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BY IUL; UONDllAULE J. J. <.'. AlJUOTT, Q. C, AJ. J'. 1' ~ — ==85i:-- TRINTED BY GEORGE DESBARATS AND MALCOLM (LYMERON, Printer to tho Queen's Most Excellent Majesty. 1864<. c y 7^c ^ / ' ft r.^-^'-^^. ^ ^>. 'X^ ^^ ^ cr ;-) TO THE HONORABLE ME. JUSTICE MEREDITH, THIS LTTTLR MANUAL IS RESPnCTFULLY INSCRIBED BY ONE Wno WAS FOUMERLY ni3 STUDENT, IV niTATEFUL REMEMnnAKCn OF MANY KTNDNFJ5?;FM. r rilEFAOE. There has boon lor some years past an urgent dcniand in Canada, lor a law creating a summary mode ol' realizing and dis- tributing the estates of Insolvents, and of affording relief from liability, to debtors making a full disclosure and delivery of their estates to their Creditors. The absence of such a law, left to the failmg debtor no chance of success in any future enterprise, unless he could succeed in the almost hopeless task, of procuring a dis- charge from every one of his creditors. Thus many such were tempted to secure their remaining assets by dishonest devices, rather tlian leave themselves destitute by resigning them to their Creditors. Whether the present law will reach the evils that have acquired such considerable proportions, or aft'ord that relief to unfortunate debtors which they are entitled to in other commercial countries, remains to be seen. And however successful it may prove to be, there will doubtless bo many particulars in which amend- ments to it will be required, to enable it to be worked elleetually as to the objects sought to bij attained by it, and harmoniously ns regards the existing laws of the two j)rovinces. Having always felt a strong interest in the improvement of our eommercial law, and given some attention to the subject of Hanlv- rupt Laws generally and to the present Act .a particular, I have naturally been desirous that the Insolvent Act of 1861 should receive a fair trial. And the more so that it embodies the idea I have always entertained that we should engraft upon our existing systems of law, such further procedure as may be required to expropriate and distribute the effects of an insolvent, and to dis- charge him from liability; rather than to create new and separate triljunals and j)roceedings for those purposes only. I have therefore thrown together the notes to be found in this litth.' volume, in the lio]ie that they may servo to facilitate the applica- tion and use-of the new statute. In preparing them f have seldom VI vcnlurod to oiler an opinion npon ih.« constrnHion of dan^os of doubtful meaning. I have conlined ni>self rhi.-lly lo \hn attempt lo])o]nl out the relations between dilFcn'nt jKutions of the Act, and their bearing ujion caeh oilier— and to indieale where, in the I'-nglish, French, and Seotch, bankrupt Law^, and in the leading works upon them, analogous jirovisions and decisions may be found. IJefore long the light afforded by judJeial decisions upon ils clauses, will render the path of the commentator more easy and more safe. In the meantime, however, 1 trust that the materials collected in the following pages may be found not to be without value, in the investigation of the true scope and meaning of the Act. And although I feel that after the expenditure of considerable labor I have achieved but little ; I venture to hope, that the little 1 have been able to do, may prove in some degree useful and acceptable. J. J. C. Abjjott. Montreal, October, 18G1. I 1 LIST OF I500K8 CITED. WITH THE AlJJBliEVIATION^ USED. . ..u,s8e,-Nouvoau Commentairo 8ur I'Ordonnanoe do Cominerep ns'', Locre,~L.spnt dii Codo do Commerce >;;;. Icon JVirdo.ssus-Cours do Droit Commercial. ... H^' j!:J; Arc hboId,-Tlio Law and I'raclico of ikmkrunioy " ' {or,' Lord liaymond'H Reports ^^'^^' .Smilh'a Mercantile Law . Savary,— Le Parlait Negociant el ParereV ' . Vincent, — Leiri.siation Commercialo . '^''''conmer'co'?.!'""'^^''''^''"^^ '''' ''"^ ^"^ P'0«-eJ"re des Tribnnaux'do 'I'ouboan,— Los Institutes dn Droit Coiisulaire Becane, stir Jouese, Cornnieniaire de I'Ordonnanco do 1673 Merlm,— Repertoire do Droit Pyivo's Reports " .Salic,— Esprit de.s Ordonnanccs de Louis XIV Rogue,— Jurisprudence Consulairo Nicodeme,~Exorcice des Commer^ants . Mapse,— Lo Droit Commercial, etc Houlay Paty,— ])e.s Fuillites ot Ranquerontes -'. Honnm,-Comnientairo i\ii la Legislation Commerciale Rose's Reports Dalloz, (A,; —Dictionnairo 17L'{ 1833 18.55 Mm 1773 1861-2 1S2K 1845 Camus Quia XIV, etc 17.15 ,. ,. . , ,, -. 1833-1839 ^ictionnairo des Contentieux Commercial, Denizart,— Collection do Decisions de, par Lo bornier,— Conference iles Ordoniiancea do Loi Carre,— Do TOrganization Judiciaira Do Vdleneuve et Masse, Kden's Rankrupt Law Cooke's Bankrupt Law *".!.'.'!.!" Stuart's Lower Canada Reports.. ! ! '^^""laud)"^^'^'''''^^ °' ^^'" "^ Bankruptcy and lusolvency," (Scott- La Coutumo de Paris " Bedarrido,— Des Faillites et Banqueroutes GnfFith,— On the Bankruptcy Act of 1861 Scott's Reports Le Codo do Commerce SriJt^KfJi'S^iraSr"'™' ''■' - ••■•■-" «'-I,V,. ,85. Horson,~Quostions sur Jo Code de Commerce ... " Chardon,--Du Dol et de la Fraudo Braft of Canadian Civil Code Tonliier,— Droit Civil FranQais... Domat,— Loi.v Civiles Pothier,— Traito des Obligations ..*,...'.'.'."!.' ^ .'." ." Kinnoar,— On the Law of Bankruptcy, (Scotland)! ". '. Bells commentaries on tho law of Scottland, 6th Ed.: . atory on partnership _ Roscoo's Criminal Evidence loco Bonnet and Heard's leading Criminal cases &tory,— On Confiict of Laws Connier,— Code Henri Qualro irik Burrow's Reports .. ". '\\^^^ Durnford and East's Reports T. Rep Blackstone Reports '.....' Blk.f VIII r.lST OF ]JC)OKS CITED. Doria find Macrue,— The Law and Practice ol' Bauk- , r»ptcy D.kM Deiiipait,— ('ollocliondo Decisioiifl Aiic. Den. . .. . nimlLMip aiul Bliif,'li;un'H lioports jJiod. & Bing.'.'. i uunU)a''H Rt'ixjrlrf Taunt Modern lii'port.s Mod. . * .'. . . . Ccmyn's ITipcHt .'.'.'....".'." .Cum. ])|V ' . V. .' , Lower Canada Keports L. C. liJi) 'I'ho Lower Canada Jurist . . L. C Jur La Loi dii 28 Mai, 1838 C. Com Tlio Bankruptcy (Scotland) Act 1856.. S. Act Tiio Banlvrui)tcy Act 18G1 (Eni^dand; i!l & 25 Vict. ,,„ t-'U^. L'J.'l E.Act I !(.■ (.unsolidatod Statutes ol Lower Canada Cons. Stat. L. C liio Coii.-solidated Statutes of Canada Cons. Stat. Can Mfcson & Welsby's Keports , 1\L & W Biuii well and Cressweli's Reports . B.'ic C. .'..'.. '.'. Binuli.mi's Rojiortfl Bin-r . .'. .. l-oni>iana Reports .. . .... '. Loinis. '.'. Dcnibon's Crown caf-es .... Den. C. C. KDITIONS. 18ti3 EDITIONS. . . 18ti3 T H E INSOLVENT ACT or I8(;i, All Act resp(.'ctin^ Insolvency. r^^HEREAS it isoxppdionlthal provision bo made for the Preamble ^ st^ttlcmont ol tlu,. c-.statcs of insolvent dehlors, for -ivin- '''^'^''^'' eilect to arrangements behvccn them and llH-ir eredilors and ior the pun ishnient of fraud: Therefore, H.^r Majesty by' and with the advice and eonsent of the Eeirishitive " Council and Assembly of Canada, enacts as follows : 1. This Act shall apply in Lower Canada to traders only, Application of and in Lpper Craiada to all persons whether traders or mm! il'S/ traders. 1. By this section the operation of the Statute is Hniited in Lower Canada 10 irnuGrs* In the legislation of France the test of the competeuc v of a commercial Inbunal has sometimes consisted in the nature of the transaction brouirht before it, while at others, to give it junsdiction, not only the transaction but the persons engaged in it were required to have a commercial character. creating a commercial The Le«rc5 Paienies issued by Philip de Valoi. ...,uu.y a eommercia rribunal in Bne and Champagne ; the Edict of Charles VII establiahinc the Conservateurs de Lyon in 1419 ; the Ordinance of Henry II in 1549 authorizing the election of Consular Judges in Toidouse ; the Edict of No- ^l^K'^^ah '^^''^/^ards peremptorily enforced by declaratory Edicts in lObS and Ibll ; with numerous others of a similar character, all require in general, tnat a transaction to be cognisable by the commercial Tribunals, should not only be in itself a commercial act, but should have taken place between persons engaged in commerce. The Ordinance of 1673 follows the same system-Ord. 1673, tit. XII, arta. 2 to 10, Jousse, Ord. 1673, pp. 184 and seq. But the modern Code de Com- merce appears sometimes to render tlie nature of the transaction the prin- cipal test of the jurisdiction of the tribunal.— Arta. 631, 636, 637, 638. The jurisdiction created by the previous legislation may therefore be called personal, from the fact that the quality of the person was essential to 2 WHO IS A TRADETt. its oxi?t(ince ; in conlrrulislinction Id thut otaMiFhed by iht? Coclo do Com- mcrci;, wliicli is Piiscepliblu of t>oii)o- sustained in some cases by the (.-Drri- mLM'i'ial charactt-r ol'tln' j)l'I•^n!^ witliunl refcreiico to tho Iransaction : and in others, by the o;imniercial c!iaraet(;r of the traiism'tiou, iiidependentiy ot l!io per.soiis cnua^ed in it. Tiie laller jiu isdiclioii uniy *' '"■ ' ' ' there fori ut oiiee personal anil real ; personal, bceanse the (jr.ality oi ?eicd wliile tlie operation of the Arcld>o!d, on Bankniptey, Lm3 considered trader creates a presuinpuon tiiaf his contracts are coimecicd with iiis trade, Jeavinir liim to est.-dihsh the contrary, wliile tho centracis of a non trader are ))resunied to follow Ids ([uabty, un^-^«s tliey are essentially of a commercial chaiacter ; and real, beeanso he who enters into ac^eniract which tlie law recogiiizcB as essentially ci.inrnerciai, becomes in resjieet of tiiiit contract, amenable n-i the commercial Tribunals, wliatevev may be his qnaiity. 4 Locre, p.p. 93 and rod. ; 1 Pardessiis, pp. 09 and seq., Nos. 4S and scq. ; 5 Pardcssus, pp. 12 and se(i., Nos. 13-I.t and scq. . In England there have r,ot been of late any tribunals created for the regu- lation of commercial matters f-olely. J^ut an exceptional juri.''dictiou for bankrupts has loiii^f existed tiiere, which was purely commercial, inasmuch as until lately only traders couKI become bankrupt. But while the tribunal was commercial, its jiuisdiction was person;il, for the character of the debt upon which a creditor m!:.'it base proceedings in bankruptcy, appears to have been held to be of no importance, even Statutes of Bankruptcy was limited to traders, p. 87, and tlie cases there cited. Tlie intention ol this Act appears to be like that of tho English Statute, to create a species of jurisdiction puridy personal. There is no limitation of its application to debts of a commercial character — but only in Lower Canada, — and as respects one moile of proceeding, in Upper Camida — to persons wdio are traders ; — tlie nature of the debts, upon which proceedings )nay be adopted under it, being in most cases a matter of inditi'erence. The jurisdiction it creates Ls therefore purely personal. But thougii the operatieir of the .Statute is thus rei^tricted, it contains no delinitiou of the term used to de.'rcribe the class of persons who are made specially subject to its provisions. The qiiesti'Jii, who is a trader ? becomes theix'f )rfi of the utmost impor- tance in every case in Lower Canada, ami in many cases in Upper Canada. And the replies to it must be based upon tiie dilierent laws wiiich prevail respectively in tiiese two sections ofthe province. With regard to Upper Canada, which receives from England the basis of its system of law, it may be remarked that the ({uestioa under consideration appeal's generally to have been examined in tho inother country as an incident to the oi)eration of the Bankrupt laws, and it is therefore chi(;lly with reference to tho lav/ of bankruptcy that the woi-d " trader" has acquired a distinct and pi-ecise legal siirniiication in Englaml. The earlier English statutes, though they did not use the word " trader", attempted a definition or description of the persons who might fall within the operation of their provisions. Thus, tho 13 Kliz., cap. 7 ; 1 Jac. I, cap. 15, and tho 21 .Jac. I, cap. 19, provided that every one who used the trado of merchandise by bargaining, &c., or sought his living by buying and Helling, was liable to become haiikrupt. And a person was held to be included within this liefihilion though he did not sell the wares that he bought, but converted them into saleable commodities wliich he afterwards Bold. In other words an artisan who purchased materials to be used in making articles for sale was held to be witiiin tho statute. Ld. Raymond, 741 : 4 Bun-., 2148. But it was also held that to bring a person within these statutes his prin- cipal means of living must have been gained, or at least sought to be gained by sonre occupation wliich fell within their purview. 1 T. Rep. 573, 2 Blk.,476. ^ ^ The 12 and 14 Car. 11, cap. 21, is the first statute in which tho word " trader" is u.sed. But the 6 Geo. IV, cap. 16, and subsequent Bankruptcy statutes adopt it as a term in use and well understood j and in the jurispru- deuco which commenced to grow up under the early statutes dud haa '\ \ \ WHO IS! A TRADER. 1-" \ ^ continued \o prevail to the present da}', it is used as a generic term des- criplive of tiie class i)fp«rsui)s liiible to hv 'ome bankrupt. The recent Eiierson6 to wh(.m the spec.iiic denominatioup are a;)[)!icabl3, scription of ciasMss, is th;.-< : tiiat itli'! bu.-?ine<.s ihty may transact and those oiily laliiui^ within the genera the ionntr come within the Act, however m that capacity ; but the other classi.-s only come \/'ithin it, if iheir !)usi- i?es8 iii.'ld'^ a proniinent position in their avowed or actual nieaiu; of living. 1 Doria &. Macrae, on Bankruptcy, p. 84. The deti.'iitiun of tradinir, which i.s jriven by the statutes of Klizabeth and James is theretbre sliii correct so far as it goes ; and a very considt.'rahle number of cases illustrative of its bearing— and of the distinctions which have arisen ui.on it, and upon sub- .«efpu>nt, but similar legislation, are col'ected in 1 Doria &, j\Iacrae, pp. 100 and sec].; ahil in Archhoid on Bankruptcy, pp. 3\), 40. The doctrine on this su'ijcci is thus summcil up hy the former at p. 100. Assim'.injjf th.'it the occupation undci' consideration is in itself of the nature of trade — they say that, " to constitute a tradiu"; in law, there must be a substantive and *' independent tradincr ; a {ienoral intention to trade," (or rather an intention to trade generally) ; " and. a Iradini.- as the means of gainiuLra iividihood." This of course only .ipplies to tiie general definition or description of a trader or person subject to become bankrupr, enacted in the earlier statutCB of Bankruptcy and ret;iined in the more recent ones, and not to the specific denominati'jus which are also detailed in tl:e latter ; anil it is in accordance witii the idea conveyetl by the word " iradei" in its ordinary accej)tation. VVInlo these specilic- deriominations therefore may not fall within the pro- visions ol this Act, except in so far as their cliaracleristics may satisfy that general uelmilion or description, there would seem to be no good reason why those and jill otiier ca.ses which do so satisfy it, should not, in Upper Canada, Uv! held to be within this statute. And if so, the thorough examination which the suhject has received in Enuland, lirst upon the delinitions contaiiied in the Statut'-'s of Kiizabcch and James, and afterwarde upon the porliv-ai of the more recent St.'ituto.'. in wluch that definition is retained ; hiv.^ ihe rnuUitude of adjudged cases settling every point upon wliich diflicidiy couid arise, will piobabiy render it easy in Upper Canada to distinguish between traders and non-tratlers whenever the statute requires such distiiiciion to be made. And it may be well in this connection lo notice the opiiiion of Mr. Smith, (>der. Law, p. 1), that the word "trader" Would receive in gcneial a somewhat witler construction than the Bank- rupt Statutes seem to justify, if it be used without reference to those statutes. In France no definitions of the various terms used to describe the class of persons su! ject to Consular jurisdiction, are to be found in the oidier legislation. And moreover there was not formerly any phrase or word like the word '* trader" in England, universally adopted as descriptive of that class, or as coni])rising willdn its technical meaning tlie various trades or occupations wliitdi made those who practised them amenabie to the Ctaninercial Tribunals. But a short examination of the powers of some of tlie mcst important of those Courts, will enable a tolerably exact idea to be attained, of the liuality of the persons, and the nature of tin transactions suljected to their jurisdiction. And thus the quality of the persons whom the law of Lower Canada would regard as being comprised within the designation of traders may also eventually be arrived at. The fr.mous tribunal of the Conservateurs de Lyon, is said to havo been the model upon which the Consular Courts were afterwards formed. The jurisdiction of thi.i tril>unal seems to have been extensive, and to comprise the rigtit of trying all causes of which the sulject matter was of a com- mercial character, provided the parties, or as it v.-ould appear by the declaration of 16t:9, one of the parties was a '^ marchand ou negociant." — 1* WHO IS A TRADER. t ' (See Edit of Charles VII, 1419, and the subsequent declaration of August, l699,^o.s'/.) The Old. of Henri II, 1519, authorizing the merchants of Toulouse to elect a prior and two consuls, gave to the tribunal so created, jurisdiction to decide all cases which might arise, " pour raison de marchandises, foires " et assurances cntrt les marchands etfabricants de Toulouse." The Ord. of 1563, Art. 6, gives to juges consids jurisdiction, ^^^ pour con- naitre des marchands, et de t cms proves et differends qui seront ci-uprcs mfis entre marchands ct pour fait de marchandises seulement, leurs veuces mar- chandci^ publviucs, leurs Jacteurs, servitetirs et commeltanls, tous mar- chands.^- These (ixprossioris would seem to limit the consular power to a comparatively fmiill class of those pen-ons who are certainly traders — but the remainder of the arliclo shews plainly that such was not the intention of the law. For it iioes on to .'■ay : soit qio: les differends proccdin* d'obli' gallons, ccdulfs, reccpisso;, leitres de rhnngd on de credit, rcponses, assu- rances, transports de defies et naval ior.sd'icdles, calcnls ouerreurs en iceux, co))}pa^nir:;, socicles ou associalinns drjd failes, ou qui sejfronl ci-apris. Thi,-; liuM.'ription of tlie traiisacstious which may be comprised within the phrase, pour fait de marf/iandises, shews that the word viarc/icnd aiid marchar.diites have in this Ordinance a wider signiticatinu than that whicii belongs to the words merehaiits ;i'id merchandise — and that as therein used, the word marckanu aj'proximatt;.. elosely to the word commer^ant — wliich afterwards came into use as a geucrie term coinjiiising ail kinds oi persons enixaiied in trade, and snbjecteil by reason of their ([iiality to the jiiiisdictioii ot the commercial f'ribiinals. And this interpretiiiiou of these phiases may be fully sustained bv authority. .luusse siir I'Ord. de 1673, tit. 1, art. 6, — tit. 12, art. 1 : 1 S.tvaiy part', neir., p. 'il4 ; 1 Pardessus, pp. 8 et seq., Nos. 8 Lt seq.' ; I Vincent, 127 ; Orillard, No. 121. And the jihrase pour fait de viarchandiscs used in the sense in which it appears in the C^d. of 15')3, seems to have been of fre(iuent occurrence in the oitici.il documents creating c deliningthe powersof Commercial Courts, by whatever name they miglit be called, (ISee the various Rdicls, Ortti- nances and Di'claralions on this subject — most of which are referred to in 1 Toubean. Liv. 1, Tit. Xfll.) A Declaration C'f tlie 8lh August, 1572, made with reference to the town of Tours, &c., uses nearly the same form of expression as the Oidinance of 15G3. Again, by a Declaration of the 29th March, 1623, having reference to cnusular jurisdiction generally, it was ordered tigate the law of Fra.nce on ihe subject under consideralion, it would no! hn ditficuU to di^'over Irom the begislalion and Jnrispruiieiien previous to 1(J73 : a great porlion of which niiglitbe cited as law in Flower Canada: what must liave been the nalme ot a man's occu- pation tn cause him to be subjected to coiisuLir jurij-dictioii. Hid if i'nither and autliorilative aid can bo obiaineit in the deve'opm'-nl ot I'd- subject, it is cvi^edient thai it shouM be sought tor and made ii.'e of. it has been already attempted to be slimvn, an^l it will b.^ hereafter assumed to be the fact, that the Ord. of 1073, converieil no act previuusly non-coiaineieial, inio a commercial act, but nu'rely cobccled rii;4 urfiuped tlie numerous transactions that previous enacitinents iimi iiiu jiidi^int'i.is of of the Couits b.ad idiaracteiiz.il as commercial ; ar.d gave lu llic jmi.-pru- ilence so created the (-anction of aiithuril y. 'i'hai thi,-. as.-iini,>l oii is essen- tially correi't. will not, it is believed, be inucn cciitrfiViM' d iri bower Canala ; nnd if it were, it could be supported if not ei-t.dili.sheil, by an array ol cltnlidus in'.u'i tu(j extensive lor the ])i(i-^ of rhe ck-c iie (■()/.';/ni'/'''>- imp 'jpi iaie to the subject. And the numerous and learned writers upon i atile to briiiu tlie litrht orniO'lrin e\;ierieufi'. avd a i t. I. for re.-^earch, to l>ear thi.' deVL'iopnii'i.t oj it-; j traders '" and. conari' If e (' nioiU- 'n\ ;mO|is ! ii'iai ir...ii--;ic ve ['e:'n fuelht es 1 aiti.de.s ions are 1, tJ3i ami (i33, ol that I'ude, defined and described. Art. 1. Enacts as follows: " Sent commer9ants, ceux rpu exercentdes actes do commerce, et en font " leur profession habitnelle." And articles 632 and 633, thus describe what are to be held in law to be actes de commerce : 6 WHO IS A TRADER. II '; i I I' i > Art. 632. " La loi repute acte de ccmnierce tout achat de denrees et " marchainiises pour les revendro, soit en nature, soitapresles avoir travail- " lees et mises en ceuvre, ou meme pour en louer simplement I'usage. Toute " entreprise de manufactures, de commission, de transport par terre ou par " eau." " Toute entreprise de fourniturep, d'agences, bureaux d'affaires, elablisse- " ment de ventes a I'encan, de spectacles publics ; *' Toute operation de change, banque ou courtage ; *' Toutes les operations de banques publiques ; " Toutes obligations entre negociants, marchands et banquiers ; " Entre toutes personnes, les lettres de change, ou remiaes d'argent faites " de place en place." Art. 633. " La loi repute pareillement acte de commerce, toute entreprise " de construction, et tons achats, vent«s et reventes de batiments pour la " navigation interieure ; *' Toutes expeditions marilimes ; " Tout achat ou venle d'asrres, apparaux et avitaillementp : " Tout alfretement ou nolissemeut, empruntoupictalagros.se: toute-? ** assurances ou autres contrats ccncernant le commerce de la mer ; " TouH accords et conventicms pour salaires et loyers d-ecpiipn'Tos ; " Tons engagements de gens de mer pour le service de bi'ilimeuts do " commerce.'' If these definitions introduced no new principle into the commorcial law of France ; but constituted merely the result of thi? lai.iours of the learneif men to whcrm the code owes its origin, in their search for a concise and clear description of the classes of persons aiul of transnetions previously snlijeci to the consular jurisdiction and ahout to bo rendered amenable to sitnilav tribunals nmler a different name ; Ihey may be aiiopttnl here as correct expo- nents of the law as to the classes of persons subject to the present .-^et, and as to the classL's of transactions, the practice of wliich will briiiir persons within its provisions. And the comments upon them of such men as Par- dessus and Masse will receive a character of authority which wiii greatly facilitate the decision of any questions that may arise upon the terms of this clause of our statute. If on the other hand these definitions are mere arbitrary enactments, having no fuundation in the old law, they cease to be of interest in this behalf, and render it necessary to confine the enquiry, to tiie state of the law pre- vious to their promulgation. It is coniendeil, iiowever, and with much reason, that in many respects, and specially in icspect of those matters legislated upon by the three above cited artirh's, the coife de coinmeive ilid not change in any materi;d deirree the ancient law. (becane sur Jonsse, com, de i'urd. de 167J, pp. -JSS; 305, in notis. 1 Vincens, p. 121. Orillard, No. 181 ; Merlin, Rep. to. Marchan- dises, fait de, Pozer vs Meiklejohn, Pyke, p. 11.) And any (Hie may verify the correctness of the assertions of these writers by compariiiij, in the arret. -^ and judgments of the respective periods, the persons and acts that have been adjudged under the ancient legislation and under the code respnctiveiy, to he Justiciables by the commercial tribunals. The essentia! elements of the definitions of the generic terms covimergant and acte de commerce wliic" are given by the code, may be gathered Irom previous legislaiion, and from the jurisprudence which prevailed previous to its enactment. Long befljre that time the word co^imfrfa/i/ had begun to be used as descriptive of per>ons amenable to Commercial tribunals. 1 Toubeau, p. 'ifiO. Salle surl'ovd. de IH73, pp. 41-5, 416,438, Anc. Den. vo. commer- fans; Rogron, jur. con. passim, Nicodeme Ex. des Com. And the sense in which it is so used seems lo accord precisely with tke definition given of it by the code. In fact the Code de Commerce appears to have performed in its turn, that which whs done with respect to a previous age by the Ord. of 1673 ; and although the progress and extension of trade, rendered expedient greater detail, no change was operated in the principles which should regulate the classification of a transaction or of a person as being commercial or non-commercial. ^ i\ »p WHO IS A TRADER. do As^nming then what it is believed might easily be more fully demon- fitratect, that the definitions given by the Code de Commerce of covimevQants and o{ actes de commerce, are only developments of principles which are to be found in tiie ancient legislation and jurisprudence, and correctly express those principles ; the commentators on the Code become valuable auxiliaries in the investigation of the true construction of the first of those expressions, which is used in our statute to designate those persons specially subject to its provisions. " Le commerce," says Masse, " envisage sous un point de vue general est done une communication reciproque entre deux personnes, dont I'une donne a I'autre une chose pour une autre chose qu'elle en refoit. Mais lorsque ces rappovts interesses ont lieu avec suite et frequemment enlre personnes dont, soit I'une ou I'autre, soit toutes les deux, se proposent un profit qui doit etre le resultat des communications ttablies entre elles, alors ce commerce est d'une espece particuliere, et constitue le commerce pro- prement dit. Finis viercatorum est lucrum. En ce sens plus restreint et plus usuel, le commerce consisle done dans une speculation oil i'on achete afin de revendre — et ou I'on vend ce qu'on a achete pour le revendre ; ou mieux encore, dans les diverges negociations qui out pour objet d'operer ou de faciliter les ecliaiiges des produits de la nature ou de I'industrie a i'effet d'eii tirer quelque profit." 1 Masse, Droit Com., pp. 3, 4. The latter part of this definition is taken verbalim from Pardessus, 1 Pard. droit com., p. I. It would be impossible witliiti the limits of the present note to follow the developments of this definition by M. Masse, oi his discussion of the various Actes de Commerce detailed in art. G3"2 and 633 of the Code. He appears to have ile.^ired to sh(3\v that the legislation which constituted these trans- actions, Aclof de Commerce, was not purely arbitrary, but was based upon principle and upon authority — and it is d.iliicult to read his lucid and logical treatise without being of o[)inion that he has succeeded in doing so. His opinion therefore also supports the position that the Code de Commerce enacted no new tiling in its ilefinitions of tiaclers raid of commercial acts, but merely declared what was dt-diicible from the legislation and jurispru- dence in three and prevailing at the time it was promulgated. It may i)robab'v therefore be safely assumed, that by an examination of the old law whicJi is actually in force as law in Lower Canaila, aitted by the light which may be derived from the new law and from the commen- tators upon it, those transactions which are Acles de Commerce, can be accurately defined and ascertained, and that he may be taken to be a trader who engages in them and makes of them his habitual occupation. The qualifying word " habitual," must not, however, be taken in a sense, either too wide or too narrow ; as always requiring a constant succes- eion of commercial trans.'ictions, or as being always satisfied by the occur- rence of a limited number of them. On the one hand a manifest intention to make of commerce a habitual occupation, 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 merchrv^.dise will qualify him who opens it, as a trader, though his actual sales may be few, or even though he may have failed to elfect one. 2 Masse, p. 162, — 1 Pardessus, p. 78,-1 Boulay-Paty, Des faillites, pp. 9, 10, 11. On the other hand a man may do commercial acts without thereby constituting himself a trader — for he may buy double the quantity of pro- vision he requires for his household, with the intention of making a profit by the sale of what he does not want — and may actually sell and make that profit — yet he will not thereby become a trader. 1 Pard. loc. cit., — 1 Masse, p. 161, — Orillard, p. 4,— Boiinin, Leg. Com., p. 5. See also on these points, 1 Toub. vol. 1, pp. 274 et seq., though he strains the law in favor of the consular jurisdictions. The English law on this point is in accordance with our own. There in order to make a man liable to be a bankrupt by buying or selling, or by the workmanship of goods or commodities, it was necessary that there should be a repeated practice of it, or a commencement of it, coupled with an intention to continue it ; for a single act of buying and selling, unaccom- 8 n [I WHO IS A TRADER. panied by such intention, would not be sufficient. But if that intention existed, the extent of the trading, whether large or trifling, would be imma- terial. Archbold, p. 43, and cases cited. Wells vs. Parker, 11 T. Rep. 34, and Summersett vs. Jarvis, 3 Brod and Bing 2. In ex parte Magennis, 1 Rose 84, Lord Eldon said. " the question of trading depends not on the quantum of dealing, but the intention— and it is enough if a man will sell to any one who comes to buy." See also Ex parte Galliraore, 2 Rose 428 — Holroyd, vs. Gwynne, 2 Taunt, 476. To establish therefore that a man makes the engaging in commercial transactions his habitual occupation, evidence of the intent to do so, with but few instances in which he has done so, will suthce ; while if external evidence of the intent be wanting, a much more exten.'iive series of trans- actions would be required to esUibiish his commercial quality. And the Judge will be greatly facilitated in deciding upon such an enquiry, by the Erevious occupation of the man, his nominal occupation at the time, if ho as any, and by the character of the transactions proved to have been entered into by luTn. Taking then as guides to the interpretation of our Statute in the respect under consideration, the legislation and jurisprudence of France from the earliest times to the present day, the following persons may be suggested as being, amongst others, subject in Lower Canada to the provisions of our Statute : I. Merchants, viz : persons habitually engaged in the buying and selling of goods, wares and merchandise for profit ; _ 2. Manufacturers of goods, warns or merchandise lor Kale ; 3. Bankers and dealers in money ami commercial paper and securities ; 4. Factors or commission merchants ; 5. Brokers ; 6. Auctioneers ; 7. Insurers and underwriters ; 8. Common carriers for hire, whether by land or water ; 9. Hotel and tavern, eating-house and boarding-house keepers ; 10. Warehousemen and wharfingers ; II. Mechanics and tradesmen who buy goods, wares or merchandise, either in the form of raw materials or wholly or partially manufactured, with intent to sell, after having by their labour improved the articles so purchased, or converted thum into something else ; such as .lewellers — Boot and Shoemakers — Builders— Meidiant tailors — Hatters and turriers — Watch anil clockrnakers— Shipbuiluors— iVinlers — Butchers — ?>Iil!ers. The proposition that mechanics and tradesmen under the circumstances mentioned, are traders, has been at times more or less disputed. Kespect- able juri.--consnlts of the sixteenth ami seventeenth centuries are to be found who hold tliat he who purchased ir""d> for the purpose of applyiuir to them his own labor, anil of afterwards ,-ieIiiiig them, was not a trader, althoush they admitted that he would be, if he so bi;ught tliem with the view of causiii:r them to be worked upon by others, and of afterwards selling them. See authors cited in 1 JMas.^e, p. 120. And certain mudern authors though unwilling to deny the general propo.-ition, have endeavored to make a dis- tinction between tliose aitisans wlui !-iiy inaterinls and having worked up ju them, oiler ihetn again ior sale, 'AnK\ liiose wiio only buy si;e.h materials and bestow labour upon them when nrd.'rs for t'lem are recxdved from a customer, 'liie former they ib> not deny to b.' tradeis, but the latter they hesitate to admit into the rank of Co)}nvn'i:antii, more especially if the work be of more v;;:ne than the mnterial- puroha.'^ed. 1 l^iriler^si\s, No. 81. Armand Diilloz, Vo. Conimer^^an', o -JO. fait .Mr. Tardessus in favoring a construction which seems to ]\' t'ouiuled on no principle, does so wiih such hesitation as to take from his ojiinious in tiiis instance the weight which is ordinarily and justly attached to tliem. On the other side of tiie question, iiowever, may be ranged a greater array of learned authors, who hold that the only distinction sustainable on principle is between the artisan who buys materials, and him who simply works at his trade. The first is a trader, the latter is not. 1 Toubeau,'pp. 277, 278, 279. Jousse, Ord. de 1673. Tit. 12, art. 4. 5 Nouveau Denizart, p. 449. 1 Jur. Con. p. 17. 2 WHO IS A TRADER. a > Bornier, 736. l^Mas^e, pp. 20 et seq. 1 Boulay-Paty, Des faillites et Banq. p. 15. 1 Vincens, p. 126. Orillard, nos. 148, 149. 2 Carre, p. 542. And see also the numerous adjudged cases collected in De Villeneuve et Masse Diet, des Cont. Com. Vo. Commer^ant, § 2. In this respect the authorities upon the older English statutes, whose terms permit of no greater latitude of construction than those of the contem- poraneous French enactments, aie at one with the weight of authority in France. " Persons," says Mr. Eden, p. 8, *' who buy the raw materials " of trade and sell them again under another form, or improved by the ** labour of manufacture, have always been considered traders, liable to the " bankrupt laws, such as bakers, brewers, &.c., who all purchase the raw " material, which they re--*peclively mniiufacture and sell for a profit after *' a certain amount of bodily labor ban been ex t)t'nded upon it." See also tlie cases collected in Cooke, pp. 48 et seq. Dalv vs. Smith, 4 Burr. 2148, 3 Mod. 330. Com. Din-. Bankrupt A. In Lower Canada the laws respecting evidence in commercial cases and on the subject of trial by Jury, iiave rendered it occasionally necessary to discriminate between acts and petsons possessing a commercial character and the contrary. The 25 Ceo. III., cap. 2, aiieady alhuled to, provided that " every person having suits at law and actions in any of the said *' Courts of Common Pleas grounded on debts, promises and contracts of a " mercantile nature ordy, between merchant and merchant, and trader and " trader, so reputed and understood according to law, should be entitled to " a trial by Jury." And although this restrictive provision has since been modified, (see the Statutes embodied in the Con. Stat, of L. C, pp. 791-2, and the Act of last f>essi()n, intituled: "An Act respecting Juries and Jurors,") the character of the subject matter of the suit and of the parties engaged in it, has always been and still is an element in the consideration of the right to trial by Jury in civil matters. And the same Ortlinance, § 10, provided that " in proof of all facts con- " cerning commercial matters, recourse shall be h;id in all the Courts of *• civil jurisdiction in this province, to the rules ut evidence laid down by " the laws of Englantl." And again, the same Ordinance, § 38, authorized execution ag;i.inst the person of the defendant for the satisfaction of all juiigmeiits given in com- mercial matters between merchants and traders, as we!! as ol all debt.-; duo 10 merchants or traders for good.'^, wares ami rnerchasidise.^ by them .'^old. And the Act 10 and II Vict., cap. 11, made various provisions respecting ** Commercial matters", iiitriuhicing with respoct to jutions based upon thein, a particular species of liniitatiuu — and cer!;iiu special rules ot praclice. Upon these Statutes there have been freciutut di.-cus.-ion.s in Lower Ca- nadian Couits of jn.'^lice. and although cornparalively few of l!ie deci-ions upon them have been preserved, owing to tlie want of reports while the jurispruilence was t>eing settled — enough are to bi^ found to indicate the views of our tribunals np.m the points under considLMatioa. In Poi:er vs. iVJeiklejohn, Pvke's Ken , r,. 11. \vii:cli wa.-. an action b nierciiaiit against ;!. bievver the latter, and not delivered lack held applicable. In I'ozev vs. Clapliam, a dcrnarat for an alleged ov( rpaynieiil in making a retmn of the proccoils ('f gootls ,«old at aucti(.n, was held to be a eoniinercial inatier. Stuiul's Kep. \'1'2. In Pa!ter.-on vs. Welsh, Quebec, 181!*, a tuv(,'ru keeper was held to be a trader. And a similar decision Avas renderoil in fth'P.oberts vs. Scott, (Quebec, 18-.'l. in liiveis vs. Duncan, Qnebec, 1819, it v/as held tiial in a-! acti;;!! by a merchant against the master ot a ship fui- ihe v.uue of go:".!-; lost on a voynii-e to Quebec, the sid'ject matter was between a merclianl and a trader, and that either party had a right to a trial by jury. Hiring river craft was held to be a fact of a commercial nature in Brehaut vs. Merau, Quebec, 1811. The endorsement ^;oMr aval of a promissory note, is a fact concerning a commercial matter. Paterson vs. Pain, 1 L. C. Rep., p. 219. Pyke's Rep., p. 11, \vii:eli wa.-. an aclion by a or the price of a ipuuJ.ily of beer :'!o:ed with of ev!>!t;ncu were tiie Kn^li.'^h rule-' 10 VOLUNTARY ASSIGNMENTS. The sale of a wagon and harness by a hotel keeper to the defendant described as cultivateur et commer^ant, is a fact respectiag a commercial matter. Vandal vs. Grenier, 6 L. C. Rep. 475. A contract by a carpenter and joiner to build a house for a person not a trader, is a commercial matter. Kennedy vs. Smith, 6 L. C. Rep. p. 260. A contract between a bricklayer and mason and a railway builder, is a commercial matter, as being one which in Fr.ince would have been within the Jurisdiction consulaire. Fahey vs. Jackson, 7 L. C, 27. A contract of Insurance against fire between an insurance company and a non-trader, is a commercial matter. McGillivray vs. The Montreal Insurance Co. 8 L. C. Rep., p 401. A contract to furnish materials for a house, and to build it, is a com- mercial contract. McGrath vs. Lloyd, 1 L. C. Jur., 17. A contract of affreightment, is a commercial contract. The Secretary of State vs. Kdmonstone et al., 6 L. C. Jur., p. 322. A contract entered into with commissioners appointed under an Act of Parliament to provide stone for making a canal, is a commercial matter. Mackay and R' therford, 13 Jur., 21. On the other hand, a sale by the proprietor of a farm, to his lessee, of a quantity of lirewood and hay remaining upon it when leased, is not a com- mercial transaction. Desbarats vs. Murray, 3 L. C. Jur., p. 27. And a loan ot money by a non-trader to a trader without averment thai it referred to a cumn;ier('ial matter, is not a commercial fact. Wi.-ihaw vs. Gilmor, 6 L. C. Jur., 319. A loan of money by a " bourgeois " to an " ouvrier " is not a commercial matter. Asselin vs. Mongeau, 5 L. C. Jur., 26. 8 OF VOLUNTARY ASSIGNMENTS. I 1^ ' Procceilinjrs for vohmtary assignment of an Insolvent estate ; meet- ing of cre- ditors to be called. Schedules of creditors, &c. Attestation. Assets, books, &c. fi. Any person unalilo to meet his engagements, and desi- rons of making an assigiunenl t)f his <>stale, or who is rei}uii'ecl so to do as hereinafter provided, may call a nu-eting of Ills cre- ditors at his usual phiee of business, or at his option at any other place which may l)e more convenient for them ; and such minuting sliall be called by advertisement (Form A), stating in such advertisement the object of such meeting; and at such meeting he shall exhibit statements showing the position of his affairs, and particularly ^ scliedule (Form B), qon- taining the names and residences of all hi.s creditors, and the amount due to each, distinguishing between those amounts which arc 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 nego- tiable 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 a statement 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 creditor : 1. Or tcho is required so to do — Viz : by two or more creditors for sums exceeding in the aggregate $500. § 3, p. 2. i .1 VOLUNTARY ASSIGNMENTS. 11 2. At Tiis option at umj other place — There is no expressed restriction even as to the section of the Province in which the place of meeting may be fixed, proviiled it be more convenient to the creditors than the locality of the debtor's place of bu^itiess. Thus the insolvent, being a resident of Montreal, might hold his 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 obligation upon tliem 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 othcial assi^■^ees, lie must select one who is resident within the same County 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 tluin his phico of business, and less convenient to his crediturs, and assirm to the assiyneo named at such meeting, his estate would become liabio 1o compulsory licii-idalion under § 3, p. i. For this would not be a mere neglect or irregularity covered by p. 5 of § 2 ; but aa assignment made "otherwise than in the maimer prescribed by this Act." 3. />'// advert isi:,iif)t. — The mode of giving notice in all cases in which the act. requires it to be given " by atlverlisenient," is regulated liy §11, p. 1, which should be strictly followed. 4. Statements s/ieirhif/ t lie position of his (ilfairs — Ord. de 1673, tit. XI,' art. 11. C. Com. art." 439. S. act § 81. E. act § 142. 5. Aiiioxints ichicli arc actvally orerdvc, or for vhicli he is direc'li/ Hnlile, and tliosc Jvr which he is only 'iahle h'direcfl!/, and irhic'i hare not becime due — Tiiis distinction is required to enabie the voting at the prcHminary meet- ing to be properly regulated ; those persons t-) whom the insolvent is directly li fredilors lutiy nniiic an assiqnco, to whom sur-h assigniiienl may be made ; aud if a vote be taken upon isueh noininaliod, each credilor shall only re))resent in siieh vote the amount of dhvct liabilities ofllu; Insolvent to him, and the amount of indirect liabilities then aeluailv overdue; antl thereafter the Insolvent shall make an assignment of his estate and elfecis to the assignee so chosen ; iJ 1. At sncli mcctiiuf — Tlie meetinir should be regularly ovLranized. And correct minute.s con- taining a list of all the creditors present or represented, and full details of ail the proceedings, sliould be maile ;it the time and preserved, in order that evidence of proceedinirs of such meeting may be available if subse- quently reijuired. And it would be proper to appoint a Chairman and Secretary' as is usual at ordinary meetings. Sec Murdoch on Bankruptcy, p. 289, in not is. 2. ^^lnJ nnrne an Af^sinnec — There is id rostrleliun as to the p(>rson who may be no!nii;a1f\l for Assignee by tlie creditors. .He need not be a creditor, nor an ofPieial assignee. 3. Tf :( ro'e he /iil\n — Tlie uiajitriiy in number of the cro-iitors for sums above SlOO, present or repre.-ented will decide, iftliey also reyircsent llu' mitjority in va'iie, § 11, \), 2. If the tv.'o majorities dilfer — see yA/./, tor the pioeeeilinirs to be taken. In Kncriand the inajoiity in value appoint, 24 and 25 W 131, § 116. So al.so in Scotland, S. act -3 lol. The Uiode of vliably rciidor the C'slate f)t llio tlubtor liablo to compulsory li(piidatioii under s' ;}, p. i. JiUt a (It'lectivii piMiiiiiriaiico ol ihe n ijniremoiils ol l!u! iicl in respei't of any proceedir.Lr, wnuM In; cnred, under lliiri claune, liy u subst-Hjueiit a9siy[ii- ment to a competent a5i>igneo. Form of Pooil 6. Tin; cited or in^lnun('nt of :issi|L2;iMU( n1 may ho in ihi lorm ofas.^iguuitnt, (j_^ (^j. j,, r^^yy o\\\r\' furm ('.'iuiv;i!cnl rhcf'to, ;\n<.\ ii" cxccuKnl in Upiicr Ciitiada shall \n' in diiplicai',' ; tuul a copy of the list of cvi'ditors pnxhierd a1 \\\v \\\:'\ iwvoUwj; ol" crjulitors shall l)e Counterparty a|)j)cndcd 1o it ; and no p;irlicuhir dcsrrij)tion or detail oftli efdeed. j)rop"i'ty orcllrcts assigned iv.'cd he inscilcd in such ilci-i] ; an„ any iiimiber of coiinlcrptirts of such deed rcijnircd by tin; assig- nee shall be cxccut(Ml by the InsoiNcnl al the rccpiest of the assignee, cither at the time of the execution of such deed or instiunient, or afterwards, to which counlerparls no list of creditors need be aj)pended ; 1. Xo jiiirlicnlur (hscrijAion or def'til — There is n^Mhing in the Act which requires tliat a debtor should have anything to aBsij^n ; as in allonling means of relief to dehtors with insufU- cient assets, those who have none at all could nut reasonably bo excluiled. 2. Coitnterpdn's — EfTect ofas- Biguruent, as to esiate of insolvent. Exception. For registialiou. 7. The as^Isjnn-ient shall be held to convey ami vest in the assignee, tlu! books of ;iccount of the Inst)lvent, ad vouchers, accounts, k-tters and odier papers and docmnentsrcKiting to his bu:dness, all moneys and negotiable pa])er, slocks, bonds, and other securities, as well as all the nial estate of the Insolvent, and all liis interest therein, whether in fee or olherwis<', ande.isoall his personal estate, and uJt)veabh' and immoveable j)roperty, debts, assets and elleets, which he has or may become entitled to al any time befor(; his discharge is elFecled under this Act, excepting only such as are exem|>i from seizure; and sale under execution, by virtue of the several statutes in such case made and provided ; 1. Exccptiiui onhj such as arc cxciript — See Cons. Stat. L, C, pp. 795-6. E. act. § 117. Duplicate or 8. Forthwith npon the execution of the deed of assignment, authentic jlie assignee, if appointed in U]jper Canada, shall dej)osit one nient°to^be^'^' ^^^ ^l^*? duj)licates thereof, and if in Lower Canada, an authentic deposited, and copy thereof, in the oflice of the proper Court ; and in either Tvliere. case the said list of creditors shall accompany the deed or instrument so deposited ; 1. The proper Coir-t — That is, in Upper Canada, in the ofuce of the County Court, in the County or Union of Counties in which the proceedings are carried on. And in Lower Canada, in the office of the Prothonotary of the Superior Court ia the District in which the proceedings are carried on. § 12, p, 4. COMFULSOKV LIQUIDATION. \5 9. If lln' Insolvont nossr^sos rojil fstatf, tlic deed of nssiirn- „ ., .. nvMit limy be (■iir<\:/isi('ri'sc^>lvent nn-nl ol any kind (•x<'cnt<'d by tli(; Insolvcnl, or wliicli oflii-r- L.tite. wise WDidtl liavi' all"<'('l»'d lli^• real cslalc, sliall linvc anv I'orco or ctli'fl ih'Tcon ; and if the real vs\;i\(' l.o in l'|)[)(r ("'Hiada ^^^^^nj^jp^t and liic deed of aistsignnicnt be cxct'nU'd in Lower Canada vxiciu.l in before^ Nolaries, a (.'opy of tlu; deed fortified undtrthe hand ,''•''• °''.'-- ^• and olucial seal ol the Notary or oflier publie ollicer in wliose c.l in tho other custody tiic oriirinai I'lnains, niMV Ix* registered wiihoul odicr section of the evidence of the e\(!cmi(,'i there(»f, a/ifl Avithout any lueniorial ; iej''i"cc. and a certilicate of such re^i*ilration may b»? endorsed upon a like copy; and if the properly b'" in Lower Canada, and the deed of assii^nment be exeenled in l'|)per (^anachi, it iiiiiy bo . cnregistered by nieniorial or at full length in thf usual manner ; but it shall not be nec(iss;u'y lo enre^ister, or to refer on regis- tration in any manner to the list of creditors annexed to the deed of assignment ; 10. If such deed be executed in Ui)per Canada, according Peed executed to the form of execution of deeds im'vailing ther(\ it shall have i" ^^ ''•, ^"^rm ., r I a- . • T /-' r •!• •* 1 1 1 to have t'ji'co the same loree and elleet in J^ower Canada as j| it had been i,j l. C. nnd executed in Lower Canada before notaries ; and if such tleed v'cc vena. 1)0 executed in Lovrer Canada liefore notaries it shall have the same force and eflect in r])pcr Canada, as if it had been exe- if Notarial. cuted in Ujipor Canada, according to the law in force there; and copies of such deed, certified as aloresaid, sliall constitute, before all courts and for all \)uv\MSCi^, prbndfarie proof of the execution and of the contents of the original of such deed without production of the original. the And irt in COMPULSORY LIQUIDATION. 3. A debtor shall be deemed insolvont and his estate shall become subject to compulsory liquidation : Insolvent — Persons unable to meet their liabiUties, have been divided into two or more classes both in England and France — the distinction between them having relation either to their occupations, or to their conduct. In England the broad distinction between an insolvent and a Bank- rupt Ava.s that the latter was a trader, while the former generally wan not. The degree of the relief lo which these classes were respectively entitled was diiterent also, the Bankrupt being as a rule capable of obtaining a dis- charge from his debts, while the insolvent could only receive protection from process. In consequence of these distinctions the words Bankrupt and Insolvent had a precise technical signification, and conveyed very ditlerent ideas, although the laws applicable to both dilFered only in detail, except aa to the relief which the debtor could obtain for himself. The Bankruptcy Act of 1861, seems however to have abolished the insolvent courts, and to have made every one amenable to a system to which the term Bank- ruptcy is applied. The word "insolvent" therefore is not used in this Act in the sense it had acquired in England, but corresponds with the English word Bankrupt in its more modern meaning. In \rhat case3 the estate of aa insolvent tnulcv shall Leoome sub- ject to compul- sory liquida- tion. I ■'< I .li 16 ACTS OF INSOLVENCY. in France the inability of a person to meet his engagements might be describftd as deconfiture, or aafdillite, and Xhefuillitg under certain circum- stances became hanqueroute. A state of dccoirliture — which is synonimous with insohahilite (Nonv. Den. Vo. Deconfiture) is described, by the law of Lower Canada, as exis- ting <'quand les biens du debiteur, taut meubles qu immeubles, ne suffisent " au.v rreanciers apparents." (Cout. de Paris, Art. 180.) But in France, the mere stoppage of payment by a trader cause 8./?n7/<7<'.— And the question whether liis assets if realised, would meet his engagements or not, is()f no importance. '' i.a failiite est un etat de cessation de paiemens, on pour cautie d'lnsolvabilite reel le ou pom- cause d'embarras dans les alFaires." Celui qui cesse ce.s jmieniens dans le laiiLrage de commerce (says Boulay- I'aly) — esl en etat de failiite pour scs creauciers. Peu iniporte que (.I'ailleurs il puisse ctre solvable : sitot qn'il n'aciiui'te j)!us ses obliuatioiis coinmer- ciak's ii faillit a ses em'-aaeinents, ct sa conduiie, comme commer9ant dait etre examinee." Bculny-I'aty, Tit. 1, Sec. 1. But the woni i^auiiiiipicy, — hdniiiieroiile, — untlcr the French ."system, still convey-' the me.uiing which it originally possessed in f^ngland — iiamely, that the mi>li)ili:ne of liuj debtor is not unaccompanied by a greiiter or less degie-! i.l culpabiiiiy. " La Bancjuenuite est relat de lout commer9ant failli contie leipiel s"elevent des tails d'incondu'te, d'iinniu- dence ou de frau le." •'}. Hedarride, No. 120'2. Mouv. Den. Vo. Baiiqne- route ; Jousse, ()i\\. 1673, ]). 141). But while these or siinil.ir disliiictions have prevailed in FraiuKs fcr PL'V(Mal centuries, ami are familiar to every lawyer, they are not recognized as law in Lf-wer Canada. An}' person, whether h Bankruptcy law has a very similar provision in the 12, 13 Vict. c. 106, § 67, which is not repealed by the new statute ; and this clause in its turn v/as taken nearly V(rbalim from the 6 Geo. 4, cap 16, §3. And a similar enactment is made in § 70, of the Bankruptcy Act of 1861, as to non-lraders. An immense mass ot authorities on the construc- tion of this and the other definitions of acts of Bankruptcy contained in those necticiis, is collected in 1 Doria and Macrae, on Bankmptcy, pp. 127 et .-eq. ; also, in Archbold, on Bankruptcy, p[). 48, 49, 6:2, 63, and in Griffitli's Bankruptcy Act, pp. .31 et seq. b. Or if he sccielcs or is jminediatt'ly about lo secrete any Secreting part oi Ills eslat<^ and effects with intent to defraud his estate, oredilois or to defeat or delay their demands or any of them ; it IS not g him actci or in one linally as in France alter large, or from I I Or if he necrelcs, or is immediately about to secrete, * ^- * idih intent, iSfC. 1 his also nnder the existing law cf Lower Canada, forms a sufficient grouiKl for the i.ssue of a cap. ad res. or of a saisie arret before judgment. And there are numorons CR.ses reported, illustrative of the cojistruction nut upon this provision by the Courts. ^ee ^h;iw vs. McConnell, 4 T,. C, 49. Dumont vs. Court, 7 L. C. Jur., 119. iMo'son's Bank vs. Leslie, JVIontreal, 1863. .Macfarlane vs. Lynch, Montreal, 1SH4. Langley vs. Chamberlin, 5 L. C. Jur., 49. There docs not appear to be any act ot Bankruptcy similarly described in the Knglish Acts, though some of those which are to be found there, might conslimte a frandulenl secreting. .Such, for instance, as the Bank- rupt mtikiiig a Irautlulent grant, conveyance, jzift, delivery or transfer of his assets, which was the aci that was held to be a fraudulent secreting in Laiigley vs. Chamberlin, and in Molson's Bank vs. Leslie. c. Or if he assigns, removes or disposes of, or is about or Frautl>ileiit!v atterrijits to assign, re^iove or dispose of any of his [)roperty a^3ign\r.« with intent to defraud, defeat or delay his erecJitors or any of them ; Or if he assigns, removes or disposes of, with intent, Sfc. This would seem to be very similar in its purport to the last clause, at least a:5 regavils Lower Canada. The acts describi-d in it would constitute a frai (Inlent secreting. It is nearly identical with the acta of Bankruptcy, Iweltihiy and fouiteenthly mentioned in the English Act, and would be constiued in Upper Canada in a similar manner. .See the discussion of these clauses and the cases collected upon them, in Archbold on Bank- ruptcy, pp. 51 et seq., and 1 Doria vs. Macrat , on Bankruptcy, pp. 136 et seq. r;^ rf. Or if with such inlent he lias procured his money, goods. Or procuHuj} chattels, lands or property to be seized, levied on or taken jt to bo seize.-, under or by any process or execution, having operation where I'i execution, the dtblor resides or has property, founded upon a demand in its nature proveable under this Act and for a sum exceeding two luindred dollarvS, and if such process is in force and not discharged by payment or in any manner provided for by law ; 2 ■I 18 ACTS OF INSOLVENCY. I Or being im- prisouccl ill civil actiitn, Or if tvUh such intent he has procured his money, goods, ^c, to be taken in ewerution. St-e lOtli Act of Bankruptcy in English Act. Archbold, p. 54. 1 Doria and M., p. 134. e. Or if ho lias been actually imprisoned or upon the gaol limits for more than thirty days in a civil action founded on colli rncl for llu! sum of two hundred doUars or upwards, and istill is s{» imprisoned or on the limits ; or if in case of such imprisontncnt he has escaped out of prison or from custody or from tlic limits ; Or if lit' hfin been actually imprisoned. A siruil.ir pinvisioii to this is to be found in § 7l of the Fliiirlish Bank- ruptcy Ait of 1861. which is liowever merely a re-enactnnent of a clause ol thn fc;iih Act, of 1819, (§ 69). See Archbold, p 63, aiid 1 Doria and JNlacrae, p. 156. Or refusiti"- to J- ^'' '^ '^^ wilfully neglects or refuses to appear on any rule .appear. or order retmiring his apjiearance to be examined as to his debts under any statute or law in that behalf; Or to obey ordera for payment. g. Or if he wilfully refuses or neglects to obey or comply with any such rule or order made for payment of his debts or of any part of them ; Or any order h. Or if he wilfully neglects or refuses to obey or comply cr decree in with tht; order or decree of the Court of Chancery or of any of lancery. ^j^^^ judges tlKM'eof, for payment of money ; Or if he u'ilfuUy refuses or neglects to obey an order to appear for exit mimtt ion ; Or to pay his debts ; Or It) pay money. '1 htii-e iiie similar to the 76th and following sect^bns of the English Act of 1861, and lliey are tnoru particularly applicable to iJpper Canada. 9 «)r assignii;^!; /. Or if lie has made any g(meral conveyance or assignment generally, tx- of his [)rop('rty for th(* benefit of his creditors, otherwise than this Act^ ''^ ^''^ manner prescribed by this Act: Or if he has made any general conveyance or assignment. This would be helil in England to be an act of Bankruptcy, as being of neccHsit)- a fraudulent conveyance, because it is said, as the result would be to defeat or delay the creditors, such would be held to bo the intent. Stewart vs. Mootiy, 1 Scott, 777. Siebert vs, Spooner, 1 M. and \V. 714. Chase vs. Goble, 3 Scott N. R., 245. By making it a substantive act of Bankruptcy, however, its application ia extended, and discussion is preventeil. Demand of 2. If %XT^\§^ ceases to meet his commercial liabilities assignment, if generally as they become due, any two or more creditors for BotmeetTia siunis exceeding in the aggregate five hundred dollars, may commercial make a demand upon him (Form E.) requiring him to make liabilities. ^n assignment of his estate and effects for the benefit of hia creditor.s ; ^ ACTS OP INSOLVENCY. 19 r 1. If a trader ceases to meet his commercial liabilities generally as they become due— The stoppage of payment by a trader has always been regarded in the commercial world as an indication if not as conclufiive proof of insolvency. If not proof of the insufficiency ( f the debtors assets, it establishes his iiifibility to carry on his business ; or in other words to fuliil his engagements to his creditors. Whenever this occurs it becomes the ri^^ht of the creditors to enquire into the affairs of their debtor, ami his duty fully to inform them of everything which it is their interest to know. All this would result from natural equity as applied to the relations between the dabtor and his creditors ; and piac^tically obtains whenever the failing debtor is disposed to deal fairly with his creditors. And it is at this p(>iiit tliat it becomes also the interest of the creditors to assume an active i)arl in the inanagement of the debtor's estate ; — for the fact of his cessalion of payments affords a strong probability, auih as experience has slunvn, almost a certainty, that his assets will do no more than pay tlieni \v:i,it is due I here has been great (iiver.-,ily of opinion on tiie question wiielher or no, the power of assuming possession of the estate should be given to the creditors at this stage, and rlie legiislatiiiii of tlie two great connnercial countries of Ei. rope has been ■lissimilar on this point. in England the entire stoppage of payment by a debtor would not render him amenable to the Bankrupt law, the acts of Bankruptcy there being eiise — nn ne devrait pas ioujours voir un signe de cessation de.paiemens dans un oti nuelques protets. Combien de commerpms. mime dans lei^ grandts rilles, nutis surttnit dans les pelites, oh les ressources pour lealiser prompltment, soit des eff'ets d tongs termes soit des marchandises, sont e.vfrrmement rares, se Irouvent avoir leurs magasins et teur portefeuitles remplis et sunt nfunmoins Jorcis de taisser protester des engngtmens qu'ils ucquille t ensuite ! 4 Hard. p. y.'SS, No. IIOI. See also 1 Bedarride, des Kaihiies, No. 18. 2 lV1a«86, 1148. De meme (says M. Renouard, p 127) que qiietquts paiemens refuses^ pour des motifs speciaux, ou par suite de conli-siatinns parficfflieres, ne constituent pas en faillite le commfr^ant qui continue a acquit ter rtguhere- ment VensevMe de ses engagements ; de meme tiussi, qm-lques paiemens operes n^empecheni pas que la faillite ait lieu, i he discretion of the Judge 2* I'fe 5 !l H it 20 PETITION FOR PROTECTION. or Court must be exerciseil in the decision of each case accordiri<^ to cir- cumstances, for it is plain that the same number of failures to pay, which in one case woiihl be (lisregarded as affording no evidence of stoppage, might in another establish it conclusively. The words of the clause would seem to avoid ambiguity as much as could be anticipated. Payments of commercial liabilities generally must cease, which could not be said of isolated and intermittent instances i>f iion payment. While it might with propriety be considered to have taken place, though but few cases of noa payment had occurred, where the debts left unpaid were lajge, and where payment was not resumed. It is also made essentia! that the unpaid liabilities should be commercial, thus constituting the only case in which the jurisdiction created by the act is both real and personal. 'I'his is similar to iho rule ot the French law, as expressly enacted in the Code of 18i)7, an. 441 ; ami as estabiisheil by the opinions of the writers upon the amendment of 1838. 2 Masse, p. 307. I Redatride, des failliles, p. 27. 2. Any two or more creditors — ^^ An additional precaution against a rriscon-struction of this clause, and against the use of the act by an exacting creditor as a mode of enforcing payment of a t traders who were really insolvent. 4. If such petition be rejected ; or if while such petition is If th« petition pending, the debtor continues his trade, or proceeds with the be rejected or realization of his assets ; or if no such j>elilion be presented "^Qt^j^^J*^" 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 assignment within three days after such meeting, or if there be an adjournment thereof, then within three days after such ad- journment ; or if having given notice of a meeting of creditors, Liquidation as required by the second section of this Act, he neglects to to be comp\ii- proceed further thereunder, hi8 estate shall become subject to ^^^^' compulsory liquidation ; I. If the Insolvent neglects to call a meeting — it '1 he &7lh chapter of the Consoliiluted Siututes fur Lower Canada enjicts thai somewhat similar facts shall constitute a suflicient ground for the issue of a saisie-arret belbie judgment, or a capias ad respondenduin. It is therein enacted, that if it be staled in an affidavit that the defeiulant is a trader ; thiit he is notoriously insolvent ; that he has refused to compromise or arrange with his creditors, or to make a cession de biens to them, or for their benefit, and that he continues to carry on tiis trade, the debtor shall be held to be about to secrete his goods and chattels with intent to defraud his ! creditors. Cons. Slat. L. C, cap. 87, § 0. 5. Bui no act or omission shall justify any proceeding to But proceed- t' place the estate of an insolvent in compulsory liquidation, J^gs must be unless proceedings are talam under this Act in respect of the Jhrce monthe same, within tiiree months next after the act or omission relied upon as Hubjecling such estate thereto ; nor after a voluntary ! i •l 22 ISSUE OF ATTACHMENT. i I J. t\ i Proceedings lor issue of Writ of at- tachment of debtors estate, iu L. C, Declaration to accompany ■vrit. assignment has been made, or an assignee appointed under this Act ; 1. Within three months — In England the period is twelve months. Consolidation Act of 1849, § 88. In Scotland four months ; Murdoch, 223. 2. After a voluntary assignment has been made — That is, a vnluutary assignment ma'le in the manner prescribed by the Act ; for an assignment made in any other way would be of itself sufficient ground for proceedings in compulsory liquidation 6. In Lower Canada an affidavit may be made by a creditor for a sum not less than two hundred dollars, or by the clerk or other duly authorized agent of .such creditor, setting forth the particulars of his debt, the insolvency of the person indebted to him, and any fact or facts which, under this Act, subject the estate of such dtsbtor to compulsory liquidation (Form F), and upon such affidavit being filed with the Prolhonotary of the district within which the insolvent has his place of business, a writ of attachment (Form G) 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 stunmon him to appear before the court to answer the premises, within such time as is usual therein for the return of ordinary writs of summons ; and such writ shall be accompanied by a declara- tion setting forth such facts and circumstances as are necessary to be proved to sustain the issue thereof; and shall be subject as nearly ns can be to the rules of procedure of the court in ordinary suits, as to its issue, service, return and subsequent proceedings ; 1. An affidavit — Sworn to before any Judge or Commissioner for taking affidavits in the Superior Court. The proceeding prescribed by this section is almo.st identical with that already prevailing in Lower Canada with regard to writs oi saisie-arret before judgment and of capias ad respondendum. Rule J3. 2. For a sum not less than two hundred dollars — Ihis would seem to be .sufficient, even in cases where proceedings have commenced by a demand of assignment which recjuires two cieditors claiming not less than live hundred dollars, 'i hat Act of Insolvency once perfected, may therefore be taken advantage of by any creditor who couIJ mitiate proceedings upon the occurrence of any other. 3. And shall be subject as nearly as can be to the rules of procedure — There is no provision in the law that would necessiirily cause any departure from the ordinary rules of procedure of the Superior Court, until after the return of the writ. Then there is an entire change, as the mode in which the allegations essential to the support of the writ are assailed, is by petition, and m.t by exception or plea. Post, p. 12. BuJ the proceeding upon the petition would then be conducted in oonformity with the usual practice of the Court, as directed by this clause. Amt after such petition is disposed of, either by proceeding to the appointment of an assignee or by quashing the writ, no further step seems to be requir. .1 lU the case. The reason doubtless is, that no condemnation is souirht agamst the insolvent by the proceeding, the only object being the maintenance of the writ ; and therefore the correctness of lis issue is tested in the same way as that of a capias, the result being conclusive as to the whole pro- ceeding, and rendering pleas unnecessary. Rules 15, 16, 19, 20. EXECUTION OF WRIT. 23 7. In Upper Canada, in case any creditor by affidavit j^^^ ^^^^ j^^ of himself or any other individual (Form F"), shows to the u. C. satisfaction of the judge that he is a creditor of the insolvent for a sum of not less than two liundred dollars, and also shews by the affidavits of two credible persons, such facts and circumstances as satisfy such judge that the debtor is insolvent within the meaning of this Act, and tliat his estate has become subject to com|)ulsory li(juidation, such judge may order the issue of a writ of attachment (Form G) against the estate and effects of the insolvent, addressed to the sheriif of the county 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 tim(^ as is usual thenun for the return of ordinary writs of summons ; and such writ Declaration shall be accompanied by a declaration setting forth such facts to accompany and circumstances as are necessary to be proved to maintain the issue thereof, and shall be subject as nearly as can be to the rules of procedure of the Court in ordinary suits as to its issue, return, and subsequent proceedings ; Jn Upper Canada — The procedure indicated by this clause, is intended to be;ir tlie same relation to exih^ting practice in Upper Canada as that prescribed by the last previous clause does to the Lower Canadian system. '{ any 8. Immediately upon the issue of a writ of attachment under Notice of issue this Act, tlie Sheriff" shall give notice thereof by advertisement of writ. thereof (Form H) ; This notice is intended to prevent third parties from permitting, or partici- patin be made by the seizing otTicer. And it should be propari-d with such accura<;y ami cdinpleteuess, as to constitute a detailed dehcrii)ti()U of ilie debtors estate, imduding his books of aotouiit and most important docu- ments :— am! should be authenticated by the person making it, in such a manner as to afford conclusive evidence against him afterwards, it he sfiould fail to deliver any part of the estate to the assignee. 2. Stiiltments of his affnirs — Ttiese should be similar statements to those wliich the insolvent is bound to produce at the preJifninary meeting of his creditors. § I, p. 1. 3. He shall Jile such inventory • • * and shall produce such statement s. These duties could be enforced by rule, and t eir neglect pnni>he(l by contrainte, the guardian being an officer of the Court. Ibit the non-per- formance of these duties at the time prescribed, would not affect the validity of the proceedings. Petition to set '^- Except in eases where a petition has })een presented as* aside attach- provided for by the third paragraph of this section, the alleged ment. insolvent may present a petition to the .Judge at any time within five days from the return day of the writ, but not after- wards, and may thereby pray for the setting aside of the attachment made under such writ, on the ground that his estate TobedecideJ has not become subject to compulsory tiqnidatioa ; and such i«uramarily. petition shall be heard and determined by the Judge in a sum- mary manner, and conformably to the evidence adduced before him thereon ; 1. E.rcept in cases where a petition has been presented — This excej)tion is in^erted because the previous petition, if one was pre- sented, must have substantially covered the same ground, as that permitted by this clair^e. 2. May present a petition This is eviiently instead of a plea or exception. (See note lo p. 6). 3. Five days — .Inridical days, § 12, p. 5. Rule No. 4. That his citate has not become suttject to compulsory liquidation — This is the substaulive question which must be raised by the petition. t c ^ 6 APPOINTMENT OF ASSIGNEE. 25 but the special grounds of defence to the allegations of the affidavit or of the declaration sliouid be set forth in the petition, or those aiU'galioiiK denied. In other words as the alleged insolvent must rely eiilier upon the falsehood of the statements of liis opponent, or upon other facts wliicli avoid their effect, or upon both, he must shew by his petition the position he assumes, just as he would do if the proceeding were an ordniary action, and he were pleading to it. 6. Conformably to the evidence adduced — That is to say, adduced according to the same rules as to the right to begin, the burden of proof and the like, as in ordinary cases. 13. Immediately upon the expiration of five days from the Meeting of return day of the writ, if no petition to quash or to stay proceed- creditors for ings be filed, or upon the rendering of judgmtjnt on the ofj^j^^i^^as- pelition to quash, if it be dismissed, the Judge upon the nppli- • cation of the plaintiff, or of any creditor intervening for the prosecution of the cause, shall order a meeting of the creditors to be held before him or any other Judge, at a time and place named in such order, and after due notice thereof, for the pur- pose of giving their advice upon the appointment of an ollicial assignee ; signee. I! 1. Immediately upon the expiration of Jive days — That is after Hve clear juridical days have expired exclusive of the day of the return and of the application. And this clause further conlirrns the view that no plea or exception can be fdeil, for the only coitingencies which can prevent the order being given for the first meeling, are the pre- sentation of a petition to quash, or to stay proceedings. 2. Or to stay proceedings — Under p. 15, post. 3. Or of any creditor intervening — When the machinery for cumpulsory liquidation has once been set in TTiotion, any creditor may press on the procedure as well as the plaintiff. The debtor therefore has no temptation to enter into corrupt arrangements with the plaintiff, with a view to arresting the proceedings. 4. And after due notice thereof— § II, p. 1, provides that notices of meetings of creditors shall bn ariven by publication thereof for two weeks in the Canada Ga/ette, &i\, and also that notices be sent by post to the creditors, Ly ttie " Assignee or person " calling such meeting. That provision wouKI however seem inapplicable to this clause, as no list of creditors is attainable at this stage of the pro- ceedings, and there is no " assignee or person " calling the meeting. To avoid difficulty therefore, the Judge's order for the meeting should declare what notice sliould be given, and that order should reqiare at least the same number of advertisements as those provided for in § II, p. 1. 5. Giving their advice — This is tfie mode in which Tutors and Curators are appointed in Lower Canada. And in this case it will render unnecessary any preliminary enquiry into the amounts actually due to creditors, leaving that matter to be subsequently developed under the scrutiny of the assignee. The present French law adopts a similar mode of election: the opinions ouly of the cretl iters being taken by the Juge-Commissaire, and the appointment being m&de by the Court. C, Com. art. 462. See the remarks of M. Bedarride on this provision, which are in a great degree applicable to this clause of the Statute, Vol. 1, p. 295. 6. Official Assignee — So called with reference to the mode of appointment, lo ilistinguish it from the appointment of an assignee by a voluntary deed of assignment. But there is no difference in the powers or duties of the assignees iu which- ever mode they may be invested with the office. ■;! ". . 26 PETITION TO STAY PROCEEDINGS. 1 I a- Wiio mi.v be ^^' ^^ ^^^*' ^''^'*' '^"'^ place appointed, and on hearing the apfiointod advi(M' of the creditors present upon oath (Form I,) the Judf^o officiiil lis- sliall appoint some person to be such otfieial assignee, wliich si^uee. person shall be the p<'rson proposed by the ereilitois present, if they are unanimous ; and if ihey are not unanimous, then the judge may appoint either on«^ of the persons proposed by the creditors, or one of the olficial assignees named by the Board of Trade ; // ihey are unanimous — Tlio .Indite has no iliscieliniiary power in the appoiiitriieiit of an assignee, if tlie creditors airree. If tliey diiri-r, the power iiaiiielijtely becomes vested solely in liim, but his ehiijce is restricted to the persons jiroposed by the creditors, and to those nam -d tiy ttie \^ laid of TrSthi, for Oihcial Assijtf- nees. The reasons given by the eredilors for tlieir advocacy of one candidate, or oppfjsition to another, will probably render 't e.isy to avoid appointitii^ an unlit person. And ni case of doubt, an as>!irn(;e may advan- tai,'ec«n-ly t)e ieiected from ihi' list of official tassiirnees, (tepo^ited by the Board of Traiie with tiie Protlionotary or Clerk. 9 4, p. 1. One (»f wiiotn will probably be then in possession of llie estate as guardian. Ante. p. 10. Debtor may 15. Instead of |)etitioning to (juash the attaehmetit, tlie debtor petition for may, witliin the like delay, petition the indite to susijend T)roccedin"-s. tnrther [)roeee(lings against him, and to that end to siil)mit such petition to a meeting oi' tJK; creditors an I the debtor Xo b«i called for that purpose, in order thut the creditors may determine whether the; proceedings against the debtor shall b(\ suspended or not ; 1. Instead of 2>elilioning to quash — 'his, and the next seven sections provide a mode by wliicli an estate ■which may be more advantajjeously wound up by the di-btor himself, and wliich beloiiirs to a person in whom the cretiitors have coiditlence, may be withdrawn from the operation of ihe law, and lelt in hi.>. iiand^ l'^Xj)erietice has >he\vn tliat an ill-disposed or unreasonnble creditor will Mot he.-itate to force an estate into liquidation, even when circumsiaiiC:;.-; {jieyent the possibility of the value ol the assets beiny obtained ; and that uiiiler any cir- cum>tance8 whatever, it is l)etter for the creditors to n.ive m instate wound up by the debtor himself, if he is trustworthy. iVIoM H '.i;kru,)t'.'y >ysteiTi.4 have compiised a provisiim of this kind, ^ee E .■\cl § 110. I Doria and ^Macrae, pp. 4^0, et seq : — S. Act § 35, et seq :- Murdoch, p)) *i4'', et seq : — C. Com. art. 504, et seq. 2. To suspitnd further proceedings iliis [Xiia-e is somewhat ambiguous, as is also the j)'oviion in p. 19, that s .ch suspension when uraiUed shall be in force fir three calendar months thereafter; as it is lunvhert" expressly stated wii;it elfecl such sus- pension will iiave upon the pending pruceediiii!;*. M the tiuie of the presentation of the petition c(iiiti'mphites ; in fact it would be utterly ruinous to the estate; and iiislea I of heiiig iikely to be petitioned for, wou'd probably meet with strenuous oppo>i,iO'i from the debtor him.self. Ihit an examination of the provisions ol ilif act and of the intention of tliese clauses, seems to point to u difTeienl coMcii'>ioM, el r '1 til til t:| ill til ll el til Il tht J PROCEEDINGS ON PETITION TO STAY- 27 While it is true tluit the word "suspend" is ropeatei!'" •'eih clause presfrihes the (juestion which is to be put to ihe crtnlilu ■*. - qM<'-'tion i.s " shall the debtor b« proceeded against under this Act or i i y" - .,.J i} the decision be in the negative, it is declared that " it tihall be n lore* " tor three luonihs thereafter ; duruig which time no other proceed! rj,rt laii bi taken ay:ainst him, l)ased upon anything which occurred pre\ <>vtH to tht institution of the pending proceedings. The decision in such case woiihl therefoie be that the debtor shall not be proceeded against under the Act. The obvious meaning of this provision goes beyond the mere suspensiorr of existing proceedings, if by such suspeirsion, the continuance in force of those already taken be rmplied. If the debtor is not to be proceetled airainst.the attai^hment must be discharged ; for to retain it in force, and the guardian in charge, would be to c^oirtinue to proceed against him under lire act, and to act in the very face of the resolution of the creditors. * I he spirit of these clauses lefids to the same conclusion. 'I'lieir object evidently is to relieve the debtor from the operation of the act, whicli could only be done by restoring to him the possession and administration of his estate ; and thus to allow him a space of three months within which to make a hesli etfort to carry oir his business. Tliis intention would be entirely defeated if the attachment were not discharged. 16 The debtor shall produce with snch petition a schednk! Schedrde «* of his esitiile, and a list of his cnxlitors with the amount of his ^ pro.luc<'(J indebtedness to each, and the places of tlieir respective resi- ^[j,,,! '^ ^* denees, or places of business, together with particulars of any negotiable paper on which his name appears, the holders of which are unknown to him ; the whole under oath ; The distinction between creditors holding direct, or overdue indirect claims and those holding indirect claims not yet matured, is not preserved by tliis clause, and must be presumed to be intended to be disregarded. It is of less importance, the greater the lapse of time after the stoppage of payment, as the number of immature indirect claims will diminish as the time passes. 17. Upon the schedule of the estate and the list of creditors Duty of Judge being furnished by the debtor, sworn to as aforesaid, the judge, la such case, instead of ordering a meeting of creditors to be called for the appoint nient of an official assignee, shall order a meeting of Meeting to be creditors to be called by advertisement for the purpose of taking called, into consideration the prayer of such petition, and at such meeting shall take and record by a writing und(?r his hand the opinion of the creditors thereon ; 1. By advertisement — As the means now exist for attainingja knowledge of the creditor's namCiS and re>^idences, notices must be sent to them by post according to § 11, p. 1. •l. For the jiur^wse of taking into consideration the prayer of the petition — It will be necessary to appoint an official assignee at the meeting thus ordered, if the creditors decide against the prayer of the petition, pnst p. 20. It would therefore be [iroper that the notice should mention as one of the purposes of the meeting, the giving of advice, if necessary, upon the ap{K)intrnent of an official assignee. 18. The judge shall postpone th(^ meeting so called if it Postpo:ien.<^ri*s appears that the creditors have not been properly and reaso- of meeting. 28 PROCEEDINGS ON PETITION TO STAY. nably notified, or tlial important omissionss have been made in the creditors' list ; Judge tn pre- 10. The judge shall preside at such meeting of cn-ditors, Bide lit such a„(i iiie (jncstion which they .shall decide shall be, '• Shall the raeetinj,'. Jcljior be proceedtul against under this Act or not '"' And if the Question to he decision of the majority in number and three-fourths in value decided there- of the creditors for sums above onc^ hundred doUnrs, present or at, anbtor's aflkirs prepared and produced at such meeting by the guardian, or person entrusted with the writ of attachment ; 1. Upon a hearing of the parties and from an inspection, ^c — It is not iutendey the insolvent ; 1. The, whole of the estate and ejfects — See llie caseft cc', lecletl in I). & M , pp. 650, et (ieq.,;\\\A Archbold, pp. 2"20, et seij., exliibiting lliiicnriistructioii ot" ssirniljir yeiu'rul i-liiiJstts in the Englisli Hiinkinpti'y Aits. See also S. act § 102, Munioch, p. 9G, t'odo Com. int. 413. FlenoujiiJ, pp. 164 et f;«,'(i. 1 Hedurride, pp. 81 et .seq. 2. An existing 'tie date t*j the imue of the writ — In England tht estate vesta in the assignee liom the time of llie ael of Baiikiuptcy. Arclibold, p. 216. 1 D. & i\1., p. 545. fii Stuilaiil it ve^ts in the 'I'rnstee trom the date of the sequestration. S. act § lu-i. In I'laiiee tlie debtor is deprived of his eflects from the date of tiie judgment dciiarutif de la failiite. Code Com. art. 443. Our Statute vests the estite of the insolvent in his Ji.ssignee, on the execution of a deed of assigimient, or on the issue of a writ of attachment. And in this re."«pect it is more just towards ihirti parties ttian tlie English Act, under whieh injury has Irequenliy resulted lo innucent persons trom having transacted business with the Bankrupt, after an act of Bankruptcy ol which they were ignorant. The public notice which i.-< required to be given in both cases here ; namely, previous to an assignment, by the In- solvent himse!f, § 2, p. I ; upon the assignment by the assignee, Form D, Rule of practice No. 22 ; and upon the issue of a writ by the Sheriff, § 3, p. "^ ; ro.ider.s it impo-sible fur any person e.veicisiiig ordniary care in conduct ng his business, to fall into a similar dilFicully in this country. 3. Up to the time of his discharge — Similar provi.-iions are to be found in the laws of England, Scotland and France; 1 D. & M. p. 550. S. act § 103. Murdoch, p. 292 Code Com. art. 44:J 1 Bedarride, No. 81. •1. Whether seized or not seized — It is the issue ot tne writ which operates the des:Viisissemint of the in.solvent, and not the actual seizure by the officer. T he writ is f-imiiar to the English Commission, and its issue produces the same elfect m this re.-^pect as the judgment dedaratif de lafaillitey in Franco. 5. With the same exceptions — See note to § 2, p. 7. 6. A voluntary assignment — For ihe effect of an assignment see § 2, p. 7. 23. An authentic copy or exemplification, under the hand of Ktiect . f it- the proper officer of the Court, of the ord(T of the Judge .-'"^■'■•''^■" '^• appointing an oflicial assignee, may be registered at full poii^rtenT length in any registry office, without any proof of the signature of the oiHcer and without any memorial ; and such regislratiou shall have the same effect as to the real estate of the insolvent and in all other respects, as the registrati<>n of a deed of assignment under this Act ; As the Registration of a deed of assignment — That is, no subsequent registration of any deed or instrument which would otherwise have affected the ln.solvent s real estate will have any force or effect as regards that real eslate In fact tlie appointment of the official as>ignee operates with regard to the Insolvent's real estate as a deed of sale of it would ; and hs registration has the same effect as that which in 80 OFFICIAL ASSIGNEES. a deed of sale would have, in so far as regards arresting the creation of new charges upon the real estate conveyed by it. Tiie ab.sence of description of the property conveyed, can produce no injurious eli'ect witli regard to tliird persons, for the insolvency i.s publii ; and as when it occurs, no one can acquire atitle from the insolvent to any portion of the property held by him previous to his discharge, or even a niortgaire upon it. no one can be misled by the want of a description of the projxjrly conveyed And the same result will follow even where the system prt'v.iiliiig will; it'iMrd to r^'gir-tratioi', provides tliat it sluill be made ag.iiii.st lu^^ liad aifectod by the deed enregislered, and not merely aguin^st the porson obliged by that deed. Notice (lap- 2-1- Itnincdlatoly upon his appointment, the ciru^ial as:i;! tuitv. Notice ot' r.oi.'dnation. OF ASSIGNEES, •t. The Board of Trade at any place, or the Council thereof, may nam(^ auy numlx'r of persons within the County or Distrit^t in which such Board of Trade exists, or within any Coiiniy or District adjacent thereto in which there is no Board of Tiide, to be oilicial assignees for the purposes of this Act, and ;i1 the time of such nomination shall declare what security for ihi' due performance of his duties, shall be given by each of such olficial assignees before entering upon them ; and a copy of the resolution naming such persons, certified by the Secretary of the Board, shall be transmitted to the Prothonolary or Clerk of the Court in the District or County within which such assignees are resident : I. The Hoard of Trade at any place — The object of this section appears to bo to create a class of men, eatis- factory to the Commercial commtmity generally, and under sntlicient security for the due pertbrmance of their duties, who shall always be avail- able when a trustworthy and competent guardian or assignee is required. It is intended that one of them shall take charge of an i«isolvent estate ,a3 60(in as it is seized, and devote himself, pending the return of the writ, to making a full examination, and intelligible and reliable statements of the debtor's affairs; and that the Judge may have them to resort to, whenever the absence of elig'ble or impartial persons among those proposed bj the creditors, renders it necessary for him to look elsewhere ior an olfK ial assignee. If the plan indicated by this section proves successful, it will also tend to diminish the bad effect produced by appointing as assignee eom ! large creditor, or Bank cashier, which in the one instance generally results in succ-eseful devices for the protection of the assifuee's own claim ; SECURITY BY ASSIGNEES. df and in the other in burdeninir the estate with an assignee whose existinj; duties are too onerous to enable hini to attend to those imposed upon him by the office, and in the consequent necessity t.ir agents who are paid out of the estate, to enable him to earn his commission. And wlien it is remem- bered that the assignee performs the fiitietioiis of arbitrator n|)on many disputed points, the advantage of liaving a piofessionat assignee becomes manifest. A similar mode of creating a class of men from whom a>.--i I'rovince respt cMViMj'. This clause might be held to cotifiue the right of [loininatioii liy the several f^onrds of Trade, to the Counties or Districts iictnally a.ljoiniiiu; lliat ni whieh "ach is established ; but such would not appear In lu," the intentioii of the Act. It would rather seem to have been contemplated that there should lie official assignees nominated in every County or District, and that the Board of Triule with'n t!.c most convenient distance should have the nomi- nation. And this construction is favored by the terms of § S, p. 10, where the word " nearest " instead of " adjacent" is used. 4. Transtmitled to the Prothovotary or Clerk — That an authentic list of the official assignees named maybe easily accessible ; and specially to the Sheriff when he requires a guardian, and to ?he Judge when he is called upon to appoint an assignee. M 2. Such security shall be lakcn in the ir.wwv of olTu-o of the Si-cinity to »« President of such }3oaid of Trade, for the bciieljt of lliecrcuilors &''^'^ ''•''' ^"^ of any person whose estate is, or sHl)S( j)urpose it is necessary to specify in the notice, as the purposes lor which the meeting is called, the regulation of every matter which is iuteiided to bo submitted to them, and 'hus enable the reijuisite busirie-s to be done at one meeting, insteail of several being necessary, i he first meeting however which is held after theexpiry ot two months from the appointment of an assignee, may be used for the transaction ot all the business the cn.'ditors can do, without such business having been detailed in the advertisement, provided a special but short form of notice is used in calling it. §11, p. 3. AssiTp.ee to '^' '^''"' assignee shall be subject to all rules, orders and be sutjeot to diroetiotis, not contrary to law, or to lite provisions of this Act, certiiiu rule?, -y.vliicii aie made for his guidance by the creditors at a meeting Uojwsit of called for 1 he purpose ; and until he receives directions fiotn moneys. lla; creditors in that brhn!t, if there be a Bank or agency of a \\ I Bank in the Ct)unty in w'lich the insolvent has his place of It I business, or within (iflecn .iiiles of such place, he shall deposit ■ weekly, at interesl, in the name of the estate, all moneys i; receiv 'I he modern I'.nglish Hunkiupt Act, like tiutt of France, grants bui very limited powers to the creditors. The |iie-it'iii act adopts the |)rine,iple of the Ord. of 1673, and approaches cluscly 111 its details to the mode in which the same priiii'ii)U! is worked out in the Scuicli act. As to the ihink de[)usiiH, Rule 26 requires the assignee to lile a iriu rih'\ return ot the mcntys deposited and in his hands: and regu- lates the iiiu Ic in which moneys deposited may be drawn. DUTIES or ASSIGNEES. 33 5. The assignee shall attend all meetings of creditors, and xo attend 11 take and preserve minutes of such meetings, signed by himself, meetings of and signed and certified at the time by the chairman, or by creditors, three creditors present at the meeting ; and copies of, and extracts from, such minutes, certified by the assignee, shall be pj'imd facie evidence of the proceedings purporting to be recorded in such minutes; and he shall also keep a correct And keep mi- register of all his proceedings, and of all claims made to or nutes, &c. before him ; of 1. The a^sig-nee shall attend all mecliPirs — Similar duties to tho.se imposed upon the assignee by this section, are perfornie 1 by the Tiuslee under the Scotch act, § 8i. Of course neither this provision nor that respectin;^- the minutes can apply to the first meeting under proceeding' lor a voluntary assignment, as when it is held, no assignee is in existence. See note on § "J, p. 3. 2. Shall be prima facie ecidcricr— , Copies, certiJied as provided by this section, of the minutes of all meet- ings cf creilitors are required to be tiled in the office of the Superior Court, Rule 25. — A record of them is required in Court whenever the Judge is called upon to enforce the directions of the creditors under § 4, p. 16, 3. Of all his procitdiriffs — jl As with regard to claims or dividends objected to, the preparation of dividend sheets, the dates at which all notices are given, in fact every step he takes, or that is taken before him in the case, and specially those pro- ceedings the dates of which are of importance. And by Rule 24, the Minutes and Register of proceedings must be accessible to all persons interested du- ring oflice hours. 6. The assignee shall give such security and in such manner Security to as shall be ordered by a resolution of the creditors, and shall be given to conform himself to such directions in respect thereof, and in creditors, respect of any change or modification thereof or addition thereto, as are subsequently convejed to him by similar reso- lutions ; and in every case except where the seciu'ity as been The Bond, 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 be taken in favor of the creditors, by the name of the " Creditors of A. B., an insolvent, under the Insolvent Act of 1864," and shall be deposited in the olTice of the Court, and n,,^ ^5.,^. 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 ; 1. Such security as shall be ordered — If the creditors are satisfied with the security given by the oflicial assig- nee, to the President of the Board of Trade, no resolution used be passed. 2. And shall conform himself— He may be compelled at any time by a resolution of the creditors to give more or other security, or to change the terms of that already given. The penalty for disobedience however, would only be the danger of removal by the creditors. Post p. 18. 3. May be sued upon — The remedy against the security is the same whether it ^e given to the President of the Board of Trade or to tlie creditors direct. And it is the same mode of procedure which is in use in Scotland. S. act § 72, Mur- doch, p. 267. In England also the creditors regulate the nature and amount 3 ' j a' 1 \\t 34 Powers of in- solvent vest- ed in as9i":nec. Winding up affairs. / IXSOLVEXT PART?rERS. of the secuiiiy, bi:t it is taken m favor of the Registrar ot the Court, who may enforce it. E. act ■} 12'2. 7, All powers vested in any ln;vo]vent which he might legally execute for his own benefit, shall vest in, and be execitted bv the as:;ignce, in like manner and with like efl'ect as they were vested in the insolvent, and might have been executed by him ; bitt no power vested in the insolvent or pro- perty or effects held bv him as Trustee or otlierwise for the benefit of others, shall vest in the assignee under this Act ; This clau.se may be -uid to bo merely supplementarv to >: 2, p. 7, and 5 3, p. 22. 8. The assignee shall v/ind 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 of such respects shall be guided by the direction of the creditors, given as herein provided ; 1. Wind tip the affairs of the insolccnt — Jousse, Old. de 1673, p. 160. C. C. art. 4S4 et doch, p. 276. £. act § 127. seq. S. act § 82. Mur- e i: Assignee's right of ac- tion, &c. When the in- solvent is a partner in a trading com- pany, &c. 9. Shall be guided by the directions of the creditors — This is in accordance with the old French law : Jousse, loc. cit ; but under the modern system it is the juge commissaire who gives directions as to the winding up of the estate. C. C. loc. cit. So in Scotland it is the Commissioners. S. act § 85, Murdoch, 279. In England his duties are prescribed by § 127, and the Court will enforce their performance. 3. Given as herein provided— i. e. at a meeting called for the purpose, afite p. 4. 9. The assignee, in his own name as such, may sue for the 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 appointment, and on his application may have his name inserted therein, in the place of that of the insolvent ; 10. If a partner in an unincorporated trading Company or co-partnership, becomes insolvent within the meaning of this Act, and an assignee is appointed to the estate of such insol- vent, the assignee shall have all the rights of action and remedies against the other partncu's in such Company or co- partnership, which any partner could have or exercise by law against his co-partners after the dissolution of the lirm ; and may avail himself of such rights of action and remedies, as if sucli co-partnership or Company had expired by efflux of time ; llie assignee shall have all the rights of action — This provision embodies what is recoirnized in Ensrland as law on this •subject. 1 D. & M. pp. 560-1. In Scollaud it would seem that Bauk- ' ' It.*' .»:;) SALE OF DEBTS, 35 luptcy would be a valid ground of dissolution. Murdoch, pp. 53-4. Q Bell, t)43. In France the question is one of greater difficulty, it being contended, that thongh tiie insolvency of one copartner may be a valid reason in the mouths of the insolvent's copartners for demanding a dissolution, it gives neither him nor his creditors any privilege or right which he would not have had under the agreement of copartnership. 4 Pardessus, p. 189, No. 1G66. But see C. C.^irt 1865. 4 Duvergier, iVo, 443. The English and Scotch system, thougli it respects in a le?s degree the conditions of the con- tract of partnership, is practically more equitable, taking the riglits ol all pailies into consideration; and it tends to prevent a mode of evadinc the oonsequences of liability, and of protecting trie assets of a debtor from -•eizure, which was gradually assuming alarming proportions in Lower Canada. \2. Aficr the (UficiohUion of the firm — Bankruptcy, {Faillite,) of itself operates a viissolution of a partnership. Polhier, i.MX'iete, No. 148. Domat, liv. 1, t. 8, sect. 5, n. r2. Can. Code, Partnership, No. 58. See also above cited English and Scotch authorities. Story on Partnership, § 313. Code civ. art. ISBS. 11. Afler having acted \vilh due diligence in the coUcclion As to doubt- of the debts, if the assignee finds there remain debts due, ib.e ful debts due attempt to collect which would be more onerous than benefi- !i_^y^^^g orde- cial to tlie estate, h.e may report the same to tlie creditors at a ci. meeting thereof duly called for the purpose ; and with their sanction lie may obtain an order of the Judge to sell the same by public auction, after such advertisements thereof as may be required by such order ; and pending such advertisements, the assignee shall keep a list of the debts to be sold, open to inspection at his oflice, and shall also give free access to all documents and vouchers explanatory of such debts ; but all Proviso • debts amounting to more than one hundred dollars shall be sold separately ; C. Cora. art. 570. 2 Renouard, p. 335. Bed., Nos. 1064 et seq 12. The person who purchases a debt from the assignee, Rigiits of pur- may sue for it in his own name as effectually as the insolvent chaser of debt, might have done, and as the assignee is hereby authorized to do ; and a bill of sale (Form L.,) signed and delivered to him by the assignee, shall be /jrim^./'zcte evidence of such purchase without proof of the handwriting of the assignee ; and no war- ranty, except as to the good faith of the assignee, shall be created by such sale and conveyance, not even that the debt Is due ; 13. The assignee may sell the real estate of the insolvent, Saloofinsol- f)Ut only after advertisement thereof, for the same time and in vent's real the same manner as is required for the actual advertisement of estate ; notice, sales of real estate by the Sheriff in the district or place where such real estate is situate, and to such further extent as the as- signee deems expedient ; but the period of advertisement may he shortened to not less than two months by a resolution of the creditors jmssed at a meeting called for the purj)ose, and ap- proved of by the Judge ; and if the price otTered for any real Power to estate at any public sale duly advertised as aforesaid, is in the withdraw; ! ! II '^•l I i 11 86 SALE OF REAL ESTATE. anl «ell afte'-- opinion of the asi=;ignee too small, he may -withdraw such real Tyauis. estate, and sell it subsequently under such directions as he receives from the creditors ; 1. The ntisignee may sell the real estate- There woulJ seem To be no need of any Ibrmnlity of seizure or the like before advertising. And as there is no restriction as to place, it would seem that the sale may be held at any convenient place, in tiie discretion of the assignee. 2. Aftf.r adi-ertif'cment thircof in the same manner— It may bo iloubthd whether this would require in Lower Canada the publicat'ioii ot the sale at the church door, as is necessary in sales by the 5' act § 11-1, 115. C. Com. art. 534 and art. 571 et saq. EfTectof sale of real estate by assij^nee in U. C and L. C. respect- ively. Credit for purchase Jiioney. Eoscrving mortfrage tkerefor. 14. Tlie sale of real estate in Upper Canada so made by the assignee, shall have the same efl'ect as if the same had been made by a Sherili' in U})per Canadn, under a writ of execution issued in the ordinary course ; and in Lower Canada, such sales shall liave the same eil'eet as if made by a Sherili" under a similar writ ; and the deed of such sale which the assignee executes, (Form M.) shall have precisely the same eftbct as a Sheritl's deed has in that part of the Province within which the real estate is situate ; btit he may grant such terms of credit as he may deem expedient, and as may be approved of by the cre- ditors for any part of the purchase money ; and if no jirevious hypothec or mortgage remains upon such real estate, he shall be entitled to reserve a special hypothec or mortgage by the deed of sale, as security for the payment of such part of the purchase money ; and such deed may be executed before wit- nesses, or before Notaries, according to the exigency of the law of the place where the real estate sold is situate ; 1. And as may be appraised of by the creditors — This is also a matter which should be submitted to the creditors at the general meeting. See note to ? 11, p. 3. 2. And if nn precious hypothec or mortgage remains— The previous portion of the paragraph does not limit the giving a term of credit to the cases where the assignee can obtain a (irst mortgage; but although this provision does not f.irbid the taking of any but a lirst "mortgage, it does not seem to contemplate that any other will be taken. Practically therefore credit will seldom be given except when the property is sold free of mort- Duty of as- 15. In Lower Canada, before advertising any saleof real estate Bjgiiee sfUii g the assignee shall procure, at the expense of the estate, from REMOVAL OF ASSIGNEE. 37 roixl estate in L. C. Notice to rc- gistercil in- cumbrancers- And otlici' liypotliecary,'- creditors. Coi'tificale of Registrar to be tiled. Liability of assignee for neglect- the Registrar of the County wherein sucii real estate is situate, a certitieate containing the names and residences as shewn by the U(>gistry books of all persons enregistered as hyj)othecary creditors ui)on such real estate; and he shall himself deposit in the nearest post office a notice with the postage paid thereon, addressed to each of such creditors by the name and to the ad- dress contained in such certilicate, and also a notice addressed to each creditor at any other place where tlio assignee has reason to believe such creditor to be then resident, and also a notice addressed to any otln-r person v^'hom the assignee Jias reason to believe to be then the credliO?' of snch hypuUiecary chuin, — informing tlu; creditors of the day fixed lor I'nC ^^l<' C'^" the real estate, and of the time williin which the hypothecary creditors are required to file their claims under this Act ; and before the day of sale he shall file in the oliiee of the Court the certificate of the {\egi:;trar with a return thorcon under oath as to his doings in respect of such Uvitices ; and the assignee shall be directly liable for any neglect of the duty imposed upon him by this section, to any party suffering damage in consequence of sucii neglect ; 1. Tim-i' within u-hich the hypothecary creditor)^ are required tojilc — Within six ckiys from the day of sale. § 11, p. 7. 16. The assignee shall be subject to the summary jurisdic- Assignee to tion of the Court or Judge in the same manner and to the ^Jc subject to same extent as the ordinary officers of the Court are subject to ^l*^;™.^!"^ ^'i" Its jurisdiction, and the performance oi his duties may be the Court, enforced by the Judge on summary petition in vacation, or by the Court on a rule in term, under j)ena!;y of imprisoiinient, as for contempt of Court, whether such duties be imposed upon him by the deed of assignment, by instructions from the credi- tors validly passed by them under this Act and comnumicated to him, or by the terms of this Act ; 1. And communicated to him — It is the duty of the ast-iguee to attend all meetings of creditors, and to preserve minutes of iheni. If he performs this dnty and i.< prest- nt when the instructions are passed by the meeting, no further coinmunication of them would seem to be necessary. 17. Before the period at which dividends may be declared, Removal of any assignee may be removed by the Judge, upon proof of '^"'^^y'^^': ''3' ^i fraud or dishonesty in the custody or management of tlie estate, uii-'onduU. upon the application of any creditor ; ami if such removal , . . takes place, or it llie assignee (.lies more thin tilteen days oi uji-ithor before the said jieriod, the Judge may appoint anot'ier assignee in tire same manner as he can appoint an assign-e to an est \ie in compnlsory licjuidation ; but if the assitniee is reiriovei! or dies within lifteen days of the said period, tiie Jru'ir^.i shall order a meeting of creditors to be held for the j)a!pose of appointing another assignee, and shall cause notice of such meeting to be given by advertisement ; ont I '•I I ! (.■:■ Ml i: removal of riisiL'iice by creditors. Apnointmcnt r: another. 38 REMUNERATION OF ASSIGNEE. 1. Before the period— Viz, two months from tho firjst publication of the appointment ot tne assignee. This is tho time within whicli the creditors are called upon to file their claims. ', 3, p. 24, Rule 22, Forms D. and K. Until this period expire^:, there is not supposeel to be any satisfactory mode cf ascertaining tne amount of the claims of creditors which may • be voted on, and the power of removal is therefore left with the Jud!::e. 2. Within Jif teen dai;s— Because that is the shortest period of time within which a moelini: could be called. — The creditors wil! tlien have proved their claim--, and means will exist for c.scertaining the precise proportions in number auti value of thoso that vote. IS. Aiiy assignco may ho removed after the peiiod a! wliicii dividends mav be declared. In- a resolnlic^ii pas.>ed bv the creditors present or represented at a meeting duly ealled io\ the pr.rpose ; and if the removal hns^ been .'fleeted i)y an order of the .Judcje, or if i lie assisfnee dies within fifteen dnys before llie said ]>eriod, or if the removal is effected by the creditors after tlie said period, they sliall have tlie riglit of appoinlini'. anollier assignee, ("ither at the met'ting- by which he i.'^ removed. or at any otiier called for the pni'pose ; 1. Any assignee lyiarj be remoirri — It does not appear necL\:.sary that any reason for the removal should Ve stated, or proved to exist. 2. Kcsoliiticn ^.vi.'^.sf'^ — That is upon the principle of coraputiiiir the votes provided lor by § 11, P- 2. '^. With in Jifteen days — These words must apply to the case of removal by order of the Jud;j:e, as well as to thu' case of the assignee dying ; as if such order of removal is m:ide mnre than fineen days before tlie period mentioned, the Judge him- self appoints anoL.er assignee, //n/e p. 17. 19. The assii^nee so removed shall, nevertheless, remain pubjecl lu tlie summary jurisdiclion of the Court, and of any Judge thereof, until he shall have fully accounted for his acts and conduct while he continued to be assignee ; 20. The remuneration of the assignee shall be fixed by the' creditors at a met.ning called for the purpose ; but if not so fixed [jefore a final dividend is declared, shall be put into the divi- dend sheet nt a ratf not exceeding five 2>er C£'/?^?^wi u})on the cash ree 'iris, subject to objection by any creditor as exceeding t'^ic valne of the services of the assi.'j^nee, in the same manner a* any other item of the dividend sheet ; v» hat i^hall bo 21. I'j^on the death, of an assignee the estate of the insolvent <; -ne with the ^},j,;i ^iox descend to the lieirsor representatives of the assicnee, < vout of his but shnil he;MMne vested in any assignee who shall be a]i]^ointed .leath. by the ereditors in Ids place and stead; and until the new assignee is appointed, the estate shall be under the control of Assign*}? re- Lioved to re- main acccunt- aMe. P.em'.meration otaisiffuee- the Judge , Kowas'ignoe 22. After the declaration of a final dividend the assignee n.ay obtain Yi\^\ prepnre his final account, and after due notice by advcr- 1 I i DIVIDENDS. 39 tisement may present a petition to the Judge for his discharge from the oflice of assignee : and from the time of the first advertisement thereof, to the time of tlie presentation of such petition, he shall keep such final account open for inspection at his office ; 23. The assignee shall produce and file with such petition Assignte to •a bank certificate of the deposit of any dividends remaining file a certifi- unclaimed, or of any balance in his hands, and thereupon the ^ «^.u^^* Vil^' Judge, alter hearing the |)art:es, may rehise, or grant condition- discharge ally or unconditionally, the prayer of such petition. 1. Dividends remaining unclaimed— See § 5, p. 17. 2. The parties — Any of the crt'Jitors, the in:-o'ivent, and the assignee. 3. Conditionally or uncondiivmaUy — One coudition undoubtedly should be, that ue should make up the record of proceedings by and before him as assignee, and deposit it in the Court, together with the minutes of the meeting? of creditors and his register oi' proceedings, with a correct list of the whole. -I OF DIVIDENDS, 3. Upon the expiration of the period of two months from the Accouuts to first insertion of the advertisements giving notice of an assign- be kept and ment, or of the appointment of an oliicial assignee, or as soon pJ^pp^'^^'lf J^';^ as may bo after the exp'irntion of sucli period, and afterwards signee. from time to time at intervals of not more than six months, the assignee shall prepare and keep constantly accessible to the creditors, accounis and statemenis of his doings as such assignee, and of the position of the estate and at similar intervals shall prepare dividends of the estate of the insolvent • 1. Two months — As soon as the assignee is appointed he must give notice of the fact by advertisement, and call upon all creditors to file their claims whhin two months from the first insertion of such advertisement, v 3, p. 2-1, Forms D. and K. Rule 22. And during the same interval it will be the duty of the assignee to proceed with the realization of the assets of the estate, and witii the investigation of its real condition. As it may reasonably be expected that during this period the greater portion of the cre.iitors will iiave filed their claims, at its termination the assignee should, be able to attain a very close approximation to the actual position of its alTairs. And he is there- fore then required to lay before the creditors the information lie has obtained. For these reasons also, this is the time iixed for tlie tirst general meeting of creditors, when all the reguhitions requireel for the guidance of the assignee may be passed. J 11, p. 3. In Scoliand four months are allowed for similar purposes. S. Act. i 1-25. Kinnear, pp. 145 et se'j. 2. Siinilar intervals — That is of not more than si.x months, but tie should declare dividends as often as he has fund-j to divide. ' I .1,! 2. All debts due and payable by the insolvent at the time of What debts the execution of a deed of assignment, or at the time of the ^^^^^"^ ^°^' .issue of a writ of attachment under this Act, and all debts due P^^^*^^ 40 CONDITIONAL DEBTS. of insolvent's estate and how. Sureties of insolvent pay- ing for him. but not then actually payable, subject to such rebate of interest as may be reasonable, shall have the right to rank upon the estate of the insolvent ; and any j)erson then being as surety or otherwise liable for any debt of the insolvent who subsequently pays such debt, shall stand in the \)\ncc of the original creditor, if sucli creditor has proved his claim on such debt ; or if he has not proved shall be intitled to prove against and rank upon the estate for such debt, to the same extent and with the same efl'ect as such creditor might have done ; n Contingent claims, pro- vision for pay- ment of. In certain cases Judge may order estimate of value to be made. 1. At the time of the execution of a deed of (t.-tates ior sums of money settled upontliem in lieu of dower, and payable only in caee of their surviviiiii; their hiisbamls. Unless the jtuiiimeiit in the cat-e of the Bunk of Montreal vs. Leslie, and Delisle, opposant, be maintained, decidiPif tluit such claims cannot rank at all upon the tlebtors estate, the value of such claims will have to be ascertained by a comparison of the value of tlie livi.'s of the husband and wife, according to Life Assurance tables or other reliable data. *2. AiL'urd after the same inccsligation — See post p. 13. , 3. Hanked upon — And voted upon, and computed as the value of the claim ants demand, in all calculations of the proportionate value of creditor's ciaim«?. If a ilividend has been previously reserved upon the lull amount o! the claim, it should revert to tiie estate, }?ivinir the creditor his dividemU irom the first, upon the estirnatod value. Tiiese provisions with regard to estimating the value of comin:.^ent or conditional claims, are similar to tho>e acted upon in England aud Scotland. Murdoch, pp. 253 et seq. 2 D. & M , &47. 4. In the preparation of the dividend sheet due regard shall be Preparation of had to the rank and privilege of every ereditor, which rank and giiget privilege, upon whatever they may legally be founded, shall not be disturbed by the provisions of this Act ; but no dividend Creditors shall be paid to any creditor holding collateral security from fa^terafsecu- the Insolvent for his claim, until the amount for whicli he shall rity. 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 creditors, whenever under this Act such proportion is required to be ascertained ; 1. Shall be paid^ But the dividend should be reserved pending the adjustment of the amount for which the creditor is to rank. 2. Hereinafter — See next clause. 3. In voting at meetings — This really places the creditor's vote upon a proper fjoting". For if a creditor could vole upon the nominal amount of his claim without relerencd to his security, the hypothecary creditors would oneii control tlie inmiage- ment of tiie personal property, without being interested in it to any con- .-iderable extent. See note to next clause. ■'I 5. A creditor holding security from the Insolvent, or from his Duty of such estate, shall specify the nature and amount of such security in secured cre- his claim, and shall therein on his oath luit a six'cified value lll'^^If.'JV!!! secunty ; and the assignee, under the authority ot the gignee. creditors, may either consent to tlio retention of such security by the creditor at such specified value, or he may require from such creditor an assignment and delivery of such security, at an advance of ten j)er cenlnm upon sucli s-p!'ei{i''(l value, to be ])aid by him out of tlie estate so soon as he has realized such security, in which he shall be bound to the exercice of ordinary diligence; and in either of such cases the diflerence between the value at which the security is retained or assumed and the 42 DOUBLE RANKING. i \li amount of the claim of such creditor, shall be the amount for wiiicli he shall rank and vote as aforesaid ; 1. Jlolding i^ecurity from the Insolvent—' A creditor who holds security derived from other sources than the insol- vent or his estate, is not bound to specify it in his claim, or put a value on it It is only when it proceeds from the insolvent that his creditors are interested in it. Ex parte Parr, 1 Rose, 76". D. & M., p. 864. S. act V 59, 60. 2. May either consent to the retention of such security — In France the assiijuee can only demand an assignment of the security, upon paying the ilebt. In England he has no such right under any circiimstancos. The rule in our act is taken from that which prevails in Scotland, and whicii appfiars more advantageous to the estate than that of France or England, and perfectly just towards the creilitor. If he he left to realise the security, the sale of it would too otten be a mere device to convert it to his own use at a nominal price. If it be taken from him and realised for his benefit by the assignee, the expense of the sale, and the dej^reciation of value which follows from seizure, would greatly diminish the proceeds. Hut if the creditor be re([uired to put a value upon it on oath, with the privilege to the assignee of taking it from him at a small advance upon such valuation, as an additional clieck upon its correctness ; there will bo a probability that the right of property in the security will linally pass from the estate .-it its fair value, and without much expense. Under all these systems the creibtor is only permitted to rank for the balance due Iiim after the deduction of the proceeds of his security. C. Com. act 5'16 et se(/., and 65-2 el seq. 3 Betlarride, pp. 2 et se'/., and 48 et seq. 2 Renouard, pp. 387 et seq. E. act 1849, § 184. D. & M., pp. 863 et seq. Archbold, pp. 160 et sei/. Murdoch, pp. 256 et se'/ , 260 et seq. 3. Under the authority of the creditors — This can only be given at a meeting, and should be one of the subjects discussed at the first general meeting. 4. Paid out of the estate so soon as he has realized — The assignee is not bound to pay for the security in cash, but only when he has realized it; in doing which he is bound to use ordinary diligence, and if he does not, may be forced on by the Judge. But on the other hand he must pay the price fixed out of the estate, whether the amount be realized from thj security or not. How creditors 6. The amount due to a creditor upon each separate item of payment of ^°' his claim at the time of the assignment, or of the appointment claims. of the official assignee, as tlie 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 incases of deduction of the procecdsof (H)llateral security as hereinbefore provided ; i)ut no claim or part of a claim shall be permitted to be ranked upon more then once, whether the claim so to rank be made by the same person or by different persons ; 1. The amount due * ' at tlie time of the assignment — The time at which ihe assignetj is appointed, whether by a deed, or by the Judge, is the common startiig point of all the claims. And the amount then due upon each item of the claim, may be ranked upon, (except where deductions are made in respect c f security,) until the estate is wound up, or till such item of claim is paid in full. For instance, if a creditor holds several notes or bills bearing the insolvent's name as endorser, and other and difTerent names of persons liable before him, such creditor may rank for the amount due upon all thj paper, at the date of the appointment of the assignee, and may continue to do so until the estate is fully liquidated ; unless in the interim one of tho bills should be paid by one of the parties ALLOWANCE TO IXSOLVEXT. 43 as rj-jvirtncr, liable before the insolvent, in which case the rankuiaj on that item of claim would cease. See a similar rule laid down in Ex parte Groom, 3 M S: A., 157. It is with reference to this provision that power is given to tiie assiarnee to demand a supplementary oath. § 11, p. 6. 2. Ranked upon more than once — The questions arising upon double rankin^^, are sometime.': intricate, but the principle is simple. When once a claim has drawn a dividend from the estate, it cannot be permitted to rank for the pame dividend a second time. And this rule cannot be evaded by any device whatever, tlu 'igh the debt may be apparently diilerent : as when proof is made on the consiLleralion of a bill, after the bill lias ranked ; or when the creditor is changed, as by making proof by an endorser after the liolder has proved. 7. If the inr^olvent o\vos debt* both individually and as a lu c^ie iasol- mcmber of a co-paitnor^hlp, or as a mcmher of two didtrcntco- '^'?"/ 'j^^'^'' '^^• parliicr.ships, thi3 claims a,^^ainst him .^hall rank first upon the '■^'^'^'''■"^^^'*'""'^ estate by which the debts thoy rej)res('nt were contracted, and shall only rank upon iho other after all the creditors of that other have been paid in full ; 1. J II din dually and as a memher of a copartner-^hip~- 'rtie creditors of an individual debtor could never rank upon the proper:y of a firm of which he was a member concurrentlywith the creditors of .«ucli firm, for a debt due by him individually and separately, but ca the otiiei hand, until lately, the creditors of a copaitr.er.'ship could rank upon the- estate of one of the partners, concurrently with the creditors of such partner. See ^Montgomery vs. Gerrard, Stuart's reports, p. 437, and tiio autiiorities collected thtire ; and Kx parte Gordon, 2 Rev. i!e jur., p. 407. 2 Boulay- Paty, No. 372 el sc/. This rule was changed by tlie 2'2nd Vict. cap. 4, v 1. Con. Stat. L. C. p. 535, which statute is followed in the foregoing clause S. The creditors, or the same proportion of them that may Allowance to erant a discharije to the debtor under tl)is Act, ir.av allot to the "i-'^^'^"'- insolvent by way of allowance, ar^y sum of money, or any pro- perty they may think proper; and the allowance so made shaii be inserted in the dividend sheet, and siiail be subject to con- testation like any other item of collocation therein, but onlv on the ground of fraud or deceit in proettring it, or ol trjc absence of consent by a sufficient proportion of the creditors ; 1. l^he same vroporlion of thi ;- - § 9, p. 1. 9. No costs incurred in sni'.s against iiie Insolvent afier due .N<> c.'.~t; in notice of an assignment or of ib.e issue c>f a writ ol attachment :''^^'? ugamst m compulsory liqiiiilation has been given according to the pro- loweA.ifier visions of this Act, shall rank upon ihe estate of the insol\ent ; notice. but all th(^. taxable costs incurred in proceo(lina;s against him up to that time, shall l)e added to the demand lor the recovery of which such proceedings were instituted : and sliall rank upon the estate as if they formed part of the original debt: Due notice — That is, <'by advertisement" according to § 11. p. 1. 10. Clerks, and other persons in the employ of the Insolvent How clerks in and about his business or trade, shall be collocated in the aui sjervauts 44 UNPROVED CLAIMS. shall rank for dividend sheet by special priviloL^e for any arrears of ^:alary or Wiiges. wages duf- and unpaid to them a' l!ie lime of liie execution of a deed of assignincm or of the i^-r^ue of a writ of attachinenl under thi- Act, not exceeding three months of such arrears ; ■A 1 . IJy special privilege — Tiiat i.s, out <>( the pir.ceeJs of tho mover.ijle property atiected by such piivile'ze as the law .standi. And ii there be a cnliict of privilege, it will be decideil by the law applicable thereto. Ante p. 4. And it would seem Ttiat uiuier the law the Clerks and person.* enuaired about the business of l;ie i!;>n]veiil are onlv r>rivileLred upon tb.o ^oods in which he traded. C. C. Can. Piiv. ot Hyp'. ;irt. Si." 2. Arrears 'I'ue and unpaid at ifyi time — The en^'airements of all persourj m the employ of tlie ia.solvent cease upon the e.veciition of an as-i^niraent, or tlie issue o! a writ of attachment. And iiieir privilege i.> restricted to wages actually due, no allowance for the ■?uddeu cessation of their employment being permitted. This seems to be in accordance with the former' law. Eari v-;. Casey, 4 L. C. Rep., 174. Poulre vs. Poutre, 6 L. C. Kep , 463. And it is the same in France. C. Com art. 549. And in Scotland. S. ac: : 122. And in England, D. & M., 790. 3. Xot exceeding three month.^ — This restricts very mucii tlie perio.i tor v.'hich a privilege is allowed by ■he Commo:; law, wliicii is anderstood to be two years. See C. C. of Can., ,'oc. cit. In .Scotland it evtends only to one mo;it;rs arrears, in England to three montiiF, and in France to six. (See authorities cited in last note.) 11. So soon as a dividend sheet is prepared, notice thereof (Form X) shall be given by advertisement, and after the expiry of si.\ juridical days from the day of the last publication of such advertiscnicnt, all dividend> which have not been objected to within that period sliall be paid ; See for similar provisions S. Act § 1*7 : ^Murdoch, p. 30-5. Provision in 12. If it appears fo tiie assignee on his examination of the case it appears books of the insolvent or otherwise, that the insolvent has creaitors'lme <^''dinary, iiypothecary or privileged creditors who have not not tiled filed claims before such assignee, it shall Ijc his duty to reserve claims. dividends for such creditors according to the nature oftlic chiinis, and to notify litem of such reserve, which notification may be by lelUM' iliroui^h llie post, addressed to sucli creditor's residence as nearly as tiie stime can be ascertaint^d by the as- signee ; and if sucii crediiovs do not fil(> their claims and a|)ply for such dividends previons to ilie detdartition of the last dividend of tho •■stale, the klividends r'.scrved for them shall I'orni oait of such la-t diviilend ; Xctice ot dividend sheet. 1. Hiipothccary— Tills must mean liypothecf.ry creditors wiio iiave not registered. As those who have registered their 'tijpuiiiii'fUe.-^, wi;! have received no' ice intder § 4, p. 15. J. .■l/;(/ (ijij'lij for ^uc/i ihridtnus — Tills should not be construed to mean that if the creditor does not deinand his dividend as well as liie his claim, he will be deprived of it ; for that would place this class of creditors in a dili'erent position from all others. But the filing of the claim should be held to be an application for a dividend OBJECTIONS TO DIVIDENDS. 45 : upon And )r tliu to be , 174. ;. C. D. & under this clause. And if the creditor does not afterwards claim the amount awarded him, it will follow the rule as to unclaimed dividends, established ]iost p. 17. 13. If any dividend be objected to, within the said period of six days, and any dispute arises between tin? creditors of the insolvent or l)etween hini and any creditor, as to tlie correct amount of 1 lie claim oi any creditor, or as lo the ranldng or privilege of the claim of any creditor upon such dividend siieet, the assignee siinll obhiin from the creditor whose claim or ranking is di.-putec!, his statements and voiich.ers in support thereof, and from the Insolvent or o}>posiiig ere showing Insolvent or o}>posiiig creditor, his })retensions as lo the amount ar and examine llic parties and their Case of oTjjec- tiouA to or disputes cou- ccrning divi- deiids pro- vided for. Assignee's duty to ex- omiue, &c a statement thereof, and shall witnesses under oaih, which oalh The assiirnee :^ liereby empowered to administer; and siiali lake clear noles in writing of the parole evidence adduced before liim, and shall examine; and verily the statements submitted to him, by the books and accounts of the Insolvent and ];v such evidence, vouchers and statements as may be lurnished to him ; and shall make an award in the premises, and as to the costs of such contestation, whicii 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 ; < i ii 1. The assignee sliall ohtain * » • ♦ .?tute)ne7}ts and vouchers — Whether the word "statements" is to be construed as meaning ■'alle- gations " or not, it would be for tiie advantage of all parties, if the conflicting pretensions of the parties were required to be in writing : and accordingly it is so ordered by Rule 8. Not only is the assignee to award upon these pretensions, but ihey may require to be discussed before a Judge, and even in the higher Courts of Appeal : and written statements will he absolutely necessary th.ere to ei.able the (juestion at issue to be satisfactorily disposed of. In fact if the matter in dispute be of any importance, Counsel should be employed to settle the issues, if not to conduct the case before the assignee. 2, i:>haU hear and examine the parties, and their U'iinesses under oath — That is shall do so in the manner usual in litigation, observing the ordinary and reasonable rules as to evidence, of which the following maybe stated as of the liighest practical importance, and as requiring to be referred to, oftenest in ordinary cases : 1. That the burden of proof shall be upon him who affirms a proposition of fact, rather than upon him who tienies it : 2. That the party upon whom is the burthen of proof, shall begin ; 3. That the party who begins shall have the right to adduce evidence in rebuttal ; but that such evidence shall only be such as tends to destroy the case of his opponent, and not such as tends directly to sustain his own ; 4. That the party who hoUls the negative cannot usually adduce evidence in reply to his adversary's evidence in rebuttal ; 6. That if the parties are e.vamined they cannot make evidence for themselves ; but that their answers cainiot be divided ; 6. That the best evidence of which ihe case is susceptible should be adduced, and that secondary evidence should not be received until proof is made that the best evidence cannot be obtained ; 7. That ou the examination of a witness in chief, leading questions are vi' 46 AWARD! I ;li: \^l t'xeeiuion of ' v'ti Oi'COIl' testing VAy r;ol usually permissibie ; but may be put on cross examination. This rule ;iowever rnay be reversed if the witness is plainly hostile to the party who pro. luces him, and favorable to iiis opponent. It would be obyiously impossible here, to enter into a detailed discussion of the law of evidence, but enough has been said to indicate the order in '.viiich the proceetlinrrs should be carried on before the assignee. If the Jispi.te be coi^.ducted by Counsel, the assignee will be called upon to decide i;aesiinns as totlie admissibility of evidence, and as to the propriety of ques- tions put to witnesses, wliich might raise doubts even in the mind of a iutice accustomed to deal with them. In skcIl cases, if the objection be io the aJmissibility of evidence, it v/ould be better for the assignee to admit ;t, entering the objection to its admission. If it be to the propriety of a -.jUestion, it is belter to permit it to be put, if the assignee has any doubt, •v^.iieriijg the objection ; and if it be an objection to the form of the (question, ,t is always safe to insist that the tjuestion sliali be so framctl as to leave Me facts to be related by the witness, and not put into his' mouth by the c^uesticner. Ant! the assignee shouki always recollect that it is easy after- vards to disregard testimony improperly admitted ; but that the exclusion -f that which ought to have been let in, is not susceptible of so simple a lemedy. 3. Clear notes in meriting — This is an important part of tiie duties of the assignee ; an;i he is lequired by Rule 8 to cause such notes when taken to be signed by the •vitness, wlien he swears to them — and they should also be certified by nimseif as having been sworn before him. 4. Make an aivard — The award should recite in general terms the observance of all the for- rnajities prescribed by this clause, according to the laws respecting awards. o. Within three day,s— See note to § 7, p. 4. 6. Ofitii cnmmiinication — The assignee should communicate it to both parties immediately upon its being rendered and deposited. The making it in triplicate ; sending a fart to each litigant, and depositing the third in Court, would be a satisfac- tor}- mode of performing thi3 duty. 1-i. The award of the assignee as to costs, may be made executory by execution in the same manner as an ordinary uulo-menl of the Court, by an order of the Judge upon the application of the party to whom costs are awarded made after notice to the opposite party ; 15. The creditors may by resoluiion authorize and direct the costs of the contestation of any claim or any dividend to be paid out of the estate, and may make such order either before or pending any such contestation ; tie fore or pending — Tliis does not seem to forbid sucii an order being made after the contes- tation, as tho lirst part of the clause is general. But it appears to be intended only to rejnove doubts as to tho power of the creditors to make an order having a prospective eliect. wlien the amount for which the estate is bound by such order, is uncertain. t i pc:\l. 16. Pending any appeal, the a>signeo shall reserve lividend etpial to the amount of dividend claimed ; a 11 rndaimed dividend j.~ 17. All dividends remaining unclaimed at the time of the discharge of the assignee shall be left in the bank where they ^ LEASES. 47 are tleposiled for three years, and if still unclaimed, shall then j^o^ jealt be paid over by such bank with the interest accrued thereon, to with, the Provincial Government, 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 lime of the reception thereof by the Government ; 18. If any balance remains of the estate of the innolvcnt, or Balance of cs- of the proceeds thereof, after the payment in full of all debts tatc alter pr. y- due by the Insolvent, such balance shall be paid over to the "^*^'^^ ''■^° Insolvent upon his petition to that elfect, duly notified to the (i editors by advertisement and granted by the Judge. OF LEASES. i 6* If the insolvent holds under a lease property having a value above and beyond the amount of any rent payable under such lease, the assignee shall make a report thereon to the Judge, containing his estimate of the value of the estate of the leased 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 and place appointed such lease shall be sold, upon such conditions, 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 conl-^^ 'Ued in the lease ; and all such covenants and conditions shnU 1 hiding upon the lessor and upon the purchaser, as if thu ; it' iser had been himself lessee and a party with the lessor lo the lease : How unex- pired leases held by the insolvent, shall be dealt with if the rent be less than the value of the pre- mises. Sale of his interest. Gxtensive degree 1. If the insolvent holds under a lease^ This ia a most important chapter, innovating to a very upon the rights of the lessor. But such a change in the law was nece.ssary, foi a lessor might absorb a very large portion or all of the assets in liis pre- mises, by insisting upon payment of his rent to the termination of the lease, perhaps some years in advance ; while tlie property thus paid for would be a burthen ratlier than an advantage to the estate. 2. Havinif a value above and beyond the rent — Often resulting from improvements made by the insolvent with his own funds, especially under long leases. 3. The Judge may order — That is if he is of opinion that the excess of value over rent, is sufficient to render it probable that a profit will be realized by such sale. 4. The giving ofsecwity to the lessor — The les.sor should not be compelled to accept a tenant afibrding him 'e.ss .security for his rent than he previously posses.sed. Therefore, if the pur- chaser of the lease be unable to furnish the premises with moveables sufficient to secure the rent, as effectually as it had been secured by the in.solvent, or at least to a reasonable extent, the Judge should order further security to be given for it. 3. If the insolvent holds under a lease extending beyond the Unexpired year current under its terms at the time of his insolvency, ^''P-^j^.^ ^°* property which is not subject to the provisions of the last pre- ^^ " 1 1' ' i .'1 >-, ■h -rV' , V s I 48 LEASrS. iH preceding section. case. ceding section, or re>;pecting which the Judge does not make an Older 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 end of the then current, or if the conditions of the lease permit of furthm- extension, also up to the end of tlie next following yearly term thereof, and their decision shall be final ; 1. Current iimhr its terms — That is the curnMit year of llie lease, not tiie current year of the calendar, 2. Property vjkich is not subject — That is, property whict; is liot of L^oaler annual value than the rent stipulated to be paid for it ; or not of an annual value so much greater as to induce tiie Jud<:e to make an orJei for the sale of the lease. 3. More than three months— iso that if they dcicide to is'wG it up, the landlord may have tlie last tliree months of the current yearly term, within which to obtain a new teiuuil for the following year. 4. Up to the end of the next following yearly term. They are not permitted to retain the property for a!iy broken period of a new year, but must hold it for the whole year, or not at all. Cancelling 3. From and after the time fixed for the retention of the the lease, and leased properly for the use of th(.' estate, the lease shall be can- right of the ceiiyj finj shall from thenceforth be ino])erative and null ; and so soon as the resolution of the creditors as to such retention has been passed, such resolution shall be notified to the lessor, and if he contends that he will sustain any damage by the termina- tion of the lease under such decision, he may make a claim for such damage, specifying the amount thereof under oath, in the same manner as in ordinary claims upon the estate; and the assignee shall proceed forthwith to make an award upon such claim, in "the same manner, and after similar investigation and with the same right of appeal as is iserein provided for in the case of claims or dividends objected to ; 1. Fi.red— By the creditors, under the last preceding clause. 2. To inake an award — It is not necessary apparently that the claim should be contested before the assignee commences the proceedings for his award : but it may be contested like any other claim, and probably should be, if considered exces- sive, in order that there ma) be a partj' to conduct the case against the lessor. 4. In making such claim, and in any award thereupon, the measure of damages shall be the difierence betwehed as atcompHces of the banlirupt. Tiiis provision would seem to (lisre^'ard tlie qnestion whether tlie acciuisi- tion was gratuitous or i tifre onrrtit.v ; and, in so far as rci^arded the ellect of thg transaction, wlvether or no there was the consilium frandis on the part of eitlier of the contracting parties. In practice however, there is no doubt tiiai the rule of the lionuiu law was l(jliowed in the constructio!i ot tins Edict — and tliat :in accjuisition by an onerous title witiiout tlie intention of defraudiiifr cn-ditors, or notice of insolvency either tlireet or constructive, wouKl have been held valid evmi if made to a friend of the didilor. ('(iimier, who wrote only .si.v years a'fer tiie i)roniidgaU(.n of the Edict oi KiOIl, tiius lays il'Avu tlie law as then unuerstooil : '<.))■, jxntr y (irnir lieu a cus/e adinn (he say<) /7 fdtit i/ue le (hitcur ait almntr j>«nr Jraiuhr sen rrair.ciers nil a la verilt', on j/ar /'rcsujiijilion : tt que Ci'iHi ijui (I priiiK li's biinia ii^tit i.'slc' ignorant (hi conseif i7 indention J)a'idnh:iLV. — Cc '/ui est vraij '/aand on prend la. chose, en vertu d'un contract <)-,creu.v C'>)iime de vt-ndilion on d''cschange ; autrcmi'nt en serail si c^cstai en verlti de contract liicralif covnnc de donation ou de leg.i tes- tamenta re, car au dil c iS celinj ([ui a prin^ sans autre distinction eft iousiours suicl a rendre el rcstablir, jiource (ju^il est tousiours disraisun- nable-s 'ju^il soil enriclii au domimtue des crcanciers. Code Henri IV., Liv. -Je, col. 17t;!, No. .5. In ItjtiT, a Ueglemcnl was made for the city of Lyons, by whicli it was declared tiiat tuules cessioni^ et transports sur les rf/'ecls des Jaillis seront nuls, s'/Ys ne sonl fails (li.i: J;nt7-s au /xo/'hv acant la faitlite j)ubli'/uement connue. — Art. 13. Hy the Ord. of 1673, tit. 11, art. 4, tons transports, rentes et donations de bie.ns, meublesou immeublrs, fails enfraude des rreancicrs, weie declared null. The former law made a certain provimity lo tlie perioil of lailure a ground of absolute nullity — without reference to the intention of the parlies — the latter made the fraudulent intention of the transactio.i a ground of indlity, wilhout reference to the time at-whicli it toolc place. A declaration m.ade in Novtjmber 1702 extended tiie regtenienl de Lyon to the whole Ivingdora, retaining the 4th article of tlie Ord. of 1673 in force : and tlierealter if the transaction was within ten days of the tailure no proof of fraud was requisite to annul it ;— if not, it might be annulled by proving a fraudulent intent. Anti when such an intent was relied on, it was necessary to prove the complicity ol the person dealing with the debtor — either directly or constructively — in which proof, the usual pre- sumiitions arising from relationship, the absence or inadequacy of the con- sideration — and the publicity of the enibarrasments of the debtor, would receive their due w-eii;iit. One of the principal dilficulties which attended the enforcement of the declaration of 170:2 was the fixation of the date of the failure. The Edict of 16O0 and the declaration of 170"2, alike described it as being the period at which Xhofaillite became publicly known : la faillitc publi<(uement connue. But this does not in any respect solve the dililculty, except in rare cases; for Avhiie the day of the ?lo])page of payment by a grca commercial house might be publicly known, the great majority of failures are gradual. In most of them there is a period of ;.4ruggle, during wliich the debtor's didi- cnlties gradually increase, fr)m the Jirst protest or failure to pay — unti; his stoppage is entire and irremediable. And it may be as dilHcult to discover tlie date of the first dishonor of a just pecuniary call upon him — as it un- doubtedly is to ascertain the moment of time when the continuance of his business becomes hopeless. In addition to this, unless the insolvent occupies a prominent position, his failure may never become publicly known— or known at all, beyond the limited circle of the creditors wiro sujfer by it. This difficulty appears scarcely to have received its due weight with tiie Commissioners for codifying our laws; lor they suggest articles (Nos. 56 and 5'J, title of obligations) which would render null all transactions that are entered into within ten days of the bankruptcy of a trader, without providing FKAUD AND FRAUDULENT PREFERENCES. 5S a tlie of at lie. ior use hi ii- lis er uii- his ent oly vho the I'.ul are or sufri'estiiii^ any mode in wliich tlie date of lluil bankruptcy can be aicor- laint'd or established. And ahlioniih, in th»? introductory remarks, a liclini- tion of the word bankruptcy is promised — which may remove the diincnhy — it is not easy to perceive iiow a mere deliniliou can rcacli the evil wliich it is necessary to tfuard again.-!. By the code de commerce of 1808, the trahsactions of the debtor, preceding the iailnre, were divided into those which were abso'utely mill and those which were sucjcct to he set ;iside. Under its provi.-i()ns,daiiiig the ten days preceiliui: the failure, nn priviluire or liypothci|iie could lie ac(juin:(i upon the. properly of the dobt)r — no ^ratiiifous transfer of immoveable property cou'd take pace — and no payment of commercial debts, nut mature, could be made. Ail alienations, a liiic oucreu.v, edectod duiinu' ihe s;une period, il" appearing to be t;iiiited wMli fraud, weie aiinniiable : and all commerciu' e:!2:'uvuK:nts contracted by the debtor diirini;- that time, weie picsumed !o bo fraudident as to him, and were liable to be amiulleil.on proof o! fraud on the pait of those in whose favor he coutracteil them. And, liually, it was de- clared, as in the old c'>p( cling trans- actions pi-evious to the ten diys next befoie tin; ^toppage, tlie-e t.eiiii: lelt to the operat on ol the com.tion law, as e>tali'i>hed by art. IH>1 the rev citory Licii ui of the Homan ami old French law, lor the annn lation o all act d(Uie in Iran i of creditors. In iScolland, the ueiieral rule (;t the c vn k;w prevail- ; luii Jo' time, rela- tively to the Bant- rupt 'y, at whicli a tran«ac ion tawi s p'ace ha.^, in certa.n cases, a ilnect elfna up.ai l;,e validity of tui^ ai tsofiiic Dankru t Mu tc)ns of BaRj-;ruptcy, on the subject of acts lionc in fraud of cre- ditors, that their spirit is tlie game, and that they vary only in .letiiil ; and our own st.atufe has not departed from the principles that have uover;ied tin.' legislation of oth(>r countries on tlie same sulject. Under its :)r(/.'i-ions, as- under the laws of ancient Kome, of ancient and niodern Fra:ice, of England and of .Scotland, gratuitous alieiiations of property by an insolvent are in- vaTul ; an;l all act5 are declared to be null which are done by llie J(/btor with intent to defraud, ob?lrn( t, impede or delay creditors, if the pruly con- tracting with him hr.s actual or constructive notice of the insolvency, ami if they serve to defraud, impede or delay creditors. Frauduiei.t puelercncos. by securing or paying creditors, to the injury of the estate generally, are declared ?ni!! ; aui! if such transactions ot-cur within a linie nanifd in the act, they are presumed to Iiave the defects winch it pronounces iatal. Co!.- 5e(|iieiitly, the student of this portion of the act njay avail hiniseif of an immense mass of !earniii'_'i and a vast collection of aiijudged cases, to be found in the i-2nglisli, ^'cotcli and French treatises already cited, and iu man} others ; ail of wiiich are as applicable — or nearly so — to our statute a-> u.' the systems which they more particularly exemplify. What shall be deemed frau- dulent con- tracts or con- veyances. 8. All gratuitous oontracls or conveyance.s, or contracts or conveyances \viiliont consirleration, or with a inrrcly nominal consideration, niacle iiv a debtor ufterwartls becominir an insol- vent witii or to ;i.ny person whonirroever, \vithin three iiionllis next pree-MJin^' the d-ate of the assicfninent or of ihe isstie of the writ of attaehiiient in eoiajjulsory iitiaidaiion, and all contracts by which credit(^rs are injured, obstructed, or delayed, made by a del)tor unable to meet his engagements, and afterwards becoming an insolvent, with a person knowing r^uch inability or having j)rob;ib!e cause for believing such inal>ility to (^xist, or after sneh inttbilily is public and notorious, are presumed to be made with intent to defraud his creditors: 1. All irrilnilons c>n!raclti, or conlntcts ivith a merehj noininiAl con- siderution-' y/'L. t), 5 H. Piithier Oblns., 15'^. 3 iVpof;"d to a jiers'Ui knowing'- the inability of the debtor to meet his engaifemrr's. The uratuitnus ciiaracter of the ( oiuracl being consitlered suiiicieiit 'n ust.ib'isii a presumption of conipiicity on the part oi the recipi«^nt of t -.»■ ppij-.^rty. 3 Bed. da dol, No. 1431. INlurdoch, p. 3. 3. Made xcithin three vumth,-f — 'I his period is very Imei, bui as it applies only to gratuitous contracts, it is dilBcult to see liow it can etlect any serious injustice to the recipient ; while the creditors whose gage the thing conveyed was, will get their rights with regard to it. FRAUD AND FRAUDULENT PREFERENCES. 55 4. By which creditors are injured, obstructed or delayed — See authorities above cited, and also 2 Chatdon, Nos, 205, 208. 3 Bed. du dol, No. 1457. 5. IVith a person knotving suc/i inability — Triis is in strict conformity with existing law, and with the modern law of France. Domat, loc. cit., No. 4. Nouv. Den., loc. cit., Nos. 12, 15. 6 Tonllier, Nos. 348 to 366. 3 «ed. e made with intent — No eviiltnico i.s required to e.>tabli?h tho intent, the preih Act, and there have been numerous expres- sions of op-nion l)y the English .Fudges upon its true meaning. Dayley, J., (Gibbins vs. Phillips, 7 H. and C, 534,) says, that it would be sufficient to establish the contemplation of bankruptcy if the debtor knew him«eh to be in such a situation that he must be supposed to have anticipated that in all human prohability a bankruptcy must follow ; and lie adds, that in this sense, conlemplaiionot bankruptcy has always been considered evidence of fraud, although the party may not" have expectetl the actual and immediate issue of a commission. And a.'terwanis in I'oland vs. (ilyn, reported in notis, 4 Wiuix. 2-2, Abbott, C; J., told the jury, tliat the object of the bank- rupt laws being to divide the whole of the bankrupt's property equally amongst Jiis creditors; if a tiadesman finnid himself in such a siluaiion, that in the judirmenl of any reasonable man a bankruptcy was inevital'le, no voluntary payment by him could be irood, and .Justices Bayley, Holroyd and l}e>t atlerwards concurred in his view of the subject. And Wilde, C. J., in Brown vs. Kempton, 13 L. T., Rep. 11, states the rule still more clearly. He says in this case, *• that il a payment were made at a time when the bankrupts hail a view to bankruptcy, though the. might hope to avoid bankruptcy, yet if made with the object of giving the creditor an eventual advantage, if the bankruptcy did take place, the payment was illegal and invalid." FRAUD AXD FRAUDl'LE.NT PREFER E.NCKS. 57 These dicta, not only aiJ in ronsliuitijf the expression u«Ci! in tuii? chiuse, but lairly tieseribe the po.o easy, that it appears to have been thought necessary to provitle still more .specilically a'jaiiist it. Its peculiar characteristic is the fact of a pre-existing debt, fur which security is given subsequent to its creation, or vvliich is paii otherwise than in money, when the debl.jr sees a probability of his estate failing into insolven- cy, and desires to prevent loss to the creditor in such an event. And the evil it seeks to prevent, is the deteiioration of the estate by preferences to creditors who have become so on the same terms as other.-, but who fiumone motive or another, wlien the danger of insolvency becomes imminent ;ure protected by tiie debtor out of the assets ol lii.s estate, winch all his creditors are entitled to regard as their common securiiy. 3. Creditor olAdins, or will obtain, an loijust j/rt'fircnce-- The knowledge of the creditor is not maiie esseniiai to the invalidity of the transaction, nor is the time of it relatively Id tin.' insolvency, of any importance as matter of law; and in thisresptv-i t:u> clause iliiiers from all the other clauses of this chapter. Tlie rea^oiis uiKl(>.i:.iledly are that the creditor who seeks to ciianyfe his po-i;io!i, alter it [.a- been deliberately taken, must be presumed to have some rea.so'i tor djing .so, which has been suggested by facts that have fallen within his knowledge : and facts which cause him to fear the non-payment of his debt, can only be such facts as warn him of ditiiculty, and o! threatening;-, if not actuaily approach- ing insolvency. If under these circumstances, the debtor, conscious of impending failure, yields to a demand for protectio:! against ii, or even voluntarily pruvidcs such protection to ills creilit r, tJiere is really a concur- rence of intention on both sides to diminish the mass of tlie assets, for the benefit of one creditor and to the injury of the others. And the circum- stances which must be presumed to have arisen, to cause the creditor to demand or even to accept further security for his debt, are alec presumed i: 58 FRAl'D AND FRAUDULENT PREFERENCES. • ) M 11 If ■'■I to bo a warning to him that the taking of such further security is illegal and improper, and thereby to constitute him an accomplice in the fraud committeil by the debtor in giving it to him. Bed., Nos. 113 et seq. And this rule is far from being purely modern, for we find M. Cormier slatirg in 161.5, with reference to the Paulian action : " icelle viesme action se dorrne contre celuy (/iii ttrachant son delteur n^estre soluable tire et rctorque (jitel'/ue f/io.s'L' t!riin- Ciinadn, who pnreiiascs goods on credit or procures f»'^iu;l^ '^e- advanccs in money, Iniowing or believing himself to be unalde n;uvis L. C. to mei^t his engagements, and concu'aiing the fact jVom the j)erson thereby becoming his creditor, w'i'A\ the inlentto dciV;iiid such person, or who ])y any false prelenctc obtains a term of credit for tlie payment of any advance or loan of money, or of tlie price or any part of the price of any goods, wares or mer- chan'dizc, with intent to defr;ind iIk; person there'oy becoming his credilor, and who shall not afterwards iiave paid tlu; debt or debts so incurred, shall b(^ held to Ix" guilty of a fraud, and Punishment, shall be liable to imprisonment for such lime as the Court may order, not exceeding two years, unless the debt or costs be sooner psiid ; and if such debt or debts iie incurred by a trading company, llu-n every member theri>of who shall nf)t prove him- self to hive been ignorant of th(> inc.irring, and of the int(,'nlion to incur, such (I(d)t or dei)is, shall be similarly liable; provided Proviso, always, that in the suit or proceeding taken for the recovery of such de!)t or debts, the def"ndant ])e charged wi'h such fraud, and 1)1? declared to be guilty of it by the jtidgir ;nt rendered in such suit or j)rocv'iHilng ; !• Aivj Iradcrin Lou'dr Cttnadi nnd any pcrann whomftnecer in Upper Cnnada — There does not seem to be any i;- to 1 reason I'or this distinction— as the offence created by this clause has no rc!.ition to t!ie pioeeediri^s tor •.vjiilitig up the e>l;ite of the debtor an I for enaiiling hiin to o'ttain a dischari^e from his liabilities, wliioii I'orm the priticipal objects of l!ie law. 'I'he clause originaily ajiplie 1 only U, trader-;, and \'w di.-tiiicliou botue(M\ I'pper aiiil Lower Can.ivlri, ntiist have been iTealei! without du'tcon i Icratiun, when the operation of the Rill generally, was evteuvled to all clashes in I'pper Canada. 'i. Cdiu-cnliiUT the fact — That is not inturmin:^ him ot' tlio fact. Aetise proceedings for its con- cealment could liardiv lie consid'jred necessary. .'}. Willi iiitriil tn dij'raitd — A( tor nnn facit rcuin nid menu sit rcn. 3 'iisl., 'j()7. The intent :'nd the act must both concur to constitute the olii'uce. Per Lord iveiiyou, 7 T. R., 514. And the intent must exist at the time the jnirchase was made, or the advance obtainetl. Reg. vs. Wood, 1 Di,nison, C. C. 387. Reg. vs. Tieston, '2 Denison, C. C. 353. Ir I lU I I gQ COMPOSITION AND DISCHARGE. But the inlent coulddoublless bi' inferred from the posiuon and conduct of the accused ; without direct evidence of it. See tiio cases collected as to intent to defraud, in Roscoe's Criminal evidence, p. 448. 4. Wko sliatl not aftcnvards have paid— As the proceediiiii- contemplated by this clause— and the remedy it gives, are rather civil than criminal— and rather intended to enforce payment than to punish the debtor; he may relieve himself from them by paying the debt. 5. Unless the deU and costs be sooner ]>aid~ See last note. 6. Ercnj vicm/jcr t/icreof v:h'i shall not prove himself to be ignorant of— That is to say, that alter the Iraudnlent act has been brought home to one of the partners, the burden of proof as to the complicity or innocence of the others is shiftel upon tliem. Tiiis would seem harsh, but tiie law applies only to cases where the (hdit is incurred on behalf of the partnership, and where a presumption thon.'fore fairly arises against the partners, as having profited by the transaction. 7. That in the suit or proceeding— the defendant be charged ivHh the fraud — This requires specific allegations to be made in the declaration, charging the defendant with the fraud: and in Lower Canada, an iippropnale conclusion also, demanding a judicial declaralioi' of guilt, and the con- demnation of the accused to the term of imprisonment considered adequate to the circumstances. As tolike S. ill U|)j)C'r Ctinada in ev(>ry f^uch suit or proceeding wlielher case in U. C. the defendant appears and j)leads, or makes default, llie i)laintifr shall be hound to prove the fraud charged, and upon his proving it the Judge who tries the suit or proceeding shall immediately after the verdict rendered against the defendant for such fraud (if such verdict is given) adjudge the term of imprisonment which th<; defendant shall undergo ; and he shall forthwith order and direct the defendant immediately to be taken into custody and imprisoned accordingly ; but such judgiuent shall not aliect the ordinary remedies for the revision thereof, or of any proceeding in the case. tin cr( CO up su p; va mr al Aj>pears and pleads or makes default — Tins provision i-< probably intended to prevent a Judgment from being entered up without proof, on tlie mere default of the del'endant to appear — wiiich cannot be done in Lower Canada. OF COMPOSITION AND OISCHAKtiE. When and to Tvhat cxtorU a deed ot'cim- posit ioii shall be biadiug. When such deed miy Ic made. !>. A deed of composilion and discharge c'xeculed l)y the m ijorily in number, of those of tlie creditorr* of an Insolvent who are r(?sp(.'eiive!y creditors for sums of one hundri^d dollars and upwards, ai^.d wlm irpicsi'iil at least three-lourtlis in value of the liabilities of the hiso'vent subject to be computed in ascerlainiiig sucji proportion, shall have the saiin; elfeet with regard to the nMniiiiuler of his (•redilors, ami be binding to tlu? same extent upon him, aiul upon iImmu, as if they were also piirties to it ; imd sueli a deed may be validly m;i(le 'either before, ])(Miding, or after prt)eeedings upon an assignment, or for the coinj)ulr-t)ry licpiidation of the eslate of the insolvent ; and t le discharge therem atrn ■ed 1 o slui 11 h lave tlie same e ffect ^s an ordinary discharge obtained as hereinafter provided boing )ear — ■ Iho \(jnt liars \aliie [1 ill ^vith () llui ilso itiior t, or ("lit ; 'ilbct COMPOSITION AND DISCHARGE. 1. Majority in number of creditors for sums of $\00 and upivards — In calculating tliis majority tliose creditors who*n claims arc not ex- tinguished by an ordinary discliarge obtained under the Act — and privileged creditors- are not counted in any way: unless the first mentioned class csnsent, in which case they may be. — See p. 5. /-/os^ 2. Three fourths in value of the liabilitiis — This is not limited to the value of the liabilities amounting to $100 and upwards, and therefore must include all 'he liabilities of the Insolvent, subject to the exceptions referred to in the next note. There is a discre- pancy in ibtlerent parts of the Act, in the motle of stating the piopoilion ui value of the creditors which is recjuired to give validity to their acts. In §3 p. 19, tor instancij, tlie power is granted to " the uiajority ni laimber, and three fourtiis in value of the creditors tor sums above one hundred dollars," in which case the amount due to creditors in sur.is of ^JlOO and less, would not count either as to niunber or value. And t le general rule .,s !o meet- ings of cieditois, gives the controlling power to '' the majority in number of all creditors for sunis above one hundreil dollars * * * repre.-enting also the majority in value of .s"«(Vi creditors ; " thus excluding creditors ot sums of (•ilOO or less, from being compnteil as to nnmlier or value. — § 11, p. i2. Those di.>tinclious, though probably not intended, must not be lost sigtit of by the practitioner. 3. Suhji'ct to be computed — For diibts which arc not subject to be computed, see p; 5, jws^ 4. Vpon him — The most important point in which a Aeea of this descrii)tion is binding upon a debtor, is the payment of the composition agreed upon ; and under this clause, a creditor who is not a party to the deeil, will have the same remedies for enforcing such payment, as one who has executed it. 6. May be validly made either before, penditif^, or after — Although this clause establishes that such a deed may be validly made — it is important to consider wh.at effect it will have, previous to the expiia'ion of the two months whicii are allowed to creditors for filing their claims. The spirit of the law appears to be, to allow a delay of two months after the appointment of an assignee — within which claims are to be filed — • foreign creditors will have time to come in, — and the assignee may be supposed to have acquired a knowledge of the estate, sufficient to 'mabla him to scrutinise the claims made. It would appear to be the intention of the Acltliat until this period expires, the creditors do not acquire that entire control of the estate which they may afterwards exercise. Until then dividends cannot be declared, § .5, p. 1 ; the meeting for the public examina- tion of the Bankrupt cannot be held, § 10, p. 1 ; the creditors cannot act in the removal of the assignee, § 4, p. 18 ; anil they cannot pass resolutions on the various subjects respecting which authority is given tliem — whhout special notice, except at the first meeting held after thi- period, § 11, p. 3. The reasons for the adoption of these rules doubtless are, that the actual creditors and amount of indebtedness cannot sooner be ascertained with any approach to certainty : that the creditors as a body camiot be expected to be sooner prejiaretl to assert their rights in the estate with advantage ; and that a knowledge of the indebtedness of the insolvent, and tlie co-operation of his creditors, are b'oth rcijuired, in acting upon the more important pro- visions of the law. The eflect of a composition deed depends entirely i pon the number and amount of the creditors who sign it — and therefore as much as any other matter or proceeding contemplated by the Act, reijuires an exact Iviiowledge of the amount due by the inso'vent, and of the creditors who represent that amount. And since this knowledge cannot be fully attained until after tlie period of two months alloweil for the filing of claims ; the insolvent claiming protection under a deed of composition and discharge, before the expiration of that period ; or before his estate lias been bio ight within the opiiralion of the Act at all ; must find it difHcull, or impossible, to shew that the proportion of creditors in number and value required to give it validity, have concurred in it. 61 e2 COMPOSITION AND DISCHARGE. 1' 1^ ' Notice auJ time \^'lthin which opfiosii- tiou to coui- p03ition must be made. If nouc be so made. Asaiii, by p. 2, post — the insolvent is permitted to deposit ii deed of com- position and disciiame, witli the as^iigneo— wlio may thereupon taLc step^ to divest himseil' ol' tiio e.state. Bat lie cannot tal;e tlie initiative toward.'? tliis object ill tiie smallest particular, until after the expiry of tlie two iuunlh-5. 11' the deed can be held to e?tabli^!i his disc.hari.re before ilie exj)iry; of the two months, Ik- shou'd receive bacli hi> estate at the liiue his dis- charjse is 50 e.stabiisheci. If the deed has acquired it.s full validity, the crediiors have no claim to the estate. 11, on tiie oilier hand, the d ii.'d doe.n iiol rt.'ccive its full ellect r.ntil after the expiry of t!io two moiiih,^; has furui.-hed the assifiuee and any disseutinj creditijrs, with the moans of knowiDg whether it is entitled to any weight or not — the pr'ivisioii dt.'iaying the delTvery back of the estate till after that peri'^d i-; consistent v/ilh tlio construction of the Act, whieii wouKl delay !he eiieet ol the di-cliur^e to the same extei'.t. Apain, the first clause provides tliat the disciiargo n;ireed to in i\ deed of composition and discharge, shall ave the panic ciFect as an cidinary ilischarge obtained as thereinafter provided. Hy p. 3, jJOtit, llie eliVcl of an ordinary di.-charge is described, and it will be foun 1 to operate upon debts and liabilities, lor a full discovery of wliich the two months delay is requisite. Upon these considerations, it would seem to be a reasonable construction of this clause, to hold that a deed of composition and discharge will not operate effectual ly the discharge of the debtor ; or perhaps it would be more correct to say, will not be susceptible of being elFectually used as establishing a di.-charge, until after tlie expiration of the period of two months tVom the public notice of the appointment of an assiguee. This con.struction does not by any means deprive the clause under con- sideration of a character of great importance to the debtor. Tlie procuring the consent of creditors to a deed of comjwsition and discharge, is generally a work of lime ; and this clause permits that work to bo proceeded with while proceedings in insolvency are maturing, anil even liefore they have commenced. So that when the time arrives at which under p. 2, the iissignee may give notice of the deposit of the deed, the insolvent may have already procured its execution in readiness for such deposit. And there seems to be no reason why the application for confirmation should not also be proceeding, pro -ided the debtor is coiilulent that he has succeeded in obtaining the as.sent to it of the requisite proportion of Ids creditors. G. The same {/Jicl as an ordinary discharge — See ^>o,s/, p. 3. 2. 11" tlie Insolvent prooiires a deed of composition and discharge to bt; ditly executed as aforesaid, and dcjjosibs it with the assignee })ending the proceedings upon a voluntary assignm '111 or for compttlsory li(iuidation, the assignee, after the period hereinbefore fixed as that after which dividends may be d(H-larcd has ehipsed, shall give notice of such de|)Osil by advertisetiient ; and if opposition to such composition and di.-t inserlio.'i of the advertisement giving notice of the appointment of an assignee. § 5, p. 1. and ;ils it uitary after smay iit by and days li the com- but if made IClidll eruin- givuig COXSEXT TO DISCHARGE. 2. Shall act upon such deed — If by ihe deed it is agrooil that tlie debtor shall hnvo immedinte posses- sion of hi.s estate, the nssiy-nee should deliver it over to him. And so with any ot .er provision contained in the dee^, v/hich falls within llie province of the as,Tii>uee to carry out. It will thoroton^ bo noces.-^ary in preparing;,- .sucli a deed to make provi.-.ion respecting everytliiin: required to be done. Such, for instance, as the payment of such charyes as tlie aj-si;^nee may lawfully nialiiioa of tlie estate in that event, supytosing it to have been returned to the debtor Dy tiie assignee. There is no express provisioir on this point in the Act, but probably the assii^nee would be entitled to revendicate the property belonging to the estate ; or in cases of compulsory liquidation, to obtain the issue of an alias or further writ of attachment in the original cause, by a petition founded upon aliidavit. The case is not likely to occur, as any creditor having objections to make, would file them in the manner provided for by tiiis section, and thus prevent the estate from passing out of iho hands of the assignee. 3. Has been confirmed— Under ps. 6 and 8 post. 3. The consent in writing of the said proportion of creditors to the discharge of a debtor after an assignment, or after his estate has been put in compulsory liquidation, absolutely frees and discharges him from all liabilities whatsoever (except such as are hereiniifter specially excepted) existing against him and proveable against his estate, which are mentioned and set forth in the statement of his affairs annexed to the deed of assign- ment, or which are shewn by any sujiplementary list of creditors furnished by the insolvent, previous to such discharge, and in time to permit the creditors therein mentioned obtaining the sam(; dividend as other creditors upon his equate, or which appear by any claim subsequcmtly furnished to the assignee, whether such debts be exigible or not at ihe time of his insol- vency, and whether direct or indirect ; and if the holder of any negotitible jiaper is unknown to the insolvent, the insertion of the jiaiticulars of such pai)er in such statement of all'airs, with the declaration that the holder thereof is unknown to him, shall bring the debt represented by such ))a)ier, and the holder thereof, within the operation of this section ; 1. Ahsolulclij frees and discharges him from all liabilities — There are exceptions to this discharge which are reierred to in the remainder of this clause, but they do not interfere with the principle of the general rule, that by a discharge under this Act, the insolvent is freed from all debts and claims whatsoever. Notwithstanding the apparent compre- hensiveness of the phraseology of this clause, the question is frequently asked whether liabilities incurred previous to the passage of the Act, are dischargi d, or only those subsetpient to its enactment— in other words, whether 'he Act is retrospective or not. It must be admitted that in general, the idea of a law which has a retros- pective character is repugnant 'o a strict sense of justice. And although the right of the Legislature to pass such laws cannot be denied, their terms will bo strictly scrutinised and construed. And a retroactive cllect will not 68 EfTect of con- sent of creiU- tors to debt- or's discharge. If the holder of any ncgo« tiablo jiapcr is unknown. I in 64 : ;!! if 1: if COMPOSITION AND DISCHARGE. be conceded to them, unless those terms unniistakeably convey it. To deal with the latter proposition first, and ascertain whether or no the terms of this Act unmistakeably confer upon it a retrospectiv^• character, it will only be necessary cursorily to refer to a few of the clauses bearin:^ upon tlie question. The preamMc declares it to be "expedient that provision be made for the settlement of tlie estates of in^oiv^'nt debtors." This phrase clearly covers debtors then insolvriif, l>y its natural giamnuitical meaning- ; for if it intended only those who should lliercnfler become insolvent, it would have been neces- sary to adopt an entirely liiiferent lonn of words. '1 he same remark will ajiply to ttie lorm of words used in 5 2, p, 1. The words "any persan nti.ible to meet his enua^umonts,'-' accordin<^- to their or- dinary j^rammalical nieanin'^, would stiiclly apply only to those persons who were unable to meet their eiis^au-enieiits a: the time the act was passed, or, perhaps, at the time it came into force : but, as the law is regarded as always speaklrlL^ it comjirehends also all those who shall subsequently labor under the ilisability i uiic.iU'd. Under these c!.- use- therefore, a per.-on who became insolvent before the act passed, and remained insolvent when it came into operation, is subject to its provisions. A::ain, the enactments respectinsr compulsory liquidation, all contemplate the mai'liiiiery of the law beiiiir susceptible of being set in motion immedi- ately upon the law comiii2f into force. If the debtor committed any one of the numerous acts ot insolvency described in the act, on the 2ad September last, he coukl have been foilhwith dispossessed of his estate, and the pro- ceedings for that purpose could have been instituted by "any creditor." kSee § li. pn.-^sini. Jt is plain that in this case also the words "any creditor" ciinnot, by any recognized rule of construction, be held to mean those cre- tiilors only whose claims aros» upon or alter the 1st September last. The debts which are entitled to be pvoveil against the estate, are, " all debts due anil payable at the time of the execution of the deed of assigimient, or at the time of tlie issue of a writ o! attachment, &c., &c. § 5, p. '2. in this provision, debts which arose previous to the passing of the act are unmis- lakeably comprised. The estate which passes to the assignee is, all the property of the debtor, real and personal, "which he has or may become entitled to at any time be- fore his discharge is elfecied." — § 2 p. 7 ; § 3. p. 22. So that there can be no doubt but that it is a mutter of perfect inditlerence, whether lie acquired such property before or after t.'ie passage of the act. And, lastly, the clause now under consideration expressly declares, that the consent of the requisite proportion of creditors absolutely frees and dis- charges the Insolvent from " all liabilities whatsoever existing against him, and proveiible against his estate." Here, auain, it is impossible to deny that the phrase " all liabilities whatsoever existing against him," must com- prise every such liability, without reference to the period ot its inception. This statute, therefore, is retroactive, and to such an extent, that persons who became insolvent previous to its passage fall within its provisions ; that I)er6ons who acquired the quality of creditors betore it passed, may avail themselves of the proceed in irs it authorizes ; that the debts ilue to those creditors may rank upon the estate of the insolvent; ttiat property accjuired by him before it became law, becomes vested in his assignee under its pro- visions ; and, finally, that by a discharge under this act he is freed from the liabilities he incurred before it was enacted. Whatever may be the general principles applicable to retrospective legislation, and however strong may be the feeling against giving retroac- tivity to statutes, it may reasonably be asserted that the nature and purposes of a Bankrupt or Insolvent law, necessarily exclude it from the operation of those principles, and prevent its being obnoxious to the objections usually urged against retroactive laws. And in fact that a Bankrupt or Insolvent Jaw having exclusively a prospective elfect, must necessarily be partial and unjust. This latter proposition, which includes the former, caimot be better sustained than by quoting from an admirable little treatise published in 1843, on the retroactivity of the Bankrupt Ordinance, 2 Vict., cap. 36, CO^fPOSITION AND DISCHARGE. 65 tliat dis- lim, eny ;om- 1. ■^ons that Lvail iio.se ired )ro- the live jac- II of ally ent tial b« leci 36, ami of Bankrupt laws in general, attributed to tUe present Mr. Ju.slice Meredith : " lu order " (it is said at page ^10,) " to olTect tliat which is the primary object of every Bankrupt law, tiiat is, to secure the wliole of the baakrujt estate for the benelit of all the creditors, it is ab.^yhitely necessary to deprive the debtor of all hi.s ordinary ri^j-iits over hh property. The assign- ment by ;ht,' ('onimissioners has this edt'ct. and the warr;'.ut in bankruptcy absoUiUily pievents the debtor from payin:; any of hi-; creditors. The d.ebtor beinir thus by a sin<>le blow, denuded of all his property lor the bencllt of all his creditors, it would te manifcitly unjust to allow a p.irtol the creditors to administer and divitle his estate accurlmj lo their own inierests and wishes ; and at the same time to perinit t!ie remainder of the creditors to hunu-s the ilebtor with executions and inipiisonment ; yet tjucii must bo the residt if we confme the Bankrupt law to a m^r.dy prospective operation, " The creditors whoso debts had been contructi,'d after the passing of the Baidcrupt law, wouKl, of course, avail themselves of the advantajres which it allbnis them, and place themselves in immediate possession of tiie wiiole of the bankrupt's property ; and the creditors, whose debts date before tho passing of the law, by refraining to come in under the conimissiou, would have it in their power to harass the debtoi, thus ilive-^tcd of all means of satisfyinii; their claims. " So long as the debtor has his estate in his own liands, he need not despair ; his friends, to supply a deficiency, may come 1 1 his assistance ; his creditors may accept a compromise, or he may by some fortunate speculation increase his means, so as to meet the demands of his creditors ; but no situation in life can be more utterly hopeless, or more deserving of commiseration than thtat of an honest debtor, who, after having been divested by law of every vestige of his property, is cast uptn the world, destitute of all means, and still exposed to tlu! claims of unrelenting croilitors, " A system of law which would thus on tho one hand deprive the debtor of his properly, and prohibit him from paying any of his creditors, and which at the same time would allow some of those creditors to coerce his person for the purpose of obtaining payment from him, would be in the last degree tyrannical and unjust. " Every humane or just mind must admit, ihat the same law which prohibits tlu? debtor from paying any one of his creditors, ought to prevent every one of his creditors from suing luui ; that if the cred.itors, contrary to common law, are allowed to enter upon the estate of the ilebtor, and manage it as they wish, without reference to the interests of the ilebtor, they cannot complain if obliged to content themselves with t lat estate ; in short, that the law which deprives an honest man of all his assets, should at the same time relieve him trom all his liabilities," Probably enougli has been said to establish that the present Act is retro- active in its operation, in so far as regards the distribution of tho assets of the insolvent among his creditors and his discharge, and that it is jusl that it should have such operation. But if a more fall examination of the general question be desired, see the pamphlet referred to, where the subject of the retroactivity of Bankrupt laws is clearly and carefully treated. 2. Which arc mentioned and set forth — This clause describes the debis from which the debtor is freed by a discharge under the Act. They appear to be the following : a. All debts mentioned in the statement annexcvl to the deed of assign- ment ; b. AH debts mentioned in any supplementary statement hirnished by him previous to the discharge, in time to have a dividend reserved upoa them ; c. All debts which appear by any claim filed ; d. Ail debts upon neuotiable paper mentioned by him in his statements the holders being unknown. •• It may be stated in general terms that the debtor is discharged from all debts, the existence of which is disclosed by him or by the creditors tliem- selves, pOi isibU The object of this provision evidently is to hold out the strongest lucement to the debtor to ^ive full oarticulars of his liabilities ; M i: 66 COiMPOSITIOX AXn DISCHARGE. and as the nci^locl of this duty impeillsi his diFchar2;e, the grejitest care .should always bo taken by the insolvent tc inelude in liis statements every debt that can be alleired to exist against him. In doinjj: this, it is not necessary to admit the whole of a debt to be due, if in reality its amount is disputed. It can be nienlioiicd in the statement accnrdinir to the amoinU claimed — and either sjniply described as " disputed,'' or a more particular description may be inserted of the i;T0unds of objection to it. A)ul in cases of compul- sory licpiidiition, the debtor shonld see that every creditor has tiled his claim — auel if not, should produce and file a list of liiibilities shewiiiir those who liave not (l(;ne so. Fur unless this {)recaulioii tje taken, a eredlMr may retain liis recourse aijainst the debtor >imnly by abstnininir trom iyliui^ his claim, ^"ee for the eliect of a discliarae 1 1) ^.: .\!. p. 7.'M, and ;is to que.-tioiis arisinix u;>f)n dcdils contracted in a iureign countr}', see i>Uny on coin! id of laws, pp. ;"3fi7 ci ,•>>■/. 3. Obtdining Hie mime Jin'dend — Any time before the linal dividend will do, Ih'ctiusc a creditor wlio iiad not previously proved, would be entitled to be collocated in the final divi- deiid sheet lor all previous liiviilends out of the moneys in iiand, before those who had lecived tlie previous dividend.^ could get anything. 4. ['nlctinii'ii iij tho In^, hypo- tfui/U(\ lien or coHatera.l sei-nrity held by any creditor as seciiritv lor any debt th'er'-bv diseh:ir<2;od ; iShnl/ nnt operate any cha^n^e — The object of tliis clause is lo protect the creditor to whom tl)e bankrupt is primarily liable, from losing his recourse against endorsers or sureiies by consentinir to Ids liischarue. A similar provision is to be found in the Scotch Act, ^ 56. IVIurdocli, p. i''25. See as to Eni;lish ruh;, Hrovvn vs. Carr. 7 Ming., 508. E.v parte \Viiliarn.«on. 1 Atk.,84. Taylor vs. Mills. 2 Cowp., 5".I5. Young vs. Hochley. 3 Wils., 3'lt). Inglis vs. iVbacdougal. 1 IMoore, h<6. See also Code Com., art., 545. 2 Heilarride, p. 499. Certain debt.? excepted from opuratiou of discharge. But the cre- ditor may ac- cept the dividcii'i. 5. A disehar^e itnder this Act shall not apply, without the express consent o( the creditor, to any dfdd lor enforcing the payment of which the imprisonmenl of the deotor is porniitled bv this Act. nor to any debt (\w^ as daniai;es for iiersonal wrongs, or as a penalty for any oU'encc of which the insolvent has been convicted, or as a balaniH! of account due by the insolvent as an assignee, tutor, curator, trustei;, exi!culor or public otiieer ; nor shall sucdi debts, nor tiny privileged debts, nor the creditors tlfreof, be computet! in ascertaining whether a su(lici<'nt i)rojiortion of the creditors of the insolvent have done, or conscnied to any act. matter or thing under this Act ; but the creditor of tiny debt d[U' as a balance of account by the insolvent as assignee, tutor, citrator, trustee, executor or jntblic officer, may claim and accept a dividend thereon from the estate without being in any respect afl'ccted by any discharge obtained by the insolvent ; CONFIRMATION OF DISCHARGE. 67 the the 1<'d mal (!nt Ihe 1* or .is, her ;ive ct ; lh(; 1. lie computed— For instance, if a debtor owed £9,000, of which £500 was a balaaoe of amount due by him as tutor, and £500 due as arrears of salary, not in ary case exceeding three month?, to liis clerks and employes, he would not oe relieved from a demand of payment of such balance of account, or by any discharge under the Act, unless the creditor of it consented to the dis- charge. If therefore sucli creditor refused to consent, £6,000 would be a sutlicient proportion in value to render his discharge valid as to ordinary claims. If such creditor consented, the debtor wouKl re([uire the consent of creditors representing £6,375 currency, to constitute such proportion. For in the one case neither the balance of account nor t!ie j)rivileged claims would form part of the muss, in the otlier, the balance of account would form part of it, but not the privileged debt. C. An insolvent wlio has procured a consent to Jiis discharge or thi; execution of a dt-ed of composition and discliarge, within ihc meaning of this Act, may file in tlie ollic( (jf the court the con^cnt or deed of composition and disi-hargc. and may then give notice (Form O.) of the same bcinir so filed, and of his intention to apply by petition to the- Court in Lower Canada, or in Uj>per Canada to the Judi^e, on a day named in such notice, for a confiriuation of the discharge eflected thereby ; and notice shall be I'ivcn by advertisement in the Canada Gazette for two months, and also for the same period, if the a})plication is to be made in Upper Canada, in one newspaper, and if in Lower Canada in one newspajier published in French, and in one newspaper ])ublislied in English, in or nearest the j)lace of residence of tlu; insolvent ; and upon such application, any creditor of the insolvent may appear and ojipose such con- firmation, either upon the ground of fraud or fraudulent ])reference within the meaning of this Act, or of fraud or evil practice in jwocuring the consent of the creditors to the dis- charge, or their execution of the deed of composition and discharge, as the case may ])e, or of the insulliciency in numi)er or value of the creditors conseniing to or executing the same, or of the fraudulent retention and concealment by the insolveiit of sc^ne portion of his estate or elli'Cts, or of the evasion, prevarication or false swearing of the insolvent upon examination as to his estate and eil'ects, or upon the ground that subsequent to the passing of this Act the insolvent has not kept an account-book shewing his receii)ts and disbursements of cash, and such other books of account as are suitable for his trade, or if, liavini^ at any time kept such book or books, he lias refused to produce or deliver them \o the assignee ; 1. Of his intention to aiyplij — Notice of this application may be given at any time after the assignee has been appointed, it the insolvent has procured the requisite consent, or deed, as the ca^e may be. For, although as shown in the note to p. 1, ante, the validity of the discharge may not be susceptible of conclusive proof until after the two months allowed tor filing claims have expired ; there appears to be no reason wiiy the proceedings of the insolvent prepara- tory to applying for culirmation of his discharire should not be going on; as belore he can actually make his application, all parties will be in a J of the sutliciencv in number and value of the creditors Proceedings to olttain coa- firui.itioa of discharge. Creditors may oppose, and on what grounds. po Ji wlio have sigueii, and to contest it if they think proper. \ 68 a.vm:llixg discharge. i If confirma- tion be not demanded within two months pro- ceedings may be taken to annul the discharge. Petition for annulling and proceedings consciiuent thereon, 2. Evil practice — Such, lor instance, as 'jivinL' a valuable consideration to procure a consent, or the t.'xer.ution ot a tleuii. Soi' jHt^t, p. 13. 3. Sul'seiiuent to the jmsi^iiifr of' t/ti'^ Act — In rt'specl of tiie punisliinont of a dobtor for not having kept proper books of account, tlie Act is not retroactive, nor should it be. But while it does not exact much in th<> futuri;, the pt^nnlty tor not doing the little which is necessary in tlie way oi' I'ool.kcepiuL; is tjcvere. A cat-h book is treated as being essential to eveiy buriuess, but as to his other books the inf>olveul is permitted to follow tl.n custom of tlio.se who cary on the same trade as liimseif. If lie ut'iilect,* t'j keep a I'ook showing his receipts auil disburse- ments of cash, or neglects to keep si;c!i f'ther books as are builuble to his trade, the conlinniition of liis discharge may be prevented. '1. If' /taring (It any tiidi'. kept nuch txink-f he han ri:f'nged — Tliis applies eijuaily to books ke[)t before and to those kept after the passing of the Act. 7. If till' insolvent docs not apply to the Court or Judge for a confirmalion of such discharge within two months from the time at which the same has been cflected under this Act, any creditor for a sum exceeding two hundred dollars, may catise to be served a notice in writing upon the insolvent reipiiring him to file in the Court the consent, or the d^cd of composition and discharge, as the case may be ; and may thereupon give notice (Form P.) as hereinbefore provided with regard to applications for confirmalion of discharge, of his intention to apply by petition to tin; Court in Lower Canada, or in Upper Canada to the Judge, on a day named in such notice, for the annulling of the discharge ; and on the day so named may present a petition to tlu; Court or Judge, in accordance with such notice, si'tting forth the reasons in support of such appli- cation, which may be any of the reasons upon which a confir- mation of discharge may be opposed; and upon such applica- tion, if the insolvent has not. at least one month before the day fixed for ihe presentation thereof, filed in the ofiice of the Court the consent or deed under which the discharge is efiected, the discharge may be annulled without further encjuiry, except as to the service upon him of the notice to fiU; the same ; but if such consent or deed be so filed, or if upon special ap))lication, leave be granted to him to file the same at a subsequent time, and he do then file the same, the Court or Judge, as the case may be, shall proceed thereon as upon application for confir- mation of such discharge ; Does not api'ihj jvithin two months — The insolvent would probably be held to have applied within the niean- ing of this section, if he has deposited the consent or deed of composition, and inserted the required notices. For the period of two months from the time at which his discharge has been etl'ected, would not enable him actually to present his application to the Court. This clause merely reverses the order of procedure permitted by the preceding section. If the debtor omits to bring the validity of his dichargo to the test of judicial scrutiny, lie may be forced to do so by any creditor who might have opposed its confirmntion, had he applied for it. Neitlier the proceedings nor the result will be atfected by the nature of the issue when once it has been completed : whether it be joined on tlie contestation by the creditor of an application for conlirmation, or by the insolvent of an application to annul. ' for a m the t, any /s'lve him ■ DISCHARGE BY THE COURT. (^9 8. The Court or Judge, as the ease may be, upon hearing Power of the application to confirm or to annul the (liscliarge, the objec- Court or tions thereto, and any evidence adduced, shall have power to "'"^EC make an order, either confirming the discharge absolutely, suspensively, or conditionally, or annulling the same ; and such order shall be final, unless appealed from in the manner herein provided for as to appeals from the Court or Judge ; tSuspensi rely or conditionally : — That is, it may be coiihrnied ; but i*s operation may be suspended for such period of time as tlie Court or Jiuiire miiy order, as a punishment for any delinquency or impropriety ot ccnduct by tlie iisolvent which i.s con- pidored reprehensible, but not so much po as to justify the annuliin^ of his tlischarire. Or it may be conlirmed, on condition o! the performance by the Insolvent of some act or acts wliich it is considered his iluty * > do, but the neglect of which does not involve any J'raud, and does not appear to tho tribunal of sulficient importance to justify the refu>al to confirm his dis- charge, provided lie liiially performs it. These j)o\vers may l>e most bciu'licially exercisod as a check upon the conduct of debtors, by punishini:- tla'ir minor dolintiuencies, and by compel- ling their attention to the reasonable requirements of their creditors. 9. Until the Cinirt or Judge, as the case may be, jins con- Efibct of cou- firnied such discharge, the burden of jiroof of llie discharge iirmation. being completely ellrcted under the jM'ovisions of this Act, sliall be upon the insolvent; bnt the confirnuition tliereof, if not reversed lit appeal, shall render the disehari^e thereby confirmed, final and conehisive ; and an aiiliienlic copy of the judgment confirming the same shrill 1)e snllieienl evidence, as well of such discharge as of the confirmation thereof; Being completely ejTectcd — That is to say, tlie Insolvent who pleads a discharge which has not been confirmed, must prove that he lias ohtainml the consent of the requisite pro- portion of his creditors, in number and value ; which, of course, involves establishing the entire amount— and, to some extent, the nature also — of his liabilities ; lourt or judge insolvent has not obtained, from the iXMpiired proj)ori ion of tor discharge, creditors, a consent 1o his distdnirge, or the (^xeentictu of a deed of composition and diseliarge, he may apply to tla; Court in Lower Canada, or to the Judge in Ujiper Canada by petition, to grant him his discharge, first giving notic(.' of such applica- tion, (Form Q.) in the manner hereinl)efore provided for notice of application for confirmation of discharge ; ! ( 70 KXAMINATION OK THE INSOLVENT AXI) OTHERS. First giving notice : — Ante p. 6. Tlie Enulisli act allows of sncli an application only after the expiration of three yoara from the refuKal of a certilicate of conformity. Opposinft such !'• Upo" such a])plic'nti()n any rrrdilor of tlio insolvrnt may application, appear iiiid oppose tlic L;r;inlin:( ol" sncli dist-liariijc upon any ground upon wliicli llie conlinualion ol" a discharge may be oj)j)osed uiKh'r this Act ; Judgment of Court. Discharge, &c. obtained by fi'aud to be Toid. \2. The Courl or Ju(ige, as l!ie ease may be, aft(^r hearing the insolvent, and the objecling creditors, and ruiy evi(h'n{;e thai may be adduced, may make an order either graalitig the discharge of the insolvent absolutely, conditionally, or suspen- sively, or refusing it al)s()!ntely ; and such order shall be linal, unless appealed from in tlu* manner herein provided fora})pea]s from the Court or Judge ; May make an order : — The onler which the Court or.luilize may prant, upon the application of an Insolvent for a discharge, is pubstantially tlie same as that wiiicii may be delivered upon an application lor llie conhnnation of a discharge ; and upon obtaininrliseiucnt giving notice of an assignment, or of tlie apiioiiilment of an ollicial assignee, the assignee shall call a meetitig, l)y adverlisemeiit, of the creditors, for the public examination of the insolvent, and shall summon him to attend such iiieetiug; and at such mi-etingthe insolvent may hv. exaiuined on oath, sworn before the assignee, by or on behalf of any creditor present, in his turn ; and the examination of the insolvent shall b(; reduced to writing by the assignee, and signed by the insolvent ; and any questions put to the in- solvent at sucli meeting which he shall answer evasively, or EXAMIXATIOV OF THE INSOLVENT AND OTHERS. 71 refuse lo answer, shall also he \vritl<'n in such oxaniin;'tion, with the replies nmdc by the insolvent to such (jnestions ; and ^jf"^"Jg^J the insolvent shall ssiij^n such exaiiiinalion, or if he reliise to sitrn the siOiH*, his refiisjil shiill be entered at the loot ol' the oxaiiiinalion, witli the reasons of sueh refusal, if any, as Lfiven by himself; and >ueh examination shall be attested by the assii^nee and shall be filed in the olHcc of the court ; E Forl/irpiihUce.Tdminationoflhtlnsolrcnf:— It is nol ii<.'cc;>s;iiy that llio int'eliii;jr at \v!ii.,'li the puolic exatn'mation of the Iri.-oiveiit is to take phice, should ije called tor thai piiipose exchisively ; but sucii exainiiiatioii may 1)0 one of the iiimieiuiis matters wiiich the statute enniirt to In; (li>i)Oheil oJ at the fir.-^t i^rener.il meetiii,:; of creditors which is icM after the expiry of two inotiths tVom the date of notice of tlie appoint- ment of an as?i;.'iiee. 5 11. p- '^. •2. Anxicer enisivelij : — I'Jiis i? a groiiin! fur refusltiir to confirm a discharge, ante p. 6. 3. Ixi/sv lo ani^w. 7' •' — Thii kind of coridnct on the part of the Insolvent, thnuL'h not expressly detdared to constiliite a f^round for refusiiiir to confirm liis dischar>_'e, wouhl, if the ipiestiniis \ver(! reasonable and related to his estate and elfects, be a circumstance tendaig to raise a suspicion ot traudulent coiiceaimeiil or reten- tion of liis edects. But, of coarse, the nature of tlie presumption that wonld be raided by such refusal, wonld depend upon the (pie-.tions to whicli it applied. An unreasonable refusal to auswer, or to si;j:u Ids exannnalion, or, in lact, any olhei contumacy on the part of the Insolvent, should form a suilicient jrround, however, for suspending his discharge. But under p. 6, post, \]t\ conld be pnnisiied as any other witness mijzht be who conducted himself in a similar manner ; aiul under the same p. he miyiil receive pay- ment lor his attendance, like any other witness. t ('I 2. The insolvent may also be from time to lime examined as Examination lo his estate and ell'eets upon oaUi, before the Jiid^^e, by the «' iii=<'lvent assignee or by any creditor, ui)(»n tin order from llie .Judo^e ^' ''">''*-' *"° obtained without notice; to the Insolvent, upon peliliuti, selling forth satisfactory reasons for sui'h order — and in' iiri} also be examined in like manner upon a suhpaind issued as of {H)urse without such order, in any action in which a writ of atttieh- ment has been issued ai^ainsi his estate and eljeels ; which subpiinn may be pnx'ured by the phiintiH", or l>y any crediior intervening in the action for that purpose, or by the assignee; l'\ 1. From time to lime crmnined : — This provision enables the .assi^xnee to obtain from the debtor any infor- mation recpdred, before the time arrives at which his pub;i(; exuniiiiation takes place. :i. Witlmut notice :— The insolvent has no interest to re(juire a notice, not haviui! any riirhi to oppose his own exaniuiatii;n. 3. Upon a lSul)p(fna : — The power of is-.uiup" an ordinary K'uI)j)i: ua, to compei the atteinlance ff the insolvent, in all eases which tiavo beeu coiuuu need by a'.tachnient, renders it uimecessaiy lo obtain the order ot a Jndue for that |air,iiisi', except where proceedings in Insolvency have been commenced by voluntary assignment. And it is a most important privilei^f, as it may be used l)y tlie assignee, if necessary, immediately after his appointment, and afterwards whenever he wishes to procure information respecting the Iusoiveut"s estate and effects. 72 PROCEDURE GENKRALLY. „ 3. The insolvent may also be so examined by the nssi<;nee )y assignee or or by any cri'ditor, on the application of the insolvent lor a ilis ipplicat'ion° f'hari^e or for the confirmation or annulling of a discharge, a Examination cr application - n , ,. •' ■ . ' ' . , for discliargo, any staf ■ ol such procei'tiing or upon any petition to set aside ^c. an attaciiiuent in the proceedings for the compult^ory licjuidation of his estate ; diuiuc.l, Other por30us ^' Any ot Inn* pers'Mi wlio is believed to possess information may be ci- resDcctiu^ lhf> estate or elleets of the. insolvent, i;r\y also b(? froju time to lime examined before the Judge iij)()ii oath, as to such estate or eirecis, uj)on an order h'oin llie Judge to that oftect, which order the Judue may giT.nt upon ])etili(Mi, S(Mting forth sntisfju tory reasons for such order, witiioiit iioliee to the insolvent or to the person to be so examined ; Insolvent to fttton^l iHCOt- ings oi'l.is crc'-litors. CouJuct of tvilucsses. Their co!>t3. 5. The insolvent shall alti'ud all meetings of his creditors, when siimnion(.'d so lo do by the assignee, :\ni\ shall :iii>\verall <)nestions that may Ijc put lo him at siieh meetings touching his business, and tonehinir his estati; and elfects; and for evry su(di attendance he shall be paid such sum as shali be ordered at such UK <'ling, but not less than one dollar ; 7Vic Insclctnt shall (i!t,:v.fl — This is .1 (liity inv.-.o.-etl upon tlie insolvoiit, for tlio nnn-poifoimar.co ol wlufli no puiiiftliinent is pr('~!C!il)t"l ; 'out, il(jiil>tli!>s, a relusri! by l!it' (k-htnr to attiMiil a moL'tinij" ol'liis creililnrs, or, when prer^eiit, to answor any proper quL'stioii tlia* i> put to him at such a nieotiiiir, would be considoied, it appii- catiou wero inailc for the su.ipcnsiou of his I'.ischarge. G. Anv oer-on summoned for examination or under exami- nation under this Act shall be sMl)ject to ])iOceedings and punish- ments similar to those which may be taken against or indicted ui)on ordinary witn^ ss<'s ; and on application, the Judge may at his discielion order an a.Mowanee to be usade to jiersons so examined, of a like amount to iIkU allowed to witnesses in civil cases, and onh'r them to be |)aid such allowance out of the estate orodierwise. OK I'KOCKOrRE GENERALLY. iNiiticps umlov 11. Nvttice of m<'etings of creditors atid ad other notices tins Act, how li-ii-iii re(|uired to be given bv advertisement, without special ° desii;t,ation ol tiie nature ol such iu)tice, shall be so ^-iven by j)ul)licatitin thereof lor two weeks in the Camula (lifzclfe^ also in Lower Ciiuida in every issue diuing two weeks of one newspaper in Kn^dish and one in French, and in Upper Canada, in one new -paper in Rnglish, published at or nearest lo the place v. li're the proceed iiui;s are being carried on, il such newspap'-rs nre pnblishi'd within ten miles of such place ;and in any ,Nise the assignee or person giving sucth notice shall also address notices thereof to all creditors and to all represen- tatives of f;reign creditors, within the Province, and .shall mail PROCKDURE GENERA r-LY 73 us the same with the postage thereon paid, at the time of the insertion of the first advertisement • 2. y\ll ([ueslions discussed at meetinj^s of creditors shall be decided by the luajority iii nimil)er of all creditors for sums a])ove one hundu'd dollars, present or rejiresented at sueli meetini^, and represent inii!ateii ai sucii meeting, without having been sj)eeiHl!y mentioned in the notices calling such meeting, nolwiihsianding anything to tin- contrary in this Act contained, due rcgarvl being had, howevet, to till! pro|>ortions of crc'dilors required hy this Act ibr any such vote, resolution, order or regulation ; Ctilli'if Ji))' (he ordering of (he njfairs of (he esdttc lieL-ii alifiuiy rfrnarkcil, il i< ol ilie utmost iinj»uil;iiK'e that a.^ luau} as possible of the niaUcrs and lliinus, llui liircclloii of wiiich falls witliiii tiie juri.sihctioii of tlu; criHlitors, f-houKMie ilisposeit ot at this nicen'tiii. uruler the freiii'ial form of notice providtnl for by this clause. Amon^ such matters are tiie liillowiiitr : 1. Tlie eiiai'tmeiit of rules, orders and ihreclions for the jj;iiid:iiice of the afsiaiice. 5 1, p. 4 2. 'Miu ri'^xidatioii of tlie rtioii of tiu> n-poil of llie .issimice upon ;ln" del>ts n'maining nn'.'oileelcd- and the makiii:^- of l;.j ;:ii'ii-itv.' order sanctioning: llieir sale, il thouiiiit expedient. §4, p. II. 4. The reirulalion of the pi"--,> I of a IvcrUsi'mi'iit, aiu! (»f l!ie terms of the Bale of the real estate : a!id of tl.e >ale thereol siibhccpicnt to a witiidrawal of it from public sale— if .'•ueh willubawal .should be found necessary. ? 4. 5. The removal of the assi:.-nee, and llie appointment i>f another in \\'\< place. § I, p. 18. 0. The rale of remuneration of the assired sutRcient, the assij^TUf e may assume the security tor the beiitlit of tlie estate at ten per centum advance upon tlie estimate, and the creditor ranks for the dillerence. 5 5, p. 5. How to be at- 5. The chiims shnll be attested -inder oath, taken in Canada tested. before any .Jndi>e, Commissioner for 1;d\inij Allidavitsy or Jus- tice of the P(^:tc(^, and onl of Canada, before any Jndi^'c^ of a Court of Record, any Commissioner for tidvincf Aflldavits appointed by any Canadian Court, the Chi<>f Mimieip:d ()ffif;er for any Town or Citv, or anv liritish Consul or A'ice-Consid, or Ix'fore any other )>erson antliorized by any statute of this Province for faUinii^ tdlidavits to be used in this Province ; Supplement- ^- Tiefore the preparation of a dividend sheet, the assiii^nee ary o.itii in luay recjuire from any creditor a suj)plementary o.'ith declarinir certain cascs.t -^vhat amount, if any, such erediioi;has received in part payment of llic debt upon which his claim is founded, sid)s( (luent to the makinj: of such chiim, toi,^ellicr with the particulars of such payment ; ;ind if any creditor refuses to juddiice or ma"ke su(di oath before the assiL!;nee within a reasonable time after he has been re(jiiired so lo do, he shall not be collocated in such dividend sheet ; Suc/i cnditor lnii> received in p'trt j'tn/mmt. — Tlio object of this (dau>e is to allonl the means of carryinij; out (iie provi- sions of v^ 5, p. (). If the claim ol'a creditor is couipo-eii of several items — 'say for instance, of several promi-sory notes or lulls bearinu diliiTent natnes, upon sir.ne of which the insolvent is only eecondariiv liable, and th(5 maV >r, ncct.'ptor or a previous endorser shoidtl pay one of such notes or bills in full ;-lhe amount of such note or bill should bt; deiiuctvd iVom the claim, and all ranking upon it -hould cease. And by the .supplementary oath, which may be rctjuirctl from the claimant nuilei- t'lis (dause, the a.spignee can ascertain whetiier or no any f>nch payment lias been made. It is only in such a case as the foregoiiiG: that the oath is of use — as no ordinary payinenl on account, will jjive the assignee the riirht of demanding a deduction from the amount ranked fur. Sue note to § 5, p. 6, and aullio- rities there cited. this rnee PROCEDURE GENERALLY. 75 7. li, in Lower Canadn, any claim be sccnrrd by JnjpotIu'(/iie Claims sc- npon llie real cslate of the insolvent, or if it consists of any cured l)y hy hijjjolhet/ue ov privi/e'se upon such real estalt; or any pari ^]^'''|.'^1,"'^ ^F thereof, the nature of such hijpolhiyue or jnivi/oj^e shall be l. C. ' summarily si)ecilie(l in such claim ; bnt unless such i-laim be Documents to filed with the assignee, uitli the deeds and documents in snp- toijotilcJ,&c. jjort thereof, within six days from the day of sale of the pro])erty ailccted thereby, ov if not, unless leave to file the same 1)0 afterwards obtained from the Judge npon special cause shewn, previous to the distribution of the proceeds of such real estate, or unless a dividend upon such claim has ])ecn reserved by the assignee, such claim shall not ])e entitled to any preferential collocation upon the ])roceeds of such real estate ; Unless a dividend ♦ • * Jiaii been reserved. — If no claim be tiled for any debt uliii;li the assignee ha? rea>on to believe is due— it is his duty to reserve a dividend upon tiie amount of such debt. '} 5, p. ri. 8. Any afTidavit required under this Act may be made by wiio may the party interested, or by the agent in that behalf having a n|ai;c nthda- personal knowledge of the matters therein stated ; ^ijj^ ^Yct. 0. One clear day's notice of any petition, motion or rule, shall Notices of be sutlicient if the party notified resides within iitteen miles of proceedings, the placi! wlu>re the proc(U'ding is to be taken, and oiie extra day shall be sufficient alIo\van(;e for each addilitxiai fifteen miles of distance between the i)lace of service and th; place of proceeding, and service of such nolice shall l)e mad(! in such manner as is now |ircscribed for similar si-rvices in that section of the Province within which the service is made; Service of .^uch notice. — Kulos 17 ami 18 make provisions for sucli services, in a manner similar lO that adopted under the previous practice in like ca*es ia Lower Canada. 10. Th(> .ludge shall have the same ))ower and authority in rommissions resjiect of the issuing and dealing wilh Commissions for the (\\a- f'."" t'xii"i»ii!i- minalion of witnesses, as aiv. ])ossessed hy the ordinary Courts n'^yggg ^^ ' of Record in the section of the '.'rovinec in which the pro- ceedings are being carried on ; Co >n )!i l*,s".<10/!.s". — See Cons. Stat. L. C. pp. 737-8. 11. .Vl' rules, orders and warrants, issued liv anyJiulge or nulcs, &c., court in any matter o?* proceeding und.r ih:s Act, may l)e i'>av t^e served valitlly served in any n.-Mt of this Piovinee upon the ijartv *.?.""il' r'"?"^ °^ rr ' I I .VI. . II ' • I- 1 ' t'"- Province, artected or to be atiected liiereby ; and the service ol them or any of them may be vfdidly mad<' in such manner as is now prescribed for singular services in that part of the Frovinco within which the service is made ; antl the jierson charged with such service shall make his return thereof and on oath, or, ! 76 PROCEDURE GENERALLY. K if a slieriftor bailifl'in Lower Canada, may make such return under liis oath of office ; 1. In any part of thiti Province. — That is to say that sucli tlocuinents may be served in a part of the Pro- vince ililFerent from that in •.vhicli tlie Judye or Court issuing them, has jurisdiction. So that a Jmlge at Montreal may issue a rule, order or war- rant whicli may be valuily served in Ujiper Canada. 2. Seri'ice of them may he luilidly made. — That is to say the service o*' a rule, order or warrant issuod in Lower Canada will he validly made in Upper Canada, if that mode of service bo adopted which is usual lor siinilar proceeilinys in Upper Canada. 12. The fonrlli, fiflli, scvetilli, ei;.(lith, ninth, tenth, eleventh and ihirt(!enth r^edions of chiipler seventy-nine o( the Consoli- ^l''/ °"', ^^'•^^' dated Statutes ol' Canathi shall apply to i)roeoedin'fs nnder this apply. '*''^ ' '^'^'^^ "'^' "^^'hole (d tliiipti^- eii^hly ol tlu; said C.()nst)li(laletl Sla1u1e^s shall also apply to proecM-dini^s under this Ael, in ti'.o same liiaiHier and lo the saiii" extent as to proceedings before Courts of llfeord in 1,'pper and Lower Canada; Certain ss. of caps. 7!) and 1. The Atli, Wiy i'.p.cliom^ of Cap. 79. Forms np peudcd to be used. In other cases ordinary lanjrnapfo to be iiUillciCQt, Amendment of prooecd- iuga. Tliesi; sections jnovide for the issue of huhpu'iias runnmg Jrom one .«i.'Cliur, of the Province into the other ; for the .-ervice of such subpo'uas, :v:d its prool ; lor the jjunixliment of the parties sninir.oned it they do not attend, and th.e till'iw.uici's lo i,c made to tlicin it they do. 2. Chapler Eiirhlu This chapu-r tacililates the admission as evidence in Upper Canada of judiiinents, i!t crcfs and judicial proceedings retidered or made iii (ircat Mrilain. liie United Slati-s, or l.uwi>r Caiuula. — And also simpldio tite mode ol' proof of oliicial acts, jiid^cinents, ami jiuiicii'l proceedings giMierally. There \< a similar and moie complete statute in Lowt.'r Canada, forming Chapter 90, of the Consolidated Statutes f)r that section — which will ;'")ply under its own provisions, lo proceedings under this Act. LL TIh' forms appended to this Act, or other forms in eijiii- V!il(Mit terms, shall he used in the proeeedinu;s for which such forms are provided ; hul in every petition, appliealioii, motion, contestation, or other pleadinir under this Act. the parties may stale the facts upon \\ hieli they ndy in plain and concise lan- guage, to the interpretation of which the rules of conslruction a|)plical)le to such language in the oniintiry transactions oj'life shall ap|)iy ; and no allegation or slateuK'nt shall he held to he insiilheiently made, uidess hy reason of tmy alleged insuf- Iiciency the opp(^sing i)arly be misled or ttikcn by surprise ; 11. The lilies of procedure its to am(Midmenls of pleadinir<, wlii(di are in forcv at any place where any proi'eediiigs iiiider this At't are carried on, shall apply to all proceedings under this Act ; and any judge hefore whom :tny siadi pro(H'edings ari' bi.'ing carried on shall have full power and aiitlioiily to apply the appropriate rules as to amendiueiits, to tin; pro- ceedings so pending before him ; and no plea windinir no of his 1^''"',V"S Pi'O" estate ; antl liis lieirs or other leii^ai representatives may (con- tinue the proceed in <:i;s on his Ix-liall' to tli(> procnrini^ ol" a discharge, or ol" the conlirmatioa tlieieol", orol' bt)li; ; 10. The costs of the action to eomjiel comjinlsory liquidation costs to com- s'lall b(^ paid by privilege; as a first ciiarge vi])on the assets of pci compul- tlie insolvent: and the costs of the iud' IW^iJa- ... ' - . . . •' f^ _ .... 1(111. the discharge of the insolvent, or of the discharge if obtained direct from the Court, and the costs of winding uj) the estate, being first submitted at a meeting of creditors, and afterwards taxed by the judge, shall also be paid therefrom ; 17. In Lower Canada rules of j)ractice for regulating the due p, g ofprac- conduct of proceedings under this Act before the Court or ti<;o and tiirifl Judge, and tariffs of fees for the Olllcers of the Court, and for «'ieesmL.U the Advocates and Attorneys j)ractising in lelation to such pro- ceedings, shall be made forthwith after the passing of this Act, and when necessary repealed or amended, and shall be pro- mulgated, under or by the same authority and in the same manner as the rules of praeti(?e and tarilfof fees of the Superior Court for Lower Canada, and shall apply in the same manner and have the same efi'ect in respect of the proceedings under Taxation of this Act, as the rules of practice and tarilfof fees of the Superior costs. Court apply to and afi'ect the proceedings before that Court ; and bills of costs upon proc(>edings under this Ad, may be taxed and jiroeeedcid \i])on in like manner, as bills ot costs may now be taxed ancl proceeded ujjon in the said Superior Court; 18. In Upper Canada the Judges of the Superior Courts of puip^ nmi Common Law, and of t lie Court of Chancery, or any five of tariiria U. C. them, of whom th(> Chief Justice of Upper Canada, or the Chancellor, or the Chief Justice of tiie Common Pleas, shall be one, shall have power to frame and settle such forms, rules and regulations as shall be followed and observed in the pro- ceedings on insolvi'ncy under this Act, as they may deem to be necessary, and to fi*x and setth; the costs, fees and eharges which shaU'or may be had, taken or paid in all such cases l)y or to Attorneys, Solicitors, Counsi>l, Oifieers of Courts, whether for the Ollicer or for the Crown, as a fee for the fee fund or otherwise, Sherilis, Assignees or other persons wlH)m it may be necessary to |)rovide for. GKNEKAL PROVISIONS. t*i. In all cases of sales of merchandisi^ to a trader in Riprhts of un« Lower Canada subsecpu-ntly becoming insolvent, llie exercise of Ji^ij|j^'^J^;';.^ the rights and privileges conferred upon the unpaid vendor by 78 GENERAL PROVISIONS. *ume de Pam, the one hundrod and seventy-sixth and one hundred and restricted. seventy-seventh articles of the Coutinne de Part's^ is hereby , restricted to a period of fifteen days from the delivery of such, merchundise : i^ ... .| ; i *:! I! The riirhts and pn'vileges of the unpaid vendor. — The lUL^ht of reveiulicatiiii.^ yoocls sulci a te.rm.e lias been pressed very far in Lower CiUiacia, ami has frcMjuently resulted in great injustice to the general creiiilors of an insolvent estate. It appears to have been considered that the duration of the period between the sale and ihe revendicalion was of no conse(pi(Mice ; nor were the elfects relieved from the operation of the law, by the fact of the piirch;iscr havinir iiiven prornit^sory notes for such purehasp, nor in eonse(inence of siujh notes havin:^ passed out ot his pos- session by being di>cotinte.l. Cousequently a debtor with a large stock of goods on hauil ; and therefore with, and on the strength of, an appa- rent alMnidanee of assets : might obtain long credit on the purchase of the most saleable goods in tlic market. Jle might sell the whole ot such goods, expend the money and iail ; and every dollar's worth of the very goods which gave him the appearance of solvency might be appropriated by their vendors ; leaving nothing for the other creditors, although their claims might be for sales made subsequently to those which were thus virtually paid in full. It is plain that the existence of the right of thus revendicating goods sold — though alleiied to be an encouragement of trade and an aid to credit — was, in reality, the reverse; for it deprived of all weight the presumption of pros- perity which would otherwise naturally have arisen from the possession of an ample stock of goods. This evil was felt strongly in France; and in the discussion of the code de commerce and of the amendments of 1838, the great majority of the cham- bers of commerce expressed themselves forcibly, against the right of reven- dication allowed by the common law. i3y the law, as it now stands, the right of revendication has a character almost identical with that ot the Eng- lish stoppage m /n/rj.sw7i<. In order that goods sold may be revendicated they should be delivered ; that is, they should have passed out of the actual possession of the vendor ; they should not be paid fer — and they should not have entered the warehouses of the purchaser. Art. 576. 3. Bed. p. 193. And the latter condition is not construed over strictly, if, Ijy doing so, room is given for the occurrence of the great abuse to whicli this right gave rise. M. Bedarride says : *' La reveiidicalion a etc Kurtout admise parce iiall she be deprived by reason of \\< provisions of any advantage or right upon the estate of her husband, to which, in the abst iicc (>i' any siK'ii c()ntra(;t, she would have been entitled by law; In any clahn upon i/te e.'^Uile — Thi.-i claii.-«e, hnwcvtir, wuukl not prevent the wifi; from lioldiiiir property, if .-he lie Sf'jxtrie di> hitns l.y her tnairiaiie ('(nitraot. The c iilraci !>< only rendered nsch'ss to her to .sii])p()rt any elaiiii upun \\v\- hn-hand's (■^tate. •2. Aoy tihiitl f/ie he ih.privnl • • * * (,j uny adrtinldirn — If, lor instance, she has, by her marriage contract, renounced her cii.stom- ary dower and receivi-d the pioniise ol a ^Mm ol uu ney,or ot the nsufiuet of a .snni of nioiioy, in lieu ol snrli dower,— «tie will In; unabh; to (dain\ the money or u.sufiuet t-o settled upon lier, Lul she may insist upi^n her dower u;uler llie eustoin. The reason is, that if no contract be registereil, the creditors are entitled to pii'snnie that none has been exi'cnted. Hnt, if that incsnniplion In? acted upon, tlio whole of its coirse.pieuces must !oik)W, and, ammigt others, the existence oidouaire coufitniiLi; which, in the absence of a contract, would undoubtedly belong to her. 3. No iiidunK^nt shall be r'^ndtu"ed ajj^ainst any trader in Judirmenta la Lower Canada in any action against him by his; wile e/i seiia- :ictii)ns./i ie- ,. II- . f 1 , 'i I • 1 .1 luxnition lie ration de htens or en scpamtion de corps et de biens, unless the J,-^,,^ ^^ ,,g institution of such action is atlvertised continuously for one rendered ouly month in the Camilla (razdte. and in two newspapers published »*i '"crtam in or nearest to the place ol residence ot such trader, one in Fren(,'li, the other in English ; nor unless such action br brought in the district within which the defendaiil has his tlomieile ; and any creditor of the defendant in any such suit may inter- c-eai tors run y vene therein for the purpose of i xamining such debtor re>p<(t- iutcrveue. ing his estate and ellects, without be-coming liable for any costs either to the |)laintill"or to the defendant, and may also intervene tlwri'in, and opposi' tin- demand of the ))laiiilili', or subseciuently contest the validiiy of any judgment rendered therein, subject to the ordinary rule as to costs ; The experience of tlio List few years in Lower Canada renders nnneces- carv any explanation of the purposes of tliis clause. Those merchants will understand them, from whom ^^oods havn been jmrchased by a trader while his wile's suit I'n scjninition ilc ljien.'< j^^rb^ri actualh proceeding to judi:- ment c.r parte, who, after iretting judgment for the price of theni, have louiui his wife in possession of tiieirowu goods, amidst a .''ci.l at !ea>t u:ie iijipoitiinity of tliU'^ appreriatiiig the advan- taires ol ajndgment era nijniration (U hicns, and of pitying liberally for tho privilege. 1. Tlh' words " l^clon; Xoliui-'s" slnill mean cxcu-iilcd in Notarial ruitn according; lo liie law ol Lower Canada ; iIk? » r.f fore Not- '^^'ords '' tlh" Judm' " sliall, in Lower Canada, sii^niily a .Itidi^c arifsi." ol'llif; Superior Coiirl Idi L()W( r Canada, liavin.'r jiirisdietion at the doniieile of dio insolvent ; and in Upper Canada a Jnd^o IntiTfrci.i tion. " Jiulgc." " Court."' CVrtain pro- visions to , --_ij.,. _ _.-_|, ol'llie County Court oi" llie Ciainly or I'nion ot (yoiuiliesin wlii(di the proceedini's are carrii'tl on, and t!ie words •' llii; Coiul " sliali, in Lower Canada, signify the said Superior Court, and in rj)j)er Canada the County Court, iiidess ii is otherwise expressed or unless the context plainly recpiircs a diilerenl (tonstruelion ; but the twenty-fourth and twenty-riftli sections of the seventy-(di^htli cliajjler of the Consolidated Slatutes for Lowi'r Canada, inehulini^ snhseelion nuiulx-r two of the said twenly-fiftli section, shall Jil'ply in Lower Canada to j)roceedijigs under this Act ; T/ic lUh and 'IStk sections of the serenty-cifrht/i chnpfer — These sections permit of tiie action of tlie Prothonotury of tiio Superior Court in lien of the Judije, in certain cases, and provide a summary mode ot revising liio acts of tlio I'roUionulaiy under tiie powers thus conferred u\)Oii him. 5. Tiie word " Assignee " shall mean the ollieial assignee appointed in proceedings for eomptdsory licptidalion as w
"y assignee to whom an assignnv • is made under bo ngciin this Act, aiul every ollieial assignee a] ; d mider the pro- witbiii the visions of this Act, is an agent wilhra tlw meaning t>(' the forty-third, forty-fourth, forty-sixih, for" ._ and forty-iimtii " Assi.2uec." - Pay.'' " Creditor.'' " Collocated." Api'lication of Act to com- pauics, &c. lacaiiiuu aid loity-'Iiird ^e(•tion of the said ( ii.i|);i ; ; and in an indictm^-nt against an assignee or oITk ial assiiiiici" under riiiy of the said seriion-i, tlu' right ol |a(>|)eily in any moneys, set-nrity, mailer, or tliiin,', may be laid in '^ the creditors of the insolvent {iiainiuL;- li'nu), under tiie In.-olvent All i^( l>S(;i,^' or in the name ol any assignee subsei|ucntly ap- (loinled. in his (juality as su(di assignee ; 7. Tlii (hed of assiurnineni, or ;in autlKMitic copy tliertol", Pcl"! ot as- or a thdv aiuhentieatetl coin' of the order of th(» iudi;'e appoint- ';='j'"'"C"f.'^;''M ing an ollieial as>iLrnee, or a duly certified exiract irom the y;,,.r^^yjj^,^^^^ minutes ol' a met'ling of ciediiors, according to the mode in which llie assignee orollicial assignee is alleged lo be appointed, shall be pviuid facie (ivitlence in all courts, whetiier civil or cri- minal, of such appointment, and of the icgularily of all proceed- ings at the lime thereof and anteecdeut thereto ; 8. One per centum upon all moneys proceeding from the Pcrccntapo sale bv an assi'Miee, under the provisions of dns Act, of any f'^'"J\"'l'''"g II . • I f^ 1 1 n 1 * • 11 ail"' Jury immoveal>le property ni Lower Canada, shall be i'<''ame(l l)y p^,j,i i^ l_ (^ the assitjnee out of sucli moneys, and shall by sncii assign(>e be paid over lo the Sherilf of the- District, or of eithi-r of the coun- ties o'i (ia^pe or Bonav(M)ture, as the case may be, within which tile imuiovt able propi'rty sold shall be situate, to form part of the Ijuildjng and jur) Fund of such Distriei or County ; 1). 'J'he (iovernor in Council shall have all the powers with Power to im- respe( t to imposinjj: a tax or dul\ iinoii proceed iiiij-^ under this l"«cataxoa Act, v.'hicl) are conlerred upon the bovernor in Council l>y the [y l_ (;. thirty-second and iliirlv-iho-d sections of the one himdreil and ninth chapter of the C\)nsolidated Statutes for Lowi'r Canada, and by i!ie Act intituled: An Acl ti> inulio provinion for the. eri'ctiofi or reiniir of Court ITi)Usrs and GaoLi at ccrlahi places in Loii'cr Canada, (IJ Vic, ca[). \\l.) lit. This Act shall be called and known as '' The Insolvent SLo-t title. Act of ISU l,'' and shall conu- into force and take ellecl on and diei the first day of September next. .1 I ; luider lllie pro- (»f ill" [tv-ixiiitli G 82 APPENDIX. FORM A. Insolvent Act of 18G4. \ The Creditors of the undersigned arejnotified to meet at in on the th day ot at {eiii:lit) oVlock for the purpose of receiving stalemcnti? Of his afhiirs, and of naming an Assignee to whoni lie may make an assignment under the above Act. [Domicile of debtor^ and dale.) [Signature.) i [The folloimns^ is to be added to the notices sent hij post.) The Creditors holding direet claims and indirect claims, maturing before the meeting, for one hundred dollars each and upwards, are as follows : (names of Creditors and amount due) and the airgregatc of claims under one hundred dollars is $ h » [Domicile of debtor., and date.) [Signature.) f* \ \ et at th clay of urpose of Assignee e Act. post. ) ;t claims, each and icunt due) ,rs is $ APPENDIX. FORM B. Insolvent Act of 1864. In the matter of A. 13., an insolvent. Schetlule of Creditors. 1. Direct Liabilities. Name. Residence. 2. Indirect liabilities, maturing before the day fixed for the first meeting of creditors. Name. Residence. I 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 un- known. Date. Name of Maker. Names liable to Insolvent. When due. Amount. Nature of Debt. Amount. Total 83 !•' J;;| IMAGE EVALUATION TEST TARGET (MT-3) /y V.x 1.0 I.I laiM M2.5 1^ IM Ill 1.8 1.25 1.4 lllk^= ^ 6" _ ► V] §^.. y* ^>. O / Photogr-dphic Sciences Corporation 23 WEST MAIN STREET WEBSTER, N.Y. 14580 (7^6) 872-4503 ^ 84 APPENDIX. i!: Provixce of Cvxada, Di.sTRicT {or County) Insolvent Act of 18G4. I, A. B., ihe above named insolvent, being duly sworn, depose and say : 1. That to the best of my knowhnlge and belief, and aceord- ing to my books, the above schedule contains a true and cor- rect list of my liabilities, according to its purport, and that each of such liabilities is correctly classified therein. 2. That all of the above-mentioned liabilities are honestly due by me and that none of them were created or have been increased with the intention of giving to the creditor thereof any advantage either in voting at meetings of creditors, or in ranking on my estate. And I have signed. Sworn before me at 186 . this day of FORM C. Insolvent Act of 1864. of the of the second part, This assignment made between first part, and witnesses, [or) On this day of before the undersigned notaries came and appeared of the first jjart, 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 licieby does voluntarily assign to the said party of the second part, accepting thereof as assignee under the said Act, and for the purposes therein j^rovided, all his estate and etf'ects 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 hereto annexed. In witness whereof, &c. Done and passed, &c. w F 18G4. y sworn, d accord- and cor- ihateiacli ; honestly ave been or thereof )rs, or in day of of the !ond part, APPEJiDIX. FORM D. 85 Insolvent Act of 1864. In the matter of A.B. (orA.B.&Co.) an Insolvent. The creditors of the insolvent are notified that he has made an assignment of his estate and effects, under the above Act, to rne, the undersigned 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 ; ilie whole attest6d under oath, with the vouchers in support of such claims. {Place date) (Signature of assignee.) To (name ol insolvent.) FORM E. Insolvent Act of 1864. residence and description You are hereby required to make an assignment of your estate and effects under the above Act, for the benefit of your creditors. Place date (Signature of creditor. ) Notaries. of 1864" jluntarily aid party r the said state and latsoever. I part as t ihc first 5t part, is FORMF. ' Insolvent Act of 1864. Province of Canada, District of A. B- C. D. -, (name., residence and description.) Plaintiff; vs. — , (name., residence and description.) Defendant. I, A. B , (name., residence and description) being duly sworn, depose and say : 1. I am :he Plaintiff" in this cause (or one of the Plaintiffs^ or the clerk, or the agent of the Plaintiff in this came duly authorized for the purposes hereof ; I ' ' 86 APPENDIX. 2. The defendant is indebted to the Plaintiff (or as the case may be) in tlie sum of dollars currency for, {state concisely and clearly the nature of the debt) ; 3. To the best of my knowledge and belief the defendant is insolvent within the meaning of the Insolvent Act of 1864, and has rendered himself liable to have his estate placed in com- pulsory 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 insolvent, and as subjecting his estate to be placed in compulsory liquidation.) And I have signed ; {or I declare that I cannot sign,) this day of 18t) and if the deponent cannot sign, ^ add — the foregoing affidavit having been first read over by me to the de- ponent. (FORM G.) Insolvent Act of 1864. Province of Canada, District of Quebec. VICTORIA, by the Grace of God, of the United Kingdom of Great Britain and Ireland, Queen, Defender of the Faith. No. To the Sheriff of our District (or County) of Greeting :? We command you at the instance of to attach the estate and effects, moneys and securities for money, vouchers, and all the ofiice 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 territo- rial jurisdictioti) and the same so attached, safely to hold, keep and detain in your charge and custody, until the attach- ment thereof, which shall be so made under and by virtue of this Writ, sliall be determined in due course of Law. We command you also to summon the said to be and appear before Us, in our Court for at in the County (or Dis- trict) of on the day of then and there to answer the said of the plaint contained in the declaration hereto annexed, and „ further to do and receive what, in our said Court before Us, i the case {state or end ant is 1864, and in cora- ; and my f the facts ubjecling ,) >d, of the tain and Faith. lEETING : "ities for ipers and T territO' to hold, e attach- virtue of Court for ■ (or Dia- xed, and efore Us, APPENDIX. 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 Whereof, We have caused the Seal of our said Court to be hereunto affixed, at aforesaid , this day of in the year of our Lord, one thousand eight hundred and *i-\ty- in the (FORM H.) Insolvent Act of 1864. A. B., PliT. C. D., Deft. A writ of attachcment 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 defendant, or who arc in any way indebted to him, are required to take notice. {Place date. ) {Signaiure,) Sheriff. (FORM 1.) Insolvent Act of 1864. I swear that I {or, the Jinn of which I am a member, or, A. B. of of ivhom 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 appointment of an assignee to his estate, honestly and faithfully and in the interest of his credi- tors generally. (FORM K.) Insolvent Act of 1864. In the matter of A. B. {or A. B. & Co.), an insolvent. The creditors of the insolvent are notified that I, the under- signed {name and residence), have been appointed official 87 r 88 APPENDIX. assignee of his estate and effects : and they are required to produce before me within two months from this dale, 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, witii vouchers in support of such claims. (Place date,) {Signature,) OiKcial Assignee. (FORM L.) Insolvent Act of 1SC4. if In the matter of A. B.. an insolvent I!,.- In consideration of the sum of $ whereof quit ; C. D., assignee of the insolvent, in that capacity hereby sells and assigns to E. F. accepting thereof, all claim by the Insol- vent against G. H. of {ih'scnbing' the debtor) with the evidences of debt and securities thereto appertaining, but without any warrantv of anv kind or nature whatsoever. C. D., Assignee. E. F. FORM M. L\ This deed, made under the provisions oftlie Insolvent Act of 1864, tlie day of &c., between A. B. of &e., in 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 C. 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 Gazeltc 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 said CD., l;is heirs and assigns for ever, all {in Upper Canada inseft " the ri(::hts 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 I *f APPENDIX. appurtenances thereof, unto the said CD., his heirs and assigns for ever. Tlie said sale is so made for and in consideration of the sum of ^ in hand paid by the said CD. to the said A.B., the receipt whereof is hereby acknowledged {or of which the said CD. hath paid to the said A.B. tlie sum of the receipt whereof is hereby acknowledged) and the balance, or sum of $ the said CD. hereby pro- mises to pay the said A.B., in his said capacity, as follows, to wit— (/erit-ir Court in resprct of similir papers, as 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 1)g received or filed in any case, unless the same shall bo properly numbered and intituled in the case or proceeding to which it may refer or belong ; and be also endorsed with the general description tliereof, and with the name of the party or his Atturney ad litem liling the same. 8. In all appealable matter in dispute, the pretensions ol the parties shall be set forth in writing, in a clear, ])recise and intel- ligible Hianner, and the notes of the verbal evidence taken before the Assignee shall be plainly Avritten, 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 api)eal,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 tlxe Judge, as re(juired bj- 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, wliich 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 re- quired to be given, either by the provisions of the said Act or by an oi'fler 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 where otherwise limited and provided by the said Act,and upon good cause shewn, the time for proceeding after notice thereof has been given, may be enlarged by the Judge or Court whenever the rights of parties interested may seem to require it for the purposes of justice. 12. Whenever a particular number of days is prescribed fpr the doing of an Act in Insolvency, the first and last day shall not be I i 1 RULES AND ORDER9. 95 I computed, nor any fractions of a day allowed : and when the last (lay shnll fall upon a Sunday or 'Holiday, llio lime shall be enlarged to the next juridical day. [3. All affidavits of indebtedness made by a creditor, or by the rk or agent of a creditor, shall set forth the particulars and hire of thn dobt. with ihf> snnie degree of certainty and precision i; clerk v.. ^^^..v, w. .. ^..v....... . nature of the debt, with the same ciegree oi certauity ana precision ns 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, tis issued, be numbered iiiul entered successi\ ely by the Clerk in a Book, to which thure sIkiH Ik; an liulex, and to which acci'ss for examination or extract shall be had gratis, at all tinu^s during otiice hours. 15. Every such Writ shall describe the parties thereto, in the same nuinner as they arc described in the said affidavits of debt ; and the Declaration accompanyiii;^ the said Writ, shall be similar in its form to the Declarations re(_[uired to be filed in ordinary suits in the Superior Court. 16. No such Writ shall issue until after the aflidavit of debt upon which the Writ is founded, shall have been duly liled in the Clerk's Office. 17. All seivices of Writs, Rules, Notices, Warrants and proceed- ings in Lower Canada, except otherwise specially prescribed by the said Act, may be made by a Bailiff of the Superior or Circuit Court, 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 by 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 proceedings, shall be made bet""een the hours of 8 A. j\L and 7 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 liled for proceedings thereon, as may be advised or directed. 20. Every day, except Sundays and Holidays, shall be a juridi- cal day for the return of said Writs, and for judicial and Court proceedings. 21. The Sheriff to whom the Writ of Attachment shall be directed, shall not be required to make any detailed Inventory or proces-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 96 RULES AND ORDERS. person who shall be placed in possession 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 tlie same, which shall be called " The Inventory of the Estate of ," and wliich shall be iiled by the said Assignee or person in possession, on the return day of the said Writ, as required by tlie said Act ; and the said Inventory shall be open for examination or extract at all times during oitice hours, srcUis. 22. Immediately upon the execution of the voluntary deed or instrument of assignment to the Assignee, he shall give notice thereof by advertisement in the form I) of the said Act, re(piiring, by such notice, all Creditors of the Insolvent to produce ])efore him, within two months from the date thereof, their claims, spe- cifying 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 matters pending, or ready and fixed for proceeding on each day, following therein the order of procedure prescril)ed by the -ith Rule, which list shall be communicated to the Judge on the pre- vious day. 24. The record of proceedings in each case shall at all times during office hours, be accessible, at the Clerk's 0{Iice,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, together with the claims made and the documents in possession of the Assignee, shall also be accessible to C^reditors and others in interest in the case, at convenient hours, daily, to be appointed by the said Assignee. 25. 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 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. 26. The Assignee shall, on the third juridical day of each month, after he shall liave commenced to deposit Estate moneys in a Bank or Bank Agency, as required by the said Act, file of record in the ?ase 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 with- drawn 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, TARIFF OF FEES IN INSOLVENCY. IN PROCEEDIXGS FOR COMPULSORY LIQUIDATIOX. OX BEHAJ.r OF THE PLAINTIFFS, IF NOT CONTESTED : To the Prothonotary for Writ of Atlaclimeni 1 80 l^o- ^oi\y of Writ 30 Slicriir for Warrant ' o 50 Copies of Warrant, caoli q 50 All proceedings by tlie Slicrilfor his Agent or Messenger in the seizure and return, exckis'ive of Mileage. . . 2 GO Guardian, per day , ,... 1 00 Do Making up Inventory and Statements, to be subject to taxation by the'^ Judge : To the Prothonotary on return of Writ 5 00 Crier's Fee on Return 80 To the Prothonotary for copy of order for Tiieeting 50 To tlie Prothonotary for meeting l 00 To the Prothonotary for each copy of judgment appoint- ing Official Assignee 50 Attorney's Fee for conducting proceedings to ai)point- ment of Official Assignee 30 00 IF CONTESTED, ADDITIONAL FEES : To the Prothonotary on Inscription 2 00 To the Prothonotary on every Witness examined for Plaintiff, exceeding two in number 30 And for each subsequent dejwsilion exceeding 400 words in length, for every 100 words 10 Attorney's Fee, additional 20 00 Counsel Fee at Enquete 10 00 ON BEHALF OF THE DEFENDANTS, IF NOT CONTESTED : Attorney's Fee for appearance 10 00 IF CONTESTED, ADDITIONAL FEES : To the Prothonotary on filing Petition in contestation. . 6 00 On every Witness examined for Defendant, exceeding two in number 30 7 98 K i|:: I i i i TARIFF OF FEES IN INSOLVENCY. S cts. And for cncli r^n])soqnt'nt doposition oxceeding 400 words in longtli, lor every 100 words 10 Attornoy's Fee, addit ional. . . .' 20 00 Counsel Fee at Enquete 10 00 ON VOLUNTARY ASSIGNIMENTS : To llie Prothonotury for filing and entering Deed 2 00 ON PETITIONS, OTHER THAN PETITIONS IN APPEAL, IN CONTESTATION OF PROCEEDINGS FOR COMPULSORY LIQUIDATION, OR FOR EXAMINATION OF DEBTOR ; To the Petitioner's Attorney on every Petition, not contested 5 00 If contested, without Enqu6te 10 00 If contested, with Enquete ' 15 00 To the Resj)ondent's Attorney — If contested, without Enciuete 8 00 If contested, with Enquete 12 00 To the Prothonotary — Filing Petitions 2 00 Copy of Order 50 If contested, on filing Contestation 2 00 If there be an Enquete, for every deposition 30 For all words over 400 in any deposition, per 100. . . 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 PETITIONS FOR ORDER FOR EXAMINATION OF DEBTOR OR OF OTHER PERSONS RESPECTING THE ESTATE AND EFFECTS OF THE INSOLVENT : To the Petitioner's Attorney 2 50 To the Prothonotary for order to serve 50 ON CLAIMS : To the Attorneys — For every chirographary claim, without security 1 00 For every chirographary claim, with security 2 00 For every hypothecary claim, if not contested 5 00 '1 ' TARIFF OF FEES IN IXSOLVEN'CY. 99 $ cts. 10 20 00 10 00 2 00 5 00 10 00 15 00 2 00 50 2 00 30 10 I S cis. On overy claim conlesled, withoul Enqurte — Addilional — To Claimant's Attorney 10 00 To Contestant's Aftorney 10 00 Willi Encjuetc — To Claimant's Attorney 20 00 To Contestant's Attorney 20 00 To liic Assignee — On every eliirographary claim and hyj)othccary claim, not contested \ 10 For every witness examined on the contestation of a claim , 95 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 confirma- tion of discharge, or for annulling discharge : To the Applicant's Attorney — If not contested 15 00 If contested, without Enquete 25 00 If contested, with Enquete 35 00 To the Respondent's Attorney — If contested, without Enquete 15 00 If contet.led, with Emjuete , . 25 00 To (he Prothonotary — Filing Application 2 00 Every Deposition. 30 All words over 400 in each Deposition, per 100 10 5 00 2 00 1 00 2 50 50 I MISCELLANEOUS. To the Atlorneys, Prothonotaries and Bailiffs, Fees and disbursements 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 Tar ill' in first class actions in the Superior Court. All necessary disbursements for advertisements and notices. t I f I I i^ D E X. Aese.ntee ; Account : Akkidavit PAGES, Or beiii^ about to abscond with intent, kc, renders estate oi debtor liable to coinpui.^uiy liquidation ^ 16 R'.'inainiug out of the Province with inteiit, kc, renders estate liable to conipuUory liquiclatioi! 16 Final by assiiruee. Sec Assinuee. 39 22 ALLowANCi; ; A.mdl'.nt; For wni of aiiachmLnt niay be made in L. C. by any cre- ditor tor $'200, or his < 'Icik or'Agent UiH)n being liied with Prolhonotary, writ shall issue 22 For writ of attaclmieut in L\ C. may be made by any creditor lor S-iOi), or any one for him 23 Ihat debtor's e.state has become subject to compulsory liquidation, must be maile in U. C. by two credible per- sons to the satisfaction of ilie .Jud^o 23 May be made by parly intoresteil, or by his agent 75 See VVuiT OF Atiachment. For atlachment f-hali ^ei ioith paniculars, like affidavits to hold bail. , 95 Creditors may make ahowance to Insolvent Shall be insorii.'d in the dividend sheet _ . . Shall be ^ubioct \-j (.'(-iitL'statioii on (Vi:air. aTounds Oi appeal must be ap[)hed lor whiiin live days 43 43 43 50 I Due each creditor must be inserted in preliminarv sche- dule ; 10 Of claim, if disputed at preliminary meeting, how decided, 13 Ot claim, if disputed a{ niettino- to cohsiuer Petition for suspension, to be decided bv the J udge 28 Annulling discharcjk ; Creditor may petition to annul, if insolvent does not apply for confirmation 68 Ai'otice of such ])etiiion must be given, anil how ... 6S Reasons lor, may be ihe same as those on which confirma- tion is opj,Ohed 68 Petition shall be granted, if consent or deci! be not filed. . . 68 it they be filed, shall be proceeded upon as in applications for conlirnnil lon 63 May be granted, or iliscliariie may be confmned . . 69 Appjsai, ; Permitted from awaid of assignee, upon the value of debt due up(in a condition or c"nliiiL;ency . Also from awaid upon tonte.-tation of dividend Also Irom award upon idaiiu lor damage> lor resiliating ease. 40 45 48 Pending appeal — assignee to reserve diviilend as claimed. 46 To be to the Judire, from award of assignee 49 To be by summary petition 49 Notice of, to be given 49 Permitted irom Judge, to Court of Queen's Bench in Lower Canada , 49 I olveiit co[ artner, — may exercise his remedies ;igaiust his copartners, as it a tUssoiution had taken pince May report to creditors upon uncollected (.lebts Uebi with their sanction may obtain order of the Judge for sale 01 such debts Pemlinir notice of sale, shall koepathis office, for inspection, a list of debts to be sold 15 13 11 14 31 31 31 31 3-2 32 33 33 33 33 33 31 33 33 34 34 34 34 34 34 34 35 35 35 TAuE-. ... oO . . . 50 . . . jO avs 5ti 51 51 51 51 51 9{ Si 13 U 14 31 31 31 31 32 32 33 33 33 33 33 31 33 34 34 34 34 34 34 35 35 35 INDEX PAGES. 103 Assignee — Con. Shall also give free access to document and voucners ex- planatory of thorn 35 May sell real estate of insolvent, and how 35 Must give notice to hypothecary creditors, and how 37 Sliall be subject to the summary jurisdiction of the Court or Judge ^ 37 Performance of duties of, )nay be enforced on summary pe- tition 37 Removal of, by the Judge 37 Appointment of new assignee by the Judge 37 On!er of Judge for meeting of credilurs, to appoint new af^signee .• 37 When may be removed by creditors 38 Appointment of new — by creditors 38 Alter removal, remaiiifj subject to summary jurisdiction of the Court, till he has accounted 38 Remuneration of, how determined 38 Dealli. ol, does not cause estate to pass to heirs of. 38 Alter death of, e,-tate fal l!I der conin'il of Judizw 38 IMust prepare liual account, alter deckiralion of linal ilivi- dend 38 Must keep account open for inspection 39 J\Tay thi-'ieupou apply for tlisciiary-e 39 ISlust produce IJanI; certificate of deposit of dividends and balance on hand 39 Mu-st prepaie accounts anil statements of his doings 39 Must })repare dividend .shoots, ;uk1 when 39 May be ordered to award upon the value of contingent or conditional claims 40 Must give notice of ilivideiid sheet by advertisement . — 44 Must reserve dividends lor claimants who have not tiled claims '14 IMust notify such claimants of their dividends 44 If such dividends be not claimed, shall include amount in Cnal divitiend sheet 44 If dividend i are objected to, how to proceed 45 Shall hear and examine the parties and their witnesses. .. 45 Shall lake notes of evidence 45 Shall veiify statements by books and accounts 45 Shall make an award diereon 45 Shall reserve tlividends peniling appeal. . 46 Shall make a report on the value of long leases 47 Shall award on lessor's claim for damages 48 Shall attend before Judiie on appeal 40 Shall produce before him all evidence, &c 49 Shall tile in the ollice of the Court of Appeal the record, &c. 51 May recover back effects given as secuiity or payment, in contemplation of Insolvency . - - • 66 May recover back sums paid thirty days bei''ore Insolvency, in certain cases 58 Shall give notice of deposh of deed of composition 62 If deed of composition be not objected to, shall obey its pro- visions 62 l( objected to, shall await its confirmation. . , 62 Debt due bj", not all'ected hy discharge 66 Nor computed in ascertaining proponion of creditors 66 But sucli debt may rank 66 Shall call a meeting;' for the public examination of Insolvent 70 Shall reduce exatnhuition to writing 70 Shall attend such examination 70 May require supplement.iry oath from claimant Interpretation of the words •' the Assignee.". . . 74 80 m ij''« 104 I N D E X . TAGES. Assignee— Con. Is an agent within the naeaning of Cap, 92 of Con. Stat, of Canada. .. 81 Prcivisions of the Act and Resolutions of Creditors, to be directions in writing- within the meaning of that chapter. ... 81 Appointment o), liow proved 81 Dnlics of, in matters sithioct to appeal 94 I'o give notice of dead nf assignment 96 .Shall keep ininutesof mijotings and register of proceedings, open it»r inspectir)ii ot creilifors. 96 k-iiall file eeitihed copies of proceedings and copies of news- papers 96 As.sK-.NiX'.; : Assignment Award ; Eeniovinu' or di--po-ing of estate, or any part of it, with intent, i^e,, renders it lialiie to eompnisory liquidation 17 ]\fode of prof•e(^!ing preliminary to . . . 17 Must lie nituie to assignee chosen by creditors . 17 If no assiirnee chosen, or if assignee cliosen will not act, to whom to be inndu 13 May be rnaiK) by insolvent to ollicial assignee, if no avail- al'Ie nomination ot assi^rnee be made by creditors 13 Sliall nut bo vitiated by any antecedent neiileet or irregu- larity 13 Deed of, if in U. C, shall be in duplicate 14 What shall be held to be by it conveyed and vested in assiiine-^ . 14 (ienerii! .T,ss''.;nme;it or conveyance of property, otherwise than as provided bv t!u; Act;, renders estate of debtor liable to compulsory IJijiiidalion 18 • May be made by assignee, as to the value of a debt payable upon a condilioii or odiilinu'eney which has not happened.... 40 Such awaid shall bo siitijoct to appeal 40 May be made by assignee upon contestation of dividend and costs 45 Such award shall be deposited in Court 45 Sudi award shall be linal, unless appealed from within three days 45 As to costs may be made executory, and how 46 May be made by assignee, on claim for damages for resi- iiating leas(? 48 Such award shall be subject to appeal 48 May be confirmed, modilied, or set aside, on appeal 49 May be referred back for further evidence 49 Bank ; Assignees shall deposit moneys in, weekly Assii^;nee shall provluce certificate ot deposit in, of unelaimo 1 dividends Deposits in, shall not be withdrawn by assignee, except in a certain manner Bill of Sale. See Debts. Board of Tkadk : 32 39 96 Or its council may name persons to be official assignees 30 Shall tieclare what secirrity they must give 30 Shall transmit copy of resolution a[)pointing them, to the Books of Account proper Pnithnuoiarv, or Clerk of Court Sec Ofucal Asskikkk. Must be produced at preliminary meeting if required Not keeping cash book, ground for opposing confirmation of disci iarcharge I'roni the Court Ho ul.-o costs of winding up tin; L.^tate But shall be iLixeti by tiie Judge Turilf of co-Is may be made IJills of, Huiy lu3 t;ixcd according to ordinary practice .... KuIl' as to, ill actions en scimrcUion de biens Interpretation of the words '* the Court " Court Houses and Gaols ; Power of Governor to impose tax on proceedings, in aid of fund to repair CREmTORS : Creditor ; Curator ; Damages : Day: Death : Debtor ; Debts ; Schedules of, must be pvoducod by insolvent at preliminary meeting . INlay name assignee al proliminaiy meeting In voting at preliniinaiy meeting, shall otily represent direct liabilities and indirect lia[)ilities overdue iShall decide by vote, disputes at preliminary meeting. . . . IJut he whose claim is under iliscussion shall not vote..,. Any two for an aggregate sum ot over $500, may demand assignment if trader debtor stops payment Any (^'editor may apply for an order to call the lirst meet- ing of creditors in compulsory li(|uitlati()n Advice of, to be taken iiy Judge under oath as to appoint- ment of oliicial assignee. {Sec Assignee.) See Security. Fraud with regard to. See Fraud. Supplementary oath may be required from. Shall not be collocated if they refuse or neglect to produce it. Interpretation of the word "Creditor.". Debt due by, not airected by dischar2:e Nor computed in ascertaining requiied proportion. But mav rank Measure of, for resilia! inu' lease Claimant for, shall rank a.-i ordinary creditor Debt due a'', fjr per.-onal wrongs, not alleeted by discharge Interpretation of the word " day." First and last shall not be computed as part of delay If last day, a Sui.'duy or Holiday, time eniaiged till next day. Of assignee shall not can>e estate to pass to his heirs. ... Of insofvent shall jiot alfect or impede winding up estate. . 46 50 51 51 77 ■77 77 77 77 77 77 79 80 81 10 12 12 13 13 18 25 26 74 74 80 66 66 66 48 48 66 80 94 95 38 77 Purchased of debt by, to be set olfin compensation is void. 58 To be collected by assignee May be sued for in his name Uncollected raay.be sold, and how. 34 34 35 't ■<^ I r ^ m i' « 108 rNDEX. Debts— Co/i. WluMi sold may be .suoil lor in tlio name ot ihn puivliasor. 35 Form of Hill ()! Sale. (Konn !..) 35 h'tW (A i>n\ii j>ri ma Jiicit v\\dv\>ct' oi pnrcluiso 35 No warranty i'\cept ol good iuitli of assii;iu!0, created by gale of debts 35 Dut; by insolvent, how liu.'y shall rank . .. . ■ 3!) Inilividual and partnerjihip debts, iiow they shall rank — . 43 See AsSKiNEE. Declaration ; Shall arcompany writ of altaehinont 22 Shall be similar in lonii to ordiiiary declarations 95 Deed ok Asskjnmcnt : Ifin U. C, shall be in (hiplicale. (Frrm C.) U Shall have lis! of cre^iilor.s annexed to it 14 Need not eontain iKirtieulars ol jaopcriy a.-siLrned 14 Counterparts may be exe',-uled at any limi; al the rei^uest of the a'^siiMiee . . 14 If iu U. C, duplicate to be deposited in the olfice ot tlie Court 14 h in L. C, authentic copy of, to be so depo:^itcd 14 Maybe enrcxistered, if inMilvent possesses real estate — . 15 Kdect ol sucii rcLrislratlon 15 How uulhenticaled for registration, wlien n^al estate and place of execution ofilecd, are in tlitlcrenl sections of the Pro- vince 15 Klfect of, if executed accordinir to the form prevailing at the j)iaee of execution 15 Notarial co])ies i>\, ifexectited in Lower Canada, constitute 2)rivid facie proofs oi executinn and ol contentrj of original. . . 15 Notice of, to be given by assignee. (Form J).) 96 Demand ; Deposit Of assignment, may be mavic on stoppage of payment by a trader, by any two creditors, claiuiiurr in ail more than $5U0. 18 May be oj)[)osed b}- debtor by petition 20 On what grounds proceeding upon, may be prohibited by Judge I 20 Tending petition, tiader must mA continue liis trade 21 If jietition be rejeclcd, or if debtor ncilects to assign Ids estate, he becomes subject to compulsory !i ,uidation 21 In contemplation of insolvency, when void 56 Of deed ot Composition, how made, and elfect of 62 Direct liabilities ; IMust be distinguished from indirect in preliminary schedule, 10 (S'ec Vote, Discharge ; All property and assi;ts, re;il and personal, ac([uired by in.s;dvent previous to. vested in assignee , 14 Of assigi'.ee. »SVc Assu;nee, Discharge ; Effect of, in din^] of composition , 60 Consent to by recpiired proportion of creditors, binds the re- mainder 63 Elicct of 63 Shall not cliauge position of persons secondarily liable. ... 66 Nor of partner or debtor in sdida 66 Sliall not ailect any mortgage or lien 66 Shall not apply, williout consent of creditors, to any debt, payment of which may be enforced by imprisonment 66 JVor to any debt due as damages for personal wrongs 66 Nor to any debt due as a penalty 66 Nor to any balance of account due as Assignee, Tutor, &c.. 66 PAfiES. r. 33 .. 35 .. 35 .. 35 .. 39 .. 43 22 95 U M 14 14 14 14 15 15 15 15 15 96 IS 20 20 21 21 56 62 10 14 60 63 63 66 66 66 66 66 66 66 INDEX. TAfJES, DisciiARCJE — Con. Consent to, m.iy be fileil in Court for oonfinnation 76 l-'eed nl' cv.yiii position .'UkI, iruiy :il.-;o ha so tiled 67 (SVc " CONIIHMAIION." " AN.NULMNO Dlt-CHARCE." May be ;,M;iiitLHl by Judi^'o sitter a y»!ar 69 Notiee ot iipi)'ic.ation lor, must be i^iveii, and how ....... 69 Creditor may op[)Of«e on f^ame ^'rounds as on applieation for conlirmation (1 70 Court or Jiidiro may grant it, and liow, or may refu.'^^e it. . . 70 Order ordischaiire (iii.d, uuIl'ss appiNilcd from 70 Diseli.'u -;'e, or e mtiniiiilion of, if dblaiiied tiy fraud, void. . . 70 f)r by pa\ inent of any valuable e msideration ...."■... 70 Huifi* of deceased insolvei'l may proeeed Ibr iliseliarj;e ... 77 CoAts of obtaining fiom Comt, lo be paid out ot the estate. . 77 Dispute ; At preliminary meetiiif,'', liow deeided 13 Dividends ; Unelaimed, to be e^tablitihed by Ilaidc certilieate of deposit. 39 To be doelared aft"r liu^ expiry of two luoutlis from nulii') of assignment, or of uppoiuiiiient of as^iirnoe {i9 And afterwards at intervaf^ of no! more than six months . 39 To be reseived on liie amount of debts, due upon a condi- tion or eontiuLjeney 40 '!'o be allinved upon tlie amount llxed a.s the value of such debt . 40 'i'o be prepared witli due regard to tlie rank antl privilege of eretlitor 41 Not to be paid to creditor holding seeurity, until the amount for which ho is to ranlv be established 41 Allowance to insolvent to be inserted in dividend sheet> sub- ject to contestation on ceitain grounds. 43 Notice of (Form N) shall be given 44 If div'idend sheet be not contested, dividends to be paid. ... 44 To bo reserved in certain cases to meet claims not tiled. . . 44 But amounts reserved to be included in tinal dividend, if not previously claimed 44 Notice of reservation to ba given to the apparent creditor. . 44 If dividend objected to, how contested and decided 45 To be reserved, ])ending appeal 46 Unclaimed, to be left in Bank for three years 46 Then to be paid over to Government 47 If afterwards claimed, to be paid with 3 per cent, interest. 47 Before preparation of dividend sheet, assignee may demand supplementary oath 74 Domicile ; Of unincorporated Trading Companies and Co-partnerships, at chief place of business 80 Double Banking ; Not permitted 42 Employes ; Shall have a special privilege for not more than thiee months' arrears of salary or wages 43 Endorser. See indirect liabilities. Escape ; ,. . , i • Of debtor from imprisonment, or from the limits, renders his estate liable to compulsory liquidation 18 Evidence ; How taken, upon contestation of dividend 45 To be produced before the J ud^e on Appeal. 49 Copy of Judgment confirming discharge sufhcient 69 Of appointment of assignee 81 109 if' M If 110 INDEX. PAfVES. Examination of Insolvent ; Evjisive or false swearing at, ground for opposing confir- mation of discharge 67 Meeting for public, shall he iteld, and when 70 May be had at snch meeting, on oatli 70 Sliall he reduced to writing !)y as.signee 70 How proceeded with 71 tsliall be tiled in Court , 71 May also be had on order of Judge 71 Or upon sitbpcfna in action for compulsory liquidation. ... 71 May also be had on lii;s aj)plicatiori for discharge 72 Or for conlirmation of, or for annullitig a discharge 72 Or upon petition to set aside an attachment 72 E.VECUTION ; If debtor, with intent, &c., procures his oii'ects to bo seized, levied uj.on or lalien in execution, his estate becomes subject to compulsory liquidation 17 May issue for costs awarded by assignee, upon order of Judge to that eli'ect 46 Executor ; Debt due by, not arfected by discliarge 66 Nor computed in ascertaining required proportion 66 But may rank 66 Exemptions ; Property exempted from sale un4er execution, not conveyed by assignment 14 Foreign Judgments : Provisions of Consolidated Statutes respecting, to form part of the Act ^ 76 FoR.-iis ; Appended to the Act, or their equivalents, to be used 76 May be made in Upper Canada by certain Judges 77 Fraud ; In procuring allowance to Insolvent, suflicient ground for contesting it 43 Gratuitous conveyances presumed to be in fraud of credi- tors, in certain cases 54 All contracts by which creditors are obstructed, &c. are pre- sumed to be made in fraud of creditors. 54 Contracts for consideration, when • voidable 55 What contracts are void, as being in fraud of creditors .... 55 Fraudulent preference void 56 Presumptions of fraud — in what cases 56 Purchaser of goods held guilty of, in certain cases 59 Person guilty of, liable to imprisonment 59 Debtor must be charged with, i.i suit to recover debt 59 And must be expressly adjudged to be guilty of it 59 In U. C. Plaintiff must prove it, though Defendant makes default 60 Sufficient ground for opposing confirmation of discharge. . . 67 Fraudulent Preference — See Fraud. Sufficient ground for opposing confirmation of discharge. . . 67 Gratuitous Conveyancks ; Presumed to be made with intent to defraud, in certain cases 54 Guardian— (See Sheriff. Ofiicial assignee shall make an Inventory of the efiects seized, and statement of debtor's aliairs 21 Shall file Inve»tory at return day of writ 24 Shall produce statement at meeting of creditors 24 Upon appointment of official assignee, shall deliver estate to him 28 Mode of making and title of, Inventory to be made by. . . . 95 ( i '.»' INDEX I'AGES. Ill 67 70 70 70 71 71 71 71 72 72 72 17 46 66 66 66 14 76 76 77 43 54 64 65 55 56 56 59 59 59 59 60 67 67 54 21 24 24 28 95 38 66 75 75 Hek s : Of :i.«siirnee deceased, do not take the estate Ot inso'ivei.t deceased, may continue proceedings to dis- charge 77 Htj'pothcfiue ; Not affected by discharge Claim secured by, to be filed within six days of sale To be specified in such claim If claim be not filed in lime, shall not liavo preferential collocation, unless dividend be reserved 75 Or unless leave to file be granted on special cause shewn. 75 Hypothecary Creditors ; Shall receive notice of sale of real estate 37 Imprisonment ; Debt enforceable by, not affected by discharge Of debtor, or retention of upon gaol limits for 30 day.s, renders his estate liable to compulsory liquidation 18 Of assignee for neglect in the performance of his duties ... 37 Of person adjudged guilty of fraud 59 If to be adjudged, must be by the Judge immediately after verdict .... 60 66 Indictment Insolvent : Intent Interest Property of estate, in whom to be laid in indictment 81 May make voluntary assignment 12 Must produce statements of his aflairs at preliminary meeting 10 Must swear to preliminary schedule 10 May correct it under oath 10 Must produee books of accounts, vouchers and documents, if required 10 Must rnake assignment to assignee, chosen by creditors.. 12 Or failing choice by them, to a creditor chosen by him.self from a certain class 13 Or to an ( fficial assignee ■ 13 Shall execute counterparts of deed of assignment, when required by assignee 41 May petition to stay proceedings, under demand of assign- ment 20 May petition to set aside writ of attachment 24 May petition for discharge after a year 69 May petition for confirmation of discharge 67 Must file consent or deed, on petition to annul 68 May be examined, and when and how 71 May be examined on application for confirmation, or to annul, or to set aside attachment 72 Must attend meetings of creditors, when summoned by assignee ■. 72 Shall be paid for such attendance „ 72 Contracts made with intent to defraud, are void 54 (See " Fraud." — Compulsory liquidation. Rebate of, on claims not actually exigible 40 Interpretation ; Of various terms 80 Inventory Irregularity (See Ciuardian — Official assi^ee. Sherifi' shall not make detailed inventory 95 But assignee or guardian shall do so 95 No irregularity in proceedings antecedent to appointment of assignee, shall vitiate assignment 13 1X2 INDEX. PAGES. Judge ; Interpretation of the words " the Judge " 80 Where sittings of shall be held 94 Lease ; Of property, of greater annual value than the rent, how disposed of. 47 Sale of, to be made subject to the rent 47 Conditions of .sale and fsecurily, to be settled by the Judge. 47 Conditions of lease to be binding on purchaser 47 Long leases, how put an end to .... 48 JSluill be cancelled in accordance with resolution of creilitors 48 Ke.s'ilution to be notified to creditors 48 Claim for damage by resilialioii, how adjusted 48 Assignee may make award upon • . 48 Award may be appealed from 48 What shall bo the measure of damages for resillating lease 48 Lessor shall rank for damages awarded 48 Liabilities ; To be inserted in preliminary schedule 10 How divided and distinguished ... ■ 10 "What, are extinguished by a discharge 63 Lien ; Not alTected by discharge 66 List of Cukditous ; To be sent, with notice of preliminary meeting 11 To be appended to deed of assignment, but not to counter- parts subsequently executed 14 To be deposited with deed of assignment, in the office of the Court 14 Marriage ; No judgment en separation de biens shall be rendered unless after one month's advertisement 79 Nor unless action be brought at domicile of husband . 79 Any creditor may intervene either to e.vamine debtor, or to oppose judgment 79 Marriage Contract ; Must be enregistered, or shall not affect rights of creditors 78 Meeting of Creditors ; Must be called by insolvent preliminary to assignment. — 10 May be called at his place of business, or at any other place more convenient for creditors 10 How called 10 Assignee may be named at, by creditors 12 I'irst meeting to be called by order of Judge, in proceedings for compulsory liquidation 25 For examination of insolvent 70 How called generally 72 How questions at, shall be decided 73 Powers of creditors at, how regulated 73 Minutes ; Minutes of meetings of creditors shall be kept by assignee 33 Copies of and extracts from, prima facie evidence 33 Shall be accessible to parties in interest 96 Mortgage ; Not affected by discharge 66 See Hvpotheque, Motion j One clear day's notice of, for each fifteen miles, sufficient 75 How to be intituled, written and subscribed 96 'i • INDEX 80 94 47 48 48 48 48 48 48 48 48 10 10 63 66 11 14 14 79 79 79 78 10 10 10 12 26 70 72 73 73 66 Name ; PAGES, 113 Ot each creditor must be iiiserteii in preliminary schediilo. appointment ot Kg noi^'lcct in proceedings antecedent to assignee shall vitiate assignment 01' debtor to appear for examination, or to obey order or decree for payment, renders his estate liable to compult^ory liquidation NEGOTIABLE 1'aPKR ; Of which holders are unknown, must be particularized in preliminary schedule And if so mentioned, the debt thereby created will be extinguished by discharge Notaries ; Notice NOTORIETV Effect in Upper Canada of deeds of assignment, executed m Lower Canada in Notarial form Deeds before, how registered in U. C Of petition in appeal to be given to respondent and assignee Of application lor allowance of appeal Of presenting petition, in appeal from the Judge 01 application for conlirmation of discharge Of petition for annulling discharge Of meeting of creditors, how given Of petition, motion or rule ... Rules as to notice how enforced But time may be enlarged . . . Of deed of assignment to be given by assignee Of insolvency, effect of Official Assignee ; Assignment may be made to by insolvent, if no avail- able choice of assignee be made by creditors . . Shall be guardian under writ of attachment To be appointed by Judge at first meeting of creditors in compulsory liquidation, after taking their advice under oath . . II creditors unanimous, their choice is conclusive If not, either one of those they recommend, or one of those named by the Board of Trade must be chosen Guardian must deliver to him, all the estate and effects of insolvent Is vested with the whole of the estate and efTects of the debtor up to the date of his discharge .... Authentic copy or exemplification of Act of appointment, may be registered, and shall havejsame effect as registration of deed of assignment Shall immediately give notice of his appointment May be named by Board of Trade or Council thereof Must give security for due performance of duties Copy of resolution naming, must be transmitted to Pro- thonotary or Clerk of Court Security to be taken in the name, of office of the President of the Board of Trade May be enforced in his own name, by the successor of assignee giving it See Assignee. Oath Assignee must hear parties and witnesses under oath, on contestation of dividend sheet Assignee may administer, in certain cases Insolvent may be examined under May be administered by assignee Claims must be attested under Supplementary, may be required from creditor 8 l(» I a 18 10 15 15 4 it 5(» 50 67 68 7-2 75 91 94 96 54 ■21 26 26 26 28 29 29 30 30 31 30 31 31 45 45 70 70 74 74 114 INDEX n r w it Opfosition ; OunKRs ; Fautiks ; Pahtjsek 5 rAGK5. To (leod of composition, must bo mado within pix days after last publication of nolioe . . 6'2 Must be mado in writin:^ . 62 li made, c )iiipe!s assipiioe to await confirmation. . . irZ Service of, how mado an({ established . . 75 To contestation, may be examined before assif^nee, under oath.. 45 Assignea to, may exercise remedies against co-parlners, as in case of dissohition.. . ... 34 See AssiGNKK. When Insolvent owr's a debt, both individually and as a co-partner, or as a member of two or more co-part«erships, such debt to rank on the estate by which it was contracted . . 43 Iknden of )»roof of innocence of fraud, thrown on partner, in certain cases . . 59 PAurNKiisiiirs ; All provisions respecting traders, shall apply to 80 Domicile of, at chief place of business. 80 I'ayment ; PeN.'VLTY Petition ; In goods, in contemplation of Insolvency, void 56 Within thirty days of Insolvency, void, in certain cases. . . 58 But if valuable security is given up, it must be returned. . . 58 Debt due as, not afl'ected by discharge 66 Debtor may petition to restrain creditor from proceeding upon a demand of assignment 20 See Demand of assignment. Also to quash writ of attachment 24 Such Petition to be heard and determined in a summary manner . . 24 Debtor may petition for suspension of proceedings 26 Such Petition to be submitted to a meeting of creditors.... 26 See Suspension of Proceedings. By Assignee for discharge— (Ste Assignee. Againfet Assignee — See Assignee. In appeal, notice of, must be given whhin five days from allowance 50 Appeal shall be by summary petition 49 In appeal, what it mnst contain 50 In appeal, when to be presented 51 Copy of, in appeal, may be filed and Custs obtained on it . 51 For confirmation of discharge .,-. 67 For annulling discharge 68 One clear day's notice of, for each fifteen miles, sufficient. 75 How to be intituled, written and subscribed 95 Place or Business ; Insolvent may call preliminary meeting at, or at any other place more convenient for the creditors 10 If he assigns to official assignee, such assignee must be resident within the District or County in which Insolvent has his place of business 13 Pleadings ; SuiTicient as to form, if facts be therein stated in a plain and concise manner 76 May be amended according to ordinary rules of procedure 76 Shall not be void, if susceptible of amendment under the rules and practice of the Court 76 No allegations held to be insufficiently made, unless oppo- site party be thereby misled, or taken by surprise 76 INDEX rAGES, 115 75 45 34 43 59 80 80 56 58 58 66 20 24 24 26 26 60 49 50 51 51 67 68 75 95 10 13 Plkadings— Con. How to bo intituled, written and subscribed iJ To bo subject to ordinary rules, as to names ot parties, &.c. 95 Pmcdgk ; Prkferenck ; l'llIVILK(iE ; In onntomplation of insolvency, when void . . 56 Unjust, is void Not to bo disturbed by the Act ... See Clerks, — Emi'lovks. May be contested— ^'ttJ Awauo,— Contestation. Privileged debts ; Not to be computed in ascertuining rocinirt'd proportion of creditors PiiocEEDiNGS. iS\'e Judge, Sittings. Order of business in May be conducted by parti(?s interested, or liy attorney ad litem. How to be intituled Not to be void, if susceptible of amendment under the ordinary practice of the Court Burden of, of discharge, on insolvent, till discharge is con- firmed ■ — Proportion of Creditors ; In computations for ascertaininsj the creditor to represent only the amount for which lie may rank Required tor deed of composition and discliai^io Insufliciency of, ground for opposing confirmation of dis- charge. • How to be ascertained ■ ...... Provincial Government. See Dividends. Public Officer ; Debt due by, not adiicted by discharge ... - . - - Nor computed as part of required proporlion of creditors . . . But may rank on estate Queen's Bench ; ^ Appeal to Court of, in Lower Canada - - • J'J 5G 41 66 {)\ 94 95 76 69 41 GO 67 73 66 66 66 Rank ; Ranking ; Of creditor not disturbed by the Act May be contested. See Award— Contestation. 41 39 40 40 76 What debts shall rank ■ Surety on paying debt, may rank in the place of the princi- pal, or if he has not proved, then he himself may prove . . . Shall be permitted for the amount fixed as the value of any claim, dependent upon a condition or contingency. . When collateral security is held for the chiim, shall only be allowed upon diirorenco between value of security, and amount of claim . r , • ' Shall be for amount dne upon each separate item of claim, except when security is held Shall not be allowed to take place twice on the same claim 42 Incases where the insolvent is interested in dilTe rent es- tates, shall be first upon the estate which contracted the debt. 43 And not upon the others, until their creditors are paiil in full 4-i Shall only be allowed for costs, incurred before notice of assignment or of issue of Writ Purchaser of debt due by insolvent, may rank Real Estate ; . i. • ir Held to he conveyed and vested in assignee by assignment. 1 J Deed of assignment conveying, may be registered, an' 41 42 43 58 eli'ect of registration. 8* 15 \\(\ INDEX - 1 Iji I '» I, ' PAQES. Real Estate — Con. Registration of copy, or exemplification of order appointing official assignee, tt have the same elioct as to real estate, as registration of deed of assignment 29 May be sold after same advertisement as is required for Slierilf'ssale. ... 35 Period of advertisement may bo shortei.ed, by resolution of creditors, with sanction of Judge . 35 Property may bo withdrawn by assignee, if price too small 36 May be subsequently sold under directions of creditors. 5S 31 66 66 66 66 66 66 77 12 1-2 41 73 10 75 45 72 72 72 72 22 23 23 23 23 24 96 95 95 95 95 95