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 THE 
 
 ONTARIO INSOLVENCY CASE 
 
 IN THE PRIVY COUNCIL 
 
 Council Chamber, Whitehall, 
 
 December 12th, 1893. 
 PRESENT: "^ 
 
 THE RIGHT HON. THE LORD CHANCELLOR (LORD Herschell). 
 THE RIGHT HON. LORD WATSON. 
 THE RIGHT HON. LORD MACNAGHTEN. 
 THE RIGHT HON. LORD SHAND. 
 THE RIGHT HON. SIR RICHARD COUCH. 
 
 THE ATTORNEY-GENERAL OF ONTARIO 
 
 — vs. — 
 
 THE ATTORNEY-GENERAL OF CANADA 
 
 Counsel for the Appellant: 
 
 THE HON. EDWARD BLAKE, Q.C., M.P.; MR. HALDANE. Q.C. M,".; 
 
 AND MR. R. M. BRAY. 
 
 Counsel for the Respondfint : 
 SIR RICHARD WEBSTER, Q.C, M.P.. and MR. CARSON. M. P. 
 
 Argument of Mr. Blake for the Appellant 
 
 This Argument is printed as a liirilier slisjiu contiihutioii t.itlie discussion 
 on the Interpretation ol the Constitutional Act 
 
 ^ TilRONTd : 
 
 Thk IIkvam- I'ui.ss, 2.) Hay Stki-.i 
 
EXTRACTS 
 
 R. S. O., Chapter 124 
 
 An Act respectii\Q^ Assignments and Preferences by 
 
 Insolvent Persons 
 
 I. In case any person, bcinR at the time in insolvtnt cir- 
 cumstances, or unable to pay his dehts in full, or knowing 
 himself lo be on the eve of insohenty, voluntarily or by 
 collusion with a creditor or creditors gives a confession of 
 judgment, ii>i;>io-'it actionem, or warrant of attorney to confess 
 jiultiment with intent, in giving such confession, i'i\i^>tf^'ii 
 acfroitt'/r, or warrant of attorney, to confess judgment to 
 defeat or delay liis cretlitors wholly or in part or with intent 
 thereby to give one or more of the creditors of any such person 
 a preference over his other creditors, or over any one or more 
 of such creditors, every such confession, cogncK'it aciioni'ni, or 
 warrant of attorney to confess judgment shall be deemed and 
 taken to be null and void as against the creditors of the party 
 giving the same, and shall be invalid and ineffectual to support 
 any judgment or writ of execution. 
 
 2. Every gift, conveyance, assignment, or transfer, delivery 
 over or payment of goods, cliatlels, or efTects, or of bills, 
 bonds, notes, securities, or of shares, dividentls, preniiinns, or 
 bonus in any bank, company, or corporation, or of any other 
 projierty, real or personal, made by a person at a time when 
 he is in insolvent circumstances, or is unable to pay his debts 
 in full, or knows that he is on the eve of insolvency, with 
 intent to defeat, delay, or prejudice his creditors, or to give to 
 any one or more of them a preference over his other creditors, 
 or over any one or more of them, or which has such elTect, 
 shall, a- against them, be utterly void. 
 
 3. (i) Nothing in the preceding ^ection shall apply to any 
 assignment made to the sherilT of ihe county in which the 
 debtor resides or cariies on business, or to another assignee 
 resident within the Province of Ontario, with the consent of 
 the creditors as hereinafter provided, for the purpose of paying 
 ratably and proportionately, and without preference or pri- 
 ority, .all the creditors of the debtor their just debts; nor to 
 any bona Jiiic sale or payment made in the ordinary course of 
 trade or calling to innocent purchasers or partie'^ ; nor to any 
 payment of money to a creditor, nor to any hoiia fide gift, 
 conveyance, assignment, transfer, or delivery over of any 
 goods, securities, or property of any kind, as above mentioned, 
 which is made in consideration of any present .actual bona 
 
 fiiie payment in money, or by w.ay of security for any present 
 actual bona JiJe advance of money, or which is made in 
 consideration of any present actual bona fuie sale or delivery 
 of goods or other property ; provided that the money paid, 
 or the goods or other pioperty sold or delivered, bear a fair 
 and rea.sonable relative value to the consideration thereof. 
 
 (2) Kvery assignment for the general lienefit of creditors, 
 which is not void under section 2 of this .Act, but is not made 
 10 the sherilT, nor to any other person with the prescribed 
 consent of creditors, -liall be void as against a sub>e(|uent 
 assignment which is in conformity with this Act, and shall be 
 subject in oilier respects to the provisions of this .Act mitil and 
 unlessa subsequent assignment is executed in accordance with 
 this Act. 
 
 ■ * • 
 
 (5) The debtor may in the first pl.ace, with the consent of a 
 majority of his creditors having claims of $100 and upwards, 
 computed according to the provisions of section 19, make a 
 general assignment for the benefit cf his creditors to smn-t 
 person othei than the sherilT, and residing in this province. 
 
 4. Form of assignment for general benefit of credituis. 
 
 5. How claims are to rank. 
 
 6. Appointment of assignee. 
 (2) Estate to vest in as-.ignee. 
 
 7. Rights of assignee. 
 
 8. Recovery of proceeds where properly sold. 
 
 9. An as Vnme It for the general benefit of creditors under 
 this Act shall t.ike precedence of ali judgments and nf all 
 executions not completely executed by payment, subject to the 
 lien, if any, of an execution creditor for his costs where there 
 is but one execution in the sherifT's hands, or to the lien, if 
 any, of the creditor for his costs who has the first execution in 
 the sherifT's hands. 
 
 10. Amendment of assignment by court. 
 
 11. Remuneration of assignee. 
 
 12. Notice of assignment 10 be published. 
 (2) Assignment to be registered. 
 
 13. I*enalty for neglecting publication. 
 (4) Liability of sherilT. 
 
 14. Compelling publication and registration. 
 
 15. Assignment not invalidated by omission to publish, etc. 
 
 16. Assignee to call meeting of creditors. 
 
 17. Meeting of creditors by request of majority thereof. 
 (2) Judge to give directions in case creditors do not attend. 
 
 18. Voting at meeting. 
 
 19. Scale of votes. 
 
 20. Proof of claim. 
 
 21. Accounts to be prepared by assignee. 
 
 22. Notice of dividend sheet. 
 
 23. Set ofT. 
 
 24. Affidavits, 
 
The Ontario Insolvency Cas 
 
 
 ARGUMENT BY MR. BLAKE FOR THE 
 APPELLANT. 
 
 Mk. Hi.AKK ; I nppcar, my Lords, for the .ippel- 
 lant with my k.iir.i-d friends, Mr. Ilaidaiie .ind Mr. 
 Hray. The .ippeal is (in a ease referred to the ("ourt 
 of Appeal of (Ontario under a recent Statute whicli 
 comes now, for the first time, before the Court ; and 
 i may therefore, perhaps, Ix.'gin hy stating that 
 Statute. 
 
 It provides for a reference to the High Court or a 
 Divisional Court thereof or to the Court of Appeal 
 by the I.ieulenant-( lovernor in Council of any matter 
 which he thinks lit to refer ; anil the Court is thert 
 upon to iiear and consider the same and certify its 
 opinion with reasons. Then, 
 
 " In c.1^c the m.-xtler rel.ites to tiieconstitmion.Tl \aliuity of.tny 
 iV:t which ha^ heretofore heen or sh.-ill hereafter be p.issed by 
 the I.eKi..lriture of ttiis Prtn-ince, or of some provision in any 
 snch Act, the Altorney-t Jeneral of Canada shall lie notified of 
 the iie;iring, in oriier to be lieartl, if he sees tit." 
 
 Then, the opinion of the Court is to be deemed a 
 judgment of the Court, and an appeal shall lie 
 therf ' 111 as in the case of a judgment in an .action. 
 Then. 
 
 " In case of the matter being appealetl from the Hijih Court, 
 or a I>i\-ision;il Court therM:*'. tu the Court of Appeal, sections 2, 
 ?. 4, 5, and 6 siiall apply m like manner as if ttie original refer- 
 ence had lieen to tiie Court of Appeal. An appeal to Her 
 \I.ajesty in Her Privy Council, from a jndgment of atiy Court 
 ou a reference under this .-Vet, shall not be subject to the 
 restrictions contained in the Revised Statute of this Province." 
 
 My Lords, the case came before the Court of 
 .Appe.il for Ontario, in which there were sitting four 
 Judges of that Court. TheChief justice of the (Jourt 
 was of opinion against the constitutional validity of 
 the provision submitted for consiileration. 
 
 TiiK LoKi) Cham I'.i.i.nK : Was it whether an 
 Ontario .Act was ii/tm 7<iris ? 
 
 Mr. Bl.AKF. : Ves, or rather whether one clause of 
 an Ontario .Act was ii/fra -•»'<•«. .Mr. Justice Osier 
 delivered no judgment. Mr. Justice Hurlon was, as 
 had theretofore lieen explained in former cases, of 
 ojiinion that the Act was within the competence of 
 the Legislature, but felt bound by an intermediate 
 decision of the Supreme Court to conclude tiiC con- 
 trary ; and Mr. Justice Maclennan was in favor of 
 the valiility of the Act. So that of the judges who 
 actually delivereil judgment, the opinions of the 
 majority were in favor of the proposition which the 
 judgment of the Court affirmed to be unsound. 
 
 Lord Wai-SON : One of the Judges declined juris- 
 tliclion in the matter, 
 
 Mr. Hi.akk : Ves ; I iielieve .Mr. Justice Osier's 
 opinion is rather opposed to the policy of the Legis- 
 lature in passing this Act, and that he thought it 
 consistent with his judicial duty to decline the function 
 imposed on him by the Act. 
 
 Lord Watsiin : I think grave questions might 
 arise as ;ii whether a (pieslion of this kind is or not a 
 ipiestioti for the Provincial Legislature, or whether it 
 is a ([uestion for the Legislature of the Dominion. 
 The .\ttorney-(;eneral for the Dominion is making 
 no objection. 
 
 Mr. Bi.akk: No, my Lord; the Attorney-( Jeneral 
 appeare<l by counsel, who argued the case before the 
 Court of .Appeal. 
 
 LdRIi Watson : There might have been a great 
 ipiestioii whether the Province could regulate the 
 proceedings. 
 
 Mr. I'll.AKlc ; .Vt present no such (piestion is raiserl. 
 
 LoKli SliANi): Mr. justice Osier says that for 
 reasons already given by him on other occasions he 
 did not feel calletl upon to answer the ijuestion. 
 
 .Mr. Hlakk: Of course the question might have 
 been raised by a private suitor in a cause. 
 
 Lord Wai'son : Mere the .Vttorney - (Jeneral 
 appears and submits to the jurisdiction of the Ccnirt. 
 
 Mr. Hl.AKi; : Ves; the (|uestion is as to the 
 validity of the 9th section of the Revised Statute of 
 Ontario of iSS;, chapter 124, which .\ct is entitled 
 " .\n .Act respecting Assignments and Preferences 
 by Insolvent I'ersons." The section specially before 
 your Lordships for consideration, though the line of 
 argument taken by those opposed to the .Act, and by 
 certain of the Judges below, involves the whole .Vet, 
 is the 9th, which reads thus : — 
 
 " -An assignment for the general benefit of ':redilors uruler this 
 -■Xct shall lake precedence of all jiidenienls and of all executions 
 not completely executeil by payment, subject to the lien, if 
 any, of an executitjii creditor for his costs, where there is but 
 one execution in the .SlierifT's hands, or to the lien, if any, of 
 the creditor for his costs who has the first execution in the 
 SherilT's h.ands." 
 
 The contention of the -Vttorney-Ceneral of Canada I 
 is that the whole .Act, and consequently, of course, 
 this particular section, is beyond the competence of ) 
 the Provincial Legislature, because it comes within \ 
 the class of matters enumerated in the 91st section, \ 
 entitled " Hankruptcy and Insolvency." 
 
 Now, there had been, as I have already intimated, -' 
 several prior decisions on the .Act as a whole, although 
 I am not aware that in any one of those decisions 
 this particular section had become the subject of 
 judicial decision. It had, however, become matter 
 of observation, though not of judicial decision, and 
 there has been a very great conflict of opinion. 
 
 Thk Lord Chancei.i.or : Is the only question 
 now before the Board that particular section? 
 
 Mr. Hi.AKE; The other side contend that they are 
 able to establish that the whole .Act is a Bankruptcy 
 
 I 
 
and InsolvL-ncy Act, and that even tli()ii{,di lliu 9lh 
 section with less ohjuctionalile surroundings init^hl he 
 valid, yet it falls as a part of, ami as incidental to, 
 the whole Act ; and. therefore, in that sense the 
 whole Act conies before your I<ordships. 
 
 Lord VVaison : Did the Dominion, when they 
 came into Court, raise the wider (|uesiion? The 
 matter reniitteil by the appellant, the Attorney- 
 (ieneral of Ontario, is simply that (piestion. 
 
 Mk. Bl.AKK : I do not at all deny the right 
 
 Till'. LoKi) CllANCBl.loK ; Did the (lovernnient 
 only use the rest of the Act as showing; that this 
 section being in such an Act is iillia vires'^ 
 
 Mk. Bi.AKK : \'es. I do not at all deny their right 
 to argue it, though I do not agree in the soundness 
 of the argument. I think they have a perfect right 
 to make that contention. Therefore, it is perhaps 
 .veil that your Lordships should know in advance 
 .he condition of judicial opinion, without referring to 
 the judgments ir. detail at this moment. At an early 
 stage, Chief Justice Armour held the Act within 
 I'rovincial competence. Tlien came Chief Justice 
 Calt, who was against. Then came Chief Justice 
 Ilagarty and Mr. Justice Osier, who were both 
 against. Thus there are three against. Th^n Mr. 
 Justice Patterson and Mr. Justice Hurton and Mr. 
 Justice Maclennan were in favor. Thus there have 
 been four favorable and. three adverse opinions. I 
 do not include the judgments in the .Su()reme Court 
 case to which I have referred, because I strongly 
 contend that whether that case be rightly or wrongly 
 decided it does not at all govern this one ; but, even 
 if so, the munliers of judicial opinions woidd be about 
 balanced. 
 
 Now, my Lords, the contention of tlie Province is 
 that (he 9th clau.se and the whole Act, so far as it is 
 necessary to deal with the whole Act, ari' both within 
 more than one <f the enumerations of section 92. 
 Nor do I think that, in one sense, ihis contention is 
 denied. What is contended is that they might have 
 been within section 92 but for the witlidrawal eti'ected 
 by section 91, under the heading " Bankruptcy and 
 Insolvency." We contend they are within " Pro- 
 perty and Civil Kights," ".\dministration of Justice," 
 " I'rocedure in Civil Cases," and " Local and Private 
 ^Latters. " Well, the other side contend that, although 
 but for the existence of the enumeration in section 91 
 of " Bankruptcy and Insolvency," that might l)e the 
 result, yet the sul)ject matter of the Act is by that 
 enumeration clearly withdrawn. 
 
 THK Lord CiiANi Ki.i OK : Do you dispute that if 
 within "Bankruptcy and Insolvency" it would be 
 excluded ? 
 
 Mk. BlAKK : No, my Lord. The <piestion really 
 is what " iiankrujitcy ami Insolvency" mean in the 
 B.N. A. Act That is the question with which we 
 have to deal. Now, the point is one of very 
 great practical importance. 1 here has not lieen for 
 some years, since the year iSSo, any Bankruptcy or 
 Insolvency legislaticm of the Dominion ; nor is it at 
 all likely, as far as one can see, that any such 
 legislation will soon |)ass. 
 
 LOKIi Wais<in: Has tiiere been any legislation 
 since 1867 by the Dominion Legislature ? 
 
 Mk. Bi.AKK : \'es ; if your Lor(lshi|)s wish now 
 to hear the state of things at 1867, and since 1S67, I 
 will L'ive it in a moment. Prior to 1867 -in 1864 - 
 an Insolvency Act had been passed by the Parliament 
 of the Old Province of Canada, applicable, of course, 
 only to the two present Provinces of Ontario and 
 (.)ucbec. 
 
 Lord Wa rsos : I suppose you do not disptite that, 
 so fpr as it dealt with Bankruptcy and Insolvency 
 within the meaning of section 91 of the British North 
 .\merica .Act, the Dominion Parliament alone could 
 could modify or alter that statute. 
 
 .Mk. Bi.AKK : No, my Lord, I do not dispute that. 
 The whole object of my argument will be to lind 
 what the meaninr f this statute is, and what, in 
 the absence of legislation by ihe Dominion i'arlia- 
 nient on the subject, is the meaning of the words 
 " Bankruptcy and Insolvency" in the B.N. A. .\ct. 
 
 Lord Wai'son : \'ou say there is a fringe ofcpies- 
 tions. 
 
 -Mk. Bi.AKK: Debatable ground- 
 
 LoKD Waison : Not debatable when they enter 
 and take po.ssession. 
 
 .Mk. Bi.AKK : But which may be covered by both 
 subjects. 
 
 Lord Wai.son : Which the Provincial Legislature 
 may occupy until it is sunerseded by the Parliament 
 of Canada ; and that the matters dealt with in section 
 9 are within the classes of subjects reserved to the 
 Provincial Legislature. 
 
 Mk. Bi.AKK: "Properly and Civil Rights," and 
 so forth ; even though they n\ight be found to be 
 within the power, whether strained or otherwise, of 
 the Dominion Parliament, if and when they choose 
 to exercise that power. 
 
 Lord Waison : I suppose if " Property and Civil 
 Rights " stood alone, and there was no assignment of 
 " Bankruptcy " to the Dominion Parliam-mt, probably 
 "Civil Rights" would include the powC'. to legislate 
 on the subject c)f " Bankruptcy." 
 
 Mr. Bi.AKK: That I take as axiomatic. It is to 
 my mind absolutely clear ; and d(.'cisions made by 
 this Boaril in early cases have established it. An 
 interpretation has been put on " Property and Civil 
 Rights " which makes that (|uite clear ; and I there- 
 fore lay down as axiomatic the proposition that, but 
 for the withdrawal and .save to the extent to which 
 the withdrawal operates, the Provincial Legislature 
 would have a right to legislate on thi.s topic. As I 
 was saying, the condition of things at the time of the 
 pa.ssing of this .Act was this — 
 
 LoKl; SitAND : Do you mean it would be tem- 
 porarily good, and would be destroyed if the Do- 
 ndni.)n chose to legislate on the suliject? 
 
 Mk. Bi.AKK: It wouhl be gooil as within 
 " Pr(3perty and Civil Rights." 
 
 Lord .Sham- : That is very curious. 
 
 Lord Waison : I do not know whether it is a 
 precise decision ; but with reference to the judgment 
 of this Board in Ci.'shiiii; v. Dit/^iiy it cannot be dis- 
 puted that there are some subjects that may be dealt 
 with iiy both Legislatures. 
 
 Mr. Bi.AKK : Yes. 
 
 Lord Waison : As I understand the decision 
 there, it went to this, that there may be an exercise 
 of exclusive power of legislation given to the Do- 
 minion Parliament by section 91. It may be neces- 
 sary and within their powers and authority to moilify 
 matters which fall within the province of the I'ro- 
 vincial Legislature. 
 
 Mr. Bi.AKK: Yes, that is the line of argument I 
 pro|)ose to address to your Loniships. 
 
 Lord W aison : That assumes, in the absence ol 
 legislation by the Dominion, that the rights of the 
 parties must be regulated by the Provincial Legisla- 
 ture. 
 
Mk. Hi.akk: That is to say in some ; I do not 
 say in all cases. There may lie siibjeets in which the 
 line is so sharply ami clearly drawn that it is (|iiite 
 plain the sid)jecl niiisl remain excluded from I'ro- 
 vincial jurisdiction from ihe beginnini;, though the 
 Dominion I'arliament do not choose to exercise their 
 power. Hut there is more than one sul)ject, there 
 are several subjects, in which it is impossible lo aver 
 but that the exercise of power by the Dominion 
 I'arliament is essential in order to withdraw from 
 the i'rovincial Lenislatiire some part, at any rate, of 
 the power which would fall within the range of Do- 
 minion power if it chose to act. 
 
 Tilic Lord Ciiani'KI.i.ok : The Qth section pro 
 vides as to an nssipnment for the general benefit of 
 creditors imder this .\ct. Is this referring to section 
 3, subsection i ? 
 
 .\[k. Hi.akk: No. I am afraid I shall have to 
 trouble your I.or^'ships, when 1 begin to discuss the 
 Act i'self, with the history of the legislation. It is 
 material to the truecimstruclion of the Act. Now, it 
 is desirable to know at once what the con<lition of 
 things was, at and since ("onfederatioi:. with refer- 
 ence to this matter. In 1S64 an Insolvent .Act had 
 been passed by the i'arlianicnt of the late Province 
 of Canada, which had operation in Ipper Canada, !iow 
 Ontario, generally as to both traders and non-traders, 
 and in Lower Canada, now <^>uebec, as to traders 
 only. .So far as I reinend)er, any legislation that has 
 taken place in any part of the Dominion on the sul) 
 ject of Hankruptcy and Insolvency has taken the title 
 of " Insolvency." We have not taken the title of 
 " Hankruptcy " in modern years. Thus, there was 
 no Insolvency law affecting non-traders in (^Hiebec at 
 Confederation. There was an Insolvency law affect- 
 ing traders in tjuebec, and affecting all debtors in 
 Ontario. 
 
 LoKli Waison : I suppose the same law is appli- 
 cable to .solvent as to insolvent persons. Wh'.n you 
 say no Insolvency law, you mean the law of the land 
 applied e(pially to solvent as to insolvent persons. 
 
 Mr. Hi.akk: Ves. There was no special law 
 direci.'d to the case of Insolvency. In the other two 
 I'rovincps which were conjoined under the < ' infedera- 
 tion Act, Nova Scotia and New iirunsvvick, iheiewas 
 no Insolvent or Hankrupt law. This being the con- 
 dition at Confederation, in 1S69 the Don- lion 
 Parliament passed an Insolvency law which had ap- 
 plication to traders only. In 1S75 it was repealed, 
 and a new Insolvency law pa^.sed, which also had ap- 
 plication to traders only. In iSSo, after a general 
 election, that Insolvency law was rejiealed by a great 
 majority of the I louse, and there has never since been 
 any attempt to (lass any fresh law. 
 
 Sir KniiAur) W'khstf.r : There were two small 
 amendments in between. 
 
 Mr. Hi.akk : Ves, amendments which I wasinstiu- 
 niental in jiassing, with the view of keeping the law 
 on the .Statute Hook, if ])ossible ; but since iSSo tiiere 
 has been no Insolvency law whatever, nothing at all 
 in the nature of Hankruptcy or Insolvency legislation 
 in the Dominion I'arliament ; an<l therefore we find it 
 now clearly only a potential attribute, the character 
 and extent of which is, as we contend, matter of un- 
 certainly, lo be solved in fact only by the action of the 
 Dominion Parliament. 
 
 TiiK LoRii Ch.wcki.ior ; Is the contention, on 
 the other side, that the Insolvency laws ))assed prior 
 to the Dominion Act in Ontario or in the Province 
 of Canada still exist ? 
 
 Mr. Hi AKK ; No, my Lord, because they were, in 
 efTect, repealed. When the .Act of 1.S60 (lassed, the 
 old Insolvency law was, in effect, repealed by the 
 Legislature which alone had jurisdiction to repeal it, 
 the I'arliament of Canada. That being a Hankruptcy 
 and Insolvency law, the I'rovincial Legislature did 
 not attempt to touch it : but when the Dominion 
 Parliament nciedthej, in effect, repealed that law, and 
 eniiCted a new or amended law, applicable to the 
 whole Dominion. So that there is no contention 
 between us such as might have arisen under other 
 conditions, or as to the fact that the law is exiinct. 
 There is no Insolvency law. It wouM not advance 
 the argument to enter at this moment into the clauses 
 of the legislation in (pieslion here ; but its govern- 
 ing clauses find their root as long ago as lS5,S in the 
 I'arliament of the Old Province of Canada ; the isl, 
 and, and 3rd -.eclions, which are really, as we con- 
 ceive, the governing clauses, have been law from that 
 early perio 1. 
 
 Lord Waison : That is to say, it was in force 
 before the ("onfederation Act was pas.sed. 
 
 Mr. Hi.akk : Ves ; from lS5>t not all the details 
 of this long .Act, but the provisions against fraud and 
 preference. 
 
 LoRii Wa isON : I suppose specially enacted in the 
 Statutes of Ontirio, Consolidated. 
 
 Mr. Hi akk : N'es ; only with a very considerable 
 additional amount of ancillary provision. 
 
 Lord Waison : Assuming that the Dominion 
 Parliament alone could deal with the matter, wmild 
 that constitute an invasion of their rights ? 
 
 Mr. Hi.akk : To apply the proverb, il would be like 
 1 chip in jxirridge — it wnukl do neither good nor 
 harm. If the .\ct was within the exclusive province 
 of the Dominion I'arliament, the I'rovincial Legisla- 
 ture coidi' not repeal, or amend, or re-enact it. 
 
 TiiK Lord Ciiamki.i.or : The old .Act of US5S 
 had been repealed by the Dominion Parliament. 
 
 Mr. Hi.akk ; Not the .Act of 1S5S. That has 
 never been touched ; and I draw an argument from 
 that. .An Insolvency Act was passed by the old 
 I'arliament of the Province of Canada in 1S64. Hut 
 it did not touch the .\ct of 1S5.S. The Dotviinion 
 I'arliament, in effect, repealed that Insolvency .Ad of 
 1S64, but ihey did not try to touch the .Act of 1S5S. 
 They jiassed Hankruptcy and Insolvency .Acts twice. 
 Hut they did not touch the Ad of 1S5S. l-'rom all 
 this I argue that the subject of the .\cl of 1.H5S is 
 admitted to be comprised, not within Hankiuptcy and 
 Insolveiii'v, but within " Property and Civil l<ights." 
 No harm, of course, coidd be done by a I'rovincial 
 .Ad which simply pretended to re-enact Dominion 
 legiskition. Its contintied validity would depend 
 solely on the Dominion .action. 
 
 Lord Waison: I understand there has been an 
 express repeal by the Dominion Legislature of any 
 statute touching upon Insolvency. 
 
 Mr. Hi.vkk: I think so. The Ad of 1S64 has 
 been, in effect, repealed by the Dominion Legislature. 
 I said that an Insolvency Act had lieen passed by 
 the Parliament of the Province of Canada in 1864. 
 When, in 1S69, the Dominion Parliament legislatcvl 
 for the whole Dominion in Insolvency, they, in effect, 
 repealed the prior .Act, a step which was (piite within 
 their competency. 
 
 Sir KuiiariiCoik m : The Act of iSsShas never 
 been expressly repealed. 
 
Mr. Hi.AKK : Neither expressly nor imjiliedly. 
 Not a single jiul^c liii> t'\i)resse<l a <l()iil)t that the 
 siiliject-niatter of the Act of 1858 was within the 
 jiowerofthe I'rovincial Ltt;islature ; that they wert; 
 the pioper persons to re-cnaci it, and consolidate it, 
 ami amend it. So far as that is important, there is a 
 concurrence of jiidi<ial opinion that the Act of 1S58, 
 heinj; in those respoels ui pari materia with the 13th 
 Kli/.ilieth, cap. 5, is not within " Hankruplcy and In- 
 solvency," and tiierefore is brought and remains within 
 " I'roperty and Civil I<ij;hts.'" 
 
 My Lords, before f^oin^j further, it may he worth 
 while to recall to your Lordships' attention those rules 
 of construction laid down by this Hoard upon which 
 we rely .\nd, tirst, I cite that which declares that 
 the presumption is in favor of the validity of an 
 impugned Act, as indicated in I'alin v. /.am^loii, 5 
 App. ("as., paf;e 115. Next, that which decides 
 that the Act should, if possible, if susceptible of more 
 than one construction, be so construed as to brinj; it 
 within the power of the enacting; Legislature. 
 Ainon[;st the cases which indicate the disposition of 
 this Hoard to adopt that mode of construction, I would 
 refer to Mi I. cod v. 'I'lit .Mtoriiey (ieiirra/ of Ni iv South 
 lyaift. Appeal (^ases (iSyi). That was a case deal- 
 ing with the niarriatje laws ; and a limited interpre- 
 tation was under this rule[;i\en to the words " what- 
 soever " and " wheresoever. 
 
 TiiK Lord Ciiancei.i.ok : That was a case re- 
 ferred to in the judgment 1 delivered at the commence- 
 ment of to-day's proceedinj;s. 
 
 Mk. Hr.AKK: N'es, my Lord. I will not at this 
 moment delay your Lordships by reading the pas- 
 saije ; but I argue that it does correctly propound the 
 obviously reasonable method of conslruiuL; iit res 
 maiii< ->a!oat ijuanipiioat. Then, thirdlv, the true 
 nature and characteristics of the legislation in the 
 particular instance under discussion must always he 
 determined, in order to ascertain the class of subject 
 to which it really belongs ; in other words, we must 
 ascertain what is the primary matter dealt with. This 
 is tl-e proposition laid down in Riiisell \. 'I'ke Queen ^ 
 7 .\pp. Cas., page 829. Then, fourthly, a restate 
 ment at a comparatively late period of a wise rule of 
 construction which your Lordships had occasion very 
 early to lay down, and upon which you have always 
 acted, is made in an accentuated form in 'I Iw Ban/: of 
 Toronto v. l.ambe, 12 App. Cas., page 575, where 
 the question was of legislative competence under sec- 
 tion 02. To generalize the propositions which the 
 judgment in that case applied to the particular case 
 in hand, the (piestions to be tried are, first, does the 
 subject fall within any, an<l, if any, what, class of mat- 
 ters embraced in section 92 .' Secondly, if it dois, is 
 the Court compelled by anything in section 91, or in 
 any other parts of the Act, to cut down the fidl mean- 
 ing of the words in section 92 so that they shall not 
 cover this subject ? This phrasing indicates not 
 iiierely the rule, but also the spirit in which the rule 
 is to be applied. If the subject be, as I have said, 
 within .section 92 standing by itself, is the Court 
 (ompelloii by anything in section 91 \.o <ul down I he 
 full meaning of the i^rant in set lion <pj an that it shall 
 not cover the subject ? 
 
 Then the fifth rule to which I advert is that whch 
 states that sidijects which, in one aspect and for one 
 purpose, may very properly fall within section 92 may, 
 in another aspect and for another purpose, fall within 
 section 91 \Hodi;e v. '/'he Queen, 9 App. Cas., 
 page 130). That rule, we contend, does jiractically 
 include the kernel of the pr>;sent(|uestion. Next, I ven- 
 ture to lay down another proposition, as established 
 by authorities which I will quote to your Lordships at 
 
 greater length, because, oddly e.iough, they do not 
 merely touch the general principle, but also deal with 
 thd particular subject -matter now in hand. .My proposi- 
 tion is that, even though the Dominion I'arliament might 
 by legislation passed under one or other of the heads 
 in section 91 appropriate some particular i'rovincial 
 field otherwise covered by secti(ui 92 so as to exclude 
 the I'rovince from its fuither occujiation. yet it by no 
 means follows that, in the al)sence of such Dominion 
 legislation, the I'rovincial field isto be takenaslimited 
 by 'die possible range of unexercised power by the 
 Dominion I'arliament. Theconlraryhas, infaet, been 
 held. I believe that such reconciliation as was 
 effected of the dil'ferent decisions in the case of the 
 Temperance Act was reached iqion this very basis ; 
 and I refer to /7o,/i;e v. /'//(• Queen, which I have 
 already cited ; though I do not deal at large with 
 that matter, my learned friend, Mr ILaldane, who is 
 very familiar with it from having actually partici- 
 pated in most of these cases, having undertaken to 
 expound that part of the argument. 
 
 Till'; LoiU) CuANCKl.l.dK : Was //odi;e v. Tiie 
 Queen the Temperance case ? 
 
 Mk. HlAKi; : ^■es ; and Russell v. Ihe Queen. 
 Hut I will refer your Lordshijis to the other cases 
 which to my mind establish the same proposition, 
 cases which deal with this very subhead of 
 Hankru|)tcy and Insolveticj ; and, first of all, I will 
 cite the case whiidi has been already (pioted by one of 
 your Lordships of /.' L'nion St. Jactiues de Montreal 
 V. lielisle, Law Reports, I'livy Council, page 31. 
 
 Till'; LoKli CllAMKi.i.oR ; There is one of those 
 Temperance rases which I argued, and I think there 
 was no judgment delivered, was there' Their Lord- 
 ships reported their ailvice without reasons 
 
 !\Ir. Hl.AKlc : That was a sjiecial reference, in 
 which the advice was reported without reasons. 
 There were three altoge'her, including the case to 
 which your Lordship refers ; but I may briefly state 
 one pr"posiliiin which my learned friend has under- 
 taken 10 deduce, namely, that the circumstance of 
 action by the Dominion within its potential sphere 
 does vitally affect the situation. 
 
 Lord Watson : .Ml this seems 10 me to resolve 
 itself into this propositicm, that in order to give exclu- 
 sive legislative power to \hf Dominion t iovernment 
 matters with which the I'rovincial legislation <leals 
 must be shown to be some of the enumerated matters 
 that fall within section 91. I think that that proposi- 
 tion holds good when the field is clear of legislation ; 
 I mean that when the field is occupied by the legis- 
 lation of the Dominion I'arliament, it may be that the 
 authority for such legislation extends to matters of the 
 modification of the law in tiie I'rovince modifiialions 
 of tile law as to |,roperty and civil rights, these being 
 matters with which, in the absence of legislation by 
 the Dominion, the I'rovince could properly have de dt 
 with. 
 
 Mr. Hl.AKi:: That is the line of argument I 
 intend to pursue. 
 
 Lord Waison : There is that ditt'erence between 
 the two cases. For instance, if they had established 
 a scheme for the distribution of Hankrupt Kstate^, it 
 would be (|uite within the power of ihe Dominion 
 Legislature tr) make, as ancillary to that scheme, ci r 
 tain pro.'isions which mollified the Civil Law, but it 
 couhl not be sai<l that these matters, in the absence of 
 any scheme of Hankruptcy enforced by .Statute of the 
 Dominion Parliament, were beyond the power of the 
 I'rovince under section 91. 
 
Mk. Hi.akk : (Jiiilc >(). I think the more it is 
 examined, the more it will be seen to he absolutely 
 impossible to constfie ihe H.N A. Act satisfactory')', 
 or indeed without plunt'ing inlodifliculties the extent 
 of which oi:" cannot estimate, on any other principle 
 than that. 
 
 LoRi) Wai SON ; Sir Montague .Smith, I think, in 
 the cast; of Ciishiii!; v. /ht/'iiy, made the observation 
 upon that clause as to I{ankrupt:y and Insolvency 
 that it would be impossible to take that step and 
 establish a proper scheme without doing something 
 as to civil rights. 
 
 Mk. Hi.akic : In the absence of a Dominion 
 scheme there is a valid I'rovincial title, which may be 
 cpialilied when a l)o;ninion scheme is brought into ex- 
 istence. In the case of I ' Union St./ai</ues </<: Monti tal 
 V. />('//.i/i, which is reported in 6 I'.C, page 31, there is 
 , (with res|)ecl, it may be sai<l) a very strong instance of 
 the disposition of the Hoard to view impugned i'ro- 
 vincial legislation favorably, with the desire of giving 
 it such a construction as will render it valid. 
 
 LoKI) Wai SON : I think you may assume that tht; 
 cases decided by this Hoard — it is true of a great 
 many -were decided with this view, not to express 
 any ground for judgment beyond what was necessary 
 for the decision of the case, and there is a caution 
 against treating th" subject in any other way by .Sir 
 .Montague Smith, who delivered the opinion of the 
 Hoard in Cmhiiii.'v. Ihipiiy ; and they must be taken 
 as without prejudice to any olher (piestions arising 
 between those two clauses. 
 
 Mr. Hi.akk : I can ((uile see the wisdom of deal- 
 ing with an Act of this kind on such a principle of 
 exposition ; though it may be stated that it is impor- 
 tant to look at the whole Act in coming to any de- 
 cision, yet the actual decision itself ought to be no 
 wider than the particular case requires. Htit in the 
 case I cjuote, I may fairly say that the decision, being 
 no wider than the case retpiired, was still another 
 example of the favorable method of interpretation 
 which I invoke. Hecause, what was it ? It was th.- 
 case of a charitable .Society of some kind to which 
 people subscribed, and from which they received 
 benefits under contract. The beneficiaries included 
 four widows, of whom two had accepted a C(>mpo- 
 siiion, which the other two had declined. The benefits 
 amounted to a dollar and a half a week, or seventy- 
 three dollars a year. Two of the widows declined 
 to accept two hundred dollars cash in full settlement 
 for a life annjity of .seventy-three dollars a year 
 which had been accepted by the others ; and the 
 Legislature, by an Act, the preamble of which de- 
 clared that the Society could not without ruin con- 
 tinue to pay the dollar and a half a week, forced on 
 the reluctant widows the acceptance of the two hun- 
 dred dollars, with a saving clause that, if at any time 
 the llnances of the Society recovered so that it had 
 ten thousand dollars to the good, then the widows 
 shoidd be entitled to claim a restoration of their 
 former position. That was held by this Court to iie 
 an Act to prevent the Society from going into insolv- 
 ency rather than a special Insolvency law. True, 
 the .\ct did prevent the Society from going into in- 
 solvency ; but only by forcing its creditors to accept 
 a composition of their demands. Then in deciding 
 that which it was necessary for the purposes of the case 
 to tind, even under or in connection with that favorable 
 interpretation, namely the meaning of " Hankruptcy 
 and insolvency " under section 91, the phrases used 
 are these : 
 
 " Then; is no indication in any instance " — that is to say, in 
 any instance under section 91 — '* of anything being content- 
 
 filated, except wliat inny be properly described as general legis- 
 ation, siicli legislation as is well expressed by Mr. Justice Caron 
 v.ben he speaks of the general laws goMTTiing h'aillile Hank- 
 ruptcy and Insolvency, all which are will-kiiown legal ternis 
 expressing systems of legislation with v.nich the subjects of this 
 country, and probably of most otb-r civili/ed countries, are 
 perfectly familiar. I he words describe in their known legal 
 sense provisions made by law for the administrati'm of the 
 estates of persons who may become Bankrupt or Insolvent 
 .nccording 10 rules and definitions prescribed by law, including, 
 "■■'■ourse, the conditions in which that law is to be brought into 
 opc.ation, die manner in which it is to be brought into opera- 
 tion, and the i>lTect of its operation. Well, no such genera 
 law, coveri'ig this particular association, is alleged ever to 
 have been p.tssed by the Uominioii. The hypothesis was .sug- 
 gested in argument by Mr. Benjamin, who certainly argued 
 this case with his usual ingenuity and force, of a law having 
 been pre\'iously passed by the Dominion Legislature to the 
 effect that any .association of this particular kind throughout 
 the Ilominion, on certain specified conditions assumed to be 
 exactly those which appear upon the face of the statute, should 
 thereupon, i/>so lacto, fail under the legal .administration in 
 Bankrnplcy or Insolvency, Their Lordships are by no means 
 prepared to say that if any such law as that had been passed 
 by the Dominion Legislature, it would have been beyond their 
 competency, nor that, if it had been so passed, it would have 
 been within the competency of the Provincial Legislature, 
 afterwards, to take a particular association out of the scope of 
 a general law of that kind, so competently passed by the 
 authority which had power to deal with Bankruptcy and 
 Insolvency." 
 
 LoKD Waison : That was giving effect to the 
 words " local and private." 
 
 .Mr. Hi.akk: \es, in that particular case. Hut 
 there is no magic in those words : and if it conies 
 within " Property and Civil Rights," the .same prin- 
 ciple must apply. We hold it comes within both. 
 
 LoRii Watson : I do not think the words "Civil 
 Rights '' and " Property" would havesulficed to take 
 it out of the rule. .V general rule applicable to the 
 Province on particular cases. I do not think you 
 coukl get out by allegifg the power of the Provincial 
 (Jovernment. Taking a particular branch of a .sche- 
 dule that deals with Property and Civil Rights may be 
 (|uite different when you come to the words " Hank- 
 ruptcy and Insolvency." 
 
 .Mr. Hi.akk: .My contention is that if but for 
 something in section QI "Property and Civil Rights " 
 would have covered the legislation, then this prin- 
 ciple applies just as much as it applies where the 
 legislation would, but fo. section 91, have come 
 within " local and private matters." As a fact, " lo- 
 cal and private matters " is the only subject with 
 reference to which a special limitation is affixed. 
 The judgment proceeds : 
 
 " But no such law ever has been passed ; an.l to suggest the 
 possibility Ki^ such a law as a reason why the power of the 
 Provincial Lej^islature over this local and private association 
 should be in abeyance, or altogether taken away, is to make a 
 suggestion which, if followed up to its conseiiuenccs, would go 
 very far to destroy that power in all case.s." 
 
 Lord Watson : That rather goes, to my mind, to 
 this, that if there had been a general law in those 
 terms or to the same effect, but making it applicable 
 to all individuals instead of to the exceptional cir- 
 cumstances of one individual, I do not think that 
 the law would have been laid down to the elTect that 
 the Province could have interfered. 
 
 TiiK Lord Ciianckli.or : I do not see how the 
 question, whether it affects one or more, touches such 
 a case as this. 
 
 Mr. Hi.akk; I do not myself perceive any di.»(inc- 
 tion. Acting upon that principle to which Lord 
 Watson has referred, the Privy Council first decided 
 that this was a local and private matter, and they 
 based their decision upon that heading; but the 
 principle and theory on which the decision, after plac- 
 ing the legisla;ion under its proper heading, goes is 
 
that 11 local an<l private niattor is witliin section 92, 
 and therefore within Provincial legislative j'.iiisdic- 
 tion, unless withdrawn under section 91 ; and that 
 it niintit have lieen so withdrawn had Ooniinion 
 le(;islation of a general description been enacted ; 
 hut that no such thinj; havint; taken place, it remains 
 within Provincial lei;islative jurisdiction ; and there- 
 fore I ap|)ly the decision precisely to the case in hand. 
 
 l.OKli \V.\ I SON : (his is a (general enactment. 
 
 Mk. '<'.'KK; Certainly; aiiil it is all the more im- 
 portant, ii.^.cfore, to apply that proposition. 
 
 Till'; Li>Rl> ClIANCKl.l.OK ; It is always ditlicult to 
 deal with a matter of this sort in the alistract : and 
 to take an illustration, I can ii.iat^ine a (piestion of 
 this sort; .\ scheme of liankruptcy and Insolvency, 
 the primary object of which is to provide that, if a 
 man is unable to pay his cre<litors in full, there is to 
 be a fair distiibution of his assets anionj^st them, 
 ant' then you have eni;rafted on that a numlier of 
 ancillary provisions which, no doubt, touch the pro- 
 perty. It may be — I am not evpressin^ any opinion 
 — that if you had a Hankru|)t and Insolvent law, 
 and those ancillary provisions relating' to it, the 
 matters so dealt with could not be touched by a 
 Provincial Act, vet that nevertheless, if you had no 
 Insolvency law and had not passed these ancii.ary 
 provisitxis relatinf; to it, the provisions which may be 
 natural and proper ancillary provisions to such a law- 
 may nevertheless reuiain, if you have no such law, 
 within the Provincial Legislatuie. 
 
 Mk. Hl.AKK ; \'oiir Lordship has stated precisely 
 my argument better than I could have put it. That 
 is the (ground I am endeavoring to take ; and I 
 maintain that a.iy other proposition wouhi, as your 
 Lordships will see as you go further in;o this case, 
 lead to an unheard-nl and most extraordinary conili- 
 tion of things. In fact, you would have to define the 
 extent and range of " Projierty and Civil Rights" 
 and " Local and Private .Matters,' not by the Do- 
 minion's action, but by the Dominion's inaction. N'ou 
 would have to paralyze the action of the one Legis- 
 lature without any attempt on the part of the other 
 Legislature to exercise their power — only because as 
 ancillary to .% jjossible Hankruptcy and Insolvency 
 law the Legislature might, if it pleased, do this, 
 that, or the other thing, which it is all-important 
 should be done for the good of the community, but 
 which it does not do at all, which it cc-uld not do 
 primarily, and does not do as ancillary because it has 
 not done the principal thing, namely, passed a 
 Hankruptcy or Insolvency law. The judgment pro- 
 ceeds ; 
 
 " It was siii;eesied, perh.ips not very accur.itelv, in the course 
 of t)»e argniiient, that, upon the sinie principle, no part of the 
 land in the Province, upon the sea coasts, c<3iild be dealt with, 
 because, i^y possibility, it misbt be re(|uired for a lishlhonse, 
 and an Act nuKlit be passeti l)y the Dominion I,ej;islature to 
 make a liL^hthouse there. That was not a happy illnstration, 
 becans..* the whole of the sea coast is put within the exclusive 
 cognizance of the Dominion Legislature by another .silicle; 
 but the principle o( the illustration may be transferred to 
 Article 7, which Ki\es to the Dominion the exclusive rij.'ht of 
 legislatioti as to all matters coming under the head of ' Militia, 
 Military and Na\'al Service and Defence.' " 
 
 Here your Lordships see how indefensibly con- 
 tracted would be the view taken of this decision were 
 if held to apply only the ])articular subhead to 
 matters of a local and private nature — because the 
 power of the Province to deal with the lands of the 
 Province comes under " Property and Civil Rights " ; 
 and thus the illustration of the ])ower of the Pro- 
 vince (,'iven by their Lordships in support of their 
 judgment comes under the subhead to which I have 
 adverted. 
 
 " Any p.irt of the land in llie Province of (Jueliec init;ht be 
 taken by the I Viminion I.e^islaliire for the purpose of military 
 defeni c ; afid the argument is, if pushed to its coiisetjuetMjes. 
 th.it becausr this which has not bucn done as to some particu- 
 lar land n..>;ht possibly have lit-en done ; tlicref )rc, it not having: 
 lieen done, all power over that lai'ii, ami therefore over all the 
 land in tlie Province, is taken ;iway so far as relates t*. legisla- 
 tion concerniny matters of a merely local or private nature. 
 That their Lordships think is neither a necessary or reasonable, 
 nor a just and proper construction. I'be fact lli.'it this particu- 
 lar Society appears upon the face of the l'rovinri;d .Act tu have 
 been in a state of embairassnieiit, ami in such a tinancial con- 
 dition that, Mtiless relieved by leijisl.'ition, it minht have been 
 likely to com-' to ruin, does not proie that it was, in any lej;al 
 sense, within tlie c;iteyory of insoKency. Anil, in point of 
 fact, the whole tendency of the .Act is to keep it out "t that 
 category, and not to bring it iiuo it. The .Act does not 
 terminate the company ; it does not propose the linal distribti- 
 tion of its assets, on the footing >f InsoUun^y or liankruptcy; 
 it iloes not wind it up. On the contrary, it contemi latcs lis 
 going on, and. possibly, at some future time, recovering its 
 property, and then these cretiitors, who seem on the fa* e of ibe 
 .Act to be somewhat sunnnarily interfered with, .ire to be 
 reinstated. Their Lordships are clearly of opniion ibat this is 
 not an .Act lelating to limkniptcy ami Insolvency." 
 
 The Lori-) CiiASiKi.i.dK : Which case is it you 
 are reading from ? 
 
 .Mk. Hi.AKii: /.' L^iiioii St. /ih,/ii,-s lie A/oiinntl \. 
 /ic'/is/i. Then take the nex' case, Cmhiiii; \. 
 Ihi/'iiy, 5 App. Cas. , page 409, which once again 
 indicates, to my mind, l)y the very language in 
 which It attirms the jurisdiction of the Dinmnion 
 Pailiament, the ab-olute necessity of such an inter- 
 pretation as will leave certain powers to the Pro- 
 vincial Legislature until the Dominion ParliameiU 
 does act. " It would be impo.ssible," say their 
 Lorilships, "to advance a step in the construction of 
 a .schetne for the administration of insolvent estates 
 without interfering with an<l modifying some of the 
 ordinary rights of propeity, and other civil rights." 
 
 Lord Wa i son ; That case clearly shows that this 
 right whicli is so interfered with and modilieil in the 
 course of constructing a Bankruptcy schiineniay be, 
 until the scheme is actually legislatively constructed, 
 open to alteration an.l moditica* by the Provincial 
 Legislature. 
 
 Mr Hiakh; That is >recisely my line of argii- 
 ment. It speaks of ordii ary rights of property, and 
 other civil rights. Here, at any rate, we get within 
 "property anci civil rights,''and not within "mattersof a 
 local and private natu'e"; and we get with reference 
 to property and civi' rights the atfirmance of this, 
 that the Dominion Pr.rliament cannot advance a step 
 in using the power to crea'e a Hankruptcy and In- 
 solvency scheme of legislation without touchii?g the 
 Provincial si)here, which, however, until it does 
 choose to act, remains, as we contend, intact. 
 
 LoRt) Wa'ison : That is a case which is so far an 
 authority, that it turns on these two subsections of 
 secti(m 91 and .section 92. 
 
 Mr. Hi.AKK : That is ipiite true. I hold it forti- 
 fies my view of the real meaning and force of your 
 Lordship's jirevious decision, that when we come to 
 deal with Cm/iiiii; v. Dupiiy precisely the same line 
 of argument isadopted as to "property and civil rights," 
 which was not expressly stated, but which was, as I 
 contend, inevitably implied it\ IJ Union Si. /a,,/i<es 
 de Montreal v. Belisle, to be applicable to the larger 
 as well as to the minor subject. The judgment pro- 
 ceeds : 
 
 " Nor without providing some mode of special procedure for 
 the vesting, realisation, !^nd distribution of the estate, and the 
 settlement of thi? liabilities of the insolvent. Procedure must 
 necessarily form an essential part of any law dealing with 
 Insolvency. It is, therefore, to be presumed — indeed, it is a 
 necessary implication — that the Imperial Statute, in assigning 
 to the Domini-n Parliament the sul)jects of Hankruptcy and 
 Insolvency, iiuended to confer on it lei;islative iKJwer tc inter- 
 fere with property, civil lights .->nd procedure within the 
 
J 
 
 provinces." .How far '.' " So /ii> iiv n t,'iiiim/ law rilatiug t: 
 
 Tht-y have a power to inlerfere if they chonso to 
 legislate ; Init, until tiiey do interfere hy let;ish\tint;, 
 Ihinjjs are where they were. No one can tell liefore- 
 hani! whether they will interfere at all, or what the 
 ch.iracler of ihiir inlrr'"'-. ■ may be ; and in the 
 meantime properly ami ' hts remain intact. 
 
 I, OK 1 1 Waison : T piittinj.' it too hi{;h, I 
 
 think. T'le Provincial Parliament had power to 
 establish a HanUriiplcy .scheme before the .Act. 
 
 Mk. Hi.AKK : I ajjree thai before ajiplying this 
 principle one woidd, lir.U of all, have to find out, if 
 possible, what a bankruptcy scheme is. 
 
 Tiih Lniti) CHANC'KI.I.OR : A scheme of distribu- 
 tion amoij'f^st creditors of the property of a person 
 who could not pay his debts as they feli due It is 
 not necessary for your proposi'ion tocontest that. 
 
 Mk. I5I-AKK: Not at all— at least I do not think 
 so— but I su);(jest these additions — cajxible of enforce- 
 ment at the instance of the creditors, and to be fol- 
 lowed (Ml conditions by the discharj;e of the debtor 
 from his liabilities. If we add these, as I conceive, 
 material elements, then, if we must make a defini- 
 tion of Mankru|)lcy and Insolvency on some jjeneral 
 principle, they would lead to a conclusion satisfactory 
 to my ii'ind. 
 
 TllK I.OKI) (""AN; i-.i.l.OK : Then you would not 
 contend that if it was actually the creation of a 
 liankniplcy Law ? 
 
 Mk. Hl.AKl', : .\s I have just now attempted to de- 
 fine it. 
 
 Tiir. I.oKi) CiiAN'cici.i.oR : Whatever is the 
 proper definition of a Kankru|itcy Law, you would not 
 dis])utethat althoiij;h the Dominion had not dealt with 
 it the Province could not. 
 
 Mr. I'i.akf. : I -vould not. 
 
 Lord Waison : I did not suppose you would carry 
 it so far. 
 
 Mr. Bi.akk ; Not at all. 
 
 LoKi) Watson : Although 'here is an exclusive 
 right of legislation given by section 91 on this matter 
 to the Dominion, yet there are rights in th.e Province 
 which the introduction of a scheme of bankruptcy 
 would, to some extent, displace. 
 
 Mk. Hi.akk : Ves. 
 
 Lord Wa tson : And considerably modify. 
 
 Mr. Hi.akk, : Yes. 
 
 Lord Watson : So far as they are merely modify- 
 ing the Civil Law for the purpose of introducing it 
 in the Province, they are touching on matters wiih 
 which the Province may ileal in the absence of legis- 
 lation. 
 
 Mr. Hi.ake: Ves. Then the third case to which 
 I would refer at this stage is Thr Citizt'iis^ /jiu/'anir 
 Com/><i/iy V. Parsons, 7 App. Cas. , |)age 96, in which 
 thetpiestion under coi.sideration was thaiof the regula- 
 tion of trade and commerce ; and I refer to it for the 
 purpose of reading these words : 
 
 " Their horilstiips alislain on the present orcaslon frnni any 
 attempt to define tlie limits of the aiuhnrity of the Dominion 
 Parliament in this direction " (in the direction of rcmilatini; 
 trade and coinmercel. "It is enough for the decision of the 
 present else to say that, in their view, itsanlhorily to legislate 
 for the regulation of trade and commerce does not comprehend 
 the power to regulate hy legislation the contractsof a particular 
 business or trade, such as the business of pre insuranc in a 
 single Province, and, therefore, that its legislative .'.ulhiiity 
 does not, in the present case, conflict or compete with the 
 power over property and civil rights assigned to the Legislature 
 
 of Ontario by No. i ^ of section 9i. Having taken this view of 
 the present case, it becomes unnecess.-iry ti>c.>nsitler theiiuet.tinn 
 how far the general power to make regulations of trade and 
 commerce, when competently exercised by the I >omiiiion I'arlia- 
 iTient, might legally modify or alTect proj'erty or civil rights in 
 the Provinces, or the legislative power of the Provincial Legis- 
 latures in relation to those subjects." 
 
 There you see advanced the proposition which 
 Lord Watson suggested. It is plainly implied that a 
 competent exercise of the power to regulate trade 
 and ciunmerce by the Dominion Parliament might 
 modify or affect the power to deal with property and 
 civil rights, which until that com|>etent exercise had 
 taken |)lace wiiuUl remain in the hands of the Pro- 
 vincial Legislature. That is our line. 
 
 " Questions <if this kind, it niay be observed, arose and were 
 treated liv this lli^ard in ihtr cases of /.'Union St. Jai-qiHs tit 
 Monttcal v. Ih'tixk and Cushitit^ v. Pit/>ny." 
 
 .So that you get the assertion of that proposition 
 coupled with an indication of the view of the Hoard 
 at that time of the nature of the ilecisions in those 
 two cases. 
 
 Lord Waison : On the whole, it w.nild be more 
 difficul' to define what is meant by trade and com- 
 merce than to ile*lne what is meant by HankruiJtcy 
 and Insolvency. 
 
 Mr. Hi.ake : Perhaps so. But your Lordships 
 will have to consider what has been meant in times 
 past by Bankruptcy and Insolvency. There was a 
 time when a Bankruptcy .\cl was enacted in order 
 that corporal ])unishnient might be administered to 
 the bankrupt. There have been all sorts of pro- 
 visions made at different times; and one does not 
 know how f^. the law may extend. '' Bankruptcy 
 and Insolve' cy " can, in truth, hardly be, in strictness, 
 denned except by the action of the Legislature which 
 is to deal with the subjects ; and you must look ;o 
 the statute for the legal definition of the relation 
 which is to create P.ankruptcy or Insolvency ; and to 
 ascertain how extensive and thorough, or how partial 
 and ineffective, may be the sy;;teni which is the cre- 
 ation of that statute. 
 
 The Lord Chancellor : So far as they would 
 touch property and civil rights, is it not the essence 
 of Bankruptcy and Insolvency, as understood in 1867 
 at all events, that it should ])rovide for the administra- 
 tion of the estate of the insolvent person, and the 
 distribution of his assets among his creditors? 
 
 Mr Blake : If I were called on to make a defini- 
 tion of a .system of Bankruptcy and Insolvency, I 
 sho'.'.ld say that not merely then for the first lime, 
 but for a long time previously, the fundamental view 
 had been that, morally, the property of a man who 
 I, ad become unable to pay his debts in full wasa fund 
 for the payment of his creditors as far as it would go, 
 and ought to be divided ratably and proportionately 
 between them 
 
 The Lord Chancellor : Whether they pro- 
 jioseil to divide it ratably or give a preference — we 
 shall .see presently whether other elements are in- 
 volved, too — was not that element necessarily involved 
 in the cimception of Bankruptcy and Insolvency in 
 the year 1867 ? 
 
 Mr. Blake : I think it was involved in the con- 
 ception of Bankruptcy and Insolvency ; but I do 
 not think it was limited to that conception. I think, 
 intlependently of that conception. Common Law 
 and common sen.se would rather have indicated, 
 a) ,irt from Bankruptcy law altogether, the notion 
 of a ratable antj equal d^stribulioQ as one that was 
 to l;e favored. ' 
 
10 
 
 Lord VVaison : I do not know that wc arc doal- 
 ing with technical terms. Hankruplcy, to my mind — 
 I may he quite wrong rather suggests the condition 
 of an insolvent wlio has licen declared i)y law to he 
 hankrupt. 
 
 TUF. LoRl. CllANCKl.l OR ; Formerly, in Knglish 
 law, the distinction was that Bankruptcy was the case 
 of a trader, and Insolvency the case of a non-trader. 
 
 Mr. Hi.ake : Of course. 
 
 Lord Watson : Insolvency means that a person 
 cannot pay his dehts. 
 
 The Lord Chancki.i.ok : A law relating to in- 
 solvency was a law relating to dislriliution among the 
 creditors of an estati. of an insolvent person. 
 
 Lord Wai so.\ : And as everyhody's private affairs 
 are not open to all the world, and the state of his 
 money matters, one of the first essentials of all 
 Bankruptcy law is to lay down a te.;t of Bankruptcy 
 or Insolvency to enahle his creditors to proceed 
 against him as if he were in that condition, without 
 necessarily making themselves actpiainted with his 
 affairs, or having an accountant in to discover whether 
 he can pay. There are certain tests which the law 
 accepts as evidence for the time heing of Ins.j'vency 
 or Bankruptcy. 
 
 Mr. Bi.AKi; : They are purely conventional con- 
 ditions. They .ire terms which the law for the time 
 heing .sets up as tests. 
 
 Thk Lord Chancei.i.or : It seiMiis to me that 
 there is very little necessarily included in the ideu of 
 Bankruptcy or Insolvency. The law in different 
 countries may impose conditions and insert provisions 
 for the protection of creditors, hut none of them can 
 he said to he of the essence of Bankruptcy or Insolv- 
 ency law. I think it always was simply provided 
 that if a man could not pay his dehts, his estate 
 should at the application of a creditor l)e vested in 
 an official whose husiness it should he to distrihute it. 
 If there was nothing else hut that, that would he a 
 Bankruptcy law. 
 
 Mr. Blake : It would, I suppose. 
 
 Lord \Va Ison : A just distrihution of the whole 
 of the i)ankrupt's and insolvent's estate amongst his 
 lawful creditors according to their rights and prefer- 
 ences. 
 
 The' Lord Ciia.ncki.i.ok : If not a just dislriliu- 
 tion, it would he still hankruptcy. Any legislation 
 which said that, on a person heing unahle to pay his 
 dehts, the Court would provide or the law ■. ould 
 proviile hy some order of (."ourt or otherwise for the 
 distrihution of his property would he a Bankruptcy 
 law or Insolvent law as understood in 1867, if there 
 was nothing heyond that. I think, taken with that, 
 if the Court took from him the distrihution of his 
 property, there should he no right to sue him for the 
 deht from that moment. 
 
 Mk. Bi.AKE : N'our Lordship has interposed with 
 the ohservation I was going to make as a suggested 
 addition to the essential elements, if one were called 
 on to make the definition. It would then he a 
 scheme for getting hold of the assets of the dehtor 
 and dividing them according to law or the legal de- 
 mands of justice hetween his creditors — a scheme of 
 which, it may he, the dehtor would he entitled to avail 
 himself voluntarily, hut of which the ci?dilors cer 
 tainly ought to he entitled to avail themselves hy 
 putting the dehtor in iin'itiim into Bankruptcy or In- 
 solvency — a scheme which, as your Lordship has 
 said, taking out of his hands the administration of 
 his assets, should upon conditions of honesty, provi- 
 dence, and so forth, upon conditions varied from 
 
 lime to lime as experience should indicate, relieve 
 him from Hal ility to he sued for any halances re- 
 maining after that administration. Now, it is quite 
 clear that, supposing you lay that down, you must 
 leave to the sense of the Legislatineat the moment of 
 legislative action the definition of what should he 
 presumed to lie the essential elements of hankruplcy. 
 Nor ilo we in this definition emhrace any of the 
 .minor details and the numerous conditions on which 
 credilors would he entitled to intervene, or dehtors to 
 he discharged. 
 
 The Lord Chancei.i.or; With reference to 
 fraudulent preference, which is a common adjunct to 
 ^ianuiiiptcy law, that is ohviously not an essential 
 part. 
 
 Mr. Bl.AKi; : ()iiite so; nor anything that is in 
 f'ari iiititeria with the .Statule of Kli/aheth. Th.'.t has 
 heen the holding with reference to ,he earlier sections 
 of this Act, that it is not Bankrupl.-y ox Insolvency 
 at all. There are innumerahle details as to the con- 
 ditions on which the law should he invoked. 
 
 The Lord Chancellor : Reputed ownershiii, 
 for example. 
 
 Mk. Blake; \'es ; and the conditions on which 
 discharge should he allowed ; the circumstances 
 under which a creditor should he perinitled to jiro- 
 ceed; the priorities of creditors; the rights as hetween 
 creditors and purcha.sers or transferees — all these 
 questions interfering with property and civil rights 
 remain ahsolutely unsettled. One does not know 
 how far the Legislature may go, or in what direc- 
 tion. 
 
 Lord Waison : .Supposing there had heen a 
 scheme of Bankruptcy enacted liy the Legislature of 
 the Dciniinion, hut it had merely gone the length of 
 (lirecling in what circumstances B.ankruptcy proceed- 
 ings should issue, and f.ir adjudication, and then mak- 
 ing •|>rovisions for getting in the estate and the ap- 
 pointment of a trustee, and had simply directed that 
 the estate should he distrihuted according to law as 
 to their respective rights and preferences, would 
 that have ousted the power and authority of the 
 Provincial Legislature to direct what their preferences 
 /«/('»■ se w<nild he? 
 
 Mr. Blaki". ; Far from it; I think that would 
 rather have imposed a duty of action on the Provin- 
 cial Legisla'ure. 
 
 Loud Waison : They have this suhject in their 
 hand, and an enactinent in these terms would not 
 imply ihat the law as to preferences hetween dehtors 
 should not he disturhed or should remain undisturhed 
 in the case of credilors of insolvents, hut should he 
 altered so far in the case of cre^'ilors who were not 
 credilors of in.solvents. It would he very inconveni- 
 ent. 
 
 Mr. Blake: The .scheme of th-i B.N.A. Act is 
 rather to leave with the Provinces everything that, at 
 any rate, would come v/ithin procedure. 
 
 Lord Waison ; A creditor might find himself in 
 this position, that the ''rovincial Ix'gislature was only 
 entitled to deal with the law allecting preferences of 
 credilors so far as related to creditors of solvent 
 persons. The creditor might find himself in this 
 predicament, that he was suliject lo one law of pre- 
 ference so long as his dehtor was insolvent, and suh- 
 ject to another law whenever the dehtor liecame 
 hankrupt. 
 
 Mr. Blake ; .My impression is that with reference 
 to everything which would, even on a larger inter- 
 pretation of the word, come within " procedure," it 
 
11 
 
 woiilil be more consonant with tlic true theory of the 
 li.N.A. Act to leave that to ihc Provincial Legisla- 
 ture, to which is given an csclusive power to deal 
 with proccdare in civil matters. 
 
 Lord Waiscin : On the other ham', I rather think 
 it has lieen suggested more than once, and generally 
 accepted, tiiat the intention was to leave to the Do- 
 minion the power to make provisions in bankruptcy 
 which would extend to the whole country. 
 
 Mr. Ki.akk: Certainly. 
 
 Lord Waison : To put creditors indifierent I'ro- 
 vinces in precisely the same position as regards the 
 dealing with an insolvent estate. 
 
 .Mr. H, AKK : By all means. 
 
 Till-: LoRli CllANCKI.l.nK : \<m could not in a 
 scheme by means of separate I'rovincial legislation 
 as to property and civil rights put them in the same 
 jiosilion, because under exactly similar circumstances 
 there might be a right which would have to be recog- 
 nized in the Hankru|)tc)- Court in the one Province 
 which would not be recognized in the other. 
 
 Mk. Ulakj-. : There is no doubt about that at all. 
 Then there seems to me to i)e this observation, wliii h, 
 perhaps, has hardly received suliicient attention 
 
 Lord Waison: I suppose in certain circumstances 
 they might forfeit a right in such a way that when 
 bankruptcy supervened there would bo no claim 
 against the debtor. 
 
 .Mr. lil.AKK : They might destroy the right of the 
 creditor or the right under a contract. That would 
 be only dealing under I'rovincial law with property 
 and civil rights. Lven if the I'rovincial Legislature 
 might not have the right to discuss the assets of the 
 insolvent, yet 1 venture to suggest that the intention 
 was to allow matters of jirocedure to be dealt with by 
 the I'rovincial Legislature, and that when the Domin- 
 ion Parliament does deal with Civil, as contradistin- 
 guished from Criminal, matters the intention rather 
 was that it should make the fundamental provisions 
 establishing the right.. ; and I hat the remainder as part 
 of "The .Vdministration of Justice, including [iroce- 
 dure in Civil Cases," should stay with the Province— 
 
 Lord Wai.son : I feel the force of your argument 
 and it gets rid (>f (piestions which ucight be very dilll- 
 cult. \ our argument I miderstaiid to be this : Un- 
 til there is legislation, you are not to assume that 
 Bankruptcy legislation ought to or will include the 
 regulation of the rights cil creditors iii/,r ii\ They 
 may leave that to the ("onimon Law, and if it was 
 left to the Common Law that would not prevent the 
 Provincial Legislature (torn altering the Connnon 
 Law of the Province. But another (piestion 
 might arise if the Dominion Legislature were to 
 enact a Bankru|>lcy law not conlining itself in the 
 way I have indicated, but were to goon lo make pro- 
 visions for the preference of creditors in the bank- 
 ruptcy ; but until it has done that there is nothing to 
 warn the I'rovincial Legislature off the field. 
 
 Mr. Bi.akk: Ves, my Lord. And another and 
 difficult ipiestion might arise as to the jirecise range 
 of the res|)eclive powers, and a further (|uestion might 
 arise when there had been but a partial exercise of 
 the |)ower. 
 
 Lord Wai son : Then the matter for consideration, 
 if they were .so to legislate, would be whether the 
 ])ower was really incidental to the construction of a 
 Bankruptcy scheme. 
 
 Mr. Bi.AKK: Precisely. 
 
 Lord Waison : There may be a considerable dis- 
 tinction between what is necessary to the idea of the 
 Bankruptcy scheme and what may be incidental. 
 
 Mr. Bi.AKK : No doubt, and that is a part of the 
 argument that seems to me to be invincible. 
 
 Lord Wai SON : With a Bankruptcy .scheme it must 
 always be open to the Legislature charged with the en- 
 actment of that scheme to consider how much they 
 leave to the Common Law and leave to the Provin- 
 cial Lei'islature. 
 
 Mr. Bi.AKK: \'es, perhaps within limits; and 
 gianting all that, which is the most favorable inter- 
 [.retation that can be suggested for the powers of the 
 Dominion I'arliament- -the largest interpretation you 
 can give — 
 
 Lord Wa'I'son : I do not express any opinion on 
 that. 
 
 Mr. Bi.AKK: I say so because it leaves open lo 
 them, at any time, the assertion of their extreme 
 rights. 
 
 Lord Waison : In other words, you put it that 
 till the power is exercised the strictest limit must be 
 assumeil. 
 
 Mr. Bi.AKK: Ves. Take the absolute essentials 
 until such time as they choose to act ; and when they 
 choose to act they can, unembarrassed by ar • prior 
 decision of any Court, assert the proposition that, 
 though such and such are the only absolute essentials 
 — are Insolvency and nothing el.se -yet, naturally and 
 reasonably, for the purpose of unift)rmity and conveni- 
 ence, and so forth, they have a right to go a great 
 deal further, and may |)rovide for various details, thus 
 putting in abeyance Provincial legislation which in 
 the meantime was operative. That is a convenient 
 construction. It leaves most at large, and it does 
 least harm. At present the Dominion are acting a 
 little like the <log in the manger ; they will not act 
 themselves They w ill not take the food ; nor do they 
 |)ropose to allow that it shall be obtained by anybody 
 else. And thai attitude is assumed, it is to be ob- 
 served, under a constitution which gives two other 
 methods of obviating dithculty. The first is a power 
 of disallowance of any .\ct of this kind. If it hap- 
 pened that the Dominion, having determined upon 
 adopting the policy of Bankruptcy and Insolvency 
 laws for themselves, found the Provincial Legislature 
 enacting laws which they thought trespassed on what 
 should lie the reasonalile provisions of a Bankru|)tcy 
 and Insolvency law, which it wiuld be within the 
 power of the Dominion to enact, but which would be 
 contrary to the policy the Dominion Legislature 
 thought ought to pievail, they could disallow the law 
 and so prevent its coming into force. But, if they did 
 not think lit to do so at that time, then, on the theory 
 I am now suggesting of an elastic interpretation of 
 Bankruptcy and Insolvency, they could at any time 
 they chose to intervene, by negative or afhrmative 
 legislaiive provisions, prescribe the object and con- 
 ditions of a Bankruptcy and Insolvency law, and so, 
 if thought fit, put in abeyance the I'rovincial legisla- 
 tion which up to that time h id been in force. Now, 
 I desire to place before your Lordships tw<> alterna- 
 tives as to ihe meaning of " Bankruptcy and Insol- 
 vency." The lirst, that it is ab.solutely elastic and in- 
 definite ; thai these are relations which require to be 
 defined and regulated by the law itself, and of which, 
 unless and until defined and regulated, it is impossible 
 to anticii)ate the definition by antecedent judicial in- 
 terpretation. .And that, I think, is consistent with the 
 exposition of L'lrd Selborne where he s|ieaks of "cer- 
 tain well-known relations," because iii that exposition, 
 
12 
 
 when liL- j^ets a lilllc further (iii, lie speaks of those re- 
 lations as existent "acconiinj; to detinitions prescribed 
 by law, inclii(lin(; the conditions on wiiich the law- 
 is to be broiifjht into o|ieralion"; and therefore the law 
 really is t(. [irescribe what its own nature and extent 
 shall be. Jf you take " Hankrup.cy and Insolvency" 
 to he that, you merely say it is insusceplib. ■ of deli- 
 nition in any sense which entitles you to withdraw 
 froni " Property and Civil Kij^hts" any particular con- 
 dition or relation unless and until the concrete case has 
 arisen and Dominion legislation has taken place. 
 That is the lirst alternative. lf,on the other hand, the 
 view alrea<ly hinted at in the course of my arymnent l)e 
 ado|>ted,aiKl you say we cannot yive a complete dellni- 
 tion of what Bankruptcy and Insolvency may possibly 
 mean, because it may mean a ijreat deal or it may 
 mean a very little ; l)Ut there is, upon tiie last analysis, 
 p residuum, an essential and vital element which you 
 can, as a lejjal propo Ition, affirm and deline, and that 
 element is thus and so ; then, no dotd)t, you {;et by 
 Construction a s'lort and sharp line, beyond which 
 lino, even in the absence of Dominion let^islation, 
 the Local l,ej;islalure cannot pass uniler " Property 
 and Civil Rij;hts." Well, what is this essential resi- 
 duuu', this vital element .■■ Who is to lay it down ? 
 Are you to take what is sugj;ested as a definition by 
 Lord .Selborne, that it is certain well-know princi- 
 ples of law, known not merely to British subjects, but 
 t( most civilized countries? Is it to be the law of 
 I'Jigland, or the law of Scotland, or the law of Ire- 
 land, or the law of the I'nited Kingdom, as i! stood 
 in 1S67, or the law of Nova Scotia, or New Bnms- 
 wick. where there were none, or that of Lower Canada, 
 wliere it was limited, or that of Upper Canada, where 
 it was more extended .•■ These are some of the diffi- 
 culties in which one is plunt;ed w hen one attempts the 
 task. But I do not at all dissent hom what I under- 
 stood to be thesut;j;eslion of your Lordship as to what 
 must be reckoned essential elements- 
 
 L<>Kl) Wai'SoN: Do yo\i say the words " Bank- 
 ru[)tcy and Insolvency" refer to some local condition 
 — local statutes ? 
 
 .Mr. Bl.AKi; : To some local condition to be cre- 
 ate<l by law. 
 
 Lord Waison : In the case of a person who can- 
 not apparently pay his ilebts? 
 
 Mr. Bt.AKIc : And until so crea ed absolutely vaf^ue 
 and indeU'rminate ; but if not absolutely vai;ue and 
 indeterminate, then, t;oinj^ as far ai- you can go in the 
 absence of such a law, coniprisinj;, and for the mo- 
 ment limited to, certain essential elements. And the 
 advantage of this view is this, that once we have got 
 these essential elements we can look at once to the 
 statute under consideration and see whether it com- 
 prises them ; and so decide the (juestion of jurisdic- 
 tion. 
 
 I (iRt) Waison : Sujiposing they pass an enact- 
 ment treating him in an exceptional way --call him 
 what you like, bankrupt or insolvent — I suppose you 
 wo'dd say then, so long as he is not left a free agent 
 to make assignments, if he pleases, of the whole of his 
 estate, and, therefore, to pass by competing creditors, 
 it is immaterial, and the law lays its hand on him and 
 on his estate, anil says, " \"(>u shall not touch that ; it 
 shall be divided by somebody else am mgst your 
 creditors," and that at once gives him the status. 
 
 TiiK Lord Chancki.i.or : Is there any system of 
 Bankruptcy or Insolvency that you know of in which 
 the element does not exist of the man's disposal of his 
 property being prevented, and his coming under some 
 legal control as to the administration of it ? 
 
 Mr. Bi.aki;: I do n'ot think so. No As to In- 
 s ilvencv as distinguisheil from Bankruptcy, prior to 
 Lord Westbury's .\ct InsolvenL-y law was (oundedon 
 another principle altogether. I understand the old 
 Insolvency law was a irjasure of relief to the debtor, 
 and in mitigp.ion of il.c rigor of imprisonment for 
 debt he -..as conmiilled lo gaol, but was allowed to 
 gel out. 
 
 Louti .M AiSAci I KN : On making an assignment. 
 
 Mr. Bi.akk : Ves. 
 
 TllK Lord (^iiancei i.or : Then it was essential 
 to take fr(jm him his property. 
 
 Mu. Bl.AKi; : Necessarily. 
 
 Till', Loud Ciiancki,i.<ir ; And to have it admin- 
 istered. 
 
 Mr. Bl.AKl';: lie was in the gaol, llis l)o<ly was 
 there as satisfaction to the creditor, lie could make 
 an ap]ilicalion to the Court on disclosing all hispiop- 
 erty, on which application, aftei certain |)rocecdings, 
 he coidd obtain relief and get out of gaol. That was 
 the old Insolvency law. In lS()l the distinction be- 
 tween Bankruptcy and Insolvency was abolished. 
 
 TllK Lord (' ham i;i i.or : Is there in any country 
 a system of Bankruptcy and Insolvency in which the 
 tying a man's hands as to a free distribution of his 
 pro|)erty and compelling the distribution of his prop- 
 erty in a i)articular way has not been the essential 
 element ? 
 
 Mr. Bi.AKE : Not in modern times at all. 
 
 Till', Lord Ciianckm.or : What we have to deal 
 with is 1S67. \'ou cannot, ■iii\c'; 1S67, point to any 
 system of Bankruiitcy and 'In-i(;!vency where that was 
 not an essential element, whatever else there may 
 have been. 
 
 Mr. Bi.akk: No; I opened this second alterna- 
 tive will) the view of presenting to your Lordships the 
 two elements which 1 thought should be regaided as 
 essential in 1JS67. first, that there should be a pro- 
 cedure for a discussion of the estate for the benefit of 
 creditors, and in support of the moral duty of an 
 insolvent lo see that his property should go to jiay 
 his debts ratably, and therefore a procedure com- 
 pellable by cre(lli('rs ; secondly, that there should be 
 a procedure for tile relief of the debtor who, at any 
 rate incidentally roid as conseipient upon the taking 
 of his property out of his hands, should, in a proper 
 case and on proper conditions, be entitled, having 
 given up all, to get some relief from his debts. 
 
 TllK Lord Ciiancki.i.or : I am not f|tiite so sure 
 about the second as being essential. (Jf cour.se, you 
 could not let him be sued while the Court was 
 administering his proi-erty. \'ou could not let that 
 property, lo be rataoly distributed, be seized by a 
 particular creditor, whether a creditor at the time or 
 a subse(|uent creditor ; but I am not sure it would be 
 essential to the idea of Bankruptcy or Insolvency that 
 you should liberate him from his debts. 
 
 Mu. Bi.akk : If you take the status of the law in 
 1807, which is, I think, the test your Lordshif) was 
 applying, this certainly was part of tiie then law, and 
 was thought to be a tight. I do not say an absolute and 
 unrestricted right, because if the man was dishonest 
 or profligate, or diil not make a proper disclosure, or 
 was careless and imprudent, or did not pay a certain 
 dividend, he might not be entitled to the relief. 
 
 TnK Lord Cii.v.scei.i.or : Inasmuch as there 
 were restrictions on discharge, those restrictions, one 
 can conceive being largely increased, .so that you 
 could say a man would not be absolutely discharged 
 
13 
 
 till he hail paid 20 per cent, in the pound. I am not 
 'lite so sure about that as about the first. 
 Mk. lil.AKi;: Very well, uiy Lord; for me, the 
 fir-i! is erioU(.»h. I su(;^est the two elements, however, 
 cpiite admittini; that as to the discharge the various 
 enactments have shown from the liej,'uiniiit; that it 
 was not reijarded by the Lej^islature as a neeessary 
 and unrestricted rijjht, conseciuential upon the credit- 
 ors asserting; their claim to lake his (iroperty, that 
 the debtor slioidd be released. 
 
 l.oKli Wai so\ : Is it not always implied in the 
 word-- '■ Uaiikruptcy and Insolvency'' that you are to 
 put an end, and. the law steps in to put anend, to the 
 debtor's rijjht to deal witli the estate in creating; 
 preference amongst the creditors ? 
 
 TliK LoKD Cm AMKl.l.OK : And to pm anend to 
 the creditors' power to ^ct hold of tile estate, but not 
 necessarily to the creditors' rij;hl to force relief aj;ainst 
 the debtor in any other way than by i^ettinj; part of 
 his e-tate. I do not, ai the present moment, see that 
 it is essential to this care whether there is a second 
 element. 
 
 Mk. Hi.akk : I do not thinU it is. ( )ne does not 
 like to part with the second string to one's bow. 
 Hut I ([uite aj^ree that for the purpose of my case the 
 lirst element is adequate. l!ver since the time of 
 (,)ueen .\nne, the principle of discharj^e has been 
 recoijnized in all Haid<ruptcy .Vets ; and thouj;h it is 
 sai<l in some of the jud(;menls to be nio'iern, yet I 
 have heard lately of things beinj; lhoui;ht to be "as 
 dead asi,)ueen .\nne," and beinj; proved very ancient 
 and extinct, indeed, by thai comparison. 
 
 Now, my Lords, if either one ol those |)rovisioiis is 
 admitted to be an essential element of Hankriiptcy or 
 Insolvency, then not merely the ninth clause, but the 
 whole .-Vet is not an Insolvency law ; for I think it 
 may be laid down without doubt or dispute, lirst, 
 that this Act does not i;ive to the creilitors any rif;ht 
 whatever to i;el hold in any way of the assets of the 
 debtor or to put the law into operation ; and, secondly, 
 that it jjives no rii;ht to the debtor to obtain relief or 
 a <iischart.;e. Whatever may be said allirmalively of 
 the Act, I think it may be said nei;atively that it 
 comprises neither of these two provisions; and not 
 comprising eiiher of those two provisions, we tind 
 excluded the essential characteristics or characteristic 
 of " Hankruplcy and Insolvency.'" Tlerefore, my 
 argument i?> that, while it is (piile possible, as shown 
 by the cases to which I have referred, that the 
 Diminion may at sometime so act as to sujiersede, 
 in part, this legislation, and to appropriate, in [lart, 
 this field ; while it may make a very wide or a very 
 narrow law ; while it may deal with ancillary pro- 
 visions to a large or to a limited extent ; whiliMt may 
 take up ihe ([uestion of proced.ure very extensively, 
 or not at all, it leaves open, in the meantime, that 
 doubtful and debatable groun<l ; and the Court will 
 not pronounce in favor of the abstraction from the 
 Provincial Legislature of its power until there has 
 been an assumption by the other Legislature of the 
 right to legislate. 
 
 TllK LoKi) C"llAN<lu.l.OK : Do you say an assign- 
 ment which a man ch.rjoses to make, but is under no 
 obligation to make to a trustee, for the beneht of the 
 whole of his creditors, does not differ from an assign- 
 ment he might make for the benefit of one or two 
 creditors? 
 
 Mr. Hi.akic : II does not at all differ. These 
 assignments have been more favoied, as being that 
 reasonable and moral thing which a debtor ought to 
 do, than assignments for particular creditors ; but 
 they derive their force from no law or notion of 
 
 liankriiptcy or Insolvency in the legal sense, but from 
 the Common Law and the recognition of their natural 
 
 justice. 
 
 TllK LoKi) ("iiANCKi i.OK : It obtains what force 
 it has simply by the act of the p-rson who makes the 
 assignment, although there is no other conveyance or 
 deed of transfer. 
 
 M k. HiAKK, : Certainly. In the absence of any 
 restraining law, he might assign for the benefit of any 
 one or more creditors. When he assigns for all, he 
 does the thing which morally he ought to do ; ami such 
 assignments have always been looked upon with more 
 favor by judges than the others ; but the right is an 
 old Common Law right, and does not depend on any 
 special legislation whatever. 
 
 Then, my Lords, before I turn to the history of the 
 legislation, I wish to make one other illustrative com- 
 l)arison, and that is with the article of "The Criminal 
 Law," because it alfirds a very plain example of the 
 sort of " in-and-out "' construction which I propose 
 should be applied. Vou might, perhaps, construe 
 " The Criminal Law," as embraced in clause oi, as 
 being the general body of Criminal law which had 
 prevailed in the Dominion, or the general (ommon 
 and Statutory ('timinal law of the L'niled Kingdom ; 
 or you might construe it to include a i)Ower to make 
 new Criminal laws, and by the repeal of -xisting 
 Criminal laws to remove from the category of the 
 Criminal law particular .Acts which, up io that lime, 
 had been within it. The more indetinile and elastic 
 conslruclion is that which has been universally adopted 
 in the Dominion ; that this is a power -though I can 
 suggest cases in which there might be an atrocious 
 strain of that power -cases in which, perhaps, judicial 
 interference might be invoked —yet this is a power, 
 with regard, at any rate, to any subject on which 
 there is a reasonable pretence for action, to create a 
 crime out of that subject, and so to bring it wiihin 
 the Dominion power liom that tin.e ; to make a new 
 crime, as lor instance, in the case of certain otVence.s 
 against women which have been made crimes within 
 the past few years. Till that time, those Acts might 
 have been prohil)iied by a Provincial law with a penal 
 sanction up to imprisonment with hard labor for life ~ 
 the second severest punishment known to Hrilish law. 
 The moment the Dominion Parliament said that the 
 particular .\ct which we will assume li.id been pro- 
 hibited I'y Provincial law with a penalty v^.is a crime, 
 and gave another method of punishiiient, 1 apprehend 
 that law would, at any rate, be valid, and it would 
 probably su|)ersede the Provincial law, and thus the 
 area of " The Criminal Law" would be enlarged, 
 and that of " Property and Civil Rights" invaded, if 
 not restricted. .So, again, you might take Acts cuit 
 of the category of the Criminal law, as has, in fact, 
 been done. When Confederalicui passed, certain laws 
 based on old liritish laws with reference to contracts 
 of service made some breaches o( contract of service 
 criminal ; but about 1S76 it was fell that those 
 iireaches of contracts of service really were civil 
 wrongs only, and ought noi any longer to retain the 
 attribute of criminality. What the Dominion Parlia- 
 ment did was to repeal those laws and make a new 
 law- -a new an<l limited Dominion law. What 
 was the result? The breaches ceased to be crimes. 
 What followed as the avowed intention ? That they 
 fell within the denomination of civil wrongs; that the 
 area of " Property and Civil Rights" as a Piovincial 
 subject became enlarged ; and that an unchallengeable 
 power arose in the Provincial Legislature to pass laws 
 prohibiting those breaches of contracts of service, and 
 affixing a |)enaltyloa violation of the law. I'hus by my 
 
14 
 
 plan you get the most convenient method of carryini; 
 out the great objects of the Consliliuional Act. 
 
 Now 1 come, at last, lo the history of this legisla- 
 tion ; and if your l.onlships turn to the coninicnce- 
 ment of tlie print I will go through it, siiowing, as 
 r'uiilly as I can, how things went on. As 1 have 
 said, the really essential parts of this Act — the funda- 
 mental parts in regard to which all the rest may he 
 said to b- simply perfi-ctive and ancillary — were the 
 inclusion of what is to he found in the 22nd Xii'toria, 
 cap. 5, passed in the year 1S5S. What is the 
 title of thai Act ? It is "An Act for abolishing ar- 
 rest in civil actions in certain cases, and for the 
 hetler prevention and more effectual punishment of 
 fraud." Now, that .\ct was parsed by the late I'ro- 
 vincial Legislatuie ; but though it legislated for the 
 two parts of the United Province of Canada, the Act 
 applied only to L'ppi.-r Can: now < )ntario. Why? 
 Hecause, as your I.ordship- ..low, the l.owei Canada, 
 or l^>iiebec, law wa> different from the Oiilario law ; 
 and practically in this case it differed because there had 
 always been in the Civil Code of Lower Canada 
 provisions under which an execution eitureil for the 
 benellt, nol only .)f the single creditor who p., I in the 
 execution, bul of all other creditors who might put 
 in their claims. The property seized was discusseil, 
 anil the proceeds were applied ratably. That being 
 the law ir. (^)uebec, so far as concerned executions, it 
 did not recpiire improvement. Then, what happened 
 in Cpper Canada miller this law? The lirsl section 
 printed here, the iStli of the Act, deals practically 
 with executions. It provides : 
 
 " Every cciiifrs-.ivjn," aiul sii on, " liy any pfrson, liv;iiic, 
 It ihe time, in insolvent circunist:>ni:es, ur iin.-iljle to pay 
 hi^ ilelils in full, or kn-'uinu liinisell lo lie on the eve ol in- 
 Milvency wiili Intent to .Ule.ii or ililay i.reilitor>, wholly or in 
 p.irt, or with iiueiil iherel > of jjivini; one or more nf tlie 
 creditor'^ a preferein' over oihrr erediior-, or over any one 
 or II. ore of such i:re< Mrs, shall lie invalid and iiiulTei:tu.d to 
 support .uiy judumeiu ■ writ of exeuulioii ; and every such con- 
 fession," and so on, " ^ ' he deemed and taken lo he null and 
 viiid .r. an.unsi ihecredi if the party (juim; the same In all 
 
 intents anil pui poses wlia; ver. 
 
 Well, that is really in large pan the Statute of 
 |-',li/abelli. .\nd as lo .section 19 : 
 
 •■ II any person, heini;, at ilie time, in insolvent circumstances, or 
 un.ililetopaj liisdehtsin lull, or knowini; himself to he on the eve 
 of insolvency shall make, or cause lo lie made, any «ifl, convey- 
 .uice. assi;;nmcni, or transfer, if any, of his ijooits. chattels, or 
 effects, or dehver or make oxer ;iny hills, honds, notes, .ir other 
 seciirilie- or properly, with inlenl lodefeal or ilelay the creditors 
 ol such person. ,ir with inlenl of >;iviny one or more of the 
 creditors of such person a preference over his other creditors, 
 or over any one or more of such creditors, every such j»ift, con- 
 \eyaiice, a^sinnment, transfer, or delivery, shall he deemed and 
 taken to he ahsohltely null and voitl," etc. 
 
 What is done wiih reference to an assignment for 
 the benellt of all credilors ? There is a proviso in the 
 nature of a saving clause only ; 
 
 ■■ Provided alwaysihat nothins; lieiein contained shall he held or 
 construed to imalidale or make \oid any iWt-d of as.iyipnenl 
 in.ide or e\ei uled l)y any dehlor lor the puri.nse.if payiim and 
 salisfyiuK ralahly anil proporlionahly, and without preference 
 or priority, all the credilors of such dehior their just dehts." 
 
 TllK I.OKii Cham Ki.l.oR : That simply leaves it 
 alone. 
 
 Mr. Hi aki: : Leaves it alone; and it is simply 
 left alone still today. That provision is carried 
 through down to the Act which is impugned. So 
 that you gel these two simple proposilioiis : a propo- 
 sition as to executions, ami a pn position as to trans- 
 aclioiis made with intent to delay, defeat or prefer, 
 declaring lliein lo be null and void against credilors 
 if maile in parlicular circiimslanees. 
 
 LoKi) Waisdn : Practically what has been done 
 by the clause complained of is that the Provincial 
 
 Legislature has stepped in and said that when such a 
 deed as is excepted by the proviso has been executed, 
 it shall take ellect against execution creditors. 
 
 Mk. Hi.akk : N'es ; but your Lordship has not yet 
 been made aware, because I have not come to it yet, 
 what alterations had previously been made in the law 
 as to execution credilors. I must come to that some- 
 what later on .Vs I have urgeil, and as it has been 
 universally held by the judges who have discussed the 
 subject, this legislation was validly at'lirmed b> the 
 Provincial Legislature which allirmed it, and would 
 have been valid original Provincial legislation after 
 Confederation as being within " Property and Civil 
 Rights," and tit f'aii i:iti/eii(i with the .Statute of 
 l)li/abeth. That is the line of argument which we 
 talve, and which is supported by a consensus of 
 judicial opinion. 
 
 LoKli Waison: It was -.aved liy the Confedera- 
 tion .\cl. 
 
 .Mn. Hi.akk : .Ml prior Provincial legislation was 
 sa\eil for all purposes; but the power to touch such 
 legislation rested after Confederation exclusively with 
 the l.egislaliire within whose dominion the subject 
 passed. .And what 1 am submitting is that a dealing 
 with that pre-ConfeiU alior .\ct would have fallen 
 exclusively within the iroviiuial power. In |iart, it 
 is a reproduclion of ihe .Statute of I"li/abelh. In 
 one element it is more comprehensive, because it 
 extends to preferences. In anolhifr it is nominally 
 more limited, l.'i'cause it is cotdined expressly to 
 persons either in insolvent circumstances or unable 
 to pay their debts in full, or knowing themselves to 
 be on the eve of insolvency. Hut, in Iruth, the 
 mischief of the Statute of I'.lizabeth was practically 
 limited to cases of that class. Nobody asked for an 
 order to get back some property that had been 
 abstracted through a traiisaclion void under the 
 .Statute of Llizabeth if there was plenly of other 
 jiropeity left to pay all the debts. I' was only when, 
 iirespective of the transaction, or conseipient upon it, 
 there ensued a deticiency of assets for the payment 
 of the debts that the Statute of f.li/abeth had any 
 practical or actual opeiation at all. It was only 
 where there was not enough property left for the 
 payment of the debts that the Statute was usehil. 
 If a man had /, 100,000. and liabilities of /,20,ooo, 
 and made, to defeat or delay credilors, a Conveyance 
 of /, io,coo, of course no tpiestion arose; there was 
 no necessity for impugning ihe transaction. That 
 observation has acijuireii additional force from the 
 remark of Lord Tenlerden in S/ii<ii:< v. A'<'i,'j'; y, 
 3 H. i.\; .\., 1). 360, in which he points out that there 
 is high authorily for the view that llie .Staluie of 
 Klizabeth was limited lo that class of case. II we 
 jiaiise for a moment al the Act of if-'sS, ihe right of 
 the credilors, as .iscertained by judicial decisions in 
 the Province, and, as \ apprehend, in consonance 
 with the Liiglish law, wmild be lliat an execition 
 creditor might either for himself or lui behalf of all 
 the body of execution creililors proceed to avoid the 
 transaction, and so discuss ihe assets; and that the 
 credilor in a proper case, even where the debt had 
 not matured, and so he was unable to get judgment, 
 might take soii.e proceeding for such conservatory 
 process as an iiijiniction. There are circumstances in 
 whicli the creditor can take the benefit of il.r Slattile 
 of I'.lizabeth in respect of a debt, without having 
 obtained execution ; not the whole benelit, perhaps, 
 but, at any rale, such benelit as will result in the 
 asset remaining available till the execution has been 
 obtained. Who can doubt, then, that it would be 
 legislation ancillary lo and perfective of that passed in 
 1S5S if we were lo provide ihat the credilor should 
 

 1.'. 
 
 lie tiililUil t(i aviiid and discuss for the Iit'iiclil i>f all 
 williiMii havinj; j;()l oxcciilion ? N'oii have a law 
 iiiidcr «hich, applying,' tlu' |irinci|ilL' of action cstali- 
 lislu-d for the Statute of llli/alntli, an execution 
 creditor can, either for himself or on liehalf of himself 
 and others, proceed lo avoid and discuss. N'ou have 
 a law under which, applying; the ;.anie principle of 
 a<Mion, he can, even thoufjh not yet an execution 
 creditor, do certain things towards avoidance and dis- 
 cussion. It woulil he perfective of such legislation, 
 ancillary to such legislation, propetly lielongini; to 
 such lei,'islation, to provide, if the l.ei^islature so 
 pleaseil, that any creditor should Ik; entitled to ,iv(ii<l 
 and discuss on behalf of the whole body wit'iou". any 
 execiiiion. It nii};ht he as nnller of law convenient 
 or inconvenient, good or had policy, hut these would 
 he (piestions of policy inseparably connected with the 
 principal .\cl, arul to be decideil by the Legislature 
 whi^.h had dominion over its subject. 
 
 l.OKji Waiso.s : r thought, in Ijigland as well as 
 other countries, the original early legislation was all 
 to the effect of declaring nullities, and that certain 
 acts on the part of the person imder certain circuni- 
 stances amount t<i fraud, and to set them aside. 
 '1 he idea of attaching the estate and distributing it 
 among creditors is much more recent. 
 
 Mk. I'.i.aki;: That is (juile true. Taking the Act 
 of the IJlh l-;ii/abeth, at that time there was no such 
 idea. Kach creditor came in as he pleased and 
 fought for his own hand ; avoiiled the fraudulent trans- 
 fer and seized the asset umler his writ ; but I maintain 
 it was reasonably part of an extension and perfection of 
 such legislation to provide ni.achinery by which a 
 creditor might have relief without execution on 
 behalf of himself and all other creditors, or that any 
 creditor might step in and take the benefit of pending 
 proceedings. Then, again, if you go a step fmther, 
 who can iloubt that it would be competent to the 
 ^•anie Legislature, and germane to, fairly belonging to, 
 the same subject, to provi<le that a trustee for all the 
 creditors under a debtor's assignment shoidd so 
 directly repre:<ent the body of cieditors as that he 
 could on their behalf avoid and discuss. 
 
 TllK LoKl) CllAMKl l.oi; : All that you ileal with 
 there is one partiddar asset that somebody has seized, 
 and you make that transaction in relation to that 
 particular asset void. Wnx ma)- do that, as it strikes 
 me at the moment, without an;, law, I5ankruptcy and 
 Insolvency law, and you might have a liankriiptcy 
 and Insolvency law which wnuld n..t do it. 
 
 Mk. lil.AKl'. : Certainly ; but I go this niiuh far- 
 ther, that to provide the machinery for further facili- 
 ties for the execution of your law, either by allowing 
 the creditor to avoid and discus> without the seal 
 and mark of an execution, or by allowing a 
 trustee appointed by the debtor for the payment of 
 his creditors t represent the creditors directly, and 
 on their behalf to avoid and discuss, would be as 
 clearly within the competence of the Legislature as 
 the previous provision. 
 
 Till-, LoKi> CilANCKl.l.OK : Take the illustratitm 
 you gave of what was done in the I'rench Province. 
 That was allowed when the execulit)n and the other 
 creditors came in and interfered, but nobody would 
 call that liankruptcy anil Insolvency. 
 
 Mk. Hi.AKK: No. Then if I get thus far, that 
 such a law as that of lS5Sis rec<ignized as Provincial ; 
 that assignments for the benefit of all creditors are 
 recognized as valid ; that provision under which a 
 creiliior with execution, and to a certain extent a 
 creditor without execution, can avail himsielf of the 
 
 law is recognize<l as I'rovincial ; and that it is ad- 
 mitted to be within I'rnvincial competence to pro- 
 vide that without execution all creditors or assignees 
 for the benefit of all creditors may avail themselves 
 fully of that law, I turn lo section 9, and I encpiire 
 what section 9 does. .\nd the answer is, that is 
 exactly what .-.ection 9 does. .MI that section 9 
 does is to say that this transfer which is void as 
 against creditors may be declared to be void as 
 against them at the instance of the assignee for their 
 benefit. Thisthrows light on the characterof the legis- 
 lation and brings it within the local purview ; be- 
 caus" I advance with confidence the view that within 
 the local purview must be the conditions on which, 
 the (orui in which, the ciethorl bv whicli, the extent 
 to which the rights of creditor.; shall be asserted. 
 They are all " |iroperty aiul civil rights." Having 
 declared certain classes of •r.''nsaclions voi<l as against 
 creditors, all the rest, all that is done by section 9, 
 is mere machii.ery to ma) ■ that declaration effect- 
 i'e. It is now suggested, on the other side, to be an 
 extraordinary thing that t!ie debtor and the assignor 
 should be able to defeat his own deed by a subse- 
 ipient deed, and that the claimant thereunder should 
 be able to assert higher rights than his assignor. In 
 the sense in which it is called extraordinary, this is 
 not in the least an argument against u--. It is not a 
 reason for bringing the subject within either Domin- 
 ion or I'rovincial legislation. It is irrelevant. Hut 
 the proposition is no more extraordinary than the 
 27lh Klizabelh, under which a grantor by a volun- 
 tary Afei] could by his own subse<|uent deed for value 
 oust ihat deed, and, in effect, make a title in a subse- 
 ipient grantee; and this, being a reasonable jirovision 
 and an efTeclive way of accomplishing the object, is 
 within the competence of the Legislature. It is ('« />(;/■; 
 w<!A/7'(/ with the .Statute of Klizabeth, and with the 
 I'rovincial .Statute on which it is based. 
 
 .My Lords, that I'rovincial Statute was consolidated 
 in 1859: p.i.^e 4 of lhe)>rint shows the consolidation ; 
 and it is important to repeal the observation in this 
 connection, that being on the Statute Hook of the old 
 Province of ("anida from before 1S59, in 1864 the 
 Province passed the Insolvent Act, which was appli- 
 cable lo traders only in Lower Canada, and in Ujiper 
 Canada to all T.iat .\ct remained in force for those 
 three years, biit though during the existence of these 
 Insolvent Acts this .\ct of iS^S was naturally less 
 used, because there were many conditions in which the 
 Insolvent Act i)racticall) superseded it, yet it was 
 never repealed, but re.nained in existence. Nobody 
 ever supposed it was repealed or modified or changed 
 impliedly, as it ceriaiidy was not expressly, by the 
 Insolvent Act. There it stood on its own merits ; 
 and that also forms a mark of acknowledged distinc- 
 tion from Insolvency and liankiuptcy legislation. 
 
 Till'. Lciui) Cii \N'(i:i,l,')K : There is a passage in 
 a work on Bankruptcy which I have herewhich makes 
 this statement as to what the old law was in Hank- 
 ruptc) : 
 
 " 'riif jnii^;iii tioii in Itatikruptcy has .lutliorily t<i deal widi 
 tli.'ll \\lii''li is llie !*;nikriipt's I'lst.-xlc. wtiere.-is il li.'i* tio power 
 lo (letcrinirie u'fiat is tljt* Hauliriipl's Kstate. If ifie (piesiion 
 is a lt:i;;il one, it must l)e tried at law, if efiuital)Ip, in tlie Court 
 of Cliancery.'' 
 
 So that they reganled the Court of liankruptcy as a 
 mere distributing Court of what was the bankrupt's 
 estate, but the law decided what was the bankrupt's 
 estate, so that the making things part of the b.-.nk- 
 rupt's estate which were not at ("omnion Law part of 
 his estate was a mere later development of the Bank- 
 ruptcy law. 
 
Id 
 
 Mk. lil.AKK : \t's. Anil th-.Tf was tlu' crtMlinn 
 nfltTwaids (if a |ii)Wor to transfer from the orilinary 
 ('(Hirts lo till' Hankniiilcy Court the trial of those 
 i|iicstioii~ It rt'(|iiireil an e\|iress statute to do tliat, 
 when it was (oiind more convenient to consolidate the 
 whole administration of the estate ; liut up to that 
 time the ordinary law was liroii|;lit into operation to 
 determine what was the lianUuipt's estate. \ow, in 
 |S()4, an Insolvent Act was passed l)y the same I'ro- 
 vini'ial Parliament which had passed the Act of 1S5S. 
 The two Acts existed on the Statute Hook l(>j,'( ther. 
 The Insohent Act was not thoujjht lo supersede the 
 other, an<l thoii^li the other was less usetl during the 
 existence of the Insolvent Act, yet it mij^ht have been 
 used, and in fact was used, from time to time, and 
 of course it came into very powerful operatior. after 
 the Insolvent Act was ultimately repealed. 
 
 Now, when the Dominiim I'.irliament passed its 
 Insolvent Act in lS6t), .iiid when later it jiasscil its 
 Act of if-^S, and later amended that Act twice, it 
 never attempted to interfere with the Act of 1858, 
 which, on the hypothesis or some of the hypotheses 
 presented in this case, would have been a Dominion 
 Act. It stands imder any circumstances. And what 
 I want your I/jrdship-i to consider, secondly, is that in 
 dis|nitaljle propo-^ition that sections I, 2, an.! 3 of the 
 .Act in ipiestion stand. They are law — 
 
 I.oKii \V.\ isdN ; I'ntil made the law of the Pro- 
 vince liy the Imperial .\ct of iSfi/. 
 
 Mu. Hl.\Ki;': I am referriii^^ to the reproductions 
 of sections iS and 19 of the old .\ct of 185S. They 
 are, in one sense, made the law of the Province ; they 
 are the law applicable to the Province. 
 
 I, OK 11 W.MsoN : That doe.s not aftlrni their char- 
 acter, because these mi^ht be laws which only the 
 Dominion would meddle with. 
 
 Mk. Hi..\KK : Doubtless, liul what I am sayin« 
 is that whether you determine that they are laws 
 that the Dominion only could meddle with, or laws 
 that the Province mi^ht meddle v ith, they are on the 
 Statute Hook, because the Domini m has not meddled 
 with them, and the Local Legislature has only 
 amended them, leaving; their substance untouched, as 
 I shall point out. What the Local Legislature has 
 done is, in cases of doubt — if this were a case of 
 doulil -deserviii)^ of some attention ; what the Local 
 Lej;islature has done repeatedly and without objec- 
 tion by the Dominion Legislature, and what the Do- 
 minion Legislature has alislained from <loin^, luay 
 lie looked at. I have referred to what the Dominion 
 Leirislature abstained from doini;when it did interfere 
 in Hankru|itcy and In.solvency. They did not touch 
 the law. What the Local Leijislalure did was lo 
 re-enaci in consolidation an<l to revise and amend this 
 law. There are, I think, as many asei^hl local .Vets of 
 Parliament touchiri); this lej^islalion. In 1S77, in the 
 ]irint at liat^e 5 ; in 1.884, at pafj;e 7 ; in 18S7, at ]>a)je 
 7 ; in l88(), at pa^je 13, and in i8()o al the same 
 Iiai,'e, will be found local let;islation dealinj; with this 
 law. 
 
 Loi;i> Waison: Cons<ilidalion ? 
 
 Mk. Hixki'. : Some revision, some consolidation, 
 some amendment. Then, aj^ain, in 1S91 and 1892. 
 
 LoKti W.MsciN : The Consolidated Statntes of the 
 Province are dateil 1887, with suhsetpient modill- 
 cations, 
 
 Mk. Hi.aki; : Yes. Now, what .conditions had 
 supervenei', and how was it that the Local Lej^isla- 
 ture came to act at all in this connection ? It was 
 because of the repeal of the Insolvency lej^islation 
 which, in one foim or another, had been in force from 
 
 1864 to l87<). It was repealed, and very jjreat evils 
 followed ; a ^ameof^rab was played, in the way of 
 individual creditors grasping |iroperty, obtaining; pre- 
 ferential conveyances, obtaining chattel mort(;a(;es, 
 obtaining; assiijnments, producinf; une(|ual distribu- 
 tion, which bore very hardly, indeed, on foreign credit- 
 ors, and interfered with the ^'en.'ral credit and in- 
 terests of the country. A learned judi;e, .Mr. Justice 
 lohii Wilson, in his judgment in the case of (rofticdZ/s 
 V. MiilhoUiiiiti, after the repialofilie Insolvency .Act, 
 sui;t;ested very strongly thai some of the most |iressinj; 
 evils to whic' 1 ha' e referre<l could be militated by 
 tlie adoption by the Local Lej;islature of the (Quebec 
 system as far as it \.enl. That s',ij;(;estion was made 
 in 1870 ; and in the year 1880 was jiassed (your 
 Lordships will find il at iiage 17 ofthe print) an .Vet 
 which permanently modified the rights of execution 
 creditors. And it wa^; in that view that I ventured lo 
 say to my Lonl Watson, a while ajjo, that we had bet- 
 ter ascertain what were the rijjhts of e\ecMti( 11 credit- 
 ors in l8.'7 before deciding how far their position 
 was modified by the lei^islation under consideration. 
 I refer your Lordshijis to the .\ct c died "The("redit- 
 ors' Relief .Act,"' jiassed in 1880, and appearintj as 
 the Revised Statute of Ontario of 1887, which has 
 been law since 1880, substantially in its present form. 
 I do not think I need trouble your Lordships with a 
 detailed reference. I may say, shortly, that the effect 
 was that where an execution went into the sheriff's 
 hands, either creditors or juds.;n\ent creditors were 
 entitled to take certain proceediiij^s, the details of 
 which are ijiven at f^reat length in the .Act, which en- 
 abled them to become claimants on the discussable 
 estate of the debtor throu(»h the sheriff under any one 
 execution, the execution thus operatinj; as an attach- 
 ment for the benelil ofall who chose to come in, and 
 effecting;, not a iireferential, but a ratable and pro- 
 portionate disiiibution ofthe e.xifjible assets anion};st 
 all the creditors of llu' debtor. 
 
 SiK RlillAKt) Wi:1!sii-:k : Judgment creditors. 
 
 Mk. lil.AKI';: Not jiid!.;menl creditors exclusively, 
 or even mainly. Certificates were obtainable by 
 creditors under proceihire ])rescribe.l by the .\ct. 
 Instead of suinj;, you presented a claim liefore an 
 oflicer, and the other side had a notice, ami had 
 power to contest ; but if they di<l not contest after a 
 certain short interval, then the oflicer gave you a 
 certificate. 
 
 LoKli Waison : The first attachment operateil for 
 the benefit ofall who chose to come in. 
 
 Mk. Hl.AKK: And it was no lonjjer necessary to 
 sue in the ordinary sense. 
 
 LoKl) WAlsdN : That provision wi.uld apply lo 
 solvent as well as insolvent. 
 
 Mk. Hl.AKK: N'es. 
 
 L(iKi> Waison : Il inip;ht be more useful in one 
 case than the other. 
 
 Mk. Hl.AKK: Probably. It would have its prac- 
 lical operalion, just as the .Stalute of Klizabelh had its 
 practical operation, when there was a deficiency. If 
 there was enough for all, il w-ould not be material in 
 any case, and the remedy was, as I have said, ijiven 
 upon and in consetpience of the abolition of the In- 
 solvent Act. 
 
 TlIK LoKl) C^IIAMKl.I.OK : It is an exceplioiuil 
 case where a man lets an execution he levied when he 
 is solvent. 
 
 Mk. Hi.akI': : It is lie may, perhajis, if he knows 
 himself to be on the eve of insolvency. 
 
l: 
 
 \ 
 
 TllK LoKl) Cll AN( Kl.l.OK : There are some excep- 
 li(ins, l)\it it is the exception rather than the rule. 
 
 Mk. Hi.AKK: There are some cases reported of 
 solvent Imt eccentric persons who ne\er \ny except 
 under execution. 
 
 Till-; LoKli C'llAM ici.i.dK : I think they .'re the 
 exception. 
 
 Mk. Hiaki; : I hopi- s,^. Thus your Lordships Cind 
 that, since the year iSSo, there li.is lieen on tlu' 
 .Statute Hook a law whi( h, in efi'ict, aliolislie': piiority 
 .inioiifjst execution creilitor-., rU merely amongst 
 themselves, liul as between themselves and other 
 creditors ; l)ec:uise it gives to all creditors the rii;ht to 
 avail themselves of the circimistance that any one 
 creditor has issued an executioi\ aim it provides for 
 the discussion of the assets in favor of all those 
 creditors. That was a very important improvcuieiil ; 
 hut it dealt with only one element of the matter, the 
 assetsexijjihle under execution ; it did not in terms deal 
 withor advance the avoidanceof preferential orfraucUi- 
 lent a'-sinnments. They were left as they stood, and 
 the old law and remedie.-. applied ; ln,t when they 
 applied, I api'iehend they would, under the operation 
 of the new law, have applied for the lienelil of all. 
 
 Then it was found that some of the evils of prefer- 
 ence continued, and that the defects of the law of I SSo 
 were serious Seven years elapsed after the passai^e 
 of the Act in iS.So, under which the relief provided 
 hy the Civil Code of (Quebec had been ^;iven to On- 
 tario, anil in 1SS7 was passed the .\cl which is 
 specially imder consideiation here, and which is set 
 out at page 7 of ll.e print. The lirst section of that 
 .■\ct is ecpiivalent to the lirst poition of the iSth .sec- 
 tion of the original .\cl of 1S38. The 2nd section of 
 that Act is e(|uivalent to the first portion of the 19th 
 section of the .-XclofiSiS. The jrd section of that .\cl 
 is the latter ))art of the njlh section of the .\ct of 
 1S5S, that part which prevents a prior assignment 
 form being invalidate<l. lUil, my Lords, strange to 
 say. so far from that being an extensi(m of the .\ct of 
 1858, it is a restriction ; for whereas the .Act of 1858, 
 n its proviso, simply said that nothing in the section 
 shoidd render invalid any assignment made [or the 
 purpose of payment of creditors ratably and proportion- 
 ally, this section says that nothing in the section shall 
 apply toany assignment madefor that purposetocertain 
 specified i)ersons. The assignment must be made to 
 a sheritf of the county, or an assignee resident within 
 the Province, with the con.senl of the creditors, in 
 order that whatever benetits are derivable from the 
 restrictive or saving clause shall apiily. That is im- 
 portant in order that your Lordships may see that 
 the Legislature were doing nothing more than the .Vet 
 of lS5,S (irovided, but were doing, if anything, some- 
 thing rather less : for, whereas the exception in the 
 .\<t of 1858 was general as to all assigmnents of a 
 certain char.uier, to whomsoever maile, the exception 
 now in existence is limited to assignments of that 
 charactei when made to s|)ecitied (lersons, either the 
 sheriff or the assignee, with the consent of the credit- 
 ors. That being uiiderstooii, what remains.^ Icon- 
 tend before your Lordships that all the remaining 
 sections of this .\cl, and notably section 9, are simply 
 ancillary provisions, carrying om and eflecluating the 
 operation of these lirst three sections, which are, as I 
 have shown, sections i8and l<) of the original .-Vet. 
 
 LoKi> WaI'scin : I should think it woidd be ad- 
 mitted that if the Provincial Parliament had power 
 to (leal with and modify these sections of the .\ct of 
 tSsS, it would be diliicult to maintain that they had 
 not power to enact section 9. The argument against 
 you, I should think, must be that there was no power 
 to enact those sections. 
 
 Mk HiakK: Vour Lordship will have observed 
 that I laid considerable stress (jn the fact that they 
 had power to make hese modilicalions, and that this 
 was competent Provincial legislation. I have not, 
 indeed, slate<l that argument as fully as I ndghl, be- 
 cause it appears that the consensus of judicial ()i)inion 
 and the argtmients up to this Jlate have been on the 
 line that these two sections are within the Provincial 
 |)ower. 
 
 Titi'. Li>kii Cham kiihk : It is quite clear, if you 
 look at the laiglish law, Irom the earliest limes till 
 <|uite recently, that you might have an assignment for 
 the general benetit of creditors (]uite independent of 
 bankrui'tcy. 
 
 Mk. Hiaki;: Certainly. There is ncr ipiestion 
 about that. 
 
 LoKli .M AiAAc.ll I I.N : Those assignments were 
 made Acts of Bankruptcy by .vets of Parliament. 
 
 Mk. Hi.AKK: Nes. 
 
 Ldkii .Macnacii I kn : .-^nd made .\cts of liank- 
 rujitcy because they put the prciperty in a ditlerent 
 course of distribution to what Hankruiitcy law directs, 
 and supposing they tof)k it out of IJankrupicy : that 
 is why it was made an .Vet of liankruptcy. 
 
 Mk. Hi. auk : The Legislature saiil, first of all, 
 that it was evi.ience of a condition of liankruptcy — 
 
 LdKli Ma( SAHHiKN : Intended or having the 
 effect of delaying creditors, becaii.se they tonk it out 
 of the owner's hands to pay his debts. 
 
 Mk. Hi.AKK; .And they conceived that the general 
 public interests were best served by providing that 
 persons in such a condition that they were obliged to 
 make an assigmnent should make it in the form the 
 law had recognized, so that the asse's might be ''is- 
 cussed and administered under one general law. 
 
 LoKli M AC N.\i;ii I KN : They ha(l declared in ex- 
 press terms that tht'Se particular assignments were 
 acts of bankruptcy. It re(|uired a statute to make 
 it. 
 
 Mk. Hi.xKIC ; V'es. 
 
 Till-: LdKli Cman<ki.i iiR : Where you have no 
 Hankruptcy system, it could not be an act of bank- 
 ruptcy. It would be amereCommon I.awassignment; 
 and all that section i) iloes is to say that this Common 
 Law assignment shall not have a certain precedence. 
 That is all. 
 
 Mk. iSl.AKK : That is all. If one looks compre- 
 hensively at the Act, it is clear, tirst, thai, the .Vet not 
 validating or creating this assignment, il must de|)end 
 for its elticacy in the general l:iw ; and, next, that 
 all that is done is to give conveniences for the elVec- 
 tuation of the purposes of the assignment. Hy the 
 2nd subsection it is pr<>vided that 
 
 " Kvt-iy assiL;nnient ft)r the i;eneral i'elietu of rrt'ditors. wMch 
 is not voiil under seition 2 ot" this .\ct. I>ut is nut nt.ide t'> itie 
 sherifT, nor to any otiier person with the prest rilieti onsent of 
 LTeditor^, shall lie \oitl as a;;aii|st a subseijuent assisninent 
 whicli is in conformity vvjth itiis .Act.' 
 
 That is not now material. 
 
 LoKii Waisiin : What I am pointing to is thi?. 
 I do not know that this is necessary for your case, 
 and I need not .say more than this, that it is open to 
 discussion whether section 19 of the .Vet of the lt)lh 
 .Vtigust, 185S — taking thai section- is or is not 
 
 gislation in Insolvency : " If any jierson being at 
 I lie time in insolvent circunistances, or unable to [lay 
 his debts in full, or, knowing himself to be on the 
 eve of insolvency, shall make," and so on. If that is 
 legislation in Insolvency within the iiienning of sec- 
 tion 91, then there was no power in the Legislature of 
 
IH 
 
 Oiilario ti) ni.idify (ir .liter thai cLiitse. They can 
 ciiiisciliilali.' il, anil taki'all tlie usual iirocoediii^js ; hut 
 if it is k'nislal'iiii in Iin.olviMicy ami with ri.-latii)ii to 
 Insolvency within the nieai.inj; of Ktction f)i, they 
 woulil have no |i.)Wer to alter it. Supposiiij; that is 
 so, the (|uestio'i would still remain, hut the case 
 \i()id(l oe clearer in fav'or of si.'ction () of the .\ct in 
 question liefore ns if that w.is not Insolvency lej;isla- 
 tioH, hut it i- liy no UR.ins oxiiaustivo of the rij;ht ol 
 (he I'rovince to enact section 19. 
 
 Mu. HtAKK ; No, liecaiise al! that the I'rovince 
 lias ilone is this. What have they done as Id 19 — 
 
 I.iiM) Waison : U looks very much like Insol- 
 vency le^islati'in- section 19 of the .\ct of 185S. 
 
 .Msi. Hl.AKi; ; What have they done about il ? 
 Wni must consider the particular thin^ they have 
 done — 
 
 LoKii Waison ; Th.u was pan of the statiile law 
 of KS67. 
 
 Mn. Hl.AKK ; Doubtless. 
 
 I.oKli Waison : I understand tiiat in Lower 
 Canada, which had been the Province of (.lanada from 
 1S40 to 1SO7, it was altered in that lespect by the 
 introiiuclion of the ("ode. The Code was enacted in 
 Lower Canada in 1S66, before the .\ct of iSb; pissed; 
 but there are provisions in the .Act, it may be — I 
 rather think there are -however, there mi^ht be pro- 
 visions in the statute law of I'pper Canada, or Ontario, 
 wii'i which the Provincial Legislature had no power 
 to deal, but only the Parliament of Canada. 
 
 .Mr. IjI.akk : Doubtless. I ipiite concede that. 
 
 LoKD Watson : I do not think you outjht to 
 assume that section 19 of that .\ct of 1S58 was not 
 legislation in Insolvenc). It jirofesscs to l)e so. 
 
 Mk. Hlakk: Well, Ido not know — 
 
 LORl> Waison : That depends upon the orijjinal 
 point you have discussed. 
 
 .Mk. Hi.a.K: On the nieaninjj of "Insolvency," 
 and on lej,'isla,l(m with reference to persons being 
 either in or on ; e eve of insolvency ; that is to say, 
 <i /ij'/cit/ir.ii, not actually in insolvency, but only on 
 the brink. 
 
 l.oKii Waison : It occurred to me at the time you 
 v\ere arfjuinj,' that hrst point that another view inif^ht 
 be that the .Act of 1867 was framed in view of the 
 law theneMstinj; in the I'rovince, and it mijjht not 
 be an unreasonable readinj; of the .Statute to think 
 that they had in view noi only what mi^jht be done, 
 but what had already been done by express legisla- 
 tion. That rather lies outside this, because, assuming 
 that ihis had been Insolvency legislation within the 
 <'onlemplalion o( the .\ct of 1867, that legisl lion did 
 not touch, so far as I can tee, anything that was en- 
 acted in section (). 
 
 Mk. lii.AKK : No. 
 
 LoKD Waison : Ofcourse, if that section igofthe 
 Act of 1S58 includes Insolvency legislation, then you 
 would be bound to say section 9 does not. 
 
 Mk. Hl.AKK : I think this is afoilioii. 
 
 Tllli I.okdCiiancki.i.ok : (Juite apart from Bank- 
 ruptcy provisions, there were provisions dealing with 
 transactions, ami making them fraudulent and void as 
 ag.iinst creditors, which implied Insolvency, because, 
 if a man was solvent, and able to l)ay, there were no 
 means of making that transaction void because he had 
 other assets with which to ,.ay them. Therefore, the 
 whole basis of that was that a man was unable to pay 
 all his creditors, and had attempted pieferentially to 
 deal with one. Then yi)u had Bankruptcy legislation 
 
 followed by Insolvency legislr.tion, the primary sub- 
 ject of which V a.i the liistribution of the i.Mn's assets. 
 In connection wilo that no doubt 'here has been 
 legislaliim on the s,". e lines as that 'gislation the 
 .Statute of Klizabeth, for example iv iking certain 
 .-\cts voiil, and therefore ilealing with acts of bank- 
 rupi.y, but only for tile purpose of the distribution of 
 his property. That only makes it his properly for 
 the purpi.se of the bankruptcy or insolvency distri- 
 bution. The doiilit in my mind is wl'.ctfier any 
 statute which ileals with a transaction and makes it 
 void, which has no relation to its being void, because 
 there is to be a distribution, or in connection with a 
 disiiibution, can be said to be Bankruptcy or Insol- 
 vency. 
 
 Mk. Bi.aki: : That is certainly the argument I 
 would advance. Take clause 19 of the .Vet of 1858. 
 Supposing we were to strike out the words aftor the 
 word " person "down to the word "insolvency." 
 
 TllK I.OKl) ClIANCKl.l.oK : The earliest Bank- 
 ruptcy .\ct here apjiears to have been 34 and 35 
 Henry \ III., chapter 4, which recites that : 
 
 " Wtier,' (livers .Ttid sniuiry persDns olilaininc Itum ttieir hands 
 >;rf:it su list .-nice of ddi^r iiieiiS uoikIs <lu smlilenly (lee to parts 
 linknc.wii, or keep llteii lioiises, not tltinttin^ lo pay or restore 
 10 any ilieir cretlilois their del)!-; .-ind duries, Init at their own 
 wills and pleasures roMsiirnt' (he siejstance ulitaincd hy creiiit 
 of other men, for their own ple.isure aritl ilelicite living, .'igain..( 
 ail reason, eipiil>', and i^ornl coriscienie, He it therefore etiatled 
 hy anthority of this present Parliament; That the Lord C^h.'ui- 
 I ellor of l-'.nul.ind or Keeper of lhe<ireat Seal, the l.ortl 'I'fe.'i',- 
 nrer, the Lord I'resi tent. Lord ''ii\y Ise.-ti, and other of the 
 Kings Mo-t Hon.irahle I'rivy Coiinuil, the Chief justices of 
 either !lench for the time heing, or thre-: of them at the least, 
 wheienf the Lord Chancellor or Keeiier oi the (ireal Seal, 
 Lord rreasiirer, Lord President or the Lord Hrivy Seal, to he 
 one, upon every omplaint made 10 them in writing hy any pt r 
 sons aggrieveii concerning the premises, shall h.i\e ptjwer and 
 authority hy virtue of this Aijt to seize all the man's goods an.l 
 sell them and distrihute them ratably amongst the creditors. " 
 
 That was the first Bankruptcy Act that provided for 
 that. Then you find the 13th Klizabeth, chapter 5, 
 which was " An .Vet against Fraudulent Deeds, .Alien- 
 ations," etc. If was not a liankruplcy Act, but 
 applied whether the man was made bankrupt or not, 
 and that is followetl by " An .Act touching (Jrders for 
 Bankrupts," which enaliled commissions to be issued. 
 That is chapter 7 : 
 
 '' KorasiiuH'h as notwithstanding the Statute maile against 
 bankrupt in the thirty-fourth year of the Keign of tjiir inte 
 Sovereign Lord King Henry VIII. those kind of persons have 
 and do still in':reasc into great anil ex';essi\e numliers, and are 
 like more to th) if some Ijetter provision he not made for the 
 repression of them and for a plain declaration to he made and 
 set forth who is and ought to be taken and deemed for a 
 liankrupt " — 
 
 and then there is power to issue a commission and 
 adjudicate ihe man bankrupt. 
 
 Mr. Hl.AKK ; I would invite your Lorilships to 
 consider this proposition : Supposing we eliminate 
 the words after persons " being at the time in in.sol- 
 vent circumstances," etc. , and make each of these 
 two clauses absolutely general, they would not cease 
 to apply to the person because he was in insolvent 
 circumstances, or because he was on the eve of insol- 
 vency. They would remain applicable to that class 
 of cases in which only they are practically useful or 
 important ; because, as your Lordship hasagreetl, the 
 Statute of Klizabeth is of use only where there is a 
 deficiency; provisions against preference are useful 
 only where there is not enough to pay all ; anil if you 
 eliminate the worils on which my learned friends may 
 rest as words indicating that this is Insolvency legisla- 
 tion, you will see the Provincial Legislature iias um|ues- 
 tioned power to deal with transactions of this kinil 
 made by any person in any conilition whatever, inclu- 
 
i!) 
 
 sivf of the condition expressly prescrijjed, and lo 
 w'lih h the Dporatioii of the Siamic is in terms limited ; 
 that liein^; the coiuiitidii to which, in the nature i)f 
 thin^js, it i pi.ictically limited, because it is useful 
 unly where it is wanted, .iml it is wanted only where 
 there is not enou^j'i m pay all — where tlie person is 
 in or on the eve of insoKency. So that it would 
 seem to tne that the attenijit 'o limit ou^hl nut to he 
 considered as in ellect extending the po\>er of the 
 I-eyislature beyond its lawful bounds. 1 invite your 
 l,ordslii|is with earnestnes;- to consider liiC ali.enct of 
 lianUrupicy and Insolvency Uj;islation by thv Domin- 
 ion I'arlianient — 
 
 TlIK Liikli CilANCKI.I.oH : I take it the object of 
 putting in those words is for the protection of the 
 individual who i^ets the benelil. If you can show 
 that t'.e man wa'- solvent, your deed is a f;ood one. 
 
 Mr. IJl.AKi; : I think so; that can be the only 
 object. They do not want that transacli'iiis should 
 be interfereil with in any other than the class of cases 
 in which it is reasonable that they should be inter- 
 fered with. They leave tlieui as niiich as possible 
 protedeil and untouched., and they leave as much 
 security and certainly to tr.insac'ions between parties 
 as nuxy be consistent with tne object of the Act. But 
 supposiny; this hid not been m.xde part of some bank- 
 ruptcy and Insolvency lej^islalion, would anybody say 
 such a law was ni>t a ^ood law of the I'rovincial 
 Lej^islaiiirc? Would anybody say that an adverse 
 conclusion was to be reached l>y the process of imply- 
 ing that it diii no; ajiply to a person who, in point of 
 fact, had never been a bankrupt or insolvent, but was 
 simply iniiiecunious ? 
 
 Till'. I.OKl) ClIANCKI.I.OK ; Do yoti say the word 
 " Bankruptcy " was not a known word in any Pro- 
 vincial legislation 'i 
 
 Mr. Hi.akk : N'es, my I.onl. It is invariably 
 "Insolvency," though applied to traders and con- 
 taining " Bankruptcy " provisions. 
 
 TiiK Lord Ciian(KI.i.(ir : It would look as if the 
 word " Bankruplcy " was introduced from our law. 
 
 Mk. Bi.akk: Ves ; I will not aftirm that in some 
 old legislation, before my time, there may not have 
 been a law entitled Bankruo'cy, but in modern limes 
 we have used the phrase " Insolvency " as indicative 
 of both cla>se-> of debtors, traders and non-traders, 
 and as covering the whole range. I think it was 
 ])riident to insert " Bankruptcy" in the article; be- 
 cause an argument might have been foundeil on the 
 absence of the word, having regard to the state of the 
 I'.nglish law, and also to the dillerence recognized 
 in some I'rovincial legislation !)etween trailers and 
 non-tradeis. 
 
 TlIK LuRii ("II AM lU.l.oR : Becau.se wich the con- 
 junction of the two it may be t<i some extent in your 
 favor as indic.ting what is meant by the nature of the 
 Insolvency law that is referred to. 
 
 Lord \Vaisi>n : What is the meaning of the word 
 " Bankrupt '".^ 
 
 TiiK Lord Ciiancki.i.c^r : Haiico rolto, in Italian. 
 If the iiarty could not pay, he was said to be " bench 
 broken." 
 
 .Mr. Bi.akk : What is practically done by the rest 
 of this .\ct ? first of all, everything that is essential 
 to maintain this \c\ is in the earlier .sections to which 
 I have referred. I show that every essential to main- 
 tain these sections is in the .-Vet of 1S5S, and I show 
 that all the rest is mere machinery to carry ou(. these 
 purposes. For insiance, there is a short form of as- 
 signment. The I'rovincial Legislature can frame 
 short forms of deeds, transf*rs, mortgages, chattel 
 
 mortgages, and make provisions as to the method of 
 charge nr transfer. It is provided that you can use a 
 few certain words to express a great many other words, 
 much, maybe, to the harm of the conveyancer and 
 copyi>t 
 
 Lord Waisun : How <lo you distinguish between 
 Bankruptcy and Insolvency? 
 
 .Mr. Bi.akk : I make no distinction. 
 
 LiiRii W \lsi>N : Do they mean anything different ? 
 
 Mr. Bi.akk : N't). 
 
 TiiK Lord Ciia.N( ki.i.hr : In Knglish law. if ;hat 
 may be supposed to alTect il, Bankruplcy and Insol 
 vency would mean the case of people unable to pay 
 their debts. The distinction, if it is supposed to be 
 taken from the I'.nglish law and the Imperial Legis- 
 lature may possibly be su|iposed to be inllueiiLed by 
 the lerminology of the l!n^lish law —may be that 
 Bankruptcy and Insohency were intendeil here to 
 cover the case of traders and noii traders. 
 
 .Mr. Bi..\kk ; Possibly: althcjugh there had been a 
 fusion c)f the law befori. 1S67 ; as I understand by 
 the .\ct of 1S61. 
 
 TlIK Lord ("iiancki.lor ; That is iptiie true, but 
 very recent. 
 
 Mr. Bi.akk : \'ery recent. The intention, I have 
 nodoubt, was to p'ace it beyoiul cavil and contention 
 that the legislation was not to be confined to either 
 traders or non-trailers, out that both classes of the 
 communiiy were to be includetl within the power of 
 the Dominion Parliament. That must have been the 
 object. .Ml the rest of the .\cl, as I was saying, is to 
 carry out the object of the earii r provisions. ("hose 
 provisions stand on an undisputed foundation, be- 
 cause they are provisions before Confederation, not 
 repealed . t attempted to be altered in any essential 
 particulars. Then you hnd the assignee is given by 
 the 7th section : 
 
 " .'\ rii;lit of suint; for the rest issinii t>r afireeiiieiits, deeils, .-irnl 
 instrtiiiieiils, or t)iht;r trati'-.'iLtions iiiatie or ctucrefl into in fr.-iml 
 of <jretlitors, or niaile ot eiitereil into in violation ^ii litis .Act. " 
 
 Then you get section 9, which gives prc^eilence to 
 an assignment such as is ilescribed in the .\ct overall 
 judgments ami executions not completely executed. 
 i low that woulil be in the absence of the .Vet of 1S80 
 may be a ilil'ferent tpiestion from that before us, who 
 must remember that we have already the .\ct of 18S0, 
 which altolisheil the [.liority of execution c; iitors 
 over one another, and ol execution creditors t)ver non- 
 execution creditors. Remembering this, is it not clear 
 that section 9 only provides that ihis assignee for the 
 benelit of creditors can assert their full rights on be- 
 half of the whole body of creilitors .' I'liey had al- 
 ready the right to eipialily of treatment, anil, tliere- 
 fore, this is a mere provision whereby that right l(» 
 etpiality may be effectively asserted. It makes no 
 substantial change at all in the coni'ition of the 
 creditors. Then there are later sections which make 
 numerous provisions as to the methoil of contr".lling 
 the estate i)y the creditors ; but all that is, as I submit, 
 entirely ancillary. It is mere machinery. Therefore, 
 my Lords, we contenil with conhdence that the 9th 
 section, iiperating upon the law as it stood at that 
 time, operates within the domain of " Property and 
 Civil Rights." 
 
 TlIK I-ori> Ciiancki.i.or : .Supposing there was a 
 provision that any conveyance for the benelit of all 
 a inan's creditors should avoiil any conveyance for 
 any indiviilual creilitor or limited nundter of his 
 creditors with superior priority, woiilil that be a bad 
 law because the fact that he made a conveyance to all 
 his creditors would show he was insolvent ? 
 
20 
 
 Mk Hi am-,; I siiliiiiii iKii. I (Tu.iiiil sec tli;it il 
 wn'.ild. Ami ycl I can iin.lirsliuicl that, il n I'ank- 
 riiptcy or liisolvciu y law uc-re |).i>sfil by ihc l)i)min- 
 ion, il niijjhl conlain (irovision^ wliicli would Mijierscde 
 >iuh a law. 
 
 TlIK I.OKIi CllANi KI.I.11K ; It ini^jlil vtry well 
 supcrsetk' ail transaclions within a limitt-il time. 
 
 Mk. Hi.AKK: I can iindcrsland thai. lUil I can- 
 not sec, in the aUscnce rf such a Honiinion law, how 
 the <|ucstion can arise ; ;\"id your Lordships >ee every 
 argument of convenience is in favor of the construc- 
 tion which is proposed, because it does not abstract a 
 sinj^le possible power of the l)nniinioii I'arliamenl to 
 nioulil this matter a^- il pleases. It simply leaves a 
 power to be used as lou^ and as far as the i)ominion 
 I'rirliament docs not interfere. That is all that is 
 asked by us. Hut what, on the other side, is asked is 
 that -while tlie Domiiiicm rarliament does not inter- 
 fere the l'rovini:ial I .e^islaturc is not to be alloweil to 
 interfere, and that within a vajjue raii^;e, of which I 
 cannot at all discern ihe limits or lines ; a construction 
 which would involve obscurity ami confusion and 
 paralysis from the moment it was adopted. 
 
 Till. I.nun Cii AN( 11 I c Ik : The j^ivin(j of certain 
 licenses is in the power of the I'rovincial I.et;islature. 
 
 Mk. lii.AKi. : \es. 
 
 Till'. l,ni<|p Cham i;i.i.i>K ; .Supposinj; there was a 
 law which said that no person who has not paid his 
 creditors in full .should he entitled to such a license. 
 
 .Mk. HiakIv: Certain I'rovincial licenses are al- 
 lowed only for revenue purposes. I am inclined to 
 doubt whether the su^f;esled law would be within the 
 spirit ofthe^'ranl, which is with a view to revenue 
 for local purposes. Now, I will trouble your Lord- 
 .ships with some references to the iu<lj;menls which 
 have been delivered, which are to l)e found at 
 paf;e 2 of the Record. The Chief justice adver's to 
 the case of CJiirksoii v. 'I'/u- (hi/iuio l^aitk. 
 
 LoKl) SiiANl) : Why was this section 9 taken out 
 and made the subject of a case by itself.-' 
 
 ,\Ik. Hi akk : I cannot say, my Lords. 
 
 Sir I\I('iiaki> Wkusi kk : It had arisen in a County 
 ( 'ourt case, in which this jiarticular claim had been 
 niaile under this kind of deed as between the execu- 
 tion creditors. That is how it came up. There was 
 a proce dinj; upon it. 
 
 Mk. IJi.aki-'. : There had been proceedint;s on other 
 parts of the Act. 
 
 Li>Kl) .SiiAND : Il naturally throws you into the ex- 
 amination of the statute as a whole. 
 
 Mk. Hi.akk : I do not admit that 
 
 LdkI) SiiaM); It runs into the (|ueslion very much 
 whether that slatute is one within your power. 
 
 TllK LoKii CllAN'c Kl.i UK : \ou do not admit that ? 
 
 Mk. Hi akic: No. Certainly not. 
 
 '^wv. LoKi. Cham i;i.i.()K : The statute may, in 
 many parts, deal with Insolvency, and in other parts 
 deal with other matters. 
 
 Mk. Hiakk : Certainly. I-'irst, I suj;i;est lhat,asa 
 whole, the statute is one within I'rovincial compe- 
 tence ; and, secondly, I contend that even thouj;h you 
 may find parts of the statute which are possibly " In- 
 solvency" — it is for my learned friends to point out 
 those which they contend to be such — but, even so, if 
 they are not the substratum of the whole, I distin- 
 .i;uish — 
 
 TllK Lord Ciiancki.i.ok : We must be entitled, 
 not only to look at the whole, because the provisions 
 standing by themselves might he ancillary to provis- 
 ions in the old ones. 
 
 Mk. HlAKK: .\nd llicrefore I ar^ue that it is impos- 
 sible to look at clause <) with ml looking at its rela- 
 tions ; but its relations may be such as would show 
 you that il would stand, even thoujjh certain parts of 
 the .\cl mijjht be void. 1 now turn to the jud^jiuenls, 
 to wliicli it is my duty to refer. .\t pa^e 2 of the 
 Record, the Chief justice adverts to the decision if 
 Claikson \. 'J'iii Onltv io /uink, and ihne others, in 
 which the constilulionalily of the .Act was considered, 
 and says that he has reexamined his adverse opinions 
 and sees no reason to alter them. Then he thinks 
 that section <) cannot be separated from the rest of 
 the statute. It [irovides : 
 
 " rii.ll .-tn.issi);riMiem iiniler llie .\cl shall take precfilencc of all 
 judunif'iits and executions not (.'nniplelely executed hy pay- 
 ment. I lielieve iliat this section was reliuil on, anil c .msiilereil 
 as on,, of ilie chief aruuineiits against the .Act, as sliowin^; the 
 niosi niarked evidence of the creation of a new system for the 
 ailrninisir.ition of Insolvent Kstates inteifeiin;; with the ordi- 
 nary laws jis rt'cards delitor and < retlilor, and .is iretuhinu on 
 the siiliject of l!ankrii|>lcy ami Insolvency. I lind il impossihle 
 to seoarale it from the rest of the .\ct. or togivean opinion as to 
 its efTifta standini; by itself, unless I arrived at a jiid^^inent the 
 opposite lo that expresscil In iSSS, to which I still fully 
 .'ulliert.'* 
 
 May I be permitted to observe that the section in- 
 terferes with the ordinary law only as rej^ards debts. ^ 
 
 Till'. Lord Ciiancki.i.ok : I do not understr.ml 
 th-it. 
 
 •Mr. Hi.aki: : It seemed tome :> construction un- 
 duly limiting; the power of the Legislature. There is 
 no " ordinary law" in the senseol a law fixed as those 
 of the .Meiles and Persians. The Lef^islatiire iiiav 
 alter all or any of the laws. 
 
 TllK Lord Ch.sncki i.hr : They have power to 
 deal with any properly or civil rights. 
 
 .Mr. Hi.aki-;: The latter i)hrase I cannot object to 
 on Ihe same ground, as an exjiression of opinion, how- 
 ever much I may dissent from its soundness, "trench- 
 ing on he disputable subject of Hankruptcy and Insol- 
 vency," but the former part st?ems to me to indicate a 
 stale of mind with reference to the function of the 
 Legislature not conducive to the formation of a cor- 
 rect conclusion. Then he goes on : 
 
 " The opinions of the ludgisof the Supreme Conn in (,'iiirt v. 
 7V/(^>//(-(-/M 19 Sup. Ct. S43) seem lo support the \icw that 
 leLiisJation of the nature of that now hefore us, alTectinj; the 
 distiihuticjn of insolvent estates, is appropriatecl hy the l-'eder- 
 alion .\ct to the Dominion Parliament." 
 
 There, again, we reach the old (uestion. (,>itir/ v. 
 77/!' <'//('(// was a case in which, alter nnich conllict 
 of opinion, and by the narrowest possible majority, 
 the Siiiireme Court held that ceriain legislation by the 
 Dominion Parliament, directed to the administration 
 of the affairs of the insolvent Hank of Cpper Canada, 
 was within the jurisdiction of the Dominion Parlia- 
 ment. They may have been right or wrong. I may 
 very well, for the purposes of this case, be indifferent 
 whether they were right or wrong My whole argu- 
 ment is based on the proposition that while the Do- 
 minion Parliament could exercise large jiowers in 
 part superseding previously ettectual I'rovincial legis- 
 lation, until sucli exercise il would be perfectly com- 
 petent to the Provincial Legislature to act. And, 
 therefore, tliough an argument, might be advanced 
 against the clecision in Quirl v. T/i, {>tietit somewhat 
 analogous to arguments that might be advanced on 
 '.he other side in the case of /.' I 'iiion SI . /tui/uti de 
 Motilrcal \. />'(•//>/., still the existing conditions do 
 not, in the slightest degree, .make the former case 
 material toour purpose. I admit that thedecision indi- 
 cates a very large and extensive |)otential range of 
 legislation in the hands of the Dominion Parliament. 
 I say that the larger you make the potential range, 
 
•21 
 
 the further you say it is possiMe for the Dominion 
 rnrlianient to ^o, the more essential it is that yon 
 shonlil l<ee|) fne the haniis of the Local Let;islaliire, 
 dealing; with Properly ami Civil Ui^;hts, unless and 
 nnlil that rantje of power is entered on and occupied 
 l)y the Dominion Parliament, liecause the more 
 ample the power you as ,ij;n to the Dominion Parlia- 
 ment to meddle with the sphere of the Local Lej;is- 
 lature, the deeper the wound Parliament can make 
 in " Properly and Civil Rijjhi^," the larger the area 
 upon which it can infringe, the (greater the " cantle ' 
 it can carve out of " Property and Civil Rights," the 
 more indelinite and elastic the raiij^e of its potential 
 action, the more important it is to decide that at any 
 rate until Parliament chooses to act the other Lej^is- 
 lature shall not he disahleil from actinj;. 
 
 Then Mr. |ti>'ice Hurton says he can add hut little 
 to what he said in ihe case of /u(i;iir v. '/'/u- Cc'ii/nil 
 Haul: : 
 
 " Tlic I'.irlianieiU ofC.inaila, liaviiii; power to p.iss laws for tlie 
 good i;o\errimciit of die l>oiiiinion. wtrc t-n. rusted with the 
 exchisUi: power of passing! I.iws on the suljiect of liankriiplcy 
 and In>olveni.y; and the c|iicstion is whether tliis section falls 
 within those terms. Their meaning is, I think, well ex|ir»-sse(! 
 liy Lord Selhorii'^ thus: 'The words describe in iheir well- 
 known le^.il sense provisions made hy law fir the adtiiinistra- 
 tion of the estate of persons who ni.'iy become l):inkrnpt or 
 insolvent ai:»ordinK to ndes and delinilions prest:ril»ed hy law, 
 inchiiling, of coarse, the conditions on whiih that law is to he 
 hronK^u into operation, the manner m which it is to he brought 
 into operation, ,ind the etTect of its operation.' In other words. 
 Bankruptcy and Insolveiu:y were well-known legal terms, not 
 confined to the state of things in Kngland, or the Provinces, at 
 the time of the passing of the Confederation .\ct. hnl appli- 
 calile to systems of legislation with wlii.h the whole civili/ed 
 world were presn ned to be familiar, the Dominion Parlia- 
 ment, and that Parliament alone, can determine whether the 
 legal relation of Itankrnpt or Insolvent shall be createil ont of 
 any given coiiiliina ion of ractsorcircunistances ; but there would 
 seem to he a ditTerence of opinion as to the true meaning t.) he 
 attribnied to the language of l^ord Selborne. It appears to 
 be diought by some that he was not dealing with tiie well- 
 known legal sense of the terms llankrupt or Insolvent, hnl that 
 Ihe words bail relation to all persons unable to p.iy their debts 
 in full, an^l in th.'it sense therefore insolvent, ami rot to persons 
 declared by competent authorilyto be bankrupt or insolvent. " 
 
 There is certainly, as there not infrecpiently hajipens 
 in cases of clelinilions, a dispute as to what Lord 
 Selbonie's defmitiiui means ; hut whatever may be 
 true conclusi.ms as to his reference in the words 
 "according; to lilies and <leli nit ions prescribed by law," 
 whether they a|)ply to the immediately precediiif; 
 phrase, " who may become liankrupl or insolvent,"' or 
 to the remoter word "administration," when you find 
 him stating w li.it the rules and delinilions prescribed by 
 law include, and when you see they include the con- 
 ditions on which the law is to be brouj^ht into opera- 
 tion, it seems to uie that he plainly meant that the 
 condition of "' liankruptcy and Insolvency " is com- 
 prised within the conditions on which the law as to 
 Bankruptcy and liisolvency is to be broui;ht into 
 operation, and iherclore that the phrase has a con- 
 ventional sense, to be, in efl'ect, created by the law, 
 and which it is impossible to define in advance. 
 
 I,(iKi) Waison : I'niess the scheme of that Act 
 is varied by the condition, the condition here to 
 which this clause refers is that the debtor himself 
 shall isecute an assioiniient for the benelit of his 
 i^eiieral creditors in compliance with that .\ci. It 
 may be a ijre.i: iniluicment to execute that assijiti- 
 uieiit to jirevent his estate bein).; torn in pieces by 
 ccmllictino creditors ; lnu whenever he does do it, it 
 appears to me, from tliat moment, judjjino from a 
 hasty examination of the .\ct, that everythinj; goes on 
 as if thi; administration had been at the instance of 
 the creditors. 
 
 The LoRh Chamki ior : l-^cepting that the 
 distribution in that case liy the person depends upon 
 
 the act of the debtor and the |)ower which he nives 
 to distiibule, anil not any power which the law jjives. 
 
 Mk. Hi.akk ; It is his voluntary act. At an early 
 staj^e of my arj;mnriit I endeavored to ascertain what 
 were the essential elements of " liankruptcy and 
 Iiisolveiuy "; anil if one of these essential conditions 
 is, as I contend, the power of the creditors to briiifj 
 the law into operation, th.it element is here lacking. 
 It does not e\ist ; it is only the voluntary act of the 
 debtor that brings the law into operation ; and then, 
 once so liroiighl into operation, there are facilities for 
 the execution of his voluntary act, and machinery by 
 which thai which he chooses to do may be most 
 expeditiously, and most satisfactorily, and most 
 economically carried out. Therefore, we aie back 
 again at what the delinilion of " Hankruplcy and 
 Insolvency " is. To continue ; 
 
 " 'What businessman,' said one .cf the c.junsel who was con- 
 lending that Ibis .Act was iillru :'/»r(, ' could suppose for a 
 moment, oi. reading the title to this Act (K.SO. i.'4), or the 
 language of the first section, that it was not I nsolvtnc)' legis- 
 lation ".' Hut, with great respect, that is not the test. .\ 
 tuisiness man, noi \erseil in legal terms, wonlil, very likely, 
 so understami the enactment ; but the ipiestion is what is the 
 true construciion of the word- used by the Imperial I.e.;isla- 
 lur; when dealing with the distribnli<»n o** legist. itive powers'^ 
 And when we find these powers inclmied wiiti other classes of 
 subjects of nati<pnid and general concern, -ucn as trade and 
 commerce, anil lind also that power isgivtn in ilie same general 
 terms todeal with pr<jperty;ind civil rights to the I.egi-latures 
 of the Provinces, weare ilriven lo en<piire how far those gener.al 
 words are iiualilied bv anything appe.iring in section 91. If 
 the meaning oftlie worils in tpiestion is not such, as 1 suppose, 
 a power to tlecl.'ire win) shall be bankrupt or iiisoKent, and to 
 legislate in reference lo them, it would follow that the Parlia- 
 ment could ileal with persons unable to pay their debts of each 
 Province, arul the powers of ihe Province in respect to any such 
 matters would be gone. That, 1 venture to think, was never 
 inteiKleil.hul the words must receive .t more limited construction, 
 .ami, probably, be treated in the same way as the wonU * regula- 
 tion of trade and i:oinniercX' ' have come 10 be con-trued, as 
 confined to mailers of national or general concern atTecting the 
 whole Dominion. The statute, the section of which we are 
 considerin,:^, wilh the exception of the prov isitjiis against 
 preferences " — 
 
 that is, perhaps, a slip, because the provisions against 
 preferences were substantially in from the beginning ; 
 more stringent provisions are in.serted, but that is the 
 only ditference - 
 
 " was rn our Statute Hook since i3s3, and for a long period 
 when we h.ul a Hankrufit 01 Insolvent .Ac' Inn it was always 
 construed like the Statute of Kli/aheth, and never treated as 
 an Insolvenl .Act, nor was a person availing hini-elf of the pro- 
 visions ever siwken of as an insolvenl, although he was in a 
 state of insolvency in the- sense thai he was unaltle to nieei his 
 '•abilities. That it would extend I > all persons unable 10 meet 
 .leir liabilities is evidently the view entertained by the lale 
 Chief Justice of the Supreme Court in l\i\t;i>iii v. Chantilt'r^ 2 
 Carl. 4,?i. That case was decided very shortly after Con- 
 feder.-iiion, and would scarcely be so de:id.ed ai the present 
 day. The matters dealt with by the statute come cle.-uly 
 within ihe definition of property .-md civil rights, and the onus 
 is therefore upon those whi>atlavk il 10 show its validity. I 
 find il very dilliiailt lo understami upon wlat ground local 
 legislation making provision for the disiril}uiif)n of a man's 
 estate among his cretlitors, .-^nd even for his discharge, can be 
 impugned as l)eing beyond their jurisilictiou." 
 
 Lnuii Watson : That reason seems to reach the 
 case where the law compelled the debtor to make 
 over his estate. 
 
 Mk. Hi .\Ki'. : \es ; I should ififer that Mr. Justice 
 Burton went, perhaps, that far. 
 
 LoKH .SiiANii : .\ provision for an adjudication in 
 Bankruptcy ' 
 
 Lord Watson : Ves. 
 
 Mr. Bi.AKK : " In the case of Ed^ar v. '/'/;,• Cen- 
 tral Hani: I went in detail over several of the other 
 sections " and then he says he still thinks that the 
 reasons apply to these sections, and that he should 
 hold it good except for the decision of the Supreme 
 Court in O'lii/ v. /"//(■ {hitvn. I will not trouble 
 
32 
 
 your l-oidships with rending; that part now, lu'caiise 
 
 1 have siatctl previovisly, wiili a view \n nirtailiti^ 
 my arminuMii, the reason why 1 nmi'tive {>i/h/ v. 
 /'//<• {htt-t II is not material. The whole ol the 
 renuiimier of the jmlf^MU'iit relates to {hiiit v. /'/it- 
 (.hdi'fi^ and (he learned Jiid^e adopts a consiriictitin 
 of that case from whirh [ have respectfully ventured 
 to differ, and ha^e^ on tliat ron^trviciioii hi-, view tha 
 he is not at liherly to art on his (twn opinion. 
 
 Then Mr. ju>tit-e Maclennan points out that the 
 Act was enacted originally <tn the 301 h March, 1SS5 — 
 that is, in its present form -as an .Act lespjitm^ 
 assignments for the henefit of creditors. 
 
 •* Several ametidiiifnls have lieen tiiaile to this Ait sirii:e it \va^ 
 first eiiacti'ci, aiul seclioti g lias also lifcii a rtemled, but tlit 
 aineiulmtut li:i'> iiul atVecled ihei|nesiionof its v; litlity. Neither 
 at the lime the sei.tinn wa-. Iii^t enai.tetl, tior at my time since, 
 has there lieeri any liankruiit'.y or liisolvcin. ■ law of the 
 Dortiiniori in forie except the \Vintliiiv;-l'p Act, whiih applie-. 
 only to hanks and oilier in<;otpnraU'd companies, and, perhaps, 
 some special .Ads for settlinu the alVairs nf c.^nipanies, such as 
 Acts rt-laiinu i > the alTairs of the Hank of l!ppirr i!ariada, Tlie 
 InsoU-enl Acts which had heeii in force in ih-* I'rovinc- con- 
 tiiuimisly from llie time of Confederation nniil the year i38o 
 had hee;i repe.d-.d on the isi ,\pri!, in th.it yrar, hy the Act 
 41 Vict., c. I. entithui ' An Act to repeal ih^ ■^' '^ respei tin; 
 Insolvency now in force in lanada,' and the \Vin<hni;-l'p Act 
 was (Kissed in i8:^.>. In March, 18SS, the constitutional 
 validity nf the Provincial Statute was raised in four cases in 
 ihisCinirt" naming thetn. Then; " The learned Chief Justice 
 and Mr. lustii c()-.ler were of opinion that the whr)lc Ait. except 
 the Itrsi two -ectii-n*, was invalid, and Mr. Jn-tiie I'atterson 
 and my hrother Hurlon were of a contrary opinion. ' 
 
 Then he says the question was in one case reserved, 
 and he ado[)ts the opinion that the section is valid. 
 Then he says : 
 
 "The (luestii)n depends on the sense in whii h the wortls 
 * llankruptcy and Insolvency ' are used in th" !'. N. A. Act, see- 
 titin i;i. et'-. (readuii; to the wonis at pa^e 7, line j'*). ' If 
 the I.eyislatur** 'an aholish priority lieiween an execulicpn 
 creditor and i:reditors who have no executions, so that the 
 latter sliall stand nn an i,4i::>Mty with the former.' I s.-^^ 
 agair) ilie efTect of the Act of 18S0 was more wide than the 
 phrase in that jud^^ment appeals to indicate. Iftheone is not 
 Hankriiptcy ami Insolvency legislation, I am unable to see 
 whv the other should he so regarded. It is merely the eftect 
 am! <)p»rration o' an execution which ha.s been alteri-d by the 
 legislation in each case. IJnt I incline to the opinion that, 
 except sD far as the Uomininn chooses, from time to time, to 
 occnpv the neld o* Mankrupt'-y nnd Insolvency legislation, the 
 Province may occupy it. I think that follows from the manner 
 in which their respective powers iirc defined by sections 91 and 
 
 02 of the W. N.A, Act. In tlie Citizen/ /fnuramf Co. v. /Vi'- 
 sittis, 7 .\]i\}. Cas. no, it wasdecided liy the judicial Conimilteft 
 that the phrase ' v»roperty and civil rights in (he Pruvince' 
 empIoy.;d in No. 13, .section >2. included rights in the Province; 
 employed in No. i ^, seciion )j2, included rights arising out of 
 contracts, and, tliere'ore, those words emlirace tlie whole law 
 of debtor and creditor. Wliat the Act does, then, is to give 
 the whole fiel<i of properly and civil rights to the Province, and 
 then to give to the Dominion that part of it which answers to 
 the description of bankruptcy and Insolvency. Hank ruptcy and 
 Insolvency are excei)ted or subsiracled from the general field 
 of property and civil rights. Now, it liankruplcy and Insol- 
 vency were snceplib'e of clear definition, apart fro'n legislation 
 like bills of exchange and promissory notes, patents of in\en- 
 lion, copyiight, and the like, there would he no dilficuity 
 in saying, with referentf lo anv particular Act i-tf legislation, 
 that it was nr was not within the exception, and so that it was 
 or was not within the jrawer of the Province." 
 
 LORt* Wapson : The argunieni of that learned 
 Judge goes a long way beyond yours. 
 
 Mr. Bi.ake : Ves. 
 
 Lord Waisi^n : It goes this length, that in all 
 these jases the whole field is clear, because it would 
 extend to adjudication in Hankruptcy, I think it 
 would go that length. 
 
 Mk. Bi akk : Trobably it does. 
 
 Lord Macnacmten : That was his view — until 
 the field is occupied. 
 
 Lord Watson : A regular scheme of Bankruptcy 
 might l>e passed hy the Provincial Legislature. 
 
 Mk. Hi.akk : Probably his view goes (hat far; 
 but whih,' suggesting the same coi einions, I have 
 i)resented also and mainly a narrower view on which I 
 am content to rest. 
 
 {.■Ii//o/frf/fi//or ii short timt'.) 
 
 Mr. liLAKK : I was troubling your Lordships with 
 the judgment of .Mr. Justice .Maclennan. 
 
 ** Itnl, a[>art from legislation, Hankru^itcy and Insolvency 
 is not dffin.dile. .Apart from legistalirn tltere is no such 
 thing as l'ankrnpt< y or Insolvency. ParliatnerU rniy pass 
 .Acts ol that t liaructrr, an ' when it does ifie snbjfct is 
 defined, and we cm see what it is. Whatever part of the 
 field of property and civil rights it ociupiesfor that purjKJse 
 is taken away from the Province, but no more. So far as any 
 such .Act extends, the law of the Province must yield, and 
 is overborne ; but, Itt-yond that, it is the power and duty of 
 the Province to care for the public interest, ruid lo enact 
 and enfonx- proper laws in lelation to property and civil 
 rights. Ilankiupt and Insolvent laws are not a ne' essily, 
 are not an essential part of every system of iurisprude' e 
 or of goveri merit. There may *)r may not ijc such laws. 
 If Parliament thinks fit to have stich laws, it h:i« he 
 exclusive power to enact tliurn, hut it is not oblig.Uory ; and 
 if there be no such law, it is s(il] necessary that there he some 
 lawof debtni and creditor, and that subject is expressly given ttt 
 the Province. There was no such thing as liankruptcv or 
 Insolvency at the Common I. aw. There was no disliiictioii 
 between the fraudulent or insolvent debtor and any odier 
 del)tor who .lifi not pay his creditors. There was tlie same 
 remedy again>-t all, by action, jndgnieru. ami txecution, ami 
 alt debtors alike were field bound until full pa;, nient. it.uik- 
 rupli:y and InsoUeni >■, theref >rr', are wholly the creation of 
 legislatitJii, and without legislatioti they do iiot and (annot 
 exist. The impossibility of defiiung Pankruiitcy in the ab- 
 stract, ami apart from legislatitjn, i^ api)arcnt from tlit? history 
 of the subject. The first Mankrupl; :y .Act iri Kngland was tiie 
 Act 34 iS; ^s, H. "!. chapter 4, in the year 154J, ami between that 
 time ami the passing of the Act '.^4 iV 25 Vict., chapter 114, 
 which was in f.irce when the M.N..A. .Act was passed, a very 
 large nu'iiber of such Acts was passed, changing the chara^ ter 
 of the legislation from time to time. The Acts whii h w ere 
 passed prior to 18 m ^^i!' '" found /// t-xtinso in the 1st \ol. of 
 the 8ih edition of Cook on lJ.tnkruptc>' ( i 8 z i)> iind an ex.iinina- 
 tion of them v ill show how the definition of the subjec* 
 changed from lime to time with the legislation. I'hat change 
 is shown striki'jgly by a com[>arison between the .Act of H. 8 
 an<l the Ac' of J4 iS: 25 Vict., in 1861," 
 
 and he (|uotes the i)asf.age which the Lord Chan- 
 cellor has already (luoted, and states the duties whicti 
 are now abstracted Trotn the duties of your L-ikI- 
 ship's othce. 
 
 " Thai conluuieii lo be ♦.he law of Hankruptcy for a long time, 
 and the changes which were made afterwnriN wt-re made 
 grailually until, by the l.iw of 1861, all persons, uhether tradt-rs 
 or tuju-trail'Ts, whether honest i.r dishone>t, whether they were 
 r>r weri.' not possessed of sufiicient property to p:iy their deliis 
 in full, u ere made subject to iIil' law in case they had commit ltd 
 cert.'iin defined ai:ls or defaults, The-e acts or delaiills ate 
 enumerated at page 1 -'7 of Uoria and McKae on Hankruptcv 
 (i860. <'nid some of ihem are the following; non-payment 
 after judgment liebtor sunimons hy either trader or non-trach:r : 
 sutTering e\^*cution to lie levied on anyo' his goodsand chattels 
 for any debt exceeding L-,o by a tradtir ; and non-tiaymeiit 
 within seven days by a trader, and within two months hy a 
 non-trailer, ;ifter decree or order peremptory in eipiity, bank- 
 ruptcy, or !unai:y. Prior to the Act of 1861, and as far back as 
 the I }th Kli/abeth, the law was confined to traders ; as to all oiht-r 
 persons, there v\as no s\ich law. The hisony of the subject in 
 this country shows the same variety in Hankruptcy legislation. 
 In the Provinces of Ontario and Quebec, there had l)ern a 
 Hankrupt .Act in force, more or less, from 1843 10 1856, when it 
 expired " — 
 
 therefore, your Lordship sees that there was, in the 
 early days of the (^)ueen, a Hankruptcy Act — fr< m 
 1843 *" 1856. Then the learnetl Judge says the Act 
 was called a Hankrupt Act — 
 
 " after which there was none until 1864. The Art of that year 
 was called 'The Insolvent Act of 1864,' and, although calktl 
 an Insolvent .Act, it was in reality a Hankrupt Act, and it was 
 made applicable in Lower Canada to traders only ; but in 
 Upper Canada lo all persons, whether traders or not. This is 
 the Act which was in force in Ontario and Quebec when the 
 H.N.A. Act was passed, and while it was undoubtedly, in its 
 nature, a Bankruptcy Act, it differed in many respects from the 
 English Act. I do not know what, if any, Bankruptcy or 
 
•j:» 
 
 Insolvency laws exintetl nt tlnit time iti any of tl\p other 
 Provinces ofthc Dominion." 
 
 I have iitated to ycmr Lordships ihat ihcrt* were none 
 nt all. 
 
 " The At-i of 1864 was repfuletl in i6<'i>, and a new Act was 
 passeil, extendi!.,; to the wholr I >uiiiitiii)ii. called ' The 
 Insolvent Act of i^fii).' It was (:onfiiie<l to traders, and any 
 trader nnalile t.i meet his em;anements rniuht either (ake 
 the lienetit of it voluntarily, or mi^lit, under defnu-d 
 circum-.lances, he compelled to do so. I he A< t of iS'>> was 
 le-enaiMed with c:on'i;'r,rahle alteralinns in I'l/s. and was still 
 confnied to traders. This law continued in foireimid 1 S lu, 
 when it was repealed, and since that time (here has iit*eu no 
 Ilomiiiion law of Itankrnplcy or Insolvency, except as already 
 stated, the Winding-up Act, whii h is contined UMiorp.. rations, 
 and pi-rhaps some spcrial arts relalini; to particular casrs, such 
 as the Itauk of Tpper Canada Act. What I nn-an is that 
 there has n »t heeu since that tune, and there is not now, any 
 neneral law of the hominion lakirii; up or luinpyini; any 
 certain part or seclitiu of the law of deliior and cr.Miiior for 
 its operation as a law uf Hankruptcy and Insolvency. While 
 there wj's sUch a l><riiinion law, the law of ihe Provinces had 
 to g've way. Parliament could detdare, and diii declare, that 
 
 to the extent defnied by that law the relations of debtor and 
 creditor were tn he r»*niilalcd and adjusted by and under that 
 taw. Within its limits was the leatm of Hatikruptcy and 
 lnsi>lvency which Parliament hail appronrialed to itself. All 
 without these linnts wtitch concerned the same relation was 
 left t'l the Leiiislatnre of the Pr'pvince, as beiny a part of 
 property ami civil rinhis. While the Act was in fon e it seems 
 clear the Ptovince cutdd ileal with ;inylbitiii outsit. • of it, anil 
 when it was repealed I think the whole field was left to the 
 Province." 
 
 Thi'rt'f')re ci)nfiru..iiR the rcniarUs of Lord Watson 
 lh.1t his Lordship takes a very wide view. 
 
 " I think, therefore, that the Iru*: solution is that Parliament 
 may pas-4 laws ot Itankrnptcy aiid Insuh'-ncy, and mav 
 theroby define the nature and exlenl i»f its interfcreiu c vvilb 
 the law of the Province for that pur pose,' etc., etc. (Keailint* 
 to the words on line (o, paKeii.) '' I^nbject In be o\ erhorne 
 and displaced if and whenever the Dominion, nt the exercise i)*" 
 its jiuisdiclion, shotdd think fit to make other provisions. " 
 
 These citations close the ar^itnienl which I have to 
 address to your Lordships, 
 
 I /u fi^miuf i/t'/irm:/ 3 fth /ui'ruary, /^'o/, hy the /.orj ChaUifi/i^r.\ 
 
 This appeal is presented by the .\ltorney-Cleneral of (yntario 
 nqaiiist a liecisiou of the Court <'>i Appeal of that province. 
 
 The decision con)plained of w.is an answer t;iven to a 
 tpiestion referred to that Court by the l.ieutenani-dovernor of 
 the province in pursuance of an Order in Council, 
 The (|uesUnn was as fullows : — 
 
 *'Had the Legislature of Ontario jnritdiction to enact the 
 oth section of the Kevist^d Statutes of Ontario, chapter 1^4. 
 and entitled '.\n Act respecting Assignments and Pretercnc :s 
 by Insolvent Persons'?" 
 
 The maj »rity of the Court answered lids c, ;»-tion in the 
 negative ; but one of the Judges who formed th:; m.ijority only 
 concurred with his brethren becausu he thought the case was 
 i^overried by a previous decision of the same Court ; had he 
 ctmsidered the matter /rx /'nfixra he would have ilecidetl the 
 other way. The Court was thus equally divided in opinion. 
 
 It is not contesteil that tiu* en.actmenl. the validity of whicli 
 is in (piestion, is within the legislative powers conferred on the 
 Provincial l.egislaiure by section 92 of the Itritish North 
 America Act, iS')?, which enables that legislature to make laws 
 in relation to propt^rty and civil rights in the pr,)vince unless it 
 is withdrawn from their lei;islative competency by the 
 provisions of the 91st section of tbat Act, which confers upon 
 the Dominion Parliament the exclusive power of legislatim 
 with reference to bankruptcy and insolvency. 
 
 The point to be defernnned, therefore, is the meanitig of 
 those words in section gi of the Uritisli North Ameiica Act, 
 !S67, and whether they render the enactment impeached tt/tra 
 T'ires of the Provincial Legislature. That enactment is 
 section y of the Revised Statutes of Ontario of 1887, c. 124, 
 entitled ".An Act respecting Assignments and Preferences by 
 Insolvent Persons." The section is as follows : — 
 
 '*An assiginuent for the general Itenetit of creditors under 
 this Act shall take precedence of all judgments an 1 of all 
 executions not completely executed by payment, subject to 
 the lien, if any, of an execution creditor fur Ins josts, where 
 there is but one execution in the sheritf's hands, or to the 
 lien, if any, of the creditor for his costs, who has the first 
 execution in the sheritT's hands." 
 
 In order to understand the elTect of this enactment it is 
 necessary to have recourse toother sections of the Act* to see 
 what is meant by the words "an assignment for theg<neral 
 benefit of creditors under this Act." 
 
 The h.st section enacts that if any person in insolvent 
 circumstances, or knowing himself to l)e on the eve of 
 insolvency, voluntarily confesses judgment, or gives a warrant 
 of attorney to confess judgment, with intent to defeat or delay 
 his creditors, or to give any creditor a pre^^erence over his other 
 creditors, every such confession or warrant of attorney shall 
 be void as against the creditors of the party giving it. 
 
 The second section avoids as against ilic other creditors any 
 gift or assignment of goods or otlier property made by a person 
 at a time when he is in insolvent circumstances, or knows that 
 he is on the eve of insolvency, with intent to defeat, delay, or 
 prejudice his creditors or give any of them a preference. 
 Then follows section three, which is important : — 
 Its first subsection provides .hat nothing in the preceding 
 section shall apply to an assignmet^t made u the sheriff of a 
 county in which the debtor resides or carrie; on business, or to 
 any assignee resident within the province w.th the consent of 
 
 his creditors as thereinafter provided for the pu'-pose (tf paying 
 ratably and proportionately, and without prcferen( i or [jriority, 
 all the creditors of the ilebvur their just d.:bls. 
 
 Tlie second sulisection enacts thai e\er> assignment for the 
 general benetii of creditors wld' b is not voi'! under section two 
 hut is not made to the sh- ifl" nor to any (^ihcr ptrson with the 
 prescribed consent ot the ( rcuiio'-s slia'.i be void as a^.'iinsi a 
 subsequent assiijnmeni which is in lontormity wiih the At;t, 
 and shall \>(: sid)ject in other respects to the pro\isioiis of the 
 Act, until and unless a subsecpient assignment is executed in 
 accordance therewith. 
 
 The fifth subsection states the nature of the consent of the 
 creditors which is requisite for as.iunment in the first instance 
 to some pe'son other than the -^heritV. 
 
 Tbeso are the only sections to which it is necessary tu refer 
 in order to explain the meaning uf section nine. 
 
 Ilefore discussing the efTcct of the enactments to which 
 attentiuu has been called, it 'y'U be convenient to glance at the 
 course of legislat' -u in relation to this and connate matters 
 both in tlie P-ovince and in the Dominion. I he enaciinents 
 of the first and second sections of the Act of 1S87 are to be 
 found in sul)stancc in sections iS and i^i of the Act of the 
 Provim:e of Canada passed in 1858 for the oetter prevention of 
 fraiul. Tliere is .1 pro\iso to the latter section \\hich excepts 
 from its operation any assignment made for the purpose of 
 paying all the creditors of the debtor ralalily without 
 preference. These provisions were repeated in the Kevisetl 
 Statutes o! Ontario, 1877, c. ii3. A slight amendment was 
 made by the Act of 1384, and it was as thus amended that tbev 
 were re-enacted in 1887. .\t the time when the Statute of 185S 
 was passed there was no Hankruptcy law in force i.i the 
 i*rovince of Canada. In the year 1864 an .Act respecting 
 insolvency was enacted. It applied in Lower Canada to 
 traders only ; in Upper Canada to all persons whether traders 
 or non-traders. It provided that a debtor should be deemed 
 insolvent and his estate should become subject to compulsory 
 liquidation if he committed certain acts similar to those which 
 had for a long period been made acts of bankruptcy in this 
 country. Among these .icts were the assignment or the 
 procuring of his property to l)e seized in execution with intent 
 to defeat or delay his creditors, and also a general assignment 
 of his ))roperty Cor the benefit of his creditors otherwise than 
 in manner provided by the St.atute. A person who was unable 
 to meet his engagements might avoid compulsory li(piidation 
 by making an assignment of Ids » state in the manner provided 
 by that Act; bjt unless he inade such an assignment within 
 the lime liinif.cd the litpiidation became compulsory. 
 
 This Act was in operation at the time whcji the Hritish 
 North America Act came into force. 
 
 In 1869 the Dominion Parliament passed an Insolvency Act 
 which proceeded on much the same linfs as the Provincial Act 
 of 1864, but applied to traders only. This .\ct was repealed 
 by a new Ii. solvency Act of 1^75, which, after being twict 
 amended, was, together with the Amending Acts, repealed in 
 1 8 80. 
 
 In 1887, the same year in which the Act under consideration 
 was passed, the Provincial Legislature abolished priority 
 amongst creditors by an execution in the High Court and 
 County Court*;, and provided for the distribution of any 
 moneys levied on an execution ratably amongst all execution 
 creditors, and all other creditors who within a month delivered 
 
24 
 
 to the sheriff writs aiui certificates nhtained in the manner 
 jiro\ ideii for by that Act. 
 
 Their I.oniship'' proceed now to consider the nature of the 
 enactment said to he ultra vires. 1 1 postpones jud)irnents and 
 exe.:iitions ncl completely executed I>y payment to an assign- 
 ment fnr the Ijenefit of creditors under the Act. Now there 
 can l)e no iioul)t that the etVect to l)e i^iven to judiimerits and 
 executions and the manner and extent to which ihey may he 
 made availal)le for the recovery f debts are />rin/^ /''('V 
 within the leijishuive pi>w*trs of ilie Provincial Parhament. 
 K.xfcutions are a part of the iriachinery by which debts are 
 recovered, and are subject t<> rej^ulation by tliat i'arUament, 
 A creditor has no inlierent rii^ht to have his debt satislietl by 
 means of a levy by tlie sheriff, or toany priority in respect of such 
 levy. '!'he execution is a mere creature of the law which may 
 deteinune and rei;idate the ri,i»his to which it i;ives ri'-e The 
 Act nf i-j-l; which abolished priority as amonu^^t execution 
 C'.L'ditors provided a simple mt'ans by which every creditor 
 miiilu obtain a share in the distribution of moneys ie. ied luider 
 an execution Ity any particular creditor. The other Act of the 
 same year, containing the sectit)n w hich is impeacheil, i^oes a 
 step further and gives t<» all creditors under an assignment for 
 their general benelu a right to a ratable sliare of the assets of 
 the debtor, including those which have been seized in execution. 
 
 i'ut it is argicd that inasnuich as this assignment con- 
 templates the insolvency of the debtor, and wotdd only be 
 made if he were insolvent, such a provision purports to deal 
 with insolvency and therefore is a matter exclusively within 
 the jurisdiction of the Dominion Parliament. Now it is to be 
 u!'>>-'rved that an assignment for the general benefit of creditors 
 lia-> long been known to tiie jurisprudence of this country and 
 also of Canada, and has its force and effect at common law 
 quite independently of any system of bankruptcy or insolvency, 
 or any legislation relating thereto. So far from being 
 regarded as an essential part of the bankruptcy law, such an 
 assignment was made an act of bankruptcy on which ai: 
 adjudication might be founded, and by the law of the Province 
 'f Canada which prevailed at the time when the Dominion Act 
 was p.assed, it was one of the grounds for an adjudication of 
 iuMjlvency. 
 
 It is to be observed that the word ''bankruptcy" was 
 apparently not used in Canadian legislation, but the insolvency 
 law of the I'rovince of Canaila was precisely analogous to what 
 was known in Kngland as the bankruptcy law. 
 
 Moreover, the oper.ition of an assignment for the benefit o' 
 creditors was precisely the ;ame, whether the assignor was or 
 was not in fact insolvent. It was open lo any debtor who 
 might deem his solvency doubtful, and who desired in that 
 ca^e that hi- creditors should bt eipiitably dealt with, tc^ make 
 an assignment fjr their benefit. The validity of the assign- 
 ment and \y^ etVect would in no way depend itn tie insolvency 
 of the as-.ignor, and their Lnrdstups think it clear that the 
 ninth section would equally apply whether the asignor was or 
 was not insolvent. Stress was hud on the fact tl'.it the enact- 
 ment relates only to an assignment under the Act contaitung 
 tlie section, and that the Act prescribes that the sheriff of the 
 c .'unty is to be the a«;signee unless a majority of the creditors 
 cin^enl to some other assignee being uauied. This dites not 
 appear to their Lordships to l)e material. If the enactment 
 would have been intni 7/r,s, supposing sec'ion nine had 
 ajiplied to all assigimients witbo-.it these restrictions, it seems 
 ditficult to contend tliat* it became ////ni 7'irt's by reason of 
 them. Moreover, it is to be t)l)served that by subsection (2) 
 i.f section 1, assignments for tlie benefit of creditors not made 
 to the sheriff or toother persons with the prescriljed consent, 
 
 although they are rendered void as against ai'Signments so 
 made, are neveitheless, uidess and until so avoided, to be 
 " subject in other respects to the provisions " of the Act. 
 
 .-\t the time when the Itritish North America Act was passed 
 bankruptcy and iustdvency legislation existed, ami was based 
 on very similar 'ions both in (ireat P.ritain and the 
 
 Provih._v; of Can.ad; ., .jntion has already been drawn to the 
 
 Canadian .Act. 
 
 The I'nglish .\ct then in force was that of 1H61. That 
 Act applied to traders and non-traders alike. Prior to that 
 date tlie operation nf the IJaiikruptcy Acts had been confined 
 to traders. The statutes relating to insolvent debtors, other 
 than traders, !iad lieen de->igned to provide for tlieir release 
 from custody on their making an assignment of the whole i>f 
 their estate for the benetit of their creditors. 
 
 It is not necessr'.ry to refer in detail to the provisions of the 
 Act of i36i. It is enough to say that it provided for a legal 
 adjudication in bankruptcy, with the coiise<iuence that the 
 bankrupt was divested of all his property and its distribution 
 amongst his cre<iitors was provided for. 
 
 It is not necessary in their Lordships' opinion, nor would it 
 be expedient to attempt to define what is covered by the words 
 " Hankruptcy " and " Insolvency " in section gi of the lir-iiish 
 North America Act. Hut it will Ije seen that it is a feature 
 common to all the systems of bankruptcy and insolvency to 
 which reference has been made, that the enactments are 
 designed to secure that in the case ol an insolvent person his 
 assets shall be ratal)ly di-.tributed amongst his creditors 
 whether he is willing that they shall be so distributetl or not. 
 Although provision may be maile for a voluntary assigiunent as 
 an alternative, it is only as an alterna.ive. In reply to a 
 ipiestion put by their I.orilsbips, the learned Counsel for the 
 Respondent were unable to point to any scheme of bankruptcy 
 or insolvency legislation which did not involve some power of 
 compulsion by process of law to secure to the creditors the 
 distribution amongst them of the insolvent debtor's estate. 
 
 In their Lordships' opinion these considerations nuisl be 
 borne in mind when interpreting the words '* liankruptcy " and 
 *' Insolvency" in the Hritisli North .\rnerica .Act. It appears 
 to their Lc)rdships that su.:h provisions as are found in the 
 enactment in que-*tion, relating as they do to assignments 
 purely voluntary, do not infringe on the exclusive legislative 
 power conferred upon the Dominion I^arlianunt. They would 
 oi)serve that a system of 1 ankruptcy legislation may freipiently 
 require various ancillary provisions for the purpose of 
 preventing the scheme of the Act from l)eing defeated. It may 
 be nei:essary for this purpose to ileal with the effect of 
 executions and others matters which woidd otherwise l>e within 
 the legislative competence of the Provincial Legislature. 
 Their Lordships do not doubt that it would be open to the 
 Dominion Parliament to deal with su ;h matters as part of a 
 bankruptcy law, and the Provincial L-gislature would doubt- 
 less be then precluded from ' •.*.erfer"iig with this legislation, 
 inasmuch as such interference .vould affect the bankruptcy law 
 of the Dominion I'arliament. Hut it does not follow that such 
 subjects, as might properly be t eated as ancillary to such a law 
 and therefore within the pcwers 'f the D(jminiou Parliament, 
 are excluded from the legislative authority of the Provincial 
 Legislature when there is no bankruptcy or insolvency 
 legislation of the DuminiiHi Parliament in existence. 
 
 Their Lordships will therefore huml)ly advice Her Majesty 
 tliat the ilecision of the Court of Appeal ought to be reversed, 
 and that the question <)ught to be answere., in the atVirmative. 
 The parties will bear their own costs of this appeal. 
 
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