Chap. XIV. construction of the instrument and to ascertain the real intention. § 2 (ii). of the parties. So it is conceived that, notwithstanding the recent decision of the House of Lords above referred to, the Court may, in accordance with the general rule as to the admissibility of parol evidence to explain a written contract (c), take into account the fact that the vendor has parted with the possession of his goods in the usual course of his particular trade, under what is known as the hire and purchase system (d); but if a private person, or a trader not in the ordinary course of his business, purports to sell the goods to another person and retains possession thereof, under an agreement whereby the purchaser purports to hire them to the vendor, the transaction is obviously open to suspicion, and, unless the terms of the instrument clearly show a contrary intention, the presumption will arise that its intention and effect is to create a security for a loan under the pretence of a hiring agreement, so as to render the instrument void under the Bills of Sale Act, 1882 (e), but the presumption may be rebutted (f).

Inventory accompanying hiring agreement.

Severability of subjectmatter.

Powers of attorney.

An inventory and receipt given together with a hiring agreement for the purpose of securing the money payable under the agreement is apparently within the mischief of the Acts (g).

Where the owner of a piano assigned by way of security for a loan the piano itself, and also the benefit of an agreement for hire and purchase of the same, it was held that the assignment was severable, and that though the deed was void as a bill of sale of the thing hired, it was valid as an assignment of the agreement (h).

The inclusion of "powers of attorney" in the definition of a bill of sale is intended to prevent instruments operating really as bills of sale from being framed in the form of powers of attorney, in order to evade the provisions of the Acts and escape the necessity of registration. It is clear that such instruments, if given by way of security for money, will be void as not being according to the statutable form, and there do not appear to be any reported decisions with regard to such documents.

(c) See Myers v. Sarl, 3 E. & E. 306. (d) Exp. Crawcour, Re Robertson, Ch. D. 419, C. A. See also Re Davis, Exp. Rawlings, 22 Q. B. D. 193, C. A.

(e) Exp. Odell, Re Walden, 10 Ch. D. 76; Beckett v. Tower Assets Co., (1891) 1 Q. B. 638, C. A.; Mellor's Trustee v. Maas, (1903) 1 K. B. 226.

(f) Exp. Collins, Re Yarrow, 59 L. J. Q. B. 18.

(g) French v. Bombernard, 60 L. T. 49. See Jones v. Tower Furnishing Co., 61 L. T. 84.

(h) Re Isaacson, Exp. Mason, (1895) 1 Q. B. 333, C. A.

Authorities or licences to seize chattels, if given on or after Chap. XIV. the 1st November, 1882, will be void for the same reason. § 2 (ii). Under the words "licence to take possession of chattels," a Licences to brewer's lease, with power to take possession of stock in trade seize. on non-payment of account current, is within the Act (i). A licence in a builder's contract to take possession on default, "as and for liquidated damages," is not within the words of the Act, "as security for any debt" (k); nor an agreement that all building and other materials brought by the builder upon the land shall become the property of the landowner (7).

But where a lessee assigned certain houses in the course of erection, and also all bricks and other building materials which might at any time thereafter be brought by or for the mortgagor into the premises for completing the buildings, it was held that the deed was void for want of registration as a bill of sale in respect of the personal chattels comprised therein (m).

A power in a mining lease for the lessor to distrain for rent on "adjoining" mines of the lessees is not within the mischief of the Acts (n).

As regards bills of sale made before the 1st November, 1882, a distinction has been taken between an assignment of future chattels and a mere power at any time to enter and seize them (o).

If there is a mere licence to seize, and no interest in, the future chattels, the licence cannot be exercised to the prejudice of any person who has obtained an interest in the chattels in the interval before seizure (p); but if such licence is bonâ fide exercised after, but without notice of, an act of bankruptcy and before adjudication, the seizure is a protected transaction under the bankrupt law (q).

Even under the Bills of Sale Act, 1854, an agreement for a Agreements to give bills bill of sale, if relied on as an equitable assignment of goods, of sale. required registration as a bill of sale under that Act (r). So,

(i) Exp. Hopcraft, Re Flavell, 14 W. R. 168. See Pulbrook v. Ashby, 56 L. J. Q. B. 376.

(k) Exp. Newitt, Re Garrud, 16 Ch. D. 522, C. A.; ante, p. 195.

(1) Blake v. Izard, 16 W. R. 108; Brown v. Bateman, L. R. 2 C. P. 272; Exp. Newitt, supra; Reeves v. Barlow, 12 Q. B. D. 436, C. A.; Re Weibking, Exp. Ward, (1902) 1 K. B. 713; ante, P. 195.

(m) Climpson v. Coles, 23 Q. B. D. 465. See Church v. Sage, 67 L. T. 800.

VOL. I.-C.

(n) Re Roundwood Coll. Co., Lee v. Roundwood Coll. Co., (1897) 1 Ch. 373, C. A.

(0) Carr v. Allatt, 27 L. J. Exch. 385; Reeve v. Whitmore, 33 L. J. Ch. 63; Brown v. Bateman, L. R. 2 C. P. 272, 284.

(p) Re Waugh, 4 Ch. D. 527.

(1) Exp. Newitt, 16 Ch. D. 522, C. A.

(r) Exp. Mackay, Re Jeavons, L. R. 8 Ch. 643.

Р

Chap. XIV. also, a memorandum in writing whereby debtors undertook to § 2 (ii). hold their stock in trade, present and future, at the disposal of a creditor and, whenever required by him so to do, to execute a valid transfer and assignment to him as a security for the debt (s).

A parol agreement to give a bill of sale is, of course, incapable of registration, and is not within sect. 4 of the Act of 1878 (t). Such an agreement is enforceable if the money has passed (u); but it will not prevail against the claims of creditors in the event of the borrower's bankruptcy or liquidation, or against a creditor who has levied execution; a formal bill of sale duly registered is necessary for that purpose (x). It would also seem that, if a written agreement is followed, immediately on the advance being made, and completion of the security, by a formal bill of sale pursuant to the agreement, such an agreement may be referred to as evidence of the good faith of the transaction, though not registered, nor in the statutable form (y).

In such a case, the agreement, though in writing, is not itself relied upon as giving any equitable right to a security, inasmuch as it is not enforceable in equity until the advance is actually made (z).

It would seem also that if a borrower agrees in writing to secure money advanced to him by a formal bill of sale, which is subsequently given accordingly, the fact that the agreement is not registered, nor according to the statutable form, will not affect the validity of the bill of sale, as it is conceived that the money will be deemed to have been advanced on the security of the bill, which will be treated as standing on the same footing as if it had been given at the time of the advance, according to the rule laid down in a case decided under the Act of 1854 (a).

But it is clear that, until a bill of sale has been given pursuant to an unregistered agreement in writing, the lender will have no security upon the goods for repayment of his money, as the instrument on which he relies as conferring on him a right

(s) Exp. Conning, Re Steele, L. R. 16 Eq. 414. See Exp. Montague, Re O'Brien, 1 Ch. D. 554, C. A.; Baghott v. Norman, 41 L. T. 787.

(t) Exp. Hauxwell, Re Hemingway, 23 Ch. D. 626, C. A.

(u) See ante, p. 59.

(x) Jarvis v. Jarvis, W. N. (1893) 138; 63 L. J. Ch. 10.

(y) Exp. Hauxwell, Re Hemingway, 23 Ch. D. 626, C. A.

(2) Rogers v. Challis, 27 Beav. 175. See ante, p. 57.

(a) Harris v. Rickett, 4 H. & N. 1. See Mercer v. Peterson, L. R. 3 Ex. 104; Exp. King, Re King, 2 Ch. D. 256, C. A.

in equity to a security will be a bill of sale within the meaning Chap. XIV, of the Acts, and therefore void (b).

§ 2 (ii). It has been held that the expression, in sect. 4 of the Act of Agreement 1878, "any agreement by which a right in equity to any per- securing right in equity. sonal chattels or to any charge or security thereon shall be secured," is to be strictly construed, and accordingly that the expression does not include documents which do not confer an equitable right, but a right at law only (c).

So, where an owner of goods which had been seized under a fi. fa., agreed verbally with the auctioneer that, in consideration of his paying out the sheriff, the auctioneer should hold the goods and sell them, and pay the surplus of the proceeds to the owner; the sheriff was paid out and the man in possession remained in possession on behalf of the auctioneer in accordance with the terms of the agreement, which were then reduced to writing; it was held that, inasmuch as the agreement was not intended to operate, and did not operate, till the possession had passed from the sheriff to the auctioneer, and as the agreement did not constitute the title of the latter, the document was not a bill of sale within the meaning of the Acts (d).

By sect. 6 of the Act of 1878, it is enacted as follows:

powers of

"Every attornment, instrument or agreement not being a mining Certain lease, whereby a power of distress is given or agreed to be given instruments by any person to any other person by way of security for any giving present, future or contingent debt or advance, and whereby any distress to be rent is reserved or made payable as a mode of providing for the subject to payment of interest on such debt or advance, or otherwise for the this Act. purpose of such security only, shall be deemed to be a bill of sale, within the meaning of the Act, of any personal chattels which may be seized or taken under such power of distress. Provided that nothing in that section shall extend to any mortgage of any estate or interest in any land, tenement or hereditament which the mortgagee, being in possession, shall have demised to the mortgagor as his tenant, at a fair and reasonable rent."

The effect of this section in invalidating clauses of attornment Attornment by the mortgagor to the mortgagee, and powers of distress in clause. mortgages of land, will be considered in a subsequent chapter (e).

(b) Edwards v. Edwards, 2 Ch. D. 291.

(c) Reeves v. Barlow, 12 Q. B. D. 436; Exp. Hubbard, Re Hardwick, 17

Q. B. D. 690, C. A.; Morris v. De-
lobbel-Flipo, (1892) 2 Ch. 352.

(d) Charlesworth v. Mills, (1892) A. C.

231.

(e) Post, Chap. XXXVI.

Chap. XIV.

§ 2 (iii). Exclusion of

certain instruments from interpretation of term "bill of sale."

Assignments for creditors.

Marriage settlements.

Transfers or

iii.-What Instruments are not "Bills of Sale" within the Acts.-By sect. 4 of the Act of 1878 (which in this respect is identical with sect. 7 of the Act of 1854), it is enacted that the expression "bill of sale" shall not include the following documents:

66

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 authorizing, or purporting to authorize, either by indorsement or delivery, the possessor of such document to transfer or receive goods thereby represented."

Assignments for the benefit of creditors must, in order to fall within the exception, be for the equal benefit of all the creditors, though it need not be executed by all (ƒ). An assignment for the benefit of all creditors who shall elect to execute the same is an assignment for the benefit of all (g). And a proviso that no creditor shall benefit who shall not assent to the deed within a fixed time will not prevent the deed from falling within the exception (h).

By the Deeds of Arrangement Acts, 1887 and 1890 (i), deeds of arrangement, as defined by the former Act, for the benefit of creditors generally must be registered at the time and in manner thereby prescribed, or will be void. Deeds of arrangement affecting land must be registered under the Land Charges Registration and Searches Act, 1888 (k).

The exception in favour of "marriage settlements" extends to agreements for settlements made in contemplation of marriage, though informal and not under seal (7); but not post-nuptial settlements, unless made pursuant to such agreements (m). This exception extends to transfers, &c. of ships and vessels,

(f) General Furnishing, &c. Co. v.
Venn, 2 H. & C. 153; Johnson v.
Osenton, L. R. 4 Ex. 108; Exp. Viney,
Re Adamson, 2 Mans. 153. See Exp.
Parsons, Re Townsend, 16 Q. B. D. 532,
C. A.

(g) Paine v. Matthews, 53 L. T. 872.
(h) Hadley & Son v. Beedom, (1895) 1
Q. B. 646.

(i) 50 & 51 Vict. c. 57; 53 & 54 Vict. c. 24.

(k) 51 & 52 Vict. c. 51, ss. 7-9. (1) Wenman v. Lyon, (1891) 2 Q. B. 192, C. A.

(m) Fowler v. Foster, 5 H. & C. 99 ; Ashton v. Blackshaw, L. R. 9 Eq. 518. See Erp. Cox, Re Reed, 1 Ch. D. 302.