Graham and Another, Assignees of John Barugh, a Bankrupt v Furber
| Jurisdiction | England & Wales |
| Judgment Date | 11 November 1853 |
| Date | 11 November 1853 |
| Court | Court of Common Pleas |
English Reports Citation: 139 E.R. 56
IN THE COURT OF COMMON PLEAS AND IN THE EXCHEQUER CHAMBER
S. C. 2 C. L. R. 10; 23 L. J. C. P. 10; 18 Jur. 61. Applied, Krehl v. Great Central Gas Company, 1870, L. R. 5 Ex. 292. Dictim approved, In re Seaman, (1896) 1 Q. B. 415.
graham and another, Assignees of John Barugh, a Bankrupt v. furber. Nov. 11, 1853. [S. C. 2 C. L. E. 10; 23 L. J. C. P. 10; 18 Jur. 61. Applied, Krehl v. Great Central Gas Company, 1870, L. E. 5 Ex. 292. Dictum approved, In re Seaman, [1896} 1 Q. B. 415.] The taking of goods by the true owner out of the " possession, order, or disposition 'f of a bankrupt, after a secret act of bankruptcy, but before the date of the fiat, or the filing of the petition, is " a dealing or transaction " with the bankrupt, within the protection of the 133rd section of the 12 & 13 Viet. c. 106.-An order made by the court of bankruptcy for the sale of goods so circumstanced, under s. 125, is not finally and conclusively binding upon the owner of them. The declaration stated that the plaintiffs, assignees of the estate and effects of John Barugh, a bankrupt, sued the defendant for money payable by the defendant to-the plaintiffs as such assignees as aforesaid, for money received by the defendant for the use of the plaintiffs as such assignees as aforesaid, and for money found to be due from the defendant to the plaintiffs, as such assignees as aforesaid, on accounts stated between them; and that the plaintiffs, as such assignees as aforesaid, also sued the defendant, for that whereas, at the time when the said John Barugh became bankrupt, the said John Barugh, by the consent and permission of the true owner thereof, being a person other than the said John Barugh, had in his possession, order, and disposition, certain goods whereof he was reputed owner,-of all which the defendant, at the time when the defendant sold as hereinafter mentioned, had notice;. that the plaintiffs, as such assignees as aforesaid, duly obtained [135] an order of the court of bankruptcy, ordering that the said goods and chattels should be sold and (a) The owners of the "Maria" afterwards proceeded against the "Clarence" in the Admiralty court, and there recovered the amount of damage sustained by the " Maria " from the collision. See 17 & 18 Viet. c. 104. 14 C. B.J.36. GRAHAM V. FURBER 57 disposed of for the benefit of the creditors of the said John Barugh under his bank-ruptcy; that the defendant, after the said John Barugh became bankrupt, and when he had such notice as aforesaid, and when he knew that the said John Barugh had become and was a bankrupt, and when the plaintiffs were his assignees as aforesaid, and the defendant knew that they were such assignees, and before such order was obtained, for the purpose of preventing the plaintiffs, as such assignees as aforesaid, from selling and disposing of the said goods and chattels under and by virtue of such order as aforesaid, when obtained, and of depriving the plaintiffs, as such assignees as aforesaid, of the benefit of such order, when obtained, and of any sale or disposition to be made under or by virtue of the same, wrongfully converted to his own use, and sold and disposed of, the said goods and chattels, and caused the same to be removed to places and by persons unknown to the plaintiffs; whereby the plaintiffs, as such assignees as aforesaid, were prevented from selling and disposing of the said goods and chattels under and by virtue of the said order, as they otherwise would have done, and were entitled to do, and deprived of the benefit of such order, and of any sale or disposition to have been made under and by virtue of the same, and were by the defendant wholly prevented from acquiring possession of the same goods and chattels, as they otherwise would have done, and were entitled to do; and the plaintiffs, as such assignees as aforesaid, claimed under the money counts 5001. for debt, and 501. for damages for the detention thereof, and under the residue of the declaration 5001. Eighth plea,-That the defendant was the true owner of the said goods and chattels during all the times in the said residue of the declaration mentioned ; and that, before he had notice of any act of bankruptcy by the [136] said John Barugh committed, the defendant really and bonl fide took the said goods and chattels out of the possession, order, and disposition of the said John Barugh, and into his the defendant's own possession, order, and disposition, and they so remained until and at the time of the filing of the petition under which the said John Barugh was adjudicated bankrupt and the plaintiffs appointed such assignees as aforesaid ; and that the acts alleged to have been done as in the said residue of the declaration mentioned, were done before the making of the alleged order, and before the defendant had any notice thereof; and that the taking the said goods and chattels as aforesaid out of the said possession, order, and disposition, was a transaction really and bona fide made, done, and entered into, within the true intent and meaning of the Bankrupt Law Consolidation Act, 1849. The plaintiff replied to the eighth - plea, that, before and at the time when the defendant took the said goods and chattels respectively out of the possession, order, and disposition of the said John Barugh, he the defendant contemplated that the said John Barugh would shortly become bankrupt, and so took the same out of his possession, order, and disposition, for the purpose of protecting them from being sold or disposed of for the benefit of the said John Barugh's creditors under such bankruptcy. They also demurred to the plea, the objections pointed out in the margin of the demurrer being,-" that the taking of goods out of a bankrupt's possession, is not a contract, dealing, or transaction by or with the bankrupt, but is the act of the owner of the goods alone, which may be performed even against the will of the bankrupt, or in his absence, without his knowledge; and that there is no reason why the owner, who has allowed the bankrupt to obtain fictitious credit down to the time of the actual bankruptcy, should be [137] able to relieve himself from the penalty which thereupon under section 125 (of the 12 & 13 Viet. c. 106) attached ; and that, even if the removal is a protected transaction under section 133, it is the removal alone which is made lawful, so as that no proceedings can be taken against the owner for such removal, but the subsequent sale, made after notice, is wrongful." The defendant took issue and demurred to the replication to the eighth plea,-the objection to be relied upon being, " that the replication states mere matter of vulgar prejudice, not altering the character of the act justified by the eighth plea." Each party joined in demurrer. Bovill, in support of the demurrer to the plea (a). The question in this case turns (a) The points for argument for the plaintiffs, were,-"That the plea is bad, but that, if it be good, the replication is an answer to it: That the plea does not allege that the removal was a ' transaction' by or with the bankrupt: That s. 133, if it applies at all, only legalises the removal itself, which is a very different thing from legalising the subsequent sale, with notice; but that s. 133 does not override s.-125; 58 GBAHAM, V. FURBER M.C.B. 138. upon the true construction to be put upon the 125th and 133rd sections of the 12 & 13 Viet. c. 106. The 125th section enacts, " that, if any bankrupt, at the time he becomes bankrupt, shall, by the consent and permission of the true owner thereof, have in his possession, order, or disposition, any goods or chattels whereof he was reputed owner, or whereof he had taken upon him the sale, alteration, or disposition [138] as owner, the court shall have power to order the same to be sold for the benefit of the creditors under the bankruptcy,"-with a proviso that the clause should not invalidate assignments of vessels under the 8 & 9 Viet. c. 89. And the 133rd section enacts "that all payments really and bona fide made by any bankrupt, or by any person on his behalf, before the date of the fiat, or the filing of a petition for adjudication of bankruptcy, to any creditor of such bankrupt, and all payments really and bonS, fide made to any bankrupt before the date of the fiat, or the filing of such petition, and all conveyances by any bankrupt bona fide made and executed before the date of the fiat, or the filing of such petition, and all contracts, dealings, and [transactions by and with any bankrupt really and bona fide made and entered into before the date of the fiat, or the filing of such petition, and all executions and attachments against the lands and tenements of any bankrupt bona fide executed by seizure, and all executions and attachments against the goods and chattels of any bankrupt bona fide executed and levied by seizure and sale before the date of the fiat, or the filing of such petition, shall be deemed to be valid, notwithstanding any prior act of bankruptcy by such bankrupt committed; provided the person so dealing with, or paying to, or being paid by, such bankrupt, or at whose suit or on whose account such execution or attachment shall have issued, had not at the time of such payment, conveyance, contract, dealing, or transaction, or at the time of so executing or levying such execution or attachment, or at the time of making any sale thereunder, notice of any prior act of bankruptcy by him committed," &c. It is by confounding these two very different provisions that the courts have fallen into a mistake in some of the cases which will be relied on by the other side. The doctrine of relation has reference only to matters occurring after the act of bankruptcy : [139] whereas, the doctrine of reputed ownership refers to things happening before and down to the time of the act of bankruptcy. The offence...
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