Bill Of Sale
BILL OF SALE, in its original sense, a legal document assigning personal property, and still used in connexion with the transference of property in ships. The term has come to be applied to mortgages as well as to sales, and the expression "bill of sale" may now be understood to signify generally a document evidencing a sale or mortgage of personal chattels, unaccompanied by an actual transfer of possession to the purchaser or mortgagor.
The first English legislation on the subject was the Bills of Sale Act 1854, which, after reciting that "frauds were frequently committed upon creditors by secret bills of sale of personal chattels, whereby persons are enabled to keep up the appearance of being in good circumstances and possessed of property, and the grantees or holders of such bills of sale have the power of taking possession of the property of such person to the exclusion of the rest of their creditors," provided that all bills of sale, as defined in the act, should be void against execution creditors unless registered. This act was amended by the Bills of Sale Act 1866. These acts were repealed and a new act passed, the Bills of Sale Act 1878, which, in the main, followed the lines of the act of 1854. The scope of this legislation was very much widened by the Bills of Sale Act (1878) Amendment Act 1882, which was intended primarily "to prevent needy persons being entrapped into signing complicated documents which they might often be unable to comprehend, and so being subjected by their creditors to the enforcement of harsh and unreasonable provisions" (Manchester etc. Ry. Co. v. N.C. Wagon Co., 1888, 13 App. Ca. 554). The law is now regulated by these two acts, together with the Bills of Sale Acts of 1890 and 1891, which effected further small amendments by excluding from the operation of the principal acts instruments hypothecating, charging or declaring trusts on imported goods, during the interval between their unloading from a ship and their deposit in a warehouse, or re-shipping.
Under the acts of 1878 and 1882 bills of sale are of two kinds, i.e. absolute bills of sale (where chattels are sold absolutely to a purchaser), and bills of sale by way of security for the payment of money. The Bills of Sale Act 1878 governs both kinds and is the only act which applies to absolute bills. Bills of sale given by way of security for the payment of money on or after the 1st of November 1882 are governed by the act of 1882, which, however, does not apply to absolute bills. Section 4 of the act of 1878 defines a bill of sale as (1) including bills of sale, assignments, transfers, declarations of trust without transfer, inventories of goods with receipt thereto attached, or receipts for purchase moneys of goods and other assurances of personal chattels; the term assurance has been best explained as a document "on which the title of the transferee of the goods depends, either as the actual transfer of the property, or an agreement to transfer," Marsden v. Meadows, 1881, 7 Q.B.D. 80; (2) powers of attorney, authorities or licences to take possession of personal chattels as security for any debt; these words would not include a power of distress for rent in an ordinary lease or bona fide hiring or hire purchase agreements; (3) any agreement, whether intended or not to be followed by the execution of any other instrument, by which a right in equity to any personal chattels, or to any charge or security thereon, shall be conferred; (4) any mode of disposition of trade machinery and attornments and other instruments giving powers of distress to secure a debt or advance. On the other hand, certain assurances and instruments are expressly exempt by statute from the definition: marriage settlements, assignments of ships, assignments for the benefit of creditors, bills of lading and dock warrants, and by the act of 1882, debentures and debenture stock of a company. The expression "personal chattels" is defined as goods, furniture and other articles capable of complete transfer by delivery, and (when separately assigned or charged) fixtures and growing crops.
Absolute Bills. - Absolute bills of sale must be duly attested by a solicitor, and the attestation must state that before execution the effect of it was explained to the grantor by the attesting solicitor. The consideration must be truly stated. The bill of sale, and all schedules and inventories annexed to or referred to in the bill, and also a true copy of the bill and of every schedule and inventory and of every attestation, together with an affidavit stating the time of making or giving the bill, its due execution and attestation and the residence and occupation of the grantor, and every attesting witness, must be presented to, and the copies filed by, the registrar within seven clear days. In the case of absolute bills the effect of non-compliance does not affect the validity of the bill as between the parties to it, but makes it void as against the trustee in bankruptcy and execution creditors of the grantor.
Bills by Way of Security. - All bills of sale given by way of security for the repayment of money must be made in accordance with the form given in the schedule to the act of 1882, and they must not depart from the statutory form in anything which is not merely a matter of verbal difference. The form given in the schedule to the act is as follows: -
This Indenture made the day of between A. B. of of the one part and C. D. of of the other part, witnesseth that in consideration of the sum of £ now paid to A. B. by C. D, the receipt of which the said A. B. hereby acknowledges, he the said A. B. doth hereby assign unto C. D. his executors, administrators and assigns all and singular the several chattels and things specifically described in the schedule hereto annexed by way of security for the payment of the sum of £ and interest thereon at the rate of % per annum. And the said A. B. doth further agree and declare that he will duly pay to the said C. D. the principal sum aforesaid together with the interest then due, by equal payments of £ on the day of And the said A. B. doth also agree with the said C. D. that he will (here insert terms as to insurance, payment of rent, etc., which the parties may agree to for the maintenance or defeasance of the security). Provided always that the chattels hereby assigned shall not be liable to seizure or to be taken possession of by the said C. D. for any cause other than those specified in § 7 of the Bills of Sale Act (1878) Amendment Act 1882.
In witness, etc.
Signed and sealed by the said A. B. in the presence of me E. F. (add witness's name, address and description).
Non-compliance with the requirement of the statute as to form renders a bill of sale void even as between the parties. The bill of sale must have annexed to it an inventory of the chattels comprised in it, and is void, except as against the grantor, in respect of any personal chattels not specifically described. It must be duly attested by one or more credible witnesses (not necessarily by a solicitor, as in the case of absolute bills). Every witness must sign his name and add his address and description. It must be duly registered within seven clear days after the execution thereof, or if it is executed in any place out of England then within seven clear days after the time at which it would in the ordinary course of post arrive in England if posted immediately after the execution. It must truly set forth the consideration. The grantor must be the true owner of the goods described in the schedule; as to any personal chattels of which he is not the true owner, the bill is void, except as against the grantor. Every bill of sale made or given in consideration of any sum under £30 is void. By § 7 of the act personal chattels shall only be liable to be seized or taken possession of in the following cases: - (1) If the grantor make default in payment of the debt or in the performance of any covenant or agreement contained in the bill and necessary for maintaining the security; (2) if the grantor becomes a bankrupt or suffers the goods to be distrained for rent, rates or taxes; (3) if the grantor fraudulently removes the goods from the premises; (4) if the grantor does not, without reasonable excuse, upon demand in writing by the grantee, produce to him his last receipts for rent, rates or taxes; (5) if execution is levied against the goods of the grantor under any judgment. By § 13 personal chattels seized or taken possession of under a bill must not be removed or sold until after the expiration of five clear days from the date of seizure, and, if the goods have been wrongly seized, the grantor may within the five days apply to the High Court or a judge in chambers for an order to restrain the grantee from removing or selling the goods. The Bills of Sale Acts 1878 and 1882 do not apply to Scotland or Ireland. According to Scots law no security or charge can be created over moveable property without delivery of possession. The Irish statutes corresponding to the English acts are the Bills of Sale (Ireland) Act 1879 and the Amendment Act 1883.
The stamp duties payable on an absolute bill of sale are 2s. 6d. on every £25 secured up to £300; over £300, 5s. on every £50. On bills of sale by way of security, 1s. 3d. for every £50 up to £300 secured; over £300, 2s. 6d. for every £100. The fees payable on filing a bill of sale are, 5s. where the consideration (including further advances) does not exceed £100; above £100 and not exceeding £200, 10s.; above £200, £1.
The various trade protection papers always publish the registration of a bill of sale, and the usual effect is, therefore, to destroy the credit of any person giving one.
(T. A. I.)
Note - this article incorporates content from Encyclopaedia Britannica, Eleventh Edition, (1910-1911)