Page images
PDF
[graphic]

LAW REVERSIONARY INTEREST '~'<>L-XI-H-- N<>- 1+-
The Solicitors’ Journal and Reporter.
LONDON, FEBRUARY 5, I898.

SOCIETY, LIMITED

[ocr errors]

Capital £400,009 Debentures and Debenture Stock £180,000 REVERSIONS BOUGHT. LOANS MADE THEREON.

[ocr errors]
[graphic]
[ocr errors][merged small][ocr errors][ocr errors][merged small][graphic][graphic][merged small][merged small][merged small][merged small][ocr errors][graphic][merged small][graphic][graphic][graphic][ocr errors][ocr errors][graphic][merged small][ocr errors][ocr errors][ocr errors]
[graphic]

"J The Editor cannot undertake to return rejected contributions, and copies should be kept or all articles sent by writers who are not on the regular stafi of the JOURNAL.

[graphic][graphic][graphic][ocr errors]
[graphic]
[ocr errors]
[graphic]
[graphic]
[graphic]

is BA!lBUP'l‘CY I40

Rrviuws ....... .. Coroners’ No-riols.. 241

Coaarsroiruriro BAIXBUPTOY NorioIs...... ............... .. 241 Cases Reported this Week.

In the Solicitors’ Journal. In the Weakly Reporter. Hockey v. Westem ......................... .. 232 Bateman (Lady) v. Faber ................ .. 215 ‘g€n“'n¢” ‘kknnings 234 Clifford v. Thames Ironworks Co ....... .. ‘H2 M3iiE?oixiery?:lIIIiiie.s,' 233 Estate Duty payable on the Death of Nth B&_t?(lJ1. .... 232 the Second Earl Cowley, In re .... .. 223

ow XI is on . mi. e.

parte Beckwith ............. ...§ ..... an G°“'" "'C°“1d"d“” """" "2’ """ "" " 2Reg_ v_ Taylor and Qt}, J t Grange (Appellant) v. Silcock (Re

ExparteVogwill . ...... .. . 235 spondent) 227, Rogers v Manchester Packin 234

South Hetton Coal Co. (I.Im§v.1is's'l well, Shelton, and Easington Coal and Coke Co. .............................. .. I33

Hughes, In re. Brandon v. Hughes... 220 Mayor, &c., of the Borough of West Hartlepool v. Robinson 218

[graphic]
[graphic][merged small][merged small][graphic][merged small][graphic]

Tm: PRESIDENT of the Incorporated Law Society has been confined to his house for about a week by a severe attack of influenza, and, much to the regret of everyone, was unable to preside at the recent meeting of the society. We are glad to

earn that he is now convalescent.

ii

Ws ossnnvs that our esteemed correspondent “ H.” still entertains the idea. that the result of compulsory registration oi title will be to increase the remuneration of solicitors, at all events for the first ten or twenty years. That will, no doubt, be so if the existing scale of remuneration is retained. But we believe it may be taken as certain that, sooner or later, after compulsory registration has been applied to a. district, the scale of remuneration of solicitors in that district for non-registry conveyancing business will be reduced.

[graphic]

A CORRESPONDENT calls attention to the delay in the issue of the general rules under the Land Transfer Act, 1897. We are able to assure him that the committee who are engaged in framing these rules have been sitting with the greatest assiduity, but we can imagine that the difliculty of endeavouring to turn the Land Transfer Act, 187 5, into a workable measure by means of rules is very great. If, however, it can be done at all, we believe that the learned judge who has devoted so much time and attention to the work, and the other skilled members of the committee, are likely to accomplish this result.

THE EXPERIMENT which has been made for expediting the trial of actions set down in the special list under order 14 has so far

[graphic]

been a distinct success. The judge in chambers has been enabled to complete his chamber list in time to devote the afternoons to disposing of these cases in court. We are, however, by no means sure that the plan will always work as well as it is doing now. Mr. Justice PHILLIKORE, we are informed, has shewn a combination of qualities in dealing with chamber business which is remarkable, especially in a new judge. Though always courteous and patient, he is extremely quick in deciding, and is so thoroughly conversant with practice that he clears his lists easily and rapidly. It is obvious that he is quick, otherwise he could not sit in court two or three days a week at two o’clock. It does not follow, however, that all the judges in turn will be able to carry on these afternoon sittings in court. It may be safely predicted that some of them will be quite unable to continue the arrangement. We shall therefore have one system for one term and another for the next, which, to say the least of it, is not symmetrical.

[ocr errors]

\VAs THERE ever known with regard to any legislation such a comedy of errors (tragedy of errors some people might say) as has occurred with regard to the recent Land Transfer Act? As a valued correspondent points out, if the various public bodies and persons who have recently so strenuously opposed the application of the Act to London had lent any assistance to the long contest waged by solicitors against the Bill, we should never have had a compulsory Act. But this is really one of the least remarkable parts of the comedy which has been enacted. The opening scene, when the trusted and skilful leader of the opposition to the Bill not only withdrew his opposition but actually took part in the framing of a compulsion Bill, was a remarkable transformation—not, it must be admitted, so much on the part of Mr. IJAKE, who had never concealed his approval of the principle of registration of title, as of the solicitors who weakly followed his lead. But this again has been surpassed by the action of the Council of the Incorporated Law Society. After assenting to the Bill—and if our recollection of a deputation to the Lord Chancellor is correct, going a great deal further than assenting to it—and refusing to move a finger to help the Yorkshire law societies in their successful attempt to improve the measure by limiting its operation, the Council have at last thrown aside the time-serving policy which so greatly discredited them last year, and have boldly declared against the Act; for, whatever maybe said, this is the real meaning of their communication to the London County Council, and if the mayority had been allowed to express their views this would have been stated. Now comes the final, and not the least curious, of these bewildering transactions. No sooner have the Council come to their right minds about the Act, and given vent (to some extent) to their dislike to it, and attempted to prevent its application, than the Yorkshire societies proceed to sternly censure the council for not keeping silence about the Act, and for hindering it from coming into operation !

01- COURSE the above, though literally accurate, is not in substance a correct representation of the attitude of the Yorkshire societies. Their contention was stated with much clearness and moderation by Mr. MIDDLETON at the recent meeting of the Incorporated Law Society. They say that the reply of the Coun_cil was made in the interest of London solicitors alone ; it was intended to prevent London from being the corpus rile for the experiment, and as one of the Ridings of Yorkshire would notoriously be selected if the application of the Act to London was negatived, the reply was tantamount to sacrificing Yorkshire to London. \Ve do not think that anyone can accuse us of want of sympathy with the Yorkshire solicitors; but we must confess that we do not find anything in the debate at the recent meeting t_o alter the opinion we expressed at the time the reply was sent in by the Council. It must be remembered that while in most country districts there are separate law societies to look after the interests of the local solicitors, London, with its enormous body of solicitors, has no representative body but the Incorporated Law Society. Hence, when a question with regard to a matter most seriously affecting the interests of London solicitors was put to the Council by the London County Council, we do not

[graphic]

see how the Council, as representing these solicitors, could refuse to reply. And the question being should the Land Transfer Act be applied to London, the views of London solicitors should determine the nature of the reply; just as if the question submitted to the Council had been whether the Act should be applied to Yorkshire, the views of the Yorkshire law societies ought to regulate the reply. The question is a local one, and is to be decided by local professional opinion. And we think that if the application of the Act to London were negatived, it would make it all the easier to get its application to Yorkshire finally and definitely negatived at once, while, if the experiment is tried in London, Yorkshire will have the prospect of a vigorous attempt being made three years hence to extend the operation of the Act to their district.

Tm"-2 decision of STIRLING, J., in Jennings v. Jmnings (reported elsewhere) is an interesting application of the principle aid down by the House of Lords in Trrgo v. Hunt (44 W. R. 225; 1896, A. C. 7). It is an established rule that a man upon selling the goodwill of his business does not by the mere sale debar himself from starting in the same line of business again, and he may set up his new business, if he chooses, next door to the business which he has just given up (see per Woon, V.C., in Cliurtan v. Douglas, Johns. p. 187). To prevent this it is necessary for the purchaser to protect himself by express covenants. However reprehensible such conduct may e, it is practically impossible for the courts to interfere, for it would be necessary to supply the omission of the parties and to specify a definite limit within which the starting of a rival business shall not be permitted. It has never been supposed that either equity or morals require the vendor to refrain altogether from starting in business again. But though the vendor is, in the absence of a restrictive covenant, at liberty to begin a new business and appeal for custom to the public, it is a very different matter when he takes to soliciting the customers of the old firm. In Laboucllera v. Dawson (L. R. 13 Eq. 322) Lord ROMILLY was clear that such conduct was an unlawful infringement of the goodwill which had been sold, and though the law as laid down by him was overruled by the Court of Appeal (Pearson v. Pearson, 32 W. R. 1006, 27 Ch. D. 145), it was restored by the House of Lords in Ii-e_r/o v. Hunt. The prohibition upon soliciting customers, however, springs only from the relation of vendor and purchaser, and does not bind a person who is not immediately interested in the former capacity. Hence where a trustee in bankruptcy sells the goodwill of the bankrupt’s business, the bankrupt is thereby placed under no restrictions (Walker v. Jlottram, 19 Ch. D. 355). In the recent case of Jennings v. Jennings there was no sale in the ordinary manner, but an action brought by one partner, A., against the other partner, B., was settled upon the terms (inter alia) that judgment should be entered for A. for £1,200, and that the partnership should be dissolved and the assets retained by B. Subsequently A. claimed to be entitled to solicit the customers of the business, but STIRLING, J., held that, inasmuch as the order was made by consent, it was equivalent to a sale, and since “assets ” was wide enough to include goodwill, the rule in Trego v. Ifimt applied.

Tun DECISION of Wmurrr, J., in Re Nisw British Iron Co. (Limited) (reported elsewhere), following that of KAY, J., in Rs Dale Plant (Li'nu'te(I) (43 Ch. D. 255), establishes that directors are entitled to prove in the winding-u of a company for arrears of fees due to them. A provision which has sometimes been thought to militate against this result is contained in section 38 (7) of the Companies Act, 1862. According to this no sum due to any member of a company in his character of member is to be deemed to b6 a debt of the company payable to such member in a case of competition between himself and any other creditor not being B member of the company. Obviously this only prevents the directors from proving for sums due to them in their character of members of the company, though it is a possible argument that where the director is bound to be a member he really talwfl his fees on the ground of membership and so in his character as member. According to the head-note to E2: parts Cannon (30

[graphic]

Oh. D. 629), it was there held that in a company with such a regulation a director's fees were excluded from competition with outside creditors, and though some stress is laid in the judgment of PEARSON, J., on the special form of the article under which the directors took their remuneration, yet he seems in the main to have relied on the fact that the directors, when acting in that capacity, were no more than working members of the company. From first to last, he said, while they are sitting as directors they are doing their work in the capacity of members, and working members, of the company. In Dalv §~ Plant (limifrrl), however, KAY, J ., declined to follow the above case where arrears of salary due to a managing director were in question, and Wuieur, J., has now declined to follow it in the case of ordinary directors. KAY, J., supported his judgment by the consideration that the managing director had been appointed on account of his special knowledge of the company’s business. But in fact the question depends solely on the character in which the fees are earned. Does the director earn them as member or no ? Obviously it would seem that he does not, or the company’s profits would have to be distributed in fees instead of in dividends. He takes them in a narrower capacity than that of member, and since the statute has not excluded him he is entitled to prove in the winding-up.

Tun rornma but erroneous maxim, “ finding, keeping,” very frequently brings persons into trouble. Those who find and keep often learn, to their surprise, that the law regards them as thieves. There is, of course, some truth in the old saying, for if a. chattel is entirely abandoned by the owner, it is quite certain that the finder has a right to keep it. Also where the owner is unknown and cannot be found, it is clear that the finder has a good right to the thing as against the rest of the world. \Vhen, however, a thing is found under circumstances which shew that it was not abandoned by the owner, but, on the contrary, that it was lost by mischance, the rights, duties,. and liabilities of the finder become often rather complicated. It is well established that if the finder knows at the time of finding who the owner of the thing is, but nevertheless dishonestly determines to keep the thing, he is guilty of larceny, as also he is if there are marks on the thing, or other circumstances connected with the finding, which point out the owner. It does not appear from reported decisions that the finder is bound, in the absence of knowledge or indications of the ownership, to take active steps to discover the owner. In a case, however, tried recently before Mr. CURTIS BaNNm'r at the Marylebone police-court, that magistrate laid down the law in words which seem to go beyond any ruling of the High Court. He is reported to have said that any person finding anything must use reasonable diligence to discover the owner before he could regard it as his own property, and that to fail to try and find the owner and to appropriate the property to his own use was to commit larceny. This is proba ly excellent morality, but it does not appear to be good law, nor in accordance with any of the numerous decisions of the High Court on the subject. In R. v. Thu-rborn (1 Den. C. C. 387), the case that is usually spoken of as the leading case on the subject, the judges said that if a finder take the thing, meaning at the time to keep it, and reasonably believing that the owner can be found, it is larceny ; and that whether the finder has such belief may be shewn “by evidence of his previous acquaintance with the ownership of the particular chattel, the place where it is found, or the marks upon it. In some cases it would be apparent; in others, appear only after examination. It would probably be presumed that the taker would examine the thing, as an honest man ouglht to do, at the time of taking it.” The facts of the case were at the prisoner had picked up a bank-note on the high road. There was no mark on the note, and no other circumstances to shew to whom it belonged. Shortly afterwards, however, he discovered the owner, but nevertheless he appropriated the note to his own use, as he meant to do when he picked it up. It was held that, as the first taking was not felonious, there being nothing then to shew that the owner could be found, the subsequent conversion did not amount to larceny. This case has often been followed since, though sometimes with reluctance, and has always been considered binding on the High Court. In the case of R. v.

J

Christopher (Bell C. C. 27) it was said that, in order to establish a charge of larceny, it is not sufficient that the finder may think that by taking pains the owner may be found; there must be immediate means of finding him. Again, in R. v. Dixon (1 Dear. C. C. 580) Jaltvrs, C..T., said: “The finding of the jury is that the notes were lost, that the prisoner did not know the owner, but that it was probable that he could have traced him. He was not bound to do that.” The authorities, therefore, seem to stop a long way short of Mr. Coaris Bnmvs'1'r's ruling, that the finder of a thing is bound to take active steps to discover the owner in order to avoid risk of a conviction for larceny. Such a decision is obviously inconsistent with the leading case.

Tim QUESTION how far a medical man is bound to regard as strictly confidential information he may obtain in the practice of his profession, came very prominently before the public not long ago in connection with the Kitson v. Plrtyfafr libel case. Some attention has again been called to the subject by the proceedings at a recent inquest. The deceased was taken into Guy’s Hospital suffering from a severe stab, and there died of the wound. On the day he died a woman surrendered to the police, and admitted that she had stabbed the deceased. This was the first the police heard of the occurrence, and inquiries were immediately made at the hospital, but the man had just died. As the fatal wound was one which could not in all probability have been self-inflicted, the coroner and the jury expressed opinions that the hospital authorities should have communicated at once with the police. This view was strongly opposed by Dr. PERRY, the medical superintendent of the hospital. He stated that it was the custom at the hospital not to give information to the police unless the injured person was desirous of so doing. He gave as a reason for this that cases of attempted suicide are very common; that this is a crime; and that if it were known that if a person suffering from a self-inflicted injury were taken to the hospital information might be given to the police, such person would certainly not be brought to the hospital, and might die for want of proper treatment. He therefore thought a hospital ought to be known as a place where no questions were asked. The Lancet concurs heartily in this opinion as to what should be the proper attitude of hospital authorities in such cases, and approves of the conduct of the surgeons who attended the case. The journal says: “We consider that Dr. PERRY and the house surgeon acted in the only way in which they could have done either from the point of professional rectitude or that of expediency. It would be a sorry day for hospitals if it came to be known that they were, in addition to their health-giving functions, the portals to a criminal dock; and although the prevention, detection, and punishment of crime are matters which every good subject ought to have at heart, such are not the objects for which hospitals were founded, nor are their officers to be regarded as agents of the law.” We certainly agree with our contemporary, and we think that it would be most injurious, both to the medical profession and to the hospitals, if doctors were to voluntarily give information to the police of matters coming to their knowledge entirely in their professional capacity.

IN THE recent case of B;-um: v. James (ante, p. 214), which was an appeal from a county court in an action of trespass for £2 damages and an injunction, a preliminary objection to the hearing of the appeal was taken by the plaintiff- —namely, that as the claim did not exceed £20, leave to appeal should have been first obtained from the county court judge. It was, however, held by the Divisional Court that, as the defendant was only appealing against an injunction, and not against the damages, he might proceed with his appeal without leave. This decision is, it is submitted, very difficult to support on the ground alleged, having regard to what was decided in Martin v. Bannister (28 W. R. 148, 4 Q. B. 49l)—namely, that where a plaintifi complains of actual damage, the injunction does not itself constitute a distinct cause of action, but is a mere remedy for the tort committed which remains the sole cause of action. In other words, the mere claim for an injunction besides damages in no way alters the character of the action, which remains an action of

[graphic]
[graphic]

tort, and, as such, is, therefore, we submit, wholly governed, so far as the right of appeal is concerned, by section _1‘20 of the County Courts Act, 1885 (51 & 52 Vict. c. 43), which on this subject provides as follows—namely, “that there shall be no appeal in any action of contract or tort, other than an action of qjactmmt or an action in which the title to any corporeal or inoorporaal hererlitamant shall have come in question, where the debt or damage claimed does not exceed twenty pounds . . . unless the judge shall think it reasonable and proper that such appeal should be allowed, and shall grant leave to appeal.”

ORDER 14 AND THE SUMMONS FOR DIRECTIONS.

IN a previous article on the subject of the new order 30 _(ante, p. 194) we mentioned incidentally a point which_ has occasioned, and is occasioning, much perplexity among practitioners. When leave to defend is given under order 14, what is the plaintifi’s position as to the requirement imposed upon him by ord. 30, r. 1 ? We were unable on that occasion to discuss this point fully, and it is one which is so open to argument, which casts the shadow of uncertainty over such a large number of cases, and which is apparently so far removed from any prospect of authoritative determination, that we propose now to consider it somewhat fully.

As a preliminary observation, we may point out one peculiarity of procedure under the new order 30. The question whether in particular circumstances a summons for directions ought or ought not to be issued is one which it seems hardly possible can be broirght before the court on appeal. If a summons for directions is issued and an order made thereon, the only possible appeal is against the directions given. If a summons for directions is not issued, the defendant may apply to dismiss (ord. 30, r. 8), and upon that application the action may be dismissed or directions may be given. In any doubtful case the master would probably adopt the latter alternative, in which case appeal would only lie against the directions. It is only in the improbable contingency of an order to dismiss being made under that rule when the plaintiff had been right in not issuing the summons for directions, that the direct point whether or not such summons ought to have been issued could be raised before the Court of Appeal. It is therefore important to clear up, as far as possible, this question as to whether a summons for directions is necessary where leave to defend has been given under order 14.

Ord. 30, r. 1 (b), pro- i '»== is follows: “Such summons (for directions) shall be taken out {by the plaintiff) after appearance and before the plaintiff takes any fresh step, other than application for an injunction, or for a receiver, or for summary judgment under order 14, or to enter judgment in default of defence under ord. 27, r. 2.”

_A plaintiff, therefore, may issue a summons under order 14 without taking out a summons for directions. We will assume that he does so, and that he fails under order 14, and that the defendantobtains leave to defend unconditionally and without any directions being given under ord. 14, r. 8. The question we are endeavouring to answer then arises.

The first point is an easy one. The defendant having obtained leave to defend, is bound to deliver his defence within eight days from the date of the order (ord. 21, r. 8), and if he fa_ils_to do so and the plaintiff’s claim is for a liquidated sum within ord. 27, r. 2, judgment may, under ord. 30, r. 1 (6) (supra), be entered against him without order. It appears, therefore, that in such a case the plaintiff should wait the expiration of the time for defence, and if none is delivered enter judgment in default.

The second point is not so simple. Let us suppose that the defendant does deliver his defence. How is the plaintiff to proceed? By_ ord. 30, r. 1 (b),_ he is bound “in every action” to take out his summons for directions after appearance and before he “takes any fresh st_ep in the action other than application . _ . . for summary judgment under order 14.” He has made his application under order 14 and has failed; must he now revert to. procedure under order 30, or can he proceed with the action without doing so, and deliver a reply, and go to trial ?

We do not pretend to be able to give an authoritative answer to this somew at open question, but it appears to us that the

[ocr errors]

intention of the rule (ord. 30, r. 1) is that after leave to defend has been given under order 14, and defence delivered, the plaintiff may proceed with his action without regard to order 30. There is solid ground for supposing that when the Rule Gommittee inserted in ord. 30, r. 1, the exception as to “ application for summary judgment under order 14 ” they intended to entirely relieve a plaintiff so proceeding from the necessity of issuing a summons for directions at any stage of the action. We base this supposition on the terms of ord. 14, r. 8 (a), which are as follows: “Where leave, whether conditional or unconditional, is given to defend, the judge shall have power to give all such directions as to the further conduct of the action as might be given on a summons for directions under order 30, and may order the action to be forthwith set down for trial.”

When the master, as constantly happens, gives leave to defend without ordering summary trial or giving directions, it must be assumed that he does not think it a case for summary trial, and that neither of the parties asks for directions, and the master has not sufficient information to give directions without being asked. But in considering whether it was intended that such a case should again fall under order 30 we must bear well in mind that this power to give directions, under Order 14 and Order 30 combined, was actually in the master’s hands when he gave leave to defend; and further, that defence having been ordered, the case does not actually pass out of the operation of order 14 until_the time for defence has expired; and, moreover, that the order for defence is an important direction which impliedly carries with it the right of the plaintiff to deliver a reply. It appears, therefore, that a plaintiff suing by specially indorsed writ for e. liquidated demand is not bound, where leave to defend is given under order 14, and defence delivered, to issue a summons for directions.

\Ve have dealt only with a specially-indorsed writ for ii liquidated demand. We will now consider shortly the same point when leave to defend is given under order 14 in an action for recovery of land. In this case, if no defence is delivered, the plaintiff cannot enter judgment in default. Ord. 30, r. 1 (b), only allows judgment to go in default of defence when the “plaintiffs claim is only for a debt or liquidated demand" within ord. 27, r. 2. When the time for defence under order 14, therefore, has expired, and no defence is delivered, whatis the plaintiffs course? Is he to apply for directions under order 30, or can he proceed at once to serve notice of motion for judgment in default of defence? The argument here for considering the action to have been taken completely out of the scope of order 30 by the pl‘0O66(llDgB’ under order 14 is not so strong. There is no defence delivered, and no right to judgment in default. But, on the whole, it appears reasonable to suppose that the plaintifi may proceed irrespective oi order 30. If we were right in assuming in the one case that in making an exception of proceedings under order 14 the Rule Committee intended that exception to apply to the whole subsequent course of the action, we are driven to the same assumpt n in the other. There is the same power in both cases t0 give directions in giving leave to defend. The only difference is that in the case of a liquidated claim judgment in default follows as of course, and in the other case must be obtained 011 motion for judgment.

It appears to us, therefore, that when once an action passes under order 14, the plaintiff is in every case released from the necessity of issuing at any stage a summons for directions under order 30. At the same time we candidly admit that the pomt is arguable, and that had it not been one which seems somewhat removed from the probability of a judicial decision_m court, we should have felt reluctant to express any opinwfl about it. \Ve have discussed it at some length because it istlw cause, as we have said, of some perplexity among practitioner!’ which ought if possible to be removed.

DISCLAIMER OF LEASEHOLD PROPERTY IN BANKRUPTCY. ll.

5. Leave to rlisvluini (c0nh'nue(l).——It has already been stated that, in giving to the trustee in bankruptcy leave to disclfllm leasehold property burdened with onerous covenants, the court

[graphic]
[graphic]

may impose terms as a condition of granting the leave, and may also make orders as to fixtures, tenant’s improvements, and other matters arising out of the tenancy; and it has been mentioned that, where the trustee has occupied the property with a view to the benefit of the bankrupt’s estate, he will not be allowed to disclaim except on the terms of paying rent for the period of his occupation. Unconditional leave has been refused also where the trustee has acted for parties with opposing interests, and it is diflicult to say what the real effect o his occupation has been (Re Crowtlier, 4 Morr. 100). And where the relationship between the parties is really that of mortgagor and mortgagee, and the former is merely tenant under an attornment clause in the mortgage deed, this will be taken into account in considering whether terms ought to be imposed for the benefit of the mort ages (Ex parts Isherwood, 22 Oh. D. 384). It was held under the Act of 1869 that the leave of the court was simply a matter as between the trustee and the court, and that the failure to obtain leave did not invalidate the disclaimer as between the trustee and the landlord (Read v. Harvey, 5 Q. B. D. 184; see Ex parts Ladbnry, 17 Oh. D. 532). But the requirement_ of leave, which formerly only depended upon a bankruptcy rule, has now been introduced into the statute ; and since the trustee is, except as expressly provided, not entitled to disclaim without leave, and by rule 320 of the present Bankruptcy Rules a disclaimer of the lease without the leave of the court is void, it would seem that at the present time it has no efiect even between the trustee and the landlord.

It appears that the court, in considering whether leave to disclaim should be granted, will have regard only to the question whether the disclaimer will be for the benefit of the persons interested in the administration of the bankrupt’s estate, and not to collateral considerations such as the possible injury which the disclaimer may inflict upon third parties (Ex parts Eaot and West India Dock Co., 17 Oh. D. 759), though previously to this decision it had been held that the trustee ought not to disclaim to the prejudice of an equitable mortgagee of the lease by deposit (Ea: parte Bu-.z*ton, 15 Oh. D. 289). But the contradiction seems to be only nominal, for if the mortgagee wishes to prevent disclaimer he can take an assignment of the lease, and covenant to indemnify the trustee (Ev pa/rte Baa.-ton). The granting of leave to disclaim is a matter within the discretion of the court, and therefore not strictly a pealable ; and on this ground leave to appeal to the House of Iiords has been refused (Ev parlc East and West India Dock Co., supra). This consideration, however, does not absolutely bar an appeal, though if an appeal is brought it must be done before the disclaimer has been executed. After such execution the lessor’s title is complete, and an appeal will not be entertained (Re Woods, 3 Ch. D. 459), even for the purpose of getting conditions imposed (Ex parts Sadler, 19 Oh. D. 122). The proper course is for the party intending to appeal to apply for a stay oi proceedings pending the appeal.

Formerly it was_held that the period within which the trustee could disclaim might be extended by the court under the general power of section 104 (4), but only upon good groimds, and the trustee was put upon such terms as to payment of rent and of interest on mortgages as would prevent other parties bemg prejudiced (Re Price, 13 Q. B. D. 466). In Ezparte Paterson (l_1(]h.D. 908), where the trustee had in no way interfered with the property, and the bankrupt had remained in posBOBBIOIJ, the trustee was allowed to disclaim after three years, all parties being before the court. The Act of 1890, in extending the period of three months to twelve months, at the same time

[ocr errors]

extended, and in Re Baker (8 Morr. 116) leave was given after the lapse of six years, there being no evidence that the landlord had sustained any damage by the failure to disclaim before. A trustee applying for leave to disclaim may include several distmct properties in the same application, so long as there is one landlord or other chief respondent who is aflected by the whole Bpphcation, although there are other respondents who are affected only by part of it (Re Wliitakcr, 21 Q. B. D. 261). The court, before granting leave to disclaim, may require such notices to be given to persons interested as it shall think just (section 55 (3) ). A notice of motion for leave to disclaim may be flayed out oi thljurisdiction on persons whose interests are

[graphic]

affected (Re Rathbone, 56 L. J. Q. B. 504). The costs of the application by the trustee are the costs of a proceeding under the Act (Bankruptcy Rules, r. 339), and, as a general rule, are payable out of the estate (Re Proctor, 8 Morr. 251).

6. Application to the trustee to decide as to dz'aclaimcr.—The trustee’s right to disclaim under section 55 will be lost if any person interested in the property applies to him to decide as to disclaiming, and if the trustee omits to give notice of his decision for twenty-eight days after receipt of the application, or such extended period as may be allowed by the court. The notice may be given by the landlord as a person interested in the property (Ex parts illackay, 14 Q. B. D. 401). It is not enough that the application has been posted; it must be actually received by the trustee, though ordinarily posting is presumptive evidence of receipt (Read v. Harvey, 5 Q.. B. D. 184). To obtain an extension of the period of twenty-eight days the trustee should apply to the court before that time hasj expired (Re Richardson, 16 Ch. D. 613), unless there are special circumstances to excuse the delay (Ea: parts Loveri'n_q, 9 Ch. 586), or unless the person giving notice has, by entering into negotiations, waived his right to a reply within the statutory time (Ea: par-to .£l[00I'(’, 2 Cb. D. 802). The mere fact that the landlord has compelled payment of half a year’s rent in advance is not a ground for enlarging the period of twenty-eight days (Re Richardson, supra).

7. Vesling Orders.-—As already observed, the effect of disclaimer is to leave a gap between the lessor and the persons who through the bankrupt have become interested in the lease. As regards the bankrupt and his trustee, the lease is at an end, but save for this pur ose the rights and liabilities of other persons are not afiected, (section 55 (2) ). In order to avoid the inconvenience of this state of things sub-section (6) provides that an order may be made vesting in some define person the lease which by the disclaimer has been set at large. The application for such an order may be made (a) by any person c aiming an interest “ in the disclaimed property," or (6) by any person under any liability in respect of it which is not discharged by the Act. The property may be vested in (i.) any person entitled thereto, or (ii.) to whom it may seem just that the same should be delivered by way of compensation for such liability; and the vesting order is made upon such terms as the court thinks just, subject, however, to the specific directions as to terms contained in the proviso to the sub-section.

Of the two classes of persons who may apply for a vesting order to be made, no difliculty has arisen with regard to the second. Persons may be under liability in respect of the (lisclaimed pro erty, because they have, as sureties or otherwise, become liabl)e for rent or upon the covenants in the lease, and their right to apply for a vesting order is clear. But with respect to persons claiming an interest in the disclaimed property, great doubt at one time existed whether this class included the lessor. In Er parts Turquand (83 W. R. 752, 14 Q. B. D. 405) CAVE, J., took what seems primd facie to be the technically correct view that the “ disclaimed property” is the term of years, and since in this the lessor has no interest he cannot apply for a vesting order. But in Ea: parte Shileon (36 W. R. 187, 20 Q. B. D. 348) the same judge, concurring with A. L. SMITH, J., gave, on further consideration, a contrary opinion, and his more mature judgment was confirmed by the Court of Appeal in Re Finley (37 W. R. 6, 21 Q. B. D. 475). “ It is obvious,” said Lmnnnv, L.J., “ that a lessor is very much interested in the observance by the lessee oi the covenants and conditions contained in the lease, and that he has a very substantial ‘interest in the disclaimed property,’ in whatever sense you take the expression.” Possibly this passage does not indicate a very strict adherence to the pi-oper_meaning of the phrase, but at any rate the rule in Re Finley is now perfectly settled, and the lessor may apply to have a vesting order made. He may give notice of application as soon as he is served with notice of the trustee’s motion to disclaim, _and as a_ general rule he ou ht to have his order if he brings himself within the section (Iii: Britten, 61 L. T. 52). It is for the judge who hears the case to decide whether an aflidavit or other evidence is necessary (ibz'd.).

The terms upon which the vesting order is to be made are to 1 a considerable extent specified by the proviso to sub-section (6).

[graphic]
« PreviousContinue »