Page images

defendants an easement over land belonging to them for CASES OF THE WEEK.

running their trains over it, and the defendants were to pay the plaintiffs a rent for this user. Jessel, M.R., held (ante,

p. 95), and the Court of Appeal (JAMES, BRETT, and COTTON, PRODUCTION OF DOCUMENTE-PRIVILEGE-COMMUNICA L.JJ.) affirmed his decision, that the rent for the easement TIONS BETWEEN SOLICITOR AND THIRD PARTY ANTE LITEM was part of the working expenses of the line, which the NOTAM.-In a case of Wheeler v. Le Marchant, before the receiver was bound to pay out of the funds in his hands, Court of Appeal on the 6th inst., a question arose as to the before dividing anything among the holders of debenture production of documents in respect of which the defendants | stock. The plaintiffs had recovered judgment against the claimed privilege. The plaintiff was a contractor, the de- i defendants for arrears of the rent, and Jessel, M.R., held that fendants were the owners of a large estate near London. the plaintiffs were entitled to judgment for possession of their The action was brought for the specific performance of a land unless the defendants should pay the arrears of the building agreement entered into between the defendants and rent. In this respect, also, the decision was afirmed by the the plaintiff, In an affidavit made by the defendants of Court of Appeal.-SOLICITORS, Curwood; Wilson, Bristows, documents in their possession relating to the matters in f Carpmael ; Norton, Rose, & Co. question in the action, they claimed protection for certain documents which they described as confidential corres. pondence between their solicitors and their estate agent and FRAUDULENT PREFERENCE-FRAUDULENT TRANSFER OF surveyor. Bacon, V.C., refused to order the production of Goods-ACT OF BANKRUPTCY-SALE OF GOODS WITH this correspondence, though the greater part of it had taken INTENTION TO APPLY PROCEEDS IN VOLUNTARY PAYMENTplace, not only ante litem motam, but before any litigation

MAKING GOOD BREACH OF TRUST-BANKRUPTCY ACT, 1869, was in contemplation between the plaintiff and the defend- | SS. 6 (SUB-SECTION 2), 92.-In a case of Eic parte Stubbins, ants. Upon the argument of the appeal it was admitted that before the Court of Appeal on the 24th ult., the question the role as to privilege from production had never been arose whether a sale of goods by one of two co-trustees of carried so far before, but it was contended that on principle a will to another, for the purpose of using the purchaseit ought to be extended so as to include all communications money in making good a breach of trust which the vendor made by a third party to & legal adviser for the purpose of i had committed, amounted to a fraudulent preference or to enabling him the better to advise his client. The Court of fraudulent transfer of the goods, and, therefore, an act of Appeal (JESSEL, M.R., and BRETT and COTTON, L.JJ.) | bankruptcy. The two trustees, G. and W., were both wool refused to carry the rule to this extent. And they ordered | merchants. W. was the acting trustee. lo November, the production of the correspondence in gestion, except such 1 1878, W. told G. that he was in difficulties, and that his of the letters (if any) as the defendants should state by

bankers would allow him no more credit, and he asked G. affidavit to have been written confidentially after the

to buy some wool from him. G. said that he did not want the

to buy some wool from hi dispute had arisen between them and the plaintiff, and for

wool, and W. then told him that he had misapplied more than the purpose of obtaining information, evidence, or legal

£2,000 of the trust moneys to his own purposes, and that he advice with reference to the litigation between the parties to i wanted to sell the wool in order to use the proceeds in makthe action. JESSEL, M.R., said that such documents as those ing good the breach of trust. Ultimately, G. reluctantly in question had been held entitled to protection when they

consented to buy the wool, and it was agreed that he should had come into existence after the litigation had been com

take it at a price to be fixed by some brokers. Before the menced, or threatened, or contemplated, and they had been

invoice was sent to him, G. paid W. £2,050, which W., obtained with a view to the litigation, but not otherwise. It

with the knowledge of G., a: once paid to the credit of the did not appear to his lordship that it was necessary, either

trust estato at a bank with which the trustees kept an acon principle or for the convenience of mankind, to extend the count. Shortly afterwards the wool was delivered to G. rule as was suggested. The protection afforded by it was Its value was ascertained to be less than the £2,050, and one of a very limited character. It did not extend to all

some more wool was subsequently delivered to G. to make confidential communications obtained by a man for the pro

up the deficency. In January, 1879, W. filed a liquidation tection of his life, or his honour, or his fortune. Many such

| petition. The trustee in the liquidation applied to the documents were not entitled to the privilege, as, for instance, county court, by notice of motion against G. and W., communications made to a medical man, or to a priest in

as representing the trust estate, for a declaration that tae confession, or to a friend with regard to matters of the most payment of the money to the credit of the trust estate was a delicate nature upon which his advice was sought. The fraudulent preference, and as such void as against the privilege was limited to communications inade in obtaining

trustee, and that the amount might be repaid by the trustees the advice and assistance of a legal adviser, and all things

of the will, with interest, to the trustee in the liquidation, reasonably necessary to the obtaining that advice and

The judge (Mr. Daniel, Q.C.) treated the payment of the assistance were within the protection, But it had never been

money by G. to W. as a loan to enable W. to make good the extended any further. The actual communications between

breach of trust, and the subsequent delivery of the goods as the solicitor and the client were, of course, protected, whether & repayment or satisfaction of the loan, and he declared the the client was acting personally or by an agent, and whether

transfer of the goods fraudulent, and ordered G. to pay the the solicitor acted in person, or was represented by a clerk or

£2,050, with inter-st, to the trustee. Bacon, C.J., held subordinate who was acting in his place. So, also, evidence

that there bad been no fraudalent preference, and discharged obtained by the solicitor after the litigation had commenced,

the order of the county court, and this decision was affirmed and with a view to the litigation, was protected. Communica by the Court of Appeal (JAMES, BRETT, and COTTON, tions necessary to the obtaining of legal advice were pro L.JJ.). Upon the hearing of the appeal, it was contended tected, and they must be made to the solicitor as such. The either that the transfer of the goods Was fraudulent within protection was now claimed for communications to the the meaning of sub-section 2 of section 6 of the Act, or solicitor, giving him information to enable him the better to

that the payment of the money to the trust account constigive legal advice to his client before any litigation was in

tuted a fraudulent preference of the trust estate within seccontemplation. It appeared to his lordship that this would

tion 92. JAMES, L.J. (who delivered the judgment of the be carrying tbe rule, not only beyond what any of the cases

court), said that the view of the county court judge could had laid down, but beyond what the necessities of mankind

not be sustained, for it was impossible to convert a required.--SOLICITORS, Boxall & Boxall ; Gregory, Rowcliffes,

transaction of sale and purchase into something which of Co.

it was not in order to bring in the doctrine of voluntary preference. Nor could it be said tbat the delivery of the

goods was a fraudulent transfer. It had never been held RAILWAY COMPANY-DEBENTURE HOLDERS- RECEIVER that a voluntary payment was of itself an actual fraud or an - WORKING EXPENSES-RENT FOR EASEMENT over LINE act of bankruptcy, though it might be impeached because OF ANOTHER COMPANY.-In a case of The Great Eastern it was voluntary, and it would be equally impossible to say Railway Company v. The East London Railway Company, that a sale of goods became fraudulent because there before the Court of Appeal on the 5th inst., a question arose was an intention in the mind of the vendor to use the as to the working expenses which the receiver of the tolls purchase-money in making a voluntary payment, and the undertaking of a railway company, appointed at the instance | purchaser knew that this was the motive of the vendor for of the holders of debenture stock of the company, was bound making the sale. Nor could it be said that there had been to pay before making any payments to the holders of deben - a fraudulent preference of the trust estate. To render a ture stock. The plaintiffs had agreed to grant to the i voluntary payment void it must be a payment to a creditor,

or to a person in trust for a creditor, and it was impossible in execution. The interest of the third mortgagee under his to hold that, if a debtor, on the eve of bankruptcy, replaced mortgage was an interest in land, and it was clear that the money which he had stolen, such a payment would judgment creditor could not affect that interest in the amount to a fraudulent preference. It should be noted hands of the mortgagee until it had been delivered in execu. that the latter part of the judgment appears to be in direct tion. Though he could not do this directly, it was suggested conflict with an opinion expressed by Jessel, M.R., in the tbat he could do it in a roundabout way by means of & recent case of Ex parte the Merchant Banking Company garnishee order against the mortgagor. This could not be. of London (29 W. R. 363, ante, p. 295), though the The object of the Act of 1864 was to deprive judgment credi. point did not arise there for actual decision.-SOLICITORS, tors of some of their rights in order to make land more S. S. Seal; W. & J. Flower & Nussey.

easily transferable. The judgment creditor had another remedy by proceeding to obtain an equitable execution

against his debtor. BRETT, L.J., said though James, L.J., BANKRUPTCY-PROTECTED TRANSACTION - NOTICE OF

in Ex parte Joselyne spoke colloquially of the property in the ACT OF BANKRUPTCY-ONUS OF PROOF- BANKRUPTCY debt being transferred, he only meant to say the same thing Act, 1869, s. 35.- In a case of Ex parte Cartwright, before

as was said in rule 3 of order 45, viz., that the debt was bound the Court of Appeal on the 31st ult., a question arose as to in the hands of the garnishee.COTTON, L.J., said he was the onus of proving notice of an act of bankruptcy. The quite content to rest his judgment on the construction of trustee in a bankruptcy sought to set aside a bill of sale

the garnishee rules. The effect of these rules was only to which had been executed by the bankrupt, one of the grounds

prevent the judgment debtor from receiving the debt of tbe application being that there was a prior act of bank

which was attached, and to prevent the garnishee from pay. ruptoy to which the title of the trustee related back, and that

ing it to the judgment debtor; and, if he would not pay the grantee of the bill of sale had notice of it before he took

tbe debt to the judgment creditor, the latter could enforce his bill of sale. The question was raised whether the trustee

payment against him. There was nothing in the rules to was bound to prove the notice, or wbether the grantee was

affect any security for the debt which was attached; only bound to prove that he had no notice of the prior act of

the right of the original creditor to receive the attached bankruptcy. The court (JAMES, BRETT, and COTTON, L.JJ.),

debt was taken away. There was nothing to traosfer & following the decision of Mellish, LJ., in Ex parte Schulte

security for the attached debt to the judgment creditor, (22 W. R. 462, L. R. 9 Ch. 409), held that, inasmuch as the

though of course, if the garnishee paid the debt, or a part of bill of sale holder was claiming the protection of section 95 it, to him, the security would be wbolly or pro tanto disof the Bankruptcy Act, and was seeking 10 displace the title charged. 'JESSEL, M.R., added that he agreed that the of the trustee to the goods, the onus was on him to prove that attached debt was not transferred to the garnishor.-SOLICIhe bad, when he acquired his security, no notice of the prior

TORS, Peacock & Goddard; U. W. Chatterton ; I. Tyrrell.. act of bankruptcy. The prior act of bankruptcy consisted in the execution by the bankrupt of a prior bill of sale, whereby he assigned all his property as security for a pre-existing debt. The solicitor wbo acted for the first grantee in the pre

COMPANY - WINDING UP-LANDLORD - DISTRESS FOR paration of tbe first bill of sale, acted also for the second grantee

RENT—VOLUNTARY WINDING UP-OMISSION TO APPOINT in the preparation of the second bill of sale, and was his LIQUIDATOR — SUBSEQUENT ORDER FOR COMPULSORY agent in inducing the grantor to execute it. And the court WINDING UP - COMMENCEMENT OP WINDING UP-COMheld that the second grantee bad, through the solicitor, PANIES Act, 1862, s. 84, 85, 87, 130, 163–JUDICATURE notice of the fact that the first bill of sale was an act of ACT, 1875, s. 10-BANKRUPTCY ACT, 1869, s. 34.-On the bankruptcy, and was, consequently, pot entitled to the pro 30th ult., the Court of Appeal (Jessel, M.R., and Brett and tection of section 95.-SOLICITORS, G. Castle ; W. W. Ald Cotton, L.JJ.), reversed the decision of Malins, V.C., in ridge.

Thomas v. The Patent Lionite Manufacturing Company (29
W. R. 349). The question was whether the landlord of a

company in liquidation should be allowed to enforce a dis-JUDGMENT CREDITOR - GARNISHEE ORDBR AGAINST tress for rent accrued due before the commencement of the MORTGAGOR OF JUDGMENT DEBTOR-PROCEEDS OF SALE OF liquidation. On the 30th of July, 1880, the company passed MORTGAGED PROPERTY-ORD. 45, RR. 2, 3-JUDGMENT an extraordinary resolution to wind up voluntarily, but did ACT, 1864 (27 & 28 Vict. c. 112), s. 1.-In a case of not appoint any liquidator. On the 5th of August the landChatterton v. Watney, before the Court of Appeal on the lord levied a distress for a quarter's rent due on the 24th of 30th ult., the question was raised whether & judgment June. On the same day the action was brought by deben. creditor of a mortgagee of land, who has obtained a gar. ture holders, to whom the company bad mortgaged subnisbee order against the mortgagor, attaching all delts owing | stantially the whole of their property, to realize their from him to the mortgagee, acquires thereby any interest in the securits. On the 6th of August à receiver was appointed in mortgaged property or the proceeds of sale thereof. A judg. the action, and on the same day, on the application of the ment was recovered against a debtor who held a third mort. company, an injunction was granted to restrain the landlord gage upon some leasehold property. The judgment creditor from proceeding with the distress. On the 9th of August then obtained a garnisbee order against the mortgagor, the company appointed liquidators. On the 18th of August attaching all debts owing or accruing from him to the third a petition for winding up the company was presented by a mortgagee. The mortgaged property was afterwards sold by creditor, and on the 8th of September a compulsory winding. the first mortgagee under his power of sale, and, after paying up order was made, which in no way referred to the volun. his own mortgage debt, and that of the second mortgagee, I tary winding up or the proceedings under it. An official there remained a balance in the hands of the first mortgagee. liquidator was appointed by the court. Afterwards the The judgment creditor claimed a right by virtne of his gar landlord applied in the action for an order that the receiver nishee order to be paid his judgment debt out of this surplus. should pay him the amount of the quarter's rent. Malins, Bacon, V.C., held (L. R. 16 Ch.D. 378) that he had no suchy.c., was of opinion that the voluntary winding up rigbt, and this decision was affirmed by the Court of Appeal was not effective until the liquidators were appointed, (JESSEL, M.R., and BRETT and COTTON, L.JJ.). In support of and that the compulsory winding up did not date back the claim reliance was mainly placed on a passage in the judge to the passing of the resolution. Consequently, when ment of James, L.J., in Ex parte Joselyne (26 W. R.645, L, R. 8 | the distress was levied, there was no process of winding up Ch. D. 330), in which he said, “The moment the order of going on, and notbing to prevent the landlord from distrainattachment was served upon the garnishee, the property in the ing. An order was accordingly made that the receiver debt due from him was absolutely transferred from the judg.) should pay the quarter's rent to the landlord. The Court ment debtor to the judgment creditor.” And it was said that, of Appeal held that the voluntary winding up came into if the mortgage debt was transferred, the mortgage security operation on the passing of the extraordinary resolution, was also transferred. JESSEL, M.R., said that, by virtue of notwithstanding the non-appointment of a liquidator, and rule 3 of order 45, the effect of the service of the garnishes

that, though the compulsory winding up superseded it as order was simply to bind the attached debts in the hands of from the date of the winding-up order, it did not supersede the garnisbee, and to compel him to pay it to the garnishor. or render invalid the proceedings which had been meanwhile If there were no other statutory provision, the question might taken in the voluntary winding up. The distress was not have arised what was the effect of bioding a mortgage debt. I put in force until after the commencement of the winding But the Judgment Act of 1864 said that no judgment up, and there was no special ground for interfering with the should affect land until the land had been actually delivered l operation of section 163, wbich made the distress void: JESSEL, M.R., said that he could not understand how the remaining assets amongst the different solicitors in part payCourt of Appeal had ever been able to come to the conclu. | mont of their costs. He need not say he did not look upon sion tbat sections 86 and 87 of the Act enabled the court to such a result with satisfaction, and he was anxious to escape from the plain words of section 163, which make avoid it if possible. The petitioner alleged that he had Foid any distress pot in force after the commencement of a been induced to sell the company's goods by certain miswinding up. But it was well settled by several decisions representations, but if that were so it was no rtason for that this was 80, and the effect of the decisions was this, that, distarbing the voluntary winding up, although it might notwithstanding section 163, the court had a judicial discre- be a good ground for an action against the directors. The tion to allow a landlord to put in force a distress, and that only case attempted to be made was in referongo to the sale the discretion ought to be exercised in the landlord's favour of the furniture and paper. It was not, however, proved that whenever he could not prove in the winding up, but that, as the sale was at an undervalue, and from his own experience a general rule, it onght not when he could prove. In the be should very much doubt if it was, as office furniture, when present case the landlord was entitied to prove in the wind- sold, very frequently bore a very small relation to the price ing up, and his lordship thought there were no special originally paid for it. The petitioner had not shown that grounds for allowing bim to enforce his distress. Upon the there was any want of efficient supervision in the winding hearing of the appeal it was contended that the landlord was up, or any ground for any special investigation. In his & secured creditor by reason of his right of distress, and that opinion there was no reason for disturbing the voluntary the effect of section 10 of the Judicatnre Act of 1875 is to winding up, and he should therefore dismiss the petition, import into the winding up of companies section 34 of the and the petitioner must pay the company their costs.Bankruptcy Act, 1869, which enables the landlord of a SOLICITORS, Munns & Longden; Langton & Son. bankrupt to distrain after the commencement of the bankruptcy for a year's rent. The Court, however, held that section 10 had not this effect. JESSEL, M.R., said that WILL-MARRIED WOMAN-REAL ESTATE-LAPSE-ISSUE seation 10 dealt with the respective rights of secured and SURVIVING-CURTESY-WILLS ACT (1 VICT. c. 26), s. 33.unsecured creditors, and the right to levy a distress did | In a case of Eager v. Furnivall, before the Master of the not make the landlord a secured creditor. Section 10 did | Rolls on demurrer on the 4th inst., an important and novel not import into winding up the roles of bankruptcy wbich point was argued as to whether a husband was entitled to his give a preference to some debts ; it applied to creditors who curtesy under the following circumstances:-By his will a would get a dividend, not to persons who would be paid in testator gave a certain freehold estate to his daughter in fee full. Cotton, L.J., said that the point was really decided for her separate use. The daughter died before the testator by In re The Withernsea Brick Works (29 W. R. 178, L. R. intestate, but leaving issue and her husband her surviving. 16 Ch. D. 337, ante, p. 135). If section 10 had the effect By section 33 of the Wills Act it is provided that, "where suggested, it would have repealed pro tanto sections 87 and any person, being a child of the testator, to whom any real or 163 of the Companies Act, and this construction ought not personal estate shall be devised or bequeathed for any estate to be adopted unless the words were clear. When it spoke of or interest pot determinable at or before the death of such secured and unsecured creditors," it meant those creditors person, shall die in the lifetime of the testator leaving issue, who, at the commencement of the winding up, were secured and any such issue shall be living at the time of the death of or unsecured, and the landlord was not a secured creditor at the testator, such devise or bequest shall not lapse, bat that time merely becange be had a right to levy a distress shall take effect as if the death of such person had happened which he had not epsorced. And when the section said that immediately after the death of the testator, unless a contrary the bankruptcy rules as to debts proveable should prevail in | intention shall appear by the will.” JESSEL, M.R., was of winding up, it did not mean that a creditor who, in bank opinion under the above circumstances, and by reason of the ruptcy, would have had another right in addition to his operation of the above section, that the husband was entitled right of proof was to have that additional right also in a to his curtesy in respect of the freehold property devised to winding up.-SOLICITORS, Poole, Hughes, & Poole; Chapple, bis wife.-SOLICITORS, Blanco White; W. H. Herbert ; Welch, f Chapple.

Russell, Sons, f. Co.

COMPANY-VOLUNTARY WINDING UP-APPLICATION BY CREDITOR FOR COMPULSORY ORDER-PREJUDICE BY VOLUNTARY WINDING UP-COMPANIES Act, 1862, s. 145.-In the case of Re Pelham Publishing Company, before the Master of the Rolls on tbe 26th ult., the company bad passed resolations for a voluntary winding up, and a creditor now petitioned for a compulsory order. The petition did not mention the voluntary winding up, merely stating “it was alleged” such a winding up had taken place, and it also did not show that the petitioner was prejudiced by the voluptary winding up. According to the evidence in sapport of the petition, there was no allegation of any personal misconduct against the voluntary liquidator, and the only evidence apon which the petitioner relied was that he bad been induced to supply the company with paper by reason of the misrepresentations of the directors, and also that the liquidator bad sold some furniture and paper, wbich bad a short time previously cost over £100, for £25 to one of the contributories, and that the same contributory had the next. day sold the furniture for £30. There was no evidence that the sale was at an undervalue. JESSEL, M.R., was of opinion that the petition should have mentioned the volun. tary winding up, and also that it should have contained allegations showing that the petitioner was prejudiced by such winding ap. If those allegations had been omitted by a slip be sbould bave allowed an amendment, but, apart from the technical ground, the petitioner had shown no reason for his interfering with the voluntary winding, op. The liquidator appeared to have acted with diligence, and there were really no allegations of personal misconduct against him. The total assets were not stated to be more tban about £300, and it was quite plain, if he set the machinery of the court in motion, the only result would be that after some time there would be an application to him for a stay of proceedings, and an apportionment of the

WILL-GIFT UPON CONDITION_CELEBRATION OF DIVINE SERVICE-BREACH OF CONDITION-GIFT OVER. - In a case of Governors of Bethlehem and Bridewell Hospitals v. Ironmongers' Company, also before the Master of the Rolls on the 4th inst, the question was argued whether the plaintiffs were entitled to certain property in consequence of the breach of a condition under which the income bad been previously applied. By his will, dated the 10th of February, 1803, Sir Robert Geffery bequeathed a sum of £400 to the defendants upon trust to invest the same in the purchase of lands, to be settled for an allowance to some person to read and celebrate Divine service in the parish church of St. Dionis Backchurch, twice every day in the week, yearly and every year for ever, except Sunday and certain other holy days, at the hours and times then and theretofore used in the said church according to the rubric and liturgy of the Church of England; and the testator declared that the rents and profits of the lands to be purchased should be paid by the defendants to the minister or curate of the parish of St. Dionis who should read and celebrate Divine service in manner aforesaid. The will contained a proviso that, in case there should be any failure or neglect in reading of prayers in the parish church for more than three days together, then that the rents and profits of the said premises to be purchased should go and be paid to the plaintiffs for ever. The defendants had paid the income representing the bequest to the rector of St. Dionis until the parish church was pulled down in 1877, when a union of St. Dionis with certain other benefices was effected. It was contended by the plaintiffs that the condition had been broken, inasmuch as there had been a failure to read prayers for several years. JESSEL, M.R., was of opinion that the proviso might be read in two ways, either by reference to the previous part of the will, so that the reading of prayers must be in manner previ. ously pointed out, or literally, when the reading of any prayers would satisfy the proviso. Reading the proviso,

bowever, in either way, he was of opinion that there had been that her husband had, by the above documents and his a breach, as it was proved that between 1831 and 1854 there conduct constituted himself a trustee thereof for her ; but had been no services except on Sundays and certain holy the executors of bis will contended that it formed part of his days. He should, therefore, hold that the plaintiffs had personal estate bequeathed upon trust to themselves. There become entitled to the bequest, and order payment of the was no evidence in support of Mrs. Breton's claim, except future income to them after the costs of all parties as between that given by herself, which, however, was not contradicted. Bolicitor and client had been provided for.- SOLICITORS, Still Hall, V.C., said that he was reluctantly compelled by the & Son; S. Adams Beck; H. J. Godden.

monstrous state of the law to hold that the furniture, plate, &c., had not become Mrs. Breton's property. The gift could

not be supported as a declaration of trust by her husband in COMPANY-WINDING UP-LANDLORD-LEAVE TO Dis- her favour, for the words of the documents were those of an TRAIN FOR RENT-RENT ACCRUED DUE PARTLY BEFORE immediate gift. When an intending donor makes a mistake AND PARTLY AFTER COMMENCEMENT OF WINDING UP-AP as to the proper mode of carrying out his intention, the PORTIONMENT-COMPANIES ACT, 1862, ss. 84, 85, 87, 163.- court cannot impute to him an intention to adopt a correct In a case of In re The South Kensington Co-Operative Stores, 1 method, and, for the purpose of guaging the validity of such before Fry, J., on the 2nd inst., a question arose as to giving a gist as the present, there was no practical distinction beleave to the landlord of a company in liquidation to distrain tween the cases of a wife and a stranger.-SOLICITORS for rent. The petition for winding up the company was for all parties, Clarke g. Calkin. presented on the 27th of November, the winding-up order was made on the 10th of December. A quarter's rent of the premises occupied by the company accrued due on the 25th

CASES BEFORE THE BANKRUPTCY of December, and in respect of this rent the landlord asked

REGISTRARS. leave to distrain. FRY, J., held that the rent must be ap

(Before Mr. REGISTRAR HAZLITT, acting as Chief Judge.) portioned with reference to the date of the presentation of the petition, which was the commencement of the winding

March 9.-Ex parte Findlay, Re Collie. up, and that for the apportioned part of the quarter's rent,

F. & Co., being creditors of A. C. and W. C., bankrupts, for down to the 27th of November, the landlord must prove in

the sum of £5,000, in respect of the fraudulent misappropriation the liquidation, but that for the apportioned part, from the

of funds, were allowed to prove against the joint and separate 27th of November to the 25th of December, he was en

estates of the bankrupts for the amount, and subsequently, in

pursuance of an order of the court, F. & Co. elected to receive titled to be paid in full, and must be allowed to distrain 18;

dividends from the separate estates. unless the payment was made.-SOLICITORS, Still f. Son ; From these estates F. & Co. received twenty shillings in the Bridges & Co.

pound upon their debt; but the joint estate paid a dividend of le. 60. only in the pound to the creditors.

Held, that F. & Co. were not entitled to any interest upon COMPANY-WINDING UP-DISCRETION OF COURT-No | their debt until the joint creditors had received twenty shillings ASSETS-COMPANIES Act, 1862, s. 79.-In a case of In re in the pound. The Gurrington Slate Quarries, Fry, J., on the 1st ins.., Statement of facts submitted for the opinion of the declined to make an order for the winding up of a company, court by Thomas Dunlop Findlay and James Findlay, on the ground that it would cause unnecessary expense, and formerly trading as T. D. Findlay & Co., of Glasgow, that there were no assets to meet the expense. The whole of the

mercbante, and Mr. Jobn Young, the trustee of the company's assets had been mortgaged to trustees on bebalf of

property of the bankrupts. debenture holders, and the trustees had taken possession of

The bankrupts, Messrs. A. & W. Collie, suspended the assets. The petitioner was a debenture holder who had

payment on the 15th of June, 1875, and on the 30th of recovered judgment against the company in respect of in

June, 1875, filed in the London Bankraptcy Court & terest due on bis debentures. The petition was accordingly

petition for liquidation of their affairs, but at the first dismissed with costs.-SOLICITORS, Smith, Fawdon, & Low;

meeting of creditors held thereunder no resolutions were John Raven ; W. H, Roberts.

come to, and the said proceedings fell through.

On the 4th of August, 1875, a petition in bankroptcy VOLUNTARY GIFT-HUSBAND AND WIFE-DECLARATION

was presented against the above-named bankrupts, and on

the 19th of Aogost, 1875, adjudication was made. OF TRUST.-In an action of In re Breton, Breton v. Woollven,

Mr. John Young was, on the 6th of September, 1875, before Vice-Chancelor Hall on the 2nd inst., one of the questions for decision was as to the effect of a gift by a

appointed trustee of the property of the above-named husband to his wife of certain furniture and plate Major

bankrupts. Alexander Collie, in addition to being & Breton, who died on June 7, 1880, had in April, 1868, signed

member of the firm of Alexander Collie & Co., was also a and handed to his wife a document in the following terms :

partner in the firm of N. Alexander, Son, & Co., who were “This is to certify that there being now at Messrs. Maple

adjudicated bankrupts on the 8th of September, 1875. & Co.'s, 145, Tottenham-court-road, one hundred pounds'

T. D. Findlay & Co., by affidavita sworn on the 31st of worth of furniture belonging to me, I give the same to my

March, 1876, soogbt to prove against the joint estate of dear wise, Agnes A. Breton, absolutely and unreservedly,

the bankrople, Alexander Collie & Co., for the sum of for her own use and benefit ;" and, on June l in the same year,

£5,000, and also against the separate estate of the said he had written to his wife as follows:-“My dearest Wife,

Alexander Collie for the like eum, and against the I this day make you a present of the plate, &c., now at

separate estate of William Collie for the like som ; for Mappin & Webb's, and which they are taking care of for me,

tbat, by reason of the misappropriation by the said for your sole use and benefit. The sum I paid for it is

bankrupts, Alexander Collie and William Collie, of 20,000 £59 78. 16d." Ior mediately afterwards Major Breton and his

pieces of certain Manchester goods known as 39-inch wife went to reside in a house at Dulwich Villa, Forest Hill,

8 lbs. Grey Shirtings, Best China Quality, porobased by to which the furniture, plate, &c., to which the above docu

them in Ootober, 1871, in the joint accounts of T. D. ments referred, were removed. Other goods of the same

Findlay & Co. and the bankrupts, the said T. D. Findlay & nature were also bought and placed there, and on June 18,

Co. were obliged to pay, and did pay, two bills of 1868, Major Breton wrote and harded to his wife the follow.

exchange for £1,500 each, dated the 10th of Marob, 1875, ing letter :-"My dearest Wife, -Having previously made and due the 13th of July, 1875, and two other bills of over to you for your sole use and benefit a certain amount exchange for £1,000 each, dated 20th of April, 1875, and of furniture, plate, &c., I now present you with everytbing, due the 23rd of October, 1875, all wbich four bills wore furniture, linen, &c., plate, china, and glass, and all drawn by the bankrupts upon, and accepted by, T. D. jewellery now belonging to me at No. 1, Dulwich Villas, Findlay & Co., and paid by them at maturity, but ought Devopshire-road, Forest Hill. All this to be yours and to have been provided for and paid by the bankropts out yours only írom this date, June 18, 1868. This gift from of the proceeds of the sale of the said goods, whereof tbey your ever affectionate husband, Frederick Breton." Major were trustees for such parpose. Breton and his wife afterwards changed their residence, and Mr. John Young, the trustee, on the 17th of May, 1876, the furniture, &c., was removed to their new house, and by notice in writing, rejected the proofs of the said T. D. was there at the time of Major Breton's death. He had Findlay & Co, on the separate estates of Alexander Collie always spoken of and treated the property as being his | and William Collie, on tbe ground that T. D. Findlay & wife's, and she now claimed it as her own, on the ground Co.'s right of proof was against the joint estate of the bank. ropts oply, and not against the separate estates of the payment of interest: Warrant Finance Company's case bankrapts or either of them.

(L. R. 4 Ch. 643); Same case, No. 2 (L. R. 5 Cb. T. D. Findlay & Co, theredpon applied to this court by 88). Those cases are precisely applicable to the present. motion to reverse the decision of the trustee rejecting their The ground upon which proof was allowed against the proofs against the separate estates. Such applioation separate estates was that å fragd had been committed by oame before Mr. Registrar Morray, sitting as Chief Judge, the bankrapts: Ex parte Adamson (26 W. R. 193, L. R. 8 on the 26th of July, 1876, wbed, after hearing counsel on Ch. D. 807). Under the rule laid down by Lord Jagboth sides, Mr. Registrar Murray ordered that the decision tice Giffard foar per cent. is the amount of interest usually of the trustee rejecting the claims against the separate allowed. He also cited Phosphate Sewage Company v. estates should be reversed, and that the said proofs should Hartmont (L. R. 5 Ch. D. 394). be admitted for the sum of £5,000 against the separate J. Linklater, for the trustee.-The debt of Messrs. Findestates of Alexander Collie and William Collie, in addition

lay is not an interest-bearing debt, and the two cases of to the proofs for £5,000 against the joint estate : T. D.

Warrant Finance Company bave no application in bankFindlay & Co. not to be entitled to receive dividends upon

raptoy. There is no deoree in this case by which interest such proofs from both the joint and separate estates, but is given to Messrs. Findlay, and the 36th section does not before receipt of any dividends upon such proofs to eleot

apply. Rule 76 provides that interest may be allowed ander whether to receive dividends from the joint estate or to

certain cironmstances, but only to the date of the order of receive dividends from the separate estates.

adjudication, Urder rule 137 interest is allowable if & Pursaant to such order T. D. Findlay & Co. did on the surplus becomes payable to the bankrupt, which is not the 22nd of February, 1877, elect to receive dividends from case here. Even sopposing the debt bears interest, it is the separate estates on their proofs for £5,000 instead only up to the date of the order of adjudication : Ex parte of from the joint estate. T. D. Findlay & Co. on the Minchin (2 Glyn & J. 287), Ex parte Wood (2 M. D. & D. 23rd of February, 1877, received a dividend of five shillings 283, 5 Jar. 1115); Ex parte Clarke (4 Veg. 677), Ex parte in the pound on their said proof for £5,000 from the Reeve (9 Ves. 588). Separate creditors are not entitled to separate estate of the said Alexander Collie, and on the be paid interest on their debts subsequent to the adjudica23rd of February, 1877, a dividend of five shillings in the tion until the joint creditors have received twenty shillings pound on their proof for £5,000 from the separate in the poond : 2 Lindley on Partnership, ed. 1878, p. estate of the said William Collie, such dividends having 1195. In the present case it is impossible for the joint been deolared on the 9th of May, 1876.

creditors to get twenty shillings in the poond, or anyłbing Mr. Young on the 19th of June. 1880, declared a 1 approaching it: Ex parte Chandler (9 Ves. 35). The second and final dividend of 93. 3d. in the pound on the Warrant Finance Company's cases were discussad before separate estate of Alexander Collie, and on the same day

| Lord Hatherley in Ebbw Vale Company (L. R. 5 Ch. declared a second and final dividend of 78. 11d. in the

| 112), and his lordship beld that the jadgment of Lord pound on the separate estate of William Collie, but, as

Jastice Giffard was not intended to lay down any role, but such last-mentioned dividends, with the dividends already was simply a deolaration of what was the law. paid to the said T. D. Findlay & Co., exceeded the total

Stirling, in reply. amount of the proofs, Mr, Yooog paid, on the 5th of Mr. REGISTRAR HAZLITT.-This case seems to be a very July, 1880, to the said T. D. Findlay & Co. a further simple one, and has to be decided according to the rules dividend of five shillings in the pound from the estate and statutes in bankruptcy, and, with all respect, I do not of the said Alexander Collie, and a further dividend of think the cases of The Warrant Finance Company apply. five shillings in the pound from the estate of the said My learned colleague, Mr. Registrar Murray, bas allowed William Collie, making with the previous dividends the Messrs. Findlay to prove against the separate estates of the eum of £5,000, the amount of the said four bills, or 20s. bankrupts for £5,000, for a debt which has been indicated in the pound.

as being contracted by the fraud of Messrs. Collie. My The said T. D. Findlay & Co. received the said last

learned colleague allowed the proof itself, but nothing is mentioned 5s, in the pound from the estate of Alexander said about interest, and I must presume he did not think it Collie, and the said last-mentioned 59. in the pound from the was necessary to say anything. Messrs. Findlay have reestate of Wm. Collie by arrangement with the trustee,

ceived the £5,000 out of the separate estates, but at present without prejudice to their rights to receive interest upon the

the joint estate has paid only one shilling and sixpence in said £5,000 if they should be entitled to any interest.

the pound, and the creditors do not seem likely to get any. The dividend declared upon the joint estate amounts to

thing further, so far as I can see. The state of circumstances only 1s. 60. in the pound, and it is impossible for the joint

to which the rules apply does not arise in the present case; creditors to be paid 20s, in the pound, even if the surplos

and the wbole principle of the Act itself and the rules is the of the separate estates is carried over to the joint estate

same. I think Messrs. Findlay & Co. are not entitled to any without paying Messrs. Findlay & Co. interest on their

interest until the joint creditors of the bankrupts have reclaim.

ceived twenty shillings in the pound, and they must pay the T. D. Findlay & Co. claim to be entitled to receive

costs of the motion, dividends from both separate estates until they have been

Solicitors for Messrs. Findlay & Co., Murray, Hutchins, paid 20s, in the pound, and interest thereon at £4 per cent.

& Co. from the times when they paid the said bills until final pay

| Solicitors for the trastee, Travers-Smith & Braithwaite. ment to them.

The trustee contends that T. D. Findlay & Co. are not entitled to interest at all on their said proofs for £5,000, and that, even if entitled to interest at all, that they are not

The old police-court at Bow-street was used for magisso entitled until the joint creditors have received 20s. in the terial cases for the last time on Saturday. pound. It is agreed that the file of proceedings may be re At Pembrokeshire Quarter Sessions, held on Tuesday, 5th ferred to by either party, and the evidence used on the ap inst., the chairman stated that the controversy which that plication of T. D. Findlay & Co. to reverse the decision of court, in common with numerous other courts throughout the trustee in rejecting their proofs against the separate the country had with the Treasury, whether under the estates may be used by either party on the argument Prisons Act of 1877 imperial or local taxation was liable for hereio.

the cost of conveying prisoners to gaol, would shortly be The court is to be at liberty to draw inferences of fact. settled by an appeal, in which Sir Hardinge Giffard would The questions for the opinion of the court are :

argue against the Treasury. Are Messrs. Findlay & Co. entitled to be paid any and

The following are the dates and places arranged for what interest, and for what period in respect of their claim ?

holding the Spring Assizes on the Midland Circuit, wherein If so, are they entitled to be paid such interest before the

prisoners only will be tried :-At Aylesbury, on Tuesday, joint creditors receive 20s. in the pound ?

April 26, for the combined counties of Buckingham, Bedford, By whom, and in what manner the costs of and incidental

and Northampton; at Lincolu, on Saturday, April 30, for to this motion are to be paid ?

the counties of Lincoln and Nottingham; at Derby, on Stirling (R. Horton Smith, Q.C., with him), for Messrs. Friday, May 6, for the counties of Leicester, Rutland, and Findlay & Co.-We are entitled to retain the benefit of our Derby; and at Warwick, on Thursday, May 12, for the proofs antil our debt is completely extinguished by the county of Warwick.

« PreviousContinue »