1876-02-21 — Page 3

SUPREME COURT. Wednesday, February 16th, 1878. IN FULL COURT.

IMPORTANT DECISION.

WHITTALL, AND ANOTHER Y. BENECKE,

BOUCHAY AND COMPANY.

· *Judgment in this case was delivered by the Judges to-day.

SUPPLEMENT TO THE CHINA MAIL," FEBRUARY 21, 1876.

deods of Fobrusty 2nd and 24th were pre- i no suggestion that there was the least pres, ditor, and yet, if it tenda to defeat and | help in the hour of need a firm with which |~ But it was argued that the defendants pared and executed.

sure on the part of the defendants, who delay the body of creditors, it is against he had been connected for many years in a were not ereditors until the bills drawn under Now it is shown that these deeds were little know that their two last letters of the policy of the Bankruptcy laws, and so anbordinate empacity, and in which his the credits had been accepted. In point prepared in secret, and exconted by the credit had been used at all, much less that is said to be fraudulentette fe undle had formerly been a partner.

of fact, however, the defendants at the da'o grantor Mr. A. F. Heard only, the defen- they had been applied to pay off Chinese - The use of the two last clean credits caus: It may bere be observed that after he of the Registration of the deed were actual dents the grantees being absolutely ignor creditors. There was not even a request not be defended, yet I hope and believe became a partner and bad examined the creditors for a small sum about £300 in ant that such documents had been made nor any previous agreement nor any obliga, that Mr A. F. Heard was noting on the accounts he told Mr A. F. Heard that they respect of losses on some joint dealings in in their favour until some time afterwards. tion to make them. The agrosmont enter, advice of the soliciters at Boston, and son- required £20,000 to get through their diff tea. This being so they would be assonting It was argued that such documents are uoted into by Aug. Heard de Co, to cover the sidered that it was bis duty to protect the ficulties, and this was after the two creditors provided their agent Bir Toller to be considered deeds capable of conveying bills drawn against credite was to do so defendants by these mortgages if he used | credits had been used, not before as was had any authority to sign at all. any interest in property at all. K

by remitting good bills on London. A their money. He argued. There seems to have been u As I have before remarked, I think there mortgage of really was never oantemplated. In the course of the, argument a very vague hope that this sum would reach was authority given to sign a dead, but not r And auch was the meaning of the demand large number of cases were cited on the one them from London Boston, but there | mch a deed as this was intended to be. for "cover" contained in the letters from side and the other, and from the judgments can have been no bond jids, belief that it Is then the property conveyed by these the defendants March 10th, a term which delivered by vary learned judges quota would, has been invoked in aid of the argument tions were extracted bearing on the subject.

mortgage deeds, eight in number, beyond Next was there an

An Equitable Mortgage the roach of the Trustees 1 of demand or pressure made in respect of more or less. But really each case rests on by deposit of title deeds. the deeds of April. This request for cover its own merits, and there are features in arrived long after the deeds of February this case distinguishing it from any other were made.

But many cases show that deeds made in a similar way and executed by the grantor alone, and even retained under his own control, may be effactual instruments to

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It was argued that even if the mortgages were bad, this was a deposit of title deeds amounting to an equitable mortgage.

In this suit the Hon. James Whittall and Theophilus Gec Linstead, describing them-Pass property.

The law is now settled that the question selves as being trustees of the estate and is one of intention. Wickliam . Xanos,

Mr. Parker handed the mortgage deeds effects of John Heard, Augustine Beard, L, R. 3 H. LO is one of the intest

to Mr. Toller as agent for the Defendants, Albert Farley Heard, Robert Inglis Fos

I can find in the Reports, ANG and Mr. Toller very naturally and properly ron, and Cliarles Edward Parker, lately authorities on the subject and refers to all

It will be hero nonvenient to quote Lord the most important previous decisions,

The result in this, in my oplaton; if these demanded the title deeds which were plan- trading in copartnership in Hongkong, China, Japan and the United States of Mr Justice Blackburn says, No particular Hatherley's language in ex parte Tempent, six conveyances being conveyances of aed in his custody by Mr. Parker. America ad merchants, and general agents technical form of words or sota is necessary L. R. 6, Chan. Ap. p. 74. He says, "The part only of the debtors' property had been made in consideration of an actual bona under the style of Augustine Heard & Co., to render an instrument the deed of the principle is that in order to constituté à under and by virtue of a certain deed of party maklög it. The more affixing the fraudulent preference the act must be the fide advance, then such a consideration seal does not take it a deed, but as soon spontaneous set of the debtor not bona fide would, I think, enure to support the ante- assignment made and entereit into by and

as there are nots or words sufficient to show | originating in a demand or some other stop cedent advances, and it would be diffioult between the said Trustees of anid firm and their creditors beating date the 19th April that it is intended by the party to be of the creditor. These words exactly ap to take the case out of the range of the principles laid down in Bittlestone. Cook, 1876, under the provisions of the Bankrapt executed as his deed presently binding on ply here, Ordinance 1864, are plaintiffe; and Charles him, it is sufficient." He goes on to say, In the next place were there deeds made 25:14. J.; Q B. 281. ↑ Bills v. Smith; Mer cer Peterson L. R. vol. 2, Ex. 304 and Victor Benecke, Henriette Elizabeth Be-And it is clear from the authorities as by way of fraudulent preference?

I do not attach much importance to the 3 Ez. Ex parte Foxley L R. 3 Chan, ap. booke, Otto Auguste Benecke and Erasst well as from the reason of the thing that Charles Benecke, carrying on business in

fact that Mr A. E. Heard was anxious to p. 104; In re Culemere L. E. Chan, ap. 129; hunkere nader the style or firm of Benceke

registar them in the land office under the p. 71, and Whitmere v. Claridge 36 L. J. opartnership in the City of London as

keep there deads secret, and that he did not and ex parte Tempest Lu Rs 6 Chen. An Bouchay & Co., and by amendment, W. H.

Ordinance 8, of 1844, The Ordinance does QB. Ex. Ch. 87, in which conveyances Brereton, a Trusted 2 once in the last of

not require it. Such an obligation would and transfers of property have been upheld. not be reasonable as it seems to me, as it. But in these cases we find either that the mortgage deeds, are defendants.

might involve in Bankruptcy any mer there was some previous agreement to give olmat who in a state of inere temporary security, or that the conveyance was made embarrassment, raised money on the recu- to secure past and present or present rity of household property or land. advances only, or that they were made Besides the deeds were practically in the ander immediate pressure, or there is to be hands of the grantors themselves. Their found some circumstance which takes the very existence was unknown to any one case out of the rules relating to acts of else, and they could always be registered Bankruptcy. in time to obtain priority over any other deed. It is equally true that if the emer geney had passed they could be suppres kaised altogether.

The prayer of the plaintiffs petition is that certain Deeds eight in number being assurances by way of mortgage by Augustine Heard & Co, to the defendants, dated re-

spectively thres dated 2nd February, three dated the 24th February and two the 18th of April 1875, may be declared void and may be ordered to be set aside.

The plaintiff's alleged that these several deede wore fraudulent preferences by An- gustine Heard & Co. against the provisions of the statutes of Elizabeth, and against the provisions of the Bankruptcy Ordinatios 1864

The case came on and was heard on No. vember 28th, November 26th, November 39b, December 1st, 2nd, 6th, 8th, 10th, 11th, 18th and 15th, 1875, and at the desire of the Court on February the 7th, 1876, before the Full Court without a Jury.

Mr fayllar, Q.0., and Mr Handley, instructed by Messrs Caldwell and Brereton, appeared for the plaintiffs. The Attorney General, the Hon. Mr Bramaton, and Mr Kingsmill, instrouted by Messrs Sharp, Toller and Johnson, appeared for the de

fendants,

The faota and circumstances appear from the admissious in the pleadings, and from 87 exhibita, and from the siva voce ex aminations of two members of the firm of Augustine Heard & Co., their Bookkeeper

and other witnesses...

JUDGMENT BY HIS HONOR MR. JUSTICE SNOWDEN, The Houblo, JusTICE SNOWDEN delivered his judgment as follows:--

A joint statement of facts as found by the full Court in this oase has been prepar- ed, and is brought into Court and is taken as read, so that it is not necessary to relor to them particularly, 1 therefore propuse only to state the grounds of my decision as briefly as I have found it to be prasible aonsistently with clearness. The different questions of law raised by the learned counsel on either side bave been treated seriatim, that seeming to be the most convenient course to follow.

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the deed is binding on the obligor before nay, even before he knows of it. Whether it comes into the custody of the obliges, if the crisis had passed them doods would ever have reached the defendants, Mesars Benecke it is unnecessary to speculate, as in the end they were placed in the hands of defendants' agent as deeds passing the property.

This case supports the older esses cited in argament Exton and Scott, 6 Sim. 81; Hall v. Palmer, 18 L. J. Ch. 852; Fletcher Fletcher, 18 L. J. Chan. 66. Bome of these are stronger canes than the one at pre sent under consideration, because the deeds Dover passed out of the custody of the grantors, and were only found amongst their papers after death;

́80 Mr A. F." Heard, when he executed these deeds for himself and his partnera whose powers of attorney he held, conveyed to the defendants the legal estate in the property comprised in the schedule.

But the scoresy of the transaction, the manner in which the deeds were prepared, not by Mr Brereton, the retained Solicitor of the firm but by the grantor the execu tion before Mr Brereton as a Notary Public, that the contents of the deads should not be the anxiety displayed by Mr A. F. Heard seen, the depositin a sealed packet, are facts which throw great light on the intention of Mr A. F. Hoard in creating the securities, and the question of the contemplation of Bankruptcyį vakar

tions recited in the deeds were entirely It is admitted that the various considera- fictitious unless the use of the £20,000 drawn under the two last credits can be held to be present advance and the funde obtained under the three first formed an antecedent debt, but under the otroum

In the perfectly voluntary nature and in stenour the defendants could not be, I think, prevented from showing any good considers the secrecy of these deeds we have undoubt sion really existing, and if necessary aed elements of fraudulent preference. But Court of Equity could reforma conveyance that is not enough; man has a right to in this respect,

give a preference to acreditor, and as has been remarked may be said to do so in every mercantile transaction where he pays one creditor before others. Holbord. Ander son, 5 T. R. 235. The law, however, saya that he must not do so in contemplation of bankruptcy, in care major change

Contemplation of Bankruptcy has been defined by many Judges in many cases in various tezas, gd

These six deeds of February 2nd and 24th were kept entirely secret. Now se orecy is not a proof, but one of the signs of fraud and they were not registered within one month from the date of execu. -tion.

This brings me to the next objection made by Mr Hayllur, which in,-Are these deeds void an against the Trust deed, not baving been registered within one month of the date of their execution, and the Trust deed having been so regiatored,

The Registration Ordinance ja permissive. Deeds, eto, may be registered, and priority is given according to the respective dates of Registration. If deeds, etc., are not re- gistered at all, then the Ordinanos makes them void against, subsequent bond fide purchasers, or mortgages for a valuable The Trustees under the consideration. deed of Trust are such purchasers bond ide and for a valuable consideration.

It is not easy to say what the meaning of Section 4 can be. It seems to me that the intention of that Section is to preserve the priority of a dead according to the date of its excoution which though executed before is registered after another deed within one month from date.

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In Poland s. Glyn sited in the notes to Flook v. Jones 4 Bingham, Mr Justice Bailey says, if it was probable that a bank ruptcy would ensue, then it may be predi- eated of him that he (the Bankrupt) con- templated it,

la Morgan v. Brundrett, & B. & ad. 286, Mr Justice Parke says, The meaning of those words I take to be that the payment or delivery must be with intent to defeat the general distribution of effects which takes place under a commission of Bank ruptoy...

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The transaction hero was very different, and it seems to me that these mortgages were given to secure preferred creditore, or perhaps rather creditors in futuro in respect of an antecedent liability, and to secure them in respect not of an actual present advaces but of a previous mis application of credits, because the proceeds of the credits had really been misapplied before the deeds were executed.

It nowhere appears that Mr. Foller de manded these deeds as a deposit by way of mortgage, but merely as accompanying the mortgage deeda in the completion of the title. The jutention to create an equitable mortgage must be clear. If debds are placed in the lands of an attorney, until a mortgage deed is prepared, as a security for would form an equitable mortgage until money previously advanced, such a deposit the deed is executed, Keys. Williams 3 Y. & C, 55. But if placed in his hands merely to enable him to prepare a mortgage deed, it would not be an equitable mortgage, Ex parte Bulwer, 8 Cox 249.

There must be some understanding or agreement or something said or done to create an equitable mortgage by deposit of deeda and there is nothing of the kind here.

We now come to the deed of assignment made and excouted on April 19th and re- gistered on the 23rd. It was prepared on instructions from Mr Parker, The deed purports to be made by and between Aug. Heard & Co., the plaintiffs as trustees, and the creditors. It was executed by the plaintiffs, and Mr Parker for the firm, his authority to do so being admitted, but not by any oreditor. It is in a common form Et conveys all the estate of the debtors to the Trustees, and contains the usual release.

To call this an advance seems to me misuse of language, even if the greation of the deeds and the use of the credits were The assents of Messrs Baring & Co. and contemporaneous. No doubt, when the the defendants, the only secured creditors, defondants discovered that their oredits were obtained by telegram. They are al had been drawn against, and the proceeds most the same word for word, “We an- applied to purposes entirely foreign tonent to deed allowing Heard resuming those originally agreed upon, they made business provided our doing so does not the best of it and accepted the securities compromise our securities, or our indspend imposed upon them by necessity, but in ent right of action respecting same," no true sense can it be fairly called an advance—and the subsequent acceptance of the mortgages was not a "ratification" in my opinion as was urged in argument.

I have already stated that the deeds were entirely voluntary. Moreover they were made to secure money used to enable Mesars A. Hund & Co to pay favoured oreditors, the Chinese creditors at Caston and elsewhere, not to enable them to carry on their business as was the case in re Cole mere L. R., Chan, 120, and so the tendency was to defeat and delay the general body of creditors, and this is an act of Bank ruptcy. In re Colomere L. R. 1 Chan. Ap. by Lord Cranworth, says after remarking on the policy of the 12 and 13 Vicot. C. 100 sec. 67, a very reasonable qualification has been introduced that the assignment to be fraudulent must be made not for the purpose of raising money to enable the trader to go on with his trade but for the purpose of paying some favoured creditor or making some payments to all his creditors otherwise than through the Bank ruptcy Court. In either of these cases it is an act of Bankruptcy."

Three elements of fraudulent preference as laid down in Griffith and Holmes arO KA follows, (p. 428, following Bourne, Graham, 2 Jurist N. S. 1225.)

It was argued by the learned Attorney General that by the proviso in the deed of Trust protecting these securities the Trustees had waived their right to avoid these mortgages, and that as they were good against the grantors Aug. Heard dr Co., the Trustees were estopped from im peaching them. I cannot concur in that argument it seems to me that the proviso must be held to have been intended to protest valid securities, but not to uphold any voidable as fraudulent preferences.

Could the clause be considered to bavo that meaning, I should be disposed to hold that it is so repugnant to the objects, and tenor of the dead, which shows a clear in. tention that the estate should be admin. should be disregarded as inaonsistent with istered as in Bankruptcy, that the proviso the provisions of the Bankruptcy Aota-in the same way as inconsistent powers con- ferred by a similar deed were disregarded in ex parte Spyers in re Josephs, 32 I Bankruptcy p. 62. ***

The Trustees have the same powers, rights and remedios with respect to the debtors and their estate and effects, and the collection and recovery of the same as are possessed or may be used or exercised by Assignees.

Now, if those deeds were fraudulent pre- ferences they were acts of Bankruptcy, and so the title of the Trustees would relate book, Topping v. Kaynell 32 L. J. O. P. 325. This case was followed by a very important case not cited in argument, but beating very strongly on the present question, Ealey . Inglis, 3 L. R. Ex. 247. This is an authority that Trustees can take steps to avoid a fraudulent transfor of goods (or of securities, I suppose) made before the execution of the deed, without doing any act to avoid the transactions

The same argument was raised here a in zley and Inglis that the Trustees only make such property as the deed, the con. tract between the debtor and his areal- tors, gives them, and which was alone in their contemplation, namely the goods conveyed. In the present case the argu The deed contains a corresponding pro- ment would be that the debtors having vision," It was contended on the part of conveyed the property comprised in the the defendants that they gave no assent to mortgages to the defendants, they could a deed which would from its nature be pr not have intended to convey it again to the bibitive of Aug. Heard & Co.'s resuming Trustees, But the doctrine inid down in business, Mr Parker had at some meeting Topping v. Keysell was upheld in Exley v used the word "Resumption," which I have Inglis, The Chief Baron says, after point» no doubt had reached and had been mining out that the Trust Deed (similar to the understood by the London creditors. "one here) conferred on Trustees the necess I do not think that the defendants con ary-powers, that there are many good rea to uplated such a deed as this, but I think sons why the rule ought to govern. "If that they did intend to ausent to some sort no such power were possessed there would of deed effecting an arrangement bebe nothing to prevent a debtor from assign tween Aug. Heard & Co. and their ing scoretly a large part of his estate to creditore, perhaps an inspectorship dead favoured creditors, or those who were no which would leave the property in the creditora at all, aud so deprive real bona hands of Aug. Heard and Co. on the confide creditors of the whole benent of the dition that their securities were not mo- deed which he subsequently executed." There is no other way in which an assignee lested.

can effectually reach auch property but by a resort to the destrines of bankruptøy, Baron Martin concurs in the opinion that the Trustees could disaffirm a fraudulent transfer, band

This seems to me to have been the con- dition of their assenting to any deed. But it has been always held that assents to a Trust dead of this kind must be unqualified and without condition, Johnson v. Oseaton 38 I Kr. 76, and or parte Railings, 32 L J. Bank Borsfall v. The Swan Bank and Brick Works 18 L. Times N. S. 409, are authorition on this point.

The cases of Marks v. Feldman 5-L, R. Q. B. 275 Ex. Ch. and Exley v. Inglis, shew that apart from the doctrine of relation back assignee may at any time avoid a fraud- lent transfer.

I think therefore that there deeds were made when the firm of Aug. Heard & Co. were insolvent and wore not made for a valuable consideration, and so under Sect. 93 may be disposed of by the Trustees for the benefit of the oredikora, or as being fraudolent preferences, and therefore must be declared void. I concur in the order which will be indicated by his Lordship.

JUDGMENT BY THE CHIEF JUSTICE.

SIR JOHN SMALE, Chief Justico, gave him judgment in the following words →→

Another definition given by Chief Justice Tindal in Gibson v. Boutts, 3 Scott p. 229, I do not propose to decide what the pre-

in quoted by Lord Justice Kuight Bruce cise legal definition of the arrangement

with approbation in ex parte Simpson 1 De entered into between Mease Augustine

M. & G. p. 19. Where a party is in so Heard & Co. and the defendants, Mesars

hopeless a stata of insolvency that be oan-

I think the assent here was conditional, Benecke & Co., should be. I find that

not reasonably expect to avoid Bankruptcy

and would not be a good assent to a Trust s fand amouating to £30,000 was (by The six deeds in question were all re- though he chooses to fight it off as long

deed under Scotion. 163, and if so it would 1. Contemplation of bankruptcy, the Imbe deducted from the sum total of asients. the letters of April 10th and Augustgistered on April 14th, whilst the Trust as possible, I cannot look upon a payment 28th, 1874, or the command of a credit to deed was not registered beforo April 23rd. made by him voluntarily to a favoured mediate proximity of the event is not essen. The same rule would apply to the assent of that amount) placed by the defendants in Thoy would therefore in my opinion have croditor, in any other light than as a pay tial as has been held frequently. 2nd, Meaars Baring B. & Co.; and that too for the hands of Meaars Augustine Heard & priority. The same question does not ment calcalated and intended to defeat the distribution proprio metu by Bankrupt the whole value of their securities, inas Co. for certain special purposes, and on arise with respect to the two deeds of April Bankrupt laws."

dugaan kard, a distribution different from that much as after many conflicting decisions certain fixed Levine, One of these terms 13th, as they were registered within one Contemplation of Bankruptcy is an in- which would be made by the Court of (ex parte Morgan 32 L. J. Bank, p. 16 a division of profits and losses, month of their execution and before the ferenco of a fast to be gathered from sur Bankruptoy.. MY having been decided in the opposite direc So Messrs Benecke, Senchay & Co., pro- Trust deed.

rounding circumstances without any proof. This is a fair description of some of the tion by Lord Westbury), the cases of vided the capital to carry on certain ex- These eight destie the plaintiffs now seek that a distinct not was in view. Aldred essential ingredients of a fraudulent pre- Whittaker's. Lowe L. R. Vol 1 Eq. p. 74, change and loan-advance operations as they to set aside, as made by way of fraudulent Constable 4Q. B. 674, and it is a fact which ference, and all are to be found in this case and in re Stark L. R. 1 Chan, Ap. 150, toay to termed, whilst Mears Augustine preference, as amounting to acts of Bank-depends upon the mind and intention of Even if there had been no existing debt are now concliteive that the value of the Heard & Co. contributed local experience captoy, and as voluntary, deeds void under the Bankrupt at the time; Gibson r. Boutta there was one likely to acorue on the ac securities of scoured oreditors is not to be and knowledge in the manipulation of the 27th Eliz.

Sup.

ceptance of the bills, and if these deeds deduoted. capital on the terms of adivision of profit and These questions may be considered to Now on February 2nd, Mr A. F. Heard were made with the intention that should- Besides, the assents of holders of out entirely concur in the conclusion to Lost. Mr Justice Lindlog la his work on part-gether. If these deeds are void under the was the sole partner here and letters he Bankruptcy superveno a proference might standing bills at the date of Registration which Mr Justice Snowden bus arrived. nership, p. 19, says that he is not aware set of Eliz., they will be void in Bankrupt. received from his brother, Mr John Heard, be secured to the defendants, the case of of the deed bad not been obtained, and

I had prepared an elaborate review of the. of any case in which persons who have cy, although the onverse of the proposition the partner resident in America, have been Brown v. Kempton, 18 L. 3. O. P. 169, is they it has been decided (Petrie . Potrie, cases and arguments which have been pre- krood to divide profit and loss have been does not hold good, put .::: ⠀ ⠀ put in evidence, and to them we must look an authority that such would be a fraudul | L. R. 3 Chan Ap. 232) are oreditors having sented to us: but when the learned Judge held not to be partners.

Now the Bankruptcy Ord. No. 5 of 1864, for light on this point, for there can be no ent proforenen ell

proveable debts whose assent must be ob, shewed me his searching examination of In the presunt case the question of part is composed of provisions borrowed partly doubt that Mr A. F. Heard acted on the Next as to the deeds of April 19th. Mrtained.

the fasts in evidence; and also of cases cited nership in profits and losses could only from 18th and 19th Vist, Ch. 120, and advice contained in them. They seem to Parker had then become a partner, and But whore owing to their absence in sad of others not oited, I thought that it

hore- owing to the extend to £90,000 advanced under the partly from the 24th and 25th Vict., Chap me to breathe the very spirit of fraudulent acting under Instructions frim Mr A. F; foreign countries or, some other reason would be a waste of time to travel over the three first credits for £10,000 each. The 194

preference. They expres vividly the criti Heard who had then resched London dir. such manent cannot be obtained the provi- same ground. Finally I determined to sup- two lass oredits for £10,000 each for. Sect, 98 of the Ord,, following Sect. 136 osi state of the firm and the alarm of the ented Mr Brereton and Mr Toller to prepare sions of Section 170 Bankruptay Ordinance pross my long criticism of the arguments warded to Messrs. Augustine Heard & Oo. of 12 and 18 Viot, Ch. 126, enacts that writer, and I cannot conceive that that an deeds giving the defendants further sou must have been complied with and notices used, and to seats my decision on the case

given in the local papers. But this pre- before us more concisely. in a letter from defendants, dated Nov. 6th, if any, bankrupt being at the time insol. xiety, and alarm did not extend to Mr Arity. to take the place of credits which had ex yont shall (except upon Marriage of any F. Heard in Hongkong. The lettera de It is quite possible that Menara Beneoke caution had not been taken.

In the facts which after much labour wh pired or were believed to be about to of his children or for aume valuable consid asribe the interview of the writer with his pressed Mr A. F. Heard for further secu-

In view of the grave consequences of have eliminated from the evidenos we son“ expire, could not, I think, be included in eration have douveyed, assigned, or traps solicitor, Mr Ward, rapest his advice, give rity, but there is no proof of such a thing. holding the Trust Deed to be invalid after qur, but we have had difficulty in agreeing the partnership capital-il partnership ferred to any person any Hereditaments, urgent directions about the secret prepara All we know is that by a telegram from moob consideration, the Court mader the on the statements of them. there was as the agreement limited the Offices Fees, Annuities, Leases, Goods or tion of deeds securing Messrs Baring & Co. his partner, Mr Parker is directed to have powers conferred by the Code called on the We have come to the same conclusions in capital to £20,000 ont at any one time, and Chattells, eto, the Court may order the same They are to be executed before a notary these deeds made and executed, and the plaintiffs to produce if possible further law, For the most part I accept the rea these pro last credits were used not only to be sold and disposed of for the benefit of public in such a way that the contents may mortgage deeds removed from the sealed evidence that the requisite majority had woning of the learned Judge. It is not without the sanction but in defiance of the the creditors under the Bankruptcy. By not be seen by him placed in a sealed paket and banded to Mr Toller as agentassented, se as to make the deed bidding on important for the purposes of this pass that exprees instructions of the defendants and Sect. 167 of the Ord, which is a verbatim packet, deposited with agent and finally for the defondante, P

BOB-ABSONting Creditors.

the points not essential to these conclusions of the agreement made by Augustine copy of Seot. 190 of 24 and 25 Viot., Ch. when auspension becomes inevitable they This transaction seems to me to be simi. This was the course adopted in ex parte in which I do not entirely aòquiesce should Heard & Co. ́*

134, it is provided that after the Registra are to be registered.?lar to the former one

Rawlings on appeal, no doubt under dif: be specified. There is no evidence that it was not ferent circumstances, but we considered it Without deciding it is necessary to refer tion of Trust Deeds described in previous The whole burden of Mr John Heard's

This is the first esse presenting a

a great to this point because if the agreement was Sections, 169-108, the Debtor, certain letters, as well as the telegrams produced; voluntary and prima facie it was. The applicable in this case, t

entanglement of facts and much debated one of partnership and an account must be Creditors and Trustees do shall have the is securo Mours Baring & Co., uso clean deeds convey, or father dover all the re "The attempt was made and failed. It | Law in which we have sat in full Court, taken then to the extent of £30,000 minus benefit of and be liable to all the provisoredite," but execute mortgage to cover maini g interest of the debtors in the pro-was found fmpossible to show that the under our code. I think it a most inconveni the £7,000 more or less remitted-it inions of the Ord. in the same or like man bills drawn under them.

perty conveyed, and it cannot be doubted holders of current bills had assected, and sat and unadvisable proceeding. doubtful if there was any debt for which ner, as if the debtor had been adjudged a And all these instructions Mr A. F. that Mr Parker felt sure that a stoppage as I pointed out before, the provisions of. In this case onuses of delay have repeatedly the defendants ould prove in Bankruptcy Bankrupt, and the preditors had proved. Heard carried out in respect of the defend was imminent. Mr A. F. Heard Instrħets Seat, 170 made to meet this very emergency arisen, owing in part to the engagements of before an account had been taken and a and the Trustees had been appointed autolean credits. From the 25th to 30th Mr Parker to record the mortgages, had not been carried out.

macb and owing further to the fact that balanse found to be due in respect of which creditors assignces under such Bankruptcy, Jinuary be exhausted them. I have no and Mr J. Heard had before given Mr A. This deed therefore does not comply with exbibits d8 in number, besides the evidence their assente would count under the Deed But it has been derided with reference doubt, he prepared the desde of J'ab, 2nd F. Heard these instructions, when aus. the 2nd requisition of Bect. 108, and is not and the Law authorities from over I believe of Assignment

to Seut. 98 of the Ord. (Beck, 128 of 12 and and 24th to secure the defendants, whose pension inevitable record," Can it be a good dont under that Bent, as it was not 200 volumes an unprecedented number- If, on the other hand, it was merely an 13 Fist, Oh. 184) that gonroyances vold money he had used. He himself save so doubted that bankruptor was contemplated) proved that a majority of 4 in value of the to which we have been referred, having been wanted by sach of us at the same time fox advance, then on misapplication of the able under that Section must have been in the letter included in the sealed packet | with such a mass of debt stepension" creditors had assuntad.

andisturbed and connected consideration proceeds of the letters of orodis an imme made also in contemplation of Bankruptcy, containing the mortgage desds, and placed could only mean bankruptcy, or its equival diate debt might scorne; or as none of the Morgan Brandreth, & B, and A. 289. the matter beyond doubt, as it seems to me, end,

We have come to the conclusion, that it bila drawn under these credita wore adopt- Morenver Best 100 Ord. protects con- He says "I beg to recapitulate the steps wo Besides within two days the stoppage of

would have been advisable that this case od by the defendants until after the date of Teyances made bona fide to purchasers have taken to guard you from all possible Mesers Fearon & Co. in London was tele

should have been heard in the first instance by one: Judgo sitting alone, or by him with the registration of the deed of assignment without notice of a previous act of Bank lose from the use of your clean credits." graphed out here. The intimate business debt may have been created in futuro ruptcy, except conveyances and equit What can the mean hus bat these morte relations existing between that firm and

jury. We think this course would be or at any rate an inchoate liability, able mortgages made et given by any bank. Igages had been executed to proteor the Miseara Aur Heard & Ou, renders it

always prefurable; it is the usual course in This subject will be treated of at greater fupt by way of fraudulent preference. The defendant from lows in case of the failure of tremely difficult to believe that Mr A, F.

England though we recognise the gre length by and by.

result therefore 14 that, even if good under the firm | What were they to be svoured Hard did not kaam of the approaching

advantage to suitors that we should at in This affecte the question of the various the Statute of Elizabeth conveyances made against, if the drm contioued business? Tallurent Mesars Fearon & Co., which im

tall Court, and hear, and conier, and decide considerations for which the mortgage by way of fraudulent preference and le Whom were they to be secured against ex-piled necessarily their own failure, Ex. 308, and Johnson v. Osentou 88 LJ, a review in the cases in which any i deeds were given, as they are recited to contemplation of Bankruptcy will be volde dept other creditors in case of failure

Mr Parker says when Mears Fearon

gant party may appeal consist of pari debis and present advances, | able. "Newnham v. Stevenson, 20 L. G. That there may be no misapprehension stopped it became nedeniary for Aug and it was argued by the learded counsel P. 111. Were these deels then being made and that no larger share of blame than a Beard & Co. to stop tod: They were for the defendanta that the use of the two when the fem of Aug. Heard & do, was title tiny read on, MA, B. Heard, I think our agents in London, large amount of last credits, ratified by the defendants, hopelessly insolvent made for a good it right here to repeat what has been often bills were running on them amounted to a present advance which ouideration, and were they transactions said before that the term fraudolent pre- Mr Parker, who became partier on Feb. would support the more infirm conaldera bona fide made and entered into and not ference does not nodessarily imply an 1914, seems to have pined the Arm of tion of an antecedent debt.de by way of fraudulent preference nor in offence against either bonor or honesty, Aug. Heard & Co., whon in desperate dir The next question for consideration is contemplation of Bankruptcy. I have no The act impecched may be thoroughly sumstances from no prospect of advantage the legal effect of the manner in which the doubt that they were voluntary, There is moral and praiseworthy eat as to one'ers to himwolf, but from a geitorate will to

Is it then utterly void and valusless } It is a doed registered in Bankruptcy, and so by Seat, 105 is receivable in evidence and suures for the bonent of creditors ses wanting to fund og g

The cases of Seymour 6. George 33 LJ 981, confirmed in the Ex. Ch. 84 J.J. 187. Ex parte Atkinson LR, Fq. Vol. 2 p. 786 wulce pistes the apparantly contrary view held in Pearson. Pearson 11.B. Ex. To show that's deed though told under Best. 108 may come within the scope of Sect. 185, and so be within the operation of Nook, 167,

This deed is a perfectly good deed at Common Law, and I have come to the con clusion thác this is such a dead as comes under the operation of Best 187 and that the Trustees obtain under all the powers of Andigurye is: Hankrupt

liti

I now proceed to express my opinion on the several questions which appear to me të de voessary to be considered in order to lead to a decision of this ones.

In the very elaborate arguments to which we attentively listened many pointe werd raised; other important questions decurred to ne in discussions between ourselves.

The precise questions in this oneg egy metal