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The Bills of sale acts: with an epitome of the law as affected by the acts online

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out of the proceeds of the goods the amounts so paid ;^''^ and
an unregistered bill of sale holder who has paid off prior in-
cumbrances, which would have ranked against the estate, has
been held entitled to be recouped on his security being set aside
against the trustee under the grantor's liquidation ; <*^ but
such a payment must be made in good faith, and if for the
purpose of securing the property for the debtor's benefit,
will not be protected. ^-^

Although a bill of sale is not void under the Statute of
Elizabeth, or as an act of bankruptcy, the chattels it comprises
which at the commencement of the bankruptcy are in
the possession, order, or disposition of the grantor in his
trade or business, may pass to the trustee, if something has not
been done by the bill of sale holder to avoid the operation of
sec. 44 (2) <i") of the Bankruptcy Act, 1883.^^)

9. (1878.) Where a subsequent bill of sale is Avoidance of

, , , , certain

executed within or on the expiration of seven days successive

•^ •' bills of sale.

after the execution of a prior unregistered bill of sale,

(a) Exp. Cooper, re Zucco, L. R. 10 Ch. 510 ; 44 L. J. Bank. 121 ; 23 W. R. 782 ;
33 L. T. 3 ; see re Arnold, 9 Mor. 1 ; 40 W. R. 288 ; 66 L. T. 121.

(6) Exp. Brown, re Reed, 39 L. T. 338; 9 Ch. D. 389; 27 W. R. 219; 48 L.
J. Bank. 10.

(c) Wulff V. Jay, L. R. 7 Q. B. 756 ; 41 L. J. Q. B. 322 ; 27 L. T. 118 ; 19 W. R.
1112.

id) Exp. Mutton, re Cole, 41 L. J. Bank. 57 ; 14 Eq. 178 ; 20 W. R. 882 ; 26 L. T.
916.

(e) Exp. Harris, re James, 44 L. J. Bank. 31 ; 19 Eq. 253 ; 31 L. T. 21.

(/) Exp. Hall, re Tovmsend, 14 Ch. D. 132 ; 28 W. R. 556 ; 42 L. T. 162.

iff) See note to sec. 20 [1878], page 260.



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Sec. 9. 172 THE BILLS OF SALE ACT, 1878.

[1878.]

and comprises all or any 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 bonS, 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.

The section does not invalidate a subsequent bill of sale
executed more than seven days after the execution of a prior
unregistered bill of sale of the same chattels. ^"^
Successive bills Apart from the section a successive bill of sale will be
^ ^^ ®* avoided if obtained by fraud ; thus where the plaintiffs, who

had given the defendants a b;ll of sale, void under sec. 9
of the amendment Act, attended at their offices on request,
and being informed they must give a new bill of sale did so,
the Court held that the second bill of sale was obtained by a
trick and set it aside, finding the defendants meant the
plaintiffs to understand that unless they gave a new bill of
sale their furniture could be seized under the old one, which
as the defendants knew was bad under a decision with which
the plaintiffs were unacquainted.^*^

Under the repealed Acts, it was attempted to avoid the
necessity for registration by an agreement between the grantor
and grantee, made at the time of giving the bill of sale, to
give and accept successive bills of sale, the last only to be
registered ; and such an arrangement was good against execu-
tion creditors,^*' although void against a trustee in bank-
ruptcy,^**^ unless founded on a new consideration.^*^

(a) Garrard r. Meek, 29 W. R. 244 ; Wilson r. Watherspoon, 71 L. T. J. 280.
(6) Bouohette v. Consolidated Credit Corporation, 6 T. L. R. 653.

(c) Ramsden v. Lupton, L. R. 9 Q. B. 17 ; Smale v. Burr, L. R. 8 C. P. 64 ; 42
L. J. C. P. 70 ; 21 W. R. 193 ; 27 L. T. 555.

(d) Exp. Cohen, re Sparke, L. R. 7 Ch. 20; 41 L. J. Bank. 17 ; 25 L. T. 475 ; 20
W. R. 69 ; Stansfield v. Cnbitt, 27 L. J. Ch. 266 j 4 Jur. N. S. 80 : 2 D. & J. 222.

(e) Exp, Hall, re Jackson, 46 L. J. Bank. 39 ; 25 W. R. 382 ; 36 L. T. 947 ; 4 Ch.
D. 682; exp, Harris, re Pulling, 42 L. J. Bank. 9; 21 W. R. 44; 27 L. T. 501 ;
L. R. 8 Oh. 48.



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THE BILLS OP SALE ACTS, 1878 AND 1882. 173 SeC. 9.

[1878 ]
The giving of each successive bill of sale in substitution, See. 9.
was held to annul and cancel the deed that stood earlier in the [1882.]
series ;^*^ but it would seem that the mere cancellation of a Bacoessive bills
bill of sale does not revest any property in the goods in the ** ** ®-
mortgagor, if the cancellation is with the view of obtaining a
better security, unless there is an intention to release ;<*^
thus a bill of sale given after the grantor was adjudged
bankrupt, in substitution for an earlier bill of sale, the
grantee not knowing of the bankruptcy, was held not
to affect the grantee's title under the first deed, the
second having been taken under a mistake of fact ; <*> and
where the grantor having executed a bill of sale, subsequently
gave the mortgagee another bill of sale over the same goods
for the same debt, reciting that it was given on account of
doubts as to the validity of the first deed, it was held that the
second bill of sale must be deemed to have been intended only
to be effectual in the event of the first being invalid, and did
not therefore cancel it.^^* But if it is found that the intention
of the parties by the new deed was to put an end to the old,
there cannot be implied a condition that the second deed shall
be valid, and although void the first deed cannot be relied on.^'^

9. (1882.) A bill of sale made or given by way of J^j^^'^"^^^
security for the payment of money by the gmntor
thereof shall be void unless made in accordance with
the form in the schedule to this Act annexed.

This provision has been a fruitful source of litigation ; and
has proved fatal to the validity of many bills of sale.^

The section is intended to make void absolutely, and not
merely against all but the grantor, every bill of sale given by
way of security for the payment of money by the grantor
unless made in accordance with the form in the schedule ;
and must be taken to have prohibited bills of sale to which
the form is not applicable;^) so that if the arrangement
between the parties cannot be made in accordance with the

(a) Bamsden v. Lupton, L. B. 9 Q. B. 17.
(ft) Gnmmer v. Adams, 13 L. J. Ex. 40.

(c) Exp. Hasluck, re Bargen [18M], 1 Q. B. 444 j 69 L. T. 763 ; 10 Mor. 301;
63 L. J. Q. B. 209.
(rf) Cooper V. Zeffert, 32 W. B. 402.
(c) Bresnovichr. Levison, 87 L. T. J. 37.
( f) Form, page 288.
(S) Thomas v. KeUy, 13 App. Cases 606.



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Sec. 9.
[1882.]



Form.



When security
divisible.



174 THE BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882.

form in the schedule, it cannot be made at all '/"^ the amend-
ment Act applying to every bill of sale given by way of
security for the payment of money by the grantor, whether
that money is lent or otherwise due or payable to the grantee,
for whatever reason the grantor binds himself to pay and
gives the bill of sale as security. ^*^ Thus a bill of sale, abso-
lute in form, but given by way of security for a loan, is
wholly void.^*'^

It would seem therefore that inventories of goods with
receipt attached, receipts, powers of attorney, licences to seize
and agreements conferring aright inequity to personal chattels,
which are declared bills of sale by sec. 4 of the principal Act,
will no longer be available as securities, for they cannot fulfil
the conditions prescribed by this section. But the docu-
ments which by sec. 6 of the principal Act shall be
deemed bills of sale, are not within this section, and need
not be in the scheduled form, though they are to be
treated as bills of sale for the purposes of registration
\mder sec. 8 of the amendment Act.^''^ By sec. 1, Bills
of Sale Act, 1890, instruments hyppthecating or declaring
trusts of certain imported goods during the interval between
the discharge of the goods from the ship in which they are
imported and their deposit in a warehouse or delivery to a
purchaser were not to be deemed bills of sale within the
meaning of sec. 9 ; but such instruments, when of the kind
mentioned in sec. 1, Bills of Sale Act, 1891, are now excluded
from the operation of the Acts.

The section avoids the bill of sale altogether, and not
merely as to the personal chattels comprised therein ; thus a
covenant contained in the bill of sale for payment of principal
and interest is also void;^*^ and a void bill of sale cannot
operate even as a licence to seize. ^-^

But under the apparent form of a single agreement or
covenant written on one piece of paper and sealed with one
seal, there may be several contracts or obligations, and
though one of these fall the others may be upheld ;<*^ thus
where a deed is a bill of sale of chattels personal, but

(a) Exp. Parsons, re Townsend, 16 Q. B. D. 632.

lb) Hughes v. Little, 18 Q. B. D. 32 ; 56 L. J. Q. B. 06 ; 35 W. E. 36 j 65 L. T. 476.

(c) Exp, Pinlay, re Linton, 10 Mor. 26d.

(d) Green v. Marsh [1892], 2 Q. B. 330.

(«) Davies o. Rees, 17 Q. B. D. 408, per Bowen, L.J.
(/) Griffin ». Union Deposit Bank, 3 T. L. R. 608.



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I



THE BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882. 175 Sec. 9.

[1882.]
includes a mortgage of chattels real, it may, though void as a
bill of sale, be valid in so far as it is a mortgage of chattels
real;^*^ and an agreement between landlord and tenant may-
be valid so far as relating to the tenancy, though conferring
a power of distress which is void under the Acts.^*^
So where personal chattels and other property are mort-
gaged by a deed not in accordance with the form in the
schedule to the Act, such deed, though void as to the personal
chattels, may be valid as to the other property, if it is pos-
sible to sever the security ; and a deed void as a bill of sale,
assigning the several chattels and things specifically
described in the schedule, was held good as to scheduled
articles which were excepted by sec. 6 of the principal Act
from the definition of personal chattels. <*> Again, an assign^
ment of a hire agreement for pianos was held severable from
a transfer, by the same instrument, of the pianos them-
selves.^*'^ But this rule will not give validity to a bill of sale
whereby things other than personal chattels are attempted
to be assigned ; and the Court refused to sever an assignment
of chattels real and personal so as to uphold the assignment
of personal chattels as a bill of sale in accordance with the
form.'*^

The object of the section has been said to be twofold — Object of the
first, that the borrower should understand the nature of the ^^ ° ^ °
security ; secondly, that a creditor on merely searching the
register should be able to understand the borrower's position,
without having to get legal assistance as to the meaning of
the security; for the Legislature intended that the loan of money
on the security of a bill of sale should be a simple transaction.
Every bill of sale must be substantially like the form in the
schedule; nothing substantial must be subtracted from it,
and nothing actually inconsistent may be added ;'-^^ for
though the section does not make every word of the form
imperative, it enacts not only what a bill of sale must contain,
but what it must not contain. ^^ No defect in form can be sup-
ported by the affidavit filed on registration or by extraneous

(a) Be O'Dwyer, 19 L. R. Ir. 19.
(6) Stevens v, Marston, 39 W. B. 129.

(e) Exp. Byrne, re Bardett, 20 Q. B. D. 310 ; re Bansha, &c., Co., 21 L. B. Ir.
181.
id) Exp, Mason, re Isaacson [1895], 1 Q. B. 333.
(«) Cochrane v, Entwistle, 25 Q. B. D. 116.

(/) Davis V, Burton, 11 Q. B. D. 637 ; 32 W. R. 423 ; 52 L. J. Q. B. 636.
(g) Thomas v, Kelly, 13 App. Cases 606.



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Sec. 9. 176 THE BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882.

[1882.]

evidence. <"^ But a bill of sale must be construed in the
same manner as any other document/*^ and is not necesearily
misleading because different tribunals fail to agree in the con-
struction to be given to it;^*'^ and if the scheduled form is
filled up according to the instructions given in the brackets,
then the bill of sale is in accordance with the form, whatever
may be the construction to be put upon it.^**^ So if on a true
construction of the whole bill of sale its meaning is plain, a
verbal omission will not avoid it; thus where in a bill of
sale to secure £70 with interest at a Is. in the £ per month, it
was stipulated that the grantor " will pay to the grantee the
principal sum aforesaid, together with the interest then due,
by monthly payments of seven," on a certain date in each
month, the Court held that, having regard to the amount of
monthly interest, the bill of sale could only be paid off if the
repayments were read as £7 per month, and that the omission
of any monetary denomination after the word " seven " was
not material. <*^

Exp. Stanford. A divergence becomes substantial or material which
is calculated to give the bill of sale a legal consequence or
effect, either greater or smaller than that which would attach
to it if drawn in the form which has been sanctioned, or if it
departs from the form in a manner calculated to mislead those
whom it is the object of the Statute to protect. If the instru-
ment as drawn would in virtue of either addition or omission
have any legal effect which either goes beyond or falls short
of that which would result from the statutory form, or, in
respect of such variance, would be reasonably calculated to
deceive those for whose benefit a statutory form is provided,
it will be void under the section, for whatever form the bill
of sale takes, the form adopted by it, in order to be valid, must
produce not merely the like effect, but the same effect — that is
to say, the legal effect, the whole legal effect, and nothing but
the legal effect which it would produce if cast in the exact
mould of the schedule. ^-^ And this being a test laid down by

(a) Bird v. Davey [1891], 1 Q. B. 29 ; 39 W. R. 40 ; 60 L. J. Q. B. 8 ; 63 L. T. 741.

(6) Weardale Coal and Iron Co. tj. Hodson [1894], 1 Q. B. 698 j 42 W. R. 424 ;
63 L. J. Q. B. 391 ; 70 L. T. 632.

(c) Hazlewood t>. ConsoUdated Credit Co., 63 L. T. 71; 26 Q. B. D. 666; 39
W. R. 54 ; 60 L. J. Q. B. 12.

id) Edwards v. Marston [1891], 1 Q. B. 228, per Lord Esher, M.R.

(«) Mourmand v, Le Clair [1903], 2 K. B. 217; 72 L. J. K. B. 406; 61 W. R.
689; 88L. T.738.

(/) Exp. Stanford, r* Barber, 17 Q. B. D. 259 ; 34 W. R. 507 ; 56 L. J. Q. B. 3
54 L. T. 894,



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THE BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882. 117 SeC. 9.

[1883.]

the fall Court of Appeal, is taken as qaalifying previous
decisions, and must in all cases be applied to determine the
validity of a bill of sale under the section, <«>

But the judgment in ex parte Stanford must be read with
reference to cases where the error in form is one relating to
the contract, and must not be taken as intended to lay down
a rule that nothing is a material departure from the form,
imless it alters the effect of the instrument : thus, it is matter
of substance that the attesting witness should be described
on the face of the instrument, which is void if such descrip-
tion is omitted ;^*^ and as the form provides for a description
of the grantee, the blank in the form must be filled up by a
description; thus, where the grantees were stated as the
" Staffordshire Financial Company, Limited," no other
description, nor any address being given, the bill of sale
was held void under the section. ^"^

It has also been decided that, whenever part of the con-
sideration is a present advance, it is essential that the bill of
sale should contain an acknowledgment of the receipt of that
advance ; and that a bill of sale omitting a statement that the
grantor thereby acknowledges the receipt of the sum paid is
not in accordance with the form in the schedule. ^''^

Therefore, although agreements for payment, insurance,
and such terms as are agreed upon for the maintenance or
defeasance of the security may be inserted, the statutory form
should be adhered to as closely as possible, every departure
being attended with risk ; for no agreement can be included
which does not reasonably come within the description given
in italics within the brackets of the form.^*^

It will be observed that the scheduled form permits the J^J^S *^^ °^
insertion of terms agreed on by the parties for the maintenance
or defeasance of the security, while one of the causes of seizure
mentioned in sec. 7 of the amendment Act is for default in
performance of any covenant or agreement contained in the
bill of sale, and necessary for maintaining the security. It
would thus seem that stipulations, if coupled with a power of
seizure on default in performance, must be not only for the

(a) KeUy v. KeUond, 20 Q. B. D. 5e0 ; 36 W. R. 363 ; 67 L, J. Q. B. 330.
(J) Parsons v. Brand, 26 Q. B. D. 110.

(c) Altree v. Altree [1898], 2 Q. B. 267 ; 78 L. T. 794 ; 47 W. R. 60 ; 6 Mans. 236.

(d) Davies v, Jenkins [1900], 1 Q. B. 133.

(«) Melville v. Stringer, 13 Q. B. D. 392 ; 63 L. J. Q. B. 482; 32 W. R. 890; 60
L. T. 774.



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Sec. 9. 178 THE BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882.

[1882.]

maintenance of, bub necessary for maintaining the security,
but that the bill of sale may also contain other terms agreed
on for the maintenalice or defeasance of the security, if no
right of seizure follows a breach, and the stipulations do not
contravene the provisions of the Act. It has, indeed, been
held that the insertion of terms agreed to by the parties for
maintaining the security, but which are not necessary for its
maintenance, will not avoid the deed if power is not given to
seize for a default in the performance of such terms.^"^

But the parties cannot insert agreed terms unless they are
for the maintenance or defeasance of the security, ^*^ and if a
stipulation is not necessary for the maintenance of the security
it cannot be made so by agreement of the parties. ^"^

Maintenance Maintenance of the security appears to mean, not the

o security. maintenance of a sufficient security less than that agreed to
be given, but the maintenance of the security created by the
bill of sale, and this is maintained only when the subject-
matter of the charge and the grantee's title to it are preserved
in as good a condition as at the date of the bill of sale.<*^

What is meant by the term " defeasance of the security "
is in strictness a condition in the nature of a defeasance, that
is, something which defeats the operation of the deed.^''^

But though some provisions for the maintenance of the
security may, in consequence of the general law applicable to
contracts, not be capable of enforcement, their mere intro-
duction will not necessarily invalidate the deed, unless
contrary to some express provision of the Act, though they
may be invalid and superfluous. ^'^ Nor will the deed be avoided
by mere verbal deviations from the statutory form which do
not alter its legal effect ; thus a bill of sale has been supported
containing recitals, referring to the parties as mortgagor and
mortgagee, and omitting the words " by way of security,*' the
recitals showing that to have been the object of the deed.^

A grantor cannot, however, convey or assign as beneficial
owner, the introduction of those words being an attempt to

(a) Topley tj. Corsbie, 20 Q. B. D. 350; 57 L. J. Q. B. 271 ; 58 L. T. 342 ; 36
W. R. 352.

(b) Blaiberg v. Beckett, 18 Q. B. D. 96; 35 W. R. 34 ; 66 L. J. Q. B. 36 ; 56
L. T. 876.

(c) Fnrber v. Cobb, 18 Q. B. D. 494; 56 L. T. 689 ; 35 W. R. 398.

(d) Blaiberg v. Beckett, 18 Q. B. D. 96; 35 W. R. 34; 56 L. J. Q. B. 36.
(«) Exp. Official Receiver, re Morritt, 18 Q. B. D: 222 ; 35 W; R. 277.

(/) Roberts v. Roberts, 13 Q. B. D. 794.



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THE BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882. 179 SeC. 9.

[1883.]
incorporate the covenants in sec. 7, Conveyancing Act, 1881,
including the covenant for quiet enjoyment contained in that
section, which is inconsistent with sec. 13 of the amendment
Act.t-)

If a bill of sale contains two sets of clauses which, even if AmbiRuity in
producing the same legal result, are expressed in different ^^^ '**^®*
words, so as to make their interpretation a puzzle to any one
who reads them, they make the bill of sale invalid, as being
calculated to mislead ; as for instance where powers of seizure
are given wider than permitted by sec. 7, and are then
attempted to be limited by the statutory proviso.''*^ And the
result will be the same if the agreements are so ambiguous
as to be misleading ; thus a bill of sale was avoided which
contained terms for payment of principal, including the
interest then due, by equal weekly payments, and from and
after default, to pay specified interest on the principal by
monthly payments as the principal money became due.^*'^

Nor can covenants be inserted to perform stipulations not
apparent on the face of the deed — for example, to perform the
covenants in a deed recited by the bill of sale;^*" or to pay
interest on mortgages affecting the premises where the goods
assigned then were, or to which they might be removed, even
though no right of seizure is given on breach. <') And the
deed must show the true agreement between the parties, and
should not be dependent for its real effect on some other
document ; thus, a bill of sale given under and subject to a
contract for payment of compound interest was held void
through embodying only such part of the bargain as could
properly be included in a bill of sale.i^^

It has also been decided that if a bill of sale, proper in form, Defeasance of
is accompanied by another document containing clauses not ^ ® security.
allowed by the Acts, and the whole conditions of the transac-
tion are to be gathered from the effect of the two documents,
the bill of sale is void ; as where with a bill of sale to secure
£200, payable by instalments, was given a promissory note for
£280, also payable by instalments, providing that on failure to
pay any instalment the whole balance should at once become

(a) Sxp. Stanford, re Barber, 17 Q. B. D. 259.

(J) Furber v, Cobb, 18 Q. B. D. 494.

(«) Curtis V, National Bank of Wales, 5 T. L. R. 338.

id) Lee v. Barnes, 17 Q. B. D. 77 ; 34 W. R. 640.

(«) Watson r. Strickland, 19 Q. B. D. 391 ; 35 W. R. 769 ; 56 L. J. Q. B. 594.

(J) Sharp V. McHenry, 38 Ch. D. 427 ; 57 L. J. Ch. 961 ; 57 L. T. 606.

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Sec. 9. 180 THE BILLS OF SALE ACT (1878) AMENDMENT ACT, 1882.
[1882.]

due,<«^ although it would seem that this decision is best
supported under sec. 10, sub-sec. 3 of the principal Act.''*^ A
promissory note so given is not avoidedy and the amount
secured by it may be recovered, even though the bill of sale is
held void. <*)
Parties. Qne characteristic of the form is that the name of the

grantee must be given, but, although some description
must be stated, ^''^ no particular description is enforced by
the Act ; and if the name or description inserted is such
as, without the aid of extrinsic evidence, would in the
case of any mercantile instrument be sufficient, the bill of
sale is not avoided by reason of some ambiguity in the de-
scription of the grantee. ^*^ So a bill of sale is not void under
the section for giving an address of the grantor where he doe&
not reside, if accompanied by an affidavit containing a true
description of his residence, there being no intention to mis-
lead and no one being misled. ^-^^

But the section deals only with the form of the bill of
sale ; thus, though the form provides for statement of con-
sideration, and for the insertion of agreements for defeasance
of the security, an untrue statement of consideration or, it
seems, the omission of a condition, would not make a bill of
sale, otherwise regular, not in accordance with the form.^^'

The Court has held void under the section a bill of sale
given by two persons, not jointly interested in any of the
goods assigned, each being the sole owner of part of them,
they and each of them making agreements for payment and



Online LibraryHerbert Reed Great BritainThe Bills of sale acts: with an epitome of the law as affected by the acts → online text (page 18 of 35)