Bankruptcy Act, 1861-Composition Deed-Irregularity-Assent of Trustees.

To a declaration containing indebitatus counts, a plea setting up a release contained in a composition-deed which it alleges to be binding upon the plaintiff under the provisions of the Bankruptcy Act, 1861, and by which certain specified creditors, not however including the plaintiff, are postponed to the general body of creditors, is bad if it does not allege that the creditors so postponed executed, or at least assented to the deed.

Semble-where the persons so postponed are trustees it would not be sufficient for the plea to allege that some or one of them executed the deed, but it should shew that all executed it.

This was a demurrer to a plea to a declaration containing indebitatus counts, setting out a composition-deed under the Bankruptcy Act, 1861.

The parties to the deed were 1, W. G. Wills, the debtor; 2, the undersigned creditors of the said debtor, thereinafter called "the said creditors"; 3, certain

named persons, trustees of the marriage settlement of W. G. Wills.

The deed contained a recital that at a

meeting of the debtor's creditors it was resolved "that a composition of 13s. in the pound, payable by equal instalments at three, six and ten months be accepted in discharge of Mr. Wills's debts, the family cash creditors, namely, Avery's trustees and Wills's trustees, agreeing that payment of their dividends be deferred until the other creditors have been paid the above instalments." It then recited that a majority in number, representing three-fourths in value of the creditors of the said debtor whose debts amounted to 107. or upwards, had agreed to carry out the resolution and to execute the release thereinafter contained. Then came a covenant by the debtor with the parties of the second part to pay the composition on the amount of their respective debts by instalments at the times mentioned, and a covenant with the parties of the third part to pay the same composition at the end of ten months; and a release of their debts by "the said creditors," with a proviso that in default of payment the said creditors, both of the second and third parts, should be restored to their original rights.

The plea alleged execution or assent to the deed by a statutory majority of the creditors, but did not allege that the trustees had executed or assented. It

alleged specifically compliance with the other provisions of the Bankruptcy Act, 1861, required to make the deed binding on the plaintiff.

Kingdon, in support of the demurrer, contended that the deed was bad, because it contained a covenant to pay the composition upon which the executing creditors could sue, while non-executing creditors could not, and thus created an inequality of remedy between them, thereby differing from the deed held to be valid in Clapham v. Atkinson (1), which resembled the deed in the present case in many respects, but did not contain any covenant by the debtor to pay the composition.

[Upon this point, upon which the Court held the plaintiff entitled to judgment, upon the authority of Benham v. Brodhurst (2), it is considered unnecessary to report the arguments and judgment.]

He further argued that the plea was bad because it did not shew that the trustees of Avery and of Wills, who were placed by the deed in a worse position than other creditors, had executed or assented to it.

R. E. Turner, for the defendant, urged that the plea did shew inferentially that the trustees assented to the deed, because it set out the deed containing the resolution of the creditors, and from that resolution the assent appeared. If the resolution were disregarded, then certainly so far as Avery's trustees were concerned it did not appear that they were in existence at all. The same sentence which brought them upon the face of the deed shewed that they assented. As to Wills's trustees, they were parties to the deed, and it was not necessary to allege affirmatively that they executed or assented to it. He cited Clapham v. Atkinson (1), Brooks v. Jennings (3), Sowry v. Law (4) and Gresty v. Gibson (5).

(1) 33 Law J. Rep. (N.s.) Q.B. 81: affirmed in Ex. Ch. 34 Law J. Rep. Q.B. 49; s. c. 3 Hurls. & C. 472.

(2) In Ex. Ch., 34 Law J. Rep. (N.S.) Exch. 61. (3) Law Rep. 1 C.P. 476.

(4) 37 Law J. Rep. (N.s.) Q.B. 96; s. c. Law Rep. 3 Q.B. 281.

(5) 35 Law J. Rep. (N.S.) Exch. 74; s. c. Law Rep. 1 Exch. 112.

Judgment was given for the plaintiff upon the first point by Kelly, C.B., Bramwell, B., Pigott, B. and Cleasby, B.; and

by Kelly, C.B. and Bramwell, B. upon the

second point as follows:

KELLY, C.B.-Another objection is, that the trustees of Avery and the trustees of Wills are not to be paid until all the other creditors have been paid. If they had been parties to the deed they could, no doubt, have consented to the postponement, but it is not alleged that they executed or assented to the deed. The trustees of Wills are parties, but they do not appear to have executed the deed; and the trustees of Avery are strangers to the deed. They might come in at any moment and claim the whole of their respective debts. The resolution recited in the deed, though alleging some kind of assent to the composition, does not shew that the trustees assented to all the provisions of the deed. At any rate it is left in doubt, and even if it were not necessary (as I think it was) that the trustees should execute the deed, the plea should, at least, have alleged that they assented to it and agreed to the postponement of their debts.

BRAMWELL, B.-This point is a substantial one. It does not appear that Avery's trustees or Wills's trustees are bound by or entitled to the benefit of the deed. It is not enough to say that they may be. The defendant should shew affirmatively that they are bound, and not leave it to surmise. If the trustees are not bound, then the other creditors are bound for nine months, while the trustees are not. I think, moreover, that it was necessary not merely for one of the trustees to execute, but for all, otherwise one of the trustees might challenge the acts of the others in a Court of equity. We cannot see for certain, in the first place, that any of the trustees assented; or, in the next place, that they all assented so as to prevent any of them from maintaining an action.

Judgment for the plaintiff.

Attorneys-Clarke, Woodcock & Ryland, for plaintiff; Gole, for defendant.

Bankrupt Law Consolidation Act, 1849, s. 67.—Removal of Goods-Act of Bankruptcy—“ Fraudulent Transfer or Delivery."

Eight days before his bankruptcy, L. caused his household furniture and stock-intrade to be removed from his premises to the warehouse of the defendant, who advanced money on the security of the goods without any knowledge of the state of the trader's affairs-Held, (following Cole v. Davies, 1 Ld. Raym. 725, and Cotton v. James, 1 Moo. & M. 273,) that neither the removal of the goods nor the delivery of them to the defendant was, in the absence of anything shewing an intention to transfer the property to him, a “fraudulent delivery or transfer," so as to constitute an act of bankruptcy within the meaning of section 67. of the Bankrupt Law Consolidation Act, 1849.

The declaration contained counts in trover and detinue for household furniture, stockin-trade, fixtures, chattels and effects of the plaintiff, as assignee of Thomas Lockett, a bankrupt.

Pleas-Not guilty, non detinet, not possessed, and that before the alleged detention, and before the defendant had notice of any act of bankruptcy, Lockett deposited the goods with the defendant, to be by him kept as a pledge and security for the repayment to the defendant by Lockett of 7., then lent by the defendant to Lockett on the security of the said goods, and as a pledge and security for the repayment of any other sum or sums of money which the defendant might afterwards lend and advance upon the security of the same; and the defendant received and had the same on the terms aforesaid; and afterwards, and before Lockett became bankrupt, and before the defendant had notice of any act of bankruptcy, the defendant did lend and advance two other sums of money, to wit, 17. and 107. 15s.; and Lockett did not repay the said sums of money, or any or either of them, and the same remain wholly due and unpaid, wherefore the defendant detains the said goods. Issue on all the pleas.

At the trial, before Martin, B., at the
NEW SERIES, 38.-EXCHEQ.

Middlesex Sittings after Michaelmas Term, 1868, it was proved that Thomas Lockett caused his household furniture and stockin-trade to be removed, at five o'clock in the morning of the 12th of August, from his house to the "London General Depository," of which the defendant was proprietor and manager; and that Lockett left the house on the same day with his family; and that he was adjudicated bankrupt on the 20th of August, the plaintiff being appointed creditors' assignee. The defendant advanced money to Lockett on the goods on the 12th of August, but no evidence was given to shew that the defendant then knew how Lockett was situated, or that he had any notice of an act of bankruptcy on the 12th of August.

Martin, B. nonsuited the plaintiff, giving him leave to move to enter the verdict for him for 407., the value of the furniture. A rule was obtained accordingly, on the ground that Lockett had, on the 12th of August, committed an act of bankruptcy within the meaning of section 67. of the Bankrupt Law Consolidation Act, 1849 (1).

G. Francis now shewed cause, contending that neither the removal of the goods from the bankrupt's premises nor the delivery to the defendant was enough to bring the case within the statute, without something in the nature of a transfer or gift, so as to shew an intention of conferring a title to or of passing the property in the goods-Cole v. Davies (2) and Cotton v.

(1) This section enacts, "That if any trader liable to become bankrupt shall depart this realm, or being out of this realm shall remain abroad, or shall depart from his dwelling-house or otherwise absent himself, or begin to keep his house, or suffer himself to be arrested or taken in execution for any debt not due, or yield himself to prison, or suffer himself to be outlawed, or procure himself to be arrested or taken in execution, or his goods, money or chattels to be attached, sequestered, or taken in execution, or make or cause to be made, either within this realm or elsewhere, any fraudulent grant or conveyance of any of his lands, tenements, goods or chattels, or make or cause to be made any fraudulent surrender of any of his copyhold lands or tenements, or make or cause to be made any fraudulent gift, delivery or transfer of any of his goods or chattels, every such trader doing, suffering, procuring, executing, permitting, making or causing to be made any of the acts, deeds or matters aforesaid, with intent to defeat or delay his creditors, shall be deemed to have thereby committed an act of bankruptcy." (2) 1 Ld. Raym. 724.

N

James (3). Besides, there was no demand and refusal proved.

C. E. Pollock and Day, in support of the rule, contended that the case was not governed by Cotton v. James (3), where the facts were altogether different; but that the delivery of the goods in contemplation of bankruptcy was invalid as against the assignee, although the defendant may not have been cognizant of the dishonest intention of the bankrupt-Hall v. Wallace (4), per Parke, B. At any rate, there was evidence to go to the jury-Burroughes v. Bayne (5).

KELLY, C.B. The bankrupt in this case, early in the morning, in order to be screened from observation, caused the goods in question to be removed by placing them in a van which was at the door of the bankrupt's house; and the question is, whether this amounted to a fraudulent transfer or delivery constituting an act of bankruptcy within the statute? There is no provision in any of the statutes in bankruptcy which makes the mere removal of the goods from the premises of the bankrupt an act of bankruptcy; and Cole v. Davies (2) is a decisive authority to shew that the removal of goods from the premises of an alleged bankrupt, where that removal takes place undoubtedly for the delay of creditors and to defeat an execution, and in order that the goods may be put into a place of secrecy and safety, is not an act of bankruptcy. Then was the delivery to the defendant in this case an act of bankruptcy? That depends upon whether it comes within the meaning of the 67th section of the Bankrupt Law Consolidation Act. Cotton v. James (3) is a decisive authority that such a delivery is not a delivery within the clause of the then existing act of parliament, which is exactly the same as the 67th section of the act now in force. In order to make a delivery of goods, whatever be its motive, by one who is afterwards a bankrupt, amount to an act of bankruptcy, it must be a delivery which conveys, or purports to convey, some interest to the

(3) 1 Moo. & M. 273.

(4) 7 Mee. & W. 353, 358; s. c. 10 Law J. Rep. (N.S.) Exch. 133.

(5) 5 Hurls. & N. 296; s. c. 29 Law J. Rep. (N.S.) Exch. 185.

person to whom the goods are delivered. Here it is not pretended that the delivery gave any interest whatever to the defendant in these goods, so that the case comes directly within the authority of Cotton v. James (3). If the contention that the mere delivery to the carman or to a carrier is within the provisions of the act of parliament, because it gives an interest to the carrier, were allowed to prevail there would be no delivery at all, under the like circumstances, which would not amount to an act of bankruptcy; and any person making use of a carrier, or procuring any goods at all to be conveyed by any messenger under the like circumstances, would be doing that which would amount to an act of bankruptcy. I am, therefore, of opinion that the rule must be discharged.

MARTIN, B.-I am quite of the same opinion. I thought it a clear case at the trial, and have continued of the same opinion ever since.

curred.

BRAMWELL, B. and CLEASBY, B. conRule discharged.

Attorneys-Monckton & Monckton, for plaintiff; Rooks, Kenrick & Harston, for defendant.

Slander Costs

County Courts Act, 1867 (30 & 31 Vict. c. 142), s. 5.—Record.

Actions for slander come within section 5. of the County Courts Act, 1867, but the fact that such actions cannot be brought in the county court is prima facie, though not conclusively, a sufficient reason, within the meaning of that section, for bringing them in a superior Court.

Per Kelly, C.B. - The under- sheriff before whom a writ of inquiry is executed has the power of certifying on the record that there was sufficient reason for bringing the action in the superior Court, given to the Judge" by the same section.

Where, after the execution of a writ of inquiry, the plaintiff obtained a rule calling on the defendant to shew cause why the plaintiff should not have his costs, but the rule was not expressed to be drawn up upon reading the record, nor was the nature of

the action stated in the affidavits upon which the rule was moved,-Held, that the records of the Court were always actually or constructively before the Court, and that the Court would therefore take cognizance of the nature of the action as appearing upon the record.

Slander. The defendant not having appeared, judgment went by default, and upon a writ of inquiry, executed before the Under-Sheriff of Middlesex, the damages were assessed at 51.

Anderson obtained a rule calling on the defendant to shew cause why the plaintiff should not be allowed his costs, and why the Master should not be at liberty to tax the same. The rule was drawn up on the motion of counsel, and upon reading the affidavits of the plaintiff and one Carpenter. These affidavits stated that the Under-Sheriff had expressed an opinion that the plaintiff ought to have his costs, but that he did not certify for the costs because he thought that he had no power to do so.

Francis shewed cause.--It does not appear from the affidavits that the action was in fact an action of slander. The record is not in court, and the rule is not drawn up "upon reading the record." Assuming the Court to take cognizance of the nature of the action, it comes within section 5. of 30 & 31 Vict. c. 142, "The County Courts Act, 1867," which is as follows: "If in any action commenced after the passing of this act in any of Her Majesty's superior Courts of Record the plaintiff shall recover a sum not exceeding 207., if the action is founded on contract, or 10l., if founded on tort, whether by verdict, judgment by default or on demurrer, or otherwise, he shall not be entitled to any costs of suit unless the Judge certify on the record that there was sufficient reason for bringing such action in such superior Court, or unless the Court or a Judge at chambers shall by rule or order allow such costs." It is said that this action could not have been brought in the County Court, and therefore the plaintiff is entitled to his costs, and Gray v. West (1) will be relied on; but that case was decided upon facts shewing that there was reasonable ground for bringing the action

(1) 38 Law J. Rep. (N.s.) Q.B. 78; s. c. Law Rep. 4 Q.B. 175.

in the superior Court. The legislature having fixed on 101. as the limit for costs in actions of tort; the plaintiff ought not to be allowed them on the mere ground that the action was for slander.

Anderson supported the rule.

KELLY, C.B.—I am of opinion that this rule should be made absolute. The 5th section of the County Courts Act, 1867, applies to any "action commenced after the passing of the act," and therefore to an action for slander. The first question is, whether we are entitled to look at the record for the purpose of ascertaining the nature of the action. It is said that we are not, because it has not been verified by affidavit nor alluded to in the rule. But I think that on principle the Court is at liberty at all times, and under all circumstances, to look at its own records; and the practice in the analogous cases suggested by my Brother Bramwell is conclusive. When new trials are moved for, it would be impossible to understand the nature of the action or the grounds proceeded on without reading the record; and yet it is never, in this court at least, brought before the Court by affidavit, nor is the rule drawn up on reading the record. We take it from the statement of counsel at the bar, who from their briefs tell us the nature of the pleadings. Then, having the record and the very meagre and imperfect affidavits on which the rule was moved, have we sufficient grounds legitimately before us for giving the plaintiff his costs? The action was for slander, imputing felony in strong and injurious language. We are informed by the affidavits that the jury found a verdict for the plaintiff for 5l., and that the under-sheriff, before whom the case was tried, thought that the plaintiff ought to have his costs, and said that he would have granted a certificate but that he had no power. We are not bound by the undersheriff's opinion upon the facts of the case, which in this case we may possibly think correct, any more than we are upon the matter of law, as to his power to grant a certificate, upon which I think that his decision was erroneous. As to the latter, looking at the terms of section 5. of the County Courts Act, 1867, I think it clear that the word "Judge" means the Judge