Page images

the latter is bound to restore the title deeds to the trustees on the vendor's insolvency (Kellar's Trustees vs. Edmeades, 3 J. 25). If, however, the seller has not the dominium, or full ownership, of landed property, but a mere right to claim transfer of the land from a third party, and thereafter, before receiving transfer, sells the land, or, in law, his right to the land, the purchaser from him of such right is entitled, on the vendor's subsequent insolvency, to claim transfer from the vendor's trustee, inasmuch as the personal right which the vendor had to claim transfer was sold by him to the purchaser before the vendor's insolvency (Van Aardt vs. Hartley's Trustees, 2 M. 135).

The completion of a building contract by an insolvent, after insolvency, is for the benefit of his creditors (Thomson Brothers & Co. vs. Cumming and Nourse, 3 M. 249).

The trustees of a factor, upon his insolvency, are not entitled to retain, as against the factor's principal, goods which the latter can trace to have been consigned by him to the factor, to be sold by the latter as factor, which at the date of insolvency are in the factor's possession. The property of the consignor forms no part of the factor's estate. If the factor has sold goods of the principal, and has taken bills in his own favour in payment, which remain in the factor's hands at the date of sequestration, the principal is entitled to these bills to the extent of the balance remaining due on account of the proceeds of the goods consigned to him and not paid, or remitted for before the insolvency. The principal's rights are not affected by the fact that the factor has credited the principal with the price of the goods, as sold, in his books, or by an agreement that the factor should receive a del credere commission, or by the stating of an account-current between the principal and the factor, or by an action brought by the principal for the balance of such account-current before the surrender of the factor's estate (Chiappini & Co. vs. Jaffray's Trustees, 2 M. 192; Russouw's Trustees vs. Becker, 2 M. 199).

If a debtor is sued, and tenders a certain amount in satisfaction of the claim, which he pays into Court, such money, on judgment being given for the creditor, belongs to him, and does not vest in the debtor's trustees upon the debtor's subsequent insolvency (De Roubaix's Trustees vs. Breda's Curator, B. 1876, p. 196).

The interest of certain property was left by will to a person during his lifetime, and the will provided that on his death the property was to go to other persons. He became insolvent. It was decided that the interest of the inheritance vested in his trustees, and that the insolvent was not entitled to any portion of the interest for his maintenance (Hiddingh's Trustee vs. Colonial Orphan Chamber, 2 J. 273; Zeederberg vs. South African Association, 2 J. 431).

27. During the period which shall intervene between the time of the granting of the order for the sequestration and the making of the order confirming the liquidation account and the final plan of distribution, the insolvent, so long as he shall not have been rehabilitated (except in the certain cases to be hereinafter mentioned), shall be absolutely incapacitated to acquire or possess as against his trustee, or as against any other lawful administrator

of his estate, any property whatsoever, whether movable or immovable, personal or real, or any right to any such property: or to alienate, mortgage, or pledge any property belonging to the estate, so as to bind his trustee or other lawful administrator of his estate.

Neither shall it be lawful to attach such estate or any portion thereof during the period aforesaid.


VESTING OF THE ESTATE. See the cases mentioned under § 26.

FOREIGN INSOLVENCY.-The trustee of a foreign bankrupt, duly appointed in accordance with the law of the bankrupt's domicile, is recognised as such in the Transvaal, and is entitled to all the bankrupt's goods found in the Transvaal (Ex parte Celliers, 2 K. 102; In re Hope, K. & B. 25; In re Zeederberg, 5 S. 307).

DEALINGS DURING INSOLVENCY. After the sequestration of his estate, and before the confirmation of the liquidation account, an insolvent who had no leave to trade paid money to and discounted promissory notes belonging to his estate with the Standard Bank, in the name of a nominal partnership, but really in fraud of his insolvent estate. Having thus obtained credit from the Bank, he drew cheques against it, which cheques the Bank paid. It was decided that the dealings of the insolvent with the Bank were void, and that the Bank had no defence against the claim of the trustee to recover the property of the estate received by the Bank (Davis' Trustee vs. Standard Bank, 5 E.D.C. 48).

If, during his insolvency, and before the confirmation of his final account, an insolvent purchases landed property, and mortgages the same in security of moneys advanced to pay off the purchase price, his trustees, if they claim the property as having vested in the insolvent estate, are bound to take it subject to the mortgage upon it (In re Magodas, 2 M. 344; Warner's Trustees vs. Wicht, 4 J. 463).

EFFECT OF FOREIGN INSOLVENCY.-A foreign order of sequestration has, per se, no effect upon immovable property of the insolvent situated in the Transvaal. But the Supreme Court has the power, acting upon grounds of comity, to recognise and give effect to such an order in respect of such property. This power is in the absolute discretion of the Court, and will only be recognised in cases in which no prejudice can be entailed to Transvaal creditors (Ex parte Stegmann [1902], T.S. 40). See also Leslie's Trustees vs. Leslie ([1903], T.S. 839).

28. And during the aforesaid time the insolvent shall in no wise be able to bind himself, except with the consent in writing of his trustee, or other lawful administrator of his estate.

Provided always that any insolvent shall be competent to pass a valid title in pursuance of any alienation as above provided, while acting so far as he shall be authorised in writing so to do as the mandatory or agent of his trustee, or other lawful administrator of his estate, or with the written consent of the latter as the mandatory or agent of any other person by whom he shall have been authorised in writing so to do.

The insolvent shall likewise be entitled, for the support of himself and of his family, to carry on any trade, and to this end effectually to deliver to any person movable goods or effects in pursuance of any real and bona fide sale for a just price duly paid, or to pass title to any money paid by him in cash for any matter or thing purchased by him: provided always that his trustee or other lawful administrator of his estate shall be able to claim from the said insolvent for the benefit of the creditors, if necessary by legal process, any profits made by him by means of such trading, not strictly necessary for the support of himself and his family.

He shall also be entitled to receive and sue for, in his own name, the wages or reward of his work and labour, or that of any of his family, or any pension granted for work or service already performed, or so much thereof as the Court shall adjudge.

The insolvent shall also be entitled to exact damages claimable by reason of any insult or any personal injury done to such insolvent or any member of his family. All moneys paid to him in this wise, and all goods purchased by him with such moneys, shall be for his personal use, and remain free from the control of his trustee or other lawful administrator of his estate.

Any policy of life insurance by him bonâ fide effected for the benefit of his wife or children at least two years before the granting of any such order of sequestration, shall be excluded from the sequestrated estate, and, saving all lawful rights obtained thereto by third persons, be reserved to the insolvent.


If an insolvent acquires property and carries on business without obtaining his rehabilitation, a creditor who has proved at the time of the insolvency, but received no dividend, may apply to the Court for an order of attachment against the insolvent's property subsequently acquired, under § 143 of the Transvaal Law, so long as the insolvent's estate has not been rehabilitated (Bartholomew vs. Stableford, 17 C.L.J. 68).

If the creditors in an insolvent estate pass a resolution authorising the trustee to sell landed property in the estate at his discretion, such property may lawfully be sold to and purchased by the insolvent, who will be liable to repay the purchase price after his rehabilitation (Gie vs. Weels, 1 R. 215). The insolvent, before his rehabilitation, cannot, without such a special resolution of creditors, purchase and acquire any property belonging to his insolvent estate (Beyers' Trustee vs. Piton & Beyers, 2 J. 373).

An insolvent performed certain work and labour for a Syndicate, the result of which was the sale of certain claims on terms very advantageous to the Syndicate. The Syndicate obtained the greater

portion of the purchase price in shares, of which 500 were given to the insolvent as remuneration for his work. His trustee applied, before confirmation of the insolvent's account, for an order restraining him from disposing of the 500 shares; but it was held that the insolvent was entitled to retain the shares as against his creditors (Hall's Trustee vs. Hall, 6 J. 190).

If a trustee gives an insolvent written leave to trade in his own name, the trustee cannot claim any property acquired by the insolvent by virtue of such leave to trade (Grady's Trustee vs. Grady, 8 J. 279). In this case the creditors did not join in claiming, but the Court held that the trustee was estopped from claiming by his written leave.

With the proceeds of his work and labour an unrehabilitated insolvent, who had not obtained leave to trade, acquired certain shares, which he sold, receiving a promissory note for the price. He was held entitled to provisional judgment against the purchaser on the note, the trustee making no claim to the shares or money. The Court decided that the purchaser could not shelter himself behind the trustee's rights, if any (Stewart vs. Barling, 7 J. 1).

A debtor surrendered his estate, but no creditors proved under the sequestration, and no trustee was elected. Some ten years later the debtor bought for his own use goods at plaintiff's shop, for which he obtained credit. On being sued for the price, the debtor pleaded his previous insolvency in bar. This was held to be no defence, inasmuch as an insolvent is liable for necessaries bought for his own use (Macfarlane vs. Brunette, 13 J. 272).

The trustee of an insolvent estate cannot claim, as part of the assets of the estate, letters patent obtained by the insolvent for an invention made by him since his insolvency (Boosè's Trustee vs. Boosè, 9 J. 467).

29. The execution of all judgments against the insolvent or his estate shall be suspended from and after the time of the granting of any order of sequestration duly lodged at the office of the High Sheriff or any of his deputies, and for as long as the sequestration shall continue.

If any insolvent shall be imprisoned by reason of any order of civil imprisonment, he shall upon petition to the High Court, or to any Circuit Court to that effect, be discharged from such imprisonment, unless the Court decide otherwise.

Any property belonging to the insolvent under attachment in the execution of any judgment as above, or the proceeds thereof, shall be returned to the sequestrated estate.


ln case of voluntary surrender, the Sheriff cannot, after the debtor has given notice of intention to apply for surrender, pay over the proceeds of an execution sale without an order of Court, pending the result of the application to surrender (In re Buys, 5 E.D.C. 247). But the Court will order a sale in execution to proceed, where the debtor is not acting bona fide, and delays to file his schedules for inspection (Nelson & Co. vs. Whiting, 4 E.D.C. 322).

If a debtor, who is detained under an order of civil imprisonment, surrenders his estate, the creditor who imprisons him must have notice of any application for the debtor's release (In re Schenk, B. 1876, p. 8).

30. Any creditor in whose behalf a judgment as hereinabove stated has been obtained, shall be entitled to prove his debt and the costs by him incurred in obtaining such judgment upon the sequestrated estate.

He shall be entitled on the distribution of the estate to a preference on all goods attached in manner as aforesaid, or the proceeds thereof, for the costs of the writ of execution and the execution of the same, but not for the amount of the judgment debt, or of costs of suit by him incurred before the suing out of such writ of execution.

31. And all actions pending against any insolvent for any debt provable against his estate, and all proceedings therein, shall, upon any order being made for the sequestration of such estate, be stayed.

And it shall be lawful for the plaintiff in any such action to prove his debt, together with the taxed costs of suit incurred up to that time against the sequestrated estate.

All actions pending against the insolvent for damages alleged to have been sustained by any injury or personal wrong, or breach of any contract committed by him, such damages being still unascertained, or for the recovery of any claim unliquidated as to its amount, and all proceedings therein, shall, upon any order being made for the sequestration of his estate, be stayed until a trustee shall be elected for the administration thereof, and thereafter may be proceeded with against the latter.

The judgment awarded by the Court, together with the taxed costs of suit, shall be a debt provable against the sequestrated estate.


A plaintiff claimed a debt due to him by a deceased person from the executors of the latter. The Cape Supreme Court referred the matter to the Master, and, when that official reported favourably, gave judgment for the plaintiff. It afterwards came to the notice of the Court that pending the report of the Master the estate of the deceased was surrendered as insolvent by his trustees. The Court thereupon declared that the judgment in favour of the plaintiff, obtained after the surrender, was null and void, as the effect of § 23 of the Cape Ordinance (identical with § 31, above) was that the Court had no power to give judgment after the date of surrender, the action against defendants. in their capacity as executors being terminated by the surrender (Norden. vs. Norden's Executors, 3 M. 316).

« EelmineJätka »