Hills v. M'Rae. appointed a trustee in the place of the absent trustee, and that the solicitor appointed to convey concur with the continuing trustee in conveying the premises, so as to vest them in Bowman and the continuing trustee. To a claim seeking payment of a partnership debt out of the assets of a deceased partner, the surviving partner is a necessary party. THIS was a claim filed by a creditor of the firm of George Potter & Co., against the personal representatives and residuary devisees of Donald M'Rae, deceased, who was one of the partners in the firm of George Potter & Co. Potter, the surviving member of the firm, was not a party to the claim. W. Morris, for the plaintiff, submitted that it was not necessary to make George Potter a party since the 32d order of August, 1811; that this order put a plaintiff in equity in the same position as a plaintiff at law, where, if the defendant did not plead in abatement the non-joinder of a co-debtor, the action proceeded in his absence; that, at all events, it was not necessary to make him a party to the claim, as the decree could not be made against him; Wilkinson v. Henderson, 1 My. & K. 582; and that if he were a necessary party to the proceedings, he might be summoned to attend the master. As to the form of decree, he referred to Seton on Decrees, 239, and Devaynes v. Noble, 1 Mer. 538. Woolley, for the defendants. SIR GEORGE TURNER, V. C., said he considered Potter a necessary party to the claim. The 32d order did not, he thought, apply to this case, for the surviving partner was the party legally liable to pay the debt, and might in fact have paid it. The rule in equity as to nonjoinder of co-debtors was different from the rule at law. Mr. Potter might be summoned before the master; and the proper decree to be made was to take an account of the personal estate of the deceased partner, and of his separate debts, and lastly of the joint debts. There would be a declaration that the joint creditors were entitled to the surplus after payment of the separate debts. 1 15 Jur. 766. 20* CASES ARGUED AND DETERMINED IN THE COURT OF BANKRUPTCY; DURING THE YEAR 1851. Ex parte JOHNSTONE; in re JOHNSTONE.1 Act of Bankruptcy - Declaration of Insolvency-Adjudication On the 26th of November, a trader signed a declaration of insolvency, and left it in the hands of A., who, with his partners, B. & C., were creditors. The trader was also indebted to B. & C. in respect of another business carried on by them, and owed them rent. On the same day B. & C. distrained and took the trader's goods, and then offered his creditors a composition, they retaining the goods, and this offer was agreed to on the following day, at the office of A.'s solicitor, but A. was not then present. On the 29th of November the agreement for the composition was executed; and afterwards, on the same day, A. filed the declaration of insolvency which the trader had signed on the 26th; and on the affidavit of A. of the joint debt due to him and B. & C., the trader was adjudged bankrupt. The adjudication, on appeal, was set aside. A commissioner may attend to circumstances of equitable invalidity upon an application to retain or not retain an adjudication. THIS was an appeal from the decision of the commissioner under the following circumstances: Mr. Johnstone, the bankrupt, was a publican at Newbury, and a tenant of Messrs. Hawkins & Canning, who were brewers, and who also carried on business as wine and spirit merchants in partnership with Mr. Turner. The bankrupt, in November, 1850, was indebted to Messrs. Hawkins & Canning for arrears of rent, and for the balance of an account for beer; and he was also indebted to Messrs. Hawkins, Canning, & Turner in a sum of 1477. for wine and spirits. On the 26th of November, Messrs. Hawkins & Canning distrained on Johnstone's goods for arrears of rent, and on the same day Mr. Canning, for himself and partner, proposed that Johnstone should relinquish possession of the house, and that they would discharge him from the debts he owed them, and would pay his other creditors 5s. in the pound on their respective debts, Hawkins & Canning, however, retaining possession of the goods 1 15 Jur. 739. Ex parte Johnstone; in re Johnstone. distrained. To this proposal Johnstone acceded, and on the following day a meeting of Johnstone's creditors was held at the office of Messrs. Bunny, Mr. Turner's solicitors. Mr. Graham, the solicitor for Messrs. Hawkins & Canning, was present at this meeting, and stated to the creditors the proposal before mentioned. Mr. Turner was not present at the meeting, but all the creditors who were present agreed to accept the composition, and signed an agreement to that effect. On the 28th of November, Messrs. Hawkins & Canning signed a memorandum of agreement, on the same paper which had been signed by the creditors, for the payment of the composition; and on the morning of the 29th of November an agreement was executed between Johnstone of the one part, and Hawkins & Canning of the other part, whereby, among other things, Hawkins & Canning undertook to pay the several creditors of Johnstone, "including the said firm of Hawkins, Canning, & Turner," the composition of 5s. in the pound on their respective debts. At about noon on the same 29th of November, Mr. Turner caused a declaration of insolvency, which had been previously signed by Johnstone, to be filed, and on the same. day filed a petition for adjudication in the name of himself and partners, he making an affidavit of the joint debt of 147., and thereupon Johnstone was adjudged bankrupt. On the 2d of December, Johnstone gave notice to dispute the adjudication on the 5th, and the meeting on that day was adjourned, and on the 12th of December, Mr. Commissioner Goulburn confirmed the adjudication, and ordered the bankruptcy to be advertised. The declaration of insolvency was dated at nine o'clock in the afternoon of the 26th of November, 1850, and was attested by Mr. Bunny. In the bankrupt's evidence, he stated that he did not know that the paper he signed was to make him a bankrupt. The bankrupt now appealed from the decision of the commissioner, by which he refused to annul the adjudication upon the cause shown by the bankrupt, as provided by the 104th section of the Bankrupt Laws Consolidation Act, 1849, 12 & 13 Vict. c. 106. Bacon and Bagley, for the appeal. Russell and Bramwell, for the respondents, contended that the filing of the declaration was conclusive, and the circumstances attending it could not now be inquired into. They relied on the 70th, 96th, and 101st sections of the same statute. Bacon was not called on to reply. KNIGHT BRUCE, V. C. In this case I differ from the able and excellent commissioner before whom it has been, and with whom I have almost uniformly had the satisfaction to agree; nor, after a knowledge of more than thirty years, can I say that there is any man with whom I better like to agree. This case, however, has appeared to him in a light in which it does not appear to me. As to the point upon the interpretation of the act of 1849, the clause in question. is probably among the many dark passages that statute contains. Ex parte Johnstone; in re Johnstone. The interpretation contended for in the argument for the respondent appears to me not necessary, and one not to be adopted without absolute necessity. To adopt it would, in my opinion, lead to great and general inconvenience, and it is an interpretation which, whether contemplated or not by those who framed this act of Parliament, is one which a court of justice cannot adopt. I am of opinion, that, according to a just interpretation of this act of Parliament, it is competent to a commissioner, upon an application to adjudicate, or to retain an adjudication of bankruptcy, to attend to equitable as well as legal circumstances, and not to adjudicate, or retain an adjudication, although there may be all the legal requisites, when circumstances of equitable validity are made manifest to his mind. That is my impression, which, as it is a point of some general importance, I think right now to declare, although I do not know that that is necessary to the decision of the present case, for, according to my view of it, its legal invalidity is doubtful, or more than doubtful, and its equitable invalidity certain. The signature of the alleged bankrupt to the declaration of insolvency may have been properly obtained. I had rather not give an opinion on that particular point. I would rather assume that it was properly obtained. But between the time of its signature and the time of using it, circumstances had occurred very important in varying the position of the man who signed it, and of those who were interested in it and in his affairs- circumstances had occurred to the knowledge of Mr. Turner, and of Mr. Turner's solicitor. In my opinion, without intending to speak with the slightest disrespect of any person concerned, without imputing any bad motive to any gentleman whose name has been mentioned in the course of this discussion, it was an act of impropriety to use it as it was used, and an act which it is impossible to approve of or support, as far as my judgment is concerned. I am of opinion, that for every purpose of this case, it must specifically be treated as if the declaration of insolvency had never been on the file, where, as I have said, it ought not to have been placed. It has been said, however, that, putting the declaration of insolvency out of the case, there was still an act of bankruptcy, by reason of the manner in which the goods of Mr. Johnstone had been dealt with. I think it not necessary to give any opinion on the question, whether it would have been an act of bankruptcy if other persons had been concerned than Messrs. Hawkins & Canning. Messrs. Hawkins & Canning are intimately, directly, and immediately concerned in it; and as the petition in this bankruptcy is the petition of them as well as of a third person, it is absolutely impossible to maintain that act in which they were thus concerned as an act of bankruptcy. It has now been objected, that this petition is supported by the petitioning creditors, the partners of Mr. Turner, and has been, in fact, presented under their influence and indemnity, and by their wish. It is not, however, suggested that it is not also the wish of the bankrupt, whose application in form it is that the bankruptcy or the adjudication should be annulled; and, in the circumstances of this case, I am of opinion, that the support the application receives from two of the petitioning creditors rather assists Ex parte Barnett; in re Barnett. than prejudices the case of the alleged bankrupt. Although, therefore, I am differing from a judge I hold in the highest value and estimation, I consider that I cannot allow this adjudication to stand. Ex parte BARNETT; in re BARNETT.1 November 6, 1850. Bankrupt Laws Consolidation Act, 1849 Petition for Arrangement -Costs-Registrar's Jurisdiction. The condition of the existence of a single commissioner in the district does not apply to the 27th section. A debtor presented a petition for arrangement with her creditors, but did not appear on the day appointed for the private sitting, and the petition was dismissed, and an adjudication of bankruptcy was made under the 223d section, and the same was held to be regular. The costs of a creditor, who, though not served with a petition of appeal against the adjudication presented by the bankrupt, appeared by counsel, were allowed out of the estate. In this case the petitioner had presented a petition for arrangement with her creditors, but did not appear on the day appointed for the private sitting, the 19th of August. The registrar of the court, Mr. Curzon, acting for the commissioner, Mr. Balguy, under the 27th section of the Bankrupt Laws Consolidation Act, 1849, dismissed her petition, and declared her a bankrupt, under the 223d section of the statute. She now presented a petition of appeal from that decision, on the ground that the registrar had no jurisdiction to act. Swanston and Glasse, for the petitioner, argued, that the two branches of the 223d section were alternative provisions, and that, after dismissing the petition, the jurisdiction of the court was exhausted, and there was no longer any pending proceeding under which an adjudication of bankruptcy could be made. They also contended, that the only case in which the registrar could sit for the commissioner was in that of a district having a single commissioner attached to it; and further, that it was no longer in the discretion of the court to annul the adjudication or not, but that the application was strictly an appeal, on which the court must decide the question of the validity of the adjudication. De Gex also appeared for a creditor who had proved, but was not served with the petition of appeal, and asked for costs. KNIGHT BRUCE, V. C. Supposing myself capable of acting upon the principles on which this court, in matters of bankruptcy, formerly acted, that although a fiat or commission might be held to be invalid, J 15 Jur. 617. |