C. and left his £150 on deposit with him. On the 8th December J. left New South Wales with intent to defeat his creditors. On the 21st December C. was served with a petition in bankruptcy for the sequestration of J.'s estate. On the 30th December C. paid to F. the sum of £70. On the 4th January, 1923, J.'s estate was compulsorily sequestrated. On the 9th January C. was notified not to pay away any moneys belonging to J. The official assignee of J.'s estate claimed that C. was liable to account to him for the sums of £150 and £70 respectively. There was no evidence to show that J. owed £70 to F. Held, as to the sum of £150 (1) that there was an equitable assignment which was valid against the official assignee, since the latter had not perfected his title by notice to the debtor prior to the completion of the assignment to K., and (2) that it was a payment to a creditor before sequestration and without notice within the meaning of s. 57 (a) of the above Act. Held, further, as to the sum of £70, (1) that there was a mere voluntary assignment of a chose in action, and that, as J., had not done everything which he might have done to vest the same in F., no valid equitable assignment was created; (2) that C.'s authority to pay was revoked by notice on the 21st December of an act of bankruptcy and (3) that the payment was not a transaction protected by the provisions of s. 57 (a). Re DUCK JARM; Ex parte THE OFFICIAL ASSIGNEE; CHAN (OR CHUNG) EUNG DAY, 24 S.R. 521; 41 W.N. 138. [New South Wales.]

Payment away- Notice of act of bankruptcy Knowledge of facts-Inference from. -S. held certain moneys pending the completion of the purchase of a business from the bankrupts D. and M. On the 6th December, 1922, S. knew that a bankrupety notice had been issued by F. against D. and M. and that the time for compliance with the same expired on the 8th December. On the 7th or 8th December, S., in order to protect F., suggested to F.'s solicitor that a garnishee summons be issued against him. On the 9th December a garnishee order nisi was served on S. by F., attaching sufficient of D. and M.'s moneys in S.'s hands to satisfy the judgment debt, the subject of the bankruptcy notice referred to, but an act of bankruptcy had already been committed on the last moment of the 8th December as such bankruptcy notice had not been complied with. The garnishee order nisi was never made absolute. The purchase was completed on the 15th December, and on the same day S., on the written authority of D. and M., paid out of the moneys held by him the amounts owing to F. and to other creditors, and paid the balance to D. and M.'s solicitor. Afterwards D. and M.'s estate was sequestrated by reason of the commission subsequently of another act of bankrupcty. Held, that as the natural inference to be drawn from the facts within S.'s knowledge was that an act of bankruptcy had been committed, S., must be taken to have had notice of an available act of bankruptcy in fact, committed, and therefore that

the payment away of the moneys held by him was not protected by s. 57 of the Bank ruptcy Act 1898. Re W. J. DICKSON and L. S. MACKAY, 24 S.R. 565; 41 W.N. 146. New South Wales.]

Composition-Act of bankruptcy-Payment to creditor in good faith-Knowledge by creditor of debtor's position-Concealment. -The debtor, the proprietor of a business, on the 4th May, 1924, instructed one of his creditors to sell his business, and the same having been sold the proceeds were paid into a bank to a trust account to be operated by the creditor and the debtor. At a meeting of the debtor's creditors held on the 11th May, at which a statement of the debtor's indebtedness (£2219), and assets (£1876) was submitted, the creditors whose existence was then disclosed, agreed to accept a composition of 16/- in the £ for their debts conditionally on all creditors agreeing to accept the proposed composition, and they were paid accordingly. The sum of £218 was on the 16th May, paid to the creditor in respect of a debt of £273 owing to his firm. The debtor was on his own petition adjudged a bankrupt on the 29th May. The business was in substance the debtor's only asset. addition to the debts in respect of which the composition was paid, the debtor owed debts amounting to more than £1200 which were not disclosed to the meeting. When the payment of £218 was made to creditor, the latter had endeavoured to ascertain the debtor's financial position and did not know or suspect that the debtor had concealed from him his true position. The Official Assignee moved to have the payment to the creditor declared to be fraudulent and void as against himself. Held, dismissing the motion that although the payment of the composition was an act of bankruptcy, the creditor was protected under s. 82 of the Bankruptcy Act 1908. Re COCHRANE, 1924 G.L.R. 554. [New Zealand.]

In

Insolvency-Evidence on interlocutory motion-Hearsay-Admissibility Cross-examination of deponent Examination of insolvent in Chambers-Object of Power to adjourn— Insolvent Act 1886, ss. 35, 171, 188, 309. Prior to his adjudication, and insolvent, the respondent on his appeal, had commenced certain actions in the Supreme Court alleging fraud and misrepresentation against parties with whom he had made transactions in land. After the adjudication, by order of a Judge of the Supreme Court, the Official Receiver had been substituted as plaintiff in these actions. An order was subsequently made in the insolvency proceedings that the examination in Chambers of the insolvent and all other insolvency proceedings should be adjourned until the Supreme Court proceedings should be determined or until further order. On the hearing of the motion on which the order was made an affidavit of the insolvent's solicitor was used which contained statements based on information and belief. The solicitor for opposing creditors applied to cross-examine the deponent, but the appli

cation was refused on the ground that there was no jurisdiction to order cross-examination. The Official Receiver was not represented on the hearing of the motion. The unsecured liabilities of the insolvent amounted to £6,000; there was no free assets in the estate other than the above rights of action, and the excess of assets over secured liabilities amounted to about £30. Held, that the motion was in its nature interlocutory, and the Insolvency Court had a discretion to admit evidence deposed to on information and belief. Held, also, that the Insolvency Court had jurisdiction to order the crossexamination of the deponent and that the ground of its refusal was wrong, but held, that, as there was sufficient material in the affidavit considered, unchallenged and unobjectionable, to justify the order made on the motion, cross-examination should not be allowed. Held, assuming that there had been an order to examine the insolvent in Chambers, the Insolvency Court had jurisdiction to make the order made on the motion and to adjourn any proceedings at its discretion. Held, further, as (1) there was sufficient unobjectionable matter in the affidavit to justify the order made; (2) there was no suggestion that property of the insolvent had not been made available; (3) there was no estate to be dissipated by the proceeding with actions which might prove unsuccessful; (4) that no detriment could ensue to creditors if they desired to examine the insolvent in Chambers with a view to laying charges, and that irreparable hardship might ensue to the insolvent if the adjournment were not granted, that the order appealed from should be affirmed with a variation giving liberty to persons interested to apply for removal of the stay. Where the Court is asked to make an order for the examination of an insolvent in Chambers it has a discretion whether it will grant it or not, and where the application is made by anyone other than the Official Receiver or trustee in insolvency the applicant should make out a prima facie probability that some benefit will result to the estate from the examination. Objects of examination of insolvents in Chambers discussed. In re JOHN O'BRIEN; Ex parte ALLCHURCH, 1923 S.A.S.R. 411. [South Australia.]

of

Bankruptcy Act, 1908, ss. 98 and 101Proof by creditor-Damages Breach contract by bankrupt-Land agents-Representing financial ability of purchaser. The bankrupts were land agents and were employed to sell the creditor's farm. They procured a purchaser who entered into a contract of purchase, but he failed owing to financial inability to complete the purchase. The creditor sued the purchaser and recovered damages against him, the latter becoming bankrupt, his estate paying no dividend. The property was resold at a smaller price, The creditor alleged that the bankrupt land agents had negligently misrepresented the financial ability of the first purchaser, whereby he had suffered loss. The Official Assignec rejected the creditor's proof for

the loss sustained by the breach of the bankrupt's duty in misrepresenting the first purchaser's financial ability. Held, that the Official Assignee was wrong in rejecting the proof as barred by s. 98 of the Bankruptcy Act 1908, but that the creditor was not entitled to prove for his loss on the resale, but his proof must be based on an estimate of the value of the chance of which he had been deprived by the wrongful act of the bankrupt; nor was he entitled to claim the expenses of enforcing the contract against the defaulting purchaser, nor could he claim general damages, nor for the promissory note that had been taken from the defaulting first purchaser for the deposit on the purchase, and that no case of election arose. Re FORBES, 1924 G.L.R. 80. [New Zealan1.]

Property passing to Official Assignee Bankruptcy Act 1908, s. 61 (a) -Moneys payable under Accident Insurance Policy— Whether protected Policy taken out during Bankruptcy. A debtor, during the continuance of his bankruptcy, took out an accident insurance policy and paid the premium in respect of the same out of moneys earned by him. The policy was expressed in the usual terms. A few months later he suffered death as the result of an accident. Held, that, as the payments due to the company issuing the policy were not by the policy itself expressed to be payable during the lifetime of the assured or for seven years at least, the policy was not within the protection afforded by s.65 of the Life Insurance Act 1908, and that the policy moneys accordingly passed to the Official Assignee in bankruptcy of the deceased policy holder and not to the administrator of the deceased bankrupt. LONDON AND LANCASHIRE INSURANCE CO. LTD., v. FISHER, 1924 N.Z.L.R. 1286. [New Zealand.]

Shares held in Company by bankrupt Disclaimer by Official Assignee Debt by Company to bankrupt.-Set-off-If shares in a company are disclaimed by the Official Assignee upon the bankruptcy of a shareholder, and if, for purposes of proof, an estimate is made, pursuant to s. 111 of the Bankruptcy Act 1908, of the amount claimable in respect of future calls thereon, the company may set off, as against such amount, a sum due by the company to the bankrupt for goods supplied to it by him. In re ANDERSON, 1924 N.Z.L.R. 1163. [New Zealand.]

Adjudication-Debtor an "assisted discharged soldier "-Point not taken till after adjudication-Motion to set aside adjudication -Jurisdiction of Registrar.-A person may by his conduct waive a statutory provision intended for his benefit, provided it is not a rule of public policy. Phillips v. Martin (11 N.S.W.L.R. 153); Connell v. Phoenix Aerated Water Co. (34 N.Z.L.R. 666; 17 G.L.R. 558) and Wilson v. McIntosh ([1894] A.C. 129) followed; Gardiner v. Boag (1923 N.Z.L.R. 739; G.L.R. 140) discussed and distinguished. The regulations relating to assisted discharged soldiers in s. 22 of the

Second Schedule to the War Regulations Continuance Act 1920, are not in their nature a declaration of public policy, but are simply provisions intended for the benefit of returned soldiers, which may be availed of at the will of the individual affected. In re TOLLISON (A BANKRUPT), 1924 N.Z.L.R. 860; G.L.R. 240. [New Zealand.]

Bankruptcy Act 1892, ss. 17 and 21-Application for approval of composition-Exercise of discretion by the Court.-The debtor was adjudicated bankrupt in 1897, disregarded the bankruptcy and continued to trade in the names of different members of his family, kept racehorses and a motor car, and made no effort to pay his creditors. On assets being discovered by the official receiver, the debtor proposed a composition which was not accepted by the creditors at the first meeting, but was subsequently accepted by the requisite majority. Held, that the proposal should not be approved. In re DOBSON, 1924 W.A.L.R. 28. [Western Australia.]

Property held by bankrupt as trustee-Right of cestui que trust to follow trust propertyBankruptcy Act 1892, s. 42.-Prior to his bankruptcy, C., who was trustee for his wife and daughter, deposited £300 of trust funds with the bank to secure an advance of £800 made by the bank to Scottish Collieries Co. Ltd. The loan was repaid to the bank, but C., having become bankrupt the bank asked the Court to determine whether the £300 should be paid to his wife and daughter, or to the official receiver. The bank also held an amount of £48 representing dividends of shares in the W.A. Bank, standing in the name of C. Held, 1. That the £300 represented trust moneys held by C. to which his wife and daughter became entitled, and that it should be paid over to them. 2. That the official receiver had no claim to the shares or the sum of £48. In re CLIFTON (A BANKRUPT) 1924 W.A.L.R. 41. [Western Australia.]

Protected transaction-Part payment of past debt-Notice of prior acts of bankruptcyFraudulent preference-Onus of proof-Costs. -Where a payment is impeached by the Official Assignee in Bankruptcy as constituting a fraudulent preference, the onus is on him not merely to show insolvency, but also to prove that the payment was made by the bankrupt with a view to preferring the particular creditor: Re Laurie (67 L.J.Q.B 431).

If, however, the payment is proved to have been a fraudulent preference, the onus of proof that the creditor acted in good faith is on the creditor himself; Ex parte Tate (35 L.T. 531). O., a farmer and stockdealer, had been financed by defendant company without security, and in July, 1922, he owed the company £1117. When pressed to reduce this sum he was unable to do so and a new arrangement was entered into whereby O., was to devote his energies to a stock dealing business financed by the company drawing sufficient advances for his personal needs, the remaining profits being applied in reduction of the past debt. For this

purpose the old account was closed and a new account opened referred to as the No. 2 account. This arrangement continued until O.'s bankruptcy on August 14, 1923. At the date of the bankruptcy the debit balance of the old account stood at £1227 and the No. 2 account showed a balance in O.'s favour of £516 and combining the two accounts there was a debit balance against O. of £711. In the meantime sums of about £500 had been paid out of the No. 2 account to O. for his personal expenses but no transfers had been made from the No. 2 account in reduction of the old account. So the matter stood on 14th August, 1923. On July 3rd and 4th, however some six weeks before his bankruptcy 0. had collected all live stock belonging to him (excluding certain stock under bill of sale to another creditor), and placed them in the hands of defendant company for sale. The Company sold them and placed the proceeds (£800 12s. 3d.) to the credit of O. in the No 2 account, which prior to this transaction was in debit £238. Had it not been for this transaction O. owed the Company £1500. In O.'s statement to the Official Assignee of his assets and liabilities he omitted all reference to his debt to the defendant company and did not disclose his financial relations and dealings with the company and the Court was satisfied by the evidence that in so concealing his relations with the Company O. acted with the knowledge and approval of the company. the Official Assignee claimed the said sum of £800 12s. 3d. as money had and received to the use of plaintiff as having been paid to the defendant in breach of the Bankruptcy Act on the grounds: (1) that the payment had been invalidated by the relation back of the bankruptcy, because within three months before adjudication O. had committed two acts of bankruptcy of which the Company had notice and was therefore not entitled to the protection of s. 83 of the Act; and (2) that the payment was a fraudulent preference. Held, on the facts that the plaintiff had not proved that the company had notice of the prior acts of bankruptcy, nor that the transaction was a fraudulent preference, and that judgment must be for defendant. Held, also, that as the defendant had brought this litigation upon itself in consequence of the suspicions created by the concealment of the financial transactions between the bankrupt and the company, a concealment to which defendant was a party, it was disentitled to costs. Ritter v. Godfrey ([1920] 2 K.B. 47) followed. OFFICIAL ASSIGNEE IN BANKRUPTCY OF O'ROURKE v. THE WAIRARAPA FARMERS' CO-OPERATIVE ASSOCIATION LTD., 1924 G.L.R. 449. [New Zealand.]

Whether fraudulent preference-Purchase of engine on terms-Delivery of cheque for instalment more than six months before adjudication-Error made in drawing cheque -Substitution within six months of adjudication of payment by cash for cheque.— In May, 1921, P. purchased an engine from B. on terms of £25 deposit and four quarterly payments of £21 5s. each. The first quarterly

payment was duly made, the second after some delay, and the third fell due on 24th February, 1922, but was not then paid. On 14th March, 1922, P. sent to B. a cheque in payment, post dated 5th April, 1922. The cheque was irregular and for an excessive amount, and B. wrote P. asking for necessary alterations and initialling and the return of the cheque when altered. P. did not return

the cheque, but on 18th April, 1922, paid B. £21 5s. in cash. P. at this time was carrying on a successful motor-carrying business, and distributing his profits among his creditors. On 17th October, 1922, P. was adjudicated insolvent, and on motion to have the said payment of £21 5s. declared a fraudulent preference within the meaning of s. 107 of the Insolvency Act of 1874. Held, that the said payment was in exchange for the cheque, the property of the respondent, and was not made to respondent in the character of a creditor, but as the holder of a negotiable document, and which by such exchange was transferred from the respondent to the insolvent. Held, also, that the payment was not made with a view to prefer, and was made in good faith and for valuable consideration. In re PETERSEN, 1924 S.R. (Q.) 20. [Queensland.]

Bankruptcy Act 1898, s. 55 (1)—Statute (Fraudulent Conveyances) 13 Elizabeth c. 5— Voluntary settlement-Conveyance with intent to defeat or delay Transfer of landExpenditure on land by transferee-Avoidance of transfer. On the 22nd May, 1922, the bankrupt, at a time when he knew that his liabilities exceeded his assets, transferred certain land to his daughter in consideration of "natural love and affection and the sum of 10s." The land transferred was subject to a mortgage and to certain unpaid rates. After the transfer the daughter incurred expenditure in reducing the principal mortgage moneys, in payment of the rates overdue and in effecting certain repairs. On the 28th March, 1924, the estate of the bankrupt was sequestrated. Held, that the official assignee was entitled to an order declaring void or setting aside the transfer, but only upon such terms as were necessary to prevent an injustice being done to the respondent. Re H. E. JONES; Ex parte THE OFFICIAL ASSIGNEE; ELLEN HAWKINS, 24 S.R. 533; 41 W.N. 140 : [New South Wales.]

Bankruptcy Act, 1898 No. 25, ss. 51, Bills of Sale 10, Act, 1898 No. Pro

56

s. 4

Preference to creditors perty in Goods-Hire purchase agreement or bill of sale-Substance of transaction, not form, to be regarded.—The bankrupt agreed to purchase a business from W. & W., for a specified sum. Thereupon by agreement in writing, it was provided that W. & W. should hire the stock in-trade on the business premises on terms of payment of the specified sum (less the deposit) by monthly instalments over a period of two years. The bankrupt was to be entitled to sell in the ordinary course of business any of the property hired to him, but he was to replace goods sold so as

to maintain the stock up to the value at least of the specified sum. The hiring could be terminated in certain events, but the property on the premises was to remain the sole property of W. & W. until the whole of the stipulated payments had been made, and in certain events they could seize the stock-in-trade including any substituted or added goods. In March, 1923, W. & W. seized all the stock as the bankrupt was in arrears in his. payments. Subsequently the latter notified a creditor of suspension of payment of his debts. Thereafter a sequestration order was made and his official assignee claimed the whole of the stock seized by W. & W. The document referred to had not been registered as a bill of sale. Held, that the document, construed according to the true nature of the transaction, and disregarding its mere form, was within the Bills of Sale Act and as it was unregistered it was void as against the official assignee. Re JAMES A. O'MARA; Ex parte THE OFFICIAL ASSIGNEE, SAMUEL WALDER & ROBERT Walder, 24 S.R. 352; 41 W.N. 75. [New South Wales.]

Declaration of trust as to mortgage in favour of official assignee by bankrupt's mother— Subsequent acceptance of payment in lieu thereof-Distribution of dividend to creditors. -For three years prior to his bankruptcy, bankrupt resided with his parents on his father's farm, and there carried on his farming business under an arrangement which provided that he was to have all profits over £200 per annum, and a right to purchase the farm within a certain period at £16 per acre. It was suggested that a partnership existed between bankrupt and his father, and that credit had really been given to the father, who, told some of the creditors that he would meet his son's obligations. After the official assignee assumed control of the bankrupt's estate, bankrupt's mother executed a deed in which she declared that she held a mortgage in trust for the official assignee in the bankrupt estate of the said Nicholas Stanley Sircombe." After the execution of this declaration the owners of the property which was subject to the mortgage offered to pay it off if a discount were allowed. Mrs. Sircombe's solicitors then offered to pay the official assignee a sum equal to 13s. 4d. in the pound if he would release the declaration of trust in his favour and this offer was accepted. Held, 1. That the arrangement was not a composition within the meaning of Part II. of the Third Schedule of the Bankruptcy Act 1908. 2. That, as the money reached the hands of the official assignee before bankrupt obtained his discharge and was applied in payment of a dividend, the official assignee was entitled to include the amount received in the sum total of bankrupt's property and to charge commission thereon. In re Christie ([1900] 1 Q.B. 6) and Thomson v. Thomson (11 N.Z.L.R. 483) distinguished. In re SIRCOMBE, 1924 N.Z.L.R. 1016; G.L.R. 303. [New Zealand.]

Discovery of bankrupt's property-Examination of witness-No admission-Evidence—

Jurisdiction. Upon the examination before the Registrar in Bankruptcy of a witness summoned before the Court under the provisions of s. 30 of the Bankruptcy Act 1898, the witness, who was the wife of the bankrupt, made no admission that certain property in her possession was the property of the bankrupt, but on the contrary gave evidence that she had an interest in such property adverse to the bankrupt. The registrar disbelieved her evidence. Her testimony was the only evidence before the Court, as upon its conclusion the official assignee, without offering any evidence in support of his claim, asked for an order under s. 30 (5) of the Act directing the witness to deliver up possession of the property in question. The Registrar made the order asked. Held, that on the evidence adduced the Registrar was not entitled to hold that the official assignee had proved to his satisfaction that the property in the possession of the appellant was the property of the bankrupt, and accordingly that he had no jurisdiction to make an order under the provisions of s. 30 (5) of the Act. Re JOHN PATRICK SMITH, 24 S.R. 559; 40 W.N. 144. [New South Wales.]

by plaintiff, defendant admitted liability for the sum of £500, and gave a promissory note for £500 payable on demand. On its front side the note was written in English, and on the back there was a translation of the note written in the Maori language and signed by defendant. On the back of the note there was also endorsed a certificate to the effect that the note was interpreted to defendant before he signed it and that he understood the liability for payment implied thereby. The promissory note was in due course presented for payment and was dishonoured. The Bills of Exchange Act 1908, s. 97 (1) provided that no Maori should be held liable on a note unless it showed upon its face that it was duly interpreted to such Maori at the time of the making or acceptance thereof. Held, that the expression upon its face" here meant shown upon any part of the instrument," as distinguished from being shown on an instrument or paper not physically connected with the promissory note, and that the note was therefore valid, and that defendant must pay it. Ryan v. Oceanic Navigation Co. Ltd. (3 K.B. 731) applied; Given & Co. v. Hipango (5 G.L.R. 288) distinguished. BURGESS v. ROPIHA, 1924 N.Z.L.R. 609; G.L.R. 235. [New Zealand.]

66

The

Promissory note subject to defeasanceOnus of proof that defeasance had arisen— Statute of Limitations.-In June, 1916, plaintiff sold to defendant the script, scenery, etc., of several revues for the sum of £150. bargain was made in Brisbane and a memorandum was then signed which provided that £125 of the purchase money should be paid on delivery and a promissory note given for the remaining £25 payable January 1st, 1917, provided defendant at that time still owned and was showing or had sold the revues, and otherwise the note was not to be paid. When the note fell due plaintiff was in New Zealand and defendant was in Australia and did not come to New Zealand until 1923. In an action for the amount of the promissory note and interest. Held, 1. That the Statute of Limitations did not commence to run until defendant arrived in New Zealand and therefore the action was not Statute barred. 2. That the onus of proving that the circumstances had arisen which would render the promissory note void was upon defendant, and, on the facts, that he had not discharged the onus. Judgment for plaintiff for amount claimed. RUSSELL v. PHILLIPS, 19 M.C.R. 23. [New Zealand.]

Cheques payable to order-Crossed" not negotiable "Cheques cashed by bankerCollection from drawer's banker-Subsequent repayment-Cheques obtained by fraudPurported indorsement by non-existent payee -Sale of cheques-Indorsement by sellerImplied warranty Rights of purchaserDamages Interest. The defendant, a customer of the plaintiff bank, at the request of S.D., the widow of F.D., who had recently died, attended with S.D. at the branch of the plaintiff bank at which he kept his account, presented a cheque to the teller, and asked him