The Dorset County Express and Agricultural Gazette.
Dorchester, Dorset, England, 1881-08-16 00:00:00

lIANULUPTCY CUE -AZ TOOL

The learned judo deliver.] the following long Nag-
meat in the case of Herbert William Foot, farmer, of
Ta,"ville„.B Wont on, which the trip tie. Mr. J. Denman,
of`1"1" (rePru.nted by Mr. Trevor Davies), sought to
set aside. hill nf aide, the h Islets of which had been rePre-
*entail by Mr. B Fosset Lock, barrister of this circuit :
" The creditor.' trustee in these roceedings of liquida-
tion by arrangiment Thomas Isaac Dimmers, seeks t set
maids • bill of sale given laY the debtor to three creditors.
The two groutiele on which it is sought to irupeech the
validity of the deed are, Ist. That it is fraudulent and void
as ageinst other creditors, it being an aseignment sub-
stantially of the whole of the debtor's estate, and en act
of bankruptcy : and 2a4. That it is also fraudulent god
voll, inasmuch as the consideration for which the b II
of sale was given is nit truly date I as required by the
Bill of Salm kit, WB, section 8. The facts, so far as they
are neceweary for the deeiaion in this case, are that the
debtor. H. rbert William Foot, Imo or some rears carried
on the biseinres of • far mar at than, dies Woottoe, in
, poreet. lilt Guns comprised nearly 403 acrea at a rowel
of £7OO • year, end was principally cultivated by him f..r
dairy purl owe. At the beginning of October. 1890, the
debtor being in arrear with his landlord, a dietress for
£594 was put in upon his farming stick, which com-
prise i at that time upwards of 80 caws and a number
of other cattle. It dors nut appear when this took place
that any other creditor wag pressing for payment so
that it rischl be said, beyond this distress for rent, the
debtor was in embarraesed Micomstanoes. To relieve
himself from the landlord's Mann the debtor applied to
Barwell Bennett and Poillip Foot. hie uncle and brothers
for assistance, MA through their influence with the bank
of 1.1-.ers. Eliot., P 6,1%,”. and Ci, and immediate advance
of £3OO was procured, at that time it being believed that
by the payment of this sum the landlord would withdraw
from te distrese and ifi•• time for the discharge of the
remaining. balance. • This, hoe ever, aft ir receiving the
£3OO, the landlord refused ii do; and it became necessary •
again to have ',mourns to the tank, and. further advance
was procured of £319. The repayment to the bank of
the whole sum advanced, 4619, was seemed by • invented
given by Barwall Bennett and Phillip Foot. This docu-
ment is date 3 the 131 o: October, 1880; and In it they
severally and jointly guarantee anyadvancs the bank had
_ made or might make to Herbert Foot, or which
he then was, or might at any tints be, ace mutable on
his curreat account or otherwise. The first payment of
£3OO to the debtor was made by the bank on the day
following the date of the guarantee—namely, the 14th
of October; and the second advance of £319 on the 22nd.
The bill of sale, the subject of the present enquiry, was
given the following day, the 23rd. At the time it was
executed the grantor stood with relaticn to his indebted-
ness ti the three grantees in his position. To his uncle,
Barwell Bennett, he owed a past debt of £l4 for money
advanced some time beim* to pay • premium doe on •
life policy, and he was elm liable for the grantor a. •
surety to the bank of Allot and Co. for a loan of £2OO
advanced some years before to the granter, and was further
contingently liable for the late edema of £Bl9. To the
second grantee, Phillip Foot, the brother, he was indebted
in a sum of 42.12/' lent to him in 1875, and also its £4O for •
rick of hay .old in the same year. The accumulated
list lest on the loan £6O, and the compound interest
choreal on the £4O due on the rick of hay, for which com-
pound intere.t I find no agreement or promise was ever
made by the granter to may, make up a total of pa.t debts
to Phillip Foot of nes. and he was also contingently
liable at the time of ex-euting the bill of sale as • .urety
to the bank for £612. With regard to the grantor's sister,
Rebecca Burch, tne third grantee, she in June, 1872, lent
. .

the grantor .e4OO at four percent,' which sum —was unpaid
at the time the bill of sate was executed. She had not
requested the two other grantees, at whose instance she
bad been made • party to the deed, to make her such
Reny. and her name wee used as • grantee without bar
knowleige et previous" nt The bill of gale having
been thus given on tee Zied of 0 nober, nothing was done
under it until the let of D .rember, when, es is alleged
by the granter., hearing other creditors hoed been pressing
ler etym, at and that • distress was likely to true fir
arrears of tither, • demand was then male by them for
the payment of the secure t Rom of £1,638, and upon a
stotement made by the grantor that he was unable to
p ,y, they entered under the bill of sde and rem ,ved the
whole or the farming stock, among which were 84 dairy
cows and • numb r of other catee,leayi ng four horses upen
the farm, one of which was subsequ.ntly sole by the
granter. and the remaining four removal from the farm
on the morning of toe oats, the 11:h of Dec onbur, and
gad with the other stock. The amount realised at the
gas wee £I,W9. On the 11th of Decernbar. th. debtor
lied his petition in bread ti on ; and on the 29th the
preterite trustee wet &probated. The unsecured debts
amount to £679 •ith no available assets to meet them.
Nu books containing an account of his dealings or pay'
wrote have been kept by the debtor, his practice being
to enter them at the time in a murk pocket book, and
when it was full to destroy it. The bill of isle is in the
lewd form, and purport, to have been made on the 23ri
Of o:tober, 1880, between Herbert William Foit, the
mortgagee of one part, and Barwell Bennett, Pladlip and
Rebecca Burch, the mortpuees of the other part, and
recites that the mortgagor is indebte I to the mcrtgagees
respectively in awns amounting te £1,019, and lag to the
shore of Rebecca Burch in the same amount for her sole
and separate use; that the landlord of the mortgagor hes
recently distmined open the stet and effects of the
in rrtgagor for .4594 8.. 61., and .4.115 3i. 6d.. the cost, of the
d stress. amounting in the whole to .0319 Ito.; that the
mortgagor has roque-ted the mortemeee to p.m out the
desires, or a Irene* to the mortgagor the !UM of
£619 12..61. for that peeper, which the mortgagees hove
agree to do upon having the security hereinafter c es-
toned for as well the sod sum of £1.019, as for the raid
sum of Low 12r. now advanced which the mortgagor
agreed to give, and the mo-tgagen have in pursuance of
the said agreement paid to the agent of the raid
landlord, the sten of £619 121 in full discharge
of the mid disks's, and the said landlord has
withdrawn from possession of the said stock and
effects in purattance of the Raid sum, and on con-
sideration of the Rale sum of £1,019, mei agreement of the
further sum of £619 Its, now advanced to the mortgagor
by the mortgagees, be etweeeete to Pay the sum secured
on demand, and for the consideration stated assigns to the
mortgagees all his crops of grain now growing, or which
may hereafter he found upon his term sad all home cows,
cattle, carts, (ermine utensils. hey, straw, and other
effect* whstsever which now era or shall at any time
hereafter, dente the tenancy of the morecaper. be upon
the farm. Upon these f 'ht. Mr. Trevor Diaries contends,
In the lint instance, that the bill of sale in question is
fraudulent and void as against the tru.t is, it having
been given to secure a past debt., 'ed. by conveying the
whole of the debtor's goods without any equivalent, con-
stitutes an act of henktup'cy. Is considering this
question I am relieved from any difficulty as to the debtor
net twine a trader by the cos, of es parte Luckes, in re
Wood, 42, Low Journal, Bankruptcy, 21, in which it was
held that if there has been an assignment of all a debtor's
available property to a creditor to secure a put debt, it
I. an act of bankruptcy, whether the debtor is a trader cc
not. No doubt the fact of patine with the whole of a
man" available property to secure a pan debt will not
constitute an act of bankruptcy if an advance is made by
the creditor in good faith, and with the intention of enabb
Mg the debtor to carry on his businese, and his affairs at
the time that rich advance ii made not being in such an
embarrassed state as to exclude the ressonable belief that
the advance is made will be sufficient to p bank-
tempter. Bat in the present cam at the very outset
Of the enquiry • question arises upon th • heti mew—
namely, was there a real money ail ra. ci insle at all by
two of the guarantees? for as to thii third, Rebeeca Burch,
It is not pretended that she worn direetly ~r in erertly the
mean., hy becoming a security or otherwise, of obtaining
the £619 from tho hank. on too far, therefore, as she is
coecerned. her debt of £4OO ie, without request or pressure
on h, r pane secured by the transfer of the debtor's pro-
perty described in the bill of sale, and it is in my opinion,
so far as she is concerned with the bill of sale, • fraudu-
lent preference under the 92nd section of the Bankruptcy
Aso. Igoe With regard to Rowell Bennett and Phillip
Foot, the facts show that what was really procured in the
sbaeof • money advance to the d•btor from the bank Walt
=lds by the heroic to him, the in lucenent for granting
the loan being his personal liability for the repayment of
the money, ape the repayment heing secured by the
gnerrantee of Rowell Bennett and Phillip Fete. Their
liability we,. therefore, contingent upon the non-payment
of the .0312 by the borrower. Thera is authority for
holding that a tardy does not become • creditor of the
ncipal debtor merely by force of the relation between
grie., although the surety MAT bare made himself liable
absolutely to the creditor and the debtor may have
undertaken to indemnify him. Until the surety hag
actually paid the money his liability Is only coutMgene
and uncertain, and hence, under the earlier bankrupt
laws unless the smite lead actuary Intel the debt before
the bankruptcy of the principal, he could not prove under
the bankropter (Rohson's Bankruptcy 215, and the cant
there cited), I find no proof in the case before me of any
ent between the grantees and the grantor that the
tflrie7 sale was to be given in consideration of their be-
coming liable to the bank for the .4919. It is treated
throrighout by the three grantees as an absolute advance
made by them Jointly out of their own moneys. Even
had the real fact been stated in the deed it hos been held
that a transaction whereby the prnrerty is conveyed to
seeure • surety against liabilities which be had incurred to
the particular creditors who may come in, and which
surety can stop the train at any moment, is not • case in
which the bankrupt receives an equivalent which he ea&
deal with in carrying nu hi. Mule if he chooses (per Lord
(ameos% C J., in Luke v. Young, 5. Ellis and Blackburn,
966). Had the objection to the bill of tale stood alone upon
the contention that it became vote by the 'rand talent pre-
ference elven ti the past debt of Rebecca Burch, I should
have bad no hesitotion in finding the deed wholly invelid
within the 92nd section of the Bankruptcy Act. 1889.
Bet apart from ibis, looking at all the surrounding facts,
I comet come to any other conclusion than that the sole
object of the two other grantees, Disewell Bennett and
Phillio Foot, in mak'ng themselves parties to procuring
1 the £619 was to obtain by means of the bill of pole the
possession of the whole of the debtor's estate for one
room only—namely, to pay themselves the debt. owing
rthem, having at the time no intention of enabling the
debtor to carry on his buainen, or on the other hand was
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which the research and industry of Mr. Foesett Lock, the
counsel for the grantees and Mr. Trevor D the
bars brought talon me in the
advocate for the trustee,
course of their *hie and elaborate arguments in Oslo care,
and have been mainly governed in my decision by the case
of es parte Greener in re VDUS (4,1 Lew journal, Bank.
roomy, 75), and ex parte Ellis in re Slim (Law Report.,
2 Div. TIR), in which the rule is stated to be net
wheiher a further advance is great or ems% hut whether
there was • bona jtds intention of carrying on the business,
the late Lord Justice James observing in the former cam
"It was strange that they intended him to carry OD his
business when they put all their debts into • bill of gale,
and within one month take all his property." I end, as I
have stated, no intention of carrying on the business
existed in the minds of any of the metro at the time the
bill of sale was riven, and on these grounds and the
anthorities cited I bold that the trustee must succeed
apron the first motion—namely, that the kill of sale, the
subject of this enepoin, is fraudulent and void, and as
act of bankruptcy. With regard to the remaining motion,
that the bill of sale is invalid on the ground that the
recitals are not true in substance, and that the con-
sideration for which it wee given iv not truly attired as
required by the Bill of Sales Act, 1878, the facts upon
which my decision has been given on the first motion
are meinly the same as in the emend. The Rib sect no
enacts that the bill of tale shall truly set forth the
conirderstion for which it was given ; that is, that
It must he described acenrdieg to the real facts,
and Inuit net he misleading. I am of opinion that
the third recital set out in the former port of this
inclement, which alleges that the grantor requested the
renteee to pay out the distress or to Meneme the sem of
ann. for the purpose of paying out the dieters upon
having the @verity provided In the deed for as well the
urn of £4,019 as the 12• then advanced is not teat,