Covenants for payment of insurance premiums and production CHAPTER XIV. to the grantee of receipts for the same, are covenants "necessary Insurance. for the maintenance of the security" and valid (e). And it may be stipulated that, on the grantor's default, the grantee may insure, and that premiums paid by him with interest shall be repayable on demand, and until repaid shall be a charge on the property (d).

Where a bill of sale, given to secure money advanced by several creditors of a trader, contained stipulations that he should not during the continuance of the security obtain credit above a specified amount from any persons, except those creditors, without their consent, and that he would give them the greater part of his business, and keep proper books of account, and permit the grantees or their agent to inspect them: it was held, that the insertion of these stipulations avoided the bill of sale as not in accordance with the statutable form (e).

&c.

A covenant to pay rent, rates, taxes, &c., and to produce Rent, taxes, receipts, is good (ƒ). And it may be stipulated that, on the grantor's default, the grantee may make such payments to be repayable to him with interest on demand, and to be a charge on the property until repaid (g).

Bills of sale have been upheld containing agreements to re- Repairs, &c. place, or keep in repair, chattels which should become worn out, destroyed, injured, or deteriorated (); and that, on the grantor's default so to do, the grantee might replace or repair the chattels, and that moneys expended by him for such purposes should be repayable to him on demand with interest, and be a charge on the property till repaid (¿).

Such stipulations as above referred to for securing to the grantee the repayment of moneys expended by him, though they may be inserted by agreement between the parties, are not necessary for the maintenance of the security" within the meaning of sect. 7 of the Act of 1882; they are accordingly enforceable by action on the covenant, and will have their effect when a foreclosure or redemption comes to be worked out; but

(c) Duff v. Valentine, W. N. (1883) 225; Hammond v. Hocking, 12 Q. B. D. 291; Watkins v. Evans, 18 Q. B. D. 386, C. A.

(d) Exp. Stanford, Re Barber, 17 Q. B. D. 259, C. A.; Briggs v. Pike, 61 L. J. Q. B. 418.

(e) Peace v. Brookes, (1895) 2 Q. B. 451.

(f) Turner v. Culpan, 58 L. T.

340.

(g) Goldstrom v. Tallerman, 18 Q. B. D. 1, C. A.

(h) Consolidated Credit Corporation v. Gosney, 16 Q. B. D. 24; Furber v. Cobb, 18 Q. B. D. 494, C. A.; Seed v. Bradley, (1894) 1 Q. B. 319, C. A.

(i) Topley v. Crosbie, 20 Q. B. D.

CHAPTER XIV.

Covenants

for title.

Powers of seizure and sale.

any attempt to extend to a breach of such stipulations the power of seizure given by that section will be fatal to a bill of sale (k).

An unqualified covenant not to remove the chattels from the premises without the consent of the grantee is good (1). And it would seem that such a covenant, as well as a covenant to produce receipts for rent, taxes, &c., are to be deemed covenants necessary for the maintenance of the security, so that a breach of such covenants will render the chattels assigned liable to seizure under sect. 7 of the Act of 1882 (m).

It has been seen that the grantor must not be made to convey as beneficial owner," thereby attempting to import into a bill of sale the full statutory covenants for title, including the covenant for immediate possession by the grantee on default, and quiet enjoyment thereafter (n). But it has been held that an express covenant for further assurance at the cost of the grantor, in the usual form, binding the grantor and all persons claiming through or under him, was a covenant "for the maintenance of the security," and consequently free from objection (o).

The events, upon the happening of which the chattels assigned by a bill of sale are liable to be seized or taken possession of by the grantee, have been already considered (p).

Upon the happening of any of these events, and after reasonable notice to the grantor, the grantee of a valid bill of sale may, though the bill contains no express power of seizure or sale, seize and take possession of the chattels, and after the expiration of five clear days thereafter remove and sell them, subject to the grantor's right to redeem them at any time before actual sale (g).

It seems to be settled, after some difference of judicial opinion (7), that the statutory powers of the Conveyancing Act, 1881, ss. 19-21, as to powers of sale, are not incorporated into the statutable form of a bill of sale given by the Bills of Sale Act, 1882 (r).

There is no objection to the insertion in a bill of sale of an

(k) Bianchi v. Offord, 17 Q. B. D. 484, Bowen, L. J.; Real and Personal Advance Co. v. Clears, 20 Q. B. D. 304, C. A.

(1) See ante, p. 224.

(m) Furber v. Cobb, 18 Q. B. D. 494, C. A., at pp. 505, 506.

(n) See ante, p. 220.

(0) Re Cleaver, Exp. Rawlings, 18 Q. B. D. 489, C. A.

(P) Sect. 7 of the Act of 1882, ante, p. 220.

(9) Exp. Official Receiver, Re Morritt, 18 Q. B. D. 222, C. A.; Watkins v. Evans, 18 Q. B. D. 386, C. A.

(r) Calvert v. Thomas, 19 Q. B. D. 204, C. A.

express power to seize and sell the assigned chattels, provided CHAPTER XIV. that the terms of the power are not calculated to mislead the grantor or to alter the legal rights of the parties (s).

An express power may be given to the grantee to "sell the goods by private treaty or public auction on or off the premises" (t).

A power to sell on default in payment " on demand” (u), or within a specified time after demand (v), is bad.

The following provisions contained in express powers of

seizure and sale have been held to vitiate bills of sale :

That the power should be exerciseable "if the mortgagor should take the benefit of any Bankruptcy Act," as conferring a power to seize in the event of the mortgagor effecting a composition under the Bankruptcy Act, 1883 (x).

That the grantee might have the goods valued, and purchase them at such valuation (y).

That the purchaser should not be bound to see or inquire whether any default had occurred in payment of the sums secured (~).

That after payment of the sums secured, the bill of sale and other documents relating to the loan should remain in the custody and be the property of the grantee (a).

That the grantee may retain out of the proceeds of sale his commission as auctioneer, as though he were selling on behalf of the grantor (b); or "the expenses attending such sale, or otherwise incurred in relation to the security" (c); or all expenses to which the grantor "might be put "(d). But the power may provide that the grantee may retain the costs of entry, of discharging distresses, executions, or incumbrances, of seizure, keeping possession, removal, warehousing, and sale (e). Power to seize forcibly will not avoid a bill of sale (f). The omission from a bill of sale of any reference to the Proviso limiting right viso given in the statutable form that the goods shall not be of seizure.

(s) Exp. Official Receiver, Re Morritt, 18 Q. B. D. 222, C. A.; Briggs v. Pike, 61 L. J. Q. B. 418; 66 L. T. 637. (t) Bourne v. Wall, 64 L. T. 530. (u) Hetherington v. Groome, 13 Q. B. D. 789, C. A.

(e) Sibley v. Higgs, 15 Q. B. D. 619. (x) Gilroy v. Bowey, 59 L. T. 223. (y) Lyon v. Morris, 19 Q. B. D. 139, C. A.

(2) Blaiberg v. Beckett, 18 Q. B. D. 96, C. A., following Blaiberg v. Parsons, 17 Q. B. D. 336.

pro

CHAPTER XIV. liable to seizure for any cause other than those specified in sect. 7 of the Act of 1882, would apparently vitiate the bill (g).

Attestation clause.

Defeasance, condition or

trust to be

But the statutable proviso need not be inserted in so many words, if the effect of the words used is substantially the same (h).

The insertion of the proviso will not render a bill of sale valid, if the bill contains other provisions which are inconsistent with the provisions of the Bills of Sale Acts (i).

A bill of sale will be void as not in accordance with the statutable form, if it does not state not only the name and address, but also the correct description of the occupation or style of the attesting witness (j).

xiii.-Defeasances, Conditions, and Declarations of Trust.Sect. 10, sub-s. (3), of the Act of 1878, enacts as follows:

"If the bill of sale is made or given subject to any defeasance or condition, or declaration of trust not contained in the body declaration of thereof, such defeasance, 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 copy filed under this Act therewith and as part thereof, otherwise the registration shall be void."

deemed part of bill of sale.

Meaning of "defeasance."

A defeasance is a collateral deed made at the same time as the grant, containing certain conditions, upon the performance of which the estate created by such grant may be defeated. It differs from a condition in this respect, that a condition is inserted in the deed by which the estate is created. A defeasance is a separate deed executed at the same time (k).

Where a bill of sale and a mortgage of certain reversionary interests were given on the same day to secure the same debt, and by the bill of sale simple interest was made payable by instalments, but by the mortgage compound interest was made payable by instalments on the same day as those mentioned in the bill of sale, it was held, that the condition in the mortgage operated as a defeasance of the bill of sale within sub-s. (3) of sect. 10, and that the registration of the bill was consequently void (7).

So the giving of a bill of exchange, promissory note, or other

(g) Thomas v. Kelly, 13 App. Cas. 506, at p. 519, per Lord Macnaghten. (h) Exp. Allam, Re Munday, 14 Q. B. D. 43; Cartwright v. Regan, (1895) 1 Q. B. 900.

(i) Re Williams, Exp. Pearce, 25 Ch. D. 656. See Barr v. Kingsford, 56 L. T. 861.

(j) Sims v. Trollope, (1897) 1 Q. B. 24, C. A. As to description, see post, P. 248.

(k) Cruise, Digest, tit. xxxii. c. vii.

s. 25.

(1) Edwards v. Marcus, (1894) 1 Q. B. 587. See Ellis v. Wright, 76 L. T.

522.

instrument by way of collateral security for a debt secured by CHAPTER XIV. a bill of sale, will operate as a defeasance and vitiate the registration if such collateral instrument is in any respect inconsistent with the provisions of the Bills of Sale Acts, or with the terms of the particular bill, or in any way tends to alter the rights of the parties (m).

But a promissory note so given is not of itself avoided (n).

Nor

Similarly, all the covenants and conditions of the contract Conditions. must be set out in the bill of sale itself or on the same paper as the bill, and not incorporated by reference to another instrument specifically (0), or to other instruments generally (p). will the omission of such reference save from avoidance a bill, though framed in strict accordance with the statutable form, if the evidence shows that the bill is dependent for its real effect on some other instrument (q).

A collateral agreement as to the application of the consideration money is not necessarily a defeasance, condition, or declaration of trust within the meaning of this enactment (›').

A parol agreement for payment of the debt by instalments must be inserted in the bill of sale (s); but a memorandum explaining a charge in the bill of sale for bonus and interest, is not within the Acts (t).

Nor a collateral agreement that the grantee shall, in the first place, resort for payment to securities other than the bill of sale (u).

Nor an agreement not to register in consideration of a bonus (x). The agreement in the case referred to was by parol; and it would seem that a parol agreement cannot be a defeasance (y).

Nor the deposit with the grantee of a policy of assurance on the life of the grantor by way of collateral security (≈).

The declaration of trust referred to in sect. 2 of the Act of Declaration 1854, and sect. 10 of the Act of 1878, does not apply to a trust of trust. declared in favour of a third party; the defeasance, condition or

(m) Simpson v. Charing Cross Bank, 34 W. R. 568; Counsell v. London and Westminster Loan and Discount Co., 19 Q. B. D. 512, C. A.; Orm v. Fisher, 5 T. L. R. 504.

(n) Monetary Advance Co. v. Cater, 20 Q. B. D. 785.

(0) Lee v. Barnes, 17 Q. B. D. 77. (p) Watson v. Strickland, 19 Q. B. D. 391, C. A.

(1) Sharp v. M'Henry, 38 Ch. D. 427.

(r) Thomas v. Searles, (1891) 2 Q. B.