Re Yeovil Glove Co Ltd [1965] Ch 148 is a leading UK insolvency law case, concerning voidable floating charges for past value.

But he held that the act of the bank in meeting the company’s cheques was equivalent to money given, relying partly on a decision by Romer J in Re Thomas Mortimer Ltd.[1] By the rule in Clayton’s case,[2] the bank could claim the whole £67,000 was cash advanced subsequently to the creation of the charge, so the security was valid.

about to be delivered, from which I no not differ, but in whatever way the figures are dealt with it follows, if the decision in In re Thomas Mortimer Ltd be right, that there is admittedly nothing left for the unsecured creditors.

It is said that it has to the extent of £41,311, because admittedly the company has paid to the bank by way of cheques, and perhaps of cash, and so forth, that sum of money after the date of the debenture.

Now that being so, as I understand the general law, it is open to the creditor to appropriate the payment made by his debtor to any part of the debt he likes, or to whichever of two debts, if there were two debts, that he prefers if the debtor himself in making the payment has not directed an appropriation; furthermore, as I understand the law, in cases between bankers and customers, or where there is a current account between parties into which moneys are from time to time paid, and from which moneys are from time to time withdrawn, in the absence of any express appropriation the creditor is presumed to appropriate payments into the accounts made by his customer in discharge of the earliest entries on the other side of the account."

A further argument was addressed to us by Mr. Arnold to the effect that, even if we did not agree with it, we ought to follow In re Thomas Mortimer Ltd either on the principle of stare decisis or on the analogous principle that, as the words of section 212 of the Companies (Consolidation) Act, 1908, have twice been re-enacted by Parliament in the Companies Acts of 1929 and 1948, the legislature must be supposed to have so enacted in accordance with the meaning attributed to those words as laid down by Romer J. in 1925.