December 1, 1906.]
the
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CHINA OVERLAND TRADE REPORT.
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379
The
and the worry of his mind was undoubtedly the view of the law execution upon it is deemed | creditors were entitled to be heard on their increased by the first scheme not going to be completed; he has in fact been dispossessed. motion as if they were bona fide creditors. The through. As to the debts of the other But it is said all this goes to show that course I pursued moreover had the advantage of creditors not being valid debts, that un-in respect of lands against the owner of which a revealing certain misapprehensions in the bank. doubtedly would have been raised to the prohibitory order has been granted the judg-raptoy practice-quite apart from the essential first scheme, but that is the subject of ment creditor is a secured creditor, because difference between the 1st and 2nd sub-sections special motion before me, and would have been this creates a charge on the land, and therefore of section 18, which I have already dealt with- dealt with then, as it will be dealt with now. that this brings it within the definition of The gist of the objections was undoubtedly secured creditor." This definition is “a person creditors were assumed all the way through to be which I have now to attempt to sat right. These the fact that the leasebold properties which holding a mortgage, charge or lien on the proper- were relied on to produce some, or the greater ty of the debtor or any part thereof as a
recalcitraut, because they declined to comply part, of the 20 per cent, formed the security security
with the trustee's request to substantiate their for A which Mr. Ho Tung held in virtue of his pro-
debt due to him from claims, replying that they had already been debtor. No hibitory order. But this is blowing hot and tion fits on to the position of the judgment invective was devoted to them, for assuming s
part
of this defini-accepted by the Official Receiver; and no little cold. Mr. Ho Tung has by his vote as an creditor dealt with in section 38. unsecured oreditor prevented a scheme frow
How position which, after very carefully considering going to its second stage in which this fund against a debtor be said to beld a security for a
a person who has completed execution all the arguments, I have come to the conslu- would have been available and he objects debt Nor can the attachment by prohibitory practice of appoiuting a trustee, is I understand
sion was a strictly legal one to assume. to the second scheme b cause he is a secured order be said to be a charge on the land. Å creditor, which would prevent the fund being charge on land as a legal term means a burden
of rare ocon rence, and the application of section available. An analysis of the objections imposed on
30 (9) to him does not seem to have as yet been raised by the Trustee to the new scheme shows possession of the owner which does not prevent
land belonging to and in the considered by the Court. The words are- conclusively that the position of the debtor was
'subject to the him dealing with it, but which limits his power
power of the Court to materially altered for the worse by the vote by of dealing with it otherwise than as subject to
extend the time, the Official Receiver or inadvertance of Mr. Ho Tang as an unsecured
Trustee, shall, within 14 days after receiv. the charge. But the completed execution is ing a proof, either admit it, or reject wholly creditor at the first meeting; and it is therefore something much more than this; the seizure, im ossible to let him amend is proof, nnless an
or in part, or require further evidence order could be made which would restore the dispossessed him-the most effective token of
or what is the same thing the attachment, has in support of it, and shall notify the decision to statue quo ante. But all this is obviously his dispossession is the order prohibiting him I may deal at once with the argument that the creditors at the next general meeting." dependent on whether the Trustee can succeed in knocking out the proof of some of the receiving i'.
from alienating it, and all other persons from these provisions creditors who proved. If he does, then the
The Land Officer, whose learning therefore not to be construed too strictly. I directory," and are in all the lore of his office I must her. figures on which the previous argument proceeds acknowledge, has drawn my at ention to another
agree but I understand the meaning of this will be entirely altered, and the question of the aspect of the question. It was expressly pro- the Court and that the consequences of slips on to be that they are directions to an officer of concludement of the proof would probably vided by the statute- 1 and 2 Vict. c. 110. s. 13, his part will require farther consideration. So much for this that a judgment should operate as a charge on
not be pressed too hardly part of the case, regarded from the point of view real estate and the intention that the judgment
against him, or ra her against the persons of Mr. Ho Tung being a secured creditor. Inow
whose rights are vested in him, it it is possible creditor should have a preference iu bankruptcy for the Court to set them right, the reason proceed to state my reasons for considering him in virtue of such charge if entered up one year not to be a secured creditor. Sections 30 to 32 before the bankruptcy is expressed in the proviso are directly and pecuniarily interested in the bing that it is not advisable "that people who of the Ordinance deal with "proof of debts," s. to the section. That Act is in force in the 31 treating of the rights and duties of secured Colouy as it was passed prior to 1815; but its prejudiced by errors which he may commit. Trustee's conduct of the proceedings should be creditors. Then two other subjects are dealt effect is modified by the Land Registration with "appropriation of assets," by sections 33 Ordinance 1843, which requires it to
The Trustee has simply failed in his duty, to 35, and property available for payment of registered in the Land Office. In England the L. J. 967). But this does not mean that that is all" (see Day J. in re Sissling, 53 debts," by sections 3 and 37. Afterwards we Act has been modified, and it is provided therefore the express provisions of the statute come to another group of sections, 38 to 2, by 27 and 28 Vict. c. 112 8 1, that judg. which are beaded "effect of bankruptcy on
are to be ignored, and the officer may act in ments are not to affect any land until it has antecedent transactions," of which 8. 38 treats actually been delivered in execution, which it
complet disregard of them. The key to the of the "restriction of rights of execution
position is the meaning of the words " has been beld did away with the charge, and
receiving creditor" which follow a. 45 of the English assimilated the law affecting land to that
a proof." After the trustee had been appointed Bankruptoy Act, 1883
the Official Receiver handed over to him all This section lays down affecting personality in respect of judgments, the papers including the proofs which he had the important principle that a judgment That Act is not in force in the Colony. The himself received, and it was treated as if the date effect of this is that the judgment creditor has a charge on land if he has registered his Official Receiver was to date from which the of the trustee's receiving the proofs from the judgment in the Land Office a year prior to the bankruptcy, but not otherwise; and if he never
14 days were to run. I am of opinion that this is wrong: receiving a proof" means receiving it had a charge execution could not give it to him, from the creditor, an l is a technical expression for the very good reason that it gave him more used for fixing the date on which a creditor is than a charge the possession of the land. I said to have proved. This established, the rest am therefore of opinion that Mr. Ho Tung was follows easily. The Official Receiver and had obtained, namely, the realization of his section as throughout the Ordinance; either A judgment creditor entitled to retain what he trustee are used in the alternative in this sub- attachment on the debtor's lands, and that of them may receive proofs, and thereupou he was not to be treated as a secured creditor. within 14 days, may do what the sub-section His proof was defective because it Was enables them to do. Some proofs were received far too much, bat neither the provision which requires him to value his
by the Official Receiver, and some by the security, nor the penalty for voting for the by them respectively, either of them might trustee; and in respect of the proofs received whole of his debt, that he would be held to have have called on abandoned his security, applies to hin. I think evidenc, and either of them might admit or the creditors for further I may fairly assume that Mr. Ho Tang would r-ject There is nothing in the language of have valued his execution at $19,500, the value the sub-section which authorises the trustee to he has put upon his so-called security; and there whom proofs admitted by the Official Receiver fore the order which must be made is that his have bo passed on. to act as a sort of Court of. proof be reduced by that amount, but without Appeal from the Official Receiver, and call for any forfeiture of the rights which he has further evidence to substantiate them for the acquired under bis completed execution. will restore the resolution passed at the first
This simple reason that the period has gone by. And meeting of creditors, and as it is now a special "recption of proof" by him from which the so far as the trustee is concerned there is no resolution as required by law, the second meet- ing required by 8, 18 (2 and 3) must be called. has admitted a proof the simple powers of the When once the Official Receiver The question of costs I must deal with later. This order
two officers are exhausted. I accept Bir H. bowerer must be in abeyance Berkeley's final argument in reply to Mr. Slade, until I have considered the motion of the trustee calling
that where a trustee has been appointed, he is sowe of the creditors for the successor in title of the Official Receiver; further proof to substantiate their claims. I proceed now to consider the trustee's motion in title cannot exercise a second time rights but that makes the point plainer, for a successor elling for further proof of the claims from certain creditors. Sir H. Berkeley insisted, and exercised. And the same argument must apply which his predecessor in title has already indeed persisted, that his motion was entitled to priority. But I am quite clear that although to extend the time to do what? To admit, or to the power of the Court to extend the time; logic would seem to be on his sid, there was no to reject, or to require further evidence. I reason for departing from the usual practice of do not think either of the offloors, having taking motions in priority according to their exercised their power of admitting respective fotices. And it was the more neces-rejecting a proof, could then come to the sary in this case, because the Official Receiver Court to extend the time-is, to extend the had admitted the proofs, and therefore the time to do a second time what they had
creditor shall not be entitled to retain the benefit of an execution unless he has completed it before the date of the receiving order, and before notice of the bankruptcy petition; that is, he shall be entitled to retain it if he has com- pleted it without notice of the petition. Then in the second subsection the meaning of "com- pleting an execution" is given, which naturally Varies according to the kind of executiou resorted to. Now, on the face of this section there is nothing which links it on in any way with section 30, which deals with secured creditors: there is no word in either which refers to the other or, from which a reference to the other could be inferred. They deal with a different order of idea: the first with sreditors who hold unrealised securities; the second with creditors who have already enforced their claims to the full by process of law-its marginal nole might well be Beati possidentee. The whole idea, however, centres round the fact that possession of tbe debtor's property has been obtained. Now I come to the different forms of execution-the different ways in which possession may be obtained. In some cases, owing to the nature of the property, possession cannot be obtained absolutely, but only figuratively. In the case of lands, it is by the attachment by prohibitory order with due registration in the Land Office. This is no less a form of execution than seizure and sale of moveables; but owing to the fact that the sale of lands is not so expeditions as the sale of goods and chattles, the execution is deemed to be completed by the attachment, which is the equivalent of seizure. There can be no differ- ence in the application of the principle of the seotion to different kinds of property, which is equired in order that a judgment creditor should retain what he has got is something to show that he has got it; some- thig which has ousted the claim of the debtor, if not to his possession as owner, at least to his exercising his rights as owner. He is prohibit ed. from dealing with it as owner, because in
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