Re Shine. ex parte Shine
| Jurisdiction | England & Wales |
| Date | 1892 |
| Year | 1892 |
| Court | Court of Appeal |
Bankruptcy - Property of Bankrupt - “Salary or income” - Appropriation of Bankrupt's salary or income for Creditors - “Receipt of salary or income” -
Sect. 53, sub-s. 2, of the Bankruptcy Act, 1883, enables the Court, when a bankrupt is in the receipt of a salary or income, to order it, or any part thereof, to be paid to the trustee in the bankruptcy, to be applied by him as the Court may direct:—
Held, that salary or income payable to a bankrupt under an agreement in respect of his personal services, is not “property of the bankrupt” which vests in the trustee in the bankruptcy under s. 54 of the Act, and that, consequently, notwithstanding the making of a receiving order against him, the bankrupt is competent to make any arrangement which he pleases with regard to such salary or income, so long as no order for its application has been made under s. 53, sub-s. 2, and that such an order when made cannot affect the validity of a prior arrangement as to the salary or income entered into by the bankrupt.
An actor entered into an agreement with the manager of a theatre to act at a specified theatre, or any other theatre, for a term of two years, at a salary of 30l. a week, payable weekly. The salary was to be subject to a proportionate reduction in respect of any night upon which the theatre should not be open. A receiving order in bankruptcy having been made against the actor, he entered into an arrangement with the manager that the manager should buy up his debts and should reimburse himself by retaining 20l. a week out of the bankrupt's salary. The creditors were to be paid by means of shares in a company, and they did not all avail themselves of the arrangement:—
Held, that the payment to the bankrupt for his services under the first agreement was “salary or income” within the meaning of s. 53, sub-s. 2, but that the second agreement with the manager was valid, notwithstanding the receiving order.
APPEAL against an order that a part of the salary or income of J. L. Shine, a bankrupt, should be paid to the trustee in the bankruptcy for the benefit of the bankrupt's creditors.
The bankrupt was a comedian. On June 4, 1891, he entered into an agreement in writing with Sir Augustus Harris, the manager of the Theatre Royal, Drury Lane. This agreement, in which Sir Augustus Harris was called “the manager,” and the bankrupt was called “the artiste,” contained (inter alia) the following clauses:—
“The manager engages the artiste at a salary of 22l. 10s. per week, to include six performances, and a further salary equal to one-twelfth of the said sum of 22l. 10s. for each additional morning performance, according to the custom of playhouse pay, that is, for such days and nights only as the said theatre shall be open for theatrical performances under the management of the manager; the artiste to rehearse and perform to the best of his skill and ability at the said theatre, or any other theatre or place of amusement, as often as he shall be warned to do so by the manager, or any other person or persons duly authorized by him on his behalf (all such persons being included in the term ‘the management’ hereinafter used), or by notice in the bills of the day or newspapers.
“This engagement shall commence on the 20th July, 1891, and shall continue in force for a period of two years, forty-four weeks guaranteed in each year, at such time or times as Mr. Harris may desire. Should Mr. Shine be called upon to play out of London his salary shall be 30l. weekly.
“The annexed rules and regulations shall be taken to be incorporated with and form part of this agreement, and shall be binding upon the artiste.”
Among the rules and regulations annexed to the agreement were the following:—
“10. Every person engaged at this theatre, as a performer or otherwise, will be paid weekly according to the usual mode of playhouse payment.
“11. No performer or other person engaged or employed at this theatre shall be entitled to be paid for any day or days on which the theatre is not open for theatrical performances.”
On July 23, 1891, a receiving order in bankruptcy was made against Shine, and on August 23, 1891, he was adjudicated a bankrupt, and the official receiver thereupon became the trustee of his property.
On September 10, 1891, the official receiver gave notice of an application to the Court, under s. 53 of the Bankruptcy Act, 1883, for an order setting aside a portion of the bankrupt's salary for the benefit of his creditors. At this time the bankrupt was engaged in performing with a company under the management of Sir A. Harris out of London. This tour was to end on December 17. In answer to this application the bankrupt made an affidavit, in which he said: “I was, prior to the receiving order, engaged by Sir A. Harris to take part in a touring company, which will come to an end on the 17th December, 1891. Under the terms of my engagement I receive as remuneration for my services £5 per performance, payable at the end of each week. If the theatre should be closed, or through illness or any other cause whatsoever I should be prevented from performing, or decline to perform, then on each and every such occasion I am not entitled to any remuneration. Sir A. Harris and myself are at liberty to put an end to such engagement by giving a day's notice. Shortly after the date of the receiving order Sir A. Harris offered to buy up the debts due to my various creditors if I could arrange with them to take shares in a certain company, or could realize such shares. The conditions upon which such offer was made were, that my solicitors should purchase the debts and hold them upon trust for Sir A. Harris, until he had been repaid the amount to be so found by him. During the remainder of the before-mentioned tour, if I continued with his company and attended every performance, it was agreed that Sir...
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