creditors' assignee. It may be very material for the Court to determine who is the proper person to have the charge of any such prosecution. If the Court has reason to believe that there is probable ground for holding or considering that the bankrupt has committed any of these misdemeanors, it becomes the immediate duty of the Court, under the 223rd section, to commit to some person the duty of prosecuting the bankrupt. Now I am told, and very justly told, that in very many cases it is the fact that, if the bankrupt were offered the opportunity of examination, he might give such an explanation as might remove and take away those probable grounds of holding him guilty upon which the Commissioner might be disposed to direct a prosecution. That is perfectly true; but I must give the Commissioner credit for dealing with the case that might be brought before him with an amount of discretion, and when he sees it is a case in which it may be reasonable to direct an inquiry or to afford to the bankrupt an opportunity of explanation, I must give the Judge that credit, and suppose that a duty so obvious would not fail to be discharged by him; but I cannot for one moment recognize that it is the duty of the Judge to submit the bankrupt to any previous examination. If so, the proceedings would be more similar to proceedings in criminal matters in a neighbouring country than any of us would desire. It has been said that the bankrupt will not have the same opportunity as he would have had before an ordinary police magistrate. I must assume that the Commissioner would not always as a positive rule shut the door to any explanation the bankrupt might be willing to give. If the Commissioner is called upon to exercise the power given to him by the 222nd section in the manner in which a Justice of the Peace is authorized to act, he would, no doubt, exercise it in a similar way. But in all these matters it must be left to the discretion, the good sense and the just and calm judgment of the Commissioner, either to afford an opportunity of explanation or to direct an inquiry, if the bankrupt is willing to submit to have inquiry, or to abstain from doing so, according as under the circumstances of the case he may think most likely to contribute to the interests of justice. But it would be a very sad thing if the power of indicting a bankrupt for a misdemeanor, which may demand the immediate interposition of justice, were delayed by giving to the bankrupt the right to demand an investigation; or if, on the other hand, the bankrupt were placed in the painful predicament in which a man about to be brought before a Court of criminal justice necessarily would be placed if he were brought up and put under the necessity of answering questions which might criminate him, or disclose a state of circumstances in which he would lie under great prejudice if he refused to answer. With regard to the fact of the prosecution being in this sense, and in this sense only, directed by the Court, that the Court commits to a particular individual the right and duty of prosecution, and with reference to the remark that the circumstances of a prosecution being directed must indubitably prejudice the minds of a jury, I again depend upon what I most certainly may depend upon, the direction of the Judge who may preside at the criminal trial that it is the duty of the jury not to allow that circumstance to prejudice their minds. I think the state of the law which makes it the duty of the Court to commit to a responsible person the right and duty of acting as prosecutor, and which also forbids the Court to make a preliminary examination, is most consistent with the principles of English justice, and I think I should be acting inconsistently with those principles if I were to depart from that state of the law. I was at first struck with the language of the order, which states that there is reason for supposing the bankrupt to have been guilty of "some one or more" of the offences set forth in the 221st section of the act of 1861; but upon consideration it is plain that is the best form of language that can be adopted, for if the offences were specified, then the form of the order might involve the bankrupt in considerable prejudice, and place him in a position in which he might not be able to protect himself. I must dismiss this application. The costs will come out of the deposit as far as it will go. The partnership firm of W. & G. being in insolvent circumstances, a deed of dissolution was executed, whereby G. assigned to W. all his interest in the partnership assets, and W. covenanted to pay the partnership debts and indemnify G. from the liabilities of the partnership. Fourteen days afterwards W. & G. were adjudicated bankrupts:-Held, reversing the decision of one of the district Commissioners in Bankruptcy, that the deed of dissolution was fraudulent and void as against the joint creditors, and that the whole of the partnership property, as it existed at the date of the deed, still continued to be joint property. The bankrupts, Messrs. Edwards-Wood & Greenwood, carried on business together in partnership, as brickmakers, at Tame Valley and Kingsbury Wood Collieries near Tamworth, from the 19th of October 1861 to the 9th of December 1863, when, being in considerable difficulties, and there being several writs out against them, they executed a deed of dissolution, whereby Greenwood assigned to Edwards-Wood his share and interest in the leasehold premises belonging to the partnership and also in the stock, plant, machinery, engines, credits and effects of the partnership, and gave him a power of attorney to receive all monies due to the firm; and by the same deed Edwards-Wood covenanted to pay the partnership debts and generally to indemnify Greenwood from all liabilities in respect of the partnership. On the 23rd of December a petition for adjudication in bankruptcy was filed, under which Messrs. Edwards-Wood & Greenwood were adjudicated bankrupts. A petition was then presented, by a joint creditor, on behalf of himself and all other the joint creditors of the firm, praying that the deed of dissolution might be declared fraudulent and void as against the joint creditors, and that it might be declared that, notwithstanding that deed, the assets of the firm remained joint assets to be administered NEW SERIES, 34.-BANKR. as such in bankruptcy, or, in the alternative, that the petitioner might be allowed to prove against the separate estate of EdwardsWood. The petition was heard and dismissed by the Commissioner of the Birmingham District Court of Bankruptcy, and the petitioner now appealed from his Honour's decision. Mr. Bacon and Mr. De Gex, for the appellant. The deed of the 9th of December was not bona fide. At the time of executing it, both partners knew that there must be a bankruptcy, and there were no means of averting it, and the deed was an attempt to convert the joint assets of the partnership into the separate estate of Edwards-Wood. It was a fraudulent gift, delivery or transfer, with intent to defeat or delay creditors, and therefore an act of bankruptcy within the 67th section of the Bankrupt Law Consolidation Act, 1849 Ex parte Wensley, 1 De Gex, J. & S. 273; s. c. 32 Law J. Rep. (N.s.) Bankr. 23. A partner can no more alien his share of the joint assets to his co-partner than to a stranger. In Leake v. Young (1) an assignment by way of a counter-security to a person who agreed to pay a composition to the creditors of the assignor was held to be an act of bankruptcy. And the case of Ex parte Zwilchenbart, 3 Mont. D. & D. 671; s. c. 13 Law J. Rep. (N.s.) Bankr. 19: and, on appeal, nom. Re Marshall, De Gex, 273, shews that the present case does not come within the principle of the decisions in Baxter v. Pritchard, 1 Ad. & E. 456; s. c. 3 Law J. Rep. (N.S.) Q.B. 185, Rose v. Haycock, 1 Ad. & E. 460, which only establish that an assignment of a bankrupt's whole property by way of bona fide sale is not an act of bankruptcy. The cases of Ex parte Ruffin, 6 Ves. 119, go no further than to shew that a bona fide transaction, which this is not, will be supported. (1) 5 El. & B. 955; s. c. 25 Law J. Rep. (N.S.) Q.B. 266. E The LORD CHANCELLOR.I will state my present impression now, but I reserve my final decision till a future occasion. Upon the statements contained in evidence in the case, I think it quite clear that both these gentlemen were insolvent as a firm, and also insolvent individually, upon the 9th of December, which is the date of the assignment. Then, being so insolvent, they entered into a mutual contract having for its object the conversion of their joint property into separate property. Now, first of all, taking the principle of the common law which is embodied in the statute of the 13 Eliz., and applying that to the transaction, I think it was idle for the one to make, or for the other to accept, an assignment of that description. Taking again the same principle, and applying it to the language of the 67th section of the Bankrupt Law Consolidation Act, 1849, I think it clear that this assignment was fraudulent within the meaning of the words of that statute, because it had for its immediate and necessary object and consequence the alteration of the property in such a manner as would defeat or delay the joint creditors. The joint property is taken out of the reach of the joint creditors, if effect be given to that assignment. Thirdly, having regard to the principle that a voluntary assignment is in this sense a fraudulent assignment, if I regard the transaction as a conveyance by one partner alone, I cannot look at it as a conveyance for good or valuable consideration, seeing that the covenant by the assignee of the partner was a covenant entered into by a man in a state of insolvency, and in this sense being voluntary, it would be fraudulent within the meaning that has been applied to this term. My strong impression, therefore, is, that this transaction, if it had been judicially decided upon before the statute that introduced these words, "fraudulent grant or conveyance of any lands, tenements, goods, or chattels, with intent to defeat or delay creditors," the transaction could not have been denominated a real, that is, a bona fide transaction, and therefore I think it would not have been held valid according to the purport of that judgment of Lord Eldon in Ex parte Ruffin (2); for 1 regard the words "bonâ fide" as being nothing more than a short expression of that principle which has been expanded more fully into the form which is now found in the 67th section of the act of 1849. Upon these grounds, therefore, my strong impression is, that the transaction cannot stand. It is an unfortunate attempt to make a conversion of property; and the subject-matter of the intended assignment, not being converted, remains, as it was at the date of the bankruptcy, partnership property. This is the impression I have formed, and, having regard to the extremely inconvenient and disastrous consequence that would follow from holding that it is competent to partners in the situation in which these gentlemen found themselves to effect a conversion of property with all the consequences to which that conversion might be made to lead-having regard to this great public mischief and inconve nience I think that my decision will be the wisest, as I believe it is the most correct according to the true interpretation of the statute. But I will mention the case again. (2) 6 Ves. 119. The LORD CHANCELLOR (April 22).— This is an appeal from an order of one of the country commissioners refusing the petition which was presented in this bankruptcy by a gentleman of the name of Mayou, on behalf of himself and all other the joint creditors of two bankrupts. The bankrupts, Mr. Wood and Mr. Greenwood, were partners. Their business was that of brickmakers, and they also held a lease, or agreement for a lease, of a colliery that was expected to be a profitable work. It appears that in the month of August 1863 the partners were in great difficulties and embarrassment. In the month of November 1863 a trader-debtor's summons was taken out against them for a debt of 2501.; and, several writs demanding large sums of money issued against them. On the 9th of December 1863 they went together to a gentleman of the name of Goode for the purpose of inducing him either to renew certain bills which he had accepted for the accommodation of the bankrupts, or to make a further advance of money. Mr. Goode, it appears, declined to comply with that application; whereupon the bankrupts determined to dissolve partnership, and a deed was prepared and executed on the same day, by which Mr. Greenwood assigned the whole of the property to Mr. EdwardsWood, taking from Mr. Edwards-Wood a covenant to pay the debts of the partnership. On the examination of the evidence, I am satisfied that, at the time of the execution of this deed, the partnership was insolvent and each of the partners was insolvent. There might have been some expectation on the part of Mr. EdwardsWood, that, if he succeeded in obtaining advances, the colliery might be profitably worked. In the event, that did not turn out to be the case; and I find, therefore, at the time of the deed, that the actual condition of the partnership was that of insolvency, and that the same thing is also to be concluded of the separate estates of each of the partners. The question that arises under these circumstances is, whether it is competent to Mr. Greenwood to make, and to Mr. Edwards-Wood to receive, an assignment of the partnership property which would have the effect of converting the joint estate into the separate estate of Wood, and therefore, of withdrawing from the joint creditors that property to which they were entitled, and also of taking from Greenwood's separate creditors any separate property or interest that Greenwood might be found to be entitled to in that joint property after the joint debts were paid? The case was learnedly argued with reference to several decisions of Lord Eldon; but I take it that the principle of all the decisions is that which is shortly stated by Lord Eldon, in the case of Ex parte Williams (3), in which he very concisely states, that every one of these transactions must depend entirely upon the bona fides. The question, therefore, that I have to answer is simply this, whether an assignment of this nature can be made bona fide by a partner when the partnership is in a state of insolvency, and the partners themselves are equally insolvent in their separate character? Now, the principle of law embodied in the 13 Eliz., and also the principle which is expressed and declared by the 67th section of the Bankrupt Law Consolidation Act, 1849, entirely forbid my holding that this assignment was anything but a fraudulent conveyance, fraudulent against creditors, a transaction which cannot have effect given to it, because it would have the effect of delaying and defeating the just creditors of an insolvent person in their attempts to recover and make available the property of that person. I, therefore, applying that test to the matter, hold that there was no bona fides in this transaction, that the assignment was fraudulent, that it was void, that it did not operate as a conversion of the bankrupt's property into the separate estate of Wood, that the whole of the property as it existed belonging to the bankrupts at the date of that deed must still be considered as remaining the joint property, and must be administered and distributed as such under the bankruptcy among the joint creditors. I, therefore, reverse the order of the Commissioner, and make a declaration to that effect, which is substantially in conformity with the prayer of the petition. Mr. Daniel.-The costs will come out of the joint estate? The LORD CHANCELLOR.-Yes. (3) 11 Ves. 3. Protection-Arrest on Final ProcessBankrupt Law Consolidation Act, 1849, section 112. The first part of the 112th section of the Bankrupt Law Consolidation Act, 1849, empowering the Court of Bankruptcy to give protection from arrest to a bankrupt not in prison at the date of the adjudication has no retroactive operation; and the Court has no power under that part of the section to release from prison a bankrupt who was in custody under final process at the time of obtaining his protection. And, semble, the latter part of the same section giving the Court a discretionary power to order the release of a bankrupt who having surrendered and obtained his protection, is in prison for debt at the time of obtaining such protection, does not apply to the case of a bankrupt who has passed his last examination, and has been taken in execution upon final process while without protection. A bankrupt passed his final examination, and obtained his order of discharge, suspended for twelve months, with protection for three months renewable from time to time on giving notice to the assignees and opposing creditors. After the expiration of the three months the bankrupt was taken into custody under an execution, and he then applied, upon notice, for a renewal of his protection and a release from custody. He obtained a renewal of the protection; but upon the application for a release from custody, it was held, affirming the decision of one of the Commissioners, that the Court had no power under the first part of the above-mentioned section to grant the application, and that whether it had or had not a discretionary power under the latter part of the same section, it was not a case for the exercise of that discretion. This was an application, by way of appeal from a decision of Mr. Commissioner Holroyd, refusing to order the release of the bankrupt from the custody of the Sheriff of London. The bankrupt was adjudicated, on his own petition, on the 6th of August 1863, and after several adjournments, passed his last examination on the 15th of December 1864, and obtained his discharge, suspended for twelve months, with protection for three months, renewable from time to time on giving notice to the assignees and opposing creditors. The protection expired on the 15th of March 1865. No notice of application for a renewal of protection was given, and on the 21st of March 1865 the bankrupt was taken into custody by the sheriff of London under an execution issued at the suit of Mr. G. N. Strawbridge. The bankrupt then caused notice to be served on the detaining creditor and the assignees of his intention to apply to the Court for his immediate release from custody, and upon the opposing creditor of his intention to apply for a renewal of protection. On the 24th of March the learned Commissioner. granted renewed protection for six weeks, but upon the application for his release from custody, his Honour held that the 112th section of the Bankrupt Law Consolidation Act, which was mainly relied upon, did not apply, and that the protection would be valid only as against future detainers, and as the bankrupt was without protection when his arrest was effected, the Court had no power to release him, but he must be left to apply, should he think proper, to the Court out of which the process on which he was arrested had issued. Accordingly he took out a summons before a common law Judge at chambers, which came on to be heard, on the 30th of March, before Lord Chief Justice Erle, who refused to make any order, holding that he had no power to order the discharge of a bankrupt who had been arrested while without protection. The bankrupt now appealed to the Lord Chancellor from the decision of the learned Commissioner. to Mr. Sargood, for the bankrupt, referred The Bankrupt Law Consolidation Act, 1849, (12 & 13 Vict. c.106.) s. 112 (1). (1) This section enacts that "If the bankrupt be not in prison or custody at the date of the adjudication he shall be free from arrest or imprisonment by any creditor in coming to surrender, and after such surrender during the time by this act limited for such surrender, and for such future time as shall be allowed him for finishing his examination, and for such time, after finishing his |