said C. D., for any cause other than those specified in paragraph 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. [witnesses, name, address, and description].

Noncompliance with the requirements of the statute as to form renders a bill of sale void even as between the parties.

Other Requisites of a Bill of Sale.

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 attested by one or more creditable witnesses, not necessarily by a solicitor. It must be duly registered within 7 clear days after the execution thereof, or if it is executed in any place out of England then within 7 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.

By paragraph 7 of the act referred to, personal chattels shall be liable to be seized or taken possession of only in the following cases: 1. If the grantor make default in payment of a 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 allows the goods to be distrained for rent rates or taxes;

3. If the grantor fraudently 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.

Various trade protection papers usually publish the registration of a bill of sale, and the common effect is, therefore, to affect the credit of any business firm or person giving them.

Extent of Hire-Purchase Business.

A huge business is done in Great Britain in the sale of machinery, agricultural implements, automobiles, furniture, and musical instruments on the hire-purchase plan. This method of payment is particularly prevalent in the sale of automobiles and furniture and musical instruments. While figures are not available for the other classes, it is reported that 60 per cent of the automobiles are so sold, and it is probable that only a slightly lower figure applies to furniture. In general, phonographs and pianos are the only musical instruments so bought, but in them a large trade is done under these conditions; in fact, in regard to pianos it has been held, in a reported case, that the practice is so common as to have become a custom" in the eyes of the law. The same custom is recognized by British law in regard to barges, gas and steam engines, safes, printing machinery, railway cars, and sewing machines. While the case has not yet been reported which has led to the extension of this recognition to the hire-purchase of automobiles, there seems little doubt that when occasion arises the extension will be made.

At present there are four large companies operating in Great Britain in the handling of paper arising from the hire-purchase of motor cars. All operate on very similar lines, and in no case do they themselves carrying the paper which they handle. After taking up the paper from the motor-car selling agency or from the individual making the purchase, they in turn rediscount it with the banks, thus acting merely as channels through which the handling of such paper is effected.

AUSTRALIA

Assistant Trade Commissioner Elmer G. Pauly, Melbourne

Australian law recognizes a form of conditional sale in which title does not pass until the last installment has been effected. In all the States of the Commonwealth this is known as the hire-andpurchase agreement.

The hire-and-purchase agreement is an agreement to transfer chattels by virtue of which the hirer has immediate use of the property, and after payments aggregating a stipulated sum have been made the property passes to the hirer absolutely. Until the final payment is made, however, the chattel remains the property of the vendor, and if the hirer ceases to make the required payments the vendor may enter the premises of the hirer and reclaim the chattel. The Australian law affecting sales made on the hire-purchase plan includes among chattels every object which can be removed without seriously affecting the premises in which located. For example, milking machines which had been attached to the floor by bolts were removed by the owner when the purchaser defaulted payment.

Bills of Sale Acts Govern.

The "hire-and-purchase" transaction differs from a "sale with postponed payment" in that in the former the hirer may return the chattel at any time by paying the proportionate amount of hire for the time he has had it in his possession.

In both Western Australia and Queensland hire-and-purchase agreements are subject to the bills of sale acts. In Western Australia, however, it is not necessary to register such agreements when relating to sewing machines, pianos, musical instruments, bicycles, cash registers, billiard tables and accessories, implements, machines, machinery, engines, vehicles, and appliances used wholly or in part for agricultural or pastoral purposes; typewriters; gas, electric-light, or water meters. These articles are so notoriously sold under the hireand-purchase system that no one is likely to be misled and advance money to a person in possession and apparent ownership of such chattels without making inquiry.

The Queensland bills of sale act provides:

When, by any instrument, it is expressed that a person lets any chattels to any other person at a rental to be paid by installments, upon the terms that the property shall pass to such other person upon payment of the installments, but not otherwise, the instrument shall, for the purposes of the bills of sale act, unless the person by whom the chattels are let is a person who ordinarily sells chattels of that class, and the contract is made in the ordinary course of his business, be deemed to pass the property in the chattels comprised in it to such other person, notwithstanding that the installments have not been paid, and shall be deemed to be a bill of sale made by such other person to secure the payment by him of such installments.

In the State of Victoria it is said that dealers conducting businesses on the hire-and-purchase plan usually prefer to take action against defaulting purchasers in the court of petty sessions rather than to sue on the contract, which involves more costly proceedings in the county court. In this connection it is interesting to note that dealers selling on the hire-purchase system who wish to bring action in the petty sessions court in case of defaulting clients omit the clause represented by the words "and that the chattels comprised in the agreement shall remain the property of the dealer until such purchase has been made and the agreement carried out," and substitute words to the effect that the hirer "may terminate the hiring at any time by delivering up the chattels to the owner, but shall, notwithstanding such redelivery, remain liable for arrears of hire to the date of such return." A summons can then be issued for use and hire.

Separate Laws Apply in Victoria.

Under the law of the State of Victoria contract for sale and contract of letting and hiring are separately dealt with. In this connection the Victorian instruments act provides that where the seller has retained possession or retakes possession within six months from the day of sale the sale shall be void, unless:

(a) The true contract is in writing-which necessitates a substantially correct statement of the consideration;

(b) The contracts be signed in both documents by both parties; (c) The time of signature and a description of the residence and occupation of both parties be verified by affidavit; and

(d) The original contract, or copies, be filed with the registrargeneral (fee 1 shilling) within 10 days from the day of sale if possession be retained, or from the day of retaking possession if possession be retaken.

If the real nature of the contract is a security over chattels it should also be registered as a conditional bill of sale pursuant to 14 days' notice of intention.

With the exceptions noted in the foregoing, there is no special legislation governing the registration of hire-and-purchase agreements in the States of New South Wales, Victoria, South Australia, and Tasmania.

Rights of Vendor Depend on Contract.

In the case of third parties obtaining the goods irregularly, the rights of the vendor are largely dependent upon whether a sale has actually taken place, which in turn depends upon the wording of the contract. If the wording be such as to convey the meaning that an actual sale has taken place, the seller agreeing to sell and the buyer to buy, then the hirer has agreed to buy, and in the eyes of the law this amounts to a sale. On the other hand, if the buyer merely holds an option to buy, which the hirer or prospective purchaser can terminate by returning the hired property to the owner, then the rights of the owner are considered superior to those of a third party.

In the Australian case of Lee v. Butler an article was hired with the understanding that the hirer pay a deposit of £1 when the agreement was executed and an additional sum of £90 in another

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two months after which the article was to become the absolute property of the hirer. The agreement contained no stipulation giving the hirer the option of ending the hire by returning the article to the owner. Before all the installments were paid the hirer sold the article to a third party, who received it in good faith, having no knowledge of any agreement between the hirer and the real owner, and removed the article from the premises. In an action brought by the owner to recover possession of the article the court held that there had been an agreement to buy and that the third party had a good title.

Cognizance Taken of "Custom" in Bankruptcy.

Under the bankruptcy laws of the Commonwealth the property of the debtor reverts to the assignee or trustee. This includes all goods in his possession at the time of the proceedings. In other words, if goods are in the possession of a buyer who obtains false credit upon them, the vendor or real owner of such goods will suffer the loss. This is true unless evidence can be offered showing that a custom exists to the effect that the goods in question are the subject of a bona fide hire-purchase agreement. The custom must have been long enough established to have become generally known, not only to the specific trade to which the goods relate but to all classes of persons who would, in the ordinary course of business, have been likely to have been creditors of the insolvent party.

The sale on the hire-purchase agreement is most common in the case of automobiles, bicycles, motor cycles, musical instruments, furniture, sewing machines, billiard tables, agricultural implements, typewriters, cash registers, and certain lines of machinery. In many instances, however, machinery is sold on extended credit terms and virtually amounts to a bona fide sale and is therefore subject to the bills of sale legislation. It is reliably stated that about 75 per cent of agricultural-implement sales are made on the hire-purchase plan. Even among very prosperous farmers this practice is popular. Assignment of Chattel Takes Place of Chattel Mortgage.

The term "chattel mortgage" is not recognized in Australian law. Its counterpart, however, is found in the "Assignment of chattels under the general bills of sale legislation. Its definition is given as "an instrument in writing, whereby one transfers to another the property he has in goods and chattels,"

Hemingway on Bills of Sale in Australia says:

Bills of sale are either:

(a) Absolute-where the chattels become the property of the grantee. If the grantee takes possession of the chattels the bill of sale does not require registration in those States where absolute bills of sale are provided for. If, however, he does not take possession, the instrument may be defeated by the creditors of the grantor unless the instrument be registered as provided by the bill of sale legislation.

(b) Conditional-the bill of sale being given as a security. Whether the grantee takes possession of the chatels or not, for his protection the instrument should be registered at the place, in the manner, and within the time provided by the statute.

Registering the Basic Principle.

The basic principle of all British bill of sale legislation is registration of the instrument in a public office, with the right of anybody, on the payment of a small fee, to inspection. Registration of bills of sale was first introduced by the English act of 1854. The primary object of bill of sale legislation may be

gathered from the words of the preamble to this statute, which points out: "Frauds are 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 persons to the exclusion of the rest of their creditors."

In these circumstances registration was accordingly introduced for the protection of creditors, and this was accomplished by the publicity thereby given to such assignments. Registration within the prescribed time of a bona fide instrument protects the holder of the bill and no one need be misled, for the facts may easily be ascertained by search.

As indicated, before the passage of this legislation fraud in such dealings could be committed with comparative ease and, as a matter of fact, creditors were frequently put to great inconvenience and often suffered considerable insecurity and hardship. Goods, the ownership of which was apparently vested in one person, might be secretly pledged to another, and yet the apparent owner might be able to raise money on the assumption of ownership. By the regis tration system, however, if a person gives credit on the faith of seeing one in possession of chattels, he can not subsequently complain if he then discovers that such chattels are the subject of a prior executed, duly registered bill of sale. A debtor may give more than one bill of sale over the same chattels and prior to the adoption of the registration principle the second pledgee might have known nothing of the prior pledge; nor could the debtor be proceeded against, for he could always plead that he had done nothing but what he had the right to do-to place what value he liked on his property. Under the registration system a person before making an advance is enabled to acquaint himself with the fact as to whether or not there is a prior pledge in existence; and if he finds such to be the case and then takes a second mortgage-that is a bill of sale to rank after the prior one-he does so at his own risk and will. Australia Follows English Legislation.

Legislation on the lines of the English act of 1854 has been adopted in all the Australian States and New Zealand, but in some cases developments and modifications to suit local conditions have followed the original enactment. For example, in Victoria, Western Australia, and Tasmania the principle of giving notice of intention to file a bill of sale, with the right of any creditor of the proposed grantor to lodge a caveat against such, has been adopted; whilst in Queensland, New South Wales, and Victoria there has long been special legislation governing the equivalents of bills of sale by way of mortgages of stock and liens on wool. Again, in Victoria, a class of transaction known as the contract of sale and for letting and hiring has been provided for. This is similar in effect to an absolute bill of sale, but consists of a contract for letting and hiring by the terms of which the seller leases the chattels to the buyer at a stated rent (usually payable at weekly or monthly intervals) and permits them to remain in the latter's possession subject to the conditions of the agreement, which contains a provision enabling the seller to retake possession on short notice in case of default on the part of the buyer.

Further differences are that, with the exception of certain chattels, or in Queensland with the exception when the seller regularly deals in goods of that description, hire-and-purchase transactions are, in this State and Western Australia, subject to the bills of sale acts and registration. In New South Wales, Victoria, South Australia, Tasmania, and New Zealand the hire-andpurchase system is not so regulated by statute. In Victoria and Western Australia chattels under the bills of sale legislation include after-acquired chattels, but such are not mentioned in the statutes of the other States. Under New South Wales law, when a married person gives a bill of sale over the household furniture, the security can not be enforced by seizure or sale unless the consent of the wife (or husband, as the case may be) of the grantor has been obtained to the execution of the bill. Under Western Australian law the registration of company debentures is provided for under the bills of sale act. The Victorian legislation contains special provisions governing the assignment of trading book debts.

In determining whether a document is or is not a bill of sale the court will always look at the real transaction between the parties and will endeavor to ascertain the actual truth of the case, and may hold that a document, although strictly informal in character, is nevertheless a bill of sale, and so subject to the statutory provisions governing this class of instrument, if it is shown to be