L.C. & L.J.M.

Synge v. Synge.

1874

bounty. If she had intended to prevent the defendant from enforcing the covenant she might have done so, but she has only directed her own executors not to enforce it, and has left the defendant at liberty. At all events the defendant is entitled to recover from the estate of F. H. Synge the difference between the sum of £900 and the value of the £1,000 stock.

Mr. Hemming, for the plaintiff, was desired by the court to confine himself to the last point raised by the appellant: The testatrix considered herself the owner of the whole stock because she had advanced what was substantially the whole value of it. But in fact she disposed of what was not entirely her own, and so raised a case of election. The effect of the will and codicil taken together is that the testatrix, by releasing both the covenant and the debt intended entirely to extinguish the debt and to prevent the defendant from enforcing the covenant as to any part of it. It is not necessary, in order to raise a case of election, that there shall be express words of intention to do so; but the court will take the natural construction of the will: Wilkinson v. Dent (').

LORD SELBORNE, L.C.: It appears to me that the decision of Lord Justice James, sitting for Vice-Chancellor Wickens, is substantially correct; but I think that it needs some alteration so as to make a distinction between the sum of £900 and the difference between that sum and the value of the stock.

The testatrix in her codicil takes notice of the death of Francis *H. Synge since the date of the will, and ex- [132 plains how she means the will to operate with regard to that event; she directs that, on the one hand, his representatives are not to take the £3,000, as they would have done under the provision in the will against lapse; but that, on the other hand, her executors are not to enforce the payment of so much of the debt as was hers either against Francis H. Synge's representatives or against the defendant, Millington H. Synge. It appears to me that the one release was intended to be connected with the other, and not to be independent of it. She did not mean to release the security altogether, but only to the extent of the bounty which she intended for Francis H. Synge. The defendant was to be in the same position under the codicil as under the will; and although the testatrix had in the will taken express notice that there might be a surplus to which she did not refer in the codicil, yet there is in the codicil no indication of any

(1) Law Rep., 6 Ch., 339.

1874

Synge v. Synge.

L.C. & L.J.M.

change of purpose as to that. When she said, "My executors shall not call upon the said F. H. Synge for the payment of any moneys or for the transfer of any stock pursuant to the deed of covenant of the 23d of April, 1858," she must have had in her view the measure of the rights which were vested in her, and she did not, in my opinion, mean to deal with any beneficial interest except her own.

A

The answer to the special case must, therefore, be varied by declaring that the debt of £900 must be declared satisfied, but that the defendant is entitled to enforce against Francis H. Synge's executors the performance of the covenant to the extent of the difference between the sum of £900 and the value of the £1,000 stock at the date of the death of the testatrix. We think there should be no costs of the appeal. SIR G. MELLISH, L.J.: I am of the same opinion. There is no real difficulty about the construction of the will. legacy of £3,000 is left to Francis H. Synge, from which £900 is to be deducted, not for the benefit of the defendant, but for the benefit of the estate of the testatrix. But by the will it is provided that if there is any surplus of the sum of £1,000 stock after payment of the £900, the defendant is to have it. What, then, is the meaning of the codicil? The 133] testatrix, *bearing in mind that on her death her representatives would be entitled to sue Francis H. Synge's executors for the purpose of recovering £900 out of the £1,000 stock, says: "I will and direct that my executors shall not call upon the representatives of Francis H. Synge for payment of any moneys or for the transfer of any stock pursuant to the deed of covenant of the 23d April, 1858." that said for the benefit of the representatives of Francis H. Synge or of the defendant? It appears to me that the testatrix, having substantially the right of suing vested in her, means that the obligation due to her from Francis H. Synge shall not be sued for at all; not that her representatives should not sue, but that the defendant might sue.

Was

Then I agree with the Lord Chancellor that we cannot infer that she intended to alter the defendant's rights or to dispose of any other property but her own. The defendant must be therefore at liberty to sue for the difference between the sum of £900 and the value of the stock.

Solicitors: Mr. Mossop: Mr. Osborn Jenkyn.

L.C. & L.J.M.

Ex parte Jay. In re Powis.

1873

[Law Reports, 9 Chancery Appeals, 133.]

L.C. and L.J.M., Dec. 19, 1873.

Ex parte JAY. In re Powis.

[133

Bankruptcy Debtor Summons-Bankruptcy Act, 1869, ss. 9, 13-Petition for Adjudication-Receiver-Payment of Debt to Petitioner.

A creditor sued out a debtor's summons, and the debt not having been paid or secured, he presented a petition for adjudication, and got a receiver appointed. Soon afterwards the debtor, with the consent of the receiver, paid part of the debt to the creditor, and the creditor accordingly withdrew the petition for adjudication. The debtor had been adjudged bankrupt on the petition of another creditor after the part payment:

Held, that the receiver was a trustee for all the creditors, and had no right to permit the payment to be made to the creditor who sued out the debtor's summons, and that the money must be paid over to the trustee in the bankruptcy.

1

THIS was an appeal from an order of Mr. Registrar Spring Rice, sitting as chief judge in bankruptcy.

On the 3d of October, 1872, G. H. Jay, a creditor of the bankrupt, Henry Powis, a fringe manufacturer, for £3,000, sued out a *debtor's summons against him. The debtor [134 not denying the debt, and having failed to pay or to secure or compound the same, Jay presented a petition for adjudication against him on the 12th of October. On the same day Jay applied for and obtained the appointment of a receiver under the 13th section of the Bankruptcy Act, 1869. It was stated in the affidavit in support of the application, that the debtor was being sued by other creditors, and that in one of the actions the creditor was in a position to sign judgment and issue execution in the course of a day or two.

In this state of things the debtor entered into negotiations with Jay for the settlement of his debt, and on the 15th of October he paid Jay £1,050, and gave him bills for the rest of the debt. This payment was made with the knowledge and consent of the receiver.

On the 24th of October a petition for adjudication was presented by another creditor, upon which Powis was adjudicated bankrupt on the 6th of November, and a trustee was appointed. An order was afterwards made by consent under Jay's petition that the trustee should be associated with the receiver, and that all moneys then in the receiver's hands, and also the sum of £1,050 now in dispute, should be paid into their joint names.

On the 6th of December Jay's petition was dismissed on his application, without prejudice to any order which had been made under the adjudication.

1873

Ex parte Jay. In re Powis,

L.C. & L.J.M.

Under these circumstances, the Registrar, sitting as chief judge, made an order in the bankruptcy declaring that the payment of the sum of £1,050 to Jay was fraudulent and void as against the trustee, and directing that sum to be paid to the trustee with interest at £4 per cent. From this order Jay appealed.

Evidence was adduced to show that the sum of £1,050 was paid out of money received from an insurance office on a fire policy, on which Jay claimed a charge, but the court did not consider that the charge was established.

Mr. Little, Q.C., and Mr. Winslow, for the appellant: The proceeding by debtor summons is a special process created by act of Parliament, and was substituted for the writ of ca. sa. when that was abolished by the Bankruptcy 135] Act, 1869. Its main *object was to give the creditor a speedy way of forcing the debtor either to give security or to pay the debt. The debtor and creditor can come to terms at any stage of the proceedings, and if the debt is ultimately paid, and the petition for adjudication withdrawn, no other creditor can carry it on, and the act of bankruptcy committed on the debtor's summons is not such an act of bankruptcy as can be the foundation of a second petition by another creditor: Ex parte Wier ('). The creditor is therefore dominus litis, and the receiver appointed by the court is his trustee, and not the trustee for the general body of creditors. This is shown by the 93d and 94th sections of the Bankruptcy Act, 1869, when compared with the 133d, 184th, and 194th sections of the Bankruptcy Consolidation Act, 1849. [The LORD CHANCELLOR referred to the 104th rule of the Bankruptcy Rules, 1870, and the 13th Form appended to the Rules.]

If the creditor had applied to have the receiver discharged, this must have been done, and then the debtor might without question have made the payment complained of. It is therefore at most a question of regularity in form.

Mr. De Gex, Q.C., and Mr. Finlay Knight, for the trustee, were not called on.

LORD SELBORNE, L.C.: I entertain no doubt upon this case. In my opinion no greater mischief could be done by those who have the administration of bankruptcy than by their permitting such a transaction to stand, as that which has taken place in the present case-assuming, as I do, that no fund to which Mr. Jay was equitably entitled has been identified. It is practically admitted-I think that, upon the evidence, it could not but (1) Law Rep., 6 Ch., 875.

L.C. & L.J.M.

Ex parte Jay. In re Powis.

1873

be admitted-that no fund has been identified. Therefore we must take this as a simple payment, and the matter stands thus: A gentleman, who I agree, under the Bankruptcy Act, 1869, was the only person to prosecute the adjudication, had presented a petition to make his debtor a bankrupt, and *having done that, he gets the appoint- [136 ment of a receiver, which appointment, according to general principles, and according to the express language of the 104th rule and the 13th form, is an appointment of a man who, on being appointed, becomes an officer of the courtwho is not to part with any portion of that which he does receive except under the direction of the court-who is to account to the court for what he receives, and under the rules of the court (if while he continues in existence as an officer of the court an adjudication takes place) is to account to the trustee who may be appointed under that adjudication in bankruptcy, and to attend upon him as may be necessary for the purposes of the bankruptcy. And, in principle, it is equally clear that so strong and special a power as that of appointing a receiver (which may be accompanied by an injunction also to prevent other creditors from obtaining payment of their debts before an actual adjudication) if exercised by the court can only be exercised in the prospect of and with a view to a future adjudication for the benefit of all the creditors. I do not at all dispute that, consistently with that, the creditor who was at that time the sole petitioner, and who obtained the appointment of the receiver, might have gone to the court of bankruptcy and said that he had settled with the debtor and that nobody else had taken any proceedings and might have applied that his petition might be dismissed, and that the order for the receiver might be discharged, and the receiver himself discharged, and authorized to pay over to the debtor, or in such manner as the debtor and creditor might agree, the money in his hands; and if the court, upon all the facts known to it, thought that the proper order to make, and did make it, from and after the date of such order there would no longer be any receiver, and the receiver would be justified in dealing with the moneys in his hand as the court, by the order discharging him, might have directed. But nothing of that kind was done in the present case. The receiver was appointed, and came under the ordinary obligations of a receiver; every part of the fund was or ought to have been received by the receiver, and I greatly doubt whether, upon the facts which appear, we ought not to regard it as having been actually under his control; but, whether that 8 ENG. REP.

99