BURNS-BURNS' TRUSTEE v. BROWN.

1894, Dec. 12. LORD HALSBURY, & LINDLEY & A. L. SMITH, L.JJ.

Bankruptcy-Judgment Debt-Execution-Holding by Sheriff for 21 Days-Act of Bankruptcy Bankruptcy Act, 1883 (46 & 47 Vict. c. 52), s. 45—Bankruptcy Act, 1890 (53 & 54 Vict. c. 71), 8. 1.

A holding by the sheriff for 21 days of goods taken in execution is an act of bankruptcy under the execution, which defeats the creditor's title as against the debtor's trustee in bankruptcy.

Figg v. Moore (1) approved and followed.

APPEAL from Vaughan Williams, J.

Joseph Brown and Eleanor Stubbs, the defendants, having recovered judgment against the Thrapston Foundry Co. for a sum of 4281. 7s. 7d. and costs, proceeded to levy execution, and on 11 September, 1893, the sheriff seized certain goods and chattels of the company under a writ of fi. fa., and held them for upwards of twenty-one days, of which the defendants had notice. On 10 November the goods were sold by the sheriff.

On 2 February, 1894, one Burns-Burns was adjudicated a bankrupt, and on the 5th the plaintiff was appointed his trustee in bankruptcy.

The plaintiff alleging that at the date of the execution BurnsBurns was the sole person carrying on the business of the company on his own account, and that therefore the proceeds of sale were his property as against the defendants, an interpleader issue was directed to try the question, the sheriff being ordered to pay the proceeds into Court to abide the event.

On 7 August, 1894, VAUGHAN WILLIAMS, J., after considerable doubt, arrived at the conclusion that upon the facts of the case the business of the company was exclusively the business of BurnsBurns, and that the title of the plaintiff must prevail.

The defendants appealed.

(1) 10 R. 549; [1894] 2 Q. B. 690; 63 L. J. Q. B. 709; 71 L. T. 232.

Herbert Reed, Q.C., and Gore-Browne, for the appellant:

On the question of fact, we say that the goods seized were not Burns-Burns', or not his alone.

But there is a question of law, viz. whether a holding of the goods by the sheriff for twenty-one days is an act of bankruptcy under a creditor's own execution, so as to defeat his title to the fruits of his execution under the combined operation of section 45 of the Bankruptcy Act, 1883 (2), and section 1 of the Bankruptcy Act, 1890 (3). The Court must determine whether Figg v. Moore (1) is to be followed.

[They also referred to Ex parte Villars (4).]

Lawson Walton, Q.C., and E. Clayton, for the respondents, were not called upon to argue.

Lord HALSBURY: I am of opinion that this appeal should be dismissed: [His Lordship, after considering the facts, which it is not considered necessary to set forth for the purpose of this report, upon the question whether or not the business of the company was the business of Burns-Burns, and coming to the conclusion that it was, continued] The other point which has been raised seems to me to be too clear for argument. The Bankruptcy Act of 1883 expressly determines that, where the sheriff is in possession and the money has not been handed in to him, if during that time an act of bankruptcy

(2) Section 45 of the Bankruptcy Act, 1883, enacts:

"(i.) Where a creditor has issued execution against the goods or lands of a debtor, or has attached any debt due to him, he shall not be entitled to retain the benefit of the execution or attachment against the trustee in bankruptcy of the debtor, unless he has completed the execution or attachment before the date of the receiving order, and before notice of the presentation of any bankruptcy petition by or against the debtor, or of the commission of any available act of bankruptcy by the debtor.

(ii.) For the purposes of this Act,

an execution against goods is completed by seizure and sale; an attachment of a debt is completed by receipt of the debt; and an execution against land is completed by seizure, or, in the case of an equitable interest, by the appointment of a receiver."

(3) Section 1 of the Bankruptcy Act, 1890, provides:

66

A debtor commits an act of bankruptcy if execution against him has been levied by seizure of his goods under process in an action in any Court, or in any civil proceeding in the High Court, and the goods have been either sold or held by the sheriff for 21 days."

(4) L. R. 9 Ch. 432; 43 L. J. Bk. 76; 30 L. T. 348; 22 W. R. 603.

comes to his notice, he shall hold the property for the benefit of the creditors generally, and not for the execution creditor alone. Under the law as it stood before the Act of 1890, the point before us could not have arisen, but the Act of 1890 said that a new act of bankruptcy could be established, viz. that the goods have been in the hands of the sheriff for twenty-one days. I do not read into the Act anything which exempts an execution creditor from the operation of the Act when the act of bankruptcy arises from his own execution.

To my mind there was an act of bankruptcy and notice to the sheriff, and the result is that under the operation of the earlier and the later Acts the conditions are satisfied which render the creditor's title to the fruits of the execution invalid.

And it seems to me that Mr. Justice VAUGHAN WILLIAMS was right in his decision, and the appeal must be dismissed.

LINDLEY, L.J.: I am of the same opinion. [His Lordship, after considering the facts of the case and coming to the conclusion that Mr. Justice VAUGHAN WILLIAMS was right in holding that the business was the business of Burns-Burns, concluded:] It was said that the decision of Mr. Justice VAUGHAN WILLIAMS in Figg v. Moore (1) was erroneous, and that therefore the trustee is not entitled. But I think that case was rightly decided, and for the reasons which the learned Judge assigns, and I cannot think the Act can be construed otherwise than as he construed it.

The appeal must be dismissed.

A. L. SMITH, L.J.: I am of the same opinion, and on the question of fact I have nothing to add.

The case of Figg v. Moore (1) has been commented on, and it is said that it was wrongly decided. When you read the 45th section of the Act of 1883 (2) and section 1 of the Act of 1890 (3), it seems to me to have been rightly decided. By section 1 of the Act of 1890 (3), what has taken place in the present case was made an act of bankruptcy. It says that a debtor commits an act of bankruptcy if execution against him has been levied by seizure of his goods under process in an action in any Court, or in any civil proceeding in the High Court, and the goods have been held by the sheriff for twentyone days. That is what has taken place in the present case. Now

turn to section 45 of the Act of 1883 (2) to see what is to take place in the interest of the execution creditor under such circumstances. It says that the creditor "shall not be entitled to retain the benefit of the execution against the trustee in bankruptcy of the debtor, unless he has completed the execution before notice of the commission of any available act of bankruptcy by the debtor." It is clear in the present case that the sheriff had notice of an available act of bankruptcy being committed before the execution was completed, and that for the best of reasons-because he put in the execution himself.

I therefore think the decision arrived at by Mr. Justice VAUGHAN WILLIAMS was right, and the appeal must be dismissed.

Appeal dismissed.

Solicitors: Thomas A. Jones, for the Appellant.
Ward, Perks & McKay, for the Respondents.

A. L.

MACKINTOSH v. POGOSE.

1894, December 4, 5, 6; 1895, January 16.

STIRLING, J.

Bankruptcy-Husband and Wife-Money of Wife lent to Husband not for purposes of Trade or Business-Post-nuptial Settlement of this Money, together with other Property-Husband's Life Interest—Gift over on Bankruptcy or Alienation-Validity of Settlement-Married Women's Property Act, 1882 (45 & 46 Vict. c. 75), s. 3.

A. and B. (husband and wife) were married subsequent to the Married Women's Property Act, 1882, the wife being possessed of certain property. There was no marriage settlement. This property the wife lent to the husband, but not for the purposes of trade or business. Subsequently a post-nuptial settlement was executed of this, together with other property, on A. for life, with a gift over to B. on bankruptcy or alienation, then to B. for life, remainder to the children. A. became bankrupt.

Held (1), that the settlement was good as against the trustee in bankruptcy to the extent of the property of the wife received by the husband, and that this principle was not confined to marriage settlements. Dictum of WOOD, V.-C., in Whitmore v. Mason (1) approved.

Held (2), that the money not having been entrusted to the husband for the purposes of any trade or business, section 3 of the Married Women's Property Act, 1882, which postpones the wife's claim to that of other creditors in such cases, was not applicable. Ex parte Tidswell (2), followed. THIS was an action by the trustee in bankruptcy of Mr. Pogose, an Indian subject, against Mrs. Pogose, an English lady, and her children and the surviving trustee of the post-nuptial settlement, the validity of which was in question, to have it declared (i) that Mr. and Mrs. Pogose's post-nuptial settlement was a settlement not made in favour of the purchaser Mr. Pogose in good faith and for valuable consideration within the meaning of section 47 of the Bankruptcy Act, 1883, and consequently was invalid against the plaintiff, and (ii) that the provision in the deed for the cesser of the life interest thereby given to Mr. Pogose, determinable on his becoming bankrupt, was void as against the plaintiff as to the income of Mr. Pogose comprised in or made subject to the settlement.

Mr. and Mrs. Pogose married, in 1883, in England. There was no settlement, but under the Married Women's Property Act, 1882, (45 & 46 Vict. c. 75) the property to which Mrs. Pogose was

(1) 2 J. & H. 204; 5 L. T. 631; 10 W. R. 168.

(2) 36 L. J. Q. B. 548; 35 W. R. 669.