the said G. C. Pattinson assenting hereto, being fully satisfied that his estate will not realise more than 5s. in the pound, hereby agree to accept the sum of 58. in the pound in discharge of their respective debts, to be paid within twelve months from the date hereof. And the said G. C. Pattinson doth hereby expressly declare that the whole of the debts owing by him, and upon which the said composition will be payable, do not exceed 2,1007. In witness whereof the said parties to these presents have hereunto set their hands and seals the day and year first above written." That the said deed has become and is as valid, effectual, and binding on all the creditors of the defendant, including the plaintiff, as if they were parties to and had actually executed the same; and that all the conditions mentioned in the Bankruptcy Act, 1861, in that behalf have been observed, and that a majority in number, representing three-fourths in value of the creditors of the defendant, whose debts respectively amounted to 107. and upwards, have in writing approved of and assented to the said deed; and that the said trustee appointed by the said deed duly executed the same. [The plea then went on to aver that all the requirements of the Act had been complied with, and that possession of all the property was given to the trustee, and concluded thus:] and the plaintiffs before, and when the said deed was made, were the creditors of the defendant in respect of the cause of action in the declaration mentioned, and have had due notice of the said deed, and been requested to execute the same, and might and could have executed the same had they been so minded, and still may execute the same. And that the said deed is now in full force and effect, and that all things on the defendant's part have been done and happened to render the deed as binding on the plaintiffs as if they had actually executed the same, and to release the defendant from the plaintiff's action by force of the said deed, and of the statute in such case made; and the defendant has been and is by means of the premises released and discharged from this action. Demurrer and joinder in demurrer. There was also a replication which the defendant demurred to, but that demurrer was not argued. proceedings in reference to these deeds must not be in the Court of Bankruptcy, and that advantage cannot be taken of them by pleading. This deed contains no release; therefore it can only be pleaded as a release by virtue of the Act; but the Act gives it no such force. Assume that all the requisites have been complied with, then section 197 points out what shall be the effect of the deed. The parties "shall respectively have the benefit of, and be liable to, all the provisions of this Act, in like manner as if the debtor had been adjudged a bankrupt." But, to make the plea good, the defendant must interpolate in section 197 the words, "and as if the debtor had obtained a certificate." Section 198 only protects the debtor from execution. [MARTIN, B.-You say it does not prevent a party from getting a judgment, and that it only affects the execution ?] Yes. His proper course is to apply to the Court of Bankruptcy. He also referred to Taylor v. Edwards, 4 C. B. (N. s.) 1. Morgan Lloyd, in support of the plea. The assignment is for the benefit of all creditors, and the deed is binding on the plaintiffs as if they had been parties. Being binding on the plaintiffs, what is the effect of it? It operates as a release by virtue of the statute. What could be the object of the deed if not to release the debt? The debtor would get no benefit after giving up all his property, and the Act would have no operation. [MARTIN, B.-Yes; the Act has an operation. Section 197 obliges the trustees to put the Court of Bankruptcy in motion.] In cases where such a deed was held not to be a bar, there was generally some defect in it on which the decision turned. But, independently of being a release, it might be a satisfaction of a debt, Lewis v. Jones, 4 B. & C. 506; Flockton v. Hall, 14 Q. B. 380; 19 L. J. Q. B. 1. There is also another ground. It is an agreement between all the creditors, and it would be a fraud on them if the plaintiffs were allowed to proceed with their action. [MARTIN, B.-I think the view suggested by Sir Sir George Honyman (A. S. Hill with him), in sup- George Honyman is correct, and that, so far from port of the demurrer. having an injurious, it would have a beneficial ten The plea is bad. The covenant to accept 5s. in the dency. We have all intimated an opinion that the pound is binding only on those who assented, Legge v. Cheesborough, 5 C. B. (N. s.) 741. Admitting that the deed is valid under section 192 of the Bankruptcy Act, 1861 (24 & 25 Vict. c. 134), it has no operation at all on the right of action. [CHANNELL, B., mentioned Dell v. King (12 W. R. 280; 3 N. R. 436.] The view thrown out by Martin, B., at the end of the judgment in deed is a perfectly good deed, and the only question is, as to its operation.] Having recourse to the Court of Bankruptcy is equivalent to proving a debt. Section 197 makes it the same as having proved. [Sir George Honyman.-In Harley v. Greenwood, 6 B. & Ald. 95, such a plea was held bad.] In an ordinary bankruptcy an order of discharge is pleadable by virtue of the statute; but here there would be no release; it is, therefore, a strong arguHe there suggests, whether the ment to show the intention of the Legislature that the Walter v. Adcock, 31 L. J. Ex. 380, is the correct one. deed should be an answer. There would otherwise be of the Statute of Limitations. If our judgment were a glaring defect in the Act. He also referred to for the defendant, the operation of it would be that Er parte Morgan, 1 N. R. 339; 32 L. J. Bkcy. 15; the debt would be gone, and the creditor would have Ex parte Godden, 32 L. J. Bkey. 37. no locus standi in Bankruptcy. The real answer to the plea is this, that the Legislature has not said that I Sir G. Honyman, in reply, was stopped by the the deed shall be a bar, and unless it has said so, the Court. case is within the principle of Harley v. Greenwood. think it is the only good deed of the kind that has With regard to the deed itself, so far from being void, come before us, and that it has all the operation that such deeds were intended to have. I think it is a good deed, but no bar to an action. POLLOCK, C.B.—I am of opinion that our judgment must be for the plaintiffs. The deed now before the Court does not contain a release, but it is pleaded as if it did. I take the question to be this, what is the operation of the deed, which we all consider to be a perfectly good deed? If the deed contained a release, and all the requisites had been gone through and had existed which are rendered necessary by the statute to make such deeds binding on non-assenting creditors, it might be pleaded in bar of the action. I apprehend that all the statute intended was, to place a person who has made an arrangement with a proportion of his creditors, in the same position as he would have been in under the old Bankrupt Law. Protection was afforded by the Court of Bankruptcy interfering, or by this Court giving effect to the certificate. I think the only remedy to the debtor given by the statute is to apply to the Court of Bankruptcy. Mr. Lloyd says that if this be so, there would be a glaring defect" in the statute. I own I think not; the remedy by statute is perfect. Mr. Lloyd thinks that the debtor is in no better position unless he gets what is equivalent to a release or a certificate of discharge. I think, however, it is sufficient if the Court of Bankruptcy can interfere to stay execution in any action, and that practically there is no occasion for a release or a certificate of discharge. Under the Insolvent Acts (and it is to be observed that the new Act is an amalgamation of the laws of Bankruptcy and Insolvency) an insolvent never got a final discharge. Although by the deed, and by the aid of the Court of Bankruptcy, an arranging debtor gets what is equivalent to a substantial discharge, by being protected from execution, yet I am of opinion that the deed is not pleadable in bar of the action. MARTIN, B.-I am of the same opinion. What the Legislature really meant was this, that the debtor should be protected from execution. If a man owes a debt, the creditor is entitled to sue for it in a Court of Law; if the debt is paid that is a bar, and a release is also a bar. According to the judgment of Bayley, J., in Harley v. Greenwood, to constitute a bar, where a man is to have his debt extinguished, it must be by virtue of some positive enactment of a statute. I find that this Act carefully avoids saying that the deed shall be a bar, but merely protects a person against execution. What right have we to say that the statute made it a bar and extinguishment of the debt? If it were so, the inconveniences would result that are pointed out by Bailey, J., with regard to a thing in ficri, where the debt might be lost by reason CHANNELL, B.-I am of the same opinion. The question before us is, whether this deed is a statutable release. I agree with my Brother Martin that the deed is operative, but that does not make it a pleadable in bar. The Act assimilates proceedings under such deeds to proceedings in Bankruptcy; but it is no answer to an action that a debt has been proved, although the bringing of an action might warrant an application to the Court of Bankruptcy to strike out the proof. After the certificate of registration is obtained, the deed is available for all purposes as a protection in bankruptcy, and for staying execution in an action. It would have not only an operation, but a most beneficial operation. The object of a creditor in bringing an action is to obtain judgment, and the fruits of that judgment by execution. But if the deed is valid, he knows that the Act will operate to stay execution. It is said that doubt may arise whether any deed under the Act could be so framed as to be pleadable in bar. I do not wish to give any opinion as to that. PIGOTT, B.-I agree with the rest of the Court. I own I have felt some difficulty from the form given in Schedule D of the Act. But, in the result, I come to the conclusion that the deed is not pleadable in bar. Harley v. Greenwood is law, and I am bound by that decision. The Legislature has gone minutely into the matters which are requisite, and if it had intended that such a deed might be pleaded in bar, it would have said so. section 198 of the Bankruptcy Act, 1861, of the filing of tion of the premises, and in performance of the agree such a deed affords no answer to an action against bailment herein before expressed, they, the several creditors, who have undertaken to render the debtor. [BLACKBURN, J., dubitante.] This was an action against bail, commenced in the Lord Mayor's Court, London, and removed into the Court of Common Pleas. The declaration was on the recognizance of bail, and the defendant Jewell pleaded —“that after the making and coming into operation of the Bankruptcy Act, 1861, and at the time of the execution of the deed by Louis Castrique hereinafter mentioned, the said Louis Castrique (not being a bankrupt) was indebted to the plaintiff on the judgments recovered against the defendant as in the declaration mentioned, and to divers other persons, in divers large sums of money; and that, while the said Louis Castrique was so indebted, as aforesaid, and after the making and coming into operation of the said Act, to wit, on the 17th day of January, a.d. 1862, and before the commencement of this suit, and before the issuing of the capias hereinafter mentioned, a certain deed was made and entered into between the said Louis Castrique and certain persons then being and therein respectively described as his creditors, and then executed by the said Louis Castrique, which said deed was made and entered into for the benefit of all the creditors of the said Louis Castrique, and related to the debts and liabilities of the said Louis Castrique, and his release therefrom, and which said deed, together with a schedule thereunder written, and a certain attestation thereon, were in the words and figures following: parties hereto of the second part, do hereby for themselves severally, and for their several respective heirs, executors, administrators, and partner or partners, and not jointly or any one of them for any others or other of them, but each of them for himself only and for his heirs, executors, administrators, and partners, covenant with the said Louis Castrique, his executors and administrators, that if and provided the said Louis Castrique, his executors or administrators, or any person whatsoever on his or their behalf, shall at any time within one calendar month from the date and execution of these presents by the said Louis Castrique, pay or tender to each of them the several creditors, parties hereto of the second part, a composition of 2s. 6d. in the pound upon the amount of their respective debts, as set against their respective names and seals in the schedule hereto; they the said creditors, parties hereto of the second part, and their respective executors and administrators, and partner or partners, shall and will accept and take such composition as, and the same shall thenceforth operate and enure, and be taken for, a full and absolute discharge and release to and for the said Louis Castrique, his executors and administrators, of and from the said debts of the said several creditors, parties hereto of the second part, so set against their respective names and seals in the schedule hereto, and from and against all other debts whatsoever, sum or sums of money, accounts, reckonings, claims, and demands whatsoever, now due and owing by the said Louis Castrique, to the said parties hereto of the second part, or any of them. And all and "This indenture, made the 17th day of January, all manner of actions and suits, rights and remedies, A.D. 1862, between Louis Castrique, of No. 3, Philpot claims and demands whatsoever, both at law and in Lane, in the city of London, bill broker, of the first equity, which they the said creditors, parties hereto of part, and the several other persons, creditors of the the second part, or any or either of them, or their, said Louis Castrique, whose names and seals, or the or any, or either of their partner or partners, now hath names and seals of whose respective firms are hereto or have, or ever had, or which they, or any, or either subscribed and affixed, of the second part; whereas of their executors or administrators, partners, or the said Louis Castrique is indebted to the several assigns, at any time hereafter can, or may hereafter parties hereto of the second part, in the several sums have, claim, challenge, or demand, against the said of money set opposite to their respective names in the Louis Castrique, his executors or administrators, for schedule hereunder written, and being unable, owing or by means, or on account of, the debts so due to to the numerous and heavy losses which he has recently them as aforesaid, or of any other matter or thing sustained in his business, and of which the said parties whatsoever, anterior to the date hereto, nevertheless hereto of the second part are well aware, to pay his saving to the said creditors respectively, and their said debts in full, has proposed to his said creditors to respective executors, administrators, and partners, all pay them a composition of 2s. 6d. in the pound on claims and demands, cause or causes of action, upon their respective debts, in full satisfaction and discharge and against third parties (if any), liable to pay the thereof, such composition to be payable within one debts due to the said creditors respectively, as set out calendar month from the date and execution of these in the schedule hereto, or any part thereof (and also presents, by the said Louis Castrique; and the said without prejudice to any security which the said crecreditors, parties hereto of the second part, have ditors parties hereto may hold for their said debts): respectively agreed to accept the said composition in Provided always, and these presents are upon this exfull discharge of their said debts, and to release the press condition (that is to say), that the said composi said Louis Castrique therefrom in manner hereinafter tion shall be paid or tendered to the said creditors appearing. within one calendar month from the date and execu"Now this indenture witnesseth that, in considera- tion of these presents, by the said Louis Castrique, and if not so paid or tendered then the said creditors shall not, after the expiration of such calendar month, be bound to accept the same, but these presents shall thereupon become absolutely void and of no effect, and the said creditors shall thereupon be restored to their original rights, as if these presents had not been made. In witness," &c. said capias as hereinafter mentioned, and before the commencement of this suit, and within one calendar month from the date and execution of the said deed of composition by the said Louis Castrique, to wit, on the 7th day of February, in the year of our Lord 1862, the said Louis Castrique paid or tendered to each of the said creditors of the said Louis Castrique, to whom the said Louis Castrique was so indebted as aforesaid, the said composition of 2s. 6d. in the pound upon the amount of their respective debts, and before the commencement of this suit and the issuing of the said capias hereinafter mentioned, and within the time last aforesaid, to wit, on the day and year last aforesaid, tendered to the plaintiff a large sum of money, to wit, 507., being the amount of the said composition of 2s. 6d. in the pound upon the amount of his said debt, as and for the composition due to the plaintiff, in accordance with the provisions of the said deed, which the plaintiff then refused to accept. And the said defendant further says, that afterwards, and before the issuing of the said capias hereinafter mentioned, to wit, on the 13th day of February, in the year of our Lord 1862, a certificate of the filing and registration of the said deed was issued under the hand of William Henry Whitehead, the said Chief Registrar, and under the seal of the Court of Bankruptcy, which said certificate has since continued and now is in full force, and was in the words and figures following: "The Bankruptcy Act of 1861. And the said defendant says that a majority in number representing three-fourths in value of the said creditors of the said Louis Castrique, within the meaning of the said Bankruptcy Act, whose debts respectively amounted to 101. and upwards, did, after the execution thereof by the said Louis Castrique, in writing, assent to and approve of the said deed of composition, and that the execution of the said deed by the said Louis Castrique was attested by one Thomas, James Horwood, an attorney and solicitor, and that within twenty-eight days from the day of the execution of the said deed of composition by the said Louis Castrique, to wit, on the 7th day of February, in the year of our Lord 1862, the said deed of composition was produced and left (having been first duly stamped, and bearing the ordinary ad valorem stamp duty, as provided in the 195th section of the Bankruptcy Act, 1861), at the office of the Chief Registrar of Her Majesty's Court of Bankruptcy, for the purpose of being registered, and, together with the said deed of composition, there was then delivered to the Chief Registrar an affidavit by the said Louis Castrique that a majority in number representing three-fourths in value of the said creditors of the said Louis Castrique, whose debts amounted to 101. or upwards, had, in writing, approved of, and assented to, the said deed of composition, and that the whole of his debts amounted to 50967. 10s. 3d.; and that a composition thereon at the rate of 2s. 6d. in the pound amounted to the sum of 6371. 18. 3d., being the amount distributable under and comprised in the said deed of composition; and the said defendant further says, that the date, name, and description of the said Louis Castrique, together with a short statement of the nature and effect of the said deed of composition was afterwards, and within forty-eight hours after the deed had been left with the registrar as aforesaid, entered by the Chief Registrar in a book kept exclusively for the purpose of such registration, and afterwards, and within four days after the making of such entry, to wit, on the 11th day of February, A.D. 1862, a copy of the said entry was published in the "London Gazette;" and the said deed was within twenty-eight days from and after the execution thereof by the said Louis Castrique, registered in the Court of Bankruptcy; and the said deed of composition, on being so registered, had a memo-mises the said capias ad satisfaciendum was not, and is randum thereof written on the face of the said deed, stating the day and the hour of the day at which the said deed was brought into the said office for registration. And the said defendant further says, that afterwards and after the said deed so approved of and assented to as aforesaid, and before the issuing of the office of the Chief Registrar of the Court of Bankruptcy "This deed or instrument was brought into the for registration on the 7th day of February, 1862, at the hour of 3 of the clock in the afternoon on that day, and was duly registered pursuant to the provisions of the Bankruptcy Act, 1861. "J. H. S., "Clerk to the Chief Registrar." And the said defendant says, that although afterwards, to wit, on the 31st day of March, in the year of our Lord 1862, a writ of capias was issued and prosecuted out of the said Lord Mayor's Court by the plaintiff against the said Louis Castrique, upon the said judgment as according to law and the custom and practice of the said Lord Mayor's Court there ought to have been, the same was sued and prosecuted out of the said Lord Mayor's Court after the notice of filing and registration of the said deed had been given as aforesaid, and after the issuing of the said certificate and without leave of the Court of Bankruptcy: And the said defendant says, that by reason of the pre not, available to the plaintiff; and the said defendant avers that, save as aforesaid, the plaintiff has not sued or prosecuted out of the Lord Mayor's Court any capias ad satisfaciendum against the said Louis Castrique upon the said judgment. The other defendant pleaded a similar plea. To these pleas the plaintiff demurred, the grounds of demurrer being "that the deed affords no answer to the action, as the deed is not binding on creditors who are not parties to it." Joinder. The plaintiff's points were as follows :— 1st. That the deed set out in the pleas affords no answer to the action, as the deed is not binding on the creditors who are not parties to it. 2nd. Where there is no cessio bonorum on the part of a bankrupt or insolvent, the majority of a body of creditors cannot bind the minority to a composition. 3rd. That the pleas do not show that the requisite majority executed the deed; for the defendants, by their pleas, may intend a majority of the unsecured creditors. or any of such matters, shall be as valid and effectual and binding on all the creditors of such debtor as if they were parties to and had duly executed the same, provided the following conditions be observed, &c. The question as to the validity of the same deed had come before the Court of Common Pleas in the case of Ilderton v. Castrique (2 N. R. 167), where the deed was held to be bad, and in the present case the Court of Common Pleas* held that a certificate given in respect of such void deed affords no protection, and was therefore no answer to the action against bail. This was an appeal from that decision. Mellish, Q.C. (Hodgson with him), for the plaintiffs. 1st. This deed is good under the Bankruptcy Act. 2nd. If it is a good deed, it is an answer to a recog 4th. That non-executing creditors are excluded from nisance of bail. the benefit of the deed. 5th. That the deed is unreasonable in its provisions. 6th. That although the deed may be binding under the Bankrupt Law, as between the parties thereto, it cannot affect strangers. The defendants' points were : 1st. That the defendants are sued as sureties, and the deed being for the benefit of the creditors of the principal debtor, Castrique, set out in the plea, is binding on the plaintiff under the "Bankruptcy Act, 1861," section 192. 2nd. That the plea shows that the said Castrique has duly performed all the conditions required by the said deed, so as to entitle himself to the benefit thereof. 3rd. That after notice of the filing and registration of the said deed under the "Bankruptcy Act, 1861," no writ of execution could be executed against Castrique without leave of the Court of Bankruptcy; and that no leave was obtained, and that before the defendant could be fixed as bail, the plaintiff was bound to have issued an available writ of execution against the said Castrique. 4th. That the certificate and the filing and registration of such deed given to the said Castrique under the "Bankruptcy Act, 1861," section 198, was thereby available to the said Castrique for all purposes as to protection in bankruptcy, and could only be set aside by a superior tribunal. 5th. That in granting the said certificate, the said Registrar of the Court of Bankruptcy acted judicially, and the defendant could not be compelled to incur the risk of arresting and rendering the said Castrique in defiance of the protection accorded to him by the said certificate. By section 192 of the "Bankruptcy Act, 1861," (24 & 25 Vict. c. 134) it is enacted that "Every deed or instrument made or entered into between a debtor and his creditors, or any of them, or a trustee on their behalf, relating to the debts and liabilities of the debtor, and his release therefrom, or the distribution, inspection, management, and winding up of his estate, The Court of Common Pleas held the deed to be bad on the ground of the decision of Lord Justice Turner, Ex parte Rawlins, that a deed confined to parties to the deed would not be good under the Bankruptcy clauses. The true construction of the 192nd section of the Bankruptcy Act, 1861, is, that if a deed is capable of being executed by all the creditors, and is a deed between a man and his creditors, and not intended on the face of the deed that all should not, and all the creditors can, execute it if they choose; then, when it is executed, it is to be read as if it was signed and executed by all the creditors. As soon as the number appointed by the Act have executed it, and there is nothing on the face of the deed to show that all creditors shall not execute, then it is to be read as if all were parties and had executed. The Act of Parliament takes the hands and seals of the other creditors and affixes them to the deed. There is an express condition in the deed that the composition is to be tendered within one month. [CHANNELL, B.-That follows on the expression "the said creditors parties thereto."] I contend that if the deed is such a deed that all might have executed, then when the appointed number have executed, it is to be read as if all had executed. [CROMPTON, J.-When must the tender to the creditor who has not executed be made?] After he is bound, but within a month after the debtor has signed. [CROMPTON, J.-How is he to know whether he is bound to take it ?] Because it is not registered and published till threefourths of the creditors have signed, and by going to the Bankruptcy Court he would learn this. The plain and ordinary meaning of the words in section 192 of the Act must be taken. Before the Bankruptcy Act, the ordinary forms of these deeds intended to be binding between a debtor and his creditors were of three kinds, 1. Deeds of assignment to trustees for creditors. *2 N. R. 324. |