For all reasonable expenses incurred by them in the exercise of their functions as assignees, they may repay themselves out of the bankrupt's estate. Even costs incurred by them in defending the fiat, will be allowed them as between attorney and client, out of the estate (o). But the assignees who are accountants shall not be permitted to charge the estate for business done by them as such (p). Or if they carry on a suit in equity, without first obtaining the sanction of the creditors to their doing so, the bank. rupt's estate shall not be made liable for the costs (q). (See further as to costs and expenses allowed to assignees, p. 316, ante). One assignee may depute another to act for him in a particular case; but he cannot give him a general authority to do so; at least, a general authority will not enable him to execute a release by deed (r). Nor can one assignee execute a release for another, without such special authority (s), unless done in the presence of the other (t). Assignees cannot delegate their general authority, so as to bind the creditors thereby (u). Where the debtor of a bankrupt also becomes bankrupt, any one of the assignees may sue out a fiat in bankruptcy against him without the other assignees joining in the affidavit (x). So pay. ment bonâ fide to one of two assignees, is payment to both (y), unless the other assignee have expressly dissented (z). Where they have to act jointly, the determination of the majority shall bind the others (a). Their Duties.] It is the duty of the assignees to call meetings of the creditors, upon all extraordinary occasions, where the interests of the creditors are materially concerned; at least, they are to be commended for doing so, although in strictness they are obliged by statute to call a meeting only when they require the sanction of the creditors to their compounding debts, giving time or taking security for the payment of debts, submitting disputes to arbitration, or commencing suits in equity (b). 2. They must collect the debts due to the bankrupt, and take possession and make sale of all the bankrupt's property, which passes to them by their appointment, without delay. If the assig nees refuse to bring an action for the recovery of property alleged to belong to the bankrupt, this is not sufficient reason to remove them, but the creditor who insists upon the expediency of the proceeding will have liberty to bring the action in the names of the assignees, upon entering into a proper indemnity, and have free access to the proceedings, to enable him to prosecute it (c). (See as to the sale of the Property, ante, p. 256; and ii. p.101(₫) ). And (o) Ex p. Bryant, 2 Rose, 1. (y) Smith v. Jameson, 1 Esp. 214. (2) Bristow v. Eastman, 1 Esp. 172 (a) See Ex p. Tomlinson, 2 Rose, 66 (b) Ex p. Proudfoot, 1 Atk. 251: Ez p. Cater, 1 Bro. 267. (c) Ex p. Ryland, 2 Dea. & C. 392. (d) Er p. Hughes, 6 Ves. 617. the authority of the assignees in this respect is limited to the purposes of their trusts, namely, the distribution of the estate under the bankrupt laws; they have no authority to enter into an agreement for the disposal of the surplus, after payment of 10s. in the pound to the creditors (e). As to the title the assignees are obliged to make out for purchasers, see ante, p. 257. An assignee cannot bid at the sale, either on behalf of himself or others, without first obtaining the consent of the creditors, and petitioning for leave to do so (f). Assignees may be justified in declining to continue works in a mine, if they are not likely to prove immediately beneficial to the estate; or even in abandoning the bankrupt's interest therein as a damnosa hæreditas; but they cannot possess themselves of the property by purchase or otherwise; the rule of the court being uniform and inflexible against the transfer of any part of the bankrupt's estate, either to assignees or commissioners (g). 3. In country fiats they must pay the money so collected into the hands of the banker appointed by the creditors, or lay it out in the purchase of Exchequer bills, (if directed by the commissioners to do so), or pay interest for it at the rate of £20 per cent. for such time as they shall retain it in their hands, or apply it to their own use (h). (See the Order of Commissioners for Investment, ii. p. 106). 4. By stat. 6 Geo. 4, c. 16, s. 101, the assignees shall keep an account, wherein they shall enter all property of the bankrupt received by them, and all payments made by them on account of the bankrupt's estate, which account every creditor, who shall have proved, may inspect at all seasonable times; and it shall be lawful for the commissioners, at all times, by writing under their hands, to summon the assignees before them, and require them to produce all books, papers, deeds, writings, and other documents relating to the bankruptcy, in their possession; and if such assignees so summoned shall not come before the commissioners at the time appointed, (having no impediment made known to the commissioners at the time of their meeting, and allowed by them), it shall be lawful for the said commissioners, by warrant under their hands and seals, directed to such person as they shall think fit, to cause such assignees to be brought before them; and upon their refusing to produce such books, deeds, writings, papers, or documents as aforesaid, it shall be lawful for the said commissioners to commit the party so refusing to such prison as they shall think fit, there to remain without bail, until such party shall submit himself to the said commissioners. (The forms of the Warrants may readily be framed from the like forms as to witnesses, ii. p. 89). The assignees are bound to furnish a creditor who has proved (e) Ex p. Barfit, 12 Ves. 15. (f) Ante, p. 241; and see Er p. Morgan, 12 Ves. 6. (g) Er p. Badcock, Mon. & M'A.231. (h) Ante, p. 167; and see Ex p. Bray, 1 Rose, 144. with a copy of their accounts, if he offers to pay the expense of making such copy (i). But the court will not make an order upon the assignees for copies of their account without a previous application to the commissioners to compel a production under this section (*); but if, upon the application of a creditor, the commissioners refuse to compel the assignees to produce their accounts, the court upon petition will order the assignees to do so (1). 5. They should scrutinize the conduct of the bankrupt, both prior and subsequently to the act of bankruptcy, with reference to the disposition of his property; and should watch narrowly the proof of debts, in order to prevent persons proving under the fiat who have no right to do so. 6. The assignees must distribute the estate rateably among all the creditors who have proved debts under the fiat; but the distribution must be under an order of dividend, otherwise the assignees continue liable for the sums so distributed (m). (See ante, p. 300, &c.) And where an assignee, thinking the estate sufficient to pay the debts in full, paid to a creditor the full amount of his debt when a dividend of 15s. only had been declared; the creditor afterwards became assignee, and was held liable to refund to the estate the excess received by him (n). 7. The assignees must file a certificate in the bankrupt office of all unclaimed dividends, and of the surplus of the estate, after a final dividend declared, remaining in their hands. (See ante, p. 309). Their Liabilities. 1. The assignees are liable to the solicitor to the fiat, and to the messenger, for the amount of their respective bills, subsequent to the choice of assignees, whether they have assets to pay them or not; and to the petitioning creditor, for the amount of the solicitor's and messenger's bills previous to the choice of assignees, if they have assets. (Ante, p. 311, &c.) 2. If the assignees seize or retain possession of property, which does not pass to them under their appointment, the owner of it may maintain an action against them, and in some cases petition, (see p. 339, ante), in respect of it. 3. Where the bankrupt, as the agent of the assignees, is permitted to carry on the business for the benefit of the creditors, and not on his own account, the assignees are liable for goods supplied for the purposes of the business, even although the credit were given in the bankrupt's own name (o). So, if assignees employ a person in the conduct and management of the bankrupt's property, who misapplies or embezzles the money, they will be (i) Er p. Aberdeen, 2 Dea. & C. 34. (k) Er p. Granger, Mon. & M'A. 289. (0) Erp. Brocksopp, Buck, 434. (m) Erp. Lomas, 3 Dea. & C. 681. (n) Er p. Grimwood, 1 Dea. 394; 3 Mon. & A. 285, 685. (0) Kinder v. Howarth, 2 Stark. 54. liable to the estate for the money so misapplied or embezzled, unless they have the sanction of the creditors to their appointment of the agent'(p). But otherwise where the assignees employ a person, either from necessity or conformably with the common usage of mankind,—as, for instance, if they employ a broker to sell goods, and he receive the money, and immediately fails, without having paid it over; if the assignees used sufficient precaution in the choice of such person, they will not be liable for his default (q). Nor will they be held responsible for a loss sustained in the disposal of the bankrupt's effects, and not arising from their negligence or misconduct. So, where the bankrupt had assigned over his effects to trustees, who removed them to an auctioneer's for sale, in whose hands they were at the time the commission issued, and the assignees confirmed the order for sale, but the auctioneer, without the assent of the assignees, sold them at a credit, and shortly after became bankrupt, the assignees were not responsible for the loss sustained (r). 4. If an assignee become bankrupt at the time that he is indebted to the bankrupt's estate for money retained or employed by him for his own benefit, the debt may of course be proved upon his estate (s), and his certificate will only free his person, but his future effects will still remain liable for such part of it as shall not be paid out of his estate, together with interest. (6 Geo. 4, c. 16, s. 105, ante, p. 298). But his estate will not be liable to the £20 per cent. on funds retained or mis applied by him (†); and if he die, leaving real property, such a debt, prior to the 1 & 2 Will. 4, c. 56, when the assignees executed a counterpart of the assignment, has been held to be a lien upon it, the commissioners being considered specialty creditors (u); and as the assignees are in the situation of trustees, lapse of time will not bar the right of the creditors (v). But the court sitting in bankruptcy has no jurisdiction to order the personal representative of a deceased assignee to account for the personal estate of the bankrupt received by such deceased assignee (x). 5. Assignees are liable, each for his own default only, and not for the negligence or misconduct of his co-assignee (y); but if by the aid of one assignee, out of the course of his duty, the property under the fiat be placed within the single power of the other assignee, both are liable for its mis-application (2). But merely signing the purchase deeds of the bankrupt's property will not render an assignee liable, where his co-assignee receives the purchasemoney (a). 6. We have seen, (p. 167, ante), that assignees retaining sums (p) Re Litchfield, 1 Atk. 86. (q) Ex p. Belchier, Amb. 218; 1 Kenyon's Rep. 38: Er p. Lane, 1 Atk. 90: Er p. Keys, 2 Dea. & C. 633. (r) Er p. Turner, Mon. & M'A. 52. (8) See Ex p. Spong, 1 Rose, 133: Ex p. Bignold, 2 Mad. 470: Ex p. Stonehouse, Buck, 531. (t) See Er p. Goldsmith, 1 Glyn & J. 405. (u) Bristow v. Eastman, 1 Esp. 172: see Wackerbath v. Powell, Buck, 495; 2 Glyn & J. 151. (v) Baker v. Martin, 5 Sim. 390. (x) Ex p. Crowe, Mon. & M'A. 281. (y) Primrose v. Bromley, 1 Atk. 88: Re Litchfield, Id. 87: Ex p. Griffin, 2 Glyn & J. 114. (2) Ex p. Griffin, supra. (a) Ex p. Dawson, 2 Mon. & A. 94. in their hands are liable to be charged £20 per cent. upon the sum so retained, and in some instances they are liable to payment of dividends. (See p. 307, ante.) 7. Assignees are not liable for the rent of premises leased by the bankrupt, or for the non-performance of the covenants unless, they accept the lease (b). (See 6 Geo. 4, c. 16, s. 75, ante, p. 187 (c).) And they are also liable to the purchasers of the bankrupt's property for any fraudulent misrepresentation in regard to the property sold (d). 8. The court has no jurisdiction to indemnify assignees against the consequences of their own acts, although done strictly in the execution of the duties cast upon them by their office; it cannot, for instance, relieve them in any manner from their liability to the bankrupt, in respect of property disposed of under the fiat, if the fiat be annulled (e). But if one assignee pay a sum for which both were liable, he shall have contribution from the other (ƒ); and where two of three assignees became bankrupt, and the solvent assignee paid a debt due from the three to the bankrupt's estate, it was holden that he was entitled to prove a third of the debt against the estate of each of the bankrupt assignees (g). Actions by and against them. What Actions.] The assignees have the same remedies by action for the recovery of debts due to the bankrupt, and for all civil injuries with respect to property which has passed to them under the assignment and bargain and sale, that the bankrupt would have had if no fiat had been sued out against him. But if assignees are suing upon their legal right against equity, the Court of Review will grant an injunction to restrain them (); and where a creditor has a clear legal right of set-off in an action brought against him by the assignees, the court will enjoin the assignees proceeding a the action, and refer it to the commissioner to take the account and state the balance (i). An action for money had and received may be brought by assignees against any person who has received money which ought to be paid to them; as, for instance, if a trader become bankrupt by lying in prison, his assignees may maintain an action for money had and received against a person who, having notice that a fat would be issued against him, sold his goods and paid him the produce, after the arrest, and before the expiration of the period of imprisonment which constituted an act of bankruptcy, the bankruptcy being then held to relate back to the day of the arrest‹ à If a creditor after an act of bankruptcy by the debtor, by means of a foreign attachment, attach and receive a debt due to the bank (b) Bourdillon v. Dalton, Peake, 238; 2 Esp. 233. (c) Ex p. Quantock, Buck, 189. (f) Hart v. Biggs, 1 Holt, 245: Lingard v. Bromley, 1 V. & B. 114. (g) Ex p. Hunter, Buck, 352. (h) Exp. Booth, 4 Dea. & C. 21:2 Mon. & A. 93. (i) Er p. Clegg, 1 Mon. & A. S. 3 Dea. & C. 505. (k) King v. Leith, 2 T. R. 141. |