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Kerr v. Scovil.

D. S. Kerr, Q. C., shewed cause in Michaelmas Term. In this case the execution was issued on the 5th of February, and a memorial of judgment recorded in the County of York on the same day.

The warrant was not placed in the hands of the sheriff of York until February 10th. The lands of the debtor were bound by the memorial. This is not a conflict between creditors who took steps under the Insolvent Act, but to determine whether a party who has priority of proceedings outside of the Insolvent Act, shall not succeed. The first section of the Absconding Debtor's Act, (1 Rev. Stat. 314), varies from the old Insolvent Law. It enacts that a warrant (B) shall be issued, which is to be executed by seizing the debtor's estate, the warrant on delivery to the sheriff to have the like priority as any execution on a judgment of the Supreme Court. I contend that the warrant has no greater or less effect than an execution out of the Supreme Court, and is therefore liable to be defeated by an execution having priority of it. The whole Act must be read together. If, as is contended, the debtor's lands vest in the trustees from the publication of the notice, there is no meaning in section 1, which provides for their seizure by warrant. If the trustees have chosen to omit sending the warrant to a particular County, the creditor who has used diligence to issue his execution will have the benefit of it. It has always been a rule that the property remains in the debtor until execution executed, and sale. The trustees only stand in the position of an execution creditor. Even if section 14 is to be read strictly, that the estate of the debtor vests in the trustees after notice, that does not relieve it of any proper lien. Suppose an execution issued, and the day before the sale of the lands under it the notice was issued, the lands could only pass to the trustees subject to the execution creditor's lien. The warrant, until executed, has merely the effect of a judgment of the Court, and the vesting of the lands by the notice merely places the trustees in the place of the original debtors. The execution here having clearly priority over the warrant, the rule should be discharged.

Crawford, contra. The case is narrowed down to the single point, whether the land vests in the trustees by the 14th section of the Act on publication of notice, or whether the proceedings under the Act are liable to be defeated by an execution unless the warrant is actually in the hands of the sheriff. If that last contention is correct, a warrant would have to go to every County in the Province to vest the property, whereas the 14th section says it shall all vest on publication of the notice. The notice was published on the 2nd December; the execution did not issue until the following February. I contend that by the publication of the notice, all the property

Kerr v. Scovil.

vested in the trustees. In Ritchie v. Boyd (1 Kerr 264), it was held that the right of action in trover is transferred to the trustees by the notice, and I contend that the change in the phraseology made by the revisors, has not altered the meaning or intention of the old Act, 26 Geo. III., cap. 13, sec. 1. Our title relates back to the time of the notice in the Gazette, and the sheriff therefore has taken nothing in seizing the land, for the debtor's title was gone. The object of the Act was to divest the debtor of his property, so that it might be divided amongst his creditors. Cooper v. Chitty (1 Wm. Blac. 65); Doe dem. Newburn . McGuire (1 Allen 612). These cases show that trustees are vested with the same powers as the original

Owner.

Cur, adr. vult.

RITCHIE, C. J., now delivered the judgment of the Court.*

The statute clearly contemplates an equal distribution of the absconding debtor's estate among all his creditors, without preference or priority. In construing the statute on a point such as that under discussion, this we think should be clearly borne in mind. Section 1 authorizes the issuing of the warrant, which on delivery to the sheriff shall have like priority as any execution on a judgment of the Supreme Court. Section 7 requires the Judge immediately after issuing the warrant to order notice (D) to be given in the Royal Gazette. Sections 8 and 9 provide that "If any person indebted to or having the custody of any property of an absconding, concealed, or absent debtor, shall, after the first public notice as aforesaid, pay any debt or deliver any such property to any person but the trustees, he shall be deemed to have acted fraudulently, and shall be liable to answer the same or the value thereof to the trustees when appointed, for the benefit of the estate; and if any such person be sued by the debtor or by his procurement, he may plead the general issue, and give the special matter in evidence." Section 9, "After such public notice, all sales and conveyances, powers of attorney, and all other acts by such debtor, affecting such estate, shall be void." And section 14, that "The estate of such debtor shall, from the time of such public notice in the Royal Gazette, ordered by the Judge, vest in the trustees when appointed, and they shall take the same into their hands, with all evidences relating thereto, and sue for and recover the same in their own names, and after fourteen days' notice of time and place of sale, shall sell by public auction all such estate, and execute all conveyances necessary to perfect such sales." The priority referred to in section 1, can only in our opinion apply to warrants and executions which may come to the hands of the sheriff before * Ritchie, C. J., Allen, J., and Fisher, J.

Kerr . Scovil.

publication of notice (D) in the Royal Gazette. After that, the acts of the debtor, and all persons claiming subsequently, by, through, or under him, affecting such estate, are void. The property is divested out of the debtor, and such property from the time of such notice so published, vests in the trustees when appointed, and "they shall take the same into their hands, &c., and sue for and recover the same in their own names." How can this section operate, or how can an equal distribution of the property be secured, if an execution placed in the sheriff's hands after notice (D) is so published, can sweep away all the estate, real and personal, of the absconding debtor, and if by force of section 14, the estate "from the time of such notice published" vests in the trustees, what estate is there for the judgment creditor to levy his execution on?

WELDON, J.-I am unable to concur in the opinion expressed by my learned brethren. It is well to consider what the former Acts were before the Revised Statutes. The first Act, 26 Geo. III. cap. 13, required the warrant to issue to the sheriff of the County where such absconding debtor last resided, or usual place of residence, or to the sheriff or sheriffs of any or every City or County within the Province, where there was real estate, and for the sheriff of each County to take the estate, as well real as personal, into his possession, and cause the same to be appraised by two freeholders. The trustees when appointed were to take all such property as may have been seized as aforesaid, and all other estate which they may afterwards discover, and from their appointment shall be vested with all the estate of such absconding or concealed debtor, and their appointment to be registered in the Secretary's office, and with the clerks of the several Courts in the Counties.

The 13th Vict., cap. 54, repealed 26 Geo. III., and substituted the following alteration: after requiring the warrants to be issued to the sheriff's of the several Counties, and appraisement of all estate seized, by two freeholders, the Judge issuing a warrant to report to the Court to which he belonged; if the warrant issued and trustees were appointed by a Judge of the Supreme Court, their appointment to be registered in the Secretary's office and by the clerks of any City or County of the Province; but if appointed by a Judge of the Inferior Court of Common Pleas, then he could direct the appointment to be registered in the Court of which he was a Judge. These Acts made all transfers or sales by the absconding or concealed debtors, after the first public notice, null and void.

The Act cap. 125 of the Revised Statutes, sec. 1, requires the Judge upon the departure or concealinent of any debtor being made to appear to his satisfaction, to issue "his warrant (B) to one or more

Kerr v. Scovil.

sheriffs, and any such sheriff to whom it shall be delivered shall forthwith execute the same, and deliver the property or proceeds of what may be sold to the trustees, and the warrant on delivery to the sheriff shall have the like priority as any execution on a judgment in the Supreme Court." The 7th section is, "The Judge who issues the warrant shall immediately thereafter order notice (D) to be given in the Royal Gazette." The 9th section makes all sales by debtor void. The 11th section directs the appointment of trustees when made to be registered in the several Counties where lands or goods may be seized. The 14th section, "The estate of such debtor shall from the time of such public notice in the Royal Gazette, ordered by the Judge, vest in the trustees when appointed, and they shall take the same into their hands with all evidence relating thereto, and sue for and recover the same," &c.

The previous Acts relating to absconding debtors and the issuing of warrants, required the warrants to be issued to such Counties where the debtor had property, whether real or personal, to seize the same and cause it to be appraised by two freeholders The Revised Statute omits this in the sections, but gives a statutory form in which the warrant shall be issued which directs the sheriff, with the aid of two competent men, forthwith to make an inventory of the estate and effects he shall so seize in his bailiwick. The form explains the section, and makes the Act consistent with the previous ones; and the form must be read as part of the Act, and must be adhered to and carried out (Bailey. Sweeting, 12 M. &. W. 617). The first section of cap. 125, sec. 1, states the same priority shall be given to the warrant on delivery to the sheriff, as any execution on a judgment in the Supreme Court. This must have reference to an execution against the debtor, placed in the sheriff's hands immediately before any warrant of a Judge issued against the same party, as an absconding debtor. If such is the true meaning of the section, and the words and language thereof will admit of no other, then the first writ in the hands of the sheriff of any County, issued upon a judgment of the Supreme Court, must have priority to and he executed before the warrant issued by a Judge and placed in the sheriff's hands. The previous Acts, as well as the Revised Statutes, make all acts of the absconding debtor void as to transfer, after notice in the Gazette, and vests in the trustees all the estate of the debtor after such notice. But this cannot affect the proceeding at law, whereby the property is transferred by act and operation of law. If such were the result, the 1st section would be inconsistent with the 14th section; thus, if notice was published in the Gazette of the 5th November, fi. fu. placed in sheriff's hands the 6th November, warrant a few hours after, what effect then has the priority

Kerr v. Scovil.

clause in the first section? Clearly none. The statute is by no means clear, but to render it consistent, it must mean, that the trustees take all the estate of the absconding debtor not divested out of him by act and operation of law, since the first publication in the Royal Gazette. In my opinion, nothing more passes than would pass by the fullest assignment the absconding debtor could have made to them, they taking the necessary steps to secure the rights so assigned. The judgment creditor stands in a very different position from a purchaser from the absconding debtor, and the principles which have governed one class do not apply to the other.

In re Atkinson's Trusts, 16 Jurist 1003, Lord Chancellor (St. Leonards) says, "I consider it to be a settled question, that the assignee under the Insolvent Act, took only precisely what the insolvent himself had, and clearly subject to all the equities to which the insolvent himself was liable. That proves the nature of the estate. They do not take all independent property as if they were the original person to whom it belonged, but they take it as the representatives of the insolvent and stand in his shoes; they take what he had to give, and are liable to all the incumbrances and equities by which he himself was bound. Now it is said at the bar, that the effect of the Act of Parliament is to vest the property so wholly in the assignees, that the insolvent cannot by any act afterwards divest it. There are no words giving that effect to the assignment, but the Act directs the insolvent to give an assignment; and the assignment when executed will of course have as high but it cannot have a higher operation (unless more operation is given to it by the Act of Parliament, which the Act of Parliament does not confer) than an assignment for value executed by an insolvent before his insolvency, could have had; for the assignees shall have all he is entitled to, and you shall take it for that in law subject to all his liabilities.

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Now if I be clearly of opinion that the assignees of insolvency have no further right than if they were purchasers for value, then the question rises whether they have done all he was required to do.'

Now in the case before the Court, have the trustees by the acts of the petitioning creditor taken all the steps they were bound to do; to issue a warrant to the sheriff of York to take this estate of the absconding debtor and cause it to be appraised according to the exigency of the warrant before any execution issued upon a judg ment against such absconding debtor. That is a question of right between the assignee and the judgment creditor, and if I were to decide in favor of this application, the hardship would be on the judgment creditor who has been more diligent in enquiring as to the property which belongs to his debtor the defendant, than the attorneys of the creditors of the absent or concealed debtor; Lord Jus

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