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Madell v Thomas

The Law Reports Cited authorities 1 Cited in 20 Precedent Map Related
Vincent
JurisdictionEngland & Wales
Date1891
CourtCourt of Appeal
[IN THE COURT OF APPEAL.] MADELL v. THOMAS & CO.

1890 Dec. 18.

LORD ESHER, M.R., LOPES and KAY, L.JJ.

Bill of Sale - Bills of Sale Act, 1878, Amendment Act, 1882 (45 & 46 Vict. c. 43), s. 3 - Absolute Assignment of Chattels - Hiring Agreement - Substance of Transaction to be looked at, notwithstanding Form - Estoppel.

The plaintiff executed a deed, by which he assigned chattels absolutely to the defendants, and a hiring agreement, by which he hired the chattels from the defendants. These documents did not represent the real transaction between the parties, their intention being merely to create a security for money. The documents were not registered as required by the Bills of Sale Acts. The defendants having seized the goods for breach of the conditions of the hiring agreement, the plaintiff brought an action against them in respect of such seizure:—

Held, that the Court must disregard the form and look to the true nature of the transaction; that the documents amounted to a bill of sale within the Bills of Sale Act, 1882, and were void for want of registration; and that the plaintiff, therefore, was entitled to maintain the action.

In re Watson (25 Q. B. D. 27) followed.

APPLICATION by the defendants to set aside verdict for the plaintiff given by the jury at the trial before A. L. Smith, J., and judgment entered thereon, and to enter judgment for defendants or for a new trial.

The facts were as follows. The defendants were woollen warehousemen. The plaintiff had executed a deed by which, after reciting that he was indebted to the defendants for goods sold and delivered to the amount of 150l., and that he had applied to them for a further advance of 50l., and to accept payment of the 150l. in manner thereinafter appearing, it was witnessed that, in consideration of forbearance to sue in respect of the 150l. and of the sum of 50l. paid, the plaintiff assigned the chattels specified in the schedule thereto to the defendants, to hold to them absolutely. On the same date, the plaintiff executed a hiring agreement, whereby he agreed to hire the chattels “upon the terms and conditions following, viz., on the sum of 200l. being paid to the defendants in forty instalments of 5l. each, the first to be paid on December 31, 1888, and each subsequent instalment on each succeeding Monday, the said effects to belong, without further payment, to the plaintiff; in case of default in punctual payment of any instalment, or in case the said effects should be removed without the consent in writing of the defendants, or in case the hirer should become bankrupt or go into liquidation or compound with his creditors, the instalments previously paid to be forfeited to the defendants, who should be entitled to resume possession of the goods, the understanding being that, until full payment of the said sum of 200l., the said effects remain the sole and absolute property of the defendants, and are only lent on hire to the hirer.” The plaintiff's contention was that the documents amounted to a bill of sale within the Bills of Sale Act, 1882, and, being unregistered, were void. Evidence was given on both sides as to what took place between the parties during the negotiations which ended in the execution of the above-mentioned documents. The learned judge in substance told the jury to consider whether the transaction was an out-and-out sale of the chattels to the defendants, followed by a hiring of them from the defendants by the plaintiff, or that there should be a mere security for a loan under the disguise or cloak of an assignment followed by a hiring, in which latter case they must find for the plaintiff. The jury found for the plaintiff, and the learned judge thereupon entered judgment for the plaintiff for the damages found by the jury.

Channell, Q.C., and C. C. Scott, for the defendants. Under the Bills of Sale Act, 1878, an unregistered bill of sale is only avoided in favour of a trustee in bankruptcy or an execution creditor; and the Bills of Sale Act, 1882, only relates to bills of sale given by way of security for money: Swift v. Pannell.F1 In this case the deed assigns the goods absolutely. The plaintiff is estopped by his own deed from saying that the assignment of these goods was by way of security only. The case is distinguishable from In re Watson.F2 There the question arose as between the trustee in bankruptcy of the grantor and the grantee, and the Bills of Sale Acts are intended to put trustees in bankruptcy and execution creditors in a better position than the bankrupt or execution debtor. Moreover, in In re WatsonF2, there was no question of an assignment by deed. The supposed transfer of the property was by an act of symbolical delivery, and there was nothing contrary to the law of evidence in going into evidence to explain the true intention with which such a delivery was made. It would be contrary to all principle to allow the plaintiff to adduce parol evidence to contradict and avoid the effect of his own deed. The case of Bowes v. FosterF3 shews the distinction in this respect between an assignment by deed which actually transfers...

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