Q.B.D

50S. Where a company had power "to issue bonds, debentures, or mortgage debentures," which would entitle holders to be paid pari passu out of the company's property, evidences of debt expressed as "obligations" by which the company bound "themselves and their successors and all their estate property, etc.," were held to be debentures and to create a charge; 10 Ch. Div. 530. As issues of debentures are frequently, if not in most cases, made payable to the bearer, the question has been much litigated in England whether in that form they are transferable by delivery. There being no statute under which they are negotiable, they must be so if at all under the law merchant (q. v.). Debentures were at first held not negotiable under that law: L. R. S Q. B. 374; but In animation the decision was otherwise; L. R. 10 Ex. 346; which was affirmed by the House of Lords, which distinguished the cases and did not review the eai lTD; and finally it was held that debentures Issued in England by a I able to bearer are nego iabl law merchant and their transi* »d tialnst anybody to a bona er; [1898] Q. B. 658. 1 applied to those of a for< moldy treated as negotiable in the ma [1802] 3 Ch. 527. Where a number of debentures are sealed Cter another in numerical o prima facie rank in priority accordingly, but if it is so provided, they rank pari Ch. D. 762; 38 id. J.",-;, 171; Buck panics Acts 17J. They are generally in a series, but need not be BO, a^ a debenture may be i.-sued to one man; 30 Ch. D. 221. Debentures are not issued until they are red; id.; 34 Ch. I). 58. A contract to make or take debentures will not be ically enforced, but the party is left to his action for damages; [1897] 1 Q. B. 692, affirmed [1S9S] A. C. 309. The exact nature of debentures has much discussed in England as arising In cases where the question was whether a required registration under the Bills of Sales Act which excepted from its provisions "debentures" issued by any mortgage, loan, or other incorporated company and secured ui>on the capital stock of goods, chattels, and effects of such company. A memorandum of agreement which contained a covenant by a company to pay to each of nine persons, who were mentioned in it as lenders, the Bum set opposite their names pari passu, and charged all the property of the company, was a debenture Ch. D. 215: and the covering deed which usually accompanies debentures as a security for the payment of the debentures when due is not a debenture; 34 Ch. l>. 43; though why it Should be so held, it lias been remarked, it is difficult to see in view of the judicial definitions Of the word "debenture" quoted supra; Simonson, Debenturemarks of Cord North;.".7 Ch. 1'. 281, but it need not be r< onder tl. of sales Act; [1891] l Ch. (A. C.) 627; 2 Ch. 212. A mere memorandum in writing by a and fireclay working and brick-making company, of a deposit with bankers of title • as a security for balances due or to become due. but Which did noi admit any S] debt, or contain an agreement to pay otherwise than by an agreement to execute a legal gage, was aot a debenture; 37 Ch. 1). 281. The act referred to speaks of "debentures English writer of authority considers that this means a borrowing money for the benefit of several lenders; Buckley, Companies Acts 170; but it has been held that the statutory term debenture applied when there were several lenders but only one security given for the benefit of all; 36 Ch. D. 215; it may consist of one document, not necessarily of a series of documents; id.; and a single security to a single lender, not purporting in terms to be a debenture, was one in law; 37 Ch. D. 2G0. A security to a lender on some part of a company's property is not one, while an issue secured upon its entire stock in trade and undertaking is, and between these two is to be sought the line of demarcation; Buckley, Companies Acts 172. The remedy upon a default was formerly by an action to realize the security commenced by one holder on bebalf of all and the appointment of a receiver and manager to carry on the business; this was followed by a winding up petition, but more recently the proceeding has been for a decree of foreclosure; [1S97] 1 Ch. 11. A power of sale may be, and usually is, included in the trust deed; 13 L. Q. Rev. 424. Debenture holders with a floating charge were held to be superior to execution creditors; [1S91] 1 Ch. 627, C. A. 3 id. 260. As to spent debentures, see Bonds. See Covering Deed. See Promissory Notes as to sealed debentures. See Simonson, Debentures.