1865. Nov. 15. A deed of Bankruptcy not invalid contains an debtor's estate the composi tion the debtor may hold and enjoy the estate and effects, and use and deal with the same. The 7th con dition of the 192nd section JOHNSON V. BARRATT. DECLARATION for goods bargained and sold, &c. Plea by way of equitable defence.-That after the accruing of the plaintiff's claim, and after the 11th October, 1861, the defendant was indebted to the plaintiff and divers other persons, and thereupon, after the commencement of this suit, and when the defendant was indebted as aforesaid, a deed, being an indenture bearing date, &c., was made, &c.-The plea then set out the deed (so far as material) as follows: This indenture, made the 28th day of April, 1865, between Thomas Barratt, of, &c., tailor and draper, hereinafter called the debtor, of the first part, Edward Genever, of, &c., on behalf and with the assent of the creditors of the said Thomas Barratt, parties hereto, of the second part, and the several persons, companies and firms who are creditors of the said debtor, hereinafter called the creditors, of the third part. Whereas the said debtor hath proposed to pay to all his creditors, as well those who assent as those who shall not assent to or execute these presents, a composition of 5s. in the pound in satisfaction and discharge of to the trustee, their several debts by two equal instalments of 2s. 6d. in the pound in manner following, that is to say 2s. 6d. in the pound upon or immediately after the date of the registration of these presents, and the remaining 2s. 6d. in the of the Bank- the debtor's property must be given up but that if the deed provides for its being given up, in order to bind nonassenting creditors, the property must be given up in accordance with the terms of the deed. A deed under the Bankruptcy Act, 1861, is not invalid because it contains no reservation of rights against sureties, where it does not appear that there are any sureties. Nor is such a deed invalid because it releases the debtor in consideration of his covenant to pay the composition, not in consideration of its payment. Where the release is absolute, the deed may be pleaded without averring a tender of the composition money. pound in three calendar months from the day of the date of the registration of these presents, the last of such said instalments to be secured by the promissory note of the said debtor, and of Henry Barratt, of, &c., bearing date on the day of the registration of these presents as aforesaid, and also by the covenant and assignment of the said debtor hereinafter contained. Now this indenture witnesseth that the said debtor doth hereby, for himself, his heirs, executors and administrators, covenant, promise and agree to and with the said Edward Genever, of the second part, and also to and with all his said creditors, and their and each of their heirs, executors, administrators and assigns, that he, the said debtor, his executors and administrators, shall and will pay to all his said creditors, as well those who shall assent as those who shall not assent to or execute these presents, a composition of 5s. in the pound upon their several and respective debts, in the proportions, at the times and in manner hereinafter mentioned, that is to say, 2s. 6d. in the pound upon or immediately after the day of the date of the registration of these presents, and the remaining 2s. 6d. in the pound at the expiration of three calendar months from the time of such registration as aforesaid, the last of such said instalments to be secured by the promissory note of the debtor and of Henry Barratt, of, &c., bearing date and to be delivered to the said creditors on the day of the date of the registration hereof. And this indenture further witnesseth that for the further and better securing the payment of the said composition of 5s. in the pound as aforesaid, he, the said debtor, hereby conveys and assigns all his estate and effects, both real and personal, of whatsoever nature or kind, and wheresoever situate, which now are or hereafter during the continuance of these presents may come into his possession, or to which he may become entitled, whether in possession or reversion, VOL. IV.-H. & c. с EXCH. 1865. JOHNSON บ. BARRATT. remainder or expectancy, unto the said Edward Genever absolutely: Provided nevertheless that until default shall be made in payment of the said composition, or either of the instalments thereof, in pursuance of the covenant of the debtor hereinbefore contained, it shall be lawful for the said debtor, his executors, administrators and assigns, to hold and peaceably enjoy the real and personal estate and effects hereby conveyed and assigned, or intended so to be, and to use and deal with the same, and also to carry on his trade as a tailor and draper without any interruption or disturbance of or from the said Edward Genever, or by any of his creditors, &c.; but in case default shall be made in payment of the said composition, or either of the said instalments, to either or any of his said creditors according to the covenant of the said debtor hereinbefore contained, it shall be lawful for the said Edward Genever, his executors, administrators and assigns, to apply and administer all the said estate and effects of the debtor for the benefit of the creditors of the said debtor in like manner as if the said debtor had been duly adjudged bankrupt. And this indenture also witnesseth that in consideration of the covenant and assignment hereby made by the debtor as aforesaid the said several and respective creditors of the said debtor by themselves, or by their agents or attornies, do hereby for themselves severally and respectively, and for their several and respective heirs, executors and administrators, and their several and respective partner and partners, and not one of them for the acts or deeds of the other or others of them, but each of them for his own acts, and his heirs, executors and administrators only, and for the acts and deeds of his partners or partner only, acquit, release and discharge the said debtor, his heirs, executors and administrators, from all debts due to the said creditors respectively from the said debtor, and from all ac tions, suits, judgments, executions, claims and demands whatsoever in respect thereof. In witness, &c.-Averments: that a majority in number, representing threefourths in value of the creditors of the defendant whose debts respectively amounted to 10l. and upwards, did in writing assent to and approve of the said deed, and the said Edward Genever, the trustee appointed by the said deed, executed the same; and the execution of the said deed by the defendant was attested by a solicitor; and within twenty-eight days from the day of the execution of the said deed by the defendant the same was produced and left (having been first duly stamped) at the office of the chief registrar of the Court of Bankruptcy for the purpose of being registered, and together with such deed there was delivered to the said chief registrar an affidavit by the defendant that a majority in number, representing threefourths in value of the creditors of the defendant whose debts amounted to 107. or upwards, bad in writing assented to and approved of the said deed, and also stating the amount in value of the property and credits of the defendant comprised in the said deed; and the said deed did, before the registration thereof, bear such ordinary and ad valorem stamp duties as were provided by the Bankruptcy Act, 1861, in that behalf; and immediately on the execution of the said deed by the defendant possession of all the property comprised therein of which the defendant could give or order possession was given to the said Edward Genever, and at the time of the execution of the said deed the plaintiff was a creditor of the defendant in respect of the claim herein pleaded to, within the meaning of the Bankruptcy Act, 1861, and all conditions having been performed, and all things having happened, necessary in that behalf, the plaintiff became, and was, and is, bound by the said deed as if he had been a party thereto and had 1865. JOHN SON v. BARRATT. 1865. JOHNSON V. BARRATT. EXCHEQUER REPORTS. duly executed the same; and the defendant has always been ready and willing to pay the first instalment of 2s. 6d. in the pound on the amount of the plaintiff's claim, and to give the plaintiff the promissory note of himself and the said Henry Barratt for the amount of the second of the said instalments, bearing date the day of the said registration, and payable to the plaintiffs three months after date, and he now brings into Court the sum of 57. 18s. 6d., being the full amount of the said instalment ready to be paid to the plaintiff, and before pleading this plea he tendered to the plaintiff the amount of the said first instalment and the said promissory note. Demurrer, and joinder therein. Macnamara, in support of the demurrer.-The deed is void as against non-assenting creditors on several grounds. First, it purports to assign all the debtor's property to a trustee, and yet it provides that the debtor may retain possession of and use it, and carry on his trade until default in payment of the composition. A deed containing such a provision is unreasonable, illusory, and in contravention of the 7th condition of the 192nd section of the Bankruptcy Act, 1861, which requires the debtor, immediately on the execution of the deed, to deliver up possession of the property comprised therein. The Court then called on H. James, to support the plea. First, a cessio bonorum is not necessary, and, notwithstanding the 7th condition of the 192nd section, a deed may be valid although the debtor does not give up possession of any part of his property: Clapham v. Atkinson (a). There are two ways in which the 7th condition may be read, either that the deed (a) 4 B. & S. 730. |