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REPORTS

OF

CASES ARGUED AND DETERMINED

IN THE

Court of Bankruptcy.

BY

CHARLES STURGEON, Esq. and EDWARD COOKE, Esq.

BARRISTERS-AT-LAW.

FROM MICHAELMAS TERM, 1838, TO TRINITY TERM, 1839,

BOTH INCLUSIVE.

CASES ARGUED AND DETERMINED

IN THE

Court of Bankruptcy.

COMMENCING IN

MICHAELMAS TERM, 2 VICTORIA.

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This was the petition of May, and it prayed, that the certificate might be stayed, and that the assignees might deliver to May particulars of the account claimed by them from him, that a balance might be struck, in order that May might prove his debt under the fiat, and be at liberty to assent to or dissent from the allowance; and that certain debts, proved under the fiat, and paid before the signature of the certificate by the commissioners, might be expunged; and that, for that purpose, the certificate might be sent back to the commissioners to re-certify. The fiat issued on the 24th of March 1838. In January 1836, May, with one H. Gilbard, entered into partnership with the bankrupt as lime-burners, NEW SERIES, VIII.-BANKR.

coal and iron merchants, which was dissolved on the 26th of December 1836, by mutual consent. The petition stated, that the accounts of the partnership had never been settled, though numerous applications had been made to the bankrupt for that purpose; that after the dissolution of the partnership, the stock in trade and the books of account remained in possession of the bankrupt on his promise to account for the same, which he never did, and the books of the account were now in the possession of the assignees; that May had repeatedly applied to the assignees, for himself and his partner, to deliver up the said books, but without effect; that, since the fiat, May and H. Gilbard had been sued for and had paid large sums on account of the partnership, and that the bankrupt, by reason of such payments and prior advances, was largely indebted to May; that the bankrupt, with May and other persons, had been jointly engaged in mining speculations, and that, in consequence, there had been extensive money transactions between them, the accounts of which, in November 1836, had been rested and balanced by May, and delivered to the bankrupt, shewing a balance due from May to the bankrupt of 5051. 11s. 6d., which accounts the

B

bankrupt returned to May in December 1836 as approved, and signed his name in two places at the foot of the same- This account admitted, J. Malachy." That, by subsequent advances to the bankrupt, and by being a party to several bills, the balance due from the bankrupt to May was 2,224l. 13s., a debtor and creditor account of which had been delivered to the assig

nees.

On the 24th of March 1838, G. Hawtayne, one of the assignees, proved a debt of 578l. 7s. 9d., in which was included a bill of exchange for 3177. 16s. 6d., on which May was liable as indorser; and J. Hicks proved a debt of 9137., and Thomas Gill a debt of 761. 3s. 11d., and Messrs. Harris 1,1967. 7s. 4d., on three bills, drawn by May on, and accepted by the bankrupt. Shortly after his proof, Gill was fully paid his debt of 761. 3s. 11d., and in June following, the bill of 3177. 16s. 6d., part of the proof of G. Hawtayne, was paid by May, and, in August, J. Hicks was paid 100l. 6s. 5d., being that part of his proof for which May was liable, and Messrs. Harris & Co. were paid 1,2001. in discharge of their proof by May, who was liable as drawer of the said bills. On the

11th of September following, the assignees convened a private meeting of the commissioners, without the knowledge of May, and expunged the proof of Messrs. Harris, who had refused to concur with the other creditors in signing the bankrupt's certificate; and, immediately afterwards, at another private meeting, signed the bankrupt's certificate. By the proofs of Hawtayne, Gill and Hicks, who had signed the certificate, not being expunged (although paid in whole or in part), and by Messrs. Harris's proof being expunged, without May's having the opportunity of including the debt paid by him to Messrs. Harris in the balance due to him as aforesaid, the consent of four-fifths in number and value of the creditors of the bankrupt was obtained, which could not have been effected without May's concurrence, had he been able to prove the balance due to him from the bankrupt.

The affidavit of the bankrupt denied that the accounts of the partnership had never been taken, or that numerous applications had been made for that purpose;

and stated, that though there was due to May on the said partnership accounts 568l., yet, upon other transactions, May was indebted to the bankrupt in 17,665l. 11s. 2d. That the bills proved by Messrs. Harris were accommodation bills, and, therefore, properly expunged: that May had been examined by the commissioner, and had falsified the account charged to be so signed by the bankrupt, and had admitted that he had since made alterations therein: that the assignees had proceeded to take out a fiat against May upon the balance so due to the bankrupts; and the affidavit charged May with attempting to stay the bankrupt's certificate, that he might not be able to give evidence against May.

The affidavit of the assignees stated, that there had been several public meetings for proof of debts, but, at none of them, had May made any proof or claim, or attempted or tendered any proof or claim.

Mr. Bethell, for the bankrupt, objected, that the assignees had not been served. The objection was reserved.

Mr. Swanston and Mr. J. Russell, for the petition. The certificate is grossly fraudulent, for it purports to be signed by four-fifths of the creditors, when two of the signatures were those of creditors whose proofs were in a condition to be expunged or reduced at the time of the commissioners' signature; and, if Messrs. Harris's proof had been allowed to remain upon the proceedings, the certificate could not have passed.

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[SIR G.ROSE. Where do you shew, upon your petition, any fraud that affects the bankrupt?]

[The CHIEF JUDGE-The petition states, that the assignees convened the meeting, but does not state the bankrupt was present can you, in the absence of the assignees, discuss that question?]

We go against the bankrupt, who is the only party here. The Court could make no order against the assignees. The bankrupt is here to get his certificate allowed, which is wrongfully obtained. Ex parte Hadley (1) decides, that a partner, with an unsettled account, may petition to stay a certificate. The power of expunging is a statutory power, but has been here exer

(1) 1 Gl. & Jam. 193.

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