CASES

IN

BANKRUPTCY,

BEFORE THE

LORDS JUSTICES AND BEFORE THE FULL COURT OF APPEAL,

DURING THE YEAR 1851.

In re HOLTHOUSE.1

November 5, 10, and 12, 1851.

Bankrupt Law Consolidation Act, 1849-Certificate - Appeal — Notice of Opposition.

A bankrupt was refused his certificate by the Commissioner, for an offence not enumerated in the 256th section of the statute 12 & 13 Vict. c. 106, namely, for systematically buying goods at a small price and short credit, and immediately selling the same at still lower prices. He was also refused any protection except pending an appeal. On an appeal the court refused to grant any certificate, but made an order, by consent of the assignees, giving protection for the person of the bankrupt, but leaving his property liable.

A creditor who had not given three days' notice of opposition under the 198th section, and who was, therefore, refused a hearing, was not allowed to appear before the appeal court to discharge the above order of the Commissioner.

THE petition in this case was presented by the bankrupt, praying the grant of his certificate. The facts were not disputed, and were these: The debts amounted to 10,000l., the property sold by auction realized 1,3577. On the application, by the bankrupt, for his certificate, he was opposed by the assignees, on the ground that he had systematically bought goods at low prices and on short credit, and immediately sold them at still lower prices. The fact of such a course of proceeding the bankrupt did not deny, and it was stated in his own. petition. Mr. Commissioner Fane refused to grant any certificate or protection whatever, excepting during the appeal, and from this decision the bankrupt appealed.

Cooke, appeared in support of the petition, and stated that the

In re Holthouse.

bankrupt had been in business fifty years and was seventy years of age; that Mr. Commissioner Fane, when deciding on the application, expressly stated that his judgment was not founded on the 256th section of the Bankrupt Law Consolidation Act, for that the conduct pursued by the bankrupt did not bring it within any one of the offences there enumerated. On that occasion the assignees had argued that the offence was within the third there enumerated for a fraudulent contracting of debt; but Mr. Fane refused to accede to such an argument, saying that the fraud there meant related to a fraud as against the party who sold the goods or gave the credit. The assignees then contended that the second case in the 256th section met the offence, for that with intent to conceal the state of his affairs he had falsified his books; but that was equally unsuccessful, for Mr. Fane said that the grossness of the bankrupt was made manifest by his having actually kept a full account of his improper dealings, and had he committed the second offence enumerated in the section, the assignees would not have, by such means as they had, discovered his transactions. The words of that section were imperative, for it said, if it shall appear that the bankrupt has committed any of the offences "the court shall refuse to grant such certificate." This court would hardly import into the section any offence which did not come within its words, (and the commissioner himself had said that the bankrupt had not committed any one of them,) and say that he should be punished in the same way as if he had committed one of such offences. The commissioner had acted as if he was bound to refuse the certificate, in which he had acted erroneously. The 198th section gave the Commissioner power either to suspend or refuse the certificate if the conduct of the bankrupt as a trader1 were unsatisfactory, but that conduct must be considered with reference to the offences enumerated in the act. The legislature never contemplated this offence, grievous as that offence was, and therefore did not provide against it; and the term "conduct as a trader" was not governed by any rule of law, nor by any principle, legal, equitable, social, or commercial.

Malins and Cracknall, who appeared for the assignees, stated, in answer to a question from the court, that there was no wish to interfere with the personal liberty of the bankrupt, all that was required being to prevent him ever again pursuing such a course as he had followed, a result which could only be arrived at by leaving his property always liable for his present debts.

KNIGHT BRUCE, L. J. I see no reason for any further interference. An order may be arranged by which, with the consent of the assignees, the personal liberty of the bankrupt may not be interfered with.

Cooke. The bankrupt has had protection pending this appeal, and

1 See the remarks of Knight Bruce, V. C., on the construction of this section in the case of Ex parte Dornford, 20 Law J. Rep. (N. s.) Bank. 7; s. c. 5 Eng. Rep. 242.

In re Cheetham.

no protection can be given him if his certificate is refused. The words of the 256th section are equally plain and peremptory as to that, for it says, " and shall in like manner refuse to grant the bankrupt any further protection."

KNIGHT BRUCE, L. J. Oh yes! The court may grant protection for a short time, and why not for a long time?

LORD CRANWORTH, L. J. The offence of the bankrupt comes as near obtaining money or goods under false pretences as can well be imagined. I do not say whether or not he could be indicted for that offence, nor whether, if indicted, he could be convicted. Of that I give no opinion; but systematically buying at one price and selling at a lower would lead to the inference of such an intention. A more gross case against a bankrupt I cannot well conceive than is here proved, and indeed admitted by him, and I see no reason whatever for saying that he ought to have his certificate.

An order was then arranged as suggested by the court; the assignees giving their consent.

November 10. Rolt, on behalf of a creditor to a large amount, obtained leave to give notice of motion to discharge the order, and on the 12th, with Bagley, made the same; but it appearing that this creditor was not permitted to be heard before the Commissioner, on the ground that he had not given three days' notice of opposition pursuant to the 198th section, the court decided that he could not be heard on the appeal.

LORD CRANWORTH, L. J. It appears to me to be perfectly plain that, as the act of parliament requires three days' notice of opposition to be given, and as it is admitted that no such notice was given, we have no authority to hear this particular creditor. The legislature having said that no creditor shall be heard before the Commissioner to oppose, without giving three days' notice, a multo fortiori a creditor who has not given such notice cannot be heard here.

The motion was, after a discussion on the question of costs, refused, with costs.

In re CHEETHAM.1

November 12, 1851.

Bankrupt Law Consolidation Act, 1849-Jurisdiction-Payment of Money out of Court.

The primary jurisdiction in Bankruptcy being, by the 12th section of the statute 12 & 13 Vict. c. 106, transferred to the commissioners, and the jurisdiction of the Vice-Chancellor

121 Law J. Rep. (N. s.) Bank. 5.

In re Castelli.

under that act having been exclusively appellate and transferred to the Court of Appeal by the statute 14 & 15 Vict. c. 83, the Court of Appeal cannot order the payment of money out of the Bankruptcy Court, unless the application be made by way of appeal from a commissioner.

Elmsley appeared in support of a petition for the payment of a sum of 667. and a few shillings out of the Court of Bankruptcy. The original fund belonged to four persons, infants, of whom the petitioner was one, and two of them having attained the age of twenty-one, they presented their petitions for payment out of court of their respective shares, and the same was ordered accordingly by the Chief Judge in Bankruptcy. The petitioner now having attained his age of twenty-one, asked for his share.

KNIGHT BRUCE, L. J. I made those orders as Chief Judge in Bankruptcy, before the new Bankrupt Law Consolidation Act came into operation. By that statute all the primary jurisdiction of the Court of Bankruptcy is transferred to the Commissioners; while by the statute constituting this court the jurisdiction of the Vice-Chancellor sitting in Bankruptcy, that jurisdiction being appellate only, is transferred to the Lords Justices. I consider, therefore, that on this petition we have no jurisdiction to make the order; but if the commissioner shall on application find any difficulty and decline to make it, then I think we can exercise our authority by way of appeal.

LORD CRANWORTH, L. J., concurred.

In re CASTELLI.1

November 19, 1851.

Bankrupt Law Consolidation Act, 1849-Advertisement of Adjudication. Four partners were adjudicated bankrupts. Two resided abroad. The adjudication was made on the 8th of November. On the 13th notice was given of an application, on behalf of the partners abroad, to suspend the advertisement. On the 17th the meeting was held to show cause against the issue of the advertisement, and the application was then made. The commissioner refused to suspend the issue of the advertisement on the ground that, as the application was not made within seven days from the adjudication, he had no authority, under the 104th section of the 12 & 13 Vict. c. 106, to do so :

Held, upon appeal, that "such extended time" mentioned in the section meant "further or longer time," not exceeding fourteen days; and that the notice having been given within the seven days every thing was in fieri, and the commissioner had authority to grant the application. The matter was, therefore, sent back to the commissioner.

THIS was an application, by way of appeal from a decision of Mr Commissioner Holroyd refusing to stay the issue of the advertisement of adjudication. Four persons, namely, Frank Castelli, Giovanni

121 Law J. Rep. (N. s.) Bank. 5.

In re Castelli.

Baptista Giustiniani, Severio Castelli, and Francisco Franciscowitch Braggiotti, carried on business in partnership in London, and were on the 8th November, 1851, adjudicated bankrupts. Two of the partners resided in Leghorn, the business being carried on in London by the others, the style of the firm being "Castelli, Giustiniani, & Company." On the 13th of November a notice was given, on behalf of the two residing at Leghorn, that an application would be made to the Commissioner, at the meeting to be held on the 17th for the purpose of showing cause against the issue of the advertisement of adjudication, to postpone the issue of the advertisement, on the ground of the absence of those parties who could if present give very material explanations of the accounts, and show that as against them the adjudication ought not to stand. The meeting was held on the 17th, when application was made to the Commissioner pursuant to the notice, but the application being made two days later than the seven days after the adjudication, he held that he had no authority under the 104th section of the Bankrupt Law Consolidation Act, 1849,1 to suspend the issue of the advertisement, and extend the time to the fourteen days specified in that section.

Cairns, in support of the appeal, submitted, that as the notice was given within the first seven days of the adjudication, the requirements of the statute were sufficiently complied with, and if the meeting had been held on the 15th instead of the 17th, they would have been so literally. It was not the fault of the parties on whose behalf the application was made, that the meeting was not appointed earlier; that was a matter not resting with them. The view taken by the Commissioner was erroneous, for he had the authority he decided he had not, and could have extended the time to the period authorized by the act, although the application was not made within the first seven days. The court would also consider the hardship of the case of the appellants, who, residing at Leghorn, had not been served with the notice or duplicate of the adjudication.

1 The 104th section is as follows: "That before notice of any adjudication of bankruptcy shall be given in the London Gazette, and at or before the time of putting in execution any warrant of seizure which shall have been granted upon such adjudication, a duplicate of such adjudication shall be served on the person adjudged a bankrupt, personally, or by leaving the same at the usual or last known place of abode or place of business of such person; and such person shall be allowed seven days, or such extended time, not exceeding fourteen days in the whole, as the court shall think fit, from the service of such duplicate, to show cause to the court against the validity of such adjudication; and if such person shall within such time show to the satisfaction of the court that the petitioning creditor's debt, trading, and act of bankruptcy upon which such adjudication has been grounded, or any or either of such matters, are insufficient to support such adjudication, and upon such showing no other creditor's debt, trading, and act of bankruptcy sufficient to support such adjudication, or such of the said last-mentioned matters as shall be requisite to support such adjudication, in lieu of the petitioning ereditor's debt, trading, and act of bankruptcy or any or either of such matters, which shall be deemed insufficient in that behalf, as the case may be, shall be proved to the satisfaction of the court, the court shall thereupon order such adjudication to be annulled, and the same shall by such order be annulled accordingly; but if at the expiration of the said time no cause shall have been shown to the satisfaction of the court for the annulling of such adjudication, the court shall, forthwith after the expiration of such time, cause notice of such adjudication to be given in the London Gazette," &c.