Re George Inglefield Ltd

JurisdictionEngland & Wales
Year1933
Date1933
CourtCourt of Appeal
[COURT OF APPEAL] In re GEORGE INGLEFIELD, LIMITED. [NO. 00782 of 1931.] 1932 Feb. 11, 12, 16. 1932 May 25, 30; June 8, 9. EVE J. LORD HANWORTH M.R., LAWRENCE and ROMER L.JJ.

Company - Winding-up - Hire-purchase Agreements - Financing Agreement with Discount Company - Assignment of Goods subject to Hire-purchase Agreements - Whether Contract of Sale or Charge - Sale - Not invalid against Creditors for want of Registration - Companies (Consolidation) Act, 1908 (8 Edw. 7, c. 69), s. 93 - Companies Act, 1929 (19 & 20 Geo. 5, c. 23), s. 79.

A company carrying on a furnishing and drapery business went into voluntary liquidation in September, 1931, and its assets were insufficient for the payment of its creditors in full. A large proportion of its business consisted in letting out furniture on hire-purchase agreements, and for financing these agreements the company had entered into agreements with a discount company.

The agreements were made on a printed form, and provided that the discount company should purchase from the company (described as “the dealer”) any goods the subject of hire-purchase agreements which the dealer should offer to sell, and also the benefit of the respective hire-purchase agreements. The dealer was to submit to the discount company for their approval the hire-purchase agreement in the standard form supplied by the discount company and all information in his possession relating to the hirer. On approval, the discount company was to forward to the dealer a series of bills of exchange to be accepted by the dealer, equal in number to the instalments then payable by the hirer, and in aggregate amount to 75 per cent. of the purchase money payable. In respect of each offer accepted by the discount company the dealer was to send to that company a certificate of delivery of the goods to the hirer, and an acknowledgment of receipt thereof, an absolute assignment to the discount company of the goods and the hire-purchase agreement, a notice of the assignment signed by the dealer and addressed to the hirer (but not then to be used), and the series of bills of exchange. The purchase price on the assignment was to be the same as the total of the instalments of rent, 75 per cent. of which was to be paid forthwith, less an undisclosed amount described as a “finance charge” at the company's rate for the time being. The balance of the purchase price was to be paid by the discount company to the dealer in the form of instalments, equal in number to the instalments of rent payable by the hirer, and equal in amount to the difference between the instalment of rent and the amount of the bill delivered by the dealer. This balance was in fact retained out of the instalments of rent paid by the hirer. The dealer guaranteed to the discount company the payment by the hirer of his rent under every hire-purchase agreement assigned to the company, and by way of collateral security accepted and delivered the above-mentioned bills of exchange, the dealer retaining the difference between the instalment of rent and the bill on every payment. The discount company undertook not to give notice to the hirer of the assignment except in case of default by the hirer or the dealer. After the discount company had received payment from the hirer or the dealer in respect of all hire-purchase agreements comprised in any assignment of the full purchase price, with interest (if any) and costs, the discount company was to allow the dealer to retain all subsequent instalments of rent (if any) and other moneys, and was to account to the dealer for any sums in excess of the purchase price which it had itself received. If the hirer should fail to pay any instalments of rent due under his hire-purchase agreement within seven days after it became due or gave notice to the dealer of his intention to determine such agreement or made default in the observance of any of its terms and conditions, the dealer was forthwith to give notice to the hirer of the purchase by the discount company of the goods, the subject-matter of such agreement and the assignment to the discount company of such agreement, and to require the hirer to pay all sums thenceforth payable under such agreement to the discount company.

On a summons taken out by the liquidator claiming that all assignments of goods and hire-purchase agreements made under the above agreement were mortgages or charges of book debts and therefore void as against the creditors for non-registration under s. 79 of the Companies Act, 1929, and s. 93 of the Companies (Consolidation) Act, 1908:—

Held (reversing the decision of Eve J.), that the agreements entered into between the dealer and the discount company in the above form were for an out-and-out sale, and that the assignments made thereunder did not, therefore, require registration under either of the above sections.

SUMMONS in a winding-up.

The facts, which are more fully stated in the judgment of Eve J., were briefly as follows:—

The company, George Inglefield & Co., Ld., was incorporated in 1915 with a capital of 5000&L and carried on business as retailers of furniture and drapery goods at Dorking. In order to sell furniture on the hire-purchase system it had entered into a series of agreements with a finance company, the Industrial Discount Company, under which the goods the subject of any hire-purchase agreement were assigned, subject to and with the benefit of the hire-purchase agreement, by George Inglefield & Co., Ld., to the discount company. The assignment was expressed to be absolute, and not by way of charge; but the liquidator took out the summons asking for a declaration that all the assignments made under the general agreement or agreements between the parties were in fact charges on book debts or were otherwise within s. 79 of the Companies Act, 1929, or s. 93 of the Companies (Consolidation) Act, 1908, and not having been registered under one or other of these sections were void against the creditors in the winding-up.

The material clauses and effect of the principal agreemen are fully set forth in the judgment of the learned judge.

Clayton K.C. and Wilfrid Hunt for the liquidator. On the general construction of this document it is not an absolute assignment. No notice is to be given to the hirer except in case of his default. The discount company are precluded from making any profit out of the assignment except their finance charge, which is interest for the advance. There is a personal guarantee of the hirer, and clause 18 is a proviso for redemption. The agreement creates a charge on the future book debts of the company, and is void against the creditors. The language of clause 31 of the agreement implies that it is not a transaction of sale.

Cyril Atkinson K.C. and W. N. Stable for the Industrial Discount Company. The document is not a mere charge, but an absolute assignment. The bill of exchange to be given is only a collateral security for the payment of the instalment to the discount company. If at the end of two months the hirer returns the furniture, the bills come to an end, and the furniture becomes the property of the discount company. The object of clause 18 is to give the dealer the right to collect the instalments on his own account and not merely as agents for us. It is not an equity of redemption. The document does not create any charge. It is an out and out sale subject to a hire-purchase agreement. Future instalments payable under a hire-purchase agreement are not book debts: Manchester, Sheffield and Lincolnshire Ry. Co. v. North Central Wagon Co.F1; Helby v. MatthewsF2; Stacey v. Hill.F3 Debts do not include contingent liabilities: Ex parte KempF4; Blakey v. Trustees of Property of PendleburyF5, per Romer J. In In re IsaacsonF6 the facts and the agreement were somewhat similar to those of the present case. An assignment by way of mortgage of a piano and a hire-purchase agreement relating to the piano was impeached, and it was held as regards the piano that it was void as an unregistered bill of sale, but it was severable and good as regards the assignment of the agreement, therefore it was not wholly void. It has never been held that contingent liabilities are debts. Debts which only become payable in future are not debts at all. The case does not come within s. 79 of the Act.

Clayton K.C. in reply.

Cur. adv. vult.

Feb. 16. EVE J. George Inglefield, Ld., was incorporated as a private company on August 13, 1915, with a capital of 5000&L in shares of 1&L each. It went into voluntary liquidation on September 24, 1931, and its assets are insufficient to pay its creditors in full.

Its business was that of drapers and furnishing and general warehousemen, and consisted largely in letting out furniture under hire-purchase agreements. In order to procure capital for the purpose of providing goods to be so let on hire the company from time to time entered into a series of agreements with the respondents, the Industrial Discount Company, Ld., and by this summons the liquidator seeks a declaration that these agreements are void as against him and the company's creditors for want of registration under s. 79 of the Companies Act, 1929, or s. 93 of the Companies (Consolidation) Act, 1908.

His case is that although these agreements may assume the appearance of being sales and absolute assignments, the transactions were in fact mortgages and charges, and to hold the contrary would be to ignore the substance and give effect to the form.

The respondents do not dispute that the substance of the transaction evidenced by the agreement must be looked at and not its mere words, but adopting the opening sentence of Lord Herschell's speech in Helby v. MatthewsF7 they maintain that “the substance must, of course, be ascertained by a consideration of the rights and obligations of the parties, to be derived from a consideration of the whole of the agreement.”

Before embarking on the careful examination of the documents...

To continue reading

Request your trial
41 cases
  • Kearns v Dilleen
    • Ireland
    • Supreme Court
    • 28 July 1997
    ...which the transaction takes place and to the rights and duties imposed by the transaction itself. 18In In re George In ale field Limited 1933 1 Ch. 1 the issue was whether a particular transaction was an absolute assignment or a charge Lord Hanworth M.R. said at p. 17: "It is old law, and p......
  • Stoneleigh Finance Ltd v Phillips
    • United Kingdom
    • Court of Appeal
    • 17 December 1964
    ...of money. The essential characteristics of a mortgage or charge were pointed out in this court in In re ( George Inglefield Ltd. 1933 Chancery page 1), especially by Lord Justice Romer at page 27. It is difficult to see in the transaction between Kane products and Trade services any of the......
  • Carroll v Bourke
    • Ireland
    • High Court
    • 1 January 1990
    ...MCENTIRE V CROSSLEY BROTHERS LTD 1895 AC 457 SALE OF GOODS ACT 1893 S19(1) KNATCHBULL V HALLETT 1880 13 CH 696 GEORGE INGLEFIELD LTD, IN RE 1933 CH 1 FRIGOSCANDIA (CONTRACTING) LTD V CONTINENTAL IRISH MEATS LTD 1982 ILRM 396 COMPANIES ACT 1963 S99 KENT AND SUSSEX SAWMILLS LTD, IN RE 1947......
  • Governor and Company of The Bank of Ireland v Eteams International Ltd
    • Ireland
    • High Court
    • 15 June 2017
    ...over them in the form of a charge, which the bank has failed to register, thus rendering it void. The law 16 In Re George Inglefield Ltd [1933] Ch. 1, the Court of Appeal for England and Wales was required to consider whether various agreements by a furniture company, which later went into ......
  • Request a trial to view additional results
6 firm's commentaries
  • Securitisation 2023
    • Ireland
    • Mondaq Ireland
    • 3 March 2023
    ...Ireland v ETeams (International Ltd) [2019] IECA 145), which endorsed the principles set out in the English cases of Re: George Inglefield [1933] Ch.1, Welsh Development Agency v Export Finance Co. Limited [1992] BCLC 270 and Orion Finance Limited v Crown Financial Management Limited [1996]......
  • Securitisation 2022
    • Ireland
    • Mondaq Ireland
    • 3 February 2022
    ...Ireland v ETeams (International Ltd) [2019] IECA 145), which endorsed the principles set out in the English cases of Re: George Inglefield [1933] Ch.1, Welsh Development Agency v Export Finance Co. Limited [1992] BCLC 270 and Orion Finance Limited v Crown Financial Management Limited [1996]......
  • Securitisation 2022
    • Ireland
    • Mondaq Ireland
    • 3 February 2022
    ...Ireland v ETeams (International Ltd) [2019] IECA 145), which endorsed the principles set out in the English cases of Re: George Inglefield [1933] Ch.1, Welsh Development Agency v Export Finance Co. Limited [1992] BCLC 270 and Orion Finance Limited v Crown Financial Management Limited [1996]......
  • Structured Finance and Securitisation 2010: Country Q&A - Hong Kong
    • Hong Kong
    • Mondaq Hong Kong
    • 1 April 2010
    ...[1988] 1 HKC 97, the Hong Kong Court of Appeal considered and applied the principles set out in the English case of Re George Inglefield [1933] Ch.1. The three essential differences between a sale and a secured loan In a sale transaction, the seller cannot retrieve the subject matter of the......
  • Request a trial to view additional results
9 books & journal articles
  • Bankruptcy and insolvency
    • United Kingdom
    • Construction Law. Volume III - Third Edition
    • 13 April 2020
    ...efect of bankruptcy laws: Perpetual Trustee Co Ltd v BNY Corporate Trustee Services Ltd [2009] EWCA Civ 1160 at [152], per Patten LJ. 39 [1933] 1 Ch 1. 1658 BANKRUPTCY AND INSOLVENCY the consequence that the receiver of the company was held liable for damages in trespass and conversion. 40 ......
  • Table of Cases
    • United Kingdom
    • Wildy Simmonds & Hill Dissenting Judgments in the Law Preliminary Sections
    • 28 August 2018
    ...Gardner v Rowe (1825) 5 Russ 258 214 GCHQ. See Council of Civil Service Unions v Minister for the Civil Service George Inglefield Ltd, Re [1933] 1 Ch 1, 101 LJ Ch 360, [1932] All ER Rep 244, CA 146 Gett v Tabet [2009] NSWCA 76, (2009) 254 ALR 504 49 Gillow v United Kingdom (1986) 11 EHRR 33......
  • The Dollar's Deadly Laws That Cause Poverty and Destroy the Environment
    • United States
    • University of Nebraska - Lincoln Nebraska Law Review No. 98, 2021
    • Invalid date
    ...the majority of the U.S. shift away from gold as a monetary standard occurred on President Franklin Roosevelt's watch. 56. Act of Mar. 9, 1933, ch. 1, title I, § 3, 48 Stat. 2; 12 U.S.C. §248(n) 57. Act of Aug. 14, 1974, Pub. L. No. 93-373, § 2, 88 Stat. 445 (repealing 31 U.S.C. § 443 (1976......
  • SECURITY DEPOSIT ARRANGEMENTS IN INSOLVENCY
    • Singapore
    • Singapore Academy of Law Journal No. 1996, December 1996
    • 1 December 1996
    ...Financial Law Review, March 1996, at 18. 40 Thai Chee Ken v Banque Paribas [1993] 2 SLR 609. See also Re George Inglefield Ltd[1933] Ch 1; Re Curtain Dream plc[1991] BCC 484; Welsh Development Agency v Export Finance Co Ltd[1992] BCLC 148. 41 Broad v Commissioner of Stamp Duties, supra, not......
  • Request a trial to view additional results
14 provisions
  • 12 U.S.C. § 95a, 95b Omitted
    • United States
    • US Code 2023 Edition Title 12. Banks and Banking Chapter 2. National Banks Subchapter IV. Regulation of the Banking Business; Powers and Duties of National Banks
    • 1 January 2023
    ...NOTES CODIFICATIONSection 95a, act Oct. 6, 1917, ch. 106, §5(b), 40 Stat. 415; Sept. 24, 1918, ch. 176, §5, 40 Stat. 966; Mar. 9, 1933, ch. 1, title I, §2, 48 Stat. 1; May 7, 1940, ch. 185, §1, 54 Stat. 179; Dec. 18, 1941, ch. 593, title III, §301, 55 Stat. 839; Proc. No. 2695, eff. July 4,......
  • 12 U.S.C. § 51b-1 Consideration of Preferred Stock In Determining Impairment of Capital; Dividends; Retirement
    • United States
    • US Code 2023 Edition Title 12. Banks and Banking Chapter 2. National Banks Subchapter II. Capital, Stock, and Stockholders
    • 1 January 2023
    ...51d of this title, referred to in text, which was section 304 of the Emergency Banking and Bank Conservation Act, approved March 9, 1933, ch. 1, 48 Stat. 6, as amended, and which authorized the Reconstruction Finance Corporation, upon the request of the Secretary of the Treasury approved by......
  • 12 U.S.C. § 95 Emergency Limitations and Restrictions On Business of Members of Federal Reserve System; Designation of Legal Holiday For National Banking Associations; Exceptions; "State" Defined
    • United States
    • US Code 2023 Edition Title 12. Banks and Banking Chapter 2. National Banks Subchapter IV. Regulation of the Banking Business; Powers and Duties of National Banks
    • 1 January 2023
    ...Samoa, the Trust Territory of the Pacific Islands, or any other territory or possession of the United States. Notes:Source: Mar. 9, 1933, ch. 1, title I, §4, 48 Stat. 2; Pub. L. 96-221, title VII, §705, Mar. 31, 1980, 94 Stat. 187; Pub. L. 97-320, title IV, §407, Oct. 15, 1982, 96 Stat. 151......
  • 12 U.S.C. § 202 Definitions
    • United States
    • US Code 2023 Edition Title 12. Banks and Banking Chapter 2. National Banks Subchapter XIV. Bank Conservation Act
    • 1 January 2023
    ...concern; and the term "State" means any State, Territory, or possession of the United States, and the Canal Zone.Notes:Source: Mar. 9, 1933, ch. 1, title II, §202, 48 Stat. 2; Pub. L. 101-73, title VIII, §801, Aug. 9, 1989, 103 Stat. 441; Pub. L. 109-351, title VII, §725(b), Oct. 13, 2006, ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT