1806. contract, when they pleased, and thus they might have

5.- chosen whether they would or would not employ or, 'The King

versus 'appoint any person to fill his place, or rather to execute the Inhabitants, the of MEĻSHAM. buints the same duties.


Hovil and others, assignees of WARDELL (a bankrupt)

against Josepi BROWNING.-- January 31st. Stat. 19 Geo. II. c. 32, s. 1: TVhere money belonging to a bankrupt was, after a secret act of bankBankrupt and Creditor.

ruptcy,attached in the hands of a garnishee, by the custom of foreign Foreign attach- : alackynents in London, and paid over by him ;' held, that such ment. Pay. ment in

receipt of money was not protected by stut. 19 Geo. II. c. 32, s. 1, course of trade. as a receipt of money under compulsion of law; for that statute

extends only to payments by the bankrupt himself in the ordinary course of trade, and not to payments by other persons unauthorised by him; and, therefore, the assignees recovered of the person re

ceiving such money, under the foreign attachment, as for money · had and received to the use of the bankrupt.


Hovit, and THIS was an action of assumpsit for money bad and

received by the defendant for the use of the plaintiffs, Baowning. as assignees of Wardell, a bankrupt. The defendant

pleaded the general issue, and at the trial before Lord ELLENBOROUGH, C. J. at the sittings at Guildhall, after last Trinity. Term, a verdict. was found for the plaintiffs for $671. 16s. 64. subject to the opinion of the court upon the following case. In November, 1802, Wardell being a trader, became indebted to the defendant in 3671. for goods sold and delivered, and on the 27th January, 1803, set sail in a ship of which he was the sole owner, with a cargo for the West Indies, having only a few days before committed a seeret act of bankruplcy. ,lo the month of July, 1803, insurans ces to the amount of 3,400k on the ship and cargo, were effected for the bankrupt by M. de Beaume, a po

Others versus

licy-broker, residing in the city of London; and, in 1806. the said month of July, 1803, the ship and cargo were Hovil and captored by the French. On the 20th January, 1804, O the defendant brought an action in the Mayor's court Browning. of London against the bankrupt; and attached the sum of 5671. in monies numbered in the hands of De Beaume, who had received the amount of the policies of insurance froin the underwriters, and the defendant having on the 28th of the same month obtained a regolar judgment by default in that action, received the sum of 3671. from De Beaume. The bankrupt returned to England in February, 1803, and on the 9th of March following, a cominission of bankruptcy was issued against him, under which the plaintiff's were chosen assignees, and an assignment to them' was regularly executed. De Beaume retained from the plaintiffs as such assignees, out of the monies he had collected on the policies, the amount of the payment he had made to the defendant. Wardell had been a bankrupt twice before; viz. once in the year 1786, and again in the year 1788, and had obtained his certificate under those commissions ; but had not paid a dividend of 15s. in the pound, under the last of them, and his creditors at that time still remain unsatisfied. Question, whether the plaintiffs are entitled to recover ?


Sedgwick, for the plaintiffs, stated that the ques. tion, in this case turned upon, whether the judgment under the foreign attachment authorised the payment to the defendant, under the exception contained in the stat. 19 Geo. II. c. 92, s. 1, to protect payments made in the course of trade; and he cited Bradley and others as. signees of Bradley v.Clark, * Copland and others v. Steint. The circumstance of proceeding at law, against the

* & Term Rep. 199.

+ 8 Term Reports, 199.


1806. bankrupt proves that the party knew hia to be itt:

insolvent circumstances. By the process of the foreign Hovil and Others" attachment, a debt due to the original defendant, from

the garnishee, is atlached in his hands, and the BROWNING.

statute does not protect the payment of any debt, by compulsion of law, by another person, but only the payment of money in the usual course of trade. He cited Vernon v. Hall.* Hunter v. Potis,ť and Sill v. Worswick. I

LE BLANC, J. “ They were both cases of creditors, who were cognizant of the bankruptcy.

The distinction between money paid after the act of bankruptcy, and before the assignment does not prevail in this case ; and it is wholly in material whether the money was received after the commission, although that was a circumstance relied upon in some of the cases; for the statute applies to the time of the act of bankruptcy, and the properly vests in the assignees from the bankruptcy. It was also objected at the trial, that Wardell having been a bankrupt twice, and not having paid 15s. in the pound on the last commission, he could not be a bankrupt a third time, because his future effects are liable to the creditors under the second cominission ; butafier the certifcate is allowed, the assignees bave no further claim upon the property whatsoever. The goods remain the effects of the debtor, subject to the unsatisfied claims of the resis due of the creditors, under the second comission, and if this claim should not be enforced the property is in him.”

LE BLANC, J. “The ground is that the assignees

* 2 Term Rep. 648. † 4 Term Rep. 182.

II H. Bluck. 694;


Huvil and


versus BROWNING.

under the last commission can have no right because those of the second commission have."

SeogwiCK,“ When the statute makes the bankrupt liable to his creditors, it leaves him in the common case of a debior, with respect to his creditors. Besides bere is an interval of fifteen years between the two commissions, and the creditors may be barred by the statute of limitations,"

JERVIS, contrà. “ The question is, whether the payment is protected as a payment in the usual course of trade under the statute 19 Geo. II. c. 32, s. 1. That statute recites the inconvenience of secret acts of bankruptcy, and enacts' that no person who is really and bona fide, a creditor of any bankrupt for or in respect of goods, really and bona fide sold to such bankrupt, or for or in respect of any bill or bills of exchange really and bona fide drawn, negociated, or accepted by any such bankrupt, in the usual and ordinary course of trade and dealing, shall be liable to refund or repay, to the assignees of such bankrupt's estate any money which before the suing forth of such cominission was really and bona fide, and in the usual and ordinary course of trade and dealing, received by such person, of any such bankrupt before such time as the person receiving the same shall know, understand or have nolice that he is become a bankrupt, or that he is insolvent in circumstances. Before this statute, it was the policy of the law to deprive the bankrupt of the power of disposing of his effects, after the act of bankruptcy. It is a reinedial statute, and the words are · bona fide, and in the usual and ordinary course of trade received by such person before such time as he shall know, understand, or have notice ebat he is become a bankrupt or in insolvent circumstances :' now it is stated, that Wardell committed a secret act of bankruptcy, and this act of bankruptcy


Hovil and

versus BROWNING,

was, therefore, unknown at the time, when the defendant instituted the action against Wardell, and attached the money in the hands of De Beaume, under which attachment the money was paid. It was the object of the statute to protect payments made bona fide ; and there is no better criterion of the good faith of the transaction, than the payment by compulsion of a suit at law. Calvert and others assignees of Jones v. Lingard.* There a creditor of the bankrupt brought a sheriff's officer, with a writ into the shop, and then the debt was paid, and it was held good. In the case of Cox v. Morgan,t there was indeed a difference of opinion between the judges, but in Holmes v. Wennington,t the same principle is adopted, and both of these cases were cited in Bradley v. Clark, and no doubt was hinted as to their propriety. In Cox V. Morgan, Mr. Justice Heath says, that if the objection is made to the payment, because it is made under an arrest, and that is to be made the ground of the decision against the creditor, it will introduce great uncertainty, for if an arrest is to vitiate the payment, why not a menace; and if a menace, why not the promise of some collateral benefit. Now, if the payment under an arrest is good, the payment under a judgment is good ; for, otherwise, he who arrests, would lose all benefit by proceeding to execution, which is the fruit and natural consequence of arrest and judgınent. By the statute 21 Jac. I. c. 19, s. 9, persons having security for their debts by judgments, or having made attachments in London of the goods of any such bankrupt, whereof there is no execution or extent served and exe

: * Cited 5 T. Rip. 200, H. Blac. 335. In Cox. v.
-Morgan, it is said, this case was heard on a motion for a new
trial in the Common Pleas.
:+ 2 Boś. and Pull. 395. * * 2 Busi and Páll. 399. (n).

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