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Mr. Wigram. In Ex parte Hall(a), the Vice-Chancellor of England decided that the 18th section was applicable to a case, not only of deficiency in the amount, but to any original defect in the nature of the debt of the petitioning creditor, upon which the commission issued.
Smitu and others.
The Chief Judge. That decision refers to an existing debt. Suppose, instead of issuing a fiat, the petitioning creditor had brought an action,-if a man arrests me for a debt, and I owe him nothing, there is no debt ;the issuing of a fiat, therefore, does not, any more than the issuing of a writ, constitute a debt. I should wish, however, to know more accurately the circumstances of
if there was some debt existing at the time of suing out the fiat, then the application may be granted ; but, if there is no foundation whatever for a debt, I cannot make the Order.
Mr. Bacon. The sale of the goods by the petitioning creditor to the bankrupt took place on the 1st of September 1841. The day when the outstanding bill became due, which was given in payment for the goods, cannot be said to be the date of the contracting of the debt.
The Chief Judge.-If there was a floating debt, then there is no doubt that the 18th section may apply. But,
(a) Mont. & Mac. 39. So in Ex parte Smith, re Withum, which occurred before the Vice-Chancellor of England on the 1st July 1830, a note of which was furnished to the authors by Mr. Ayrton, his Honour said, that the 18th section was not confined to the amount of the debt alone; and that if, on reading the affidavits, it turned out that the petitioning creditor's debt was not fictitious, the Order for substitution might be made ; but not, if the debt was fictitious, as in that case it could not be ascertained whether the debt proposed to be substituted was not anterior.
as I observe there is no allegation in the petition, that the debt proposed to be substituted was incurred not anterior to the debt of the petitioning creditor, the petition must be amended, for the purpose of introducing such an allegation ; after which the question may be more fully discussed.
Mr. L. Wigram said, that the petition had now been amended by the introduction of the necessary allegation, and that he was prepared also with an affidavit, that the debt proposed to be substituted was incurred not anterior to the debt of the petitioning creditor.
Mr. J. Russell, for the bankrupt. These orders are not made, unless the Commissioner certifies that the debt proposed to be substituted was incurred not anterior to the petitioning creditor's debt; Ex parte Hunter (a). It is important to the bankrupts' interests, that it should be positively ascertained by the proper authority, that the debt to be substituted was not anterior to that of the petitioning creditor. Here is a large debt stated to be due to these petitioners, which has been accruing for several years, and part of it must therefore be anterior to the debt of the petitioning creditor. The affidavit states, not that the debt proposed to be substituted was incurred not anterior to that of the petitioning creditor, but that it was incurred not anterior to the 1st September 1841.
The Chief JUDGE.-There may be some difficulty in substituting the debt of the petitioners, as it stands upon the proof made by them under the fiat. They have proved for a large amount, a great portion of which
(a) 2 Deac. & C. 507.
appears to have been for a debt incurred by the bankrupt anterior to that of the petitioning creditor, and some portion of it for a debt not anterior, which may bear upon the act of bankruptcy.
Smith and others,
Mr. Wigram proposed that there should be two proofs, one for the part of the debt anterior, and the other for the part not anterior.
The Chief Judge.—That perhaps may do.
Mr. Wright, for the petitioning creditor, said, that the affidavit of the debt stated to be due to the petitioners was made by an accountant, and not by any one of the petitioners.
The Chief Judge.--I am bound to believe the contents of the affidavit to be true, until I hear evidence to the contrary.
Mr. Wright then submitted, that the petitioning creditor was entitled to his costs out of the bankrupts estate. In Ex parte Cousins (a), which occurred before Sir J. Leach, it was held, that, if upon the evidence it appeared that the commission failed through the mistake of law or of fact by the petitioning creditor, then the costs should be paid out of the estate ; but, if it was proved to have been in consequence of the misconduct or fraud of the petitioning creditor, then he should pay the costs occasioned by such fraud, and of the consequent application to the Court to substitute another debt. In Ex parte Hall (6), also, the Order directed that the costs should be paid out of the bankrupt's estate. There are certainly some decisions the other way, viz., Ex
(a) 2 G. & J. 270.
(1) Mont & M. 43, note (a).
SMITH and others.
parte Lloyd (a), and Ex parte Hayne (6). But it is submitted, that the two cases decided by Sir Thomas Plumer and Sir J. Leuch are of greater authority than the two last cited cases; and that as, in the present instance, the petitioning creditor has been guilty of no fraud or misconduct, he ought to have his costs.
Vice-CHANCELLOR KNIGHT BRUCE, C. J.-I shall make an Order under the 18th section for the substitution as to 3001., part of the debt proved by the petitioners, which accrued due since the 1st of September, 1841; and there will be no Order as to the costs of the petitioning creditor.
The matter was spoken to again this day before his Honour on the minutes, and as to the question of costs.
Mr. J. Russell. The bills that were given by the bankrupt to the petitioning creditor for the goods purchased by him on the 1st September 1841, were not due, until after the debt proposed to be substituted was contracted by the bankrupt with the petitioners; it therefore cannot be said to be not anterior to the debt of the petitioning creditor.
The Cruer Judge.--The Order, as it at present stands, is my judicial decision; but you may take it without prejudice as to that point.
The Order was as follows: it is given at greater length than usual, as it was settled with some care by his Honour the Chief Judge, and has been since adopted in the office, in lieu of the form set out in Ex parte Hall (c).
After reciting the prayer of the petition, and the previous proceedings,—the Order went on to state, that, the petitioners undertaking to apply within a fortnight to a judge at chambers in the two pending actions in which the assignees were plaintiffs, and to abide by any Order which the said judge, or the Court of Exchequer, should make touching the premises ;-and it appearing to this Court, that the said fiat was awarded and issued on the petition of the said Adam Brierley, and that after adjudication thereunder, and before preferring the said petition, the debt of the said Adam Brierley, the petitioning creditor, on which the said adjudication was made, was found to be insufficient to support the fiat, within the intent and meaning of that part of the statute of the 6 Geo. 4. c. 16. intituled, “ An act to amend the laws relating to bankrupts," whereby it is enacted, that if, after adjudication, the debt or debts of the petitioning creditor or creditors, or any of them, be found insufficient to support a commission, it shall be lawful for the Lord Chancellor, upon the application of any other creditor or creditors having proved any debt or debts sufficient to support a commission, provided such debt or debts has or have been incurred not anterior to the debt or debts of the petitioning creditor or creditors, to order the said commission to be proceeded in, and it shall by such order be deemed valid; And it appearing to this Court, that the said petitioners had proved their said debt before preferring their said petition, and that their said debt, or a part thereof, was sufficient to support a fiat against the said bankrupts, and that their said debt, or a part thereof sufficient to support the said fiat, was incurred not anterior to the said debt of the said Adam Brierley ; This Court doth order, that the said fiat be