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judges in rendering judgments, on matters affecting deeds of Composition and Discharge, under the Bankruptcy Act 1861.
In the case of Walter v. Adcock, 7 H. & N. 559, Bramwell, B, thus expressed himself: "The 192 section" (of the Bankruptcy Act of 1861) "says, 'every deed or instrument made or entered "' into between a debtor and his creditors,' that means all his "creditors, but the section proceeds, 'or any of them.' That "cannot mean any of them to the exclusion of the rest, because "it would follow that a debtor might enter into an arrangement "with some of his creditors by which the others would be bound "though they received no benefit. That would be senseless. "In my opinion 'any of them' means as trustees for the rest, "that is, not on behalf of them, but on behalf of the whole. "The section proceeds, 'relating to the debts or liabilities of the "' debtor,' that is, to all his debts, 'his release therefrom, or the "' distribution, inspection, management and winding up of his "' estate, 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.' That applies only to deeds "which comprehend all the creditors and might be consistently "executed by all. In fact it means a deed for the benefit of all
"his creditors It seems to me clear that a compo
"sition deed under the Bankruptcy Act, 1861, to be binding "upon creditors who have not executed it, must appear on the "face of it to be a deed of which any creditor may have the "benefit, and may execute without repugnancy."
In re Rawlings, Court of Appeal in Chancery, Sir G. J. Turner, Lord Justice, thus expressed himself on the subject of deeds of Composition and Discharge, then presented to him for adjudication (9 Jur. N. S.317): "I agree in the opinion expressed by "one of the learned barons of the Court of Exchequer, that in "order to bring a case within the section" (192nd of B. A. 1861)
"that the composition must be with all the creditors
"I think that the words 'debts' and 'liabilities' as used in the "section thus read must be taken to relate to all the debts and "liabilities; for not only is this, as I conceive, the ordinary "meaning of the words. but it is scarcely possible to suppose that "the Legislature could intend that all the creditors should be "bound by an arrangement which was partial and confined in "its operation to some of them only. In all these cases, there"fore, I think the question to be considered must be, does th« "deed or instrument extend to all the creditors?"
Erie C. J. in the case of Ildertonv. Castrique, 9 Jur. N. S. p. 994, in giving judgment as to the validity of a deed of Composition and Discharge, after referring to the opinions of Sir G. J. Turner, L. J., and Bramwell, B. hereinbefore given, with approval, said, "The judges, therefore, seem to be agreed as to that point, and "as this deed has not complied with the provisions of the section," (192, B. A. of 1861) "by not being for the benefit of all the "creditors, it is consequently invalid." Willes, Byles and Keating, JJ., concurred.
In the case of Glapham v. Atkinson, 4 B. & S. p. 726, where a like question as to the validity of a deed of Composition and Discharge came up for consideration, Blackburn, J., in delivering the judgment of the Court of Queen's Bench, composed of Wightman & Mellor, J.J., and himself, said: "It is, indepen"dent of authority, clearly necessary that the creditors who are "to be bound by the acts of those executing the deed should be "at least in as good a position as those who bind them. . . . "And on the whole we think that the reasous which are so fully "stated by Lord Justice Turner in Ex parte Rawlings, that we "need not repeat them, are convincing."
This judgment was confirmed in the Exchequer Chamber, 4 B. & S. 730.
In Dingwall v. Edwards, 4 B. & S. p.747, on a question affecting the validity of a deed, Blackburn, J., said: "In the recent case of "llderton v. Jewell, 16 C. B. N. S. p. 142," (cited hereafter) "in "the Exchequer Chamber, it was decided that the deed must, on "the face of it, show that it was intended to apply to all, and that "a deed not doing so was not helped by the facts extraneous to it
"showing that it was in fact so intended It is also,
"I think, settled by the decisions that in order to be within the "Act, the deed must be such as relate to all the debts and liabil"ities of the debtor, and to all his creditors, and that a deed which "excludes from its provisions any of the debts due to any of the "creditors, or, what I think comes to the same thing, does not "either expressly or by necessary inference include all of them, is "not binding on those who do not execute it ... . even "if the point were not concluded by the decision of the Court of "Exchequer Chamber, I should, as now advised, hold that the "deed must be such as, when properly construed, to show within "the four corners of the instrument itself that it is such a deed "as is within the provisions of the Act It has "been determined, and I think most properly, that though the "Bankruptcy Act of 1861 does not in terms say so, yet by neces"sary implication it is meant, that the provisions of the deed must "be such as to give the non-assenting creditors, who are bound "by it without their consent, the same advantages as are given to "those who execute or assent to the deed. The injustice of per"mitting any part of the creditors to bar the rest, and at the same "time to obtain for themselves any benefit beyond what is given to "those whom they bar, is obvious; and even if there were no "decisions upon this point, I think it could not be disputed that "the Legislature never intended to give them such a power."
Cockburn, C. J., in the same case at p. 753 says: "There is "no difficulty in the law. It is not disputed that, in order that "creditors not executing a composition deed shall be bound under "the 192nd section of the Bankruptcy Act, 1861, they must be "entitled to the same benefit under it, as is secured by it to the "creditors executing it."
Lord Westbury, at that time Lord Chancellor in Ex pte. Cockburn re Smith & Laxton, 10 Jur. N. S. p. 574, whilst rendering judgment as to the validity of a deed of Composition and Discharge, said, "But to render a deed of composition and release "binding on the minority of the creditors, who have not executed, "or assented to, or approved of it in writing, it is necessary that "the non-assenting creditors should stand under the deed, in the "same situation, and with the same advantages, as the creditors "forming the majority. The 192nd section enacts that the credi"tors who have not assented are to be bound, 'as if they were "parties to, and had duly executed, the deed.' It follows, that "the provisions of the deed must be such as will apply to all the "creditors equally, and without distinction or difference;" and at page 575: "It" (meaning the power to bind the minority) "of "course rests on the assumption that terms which so large a pro"portion of creditors, both in number and value, are willing to '• accept from an Insolvent, must be advantageous to the whole "body of creditors; and this assumption necessarily implies that "the terms agreed to are the same for all, and that those who bind "and those who are bound are in a situation of equality. Where "this is not the case, it seems to me that non-assenting creditors "are not bound, according to the true intent and meaning of the "statute;'' and at p. 576: "As I explained on a former occasion, "in my view of the statute, a deed to bind creditors who have not "executed it, must be a deed which places the parties who execute "and the parties who have not executed upon an equal footing in "point of law."
In Ilderton v. Jewell, 10 Jur. N. S. p. 748, Martin, B., in delivering the judgment of the Court of Exchequer Chamber said: "I am of opinion, and five of my brethren agree, that the judg"ment of the Court of Common Pleas, ought to be affirmed. "We have all the same views of the Act of Parliament. The "192nd section enacts that 'Every deed entered into between a "' debtor and his creditors, (that must mean all his creditors,) "' or any of them or a trustee on their behalf (which must be "taken to mean on behalf of all) 'relating to the debts and liabilities of the debtors (that is all the debts and liabilities) "' shall be valid and effectual and binding on all the creditors, "provided certain conditions are observed."
In Walker v. Nevill, 3 H. & C. p. 414, Martin, B., remarked: "The statute enables a debtor to compound with his creditors, "but makes no distinction with respect to joint and separate "creditors." And Pollock, C. B., there said: "In all the cases "in which composition deeds have been held valid where partners "were the debtors, there must have been joint and separate credl"tors and joint and separate estates."
In the same case the present Lord Justice Mellish, then but Mr. Mellish, for the defendant, said (at page 416 of the report), "Where a debtor assigns all his property for distribution amongst "all his creditors, the estate must be administered as in bank "ruptcy. But under a composition deed it is not necessary that "there should be any assets of the dtbtor to be distributed. A "third person may covenant to pay the composition, and the credi"tors may thereby obtain a larger dividend than they could realize "from the bankrupt's estate. Where there are partners there "must always be joint and separate debts."
In ex parte Glen in re Glen, 2 L. R. Ch. Ap. p. 670, a person who carried on business in partnership, executed a composition deed for the benefit of his separate creditors only, which was assented to by the requisite majority of separate creditors. The firm was also indebted; and it was held that the deed was not binding on a dissenting separate creditor, for that a deed providing for one class of creditors only is not within § 192 of the Bankruptcy Act, 1861. Lord Cairns, at that time one of the Lords Justices, afterwards Lord Chancellor, (p. 672 of the report) made use of the following expressions: "The debtor was "a partner; he had joint creditors and separate creditors. Now "§ 192 primd facie makes no difference between these classes; "it speaks generally of a deed entered into between the debtor and "his creditors, or any of them. The words 'or any of them ' have "been observed upon, but their meaning is obvious. The section "contemplates as parties to the deed either all the creditors, or "some of them as trustees for, or as representing the whole body "of creditors. But to render the deed binding there must be an "assenting majority in number, representing three-fourths in value "of the creditors whose debts amount to £10 and upwards; that "is, all the creditors need not be parties to the deed, but there "must be the requisite majority approving of it; and according to "the natural construction of the section, it must be a deed of "which the benefit will enure to all the creditors generally."
Lord Justice Holt in the same case at p. 673, said, "I am "unable to understand how there can be, under the Act, a deed "having the effect of binding some of the dissentient creditors "without binding them all. There is no authority for holding "section 192 and the following sections to give a deed such an "effect; and the consequences of such a construction, which does "not give to the words 'creditors' its natural meaning would be "very serious."
In'the case of Tomlin & al., v. Dutton & al., 3 L. R. Q. B. p. 466, it was held that a deed of composition made between the members of a partnership and the joint creditors of the firm, none of the separate creditors being parties thereto, nor any provision being made for the separate creditors of the partners reaping equal benefits with the partnership creditors, was not within § 192 of the Bankruptcy Act, 1861, and was invalid against non-assenting joint creditors. Blackburn, J., there said (p. 468 of the report): "The plea sets up a deed made between the de"fendants and the creditors of the partnership only; if that be a "deed within § 192 of the Bank-ruptcy Act, 1861, then the Act "has given a new power, and it rests upon those that rely on this "authority given by statute, and not known to the common law, "to show by what words it is conferred. § 192 makes, under "certain conditions, a deed entered into between a debtor and his "creditors or any of them, or a trustee on their behalf, as bind"ing oji all the creditors of such debtor, as if they were parties "to and had executed the deed. Now the literal sense of these