''Re Jeavons, ex parte Mackay'' (1873) LR 8 Ch App 643 is a

UK insolvency law United Kingdom insolvency law regulates companies in the United Kingdom which are unable to repay their debts. While UK bankruptcy law concerns the rules for natural persons, the term insolvency is generally used for companies formed under the ...

case. It decided that a creditor could not reserve an obligation to himself in priority of other creditors if a company were to go into

liquidation Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...

Facts

Mr Joshua Jeavons had an iron manufacturing business (Joshua Jeavons & Company) at the

Millwall Ironworks The Millwall Iron Works, London, England, was a 19th-century industrial complex and series of companies, which developed from 1824. Formed from a series of small shipbuilding companies to address the need to build larger and larger ships, the hol ...

. Jeavons sold one John Brown & Co. Ltd a patent for improving armour plates manufacture. In return Brown would pay Jeavons royalties of 15s per ton of plates produced. Brown also lent Jeavons £12,500, and agreed that half Jeavons' royalties would go to paying back that loan. It was further agreed that if Jeavons went insolvent, or made an arrangement with creditors, Brown could keep all the royalties to satisfy the debt.

Judgment

The Chancery Division of the Court of Appeal held that Brown had a lien on one half of the royalties only. The agreement that Brown could retain all royalties if Jeavons went bankrupt was a fraud on the bankruptcy laws and void. Mr. Fry, Q.C., and Mr. Henderson, then argued in support of the second appeal:— Mr. De Gex, Q.C., and Mr. Finlay Knight, for the trustee, were not called on.

Notes

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References

* United Kingdom insolvency case law 1873 in case law 1873 in British law Court of Appeal (England and Wales) cases

Facts

Judgment

See also

Notes

References