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his warrant to the Clerk of the Crown to make out a new writ for
electing a member in the room of any member of the House who
shall happen to die during the recess, as soon as he shall receive
notice, by a certificate under the hands of two members of the
House of Commons, of the death of such member." "The certifi-
cate," it is added, “ may be in the form or to the effect comprised
in the schedule" annexed to the Act. This certificate purports to
certify that the deceased member died on the day of
It seems, upon the construction of this Act, that although the form
need not be strictly adhered to, and the exact day of death need
not be certified, yet something approaching to a legal certainty of
the fact of death before the date of the certificate would have to
be arrived at, and that the Speaker has no discretion to go behind
the certificate. The writ, therefore, can hardly be expected to
issue until Parliament is in session, when, not the evidence required
by the Act, but reasonable certainty, would be sufficient.

prima facie is that he does, and it may be that it is very difficult
in most cases to prove the contrary; but this is not the same
thing as deciding as matter of law that where the landlord lives in
the house the sub-tenant must necessarily be a lodger and can
| never be a householder. It does seem to us to involve a certain
absurdity to say that, if a person rents rooms in a house of which
his occupation is precisely the same in either case, his qualifica-
tion depends on the mere question whether the rest of the house
is retained by the landlord, or let off to another person. Assume
that in the one case the landlord never in any way does anything
of any sort other than the co-tenant of the other part of the
house does in the other case, why should the occupation be that
of a mere ledger in the one case and of a householder in the
other? We shall look with interest for the appearance of the
legal reports of these cases to see how far a solution of this
question is given.

IT WILL BE SEEN from a case of Copp v. Lynch and the Law Life Assurance Company, which is reported in another column, that the question whether, where the relationship of solicitor and client exists, the solicitor can legally take a commission from an insurance office on a policy effected in the course of the business in which he is employed, is likely shortly to come before the High Court.

THE COURT OF APPEAL has reversed the decision of DENMAN and BOWEN, JJ., in two of the recently decided cases with regard to the much-vexed question when the occupier of a room in a dwelling-house can, for the purposes of the parliamentary franchise, be considered to be the occupier of a dwelling-house. It is extremely difficult to say what the effect of the decision of the Court of Appeal is until it is exactly reported in the regular law reports. We observe that very off-hand opinions are expressed in the reports and articles in the daily papers as to the effect of the judgment, some of which opinions seem to us of doubtful accuracy. It does not appear to us, so far as we can judge, that THE ARBITRARY DISCRETION OF THE the court above differed from the court below so much on any COURT UNDER THE CONVEYANCING distinct question of law, or on the construction of the statutes, as ACT. on the inference of mixed law and fact to be drawn from certain

statements in the two cases the judgment in which was reversed, as to the character of the occupation. We understand that, in both these cases, there were statements from which the Court of Appeal gathered that the landlord of the house not only retained part of the house in his occupation, but retained or exercised some general control over the house as a whole. The court below appear to have thought, if we are not mistaken, that this general control practically amounted to nothing. We have always contended that the Act of 1878 by no means amounted to an abolition of the lodger franchise—a construction which appears to have been rashly contended for by some-and that it was a very nice question of mixed law and fact, depending on the circumstances of the particular case, whether a man was a lodger or an inhabitant householder. Both the court below and the Court of Appeal hold that a part of a house not structurally severed may now be occupied as a house or as lodgings, and that it is a difficult question, depending on the particular facts in each case, whether the character of the occupation is such as to make the tenant a mere lodger or an independent householder. It is obvious to anyone reading the report of the judgment that the result of the decision of the Court of Appeal is not to be summarized in the reckless, rough and ready manner to which have alluded. It is easy, of course, to suggest cases well on each side of the line. It is now clear that if the landlord does not reside in the house or keep any servant in it to exercise control, but lets off the whole house to different persons who exercise the exclusive control over their respective rooms, except so far as the landlord may retain control for the purposes of repairs, the occupiers of the different rooms will be householders. It is also clear that if the landlord retains part of the house which he occupies by himself and his servant, and retains the general control over the house as a whole, the sub-tenants are merely lodgers. The question which the decision does not seem distinctly to decide, so far as we can judge from the newspaper reports, is whether or no the fact of the landlord's retaining part of the house necessarily involves that the sub-tenant is a lodger-whether there cannot be an occupation of part of a house by some other person than the landlord as a householder, if the landlord lives in the house. Some of the comments on the recent decisions very dogmatically assert that they decide this point. We feel doubtful whether they do altogether decide it. Practically speaking, it may, as a matter of fact, be almost universally the case that when the landlord lives in the house he does exercise general control over it as a whole; it may be that the inference

One of them is the

AT the present day two causes are at work to obliterate the
distinction, which was formerly so strongly marked, between
English judges and virtuous Turkish cadis.
increasing crop of statutes and the carelessness (often condemned
by the judges themselves) with which they are too often drafted.
The other cause is the high and unsullied character of our
judges, which has so effectually earned for them a deserved venera-
tion, that Parliament is more ready to thrust the responsibility of a
discretion upon them than they themselves are to assume it. The
poor quality of the parliamentary grist makes it often necessary,
if any product of common-sense is to be evolved out of the half-
chaotic mass, that the judges of to-day shall permit themselves
much greater liberty in dealing with the letter of the law than
would have commended itself to the judges almost of yesterday.

Our purpose to-day is not to debate whether such changes are for good or for evil, but to point out that, partly through negligence and partly by design, they are taking place; and in particular, that a huge stride in this direction has been taken by the Conveyancing Act. The public seems at present to have a very imperfect apprehension of the vast increase in the mere arbitrary discretion of the courts which that Act has effected. The earliest example in the Act of this extension of arbitrary discretion is contained in section 5.

"5-(1.) Where land subject to any incumbrance, whether immediately payable or not, is sold by the court, or out of court, the court may, if it thinks fit, on the application of any party to the sale, direct or allow payment into court, in case of an annual sum charged on the land, or of a capital sum charged on a determinable interest in the land, of such amount as, when invested in Government securities, the court considers will be sufficient, by means of the dividends thereof, to keep down or otherwise provide for that charge, and in any other case of capital money charged on the land, of but in either case there shall also be paid into court such additional amount as the amount sufficient to meet the incumbrance and any interest due thereon; the court considers will be sufficient to meet the contingency of further costs, expenses, and interest, and any other cortingency, except depreciation of investments, not exceeding one-tenth part of the original amount to be paid in, unless the court for special reason think fit to require a larger additional (2.) Thereupon the court may, if it thinks fit, and either after or without any notice to the incumbrancer, as the court thinks fit, declare the land to be freed from the incumbrance, and make any order for conveyance, or vesting order, proper for giving effect to the sale, and give directions for the retention and the investment of the money in court."

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The gravity of this enactment hardly admits of exaggeration. By section 2, sub-section (vii.), “incumbrance includes a mortgage in fee, or for a less estate." Section 69, sub-section (iii.),

enacts that "every application to the court shall, except where it is otherwise expressed, be by summons at chambers." The section applies to ordinary sales as well as to sales by the court. We may hope that general regulations will be made to put some restraint upon powers so evidently liable to abuse. But as the matter now stands we see nothing to prevent any mortgagee of land from being redeemed behind his back, by an order made by a chief clerk at chambers, upon an ex parte application, at which no one is obliged to be present except persons whose interests are adverse to that of the mortgagee, and whose interest it is to keep him in the dark.

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The objectionable character of the section is enhanced by the obscurity of those parts which, more than any others, needed to be made clear. There is no obscurity about those parts which give the court power to permit a mortgagee to be redeemed behind his back; but much obscurity hangs about the provisions which seem to have been designed to give him some protection under those circumstances. We find three phrases used to describe the incumbrances which the section contemplates; (i.), "an annual sum charged on the land"; (ii.), a capital sum charged on a determinable interest in the land"; and (iii.), “any other case of capital money charged on the land." It is difficult to give any meaning to this distinction between "the land" and "determinable interest in the land," unless the former means an interest in the land which is not determinable; that is, an estate in fee simple. The first two kinds of incumbrance seem, upon this hypothesis, to be respectively (i.), a rent charge (whether terminable or not) issuing out of land held in fee simple subject thereto; and (ii.) | any principal sum charged by way of mortgage upon a less estate than a fee simple, In both these cases the sum to be paid into court must be, in the opinion of the court, "sufficient, by means of the dividends thereof, to keep down or otherwise provide for" the incumbrance. In the third case, which seems to include the case of a mortgage in fee simple, the protection given by the section is much less adequate. Nothing is here said about the sufficiency of the dividends: the Act speaks only of "the amount sufficient to meet the incumbrance and any interest due thereon"; together with a further margin, which is not generally to exceed ten per cent. These expressions, "the amount" and "any interest due thereon," seem most naturally to mean the bare amount of the principal, together with any interest which may be actually due at the time when the order discharging the incumbrance is made; upon which latter point the court, in the absence of the creditor, will, it would seem, be forced to rely upon the evidence of the debtor. There seems at present to be no reason why, after the commencement of the Act, any mortgagee in fee should not be liable to the sudden discovery that his mortgage has been commuted behind his back for a sum of consols bearing interest at three per cent. In this respect mortgagees of leaseholds seem to be placed in a safer position by the Act than mortgagees in fee simple.

We find nothing in the section to indicate that the court has power, out of the margin of (not exceeding) ten per cent., to indemnify the unfortunate mortgagee for the sudden fall of his income to three per cent. upon his capital; unless this was intended to be effected by the words, "such additional amount as the court considers will be sufficient to meet the contingency of further costs, expenses, and interest, and any other contingency." But such a diminution of income would very improperly be styled a "contingency"; and even granting that the last cited words can by possibility bear this meaning, we think that such a point as this ought not to have been dealt with in so perfunctory a fashion. The last-mentioned point does not seem to be dealt with in the next following sub-section.

"(3.) After notice served on the persons interested in or entitled to the money or fund in court, the court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or

income thereof."

There seems to be nothing here to give to any person a larger or better title than he has without it; nor anything to enlarge the power of the court to deal with the fund, unless such a meaning lurks in the words, "and generally may give directions," &c. But those vague words seem to be very inadequate to such a purpose. We may also observe that the reference to "notice "

at the beginning of the sub-section is singularly abrupt, being heralded only by a provision that no notice needs to be given. The section applies (sub-section 4) to "sales not completed at the commencement of this Act, and to sales thereafter made." By this charming euphemism the inclusion within the Act of mortgages made before its commencement, in case of a subsequent sale of the mortgaged lands, is effectually secured.

But the most astounding consequence of the section is one which was evidently neither desired nor foreseen by its authors. If it shall ever become the common practice to permit mortgagees to be redeemed behind their backs, there will exist a means to prevent the consolidation of mortgages far more potent than the tame proposals of section 17. Mortgagees will in vain seek to protect themselves by expressing a contrary intention" in their mortgage deeds: they will be liable to find that their mortgages have been secretly redeemed in detail, without an opportunity of even claiming to consolidate. This is "abolishing consolidation " with a vengeance!

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The foregoing, if it is not the most sweeping example to be found in the Act of the extension of the court's arbitrary discretion, seems to offer the most dangerous prospect of abuse. It is also perhaps the most conspicuous example of the Act's interference with rights of property which have hitherto been treated more respectfully by Parliament. Section 25, sub-section (2), is similar in character, but of much less significant scope. It extends the existing practice under section 48 of the Chancery Procedure Act (15 & 16 Vict. c. 86), whereby the court is enabled in foreclosure suits to make an order for the sale of the mortgaged property against the wish of the mortgagee. Under the present practice this cannot be done without the deposit in court of a reasonable sum for the purpose of securing performance of the terms subject to which the sale is ordered to be made. Under the coming practice, such deposit is not obligatory, but lies wholly in the discretion of the court. One circumstance makes us view this provision more favourably than those contained in section 5: there is nothing to show that, under section 25, the mortgagee can be deprived of his rights in his absence; for which section 5 makes express provision. This distinction is of great importance. Section 25 in much of its language follows section 48 of the previous Act; and we regret that the language (which admits easily of being improved) has in its new version become less clear than it was before.

The importance of the foregoing matters is certainly not diminished by section 70.

"70.-(1.) An order of the court under any statutory or other jurisdiction shall not, as against a purchaser, be invalidated on the ground of want of jurisdiction, or of want of any concurrence, consent, notice, or service, whether the purchaser has notice of any such want or not.

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(2.) This section shall have effect with respect to any lease, sale, or other act under the authority of the court, and purporting to be in pursuance of the Settled Estates Act, 1877, notwithstanding the exception in section forty of that Act, or to be in pursuance of any former Act repealed by that Act, notwithstanding any exception in such former Act.

"(3.) This section applies to all orders made before or after the commencement of this Act, except any order which has before the commencement of this Act been set aside or determined to be invalid on any ground, and except any order as regards which an action or proceeding is at the commencement of this Act pending for having it set aside or determined to be invalid."

We might inquire how an order "under any statutory or other jurisdiction" can possibly be invalidated "for want of jurisdiction." We do not profess to know. But there remain enough of other "wants" to give the section plenty of meaning. It does not contain any saving in case the order shall have been obtained by fraud or collusion; for which section 5, in the absence of stringent regulations not yet made, seems to offer tempting facilities. Indeed, it is no difficult thing for an unscrupulous and daring person to obtain an order by deceit; and the principal check upon the practice has hitherto been the fact that such orders do not at present bind absent parties, whose absence is at the same time necessary to the success of the fraud. This obstacle seems now to be in great part removed, and the result remains to be seen. For though it may be hoped that, if an order should be obtained by fraud with the collusion of the purchaser, or even with his knowledge after the event, the court (relying more upon its high moral tone than upon the letter of the statute) would treat it as void, we feel no sufficient assurance that, if the purchaser had no notice of the fraud, the order would

be held to be void as against him. A striking career seems here to open itself to certain classes of our population.

We have already more than once expressed the opinion that the absolute discretion to relieve against the forfeiture of a lease for breach of covenant, given to the court by section 14, will turn out to be much less to the public benefit than such a discretion would have been if limited by moderate and clearly-defined rules. If general conclusions may ever be safely drawn from the general facts of human nature, we may safely conclude (1) that in future few tenants, who are not willing to surrender their holdings, will give up possession after incurring a forfeiture, without first trying their luck" in the court; (2) that the frequent exercise of a very difficult discretionary power, unguided by any hint of a rule in the Act, will lead to much conflict of opinion among the courts of first instance as to what under different circumstances constitutes a proper case for relief. These consequences will both tend to cause litigation which might, with great advantage to the public, have been prevented.

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A similar objection lies against section 39, of which the intention seems to us to be much more praiseworthy than the execu

tion.

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Here we are unfortunately in doubt as to the meaning which will ultimately be affixed to the vague word "bind." In our opinion it is properly adapted to indicate only the creation of a valid charge. The learned authors of a highly-commendable text-book upon the Act seem to think that it is equally well (or better) adapted to permit the complete alienation of the property. Sub-section (2) exhibits a singular scrupulosity of precaution; which might perhaps with greater profit have spent itself in finding a clearer word than "bind" to express the meaning of the previous sub-section.

Section 41 is another well-meant provision of the Act which seems likely to prove a doubtful blessing.

"41.-Where a person in his own right seised of or entitled to land for an estate in fee simple, or for any leasehold interest at a rent, is an infant, the land shall be deemed to be a settled estate within the Settled Estates Act,

1877."

Anyone who is familiar with the Settled Estates Act will be aware that it is so thoroughly permeated (as would be expected from its title and subject-matter) with constant references to the machinery of a settlement, that this mere bald and unqualified intrusion into it of unsettled estates cannot fail to give rise to many questions and much consequent litigation. The disabilities which arise from ownership of a limited interest are by no means identical with the disability of an absolute owner arising from infancy. Common sense suggests that a scheme devised to meet the former case can hardly be well adapted to meet the latter. We have no space for a detailed exposition of the numerous hitches which may be expected to occur. But some doubt may be felt whether section 41 will have any operation, unless the court is willing by virtue of it to assume a plenary authority to act on the infant's behalf, unfettered by any conditions whatever, in such way as it judges to be most for the infant's advantage.

Such are the principal extensions, so far as the Act's designed operation is concerned, of the arbitrary discretion of the court. Some of them appear to us to be such as ought not to have been committed to any assembly or body of persons whatever; and our best hope in regard to these is, that the superior wisdom of the court will forbid them ever to be practically exercised. regard to some others we think that the shape in which they have found expression is so unfortunately designed, that they are likely on the whole to do more harm than good.

In

We have received several excellent diaries from Messrs. Partridge & Cooper-convenient, well arranged, and printed on good paper. The Diary and Call Book for 1882 is a very cheap and useful work. Messrs. Letts, Son, & Co. also send some specimens of diaries, of which the Rough Diary or Scribbling Journal is a very good specimen of a quarto diary.

THE TRUE GROUND OF PRESCRIPTION. THE case of Angus v. Dalton (L. R. 6 App. 740) has found its way into the legal reports, and we now, therefore, have an opportunity of perusing the very elaborate opinions of a great many judges and of the law lords themselves. A truly enormous amount of learning has been lavished upon this case in all its stages. The case was one of great importance, no doubt, but some slight regret must, we think, be present to many that it should be impossible to arrive at a conclusion on the matter by a somewhat shorter route. It is obvious to anyone who regards many of the great decisions of our ultimate tribunal from an external or philosophical, rather than an internal and professional, point of view, that, professing as they do all the while to be founded on the strictest adherence to precedent, the reason and expediency of the thing have really been the governing considerations. The effect of previous decisions and dicta depends entirely, or, at least, to a very great extent, on the point of view from which they are approached. One finds constantly in judgments the most elaborate reviews of all the previous decisions when, all the while, one cannot help suspecting that the legal authority who undergoes this colossal labour has really previously made up his mind on the broad principle, of reason and expediency, and that had those broad principles led his mind to the contrary conclusion, he would somehow have found the long chain of authorities susceptible of a very different construction. It is, to our mind, great matter for thankfulness that broad principles do govern. On the other hand, no doubt, the principle of adherence to authority is very important. One cannot, however, help being sometimes conscious of a slight regret that the loyalty and ostensible deference which are, no doubt, due by an English judge to the sanctity of precedent should sometimes entail such enormous labour both to judges and students of the law.

We observed at the time when Angus v. Dalton was passing through the courts below, that to whatever length the arguments might be spun out, the real question was but a short one, and that it was which of two divergent principles prescription really rests upon. These principles are not always clearly formulated by the authorities, and the cases all along have, therefore, presented somewhat conflicting views of the subject. One ground upon which prescription has been rested is long enjoyment simpliciter. The other is long hostile enjoyment. The differences between the two are considerable. There is a formal and a substantial difference. The difference in form is this: in former times there has always been a disposition to rest principles on the legal fiction of a supposed grant, express or implied. The reason is obvious: judge-made law naturally seeks the aid of such fictions to mask its really arbitrary nature. For a judge, of himself, to say, that after such a period of enjoyment there shall be a right, is or seems, a greater stretch than for him to say, such a period of enjoyment leads me to think that there must have been a grant of this right. When the period of prescription went back a very long way, it really was not so very violent a presumption that there originally had been a grant. It is not until the period of prescription comes to be shortened to twenty years, which, by various devices, such as the doctrine of lost grant, it subsequently was, that it gradually becomes obvious that the presumption of a grant is very violent and artificial. It is obvious that the presumption of a grant much more easily arises from hostile enjoyment-i.e., from enjoyment which, in the absence of a grant, would have been an actionable wrong—than from enjoyment which

was no wrong.

The substantial distinction between the two grounds of preasserted his rights by legal proceedings, has slept upon them for scription is not a slight one. When a person who might have years and acquiesced in his neighbour's encroachments, his laches may not unnaturally be held to give his neighbour a title against him. It is obvious that it would be unjust to allow him suddenly, after a great interval, to turn round and assert his dormant right. On the other hand, there is some hardship in establishing a prescriptive title against a person simply because he has not interrupted his neighbour's lawful enjoyment of his own. These two somewhat different grounds of prescription seem to have coexisted to a great extent in the history of the decisions on the

subject, and the issue between them never seems to have been fairly joined until this recent case of Angus v. Dalton. The prescriptive right to light, no doubt, was a strong point in favour of the broader view of the true ground of prescription, but the principle on which this right must rest never seems to have been laid down in general terms.

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It seems to us that the general effect of Angus v. Dalton is nearly, if not quite, to establish that the true ground upon which prescription rests is that of enjoyment, without reference to the question whether that enjoyment is hostile in the sense of being actionable. In the case of affirmative easements, of course the enjoyment must be hostile if not by agreement or license, and these of course will be à fortiori cases, but, on the principle of omne majus continet in se minus, it cannot be said that prescription depends on the hostile character of the enjoyment if the broader principle be correct. The Lord Chancellor, in giving judgment, says, "The policy and purpose of the law upon which both prescription and the presumptions that have supplied its place, when length of possession has been less than immemorial, rest, would be defeated, or rendered very insecure, if exceptions to it were admitted on such grounds as that a particular servitude capable of a legal origin is negative rather than positive, or that the inchoate enjoyment of it, before it has matured into a right, is not an actionable wrong; or that resistance to, or interruption of it may not be conveniently practicable, . it would not be reasonably consistent with the policy of the law in favour of possessory titles that they should depend in each particular case upon the greater or less facility or difficulty, convenience or inconvenience, of practically interrupting them. They can always be interrupted, and that without difficulty or inconvenience, when a man wishes, and finds it for his interest, to make such a use of his land as will have that effect. So long as it does not suit his purpose or his interest to do this, the law which allows a servitude to be established or enlarged by long and open enjoyment against one whose preponderating interest it has been to be passive during the whole time necessary for its acquisition, seems more reasonable and more consistent with public convenience and natural equity than one which would enable him, at any distance of time (whenever his views of his own interest may have undergone a change), to destroy the fruits of his neighbour's diligence, industry, and expenditure. The law of ancient lights, as it stood before the Prescription Act, was a stronger example of the application of these principles, the easement in that case being more purely negative." Lord Blackburn said, "I cannot agree that the only principle on which enjoyment could give the owner of property a prescriptive right over a neighbour's land exceeding what would, of common right, belong to the owner of that property, was acquiescence on the part of the neighbour. Nor even that it is the chief principle. In general, such enlarged rights are of such a nature that those over whose property they are enjoyed could, in the beginning, have stopped them; and a failure to stop them is evidence of acquiescence, and may afford a ground for finding that there was an actual assent, but that is in many, if not in all, cases a fiction; there is seldom a real assent. But no doubt a failure to interrupt where there is power to do so may well be called laches, and it seems far less hard to say that for the public good, and for the quieting of titles, enjoyment for a prescribed time shall bar the true owner when the true owner has been guilty of laches, than to say that for the public good the true owner shall lose his rights if he has not exercised them during the prescribed period, whether there be laches or not; but there is not much hardship. Presumably such rights, if not exercised, are not of much value, and though sometimes they are, ad ea quæ frequentius accidunt jura adaptantur. This ground of acquiescence or laches is often spoken of as if it was the only ground on which prescription was or could be founded. But I think the weight of authority, both in this country and in other systems of jurisprudence, shows that the principle on which prescription is founded is more extensive." These passages from the judgments of the Lord Chancellor and Lord Blackburn seem to establish the broader ground as the true ground of prescription. Lord Watson's judgment is short, and is based chiefly on the authorities. Lord Penzance also appears to have thought the matter concluded by authority, though inclined, if the matter had been res integra, and to be determined on principle, to take

the narrower view of the ground of prescription as being acquiescence or consent, and therefore to think that prescription could not arise where the owner of the servient tenement could not practically have interrupted the enjoyment. In the face of these differences, it may possibly be open to some slight question whether the broader view of the ground of prescription is entirely established, but, having regard to the expressions of the Lord Chancellor and Lord Blackburn, it would seem to be very nearly clear that it is so.

The judgments in the House of Lords, though they treat fully of the question as to the character of the enjoyment from which a prescriptive right arises, do not deal very fully with the principle upon which, apart from the Prescription Act, enjoyment for a period short of immemorial enjoyment gives a prescriptive right. The Lord Chancellor, indeed, expresses an opinion that the easement of support is within the Prescription Act, but apparently he does not base his judgment on that opinion, saying that even if it were otherwise his decision would be the same. He states, however, that he agrees with the views of Lush, J., in the Queen's Bench Division, and of the majority of the judges in the Court of Appeal, and of the judges who attended in the House of Lords. The view of the majority in the Court of Appeal on this point would seem to be that it has become established by authority as positive law that a lost grant must be presumed from twenty years' user of the requisite character. The grant is, in one sense, a fiction, but it is not a fiction in the sense that any falsity is now involved. It is only now another way of saying that the law establishes the prescription after twenty years' enjoyment.

BANKRUPTCY LAW REFORM.
[COMMUNICATED.]
IV.

Clause 16 of the Government Bankruptcy Bill relates to proofs of debt, and proposes to make several alterations in the existing practice. Sub-clauses 1 and 2 are as follows:

"(1.) Every creditor shall send or deliver his proof of debt as soon as may be after the adjudication.

"(2.) The proof shall be sent or delivered to the official receiver or, if a trustee has been appointed, to the trustee.

The words "

1 appear unsatisfactorily vague, and taken in conjunction with sub-clause as soon as may be after the adjudication" in sub-clause 7, which provides a limit of three months from the date of adjudication for the admission of any proof, except under special circumstances, would make a very undesirable alteration in the present practice. Why should a creditor be compelled to put in his proof until a dividend is about to be declared? No one is prejudiced by his not doing so, and there may be many reasons why he may not be able to prove earlier, particularly if sake, and we feel sure that if enacted it will soon be found quite unworkhe be partly secured. This appears to be another change for change's able, and its alteration back again to the present law would be asked for. Then, again, reference is made in the marginal note of the Bill to rules 67-77. Is it intended that those rules shall be entirely done away with? If so, then there will be no provision as to clerks, &c., proving debts owing to their employers, or agents of corporate bodies, which will soon bring If, on the other hand, fresh down the complaints of commercial meu. The rules are to be prescribed on these points it might be so stated. introduction of the words "in manner prescribed " would probably be sufficient for that purpose.

Sub-clause 2 is practically the same as the present law, "official receiver" being substituted for "registrar."

“Sub-clause (3). The official receiver and trustee shall respectively have power to accept or reject proofs subject to appeal to the court."

This is practically an amalgamation of section 25, sub-section 1, of the Act of 1869, and rule 70, "official receiver" being again substituted for "registrar." We think it highly objectionable for an official receiver to have the power to accept or reject proofs prior to the appointment of a trustee, so as to prejudice the investigation which a trustee will afterwards, when appointed, have to make into each claim. Power might, however, very properly be given to the official receiver to advise the first object to them (or allow any creditor to do so), for the purpose of meeting as to proofs presented prior thereto, or at the meeting, or to voting.

"Sub-clause (4). A creditor may, with the leave of the official receiver or trustee amend the proof, and thereupon shall be entitled to be paid out of any money for the time being available for dividend any dividend or share of

dividend he may have failed to receive by reason of the inaccuracy of his original proof, before that money is made applicable to the payment of any future dividend, but he shall not be entitled to disturb the distribution of any dividend declared before the date of the amendment."

It seems only reasonable that a creditor should have liberty to amend his proof if unintentionally any inaccuracy should have crept into the proof as originally drawn, so that no one is to be prejudiced thereby. But this sub-clause proposes to give the power to allow or refuse such an amendment absolutely into the hands of the official receiver or trustee (subject to the limit proposed by sub-clause 7). We think, in case of their refusing to allow such an amendment, an appeal to the court should be allowed. Trustees appointed by creditors may be apt to abuse this power, and it appears very desirable that creditors should not be placed absolutely at their mercy on a point of this kind. Further, is it intended that the official receiver shall have this power collaterally with a trustee, or only when a trustee has not been appointed, or has ceased to act? We presume the latter, but a literal construction of the words would give him the power in the former case also, which would be highly objection"Sub-clause (5). A secured creditor shall state in his proof the particulars of his security, and the value at which he estimates it, and shall be deemed to be a creditor only in respect of the balance due to him after deducting the value so estimated."

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The words "unless he shall have previously realized his security' ought, we think, to be inserted between the words "creditor" and "shall," in the first line of this sub-clause, as they appear in rule 99 of the Bankruptcy Rules, 1870. The chamber of commerce of a provincial city recommended that this sub-clause should not apply to collateral securities. The members of that body may set their minds at rest upon this point, as, by section 16, sub-section 5, of the Act of 1869, a" secured creditor" is defined to mean any creditor holding any mortgage, charge, or lien on the bankrupt's estate or any part thereof as security for a debt due to him." So that a creditor holding only collateral securities is not a secured creditor within the meaning of that Act, or of this Bill, which was to be incorporated therewith.

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"Sub-clause (6). A secured creditor shall, on application made by any person interested within a prescribed time after the date of adjudication, and on payment of the value of his security as estimated in his original or amended proof, give up his security to be dealt with as part of the property of the bankrupt for the benefit of the creditors."

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"Clause 17.-A creditor shall not vote in respect of any debt on, or secured by, a current bill of exchange or promissory note held by him, unless he is willing to treat the liability to him thereon of every person other than the debtor as a security in his hands, and to estimate the value thereof, and deduct it from his proof, in which case he shall, on application within the prescribed time by any person interested, give up the security for the benefit of the bankrupt's creditors on payment of the value so estimated. Provided that this estimate shall not, except as far as the creditor receives any such payment as aforesaid in respect thereof, prejudice the right of the creditor to receive from the bankrupt's estate a dividend on the whole amount of the debt."

We

No distinction is made by this clause between the case of an indorsee of a bill of exchange, upon which the debtor upon whose estate the proof is to be made is primarily liable as acceptor, there being the drawer and perhaps one or two indorsers of the bill also liable to the holder, and an indorsee of a current bill of exchange seeking to prove upon the estate of the indorser thereof to him, there being, perhaps, a solvent acceptor and drawer also liable upon the bill of exchange. should presume that the clause was meant to apply only to the latter case, but, as drawn, it would undoubtedly also embrace the former, which would be very objectionable, though the other might be advisable. Our remarks upon the words " any person interested" in sub-clause 6 of clause 16 will also apply to the same words in this clause. The proviso at the end of the clause, we think, would be greatly improved by the omission of the words, except as far as the creditor receives any such payment as aforesaid in respect thereof," and the substitution of the following words at the conclusion:-"But so that he shall not receive from all sources more than the full amount of his debt." The effect of the proviso, as drawn, is anything but clear to our mind, and may not be intended to mean more than the amendment we have suggested. If it is intended to go further than our suggestion obviously would, then we think it objectionable, but if not, then there is all the greater reason why it should be made clear.

Clause 18 relates to the much-vexed question of proxies. This question and the limitation of the power of the appointees to vote has given rise to very considerable discussion. Our experience leads us to say, without hesitation, that the abolition of proxies altogether (which some have advocated) is utterly impracticable, but that a considerable limitation in the use of them upon the present system is very desirable. This clause proposes to so limit them, and we will consider each proposal separately under the head of each sub-clause.

"Sub-clause (1). Every proxy for the purpose of proceedings under a bankruptcy petition shall be in a form issued by the official receiver, or, after the appointment of a trustee, by the trustee and stamped as such."

We cannot see what protection this will be, but, on the contrary, it will only give unnecessary trouble to creditors, unless it be also provided that the official receiver or trustee shall send a form of proxy to each creditor along with the notice convening the meeting. Then what is the meaning of the expression "stamped as such"? Does it mean that an Inland Revenue or Bankruptcy stamp of a certain prescribed value shall be affixed by the official receiver or trustee? If so, who is to bear the cost? Or should the word "stamped" read "sealed "? And if so, with what is it to be sealed with the seal of the court or with some seal to be provided by the official receiver or trustee?

This and the last preceding sub-clause must be carefully compared with rules 99-101 of 1870. On the whole, we think the latter preferable, especially rule 101, which inflicts a penalty upon a creditor who, in his proof, over-estimates the value of his security-viz., that he cannot afterwards increase his proof-which is not contained in the sub-clauses under discussion, leaving the trustee in his absolute discretion (sub-clause 4) to allow or refuse to allow a creditor to amend his proof in such a case; subject, however, to the restriction as to time contained in the next sub-clause. Then, again, it is proposed to give any person interested" a right to take up the security at its assessed value for the benefit of the estate instead of the trustee only, as by rule 100. We presume it is intended that in the event of a person other than the trustee taking up such a security, the risk of such security turning out to be of less value, and the loss that would thereby arise, would have to be borne by such person. And, on the other hand, we presume it is intended that such person should be entitled to be recouped out of the proceeds of the security the moneys he would have to advance in order to take it up. But the sub-clause leaves this to be inferred only, which is very objec-vent a cr editor from appointing by power of attorney any person to do tionable, and we think the position of such a person ought to be more clearly defined.

"Sub-clause (7). No proof shall be admitted or amended after the expiration of three months from the date of the adjudication, except under special circumstances approved by the court as sufficient to justify the delay."

We have referred to this sub-clause in our comments upon sub-clause 1. The proposition is a complete innovation in the law and practice of bankruptcy, and, in our opinion, a very mistaken one. Then, again, the intention of the latter portion of the sub-clause is not very clear so far as it affects the allowance of an amendment. If a creditor is only to be allowed to amend his proof with the leave of the official receiver or trustee (sub-clause 4), and they decline to give such permission, we presume that the creditor could not apply to the court under this sub-clause. It would seem, therefore, only to apply to cases where the official receiver or trustee is willing to allow the amendment, but is debarred on account of the lapse of time. We think this altogether an unnecessary hampering of a trustee's discretion. If the trustee is willing to allow the amendment, it is not likely that any court will refuse its sanction, and the necessity of such application will only be to cause useless expense. It ought to be the aim of the bankruptcy laws to afford creditors facilities to prove their debts and not to throw obstacles in their

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"Sub-clause (2). A proxy shall not be available except for the purpose of voting at a specified meeting, or at any adjournment thereof." This li mitation is very desirable, but at the same time it will not preall acts in the bankruptcy in the same way as the creditor himself could do. This is a power given by the common law outside of any Bankruptcy Act, and we do not think it can advisedly be done away with. It frequently happens that gentlemen in business go abroad (perhaps on business or for the benefit of their health, or merely for pleasure seeking) for many months together, leaving general powers of attorney in the hands of their managers, and it would not be advisable to curtail this power. But it leaves open a way by which, at the cost of ten shillings (being the stamp required on a power of attorney), the provision in this sub-clause may be entirely evaded. Probably a provision that no person shall be allowed to vote as the attorney for a creditor under any general power of attorney unless the attorney be a person in the usual and bona fide employment of the creditor would meet this difficulty.

"Sub-clause (3). No more than one form of proxy shall be issued to the same creditor for the same meeting."

What is the object of this? Does it mean that if a creditor should inadvertently lose or destroy his form of proxy that he should not be should be made for such a case. entitled to another? If so, it is decidedly too arbitrary, and provision

"Sub-clause (4). A person shall not be appointed as proxy for a creditor if he is solicitor for the bankrupt, or a partner with, or a person in the employment of, the bankrupt's solicitor."

The proposal contained in this sub-clause has been hailed in some very short-sighted quarters as the grand panacea which is at once to set right the whole machinery of the bankruptcy laws. To us it appears to

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