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Insolvency - From: 1900 To: 1929

This page lists 50 cases, and was prepared on 08 August 2015.

 
In re Ford, Ex parte the Trustee [1900] 2 QB 211
1900


Insolvency, Company

1 Citers


 
Re Lane-Fox [1900] QB 508
1900


Insolvency

1 Citers


 
In re EWA, A Debtor (1901) 2 KB 642
1901
CA
Collins LJ
Insolvency
The general rule is that where an obligation is joint and several, the release of one of two joint debtors has the effect of releasing the other, but: "It is clear that, although a document in terms purports to release one of two joint debtors, yet it may contain in terms a reservation of rights against the other joint debtor. Where you find those two provisions you construe the document, not as a release, but merely as an undertaking not to sue a particular individual, and the result is that the right to proceed against the co-debtor is reserved and can be put in force against him. Whenever you can find from the terms of the document an agreement for the reservation of rights against the co-debtor, then, I agree, the document cannot be construed as an accord and satisfaction of the joint debt, and, therefore, as a release of the co-debtor."
1 Citers


 
Marchant -v- Morton Down & Co [1901] 2 Ch 829
1901


Insolvency
An assignment of a debt by a liquidator need not be by deed, any signed writing will be enough.
1 Citers


 
Montefiore -v- Guedalla [1901] 1 Ch 435
1901

Buckley J
Insolvency
The bankrupt had a protected life interest in a trust fund under the will of his late father which was defeasible inter alia if he should do or omit to do or should suffer to be done any act whereby the income of the trust fund if payable to himself should become vested in some other person or persons. He committed an act of bankruptcy by failing to comply with a bankruptcy notice and was adjudicated bankrupt. Was an apportioned part of a dividend which had been received by the trustees of the will after the adjudication (but part of which had accrued in respect of the period before and part in respect of the period after the act of bankruptcy) payable to the trustee in bankruptcy or was it applicable under the gift over in the will. Held: For the trustees of the Will. The right to receive the dividend, though payable after adjudication, had vested in the official receiver by virtue of the doctrine of relation back at the date of the act of bankruptcy; and was therefore forfeited as from that date. The court rejected the argument of the official receiver that under the section 54 the property did not vest in the official receiver until adjudication, and that it was not until then that the bankrupt had suffered something to be done which caused the property to be vested in someone else. "Let us, then, consider for a moment what would have been the result if the act of bankruptcy had occurred on July 8, the dividend had been payable on October 5, and the adjudication had taken place on October 10. There would then have vested in the official receiver all the property of the bankrupt from July 8 onwards, including the dividend of October 5. By virtue of what act or omission by the debtor would the dividend of October 5 have vested in the official receiver? It appears to me that it would have been by virtue of this act or omission, namely that he failed on July 8 to comply with the bankruptcy notice. Did he then do anything whereby the dividend of October 5 became vested in some other person or persons? I answer Yes. The act which produced this result would be not the act of the Court in adjudicating him a bankrupt, but his act to which it related back. it would be because the act was before October 5 that the dividend would vest in the official receiver." Intermediate income of property disposed of by the debtor during the period of relation back belonged to the trustee in bankruptcy.
Bankruptcy Act 1883 54
1 Citers


 
Borland's Trustee -v- Steel Brothers & Co Ltd [1901] 1 Ch 279
1901

Farwell J
Company, Insolvency
Mr Borland was a shareholder. The company's articles contained pre-emption rights, such that on a shareholder's bankruptcy, he had, on receiving a transfer notice from the directors, to transfer his shares to a manager or assistant at a fair value calculated in accordance with the articles. His trustee said that the transfer articles were void because, among other reasons, they amounted to a fraud upon the bankruptcy laws, and could not prevail when bankruptcy had supervened, since the trustee was forced to part with the shares at less than their true value, and the asset was not fully available for creditors. Held: Farwell J said: "a simple stipulation that upon a man's becoming bankrupt that which was his property up to the date of the bankruptcy should go over to some one else and be taken away from his creditors, is void as being a violation of the policy of the bankrupt law". It was a commercial arrangement, and the provisions were were a fair agreement for the business of the company. They were binding equally on all shareholders. There was no suggestion of fraudulent preference, and nothing obnoxious to the bankruptcy law in a clause which provided that if a man became bankrupt he should sell his shares. The price was a fixed sum for all persons alike, and no difference in price arose in the case of bankruptcy. The purpose was that there should be in the company, if it were so desired, none but managers and workers in Burma. There was nothing repugnant in the way in which the value of the shares was to be ascertained. It would have been different if there were any provision in the articles compelling persons to sell their shares in the event of bankruptcy at something less than the price that they would have otherwise obtained, since such a provision would be repugnant to the bankruptcy law
He described the nature of a company share: "It is the interest of a person in the company, that interest being composed of rights and obligations which are defined by the Companies Act and by the memorandum and articles of association of the company." and one with limited liability in a company: "A share is the interest of the shareholder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with section 16 of the Companies Act 1862. The contract contained in the articles of association is one of the original incidents of the share. A share is . . an interest measured by a sum of money and made up of various rights contained in the contract, including the right to a sum of money of a more or less amount."
1 Citers


 
Re Miller (1901) 1 QB 51
1901
CA

Insolvency
A prospective partner in the firm paid £2,000 to a broker on terms that he should have the option of demanding its repayment if he did not become a partner by a date. The firm was hammered before that date and having given notice to determine the agreement, he then petitioned for bankruptcy in that sum. Held: The alleged debt of £2,000 was not a liquidated sum and could not therefore found a petition because the hammering of the firm was not an event which entitled notice of determination to be served under the agreement. The only remedy for the firm's inability to perform the contract was one in damages which was not a debt in a liquidated sum.
1 Citers


 
Re Joplin Brewery Co Ltd [1902] 1 Ch 79
1902
ChD
Buckley J
Insolvency, Company
The applicants, owners of a solvent family business, sought to register a charge over the company's assets out of time. Held: Buckley J saw the application under s 15 of the 1900 Act as a similar application to the application to register out of time under s 14 of the 1878 Act. Buckley J referred to the usual practice in applications under s 14 of attaching to any order extending time a proviso to protect the rights of third parties. He said: "These applications are made without serving the creditors, and the orders ought to be drawn so as to save the rights of persons who have become creditors of the company before registration is effected, just as in the case of bills of sale. I therefore direct that there be added to the order the words: "but that this order be without prejudice to the rights of parties acquired prior to the time when the debentures shall be actually registered"; and I intimate my opinion that these words ought to be added in every case, unless there is some good ground to the contrary – eg, in cases in which the order could not prejudice the rights of any creditors." and "these orders are made readily upon proper evidence of accident or inadvertence for the reasons that by the insertion of these words [the without prejudice qualification] the rights of absent parties are not affected."
Companies Act 1900 15 - Bills of Sale Act 1878
1 Citers


 
In re X Y, Ex parte Haes [1902] 1 KB 98
1902

Vaughan-Williams LJ
Insolvency
Bankruptcy proceedings are not "in any sense criminal".
1 Citers


 
Stein -v- Pope [1902] 1 KB 595 CA
1902
CA
Romer LJ, Sir Richard Henn Collins MR
Insolvency, Landlord and Tenant
A lessee assigned the lease by an assignment which constituted an act of bankruptcy. He was subsequently adjudicated bankrupt and his trustee disclaimed the lease. During the interval between the assignment of the lease and the date of the adjudication two quarters' rent had fallen due, the lessors had sued the assignee and had recovered judgment for the first quarter's rent, and had commenced proceedings for the second quarter's rent. The action did not come on for trial until after the adjudication. Was the assignee of the lease liable for the rents notwithstanding the relation back of the trustee's title? Held: He was. The bankruptcy provisions, including the relation back of the trustee's title, were not provisions for the benefit of the bankrupt. As a general rule bankruptcy did not affect the rights and liabilities of persons not parties to the bankruptcy, except so far as might be necessary in the interests of the trustee and creditors and the administration of the bankrupt's estate in bankruptcy. It was not necessary in those interests to hold that the bankruptcy had freed the assignee from his liability to the lessor. The court reserved its opinion on what would have been the outcome if bankruptcy had supervened before any action had been take by the lessor against the assignee.
1 Cites

1 Citers



 
 In re I C Johnson; CA 1-May-1902 - [1902] 2 Ch 101
 
In re Anglo-Oriental Carpet Manufacturing Company [1903] 1 Ch 914
1903
ChD
Buckley J
Company, Insolvency
Debentures creating a charge had been issued, but not registered within 21 days. On 1 November 1901, an order was made with the usual proviso ("without prejudice to the rights of parties acquired prior to the time when such trust deed and debentures shall be actually registered") extending time until 15 November 2001. The charge was registered on 15 November 2001. In the meantime, on 11 November, the company passed a resolution for voluntary winding up. Held: The proviso protected the whole general body of creditors. At the commencement of a winding up: "On November 11, 1901, by force of the Act of Parliament, the undertaking and assets of the company passed under the control of the liquidator, whose duty it was to convert them into money, and out of the proceeds to pay the creditors existing at that date. The assets have been said to be impressed in the hands of the liquidator with a statutory trust in favour of the creditors. Upon the commencement of the winding-up an immediate duty was cast upon the liquidator to collect the assets and distribute them among the creditors then existing. At that moment the debenture-holders were unsecured creditors of the company, for they did not hold any security registered as required by the Act of 1900. It has been argued on behalf of the debenture-holders that when registration was made on November 15, 1901, there arose a security which was not in existence at the date when the liquidation commenced. But whether that was so or not, the order extending the time for registration was made "without prejudice to the rights of parties acquired prior to the time when such trust deed and debentures shall be actually registered." Whatever the exact limit of those words may be, they certainly in my judgment include the rights of creditors, acquired on the passing of the winding up resolution, to have the assets realized and distributed among them pari passu."
1 Citers


 
In re London and Globe Finance Corporation Ltd [1903] 1 Ch 728
1903
ChD
Buckley J
Insolvency, Crime, Company
A company which had gone from voluntary winding up, first to winding up under supervision and then to compulsory winding up, with the official receiver as liquidator. The company's former managing director was suspected of fraud, but the law officers declined to prosecute. Some of the shareholders wished to prosecute him, mainly at the expense of the company's assets (although they offered to pay into court at least £1,250 of their own money) while others opposed the prosecution as a waste of money. Held: The court authorised the liquidator, the official receiver, to do so at the expense of the company. Buckley J said: "the general scheme of the Acts with reference to the liquidation of a company no doubt is that the assets are to be realised to the best advantage for the benefit of those who are entitled to share in their distribution. But indications are not wanting that the assets may under the Acts be applied for some purposes other than these. Section 167 of the [1862 Act] is, having regard to the reasons which I have just given, one example of this, and in the [1890 Act] the same intent may be traced in sections 7 and 8 of that Act. These are sections which require the preparation of a statement of the company's affairs at the expense of the assets leading to a preliminary report, which is to show whether further inquiry is desirable as to matters relating to the promotion and the like, and, if necessary, to a public examination of parties incriminated, with the purpose, of course, of enforcing commercial morality. It is, therefore, in my judgement plain that the principle upon which I am to apply, or refuse to apply, section 167 is not measured or limited or even concerned with pecuniary benefit to be obtained for the shareholders or creditors."
and
' To deceive is, I apprehend, to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false. To defraud is to deprive by deceit: it is by deceit to induce a man to act to his injury. More tersely it may be put, that to deceive is by falsehood to induce a state of mind ; to defraud is by deceit to induce a course of action."
Companies Act 1862 167
1 Citers


 
Pulsford -v- Devenish [1903] 2 Ch 625
1903
ChD
Farwell J
Insolvency, Professional Negligence, Company
The liquidator in a voluntary liquidation negligently failed to inform the company's creditors of the liquidation, and distributed the company's assets to its contributories without regard to the creditors' claims. The company was later dissolved. Held: The creditors had a claim against the liquidator. The availability of the statutory remedy of a creditor under section 10 and the statutory right of a creditor to apply in a voluntary liquidation under section 138 ceased to exist when the company was dissolved. "But the duty to pay the debts is an absolute statutory duty, without limit in point of time and with no provision for the release of the voluntary liquidator.
It is not necessary to resort to trusteeship or equitable doctrines: the case is one of a duty imposed by a statute on an individual for the benefit of a class of persons, namely, creditors and the only peculiarity of the case is that the remedy created by the statute is not co-extensive in point of time with the duty, for the Act permits the destruction of the remedy before the duty has been performed.
Now the principles applicable to such a duty as I have mentioned are well settled and rest on the well-founded assumption that the Legislature does not intend its enactment to be brutum fulmen: if, therefore, a statute creates such a duty but no remedy, an action at common law (in former days action on the case) will lie for breach of such duty." and "It was urged in argument that the liquidator is merely the agent of the company; but assuming this to be so, I can see nothing inconsistent in the imposition on such agent of a duty to the company's creditors."
Companies Act 1890 10 138
1 Cites

1 Citers


 
Kent and Others (Liquidators of La Banque Ville-Marie) -v- La Communautu Des Soeurs De Charitu De La Providence and Others [1903] UKPC 17; [1903] AC 220
20 Mar 1903
PC

Commonwealth, Insolvency, Litigation Practice
(Quebec) The liquidators of a bank had sued on a cause of action vested in the bank. The Canadian courts had refused leave to amend to add the bank as a plaintiff on appeal. Held: The liquidators' appeal succeeded. There was power to amend to allow an amendment to add the bank as a party and that it should have been exercised.
1 Citers

[ Bailii ]
 
Re Button [1905] 1 KB 602
1905

Vaughan Williams LJ
Insolvency
A secured petitioner's estimate of the value of his property was challenged. Held: The petitioner's estimate was made "at his own risk", in that, if at undervalue, he would still be bound by it in the bankruptcy; but that, provided the estimate was "real and not a sham", it was not the function of the court "to go into the question what is the true value after the declaration of the estimated value."
Bankruptcy Act 1883
1 Citers



 
 In re Wenborn & Co; 1905 - [1905] 1 Ch 413
 
In re West Coast Gold Fields Ltd [1905] 1 Ch 597
1905

Buckley J
Insolvency, Company
The shareholder was bankrupt, but the company, in which he owned shares on which the capital remined unpaid, was solvent and in voluntary liquidation. Held: The payment-up of the shares in full was a condition precedent to any participation in the distribution of surplus assets. Buckley J said: "The right view is that the person liable as contributory must discharge himself in that character before he can set up that, as a creditor, he is entitled to receive anything, and a fortiori, as it seems to me, before he can set up that, as a contributory, he is entitled to receive anything."
1 Citers



 
 Ponsford, Baker & Co -v- Union of London and Smith's Bank; CA 1906 - [1906] 2 Ch 444
 
In re Ehrmann Brothers Ltd [1906] 2 Ch 697
1906
CA
Vaughan Williams, Romer and Cozens-Hardy LJJ
Insolvency, Company
Debentures had been issued after 1 January 1901 secured by a floating charge. It was was not registered in time. The judge had permitted registration, with a proviso as contained in In re I C Johnson, and registration was completed. A compulsory winding up petition was then filed, and the company then itself resolved to wind up. Buckley J allowed the petitioning creditor to take part in an inquiry as to the priorities between the debenture holder and the unsecured creditors. In that inquiry, Joyce J gave the unsecured creditors equal priority with the registered debenture holders. Held: The debenture holder's appeal succeeded, though the intervention of winding up before registration created rights in all the unsecured creditors protected by the proviso.
Vaughan Williams LJ said that the registration (pursuant to the extension) meant that the debentures were "no longer void", limiting the protective effect of the proviso to those who had acquired rights of, or against, the property the subject of the charge prior to registration. He said that Buckley J had expressed the matter too widely in In re Joplin Brewery if he had intended that the proviso protect unsecured creditors generally. He then referred to the dictum of Cozens-Hardy LJ in In re I C Johnson and made clear his view as to the effect of winding up: "Of course, that does not mean only creditors who individually have so done, [that is as Cozens-Hardy LJ in In re I C Johnson said: taken some proceedings to get a charge or security], but creditors who come within the operation and benefit of an order for winding-up giving the creditors a right to have such property administered for their benefit. That is the conclusion which I have come to in this case. I think that the intention of the Legislature, as appears by the statute itself, was, in a case where the omission to register was accidental and the extension of time was a just thing to grant, to place the debenture-holders in the same position as they would have been in if they had registered in due time. But of course the Legislature had to make provision for the rights of those who had obtained rights which existed at the time when the order for the extension of time was made. I do not think that the Legislature meant by that that an unsecured creditor, merely because he was an unsecured creditor at the time the extension order was made, should be allowed to say, "So far as I am concerned, that debenture which was not registered in due time, but which was registered under the order for extension, is a void debenture."
1 Cites

1 Citers


 
In Re Pope ex parte Dicksee [1908] 2 KB 169
1908

Sir Herbert Cozens-Hardy MR
Insolvency, Family, Land
In a post-nuptial settlement, the wife had given up all her rights in return for a transfer to her of property from her husband who was later made bankrupt. Held: Sir Herbert Cozens-Hardy MR said: "I am unable to adopt the view that there must be either money or physical property given by the purchaser in order to bring the case within the exception. In my opinion, the release of a right or the compromise of a claim, not being a merely colourable right or claim, may suffice to constitute a person a "purchaser" within the meaning of section 47".
Buckley LJ disagreed: "The purchaser for valuable consideration within this section must be, I think, a person who gives such a valuable consideration as justifies his being described as a purchaser or buyer. That is only satisfied when the valuable consideration is money or property or something capable of being measured by money. It does not, I think, extend to the surrender of such a right as the right to relief for matrimonial offences."
Bankruptcy Act 1883 47
1 Citers



 
 In Re Rhodesia Goldfields Ltd; ChD 1910 - [1910] 1 Ch 239

 
 Galbraith -v- Grimshaw and Baxter; CA 1910 - [1910] 1 KB 339

 
 In re John Tweddle & Company Ltd; CA 1910 - [1910] 2 KB 697
 
Galbraith -v- Grimshaw and Baxter [1910] AC 508
2 Jan 1910
HL
Lord Macnaghten, Lord Dunedin
Insolvency
Where a Scottish sequestration occurred shortly after an English garnishee order nisi, the judgment creditor prevailed over the trustee in bankruptcy, although the result would have been different if both the attachment and the bankruptcy had occurred in the same jurisdiction (whether England or Scotland). The attachment in England had not been completed, but the fact that it had started meant that the garnished debt was no longer "free assets" of the bankrupt.
Lord Macnaghten said: "It may have been intended by the Legislature that bankruptcy in one part of the United Kingdom should produce the same consequences throughout the whole kingdom. But the Legislature has not said so. The Act does not say that a Scotch sequestration shall have effect in England as if it were an English bankruptcy of the same date. It only says that the Courts of the different parts of the United Kingdom shall severally act in aid of and be auxiliary to each other in all matters of bankruptcy. The English Court, no doubt, is bound to carry out the orders of the Scottish Court, but in the absence of special enactment the Scottish Court can only claim the free assets of the bankrupt. It has no right to interfere with any process of an English Court pending at the time of the Scotch sequestration."
Lord Dunedin said that there should be only one universal process of the distribution of a bankrupt's property and that, where such a process was pending elsewhere, the English courts should not allow steps to be taken in its jurisdiction which would interfere with that process: "Now so far as the general principle is concerned it is quite consistent with the comity of nations that it should be a rule of international law that if the court finds that there is already pending a process of universal distribution of a bankrupt's effects it should not allow steps to be taken in its territory which would interfere with that process of universal distribution."
Bankruptcy Act 1883 117
1 Cites

1 Citers



 
 In re Camden Brewery; 1911 - [1911] 106 LT 598

 
 In re A Debtor (No 68 of 1911); 1911 - [1911] 2 KB 652

 
 Boehm -v- Goodall; ChD 1911 - [1911] 1 Ch 155

 
 Moss Steamship Co -v- Whinney; 1912 - [1912] AC 254

 
 Re Hart, ex parte Green; 1912 - [1912] 3 KB 6

 
 Re Ashwell ex parte Salaman; Chd 1912 - [1912] 1 KB 390

 
 Dublin City Distillery (Great Brunswick Street, Dublin) Limited & Another -v- Doherty; HL 1914 - [1914] AC 823; 111 LT 8
 
MacGregor -v- Clamp & Son [1914] 1 KB 288
1914


Insolvency, Taxes management
A distress for taxes was "really by way of execution".
1 Citers



 
 In re Benzon; CA 1914 - [1914] 2 Ch 68
 
In Re Peruvian Railway Construction Co Ltd [1915] 2 Ch 144
1915

Sargant J
Trusts, Insolvency
William Alt died insolvent in 1908. His estate included shares in the company, which went into voluntary liquidation in 1914. Alt owed the company £2,633. Held: In the distribution of the company's surplus assets the liquidator could retain out of the fund, on account of Alt's debt, only the amount of the dividend on the debt. Sargant J distinguished other cited authorities as having "an entire absence of the special feature present in Cherry v Boultbee and in the case before me, namely, the insolvency of the original debtor before the right of retainer or quasi set-off had first arisen." He restated the Cherry v Boultbee rule: "where a person entitled to participate in a fund is also bound to make a contribution in aid of that fund, he cannot be allowed so to participate unless and until he has fulfilled his duty to contribute."
1 Cites

1 Citers



 
 Re Gershon and Levy; 1915 - [1915] 2 KB 527

 
 In re Melton, Milk -v- Towers; CA 1918 - [1918] 1 Ch 37
 
Re Gunsbourg [1920] 2 KB CA
1920
CA
Lord Sterndale MR, Warrington LJ
Insolvency
The debtor transferred his assets to a company formed by him. He later committed an act of bankruptcy on which he was adjudicated bankrupt. The company had sold some of the assets to a bona fide purchaser without notice of the act of bankruptcy. The trustee impugned the transfer to the company which was held to be fraudulent and void and to constitute an act of bankruptcy, and then sought to recover from the purchaser the assets which he had acquired from the company. Held: The trustee's title related back to the earlier act of bankruptcy which consisted of the transfer to the company and neither the company nor any subsequent purchaser could establish any title as against the trustee. "If this [Lord Esher's statement in re Pollitt] is correct the position is exactly the same as if the bankrupt had been in possession of goods belonging to another person, to which he had no title, and had sold them to the original transferee who had then resold them. In such a case neither the original nor any of the subsequent transferees would take any title at all, and the true owner could recover the goods from anyone in whose possession he found them. I know of no doctrine of law or equity which would relieve any of the transferees in these circumstances. It was however argued that this statement of Lord Esher cannot be taken to its full extent and that it must be confined to avoiding dealings with his property by the bankrupt himself after the date of relation back. This was founded on the argument that the original transfer was not void but only voidable, and that therefore any bona-fide purchase from the original transferee was protected. I am not sure that void and voidable are quite apt expressions, but clearly the transfer was not void at the moment it was made, for it might be that no circumstances would ever arise in which a trustee's title would accrue or the bankruptcy law apply. I will assume that voidable is a correct expression to describe the nature of the transaction, and then it becomes necessary to ascertain the effect of the avoidance caused by the making of the receiving order. This seems to me to be quite different from the effect of avoidance in the ordinary case of a voidable transfer where no principles of bankruptcy law apply. In this latter case the title of the person avoiding the transaction arises only from the time when he elects to avoid, and therefore intervening bona-fide transactions are protected because the transferor up to the date of avoidance had and could confer a good title. In the case under consideration so soon as the receiving order is made the trustee at once gets a title which relates back to the earliest act of bankruptcy within three months of the receiving order, whether it be the one upon which the receiving order is made or not, and therefore his position and rights are entirely different from those of an ordinary person who elects to avoid a voidable transaction."
1 Cites

1 Citers



 
 Wilson -v- United Counties Bank Ltd; HL 1920 - [1918-19] All ER Rep1035; [1920] LR AC 102; [1920] AC 102
 
Keene, In re [1922] 2 Ch 475
1922
CA

Insolvency

1 Citers


 
In Re Carton Ltd (1923) 39 TLR 194
1923

PO Lawrence J
Insolvency
The court considered the remuneration of a liquidator in a voluntary liquidation. Held: The court refused to authorise remuneration at an unusually generous percentage rate, which had been approved by the committee of inspection, on the grounds that the amount of work undertaken did not justify a rate higher than the rate usually applied. PO Lawrence J also said this of a time-basis: "The Court as a general rule only fixes remuneration on a time-basis if there is no other method which would operate to give the liquidator fair remuneration. Experience has shown that the time occupied by a liquidator and his clerks affords a most unreliable test by which to measure the remuneration. Even the best accountant may spend hours over unproductive work, let alone his more or less efficient staff of clerks…The Court has long since come to the conclusion that the proper method to adopt whenever it is practicable is to assess the remuneration according to the results attained,"
1 Citers



 
 In re Pitchford; 11-Jan-1924 - [1924] 2 Ch 260.
 
In re Glyncorrwg Colliery Co Ltd [1926] Ch 951
1926


Company, Insolvency
In a receivership the costs of the receivership (including the cost of realising the property comprised in the charge) had priority to the claims of the charge holder. The preferential payments must be paid before the debenture holders "but not before the costs of liquidation".
1 Citers


 
Palmer -v- Carey [1926] AC 703
1926
PC
Lord Wrenbury
Equity, Insolvency
A lender financed a trader in goods, on the basis the proceeds of sale of the goods be paid into an account in the name of the lender, and that the lender recoup himself on a monthly basis in respect of sums advanced, with the balance being released to the trader subject to a right for the lender to retain a sum representing an agreed share of the trader's profit. The trader subsequently became bankrupt. At the date of the bankruptcy, a substantial sum was owing to the lender in respect of sums advanced. The lender claimed security over goods and proceeds of sale in the hands of the trader. Held: The lender had no such security: "The law as to equitable assignment, as stated by Lord Truro in Rodick v. Gandell, is this: 'The extent of the principle to be deduced is that an agreement between a debtor and a creditor that the debt owing shall be paid out of a specific fund coming to the debtor, or an order given by a debtor to his creditor upon a person owing money or holding funds belonging to the giver of the order, directing such person to pay such funds to the creditor, will create a valid equitable charge upon such fund, in other words, will operate as an equitable assignment of the debts or fund to which the order refers. An agreement for valuable consideration that a fund shall be applied in a particular way may found an injunction to restrain its application in another way. But if there be nothing more, such a stipulation will not amount to an equitable assignment. It is necessary to find, further, that an obligation has been imposed in favour of the creditor to pay the debt out of the fund. This is but an instance of the familiar doctrine of equity that a contract for valuable consideration to transfer or charge a subject matter passes a beneficial interest by way of property in that subject matter if the contract is one of which a Court of equity will decree specific performance."
1 Citers


 
William Harrington Palmer -v- Randal Westropp Carey [1926] UKPC 30; [1926] AC 703
19 Apr 1926
PC

Commonwealth, Insolvency
(Australia)
[ Bailii ]
 
In re Paget [1927] 2 Ch 85
1927
CA
Lord Hanworth MR
Insolvency
The purpose of the public examination of a debtor is not merely to obtain a full and complete disclosure of his assets and the facts relating to the bankruptcy in the interests of the creditors, but also to protect the public: "To concentrate attention upon the mere debt collecting and distribution of assets is to fail to appreciate one very important side of bankruptcy proceedings and law." The judge had disallowed a question on the ground that the answers would not assist in the collection of the debtor's assets. The court rejected this as a sufficient ground for disallowing the question on the ground that it would exclude: "a side of the bankruptcy law which we are constantly affirming in this court, where it has been necessary over and over again to point out that in matters of bankruptcy it is not merely the creditors who have their rights, but it is also the public themselves whose interests have to be safeguarded."
1 Citers


 
Re Harrington Motor Co Ltd, Ex parte Chaplin [1928] Ch 105
1928

Eve J
Insurance, Insolvency
A person injured in a road accident had obtained judgment for damages against the company, but had been unable to enforce the judgment before the company went into liquidation. The company's motor insurers paid the amount of the judgment to the liquidator, who then treated the injured person as an unsecured creditor with no special interest in the insurance monies. Held: The liquidator had been right to deal with the matter in that way.
1 Citers


 
In re Johns, Worrell -v- Johns [1928] Ch 737
1928

Tomlin J
Insolvency, Contract
A mother and son agreed that the sum repayable by the son in respect of periodic loans made by the mother (which could not exceed £650, and might be as little as £10, in all) was to increase from £650 to £1,650 (plus interest) in the event of the son's bankruptcy. Held: The applicable principle was that a "person cannot make it a part of his contract that, in the event of bankruptcy, he is then to get some additional advantage which prevents the property being distributed under the bankruptcy laws". The agreement was "a deliberate device to secure that more money should come to the mother if the son went bankrupt, than would come to her if he did not; and, that being so . . the device is bad".
1 Citers


 
In re Windsor Steam Coal Co. (1901) Ltd [1929] 1 Ch 151
1929


Company, Insolvency, Professional Negligence
The courts look more favourably on applications by gratuitous trustees than on those by paid trustees. In a company winding up the liquidator may be liable to the company for negligence on his part in making a compromise.
1 Citers



 
 In re Drew (A Bankrupt); 1929 - [1929] IR 504
 
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