THE MERCANTILE ACTS, 1867 to 1896

Mercantile Act of 1867, 31 Vic. No. 36

Amended by Bills of Sale Act of 1891, 55 Vic. No. 23 Factors Act, 1892, 56 Vic. No. 8 Stamp Act, 1894, 58 Vic. No. 8 Sale of Goods Act of 1896, 60 Vic. No. 6 Mercantile Amendment Act of 1896, 60 Vic. No. 10 (Repealed) Criminal Code Act, 1899, 63 Vic. No. 9 Acts Shortening Act Amendment Act of 1903, 3 Edw. 7 No. 10 Statute Law Revision Act of 1908, 8 Edw. 7, No. 18 Bills of Sale and Other Instruments Act of 1955, 4 Eliz. 2 No. 16

119

An Act to Consolidate and Amend the Laws relating to Mercantile Matters

[Assented to 28 December 1867]

References to Pring's Statutes and to Colonial Acts were omitted from the notes to the sections throughout this Act by the Acts Citation Act of 1903, s. 10.

Collective title conferred by Acts Citation Act of 1903, s. 8 (2).

[Preamble repealed by Statute Law Revision Act of 1908, s. 2.]

ASSIGNMENT OF PERSONALTY

1. Assignment to self and others. 22 & 23 Vic. c. 35 s. 21. Any person shall have power to assign personal property now by law assignable including chattels real directly to himself and another person or other persons or corporation by the like means he might assign the same to another.

Act referred to: Law of Property Amendment Act, 1859, 22 & 23 Vic., c. 35 (Imperial);

see 9 Halsbury's Statutes of England, 2nd ed., p. 700. This section does not extend to choses in action, which were made assignable

(by the Judicature Act (1876), s. 5 (6), title PRACTICE) only after this Act was passed.

POWERS OF ATTORNEY

2. Conveyances, etc., under certain powers of attorney executed after death or revocation and before notice thereof to be valid. Whenever the person who may have executed or shall hereafter execute any power of attorney (whether such person were or be at the time within the colony or not) shall have declared or shall declare therein that such power shall continue in force until notice of his death or of the revocation of such power shall have been received by the attorneys named therein then and in every such case such power shall operate accordingly and every act hereafter done performed or submitted to by the said attorneys within the

120 MERCANTILE LAW Vol. 12

scope of the powers and authority conferred upon them after such death or revocation as aforesaid and before notice thereof shall have been received shall be as effectual in all respects as if such death or revocation had not happened or been made

and a solemn declaration made by any such attorney that he has not received any notice of the revocation of such power of attorney by death or otherwise shall if made immediately before or after executing any such conveyance or other instrument as aforesaid or doing or performing or submitting to any such act as aforesaid be taken to be conclusive proof of such non-revocation at the time of such execution in favour of any person who shall bona fide and for valuable consideration and without notice to himself of any such revocation have accepted any such conveyance or other instrument from or dealt with such attorney in the name of his principal.

As to dealings under power of attorney with land under the Real Property Acts, 1861 to 1963, title REAL PROPERTY, see ibid., ss. 104, 107, 108 and Real Property Act of 1877, s. 13.

Executors administrators and trustees acting or paying money in good faith under power of attorney are protected in the event of death of the principal or avoidance of the power, by the Trustees and Executors Acts, 1897 to 1964, s. 24. title TRUSTEES AND EXECUTORS.

As to delegation of trusts by trustees, see Trustees and Executors Acts Amend­ment Act of 1906, ss. 4, 5, title TRUSTEES AND EXECUTORS.

The general rule is that an agent's authority is determined by the death or bankruptcy of the principal. See 1 Halsbury's Laws of England, 3rd ed., p. 244.

This section does not protect a purchaser who suspects the truth of the declaration, Macmillan v. Mutual Provident Land Investing and Building Society Ltd. (1889), 14 App. Cas. 596. But if the purchaser takes in good faith his title will not be affected by the fact that an attorney who has made the declaration contemplated had notice of revocation, ibid.

3. (Repealed.) Repealed by Sale of Goods Act of 1896, s. 60.

SATISFIED SECURITIES

4. A surety who discharges the liability to be entitled to assignment of aU securities held by the creditor. 19 & 20 Vic. c. 97 s. 5. Every person who being surety for the debt or duty of another or being liable with another for any debt or duty shall pay such debt or perform such duty shall be entitled to have assigned to him or to a trustee for him every judgment specialty or other security which shall be held by the creditor in respect of such debt or duty whether such judgment specialty or other security shall or shall not be deemed at law to have been satisfied by the payment of the debt or performance of the duty

and such person shall be entitled to stand in the place of the creditor and to use all the remedies and if need be and upon a proper indemnity to use the name of the creditor in any action or other proceeding at law or in equity in order to obtain from the principal debtor or any co-surety co-contractor or co-debtor as the case may be indemnification for the advances made and loss sustained by the person who shall have so paid such debt or performed such duty and such payment or performance so made by such surety shall not be pleadable in bar of any such action or other proceeding by him

Provided always that no co-surety co-contractor or co-debtor shall be entitled to recover from any other co-surety co-contractor or co-debtor by

MERCANTILE ACTS, 1867 TO 1896 ss.2-6 121

the means aforesaid more than the just proportion to which as between those parties themselves such lastmentioned person shall be justly liable.

Act referred to: Mercantile Law Amendment Act, 1856, 19 & 20 Vic., c. 97 (Imperia\);

see 4 Halsbury's Statutes of England, 2nd ed., p. 660. See generally, as to the right of subrogation of a surety, 18 Halsbury's Laws

of England, 3rd ed., p. 478; 26 English and Empire Digest, (Rpl.) p. 114. See also Kayley v. Hothersall, [1925] I K.B. 607 (assignment of judgment

debt); Re Lamp/ugh Iron Ore Co. Ltd., [1927] 1 Ch. 308; [1926] All E.R. Rep. 682 (director surety for company for rates); Re Pelechet, McLeod & Co. Ltd. v. Lysnar, [1928] N.Z.G.L.R. 204 (advances made beyond sum to which guarantee limited).

BILLS OF LADING

5. Preamble. 18 & 19 Vic. c. 111. Whereas by the custom of merchants a bill of lading of goods being transferable by indorsement the property in the goods may thereby pass to the indorsee but nevertheless all rights in respect of the contract contained in the bill of lading continue in the original shipper or owner and it is expedient that such rights should pass with the property

And whereas it frequently happens that the goods in respect of which bills of lading purport to be signed have not been laden on board and it is proper that such bills of lading in the hands of a bona fide holder for value should not be questioned by the master or other person signing the same on the ground of the goods not having been laden as aforesaid

Rights under bills of lading to vest in consignee or indorsee. 18 & 19 Vic. c. 111 s. 1. Now therefore be it enacted that every consignee of goods named in a bill of Jading and every indorsee of a bill of lading to whom the property in the goods therein mentioned shall pass upon or by reason of such consignment or indorsement shall have transferred to and vested in him all rights of suit and be subject to the same liabilities in respect of such goods as if the contract contained in the bill of lading had been made with himself.

Act referred to: Bills of Lading Act. 1855. 18 & 19 Vic., c. III (Imperial); see 23 Halsbury's

Statutes of England, 2nd ed., p. 382. The property in the goods does not necessarily pass by endorsement and

delivery of the bill of lading, Sewell v. Burdick (1884), 10 App. Cas. 74. 'The truth is that the property does not pass by the indorsement, but by the contract in pursuance of which the indorsement is made", per Lord Bramwell, ibid., at p. 105. The question is one of intention, see Sale of Goods Act of 1896, ss. 19-22, p. 206, post.

The rights and liabilities which the bill of lading carries with it pass from one endorsee to another; and no liability attaches to intermediate endorsers. but only to the last holder. Smllrthwaite v. Wilkins (1862), 11 C.B.N.S. 842. Successive endorsers are, therefore. not guarantors to the shipowner. and the negotiability of bills of lading is. in this sense, different from that of bills of exchange.

6. Not to affect right of stoppage in transitu or claims for freight. 18 & 19 Vic. c. 111 s. 2. Nothing herein contained shall prejudice or affect any right of stoppage in transitu or any right to claim freight against the original shipper or owner or any liability of the consignee or indorsee by reason or in consequence of his being such consignee or indorsee or of his receipt of the goods by reason or in consequence of such consignment or indorsement.

Act referred to: Bills of Lading Act, 1855, 18 & 19 Vic., c. 111 (Imperial); see

23 Halsbury's Statutes of England, 2nd ed., p. 382. As to stoppage in transitu, see Sale of Goods Act of 1896, ss. 45 et seq., p. 221,

post.

122 MERCANTILE LAW Vol. 12

7. Bill of lading in hands of consignee, etc., conclusive evidence of the shipment as against master, etc. 18 & 19 Vic. c. 111 s. 3. Every bill of lading in the hands of a consignee or indorsee for valuable consideration representing goods to have been shipped on board a vessel shall be conclusive evidence of such shipment as against the master or other person signing the same notwithstanding that such goods or some part thereof may not have been so shipped unless such holder of the bill of lading shall have had actual notice at the time of receiving the same that the goods had not been in fact laden on board.

Act referred to: Bills o.f Lading Act. 1855. 18 & 19 Vic., c. 111 (Imperial); see

23 Halsbury's Statutes o.f England, 2nd ed., p. 382. The nate to. the sectio.n was amended by the Acts Citatio.n Act o.f 1903, s. 10. See further, with respect to. issue and effect o.f bills o.f lading, Sea Carriage

o.f Go.o.ds (State) Act o.f 1930, title SHIPPING, and the Sea Carriage o.f Go.ods Act 1924 (Co.mmo.nwealth).

Questio.ns may arise as to. whether the do.cument is a bill o.f lading within the meaning o.f this sectio.n. In Thl' Marlborough Hill, [1921] 1 A.C. 444, the Privy Council held that a do.cument that did not co.mmence with the usual statement "shipped", but with "received for shipment" was a bill of lading within s. 6 of the Admiralty Court Act, 1861 (Imperial) (now repealed). This case was co.mmented an and distinguished by McCardie, J., in Dialllond A Ikali Export ('orpn. v. Bourgeois, [1921] 3 K.B. 443; [1921] All E.R. Rep. 283; who. there said that such a document, viz., "received for shipment", did not fall within the present Act. "It seems clear", he said, "that no. assignee can invoke the benefits, far example, o.f s. 3 of the Act (s. 7 of Queensland Act), unless the document actually asserts the goods to have been shipped on board. The whole point of the section seems to go if the document do.es not contain such an assertio.n", ibid., at p. 450.

In an action for lump freight, the master can show that the cargo. actually received by him differs in weight from that signed for in the bill of lading, at all events when the weight therein mentioned is mere matter of measurement, Blanchet v. Powel/'s Llantivit Collieries Co. (1874), L.R. 9 Ex. 74. And see Sea Carriage of Goods (State) Act of 1930, s. 6, title SHIPPING.

An owner and his ship are not liable under this section unless the bill of lading has been signed by him or in his name and with his authority, Jessel v. Bath (1867), L.R. 2 Ex. 267; Rosenfeld Hillas & Co. Pty. Ltd. v. The Fort Laramie (1922), 31 c.L.R. 56; 32 C.L.R. 25.

A managing owner, who is one of several owners of a ship, has no implied authority to bind the others by signature to a bill of lading in respect of goads which have not in fact been shipped, ibid. 8-19. [Repealed by Factors Act, 1892, s. 15.1

20-26. [Repealed by Bills of Sale Act of 1891, s. 19.] 27-34. [Repealed by Bills of Sale and Other Instruments Act of 1955, 4 Eliz. 2 No. 16, s. 4, First Schedule.] 35. [Repealed by Criminal Code Act, 1899, s. 3. See now Criminal Code, s. 407, title CRIMINAL LAW, Vol. 3, p. 415.]

36-41. [Repealed by the Bills of Sale and Other Instruments Act of 1955, 4 Eliz. 2 No. 16, s. 4, First Schedule.]

42. [Repealed by Criminal Code Act, 1899, s. 3. See now Criminal Code, s. 407, title CRIMINAL LAW, Vol. 3, p. 415.]

GAMING SECURITIES

43. All notes, etc., mortgages, etc. Where the consideration is for money won by gaming. Or for repayment of money lent at such gaming, etc., shall be deemed made, etc., for illegal consideration. 9 Anne c. 19 s. 1. S & 6 Wm. 4 c. 1. Vide S & 6 Wm. 4 c. 41 s. 3. All notes bills bonds judgments mortgages or other securities or conveyances whatsoever given granted drawn or entered into or executed by any person or persons whatsoever where the whole or any part of the consideration of such

MERCANTILE ACTS, 1867 TO 1896 ss.7-44 123

conveyances or securities shall be for any money or other valuable thing whatsoever won by gaming or playing at cards dice tables tennis bowls or other game or games whatsoever or by betting on the sides or hands of such as do game at any of the games aforesaid or for the reimbursing or repaying any money knowingly lent or advanced for such gaming or betting as aforesaid or lent or advanced at the time and place of such play to any person or persons so gaming or betting as aforesaid or that shall during such play so play or bet that shall be deemed and taken to have been made drawn accepted given or executed for an illegal consideration to all intents and purposes whatsoever any statute law or usage to the contrary thereof in anywise notwithstanding

Provided always that nothing herein contained shall prejudice or affect any note bill or mortgage which would have been good and valid if this Act had not been passed.

Acts referred to: Gaming Act, 1719, 9 Anne c. 19; see 10 Halsbury's Statutes of England,

2nd ed., p. 737. Gaming Act, 1835, 5 & 6 Wm. 4 c. 41; see 10 Halsbury's Statutes of

England, 2nd ed., p. 744. Securities are not rendered illegal where the consideration is in respect of a

bet with a bookmaker on a racecourse, enforceable under the Racing and Betting Acts, 1954 to 1966, s. 139 (3), title GAMING, Vol. 6, p. 386.

Contracts by way of wagering or gaming are not enforceable at law, Racing and Betting Acts, 1954 to 1966, s. 139 (1), ,title GAMIN G, Vol. 6, p. 386. As to what constitutes a gaming contract, see notes to that section.

A mere contract of loan is not avoided. Hence money lent for gaming without security was held to be recoverable as a loan, Barjeall v. Walmsley (1746), 2 Stra. 1249; see also Wettenhall v. Wood (1793), 1 Esp. 17; Robinson v. Bland (1760), 1 Wm. Bl. 234. Money lent for playing an illegal game is however itself tainted with illegality and is not recoverable, M'Kinnell Y. Robinson (1838), 3 M. & W. 434. In Re O'Shea, [1911] 2 KB. 981; [1911-3] All E.R. Rep. 628, it was held that money lent to pay bets already lost was not paid in respect of a contract so rendered void. It has not been decided whether money lent for the purpose of making bets is in the same position.

Cheques fall within this section. See MOll/is v. Owen, [1907] 1 KB. 746; Hyams v. Stuart King, [1908] 2 KB. 696; Goodson Y. Baker (1908), 98 L.T. 415. Cf. Mclntyre v. Boyett (1911), 5 Q,J.P.R. 162.

See also 18 Halsbury's Laws of England, 3rd ed., p. 180; 25 English and Empire Digest, (Rpl.), p. 437.

The court will look behind the document to ,ascertain the true nature of the transaction. See William Hill (Park Lane) Ltd. v. Hofman, [1950] 1 All E.R. 1013; [1950] 1 T.L.R. 915, where the judge, disregarding false recitals and treating as a whole the document. which was properly described as a mortgage, held that it was within the English section of which this section is a transcript.

44. Fraudulent assurances of lands or goods to deceive creditors shall be void. 50 Edw. 3 c. 6. Because that divers people inherit of divers lands and tenements borrowing divers goods in money or in merchandise of divers people of this colony do give their tenements and chattels to their friends by collusion thereof to have the profits at their will and do live a great time with an high countenance of another man's goods and profits of the said lands tenements and chattels till the said creditors shall be bound to take a small parcel of their debt and release the remnant now therefore be it enacted That if it be found that such gifts be so made by collusion that the said creditors shall have execution of the said tenements and chattels as if no such gift had been made.

An actual fraudulent intent is necessary and this must be ascertained by the same rules as are applicable under s. 46, Re Hourigan, [1904] St. R. Qd. 117.

124 MERCANTILE LAW Vol. 12

45. AU deeds of gift of goods to defraud creditors shall be void. 3 Hen. 7 c. 4. That where oftentimes deeds of gift of goods and chattels have been made to the intent to defraud their creditors of their duties and that the person or persons that maketh the said deed of gift occupieth and liveth with the said goods and chattels their creditors being unpaid be it enacted That all deeds of gift of goods and chattels made or to be made of trust to the use of that person or persons that made the same deed of gift be void and of none effect.

An actual fraudulent intent is necessary and this must be ascertained by the same rules as are applicable under s. 46, Re Hourigan, [1904] St. R. Qd. 117.

46. Fraudulent deeds made to avoid the debts of others shall be void and the penalties of the parties to such fraudulent assurances. 13 Eliz. c. 5 preamble. For the avoiding and abolishing of feigned covinous and fraudulent feoffments gifts grants alienations conveyances bonds suits judgments and executions as well of lands and tenements as of goods and chattels which feoffments gifts grants alienations conveyances bonds suits judgments and executions have been and are devised and contrived of malice fraud covin collusion or guile to the end purpose and intent to delay hinder or defraud creditors and others of their just and lawful actions suits debts accounts damages penalties forfeitures not only to the let or hindrance of the due course and execution of law and justice but also to the overthrow of all true and plain dealing bargaining and chevisance between man and man without the which no commonwealth or civil society can be maintained or continued Be it therefore declared and enacted All fraudulent conveyances made to avoid the debt or duty of others shall be void. 13 Eliz. c. 5 s. 2. That all and every feoffment gift grant alienation bargain and conveyance of lands tenements hereditaments goods and chattels or of any of them or of any lease rent common or other profit or charge out of the same lands tenements hereditaments goods and chattels or any of them by writing or otherwise and all and every bond suit judgment and execution at any time had and made or at any time hereafter to be had or made to or for any intent or purpose before declared and expressed shall be from henceforth deemed and taken (only as against that person or persons his or their heirs successors executors administrators and assigns and every of them whose actions suits debts accounts damages penalties or forfeitures by such guileful covinous or fraudulent devices and practices as is aforesaid are shall or might be in anywise disturbed hindered delayed or defrauded) to be clearly and utterly void frustrate and of none effect any pretence color feigned consideration expressing of use or any other matter or thing to the contrary notwithstanding.

An actual fraudulent intent is necessary, Re Hourigan, [1904] St. R. Qd. 177; Wi/liams v. Lloyd (1933), 50 C.L.R. 341; Nunn v. Willsmore (1800), 8 Term Rep. 521.

Voluntary assignments to defeat creditors prima facie amount to fraud, Strathmore (Countess) v. Bowes (1789), 1 Ves. 27; so also does a voluntary settlement reserving power to mortgage, Tarback v. Marbury (1705), 2 Vern. 510; but the court must look at all the circumstances surrounding the execution of the conveyance to ascertain whether it was in fact executed to defeat and delay creditors. Re Holland, [1902] 2 Ch. 360; Re Wise, Ex parte Mercer (1886), 17 Q.BD. 290. See also Re Simms, [1930] W.N. (Eng.) 61 (sale to company). The court declined to infer fraud where the settlor was solvent both before and after making the settlement impeached and did not contemplate again commencing trade, Re Hourigan, supra.

A bona fide assi.gnment of the whole of the debtor's property, present and future, to one person to secure past indebtedness is not voidable, Re Wright (1906), 3 Tas. L.R. 1.

MERCANTILE ACTS, 1867 TO 1896 ss.45·47 125

To render the assurance void, the settlor's indebtedness must amount to insolvency, Stileman v. Ashdown (1742), 2 Atk. 481; or he mus~ be so largely indebted as to show intention to defraud, or fraud must otherwise appear, see Skarf v. Soulby (1849), 1 Mac. & O. 364, at p. 375; Taylor v. Coenen (1876), I Ch. D. 636; Freeman v. Pope (1870), 5 Ch. App. 538; Shaw v. Salter (1865), 2 W.W. & a'B. 159.

It is strong evidence of intention to defraud creditors that at the time of the conveyance the debtor was about to enter into a hazardous business, Re Butterworth (1882), 19 Ch. D. 588; Mackay v. Douglas (1872), L.R. 14 Eq. 106; Re McGrath (1897). 17 N .Z.L.R. 646. As to the effect of a limitation over in case of insolvency in a settlement reserving an interest to the settlor, see Rowe v. Equity Trustees Executors and Agency Co. Ltd. (1894), 21 V.L.R. 762. A deed of assignment for the benefit of creditors which gives the trustees a discretion as to the extent to which they will recognise preferential claims does not necessarily show an intent to defraud creditors, Davey v. Danby (1887), 13 V.L.R. 957. Evidence of intention to defraud was held to be insufficient in Stephen v. Stal/worthy (1881), 2 L.R.(N.S.W.) (Eq.) 55 (land purchased in name of daughter; subsequent entry upon new business); Johnson v. Johnson (1904),4 S.R.(N.s.W.) 585 (assignment by defendant after commencement of action).

A post-nuptial settlement made by way of nomination of trustees under the Real Property Acts, 1861 to 1963, title REAL PROPERTY, and in pursuance of an ante-nuptial agreement was held not to be fraudulent, in Queensland National Bank v. Hirst; B.C.R., June 4, 1875.

An official receiver in bankruptcy is entitled to avail himself of invalidity under this section, as representing creditors, Williams v. Lloyd (1933), 50 C.L.R. 341, at p. 362. A person having a claim under the Testator's Family Maintenance Acts, 1914 to 1952, title SUCCESSION, is not a creditor, Re Thomson, [1933] N.Z.L.R. s. 59. A conveyance made by a surety is impeachable, Re Ridler (1882), 22 Ch. D. 74; Brunskill v. Anderson (1912), 31 N.Z.L.R. 1018.

A person taking under a conveyance made with intent to defraud creditors cannot resist a claim by the grantor that he is a trustee for the grantor unless it is shown that the intent to defraud creditors was carried into effect, Payne v. McDonald (1908), 6 C.L.R. 208; Perpetual Executors, etc., Ltd. v. Wright (1917), 23 C.L.R. 185.

A court exercising bankruptcy jurisdiction can impose terms upon setting aside a conveyance under this section in the same manner as when exercising equity jurisdiction, Re Jones (1924), 24 S.R.(N.S.W.) 533.

See further 17 Halsbury's Laws of England, 3rd ed., p. 650; 25 English and Empire Digest, (Rpl.) p. 171.

47. The forfeiture of the parties to frauduleut deeds. 13 Eliz. c. 5 s. 3. All and every the parties to such feigned covinous or fraudulent feoffment gift grant alienation bargain conveyance bonds suits judgments executions and other things before expressed and being privy and knowing of the same or any of them which at any time shall wittingly and willingly put in use avow maintain justify or defend the same or any of them as true simple and done had or made bona fide and upon good consideration or shall alien or assign any the lands tenements goods leases or other things before mentioned to him or them conveyed as is aforesaid or any part thereof shall incur the penalty and forfeiture of one year's value of the said lands tenements and hereditaments leases rents commons or other profits of or out of the same and the whole value of the said goods and chattels and also so much money as are or shall be contained in any such covinous and feigned bond the one moiety whereof to be the Queen's Majesty her heirs and successors and the other moiety to the party or parties aggrieved by such feigned and fraudulent feoffment gift grant alienation bargain conveyance bonds suits judgments executions leases rents commons profits charges and other things aforesaid to be recovered in the Supreme Court by action of debt bill plaint or information wherein no essoin protection or wager of law shall be admitted for the defendant or defendants.

As amended by Criminal Code Act, 1899, s. 3.

126 MERCANTILE LAW Vol. 12

48. Estates made upon good consideration and bona fide. 13 Eliz. c. 5 s. 6. Provided also that this Act or anything therein contained shall not extend to any estate or interest in lands tenements hereditaments leases rents commons profits goods or chattels had made conveyed or assured or hereafter to be had made conveyed or assured which estate or interest is or shall be upon good consideration and bona fide lawfully conveyed or assured to any person or persons or bodies politic or corporate not having at the time of such conveyance or assurance to them made any manner of notice or knowledge of such covin fraud or collusion as is aforesaid anything before mentioned to the contrary hereof notwithstanding

Preamble. 27 Eliz. c. 4. Forasmuch as not only the Queen's Most Excellent Majesty but also divers of her Majesty's good and loving subjects and bodies politic and corporate after conveyances obtained or to be obtained and purchases made or to be made of lands tenements leases estates and hereditaments for money or other good consideration may have incur and receive great loss and prejudice by reason of fraudulent and covinous conveyances estates gifts grants charges and limitations of uses heretofore made or hereafter to be made of in or out of lands tenements or hereditaments so purchased or to be purchased which said gifts grants charges estates uses and conveyances were or hereafter shall be meant and intended by the parties that so make the same to be fraudulent and covinous of purpose and intent to deceive such as have purchased or shall purchase the same or else by the secret intent of the parties to the same be to their own proper use and at their free disposition colored nevertheless by a feigned countenance and show of words and sentences as though the same were made bona fide for good causes and upon just and lawful considerations Fraudulent conveyances made to deceive purchasers shall be void. 27 Eliz. c. 4 s. 2. Now for remedy of which inconveniences and for the avoiding of such fraudulent feigned and covinous conveyances gifts grants charges uses and estates and for the maintenance of upright and just dealing in the purchasing of lands tenements and hereditaments be it enacted That all and every conveyance grant charge lease estate incumbrance and limitation of use or uses of in or out of any lands tenements or other hereditaments whatsoever had or made any time heretofore or at any time hereafter to be had or made for the intent and of purpose to defraud and deceive such person or persons bodies politic or corporate as have purchased or shall afterwards purchase in fee-simple fee-tail for life lives or years the same lands tenements and hereditaments or any part or parcel thereof so formerly conveyed granted leased charged encumbered or limited in use or to defraud and deceive such as have or shall purchase any rent profit or commodity in or out of the same or any part thereof shall be deemed and taken only as against that person and persons bodies politic and corporate his and their heirs successors executors administrators and assigns and against all and every other person and persons lawfully having or claiming by from or under them or any of them which have purchased or shall hereafter so purchase for money or other good consideration the same lands tenements or hereditaments or any part or parcel thereof or any rent profit or commodity in or out of the same to be utterly void frustrate and of none effect any pretence colour feigned consideration or expressing of any use or uses to the contrary notwithstanding.

This section qualifies s. 46. The protection afforded will extend to the purchaser of any interest whether

legal or equitable. who has no notice of the fraud, Halifax Joint Stock Banking Co. v. Gledhill, [1891] 1 Ch. 31, though the deed be set aside, Harrods Ltd. v.

MERCANTILE ACTS, 1867 TO 1896 ss.48-50 127

Stanton, [1923] 1 K.B. 516; [1923] All E.R. Rep. 592. If the grantee have notice of the fraud he will not be protected, Cornish v. Clark (1872), L.R. 14 Eq. 184A; see also Re Slobodinsky, [1903] 2. K.B. 517.

An existing debt is not a good valuable consideration unless accompanied by forbearance to sue on the creditor's part, Reeves' Official Assignee v. Paterson, [1918] N.Z.L.R. 623. Where an ex post facto consideration relates back to a voluntary promise so as to turn it into an enforceable contract, there is consideration to support a subsequent transfer, Re Hume (1909), 28 N.Z.L.R. 793. As to ~he execution of a mortgage in pursuance of a prior informal agreement to give security for money borrowed, see Smith v. Hope (1883), 9 V.L.R. 217.

See also 17 Halsbury's Laws of England, 3rd ed., p. 654; 25 English and Empire Digest, (Rp!.) p. 182.

The preamble is qualified by s. 50. A purchaser of land will not be compelled to take title to land which, prior

to the sale to him, has been made the subject of a voluntary settlement by the vendor, Purser v. Halloran (1862), 1 S.C.R. 85.

For relevant cases, see Dolphin v. Aylward (1870), L.R. 4 H.L. 486 (when settlor may defeat his own settlement; a mortgagee held a purchaser); Bayspoole v. Collins (1871), 6 Ch. App. 228 (valuable consideration); Townend v. Toker (1866), 1 Ch. App. 446 (covenant of indemnity and expenses incurred, held to be valuable consideration); Cracknall v. Janson (1879), 11 Ch. D. 1; Re Cameron and Wells (1887), 37 Ch. D. 32 (settlement upon marriage conferring interests on child of former marriage); National Trustees Executors and Agency Co. v. R. (1893), 19 V.L.R. 132 (similar to case lastly cited); Gladstone v. Ball (1862), 1 W. & W. 277 (post-nuptial settlement, equitable mortgagee held a purchaser); Doe v. King (1854), Legge (N.S.W.) 829 (failure to register); Crow v. Campbell (1884), 10 V.L.R. 186 (insufficiency as consideration of settlement void under Statute of Frauds); Hubert v. Brown (1895), 16 L.R.(N.S.W.) (Eq.) 11 (conveyance to wife of land purchased by husband); O'Connell v. O'Connell (1894), 20 V.L.R. 253 (ex post facto consideration); Goodbody v. Miller (1893), 19 V.L.R. 581 (ex post facto consideration); Chapman v. Robertson (1887), 13 V.L.R. 682 (inducement to marry not with privity or knowledge of settlor); Colechin v. Wade (1877),3 V.L.R. 266 (effect of certificate of title of volunteer); Partridge v. Preddey (1903), 4 S.R.(N.S.W.) 36 (trustee under voluntary conveyance subsequently purchasing for value).

See also 17 Halsbury's Laws of England, 3rd ed., p. 664; 25 English and Empire Digest. (Rp!.) p. 246.

49. The penalty of the parties to fraudulent conveyances who do avow the same. 27 Eliz. c. 4 s. 3. All and every the parties to such feigned covinous and fraudulent gifts grants leases charges or conveyances before expressed or being privy and knowing of the same or any of them which shall wittingly and willingly put in use avow maintain justify or defend the same or any of them as true simple and done had or made bona fide or upon good consideration to the disturbance or hindrance of the said purchaser or purchasers lessees or grantees or of or to the disturbance or hindrance of their heirs successors executors administrators or assigns or such as have or shall lawfully claim anything by from or under them or any of them shall incur the penalty and forfeiture of one year's value of the said lands tenements and hereditaments so purchased or charged the one moiety whereof to be to the Queen's Majesty Her Heirs and Successors and the other moiety to the party or parties grieved by such feigned and fraudulent gift grant lease conveyance encumbrance or limitation of use to be recovered in the Supreme Court by action of debt bill plaint or information wherein no essoin or protection shall be admitted for the defendant or defendants.

As amended by Criminal Code Act, 1899, s. 3.

50. Conveyances made upon good considerations and bona fide. 27 Eliz. c. 4 s. 4. Provided also that this Act or anything therein contained shall not extend or be construed to impeach defeat make void or frustrate any conveyance assignment of lease assurance grant charge lease estate interest

128 MERCANTILE LAW Vol. 12

or limitation of use or uses of in to or out of any lands tenements or hereditaments heretofore at any time had or made or hereafter to be had or made upon or for good consideration and bona fide to any person or persons bodies politic or corporate anything before mentioned to the contrary hereof notwithstanding.

51. Lands first conveyed with condition of revocation or alteration and after sold for money or other good consideration. 27 Eliz. c. 4 s. 5. If any person or persons having heretofore made or who shall hereafter make any conveyance gift grant demise charge limitation of use or uses or assurance of in or out of any lands tenements or hereditaments with any clause provision article or condition of revocation determination or alteration at his or their will or pleasure of such conveyance assurance grants limitations of uses or estates of in or out of the said lands tenements or hereditaments or of in or out of any part or parcel of them containcd or mentioned in any writing deed or indenture of such assurance conveyance grant or gift and after such conveyance grant gift demise charge limitation of uses or assurance so made or had shall or do bargain sell demise grant conveyor charge the same lands tenements or hereditaments or any part or parcel thereof to any person or persons bodies politic and corporate for money or other good consideration paid or given (the said first conveyance assurance gift grant demise charge or limitation not by him or them revoked made void or altered according to the power and authority reserved or expressed unto him or them in and by the said secret conveyance assurance gift or grant) that then the said former conveyance assurance gift demise and grant as touching the said lands tenements and hereditaments so after bargained sold conveyed demised or charged against the said bargainees vendees lessees grantees and every of them their heirs successors executors administrators and assigns and against all and every person and persons which have shall or may lawfully claim anything by from or under them or any of them shall be deemed taken and adjudged to be void frustrate and of none effect by virtue and force of this present Act.

52. Mortgages lawfully made. 27 Eliz. c. 4 s. 6. Provided nevertheless that no lawful mortgage made or to be made bona fide and without fraud or covin upon good consideration shall be impeached or impaired by force of this Act but shall stand in the like force and effect as the same should have done if this Act had never been had or made anything in this Act to the contrary in anywise notwithstanding.

PARTNERSHIP

53. Limited partnerships may be formed except for banking and insnrance. Limited partnerships may be formed for the transaction of agricultural mining mercantile mechanical manufacturing or other business by any number of persons upon the terms and subject to the conditions and liabilities hereinafter prescribed.

Provided that nothing herein shall authorise any such partnership for the purpose either of banking or insurance.

As to registration of firms, see Business Names Acts, 1962 to 1965, p. 57, ante. A limited partnership is a partnership within the Partnership Acts, 1891 to 1965.

title PARTNERSHIP, and that Act applies to such partnerships except so far as inconsistent with the provisions of this Act, Partnership Acts, 1891 to 1965, s. 5 (3).

54. General and special partners and their liabilities. Every such partner­ship may consist of general partners who shall be jointly and severally responsible as general partners are now by law and of persons to be called

MERCANTILE ACTS, 1867 TO 1896 ss.50·59 129

special partners who shall contribute to the common stock specific sums in money as capital beyond which they shall not be responsible for any debt of the partnership except in the cases hereinafter provided for.

As to liability of general partners, see Partnership Acts, 1891 to 1965, 55. 8 et seq., title PARTNERSHIP.

55. Certificate to be made by the partners specifying names capital etc. All the persons forming any such partnership shall before commencing business sign a certificate containing the style of the firm under which the partnership is to be conducted the names and places of residence of all the partners distinguishing the general from the special partners the amount of capital which each special partner contributes and also if any of the amount contributed by the general partners to the common stock the general nature of the business to be transacted the principal place at which it is to be transacted the time when such partnership is to commence and when it is to terminate.

56. Style of partnership. Such style or firm shall contain the names of general partners only or the name of one such partner with in either case the addition of the words "and another" or "and others" and the general partners only shall transact the business of the partnership and if in the carrying on of such business or in any contract connected therewith the name of any special partner shall be used with his consent or privity or if he shall personally make any contract respecting the concerns of the partnership every such special partner shall be deemed to be a general partner with respect to the contract or matter in which his name has been so used or as to which he shall have so contracted.

57. Certificate to be acknowledged and recorded. If false all shall be liable as general partners. No such partnership shall be deemed formed until such certificate as aforesaid shall have been acknowledged by each partner before some justice of the peace and registered in the office of the registry of deeds in Brisbane in a book to be kept for that purpose open to public inspection and if any false statement shall be made in any such certificate all the persons interested in the partnership shall be liable for all the engagements thereof as general partners Provided that no clerical error or matter not of substance shall be deemed false within the meaning of this section unless some person may have been prejudiced thereby in which case the special partners shall be liable to the person so prejudiced.

58. Certificate to be published for four weeks. A copy of such certificate shall for four weeks next after such registration be published once at least in the Gazette and in some newspaper printed nearest to the intended principal place of business of the partnership and in case such publication be not so made the partnership shall be deemed general.

59. Duration of partnership limited. No partnership under this Act shall be entered into for a longer period than seven years but such partnership may be renewed at the end of that period or at the termination of any shorter period for which a partnership may be formed provided that the partners sign a fresh certificate in the terms of this Act and acknowledge and register the same in the same manncr as if the partnership were an original partnership with limited liability.

A time for termination of the partnership must be fixed by the certificate, s. 55.

130 MERCANTILE LAW Vol. 12

60. Provision for renewal of partnership. Upon every renewal or continuation of a limited partnership beyond the time originally agreed upon for its duration a certificate thereof shall be signed acknowledged registered and published in like manner as the original certificate and every partnership which shall be renewed or continued otherwise than in conformity with the provisions of this section shall be deemed general.

61. Capital stock not to be withdrawn. During the continuance of any partnership under the provisions of this Act no part of the certified capital thereof shall be withdrawn nor shall any division of interest or profit be made so as to reduce such capital below the aggregate amount stated in the certificate and jf any part of such capital shall be so withdrawn or any such division be made so that at any time during the continuance or at the termination of the partnership the assets shall not be sufficient to pay the partnership debts the special partners shall severally be liable to refund every sum by them respectively received in diminution of such capital or by way of such interest or profit and all such sums may be recovered as money had and received by them respectively to the use of the general partners and may in the case of any judgment having been obtained against the general partners be recovered by the plaintiff against the special partners or either of them by process of execution to be issued under such judgment by leave of the Supreme Court.

See also s. 68.

62. Suits to be by and against general partners. All suits respecting the business of any partnership established under this Act shall be prosecuted by and against the general partners only except in the cases in which it is provided by this Act that special partners shall or may be deemed general partners in which cases every special partner who shall have become liable as a general partner may be joined in the suit as a defendant at thc discretion of the party suing.

63. Dissolutions how effected. No dissolution of a limited partnership shall take place except by operation of law before the time specified in the certificate unless a notice of such dissolution shall be signed acknowledged registered and published in like manner as the original certificate.

This section does not prevent dissolution of a partnership by the court under Partnership Acts, 1891 to 1965, s. 38, title PARTNERSHIP, Grm'es v. Mathea (1898), 9 Q.L.1. 32.

64. Liabilities not specially provided for. In all cases not hereinbefore otherwise provided for all the members of a limited partnership shall be subject to the liabilities and entitled to the rights of general partners.

For the liabilities and rights of general partners, see Partnership Acts, 1891 to 1965. title PARTNERSHIP.

65. Accounting. The general partners shall be liable to account to each other and to the special partners for their management of the concern both in law and equity as other partners now are by law.

For liability to account. see Partnership Acts, 1891 to 1965, ss. 31-33, title PARTNERSHIP.

66. Frauds by partners. Every partner who shall be guilty of any fraud in the alfairs of the partnership shall be liable civilly to the party injured to the extent of his damage.

As amended by Criminal Code Act, 1899, s. 3.

MERCANTILE ACTS, 1867 TO 1896 ss.60·69 131

67. Books of account to be kept and to be open to inspection. If the general partners shall not at all times cause regular books of account to be kept or shall not have the same open at all reasonable times to the inspection of the special partners such special partners shall on default herein be entitled to have the partnership dissolved and the accounts thereof taken by the Supreme Court.

68. As to liability of special partners if proper books be not kept or be incorrectly kept. The special partners shall be bound to see that such books are so kept and if such books shall not be so kept or shall with the knowledge or privity of the special partners or any of them be kept incorrectly or contain any false or deceptive entries whereby the ascertainment of the matters mentioned in the first part of the sixty-first section hereof shall or may be affected the certified capital of such special partners or such one or more of them having such knowledge or privity as aforesaid shall as against creditors be deemed to have been withdrawn and they or he shall be liable accordingly under the provisions of the said sixty-first section hereof.

COMMENCEMENT AND SHORT TITLE

69. Commencement of Act. Short title. This Act shall commence on the thirty-first day of December one thousand eight hundred and sixty-seven and may be referred to as the "Mercantile Act of 1867."