Waite owed the debtor andpound;101 for goods sold and delivered. He was bankrupted, having previously guaranteed the debtor’s overdraft and deposited the deeds of his property as security. Waite’s trustee paid the bank andpound;133 out of the bankrupt’s assets which had vested in him as trustee to pay off the overdraft and obtain the release of the deeds. When he claimed reimbursement, the debtor claimed to set off the andpound;101 he was owed by Waite, for which he would otherwise have had to prove in the bankruptcy.
Held: A surety under a pre-insolvency guarantee is not entitled to set-off unless he has actually paid the debt before the insolvency date.
Judges:
Lord Evershed MR, Hodson LJ
Citations:
[1956] 1 WLR 1226
Jurisdiction:
England and Wales
Citing:
Appeal from – In re A Debtor (No 66 of 1955), Ex parte The Debtor v Trustee of Waite (A Bankrupt) ChD 1956
Waite owed money and guaranteed a debt before being made bankrupt. Waite and his trustee were not for this purpose the same person. Waite had held his assets for his own benefit. The trustee paid the debt.
Held: The trustee held the assets . .
Distinguishd – In re Moseley-Green Coal and Coke Co Ltd, Ex parte Barrett 1865
Mr Barrett owed the company money on his partly-paid shares for which calls were made after it went into insolvent liquidation. He had also guaranteed the company’s liability for the purchase price of a coal mine, for which the vendor held security . .
Cited by:
Appealed to – In re A Debtor (No 66 of 1955), Ex parte The Debtor v Trustee of Waite (A Bankrupt) ChD 1956
Waite owed money and guaranteed a debt before being made bankrupt. Waite and his trustee were not for this purpose the same person. Waite had held his assets for his own benefit. The trustee paid the debt.
Held: The trustee held the assets . .
Incorrect – Secretary of State for Trade and Industry v Frid HL 13-May-2004
The company went into insolvent liquidation. The secretary of state was to make payments to employees and there were other state preferential creditors. At the same time a refund of VAT was due from the Commissioners of customs and Excise.
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 05 August 2022; Ref: scu.196871