Sir JOHN CROSS.-The only question is, in this case, whether, in the exercise of a sound discretion by the Court, the certificate, under all the circumstances, ought not to be stayed. A great deal of discussion has taken place on the point, whether the assignees should not have been served with this petition. It appears, however, that in one of the cases which have been cited, the assignees were not served with the petition; and there were no objections taken on this ground. But this, after all, seems to be a mere technical objection; and whether served or not, they come here voluntarily to make affidavits, and are consequently before the Court as deponents, if not as respondents. Then the question comes to this-are we bound to allow this certificate? What are the facts? The fiat issued against the bankrupt in February, in this year. If the petitioner's statement is true, his debt will amount to more than the debts of the creditors who have signed the certificate. Not a farthing of dividend has been paid. The petitioner alleges, that he has made frequent applications to the bankrupt for a settlement of the accounts, without effect; and that he has also applied for the partnership books, without effect. If the assignees decline giving them up to the petitioner, why did they not say, that he might inspect them? But, instead of rendering any account, or permitting the inspection of the books, they take proceedings against the petitioner in a hostile way, and claim to be large creditors. Was it not then quite useless for the petitioner to attempt to make any proof under the fiat? The assignees seem to be making common cause with the bankrupt, and have with unusual promptness signed the bankrupt's certificate. I observe, that all the creditors but two, whose names appear to the certificate, signed 1838. Ex parte MAY. 1838. Ex parte MAY. it in May last. These were not quite enough in number and value; and therefore Mr. Husband, the solicitor of the bankrupt, waits till October to get two other creditors, whose debts are of small amount, to add their signatures as make-weights to carry the certificate; and then the assignees procure the Commissioners to expunge a proof on a bill for 12007., which the petitioner had paid as drawer; but they omit to expunge any portion of Mr. Hawtayne's debt, the half of which had also been paid by the petitioner. It is perfectly clear, therefore, that Hawtayne, who is one of the assignees, must have been fully aware that his own proof ought to have been reduced; and yet he signs the certificate for the full amount of the debt which he originally proved. This shows the spirit, in which the assignees have tried to aid the bankrupt, and defeat the petitioner. It seems to me, therefore, that we ought to pause in this stage of the proceeding, and have an examination of the accounts, before we allow this certificate. The assignees do not say, that they have taken an account, but that the bankrupt has taken an account. If so, where is it? No evidence of such account has been adduced. I think we should be hasty and precipitate to allow the certificate, before any inquiry into the state of the partnership accounts. The petitioner swears, that a balance of 20001. and upwards is due to him. But, however that may be, it is admitted that the petitioner has paid a debt of 12004, for which he was security, which debt had been proved by a creditor, who had refused to sign the certificate; and which debt the assignees procured to be expunged, when the petitioner ought to have stood in the place of that creditor. Looking at all these circumstances, and considering, too, that there has been no dividend yet declared of the bankrupt's estate, I think we ought not yet to allow the certificate. There is another circumstance, also, which is material to be considered; it does not appear from the certificate but that it was signed before the bankrupt passed his last examination. If so, that is, of itself, a sufficient ground for pausing before we allow the certificate. Sir GEORGE ROSE.-There is no plainer rule than this in proceedings in bankruptcy, that nothing is to be taken against the bankrupt, on a petition to stay the certificate, except upon express statements contained in the petition; and, as far as my experience goes, the Court has always been strict in enforcing that rule. The bankrupt is not obliged to come as an applicant to this Court, in order to obtain his certificate,-he obtains it of course, if it is signed by the Commissioners and the proper number of creditors; and any application to the Court on the subject is left to others, who resist the certificate. It is, in my opinion, a good rule, that the bankrupt should on such an occasion meet with indulgence. According to the former practice in bankruptcy, upon a petition to prove a debt and stay the certificate, if the assignees were not served, the petition would have been dismissed; or, if the bankrupt had come and stated that fact, he would have been entitled to have his certificate allowed. Then, with respect to the allegation of fraud,-where a party comes in the colourable or doubtful character of a creditor, and imputes fraud to the assignees, or the bankrupt, the Court ought to examine the case strictly. Now, let us see what that fraud is. The petitioner alleges, that, on the 11th September last, the assignees convened a private meeting of the Commissioners, of which the 1838. Ex parte MAY. 1838. Ex parte MAY. petitioner had no knowledge whatever, for the purpose of expunging the proof of debt made by Messrs. Harris & Co., who had refused to concur with the other creditors in signing the bankrupt's certificate; and immediately afterwards held another private meeting, and signed the certificate. Now, nothing whatever appears in this allegation, that the bankrupt was a party to the imputed fraud. But, even supposing the bankrupt was present at this meeting, and was a party to the expunging of this debt, have not the assignees a right, I would ask, to expunge a proof, when the debt is paid in full? But taking it, for a moment, that there was some suspicion of fraud in the transaction, what ought this Court to do, in that way of putting it? Why, to give the bankrupt his certificate-for if it has been accomplished by fraud, the certificate is bad at law, and is not worth one farthing. This has been the constant habit of the Court, unless the fraud was as clear as day-light. Suppose I am the drawer of a bill of exchange, which is proved by the holder under a fiat against the other party to the bill, and which I afterwards pay as surety-there is no doubt but that I have a right to the benefit of the proof, and to stand in the place of the original creditor. It may be a question, however, whether this includes a right to stay the bankrupt's certificate; but I do not say at present how that would be. Here the petitioner states, in general terms, that on the balance of an unsettled account between him and the bankrupt, he could turn the certificate; but he should have sworn to the amount of this alleged balance, in order that the Court might see whether it would turn the certificate. Now, as the bankrupt has sworn it would not do so, that is enough to entitle him to have his certificate allowed, in the absence of all proof of the amount of the balance alleged to be due to the petitioner. Then, as to taking the partnership accounts between the bankrupt and the petitioner, the bankrupt might say, in opposition to any petition to take such account, that there was a third partner, Gilbard, who ought to be a party to any such inquiry, and who was not before the Court. There is also another objection that might be urged against any right of proof on the part of this petitioner, and that is,— there is no allegation here, that all the partnership debts have been paid. Now it would be preposterous to say, for one moment, that the petitioner could, under these circumstances, be admitted as a creditor against the bankrupt's estate. Part of his case is, too, that some of the very debts, from which he ought to have indemnified the bankrupt, he allowed to be proved against his estate. It appears, moreover, that a docket has been struck against this petitioner; and though the fiat has not yet been opened, yet that amounts to such a charge of insolvency against him, as would induce this Court to lean against any petition presented by him to stay this bankrupt's certificate. Petition dismissed, with costs. Ex parte BUTTERWORTH.-In the matter of BUTTER WORTH. THIS was a petition of the bankrupt, to annul the fiat, under the 133rd section of the 6 Geo. 4. c. 16.; which provides, that if nine-tenths in number and value of the Westminster, Νου. 9, 1838. The certificate of the Commis sioners, under the composition contract clause, need not state bankrupt's creditors, assembled at any meeting held pur- that no creditor to the amount of 50l. resided out of England. |