of unsound mind, or to a married woman, except for her separate use, Form 161. but a transfer may be made to two or more persons jointly.

8. The executors or administrators of a deceased registered holder (not being one of several holders) of this debenture shall be the only persons recognised by the company as having any title to this debenture and to the monies hereby secured.

9. Any guardian of an infant, and any committee of a lunatic holder of this debenture, and any person becoming entitled thereto in consequence of the death, bankruptcy, or liquidation of any registered holder thereof, may, upon producing such evidence that he sustains the character in respect of which he proposes to act under this condition, or of his title as the company shall reasonably require, be registered himself as the holder of this debenture, or, subject to the preceding conditions as to transfers, may transfer the same to some other person.

10. If at any time several persons shall be registered as the joint holders of this debenture [any one of such persons may give an effectual receipt to the company for the interest thereon from time to time accruing, and] in case of the death of any one or more of such joint holders, the survivors or survivor shall be the only persons recognised by the company as having any title to or interest in this debenture, and the monies thereby secured.

If the interest is to be payable by coupon to bearer, the word "then" should be substituted for the words in brackets.

11. The register aforesaid shall, at all reasonable times during business hours, be open to the inspection of the registered holder for the time being of this debenture, his executors or administrators, and any person authorised in writing by him or them.

12. The company shall not be bound to enter in the said register notice of any trust express, implied or constructive, in respect of this debenture or the monies thereby secured.

13. The registered holder for the time being of this debenture, his executors or administrators, shall be entitled to the principal monies and interest hereby secured, free from any equities between the company and the original, or any intermediate holder thereof, and the receipt of such registered holder, his executors or administrators [for the same principal monies and interest], shall be a good discharge to the company, which shall not be bound to inquire into the title of such registered holder, his executors or administrators, or to take notice of any trust affecting such monies, or be affected by express notice of the right, title, or claim of any other person to such monies, or to this debenture.

If the debenture is framed with coupons to bearer, omit the words in brackets and say, "shall be a good discharge to the company for the same principal monies, and the delivery of each of the said coupons shall be a good discharge to the company for the interest therein specified (provided such interest shall have accrued due before such delivery); and the company shall not be bound, &c. administrators, or of the person delivering such coupon (as the case may be), or to take notice, &c., [to end adding the words] or any of the said coupons.

orm 161.

14. The company may at any time give notice in writing to the registered holder hereof, his executors or administrators, of its intention [same as Clause 5, supra, Form 1586].

If thought desirable this can be omitted or the following substituted: "At any time after the day of next, (1) the registered holder of the debenture may give the company notice in writing to pay off the principal monies hereby secured, and (2) the company may give the registered holder hereof notice in writing of its intention to pay off such principal monies. And at [or on the day of —, which shall first happen after] the expiration of six calendar months from any such notice being given, the principal monies hereby secured shall become payable."

Sometimes it is desired to give the debenture holder power to call in the monies at stated intervals, thus :-" The registered holder for the time being hereof, may, upon giving not less than six calendar months' previous notice in writing to the company, require payment of the principal monies hereby secured on the 1st day of July in any of the following years, namely, 1885, 1890, and 1895, and such principal monies shall become payable accordingly."

15. [Same as Clause 6, supra, Form 158b, substituting "registered holder" for "bearer."]

16. [Same as Clause 7, supra, Form 158b.]

17. A notice may be served by the company upon the holder of this debenture by sending it through the post in a prepaid letter addressed to such person at his registered address.

This and the following clauses are sometimes inserted and are found useful. 18. If at any time there shall be joint registered holders of this debenture, any notice may be given to whichever of such persons is named first in the register, in respect of this debenture, and notice so given shall be sufficient notice to all the then holders of this debenture.

19. Any notice served by post shall be deemed to have been served at the time when the letter containing the same would be delivered in the ordinary course of post, and in proving such service it shall be sufficient to prove that the letter containing the notice was properly addressed and put into the post-office.

Form 162.

Renewable debenture

to registered holder.

Sometimes it is desired to frame a debenture, so that by agreement between the holder and the company, the time of payment may be postponed for a specified period and without issuing a new debenture. In such case, the debenture can be in the same terms as in Form 161, omitting the word "earlier," and substituting the following clause for Clause 14 of the conditions.

"At any time, and from time to time, before payment of the principal monies hereby secured, the company and the holder hereof for the time being may agree to postpone the payment of such principal monies to a subsequent day, and the same shall become payable on such subsequent day accordingly. A certificate under the seal of the company indorsed hereon shall be conclusive evidence of any such agreement."

A blank form of certificate [or two] can be indorsed below the conditions, thus : "This is to certify, that by agreement between the company and the holder hereof, the payment of the principal monies hereby secured, has been postponed to the day of -, given under the common seal this day of

The Company, Limited, &c. [as in Form 158, omitting the Form 163. word earlier, and inserting the words, "and with any fresh coupons Renewable that may be issued pursuant to the conditions indorsed hereon," after debenture the words "annexed hereto."

The conditions will be as in Form 1586 slightly varied, the clause in Form 162 to be substituted for Condition 5, and the following being added.]

to bearer.

"Whenever the payment of the principal monies hereby secured shall Fresh coupons. be postponed in manner aforesaid, the company will issue to the bearer hereof fresh coupons providing for the payment of the interest subsequently to accrue on such principal monies at the rate within specified, or at such other rate as shall be agreed on."

Form 164. Debenture

The Company, Limited, will, &c. [as in Form 158]. And the company will also, &c. [as in Form 158]. IN WITNESS whereof the company hath caused two of its directors to framed as set their hands hereto this day of

For and on behalf of the company,

Countersigned,

promissory note.

Directors.

Secretary.

The above debenture is intended to operate as a promissory note, and should be stamped accordingly. Where it is desired that a debenture should so operate, it should be framed as above and not be under seal, for it is doubtful whether an agreement under seal can be considered a promissory note. Crouch v. Credit Foncier of England, L. R. 8 Q. B. 382.

As a debenture in the above form will be legally negotiable, there is, of course, no need to provide that it shall be assignable free from equities, or that the receipt of the bearer shall be a good discharge, for these are incidents of a promissory note to bearer. See further, supra, p. 218.

A debenture so executed, will be binding on the company, assuming that it has power to issue negotiable instruments (see supra, p. 71) under Section 47 of the Act, and also under the Act of 1867, see supra, p. 4, provided, of course, that the Board authorises the execution.

It is, perhaps, needless to say that directors signing an instrument "for" a Directors company as above could not be held personably liable. Lindus v. Melrose, 3 H. & N. signing not 177; 27 L. J., Ex. 326; Dutton v. Marsh, L. R. 6 Q. B. 364; Aggs v. Nicholson, 1 personally liable. H. & N. 165; 25 L. J., Ex. 348, and cases cited, supra, p. 5.

Debentures are generally sealed with the common scal of the company issuing them, and it may be considered that the absence of the seal from such an instrument would be objectionable, especially as the notion that a company can only contract under seal is more or less prevalent. In order to meet this objection, it would seem expedient to affix the seal of the company to a debenture framed and executed as above.

There can be little or no doubt that the addition of the seal would not deprive the instrument of the character of a promissory note.

It is well settled that the affixing of a seal to a contract does not make it a deed if it appears that it was not intended to operate as a deed. Thus where a contract concluded with the words, "To which the parties have set their hands" (not hand's and seals), it was held not to be a deed, although seals were set opposite the signatures. Chambre, J., said that the putting a seal opposite the name was not to

Form 164.

be taken as conclusive, and that the concluding words showed that the parties did not intend to execute a deed. Clement v. Gunhouse, 5 Esp. 83. The maxim expressio unius est exclusio alterius is applicable in such a case. See also Chanter v. Johnson, 14 M. & W. 408.

Upon similar grounds it would seem that the form of a debenture concluding as above would show clearly that the instrument was not intended to be a deed, and accordingly that the affixing of the common seal could not make it a deed. The seal will be regarded as an earmark. Dutton v. Marsh, L. R. 6 Q. B. 361. See also Halford v. Cameron's Coal-brook, &c., Co., 16 Q. B. 442 ; 20 L. J., Q. B. 160; Aggs v. Nicholson, 1 H. & N. 165; 25 L. J., Ex. 348; and Balfour v. Ernest, 5 C. B. N. S. 601; in which cases instruments executed by directors on behalf of companies were sued on as simple contracts, though the seal of the company was affixed.

As already mentioned, a debenture in the above form should be stamped as a promissory note, and the fact that it is so stamped, and is "to bearer," will go still further to show that it was not intended to be a deed, and that it was intended to be a promissory note. Ex parte Colborne and Strawbridge, 11 Eq. 478; Blakely Ordnance Co., 3 Ch. 154; Ex parte City Bank, 3 Ch. 758. If the seal is to be affixed, it may be placed opposite the signatures of the directors, and the secretary can subscribe his name to an attestation clause.

Form 165. Mortgage debenture to bearer.

Issue of 20,000l. in 200 mortgage debentures of 1007. each, bearing interest at the rate of ten per cent. per annum.

The above will be varied according to circumstances. If the debentures are to vary in date and amount, it may run thus:-" Debenture loan not to exceed 20,0007., and carrying interest, &c."

And the company doth hereby charge with such payments its undertaking and all its property both present and future [including its uncalled capital for the time being].

This debenture is issued [supra, Form 158].

Given, &c. [supra, Form 158].

As to the effect of such a charge, see supra, p. 229. The words in brackets will be omitted if it is not intended to charge the uncalled capital. As to the power to charge uncalled capital, see supra, p. 237. Some persons prefer to enumerate some of the items charged, e.g., "All the collieries, mining rights, buildings, plant, machinery, book-debts, credits, and monies of the company, and all other its real and personal property both present and future." Sometimes only part of the property is charged.

If, in accordance with the plan referred to, supra, p. 230, the debentures are to be secured, in part, by a trust or covering deed, the above form will be altered, by introducing the words "not comprised in the indenture hereinafter mentioned," after the words "present and future;" and by introducing an additional condition as follows:

8. The holders of the debentures of this issue (including the bearer hereof), are entitled, pari passu, to the benefit of an indenture, dated, &c., and made, &c., whereby certain [letters patent] and other property of the company were vested in

trustees for securing the payment of the principal monies and interest payable by Form 165. virtue of such debentures. See also Form 166 and Schedule 1, to Form 171.

The conditions within referred to :

1. This debenture is one of a series of like debentures issued or about to be issued by the company for securing principal sums, amounting [or not exceeding] in the aggregate 20,000l.

If necessary, omit the word "like," and add "such debentures are all to be in like form, saves as to dates of issue and payment, and amount secured." Sometimes a condition as follows is inserted. "The company may issue further debentures ranking pari passu, with the debentures of this series; but so that the aggregate amount of the principal monies secured by the debentures of this scries, and such further debentures shall not at any time exceed [30,0007.].

2. The debentures of the said series shall rank pari passu [as a first charge upon the property within mentioned] and without any preference or priority one over another.

If the debentures are not to be a first charge, the words "in point of charge " can be substituted for the words in brackets, or if they are to be a second charge, the above condition will be modified accordingly, e.g., it will provide that: "The debentures of the said series shall rank pari passu without preference or priority, one over another, as a second charge, upon the within mentioned property, namely, next after such of the mortgage debentures issued by the company in the year as shall, for the time being, be outstanding." Sometimes there is a mortgage affecting part of the property charged, in which case the following proviso may be added to Condition 2: "Provided always that so far as regards the hereditaments comprised in an indenture, dated, &c., and made, &c. (being a mortgage for securing 5,000l. and interest), the said debentures shall be subject to such mortgage."

3. The charge created by this debenture shall be a floating security, and accordingly the company may, in the course of its business and for the purpose of carrying on the same, deal with the property hereby charged in such manner as the company may think fit, and in particular, may sell, lease and exchange the same, may pay and receive money, and may declare and pay dividends out of profits. [See, as to this clause, supra, p. 231.]

4. If the company [supra, p. 245, (6)].

5. The power given by Clause 3 hereof shall cease if default is made in the payment of any principal monies hereby secured at the time when the same become payable in accordance with the tenor hereof, or if any such order or resolution as aforesaid is made or passed.

If Clause 4 is not inserted, the above clause should be modified by substituting the following words: "Or if default is made in the payment of any interest hereby secured for a period of six months after the same shall have become payable, or if an order of some court of competent jurisdiction is made or a special or extraordinary resolution is passed for the winding up of the company "-for the last thirteen words of the above clause.

6. Nothing herein contained shall be taken to authorise the creation of any mortgage or charge on the [freehold and leasehold] property for the time being of the company in priority to the charge hereby created. The power given by Clause 3 is sometimes more or less qualified.