When considering a mortgage created by a corporate debtor, the rights under the debenture are not the property of the mortgagor but that of the mortgagee. It was a case where a company which had created the debenture equivalent to the mortgage had gone into liquidation: ‘Winding up deprives the receiver, under such a debenture as that now in suit, of power to bind the company personally by acting as its agent. It does not in the least affect his powers to hold and dispose of the company’s property comprised in the debenture, including his power to use the company’s name for that purpose, for such powers are given by the disposition of the company’s property which it made (in equity) by the debenture itself. That disposition is binding on the company and those claiming through it, as well in liquidation as before liquidation, except of course where the debenture is vulnerable under [various sections of the Companies Act] or is otherwise invalidated by some provision more applicable to the winding up.
. . The view of the authorities which I have just stated is also fatal, I think, to Mr Monckton’s alternative submission that the sale by the receiver is a disposition of the company’s property avoided by section 227 of the Companies Act 1948 . . In truth, the rights and powers given by the debenture are themselves property, but not property of the company, and if they are not extinguished by the fact of winding up, their enforcement or exercise is not within the scope of section 227 at all.’
Goulding J
Sowman v David Samuel Trust [[1978] 1 WLR 22
Companies Act 1948 227
England and Wales
Cited by:
Cited – Calvert v Clydesdale Bank Plc and Others CA 27-Jun-2012
The widow and personal representative of the chargor challenged the enforcement proceedings taken by the bank under a guarantee. The chargor had begun to suffer Alzheimers disease. She now sought leave toappeal saying that to enforce the guarantee, . .
Lists of cited by and citing cases may be incomplete.
Updated: 01 October 2021; Ref: scu.471195