O'Flaherty and Others (Creditors of the Tipperary Bank) v McDowell (Official Manager of the said Bank), Attorney General and Others

JurisdictionEngland & Wales
Judgment Date09 July 1857
Date09 July 1857
CourtHouse of Lords

English Reports Citation: 10 E.R. 1248

House of Lords

Richard O'Flaherty and Others, Creditors of the Tipperary Bank
George M'dowell, Official Manager of the said Bank, the Attorney-General, and Others

Mews' Dig. i. 1007: xiii. 1896, 1936, 1947. Dissented from us to repeal of 33 Geo. II. c. 14, in Davies v. Kennedy, 1868, I.R. 3 Eq. 31, 668, and of. Grant's Law of Banking, 5th ed. 422. As to affirmative enactment giving new rights, cf. Garnett v. Bradley, 1878, 3 A.C. 944.

Statutes repealed and in force - Bankers - Joint Stock Companies - Bankrupt Law Pleading.

[142] RICHARD O'FLAHERTY and Others, Creditors of the Tipperary Bank,- Appellants; GEORGE M'DOWELL, Official Manager of the said Bank, the ATTORNEY-GENERAL, and Others,-Respondents [June 19, 22, 23, 25; July 9, 1857]. [Mews' Dig. i. 1007 : xiii. 1896, 1936, 1947. Dissented from us to repeal of 33 Geo. II. c. 14, in Davies v. Kennedy, 1868, I.R. 3 Eq. 31, 668, and of. Grant's Law of Banking, 5th ed. 422. As to affirmative enactment giving new rights, cf. Garnett v. Bradley, 1878, 3 A.C. 944.] 1248 o'flahbrty v. m'dowell [1857] vi h.l.c., 143 Statutes repealed and in force-Bankers-Joint Stock Companies-Bankrupt Law Pleading. An affirmative statute, giving a new right, does not of itself and necessarily destroy a previously existing right, created by another statute to which it does not refer; but will do so, if it appears to have been the intention of the legislature that the two rights should not exist together. The Irish statute 33 Geo. 2, c. 14, is repealed, so far as joint stock banks in Ireland are concerned, by the Imperial statute 6 Geo. 4, c. 42, though the former is not mentioned in the latter statute, the provisions of the two statutes being entirely incompatible with each other. A joint stock banking company in Ireland is within the provisions of the 8 and 9 Viet. c. 98. A petition of certain persons under the 33 Geo'. 2, c. 14 (Ir.), on behalf of themselves, and all the creditors of an Irish Bank, for administration of assets, under the trusts of that statute, is informal. It ought to be, in any case where it can be maintained, a petition on behalf of all the creditors of the persons constituting the bank, the provisions of that statute affording a remedy not exclusively for debts owed by those persons in respect of the bank, but for their debts generally. Fawceti v. Hodges, 3 Ir. Eq. Eep., 232, overruled; Hoyden v. Carroll, 3 Kidg. Parl. Gas., 545, questioned. This was an appeal against an order of the Lord Chancellor of Ireland, dismissing a petition which had been filed by the present Appellants, on behalf of themselves, and all the other creditors of the " Tipperary Joint Stock Bank," praying that " the trusts of the Act 33 Geo. 2, c. 14 (Ir.), might, as to the said creditors of the Tipperary Bank, be carried into execution under the direction of the Court, and that the petitioners, and the other creditors of the [143] said banking copartnership, might be paid their demands out of the joint and separate property of the members thereof." " The Tipperary Joint Stock Bank" had been established in 1838, under the provisions of 6 Geo. 4, c. 42, and was regulated by an indenture dated 5 July 1842, by which it was agreed that the object of the copartnership should be to establish, in any cities, towns, and places in Ireland, and in any other places the directors might think proper, banks and agencies, and thereby to carry on the business of bankers. The company or copartnership consisted of a large number of individuals, who subscribed for shares, and its business was managed by a board of directors. In February 1856 the bank stopped payment, and the petition of the Appellants was thereon presented. Other proceedings were instituted by other individuals, likewise creditors of the bank, under the Joint Stock Companies' Winding-up Acts, and the Eespondent, M'Dowell, was, under them, appointed official manager. The main question raised between these parties was, whether the 33 Geo. 2, c. 14 (Ir.),* applied to a bank established under the 6 Geo. 4, c. 42, or whether the latter statute had [144] not, in effect, repealed the former. The Lord Chancellor was of opinion that the earlier statute did not apply, and therefore dismissed the petition. The Appellants appealed against that decision. * There were several statutes referred to in the argument and judgment. The following summary of them is all that is necessary to be given. The 8 Geo. 1, c. 14 (Ir.), and the 29 Geo. 2, c. 16 (Ir.), made special provisions for the government of banks and bankers in Ireland. Then came the 33 Geo. 2, intituled " An Act for re pealing the 8 Geo. 1, c. 14, and for providing a more effectual remedy for the security and payment of Debts due by Bankers." It enacts first, that the 8 Geo. 1, shall be repealed; secondly, that all deeds and conveyances made by any banker or bankers, whereby any part of their real or leasehold estate shall be granted, released, sold, mortgaged, demised or any way incumbered or affected, other than leases not exceeding three lives or thirty-one years, at the full improved rent, without fine, shall be registered within one month from the execution of such deed or conveyance; and if such deed or conveyance be executed by the banker out of the kingdom, then within three months from its execution, otherwise the same shall be void against the creditors of the banker, though made for valuable consideration; thirdly, that all H.L. x. 1249 40 vi h.l.c., i o'flaherty v. m'dowell [1857] [145] Mr. Lawson (of the Irish Bar), and Sir F. Kelly, for the Appellants.-The 33 Geo. 2, c. 14, is applicable to this case; if not, the creditors of joint stock bankst in Ireland, to which the bankrupt law, 6 Will. 4, c. 14, does not extend, will be left [146] without any remedy. They may sue the public officer, and then issue execution against individual shareholders; but these being 8000 in number, the creditors would, in fact, be left without any means of obtaining satisfaction of their debts. The statute of Geo. 2 secures them those means. The 29 Geo. 2, c. 16 (Ir.) is the first of the statutes relating to banks in Ireland which it is necessary to notice: that was called "An Act for promoting Public Credit;" it required all persons to* sign the notes issued by them as bankers, and it prevented merchants and others from carrying on any general business, if they carried on the business of bankers. Under that Act, therefore, the existence of joint stock banks was impossible; and so the law remained till the 5 Geo. 4, c. 73, [147] which allowed banks of more than six persons in number, and which was, in the following session, repealed, in order that its provisions might be extended by the 6 Geo. 4, c. 42. Joint stock banks can now be established in Ireland; but the provisions of the last-named statute are not sufficient for their complete regulation, and they therefore remain subject to the 33 Geo. 2, c. 14, by which, from the moment of the stoppage of a bank, the whole estate of each shareholder becomes in trust for the general body of the creditors. The petition here is to carry that trust into execution. The words, " accountable receipts," in that statute show that it applies both to banks of deposit, and to banks issuing their own grants, sales, alienations, leases or dispositions to be made by any banker, during the time he is a tanker, of any part of his real estate or of any leasehold interest to him belonging, to, or to the use of, or in trust for any s.on or grandson, daughter or granddaughter of such banker, shall be utterly void as against the creditors of the banker, though made for valuable consideration, and though the creditors were not creditors of the banker at the time such grant or disposition was made. Then it provides that bankers shall not issue notes or accountable receipts, with any promise therein contained for payment of interest; and that if bankers do not pay on demand their notes, they, their heirs, executors and administrators, shall thenceforth be chargeable with interest on the sums mentioned in such notes or receipts. The sixth section enacts, " that if any banker, after he shall have stopped payment, shall receive or discharge any sum of money due to him at the time of his stopping payment, every such receipt and discharge shall be absolutely void; and that all deeds and conveyances made by any banker of his real or personal estate, after the time he shall abscond, conceal himself from his creditors or stop payment, though made for valuable consideration, shall be null and void to all intents and purposes whatever, unless made in trust for the creditors of the banker; a,nd then the eighth section enacts, that from and immediately after the time that any banker shall abscond, conceal himself from his creditors, or stop payment, or die, all the real estates, whether for lives, in fee-simple or fee-tail, and all the personal estate, credits and effects whatsoever, either in law or equity, of which such banker shall be seised, possessed of, or entitled unto at the time of his death, or stopping payment, or absconding, or concealing himself from his creditors, shall be liable and subject to the payment of all and every his debts, of what nature or kind soever the same be, without any regard to priority or preference in point of payment, other than and except such debts and incumbrances as such banker shall contract before he became a banker, and except such debts and incumbrances as shall be secured by deeds or conveyances registered as aforesaid." The Act then contains clauses enabling the banker to vest all his estates in trustees, for the benefit of his creditors; and the 40 Geoi 3, c. 22, comes in aid of these last-mentioned provisions, by providing that the banker making such an assignment shall be protected from personal liability and from arrest. There were afterwards passed the 1 and 2 Geo. 4, c. 72, and...

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