The Express.
London, England, 1862-11-20 00:00:00

BAPTISTS.

The arguments in this cam were resumed this afternoon,
and at the rising of the court the =SOU again adjourned
until this day, when it will be taken alter the motions.

(Before

ce•Chaxdlor Sir J. Stuart.)
LACON V. LIFFIN.

This was a suit instituted by bankers claiming to be sub-
mortgagees of certain vessels and mortgagees of household
furniture, and other effects of • bankrupt as sgainst
isaitisignees who were defendants. The claim to the
security on the vessels was founded on a deposit of the
original mortgages which were made to the bankrupt and
duly registered. The security on the goods was claimed
under • bill of tale. .

Mr. Mahns and Mr. W. H. Bennett were for the plaintiffs ;
Mr. Bacon turd Mr. G. L. Russell for the defendants.
The Vice-Chancellor now gave judgment, and said that
the first question was as to the validity of the lien claimed
by the plaintiffs in respect of the deposit of the two instru-
ments of mortgage on certain ships. It appeared that the
bankrupts were the registered mortgagees of the ships in
question, and that the deposit of the instruments was made
to secure the plaintiffs debt before the commission of any
act of bankruptcy. For the assignees it had been argued
that according to the Merchant Shipping Act, 1854, as con-
strued by this court in the ass of ' The Liverpool Borough
Bank v. Turner" (2 De Gex, Fisher, and Jones, 502; 1 John.
son and Hemming, 165), no equitable lien by deposit of the
instruments of mortgage could be recognised as valid, and
that registration was neoesaary to give any valid
title. In the present case no assignment of the
mortgage had been executed by the baulmipts to
the plaintiffs, or appeared on the register. It
was therefore insisted that the bankrupts, as the registered
mortgagees, had the mortgages in their order and disposition
at the time of the act of bankruptcy. The plaintiffs, how-
ever, referred to the Merchant Shipping Act of the last
session (1864 as expressly declaring that interests under
contracts and other equitable interests must be recognised
as included in the words "beneficial interest" in the act of
1854. To this the assignees replied that the qualifying
words in the 3rd section of the act of 1862 reserved the
power of disposition to registered mortgagees given
by the 43rd and 66th sections of the act of
1854, and therefore that the bankrupts, as registered.
mortgagees, although they had deposited the instruments
of mortgage, still had • power of disposition and might
have executed a valid assignment of the mortgages not-
withstanding the deposit. But on referring to the pro-
visions of the act of 1854 as to the disposition or transfer
of mortgages, it appeared that the statutory form of amigo-
meet could only be executed by indorsement on the instru-
ment of mortgage. The words of the form of tangier in
schedule K, referred to in the 73rd section of the act of
1854, accrued to be conclusive on this subject,
as they included the words, " the within writ-
ten security," so that without the production
of the original instrument of mortgage no valid
assignment or disposition could be made. The deposit of
the original mortgage with the plaintiff seemed, therefore,
to have taken from the bankrupts the power of making any
effectual disposition or transfer of the mortgage, and thus
that deposit constituted the plaintiffs equitable mortgagee..
So far, therefore, as the hill prayed for a declaration that
the plaintiffs had • lien on the presaged' of the ships, they
were entitled toe decree to that effect, together with the
costs of the snit. But as to the second question,
which involved the consideration of the validity
of the bill of sale the plaintiffs had failed. In
the case of "Bittleston v. Cooke" (6 Ellis and
Blackburn, 307), it was held that where a bill of sale mall a
trader's goods was made in part for a bygone debt it aa
act of bankruptcy, and the court then referred to the cases
of " Graham v. Chapman," and "Smith v. Chapman," as au-
thorities on this point, and his Honour thought that the law
must be considered as so settled. The case of " Hutton v.
Cruttwell " (1 Ellis and Blackburn, 15) was decided on the
ground that the billet sale was executed to secure a peesent
advance of money made on the faith of that security,
and not as to any part of it for an old debt,
because the gross amount secured by the deed
was advanced at the time by the creditors to whom the bill
of sale was executed. In the present case the bill of sale
was supremely given as a security for the old debt, and also
for future advances. It seemed, therefore, to be within the
decided eases. It was an act of bankruptcy in itself, and
the bill mint be dismissed with costa so far as related to the
bill of sale. An attempt was made on the part of the
plaintiffs to support the bill of sale on the ground that the
assignees were bound to admit it by a memorandum
siped by the commissioners in the margin of affidavit
of proof of the plaintiff 'a debt. But no such