tiff of all moneys paid by him in respect of the composition hereinafter mentioned; and lastly, as to the surplus, in trust for Prior himself. The deed contained a joint and several covenant by Prior and the plaintiff to pay a composition of 28. in the pound to all the creditors on the 29th of October; a release from the creditors in consideration thereof; and also a clause to the effect that the deed "was intended to operate and should operate (so far as lawfully might be) as a trust and composition deed for the benefit of creditors, under the Bankruptcy Act, 1861, and be binding on all the creditors of Prior; and that so soon as the requisite majority should have executed or assented in writing to the deed, it was intended that it should be registered under the 192nd section of the act, in order that Prior should obtain the protection provided for by the 198th section." Johnson, the surety and trustee, having claimed under the deed, this issue was directed between him and the defendant, the execution creditor.

Certain assents which were necessary to make up the statutory majority were in the following form:

"We approve of the trust deed executed by the debtor, on the 1st of August, on behalf of the Writhlington Coal Company, the Frome Permanent Building Society, the executors of the late W. Rabbits and ourselves, without prejudice in any way to the rights of the above-named creditors and ourselves under the first trust deed executed by the debtor, and also without prejudice to the securities held by any of the above creditors.

deed was not duly assented to under the Bankruptcy Act, 1861, and did not pass the property to the plaintiff as against the execution creditor; and a rule having been obtained accordingly,

Tindal Atkinson, Serj., and Eyre Lloyd shewed cause.-Whether the deed be valid under the 192nd section of the Bankruptcy Act, 1861, or not, it is clearly good at common law to pass the debtor's property to the trustee. That is settled by Symons v. George (1). Next, whatever Prior & Bigg or their clerk did was purely ministerial; they had no discretion in the matter, but were required to give the written assent as directed. Lord v. Hall (2) and In re Bumsell (3) shew that they had ample authority for the purpose. Again, the qualification in the terms of the assent does not affect its validity, unless it appears that the deed referred to contains conditions which really limit the assent so as to produce inequality among the creditors. Till that is shewn, the assent must be taken to be absolute.— [They also cited Bissell v. Jones (4).]

Garth and C. H. Anderson, in support of the rule. The assent and signature by the clerk cannot be regarded as a mere ministerial act; the authority to assent could not be delegated in this way. Besides, the assent is itself worthless, because it is qualified in its terms, and introduces an inequality among the creditors by reserving rights to some of them and not to the others. Another objection is, that the plaintiff is not a trustee for the creditors, but for Prior himself, in whose favour there is a resulting trust. So that the deed cannot operate under the 192nd section of the Bankruptcy Act, 1861, although it may under the 194th; and consequently it does not come within the operation of sections 197, 198-Pearson v. Pearson (5), Ex parte Morgan (6), and Ex parte Spyer (7). And therefore as it appears on the face of the instrument that it was only intended to operate under those sections, which dis

(1) 3 Hurls. & C. 996; s. c. 34 Law J. Rep. (N.S.) Exch. 187.

(2) 8 Com. B. Rep. 627; s. c. 2 Car. & K. 698; 19 Law J. Rep. (N.S.) C.P. 47.

(3) 16 Law Times, 538.

(4) 38 Law J. Rep. (N.s.) Q.B. 2.

(5) 35 Law J. Rep. (N.S.) Exch. 172.

(6) 32 Law J. Rep. (N.s.) Bankr. 15.

(7) 1 De Gex, J. & S. 260; s. c. 32 Law J. Rep. (N.s.) Bankr. 62.

tinguishes it from the deed in Symons v. George (1), and as the intention of the parties has not been carried out, the instrument can only be regarded as an escrow. Again, even if good as a conveyance at common law, it is really a bill of sale, and ought to have been registered within twentyone days under section 1. of the Bills of Sale Act, 1854; and not having been so registered, it is void as against the defendant, an execution creditor.

KELLY, C.B.-The first question here is, whether there has been a sufficient assent in writing by certain of the creditors to the deed executed, or intended to have been executed, in conformity with the 192nd and subsequent sections of the Bankruptcy Act, 1861. Upon the evidence, the Court must take it that three firms authorized Cruttwell & Daniel to assent on their behalf to the composition deed in question. The only evidence that we have before us in addition to this is, that a telegram was sent, the precise form of which is not before us, by Cruttwell & Daniel to their agents Bigg & Prior in London, and there upon the assent appears to have been written and signed by Prior & Bigg's clerk under their authority. Now, it is said, in the first place that this is not a ministerial act, but that there was certain judgment and discretion to be exercised by Cruttwell & Daniel which they had no power to delegate to Prior & Bigg or to their clerk. I do not think that this objection arises in this case. If it were perfectly understood what it was to which an assent in writing was to be given, and this paper constituted a sufficient assent in writing of the firms in question, and Cruttwell & Daniel themselves, instead of each of the four signing, had requested their agents in London to sign it in their names, and the agents in London had requested their clerk to sign for them, or, in other words, for all the four parties to it, I think that would have been sufficient. But two other objections arise, both of which I think are fatal to the validity of the assent. The one is, that the assent does not constitute in itself an assent in writing within the terms of the statute, for it is qualified by the words "without prejudice in any way to the rights of the above creditors and ourselves under the first trust

deed executed by the debtor, and also without prejudice to the security of any of the above creditors." Now the assent must be absolute, and not qualified, or there would not be equality between these firms and the creditors who have absolutely and simply in terms assented to the deed or executed the deed which would bind them by its whole terms without any reference to the first creditors and the powers arising under the former deed. It may be said indeed that we have not the other composition deed before us, and that it does not follow that there is anything in that deed which would at all interfere with the rights of the creditors under that latter deed; but it lies upon those who maintain that this is an absolute and not a conditional or qualified assent to shew that there is nothing in the other composition deed which in the slightest degree affects the operation of the deed now in question. In the absence of evidence we must suppose that these words are not introduced without an intention to give some effect or other to them. The necessary effect must be, if they have any effect at all, that they operate as a qualification to the otherwise absolute assent to this deed, and consequently there was not the absolute and unconditional assent in writing, required by the act of parliament. But besides this, the second objection is, that we do not find the slightest evidence of any authority having been given by the three firms to Cruttwell & Daniel, nor by Cruttwell & Daniel themselves to Prior & Bigg, to give other than an unqualified assent to this deed. I think, therefore, whatever authority is supposed to have been conveyed by the three firms, the assent has been avoided by reason of the introduction of these words to which I have already referred. Under these circumstances, I am of opinion that what is called an assent is not an assent at all within the meaning of the statute.

We now come to the remaining point, and that appears in substance to be this: The deed in question is a deed no doubt executed or intended to be executed in conformity with the 192nd or subsequent sections of the Bankruptcy Act. I have already observed that the assent in writing required by the statute has not been given. But then it is contended on behalf of the trustee under the composition

deed, that this instrument, containing an absolute assignment of the property in question, passed the property in question from the debtor to the trustee, and consequently the property is no longer liable to be taken in execution for the debt of Prior. We find on looking into the deed that there is an absolute unconditional and unqualified assignment and transfer of the whole of the debtor's estate and effects, and the object was, no doubt, to defeat the execution, and disentitle the execution creditor to seize this property. But then it is said that this does not so operate, and that it is not a conveyance of this property at common law, and that this deed, upon the face of it, and without any finding by the jury, or any question left by the learned Judge to the jury, appears to have been delivered as an escrow. Now, undoubtedly the deed was intended to operate under the 192nd section of the act of parliament, and it cannot so operate unless there should have been, which there has not been, the assent in writing of a competent majority of creditors; but though it was executed with the intent it should be effectual under the statute, it does not prevent the delivery of the deed from having been a perfect delivery, so as to give effect to any clause in the deed which may operate at common law; and that does not depend upon the compliance with the particular provisions in question in this act of parliament. And when we remember the circumstances under which this deed was executed, that the debtor was in actual possession of certain stock in trade and other effects, and that he expected that which actually occurred, that an execution would be put in by the judgment creditor, whom he was desirous of defeating, within a few hours, it would be absurd to suppose that a jury would have said that the deed was delivered as an escrow. There is no doubt it was the intention of the assignor and the assignee, the debtor and the trustee, that this deed should operate unconditionally, and necessarily convey out of the debtor and into the trustee this property. I think, therefore, there is nothing either in law or fact upon which it could be possibly inferred that this deed was delivered as an escrow, and intended to operate only on some future event that has not occurred.

Then another point is made, that this

deed, not having been registered as a bill of sale within the meaning of the Bills of Sale Act within the proper period, is altogether void. I am of opinion, if it were necessary to decide that question, first, that it is not a bill of sale, but if it were it would come within the exception in the act relating to assignments for the benefit of creditors (8). Upon the face of it it is a perfectly fair and honest deed, made by a man who knows that within a few hours what may perhaps have been the whole of the property he possessed in the world is about to be seized and swept away by a single creditor, leaving every other creditor he has without the payment of one shilling of his debt, and he, instead of permitting that to be done, executes an assignment of the property upon the condition that after paying the expenses of the deed in question it shall be applied to pay 28. in the pound to the whole of the creditors. I am of opinion that it is clearly a deed for the benefit of creditors, and does come within the exception in the Bills of Sale Act.

But then we are told that the deed itself is fraudulent and void at common law, because it contains a resulting trust in favour of the debtor himself. It must not, however, be forgotten that there is a personal covenant of the trustee, and there is not necessarily any fraud in a deed of this nature. As Martin, B. said in Symons v. George (9), in this Court, before it went to the Exchequer Chamber, a man has a clear right to convey property to trustees when there is no lien upon it; as long as there is not any claim or charge upon it that divests him of the power to exercise over it acts of ownership. The debtor here was in possession of the property; he had a perfect right to convey it away to trustees to be disposed of, partly in favour of his creditors at large, and as to the residue in his own favour and for his own benefit. There is nothing in this case or the evidence to derogate from the absolute right which every man has to exercise ownership over his own property. The debtor here has exercised his ownership, and his common law right to dispose of his property, and he has transferred it by apt words in a fit conveyance to a trustee, and there is nothing illegal on the face of this deed. I am of

(8) 17 & 18 Vict. c. 36. s. 7.

(9) 3 Hurls. & C. 68; 8. c. 33 Law J. Rep. (N.S.) Exch. 233.

opinion that upon the face of it the deed must be taken to be a valid deed at common law, and that being so the property passed out of the debtor into the trustee.

It remains for me to add, that although undoubtedly circumstances might have existed entitling the defendant in this case to call upon the learned Judge to leave to the jury the question whether this was a fair and bona fide or a fraudulent conveyance, there was not at the trial even a scintilla of evidence upon which the Judge could have left the question to the jury; and no such question was left to them. Under these circumstances, the plaintiff is entitled to the verdict he has obtained.

CLEASBY, B.-I am entirely of the same opinion. I should not like to give any opinion as to the sufficiency of this assent in point of form. I should hesitate very much before I came to the conclusion that it was sufficient. It is not necessary to give a decided opinion upon that point, because I think that the assent itself was insufficient. The idea of equality is the foundation of all these arrangements, and a deed in its provisions must be equal; it follows, as a matter of course, that the assent to the deed must be such as to put all creditors on an equality. That was held in Ex parte Rawlings (10). Anything which shews that the assent is conditional only, and not absolute, shews that it is not sufficient. here you have some persons executing or assenting to the deed unconditionally, while others give their assent to it "without prejudice to their rights under another trust deed, and also without prejudice to the security" given by certain persons. The necessary equality, therefore, is gone, and the deed is not binding as a deed under the 192nd section.

Now

Then we have to consider the other question, whether the deed is valid at common law. Upon this it seems to me that two questions arise: first, is the deed valid? secondly, what is the effect of it? Now, to make a deed invalid, you must shew that it is either an escrow, or that it is illegal. First, is the deed illegal? There has been no ground of illegality suggested except the alleged invalidity of the deed under the Bills of Sale Act. If the property has been disposed of for the

(10) 1 De Gex, J. & S. 225; s. c. 32 Law J. Rep. (N.S.) Bankr. 27.

benefit of creditors, there is no illegality in that. It is perfectly legal for a man to convey his property to another person for the benefit of all his creditors; and there is nothing illegal in saying, I intend this deed to operate under the 192nd section so far as it can. This deed, then, is a legal and valid deed what is there then to make it a mere escrow? We find, after reciting that the debtor is indebted to various persons, and was much in arrear and unable to pay his debts, he had agreed to enter into the following covenant to secure the payment of 2s. in the pound to all the creditors. That is the covenant by Johnson and the debtor. It says nothing about the execution of a deed. Now I am clearly of opinion that if any creditors brought actions against Johnson upon this covenant, he could not set up that this deed was intended to operate under the 192nd section. If Johnson was sued, and upon execution was unable to pay, would not the creditors be able to touch the property? Clearly they would; and therefore, since there is nothing to prevent the deed taking effect as regards the liability of Johnson, it must also take effect as to his rights. All that the last part of the deed means is, that it is intended, if the requisite number of assents be obtained, that the deed shall have the same effect as a deed under the 192nd section. But this does not mean that the deed is to be void altogether, and to have no effect unless the assents be proved. These are the grounds upon which I have disposed of the case; and the authorities support me. I remember, and it is consistent with a decision in a case in which I was engaged in the Common Pleas, not reported, where it was attempted to set up the same defence. The Court of Common Pleas there said that the moment the deed is executed and delivered (unless, as a matter of fact, it can be made out to be an escrow) it could only be considered as a deed, and it must take effect as such. I agree, therefore, that the rule should be discharged.

Rule discharged.

Attorneys-W. H. Bishop, for plaintiff; H. C. Nisbett & Co., for defendant.

Execution-Bankruptcy Act, 1861-Deed under 192nd section-Setting aside Writ of Execution and Staying Proceedings-Effect of 198th section.

A writ of execution having been issued on a judgment, but not executed, the defendant applied to set aside the writ and stay further proceedings by way of execution, on the ground that he had executed a deed of release under the Bankruptcy Act, 1861, which he had had no reasonable opportunity of pleading to the action. The Court refused to interfere on the ground, that the Bankruptcy Act, section 198, only prevents process from being made available, and that no attempt had here been made to render process available.

In this case judgment had been recovered against the defendant, and a writ of execution issued, which, by arrangement between the parties, remained unexecuted in the hands of the sheriff pending the result of the application mentioned below.

The 198th section of the Bankruptcy Act, 1861, 24 & 25 Vict. c. 134, provides that "after notice of the filing and regis tration of such deed has been given as aforesaid, no execution, sequestration or other process against the debtor's property in respect of any debt, and no process against his person in respect of any debt, other than such process by writ or warrant as may be had against a debtor about to depart out of England, shall be available to any creditor or claimant, without leave of the Court."

F. M. White moved (Jan. 13) for a rule calling on the plaintiff to shew cause why the writ of execution should not be set aside, and all further proceedings by way of execution stayed, on the ground that the defendant had executed a deed of composition and release, under the Bankruptcy Act, 1861, which he had had no reasonable opportunity of pleading to the action. The defendant having had no reasonable opportunity of pleading this deed, the Court will interfere to prevent the judgment being made available.

NEW SERIES, 38.-EXCHEQ.

[PIGOTT, B.-The defendant is coming to us quia timet. The 198th section of the Bankruptcy Act only forbids process being made available. KELLY, C.B. Can you ask us to set aside the writ? If the plaintiff seizes under it you will then be in a position to apply to the Court.]

It was intended by the parties that the substantial question between them, that is, whether the deed is now available to the defendant, should be decided on this application. The Court has a general equitable jurisdiction to prevent abuse of its process, and if it can see that proceedings are being taken which must ultimately end in contravention of the object of the act it will interfere.