part of such estate, as shall be occupied by the trustees or trustee, and used by them or him for the pm-poses of these presents; And also to carry on the Power to business which the debtor has hitherto carried on for such °i^"7 °°- debtor s (e) See ante, p. 50, as to tlie effect of imjH'operly allowing a '^^^I'^sss. creditor to sign tlie deed. ( / ) This power should only bo inserted if the arrangement is likely to be opposed by creditors whose debts will enable them to obtain a reccivinor order against the debtor. 150 ASSIGNMENT 15Y A TKADEK. Trustee to keep proper books of account, and produce same to com- mittee. Power to employ,' debtor or others in carrying;' on business and realizing- estate ; to pay salary for services, and allowance to debtor for maintenance. Powers as to debtor's con- tracts. period as the committee shall think fit, with a view to the henefieial winding-up thereof; Am) for such last-men- tioned purpose to make such advances out of the trust estate, or out of money borrowed on the security thereof, or of any part thereof, as the trustees or trustee shall think necessary or expedient. And it is hereby agreed and declared, that during the carrying on of the said business as afore- said, the trustees or trustee shall keep proper books of account relating thereto, and containing proper entries of their or his receipts and disbursements in respect of the said business ; and shall produce such books from time to time, and whenever so requu-ed, to the committee or any accountant, or other person or persons they may appoint, for the purpose of being inspected and audited ; and also that the trustees or trustee shall, from time to time, and whenever so required, give all such explanations and information to the committee as may be necessary to show the actual condition of the said business and trust estate. And it is here]5Y further agreed and declared, that it shall be lawful for the trustees or trustee, with such sanction as aforesaid, to employ the debtor, or any other person or persons, to assist in carrying on the said business, and in managing and realizing the trust estate ; and to pay to the debtor, or other person or persons so employed, such salary or remuneration for the services so rendered, and also to pay to the debtor, if not so employed, such weekly or other allowance for the maintenance of himself and his family, as the committee shall direct, and to make such payments out of the trust estate. And it is hereby agreed and declared, that ifc shall be lawful for the trustees or trustee, with such sanc- tion as aforesaid, to adopt and carry out any contract entered into by the debtor, in or in connection with his said busi- ness or otherwise, and for that purpose to purchase all such materials, and generally to do all such acts and things as the trustees or trustee shall think necessary or expedient, with full power also for the trustees or trustee, with such sanction ASSIGNMENT BY A TRADEK. 151 as aforesaid, to abandon, rescind, and put an end to any sucli contract as aforesaid, wliich they or he shall not tliink it beneficial for the creditors to adopt or carry out, and upon such terms as the committee shall approve of. And it is hereby agreed and declared, that the net profits to arise from carrying on the said business shall be applied in the same manner as is hereinbefore directed with respect to the moneys to arise from the sale and conversion of the property expressed to be hereby conveyed and assigned. And it is hereby agreed and declared, that all moneys Moneys and and securities for money, which shall come to the hands bTdeposited of the trustees or trustee, shall, until the same shall be in a bank applied or distributed according to the trusts of these ^™ ^ recume presents, be placed in the names or name of the trustees or trustee in such bank, and to the credit of such account, whether a drawing or a deposit account, as the committee shall direct ; And that the trustees or trustee may, with Power of in- the sanction of the committee, invest the moneys which '^'ss*™^^*- shall come to their or his hands as aforesaid in their or his names or name in any of the public stocks or funds, or government securities of the United Kingdom or of India, or in the purchase of exchequer bills, until the same shall be required for application or distribution under the trusts of these presents ; A^'d that the trustees or trustee may, Power to con- in all doubtful matters of law, act under the advice or ^^ advice^of opinion of counsel without incurring any personal liability, counsel, but it shall not be incumbent on the trustees or trustee to take the opinion of counsel on any matter, if they or he shall not think it necessary to do so. And the debtor Covenants HEREBY COVENANTS with the trustccs or trustee, and also as ^ ^ °^' a separate covenant with the said creditors respectively, that to assist in he, the debtor, will at all times during the continuance of gstate^Ic. these presents, whenever required to do so by the trustees or trustee (and whether employed or not to assist in carry- ing on the said business, or Avinding-up the trust estate under the provision hereinbefore in that behalf contained), give his best eudeavom's and assistance in or towards 152 ASSIGNMENT BY A TKADER. and give in- formation as to his property and creditors, &c., and execute further assvu-- Trust of excepted leaseholds. Appointment of trustee as debtor's attorney. Covenant by creditors not to sue. realizing the property expressed to be hereby conveyed and assigned, and converting the same into money, and dis- posing of the proceeds thereof under the trusts and for the purposes of these presents; and will duly account for and hand over to the trustees or trustee all sums of money which may be received by him in respect of the premises hereby conveyed and assigned, or sub- ject to the trusts hereof; and will give to the trus- tees or trustee all such information and explanation re- specting his estate and creditors, or otherwise in relation to his affairs, and execute and do (but at the costs of the trust estate) all such deeds, assurances and things for the further and more perfectly assuring the said pro- perty, or any part thereof, unto the trustees or trustee, and enabhng them or him to obtain possession thereof, and to carry into effect the trusts and purposes of these presents, as by the trustees or trustee shall be reason- ably required; An]) also, that he the debtor will stand possessed of all leasehold property of or to which he is now possessed or entitled, and which is excepted from these presents, upon trust for the trustees or trustee, and will deal with the same, and the income thereof, in such manner in connection with the trusts of these presents as the trustees or trustee shall from time to time direct {g). And the deutor hereby appoints the trustees or trustee, his attorneys or attorney, in his name and on his behalf, to execute and sign any deed or other document which the trustees or trustee shall think necessary or expedient for effectuating the purposes of these presents. AND THIS INDENTUEE ALSO AVITNESSETH, that in consideration of the premises, and of the conveyance and assignment liereinbefore contained, the said creditors hereby respectively covenant witli the debtor that the said creditors respectively will not, at any time hereafter, during the continuance in force of these presents, sue, {(j) For provit-ion as to copyholds (if any), sec ante, p. 141. ASSIGNMENT BY A TRADER. 153 attach, molest, or impede the debtor, his heirs, executors, or administrators, estate or effects, in any manner howso- ever, for or on account of any debts or debt now due and owing from the debtor to the said creditors respectively, and that these presents may be set up as a defence and pleaded in bar to any action or other proceeding which shall or may be brought, instituted, or taken against the debtor, his heirs, executors, or administrators, or his or their estates or effects, by or on behalf of the said creditors, or any of them, their, or any of their, executors, administrators, partners, or successors, in breach of this covenant (k) . [Provisions as to sureties and securities — Summoning meetings of creditors — Voting hy absent credi- tors — Removal and appointment of trustees — Aj)2)ointment (if new members of committee — Arbitration clause. — Prece- dent 5.] In witness, &c. Schedule of Creditors. [k) A release may be substituted if preferred. As to the avoid- ance of a release if the debtor is adjudged bankrupt or the deed is not duly registered under D. A. A. 1887, see ante, p. 71. 154 ASSIGNMENT FOR BENEFIT OF CREDITOIIS, WITH Parties. Provision for reconveyance and reassign- ment to debtor if property realizes suffi- cient to pay a specified composition within spe- cified time ; or debtor pays a sufficient sum to his trustee to provide, with the amount realized, for the payment of the com- position ; 7. ASSIGNMENT for the ijenefit of creditors, tcitli provision for rc-assigjuncnt on ivnjmcnt of compoHition (a). THIS INDENTUEE made the day of , be- tween A. B. of (hereinafter called "the debtor"), of the first part ; C. D. of (trustee), of the^second part ; E.F.oi ,G.II.oi , aud t7. /i". of (committee), of the third part ; and the several persons, companies, and partnership firms whose names and seals are set and affixed in the schedule hereunder written (being creditors of the debtor), and all other (if any) creditors of the debtor at the date of these presents who shall assent thereto (all of whom are hereinafter referred to as " the said creditors"), of the fourth part, \_llecitals, provisions, and covenants as in Precedent 6 prior to arbitration clause.^ Provided always, AND IT IS HEREBY AGREED AND DECLARED, that if the premises hereby conveyed and assigned, and the net profits to arise from carrying on of the said business shall, within six calendar months from the date of these presents, realize a sufficient sum to enable the trustees or trustee (after payment of all such jireferential claims, and costs and expenses as aforesaid) to pay to all the said creditors, within the period aforesaid, a dividend or dividends amount- ing in the whole to the sum of in the pound on the amount of their respective debts ; or if within the same period the debtor shall pay, or procm-e to be paid, to the said trustees or trustee such a sum as shall (after payment of such preferential claims, and costs and expenses as afore- said) enable them or him by means thereof, and of the moneys which shall for the time being have been realized under the trusts of these presents, to pay to the said creditors respectively, within the period aforesaid, a like dividend or dividends, amounting in the whole to the sum of in the pound on the amount of tlivjv (a) This deed must be registered under D. A. A. 1887, but not under B. S. A. See notes to preceding Precedents. PROVISION FOR RE-ASSIGNMENT. 155 respective debts ; or if, within the same period, the debtor or pays or shall pay to the said creditors, or secure the payment ment to the to them respectively, at such time or times, and in such creditors of ^ "^ ' , ' _ the composi- manner as shall be deemed satisfactory by the committee, tion ; of such sum or sums as, together with the dividend or dividends which shall have been or shall within such period as aforesaid be paid to the said creditors under the trusts of these presents, shall amount in the whole to a composition of in the pound on the amount of their said respective debts ; And shall likewise discharge and indem- or fully indemnify the trustees or trustee, and their or +"^^4*8 his heirs, executors, administrators, estate, and effects, against costs from all charges, expenses, and liabilities incurred in the ^^ ^ ^J- execution of the trusts and powers of these presents ; then and in any such case the trustees or trustee, on such pay- ment being made or security given as aforesaid, shall re-convey and re-assign to the debtor, his heirs, executors, or administrators respectively, all such residue of the pro- perty expressed to be hereby conveyed and assigned, as shall then remain undisposed of under the trusts and powers of these presents ; and upon such re-conveyance and re-assignment being made, the property so re-con- veyed and re-assigned shall thenceforth be discharged and released from all the trusts of these presents, and from all claims by any of the said creditors ; And the trustees or trustee, and the heirs, executors, administrators, and effects of them and every of them, shall be discharged from all further trusts in respect of any property so re- conveyed and re-assigned respectively, and from all liability to any demand in respect of the same, or in respect of their or his dealing therewith. \_Arhitration clause — Pre- cedent 5.] In witness, &c. SciiEnrLE of Creditors. .156 ASSIGNMENT lOK THE 15ENEFIT OF CREDITORS. 8. ASSIGNMENT for the benefit of creditors — SJiort form. THIS INDENTUEE made the day of BETWEEN A. B. of (hereinafter called "the debtor"), of the first part ; C. D. of (hereinafter called " the trustee"), of the second part; E. F. of , G. II. of , and J. K. of (hereinafter called " the committee of inspection"), of the third part; and the several persons, companies, and firms whose names are set and affixed in the schedule hereto, being creditors of the said debtor, and all other (if any) creditors of the said debtor at the date of these presents, who shall assent thereto in writing or otherwise (all of whom are hereinafter called "the said creditors"), of the fourth part. WITNESSETH, that in consideration of the release from the said creditors respectively to the debtor hereinafter contained, he, the debtor. Doth here- by \Convciiance and assignment as beneficial owner of all the real and personal estate and effects, whatsoever and where- soever, of the debtor, except {a) the bcddinr/, tools of trade, and wearing apparel of himself and famihj — IlaJjendiini]. Upon TRUST to sell and dispose of the said estate and effects either by public auction or private contract, and to collect and receive all the debts due and owing to the debtor, with power, if the committee of inspection, or a ma- jority thereof, shall so direct, to sell the said estate and effects (including therein the said debts), or any part thereof, to the debtor, or to any other person or persons, upon credit and with or without security, as to the committee of inspection, or a majority thereof, shall seem desirable, and without being responsible for any loss which may be occasioned thereby. And it is hereby AGREED AND DECLARED, that the trustcc, his executors, (a) Tliis deed must be registered under D. A. A. 1887, but not under B. S. A. It is assumed that there are no leaseholds which ought to be excepted, see ante, pp. 55, 56. See notes to preceding Precedents. ASSIGNMENT FOR THE HENEFIT OF CREDITOES. 157 administrators, and assigns, shall stand possessed of the proceeds of the said estate and effects, and the debts so to be collected by him as aforesaid. UroN trust, in the first place, to pay thereout all costs, charges, and expenses which shall have been or may be incurred in and about the negotiation, preparation, and carrying out of these presents, and obtaining the signatures and assents of creditors thereto, and in the investigation of the affairs, and realization and winding-up of the estate and effects of the debtor, including such remuneration to the trustee for his services as the committee of in- spection, or a majority thereof, may consider reason- able, and to make any payments or allowances which would have preference or be entitled to be paid in full in case of bankruptcy; and subject as aforesaid to pay, divide, and distribute the said trust moneys unto and amongst the said creditors in like manner as in bank- ruptcy, and by such instalments and at such times as the committee of inspection, or a majority thereof, shall direct, and in case of any surplus, to pay the same to the debtor. AND THIS INDENTUEE ALSO WIT- NESSETH, that in consideration of the premises, and of the conveyance and assignment hereinbefore contained, the said creditors Do hereby respectively release (b) the debtor, his heirs, executors, and administrators, from all debts and sums of money now due and owing from the debtor to the said creditors respectively, and from all actions, suits, debts, claims, and demands whatsoever which they the said creditors now have against the debtor. \_Provision as to sureties and securities.'] Provided also, and it is hereijy AGREED AND DECLARED, that, if any dispute or difference shall arise in the carrying out of the trusts of these pre- sents between the said trustee and any person claiming to be a creditor of the said debtor, and entitled to the benefit of the said trusts, the same shall be settled and disposed {h) As to avoidance of release, see ante, j^p. 71 aud 142, n. (A'). 158 ASSIGNMENT FOR THE I5ENEFIT OF CREDITORS. of by two arbitrators, one to be named by each party, or by an umpire to be chosen by such arbitrators before entering on the reference, in manner provided by the Common Law Procedure Act, 1854, and all the provisions of that Act relating to references to arbitration, so far as the same are applicable, shall apply hereto. In AVITNESS, &c. Schedule of Creditoi's. ASSIGNMENT BY PARTNERS FOR BENEFIT OF CREDITORS. 150 9. ASSIGNMENT by Partners for the benefit of Creditors — Conveyance of joint and separate property to trustees to realize and apply proceeds according to the law of hanhruptcy [a). THIS INDENTURE made the clay of between a. B. and C. D., both of , and trading in Parties. partnership together under the style or firm of (hereinafter called " the debtors "), of the first part ; E. F. of , and G. H. of (trustees), of the second part ; J. K. of , L. M. of , and N. 0. of (committee) , of the third part ; and the several persons, companies, and partnership firms whose names and seals are set and affixed in the schedule hereto (being respectively creditors of the debtors, or one of them) ; and all other (if any) the creditors of the debtors, or either of them, at the date of these presents, who shall assent thereto in writing or otherwise (all of whom are herein- after referred to as "the said creditors"), of the fourth part : "Whereas the debtors or one of them being in- Recitals. debted to the said creditors respectively in divers sums, which cannot at present be paid, have, in order to make provision for the payment thereof, agreed to convey all their joint and separate estates (except as hereinafter mentioned) unto the said E. F. and G. II. in the manner and upon and for the trusts and purposes hereinafter expressed : And whereas the said creditors are satisfied with such provision, and have agreed to enter into such covenants as hereinafter contained on their part : And whereas the said parties hereto of the third part have agreed to act as a committee of inspection for the purposes hereinafter mentioned, and they are hereinafter referred to as "the committee." NOW THIS INDENTURE Conveyance of WITNESSETH, that in pursuance of the said arrange- separate estates. (a) See notes to preceding Precedents. 160 ASSIGNMENT BY PARTNERS. Trusts for realization. Power to bring, defend, or compromise actions. And settle accounts and disputes. ment, and in consideration of the premises and of tlie covenants hereinafter contained on the part of the said creditors, the debtors, jointly and severally, as beneficial owners of their joint estate, and each of them as beneficial owner of his separate estate do, and each of them doth hereby convey and assign unto the said E. F. and G. //., All and singular the real and personal estate belong- ing to the debtors, or either of them, for their or his own benefit (except leasehold property held at rack rent, and the necessary wearing apparel and bedding of the debtors respectively, and their respective fami- lies), To hold the said premises unto and to the use of the said E. F. and G. II., their heirs, executors, ad- ministrators, and assigns respectively, according to the nature and tenure thereof respectively. Upon trust that the said E. F. and G. II, and the survivor of them, and the executors or administrators of such survivor, or other trustees or trustee for the time being of these presents (all of whom are hereinafter referred to as the trustees or trustee) do and shall at their or his discretion call in, collect, compel payment of, and receive such outstanding parts of the same premises respectively as can conveniently be realized in that manner, and do and shall at the like discretion sell and convert into money such parts thereof as shall not consist of money (a), with full power at the discretion of the trustees or trustee to compound or give time for the payment of any debts due to the debtors, or either of them, and to abandon any debt or debts which they or he shall consider bad ; And also, with the sanction of the committee, to bring, defend, compromise, or abandon any action, suit, or other legal proceeding relating to the property of the debtors, or of either of them ; and to adjust and settle all questions, accounts, and disputes between the debtors or either of them, or the trustees or (a) For statutory power of sale, sec Conveyancing Act, 1881, ss. 35, 36. ASSIGNMENT BY PARTNERS. 161 trustee, and any other person or persons, in such manner, and upon such terms, as the committee shall direct ; and Power to sell with such sanction as aforesaid to sell all or any part of the said proj)erty to the debtors or either of them, or to any other person or persons, on credit, with or without security, without being responsible for any loss occasioned thereby (/>). And it is hereby agreed and declared. Application that the trustees or trustee shall, out of the moneys °* *"^^* ' *' moneys. to be realized as aforesaid, in the first place pay all the expenses attending the realization and con- version into money of the said estates, and all the ex- penses incurred in connection with the negotiation for and execution of these presents, and the procuring the signatures and assents of creditors thereto, and the carry- ing the trusts and powers thereof into effect, including such remuneration to the trustees or trustee as the com- mittee shall think reasonable ; and do and shall, in the next place, pay any rates, taxes, wages, and other claims which would have priority or be payable in full out of the said joint and separate estates respectively in bank- ruptcy ; and subject as aforesaid do and shall pay and distribute the said moneys unto and amongst the said creditors in or towards payment of their respective debts, without preference or priority, by such instalments and at such times as the committee shall direct, and pay the surplus (if any) of the said moneys, after jjayment in full of the said creditors, to the debtors respectively, according to their respective rights and interests. Ah^d IT IS hereby agreed and declared, that the trustees or trustee shall, in the administration and distribution of the joint and separate estates of the debtors, so far as practicable, observe and follow the rules in bank- ruptcy applicable to the administration of the joint and separate estates of partners (c). [Clauses for reservation of {h) For powers as to mortgages and charges on the property of the debtors, see ante, p. 138 ; and as to copyholds, ante, p. 141. (c) As to administx'ation of joint and separate estates of partners, see Treatise, pp. 693 et seij. R. M 162 ASSIGNMENT BY PARTNERS. Power to postpone realisation. Power to manage and insiire until convei'sion, and to pay- rents and other out- goings, and to carry on debtor's business. Power to employ debtors or others in carrying on business and realization ; dividends — Verification of drhts and settling trith dissentient creditors, as in Precedent 5.] Provided always, and it IS HEREBY AGREED AND DECLARED, that it shall be lawful for the trustees or trustee to postpone the sale and conver- sion of the whole or any part or parts of the premises expressed to be hereby conveyed and assigned for such time as they or he shall think it desirable for the advantageous administration thereof for the purposes of these presents ; and in the meantime, and until the said premises respectively shall have been called in, collected, sold, and converted into money as aforesaid under the trusts of these presents, it shall be lawful for the trustees or trustee to manage and repair and insure against loss by fire or otherwise at the cost of the trust estates respectively, all or any part of the same premises respectively ; and also out of the said trust estates respec- tively to pay all rents, rates, taxes, and other outgoings payable in respect thereof, or any part thereof respectively, or in respect of any other premises occupied or used by the trustees or trustee for the purposes of these pre- sents ; and also to carry on the business which the debtors have hitherto carried on under the same or any new or other style or firm, and for such period as the com- mittee shall direct, with a view to the beneficial winding- up thereof ; and for such last-mentioned purpose to make such advances out of the joint estate of the debtors for the time being subject to the trusts of these presents as the committee shall direct. \_Clanses as to accounts to be kept by the trustees and production thereof to the committee — Precedent 6.] And it is hereby agreed AND declared, that it shall be lawful for the trustees or trustee, with the sanction of the committee, to employ the debtors, or either of them, or any other persons or person, to assist in carrying on the said business during such period as the same shall be carried on as aforesaid, and in winding-up the same, and in managing and realizing the property expressed to be hereby conveyed and assigned, and otherwise to act as the trustees or trustee may direct in the ASSIGNMENT BY PARTNERS. 163 execution of all or any of the trusts or 'powers of these presents ; and in case of such employment as aforesaid to to remimerate pay to the debtors, or either of them, or other person or rendered, persons so employed as aforesaid, such allowance, salary, or remuneration for the services so rendered as the com- mittee shall direct, and to pay the same out of the trust estate ; and also to pay out of the trust estate to the said AUowance to ' _ ^ "^ debtors tor debtors respectively, if not so employed, such weekly or maintenance, other allowance for the maintenance of themselves re- spectively, and their respective families, as the committee shall direct. [^Poicer to complete, 8fc. contracts — Clause as to application of profits of husiness — Investment of inoneys until division — Power to consult counsel — Precedent 6.] AND THIS INDENTURE EUETHEE WITNES- Covenants by QGutors SETH, that in consideration of the premises the debtors do hereby jointly, and each of them separately doth hereby covenant with the trustees or trustee, and also as to '^?sist m a separate covenant with the said creditors respectively, that they, the debtors, will at all times during the con- tinuance of these presents, whenever required to do so by the trustees or trustee (and whether employed or not at a salary or remuneration under the power for that purpose hereinbefore contained), give their best endeavoui's and assistance in or towards realizing the property expressed to be hereby conveyed and assigned, and converting the same into money, and disposing of the moneys to arise therefrom, under the trusts and for the purposes of these presents ; and will duly account and hand over to the trustees or trustee all sums of money which may be received by them, or either of them, in respect of the said property, or other the property for the time being subject to the trusts hereof ; and will give to the trustees or to give to trustGGS trustee all such information and explanation respecting such necessary property, and the debts and liabilities of the debtors, or i^^^orm^tion r L J ^ ^ ^ _ ' as to property either of them, as shall from time to time be required by and creditors, the trustees or trustee, and it shall be in the power of the debtors, or either of them, to give ; and also will execute M 2 164 ASSIGNMENT BY PARTNERS. and to execute further assurances. Trust of excepted leaseholds. Appointment of trustees as debtors' attorneys. Covenant by creditors not to sue. and do all such assurances and things (but at the cost of the trust estate) for the further and more perfectly assuring the property expressed to be hereby conveyed and as- signed or subject to tlie trusts hereof, or any part thereof, unto the trustees or trustee, and enabling them or him to obtain possession thereof, and to carry into effect the trusts and powers of these presents as by the trustees or trustee shall be reasonably required ; And also that they the debtors respectively will stand possessed of all leasehold property belonging to them respectively and excepted from the assurance hereby made, upon trust for the trustees or trustee, and will deal with the same and the income thereof in such manner, in connection with the trusts and purposes of these presents, as the trustees or trustee shall direct. And the debtors hereby respec- tively APPOINT the trustees or trustee to be the attorneys and attorney of them and each of them, and in the names and name and on behalf of them and each of them to execute, do, and concur in all such acts, deeds, documents, and things as the trustees or trustee shall think necessary or expedient for the purpose of effectuating the trusts and purposes of these presents. AND THIS INDENTUEE FURTHER WITNESSETH, that in pursuance of the aforesaid agreement in this behalf, the said creditors hereby respectively covenant with the debtors and each of them separately that they the said creditors respectively will not at any time hereafter sue, attach, molest, or impede the debtors or either of them, or their or either of their heirs, executors, administrators, estates, or effects in manner howsoever for or on account of any debt or debts now due and owing from the debtors or either of them to the said creditors respectively, and that these presents may be set up as a defence or pleaded in bar to any action or other proceeding which shall or may be brought, instituted, or taken against the debtors or either of them, their or either of their heirs, executors, adminis- trators, or estates, by or on behalf of the said creditors, or any of them, their or any of their executors or adminis- ASSIGNMENT BY PARTNERS. 165 trators, partners, or successors, in breach of this covenant {d). [^Provisions as to siirefics and securities — Precedent 5.] Pro- vided ALWAYS, AND IT IS HEREBY AGREED AND DECLARED, that the trustees or trustee, or any member of the com- mittee, may at the cost of the trust estate, at any time or times during the continuance in force of these presents, summon a meeting of the said creditors by a notice in writing, sent by post or otherwise to the said creditors respectively, at their respective last-known places of busi- ness or abode in England or Wales, or to their respective solicitors or agents, seven clear days before such meeting, stating the time, place, and objects of such meeting ; and all resolutions relating to the matters to be submitted to such meeting, or any of them, and passed by the majority in number and three-fourths in value of the creditors present or represented at any such meeting, shall bind all the said creditors. Provided nevertheless, and it is HEREBY expressly DECLARED, that uo resolutiou which shall contravene any rule in banki'uptcy relating to the administration of the joint and separate estates of part- ners, shall be binding unless it shall be approved by such majority as aforesaid, as well of the joint creditors as of each set of separate creditors present or represented at any such meeting. [Provisions for voting h>j absent credi- tors, removal and apimntment of trustees, appointment of new members of committee, decisions of majority to be effectual, i^c. — Arbitration clause — Precedent 5.] In witness, &c. Schedule of Creditors. Part I. — Joint Creditors. Part II. — Separate Creditors of A. B. Part III. — Separate Creditors of C. D. {(l) See note (A-), ante, p. 153. 166 GENEKAL RULES PURSUANT 'JO THE TIL— GENERAL RULES Made pursuant to the Bankruptcy (Discharge and Closure) Act, 1887. Short title and applica- tion of rules. Interpreta- tion of terms. 1. These rules may be cited as the Bankruptcy (Dis- charge and Closure) Rules, 1887. They shall, so far as practicable, and unless otherwise expressly provided, apply to all proceedings taken or pending under the Act in any matters to which the Act applies. 2. In these rules, unless the context or subject-matter otherwise requires, — " The Act" means the Bankruptcy (Discharge and Closure) Act, 1887 : " The Coui-t" means the Court having jurisdiction in any matter in which proceedings under the Act are instituted : " Creditors' assignee" includes any trustee or inspector in any of the cases to which the fourth section of the Act applies : " Debtor" means any debtor who has been adjudged bankrupt, or whoso affairs have been liquidated by an-angement under the Bankruptcy Act, 1869, or any previous Act relating to bankrui^tcy : " Official assignee" includes the successor of the existing official assignee : " Trustee" means in any bankruptcy the trustee in such bankruptcy, and in any liquidation by arrangement the trustee in such liquidation, and includes any cre- ditors' assignee, and the official assignee, and any other person in whom, under any Act relating to BANKRUPTCY (DISCHARGE AND CLOSURE) ACT, 1887. 167 bankrui^tcy prior to the Bankruptcy Act, 1883, or under the Bankruptcy Act, 1883, the property of a debtor is vested : "Prescribed" means prescribed by the Act or these rules, or any order made under the Act. Other expressions in these rules shall, unless the context or subject-matter otherwise requires, have the same mean- ings as the same expressions have in the Bankruptcy Eules, 1886. Applicaf ions for Discharge. 3. A debtor intending to apply for his discharge under Application the Act shall make his application to the Court in writing *°'' . ,^ "^ rn H 51 sis !z;s Amount of Property as estimated by Debtor. 188 ORDER AS TO FEES UNDER Fees. Payment of fees. Commence- ment and short title. THE DEEDS OF AEEANGEMENT ACT, 1887. Order an to Fees. The Eight Honorable Ilardinge Stanley, Baron Ilals- bury. Lord High Chancellor of Great Britain, by and with the advice and consent of the undersigned judges of the Supreme Court of Judicature, and with the concuiTence of the Lords Commissioners of her Majesty's Treasury, doth hereby, in pursuance and execution of the powers given by the Deeds of AiTangement Act, 1887, and all other powers and authorities enabling him in this behalf, order and direct in manner following : — I. The fees contained in the Schedule hereto are fixed and appointed to be, and shall be, taken in the office for the registration of deeds of arrangement pursuant to the Deeds of Arrangement Act, 1887. The said fees shall, until otherwise determined by the Treasury, be taken by stamps. II. All fees payable under this order, except fees in respect of searches, inspections, and office copies, shall be paid at the time of registration. III. This order shall come into operation on the first day of January one thousand eight hundred and eighty-eight, and may be cited as " The Order as to Fees for Eegistra- tion of Deeds of Arrangement ; " and expressions therein shall have the same meaning as in the Deeds of Arrange- ment Act Eules, 1888. SCHEDULE.— Scale of Fees. Filinrj. 1. "Where the total estimated amount of property included under or the total amount of compensation payable under a deed shall appear from the affidavit of the debtor not to £ s. d. 1 2 3 4 5 THE DEEDS OF AERANGEMENT ACT, 1887. 189^ exceed the following amounts, tlie fee on filing such deed shall be as under : — Where the property does not exceed £1,000 Exceeds £1,000 but „ £,2000 £2,000 „ „ £3,000 £3,000 „ „ £4,000 Exceeds £4,000 In every case to which the above fees do not apply . . . . . . . .200 2. On every certificate, indorsed on an original deed, of the registration thereof . . 2 6 3. On every copy of a deed transmitted to a county court registrar, for every folio or part of a folio contained in such copy ... 1| But if the total amount shall involve a fraction of a penny, then such fraction shall be charged as Id. Searches. 4. On searching the register (for every name inspected) and on inspecting the filed copy, including the limited extract to be taken pur- suant to the Act and rules .... 26 Copies. 5. On ofl&ce copies and extracts of or from the filed copy of a deed, for every folio (72 words) or fractional part of a folio ... 6 6. On examining a copy brought in to be marked as an office copy, for every folio or fractional part of a folio .... 2 Miscellaneous. 7. On all other documents and proceedings (including filing affidavits) the same fees as are payable in respect of the like documents and proceedings under the order as to Supreme Court Fees, 1884. The 17th day of December, 1887. (Signed) Halsbury, C Coleridge, L. C. J. ESHER, M. E. C. E. Pollock, B. We concm', H. Manisty, J. Herbert Eustace Maxwell, Sidney Herbert, Lords Commissioners of Her Majesty's Treasury. 190 RULES UNDER RULES OF THE SUPREME COURT UNDER BILLS OF SALE ACTS, 1878 and 1882. 1. These Rules may he cited as " The Rules of the Supreme Court, Bills of Sale Acts, 1878 and 1882," and shall stand in lieu of " The Rules of the Supreme Court, December, 1882," which shall be and are hereby annulled. 2. These Rules shall come into operation on the 1st January, 1884. Abstract. 3. The abstract of the contents of a Bill of Sale, re- quired by the Bills of Sale Act (1878) Amendment Act, 1882, to be transmitted to the Registrar of a County Court, shall be in the form given in the Appendix hereto. Abstract to be 4. The abstract shall be sealed with the seal of the Bills dated. ' of Sale Department of the Central Office of the Supreme Court of Judicature, and dated on the day on which it is transmitted by post to the Registrar of the County Coui't named therein. Abstract of 5. "Where a Bill of Sale has been re-registered since the i'G~rG*^istGrG(l • no bills of sale. 31st October, 1882, or shall be re-registered hereafter under section eleven of the Bills of Sale Act, 1878, an abstract of the re-registration, sealed and dated, shall be transmitted by post to the Registrar of the County Court to which such abstract should have been transmitted had the Bill of Sale been registered under the Bills of Sale Act (1878) Amendment Act, 1882. Notice of a G. Where a memorandum of satisfaction has been or a\m'ofTfile° shall be written under section fifteen of the Bills of Sale to be trans- ^(.^^ 1878, upon any registered or re-registered copy of a registrj-. Bill of Sale, an abstract of Avhich has been transmitted to any Registrar of a Coimty Court, a notice of such satis- faction, in the form in the Appendix hereto, duly sealed and dated, shall be transmitted to each of the Registrars to whom an abstract of such Bill of Sale shall have been transmitted. BILLS OF SALE ACTS, 1878 AND 1882. 191 7. The Eegistrar shall number the abstracts and notices Abstracts to of satisfaction in the order in which they shall respectively and filed. be received by him, and shall file and keep them in his office. 8. The Eegistrar shall keep an index, alphabetically Index, how to arranged, in which he shall enter under the first letters of the surname of the mortgagor or assignor such surname with his Christian name or names, address, and description, and the number which has been affixed to the abstract. 9. Upon the receipt of a notice of satisfaction, the Satisfaction^ Registrar shall enter the notice of satisfaction on the index, abstract of the Bill to which it relates, and shall note in the index against the name of the mortgagor or assignor the fact of the satisfaction having been entered. 10. The Eegistrar shall allow any person to search the Search and index at any time dming which he is required by the ab&?ract?° County Court Eules for the time being to keep his office open, upon payment by such person of one shilling ; and to make extracts from the abstract or notice of satisfaction upon payment of one shilling for each abstract or notice of satisfaction inspected. 11. The Eegistrar shall also, if required, cause an office Office copy of copy to be made of any abstract or notice of satisfaction, ^ ^ ^^^ ' and shall be entitled for making, marking, and sealing the same to the same fee as is payable in the Bills of Sale Department of the Central Office of the Supreme Court of Judicature, viz., sixpence per folio. 12. Every first and second class clerk in the Bills of Sale Authority to Department of the Central Office of the Supreme Court of ' ^ Judicature shall, by virtue of his office, have authority to take oaths and affidavits in matters relating to that depart- ment. (Signed) Selborne, C. Coleridge, C. J, N. LiNDLEY, L. J, Edw. Fry, L. J. C. E. Pollock, B. 28th December, 1883. H. Manisty, J. 192 APPENDIX TO RULES. APrENDIX. No. 1. ABSTEACT. Local Registration of Bills of Sale. d d o ll It u o a || a g iai 12; -Eo I '6 o g Ph bo 1? |f !2; p. Amount Secured, and how Repay- able. o a» 1 O 3 o ^ Date of Registration. Date of Filing Affidavit of Renewal. 188 188 188 To the Registrar of the County Court of holden at Sent on the day of 188 (L.S.) No. 2. Notice or Satisfaction. Bills of Sale Eegistiy, Eoyal Courts of Justice, London. to 18 18 Registered [or, re-registered] Abstract transmitted 18 . Satisfaction entered 18 . Take notice that — A memorandum of satisfaction to the above bill of sale was entered on the register on tbe above date. (Signed) (l.s.) To the Registrar of the County Court of holden at Sent on the day of INDEX. ACCOUNTS, provisions as to keeping, by debtor, 132, by trustees, 150. power to adjust, 138, 147, 160. ACT OF BANKEUPTCY, by assignment of debtor's property, 42, 50. by offer to pay composition, 44. not available after three months, 43, 51. or by creditors who are parties or privies to deed, 40, 41, 51. ACTIONS, powers to bring, compromise, &c., 138, 147, 160. AFFIDAVITS, what required for registration under D. A. A. 1887, 10, 12, 15. forms of, 185. copies of deed and affidavits to be filed simultaneously, 12. before whom to be sworn, 15, n. (o). variance from affidavits under B. S. A., 15. principles applicable thereto, 16. AGEEEMENTS. for carrying on or winding up debtor's business for pay- ment of his debts, and giving a control to the creditors, are within D. A. A. 1887. .25, 32. See Inspectoeship Deeds. ALLOWANCE, i-)rovision8 as to, for debtor, 133, 140, 150, 163. APPAEEL, exception of, in assignment by debtor, 131, 137, 146, 160. ■R, 194 INDEX. AEBITEATION, clause of, 122, 144, 158. AEEANGEMENT WITH CEEDITOES. See Private Ar- B-U^GEMENTS WITH CllEDITOllS ; ASSIGNMENT ; COMPOSI- TION ; Deeds of Aubangement ; Inspectorship Deeds ; Letters of Licence. ASSENT, by creditors sufficient without signature of deed, 36, 48. ■when to be given, 37. effect of refusal to assent, 38, 49. ASSIGNMENT FOE BENEFIT OF CEEDITOES. See Private Arrangements with Creditors. for benefit of creditors generally, within D. A. A. 1887. . 24. exempt from registration under B. S. A., 59. of personal chattels for particular creditors must be regis- tered under B. S. A., 26. not within D. A. A. 1887. .24. such deeds void as bills of sale for securing payment of money, 26, 27. whether void altogether or only as to the personal chattels, 27. by one person to pay creditors of another, ib. whether within D. A. A. 1887, ib. ATTOENEY, provision for appointment of trustee as debtor's, 134, 142, 152, 164. AVOIDANCE, of release by act of bankruptcy, 70, 71. for non-registration under D. A. A. 1887.. zZ*., 142, 153, 164. BANK, provisions for payment of money into, 132, 151. BANKEUPTCY, alteration of law by D. A. A. 1887. .23. by Bankruptcy (Discharge and Closure) Act, 1887.. 24, n. (;:), 113. assignment for benefit of creditors, an act of, 42, 50. See Act of Bankruptcy. BENEFICE, emoluments of, not alienable, 57. INDEX. 195 BILLS OF SALE ACTS, 1878 and 1882. .94, 106. Englisli and Irish Bills of Sale Acts identical, 26, n. (/). exemption from registration under, of assignments for creditors generally, 26, 43, fid. inspectorship deed without assignment not exempted from registration under, 29, 60. validity of such deeds under B. S. A. 1882.. 29, 61. BOOK DEBTS, assignment of future, must be specific, 41, n. (y). assignments of, for indemnity of surety, 41, 123, 128. BUSINESS, meaning of, 15, n. (r), 16, n. (r), 33. debtor's place of, must be stated in affidavit for registra- tion under D. A. A. 1887. .15. trust to allow debtor to carry on, 129. agreements and instruments for carrying on and winding up debtor's, within D. A. A. 1887. .32. power for trustees to carry on debtor's, 149, 162. CLEEaYMAN. See Benefice. CLERKS, provision for the employment of, in administra- tion of debtor's estate, 133" 134, 140, 150, 162. COMMITTEE OE INSPECTION, appointment of, and provisions relating to, 136, 146, 156, 159. appointment of new members of, 144. COMPOSITION. See Pmvate Arrangements with Credi- tors. deed of, or agreement for, within D. A. A. 1887. .24. where by one person to pay composition to creditors of another, 28. secured by surety, 119, 124, 127. by deed of inspection and assignment, 120. by assignment, 154. COMPROMISE, powers for, of actions, claims, «S:c., 138, 147, 160. CONDITIONAL, covenant not to sue, 121. release, 124. o2 196 INDEX. CONTEACTS, powers as to debtor's, 150. COSTS, provisions relating to payment of, 128, 138, 147, 157, IGl. COUNSEL, power for trustee to consult, 157. COUNTY COUETS, registration in, 22. COVENANT NOT TO SUE, by partner, 74. perpetual, ih. operates as release, ih.^ 75, n. {i). effect of, for limited period, 75. release with reservation of rights against sureties operates as, 79. for covenants not to sue, see 121, 152, 164. COVENANTS, by debtor for payment of composition, 120, 127. of suificient sum to trustee to pay composition, 130. by surety, 120. by debtor to wind up his business and estate under in- spection, 131. by non-trader in deed of assignment, 140. by trader, 151. by partners, 163. CEEDIT, power to sell on, 156, 161. CEEDITOES. See Private Arrangements with Creditors ; Assignment ; Composition ; Deeds of Inspection. "creditors generally," meaning of, 24, n. {b), 25. deeds of arrangement under D. A. A. 1887, apj)ly only to creditors generally, 24. need not sign deed, assent sufficient, 36, 48. DEBTOE, covenants by. See Covenants. allowance to. See Allowance. power to employ, in administration of his estate, 140, 150, 162. power to sell to, 156, 161. DEBTS, assignment of, to indemnify surety, 123. power to compromise, &c., 138, 147, 160. payment of preferential, 138, 147, 161. INDEX. 197 DEBTS— co7iimued. power to require proof of, 140, 149. book debts, assignment of future, 41, n. (y). DEEDS OF AEEANGEMENT ACT, 1887.. 87. DEEDS OF AEEANGEMENT. See Private Aerange- MENTS WITH CREDITORS. for benefit of creditors generally, must be registered under D. A. A. 1887.. 10. void if not registered, 1 1 . mode of registration, 10 e^ seq. definition of, within the Act. 24. registration not necessary if arrangement for particular creditors, 25. frame of deed for benefit of creditors generally, ib. not confined to debtor s property, 27. DESCEIPTION, affidavit of debtor's, to be filed on registration of deed of arrangement, 11. rectification of register as to, 13. principles applicable to, 16. DISCHAEGE, alteration of law as to, under B. A. 1883. .23. of undischarged bankrupts under prior statutes, 24, n. (;:). Bankruptcy (Discharge and Closure) Act, 1887. . 113. DISCLAIM, trustee cannot, after acceptance of trust, 35. DISSENTIENT CEEDITOES, power to settle with, 140, 149. when not entitled to benefit of arrangement, 38, 49. DIVIDENDS, duty of trustee as to declaration and payment of, 49. power to retain, 139, 148. provisions relating to, ib. Unclaimed, 49, n. (?h). EXEMPTION from registration under B. S. A., 2C, 43, 59. EXTEACTS, what aUowed from register, 21. FEES, to be taken in respect of registration under D. A. A. 1887., 22, 179. under the Bankruptcy (Discharge and Closure) Act, 1887.. 180. 198 INDEX. FILING, meaning of, 10, n. (a). copies of deed and affidavits to be filed under D. A. A. 1887.. 10, 12. GUAEANTEE by surety for payment of composition, 120, 128. INSPECTION, of register, under D. A. A. 1887. .21. committee of. See Committee. INSPECTOESHIP DEEDS, for carrying on or winding-up business for benefit of creditors generally within D. A. A. 1887. .25. creditors must have control over debtor's property or business, 25, 29. meaning of control, 29. classification of, ib. when exempted from registration under B. S. A., 30. validity of, as to personal chattels without assignment, ib., 61. precedent of, with assignment, 129. INSTALMENTS, deeds for payment of composition by, 119, 124, 129. JOINT ESTATE, administration of joint and separate estate of partners, 159, 161. JUDICATUEE ACTS, probable construction of composition arrangements thereunder, as to rights of creditors in case of debtor's default, 76. JUEISDICTION, of Courts of Bankrujptcy as to deeds of arrangement, 62. of High Court, 63. LEASEHOLDS, when to be excepted in deed of assignment, 56. trustee no j)0wer to disclaim, after accepting trust, 55. may assign to pauper, ib. trustee bound by covenant not to assign, ib. provisions relating to, 137, 141, 146, 152, 160, 164. LETTEES, covenant by debtor to preserve, 132. INDEX. 199 LETTEES OF LICENCE, wliicli give the creditors control over the debtor's property or business within D. A. A. 1887. .31. not if they give no control, ib. nature of control, 32. LIEN. See Secueed Creditors. LIMITATIONS, STATUTE OF, does not run against creditors under assignment for creditors, 69. doubtful whether it runs under composition, ib. provision to prevent operation of, 122. LOCAL EEGISTEATION of deeds of arrangement, 22. MEETINGS OF CEEDITOES, power to call, 143. resolutions at, ib. where arrangement by partners, 165. MOETGAGES. See Secured Creditors. effect of surrender or redemption by trustee or debtor of, 83, 84. provisions in deed relating to, 138. NEW MEMBEES OF COMMITTEE, power to appoint, 144. NEW TEUSTEES, power to appoint, 144. OCCUPATION, meaning of, 17. where none, ib. where more than one, 18. onus of proving, ib. effect of erroneous addition, 19. affidavit of debtors to be filed on registration of deed of arrangement, 11. rectification of register as to, 13. OFFEE to pay or accept a composition, whether an act of bankruptcy, 44. OFFICE COPIES, of registered deeds may be taken, 20, prima facie evidence, 21. 200 INDEX. PAETNEES, release by one partner binds all, 74. secHs, covenant not to sue by one partner, ib. in deeds of arrangement covenant not to sue by one binds all, 75. perpetual covenant not to sue operates as release, ib. assignment by, for benefit of creditors, 159. POSTPONEMENT of realization of debtor's estate, pro- vision for, 137, 149, 162. PEEFEEENTIAL CLAIMS, provision for payment of, 138, 147, 161. PEIVATE AEEANGEMENTS WITH CEEDITOES, Compositio)!. for benefit of creditors generally, must be registered under D. A. A. 1887.. 10. secifs, if for benefit of particular creditors, 28. definition of deeds of arrangement within the Act, 24. the law as to composition, 34. with one creditor, ib. with creditors generally, 35. agreement to accept part of debt in satisfaction of the whole, 34. where time and mode of pajanent varied, ib. where demand is for unliquidated damages, 35. effect of release, ib. of recovery in action for less amount, ib. signature of deed by creditors not necessary, 36. assent sufiieient, ib. creditor bound, who induces others to accede, ib. effect of covenant by debtor with particular creditors, ib. with creditors generally, 37. creditors must assent within the specified time, ib. exceptions, 38. no accession after debtor's death, ib. or after opposition by creditor, ib. bona Jides essential, ib. secret bargains by creditors void, 39. other creditors may repudiate arrangement, ib. and payments by debtor may bo recovered by him, ib. bargain with third party not enforceable, ib. composition not affected by comj)ulsory payment, ib. agreements to pay original debt, 40. assignment to indemnify surety, ib. INDEX. 201 PEIYATE AEEANGEMENTS WITH CEEDITOES— co«^. Composition — con fin ucd. assignment to surety of personal cliattels, 40, proper assignment for surety's indemnity, 41. creditor making secret bargain barred, though others not, ib. and cannot prove old debt under debtor's bank- ruptcy, 42. or prove a new debt without repaying money paid to him, ib. where debt admitted by debtor for more than is due, ib. assignment to secure composition, ib. when an act of bankruptcy, ib. when available as such, 43. debtor entitled to re- assignment on payment of composi- tion, ib. if for benefit of creditors generally, exempt from regis- tration under B. S. A., ib. whether offer to pay composition is an act of bankruptcy, 44. Assiynment of j)roperti/, for benefit of creditors generally within D. A. A. 1887. . 24. law relating to, for benefit of creditors, 45. voluntary assignments in trust for creditors, ib. when irrevocable, ib. what creditors entitled, 46. assignment for benefit of creditors generally, ib. bona fides necessary, ih. effect of secret bargains, 47. creditors need not be parties by name or sign deed, 48. assent sufficient, ih. class of creditors and time for accession should not be limited, ih. duty of trustee before declaring dividend, ib. exclusion from dividend of creditors refusing or neglect- ing to accede, 49. admission of neglecting creditors to future dividends, ib. opposing creditors not entitled, ib. l-emedy, when improperly allowed to execute the deed, 60. amount on which dividend payable, ib. assignment for creditors generally an act of bankruptcy, ib. creditors who are parties or privies cannot impeach deed, 51. when act of bankruptcy not available, ib. when assignment fraudulent imder 13 Eliz. c. 5, ibi 202 INDEX. PEH^ATE AEEANGEMENTS WITH CEEDITOES-fo«^. Assiffnmc7it of propertij — continued. deeds bona fide executed for benefit of creditors good under 13 Eliz. c. 5. .51. position of trustees under assignments for creditors, 53. liability of trustees if debtor bankrupt, ih. ■where banki'uptcy trustee treats sale under deed as valid, ih. allowance of costs of preparing for sale under the deed, 54. enforcement in bankruptcy of contract for sale by trustee of deed, ih, power to carry on debtor's trade does not make creditors co-partners, ih. liability of trustee in respect of onerous property, 55. no power to disclaim after executing deed, ih. when excejition of leasehold property advisable, 56. trustee may assign to pauper, ib. covenant in lease not to assign, ih. property inalienable, 57. exemption from registration under B. S. A. of assign- ments for benefit of creditors, 59. creditors claiming adversely not entitled to benefit of deed, GO. whether inspectorship deeds are exemj^t from registra- tion under B. S. A., ih. such deeds are bills of sale under B. S. A. 1878, and void under B. S. A. 1882. .61. prior unregistered bills of sale void as against trustees under assignments for creditors, 62. jurisdiction in bankruptcy as to assignments for credi- tors, ih. Chancery Division of High Court, tribunal to execute the trusts, 63. duties and liabilities of trustees, ih. Effect of, on the remedies of creditors, when composition pleadable in bar, 67. revival of original debts if composition not paid, ih. rule as to proof of original debts if debtor bankrupt, 68. where defeasible release, ih. where conditional release, 69. whether Statute of Limitations runs, ih. creditors have option to avail themselves of debtor's default, 70. elf ect of an absolute release, ih. where deed set aside as an act of bankruptcy, 7 1 . or void for want of registration under D. A. A. 1887 . . ih. INDEX. 203 PEIVATE AEEANGEMENTS WITH CEEDITOES— con^. Effect of, on the remedies of creditors — continued. where release not binding on equitable grounds, 71. where composition substituted for debts, 72. where not paid through fault of creditor, or by accident, ih. creditor cannot restrict operation of release, ih. may sign conditionally, //;. creditors must disclose all their demands, 73. power of partner to bind co-partner, 74. by release, ih. by covenant not to sue, ih. effect of covenant not to sue for a limited period, 75. effect of proviso that the deed may be pleaded in bar before default, ih. composition resolution under B. A. 1869 was pleadable in bar before default, 76. semhle, also, is composition arrangement under Judi- cature Acts, ih. promise to j)ay debt in full after release, ih. Effect of, on sureties and secured creditors, principles as to discharge of sureties, 78. reservation of remedies against sureties, 79. reservation must be stated in deed, ib. release to one joint debtor, ih. effect on release of reserving remedies against sureties, ih, no reservation if debts extinguished, 80. surety paying creditor entitled to his securities, ih. rights of creditors and a surety for part of the composi- tion, 81. rights of secured creditors in bankruptcy, 82. under private arrangements, ih. as to right of trustee to redeem such creditors, 83. effect of redemption, ib. effect of surrender of securities, ih. right of creditors to amend valuation of securities, 84. PEOMISSOEY NOTES by debtor and surety for payment of composition, 124. PEOOF, power for trustee to require proof of debts, 139, 149. PEOPEETY. See Private Areangements with Creditors ; Assignments. meaning of under D. A. A. 1887. .33. 204 INDEX. PEOPEETY— co» thiuccl. inalienable, 57. emoluments of benefice, ih. military and naval pay, 58. public offices, ib. pensions, 59. assignment of, necessary to exempt from registration under B. S. A., 29, 31, 59, Gl. EECTIFICATION OF EEGISTEE. See Eegister. EEGISTEE, of deeds of arrangement to be kej)t by registrar, 20. particulars to be inserted in, ib., 137. inspection and searches of, 21. extracts allowed from, ib. rectification of, in wbat cases allowed, 13. power to rectify as against trustee in bankruptcy, 14. EEGISTEAE, of bills of sale to be registrar for purposes of D. A. A. 1887.. 19. duties of, 20. effect of omission by, to transmit copy of deed to County Coiu-t, 22. duties of registrar of County Court, ib. EEGISTEATION. See Eegister ; Eegistear. of deeds of arrangement, 10. how made, ib. deed must be properly stamped, 11. time allowed for, ib. extension of time, 12. copy of deed and affidavits to be filed simultaneously, ib. effect of shortness of time for, ib. difficulties likely to arise, ib. rectification of register, 13. extent and effect of provision for, 14. how affidavits to be framed, ib. local registration where place of debtor's business or residence out of London Bankruptcy district, 22. effect of registration, 23. gives no validity to void or voidable deeds, ib. instruments which require registration, 24. must be for creditors generally, 25. INDEX. 205 REGISTE ATION— co«im«ef/. not necessary where deed for benefit of particular, or particular class of, creditors, 25. frame of deed for benefit of creditors generally, ib, EELEASE, effect of absolute, 35, 70. of defeasible, on creditor's right to prove, 69. of conditional, ib. avoidance of, by act of bankruptcy, 7 1 . by non-registration under D. A. A. 1887, ib. where not binding on equitable grounds, ib. creditor cannot restrict operation of, 72. by one partner, binding on all, 74. perpetual covenant not to sue operates as, ib. agreement to pay released debt not enforceable, 76. release to one joint debtor releases the other, 77. if remedies against other parties reserved, construed to be covenant not to sue, ib. release by creditors, see 126, 135, 142, 157. EESIDENCE, meaning of, 15, n. (r). EULES, underD. A. A. 1887.. 182. Bankruptcy (Discharge and Closure) Act, 1887,. 166. BiUs of Sale Acts, 190. SALAEY, provisions for payment of, to debtor and others employed in administering debtor's estate, 133, 134, 140, 150, 162. SEAECHES, of register, 21. fee payable for, ib., 188. SECEET BAEGAIN, by creditors void, 39, 46. entitles other creditors to repudiate tlio arrangement, 39, 47. payments under, by debtor, may be recovered by him, ib. if made with third party not enforceable, ib. 206 INDEX. SECRET BAHGc Am— continued. agrccmout for fresli consideration to pay original debt, 40. assignment to indemnify surety, when valid, ib. SECUEED CEEDITOES. See Mortgages. rights of, in bankruptcy, 82. under private arrangements, ib. reservation of securities, 33. right of trustee to redeem, 84. effect of surrender of securit}', ib. time for amending valuation of, 85. provisions as to, 138. STAMPS, deeds of arrangement to be stamped before regis- tration, 11. STATUTOEY AEEANGEMENTS, alteration of the law as to discharge in bankruptcy in respect of, 23, 24. SUEETY, principles as to discharge of, 78. reservation of rights of creditors against, 79. implies reservation of rights of sureties against debtor, 80. surety paying creditor entitled to securities of latter, ib. rights of creditors and sui-ety for part of composition, 81. indemnity to surety for composition, 40. assignment of personal chattels void, ib. proper mode of framing indemnity, ib. SUSPENSION, notice of susj)ension or intention to suspend payment^ an act of bankruptcy, 44. whether this includes offer to pay a composition, ib. TEUSTEES, liability of, under assignment for creditors, 53. See Private Arrangements with Creditors. for wrongly allowing a claim, 50, n. (o). not liable for payment of dividend to creditors through mistake of law, 64. liability for neglect, ib. entitled to expenses, 65. liability to strangers, ib. liability where business of debtor carried on under their superintendence, ib. INDEX. 207 TRJJSTEE8— continued. liability for costs of litigation, 66. provision for remuneratiou of , 138, 147, 157, 161. for accounts by, 150. for removal of, 144. for appointment of new trustees, ib. UNCLAIMED DIVIDENDS, appHcation of, 49, n. (m). WEAEING APPAEEL. See Appabel. LONDON: FEINTED BY C. F. EOWOETH, GEEAT NEW STEEET, FETTEE LANE — E.C. Reeves & Turner, 100, Ch^vncery Lane a^d Carey Street, W.C. Royal %vo. Price 15«. LAW OF REAL PROPERTY. CHIEFLY IN RELATION TO CONVEYANCING. By HENRY W. CHALLIS, M.A., Barrister-at-Law. ' ' This is a law book of a kind very rare in these days — a work full of original research and careful consideration."- — Solicitors' Jo//aI. ' ' Mr. Challis has succeeded in gi\ing an admirably concise exposition of the prin- ciples upon which modem conveyancing rests." — Zaw Journal. Demy 8to. Price 5s. Questions & Answers selected from the Roman Law Bar Pass Examination. By JOSEPH A. SHE APt WOOD, Esq., Barrister-at-Law. Secotid Edition, ^vo. 15s. 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