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Watson, for the defendants, stated the argument on Queen's Bench. their part as follows. As to the first point: Bradshaw did sign an admission within the meaning of stat. 5 & 6 Vict. c. 122. s. 17.: sect. 16 does not apply: and the mere omission of 4s. out of the sum of 1491. 4s. was not such a refusal to admit as constitutes an act of bankruptcy under sect. 13 if the party fails to pay or compound within the time there specified. Nor did his signing an admission of 1497. amount to an admission for part of the demand, within sect. 15. The form of such an admission, given in sched. B. No. 1 (referred to by sect. 12 of the statute), is: I confess that I am indebted &c., "in part of the said sum of pounds, that is to say in the sum of pounds." But the variance here is mere mistake; as if the party had made his admission in Court, and the clerk, in drawing it up, had left out the 4s. As to the second point: Bradshaw has, within fourteen days next after the filing of his admission, namely, on February 29th, compounded to the satisfaction of his creditors the now defendants, according to sect. 14. The six bills of exchange were not handed over on that day; but the arrangement was complete; and the delivery of the bills was postponed only because the attorney for the now defendants thought it consistent with professional etiquette to receive them from Bradshaw's attorneys and not from himself. A suspension like this, by consent of the creditor's agent, cannot make the debtor a bankrupt. In Ex parte Musgrove (a), in the Court of Review, a similar point arose: "before the fourteen days had elapsed" (as Bruce V. C. stated the case in his judgment), "and while the law allowed the trader the power of pre

(a) 3 Mont. Deac. & De Gex, 386

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complete, the petitioning creditors, through error, took a step, which, at the very least, interposed very great doubt embarrassment and difficulty in the way of the alleged bankrupt doing what the law allowed him to do, for preventing an act of bankruptcy from taking place :' and His Honour added: "Without therefore saying, whether, in point of legal strictness, an act of bankruptcy has, or has not, in fact been committed (a point on which I entertain an opinion), and without deciding what is the true construction of the 6 G. 4. c. 16. s. 8., I think, considering the principles by which the Court is guided in exercising its discretionary jurisdiction to annul fiats, that it would be its duty to annul a fiat, which might be issued by these petitioning creditors, founded upon such an act, or supposed act, of bankruptcy." If the assignees here could succeed because the fourteen days had elapsed before the arrangement with the creditors was quite complete, a creditor, having once commenced proceedings under the statute, could not prevent an act of bankruptcy from taking place even if he wrote a letter declaring expressly that he wished to go no farther. The opinion which the Vice Chancellor forbore to state in terms may easily be conjectured. [Lord Denman C. J. I should rather think it must have been against you.] The principle now contended for has been recognised in cases under stat. 1 & 2 Vict. c. 110. s. 8., where the creditor has consented to the suspension of a payment by which an act of bankruptcy would have been avoided: Ex parte Budd (a), Ex parte Gratton (b), Ex parte Brown (c).

(a) 1 Mont. Deac. & De Gex, 436. (b) 2 Mont. Deac. & De Ger, 401. E) Mont. & Chitt. 177, 222, 227.

[Lord Denman C. J. As far as we can form an opinion Queen's Bench. without hearing the other side, we are with you.]

Willes was now heard for the plaintiffs. First, the admission here (if any) was made as to a part only of the debt; and therefore Bradshaw should have proceeded as sect. 15 directs in such a case, by paying, securing or compounding for the part admitted, and deposing that he had a good defence as to the residue, and giving a bond to pay so much of it as should be recovered in an action. [Patteson J. The admission, to be such as you represent, must be of part, as part. You cannot seriously argue that an accidental omission of 4s. is to make the provision applicable which relates to an admission of part. Admitting part is intentionally separating that part from the rest.] Perhaps a fiat issued on an act of bankruptcy grounded on such a mistake as this would be annulled by the Court of Review; but that would be only on grounds of equity, which the bankrupt might allege, but a creditor could not. In Smith's Merc. Law, 519 (a), B. 4. c. 3. s. 2., acts of bankruptcy are divided into two classes; one in which the intent is material, the other in which it is not. Here the act is of the latter class. It depends on the express words of stat. 5 & 6 Vict. c. 122.: and the question is not with what animus things have been done, but whether the facts bring the case literally within the statute. And, if the trader, as in this case, has admitted part of a debt, and not done what the statute (sect. 15) directs as to the residue, the Court will not enquire whether the residue was large or small. If this be so, there was an act of bankruptcy completed by the attempt at arrangement,

(a) 4th ed, by Dowdeswell,

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Volume IX. and failure on February 21st and 23d. At all events an

act of bankruptcy was completed on March 1st, by Bradshaw not having, at any prior time, paid, secured or compounded for the admitted demand. It is answered first, that, if there was a default in this respect, Rhodes & Crucinell, by their own conduct, waived the right to take advantage of it. But, admitting that to be so, and that the Court of Review would have set aside a fiat issued at their instance, as contrary to good faith, their waiver cannot preclude other creditors from the benefit of the act of bankruptcy; and the fiat here is sied out, not by them, but by Cyrus Jay. Then, however, it is contended, secondly, that, even if the waiver by Rhodes & Crucknell is not an act which can affect the other creditors, there was, in fact, on February 29th, such a compounding as will satisfy sect. 14. But what then took place was only an arrangement for something to be done afterwards. The Judge's order was not given, nor the bills deposited, till the 2d of March, more than fourteen days after the filing of the admission. At the expiration of that time it was uncertain whether the order would be given, or the deposit made, at all. There was, at that period, if ever, a complete act of bankruptcy under sect. 14. There could not be a conditional act of bankruptcy. At the end of the fourteen days Rhodes & Crucknell were entitled to issue a fiat within two months and, even if they were debarred from it, other creditors were not. This is consistent with the Vice Chancellor's expressed opinion in Ex parte Musgrove (a) and the opinion which he forebore to express on the point, whether or not an act of bankruptcy had been committed, seems to have been in favour of the present plaintiffs. At least he did not pronounce a con

:

(a) 3 Mont. Deac. & De Gex, 386.

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trary one, though it would at once have decided the Queen's Bench, question he was then discussing. The words of sect. 14 are "if any such trader" "shall not" pay, &c., "the amount of such demand, or secure or compound for the same to the satisfaction of the creditor." "Secure" and compound" are used in distinct senses, and answer to the expressions" composition or security for such composition" in stat. 6 G. 4. c. 16. s. 133. In the present case there was neither a securing nor a compounding. Under stat. 1 & 2 Vict. c. 110. s. 8. (which enacts that, if a debtor, after certain proceedings and notice, shall not within twenty one days pay or secure or compound for the debt, or enter into a bond, to be approved of by a Commissioner of the Court of Bankruptcy, to pay such sum as shall be recovered in an action to be brought for the same, he shall be deemed to have committed an act of bankruptcy on the twenty second day after notice) it was held, in Ex parte Gooddy (a), that an act of bankruptcy was committed where the debtors had executed a bond within twenty one days, but the Commissioner's approbation had not been given till the twenty third day. In Ex parte Brown (b), which turned upon the same clause, it was held that nonpayment of the debt within twenty one days was no act of bankruptcy, because the debtors had signed an unconditional agreement to convey all their property to the creditors: it was (as said in the judgment (c))

an absolute agreement to convey all the property they had in the world, and to ask for nothing on the other hand in return but a release on condition they gave all up." Nothing less would have satisfied that clause, or can meet the clause now in question, than

(a) 1 Mont. Deac. & De Gex, 677.

(c) Mont, & Chill. 228.

(b) Mont. & Chitt. 177.