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1884.

IN RE WOODALL,

EX PARTE

In Baynard v. Simmonds, 5 E. & B. 59, it was held that "an executor of a judgment creditor is not entitled under section 61 of the Common Law Procedure Act, 1854, to attach a debt due to the WOODALL. judgment debtor before he has made himself a party to the judgment." And, in that case, Lord Campbell said, "the enactment contains a useful extension of the remedies of the judgment creditor, but we must not go beyond what the Legislature has said.” Further, in Boynton v. Boynton, L. R., 4 H. L. Cas. 733, it was decided that "an order, under the modern practice, allowing an executor to continue the proceedings in an action instituted by his testator, which order has been obtained by him after a judgment in favour of his testator, and after notice of an appeal against that judgment, is equivalent to the old order for revivor, and subjects him to the same liabilities. He becomes in effect a substantive party to the suit, and is personally liable to costs." Here the executrix had not obtained the leave of the Court under Rule 23 of Order XLII.: she could not issue execution. And I contend that the only party to issue a bankruptcy notice under section 4, sub-section 2 (g), is the party entitled to issue execution. The Court is inclined to use this part of the Act with great strictness (see Ex parte Chinery, In re Chinery, ante, p. 31: and In re Cohen, Ex parte Schmitz, ante, p. 55). I ask your Lordships to construe the section most strictly. The executrix was not a party to the record: she could not issue execution. Therefore, I contend, she could not put into motion the bankruptcy proceedings.

Sidney Woolf for the petitioning creditor.

If section 4, sub-section 2 (g), is read thus strictly no executor could take proceedings. The object of Rule 23, Order XLII., is when a creditor requires to issue execution. But there is no reason why the same construction should be put upon section 4, sub-section 2 (g). The case of Ex parte Tanner, 1 Mont. & M. 292, shows that "if a petitioning creditor dies before adjudication, his executors may carry on the proceedings." Further, if the debtor was made bankrupt by another creditor, this executrix could clearly make an affidavit of her debt.

[COTTON, L. J.: The argument against you is that you are not the creditor who has obtained the final judgment. You contend

that the word creditor in section 4, sub-section 1 (g) should read "creditor or his executor" has served a bankruptcy notice, &c.]

Under Rule 23 of Order XLII. it would not make me a party to the judgment; it would simply give me leave to issue execution, it would not make me the creditor who has obtained judgment. It will not advance my position under section 4, sub-section 1 (g). If Order XLII. would make me the judgment creditor the argument against me would be very strong. But it does not do so. An executor or administrator represents the testator always. I submit that it is not straining the meaning of the Act to say that the word "creditor" is equivalent to "creditor or his representatives." It is straining it to understand "creditor" as the person who can issue execution.

BAGGALLAY, J.:

1884.

IN RE WOODALL,

EX PARTE WOODALL.

This is an appeal to set aside a receiving order made on Judgment. May 29th last against Woodall. The act of bankruptcy was in accordance with the terms of section 4, sub-section 1 (g), of the Bankruptcy Act, 1883. The question is, whether the party who served the bankruptcy notice was a creditor within this section. The final judgment was obtained by one Houlston, who died. The petitioning creditor was his executrix; and the receiving order was made on the assumption that she, as executrix, could stand in the place of the creditor. The objection is, that inasmuch as the petitioner was not the person who obtained final judgment, but the executrix, it was necessary that she should have obtained leave to issue execution under Rule 23 of Order XLII. It was contended, on the other hand, that in section 4, sub-section 1 (g), the word "creditor" is equivalent to "creditor or his representatives," whoever they may be. If it were not for the words "execution thereon not having been stayed," which are inserted in section 4, sub-section 1 (g), I think the latter argument would be an extremely strong one. But, looking at those words, I have come to the opinion that the provision clearly intends a person who is entitled and in a position to issue execution. The original creditor was in that position. But if an applicant for a bankruptcy notice is the executor of the original creditor, he is not in that position

1884.

IN RE WOODALL, EX PARTE WOODALL

until he has obtained leave to issue execution under Order XLII. Here the executrix had not secured the required permission, and the appeal must therefore be allowed.

COTTON, L. J.:

I am of the same opinion. The act of bankruptcy in question is a statutory one, and it is necessary to look closely at the terms of section 4, sub-section 1 (g). The creditor must do two things: (1) he must obtain a final judgment; (2) he must serve a notice on the debtor. The same person must do both. Then regard must also be had to the words "execution thereon not having been stayed." The person who has done the two things must be in a position to issue execution. In the present case the executrix had not obtained final judgment, and she was not in a position to issue execution. But she could, under Order XLII., obtain leave to do so. The proper course is for the executrix to get an order, which would put her in the position to say she can issue execution. She will then, in my opinion, be a creditor within the meaning of section 4, sub-section 1 (g), and will be entitled to serve the notice. As it is, the provisions of the section have not been complied with, and the appeal must be allowed.

LINDLEY, L. J. :

I am of the same opinion. Until an executor has obtained leave to issue execution under Order XLII., it is impossible for such executor to say he has complied with the provisions of section 4, sub-section 1 (g). The executor has not obtained final judgment; but, by doing something else, he may put himself in the same position as a creditor who has obtained final judgment. If he has not done so, then the words "and execution thereon not having been stayed," show clearly the creditor is intended to be a creditor who is in the position to issue execution. The appeal must be allowed with costs.

Appeal allowed.

Solicitors: T. R. Watson for the appellant.

W. R. Francis for the respondent.

CASES relied upon or referred to :-
Baynard v. Simmonds, 5 E. & B. 59.
Boynton v. Boynton, L. R., 4 H. L. Cas. 733.
Ex parte Chinery, In re Chinery, see ante, p. 31.
In re Cohen, Ex parte Schmitz, see ante, p. 55.
Ex parte Tanner, 1 Mont. & M. 292.

1884.

IN RE WOODALL, EX PARTE WOODALL.

IN RE FRIEDLANDER, EX PARTE OASTLER & CO.
Bankruptcy Act, 1883, Section 4, Sub-section 1 (h).

Act of Bankruptcy-Notice of Suspension of Payment of Debts.
Held :—(1) That where a verbal statement was made by a debtor to
one of his creditors that he was unable to pay his debts in full, such
statement did not amount to a notice by the debtor "that he has
suspended, or that he is about to suspend, payment of his debts," so as
to constitute an act of bankruptcy under section 4, sub-section 1 (h), of
the Bankruptcy Act, 1883.

(2) That although such notice need not in order to constitute an act of bankruptcy be necessarily given in writing (see In re Walker & Son, Ex parte Nickoll & Knight, ante, p. 188), still if it is given verbally it must be a formal notice, and given with the intention of giving such notice.

THIS was an appeal from an order of Mr. Registrar Brougham

rescinding a receiving order previously made by himself against the debtors, upon a bankruptcy petition presented by Messrs. Oastler, Palmer & Co., on April 19th last.

The debtors were leather merchants, carrying on business as Friedlander & Co., in London and Paris, the firm consisting of B. Friedlander, A. M. Elsdale, and E. Roth.

The act of bankruptcy alleged in the petition was that provided for in section 4, sub-section 1 (h), of the Bankruptcy Act, 1883, by which a debtor commits an act of bankruptcy "if the debtor gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts," in support of which the affidavit of one F. Mortimer was read, in the terms stated below.

The receiving order was discharged by the registrar on the ground that as the act of bankruptcy was committed in Paris, and

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IN RE FRIEDLANDER,

EX PARTE OASTLER & Co.

there were bankruptcy proceedings existing there, a discretion was
given to the Court whether it should exercise its jurisdiction or
not.

From this decision Messrs. Oastler, Palmer & Co. now appealed.
R. Vaughan Williams for the appellants.

The appeal raises the question as to what constitutes an act of bankruptcy under section 4, sub-section 1 (h), of the Bankruptcy Act, 1883. In the present case, the debtors carry on business in London and Paris, and the act of bankruptcy is said to have been committed in a conversation in Paris. Then comes the question, Can it be committed in Paris? In support of the allegation there is an affidavit of one F. Mortimer, a creditor of the debtors. [This affidavit of Mortimer was here read to the following effect :That in April last he was instructed by the English creditors of the debtors to go to Paris, and went there on the 16th of that monththat by appointment he saw Friedlander and Elsdale, who were then in Paris, and together with a solicitor had a conversation with them-that Friedlander stated in the presence of Elsdale that he had started in business six or seven years ago without capital, and that he was unable to pay the debts of the firm, but that he offered twenty per cent. dividend-that Friedlander further said, that he expected to obtain assistance from his brother-in-law, but this would not be until some arrangement with his creditors had been made, and that if the offer was accepted, he should consider the balance to be a debt of honour, and would pay it in full afterwards.]

[BAGGALLAY, L. J.: Where are the words that he is "about to suspend." Even if that conversation took place does it come within section 4, sub-section 1 (h) ?]

There is no decision against me. The registrar said it would be sufficient if the conversation had occurred in England and not in Paris. The notice in section 4, sub-section 1 (h), may be an oral notice. I submit that a case may come within the section if a debtor does not use the word "suspend." The intention of the Legislature is to get positive evidence that the debtor's position is

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