evidence.

[BANE

Bethell applied for time to look into the authorities. Mr. Commissioner EVANS decided upon hearing the The court ordered the case to stand over accordingly; and on Jan. 27, Mr. Bethell said that, having con- Macrae examined the widow of the deceased bark. sidered the facts with great attention, he thought rupt, from whose evidence it appeared that, upon the the assignees ought to abandon their opposition death of her daughter's husband, in 1858, the latter to the proof of the debt. Sir J. Cross thought and her child came and resided with herself and hasjudgment conclusive (delivering his opinion at band two years, and that she brought nothing with length). Erskine, C. J. said that his opinion had her but furniture, which she sold for 50 or 60 not been altered by what Sir John had said, and which was chiefly expended in necessaries for herself thought that there were many cases in which the L. C. and child, and the part occasionally given to the bank had referred it to the commissioners to inquire and rupt was quite understood to be for her keep. When report as to the consideration of judgment-debts. If she left the bankrupt, and married Dorwood, the the commissioners were prevented from instituting such judgment-creditor, in Dec. 1860, she had no mezy. an inquiry, it would often happen that bona fide During the whole time the bankrupt was ill and usable creditors would be defrauded, as all usurious and to attend to business, between Dec. 1860 and Feb. gaming debts would be secured by judgment. Sir 1861, the bankrupt's daughter called several times on John Cross: "All fraudulent judgments can of course bankrupt, who was in a dying state, with bill-stamps, be examined into when any ground is laid." Sir and, filling them up herself, told the bankrupt, that if he George Rose: "As the point has not been argued not sign them Vanweede to whom he owed 300l. or 4004, by counsel for resps., I am not called upon to would come in and sell him off, and these bills wond express any opinion upon it; still it is important to be be over the amount of his claim, and keep him out. understood that the commissioners have authority to A solicitor's clerk having called several times, at length examine into the consideration of a judgment-debt. obtained the bankrupt's signature to a bond, and There is a distinction between the operation of judg- destroyed the bills. Before the bond was signed, Derments on property when the party continues solvent wood told the bankrupt that it should not go eat f and when bankruptcy intervenes. Execution on a his possession in case Vanweed should come upon Lim; judgment is frequently stayed and set aside on equi- but when it was signed the clerk took away the bod table grounds both at law and in equity, and by with him. Nothing was done till April 1862, about analogy the same is done in effect in bankruptcy by twelve months afterwards, when Dorwood called with preventing a proof on a judgment. In Ex parte Pres-one Whitaker, who had shortly before put an executive cott, 1 M. D. & D. 199 (1840), the question was again raised, whether the commissioners have authority to inquire into the validity of a judgment which is the foundation of the proof of the petitioning creditor's debt. Semble, that they may, at all events, inquire how much is due on the judgment. In this case, Swanston and Anderdon impeached the petitioning creditor's debt. The cognovit relied upon in support of the debt was obtained by fraud, for the bankrupt swears that he was induced to sign a paper which afterwards turned out to be a cognovit. We are willing that it should be referred to the commissioners to inquire what The deposition of the deceased bankrupt was s sum is actually due from the bankrupt." Sir John follows:-"Joseph Sowerby, the above-named bankCross: "Until a judgment is impeached it is evidence rupt, being sworn and examined at the time and place of a debt. What we have now to determine is, whether above mentioned, upon his oath saith, my son-inthere is good ground for an inquiry before the com- Andrew John Dorwood, called upon me about Ja missioners as to the validity of the judgment and the 1861, relative to the bond, previous to that he called sum that is really due upon it?" Sir John being satis-upon me with several bills, which I signed at his re fied upon the evidence that there was a good consideration, refused an order for inquiry into the consideration of the judgment. Sir George Rose: "I am decidedly of opinion that any creditor of a bankrupt who comes to this court and says that another creditor has proved under a fiat upon a judgment for more than what was due to him, would have a right to an inquiry before the commissioner as to the amount really due; for a judgment is, in bankruptcy, not conclusive evidence of the debt. And if I was sitting as commissioner under a fiat where the bankrupt disputed the amount of a judgment-debt claimed by the petitioning creditor, I should say that the bankrupt might be let in to impeach the judgment on his undertaking to pay what was really due."-Petition dismissed. The doctrine approved by Lord Eldon and the Court of Review was also that recognised on proof of debt in insolvency, of which the singular case of Dyson, before the Chief Commissioner, was a remarkable instance. (a)

(a) In Dyson's case, which was the ground of so many proceedings both in the Court of Chancery and the common law courts, the truth of the payment of the sum of 30001, being the consideration of a deed under seal, upon which was a receipt signed by the insolvent for that amount, was the main subject of inquiry. This was resisted by the claimant under the deed. The principle upon which the court rested in instituting the investigation is thus clearly expressed in the judgment of the Chief Commissioner Law, who said: "The law requires me to make a revesting order

into his house. The two called apparently to make
friendly inquiries after the bankrupt, who was danger
ously ill, and suffering from dropsy. A paper was
on the table, upon which the bankrupt's appearance sud-
denly changed, his head dropped upon the table, and
his wife, becoming alarmed, went to his assistance, and
pushing aside the paper was told by Dorwood and
Whitaker that it was nothing, and she was to put it
away. They heard nothing more until the execution
came in, when the paper was discovered to have been
a writ.

quest; he told me when he called with the bond that I was to sign it, and it would be a protection against my creditors, Vanweed in particular. I said I had not a creditor that I feared. I was dangerously ill at the time, and not in my senses; I therefore did not read it. Dr. Arthur had shortly before given me up. I signed the bond. The attorney's clerk then destroyed the bis My son-in-law Dorwood never lent me any money sold me any goods. I have continually leat him money, which has been returned by small instalments in money and in bread. No consideration whatever was given for the bond. I was served with a c writ on the 5th April 1862, at the suit of Dermed and his wife, and I then, for the first time, became aware of the existence of the bond. Dorward served me with a copy writ at the time, telling me to lock is away, and I should be safe. I did not understand the object of it, and did not appear thereto. I have be to Mr. Dyson, or his assigns. Now there are several parties claiming to be assigns: and I have heard them. Mr. Cook, standing on his deed and compromise, denied their rigt be heard, because he, one of the claimarts, held an instrument of assignment bearing earlier date than those of competitors: he urged that their later documents could not be arrived at without first setting aside his deed; and that this court has not power to set aside a deed. The answer is that though this court cannot, like the Court of Chancery, order a deed to be delivered up and cancelled, it has the power to disregard a deed which it shall find to be frandelent.

Ex.]

WALTER v. ADCOCK AND SPOKES.

24 & 25 Vict. c. 134, s. 20-Insolvent debtorVesting order-Nothing done thereunder-Not pending business.

[Ex.

ditors above 10l., whereby he covenanted to pay to
each of them, "the said parties thereto of the second
part," a composition of 5s. in the pound at a future
day, in consideration of which covenant the said
creditors, parties thereto, released him from their
respective debts. The deed was either executed or
assented to in writing by the said creditors, parties
thereto :

Held, per Pollock, C. B., Martin and Bramwell, BB.,
that this was not such a deed as fell within or was
contemplated by sect. 192 of the Bankruptcy Act
1861, and that it did not bind other creditors who
had neither executed or assented to it.
Held, also, per Pollock, C.B. and Martin, B. (dubitante
Bramwell, B.) that an assignment of the debtor's
property was still requisite under the new Act (as it
was under the Act of 1849) to render an arrange-
ment deed between a debtor and his creditors
binding on the whole body of creditors. The
doctrine of "cessio bonorum" lies at the foundation
of the whole law of bankruptcy and insolvency.
Per Wilde, B., semble, such an assignment is no
longer necessary, and the Act of 1861 was passed
with the view of effecting an alteration in that
respect.

A creditor's petition in the Insolvent Debtors' Court
and vesting order thereunder, but nothing done
by the debtor in pursuance of such order, is not
pending business within the meaning of the 20th
section of the Bankruptcy Act 1861, so as to pre-Held, per Bramwell, B., the words "his_creditors,
vent the debtor passing through the Court of Bank-
ruptcy without first obtaining the dismissal of his
petition in the Insolvent Debtors' Court.

Last examination and discharge, and application for release from custody.

The bankrupt, being in custody for debt, presented his petition in formâ pauperis on the 7th Feb. 1862, he being at the time in contempt for not filing his schedule in the Insolvent Debtors' Court, under a vesting order obtained upon a creditor's petition.

An application was made a few days previously to Mr. Commissioner Law to discharge the vesting order and dismiss the petition in that court, in order that the bankrupt might prosecute his petition in bankruptcy, and apply for leave to pass his last examination and for his order of discharge. That learned commissioner gave the following opinion :

"This is not pending business here; the insolvent has never stirred in this court. He is in contempt by not filing a schedule, and if this were the right court in which to proceed, I should say that he must file a schedule before he can ask for anything."

Fortified with this opinion of the commissioner, Lewis (solicitor), applied that the bankrupt might pass his last examination and have his order of discharge granted to him, and also that he might be released from custody.

Mr. Commissioner GOULBURN, in the absence of opposition, and upon reading the opinion of Mr. Commissioner Law, granted the application and made requisite orders. Ordered release and discharge.

or any of them," in sect. 192 of the Bankruptcy
Act 1861, mean "his creditors or any of them,"
as trustees or as parties to the deed on behalf and
for the benefit of the rest, and not “any of them"
to the exclusion of the rest; and the words "relating
to the debts or liabilities," &c. in the same section,
mean all the debts generally, and not some of them
only.

A similar deed, in which the consideration for the
debtor's release from his debts was a present pay-
ment to the creditors, " parties thereto of the second
part," of a composition of 5s. in the pound, instead
of a covenant to pay at a future day, was held, by
Pollock, C.B., Martin and Bramwell, BB., to be an
a fortiori case.

Quære, per Martin, B., whether, under sect. 197, the
matter was not one to be dealt with in the Court of
Bankruptcy rather than in a court of law.

This was an action against defts. as sureties. The writ issued on 11th Dec. 1861, and the declaration charged that one Edward Baxter, by a deed dated 13th Nov. 1856, covenanted to pay to plt., her executors, &c., certain principal and interest moneys as therein mentioned, and defts. by the said deed covenanted with plt., in case of default in payment of the said interest by Baxter, that defts. would pay the said interest, and also that the said E. Baxter should pay the premiums upon, and do all other necessary acts for keeping on foot a certain policy of insurance therein mentioned, and should from time to time within ten days after the said premiums should become due deliver the receipt for the same to plt., her executors, &c. ; and further, in case of default by Baxter, that it should be lawful for plt., her executors, &c., to pay such premiums, and that said Baxter and defts., some or one of them, &c., would, on demand, repay the same to plt., her executors, &c. with interest, as therein mentioned. Averments of default by Baxter in payment, &c.; that payment was demanded by plt. of Bankruptcy Act 1861 (24 & 25 Vict. c. 134)-Com-defts.; that all things necessary, &c. had been done position deed under sect. 192-In consideration of a by plt., &c. Breaches, that defts. had not paid the said Covenant to pay a composition at a future day-interest; that Baxter did not pay the said premiums Majority of creditors assenting to a deed binding the dissentient minority "Cessio bonorum,' whether necessary under the new Act-Similar deed, in consideration of a present payment of a compo

COURT OF EXCHEQUER. Reported by F. BAILEY and H. LEIGH, Esqrs., Barristers

sition.

at-Law.

May 5 and 7.

WALTER v. ADCOCK AND SPOKES.

-

A trader executed a deed of composition with certain of his trade creditors, being a majority in number representing three-fourths in value of all his cre

nor deliver the receipts for the same within ten days,
&c. ; yet, neither Baxter nor defts., nor either of them,
repaid to plt. the sums of money so advanced and paid
by her, although the same were duly demanded, and
the same were wholly due and unpaid to plt.

The defts. pleaded separately on 13th Jan. 1862.
Plea (of deft. Adcock).-That after the making of
the deed and the accruing of the cause of action in

Exple Rawlings re

re Veillard Exple

Mappin Exple
JL.ThS. 16Y

cans
YLT. RS. 58

Hodgson.". Wightman
Minare. Fe. 7. L.T.r.S.

Ex.]

WALTER v. ADCOCK AND SPOKES.

[Ex.

194. Deed to be registered in the Court of is necessary. [MARTIN, B.-If deft. had been a Bankruptcy, in default not to be received in person with no property at all, do you mean to say that vidence.-Every deed, instrument, or agreement the plea would have been bad?] I do. If not, a whatsoever by which a debtor, not being a bank-number of creditors, it may be the debtor's very family, upt, conveys or covenants, or agrees to convey his state and effects, or the principal part thereof, for the benefit of his creditors, or makes any arrangement or greement with his creditors, or any person on their behalf, for the distribution, inspection, conduct, mangement, or winding-up of his affairs or estate, or the elease or discharge of such debtors from his debts or iabilities, shall within twenty-eight days from and after the execution thereof by such debtor, or within uch further time as the court in London shall allow, e registered in the Court of Bankruptcy, and in default hereof shall not be received in evidence.

might dispose of his whole estate, stock, goodwill, &c., behind the backs of the other creditors, and set up the deed against them. Every debtor compounding must be assumed to have some estate and effects, and the deed must comprise them. On the face of these deeds it appears there was property here. Notice should be given, and the other creditors should have power to come in, for which these deeds make no provision. The latter part of the plea amounts to a release of the covenant. [BRAMWELL, B.-How is plt. to get his 5s. in the pound? MARTIN, B.-There is nothing more than a personal covenant to pay the instalment 195. No deed to be registered unless in addition to in March.] In the one case the instalment has been he ordinary stamp it be also stamped with an ad valo-paid to the creditors executing the deed, in the other em stamp at the rate of 5s. upon every 1007. of the alue of the estate or effects comprised in, or to be ollected or distributed under such deed or instrunent," &c.

+6

196. Memorandum of registration.

197. Jurisdiction of the court, and rights and iabilities of the parties after registration of the deed. -From and after the registration of every such deed or nstrument in inanner aforesaid, the debtor and crediors, and trustees, parties to such deed, or who have ssented to or are bound thereby, shall, in all matters elating to the estate and effects of such debtor, be ubject to the jurisdiction of the Court of Bankruptcy, and shall respectively have the benefit of and be liable o all the provisions of this Act, in the same or like nanner as if the debtor had been adjudged a bankrupt ind the creditors had proved, and the trustees had Jeen appointed creditors' assignees under such bankuptcy, and the existing or future trustees of any such deed or instrument, and the creditors under the same, shall, as between themselves respectively, and as between themselves and the debtor and against third persons, have the same powers, rights and remedies with respect to the debtor and his estate and effects, and the collection and recovery of the same, as are possessed or may be used or exercised by assignees or creditors with respect to the bankrupt, or his acts, estate and effects in bankruptcy, and, except where the deed shall expressly provide otherwise, the court shall determine all questions arising under the deed according to the law and practice in bankruptcy, so far as they may be applicable, and shall have power to make and enforce all such orders as it would be authorised to do if the debtor in such deed had been adjudged bankrupt, and his estate were administered in bankruptcy.

198. Protection to debtor after notice of filing, &c., of the deed.

200. Provision in case the debtor cannot obtain the assent of the requisite majority of creditors. Sects. 153, 154, and 185 to 191 were also referred to.

there is a covenant to pay at a future time. But in neither case is plt. within the deed, not having executed and not being one of "the said several parties hereto." Again, the deed applies only to the trade creditors, and not to private creditors as the plts. It ought to show on its face an intention to include all the creditors. The trade creditors may say, "We did not know you meant to bind the others, for if you had you could not have paid us all 5s. in the pound." Sects. 153 and 154 contemplate cases of proofs in respect of unliquidated damages and premiums, such as this case, and show that some precise arrangement must be made in respect of them. There is a hardship here in the deed making no provision for contingent debts. [POLLOCK, C. B.-Under the sections you refer to, the person for whom the insurance was made may prove for the value.] Precisely so. (He referred to sects. 185 to 191.) Under sect. 185 creditors may resolve to wind-up the estate under a deed of arrangement, and the Court of Bankruptcy is required by sect. 186 to see that the proposed terms are reasonable and calculated to benefit the general body of creditors. By sect. 187 the deed must be a reasonable one to the satisfaction of the court; can it be then that, before bankruptcy, an unreasonable deed may be executed? [BRAMWELL, B.-Do you mean to say we are to hold the deed to be bad if we think it unreasonable, although it may not be opposed to any particular stipulation in the Act of Parliament?] Yes. The cases under the former statute (12 & 13 Vict. c. 106) have settled that the deed, to be valid, must be for the benefit of all the creditors and deal with all the debtor's estate, and that principle is not destroyed by the new Act. The court will not give effect to an unreasonable deed unless there be words in the statute which it cannot get over; and to that effect is the reasoning of the Lords Justices in the case of Ex parte Wilkes, 24 L. J. 6, Bank. [BRAMWELL, B.-Does the same argument apply to reasonable deeds?] It is analogous to a foreign judgment where the party must be brought in some way under the court, and where if he has had no notice it has been held unreasonable. The plea of deft. Spokes is an a fortiori case. [The COURT here called on the other side]

Rochfort Clarke, for plt., in support of the demurrer. This plea is bad. The general allegation that everything required by the Bankruptcy 1861 Act has Nov. 7.-Milward, for deft. Adcock in support of been done, is of no value if the deed shows on the face the plea. First, as to the language of the deed, it is of it that it is not a deed within sect. 192 of the Act. said contra that the recital, that deft. was indebted in the This deed amounts merely to this, that three-fourths course of business, shows that the deed applies only to of the creditors agree to accept 58. in the pound. That debts contracted in that capacity. That is not so. is not such a deed as sect. 192 of the statute contem- This is not a partnership, with joint and separate plated (reads sect. 192). Deft. will rely on the words, debts and a joint estate. The deed deals with all the 'or any of them" in this section, but plt. con- debts, and with one estate solely. It must deal, and tends that the "debts or liabilities" referred to init professes to deal, with all the debtor's estate. It is that same section mean all the debts and all the liabilities, and that a composition-deed to be binding under this section must in terms relate to all of them, and must provide for their payment. That section and the conditions annexed to it show that distribution

made between the debtor of the first part and the several other subscribed persons "being respectively creditors of the said E. A." of the second part. They are all his creditors who choose to come in, and not merely his trade creditors.

The re

(EL

The Legislature mast, I

citals do not say that he is not indebted to others as property-perhaps not all. well as to the trade creditors. The consideration is think, having reference to all the previous cases, be "of 5s. to all his said creditors," which means the taken to have so intended. It is an important pric) whole body; and the covenant is not with his trade It is submitted that they intended the very contrary. creditors, but with "the said parties hereto of the [POLLOCK, C.B.-When seeking to establish that the second part," which is right, as those who will not Legislature meant something in direct contradiction to join cannot be made parties; but the Act applies here, the old decisions and the current of authorities, pa and, under its operation, the deed embraces all, as if all should be armed with some authority or some plain nhad joined. Then it is said to be a hardship that cre- dication of such intention.] It was intended that ditors not coming in should be bound, but that is for three-fourths of the creditors should be judges in the the Legislature. Under the former Act of 1849 (12 matter, and the Act proceeds on the principle of & 13 Vict. c. 106), similar deeds were destroyed by putting a power in the hands of the majority to bri technical objections, and distribution of the whole the minority. To hold an assignment of property estate being then held to be essential, a deed was held necessary would prevent a debtor with no estate raking void because it contained a power to give back some a composition, even though he were provided with old clothes valued at 201. At that time, too, six- ample security; and the opposition of a dissenting sevenths of the creditors were necessary to support the minority night drive the debtor to extremity, and deed. But the Act of 1861 altered all that. Sect. 192 of be lost. It was distinctly held, in Tetley v. Tapi, the new Act, which is based on sect. 224 of the Act of that a composition-deed was not within the old As 1849, changed the proportion of creditors who might and it was introduced in the new Act in opposition a bind recusants from six-sevenths in number and a trust-deed or an inspectorship. [WILDE, B.-Ea value to a majority in number representing three-fourths assignment is required by the Act, may it not be in value; and it also made their assent in writing to the satisfied by an assignment of small amount? is deed sufficient, in lieu of execution. The giving greater there anything absurd in the Legislature saying power to the majority to bind the minority, was the "Looking at the convenience and benefit of these conscope and general intention of the new Act, and the position-deeds, we will not allow one or more, or ot court will not question the matter. [MARTIN, B.-If fourth of the recusants, to upset such a deed?] The the Legislature say three-fourths, or any other number, language of the present Act differs from that of 1849. shall bind the rest, well and good; but, if they meant In the Act of 1849 sect. 224 was in the conjunctive, to give that power, why have they not said so? Their in the new Act sects. 192 and 194 are in the s intention must be taken from what they have actually junctive, which makes all the difference. The wic expressed.] The objection that it is only a covenant "and," in the former Act, had been held to neces to pay at a future time, and only entered into with sitate a distribution: (Tetley v. Taylor, 1 Ell. & E. the parties executing the deed, is immaterial. The 521; 19 L. T. Rep. 258; 21 L. J. 346, Q. £) covenant is with all the creditors. In the recent Act [MARTIN, B.-The judgment of the Ex. C. the sections are classed under different headings. went a very little way on the word "and," and the Sects. 192 to 200 relate to three different kinds of construction put upon the Act of 1849 did not s deeds for the benefit of creditors viz., first, trust-deeds, upon that word, but upon the scope of the which require an assignment of the estate; secondly, generally. (His Lordship referred to Tetley v. Teşir, composition-deeds, which are different, and do not require such assignment, their object being to leave the debtor in possession of his property; thirdly, inspectorship-deeds, under which also the debtor retains his property. The objection in the present case is that the estate must be conveyed, but that is not so, unless a trust were created. 66 Every deed," &c., does not mean every trust-deed, but any deed of these three classes. The second condition under sect. 192, says: "If a trustee, &c. be appointed by such deed," &c., showing that the absence of a trust-deed was distinctly contemplated. If the argument contra be correct, the conveyance would be to a trustee and not to the general body of creditors. Sect. 194, too, shows that only a part of the estate may be conveyed, which destroys the plt.'s argument, and shows the Legislature's intention to make a different provision for the future. [WILDE, B.-The deed, on the face of it, is a deed between the debtor and the creditors who sign; but how does it appear that it will bind any one who does not sign it?] They are all made parties and bound by the operation of the Act itself, under the express words of sect. 192, just as if they had signed; and as to a deed, under sect. 194, that section refers back to sect. 192; and, linking the two sections together, they would be equally bound in that case. The argument of "unreasonableness" cannot avail against the clear intention of the Legislature. [POLLOCK, B. B.-The recent statute is an Act to give effect to the doctrine of cessio bonorum, and here he has given up nothing; it is a mere promise to pay.] The language of the Act "and all property comprised" therein (seventh condition, sect. 192) makes it good; and, if necessary, those words may on the construction of the whole Act be read, "and all property if any." [MARTIN, B.-I have carefully read the Act and all the cases, and in my opinion the deed is not good unless there be an assigninent of some

El. & Bl., and the judgment of Jervis, C.JN All the cases are cited, and a summary of the ar given, in Larpent v. Bibby, 5 H. of L. Cas. 45. With regard to the Lord Chief Baron's observation to sect. 195 tends to show that this deed is not within the Act, the answer is, that the stamp duty is to assessed on "the property comprised" in the des and if there is no property assigned, no ad vaira stamp is required. [POLLOCK, C. B.-Had a promise to pay been contemplated, an ad valorem duty on the amount so promised would probably have been fi The principle of reddendo singula singulis mast be adopted in construing the various sections of the Act In sect. 195 the words are, "estate or effects compe in or to be collected or distributed under such deed” in sect. 197 the words "who have assented therete, or bound thereby," were introduced to meet the very difficulty here raised, that outlying creditors are bound because the Act makes them bound, as if t debtor had been adjudged a bankrupt," &c. Theres no hardship as has been suggested, for, under sects. 15% 154, plt. would come in and prove for the capital the premiums, and receive his composition in resp of them. Sects. 185 to 191, referred to on the f side, have nothing to do with the class of sect which relate to this case. Sects. 192 to 200 must construed with the aid of intermediate cases, effect cannot be given to them if composition-deeds, excluded, and to do that would be contrary to the Act. and judgment should therefore be for deft.

Macnamara for deft. Spokes.-It is no longer ne sary that the deed should provide for the distribut of the estate. The present arrangement clauses wert evidently framed with the view of increasing the creditors' power of arranging with the debtor, of the want of which power the mercantile community complained. The court will not assume that three