estate yielded the statutory amount of dividend, as well as the separate estate; and his right is precisely the same under a joint fiat, Ex parte Powell (a). In Ex parte Farlow (b), Lord Eldon said, "The old course, in the case of a separate commission against one member of a partnership, was, that the joint property could not be administered in the bankruptcy, and therefore the creditors were driven to their bill in equity to ascertain what was to be paid to the separate creditors, and nothing went in the course of distribution as separate estate, but what was distinguished from the joint estate. The Order for keeping separate accounts in bankruptcy has superseded the necessity of a bill; but that is a mere mode of arrangement, which cannot give the bankrupt other privileges than he would have been entitled to, if his joint property had been distributed under the direction of a Court of Equity." And in Ex parte Holmes (c), which was an application by the bankrupt under a separate fiat for his allowance, his separate estate having paid 20s. in the pound, Lord Eldon refused to make the Order, declaring his opinion to be, that, to give the bankrupt his allowance in such a case, would be an improper interference with the right which the joint creditors had to the surplus of the separate estate. Mr. Simon. The cases cited were decided before the 6 Geo. 4. c. 16., the 129th section of which provides for the bankrupt's allowance in case of partnership. And he referred to Ex parte Minchin (d), and Ex parte Gibbs (e). (a) 2 Rose, 449; 1 Madd. 68. (d) Mont. & M'Ar. 141. 1844. Ex parte LLEWELLEN. (c) 2 Rose, 95. 1844. The COURT however thought that the introduction of the words proposed would be incorrect, and made the LLEWELLEN. Order in the usual form. Ex parte Lincoln's Inn, Ex parte TURNEY and others.-In the matter of GEORGE An equitable THIS was the petition of the assignees to have a proof mortgagee of an legally the estate, of which expunged, on the ground that it ought not to have been the bankrupt is admitted, except upon the creditor giving up a mortgage security mentioned in the deposition in support of the proof. owner, may prove, without giving up his security, if the if the estate, which is subject to the mortgage, be so incum bered, that the bankrupt would have no benefi cial interest in it, if the mort gage were removed. The deposition stated, that the bankrupt was indebted to William Robson, the deponent, in the sum of 5161. 19s., for principal and interest due on a joint and several bond, dated 24th November 1829, entered into by the bankrupt and his father, Richard Taylor, the consideration for which was a sum of 850l. advanced by the deponent to the bankrupt, at the time of execution of the bond. And the creditor thereby deposed that he had father equitably not, nor had any person to his use, had or received any manner of security or satisfaction for the debt, except to secure a debt the bond, and the title deeds and writings relating to a A partnership, consisting of a father and son, is dis solved; the mortgages an estate of his own due from the son separately, certain tenement or cottage and garden at Moreton in and afterwards dies indebted, jointly with the son, to an amount more than sufficient Marsh aforesaid, which were some time in or about the year 1840 deposited with the deponent by the order of the bankrupt's said father, to whom the said tenement assets, including or premises then belonged, as a collateral separate sethe mortgaged estate, even if curity from the bankrupt's father to the deponent, to exhaust his the mortgage were removed. The estate descends to the son, who becomes bankrupt: Held, that the mortgagee might prove, and keep his security. for payment of all and every sum and sums of money then due and to accrue due upon the said joint and several bond of the said Richard Taylor and the bankrupt. It appeared that the bankrupt's father had been in partnership with him, and that the partnership had been dissolved, and that afterwards, in March 1843, the father died intestate, whereupon the property comprised in the deposited title-deeds descended to the bankrupt as his heir at law, subject to Robson's security. The premises were stated to be not worth the amount due; and previously to the application to prove, application had been made to the assignees to concur with Robson in a sale of the property by public auction, and to join in the conveyance to the purchaser. It was represented, but not clearly made out, that, independently of the creditor's equitable mortgage, no beneficial interest in the mortgaged premises would have come to the bankrupt, the father's assets being insufficient for the payment of his debts, even if the mortgage had not existed. The Commissioner thereupon admitted the proof, without requiring the mortgage to be given up, and from this decision the present petition was an appeal. Mr. Swanston, and Mr. Shebbeare, in support of the petition. If this mortgage were removed, the estate would be the bankrupt's,―subject to the father's debts, it is true, if there be any, but still the bankrupt's estate, for the purposes of the question now raised; and no such distinction, as is now to be contended for on the other side, has ever been taken. [The Chief Judge. Has it ever been decided, that the rule holds, where it cannot. 1844. Ex parte TURNEY and others. 1844. Ex parte TURNEY and others. make any difference to the creditors whether the mortgage exists, or not?] Such cases, no doubt, might be found; although, from the point never having been taken, nor having in fact occurred to any one, no cases are reported with reference to it. The only question is, is it the bankrupt's estate?-a question, which here must be answered in the affirmative; for withdraw the charges, and the bankrupt has the property; it has never before been contended, that it must be his, free from incumbrances. They then cited Ex parte Grove (a). The CHIEF JUDGE.-This case may require that the foundation of the rule should be considered. But the onus lies upon the respondent to show, that the estate, which prima facie is the bankrupt's, does not, in truth and substance, belong to him. Mr. Bacon, contrà. Our affidavits go to establish that point. But, even if they be considered as falling short of actual proof of insolvency of the father's estate, still the creditor might prove, without giving up the security; for the only test is this-was the estate, which is the subject of the security, capable of being administered in the bankruptcy, as matters stood at the time of the fiat? In this case it certainly was not; for it would first have had to be administered as the estate of the father, and in payment of his debts, and therefore was not the estate of the bankrupt subject to the creditor's security, as it ought to be, for the purpose of coming within the rule, that a creditor cannot take the whole of a part, and a part of the whole. (a) 1 Atk. 104. Mr. Swanston, in reply, referred to Ex parte M'Turk(a). V. C. KNIGHT BRUCE, C. J.-The case appears to stand thus:-the money was lent to the son; and, for securing the debt, the father became surety, and with his son became jointly and severally liable upon a bond; the father also made an equitable mortgage of part of his estate, to secure the same debt; but the debt, as I have said, was, as between the father and the son, exclusively the debt of the son. The father dies. The real estate descends upon the son, who afterwards becomes bankrupt. Exclusively of the question as to other incumbrances, and the general debts of the father, I apprehend the estate has become the estate of the bankrupt, within the meaning of the rule which excludes simultaneous proof and retention of the mortgage. For the circumstance, that the pledge was not made by the bankrupt himself,—and, that the property, when pledged, was not the property of the bankrupt,-does not, I think, make in principle or substance any difference. But it is said, that here, in truth, the bankrupt never had any interest in the property: that the father was so indebted at his death, that all that descended to the son was simply in effect a trust estate, accompanied with no beneficial interest; and that such a case differs from the ordinary one, even where the bankrupt's own estate is mortgaged for three or four times its value; the existence of the mortgage in this case being immaterial, as regards the bankrupt's estate, and the removal of it being capable of conferring no benefit on his creditors. What would be the result of such a state of circum(a) 3 M. & A. 31; 2 Dea, 58. 1844. Ex parte TURNEY and others. |