said creditors respectively in full satisfaction and discharge of their several respective debts and demands against the said Samuel Bagley Rawlings, the full amount of which said debts and demands are set opposite to the respective names of the said creditors executing these presents in the schedule hereunder written." Then there follows a covenant for further assurance on the part of Samuel Bagley Rawlings. This deed is not, as it seems to me, a trust deed for the benefit of creditors. There is no trust fixed upon the property assigned by it. It is, as it seems to me, a mere deed of arrangement between the bankrupt and the parties to whom the property is assigned, by which those parties come under the obligation of paying the creditors of the bankrupt to whom promissory notes were given, but no others of his creditors. No creditor of the bankrupt could, as I understand this deed, insist in his own right, or otherwise than through the bankrupt, on his debt being paid, or on a promissory note being given to him for the payment of it. I agree, therefore, with the learned Commissioner, that this is not a deed of composition within the meaning of the 192nd section; and, subject to the option on the part of the bankrupt to adduce further evidence as to the assent, if it shall be desired on his part to do so, I think that this application must be refused, and with costs to the extent of the deposit.

On a subsequent day (Dec. 10), counsel informed the Court that the bankrupt did not propose to call any further evidence (7).

Assignees, What passes to-Order and Disposition-Lien.

In December 1861 the bankrupt contracted with W. to build a barge for him, to be paid for in bricks; the barge to be completed on the 5th of June 1862. The bankrupt hired a yard for a certain number of months, for the purpose of completing the contract, which period expired before the completion of the work, and W. then

(7) See the case, supra, p. 15, of Ex parte Morgan, in re Woodhouse, on the same subject, before the Lord Chancellor.

* See ante, Ex parte Cole, in re Attwater, p. 11.

hired the yard. In June it was agreed by the bankrupt in writing that the barge should be held by W. as a security for advances made by him. In July the bankruptcy took place. The advances made by W. exceeded the amount of work done and materials supplied by the bankrupt :-Held (reversing the decision of the County Court Judge sitting in Bankruptcy), that W. had a lien upon and was entitled to hold the barge, unless the assignees chose to complete the contract.

This was an appeal from an order made by Mr. Espinasse, at the County Court, No. 48, Bromley, &c., in the matter of the bankruptcy of J. W. Attwater. In December 1861 the bankrupt was employed by the appellant, a brickmaker, to build a barge for him, the purchase-money for which was to be paid in bricks, the quantity to be supplied not to exceed in value the amount of work done. The barge was to be completed on the 5th of June. The bankrupt, at the request of the appellant, hired a yard of a Mr. Page for several months, in which to build the barge. The time having expired for the building of the barge, the bankrupt signed a memorandum, bearing date the 24th of June 1862, whereby he declared that the barge and timber in the yard should be held by the appellant as a security; and by a receipt, dated the 25th of June, he acknowledged that the appellant had paid him the sum of 266l. 148. 9d., and a further sum of 201. for the hiring of the yard, which had not been paid by him. The 5th of June having elapsed, and the bankrupt having discontinued the building of the barge, another shipwright, of the name of Burgess, was engaged by the bankrupt to complete the work, but whether as the servant of the appellant or not did not appear. The yard, after the expi

ration of the time for which it was let to the bankrupt, was taken by the appellant. The date of the adjudication was the 17th of July 1862. The County Court Judge said that the barge was in the order and disposition of the bankrupt at the time of his bankruptcy on the 17th of July, and directed that it should be given up to the assignees. The present appeal was then brought by Watts.

Mr. Bacon and Mr. Martindale appeared for the appellant.

Mr. Fooks, for the assignees.

The following cases were cited:

Wood v. Russell, 5 B & Ald. 942. Clarke v. Spence, 4 Ad. & E. 448; s. c. 6 Nev. & M. 399; 5 Law J. Rep. (N.S.) K.B. 161.

Holderness v. Rankin, 28 Beav. 180; s. c. 2 De Gex, F. & J. 258; 29 Law J. Rep. (N.s.) Chanc. 753.

The LORD CHANCELLOR, I do not think there is any reasonable doubt in this case. A person of the name of Watts contracts with the bankrupt Attwater, for the building by the latter of a barge. A special part of that contract is as to the mode of the payment of the price. It was to be paid for in bricks, to be delivered by Watts to Attwater. There was no particular stipulation as to the work being measured previously to any payment being made, nor was the price to be paid by instalments. I should have been disposed to agree, therefore, that this barge would have remained the property in its unfinished state, and even in a finished state, of the builder, until it was actually delivered in pursuance of the contract. But what afterwards took place altogether varies that legal position of the matter. It appears that Watts paid more money than the value of the work done by the bankrupt anterior to the 5th of June. It also appears that the barge being originally constructed in a yard which the builder had taken a lease of, or had contracted for the possession of, for a certain number of months, that period of time expired before the barge was complete, whereupon the purchaser of the barge hired the yard himself, and thenceforward the barge was a chattel upon premises belonging to Watts, the contractor with the bankrupt. Then it appears that on the 5th of June the bankrupt did not proceed any longer with the building of the barge, which was then handed over to a person named Burgess. Burgess was a shipwright, employed by the bankrupt Attwater, but it does not appear that he was a servant of Attwater. On the 14th of June 1862 Attwater was unable to pay the money then due to Mr. Page, from whom the yard was hired. On the 24th of June, the amount of the payment made by Watts in respect of the barge was ascertained, and the sum

of 2661. 148. 9d. was then admitted by Attwater to have been received by him, and a receipt was accordingly given by him to Watts for that aggregate amount. At the same time, it was agreed that Watts should pay 20%. to the owner of the barge, and that the 207. should be considered a further sum of money paid on account. Then there is a memorandum of agreement, dated the 24th of June, signed by Attwater, which, acknowledging the receipt of the money, declares that the barge and timber on the wharf shall be held as a security by Watts until the agreement for the construction of the barge shall be fulfilled. Is it possible after that to contend that there was any property in the barge, except that property which remained in Attwater after the agreement was fulfilled, and the barge was in a condition to be launched? The barge was in an unfinished state, and was to be held by Watts as a security. Under these circumstances, the only thing that remains to inquire is, what was the amount of work done by Attwater up to the 17th of July? Here the evidence varies. The evidence for the contractor, Watts, makes the amount 187. less than the sum at which the assignees put the value. But even that amount does not exceed 270l. 11s. 4d.; and it is shewn on the face of the contract that on the 24th of June, 2867. 14s. 9d. had been actually paid by Watts. The result is, that Watts is entitled to the benefit of that lien, and to hold the barge, and the place where the barge was at the time of the bankruptcy, unless the assignees choose to redeem the barge. The option I shall offer to the assignees is, to complete the contract in like manner as the bankrupt was bound to do. If they decline that offer, I must declare Watts entitled to the benefit of the lien, and reverse the order.

The assignees having declined the offer to redeem the barge,

The LORD CHANCELLOR said he could

not make the assignees pay the expense of this new hearing, because he must apply to this case the ordinary rule, which prevented him making the respondents pay costs. But he would make an order that the assignees' costs of the application to the County Court Judge should not be allowed them out of the estate. It was high time that steps should be taken to check the disposition to make these applications, in consequence

Composition Deed-Registration-Protection from Arrest-Secured and Unsecured Creditors-Sections 97, 185, 192. and 198. of the Bankruptcy Act, 1861.

A deed executed between the debtor of the one part, and the several other persons whose names and seals were subscribed and set, being severally creditors of the debtor, of the other part, whereby a composition was paid in cash to the creditors upon their executing the deed, was declared by one of the Commissioners to be within the protection of the 192nd section of the statute 24 & 25 Vict. c. 134; and was also declared, upon being duly registered and the certificate of registration obtained, to be within the 198th section of the same act. After certificate of registration, the amount of composition was tendered to the only dissenting creditors and to their solicitors, and refused; and those creditors (knowing of the deed and of its registration) having arrested the debtor upon a judgment before obtained, the same Commissioner ordered his release. Upon appeal, the Lords Justices decided that the Commissioner had jurisdiction to order his release ; but that the word “creditors,” in the 192nd section, comprised the secured as well as the unsecured creditors; and it appearing that the necessary proportion of creditors had not assented to the arrangement, and that the deed would enure to the benefit of those creditors only who executed it, the true interpretation of the act being that it should be for the benefit of all the creditors,—the order of release was discharged.

This was an appeal by Messrs. Godden, creditors of Thomas Shettle, of Southampton, butcher, against an order of Mr. Commissioner Holroyd, directing that he should be released from custody, on the ground

that he was entitled to protection under the Bankruptcy Act, 1861, as having executed a deed of composition with his creditors within the 192nd section. The deed was

as follows:-"This indenture, made the 12th of August 1862, between Thomas Shettle, of the town of Southampton, butcher, of the one part, and the several other persons whose names and seals are hereunto subscribed and set, being severally creditors in their own right, or in co-partnership, or being agents of creditors of the said Thomas Shettle (and hereinafter called the creditors), of the other part; whereas the said Thomas Shettle being indebted unto the said several persons whose names and seals are hereunto subscribed and set, or their respective principals, in the several sums of money set opposite their respective names in the schedule hereunder written, and being unable to pay the same in full, he has lately proposed to the said creditors, and it has since been mutually agreed between the parties hereto, that the said Thomas Shettle should pay to the said creditors, and that they should accept from him, a cash composition of 48. 6d. in the pound on the full amount, and in full discharge of their respective debts, and that upon payment thereof the said creditors should execute the release and indemnity hereinafter contained. Now this indenture witnesseth that, in pursuance of the said agreement, and in consideration of the premises and of the payment to each of the said creditors aforesaid of a composition of 4s. 6d. in the pound, upon and in discharge of their said respective debts and claims, the receipt whereof they do hereby respectively acknowledge, they, the several creditors, do, and every of them doth, by these presents, fully and absolutely acquit, release and discharge the said T. Shettle, his heirs, executors and administrators, of and from all and singular the debts, sums of money, bills, bonds, notes, accounts, reckonings, costs, charges, damages, expenses, judgments, executions, actions, suits, claims and demands whatsoever, either at law or in equity, which they the said several creditors respectively, or their or any of their partner or partners respectively now have, or shall or may, or otherwise could or might hereafter have, claim, challenge or demand, of, from or against the said T. Shettle, his heirs, executors or administrators, or his or

their lands or tenements, goods or chattels, estate or effects, or any of them, for or by reason or on account of the debts, claims and demands of them, or any of them, respectively, due or owing from the said T. Shettle, and set forth in the said schedule to these presents, and all interest and arrears of interest for or in respect of the same several debts and premises, or any of them, or for or by reason of any other matter, cause or thing whatsoever relating thereto. Provided always, that the release hereinbefore contained shall be without prejudice to and not extend or be construed to extend to prevent any of the said creditors from claiming or realizing any security now held by them, or any of them, or from suing any person or persons other than the said Thomas Shettle, liable to payment thereof, for the recovery thereof. In witness," &c. This deed was executed by twenty-two creditors out of twenty-three, the only dissenting creditors being the Messrs. Godden, the present appellants, who were judgment creditors for 1187. 18s. 10d., and 1747. 58. 7d.; together, 2931. 4s. 5d. The twenty-two creditors executing the deed represented debts amounting to 1,4077. 14s. 3d. Shettle executed the deed on the 20th of August, and it was registered on the following day. On the 25th the certificate of due registration was obtained in the form prescribed by the 19th General Order, with the following note indorsed :- "Note. This

Mr.

certificate is available to the said A. B. (the debtor) for all purposes as a protection in bankruptcy."

On the 26th of August notice of the registration of the deed was given to the Messrs. Godden, and a tender was made to them of the composition for the amounts of their debts respectively, which they refused to accept. Upon this a like tender was made to their solicitor on their behalf, and he also refused it.

On the 24th of October Thomas Shettle was arrested upon a ca. sa. issued at the suit of the Messrs. Godden, notwithstanding the chief registrar's certificate, of which the sheriff's officer had notice at the time of the arrest.

Shettle himself, and one Brooks, who tendered the amount of the composition to the opposing creditors, deposed by affidavit to the foregoing facts. In an affidavit, however, filed by or on behalf of the op

posing creditors, it was stated that one Aldridge, a creditor for 300l., who had executed the deed, had so executed it upon the express agreement that he should receive the composition upon the whole amount of his debt, although he then held securities from the debtor to nearly the full amount of his claim, and had, in fact, as the deponent believed, realized 1207. by the sale of a portion of those securities before he executed the deed. But the allegation was contradicted by Mr. Shettle, who stated that the securities in question belonged to one Watts, a bankrupt, whom he had opposed upon his application for his certificate; that the creditor upon signing the agreement to accept the composition had expressly reserved his right to retain possession of the securities in his hands deposited by Watts, and that the only knowledge which he, Thomas Shettle, had respecting the realization by the creditor of the 1207. from the securities in his hands was derived from the affidavits referred to.

It was admitted on both sides that no leave had been applied for before issuing proceedings against Mr. Shettle, as required by the 198th section of the Bankruptcy Act, 1861, which enacts that "after notice of the filing and registration 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, and a certificate of the filing and registration of such deed under the hand of the chief registrar and the seal of the Court shall be available to the debtor for all purposes as a protection in bankruptcy."

Mr. Shettle therefore applied for his release, and after hearing the question fully argued, Mr. Commissioner Holroyd gave judgment on the 17th of November 1862, in the following words: "It seems to me that the objection made to the want of the requisite amount of assents has been completely answered by the affidavit of the debtor which has just been read. It appears that the securities referred to in the affidavit of Mr. Mackay were not the securities of

Shettle, but of a third party; and that being so, they form no objection to the introduction of Aldridge as a creditor. With respect to the general features, I think that upon consideration of the cases which have been referred to, of Ex parte Castleton (1), and Walter v. Adcock (2), it is my duty, in accordance with the opinions expressed by the Lords Justices in Ex parte Castleton, to decide that composition deeds are within the 192nd section of the act of parliament. I think that the seventh condition of that section does not apply to a case where no trustee is appointed, and that it does not apply to a simple composition deed, that is, a deed providing for the payment of a certain sum in discharge of the debt. There is this further point in the case, that in this deed there is not, as in Walter v. Adcock, a covenant to pay in futuro, but an engagement to pay the amount of the composition down at once; and it would seem that the composition has been actually paid to all the assenting creditors, and tendered to the Messrs. Godden, who are the only dissentients. I must therefore order the debtor to be released. I think, however, that the Court ought to be careful how it interferes with the common law rights of creditors. If these creditors wish to take the opinion of the Lords Justices, I will delay the issuing of the order for release for a few days."

It was from this judgment that the Messrs. Godden appealed.

Mr. G. M. Giffard and Mr. Ernest Reed, in support of the appeal, objected that the deed was bad, being made in favour only of those who should execute it, so that all dissenting from its terms were excluded. The word "creditors" in the 192nd section of the Bankruptcy Act, 1861, included secured and unsecured creditors both, and, taking them together, the number required by the act had not assented. The list of creditors to which Mr. Shettle had sworn was therefore inaccurate and incomplete. To shew the meaning of the word "creditors," the learned counsel referred to the 185th section. Again, as before argued, the deed did not comprise all the creditors, but only those who executed the deed, and the others could claim no advantage under it. The

(1) 31 Law J. Rep. (N.s.) Bank. 71.

(2) 7 Hurl. & N. 541; s. c. 31 Law J. Rep. (N.S.) Exch. 380.

requisite majority had not executed the deed, and from the General Order in Bankruptcy, dated the 22nd of May 1862, it was clear that it was intended that both secured and unsecured creditors should be comprised, as the amounts of their debts were thereby ordered to be placed in separate columns.

[LORD JUSTICE KNIGHT BRUCE.—We cannot recognize the order as of any authority upon the interpretation to be put upon any passage of an act of parliament.]

Composition deeds were not within the 192nd and following sections-Walter v. Adcock (3). Another objection to the deed was, that it contained no cessio bonorum. And as there was no bankruptcy, the Court had no jurisdiction to order the debtor's

release.

Mr. Baggallay and Mr. Doria, in support of the Commissioner's order, argued that the question of jurisdiction to order the prisoner's discharge was settled in Ex parte Castleton (4). The 97th section of the new act shewed that secured creditors were not to be reckoned; and if that view were right, the necessary proportion in number and value of the creditors had executed the present deed. The section expressly included composition deeds, and no objection could be sustained on that ground. The creditors, the appellants, had chosen to disregard the provisions of the act by arresting the respondent without obtaining the sanction of the Court. No cessio bonorum was now necessary; and Walter v. Adcock was plainly distinguishable from the present case, inasmuch as it contained only a covenant to pay in futuro. The dicta in Walter v. Adcock were founded upon this, that if the legislature had intended to introduce composition-deeds for the first time within the purview of the bankrupt law, it would have done so in clear and unmistakeable terms, such intention had been as clearly and unmistakeably shewn as it was possible to be where express words were not used, and therefore those dicta, so far as intention was concerned, were unsupported. Another reason suggested by the learned Barons of the Exchequer was, that not only a cessio bonorum was required, but a cessio bonorum omnium, in accordance

(3) Ubi suprà. (4) Ubi suprà.