Pennell and Another, Assignees of Cheeseman, a Bankrupt, v Reynolds
| Jurisdiction | England & Wales |
| Judgment Date | 08 July 1861 |
| Date | 08 July 1861 |
| Court | Court of Common Pleas |
English Reports Citation: 142 E.R. 974
IN THE COURT OF COMMON PLEAS AND IN THE EXCHEQUER CHAMBER
S. C. 5 L. T. 286. Approved, In re Coleman, 1865, L. R. 1 Ch. 133. Referred to, In re Ash, 1872, L. R. 7 Ch. 642; Ex parte Windes, 1875, 1 Ch. D. 296.
pennell and ajmothbr, Assignees of Cheesemun, a Bankrupt, r-. reynolds. July 8th, 1801. [S. C. 5 L. T. 286. Approved, In re Cult-man, 1865, I,. It. 1 Ch. 133. Referred to, In re Ash, 1872, L. R. 7 Ch. 642; Ex park Mmies, 1875, I Ch. D. 296.] An assignment by a trader of all his property and effects for a present advance of part of their value is not necessarily an act of bankruptcy.-It is for the jury to say whether under the circumstances the effect of the assignment is to defeat and delay creditors. This was an action brought by the assignees of one Cheeseman, a bankrupt, to recover the value of certain goods of the bankrupt which had been seized by the defendant under a bill of sale executed by the bankrupt before his bankruptcy, and sold. The cause was tried before Wightman, J., at the last Spring Assizes at Lewes, when a verdict was, under the direction of the learned judge, entered for the plaintiffs for 3291., the agreed value of the goods, subject to the opinion of the court upon the following facts,-the court to draw such inferences as a jury might have drawn:- Cheeseman, the bankrupt, was a contractor. The defendant Reynolds was his surety for the performance of certain contracts, and was also under liability for him in respect of several outstanding accommoda [710]-tion acceptances, and had advanced him various sums of money. In December, 1860, Cheeseman being in want of a further advance, and having then an execution in his house, applied to Reynolds for 2601. The latter declined to advance the money without security; and ultimately it was arranged that, in consideration of the present advance of that sum, and to secure the past advances and existing liabilities, Cheeseman should execute a bill of sale of the whole of his horses, carts, household furniture, &c., to Reynolds. 11 C. B. (N. .)711. PENNELL V. REYNOLDS 975 The bankrupt, who was called us a witness, amongst other thing!*, stated that the bill of sole was executed not only as a security for the advance then made, and to cover the liabilities under which Reynolds then stood on his account, but also for the purpose of staving off his other creditors; his expression being,-" My object was that, if any of my creditors molested me, Reynolds might protect me." He however, denied that there was any contemplation of bankruptcy at the time, but stated that he hoped to be able to go on. The bill of sale was executed on the 8th of December, 1800, the seizure under it took place on the 9th of January, 1861, and Gheeseman was adjudicated a bankrupt on the 14th of January. The value of the plant, &c., was about 9001. The gross proceeds of the sale were 5151., the expenses of sale and payments on account of rent, &c., amounted to 1861, -the balance being the sum for which the verdict was taken. On the part of the plaintiffs, it was submitted that the execution of the bill of sale was in itself an act of bankruptcy, as being a conveyance of the whole of a trader's property for an advance of what was confessedly only a part of its value; and also that it was fraudulent and made with intent to defeat and delay the bankrupt's creditors, [711] Lush, Q. C., in Easter Term last, obtained a rule nisi to enter a verdict for the defendant, " on the ground that the evidence did not entitle the plaintiffs to recover." BoviU, Q. C., G. Denman, Q. C., and Hannen, shewed cause. Formerly, it was alwaya considered that a trader who executed an assignment of the whole of his property, and thus put it out of his power to carry on his trade, thereby committed an act of bankruptcy. Subsequent cases, however, decided that, where the assignment was for a present advance of their value, though it consisted of the whole of the party's goods, it was not an act of bankruptcy. Thus, in Sieberl v. Sjiotmer, 1 M. & W. 714, Lord Abinger says: "If a man assigns the whole of his effects, not for a new consideration, but for an outstanding debt, that is an act of bankruptcy; because the very nature of the transaction prevents him from carrying oti his trade." And Alderson, B., says: " If an ei/uivalent is given, there is only a change of the nature of the property which the party has, but not a conveying of it away." In Lindon v. Sharp, 7 Scott, "N. E. 730, G M. & G. 895, one M., a trader, being indebted to his bankers, and being pressed by them for security, executed a conveyance to them of certain stock and effects enumerated in a schedule annexed to the deed, with a power of sale on default in payment of 10001. ou demand : the deed recited that M. was indebted to the bankers in 10001., but it contained no stipulation for fresh advances by them; and, though it did not in terms purport to convey all M.'s property, it appeared that the agent of the bankers who negotiated the transaction was aware that M.I in reality possessed no other property : M. retained possession of the effects so eonvbyed until a few days before a fiat in bankruptcy issued against him: [712] and it was held that the execution of this deed was an act of bankruptcy. Here, the assignment was of substantially the whole of Cheeseman's property. If the defendant had at the time advanced him the whole value, according to the more recent authorities, the execution of the deed would not have been an act of bankruptcy. But the advance being of little more than a fourth part of the value,-the rest of the consideration being the liability as surety, which is equivalent to a past advance (Leake...
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