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Preliminary Note

BONDS

A: NATURE AND FORM OF BONDS 1 Definition and terms Para 801 2 Bonds and covenants
A: NATURE AND FORM OF BONDS
1 Definition and terms
Para
801
2
Bonds and covenants .
803
B: VARIETIES OF BONDS
3
Common money bonds
804
4
Post obit bonds .
805
5
Lloyd's bonds
.
.
806
6
Arbitration bonds
807
7
Replevin bonds .
808
8
Admiralty bail bonds
809
9
Annuity bonds
. .
.
810
C: ASSIGNMENT OF BONDS
10
Assignment at law
811
11
Assignment in equity
812
12
Estoppel of assignor .
813
Precedents
A: BONDS FOR PAYMENT OF MONEY
1
Bond from one obligor to one obligee to pay a sum of money at a stated date
or on demand
821
2
Bond
by
two or more obligors to one or more obligees jointly.
.
.
.
.
.
.
..
823
3
Bond by several obligors with common penalty but conditioned on the payment
of separate sums
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
"
824
4
Bond by one obligor to one obligee for
payment
of a sum by equal
.
instalments
with interest, the agreement being recited
.
.
.
.
.
.
.
.
.
.
.
.
.
.
..
825
5
Bond by one obligor to one obligee for payment of a sum by unequal instalments
with interest, without
recitals
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
..
826
6
Bond by a debtor for payment
of a debt by instalments,
the balance of the debt
becoming immediately payable on default in payment
of any instalment
..
827
7
Bond by a parent to pay a sum to trustees of marriage settlement as portion
828
8
Bond by a child for
the payment
of a sum of money
lent by parent
and
conditioned to be paid on the death of the parent
829
9
Bond in a sum fixed
as liquidated damages to preserve a trade secret
.
.
.
"
830
10
Bond to secure payment
or
beneficiary's
life.
.
.
.
.
.
.
.
.
.
of a monthly
.
.
.
.
.
.
.
sum for the grantor's
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
..
831
11
Bond of submission to arbitration without recitals where all matters in difference
are referred.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
832
12
Bond
to guarantee
mental patient's
receiver-guarantee
company
833
13
Bond
to guarantee
mental patient's
receiver-personal
sureties
835
B: POST OBIT BONDS
14
Post obit bond for payment
of a sum of money in case the obligor survives a
relative from whom the obligor has expectations
.
.
.
.
.
.
.
.
.
.
.
.
"
836
 

VOL 4: BONDS

 

338

  • 15 transaction being described as a sale

Post obit bond, the

sum secured

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

and purchase of the

.

.

.

.

.

.

.

..

  • 16 of a sum of money upon the death of the obligor,

Post obit bond for

payment

.

.

837

the time for payment only being contingent

.

.

.

.

.

.

.

.

.

.

.

.

.

.

..

838

c: BONDS OTHER THAN MONEY BONDS

 
  • 17 where

Bond

in replevin

action to be begun in High Court

 

839

  • 18 Bond

in

replevin

where

action

to

840

  • 19 Lloyd's bond given by a company.

be commenced in county court .

.

.

.

.

.

.

.

.

.

.

.

.

.

  • 20 Bond to secure the performance of an agreement, without recitals

841

842

  • 21 Bond given

by

contractor

to

local authority

 

of

contractual obligations

.

.

.

.

.

.

.

.

.

.

.

.

guaranteeing fulfilment .

.

.

.

.

.

.

.

.

.

.

.

  • 22 Bond for percentage of contract price conditioned to remain in force only

..

until

843

further bond is executed

844

  • 23 Bond for reduced percentage of contract price following previous bond and part

execution of works

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

..

846

  • 24 Bond by an agent to account and pay over money received

..

847

  • 25 Bond

by an employee not to engage in business in competition with employer

 

848

  • 26 Bond to secure obedience to an injunction restraining the obligor from trespassing

on the lands of the obligee

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

..

849

  • 27 Bond by vendor of land to indemnify

title deeds

.

.

.

.

.

.

.

.

.

.

.

.

purchaser against

.

.

.

.

.

.

.

.

.

claims under missing .

.

.

.

.

.

.

.

.

850

  • 28 to indemnify purchaser against a particular defect in title.

Bond by vendor

 

..

851

For Annuity,

bond to secure payment of

see title

RENTCHARGES AND ANNUITIES

Bottomry bonds

.

.

.

.

.

.

.

.

.

.

SHIPPING

Building societies, bond by officer of

Company

bearer bond

.

.

.

.

.

.

.

BUILDING SOCIETIES COMPANIES

Compulsory purchase bond before entry

COMPULSORY

ACQUISITION

Contractors'

bond providing

security

under the advance payments

code in

Part XI of the Highways

Act 1980

HIGHWAYS AND BRIDGES

Fidelity bonds

. Local authority bonds

.

.

.

.

.

.

.

. Partnership, bonds relating to Power of attorney to receive money due

.

.

.

.

.

.

.

GUARANTEES AND INDEMNITIES LOCAL GOVERNMENT PARTNERSHIP

upon a bond

. Release of bond to several obligors, bond

.

.

.

.

.

.

.

.

.

.

.

POWERS OF ATTORNEY

being lost .

. Salvage, bond to secure payment

.

.

.

.

.

.

.

.

.

of

.

.

.

.

.

RELEASES AND COMPROMISES SHIPPING

Statutory form

of

bond for

 

securing

money

borrowed

by

 

company

 

by

special Act: statutory form of transfer

COMPANIES

Surety bonds

.

.

.

.

.

.

.

.

.

.

.

.

.

GUARANTEES AND INDEMNITIES

339

VOL4:BONDS

For the substantive law see 12 Halsbury's Laws (4th Edn) paras 1385-1435 title BONDS. For cases see 7 Digest (Re-Issue) title BONDS 159-247.

Preliminary Note

A: NATURE AND FORM OF BONDS

1

Definition

and terms.

A bond is an instrument

under seal- by which one person,

known

as 'the obligor',

binds himself to pay to another

person, known

as 'the

obligee', a specified sum of money, either immediately

or at a fixed future date.

It is

not necessary to use a particular form of words in order to create a bond-'.

 

An instrument

which embodies no more than the obligation

to pay the specified

sum is known as a simple or single bond", Such bonds are practically obsolete. The

term 'single' is also used to describe bonds given by a sole obligor, two or more obligors".

rather than by

 

The ordinary form of bond in use today is technically called a double or conditional

bonds.

It consists of two parts, the obligation

and following

this, the condition.

A

bond may contain explanatory

the condition.

The obligation

recitals. If so, these follow the obligation and precede

of a conditional bond, as in the case of a simple bond,

simply binds the obligor to pay a sum of money, which may be a 'penalty'

or may

 

be 'liquidated

damages'".

It does not refer to the condition.

The condition specifies

the real object of the bond by declaring that if the obligor or some other person does

or refrains from doing

some specified act or acts, then, on the due performance

of

the condition, the bond shall be void",

 
 

On breach of condition,

the bond is said to have become

forfeited or absolute. It

does not necessarily follow that in these circumstances

the obligee will be able to

recover the sum of money payment

of which is stipulated in the obligation 8 . The

intervention

of equity resulted in a distinction being drawn between

obligations

to

make payment of a sum representing either the actual loss caused by non-compliance

with the condition

or a genuine pre-estimate

of that sum on the one hand and a

penalty in excess of that on the other hand. The latter would not be recoverable".

 

[801]

 

2 BL Corn (14th Edn) 340;

National Telephone Co Ltd v

IRC

[1900] AC 1. HL; British India Steam

Navigation Co v IRC

(1881) 7 QBD 165 at 172, DC, per

Lindley J. For the nature and use of bonds

generally see 12 Halsbury's Laws (4th Edn) para 1385 et seq.

2

Any words which show the intention of the party to bind himself will be sufficient; for such obligation

is in the nature of a contract or a security for

the

performance of a contract which is construed

according to the intention of the parties (4 Cruise Dig T 32, c 8, si). There exists power (not exercised

at the date at which this volume states the law) to prescribe by rules of court the form

in which and

 

the officer to whom bonds required under

or for the purpose of an order of the Court of Appeal or

the High Court are to be given: the Supreme

Court Act 1981 s 135 (11 Halsbury's Statutes (4th Edn)

COURTS). Where bonds are accepted as security guaranteeing receivers for mental patents (see Forms 12, 13 post), such bonds must be approved by the Master of the Court of Protection: see the Court of Protection Rules 1982, SI 1982/322 r 62. As to the obligation to pay interest see 2 Halsbury's Laws (4th Edn) para 1409.

3

2 BL

Com (4th Edn) 340; Morrant

v Cough (1827) 7 B & C 206.

 

4

See 'Merchant of Venice' Act I, scene 3, line 146 et seq:

'Go with me to a notary, seal me there Your single bond; and, in a merry sport, If you repay me not on such a day,

In such a place, such sum or sums as are Express'd in the condition, let the forfeit

Be

..

.'

 

[805]

VOL4:BONDS

342

6

See 12 Halsbury's Laws (4th Edn) paras 116, 117, 1424 and Dunlop Pneumatic

Tyre

Co Ltd v New

Garage

and Motor Co Ltd [1915] AC 79, HL.

7

A condition for avoidance of the obligation may be contained in a separate instrument and, if so, is

often known as a defeasance.

8

See 12 Halsbury's Laws (4th Edn) para 1423 et seq.

9

See 12 Halsbury's Laws (4th Edn) para 1423. The prevalence of the equitable rules over those of the common law is now preserved by the Supreme Court Act 1981 s49(1) (11 Halsbury's Statutes (4th

Edn) COURTS).

[802]

2

Bonds and covenants. It is necessary that there is an obligor 1 , an obligee-

and a

fixed sum of money

in which

the obligor

is bound,

and that the instrument

is duly

 

executed

by the obligor.

No consideration

is necessary for the instrument

is under

seal". A bond is usually in the form of a deed poll+ expressing

the active intention

of

or the active common

intention

of several persons joining

together for

one person the purpose of the making

of the deed. The difference between

a bond and a covenant

 

is therefore

one of form rather

than

of substance: a covenant

is usually contained

in

an indenture

to which

obligations

intended

two or more

persons are parties and which

expresses the real

between

them, rather

than merely

their active

to be created

common intention.

Recitals

in a bond

bind the obligor

(but not the obligee

who

is not a party)

by

estoppel". But

a recital in a deed shown to be wrong

in fact and included

in the deed

by mistake by the party seeking to prove the true facts does not estop that party from

 

proving

and relying upon the true facts",

1

See Paragraph

1 ante and 12 Halsbury's

Laws (4th Edn) para 1403.

2

See Paragraph

1 ante and 12 Halsbury's

Laws (4th Edn) para 1404.

3

Squire v Whi/ton (1848) 1 HL Cas 333.

4

12 Halsbury's Laws (4th Edn) para 1303.

5

1 Wrns Saund

(1871 Edn) 236 et seq; Hill

v Manchester

and Salford

Water

Works

Co (1831) 2 B & Ad

544; Lainson

v

Tremere

(1834) 1 Ad & El 792. As to their effect in restraining or explaining the terms

of an ambiguous condition see Parker v Wise

(1817) 6 M & S 239; Lord Arlington

V Merricke

(1672) 2,

Saund 403, and notes thereto.

6

Greer v Kettle [1938] AC 156, [1937] 4 All ER 396, HL.

[803]

B: VARIETIES OF BONDS

3

Common money bonds. Certain

bonds are given solely to secure the payment

of money.

A common

money

bond

is given to effect such an obligation.

The con-

dition of such a bond is usually that if the obligor

pays to the obligee a smaller

sum

 

(often one-half)

than that named

in the obligation,

with interest,

on a specified

day,

the bond shall be void 1.

[804]

1

See eg Form 1 post.

4

Post obit

bonds. A post-obit

bond 1 is one conditioned

for the payment

of a sum

of money after the death

of a specified person. Such bonds are usually given in respect

of

a loan and for a sum

greater than that advanced.

They

are used in two cases: (1)

where

the payment

depends

on a contingency,

such as the event

of the obligor

surviving

a relative

in respect

of whom

he has expeccations-';

and

(2) where

the

payment

is certain but the time of payment

uncertain,

as where

the bond is condi-

tioned for the

payment

of a certain sum on the death of the obligor".

1

See eg Forms 14,15,16 post.

2

See Form

14 post.

3

See

Form

16 post.

[805]

343

VOL4:BONDS

[S11]

5

Lloyd's bonds. A Lloyd's

bond- is a security

issued by a company

either in

the

form of a common

money

bond with a recital of the company's

indebtedness to

the

 

obligee-

or in the form of an acknowledgment

of a debt to a particular

person with

a covenant

to pay it '.

1

le named after its inventor: Chambers v Manchester and Milford Rly Co (1864) 5 B & S 588 at 608 per CromptonJ.

2

See Form 19 post.

3

Chambers

v Manchester and Milford Rly Co (1864) 5 B & S 588.

[S06]

6

Arbitration bonds. The agreement between

two

parties

to an arbitration

may

consist of mutual

bonds in the form of common

money

bonds, with

a condition

to

abide the event of the arbitrator's award",

 

1

See Form 11 post.

[S07]

7

Replevin bonds. A replevin

bond

is a form

of security

which

the owner

of

chattels alleged to have been wrongfully

distrained is required

to enter into before he

can obtain redelivery of the chattels. The condition

of the bond is that he will institute

an action

of replevin

against the distrainor

and make a return

of the

 

and prosecute goods, if ordered

to do so in the action 1.

 
 

See the County Courts Act 1984 s144 Sch1 (11 Halsbury's Statutes (4th Edn) COUNTY COURTS), CCR

Forms 17, 18 post. As to replevin generally see 13 Halsbury's Laws (4th Edn) para

1981 Ord 50 r9 and 373 et seq.

[SOS]

S Admiralry bail bonds. These are bonds

filed by the owner

of property

for the

arrest of which a warrant

has been issued in an admiralty

action in rem. By this bond

the owner of arrested property

may secure its release".

 

1

See SHIPPING.

[S09]

9

Annuity bonds. An annuity

bond is a bond to secure the payment

of an annuity

inter vivos",

1

See RENTCHARGES AND ANNUfTIES.

[SI0]

c. ASSIGNMENT OF BONDS

 

10 Assignment

at law. The

obligation

contained

in a bond

is a legal

chose in

action. The Law of Property

Act 1925 1 provides that absolute assignment

by writing

 

under

the hand of the assignor, not purporting

to be only by way of charge, and of

which notice has been given to the obligor,

will as from

the date of the notice transfer

to the assignee the legal rights and remedies

under

the bond

and the power

to give

a good discharge without the concurrence

of the obligor. The assignment

will, how-

ever, be subject to all equities which right of the assignor '.

would

have been entitled

to priority

over the

1

le the Law of Property Act 1925 s 136 (37 Halsbury's Statutes (4th Edn) REAL PROPERTY).

 

2

Graham v Johnson (1869) LR 8 Eq 36; Payne v Mortimer (1859) 4 De G & J 447; Glasse v Marshall (1845)

15 Sim

71; Chambers v Manchester and Milford Rly Co (1864) 5 B & S 588 at 611 per Blackburn J; Re

Cork and Youghal Rly Co (1869) 4 Ch App 748 at 760 per Lord Hatherley. See 12 Halsbury's Laws (4th

Edn) para 1421.

[S11]

[813-820]

VOL4:BONDS

344

11 Assignment in equity. The

benefit of the obligation

may be assigned in equity

by an oral agreement for valuable consideration,

but subject to all equities which exist

at the time notice of the assignment

is given to the obligorl.

1

As to assignment of choses in action generally, see 6 Halsbury's

Laws (4th Edn) para 9 et seq.

 
 

[812]

12 Estoppel of assign or . The

general

rule

is that

the assignee

of a bond

takes

subject to all equities and can obtain

no better

right than his

assignor '. The obligor

may, however,

be estopped

by his conduct

from denying

the validity

of the bond as

against an assignee

for value without

notice, or from setting up defences which would

have been available to him as against the assignor+.

1

6 Halsbury's Laws (4th

Edn) para

61 et seq.

2 Re South Essex Estuary Co ex p Charley (1870) LR 11 Eq 157; Re Hercules Insurance Co, Brunton's Claim

 

(1874) LR 19 Eq 302; Dickson v Swansea Vale Rly Co (1868) LR 4 QB 44; Hawker v Hallewell (1856)

25 LJ Ch 558.

[813-820]

Precedents

A: BONDS FOR PAYMENT OF MONEY

 

1

BOND FROM ONE OBLIGOR to one obligee to pay a sum of money at a stated date or on demand!

BY THIS

BOND

I AB

(obligor) of (address) acknowledge

myself bound

to CD

(obligee) of (address) in the sum of £

2 to be paid to CD

 

Sealed with my seal this

day of

.

NOW

THE ABOVE-WRITTEN

BOND

is conditioned

to be void

in case the

above-bounden

AB his personal representatives

or any person acting

for and on behalf

of the above-bounden

AB shall [on the

 

day of

next ensuing

or on

demand] pay to the above-named

CD or his personal representatives

or assigns or his

or their attorney

authorised

to receive

the same the sum of £

with

inrerest ' for

the same at the rate of '"

per cent per annum

from

the

day of

but in

the event of the above-bounden

AB or his personal representatives

failing to pay the

sum upon

the date specified above the above-written

and effect notwithstanding representatives or assigns

no demand

be made

bond shall remain for the same by CD

in full force his personal

SIGNED SEALED and DELIVERED

.

(signatures, addresses, and occupations of

by

}

the above-named AB

 

AB (signature and seal of obligor)

 

in the presence of

witnesses)

 
 

[821]

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. No particular form of words or technical expressions are necessary to constitute a bond. Any words which show the intention of the party to bind himself will be sufficient: for such obligation

is in the

nature

of a contract

or a security

for the performance

of a contract

which is construed

according to the intention of the parties (4 Cruise Dig T 32, c 8, si). As to the power to prescribe by rules of court the form in which and the officer to whom bonds required under or for the purposes of an order of the High Court or the Court of Appeal. see the Supreme Court Act 1981 s 135 (11 Halsbury's Statutes (4th Edn) COURTS). This power has not yet been exercised. For bonds guaranteeing receivers for mental patients, see Forms 12, 13 post.

  • 2 The sum is usually double the amount secured. In fixing the sum mentioned in the obligation. it must be remembered that the sum

so fixed is the

maximum amount which can (except in very special

circumstances) be recovered by action or proof on the bond, whether for principal, interest, or damages,

even though the actual debt or damages may

be greater: Hatton v Harris (1892] AC 547 at 565, HL:

Hughes v Wynne (1832) My & K 20; Clarke v Seton (1801) 6 Ves 411; Mackworth v Thomas (1800) 5 Ves

329.

  • 3 A common money bond with a penalty carries a right to interest as such, and not qua damages, on the sum secured until payment, although interest is not mentioned in the bond or is provided for only up to the date fixed for payment; such being the contract held to be implied by reason of the penalty: Re Dixon, Heynes v Dixon [1900] 2 Ch 561, CA. See further 12 Halsbury's Laws (4th Edn) para 1409. It is however always better to express the rate of interest agreed. Single bonds do not carry interest by force of the bond itself unless expressed: Hogan v Page (1798) 1 Bos & P 337; Re Dixon, Heynes v Dixon

[823]

VOL4:BONDS

346

supra. But interest may now be awarded under the Supreme Court Act 1981 s35A (added by the

Administration of Justice Act 1982 s 15 (1) Sch 1 Part I).

 

[822]

 

2

BOND BY TWO OR MORE OBLIGORS to one or more obligees jointly 1

BY THIS

BOND

we AB and CD

(obligors)

of (addresses) acknowledge

ourselves

[jointly-

or jointly and severally]

bound

[to EF (obligee) of (address) or to EF and

GH

(obligees)

of (addresses) jointly"]

in the sum of £

to be paid by us or some or one

of us [to EF or to EF and GH or to their certain

attorney]

Sealed with our seals this

day of

.

NOW

THE ABOVE-WRITTEN

BOND

IS conditioned

to be void

in case the

above-bounden

AB and CD or any or one of them or their or his personal represen-

tatives or any person

acting for and on behalf of them

or any or one of them

shall

pay [on the

day of

or survivor

next ensuing or on demand]

[to EF or to EF and GH

of them or the personal representatives

of such survivor

or the survivors

or their or his assigns] the sum of £

with interest

for the same as from

the

.

day of

at the rate of

per cent per annum

bounden

AB and CD

or their personal

representatives

but in the event of the above- failing to pay the sum upon

the date specified above the above-written

bond

shall remain

in full force and effect

notwithstanding

no demand

be made by or on behalf of [EF or EF and GH]

[his or

their] personal representatives or assigns

 

SIGNED etc

 

AB, CD (signatures

and seals of obligors)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs

1,3 ante. The sum mentioned 2 ante.

in the obligation is usually double the amount secured: see Form 1 note

2 Having regard to the present rules (RSC Ord 15, r 4) which enable claims against two or three or

more joint

and several obligors to be enforced against them without

making

the other obligors

defendants, it is no longer necessary as it formerly

was (see 1 Wrns. Saunders (1871 Edn) 475), where

the obligors are more than two, to make them bind 'themselves and every two of them,' or 'themselves and every two or three of them,' ete.

3 A bond cannot be given to two or more obligees jointly and severally: Bradburne v Botjield (1845) 14

M&W559.

Where the benefit of a bond given to secure money lent is intended to enure to the obligees as joint

tenants, it is expedient to express this, having regard to the equitable presumption that where

two or

more persons lend money to a third and take a security for it in their names, they

are prima facie to

be deemed tenants in common both of the debt and the security, unless the contrary appears: see Steeds

v Steeds (1889) 22 QBD 537; Powell v Brodhurst [1901] 2 Ch 160. Cf the Law

of Property Act 1925

ss81,

111 (37 Halsbury's Statutes (4th Edn) REAL PROPERTY)

as to the effect of

obligations to two or

more

jointly.

Where the obligees are intended to be interested as tenants in common,

the words 'as

tenants in common' should be substituted for 'jointly.'

 

[823]

 

3

BOND BY SEVERAL OBLIGORS with common penalty but conditioned on the payment of separate sums!

BY THIS

BOND

we AB and CD

(obligors)

of (addresses) acknowledge

ourselves

jointly

and severally bound

[to EF (obligee)

of (address) or to EF and GH (ohligees)

of

(addresses)] jointly

in the sum of £

be paid by us [to EF or EF and GH]

day of

Sealed with our seals this

.

347

VOL4:BONDS

[825]

NOW THE ABOVE-WRITTEN

BOND

is conditioned

to be void in so far as the

above-named

AB (first named obligor) is concerned

in case the above-named

AB or

 

his personal representatives

or any person acting on his or

their behalf shall pay on

the

day of

next

ensuing [to EF his personal representatives

or assigns or

to EF and GH or the survivor

of them or the personal representatives of such survivor

their or his assigns] the sum of £

with interest for the same from the

day of

 

'"

to the

day of

at the rate of

per cent per annum.

And in so

CD

(second named obligor) is concerned

the above-written

obligation is conditioned

to be void in case the above-named

CD

or his personal

representatives

or any person acting on his or their behalf shall pay on the

day

of

next ensuing to [EF his personal representatives or assigns or EF

and GH

or the survivor

of them or the personal representatives

of such survivor

their or his

assigns] the sum of £

with interest for the same from the

day of

to

the

day of

per cent per annum.

But the payment

by

either one [or more]

at the rate of of the above-named

AB and CD of the sum or sums herein

mentioned

shall in no way be taken or accepted to be a release or operate as a release

by [EF or EF and GH] [his or their] personal representatives

or assigns of any other

party to the above-written sum or sums

obligation

save the party paying the above-mentioned

SIGNED etc

AB, CD (signatures and seals of obligors)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1, 3 ante. As to the fixing of the amount of the obligation, see Form 1 note 2 ante. Even in the absence of express words of severance, it seems that a bond by two or more obligors will be construed as a several bond where (as is contemplated in this form) each obligor binds himself for a distinct sum: see

Collins v Prosser (1823) 1 B & C 682: and 12 Halsbury's Laws (4th Edn) para 1408.

4

[824]

BOND BY ONE OBLIGOR to one obligee for payment ofa sum by equal instalments with interest, the agreement being recited!

I AB (obligor) of (address) bind myself to CD (obligee) of (address)

BY THIS BOND for the payment

to him of the sum of £

.

Sealed with my seal this day of .

 

WHEREAS

AB being indebted

to CD in the sum of [£1,000] for (state nature of

consideration) has requested

CD to give him time for the payment

of that sum which

CD has consented

to do upon

the terms that payment

of the sum with interest in

manner hereinafter expressed should be secured by the above-written

obligation con-

ditioned as is hereinafter expressed NOW THE ABOVE-WRITTEN

OBLIGATION

is conditioned

to be void in case

AB or his personal representatives

shall on the

day of

and the

day

of

in every year commencing

with

the

day of

[next]

pay to

CD his personal representatives

or assigns the sum of [£100] together

with interest

on the sum of [£1,000] or such part of it as shall not have been paid at the rate of

per cent per annum until the whole of the sum of [£1,000] with interest shall be fully paid

...

SIGNED etc

AB (signature and seal of obligor)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs

[826]

VOL4:BONDS

5

348

BOND BY ONE OBLIGOR to one obligee for payment of a sum by unequal instalments with interest, without recitals!

BY THIS BOND for the payment

I AB (obligor) of (address) bind myself to CD (obligee) of (address)

to him of the sum of [£2,000]

Sealed with my seal this day of

.

NOW THE ABOVE-WRITTEN

OBLIGATION

is conditioned

to be void in case

AB or his personal representatives

shall pay to CD

his personal

representatives

or

assigns the

sum of [£1,000]

now owing

from AB as he

hereby

interest thereon

from

the

day of

at the rate of

admits to CD with per cent per annum

in manner following

namely

the sum of [£300]

together

with interest on the sum of

[£1,000]

from

the date last mentioned

on the

day of

and the sum of

[£250]

together

with interest on the sum of [£700]

from the date last mentioned

together

on

the

day of

and the sum of [£450]

with interest thereon from

the date last mentioned on the

day of

.

SIGNED etc

 

AB (signature and seal of obligor)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs

1 and 3 ante. As to the fixing of the amount

of the obligation, see Form 1 note 2 ante.

6

[826]

BOND BY A DEBTOR for payment of a debt by instalments, the balance of the debt becoming immediately payable on default in payment of any

instalment-

BY THIS BOND

I AB (obligor) of (address) bind myself to CD

for the pa ymen t to him of the sum of £

.

(obligee) of (address)

Sealed with my seal this WHEREAS

day of

.

(1)

to CD in the sum of £

 

AB hereby acknowledges

 

(2)

AB is indebted At the request

of AB, CD has agreed to take payment

of the debt

[with interest]

by the instalments

and at the times hereinafter

mentioned

on the terms that the

payment of the instalments

[and interest]

at the respective

times and in case of

(the debt) or the

any default then the immediate

payment

of the sum of £

unpaid part of it [with interest]

should be secured by the above-mentioned

obli-

gation conditioned as is hereinafter mentioned

 

NOW THE ABOVE-WRITTEN of the cases following, namely:

OBLIGATION

is conditioned

to be void

in either

1 In case AB or his personal

representatives

shall on the

day of

and

 

......

day of

in every

year commencing

with the

day of

next

[or within

days after each such respective

day]

pay

to CD

his personal

representatives

or assigns the sum of £

...

(half-yearly

instalment)

[together with

interest on

the said sum of £

(the debt) or such part of it as shall not have been

paid at the rate of

per cent per annum]

until the whole of the sum of £

(the

2

In case any of the half-yearly

payments of principal

[or interest]

shall from

any

cause whatever

not be paid upon the days hereinbefore

mentioned for such respec-

  • 349 VOL4: BONDS

[828]

tive payment

[or within

days thereafter] AB or his personal representatives

pay to CD his personal representatives

or assigns

shall [forthwith

or upon demand]

the whole

balance

then remaining

unpaid

of the

sum

of £

(the debt)

[with

interest'[-'

SIGNED etc

AB (signature and seal of obligor)

  • 1 No stamp duty. For the defmition and terms of a bond and for common money bonds, sec Paragraphs 1 and 3 ante.

  • 2 A condition of this kind whereby the balance of the principal debt is made payable immediately on default in payment of any instalment or interest is not itself in the nature of a penalty and will not be relieved against as such: see Protector Endowment

Thompson

v Hudson

(1869) LR 4 HL 1.

Loan and Annuity

Co v Griee (1880) 5 QBD 592, CA;

[827]

7

BOND BY A PARENT

to pay a surn to trustees of marrjage sertlernent as porrion '

BY THIS BOND

I AB (parent)

of (address) bind myself to CD and EF (trustees) of

(addresses) for the payment

to them of the sum of £

...

(a sum double the amount of the

portion)

Sealed with my seal this

day of

.

 

WHEREAS

a marriage

is intended

shortly

to be solemnised

between

PQ (intended

spouse) of (address) and RS (child of the above-bounden

AB) and upon the treaty

for

the marriage

it was agreed that AB should within

[months

or years] after

the

marriage

pay to the above

mentioned

CD

and EF the sum of £

with

interest

thereon

from the date of the marriage

until payment

of the sum at the rate of

per

cent per annum

to be held and applied by CD and EF upon

purposes

and with and subject to the powers

and provisions

and for the trusts and declared and contained

of and concerning

the same in a certain deed already prepared

and engrossed intended

to bear even date with the above-written

obligation

and expressed

to be made be-

tween

(parties)

NOW THE ABOVE-WRITTEN

OBLIGATION

is conditioned

to be void in either

of the following cases namely:

1 In case the intended

marriage shall not be solemnised within

[six] months

after the

date of the above-written obligation

2 If within

[months or years] after the solemnisation

of the intended marriage

AB or his personal representatives

shall pay to CD

and

EF or the trustees or trustee

for the time being of the settlement

the sum of £

...

(the portion)

[with interest

there on from

the date

of such solemnisation

rate of

...

per cent per annum]

down

to the date of payment

at the

SIGNED etc

AB (signature and seal of parent)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. As to marriage settlements generally see SETTLEMENTS. See also 42 Halsbury's Laws (4th

Edn) 603.

[828]

[830]

VOL4:BONDS

8

350

BOND BY A CHILD for the payment ofa sum of money lent by parent and conditioned to be paid on the death of the parent+

BY THIS BOND

I AB (child)

of (address) acknowledge

myself bound

to CD

(parent)

of (address)

in the sum of £

to be paid on the death

of CD

to CD's

personal

representatives or assigns

Sealed with my seal this day of WHEREAS

(1) The above-bounden

AB is indebted

.

to the above-named

advanced by CD to AB at [his or her] request

CD in the sum of £ ...

(2) It has been

agreed

between

the parties

that the repayment

of the sum of £ ...

together

with interest thereon

at the rate of per cent per annum

from the date of

the death

of CD

until payment

shall be deferred

until

months

after the

death of CD.

 

NOW THE ABOVE-WRITTEN

BOND

is conditioned

to be void in case AB shall

at the expiration

of

months next after the death of CD payor

cause to be paid

to the personal representatives

or assigns of CD the principal sum of £ ...with

interest

at the rate of

per cent per annum from the date of the death of CD

SIGNED etc

 

AB (signature

and seal of child)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs

1 and 3 ante. This form may be useful in cases where a parent has advanced to a child all the amounts which the child would have under the parent's will and which by the will would be brought into hotchpot. The sum thus secured would then enure for the benefit of the parent's estate, including the

creditors.

9

[829]

BOND IN A SUM fixed as liquidated damages to preserve a trade secret-

BY THIS BOND

I AB (obligor)

of (address)

bind myself to CD

(obligee)

of

(address)

for the payment to him of the sum of £

as agreed and liquidated damages and not

as a penalty?

Sealed with my seal this

day of

WHEREAS

CD has imparted

. to AB (specify

trade secret) upon an express agreement

that AB should enter into the above-written

obligation

for the payment

to CD of

the sum

of £

as liquidated

damages

and not as a penalty

but conditioned

as is

hereinafter expressed

NOW THE ABOVE-WRITTEN AB shall at all times hereafter

OBLIGATION well and truly keep

is conditioned

the secret and shall not

to be void in case

disclose the

same or suffer or permit the same to be disclosed to any person

or persons whatsoever

whether in the employment had and obtained

of AB or not without

the licence

in writing

of CD first

SIGNED etc

AB (signature

and seal of obligor)

No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. 2 As to the distinction between liquidated damages and penalties, see 12 Halsbury's Laws (4th Edn) para

1116 et seq; para 1424.

[830]

351

VOL4:BONDS

 

[831]

10

BOND TO SECURE PAYMENT of a rnonthly ' sum for the grantor's or beneficiary's Hfe l

BY THIS

BOND

I AB (grantor)

of (address) acknowledge

myself

bound

to CD

(beneficiary)

of (address) for the payment to him of £ ...2

 

Sealed with my seal this

day of

OBLIGATION

.

THE ABOVE-WRITTEN

 

is conditioned

to be void

in case AB [or

his personal representatives] shall pay to CD his personal representatives-

and assigns

during

the life of [AB or CD] a monthly

sum of £

to

be paid on the first day of

each month and commencing

on the first day of

next

 

SIGNED etc

 

AB (signature and seal of grantor)

No stamp duty. For the definition and terms of a bond and for common money bonds. see Paragraphs 1 and 3 ante. As to the taxation consequences of revocable settlements allowing release of obligations, see the Income and Corporation Taxes Act 1970 s 445 (42-44 Halsbury's Statutes (4th Edn) TAXATION) and 23 Halsbury's Laws (4th Edn) para 1442 et seq.

  • 2 This will usually be double the sum necessary to purchase a like monthly sum.

 
  • 3 If the term of the annuity is the beneficiary's life, the reference to his personal representatives should be omitted. Even if the term is the grantor's life, the reference appears strictly not to be necessary: see

Reid

v Coggans

(or Reid)

[1944] AC 91, [1944]1 All

ER 134, HL.

[831]

 

11

BOND OF SUBMISSION to arbitration without recitals where all matters in difference are referred 1

BY THIS BOND

I AB (obligor) of (address) bind myself to CD

of (address) for the payment

to him of the sum of £ ...

(other party

to bond)

Sealed with my seal this

day of ...

THE ABOVE-WRITTEN

OBLIGATION

is conditioned

to be void

in case the

above-bounden

AB his executors and administrators

shall in all respects observe the

award of EF (arbitrator) of (address) appointed

by the above-bounden

AB and CD to

determine

all matters

in difference between

them

on the terms that EF shall make

and publish his award in writing,

and signed by him, of and concerning

the matters

referred, ready

to be delivered

to them

or to either of them

or if they or either of

them

shall be dead before

the making

of the

award

to their

respective

personal

representatives

who shall require

the same on or before the

day of

next or on

or before any other day to which

EF shall by any writing

 

on this bond, from time to time enlarge the time for making his award

And it is further

agreed

that the costs of preparing

and executing

this bond

and a

duplicate

of it 2 and the costs of the reference

and

award shall be in the discretion

of

EF who may direct to and by whom

and in what

manner

the same or any part of it

shall be paid SIGNED etc

AB (signature and seal of obligor)

[832]

VOL4:BONDS

352

  • 1 No stamp duty. For the definition and terms of a bond and for common money bonds, see Paragraphs 1 and 3 ante. As to arbitration generally, see ARBITRATION.

  • 2 A bond in this form should be executed by each of the parties.

12

[832]

BOND TO GUARANTEE MENTAL PATIENT'S RECEIVER-guarantee company!

COURT

OF PROTECTION

......

19

No ....

In the Matter of AB (full name of patient)

 

KNOW

ALL MEN

BY THESE PRESENTS

THAT

WE

CD

of (address and

description or occupation)

('the Receiver'),

and the ST Guarantee

Company

Limited

whose registered

office is situate

at (address),

('the Sureties')

are bound

and firmly

obliged to OUR SOVEREIGN

LADY ELIZABETH

THE SECOND

by the Grace

of God of the United

Kingdom

of Great Britain

and Northern

Ireland

and of her

Queen, Head of the Commonwealth,

Defender of

other Realms and Territorories the Faith in the sum of

pounds

of good

and lawful

money

of Great Britain

to be paid to the same Lady the Queen

(subject to reduction as hereinafter provided) her heirs or successors to which payment

well and truly to be made I the

Receiver

for myself my heirs executors and administrators

and WE the Sureties for ourselves

and our successors do bind ourselves jointly and severally by these presents.

 

SEALED

with

the Seal of the Receiver

and also with

the Common

Seal of the

Sureties this

day of

One

thousand nine hundred and

.

THE CONDITION

of

the above

written obligation is such that WHEREAS

the

Receiver has been appointed

Receiver

in the matter

the Master of the Court

of the above-named

AB ('the

Patient') AND WHEREAS

of Protection

has approved

the

Sureties as Sureties for the due performance

of the duties

of the Receiver

as appears

by the Seal of the Court impressed in the margin hereof.

 

IF THEREFORE

the Receiver

shall duly account

for

the rents issues and profits

of the Real Estate of the Patient and also for his Personal Estate and the profits thereof

which

shall come to his possession and shall observe and perform

every Order

and

direction

of the Court

concerning

due upon

the Patient

the taking

or his estate and concerning

all such

as shall be found

and passing of the accounts

delivered

money to the Court

and shall be careful to see the houses and buildings

of the Patient to be

well and sufficiently repaired

and so kept and maintained

and shall carefully preserve

and keep all the Deeds

evidences

and writings

in the possession

of the Receiver

touching

the Estate of the Patient and shall in all things demean

himself as a careful

and faithful Receiver

of the Estate of the Patient

that then the obligation

to be void

or else the same to stand remain

and be in full force and virtue

PROVIDED

AL-

WAYS

that the Court

may by indorsement

on these Presents testified by the Seal of

the Court

reduce the sum of

pounds to such reduced sum as may be necessary

and upon

such indorsement

these Presents shall as from the

date thereof continue

to

be in full force and virtue

as if such reduced

sum had originally

been contained

in

these Presents instead of the sum of

AL WAYS

that a

Certificate

under the Seal of the Court

pounds PROVIDED that this Bond has become

forfeit in the sum

stated in such Certificate

shall be sufficient and conclusive evidence

ceiver and the Sureties of the truth

of the contents

against the Re- and that this

of such Certificate

Bond has become

forfeited

to the amount

of the sum so stated and that such sum

353

VOL4:BONDS

[834]

forms

a valid and binding

claim not only against the Receiver

but also against the

Sureties PROVIDED

AL WAYS

AND

IT IS

FURTHER

AGREED

between the

Receiver

and the Sureties that the Receiver

on being discharged

from his office shall

forthwith

give notice in writing

thereof to the Sureties.

 

[833]

PROVIDED

AL WAYS

that

if the Receiver

shall

not

pay

to the Sureties

the

annual premium

upon this Bond

within

15 days of the due date thereof the Sureties

 

may apply

to the Court

to be relieved

from further

liability

as such Sureties

as

aforesaid.

SIGNED

SEALED

AND DELIVERED

by the

'}

Receiver

in the presence

of (name,

address and

(receiver's signature)

 

description of witness)

 

THE

SEAL OF THE

SURETIES

was here-

I

unto affixed in the presence of (name and descrip- tion of witnesses)

j~

(seal of guarantee company)

I HEREBY

CERTIFY

that this Bond

has been duly

executed

by the Sureties

in

accordance with the regulations now governing Bonds.

the execution

by the Sureties of such

DATED

,19

.

(signature)

Accident Manager or other responsible official

of the Sureties duly

authorised in that behalf

No stamp duty. For the definition and terms of a bond and for common

money bonds, see Paragraphs

1 and 3 ante. As to the requirements for such a bond, see the Court r62. See further 30 Halsbury's Laws (4th Edn) para 1269; 26 Court seq.

of Protection Rules 1982 1982/322 Forms (2nd edn) (1985 Issue) 79 et

[834]

13

BOND TO GUARANTEE MENTAL PATIENT'S RECEIVER-personal

sureties"

(Heading

as in Form 12 ante)

KNOW

ALL MEN

BY THESE

PRESENTS

THAT

WE

CD

of (address

and

description or occupation) ('the Receiver')

and JK of (address and description

or occupation)

and KL of (address and description

or occupation)

(,the Sureties'), are bound

and firmly

obliged to OUR SOVEREIGN

LADY ELIZABETH

THE SECOND

by the Grace

of God of the United

Kingdom

of Great Britain

and Northern

Ireland

and of her

of the Commonwealth,

Defender

of the

other Realms and Territories Faith in the sum of

Queen, Head pounds of good

and lawful money

of Great Britain

to be

paid to the same Lady the Queen

her heirs or successors to which payment

well and

truly to be made the Receiver

and the Sureties bind ourselves jointly

and severally

and our respective heirs executors and administrators by these presents.

 

SEALED with our Seals this

day of

One thousand nine hundred

and

THE CONDITION

(continue

as in Form 12 ante).

IF THEREFORE

(continue

as in Form

12 ante) then the Obligation

to be void or

else the same to stand remain and be in full force and virtue PROVIDED AL WAYS

that a Certificate

under the Seal of the Court

that this Bond has become

forfeit in the

sum stated in such Certificate

shall be sufficient and conclusive

evidence against the

[836]

VOL4:BONDS

354

Receiver and the Sureties of the truth of the contents of such Certificate and that this Bond has beome forfeited to the amount of the sum so stated and that such sums forms a valid and binding claim not only against the Receiver but also against the Sureties PROVIDED ALWAYS AND IT IS FURTHER AGREED between the Receiver and the Sureties that the Receiver on being discharged from his office shall forthwith give notice in writing thereof to the Sureties.

SIGNED SEALED AND DELIVERED by the Receiver in the presence of (name, address and description of witness)

SIGNED SEALED AND DELIVERED by the

above-named JK in the presence of (name, address and description of witness)

SIGNED SEALED AND DELIVERED by the above-named KL in the presence of (name, address and description of witness)

}

}

}

See Form 12 note 1 ante.

(receiver's signature and seal)

(surety's signature and seal)

(surety's signature and seal)

[835]

B: POST OBIT BONDS

14

POST OBIT BOND for payment ofa sum of money in case the obligor survives a relative from whom the obligor has expectarions!

BY THIS BOND I AB (obligor) of (address) bind myself to CD (obligee) of (address) for payment to him of the sum of [£1 ,000]

Sealed with my seal this day

of.

.

WHEREAS CD has at the request of AB advanced to him the sum of [£300] the receipt of which AB hereby admits upon an express agreement that in case AB should die before EF (relative) of (address) CD should not have or make any right or claim against AB his estate or effects to repayment of the last-mentioned sum of [£300] or

any part of it or otherwise in respect of the advance but that in case AB should

survive EF and AB should within

[months or weeks or days] after the death ofEF

... repay to CD the sum of [£300] and also pay the further sum of [£700] being the agreed consideration for the advance and for the risk taken by CD which two last- mentioned sums make together the sum of [£1,000] and also that AB should execute the above-written obligation conditioned asis hereinafter expressed

NOW THE ABOVE-WRITTEN OBLIGATION is conditioned to be void in either of the casesfollowing namely:

  • 1 In caseAB shall die before EF

2 In case AB shall survive EF and he or his personal representatives shall within [months or weeks or days] after the death of EF pay to CD his personal represen- tatives or assignsthe sum of[£1,000]

SIGNED etc

AB (signature and seal of obligor)

No stamp duty. For the definition and terms of a bond and for post obit bonds, see Paragraphs 1 and 4 ante. Bargains with expectant heirs and reversioners may be set aside by courts of equity if the bargains are inequitable and unconscionable, and the onus is on the person dealing with the heir or

reversioner to prove that the bargain is a just one: see

18 Halsbury's Laws (4th edn) para 345.

[836]

355

VOL4:BONDS

15

[837]

POST OBIT BOND, the transaction being described as a sale and purchase of the sum secured 1

 

BY THIS BOND for the payment

I AB (obligor) of (address) bind myself to CD to him of the sum of [£1 ,000]

(obligee) of (address)

Sealed with

my seal this

day of ...

WHEREAS (1) CD has agreed with AB for the purchase from AB of the sum of [£1,000]

to be

 

paid to CD in the event ofEF

(obligor's relative or other person upon whose death the

obligor has expectations)

of (address) dying before AB but not otherwise

at the price

of [£300] (2) In pursuance of the agreement of which is hereby acknowledged

CD has paid to AB the sum of [£300]

the receipt

 

(3)

Upon

the treaty for the purchase of the contingent

sum of[£l,OOO]

it was agreed

that payment of it should be secured by the above-written obligation conditioned as is hereinafter expressed

NOW THE ABOVE-WRITTEN

OBLIGATION is conditioned to be void in either

of the cases following

namely: (set out the cases stated in Form

14 ante)

SIGNED etc

AB (signature and seal of obligor)

No stamp duty. For the definition and terms of a bond and for post obit bonds, see Paragraphs 1 and 4 ante. This form is sometimes preferred for a post obit security, but there is nothing really gained by describing the transaction as a 'purchase' of a contingent future sum. There cannot be a real purchase of such a thing as distinct from a contract to pay the sum in the event specified; and, in any case, the

bond will be impeachable on the same grounds as if it were in Form 14 ante.

16

[837]

POST OBIT BOND for payment of a sum of money upon the death of the obligor, the time for payment only being contingent!

BY THIS BOND

I AB (obligor) of (address) bind myself to CD (obligee) of (address)

for payment to him of the sum of[£l,OOO]

Sealed with my seal this