The firm was then insolvent. Afterwards the bankrupts saw the same guarantor, who told them that they could not use the 3,000l. with honor, and pressed on them the necessity of returning the money. On the following day the bankrupts returned the box to the London bankers unopened, and suspended payment. In an action by the assignees to recover the 3,000 from the London bankers: it was held, that the pressure of the guarantors, who had an interest in having the money returned, would be sufficient to prevent the repayment from being voluntary, and that there was a pressure from the guarantors which operated on the minds of the bankrupts and induced them to return the money, and therefore the payment was not a fraudulent preference. Edwards v. Glynn, 5 Jur. N. S. 1397; 28 L. J., Q. B. 350. It was held also (by Erle and Crompton, Js.), that the money having been advanced for a special purpose, which had failed, the guarantors had an equitable right to the return of the money; and that the bankrupts therefore had not an equitable and a legal title to the money, and consequently the property in it did not pass to the assignees. Ib.

A trader, being indebted to his bankers, gave them a receipt for 1,000l., purporting to be in full for the purchase of the furniture, plate, wines and effects in his house; but no possession was given of the goods till a year afterwards, when the trader's solicitor applied to the bankers on his behalf for a loan of 10,000l., stating that a creditor of the trader would obtain judgment, on which he could issue execution, but that, if this creditor refused to give the trader time, the bankrupt would protect himself and his other creditors. The day after this communication, and in consequence of it, the bankers sent a man to take possession, which was delivered to him by the trader, who on the same day filed a declaration of insolvency, and sued out a fiat against himself: it was held, that the delivery of possession was not a fraudulent preference. Ex parte Majoribanks and others, 1 De Gex, 466.

The court will not interfere in making an order for the sale of mortgaged property where the circumstances are suspicious as to the mortgage being a fraudulent preference; Ex parte Dewdney, re Davy, 4 Dea. & C. 181; 2 Mont. & A. 72. Where it appeared on the face of the petition of an equitable mortgagee that the deposit of the deeds took place only nine days before the issuing of the fiat, and there was nothing to rebut the presumption of fraudulent preference, the court would not make the usual order for sale of the property, but directed it to be sold and the proceeds paid into court, subject to further order. Ex parte Ainsworth, re Walker, 2 Dea. 563. Where, at the time of a fraudulent preference, the bankrupt was a trader, and there remained due a debt which was then owing, and which would support a creditors' fiat, it seems that such fraudulent preference may be impeached under the bankrupt's

own fiat: it was held, that such a fraudulent preference did not of itself constitute a sufficient ground for annulling such a fiat against the bankrupt's consent, at the instance of a creditor, who proposed to sue out a fresh fiat, especially if there be any doubt as to the competency of such creditor to sue out a fresh fiat. Ex parte Norton, re Robinson, 1 De Gex, 504; see Stevenson v. Newnham, 13 C. B. 301.

A trader was entitled to leaseholds, subject to an annuity for lives granted to an insurance company, who, at the instance of the trader and on his representation that he was in failing circumstances, agreed to release it for less than its estimated value. The trader's solicitor afterwards wrote to the company, stating that difficulties had been met with in attempting to sell the leaseholds by reason of a mortgage, and proposing that the annuity should be sold at the reduced price to an auctioneer who had acted for the trader in attempting to sell the property (at a loss to himself), and who would be "still able to serve the trader in some degree." The company assented, provided the trader signed a written consent. This was done, and the annuity was assigned absolutely to the auctioneer. The trader immediately afterwards became bankrupt. It was held, that the creditors were entitled to the benefit of the purchase on repayment to the auctioneer of the purchase-money and interest, and the latter was ordered to pay the costs of the assignees in a suit instituted by them, in which he insisted that he was entitled to retain the purchase for his own benefit. Baskett v. Cafe, 4 De G. & S. 388.

A tenant for life and his son, who was tenant in tail male in remainder, joined in recovery deeds purporting to assure the entailed property to the use of trustees for a term of years in trust to pay off certain mortgage debts, with remainder to the use of the son during the life of the father, with remainder to the use of the father's wife for life, with remainder to the use of the son for life, with remainder to the use of the sons of the son successively in tail, with remainder to the use of his daughters in tail, with an ultimate remainder to the use of the father in fee. The father executed these deeds with intent to defraud his creditors, but that object was concealed from the son. The father became bankrupt, and the deeds, at the suit of his assignees, were ordered to be delivered up and cancelled. It was held, in a subsequent suit of a grandson (tenant in tail under the recovery deeds), that the deeds were not only void as against the creditors, but that the grandson had no equity as against a purchaser from the son to have the trusts of the term performed. Tarleton v. Liddell, 4 De G. & S. 538; see Shelford on the Law of Bankruptcy, pp. 314-333 (3rd ed.).

(e) As to acts of bankruptcy, see Shelford on the Law of Bankruptcy, pp. 126, 176 (3rd ed.).

court to assess da

linquent di

officers.

165. Where, in the course of the winding-up of Power of any company under this act, it appears that any past or present director, manager, official or other mages liquidator, or any officer of such company, has against demisapplied or retained in his own hands or become rectors and liable or accountable for any monies of the company, or been guilty of any misfeasance or breach of trust in relation to the company, the court may, on the application of any liquidator, or of any creditor or contributory of the company, notwithstanding that the offence is one for which the offender is criminally responsible (ƒ), examine into the conduct of such director, manager or other officer, and compel him to repay any monies so misapplied or retained, or for which he has become liable or accountable, together with interest after such rate as the court thinks just, or to contribute such sums of money to the assets of the company by way of compensation in respect of such misapplication, retainer, misfeasance or breach of trust, as the court thinks just.

(f) See the provisions in 24 & 25 Vict. c. 96, ss. 81-87, post.

falsification

166. If any director, officer or contributory of Penalty on any company wound-up under this act destroys, of books (a). mutilates, alters or falsifies any books, papers, writings or securities, or makes or is privy to the making of any false or fraudulent entry in any register, book of account or other document belonging to the company with intent to defraud or deceive any person, every person so offending shall be deemed to be guilty of a misdemeanor, and upon being convicted shall be liable to imprisonment for any term not exceeding two years, with or without hard labour (b).

(a) See 19 & 20 Vict. c. 47, s. 79.

(b) The guilt of felony and the liability to the punishment Forgery of upon conviction, at the discretion of the court, by penal ser- transfer of vitude for life or for any term not less than three years, or to shares, how punishable. imprisonment for any term not exceeding two years, with or without hard labour and with or without solitary confinement,

Prosecution

of delinquent directors in the case of winding-up

are incurred by the following offences, viz.: forging, altering or uttering any transfer or any forged or altered power of attorney for the transfer of any share or interest of or in the capital stock of any body corporate, company or society established by charter or under any act of parliament; by personating the owner of any such share or interest, and transferring or receiving, or endeavouring to transfer or receive, the dividends thereof. 24 & 25 Vict. c. 98, ss. 2, 3.

Whosoever forges the attestation of any power of attorney for the transfer of any such share or interest in any such stock as are before mentioned, or receives the dividends thereon under such forged power, or utters any such forged power of attorney, is guilty of felony, and liable to penal servitude for any term not exceeding seven years and not less than three years, or to imprisonment for any term not exceeding two years, with or without hard labour and with or without solitary confinement. Ib., s. 4.

167. Where any order is made for winding-up a company by the court or subject to the supervision of the court, if it appear in the course of such windby court (a). ing-up that any past or present director, manager, officer or member of such company has been guilty of any offence in relation to the company for which he is criminally responsible, the court may, on the application of any person interested in such windingup, or of its own motion, direct the official liquidators, or the liquidators, (as the case may be,) to institute and conduct a prosecution or prosecutions for such offence, and may order the costs and expenses to be paid out of the assets of the company (b).

Prosecution

of delinquent

in case of voluntary windingup (c).

(a) See 21 & 22 Vict. c. 60, s. 20.

(b) Every application under this section shall be by petition. Rule, No. 51, post.

168. Where a company is being wound-up altodirectors, &c. gether voluntarily, if it appear to the liquidators conducting such winding-up that any past or present director, manager, officer or member of such company has been guilty of any offence in relation to the company for which he is criminally responsible, it shall be lawful for the liquidators, with the previous sanction of the court, to prosecute such offender, and all expenses properly incurred by

them in such prosecution shall be payable out of the assets of the company in priority to all other liabilities (d).

(c) See 21 & 22 Vict. c. 60, s. 21.

(d) See s. 167, n. (b).

169. If any person, upon any examination upon Penalty of oath or affirmation authorized under this act, or in perjury (e). any affidavit, deposition or solemn affirmation in or about the winding-up of any company under this act, or otherwise in or about any matter arising under this act, wilfully and corruptly gives false evidence, he shall, upon conviction, be liable to the penalties of wilful perjury.

(e) See 21 & 22 Vict. c. 60, s. 21.

Power of Courts to make Rules (ƒ).

lord chan

to make

170. In England the lord chancellor of Great Power of Britain, with the advice and consent of the master cellor of of the rolls and any one of the vice-chancellors for Great Britain the time being, or with the advice and consent of rules (g). any two of the vice-chancellors, may, as often as circumstances require, make such rules concerning the mode of proceeding to be had for winding-up a company in the Court of Chancery as may from time to time seem necessary, but until such rules are made the general practice of the Court of Chancery, including the practice hitherto in use in winding-up companies, shall, so far as the same is applicable and not inconsistent with this act, apply to all proceedings for winding-up a company (h).

(f) See the rules made in pursuance of this act, post. (g) See 19 & 20 Vict. c. 47, s. 95.

(h) Rules have been promulgated under this section, see post, and Rule No. 74, as to the general practice of the court; such rules apply only to proceedings under this act. Rule No. 75.

court of

171. In Scotland the Court of Session may make Power of such rules concerning the mode of winding-up as session in may be necessary by act of sederunt; but, until Scotland to such rules are made, the general practice of the rules (a).

make