CHAPTER XIV. Meaning of "consideration." Bill of sale under 301. to be void. consideration in respect of a debt then due or to accrue due (ƒ). But not so if the grantor hands back money under pressure (g). A collateral agreement for the application of the money need not be stated, nor are recitals of the object and motive required (). The word "consideration" means that which is in law the consideration for the giving of the instrument, not the sum secured by it (i). The consideration was held to be truly stated to be money lent, though it was a balance due on a statement of account (). So, where the consideration was stated to be 4007. paid, although 2007. of it had been paid a few days before (1). So, where a bill of sale purported to be given in consideration of "1,5007. now paid," but in fact the amount had been previously advanced and paid to the grantor on the security of a bill which was discovered, before registration, not to be in conformity with the Bills of Sale Acts, and which was accordingly cancelled, the consideration for the bill was held to be truly stated (m). An agreement not to register, whereby the bonus was increased, is no part of the consideration, nor is it a condition or defeasance (n). In a bill of sale given by a purchaser to a vendor to secure the balance of purchase-money, the statement of the consideration as cash paid was held sufficient (o). A bill of sale stated the consideration to be in order to induce the grantee not to institute proceedings against him. No proceedings had been threatened; the consideration was held to be sufficiently stated (p). So, where the consideration was stated to be in part a covenant by the grantees, and no such covenant was contained in the bill of sale (g). By sect. 12 of the Act of 1882, "every bill of sale made or given in consideration of any sum under 307. shall be void." (f) Richardson v. Harris, 22 Q. B. D. 268, C. A.; Cochrane v. Dixon, 3 T. L. R. 717. (g) Bishop v. Consolidated Credit Cor- (h) Exp. National Mercantile Bank, (i)_Exp. Challinor, Re Rogers, 16 (k) Credit Co. v. Pott, 6 Q. B. D. 295, C. A. (1) Exp. Johnson, Re Chapman, 26 Ch. D. 338. (m) Exp. Allam, Re Munday, 14 Q. B. D. 43. See Exp. Nelson, Re Hockaday, W. N. (1887) 7, C. A. (n) Exp. Popplewell, Re Storey, 21 Ch. D. 73, C. A. (0) Exp. Bolland, Re Roper, 21 Ch. D. 543, C. A. (p) Re Fothergill, 29 W. R. 575, C. A. (2) Roberts v. Roberts, 13 Q. B. D. 794, C. A. xii.-Form of Bill of Sale under the Act of 1882.-By sect. 9 CHAPTER XIV. of this Act it is enacted that "A bill of sale made or given by way of security for the pay- Form of bill ment of money by the grantor thereof shall be void unless made of sale. in accordance with the form in the schedule to this Act annexed." not in accord ance with form avoided. Although this section does not make imperative a literal con- Bills of sale formity with the statutable form, it enacts not only what a bill of sale must contain, but also what it must not contain, and statutable, renders void any bill which departs from the form in any material and substantial particular (»). The result is, that all bills of sale given as security for money are prohibited to which the statutable form is inappropriate (s). And, accordingly, licences to seize goods, inventions, receipts, powers of attorney, and other instruments falling within the definition of a "bill of sale" given by sect. 4 of the Act of 1878 (t), but incapable from their nature of being framed so as to be "in accordance with" the statutable form, are no longer available as securities for money (u). If a bill of sale is not in accordance with the statutable form, the defect cannot be remedied by statements in the affidavit filed on the registration, or by other evidence (→). way of It makes no difference whether the money sought to be Bill of sale by secured is payable by the grantor in respect of a loan or of indemnity to any other transaction; as, for instance, where a bill of sale is surety. given to secure any moneys which the grantee may be called on to pay in respect of a guarantee given at the request of the grantor (y). avoidance. A bill of sale which does not conform to the requirements of Extent of this section is void as against all persons, including the grantor himself (). It is also void and altogether inoperative, not merely as regards the personal chattels comprised therein, but as to every part thereof, so that a covenant contained in it for payment of principal and interest thereon intended to be secured upon the chattels is also rendered void (a). (r) Thomas v. Kelly, 13 App. Cas. 506. See also Exp. Stanford, Re Barber, 17 Q. B. D. 259, C. A.; Kelly v. Kellond, 20 Q. B. D. 569, C. A. (*) Thomas v. Kelly, sup. at p. 511, per Lord Halsbury, C. (t) See ante, p. 201. (u) Exp. Parsons, Re Townsend, 16 Q. B. D. 532, C. A. (x) Bird v. Davey, (1891) 1 Q. B. 29, CHAPTER XIV. Statement of sum secured. Interest. Specific description means description with such particularity as is used in a business inventory of chattels (9). If the specific description of the chattels contained in such schedule is sufficient for identification of the chattels, reference in the schedule to an unregistered catalogue will not restrict the description so as to avoid the bill (). The omission to state in the schedule the place where the chattels are located has been held not to vitiate the bill (s). An attempt to include in the assignment after-acquired chattels, additional to (t), or substitutional for (u), specific chattels assigned, will vitiate the bill. The question as to including in the assignment other property not being "personal chattels " has been already noticed (x). The insertion of the words "by way of security" amongst the operative words of assignment is apparently not essential (y). The principal amount secured must be stated as a definite sum to be payable at a definite time, and consequently a bill of sale cannot be made to cover further advances of an uncertain amount which may or may not be made (). So a bill of sale cannot be given by way of indemnity against liability on a guarantee under which no sum may ever become payable, or if the amount payable and the time at which the liability will commence and require to be satisfied are uncertain (a). The rate of interest may be such as agreed upon between the parties, however high, and even unreasonable (b); but it must be rateable, and calculated up to the time when the principal is to be called in (c). And, consequently, an attempt to make a bill of sale secure capitalized interest will vitiate the bill (). The rate of interest chargeable on the loan must be specified (e). But the statutable form does not restrict the rate of (a) Carpenter v. Deen, 23 Q. B. D. 566, C. A. (r) Davidson v. Carlton Bank, (1893) 1 Q. B. 82, C. A. (s) Exp. Hill, Re Lane, 17 Q. B. D. 74. (t) Thomas v. Kelly, 13 App. Cas. 506, overruling on this point Roberts v. Roberts, 13 Q. B. D. 794, C. A.; Crosser v. Maxwell, W. N. (1885) 95, C. A. (u) Hadden v. Oppenheim, 60 L. T. 462, Q. B. D. See Levy v. Polack, W. N. (1885) 76, Q. B. D. 794, C. A. (z) Cook v. Taylor, 3 T. L. R. 800. (a) Hughes v. Little, 18 Q. B. D. 32, C. A.; Re Hill, Exp. Off. Rec., 2 Mans. 208. (b) Exp. Stanford, Re Barber, 17 Q. B. D. 259, C. A. See at p. 263, per Lord Esher, M. R. (c) Davis v. Burton, 11 Q. B. D. 537, C. A. See Haslewood v. Consolidated Credit Co., 25 Q. B. D. 555, C. A. (d) Davis v. Burton, supra. (e) Blankenstein v. Robertson, 24 Q. B. D. 543. But see Wilson v. Kirkwood, W. N. (1883) 40. interest to a rate per cent. or per annum, and the rate may be CHAPTER XIV. specified as "one shilling in the pound per month," or otherwise as agreed (ƒ). The statement of a lump sum as payable for interest is not sufficient compliance with the form (g). It would seem doubtful whether a provision for the payment Bonus. of a bonus can be included in the security of a bill of sale; at all events a bill will be void, unless the amount sought to be made payable by way of bonus is distinctly specified as such (h). The principal and interest are to be repayable by instalments. Instalments. Indeed, it has been said that the interest is an essential part of the instalments made payable according to the form so as to give effect to a bill of sale, and that the instalments must comprehend not only the principal sum but the interest (i). But the equality of instalments is merely directory, not obligatory, and a bill of sale may be valid although the sum lent, together with interest, is made payable at specified times by unequal instalments (j). So, also, it is sufficient if a bill of sale provides for payment of principal and interest by equal instalments "until the whole shall be paid,” the first payment to be made on a specified date, as the number of instalments and the time for payment of the last instalment can be ascertained by calculation (k). And a bill of sale will not be avoided because the principal and interest cannot be exactly paid by instalments of the amounts specified (1). Certainty in the time of payment is essential. So a bill of Covenant for sale will be invalid if it contains a covenant to pay the sum ad- payment of principal and vanced and interest on demand (m), or within a specified time interest. after demand (»), even though it be provided that such demand shall not be made before a specified time (o). The absence of a covenant for payment vitiates a bill of sale (p). (f) Lumley v. Simmons, 34 Ch. D. 698, C. A. (g) Blankenstein v. Robertson, 24 Q. B. D. 543. See Myers v. Elliott, 16 Q. B. D. 526, C. A.; Exp. Abraham, Re Johnstone, 50 L. T. 184; Macey v. Gilbert, W. N. (1888) 111. (h) Davis v. Burton, 11 Q. B. D. 537, C. A.; Myers v. Elliott, sup. ; Re Williams, Exp. Pearce, 25 Ch. D. 656; Simmons v. Woodward, (1892) A. C. 100. (i) Per Lord Halsbury in Simmons v. Woodward, (1892) A. C. 100, at p. 107. (j) Goldstrom v. Tallerman, 18 Q. B. D. 1, C. A.; Re Cleaver, Exp. Raw lings, 18 Q. B. D. 489. See Simmons (k) Re Bargen, Exp. Hasluck, (1894) (1) Linfoot v. Pockett, (1895) 2 Ch. (m) Hetherington v. Groome, 13 Q. B. (n) Bishop v. Beale, 1 T. L. R. 140; 51. CHAPTER XIV. Maintenance and de feasance of It has been held that the time for payment may be fixed by reference to the happening of a specified event (9). But the time must be stated with reference to an event which may never happen (»). There is no objection to a stipulation that, in case of default of payment of an instalment of principal and interest, the whole of the debt shall forthwith become payable (s). It is not necessary that the principal and interest should be made payable together. The payment of principal may be postponed until the interest has been paid (t), and vice versâ (u). Where a bill of sale contained a covenant to pay the amount by equal yearly instalments, and also a covenant to pay interest on "the said sum" at a specified rate quarterly, it was held, that the covenant as to payment of interest referred to the amount of principal owing for the time being after some of the instalments had been paid, and, consequently, that the bill of sale was in accordance with the statutory form (x). The principal, with rateable interest, may be made payable in a single sum on a fixed date instead of by instalments, with (y) or without (≈) a proviso that, if the grantor should not break any of the covenants nor become bankrupt, and should pay the principal and interest by equal monthly instalments on specified days, the grantee should accept payment by such instalments. So, the principal may be made payable by specified instalments together with rateable interest on the instalments for the time being remaining unpaid (a). The statutable form permits the insertion of terms as to insurance, payment of rent, or otherwise, which the parties may the security. agree to for the maintenance or defeasance of the security." Such terms must be such as are necessary for the purposes referred to, in order to be enforceable by seizure of the goods under sect. 7 of the Act of 1882. Agreement between the parties will not make a stipulation "necessary" if it is not so (). (a) Grannell v. Monck, 24 L. R. Ir. 241; Bianchi v. Offord, 17 Q. B. D. 484, at p. 487, per Bowen, L. J. (r) Hughes v. Little, 18 Q. B. D. 32, C. A. (s) Exp. Cochrane, Re Sendall, 26 W. R. 818; Lumley v. Simmons, 34 Ch. D. 698, C. A. (t) Edwards v. Marston, (1891) 1 Q. B. D. 225, C. A. (u) Goldstrom v. Tallerman, 18 Q. B. D. 1, C. A.; Re Cleaver, Exp. Raw lings, 18 Q. B. D. 489, C. A. (x) Weardale Coal and Iron Co. v. Hodson, (1894) 1 Q. B. 598, C. A. (y) Watkins v. Evans, 18 Q. B. D. 386, C. A. (z) Exp. Payne, Re Cooke, 56 L. T. 571; 35 W. R. 476. See Re Cleaver, Exp. Rawlings, 18 Q. B. D. 489, C. A. (a) Haslewood v. Consolidated Credit Co., 25 Q. B. D. 555, C. A. (b) Furber v. Cobb, 18 Q. B. D. 494, C. A. |