Bittlestone and Others v Cooke and Others
| Jurisdiction | England & Wales |
| Judgment Date | 29 April 1856 |
| Date | 29 April 1856 |
| Court | Court of the Queen's Bench |
English Reports Citation: 119 E.R. 875
IN THE COURT OF QUEEN'S BENCH AND EXCHEQUER CHAMBER
S. C. 25 L. J. Q. B. 281; 2 Jur. N. S. 758. Discussed, In re Colemere, 1865, L. R. 1 Ch. 134. Distinguished, Woodhouse v. Murray, 1867-68; L. R. 2 Q. B. 638; L. R. 4 Q. B. 31; Ex parte Foxley, 1868, L. R. 3 Ch. 523. Commented on, Bew v. Bill, 1868, 16 W. R. 761. Discussed, Martin v. Willyams, 1869, 20 L. T. 353. Referred to, Ex parte Fisher, 1872, L. R. 7 Ch. 643; Harrison v. Cohen, 1875, 32 L. T. 720.
8 EL 4 BL. 197. BITTLESTONE V. COOK.E 875 thomas bittlestone, john jones and thomas baylis, Assignees of James Bough, a Bankrupt, against william cocike, samuel hindf.ev and david Low, Defendants. Tuesday, April 29th, 1856. B., a trader, by bill of sale, conveyed all his stock, and all the stock that should during the continuance of the security become his, with a power of sale, to C., as a security for money to be advanced by C. The bill of sale was drawn up aa a security for an existing debt, as well as for fresh advances ; but this was a mistake, the whole consideration being fresh advances not to exceed a certain sum. C. made the advances; the property in fact was of about three times the value of the advances. B. was at this time in reality insolvent: but the Court, which had power to draw inferences of fact, drew the inference that the advances were bona fide asked for and made with a view to keep the business going, and in the belief that they would enable B. to get over his difficulties. Afterwards C. took possession of the goods. B. being declared a bankrupt, his assignees brought trover against C., contending that the transaction in question was itself an act of bankruptcy. On a case stating these facts, in which the Court had power to draw inferences of fact:- Held, that the transaction must be viewed as if the bill of sale had been drawn aa it was intended to be, entirely aa a security for fresh advances.-That the effect of pledging the whole of the trader's property for such advances was not necessarily to delay his creditors, aa the advances, even if bearing a small proportion to the value of the property pladged, might be of more advantage to the trader and his creditors than the property itself; and, consequently, that the bill of sale in this case, being in fact bona fide, was not, in point of law, fraudulent, nor an act of bankruptcy. [S. C. 25 L. J. Q. B. 281; 2 Jur. N. S. 758. Discussed, In re Oolemcre, 1865, L. R. [ Ch. 134. Distinguished, WowLhouse v. Murray, 1867-68; L. li. 2 Q. B. 638; L. R. 4 Q. B. 31; Ex, parte Foxley, 1868, L. B. 3 Ch. 523. Commented on, Bew v. Bill, 1868, 16 W. R. 761. Discussed, Martin v. Willyams, 1869, 20 L. T. 353. Referred to, Ex parte Fisher, 1872, L. R. 7 Ch. 643; Harrison v. Cohen, 1875, 32 L. T. 720.] Trover for carpets, rugs, and other worsted fabrics, the property of the plaintiffs, as assignees of Bough, a bankrupt. Pleas, 1. Not guilty. 2. That the goods were not the plaintiffs'. Issues thereon. [297] On the trial, before Lord Campbell C.J., at the Guildhall Sittings after Michaelmas term 1854, a verdict passed for the plaintiffs, subject to a case; by which it appeared that James Bough, the bankrupt, was a manufacturer at Kidderminster, and the defendants yarn warehousemen in London. Bough was bound by articles of agreement to consign all his goods to the defendants under a penalty of 5001. He had broken this agreement, and had, on 9th May 1853, on this account given the defendants a promissory note for 5001., which was never paid. Nothing ultimately turned on the existence of this note, which, it appeared, was merely taken by the defendants in terrorem, without any intention at any time to enforce it; but it is necessary, in order to explain part of the case, to state the existence of a note of this precise amount, and that it was agreed that it was sufficiently shewn to be merely accidental. Bough continued, after this, to make consignments of his manufactures to the defendants, who made him advances by accepting drafts to an amount never exceeding the value of the consignments. On the 27th January 1854, the value of the consignments in the defendants' hands was about 46001., and the acceptances then running were about 40001. The case stated a correspondence and facts, from which it appeared that, in the latter part of 1853, Bough was embarrassed ; that the defendants were perfectly aware of this, and were willing to assist him, but did not know the whole extent of his difficulties; and that Bough, who was struggling to keep his business going, deceived them as to the extent of his embarrassments. The case then proceeded as follows. On the evening of the 25th of January 1854, the bankrupt came to London, and on the same evening had an interview with the defendants; at which meeting he [298] produced a rough statement of his affairs, written out by himself in a small account book, and which the bankrupt stated he had copied from his stock book, and 876 BITTLESTONE V. COOKE 6 EL ft BL, 299. that it shewed the exact state of his affairs, and his last stock taking at Christmas 1853. At this meeting, the state of the bankrupt's affairs was gone into; and he represented to the defendants (as waa also shewn by the written statement of his affairs before referred to) that he was not only solvent, but that he could retire from business with a clear surplus of at least 11001., after paying all his debts, and after making an allowance of 10001. for the difference between the value of his stock and what it would sell for. A calculation was made by the bankrupt, at this meeting, as to what bills of his were coming due for the next three weeks ; and they were found to amount to 15141. A calculation was also made by the defendants of what goods the bankrupt was likely to send the defendants during the same period ; and it was considered between them that he would require something between 5001. and 8001. to meet his payments, including the bills. The bankrupt therefore proposed that the defendants should advance him between 5001. and 8001. to meet his payments, including the bills...
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