Aitchison v Lee Re The Royal British Bank

[637] aitchison v. lee. Re the eoyal british bank. -Nov. 3, 4, 5, 24, 1856. Jurisdiction. BcmTdng Ads. Bankruptcy. Official Manager. In this case, which came on upon a petition to wind up the Eoyal British Bank-a company formed and acting under the 7 & 8 Viet. c. Ill-the bank had stopped payment on the 3d September 1856. On the 8th the petition to wind up was SDREWRT.esS. AITCHIS0N V. LEE 1047 presented, and an order made. On the 27th Mr. Harding was appointed interim manager; and, on the same 27tb, an order was made that all persons possessing any documents, bOlsior cash,;&e:, belonging to the company, should deliver them up to him by the 4th October.. On the 13th October Harding was regularly appointed official manager, and on the 2d the proceedings had been registered as Us pendens. , '.,.-, . ; ' òò 'ò . In the meantime proceedings in bankruptcy against the bank had been taken. On the 8th September a creditor filed an affidavit, and served a writ of summons upon the secretary of the bank under the 7th sect, of 7 & 8 Viet. c. 111. On the 20th the company was duly dissolved under the deed of settlement. On the 9th October the company was adjudged bankrupt, and Mr. Lee was appointed official assignee ; during the Vacation, a limited injunction against proceeding in the bankruptcy was granted; and, notwithstanding, the official assignee interfered with the official manager. Held, that the bankruptcy of the company related back to the 8th of September, the day when the summons was served, and from that day the assets of the company vested at law in the official assignee; that though the official assignee was entitled at law to the property of the company, it was a contempt in him to disturb the official manager, who is a receiver of the Court; that the pro ceedings to settle the affairs of the company might go on concurrently-the Court of Bankruptcy collecting and distributing the assets of the company, and the official manager settling the list of eontributories, and adjusting the rights of the shareholders inter se. ; , The injunction was dissolved, and the official manager ordered to deliver up books, papers, &c., to the official assignee. In this case, which came on in a suit and upon a petition to wind up the Royal British Bank-a company formed and acting under the 7 & 8 Viet. c. Ill-the bank bad stopped payment on the 3d of September 1856. On the 8th the petition to wind up was presented, and an order made. On the 27th Mr. Harding was appointed interim manager; and, on the same 27tb, an [638] order was made that all persons possessing any documents, bills, or cash, &e.j belonging to the company should deliver them up to him by the 4th October. On the 13th October Harding was regularly appointed official manager, and on -the 2d the proceedings had been registered as lis pendens. ..òò-.... In the meantime proceedings in bankruptcy against the bank had been taken. On the 8th September a creditor filed an affidavit, and served a writ of summons upon the secretary of the bank, under the 7th section of the 7 & 8 Viet. c. 111. On the 20th the company was duly dissolved under the deed of settlement. On the 9th October the company was adjudged bankrupt, and Mr. Lee was appointed official assignee. . .,'.:ò In the Vacation Vice-Chancellor Kindersley bad granted a limited injunction restraining proceedings; so far as to keep the matter in statu quo. Mr. Lee had, nevertheless, interfered with the possession of the interim manager. And three motions were now made:: one to order Mr. Harding to deliver up to the official assignee the books and other effects of the company, of which Harding, as official manager, had taken possession; another to dissolve the injunction; and a third, a motion in the nature of a motion to commit Mr. Lee and the messenger in bankruptcy for contempt, in disturbing the possession of the official manager. The question discussed on the principal motion was whether the property of the bank should be distributed in the bankruptcy, or whether it should be managed and distributed under the wiriding-up order. The facts and the arguments are so fully set out and adverted to in the judgment, that the report would be [639] unnecessarily lengthened by reporting the arguments of the learned counsel. . Mr. Eolt, Mr. Brown (of the Common Law Bar) and Mr. G. M. Giffard were for Mr. Lee, the official assignee. : Mr. Glasse and Mr. W. B. Lewis, for the official manager. The following cases were cited in argument:-Norwich Yarn Company (27 L. T. N. S.)-323); Pennell v. Moy (3 De G. WS-. & Gor. 126); Beardshaw v. Lord Lands- 1048 AITCHISON-t". EEffi 3 DREWRY*M. lormigh (11 C. B. 498); Jones v. Gaddes (14 Sim.-606); Graham v. Maxwell (1 M.'N. & got. 71); India and Australia Steam-Packet Company (17 Sim. 15); Bussell v. The East Anglian PMilway Company (3 M'N. & \Gor,, 104) : and the following statutes were commented on :-7 & 8 Viet. c. Ill, ss. 1, 2, 7, 12, 19, 20, 25, 28, 29, 34, 82, 87, 88, 143 ; 12 & 13 Viet. c. 106 ; 11 & 12 Viet. c. 45. On the 24th November, the vice-chancelloe delivered the following written judgment:-- . ;.òòòòò. This case comes on upon three different applications or proceedings. 'ò The first is an application by Mr. Lee, the official assignee in bankruptcy of the Eoyal British Bank, in a suit of Aitchison v. Lee, and:in the matter of the Winding-up Acts, asking that Mr. Harding, late the interim manager and now the official manager under those Acts, may be ordered to pay and deliver up on path, to Mr. Lee, all moneys and securities for money, property, [640] assets, credits and effects, books, papers and writings in his possession or power, belonging to or forming part of the estate of the Eoyal British Bank ; and that he may be; ordered to withdraw from the occupation, possession and receipt of any part of the same estate, and let Mr. Lee into the occupation and possession thereof. The second is a motion to dissolve an injunction, granted ex parte in the suit, of Aitchison v. Lee, by which the Defendants are restrained from prosecuting a summons, issued out of the Court of Bankruptcy, requiring Mr. Harding, then the interim manager, to shew cause why he should not be committed; and by which the Defendants are also restrained from molesting or disturbing Mr. Harding in the possession of the property of the Royal British Bank. : The third proceeding is that Mr. Lee, the official assignee in bankruptcy, and Mr. Johnston, the messenger, appear under an order made in the matter of the Winding-up Act, to shew cause why they should not be committed for contempt of this Court, in disturbing the possession of Mr. Harding, the interim manager. The practical question to be decided is whether the property of the Eoyal British Bank is to be distributed among the creditors by the official assignee under the bankruptcy, or the official manager under the Winding-up Act. ; The material facts and dates are the following:-On the 3d September 1856 the Eoyal British Bank, which was a joint stock company formed under the provisions of the Act of 7 & 8 Viet, for regulating joint stock companies, stopped payment. On the 6th September [641] a petition for winding up the company under the Winding-up Act of 1848 was presented by Sherman, a contributory, and was answered by the Lord Chancellor. On the 8th September(Elliott, a creditor, filed an affidavit of debt in the Court of Common Pleas, and on the 'same day sued out and served on the secretary of the company a writ of summons, according to the requisitions of the 7th section of the 7 & 8 Viet. c. 111. On the 20th September the company was dissolved by a resolution of a meeting duly convened, according to the provisions of the deed of settlement of the company. On the 24th September an order absolute to wind up the company was made on the above-mentioned petition of Sherman, and upon three other petitions which had been presented by other contributories. On the 27th September Mr. Harding was appointed interim manager under the Winding-up Act, and by another order of that date it was ordered that every person who had possession of any of the books of account, deeds, instruments, cash, bills, notes, papers and writings belonging to the company should, on or before the 4th October, or within four days after service, produce and leave the same with the interim manager. On the 2d October the proceedings under the Winding-up Act were registered as a lis pendens, according to the 125th section of the Winding-up Act. On the 9th October, when a calendar month had expired from the service of Elliott's writ of summons, another creditor named Burke presented a petition for adjudication to the Court of Bankruptcy, and on the same day the company was adjudged bankrupt under 7 & 8 Viet. c. Ill, and Mr. Lee was appointed official assignee. On the 13th October Mr. Harding was appointed official manager. Upon these facts the first question to be determined is [642] this: who has the legal title to the property of the company? Is it vested in the official assignee, or in the official manager ? If in the latter, no ground has been suggested why that title should not prevail. If in the official assignee, the next question is, are there any MS. AIUCHKOW . XBE 1049 grounds upon which this Court ought tot interfere with the assertion or "exercise of his legal title 1 The solution of these...