1901.

Peter Wiebe, the debtor, had a small flour mill at the Statement. village of Altona. He also owned and cultivated two quarter sections of land, and owned and operated a threshing machine.

By indenture, dated 10th July, 1900, Wiebe mortgaged all his real estate to the defendant Winkler to secure payment of $1,702 and interest. This mortgage was ex

ecuted on the 11th or 12th of July.

In July, at and before the giving of the mortgage, Wiebe was and knew himself to be insolvent. The season was a very dry one, and his crops and those of others in the neighborhood were evidently going to be very poor. On the 9th of July the district was visited by a hail storm.

On account of the drought the supply of water for the mill gave out. Wiebe tried to procure water by boring wells, but the water thus obtained injured his boiler and was worse than useless.

He had borrowed heavily, was otherwise largely in debt, and had no money for his business or to pay obligations matured and maturing.

Shortly before making the mortgage in question he applied to a Mr. Penner, one of his creditors, to take over and run the mill, with the hope that circumstances would so improve that he could get out of his difficulties, but Mr. Penner refused to do this.

Wiebe was indebted to Winkler upon three promissory notes one for $500, due in April, 1899, on which considerable payments had been made; one for $1150 and interest, due in December, 1899, wholly unpaid; and one for $300 and interest, due 19th July, 1900, wholly unpaid.

Winkler computed the amount owing to him on the date of the mortgage at $1702, and no substantial dispute arose respecting the amount.

On the 10th July Winkler went to Wiebe and asked for a payment. Wiebe informed him that he could make none. Upon some of the details of this interview the evidence of

1901.

Wiebe and Winkler was very contradictory. Wiebe claimed that he told Winkler plainly of his insolvent con- Statement. dition and of his inability to carry on his business; Winkler denied this. Wiebe stated that no request was then made by him for time and no security was then spoken of; Winkler's evidence was that he agreed to give time if security were given, and that Wiebe then agreed to give a mortgage.

On the 11th or 12th of July Winkler returned with the mortgage and a witness, and the mortgage was then executed.

On the 26th of July Wiebe made an assignment to the plaintiff for the benefit of his creditors generally. This instrument began with a recital of Wiebe's insolvency and that he had agreed to assign all his estate to the plaintiff, excepting certain specified chattels. The operative portions purported to grant and assign, in the most general terms, all the property of the assignor, real and personal.

The plaintiff was a member of a firm of lumber dealers to whom Wiebe was indebted in an amount exceeding $900; and, shortly after the execution of the mortgage to Winkler, Wiebe gave that firm a mortgage of some property to secure that debt, but the evidence did not show what property the security affected.

There was no evidence of acceptance of the benefits of the assignment by any creditor except the plaintiff, or even of communication of it to any other.

A. J. Andrews and H. F. Maulson for plaintiff. The case of Colquhoun v. Seagram, 11 M. R. 353, shows the proper principle as the law then stood. Wiebe was in insolvent circumstances; there was no evidence to the contrary and Wiebe knew himself that such was the case. His position was known in Gretna. Solvency means the ability to pay debts as they become due. As to intent to prefer: Bump on Fraudulent Conveyances, 25. An intent should be inferred from the giving of a preference,

1901. Wiebe knowing himself to be insolvent. Argument. voluntary application for time by Wiebe.

There was no
There was no

real pressure. Pressure does not avail: 63 & 64 Vic., c. 3. An assignment for the benefit of creditors was made within 60 days. There was nothing to rebut intent: Lawson v. McGeoch, 20 A. R. 464. The following are cases under a similar Act in Ontario: Webster v. Crickmore, 25 A. R. 97; Breeze v. Knox, 24 A. R. 203; Armstrong v. Johnston, 32 O.R. 15; Bertrand v. Canadian Rubber Co., 12 M. R. 27.

W. E. Perdue and S. J. Rothwell for defendant Winkler. The objection was raised by the statement of de fence that plaintiff is not an assignee nor has he a status to maintain this action: Cassels on Ontario Assignments Act, 55. Plaintiff must show an assignment under the Act: see R. S. M., c. 7, s. 39. Plaintiff has not an assignment under the Act. The alleged assignment is incomplete. It is not executed by the trustee, nor by any creditor. There was no evidence of acceptance by creditors or by plaintiff. A meeting of creditors was spoken of, but there was no evidence that the assignment was brought to the notice of the creditors. Plaintiff must

show an assignment in fact within 60 days after Wiebe
had given the mortgage: Hall v. Fortye, 17 O. R. 435;
Anderson v. Glass, 16 O. R. 592; Leacock v. Chambers,
3 M. R. 645; Cooper v. Dixon, 10 A. R. 50; Rennie v.
Block, 26 S. C. R. 356; Johns v. James, 8 Ch. D. 744.
The assignment does not follow the statute.
It excepts a
considerable quantity of property in the recital. The
assignee must be bound by the recital. An assignment
under the Act must comply with section 3. The intent
of the Act is that all property is to be transferred.
was nothing to show the debtor was entitled to the exemp-
tions made. It is only horses, &c., used by a debtor in
earning his living, or household goods to a certain value,
which are exempt. Plaintiff was entitled to keep part of

There

the property under his own mortgage and has not bound. 1901. himself to carry out the trusts of the assignment. The The Argument. assignment should have been to an official assignee. The assignment carries only the property owned by the debtor at the time, and property previously disposed of by him does not pass under the assignment. A preferential transfer is void only as against creditors. Under the Assignments Act of 1886, 45 Vic., c. 45, s. 7, only an assignee

An assignee must call

could sue: see also 50 Vic., c. 8.
the creditors together; he should show he has done this
and that the assignment had been adopted. A preferen-
tial transfer is void only against creditors, and their
adoption of assignment must appear. There was no evi-
dence that the creditors met and acted on the assignment
and no evidence that the plaintiff accepted the assign-
ment. Prior to the amendment of 1900, 63 & 64 Vic.,
c. 3, the assignment would have been good: Stephens v.
McArthur, 19 S. C. R. 446; Molsons Bank v. Halter, 18
S. C. R. 94; Colquhoun v. Seagram, 11 M. R. 339; Bert-
rend v. Parkes, 8 M. R. 179. In Stephens v. McArthur
there was no pressure but a demand of security. Winkler
did the same. There was no express intent to prefer.
Nothing from which to infer intent. The debtor Wiebe
gave security with reluctance; he consulted Schwartz, the
plaintiff, first. Winkler pressed Wiebe into giving him
security. Under the old law there had to be a concur-
rence of intent in the debtor and creditor: Gibbons v.
McDonald, 20 S. C. R. 587; Burns v. McKay, 10 O. R.
167; McRoberts v. Steinoff, 11 O. R. 369. The question
was, whether the debtor was influenced solely by a volun-
tary desire to prefer: Colquhoun v. Seagram, 11 M. R.
353. Wiebe denied the intent to prefer. As to the
amending Act of 1900, this was taken from the second
amendment in Ontario. The cases of Lawson v. Mc-
Geoch, 20 A. R. 464, and Webster v. Crickmore, 25 A. R.
97, were under the first amendment.
The words prima
facie were not in that. Under the Act a preference must

1901. be voluntary. A creditor may still make use of pressure in connection with other elements. Under Webster v. Argument. Crickmore there was a mere shifting of the onus of proof. Here there was a giving of time in consideration of security: Long v. Hancock, 12 S. C. R. 532. Wiebe did not go to Winkler and seek to prefer him as a friend. Wiebe thought that if he had time and the season turned out well, he could pay his debts. Wiebe stated he was to have a year. The mortgage does not say a year. As the period of a year is not mentioned in the mortgage Wiebe must have got the idea there was to be a year from the first interview. There must be knowledge in the creditor of insolvency of the debtor; this must be proved: Ashley v. Brown, 17 A. R. 500; Johnson v. Hope, 17 A. R. 10; Gurofski v. Harris, 27 O. R. 201. Schwartz had no idea Wiebe was insolvent until after Winkler's mortgage had been given: Gibbons v. McDonald, 20 S.C.R. 587. Giving time is a valuable consideration: Hickerson v. Parrington, 18 A.R. 635.

A. J. Andrews in reply. A decree for plaintiff here may include one avoiding the plaintiff's mortgage; he offers this. Giving time alone is insufficient. The ques tion is one of real intent. As to creditors' knowledge being proved: Oliver v. McLaughlin, 24 O. R. 41. It was proved by Schwartz on cross-examination that he was assignee and creditor. The operative part of the document assigns all the debtor's property. As to the right at common law to maintain the action: Porteous v. Reynar, 13 A. C. 120. Our statute only gives an exclusive right and does not take away the common law right: Re Andrews, 2 A. R. 24; Anderson v. Glass 16 O. R. 592; Edgar v. Central Bank, 15 A. R. 215. The Act does not make the holding of creditors' meeting a condition precedent. If necessary, plaintiff should be allowed to give proof of such proceedings.