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to all executions levied more than two months before the issuing of the commission, whether founded on judgments after verdict, or on judgments by default or confession, the words being general, and not in any way limited or qualified: the 108th section (see post p. 228) applies only to executions on judgments by default or confession, or nil dicit, where the seizure has taken place within the two calendar months before the issuing of the commission. This construction will reconcile the two sections of the act. The 108th section, however obscure in its terms originally, has now received a judicial construction which makes it tolerably clear. The creditor, who has issued execution on a judgment after verdict, though within the two months, is entitled to a preference if the seizure was before an act of bankruptcy; but where the judgment is by default or confession, then, to entitle the creditor to a preference, there must have been a sale as well as a
Per Parke, J. 4 B. & Ad. 263, 4. See also Crosfield v. Stanley, 4 B. & Ad. 87.
Goods of a bankrupt were seized under an execution at the suit of a creditor, before ten o'clock in the forenoon of the 13th of August; the commission of bankrupt issued between twelve and one o'clock on the 13th of October following; it was holdeni that the execution was valid, inasmuch as it had been levied more than two calendar months before the issuing the commission. N. B.—Where the transaction amounts to an act of bankruptcy in itself, it is not protected by this section : e. g. a transfer of goods made voluntarily and in contemplation of bankruptcy, though made more than two months before the issuing of the commission, and in satisfaction of a bona fide debt, is not protected; for by the 3rd section such fraudulent transfer is made an act of bankruptcy. Bevan v. Nunn, 9 Bingh. 107.
By s. 82, all payments really and bona fide made, or which shall hereafter be made by any bankrupt, or by any person on his behalf, before the date and issuing of the commission against such bankrupt, to any creditor of such bankrupt, (such payment not being a fraudulent preference of such cre
i Godson v. Sanctuary, 4 B. and Ad. 255. See also Cowie v. Harris, 1 M.
and Malk. 141.
bankruptcy; and according to Tindal, C. J. delivering opinion of court in Bevan v. Nunn, 9 Bingh. 112, the clause does not apply to any case, unless where a former act of bankruptcy is assumed to have been committed.
ditor,) shall be deemed valid, notwithstanding any prior act of bankruptcy by such bankrupt committed; and all payments really and bona fide made, or which shall hereafter be made, to any bankrupt before the date and issuing of the commission against such bankrupt, shall be deemed valid, notwithstanding any prior act of bankruptcy by such bankrupt committed: and such creditor shall not be liable to refund the same to the assignees of such bankrupt, provided the person so dealing with the said bankrupt had not, at the time of such payment by or to such bankrupt, notice of any act of bankruptcy by such bankrupt committed. And by s. 83, the issuing of a commission shall be deemed notice of a prior act of bankruptcy, (if an act of bankruptcy had been actually committed before the issuing the commission, if the adjudication of the person against whom such commission has issued shall have been notified in the London Gazette, and the person to be affected by such notice
may reasonably be presumed to have seen the same. Notice to the principal is notice to all his agents, if there be reasonable time to communicate that notice to his agents; Mayhew v. Eames, 3 B. and C. 601. Hence, notice to the Bank of England is notice to all its branch banks; Willis v. The Bank of England, 4 Ad. and Ell. 21. Under s. 82, payments really and boná fide made are valid, even in cases where the contract or transaction, upon which they are made, has taken place within two calendar months before the commission. See Coles v. Robins, 3 Campb. 183. Cash v. Young, 2 B. and C. 413. The same point was decided in Hill v. Farnell, 9 B. and C. 45, where a library of books had been purchased of a hop-merchant and paid for, without notice that the hop-merchant had at that time committed an act of bankruptcy, on which a commission was afterwards, and after the sale of the books, taken out. So giving cash for a bankk post bill. But where B. having committed a secret act of bankruptcy, assigned chattels to the defendant, as a security for money lent to B. by the defendant, in trust to permit B. to use them till March, 1833, and then, if the debt were unpaid, to sell them in discharge thereof. In October, 1832, and within two months of this assignment, a fiat issued against B.; it was holden, that this could not be considered as a payment protected by the 82nd section: the word payment applied to a payment of a debt, and not to a loan of money upon the security of a transfer of goods. Cannan v. Denew, 10 Bingh. 292.
By s. 84. no person or body corporate, or public company,
k Willis v. The Bank of England, 4 Ad. and Ell. 21.
having in their possession or custody any money, goods, wares, merchandises, or effects, belonging to any bankrupt, shall be endangered by reason of the payment or delivery thereof to the bankrupt or his order; provided such person or company had not, at the time of such delivery or payment, notice that such bankrupt had committed an act of bankruptcy. And by s. 85. if any accredited agent of any body corporate or public company shall have had notice of any act of bankruptcy, such body corporate shall be hereby deemed to have had such notice.
By s. 86. no purchase from any bankrupt bona fide, and for valuable consideration, where the purchaser had notice at the time of an act of bankruptcy by such bankrupt committed, shall be impeached by reason thereof, unless the commission against such bankrupt shall have been sued out within twelve calendar months after such act of bankruptcy.
By s. 87. no title to any real or personal estate sold under any commission, or under any order in bankruptcy, shall be impeached by the bankrupt, or any person claiming under him, in respect of any defect in the suing out of the commission, or in any of the proceedings under the same, unless the bankrupt shall have commenced proceedings to supersede the said commission, and duly prosecuted the same within twelve calendar months from the issuing thereof.
By s. 108. no creditor having security for his debt, or having made any attachment in London, or any other place, by virtue of any custom there used, of the goods of the bankrupt, shall receive upon such security or attachment more
rateable part of such debt ; except in respect of any execution or extent served and levied, by seizure upon, or any mortgage or lien upon, any part of the property such bankrupt before the bankruptcy; provided that no creditor, though for a valuable consideration, who shall sue out execution upon any judgment obtained by default, confession, or nil dicit, shall avail himself of such execution to the prejudice of other fair creditors, but shall be paid rateable with such creditors (17). This proviso limits the exception, and the
(17) The stat. 1 W. 4. c. 7. s. 7. reciting the words printed in italics, and also, that by reason of such provision, plaintiffs had been and might be deterred from accepting a cognovit actionem, with stay of execution, whereby the expense of further proceedings in such action might have been and may be saved or diminished, for remedy thereof enacts, “that no judgment signed or execution issued after the passing of that act [11th March, 1831,] on a cognovit actionem exception applies only to cases falling within the first part of the section, viz. those of creditors having security. Per Ld. Tenterden, C. J. 6 B. and C. 484. Wymer v. Kemble. In this case the goods of the debtor had been seized under a fi
. fa. sued out upon a judgment of non sum informatus, and delivered to the creditor under a bill of sale by the sheriff; then a bankruptcy followed, and it was holden that he had ceased to be a creditor, having been paid by means of the execution before the bankruptcy. So where after seizure and before bankruptcy, the debtor pays the money to the sheriff's officer, the debt is thereby extinguished, and although the money is in the hands of the sheriff at the time of the bankruptcy, and paid over to the execution creditor afterwards, the assignees cannot recover. Morland v. Pellatt, 8 B. & C. 722. But where the sheriff had made a seizure before act of bankruptcy, but the goods remained in his hands unsold at the time of the bankruptcy, it was holden, that the sheriff was not justified in paying over to the creditor money received by him as the proceeds of the sale, after the bankruptcy. Notley v. Buck, 8 B. and C. 160. See further on this subject in re Washbourn, 8 B. and C. 444.
VII. Of Actions which may be brought by the Assignees of
a Bankrupt, and in what Manner they ought to sue. 1. Money had and received.-An action for
had and received will lie against a creditor of the bankrupta, who,
a Kitchin v. Campbell, 3 Wils. 304. 2 Bl. Rep. 827.
after declaration filed, or delivered, or judgment by default, confession or nil dicit, according to the practice of the court in any action commenced adversely, and not by collusion for the purpose of fraudulent preference shall be deemed within the foregoing provision.” An execution sued out upon a final judgment, after judgment by nil dicit, falls * within this proviso, which comprises all judgments by default, and cannot be restrained to judgments by default by the consent or the collusion of the parties; and the words “obtained by default, confession, or nil dicit,” apply to a judgment obtained before, as well as after, the passing of the act. A plaintiff in execution upon a judgment by confession ceases to be a creditor, having security for his debt within the 108th section of statute 6 G. 4. c. 16. when the goods seized under that execution are sold, even though an act of bankruptcy be committed before the return of the writ. † * Cuming v. Welsford, 4 M. & P. 238. + Higgins v. M‘Adam, 3 Y. & J. 1.
recognizing Wymer v. Kemble.
after the act of bankruptcy, takes out execution against the goods of the bankrupt, and receives from the sheriff the money arising from the sale of the goods; for the law supposes the creditor to have received the same for the use of the assignees in whom the property of the goods is vested, and thence implies a promise to pay. So where a trader became a bankrupt by lying in prison two months (now 21 days) after an arrest , it was holden, that his assignees might maintain an action for money had and received against a person who, after the arrest, and before the expiration of the two months, having had notice that a commission would be sued out against the trader, sold his goods and paid him the produce. In cases of this kind, the assignees have an election to bring either trover or assumpsit. În trover they may recover the full value of the goods at the time they were taken, though the sale may not actually have produced more than half their worth : but in assumpsit, the assignees considering the party selling the goods as their agent, are entitled to recover only what was produced by the sale of the goods. Per Grose and Buller, Js. in King v. Leith, 2 T. R. 144, 145. If the assignees bring assumpsit they affirm the contract, and the defendant, if a creditor of the bankrupt, may set off his debt, Smith v. Hodson, 4 T. R. 211. But the assignees cannot affirm the act of the bankrupt as their agent in part, and avoid it as to the rest, Wilson v. Poulter, Str. 859. Brewer v. Sparrow, 7 B. & C. 313. per Bayley, J., S. P.
By the law of England", if not contradicted by the laws of the country where the property may be, the commissioners may dispose of the personal property of the bankrupt resident here, although such property be in a foreign country. Hence where the defendant being resident in England, and a creditor of the bankrupt in England, after the assignment of the bankrupt's estate, and with full knowledge thereof, attached and afterwards received, by a remittance, money due to the bankrupt in Rhode Island in North America; it was holden, that the assignees might recover the same from the defendant, in an action for money had and received to their use. So where after an act of bankruptcy committed d, but before the assignment, a creditor of the bankrupt in England, and resident in England, with knowledge of the act of bankruptcy, made an affidavit of debt in England, by virtue of which he attached, and after the assignment received, money due to the bankrupt in one of the British planta
d Sill v. Worswick, 1 H. Bl. 665.
b King v. Leith, 2 T. R. 141.
lips v. Hunter, 2 H. BI. 402.