A COMPOSITION DEED CASE.

Otago Daily Times, Issue 1090, 17 June 1865, Page 6

A COMPOSITION DEED CASE.

Tub Bakk or Australasia v. Bell,

Rab and Co.—This was an application heard by Mr Justice Chapman, in Chambers, under a summons granted by Mr Justice Richmond, calling on the plaintiffs to show cause why the defendant, Walter Bell, Bhould not be discharged out of custody, he having executed a deed of composition, fulfilling all the requirements of the 30th section of the Debtors and Creditors Act of 1862. Mr Prcndergast was heard for the plaintiffs, and Mr Cook for the defendant. Mr Prcndergnat took a preliminary objection. The affidavits were impropeily intituled; they ihould have been in the Insolvency Jurisdiction, and in thnt jurisdiction the case should have Leen heard. The objection was overruled, tile Judge saying that he was not prepared to s;«y that the case could not be heard in the Insolvency Jurisdiction; but it was more properly done in the present form. Theicwas a cause in Court; Bell was a prisoner in that cause; and a. motion *'in the cause" for his discbarge was certainly regular. Several objections were then urged on the merits, but only three were deemed by the Judge to be of sufficient importance to require to be answered by the counsel for the defendant: —1. That the defendant was a prisoner when he signed the deed, which, by sections 30 and 32, renders it void. —2. That lloyee, Mudie and Co.. creditors, had seized goods in executionj more than enough to satisfy their debt, and that, therefore, their account should be excluded from the computation.—3. That both joint and separate property was assigned for the benefit ot joint and separate creditors ; that there was a provision that they should share equally, which was unreasonable, inasmuch as separate creditors have a prior claim on separate property, and joint creditors on joint property, with which right the provision in the deed interferes. Mr Coot: contended that the 30th section did not apply to deeds for the benefit of all creditors, but to preferential deeds, and that, even if it did, the evidence that Bell was a prisoner was not sufficient. As to Ro}fe, Miulie and Co.'s claim, they represented other claims in schedule 1, as they were endorsers of bills set down to otherß, and if their claim were struck out, the proportion would be more ia favor of the dtbtor. As to the expression in the deeil, " without priority," it meant without priority in any one class. But, in fact, he believe!, there were no separate debts. Mr Justice Chapman required further affidavits as to the time and place of arrest, and as to Itoyse, Mudie and Co.'s claim. These hiving been furnished, Mr Just'c* Chapiivin, on Tuesday last, gave judgment as follows:— " This is an application for the discharge of the defendant, Walter Bell, who has been taken in execution, at the suit of the plaintiffs, and who now claims to be discharged, on the'ground that he has executed a deed of assignment, complying with all the conditions of the 23rJ Section of the Debtors and Creditors Act of 1862. Several objections have been urged against his application ; of these, three only appeared to me of sufficient weight to call upon the defendant's counsel to auswer them, and to demand careful examination on tny part. As to two of these—namely: 1. That the defendant was a prisoner at the time that he executed the deed, and 2. That there was some doubt whether Messrs Royse, Mudie and Co., were entitled to si^n at all, or if so, whether they had signed for the right amount, I required further evidence. " That has since been furnished ; and aided thereby, I have been enabled to examine the deed and schedules, and to arrive at what I believe to be a correct conclusion.

" And first, I think the evidence is not sufficient to show that the defendant was in fact a prisoner when he executed the deed. He was arrested

on the same day; but Mr Cook »wears that the deed was executed in the afternoon, in Mr Bell's own house. Now, if the arre.-t had been under a ca. re. that fnct would not have afforded a piesump'ion against his being in custody at the time, because the Sheriff's officer, in Mich a cane, gives to an arrested debtor time to fled ball : but being arrested under a ca. *«., it would be the duty of the officer to convey him at once to gaol. To meet thin, Mr'Maddock swears that Hughes, the officer, told him that Bell was arrested (ar!y in the day. This is not strong enough, because the omis of proving any contravention of the statute rests on the party impeaching the deed, i.e., after the debtor has established his compliance with the six conditions attached to the 23rd sect ion, which he ha 3 doae, with the exception, to which I shall presently refer. Both the affidavits are uncertain as to the exact time. Hughes could most likely have cleared this up, and at all events an affidavit from him would have been more satisfactory than mere hearsay of what he said, because .if Bell was in Hughes's custody, Hughes must have bqen present when the deed was executed.

" As the fact of Bell being a prisoner at the time is not made out tn my satisfaction, I am not called upon to pronounce any opinion as to the effect of the 30th Section. It will be obvious, however, that I have examined the question on the hypothesi* that the said section does apply to such deeds; and such is indeed the inclination of my mind.

"As to Royse, Mudie and Co.'sclaim, I think their aliidavit clears up the ambiguity to vshich I referred on a former occasion. I can identify the several sums mentioned in thtir affidavit with debts set out in the first schedule of the deed, under other names, and I find that none have signed the memorandum of consent whose bills are included in Royse, Mudie and Co *s claim. The total amount of debts in the first schedule is L' 25,2-55 6s 7d, and the number of creditors is 47. Thus, if Royse, Mudie and Co are to be admitted on both sides of the account, the number to sign will be 24, and the amount opposite to their names should be L 18,941 103. Now, I find that (rejecting three signing creditors under L1O) the number who have signed is 25, and their debts amount t0L19,597 17s 7d. " But I think that Royse, Mudie. and Co's claim ought not to appear, and their debt should not count, because they have obtained judgment, sued out execution, and levied, and this primajfacic is satisfaction : in other words, it. is no longer a debt or claim on"the estate.

"Now, deducting their claim, as stated in their affidavit, L.8185 69 4d, the remaining

debts of Bell,. Rae and Co amount to L 17.040 0s 3d, and the amount of the claims of assenting creditors should be L 12,802 10s 3d. But Boyse, Mudie and Co have signed for L 8146 Is Id (by mistake, instead'of LBIBS 6s 4d), and deducting the amount for which they have signed from the total of L 19.897 17s 7d, the remainder is only Ll 1,451 16s 6d, which is £.1350 13s 9d short of the amount necessary to discharge the defendant. I am therefore compelled to refuse this application, on the sole ground that the amount of the claims of the signers falls short of the amount required by the statute. " As to the other objection, founded on the words of the deed, that all the creditors, joint, as well as separate, shall rank in the estate 'without priority, 1 I do not think they can be interpreted as interfering with the just distribution of the estate according to law; and, therefore,that there ia nothing ' unreasonable' in the provision." Summons dismissed.

W«.tb :—The 3O;h tfurtion _ inJs el npor, (oniituug wOi'l*nuiin gas ton) is a-i follows: . . . . No side, mortf^f^.Ufc.'ivirj.o: dispon tion whatsoever. »f any rca! or i.eis>na' «t«.t*' ot prisoners in cu.'to'y, trmll b<- ot »i>y foi'cs oreff-ct whnttev..r. unless (be game shall te ibmlk witti the consent r>f the C-nrt. . . . ami no such I*oll--aent fchall ba given unless it nhali appear to the Court . . ■ that the i-anc U made bonajlda, a d io not meant to defeat the prisoutr'- jutt ere \ tars, or to give undue preference, or vfitU any othsr fraudulent intent whatever.