1867 LATHAM V. LAFONE ordinary operation of a bankruptcy, deeds under which the debtor The Court called on Brett, Q.C., and Holker, to support the rule. First, this is a compo- re words of s. 192," or any of such matters" extend to the words " lating to his debts or liabilities, and his release therefrom," and sever them. But if a release is necessary, that word does not mean necessarily an absolute and unconditional release. The covenant not to sue for twelve months, coupled with the proviso that the deed may be pleaded in bar, satisfies the word: Corner v. Sweet. (1) Thirdly, the words of the section are not narrowed by the heading; and if the deed is not within the heading, it is at least a deed relating to the management of the debtor's estate; there is an affidavit of property, and the deed is stamped under s. 195. Its effect is to enable the debtor to realize his assets, and it is not to be assumed that he will act malâ fide. KELLY, C.B. This rule must be discharged. The question is, whether this is a valid deed within s. 192 of the Bankruptcy Act, 1861. First, it is contended that it is not of such a description as to come within that section at all, and the introductory words of the section are relied on to limit its operation. Now certainly this is not a trust deed; no trustee is appointed by it, nor is any trust created. Whether it is a composition deed is open to argument; if I were compelled to decide the point, I should say it was not, and that that phrase must be understood in its ordinary acceptation, as meaning a deed by which the creditors agree to receive a smaller sum in place of a greater one. Nor is it an inspectorship deed; for it contains no provisions for the inspection or carrying on of the debtor's trade. And further, the term letter of licence, which properly describes the deed before us, has a distinct and well-understood meaning; and had it been intended to include such deeds in the section, one cannot but think that that phrase would have been used instead of the ambiguous expressions above mentioned. But I should be sorry to decide the case on so narrow a ground, especially as in cases under this act, deeds of this kind have sometimes been treated as composition deeds within the section. But, although we may refer to the introductory words of the section to put a construction on a doubtful part of the statute, yet if the language of enactment is clear, and includes in express terms such (1) Law Rep. 1 C. P. 456. L VOL. II. 3 1867 LATHAM V. LAFONE. 1867 LATHAM v. LAFONE. an instrument as this, we should not be justified in limiting that sense by the introductory words. The words then of the section are, "Every deed. . . relating to the debts or liabilities of the debtor, and his release therefrom, or the distribution, inspection, management, and winding-up of his estate or any of such matters." The second part of the sentence is in the disjunctive, but the present deed is certainly not within any member of it. The question then arises whether the first part of the sentence is to be read in the conjunctive-that is, whether the deed must relate both to the debts or liabilities of the debtor and to his release therefrom, or whether it is sufficient if it relates to the debts and liabilities alone; for certainly there is in this deed no release in the common sense, but only a provision for suspending the rights of creditors executing or bound. I should be disposed to construe the words as meaning any deed relating to the debtor's debts or liabilities, which may or may not provide also for his release therefrom; and I should not therefore have felt on this ground any insuperable difficulty in admitting the deed, had I been compelled to decide the matter upon the construction of these expressions. But, on the broad ground of the unreasonableness of the provisions of the deed, I decide that it is not within the operation of the act. Looking to the general scope of the enactment, I am of opinion that the intention of the legislature was, to leave to the majority of the creditors the decision of all questions of expediency as to the affairs of the insolvent debtor, but to reserve to the courts of law the determination of the reasonableness of their arrangements. The act has for the first time conferred on a specified majority of creditors the power to bind the rest by their informally given vote; but the protection of the interests of the remainder is committed to the law, and before we can hold the deed binding upon non-assenting creditors, we must see that it is not unreasonable in the mode in which it affects them. Now this deed conveys nothing; it makes no provision for the inspection of the debtor's estate, so as to secure a fund for the payment of debts, and not the slightest benefit in the way of composition is derived under it by the creditors. If there were any such benefit, however small and however distant, it might perhaps not be unreasonable that the non-assenting creditors should be bound. But the deed is, simply and unconditionally, an agreement to give the debtor twelve months to collect his assets and pay his debts. Now this clearly gives him the power, immediately on the execution of the deed, to make away with his assets, and leave his creditors without the possibility of recovering their debts. But it is contended that there is an implied covenant to pay all the creditors in full at the end of twelve months. If there were indeed an express or an implied covenant to that effect, without pronouncing an opinion as to the validity of the deed in that case, I should hesitate to say that it was unreasonable or void. The deeds in the cases referred to (1) did contain such a covenant, though only for a composition; and small and distant as the advantage is, yet, if the creditors think fit to accept it, it is within the act. But it is not possible in law to put such a construction on this deed. There is no recital, such as has been assumed to exist, by which the debtor admits that he owes certain sums of money to his creditors. There is no schedule of creditors referred to in the deed-the parties to the deed are only creditors actually executing or assenting; and the recital only states that the debtor is indebted to the said creditors "in several sums of money," but admits nothing specific. There is nothing, therefore, by which the debtor can be held, by implication or otherwise, to have covenanted to pay the amount of his debts. See, then, what will be the effect of this deed on a debt, against which the statutory limit of time expires during the twelve months' credit which is given. There is nothing here amounting to a sufficient acknowledgment to take the debt out of the statute; nothing to put the creditor in any different position with respect to it, except that by the lapse of the time during which his right of action is suspended, the debt is barred. If there were no other objection than this, it would be enough to shew the unreasonableness of the deed. On that ground, therefore, my opinion is that this rule must be discharged. MARTIN, B. I am of the same opinion. I think the proper rule for construing this statute is to adhere to its words strictly; and it is my strong belief that by reasoning on long-drawn infer(1) See Reeves v. Watts, Law Rep. 1 Q. B. 412, and the cases there referred to. ences and remote consequences, the Courts have pronounced many judgments, affecting debts and actions in a manner that the persons who originated and prepared the act never dreamed of. It is better, I think, if we cannot find words which by strict grammatical construction, and according to their ordinary acceptation, refer to the matter before us, to say that the act is defective, and to refuse to decide otherwise than according to the antecedent law. This case, however, seems to me to be pretty clear. In what the Chief Baron has said as to the unreasonableness of the provisions of the deed, I entirely concur, but I will add this further observation. The covenant not to sue Lafone extends to debts in which he is indebted jointly with any other person. The hands, therefore, of the joint creditor are tied up, not only as against Lafone, but as against the joint debtor, who has no other connection with Lafone or his affairs than that he is jointly indebted with him to the same person, and who is freed from liability to suit, for no other reason than that Lafone has become insolvent and executed this deed. It cannot have been intended that all joint creditors should be placed in this position. But I go further. I think this deed is not within the words of the act, and this is not the first time I have had to consider the question. Various applications were made at Chambers at the end of last year, under the Bills of Exchange Act, 1855, for leave to appear and defend; the ground of defence being the execution of deeds like the present one. I then consulted with Mr. Justice Willes and Mr. Justice Lush, and we all agreed that these deeds were not within the act, and that leave to appear and defend ought not to be given. It is certainly not a trust deed for the benefit of creditors. It is not a composition deed, which I understand in the ordinary sense of the words to mean, a deed by which a man who is unable to pay his debts in full is empowered to pay less in satisfaction of them. Neither is it an inspectorship deed. Then, as to the words of the section itself; it is not a deed relating to the debts and liabilities of the debtor and his release therefrom, but only has for its effect to allow Lafone to go and come at his pleasure for a certain period, with freedom from suit during that time; the other words of the section have no relation to it. A deed to be within this section must, in my opinion, be a |