of 1869, with the following addition :-" Provided that the jurisdiction hereby given shall not be exercised by the County Court for the purpose of adjudicating upon any claim not arising out of the bankruptcy, which might heretofore have been enforced by action in the High Court, unless all parties to the proceedings consent thereto, or the money or money's worth or right in dispute does not, in the opinion of the judge, exceed in value two hundred pounds." In my judgment this provision cannot add anything to the jurisdiction given by the preceding words, but can, at most, only regulate the exercise of the jurisdiction where it exists; and the cases which I have cited as establishing the third proposition are, therefore, unaffected by it. The question in this case does not, in my judgment, arise in the bankruptcy within the meaning of section 102, nor is it necessary to decide it for the purpose of doing complete justice, or making a complete distribution of the property. The trustee does not claim any interest in the property in dispute; and although the decision of this question between Mr. Beesty and Messrs. Glyn & Co. will determine which of them is to prove in the bankruptcy in respect of the value of these skins, just as the decision of the question in Ex parte Smith determined which party was to prove in the bankruptcy for the value of the goods sold by Hopwood & Co., yet, in my judgment, that is not such a question as is referred to in section 102. It might with as much reason be said that if a creditor made a claim. upon a surety for the bankrupt, and the surety alleged that he had been discharged by, for instance, time having been given to the bankrupt, the Court of Bankruptcy had authority to decide that question. The result would be to determine whether the creditor or the surety should be the person to prove against the estate of the bankrupt. The motion must be refused, but without prejudice to any action Mr. Beesty may be advised to bring against Messrs. Glyn & Co., and, under the circumstances, I think there should be no order as to costs. The official receiver will take his costs out of the estate. Motion refused without costs. Solicitors: Stevens, Bawtree & Stevens for Mr. Beesty. Murray, Hutchins & Sterling for Messrs. Glyn, Mills 1884. IN RE LOWENTHAL, EX PARTE BEESTY. 1884. IN RE LOWENTHAL, EX PARTE CASES relied upon or referred to : Ellis v. Silber, L. R., 8 Ch. App. 83; 42 L. J., Ch. 660; 28 Ex parte Dickin, In re Pollard, L. R., 8 Ch. Div. 377; 38 Ex parte Brown, In re Yates, L. R., 11 Ch. Div. 148; 48 Ex parte Smith, In re Collie, L. R., 2 Ch. Div. 51; 45 L. J., Ex parte Armitage, In re Learoyd, Wilton & Co., L. R., 17 Ex parte Price, In re Roberts, L. R., 21 Ch. Div. 553; 47 Ex parte Lyons, L. R., 1 Ch. Div. 494; 41 L. J., Ch. 41; In re Motion, L. R., 9 Ch. App. 192; 43 L. J., Bank. 59; Ex parte Pannell, In re England, L. R., 6 Ch. Div. 335; 47 BEFORE MR. JUSTICE CAVE. 1884. 'June 10. IN RE MCALPINE, EX PARTE MCALPINE. Bankruptcy Act, 1883, Section 170.-Liquidation by Arrangement under the Held :-That in determining whether it shall give sanction to a composition or liquidation by arrangement entered into under Sections 123 and 126 of the Bankruptcy Act, 1869, in accordance with the provisions of Section 170 of the Bankruptcy Act, 1883, the Court or registrar is not bound by the statement of affairs of the debtor put forward and agreed to by the creditors; but that such Court or registrar is entitled to inquire into the statement for the purpose of seeing whether such composition or liquidation is reasonable and calculated to benefit the general body of creditors. THIS HIS was an appeal from an order of the learned judge of the Wandsworth County Court, reversing an order of the registrar of that Court, by which sanction had been given to the resolutions of the creditors of the debtor, McAlpine, for liquidation of his affairs by arrangement. On December 13th, 1883, a petition for the liquidation of his affairs by arrangement was filed by McAlpine; and on December 28th the first meeting of creditors was held, when, according to the statement of affairs put forward by the debtor, it appeared that his liabilities amounted to over 17,000., while the value of the assets were estimated at 1,2007. At the meeting, however, it was resolved that the statement should be accepted, and that the debtor should be discharged; but on the resolutions being submitted to the registrar of Wandsworth County Court, an objection was raised on behalf of one Goldsmith, a creditor to the amount of 1,6007., that the resolutions ought not to be accepted, (1) because they were not passed in the interests of the general body of the creditors; and (2) because the statement of affairs put an excessive value on the assets, which, if realized, would show an estate of practically no value. On March 31st, 1884, notwithstanding these objections, the resolutions were registered by the registrar, with the exception that the debtor was not allowed his discharge. This order of the registrar was subsequently reversed by the learned County Court judge; and against the decision of the learned judge, reversing the registrar's order, the present appeal was lodged. Asquith for the appellant: These proceedings were proceedings under the Bankruptcy Act, 1869; and unless the recent Act of 1883 makes any special provisions to the contrary, they ought to be governed by the Act of 1869. Section 170 of the Bankruptcy Act, 1883, applies without doubt to this case. By that section it is provided that, "after the passing of this Act, no composition or liquidation by arrangement under sections 125 and 126 of the Bankruptcy Act, 1869, shall be entered into or allowed without the sanction of the Court or registrar having jurisdiction in the matter; such sanction shall not be granted unless the composition or liquidation appears to the Court or registrar to be reasonable, and calculated to benefit the general body of creditors." Under the Bankruptcy Act, 1869, the 1884. IN RE statement of affairs must be taken as conclusive after registration; and I submit that, under section 170 of the new Act, it is the MCALPINE, only material which the registrar has to go upon, and that he is not entitled to go behind it. EX PARTE MCALPINE. [CAVE, J.: How can he exercise the discretion given him if that be so?] The ground of objection may be apparent on the face of the statement. (Affidavits were then read with regard to the value of the assets disclosed.) In the case of In re Webb, Ex parte Walter (L. R., 2 Ch. Div. 326; 45 L. J., Bank. 105; 34 L. T. 701), under the Act of 1869, it was decided, that "the meaning of Rule 301 of the Bankruptcy Rules, 1870, is, that on the presentation of a special resolution for liquidation by arrangement to the registrar for registration, the passing of the resolution is conclusive evidence that the debtor's statement of affairs is sufficient; and the registrar has no power to inquire into the sufficiency of the statement. If, however, it is clear ex facie that the statement produced by the debtor is one which the majority of the creditors could not have accepted bonâ fide in the interest of the creditors, this may be taken as an objection to the registration of the resolution; but it cannot be raised after registration. If the statement is a fraudulent one, the proper course for a dissentient creditor to take is to move, after the resolution has been registered, to have the registration vacated. And in Ex parte Hope, In re Hope (L. R., 9 Ch. Div. 398; 47 L. J., Bank. 78; 38 L. T. 762), per JAMES, L. J.: "That the effect of Rule 301 of the Bankruptcy Rules, 1870, is to make the creditors, if they act bonâ fide, the sole judges whether the debtor has given sufficient information as to his affairs." These cases certainly tend to show that the registrar and the County Court judge were not entitled to go behind the statement of affairs. At any rate I submit that it lies on the creditor to show conclusively that if the debtor is driven into bankruptcy it will be more advantageous for the general body of the creditors than if the liquidation arrangement was carried out. Daniel Jones contra : The Bankruptcy Act, 1883, was specially framed to guard against the many hardships which were found to arise under the Act of 1869. Under the Act of 1869 the creditors were completely masters of the situation, and the result of this was anything but satisfactory. In this case the statement of affairs is altogether misleading. The creditors will only get about 2d. in the pound if the liquidation is allowed. There are several cases which show that it has always been considered a wrong course of procedure to pass resolutions for liquidation where the assets are trifling, as they certainly are in this case. In Ex parte Aaronson, In re Aaronson (L. R., 7 Ch. Div. 713; 47 L. J., Bank. 60; 38 L. T. 343), the Court of Appeal decided that "a debtor who has practically no assets distributable among his creditors is not entitled to file a liquidation petition ;" and, further, " that resolutions for a liquidation by arrangement passed under such circumstances ought not to be registered, even though they do not include a discharge to the debtor." I would also refer to the case of In re Staff (L. R., 20 Eq. 775; 44 L. J., Bank. 137; 32 L. T., N. S. 40), and to the case of Ex parte Ball (L. R., 20 Ch. Div. 670; 51 L. J., Ch. 911; 47 L. T., N. S. 213), to the same effect. Asquith in reply. CAVE, J.: This is an appeal from a decision of the judge of the Wandsworth County Court, by which he reversed a decision of the registrar of the same Court sanctioning certain resolutions for the liquidation of the affairs of the debtor by arrangement. Section 170 of the Bankruptcy Act, 1883, rendered this sanction necessary, and it is there provided that "such sanction shall not be granted unless the composition or liquidation appears to the Court or registrar to be reasonable and calculated to benefit the general body of creditors." Under the Bankruptcy Act, 1869, a very large discretion was allowed to the creditors in such circumstances. It is generally acknowledged, however, that the working of the old Act in matters of this kind was anything but satisfactory, and to guard against the evils which were found to prevail the provi M.B. K 1884. IN RE MCALPINE, EX PARTE MCALPINE. |