L. JJ. 1872 Ex parte In re assignment, but that he declined to take one because the giving a bill of sale would cripple the bankrupt. The bill of sale was as follows:-[His Lordship stated the material parts of the deed of assignment, and continued :-] Under the above £100 was bonâ fide It was admitted that the bill of sale was a conveyance of the whole of the bankrupt's effects. The property comprised in the bill of sale included horses and utensils, £230; stock-in-trade at cost price, £194; book debts, £294; making altogether £718. Some deduction ought probably to be made from the amount in estimating the real value of the property conveyed, but there was no evidence what the deduction ought to be. circumstances, the Chief Judge held that the advanced on the security of the bill of sale, and that this was sufficient, on the authority of recent cases, to prevent the bill of sale being an act of bankruptcy. We agree that the authorities establish, as a general rule, that where a sum of money is advanced upon the faith of a contract that a bill of sale shall be given, the sum so advanced is to be treated as advanced upon the credit of the bill of sale, and is not to be considered as a past debt, and also that an assignment by a debtor of all his effects, partly as a security for a past debt and partly as a security for a substantial fresh advance, is not necessarily an act of bankruptcy: Hutton v. Cruttwell (1); Pennell v. Reynolds (2); Lomax v. Buxton (3); Mercer v. Peterson (4); Allen v. Bonnett (5). The present case, however, appears to us to differ from all that have been hitherto decided in some very material particulars. In the first place, the only sum which it was contended could be treated as a fresh advance made upon the credit of the bill of sale, namely, the £100, bears a much smaller proportion both to the past debt and to the value of the property conveyed than in any of the previous cases; and in the next place, according to the evidence, there was no absolute promise, at the time when the £100 was advanced, that a bill of sale should be given in all events, but only a conditional promise that if the £100 was not repaid in a week or ten days, then a bill of sale should be given to secure both the £100 and the past debt (1) 1 E. & B. 15. (2) 11 C. B. (N.S.) 709. (3) Law Rep. 6 C. P. 107. (4) Law Rep. 2 Ex. 304; Ibid. 3 Ex. 104. (5) Law Rep. 5 Ch. 577. of £624; and there is also evidence from which we infer that it (1) 11 C. B. (N.S.) 709. (4) Law Rep. 2 Ex. 304; Ibid. 3 Ex. 104. (5) Ibid. 6 C. P. 107. (6) Law Rep. 5 Ch. 577. L. JJ. 1872 Ex parte In re ASH. L. JJ. 1872 Ex parte In re ruptcy took place, and the true ground of the decision appears to have been that it was too late to rely on the execution of the deed as an act of bankruptcy, though Lord Hatherley recognises the rule that a substantial fresh advance will prevent an assignment of all the estate and effects of a trader being an act of bankruptcy. In the present case the fresh advance is less than a sixth of the old debt, and not more than from a fifth to a sixth of the property conveyed. We do not, however, think that we can lay down as a matter of law that the smallness of the amount of the advance necessarily makes the bill of sale an act of bankruptcy; but we think it affords strong evidence that the principal object of the parties in the whole transaction was, not to enable the bankrupt to continue his trade, but to secure to Mr. Wells the repayment of his past advances. Then the other circumstances of the case which we have before pointed out are to be taken into consideration. It appears to us that Mr. Wells made the advance of the £100 to the bankrupt, taking from him a promise that he would repay it in a week or ten days as a test whether he could go on or not. When Mr. Wells was told by the bankrupt at the beginning of the interview between them that he required a further advance of £300, he must have known that in all probability a temporary advance of £100 would be insufficient for the purpose, and we cannot help thinking that he limited his advance to £100, not because he thought that sum would be sufficient to enable the bankrupt to go on, but because he calculated it was the sum which the property to be assigned to him could secure in addition to the money already advanced. Then we think we ought to take into consideration that the promise to give a bill of sale made at the time when the £100 was advanced was but a repetition of promises previously made that a bill of sale should be given in time to save Mr. Wells from loss. Although we do not dispute the rule that where a sum of money is advanced on the faith of a promise that a bill of sale shall be given, such sum is to be treated as a present advance on the security of a bill of sale, we do not think this rule will protect transactions where the giving of the bill of sale is purposely postponed until the trader is in a state of insolvency, in order to prevent the destruction of his credit, which would result from registering a bill of sale. We think that such a postponement is evidence of an intention to commit an actual fraud against the general creditors. In the present case we have no doubt that if Mr. Wells had refused to advance the further sum of £100, and a bill of sale of all the bankrupt's effects had then been given, the execution of the bill of sale would have been an act of bankruptcy, notwithstanding the previous promise of the bankrupt that he would give a bill of sale. Then ought it to make any difference that such a small further sum of £100 was advanced upon a promise that it should be repaid in a week or ten days, and that if it was not repaid a bill of sale should be given? We are of opinion that it ought not. The £100 was applied in payment of debts previously due from the bankrupt; but as the debt to Mr. Wells was increased by £100, the other creditors obtained no advantage from the payment. It was argued, no doubt, that the advance of £100 was to enable the bankrupt to go on with his trade, and that if he had been able to go on with his trade, that might have been for the advantage of the other creditors; but we are of opinion there was no reasonable probability, and that both Mr. Wells and the bankrupt must have known there was no reasonable probability, that the advance of £100, to be repaid in a week or ten days, would enable the bankrupt to go on. We are of opinion that if we were to hold this bill of sale to be valid, we should practically abrogate the rule that the assignment of the whole of a debtor's effects in consideration of a past debt is an act of bankruptcy, and should in every case enable a favoured creditor, who can trust his debtor to give him a bill of sale of all his property when required, to obtain payment of his debt in full to the prejudice of the other creditors. The result is, that so much of the order of the Chief Judge as relates to the bill of sale must be reversed, and that so much of the order of the County Court Judge as declared that the deed was invalid as against the trustee and an act of bankruptcy must be affirmed. We think that the trustee should have his costs out of the estate, but that there should be no other order as to costs. Solicitors for the Appellant: Messrs. Cope, Rose, & Pearson, for Messrs. Fisher & Hodges, Newport, Shropshire. Solicitors for the Respondent: Messrs. Mead & Son. VOL. VII. 3 E 1 L. JJ. 1872 June 21. In re GENERAL ROLLING STOCK COMPANY. A company was ordered to be wound up in February, 1865. The certificate of debts and claims was made in December, 1870; and in January, 1871, a dividend was paid on the debts which had been established. In March, 1871, the holder of bills of exchange to a large amount, which had been accepted by the company and had become payable in February, 1865, gave the first notice of his claim and applied for leave to prove, not disturbing previous dividends. The proof having been rejected by the Master of the Rolls, on the ground that the debt was barred by the Statute of Limita tions:- Held, on appeal, that by the Companies Act, 1862, the assets are made applicable to the payment of all liabilities of the company subsisting at the date of the winding-up order; that from that time the Statute of Limitations does not run against a creditor, and that the claimants were entitled to prove, not disturbing former dividends. THIS HIS was a motion by way of appeal from a decision of the Master of the Rolls. An order was made on the 11th of February, 1865, for winding up the General Rolling Stock Company, Limited. The general certificate as to debts and claims was made on the 14th of December, 1870. In pursuance of an order dated the 29th of December, 1870, the liquidator, in January, 1871, paid to the creditors whose debts and claims had been admitted by the certificate a dividend of 7s. in the pound. On the 17th of March, 1866, an order was made for winding up the Joint Stock Discount Company, Limited. This company was the holder of acceptances of the Rolling Stock Company for sums amounting to £25,500, which fell due some in February, 1865, and the rest at the beginning of March, 1865. Owing to some unexplained omission, no claim was made in the winding-up of the Rolling Stock Company in respect of these bills till the 31st of March, 1871, when the liquidators of the Joint Stock Discount Company sent in a claim for £18,969 11s. 1d., the balance of principal money and interest due on the bills up to the 11th of February, 1865. The claim being resisted, the liquidators of the Joint Stock |