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Les cartes, planches, tableaux, etc., peuvent fttre filmte A des taux de rMuction diffircnts. Lorsque le document est trop grand pour 6tre reproduit en un setil ciichA. 11 est film* i partir de I'angia supArieur gauche, de gauche d droite, et de haut en bas, en prenant le nombre d'jmages nteessaire. Les diagrammes suivants illustrent la mithode. 1 2 3 4 5 6 mmmm'm / ,^ / 2 \ w i: \' I i: A\' ci- Tvr / INSOLVENT ACT OF 1864 AND THE PROPOSED AMENDMENT BILL. WITH ADDITIONS AND EXPLANATORY NOTES. TOGETHER WITH . THE RULES OF PRACTICE AND TARIFF OF FEES FOE LOWER AND UPPEE CANADA. BY Dtsint OIROUABD, B.C.L. PRINTED By JOHN LOVELL, ST. NICHOLAS STREET. 1865. * mm^mssm . i',-'^ ../ :m IV IMV r ■/'! . vr-> '■\J A r-;. \n ..VM'^'W^ l» . ./■ .T'P the year 1865, ESTKBBO, according ,^° ^'^'^ ^^^^^^ giKOUAED, the Office of the Regist'^". in Act of the Legialatute, m GIROXJAED, Of the Province of Canada. in *^ f , «' 5 -J ^. i-;VM \ * ( i' ' 1865, So ^t iwafcle 1. 1. C. ^iW. e C, P.|.|. »Mf««or of Commmittl Sato, ^t«jl, eoiu.,. Hg s fbrmtr |ttpiL I I •^:^^t.' PRELIMINARY REMARKS. § 1. At the present moment the country is anxiously watching the constitutional changes sought to be effected by the present admin- istration ; and in a political point of view, the past session of our Parliament will not fail to weigh heavily on the future destiny of Canada. If we cast a glance over the statutes promulgated, and consider the numerous and novel dispositions which have been introduced into our hypothecary and judicial system, as well as into our Commercial Law, we may assuredly add that, viewed with regard to legislation, it has been one of the most important sessions. It is sufficient to mention the marked improvements made in sales by authority of justice, the formation of a Court of Review, which, in many cases, will serve the litigant as a final Court of Appeal, and have the good effect of removing from the Court of Queen's Bench all those ruinous appeals which, under the present system, languish for years on the Role : and above all, it is suffi- cient, we say, to call to mind the Stamp Act, and to notice the grec.:; innovation which it introduced into both commercial transactions and law proceedings, to be convinced that the Parliamentary session of 1864 is of great importance in Canadian law. If we add to all this, that it alone gave us our present bank- rupt law, which insolvents, unfortunately too numerous, had looked to for years as their only bulwark against their creditors, and the means of re-establishing their lost credit, we may unhesitatingly state that it shall rank prominently in the history of the country, and I might say, seriously affect its future prosperity. In bringing under the notice of the public the late Bankruptcy Law, we do not intend to repeat here all those, in our opinion, well-founded objections which were made, when it was first brought II if PRELIMINARY REMARKS. .y before the House, in the Bession of 1863. SuflSce it to say^ that a large number of leading merchants of Montreal petitioned the Legislature at that time, asking for certain reforms in, and additions to, the dispositions of the Common Law of Lower Canada, and not a Bankruptcy Law at once applicable to both sections of the Province. This petition, we believe, was referred to a Commit- tee for consideration, and after a lapse of a year and a half of labor and discussion, reappeared more defective and complicated. Since the first of September, it has been in force as law, to the great satisfaction of insolvents, who cannot fail to invoke its protection, and have already to the number of hundreds made their announce- ments to the country, but, at the same time, to the great dissatis- faction of a large number of merchants, who do not find in it the guarantee which was promised, or the simple, short, clear and easily understood dispositions which they ought to understand and be able to apply without possessing the skill of its author, a man well known to all as thoroughly conversant with the practical affairs of commerce and with the laws relating thereto. Their disapointment has been great, and it will be still greater when they are called upon to apply the thirteen sections and one hundred and thirty-one sub-sections of this Act, and to pass, in order to arrive at a result not better, through this series of forms and formalities, turns and torts, which will continually render necessary the assistance of a learned and able lawyer ; their disappointment, we say, will perhaps become cruel when they come to pay all the expenses of winding up the insolvent's affairs, the costs of jus- tice, fees to the assignee, Sheriff's commission, Court-House tax, &c., &c. We should, however, in justice admit that, notwithstanding the great and numerous defects of this law, it affords measures both useful and desiriible. It must be granted that the limits given to ' the exercise bf the ri^ht of the conservatory process under the artieles 176 arid ITT of the' Custom of Paris, the dispositions mth regard to eeparfttion as' to property, the seizure of 'Books, notes and other valuable ^securities, &o., &c., whibh we shall have f 'ocoasion ' to dpedfy hereafter, are - such reforms as the commerce Of < the oountry demands. Merchftiits, 'without' doubt, concur in i PRELIMINARY REMARKS. g the both iven to Ider the Ins 'with Sj notes 11 have [mmerce Incur in these alterations, but question whether the new method of set^Hng the affairs of insolvents is adequate to the exigencies. Perhaps amendments to the short and simple provisions of our Common and Statutory Law, would have better met the views and wants of the majority of the mercantile class and of society in general. Pardon these preliminary remarks. We know to some it may appear inopportune and useless to discuss the utility and wisdom of a law actually in force. We have only faintly touched on the forebodings and fears entertained by many. If the future should prove them to be ill-founded, so much the better. If such be the case, the framer of this law, the Hon. Mr. Abbott, will have a right to lay claim to the gratitude of the country, from the fact that he has given to it a new Bankruptcy system more perfect and more practical than any which has been vainly attempted hitherto among ourselves, or has existed in other countries. Let us now briefly notice the different clauses of this Act, and by analysing its most striking features attempt to define its effect and operation. No one will dispute that the task is one surrounded with difficulties. We are far from promising that we shall fulfil it satisfactorily, especially in the narrow limits to which we are confined. We know our work will be very incomplete, and may contain errors ; but we console ourselves in the outset with the feeling that we certainly are not the first nor shall we be the last to make mis- takes, and that, after all, we shall be in good company. We shall however at all times consider ourselves happy if these notes prove of any service.* '- ■ < ■ • This essay was hastily prepared for, and in part published in a daily French paper, during September last. Since it first appeared, we have been favored with two works in English on the same subject, — the former by the Hon. Mr. Abbott, and the latter by Mr. Edgar, a young lawyer of Toronto. Mr. Abbott, in his commentaries, refers chiefly to the authors which he consulted in'framing the Act,'withoat ftlludin^'toflereral of-the diflBculties to be encountered in its application. Mr. Edgar, Who must have thoroughly understood the theory, seems to give particular attention to its practical operation. 'We shall, in foot*notes, make refbrences -to 'those works, and with a Viewto ptlblic interest, quote them in' part. The French copy-already pttblished.weshall'leaTe untouched ; and the only dittSrence that Will elist'between it and the 'English edition will be the foot-marks or -annotations. .y n. TRADERS. § 2. Who are considered traders, — The first section of " The Insolvent Act of 1864," for it is so designated, (clause 13th) declares '' that it shall apply in Lower Canada to traders only, and in " Upper Canada to all persons, whether traders or non-trader:^." This disposition of the Act brings us very naturally to this question, which we shall answer briefly : " Who is considered a trader ? " We have no formal provision on this point. In th^ ancient writers and French Ordinances anterior t3 the establisnment of the Superior Council of Quebec, we find certain disconnected rules, but on the whole there is nothing complete. The Ordinance of 1673 is the first which appears to have laid down the requisites which constitute a trader, and those that constitute an act of trade. In this respect the Ordinance is only confirmatory of the ancient Law, and the Code Napoleon has gone no further than to reproduce word for word its articles. We may, therefore, with all certainty, refer to jurisconsults, who have written either under the old regime, or under the new law. According to these, by the term Traders is meant those who make it their business to buy and sell for profit. It is not sufficient, as a general rule, to perform commercial acts to be considered a trader, and consequently to fall within the provisions of the Bankrupt Law ; in addition to this, it is necessary that the party be in the habit of trading.* • " The qualifying word '•' habitual" must not, however, be taken in i& sense, either too wide or too narrow ; as always requiring a constant .fluocession of commercial transactions, or as being always satisfied by ■the occurrence of a limited number of them On the one hand a manifest intention to make of commerce a habitual oc(flipation, will constitute a trader, though the acts of commerce really performed are few and infrequent. For instance the opening of a shop for the sale of goods —or of any particular kind of merchandise, will qualify him who opens it as a trader, though his actual sales may be few, or even though he may have failed to effect one. 2 Mass4, p. 162,-1 Pardessus, p. 78,-1 4 ■■w !i WHO ARE. tr The iares d va. «." this red a loient jnt of aeoted inance uisites act of of the than to ilh all der the le ^ho is not IS to be ovi&ions that the taken in J constant Itisfied by hand a Ition, wiU lad are few I of goods Jrho opens Ihough lie lp.T8,-l Further, the quality of trader is a matter of fact, which must be proved if denied. It is evident that an individual assuming it in contracts and bargains or even in legal proceedings, advertising in the papers, by signs, bills or otherwise, that he intends to carry on a certain business, and who opens a store or other mercantile place, is to be deemed a trader. Thes) facts afford the most ample evidence of his calling. In the absence of such proof, recourse is to be had to the presumptions and special circumstances of the case : public notoriety must also be considered as well as private testimony of individuals, and the Court, taking into consideration the nature and number of the acts, will infer whether they are sufficient or not to establish the character of trader. The general term trader, which in ordinary business language is often used as synonomous with the terms merchant, dealer,. camprises : The wholesale merchant, or he who is engaged in selling in large quantities the merchandise he has purchased from the producer. The retail dealer, who sells to the consumer. The manufacturer, who, wit}' the aid of workmen, converts materials into a new shape and aftei wards offers them for sale. The mechanic, who himself, or with the aid of others, turns out a piece of work from his own materials. But if he executes it without supplying the material, he cannot, in general, be considered a trader. The contractor is he who superintends men at work or hires them, and speculates on their salary. Bankers and exchange brokers, who do business in money and commercial paper. Brokers and auctioneers, who intervene in the name ot their Boulay Paty, des faillites, pp. 9, 10, 11. On the other hand, a man may do commercial acts, without thereby constituting himifielf trader — for he may buy double the quantity of provision he requires for his household, with the intention of making a profit by the sale of what he docs not want — and may actually sell and make that profit— jet he will not thereby become a trader. 1 Pard. loc. cit., — 1 Mass^, p. 161,— Orillard, p. 4, — Bonnin, Leg. Com., p. 5. See also on these points, 1 Toub. vol. 1, pp. 274 and seq., though he strains the law in favor of the consular jurisdictions." — Mr. Abbott's Commentaries, page 1. \A ! !i 10 [■BUlDBRS. pritieipols in oominercial traosactioiui^ as, for example, ia the sale and purebftse of inerehb<)dii»i . Fwdtwa and commis»io» merchants^ who also intr ■\/,- ^ 12 TRADERS. bankruptcy analogous to our own, that the trader who, for the future, is going to retire from business, may become a bankrupt (Meggot vs. Mills, 1 Raymond's Rep., 286, per Chief Justice Holt), by what right can we prevent a heretofore merchant from arranging with his creditors as provided for by the Insolvent Act T The law evidently intended to include this class of persons. It will be for the creditors : for the Court to decide whether their good faith gives them the privilege to be released, and if they ought to be permitted to return to business, should they so desire. §4. Married women beingi traders, rnarchandea jnihliques : mi- nora, &c. — But does the wife who is 9. public trader also come under the operation of this Statute ? We do not see why she should be excluded therefrom. The Statute in reality speaks of every trader; it excepts no person, not even minors. In other respects, a woman who consents to become a trader renounces the advantages which the law generally corfers on a woman under the power of her husband. She exposes herself, like every other merchant, to the chances of trade as also to all its vicissitudes.* * The following are Mr. Edgar's remarks, page 21, as applying chiefly to Upper Canada : — "The criterion oi a. Jlme covert being capable of falling under the bankrupt laws appears to be her liability to be sued to execution for the debts she has contracted during coverture. If a married woman is so circumstanced as to be subject to a common law execution, there does not seem to be any reason why she should not likewise be subject to this Statute execution. (Cooke, 40.) " It is doubtful if our Act respecting the separate property of married women (Con. Stats. U. C, c. 73) will affect the application of this Act to that class of persons. For although, under the provisions of that Statute, a married woman possesses entire control over her property, whica is liable to execution for her torts, there is nothing to show that it ia liable to execution at law for her contracts, made during coverture. The separate estate may, of course, be reached in equity, but whether that would render it liable to attachn'dut in bankruptcy proceedings is very questionable. It is probable, however, that a woman who has obtained an order protecting her earnings under thq above-mentioned Act, may become bankrupt as to that portion of her estate. FOREIGNERS. U § 5. Foreigners. — There appears to be no doubt but that a foreigner who contracts debts in a foreign country and afterwards comes into Canada, cannot come within the meaning of thi^ Act as regards such debts only. The law, in fact, contempktes but the traders of the country, and those who contract with a view of being governed by our law. It was so held in England. (Hitchox vs. Sedgwick, 4 Vernon's cases, 162.) The case is different as regards a Canadian who may have con. tracted a foreign debt. He may be declared insolvent by reason of that debt alone. There is nothing in the Act to prevent it, as in the case of capias ad respondendum. This further results as a necessary consequence of several clauses of the Statute providing for the safety of foreign creditors. But what is the inference with regard to a foreigner who, having property in Canada, has also contracted a debt in Canada, and afterwards comes here either momentarily or with the intention of remaining ? It seems he may declare himself or be declared to be insolvent. He has in reality traded in the country ; he has contracted in contemplation of the law actually in force ; he has therefore subjected himself to all the modes of execution and liquidation which the law aflFor«^3 to subjects. As Lord Tenterden observed : " A person suing in this country must take the law as he finds it ; he cannot by virtue of any regulation of his own country, enjoy greater advantages than other suitors; and he ought not therefore to he deprived of any superijr advantages which the law of his country may confer. He is to have the same rights which all the subjects of this Hngdom are entitled to" (De la Vega vs. Vianna, 1 B. & Ad. 284.) A lunatic may be a bankrupt provided the act of bankruptcy be committed during a lucid interval. parte Stamp, 1 DeG., 345.)" (Ex parte Priddey, Cooke, 48 ; Ex ,r * i ■"■ * ■1 ■,'•■;.■,» Ill, :, ■ ' ■ I ;•! ' ■■* '■ VOLUNTARY LIQUIDATION. § 6. Who can make an assignment, and in what case ?'— The ' second section enacts that" any person unable to meet his engage- ^'ments, and desirous of making an assignment of his estate, " or who is required so to do as hereinafter provided^ may call a " meeting of his creditors at his usual place of business, or, at his "option, at any other place which may be more coDvenient for "them." As the Bankrupt Law applies, in Lower Canada, to traders only, it follows that, in Lower Canada, traders alone con be subject to it, which is not the case in Upper Canada. More- over, it was in order to legislate for both sections of the Province • that the legislator, in this clause, as in many others, employs the. word " any person," instead of the word " any trader." But the quality of trader alone is not sufficient to bring a party under the operation of this Act ; it is also necessary that he who desires to make au assignment of his estate should be " unable to meet his engagementSi"* •.. ^ .;.,., , Voluntary assignment may take place in two cases ; in the first place, when the insolvent of his own free will makes the offer, without being requested so to do by his creditors; which is the case provided for by the second section. It may also take place when a demand is made therefor by two or more cred- * By insolvency, as here und^xatood, the legislator does not only mean an absolute impossibility to pay, or diconfltttre, but also stoppage of pay- ment generally, or a continual state of embarrassment in the affairs. Therefore a trader may be insolvent, but not a bankrupt, enfaillUe, within the meaning of this Act, although his assets may be far in excess of his liabilities. We may add that any person unable to meet his engagements may become bankrupt without producing assets. The right to assign conferred by the Law of Bankrupts has been considered in countries where such laws are in force, so closely con- nected with the general interest of trade as to be declared inalienable, even with the previous consent of the debtor. (ArrSt of the 22nd November, 1456, reported by Guy Pape, quest. 211, and also Arrftt of the 22nd November, 1599.) IN WHAI CASB. ETC. 15 13 been ly con- enable, i 22nd rrftt of itors, as provided for by the third, section, paragraphs 2, 3 and 4, whieh we shall hereafter ezplun. § 7. Notice of meeting of creditort. — " And such meeting," continues the same section, "shall be called by advertisement (Form A), stating in such advertisement the object of the meet- ing." This advertisement must be published two weeks in the Canada Gazette, also in Lower Canada, in every issue during two weeks, of one newspaper in English and one in French (section 11). But this is not all: the insolvent must address notices there- of to all creditors and to all representatives of foreign creditors, within the Province, and must mail the same prepaid, at the time of the insertion of the first advertisement (same sect. 11), with, a list attached to ; ch notice containing the names of all his cred- itors, whose claiih amount to one hundred dollars and upwards, and the aggregate amount of those under one hundred dollars. Such is the course which the bankrupt must pursue in order to obtain a meeting of his creditors. The law requires, at least, two weeks' notice, but does not say whether it may not be longer : it does not fix, moreover, any day within which the meeting of the creditors should take place. Has the debtor himself the choice of this delay ? Is it in his power to wait as long as he pleases ? If he has the right to assign to his creditors three weeks or a month for meeting, on what grounds can he be prevented from requesting their attendance in two months, oi at a still more distant period? And during each of these delays of three or four weeks or more, what may become of the estate of the insolvent — the guarantee of the cred- itors? The Statute is absolutely silent on this point. Never- theless it seems to us that the insolvent cannot continue in trade for his own benefit. An insolvent, ind ed, is an interdict as regards his estate, as is taught by all writers both ancient and modern. From the mo- ment that the trader has made known his failure, all his assets pass irrevocably into the hands of his creditors, and become their property, of which he remains simply guardian and depositary until he makes delivery of the same. Up to this time. If the law ilT"^" ^> ll § mc 1 V 16 FIRST MEETING. permits him to act at all, it is only as negotiorum gestor, the agent ' of his creditors. He ought, therefore, to render an account to them, and that at any time before the nomination of the assignee. They also have the right, if they have any cause to fear, to see themselves to the investment of the income ; to demand, for instance, ' its deposit in a bank. . But, it may be asked, what can a creditor do during the interval between the notice and the meeting or assignment, even against an insolvent, who continues trading; fraudulently, for his own account ? It seems to us he may have recourse to the compulsory process, as provided for by section 3, paragraph c, or paragraph 4, as the case may be. The Act nevertheless should have been more precbe on this important point ; and the statute of the Honorable Attorney-General Cartier, passed in 1858, appears more satisfactory in this respect, in saying that an insolvent trader, who continues trading, and refuses at once to make an assignment of his property^ shall be subject to a saisie arret before judgment, and at the same time to a capias ad respondendum. It is also to be regretted, that a short but reasonable time was not fixed and determined upon, within which the meeting should be held. It is difficult ta perceive how an insolvent, who cannot be charged with bad faith, should be bound to choose one term of delay more than another, one month rather than two. § 8. Meeting of Creditors. — Statements. — Upon the day and at the hour fixed upon, the creditors, their clerks or agents, assem- ble at the appointed place of meeting.* It is understood that the * " There is no expressed restriction even as to tLe section of the Pro- vince in which the place of meeting may be fixed, provided it be more convenient to the creditors than the locality of the debtor's place of busi- ness. Thus the insolvent, being a resident of Montreal, might hold bis preliminary meeting at Toronto, if the majority of his creditors resided at or near the latter city. But in such a case, care must be taken that an assignee is appointed who is competent to act. If the creditors decide upon an assignee, there would appear to be no ob- ligation upon them to select one who resides within the County or District in which the insolvent's place of business is situate. But if the debtor is obliged to choose an assignee from among the official PROCEEDINGS. 17 le Pro- more (f busi- hold editors mast ct. If no ob- nty or But if official first step to be taken at the meeting of the creditors, is the naming at a president. It is easily seen from the fourth clause, paragraph 5, that the assignee must take and preserve the minutes of the meeting, which he shall sign himself, and cause to be signed and certified by the president or three creditors actually present. It is strange the Statute no where speaks of the nomination of presi- dent, of his powers and prerogatives ; whether he should act^ro tern., or permanently. We must therefore conclude, that the president enjoys only the privilege of any ordinary creditor present, except it be for the certifying of the minutes ; we must also conclude that he is only president jsro tern., for each meeting, in short, only a ohairm'«.n ; and that a meeting may even be held without a president, in which case the minutes must be signed by three creditors present and the assignee. But by whom will they be signed if there be neither president nor creditors, to the num- ber of three, present ? Who especially will take and certify the minutes of the first meeting and of each adjournment of the same, where there is yet no assignee appointed to the bankrupt ? Are the creditors sufficiently authorized to choose a secretary pro tempore ? The Act makes no mention of this ; but it seems in accordance with its intent to believe that the creditors have the power to elect a president, who, if an adjournment takes place, will order it in concert with the creditors, and sign the minutes, which, however, in this case will not be authentic.-'^ assignees, he mast select one who is resident within »he same Goanty or District as that in which he carries on his business, § 2, p. 4, § 3, p. 10, § 4, p. 1. " If the insolvent should, either by error or designedly, select a place of meeting, other than his place of business, and less convenient to his creditors and assign to the assignee named at such meeting, his estate would become liable to compulsory liquidation under §3, p. 1. Forthis would not be a mere neglect or irregularity covered by p. 5 of §2 ; but an assignment made otherwise than in the manner prescribed by the act." Mr. Abbott, p. 11. But will the assignment be vitiated by that neglect ? The paragraph 5, sect. 2, declares it is not — Vide post, page 24, §10. What would be then the use of a conservatory process ? • " The meeting should be regularly organized. And correct minutes, hi:. ( 'Pi ji; i 1! I ' i; III! Ill m FIRST MEETING. At the first meeting, the insolvent should submit a statement to bis creditors. The 2nd section enacts as follows : " and at such meeting be shall exhibit statements £>howing the position of his affairi^ and particularly a schedule (Form. B.) containing the nfames and residences of all his creditors, and the amount due to each, distinguishing between those amounts which are actually OTerdue or for which he is directly liable, and those for which he is only liable indirectly as endorser, surety or otherwise, and which have not become due at the date of such meeting ; and also the particulars of any negotiable paper bearing his name, the holders of which are unknown to him, which schedule shall be sworn to by the insolvent, and may be corrected by him likewise under oath* at the meeting at which it is so produced, also the amount due to each creditor, and istatement showing the amount and nature of all his assets ; and he shall also produce his books of account and all other documents and vouchers, if required so to do by any credi- tor."* § 9. Appointment of Assignee. — If the creditors do not come to an arrangement, for example, if they do not grant him delay or accept security, they must proceed to the appointment of an as- signee, into whose hands the assignment may be made ; and it is of little consequence whether he be a creditor or not, a resident within the County or District within which the insolvent has his place of business or not. If the creditors do not all agree upon the appointment, the question is to be decided, not by tbe majority in number and value, but by the numerical majority of the creditors present, or repre- sented by agents; for by sec. 2,^ par. 6, every question discussed at the first meetingmust bedecided by the majority in number. This is an exception to the general rule, laid down in sec. 11, par. 2, containing a list of all creditors present or represented, and full details of all the proceedings, should be made at the time and preserved, in order ' that eTidence of proceedings of such meeting taay be available if subse- qnently required. And it would be proper to appoint « chairman or se- cretary as is usual at ordinary meetings. See Murdoch on Bankruptcy page 289, in notit," Mr. Abbott,, p. 12. * See pott, § 49. iili;i ASSIGNEE — HOW APPOINTED. 19 snt, the value, repre- issed at This par. 2, which enacts that all questioLS discussed at meetings of creditors shall be decided by the majority in number and in value of the creditors, unless the contrary be specially provided by the Statute^ It may be said, no doubt, that such was not the intention of the legislator, that by section 2, par. 5, he meant only to treat of incidental disputes, accessory difficulties, and not of the choice of the assignee. Here is the tenor of the whole clause to the letter. " If any dispute arises at the first meeting of creditors as to the amount which any one of the creditori is en led to represent in the nomination of an assignee, or upon any other question which may properly be discussed at such meeting, such dispute shall be decided by the votes of the majority in number." Is there any question which may he more n^operly discussed than that of nominating an assignee ? It is " ^possible in our opinion, to give to this disposition an interpretation more in conformity with the text.* * Mr. Abbott entertains a different opinion upon this point. " The majority," he says, page 12, " in number of the creditors for sums above $100, present or represented, will decide if they also represent the majority in value, § 11, p. 2. If the two majorities differ, see ibid for the proceedings to be taken. In England the majority in valae appoint, 24 and 25 V. 134, § 116. So also in Scotland, S. act, § 181. " The mode of voting upon the nomination of an assignee, at the pre- liminary meeting, is not to be confounded with that to be adopted at the same meeting, upon incidental disputes as to the amount of a creditor's claim and the lilte. The precautions taken for ascertaining and regulat- ing the amount which each creditor may represent, render this plain. For instance, p. 1 not only requires that a statement of liabilities shewing the amount due to each creditor should be produced at this meeting, but also that the liabilities should be divided into two classes, direct, and overdue indirect, and indirect Whi<:h are not due. And each creditor can only represent the "amount" of his direct and overdue indirect claims. P. 5 also provides that any dispute which arises as to the " amount" which any one of the creditors is entitled to represent in the nomination of an assignee, shall be disposed of by the votes of the majority in number. It is therefore clear, as already stated, that at this as at all other meetings of creditors, the sense of the meeting is taken by a computation of value as well as number, according to the rule laid down in § 11, p. 2. The exceptions as to disputes about the amount 20 ASSIONMENT. i..> M m ill 'It ' i (if f! If such is the meaning which should be attached to this para- graph, we must confess that it will not meet the wants of commerce. How could it be, when, in making the most important move, the appointing of an assignee, who is invested with the entire estate of the insolvent, and who is called upon to make distribution of the same, that the majority in number and not the majority in value should rule ? From this it will be easily seen that important interests will frequently be at the mercy of a few petty creditors; a thing which could not take place according to the principle of the majority in number and in value laid down by section 11, par. 2, which should govern in all cases, unless otherwise specially provided. This majority is the majority " in number of all credi- tors for sums above one hundred dollars, present or represented at such meeting, and representing also the majority in value of such creditors." It is, therefore, the majority in number and in value, which affords the most complete safety to all interested, that then decides. If the majority in number do not agree with the majority in value, the creditors may adjourn ; and if the adjourned meeting has the same result, the views of each section of the creditors shall be embodied in resolutions, and referred to a judge who shall decide between them (sec. 11, par. 2). This last resort still further confirais us in the opinion, that it is the numerical majority alone which should make choice of the assignee. Section 2, par. 4, indeed, seems to deny the power of referring to a judge, in its of claims, and other questions which should probably be held to mean other similar questions, are made for convenience, as at the time of the first meeting no regular scrutiny of the claims can have been effected, or can be obtained." Notwithstanding the respect we entertain for Mr. Abbott's interpreta- tion, we do not perceive anything in his reasoning to induce us to abandon our previous understanding of the Act. We have not to deal with the secret intent of the legislator, but with the text as laid down in his Act ; and when he provides for any dispute raised at the first meet- ing of creditors as to the amount of their claims, or upon any other question which may be properly discussed at such meeting (sect. 2, p. 6), he is not to be supposed to mean other similar questions. If the word similar were inserted in the text of the 6th paragraph, there would be little diffi- culty in agreeing with the author in his remarks. TIME OF MAKING. « para- meroe. re, the tateof of the k value jortant iditors ; siple of ion 11, pecially 11 credi- jnted at of such n value, bat then majority meeting tors shall ill decide i further Lty alone par. 4, in its 3^J ttterpreta- uce us to ot to deal aid down irst meet- any other I. 5),hei8 trd timilar little diffi- permitting the insolvent to make an assignment in the hands of his largest creditor, or one of the official assignees, immediately after the adjournment, if there be one. Each creditor, however, in the vote to be tdcen upon the nomi- nation of an assignee, can only represent the amount of direct liabilities of the insolvent to him due or to become due, and the amount of indirect liabilities then actually over due (sec. 2, par. 3). If any dispute arises as to the existence, or the amount of any creditor's claim, it is to be decided by the numerical majority, but in that case such creditor has not the right to vote, as being interested. (Sec. 2, par. 5.) If the votes be equally divided, an adjournment may be made ; and if, in the end, no better result is produced, or if the assignee named refuses to act, or if there is no creditor present at the meeting, the insolvent may then assign his estate to any solvent creditor resident within the Province, not related, allied, or of kin to him, and who is creditor for a sum exceeding five hundred dollars ; or, if he has no such creditor who will accept the assign- ment, then to the creditor representing the largest claim, who is solvent and willing to accept such assignment ; or he may, in fine, make such assignment to any official assignee, appointed by the Board of Trade, and resident within the district in which the insolvent has his place of business. . ' • § 10. What if the insolvent, after the appointment of assignee, delays to make an assignment of his estate ? — The second section, par. 3, says that, " Thereafter the insolvent shall make an assign- ment of his estate and effects to the assignee so chosen." This word thereafter is little satisfactory, and the Act in no other place determines the delay within which the insolvent shall make volun- tary assignment. This is certainly not because the drafting of the deed of assignment requires much time; this can be done by a notary in a few minutes. Why then not compel the debtor to sign immediately, without waiting until he has made away with a large part of his estate, after which to fly for the United States, a departure which he must have had ample time to premeditate, seeing that it was at his option to fix the date of the first meeting ? ' II ff**^ mh 22 ASSIGNMENT. .v>l I ; :i I II ',',! iiiii But, you may add, if he runs away, or squanders his estate, the compulsory process may be had recourse to. In reply it may be urged that, when the only remaining resource available to the creditors is the rumor of a sudden departure or a fraudulent mak- ing away of estate — which the insolvent always takes care to conceal — the interests of the creditor are greatly in danger, if not utterly lost, as it often occurs. ■■ t-. ..■ .. ' . < It is useless to pretend, that, in virtue of section 3, par. 4, th» insolvent is bound to complete the assignment within three days after first meeting or its adjournment. This last provision is not intended to meet the case of free and voluntary assignment on the part of the bankrupt; it is only applicable when the assignment is required and asked for. It is also useless to answer, that section 3, par. 4, meets this difficulty by subjecting to forced liquidation the trader, who, after having given notice of a meeting of creditors, as required by the second section of the Act, neglects to proceed further thereunder. This proviso offers no greater guarantee than the preceding ones; it provides for no time within which the assignment must be made. None of these provisions confeis the express power to have recourse to compulsory process to compel the party, against whom fraud or neglect cannot be proved, appli- cable to the delay to complete the deed of assignment within a certain time ; and this is, moreover, confirmed by the reading of the paragraph following (5) of the same clause 3, which declares that no act shall justify forced liquidation, " after an assignee has been appointed under this Act." What then should the creditor do ? We know the case is one which may be rarely met with. It is difficult to perceive how an insolvent, who, of his own free-will, calls a meeting of his creditors, and causes an assignee to be nominated with the view to make an assignment, should, after all, refuse to do so ; and here, perhaps, is the reason why the law contains no express enactment on the point in question. Nevertheless, the thing is not impossible, especially with the knowledge we have of the bad faith and fraud of our day. What must then be the recourse ? We would advise the compulsory process according to the wants of the case in the name I I '#• IRREaULARlTY PREVIOUS TO. 23 4, th» 3 days is not on ihe uent is section idation editors, proceed tee than lich the \iei6 the ) compel d, appU- ithin a ig of the ires that has been is one I how an creditors, I make an erhaps, is |the point especially of our Ivise the I the name of the creditors, and not in the name of the assignee, whose power only commences with the making of the assignment.* On the other hand, it would be, perhaps, preferable in some cases, to proceed under the Act of 1858, and to demand saisie arrit before judgment, capias ad respondendum, or even both together, upon an affidavit that the Insolvent continues trading and refuses to make an assignment. Tlie law of 1858 has not been repealed, and its operation is in no wise incompatible with the Insolvent Act. The creditor, therefore, may make choice as to which he will have re- course to. In order to obtain the benefit afforded by the law of 1858, he should make the demand of assignment, not in the form prescribed by the Act of 1864, — for then the insolvent has five days to answer (sec. 3, par. 4), — but he should make it verbally or in writing, mentioning the Act of 1858, as has been the usage up to the present time. Above all, as we have said, the exigency of the circumstance ought to guide in those difficult cases. Before consideriDg the form and effect of an assignment of * *' The time within which the assignment must be made is not limited by this clause, the debtor beinq^ allowed a certain discretionary latitude in the proceedings be voluntarily commences. But if any delay which occurs be such an unreasonable delay as to constitute a "neglect to proceed," the estate of the debtor becomes liable to compulsory liqui- dation, — § 3, p. 4. And if such delay were to be accompanied by sus- picious circumstances, such as continuance of trade, realization of assets, and the like, these would constitute other grounds for compul- sory proceedings, under § 3, p. b. c."— JIfr. Mbott, page 13. Mr. Abbott's remarks do not account for the defects already pointed out. The par. 4, sect. 3 seems to apply only to the neglect of the debtor to attend the first meeting. What species of neglect is herein meant? Is it fraud? If such is the case, and there is no oiher obvious meaning, we are brought back to the common law. Moreover, this par. 4 has no refer- ence to the delay to complete the assignment, when the debtor attends the first meeting at which the assignee is appointed. How could sucb be really the meaning, when in the very next paragraph it is laid down that no act or omission would justify forced liquidation, after an assignee has been aj^ointed under the Act. On the other hand, if suspicious circumstances amounting to fraud are- to be proved, the common law affords a safer, speedier, and, we might, add, the only remedy, and, it will be admitted, far less complicated. u ASSIGNMENT. -vfi ii;!'; property, we may be permitted to caU attention to the provision of the Act, section 2, par. 5, laid down in the following words : " But ) neglect or irregularity in any of the proceedings antece- dent to the appointment of the assignee shall vitiate an assign- ment subsequently made to an assignee competent to receive it under this Act." Suppose for a moment that the notice given to the creditors is irregular through design, or even from involuntary error ; that, for example, nc notice is addressed according to law to some one or several of the jreditors, important creditors or not; that in consequence, these creditors, thus ill informed or not informed at all, or resident, perhrps, at a distance far from the Insolvent or from the place of publication of the papers containing the notice of the Bankruptcy, do not attend the meeting ; that in fine an assignee is appointed and an assignment made at this first meeting. Every one will, no doubt, feel that these absent creditors, who have not been notified and could not be, will have a right to set aside the assignment thus made in open violation of the F atute. Yet they can not do 30. They will be assured by the same law that all irregularities and neglect, antecedent to the deed of assignment, are of no conse- quence. You will vainly reply that you are one of the principal credi- tors, that your presence certainly shoiild have some weight in the de- cisions of the meeting. You will again be answered, that thepe defects in the preliminary proceedings have been legalized by the fact of the assignment having been made to an assignee coinjietent to receive it under- this Act; and you will thus be compelled to submit to 'the wishes of an unjust and partial majority, who are less interested than yourself, and, perhaps, even to lose your claim in silence, if the time granted to produce it has expired : you will not even have against the creditors an action to recover your share of the divi- dend, for such is the good will and advantage of section 2, par. 5, of the Insolvent Act of 1864.^ • "No neglect or irregularity. " This provision appears to be intended to prevent the grave evil which would result to all parties concerned, if mere irregularities in proceedings antecedent to an assignment would avoid such assignment. The entire unobservance of any proceeding provided for hj the Act , I' 'i FORM AND REGISTRATION 0F< 25 §11. Form of deed of assignment — Registration. — The assignment mnst be made in the form C. (section 2, par. 6,) or in any other equivalent form. The deed, therefore, is not subject to any special form. It must be absolute, unlimited and unconditional. In Lower Canada, unless it be for lands held in free and common soccage, (C. S., L. C, chap. 37, sec. 5t>,) it must be before notaries, if there be assignment of immovabK s j but if it consists of movables only, it may, as in all other sjiles of movable property, be made sous seiny jprivi. In fine, all the rules relating to the formalities of ordinary deeds of assign- ment receive in this case their full application. (See sec. 2, par.- 6, 9, and 10; sec. 11, par. 13.) It is not necessary in the deecl would probably render the estate of the debtor liable to compulsory liquidation under § 3, p. 1. But a defective performance of the require- ments of the Act in respect of any proceeding, would be cured, under this clause, by subsequent assignment to a competent assignee." — Mr' Abbott, j9. 13 and 14. ' " Although no neglect or irregularity in any of the proceedings antecedent to the appointment of an assignee shall vitiate the subsequent assignment, it will probably be held i,hat en omission of any such proceedings would render the assignment one luade *' otherwise than in the manner prescribed by this Act," and an act of bankruptcy upon which proceedings in compulsory liquidation might be takea by a creditor." — Mr. Edgar, p. 25. The preceding remarks seem to hare no bearing on the case. They refer to the entire unobservance or omission of the requirements or formalities prescribed by the Act. But this defect is not an irregularity ; it is a total want of proceeding under the Act, which might render the debtor liable to compulsory process, but do not at all apply to irregu- larity or neglect not vitiating the deed. How, then, have recourse, as pretended, to the compulsory process, when the statute declares that no act or omission shall justify the same after a voluntary assignment maile or an assignee appointed under the Act. Moreover, what could be the object of such a process, when the Insolvent's estate is already conveyed to and vested in the assignee by the assignment, irregular it is true, but declared by par. 5, not to be vitiated by such irregularity. We cannot finally refrain from pointing out the word "neglect", which is in piir. 5, coupled with the word "irregularity", as immoral in law and tantamount to the approval of fraud. A voluntary neglect, in our opinion cannot be approved or justified in law. mm' 26 ASSIGNMENT. I ' I fl iii"! I( J: •• t! „t!!„ if: ■|ili!i u %^ m of assignment to enter a description of or to detail the property aswigned. A copy of the list of creditors produced at the first meeting of creditors^ ought to be annexed to it (sec. 2, par. 6). It is to be supposed that, when the Insolvent makes an assign- ment to his principal creditor or to the official assignee of the Board of Trade, failing the actendance of the creditors at the first meeting, he ought likewise to append to the deed a list which has thus never been produced. Still the clause says nothing on this point ; it has neglected to provide for the case. If the Insolvent possesses real state, the deed of assignment may, upon the simple presentiug a copy to the Register,* be • There would seem to be some very difficult questions likely to arise as to the registration of deeds of assignment under this 'clause. In the first place, as no particular description or detail of the property or effects assigned need bi> inserted in such deed, (see above sub-sec. 6 of this section,) *it is not easy to perceive that much will be gained by making a search to ascertain if such a deed is registered against a particular lot of land. It may be said that it will be the duty of every one investi- gating a title to search through every registered assignment in the office, to ascertain whether any person through whom the title has passed has executed such an instrument ; but there is no provision made for docketting these registrations, as there was when judgments were registered against lands. The difficulty of these searches may not be much for some years, but unless provisions are made to facilitate them, they will become more troublesome every year. " Then, in the second place, the assignment must, no doubt, be registered by a memorial under Con. Stat., U. C, chap. 89, sr c. 18, in every case bat the exceptional one mentioned in this clause, where the deed of assignment has been executed in Lower Canada before notaries. But in sec. 19 of the above mentioned Act, it is provided that every memorial " shall mention the lands contained in the instrument or will, and the city, town, townships or place in the county or riding where the lands are situated in the sp.me manner in which the same are described in the instrument or will, or to the same effect." It is submitted that, although no particular description or detail of the real property need bo inserted in the deed of assignment to render it a valid instrument to pass the estate of the assignor, a deed without that description could not be registered." — Mr. Edi^ar, p. 29. As to Lower Canada, as we have stated above, there is but little doubt that there is no necessity for description of the property in order EFFECTS OF. 27 unregistered in the Registry office for the county where the real estate is situated. (Sec. 2, par. 9.) " And no subsequent registration," continues this clause, " of any deed or instrument of any kind executed by the Insolvent, or which otherwise would have affected his real estate, shall have any force or effect thereon." It may be said en ^mssmit that it is difficult to understand the reason of this declarition, for it is a well known principle of the common law, that an assignment subsequently enregistered, tsannot operate to the prejudice of a previous acquirer, who has not enregistered, but who has had delivery and is in open and actual possession of the property sold, like what takes place in the case of an assignment to an assignee ; and in like manner, a non- proprietor of an immovable, as the assigning Insolvent, can neither hypothecate nor create chargts upon such immovalios. For these reasons, we do not see the necessity, or even the utility of enregistering the deed of assignment ; we only see therein further expense without an object. § 12. FjfcJs of Assignment. — Paragraph 7, of the same 2nd clause enacts, that " the assignment shall be held to convey and vest in the assignee the books of account of the Insolvent, all vouchers, accounts, letters and other papers and documents relating to his business ; all moneys and negotiable paper, stocks, bonds and other securities, as well as all the real estate of the Insolvent, and all his interest therein, whether in fee or otherwise, and also all his personal estate, and movable and immovable property, debts, assets, and effects, which he has or may become entitled to at any time before his discharge is effected under this Act, excepting only such as are exempt from seizure and sale under execution, by virtue of the several statutes in such case made and provided." to register. la this respect it seems to be an exception to the ordinary rule, abolishing general mortgages. This results from the disposition of the statute (sec. 6.) which enacts that it shall not be necessary to describe the property in the deed of assignment, the registration of a copy whereof is declared by sub-section 9 sufficient to secure all rights thereto. Such is also Mr. Abbott's opinion in his Commentaries, pp. 29, 30. ■Pi ASSIQNMENT. llllJl,, J iv' i> ' ! ' ' This 7tli paragraph gives rise to several questions which we shall briefly touch upon. In the first place the Act not only divests, dessaisit, the Insol- vent of his estate, but it also invests the assignee therewith. The assignment ghall convey and vest ; and consequently, from the time of its execution, it is no longer the Insolvent, but the assignee who is regarded as proprietor. It is the latter, therefore, alone, and not the former, who is competent to perform all acts of administration and of alienation. To him, .therefore, belongs also the right of action relating to this same property (sec. 4, par. 7), regarding which the Insolvent is incompetent to sue— df'esfer enjugc- ment. Incapacity to administer and to alienate, incapacity to con- tract, incapacity even d^ester en jugement relative to this estate ; such, in two words, are the logical consequences of the execution of assignment, which, in all respects, is equivalent to a transfer followed by tradition, for tradition is de jure, and takes effect by the operation of law alone. The assignee, therefore, has the power to close the stores of the Insolvent, and to revendicate the property wherever it may be found, in case of neglect or refusal to deliver up the same. It follows also, that all actions must be directed against the assignee, even those which affect the real estate, such as the demands auj)6titoire and en declaration d'hypo- tMque. In like manner, the Insolvent is incapacitated from prosecuting pending suits ; thes3 rights of litigation are also transferred to the assignee, and cannot therefore be exercised by any one but him ; and it is for this, that section 4, par. 9, authorizes the assignee to take the place of the Insolvent in those cases. We are not in this matter to be governed by the jurisprudence of the provisions of the Bankrupt Law which was abolished in 1849. The pro- visions of that law in this respect were neither so positive nor so extensive as are those of the Act now in force. Moreover, even at common law, the moment the assignment takes place, and that the assigmee is appointed, the Insolvent is divested of his estate and deprived of the right of its administration, and as a consequence, remains pleno jure an interdict as to his estate. *• One of the most remarkable consequences, says Mass(5, of the dessaisissemenf EFFECTS OF. 29 (divestiDg) declared by the 443rd Art. of the Code de Commerce, is to deprive the Insolvent of the exercise of all actions, which, from the time of the declaratory judgment, cannot be pursued except by the assignees, against whom alone also' they must be instituted. Non {gnoro, says Straccha, decoctorem qui bonis cesserit, nee agere, nee convenire posse. Curatori personce decoctas competunt omnes actiones decocto competentes, further says Casaregis. The 443rd article of the Code dc Commerce, is, therefore, only the literal expression of principles admitted by the ancient doctors. In other respects, it is perfectly logical to refuse the Insolvent, who is deprived of the administration of his property, the right of action to defend or to revendicate the same : this right forms a part of the estate ; and he can no more exercise the one, than dispose of the other. Decoctus non potest agere in judicio et actiones expendere, nee actiones activas et passivas, cum amisit et dominium et proprietatem suonim bonorum, interim pendente judicio concursHs retinere." 3Iass6, Droit Commercial, vol. Hi, p. 238. It is to be observed, however, that when we say that the Insol- vent becomes an interdict, we do not mean that he is generally interdicted to all intents and purposes ; he is merely an interdict as regards his estate and the actions relating thereto. Notwith- standing the assignment, the Insolvent always retains the right to exercise all actions which relate to his person, such as proceedings for separation as to body, separation de corps, capias ad respon- dendum, the rights resulting from his quality of tutor, curator, &c., carrying with them imprisonment, contrainte par corps, which are not comprised in the assignment, and from which the Insolvent is not released. The Insolvent, in fact, should have the power d'ester en jugement for all those purposes, so important to him, and even to perform, in the interest of his creditors, conservatory acts as regards the property assigned.* • According to the best writers on the common law of France, a bankrupt cannot sue without giving security for costs. This opinion is entertained, amongst others, by Jousse on the Ord. of 1673, and Pigeau, Procedure du Ohatelet, vol. i, p. 856, and has been maintained by four different arrets (judgments) of the Parliament of Paris. (Arret TP" ill 30 ASSiaN3IENT. ,A H ' I, ',1 ! ^ hi 1 1 II m ■h'-ih\ The Insolvent, in general, does not lose the right to contract. We are no longer under the empire of those ancient laws of the middle ages, whose reign reduced the Insolvent to a position similar to that of civil death or interdiction. Modern legislation, much milder and more liberal, gives to the assignment only those effects which properly belong to it, and which are necessary to secure the property of the Insolvent, the security of the creditors ; in all other respects, it leaves to him the exercise of his natural rights, the capacity to contract in all cases in which the creditors cannot suffer ; consequently, he is permitted to carry on business, to engage in new enterprises and speculations, to enter into partnership, under, of course, the condition imposed by the laws, that all he acquires before his discharge, whether by his own industry or even by succession, donation, legacy, or otherwise, shall belong to his creditors.* It is the duty of those parties who deal with him, to secure themselves ; they know, or are supposed to know, his want of capacity as regards his creditors, and his ability as regards themselves ; they know also that this want of capacity continues up to the time of his discharge ; and if they consent during that interval to furnish him either with goods or the means of acquiring them, they ought only to blame their own imprudence of 14th April and 20th August, 1598 — Bouchel en sa Bibliotheque, vo Cession ; Papon, arifets, liv. 8, tit. 1, note 1st : arrets of 20th Sept- 1606 and 26th July, 1607.) Our Provincial Statute, Low. C. Con. St., chap. 83, sect. 68, in demand, ing security for costs from a party residing out of Lower Canada, does not seem to exclude other cases provided for by the common law. * " Although all the property acquired by a bankrupt, up to the time of bis discharge, passes to his assignees, as well as the right of action respecting it, (see sec. 4, si b>sec. 9,) he may maintain an action for his personal labor performed after the issuing of the writ of attachment, (Chippendale vs. Tomlinson, Cook 428 ; Silk vs. Osborne, 1 Esp. 140 ; and see Williams vs. Chambers, 11 Jur., 798,) and he may maintain an action with relation to after-acquired property, (Webb vs. Fox, 7 F.R.^ 391 ; Fowler vs. Down, 1 B. and P., 44 ; Evans vs. Brown, 1 Esp. 170 ; Leroche vs. Wakeman, Peake, 140,) or sue upon a contract made with him, (Cumming v. Boebuck, Holt, 172,) unless the assignees interfere. Kitchen vs. Bartsch, 7 East, 53 ; Herbert vs. Sayer, 2 Dow and L.,49."— Mr. Edgar, p. 27-28. s EFFECTS OF. 81 emand- does vvr' if these same goods are thereafter claimed by the creditors ; they have not even the right to allege their ignorance of the position of their debtor in order to rank with the first creditors ; because, once more, all that the Insolvent acquires during the state of insolvency, that is, from the time of the assignment to the moment of his discharge, is the exclusive pledge of his first creditors. The assignment applies to all property and to all the assets of the Insolvent, except only such as are exempt from seizure and sale tinder execution, hy virtue of the several statutes in such case made and provided* and those which are not personal to the debtor, such as is all the property of which he has the use only, or which he holds by title of usufructuary, tutor, curator, fidei- commissary, or otherwise, in favor of other persons ;f but the ♦ Tho bed, bedding, and bedsteads in ordinary use by the debtor and his family ; tho necessary and ordinary wearing apparel of the debtor and his family ; one stove and pipes, and one crane and its appendages, and one pair of andirons, one set of cooking utensils, one pair of tongs and shovel, one table, six chairs, six knives, six' forks, six plates, six tea-cups, six saucers, one sugar-basin, one milk-jug, one tea-pot, six spoons, all spinning wheels and weaving-looms in domestic use, and ten volumes of books, one axe, one saw, one gun, six traps, and such fishing- nets and seine as are in common use ; all necessary fuel, meat, fish, flour, and vegetables, actually provided for family use, not more than sufficient for the ordinary consumption of the debtor and his family for thirty days, and not exceeding in value the sum of twenty dollars ; one cow four sheep, two hogs, and food therefor for thirty days ; tools and imple- ments of, or chattels ordinarily used in the debtor's occupation to the value of thirty dollars. The debtor may select out of any larger number of the same kind, the particular chattels to be exempt from seizure. (L. C. C. S., chap. 85, sect. 3 ; 24 Vict., chap. 27.) t " Property which has been placed in the hands of a man for a specific purpose will not pass to his assignee upon his bankruptcy. As where bills of exchange were remitted to bankers in London with per- mission to discount them for a particular purpose, and they were not, in fact, discounted before the bankruptcy of the banker to whom they were remitted, they were ordered to be delivered up to the assignees. (Ex p. Frowd, Mon. and McA., 262.) .Also where a bankrupt was allowed by his assignees to remain in possession of his house and furniture, in order to assist in settling the affairs of the bankrupt estate, and the bankrupt traded and became bankrupt a second time, it was holden that ■w^^ 32 ASSIGNMENT. i.,> 'U ':> i; !: 'I 'i • ,' Hi ' Ill III. I;!" liiii' fruits and revenue? of such property, which belong to himself, fall into lae assignment. The exemption from seizure which the Government has attached to the salaries and pensions of its officers, is opposed to the idea of their being included in an act of assignment. There can be no doubt on this point ; for this incompetency is declared by our Statutes themselves. But should the assignment comprise also property which the insolvent holds by the liberality of a donor or testator on the con- dition that it shall not be liable to seizure ? It is true that the Common Law of the country exempts such property from seizure, and thus gives effect to the condition attached to the legacy or donation. But the law relating to insolvency is special and ex- ceptional ; and when its provisions are clear and precise, they must not be subordinate to the Common Law, which is modified by them, instead of modifying the same. Now the Act has not ex- cepted such property ; it invests the assignee with all the property, except such only as is exempt from seizure by statute, in order that the insolvent may not be deprived of the necessaries of life. Such property, therefore, as is exempt only by the Common Law, falls into the general mass of the estate of the Insolvent and is con- veyed with it.* the furniture, Ac, still remained the property of the assignees under the first commission, and did not pass under the'second assignment. (Walker vs. Burnell, Doug., 316 | and see MuUin vs. Moss, 1 M. and S., 335.)" — Mr. Edgar, pp. 26 and 27. * But does the assignment comprise property actually under seizure ? Under the last Bankruptcy Act, it was held that the assignees of a bank- rupt could not stop the execution of a judgment, by alleging the issuing of a commission since the seizure. (I Rev. de Jur., p. 45, McFarlane vs. Lanctot and Brault, assignee.) This decision however does not seem to hold that the property seized does not fall into the hands of the assignee, but merely that he cannot prevent the sale by opposition. We are also inclined to believe that the present Bankrupt Act does not empower the assignee to oppose the sale by alleging the execution of a deed of assignment or his appointment under a compulsory process, because paragraph 7 of section 4 enacts that "all powers vested in any insolvent which he might legally execute for his own benefit, shall rest FORCED. 33 is con- § 13. Forced assignment.— The 3rd section, paragraph 2, pro- vides as follows : — " If a trader ceases to meet his commercial in and be executed by the assignee in like manner and with like eflfect." At the time the assignment was made, the Insolvent having no right to oppose the sale, the assignee can have no greater right, the property seized being vested not in the Insolvent, but in the hands of justice, en justice. As however property actually under seizure belongs to the Insolvent, it must be comprised in the assignment under paragraph 7, section 2. As, under the Act, the assignee becomes an oflBcer of justice, authorized to realize the estate, and has consequently concurrent jurisdiction with the Court ordering the sale, the guardian cannot prevent him from effecting it, in case the property seized should become liable to be sold by him before the delay fixed by the Sheriff should have expired. To illustrate our view.i, we refer to the case of two writs of execution issued against the same defendp.nt and executed on the same property. The point however is raised in a cause now p'^nding in the Superior Court, at Montreal, betr/een John White, assignee, and Gerhard Lomer, guardian. At all events, the plaintiff bringing the property to sale has then the right to bo collocated in Bankruptcy by special privilege for the costs of execution. The section 6 of the " Act to amend the Insolvent Act of 1864," now before the House, declares that Bankruptcy extends to all the effects of the Insolvent under seizure or otherwise, " so long as they are not actaally sold by the Sheriff; and section 10 of the said Bill enacts that no seizure shall be issued, made or proceeded with after the appointment of an assignee or the issuing of a compulsory process." We consider section 6 of said Bill as merely declaratory of the principle of the Insol- vent Act, although not expressly enunciated, viz : that the assignment comprises goods actually under seizure; but section 10 introduces a new principle putting an end to all executions, and empowering the assignee to oppose. By the 9th section of the same Bill, the seizing creditor has no privi- lege for his costs or otherwise by reason of said seizure, unless the writ of execution be issued and delivered to the Sheriff at least thirty days before the assignment or the issuing of a compulsory process. This last section is manifestly unjust. Why, a creditor who hag caused his execution to be made within the thirty days, but before any notice whatever of insolvency was given, and even before it was pos- sible for him to know that the debtor was insolvent, will not be allowed to rank by special privilege for the costs he has incurred for the bene- m 34 ASSIGNMENT. liabilitiea generally as they become due, any two or more creditors for sums exceeding in the aggregate five hundred dollars, may . * 1: !.,.'"' I'i.i ,,.f. fit of all the creditors generally, by preventing the Insolvent from doing away with bis estate I The Act expressly enacts that the assignment shall convey and vest in the assignee all the property of the Insolvent, in the most extensive words ; but does it also comprise property situate without tbe Pro- vince ? As to personal property there is no doubt it does. As laid down by Lord Loughborough, " it is a clear proposition, not only of the law of England, but of every country in the world where law has the sem- blance of science, that personal property has no locality. The meaning of that is, not that personal property has no visible locality, but that it is subject to that law which governs the person of the owner. With respect to the disposition of it, with respect to the transmission of it, either by succession, or tbe act of the party, it follows the law of the person. The owner in any country may dispose of his personal property- If he dies, it is not the law of the country in which the property is, but the law of the country of which he was a subject, that will regulate the succession. Personal property then being governed by the law which governs the person of the owner, the condition of a bankrupt by the law of this country is, that the law, upon the act of bankruptcy being committed, vests his property upon a just consideration, not as a forfeiture, not on a supposition of a crime committed, not as a penalty, and takes the administration of it by vesting it in assignees, who apply that property to the just purpose of the equal payment of his debts. If the bankrupt happens to have property which lies out of the jurisdiction of the law of England, if the country in which it lies, proceeds accord- ing to the principles of well regulated justice, there is no doubt but it will give effect to the title of the assignees. The determinations of the Courts of this country have been uniform to admit the title of foreign assignees." — Sill vs. Worswick, 1 H. Bl. 665 (App. 514). The practical importance of this principle has been ably explained in Phillips V. Hunter, A.D. 1195, 2 H. Bl. 402, (App. 521), in the following manner : " In a country, a great part of whose commercial capital is employed abroad, it is peculiarly proper that such capital, over which the trader has a disposing power, although situated out of the kingdom, should be considered as referable to the domicilium of the owner. If the bankrupt laws were circumscribed by the local situation of the pro- perty, a door would be open to all the partiality and undue preference which the bankrupt laws were framed to prevent ; it being easy to foresee how frequently property would be sent abroad with that unjust FORCED. 35 If make a demand upon him, (Form E.) requiring him to make an assignment of his estate and effects for the benefit of his credit- ors." , This demand must be signed by the creditors, and be in accor- dance with the form prescribed or its equivalent.^ It is essential that mention should be made therein, that the demand is made under the Insolvent Act. It may be signified by a bailiff, or by any other person, and personally, if possible. It is impossible to lay down precise rules for establishing the time when a trader is considered to cease to meet his liabilities generally as they become due. Discontinuance of payment, or continuous stoppage of payment, is a question which must be judged of according to the facts of each particular case. The difficulties of business in general, the commercial reputation of the trader, the extent of his liabilities, the number of them which he has met, the value of his assets and stock in trade, and public notoriety, are so many circumstances which must be taken into consideration.f view, immediately previous to, and in contemplatioa of an act of bankruptcy. If the personal property of merchants employed in the course of their dealings in foreign countries were to be taken by an in- dividual creditor going from hence for that purpose, such merchants would be materially affected in their credit at home." As to real property, we see no reason why the same rule should not apply, subject, as a matter of course, to the privileges and mortages already held according to the law of the foreign country. The appoint- ment of an assignee under a compulsory process should have a like effect. According to the best authorities, a commission in bankruptcy operates abroad as a voluntary assignment. Our own Courts have also so decided in Bruce vs. Anderson and Randall et al., assignees, 0pp. Stuart's Bep., p. 127. * It is to be regretted that this form does not show the amount claimed by the creditors. The debtor has interest to see upon the face of the demand, how the parties making it are within the clause of the Statute. t " The words of the Act seem to constitute merely an expansion or explanation of the usual phrase applicable to such a state of things, — stoppage of payments — cessation de paiements. And they embody in a few words, the interpretation given to the 437th article of the Code of Commerce by writers of authority. The phrase " ceases to meet his engagements generally as they become due," wonld not usually be H 86 ASSIGNMENT. In fbot, if the trader,'^' from whom an assignment is required, asserts that the stoppage of payment was neither real nor frau- • '• .,1. 'II' I 'ill ' ■f iiii 'ii satisfied by one or eren several protests of negotiable paper, if the debtor oontiaued hli business and manifested m no other way any disorder in his aflfairs. M. Pardessus remarlcs ufon this point with his usual practical sense— on ne devrait pai toujour* voir un aigne de ceatation de paiements dana un ou quelquea proteta. Combien de commerganta, mime dana lea grande villea, mat* aurtout datia lea petUea, oxi lea reaaourcea pour rtaUaer promptemefit, aoit dea effela a longa termea, aoit dea marekandiaea, aont extrimement rarea, ae trouvent avoir leura magaaina »t leura porte- feuillea remplia, et aont nianmoina forc6a de laiaaer proteater dea ehgage- 7nenta qu'ils acquittent enauUe! 4 Pardessus, p. 268, no. 1101. See also 1 Bedarride, des Faillites, No. 18. 2 MassS, 1148 ; et de mime, (says M. , Renouard, p. 127), que quelquea puiementa refuaia, pour dea motifa apiciaux, ou par auite de contestationa particulihres, ne conatituent paa en faillite le commergant qui continue d acquitter rSguliirement I'enaemble de aea engagementa; de mim* auaai, quelquea paiementa opiria vlempichent pa* que la faillite ait lieu. The discretion of the jadge or court must be exercised on the decision of each case according to circumstances, for it is plain that the same number of failures to pay, which in one case would be disregarded as affording no evidence of stoppage, might, in another, establish it conclusively. The words of the clause would seem to avoid ambip:iiity as much as could be anticipated. Payments of commercial linbllities generally must cease, which could not be said of isolated and intermittent instances of non-payment. While it might with propriety be considered to have taken place, though but few cases of non-payment had occurred, where the debts left unpaid were large, and where payment was not resumed. '.' It ia also made essential that the unpaid liabilities should be commer- cial, thus constituting the only case in which the jurisdiction created by the Act is both real and personal. '!?his is similar to the rule of the French law, as expressly enacted lu tUe code of 1807, art. 441 ; and as established by the opinions of the ^vriters upon an amendment of 1838. 2 Mass^, p. 307. 1 Bedarride, dea faillite*,^. 27." Mr. Abbott, p. 19-20. " It must be observed however that the Act does not make the tem- porary character of the stoppage alone sufficient to relieve the debtor from the obligation sought to be imposed upon him by the demand. If his assets appear to be insufficient to meet his liabilities, and this insufficiency was the cause even of a temporary stoppage ; or if the stoppage was for a fraudulent purpose, the proceeding is allowed to go on." (Id., p. 21.) * The party from whom the assignment is requhred must be an actual flfi FORCED. dulent, but only temporary and aooidental, he may, within five clear juridical days from the demand, present a petition to the judge praying that no further proceedings be taken upon such demand, (sec. 3, par. 3.) He has the same privilege if the claims of the creditors making the demand do not together amount to five hundred dollars,* or if they Vfcre procured in vrhole or in part for the purpose of enabling such creditors to take proceedings under this act, (ibid.) The judge hears witnesses and the parties upon (his petition, which be grants or rejects with or without costs, at his discretion. Nevertheless, if the demand for assignment has been made by the creditors merely to enforce payment under color of proceeding under the Act, the judge in such case may condemn them to pay treble costs, (par. 3.)t trader. In fact, it has been held in Upper Canada that a trader, who has ceased to trade before 1st September, 1864, cannot be proceeded against under this and the two following sub-sections. (Bagwell vs. Hamilton, 10, U. 0. Law Jour., p. 306, also cited bj Mr. Edgar, p. 36.) But it is not necessary for the plaintiff expressly to state in his affidavit for the attachment that the defendant was a trader since the Act came into force (same case). * Paragraph 2 of section 3, empowers creditors " for sums exceeding fire hundred dollars" to demand an assignment, whereas paragraph 3 permits the insolvent to complain in the case that the claims do not amount to Jive huiidred dollars. The word " exceeding" is omitted in the latter sub-section. Tt is to be inferred that two creditors /or yive hun- dred dollars only have a right to proceed under section 3, p. 2. t " A perfectly solvent person may, no doubt, be very much injured in his business and reputation by malicious creditors making a demand upon him under these clauses. It is true that he may deny the allegation in the demand by a petition, and bring evidence before the court to prove the unfounded nature of the demand. Yet all that the judge is empowered to do, should the petition be substantiated, is to condemn the creditors to pay treble costs. In the English acts, the court is authorized to award satisfaction for the damages sustained by a malicious or unfounded petition beinj; fyied. It is presumed that the fact of a judge awarding treble costs against the creditors would not prevent their being rendered liable in an action of damages for maliciously abusing the provisions of the Act. Before the trader could bring such \ ASSIGNMENT. ij! . Mi I ''I-: !-4 •■■\>\ |it,|iH'!i Notice of petition is to be given to the creditors by a bailiff, or a literate person, and they should have one clear day's notice, if they reside v/ithin fifteen miles from the court ; one extra day is allowed for each additional fifteen miles (sec. 2, par. 9). By paragraph 4, of the 3rd seccion, the trader is bound, under pain of being liable to compulsory liquidation, to present such petition, or to call a meeting of his creditors within the same delay, and to complete the assignment within three days after the first meeting or the adjournment thereof. The method of proceeding, in case of forced assignment, is the same as in voluntary assignment by the insolvent, and which we have pointed out above, §6 and following. The three sub-sections of clause 3, which we have just set forth, need no commentary. We may, however, be permitted to make a practical observation on the 2nd paragraph which we have cited. Why incapacitate two creditors whose claims united amount to four hundred dollars or more, from demanding of the debtor an assignment under the act ? It is true that the provision made is sufficient for wholesale merchants, but in petty trade, such as that of small towns and of the country, where it frequently happens that a trader does not owe altogether more than a few thousand dollars divided amongst raany creditors, this clause a^ears to disregard them, and refuses them the benefit of its provision. In such a case, it may be said, recourse can be had to the Statute of 1858. But would not the Insolvent Act of 1864, the efficacy and advantages of which are so highly lauded, be of more use and benefit to small trade ? Is it not especially the merchants supplying the greater part of a village or suburb, who feel the want of this pretended simple and economical system ? Evidently, if it affords protection, it does not do so equally to all. action, it is submitted that he would have to present his petition against further proceedings on the demand, and have the same stayed. " One very great hardship upon an honest debtor might be occasioned by these demands, inasmuch as he might in many instances have to disclose in his petition, and before action brought, the nature of defences which he may inteni afterwards to set up against the claimE^ which he has failed to settle." Mr. Edgar, p. 36. FOROED. 39 if § 14. What if the trader has but one creditor f — May he be compelled to make au assignment under section 3, par. 2, which requires two creditors ? However strange it may appear that a trader should have only one creditor, still this is not a simple ques- tion of theory, but one of fact, which cannot fail to present itself in actual practice. It sometimes happens that a trader makes all his purchases and transacts all his business with a single house. How then can protection of the law be refused to this merchant whom his debtor does .not and cannot pay ? In making advances hoi rot the creditor relied upon the security which, the quality of >'.s debtor as trader affords him, and upon the extraordinary means wnich the law places at the disposition of every creditor of a trader ? By what right can such security be done away with ? The cir- cumstance that he is the only creditor did not depend on his will. Does he not in every other respect represent the mass of the credi- tors, and as such has he not as much interest as could have several creditors in having the insolvency declared ? It seems to us that in a case so favorable, section 3, par. 2, should suffer an exception. No doubt the creditor might proceed under the Act of 1858, and the debtor, who had oniy one creditor, might make a voluntary assignment, and be made subject to a compulsory one for any of the causes mentioned in section 3, par. 1. There is nothing to the contrary in the act, and what the law does not prohibit, it permits. 1 . !•: aiast OQed e to e of W9 I :,;i .01!'!!' ■4 -I I .1: II I ■'( „! IV. COMPULSORY LIQUIDATION. §15. In what cases may compulsory process he issued f — Hitherto •we have only considered the mode of voluntary liquidation. We have seen that the insolvent, who wishes to make an assignment, has only to call a meeting of his creditors and make an assignment into the hands of an assignee. But here is not the greatest diffi- culty. It is readily perceived that, as a general rule, there is no ground for expecting fraud on the part of a trader who freely consents to give all he possesses for the greatest henefit of his creditors. It is when the trader premeditates insolvency that he secretly disposes of his goods, closes his books and converts his debts into negotiable paper ; in short, it is when he is dishonest and fraudulent that embarrassments increase, and that the necessity •f a law, at once simple, prompt and rigorous, is felt. According to the old law, an insolvent became subject to saisie arrU and to capias, if he made away with his goods, left the Pro- vince, or even if, continuing trade, he refused to make an assignment, or a composition with his creditors. The Statute of 1858 reputes the trader, who thus refuses to make an assignment instanter, as fraudulent and about to secrete. In such a case all the estate of the insolvent is placed in the hands of justice, and the creditors are notified in the Canada Gazette, and receive the dividends in proportion to their claims ; and such is still the law, as we have shewn above. Under the Insolvent Act of 1864, a trader is reputed insolvent, and any one of his creditors for a sum not less than two hundred dollars* (section 3, par. 6), may subject his estate to compulsory liquidation (section 3, par. 1), in any of the following cases : * This would seem to be sufficient, even in cases where proceedings hare commenced b7 a demand of assignment which requires two credi- tors, claiming not less than five hundred dollars. That act of insolvency, once perfected, ma,j therefore be taken advantage of by any creditor who could initiate proceedings upon the occurrence of any other." Mr. Abbott, p. 22. IN WHAT CASES. 41« 1. If he absconds, or is about to abscond from this Province, (not Lower Canada only) with intent to defraud any creditor (one is sufficient), or to defeat or delay the remedy of any creditor, or to avoid being arrested or served with legal process (section 3, par. a). 2. If he conceals himself with a like intent, (ibid.) " '^ 3. If he remains out of the Province with a like intent, (ibid). 4. If he secretes, or is immediately about to secrete, any part of his estate and effects with intent to defraud his creditors, or to defeat or delay their demands or any of them. (par. b.) 5. If he assigns, removes, or disposes of, or is about to assign, remove, or dispose of, any of his property, with intent to defraud, defeat, or delay his creditors or any of them. (par. c.) 6. If, with like intent, he procures his property to be seized, under execution or otherwise, for a demand of its nature, proveable under the Act, exceeding two hundred dollars, and does not satisfy the demand, (par. d.)f 7. If for a sum of at least two hundred dollars, he has been It It has been held in Upper Canada, in re Worthington vs. Hamilton, that the procuring property to be taken in execution, does not apply to the insolvent, simply allowing a bond, fide creditor to obtain judg- ment by default. This, as it was observed by the learned judge, is not a procuring of the debtor's goods to be seized, but there must be some overt act of the insolvent himself proved. " An act of bankruptcy by procuring goods to be taken in execution in not committed till actual seizure, and when so committed is not carried back by relation to an earlier period, (Belcher vs. Gunmow, 11 J .r. 286, Gibson vs. King, 1 Cor. and M. 458). The mere allowing a judgment to go by default, under which judgment the debtor's goods are taken in execution, is in itself no procuring the goods to be taken in execution, so as to constitute an act of bankruptcy. (Gibson vs. King, ubi tupra.") Mr. Edgar, p. 32. Mr. Abbott, in his Bill to Amend the Insolvency Act of 1864, sect. 2, suggests the following additions to sub-section a : " or if he permits any execution issued against him under which any of his chattels, land, or property are seized, levied upon, or taken in execution, to remain unsatisfied till within forty-eight hours of the time fixed by the sheriff or officer for the sale thereof." 42 COMPULSORY PROOESS. li "' ,■'! iili' ■'1; , i ill >i). iii:i actually imprisoned for more than thirty days, and is still impri- soned, or if he has escaped from prison, (par. e.*) 8. If he wilfully neglects or refuses to obey any order requiring his appearance to be examined as to his debts under any statute or law in that behalf, (par. /.), or commanding him to pay any part of his debts, (par. ^.) 9. If he has made any assignment of his property for the beniefit of his creditors otherwise than in the manner prescribed by the Act. (par. t.)t 10. If the petition to quash the demand for assignment be rejected, or if, while it is ponding, the debtor continues his trade, or proceeds wr't^ the realization of his assets, (section 3, par. 4.) 11. Ifwithi juridical days from such demand, the debtor fails to present sue . itition and to call a meeting of his creditors as provided by section 2. (ibid.) 12. If he does not complete such assignment within three juri- dical days after such meeting or its adjournment, (ibid.) * "In order to constitute the act of bankruptcy, there must be an uninterrupted imprisonment for more than thirty days. If a man arrested be bailed out before the expiration of the thirty days, and after- wards render in discharge of his bail, and remain in custody thereafter, the thirty days will begin to run on the day of the render, and not on the day of the original arrest, (ex parte Dufresne, 1 Ves. andB. 51 ; Tribe TS. Webster, Willes, 464)." Mr. Edgar, p. 32. t " The only creditors who will be in a position to take advantage of this act of bankruptcy in order to enforce compulsory liquidation, are those who have not signed and become parties to the deed of assignment, for the benefit of creditors. It has been recently decided in England that a creditor who has executed such a deed may not afterwards take advantage of the assignment as an act of bankruptcy whereon to found proceedings against the assignor. (Re a disputed adjudication, 2 L. T. (N. S.) 77 Bank.) If a debtor execute a deed of assignment to trusteieis for the benefit of creditors, he commits an act of bankruptcy, although the trustees do not assent thereto, and refuse to execute the deed. (£x parte Slann, 6 L. T., (N. S.,) 400 Bank.) "An assignment intended to be made under the voluntary clausei of this act, might from some entire omission of a prescribed proceeding, btt an act of bankruptcy under this paragraph." Mr. Edgar, p. 33. Seet also above § 10, note, page 24, 25. IN WHAT OASES. 43 13. If, having given notice of a meeting of his creditors, as required by the second section, he neglects to proceed further thereunder, (ibid.) Compulsory proceedings cannot be commenced unless within three months after the act or omission justifying their adoption,* or after a voluntary assignment has been made, or an assignee appointed under the Act. (see section 3, par. 5.) • ■ '!• •- ' As it appears, this long list, apart from the unimportant clauses which are inherent in the very system, contains nothing else but the simple provisions of our common law, set forth in a more im- posing form. Our old Statute says that the sudden departure irom the Province, or concealing with intent to defraud, justifies the issuing of a writ of saisie arret and of a capias ad responden- dum; and the Act of 1864 says nothing more. Under the old law, indeed, it was always allowable to proceed against the debtor who threatens to abscond, or to secrete or dispose of his property with a view to delay the remedy of his creditor ; for in that case there is fraud. It is the same as regards him who, with like intent, causes his property to be seized with a view to transfer it to a third party under color of a judicial sale ; for here also is fraud. And very recently there was before the Court of Appeals a case of capias ad respondendum, the chief ground of which was the allegation of a judicial sale, by means of which the defendant had fraudulently placed his property under his brother's name. It is not in cases of open fraud that difficulties exist under the rule of the old law, but when it is attempted to detect it, to pre- vent and arrest its effects; and, in this respect, the law of 1864 * " In order to justify proceedings to place an estate in convpulsorj liquidation, it would seem that the act of bankruptcy relied upon must have been committed during the existence of the debt of the creditor making the application, (Bailie vs. Grant, 9 Bing. 121 : 2 M. and Scott. 193.) If committed, even on the same day that the application is made, it will be sufiScient. (Ex parte Dufresne, 1 Ves. and B., 61 ; Hopper vs. Richmond, 1 Stark, 607)." Mr. Edgar, p. 37. The same will probably be held under the present bankrupt law, for the compulsory process is based upon fraud, intent or presumption o€ 'fraud. I4 COMPULSORY PROCESS. ■'HI liiii M l:''i;/,f iiH ^!l has in no way ameliorated the position of commerce ; nay more, it has made it worse, hy the adding of further formalities and grant- ing delays ; such is that of five days allowed the insolvent to deli- berate. It is very hard, it may be said, not to give a trader even a single hour for deliberation, as is the case under the Statute of 1858. It may, perhaps, be rigorous, but this rigor is explained' by the fact of the debtor's insolvency. What need, therefore, is there for delay, especially when the assignee has been appointed, and the debtor himself of his own free will has called a meeting of his creditors ? Is he not insolvent ? Does not his estate belong to his creditors from whom he holds? Why then defer the assignment ? It is not sufficient to severely punish fraud once committed ; it is especially necessary that prompt and immediate means should be devised to prevent its commission and to seize without delay the property of the insolvent — that only security of the creditors. Now, the execution of a saisie arrtt, made imme- diately on refusal or neglfect to make an assignment as permitted by the Act of 1868, is certainly the proper remedy to apply to debtors, too often dishonest, and to compel them to make pay- ment ; and to judge from the system itself, there is every reason to believe that before long, experience will teach us that, in all these respects, the Statute of 1858 offers greater guarantees than the Statute of 1864. We ought, however, to add, that one serious obstacle to the realization of this expectation is found in clause 1 1, par. 16, which declares that the expenses incurred under the In- solvency Act are alone privileged. This unfortunate circumstance may, perhaps, force the creditor to proceed under the Act contrary to his desire ; so true it is that, if it did not expressly abolish the old law, it tends to bring it into desuetude. As we have already observed about two years ago, alluding to the Act, which was then only a bill before the House, and as we here again take the liberty of repeating, we assuredly do not want to render the law too severe. It is not at all our wish to sacrifice the guarantees of humanity, to stifle every feeling of pity and of liberality, and to asperse philanthropy properly understood ; it is for this reason that we see with pleasure that the Act of 1864 does- DEBT MUST BE COMMERCIAL. 45 not authorize capias but only saisie arrU ; in this respect, indeed, the law of 1858 is undoubtedly too rigorous, as it offers at the same time both these remedies against the unhappy debtor who is accused neither of concealing nor of absconding, but simply of being insolvent, and of refusing to make an immediate assignmentj; for these reasons also, we applaud that part of the Act which we shall hereafter explain, authorizing the majority of the creditors to give a discharge to the insolvent against the will of the||rest. But we perceive we are anticipating the clauses of the Statute, and so let us return to the compulsory process. § 16. Is compulsory process available only in case of a commer- cial debt ? — It may here be asked whether, in order to exercise the right of forced liquidation, in a word, bring a trader into bankruptcy, the debt must necessarily be a commercial one, and whether the trader, who does not meet his non-commercial engage- ments although he docs meet his commercial ones, is liable ta be declared a bankrupt. It appears to us that, both by the prin- ciples and the text of the Act, this question must be decided in the negative. It is admitted, indeed, that in Lower Canada the Act applies to traders only (sec. 1), and that which constitutes a trader, is commercial acts. How therefore can non-commercial acts, without a violation of the intent of law, bring a party under its operation ? As it is justly remarked by Locr^, on article 441, No. 4, of the Code de Commerce, the man who devotes himself to trading, unites in himself two qualities which have nothing in common, -the quality of the trader and that of the individual. When acting in the former capacity, he comes under the exceptional legislation that governs trade, and when acting otherwise, that is, when he bargains or binds himself as an ordinary individual, he remains under the common law.* * It has been held under the former Statute on Bankruptcy that to. give jurisdiction to the Bankrupt court, the debtor must not only be a trader, but that the debt must also be a commercial one. Regnier,. bankrupt, and de Lorimler et u'x., creditors. 1 Revue de Jur., p. 232. This decision was rendered by Mr. Justice 0. Mondelet, in the following words : *' Gomme Regnier est traduit derant cette cour, pour une dette que les cr^anciers poursuivant font eux-mlmes voir 6tre une transactioa 46 COMPULSORY PROCESS. i !" . ■ I :;.i)|i' II; '■■ :■ 'ii m Moreover we cannot deny that sec. 3, par. 2, is conclusive in favor of our view in this respect. There is indeed no stoppage of payment except that of commercial engagements which can autho- rize a forced assignment of property. Upon what grounds can it be argued that a trader might be declared insolvent on account of non-commercial debts ? If, in the other clauses,the legislator has made no distinction, it is because in Lower Canada the Act applies only to traders, and in Upper Canada to all persons without dis- tinction. Desiring to legislate for the two Sections, he could not always place the word commercial beside the word engagements, which he employs in par. 2. There he has done so, because he is legislating for traders only in both sections of the Province. Moreover we must not lose sight of the fact that by commercial debts is to be understood a debt not only commercial in its form, de famille, pour Writer des prpces, la cour ne fait aucune difficult^ des questions qu'on lui a soumisea. II est d'aillears une raisoa qui fait toucher au doigt, la singularite de la pr^tentirn des cr6anciers poursui- vant. Ne voit-on pas que si I'oa pouvait, p ar quelque cause ou dette que ce soit, amener le debiteur en cour de banqueroute, pourru seule- ment qu'il fut comtner^ant, I'on ponrrait par ce moyen soumettre non seulement au juge en banqueroute, mais a Taction et d I'arbitrage des deux tiers des cr^anciers, toute affaire quelconque, et par la, contraindre a se soumettre a cette jurisdiction, toute personne qu'on prouverait 6tre marchand et commer^ant, et ainsi sacrifier, perdre et ddtruire des droits de famille, et mille et mille autres ? La cour n'h^site aucunement a rendre le jugement suirant : " La cour, parties oul'es sur I'exception d^clinatoire da dit Auguste negnier, ayant examine la procedure et la preuve, et sur le tout d^lib^rd: €onsid^rant qu'il n'est aucunement prour^ que le dit Auguste Regnier ait 6t6 ou soit marchand ou commer^ant, tel que le veut et I'esige la loi, pour le rendre justiciable de cette cour : " Consid^rant que la cause de la dette all^gu6e fetre due par le dit Regnier au dit Chamilly de Lorimier et son Spouse, n'est pas un fait de commerce, mais an contraire, est une transaction i6 famille, qui ne peut avoir I'effe't de fbire arracher i ses jugies naturels le dit Regnier, ponr le soumettre i.\ei rigueurdes dispositions exceptionnellesquinedeviehnent le droit commun que pour le commerce. "Maintient la,dite exception d^clinatoire, declare qu'elle, la dlte conr, n'a atkcune jurisdiction sui' le dit Regnier, eti la pr£&ente ibatiere, et le renvoi abaont de la aottttifiation dman6e coiitre lui, avec d^pens." AFFIDAVIT, WRIT, ETC. 4fl*' but that also which is such in its cause or its object, although apparently non-oommeroial. A debt commercial in its cause does not become non-commercial because it has been followed by a deed of obligation or mortgage. Failure to pay such a debt is therefore one of the causes for which the Act authorises compulsory liquid- ation. § 17. Proceeding)! in compulsory liquidation. — It is easy to conceive that it would often be unjust and vexatious to subject a trader to the consequences, always disastrous, of compulsory liqui- dation or saisie arret of his property, unless the creditors were bound to make certain preliminary proof, and to establish certain presump- tions of fraud. Thus, the Act of 1864, like our old statutes, requires an affidavit (Form F) of the creditor or his agent, in which he alleges the particulars of his claim, which must, at the least, amount to two hundred dollars, the insolvency of the debtor, and the facts which, under the Act, justify attachment, taking care to give the reasons in detail (sec. 3, par. 6) as in the case for capias.* This affidavit is sworn to like all other affidavits used in the Superior Court, before a commissioner,f and is filed in the office of the Prothonotary of the district where the defendant has his place of business (ibid.) ; for the Superior Court of such district alone has jurisdiction in matters of compulsory liquidation, and can alone take cognizance of them ; in this, there is a derogation from the old rule, which allows proceedings to be taken either before the Court of the district in which the cause of the action arose, or before the Court of the district where the defendant is temporarily, or lastly before that of the district in which the defendant resides. * See Rule of Practice 13. t The Act is silent as to the ofiScer before whom the affidavit is to be sworn to. Mr. Abbott, p. 22, states that the oath is to be taken before "any judge or commissioner for taking affidarits in the Superior Court." We do not see however why an affidavit sworn to before a justice of the peace would be bad — because it is provided by section 13 of the 82ad chap, of the Cons., Statutes for Lower Oannda,that "any oath required to be taken under any act, in which no mention is made of the name of the public functionary before whom such oath is to be taken, may be admin- istered by and taken before any justice of the peace or a commissioner." \ mi,: ■.' 99 COMPULSORY PROCESS. Upon Buoh affidavit being filed, a writ of attachment (Form G) is issued against the estate and effects of the insolvent addressed to the sheriff of the district (sec. 3, per. 6). The writ is accom- panied by the declaration (ibid). It is to be regretted that the Act does not permit it to be produced afterwards at the Protho- notary's office, in accordance with the practice pursued up to the present time under the old law. This is still an additional obstacle to the prompt seizure of the property of the insolvent. The rules relating to the issuing of the writ, time and mode of service, are the same as those actually followed in the Superior Court ; they have not been changed. § 18. Sherlff^s Proceedings. — Upon receiving the original writ of tjie Court, the Sheriff should give notice thereof, by advertise- ment, in accordance with form H (par. 8) ; the Statute having ordained no special manner of giving it, we must suppose sec. 11, par. 1, to be applicable here, and that the notice must be published in the Canada Gazette, and in one French and one English news- paper published at or near the place where the Court sits. At the same time, and according to the usual practice in case of ordinary attachment (sec. 3, par. 6), but without proems- verbal, he should proceed immediately to seize all the estate and effects of the insolvent, including his books of account, moneys and valuable securities, and all his business papers, and vouchers of every kind and description, wherever situate, and consequently sans entiercement (par. 9). The Act, with regard to propevty rendered seizable, introduces a marked amelioration which has been existing in England and elsewhere for several years. If the Sheriff acts by an agent or messenger, he must establish his authority by addressing to him, by name and description, a copy of the writ of tlie Court certified under his own hand (par. 9). . , § 19. Guardians. — The estate and effects attached generally by the Sheriff are placed in the custody of the official assignee of the Board of Trade of the district, or of the nearest district, and if there be no such assignee, then under the guardianship of any solvent and responsible person willing to act (par. 10). sheriff's proceedings, etc. # The guardian thus appointed, and otherwise subject to all the rules which govern ordinary guardinns en justice, should, without delay, proceed to make an inventor^ of the estate and effects of the defendant,* and also a statement of his affairs from the books, accounts, and papers attached. § 20. Return of the writ, \i)i ii|i' If 's" I 'J ^y-yv,^M-:M I't ' • f I m ■ 1 ' *.-■■. .■ ■>riu M ASSIGNEES. § 25. Assignees of the Board of Trade. — In the preceding articles we have alluded to the proceedings preparatory to the liquidation of the insolvent's estate ; we therein saw that in all cases — in voluntary assignment as in the case of compulsory liquidation — we are always brought to the appointment of an agent, designated by the name of assignee, and charged with the adjustment of the rights of the parties interested, conformably to the provisions of the Act ; we have also shewn how to arrive at the nomination of this import- ant personage in bankruptcy, and on this subject we have fre- quently mentioned the name of a special assignee, always ready to intervene in bankruptcy. We now refer to official assignees ap- pointed by the Board of Trade. " The legislature foresaw that sometimes the creditors would not be able to agree upon the choice of an assignee, that moreover, questions which might arise, being always submitted to the same persons, would be more ably discussed and decided; for these reasons, it ha" provided for the appointment of permanent official assignees. . " By section 4, par. 1, the Board of Trade at any place, or its council, may name any number of official assignees for the district in which it exists, and in which the assignees reside. Still more, it may name assignees for the nearest adjacent districts, in which there is no Board of Trade (ibid.); and already the Montieal Board of Trade, by various resolutions, has chosen a certain number of persons as official assignees for each district which comes under its control. A copy of the resolution naming such assignees, certified by the Secretary of the Board, should be transmitted to the Prothono- tary of the Court for the district in which they reside (sec. 4, par. 1.) 58 ASSIGNEES. if""l I m § 26. Security hy the assignee. — The assignee appointed by the Board of Trade cannot act as such without giving security. The Board cannot exercise its discretion on this behalf; when it names the assignees, it must declare what security they shall give (sec. 4, par. 1). On the other hand, the assignee, who is other- wise named, may act without giving security, if not required by the creditors. They have, in fact, the power to demand security from every assignee, official or not, and they may even demand a change in the security bond given to the Board of Trade (sec. 4, par. 6). The nature of the security is left completely to the will of the Board of Trade, or the will of the creditors (sec. 4, par. 1 and 6). If the security does not imply an hypothec, it may be given sous sdng privi ; if, on the contrary, it does, it must be taken before a notary, except as to lands held in free and common soccage, on which hypothecs under seal and before witnesses are permitted. If the bond is taken by the Board of Trade, it must be by the Pre- sident, /or the benefit of the creditors of any person whose estate is, or may be in process of liquidation under the Act (sec. 4, par. 2). If required by the creditors, it must be taken in their favor, in the name of the " Creditors of A.B., an insolvent under the Insol- vent Act of 1864" (par. 6). All questions relating to the security bond, or to changes in, or additions thereto, are decided by the majority of the creditors in number and in value (sec. 11, par. 2), unless they arise at the first meeting of the creditors called to accept a voluntary assignment : in which case they must be decided by the majority in number (sec. 2, par 5). § 27. Nature of the office of assignee, his powers. — The assignee, as constituted by the Act, is an agent of a special nature. He is not a simple agent, inasmuch as he is in sole possession of the estate of the insolvent, which he holds and manages in his own name. Neither is he a simple factor, for in all his transactions his capacity is disclosed. The assignee appears to us to be, at once, a broker, a simple agent, and also an officer of justice, enjoying many of the powers and privileges of these persons, and at the same time subject to many of their obligations. DUTIES OP. 59 Y' I As agent and broker, he is charged with the settlement of the affairs of the insolvent, and with the control and management of his estate ; as such, he is bound to obey the orders and instructions adopted by the creditors at a specif meeting, (sec. 4, par. 2), to take proceedings for the recovery of the security forfeited by a previous assignee, to exercise all the powers and rights pro- perly belonging to the insolvent (par 7), to sue for the recovery of all debts due to the insolvent, and to represent him and intervene in all suits in which the latter is interested (par. 9) ; as such agent or factor, he is also subject to all the penalties provided for by the criminal law against agents, who embezzle the property of their principals, or render themselves guilty of the other acts of malversation defined in chapter 92 of the Consolidated Statutes of Canada (sec. 12, par. 6). - ... As an officer of justice, the assignee has the power to sell the movable and immovable property of th'^ insolvent ; he is bound to comply with the injunctions of law and of the creditors, and in case of non-compliance, he may be condemned for contempt of Court, and imprisoned in the same manner as the ordinary officers of justice (sec. 4, par. 16). § 28. Duties of the assignee. — The assignee must — 1. Deposit in the office of the Court of the district in which the proceedings are carried on, a copy of the deed of assignment, accompanied, in case of voluntary assignment, by the list of the creditors which was produced by the insolvent at the first meeting (sec. 2, part 8). 2. Give notice of this assignment (Form D.,) immediately after its execution (sec. 5, par. 1 ; sec. 10, par. 1 ; sec. 11, par. 3), or of his appointment as official assignee, (Form K.,) sec. 3, par. 24, requiring] the creditors, in either case, to produce before him, within two months from the first advertisement, their claims and the vouchers in support of the same.* 3. Make at the same time a general inventory and descrip- tion of all the assets and debts of the insolvent, and also of his books of account, obligations, notes, titles, and other documents, — . - - * See Bule 22. ^ \ 60 ASSIGNEES. I <'i M"! '.mM m 'i — whioL may serve to throw light on his affairs, and to show that his books have been kept in aooordance with the usage and rules of trade. 4. Call a meeting of the creditors, whenever required so to do by the written request of five creditors, specifying the object of such meeting ; or whenever he is required to do so by the judge, on application of any one creditor, of which application he shall have received one clear day's notice ; or whenever he shall himself require instructions from the creditors. In the notice of meeting, the assignee must state the object of the meeting (sec. 4, par. 3).* ,- • i 5. Assist at all meetings of the creditors, by taking and preserving the minutes thereof, signed by himself, and also signed and certified at the time by the chairman, or by three creditors present; he must also keep a correct register of all his proceedings and of all claims made to or before him (sec. 4, part. 5).t M . • Mr. Abbott, p. 32, says, that this notice must be given in the mode iadicated by §11, p. 1. Are we to believe that it must be advertised ia the Canada Gazette and other public papers during two weeks? It seems to us that the mode indicated by sec. 11, p. 1, has no application to this notice, for it is not required by the Act to be given by adver- tisement. It is therefore sufficient that the same be left with the party, or mailed, postage paid. t " The Assignee shall, from time to time, under order of date, and within twenty-four hours after the proceedings had before him, file in the said Clerk's office a clear copy under his signature as such assignee, of such proceedings, together with a copy of the several news- papers and official Gazette, in which he shall have caused notices of such proceedings to be advertised, which said copy and newspapers shall form part of the record of proceedings of the particular case." Rule 25. " The record of proceedings in each case shall at all times during office hours, be accessible, at the clerk's office, to creditors and others in interest in such cases, for examination or extract therefrom, grah's. and in like manner the minutes of meetings of creditors, and the registers of proceedings, together with the claims made and the documents in possession of the Assignee, shall also be accessible to creditors and others in interest in the case, at convenient hours, daily^ to be appointed by the said Assignee.'' Rule 24. REMOVAL OP. «1 6. Obey all rules, orders and instructions, not contrary to law, which are made for his guidance by the creditors at a meeting called for the purpose, (par. 4.) 7. Deposit weekly, at interest, in the name of the estate, in a bank, at or nearest to his place of business, within fifteen miles, all moneys received by him, until otherwise specially instructed by the creditors (sec. 4, par. 4).* 8. Receive and enter in his register and examine all the claims against the insolvent or his estate, filed by the creditors in manner and form, explained in title VI (sec 4, par. 5). 9. Wind up the affairs of the insolvent, by the sale of his movable and immovable property, and by the collection of all debts, in order to divide the proceeds of the same among the creditors, according to the nature of their claims (sec. 4, par. 8), as we shall point out in titles VII. and VIII. 10. Call a meeting of the creditors, by advertisement, immedi- ately upon the expiration of two months from the first notice of assignment, or of his appointment as official assignee, for the public examination of the insolvent (sec. 10, par. 1), or for the ordering of the affairs of the estate generally (sec. 11, par. 3). 11. Render an exact and faithful account of his gestion and administration immediately after the declaration of the final dividend (sec. 4, par. 22), and leave at the bank, where they are deposited, all dividends remaining unclaimed at the time of his application for discharge (sec. 5, par. 17). § 29. Removal or decease of the assignee. — Before the period at which dividends may be declared, any assignee may be removed * " The assignee shall, on the third juridical day of each month, after he shall have commenced to deposit estate moneys in a Bank or £ank agency, as required by the said Act, file of record in the case an account of the estate, shewing the balance thereof in his hands, or under his control, made up to the last day of the preceding month. And no moneys so deposited, shall be withdrawn without a special order of the Court, entered in the docket of proceedings in the case, or upon a dividend sheet prepared and notified, as required by the said Act, or unless otherwise ordered by the creditors, under the powers con- ferred upon them by the said Act." Rule 26. !■■; i A 62 ASSIGNEES. If mil"' i 'iii' rail-''., . ■■.,•,:■ m by the judge, upon proof of fraud or dishonesty in the custody or management of the estate, upon the application of any creditor (sec. 4, par. 17). If the removal takes place, or if the assignee dies, more than fifteen days before the said period, the judge appoints another assignee in the same manner as in compulsory liquidation. But if the assignee is removed, or dies within fifteen days after the said period, the judge calls, by advertisement, a meet* ing of the creditors for the purpose of appointing another (ibid.). After the period at which dividends may be declared, the assignee may be removed by a simple resolution passed by the creditors present or represented at a meeting duly called for the purpose ; and if the removal has been effected by an order of the judge, before this period, or if it takes place after it by the creditors, or if the assignee dies within the fifteen days which precede this period, the creditors have the right to appoint another assignee either at the meeting by which he is removed, or at any other called for the purpose (sec. 4, par. 18). The assignee so removed remains, nevertheless, subject to the summary jurisdiction of the Court, and of any judge thereof, until he has fully rendered his account (par. 19). The estate of the insolvent does not descend to the heii!!B of the deceased assignee, but passes to his successor, and, until such successor is appointed, it remains under the control of the judge (par. 21). § 30. Fees or remuneration of assignee. — The remuneration of the assignee is fixed by the creditors at a meeting called for the purpose,^ but if it is not so fixed before a final dividend is declared, it is put into the dividend-sheet at a rate not exceeding five per cent upon the cash receipts. Any creditor, who alleges that the allowance exceeds the value of the services of the assignee, may object 10 it in the same manner as he may object to any other item of the dividend-sheet (sec. 4, par. 20). * This provision does not require that the notice be by advertisement, and therefore it is sufficient if left with the creditors. See above note, page 60, § 28. ' ACCOUNT OF. 68 § 31. JRendering of the account of the assignee, — The assignee, like any agent, is bound to render to the creditors an account of his administration. This he may do immediately after the decla- ration of a final dividend. The final account is prepared by the assignee, and by him kept open for inspection at his office ; notice of petition to be discharged from the office of assignee is duly given by advertisement for two weeks in the Canada Gazette and in a French and an English newspaper, and mailed to all the creditors, in accordance with the requirements of section 11, par. I ; and on the day and at the hour appointed, the assignee presents his petition to the judge, accompanying it with the papers establish- ing the regularity of the notice and also with a bank certificate of the deposit of any unclaimed dividends, or of any balance in his hands, and thereupon the judge, after hearing the parties, may refuse or grant, conditionally or unconditionally, the prayer of the petition (sec. 4, par. 22 and 23). ' •; : m 1 1 :.j'V - . ■t 1' t • '• VI. CLAIMS OF CREDITORS. § 32. Delay within which claims should he filed. — We have already observed that the assignee is bound to call upon the credi- tors to furnish him with their claims within two months from the first notice of the assignment or of his appointment as official assignee. This delay is not, however, fatal ; it is not fixed by any clause of the Statute, and no mention is made of it, except in the forms of notice. So long as the dividends, or even the final divi- dends, are not declared, the creditor may file his claim ; this further results from clause 5, par. 12.* It is more prudent, how- ever, to file all claims within the delay fixed by the public notice given by the assignee ; for immediately thereafter the first dividend must be declared, if possible ; and if there is but one dividend, it is clear tl^at the creditor runs the risk of losing his claim. Clause 11, paragraph 7, contains an exception to this rule; every claim based upon an hypotheque or real privilege should, with the deeds and documents in support thereof, be filed with the assignee within six clear juridical days from the day of sale of the property affected thereby; if not,it is not collocated by preference or privilege, unless leave to file the same be afterwards obtained from the judge upon special cause shewn previous to the distribution of the proceeds of the es ,e, or unless a dividend upon such claim has been reserved by the assignee (section 11, paragraph 7).* If, indeed, it actually * And from section II, paragraph 7, eaacting that the privileged or hypothecary creditor having failed to file his claim, " shall not be entitled to any preferential collocation upon the proceeds of such real estate," the legislator undoubtedly meaning thereby that he may then be collocated pro rata or au marc la livre. * Mr. Abbott, in his notes, p. 44, on section 5, paragraph 12, observes that the word " hypothecary" to be found in that section, is intended to mean hypothecary creditors who have not register ed, giving to understand that those whose claims are registered are not entitled to reserved divi- CLAIMS OF CREDITORS. 65 appears to him from an examination of the books of the insolvent or otherwise, that the insolvent has hypothecary and privileged creditors, or even ordinary creditors, who have not filed their claims, it is his duty to reserve dividends for them according to the nature of the claims, and to notify them of the reserve by letter through the post, addressed to their residences (sec. 5, par. 12). Still, if these reserved dividends are not claimed previous to the declaration of the final dividend, they form a part of that dividend, and the creditor remains without remedy (ibid.). § 33. Form of claims. — The claims of creditors are furnished under oath to the assignee, and in writing (Form R.) sec. 11, par. 4.* The oath is to bo taken before a judge, commissioner, or dends, they having received notice under §4, p. 15. According to the learned gentleman's interpretation, there is no difference here made be- tween an ordinary and an hypothecary claim. It has been always understood that an hypothecary claim, be it regis- tered or not, is always such, for the mere reason that it is not the regis- tration of the deed, but the deed itself, which gives rise to it. Such is also the import of the word according to our Registration Act. Con. St. for Lower Canada, chap 37, sec. 117. There is nothing in the Insolvent Act to shew that the word " hypothecary" is not to be taken according to its common and ordinary acceptation ; and in referring to section 11, p. 7, we are thoroughly convinced that such is the meaning intended by the Act, inasmuch as hypothecary creditors, whose claims are registered, are thereunder entitled to be collocated, if they hare filed their claim, or if a dividend upon such claim, has been reserved by the assignee. Under what clause of the Statute can the assignee make such reserve, if it is not under section 5, paragraph 12. Mr. Abbott, in his notes on section 11, p. 7, observes that " if no claim be filed /or any debt which the assignee has reason to believe is due, it is his duty to reserve a dividend upon theam ount of such debt, §5. p. 12. " There is no doubt that these re- marks apply to registered creditors. What then becomes of Mr. Abbott's note already quoted ? " Hypothecary — This must mean hypothecary credi- tors who have not registered." • All claims shall be entitled : In insolvency for the District of In the matter of Insolvent and Claimant plainly written ; and the subject or purpose thereof shall be plainly and concisely stated. They shall also be subscribed I y the claimant or by his attorney ad litem for him. Rule 6 — It is better that thej be endorsed with the names of the parties and the general description thereof and with the name of the Attorney ad litem. 66 CLAIMS OP CREDITORS. !i» * 'I 'l!r m. 11! justice of the peace (sec. 11, par. 5). The writing ppecifies the particulars of the claim, and the hypothecary or collateral security which the creditor holds from the insolvent, or from his estate, or sets forth the fact that he has no collateral security (sect. 5, par. 5 ; sec. 11, par. 4 and 7); the creditor also specifies the nature and the amount of such security, and its value under oath. (sec. 5, par. 5.) § 34. Proof of claims. — The documents and vouchers in sup- port of claims may be filed with them, but no one is bound to do so, except in the case of contestation of a claim or dividend (sec. 5, par. 13) ; before this stage of the proceedings, no other proof is necessary than the afl&rmation, under oath, of the claimants or their agents ; and the only thing which the assignee can re- quire before preparing a dividend sheet, is the supplemeutaiy oath of the creditor, declaring what amount, if any, he has received in part payment of the claini, tabsequent to the making thereof, together with the mention of the particulars of such payment ; and if the creditor refuse to produce or make such oath before the assignee within a reasonable time after he has been requested to do so, he is not collocated in such dividend sheet (sec. 11 par. 6). « iliii .* VII. - i i. REALIZATION OF ASSETS. § 35. Sale of movables, — The assignee, according to the instnictions given him by the creditors ip the manner prescribed by Bee. 4, par. 4, must sell, in a prudent manner, all bank and other stocks, and generally all the movables of the insolvent, except such as are free from seizure (see. 4, par. 8). § 36. CollectioT^ of debts. — The assignee must also collect the debts of the insolvent, and sue for their recovery in his own name j»s such assignee (sec. 4, par. 8 and 9), and, if after having acted with due diligence, he finds there remain debts still due, the collection of which would prove more onerous than beneficial to the ctate, he should report the same to the creditors duly called at a meeting thereof for the purpose,* and with their sanction, obtain an order from the judge to sell such debts by public auction, after such advertisement as may be required by such order ; and pending such advertisement, he must keep a list of the debts to be sold, open to inspection at his oflSice, and give free access to all documents and vouchers explanato/y of them (sec. 4, par. 11). These debts may be sold separately or collectively, except such as amount to more than one hundred dollars, which must be sold separately (ibid). Finally, no warrants, except as to good faith, can be given by the assignee, not even that the debt is due. A bill of sale, signed by him should be delivered to the purchaser, (Form L), in order to enable the latter to sue in his own name, * Duly called for the purpose, la this meeting to be called by adver- tisement in the mode indicated by section 11, par. 1. The Statute is here silent, but the word duly seems to convey the belief that it should, as also the importance of the meeting. Mr. Abbott, although silent in relation to this clause, (sec. 4, p. 11,) in his observations on par. 13, of section 3, is of opinion that by due notice is understood a notice by advertisement. ^' '/ \ 68 REALIZATION OP ASSETS. for the recovery of the debt, as effectually as the insolvent might have done (par. 12) .f § 37. Sale of lease. — If the insolvent holds, under a lease, property having a value above the amount of rent payable under the lease, the assignee must make a report thereon to the judge, containing his estimate of the value of the leased property in excess of the rentj and thereupon the judge ^rders the rights of the insolvent in such leased premises to be sold, after public notice of sale by advertisement; and at the time and place appointed, the lease is sold upon such conditions, as to the giving of security to the lessor, as the judge may order. The sale is moreover subject to the payment of the rent and of all charges contained in the lease; the purchaser takes the place of the insolvent from tlie time of the sale, and it is to him alone that the lessor must look for his rent, in the same manner as if the lease had existed between them (sec. 6, par. 1). The surplus which remains from the sale of the lease, after allowing for over and above the rent of the premises, forms a part of the assets of the insolvent, and is divided among his creditors. § 38. Sale of immovables. — The assignee must also sell the immovable property of the insolvent, observing the following for- malities (sec. 4, par. 13) : Before advertising the sale, he must obtain from the Registrar of the county in which the im- movables are situate, and at the expense of the estate, a certificate containing the names and residences of the hypothecary creditors entered in the Registry Book, and deposit in the nearest post office, post-paid, a notice addressed to each of such creditors, by the name and to the address contained in the certificate, and also t Held under the old Bankrupt Law, that in an action by the ccssionnaire of the outstanding debts of a bankrupt estate, it is necessary to allege in the declaration that the sale was made by the order of the judge, and that the formalities required by the said Act have been complied with, 2 L. C. Rep., p. 452, Warner vs. Mcrnagh, S. C, Montreal; Smith, Vanfelson, Mondelet, J. See also Mur- ray vs. McOready, 2 L. C, Rep., p. 454, note ; Robertson's Digest, p. 39. SALE OF IMMOVABLE. a notice addressed to any other person whom the assignee believes to be a hypothecary creditor, as for example, by transfer or any similar title, h\forming them of the day of the sale, and that they must file theii claims within six days from that day (sec. 11, par. 7). - Before the day of sale, he must file in the office of the Court this certificate, with a return thereon under oath as to his doings in respect of such notices (sec. 4, par. 15), the whole under pain of paying any loss and damage sustained in the premises (ibid.). The sale by the assignee is advertised for the same time and in the same manner as sales by the sheriff (par. 13). He may even extend this delay at his discretion, and by a resolution of the creditors passed at a meeting called for the purpose and approved of by the judge, the delay may be shortened to not less than two months (par. 13). If the assignee, on the day of the sale, considers the price offered to be too small, he may withdraw the immovable property from the public sale, and sell it subsequently by auction or privately according to such directions as he receives from the creditors (par. 13). He may also grant such terms of credit for the purchase money as may be approved of by the creditors ; and, as security for the payment of the same, he is entitled to receive a special mortgage by the deed of sale, executed before Notaries, or before witnesses in places where lands are held in free and common socoage (par. 14). If there is no reserve of the privilege of hailleur de fonds, the deed of sale is made and signed by the assignee under his private seal and signature in accordance with Form M, and has the same effect as sheriff's title. The assignee must pay to the sheriff of the district in which the immovable is situated one per cent, of the proceeds arising from the sale, to form part of the Building and Jury fund of the district (sec. 12, par. 8). Such are the formalities required by the Statute in order to bring the insolvent's immovable estate to sale. It is readily seen that the adjudication by the assignee is as effective as that by a sheriff, and also that the sale is advertised in the same manner as a sale by tbo latter, that is, by public notice for four months in the F ^ 70 REALIZATION OF ASSETS. i' rii. Canada Gazette and at the church door. But where is the clause even implied, which authorizes the filing of opposition ajin d'an. nnler, or ajin de distraire ? Can this new sheriff under the Act, re- ceive, for instance, any opposition by a third party, claiming the im- movable advertised to be sold? And even supposing he could receive it in the same manner as the sheriff, how is he to dispose of it ? Is he at the same time to be judge of the questions involv- ed ? It is evidently absurd to suppose that the assignee should have power to decide the rights of third parties to the estate, and especially rights so highly important and so frequently complicated as those relating to our real system. Should he submit these difficulties to the Court ? But this is an impossibility. The pro- ceedings do not emanate therefrom, and there is nothing in the Statute which invests the Court with the power to take cognizance of this extraordinary case. We cannot conceive how the legislator, who generally details with such pomp the slightest minutiaj of all these numerous formalities and intricacies, has failed to say one word on the important and vital point of the real property and its titles.* Nevertheless, we see no other course, if there be any, than to file an opposition with the assignee, whose duty it will be to hear the evidence and decide it in a summary manner, sauf an appeal from his decision according to section 7. • It is to be regretted that Mr. Abbott, in liis notes on the Act, has not supplied this deficiency. VIII. DISTRIBUTION OP MONEYS. § 39. Dividend sheet, &c, — The creditors' claims having been filed, and the assets of the Insolvent having been realized, as far as possible, within two months after the appointment of the assignee, by the collection of the debts and the sale of the movables and immovables of the Insolvent, the creditors, quite naturalij^ are interested in knowing the result of all these operations, and what hopes they may entertain respecting the final liquidation of the Insolvent's estate. It is for this that the Statute obliges the assignee to call a meeting of tlie creditors immediately upon the expiration of the two months (sec. 10, par. 1), for the-public examination of the Insolvent on oath (ibid), and, at the same time, for the order- ing of the affairs of the estate generally, if it be so stated in the notice calling the meeting (sec. 11, par. 3). For the same reason, the assignee, upon the expiration of the two months, or as soon thereafter as possible, and afterwards, from time to time, according to circumstances and the progress of the operations, but never at intervals of more than six months, must keep constantly accessible to the creditors, accounts and statements of his doings and of the position of the estate, and prepare all necessary dividends (sec. 5, par. 1). § 40. What debts are collocated^ — All debts, commercial or non-commercial, actually due or not, which the Insolvent owed at the time of the deed of assignment or of the appointment of an assignee, rank upon the estate. The Act makes no distinc. tion between debts actually due and those not yet matured, except only that the latter are subject to such a rebate of interest as may be reasonable (par. 2 and 6).* We include civil debts, although they are of themselves insuffi- * Interest censes to run from the execution of the deed of assignment or the appointment of an o£Scial assignee. 'f w\m \ 72 DISTRIBUTION OF MONEYS. w liil;!: I m I ■■jl, 1 cient to bring a trader into bankruptcy. When the insolvency is once declared, it is indivisible ; all the debts due by the Insolvent fall under the jurisdiction of the assignee, and are governed by the same general rules. Any surety, indorser or other person liable for any. debt of the Insolvent, and who has subsequently paid the same, stands in the place of the original creditor thus paid, and may himself establish the claim in his own name, if it has not been already proved (ibid.). If any claim depends upon a condition or contingency which does not happen previous to the declaration of the first dividend, a dividend is reserved by the assignee until the condition is determined (par. 3). If this reserve is of a nature to retain the estate open for an undue length of time, the judge may, unless an estimate of the value of such reserve be agreed to between the claimant and the assignee, order the latter to make an award upon the value of such condi- tional claim, subject to appeal as all awards upon disputed claims and dividends. In every such case, the value so agreed to or established, ranks as a debt absolutely payable and unconditionally* (ibid.). • " The contingency or condition may affect the amount of the debt, as in the case of a rente vidgere or annuity ; or the existence of the debt, as in the case of a debt payable only in the event of the creditor surviv- ing the debtor ; or merely the time of payment, as in the case of a debt payable upon the death of another. In such cases, the rule to be applied in estimating the value of the claim would be different, but may be discovered, and a suflBclently accurate result obtained. This pro- vision will most frequently be called into operation by claims made by wives upon their husbands' estates for sums of money settled upon them in lieu of dower, and payable only in case of their surviving their hus- bands. Unless the judgment in the case of the Bank of Montreal vs. Leslie, and Delisle, opposant, be maintained, deciding that such claims cannot rank at all upon the debtor's estate, the value of such claims will have to be ascertained by a comparison of the value of the lives of the husband and wife, according to life assurance tables or other reliable data."— Mr. Abbott, p. 40. According to the maxim of the customary law, jamais mari ne paya douaire, it has been held by our own Courts that the wife can bring no claim for dower or other debts of the same nature during the lifetime of her husband. Nevertheless the wife's rights are not done away with, as WHAT DEBTS RANK. The individual debts of the Insolvent are paid, first out of his individual property, and also out of the property of the partnership of which he is a member, but only after the partnership debts have been paid in full (par. 7). If the claimant holds collateral security, the assignee, under the authority of the creditors, may either allow the creditor to retain such security at the value specified in his claim, or may take an assignment of it from him at an advance of ten per cent, upon the value specified, to be paid by the assignee out of the estate as soon as he has realized such security, which he is bound to do with ordinary diligence ; and in either case the creditor can betjollocated only for the difference between the value at which the security is retained or assumed and the amount of the claim (sec. 5, par. 4 and 5). If, then, the claimant retains the security, the value set upon it by him is deducted from his claim ; and if he gives it up, the creditors become indebted to him for the amount at which it was taken by the assignee. This clause was introduced to prevent frauds and errors, which the creditor, holding the security, might commit by making an unfair estimate of its value. Owing to such authority vested in the assignee, the creditor will be more careful, and find it to be his interest not to set too low a value on the security. they cannot be destroyed by a dicr&t, sheriffs or assignee's sale. As the wife has then no claim whatever upon the property of her husband, she cannot, therefore, make any demand upon the assignee ; and as par. 3 of section 5 relates to parties having claims, the assignee cannot make an award on such rights de survie. Further, this paragraph seems to apply only to contracts dependent upon a condition or contingency which must necessarily occur, as in the case of rente viagere or annuity. It ■will be easily admitted that it would be diEBcult, if not impossible, to make an award on a right dependent on conditions that may or may not happen. Aa to dower, and other matrimonial rights in lieu of dower, the estate cannot otherwise settle them than by special agreement with the wife. A married woman is empowered by section 52, chap. 31 of the Cons. St. for Low. Can., " to release her dower and right to dower in and upon the lands or real estate " of her husband. But this provision does not seem to authorize her to renounce other matrimonial rights not in lieu of dower. As to these latter, they are purged by a sheriflTs or assignee's title ; and if registered, the wife has a right to rank upon the proceeds. . .)■ iV O ?: 74 DISTRIBUTION OF MONEYS. 'm % »»'■' :t Hill The amount due to a creditor upon each separate item of his claim at the time of the assignment or of the appointment of the official assignee, forms a part of the amount for which he ranks upon the estate of the insolvent, until such items, already men- tioned, are paid in full, except in cases of deduction of the value of collateral security, if any exists (sec. 5, par. G). But no claim or part of a claim can be collocated more than once, either in favor of the same or different persons (ibid.). No costs are collocated which have been incurred against the Insolvent after due notice of an assignment or of the issue of a writ of attachment, whether in suits already instituted or in those afterwards taken out. The only costs that a party can rank for are those incurred previous to the notice of assignment or the issue of the writ of attachment (par. 9). On this point the Act has introduced an important equitable modi6cation into the provisions of the common law, which hitherto permitted each creditor to prosecute and crush the Insolvent, by accumulating heavy costs which were always paid with the debt. § 41. Rank and privilege of claims. — In preparing the divi- dend sheet, the assignee must have due regard to the rank and privilege of each creditor, conformably to the laws in force and the special provisions of the Act (sec. 5, par. 4). While on this sub- ject, it may not be uninteresting to give a short sketch of these claims that are privileged by the laws in force, and which are con- firmed or modified by the Act. Privileges exist upon movables and immovables, and may com- prise the whole or part of the same. § 42. Privileged costs. — The costs of compulsory process, those of the judgment of confirmation of the discharge of the Insolvent, or of the discharge if obtained directly from the Court, and the costs of winding up the estate, being first submitted at a meeting of the creditors, and afterwards taxed by the Judge, are alone privileged and collocated in preference to all other claims, upon the entire estate of the Insolvent (sec. 11, par. 16). All other costs follow the rank and privilege of the original debt, except such as are incurred after due notice of assignment or writ of attachment which are not allowed at all (sec. 5, par. 9). PRIVILEGED DEBTS. 76 le as at But do the costs, incurred in suits entered against the Insolvent before notice of an assignment or of the issue of a writ of attach- ment, likewise follow, in all cases, the nature of the principal demand. As the Act has not altered the old law respecting privi- leges and orders of distribution, a distinction should be made. It is admitted, and there are numerous authorities to prove, that the costs of justice are privileged, when incurred for the benefit of the creditors generally. If, therefore, the action was brought in the interest of the creditors, as in the case of saisie arret, the costs are privileged upon the property seized, and should rank as such in the dividend sheet. If such was not the object of the suit, the costs follow the nature of the debt.* § 43. Privilege of clerks. — By the old law, clerks and other servants had a special privilege upon the goods and merchandise in the store or ordinary place of business, for all arrears of salary and even for their salaries during the current year. Under the Act, this preference is limited to the payment of arrears of salary for a period not exceeding three months (sec. 5, par. 10). No allowance is made as indemnity for loss of situation in the future ; and in all those respects the Statute has introduced a new provision; which will be anything but satisfactory to clerks. To avoid loss, they should stipulate that their salaries should be paid regularly, every three months at least, and see that such agreement should be carried into effect. § 44. Privilege of lessor, — By the old law, the privilege of lessor extended to all rents due and to accrue under an authentic lease ; if the lease was not in an authentic form, the privilege included only three of the terms which had elapsed, and the remainder of the current year ; and such is still the law, subject to the following distinction : — If, in consequence of a resolution of the creditors adopted under sec. 6, par. 2, 3 and 4, the lease is cancelled and the premises returned to the lessor, there is no privilege from the time of the cancellation. The lessor's claim, being thereby reduced to a simple claim for damages, is ordinary and not privileged (sec. 6, par. 2, 3 and 4). * See ante §12, note ♦, page 33. \ 78V DISTRIBUTION OF MONEYS, , i^ § 46. Privilege of the vendor, — By Articles 176 and 177 of the Custom of Paris, the vendor ^ho has not been paid the price of his goods delivered, has always a preference upon the pro- ceeds of the sale over all other creditors, except the lessor and pledgor; he is oven preferred to the cicditors bringing the goods to sale. By section 12, paragraph 1, the Statute limits the exercise of this privilege, in case of the insolvency of the pur- chaser, to fifteen days from the delivery of the goods, after which delay the vendor loses his privilege and becomes an ordinary creditor. § 46. Privilege of the allowance to the Insolvent. — Finally, the Act has introduced a new privilege, that of the allowance made to the Insolvent by the creditors in accordance with section 5 par. 8. §47. Various other privileges. — The privileges which have not jn any way been modified by the Act arc - 1. Tithes dues to the Roman Catholu rgymen. 2. The claims of the pledge upon the thing pledged (see § 40). 3. Funeral expenses and those of last illness, including the mourning of the widow, payable out of all the movables of the deceased. 4. Municipal taxes. 5. Assessments, repartitions and school taxes. G. Seigniorial dues. 7. The claims of the Crown against persons accountable for its mo;eys. 8. The claims of the carrier upon the cargo. 9. The claims of s iamen upon the vessel and rigging. 10. The claims of outfitters dernier equipeur upon the vessel. 11. The claims of butchers, bakers, and others for necessaries. 12. Finally, the registered claims and privileges in favor of hailleurs de fouds, money lenders, builders, minors, married women, and others, as provided for by the Registry Laws. § 48. Declarccion a?td contestation of dividends. — As soon as a dividend saeet is prepared, notice thereof (Form N.) is given by advert'dcment ; and after a lapse of six juridical days from the day lly, to sum up the daties of the Insolvent, he must obey all the commands of the law, and exert himself generally to satisfy all his creditors and to merit his discharge at their hands. It is when the unfortunate trader fails, that he should especially keep in view the strictest principles of honesty ; for although cession rCin- fame pas, a failure is not dishonor, as the French adage has it, still in these days of fraud, the public are naturally biassed against Insolvents, whom they indiscriminately style as bankrupts. There are, however, honorable exceptions to this rule; there are Insol- vents in good faith ; and in their case, the settlement of aflfairs is an easy matter ; their discharge is willingly granted ; and if from their old age, or other causes, they are unable to provide for their maintenance, the majority of creditors feel in duty bound to grant an allowance. It is sufficient for an Insolvent to be honest, to save credit, prospacts, and, above all, honor. While on this sub- ject, the reader will, perhaps, permit us to quote a few of the wise and practical recommendations of Savary, that eminent merchant and jurist who, to-day, can be looked upon as in the time of Louis XIV, as a model of commercial integrity : — " Those merchants, he observes, who have been overtaken by misfortune and disgrace, should seek counsel and advice ; they must not be ashamed to 'make their friends acquainted with the state of their affairs, and to consult them how to act ; and above all, they ought not to take asiujjle step exOopt in concert with them. " But it is not enough for a merchant, who knows his affairs to be in a dangerous position, t) tike advice and to consult with his friends as to whit he should d), to rescue himself from the danger in which he finds himself placed ; he should especially make choice of his friends; such choice is most important, for upon it depends all his prosperity or misfortune. In my opinion, a good and hon- eab adviser should possess the following qualities : DUTIES OF THE INSOLVENT. 1 1 . He must have no interest at stake in the concern ; 2. He must be a man of ability and experience in commercial matters. • 3. He must be discreet and cautious ; not too confident nor too timid, nor too hasty in his decisions. 4. He must be an honest man both in the eye of the law and of justice. " These, in my opinion, are the principal qualities which should be possessed by those from whom advice is asked, especially when the honor, the fortune and property of merchants are at stake. If the adviser is not interested in the business, if nothing is due to him, he will frankly say what he thinks ; on the contrary, if he is in- terested or a creditor, his advice will be dictated by, and subser- vient to his own interests. " If the counsel is a man of ability and experience in commercial matters, if many cases alike to the one submitted to him have come under his notice, it is certain that his advice can be relied upon ; if, on the contrary, he is without skill or experience, he is sure to mistake one thing for another; and matters are not likely to terminate well. " The counsel must be prudent and cautious, so as to weigh well every point before giving his opinion ; he should not be rash, for rashness borders on temerity, which very often induces us to un- dertake things so much beyond our reach that, if they turn out well, it is only by chance. He must not moreover be too timid or diflSdent of every thing ; for if he is not firm in his decisions, if he has not sufficient energy and courage, he will create continual apprehensions in the mind of him whom he counsels, which will lead the latter to despondency and unfit him from advantageously carrying out the resolutions he may have formed. " Finally, it is necessary that the adviser should be an honest man, so as to be able to induce the person seeking his advice to adopt such just and reasonable measures as will result in giving to each what belongs to him ; for success cannot afibrd happiness when the end is not just. It may be said, perhaps, that it will be very difficult to find a man possessing these various qualities ; true it is difficult to find such a person, but he whom we consult should PRACTICAL ADVICE. 85 at least be honest and competent; otberwise his advice might lead to great embarrassment. There are numerous instances of mer- chants who, under slight difficulties, were ruined by the bad advice given theiii, and who could have retrieved themselves, had thej only made choice of an honest adviser, experienced in commercial matters. (Far/ait Negociant, vol. 1, jpa^es 302, 303). " The insolvent being prepared to account, should call a meeting of his creditors ; he should attend the meeting iu company with some of his relations or friends. He should not manifest either too much grief or trouble, nor give way to tears, as such conduct would indicate an irresolute and cowardly man, and tend to create prejudice against him ; neither should he appear in glowing spirits, or manifest too much independence, for it would excite the indig- nation of his creditors. His friend should speak for him. It is becoming that the debtor should remain standing. His manner of acting should be polite and courteous. He should be mindful not to take offence at the harshness of his creditors ; some of them are 80 deeply involved that their irascibility can be easily conceived. When interrogated, his answers should not be impolite, as i have seen many whose arrogance prevented them from coming to a friendly settlement. He must not forget that the loss which some of his creditors are obliged to sustain, may ruin their credit and bring them into bankruptcy. " But, may add the Insolvent, why does not this importune credi- tor give me an opportunity of explaining my position ; I am able to pay what I owe ; why thea call me a rogue, a bankrupt, and indulge in other injurious epithets. Suoh reasons ought not to be given ; the creditors have reason to complain ; and their apparent harsh- ness should be overlooked. The Insolvent should place his state- mouts on the table, and not in the hands of any one of his credi- tors, lest, it might be presumed that he w.*' favorable to him, and thus give rise to suspicion. It is to be observed that at such meetings creditors generally mistrust each other ; such mistrust is ften not without foundation, as each endeavours to advance his ov ^ interests. The Insolvent should moreover submit his books •ni other papers, so that the statements produced may be veri- ied. Wf 86 DUTIES OF TBS INSOLVENT. "It is to be borne in mind that, daring the examination of the Insolvent's affairs, each creditor does all in his power to get paid in full ; his embarrassment gives him ingenuity,and he loses no oppor- tunity to obtain an undue preference over the remainder of the creditors. Some hold out threats of a criminal prosecution, accuse him of fraud, and state that it is easy to prove it. Others repre- sent that by their influence they will prevent him from obtaining a settlement. This one, more cunning, flatters and caresses him, laments his misfortuns, endeavors to appear liberal, oSiers him his purse, declares that he shall never abandon him, that he will do everj Aing in his power to assist him in getting his discharge ; that it is unfair that he should give up every thing, that he has com- passion for him and his family ; finally, he leaves nothing unturned to soften the heart of his debtor, to obtain an undue preference from him over his other creditors. If the cloak of friendship is without eft'ect, he resorts to rigor, si lapeau d'agneau in! a rien servi il se sert ensuite de celle du lion ; he indulges in all kinds of threats and aspersions towards the unfortunate insolvent, who wa- vering between hope and fear, is often led to comply with the ex- actions of these ruthless creditors, bo that before he obtains a final settlement, he has already paid a part of his creditors to the pre- judice of the others, who otherwise, instead of a half, would have lost but a fourth, had they been all treated alike. ** Such partiality is neither just nor equitable, because in case of bankruptcy a debtor should treat all his creditors alike, without any distinction whatever, not even in favor of his nearest friends. An Insolvent should therefore disregard both threats and promises. " There is no creditor, however attached to his own interests, who will not yield to such reasons. However fair, nevertheless, 'they may be, there are creditors who will not accept them in payment, and who, having failed in their attempt to obtain an undue por- tion of the estate, offer a settlement and discharge, by the Insolvent signing a promissory note payable to the order of one of their friends.* This last effort is often successful. The Insolvent • Is a note given bj an Insolvent to a creditor, under the circum- stances alluded to by Savary, that, is to say, in view of a deed of com- position or discbarge, as an exceptional advantage for this creditor, and NOTE IN VIEW OP COMPOSITION. 87 um- lom- and should guard against it, because it will inevitably lead him into a second state of insolvency. There are numerous instances of mer- ohaiits who were not able to meet at the same timd the instalments 6f the composition and the notes so given, and who were conse- quently brought to a setiond bankruptcy. Such prop(»als should, therefore, be strbri^y resisted. • * • ■- . >^i -li*^ «S« h? «■«« ^ev^ - " After all, what had ati honest Insolvent to apprehend from the threats of his erieditoir, if he renders a true account? " It may be urged, he ii^ a man of influence ) if he is paid in full, he will protect me against the remaining of my creditors and obtain my discharge; if, on the contrary, he is not fully settled with, he will oppose the composition, prompting the creditors to take without the knowledge of the other creditors, legal and valid ? This qaestioQ has been decided in the affirmative by the Gonrtof Appeals in thecase of Qreenshields v. Plamondon, 8 Jurist, p. 192, Lafontaine, C.J., Aylwin, Daval and G. Mondelet, J.J., reversing the decision of Mr. Justice Badglejr in the Superior Court, 3 Jurist, p. 240. The circum- stances of this case seem to have been considered as special, the note having been given for a debt due by a third person, guaranteed by the Insolvent, and signed on the express agreement that the composition was not to apply to it, and the creditors having been parties to the com- position only for the debt directly due to them by the Insolvent. Wherefore members of the Bar are inclined to think that the holding of the Court of Appeals was not a denial of the general principle that note given iu view of a composition or discharge is illegal, as being an undue preference over his other creditors and against public order. Nevertheless, the considSrants of the judgment lead to a different under- standing : " The Court, * * * considering that the promissory note signed by the respondent in favor of the appellant, on the eleventh day of December, 1854, and for the recovery of the sum specified wherein this action is brought, was so made and signed, in virtue of an agreement entered into between the appellants and respondent, at the special instance and request of the respondent, and for his benefit and advantage, to facilitate a final settlement then proposed between the respondent and his creditors ; considering that such an agreement was not prejudicial to the interests of the Said creditors, and that the said creditors have not complained thereof; considering, finally, that the respondent, since the final settlement between him and his creditors, has acknowledged the amount of the said note to be still due and owing' "to the appellant, and promised to pay the same ; and that by reason of ffff \ bft PRlViLEOES OF THB INSOLVENT. m criminal proceedings against me, and ultliough I am an honest man, through his influence I may be couipulled to stand my trial on the most frivolous appearance of fraud, and for nothing at all. It is true that a threat of th:it kind coming from such a per- son, may shake his resolution, and it is difficult to guard against it Nevertheless he is in duty bound not to succumb, and should boar in mind that his creditors are to be treated alike, and that a man is not likely to be prosecuted criminally for nothing. He should finally recollect that the creditor, fur from putting his threats into execution, will esteem him the more for his honesty, courage and integrity." — Far/ait Nigociant, pp. 339-342. . § 50. Privileges and rights of the Insolvent — Under other heads, we have alluded to certain rights enjoyed by the debtor daring his insolvency ; we had occasion, in § 12, to point out the effects of an assignment or of the nomination of an official assignee, both as regards the Insolvent and his property ; we have seen that he can trade or carry on business, but c innot interfere with the the facts abitve raeatioaed, fully ejtublijhed by the evidence adduced in this cause, the agreement so entered into between the appellant and respondent was valid and binding up. in the respondent, who is nnw justly indebted to the appellant in the aniount specified in the said note, doth reverse, Jcc, &c." It cannot be denied that numerous English and French authorities can be quoted against this decision Important grounds may be urged also in support of a contrary view of the case, which were ably explained by his Honor Mr. Justice Badgley in the Court below, the learned Judge considering agreements of that description as contrary to public order and the interests of commerce generally. These reasons of justice and honesty induced Mr. Justice Loranger in a more recent case of a like nature to call the attention of the Legislature upon this question. '* Those agreements," observed his Honor, " should be declared null by statute, but in the absence of special legislation on the matter, the Court must be governed by the decision of the Court of Appeals." Perrault vs. Laurin, 1863, 8 Jurist, p. 196. It is to be regretted that the Insolvent Ai-t of 1864, like the Imperial Act of 1861, has not supplied this deficiency in our Statutory Law. Such agreements, it is true, are declared to be an evil practice, affording a good ground for the annulling of a deed of composition or discharge, sect. 9, par. 6, 13 ; but as to their validity the Act is silent. We are therefore still to be guided by the ruling of the Goart of Appeals. ALLOWANCE— COMPOSITION. 89 a ire of ial kh a ge, ire estate ; we have also observed thnt he can exercise all actions re- lating to his person, and retain such property as is declared exempt from seizure by our statutory hw. 6ut these are not the only rights which he enjoys ; the Act confers upon him various other privileges, which we shall here briefly notice. The majority in number of the non-privileged creditors for one hundred dollars and upwiirds, representing at least three-fourths in Value of the liabilities to ba afFectiid by a discharge, have the power to grant three privileges equally important and just: Ist, the allowance ; 2nd, the composition and discharge ; 3rd, the simple discharge (sect. 5, par. 8; sect. !», par. 1). § 51. Allowance to the Liaolocnt. — The creditors, or such major- ity of them, as we have just mentioned, have the power by section 5, par. 8, to allow the Insolvent any sum of money or any pro- perty they may think proper. The i-llowance so made is inserted in the dividend sheet, and is subject to contestation, like any other item of collocation therein, but only on the ground of Iraud or deceit in procuring it, or the absence of consent by the requisite majority of the creditors. § 52. Composition with the Insolucnt. -A deed of composition and discharge may also be granted by the same majority of credi- tors upon such terms as they may deem proper, and operates, as to all such creditors, whether parties to it or not, as un ordinary discharge, which we shall refer to hereafter. It may be validly made either before, pending, or after proceedings upon an assign- ment, or for compulsory liquidation ; but it has not the effect of suspending them; for, until the deed of composition has b^en rati- fied or finally agreed to, the assignee should continue to act (see. 9, par. 1).* , • " A deed of composition and discharge will not operate effectually the discbarge of the debtor; or perhaps it would be more correct to say, will not be susceptible of being effectually used as establishing a dia- churge until after the expiration of the period of two months from the public notice of the appointmi'nt of an assignee. " This construction does not by any means deprive the clause under cons'.^.eration of a character of great importance to the debtor. The i>focuring the consent of creditors to a deed of composition and dis- >li \i^^ 11' 90 ..1 lTi>.il':C..'- .•» . a:,^:A zt-\.A\. COMPOSITION— SiSCQABQE. There is no special form required for the deed of composition. The Insolvent deposits the deed of composition with the assignee ; and public notice of such deposit is by him given by advertisement, in all cases after the expiration of two months from the first insei- tion of the advertisement giving notice of the appointment of an assignee (par. 2). If no opposition in writing is made within six juridical days after the last publication of such notice, the composition i^ con- sidered as finally agreed to, and the assignee should act upon such deed according to its terms; but if such opposition be so filed with him, and is not withdrawn, the assignee must abstain from taking any action upon the deed, until the same has been confirmed, as hereafter provided (ibid).* .,) ebarge, is generally a work of time; and tliis clause permits that work to be proceeded with while proceedings in insolrencj are maturing, and eren before tbejr hare commenced. So that when the time arrives at which under p. 2, the assignee may give notice of the deposit of the deed, the Insolvent may have already procured its execution in readiness for loch deposit. And there seems to be no reason why the application for conGrraation should not also be proceeding, provided the debtor is con- fident that he has succeeded in obtaining the assent to it of the requisite proportion of his creditors."-— Af**. Mbott, p. 62. r, There is nothing in the Act to prevent the creditors from accepting a composition under the common law ; but then it is binding only upon the parties to the deed. * '* If by the deed it is agreed that the debtor shall have immediate possession of his estate, the assignee should deliver it to him. And so with any other provision contained in the deed, which falls within the province of the assignee to carry out. It will therefore be necessary in preparing such a deed to make provision respecting everything required to be done. Such, for instance, as the payment of such charges as the assignee may lawfully make, or may be bound to make good ; the assumption by the debtor of pending suits; the transfer to him of Amounts due the assignee for sales made, and every other matter or thing, the ommission to provide for which could cause embarrassment, in obtaining back the estate. *' If it should afterwards happen that the discharge contained in a deed of composition is annulled by the Court, a question may arise as to the position cf the estate in that event, supposing it to have been re- PRIVILK0B8 OF THE INSOLVSNT. 91 3. — Diftchirge of the Insolvent. — After an assignment, or a writ of attachment^ the 8ame majority of the creditors may con- seat to the discharge of the Insolvent without composition. This consent absolutely frees him from all liabilities existing at the time of the making of the assignment or the issuing of the writ, and disclosed either by him or by the creditors. A discharge does not operate any change in the Uubility of any party secondarily or jointly and severally liable with the Insolvent, either as indorser, guarantor, surety or otherwise, nor does it affect any mortgage, hypotMque, lien, or collateral security held by any creditor as security for any debt thereby discharged (par. 4). A discharge does not apply, without the express consent of the creditor, to any debt for enforcing the payment of which con- trainte par corps, is permitted by the Act, nor to any damage or personal wrongs, or penal condemnation or conviction, nor to any debt due by the Insolvent as assignee, tutor, curator, trustee, exe- cutor or public officer, although the creditor of such lebts may be collocated in the dividend sheets (par. 5).* , / a to re- tarned to the debtor by the assignee. There is no express proTision on this point in the Act, but p' ibubly tiie assignee would be entitled to revcndicate the property l< (\ag to the estate ; or in cases of com- pulsory liquidation, to obtai e issue of an alias or further writ of attachment in the origiual en ^ by a petition founded upon affidavit. The case is not likely to occur, as any creditor having objections to make, would file them in the manner provi. Cairns et al., Robertson^ Dig., p. 3S, that a discharge given by the requi- site majority of the creditors was not binding upon those of the remain- ing creditors who had hypothecary claims, and that such creditors had still their personal action against the bankrupt. Under our present law, the contrary would probably be held, for, by sec. 9, par. 1, the discharge is binding upon all creditors, whether present to the deed or not ; and by par. 3, the discharge frees the insolvent from all liabilities, except •ucb as are specially excepted in par. 5. This last paragraph does not ,%. ^Tv. IMAGE EVALUATION TEST TARGET (MT-S) 4io 1.0 I.I ^1" |S6 m m 2.0 m 1:25 lU .6 6" 5 ■<^r >'^' V <% ^>. Photographic Sciences Corporation #* #> \ ,V \ :\ -«lx 33 WEST MAIN STREET WEBSTER, N.Y. 14580 (716) 872-4503 92 CONFIRMATION OF DISCHARGE. 1:' i I 4> \iH H, hti^' I - § 54. — Confirm'ition of discharge. — In no case is a confir- mation requisite, and the Inwivent may avail himself of ihe privi- l^s contained in a deed of composition or a simple dischnrg;e, without even causing the same to he confirmed. A composition has full effect, unless opposition be made to the assignee, as already stated. It is only in case of opposition, or of a demand by a creditor for more than two hundred dollars, to have the dis- charge set aside (see § 55), that the ratification is required ; so far, the only difference is that the discharge is not of itself evidence, nor is it final, while the ratification renders it final and conclusive (par. 8 and 9). The composition or consent to discharge cannot be ratified until two months after the first insertion of the advertisement giving notice of the appointment of ;m assignee, and also afber notice by advertisement of the depositing of the deed of composition (sec. 7, par. 2 and 3) ; for a composition or discharge operates upon liabilities for a full discoveify of which the two months' delay is requisite by the Statute. The confirmation is obtained by the petition of the Insolvent addressed to the Superior Court, after depositing with the Protho- notary the consent or deed of composition and notice according to Form 0. Such notice should mention the said deposit and the day on which the petition will be presented. The notice must be given by advertisement for two months in the Canada Gazette, and in one French and in one English newspaper published at or nearest the place of business of the Insolvent (par. 6.) * except hjcpotbecary or privileged creditors, but simply provides that they shall not be computed in ascertaining the majority of creditors, as regards the value of the security held by tbera, but only for the amount not covered by such security (sec. 6, par. 4 and 6). Par. 4 does not apply to the debt, but merely to the collateral security, mortgage, hypO' thique and other lien whatevci* held by the creditor, and moreover, declares such debt to be thereby discharged ; and consequently hypothe- cary or privileged claims in se are extinguished by the discharge as re- >_■■: •.\yj-r : u'i' /'"r^ • ^ - A ' Ml,- ■ ' ' - r i r , i • r.:-- '--->--, li .■■■ ' ■' ' < ' ' ■; ■'■■■ ■<■•; ., ' .- ■ ••'•' ■ .*' •-' .•'■■■, ^ . -T' ■ . - . . 1 , ^ J ...''-.- J ' i:,.' / ■ ' ,.,..(, ?il«- fmt' ,'■>,•. }'■:■■■ >'':■>.:: ' •" " ■ ■■ '•■ ■ ■ '- ■'>•• i *;■ .i^a;: u. n. n\\ ■" lA .. ; - • i'v t- i. X. '■'«? ■ >-:\ V. V 'I'/u -i L';«.' ; -'•.■'■'' 1 ^■;;*- "*.- tr*' -■• APPEALS. ■ 1 ; It; •-■pw^ ;i ;h t-i>:^:i.. V or-:'. § 58. Appeal to the Judge. — Any party aggrieved by the award of the assignee, may appeal to the Judge by summary peti- tion and one clear juridical day's notice thereof served upon the assignee and the opposite party within three days from the date of the connuunication of such award to the contesting parties ; (sec. 5, par. 13, and sec. 7, par. 1) ; and after the examination of the evidence, books, or proved extracts from books, and of all other documents having reference to the matter in dispute, produced by the assignee upon presentation of the petition,* and after hearing the parties, the Judge confirms the award, or modifies it, or refers it back to the assignee ordering the taking of further evidence, by such order as will satisfy the ends of justice (sec. 7, par. 1;. § 59. Appeal to the Court of Review. — An appeal lies to the Court of Review from any such order of the Judge by the appel- lant making within eight days thereof in the Prothonotary's office a deposit of $20 in cases under $400, and of $40 if the case exceed $400 ; an(i by filing also an inscription and notice of revision, in accordance with the provisions of the 27th and 28th Vict. chap. 39, sect. 20-29 (sec. 7, par. 7). § 60. Appeal to the Court of Queen^s Bench. — An appeol also lies from such order of a Judge, rendered upon petition to reverse the award of an assignee, or from such judgment of the Court of Review, to the Court of Queen's Bench, provided that. • The 8th Rule of Practice provides as follows : — " And in the eveut of an appeal, the Asrignee shall make and certify a transcript from bis Register, of the proceedings before him in the matter appealed from. And he shall also make and certify a list of the documents composing such proceedings and appertaining thereto, and shall annex sucb tran- script and list to such documents with a strong paper or parchment cover, before producing the record before the Judge, as required by the said Act." 98 APPEALS. w within five days from the date of the order or judgment, the Appellant obtains the allowance of such appeal from the Judge on one clear day's previous notice to the opposite party ; 2ndly, that within five days after such allowance, he gives before the Judge two sufficient securities that he will duly prosecute such appeal, and pay all costs incurred by reason thereof by the respondent ; 3rdly, that within the same delay, he causes to be served upon the opposite party and upon the assignee, a petition in appeal setting foirth the petition to the Judge, and his decision thereon, or the judgmetit of the Court of Review, as the case may be, and praying for its revision, with a notice of the day on which such petition is to tte presented (sec. 7, par. 2 and 3) ; 4thly, that the petition in ap- peal is presented on one of the first four days of the term next fol- lowing the putting in of security and not afterwards (par. 4). On or before the day of the presentation of the petition, the assignee files in the office of the Court of Appeal, the papers aiid documents which hav6 been previously produced before the Judge, or the Court of Review, and thereupon the appeal is proceeded .with and decided according to the ordinary practice of the Court of Queen's Bench (par. 45),* * Section 7, par. 1, declares that "there shall be an appeal to the Judge from the award of an assignee made under this Act, and there- upon the Judge may confirm such award, or modifj it." Par. 2 aidds that "if any of the parties to such appeal „.e dissatisfied with' Weh order of the Judge, they may appeal from his judgment in Lower Oanada to the Oourt of Queen's Bench ;" and it is provided by pUr. 7 that "any order of a judge made under any of the foregoing sub-sec- tions," that is, erery judgment upon an award by an assignee, " shall be subject to the Court of Review." In these sections, nor in any other part of the Act, is thiere any provision made fOr ah appeal to the Goiiri of Queen's Bench or the Court of Review from a judgment or order pro- nounced by a Judge, except when adjudicating upon the award of the assignee. Therefore, there is no appeal linder the Insolvent Act from a judgment upon a petition to quash a demand of assignment, a writ of attachment, or a petition to stay proceedings. Is there an appeal in such cases under our common Statutory Law ? Section 23 of the Con. St., for Lower Canada, chap. 77, reads as follows : . " An appeal shall lie to the Court of Queen's Bench as a Court of Appeal and Error, from any judgment rendered by the Superior Court !■■'; w APPEALS. 99 the jaw? lows : irt of Jburt Such are the different appeals allowed to the parties disputing before the assignee. On this subject we have only one remark to mak^ relating to the delays. for Lower Oanada." Oonseqaently, there is no appeal except from judg- ments of the Superior Gourt. la order, therefore, to be able to appeal, .the Judge's order pronounced in the first instance, as on a petition jto ,qaa8h, must be held to be either a judgment of the Superior Court or ;^ tantamount thereto. Proceedings in compulsory process,, it is true, ;,issue from and are returnable to the Superior Gourt, sect. 3, par. 6 ; sect. 12, par. 4 : but after the return, the jurisdiction of the Gourt seems to be at an end, and a new and special jurisdiction, that of the Judge, to be substituted. It is to the Judge and not to the Court, that the Statute provides that petitions to quash or suspend are to be presented, sect. 3, par. S, 4, 12, 16 ; and it is also before him that proceedings subsequent to the return shall be had, sect. 3, par. 13, 14, 20. From this stage, tl^ese various clauses seem to give jurisdiction to the Judge and not to the Court, while sect. 3, par. 6 and sect. 9, par. 6, 7, 10, 12, provide that the proceedings therein pointed out, shall be had exclusively before the Court and not before the Judge ; and consequently, a judgment of a Judge in the former cases pronounced in open Superior Gourt and not in bankruptcy, or drawn up like ordinary judgments of the Court, by saying "The Court having heard, &c." instead of "The Judge having, &c." would be null and void. Likewise, at commua law, a Judge's order is not a judgment of the Court, unless in banco,&ad that the matter is before the court, and upon this ground the Court of Queen's Bench has already sent the litiganls back to the Court beluw, each party paying his own costs, on appeals from judgments pronounced out of term, at Aylmer, holding plainly that there was no judgment of the Gourt, but a simple order of a Judge, from which there is no appeal. Therefore, such orders of a Judge in bankruptcy as above referred to, are not judgments of the Court; and neither the Insolvent Act, nor the common law has provided for an appeal therefrom. This defect, the consequences of which cannot fail to be detrimental, has been felt by the Legislature ; and a remedy is suggested by the Amendment Act now before the House, sect. 8, which reads as follows : " The right of appeal granted by sub-section two of section seven of the said Act is hereby extended, and shall apply to any order of Judge made upon any of the matters or things upon which he is authorized to adjudicate by the said Act." Since writing the foregoing, the question has been raised on the 23rd May, 1865, in the case of Johnston v. Kelly, and is still en dllibtrf before the Gourt of Review, at Montreal. ^ 100 APPEALS. Every possible delny is given to the Insolvent desiring to make an assignment; he is permitted to fix the date of the first meeti >g at two months or at one month. Every notice by advertisement, even the most insignificant, must be pub- lished for at le8<^t two weeks; two months are allowed to file claims, and when at last the decisive moment has arrived, that which must finally determine the claims of all the parties, when the question is to obtain the revision of rights frequently complicated and of great consequence, the legislator allows but three days to deliberate and to proceed at the same time. And then, moreover, why are eight days given in case of an appeal to the Court of Review, and only five in an Appeal to the Court of Queen's Bench ? Doubtless, it is because this last appeal is com- paratively more important, both as regards costs and the prelimi- nary formalities to be observed. * ■'*■' rti,.J.,;. , /■■ ■■u;. \i I i 1 ; M 1,1 ' - ' • ■ L It : ,-vi. ;./, • .) ■( I- I ^ .-^ XL PROCEDURE GENERALLY. In the course of the foregoing chapters, the reader must have observed the number of notices, petitions and other proceedings of various kinds which may be adopted in bankruptcy both in volun- tary assignment and in compulsory liquidation. We h ive already pointed out, in almost every instanco, the numerous formalities relating thereto, even such as are required by section 11, the gene- ral provisions of which we shall now briefly notice, having already mentioned tliose which are of special interest. Unless the contrary is specially prescribed by the Act : «; § 61. Notices of meetings of creditors. — All notices of meetings of creditors, and all public notices generally required to be given by advertisement, must be published for two weeks in the Canada Gazette, and in one English and one French newspaper,* issued at, or nearest to the place where the proceedings are carried on ; and in every case, they must also be addressed at the time of the first advertisement thereof, postage paid, to all the creditors and to all representatives of foreign creditors, within the Province (sec. 11). No special rule regulates any of the notices which may be given to the creditors in the course of the proceedings, and of which the Statute does not require advertisement. As regards such notices, they may be given within a reasonable time, by post, or at domicile, taking care to mention the object thereof (sec. 4, par. 3 \ sec. 11, par. 1). § 62. Majority in number and in value. — All questions discussed at any meeting are decided by the majority in number and in value of the creditors for one hundred dollars and upwards ; but if the majority in number do not agree with the majority in value, the meeting may be adjourned for a period of not less than fifteen days, of which adjournment notice by advertisement is to be given ; * Under the Ar^iendment Act before the House, s. 11, the publication of notices may be restricted to one language. ^»J' t'- "}•, i^¥ 102 \ PBOOEDURE OENERALLT. and if the adjourned meeting has the same result, the views of each section of the creditors are, in the form of resolutions, referred to the Judge who decides between them (sec. 11, par. 2). The difference between the value, at which collateral securities are assumed by the assignee or retained by the creditor, and the amount of his claim, or the value of a conditional claim, as settled or agreed to, is the amount for which he is entitled to vote at any meeting (sect. 5, par. 3, 4 and 5). § 63. Affidavits. — Any affidavit may be made by the party interested, or by his agent having a personal knowledge of the matters therein stated (sect. 11, par. 8), and sworn to before a Justice of the Peace or a Commissioner (sect. 11, par. 5 12).* § 64. Notice o/petition, &c., same opinion ; and he holda tlint a payment by a debtor to a creditor within the prohibited delay is good and valid, and cannot be set aside by another creditor, provided at the time of such pay- ment the trader was still carrying on business, and that the insol- vency was not publicly known. He quotes several authorities in support of his opinion, and amongst others an arret of the 9th of June, 1578. " It is also the opinion of Savary in his Par^res (Pariires 39, page 301, ed. 1749), where he lays down as a settled principle relative to bills of exchange and promissory notes matured and paid in specie, on the very eve of insolvency, that those so paid cannot be compelled to refund to the estate, and that such payments can never be reputed fraudulent." Our le;j:islation is, in this respect, entirely similar to the doctrine of these commentators, and is, we might say, merely the confirmation thereof. In fact, sect. 8, par. 5, reputes as null only those payments made to a creditor in bad faith. So if the trader, who afterwards becomes insolvent, was carrying on business at the time of *the payment, if his insolvency was not notorious, nor even suspected, if, in a word, the creditor was in good faith, the payments made to him on the eve of insolvency are good and valid, and the creditors cannot interfere with them. As to payments made before the thirty days, they cannot be reputed fraudulent on the pretence that the creditor had probable cause to suspect tho bad state of the debtor's affairs. Paragraph 1 has no application here ; it refers only to contracts. § 80. Fui/incnt of debts undue. The contrary is to be said of debts not yet due and paid shortly previous to the date of insol- vency. It is easy to discover in such a case the characteristics of undue preference, because a debt not yet due is not exigible, qui a tcnnc ne doit rien. It is only just, therefore, that such a pay- ment should be reputed as null, and that the party so paid should be accountable to the remainder of the creditors. The Statute has no formal provision on this point, but it is easily inferred from its various clauses, and such is the opinion of both the ancient and modern writers. ONEROUS OONTRAOT0. of sol- of qui »ay- lUld :ute rom and § 81. bond, fide oneroui contracts loifhin the thirty days annul- lable. Finally, from the same principle that every gratuitous appropriation should be returned to the mass of the estate, follow the provisions of paragraph 2, declaring that all onerous contracts, by which the creditors are injured, entered into before the insol- vency was publicly known, but within thirty days from the assign- ment or attachment, although in good fuith, are not null plena jure, but are annullable, on condition that the third party be indemnified by the creditors. * Si h or ous contracts must be considered as gratuitous for the difference in the commodities exchanged. § 82. Mortgage for value received. A question here arises that will not fail to present its>elf in practice. Pledge, mortgage and transfer for previously existing debts are prohibited by the Act as conferring an undue preference ; but are they also null, when given for cash value? We have already seen that trans- actions for adequate consideration, are not reputed fraudulent, even if the third party were aware of the insolvency of the debtor. A mortgage given for an adequate consideration, at the time it was given, cannot confer an undue preference. If the estate is lessened by such mortgage, it is on the other hand increased by an amount not only equal, but sometimes more, by the funds advanced during the debtor's embarassments, and which oftentimes tend to save him from ruin. Renouard, Traiti des FailUtes, vol. 1, p. 366, thus expresses himself: " As regards mortgages granted or contracted within the ten days^ that precede insolvency, the same reasons do not exist. In the first place, we do net understand how the law, sanctioning the alienation of immovables, could consistently invalidate a mortgage, a partial alienation of real property. The characteristic of a gratuitous donation does not exist ; because the consideration given for such mortgage increases the estate. We may also add that, were merchants unable to give a valid mortgage, their real estate would become worthless in their hands. It is the want of funds that compels a party to borrow ; the possibility of bankruptcy would naturally occur to the minds of those to whom • The delays prescribed by the Code are ten days and not thirty. V I. I* . ■ Si'' I 114 MORTGAOES— REQISTRATION. i he would apply. Were money-lenders aware that in case of bank- ruptcy they would lose their recourse, they would not lend, or they would not transact, except on onerous conditions, A loan on immovables, properly and reasonably made, is an act that may prevent a failure, and the legislator has no reason to apprehend evil consequences therefrom. The general principle that contracts are annullable for fraud, offers a sufficient guarantee against abuses that may occur in particular cases." §83. Registration within the ten dayn. — The Act contains no provision relating to the registration of mortgages immediately before a failure. But by the Registry Ordonnanco C. S. L. C, chap. 37, s. 7, such registration nvide within the ten days next before the bankruptcy of the debtor is of no avail. The word bankruptecurity of the creditors and that the firm profits by the transaction ; but it is impossible to hold the copartner responsible and liable to be arrested, contralgna- ble p'lr corps, for the personal fraud committed in violation of sec- tion 8, part 7. The Act provides that he shall expiate personally, by imprisonment, the fraud of his copartner, who fraudulently obtains for the firm merchandise or money on credit, unless he proves himself to have been ignorant of the incurring and of the intention to incur such debt.^ In our opinion this clause is en- tirely arbitrary, to say the least of it. The Statute here presumes fraud, as it does in certain acts indicating insolvency. It pro- vides, nevertheless, -for the rights of third parties in good faith. Upon the simple question of annulling a fraudulent contract, it throws the burden of proof upon the plaintiff and not ♦ The French version has the disjunctive " or" instead of tlie conjunc- tive " and" to be found in the English one. m DISSOLUTION OF 123 upon the defendant ; and when the liberty of the trader is at stake, a simple presumption suflSices : and what presumption ? Merely that resulting from the knowledge of the debt ; as if first of all, the knowledge of the insolvency of the firm by the copartner at the time the debt was contracted, should not be the sign and essential mark of connivance and partnership, the only evidence of the fraud common to all the partners, whether parties to the transaction or not. Every one will admit that then, but then only, all the copartners should be equally punished. But when the fraud is committed by one of the firm without the know- ledge of his copartner, it is impossible to punish them all equally, in default of proof on the part of the innocent one. The partner, party to the fraudulent transation, can only be convicted upon the fullest evidence of its guilt, whilst the absent partner is bound to establish his innocence, his ignorance of the debt and of the inten- tion of his copartner. But how is this proof to be made ? Who can prove a negative? The thing is contrary to all established rules of evidence, absolutely impossible. Suppose even we presume that the debt has been contracted with the knowledge of the co- partner, are we thence to infer that he is an accomplice of the fraud. May he not have been ignorant of the insolvency of the firm — a fact the knowledge of which is essential to the guilt of the contracting partner. Again, this provision of the Act works an evident injustice and is an open violation of the riglits of the citizen. pro- uth. 3t, it not unc- § 90. Bankruptcy of one of the members of a firm operates a dis- solution thereof The paragraph 10 of the 4th section enacts as fol- lows : If a partner in an unincorporated trading Company or co-part- nership, becomes insolvent within the meaning of this Act, and an assignee is appointed to the estate of such insolvent, the assignee shall have all the rights of action and remedies against the other partners in such Company or co-partnership, which any partner could have or exercise by law against his co-partners after the dis- solution of the firm ; and may avail himself of such rights of ac- tion and remedies, as if such co-partnership or Company had ex- pired by efflux of time." 124 PARTNERSHIPS. To dissolve a oommeroial partnership in virtue of this provision, it is necessary that two conditions concur : 1st. That the partner be insolvent ; 2nd, that an assignee should have been named, either in voluntary liquidation or under compulsory process. The consequences of the introduction of this new rule will bo numerous and of great importance for commerce. Every one knows the abuses that resulted from commercial firms formed by insolvent parties. At once they put themselves beyond the reach ci suit and seizure. Proof of the fraud, when met by oppositions, was the only resource of the creditor who aln.ost always failed, if he dared to undertake the contestation and risk the costs of it. The consequence was that such partnerships were together with tlperationt de hiena, separations of property, the great plague of commerce. By the clause of the Act just referred to, in future, the assignee will have a right to demand from the co- partners the portion of the insolvent partner, and even to sue for all that belongs to him, as in case of dissolution of the partnership by the expiration of time. The fraudulent bankrupt will still discover, without doubt, the means of braving and evading the law ; he will arrange matters in such ways that nothing or next to no- thing will be coming to him by the accounts of the firm, and it will remain only to the creditors to contest them upon the ground of fraud. It will be for the courts to act rigorously in these cases, to ensure the execution of the law. It is not just, however, to assimilate, as the clause of the Act does, to this bankrupt in bad faith, the partner who, during the partnership, has contracted personal debts which he is unable to meet. In his case there is not even presumed fraud on the part of the firm ; there is no con' ersion of the estate, nor any change of name ; it is always the same person with the same rights ; and if the merchant finds himself the dupe of the confidence which he has put in the individual solvency of the co-partner, he must blame his imprudence and not the partnership of which he has always been part. It is still more dangerous to give retroactive effect of the law and to strike at once future partnerships and those which have existed for years. If commercial partnerships, in which there may REMARKS. 125 be a member personally insolvent, are bound to dissolve, as may be requ^ed under this Act, well-established houses would be troubled and even overthrown, to the great detriment of commerce in gene- ral In a word it is right, as every one admits, to condemn the bankrupt who fraudulently forms a partnership, but it would be Tery wrong to trouble, without sufficient cause, partnerships formed and conducted with good faith. y ■ -■■V4' ^■:^im 4^ :, ■.■;■• ■ '\a ■ -'•-; . . XIV. ' Married Women. § 91. — Notice of action of separation. — An abundant source of fraud is separation of property, s^jjaroiiow de biens — which an in- solvent in bad faith often demands by and in the name of his wife, with the intention of transferring his movable property to her and continuing business in her name ; and it is to be feared that these demands may become still more numerous in conse- quence of that clause of the Act, which dissolves the partnerships formed by an insolvent to evade his creditors. The last resource, then, will be to trust his lot to his wife and to obtain, at all events, a separation of property. It is to be hoped that our tribunals will lay a heavy hand on these demands almost always taken, not to save matrimonial rights, which have no existence, but with the design concerted and almost avowed of transferring to the wife the goods of the community, and consequently defrauding the credi- tors. Besides, the creditor should interfere in these cases and direct the attention of the Court to the futility and intentions of the action. In order to prevent these separations from being — so to speak — clandestine, the Act, (sec. 12, par. 3,) provides that the institution of every action en separation de biens ou en separation de corps et de biens, shall be advertised in the Canada Gazette and in two newspapers, one French and one English, published in or nearest to the place where the defendant resides. Every such action is to be commenced in the district where the defendant i-esides. Every creditor has the right to intervene in the case, and to examine, without costs, the defendant upon his estate and effects. If he, the creditor, contest the demand, or the judgment, he does so at the risk of paying costs, like any other intervening party. The separation of property demanded as against a non-trader, does not require publication — the Act has changed nothing in the procedure in this latter case. These rules, we have said, apply equally to action en siparation NOTICE OP ACTION OP SEPARATION. 127 de corps et dehiens, separation as to body and property ; and inthis respect, the rigor of the Statute is not required. It would not do to push our zeal for commerce, so far as to prejudice the rights of the wife, and above all, those of a mother of a family. We admit that merchants should have guarantee, that they should be pro- tected from fraud ; but every one will admit that the wife, always worthy of the protection of the law, and particularly of our French law, should also find security and assistance at the hands of the legislature. Why oblige the wife, who, for ill-treatment and other shameful abuses, is obliged to sue her husband for separa- tion, to publish her intention so to dr> ? Is it not sufficiently dis- agreeable, sufficiently painful for her, to be under the necessity of demanding protection from the courts for herself and her chil- dren ? Why should she be forced to give extra publicity to her suit? Here there can be no fraudulent intent in obtaining a separation of property, which by the law is necessarily incidental to the separation of body ; since both take place simultaneously, and cease upon the r'^conciliation of the parties. id to Fects. does ty. ader, n the ation § 92. Registration 0/ marriage contracts. — If in cases of insol- vency there are husbands who seek separation of property, there are others who, by precaution, stipulate separation by niurriage contract ; and at the present day, there are very few traders who neglect to make that stipulation, as they say, for prudential rea- sons and the wise provisions against the misfortune which may arise in the course of their business. It is not then sufficient that the creditor should be notified of the action for separation, as provided by the Act ; he ought also to know who are in the same position by their marriage contract ; and it is singular that the Statute has nut, like the ordinance 0^ 1G73, required the publication of these separations — the secrecy of which is as prejudicial to commerce as that of judicial separations. It is vain to pretend that by the Registry Act, all contracts of marriage should be registered : that registration is required only to preserve to the wife the rank of her matrimonial mortgages; it has no application whatever to the clause of contractual sepa- ration, which receives its full eflPect without publicity and regis- 128 MARRIAGE CONTRACT. tration ; nor has it any application to stipulations or guarantees purely movable. As to the latter, the Act has introduced new provisions by section 12, par, 2, entictii)g as follows: — ** In Lower Canada, every trader whom arries, having previously executed a contract of marriage by which he gives or promises to give or to pay, or cause to be paid to his wife, any property or eflFects, or any sum of money, shall cause such contract of marriage to be enregidtered in the registration division in which he has his pluce of business, within thirty days from the execution thereof,; and every trader already married, having such marriage contract with his wife, shall enregister the same as aforesaid, if it be not there already enregistered, within three months from the passing of this Act ; and every person, not a trader, but hereafter becoming a trader, and having such a contract of marriage with his wife, shall cause such contract to be enregistered as aforesaid (if it be not previously there enregistered), within thirty days from becoming such trader ; and in default of such registration the wife shall not be permitted to availherself of its provisions in any claim upon the estate of such insolvent for any advantage confeiTcd upon or promised to her by its terms ; nor shall she be deprived by reason of its provisions of any advantage or right upon the estate of her husband, to which, in the absence of any such con- tract, she would have been entitled by law." This provision aflFects only marriage contracts of traders, and ap- plies to the following cases : 1st, the contract of marriage of a trader about to marry ; 2nd, that of a trader already married j 3rd, that of all married men who afterwards become traders. In the first case, the registration is to be made within the thirty days from its execution ; in the second, within three months from the passing of the Act, that is to sa)', from the 30th June 1864, if it has not been already registered ; and in the third case, within the thirty days after the party has commenced to trade ; and in every case, the registration is to be made in the registry office of the county in which the trader carries on his business. As we have seen, in cases where real property situated in a county other than that of the business place of the trader, is mortgaged by the contract of marriage, this contract ought to be registered in the registry office of the county where the same MARRIED WOMEN. 129 in a [r, is Ito be Isame Js situated, and at the same time in the office of the county where the trader carries od his trade, if it contains donation of movable property. Registration anterior to the Act in an office other than that of the county in which the trader carries on his business, is not suf- ficient. It ought to be registered also in the office of the latter. If the trader becomes bankrupt, the want of registration of the marriage contract involves, as regards the creditors, the nullity of the stipulation, but not of the contract itself; and in tnat case, the wife can claim all her matrimonial rights and advantages of survivorship, created by the Law, as if there had been no marriage contract.* § 93. Insolvent's wi/e a witness. Finally, it remains under this chapter, only to remark upon the clause 10, par. 4, which reads as follows : " Any other person who is believed to possess information respecting the estate or effects of the insolvent, may also be from time to time examined before the Judge upon oath, etc." The law not even excepting the wife of the Insolvent, the creditor is therefore authorized to produce her to be examined as a witness upon her knowledge of the business-affairs of her husband, of which she is always almost ignorant. Is it not dangerous to allow an exacting and perhaps malicious creditor thus to trouble the domestic hearth, the peace of the family, and the happiness and privacy of husband and wife ? * This provision, it may be remarked, is in direct contradiction with the spirit and letter of the Common Law, which declares absolutely irrevocable, all matrimonial stipulations ; and it introduces a state of things entirely subversive of the time-honored principles of our juris- prudence. It leaves the wife to speculate upon the chances as to whether she would be in a better position by the non-registration of her contract. Her husband becoming insolvent, and her contract remaining unregistered, she is at liberty to fall back upon her matrimonial rights at Common Law, which are privileged, and may thus hold all the assets of the Insolvent, to the prejudice of the mass. Thus, the husband, under the Act, obtains bis discbarge, whilst the wife receives the property; he starts again in business and acquires property; in the meantime the wife registers her contract ; the husband fails a second time, and she claims under her registered contract of marriage ; and of course, according to the Act in question, again defeats the creditors. XV. Conservatory Process. ^ 94. The right to attach morcliandiso sold and not paid for, . given by the articles 176 and 177 of the Custom of Paris is evidently just and frequently resorted to; and it is astonisliing that the English law, always so favorable to commerce, has never admitted this privilege beyond the power of stoppage in (rnmltn. Nothing is more just or more in conformity with the first notions of law than that the seller, who finds in the possession of the buyer his goods not paid for, should bo able to separate them from the mass of the stock of the insolvent. Indeed, no one can bo pro- prietor of a thing until he has paid the price of it. If, then, the goods of the insolvent are the security, guge, of his creditors, because they are his, the goods of others conditionally possessed by him cannot aflford such security. The legitimate proprietor can then claim them, as being either his property or the secuiity for their price, accordingly as they have been sold for cash or on credit; and to this effect, there are two facts to establish, without preliminary aflBdavit, to wit: Istly, His quality of non-paid ven- dor; and 2ndly, the identity of the merchandise reclaimed, in the entire condition in which it was delivered, non dioallees et portant leurs vieilks marques. Just as this principle of privilege and seizure is, bad faith has often made it the means of fraudulent preference as between the creditors. Frequently, in cases of insolvency, the creditors who were relatives or friends of th-.> insolvent, pretended to find in his possession their non-paid nx.rrhandise, bearing their old marks, although sold three or fourth months previously, and consequently revendicated them by conservatory process, saisie conservatoire — which in most cases led to the fraudulent removal of the greater part of the insolvent's estate, beyond the reach of other creditors, who had given credit and advanced their goods, and which goods the debtor represented as unpacked or sold. Hence the numerous suits and contestations which the exercise of this right of the has the who his rks, ntly e — ater lOrs, ods ous the CONSERVATORY PROCESS. 131 vendor has given rise to. Hence the well founded complaints of the non-privileged creditors, who have always borne this as a great injustice and a means of fraud with regard to them. To prevent proceedings so ruinous to commerce in general, the legislator pro- vides in cases of insolvency only, not for the suppression of the right of conservatory process, but for the restriction and limitation of its exorcise to the fifteen days immediately following the delivery of the goods. Sec. 12, par. 1, enacts as follows: " In all cases of sales of merchandise to a trader in Lower Canada subsequently becoming insolvent, the exercise of the rights and privileges conferred upon the unpaid vendor by the one hun- dred and seventy-sixth and one hundred and seventy-seventh articles of the Coutume de Paris, is hereby restricted to a period of fifteen days from the delivery of such merchandise'."* Apart from the case of sales to traders subsequently becoming insolvent, the rights and privileges of the vendor remain intact and are regulated by the provisions of the common law alone. * How is this clause to apply to a purchaser iusolvent at the time he makes the purchase ? It would appear to hare no application wliatever in such case, the Act providing for cased of insolvency arising subsequent to the sale — " in all cases of sales of merchandise to a trader in Lower Canada subsequently becoming insolvent ? " ;^iHf||ii ,f .: • XVI. Books op Account. . § 96. Section 9, par. 6, says that for the future the failure of the insolvent to keep or produce an account book shewivg his receipts and disbursements of cash, and such other books of account as are suitable for his trade, is a valid ground for opposing his discharge. By this clause, every trader is obliged to keep a cash book and all other books ordinary used in his trade. The legislature has not specified the number, nor the manner of keeping them ; it is evident in fact that the contractor and all mechanics in general cannot be subjected to the same rules as the wholesale or ietail merchants. The nature and number of the transactions of these latter render necessary a greater number of books, which arc generally kept by our merchants according to the Italian method, and comprise: — . ' - ji 1. The Waste Book or Blotter, in which are written pSle-mSle all the transactions of the day, including the personal expenses. 2. The Invoice Book, in which ^.re entered on one side the merchandise sent out, and on the other, those received. 3. The Gash Book, in which are entered from day to day the sums received and paid out. 4. The Bill Book, containing the number and description of notes, bills of exchange, obligations, and other like securities, given and received. 6. The Day Book or Journal, which is the base of the Ledger, and is made up from the Blotter in a more concise and methodical form. 6. The Ledger, in which, at intervals, weekly for example, are condensed and entered, d la grosse, in the order of debtor and creditor, the contents of all the books. XVII. tht )n of ler. iple, and Conclusion. § 96. What are we to conclude from the forgoing review of the Insolvent Act of 1864 ? What are we to say of the system it introduces and of the eflfects which it will produce ? Having examined the clauses of this law, submitted to analysis the different operations which it prescribes, and having weighed their nature and tendency, the answer to this question is not difficult. It is easy to perceive, and we have had more than one occasion to prove it in the course of this essay, that the Insolvent Act of 1864 is incomplete and prejudicial to the commerce of the country in general. Firstly, it is prejudicial to commerce, because it opens pew doors to fraud, affords to the bankrupt new means of deception. What is to be expected from a law which, from the first to the thirteenth clause, and from the first to the hundred and thirty-first paragraph, favors almost always the insolvent and not the creditor ? Be it remarked, this assertion is not gTatuitous ; had we no other proof of it than the fact of all the advertisements and notices of failures, which have crowded, since the coming into force of the Statute, the columns of our newspapers, our position would be fully established. But again, when we glance at the provisions of the Act, the mode, voluntary as well as compulsory, of winding up the affairs of the insolvent ; when it is observed that the bankrupt has himself the control of the important delays of the announcement of his failure and the divesting himself of his estate ; that he can still with impunity defeat the law and defraud his creditors, obtain, in spite of the latter, a judicial discharge ; when it is clear that the hope of such discharge will be for the debtor a powerful motive to induce him to diminish his assets, and afterwards to declare himself in a state of bankruptcy, in order to come out of it enriched with the spoils of the mass ; when, we say, we concider all these complications and formalities, which here, as always, serve the debtor and not the creditor ; when we remember, in fine, all these delays and costs of liquidation, without forgetting the expenses of the insolvent in obtaining his discharge and attend- K 134 CONCLUSION. < * ing the meetiDgs of creditors, for the arrangement of his own affairs, it is easy to see, we say again, that the fact, the evidence of which we invoked, is but the rigorous consequence of the law, the inevitable result of the provisions of the Act.* § 97. But it is not only because the Act favors the interests of the insolvent to the detriment of his creditors that it is fatal to the commerce of the country, but because, like every other bank* rupt law, it will injure our credit abroad. Great Britain, which herself makes and maintains her credit, can afford that the fluctua- tions of her great markets should be known to the world ; she can even publish her maritime and other commercial reverses; but Canada, whose trade can scarcely count twenty years of existence, has grown and is still growing by foreign capital and resources* Canada cannot take and affect those airs of mercantile indepen- dence, placard her losses and failures, without exposing funda- mentally the value of her credit. What, for instance, is thought, at the present moment, in England, the United States and else- where, upon reading, every day, all these notices of insolvency, which parade before the commercial world, events for the most part in- significant in our eyes, but which in the mind of a <«tranger would naturally take the proportions of a crisis. It is incontestable that all these reported failures, taken in connection with the real fluctuations of our market, will have the effect of creating in the opinion of the English or American exporter or manufacturer a mistrust of the credit of our merchants, and of injuring thereby the commercial progress of Canada. * Since the coming into force of the law, the defects above pointed out have been seriously felt by the commercial community ; and, aa proof cf this, it is sufficient to remark that but five or six cases of com- pulsory liquidation of minor importance can be found upon the books of the Court, forcibly taken under exceptional circumstances ; and more- over, as to cases of voluntary liquidation, they are, for the most part, those of bankrupts without assets ; but, as to recent failures, where there was in reality an estate to act upon, the creditors have decidedly pre- ferred to arrange with the debtor according to the common law, rather than sacrifice such estate to the complicated and expensive machinery of the Insolvent Act. CONCLUSION. 135 nted I, aa :om- sof ore- art, here pre- ther Inery § 98. This is not all. The Act in question will be, even at home, an obstacle to the development of our commerce, and this objection exists without distinction to every bankrupt law, founded upon the same basis. It will be admitted that the life of com- merce is credit founded on the personal industry and energy of the trader, and not upon the guarantees of real property, which are perfectly foreign to his capacity and ability. Bankrupt laws destroy this credit; and in proof of this assertion, we will take the liberty of making an extract from a remarkable article published in the Revue de Ligislation, page 242, and written expressly for Canada in 1846, when the bankrupt law of 1843 was in operation : " The internal commerce of the country, says the anonymous writer, ought to be sober, prudent and limited ; the bankrupt laws in assuring before hand the discharge from debts, will render it improvident, hazardous, and rash ; first cause of mistrust. The facility of freeing himself from embarrassments and of avoiding his stru^le always uncertain, will on the very first difficulty par- alyse the energy and determination of the trader: for why strug- gle to pay debts, when it is so easy not to have any ? This is a second cause of mistrust. When the labor and talents of the in- solvent were the settled guarantee of his creditors, it was for their interest to make this labor and these talents available : and thence all these aids and encouragements which never failed to the unfor- tunate, and which assisted him to overcome difficulties and to r^ain lost ground. Bankrupt laws have put an end to this state of things, and hence a third source of mistrust. When debts were moral obligations, which could be only dischai^ed by pay- ment or remission, the debtor necessarily felt the importance of not contracting debts which he might not be able to pay. Since, without the consent of the creditor, the law liberates the debtor, his conscience is less sensitive and timid, and he is not afraid of incurring liabilities. This is a fourth cause of mistrust. The cir- cumstances which make a man bankrupt are so numerous and of so frequent occurrence, that through the momentary caprice of the debtor, or of one of his creditors, the most prosperous business may be exposed to the action of a bankrupt court. The best proof that these laws have injured credit is to be found in the faet that, 136 CONCLUSION. ^9m since their introduction, trade between the importer and retailer- has been carried on by means of mortgages and securities, — a state of things but too clearly shown by the books of the Registry Office." : .;....■: ,: , § 99. Since the foregoing lines were written, facts are not lu-i^ want^fl^o confirm their truth. ,The bankrupt law denounced by this writer in terms so apt and concise, after having produced the great crisis of 1842,* brought about the other commercial difficulties of 1848, which caused, often under the most trifling pretexts, failures so numerous and so prejudicial to commerce, that it became necessary to abolish the law in 1849. Immediately after the •j^T'^al, confidence was restored, and ever since, up to a recent periv . , . "s maintaintjd itself, even through serious trials and' difficulties: a id we have seen in 1857, when the tightness of money was universally felt, and public credit suffered considerably in the foreign markets, we have seen, we say, the merchants of Canada and of Montreal in particular, zealous in assisting each other and of thus saving the honor of Canadian credit; and thanks to these generous efforts and perseverance, those even who would not have failed to avail themselves of a bankrupt law, and who regretted the want of one, were finally delivered from an inevi- table ruin. And thus by energy and perseverance, not by the- protection of bankrupt laws, failures became more rare ; the commercial credit of Canada was created, and attained within some years to a state of stability acknowledged by strangers ; but now that this credit, so deservedly established, is again submitted to the action of principles which were the cause of its destruction in 1842 and 1848, it is to be feared that by this system new em- barrassments may arise to obstruct its course, and that the legis- lature may too late find out, after an experience which threatens to be more lamentable than the former, that our young country has no more to gain from bankrupt laws than the commercial • Bankrupt laws were introduced in the country in 1839, and re. pealed in 1843, when a temporary act, based upon the same principles^ was enacted, and continued to 1849. CONCLUSION. 137 em- people of the United States, who ahandoaod them in 1843, after a short and unsuccessful trial of one year ; and we may add, that notwithstanding the pressure brought to bear upon that country by an unprecedented civil war, they have not been adopted.* § 100. Finally, we think we do not stretch the truth in affirming that a large number of merchants, if not the greater number, would be satisfied with few amendments and simple additions to the existing laws, for the sole purpose of defining and pun- ishing fraud and giving to the cession de hiens its proper and necessary eflFects. Let the Legislature, by rigorous enactments, endeavour to banish fraud ; and in order to do so, let it introduce the presumptions of fraud consecrated by the codes of the com- mercial nations of Europe ; let it require from each trader the keeping of regular books of account and authorize the seizure of the same ; let it strike without mercy at siparations de Mens and fraudulent commercial partnerships — the two great plagues of our trade ; — let it force the marchande publique to carry on business under her own name and not under that of her husband ; let it * In confirmation of the foregoing remarks, we may note tlie commer- cial experience of the past six months. A want of confidence amongst merchants and business men has sprung up on every side. Collections of outstanding debts have decreased millions of dollars, when compared with the amount collected during the same period in 1863 and '64, and relatively considering the amount due. Imports have fallen off nearly one half. The banks look with closer scrutiny at the paper offered for discount. Trade is becoming paralyzed through the caution necessary to its safe transaction ; and failures in business are more numerous com- paratively than heretofore. All these unfortunate difficulties seem to have resulted from the want of confidence produced, in a great measure, by the Insolvent Act of 1864. It is true that the failure of crops, owing to late frosts and droughts of 1863 and '64 in Upper Canada and the north-western United States, has assisted in producing the general business difficulties of the times, by causing a large falling off in the usual trade ; yet such a contingency might readily have been bridged over until the coming crops could be brought into market : had that business confidence, which has heretofore existed in Canada, not been impaired by the action of the law which we have reviewed. \ 138 CONCLUSION. limit the right of conservatory process of the non-paid vendor ,'. above all, let every fraud be considered a crime and punished as such, at least to the full extent of modern legislation — all so many rules perfectly distinct and independent of all systems of bankrupt- cy ; and it will be seen that to arrive at the most equitable and easy arrangement of the affairs of the insolvent, it will remain only to define the rules of making a cession de biens, voluntary or forced,^ and the effects thereof, by the creation of the office of assignee and in giving to a certain number of the creditors, say the majority iu number and in value, the power to control the minority and to grant, amongst other things, the discharge to the insolvent. § 101. Here our review closes. Commenced and written in a hurry for a newspaper, where the first articles appeared, we deemed it right to discontinue that form of publication, in order to give it a wider bearing and to touch upon several important questions, too discursive perhaps for a newspaper communication. We pre- tend, however, to offer to the public only an analysis, simply a criticism of the Act; and we will feel richly rewarded if our essay prove useful. We have, by permission, dedicated this Review to the author of the law which we have taken the liberty to criticise ; and we have done so with high respect for the laborious legislator, the dis- tinguished advocate, and the learned professor who taught us, iu the University, the first principles of Commercial Law, and to whom we have often referred since, as our master in the science of Law. dMr^ GIROUARD. Montreal, 1st June, 1865. A APPENDIX, CAP. XVII. An Act respecting Insolvency. ■ ' [Assented the 30th June, lB6i.] WHEREAS it is expedient that provision be made for the Preamble, settlement of the estates of insolvent debtors, for giving eflfect to arrangements between them and their creditors, and for the punishment of fraud : Therefore, Her Majesty, bj and with ; the advice and consent of the Legislative Council and Assembly of Canada, enacts as follows : 1. This Act shall apply in Lower Canada to traders only, AP^'c^t^on o^ and in Upper Canada to all persons whether traders or non- traders. . OF VOLUNTARY AS8IGNMBNTS. 2. Any person unable to meet his engagements, and desirous of making an assignment of his estate, or who is required so to do as hereinafter provided, may call a meeting of his creditor at his usual place of business, or at his option at any other place which may be more convenient for them ; and suoh meeting shall be called by advertisement (Form A), stating in such advertise- ment the object of such meeting ; and at such meeting he shall exhibit statements showing the position of his affairs, and par- ticularly a schedule (Form B), containing the names and resi- dences of all his creditors, and the amount due to each, distin- guishing between those amounts which are actually overdue, or for which he is directly liable, and those for which he is only liable indirectly as endorser, surety or otherwise, and which have not become due at the date of such meeting ; and also the particulars of any negotiable paper bearing his name, the holders of which are unknown to him, — which schedule shall be sworn to by the Insolvent, and may \^ corrected by him likewise under Proceedings for voluntary EBsignment of an insolvent estate; meet- ing of creditors to be called. Schedules of creditors, &c. Attestation. n: < 140 oath at the meeting at which it is so produced, also the amount due to each creditor, and a statement showing the amount and nature of all his assets ; and he shall also produce his books of Assets, books, account, and all other documents and vouchers, if required so to ' do by any creditor : Notice by post. 2. Each notice of such meeting sent by post, as hereinafter provided, shall be accompanied by a list containing the names of all the creditors of the insolvent whose claims exceed one hundred dollars, and the aggregate amount of those under one hundred dollars : '. ■ [ ,- ' polnfed by cred- ^" -^^ such meeting, the creditors may name an assignee, to Iters. whom such assignment may be made ; and if a vote be taken UoK^ *** ''"^' "P°° ^"'^^ nomination, each creditor shall only represent in such vote the amount of direct liabilities of the insolvent to him, and the amount of indirect liabilities then actually' overdue ; and Assignmont. thereafter the insolvent shall make an assignment of his estate and effects to the assignee so chosen : be aDDof*te^"b'' ^' ^^ "° assignee be named at such meeting, or at any adjourn- creditors, insof- ment thereof, or if the assignee named refuses to act, or if no one. ""'^ **'^*'* creditor attends at such meeting, the insolvent may assign his t estate to any solvent creditor ' ;sident within this province, not related, allied, or of kin to h.oi, and being such creditor for a sum exceeding five hundred dollars, or if he has no such credi- , tor for so large a sum who will accept such assignment, then to the creditor otherwise competent and willing to accept, repre- Or Msign to an senting the largest claim upon him; or he may make such official assignee. . , „ . , . ., .,..,.. assignment to any official assignee resident within the district or county within which the insolvent has his place of business and nominated for the purpose of this Act by the Board of Trade in such District or County, or if there be no Board of Trade therein, then by the nearest Board of Trade thereto ; In case of dis- 5. If any dispute arises at the first meeting of creditors as to meedngof cred- ^^® amount which any one of the creditors is entitled to repre- itors, as to votes, sent in the nomination of an assignee, or upon any other ques- tion which may properly be discussed at such meeting, such dispute shall be decided by the votes of the majority in number of the creditors present, or represented by agents or proxies ; but if the dispute have reference to any pretension of any credi- tor as to the existence or amount of his claim, such creditor shall not vote upon the question ; out no neglect or irregularity to II la any of the proceedicgs antecedent to the appointment of the irregularity not assignee shall vitiate an assignment subsequently made to an pointment *^ assignee competent to receive it under this Act ; 6. The deed or instrument of assignment may be in the form Form of deed C, or in any other form equivalent thereto, and if executed in ^q *''*8*"'^®'* • Upper Canada shall be in duplicate ; and a copy of the list of creditors produced at the first meeting of creditors shall be appended to it ; and no {tarticular description or detail of the property or effects assigned need be inserted in such deed : and ,^ ^ , . L i. . /. ujj .ji-.i.. Counterparts of any number of counterparts of such deed required by the assig-decd. nee shall be executed by the insolvent at the request of the assignee, either at ttie time of the execution of such deed or in- strument, or afterwards, to which counterparts no list of credi- tors need be appended ; *' ' *' ', ,. f. The assignment shall be held to convey and vest in the Effect of assign- assignee, the books of account of the insolvent, all vouchers, SteofinsoWe^nt accounts, letters and other papers and documents relating to his business, all moneys and negotiable paper, stocks, bonds, and other securities, as well as all the real estate of the insolvent, and all his interest therein, whether in fee or otherwise, and also all his personal estate, and moveable and immoveable property, debts, assets and effects, which he has or may become entitled to at any time before his discharge is effected under this Act, excepting only such as are exempt from seizure and sale under Exception, execution, by virtue of the several statutes in such case made and provided ; 8. Forthwith upon the execution of the deed of assignment^ Duplicate or au- the assignee, if appointed in Upper Canada, shall deposit one of ^ht^utic copy of the duplicates thereof, and if in Lower Canada, an authentic be depo.4ited, copy thereof, in the oflSce of the proper Court ; and in either *"** wliert case the said list of creditors shall accompany the deed or instru- ment so deposited ; 9. If the insolvent possesses real estate, the deed of assign- ment may be enregistered in the Registry Office fur the Regis- tration Division or County within which such real estate is situate ; and no subsequent registration of any deed or instru- ment of any kind executed by the insolvent, or which otherwise would have affected his real estate, shall have any force or effect thereon ; and if the real estate be in Upper Canada and the deed of assignment be executed in Lower Canada before Notaries, a Registration of deed of assign- ment, if tlie In- solvent has real estate. Assignment ex- ecuted in L. C. or U. C, how registered in the other section of the Trovince. I! Deed executed in U. C. form to have force in L. C, and vice versb. If notarial. 142 copy of the deed certified under the hand and official seal of the Notary or other public officer in whose custody the original re- mains, may be registered without otlier evidence of the execution thereof, and without any memorial; and a certificate of such registration may be endorsed upon a lilce copy ; and if the pro- perty be in Lower Canada and the deed of assignment be exe- cuted in Upper Canada, it may bo enregistered by memorial or at full length in the usual manner ; but it shall not be necessary to enregister, or to refer on registration in any manner to the list of creditors annexed to the deed of assignment ; 10. If such deed be executed in Upper Canada, according to the form of execution of deeds prevailing th^re, it shall have the same force and effect in Lower Canada as if it bad been executed in Lower Canada before notaries ; and if such deed be executed in Lower Canada before notaries, it shall have the same force and effect in Upper Canada, as if it had been executed in Upper Canada, according to the law in force there ; and copies of such deed, certified as aforesaid, shall constitute, before all courts and for all purposes, primd facie proof of the execution and of the contents of the original of such deed without production of the original. In what cases the estate of an insolvent trader Ehall become subject to com- pulsory liquida- tion. Debtor ab- sconding. COMPULSORY LIQUIDATION. 3. A debtor shall be deemed insolvent and his estate shall become subject to compulsory liquidation : a. If he absconds or is immediately about to abscond from this Province with intent to defraud any creditor, or to defeat or delay the remedy of any creditor, or to avoid being arrested or served with legal process, or if being out of the Province he so remains with a like intent, or if he conceals himself within this Province with a like intent ; Secreting estate b. Or if he secretes or is immediately ab >ut to secrete any part of his estate and effects with intent to defraud his creditors or to defeat or delay their demands or any of them ; Fraudulently assigning. c. Or if he assigns, removes or disposes of, or is about or at- tempts to assign, remove or dispose of any of his property with intent to defraud, defeat or delay bis creditors or any of them ; Or procurini to be seized execution. d. Or, if with such intent be has procured his money, goods^ chattels, lands or property to be seized, levied on or taken under 143 or by any process or execution, having operation where the debt- or resides or has property, founded upon a demand in its nature proveable under this Act, and for a sum exceeding two hundred ' ' dollars, and if such process is in fOrce and not discharged by payment or in any manner provid'- 1 for by law ; 9 «. Or if he has been actually imprisoned or upon the gaol or being im- limitsfor more than thirty days in a civil action founded on Jlyp"®** '" °'^" contract for the sum of two hundred dollars or upwards, and still is so imprisoned or on the limits ; or if in case of such im- prisonment he has escaped out of prison or from custody or from the limits; . ;. . ^ f. Or if he wilfully neglects or refuses to appear on any rule Qr roflising to or order requiring his appearance to be examined at to his debts ^PPear. under any statute or law ia that behalf; g. Or if he wilfully refuses or neglects to obey or comply with or to obey or- any such rule or order made for payment of his debts or of any ^"^ *'"'" P*y* part of them ; h. Or if he wilfully neglects or refuses to obey or comply Or any order or with the order or decree of the Court of Chancery or of any of eery, the judges thereof, for payment of money ; i. Or if he has made any general conveyance or assignment of O' aasiminit his property for the benefit of his creditors, otherwise than in the cept under this manner prescribed by this Act ; Act. or at- with hem ; 2. If a trader ceases to meet his commercial liabilities gene- Demand of as- rally as they become due, any two or more creditors, for sums er^does not meet exceeding in the aggregate five hundred dollars, may make a hia commercial , , . „ „ . , . liabilities. demand upon him (Form E.) requirmg him to make an assign- ment of his estate and effects for the benefit of his creditors ; 3. If the trader on whom such demand is made, contends Counter peti- that the claims of such creditors do not together amount to five the'truth of'Sie- hundred dollars, or that they were procured in whole or in part allegations in for the purpose of enabling such creditors to take proceedings *"*' °™*° ' under this Act ; or that the stoppage of payment by such trader was only temporary, and that it was not caused by any fraud or fraudulent intent, or by the insufficiency of the assets of such trader to meet his liabilities, he may, within five days from such demand, present a petition to the judge praying that no further proceedings under this Act may be taken upon such de- 144 m I mand ; and, after bearing the parties aad sucli evidence as may Judge to deoido. be adduced before him, the judge may grant the prayer of his petition and thereafter such demand shall have uo force or effect whatever; and such petition may be granted with or without costs against either party ; but if it appears to the judge that such demand has been made without reasonable grounds, and merely as a means of enforcing payment under color of proceed- ing under this Act, he may condemn the creditors making it to pay treble costs ; • If the petition 4. If such petition be rejected , or if while such petition is none De^Mont^ pending, the debtor continues his trade, or proceeds with the ed, ^0. realization of bis assets ; or if no such petition be presented within the aforesaid time, and the insolvent during the same time neglects to call a meeting of his creditors as provided by the . second section of this Act ; or if he does not complete such as- .m-^ signment within three days after such meeting, or if there be an adjournment thereof, then within three days after such adjourn- ment ; or if having given notice of a meeting of creditors, as required by the second section of this Act, he neglects to pro- Jto^oompulsory!* ^^^^ further thereunder, his estate shall become subject to com- pulsory liquidation ; 5. But no act or omission shall justify any proceedii.,, .^ Bnti vrttUn three*" place the estate of an insolvent in compulsory liquidation, unless proceedings are taken under this Act in respect of the same, within three months next after the act or omission relied upon as subjecting such estate thereto ; nor after a voluntary assignment has been made, or an assignee appointed under this Act; ' , Proceedings for ^- ^° Lower Canada an affidavit may be made by a creditor issue of writ of for a sum not less than two hundred dollars, or by the clerk or attachment of debtor's estate, other duly authorized agent of such creditor, setting forth the • ^' particulars of bis debt, the insolvency of the person Indebted to him, and any fact or facts which, under this Act, subject the estate of such debtor to compulsory liquidation (Form F), and upon such affidavit being fyled with the Prothonotary of the district within which the insolvent has his place of business, a writ of attachment (Form 6) shall issue against the estate and effects of the insolvent addressed to the sheriff of the district in which such Writ issues, requiring such sheriff to seize and attach the estate and effects of the insolvent, and to summon him to appear before the court to answer the premises, within such months. ■i 146 nesa, a te and trict ia attach him to n such time as is usual therein for the return of ordinary writs of sum- ' mons ; and such writ shall be accompanied by a declaration Deoltration to Betting forth such facts and circumstances as are necessary to •o^ompanywrlt be proved to sustain the issue thereof; and shall be subject as nearly uc can be to the rules of procedure of the court in ordi- nary suits, as to its issue, service, return and subsequent pro- ceedings ; 7. In Upper Canada, in ca <• ' !-' '^ solvency shall be commenced against the debtor, based upon i,^'j^ any act or omission of his which took place ] revions to the institution of the proceedings so stayed by the decision of the ' creditors; 20. If the decision at such meeting be not in the negative, the Prooeedinn on judge shall at once proceed thereat to take the advice of the ^^^^_ creditors as to the appointment of an official assignee, and shall . . t appoint such assign > as hereinbefore provided ; 148 'I- ■11^^ I P : In cue of ques* 21. If any question arises at such meeting respecting the MBount of*any *"*°"°* of any creditor's claim, it shall be decided by the judge credltor'sclaim. apon a hearing of the parties, and from an inspection of the schedules and list so sworn to by the debtor, and of the state-- ment of the debtor's affairs prepared and produced at such meet- ing by the guardian, or person entrusted with the writ of attach- ment : Eflfeot of ap- Sointmentof of- oial aasignee. 22. Upon the appointment of the official assignee, the guard- ian shall deliver the estate and effects attached, to the official assignee ; and by the effect of his appointment, the whole of the estate and effects of the insolvent, as existing at the date of the issue of the writ, and which may accrue to him by any title whatsoever, up to the time of his discharge under this Act, and whether seized or not seized under the writ of attachment, shall vest in the said official assignee, in the same manner and to the same extent, and with the same exceptions as if a voluntary assignment of the estate of the insolvent had been at that date executed in his favor by the insolvent ; Effect of regis- 23« An authentic copy or exemplification, under the hand of tration of order,, „ ^.1 ,f ,-.., . of appointment the proper officer of the Court, of the order of the judge appoint- ing an official assignee, may be registered at full length in any registry office, without any proof of the signature of the officer and without any memorial ; and such registration shall have the same effect as to the real estate of the insolvent and in all other respects, as the registration of a deed of assigniqent underi this Act; . . v^. Notice of ap* polntment. ■ '"fyfi- 24. Immediately upon his appointment, the official assignee shall give notice thereof by advertisement (Form E), requiring^ by such notice all creditors of the insolvent to produce befortf him their claims, and th9 vouchers in support thsreof. OF ABSIQNKBS. Boards of trade 4. The Board of Trade at any place, or the Council thereof, flciL udgnee?^ may name any number of persons within the County or Disti^iQt in which such Board of Trade exists, or within any County or ' District adjacent thereto, in which there is no Board of Trade, tot be official assignees for the purposes of this Act, and at the time Seonrity. of such nomination shall declare what security for the due per- ^" *? '; formance of his duties, shall be given by each of such official Notice of somi* assignees before entering upon them ; and a copy of the resolu- tion naming such persons, certified by the Secretary of the Board, nation. 149 f ■■'>■■ [thereof, JDistifiQt luaty or Irade, to IthetimA lae per- official resolu- I Board, shall be transmitted to the Prothonotarj or Cleric of the Court Notice of nomU in the District or C junty within which such assignees are resi- °**'°°' dent; 2. Such security shall be taken in the name of oflBce of the Security to be ffiven by ftssiK* President of such Board of Trade, for the benefit of the creditors nee. of any person whose estate is, or subsequently may be, in process of liquidation under this Act ; and in case of the deftiuU of any such assignee in tho performance of his duties, his security may be enforced and realized by the assignee who shall be appointed ^his successor, who may sue in his own name as such assignee npon such security ; Meeting of cred- itors, wnen to be called by assig- nee. Assignee to be subject to cer- tain rules. Deposit of mon- eys. 3. The assignee shall call meetings of creditors, whenever required ,in writing so to do by five creditors, stating in such writing the purpose of the intended meeting ; or whenever he is required so to do by the Judge, on the application of any credi- tor, of which application he shall have notice ; or whenever he shall himself require instructions from the creditors ; and he shall state succinctly in the notice calling any meeting, the pur- poses of such meeting ; 4. The assignee shall be subject to all rules, orders and direc- tions, not contrary to law, or to the provisions of this Act, which are .made for his guidance by the creditors at a meeting called for the purpose ; and until he receives directions from the credi- tors in that behalf, if there be a Bank or agency <>f a Bank in the County in which the insolvent has his Uce of business, or within fifteen miles of such place, he . ' deposit weekly, at interest, in the name of the estate, all mone^ s received by him, in the Bank or Bank agency in or nearest to the place where the insolvent so carries on business ; 6. The assignee shall attend all meetings of creditors, and To attend all take and preserve minutes of such meetings, signed by himself, ^fiiton. ^ and signed and certified at the time by the chairman, or by three creditors present at the meeting; and copies of, and extracts •;. from, such minutes, certified by the assignee, shall be primd facie evidence of the proceedings purporting to be recorded in such minntes ; and he shall also keep a correct register of all his pro- ntes, ^ ceedings, and of all claims made to or before him ; 6. The assignee shall give such security and in such manner security to bo as shall be ordered by a resoluttoa of the creditors, and shall f *]^«» «> o"di- . . » » . tors, conform himself to such directiona m respect thereof, and m iniih \ 150 The bond. How kept. Powers of insol- vent vested in Msignee. Winding up afikire. respect of any change or modification thereof, or addition thereto, as are subsequently conveyed to him by similar resolutions ; and in every case except where the security has been taken in the name of the President of the Board of Trade, and is not required to be changed, the bond or instrument of security shall betaken in favor of the creditors, by the name of the " Creditors of A. B. an insolveA, under the Insolvent Act of 1864," and shall be deposited in the o£Bce of the Court, and in case of default by, the assignee on whose behalf it is given, may be sued upon by any assignee who shall be subsequently appointed, in his own* name as such assignee ; 7. All powers rested in any insolvent which he might legally execute for hia own benefit, shall vest in, and be executed by the assignee, in like manner and with like effect as they were vested in the Insolvent, and might have been executed by him ; but no power vested !n the insolvent or property or effects held by him as trustee or otherwise for the benefit of others, shall vest in the assignee under this Act; 8. The assignee shall wind up the affairs of the Insolvent, by the sale, in a prudent manner, of all bank and other stocks, and of all movables belonging to him, and by the collection of all debts; but in all such respects shall be guided by the direction .;\ of the creditors, given as herein provided ; Assignee's right ^' "^^^ assignee, in his own name as such, may sue for the of aotion.^fto. recovery of all debts due to the insolvent, and may take, both ^ in the prosecution and defence of suits, all the proceedings that the insolvent might have taken with respect to the estate, and may intervene and represent the Insolvent in all suits or pro- ^ , ceedings by or against him, which are pending at the time of his f appointment, and on his application may have his name inserted w - therein, in the place of that of the Insolvent ; When the in- 10. If a partner in an unincorporated trading Company or co- SS» in*a'ra5*mt P*'^*°®"^'P» becomes insolvent within the meaning of this Act, eompap", &o. and an assignee is appointed to tjie estate of such insolvent, the assignee shall have all the rights of action and remedies against the other partners in such Company or co-partnership, which any partner could have or exercise by law against his co-part- ners after the dissolution of the firm ; and may avail himself of Buch rights of action and remedies, as if such co-partnership or Company had expired by eflux of tiD!>^ ; I \, 151 11. After having acted with due diligence in the collection of As to doubtfld the debts, if the assignee finds there remains debts due, the at-g^i^ ^j^ or- tempt to collect which would be more onerous than beneficial to dered. the estate, he may report the same to the creditors at a meeting ' thereof duly called for the purpose ] and with their sanction he , may obtain an order of the judge to sell the same by public auction, after such advertisements thereof as may be required by 8uch order ; And pending such advertisements, the assignee shall keep a list of the debts to be sold, open to inspection at his oflBce, and shall also give free access to all documents and vouchers •explanatory ,..-..,, .■ .r^ ,1 _-r . ^/■■■. : ■■-■.),. 14. The sale of real estate in Upper Canada so made by the Effect of sale of assignee, shall have the same effect as if the same had beengf"„^ jjf ^"q] made by a Sheriff in Upper Canada, under a writ of execution «*>«• l'«C.re8pee« issued in the ordinary course ; and in Lower Canada, such sales shall have the same effect as if made by a sheriff under a similar writ ; and the deed of such sale, which the assignee executes (Form M.,) shall have precisely the same effect as a Sheriffs deed has in that part of the Province within which the real s. 162 1 m' ':m Credit for pniv estate is situate ; but he may grant such terms of credit as be onaae money, jjj^y deem expedient, and as may be approved of by the credi- tors for any part of the purchase money ; and if no previous Reserving mort-^7P<>^^B*l'^o <>' mortgage remains upon such real estate, be shall fkge therefor, be entitled to reserve a special hypotheque or mortgage by the " deed of sale, as security for the payment of such part of the pur- chase money ; and such deed may be executed before witnesses, or before notaries, according to the exigency of the law of the place where the real estate sold is situate ; OotyofMSiffnee selling real es- tate in L. G. Notice to regis- tered incum- brancers. And other hy- pothecary ored- Certiflcate of register to be filed. Liability of as- signee lor neg- lect. 15. In Lower Canada, before advertising any sale of real estate the nssignee shall procure, at the expense of the estate, from the registrar of the County wherein such real estate is situate, a certificate containing the names and residences as shewn by the Registry books of all persons enregistered as hypothecary credi- tors upon such real estate ; and he shall himself deposit in the nearest post office a notice with the postage paid thereon, ad- dressed to each of such creditors by the name and to the address contained in such certificate, and also a notice addressed to each creditor at any other place where the assignee has reason to believe such creditor to be then resident, and also a notice ad- dressed to any other person whom the assignee has reason to believe to be then the creditor of such hypothecary claim, — in- forming the creditors of the day fixed for the sale of the real estate, and of the time within which the hypothecary creditors are required to file their claims under this Act ; and before the day of sale he shall file in the office of the Court the Certificate of the registrar with a return thereon under oath as to his doings in respect of such notice ; and the assignee shall be directly liable for any neglect of the duty imposed upon him by this sec- tion, to any party suffering damage in consequence of such neglect; Assignee to be 16. The assignee shall be subject to the summary jurisdiction mwy'^ Juisdio- °^ ^^^ Court or judge in the same manner and to the same ex- tion of the court tent as the ordinary officers of the Court are subject to its juris- diction, and the performance of his duties may be enforced by .' ' the judge on summary petition in Vacation, or by the Court under penalty of imprisonment, as for contempt of Court, whether such duties be imposed upon him by the deed of assign- men^ by instructions from the creditors validly passed by them under this Act and communicated to him, or by the terms of this Act; 153 1*1. Before the period at which dividends maybe declared, Bemov*! of «»• any assignee may be removed by the judge, upon proof of fraud Ju^'J^' tat ^nto- or dishonesty in the custody or management of the estate, upon eonauot. the application of any creditor ; and if snch removal takes place, or if tho assignee dies more than fifteen days before the said^^'^"*""®"***' period, the Judge may appoint another assignee in the same manner as he can appoint an assignee to an estate in compulsory liquidation ; but if the assignee is removed or dies within fifteen days of the said period, the judge shall order a meeting of cred- itors to be held for the purpose of appointing another assignee, and shall cause notice of such meeting to be giveiv by advertise- ' ment; 18. Any assignee may be removed after the period at which Removal of as- dividend^ may be declared, by a resolution passed by the credi- hq„^ ' tors present or represented at a meeting duly called for the pur- pose ; and if the removal has been effected by an order of the judge, or if the assignee dies within fifteen days before the said period, or if the removal is effected by the creditors after the said period, they shall have the right of appointing another Appointment of assignee, either at the meeting by which he is removed, or at any other called for the purpose ; 19. The assignee so removed shall, nevertheless, remain sub- Amignee remp- . ' ved to remain ject to the summary jurisdiction of the Court, and of any judge accountable. thereof, until he shall have fully accounted for bis acts and con- duct while he continued to be assignee ; fiction le ex- j juris- led by lOourt ^ourt, |9siga- I them Ims of 20. The remuneration of the assignee shall be fixed by the Remuneration creditors at a meeting called for the purpose ; but if not so fixed ^ "** *°**' before a final dividend is declared, shall be put into the dividend sheet at a rate not exceeding five per centum upon the cash receipts, subject to objection by any creditor as exceeding the value of the services of the assignee, in the same manner as any other item of the dividend sheet ; 21. Dpon the death of an assignee, the estate of the insolvent What shall he shall not descend to the heirs or representatives of the assignee, estate in the but shall become vested in any assignee who shall be appointed |^*"^*>^ ^ by the creditors in his place and stead; and until the new assignee is appointed, the estate shall be under the control of the judge ; 22. After the declaration of a final dividend the assignee may 164 How Msignee prepare bis final account, and after due notice bj adTertisement SwhM'g^ ^^ ^^y present a petition to the judge for his di»cfaarge from tbe office of assignee; and from tbe time of the first advertisement thereof, to the time of the presentation of such petition, he shall keep such final account open for inspection at his office ; ABsiniee to file 23. The assignee shall produce and file with ituch petition a his petitJion for banic certificate of tbe deposit of any dividends remaining un- diaobarge. claimed, or of any balance in his bands, and thereupon the judge after hearing the parties, may refuse, or grant conditionally or unconditionally, the prayer of such petition. or DIVIDIMDB. Aeoounta to be 5. Upon tbe expiration of tbe period of two months from tbe dendB ^prepared ^^^^ insertion of the advertisements giving notice of an assign- by assignee. meat, or of the appointment of an official assignee, or as soon as may be after tbe expiration of such period, and afterwards from time to time at intervals of not more than six months, the assignee shall prepare and keep constantly accessible to the creditors, accounts and statements of his doings as sucb assignee, and of the position of tbe estate and at similar intervals shall prepare dividends of tbe estate of the Insolvent ; What debts may rank for 2. All debts due and payable by tbe Insolvent at tbe time of MM^nent'out'of ^^® execution of a deed qf assignment, or at the time of tbe issue Insolvent's es- of a writ of attachment under this Act, and all debts due but not then actually payable, subject to such rebate of interest as may be reasonable, shall have the right to rank upon the estate Sureties of in> of the Insolvent ; and any person then being as surety or other- for him. *^ ' " wise liable for any debt of tbe insolvent who sub3equently pays such debt, shall stand in the place of the original creditor, if such creditor has proved his claim on such debt ; or if he has not proved shall be entitled to prove against and rank upon the. estate for such debt, to the same extent and with the same effect as such creditor might have done ; Contingent 3. If any creditor of tbe Insolvent claims upon a contract ?on!tor payment ^^P®"*^"** '^P°'^ * condition or contingency, which does not of. happen previous to tbe declaration of tbe first dividend, a divi- dend shall be reserved upon tbe amount of such conditional or contingent claim, until the condition or contingency is deter- mined ; butif it be made to appear to the judge that such reserve will probably retain the estate open for an undue length of time, 155 ract I not livi- |l or It-it- Brve he may, unless an estimate of the value thereof be agreed to in oortain eaaes between the claimant and the assignee, order the assif?:nee to^"^'^|g^]J^*^g°^f make an award upon the value of such contingent or conditional value to be made claim, and thereupon the assignee shall make an award after the same investigation, and in the same manner and subject to a similar appeal, as is hereinafter provided for the makiug of awards upon disputed claims and dividends, and for appeals from such awards ; and in every case the value so established or agreed to shall be ranked upon as a debt payable absolutely ; 4. In the preparation of the dividend sheet due regard shall Preparation of be had to the rank and privilege of every creditor, which rank " ■ ■ * and privilege, upon whatever they may legally be founded, shall creditors hold- not be disturbed by the provisions of this Act ; but no dividend *ng collateral se- shall be paid to any creditor holding collateral security from the Insolvent for his claim, until the amount for which he shall rank as a creditor on the estate as to dividends therefrom, shall be established as hereinafter provided ; and such amount shall be the amount which he shall be held to represent in voting at meetings of creditors, and in computing the proportion of credi- tors, whenever under this Act such proportion is required to be ' '' ascertained; 5. A creditor holding security from the Insolvent, or from his Duty of such se- A i 1. 11 •* it- * J * 4f i! •* • <"""®'^ creditors. estate, shall specify the nature and amount of such security in and power of his claim, and shall therein on his oath put a specified value on *^>8»M' such security ; and the assignee, under the authority of the creditors, may either consent to the retention of such security by the creditor at such specified value, or he may require from such creditor an assignment and deliviery of such security, at an advance of ten per centum upon such specified value, to be paid by him out of the estate so soon as he has realized such security, in which he shall be bound to the exercise of ordinary diligence ; and in either of such cases the difference between the value at which the security is retained or assumed and the amount of the claim of such creditor, shall be the amount for which he shall rank and vote as aforesaid ; 6. The amount* due to a creditor upon each separate item of How creditors his claim at the time of the assignment, or of the appointment payment of of the official assignee, as the case may be, shall form part of ''''^'''^■ the amount for which he shall rank upon the estate of the insol- vent, until such item of claim be paid in full, except in cases of deduction of the proceeds of collateral security as hereinbefore 156 provided ; but no olairo or part of a claim shall be permitted to be ranked upon more than once, whether the claim so to rank be made by the i&tat person or by different persons ; IncMelDBol- 7 If the insolvent owes debts both -individually and as a vent owes Indl- ^ vidually and as member of a co-partnership, or as a member of two different co- co-P er. partnerships, the claims against him shall rank first upon the estate by which the debts they represent were contracted, and shall only rank upon the other after all the creditors of that other have been paid in full ; Allowance to insolvent. No costs in salts against insol- vent allowed after notice. 8. The creditors, or the same proportion of them that may grant a discharge to the debtor under this Act, may allot to the Insolvent by way of allowance, any sum of money, or any pro- perty they may think proper ; and the allowance so made shall be inserted in the dividend sheet, and shall be subject to con- testation like any other item of collocation therein, but only on the ground of fraud or deceit in procuring it, or of the absence of consent by a sufficient proportion of the creditors ; 9. No costs incurred in suits against the Insolvent after due notice of an assignment or of the issue of a writ of attachment in compulsory liquidation has been given according to the pro- visions of this Act, shall rank upon the estate of the insolvent , but all the taxable costs incurred in proceedings against 4iim up to that time, shall be added to the demand for the recovery of which such proceedings were instituted; and shall rank upon the estate as if they formed part of the original debt ; How clerks and 10. Clerks and other persons in the employ of the Insolvent raSf for wages! '" *"^ *^o"* ^" business or trade, shall be collocated in the dividend sheet by special privilege for any arrears of salary or wages due and unpaid to them at the time of the execution of a deed of assignment or of the issue of a writ of attachment under this Act, not exceeding three months of such arrears ; Notice of divi- dend sheet. 11. So soon as a dividend sheet is prepared, notice thereof, (Form N) shuU be given by advertisement, and after the expiry of six juridical days from the day of the last publication of such advertisement, all dividends which have not been objected to ' - ' within that period shall be paid ; Provision in 12. If it appears to the assignee on his examination of the that all the ored- books of the insolvent or otherwise, that the insolvent has ordi- flledculms "***n*ry> hypothecary or privileged creditors who have not filed in 157 » claims before such assignee, it shall be his dntj to reserve divi- dends for such creditors according to the nature of the claims, and to notify them of such reserve, which notification may be by letter through the post, addressed to such creditor's residence as nearly as the same can be ascertained by the assignee ; and if such creditors do not file their claims and apply for such divi- dends previous to the declaration of the last dividend of the estate, the dividends reserved for them shall form part of such ; last dividend ; 13. If any dividend be objected to, within the said period of C«»« ot o»^ . , . ,. . . . ^. - t t'ong to or dls- siz days, and any dispute arises between the creditors of the putes oonoem- insolvent or between him and any creditor, as to the correct divided for amount of the claim of any creditor, or as to the ranking or pri- vilege of the claim of any creditor upon such dividend sheet, the assignee shall obtain from the creditor whose claim or rank- f^^^^^e^^ ing is disputed, his statements and vouchers in support thereof, and from the Insolvent or opposing creditor, a statement show- ing his pretensions as to the amount thereof, and shall hear and examine the parties and their witnesses under oath, which oath the assignee is hereby empowered to administer ; and shall take clear notes in writing of the parole evidence adduced before him, and shall examine and verify the statements submitted to him, by the books and accounts of the insolvent and by such evidence vouchers and statements as may be furnished to him ; and shall make an award in the premises, and as to the costs of such con- testation, which award shall be deposited in the Court and shall be final, unless appealed from within three days from the date of its communication to the parties to the dispute ; 14. The award of the assignee as to costs, may be made ex- Execution of ecutory by execution in the same manner as an ordinary judg- ''*'' *w'^' ment of the Court, by an order of the judge upon the applica- tion of the party to whom costs are awarded made after notice >.> -^^ to the opposite party ; IB. The creditors way, by resolution, authorize and direct the Costs of contest- . ing any claims, costs of the contestation of any claim or any dividend to be paid &o. out of the estate, and may make such order either before or pending any such contestation; 16. Pending any appeal, the assignee shall reserve a dividend Fending appeal, equal to the amount of dividend claimed ; 168 Unolaimod div- 17> All diridends remaining unclaimed at the time of the dis- detSt wUta!*^ charge of the assignee shall be left in the bank where they are deposited for three years, and if still unclaimed, shall then be paid orer by such bank with the interest accrued thereon, to the Provincial Qovernment, and if afterwards duly claimed, shall be paid over to the persons entitled thereto, with interest at the rate of three per centum per annum from the time of the recep- tion thereof by the Government ; Balanoe of ee- 18. If any balance remains of the estate of the insolvent, or of ment of del^r ^^^ proceeds thereof, after the payment in full of all debts due by the insolvent, such balance shall be paid over to the insol- vent upon his petition to that effect, duly notified to the creditors by advertisement and granted by the judge. OF LBASIS. How unexpired 0, If the insolvent holds under a lease property, having a the insolvent, value above and beyond the amount of any rent payable under with if thermit ^"'^'* lease, the assignee shall make a report thereon to the judge, be less than the containing his estimate of the value of the estate of the leased value of the pre- " , , , , . . , mises. property in excess of the rent ; and thereupon the judge may order the rights of the insolvent in such leased, premises to be sold, after notice by advertisement of such sale ; and at the time te^st***^ ***' '"'and place appointed such lease shall be sold, upon such condi- tions, as to the giving of security to the lessor, as the judge may order ; and such sale shall be so made subject to the payment of the rent and to all the covenants and conditions contained in the lease ; and all such covenants and conditions shall be bind- ing upon the lessor and upon the purchaser, as if the purchaser had been himself lessee and a party with the lessor to the - lase ; Unexpired leas- ^« If the insolvent holds under a lease extending, beyond the the "'nreoedln" y®*' current under its terms at the time of his insolvency, pro- section, perty which is not subject to the provisions of the last preceding section, or respecting which the judge does not make an order of sale, as therein provided, the creditors shall decide at any meeting which may be held more than three months before the termination of the yearly term of the lease current at the time of such meeting, whether the property so leased should be retained for the use of the estate, only up to the then current, or if the conditions of the lease permit of further extension, aldo ■:>' ' up to the end of the next following yearly term thereof, and . .their decision shall be final ; 159 8. From and after the time fixed for the retention of the leased Cancelling the property for the use of the estate, the lease shall be cancelled of" be""eiiof in and shall from thenceforth be inoperative and null ; and so soon "uoh cue. as the resolution of the creditors as to such retention has been passed, such resolution shall be notified to the lessor, and if be contends that he will sustain any damage by the termination of the lease under such decision, be may make a claim for such damage, specifying the amount thereof under oath, in (he same manner as in ordinary claims upon the estate ; and the assignee shall proceed forthwith to malce an award upon such claim, in the same manner, and after similar investigation, and with the same right of appeal as is herein provided for in the case of claims or dividends objected to ; 4. In making such claim, and in any award thereupon, the Meuureofdam- measure of damages shall be the difference between the value of*^ the premises leased when the lease terminates under the resolu- tion of the creditors, and the rent which the insolvent had agreed by th% lease to pay during its continuance ; and the chance of leasing or of not leasing the premises again, for a like rent, shall not enter into the computation of such damages ; and if damages are finally awarded to the lessor he shall rank for the amount upon the estate as an ordinary creditor. ler nd OF APPEAL. v. There shall be an appeal to the judge from the award of Proceedings in an assignee made under this Act, which appeal shall be by sum- |^^rd of* m- mary petition, of which notice shall be given to the opposite signee. . . party and to the assignee ; and the assignee shall attend before the judge at the time and place indicated in such notice, and shall produce before him all evidence, notes of evidence, books, or proved extracts from books, documents, vouchers or papers having reference to the matter in dispute ; and thereupon the judge may confirm such award, or modify it, or refer it back to the assignee for the taking of further evidence, by such order as will satisfy the ends of justice ; 2. If any of the parties to such appeal are dissatisfied with And on appeal such order of the judge, they may appeal from his judgment in the Judge. Lower Canada to the Oourtof Queen's Bench for Lower Canada on the Appeal Side thereof, and in Upper Canada tc either of the Superior Common Law Courts or to the Court of Chancery, or to any one of the judges of the said Courts ; first obtaining 160 Appeal must be the allowance of such appeal in Lower Ganad'v by a judge of the allowed. Superior Court, and in Upper Canada by a judge of any of the Gourti! to which such appeal may be made ; and in either case tue Judge shall be {^uided in allowing the same by the amount to which the assets of the estate may be effected by the final declbioa of the question at issue, as well as by his opinion upon As to appeal to the pretensions of the appellant; but any appeal to a single inl/'c*''^'''*^*^''"'^^^ '° Dpper Canada may in his discretion be referred, on a special case to be settled, to the full ^'ourt, and on such terms in the meantime as he may think necessary and just ; ■• '■' ■ Notice of appeal 3. Such appeal shall not be permitted unless the party desir- wlthin a'certaln ^"S to appeal applies for the allowance of the appeal, with notice period. to the opposite party, within five days from the day on which the judgment of the judge is rendered, nor unless within five days after the allowance thereof, he causes to be served upon the opposite party and upon the assignee a petition in appeal setting forth the petition to the jiidge, and his decision thereon, and pra^ I^ j for its rerision, with a notice of the day On which such petition is to be presented, and also within the said period of five days causes security to be given before the judge by two sufficient sureties, that he will duly prosecute such appeal, and pay all costs incurred by reason thereof by the respondent ; i. The petition in appeal, when the appeal is to a Court, shall be presented on one of the first four days of the term next follow- ing the putting in of the security in appeal, and shall not be thereafter received ; and when the appeal is to a judge, the peti- tion shall be presented within ten days after putting in security, and shall not thereafter be received ; and on or before the day of the presentation of the petition, the assignee shall file in the oflice of the Court of Appeal, or of the Court to which the judge R{rpealed to belongs, the evidence, papers, and documents which had been previously produced before the judge, and thereupon the appeal shall be proceeded with and decided according to the practice of the Court ; In case petJlfon 5. If the party appellant does not preseut his petition on the 18 not pres'-'- ^ed /.j^^i. ,^ . ., i^j^,. in due time.. *^ay fixed for that purpose, the Court or judge selected to be ap- pealed to as the case may be, shall order the record to be returned to the assignee, and the party respondent may on the following or any other day during the same term produ'^e before the Court or within six days thereafter before such judgt, the copy of poti- tion served upon him, and obtain costs thereon against the ap- pellant ; And security. Presenting of petition in ap- peal. Filing docu- ments. 131 6. The costs in appeal shall be iv the discretion of the Court Costs in appeal, or of the uidge appealed to, as the case may be ; 1. In Lower Canada any order of a judge made under any of j^^"'|**^° **£.**€? the foregoing sub-sections, shall be subject to review under the to be subject to provisions of auy Act passed during the present Session, in the same manner and upon tLe same conditions as judgments of the Superior Court for Lower Canada ; and in such cases the pro- visions respecting appeal to the Court of Queen's Bench herein- before made, shall apply to the judgments of the Court of Review. ♦ OF FRAUD AND FBAnOULRNT PREFBRENOES. 8, All gratuitous contracts or conveyances, or contracts or What shall bo conveyances witliout ooasideration, or with a merely nominal lent contracts or consideration, made by a debtor afterwards becoming an insol- conveyances, vent with or to any person whomsoever, within three months next preceding the date of the assignment or of the issue of the writ of attachment in compulsory liquidation, and all contracts by which creditors are injured, obstructed, or delayed, made by a debtOi imable to meet his engagements, and afterwards becom- ing an insolvent, with a person Icnowing such inability or having probable cause for believing such inability to exist, or after such inability is public and notorious, are presumed to be made with intent to defraud his creditors ; 2. A contract or conveyance for consideration, by which ere- Contracts or ditors are injured or obstructed, made by a debtor unable to made^by^'insol- meec his engagements with a person ignorant of such inability, vent voidable in and before it has become public and notorious, but within thirty days next before the execution of a deed of assignment or of a writ of attachment under this Act, is voidable, and may be set aside by any court of competent jurisdiction, upon such terms as to the protection of such person from actual loss or liability by reason of such contract, as the Court may order ; 3. All contracts or conveyances made and acts done by a Frandalentcon« debtor, with intent fraudulently to impede, obstruct, or delay voyances'bvta^ his creditors in their remedies against him, or with intent to de- solvent void, fraud his creditors, or any of them, and so made, done, and in- tended with the knowledge of the person contracting or acting with the debtor, and which have the e£fect of impeding, obstruct- ing, or delaying the creditors in their remedies, or of injuring I \'\ 162 them, or any of them, are prohibited, and are null and v oid, not- withstanding that Buch contracts, conveyances, or Jicts be in consideration or in contemplation of marriage ; 4. If any sale, 4epo8it, pledge, or transfer, be made by any In what cage preferential sales, &c., shall person in contemplation of insolvency, by way of security for dulent™ ' pay™ent to any creditor, or if any goods, effects, or valuable security be given by way of payment by such person to any cre- ditor, whereby such creditor obtains or will obtain an unjust preference over the other creditors, such sale, deposit, pledge, ' transfer, or payment, shall be null and void, and the subject thereof may be recovered back for the benefit of the estate by the assignee, in any Court of competent jurisdiction ; and if the same be made within thirty days next before the execution of a deed of assignment, or the issue of a writ of 'Attachment under this Act, it shall be presumed to have been so made in contem- plation of insolvency ; When payments ^- Every payment made within thirty days next before execu- Iwiduf t ™®'* t*o° of * issued against his estate and effects ; which subpoena may be procured by the plaintiff, or by any creditor intervening in the action for that purpose, or by the assignee ; 3. The insolvent may also be examined by the assignee or by ltor*"on "appli- any creditor, on the application of the insolvent for a discharge cation for ai»-. Examination by assignee or cred> charge, &o. or for the confirmation or annulling of a discharge, at any stage of such proceeding or upon any petition to set aside an attach- ment in the proceedings for the compulsory liquidation of bis estate ; Other persons 4. Any other person who is believed to possess information ineS *^*™" respecting the estate or effects of the insolvent, may also be from time to time examined before the judge upon oath, as to such estate or effects, upon an order from the judge to that effect, which order the judge may grant upon petition, setting forth satisfactory reasons for such order, without notice to the insol- vent or to the person to be so examined ; Insolvent to at- 5. The insolvent shall attend all meetings of bis creditors, hff orei^tov?" when summoned so to do by the assignee, and shall answer all questions that may be put to him at such meetings touching bis business, and touching his estate and effects ; and for every such attendance he shall be paid such sum 49 shall be ordered at such meeting, but not less than one dollar ; 169 6. Any person summoned for examination or under ezamina- Conduct of wit> tton under this Act shall be subject to proceedings and punish- ments similar to those which may be taken against or inflicted upon ordinary witnesses ; and on application the judge may at Their costs, his discretion order an allowance to be made to persons so ex- amined, of a like amount to that allowed to witnesses iu civil cases, and order them to be paid such allowance out of the estate or otherwise. OF PROOEDCRB OENERALLT. ' '^ II. Notice of meetings of creditors and all other notices Notices under herein required to be given by advertisement, without special ^'g^j^g*'"®'"*" designation of the nature of such notice, shrll be so given by publication thereof for two weeks in the Cana> • Gazette, also in Lower Canada in every issue during two weeks of one news- paper in English and one in French, and in Upper Canada, in one newspaper in English, published at or nearest to the place where the proceedings are being carried on, if such newspapers are published within ten miles of such place ; and in any case the assignee or person giving such notice shall also address notices thereof to all creditors and to all representatives of foreign creditors, within the Province, and shall mail the same with the postage thereon paid, at the time of the insertion of the first advertisement ; 2. All questions discussed at meetings of creditors shall be Decision of decided by the majority in number of all creditors for sums above ^eet/ngs of one hundred dollars, present or represented at such meeting, creditors, and representing also the majority in value of such creditors, unless herein otherwise specially provided ; but if the majority in number do not agree with the majority in value, the meeting may be adjourned for a period of not less than fifteen days, of which adjournment notice by advertisement shall be given ; and if the adjourned meeting has the same result, the views of each section of the creditors shall be embodied in resolutions, and auch resolutions shall be referred to the judge, who shall decide between them ; 3. If the first meeting of creditors, which takes place after the What may be expiry of the period of two months from the date of the deed of m'oetinft oPcred- assignment or of the appointment of an official assignee, be called 'fors if called Ibr " - B » ordering affairs for the ordering of the affairs of the estate generally, and it be generally, &c. BO stated in the notices calling such meeting, all the matters and things respecting which the creditors may vote, resolve or m Claims of cred- itors; form of. m \ ¥•■'' How to be at- tested. order, or which they may regulate under this Act, may be voted resolved or ordered upon, and may be regulated at such meeting without having been specially mentioned in the notices culling such meeting, notwithstanding anything to the contrary in tliis Act contained, due regard being had, however, to the propor- tions of creditors required by this Act for any such vote, resolu- tion, order or regulation ; 4. The claims of creditors (Form R) shall be furnished to the assignee in writing, and shall specify what security, if any, the creditor holds for the payment of his claim, and when required by this Act, shall also contain an estimate by such creditor of the value of such security; and if the creditor holds no security, then it shall also be so therein stated ; 5. The claims shall be attested under oath, taken in Canada before any judge, Commissioner for taking Affidavits, or justice of the peace, and out of Canad 'lefore any judge of a Court of Record, any commissioner for i ng affidavits appointed by any Canadian Court, the chief municipal officer for any town or city, or any British consul or vice-consul, or before any other person authorized by any statute of this Province for taking affi- davits to be used in this province ; 6. Before the preparation of a dividend sheet, the assignee may require from any creditor a supplementary oath declaring what nmount, if any, such creditor has received in part payment of the debt upon which his claim is founded, subsequent to the making of such claim, together with the particulars of such pay- ment ; and if any creditor refuses to produce or make such oath before the assignee within a reasonable time after he has been required so to do, he shall not be collocated in such dividend sheet ; 7. If, in Lower Canada, any claim be secured by hypothique p^vUige^tn upon the real estate of the insolvent, or if it consists of any C- hypothique or privilege upon such real estate or any part thereof, to the nature of such hypothique or privilege shall be summarily specified in such claim ; but unless such claim be filed with the assignee, with the deeds a'nd documents in support thereof, within six days from the day of sale of the property affected thereby, or if not, unless leave to file the same be afterwards obtained from the judge upon special cause shewn, previous to the distribution of the proceeds of such real estate, or unless a Supplementary oath in certain cases. Claims secured by or L. Documents bo filed, &e, 171 dividend upon such claim has been reserved by the assignee, such claim shall not be entitled to any preferential collocation upon the proceeds of such real estate; . . ,, m 8. Any aflSdavit required under this Act may be made by the Who may make party interested, or by thfe agent in that behalf having a per- this Act. ' sonal knowledge of the matters therein stated ; 9. One clear day's notjce of any petition, motion, or rule, shall KniicoR of pro- be sufficient, if the party notified resides within fifteen miles of "^ *'• the place where the proceeding is to be taken, and one extra day shall be sufiScient allowance for each additional fifteen miles of distance between the place of service and the place o.' pro- ceeding, and service of such notice shall be made in such manner as is now prescribed for similar services in that section of the Province within which the service is made ; 10. The judge shall have the same power and authority in CommlHglona respect of the issuing and dealing with commissions for the exa- Qf'*^^^^["'**®° mination of witnesses, as are possessed by the ordinary Courts of Record in the section of the Province in which the proceed- ings are being carried on ; 11. All rules, orders, and warrants, issued by any judge or Kulea, &c., may Court in any matter or proceeding under this Act, may be validly par?of*tUi°Pro^ served in any part of this Province upon the party affected orvinoe. to be aflFected thereby ; and the service of them or any of them may be validly made in such manner as is now prescribet' for singular services in that part of the Province within which the service is made; and the person charged with such servipe shall make his return thereof and on oath, or if a sheriff or bailiff in Lower Canada, may make such return under his oath of office ; 12. The fourth, fifth, seventh, eighth, ninth, tenth, ekventh Certain ss. ot and thirteenth sections of chapter seventy-nine of the Consoli-{on. Stat, of dated Statutes of Canada shall apply to proceedings under this Canada to apply Act ; and the whole of chapter eighty of the said Consolidated Statutes shall also apply to proceedings under this Act, in the same manner and to the same extent as to proceedings before Courts of Record in Upper and Lower Canada ; 13. The forms appended to this Act, or other forms in equiva- Forms ap- lent terms, shall be used in the proceedings for which such forms uBed. are provided ; but in every petition, application, motion, contes- tation, or other pleading under this Act, the parties may state 172 lis ''1 ■'t; I „ ,1' In otiior cases the facts upon which they rely in plain and concise Iangiia|;c, to Kiiage to bo'suf- *^® interpretation of which the rule3 of construction applicable floiout to such language in the ordinary transactions of life shall apply > and no allegation or statement shall be held to be insuiliciently made, unless by reason of any alleged insufHcioncy, the opposing party be misled or taken by surprise ; Amondmont of 14. The rules of procedure as to amendments of pleadings, procee ngs. which are in force at any place where au^ proceeilinflfi under this Act are carried on, shall apply to all proceedings under this Act; and any judge before whom any such proceedings are being carried on shall have full power and authority to apply the appropriate rules as to amiuidnients, to the proceedings so pending before him; and no pleading or proceeding shall bo void by any reason of any irregularity or default which can or may be amended under the rules and practice of the Court ; Rflbct of death 15. The death of the insolvent, ponding proceedings upon a of insolvoiit, pending pro- coodings. compulsory quidation. voluntary assignment or in compulsory liquidation, shall not affect such proceedings, or impede the winding up of his estate ; and his heirs or other legal represeutiitives may continue the proceedings on his behalf to tlie procuring of a discharge, or of the confirmation thereof, or of both ; Costs to compel 16. The costs of the action to compel compulsory liquidation ^ ■ shall be paid by privilege as a first charge upon the assets of ' ( the insolvent ; and the costs of the judgment of confirmation of the discharge of the insolvent, or of the discharge if obtained ] direct from the Court, and the costs of winding up the estate, s being first submitted at a meeting of creditors, and afterwards taxed by the judge, shall also be paid therefrom ; Rules of prac- 17. In Lower Canada rules of practice for regulating the due tice and tariff of gQjj^mjj. ^f proceedings under this Act before the Court or judge, and the tariff of fees for the officers of the Court, and for the advocates and attorneys practising in relation to such proceed- ings, sliall be made forthwith after the passing of this Act, and when necessary repealed or amended, and shall be promulgated under or by the same authority and in the same manner as the ru!es of practice and tariff of fees of the Superior Court for Lower Canada, and shall applj' in the same manner and have the same effect in respect of the proceedings under this Act, as the rules of practice and tariff of fees of the Superior Court apply to and affect the proceedings before that Court ; and bills of costs upon proceedings under this Act, may be taxed ^^ Taxation of costs. 173 • and proceeded upon in like manner, as bills of costs maj now be tiixed and proceeded upon in the said Superior Gourt; " 18. In Upper Canada the judges of the Superior Courts ofH"l<'8 and tarifl' Oommon Law, and of the Court of Chancery, or of any five of them, of whom the Chief Justice of Upper Canada, or the Chan- cellor, or the Chief Justice of tlie Common Pleas, shall be one, shall have power to frame and settle such forms, rules and regu- lations as shall be followed and observed in the proceedings on i ■ insolvency under this Act, as they may deem to be necessary, > and to fix and settle thu costs, fees and charges which shall or may be bad, taken or paid in ull such cuses by or to attornies, solicitors, counsels, officers of courts, whether for the officer or for the Crown, as a fee for the fee fund or otherwise, sheriffs, assignees, or other persons whom it may be necessary to provide for. OENBnAL PROVISIONS. ^ 13. In all cases of sales Oi' merchandize to a trader in Lower Kiehts of lui- Canada subsequently becoming insolvent, the exercise of the j}",. (,^u"(tme"'/r" ■rights and privileges conferred upon the unpaid vendor by the ^^""''^•'■ostrictod one hundred and seventy-sixth and one hundred and seventy- seventh articles of the Cow/ume (ic Pi/rts, is hereby restricted to a period of Qfteen days from the delivery of such merchandise ; }„"' ' 2. In Lower Canada, every trader who marries, having pre- In L. C. mar- viously executed a contract of marriage by which he gi.es or of f riders to be promises to ^ive, or to pay, or cause to be paid to his wife, any registered with- property or effects, or any sum of money, shall cause such con- riod. tract of marriage to be enregi^tered in the registration division in which he has his place of business, within thirty days from thr execution thereof: and every trader already married, having such marriage contract with his wife, shall enregister the same as aforesaid, if it be not there already enregistered, within three months from the passing of this Act ; and every person not a trader, but hereaft:.r becoming a trader, and having such a con- tract of marriage with I^is wife, shall cause such contract to be enregistered as aforesaid (if it be not previously there enregis- tered), within thirty days from becoming such trader ; and in default of such registration the wife shall not be permitted to Provision in do- avail herself of its provisions in any claim upon the estate of J,g^gt°J^yQn' such insolvent for any advantage conferred upon or promised to her by its terms ; nor shall slie be deprived by reason of its pro- 174 ; 1 b'i! visions of any advantage or right upon the estate of her hus- band, to which, in thv absence of a* j such contract, she would have been entitled by law ; Judgment in 3. No judgment shall bfl rendered against any trader in Lower ration de /)/>/(«, Canada in any action against him by Lis wife en separation de onlvon^ceitaJn ^^^^^ ^^ ^'^ ^^P"*""'*"" '^'^ corpa et de biens, unless the institution conditions. of -^uch action is advertised continuously for one month iu the Canada Gazette, and in two newspapers published in or nearest io the place of residence of such trader, one in French, the other in English ; nor unless suc'j action be brought in the district within which the defendant has his domicile ; and any creditor Creditors may of the defendant in any such suit may intervene therein for the mtervone. . ..,-,,, .,. purpose of examining such debtor respecting his es>tate and effects, without becoming liable for any costs either to the plaintiff or to the defendant, and may also intervene therein, and oppose the demand of tlie plaintifiF, or subsequently contest tlie validity of any judgment rendered therein, subject to the ordinary rule as to costs; Interpretation. 4. The words " befoi? notaries " shall mean executed in notarial form according to the law of Lower Canada ; tiie words rios""*™ °°**'"the judge" shall, in Lower Oanada, signify a judge of the Superior Court for Lower Canada, having jurisdiction at the "Judge." domicile of the insolvent; and in Upper Canada a judge of the ' County Court of the county or union of counties in which the "Court." pri)ceediHgs are carried on, and the words " the Court " shall, in Lower Canada, signify the said Superior C'^urt, and in Upper Canada the County Court, unless it is otherwise expressed or unless the context plainly requires a different construction : but the twenty-fouth and twenty-fifth sections of the seventy- Certain provi- eighth chapter of the Consolidated Statutes for Lower Canada, sions f'>.inply. " Assignee." " Day." " Creditor," including subsection number two of the said twenty-fifth section shall apply in Lower Canada to the proceedings under this Act; 5. The word " Assiignee " shall mean the ofHcial assignee ap- pointed in proceedings for compulsory liquidation as well as th3 assignee appointed under a deed of voluntary assignment ; the w )rd " day ' sLall mean a juridcial day ; the word •• Creditor " shall be held to mean every person to whom the insolvent is liable, whether primarily or secondarilr, and wliether as princi- ')iil or surety ; but no debt Suall be doubly represented or ranked for, either in the computation for ascertaining the numbers and 175 proportion of creditors, or in the allotment or payment of divi- dends ; the word " coUocnted" shall mean ranked or placed in " Collocated." tue dividend sheet for some dividend or sum of money ; and all the provisions of this Act respecting traders, shall bo held to apply equally to unincorporated trading companies and co-part- Application of nerships; and the chief office or place of business of such unin- nies, &c. corporat?d trading companies and co-partnerships shall be their domicile for the purposes of this Act ; 0. Every assignee to whom an assignment is made under this Apsignocs to ho 1 , , a. . , . i 1 3 ..1 • • aj^outs witliin Act, and every orhcial assignee ap o'ated under the provisions y,^ memning of of this Act, is an agent within ihe meaning of the fortv-third, ^Jie Couh. Stat. > o (9.1 Canada, cap. 92, forty-fourth, forty-sixth, forty-eigh';h and forty-ninth sections of hoc. 43, &c. the ninety-second chapter of the Consolidated Statutes of Cana- da ; and every provision of this Act, or resolution of the credi- tors, relating to the duties of an assignee or official assignee, shall be hold to be direction in writing, within the meaning of the said forty-third section of the said chapter ; and in an in- dictment against an assignee or official assignee under any of the said sections, the right of property in any monies, secniity) matter, or thing, may bo laid in " the creditors of the insolvent (naming him), under the Insolvent Act of 18(J4," or in the name of any ,*s3ignee subsequently appointed, in his quality as such aisignee ; 7. The deed of assignment, or an authentic copy thereof, or Deed of ossign- a duly authenticated copy of the order of the judge ai)pointing^;",",^S'^^(-g*^yi^ an official assignee, or ii duly certified extract from the minutes tl''"co. of a meeting of creditors, act/urding to the mode in which the assignee or official assignee is alleged to be appointed, shall be priind facie evidence in all courts, whether civil or criminiil, of such appointment, and of the regularity of all proceedings at the time thereof antecedent thereto ; 8. One per centum upon all moneys proceeding from the sale l*''r contage for . . J ii . • i-i.! . A i f • liiiildiiig and by an assignee, under the provisions of this Act, of any immove- ,iury Fund in •ble proper;y in Lower Canada, shall be retained by the assignee ^- ^• out of such moneys, and shall by such assignee be paid over to the sheriff of the distric , or of either of the counties of Gasp^ or Bonaventure, as the case may be, within whiah the immoveable property sold shall be situate, to form part of the building and jury fund of such district or county; 9. The Governor in Council shall have all the powers with rower to impose respect to imposing a tax or duty upon proceedings under this cccdings in £!c! 176 Short title. Act, which are conferred tipoa the Governor in Council by the thirty-second and thirty-third sections of the one hundred and ninth chapter of the Consolidated Statutes for Lower Canada, and by the Act intituled : ^n Act to make provision for the erec- tion or repair of Court Houses and Gaols at certain places in Lower Canada, (12 Vic, cap. 11 .) 13. This Act shall be called and known as " The Insolvent Act of 1864," and shall come into force and take effect on and after the first day of September next. > I i 1 1 FORM A.» Insolvent Act op 1864. The creditors of tiie undersigned are notified to meet at la on the th day of at (eight) o'clock for the purpose of receiving statements of his affairs, and of naming an assignee to whom he may make an assignment under the above Act. (Domicile of debtor, and date.) (Signature.) (The following is to be added to the notices sent by post.) The creditors holding direct claims and indirect claims, matur- ing before the meeting, for one hundred dollars each and upwards, are as follows : (names of creditors and amount due) and the aggregate of claims under one hundred dollars is $ (Domicile of debtor, and dale,) (Signature.) • The Amendment Act, now before the House, that the following forms pointed ou.. in the footnotes, be substituted for the forms appended to the Act now in force, until the said Amendment Act become law, the latter alone must be used. Insolvent Act of 1864. xhe creditors of the undersigned are notified to meet at f on , the th day of o'clock , to receive statements of his affairs, and to name an assignee. (Domicile of debtor and dale.) (Signature). The foUowinsc is to be added to the notices sent by po/>t : The creditors holding direct claims ; nd indirect claims, maturing b the meeting, for one hundred dolliirseach and upwards, are as folio (names of creditors anl amounts due) and the aggregate of cluinis und one hundred dollars, is $ . (Domicile of debtor and date). (Signature). FORM B. Insolvent Act of 1864. la the matter of A. B., an insolvent. Schedule of Creditors. 1. Direct Liabilities. • ' Name, Residence. Nature of Debt. Amount. 2. Indirect liabilities, maturing before the day fixed for the first meeting of creditors. Name. Residence. Nature of Debt. Amount. 3. Indirect liabilities, maturing after the day fixed for the first meeting of creditors. Name. Residence. Nature of Debt. Amount. 4. Negotiable paper, the holders of which are unknown. Date. Name. of Maker. Names liable to Insolvent. When due. Amount. Total. 178 Provinob OP Canada, > ^.rfi>..i ^ District {or County) > Insolvent Aot op 1864. I, A. B., the above named insolvent, being duly sworn, depose and say : 1. That to the best of my knowledge and belief, aad a«cording to my books, the above schedule contains a true and correct list of my liabil- ities, accorJing to its purport, and that each of such liabilities is cor- rectly classified therein. 2. That a.l of the above-mentioned liabilities are honestly due by me and that none of them were created or have been increased with thd intention of giving to thecreditorthereof any advantage either in vo.ting at meetings of creditors, or in ranking on my estate. And I have signed. Sworn before me at this day o^ 186 . ' m. ' m m&^ mi of the of the second part, FORM C. Insolvent Act op 1864. This assignment made between first part, and witnesses, (or) On this day of before the undersigned not-ries came and appeared of the first part, and ' of the second part, which said parties declared to us Notaries. That under the provisions of " The Insolvent Act of 1864 " the said party of the first part, being insolvent, has voluntarily assigned and hereby does voluntarily assign to the said party of the second part, accepting thereof as assignee under the said Act, and for the purposes' therein provided, all his estate and effects, real and personal, of every nature and kind whatsoever. To have and to hold to the party of the second part as assignee for the purposes and under the Act aforesaid. And a duplicate of the list of creditors exhibited at the first meeting of his creditors, by the said party of the first part, is heieto annexed. In witness whereof, &c. Done and passed, &c. or : In the matter of 179 FORM D. Insolvbmt Act of 1864. A. B. (or A. B. & Co.) an Insolvent. The creditors of the insolvent arc notified that he has made an assign- ment of his estate and effects, under the above Act, to me, the under, signed assignee, and they are required to furnish me, within two months from this date, with their claims, specifying the security they hold, if any, and the value of it ; and if none, stating the fact ; the whole at- tested under oath, with the vouchers in support of such claims. (Place date) (Signature ofJssignee.) To (name of Insolvent.) FORM E. Insolvent Act op 1864. residence and description You are hereby required to malce an assignment of your estate and effects under the above Act, for the benefit of your creditors. Place date (Signature of creditor.) Pkovincb of Canada, District op FORM F. Insolvent Act op 1864. A. B- -, (name, residence and description.) Plaintiir. vs. C. D— — — , (name, residence and desrf'^tion.) Defendant. I, A. B , (name, residence and description) being duly sworn, depose and say: 1. I am the plaintiff in this cause (or one of ike plaintiffs, or the clerk, or the agent of the plaintiff in this cause duly authorized for the purposes herettf i 180 i4 2. The defendant is indebted to tie plaintiff (or as the case may be) in the sum of dollars currency for, (^stale concisely amd clearly tht nature of the debt) ; 3. To the bes!: of my knowledge and belief the defendant is insolvent within the moaning of the Insolvent Act of 1864, and baa rendered him- self liable tc have his estate placed in compulsory liquidation under the above mentioned Act ; and my reasons for so believing are as follows : (state concisely the facts relied upon as rendering the debtor insoloent^ and as subjecting /us estate to be placed in compulsory liquidation.) And I have signed ; (or I declare that I cannot sign,) this day of 186 . and if-the deponent cannot sign, add — the foregoing affidavit having been first read over by me to the deponent. FORM G. it ' Insolvent Act op 1864. Pbovinob of 5 VIOTOKIA, by the Grace of God, of the United Canada, > Kingdom of Great Britain and Ireland, Queen, De- District of Quebec, } fender of the Faith, To the Sheriff of our District (or County) of No. Gbektinq : Wb command you at the instance of to attach the estate and effects, moneys and securities for moneys, Touchers, and all the office and business papers and documents of every kind and nature whatsoever of and belonging to if the same shall be found in (name of district or other territorial juris- diction) and the same so attached, safely to hold, keep and detain in your charge and custody, until the attachment thereof, which shall be so made under and by virtue of this Writ, shall be determined in dae course of Law. We command yon also to summon the said to be and appear before Us, in our Court for at in the County (or District) of on the day of then and there to answer the said 181 of the plaint contained in the declaration hereto annexed, and further to do and receive what, in our said Court, before Us, in this behalf shall be considered ; and in what manner you shall have executed this Writ, then and there certify unto us, with your doings thereon, and every of them, and have you then and there also this Writ. In Witness Whkubop, Wb have caused the Seal of our said Court to be hereunto afiSxed, at aforesaid *^'^ day of ■ in the year of our Lord, one thousand eight hundred and sixty- in the FORM R* Insolvent Act of 1864. A. B., Plff. CD., Deft. A writ of attachment has issued in this cause, of which all persons interested in the estate of the defendant, and all persons having in their possession, custody, or power, any portion of the assets of the defend- ant, or who are in any way indebted to him, are required to take notice. (Place. Date) (Signature) SheriflF. '■ll !: FORM I. Insolvent Act of 1864. I swear that I (or, the firm of which lama member, or A. £. of of whom I am the duly authorized agent in this behalf) am (or is) a creditor of the insolvent, and that I will give my advice in the appoint- ment of an assignee to his estate, honestly and faithfully, and in the interest of his creditors generally. * FORM E.—(To be substituted). Insolvent Act of 1864. A. B., PlaintiflF. C. D., Defendant. A Writ of Attachment has issued in this cause. (Place. Date). (Signature.) Sheriff. 'tl; . IN ill: 182 I FORM K* '' Imsoltbnt Aot or 1864. In the matter of A. B. (or A. B. k Co.), . * an insolvent. The creditors of the insolvent are notified that I the undersigned (name and residence) have been appointed official assignee of his estate and effects : and they are required to produce before me, within two months from this date, their claims upon the said estate under oath, specifying the security they hold, if any, and the value of it ; and if none, stating the fact, with vouchers in support of such claims. (Place. Date.) (Signature). Official Assignee. FORM L. Insolvent Act op 1864. In the matter of A. B., an insolvent. In consideration of the sum of$ whereof quit ; 0. D., assignee of the insolvent, in that capacity hereby sells and assigns to E. F. accepting thereof, all claim by the insolvent against G. H. of (describing thu debtor) with the evidences of debt and securities thereto appertaining, but without any warranty of any kind or nature whatso- ever. M J >>i 0. D., Assignee. E. F. FORM M. This deed, made under the provisions of the Insolvent Act of 1864, the day of Ac. between A. B. of EC, m • FORM K.—(To be substituted.) Insolvent Act of 1864. In the matter of A. B., (or A. B. & Co.), an insolvent. The undersigned has been appointed assignee in this matter, and requires claims to be filed within two months from this date. (Place. Bate.) (Signature,) Assignee. :\ r 183 his capacity of assignee of the estate and effects of an insolvent, under a deed of assignment executed on the day of at in Canada, {or under an order of the judge made at on the day of ) of the one part, and 0. D., of &c., of the other part, witnesseth : That he, the said A. B., in his said capacity, hath caused the sale of the real estate hereinafter mentioned, to be advertised in the Canada Gazette from the day of , ■ to the day of inclusive, and hath adjudged and doth hereby grant, bargain, sell, and confirm the same, to wit; unto the eaid C. 0., his heirs and assigns for ever, all (m Upper Canada insert "the rights and interests of the insolvent in ") that certain lot of land, &c., (insert here a description of the property sold) : To have and to hold the same, with the appurtenances thereof, unto the said G. D., his heirs and assi;< ns for ever. The said sale is so made for and in consideration of the sum of $ in hand paid by the said 0. D., to the said A. B., the receipt whereof is hereby acknowledged (or of which the said 0. D. hath paid to the said A. B. the sum of the receipt whereof is hereby acknowledged) and the balance or sum of $ the said C. D. hereby promises to pay the said A. B., in his said capacity, as follows, to wit— (here state the terms of payment) — the whole with interest payable and, as security for the payments so to be made, the said 0. D. hereby specially mortgages and hypothe- cates to and in favour of the said A. B., in his said capacity, the lot of land and premises hereby sold. In witness, Signed, sealed, and delivered in the presence of E.F. A.B. CD. [L.S.]. [L.S.], FORM N* INSOLVENT AOT OF 1864. In the matter of A. B. (or A. B. & Co.,) an insolvent. The creditors of the insolvent are notified that a dividend sheet has •FOBM in.— (To be substituted.) iNfiOLVBNT AOT OF 1864. In the matter of A. B. (or A. B. & Co.,) an insolvent A dividend sheet has been prepared, subject to objection until the day of , (Date). Assignee. 184 ■if.''<;i been prepared, and will remain open to inspection and objection at my office (describing it) drery day between tlie hours of ten and fire o'clock until the day of after which the dividends therein allotted will be paid. ;te- FORM 0.» Inbolvbnt Act of 1864. DA I of S In the (name of Court) In the matter of A. B. (or Protikcb of Canada District (or County A. B. & Go.), an insolvent. Notice is hereby given that the undersigned has filed in the office of this Court, a consent by his creditors to his discharge (or a deed of com- position and discharge, executed by his creditors), and that on the day of next, at ten of the clock in the forenoon, or as soon as counsel can be heard, he will apply to the said Court (or to the judge of the said Court, as the case may be) for a confirmation of the discharge thereby effected in his favor, under the said Act. (Place. Date.) ' , (Signature of insolvent, or of his attorney ad litem). FORM P. Insolvrnt Act of 1864. Pbovinob of Canada, ) District (or County) of > In the (name of Court) In the matter of A. B., an insolvent. Notice is hereby given that the undersigned creditor of the insolvent has required him to file in the office of this Court, the consent of his • FORM 0.— (To be substituted). Insolvent Act of 1864. Province of Canada } District (or County, of > In the (name of Court). In the matter of A. B. (or A. B. & Co.), an insolvent. The undersigned has filed in the office of this Court, a consent by bis creditors to his discharge (or a deed of composition and discharge, ex- ecuted by his creditors), and on the day of next, at ten of the clock in the forenoon, or as soon as counsel can be heard, he will apply to the said Court (or to the judge of the said Court as the case may be) for a confirmation thereof. (Place. Date). (Signature of insolvent, or of his attorney ad litem). 185 • creditors, or the deed of compoeiti'jn and discbatge executed by them under which he claims to be discharged under the said Act ; and that on ' the day of next, at ten of the clock in the forenoon, or as soon as counsel can be heard, the undersigned will apply to the said Court (or to the Judge of the said Gourt, as the case may be) for the annulling of such discharge. {Place date) (Signature of insolvent, or of his attorney ad litem.) Pbovincb of Canada, District {or County) of FORM Q.» Insoltbnt Act of 1864. , In the (name of Court) In the matter of A. B. (or A. B. & Co., an insolvent. Notice is hereby given, that on the day of next, at ten of the clock in the forenoon, or as soon as counsel can be heard, the undersigned will apr'y to the said Court, (or the judge of the said Court, as the case may Ot ' for a discharge under the said Act. (Place. Date.) (Signature of the insolvent, or his attorney ad litem). I, C. D., of depose and say : FORM R. Insolvent Act op 1864. In the matter of A. B., ..a insolvent, and 0. D., Claimant. , being duly sworn in *FORM Q.— (To be substituted). Insolvent Act of 1864. SS^V/co^rtif \ . ^-^^^^ inane Of Court, In the matter of A. B., (or A. B. & Co.)> an insolvent. In the day of next, at ten of the clock in the forenoon, or as soon as counsel can be heard, the under- signed will apply to the said Court (or the Judge of the said Court, as the case may be) for a discharge under the said Act. (Place. Bate.) Signature of the insolvent, or hia attorney ad litem. ,;iil.,: A1^. IMAGE EVALUATION TEST TARGET (MT-S) /. ^ .<^^dp. ^- 1.0 I.I l!|-|l!M :^ lii ill M 6" L25 III U 116 Photographic Sdences Corporation 23 WCST MAIN STREET WEBSTER, N.Y. 14580 (716) 872-4503 •1? JV ,V <^ [V » o^ ^ ^0 .^^ .V ^ 4^ ->^;i Z/a 186 1. I am the claimant (or ike duly authorized agent of the claimant in this behalf, and have a personal knowledge of the matter hereinafter deposed to, or o member of the firm of claimanls in the matter, and the said firm is composed of myself and ofE. F. of > 2. The insolvent is indebted to me (or to the claimant) in the sum of dollars, for (here state the nature and particu- lara of the claim, for which purpose reference may also be made to accounts or documents annexed.) 3. I (or the claimant) hold no security for the claim, (or I or the claim- ant holds the following, and no other security for the claim, namely ; (state the particulars of the security.) To the best of my knowledge and belief, the security is of the value of dollars. Sworn befo^M. at | And I have »ig.ed. t ^^■ EULES AND OEDERS , AND TARIFF OF FEES. Madb bt the Judoes of the Superior Court fob Lower Canada, under and by vlrtub of the statute 27 and 28 vict., cap. 17, INTITULED : " An Act respeotino Insolvency." 1. There shall be assigned in the Court House of each Judicial District at which the sittings of the Superior Court are held, two rooms for matters in Insolvency, one in which the sittings of the Judge shall be held, and the other for the OfSce of the Clerk in Insolvency. • 2. All judicial proceedings in Insolvency shall be had and conducted in the said Court Room alone, and not elsewhere ; and the sittings of the Judge shall commence at II A.M.. or at such other hour as the Judges or Judge in each District shall hereafter appoint, and shall continue till the business of the day shall be completed, or until the Judge shall adjourn the same. 3. The Clerk's Office shall be kept open every juridical day, from 9 A.M. to 4 P.M., and shall be attended during that time by a Clerk appointed by the District Prothonotary, and who shall be known as " The Clerk in Insolvency." 4. To ensure regularity of proceedings at the sittings of the Judges, the business shall be conducted in the following order : 1. Meetings of Creditors ; 2. Motions ; 3. Rules Nisi ; 4. Petitions, except as hereinafter mentioned ; 6. Proceedings on applications for discharge of Insolvents r 6. Proceedings on applications for discharge of Assignee ; 7. Appeals. 5. Proceedings before a Judge* or Court may be conducted by the Insolvent himself, or by any party having interest therein, or by their Attorney ad litem, admitted to practice in Lower Canada, and by no other person. W I ilMl; \ ill' 188 B« 1 6. All Motions, Petitions and Claims, and all papers in the nature of pleadings in Insolvency shall be intituled : In Insolvency, for the District of In the matter of Insolvent, and Claimant, Petitioner or Applicant, as the case may be, and they must be plainly written without interlineations or abbreviations of words ; and the object or purpose thereof shall be plainly and concisely stated. They shall also be subscribed by the Petitioner, Applicant or Claimant, or by his Attorney ad litem for him. And" they shall be subject to the ordinary rules of procedure cf the Superior Court in respect of similar papers, aa regards the names and designations of the parties, and the mode in which they shall be docketed and filed. 7. No paper of any description shall be received or filed in any case, unless the same shall be properly numbered and intituled in the case or proceeding to which it may refar or belong ; and be also endorsed with the general description thereof, and with the name of the party or his Attorney at? litem filing the same. 8. In all appealable matter in dispute, the pretensic:is of the parties shall be set forth in writing, in a clear, precise and intelligible manner, and the notes of the verbal evidence taken before the Assignee shall be plainly written, shall be signed by the witness, if he can write and sign his name, and shall be certified by the Assignee as having been sworn before him. And in the event of an appeal, the Assignee shall make and certify a transcript from his Register, of the proceedings before him in the matter appealed from. And he shall also make and certify a list of the documents composing such proceedings and appertaining thereto, and shall annex such transcript and list to such documents with a strong paper or parchment cover, before producing the record before the Judge, as required by the said Act. 9. All proceedings before a Judge or Court shall be entered daily, in order of date, in a docket of proceedings, to be kept by the Clerk for each case ; and shall, from time to time, and until the close of the Estate, be fairly transcribed in Registers suitable therefor, which shall be kept and preserved by the Prothonotary, in the same manner as the Registers of proceedings of the Superior Court. 10. No Demand, Petition or Application of which notice is required to be given, either by the provisions of the said Aci or by an order of the Judge or Court, shall be heard until after such notice shall have been given, and due return thereof made and filed in the case. 11. Except when otherwise limited and provided by the said Act, and upon good cause shewn, the time for proceeding after notice 189 thereof has been given, may be enlarged by the Judge or Court when- ever the rights of parties interested may seem to require it for the purposes of justice. 12. Whenever a particular number of drfys is prescribed for the doing of an Act in Insolvency, the first and last day shall not be computed, nor any fractions of a day allowed ; and when the last day shall fall upon a Sunday or Holiday, the time shall be enlarged to the next juridical day. 13. All affidavits of indebtedness made by a creditor, or by the clerk or agent of such creditor, shall set forth the particulars and nature of the debt, with the same degree of certainty and precisioa as is required in affidavits to hold to bail in civil process in the Courts of Lower Canada. 14. All Writs of Attachment issued under the said Act, shall, as issued, be numbered and entered successively by the Clerk in a Book, to which there shall be an Index, and to which access for examination or extract shall be had gratis, at all times during office hours. 15. Every such Writ shall describe the parties thereto, in the same manner as they are described in the said affidavits of debt ; and the Declaration accompanying the said Writ, shall be similar in its form to the Declarations required to be filed in ordinary suits in the Superior Court. 16. No such Writ shall issue until after the affidavit of debt upon which the Writ is founded, shall have been duly filed in the Clerk's Office. 17. All services of Writs, Rules, Notices, Warrants and proceedings in Lower Canada, except otherwise specially prescribed by the said Act, may be made bj' a Bailiff of the Superior or Circuit CoVirt, whose certificates of service shall be in the form required for service of process in the said Courts ; or by any literate person, who shall certify his service oy his affidavit ; and in either case, the manner, place and time of such service shall be described in words, and also the distance from the place of service to the place of proceeding. 18. All services of Writs, Rules, Notices, Warrants or other proceed- ings, shall be made between the hours of 8 A.M. and 1 P.M., unless otherwise directed by a Judge or Court upon good cause shewn. 19. Writs of Attachment need not be called in open Court, but shall be returned on the return day into the Clerk's Office, and shall be there filed for proceedings thereon, as may be advised or directed. Mil t if! m: ■ if ill!:' i'i:-' i: ■!!li t lilii ii!;!' 190 20. Every day, except Sundays and Holidays, shall be a juridical day for the return of said WritE, and for judicial and Court proceedings. 21. The Sheriff to whom the Writ of Attachment shall be directed, shall not be required to make bny detailed Inventory or prods-verbal of the effects or articles by him attached under such Writ ; but a full and complete Inventory of the Insolvent's Estate, so attached by the Sheriff shall be made by the Assignee or person who shall be placed in pos- session thereof as guardian under such Writ ; by sorting and numbering the books of account, papers, documents and vouchers of the Estate, and entering the same, with the other assets and effects thereof, in detail, in a book for the same, which shall be called " The Inventory of the Estate of ," and which shall be filed by the said Assignee or person in possession, on the return day of the said Writ, as required by the said Act ; and the said Inventory shall be open for examination or extract at all times during office hours, gratis. 22. Immediately upon the execution of the voluntary deed or instru- ment of assignment to the Assignee, he shall give notice thereof by advertisement in the form D of the said Act, requiring, by such notice, all Creditors of the Insolvent to produce before him, within two mouths from the date thereof, their claims, specifying the security therefor, with the vouchers in support of such claims, as required by such notice. 23. The Clerk shall prepare for the Judge or Court, a list of mattei:s pending, or ready and fixed for proceeding on each day, following therein the order of procedui;0 prescribed by the 4th Rule, which list shall be communicated to the Judge on the previous day. 24. The record of proceedings in each case shall, at all times during office hours, be accessible, at the Clerk's Office, to Creditors and others in interest in such cases, for examination or extract therefrom, gratis. And in like manner the minutes of meetings of Creditors, and the registers of proceedings, tog?ther with the claims made and the docu- ments in possession of the Assignee, shall also be accessible to Creditors and others interested in the case, at convenient hours, daily, to be appointed by the said Aspignee. 25. The Absignee shall, from time to time, under or^^er of date, and within twenty-four hours after the proceedings had before him, file in the said Clerk's Office, a clear copy under his signature as such Assignee, of such proceedings, together with a copy of the several Newspapers and Official Gazette, in which he shall have caused notices of such proceedings to be advertised, which said copy and newspapers shall form part of the record of proceedings of the particular case. 191 26. The Assignee shall, on the third juridical day of each month, after he shall have commenced to deposit Estate moneys in a Bank or Bank Agency, as required by the said Act, file of record in the case an account of the Estate, shewing the balance thereof in bis hands, or under his control, made up to the last day of the preceding month. And no moneys so deposited, shall be withdrawn without a special order of the Court, entered in the docket of proceedings in the case, or upon a dividend sheet prepared and notified, as required by the said Act, or unless otherwise ordered by the Creditors, under the powers conferred upon them by the said Act. 27. Every want of compliance with these rules in proceedings shall be a peine de nullitS, and the proceeding in which the irregularity has occurred if objected to, on the ground of such want of compliance, shall be null and have no effect. MoNTRBAi., 10th October, 1864. (Signed) Edward Bowbn, Ch. J. S. 0. J. Smith, J. S. 0. E. Short, J. S. 0. W. Badolky, J. S. 0. J. T. McCoRD, J. S. C. A. Lapontaine, J. S, 0. A. POLBTTB, J. S. G. J. A. Bbrthglot, J. S. G. . S. 0. Meiks, a. J. S. 0. J. T. Taohbrbau, a. J. S. G. - If. 5 , ''J- ).■'*> '..>'fi- y;-fHi '-.•»•'■ f I, •■» TARIFF OF FEES IN INSOLVENCY. IN PROCEEDINGS FOB OOMPCIiSORT LIQUIDATION. ON BEHALF OF PLAINTIFF^ IF NOT contested: $ cts. To the Protbonotary for Writ of Attachment , 1 80 Do Copy of Writ 30 Sheriff for Warrant 2 50 Copies of Warrant, each 50 All proceedings by the Sheriff or his Agent or Messenger in the seizure and return, exclusive of Mileage 2 00 Guardian, per day 1 00 Do Making up Inventory and Statements, to be subject to taxation by the Judge : , To the Protbonotary on return of Writ 5 00 Crier's Fee on Return 80 To the Protbonotary for copy of order for meeting 50 To the Protbonotary for meeting 1 00 To the Protbonotary for each copy of judgment appointing Offi- cial Assignee 60 Attorney's Fee for conducting proceedings to appointment of Offi- cial Assignee 30 OG IF contested, ADDITIONAL FEES : To the Protbonotary on Inscription 2 00 To the Protbonotary on every Witness examined for Plaintiff, exceeding two in number 30 And for each subsequent deposition exceeding 400 words in length, for every 100 words , . . . 10 Attorney's Fee, additional . 20 00 Counsel Fee at Enqu^te, additional 10 00 ON BEHALF OF DEFENDANT, IF NOT CONTESTED : Attorney's Fee for appearance 10 00 ■■"*■■ - ' ' ) 193 $Ct8. ^ IF CONTEBTHD, ADDITIONAL FEB8 : ' - ■ '>, , To the Protbopotary on filing Petition in contestation 6 00 On every Witness examined for Defendant, exceeding two in number 30 And for each subsequent deposition exceeding 400 words in length, for every 100 words 10 Attorney's Pee, additional 20 00 Counsel Fee at Enqudte 10 00 •.■*-.. 1 ON VOLUNTARY ASSIGNMENTS : ■ ', ^ •- - • - « 1 ■ To the Prothonotary for filing and entering Deed 2 00 ON PKTITIONS, OTHER THAN PETITIONS IN APPEAL, IN CONTESTATION OP PROCBEDINaS FOR COMPULSORY LIQUIDATION. ,. ,. ,,,.,,.,.,,. To the Petitioner's Attorney on every Petition, not contested. . . 5 00 If contested, without Enqu^te 10 00 If contested, with Enqu&te 15 OO To the Respondent's Attorney — If contested, without EnquSte 8 00 If contested, with Enqudte 12 00 To the Prothonotary — Filing Petition 2 00 Copy of Order 60 If contested, on filing Contestation 2 00 If there be an Enqu^te, for every deposition 30 For all words over 400 in Any deposition, per 100 0. 10 ON PETITIONS IN APPEAL TO A JUDGE : To the Assignee for transcript of record and making up record and attendance before the Judge 5 00 To the Prothonotary — ...-.- Filing Petition 2 00 Remission of Record , 1 00 To the Attorney for the Petitioner— If not contested 10 00 If contested 20 00 To the Attorney for the Respondent 15 00 ' ON CLAIMS : To the Attorneys — For every chirographary claim, without security 1 00 i Hi!'! ml 'I I J 's4 < .1 194 For every chirograpbary claim, with security 2 00 For every hypothecary claim, if not contested 6 00 On every claim contested, without Enqudte — Additional— To Claimant's Attorney 10 00 To Contestant's Attorney 10 00 With Enqufite— To Claimant'!) Attorney 26 00 To Contestant's Attorney 20 00 To the Assignee — • • ■ On every chirographary claim and hypothecary claim, not contested 10 For every witness examined on the contestation of a 'claim. ... 25 On inscription of contestation for argument ' 2 00 On Contestations of Dividend Sheets — The same fees and disbursements to Counsel and to Assignee as on Contestation of Claim. On application for discharge by the Court, for confirmation of discbarge, or for annulling discharge : , , To the Applicant's Attorney — If not contested 16 00 If contested, without Enqu&te 26 00 If contested, with Eaqugte 35 00 To the Respondent's Attorney — If contested, without Enqudte 16 00 If contested, with Enqufite ; 25 00 To the Protbonotary — Filing Application 2 00 Every Deposition 30 All words ' over 400 in each Deposition, per 100 10 HISCRLIiANKOCS. To the Attorneys, Froth onotaries and Bailiffs, Fees and disburse- ments on all Rules, Motions, Copies of Rules, Judgments and Orders, Commissions rogatoires, and other incidental matters according to the same rates as are allowed by the present Tariff in first class actions in the Superior Court. GENERAL ORDER OF DEOEMBER, 1864, AND TARIFF OF FEES. For Insolvency proceedings in Upper Canada, promulgated by the Judges of the Superior Courts of Common Law, and of the Court of Chancery, under 27 and 28 Victoria, c. 1*1. ORDER. Whereas it is provided by the Insolvent Act of 1864, amongst other things, that the Judges of the Superior Courts of Common Law, and of the Court of Chancery in Upper Canada, or any of them of whom the Chief Justice of Upper Canada, or the Chancellor, or the Chief Justice of the Common Pleas, shall be one, shall have power to fix and settle the costs, fees, and charges which shail be had, taken, or paid, in all cases and proceedings under the said act, by or to attorneys, solicitors, counsel, officers of Courts, whether for the officers or for the Crown, as a fee for the fee fund, or otherwise, sheriffs, assignees, or other persons, whom it may be necessary to provide for ; And whereas the Chief Justice of Upper Canada, and the Judges of the Superior Courts of Common Law and Equity, at Toronto, have assumed the duty so imposed upon them ; In pursuance, therefore, of the power so contained in the Insolvent Act of 1864, the following table of costs has bten framed by the Chief Justice and Judges, and it is hereby declared, determined and adjudged that all and singular the costs and fees mentioned in the said table, and no other or greater, shall be allowed on taxation, or taken or received, by any counsel or attorney, sheriff or officer, respectively, for any services rendered under the said Insolvent Act of 1864. Toronto, December , 1864. TARIFF. Fees to solicitor or attorney, as between party and party, and also as between solicitor and client : Instructions for voluntary assignment by debtor, or for compul- sory liquidation, or for petition, where the 3tatute expressly requires a petition, or for brief, where matter is required to be •VS'>. I SA ■ I' m 196 arf^ucd by counsel, or is authorized by the judge to be argued by counsel, or for deeds, declarations, or proceedings on appeal $2 00 Drawing and engrossing petitions, deeds, affidavits, notices, adver- tisements, declarations, and all other necessary documents or papsrs wlien not otherwise expressly provided for, per folio of 100 words, or under 20 Making other copies when required ; 10 When more than five copies are required of any notice or other papv.", five only to be charged for, unless the notice or paper is printed, and in that case printer's bill to be allowed in lieu of copies, drawing schedule, list, or notice of liabilities, per folio, when the number of creditors thtrein does not exceed twenty 20 When the number of creditors therein exceeds twenty, then for every folio of 100 words over twenty 10 Every common affidavit of service of papers, including attendance SO Every common attendance 50 Every special attendance on judge 2 00 For every hour after the first 1 00 To be increased by the judge at his discretion. Every special attendance at meetings of creditors, or before assignee, acting as arbitrator 1 00 Fee on writ of attachment against estate and effects of insolvent, including attendance 2 00 Fees on rule of Court or order of judge 1 00 Fee on sub ad test, including attendance 1 00 Fee on sub duces tecum, including attendance 1 25 And, if above 4 folios, then for each additional folio, over such 4 folios 10 Fee on every other writ 1 00 Every necessary letter 50 Costs of preparing claim of creditors, and procuring same to be sworn to, and allowed at meeting of creditors, in ordinary cases, where no dispute 1 00 Costs of solicitor of petitioning creditor, for examining claims filed up to appointment uf assignee, for each claim so ex- amined t 5i/ Cost of assignee's solicitor for examining each claim required by assignee to be examined 60 Preparing for publication advertisements required by the statute, including copies and all attendances in relation thereto 1 00 197 20 1 00 5Vy 50 1 00 Prepnring, engrossing, and procuring execution of bonds or other instruments of security 2 00^ Mileage for tlie distance actually and necessarily travelled — per mile 10 Bill of Oosts, engrossing, Including copy for taxation, per folio.. 20 Gopy for the opposite party 50 Taxation of costs 60 No allowance to be made for unnecessary documents or papers, or for unnecessary matter in necessary documents or papers, or for unnecessary length of proceedings of any kind. In case of any proceedings not pro- vided for by this tariff, the charges to be the same, as for like proceed- ings, as in the turiflP of the Superior Courts. COUNSEL. Fee on arguments, examinations, and arlvising proceedings, to be allowed and fixed by the judge as shall appear to him proper under the circumstances of the case. FEE FUND. Every warrant issued against estate and effects of insolvent debtors $1 00 Every other warrant or writ 30 Every summary rule, order, or fiat 30 Every meeting of creditors before judge 60 If more than an hour 1 00 If more that one on same day, $2.00 to be apportioned amongst all. Every affidavit administered before judge 20 Every certificate of proceedings by judge of County Court for transmission to a Superior Court or a judge thereof 50 Every bankrupt's certificate 60 Every taxation of costs 16 FEES TO CLERK. Every writ, or rule, or order 50 Filling every affidavit or proceedic ; 10 Swearing affidavit 20 Copies of all proceedings of which copy bespoken or required, per folio of 100 words 10 Every certificate 30 Taxing costs 50 Taxing c^^^ts and giving allocatur 64 For every sitting under commission, per day 1 OO If more than one on same day, £2.00 to be apportioned amongst all. O 198 Fee for keeping record of proceedings in each case 1 00 For any list of debtors proved at firsu meeting, (if made) 50 For any list of debtors at st^oond meeting 5^ Any search 60 A general search relating to one bankruptcy, or the bankruptcy of one person or firm 50 SHERIFF. Same as on corresponding proceedings in Superior Courts. WITNESSES. Same as in Superior Courts. We cannot refrain from remarking the mod')ration of the tariff, no item exceeding $2.00, whilst that for Lower Canada presents an array of tolerably high figures, such as thirty and thirty-fire dollars. Is it to this cause that the upper section of the province owes its superiority — in the number of its published failures ? This state of things may account for the humble fees provided for by this ungrateful tariff. Some com- pensation, however, may be found in the fact that this law, yielding so modest dir ^ profits to the members of the bar, affords them sanctuary iu cases u. distress ; a refuge denied to their brethren of the inferior section. INDEX. JlBBOAii— property, passes to assignee, and how 34 effects of assignment or of appointment of official assignee. 34 remammg, with intent to defraud, an act of bankruptcy, il ' ABScoNDiKO-or^being about to abscond renders estate hable to attach- ABSKNTKK-remaining out of the Province renders .estate liable to attachment, 41, Account— by the insolvent, 16, 18, books of; to be produced by insolvent, * 8. '. by the assignee, 63. failure to keep cash book, and others, ground of opposition to dis- charge, 93, 132. provisions of the act respecting books of, discussed. 118 119 Act respecting iNsotVENCY-Preliminary remarks. 5-7 ' title of; 8. did not abrogate existing laws, 23, 43, 44. provisions of, as to writ of attachment, discussed, 43. 44 (( (I It (I It 69, 70. 95, 96. 108, 119. 122—125. 127, 129. sale of immovables, discharge of the insolvent, fraud, partnerships, married women, Conclusion, 133, etc. Ac OF BANKB0PTcr-(5ee Attachment, Compclsout Liquidation ) AD.ouBNMENT-of examination of insolvent sine die, effect oJ 9" of meeting of creditors, 21, 101 ' AcTiON-petitory. to be taken by and against assignee, 28. so also en dtdaration d'hypothiqw', 28. revocatory, in what cases available, 115. en declaration defraude, 117. ADVEBTISBMBNT-how tO be published, 101. for meeting of creditors, 60, 101. to state object of meetiag, 60, loi. ,. for preliminary meeting of creditors, 16. of assignment by assignee, 69. of Sheriff on attachment, 48. 200 INDEX. M Advebtiskhknt — of petition to suspend proceedings, 53. > to appoint official assignee, 54. by official assignee on appointment, 69. hj assignee on petitioning for discharge, C3. for the public examination of insolvent, 61. of sale of doubtful debts by assignee, 67. of sale of lease, 68. of sale of lands, 88. of meeting cf creditors to appoint new assignee, 62. of declaration of dividends, 76. of petition of insolvent for balance of estate, 79, , of a deed of comporition, 90. for a confirmation of discbarge, 92. of petition of insolvent for discbarge, 94. Affidavit — for a writ of attachment, 47. may be made by an agent, 47. to specify grounds, 47. ^ before whom sworn to, 47. Aghnt— assignee to be, within the 0. S. of C, ch. 92, 59. may represent principal at meeting of creditors, 16. . , may make affidavit for writ of attachment, 47. may swear affidavit to support claim, 102. Allowamci: — to insolvent, 76, 89. for attending meetings of creditors, 82. of appeal, 98. to witnesses, 103. AuKNDHBNi — proceedings in bankruptcy may be amended, 51, 172. Amount — See Creditors. ) Annulling Discharge — (See Discharge.) Appeal— to the Judge from assignee's award, 97. to the Court of Review, 97. to the Court of Queen's Bench, 97. pending, contested dividends to be reserved, 79. ncae from a Judge's order rendered p"imarily, 78, 99. Appointment op Assignee — how proved, 104. Arrears OF Salary — (&Ve Clerks). Assets — insolvent need not show, 15. realization of, 67, 70. Assignee — In case of voluntai-y assignment, how appointed, 18. who may be, 18. if none be appointed by creditors, insolvent may asgigu to the high- est one of them, or to the assignee of the Board of Trade, 21. also, if assignee chosen refuses to act, 21. INDEX. 201 ;■ AssiGNKE — If competent, irregularity or neglect, not to vitiate subse- quent appointment of, 24. official, in compulsory liquidation, how appointed, 54. , ' r official, named by the Board of Trade, 57. security to be given to the Board of Trade, 58. security required by the creditors, 58. meaning of the word "assignee," 174. nature of the office of, 58. subject to summary jurisdiction of Court, 59. performance of duties, may be enforced on summary petition, S9. subn'itted to criminal punishment for misconduct, 59. his powers, 59. vested with all the property of the insolvent, 27 — 33. articles exempt from seizure by statute excepted, 31. salary due to public officers does not pass to assignee, 32. nor property held for benefit of others or for specific purposes, 31. vested with r?operty held under condition that it shall be free from seizure, 32. ugh- 21. so also with property under seizure, 32. so with property abroad, 34. may revendicate in his own name property of insolvent, 28. vested with^all powers of insolvent, 28, 58. may sue in his own name, 59. may be sued even au p6titoire and en dicla'H'ation d'hypothkqm^ 28. may intervene in all pending cases, 59. may exercise all actions of insolvent against his co-partners, as in case of dissolution, 123. may interfere in actions brought by insolvent with relation to after- acquired property or contract, 30. his duties, 59. ' must deposit copy of deed of assignment in office of Oourt, 59. must give public notice of his appointment, 59. to call all meetings of creditors oo requisition of five creditors, 60. or of the Judge, on application, with notice to him, 60. or when he requires instructions from creditors, 60. state purposes of meeting, in notices calling it, 60. to attend all meetings of creditors and keep minutes of them, duly signed and certified, 60. to keep register of proceedings and of claims, 60. to obey all orders of creditors, passed at a meeting of creditors called for the purpose, 60. to deposit money in bank, 61. ■i.:!:ii:: 202 INDEX. Absionei — to call meeting of creditors for the public examination of. in* solvent, 61,82. to reduce in writing the answers then given by him and deposit them in Court, 61, 82. to wind up the estate by selling stocks and movables and collect- ing debts, 61. ^ to report to creditors upon uncollected debts, 62. pending notice of sale of doubtful debts, to keep at his office, for inspection, a list of debts to be sold, 62. Shall also give free access to documents relating thereto, 62. how to grant a biU of sale, 62. to report as to annual value of rent in certain cases, 68. may sell real estate, and how, 68. to give notice of sale to hypothecary creditors, 68. to receive oppositions to sale, and render an award on them, 69. must keep accounts of his doings, open for inspection, 60. must prepare dividend sheets, and when, TO. must reserve dividends upon conditional claims, 72. how to act in case of dower, 12, 73. may assume collateral security, and how, 73. to realize the same with ordinary diligence, 73. to reserve dividends to known creditors who have not filed claims,. 64, 65, 77. to notify them of such reservation, 63, 77. to insert reserved dividends in the final dividend, if creditors fail to file such claims, 65, 77. to have due regard to the rank and privilege of each creditor, 74. to give notice of dividend sheet by advertisement, 76. if dividends are objected to, how to proceed, 77. to hear and examine parties and witnesses according to the rules of evidence in force, 77. to take notes of evidence, and how, 77. to verify statements by books and accounts, 77. to make an award thereon, 77. may require supplementary oath from creditor, 66. to reserve dividends pending appeal, 79. to make transcript and list of documents with strong paper cover 97. to produce the same before Judge, and when, 97, 98, 160. to give notice of deposit of deed of composition, 90. +0 comply with its provisions, if no objection to it is filed, 90. if objected to, shall await its confirmation, 90. debt due by, not affected by discharge, 91. INDEX. 203 AssiONii — nor computed in ascertaiuing required proportion, 92, 102, 165. Such debt may rank, 91. ' may bring the revocatory action, 116. remuneration of, not to exceed fire per cent, unless agreed to, 62. death or removal of, 61. after death of, estate falls under the control of Judge, 62. removal of, by Judge 61, 62. , appointment of new assignee by Judge, 62. when may be removed by creditors, 62. appointment of new, by creditors, 62. new assignee to enforce security given by, removed, 69. after removal, remains subject to jurisdiction of court, till he has accounted, 62. final account and discharge by, 63. must prepare final account, after declaration of final dividend, 63. must Iceop this account open for ispection, 63. may thereupon apply for discharge, 63. must give previous notice of this application, and how, 63. must produce Bank certificate of deposits, 63. judge may grant discharge of, absolutely or conditionally, 63. AssiONHBNT. — who can make, and in what cases, 14. trader making, must be unable to meet his engagements, 14. meaning of the word " insolvency," 14. voluntary, how made, 14 — 27. notice of, preliminary meeting of creditors for, how given, 15. provisions of the Act relating to delays to call a meeting, dis- cussed, 15. preliminary meeting, how and where held, 16. a chairman or secretary may be appointed, 17, 18. statements and schedules to be produced by insolvent, 18. insolvent to produce also books of account, if so required, 18. assignee, how appointed, 18. majority in number to decide all questions at preliminary meeting, 19, 20. creditor to represent direct liabili'ies and indirect liabilities over due, 21. if no assignee be appointed, may be made to assignee of the Board of Trade, or to the highest creditor, 21. when to be- completed, 21 — 23. what if the insolvent delays to make, after appointment of assignee 21—23. 204 INDEX. ^ssiaNMBNT — provisions of the Act, relative to time of completing* discussed, 21 — 23. n.,,., irregularity or neglect not to vitiate subsequent, 24, 25. j' such provision discussed, 24, 25. form of deed of, 25. / ,.- must be absolute and unconditional, 25. must be before notaries, if there be assignment of immovables, 25. may be under seal and before witnesses in lands held in free and common soccage, 25. no particular description of property need be inserted, 25, 26. list of creditors to be annexed, 26. may be registered, 26, 27. difficulties in registering, 26, 27. such registration useless, 27. efifects of assignment, 27. to convey and vest in the assignee all the property of the insol* vent, 27. assignee vested with the rights of action relating to it, 28. insolvent divested of its administration, and of the right to alien- ate, contract and sue, 28, 29. < is equivalent to a transfer followed by tradition, 28. ' assignee may revendicate property, 23. may sue or be sued au petitoire and en declaration d'hypothique, 28. not to deprive insolvent of the right to exercise all actiois relative to his person, 29. may contract and carry on business, 29, 30. may maintain an action for labour, 30. so also with relation to after acquired property or contract, 30. can he sue without giving security for costs, 29. all property acquired before discharge passes to assignee, 27, 30, 31 . debts contracted after, cannot rank, 31. does not comprise articles exempt from seizure, 31. nor property held for others or fqr specific purposes, 31. nor the salaries due to public officers, 32. comprises property held under condition that it shall not be subject to seizure, 32. so also property actually under seizure, 32, 33. so also property abroad, 34. •«fifect of, abroad, 35. FORCKD. may be demanded by two creditors for $500, 33, 34. form of this demand, 35. need not show the amount due to creditors, 35. INDEX. 205 AsSiONHBNT — may be served by a bailiff or literate person, 35. - ^ ."* based upon continuous stoppage of payment, ,35. meaning of the phrase " continuous stoppage of payment," 35, 36. counter petition denying the allegations of such demand, 36, 38. upon what ground, 36, 37. how and when made, 38. ' ' ■ ' judge to hear parties and evidence. 37. may grant it with or without costs, 37. if the demand was vexatious, creditors may bo condemned to pay treble costs, 37. counter petition maintained, debtor may sue in damages in certain cases, 37, 38. insolvent failing to i)reseut such petition and to make assignment within five days, liable to compulsory process, 38, 42. provisions of the Act respecting, discussed, 38. what if the trader bus but one creditor, 39. copy of deed of, deposited in the prothonotary's office, 59. notice of execution of, by assignee, 59. i how proved, 104. Attachment — in what cases allowed, 40. any creditors for $200 may issue, 40, 47. to be issued out of Superior Court, 47. available only for commercial debts, 45. proceedings to obtain, 47. subject, as nearly as can be, to usual practice, affidavit, writ, declaration, 47, 48. sheriff, guardian, return, 48, 49. proces-verbal, 49, 50, petition to quash, 51. . petition to suspend, 52. quid of exceptions d la forme or aufonds, 51, 52. official assignee appointed, 54. effect of appointment of official assignee, 55. any person may be examined as a witness in case of, 103, 168. under the common law, not abolished, 23, 43, 44. AwAfti) — See Assignee. ; -J ' Bailiff — service by a, 103. Balance — certificate of, in the Bank, to be filed on petitioning for dis- charge, 63. of estate to be paid to insolvent, on petition, 79. Bank — moneys to be dej'osited in, by assignee, 61. deposit of unclaimed dividends, 79. 206 INDEX. i^'i M- Bank — certificate of deposit in, to be filed by assignee on petitioning for discharge, 63. Bill OF Sale — See Dmts. .j'" ■ ' ^ . -.;«■ Board OF Tradi: — to appoint official assignees, 57. ^ - and fix security to be given, 68. - : to transmit copy of appointment to the Prothonotary, 67. Bond — by the assignee named by the Board of Trade, 68. may be required by majority in number and value of the creditors^ 58. may be changed and modified by the same majority, 58. Books of Account— to be produced by insolvent at preliminary meeting, 18. may be attached, 48. failure to keep certain, ground for opposing discharge, 93, 132. so also refusing to produce them, 93, 132. Building AND Jdrt Fdnd — percentage for, 69. Canada Gakbtte — advertisement in, 101. Capias ad Respondendum — not allowed under the Insolvent Act, 44, 45. Certified Copies — to be evidence primd facie, 104. Chairman — how appointed, 17. "■ his powers and duties, 17. Claims— form of claims, 65. t _ to be under oath, 65. to specify what security held by creditors, 66. when filed, 64. reserved dividends for creditors who have not filed, 64, 65, 77.. proof of, 66. contingent or conditional, provision for, 72. payment of such claims, 72. may be agreed to, 72. assignee may render an award on them, 72. rank of, not disturbed, 74. what, are not discharged by discbarge to insolvent, 91. privileged, 74 — 76. how contested, 76. how paid in cases of individual and partnership estate, 73, 121, 122> Clerks — privilege of their salary limited, 75. Collateral Security — (See Security.) Commission Rooatoire— how issued, 103. Compensation — (See Set off.) Composition — note given in view of, 86, 87. granted by what majority, 8d. INDEX. 207 CoifPOB^TiON— when may be made, 89. _ ". .' ■■-.< s . ■. : av: . ita oTect, 89. ■ i' > ' . ,• forjj of deed of, 90. .-, . .. 4^^.', >, . if. deposited with assignee, 90. • • '^i: . , . . ... duty of assignee upon receiving deed of, 90. opposition to, when lo be made, 90. .'..>, If objected to, is suspended till confirmed, 90. ■ does not effect third parties liable for insolvent, 91. certain debts exempted from effect of, 91. how confirmed, 92. ' how set aside, 93. 11, obtained by fraud or evil practice, void, 88, 93, 95. may be made under the common law, 90. Compulsory Liquidation — (See Attachment.) '' ' must be for a debt of not less than $200, 40. in what cases estate of insolvent liable to, 40 — 42. if he secretes or absconds, 41. if he procures his property to be seized, 41. ' if he has been imprisoned for more than thirty days, 41. if he refuses to be examined as to his debts, 42. if he neglects to obey order for payment, 42. if he has made an assignment otherwise than under the act, 42. proceedings must be taken in three months from act of bankruptcy; 43. debt must have been in existence when the act of bankruptcy was committed, 43. available only in case of commercial debts, 45. proceedings in, 47 — 56. Conclusion — concluding remarks on the Act, 133. Conditional — assignment under the Act not to be, and absolute, 25. dividend to be reserved on claim, 72. assignee may be ordered to make an award on claim, unless other- wise settled, 72. dower not open, cannot be settled like claim, 72, 73. discharge to assignee may be, C3. so also discharge to insolvent, 94, 95. CoNFiBHATiON OP DisoHARQK — composition or discharge may be filed for, 92. not necessary, its effects, 92. until grantecl, burden of proof of valid discharge on insolvent, 92.. notice of application for, how given, 92. creditor may oppose, 93. on what grounds, 93. i' 208 INDEX. Confirmation of dibobarge — if not demanded, creditor may petition to annul, 93. in what manner and on what grounds, 93. - . ■ may be granted absolutely, suspensirely or conditionally, 94. order final, unless appealed from, 94. copy of judgment, evidence of, 92, 166. - coats to be paid out of estate, 74. < '' ' GoNSBRVATORT PROCESS — right of, discussed, 130. against traders subsequently becoming insolvent limited to fifteen days next after delivery of goods, 131. Con TESTA TioN^K>f claims or dividends (See Assignee dividends.) Continuous stoppage op payment — what is, 36, 36. In case of, two creditors for $500 may demand assignment, 34—^39. Contract — subsequent to bankruptcy, insolvent may enforce, 30. what, shall be deemed fraudulent, 107. gratuitous when fraudulent, 110. onerous when may annullable, 113. of marriage in what cases to be registered, 128. ' when and where to be registered, 128. effect of the non-registration of marriage, 129. CONTRAINTB PAR CORPS — (See IMPRISONMENT.) Costs — may the insolvent suing be required to give security for, 29. certain costs of execution not to rank under the amendment bill, 33. in case of counter petition by insolvent, 37. none allowed in suits after due notice of insolvency, 74. taxable costs up to that time rank like the debt, 74. quid if the costs were incurred for the benefit of the creditors gene- rally, 75. of contestation of claims or dividends, to be awarded upon by as- signee, 77. may be paid out of estate by order of creditors, 79. award may ^emade executory by order of judge, 79. security for costs in appeal, 98. of appeal not prosecuted, 160. of appeal to be in the discretion of juge or Court, 161. of attachment, winding up and discharge, privileged upon estate, 74. taxed by the Judge, 74. tariff of, 104, 191. in actions eii separation de biens, 126. ^Counter parts — of deed of assignment, insolvent may be required to execute, 141. Court — the word " Court" means superior Court, 174. INDEX. 209 Court — writ of attachment to be issued out of, 47. ,,,_ . , •, assignee subject to the summary jurisdiction of, S9. power of Court to confirm, annul, or grant discharge 92 — 95. Court of Rbvibw— appeal to, in what cases, 97, 98. proceedings, 97. ■ , . , , Court op Qukn's Bench— appeal to the, 97, 98. > ., . , . proceedings, 98. Criditorb — preliminary meeting of creditors, 16. Schedules of, must be produced by insolvent, at preliminary meet- ing, 18, 80, 81. amount due to, must be therein inserted, 18, 80, 81. . . ■, may name assignee, 18, 19. votes of, in chosing assignee 19 — 21. disputes of, how decided, 19, 20. whose claim is under discussion shall not vote, 21. list of creditors to be annexed to assignment, 26. what can require assignment, 33, 34. what if the insolvent has but one creditor, 39. ' ' . Vexatious demand by, proceedings to set aside, 36, 37. petition to suspend to be submitted to, 37. any creditor may apply for an order to call creditors to appoint of- ficial assignee, 64. how to appoint official assignee, 54. meetings of, when to be called by assignee, 60. five, have a right to require assignee to call meeting of creditors, 60. meeting of, for examination of insolvent, 61. when may remove assignee, 62. ^ . - may object to amount of remuneration to assignee, 62. accounts of assignee to be constantly accessible to, 63, 71 . when and how file their claims, 64, 65. holding security to specify nature and amount thereof, 66. how rank for payment of claim, 74. assignee bound to reserve dividends for creditors who have-not filed their claims, 64, 77. hypothecary creditors entitled to sncli reservation, 64. the claims must then be filed before last dividend, 64, 77. supplem^tary oath may be required from, 66. r may order to retain unexpired lease, 158. assignee bound to act according to instructions of, if not^contrary to the statute, 61. may have insolvent examined before the judge, 82. may allot allowance to insolvent, 89. may grant a deed of composition and discharge, 89. 210 INDEX. '%m a\ M; Creditors — when and how to object to the same, 90, may consent to diacharge of insolvent, 91. special consent of, required to discharge certain debts, 91. may oppose confirmation of discbarge, 92. may petition for the annulling of discharge, 93. meeting of creditors how called, 60, 101. vote of, how taken at meetings of, 101, 102. privileged not computed in ascertaining majority, 91, 165. fraud with regard to (See Fraud). have a right to intervene without costs in suits en separation, 126. interpretation of the word "creditor" 174. CRiMiKAii Law — assignee submitted to, for misconduct, 59. certain frauds how punished by, 117. Curator — debt due by, not aflfected by discharge, 91. nor computed in ascertaining required proportion, 91, 16B. but may rank, 165. ' Damaoss — measure of, to lessor, for cancelling lease, 159. are paid without privilegp, 7b. ' and torts not affected Ik discharge, 91. Day— meaning of the word " day", 174,190. ■ Dbath— of assignee, 61. of insolvent, 95. Debts — what, necessary to procure forced assignment, 33. to procure attachment, 40. must be cummercial, 45. active to be collected by assignee, 67. must be sued in his name, 67. doubtful may be sold, and bow, 67. conditions and form of sale, 67. when sold, purchaser may sue for in his name and how, 68. Debts — due by insolvent, how they shall rank, 74. individual and partnership debts, how rank, 73, 121. Debtor — must be trader,in L.O., 8. when can make a voluntary assignment, 8 — 16. effects of assignment as to, 27. « when subject to compulsory process, 40. , may petition to quash the same, 51. —or to suspend the same, 62. duties of, 80 — 88. ' his public examination, 82. attends all meetings of creditors, when summoned, 82. practical advice to, by Savary, 83—88. ! 1 INDEX. 46^, .♦J' Dmtor — rights and privileges, 88. < >., allowance, 89. composition and disc hiirge, 89, 90. ,, , , ,) consent to discharge, 91. i confirmation of discharge, 92. •!•, petition to quash discharge, 93. ,i . ,' ,^ , . petition for discharge, 94. .'. heirs may continue proceedings, v-i. .-^^ ,,» -r also at preliminary meeting, 21. (See Vote). DiscHAROB— all property acquired by insolvent before his discharge, vested in assignee, 27. of assignee, how obtained, 89. , . ; . of insolvent, proportion of creditors required, 89. effect of, in deed of composition, 89. effect of consent to, 91. position of parties secondarily liable not chaioge, 91. does not effect lien or mortgage, 91. nor certain specific debts, without consent of the creditor, 91. nor.debts incurred after bankruptcy, 154, 165. confirmation of discharge, 92. may be annulled, when and upon what grounds, 93. when insolvent may apply to court for, 94. notice of application for, 94. . ; . insolvent may be examined, when applying for, 83. upon what grounds opposed, 93. may be granted absolutely or conditionally, 94, 95. order of discharge final, unless appealed from, 94, 95. 212 INDEX. Ul Discharge — obtained by fraud to be void, 95. heirs of deceased insolv it may proceed for, 95. costs of, paid out of the estate, 74. Dispute — at preliminary meeting, how decided, 19, 20. at ordinary meetings, 102. in cases of, assignee to make award, 72. Dividends — unclaimed, to be certified by Bank, 63. when to be declared, 7l. how prepared, 74. before preparation of, assigrnee may demand supplementary oath, 66, reserved on conditiooal claims, 72. allowed, upon the amount agreed to or awarded, 72. to be res rved upon claims not filed, 64, 65, 77. notice oi .his reservation to be given, 64, 65, 67. if unclaimed before final dividend, how dealt with, 64, 65, 67. allowance to be inserted in dividend sheet, 76. notice of dividend, 76, ^ • uncontested, to be paid, 76. if objected to, how contested and decided, 77, 78. pending appeal, to be reserved, 79. / unclaimed, how dealt with, 79. Docukknts — on appeal, assignee to file all, 97. Domicile — of commercial firms, to be at their chief place of business, 176. Donation — property held under iho conaition that it shall be free from seizure, passes to assignee, 32. by insolvent, fraudulent, 110. within the three months next before bankruptcy, void, 110. DowBR — married women cannot rank for, daring the lifetime of her husband, 72. may renounce to, 73. is not a conditional claim within the Act, 72, 73. Emi'Loybs — (See Clerks). Endorser — not discharged by discbarge of insolvent, 91. Escape — from imprisonment or from the limits, an act of bankruptcy, 41, 42. Evidence — claims how proved, 66. rules of, upon contestation of dividend, 77. to be produced in appeal, 96, 160. judgment confirming discharge to be evidence thereof, 92, 166. certified copy of assignment, pn/na/acic evidence, 104. so also of appointment of assignee, 104. so also certified copies and extracts of minutes of creditors' meet- ings, 104. so also bill of sale, 67, 151. h INDEX. 213 66, r5. im er t- ExAMiNATiON OP Insolvbnt— meeting for public, how called and held, 61. procedure on before assignee, 82. shall be filed in Court, 82. ' ^ may also be had on order of judge, 82. or upon subpoena in compulsory process, 83. or upon petition to quash or suspend attachment, 83. or upon his application for discharge, 83. eflfect of adjourning sine die, 94. fee to the insolvent for attending, 82, cannot claim payment of his expenses, before being sworn, 103. ExECUTioN-property exempt from, does not pass to assignee so' also salary of public officer, 27, 31. quid as to property held by insolvent under the condition that it shall be exempt from, 32. does property under, pass to assignee, 32. fraudulent, an act of bankruptcy, 41. may issue for costs, and how, 79. ExEcnTOR— debt due by, not aflFected by discharge, 91. nor computed in ascertaining required proportion, 92, 102, 165. but may rank, 91. ExBKPTioNs— (See Execction). ' what articles are. False pretences— obtaining credit under, how punishable, 117. Foreign JuoaMBNTs-provisions of Oonsolidaied Statutes respecting, to form part of the Act, 171. Fees — to the assignee, 62. Fees— to the insolvent, 82, 103. to witnesses, 103. tariflfof fees for Lower Canada, 192. " " Upper Canada, 195, Forced Assignment— ^o'ec Assignment). Foreigner— when subject to our bankrupt law, 13. Forms— appended to act to be used, 103. Fraud- in procuring allowance, sufficient ground for contesting it, 89. sufficient for opposing confirmation of discharge, 93. fraudulent discharge, void, 95. definif'rvn of, 105. various systems of law, 105, 106. at common law, 106 under the Statute, 106, 107. fraudulent contracts null, 107. presumption of, 108. P 214 INDEX. Fraud— general presumptions of, 108, 108. . . '>, ^t r; particular presumptions of, 110. , -.^^^ .. gratuitous contract within the three months, 110. transfer by way of payment or security for payment, 110, 111. fraudulent payments, 111. fraudulent transfer of debt due by insolvent. 111. payment in good faith, 111. , ,^ payment of debts not due, 112. contracts for consideration when voidable, 113. obligation and mortgage for consideratioij, 113. mortgage registered within the ten days not available against other hypothecary creditors not registered, 114. revocatory action, 115. by whom and against whom nullities can be invoked, 115, 116. trader obtaining goods or money on credit, lipble to imprisonment, in certain cases, 117. debtor must be charged with, 117. and must be declared to be guilty of it, 117. effects of fraud within the Statute, 118. dispositions of the Act respecting, discussed, 118, 119, 120. Tbacdulent Prbfgrence — (See Fbaud). Free and cohuon soccase — form of certain deeds in Lands held in, 25, 58, 69. •Goods— (Sec Fraud). purchase of goods on credit, when fraudulent, 117. and how punished, 117. Oratuitous Contract — (See Fraud). •Guardian— (See SHBiiPP). cannot oppose sale by assignee of property finder seizure, 33. appointed by sherifiF, 48. shall make an inventory, and how, 49. shall file the same on return day of writ, 49. shall make and produce statements at meeting of creditors called for the appointment of assignee, 54, 66. shall deliver estate to such assignee, 66. Heirs — heirs of assignee deceased, do not take the estate, 62. of insolvent deceased may continue proceedings to discharge, 95. HrPOTHiiQUB— action en declaration Hypothique must be taken by and against assignee, 28. , assignee may take, for purchase mone^ on sale of real estate, 69. to be specified in claims, 66. such claims to be filid within six days of sale, 64. INDEX. 215 ther ent, ,25, bUed and HYPOTHiQUB — if not BO filed, has no preferential collocation, nnless dividend be reserved, 64, 65, 77. or unless leave to file be granted, 64, 65. creditor to receive notice of this reservation, 66, 77. to receive notice of sale of real estate, 68, 69. not affected by discharge, 91. not to be computed in ascertaining required proportion, 92. for cash within the thirty days, 113. "egistration of, within the ten days, 114. iHitOVABiiKS — (See Real Estate). Impbisokment — escape from, act of bankruptcy, 41, 42. assignee liable to, for neglect in the performance of bis duties, 69. debt enforcible by, not affected by discharge, 91. certain frauds punishable by, 117. debtor must be adjudged guilty of fraud, 117. Indictment — property of estate, in whom to be laid in indictment, 175. Insolvent — (iS^ee Assignment). must be a trader in Lower Canada, 8. meaning of the word " insolvent," under the Act 14. not required to produce assets, 14. notice of preliminary meeting of creditors, how given, 15. must produce statements and schedules, 18. bow to be made, 80. must swear to list of creditors, 18, 52, 82. may correct it under oath, 18. must produce cash book and all books suitable for this trade, if so required, 18. must make assignment to the assignee chosen, and within what time, 21, 22. if no assignee be appointed, may assign to his highest creditor, 21. or, to any official assignee named by the Board of Trade, 21. what if the insolvent delays to assign, after appointment of assignee, 21. assignment shall convey and vest in the assignee all the property of, 27. deprived of all rights of administration and of action, 28, 29. not deprived of the right to exercise actions relative to his person, 29. may contract and carry on business, 30. may maintain an action for labour, 30. s« also with relation to after acquired property or contract, 30. can be sue without giving security for costs, 29. all property acquired by, before his discharge passes to assignee 27, 30. 216 INDEX. . "■'>. r* ^■> j.< if Insolvent — may retain property exempt from seizure, 31. may be required by two creditors for $500 to assign, 33, 34, 35. may oppose such demand and upon what grounds, 36, 37. if dismissed, may sue in damages in certain cases, 37. shall execute counterparts of deed of assignment, if so required, 141.. in what cases subject to compulsory process, 40. creditor must be for $200 at least, 40. debt must be commercial, 45. may petition to quash writ of attachment, 61. to stay proceedings, 52. duties and obligations of, 80. to deliver to assignee all his property, notes, and other papers, 82. may be examined, when and how, 82, 83. but is not entitled to expenses before being sworn, 103. must attend all meetings of creditors, when summoned by assi- gnee, 83. shall be paid for such attendance, 83. practical advices to, by Savary, 83 — 88. privileges of, 88. allowance to, 89. / - composition of, 89. discharge of, 91. may petition for a confirmation of discharge, 92. may file composition or consent on petition to annul, 93. may petition the court for a discharge after a year, 94. may be imprisoned for fraud, in certain cases, 117. effects of fraud as to, 118. death of, 95. heirs of, may continue proceedings, 95. Instructions— of creditors how given to assignee, 61. Intent — (See Fraud). of debtor to defraud, 107. Interest — ceases to run from assignment, 71. rebate of, on claims not due, 71. paid in full, before surplus is paid to insolvent, 79. Interpretation — of various terms, 174,175. Inventory — {See Guardian). sheriff not to make detailed inventory or process verbal, 49, 50. but guardian shall do so, 49, 50. mode of makiug and intituling, 49. Irregularity — neglect or, not to vitiate subsequent assignment, 23, 24, 25. Judge — to decide petition to stay proceedings, under demand of assign- ment, 37. INDEX. 217 41. 82. ISSl- JcDOK — to decide petition to quash, or to stay proceedings, under writ of attachment, 51, 52. his duty, when such petition to stay proceedings is presented, 63. to appoint official assignee at meeting of creditors, 54, 55. , . . how governed in this appointment, 56. to remove assignee and appoint a new one in certain cases, 61, 62. upon death of assignee, estate under his control, 62. may call meetings of creditors, 60. . , : ' to decide petition of assignee for his discharge, 63. award of assignee, made executory by order of, 79. may order the sale of doubtful debts, 67. may order sale of lease, 68. insolvent may be examined before, 82. any person may be summoned before, 103. may issue commissions rogatoires, 103. appeal to, from award of assignee, 97. appeal from his order on such appeal to t' ' Court of Review or the Court of Queen's Bench, 97, 98. no appeal lies from any other order of, 98. to decide questions arising at meetings of creditors, referred to him, 102. I 1,24, sJgn- Landlord — rights of, against estate of insolvent, 76, 158. lease of greater annual value than the rent, how disposed of, 68. sale of lease, to be made subject to rent, 68. conditions of sale and security to be settled by the jud; e, 68. conditions of lease to be binding on purchaser, 68. long leases, how puo an end to, 159. shall be cancelled in accordance with resolution of creditors,' 159. resolution to be notified to, 159. what shall be the measure of damages for resiliating lease, 159. how adjusted, 159. ranks for damages as an ordinary creditor 75, 169. assignee may make an award upon such damages, 159. award may be appealed from, 169. Languaob — parties may use their own, in cases where forms are not lup- plied by the Act, 103, 171. Laws — existing laws saved, 23, 43 — 45. Liabilities — to be inserted in preliminary schedule, 18, 80. how divided and '^.istinguished, 18, 80. what, are extinguished by discharge, 91. LiKN — not aflfected by discharge, 91. LiHiTATioN — compulsory liquidation limited to three months next after the act of bankruptcy, 43. 2id INI>£X. I' r, LnfrtATitoir— Teyocatory action by thirty years, 11«. of conservatory process to the fifteen days after delivery of goods, 130, 131. List or orsditors — to be sent, with notice of preliminary meeting, 15. to be produced at preliminary meeting, 18, 80. to be appended to deed of assignment, 26. to be deposited trith deed of assignment, 69. ■"" Literati persons— service by, how made and certified, 10$. MS 'V ; If, ■J m w m m m 'If r Majorities — in number decide every question at preliminary meeting, 18, 19. official assignee appointed by the creditors ananimously, 54, 55. in nui&ber and three fourths in value of creditors for above $100 decide petition to stay proceedings under writ of attachment, 63. in number of creditors for $100, representing three fourths in value of the liabilities, direct allowance and grant deed of composition and discharge, 89. in number and value of creditot'S, for above $100 decide all other questions at meetings of creditors, lilse the removal of assignee and appointing new[one, 101. how to be ascertained, 91, 92, 102, 165. creditor to vote only for the amount for which he may rank, 91, 92, 102. Marriage — gratuitous contract made in consideration of, within the thrie months, void, 110. fraudulent acts done in contemplation of, void, 107. no action in siparation, unless advertised, 126. nor unless action be brought at domicile of husband, 126. Marriage — any creditor may intervene in separation suit, 126. contract, must be registered, 127, 128. Married woman— whether can take benefit of the Act 12. may rank for her matrimonial rights, 73. what as to her dower, 72, 73. gratuitous contracts to, by marriage, when void, 1 10. fraudulent appropriation by marriage contract, void, 107. cannot be imprisoned for fraud, 117, 118. bound to give notice of action en siparation, 126. contract must be registered, 127. if not, shall not afifect right of creditors, 129. but is not then deprived of any advantage under the Coutume, 129. can be examined before the Judge against her insolvent husband, 129. Mkbtinos of creditors— when to be called by advertisement, 101. INBBX. 219 Mketinos of obbditors— how called, when not required to be by adrer- tisement, 101. - . .' asBignee to attend all meetings of creditors, 60. ~-: • I 80 also the insolvent, when 80 summoned, 82. "■ ' < how questions at, shall be decided, 91, 92, 102, 165. ' powers of creditors at, how regulated, 101, 102, leQv assignee to take minutes of proceedings at, 60. shall be accessible to parties interested, 60. what is evidence of such proceedings, 104. for public examination of insolvent, 61, 82. MoBTOA.SE — {See Htpothequb. not affected by discharge, 91. - ' -■ ■ Motion— one clear day's notice of, 102. how to be intituled, written and subscribed, 188. .Movables— sale of, 67. Naue — of each creditor to be inserted in list of creditors, 18, 80. NBGLEOT^-or irregularity not to vitiate subsequent assignment 24, 25. of debtor to appear for examination or to obey decree for payment, renders his estate liable to compulsory process, 42. Negotiable Paper — of which holder is unknown, must be particularized in preliminary schedule, 91, 164. if so mentioned, the debt to be extinguished by discharge, 91, 164. Notaries — meaning of the expression "before notaries," 174. deeds before, in L. C, have force in U. C, 142. deeds before, how registered, in U. C, 142. Notices— of meeting of creditors, how advertise, 101. how given, if not required to be by advertisement, 101. to be sent by post, 101. of preliminary meeting, how given, 15. of execution of assignment by assignee, 59. of the issuing of writ of attachment by Sheriff, 48. of petition to stay proceedings, 53. of meeting to appoint ofiScial assignee, 64. of the appointment of ofiBcial assignee, 59. for public examination of insolvent, 61. of auction sale of doubtful debts, 66. of sale of lease, 68. of sale of real estate, 68, 69. of such sale to creditors, 68, 69. ,, of declaration of dividends, 76. of reserved dividends, 64, 65, 77. of deposit of deed of composition, 90. of application for confirmation of discharge, 92. 220 INDEX. Ill i» ,f Notices— of petition for annulMng discharge, 93. -/• ^ - • , i • of petition for discharge, 94. of appeal to the judge from the award of assignee, 97. of application for allowance of appeal, 98. s of presenting petition in appeal for the judge, 98. ^ of appeal to the Court of Review, 97. of petition, motion or rule generally, 102. length of notice requisite in proceedings, 102. rules as to notice how enforced, 102. but time may be enlarged, 102. Notoriety— of insolvency, effect of, 108, 109. - ■>■.•■.. Nullities— of fraudulent contracts, 115. by whom and against whom can such nullities be invoked, 115, 116. OrriciAL Assignee— (See Assignee.) Oath — list of creditors must be under oath, 18, 80. assignee must hear parties and witnesses under, 77. on contestation of dividend sheet, 77. assignee may administer, in certain cases, 77, 157. insolvent may be examined under, 82. may be administered by assignee, 82. claims must be attested under 65. ' ;jupplementary, may be required from creditor, 66. before whom to be taken, 47, 52, 65, 77, 81, 82, 102. Opposition — can the assignee file, to sheriff's sale, 33. to sale of real estate by assignee, how made and determined, 70. to dividends, how made and determined, 77. to deed of composition, when to be made, 90. must be in writing, 90. if made, compels assignee to await confirmation, 90. Obder — to examine or pay money, insolvent not complying with, commits an act of bankruptcy, 42. appointing official assignee, how registered, 56. for examination of insolvent, 82, 103. to confirm or annul discharge, 92, 93. of Superior Court granting discharge, 94. " " may be absolute, 95. " " conditional, 95. « suspensive, 95. to refuse discharge, 95. appeal from such last named orders, 94. for examination of parties as to estate of insolvent, 103. service of, bow made and established, 102. no appeal from, of the judge rendered primarily and in the firat instance, 98. INDEX. m OiDBRiMO — of the affairs generally ; if the meeting of creditors for public examination of insolvent be also called for, 61, 71, 169. all matters which may be regulated under the Act by creditors may be so regulated at such meeting, without special notice, 61, 71. ParTaNER — appointment of assignee to, dissolves partnership, 123. assignee may, then, exercise remedies against co-partners, as in case of dissolution, 123. of insolvent, not discharged by discharge of insolvent, 91. individual debt of, to rank first on his individual estate, 73, 121. liable by imprisonment for certain frauds of his co-partner, unless he proves his innocence, 122. Partnership — provisions respecting traders, apply to, 121. distribution of partnership estate, 121. domicile of, at chief place of business, 175. rights of assignee to insolvent partner against, 121, 123 — 125. . liable for the fraud of its members, 122. Payment — in case of continous stoppage of, two creditors may demand assignment, 33 — 37. assignee may require supplementa: j oath as to, 66. in goods, in contemplation of insolvency, void. 111. within thirty days, void in certain cases. 111. valuable security given therefore, must be restored. 111. in good faith and in ordinary course of business. 111. of debts not due, 112. Penalty — due as, not affected by discharge, 91. Petition — by debtor to annul demand to assign, 36, 37. (See Demand OP Assignment.) ^ to quash writ of attachment, 51. to stay proceedings under attachment, 52. to call a meeting of creditors, 60. by assignee for discharge, 63. by insolvent for payment of balance to him, 79. for confirmation of discharge, 92. for annulling discharge, 93. for discharge, 94. in appeal, what it must contain, 97. in appeal, when presented, 97, 98. copy of such, may be filed and costs obtained on it, 160. for examination of insolvent before judge, 82, 103. for examination of any person as to the estate, before the judge, 103. one clear day's notice of, 102. how to'be intituled, written and subscribed, 188. H 222 INDEX. 81 I ■ ■■/■ i ■ fesi Pktitort— action, to be taken bj and against assignee, 28. PiiAOR or Bdbinibs — preliminarj meeting to be called at, or anjr other convenient place, 16. official assignee, to whom assignment is made, mast reside in the district or county in which insolvent has, 21. domicile of partnership, at chief, 176. PLiADiNGa—- exceptions a la forme or to the merits cannot be pleaded in insolvency, 61, 52. may be amended, 61. facts must be plainly and concisely stated in, 103. shall not be void if susceptible of amendment, 103. not to be insufficient, unless opposite party be misled or taken by surprise, 103. how to be intituled, written, and subscribed, 188. to be subject to ordini^ry rules, as to names of parties, 187, 188. Fledor— giving undue preference, fraudulent, 110, 111. when presumed to be fraudulent, 110, 111. Post — notice by post, how mailed, 101. Pbactick — writ of attachment subject, as nearly as can be, to ordinary rules of 49, 50, 51. (See Rules OP Praotiob). Preferbnob — unjust, is void, 110— 113. President— (6'ee Chairman.) Presumptions of Fraud — {See Fraud). Privileqes — to be summarily specified i.: claims, 66. how to be dealt with, 73. how collocated in dividend sheet, 74. notice of sale of real estate by assignee to creditors holding, 68, 69. reserved dividends and notice of such reservation, 64, 77. not to be computed in ascertaining required preparation, 92. not disturbed by the act, 91. of costs, 74. of clerks and employees, 75. of lessor, 74. of vendor, 76. of allowance, 76 divers others, 76. Proceedings— in voluntary assignment, 14—27. neglect or irregularity in, not to vitiate subsequent assignment, 24, in forced assignment, 33^39. compulsory liquidation, 40 — 56. for discharge of insolvent, 91 — 95. in appeal, 97 — 99. INDIX. PnoonDiKos— for flraud, 115, 117. ' ui > - \ % in separation de bitni, 126. ftgainst firaadulent pArtnershipa, 123. not to be void if susceptible of amendment, 103. .' orders of business, 186, 187. may be conducted by parties or their attorney ad litem, 186. how to be intituled, 188. to be made according to what rules, 163. Prohissort Note — given in view of composition or discbarge, valid ground for opposing discbarge, 88, 93. for annulling the same, 88, 95. '< may be attached under compulsory process, 48. ' PROor— of claims, how made, 66. burden of, of discharge not confirmed on insolvent, 92. so also of innocence of certain frauds, on the partner, 122. of proceedings, 104. Proportion of Creditors — (See Majorities). Provincial Govkrhknt — salary of officers of, exempt from seizure, 32. debt due to, not affected by discharge, 91. dividends, unclaimed for three years, to be paid over to, 79. Pdblio Officer — salary of, exempt from seizure, 32. debt due by, not affected by discharge without express consent, 91. nor computed in ascertaining required proportion of creditors, 92. but may rank on estate, 91. Pdrohaser— of doubtful debts, rights of, 67, 68. of unexpired lease, right of, 68. of debt fraudulently transferred. 111. Queen's Bench — appeal to Court of, from order of judge or Gourt of Re* view on appeal from award of assignee, 97. Rankino — (See Award, Dividends, PRiviLEass. not disturbed by the Act, 74. what debts shall rank, 71 — 74. surety paying may rank in the lieu of principal, 72. shall be for the amount agreed to or awarded on conditional claims 72. on collateral security, permitted upon difference of value retained or assumed, and amount of claims, 73. shall be for each separate item of claim, till fully paid, 74. double, prohibited, 74. in cases of several estates, first upon the estate which contracted the debt, 73, 121. secondly upon the other, after their creditors are paid in full, 73^ 121. 224 INDEX. H iu if Rankino — is not allowed for costs incurred after notice of assignment or issue of attachment, 74. purchaser of debts due by insolrent may ran]< in the place of orig- inal creditor, 162. Rkalization of Assets — {See Assbts, Sale). Real Estate — Deed of assignment conveying, may be registered, 26. such registration useless, 27. registration of order appointing official assignee to have the samu effect, 66. assignee to sell, 68, 69. such sale to be advertised like sheriff's sale, 63. ■ , period of advertisement may be shortened, 69. > - may be withdrawn if price be too small, 69. may be sold subsequently, according to creditors' instructions by auction or private sale, 69. assignee may give credit to purchaser of, 69. may then stipulate privilege otbailleur de/onds, 69. effect of sale of, by assignee, 69. form of deed of sale, 69. proceedings by assignee with respect to, 69. opposition to sale of, 70. registered creditors to have notice of such sale, 69. Record— to be transmitted by assignee in appeals, 97. Refusal — 3f person named as assignee to act, effect of, 21. of debtor to obey order for payment of money, 41, 42. to be an act of bankruptcy, 41, 42. so also to appear for examination, 41, 42. Registers— (5ce Minutes.) Registration— -of deed of assignment, bow made and effect of, 26, 27. list of creditors not to be registered, 26. difficulties in registration of assignment, 26. how certified, 141, 142. of order appointing official assignee, 66. certificate of hypothecary creditors to be obtaineu b; assignee be- fore proceeding to sale of real estate, 68. assignee to give notice of such sale to registered creditors, 69. within the ten days next before bankruptcy. not available against anterior hypothecary creditors not rejriatered, 114. of marriage of traders, 127, 128. effect of omitting, 129. Removal — {See Assignee.) of assignee in consequence of misconduct, 61, 62. " by death, procedure on. INDEX. 225 the 18, Rbmoval — of aasignee by creditors, 61, G2. " RxNUNOiATioN — of married women to dovrer . RKMUNninATioN— (See Absioneb). of osslgnee not to exceed fire per cent on the cash proceeds in absence of agreements, 62. RusBBVED DmDiND3—(AVc Creditors, DiviDBSDs). RBsiDBNOB—of creditors must be inserted '.n preliminary schedules, 80. of official assignee chosen by insolvent, must be within his district or county, 21. , , j : , Review— order of judge on appeal from award of assignee subject to, 97. appeal from Court of, 97. Rbvcoatobt Action— to recover baclc property fraudulently disposed of 115. to be instituted before ordinary tribunals, 116. by whom, and against whom, may be invoked, 116, 116. assignee may briug it, 116. limited by thirty years, 116. RuLH— one clear day's notice of, sufficient, 102. liow to be intituled, written, and signed, 187. Rules of Pbaotioe— dispensing with process verbal o.'" seizure, discussed, 49,50. by whom to be made in L. C, 104. Salary — of public officer does not pass to assignee, 32. of clerks limited. (See Olbbks), 76. Sale — of personal estate, 67. ofdoubtful debts, 67. of lease, 68. of real estate, 68, 69. * opposition to, 69. vendor's privilege limited, 76, 130. in contemplation of insolvency, void, 110. Schedule — for preliminary meeting, 18, 80. V , must be sworn to by insolvent, 80. may be corrected, 18, 80. in support of petitions to stay proceedings, 52. Secretary — may be appointed at preliminary meeting, 17. Secreting — or about to secrete, an act of bankruptcy, 41. Security- to be given by official assignees of Board of Trade, 58. to* be given to creditors, if so required, 58. of ossignee removed, to be enforced by his successor, 59. to be specified in claims, 66. if not held, to be stated so in claim, 66. A., J r-'i ' *' t- >' ■ * > I ; ^1 226 INDEX. Skc'Rity— value of, to be specified by creditor, 66, 73. assignee may assume, undtr certain conditions, 73. in appeal, how giv^en, 98. given by way of payment, void, 110, Seizure — property exempt from, 31. SiPABATioN DE BiBNS — public Qotice of action of, against traders, 126 . action brought at domicile of husband, 126. any creditor may intervene to examine debtor without costs, 126. may oppose judgment at his own risk, 126. Servants — (See Clerks.) Service — of petitions, orders, rules, and warrants; valid in any part of the province, 102. by a bailiff or literate person, 103. must be between 8 a. m. and 7 p. m., 103. return of, what to contain, 103. how established, 102, 103. Set-off — fraudulent, void, 111. Sheriff — attacliment to be directed to, 48. notice of attachment to be advertised by, 48. to seize all estate and effects, wherever situate, 48. may appoint messenger for that purpose, 48. , to makejreturn in general terms, 49. and without process verbal, 49, 50. to place property in hands of one of the a&signees named by Board of Trade, 48. if there is none, shall appoint solvent person guardian, 48. sale of real estate by assignee has the same effect as sale by, 69. Sittings of Judge — shall be in room allotted for purpose, 186. shall commence at 11 a. m., 186. order of business at, 186. Specific Purpose — property held for, does cot pass to assignee, 31. Statements— form and nu7«ber of, 80. filed at preliminary meeting and with petition to stay proceedings, ■18,52. Stay Proceedings — petition to, under a demand for forced assignment, 36 petition to, under writ of attachment, 52. Stocks in Banes, &c. — how disposed of, 66. Stoppage op Payment — (See Payment). SuBP(ENA — insolvent may be examined on, 83. service of, in U. C, when issued in L. C, 171. Supplementary Oath — (See Oath). • Surety — on paying may rank, 72. not discharged by discharge of insolvent, 91. in appeal, 98. INDEX. 227 26. rt of )ard igs, 36 Surplus— of estate to be paid over to insolvent after payment in full of capital and interest to creditors, "79. Suspension op Procbedings— under a demand for forced assigBment, 37. judge to preside, meeting for, under writ of attachment, 52. question to be submitted to creditors, 53. if decision be in the negative, to be in force for three months, 53. effect of, discussed, 53. if decision be in the aflSrmative, oflScial assignee to be forthwith appointed, 53, 54. judge to decide all questions ag to amount of claim, 54. Tariff of Fee^<— by whom to be made, 104. in Lower '^ .nada, 192. in Upper Canada, 195. TAXATioN—Judge to tax costs, 74. of costs in L. C, 192. " inU. C, 195. TlTLK~0f Act, 8. of proceedings, 188. Traders — Act applies only to, in L. C, C— 11. what constitutes a trader, 8. actual buying or selling, 8. a single act not suflScient, 8. those who have ceased to be, 11. married women, minors, lunatics, 12. foreigners, 13. not liable to compulsory process unless for commercial debts in L C, 45. Trading Compa!:ie8— within the Act, 121. domicile of, at chief place of business, 175. Transfer— in contemplation of insolvency, void, 110. of debt due by insolvent, void, in certain cases. 111. Trustee- property held as, does not pass to assignee, 31. debt due by, not affected by discharge, 91. nor is computed in ascertaining required proportion, but may rank, 92. Tutor— (Sec Trustee.) Undue Preference — (See Preference, Fraud.) Upper Canada— Act applies to all persons, 8, 139. form of deed of assignment, 141. duplicate of deed of assignment to be deposited, 141. deed executed in U. C. to have force in L. C. and vice vend, 142. registration of deed of assignment, 141, 142. / |:i 228 INDEX. Upper Canada — effects of assignment, 27— 33. • forced assignment, 33 — 37. afSdavit for compulsory process, 145. . li sale of real estate, 151. v; :.' debtor obtaining goods or money on credit, how dealt with, 163. confirmation of discharge, 165. annulling of discharge, 166. ■ . ;1 ' petition for discharge, 167. ■•.:■ - public notice, how advertised, 169. meetings of creditors, how to be advertised, 169. appeal to single judge may be referred to full court, 160. notarial acts admissable, 171. records of, how proved in, 171. •* judges to make rules of practice and tariff of fees, 173. Vendor's Privilege — limited to the fifteen days after delivery of goods in cases of insolvency, 130, 131. Vexatious Demand— (See Demand.) Voluntary Assignment — (See Assignment.) Votes— at preliminary meeting to be given on direct liabilities, and on indirect liabilities overdue, 21. on dispute at same meeting, how taken, 19, 20, 21. at subsequent meeting, can be taken only for the amount to be col- located on the estate, 72, 73, 92, 93. Vouchers — must be produced by insolvent at preliminary meeting, if required, 18. Wages — (See Clerks, Public Officers.) Warrants — how served, 171. Warranty — sale of doubtful debts made by assignee without, 67. (See Debts.) Witness — any person may be, touching estate of insolvent, 103. even the wife of the insolvent, 129. upon order of judge, without previous notice, 103. allowance to, 103. not bound to be sworn until expenses are paid, 103. may be punished for non-attendance, 103. commissions to examine, 103. Writ op Attachment — (See Attachment.) I ,.■ (See