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§§ 12, 13. this qualification, that as regards jurisdiction, now the Bankruptcy Court has absolute power, as a Division of the High Court, to control its own officer, which the receiver is. (See notes as to jurisdiction.)

Advertisement
of receiving
order.
Bankruptcy
Act, 1869,
s. 10.

Effect of advertisement.

The Court of Equity had jurisdiction to appoint a receiver where it was necessary to prevent irreparable mischief from breach of covenant, although the property might have to be administered in bankruptcy, and though the Court of Bankruptcy could have given the same relief (m).

And see further as to official receivers and managers, Part IV. of this Act.

13. Notice of every receiving order, stating the name, address, and description of the debtor, the date of the order, the Court by which the order is made, and the date of the petition, shall be gazetted and advertised in a local paper in the prescribed manner.

These are practically the requirements of Sect. 10 and Rule 45 of the 1869 Act. But now the "receiving order" is substituted for the "order of adjudication," and its advertisement in the prescribed manner will, in general, have the same effect. But it will be observed that the concluding words of the corresponding Sect. 10 of 1869 Act, viz., "And the production of a copy of the Gazette containing such order as aforesaid shall be conclusive evidence in all legal proceedings of the debtor having been duly adjudged a bankrupt, and of the date of the adjudication," have been omitted from the section, but similar words will be found in Sect. 132 under the title of "evidence." They are there made to include a "receiving order." But it is submitted that this means merely evidence of a fact and to dispense with the necessity for any prior evidence, such as the proof of the facts justifying the Court in making the order, and to fix the time. But the Gazette will not, it is submitted, amount to particular notice to a creditor in any question involving notice so as to affect title or alter rights. Under Sect. 10 of the 1869 Act it was distinctly laid down in Ex parte French re Trim (n), that such notice of the adjudica

(m) Riches v. Owen, L. R. 3 Ch. 820; 16 W. R. 1072; but see Stone v. Thomas, L. R. 5 Ch. 219; 22 L.

T. (N. S.) 359.

(n) 52 L. J. Ch. 48.

tion was conclusive against "all the world," including in this term a debtor who, having been abroad, was adjudicated bankrupt upon an act of bankruptcy alleged to have been committed by him (a trader) in having departed from his dwelling-house with intent to defeat and delay his creditors, who on his return, but after the lapse of the time limited for appealing, succeeded in disproving the requisite amount of the petitioning creditor's debt, but was notwithstanding bound by the adjudication. This decision of Bacon, C.J., followed and approved the view taken by the majority of the Court in Revell v. Blake (o), in which Bovill, C.J., said, "By the 10th section a copy of the Gazette containing an order of the Court, shall be conclusive evidence of a debtor having been adjudged bankrupt, and of the date of the adjudication . . . If the contention of the defendant could be maintained, then a party might, after the failures of a series of appeals, and after any lapse of time, contest the question of the jurisdiction of the Court in any action in which the validity of the adjudication might be material. This seems to me precisely what the Act was intended to prevent," and Byles, J., said, "One great object of the recent Bankruptcy Act was to supersede the old expensive enquiries at nisi prius as to petitioning creditors' debts, trading and act of bankruptcy, by making the order of adjudication conclusive evidence of these essentials." With very great respect for these dicta, it is submitted, that if the disputed question had been whether an act of bankruptcy was committed at all, even under Sect. 10, the force of the reasons given in the above cases for so deciding would have been much weakened, and it might well be doubted if, in Ex parte French, the act of bankruptcy itself, i.e., "the absenting with intent," had been successfully disproved after such advertisement in the Gazette, and not, as was the fact, the "validity of the debt," whether the Chief Judge would have so decided. His lordship used the expression "this absconding debtor returns," and the inequity of his proceeding was probably the ratio decedendi.

In an unreported case under the Act of 1869, the adjudication (founded upon an alleged act of bankruptcy, viz., the absconding of the debtor) was in fact only communicated

(0) 41 L. J. Rep. C. P. 129; L. R. 7 C. P. 300; in Ex. Ch. 42; L. J. C. P. 165; L. R. 8 C. P. 533;

and sec Ex parte Hooper, 45 L. J.
Bank. 83.

§ 13.

§§ 13, 14. to him at the antipodes, whither he had gone to transact business, at a time necessarily too late to enable him to appeal, and on application to the Court on his return, and upon establishing the bona fides of his absence, the adjudication. was annulled and on appeal confirmed by the Court, and the debtor afterwards obtained large damages for improper and malicious adjudication from the petitioning creditor (p). And, it is submitted, that if from physical inability to dispute the allegations contained in a petition, and not from wanton neglect, the debtor has a "receiving order" made against him, or even an adjudication in his absence, the debtor would not be bound (and third parties with their rights and titles would not be affected) by notice by advertisement of such "order" or adjudication so as to be estopped from either establishing the fact, or having the order set aside, or the adjudication annulled. And in a recent case it has been held that although the twenty-one days for appealing had elapsed, a trader who had disappeared without sufficient reason could have the bankruptcy annulled on the ground that he did not go away to defeat and delay his creditors, and that the notice in the Gazette was only meant to establish the validity of the proceedings (9). The Act of 1869 contained no provision similar to Sect. 35 of this Act enabling the Court to annul the bankruptcy upon the ground that the debtor ought not to have been adjudged bankrupt, and this section will enable the Court to do justice in the particular matter (r).

Power to

Court to annul
receiving
order in cer-
tain cases.

14. If in any case where a receiving order has been made on a bankruptcy petition it shall appear to the Court by which such order was made, upon an application by the official receiver, or any creditor or other person in

(p) See opinion of Kelly, C.B., and Cleasby, B., per contrà Martin, B., and Bramwell, B., in Johnson v. Emmerson, L. R. 6 Ex. 329; 40 L. J. Ex. 201.

(q) Ex parte Geisel, re Stanger, 31 W. R. 264.

(r) And see s. 143, as to invalidating bankruptcy "for substantial injustice;" and see remarks of Brett, L.J., in Revell v. Blake, and Re

Davies ex parte King, 3 Ch. D. 461; Ex parte Hayward, L. R. 6 Ch. 546; 40 L. J. Bank. 49: Ex parte Lindsay re Lindsay, L. R. 19 Eq. 52; 44 L. J. Bank. 5; Ex parte Dale, 3 Ch. D. 322; 45 L. J. Bank. 129; Ex parte Ashworth, L. R. 18 Eq. 705; Ex parte Barney, 4 De G. F. & J. 503; Ex parte Thoday re Ellis, 2 Ch. D. 229.

terested, that a majority of the creditors in number and value are resident in Scotland or in Ireland, and that from the situation of the property of the debtor, or other causes, his estate and effects ought to be distributed among the creditors under the Bankrupt or Insolvent Laws of Scotland or Ireland, the said Court, after such inquiry as to it shall seem fit, may rescind the receiving order and stay all proceedings on, or dismiss the petition upon such terms, if any, as the Court may think fit.

As to jurisdiction of the Courts in bankruptcy, see notes to Sect. 2.

§ 14.

The above enactment is entirely new, and there was no such Residence of power under the Act of 1869.

It is contrary to the spirit of the bankrupt laws that any one person should seek to have the estate administered where neither the creditors nor the debtor is within the jurisdiction.

This section would seem to be clearly intended to control the provisions of Sects. 95. and 96, by which sections the district in which the petition, whether by or against the debtor, is to be presented is regulated, and the period of residence. And though the Court has acquired seisin of the estate by virtue of the receiving order, its action under this section is to be determined by the facts in each case; but to bring the section into play, there must exist both essentials: (1) The residence beyond the jurisdiction of the majority in number and value; (2) That from the situation of the property (estate) of the debtor, or other causes, his estate and effects ought to be distributed according to the laws of the country where situate. In fact, it is no longer to be the domicile of the debtor which is to regulate the administration, but the locus in quo of the estate and the residence of the majority of the persons interested.

The section recognizes the right of the majority to have such administration take place according to their own laws.

It should be observed, this is not a mere power to transfer an existing bankruptcy to the jurisdiction of some foreign Court. It seems rather to be incumbent on the Court, when so satisfied, to rescind the receiving order, which is tantamount to an annulment of the order. Although the power seems to be only exercisable after the receiving order has been made,

Scotch or Irish creditors.

§§ 14, 15. yet the alternative direction in the last words of the section, "or dismiss the petition," seems to contemplate the exercise of the power before the receiving order is made, for the petition. could not otherwise be dismissed and the receiving order remain. In either case the administration would terminate. It will then be doubtful what will be the position of the several parties, and how such rescission or dismissal will operate so as to affect acts done and rights either acquired or affected by the petition or the receiving order; but it is submitted that once the power is exercised, for all purposes under this Act, the law will cease to have any operation, and the parties left to such remedies as they have by the laws in force where the majority of creditors may reside (s).

First and

other meetings
of creditors.
Bankruptcy
Act, 1869,
ss. 14, 16.

Sect. 35 enacts that, "where, in the opinion of the Court, a debtor ought not to have been adjudged bankrupt, or where it is proved to the satisfaction of the Court that the debts of the bankrupt are paid in full, the Court may, on the application of any person interested, by order annul the adjudication"; but there is no clause here similar to paragraph 2 of that section which, upon such annulment, gives validity to all prior acts by the official receiver, &c., and vesting the property in such person as the Court may appoint. In fact, under Sect. 14, the Court will be functus officio, and without jurisdiction, immediately upon the order being made rescinding the receiving order or dismissing the petition.

How late in the proceeding the application may properly be made does not appear, although the section seems to contemplate some time before the adjudication or trustee's appointment. Probably the best time to make it would be as soon as the creditors or most of them have proved, or had an opportunity of doing so, that is to say, prior to the first meeting of creditors. The number and value will be ascertained from the statement, in the absence of proofs.

Proceedings consequent on Order.

15. (1.) As soon as may be after the making of a receiving order against a debtor a general meeting of his creditors (in this Act referred to as the first meeting of creditors) shall be held for the purpose of considering

(s) The Editor's comments are made in the absence of the rules or orders.

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