The court was asked whether a creditor might petition for bankruptcy on a liability as a broker who had failed to settle sums due on purchasing shares on the London Stock Exchange. He was declared a defaulter under the Exchange rules as to andpound;5,623. The petition was met with a plea that their claim was not for a liquidated sum due at law or in equity as required by s.6 of the 1869 Act but was a claim for unliquidated damages.
Held: The claim was for a debt in a liquidated sum. The Stock Exchange rules were incorporated into the contract and the contract itself provided the means of ascertaining the amount due.
Cotton LJ said: ‘Rule 170 in the case of a defaulter really alters the original contract, and provides a new contract as between the defaulter and his creditor, and then the amount of the liability is fixed and ascertained in accordance with that altered contract.’
(1882) 22 Ch D 132
Cited – McGuinness v Norwich and Peterborough Building Society CA 9-Nov-2011
The appellant had guaranteed his brother’s loan from the respondent, and the guarantee having been called in and unpaid, he had been made bankrupt. He now appealed saying that the guarantee debt, even though of a fixed amount could not form the . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Financial Services
Updated: 06 May 2022; Ref: scu.450452