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WILLING AND WILLIAMSON 1875. ^r—Twmm'mii^mimm Entered according to the Act of the Parlian.ent of Canada, in the year one thousand eight hundred and seventy-five, by Wau.va & W.ll.am.sov. in the office of tl,c Minister of Agriculture. HtiNTKR, Rose & Co., PitiSTERs, Toronto. TO THE HONOURABLE EDWARD BLAKE, Q.C., MINISTER OF JUSTICE FOR THE DOMINION OF CANADA, •>F HIS EMINENT ABILITIES AS A JURIST, AND DISTINGUISHED CAREER AS LEADER OP THE EQUITY BAR, ^ywrimr^mmmmi If^^ PREFACE. The first Edition of the Insolvent Act of 1875 is presented in the hope it will merit that cordial reception which I was led to believe a work on the subject would meet with, not only from the Profession, but likewise from the Mercantile Community. Every possible care has been exercised in annotating to give the latest Decisions of the English and Ontario Courts, and, in some cases of importance, full notes of the Decisions of the Courts of Quebec have been inserted. Under some of the divisions — such as " Composition and Discharge," " Dividends," and " Frauds and Fraudulent Preferences " — the notes of Cases are numerous and full, so they will be of advantage not only to the Legal Profession, but also to the non-professional enquirer, who can under- stand therefrom the principles by which the Courts are guided in adjudicating upon the various questions which come before them under the Bankrupt Laws. In the preparation of the Work, I have been greatly indebted to '* Robson's Bankrupt Law," which I cannot too highly commend as a treatise on the principles of Bank- ruptcy. In some few instances, I have availed myself of the Notes to " Edgar's " and " Popham's " Insolvent Acts» to the Editors of which I am ander many obligations. The greatest care has been bestowed on the Index, which will be found unusually copious, while the List of Cases cited has received equal attention in its preparation. Vlll PKKFACE. Every precaution has been taken to ensure correctness ; and an endeavour has been made, by careful annotations, to preserve the Work within moderate limits, so that it might be presented in a form which, it is hoped, will prove most generally useful. I have to expr^jTss my sincere obligations to George McNab, Esquire, Barrister-at-Law, for his careful co-opera- tion in bringing out the present Work, and through whose assistance the usefulness of the present Volume has been much enhanced. The Editor has to thank T. Mulkern and George E. Millar, Students-at-Law, for the care they have taken in the preparation of the Index and List of Cases. London, August 27th, 1875. H. MacMahon. mTR0J)UCT10N. The principle upon which the Law of Insolvency is founded is, that all an Insolvent's property belongs to his creditors, and should be distributed ratably amongst them ; and that, on doing this, a debtor should be released from all liability arising from debts contracted prior to his insol- vency, upon his complying with the requirements of the Statute. The Bankrupt Law was first introduced into England by the Statute 34 & 35 Hen. 8, c. 4, which was directed against debtors, whether traders or not, who sought fraudu- lently to evade the payment of their debts. Since that time numerous Acts have been passed in Great Britain for the relief of insolvent debtors ; but the Acts respecting bankrupts were expressly excepted from having any force in Canada when the laws of England were, by the 32 Geo. 3, c. 1, made the rule of decision in that Province. The commercial transactions of the Dominion have grown so large, that the general feeling amongst the mercantile community is, that an Insolvent Law should remain as a permanent enactment on the Statute Book. It is, there- fore, likely that, in accordance with the A'iews of the com- mercial classes, as conveyed to the Legislature through the Dominion Board of Trade, an Insolvent Act will hencefor- ward be recognised as a necessity in this country. The Insolvent Act of 1869 gave general satisfaction in its working, as the machinery by which the Law was carried rtiliilili r"Vi;."^'*r^ .rH3,-! X , INTRODUCTION. into effect was simple, and, with some few exceptions, estates were wound up at small expense to the creditors. A very few amendments would have effected all that was desired, and rendered the Act of 1869 one of the easiest worked Bankrupt Laws enacted by any Legislature. One of the amendments required to the Act of 1875 will be apparent on reading the case of Churcher v. Johnson, referred to in the Notes to Sect. 134, at page 205, and reported in 34 U. C. R., 528. Another amendment, much desired, is a provision preventing the barring of dower by a wife in her husband's lands from forming a valuable consideration between them for the conveyance by the husband to the wife of other lands then owned or after- wards acquired by the husband, so as to defeat the provi- sions of the Insolvent Act respecting voluntary convey- ances. m "■* 1 4 TABLE OF CONTE^NTfS. Introduction jj^ Table op Contents xi List op Cases ..../....'... xxi INSOLVENT ACT OF 1875. DIVISION I. Application of Act, 33. Who are Traders under this Act, 33, Proviso, 34. As to persons having been Traders, 34. Proviso, 34. Interpretation ; County, District, ^7. Official Assignee, 37. Assignee, 37. Official Gazette, 37. Court, 38. Judge, 38. Debtor, 38. Insolvent, 38. Notary, 38. Creditor, 39. As to voting composition, &c., 39. As to Creditors not affected by composition, 39. CoUocated, 39. ^ i , Partnerships and companies, 39. When a Debtor deemed Insolvent. Acts of Insolvency, acknowledging Insolvency, 40. Absconding, 40. Secreting effects, 41. Fraudulently assigning, 41. Conniving seizure, 42. Being imprisoned, 43. Making default to appear, 43. Disobeying rule, 44. Or decree, &c., 44. Making assignment, otherwise than under this Act, &c., 44. wMti XI 1 TABLE OF CONTENTS. ! Allowing execution to be unsatisfied, 45. Proviso as to costs, 45. Demand of Assignment. When Creditors may demand an Assignment, 4G. Form, 46. Affidavit required, 46, Creditors demanding assignment must elect a domicile, 46. Judge may annul demand if claims do not amount to $500, &c., 48. Or if stoppage be only temporary, 48. Proviso as to costs. 48. Judge may enlarge time for contestation or assignment, 49. Proviso, 49. When debtor's estate to become subject to liquidation, 49. Time for commencing proceedings limited, 50. DIVISION II. Writs of Attachment. Affidavits by parties demanding, 51. Writs of Attachments, 51. Form, 51. Concurrent writs, 51. Forms of proceeding, 51. Service of writ, how made, 53. And of concurrent writs, 53. Time for return of writ, notice of issue, 54. Duty of Assignee executing writ, 54. Assignee may break open house, &c., 55. DIVISION III. Assignments and Pkoceedinos thereon. Assignment when and to whom it may be made, 55. Form of Assignment, 57. Property and powers of Insolvent vested in Official Assignee, to whom assignment is made and first writ issued, 57. Conservatory proceedings, 58. Certain property excepted from seizure, 58. Insolvent to furnish statement of his liabilities, assets, «&c., 63. What it must show, 64. Petition by Insolvent to set aside attachment, 64. Hearing in such case, 65. Registration of assignment and transfer, 65. First meeting of creditors, how called, 66. Form, 66. Notice to each creditor by mail, 66. Proviso, 67. TABLE OF CONTENTS. XUl DIVISION IV. EXAMINATIOM OF INSOLVENTS. Who shall preside at meetings, 07. Insolvent to attend and be examined as to cause of failure especially, 67. Attestation &c., of examination, 68. Insolvent subject to further examination, 68. F isal to answer, &c. , to be contempt of Court, 68. I mination of wife or husband of Insolvent, 68. DIVISION V. AsSiaNEES AND INSPECTORS. Appointment of Official Assignee, 09. Ontario, 69. Quebec, 69. District what to be, 69. Security given by Official Assignee, 70. Recovery under court, 70. Additional security, 70. Responsibility, &c. , of Official Assignee, 70. Appcnntment of, and security given by Assignee, not Official, 71. What creditors only shall vote at meetings, 71. Claims not to be divided for voting, 71. Transfer of estate by Official Assignee, 74. Notice of Appointment, 74. Assignee not to act as agent of a creditor, 74. Exception, 75. Place for meetings, 75. Inspectors, their appointment, &c. , by Creditors, 75. Rennmeration of Inspectors ; they and Assignee not to purchase In- solvent's property, 76. Disposal of estate of Insolvent, 70. Objection to proposed mode of disposal of estate, 77. Hearing by Court or Judge, 77. Powers of Insolvent vested in Assignee, 78. Proviso : as to sale of entire estate, 78. Assignee to sue for debts due Insolvent, Ac, 79, If Insolvent sues for the same after assignment or attachment, 79. Partnership dissolved by insolvency of a partner, 81. Register to be kept by Official Assignee, 83. Assignee to o2)en separate acc(junt with each estate, 83. Deposit of Register by non-official Assignee, 83. Assignees under this or any former Act, must obtain discharge, and pay over balance to Receiver-General, with sworn account, 84. Assignee to bo paid only by commission on amount realized, 84. And actual necessary disbursements, 85. As to employing counsel, &c. , 85. Remuneration of superseded Assignee, 85. Assignee to call meetings on requisition, 85. Deposit and withdrawal of moneys of estate in Bank, 80. z PWIiWWBpililP ■«lMa XIV TABLE OF CONTENTS. Interest on deposits, 86. Penalty for non-distribution of such interest, 86. Assignee to produce bank books at muutings, &c., 86. Punishment for false entry in such pass book, 87. Estate, in whom vested on death of Assignee, 87. Final account and discharge of Assignee, 87. Obligation of Assignee, &c., 88. Power of Judge, 88. Penalty in case of neglect to present such petition, 88. Provisions of section 47, to apply to Assignees under former Acts, 89 . DIVISION VI. Composition and Dlsch/rgc. Meeting to consider composition and discbarge, how and when called, 89. Notice of meeting, 94. Discharge may be approved or not, 95. Proceedings when consent is obtained, 95. Certificate and what it shall contain, 95. Further certificate, 96. Probable ratio of dividend to be stated, 96. Application for confirmation of discharge, 97. Notice, 97. Notice how given, 97. Opposition allowed, 97. Confirmatioi; of discharge, 97. Affidavit by Insolvent to be produced, 98. When Insolvent shall not be entitled to confirmation of discharge, 99. Proper books must have been kept, 99. Proviso, as to certain provinces, 99, Proviso, as to fraud and fraudulent preferences, 100. Powers of Court or Judge 104. In certain cases character of discharge may be modified, 104. May be suspended or made second class, 1 05. If dividend is less than 33 per cent, discharge may be refused or sus- pended, 106. Deed of composition may be conditional, 106. If condition be not fulfilled, 107. Bank of creditors thereafter, 107. Deed of reconveyance by Assignee to Insolvent, 108. Its effect, 108. If deed of composition be contested, 108. Form of deed, 108. Efiect of confirmation of discharge — what claims affected, 108. Holders of negotiable paper unknown to Insolvent, 109. Discharge not to affect secondary liabilities, 112. " under this Act not to apply to certain debts or liabilities, 113. But creditors may accept a dividend, 114. 1 TABLE OF CONTENTS. xv Application to Court or Judge for discharge if not obtained from Creditors, 114. Proceedings on such application and powers of the Court or Judtje Suspension or classification of second class, 116. Discharge, «fec., obtained by fraud to be void, 116. DIVISION Vlf. Sale of Dbbts. Sale of debts the collection of which would be too onerous 117 Proviso, 117. ' CredUor may bo authorized to take any special proceeding at his own Proviso, 118. Rights of purchasers of debts due Insolvent, 118. No warranty, 118. DIVISION VIII. Leases. ^^""'dit/oSMi?^ '''''''^ ''''^"*^^^ *''*'' ''^"* *'' ^^ ^""^^ ' «° ^^at coJi- Other cases of lease, how dealt with, 120. Lessor claiming damages for termination' of the lease 121 How damages to be estimated, 121, Preferential claim of landlord limited in the several Provinces, 122. DIVISION IX. Sale op Real Estate. Sale of real estate of Insolvent, 123 In Quebec, 123. Proviso : postponement of sale by consent of Creditors, &c. . 124. Effects of sales of real estate, 124. ' Form of deed and terms, 125. Sales m Quebec may be subject to certain charges, 126. * olle Enchere, 126. Certificate of Registrar, 126. Code of Civil Procedure to apply, 127 Order of distribution, 127. Assignee's commission, 128. Balance, 128. XVI TABLE OF CONTENTS. DIVISION X. II I Dividends. Accounts, statements and dividends by Assignee, 129, 130. What claims shall rank on the estate, 130. Case of contingent claims provided for, 134. Arbitration. If award be rejected, 135. Rank and privilege of Creditors, 137. Proviso as to Creditors holding security, 137. Seizure in execution after appointment (jf Assignee : its effect, 137, 138. Proviso as to costs, 138. As to Creditors holding security for their claims, 139. Security not matured and Insolvent only secondarily liable, 140. If the security is on real estate or shipping, 147. ' Proceedings on filing of a secured claim, 148. Rank of several items of a Creditor's claim, 148. Oath of a Creditor as to non-payment of his claim, 148. Insolvent owing debts as a partner, 149. Allowance to Insolvent, how made, 151. As to costs in suits against Insolvent after notice under this Act, 151. Privilege of clerks, &c., for wages, 152. They may be employed, 152. Notice of dividend sheet and payment, 153. Contestation of claims by Assignee under Inspector's instructions, 154. Claims not filed, how dealt with, 154. Claims on dividends objected to, how determined, 155. Hearing and decision thereon, 150. Judgment Executory, 150. Creditors or Inspectors may order contestation of claims, &c. , 157. If there be any property of Insolvent under seizure at time of assign- ment or attachment, proceedings, 158. Unclaimed dividends, how dealt with, 161. Balance of estate (if any), to be paid over to Insolvent, 161. Notice pending delay, 161. Notices of meetings, &c., how given, 162. Cases unprovided for, 162. How questions shall be decided at meeting, 1 02. What matters may be voted upon at first meeting of Creditors, 163. Form and proof of claims, 1 04. Affidavits, before whom sworn, 104. Surrender of security by Creditor and effect thereof, 165. Set off, how allowed, 165. Service of papers under this Act, 168. Commission for examination of witnesses, 168. Subpoenas to witnesses, 168. Service of process, &c., 169. Disobedience of writs and process, how punishable, 169. Proof of default, 170. Expenses must bo tendered to person summoned as witness, «&c., 170. TABLE OF CONTENTS. xvn [feet, 137, , 140. Forms under this Act, 1 71. Foreign discharges not to bar debts contracted in Canada, 1 72. As to amendments in proceedings under this Act, 174. Provision in case of death of Insolvent, 1 74. Representatives how far liable, 174. Costs, on what property and in what order chargeable, 176. As to assets chargeable with mortgages, »fcc., 175. Provisions as to letters addressed to Insolvent by post, 176. ■Disqualification of Judge, 177. What Judge to act in such case, 177. Prothonotary to preside (in Quebec) in absence of Judge, 178 . Rules of practice and tariff of fees in Province of Quebec, how to be made, 178. And in other Provinces, 179. Present rules to remain until altered, 180. Assignee to be subject to summary jurisdiction of court, 180. Obedience, how enforced, 180. Registration of marriage contracts of traders, in Quebec, 181. •• this Act, DIVISION XI. tructions, 3., 157. )f asaign- Imprisonment for Debt. Insolvent in jail or on the limits, may apply to Judge for dis- charge, 182. Proceedings thereon, 182. Examinations of Insolvent and witnesses, 183. Judge may discharge him if the examination be satisfactory, 183. Proviso, 184. Minutes of examination to be kept, 184. Postponement in certain cases, 184. As to any subsequent proceedings, 184. Proviso, 184. ts, 163. DIVISION XII. Appeal. Appeal from any order of the Judge in Province of Quebec, 185. In other Provinces, 185. Appeal to be prosecuted within eight days, 186. If appellant does not proceed, 186. Reservation of amount of dividend contested, 189. DIVISION XIII. Frauds and Fraudulent Preferences. Gratuituous contracts within three months of Insolvency presumed fraudulent, 190. m^fmrr wmmw I ■' i! • • • XVlll TABLE OF CONTENTS. Certain other contracts voidable, 192 . Contracts made with intent to defraud Creditors to be void, 194. Fraudulent preferential sales, &c., to be void, 197. Presumption of fraud, 197. Certain payments by debtor void, 204. Proviso, 204. Transfer of certain debts by Insolvent, void, 205. Purchasing goods on credit by persons knowing themselves unable to pay, to be fraud, and how punishable, 20G. Proviso, 207. Fraud mxist be proved, 208. Award of imprisonment, 208. Assignees to be deemed agents for certain purposes, 32-33 V., c. 21, 208. Punishment of Assignee making wilful misstatement, 210. Certain acts by Insolvent to be misdemeanors, 210. Not fully discovering or not delivering property, books, papers, • &c.,211. Removing property, 211. Not denouncing false claims, 211. False schedule, 211. Withholding books, «fec., 212. Falsifying books, 212. Stating fictitious losses, 212. Disposing of goods not paid for, 212. Offences against this Act how tried, 212. Creditors taking consideration for granting discharge, 213. Penalty, 213. Punishment of Insolvent receiving money, &c., and not handing the same to Assignee, 21 3. Imprisonment for disobeying order, 214. Certain ■ iocuments to be evidence, 214. DIVISION XIV. Building and Jury Fund. Contribution to Building and Jury Fund in Quebec, 216. Governor in Council has certain powers, 215. DIVISION XV. Procedure in Case of Incorporated Companies. Provisions for Incorporated Companies, 215. Preliminary notice, 216. Inquiry by Assignee, 216. Company to exhibit books, &c., 216. Refusal to be contempt of Court, 216. TABLE OF CONTENTS. XIX )lves unable « 33 V ,c. 21, 0. oks, papers, After service of order, Company to hold property in trust, 210. Meeting of creditors may be called, 217. Resolutions thereat, 217 To be submitted to Judge, 217. Powers of Judge in relation thereto, 217. Order may be made by Judge, 217. * Receiver may be appointed, 218. To render account, 218. Further meeting within six months, 218. , Further delay may be granted, 218. If demands are unsatisfied, estate of company may be wound up, 218. Judge may modify order, 219 . Officers of company may be examined, 219. Remimeration of Assignee 8.nd Receiver, 219. Company may make assignment pending delay, 219. DIVISION XVI. General Provisions. Commencement of foregoing provisions, 220. Insolvent Acts of 1864 and 1869 and Acts amending them, Acts of B. C. and P. E. I. continued to 1st Sept. and then repealed, sav- ing certain proceedings and matters, 220. Proviso, 221. Procedure under this Act to apply and supersede that under said Acts, 221. Securities to remain valid, 221. Inconsistent Acts repealed, 222. Act to apply to all the Provinces of Canada, 222. Certain Provisions of 32-33 Vic, c. 16, to apply to Manitoba until 1st September, 1875, 222. Court and Judge, what to mean, 222. Short title, 222. ili LIST OF CASES. A. PAGE Abbott V. Hicks 166 " V. Burbnge 203 A. B. C. & D. , Alexander v . . . . 62 Acraman v. Bates 1 44 Adams, Ex p 36, 50, 146 " Rowley V 120 " V. McCall 202 " V. Sinclair & Mnir. ... 206 Addes V. Knight 150 ^tna Insc. Co. of Dublin, Re.. 176 Aikins, Re 162 Aldred v. Constable 203 Alexander v. A. B. C. & D 62 " Exp 74 Allair v. Clarkson 194 Allan V. Garratt, Et. Al. 57, 82, 92, 150 Allan V. Kilbee 151 Alsager v. Currie 131, 167 Alton V. Harrison 196 Anderson, Hammond v 61 Anderson, Re 105 Andrew v. Macklin 134 Angle, Ex p 73 Aple, Ex p 141 Archer, Mayo v 36 Archibald V. Haldane..79, 141, 199 Armitage v. Baker 93 Armston, Oldis v 94 Armstrong v. Armstrong 131 Aspinall v. Pickf ord 144 Atkins, Ex p 133 Atkinson v. Elliot 167 " V. Brindall 203 Atwood, Ex. p 144 " V. Partridge 136 Austin V. Gordon 93 Avery v. Hobbs 43 B. Bacon, Ex p 146 PAGE Bacon v. Douglass & Con- verse Ass 60 Badcock, Ex p 74 Badsly v. Ballard 192 Bage, Ex p 74 Bagnell v. Hamilton 36 Bailey, Cumming v 41 " Rossi V 93 " V. Bowen '. 94 " Exp 50 Bailie v. Grant 60, 36 Baker, Armitage v 93 " V. Painter 94 " Palmer V 115 " Re 149 " V. Dawbam 15 ) Baines, Smee v 167 Baldwin, Dixon V 61 V. Pell 93 '* V. Peterman 161 Ballard, Badsley v 192 Bamford, Ex p 50 Bank of Scotland, Ex p 131 " India, Naoroji v 167 " Montreal v.McWhirter 193 " " V. Little . .62, 80 ' ' British North America, Roev 205 " Australasia v. Flower. 146 Barber, Warner v 41, 42 " Parker V 35 " Woodv 134 Barnard, Ranking v 167 Coggsv 143 Bamett, Young v 196 Barnes, Starey v 131 Barrad v. Lawrence 36 Barratt, Ex p 146 Barry, Campbell v 199 Barton, Strachan v 192, 203 Bates, Exp 36, 73 xxu LIST OF CASES. Ill 'I' TAOE Bates, Acraman v 144 Bateson, Ex p 133, 134 Batson, Ex p 70 Bawsher, Davis v 144 Baxter, McLaren v 93 Bayfus v. Bullock 190 Bealo, Ex p 175 Beard, Ke 52 Bearo, Re , 18!> Chaliiier, Davidson v 00 Chambers, Williama v 00 " Marsh V 107 Chaiui)ort()wn v. Scott 144 Chai)iiul, Ex p 132 Chapoau Kongo, Ex p 72 Charles, Ex ji 51$ Cherry v. IJoultbeo 107, 108 Chippendale v. Tonilinson .... 00 Chisholni, WiUon v -. . . 81 Churcher v. Cousin.4 1!>1, 205 " V. .Johnston 205 City Bank v. Smith 201 City of (jilasgow Bank v. Mnr- doch 173 Claggett, George v 100 Clarkson, Harman v 34 " Allan V 194 Claridge, Hollis v. . 144 Cleghorn and the Judge of the County of Elgin and Munn, Re 152, 187 Clemmow v. Converse .... 109, 200 Coates V. J(«lin 203 Cobb V. Symonds 35 Cockshott V. Beiniett 90 Coggs V. Barnard 143 Cohn, Ex p 41 Cole V Daviea 42 Coleman, Ex p 131 Coles V. Turner 93 Collier v. Shaw (50 " Exp 153 Collins, Crawshaw v 82, 150 " V. Jones 1(57 Colter V. Mason 02 Commercial Bank, Maulson v . 173 ' ' Insurance Company V. Smith 59 Constable, Aldred v 203 Converse v, Michie 02, 139, 159 " Clemmow V 199, 200 Copeland, Ex p 73 I'AOK Corbie, Neilson v 80 Corrio, Onslow v 120 Coslott, Ex p 73 Cotton V. James 42 Cousins, Churchor v 191, 206 Cowan, Ro 90 Crabiree, Ex p 100 Cramp, Wilson v 44 Crankshaw, Rowland v 82 Crawford v. Findlay 142 Crawshay v. Hoinfray 144 Crawshaw v. (JoUins 82, 150 Cricket, Harvey v 82 Crombie v. Jackson 142, 181 Crosby v. Elworthy 195 Crosbie, Ex p 133, 134 Cross, Re W Crossley, Ex p 133 Cununings v. Roebuck (50 " v. Bailey 41 Currie, O'Brien v 30 " Alsager V 131, 107 Curtis V. Dale 199 Cuthbortson, White v 50 D. Dale, Curtis v 199 Dauglish v. Tennent 90, 134 Daniel, Ex p 34 Darling v. VVilson 159 Darvell v. Terry 196 Davenport, Ex p 140* Davidson, Ro 188 " V. Chalmer 00 " v. Perry ..94, HI, 160 " V. Napier 151 Davies, Cole v 42 " V. Stambank 132 Davis, Ex p 145 " V. SnoU 81 ** v. Bawsher 144 " et al V. Muir & Cham- berlain 190 Davison, Ex p 73 Dawbarn, Baker v 150 Dawson. Prince v 133 De Mattos, Worsley v 42 Denton, Owens v 107 " v. Peters 132 Dering, Ex p 35 Downey, Ex p 36 Dickason, Bize v 166 ' iiMM ' >PM ■MM * XXIV LIST OF CASES. !i!: 8 :l PAGE Dickinson v. Bunnell 110, 160 Dicks V. Richards 143 Dickson v. Bunnell 110, 160 '' V. Evans 167 Dixon V. Baldwin 61 " V. Yates 144 Dobson V. Lockhart 167 Dodds, Hood v 93, 94, 189 Douglas & Converse Asa., Ba- con V 60 Douglas, Henry v 62, 138, 159 Down, Fowler v 60 IJredge v. Watson 91, 94 Duchesnay, Tempest v. . . . 103, 208 Durable v. White 142 Duncan, Smart v 35 Durent, Ex p 72 Dutton V. Morrison 42 " et al, Tomlin v 93 E. Earle, Ex p 133 Easto, Butcher v 50 Easum v Cato 167 Eaton y . The Gore Bank 52 Ebers, ijallop v 136 Edge V. Worthington 141 Edwards, Ex p 72 '* V. Brewer 62 " Magnay V 120 " V. Newman 167 " V. Glynn 192 Edward v. Glyn 192 EUice, Lancaster v 94 Elliot et al. White v 58 Elliott et al, Hawksworth v. . . 62 " Atkinson v 167 Ellis V.Hunt 61, 144 Elton, Burroughs v 114 Elworthy, Crosby v ] 95 English, Ex p 131 " & American Bank, Exp 146 Evans'v. Brown 60 " Dickson V 167 F. Fair v. Buist 139, 159 Fairlie, Exp 133 Farrell, Jones v 144 " v. O'Neill 112, 115 Fentum v. Pocock 133 PACE Finch, Ex p 151 Findlay, Crawford v 142 Fisher v. Bridges 90 Fitzpatrick v J3ourne 94 Flower, Ex p 144 " Bank of Australasia v.. 146 Foster v. Mackinnon ... 133 " V. Taylor 173 Fowler v. Down 60 " V. Perrinetal 91, 113 Fox V, Hanbury 150 " Webbv 60 Francis, Ex p 1 45 Franklin v. Neate 143 " Scott v 144 Fraser v. Witt 61 Frear v. Gilmour 103, 208 Freeman, Thompson v 192 French v. French 195 French, French v 195 Frere, Ex p 60 Fry, Wilkins v 120 G. Garden, White v 107 Gardner, Ex p 41 Gardner v. Lachlan 144 Garrattetal, Re ....92, 101, 207 " Allan V 82 " etalAUan V... 57, 92, 150 Geller, Ex p 144, 145 George v. Claggett 166 General Discounting Co. v. Stokes 136 Gerrard, Grugeon v 146 Gibbs, Ex p 35 Gibson v. Bell 166, 167 Gibson v. Overbury 143 " V. King 34, 43 " V. Boutts 203, 204 " V. Musket 203 " Grestyv. 93 Giddings v. Penning t)4 Gilbert v. Lewis 81 Gilmour, Frear v 103. 208 Girling, Wells v 46, 53 Gittey, Troughton v 62 Gladwell v. Turner 1 32 Glass and Elliott, Ex p 106 Glen, Exp 93 Gloahe, Pease v 107 LIST OF CASES. XXV PAGE Glubry v. Heyward H4 Glyn, Edward t 192 Glynn, Poland v 203 Golloghly V. Graham 1 10 Goodman, Ex p 146 Goodson, Mackay, et al v. . .98, 114 Gordon, Austin v 93 " V. Ross 145 Gore V. Lloyd 43 Goro Bank, Eaton v 52 Goss, Robertson v 94 (iraham, Golloghley v 110 " V. Mulvaster 150 Grant, Bailie v 36, 50 Grellier, Exp 153 Green v. Swan 92 ' ' Isaacs V 94 Greenbnrg v. Ward 93 Greening, Exp 133 Greenshield's case 82 Green way. Ex p 53, 146 Greenwood, Hiscox v 143 Gregoiy, Cold well v 82 Gresky v. Gibson 93 Grey, Exp 73 " V. Hutch 59 Gribble, Martin v 93 Griffin, James v 61 Griffiths, Ex p 50 " V. Brown 122, 123 Grimadale, Ex p 73 Grugeon v. Gerrard 1 46 Gunmow, Belcher v 43 Gunn, Nicholson v 93 H. Haggarth v. Taylor 94 Haigh, Howden v 90 Haldane, Archibald v. .79, 141, 199 Halifax, Ex p 146 Hall, Ex p 133 " Blakeley v 139, 159 " Moss V 132 • ' ' Thomas v 35 " Walcottv 130 Hallen v. Homer 41 Hamilton, Re 69, 170 " ADavies, Lnxton v.. 72 " Bagnellv 36 '•' Worthington v 43 " Mason v 122 Hammond, Ex p 35 " V. Anderson 61 PAGE Tidmmond v. Hicks 41 Hanbury, Fox V 150 Handcock v. Haywood 150 Hankey v. Smith 167 ' ' V. Jones 35 Harman v. Clarkson 34 Hanson v . Meyer 144 Harradine, Pooley v 132 Harrison, Ex p 132, ]53 " Quids V 168 " Altcnv 196 Harvey v. Cricket 82 Hawkins, Kitchen v 94, 134 Hawksworth v. Elliott et al. 62, l34 Hayden, Re 139, 160 Haywood, Handcock, v 150 Heane v. Rogers 35 Hendry, Payne v 203 Henry, v. Douglas. . . .62, 138, 159 Herbert v. Sayer 60 Hernaman, Ex p 134 " Tucker V 107 Hersee v. White 37, 202 Heyward, Slubey v 61 Glubry V 144 Hicks, Hammond v 41 " Abbott V 166 Higgins, Ex p 73 " Marsh v 94 Hingston v. Campbell 66 Hiscox V. Greenwood 143 Hobbs, Avery v 43 Hodges, Belton v 36 Hodgkinson, Ex p 130 Hodgson, Ex p 145 Hodson, Smith v 166, 167 Holland, Cameron v 110 HoUis v. Claridge 144 Holmes v. Penny 195 " V. Tutton 141 Holroyd v. Whitehead 41, 42 Holt et al. Re 101, 208 Holyrood v. Whitehead 41, 42 Homfray, Crawshay v 144 Hood v. Dodds 93, 94, 189 Hooper, Exp 1 43 Homer, Hallen v 41 Hortoii, Langton v ] 44 Houlditcli V. Mihie 143 Howden v. Haigh 90 Hudson, Brown v 172 HuUman, Steels v 37 Hume, McGregor v (52, 201 XXVI LIST OF CASES. m if PAGE ! Humphreys, Ex p 153 Hunt, Ellis V 01, 144 " White V 120 Hurst, Re 78, 124, 129, 146 Hustler, Exp 133 Hutch, Grey V 59 Hyde v. Watts 134 I. Im. Thurn, Phillips v 133 Ince, Parker v 136 Isaacs V. Green 94 Isett V. Beetson 42 J. Jack man v. Mitchell 90 Jackson, Crombie v 142, 181 " V. Bowman 195 Jacobson v. Lambert 93 James v. Griffin 61 " Cottony 42 " V.Rice 143 Jamieson et al v. Kerr 80 Jellis V . Mountford 52 Jennings, Brooks v ! 3 Johnson, Ex p 144, 145 Johnston, Cburcher v 205 Jones, Re 101, 187, 207 ' ' Hankey v 35 " V. Farrell 144 " Kempv 173 " Belcher V 192 Joslin, Coates v 203 K. Kemp V. Jones 173 Kempton, Brown v 192 Kensington, Ex p 142 Kent V. Thomas 130 " V. Tompkinson 94 Kerr, Jamieson et al v 80 " Royal Canadian Bank v. 194 Keys V, Williams 1 41 Keysell, Topping v 42 Kilbee, Allan v 151 Kildner, Ex p 40 Kilner, Ex p 42 King V. Simmonds 34 " Gibson v 34, 43 " V. Smith 112, 115 Kingston v. Campbell 56 Kirkman v. Shawcross 144 Kitchen v. Burtsch 60 PACK Kitchen v. Hawkins 94, 134 Knight, Addes v 150 L. Lachlan, Gardner v 144 Lafone, Latham v 94 Lamb, Re. . . .80, 85, 100, 189, 205 Lambert, Ex p 133 ' ' Jacobson v 93 Lancashire and Yorkshire Rail- way Co. , Schotsman v. . . 61 Lancaster v. Ellice 94 " Botcherby v 44 Lane v. Trewson 143 Langs, Re 91 Langstatf, Re 161 Langston, Ex p 143 Langton v. Horton 144 La Riviere V. Whyte & McEvila 154 Larpent v. Biby 94 Larue, May v. 49 Latham v. Lafone 94 Lavender, Ex p 35 Law, Ex p 166 " Sowrey v 94 " Young & Co., Thurber v. 102 Lawrence, Re 177 " Barrad v 36 Lawrie v. McMahon 1 88 Lawson et al. Re 92 Learmouth, McWhirter V. . .56, 160 Lee, Exp 133 " V. Olding 60 Leeds v. Wright 61 Leers, Exp 1 46 Leroche v. Wakeman 60 Lewford, Bousiield v 167 Lewis, Gilbert v 81 " Ramsbottom v 41, 42 Leys «& Wife v. McPherson ... 196 Lindon v. Sharp 42 Lines, Smith v 80 Little, Bank of Montreal v. . .62, 80 Llansamlet Tin Plate Co, , Ex p . 1 36 Lloyd, Ex p 142 " Gore V 43 Lockhart, Dobson v 167 Lowden's Settlement, Re 60 Luce, Moore v. ! 46, 53 Ludbroke, Rogerson v ....... . 1 06 Luxton v. Hamilton & Daviea. 72 Lynch, Matthews v 141, 201 Lyon, Yarrington v 37 M LIST OF OASES. XXVll .... 144 .... 94 189, 205 ... 133 ... 93 G] .... 94 44 .... 143 .... 91 .... 101 .... 143 .... 144 Evila ir)4 .... 94 .... 49 .... 94 .... 35 .... 166 .... 94 er V. 102 -... 177 .... 36 .... 188 . . . . 92 .56, 160 .... 133 .... 60 .... 61 .... 146 . . . . 60 .... 167 . . . . 81 ..41, 42 ... 196 . . . . 42 .. 80 62, 80 xp. 136 ... 142 ... 43 ... 167 . . . 60 .46, 53 .. urn |es. 72 41, 201 ... 37 PAGE M. Mackay et al v. Goodson 98, 114 Mackinnon, Foster v 133 Macklin, Andrew v 134 Magee v. Rankin 120 Maggott V. Mills 50 Magnay v. Edwards 120 Makins, Ex p 168 Marsh v. Chambers ... 167 Marsh v. Higgins 94 Marshall, Ex p 135 Martin V. Gribble 93 " V. Brunellet al....94, 113 " et al, Tessier v . 104 Marwood, Small v 134 Mason, Colter v 62 " V. Hamilton 122 Massie, Shaw v 94, 111 Masson, Phillips v 173 Matthews v. Lynch 141. 201 " Sharp V 42, 52 Manlson V. Commercial Bank.. 173 Mavor v. Payne 53 May V. Larue 4!) Mayo V. Archer 36 Metcalf, Ex p 133 Melbonrn, Ex p 131 Mellon V. Nichols 8] Merrick v. Sherwood 37 Meux V. Bell l44 Mew, Re, Ex p., Udall 106 Meyer, Hanson v 144 Meyers, Ex p J 36 " V. Meyers 160 Meymot, Ex p 35 Michie, Converse V 62, 139, 159 Middleton v. Mucklow 53 " Waughv 94 Miles, Ex p • 7(; Millikan v. Brandon 35 xMills, Briarlot v 93 " Maggott V 50 Milne, Houlditch v 143 Minton, Ex p 91 Mitchell, Ex p 130 " Jackman v 90 " Rabbitt v 144 Moffatt, Ex p 144, 145 •' and the Sheriff of the County of York, Re 15!) Molineux, Ex p 73 Moore, Ex p 145 I'AUK Moore v. Luce 46, 47, 53 Morgan, Exp 94 " V. Brundrett 203 " V. Brunnell 192 Morgan Insurance Co. v. Whyte and Biron 137, 176 Moris, Exp 73 Morris v. Bethell 133 Morrison, Dutton v 42 Morse, Ex p 73 Moss, Re 60 " V. Hall 132 Moule, Ex p 35, 36 Mountford, Jeleis v 52 Mowbray, Exp 133 Mucklow, Middleton v 53 Muir and Chamberlin, Davis et al V 195 Mul vaster, (iraham v 150 Murdoch, City of Glasgow Bank V 173 ATusket, Gibson v 203 Mutrie, Ex p 40, 42 M.J. McCall, Adams v 202 McCallum, McDonald v 195 McCarthy, Patterson v 139, 159 McDonald v. McCallum 195 McFarlanev 191 McDougall, Sinclair v 159, 160 McFarlane v. McDonald 191 McGregor v. Hume 62, lIOl Mclnnis v. Brooks 47 McKeand et al, Robinson v. . . 172 McKenzie, Re 62 McKenzie et al. Re 188 McLaren v. Baxter 93 McLean v. McLellan 91 McLellan, McLean v 91 McMahon, Lawrie v 188 McPherson, Leys & Wife v. . . . 196 " V. Reynolds 199 McRae, Exp 134 " Re 136 Mc Whirter, Bank of Montreal v. 1 93 " Burke v 62, 80, 181 " V. Leariiiouth . .56, 160 " V. Royal Canadian Bank 200 " V. Thome ....198, 201 ■MMMii XXVUl LIST OF CASES. N. ?AOE Naoroji v. Bank of India ..... 167 Napier, Davidson v 151 Neate, Franklin v 143 Neilson v. Corby 80 Nettleship, Ex p 143 Newman, Re 105 " Edmerdsv 167 Newnham, Stevenson v 107 Newton, Simpson v 79, 154 " V The Ontario Bank 57, 191 Nichols, Mellon v 81 Nicholson v. Gunn 93 " Wigfieldv 94 Nicolson, Proctor v 144 Nixon> Sutherland v 37 Nunn, Williams v 41 O. O'Brien v. Currie 36 Oldfield v. Belcher 144 Olding, Lee V 60 Oldis V. Armston 94 Oliver, Exp 90 O'Neil, Farrell v ] 12, 115 Onslow V. Corrie 120 Ontario Bank, Newton v. . .67, 191 Oppenheim v. Russell 144 O'Reilly v. Rose 78 Oriental Fin. Company v. Over- end 132 Osborne, Ex p 40, 41 ". Silkv 60 Oulds V. Harrison 168 Outwaite, Wentworth v 61 Overbury, Gibson v 143 Overend, Oriental Fin. Com- pany V 132 Owens, Re 101, 188, 207 " V Denton 167 P. Painter, Baker v. 94 Palmer v. Baker 115 Parker v. Barber 35 " V. Ince 136 Parr, Re.. 100, 187 Parsons, Re 106 Partridge, Atwood v 136 Patent Derrick Co., The Thames Iron Works v 143 Paterson, Ex p 50 Patman v. Vaughan 35 PAGE Patterson, Ex p 35 " Windham V. .. 40, 41, 42 "v. McCarthy 139, 159 Payne v. Hendry 203 " Mavor v 53 Peacock, Ex p 146 Pearce, Ex p 167 Pearse, Re - . 106 Pearson, Ex p 73 " Rawlinson v 34, 50 Pease v. Gloahe 107 Pedder, Ex p 145 " V. Preston 167 Pell, Baldwin V 93 Penning, Giddings v 94 Penny, Holmes v. 195 Perkes, Ex p 74 Perrin, et. al.. Fowler v.. . 01, 113 " V. Wood 142 Perry, Re 98, 109 " Davidson V 94, 111, 160 Perryer, Ex p 73 Peterman, Baldwin v 161 Peters, Denton v 132 PhiUips, Ex p 131, 132 " v. Im. Thurn 133 " V. Masson 173 Phipps, Ex p 35 Pickford, Aspinall v 144 Pocock, Fentum v 133 Poland v. Glynn . 203 Pooley, Harradine v 132 Pott V. Turner 35 Powell, Exp 133, 134 Prescott, Ex p 146, 167 " Sneev 61 Preston, Pedder v 167 Prettie, Belcher v 192 Priddy, Ex p 36 Prince v. Dawson 133 Proctor, Rhode v 132 " V. Nicolson. 144 Pulling V. Tucker 44 R. Rabbitt v. Mitchell 144 Ramsbottom v. Lewis 41, 42 Rankin, Magee v 120 Ranking v. Barnard 167 Rawles, Ryal v 144,167 Rawlings, Exp 94 Rawlinson v. Pearson 34, 50 Reader, Ex p vp. 745 ; Ex parte Moule, 14 Ves. 603 ; Ex parte Bryant, V. & B. 211 ; Ex par'e Lavender, 4 D. & C. 487 ; Ex parte Patterson, 1 Rose, 402 ; Patnutn vs. Va\tf Disobey- ing rule. Or decree, Making assign- ment otherwise than under this Act, &c. INSOLVENT ACT OF 1876. examined as to his debts under any statute or law in that behalf; h. Or if he wilfully refuses or neglects to obey or comply with any such rule or order made for pay- ment of his debts or of any part of them ; i. Or if he wilfully neglects or refuses to obey or comply with an order or decree of the Court of Chancery or of any of the judges thereof, for pay- ment (x money. j. Or ii he has made any general conveyance or assignment ol his property for the benefit of his cre- ditors, oth ?rwise than in the manner prescribed by this " .] or if, being unable to meet his liabilities in full, be i^ kes any sale or conveyance of the whole or the mail; part of his stock in trade or of his assG vvithout the consent of his creditors, or without satiBi/injr th .h -"laims. An assignment for the beneBt of creditors not made in accordance with the Act is an act of insolvency, and void as against an execution creditor or the Official Assignee appointed in compulsory proceeding under the Act after such proceedings are taken if finally sustained (Wilson \b. Cramp, 11 Grant 444, approved of ; Thome vs. Torratict, IG C. P. 445, affirmed in appeal 18 C. P. 29). Such proceedings render the assignment absolutely void as against cre- ditors of the insolvent, so as to let in intermediate execution creditors (S. C. 16 C. P. 446). One of two partners, a few days before an attachment against both, under the Act of 1864, had issued, assigned his estate for the benefit of his creditors. Held void as against th§ official assignea ( Wilson vs. Stephen, son, 12 Grant 239). ^, If the deed is delivered by the debtor merely as an escrow, it will not be an act of bankruptcy {Botcherby vs. Laticaster, 1 Ad. & E. 77 ; Pulling & Tucker, 4 B. & Aid. 382). The only creditors who will be in a position to take advantage of this act of bankruptcy are those who have not signed or becomo parties to II WHEN A DEBTOR DEEMED INSOLVENT. 40 the deed of assignment for the benefit of creditors (Re a disputed adjudi- cation, 2 L. T. N, S. 90 Bank). If a debtor execute a deed of assignment to trustees for the benefit of creditors, he commits an act of bankruptcy, although the trustees do not assent thereto and refuse to execute the deed (Ex parte Slann, 6 L. T. N. S. 400). Held that this section does not apply to assignments made before Ist of September, 1864. . An assignment made by a trader by way of mortgage of his stock and implements of trade, where such assignment does not convey one-half of estate is not per se an act of bankruptcy, though his business may be stopped thereby (Young va. Waiid, 8Exch. Rep. 221). This Act of Bankruptcy mentioned in this and preceding clauses can only be taken advantage of, to place an estate in compulsory liquidation, within three months after the assignment has been made See section, 8 infra. An assignment intended to be made under the voluntary clauses of this Act, might from some entire omission of a prescribed proceeding, be an act of bankruptcy under this section ; and see notes to sub-sections B. t& C. of this section, and notes to sections 130, 131, 132 and 133. k. Or if he permits any execution issued against Allowing him under which any of his chattels, land or pro-tobeunsa- perty are seized, levied upon or taken in execution, to remain unsatisfied till within four days of the time fixed by the Sheriff" or officer for the sale thereof, or for fifteen days after such seizure ; subject how- ever, to the privileged claim of the seizing creditor for the costs of such execution, and also to his claim Prov-iso as for the costs of the judgment under which such execution has issued, which shall constitute a lien upon the effects seized, or shall not do so, according to the law as it existed previou8#to the passing of this Act, in the Province in which the execution shall issue. to costs. 4. If a debtor ceases to meet his liabilities gene- When cre- '^ . ditore may rally as they become due, any one or more of his demand T'l'P''"'* ■MM 46 ..^ i an assign- ment. Form. Affidavit required. Creditors demand- ing assign- ment must elect a domicile. INSOLVENT ACT OF 1875. creditors for unsecured claims of not less than one hundred dollars each, and amounting in the aggre- gate to live hundred dollars, may make a demand upon him either personally or at his chief place of business, or at his domicile, upon some grown up person of his family or in his employ (Form A.), requiring him to make an assignment of his estate and effects for the benefit of his creditors. But the said demand shall not be made until the creditor or creditors making the same shall have filed with the clerk or prothonotary of the court, in which the pro- ceedings in liquidation ("if any) will be carried on, his or their affidavit verifying his or their debt or debts, and that he or they is not or are not acting in collusion with the debtor, or to procure him any undue advantage against his creditors. The creditor or creditors making such demand of assignment shall in such demand elect and appoint a domicile or domiciles, respectively, within the dis- trict or county in which such affidavit is filed, at which service of any answer, notice or proceeding may be served on him or them ; and the said cl^rk or prothonotary shall keep the original and give a certified copy to the creditor or creditors ; and such copy shall|be annexedjto the notice served on the debtor. As to who is a ' 'Creditor," see Moore vs . Lwe, 18 U. C. C. P. , 446. If a surety has actually paid money foi^his principal, he is a '* creditor," and can make the demand (Ex parte Rogers, D. & 0., 623) ; but it is other- wise, if he is under a mere liability to pay {Oarratt vs. Austin,, 4 Taunt. 200). A debt tainted! with fraud or founded on an illegal consideration, will not supportfa demand, so as to put a debtor into compulsory liquida- tion (Wells VB. CHrling, 1 B. & B., 447). A creditor whose debt is not yet due may proceed against his debtor WHEN A DEBTOR DEEMED INSOLVENT. 4T who is insolvent, as he might have done if his debt had been overdue. But in this case, it appearing that the debtor did not owe more than $100 beyond this debt, none of which was at the time due, and a portion not payable for several years, the Court directed that he should be allowed further time, to shew, if he could, that he was not in fact insolvent, and so not liable to have his estate placed in compulsory liquidation (In re Moore vs. Luce, 18 C. P. 446). A trader having ceased to meet his liabilities a demand was served upon him on 31st January, 1865, requiring him to make an assignment. On 6th February — the 5th being on Sunday— an order was granted for an attach- ment which issued. One of the affidavits filed on application for attach- ment was sworn to on 4th February. On an application to set aside the Writ and all proceedings for irregularity, it was held 1. That the order for the issuing of the Writ was not made too soon. 2. That it was immaterial that one of the affidavits was made within the five days allowed for petitioning under sub-Sec. 3, or making an assign- ment in accordance with the demand. 3. That the attachment should have been endorsed with a statement that the same was issued by order of the Judge of the County Court, but an amendment was allowed on payment of costs by the plaintiflf, 4. Objections that the affidavit of two credible witnesses was not filed at the time of issuing attachment, that the proceedings were not taken three- months, &c., and that sufficient time was not left to give notices required by the Act for taking proceedings under a voluntary assignment were overruled (Mclnnis vs. Brooks, 1 L. J. N. S. 162). The clauses of the above section requiring a creditor to file an affidavit with the Clerk or Prothonotary verifying his debt and negativing collu- sion with the debtor before a demand can be made is new. The affi- davit required to be made and filed with the Clerk or Prothonotary may be " made by the party interested, nis agent or other party having a per- sonal knowledge of the matters therein stated." See Sect. 105. A certified copy of the affidavit filed with the Clerk or Prothonotary must be obtained and annexed to the demand before the same is served on the debtor. The clause requiring a domicile to be appointed by the creditor in the county where such demand is served, at which papers may be left for ser- vice on him is new. For form of affidavit verifying debt and form of demand with notice of domicile, see Forms Nos. 1 & 2. I 8 m ■MMi 48 Judge may annul de- mand if claims do not amount to $500, &.C. Or if stop- page bo only tem- porary. Proriso : iw to'costs. INSOLVENT ACT OF 1875. S. If the debtor, on whom such demand is made, contends that the same was not made in conformity with this Act, or that the claims of such creditor or creditors do not amount to one hundred dollars each, or to five hundred dollars in the aggregate, or that they were procured in whole or in part for the pur- pose of enabling such creditor or creditors to take proceedings under this Act, or that the stoppage of payment by such debtor was only temporary, and that it was not caused by any fraud or fraudulent intent, or by the insufficiency of the assets of such debtor to meet his liabilities, he may, after notice to such creditor or creditors, but only within five days from such demand, present a petition to the judge, praying that no further proceedings under this Act may be taken upon such demand, and, after hearing the parties and such evidence as may be adduced before him, the judge may grant or reject the prayer of his petition, with or without costs against either party ; but if it appears to the judge that such de- mand has been made without reasonable grounds, and merely as a means of enforcing pajrment under colour of proceeding under thisAct, he may condemn the creditor or creditors making it, to pay treble costs. This section is a re-enactment of the 15th section of the Act of 1869. Under this section it wonld appear that before the debtor could bring an action, it would be necessary for him to present the required petition to the Judge, and all the Judge is empowered to do is to award treble costs, should the petition be substantiated. Under the English Act, the Court is authorised to award damages for injury sustained by a malicious or un- founded petition. It is presumed, however, that the fact of the Judge having awarded treble costs, would not prevent the creditors from being liable on an action against them for damages, for maliciously abiiaing the provisions of DEMAND OF ASSIGNMENT. 49 the Act. The Court cannut allow the petition to be presented after the five clays, even when it has been alleged that the neglect arose through an error on the part of the defendant's attorney, and that the defendant had a good defence (May vs. Larue, 10 L. C. Jurist, 113). 6. If at the time of such demand the debtor -vras Judge m»y absent from the Province wherein such service was timeTr made, application may be made after due notice totatlon or the creditor or creditors, within the said period of ^n^' five days, to the judge on his behalf, for an enlarge- ment of the time for either contesting such demand or for making an assignment ; and thereupon, if such debtor has not returned to such Province, the judge may make an order enlarging such period and fixing the delay within which such contestation or assign- ment shall be made ; but such enlargement of time Provigo may be refused by the judge if it be made to appear to his satisfaction, that the same would be prejudi- cial to the interest of the creditors. f.'ii This is a re-enactment of the 16th section of the Act of 1869, with the exception that under the above section, the debtor can obtain an enlarge- ment of the time for contesting the creditors' demand, as well as for mak- ing an assignment. 7. If such petition be rejected, or if, while such ^^^^,^ petition is pending, the debtor, without the leave of estate to , , •!_ J become the judge or otherwise than on the terms prescribed aubject to by him, continues his trade, or proceeds with the tion. realization of his assets, or if no such petition be pre- sented within the aforesaid time, and the debtor during the same time neglects to make an assign- ment of his estate and effects for the benefit of his 4 60 INSOLVENT ACT OF 187o. creditors, as hereinafter provided, his estate become subject to liquidation luider this Act. shall This section is similar the I7th section of the Act of 1800, except that that suction does not contain the words, " irifhoiU llu. leave of the Jiulge or othcrwixe tluxn oit. tlie terms prescribed bij him." ^ill Time for 8. N o such proceedings as aforesaid shall be taken comrnenc- ^ ing iirn. under this Act to place the estate of an insolvent in cet'dings , . . , . limited, liquidation, unless the same are taken within thfee months next after the act or omission relied upon as subjecting such estate thereto ; nor after a writ of attachment in liquidation has been issued while it remains in force ; nor after an assignment has been made under this Act. Under the old bankrupt laws in England a man might be made a bank- nipt as a trader after he had ceased to trade in respect of a debt con- tracted or subsisting during the trading (Butcher vs. Easto, 1 Dang. 295 ; Bailie vs. Orant, 9 Bing 121 ; Mcujyot vs. Milljs, 1 L. Raym. 286) ; and the act of bankruptcy might be committed after the trading had ceased {En- parte Bamford, 16 Ves. 453 ; Bailie vs. Grant, supra ; Ex parte Griffiths, 3 D. M. «& G. 174 ; Ex parte Adarrut. 3 De G. & J. 70). It has been held that the English Bankrupt Act of 1869 has not a retrospective effect and that a man cannot be made a bankrupt as a trader unless he was a trader at the commencement of the Act or became one subsecjuently (Ex parte Bailey, L. R., 13 Eq. 314.) As to what amounts to a ceasing from trading see (Ex parte Batcrsou, 1 Rose, 402 ; Ex parte Caruly, 216, 367 ; Eawlinson vs. Pearson, 6 B. & Aid. 124; Robson, 2 Ed. 100). Althougli this section provides that proceedings must be taken within three months after the act or omission relied upon, it should be remarked that as to the second act of bankruptcy mentioned in section three, it may be a continuing one — de die in diem ; for any one remaining abroad or concealing himself within the Province with intent to defeat or delay hia creditors, commits a continuous act of bankruptcy nntil he comes back or discovers himself. It is probable that the acts of negligence in section three, marked g. h. and i., are continuous acts of bankruptcy as long as WUITS OF ATTACHMENT, KTC. 51 te shall t. iccept that the Jiulge be taken )lvent in lin thj-ee ;d upon jr a writ jd while aent has Ao a bank- debt con- fang. 295 ; ,) ; and the leased {£:>• lie Gri^tha, been held effect and i,s a trader (Ex parte [om trading Rawlb>,soii, icen within I remarked ree, it may I abroad or ■ delay his Les back or in section las long as he debtor neglects to comply with the rides or orders therein mentioned (Edgar, Ed. of 18G9, p. 54.) WRITS OF ATTACHMENT, ETC. 9. Any creditor upon his affidavit, or that of his Atfidavitn clerk, or other duly authorized agent, that a trader demandiiip is indebted to him in a sum provable in insolvency of not less than two hundred dollars, over and above the value of any security which he holds for the same, and provided the affidavit or affidavits filed disclose such facts and circumstances as will satisfy the Judge or Prothonotary of the Superior or County Court, in the county, province, or district, as the case may be, in which such trader has his chief or one of his principal places of business, that such trader is insolvent, and that his estate has become subject to liquidation under the provisions of this Act, ami that he does not act in the premises in col- writ of lusion with such trader, nor to procure hin my un- ment. due advantage against his creditors, (Form B) shall be entitled to a writ of attachment (Form C) against Foi'i,. the estate and effiacts of such trader, addressed to the Official Assignee of the county or district in which such writ shall issue, requiring such Official Assignee to seize and attach the estate and effects of such trader, and to summon him to appear before the court or a judge thereof on a day therein men- tioned, to answer the premises. Concurrent writs Concurren of attachment may be issued when required, ad- dressed to the Official Assignee of other counties or districts in any part of the Dominion other than the county or district in which the same shall be issued. Such writs shall be subiect as nearly as can be to ^""n" ?^ ' •' proceeding Mi m ^pmioini """-''-*^'"'^""""" " ""■* ^•♦■,. iS INSOLVENT ACT OF 1875. the rules of procedure of the court in ordinary suits, as to their issue and return, and as to all proceed- ings subsequent thereto before any court or judge. This section covers the same ground as the 19th and 20th sections of the Act of 1869, and directs that the attachments be issued to the assignee in- stead of the sheriff, as provided by the Act of 1869. The 20th section of the Act of 1869 required two credible persons to prove facts as to insolvency ; the above section only requires the affidavit of the creditor, his clerk, or duly authorized agent. Hence it is not necessary to refer to the decisions as to the number of persons relied upon to constitute the acts of insolvency. Under the Act of 1869, it was held that the form of affidavit (F) should be followed (Sharp vs. Matthews, 5 P. B. 10 Chamb). But see sec. 49 of the Administration of Justice Act of 1873, Ont.. Where a trader in Out. be- comes insolvent, and an attachment in insolvency is issued to the Sheriff of the county in which he resides, the County Judge can issue another attachment to the Sheriff of any county in Ont. , or of any district in Que- bec in which the insolvent has property {Re Beard. 16 Grant, 441.) For the meaning of the word " creditor" see notes to sec. 4. In an action for maliciously issuing an attachment, the fact of the affidaArit of the defendant's agent, as to the removal of the goods, not being cor- roborated by two witnesses as required by the Act, is nut sufficient of itself to support, the action (£af the meeting, not to that of the assignment {McWhirter vs. Learmo'ith, 18 C. P. 136). Held that the plaintiff having proved his claim before the assignee, and having obtiuned an order in this court to set aside the Insolvent's dis- ASSIGNMENTS AND PROCEEDINGS THEREON. 57 charge in the Insolvent Court, with costs to be paid to him out of their estate, was precluded from objecting that the assignee was not duly ap- pijinted {Allan vs. Garrait et al, 30 Q. B. 165). Where a debtor assigns to an official assignee who has not been duly iippointed, but the creditors generally accept and act upon the asssign- iiient. Qucere — whether the irregularity in the appointment can be set up by an individual creditor as rendering void the assignment {Newtmi, vs. The Ontari(, Bank, 13 Grant, 652). 15. The assignment mentioned in the next pre- Fop' of ceding- section may be in the form E ; and in the ment. Province of Quebec, the deed of assignment may be received by a notary in the authentic form. (;-, 'b Hi. Whenever an Insolvent shall have made an assignment, and in case no assig-nment shall have been made, but a writ or concurrent writs of attach- ment shall have issued as provided for by this Act, such assignment or such writ or writs of attachment, as the case may be, shall vest in the Official Assignee of the county or district wherein the same shall have issued, all right, power, title and interest which the insolvent has in and to any real or personal property, including his books of account, all vouchers, letters, accounts, titles to property and other papers and documents relating to his business and estate, ail moneys and negotiable papers, stocks, bonds and other securities, and generally all assets of any kind or description whatsoever which he may be pos- sessed of or entitled to up to the time of his obtain- ing a discharge from his liabilities, under the same charges and obligations as he was habie to with regard to the same ; and the Assignee shall hold the same in trust for the benefit of the insolvent and his Property and fowers I'f iisolvent vented in Official Assignee to whom assi^Ti- ment is made and first Writ issued. Jim 58 INSOLVENT ACT OF 1875. ' 1^ .,-, Conserva' tory pro- ceedings. Certain property excepted from seizure. creditors, and subject to the orders of the court or judge ; and he may upon such order and befori* any meeting of the creditors, institute any con- servatory process or any proceeding that may be necessary for the protection of the estate ; he may also, upon such order, sell and dispose of any part of the estate and effects of the insolvent which may be of a perishable nature; such assignment or writ or writs .of attachment shall not however, vest in the assignee, such real and personal property as are exempt from seizure and sale under execution, by virtue of the several Statutes in that case made and provided in the several Provinces of the Dominion respectively, nor the property which the insolvent may hold as trustee for others. Section 10 of the Act of 1869, pointed out what property of insolvent vested in the assignee under an assignment. The following cases are im- portant as showing what passes to the assignee under the Act of 1875 : — The plaintiff having held the defendant in the suit to bail, recovered a verdict for slander, for enticing away and detaining his wife, and for as- saulting her. Before recovering judgment, he made an assignment under the Insolvent Act, and he then sued the bail on their recognizance, not having yet obtained his final discharge. The defendants set up the rights of the assignee. Held on demur that the plaintiff was entitled to recover, for the causes of action, being for pure personal wrongs, did nr freight (^rfioards vs. Brewer, 2 M. & W. 376). It has been held in Haivksimrth vs. Elliott et al, and Brown, assignee in appeal in Quebec, that the delivery of goods purchased in Great Britain by the insolvents, merchants in Montreal, to the agent of the latter in Liverpool, deprived the vendor of the right of sto])page in transitu. Where the Assignee and creditors of a bankrupt who has not obtained his discharge allow him to trade or contract debts without their interfer- ance or claim, it falls within the principle of a man having a lien standing by and allowing another to take a new security whereby he is [jostponed, and the subsequent creditors of the bankrupt will be preferred to the creditors under the bankruptcy ; Trowjhtoit vs. Oittey, Atnb. 630. When the goods of " A " having been seized by the Sheriff under an execution against B, had been handed over by the Sheriff to the Assignee to whom B. had made a voluntary assignment in insolvency, held that " A " might maintain replevin against the Assignee, and that Sec. 50 of the Insolvent Act of 1869 coxild not apply against the plaintiff, who was not a creditor in any way interested in the estate of the Insolvent ; Burke vs. Mc Whirter, 36 U. C, Q. B. 1 ; see Broxmva. Wruiht, U. C. Q. B., 1874, not yet report- ed ; McOregof vs. Hume, 28 U. C R. 280; Colter \a. Manon, 30 U. C. R. 181 ; Alexander vs. A. B. C. & D., 5 U. C. R. 329; Henry vs. Doiiglas, 1 L. J. U. C. (N, S.) 108; Canoerse vs. Michie, 16 U. C. C. P. 126; Brand vs. Bkkle, 4 P. R. 191 ; Be McKenzie, 31 U. C. R. 1 ; Bank of Montreal vs. Uttlc, 17 Grant 313. The following chattels are hereby declared exempt from seizure under any writ issued out of any court whatever in the Province of Ontario, viz : 1. The bed, bedding and bedstead in ordinary use by the debtor and his family. 2. The necessary and ordinary wearing apparel of the debtor and his family. 3. One stove and pipes, one crane and its appendages, one pair of and- irons, one set of cooking utensils, one pair oi' tongs and shovel, one table, six chairs, six knives, six forks, six plates, six tea-cups, six saucers, one sugar-basin, one milk-jug, one tea-pot, six spoons, all spinning wheels and weaving looms in domestic use, ten volumes of books, one axe, one saw, one gun, six traps, and such Ashing nets and seines as are in common use. 4. All necessary fuel, meat, fish, flour vegetables actually provided for family use, not more than sufficient for the ordinary consumption of the ASSIONMENTS AND PROCEEDINGS THEREON. G3 dubtur tuid his family for thirty diiys, and not exueodin<{ in value tho sum of forty dolliirs, 5. One coy, four sheep, two hogs, and food therefor for thirty days. 6. Tools or implements uf or chattels ordinarily used in the debtor's occupation to the value of sixty dollars. In the Province of Quebec, Code Cio. Pro. , Art 556, the following is the list of exemptions : 1. The bed, bedding, and bedsteads in ordinary \i8o by the debtor and his family. 2. The neeessary and ordinary wearing apparel of the debtor and his family. 3. One stove and pipes and one crane and its appendages, one pair of andirons, one set of cooking utensils, one pair of tongs and shovel, one table, six chairs, six knives, six forks, six plates, six tea-cups, six saucers, (ine sugar-basin, one milk-jug, one tea-pot, six spoons, all spinning-wheels and weaving looms in domestic use, and ten volumes of books, onu axe, one saw, one gun, six traps, and such fishing nets and seines as are in common use. 4. Fuel and food not more than snificient for thirty days, and not ex- ceeding in value the sum of $20 00. 5. One cow, four sheep, two hogs, and food therefor for thirty days. 6 Tools and implements or other chattels ordinarily used in the debtor's occupation to the value of 330 00. 7. Bees to the extent of 15 hives. In New Brunswick and Prince Edward's Island wearing apparel and kitchen utensils to the amount of £15 0, and in Nova Scotia to the value of ^0 00 are exempted. 1 7. The Insolvent shall, within ten days of the date of the assignment, or froHi the date of the ser- vice of the writ of attachment, or if the same be con- tested, within ten days from the date of the judg- ment rejecting the petition to have it quashed, iurnish the Assignee with a correct statement (Form F.) of all his liabilities direct or indirect, contingent or otherwise, indicating the nature and amount thereof, together with the names, additions Insolvent to furniiih .'!tateiu»'Ut of his liabilitieM, Msets. &c. % vM m '4 % 64 INSOLVENT ACT OF 1875. / , and residences of his creditors and the securities held by them, in so far as may be icnown to him. What it The Insolvent shall also furnish within the same delay a statement of all the property and assets vested in the Assignee by the deed of assignment or by the writ or writs of attachment issued against him, and such statement shall in all cases include a full, clear, and specific account of the causes to which he attributes his Insolvency, and the deft- ciency of his assets to meet his liabilities. The Insol- vent may at any time correct or supplement the statements so made by him of his liabilities and of his property and assets. Under the 3rd Section uf Act of 1869, the Assignee was required to pre- pare statements showing the position of the Insolvent's affairs, which was to be exhibited at the first meeting of creditors, and the insolvent was re- quired to assist in the preparation of the statement, and attend at meet- ing to be examined on oath touching its contents. The above clause requires the Insolvent to prepare within ten days and furnish the Assignee with the statement of liabilities, and also of all the property and assets vested in the Assignee. The act therefore assumes that the Assignee will permit the insolvent to have such access to the es- tate as will onable him to prepare the required statements. Petition ijj. The Insolvent mav present a petition to the by Insol- ' vent to set judge at any time within live days from the ser-vice tachmont. of the Writ of attachment ; and may thereby pray for the setting aside of the attachment made under such writ, on the ground that the party at whose suit the writ was issued has no claim against him, or that his claim does not amount to two hund^' ' dollars beyond the value of any security which holds, or is not provable in insolvency, or that hi., estate has not become [subject to liquidation ; or if the writ of attachment has issued against a debtor by reason of his neglect to satisfy a writ of execu- ASSIONMENTS AND PROCEEDINOS THEREON. 05 irities ) hiiii. same assets ament .gainst lude a 368 to 3 deti- Tnsol- nt the and of id to pre- hich was ,t waa re- al meet- lays aiid all the assumes the es- |to the service pray under [whose It him. ind -« bch lat hi«t I; or ii" lebtor lexccu- tion against him as hereinbefore provided, then on any of the above grounds, or on the ground that such neglect was caused by a temporary embarrass- ment, and that it was not caused by any fraud or fraudulent intent, or by the insufficiency of the as- sets of such debtor to meet his liabilities ; and such HeannK petition shall be heard and determined by the judge J.^*"*^ in a summary manner, and conformably to the evi- dence adduced before him thereon ; and the judg- ment, subject to ap]ieal as hereinafter provided, shall be final and conclusive. Under the 26th Section of the Act of 1869 the above petition was re- (|uired to be presented within three days. A creditor issuing an attachment under the Act of 1864 (w^hich w&a also five days as above) could not after five days from the return day of the writ withdraw the attachment, so as to prevent another creditor from in- tervening for the prosecution of the cause (Wurthiiujton va. Taylor, 10 L J. r. C. 333). 10. A copy of the deed of assignment or a copy Registra- of the writ of attachment as the case may be, certi- signment*' tied by the Assignee or the clerk of the court, shall f^r*^ *''*"'" forthwith be registered in the registry office of the county wherein the Insolvent resides, and also in every county or registration district wherein he may have any real estate ; in the Province of Quebec such deed of assignment or writ of attach- dll be accompanied by a description of the ate belonging to the Insolvent, and shall be eg^^ ed in the county or registration district vvheiein the same is situate, with a notice that the same has, by such assignment or writ of attachment been transferrr 1 to the Assignee. I m 31 :i 66 INSOLVENT ACT OF 1S75. K . To compel the Assignee to furnish a descripti(jn of Insolvent's lands when registering copy of deed of assignment or writ of attachment might often defeat the object of the Act, and so far at least as Ontario is con- cerned, the creditors will best be protected by registering a copy of assignment or writ of attachment under the Grantor's and Grantee's Index. An Assignee in Insolvency cannot acquire priority over a prior vendee of the Insolvent, by prior registration of the instnmient appointing such Assignee {(Mixer vs. Hhan:, 10 Grant, 599). A list of creditors need not be appended to an iissignment to an Official Assignee {Uhujdm vs. Campbell, 2 U. C. L. J. [N. S.j 299). First Meeting of credi- tors, how called. -orm. '40. Immediately after the assignment shall have been made, or in the case ot an attachment, imme- diately alter the delay vs-^ithin which the attachment can be contested or immediately alter the contesta- tion has been rejected, or with the consent of the Insolvent immediately after the writ shall have been returned, the Official Assignee shall forthwith call a meeting of the creditors of the Insolvent to be held at the place and on the day and hour to be mentioned, notice of which meeting, in the Form G. shall be published at least twice in the Official Gazette, the first publication of which notice shall be at least three weeks before the day fixed for such meeting. ! • tl p ai h Notice to each cretU' tor liy mail. *4I. The Assignee shall also forward b) mail, a least ten days before the meeting takes place, a notice in writing to every creditor mentioned in the original or any corrected or supplementary list or statement furnished by the Insolvent, or who may be known to him to be a creditor, and give such other notice as the circumstances of the case EXAMINATION OF INSOLVENTS. 67 may require. But in case the Assignee is unable Proviso, to obtain such list,then ten days' notice shall be given by advertisement in one local or the nearest pub- lished newspaper. Ill caau of an assignment tho Assignee is to give notice immediately, in cast' of attachment notice must not be given tmtil the expiration of the tivo days from the service of tho writ of attachment allowed by Sect. 18, for the Insolvent to present a petition praying that the attachment may be set aside, or, if contested, then not until such time as the petition has been rejected. The Insolvent may consent that the notices shall be given immediately after the return of the Writ. The notices sent by mail to the creditors must contain a list of the creditors holding claims for 8100 each and upwards. Form G. Tlie first publication of the notice must now be at least three weeks before day fixed for meeting. Under 2nd Sec. of Act of 18(59, the first |)ublication of notice was rotjuired to be two weeks prior to the meeting. EXAMINATION OF IN80LVENT8. '4*4 The creditors at their first meeting held at \Vho shall the time and place fixed for that purpose, may ap- meetings, point one of themselves as chairman of the meeting ; and at all subsequent meetings the Assignee shall be chairman. •}3. The Insolvent shall be bound to attend at i"«<>iveiit to attend the first meeting of his creditors, and after makinc' and ^*> d. He shall as such b«» sub- ject to its summary jurisdiction and to the summary jurisdiction of a judge thereof, and be accountable ASSIGNEES AND INSPECTORS. 71 for the moneys, property and estates cominsr into his possession as such Assignee, in the same manner as sheriffs and other officers of the court are. J H^. The creditors at their first meeting, or at any Appoint subsequent meeting called for that purpose, may and Hecil- appoint an Assignee who shall give security to Her "y^a^'Ji.*'" Majesty in manner, form and effect, as provided inogfciaL'* the next preceding section, for the due performance of his duties to such an amount as may be fixed by the creditors at such meeting. In default of such appointment the Official Assignee shall remain the Assignee of the estate, and shall have and exercise all the powers vested by this Act in the Assignee. The creditors may also, at any meeting called for that purpose, remove any Assignee and appoint another in his stead. A certified copy of any reso- hition of the creditors appointing an Assignee shall he transmitted in every case to the clerk of the court v^ herein the proceedings are pending to remain of record in his office. ■f I cre- No creditor shall vote at any meeting unless pre- wiiat sent personally or represented by some person hav- ^hai"v"!ur ing a written authority, to be filed with thef^"'*'^*' Afssignee, to act at any or all such meetings on his behalf, and no more than one person shall vote as a creditor on any claim for the same debt ; jiersons purchasing claims against an estate nfter insolvency, fhall not be entitled to vote in respect of such claims, but shall, in all other respects, have the same nghtsQi^i,„a„.,t ivs other creditors ; and no claim after being pi"oved*'jj^'",'|j,,. shall be divided and transferred to another person voting, or party to increase the number of votes at^any 4 72 INSOLVENT ACT OF 1875. .f meeting : each claim shall continue to have one vote only in number. The 5th and 6th sections of the Act of 1869 provide for the appoint- ment of the Assignee, and the 51st section of that Act for his removal. As to the mode of voting for an Assignee, see Section 102 post. At a meeting of creditors held to give their advice upon the appoint- ment of an Official Assignee, it was held that the creditors of the indi- vidual partners had the right, as well as the creditors of the firm, to vote in the choice of an Assignee (Ltixton vs. Hamilton dc Davies, 10 L. J. 334). Appointment of an agent for a creditor claiming to advise in the choice of an Assignee must be in writing, and filed of record {In re Campbell, 1 U.C. L. Journal [N. S.J 135). Although no neglect or irregularity in any of the proceedings antece- dent to the appointment of an Assignee shall vitiate the subsequent assignment, it might probably be held that an omission nf any such pro- ceedings would render the assignment one made otherwise than in the manner prescribed by this Act, and an act of bankruptcy upon which pro- ceedings in compulsory lifiuidation might be taken. The latter part of the above section, as to more than one creditor voting on the same debt or purchasing debts after assignment, and as tu dividing claims to increase votes, is new. No complaint appears necessary to efiect a removal of the Assignee ; the creditors' desire is sufficient. But as the majority in number of the creditors called for removing an Assignee might not agree with the majority in value, and the (question in such case would require to be referred to the Judge, it may be useful to consider the principles upon which Assignees have been removed in Eng- land. If the election of the Assignee is procured by fraud that will be suffi- cient ground for removing him {Ej: parte Durent, Buck. 201). So also if a large body of the creditors are excluded from voting by the mistake of the Assignee in rejecting their proofs, and the election of the trustee is, in conse<|iience, made by a few small creditors {Ex i>mie Ed- loardi, Buck. 411). So also if the major part of the creditors are excluded from voting by some unavoidable accident. {E.c jnirte Clmpeanro^ujc, M. & Mac. 174). On the other hand, it woiild not be a sufficient reason for setting aside an Assignee, that some of the creditors were unprepared to prove who, if they proved, would have carried the election another way {Ex parte Butte^rjill, 1 Rose 11)2) ; or that the election was cuiried by votes ASSIGNEES AND INSPECTORS. 78 lave one of creditors having an adverse interest to the general body of creditors {Ex parte Surtees, 12 Vea. 10). But if the Assignee has an interest adverse to the general body of credi- tors, that will be a good ground for removing {Ex parte Surteen, 12 Ves. 10). So also, if being a creditor, he sells his debt tu another creditor ad- versely interested {Ex parte Stayg, 2 M. D. & D. 186). If the Assignee is guilty of a breach of trust or misconduct in the dis- charge of his duties, it will be a sufficient ground for removing him, and he will be saddled with the costs of removal {Ex parte Tmmisend, 15 Ves. 47 ; Ex parte Amjle, 4 D. & C. 118) ; or is an accounting party to the estate (1 Bank and Ins. Rep. 285) ; or if the bankrupt have interfered in the choice (Ex parte Molinenx, 3 M. «& A. 703) ; or the creditors had not sufficient notice to enable them to be present {Ex parte Moris, 1 Dea. 498). The election will be set aside if the parties voting on the choice be not entitled to vote {Ex parte Rowe, De G. Rep. Ill) ; or if the person who is liable to account to the bankrupt's estate be the only one who has proved and elected himself {Ex parte Gritmdale, 28 L. T. Rep. 207) ; or if the bankrupt may exercise an undue influence on the party chosen (Ex parte Morse, De G. 478) ; or where the Assignee had been chosen with- out his consent or knowledge, and declined to act (Ex parte Pearson, 3 Dea. 324). If an Assignee appoints a solicitor who is related t(j the insolvent, and refuses to remove hiiu, he may be himself removed {Er, parte, bates, 1 De M. & G. 462). So an Assignee may be removed where he improper- ly connives at the insertion in the insolvent's balance sheet of a petition- er's debt, or when the Assignee becomes insolvent (Ex parte Ferryer, 1 M. D. it D., 276) ; but the petition must be presented promptly (A'-e parte Codett, 1 Moll. 62). Mere poverty, though of itself not a sufficient ground of removal, yet if attended by suspicious circiunstances as the use of fictitious votes in the Assignee's election, will warrant a removal (Ex fjarte Copeland, 1 M. & A. 306). Where an Assignee acting under a himn Jiile belief that all the other creditors were to be compo\inded with, agreed with the bankrupt to compromise his own debt, the Court de- clined to remove him (Ex parte Danson, 2 Bank, ifc Ins. Rep. S{)). If an Assignee abscond or become permanently resident out of the country, another will be chosen in his place {Ex parte Higyins, 1 Ba & Be, 218; Ex parte Uny, 13 Ves. 274). Assignees will not be permitted, either directly or indirectly, to become t:. m )ifi I ^ a ■'■"»i •if* «' ' 1. 1 74 INSOLVENT ACT OF 1875 -r purchasers of nny of tho insolvent's property ( Ex parte Badoork, M. »& McA. 231, 238) ; juid iinj' Assignee so purchasing withoiit leave will be removed and ordered to account for profits {Ex parte AleMinder, I Dea. 273). See Ex parte Thomson, 9 L. J. Chy. 17, .vhero the purchase of a small portion of the estate by the Assignee did not justify his removal. If an Assignee wish to purchase at any sale of the insolvent's property, he must first petition the Court to be discharged from his office {Ex parte Alexander, 1 Dea. 273) ; and pay his own costs of petition (Ex parte Pet' ken, 3 M. D. & D. 385). This petiti)- ft would be advisable here to serve tho In- spector as well. See form for security to be given, Form No. 3. Transfer j^o. As sooii as the security required from the As- of eHtate • * by Official sijrnee appointed by the creditors shall have been furnished by him, it shall be the duty of the Official Assignee to account to him for all the estate and property of the Insolvent which has come into his possession, and to pay over and deliver to him all such estate and property, including all sums of mo- ney, books, bills, notes and documents whatsoever belonging to the estate, and to execute in his favour a deed of assignment in the Form H. If the creditors appoint an Assignee without calling upon him to provide security, the Official Assignee would no doubt bo compelled to deliver to such creditors' assignee the insolvent's estate. 31 Every Assignee on his becoming such shall Notice of appoint- ment, give notice of his appointment as such by advertise- ment in the Form I, and by a copy thereof sent to each creditor by post and post-paid. m!t t^act ^'^' ^® Assignee shall act as the attorney or agent '"tT^itor^®* any creditor in reference to any claim or demand ASSIGNEES AND INSPECTORS. 7o of such creditor on an insolvent estate of which ho is the Assignee. 33. An Assignee may however, on being author- Excopti.m. ized by the judge, act as the attorney or agent of a creditor when the action to be taken is in the inte- rest of the estate or of the creditors generally. The ahovu suctions, 32 and ',V.i, are new. 34. The creditors may, from time to time, at any P'''^*' f..r meeting, determine where subsequent meetings shall be held ; and until they shall have passed a resolu- tion to that effect all me»'tings of the creditors shall be held at the office of the Assignee, unless other- wise ordered by the judge. Under the 2()th secticjn the Otticial Assignee is aiitlxirized to name the day, place and hour for calling tliu Hrst nieetinij of creditors, but from the reading of this section he is ol)liged to call the first meeting at his own office. At the first or any 8uh3e(|uont meeting the creditors have power to determine where the subse<{uent meetings shall be held. 35. The creditors at any meeting may appoint Inspec- one or more Inspectors, who shall superintend and appoint ,. . ,, ,. ,.1 » • • nient, Ac, direct the proceedmgs ol the Assignee in the by m-ai management and winding up of the estate ; and they may also at any subsequent meeting held for that purpose, revoke the appointment of any or all the said Inspectors ; and upon such revocation, or in case of death, resignation or absence from the Province of such Inspectors, may appoint others in their stead ; and such Inspectors may be paid such 76 INSOLVKNT ACT OF 1875. if , Iteniuner- Ation of Innpec- toni ; they and Aiwi^'- nee not to purchase Iiuiol- vent's pro- perty. remuneration as the creditors may determine ; and whenever anything is allowed or directed to be done by the Inspectors, it may or shall be done by the sole Inspector if only one has been appointed. Butjno Assignee as Inspector or any insolvent estate shall purchase directly or indirectly any part of the stock in trade, debts or assets of any description, of such insolvent estate. Under the English Act the separate crediturs were not allowed to vote under a joint adjudication in the choice of Assignees. But if the interest of the joint creditors were adverse to that of the separate creditors or for any other purpose it was desirable to appoint any person to protect the interests of the separate creditors, an Inspector might be appointed for the purpose of getting in the separate estate, and on indemnifying the Assignee might bring actions in his name. Under that Act Inspectors were only appointed where there wore joint and separate creditors of the bankrupt, to look after the interests of the separate or joint creditors as a class (E.r ijurtc Wright, 2 M. D. & D. iU ; /?.»• purte liuUou, 1 G. & J . atiU ; Ex parte MHi's, 2 Rose 08 ; Ex parte miton, I M. D. & D. 08). The power of apiK>inting Inspectors here was conferred by the 34th Sect, i )f the Act of 1801), and has, whore judicitxis appointments have been made, been pnxluctivu of great benefits. By this means much time and expense is saved in the calling of meetings fur the purpose of advising the Assignee, as the general knowledge of business which an Inspector is likely to possess (and without which no Inspector should be appointed) will generally prove more advantageous in the winding up qf an estate than where the duties devolve upon the general body of creditors, as it generally hapiHins that what is everybody's busintiss is nobody's business. Ditiiwsal of estate of Insol- vent. 30. The creditors may. at any meeting, pass any resolution or order directing the Assiyuee how to dispose of the estate real or personal of the Insol- vent ; and, in default of their doing so, the Assignee shall be subject to the directions, orders and instruc- tions he may, from time to time, receive from the Inspectors, with regard to the mode, terms and con- ASSKINEES AND INSPECTORS. 77 ditioiis on which he may dispose of the whole or liny part ol' the estate. In iltifaiilt of directiona being given by the creditors to the ABsigneo as t(i the disposHl of the estate, the Inspectors — if such are appointed — possess full authority for that purpose. in 3T. Any one or more creditors whose claims in /"'Jt-^tJ' •' to pm- the aggregate exceed five hundred dollars, who may iwsed l)e dissatisfied with the resolutions adopted or orders t" «iue . IiiMiilvint, all debts due to or claimed by the insolvent of every &c. kind and nature whatsoever; tor rescindnip^ aij;ree- inents, deeds and instruments made in ♦vaud of creditors, and for the recovery back of moneys alleged to have been paid in fraud of creditors, and to take, both in the prosecution and defence of all suits, all the proceedings that the insolvent might have taken for the benefit of the estate, or that any creditor might have taken for the benefit of the creditors generally ; and may intervene and repre- sent the Insolvent in all suits or proceedings by or against him which are pending at the time of his appointment, and on his application may have his name inserted therein in the place of that of Ihe Insolvent. And if after an assignment has been if IhhoI- made or a writ of attachment has issued under thisfoAh. " Act, and belore he has obtained his discharge under ^|,"^," ^*^' this Act, the insolvent sues out any writ or insti- "^^JJ^,,"'' tutes or continues any proceeding of any kind or ""'"*• nature whatsoever, he shall give to the opposite party such security for costs as shall be ordered by the court before which such suit or proceeding is pending, before such party shall be bound to appear or plead to the same or take any further proceeding therein. This Section correaponds with thu 42nd Sec. of the Act of 18G0. See notes to previous section : Hdd that an action may be brought against an Assignee for a dividend on a duly collocated and advertised claim which has not been objected to {SimpKim. vs. Newton, 4 L. J. N. S. 40). An ( >thcial Assignee in Insolvency sued for trespass in taking and selling goods in not entitled to notice of action (A rchibald vs. Huldan , 'M Q. B. 30). When a defendant becomes ins4)lvent after the service of a bill upon him but before the time for answering expires, and the suit is thereupon «89B 80 INSOLVENT AC" OF 1875. revived aKniust the Assignee in Insolvency, it is necessary to surve the AssiKnuu with thu hill as well as with lln' order to revive or an order pro confoBso cannot be obtained {Hmith vh. Lima, 1 Chy. Cham. 308). Ooods are ropluviablo out of the hands of an Assignee in Insolvency notwithstanding C. S. U.C.Oliap. 29. Sec. 2{.JamieHone.t,tl vs. Kvrr,(\P. R. 3. C. L. Chanib. Where the goods of A having beeo seized by the Sheriff under an execution tigainst B had l>een handed over by the Shoritf to an Assiifneu to whom the debtor hiul made a voluntary assignu'ent in insolvuncy : Iftlii that A might maintain replevin against the Assignee : Hell also that Hecticm 5() of the Act of 18<>0 could not apply against the plaintiff who was not a creditor in any way interested in thu estate of the Insolvent {llnrh- vs. McWhirUr, M U. C. Q. H. 1). M. deposited a sum of UKmey with the plaintitt's, and soon after ab- sconded. The plaintiffs had given him a receipt, stating that the money wiis payable on production of that document. A writ of attachment issued against the depositor's property, and the defendant Little was appointed OlUcial Assigueu. He domanduil thu money without producing thu re- ceipt. He thou su'>d the plaintiffs for the monuy : Held that he was entitled tf- recnvor \Mank of Mimtrcal vs. Little, 17 Orant 313). A and It, traders, made an assignment under thu Insolvent Act. A judgmunt at law having been obtained against A, his interest in the part- nurship asHt^tH was sold for a nouiinal consideration to C, who had notice of thu insolvency pr«)ceeding8. C then entered into possessioti of and otherwise interfered with the partnership goods, so as to hinder the plain- tiffs from the exucutir,i>ttnm, 2 (Irnni, 487). Even the charge of fraiul in a bill tiled against a bankrupt and his Assignees, seeking to set luide certain conveyances as having buen fraudu- lently prticured by thu bankrupt before the bankruptcy, rloes not justify the making the bankrupt a party ; and although a decree declr.nng the deeds to be fraudulent would in a sense make the bankrupt a trustee of ASSIGNEES AND (NSPECTORS. 81 i i the property, this was not stilKciont tu inaku him a party to the suit (Oilbert vs. LewU, 2 J. & H. 452). A bill filed by one of the cruditorH of an insolvent to recover property alleged to belong to the iitaolvoiit's ualatu, on the uture allei^ation that the Assignee in Insolvency refused to siiu without an induumity against coats of the suit, and that the plaintitt', through poverty, \vi\a unablu to give such iiidonmity is demurrable (/>.t.i..' vs. .s'.«W, 2 D. 0. F. A .1. 4(5:1). A demurrer by an Insolvent on the ground that he was not a proper party was allowed {IVilmm vs. (Viiahnhn, 1 1 (irant, 471). \n objection wa.4 raised to an ap[ilication undor this provision by an Otiicial Assignee to \hs allowed t(^ inturveiui and rupresuut the insolvent in a suit wherein the Insolvent was plaintiir, on the ground that the insolvent piaintitr was a foreigner, neither resident or domiciled in Oanada, but not decided {MeHon vs. NirJuA.i, 27 ',>. B. I'. C. I(i7). It was considered iifuuBsary in the English Act of IHOl, sec. 277, that it should extend to aliens and denizens, to make them sul>ject thereto, and to entitle thum to all the benefits given thereby. 40. If a partner in an unincorporated tradinq; I'artner- coxnpany or co-partnership beconit'H insolvent with-llir.'i hy ii; the meaning ol'this Act, and an Assiijnee is ap-v"n.y„fa pointed to the estate of such insolvent, such part - '*'^"'"' nership shall thereby be- held to be dissolvod ; and the Assitynee shall have all the rijjfhts of action and remedies against the other j)artiu!rs in such com- pany or co-partnership, which the said insolvent partner could havt^ or e.xercise by law or in equity 11 ainst his co-partners after Lh(» dissolution of the iirm, and may avail himself of such rights of action and remedies, as if such co-partnership or company had expired by efflux of time. Th>9 section is a re-onautment of the 43rd section of the Act of 1869. Tne genonU r'!e is, that by the bankruptcy of one partner the partner- ship is dissolved as t<> all the pMTtuort {Kx parte HmUh, b Vei, 2U5 ; «f {jarh H'illiamt, 11 Vo«. 5). V:l, ::;ssic ■«NHM 82 INSOLVENT ACT OF 1875. This, however, is not the result in the case of an unincorporated joint- stock company, the shares of which are transferable. The effect of r,ho bankruptcy of a shareholder in a company of this description is merely to dissolve the connecti<>n of the bankrupt with the company {Orettiuhield'H rmf, 5 De G. & S. 599), So also in the case of a mine partnership, in which the shares are assignable, and each member ib regarded as a sort of shareholder rather than a partner in the ^dinarj- acceptation of the term, the bankruptcy of one partner does not involve the total breaking up of the partnership (Ex parte Broadhe.nt, 1 M. & A. 638 ; Crawshaw aiid Collins, 16 Ves. 225). Upon the bankruptcy of a partner, his power over the partnership pro- perty ceases, and his share of the property — that is of the siirplus after paying tlie partnership debts and the claims of his co-partner — will vest, together with his separate estate, in the Assignee, who, in respect of the bankrupt's share of the partnership assets, will become tenant in common with the solvent partner {Ilurriy and Crickef, 5M. & S. 33G ; irmxlbriUffe vs. iSiuan, 4 B. and Ad. 633 ; ihldwdl and Gmjory, 1 Price 119, 2 llose 149). If the solvent partner is willing to undertake the winding up of the partnership affairs ho will be entitled to do so, provided he do so honestly rnd fairly, and not by way of fraudulent preference (Uai-vey vs. Cricket Woodhridfje vs. Sivan mul i'oldwell vs. Greyory, supra), C entered into an agreement with R that R should buy and sell goods on behalf of C, and that the business should be carried on as R & Co., R being paid by salary and a percentage on the proHts. The business was managed by R, but C had bought goods for it. Each became bankrupt, and it was held that the book debts and stock in trade of II & Co. were joint estate of the two (In re liowlmul vs. (Jrankshair, I L, R, Chy. 421). See also Allen vs. Carratt, 30 U. C. R. 169. The enactment here of the dissolution of a partnership by insolvency is merely the repetition of a well understood principle of English law : see Story on Partnership. When a partner in a trading company or co-partnership becomes insol- vent his Assignee can m.^ke no claim on account of the separate creditors of such partner until the joint creditors of such company or co-partner- ship have been paid twenty shillings in the pound with interest on sxich debts as carry interest (Robson, 2nd Ed, 609 ; Expart^ Reeve, 9 Yes, 590), See notes to Sections 80, 82 & 88. ASSKJNKES AND INSPKCTOUS. 83 41. Every Official Assignee, or Assignee appoint- J^^giftfr ed by the creditors, shall, in every case in which he I'y otii.nal , . , ,. Assignee. acts as such, keep a reufister sliowmg [the name ot each Insolvent who has made an assii^nment, or against whom a writ oi" attachment has issued, his residence, place of business, and the nature of his trade or business, the date of the assignment, or of the issue ol" the writ of attachment, the amount of liabilities acknowledged by the ^Insolvent in his schedule of liabilities, the amount of claims proved, the amount of composition, or of dividends paid, and whether a discharge has been granted within one year or not, the amount of dividends remaining unpaid after three months from the declaration of the last dividend, with such other information as the Assif"io^ tnay deem of general interest with referent ; ach estate — which register shjill be open to the inspection of the public, within office hours, at the office of such Assignee ; and the Otfi- Ajwitfuw cial Assignee, or the Assignee, as soon as he takes separate charge of any estate, shall open a separate book for IIJith""aoL «!ach such estate, showing a debtor and creditor ac- "*****' count of all his receipts and disbursements on ac- count thereof. ' ti And every Assignee, other tiian an Official As- p^ixwit of siiniee, shall within one month after he shall have 1',',,'jjjffi?''' wound up the estate of any Insolvent, and obtained """l his discharge, deposit the register kept by him as aibresaid, with reference to such estate, in the office of, the Official Assignee of the county or district, where it shall remain for the like purposes, and un- der the same provisions as the register kept by the Official Assignee. 84 INSOLVENT ACT OF 1876. / The greater portion of this section is new. The 39th section of the Act of 1869 provided that the Assignee should keep a correct register of all his proceedings, and of the reception of all papers and documents served upon him, and of all claims made to or upon him. AHHi(peuH under thiH or any furmurAct must obtain cliHcharKo and pay over halanceK to Roceiver- Uoneral with •worn account. 49. Every Assignee, under this A.ct, shall, within thirty days after obtainini^ his discharge, and every Assignee under any Act hereby repealed shall with- in thirty days after obtaining his discharge, or the closing of his accounts as such, or within thirty days after the coming into force of this Act, if he has ob- tained his discharge or closed his accounts before its coming into force, pay over to the Rec«Mver-^>eneral all moneys belonging to the estate then in his hands, not required for any purpose authorized by this Act or any Act hereby repealed, as the case may bo, with a sworn statement and account of such mo- noys.and that they are all he has in his hands, under a penalty of not exceeding ten dollars for each day on which he shall neglect or delay such payment ; and he shall be a debtor to Her Majesty for such moneys, and may be compelled as such to account for and pay over the same. This section is now. AMignee 43. The Assignee shall be entitled to a commis- tobe paid - only by sion on tlie net proceeds of the estate of the insol- eoninuH- lion on anionnt rttallzi'd. veut of every kind, of five per cent, on the amount realizt'd not exceeding one thousand dollars, the fur ther sum of two and a half per cent, on the amount, realized in excess of one thousand dollars and not exceeding five thousand dollars, and a further sum of one and a qua-rter per cent, on the amount real- ASSIONEES AND INSPKCTORS. 85 ized in excess of five thousand dollars, — which said commission shall be in lieu of all fees and charges And for all his services and disbursements in relation tou«c«H8ary tho estate, exclusive of actual expenses in going tomentn™*" seize and sell, and of disbursementK necessarily made in the care and removal of propi»rty : No Assignee shall employ any counsel or attorney Ab t<> em- it law without the consent of the Inspectors, or ofcolinwT, the creditors ; but expenses incurred by employing such counsel or attorney with such consent, shall he paid out of the estate, if not recovered from any j)arty liable therefor : The remuneration of the Official AsKlcrnee, when licmunt- he is superseded by an Assignee appointed by themiinsr- creditors, shall be iixed by the court or judge and AHHTKnee. taxed by the proper officer, and shall be the first charge on the estate. Under tlio 52ml Huction of the Act of 18<»tt tho runiuiiuration of the iii- teriin iiHsi^nue, gimnlinu, uiul AsBignoe roBpoctivfly woro Jixod by the cro- d'lUiVH lit tlu' lirst inuuting, or at any other inct'tiii^' called for tliat p\ir- pose, but if not 8o fixed V)eforo a tinal dividend wu» doclarod, Hhotild bo put into tho dividend alieot at a rate for tlie interim assignee or guardian as tho AHsigi'ee should deem reasonable, and for thu Assignee not exceeding five jior cent, upon the cash receipts. l^rior to the above tlie Assignee had the sole right to elect his ovai pro- fessional adviser, and could not be madetochangu him except upon rea- sonable ground, and then only upon the penalty of being himself removed from the office of Assignee in case of refusal (He Lumh, 17 C P. U. C. \1'>\). The above section as t«) the a|>pointment of a solicitor follows the Eng- lish Act of 18<>9, which om])owers the creditors to designate thu attorney, Bolicit«>r or aiunsel for the Auignee (Robson, 2nd Edition, 515). If :l 44. The Assignee shall call meetings of creditors AsuiKii^^f whenever requited in writing so to do, by the In-meetiiiK* •pectors or by five creditors or by the judge, and he HUion.'" INSOLVKNT ACT OF 1S75. shall state succinctly in the notice callinj^ any meet- ing the purpose thereof. Deposit and with- drawal of moneys of estate in hank. Interest iinde- iMisits. FVnalty for non- (listriliu- tiiin of sueli inter- Assiffnee to produce hunk ))o()k lit nieet- ingB, Ae. 45. The Assignee shall deposit at interest in some chartered bank, to be indicated by the Inspec- tors or by the judire, all sums of money which he may have in his hands belonging to the estate, when- ever such sums amount to one hundred dollars. Such deposit shall not be made in the name of the Assignee generally, on pain of dismissal, but a separate deposit account shall be kept lor (>ach estate of the moneys belonging to such estate, in the name of the Assignee and of the Inspectors ^if any), and such moneys shall be withdrawn only on the joint cheque of the Assignee and of one of the Inspectors, if there be any. The interest accruing on such deywsits shall ap- pertain to the estate, and shall be distributed in the same manner and subject to the same rights and privileges as the capital from which such interest accrued. If in any account or dividend sheet made sub- sequent to any deposit in a bank, the Assignee omits to !»( 'ount for or divide the interest then accrued thereon, he shall forfeit and pay to the estate to which such interest appertains, a sum equal to three times the amount of such interest; and he may be constrained so to do by the judge ui>on summary petition and by imprisonment as tor a contempt of court. At every meeting of creditors, the Assignee shall produce a hank pass book showing the amount of deposits made for the testate, the dates at which ASSIGNEES AND INSI'ECTOKS. 87 such deposits shall havo boeu made, the amounts withdrawn and dates of such withdrawal, of which production mention shall be made in the minutes of such meeting, and the absence of such mention shall bo y>/'ir>u* /(trie evidence that it was not produced thereat. The Assignee shall also pro- duce such pass book whenever so ordered by the judge at the request of the Inspoctors or of a credi- tor, and on his refusal to do so he shall be treated as being in contempt of court. The Assignee who shall make or cause to be I'lmish- made any false entry in such pass book wi- h a view f^i". ,.i|[ry to deceive the Inspectors, creditors, or judge, shall j"s;l!b!',ok. be guilty of a misdemeanor, and shall })e liable, at the discretion of the court before which he shall be convicted, to punishment by imprisonment for a term not exceeding three years, or to any greater punishment attached to the oHence by any statute. The 3Htli Soot, of tho Iiisolvont Act of I8«)!» is re-oniicted in the above. 46. Upon the death of an Assignee or Official E«tati- in Assignee, or upon his removal from office, or U])on v.Mted on his discharge, the estate shall remain under the con- A»Hitfnt«. trol of the judge until the appointment of another Assignee or Offifial Assign«H' as the case may be, when the estate shall lieconie vested in such other Assignee or Official Assignee. 4T, After the declaration of a final dividend, or'^'"****'-. fount and if after using due diligence the Assignee has been r;ii II- : J, If. !,-. 88 [NSOLVENT ACT OF 1875. ' AiMi){ nee. a petition to the judge for his discharge, after giving notice of such petition to the insolvent, and also to the Inspectors, if any have been appointed, or to the creditors by circular, if no Inspectors have been ObUKati.m apiwiuted ; and he shall produce and file with such ofAlMlK- petition a bank certificate of the dejiosit of any divi- dends remaining unclaimed, and of any balance in his hands; and a statement showing the nominal and estimated value of the assets of the Insolvent, the amount of claims proved, dividing them into ordinary, privileged or secured and hypothecary claims, the amount of dividends or of composition paid to the creditors of the estate, and the entire expense of winding up thr same. And the judge, after causing the account to bo audited by the Inspectors, or by some creditor or creditors named by him for the purpose, and after htmring the parties, may grant conditionally, or unconditionally the prayer of such petition, or may refuse it. It in iniperntivt! under thu nhovo Rcction that the Assi^nuu prepare a tinal account and present a petition for liiH discharge. An AnHignee who neglects to present his petition for discharge nisy iocur a penalty of 910U. See Sec. 48. Power of Judge. Penalty in 48. Any Assignee who neglects to present such n^wtto a petition within six months aiter the declaration such I'wti- o^ ^ fi"**' divid»^nd, or within three months after he *'*"** shall have been required by the Inspectors or by any creditor of the estate, after it shall have been ascertained that there are no assets wherewith to declare a dividend, shall incur a penalty not exceed- ing one hundred dollars. COMPOSITION AND DISCIIAKOK. 89 (2.) The provisions of tho next preceding section '*f'^'^"'j2" shall apply to all persons who have acted or aret-'aiM-iy ... to Ahhik- acting as Assignees under " 7'A*' Inwlveut Act o/ h.-.k nn.ler 1869," or in either of the Provinces of Quebec or kvu. Ontario under the Act formerly in force therein called and known as " The InHohrnt Art ofl^iU," or any Act or Acts amending or continuing the same or either of them ; and any such person who neg- lects to present such a petition as therein mentioned within the following delays respectively, shall incur a penalty of one hundred dollars, that is to say : — (a.) In case a final dividend has l)een declared before the coming into force ting of the creditors, or at .M.'.tinK' any time thereafter, the insohent tiles with the,,.ii',i,oHi-' Assignee a consent in writing to his discharge, or a ,i'i,l','ilar^-,., deed of composition and discharge, signed by at IX/i"' len.st a majority in numl)er of the creditors who have '""'"'' then respectively proved claims of oiu; hundred dol- lars and upwards, or if at such first or at any sub- 8e(|uent meeting an offer in writing be made by the , insolvent to compound with his creditors, specify- ing the terms and conditions of the proiM)8ed com- position, and such offer he approved of by a ma- jority in number of such creditors present at such ■^^ m I ¥1 ■M yn INSOLVKNT ACT OF 1S7.5. moetinif, the Assiifnce shall call another meetinif ol the creditors to tak«^ such ''onsent or such dood or otler of composition and discharge into considera- tion ; and in every case such deed of composition orolFer of composition shidl he on condition, whether the same he expressed or not. that if the same be carried out, the insolvent shall pay the costs incurref tho Act of 1800. \» tiiiit Huctiori, iKiHidus ro<|iiiriiig thu luixjority in iniiul)or, ru<|iiiruil that that majority mIiouIiI rupnmoiit at Ivint thnr-fintrths in ivi/uc, hut from thtt remling of thu a'Jml and (>lNt RuctionH of tluH Act, a majority in valuu wonid Htill appuar to bu nocussary. This powor hoing statutory must bo oxorciHud hiiitu fiili for tlio hunetit of all tho oroditorn. If, tlioroforo, thoru ifi a fraudiiK'iit hai-gain for tliu honotit of hoiuo of tho croditors, or if the majority of the oroditorH are induced )iy friendly feelings towards thu del)tor to accept a composition greatly diHi>roportioned to the assets, tho court will hold the deed not to be binding on a non-assenting creditor ; but if the assenting majority appuar to have exercised their discretion himajiil, for tlm benotit of tho creditors, tljo court will not sit in review on tho «'./.■,< vs. llnujU, II Ad. i^ E. WAW). If one creditor makes a secret bargain for an additional sum or security for himself as tho condition of his accepting the omposition, such bar.,'ain will not only be absolutely void, but it will entitle the other creditors to set aside the com- position and resort to their tiriginal debts (/'iOij/Zm/i vs. Tennent, L. R. 2 i). B. 4J>) ; and stjch creditor will be bound by a rolease contained in tho deed, although it be void against the other creditors (Hx parte iHiver, 4 Do O. & 8m. 354) ; and it would seem that such creditor will not, if tho comixmition bu not paid an4). And where a debtor obtained the cimsent of ono of his creditors to a composition by a secret promise to pay his debt in full, which promise ho (,*« IMPOSITION AND DISCllAmiK. })1 porfnrmod, and afterwards ))ticanie banknipt, tliu uruditor waa not allowed til priivti a iiuw dtibt without first dudiicting thv auiiiH so paid tu- yoiid thu furiiiur uuinpoHitioii {Hj- parte Mintuii, 1 M. iV A. 440 ; .') D. iV' o. m»). (living up part of atock to acrudttoriseviduncoof fraudulent preference (/u »v ^t<(»f, 3 L. J. U. (.'. (N. S.J '2\iA). Unnuuessary for creditora to prove dubta to enable them to uxeciito deed (//I re Lmajt, 4 L. .1. U. C. [N. 8.] 283). To a plea of di8charf(u voniiriiiod Vjy the judge, the plaintiff replied a corrupt agruoment botwoon the insolvent and D. «k Co., parties to the deed of composition and diHcharge, that in cunsideration of executing,' it D. & Co. should receive an additional sum above the compoHitiuu for which the insolvent ^ave theia his note, and that the plaintiff and . without their knowledge or consent, after the accrual of the claim and \, )re ac- tion, released the other defendant, the said release being headed as fol- lows : — Instdvent Act of 1804, &c. : Heltl that jilea bad, for the court was bound to look upon the plea us setting up a discharge under the Insolvent Act of 18(>4, and by section '.), sub-section 4 of that Act, the plaintiff's rights were expressly preserved to him against all other peracjus liable fur or with the insolvent (Fowler vs. reirin et -^- '/ /A PhotDgraphic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. M5S0 (716) 873-4503 5i>''% l^^M h^ ^BI?P 92 INSOLVENT ACT OF 1875. composition and discharge, dated 8th August, was filed on the 14th Sept., 1868, not being then signed by the insolvents. It was confirmed by the county judge on 2nd December, 1868, which confirmation was reversed in March following, on the ground that the insolvents had not executed it. Afterwards in same month the insolvents executed the deed without any previous leave from the judge, and without refiUng it, and they then set it up as a defence to this action previously brought on note : Held that the plaintiff, a non-assenting creditor, was not bound by this deed, for the members of the insolvent firm had individual credit- ors, and it provided only for partnership debts (Allan vs. Garratt et al. 30 Q. B. U. C. 165). Held, 1. That a deed of composition and discharge under section 9 of the Insolvent Act of 1864, pixrporting to be between the majority of the creditors of $100 and upwards of the first part, and the insolvents of the second part, is valid. 2. A creditor who has accepted the terms of a deed of composition cannot afterwards contest the confirmation of the discharge. 3. The debt of a secured creditor who has .elected to accept his security in full of his claim, and obtained the consent of the Assignee to such^lec- tion, is not to be estimated in considering the amount of such indebted- ness (In re Lawson et al. 5 L. J. U. C. [N. S.] 232). A deed of composition and discharge under section 8, sub-section 4, of the Act of 1864, must be signed by the insolvent, and must provide for the separate c'-'^ditors of each partner as well as those o.' the firm (In re Garratt et al. 28 Q. B. U. C. 266). A deed of composition and discharge made without any proceedings in insolvency, without any Assignee being appointed, and apparently wholly outside the Insolvent Court, cannot be a bar to non-assenting creditors (Gi-een vs. Sumi, 22 C. P. U. C. 307). An insolvent having compounded with his creditors and had his goods restored to him, resumed business with the knowledge of his Assignee and creditors. It was subsequently ascertained that he had been guilty of a fraud which avoided his discharge, whereupon he absconded, and an at- tachment under the Insolvent Act of 1869 was sued out against him by his subsequent creditors : Held that they were entitled to be paid out of his assets in priority to the former creditors (Btichanan vs. Smith, 17 Grant, 208. Affirmed on rehearing, S. C. 18 Grant, 41). Declaration on common counts, plea an assignment under the Insol- vent Act of 1869, to an Official Assignee. Replication : That before action the Assignee, in conformity with a deed of composition, transferred the estate to the plaintiff. Rejoinder : That after .#^ COMPOSITION AND DISCHARGE. 93 the deposit of the deed of composition and discharge with the Assignee by the plaintiff, that the Assignee did not immediately give notice of such deposit, as required by the Act : Held on demurrer : That rejoinder good, for by the statute the giving of such notice is a condition precedent to the reconveyance by the Assignee {Nicholson vs. Gunn, 35 Q. B. U. C . 7). An antecedent debt in respect of which an insolvent has duly received his dischai'ge under the Insolvent Acts of 1864 and 1869, is a continuing debt in conscience, and sufficient consideration for a new promise to pay it {Amtin vs. Gordon, 32 Q. B. U. C. 621). When creditors are called upon to accept a composition, they are enti- tled to know where the goods and money entrusted to the debtor are gone, and to what cause the loss is to be attributed {Hood vs. Dodds, 19 Grant, 639). A person who carried on business in partnership executed a composition deed for the benefit of his separate creditors only, which was assenied to by the requisite statutory majority of separate creditors. The firm was also indebted, and it was held ^at the deed was not binding on a dissent- ing separate creditor, for it should have provided for all classes of the in- solvent's creditors {Ex parte Olen, 2 L. R. Chy. 670 ; Telby vs. Wa')i,lesti, 2 L. R. Ex. 2] and 276). A deed of composition made between the members of a partnership and the joint creditors of the firm, without any reference to the separate cre- ditors of the different members of the firm, is invalid {Tomlin vs. Dutton etcd. 3L. R. Q. B. 466). Where a non-assenting creditor sues a debtor who has executed a com- position deed containing a release for a debt due before the execution of the deed, and the debtor neglects to plead the release, he is estopped from setting it up to defeat the execution {Eossi vs. Bailey, 3 L. R. Q. B. 621). An unreasonable provision in a composition deed will render it invalid against non-assenting creditors {Baldwin vs. Pell, 10 L. T. Rep. [N. S.] 493 ; Armitfuie vs. Baker, 10 L. T. Rep. [N. S.] 526). A composition deed by which the creditors are entitled to the composi- tion only on signing is bad {Martin vs. Cfribble, 13 W. R. 691). As to the effect of composition deed to bind non-assenting creditors, and as to what are reasonable conditions in such deeds (see Briarlot vs. Mills, L. R. 1 Q. B. 104 ; Bond et al vs. Weston, L. R. 1 Q. B. 169 ; Gresty vs. O-ibaon, L. R. 1 Ex. 112 ; Reves et al vs. Watts, L. R. 1 Q. B. 412 ; Coles vs. Turner, L. R. 1 C. P. 373 ; Brooks vs. Jennings L. R. 1 C. P. 476 ; Blumberg vs. Rose, L. R. 1 Ex. 232 ; Oreenbcrg vs. Ward, L. R. 1 C. P. 586 ; Jacobson vs. Lambert, L. R. 2 Ex. 294 ; McLaren va. Baxter, 2 L. i m — Il« wm 94 INSOLVENT ACT OP 1875. R. C. P. 559 ; Isaacs vs. Green, 2 L. R. Ex. 352 ; Bailey vs. Bowen, 3 L. R. Q. B. 133 ; FitzPatrick vs. Bourne, 3 L. R. Q. B. Ex. 233 ; Sowrey vs. Law, 3 L. R. Q. B. 281.) As to what are unreasonable provisions (see Giddiv^s vs. Penning, 1 L. R. Ex. 325 ; Latham vs. Lafone, 2 L. R. Ex. 115 ; Baker vs. Painter, 2 L. R. C. P. 492 ; Oldis vs. Armston, 2 L. R. Ex. 406 ; Wigfield vs. Nichol- son, 3 L. R. Q. B. 450.) A complete surrendering over of the assets is not indispensable to the validity of a deed of composition as against non-assenting creditors {Ex parte Morgan, 7 L. T. R. [N. S.J 730 ; and Ex parte Rawlings, 7 L. T. R. [N. S.] 582. And see in re Smith, 4 P. R. 89, C. L. Cham. ; in re Wallis et al, 29 Q. B. 313 ; in re Thomas, 15 Grant, 196 ; Hood vs. Dodd, 19 Grant 639 ; Martin vs. Brunell et al, 4 P. R. 229 ; Shaw vs. Massie, 21 C. P. U?C. 266 ; Dredge vs. Watson, 33 Q, B. U. C. 165 ; Davidson vs. Perry, 23 C. P. U. C. 346 ; in re Waddell, 2 L. J. U. C. [N. S.] 242 ; Ex parte Wilmott, in re Thompson, 2 L. R. Chy. 795 ; Haggarth vs. Taylor, 2 L. R. Ex. 105 ; Sharland vs. Spe')ice, 2 L. R. C. P. 456 ; Robertson vs. Goss, 2 L. R. Ex. 396 ; Kitchen vs. Hawkins„2L. R, C. P. 22 ; Kent vs. Tompkin- son, 2 L. R. C. P. 502 ; Marsh vs. Higgins, 19 L. J. 0. P. 297 ; Waugh vs. Middleton, 8 Ex. 352 ; Larpent vs. Biby, 24 L. J. Q. B. 301 ; Lama- ster vs. Ellice, 31 L. J. Chy. 789. For form of deed of Composition and discharge see Form 5, and for form of Confirmation of discharge see 5 A. Notice of meeting. SO. Such meeting shall be called by at least one advertisement published, in the Official Gazette stat- ing the time, place and object of the meeting, and also by letter or card postpaid addressed by mail, at least ten days before the meeting, to each of the creditors mentioned in the list of creditors furnished by the insolvent, and to all other creditors who may have proved their claims, although not men- tioned in the said list, indicating in substance, in addition to the time, place and object of the meeting, the terms and conditions of the proposed composi- tion and discharge : and such meeting shall not take COMPOSITION AND DISCHARGE. place less than fifteen days after the first publica- tion of the said advertisement. This section is new. 95 Discharge SI, The Creditors present at the meeting to take ^proTed into consideration the proposed discharge, or com- ""^ ""*■ position and discharge, may by resolution to that effect express their approval thereof or dissent therefrom ; and any creditor may at any time before or during the said meeting, file with the Assignee his objections in w^riting to the proposed discharge or composition and^dischar^^e. This section is new. The 97th section of the Insolvent Act of 1869 merely provided that on the deed of composition being [deposited with the Assignee, he was to give immediate notice of the same by advertisement. And if no opposition was made within throe days after the last publi- cation of the notice the Assignee was required to act on such deed accord- ~ng to its terms. Proceed- 5*. If at the close of the meeting or at any time consent is* thereafter the insolvent has obtained the assent to his discharge or to the proposed composition and discharge, of a majority in number of his creditors who have proved claims to the amount of one hun- dred dollars and upwards, and who represent at least three-fourths in value of all the claims of one hundred dollars and upwards, which have been proved, the Assignee shall annex to the deed or consent to a discharge, or to the deed or offer of obtained. Certificate composition and discharge a certificate to that effect, it shall in which he shall state the total number and total amount of claims of one hundred dollars and 5f ^11 '*! HIIWI*""" 99 INSOLVENT ACT OF 1875. Further certificate. 1.^ Probable ratio of dividend to be stat' ed. upwards which have been proved, the number of creditors who have given their written assent to the discharge or to the proposed composition and discharge of the insolvent, and the amount of proved claims of one hundred dollars and upwards which they represent. The Assignee shall further annex to such certificate a copy of any resolution adopted at the meeting of creditors in reference to the discharge, or to the proposed composition and discharge, and all the objections which may have been filed with him to such discharge or composition and discharge, together with a certificate as to the amount of claims of the creditors who shall J;iave agreed to or opposed such resolution, or who may have filed objections in writing to such discharge or proposed composi- tion and discharge, indicating the amount of such claims of one hundred dollars and upwards which have been proved, and whether from their nature they will be affected by the proposed discharge or composition and discharge. • The Assignee shall further state in such certifi- cate the ratio of dividend actually declared and likely to be realized out of the estate for the unsecured creditors, and shall, without delay, trans- mit siich certificate to the clerk or prothonotary of the court in the county or district wherein the pro- ceedings are carried on. The above section is new. The formalities required are such as will prove great safeguards against confirmations being improvidently granted, as the certificates required will place the judge in possession of all desired information in regard to the insolvent's estate, and the views which the creditors entertain of the manner in which he has been conducting his business. This information, which will be contained in the required cer- tificates, will also greatly facilitate the examination of the insolvent before COMPOSITION AND DISCHARGE, 97 the judge, on his application for a confirmation of the deed of composi- tion and discharge. m S3. An insolvent who has procured a consent to AppUca- tion for his discharge, or the execution of a deed of compo- confima- sition and discharge, and the certificate of the charge. Assignee, within the meaning of this Act, may tile in the office of the court the consent or deed of composition and discharge, with such certificate Notice, annexed, and may then give notice (Form J) of the same being so filed and of his intention to apply by petition, to the Court in the Provinces of Quebec and Nova Scotia, or in the Provinces of Ontario, New Brunswick, Prince Edward Island, British Columbia and Manitoba (and in Nova Scotia, when county judges are appointed there), to the judge, on a day named in such notice (which, however, shall not be before the day on which a dividend may be declared under this Act), for a confirmation Notice, of the discharge effected thereby ; and such notice *'^^''®"* shall be given by one advertisement in the Official Grazette, and also by letter or card, postpaid, ad- dressed to each of the creditors, by mail, at least one imonth before presenting the petition to the Opposi- court or judge ; and upon such application, any ere- aUowed. ditor of the insolvent, or the Assignee under the authority of the creditors, may appear and oppose such confirmation. ^1 W ' '-^ si M As to grounds for opposing such confirmation, see notes to section 56 infra. * 1 •i4. If it appears that all the notices and for- Confirma- malities required by law have been given and ob- chw-ge. '"t'-^vl 98 INSOLVENT ACT OF 1875. k served, and that no objections have been made to the proposed discharge or composition and discharge, the court or judge may without further notice and on the petition of the insolvent confirm his dis- charge or the proposed composition and discharge; but in case it appears that objections have been made to such discharge or composition and dis- charge, the application of the insolvent shall not be heard until at least three days' notice shall have been given of the same by the insolvent to the Assignee, the Inspectors and to the creditors who shall have objected to the said discharge, or proposed composition and discharge. A consent to a discharge of an insolvent is operative even without an assignment, provided the insolvent makes and files an affidavit that he has no estate to assign {In re Ferry 2 L. J. [N . S .] 75). A discharge under the Insolvent Act does not prevent a party from being committed on a judgment summons, under the Division Court Acts. If it did, a party applying for protection from arrest hould show clearly that the name of the plaintiif was in his schedule, and this is not suffi- ciently done by putting in a copy of the schedule, without swearing that the plaintiff's name is there {In re Mackay et al. vs. Goodson, 27 Q. B. 263). Affidavit 55. The court or judge shall not confirm tbe dis- by insol- ... vent to be charge or proposed composition and discharge of ^'° , the insolvent, unless he shall have produced with his application an affidavit in the Form K, showing that no one of the creditors who have signed the same has been induced to do so by any preferential payment, promise of payment or advantage what- soever made, secured or promised to Mm by or on behalf of the insolvent, and a certificate from the Assignee that he has dehvered a sworn statement of his liabilitieii and assets as required by this Act. This section is new. .m\ COMPOSITION AND DISCHARGE. 99 tS6. The insolvent shall not be entitled to a con- When in- firmation of his discharge or of a deed of composi- shall not tion and discharge if it appears to the court or judge titled to that he has not obtained the assent of the propor-tfo'jf^' tion of his creditors in number and value required ^'^^^*'^®- by this Act to grant such discharge or enter into such deed of composition and discharge, or that he has been guilty of any fraud or fraudulent prefer- ence within the meaning of this Act, or of fraud or evil practice in procuring the consent of the credi- tors to the discharge, or their execution of the deed of composition and discharge, as the case may be, or of fraudulent retention and concealment of some portion of his estate or effects, or of evasion, prevari- cation or false swearing upon examination as to his estate and effects, or that the insolvent has not kept Proper an account-book shewing his receipts and disburse- must have ments of cash, and such other books of account as are suitable for his trade, or that if, having at any time kept such book or books, he has refused to pro- duce or deliver them to the Assignee, or is wilfully in default to obey any provision of this Act or any order of the court or judge; but in the Provinces of Proviso as Ontario and Quebec, the omission to keep suchpro^cS, books before the coming into force of the Insolvent Act of 1864, and in the Provinces of New Bruns- wick and Nova Scotia, such omission previous to the coming into force of the Insolvent Act of 1869, and in the Provinces of British Columbia, Prince Edward Island or Manitoba, such omission previous to the coming into force of this Act, shall not be a sufficient ground for refusing the confirmation of the discharge of an insolvent : 'it I i Aj*- I 100 INSOLVENT ACT OF 1875. Proviso as And provided fm*ther that any act on the part of and frau- the insolvent, which might be held to be an act of pref° fraud or fraudulent preference within the meaning '^°''^'' of the Insolvent Act of 1864 or of 1869, or of this Act, but which would not amount to fraud if the said Acts or this Act had not been passed, shall not be a ground for refusing the confirmation of the discharge of any insolvent, if such act was done by the insolvent, in the Province of Ontario or Quebec, before the coming into force of the Insolvent Act of 1864, or in the Province of Nova Scotia or New Brunswick before the coming into force of the In- solvent Act of 1869, or in the Province of British Columbia, Prince Edward Island or Manitoba, be- fore the coming into force of this Act. The judge in insolvency refused an insolvent his discharge, on the grounds — 1. That he had made a preferential assignment in 1857 ; 2. Had kept no books of account showing receipts and disbursements of cash, and other books suitable for his trade {In re Parr, 17 C. P. 621). It appeared on an application by an insolvent for his discharge under the Insolvent Act of 1864 that he had,{within three months before his assignment, paid one of his creditors in full under such circumstances as was considered to amount to a fraudulent preference, and had neglected to keep proper cash books or books of account suitable to his trade. The county judge granted a discharge suspensively, to take effect four months after the order (in re Lamb, 4 P . R. 16 C. L. Cham). The requirements of the Act on debtors asking for their discharge should be peremptorily insisted on ; ib. Held that the facts set forth in this case, though unfavourable to the insolvent, were distinguishable from acts or other misconduct constituting fraud, and that unless the latter be shewn, the insolvent is entitle<{ to the benefit of the statute {in re ^ith, 4 P. R. 89 C. L. Cham). The mere fact of a person in insolvent circumstances not defending one action and defending, and thus delaying, another, is not illegal by com- mon law ; but under the Insolvent Act it is fraud for an insolvent to cause his goods to be taken in execution to the prejudice of his general m COMPOSITION AND DISCHARGE. 101 creditors, even though the preferred claim bo a just one. It was not decided whether this would avoid the judgment ; but, if not, it was never- theless an act of fraud, for which some punishment should be awarded, though not necessarily to the extent of a perpetual refusal of the insol- vent's discharge {In re Jones infra). The insolvent had the possibility of an interest under a will, which was omitted from his schedule of assets as being of no value : Hchl that this omission was not an act of fraud {in re Jones, 4 P. R. 317, C L. Cham). Gambling by a person who subsequently claims the benefit of the Act is not fraud within the meaning of the Act of 1864, and queried whether gambling is a fraud at all under this Act ; ib. Discharge refused where, because assignment had not been made to the Assignee where insolvent carried on business, and was not in duplicate and insolvent had kept no proper books of account {in re Sullivan, 5 L. J. U. C. [N. S.] 71). A purchase of goods by persons unable to pay their debts in full is not fraudulent within section 8, or a reason for refusing the discharge unlets such inability is concealed from the creditor with intent to defraud him (in re Garratt et al, 28 Q. B. U. C. 266). Fraud in contracting debts before the Act of 1864 is not to be excluded from consideration on an application to confirm the discharge {in re Owens, 12 Grant 560). Where a trader whose property was heavily mortgaged and had large overdue debts which he could not pay, obtained credit from Montreal merchants, concealing his true position, alleging that he was worth ^4000 more than he owed, and that he had no engagements he could not meet. This was held such a fraud as disentitled him to a discharge ; ib. A trader having discovered that he could not pay in full continued his business in hope, which was not shewn to be absurd or unreasonable, that he would thereby be enabled to do so, and in course of business so con- tinued, contracted some new debts, but was unsuccessful and found it necessary to assign : Held that he was not thereby disentitled to his dis- charge {in re Holt et al, 13 Grant 568). In such case it may or may not be his duty to discontinue his trade according to circumstances. Continuing it may be fraud but it is not necessarily so ; ib. The absence of any satisfactory statement how it came that a credit balance of $15,000 a short time before the insolvency was turned" into a debit of nearly $13,000 ; the loan of $1700 by the insolvent to his brother to carry on a business which failed, and which was carried on without capital ; the receipt of ^$1250 by the insolvent a few months ii 4! l'^ M i ,]' . j:'.<;| BWP 102 INSOLVENT ACT OF 1875. before his insolvency, without any reasonable account of what had become of it were considered to be circumstances which showed that the insolvent was not entitled to his final certificate {Uoud vs. Dodds, 19 Grant 639). A discharge will not be granted if insolvent has neglected to keep proper books (in re Beare, L. J., Ont., for 1867, page 295). The following decisions which have been rendered in Montreal on con- testation of applications for discharge under the Act of 1864, may partly serve to illustrate this section : In re Alex. Thurber vs. Law, Yoniuj & Go, contesting. Thurber ap- plied for confirmation of his discharge. Law, Young & Co. and other cre- ditors contested it on tlie following grounds : Ist. That Insolvent was bankrupt to his own kn(Jwledgo in 1863, and was eo continuously up to his assignment in May, 1 865. 2ncl. That he had been guilty of making fraudulent preferences. Per curiam (Monk J. ) — In the first place it is alleged that the insolvent had made several purchases in contemplation of bankruptcy. He had been doing business in Montreal for several years past. He had evidently no kaowledge of book-keeping. On the 30th December, 1863, he took stock. At ths.t time he considered himself to be perfectly solvent. T>-- : ihe ba- lance iheet showed that his solvency depended upon a great many out- standing debts which could not be considered of much value. He had little or no capital, but nevertheless his transactions were very large. During 1864 and 1865 he made purchases from Messrs. Law, Young «& Co. and other parties, and the first pretention :■> that he made these pur- chases kno\ving that he was insolvent and in fraudulent contemplation of bankruptcy. Further, that in 1865, when on the very verge of bank- ruptcy, he credited his wife with $3,000, with interest. It must be c(jn- fessed this had a suspicious look, as well as the circumstance that he made no balance sheet in 1864. Yet I do not find in these circumstances suffi- cient evidence to justify me in thinking that at the time Thurber knew himself to be insolvent. During the time he was making these purchases he was borrowing money at heavy interest from brokers, and obtaining large discounts from the banks. He appears all the time to have believed he could pull through. The $3,000 credited to his wife was done at the suggestion of his book-keeper. It must be further borne in mind that two-thirds of his creditors had consented to his discharge. This was a fact which should have considerable weight. There was another fact : a note of his for upwards of $3,000 was coming due on the 15th May. Three days previously he went to the bank and offered $2,000. The bank said they would not take the $2,000, but they would hold the note over COMPOSITION AND DISCHAIUIE. 103 for a few days. Ho appears to have struggled hard to maintain his credit. This did not iook like the conduct of a man about tr ake a 'rauuulent bankruptcy. The court could not, in view of all tuc- 'rcumstancos, go to the extent of saying that ho was aware of and made these purchases in contemplation of insolvency. The second ground urged was fraudulent preferences. He did not con- aider that the payments to brokers a few days before his declaration of in- solvency amounted to fraud sufficient to refuse the application for a con- firmation of his discharge (11 L. C . Jur. 46). In re Temped and Dnrhes)ia\j et al. contestants. The judgment in this ciise arose on an application for discharge by Tempest, which Duchesnay and other creditors refused. The creditors had given no discharge to the applicant, and after the delay of one year from the date of the assignment he applied for it from the court. The contestation alleged : 1 . A fraudulent retention of moneys belonging to tjie estate. 2. That the firm in which the insolvent had been a partner had pur- chased goods on credit, knowing themselves at the time to have been in- solvent, and concealing the fact from the vendors. 3. That the firm had given fraudulent preferences. A statement of the cii'cumstances on which these charges were based would exceed the space at our command. The legal pr^'nts decided by the contestation must suffice for the present purpose. They are as follows : 1. That he who buys goods on credit implicitly assures the vendor, if not of the actual sufficiency of the assets to meet his liabilities, at least that there is a reasonable probability of such sufficiency. 2. That while the vendor on credit takes the risk of the subsequent in- solvency of the debtor, he is not supposed to contemplate the escape of the bankruptcy of the debtor by reason of a state of insolvency actually exist- ing at the time of his purchase. 3. That where a party buys goods on credit knowing his affiEkirs to be in a bad state, although he may have no intention of defrauding the vendor, yet in the eye of the law he does a wrong, and having subsequently de- clared his insolvency, the court will be justified in suspending his dis- charge for a period under its discretionary power (11 L. C. Jur. 6). In re William M. Freer and Gilmour et al. contesting. In this case Freer had assigned in February, 1867. On 26th of March, 1868, he peti- tioned for his discharge under the Act of 1864, and alleged that he had failed to obtain the requisite number of creditors to consent to a discharge, and therefore asked it from the court. This application was contested by Gilmour & Co. on the ground of fraud. ^^ij 104- INSOLVENT ACT OF 1875. •w In evidence it appeared that Freer, as a i>artner in the firm of Freer, Boyd & Co. , purchased from contestants on 28th January, 1867, fifty -five barrels of potash strictly for cash, and valued at $2,103.11. On the 29th Freer took delivery, and said he would check the account, and about 1 P. M. on that day he would pay the price. The contestants' agents, after repeated demands for the money, failed to obtain it, the insolvent making various excuses and promises. On the 4th of February, six days after the delivery of the potash. Freer said he had failed. It further appeared that he had sold and been paid for the potash on the 3lBt January. On these facts the court (Torrance, J. ) held that the insolvent had been guilty of fraud within the meaning of the Act, and his discharge was ac- cordingly suspended for five years (See 12, L. C. Jur. 315). The same judge in October term (1869) suspended a discharge for two years on the grounds of reckless trading, selling goods below cost, and not keeping proper books (Ex parte Tessier vs. Martin et al. contesting, Popham). Powers of S7. The court or judge as the case may be, upon Judge.°'^ hearing the application for confirmation of such dis- charge, the objections thereto, and any evidence adduced, shall have power to make an order either confirming the discharge or annulling the same according to the eflect of the e vidence so adduced. In certain cases char- acter of discharge maybe modified. But if such evidence should be insufficient to sustain any of the grounds hereinbefore detailed as forming valid grounds for contesting such confirma- tion, but should nevertheless establish that the insolvent has been guilty of misconduct in the management of his business, by extravagance in his expenses, recklessness in endorsing or becoming surety for others, continuing his trade unduly after he believed himself to be insolvent, incurring debts without a reasonable expectation of paying them (of which reasonable expectation the proof shall lie on him, if such debt was contracted iwithin thirty days of the demand made of an assignment or for the COMPOSITION AND DISCHARGE. 105 issue of a writ of attachment), or negligence in keep- ing his books and accounts ; or if such facts be May i)e ° suspended alleged by any contestation praying for the or made suspension oi the discharge oi the insolvent, or class. for its classification as second class, the court or judge may thereupon order the suspension of the operation of the discharge of the insolvent for a period not exceeding five years, or may declare the discharge to be of the second class, or both according to the discretion of the court or judge. This section is a re-enactment of the 103rd section of the Act of 1869. By the English Bankruptcy Act of 1849 certificates of conformity were divided into three classes, which were awarded according to the deserts of the bankrupt. The first class contains a declaration that the bankruptcy arose from unavoidable losses and misfortunes, the second class a declaration that the bankruptcy had not arisen wholly from unavoidable losses and misfortunes, and the third class a declaration that the bank- ruptcy had not arisen from unavoidable losses or misfortunes . The cer- tificates of each class, however, had the same effect of discharging the bankrupt from his debts. The commissioners were also empowered, in certain cases, to suspend or refuse a certificate, or to annex to it special conditions. By the English Act of 1861, the classification of certificates were abolished, and by the English Act of 1869, a creditor could not obtain discharge without the consent of his creditors, unless his estate paid ten shillings in the £, or would be sufficient for that purpose but for the negligence of the trustee. The Insolvent Act of 1864, followed the English Act of 1861, in that there were no classification of certificates of discharge or meritorious or degrading distinctions whatever ; and although a discharge might be granted conditionally or suspensively, yet when the condition was ful- filled or the suspension had expired, all orders of discharge possessed the same value. An order of discharge may be granted subject to any condition touching any salary, pay, emoluments, profits, wages, earnings or income which may afterwards become due to the bankrupt, and touching after acquired property of the bankrupt {Re Anderson, 6 L. T. Rep., [N. S.], 837, Bank., re Neivman, 6 L. T. Rep. [N.S.], 666, Bank). It seems that it is not in 1 il ■■'I ■I ' n ■J iKW 106 INSOLVENT ACT OF 1875. 'If the discretionary power of the court, to refuse or suspend the order of discharge, when the bankrupt has not been guilty of conduct amounting to a fraud under this Act (Ex parte Udall re Mew, 8 L. T. Rep. [N.S.], 732, ch. on appeal. Ex parte Glass and Elliott, Be Boswell 6 L. T. Rep. [N. S.], 407). Much the same effect as a refusal of a discharge has been obtained in England by an adjournment of a debtor's examination, sine die (Re Parsons, 6 L. T. Rep. [N.S.J, 61 Bank. Irish). A discharge cannot be refused because applied for to get rid of damages in an action of seduc- tion (Ex parte Crabtree, Re Taylor, 10. L. T., Rep. [N.S.], 361), nor does the fact of damages and costs being recovered against a Bankrupt in an action for breach of promise of marriage, afford any ground for opposition to his discharge (Re Pearse, 9 L T., Rep. [N. S.], 349.) As to a discharge under the Canadian Act, without the express consent of the creditor to any debt due as damages for seduction. See section 63. post. If divi- SH. Whenever it appears that the estate of the less than insolveiit has not paid or is not likely to realize for discharge the Creditors a dividend of thirty-three cents in the refuseiior dollar on the unsecured claims, and suiRcient siwpend- account is not given for the deficiency, the court or judge may, in its or his discretion, suspend or refuse altogether the discharge of the insolvent. This section is new. The English Act of 1869 provided that the debtor should not be entitled to a discharge without the consent of his creditors, unless his estate paid 10 shillings on the pound. Deed of Composi- tion may be coruh- tional. 59. A deed of composition and discharge may be made imder this Act either in consideration of a composition payable in cash, or on terms of credit, or partially for cash and partially on credit ; and the payment of such composition may be secured or not, according to the pleasure of the creditors sign- ing it ; and the discharge therein contained may be absolute, or may be conditional upon the condition HM COMPOSITION AND DISCHARGE. 107 of the composition being satisfied; but if such dis- if condi- , , Ti-T ii -i- 1 • tion be not charge be conditional upon the composition being fulfilled. paid, and the deed of composition and discharge therein contained should cease to have effect, the Assignee shall immediately resume possession of the estate and effects of the insolvent in the state and condition in which they shall then be ; provided always, that the title of any buna fide purchaser of any of the assets of the estate shall not be impaired or affected by this section ; but the creditors holding Rank of 1 • 1 • 1 1 1 1 n • ^ creditors claims which were provable before the execution thereafter, of such deed, shall not rank, vote or be computed as creditors concurrently with those who have acquired claims subsequent to the execution thereof,^ for any greater sum than the balance of composition remaining unpaid; but after such subsequent creditors have received dividends to the amount of their claims, then such original creditors shall have the right ^ o rank for the entire balance of their original claims then remaining unpaid, and shall be held for all purposes for which the proportion of creditors in value require to be ascertained, to be creditors for the full amount of such last mentioned balance. Thia sectioT is similar to the 95th section of the Act of 1869. An insolvent compounded with his creditors and had his goods returned to him ; he thereupon resumed his business with the knowledge of his Assignee and creditors, and contracted new debts. It was subsequently discovered that he had been guilty of fraud which avoided his discharge, whereupon he absconded and an attachment was issued out against him by his subsefjuent creditors : Held, that they were entitled to be paid out of his assets in preference to his former creditors (Bnchanan vs. Smith, 17 Grant 208 ; affirmed on appeal, 18 Grant 41 ; see Tucker vs. Hernaman^ Sma. & Giff. 394, 4 De G. M. & G. 395j White vs. Garden, 10 C. B. 919 ; Steverisun vs. Neionham, 13 C. B. 285 ; Pease vs. Gloahe, L. R. 1 P. C. 219). :ftW 1 '~M FWWi^"*" 108 INSOLVENT ACT OF 1875. Deed of reconvey- ance by Assignee to Insol- vent. Its e£Fect. If deed of composi- tion De contested. Form of deed. 60. So soon as a deed of composition and dis- charge shall have been executed as aforesaid, it shall be the duty of the Assignee to re-convey the estate to the insolvent; and the re-conveyance by the Assignee to the Insolvent or to any person for him, or whom he may appoint, of any part of his estate or effects, whether real or personal, if made in con- formity with the terms of a valid deed of composi- tion and discharge, shall have the same effect (except as the same may be otherwise agreed by the conditions of such deed or re-conveyance) as if such property had been sold by the Assignee in the ordinary course, and after all the preliminary pro- ceedings, notices and formalities herein required for such sale ; and if such deed of composition and discharge be contested, and pending such contesta- tion, the judge may suspend any payment or instal- ment of the composition falling due under the terms of such deed ; and the deed of re-conveyance need not contain any further or more special description of the effects and property re-conveyed, than is required to be inserted in the deed of assignment, and may be enregistered in like manner and with like effect ; and such deed may be executed before witnesses or before notaries, according to the exi- gency of the law of the place where such deed of composition and discharge is to be executed. This section is similar to the !)6th section of the Act of 1869. Effect of 01. The confirmation of the discharge of a debtor confirma- tion of dis- in the manner herein provided shall absolutely free what ' and discharge him, after an assignment, or after his aff*«J^^. estate has been put in compulsory liquidation, by COMPOSITION AND DISCHARGE. 109 the issue of a writ of attachment, from all liabilities whatsoever (except such as are hereinafter specially excepted) existing against him and proveable against his estate, whether the same be secured in part or in whole by any mortgage, hypothec, lien or collateral security of any kind or not, which are mentioned or set forth in the statement of his affairs exhibited at the first meeting of his creditors, or which are shewn by any supplementary list of creditors furnished by the insolvent, previous to such discharge and in time to admit of the creditors therein mentioned obtaining the same dividend as other creditors upon his estate, or which appear by any claim subsequently furnished to the Assignee ; whether such debts be exigible or not at the time of his insolvency, or be contested in whole or in part, or be dependent on certain conditions or future contingency, and whether the hability for them be direct or indirect ; and if the holder of any negotia- Holders of ble paper is unknown to the insolvent, the inser- paper un- tion of the particulars of such paper in such state- insolvent. ment of affairs or supplementary list, with the declaration that the holder thereof is unknown to him, shall bring the debt represented by such paper, and the holder thereof, within the operation of this section. if This section is similar to the 98th sec. of the Act of 1869. A consent to a discharge of an insolvent is operative even without an assignment, provided the insolvent makes and files an affidavit that he has no estate or effects to assign (Be Perry, 2 L. J. U. C. [N. S.] 75). The court set aside with costs a Fi. Fa. lands issued on 7th June, 1805, and renewed from time to time until 4th June, 1867, in a case where a defendant obtained his discharge. On 30th March, 1867, plaintiff had proved his claim for full amount of ;S , 110 INSOLVENT ACT OF 1875. the judgment in the insolvent court, and had never attempted to take any proceedings under the writ, which he refused to withdraw although requested to do so (Dickinson vs. Bunnell, 19 C. P. U. 0. 21 6). To an action for attorney's costs, defendant pleaded his discharge under the Act of 1864, alleging that plaintiffs name and residence, with a state- ment of defendant's indebtedness to him, being for a balance of costs in two suits specified, were stated in his schedule filed, and that he was not aware before obtaining his discharge of the exact amount of such indebt- edness. The plaintiff replied that his name was not mentioned in the schedule for any sum or amount whatever : Held, on demurrer, that the debt due to the plaintiff was sufiiciently stated in the schedule (Cameron vs. Holland, 22 Q. B. U. C. 506). The statute is substantially complied with if the debt is set out in such a manner as cannot mislead (ib .). A creditor, although not named in the schedule annexed to the assign- ment, may oppose the confirmation of discharge. The insolvent should be present when the application is made for discharge (Jn re Stephenson, 1 L. J. U. C. [N. S.] 52). In an action on a promissory note, with a plea of discharge under the Insolvent Act, and replication that the discharge was obtained by fraud , defendant having concealed from Assignee certain promissory notes. It appeared from his own evidence that defendant, several months before his assignment, which was voluntary, desiring to raise money on his farm, one-fifth of which belonged to his wife, the value of her interest not being stated, gave his wife at least $300 of notes of a third person, she otherwise refusing to consent to a mortgage of the farm. It further appeared that the defendant had attempted to collect the notes, as he alleged, for his wife, and that the mortgage had been nearly paid off, but by what means was not shown : Held that the plaintiff was on this evidence entitled to re- cover (Golloghley vs. Graham, 22 C. P. U. C. 226). To an action on a promissory note and on the common money counts, defendant pleaded : 1. That after making note he became insolvent, and that a deed of composition was executed by a majority of his credit- ors, whereby he was discharged, which discharge was duly confirmed . 2. That after making note defendant became insolvent, and duly assigned to an Official Assignee, and duly set forth plaintiff's claim, which plain- tiff duly proved, after which a majority in number of creditors discharged defendant, which was duly confirmed. Replication to first (plea setting out, acknowledging receipt from As- signee of certain promissory notes endorsed for certain amounts and pay- able at certain dates, accepting same on payment, and stating that the COMPOSITION AND DISCHARGE. Ill creditors there named, of whom plaintiff was not one, duly discharged de- fendant. Replication to second* plea, that the alleged consent in writing was a deed of composition and discharge in above replication set out, and tliat in pursuance of said deed said Assignee restored defendant his estate. Replication on equitable grounds, that the coiMposition was not made in good faith, nor for as large amount as it should have been, as defendant well knew : Held on demurrer that the replications to the tirst and second pleas were good, the deed of composition as set out being insufficient, and that the first plea was bad : Held also that the equitable replication was bad {Shaw vs. Massie, 21 C. P. U. C. 266). In August, 1872,theplaintiff issueda /i. /a. against defendant's lands, a portion of which defendant, in November, sold to one K. On the 1st of May, 1873, defendant made an assignment in insolvency, and on the Slst obtained a deed of composition and discharge from the necessary propor- tion of his creditors. On the 12th of August this was confirmed by the county court judge, and on the 15th of August defendant's estate was re- conveyed to him. The plaintiff was one of the duly scheduled creditors, but took no part in the insolvency proceedings, and although requested to remove his writ refused to do so, and advertised the lands for sale, contending that the sale to K was a withdrawal of those lands from the defendant's assets : Held that the plaintiff's debt was discharged by the insolvency proceed- ings ; that the fact of sale to K could not alter the plain tifi''s position, and that his only remedy was under the composition and discharge. The proceedings on the Ji, fa. after the assignment were set aside {Davidson vs. Feriy, 23 C. P. U. C. 346). To an action of covenant in a mortgage to pay money, defendant plead- ed that, becoming insolvent after the execution of the mortgage, he made an assignment ; that plaintiff's name was known as that of Wood estate, and was so described in the schedule submitted to the Assignee and credi- tors ; that the plaintifl" resided abroad, and was rejiresented in Canada liy I\I, who had notice of the appointment of said Assignee ; that on the expiry of a year defendant obtained his discharge absolutely, by which ho was discharged from plaintifl''s claim. Replication that order for discharge was made before the 1st of September, 1869, and that the plaintiff's name was not mentioned as a creditor in any schedule, and his claim was never proved against defendant's estate. Rejoinder, that plaintiff's claim was known as that of the Wood estate, plaintiff representing and being en- titled to that estate, and was so entered in the schedule filed by the de- fendant with the Assignee, and that plaintiff was represented by M, who '' i 112 INSOLVENT ACT OF 1875. had notice : Held, on demurrer, rejoindetgood {King vs. Smith, 19 C. P. U. C. 319, distinguished Farrell vs. O'Neill, 22 C. P. U. C. 31. And see notes to Section 49). Plea to u promissory note, an absolute discharge duly obtained under the Act from the judge from plaintiff's and all other debts. Replication, that plaintiff's name as a creditor and the said note and cause of action were not mentioned in defendant's schedule, annexed to his assignment, nor in any supplementary schedule, as required by law, and the debt was never proved against the estate : Hekl on demurrer that replication good. That it is still necessary, under the Insolvent Acts, to have a schedule of creditors prepared or annexed to the deed of assignment, and that the effect of a discharge under the Insolvent Act of 1864, by an in- solvent, is limited to the debts and causes of action set forth in his sche- dule, either originally or by supplement (Kitig vs. Smith, supra. See Bwrrowea et al. vs. Blaquire, 34 Q. B. U. C. 498). As to debts which are not extinguished by discharge, see Section 63 and notes. Discharge 63. A discharge under this Act, whether con- feet secon- sented tu by any creditor or not, shall not operate lit^. * ^ any change in the liability of any person secondarily liable to such creditor for the debts of the insolvent, either as drawer or endorser of negotiable paper, or as guarantor, surety or otherwise, nor of any partner or other person liable jointly or severally with the insolvent to such creditor for any debt ; nor shall it affect any mortgage, hypothec, lien or collateral se- curity held by any creditor as security for any debt thereby discharged, without the consent of such creditor. This section is similar to the 99th Section of the Act of 1869. The words "without composition" are omitted from this section, and the words at the end of this section 'Swithout the consent of such creditor "' are added. Declaration on a joint and several promissory note made by the defen- dant, payable to plaintiff. Plea by two defendants, that the note was f' COMPOSITION AND DISCHARGE. 113 made by them as sureties for the other defendant of which plaintiff had notice, and *;hat he took the same on -the agreement that they should be liable as suroties only. That the plaintiff, while holder thereof without their knowledge or consent by deed, released the other defendant, which release was headed ' ' Insolvent Act of 1864," and in the body of it referred to the Insolvent Act of 1804 : Held plea bad for the court was bound to look upon the plea as setting up a discharge under the Insolvent Act of 1864, and by Section 9, Sub-Section 4 of that Act, the plaintiff's rights wore expressly preserved to him against all other persons liable for or with the in8olvr.it (Fowler \s. Perrin et al, 10 C. P. U. C. 258). See this case cited under Section 59, supra. On 2nd May, 1807, defendant R made an assignment tinder the Insol- vent Acts, and on 27th, a deed of composition and discharge was executed by B and by R, who had been sued as B's surety, and other creditors as well as by the plaintiff, who, however, reserved his rights against any surety for his debt. On 10th February, 1808, plaintiff obtained judgment. On 13th February, R took an assignment of the judgment from the plaintiff, paying part only of the judgment debt. On an application by the defendant B to have his name struck out of the proceeding and judg- ment stayed as against him on the ground that the plaintiff was a party to the deed of composition and discharge : HiM that B was entitled to this relief as well against the plaintiff as against R, and that he had ac- counted for his delay by a reasonable supposition that the plaintiff was proceeding on the judgment to recover the balance of the debt from the defendant. Semble that the assignee of the judgment cannot enforce it if the assignor could not {Martin vs. Brummell et al, 4 P. R. 229). m 63. A discharffe under this Act shall not apply, Discharge ^ 1. i .' ' under this without the express consent of the creditor, to any Act not to apply to debt for enforcing the payment of which the im- certain prisonment of the debtor is permitted by this Act, iiabiiitieB. nor to any debt due as damages for assault or wilful injury to the person, seduction, libel, slander or ma- licious arrest, nor for the maintenance of a parent, wife or child, or as a penalty for any offence of which the insolvent has been convicted ; nor shall any such discharge apply without such consent to 114 INSOLVENT ACT OF 1875. ■k any debt due as a balance of account due by the in- solvent as Assignee, tutor, curator, trustee, executor or administrator under % will, or under any order of court, or as a public officer ; nor shall debts to which a discharge under this Act does not apply, nor any privileged debts, nor the creditors thereof, be computed in ascertaining whether a sufficient proportion of the creditors of the insolvent have voted upon, done, or consented to any act, matter or But credi- thing uudcr this Act ; but the creditor of any such a^ent'a debt may claim and accept a diA'idend thereon from ivK en . ^j^g estate without being by reason thereof in any respect affected by any discharge obtained by the insolvent. This section is similar to the 100th Section of the Act of 1869, and differs from it in that by that section, it was provided that the discharge sho\ild not apply to the releasing of a debt for a penalty for any offence of which the insolvent has been convicted " unless the creditor shall file or claim therefor" in the above section, the words " unless the creditor shall file or claim therefor " are omitted. Where an executor has become insolvent, so as not to have the means or refuses to act, the Court of Chancery will permit a creditor to bring a bill himself against persons accountable to the estate and have adminis- tration {Burroiighs vs. Elton, 11 Ves. 29). As to discharge under Insolvent Act, where party is liable to arrest, (see Mackay vs. Goodson, 27 U. C. R. 263). The imprisonment of the debtor is permitted where he has been proved to have been guilty of fraud under Section 136. The debt in such case continues to exist notwithstanding the granting of the debtor's discharge. AppU^a- 04. If, after the expiration of one year from the Court or date of an assignment made under this Act, or from Judge for n , • discharge, the date of the issue of a writ of attachment there- tained Under, as the case may be, the insolvent has not ob- dUOTs!'* tained from the required proportion of his creditors s.J'rf^ l;;flrtS)! COMPOSITION AND DISCHAllOE. Il5 a consent to his discharge, or the execution of a deed of composition and discharge, he may apply by petition to the court or judge, to grant him his discharge, first giving notice of such application, (Form L.) for one month in the Official Gazette, and also by letter or card postpaid, addressed, ten days before such application, by mail to each of his cre- ditors whose claims amount to one hundred dollars or more, and may be affected by a discharge under this Act., This section is similar to the 105th section of the Act of 1809, except it requires that notice be sent by letter or card to each creditor over $100 by mail, which was not required by that section. The discharge to be granted under this section cannot have any greater effect to release the debtor from his liabilities than the discharge obtained by consent in writing of creditors, as provided in section 61 of this Act. I'nder the consent-discharge the insolvent is only freed from liabilities utentioned or set forth in the statement of his affairs exhibited at the first meeting of creditors, or which are shown by any supplementary list of creditors furnished by the insolvent previous to his discharge (see King vs. Smith, and Pabner vs. Baker, and Farrell vs. CfNeil, cited under sec- tion 61 supra). For form of discharge see Form No. 6. 65. Upon such application, any creditor of the Proceed- insolvent, or the Assignee by authority of the ere- such ap- ditors or of the Inspectors, may appear and oppose and* '""' the granting of such discharge upon any ground ^7 cmirt upon which the confirmation of a discharge may be""^^"*^*®' opposed under this Act, or may claim the suspen- sion or classification of the discharge or both ; and whether such application be contested or not, it shall be incumbent upon the insolvent to prove that he has in all respects conformed himself to the pro- visions of this Act ; and he shall submit himself to '"»!- K I ^vm It 110 INSOLVENT ACT OF 1875. any order which the court or judge may make, upon or without an appHcation to that eft'oct, to the end that he be examined touching his estate and effects and his conduct and management of his afiiEiirs and business generally, and touching each and eveiy detail and particular thereof; and the court or judge may also require from the Assignee a report in writing upon the conduct of the insol- vent and the state ol" his books and affairs before and at the date of his insolvency ; and thereupon the court or judge, as the case may be, after hearing the insolvent and the opposant, if any, and any evidence that may be adduced, may make an order either granting the discharge of the insolvent or refusing it; or in like manner and under the like circumstances to those in and upon which the dis- "md*cias8. charge could be suspended or classified as hereinbe- fore provided, upon an application to confirm it, an order maj' be made suspending it for a like period, or declaring it to be of the second class, or both. The grounds on -which the confirmation of an insolvent's discharge may be opposed are stated in section 56, and see notes to that section. The report of the Assignee should state the amount of the assets and liabilities ; the amount of dividend paid or what is likely to be payable to the creditors ; the state in which insolvent's books wore found ; and also copies of any resolutions passed by the creditors. See section 52. As to classification of discharge, see section 57. Suspen- sion or claHsifica- tion of HB' Discharge 60. Every discharge or confirmation of any dis tained by charge obtained by fraud or fraudulent preference, fraud to , ^ ,.,,"' „ ,., *^ be void, or by means ol the consent of any creditor procured by the payment or promise of payment to such cre- ditor of any valuable consideration for such consent, or by any fraudulent contrivance or practice what- SALK OF DEBTS. over tending to defeat the true intent and meaning of the provisions of this Act in that behalf, shall be null and void ; and in no case 'shall a discharge have any effect unless and until it is confirmed by the Court. U7 This section is similar to the 108th section of the Act of 1861). As to fraud and fraudulent preferoucos, see sections 130 to 137 inclu- sive, infra, and notes thereto. SALE OF DEBTS. 6T. After having acted w^ith due diligence in theSaie of collection of the debts, if the Assignee finds there collection remain debts due, the attempt to collect which wouui he would be more onerous than beneficial to the estate, ous.""^' he shall report the same to the creditors or Inspec- tors, and, with their sanction, he may sell the same by public auction, after such advertisement thereof as they may order; and, pending such advertise- ment, the Assignee shall keep a list of the debts to be sold, open to inspection at his office, and shall also give free access to all documents and vouchers explanatory of such debts ; but all debts amounting Proviso, to more than one hundred dollars shall be sold sepa- rately, except as herein otherwise provided. at I 'V / Under the 44th section of the Act of 18G0, it was necessary to obtain an order from the judge to sell debts. The above section only requires that the Assignee obtain the consent of the creditors or Inspectors. ,'^i 68. If at any time any creditor of the insolvent ^'re'iit'T •' •' ^ may be desires to cause any proceeding to be taken which authorized uO wmK t^ in his opinion would be for the benefit of the estate, anyspeciai and the Assignee, under the authority of the credi- in^ aThis own risk. 118 INSOLVENT ACT OF 187-5. Proviso. tors or of the Inspectors, refuses or neglects to take such proceeding after being duly required so to do, such creditor shall have the right to obtain an order of the judge authorizing him to take such proceed- ing in the name of the Assignee, but at his own ex- pense and risk, upon such terms and conditions as to indemnity to the Assignee as the judge may pre- scribe; and ^thereupon any benefit derived from such proceeding shall belong exclusively to the cre- ditor instituting the same for his benefit and that of any other creditor who may have joined him in causing the institution of such proceeding. But if, before such order is granted, the Assignee shall sig- nify to the judge his readiness to institute such pro- ceeding for the benefit of the creditors, the order shall be made prescribing the time within which he shall do so, and in that case the advantage de- rived from such proceeding shall appertain to the estate. This section is a re-enactment of the 45th Section of the Act of 1869. Rights of 69. The person w^ho purchases a debt from the of debts Assignee may sue for it in his own name as effec- due insol vent. No war- ranty. tually as the insolvent might have done, and as the Assignee is hereby authorized to do ; and a bill of sale (Form M), signed and delivered to him by the Assignee, shall be prima facie evidence of such pur- chase, without proof of the handwriting of the Assignee, and the debt sold shall in the Province of Quebec vest in the purchaser without signification to the debtor ; and no warranty, except as to the good faith of the Assignee, shall be created by such sale and conveyance, not even that the debt is due. LEASLd. 119 This section is a re-enactment of the 46th Section of the Act of 1869, except the words, "and the debt sold shall in the Province of Quebec vest in the purchaser without signification to the debtor." LEASES. 10. If the insolvent holds, under a lease, property Lease of having a value above and beyond the amount of more vaL- any rent payable under such lease, the Assignee rent to bl shall make a report thereon to the judge, containing ^j^^^' "" his estimate of the value to the estate of the leased ^P"*^'" tions. property in excess of the rent ; and thereupon the judge may order the rights of the Insolvent in such leased premises to be sold separately, or to be included in the sale of the whole or part of the estate of the insolvent, after such notice of such sale as he shall see lit to order ; and at the time and place appointed such lease shall be sold upon such con- ditions, as to the giving of security to the lessor, as the judge may order ; and such sale shall be so made sub- ject to the payment of the rent, to all the covenants and conditions contained in the lease, and to all legal obhgations resulting from the lease ; and all such covenants, conditions andobligationsshall be binding upon the lessor and upon the purchaser, as if he had been himself lessee and a party vsuth the lessor to the lease. This is similar somewhat to section 77 of the Act of 1869. It difters from that section in that the judge may order that the sale of the lease be either separate or be included in the sale of the whole or part of the estate of the insolvent, and that such sale be subject to all legal obligations resulting from the lease. The lessee under a lease containing a covenant not to assign without leave in the statutory form made a voluntary assigimient in Insolvency, pn 17th May, 1869. The Assignee sold the stock in trade of tlie insol- h ill 'lif'S 120 msOLVBMT ACT OF 1875. vent, who were dry goods merchants, and the purchaser took possession of the premises from him on the 27th of May, the Assignee also occupy- ing a room there for the benefit of the estate ; Held tha.t such assignment was a breach of the covenant and a forfeiture, for the term passed to the Assignee under the provisions of the Insolvent Act, and if any election to accept it were necessary on his part, it was shown by his conduct (Maget vs. Rankin, 29 Q. B. U. C. 257, and cases there cited). Other II. If the insolvent holds under a lease extending ie^4^,*how beyond the year current under its terms at the time eat wit Qf }jjg insolvency, property which is not subject to the provisions of the last preceding section, or re- specting which the judge does not make an order of sale, as therein provided, or which is not sold under such order, the creditors shall decide at any meeting, which may be held more than three months before the termination of the yearly term of the lease, current at the time of such meeting, whether the property so leased should be retained for the use of the estate, only up to the end of the then current yearly term, or, if the conditions of the lease permit of further extension, also up to the end of the next following yearly term thereof, and their decision shall be final. This section is a re-enactment of the 78th sect, of the Act of 1869. If the creditors elect to take the lease the Assignee will be bound by the election and will not be able afterwards to renounce, although it turns out a bad bargain {Turner vs. Richardson, 7 East, 342 ; Broome vs. Rohiiison, cited ih, 339) ; and the Assignee will be liable in respect of the rents and covenants as long as he holds the property {Magnay vs. Edwards, 13 C. B. 479 ; White vs. Hunt, L. R. 6 Bx. 30) ; but he may get rid of all lia- bility by assigning the lease, and for this purpose he Wfeuld be justified in assigning to a pauper if the lessor refused to accept a surrender ( IVilkins vs. Frij, 1 Mer. 265 ; Rowley vs. Adains, 7 Beav. 417 ; Otuslow vs. Came, 2 Mad. 330). :i 1 : LEASES. 121 lU. From and after the time fixed for the reten- Lessor tion of the leased property for the use of the estate, damages the lease shall be cancelled, and shall from thence- mlnaUon forth be inoperative and null ; and so soon as the I'las!'!' resolution of the creditors as to such retention has been passed, such resolution shall be notified to the lessor, and if he contends that he will sustain any damage by the termination of the lease under such decision, he may make a claim for such damage, specifying the amount thereof under oath, in the same manner as in ordinary claims upon the estate ; and such claim may be contested in the same man- ner, and after similar investigation, and with the same right of appeal, as herein provided for in case of claims or dividends objected to. This section is a re-enactment of the 79th sec. of the Act of 1869. 73. In makingsuch claim, andin any adjudication How dam- thereupon, the measure of damages shall be the estimated. difference between the value of the premises leased when the lease terminates under the resolution of the creditors, and the rent which the insolvent had agreed by the lease to pay during its continuance ; and the chance of leasing or not leasing the pre- mises again, for a like rent, shall not enter into the computation of such damages ; and if the claim is not contested, or if, being contested, the damages are finally awarded to the lessor, he shall rank for the amount upon the estate as an ordinary creditor. This section is similar to the 80th sec. of the Act of 1869, tho words " in adjudication thereupon" in this section being used instead of " any award thereupon" in that, and the words " and if the claim is not contested, r>r if being contested " in the above section are new. 1 ^fWWP 122 INSOLVENT ACT OF 1875. Preferen- 14. The preferential lien of the landlord for rent o'fiand™ in the Provinces of Ontario, New Brunswick, Nova Id in'jhi*' Scotia, British Columbia, Prince Edward Island, or Pro^fncep. Manitoba, is restricted to the arrears of rent due during the period of one year last previous to the execution of a deed of assignment or the issue of a writ of attachment under this Act, as the case may be, and from thence so long as the Assignee shall retain the premises leased. In the Province of Quebec the preferential lien or privilege of the lessor shall be governed by the provisions of the civil code. This section is nearly similar to the Slst section of the Act of 1869, and includes British Columbia and Prince Edward Island and Manitoba, which were not included in that section, and further enacts that in the Pro- yince of Quebec the preferential lien or privilege of the lessor shall be governed by the civil code. The 81 st section of the Act of 1869 restricts the landlord to one year's rent, even where he has distrained for more before the insolvency of the tenant (Griffith va. Broimi, 21 U. C. C. P. 12 ; distinguished in Masoji vs. Hamilton, in appeal, 22 U. C. C. P. 411, reversing the decision of C. P. in 22 C. P. 190). Defendant, in consideration of the yearly rents, covenants and con- ditions in the lease contained, leased certain premises to one M at an annual rent, and as one of the covenants or conditions in con- sideration of which the demise was made, after reciting that M had agreed to pay $700 by way of additional rent for the purchase of the good will of the demised premises. M covenanted to pay the $700 in ten quar- terly payments of $70 each, with a proviso that in case of the forfeiture of any of his covenants the said $700, or the balance thereof, was to be- come at once due and payable by way of rent, with a further covenant that if the term granted should be seized under execution or an attach- ment against him, or if he should make an assignnient or become bank- rupt or insolvent, or take the benefit of any Insolvent Act, the then cur- rent quarter's rent should immediately become due and payable, and the term become void. M failed lo pay any portion of the $700, and after the accrual of the third quarterly payment became insohcnt : SALE OF REAL ESTATE. 123 Held, that defendant had the right to distrain upon the goods on the demised premises for the three quarterly payments of $70 each that had accrued due before the insolvency, but that, notwithstanding the different provisions contained in the lease, he could not, having regard either to the common law, the Statute 8 Ann., chap. 14, sec. 6, or the 14th section of the Act of 1865, distrain for the whole $700 (Oriffith vs. Brown, 21 U. C. C. P. 12). "With regard to rent the landlord may, in Quebec, claim for the amount payable to the end of the current yearly term after the assignment or the attachment, whether there be a lease or not, as by the common law of that Province the owner of premises rented yearly without a lease can claim judgment by privilege for the current year (Civ. Code, Art. 2005 ; Popham 86). 1'; 'S SALE OF REAL ESTATE. 15. The Assignee may sell the real estate of the Sale of real insolvent, but only after advertisement thereof for insolvent, a period of two months, and in the same manner as is required for the actual advertisement of sales of real estate by the sheriff' in the district or place where such real estate is situate, and to such further extent as the Assignee deems expedient ; Provided that the period of advertisement may be shortened to not less than one month by the creditors with the approbation of the judge, but in the Province ofini^ieiHc Quebec such abridgment shall not take place with- out the consent of the hypothecary creditors upon such real estate, if any there be ; and if the price offered for any real estate at any public sale duly advertised as aforesaid, is more than ten per cent, less than the value set upon it by a resolution of the creditors, or by the inspectors and the Assignee, the sale may be adjourned for a period not exceeding one month, when, after such notice as the inspectors and the Assignee may deem proper to give, the sale ■^■-l N t n i W mm Proviso ; postpone- ment of 124 INSOLVENT ACT OF 1875. shall be continued, commencing at the last bid offered on the previous day when the property was put up at auction, and if no higher bid be then offered, the property shall be adjudged to the per- son who made such last bid : Provided that with the consent of ,the hypothecary or privileged cred- consent of itors, or whorc there are no hypothecary or privi- creditors, jggg^j creditors vv^ith the approbation of the creditors or of the inspectors, the Assignee may postpone the sale to such time as may be deemed most advantage- ous for the estate, and whenever the sale shall have been so postponed beyond one month, the last bidder shall be discharged from any obligation under the bid he may have made on the previous day when the property was offered for sale by auction. The provisions in this section for adjournment are new (See 47th sec- tion of the Act of 1869). By that section if the Assignee thought the amount offered was too small, he might withdraw the land, and sell it subsequently under such directions as he received from the creditors. The time and manner of advertising the sales of real estate by the sheriff is prescribed by the Common Law P. Act, Con. Stat. U. C, ch. 22, sec. 267. 31 Ont., chap. 6, requires that the notice be published in the Ontario Oazette. In Quebec it must be advertised iu the Official Gazette and in one English and in one French newspaper, and in addition, announced at the church door of the parish where the land lies. Civ. Pro. L. C. , art. 648. The Assignee may, however, advertise to such further extent as may appear expedient to him (Popham, 76). The mortgagee of an insolvent is not obliged to wait for the disposal of the estate by the Assignee, but may exercise his power of sale under the mortgage and rank on the estate for any deficiency (In re Hurst, 31 U. C. Q. B. 116). 16. A.11 sales of real estate so made by the t^ate Assignee shall vest in the purchasers all the legal • *lect.r, of ■•■>;eg ot 1 'KS SALE OF REAL ESTATE. 125 and equitable estate of the insolvent therein, and the conveyance may be in the Form N ; but in the Form of Province of Quebec, such sale shall in all respects terms. have the same effect as to mortgages, hypothecs or privileges then existing thereon, as if the same had been made by a sheriff under a writ of execution issued in the ordinary course, but shall have no other, greater or less, effect than such sheriff's sale : and in the Province of Quebec the title conveyed by such sale shall have equal validity with a title created by a sheriff's sale ; and the deed of such sale which the Assignee executes (Form N,) shall, in the Province of Quebec, have the same effect as a sheriffs deed ; but the Assignee may grant such terms of credit as he may deem expedient and as may be approved of by the creditors, or by the in- spectors, for any part of the purchase money ; except that no credit shall be given in the Province of Quebec for any part of the purchase money coming to any hypothecary or privileged creditor without the consent of such creditor ; and the Assignee shall be entitled to reserve a special hypothec or mortgage by the deed of sale as security for the payment of such part of the purchase money as shall be unpaid ; and such deed may be executed before witnesses or before notaries, according to the exigency of the law of the place where the real estate sold is situate. '"*|j This section is somewhat similar to the 48th section of the Act of 1869> The words, " or by the inspectors " are not in that section. The purchaser under the above section will take the same title that the insolvent had at the date of the assignment, or at the time the writ of attachment was placed in the Assignee's hands. 126 INSOLVENT ACT OF 1875. ■II 11 I As to the sale of tho equity of redemption of a mortgagor see the 268th section of the 0. L. P. Act. In Quebec a sale by the sheriff purges the property of all claims and mortgages, except dower created anterior to the mortgages CCiv. Code L. C, art. 1447), or entail (i6irf. art. 960), or Seignorial Rights (ibid. art. 288'_). With these exceptions of dower, entail,crown dues and seignorial rights,the purchaser of real estate in that Province would, under this Act,obtain the property clear of all encumbrances, registered or not. The mortgage creditors having only the right to be paid by privilege from the proceeds of the sale, according to the registration of their claims (Popham, 77). Sales in Quebec may be Hubject to certain charges. Folle en chere. IT. In the Province of Quebec such sale may be made subject to all such charges and hypothecs as are permitted by the law of the said Province to remain chargeable thereon when sold by the sherilBf, and also subject to such other charges and hypothecs thereon, as are not due at the time of sale — the time of payment whereof shall not, however, be extended by the conditions of such sale ; and also subject to such other charges and hypothecs as may be consented to in writing by the holders or credit- ors thereof. And an order of re-sale for false bid- ding may be obtained from the judge by the Assig- nee upon summary petition ; and such re-sale may be proceeded with after the same notices and ad- vertisements, and with the same effect and conse- quences as to the false bidder, and all others, and by means of similar proceedings as are provided in ordinary cases for such rensales, in all essential par- ticulars and as nearly as may be without being in- Certificate Consistent with this Act. And as soon as immove- ables are sold by the Assignee, he shall procure from the registrar of the registration division in which each immoveable is situate, a certificate of of regis- trar. SALE OF REAL ESTATE. 127 the hypothecs charged upon such immoveable, and registered up to the day of the issue of the writ of attachment, or of the execution of the deed of as- signment by which the estate of the insolvent was brought within the purview of this Act, as the case may be : And such certificate shall contain all the facts and circumstances required in the registrar's certificate obtained by the sheriff subsequent to the adjudication of an immoveable in conformity with the provisions of the Code of Civil Procedure, and shall be made and charged for by the registrar in like manner : And the provisions of the said Code as code of to the collocation of hypothecary and privileged ere- proced- ditors, the necessity for and the filing of opposition s^ppfy. tor payment, and the costs thereon, shall apply thereto under this Act as nearly as the nature of the case will admit : And the collocation order of and distribution of the moneys arising from such tion? " sale shall be made in the dividend sheet among the creditors having privileged or hypothecary claims thereon, after the collocation of such costs and ex- penses, including the Assignee's commission on the amount of the sale, as were necessary to effect such sale or are incident thereto, in the same manner as to all the essential points thereof as the collocation and distribution of moneys arising from the sale of immoveables are made in the appropriate court in ordinary cases, except in so far as the same may be inconsistent with any provisions of this Act ; but no portion of the general expenses incurred in the winding up of the estate, shall be charge- abe to, or payable out of the said moneys, except on such balance as may remain after the payment of all privileged and hypothecary claims. The As- llin 128 INSOLVENT ACT OF 1875. commis mon. Balance. AKsignee's signee's Commission on such sale shall be the same as the poundage to which the sheriff is entitled on sales made by him : Any balance remaining after the collocation of the said necessary costs and ex- penses, and of the privileged and hypothecary claims, shall be added to and form part of the gene- ral assets of the estate. The mode of advertising and re-selling real estate sold by a sheriff, and the legal effect thereof, in Quebec, will be found explained in the Code of Civil Procedure, arts 690 et seq. The section provides that the rules of the Code of Civil Procedure shall be applied in these respects "as nearly as the nature of the case will admit." - By this section the Assignee is required to obtain the certificate of the registrar of the mortgages and claims entered against the real es- tate sold, or to be sold. By the Code, the creditors of claims thus registered, need not file their claims or oppositions to secure payment from the proceeds of the sale. (Art. 719.) Consequently, no such claims need be made by a mortgagee or registered creditor to the pro- ceeds of real estate sold under this Act. But if such proceeds be wholly or partially insufficient to pay a claim, he can rank on the estate generally with the unsecured creditors for the whole or any un- paid balance. Under the Code, oppositions for payment, on claims not registered, must be made within six days after the return. That is after the return of the sheriff to the coiirt stating the amount in his hands from the sale available for distribution. (Art. 720.) Under this Act, it may be pre- sumed they should be filed within six days from the deposit of the purchase-money with the Assignee. The opposition should state distinctly the nature of the claim, with the dates and place, and the documents or titles in support of its pre- tensions. By the Code, the prothonotary must prepare a scheme of distribution between the sixth and twelfth day after the sheriff's return. (Art. 724.) Under this Act, it may be assumed it should be made by the Assignee within twelve days from the payment by the purchaser. In this sheet the name of each claimant must be inserted in the nu- DIVIUKNDS. 129 rnericnl order, and the nature and amount of each claim, and whether it utlecta the whole or a part of the property {Ibid. Art. 720). The moneys must be divided and paid in the following order : — I. The law costs in selling the property, &c. {Ibid. Art. 788.) II. The mortgages according to the date of registration. III. Non-registered claims p^ru rata according to the provisions of this Act. As regards the ranking of certain special privileges, which, in ordinary cases, may not arise, such as that of the builder, of soignorial dues, &o. , re- ference is directed to the Civil Code (Art. 2009 et seq.) and the code of procedure (Art. 727 et seq.). The Assignee, who is not experienced in these matters, may find it necessary to consult his legal adviser before completing a collocation (Popham, 79)- r 78. In the Province of Quebec any privileged or hypothecary creditor vv^hose chiim is actually due and payable, shall have the right to obtain from the judge an order on the Assignee to proceed without delay to the sale in the mode above prescribed, of any property real or personal wrhich is subject to his privileged or hypothecary claim ; and such cre- ditor may also one month after the sale has taken place, or one month after the Assignee has received the price thereof, if not paid at the time of the sale, obtain an order from the judge to compel the As- signee to make a dividend of the proceeds of such sale. In Quebec privileged creditors may re- quire sale of proper- ty subject to their privileged claims. ■IS lit Vii] This section is new. In Ontario the mortgagee can take the initiative, so as to realize his se- curity {In re Hurst, 31 U. C. Q. B. 116). DIVIDENDS. 19. Upon the expiration of the period of one Accounts, month from the first meeting of the creditors, or as '^ *'^" 9 130 INSOLVENT ACT OF 1875. ments and soon as may be after the expiration of such period, by and afterwards from time to time at intervals of not mgnee. ^^^^ ^j^^j^ three months, the Assignee shall prepare and keep constantly accessible to the creditors, ac- counts and ^statements of his doings as such As- signee, and of the position of the estate ; and he shall prepare dividends of the estate of the insol- vent whenever the amount of money in his hands •will justify a division thereof, and also whenever he is required by the inspectors or ordered by the judge to do so. What 80. All debts due and payable by the insolvent shall rank at the time of the execution of a deed of assignment, estate^ o^ at the time of the issue of a writ of attachment under this Act, and all debts due but not then ac- tually payable, subject to rebate of interest, shall have the right to rank upon the estate of the insol- vent ; and any person then being, as surety or other- wise, liable for any debt of the insolvent, and who subsequently pays such debt, shall thereaiter stand in the place of the original creditor, if such creditor has proved his claim on such debt ; or if he has not proved, such person shall be entitled to prove against and rank upon the estate for such debt to the same extent and with the same effect as the creditor might have done. This section is a re-enactment of the 56th section of the Act of 1869. One partner may prove for the firm (Ex parte Hodgkitison, 19 Ves. 293 ; ex parte Mitchell. 14 Ves. 593). The guardian of an infant may prove on his behalf (Ex parte Beltan, 1 Atk. 251 ; Walcott vs. Hall, 2 Bro. C. 0. 305). The Assignee of a bankrupt may prove for a debt due to the bankrupt ; DIVIDENDS. 131 but it would seem that tho bankrupt should join in the affidavit of debt (Ejt paHe Robson, 2 M. D. <& D. fi5). Where a debt ia duo to a deceased creditor, his executor is tho proper person to prove (^x parte English, 2 Bro. C. 0. 609 ; ex parte Columan, 2 D. & 0. 584). All the trustees ought, as a general rule, to join in a proof of a debt due to tho trust {Ex parte Smith, I Dea. 376 ; 2 M. & A. 530. See Er parte Phillips, 2 Dea. 334). But proof may be made by some or one )■ If a bill or note was given to any party by the bankrupt before his bankruptcy, bona fide, and for valuable consideration, and the bankrupt omitted contrary to agreement to endorse it, he or his trustee may be required to do so after hia bankruptcy {Ex parte Greening, 13 Ves. 206 ; (X parte Mowbray, 1 J. «fc W. 428 ; ex parte Rhodes, 2 Dea. 304 ; ex parte IL.'l, 1 Rose, 13 ; ex parte Stewart, 1 G. «& J. 344). A b'^der of notes bought for less than the full amount may prove for the full amount against the parties liable on them {Ex parte Lee, 1 P W. 782 ; ex parte Atkiiis, Buck. 479 ; ex parte Rogers, Buck. 4^0). A bona fide holder for valuable consideration may prove against any of the parties liable upon an accommodation bill until he has received 20s. in the pound on the consideration actually paid by him {Ex parte Crussleij, 3 Bro. C. C. 237 ; ex parte Vere tfc Oo., 2 M. & A. 123 ; ex parte Fair- lie, 3 D. (& fl. 285 ; ex parte Bloxham, 6 Ves. 449 ; ex parte Solarte, 3 D. & Ch. 419 ; Fentum vs. Pocock, 5 Taunt. 192). As to j»roof of bill or note supra protest (see Ex parte Swan, L. R. 6 Eq. 344 ; ex parte Lambert, 13 Ves. 1 79). If in case of mutual accommodation paper the account between the parties consists partly of dishonoured or outstanding bills and partly of a cash account, proof can only be made in respect of the latter, and the bills must be struck out on both sides {Ex parte Walker, 4 Ves. 373 ; ex parte Earle, 5 Ves. 833 ; see ex parte Metcalf, 11 Ves. 404). If acceptance of a bill is obtained by fraud and without negligence on the part of the acceptor, a bona fide holder for value, without notice, cannot prove it against the acceptor ; neither can there be any proof on a forged acceptance {Foster vs. MacKinnon, L. R. 4 C. P. 704 ; see ex parte Samuel, 2 M. D. & D. 384 ; Prince v. Dawson. 2 De G. «fc J. 41 ; Phillips vs. Im. Thurn, L. R. 1 C. P. 4G3 ; Morris v. Bdhell, L. R. 5 C. P. 47). The same rules apply to lands as in the case of bills of exchange, as to creditors' rights and as to amount for which he is entitled to prove (Robson, 2 Ed., 211 and 212). A mere agreement to accept a composition in discharge of a debt will not operate as a release of the debt if the composition is not duly paid {Ex parte Bateson, 1 M. D. & D. 289 ; ex parte Orosbic, 2 M. & A. 393 ; ex parte Powell, 2 M. & A. 533) ; and on failure of the debtor to pay the composition the original debt will revive, and be proveable under the li :,i I 1 1 mm 134 INSOLVENT ACT OF 1875. ,« subsequent bankruptcy of the debtor {Ex parte Bateson ; Ex parte Crosbk ; Ex parte Powell, ubi supra). In an agreement between a debtor and one of his creditors, the latter agreed to accept, by way of compensation, certain notes of the debtor, payable at specified dates ; and it was provided that the debtor should give his note for the whole debt, and that if he were guilty of any default in paying the composition notes the creditor should rank on the estate for the whole debt. The notes were given accordingly, the debtor made default and afterwards was proceeded against under the Insolvent Act : Held, that the stipulation as to the whole debt was not illegal, and that there having been default before the insolvency the creditor was entitled to prove for the whole debt (Ex parte McRae, 15 Grant, 408). If the intention was to substitute the composition absolutely for the original debt, the latter will not be revived by non-payment of the com- position {Ex parte Hemaman, 12 Jur. 643). If the composition deed contains an absolute release of the original debt all right to sue or prove in respect of it will be barred, and proof, in tlie event of the debtor's bankruptcy, can only be made for the composi- tion {Small vs. Marivood, 9 B. & C. 300) ; but this will not be the effect of the release if it is given conditionally on due payment of the composi- tion {Hyde vs. Watts, 12 M. & W. 254), and a release in a statutory com position deed was held not to release a co-debtor who was liable as a principal {Andretv vs. Macklin, 6 B. & S. 201). If payment of the composition is accepted unconditionally, the creditor will be barred although the composition deed turns out to be invalid {Kitchem vs. Hawkins, L. R 2 C. P. 22). It is essential for the validity of a composition between a debtor and his creditors that all should be placed on an equal footing, therefore, if there is a secret bargain with one for an additional advantage to him as the condition of his accepting the composition, such bargain will be abso- lutely void, and will entitle the other creditors to set aside the composi- tion and resort to their original debts {Dauglish vs. Tennaid, L. R. 2 Q. B. 49; Wood vs. Barker, L. R 1 Eq. 139). As to proof of contingent debts and liabilities see notes to sec. 81 . Case of 81. If any creditor of the insolvent clajms upon claims a Contract dependent upon a condition or contin- for.^' ^ gency which does not happen previous to the decla DIVIDENDS. 136 ration of the first dividend, a dividend shall be re- served upon the amount of such conditional or con- tingent claim until the condition or contingency is determined ; but if it be made to appear to the judge that the estate may thereby be kept open for an undue length of time, he may, unless an estimate of the value of such claim be agreed to between the claimant and the inspectors, order that the value of such contingent or conditional claim be established by such person or persons as the claimant and the inspectors may appoint, and in case they do not agree, then by such person or persons as the judge shall name, and the persons so named shall make Arbitra- their award, which award the judge, after hearing thTaward the claimant and inspectors, may reject ov confirm. eJ/'^^*^^''* In case the award be rejected, other persons shall be appointed as herein provided to establish the value of such claim, subject to the control of the judge, and if the said award be confirmed, the amount therein mentioned shall be that for w^hich the claimant shall rank upon the estate as for a debt payable absolutely. By the 57th Section of the Act of 1869, the judge may, in case the estimate is not agi-eed to between the claimant and the Assignee, order the Assignee to make an award upon the value of such contingent or conditional claim, which award should be subject to appeal. The award may be regulated according to life-insurance tables or other reliable data. There must not only be a debt or engagement to pay a definite sum, but also that contingency on which the debt was payable should be one re- duceable to a matter of calculation, so as to allow a value to be put on the debt for the purpose of ]^Tooi {Ex parte Tiudal, 1 D. & C. 291, Mont. 375, 462 ; ex parte Marshall, 1 M. & A. 118). In respect of marriage settlements, those cases only were held to be within the statute where the contingency depended on the lives of per- sons in existence {Ex parte Titulal, I. D. & C. 291). :'vi ' ('4 130 INSOLVENT ACT OF 1875. When the contingency depended on the Uvea of persons unborn, or any other uncertain event as to wliich no calculation could be made, or where the contract was to pay an uncertain sum, the amount of which could only be ascertained by the jury : Held not within the statute {Ex parte Tindal, supra ; Parker vs. //ice, 4 H . & N. 53). A demand on a guarantee for the payment of bills given for the price of goods supplied to a tliird party, and which had not become payable at the time of the bankruptcy of the guarantor : Held to be a debt proveable (Ex parte Meyers, M. & Bl. 229, 2 D. & C, 251 ; in re Willis, 4 Ex. 530). A guarantee in writing may be withdrawn at any time without the consent of the person guaran- teed, pro^^ded the guarantee has not been acted upon. The statute did not apply to contracts for payment of premium.s on policies not due at the date of the bankruptcy {Atu:ood vs. Partridg<', 4 Bing. 209). Or to the liability of sureties for the payment of annuities where there was a solvent grantor {Thompson vs. Thompson, 2 Bing. N. C. 168). Or to the implied liability to contribution as between co-sureties ( Wallis vs. Swinburne, 1 Ex. 203). Or to contracts in the nature of in- demnity {Sidlop vs. Ebers, 1 B. & Ad. 700). Or to a contract or penalty for doing or not doing some particular act not being the payment of money {Tuijlor vs. Yoftng, 3 B. & Aid. 521). Nor is a railway call made after the bankruptcy of a shareholder {Gineral Discounting Company vs. Stoke*, 34 L. J. C. P. 25). And see In re McRae, 15 Grant, 408, cited under Section 80, supra. Debts incuiTed subsequent to the assignment cannot rank on tlie estate. A manufacturer of iron contracted, in l\Tay, 1871, to sell to a company 150 tons of iron at a specified price per ton, delivery to be 20 tons per month ; the deliveries were not duly made \mder the contract. In Janu- arj', 1872, the vendor filed a petition for liquidation by arrangement. At that time a considerable (quantity of iron remained to be delivered, and the market price of iron had risen very much. It a^jpeared that in some cases the company had bought iron m the market to supply the deficiency in the monthly deliveries. It did not appear that any actual request had been made by the vendor for the postponement of the deliveries : Held thrt the company could prove in the liquidation only for tlie difference between the contract price of the iron and the market prices of the days when the respective difterent deliveries were made {Ex ^arte Llansamlet Tin Plate Company; in re Vuss, L. R. 10 Eq. 165; and see Kent vs. r/ioma», L. R. Ex. 312). DIVIDENDS. 137 H'i. In the preparation of the dividend sheet due Rank and rt'sard shall be had to the rank and privilege of of ciVdi- every creditor — which rank and privilege, upon v'iso "as to whatever they may legally be founded, shall noth^^Vi^ir be disturbed by the provisions of this Act, except ''*<^""ty- in the Pro^nnce of Quebec, where the privilege of the unpaid vendor shall cease from the delivery of the goods sold ; but no dividend shall be allotted or paid to any creditor holding security from the estate of the insolvent for his claim, until the amount for which he shall rank as a creditor upon the estate as to dividends therefrom shall be established as hereinafter provided ; and such amount shall be the amount which he shall be held to represent in A'oting at meetings of creditors, and in computing the proportion of creditors, whenever under this Act such proportion is required to be ascertained. The 58th Section of the Act of 18G9 does not contain the words " Ex- cept in the Province of Quebec, wh.re the privilege of the unpaid vendor shall cease from the delivery of the gi^ods sold." As to question of when delivery to purchaser has taken place, so as to deprive the vendor of the right to stop the goods in transitu, see notes to Section 16. As to creditors holding securities, see notes to Sections 84 and 87. Held, in Montreal, that the privilege of the landlord on the proceeds of the etfects found on the premises leased has precedence over the privi- lege of the Assignee and the insolvent for the costs of their respective discharges under the .\ct of 1804, and that the dividend sheet must be reformed accordingly (Morgan Insur. Co. vs. Whyte £ B'lro)^, contest Ki L. C. Jur. 187). \ ^ 815. No lien or privilege upon either the personal Seizure in _ , . ' 1 11 1 If. execution or real estate oi the nisolvent shall be created lor after ap- the amount of any judgment debt, or of the interest of" Assig" U mm M 138 INSOLVENT ACT OF 1875. nee ; its thcreon, by the issue or delivery to the sheriff of any writ of execution, or by levying upon or seiz- ing under such writ the effects or estate of the in- solvent, if before the payment over to the plaintiff of the moneys actually levied under such writ, the estate of the debtor has been assigned to an Assignee, or if proceedings to place the same in liquidation under this Act, have been adopted and are still Proviso as peudiug. But this provision shall not affect any to costs, ijgjj Qj. privilege for costs which the plaintiff pos- sesses under the law of the Province in which such have been issued. wrr '^■mII The 59th Secti(n. >i tl. A ct of 1869 required that an assignment shi )ulil have beep made, or that the estate should have been placed in compul- sory liquidation. "''. ■ (^"ffererc. between that section and this is con- siderable. Where an attachment vuidor the Absconding Debtors' Act was received by the sheriff and acted upon, and afterwards writs of Pi Fa were placed in his hands, and he subsequently received an attachment under the Insolvent Act of 1864 : Held that defendant's property passed to the Assignee, but he must give the execution creditors the priority to which they would be entitled (Henry vs. Douglas, 1 U. C. L. J. [N. S.] 108). Judicial proceedings and statutes take effect in law from the earliest period of the day upon which they are respectively originated and come into force. M recovered a judgment, and issued a Fi. Fa. and placed it in sheriff's hands against the goods of R. The writ was placed in sheriff's hands at 10.30, and levy made about 11 A.M. On same day, but after levy, C sued out against R. a writ of attachment in insolvency, which sheriff received at 11.30 A.M. On same day the Insolvent Act of 1865 came into force, the royal assent having been given in the afternoon, by which, in effect, this execution, unless theretofore issued and delivered to the sheriff, was postponed to the attachment : Held that the attachment prevailed over the execution : Held, also, that the execution creditor was not entitled to any lien for costs. Semble that the issuing of the attach- ment was a judicial act, and by it the property of the insolvent vested in the Aasignee,by relation before it was seized thereunder and before any lieu DIVIDENDS. 139 attached under the execution for costs (Converse et al vs. Michie, 16 U. C. C. P. 167). Section 59 of the Act of 1869 applies to judgment debts recovered in the Division Court on which execution has been issued to and the money levied thereunder by a bailiff of such courts, although the section speaks only of executions delivered to the sheriff {Patterson vs. McCarthy, 35 Q. B. U. C. 14). Held that under Section 13 of the Act of 1869 a judgment cre- ditor who had an execution in the sheriff's hands at the making of an assignment, was entitled to rank for his costs of the judgment as a privi- leged creditor against the insolvent (In re Hayden, 29 Q. B. U. C. 262). Where an assignment is made under the Insolvent Act of 1869, it is the duty of the sheriff who has seized goods under a Fi. Fa. against the in- solvent to surrender the goods to the Assignee, leaving the execution plaintiff to assert his privilege for costs, if any he has in proceedings in insolvency (Blakely vs. Hall, 21 C. P. U. C. 138). A stay of proceedings was given to a sheriff on an execution in his hands by the attorney for the execution creditor : Held that the execu- tion under which they claimed priority over an Official Assignee had not been placed in sheriff's hands until too late to give them priority as re- gards the balance due thereon ; the assignment having been made within 30 days after the time given the sheriff for execution ; but that the exe- cution creditors were entitled to a privileged lien for costs (In re Fair vs. Buist, 2 U. C. L. J. [N. S.J 216). Section 13 of the Act of 1865, divesting of any lien or privilege ex- tends only to the levying upon or seizing under the execution, not to the sale thereunder. In this case an ejgecution had been placed in the sheriff's hands on the 15th March, 1866, and on the 26th a sale thereunder com- menced at 10 A.M., was completed at 11 A.M., at which hour a writ of at- tachment was placed hi the sheriff's hands against the defendant : Held that an attachment could not prevail over the execution (Converse vs. Michie. 16 C. P. U. C. 167, distinguished ; Wliytc vs. Treadivell, 17 C. P. U. C, 488). It would seem that the purchase at a sheriff^s sale is perfectly safe, as it is the proceeds, and not the goods, that will go to the sheriff. im^ 84. If a creditor holds security from the insol- As to vent, or from his estate, or if there be more than one holdln'J^ insolvent liable as partners, and the creditor hold forthefr security from, or the liability of one of them as'^'*'™'* mm 140 d; Security not ma- tured and insolvent oiilysecon darily lia- ble. INSOLVENT ACT OF 187o. security for a debt of the firm, he shall specify the nature and amount of such security or liability in his claim, and shall therein on his oath put a specified value thereon ; and the Assignee, under the author- ity of the creditors, may either consent to the right to rank for such liability, or to the retention of the property or effects constituting such security or on vs'hich it attaches by the creditor, at such specified value, or he may require from such creditor an assignment of such liability, or an assignment and delivery of such security, property or effects, at an advance of ten per centum upon such specified value, to be paid by him out of the estate so soon as he has realized such security, in which he shall be bound to the exercise of ordinary diligence ; and in either of such cases the difference between the value at which the liability or security is retained or assumed and the amount of the claim of such credi- tor, shall be the amount for which he shall rank and vote as aforesaid ; and if a creditor holds a claim based upon negotiable instruments upon which the insolvent is only indirectly or secondarily liable, and which is not mature or exigible, such creditor shall be considered to hold security within the meaning of this section, and shall put a value on the liability of the party primarily liable thereon as being his security for the payment thereof; but after the maturity of such liability and its non-payment he shall be entitled to amend and re-value his claim. This is similar to the 60th section of the Act of 1869. The words " a creditor holding security from the insolvent or from his estate" were evidently intended to designate a creditor holding a mort- gage, charge or lien on the bankrupt's estate for a debt due to him, and therefore thoy do not include a creditor who has merely levied execution DIVIDENDS. 141 by seizing the debtor's goods under a Fi. Fa. , and who does not acquire a security in the nature of a mortgage, charge or lien within the meaning of the Act. See notes to Sect. 83 {Hulmes vs. Tutton, 5 Ell. & Bl. 65). A mortgage of an equity of redemption where the legal estate is in the first mortgagee, is regarded in bankruptcy as a legal mortgage, the secur- ity being denominated a legal mortgage of an equitable estate. Any security, in fact, which assumes the form of an ordinary mortgage, is regarded in bankruptcy as a legal mortgage (Ex parte Robinson, 2 D. & C. 119 ; ex parte Aple, 1 M. & A. G21 ; ex parte Atwood, 2 M. & A. 24). Equitable mortgages may be created by an agreement in writing with- out an actual deposit of deeds or by a parol agreement accompanied by a deposit of deeds. It ia now settled that the delivery of deeds for the purpose of preparing a mortgage will create a good equitable mortgage (Ex parte Wright, 19 Ves. 258 ; Edge va. Worthiyigton, 1 Cox, 211 ; Keys vs. Williams, 3 Y. «& C. 55). The defendant, an Official Assignee, having taken possession of certain goods and premises and being sued by a mortgagee claimed a deduction from the plain tiflTs damages, for rent, insurance and taxes paid by him out of the proceeds cf sales : Semble, that it should have been allowed only if due when he took possession, but this did not appear, and under the cir- cumstances the Court refused to interfere {Matthetvs va. Lynch, 28 Q. B. U. C. 364). An Official Assignee sued for trespass in taking and selling goods pleaded (relying upon the 50th sect, of the Act of 1809) that before the writ of attachment hereinafter mentioned, one C mortgaged the goods to the plaintiff, that while said goods were in C's possession, the mortgage pro- viding that he should retain them until default, the sheriff seized the goods under an attachment in insolvency issued at the suit of M, and placed them in the custody of defendant, being an Official Assignee and guardian, and defendant being afterwards duly made Assignee of C's estate, sold the goods which are the alleged trespasses : Held, a bad plea for only negativing a default by C, when the attachment issued, not when the defendant received and sold the goods : Semble, that the action referred to only restrains a suit by creditors who have proved or can provo on the estate, and does not prevent a mortgagee from suing in trespass for a wrongful taking of goods {Archibald v|. Haldane, 30 Q. B. U. 0. 30). On the sale of a woollen factory and machinery it was stipulated that until the purchase money should be fully paid the vendees were not to re- move the machinery. The vendors afterwards executed a conveyance to ' '1 ;, v.. i M iiwp U2 INSOLVENT ACT OF 1875. the purchasers, and the latter to secure the unpaid purchase money executed a mortgage which purported to be of the factory only, and did not mention the machinery. The purchasers resold, the vendee having notice of the covenant, and the vendee subsequently became insolvent : Held that the covenant against removing the machinery remained in force, and that the vendee's Assignee in insolvency was not at liberty to remove the machinery by reason of non-registration under the Chattel Mortgage Act or otherwise {Crawford vs. Findlay, 18 Grant 51). Held that in equity and insolvency proceedings the description in a chattel mortgage, all goods now in possession of the mortgagee in the shop occupied by him and also any stock thereafter purchased by him, and which might be in his possession upon said premises during the continuance of the said mortgage or any renewal thereof was sufficient to hold such after acquired goods under such mortgage or renewal thereof {Re Thirkell, Perrin vs. Wvod, 21 Grant. 492). Where goods were mortgaged, and after default remained with the mortagor who made an assignment in insolvency, and' handed them over to his Assignee : Held that the mortgagee could not take them out of the Assignee's possession, but must enforce his claim under the Insolvent Act, and that he was a trespasser in so taking them {Dumble vs. White, 32 Q. B. U. C. 601). Declaration for entering a mill and taking and converting plaintifl''s goods. Plea in substance that the plaintifTs claim to the goods and mill is only under a mortgage made by one W. who before the grievances com- plained of, made an assignment under the Insolvent Act of 1869 to de- fendants of all his estate and effects, including this mill and goods subject to plaintiflTs mortgage. That W. was then in possession of the premises, and such possession was transferred to defendant, who took possession as such Assignee, and except as Assignee defendant has in no way interfered with the mill or goods. That the plaintiffs alleged right of property can be determined by the county judge, and that this court has no jurisdic- tion to try the same : Held on demurrer plea good, the plaintiff under the facts stated being restricted by section 50 of the Insolvent Act of 1869, to the remedy there given : Held also that that section was not beyond the power of the Dominion Parliament as being an interference with property and civil rights, but was within their exclusive authority over bankruptcy and insolvency {Crombie vs. Jackson, 34 Q, B, U. C. 575). Where future advances are made after a mortgage by deposit of deeds, the mortgagee may show by parol evidence that it was agreed to extend the se- curity to the subsequent advances {Ex parP Eensingtmi, 2 V. «Sj B. 79 ; ex r li DIVCDENDS. 143 parte Lloyd, 1 Gl. & J. 380 ; ex parte Langston, 17 Ves. 227 ; ex parte Net- tli'sMp, 2 M. D. & D. 124 ; See James vs. Rice, Kay 231, 5 D. M. »& G. ■H'd). [f deeds are deposited to secure the payment of accoinmodatiun bills, and the latter are renewed at the request of the depositor, the security will extend to the renewed bills {Ex parte Skinner, 1 D. & C. 403. Soo f:f parte Lloyd, 1 G. & J. 389). The rule as to future advances is different where there is a legal mort- gage. In such cases the security cannot be extended to future advances by parol evidence {Ex parte Hooper, 2 Rose, 328). An equitable mortgage may also be ci-eatod by the deposit of a policy of insurance so as to entitle the depositee to the moneys assured {Gibson vs. Overbury, 7 M. & W. 555 ; Robson 2 Ed. 263-4). A security by way of pledge is a species of mortgage ; and is created by the mere delivery of goods or chattels to some other person as a security for money advanced or to be advanced. It differs from a lien in that it can be created only by express contract, whereas a lien may arise by operation of law, it differs also from a mortgage in that it vests in the pledgee a special property only at law in the thing pledged which entitles him to retain it until he is paid {Cogys vs Barnard, Ld. Ray. 909), and if default is made in payment by the pledgor at the stipulated time to sell the pledge and appropriate the proceeds in payment of his debt {Tucker vs. Wilson, 1 P. Wims. 261, Franklin vs. Neate, 13 M. & W. 481). Liens are divided into two classes namely, common law or retaining liens and equitable liens. A common law lien attaches only to goods and chattels ; and as a general rule gives no riglit to sell, but only to retain the chattel until the debt in respect of which it is claimed is paid {The Thames Iron Worksva. latent Derrick Co., 1 J. & H. 93). It may be a specific lien, that is a lien over specific goods for specific charges, '<' m i PI '• f hK Itl 144 INSOLVENT ACT OF iHlo. A lien being inconsistent with the giving of credit, if a uBii<{e exiats in u pavticulur trade for repairs or otlier work to bo done on credit, no lien will attach in respect of such repairs or work (Jiabbitt vs. Mitikdl, 4 Camp. 14G ; Cmwuhiiij vs. llvmfray, 4 B. & Aid. 50). Persons, who by-law are compelled to receive goods, and perform soiiio service in respect of them such as carriers who have a lien on the goods {Aspiwdl vs, f'ickfdiil, 3 B. tt P. 44 n ; Kiikmaii vs. SftitarrdHH, (J T. 1{. 17 ; OpiMuhehn vs. Jiussfll, 3 B. & P. 42 ; nyi'jld vs. SmU, 5 B. & Aid. 350). Innkeepers have a lien on the luggage and horses of guest (Thomp- *o?iv8. Tracy, 3 B. «Sr Aid. 283 ; Proctor vs. Nicholson, 7 C. & P. 67), and this lien ia extended to boarding-house keepers by 37 Vict. Ont., chap. 1 1. The vendor of goods sold for ready money has a lien on them until they are actually delivered to the purchaser {Ellis \a. Hunt, 3 T. 11. 404; Qlnbry vs. Jleyivard, 2 H. Bl. 504 ; Hanson vs. Mayer, East, 014 ; Dixon vs. Yatts, 5 B. & Ad. 313). A general lien is created in favour of a factor as to all goods of his prin- cipal coming into his possession {Kirhmni, vs. Shawcross, GT. R. 14). A banker has a general lien on all securities deposited with him by a cus- tomer {Davis vs. Buivsher, 5 T. R. 488 ; Scott vs. Franklin, 15 East, 428 ; Bolland vs. Byyrave, Ry. & M. 271). An attorney has a general lien for costs upon all deeds, papers and money in his hands {Ilollis vs. Claridije, 4 Taunt, 807 ; Stevenson vs. Blakelock, 1 M. & S. 635 ; Champertonin vs. Scott, Mad. 93 ; Ex parte Underwood, De G. 190 ; Ex parte Buwden, 2 D. & C. 182). Eqvitable Liens. An assignment for valuable consideration of a debt, not assignable at law gives in equity a lien to the Assignee on the debt, and the debtor on notice of the assignment is bound to recognise the right of the Assignee {Ryal vs. Bowles, 1 Ves. 348 ; Meux vs. Bell, 1 Hare, 73 ; Gardner vs. LacUan, 1 M. & Cr. 129 ; Jones vs. Farrell, 1 D it J. 208 ; Bnn^s vs. Co- walho, 1 M. & Cr. 690). An assignment for value by the owner of goods will upon notice of the assignment to the party having the custody of the goods give a lien on them to the Assignee {Lanyton vs. Horton, 1 Hare, 549 ; Exparte Flower 2 M. «fe A. 224 ; Belcher vs. Bellamy, 2 Exch. 303, Acraman vs. Bates, 2 El. & El. 456. See Oilfield vs. Belcher, Bing, N. C. 102). If a creditor has power at law to sell the property comprised in his se- curity, he may realize by sale without applying to the Court, and then prove for the deficiency {Ex parte Geller, 2 Mad. 260 ; Ex parte Bolfe, 3 M. & A. 311 ; Ex parte Johnson, 3 D. M. & G. 218 ; Exparte Sheppard, 2 M. D. & D. 431 ; Ex parte Moffatt, 1 ib. 282). nivroKNDs. U5 The Court has power to onler tvsalo (jf tho inortgiigcil estate of an insol- vent, where it is for the benefit of tho est.;tj (A'.'- jxird /itunn, 2 D. & C. 181 ; See Hx parte Muore, ib 7), or tho niortj^aj^eo desires leave to bid (Kx parte Daris, 1 M. At A. 8(» ; Kx parte lloilj-vni, 1 O. & J. 12). Although a mortgagee with a power of sale may sell under tho power, he canncjt, upon a sale under the power, purchase or employ any person to purchase the property on his own account {Ex parte Friuwin, I D. it <..'. 274 ; Ex parte Peilhr, 1 M. it A. Wll). If a mortgagee, selling under his power, buys, the court will order the jiroperty to bo put up again at tho price bid by the mortgagee ; and if no more is ottered it will hold him to his bargain {Ex parte Francis ; ex parte I'idder, supra). Tlie same incapacity to purchase ap[)Ues also to any cre- ditor having a pledge who sells it independently of tho court. Under the English Act, creditors h(jlding btjuds, bills, or other poraonal chattels deposited with them by way of security, or goods loft in their hands as security, may apply for a sale thereof, with liberty to prove for Aa\,- fXii^civtncy {Ex parte Tuimfiiod, 19 Ves. 231 ; ex parte Twiiii 7, 1 M. I). A; D. G91). If any creditor, having such securities, has power at law V) sell the property, he may realize it by sale without ap^dying to the c lurt, and then prove for the deficiency under tho bankruptcy. If there as been any fraud in the sale it may be made the suliji'ct of in(iuiry ; and if the creditor sells improvidently the trustee ma^, lave an iiction ii,'ain8t him for damages {Ex parte Gellcr, 2 Mad. 2(JG ; ex parte liolfe, 2 M «k A. 311 ; ex jiarte Johmon, 3 M. D. & G. 218 ; ex parte Slt^ppard, 2 M. D. & D. 431 ; ex parte Moffatt, 1 M. D. & D. 282). Where a mortgagor becomes bankrupt the mortgagee may, instead of tiling his claim, exercise the power of sale contained in his mortgage. An injunction to restrain such a sale was refused {Gordon vs. Rosa, 1 L. J. U. C. [N. S.] lOG). The insolvent, in February, 1808, made a m irtgage on lands and an assignment of goods to trustees for the beuetit of B, G &, Co. and other cre- ditors named, and in August following he made a voluntary assignment under the Insolvent Act. The trustees, after this assignment, sold part tif the real estate under the power of sale, and received part of the gi'ods. B, G & Co. then claimed to prove against the estate for tho balance due to them above what they had received from the trustees. The Official Assignee held that they had lost their right, having elected to look to their security instead of bringing it under section 5, sub-sec. 5 of the Insolvent Act of 1864; .and his award was affirmed by the county judge on appeal ; Held on appeal to the Court of Queen's Bench, that 10 1 « : I iff'B M «^. ,1 1: i Ml I . ■fa 146 INSOLVENT ACT OF 1875. ml - ' r. the mere fact of the sale did not necessarily exclude them from proof, but that the securities sold might yet be valued, and if the estate had not been prejudiced or were recompensed for any loss thereby, they should still be allowed to prove {In re Hurst, 31 Q. B. U. C. 116). A creditor of a liquidating debtor, who, before the presentation of the lietition, has obtained a garnishee order affecting money accruing duo to his debtor, but who has not obtained an order for payment by the garni- shee, is not a secured creditor within the meaning of the English Bank- ruptcy Act of 1869 (Ex parte areenway, L. R. 16 Eq. 619), In cases where the creditor holds the security of a third party, he may prove the whole debt against the bankrupt's estate, and apply to his secu- rity for any deiaciency {Ex parte Goodnuin, 3 Mad. 373 ; ex parte Biddnlph, 3D. & G. 587 ; ex parte Adams, 3 M. & A. 164 ; ex parte English dc American Bank, L. R. 4 Ch. Ap. 49). If, however, the creditor realizes his security before proving against the bankrupt's estate, he can only prove for the balance remaining unpaid {Ex parte Todd, 2 Rose, 202; ex parte Leers, 6 Ves. 644 ; ex parte Taylor, 1 D. & J. 302 ; but see ex parte Prescutt, 4 D, & C. 23. See ex parte Mufford, IG. & J. 4]). If the creditor holds biUs on which the bankrupt and other persons are liable as collateral security for his debt, and he proves for his whole debt, and one of the bills is afterwards paid, his proof will be reduced by the amount of such bill {Ex parte Brunskill, 2 M. & A. 220 ; ex parte Barratt, 1 Gl. & J. 327). In the administration of the property of partners their joint and separ- ate estates are considered as distinct estates, and, therefore, if a joint creditor has security upon the separate estate of one partner, he will be entitled to prove against the joint estate without giting up his security. And so in the converse case a separate creditor of one partner having a security on the joint estate can prove against the separate estate of such partner without giving up his security {Ex parte Peacock, 2 G. & J. 27 ; ex parte Adams, 3 M. & A. 157 ; ex parte Boivden, 1 D. & C 136 ; ex parte Halifax, 2 M. D. & D. 544 ; ex parte Davenport, 1 M. D. & D. 313 ; ex parte English tD Americaii Bank, L. R. 4 Ch. Ap. 50 ; Bank of Australasia Ts. Flower, L. R. 1 C. P. 27 ; Robson, 2 Edit. 256-296). In general permission will not be given to a creditor who has proved his whole debt, to withdraw his proof and set up his security, but under special circumstances this has been allowed as where the creditor has proved in ignorance of the existence of the security {Grugeun vs. Gerrard 4 Y. & C. 419 ; ex parte Davenport, 1 M. D. .fc D, 313). t : DIVIDENDS. 147 A creditor holding a security may, under this 84th sect. , put a value on his security and he is then deemed a creditor only in respect of the balance due to him after deducting the value at which he assesses the security. If he values his security and claims to rank for the balance, the Assignee may require from the creditor an assignment of the security at an advance of ten per cent on such specified value, to be paid as soon as the security is realized. The clause as to a creditor " holding a claim based upon iiegotiable in- struments, upon which the insolvent is only indirectly or secondarily liable" enables the creditor immediately upon the maturity and non-pay- ment of the instrument by which the liability is created to withdraw any proof he may have fyled, and to re- value his claim. Under the 60th sect of the Act of 1869, immediately upon the maturity and non-payment of the instrument he was entitled to amend his claim and treat such liability as unsecured. 8tl. But if the security consists of a mortgage if the upon real estate, or .upon ships or shipping, the pro- rarity" perty mortgaged shall only be assigned and delivered, to the creditor, subject to all previous mortgages hypothecs and liens thereon, holding rank and priority before his claim, and upon his assuming and binding himself to pay all such previous mortgages, hypothecs and liens, and upon his securing such previous charges upon the property mortgaged, in the same manner and to the same extent as the same were previously secured thereon ; and there- after the holders of such previous mortgages, hypo- thecs and liens, shall have no further recourse or claim upon the estate of the insolvent ; and if there be mortgages, hypothecs or liens thereon, subse- quent to those of such creditor, he shall only obtain the property by consent of the subsequently secured creditors ; or upon their filing their claims specify- ing their security thereon as of no value, or upon his paying them the value by them placed thereon » or upon his giving security to the Assignee that the estate shall not be troubled by reason thereof. or ship- ping. \i-'4 k i mm 148 INSOLVENT ACT OF 1875. This section is a re-enactment of the Gist section of the Act of 1869. See notes to section 77. Proceed- 86. Upon a secured claim being filed, with a threung valuation of the security, it shall be the duty of the edcitdm.'^ -A^ssignee to procure the authority of the inspectors or the creditors at their first meeting thereafter, to consent to the retention of the security by the cre- ditor, or to require from him an assignment and de- livery thereof ; and if any meeting of inspectors or creditors takes place without deciding upon the course to be adopted in respect of such security the Assignee shall act in the premises according to his discretion and without delay. This section is a re-enactment of the C2nd section of the Act of 1869- (See notes to section 84.) Rank of 87. The amount due to a creditor upon each sepa- items of a rate item of his claim at the time of the execu- claim. tion of a deed of assignment, or of the issue of a writ of attachment, as the case may be, and which shall remain due at the time of proving such claim shall form part of the amount for which he shall rank upon the estate of the insolvent, until such item of claim be paid in fall, except in cases of deduction of the proceeds or of the value of his security, as here- inbefore provided ; but no claim or part of a claim shall be permitted to be ranked upon more than once, whether the claim so to rank be made by the ganicperson orby difterent persons ; and the Assignee to"non may at any time require from any creditor a supple- mentary oath declaring what amount, if any, such creditor has received in payment of any item of the debt upon which his claim is founded, subse- quent to the making of such claim, together with the Oath of creditor as pavment of his claim. DIVIDENDS. 149 particulars ot such payment ; and if any creditor refuses to produce or make such oath before the Assignee within a reasonable time after he has been required so to do, he shall not be collocated in the dividend sheet. This section is a re-enactment of the 63rcl section of the Act of 1869. (See notes to sections 80 and 84 supra, where the creditors' position in respect to the Insolvent's estate is fully discussed.) 88. If the Insolvent owes debts both individually insolvent and as a member of a co-partnership, or as a member a^btf as a of two different co-partnerships, the claims against ^* him shall rank lirstupon the estate by which the debts they represent were contracted, and shall only rank upon the other after all the creditors of that other have been paid in full. This section is a re-enactment of the 64th section of the Act of 1860. The appellants in the matter of C. & Co. , insolvents, had a claim upon a note made by C. & Co., payable to C. , one of the firm, and by him endorsed to the appellants. They proved against the firm, on 3rd July, 1869, but afterwards withdrew it, and proved, on 11th J:; /»f 1869, the contestation was tried and contested before the Assignee in the first instance, from whose award there was an appeal to the judge. Now, by the above section, the contestation takes place before the judge in Ontario or before the court in Quebec. Claims 94. If it appears to the Assignee, on his examina- how dealt tion of the books of the insolvent, or otherwise, that "^^ ' the insolvent has creditors who have not taken the proceedings requisite to entitle them to be coUo- DIVIDENDS. 155 cated, it shall be his duty to reserve dividends for such creditors according to the nature of their claims, and to notify them of such reserve, wrhich notihcation may be by letter through the post, ad- dressed to such creditors' residences as nearly as the same can be ascertained by the Assignee ; and if such creditors do not file their claims and apply for such dividends previous to the declaration of the last dividend of the estate, the dividends re- served for them shall form part of such last divi- dend. This section is a re-enactment of the 69th section of the Act of 1809. This should not be constnied to mean that if the creditor does not demand his dividend, as well as file his claim, he wl'' be deprived of it, for that would place this class of creditors in a different position from others, lint tlie tiling of the claim should be held to be an application for a dividend tinder this clause, and if the claimant does not afterwards claim the amount awarded him, the rule as to unclaimed dividends must be fol- lowed (Abbott, page 44). BC VI SS ,11 9S. If any claim be objected to at any time, or if claims on any dividend be objected to within the said period objected of eight days, or if any dispute arises between the deter-^ creditors of the insolvent, or between him and any ™'"'''^ creditor, as to the amount of the claim of any credi- tor, or as to the ranking or privilege of the claim of any creditor upon such dividend sheet, the objec- tion shall be filed in writing by or before the Assignee, who shall make a record thereof; and the grounds of objections shall be distinctly stated in such writing, and the party objecting shall also file at the same time the evidence of previous service of a copy thereof on the claimant ; and the claimant shall have three days thereafter to answer the same, t.^ 156 INSOLVENT ACT OF 1875. .* which time may, however, be enlarged by the judge, with a like delay to the contestant to reply ; and upon the completion of an issue upon such objec- tion, the Assignee shall transmit to the clerk of the court the dividend sheet, or a copy thereof, with all the papers and documents relating to such objec- Rearing tion or Contestation ; and any party to it may fix a «|on day, of which two days' notice shall be given to the thereon. •' •' '^ adverse party, for proceedmg to take evidence thereon before the judge, and shall thereafter pro- ceed thereon from day to day mitil the evidence shall have been closed, the case heard and the judg- ment rendered, which judgment shall be final, un less appealed from in the manner hereinafter pro- Jndgmeut vided : the proceedings on the said objection or con- execu- i o o tory. testation shall form part of the records of the court, and the judgment shall be made executory as to any condemnation for costs, in the same manner as an ordinary judgment of the court. By the 70th section of the Act of 1869 the time for objecting to a divi- dend was after last day of publication of advertisement, instead of eight days as above ; and that section provides that the Assignee shall examine the parties and their witnesses under oath, and shall make an award as to contested claims and dividends. The 7l8t section of that Act points out when the Assignee shall receive a notice of such objection. The contestation and other pleadings should meet the requirement for all legal documents — namely, a specification of time, place, person and cir- cumstance. These may be described in plain and concise language, and no evidence can be received upon any fact not so set forth (see section 114, infra). The Assignee is empowered to hear and examine the parties and their witnesses under oath, and he should do so in the manner usual in litiga- tion, observing the ordinary and reasonable rules as to evidence, of which the following may be stated as of the highest practical importance, and as requiring to be referred to oftenest in ordinary cases : DIVIDENDS. 157 1. That the burden of proof shall be upon him who affirms a proposition of fact rather than upon him who denies it. 2. That the party upon whom is the burden of proof shall begin, 3. That the party who begins shall have the right to adduce the evi- dence in rebuttal, but such evidence shall only be such as tends to destroy the case of his opp(ment, and not such as tends directly to sustain his own. 4. That the party who holds the negative cannot usually adduce evidence in reply to his adversary's evidence in rebuttal. 5. That if the parties are examined they cannot make evidence for themselves, but that their answers cannot be divided. G. That the best evidence of which the case is susceptible should be adduced, and that secondary evidence should not bo received until proof is made that the best evidence cannot be obtained. 7. That on the examination of a witness in chief, leading questions are not usually permissible, but may be put on cross-examination. This rule, however, may be reversed if the witness is plainly hostile to the party who produces him and favourable to his opponent. It would be obviously impossible here to enter into a detailed discussion of the law of evidence, but enough has been said to indicate the order in which the proceedings should be carried on before the Assignee. If the dispute be conducted by coimsel the Assignee will be called upon to decide questions as to the admissibility of evidence, and as to the propriety of questions put to witnesses which might raise doubts even in the mind of a judge accustomed to deal with them. In such cases, if the objection be to the admissibility of evidence, it would be better for the Assignee to admit it, entering the objection to its admission. If it be to the pro- priety of a question it is better to permit it to be put if the Assignee has any doubt, entering the objection, and if it be an (objection to the form of the question it is always safe to insist that the (question shall be so framed as to leave the facts to be related by the witness, and not put into his mouth by the questioner, and the Assignee should always recollect that it is easy aftenvards to disregard testimony improperly admitted, but that the exclusion of that which ought to have been let in is not susceptible of so simple a remedy (Abbott, p. 45). 1 1 5'l 1 ' f i' 1 •r 4 4 VI i' !1i| m < 'i? J>6. The creditors, and in their default the in- Creditors specters, may by resolution authorize and direct tors may the costs of the contestation of any claim or of any testation" 158 INSOLVENT ACT OF 1H75. of ciaimH, dividend, to be paid out of the estate, and may make "* such order either before, pending, or after any such contestation ; they may also, with the sanction ol' the judge, authorize the payment out of the estate of any costs incurred for the general interest of the estate, whether such costs were incurred by th« Assignee, the inspectors or any individual creditor. The 73rd section of the Act of 18G9 contains a similar clause to the al)ove empowering the creditors to direct that the costs of the contestation < >f any claim or dividend should be paid out of the estate. The power given thorn to authorize payment out of the estate of any costs incurred f I 'r the general interest of the estate is new. If there be ttT. If, at the time of the issue of a writ of attach- ■f inm)i- ment, or the execution of a deed of assignment, any dersJizure immovable property or real estate of the insolvent assilm-*' ' be under seizure, or in process of sale, under any iiient or iittacli- inent ; Proceed- ing's. writ of execution or other order of any competent court, such sale shall be proceeded with by the otHcer charged with the same, unless stayed by order of the judge upon application by the Assignee, upon special cause shewn, and after notice to the plaintiff, — reserving to the party prosecuting the sale his privileged claim on the proceeds of any subsequent sale, for such costs as he would have been entilled to out of the proceeds of sale of such property, if made under such writ or order ; but if such sale be proceeded with, the moneys levied therefrom shall be returned into the court on whf '"* order the sale has been made, to be distributed a paid over to the creditors who shall have any privi lege, mortgage or hypothecary claims thereon, ac- cording to the rank and priority of such claims; and the balance of such moneys after the payment DIVIDENDS. l.)0 of such claims shall be ordered to be paid to the As- signee to be distributed with the other assets of the estate. This section follows the 74th section of the Act of 1 869, except that the proceeds of the sale are paid into the court on whoso order the sale has boon made, instead of to the Assignee. M. under a Fi. Fa. at his own suit against D. which was the first in the .sheriff's hands, purchased certain lands in September, 1807, D. had, in April previous, made a voluntary assignment under the Insolvent Act of 1864, to an Official Assignee who claimed the proceeds of the sale luuler the amended Act of 2!> Vic. cap. 18, sec. 17. M. claimed a conveyance from the sheriff crediting the purchase mcmcy on his judgment. The court under these circumstances discharged with costs an application by .VI. for a mandamus to compel the sheriff to convey, to which the Assignee was no party {In re Moffatt uml the Shenff of the Cuautij of York, 27 Q. B. U. C. 52). When a sale has been had under an execution again.st a debtor, who after the sale makes an assignment, the proceeds of the sale are not vested in the Assignee, but go to the judgment creditors (Sinddir vt: McDomjull ^ 29 Q. B. U. C. 388 ; Brand vs. Bkkle, 4 P. II. 191). But see sections .H2 and 83 and notes. When previous to an act of insolvency certain lands in which the in. solvent, a defendant in a suit in chancery, had an e(iuitablo interest, liad been ordered to be, and were afterwards 8(ild and the purchase money paid to the plaintiff in ef all claims proved against the lands '1 the suit by the prior mortgagee : it was held tliat, in the absence of roof of waiver by the plaintiff of his rights, the plaintiff was entitled in priority as against the creditors of the mortgagor under the assignment in insolvency (Darling vs. IVilaon, 10 Chy. 255). See Coh'-n-se vs. Michie, 16 C. P, 107 ; Wliyte vs. Trcadivell, 17 C P. 488 ; Ue, vs. Dotiglas, 1 L. J. U. C. [N. SJ. 108 ; in re Fair d-Buits, 2 U. C. L. J. ( -Sj. 216 ; Blokelij tt- Hall, 21 C. P. 130 ; Patterson vs. MdJarthi, pi i 160 INSOLVENT ACT OF 1875. 3p Q. B. U. C. 14 ; in re Hayden, 29 Q. B. U. C. 262 : cited under section 83 infra, Thvrpe vs. Tomuice, 18 C. P. U. C. 29 ; Brand vs. Bickle, 21 C. P. U. C. 138 ; Siwlair vs. McDotufuU, 29 Q. B. U. C. 388. On 30th January, 18G5, W. B. executed, before a notary public in Lower Canada, to the plaintiff, Rose, an instrument which purported to be an assignment under the Act of 1804, but which was informal in several particulars. On 24th February following, defendant issued execution against the goods of W. B. and gave it to the sheriff. ( )n 10th March following the other plaintiffs issued an attachment under the Insolvent Act, under which an Assignee was appointed, and on the same day the sheriff seized the goods of W. B. after the issue of the writ of attachment under the defendant's execution : Hehl, that the execution aiust prevail for that the subsequent proceedings in insolvency avoided the assignment to Rose, and the execution being in the sheriff's hands before the issuing of the attachment bound the goods at common law from its date, and under the statute of frauds, from the delivery to the sheriff (i2use et al. vs. Broim, 16 C. P. U. C. 477). An executi(jn was delivered to the sheriff against the goods of the defendant, upon wliich he seized certain goods. These goods were claimed by the guardian in insolvency of the estate of the defendant, against whom a writ of attachment under the Insolvent Act had also issued to the sheriff. The sheriff applied for relief under the Interpleader Act : Hehl, that under 28 Vict. , chap. 19 sect. 2, he was entitled to protection and an issue wiis directed (Buni.s vs. Steele, 2 U. C. L. J. [N. S]. 189 ; in re Ross, 3 P. R. 394 ; McWhlrhr vs. Learmouth, 18 C. P. U. C. 136). The plaintiff issued Fi. Fa. lands on 7th Juno, 1865, and renewed it from time to time until 4th June, 1867. On 30th March, 1867, defendant obtained his discharge in insolvency. Plaintiff had proved his claim for the full amount of the judgment in the Insolvent Court and had never attempted to take any proceedings under the writ which he refused to withdraw although recjuested to do so. The Court set aside the Fi. Fa. with costs ('/>icA-.'«m vs. Bunnell, 19 C. P. U. C. 216). In the case of a debtor d)ang leaving insufficient to pay his debts, execution creditors whose writs are in tho sheriffs hands do not lose their priority, nor does a creditor who has a seipiestration lose the advantage of it (Meyers vs. Meyers 19 (Jrant, 185 ; ItamUmi vs. Perry, 23 C. P. U. C. 346). A plea to a declaration on a promissory note on eiiuitable grounds in bar to the further maintenance of an action averring the pendancy of pro- ceedings commenced by thb plaintiff against the defendant under the Insolvent Act of 1864 for the same cause of action subsequently to the ini DIVIDENDS. 161 declaration in the cause, was held a bad plea (Baldwin vs. Peterman, 16 C. P. U. C. 310). 98. All dividends remaining unclaimed at the XTnciaim- " ed divi- time of the discharge of the Assignee shall be left ff. ■' how ivllow- courts, whether of law or equity, shall apply to all«d. claims in insolvency and also to all suits instituted by an Assignee for the recovery of debts due to the insolvent, in the same manner and to the same ex- ICG iNSOLVENT ACT OF 187o. ill tent, as if the insolvent were plaintiff or defendant, as the case may be, except in so far as any claim for set-off shall be affected by the provisions of this Act respecting frauds or fraudulent preferences. This section is somewhat similar to the 124th section of the Act of 1869, except that the above extends to equitable as well as legal set-oft'. Before the amended Act of 1 865, the right of set-off did not apply in insolvency as the statute introducing English Law into Canada passed 15th Oct., 1790, exceptetl the bankrupt laws, consequently creditors had before the amended Act of 1865, to pay the whole of the debts due by them, and receive only a dividend on the debts due to them. As a gene- ral rule for the purpose of sot-off each of the parties must be debtor and creditor in the same right, but there are exceptions to this rule as in the case of a factor selling goods without disclosing his principal {George vs. tlaggett, 7 T . R. 359), and debts due in separate rights may be set-off by special agreement (Caxon vs. Vhadley, 1 C. & P. 1 74). But a debt due to a testator cannot be set-off against a debt owing by his executor {Roger- son vs. Ludbroke, 1 Bing. 93), nor a debt due a wife, dum sola, against a debt from her husband {Ex parte Blagden, 2 Pose, 249). Nor a partner- ship debt against the separate debt of one partner, and vice versa {Abbott vs. Hicks, 5 Bing. [N.C.] 578 ; 3 Jur. 87 ; Ex parte Ttvogood, 11 Ves. 517). But the rule excluding set-off between joint and separate debts, does not apply to a surviving partner as the right to sue survives to him {Slip- per vs. SUdstone, 5 T. R. 493). All debts and demands proveable against the insolvent's estate may he set-off, but not otherwise {Gibson vs. Bell, 1 Bing. N. C. 753). If a trustee proceeds against a debtor of the bankrupt, who claims a riglit of set-off, the latter may apply to the court to restrain the pro- ouodinnts, and to give the necessary directions for giving effect to the set- off {Ex parte Law, De G. 678). But if the trustee has the option of pro- ceeding either in assumpsit or in tort and adopts the latter form, it would seem that the defendant will not be allowed to avail himself of set-off, which he might have had if sued on contract {Smith vs. Bodson, 4 T. R. 211). If a creditor having a right of set-off pays the debt owing by him to the bankrupt's Assignee under a mistake as to his rights, he may recover back the amount in an action against the trustee for money had and re- ceived to his use {Size vs. Dickason, 1 T. R. 385). * DIVIDENDS. 167 Under the bankrupt laws it is immaterial that the demands are of a different nature, as where one is founded on specialty and the other on situple contract, or that they arise on different accounts, provided they arise in the same right {Ex parte Pearce, 2 M. D. & D., 142 ; Pedder vs. Preston, 12 C. B. N. S., 535.) So also it would seem to be immaterial on what consideration, provided it is not illegal, a debt is founded, or that the debt on one side has arisen out of fraud or tort, and not upon any contract (Ryall vs. Raiohs, IVes. 375 ; ex parte Whittaker, 1 G. & J. 213 ; ex parte Winton, 1 M. & A. 440 ; Owem vs Denton, 1 Cr. M. & R. 711). A debt payable in fnturo can be set off against a debt payable in prcesenti, on the ground that, though there may not be mutual debts actually pay- able between the parties, still there are mutual credits, so that the case comes within the equity of the statute {Ex parte Prescot, 1 Atk.320; Dob- son vs. Lockhart, 5 T. R. 133 ; Alsager vs. Currie, 12 M. & W. 751 ; ex parte Wagataff, 13 Ves. 65; SheMonxa. Rothschild, S Taunt. 156 ; Atkinson V8. Elliott, 7 T. R. 378). An acceptance in the hands of an endorsee before, but which was not due until after, the bankruptcy of the acceptor, was held to constitute an item of credit between the bankrupt and the endorsee, on the ground that if a bill of exchange is accepted and goes out into the world, credit is given to the acceptor by every person who takes the bill(ff«Hfc€»/ vs. Smith, 3 T. R. 507 ; CoUins vs, Jones, 10 B. & C 777 ; Edmeads vs. Newman, 1 B. & C. 418). A debtor of the bankrupt will not be allowed to set off a bill or note endorsed or a debt transferred to him after the bankruptcy {Marsh vs. diamhers, Strange 1234 ; Dickson vs. Eeatis, 6 T. R. 57). Mutual credits within the meaning of the bankrupt laws are credits which must terminate or at least have a natural tendency to terminate, in debts {Naoroji vb. Batik of India,!,. R. 3 C. P. 444 ; Oibson v!i.Pell,l Bing. N. C. 743 ; Easum vs. Cato, 5 B. & Aid. 861 ; Smith vs. Hodson, 4 T. R. 211). A debt which becomes due to the bankrupt after his bankruptcy cannot be set off against a debt dn>i from him before his bankruptcy {Ex parte Rhodes, 15 Ves. 539). An executor may set off a debt due to his testator against a legacy be- queathed to a bankrupt or his wife, if the right to the legacy accrues before the bankruptcy {Cherry vs. Boultbee, 4 M.. & C 442 ; Ranking vs. Barnard, 5 Mad. 32 ; Bonsfield vs. Lewford, 1 De G. & J. 459. See Smee vs. Baines, 7 Jur. [N. S.] 902). The term set off, however, appears to be inaccurately applied to oases of this kind. The right of the executor 'I m 1 r A i. '■' 1G8 INSOLVENT ACT OF 1875. in such cases is rather a right to retain or pay out of the fund in hand than to set oflf (C'/ierrj/ vs. BuuUbee, supra), and on this ground an execu- tor was allowed to retain out of the share of the bankrupt residuary legatee a sum which the executor had lent to him out of the testator's assets {Ex parte Makim, 2 M. D. «fc D. 508). A right of set off as between the acceptor and drawer is not an ecjuity attaching to the bill {Ex parte ISwan, L. H. (» Eq. 344 ; (hilds vs. Han-ison, 10 Exchr. 574. Service of 108. Except wheu otherwise provided by this papers un- '' derthis Act, oiie cleav juridical day's notice of any petition, motion, order or rule, shall be sufficient if the party notified resides within fifteen miles of the place where the proceeding is to be taken, and one extra day shall be sufficient allowance for each additional fifteen miles of distance between the place of service and the place of proceeding ; and sernce of such notice shall be made in such manner as is now pre- scribed for similar services in the Province within which the service is made. This section is the same as the I25th section of the .Act of 1860, except the words " except when otherwise provided for by this Act," which arc not in that uoction. ('..minis- |o«^ The iudtje shall have the same power and HKins for u d i exiiniinu- authority in respect of the issuing and dealing with \\itiiti«sea. commissions for the examination of witnesses, as are possessed by the ordinary courts of record in the Province in which the proceedings are being- carried on. The issuinL; of commissions for the examination of witnesses in the cdurts of record in Ontario is regulated by chap. 32, Con. Stats. U. C. i^tie sees. 19, 20 and 21 of that Act. Sub^Biias 110. In any proceeding or contestation in hisol- vency, the court or judge may order a writ of snh- DIVIDENDS. 109 piena ad te8tificand}im or of subpoina duces tecum to issue, commanding the attendance as a witness of any person within the limits of Canada. This section is similar to the I27th section of the Act of 1869 : except that the power is not given to the Assignee to order a writ to issiio, as provided by that section. 111. All rules, writs of subpujna, orders and war- Service of rants issued by any court or judge in any matter orAc."^'"*'' proceeding under this Act, may be validly served in any part of Canada upon the party affected or to be affected thereby ; and the service of them, or any of them, may be validly made in such manner as is now prescribed for similar services in the Province within which the service is made ; and the person charged with such service shall make his return thereof under oath, or, if a sheriff or bailiff in the Province of Quebec, may make such return under his oath of office. This section is the same as the 128th section of the Act of 1809 ; except that the words " or Assignee " in that section are omitted in this. For the time for etl'octing such service, see section 108. ■r ■ I kit I I" ;; % irocesH, ow |)un- f. 11*4. In case any person so served with a writofi>i8oi)ed- xahpuiiia or with an order to appear for examination writs and does not appear according to the exigency of such {,' writ or process, the court or the judge on whose "''**'^' order or within the limits of whose territorial Juris- diction the same is issued, may, upon proof made of the service thereof, and of such default, if the person served therewith has his domicile within the limits of the Province within which such writ or process issued, constrain such person to appear 170 INSOLVENT ACT OF 1875. .t and testify, and punish him for non-appearance or for not testifying in the same manner as if such per- son had been summoned as a witness before such court or judge in an ordinary suit ; and if the per- son so served and making default has his domicile beyond the limits of the Province within which such writ or process issued, such court or judge may transmit a certificate of such default to any of Her Majesty's superior courts '.of law^ or equity in that part of Canada in which the person so served resides, and the Court to which such certificate is sent, shall thereupon proceed against and punish such person so having made default, in like manner as it might have done if such person had neglected or refused to appear to a writ of subpcena or other similar process issued out of such last mentioned court ; and such certificate of default attested by the court, judge or Assignee before whom default was made, and copies of such writ or process and of the return of service thereof certified by the clerk of the court in which the order for transmission is made, shall be prima facie proof of such writ or pro- cess, service, return, and of such default. This section is a re-enactment of the 129th section of the Act of 18G0. A pers )n summoned as a witness cannot refuse to give evidence respect- ing his dealings with the insolvent, by alleging he is a creditor {In lie Hamilton, 1 U. C. L. J. [N. S.J 62). Proof of default. Exiienses 113. No such Certificate of default shall be so tendered transmitted nor shall any person be punished for summoned neglect or refusal to attend for examination in neM,l?c' obedience to any subpcena or other similar process, unless it be made to appear to the court or judge DIVIDKNDS. tnnisraitting, and also lo the court receiving such certificate, that a reasonable and sufficient sum oi" money, according to the rate jwr diom and per mile allowed to witnesses by the law and practice of the superior courts of law within the jurisdiction oi which such person was found, to defray the ex- penses of coming and attending to give evidence, and of returning from giving evidence, had been tendered to such person at the time when the writ of HiibjKeiHiy or other similar process, ^vas served upon him. 171 M-ii I. This is a re-euactment of the loOth section of thie Act of 1800. 114. The forms appended to this Act, or other Forms uu- forms in equivalent terms, shall be used in the pro- Act. ceedings for w^hich such forms are provided ; and in every contestation of a claim, collocation or divi- dend, or of an application for a discharge, or lor confirming or annulling a discharge, the facts upon which the contesting party relies shall be set forth in detail, with particulars of time, place and circum- stance ; and no evidence shall be received upon any fact not so set forth ; but in every petition, applica- tion, motion, contestation or other pleading under this Act, the parties may state the facts upon which they rely, in plain and concise language, to the in- terpretation of which the rules of construction appli- cable to such language in the ordinary transactions of file shall apply. m This is a rc-enactnicnt of tlie 131st section of the Act of 1869. kit" •mi 172 INSOLVENT ACT OK 187'^. ,%■ 115. No plea or exception alle^in^' or aeltinior up F-.n-iin! any discharge or certificate of discharife, granted not t-iiiii under the bankrupt or insolvent law ol" any country trVt.-,i ,'„ whatsoever beyond the liiiiitsol" the Dominion, shall be a valid defence or bar to any action instituted in any court of (;oinpetent jurisdiction in the Dominion for the recovery of any del)t or obligation contracted within such limits. This i« tho same as tho KVJiid Hoctii>ii of tho Act of 18(59. A toroign law authorizinj,' tho dischargo of an iiiHolvoiit (h'htor iii\i,v' l»e directly proved, and tho court will not listen to an application for tli. « discharge of svich person after ho has allowed judgment to go by defaul' and is in execution (Brown vs. Hudson, Tay. 340). Where the person of an insolvent debtor is discharged from arrest !>> a foreign authority this court will not set aside an arrest made under tl.^ process of this court ft)r tho same cause I 'f action, it nut bi'ing bmnid !• model or restrain its course of proceeding by that of other ci>untrie8 (/'V :J9t>). An ".,ct and warrant" under Imp. Act lU-20 Vict., c. 7!> (Scotcli bankrupt Act), though containing no attestation clause without a witncs.'s to its execution, and specifying no lands in Upper Canado, is capable of registration {llnhmm vs. Carpeutvi; 11 (irant, 2!)3). Toan action onnotes against the makers, who wore members of a firm car- rying (m business hero and in Glasgcjw, one defendant pleaded on equitable grounds in substance that proceedings in bfvnkruptcy had been commenced against them in Scotland, in the proper cotirt there, and sequestration of their estates awarded, and a warrant of pi otection granted to them ; and that in such proceedings, which were still ponding, the plaintiff duly proved his claim against them, including those notes. Another defendant set up a similar defence, but averring only that tiio plaintiff, who had notice of the proceedings, could and ought lo have proved, and still might provi- therein, for the notes declared on : Held on demurrer lioth pleas bad, fiT that a sequestration and warrant ')f protection under the Bankrupt (Scot- land) Act, 185G, before a final discharge, formed no bar to this suit {Ho- bimon vs. McKeuml et i>rty with one C. to sell, and pay it among other debts, and told plaintiff's lifiither, who then held tho note, that ho had done so, and that as late as lHi'i8 he had soon him, and ho nbver mentionoy defendant (/■'<'» - '.r vs. Tuiihr, ;U q. IJ. l'. V. 24). An agent claimed to retain possession of prop'jrty for his indemnifica- tion in respect of certain accommodation notes given to liis principals, living in England- before tho bankruptcy there of the latter, on which, li'iwever, ho had paid nothing, and he dis|)ute(l any liability to the hold- is in respect thereof : Held that the Assignee in bankruptcy was on- itled to a receiver (Kemp vs. Jouct, 12 Cirant, 2r»0). In such a case the defendant sot up a defence founded upon a verbal uToement, proved by his own affidavit only, and inconsistent with a viitten instrument, which purported to contain the agreement entered into between tho parties, such agreement having been drawn by defend- lilt liimself, a practising attorney and solicitor, and executed by all the pirties. The verbal agreomont was said to have l)een omitted from the Aiiting through the confidence existing between tho parties : Held that ihe defence ought not to prevail on a motion for a receiver {ih.). \ receiver granted with liberty to defend and to propose himself as 8)ich, without salary (ih). See PhUlips vs. Mwiaoit, ft U. C. Q. B. 392 ; Matdson vs. Commercial li'ink, 2 U. C. Q. B. 338 ; see also City of Gla»jow Bunk vs. Murdoch (till, 11 C. P. U. C. 138). I X ■'' ■|»,'^ 174 INSOLVENT ACT OF 1875. A«to 116. The rulos of procedure as to amendments ni"nuin of pleadin«?s, which may be in force at any place ImfH un.ier whi.'re any proceedini^s under this Act are being thiH Act. carried on, shall apply to all proceedings under this Act ; and any court or Judge, or Assignee, before whom any such proceedings are being carried on, shall hav«' full power and authority to apply the appropriate rules as to amendments, to the proceed- ings so pending before him ; and no pleading or proceeding shall be void by reason of any irregu- larity or default which can or may be amended un- der the rules and practice of the court. This section is a ru-enoctniont of the 133rd section of the Act of 1809. As to amumliuent of pluiulings and proceedings — see Harrison, C. L. P. Act ]^i. 153 and 315 and notes. I'roviiiicm 1 1 |. The death of the insolvent, pending pro- (itHth'of ceedings in licjuidation, shall not atieci. such pro- ' ceedings, or impede the winding up of his estate; and his heirs or other legal representatives may con- tinue the proceedings on his behalf to the procur- ing of a discharge, or of the confirmation thereof. H.|ir.H. n- or of both : anil the provisions ci this Act shall apply how far to the heirs. administrators or other legal represen- '* ' ** tativcs of any deceased person, who, if living, would be subject to its provisions, but only in their capacity as sue'' heirs, administrators or representatives, without their being held to be liable for the debts of the deceased to any greater extent than they would have been if this Act had not been passed. This section is similar to the IS'tth section of the Act of 1869. If II debtor against whom a ]>ktition for adjudication is presented dies before the order of adjudicatiuii is made, the petition cannot proceed DIVIDENDS. 175 fEx parte Beak, 2 V. & B, 29). But when a debtur who has been ad- judged bankrupt dies, the court may order that the proceedings in the matter be continued as if he were alive (Eng. B. A. Act 1869, Sec. 80, par. 9). 118. The costs of the proceedings in insolvency Costs ; on up to and inclusive of the notice of the appointment pertv and of the Assignee, shall be paid by privilege as a first o"der* charge upon the assets of the insolvent ; the dis- abuf ^ bursements necessary for winding up the estate shall be the next charge on the property charge- able v^i'ith any mortgage, hypothec or lien, and upon the unincumbered assets of the estate respectively, in such proportions as may be justified by the nature of such disbursements, and their relation to the property as being incumbered or not, as the case may be ; and the remuneration of the Assignee and the costs of the judgment of confirmation of the discharge of the insolvent, except when such con- firmation is upon a deed of composition, or of the discharge if obtained direct from the court, and the costs of the discharge of the Assignee being first taxed by the proper taxing officer at the tariff rate, or if there be no tariff", at the same rate as is usual for uncontested proceedings of a similar character, after notice to the inspectors, or to at least th . ie creditors, shall also be paid therefrom as the last privileged charge thereon. But no portion of the As to a^- . , , 1 1 -i.! i. sets charge- assets or property chargeable with any mortgage, abk with hypothec or lien for any claim not provable on the ™^'^«*'''^''' estate shall be liable for any other but their propor- tion of the costs necessarily incurred in realizing such assets and property, "Except what may remain alter ;>ayraent of such mortgage or lien. m I7(j INSOLVENT ACT OF 1875. This section is somewhat similar to the 136th section of the Act of 1809. The latter porMou of it as to assets chargeable with u^ortgages &o. is new, (see Morgan Ina. vs. Whyte aiul Biron cited under section 82 supra). With regard to rent, the landlord may, in Quebec, claim for the amount payable to the end of current yearly term, after the assignment or the attiichment, whether there be a lease or not, as by the common law of that Province, the i> *ner of promises rented yearly without a lease can claim payment by privilege for the current year (Civil Code Act 2005). In On- tario, Now Brunswick and Nova Scotia, the preferential lien of the land- lord is restricted to one year last previous to the assignment or attach- ment, and from thence so long .as the Assignee may retain possession of the premises leased (Pophani, 8<>). The deposit required to be made by foreign fire insurance companies is intended for the security of Canadian policy holders, and on the insol- vency of any such company, the general creditors of the company are not entitled to share the deposit with the policy holders {In re tlie jEtna In- surance Co. of l>nhhn, 17 Grant, KK)). Provision lift. Tho. judf^e shall have the power, upon terH a be sab- jectto tion of court 135. Every Assignee shall be subject to the sum- mary jurisdiction of the court or judge in the same ju^^ manner and to the same extent as the ordinary offi- cers of the court are subject to its jurisdiction ; and the performance of his duties may be compelled, and all remedies sought or demanded for enforcing any claim for a debt, privilege, mortgage, hjrpothec, lien or right of property upon, in or to any effects or property in the hands, possession or custody of an Ass ;^nee, may be obtained by an order of the judge on summary petition in vacation, or of the court on a rule in term, and not by any suit, at- tachment, opposition, seizure or other proceeding any kind whatever , and obedience by the forced. Assignee to such order may be enforced by such court or judge under the penalty of imprisonment, as for contempt of court or disobedience thereto, or he may, if not an Official Assignee, be removed in the dipcretion of the court or judge. Obedience of how en DIVIDENDS. 181 ThiB section in similar to the 60th section of the Act of 1869. Declaration for entering a mill and taking and converting plaintiff's goods. Plea in substance, that the plaintiff's claim to the goods and mill is only under a mortgage made to one W, who, before the grievances complained of, made an assignment, under the Insolvent Act of 1869, to defendant of all his estate and effects, including this mill and goods, sub- ject to plaintiff 's mortgage ; that W was thin in possession of the premises, and such was transferred to the defendant, who took possession as such Assignee, and, except as Assignee, defendant has in no way interfered with the mill or goods ; that the plaintiff's alleged|right of property can be determined by the county judge, and that this court has no jurisdic- tion to try the same : Held, on demurrer, plea good, the plaintiff, under the 'acts stated, being restricted by section 50 of the Insolvent Act of 1869 to the remedy there t^ven : Held also that that section was not be- yond the power of the Dominion Parliament as being an interference with property and civil rif^hts, but was within their exclusive authority over bankruptcy and insolvency (Cronibie vs. JacksoH, 34 Q. B. U. 0, 575). Where the goods of A, having been seized by the sheriff under an exe- cution against B, had been handed over by the sheriff to an Assignee, to whom the debtor had made a voluntary assignment in insolvency : Held that A might maintain replevin against the Assignee : Held also that sec- tion 50 of the Insolvent Act of 1869 could not apply against the plaintiff, who was not a creditor, or in any way interested in the estate of the in- solvent {Burke vs. MciVhirter, 35 Q. B. U. C. 1). V l!8C In the Province of Quebec every trader Re^stra- having a marriage contract with his wife, by which mamage , . • i • J. 1. contracts he gives or promises to give or pay or cause to be of traders paid, any right, thing, or sum of money, shall en- '"^"•''^• register the same, if it be not already enregistered, within three months from the execution thereof ; and every person not a trader, but hereafter becom- ing a trader, and having such a contract of marriage with his wife, shall cause such contract to be en- registered as aforesaid (if it be not previously there- to enregistered,) within thirty days from becoming 182 INSOLVENT ACT OF 1875. such trader ; and in default of such regit tration the wife shall not be permitted to avail herself of its provisions in any claim upon the estate of such in- solvent for any advantage conferred upon or pro- mised to her by its terms ; nor shall she be deprived by reason of its provisions of any advantage or right upon the estate of her husband, to which, in the absence of any such contract, she would have been entitled by law ; but this section shall be held to be only a continuance of the second sub-section of sec- tion twelve of the " Insolvent Act of 1864," and of V ection one hundred and forty of the " Insolvent Act of 1869," and shall not relieve any person from the consequence of any negligence in the observance of the provisions of the said sub-section or section. This aeotion is similar to tho 140th section of the Act of 18(39. This section simply prohibits the wife from claiming on the estate of the husband under a marriage coQtract which has not been enregistered within the prescribed delay, it does not prevent her from holding property when she is separated as to property (acparee de hietut) from her husband by this contract, or by judgment of the court (Popham, 164). Illii IMPRISONMENT FOR DEBT. Insolvent 197- Ally debtor confined in gaol or on the on^b^ '" limits in any civil suit, who may have made the amJiy to*^ assignment provided for in this Act, or against Ji«laSe. who™ process for liquidation under this Act may have been issued may, at any time after the meet- ing of creditors provided for in this Act, make appli- cation to the judge of the county or district in which his domicile may be or in which the gaol may be in which he is confined, for his discharge from ira- T'roccwl- prisonment or confinement in such suit ; and there- uigp ***■ upon gu(.h judge nay grant an order in writing i» IMPRISONMKNT FOH DEHT. 183 directing? the sheriff or gaoler to brijig the debtor before him lor examination at such time and place in such county or district as may be thought fit ; and the said sheritfor gaoler shall duly obey such order, and shall not be liable to any action for escape in consequence thereof, or to any action for the escape of the said debtor from his custody, un- less the same shall have happened through his default or negligence ; or if the debtor is confined in the county or district in which the judge does not reside, the judge instead of ordering the debtor to be brought before him forexaminationmay, if he sees fit, make an order authorizing and directing the Official Assignee for the county or district in which the debtor is confined, to take such examina' tion, and it shall be the duty of the Official Assignee to take down or cause to be taken down such exam- ination fully in writing and transmit the same un- der his hand forthwith to the judge ; and the Official Assignee shall be entitled to ten cents for each folio of one hundred words of such examination. (1.) In pursuance of such order the said confined J?*""!"*?' ^ ' * turn of in- debtor and any witnesses subpcenaed to attend andsoiy^nt ■^ and wit- give evidence at such examination may be exam- nessei. ined on oath at the time and place specified in such order l)efore such judge or Assignee ; and if on such.iudge examination it appears to the satisfaction of thccha^e judge that the said debtor has bona Jide made an[!"^mina-* assignment as required by this Act, and has not^J^^?]^. been guilty of any fraudulent disposal, concealment*'^'^- or retention of his estate or any part thereof, or of his books and accounts or any material portion thereof, or otherwise in any way contravened the provisions of this Act, such junement of such examination for a period of not less than seven days, nor more than fourteen days, unless the parties consent to an earlier day : (3.) After such examination, in case of any subse- quent arrest in any ci\al suit as aforesaid for causes of action arising previous to the assignment or pro- cess for liquidation, the said debtor may, pending further proceedings against him under this Act, be forthwith diBcharged from confinement or imprison- ment in such suit, on application to any judge and Proviao. ou producing such previous discharge : Provided that nothing in this section contained, shall inter- Minntea of •xaniina- ti<)ik to b« kept PoBtpono- ment in certain CMOS. Ail to any subse- quent ar rest. APPEAL. isa fere with the imprisonment of the said debtor, in pursuance of any o^ the provisions of this Act. This section is soniowhat similar to the 145th suction of the Act of 1869. That part of above section which empowers the judge to order the As« signee to take down or cause to take down the examination in writing, and transmit the same to the judge is now. APPEAL. 198. In the Province of Quebec all decisions by a judge in chambers in matters of insolvency shall be considered as judgments of the superior court, and any final order or judgment rendered by such judge or court may be inscribed for revision or may be appealed from by the parties aggrieved in the same cases and in the same manner as they might inscribe for revision or appeal from a final judg- ment of the superior court in ordinary cases, under the laws in force when such decision shall be ren< dered. If any of the parties to any contestation, matter or thing upon which a judge has made any final order or judgment are dissatisfied with such order or judgment, they may, in the Province of Ontario, appeal therefrom to either of the superior courts of common law or to the Court ot Chan- cery, or to any one of the judges of the said courts in the Province of New Brunswick to the Supreme Court of New Brunswick, or to any one of the judges of the said court ; in the Pro- vince of Nova Scotia to the Supreme Court of Nova Scotia or to any of the judges of the said court; in the Province of British Columbia to the Supreme Court of that Province, or to any judge of the said court ; in the Province of Prince Edward Island to Appeal from any order of the jud^f ill Pro- vince of tiuobff. In other Provincea. h !m IMAGE EVALUATION TEST TARGET (MT-S) 7^ 4^ {./ A &; ^ 1.0 I.I 1.25 ■iilM IIIII25 >4^ lilM I!' lis 2.2 2.0 1.4 1.6 6" Photographic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14S80 (716) 872-4503 v^ #? ^ ^ Ci^ 186 INSOLVENT ACT OF 1875. ! prose cuted within eight days. the Supreme Court of J udicature, or to any judge of the said court ; in the Province of Manitoba, to the Court of Queen's Bench, or to any judge of the said court ; but any appeal to a single judge in the Provinces of Ontario, New Brunswick, Nova Scotia, British Columbia, Prince Edward Island, or Mani- toba, may, in his discretion, be referred, on a spe- cial case to be settled, to the full court, and on such h^^To^ .*" ^^^^^ i^ *^6 mean time as he may think necessary and just. No such appeal or proceeding in revision shall be entertained unless the apellant or party in- scribing for revision shall have, within eight days from the rendering of such final order or judgment, adopted proceedings on the said appeal or revision, or unless he shall, within the said delay, have made a deposit or given sufficient sureties before a judge that he will duly prosecute the said appeal or pro- ceedings in revision, and pay such damages and costs as may be awarded to the respondent. If the party apellant does not proceed with his appeal, or in review, as the case may be, according to the law , or the rules of practice, the court, on application of the respondent, may order the record to be returned to the officer entitled to the custody thereof, and condemn the appellant to pay the respondent the costs by him incurred. A demand for wages was made aa a preferred claim, to an Assignee. The creditors at a meeting passed a resolution authorizing the Assignee to pay all claims for wages, but tlie Assignee refused payment of this claim as made. At this time no dividend sheet had been prepared. A summons was subsequently issued by the county judge, calling on the Assignee to show cause why he should not pay the claim, and, the Assignee not appearing, evidence was taken before the judge, and an order made for the payment forthwith, with costs, of a sum less than the original demand. The Assignee afterwards paid the claim as reduced. If appel- lant does not pro- ceed. APPEAL. 187 y judge itoba, to re of the ?e in the a Scotia, or Mani- n a spe- on such icessary revision •arty in- ht days Igment, evision, e made a judge or pro- [■es and If the peal, or he law ition of tarned 3f, and nt the Jsignee. ssignee of this •ed. A on the id, the ind an an the duced. but refused to pay any costs ; upon which the judge's order was made a rule of court, and execution issued thereupon against the goods of the Assignee. Upon his application for a writ of prohibition to prohibit fur- ther proceedings in the county court on the writs or orders, «&c. : Held, 1, that the county judge had no power to adjudicate upon the claim until it had been decided upon by the Assignee, and in this case there was no decision of the Assignee to appeal from {In re CJeghom atid the Judge of the County of Elgin, and Munn, 2 L. J. [N. S.] 133. — C. L. Chamb. — Richards.) The Insolvent Acts of 1864 and 1865 do not require the petition in ap- peal to be signed by the insolvent or his attorney. Notice must be served on the Assignee of the day for presenting the petition to the court. The petition must be addressed to the court, not to the Chief Justice ; but this irregularity may probably be corrected. The neglect by the Assignee to file the papers on or befui'e the day of presenting the petition is no reason for rejecting the appeal, though it may be for enlarging the hear- ing, and proceeding against the Assignee for his neglect or contempt. Points not taken in the court below are not open to parties in appeal. Semble, that the more proper mode of raising such technical objections is to move a rule to set the proceedings aside, instead of urging the ob- jections on the argument of the merits (In re Parr, 17 C. P. 621^. On an application to a judge in chambers for the allowance of an appeal from the decision of the judge in insolvency, an order was made referring the matter to this court, without directing a special case to be settled between the parties, but no objection was made on this ground : — Held, that this was only an irregularity which might be waived, and, if not waived, ought to have been objected to by a rule to set aside the proceedings on that ground, in accordance with In re Parr, 17 C. P. 621 ; and that as the petition of appeal had been filed by permission of the court, and the appellant authorized to serve notice of hearing of appeal for a day named, the case was properly before the court for adjudication (In re Sharpe, 20 C. P. 82). Aji insolvent had been refused an absolute discharge by a county judge, from whose decision he appealed. The judge gave his reasons in writing, and concluded, " I must refuse his discharge absolutely, and must deny the prayer," &c. : — Held an order which could be appealed from, no formal order having been drawn up and signed (In re Jones, 4 P. R. 317.— C. L. Chamb.— A. Wilson). Notice of application for allowance of an appeal must be served within eight days from the day on which the judgment appealed from is pro- ^4 hA 1.1 188 INSOLVENT ACT OF 1875. !■ i:^' nounced, but the application itself may be sifter the eight days (JRe Owens, 12 Chy. 446). Where the notice was served in time, but named a day for the appli- cation which did not give the time the insolvent was entitled to, and was irregular in some other respects, the notice was held amendable (lb). Objections to the security on an appeal from the county court judge, under the Insolvent Act, 1864, are to be made to such judge (S. 0. lb. 660.) An application for a discharge was dismissed by the county judge on 17th September. On the 23rd the insolvent gave notice of an intended application on the 24th to a judge at Osgoode Hall, for leave to appeal : Meld, that this notice was clearly insufficient, but on the authority of Be Ow&ns, 12 Chy. 446 (which was, however, doubted), and in favour of the liberty of a subject, the notice was amended. Quaere, as to the materials that should be before the judge on such an application (In re Davidson, 4 P. R. 153.— C. L. Chamb.— A. Wilson.) E., living at Brantford, and James and John G., living in Dundas, carried on business at Brantford under the name of E. & Co. ; and James and John G. had also a separate business at Dundas, in which E. had no interest. On the 14th December, 1869, James and John G. , as indi- viduals, and as partners in the firm of James and John G., and as indi- vidual members of the firm of E. & Co., executed an assignment under the Insolvent Act of 1869, in Wentworth, of their and each of their estates to one F,, an Official Assignee in that county. On the fol- lowing day E. made an assignment of his estate, under the Act to an interim Assignee in the County of Brant.^and F. was afterwards appointed Ajssignee by the creditors. K. & Co., creditors of E. & Co. filed a claim in Brant under E.'s assignment, which other creditors objected to, and the Assignee, having heard the parties, made his award : — Held, that the county judge of Brant had jurisdiction to hear an appeal against such award, although James and John G., the co-partners of E., had not joined in his assignment ; and a mandamus was ordered directing him to hear and determine such appeal (In re McKenzie et al., 31 Q. B. 1). When an insolvent, who has appealed from the decision of a county judge refusing to set aside an attachment against him, dies during the pendency of this appeal, and no personal representative has been appointed, the appeal fails (Lawrie y: McMahon, 6 P. R. 9. — 0. L. Chamb.— Gait). The county judge has a general jurisdiction in matters of insolvency, and may sanction a suit in the name of the Assignee for the benefit of the APPEAL. 189 estate, notwithstanding a majority, both in number and value, of the creditors pass a resolution forbidding further proceedings (In re Lambe, 13 Chy. 391). The Assignee appealed from such an order in the interest of the credi- tors, whose transactions the suit impeached tov fraud, and the appeal wa» dismissed with costs ; the court observing that it was noi his duty to appeal from such an order at the expense of the estate (lb.). Where the affidavits on which an allowance of an appeal from a county court judge was sought were not intituled in any court, they were not allowed to be read (In re Sharpe, 2 Chy. Ohamb. 67. — VanKoughnet). An objection that no written order of discharge (against which it was sought to appeal) was produced, was considered fatal (lb.). Where the appellant was described as Wm. Darling, and the opposing creditors appeared to be Wm. Darling & Co., it was considered ground for refusing to entertain the appeal (lb.). An appellant in insolvency must apply promptly (lb.). The decision of a county court judge on an application by an insolvent for his discharge from imprisonment is appealable (Hoods vs. Dodds, 19' Chy. 639). A petition of appeal from the decision of a county court judge acting in insolvency need not set out aU the evidence, documents and materials used before the judge. What is needed is that either the petition or the notice accompanying it should shew to the opposite party the objection which is taken to the proceedings appealed from, and the materials to be used on the argument of the appeal (iZ>.). An order in insolvency was made on the 24th December ; the fifth day thereafter fell on Sunday : Held, that service of notice of appeal on Mon- day following was in time (lb.). It is not necessary that the security to be given on appeal in insolvency should be executed in presence of a judge (lb.) (and see In re Botsford, 22 C. P. U. C. 65 ; and in re Chaffey, 30 Q. B. U. C. 64). 199. Pending the contestation of any claim orReaerva- of a dividend sheet and of any appeal or proceeding amount of in revision, the Assignee shall reserve a dividend conte^. equal to the amount of the dividends claimed or contested. The 82nd section of the Act of 1869 contains a similar provision to the above. I •.J I lis !i m i, i i i l/i 190 INSOLVENT ACT OF 1875. FRAUDS AND FRAUDULENT PREFERENCES. 130. All gratuitous contracts or conveyances, or contracts without consideration, or with a merely nominal consideration, respecting either real or per- Oratui- tous con- tracts, within three ^Boiven^ sonal estate, made by a debtor afterwards becoming Fraud™* an insolvent with or to any person whomsoever, *®°*- whether such person be his creditor or not, within three months next preceding the date of a demand of an assignment or for the issue of a writ of attach- ment under this Act whenever such demand shall have been followed by an assignment or by the issue of such writ of attachment, or at any time afterwards, and all contracts by which creditors are injured, obstructed or delayed, made by a debtor unable to meet his engagements, and afterwards becoming an insolvent, with a person knowing such inability or having probable cause for believing such inability to exist, or after such inability is public and notorious, whether such person be his creditor or not, are presumed to be made with in- tent to defraud his creditors. This section is similar to the 86th section of the Act of 1869. The words " or at any time afterwards " are new. M. had in his warehouse 2,500 bushels of rye belonging to T. & W. They owed him $1,400, made up of money due for storing that and other grain, for grain supplied to them, and for balance of account. T. & W. were insolvent, and their creditors pressing them, of which M. was aware. They demanded the grain more than once, alleging that it would enable them to meet their creditors' immediate demands, but M. refused, saying it was his only security, and in the end, T. offered if M. would give it up, and a receipt of the debt due to him by T. & W., to assign to M. his interest in a vessel then worth about $1,600.00, this M. assented to, and on the 20th of November, T. executed a bill of sale of his interest to M., and received the grain. This transfer, however, being informal was re- turned by the Custom House authorities and another one executed on the FRAUDS AND FRAUDULENT PREFERENCES. 191 5th December. On the 7th January, an attachment in insolvency issued against T. : Held, that as M. had demanded payment, and the transfer was made on the express condition that the rye should be given up, the transac- tion must be regarded as not a voluntary one, and therefore not one by which M. had obtained an unjust preference : Held, also that the transac- tion must be looked at as if carried out on the 28th November (Mc- Farlane vs. McDonald, 21 Grant, 319). A debtor, being in difficulties, assigned all his property to a creditor, who agreed to pay a composition of 40 cents in the $ within a year. This had been paid, except to defendant, who refused to accept, and issued ex- ecution. On an interpleader between the Assignee and the defendant, to try the title to the goods assigned, the jury having found the transaction bona fide : Held, affirming the judgment of the county court, that such assignment was not avoided by the Insolvent Act, sec. 8, for that the statute applies only where proceedings are taken, and as against a person claiming, under it : Held, also, that the assignment was not invalid under 0. S, U. 0. c. 26, 8. 18 {Squire v. Watt, 29 Q. B. U. C. 328). A bank having cashed a bill of exchange, and taken by way of collateral security a bill of sale of certain goods of the drawer, this transaction was held not invalidated by the drawer's insolvent circumstances at the time {Newton vs. The Ontario Bank, 15 Grant, 283). In appeal from S. C. 13 Grant, 652. On the 18th of October the insolvents sold goods to one C. , taking his note for the price, which on the same day was taken by C. , and by the defendant, and one of the insolvents, to a bank, and there left to be applied in payment of notes made by the insolvents and endorsed by defendant. On the 20th the insolvents made a voluntary assigimient, being pressed to do so by threats of compulsory liquidation : Held, that the transaction being within thirty days before the assignment was a transfer to defendant by way of payment, giving him e.n unjust preference, and therefore void under sec. 8, sub-s. 1 ; that there was evidence also that it was made by the insolvents when unable to pay, with a person knowing such inability, and therefore made with intent to defraud their creditors ; and that it was also a payment to defendant under sub-s. 5 : Held, also, Morrison, J. , dubitante, that under sub-ss. 4 and 5 the Assignee might recover in trover for the goods sold, though before his title accrued the note had been discounted and the proceeds applied on defendant's endor8ations( C^rc/ter vs. Comitia, 28 Q. B. U. C. 540). In Quebec the right has existed to annul a sale of real estate, if the price given were less than half its value (Code Napoleon 1313), but it has 192 INSOLVENT ACT OF 1875. been recently limited to minors, and majors can no longer annul a contract for cause of lesion only (Civ. Code, L. C, Art. 1012). It is held that the pressure or importunity from a creditor will prevent thp zzt from beinr; a, frauui:!<)nt preference. The cases establish that if there was a bonafde application or pressure on the part of some person having a right to apply, and the A'it in any degree proceeded from such application or pressure, it was not e.itirely voluntary, and therefore was not a fraudulent preference {Brown v? Ktvmpton, 19 L. J. C. P. 169 ; Edward vs. Glyn, 2 £1. & El. 6 ; Morgan vs. Brurmdl, 5 B. & Ad. 296 ; BiUs vs. Sndth, 6 B. & S. 314). It was held that in order to prevent a transaction from being a fraudu- lent preference there must be an absence of collusion. If, therefore, the creditor acted in consequence of a hint or suggestion from the debtor as to the state of his afifairs, a demand or pttissure by the creditor would not l^revent the act from being a fraudulent preference (Strachan vs. Bcirion, 11 Ex. 647 ; SingUion vs. Buttler, 2 B. «& P. 283). But if the creditor procured his information as to the state of the debtor's a£fairs from a third person, to whom the debtor had in confidence com- municated it, this was held not to make payment to such creditor on demand or pressure a fraudulent preference {Belcher va. Jones, 2 M. & W. 258 ; Badsly vs. Ballard, 1 Comp. 416). It was not necessary in order to protect the transaction from being a fraudulent preference that the debt should be \t.^ .ually payable {Thompson vs. Freeman, 1 T. R. 165 ; Strachan vs. Barton, supra). But the person demanding payment or security was required to be some one having a right to do so {Stracham, vs. Barton, supra ; Belcher vs. Prettie, 10 Bing. 408). A request by a surety was held to be sufficient {Edwards vs. Olynn, 2 El. & El. 29). And see notes to sections 132 and 133. Certain other con' tracts voidable. 131. A contract or conveyance for consideration respecting either real or personal estate, by which creditors are injured or obstructed, made by a debtor unable to meet his engagements with a per- son ignorant of such inability, whether such person be his creditor or not, and before such inability has become public and notorious, but within thirty days next before a demand of an assignment or the a contract FRAUDS AND FRAUDULENT PREFERENCES. issue of a writ of attachment under this Act, or at any time afterwards, whenever such demand shall have been followed by an assignment or by the issue of such writ of attachment, is voidable, and may be set aside by any court of competent juris- diction, upon such terms as to the protection of such person from actual loss or liability by reason of such contract, as the court may order. 1^ Ml: a This section is similar to the 87th section of the Act of 1869. On the 13th September, 186G, S. agreed to deliver on account of K. at a railway station when wanted, 600 boxes of factory cheese at a certain rate per pound, and to keep the same insured until wanted. The weight had not been ascertained, in fact all had not been manufactured. Sub- sequently two warehouse receipts dated respectively 21st September and 9th October were given to K, one for 330 the other for 230 boxes, signed by S. and specifjring the weight of the cheese. On the 22nd October K. mortgaged to plaintiff 400 boxes of cheese purchased by him from S. on or about the 13th September, and then in the curing house of S. to secure moneys advanced to him by plaintiff iipon the security of part of the cheese. This mortgage was not filed. S. became insolvent on the 19th October following, and K. became aware of it on the following day. The plaintiff replevied 341 boxes of cheese : Held, that if even the property did not pass before the 21st September, the subsequent insolvency of S. did not affect K's right, for that the Insolvent \ct of 1864, sect. '8 sub- sect. 2, did not apply, as there was no evidence of obstructing or injuring creditors but the contrary, the property having been sold at its full value, but even if the case were within that clause the contract would be void- able only under the order of a competent tribunal, upon such terms as to the protection of the person from actual loss or liability as the court might direct : Held, also, that the mortgage to the plaintiff was valid, having been taken by way of additional security for a debt contracted to the bank in the course of its business, and therefore within 0. S. 0. , c. 54, B. 4, that it could not be impeached by anyone for want of filing, but an opposing creditor of K., and that as S. could not impeach it, neither could the defendant his Assignee in insolvency (Bank of Montreal va McWhiHer, 17 C. P. 506). if, '\:^ ■ill .m 13 194 INSOLVENT ACT OF 1875. Uontracts 13SI. All contracts, or conveyances made and acts intent to donc by a debtor, respecting either real or personal creStore estate, with intent fraudulently to impede, obstruct to be void. Qj. ^giay his Creditors in their remedies against him, or with intent to defraud his creditors, or any of them, and so made, done and intended with the knowledge of the person contracting or acting with the debtor, whether such person be his creditor or not, and which have the effect of impeding, obstruct- ing, or delaying the creditors of their remedies, or of injuring them or any of them, are prohibited and are null and void, notwithstanding that such con- tracts, conveyances, or acts be in consideration, or in contemplation of marriage. ^ This section is similar to the 88th section of the Act of 1869. A banking firm in Toronto, having become embarrassed by gold opera- tions in New York, applied to the plaintiffs, to whom they owed 350,000, to advance them $15,000 more ; and, in order to obtain the advance, they offered to secure both debts by a mortgage on the real estate of one of the partners, worth $30,000. The plaintiffs agreed, made the advance, and obtained the mortgage. In less than three months afterwards the debtors became insolvent nnder the Act. They were indebted beyond their means of paying at the time of executing the mortgage, but they did not consider themselves so, nor were the mortgagees aware of it. The mort- gage was not given from a desire to prefer the mortgagees over other cre- ditors, but solely as a means of obtaining the advance which they thought would enable them to go on with their business and pay all their creditors : — Held, that as respects the antecedent debt the mortgage was valid as against the Assignee in insolvency (Royal Canadian Bank vs. Kerr, ir Grant, 47;. In 1869 C. lent money to N. on an express agreement that it was to be secured by mortgage on certain property ; and on the 3rd July following the mortgage was given accordingly ; and on the 2nd August the mort- gagor became insolvent i — Held, that the mortgage was valid (Allan vs. Clarkaon, 17 Grant, 570). A person in embarrassed circumstances applied to one of his creditors ; o supply him with goods to enable him to carry on his business, which the FRAUDS AND FRAUDULENT PREFERENCES. 195 list il 1 '"■ ' f,: creditor agreed to supply on obtaining security therefor, as also for his pre-existing debt ; and a chattel mortgage for this purpose was accord* ingly given, and the goods supplied : — Held, not such a preference as ren- dered the chattel mortgage void {Risk VS. Sleeman, 21 Grant, 250). Two partners, before the Insolvency Act, assigned their joint and se- parate estates together, for the benefit of their joint and separate credi- tors, pari passu. An Assignee under the Act, afterwards appointed, filed a bill to set aside these assignments, on the ground that, to put the separate creditors of each on an equality with the joint creditors in respect of the joint property, and of the separate property of the other partner, was a fraud on the joint creditors. But it appearing that both the separate estates were solvent, and that the equality complained of was an advan- tage to the joint creditors, the bill was dismissed with costs {McDonald vs. McCallum, 11 Grant, 469). The insolvent had conveyed by way cf settlement to his intended wife a lot on which he had commenced a house, but which was not completed until after the marriage. On a b ill filed by the Assignee in insolvency, the court declared that for bo much of the building as was completed after marriage, the creditors had a claim on the property, but gave the wife the right to elect whether she would be paid the value of her interest without the expenditure after marriage, or pay the Assignee the amount of such expenditure, and it subsequently appearing that the husband had created a mortgage prior to the settlement, the wife was declared entitled to have . the value of the improvements made after marriage, applied in discharge of the mortgage in priority to the claims of creditors {Jackson vs. Boivman, 14 Grant, 156). It has been held that in order to bring a deed within the statute, 13 Eliz, Cap. 5, the fraudulent intent need not be actually proved to exist ; it is sufficient if the circumstances are such as to warrant the inference of fraud, want of consideration accompanied by embarrassed circiimstances has generally been considered to be sufficient to bring a deed within that statute. The principles deducible from the cases appear to be that, if having regard to the debts owing by the settlor or grantor at the date of the deed, and the proportion of his property comprised in it, his creditors are defeated or delayed ; if, in fact, the property omitted from the settle- ment, and immediately available for the payment of his debts is not suf- ficient for that purpose, the deed will be fraudulent au(l void within the statute {French vs. Freiich, 6 D. M. <& G. 95 ; Holmes vs. Penny, 3 R. & J. 90 ; Crossby vs. Elworthy, L. R. 12 Eq. 158). A deed, 6ona.^, executed for the benefit of one or more creditors. m ■ I'.' i 19G INSOLVENT ACT OF 1875. ^. and not meant hb a oluak for retaining a benefit to che debtor will nut be void under 13 Eliz. Ca]). 5, although it may operate to the prejudice of Home particular creditor, and would, if tlie debtor were bankrupt, be void under the policy of the bankrupt law (Alton vs. Harruon, L. R. 4, Ch. Ap. 623 ; Bayfm V8. Bullock, L. R. 7, Eq. 391 ; Yowig vs. Bani^tt, 1 F. A F. 320 ; Darvell vs. Temj, 6 H. & N. 807). If the person with whom the debtor contracta be ignorant of his tinan- cial condition the contract or conveyance will be valid, if made upon a ocnsideration, or if the insolvency be not notorious {Bedwtride du Not, No. 1432 ; Jousse, Ord. 1073, tit. 11, art. 4 and paragraph, 86). In Ontario, it is held that actual knowledge, not mere constructive no- tice, is necessary to vitiate under this clause {Leijsde Wife vs. McPherson, 17 C. P. U. C. 266). This section is copied from sub-section 3 of section 8 of the Act of 1864. Under that the case of Davis et al vs. Muir and Chamberlin con- testing has been recently decided in the Superior Court, at Moutreal. It is of sufficient interest to be reproduced somewhat fully. About the month of June, 1807, the insolvents, Davis, Welsh & Co obtained from James Muir, his accommodation notes in their favour for $12,000.00. • About the lOth January, 18G8, James Muir hearing that they had si'.s- pended payment, obtained their notes, and causud them to be antedated and made correspond as regards the dates and amounts to the accommoda^tion notes. Davis, Welsh & Co. made an assignment under the Act about ten days after. One of these notes was then transferred by him, but without recourse to the claimant E. Muir, a creditor of James Muir, who took it as a se- curity for an antecedent debt, but before its apparent maturity and with- out any positive knowledge of the foregoing details. Shortly after this transfer by James Muir to E. Muir, the former also became insolvent. Under these circumstances, E. Muir, as the holder of the note being as stated one of those got by James Muir from the D. , W. «& Co. in January, 1868, and holding it as collateral security without recourse (sans recmtra) did not rank on James Muir's estate, but claimed on the estate of the insolvents as the makers. Their right thus to rank was con- tested on the ground chiefly : 1st, that the note was given in violation of this section of the Act of 1864, and was therefore absolutely void, a6 initio, even if E. Muir were a bonajide holder for value before maturity ; and 2ndly, on the ground that E. Muir having taken it for an antecedent FRAUDS AND FnAUDUT.ENT PRKFHHENCES. 19"; debt without incurrintf any now obligation on tho strongth of it, was nf)t in fact a holder for value as againat D., V" '\ Co. 'a creditors. The Aasijfnoe to the estate sustainou .c contestation on both the«fi ^'^ound9, and on appeal to the Superior Court, Torrance, J., confirmed tlie judgment, resting his decision on thu first ground as vlono autflcient with out adverting to any other. Ho hold it w.as an. attempt to create a se- curity upon the estate of persf>n8 at tho time insolvent, and that the pro- hibition pronounced was an a])3olutu prohibition, which rendered null thu note in no matter whose hands it was. It is thus decided that a promissory note given in violation of this sec- tion of the Act is absolutely null, (ib initio, even in the hands of a third party, an innocent holder, before maturity (see 13 L. C, Jur. 184). 133. If any sale, deposit, pledge or transfer bei^™nd'i- made of any property real or personal by any per- ferentiai son in contemplation of insolvency, by way ot secur- to be void* ity for payment to any creditor ; or if any property real or personal, movable or immovable, goods, effects, or valuable security be giver by way of pay- ment by such person, to any creditor whereby such creditor obtains or will obtain an unjust preference over the other creditors, such sale, deposit, pledge, transfer or payment shall be null and void, and the subject thereof may be recovered back for the benefit of the estate by the Assignee, in any court of competent jurisdiction ; and if the same be made Pretump- within thirty days next before a demand of an as- fraui. signment, or for the issue of a writ of attachment under this Act, or at anytime afterwards, whenever such demand shall have been followed by an assign- ment or by the issue of such writ of attachment, it shall be presumed to have been so made in contem- plation of insolvency. This section is similar to the 89th section of the Act of 1869, and to aub-sect. 4 of sect. 8 of tho Insolvent Act of 1864. m m M 198 INSOLVENT ACT OF 1875. ■^ ^■'ifteii' In this case the insolvent, about two months before the attachment against him, and hi;^ assigrment consequent thereon, assigned to defend- ant, a creditor, a policy of insurance upon merchandise in security for a debt about to be placed in suit, and the insurance company, upon a fire, paid over the proceeds of the policy to the creditor to the extent of his debt. The |>laintifl" claimed as Assignee to recover back this amount and he called the iiinulvent, who swore that when he assigned the policy he had no contemplation of insolvency, that his intention was with the remaining assets and the residue of the moneys from the policy, after pay- ing defendant, to re-open his business, but that he was driven into insol- vency by the act of a creditor, who, though he had promised him time, sued out a writ of attachment against him : Held, that the onus being upon the plaintiff of proving that the transfer of the policy was made by the debtor in contemplation of insolvency (it not having been made with- in thirty days of the issue of attachment or of the execution of the deed of assignment) the evidence produced by him failed to establish this fact, and that the verdict, therefore, for the defendant was right : Held, also, that there was no fraudulent preference, it not being pretended that the assignment of the policy was the spontan- eous act of the debtor, but the fair inference being that it was made in consequence of pressure by the creditor ; Held, also, that sub-section five of section eight, clearly did not apply to this case, the money received by defendant not having been a payment l)y a debtor unable to meet his engagements in full, but having been received under the assignment of the policy and from the company ; that the assignment being valid, it was quite immaterial whether when tlie money was paid the defendant knew, or had probably cause for believing, the then inability of the insolvent to pay his debts in full {McWhirter vs. Thome, 19 C. P. U. C. 302). Under section 89 of the Insolvent Act of 1869, the presumption that transactions within thirty days next before the assignment, &c., were made in contemplation of insolvency, is not conclusive, but may be rebut- ted. In this case, the creditor, who lived twenty miles from the insol- vent, had a mortgage on the insolvent's house for $900, of which $400 was due. On the 8th February, he wrote to the insolvent to call and arrange matters the next time he was in, and, on the 9th, he purchased from the insolvent about $1,400 \rorth of pork, on condition that $600 should go upon the mortgage, and he paid the balance of the purchase-money to other cre- ditors. An attachment in insolvency issued on the 3d March, and the Assig- nee brought this suit against the creditor, to avoid the transaction. The creditor said he did not wish to press the debtor in any way, but wanted FRAUDS AND FRAUDULENT PREFERENCES. 199 his money. The debtor owed about $3,000, and his property produced only $1,000. There was contradictory evidence as to defendant knowing, or having probable cause for believing, that the debtor was unable to meet his engagements, and as to whether the property mortgaged was worth more than the balance left due upon it. The jury having found in favour of the defendant, the creditor, the court held that the transaction was not avoided by force of the statute, and, upon the facts, they refused to interfere : Held also, tJhat the insolvent could not, under the circumstan- ces, be said to have acted voluntarily within the meaning attached to that word by the decided cases {Camijhell vs. Barrie, 31 Q. B. U. C. 279). The insolvent, an innkeeper, on the 12th of August, 1869, gave the plain- tiff a mortgage upon the whole of his property, payable in six months, for an over due debt. The attachment in insolvency issued on the 6th Decem- ber following, and the Assignee seized and sold the goods. The evidence showed that the mortgagor knew, or had strong reason to believe himself to be insolvent when he gave the mortgage, but that the defendant did not know it, and that the mortgage was given under pressure by defendant, and not with intent to defeat or delay creditors : Held that, under these circumstances, it was not void, under the Insolvent Act, as against the Assignee (Archibcdd vs. Haldan, 31, Q. B. 295). An insolvent absconded to the United States, taking money with him, he was followed there by the agent of a person in this country, who had be- come surety for him, and, by threats of criminal proceedings, induced to pay the amount of the security. A bill by the Official Assignee to recover the money from the surety, was dismissed with costs (Roe vs. Smith, 15 Grant 344). The Insolvent Act of 1864 forbids mortgages of real estate to a credi- tor by way of jjreference (Curtis vs. Dale, 2 Chy. Chamb. 184). But where the mortgagor did not believe he was insolvent (though the mortgagee feared he was so,) and made a mortgagee of real estate, under pressure of the mortgagee, and in the belief that he (the mortgagor) would thereby be enabled to ccjiitinue his business and pay his liabilities in full, the mortgage was held valid as against his Assignee in insolvency {Ibid). A preference which a debtor is induced to give by threats of criminal or other proceedings, is not void under the Indigent Debtors' Act of 1859, or the Insolvent Act of 1864 (Clemmow vs. Co)i,verae, 16 Grant 547 . See also McPhersvu vs. Reynolds, 60. P. U. C. 491). But to sustain the preference the pressure must have been real, and not a feigned contrivanco between the debtor and creditor, to wear the w. m - Mi m •m ... m ^ 200 INSOLVENT ACT OF 1875. appearance of pressure for the mere purpose of giving effect to the debt- or's desire and intention to give a preference {Clemmow vs. Converse, 16 Grant 547). A mortgage was obtained, by pressure, from an insolvent person, a miller, three months before he executed an assignment in insolvency, the mortgage was for an antecedent debt, and was not enforcible for two years, it comprised the mortgagor's mill only, and left untouched about one-third of his assets ; it was not executad with intent to give the mortgagee a preference, and, at the time of obtaining it, they were not aware of the mortgagor's insolvency. In a suit, by the Assignee in insol- vency, impeaching the transaction, the mortgage was held to bo valid {Mc- Whirter vs. Royal Canadian Bank, 17 Grant 480). The mortgagees, shortly after obtaining this mortgage, became aware of their debtor's desperate circumstances, and obtained from him, by pres- sure, a mortgage on his chattels used in his business. This mortgage was held void against the Assignee in insolvency (Ibid). Declaration in detinue and trover, for goods : Plea, that one J., the owner, being unable to meet his engagements, and in contemplation of in- solvency, mortgaged the goods to the plaintiflF, and within thirty days thereafter made a voluntary assignment in insolvency to the defendant, the Official Assignee ; that the mortgage was made to the plaintiff, as cre- ditor of and surety for J., whereby the plaintiff obtained an unjust preference over J. 's other creditors, who were thereby injured and ob- structed, wherefore the mortgage was void, and defendant, as Assignee, took the goods. The plaintiff replied that J. being a retail dealer and want- ing goods to carry on his business, asked the plaintiff to endorse notes to enable him to purchase them ; that the plaintiff consented on the con- dition that J., on receiving the goods, should secure him against loss, by a mortgage thereon, and on the other goods in J.'s store, who was to sell them at his store only, and out of the proceeds retire the notes, and if he should sell otherwise, the plaintiff might sell the goods for his own protection; that the plaintiff accordingly endorsed, and J., with the notes, purchased goods, which he mortgaged to the plaintiff, as agreed on, with other goods, for the bona fide, and sole consideration of perfecting the said agreement ; that J. afterwards, without the plaintiff's consent, assigned to the defendant, who took, with notice of the mortgage, and was proceed- ing to sell the goods, when the plaintiff forbade him and den\anded them : Bdd that the replication was good, for that the plaintiff only became a creditor by the actual transaction in which he gave equivalent in the new goods purchased, procured on liis credit ; and, under these circumstances, ,r,, h; 1 ■m. FRAUDS AND FRAUDULENT PREFERENCES. 201 the plaintiif being ignorant of J. '3 position, the mortgage was not avoided by the Insolvent Act (see sec. 8, sub. sec. I, 3, 4), though its eflfocts might be to delay creditors. Quaere, whether it was voidable under sub-sec. 2 {Mathers vs. Lynch, 27 Q. B. U. C. 244). Held that the mortgage in this case, given under circumstances fully set out in 27 Q. B. 244, was good as against creditors, the jury having tound it to be bona fide; and that notice to the OflRcial Assignee f 1864, but HeM, that he could not recover, for the note never was the insol- vent's property, and so never passed to the Assignee, and even if it was .a transfer or payment by Kyle within the Act and so avoided, this would not entitle the plaintifi' to the note (McGregor vs. Hume, 28 Q. B. U. C. 380). To avoid a transaction under sub-sec. 4 of sec. 8 of the Insolvent Act of 1864, not only must there be a contemplation of insolvency, but coupled with it a fraudulent preference of the creditor to whom the transfer is made over the other creditors (xl/BW^^M^er vs. Thome, 1^ C. P. U. C. 302). A, a private banker, exchanged checks with B for mutual accommoda- tion. A used B's check. A check of A '3 had been dishonoured, and the holder called at A's office the same day, and a clerk in the ordinary course of business gave B's check to the holder to pay A's dishonoured check . The next day A stopped payment : Held, following McWhirter vs. Thornfe, 19 C. P. 302, that the transfer was not a fraudulent preference under the Insolvent Act of 1869 (City Bank vs. Smith, 20 C. P. U. C. 93). TI. plaintiff claiming \inder a chattel mortgage for 82,000, as against an execution creditor, called the mortgagor, who swore that when it was given he was not insolvent, having real estate and a claim against a Rail- way Co. for which he had two years previously refused $100,000, but that there were several unsatisfied judgments and executions against him. He stated also that the mortgage was given for the price of the property covered by it, household furniture, which he had bought from the plain- tiflf, and that the terms of the purchase were cash, but being disappointed in getting the money to pay, he had offered either to lot the plaintiff take vwy Ai 202 INSOLVENT ACT OF 1875. ^. back the furnitiiro or give him a mortgage upon it, which latter he ac- cepted . The jnry having found that this mortgage was given by the mort- gagor, behig insolvent, with intent to give the plaintiff a preference over his other creditors : Held that there was evidence to go to them of the mortgagor's insolvency, but that if the mortgage was given under the cir- cumstauces stated by him, it was not a preference. A new trial was therefore granted (fletsee vs. White, 29 Q. B. U. C. 232). The Act of 1864 does not invalidate conveyances previously executed, and valid when executed {Gordon vs. Ymiwj, 12 Grant, 318), S. on the 25th November, 1864, agreed to deliver certain timber to plaintiff at T., in New York, in May, June, July, and August, 1865, $1,500 payable down, the same sum on the 15th of January, 1st of March, and 1st of April, 1865, and the balance on delivery at T. On the 14th Decem- ber following he assigned the timber to L. , as security for certain advan- ces in goods which L. agreed to make to enable him to get it out, and on the 27th of February, 1865, formally delivered it to L. 's son, who, after consulting with S. , wrote to the plaintiff that S. desired to deliver the tim- ber to the plaintiff, butlwas in difficulty ; that some of his creditors refused to wait until he could complete his contract, and had commenced actions, and recommending that the plaintiff should anticipate their action by tak- ing a delivery before they could interfere. On the 11th of March the plain- tiff accordingly paid L.'3 claim, and took a delivery. On the 3rd of March L. had served a writ on S. , telling him it was to secure precedence ; and an execution was obtained in this suit, under which the sheriff seized. On the 14th of April S. made an assignment under the Insolvent Act of 1864 to the defendant. He admitted that he was insolvent on the 11th of March, and long previous, though he said he did not then know it, and had not informed the plaintiff of it : Semble, that these facts shewed the delivery to the plaintiff to be a transfer by S., " in contemplation of insol- vency," the effect of which was to give him " an unjust preference over the other creditors," and that it was therefore void under sec. 8, sub-sec. 4 of the Insolvent Act of 1864 {Adams vs. McCall, 25 Q. B. U. C, 219). A person being insolvent sold his property to a creditor, the considera- tion being a pre-existing debt, and a sum in addition sufficient to make up the price agreed upon as the value of the property sold ; the amount so received by the debtor being by him paid over, with the knowledge of the purchaser, to another creditor ; and three months after this sale the debtor made an assignment under the Insolvent Act. On a bill filed by a credi- tor, the sale was set aside and a re-sale of the property ordered, the pro- ceeds to be applied in payment of the plaintiff's claim, and the residue, if i FRAUDS AND FRAUDULENT PREFERENCES. 203 any, to be paid over to the Assignee in insolvency {Coates vs. Joslin, 1 2 Grant, 524). A conveyance void against creditors was made in December, 1868, through a third parly, to the owner's wife ; the husband in November, 1869, be- came insolvent, and in June, 1870, joined his wife in a sale of the property to a purchaser without notice ; a conveyance to the purchaser was executed and registered, and the purchaser gave the wife a mortgage for part of the purchase money, and paid her the residue in cash. On a bill by the As- signee in insolvency he was declared entitled to the mortgage, and to any of the money which still remained in the wife's hands, and to any property, real or personal, which she had purchased with the residue, and still owned ; but the court refused to direct an enquiry whether she had separate estate, in order to charge the same with any of the residue which had been spent by her, or with the costs of the suit {Scmndcrs vs. Stull, 18 Grant, 590). Two mortgages were created by a debtor in favour of a creditor, whose claim consisted of promissory notes then current. It appeared that the debtor was in insolvent circumstances, and the court considered that both the debtor and creditor contemplated the debtor going into insolvency, which he did shortly afterwards. On a bill filed by the Assignee in insol- vency to set aside these mortgages, the court held them void as an " un- just preference " under the Insolvent Acts of 1864 and 1869 (Payne vs. Hendry, 20 Grant, 142). Considerable difference of judicial opinion at one time existed as to the correct meaning to be given to the words '* in contemplation of bankrupt- cy," whether they required the existence of an actual intention or deter- mination on the part of the debtor to become a bankrupt, or, whether it was sufficient to satisfy them if the circumstances of the debtor at the time of the transaction were such as to make his bankruptcy, according to some authorities, probable, and, accordhig to others, an inevitable event. The case of Morgan vs. Brmidrett, 5 B. & Ad. 296, is the leading au- thority in support of the view that actual bankruptcy must be contemplated by the debtor at the time of the transaction ; and the same doctrine v. as held in the case of Atkinson vs. Brindall, 2 Bing. N. C. 225 ; Abbott vs. Burbage, 2 Scott, 656 ; and StracJuin vs. Barton, 11 Ex. 047. The au- thorities in support of the other construction of the words in ijuestion aio aibmn vs. Botitts, 4 M. «Sr G., 109 ; Gibson vs. Muskett, 4 M & G., 160 ; Folwnd vs. Glynn, 4 Bing., 22 n. ; Exparte Simpson, De G. 9 ; Aldred vs. Comtable, 4 Q. B., 674. The doctrine laid down (in Morgan \a . Brmidrett) seems to have gone too far in holding the nctual conteiuplation of bank- ruptcy by the debtor necessarj- ti.> constitute a fraudulent preference, and !-''i ■ n; '■-*[»■ ill I 204 INSOLVF.NT ACT OF 1875. i vm ,.♦ «■ 1 the correct interpretation of the words in question would seem to have been that which, was adopted by Tindal, C. J. (in Gibson va. Boutts), name- ly, that although there might not be in the mind of the debtor at the time of the transaction any actual contemplation of bankniptcy, or intention to be- come a bankrupt, yet if he was at the time in such a hopeless state of in- solvency that he could not reasonably oxpoct to avoid bankruptcy, a pay- ment voluntarily made by him W'>uld Ije considered .is made in contempla- tion of bankruptcy and a fraudulent prerereuce (Robson, 129-30). Proviso. paymentB *^^" ^^^ery payment made within thirty days by debtor next before a demand of an assignment, whenever ▼Old, "=" such demand shall have been followed by an assign- ment, or by the issue of a writ of attachment, or within thirty days next before the issue of a writ of attachment under this Act, when such writ has not been founded upon a demand, by a debtor, unable to meet his engagements in full, to a person knowing such inability, or having probable cause for believing the same to exist, shall be void,. and the amount paid may be recovered back by suit in any competent court, for the benefit of the estate : Provided always, that if any valuable security be given up in consideration of such payment, such se- curity or the value thereof, shall be restored to the creditor before the return of such payment can be demanded. This section is similar to the SOth sr^ection of the Act of 1809 . Action by the Assignee of B. & P. , to recover back ^190 paid by ihem to defendant within thirty days next before the assignment, they being then unable to meet their engagements in full, and defendant knowing such in- ability, or having probable cause for believing it to exist. Plea, on equi- table grounds, that before the alleged payment, B. «& P. , being retail mer- ohants, requested defendant to lend to them for the purpose of carrying on their business, and he did lend, from time to time, various sums of money, upon the express agreement that such moneys should be repaid to defen- dant out of tlifi proceeds t)f the daily sales of goods thereafter made by B. & P., and that such procoeds should be hold by B. & P. upon trust FRAUDS AKD FBAUDULEKT PPEFEUPKCES. 205 |:.ii,U' to repay, and should be charged with and applied in repaying the defen- dant the amount lent by him ; that at the time of the payments defen- dant was the creditor of B. & P. to an amount not loss than the §190 for moneys advanced upon the saidexpress agreement, and the moneys paid to defendant by B. & P. were paid out of and formed part of the proceeds of said daily sales, and were applied by defendant upon and on account of the moneys lent to defendant upon the said agreement, and not otherwise : — Held, on demurrer, Morrison, J., diss., plea good ; for that the agree- ment between B. & P. and defendant, gave defendant an equitable claim and mortgage on their goods, which, under the proviso to section 90 of the Insolvent Act of 1869, was a " valuable security given up in conside- ration of such payment," and which must be restored to def^dant before a return of the payment to him could be demanded. Morrison, J. , was of opinion that the " valuable security " mentioned in section 90, must be a security recognised in law, which would prevail in the hands of a holder against any creditor, which the creditor, when proving, could shew and describe and value, and capable when so valued of being assigned and delivered to the Assignee for the estate ; and that defendant's equitable claim here was not such a security {Ghurcher vs. Johnston, 34 Q. B. 528). See Be Wallis, 29 Q. B. 313 ; Re Lamb, 4 P. R. 16 ; and see Churcher vs. Co^tis cited under sec. 130, supra. Held, that a pa3rment by an insolvent after attachment against him, on account of a draft discounted by defendants for him, and dishonoured by non-acceptance, was recoverable back by the Official Assignee, though the defendants were ignorant of the insolvency when they received the money from him (Roe vs. Royal Canadian Bank, 19 C. P. 34 ; followed in Roe vs. Bank of British North America, 20 C. P. 351). Previous to an act of insolvency certain lands in which the insolvent, a defendant in a suit in chancery, had an equitable interest had been ordered to be sold, and were afterwards sold, and the purchase money paid to the plaintiff in equity, the Assignee in insolvency moved tliat such moneys be paid into court for the benefit of the general creditors. It was held that the lands were subject to the order for sale and the niu- tion refused {Yale vs. Tollerton, Chy. Cham. Reports, Rep. 49). .il 13t5. Any transfer of a debt due by the insolvent, Transfer made within the time and under the circumstances, debts by ,, , T ,. .• J 1 insolvent in the next preceding section mentioned, or at any void. 1.1 SS 200 INSOLVENT ACT OP 1875. time afterwards, whenever such demand shall have been followed by an assignment or by the issue of such writ of attachment, to a debtor knowing or having probable cause for believing the insolvent to be unable to meet his engagements, or in contem- plation of his insolvency, for the purpose of enabling the debtor to set up by way of compensation or set- off the debt so transferred, is null and void, as re- gards the estate of the insolvent; and the debt due to the estate of the insolvent shall not be compen- satdti or affected in any manner by a claim so ac- quired ; but the purchaser thereof may rank on the estate in the place and stead of the original creditor. H ., This section is similar to the 91st section of the Act of 1869. To make the purchase hivalid the purchaser must at the time be aware or have probable cause for believing the insolvent to be unable to meet his en- gagements. Public.rumour, or judgments, or notes protested, would singly or collectively be ordinarily considered probable cause for believing the insolvency of a trader (see Adams vs. Sinclair tfc Muir, in Sup. Court, No. 2313, Judg., 1865, and see numerous cases cited in notes to Section 106, supra). Purchas- ing goods on credit by persons knowing themselves unable to pay, to be fraud, and how pun- ishable. 1 36. Any person who, for himself or for any firm, partnership or company of which he forms part, or as the manager, trustee, agent or employee of any person, firm, co-partnership or company, purchases goods on credit, or procures any advance in money or procures the endorsement or acceptance of any negotiable paper without consideration, or induces any person to become security for him, knowing or believing himself or such person, firm, copartner- ship or company for which he is acting to be un- able to meet his or its engagements, and concealing the fact from the person thereby becoming his r 1 ^: FRAUDS AND FRAUDULENT PREFERENCES. 207 creditor with tlie intent to defraud such person, or who by any false pretence obtains a term of credit for the payment of any advance or loan of money, or of the price or any part of the price of any goods wares or merchandise, with intent to defraud the person thereby becoming his creditor, or the credi- tor of such person, hrm, copartnership or company, and who shall not afterwards have paid or caused to be paid the debt or debts so incurred, shall be held to be guilty of a fraud, and shall be liable to im- prisonment for such time as the court may order not exceeding two years, unless the debt and costs be sooner paid : Provided always, that in the suit proviso. or proceeding taken for the recovery of such debt or debts, the defendant be charged with such fraud and be declared to be guilty of it by the judgment rendered in such suit or proceeding. This section is similar to the 92ncl section of the Act of 1869. The mere endorsement of renewal notes by a person insolvent is not a violation of sec. 8, sub-s. 7, of the Act of 1864 (In re Jwm, 4 P. R . 317 ; C. L. Chamb. A. Wilson). A purchase of goods by persons iinable to pay their debts in full is not fraudulent within sec. 8, unless such inability is concealed from the credi- tor with intent to defraud him {In re Garmtt et al. , 28 Q. B. 266). Fraud in contracting debts before the Act of 1864 is not to be excluded from consideration in an application to confirm the discharge. Where a trader, all whose property was heavily mortgaged, and who had large overdue debts which he coald not pay, obtained credit from Montreal merchants concealing his true position, falsely alleging that he was worth 84,000 more than he owed, and that he had no engagements that he could not meet. This was held such fraud as disentitled him to a discharge (In re Oivem, 12 Grant, 560). A trader, after discovering that he could not pay in full, continued his business, which was not shewn to be absurd or unreasonable, that he would thereby be enabled to do so, and in the course of business so continued Contracted some new debts but was unsuccessful, and found it necessary i^it flu 208 INSOLVENT ACT OF 1875. n to assign : Hdd, tliat he was not thereby disentitled to his discharge. In such a case it may or may not be his duty to discontinue his trade, according to circumstances ; continuing may be fraud, but it is not neces- sarily so (In re Holt et al. , 13 Grant, 568. See also 27iMr6er vs. Youiig et al. ; Tempest vs. Diichesnay, and re Frear vs. Oilmmir, cited under section 57 supra). .'^t L FraiKi 197. Whether the defendant in any such case must be •' proved, appear and plead, or make default, the plaintitf shall be bound to prove the fraud charged, and upon his proving it, if the trial be before a jury, the judge who tries the suit or proceeding shall immediately after the verdict rendered against the defendant Award of for such f raud (if such verdict is given), or if not 'me'nt*'" before a jury, then immediately upon his rendering his judgment in the premises, adjudge the term of imprisonment which the defendant shall undergo ; and he shall forthwith order and direct the defeijid- ant to be taken into custody and imprisoned ac- cordingly ; but such judgment shall be subject to the ordinary remedies for the revision thereof, or of any proceeding in the case. This section is similar to the 93rd section of the Act of 1869. Assignees |3S. Every Assignee, to whom an assignment deemed is made Under this Act, is an agent within the certain ^^ meaning of the seventy-sixth and following sections §2-;^v\', of the " Act respecting Larceny and other similar *■ ^^' ofences^' and every provision of this Act, or resolu- tion of the creditors, relating to the duties of an ' Assignee, shall be held tx) be a direction in writing, within the meaning of the said seventy-sixth sec- tion; and in an indictment against an Assignee, discharge, hia trade, not necoH- I. Young et ier section uch case plaintitf nd upon be judge lediately 3fendant ►r if not sndering I term of indergo ; I defeiid- tied ac- bject to of, or of iment m the jctions Similar resolu- of an riting, th sec- lignee, FRAUDS AND FRAUDULENT PREFERENCES. 209 under any of the said sections, the right of property in any moneys, security, matter or thing, may be laid in " the creditors of the insolvent (naming him), under the Insolvent Act of 1875," or in the name of any Assignee subsequently appointed, in his quality of such Assignee. This section is similar to the 14Gth section of the Act of 1869 . The following is a copy of the 76th section of the " Act respecting Lar- oony and other similar offences : " — "Whosoever having been entrusted, either solely or jointly with any other person, as a banker, merchant, broker, attorney or other agent with any money or security for the payment of money, with any direction in writing to apply, pay, or deliver such money or security, or any part thereof respectively, or the proceeds or any part of the proceeds of such security for -any purpose or to any person specified in such direction, in violation of good faith and contrary to the terms of such direction, in any wise converts to his own use or benefit, or the use or benefit of any person other than the person by whom he has been so intrusted, such money, security or proceeds, or any part thereof, respectively, and who- soever having been intrusted either solely or jointly with any other person as a banker, merchant, broker, attorney, or other agent, with any chattel or valuable security, or any power of attorney for the sale or transfer of any share or interest in any public stock or fund, whether of the United Kingdom or any part thereof, or of this Dominion of Canada or any pro- vince thereof, or of any BHtish colony or possession, or of any foreign state, or in any stock or fund of any body corporate, company or society, for safe custody, or for any special purpose, without any authority to sell, negotiate, transfer or pledge, in violation of good faith, and contrary to the object or purpose for which such chattel, security or power of attorney has been intrusted to him, sells, negotiates, transfers, pledges, or ' in any manner converts to his own use or benefit, or the use or benefit of any person other than the person by whom he has been so intrusted, such chattel or security, or the proceeds of the same or any part thereof, or the share of interest in the stock or fund to which such power of attorney relates, or any part thereof, is guilty of a misdemeanor, and shall be liable to be imprisoned in the penitentiary for any term not exceeding seven years, and not less than two years, or to be imprisoned in any other gaol or place of confinement for any term less than two years, with or without 14 .11 m Mt-A I * 210 INSOLVENT ACT OP 1875. hard labour, and with or without sulitnry confinement ; but nothing in this section contained relating to agents, ahall affect any trustee in or under any instrument whatsoever, or any mortgagee of any property real or personal, in respect to any act done by such trustee or ntortgagee in relation to the property comprised in or affected by any such trust or mortgage, nor shall restrain any banker, merchant, broker, attorney or other agent from receiving any mcmey duo or to become actually due and payable upon or by virtue of any valuable security according to the tenor and effect thereof, in such manner as he might have done if this Act hud not been passed, nor from selling, transferring, or otherwise disposing of any securities or effects in his possession upon which he has any lien, claim or demand entitling him by law so to do, unless such sale, transfer or other disposal extends to a greater number or part of such securities or effects than are requisite for satisfying such lien, claim, or demand." i I Pum^sh- 139. Any Assignee who in any certificate re- ABsipee quired by this Act shall wilfully misstate or falsely wilful mis- represent any material fact for the purpose of deceiv- ' ing the judge, the creditors, or the inspectors, shall be guilty of a misdemeanor, and shall be liable, at the discretion of the court before which he shall be convicted, to imprisonment for a term not exceed- ing three years. This section is new. Certain 140. From and after the coming into force of wiventa'to this Act, any insolvent who, with regard to his nfe^ors! estate,— or any president, director, manager or em- ployee of any copartnership, or of any incorporated company not specially excepted in the first section of this Act, with regard to the estate of such copart- nership or company, who shall do any of the acts or things following with intent to defraud, or defeat the rights of his or its creditors, shall be guilty of a misdemeanor, and shall be liable, at the discretion FHAUDS AND FRAUIVJLKNT PREFERENCES, 211 of the court before which he is convicted, to pun- ishment by imprisonment for not more than three years, or to any greater punishment attached to the offence by any existing Statute. If he does not upon examination fully and truly N^t fully discover to the best of his knowledge and belief allin>,'i.rnot his property, real and personal, inclusive of his i)r..i.trty, rights and credits, and how and to whom, and for ,mp,.rH,&o. what consideration, and when he disposed of, assigned or transferred the same or any part thereof, except such part has been really and bona fide before sold or disposed of in the way of his trade or business, or laid out in ordinary family or household expen- ses, and fully, clearly and truly state the causes to which his insolvency is owing ; or shall not deliver up to the Assignee all such part thereof as is in his possession, custody or power, (except such part thereof as is exempt from seii.ure as hereinbefore provided), and also all books, papers and writings in his possession, custody or power relating to his property or affairs ; If, within thirty days prior to the demand of Removing assignment, or the issue of a writ of attachment ^"^*'^^'''^^' under this Act, he doth, with intent to defraud his creditors, remove, conceal or embezzle any part of his property to the value of fifty dollars or upwards ; If, in case of any person having to his knowledge j^t^^ jg. or belief proved a false debt against his estate, he n<»"ncmg fail to disclose the same to his Assignee within one claims. month after coming to the knowledge or belief thereof ; If, with intent to defraud, he wilfully and fraudu- False lently omits from his schedule any effects or pro- perty whatsoever ; ' I schedule. !!?*+'■■ 212 INSOLVENT ACT OF 1875. $ ^. I Falsifying books. Withhold- If, with intent to conceal the state of his affairs, Ac. ° ^0^ to defeat the object of this Act, or of any part thereof, he conceals, or prevents, or withholds the production of any book, deed, paper or writing- relating to his property, dealings or affairs ; If, with intent to conceal the state of his affairs or to defeat the object of the present Act or of any part thereof, he parts with, conceals, destroys, alters, mutilates or falsifies, or causes to be concealed, des- troyed altered, mutilated or falsified, any book, paper, writing or security or document relating to his property, trade, dealings or affairs, or makes, or is privy to the making of any false or fraudulent entry or statement in or omission from any book, paper, document or writing relating thereto ; If, at his examination at any time, or at any meet- ing of his creditors held under this Act, he attempts to account for the non-production or absence of any of his property by fictitious losses or expenses ; If, within the three months next preceding the demand of assignment, or the issue of a writ of attachment in liquidation, he pawns, pledges or disposes of, otherwise than in the ordinary way of his trade, any property, goods or effects, the price of which remains unpaid by him during such three months. Stating fictitious Disposing of goods not paid fer. This section is similar to the 147th section of the Act of 1869. Offences 141. Every offence punishable under this A.ct thi^^ Act, shall be tried as other offences of the same degree how tne . ^^^ triable in the Province where such offences are commited. This section is somewhat similar to the 148th section of the Act of FRAUDS AND Fl- VUDULENT PREFERENCES, 213 1869, except that tho above section does not require thai a special jury be empanelled, as provided by that section, I , 142, If any creditor of an insolvent, directly or Creditors indirectly, takes or receives from such insolvent, any considera •" . . ■' tion for payment, gift, gratuity or preference, or any promise granting of payment, gift, gratuity or preference as! a con- Ac. sideration or inducement to consent to the discharge of such insolvent, or to execute a deed of composi- tion and discharge with him ; or if any creditor knowingly ranks upon the estate of the insolvent for a sum of money not due to him by the insolvent Penalty. or by his estate, such creditor shall forfeit and pay a sum equal to treble the value of the payment, gift, gratuity or preference so taken, received or prom- ised, or treble the amount improperly ranked for, as the case may be, and the same shall be recover- able by the Assignee for the benefit of the estate, by suit in any competent court, and when recovered shall bo distributed as part of the ordinary assets of the estate. This section is similar to the 149th sect, of tho Act of 1869. ihe Act of 143, If, after a demand is made for the issue of Pu'^is*': ment of a writ of attachment in insolvency, or for an assign- insolvent rBCBivinc ment of his estate under this Act, as the case may money, be, when such demand shall be follow^ed by the not'hand- issue of a writ of attachment or by an assignment same to under this Act, the insolvent retains or receives any ^^*"^*^*- portion of his estate or effects, or of his moneys, securities for money, business papers, documents, books of account, or evidences of debt, or any sum or sums of money, belonging or due io him, and / I i I 214 INSOLVENT ACT OF 1875. retains and withholds from his Assignee, without lawful right, such portion of his estate or effects, or of his moneys, securities for money, business papers, documents, books of account, evidences of debt, sum or sums of money, the Assignee may make ap- plication to the judge, by summary petition, and after due notice to the insolvent, for an order for the delivery over to him of the effects, documents, or Imprison- moneys so retained ; and in default of such delivery disobej^ng^" Conformity with any order to be made by the Older. judge upon such application, such insolvent may be imprisoned in the common gaol for such time, not exceeding one year, as such judge may order. This section in similar to the 150th section of the Act of 1869. The Act of 1864 did not make any provision for the cases specified in this section. The amended Act, 29tli Vict. , chap. 18, sec. 29, supi>lied the omission. The above section is copied from that Act, and under it it has been held in Montreal, where an insolvent received a sum of money during the interval between date of notice of meeting of creditors and the appointment of an Assignee, and refused to pay it to the Assignee, that this was retaining and withholding without lawful right, within the mean- ing of the Act (In re Warmington ; Jones, Assignee : 12, L. C. Jurist, 237). Certain 144. The deeds of assignment and of transfer, or ments to in the Province of Quebec authentic copies thereof, denw. or a duly authenticated copy of the r(^cord of the appointment of the Assignee certified by the clerk or prothonotary of the court in which such record is deposited, under the seal of such court, shall be prima facie evidence in all courts, w^hether civil or criminal, of such appointment, and of the regularity of all proceedings at the time thereof and antece- cent thereto. ^. INCORPORATED COMPANIES. This section ia similar to the 151st section of the Act of 1869. 215 BUILDING AND JURY FUND. 145. One per centum upon all moneys proceed- Contribu- ing from the sale by an Assignee, under the provi- Buiiaing sions of this Act, of any immovable property in the Fund in Province of Quebec, shall be retained by the Assig- nee out of such moneys, and shall, by such Assignee be paid over to the sheriff of the district, or of either of the Counties of Gasp^ or Bonaventure, as the case may be, within which the immovable pro- perty sold shall be situate, to form part of the Build- ing and Jury Fund of such district or county. 146. The Grovernor in Council shall have all thepovemor m Counci powers with respect to imposing a tax or duty upon have cer- proceedings under this Act, which are conferred powers, upon the Governor in Council by the thirty-second and thirty-thirdHsections of the one hundredth and ninth chapter of the Consolidated Statutes for Lower Canada, and by the Act intituled : An Act to make provisions for the erection or repair of court houses and gaols at certain places in Lower Canada (12 Vict., chap. 112). PROCEDURE IN THE CASE OF INCORPORATED COM- PANIES. I4T. The provisions of this Act shall apply to the Provisions „ . . , . . ,, for Incor- estates oi mcorporated companies, not specially ex- porated cepted in the first section of this Act, subject to the pLiea. following modifications : — ;^i til ; • «• 216 INSOLVENT ACT OF 1875. Preiimin- (1.) No Writ of attachment shall issue against the ary no ice. gg^g^|.g q£ ^j^ incorporated company except upon the order of the judge, and after notice of at least forty- eight hours has been given to such company of the Inquiryby application for such writ. The judge in all cases . ^^^^^^- where proceedings have been adopted under this Act against an incorporated company, may, before granting a writ of attachment, order the Official As- signee to enquire into the affairs of the company, and to report thereon within a period not exceeding ten days from the date of such order : Company (2.) Upon such order it shall be the duty of such to exhibit j p ■ i -i j. j- ■ books, &c. company, and oi the president, directors, managers and employees thereof, and of every other person, having possession or knowledge thereof, to exhibit to the Official Assignee, or to his deputy, the books of account together with all inventories, papers, and vouchers referring to the business of the company, or of any other person ; and generally to give all such information as may be required by the Official Assignee to form a just estimate of the affairs of the Refusal to said company ; and any refusal on the part of the tempt of said president, directors, managers or employees of ^^^' the company to give such information shall, on evi- dence of such refusal be considered as a contempt of an order of the court or judge, and punishable by fine or imprisonment or by both at the discretion of the judge : (3.) From the time the above order is served upon the company, the president, directors, managers and employees thereof, and all other persons having the control or possession of its affairs or property, shall hold the estate and property of the said company upon trust for the creditors of the said company, and After ser- vice of or- der, com- pany to hold pro- perty in trust. I^X'ORPORATED COMPANIES. 217 shall be bound to account for all the property of the said company under the same obligations, liabilities, and responsibilities as trustees appointed by courts of law or equity in the several Provinces, or as guar- dians and sequestrators in the Province of Quebec, are bound : (4.) Upon the report of the Official Assignee or be- Meeting of fore any order is given for the examination into the may be affairs of the company, as herein piovided, the judge may order that a meeting of the creditors be called and held in the manner provided for by this Act for the first meeting of creditors, at which meeting the creditors present, who shall verify their claims un- der oath, may pass such resolutions either for the winding up of the affairs of the company or for al- lowing the business thereof to be carried on as they Resoiu- may deem most advantageous to the creditors; and thereat, may also appoint two inspectors and indicate the mode in which the business of the company should be wound up or should be continued : (5.) The resolutions so adopted shall be submitted To be sub- to the judge at the time and place appointed at the judge. meeting, and at least forty-eight hours' notice shall be given by the Official Assignee to the company of the time and place so fixed : (6.) Thejudge, after hearingsuch creditors as may Powers of be present, the Assignee and the company, may con- n^atim firm, reject, or modify the said resolutions ; and he *'^"'^*"' may order the immediate issue of a writ of attach- ment to attach the estate of the company, or direct that the issue of such writ shall be suspended for a period not exceeding six months — during which period he may order that the Official Assignee or the [^^'^^^ ™ay . , => be matle nispectors (if any have been appointed by the ere- ^y judge. 218 INSOLVENT ACT OF 187-5. 'A, !M Receiver may be ap pointed. To render account. Further meeting within six months. Further delay may be granted Ifde- u^ands are nnP3atisfied u' cate of / Dpany ditors) shall exercise a general supervision over the estate and business of the said company by requir- ing from the president, directors, managers and em- ployees of the company, such periodical accounts and statements, of the businessdone, and of the moneys re- ceived and expended or disbursed since tRe last statement as may be required by the said inspectors or the said Official Assignee to obtain a proper know- ledge ol the affairs of the company : (7.) The judge may also, if he deems it for the ad- vantage of the creditors, appoint a receiver, charged with such duties as to the superintendence or man- agement of the affairs of the company as may be im- posed upon him by the order of the judge ; and who shall also assume and be invested with all the pow- ers vested in the directors and stockholders respect- ing the calling in and collecting of the unpaid stock of the company, and subject to such orders and di- rections as he may, from time to time, receive from the judge: (8.) Such receiver shall account, whenever or- dered by the court or judge, for all moneys or pro- perty he may have received from the estate : (9.) Before thfe expiration of the six months next after such order, the Official Assignee or the receiver, as the case may be, shall cause another meeting of the creditors to be called : (10.) On the resolutions adopted at such meeting the judge may either grant a further delay not ex- ceeding six months, or cause a writ of attachment to issue at the instance of any creditor or creditors. (11.) If, at the expiration of such prolonged delay the demands made upon the company to place it in liquidation have not been satisfied, the judge shall Mi INCORPORATED COMPANIES. 219 order the issue of a writ of attachment; and the may be estate of the said company shall be wound up un- der the provisions of this Act, unless the creditor or creditors entitled to such writ shall consent to a further delay : (12.) Nothing in this section shall prevent theJudgemay judge before the expiration of the delays he may dere.' ^ have granted under the preceding sub-sections, from cancelling the orders so given by him, and from ordering the issue of a writ of attachment or from releasing the company from the effect of any such order, as circumstances may require : (13.) The president, directors, managers or other Officers of officers or employees of the company, and any other may be ex- person, may be examined by the Assignee or by the judge on the affairs of the company, and each of them shall, for refusal to answer questions put in reference to the business within his own cognizance, be liable to the same penalties as ordinary traders refusing to answer questions put under the provi- sions of this Act : (14.) The remuneration of the Official Assignee Remuner- 1 £. , 1 ■ p • I' T T ation of and 01 the receiver lor services periormed under Assignee the preceding sub-sections shall be fixed by thCcriveT judge : (15.) Nothing in the preceding sub-sections shall company prevent the president, directors, managers or em-^f^"gn® ployees of the company, on being duly authorized J^n'jing to that effect, from making an assignment of the*^*^'^*^- estate of such company to an Official Assignee in the form provided for by this Act, before the expir- ation of the delays which may have been granted to such company by the court or judge. This B2ction is new. kS" : » i i f ' j .'*, ^ 220 INSOLVENT ACT OP 1875. The meeting of creditors to be hold under sub-aection 4, is to be called as provided by section 20. Com- mence- ment of foregoing provisions, GENERAL PROVISIONS. 148. The foregoing provisions of this Act shall come into force and take effect upon, from and after the first day of September, in the present year 1875, and not before, except in so far as relates to the ap- pointment of Official Assignees, and the making and framing of rules, orders, and forms, to be followed and observed in proceedings under this Act, with respect to which the said provisions shall be in force from the time of the passing of this Act. Insolvent Acta of 18C4 and 1869 and Acts amending them and Acts of B. C. and P. E. I. con- tinued to 1st Sept. and then repealed ; saving cer- tain pro- ceedings and mat- ters. I4». " The Insolvent Act o/1864," and the Act to amend the same passed by the Parliament of the late Province of Canada, in the twenty -ninth year of Her Majesty's reign, " The Insolvent Act of 1869," the Act amending the same passed in the thirty- third year of Her Majesty's reign, and the Act amending the same passed in the thirty-fourth year of Her Majesty's reign, and the Act passed in the thirty-seventh year of Her Majesty's reign continu- ing the same, the Act passed by the Legislature of Prince Edward Island in the thirty-first year of Her Majesty's reigh, chaptered fifteen, intituled " An Act for the rdief of unfortunate debtors " and the several Acts amending and continuing the same which are in force in the said Province of Prince Edward Island, which are mentioned in and continued by the last mentioned Act passed in the thirty-seventh year of Her Majesty's reign, the Act of the legisla- ture of the Colony of Vancouver Island, passed in m\ I GENERAL PROVISIONS. 221 year 1862, and intituled ''An Act to declare the law relative to Bankruptcy and Insolvency in Vancouver Island and its dependencies," and the Act of the legislature of the Colony of British Columbia, passed in the year 1865, and intituled " An Ordinance to amend the law relative to Bankruptcy and Insolvency m BnYisA Co^i 224 INSULVENT ACT OF 1875. a8 the case may be) in the sum of dollars currency, for {ntdte concisely and clearly the nature of the deht.) * 8. To the best of my knowledge and belief the Defendant is insolvent within the meaning of the Insolvent Act of 1875, and has rendered himself liable to have his estate placed in liquidation under the said Act ; and my reasons for so believing are as follows : {state concisely the facta relied, upon as rendering the debtor insolvent and as subjecting his entate to he 'placed in liquidation) , 4. I do not act in this matter in collusion with the Defendant,nor to procure him any undue advantage against his Creditors. And I have signed ; (or I declare that I cannot sign.) Sworn before me this day of 187 . and if the deponent cannot sign, add: — the foregoing affidavit having been lirst read over by me to the deponent.^ Canada, Province of District of No. ' FORM C. Insolvent Act of 1875. 1 VICTORIA,by the Grace of God.of the >■ United Kingdom of Great Britain and ) Ireland, Queen, Defender of the Faith. To the Official Assignee of the County (or Judical District or Electoral District a^s the case may be) of Greeting : We command you, at the instance of FORMfl. 225 to attach the estate and effects, moneys and securities, or money, vouchers, and all the office and business papers and documents of every kind and nature whatsoever, of and belonging to if the same shall be found in (name of district or other territorial jurisdiction) and the same so attached, safely to hold, keep and detain in your charge and custody until the attachment thereof, which shall be so made under and by virtue of this Writ shall be determined in due course of law. We command you also to summon the said to be and appear before Us, in our Court for at in the County (or District) of on the day of to show cause, if any he hath, why his estate should not be placed in liquidation under the Insolvent Act of 1875, and further to do and receive what, in Our said Court before Us, in this behalf shall be considered ; and in what manner you shall have executed this Writ, then and there certify unto Us with your doings thereon, and every of them, and have you then and there also this Writ, In Witness Whereof, We have caused the Seal of our said Court to be hereunto affixed, at aforesaid, . , this day of in the year of Our Lord, one thousand eight hundred and seventy- , year oi Our Reign. FORM D. Insolvent Act of 1875. A. B., C. D, U Plaintiff. Defendant. iki 226 INSOLVENT ACT OP 1876. Ml A Writ of attachment has issued in this cause, {Phce date.) {Signature,) Official Assignee. j«^ . 1 r ni FORM E. Insolvent Act of 1875. This assignment made between first part, and witnesses, of the of the second part, (or) On this day of before th^ undersigned notaries came and appeared of the first part, and of the second part, which said parties declared to us nota- ries : — That imder the provisions of " The Insolvent Act of 1875", the said party of the first part, being insolvent, has assigned and hereby does assign to the said party of the second part, accepting thereof as Assignee under the said Act, and for the purposes therein provided, all his estate and efiects, real and personal, of every nature and kind whatsoever. To have and to hold to the party of the second part as Assignee for the purposes and under the Act aforesaid. In witness, whereof, &c. (or) Done and passed, &:c. FORMS. 227 FORM F. Insolvent Act of 1875, In the matter of A. B. an Insolvent. Schedule of Creditors. ill - 1. Direct Liabilities. Total. Name. Residence. Nature of Debt. Amount. 2. Indirect liabilities, maturing before the day fixed for the first meeting of creditors. Name. Residence. Nature of Debt. Amount. 3. Indirect liabilities, maturing after the day- fixed for the first meeting of creditors. Name. Residence. Nature of Debt. Amount. 4. Negotiable paper, the holders of which are unknown. Date. ^ fame of Maker. Names hable to Insolvent. When due. Amount. i 228 INSOLVENT ACT OP 1875. ^ FORM Gt. Insolvent Act of 1875. In the matter of an Insolvent The Insolvent has made an assignment of his estate to me, {or, a v\rrit of attachment has been issued in this cause) and the creditors are notified to meet at in on the day of at o'clock to receive statements of his af[airs,and to appoint an Assignee if they see fit. (Date In the matter of A. B. {or District {or County of) A. B. & Co.,) an Insolvent, The undersigned has filed in the office of this Court, a consent by his Creditors to his discharge {or a deed of com- position and discharge executed by his Creditors) and on the day of next, he will apply to the said Court {or to the Judge of the said Court, as the case may be) for a confirmation of the discharge thereby effected. {Place, date.) {Signature of Insolvent, or of his Attorney ad litem.) i WPP 1 f: 1 i r / .( 1 i (■ ■'' \ * ■ 230 INSOLVENT ACT OF 1875. FOKM K. Insolvent Act of 1875. In the matter of A B., An Insolvent. I, A. B., of an Insolvent, now making application to the for a confirmation of my discharge {or of my deed of composition and discharge) being duly sworn, depose and say : That no one of my Creditors who have signed the said discharge (or the said deed of composition and discharge) has been induced so to do by any payment, promise of pay- ment, or advantage whatsoever, made, secured, or promised to him by me or, with my knowledge, by any person on my behalf. And I have signed. Sworn before me at this day of 187 } FORM L. Insolvent Act of 1875, Canada, ) In the {name of Court) Province of > In the matter of A. B. (or A. B. & Co) District (or County) of) An Insolvent. On the day of next, the^indersigned will apply to the said Court {or the Judge of the said Court, as the case may be,) for a discharge under the said Act. {Place date.) {Signature of the Insolvent, or o/ his Attorney ad litem.) FORM M. Insolvent Act of 1875. In the matter of A B,, An Insolvent. In consideration of the sum of $ whereof quit ; FORMS. 231 C. D., Assignee of the insolvent, in that capacity hereby sells and assigns to E. F. accepting thereof all claim by the insolvent against Gr. H. of {describing the debtor) with the evidences of debt and securities thereto appertaining, but without any warranty of any kind or nature whatsoever. C. D. • E. F. Assignee. 'n FORM N. This deed, made under the provisions of the Insolvent Act of 1875, the day of &c., between A. B. of &c., in his capacity of Assignee of the estate and effects of , an insolvent, under a deed of assignment executed on the day of at in and of a release made and executed on the day of , in {or under an order of the Judge made at on the day of ) of the one part, and C. D., of &c., of the other part, witnesseth : That he, the said A. B., in his said capacity, hath caused the sale of the real estate here- inafter mentioned, to be advertised as required by law, and hath adjudged (or and hath offered for sale pursuant to such advertisement, but the bidding therefor being insufficient did withdraw the same from such sale, and hath since by authority of the creditors agreed to sell) and doth hereby grant, bargain, sell and confirm the same, to wit : unto the said CD., his heirs and assigns for ever, all {in OntaHo, Nova Scotia arid Neiu Brunsivick, Manitoba and Brititih Col- umbia, insert " the rights and interests of the insolvent in ") that certain lot of land, &c., {insert here a description of the 'property sold) : To have and to hold the same, with the appurtenances thereof, unto the said C. D., his heirs and i i '■"if 1 -i ■ ^ 1 232 INSOLVENT ACT OF 1876. assigns for ever. The said sale is so made for and in con- sideration of the sum of $ in hand paid by the said C. D. to the said A. B., the receipt whereof is here- by acknowledged {or of which the said CD. hath paid to the said A. B.) the sum of the receipt whereof is hereby acknowledged, and the balance, or sum of % the said C. D. hereby promises to pay to the said A. B., in his said capacity, as follows, to wit : — (here ato .e the terms of payment) — the whole with interest payable and as security for the payments so to be made, the said C. D. hereby specially mortgages and hy- pothecates *o and in favour of the said A. B., in his said capar , , llif lot of land and premises hereby sold.) In witiesb, v-^^c. A. B. [L. S.] CD. [L.S.] Signed, sv^^^aleu rnd uoi'vered in the presence ex E.F. [This form shall be adopted in the Province oj Quebec to the notarial form of execution of documents prevailing there.) FORM O. Insolvent Act of. 1875. In the matter of A. B. {or A. B. & Co.,) An Insolvent. A dividend sheet has been prepared, open to objection until the day of , after which dividend will be paid. (Place, date.) Signature of Assignee. FORMS. 233 FORM 1. See Sec. 4. Insolvent Act of 1875. In the County Court of the County of A. B., {name, residence^ and desoHption) Plaintiff vs. E. F., {name, residence and description,) Defendant. I, A. B. {name, residence and des- cHption), being duly sworn depose and say : ' 1. That I am the plaintiff {or the duly authorized agent of the plaintiff in this behalf, and have a personal knowledge of the matter hereinafter deposed to, or a member of the firm of plaintiffs in this matter, and the said firm is composed of myself and E. F.) 2. That the defendant is indebted to me {or to the plain- tiff as the case may be) in the sum of $ for {state concisely and clearly the nature of the debt.) 3. I do not act in this matter in collusion with the defen- dant nor to procure him any undue advantage against his creditors. And I have signed {or declared I cannot sign). Sworn before me at the ^ of in the County of this day of A.D. 187 and if the deponent cannot sign, add : — '' the affidavit having been first read and explained to the said A. B., who seemed perfectly to understand the same, and made his mark in my presence." - } \ FORM 2. See Sec. 4. Insolvent Act of 1875. To {name, residence and description of Insolvent), you are hereby to vdt by A. B., a Creditor for the sum of $ {describe in a customary manner the nature of the debt), and by 16 !* , 234 INSOLVENT ACT OF 1875. C. D., a Creditor, &c., to make an assignment of your estate and effects under the above-mentioned Act, for the benefit of your Creditors and we {the said A. B. and C. B.), hereby elect and appoint the office of in the of in the County of at which service of any answer, notice or proceeding may be served on us or on the said Gt. H., or any of his partners or clerks for us. FORM 3. See Sec. 29. Know all men by these presents that we A. B., of &c.. C. J)., of &c., and E. F., of &c., are jointly and severally held and ffrmly bound to Her Majesty, Queen Victoria, in the sum of $ ^to be paid to Her said Majesty, Her successors or assigns, for which payment to be made we bind ourselves each and every of us in the whole, our and each of our heirs, executors and administrators jointly and severally firmly by these presents. Sealed with our seals and dated this day of one thousand eight hundred and Whereas on the day of one thousand eight hundred and G. H., of &c., made an assignment of his estate and effects under the Insolvent Act of 1875, to I. J., of &c. And whereas at the first meeting of the creditors of the said Insolvent under the said Act, the said A. B. was appointed assignee of the said Insolvent, under the said Act. And whereas it was resolved that the said assignee should give security by bond to Her said Majesty the Queen in the sum of $ with two sufficient sureties thereto : Now Iherefore the condition of this obligation is such that if the said A. B. shall and do from time to time well and sufficiently perform and execute all and singular the duties required of him as assignee as aforesaid or any rule of FORMS. 235 H., or Court made or^hereafter to be made under the said Act, this obligation shall be void, otherwise to remain in full force and virtue. A. B. • • C. D. E. F. Signed, sealed and delivered in the presence of ' [L. S.] [L. S.] [L. S.] day of FORM 4. See Sec. 49. Insolvent Act of 1875. This Indenture, made the one thousand eight hundred and seventy Between (hereinafter called the Insolvent) of the first part And the several persons, firms and corporations who are Creditors of the said Insolvent (hereinafter called the Creditors) of the part Whereas the said Insolvent ha become mvolved and unable to pay liabilities in full find Creditors have agreed with for a composition and discharge in the manner hereinafter set out. And w^hereas the said Insol- vent ha agreed to secure the composition payments hereinafter mentioned by Now therefore this Indenture witnesseth that in consider- ation of indebtedness and of the discharge hereby given, the said Insolvent covenant and agree with all Creditors collectively and severally, that will pay to them and to each of them respectively a composition of cents in the dollar of their respective, claims against in manner and at the times following namely : And that will give to each of them promissory notes for such composition pay- ments bearing date the day of and payable at the said several dates respectively w \i 286 INSOLVENT ACT 0F'1875. M^ m 1 *y And in consideration of the said composition payments so to be made and of the said security so to be given the said Creditors do and each of them doth release and discharge unto the said Insolvent all their respective claims against (saving and "reserving the rights which any of them may have against any other person or in respect of any security held by them or any of them). And they do hereby direct and authorise the Official Assignee or any Assignee of the estate and effects of the said Insolvent who may at any time be appointed to deliver up and convey to the said Insolvent all estate and effects upon this deed of com- position and discharge being executed by a majority in number and value of the Creditors sufficient to procure the due confirmation thereof. And it is declared and agreed that this Deed of Com- position and Discharge is made in pursuance of the Insolvent Act of 1875 and may be confirmed in pursuance of the provisions thereof And also that the same shall be ineffectual unless and until the same shall be executed by such a majority in number and value of the said Creditors as shall be sufficient to procure the due confirmation thereof. In Witness Whereof, the said parties have hereunto set their hands and seals. Signed, sealed and delivered by each party hereto, in the presence of the witness whose name is set opposite f to each signature respectively. J Insolvent Act of 1875. In the matter of An Insolvent, !, of the of make oath and say that I was personally present, and saw ■(• ■ ■J |.s.: i I'j- 1 ■ FORMS. 237 the hereunto annexed Deed of Composition and Discharge duly executed, si^ed, sealed and delivered by at 2. That I am a subscribing witness to such execution thereof. • Sworn before me at the of day of in the County 1 this AD. 187 A Comn'hmoner, &c. FORM 4a See Sec. 49. Insolvent Act of 1875. In the matter of A. B. an Insolvent. Upon application of the above-named Insolvent, and upon reading < he petition presented by him lor the confirmation of the discharge effected in his favour by a certain Deed of Composition and Discharge, executed und<;r the provisions of the Insolvent Act, and filed in this Honorable Court, and the several affidavits and papers filed in support thereof and it appearing that on the day of 187 , the said Insolvent made an assignment of his estate and effects under the provisions of the said Act, and that on or about the day of A.D. 187 the said Insolvent procured the execution of a Deed of Com- position and Discharge by a majority in number of those of his creditors, who are respectively creditors for the sum of $100 00 and upwards, and who represented at least three- fourths in value of his liabilities, and it also appearing that due notice had been given of the application for the con- firmation of the discharge thereby effected in his favour in accordance with the provisions of the said Act, and upon hearing the said Insolvent by his attorney and no cause 238 INSOLVENT ACT OF 1875. U>^ m \ ' \ * being shewn to the contrary, and it appearing to me to be expedient to grant the prayer of the said Petitioner : — I do order that the discharge effected by the said deed be and the same is absolutely confirmed and I do further order that the above-named Insolvent be absolutely dis- charged of and from all debts and claims existing, due or becoming due by him at the date of the said assignment and provable against his estate, and I do hereby by virtue of the power vested in me by the said Act, absolutely dis- charge and declare him to be absolutely discharged therefrom. In witness whereof I have hereunto set my hand and caused the seal of the said Court to be affixed, this day of A.D. 187 ^Signed) (Seal of Court) Judge of the County Court of in the County of FORM No. 5. See Sec. 64. Insolvent Act of 1875. Dominion of Canada, \ j .. ^ * r. . p .u ■n . n I In the County Court oi the Provmce oi > ^ , ^ r^ . r ( Countv 01 County of J ' In the matter of A. B. an Insolvent. To his Honor, The Judge of the The Petition of A. B., of &c., the above-named Insolvent sheweth, as follows : — 1. That your Petitioner was a trader within the mean- ing of the said Act, doing business in the said 2. That your Petitioner the said Insolvent being unable to meet his engagements as such trader as aforesaid, on the day of made an assignment under the above-mentioned Act, of all his estate and effects FORMS. 2.SJ) e mean- to C. D., of &c., official assignee, resident in and duly appointed in that behalf for the said County, who duly accepted and acted under the said assignment. .S. That at the meeting of the Creditors of your Petitioner, the said Insolvent, duly called pursuant to the said Act, and held at on the day of B. F., of &c., was duly appointed, pursuant to the said Act, assignee to my said estate, and duly accepted the same. 4. That a duplicate of the said assignment with a list of the Creditors of your Petitioner thereto annexed, was {tiled and deposited in the otfice of the Clerk of this Honorable Court, at on in which said Court all proceedings in the matter of your Petitioner's Insolvency have been carried on. 5. That the deed of transfer from t} - said C. D. to the said E. F. was filed and deposited in the said office on 6. That more than a year has elapsed since your Petitioner made the assignment as aforesaid, ud he has not obtained from the required proportion of his (Creditors a consent to his discharge or the execution of a deed of composition and discharge. 7. That due notice of your Petitioner's intention to apply to the||Judge of this Honorable Court for a discharge has been given as your Petitioner verily believes. 8. That your Petitioner at the time of making the said assignment was, and still is, and constantly has been since the making of the said assignment a J resident of and domiciled within the said County of 9. That your Petitioner has in all things conformed himself to the requirements of the said Act, and is not aware of any reason cgainst or obstacle to his obtaining a discharge thereunder. Your Petitioner therefore prays : — 1. That your Honor may grant him an absolute ;i ^ 240 INSOLVENT ACT OF 1875. discharge of and from all debts or claims existing, due or accruing due by him at the date of the said assignment and proveable against his estate, and that such other order may be granted as to your Honor may seem meet. ■;f " m. \''^> FORM No. 6. See Sec. 6. Insolvent Act of 1875. Dominion of Canada. Province of County of To Wit. In the matter of In the County Court of A.B. Court of the An Insolvent. Upon the application of A. B. (residence and occupation) the above-named Insolvent, and upon reading the assign- ment made by him under the said Act on the day of one thousand eight hundred and seventy to C. D., of the said County, an Official Assignee of the said County, the list of creditors annexed to said assignment and therewith deposited in the office of the said Court on the day of one thousand eight hundred and the deed of transfer from the said C. D. to E, F., of {residence and occupation) as Assignee appointed at a meeting of creditors of the said Insolvent for that purpose, held at the office of the said C. D., in the said ^ on the day of one thousand eight hundred and bearing date the day of one thousand eight hundred and and filed in the office of the Honorable Court on the I. FORMS. 241 day of following. And upon reading the petition of the said Insolvent, presented to me in pursuance of the said Act, on the day of instant, praying for a discharge under the said Act and a certificate from the said E. F. to the effect that there is no objection within his know- ledge to the granting of such discharge, and upon reading the other affidavits and papers filed herein and upon hear- ing the said Insolvent by his Attorney, and no cause being shewn to the contrary and it appearing expedient to me to grant the prayer of such petition : I do order that the above-named Insolvent be absolutely discharged of and from all debts and clainin existing, due or becoming due by him at the date of the said assignment and provable against his estate and for which a discharge can be granted by me, and I do hereby by virtue of the power vested in me by the said Act absolutely discharge and declare him to be absolutely discharged therefrom [and I do hereby order the suspension of the operation of this discharge for years] (or I do hereby declare this discharge to be of the second class as provided by the said Act). In Witness whereof I have hereunto set my hand and caused the seal of the said Court to be affixed this day of one thousand eight hundred and • Signed. (Seal of Court) Judge. ADDENDA ET ERRATA. Page 37. — Add to notes to sect. 1 : — A married woman was sued at law under 33 & 34 Vic. , cap. 93, sect. 1 2 (Imp. Act), by a creditor for a debt contracted by her before her marriage, which took place in 1872, and a judgment was obtained against her. The creditor then sued out a debtor's summons, and, the debt not being satisfied, filed a petition for adjudication of bankruptcy against her. She had no separate property — Held, that the married woman could not be adjudicated a bankrupt. Per Mellish, L. J. : — Whether a married woman can be made a bank- rupt if she has separate property — QxuKre, — Ex parte Hollaivd ; In re Hen- eage, L. R. 9 Ch., Ap. 307. Page 94. — Add to notes to sect. 49. It is competent to a non-assenting creditor under s. 126, of the English Bankrupt Act, 1869 (duly registered under s. 127), to sue for his original debt, where the debtor has failed to pay or tender the composition within the time agreed, or within a reasonable time. — Edwards v. Coombe, L. R, 7 C. P. 519.) A judgment having been recovered against the defendant for a sum of money andremaluing unsatisfied, the plaintiff applied to a judge at Cham- bers to commit th^ defendant to prison under the 6th section of the Debtors' Act, 1869. The judge made an order for the payment of the debt by monthly instalmeuts. After three of such instalments had been paid, proceedings were taken by the defendant for the purpose of making a composition with his creditors under the 12Cth section of the Bankruptcy Act, 1869 ; and a resolution of *he creditoira was duly passed accepting a composition upon the defendant's debts, payable by two instalments. Default was made in the payment of the first instalment of the composi- tion to the plaintiff, and instalments under the judge's order having by that time become due and not having been paid, the plaintiff applied again at Chambers for the committal of the defendant to prison for non-com- pliance with the judge's order : — Held, that the effect of the default in payment of the composition was to remit the plaintiff to the position he • i m 244 INSOLVENT ACT OF 1875. occupied before the proceedings in respect of the composition took place, and that consequently, the order might be made for the defendant's committal to prison for non-compliance with the judge's order. — Edwards V. Coombe, Law Rep., 7 C. P. 519 ; and Slater v. Jones, Law Rep. 8 Ex. 186, discussed. Neioell V. Van Praagh, L, R. 9 C. P., 96. And see In Re Rattan, L. R,, 7 Ch. 723. PcKje 105. — line 10 from bottom, for " were'' read " was" and line 15 from bottom for " were'' read " wan" Page 204.— Add to notes to sect. 133 : The protection given by the 92nd section of the Bankruptcy Act, 1869, (English Act) in cases of fraudulent preference to a purchaser, payee, or incumbrancer in good faith and for valuable consideration, extends to the creditor who is so preferred as well as to those claiming under him. If, therefore, a creditor for valuable consideration has no notice or sus- picion that his debtor is in insolvent circumstances when the payment or transfer by way of fraudulent preference is made to him, he is protected. Ex parte Butcher ; In, re Meldrum, L. R. 9 Ch. Ap. 595. ^ .- lit' ■!■■ ■] I t. I* ■1 " a.' TARIFF OF FEES. (OF DECEMBER, 1864.) For Insolvency proceedings in Ontario, promulgated by the Judges of the Superior Courts of Common Imiv, and of the Court of Chancery, under 27 and 28 Victoria, c. 17. TARIFF. Fees to solicitor or attorney, as between 'party and party, and also as between solicitor and client : — Instructions for voluntary assignment by debtor, or for com- pulsory liquidation, or for petition, where the statute expressly requires a petition, or for brief, where matter is required to be argued by counsel, or is authorized by the judge to be argued by counsel, or for deeds, declarations, or proceedings on appeal $2 00 Drawing and engrossing petitions, deeds, affidavits, notices, advertisements, declarations, and all other necessary documeuu^ or papers when not otherwise expressly provided for, per folio of 100 words or under 20 Making other copies when required, per folio 10 When more than five copies are required of any notice or other paper, five only to be charged for, unless the notice or paper is printed, and in that case printer's bill to be allowed in lieu of copies, drawing schedule, list, or notice of liabilities, per folio, when the number of creditors therein does not exceed twenty 20 When the number of creditors therein exceeds twenty, then for every folio of 100 words over twenty 10 Every common affidavit of service of papers, including attendance 50 Every common attendance 50 Every special attendance on judge 2 00 For every hour after the first 1 00 To be increased by the judge in his discretion. m mi \V W I'd : 246 INSOLVENT ACT OF 1875. < I 00 00 00 25 10 00 1 00 50 Every special attendance at meetings of creditors, or before assignee, acting as arbitrator ^l GO Fee on writ of attachment against estate and effects of insolvent, * including attendance 2 Foes on rule of Court or order of judge 1 Fee on sub. ad test, including attendances 1 Fee on sub. duces tecum, including attendance 1 And, if above 4 folios, then for each additional folio, over such 4 folios Fee on every other writ 1 Every necessary letter 50 Cost of preparing claims of creditor, and procuring same to be sworn to, and allowed at meeting of creditors, in ordinary cases, where no dispute Costs of solicitor of petitioning creditor, for examining claims filed up to appointment of assignee, for each claim so examined Cost of assignee's solicitor for examining each claim required by assignee to be examined 50 Preparing for publication advertisements required by the statute, including copies and all attendances in relation thereto I 00 Preparing, engrossing, and procuring execution of bonds or other instruments of security 2 00 Mileage for the distance actually and necessarily travelled — per mile ... 10 Bill of Costs, engrossing, including copy for taxation, per folio. . 20 Copy for the opposite party 50 Taxation of Costs 50 No allowance to be made for unnecessary documents or papers, or for unnecessary matter in necessary documents or papers, or for unnecessary length of proceedings of any kind. In- case of any proceedings not provided for by this tariff, the charges to be the same, as for like proceedings, in the tt-riffs of the Superior Courts. COUNSEL. Fee on arguments, examinations, and advising proceedings, to be allowed and fixed by the judge as shall appear to him proper under the oiroumstaDoes of the case. TARIFF OF FEES. 24r FEE FUND. Every warrant issued against estate and effects of insolvent debtors $1 00 Every other warrant or writ 30 Every summary rule, order or fiat 39 Every meeting of creditors before judge 50 If more than an hour 1 00 If more than one on same day, $2, to be apportioned amongst all. Every affidavit administered before judge 20 Every certificate of proceedings by judge of County Court for transmission to a Superior Court or a judge thereof 50 Every bankrupt's certificate 1 00 Every taxation of costs 15 FEES TO CLERK. Every Writ, or Rule, or Order Filing every affidavit or proceeding Swearing affidavit Copies of all proceedings of which copy bespoken or required, per folio of 100 words Every certificate Taxing costs Taxing costs and giving allocatur For every sitting under commission, per day If more than one on same day, $2, to be apportioned amongst all. Fee for keeping record of proceedings in each case For any list of debtors proved at first meet'ng, (if made) For any list of debtors at second meeting Any search ,. A general search relating to one bankruptcy, or the bankruptcy of one person or firm SHERIFF. Same as on corresponding proceedings in Superior Courts. WITNESSES. Same as in Superior Courts. 50 10 20 10 30 50 65 1 00 1 00 50 50 20 •'>(} r^ h' 1 GENERAL INDEX. Absconding — Debtor commits an act of bankruptcy, 40. Defendant, service of writ upon, 53. Account— Party liable to cannot be assignee, 7.3. Assignee to account for and divide interest upon bank deposits, 80. How foiupnlled to account, 86. Fiiial, to be prepared by assimec. (See Final Account), 87. Statements of, lo be prepared periodically, 129. Books of. (See Book). Bank. (See Bank), Act of 1875— Application of, 33, 222. Who are traders under, 33. Title of, 222 When to take effect, 220. Act of Bankruptov- What constitutes, 40. What are continuous acts, 50. Proceedings for compulsory liquidation must commence within three months from, 50. Act respecting Larceny, 208-9. Acts hereby repealed, 220. When to cease to operate, 220. Additional Security may be demanded from official assignee by creditors, 70. Administrator as to trust funds not affected by discharge under Act, 113. Not liable to compulsory liquidation, 35. Advances in money procuring with intent to defraud, 206. Advertisement- Meeting of creditors called by. (See Forms, Meeting, Notice), 66. Of notice of issue of writ of attachment, 54. By official assignee on attachment, 54. Assignee tc rive notice of his appointment by, 74. Of sale by asbignee of, 117. Of sale of real estate, 123. To describe property fully, 78. Time prescnbea for, li:v4. Of completion of dividend sheet, 153. Of apphcation to .Judge for confirmation of discharge, 97. Of meeting of creditors to consider composition and discharge to be published, 94. In what papers publislied, 162. Of petition Dv insolvent for balance, 161. Of sale of debts of insolvent, 117. Affidavit — To be made before serving demand to assign, 46. With whom to be filed, 46. Certified copy of, to be annexed to demand to assign, 46. Who may make, 47. Proving claim, 164. FormTAppendix " P."), 233. To be produced by insolvent on application for confirmation of dis- onarge, 98. Form (Appendix " K."), 230. What to contain, 98. 17 ■V ■i mi lit. HI "in i ' 4 , 250 INSOLVENT ACT OF 1875. Ajfidavit— {Continued. ) In inaolvency, before whom sworn, 184. Who may make, 164. AOKNT— Of creditor, how appointed. 72. Aaaignee cannot act as. 74. Except by authority of the Judge, 76. ABsiffnee, Ac, agent for certain purposes, 208. AfBoavit may be made by, 130, 164. Allowanob — To insolvent for attending meeting of creditors, 69. To insolvent, how made, 151. To be inserted in dividend sheet, 151. Subject to contestation, 151. Amendmbnt— Of pleadings, 174. Amount — For which a creditor holding security shall rank, 137. ANawBR — To demand to assign, how served, 46, 47. Apfhal — From order of Judge. (See Judge, Application), 186. Costs of, where appellant does not proceed, 186. Conditions of, 186. Appellant — Not prosecuting appeal liable for costs, 186. Dying, 188. Application- -On objection to disposal of estate to be made to C. C Judge, 8. To Judge to confirm discharge, 97. By insolvent for discharge, 114. itow made, 114. For appeal from Judge, 186. Notice of, to be served, 187. By assignee for recovery of effects retained by insolvent, 214. Of Act. 222. Appointment -Of ofiRcial assignee, 69. Of assignee, 71. Effect of omission in proceedings prior to, 72. Effect of neglect or irregularity in, 72. Assignee to give notice of, 74, Record of, 71. Of agent for creditor, how made, 72. Of inspector to estate of insolvent, 75. Arbitration— In case of contingent claims, 135. Arrears— Of salary. (See Salary). Of rent. (See Rent). Arrest. (See Imprisonment). Under judgment summons, 98. Malicious, discharge not to affect damages for, 113, Subsequent to disciiarge from imprisonment, 184. Assault — Discharge not to affect damages for, 113. Assets— Vest in assignee, 57. Statement of to be prepared, 63. Chargeable with mortgages, 175. AssiONEE. (See Official Assignee). Definition of, 37. What property vests in assignee under assignment, 57, et teq. *To be appointed by creditors, 71. •May examine insolvent on oath, 68. Official assignee to be assignee when no other appointed, 71. *May apply for examination of other parties, 68. To give security, 71. May be removed, 71. Copy of resolution appointing to be filed, 71. Creditors of individual partners may vote for, 72. Effect of omission of proceedings prior to appointment of, 72. " neglect or irregularity in proceedings prior to appointment of, 72 Principles which govern. Becoming insolvent, 73. Purchasing estate of bankrupt, 73. May be made to change solicitor, 73, (See Removal), 72, 73. OENBJUL INDEX. 251 , 8. ointment AaaioVKB— {Continued. ) TranHfur of estate to by official aasiguee, 74. To give notice of apiM)iiitinent, 74. Not to act as agent of crcUtors, except by authority of Judge, 75. Supervision of by inspector, 75. May di8|M)8e of estate of insolvent, 76. Powers of insolvent to vest in, 78. To wind up estate of insolvent, 78. To be directed by creditors, 78. May sell estate en bloc, 78. To bring actions to rescind agreements made fraudulently, 79. To sue in his own name, 70. To bring actions to protect estate and to protect the creditors, 71). May represent insolvent in all suits pending at time of his apiwint- ment, 79. Declining to prosecute suit, 80. May be sued for dividend on claim objected to, 80. Goods may be replevied from, 80. Of a member of a copartnership, 82. Of insolvent partner to be tenant in common with solvent partner, 82. To keep register, 83. To open separate account with each estate, 8.J. Non-official to deposit register in office of official assignee, 83. Must pay over balance to Receiver-General after discnarge, 84. Remuneration of, 84. As to employing Counsel, 85. To call meetmg of creditors, 85. When required to do so by inspector, 85. Or by five creditors, 85. Or by a Judge, 85, To deposit moneys of estate in Bank, 86. In whose name, 86. How to be withdrawn, 86. Omitting to account for interest, 86. To produce Bank pass-book at meeting of creditors, 86. When ordered by Judge, 87. Making false entry in pass-book, 87. Death of, 87. How estate shall vest after, 87. To prepare final account, 87. Proceedings by for final account and discharge, 87. To petition Judge for discharge, 87. To give notice of petition to insolvent, 88. " " inspector, 88. " or creditors, 88. To produce and file Bank certificate of deposits, 88. To prepare statements, 88. Accounts of to be audited, 88. Penalty for neglect to petition for discharge, 88. When to apply for discharge, 89. To call meeting to consider composition and discharge, 89. Need not be party to deed of " " 91. Proceedings by after insolvent has obtainetl assent to discharge, 95; To annex certificate to deed of composition, 95. What to contain, 95. To annex further certificate, 06. What to contain, 96. To forward deed and certificates to Clerk of the Court or protbo- notary, 96. To resume possession of estate if conditions of deed of composition not fulfilled, 107. To re-convey estate to insolvent on execution of deed of composition, 108. Money held by insolvent as, not a£Fected by discharge, 113. May oppose aischarge, 115. Report of on application for discharge, 116. w 252 INSOLVENT ACT OF 18 i 6. >li m i Abbionee- (Continued.) What to coiitiin, 116. May sell debtfl at public auction , 117. To keep list of debts ojien to public inspection, 117, Refusing to take certain proceedings, 117. To deliver bill of sale of insolvent's debts to purchaser. (See Pur- chaser), 118. Proof of signature unnecessary, 118. May sell real estate, 123. To advertise sale of real estate, 123. May adjourn sale, 123. May grant terms of credit, 12ft. May o))tain an order for re-sale, 12(i. Sale of immovables in Quebec by, 126. Entitled to receive security for unpaid purchase money, 125. Commission of, on sale of real estate, 127. To keep accessible to creilitors accounts and statements of his doings, Ac, 120. When to i)repare dividends, I'M. May prove for debt due insolvent, l.'iO. Duties of in case of creditor holding security, i;}7, 140. May require an assignment of property from creditors, HO. May comment to retention of property b. creditors, 140. May refjuire from creditors supplementai-y oath, 148. Cannot compel solvent partner to deliver up books of business, 1.51. Has no right to interfere in winding up partnership business, 1.51. Of a co-partnership, duties and powers of, 150. To reserve dividends for persons not filing claims, 154. To transmit o))iection relating to clainiH to Clerk of Court, 1.56. May obtain order to receive insolvent's letters, 176. To be subject to summary jurisdiction, 180. May be compelled to perform his duties, 180. , Remedies a''ainst, 180. To reserve dividends in case of appeal, 189. May recover projierty improperly transferred by debtor, 197. " money jMiid witnin thirty days of insolvency, 204, C' " money paid within thirty days after issue of attach* ment, 201. An agent, 208. Indictment against, 208. Punishment of for wilfully misstating, 210. I»Iay recover penalty against creditor, 213. To distribute amount of same among creditoi-s, 213. Application by for effects retained by insolvent, 214. To retain percentage foi Building and Jury Fund, 215. Assignment- Of projierty by debtor with intent to defraud, 41. 'lo any cue in trust for creditors, 42, 45, Otherwise than in accordance with Act, 44. When void. 44. Of stock in trade ny way of mortgage an act of bankruptcy, 45t When creditors may demand, 45. Time for making may be enlarged, 49. . Deed of. (See Deed of Assigi^ment). May be set aside, 56. Notice of ^tition to set aside to be given, .56. To non-resident official assignee, 57. What property vests in assignee under, 57, 59. By creditors to assignee of property held as security, 140. Attachment— Writ of, 51. How obtained, 51, To whom to be directed, 51. Form of. (Appendix G.), 224- Concurrent may be issued. (See Concurrent). Procedure under, 61. Action for malicious issue of, 52. GENERAL INDEX. 253 (See Pur- is dniiigfi, 151. 51. F attach* Attaohmbnt— (Cond'n ued. ) Service of, 53. When and how returnable, 54. Notice of issue of to be given, 54, 216. May be set aside, 56, 64. Notice of iMitilion to set aside must be given, 56, What property vests in assignee under, 57, 58, Registration of copy of, 65. In Province of (Quebec, 65, Payment made uftor. 205. Against incor|x>rated compani'^s, 217. Judge may onler issue of, 217. ACCTION— Debts may be sold at. (See Hale), 117. Audits — Accounts of assignee to be audited, 88. Award— In case of contingent claims, 1H5. How may be regulated, 135. Damages claimed by lessor, 121. May be appealed from. (See .Judge, Assignee, Appeal), 121. Balanok — Assignee to pay over to Receiver-General, 84, Remaining, after payment of debts, jjayable to insnlvent, 161. A.sdignee to file certificate of on petition for discharge, 88. Bank— Moneys to be deposited in, 86. Pass-book to be produced by assignee at each meeting. 86. Account, in what names kept, 86. Certificate as to balance in hands of assignee, 88. Bankeb ■ - When liable to bankruptcy, 'M. Bankrupt. (See Insolvent). What property of, vests in assignee, 38, 57, 58, 5'J. Mortgagor, not a necessary i)arty to suit against assignee, 80. Even when fraud alleged, 80. Bequest to baiJ Consisting of several items, 148. No claim to be ranked upon more than once, 148. Against a member of a copartnership, 149. ^ To be examined by assignee and inspector, 154. Contestation of, 154. Objections to, how determined, 165. When interest allowed on, 161. Proof of, 164. Form and attestation of. (See Affidavit, Apiiendix " P."), 233. What may be set oflF, 166. What rank on the estate. (See Debts). Claimant. (See Creditor). AVhose claim objected, to have three days notice, 155. Clasbification of discharges, 105, 115. Clerk— Copy of resolutions appointing assignee filed with, 71. Certificate to be filed with, 96, Clerks have special lien for arrears of salary, 152. May be employed by assignee, 162. Code of » rocedure to apply in Province of Quebec, 127. Collateral Security not affected by discharge without consent of creditors, 112. Creditors holding may prove for, 132. Collocated— ISIeaning of, 39. Collocation of moneys arising from sale, 127- For examination of witnesses, 168. Commission of assignee on sale of real estate, 12)'-8. Assignee to be paid by, 85. Commissioner may take certain affidavits, 164. Common I^aw Lien— Definition of, 143. Companies Incorporated- Meaning of words he, hun, or his used in relation to, 40. \ Act to amily to (See Incorixirate*!), 215. Notice of issue of attachment to Im3 given to, 216. Judge may order assignee to inriuire into affairs of, 216. Officeni of, to exhibit inxiks to assignee, 216. Officeni to give all re(|uisite information to official assignee, 216. Refusal by officers to furnish information to assignee, 216. Officers to be trustees, 217. Judge may order meeting of creditors of, 217. Company Unincorporated- Joint stock effect of bankiupte,y of a shareholder, 82 Composition- Pn>ceeding8 on offer of, 89. Must be houa Jide, 8!). Agreement to accept, not to release debt until comiMtdtion paid, 133. Failure of debtor to pay, revives original debt, 13.'). How crtditore to rank for, I'M, And discharge deed of, must jirovide for all creditors, 90. Conditions of, 90, 106. Creditors need not prove claims to execute, 91. Ataigneti not to be party to, 91. Not made under Act, no bar to non-assenting creditors, 92. _J^ GENERAL INDEX. 255 Composition— (Cowttnued. ) Made by copartnership and creditors of finn. 'Xi. Need not provide for assignment of whole of effects, 94. Creditors may approve of, 95. may object to, 95. Objection to be filed with Assignee, 95. Certificate to be annexed to, 95. To be deposited in Court, 97. Opposition, when made, 97, Ceasing to have effect, assignee to resume potMession, 107. Rank of creditors, if conditions of not fulfilled, 107. Contested, 108. Compulsory Liqdidation. (See Attachment, Writ of). Estate of insolvent liable to, 49. Limitation of time for proceeding in, 50. Concurrent writs may be issued, 51. Service of writ, 53. How proceedings may be contested, 56. Other limitations as to proceedings, 50. CoNC£.VLMENT— Within Province, an act of ]}ankruptcy, 40. Of circumstances from creditors with intent to defraud, 101, 20G. Of effects by debtor, 21L A misdemeanor, 211. CoNCUKKENT WRITS may be issued, 51. Procedure under, 53. Confirmation op Discharoe— On what conditions granted, 97. Form of (Appendix ".5 A.") Creditors may oppose, 97-99. Power of Judge on application for, 97. When refused, 99. Effect of, 108. What claims affected by, 109. Conniving by debtor at seizure of effects an act of bankruptcj', 42. Consent of creditors obtained by fraud, IIG. To discharge, 95. Conservatory proceedings may be instituted, .58, 79. Consiukration— Contracts made without, presumed void, 190. Consul may take certain affidavits, lt>4. Construction of Statements in ])leailing8, 171. Contestation of composition and discharge, effect of, 108. Of claims, in whose name may be made, 154. May be ordered by insiMictors, 154. How to be determined, 154. Costs of, 164. Rules as to evidence on, 157. Contingent Claims provided for, 134. Contracts of Marriaoe. (See Marriage). Fraudulent, 190. Obstructive, 192. Fraudulent, with knowledge of party contractinif, 194. In contemplation of niarriiige, 192, 194, 19.'>. Conveyance. (See Assignment). Of property by debtor otherwise than in acfi)rdnnce with Act, void, 44. When deemecf gratuitous or fraudulent, 191*. Valid at the time of execution, 202. Copartnership. (See I'artner, Partnership). Rights of action of an assignee of a i>artnor, 81. Duties an5, 214. Of resolution nouiiitating assignee, 71. Costs — Under execution a privileged claim, 45. In case of counter [tetition by debtor, 48. Creditor making unreasonable demand may be orden^d to |)ay treble, 48. Lien of solicitor for, 60. 'I ill i »:" it ' ;1 ■ 256 INSOLVENT ACT OF 1875. P* tl ! i Costs— (Continued.) On petition of assignee wishing to purchase at nale. (See Petition, Assignee), 74. Of application or objection to disposal of estate, 77. Of composition and discharge to be paid by insolvent, 00. Lien for, 138. When excluded from ranking en estate, 151. Of contestation, 157. Incurred in general interest of estate, 158. On what property and in what order chargeable, 175. How taxed, 178. On appellant not proceeding. (See Seciuity), 186. Council— Governor in. (See Grovemor). CoUNSBL — Employment of by assignee, 85. Expenses of, to be paid out of estate, 85. County— Definition of, 37. Official assi^'uee appointed for each, 69. t'ouNTY Town — Meetmg of creditors to be held at, 162. CoUBT— Definition of, 38. Jurisdiction of as to assignee, 70. (See Judge). To which Court appeal lies in several provinces, 185. Will set aside a voidable contract, 193. Covenants in a Lease — On whom binding, 119. Not to assign, 119. Credit— Terms of, to he approved by creditors, 125. May be allowed on sales of real estate, 125. Goods purchased on, 206. Crbditoks- Meaning of term, 39-46. Rights of, 39, 71. May reouire debtor to make an assignment, 45. Whose debt not due, may demand an assignment, 46. To choose domicile for service of papers, 46. May set aside writ of attachment or assignment, o6. May acquiesce in assignment to non-resident official assignee, 56. List of, need not be appended to assignment, ectation of being able to pay (Note), 206, 207. Dexd of Assionhent— When to be made, 55. To whom to be made, 55. May be set aside, 56. Form of. (Appendix "K"), 226. Ma^ be received by Notary in Province of Quebec, 57. Registration of copy of, 65. In Province of Quebec, 65. And transfer to be evidence, 214. Of transfer by ofiicial assignee, 74. Form of. (Appendix "H."), 228. Of composition and discharge (See Composition and Discharge). Form of (Appendix 5). Reconveyance by assignee to insolvent on execution of, 108. Its effect, 108. May be registered, 108. Of sale of Real Estate, 125. To have same effect as sheriff's detd, 125. Form of. (Appendix "N."), 231. Assignee may reserve special hyi><>thec or mortgage by. (See Sale), 125. Default— Of official assignee, 70. Of witness, how proved, 170. Defendant in Action — For fraudulent purchasing to be charged with fraud, 207. Proved guilty, liable to impriBonment, 207-8. Making default, plaintiff to prove fraud, 208. To be taken into custody forthwith, 208. Definitions— (See differenv. titles). Delay- -May be made in ciwe of incorporated companies, 17, 218. Demand— Of assignment by creditors, 45. Form of. (Appendix A). Service of, how effected, 46. How obtained, 46. Form of affidadt in support of. (Appendix B). When cannot be made, 46. May be contested by debtor, 48. Malicious or unfounded, 48. Effect of, 48-49. Limitation of time for proceeding under, 50. Form of. (Appendix "A."), 223. Demands— On estate of incorporated c( .^panics, if unsatisfied, estates may be wound up, 218. (See Incorporated C'ouipanies). Demurrer— By insolvent, not being a proper party, 81, Deposit — By assignee of moneyH received by him, 86. Withdrawal of, 86. Account, in whose name to be kept, 86. Separate Deposit account to be kept for each estate, 86. By way of fraudulent preference void, 197. GENERAL INDEX. 269 46. L8. 206,207. e). ^ (See lUd, 207. nay be Dbboriftion— In deed of asBignment, 67, 65, of reconveyance, 108. DiBBURSEUENTS— How chargeable on estate, 85, 175. DiscHAROE- -Of Mflignee, proceedings for. (See Assignee), 87. When to be applied for, 89. Of insolvent, deed of. (See Deed of Composition and [)i»charge), 90. Creditors may approve or object to, 94. Confirmation of, now obtained, 97. Creditors may oppose, 97. Notice of application for, to be given, 98. Affidavit and certificate to be produced by insolvent on applica- cation for, 98. In what cases refused, 98. May be absolute or conditional, 104. May be suspended for five years, 105. May be declared to be of the second class, 105. May be refused, 106. Effect of confirmation of, 108. What claims afFected by, 109. Not to affect secondary liabilities, 112. joint " 112. " mortgage or other security, 112. " certam debts, 113. Insolvent may apply for, 114. How obtained from Judge, 114. To give notice of application, 114. Without composition, 115. May be suspended, classified, or refused, 116. Form of. (Appendix "6.") Obtained by fraud to be void, 116. To be of no effect unless confirmed by Court, 116, May be procured by representatives of deceased iiiHolvent, 174. Of insolvent from imprisoniuunt. (See Imprisonment, Judge), 182. Creditor taking consideration for, 213. Under foreign Bankruptcy Laws, 172. Disobedience-- Of process, how punishable. 170. DisPOftAL— Of estate of insolvent. (See Sale), 76. Creditors may order, 76. Inspector m»y order, 76. Creditors may object to, 77. Court to determine objections to, 77. Costs of objections to, 77. Of goods not paid for a misdemeanor, 212. Disposition —Of projierty by debtor with intent to defraud creditors, 41, Dispute— As to amount of any creditor's claim, Wi>. Disqualification— Of Judge, how raised and decidud, 177. DiSTBiBCTlON— Of interest on special deposit, 86. Of money arising from bale of real estate-, 127. SuDJect to piivileged claim, 129. District — Definition of, 37, 69. Ofiicial assignee appointed for each, 69. Dividends— Ratio of to be stated in certificate of twHignue, 90. To be prepared by assignee, 130. Reserved to provide for contingent clainiH, 1;M. Sheet not to disturb rank or privilege of cretlitors, i;{7. Notice of preparation of, IbH. To be examined by assignee, 1.54. Payment of, 1.53. Reserved for creditors not filing claims, 154. Objections to, how determined, 155. Remaining unclaimed, 161. To lie left in Hank for three years, 161 . If still unclaimed, to be handed over ta|M.>r. (See Surety, Discharge, Negotiable Paper). KeckleHsness of insolvent in acting as, 104. EniX)KSEMENT— What conHtitntes a valid endorsement, 132. Enl.vrobment - Of time allowed for making assignment, 49. EguiTABLE— Estate of insolvent vests in purchaser from assignee, 124. Lien, definition of, 143. Ehoape— Of debtor from custody of sheriff, 183. Estate — Secretinjr any part of by debtor, with intent to defraud creditors, an act of bankniptcy, 41. Of insolvent, when subject to compulsory liquidation, 49. Writ of attachment may issue against, 51. Assignment of, 55. Vests in official assi^ee under aasigmnent, 57. May be sold by assignee^ 58. Statement of, to be furnished by insolvent, 64. Insolvent may be examined concerning, 67. Assignee, 73. Transfer of, by official assignee, 74. Insiiector cannot purchase, 76. Estate — Of insolvent, disposal of, 76. By whom controlled when office of assigneee becomes vacant, 87. Vest in purchaser from assignee, 124. EVAHiON~By debtor on examination a ground for opixwing discharge, 99. Evidence —Of intent to defraud, 42. To be adduced on hearing of petition, 65. Of purchase of debts, 118. Rules as to, on contestation of claims, 1.57. Of default of witness, 170. Not received, except ui>on facts set forth in pleadings, 171. What documents to be, 214. Examination. (See insolvent, witness). Of Insolvent, 67. To be signed by him, 68. To be attested oy assignee, 68. Of other uarties, 68. Refusal by, to appear, ftc 68. How olitained, 69. Of debtor applying for release from imprisonment, 183. Of witnesses, 183. Minutes of, to be filed, 184. May be postponed, 184. Execution— Effect of allowing to remain unsatisfied, 45, Costs of allowed to seizing creditors, 45. Articles exempt troxu seizure under, .58-62. Of deeds of safe, 125. Lien by means of writ of, 137. Exioutob. (SeeTnutee). Not liable to compulsory liquidation, 3.5. May prove claim of deceased creditor, 131. Exemplification— Of record of appointment, 71. Exemptions— What articles are expemt, 62. Expectation— Of being able to pay (note), 206-207. EXFBNSBH— Of witnesses to be paid, 171. Bxtravaoanoi— Of insolvent, a ground for suspending discharge, 104. Facts- In proceedings how set forth, 171. Failure -By offidal assignee to pay over moneys, 70. To appoint an assignee, effect of, 71. GENERAL INDEX. 261 Paper). ra, an act False— Bidding, order of resale may be obtained for, 12G. Prentence. (See Fraud Intent). Falsiftino— Book, a misdemeanor, 212. Farmer — When a trader, 35. Fees -TariflF of, to be arranged by judges, (See TariflF), 179. Feme Covert— When may prove claim, 131. FiCTiTiON*— Stating fictitious loss a misdemeanor, 212. Final — Account, when to be prepared by assignee, 87. To be audited, 88. Forcible— Entry, when allowable, 55. Foreclosure- In suit for, against assignee, insolvent not a necessary party, 80. Foreign— Insolvency laws, discharges under, 172. Creditors, how to be notified of meeting of creditors, 162. Forfeiture— By assignee for neglecting to account for interest, 86. By a creditor receiving a preference, 213. How recoverable, 213. Forms -Api)ended to this act to be used, 170. (See Appendix of Forms). Fraud— A groimd for opjwsing discharge, 99. Committed before act, tOO-101. To be considered in application for discharge (note), 207. Consent to discharge obtained by, void, 116. Alleged against bankrupt must be proved, 208. A misdemeanor, 211. Fraudulent— Debt, no ground for demand of assignment, 46. Sales, 126. Preference. (See Preference). Contracts, 190. Gazette. (See Official Gazette). Goods -Purchased on credit, 206. Government— To hold dividends unclaimed at end of three years, 161. To pay interest on such dividends, 161. Governor— In Council to appoint official assignees, 69. Power of, with resiiect to taxes, 216. Grazier— When a trader, .35. Grounds— For opposing discharge, 99, et. acq. Guardian- Of an infant may prove for infant, 130. Guidance— Of assignee by creditors, 117. HEiRs^Of insolvent may continue proceedings, 174. How far liable, 174. Holder— Of bill may prove against all parties liable, 131. Giving time to acceptor of bill or maker of note, 132. Compounding with acceptor of bill or maker of note without the con- sent of bankrupt, 132. Of notes bought for less than the full amount, i:W. Of bill were acceptance forged or obtained by fraud, 133. Husband— Examination or, 68. Hypothecary— Creditor's consent of necessary to abridge time of advertising (see sale), 123. (Creditors may require sale of property subject to claims (see creditors), 129. Hypothecs— (See Mortgages). Special on real estate may be reserved by deed of sale, 125. Sale may be made subject to, 126. Ciertificate of Registrar as to, 12(5. Illeoal — Trader liable to bankruptcy, 35. Debt no ground for demand to assign, 46. Immovables— Sale of in Quebec, 126. Assignee to procure certificates of the hypothecs upon, 126. Contents of such certificate, 126. Imprisonmrnt— For debt an act of bankruptcy, 43. What constitutes, 43. Of Asaignee, 86, 87. For disobedience of Judges' order, 180. ! 1 J !> 1 ■ 1: 1 1' '•1 I 262 INSOLVENT ACT OF 1875. u. Ihfbisonximt— (Continued. ) Proceedings of insolvent to obtain discharge from, 182. Parties obtaining money or goods under false pretences, liable to, 207. Award of upon proof of fraud, 208. Of insolvent for disobeying order, 214. Inoorporatsd Companies— Judge may order meeting of creditors of. (See Compan- ies), 217. Powers of Juoge with regard to, 217. Judge may order immediate issue of writ of attachment, 217. " " that issue of attachment be suspended, 27.7. " " officers of, to deliver periodical statements of affairs, Ac, 218. " appoint receivers to estates of, 218. " cancel previous orders respecting, 218. " order examination of officers of, 218. Judge shall fix remuneration of assignee and receiver, 218. How estates of wound up, 219. May make assi^^tnient iiending delay, 219. Indictmknt — Against assignee, 208. Infant — When liable to bankruptcy, 36. Injunction— To restrain sale by mortgagee refused, 145. Innkeepeu -Definition of, 34. Insolvent— Definition of, 38. Property of vests in assignee, 57, Except property held as trustee, 58 Powers of vest in assignee, 57, 78. Sale of estate of^ by assignee, 58. Rights of to maintain actions, 60. To furnish statement of affairs, 62. May petition to set aside attachment, 64. Grounds of such petition, 64. Must attend first meeting of creditors, 67. To attest statement of a£^r8, 67. Examination of, 67, 68. At instance of inspector, creditor or assignee, 68. May be guilty of a misdemeanor, 08, 210. To sign examination, 68. To execute documents, 68. Refusal by, to answer, &c., contempt of Court, 68. Cannot claim expenses before being sworn, 69. Assignee purchasing property of, 73. Assignee oecoming, 73. Estate of, how to be disposed of, 76, 78. Assignee to wind up, 78. To give security for costs in certain actions, 79. Need not be made a party in certain actions, 80. May demur if not a proper party, 81. Assignee to represent in all suits pending at time of appointment, 79. May procure deed of composition and discharge and deposit with assignee, 89. Proceedings by, after consent to discharge obtained, 97. May file deed of composition and discharge with certificate in Court, 97. To give notice of such filing, 97. of application for confirmation of discharge, 97. of hearing of application after objections made, 98. To produce affidavit and certificate on application for confirmation of discharge, 98. Misconduct of, 104. Reconveyance to, 108. May apply to Judge for discharge, 114. Must prove he has conformed to requirements of Act, 114. To submit to examination touching' estate on application for discharge, 116. Holding under a lease. (See Lease), 119. GENERAL INDEX. 2()3 e to, 207. ) Oompsn- 'f affairs, 79. with /ourt, on of "«e, IssovrEin— {Continued.) Ovfing debts individually and as a partner, 149. Creditors may allot allowance to, 151. May petition for payment of balance in hands of assitmee, 161. Death of, 174. Kepresentatives of may procure discharge, 174. Letters of, assignee may receive, 176. If in iail may apply to judge for discharge, 182. Ptmishment of, for a mi^4dem')anor, 210. When guilty of a misdemeanor, 210, Receiving money and not handing same to assignee, 213. Insolvent Act— (See Act). Inspector— May be appointed by creditors, 75. Api><)mtment of may be revoketl by creditors, 75. Creditors may fix remuneration of, 75. Not to purcha8<^ estate of insolvent, 76. Powers of, 76. Under English Acts, 76. May order sale of insolvent's estate, 76. To narau bank where money to be dettosited, 86. May require assignee to declare diviclend, ):¥). To examine claims and dividend sheet, 1.54. May order contestation of claims, 1.54. May order payment of costs out of estate in certain cases, 157. May direct what notice of meeting to be given, 162. May require officers of incorporated companies to give periodical state- ments, 218. Instrument of security -(See liond.) Intent— To defraud creditors, 208. Contracts made with, void, 194. Evidence of, 194. Interest — Received upon money deposited in bank, 86. To appertain to estate, 86. How distributed, 86. When and how accounted for, 86, Rebate of, how to be calculate:harge without consent of creditors, 114. May require report from assignee, 116. May authorize a creditor to tak» proceedings. (See Proceedings), 117. May order indemnity to be given to assignee, 117. Duties of with respect to leases to be sold 119. May ^ant order requiring sale of property subject to privileged claims, 129. i i 264 INSOLVENT ACT OF 1875. • I H JUDOB— (Continued.) May order assignee to distribute proceeds uf sale, 120. declare dividends, 130. valuation of continaent claims, 135. To determine contestation of claims, 154. To hoar and decide objections to claims, 155. May enlarge time for proceedint; in contestation of claims, 15.'). Direct what notice of meeting to be ^ven, 162- To decide between opjKising majorities, 72, 102. powers of with reBj>ect to commissioners, 168. May order issue of writ uf subpoena, 168. May order attendance, 169. May punish for non-attendance, 170. May enijiower assignee to o[M)n insolvent's letters, 176. JiiHBdiction of C-. V. Judge in other counties, 52, 177. Disqualification of, 177. What Judge to determine in cases of disqualification, 177. Who to preside in Quelle, in absence of, 178. To frame rules under this Act, 179. Summary jurisdiction of. (See Onlor), 180. May order imprisoned debtor to be brought before him, 182. May order assigneo to take examination of imprisoned debtor, 182. May order debtor's discharge from imprisonment, 182. To adjudge term of imprisonment of defendant convicteorated companies, 219. May examine officers of incoriM>rated conij>anies, 219. May fix remuneration of receiver and official assignee with respect to incorporate18. en, 219. re«i)t;ct to ge on for, 60 . "Livy— Continued. Statt)in«*nt of, to Ih! funuHhml by inHolvent, 63. LlABiLlTlKs Krotn which inHolvetit frutxl oy diHchargc, 108. LiDKL— DaiiuiKCM for. (Sve DiHchurt^e,) 113, LUUJ— Of landlord for rent, 122, 17<». For costs, 60, 138. Not created by neizure, 137. 1 U-tinition iiiid divimon of. 14.3. None to nttacli on work (lone on credit, 11-1. Of clerk for w«};eM, 1.52. (See MortKu^jo, Sectirity, Solicitor). Of time within which to take proceedin^H for coin])ulHory li<| nidation, r>0. TilMlTiiTlON —Of claim of landlord for rent, 122. InHolvent to furninh official assignee, 63. Hniiplenientary, 64. Li;sT— Of creditorH to Imj mailed with notice, 66. • (Jf debtH to be h )hl, to be kept by assignee, 117. (See Sale, Debts.) LuN.VTic— When liable to bankruptcy, 36. MA1NTKN.VNCE— Monej- iMtyable for, 113. Those unaiie<:ted by discharge not computed in, 114. Majority— Of creditors may bind minority, 162. Malicious— Demand to assign effect of, 48. Issue of attachment, action for, 52. Arrest dainageH for, discharge not to affect, 113. Damages for breach of contract no gronnd for refusing discharge, 100. Mabbiaoe— Contracts of trader to be rei^ristered in Quebec, 181. Consetiuence in default of regiKtering, 181. Contracts bv debtor, liM. Marrieo Woman— May become bankrupt, 37. Meeting— (See Assignee, Creditor, Judgi-, Notice). ('ailing of meeting of creditors by debtor an act of bankruptcy, 40. Of creditors, when called, (i(t. By whom, 66, 67. To be advertised, 66. Form of notice of. (ApiHindix " G."), 228. Of creditors who shall preside at, 67. Insolvent to attend, 67. To be called by assignee cm renuisition, 85. Bank pass-lHiok to be iinKluceti at, 8(J. Of incor|M)rated comnaiiies, 217. .ludKf may order, 217. I'roceetlings at, 217. Creditors tt) be notified of, 66. To appoint place of, 75. To consider composition and discharge, 8"J. How and when called, 80. To be advertised in Gazette, 94. Notice of to be given crey assignment, 57. Procuring advances in, with intent to tlefnuid, 206. MoRTOAOE— Of stock and inijilements, may be an act of bankruptcy, 45. How affecteil by dischar(>e, ll'.i. SiM-cial, ma}' be reserved by deed of sale, 125. 18 t nr , \ li 260 INHOLVKNT ACT OF 1875. > , 'i ■i MORTOAOE- * 'rower of salu (notv), 124. May Hell without luave of Court, 145. Not to ;iurchaHo laiuUi in certain ca«t'H, 145. Cru(litoi-<* hoUliuK oh Hecurity, 147. MoRTOAUOH -Bankrupt. (Svu Bankrupt). ('onvoyin^ undor prumure, 194, 199. NlOLCCT--Of initolvent t^) appear, an act of bankruptcy, 43. In procotxlinKH pnor to ap|M)intmunt of ofMi^nee, 72. To (liptributu intwreHt, Wi. Topreiwut iictition for cliHchargc, 88. NXtiOTlABLE Pai'KK— V«jt8 in .f of claim on, Vi'2 cl uq. Rule where given for greater amount than debt due, 132. Notice— (See Aiwignee, lulvertiitement,). Of application for enlargement of tinie for aBsigning, 49. Of iiMUe of writ of attociiment, 54. To be given by official osHijjnee by odvertiaement, 54. Of petition to set aside asMignnient or attachment to be given, 66. Of meeting of creditun, how given, 6A. When to be given, 07. Fonu of (appendix "G.") 228. Of appointment of OHHignue, 74 Fonn of (a^)l^endix " T,") 229. Of objection to diHiMMal of iuHolvent't* etttate, 77. To be Hcrved on iwwignee, 77. Of meeting of c uditont to state puriMMc for which meeting called, 80. To coiuiUvT comiMwition and diHcharge, 94. To be advertised in OautU, 94. To be given creditors, !»4. Contents of, 94. Of dej)oNiting deed o f com|HMition by insolvent, 97. Of iihng consent to dischoi-ge, 97. Of application for continnution of discharge, 97. How given, 97. Form of (apiiendix " J,") 229. Of hearing application for discliarge after objections mode, 98. Of application to Judge for discharge, 114. Form of (amiendix " L," 230. To be Hent to each creditor by mail, 114. Of detention of leased proin-rty, 120. Of comj>letion of dividend sheet, 15.'{. Fonn of (apjiendi:; "(),") 'JXVL Of (Mitition by insolvent for payment of balance, 101. To be advertised, 101. To cre1. To be given by litter, 1.>I. To ( 'reditors jiending delay, Kil. Of meeting of creditors, 102. To be mailed to creditors ten days before such nicetin}^', 102. I'd be given by advertisement, 102. Of examination of debtor as to discharge from im[>riHoMmeut, 184. Of application for appeal, 187. Preliminary of issue of vfrit to be given incori>orated companies, 210. NoN Resident Oppicial Ashionee— Creditors may acijuieace in appointment of, 5G. Oath— return of writ to hv made under, 54. Insolvent to be examiued under, 67. 124. iven, 6G. ing coUtid, 98. IK, 1C.2. , 184. iiH, 2Ui. OENKRAI. INDKX. Oath— Supplempntary may In- rfquiri'il from iTi'ditorn, 118. Wh(» may wlminiHter, l bt- attcMtetl nndiT, lt»4. DnKiiiKNCE To .Iii<1««'h ohUt, how mifortcd, 180. Objkction toj)ro|H>m'peal, 187. Obstbuctivk— contractu to be t-videncf, 1!»2 OrPENCEH— AgainHt Act, how triwl, 212. Offiobbh— public, funds due from not etfoctad by lUncharK^, 113. May make forcil)lo entry, 5.5, Of Court Official AHWgnee to be, 7(». Of Companiefl' tnwtees, 217. Of Incorporated Comp nies JudKe or AHHijjnee may examine, 219. penalty for refnsmg to answer (jueHtionri. 21t). Official Ahbionek— definition of, :T7, 54. By whom appointed, .'17. Writ of Attachment to be directed t of executing writ, .54, When and how to return writ, 54. May make forcible entrj', 55. Deed of assi^nient to be made to, 55. When none in county to whom assignment to be made. 55. Non-resident creditors may accjtiiesce in naiignmunt made to, 66. OfficIiVL AssioNEK— What property vests in after assignment, 57. How to holil property under assignment, 57. Powers of as to property of insolvent, .57. To preside at meetings, 67. ToatteRt examination of insob jtit, 68. To apply for ex.tmination of other parties, 69. Ap|)ointment of, 69. Number to be apiKiinttnl, ()9. To give security', 70. To nold office during pleasure, 70. Failure by to pay over money, 70. May be remiired to give over additional security, 70. Shall lie officer of court, 70. Besijonsibility of, 70. Subject t . jurisdiction of court, 70. To continue Assignee if none other appointed by creditors, 71. Transfer of Estate of insolvent by, 74. Not entitleil to notice of action in suit for tresjiass, 79. To keep register, H'.i. To open separate account with each estate, A'.i. Remuneration of when sujjerseded, 85. Death of, 87. How estate shall vest after, 87. Judge may r>rder to take examination of imprisoned debtor, IS.l. To take down such examination, 18:^. To transmit same to judge, 183. Remuneration of, on such examination, 183. May examine officers of incorporated companies, 219. Remuneratiim of, with respect to incorporated companies, 219. Qaullc, Definition of, 87. 2fi7 268 INSOLVKNT ACT OF IH?'). I \ OrKKIIAI. ArtrtUiNKE -CoiiliilKal. AdvertiHementM to hv ptililiHlinl in Ki'i. Omihhion - In priRx-i'dinpt |>riiir to !vi>|M)iiitiiioiit of ibMih'tiui', ulTuct of, 72. ()|'I'0«ITIONS. (SfC OltjuctlOllH). OHDItU-For MUiwtitHtioniil Horvkc, 51. How obtAiiieil, 51, Salu of infM)lvunt'M I'xtutis '>X. fSuHiiumliiii^ in*'lvfiit'M iliMi'liuPn'i;) 105. Autliori7Jn){ tveditor to iuku |>i'ociie(UiigH, IIM. Uf reHolo on account of fnlw! liiiMinK, 12. For unforcint^ clahn aKainift nHHig'iuu, 1K(). May Ih' o))tnnifut, 180. Ity diHniiHMil, 1K(). Aiay iHiapjK-alwl from, 18.\ Pabtnkb. (SiH! .\Miii(!i:n«i', Partnorship and f "o-PartnorHhip. ) Pauymkuh- I'ntilitorx of individnal n)Hition Hhould i)r<)vide for Heparate creditont, U3. Dinttnlved W bankruptcy of any memlH-r, 150. ^[emlM>rN of pr. pATMESt - Of balance to receiver-general, by ajwignee after diwharge, 84. Of dividends, l.W. In unjuHt prefei-enc, l!»7, ft. nu. Hy debtorx within thirt.y dayn or inmdvency, '204. Amount paid may be recovend for theeHtate, '204. Security given in conitideration of nuch payment t. Pe: .iLTT - In caiH' of aiwignec refuning U- change Holicitor, 7.'{. For non-payment of balance o.fter (lirtcharge to receivur-general, 84. For neglecting to diittribute int7. I'KHHONAi. WrongH action for, not to vt Nt in aMHignee, 58. I.alHUir, aiiion for, iuHolvent uiay miuntain, 00. Pktition- Ily inxolvtMit in annwer to demand to iiMHign, 18. When iniule, 18, 40. Ity iuHolvent to Met anid'! attat hment or aiM'.gnment, iVi, 04. N(>tice to Ih' given, ."Hi. What to «how, til. To be heard by itidgc •uinmarily. i>5. OKNICUAL INDEX. 20!) , 82, 150. Itici< IkmiIcr, 1|) buHiiiotM, I. 204. 1,84. I'KTITION —Cniit ill Hill. Ai>n'nf}\vi' wiMliin.; to jiurchaHi- nt nali', 71. < 'oniplmniii:/ of iH';,'lt'i't of nHsi^'iief to lu-connt for iiitiTi'st. S(J. For uiMclmrK*' to l>i' ^ircHontiMl ')y iiiHi^ciu'c, W. Notiw to l>u Ki^'<'>' iiiKolvi'iit, SM. And inHpi'i^toi-s or croiUtorH, «*<. Jiiuik certiticatfs and Htnti-ininitH to 1m- tiled witli, HH. Hy innolvcnt for diKchart;«, 'W, 114. For rtwak' ^nmniory form of (Apiu'iidix 4), 120. For insolvent for payinent of hamnco, Itil. What iiotico of, to he K'iven, 102. AnaiiiKt ftHMiffnee, 180. I'l.M K Of inoetini^H, T'l, 102. I'l.Ai.NTiKF In action for frauiN(i« Auiendnu-nt of, 174. ri.Kl>GK Definition of, 14;<. How created, 14;{. Policy Of insumnce, artHJ^'nnient of, in contemplation of iimolvency, 198. l'(i«TA(!K On noticuH to be paid, 102. I'oHTroNEMKNT -Of exaniination. (See examination), 184. I'owEHM Of official asHignec. (See Official Afwi^niee). Of jndt?e. (See .lud^e. Order). Of insolvent to vest m .•uwiKiiee, 57, 78. Kxoept when held by him a« tnintee, M. Of InHpectors, 7o. Of majoritv of i^reditnrx to bind minority, '.H(. I'lUCTICK. (See HlUeH), 184. I'UKKEUENCK Hy nuiuiK of jijdKmeiit by def.ault, 4.'<. Frauifuleut, may be ground for refiinal of diHcharge, '.Kt, What coiwtitutcs (note), l'.t2. Acts conHtitutinu, rentier contract void, 107. Induced by tlireatH, 100. Under wiiat circnniHtancen will void u traiiMactiun, 201. .\s an inducement to obtain diMcharRe, 21.S. I'ltKKKUKNTIAI. JilEN (.See hieu). I'ltEi.iMiNAHY Notice of iHcue of attachment t" be ^riven incoriviratod com- panieH, 210, I'UKSHt'UK TrannactionH uni, PuiVlLEUE (See Lien anil Hank). For coMtH, I'M. PuiviLKUUD L'KEDlToiw -May reiiTiire Male of » ■ iperty uubject to tlieir chum. (See {'reditorn). 120. PllOCEDlUE ('(mU- of. (See Ci„\r). RuleM of, an to aiiiendineiitH of pleadinxH, 174. ProCEDI'IIK At meeting "f creditoi-x, t'u. In matters of, iliis Act to noverii. '-'"-'l. I'KOCEEDH— Of nabf of red i-stiite to be paid into ('on»*t, b'tW. To Jm' (liuded .mioIlK' creditors, l.'iH. Pn.rt'EKIHNUH Tinier delniind 111 ;iNsij,'li, .'lO. When to lie contilieiiced, .'»0. Under writ of attHchment. ."d. For compulsory liiiiiidation may be set iisiile on suniniary petition, (i. SlM.H.'ial nif^y In- taK<-ii bv creditor, 117. Upon assivriiec reuiHiiiK to do «o, 117. .fudifeV order to be ohtaiti<-d, llS. To Tm^ titken in name of iMsignee, 118. In case of re-nale, 120. Stay of .111 writ of execution, i;<0. 270 INSOLVENT ACT OF 1875. J PROCKKniNOft— <7f)H«i/i lied, Ilegtilation of, 178. On ap{)eal, 185 cl seq. For R wvury of debt frautlulciitly inourrud, 207. In coHu of inuoriK>r»tucl uompaniuH, 21.'i el »eq. Procuuino— Property to bo Huixud, an act of bankmptcy, 42. Not, however, until actual seizure, 43, Production -Of bank jMuw-book, 86. Proof of claims, LW, 164. By wbora to be mode, i;30. Form of, 233. Vouchen to be attached, 164. Propbhty - VuHtH in assignee under assignment or attachment, 57. In what manner held by assignee, 57. (Certain exempt from seizure under assignment, 58. Held by insolvent as tnistee not to vest in assignee, 58. Purchase of, by assignee, 73. Leasehold, 119 et seq. Sale of, may be stajred, 158. Proportion— Of creditors required to make allowance and discharge, 89, 161. Protkction— Of estate. (See Conservatory), 58. Prothonotary— Affidavit of claimant to be filed wit!i, 46. Copy of resolution appointing assignees to be filed with, 71. Certificate to be fileqT)ita1)Ie estate to vest in, 125. To have same rights as purchaser at Sheriffs sale, 125. At Sheriff's sale, protected from claims of assignee, 139. Of debts from insolvent may rank on thi* estate, 206. Quarry MAN— A trader, ;tt. (JuBSTlONS— At meeting of creditors, how determined, 162. IIank imd privilege of cree calculateruted companies to furnish necessary information, a contempt of Court, 216. Reqistee— To be kept by assignees, 83. What to contain, 83. To be open to public inspection, 83. To be deposited in office of official assignee for county by non-official assignee, 83. ReqibtrAB— (certificate of as to discharge of hypothecs, 126. Registration -Of copy of writ of attachment, 6f>. Deed of assignment, 65. In Province of Quebec, 65. Priority of, 66. Of deed of reconveyance to insolvent, 108. Of marriage contract, 181. Rem AININO — Out of Province an act of bankruptcy. 40. RBUEDIE8- Against assignee, how obtained, 180. Removal- -Of property with intent to defraud creditors an act of bankruptcy, 41. Of effects, a misdemeanor, 211. Of assignee, 71, 87. Grounds for, 72. Principles governing, 72, 73. Guilty of misconduct, 73. When election procured by fraud, 72. Who is an accounting party to the entate, 73. Whose interests ore adverse to creditors, 73. Who has not been duly elected, 73. Who appoints solicitor related to insolvt'iit, 73. Wlio becomes insolvent, 73. Poverty alone will not warrant, 73. Who purchases any orated companies to l)e submitted to Judge, 217. liKHi'oNnKNT to an ap|>eal may recover costs if ap[)eal not prosecuted, 186. RBSPONaiBiLlTY— Of oiHcial assignee, 70. ■f , )l ll ' 4 r i ■i 272 INSOl.VKNT A( T OF iSjo. RktbNTION— Of leAHuhold proi^rty for uhu of the e«Ute, 120. By debtor of iK>rti«>n of his vtfect», *M. ]{y creditor of ^jrojicrty held as security, 140, Retired— 'iWler wlien liable to bankruptcy, 30. Return- Of wi-it of attachment, 54. How made, 54. Writ of execution, 158. Of process to be made under oath, 1«5!). Revirion. (See AppeaD, ia5. ROLBH — As to evidence on contestation of claims, VtJ. Of practice in Province of Quelx-c, 178. To be settled by Judge in other provinces, 17!>. Present to remain in force until alteretl, 180. Salary -(See Clerks,)!). Sale- Of debts, 117. May be made by assijfn'ie, 117. With consent of creditors or insi)ector, 117. At public auction, 117. After advertisement. (See Li.8. May be may insolvent, 110. ,ce of to l)e given, 110. Notice Subiect to payment of rent, 110. And to all the covenants of the lease, 119. Real estate, 123. Assignee may sell, 123. After due a. May be stayed on application of aHsignee, 158. Proceeds of to be paid into ( 'ourt, l.")8. Or personal property subject to privileged claims, 12'.). Preferential when jireHunicd fraudulent, 107. Schedule— False, 211. Secreting— Effects an Act of Bankruptcy, 48. Skcukeo Claim— Procewlings on Kling of. (See Claim), 130. SKt'UUlTV -Oiven by otticial assignee, 70. How to be recovered, 70. To whom t" Im- given, 70. Ailditional nuiy Ix' demanded by critlitoi's, 70. Form of bond f^ir. (Ai>i)endi.\ .'Ijto be given by nssignoo, 71, Directions as ti> lie ;,'iven liy ereditor^, 71. Creditors holding not to bi> prejudiced by sale t/i Hor, 78. Creilitois holding, 137, 1(0. ( 'onsisting of negnuublr instruments, 140. Mortgages on real i-state or shipping, 147. Surrender of by creditoi-s to assignee, Kl.'i. Crettitor may value same and rank us unlinary i-n-ditor for balance ikiiove such valuation, 105. On proKi'cntioii iif :ip|M':d to 1h- given by ap|M-llant, 180. tSiven 111 fr:iniliili'nt pn-ference, l!»7. GENERAL INDEX. 278 Hecuuity -CoxiiM ned. By creditor. Collateral cro<1itnr holdini^, may prove for, 132. Not alfcctMl by diacharKe without cniient of creditun, 112. For coatH to bo (pven by insolvuiit, 79. (liven by creditor to Iks reHtored to him, 204, Heretofore ifiven, valid under thix Act, 221. iKnt'cnoN -Damages for, 113. t' .ZUBK.— (See Execution). Of effects, conniving at by debtor and act of bankmptcy, 4.3. Under execution after ap|M*intnicnt of aaaignee, l;i8. I'mperty under, at time of commencement of proceefUngii, 158. Sertanth. (See <'lerkH.) Skhvick— Of pa|)era by debtor after diamand to assignee, how effected, 4f<. Of writ uf attachment, 52. Of objections to claims, 15/>. If defendant has no domicile or absconds, 52. Of pai)ers under this Act, l(t8. Of process, 169. Sbt-ofp— How allowed, 185. Nature of claims which may he s«*t off. 160. Transfer of debtx due by insolvent to nis debtor to enabl« him to set off, 205. SherIpf— Fees of, to lio settkn] by judges, 17'.K May be ordered to bring In debtor for examinatie attested by insolvent, 07. Of assignee to be filed with iHjtition for discharge, K8. Contents of, 88. To lie prepared by assignee |>epiiMliealIy, 12iK Constantly aeeeHsibie to ci-cditors, 129. When asrtignee to pri-i>are, 129. Of pleadings, how made and eonstruiil, 171. Stay— Of proicedings on writ of execution, 139. Stoppaoe Of govinces, 179. TAX-(}ov«rnor may iinjsis*', 215. Taxation Of costs, 175. Time -For commencing proceedings limitoti, .50. * Heturn of writ. .54. IB ^i I t 274 INSOLVENT ACT OF 1875. TlUtt—OimiinHfd, Petition to act Mi«le writ. M. Payinnnk of hjrpotheca aut to be eit«nded by •»!«, 126. TlTU— Convfvad br Md«ne«, 125. Of Act, m. Thahkm- Act to apply to, :t3. Who un. h Ab to peiwina hiring been, how Act to apply to, 34. Illegal. lUUe to bankruptcy, 3S. i Lr!' tu baakruntoy law* until hia debta are paid, 30, 60. lUtired, when liable to bankruptcy, 36. KarriaKe contract* of, 181. Tiuniifo -What conatitutee, 35. TMAXHriR—Of «atate of iuolvcnt by official aiMiffn« tnMt funda. not affected by diaohari{«i 113. How claim proved by, 131. TirroR, 'Hee Tniatee). Uxiii'K I'refappDce. (Hee Fraud, Prrferenoe). Vacamct -Tn o(Bm of official atwignee, K7. Vai.I).\tion Of aeourity held by creditora. 1:I9, 1U5. Vkxatiduh Demand Ut aMtiKn, effect of. (Hee Demand), 4M. VoLl'NTAMT Avdignment. (Sfe AjMitfnment). Payntunt madr by debtor, 204. Vf»Tl - No clftim to have mure than one, 72. V(»TlNu Ki({ht« of cretlitoni m U; 71. Partiee votiitK not entitled to do ao, 73. VouciiRRM Tuat-^^Jinpaiiy pnM>f of cUim, lt!4. Wakhamt S«rTioe of, 189. WAnitANTY Of debta not i-reated by bill of aale, 110. WAHKat l.ifit for. (Hee l.ien. Clerk). WiTHHoLiii.Mu i^MtR^ A iniademeanor, 212. WirNKiM Not obligvil t until exiJenaeH ;>aid, 00. Heinif fn>|Mttna, IM. May I It- c4in<|Milled to apiiear, ?00. Puniihucient of, for nwn-apiMtaraitcf, lO'J. ''' «|Hinat-ii muat In- temloied t4i, 170. ty Ite fxanuiitxl »n |>«tition for diactMuio*, 183. WmTo' .a-ilMK.NT I.Sm- Attachment), ."il. tV«uNU» 1 oraonal action for, not to vi-at in aatitttnee, 58. >i){nee. 126. 30, 80. te, 74. vtHt in uaignee.