Becke v. Smith

Becke, Assignee of Wm. Ashton, an Insolvent Debtor v. Smith.

EXCH. OF PLEAS.

Original Citation: (1836) 2 M & W 191

English Reports Citation: 150 E.R. 724

1836.

S. C. 2 Gale, 242; 6 L. J. Ex. 54.

Becke, Assignee of Wm. Ashton, an Insolvent Debtor v. smith. Exch. of Pleas. 1836.-The 3'2nd section of the Insolvent Debtors' Act, 7 Geo. 4, c. f 7, does not apply only to such assignments and transfers as are made within three months before the commencement of the imprisonment, or during the continuance of such imprisonment, but extends to assignments made at any time, even a year previous to the imprisonment, if made with the view or intention of petitioning the Court for the insolvent's discharge.

[S. C. '2 Gale, 242 ; G L. J. Ex. 51.]

Trover for certain cattle, goods, and chattels, the property of the said Win. Ashton. Plajas-1st, Not guilty ; 2ndly, That the said Wm Ashton was not possessed as of hisjown property of the cattle, goods, arid [192] chattels in the declaration mentioned, moflo et form;l ; and issue thereon. A; At the tri^l before Bollaud, B , at the last assizes for the county of Northampton, it Appeared that an action for money had and received had been brought against the insolvent by one Wright, which was tried at the Northampton Spring Assizes 1834, and was undefended, [t was proved also, that on the commission day of the assizes at which the above cause was to be tried, the insolvent gave a bill of sale of all his house\'a1hold furniture and effects to the present defendant, in satisfaction of a bona fide debt to the amount of 100l. The defendant sold the effects under the bill of sale for 571. 18s. On the day the bill of sale was given, the insolvent ran away from Northampton, but returned in March, 1835, when he went to prison, and petitioned to be discharged under the Insolvent Debtors' Act, and was ultimately discharged accordingly, and the plaintiff' was appointed his assignee. This action was brought to recover the value of the goods taken and sold under the bill of sale by the defendant,

2K.&W.193. BEOK.E t'. SMITH 725

the plaintiff' insisting that the bill of sale was fraudulent and voirl under the 32nd section of the 7th Geo. 4, c. 57, it being a voluntary conveyance, made with a view of petitioning for his discharge under the Insolvent Act. The learned Judge, however, was of opinion that the .'{2nd section applied to such assignments and transfers only as were made within three months before the commencement of the imprisonment, or during the continuance of the imprisonment, and that this bill of sale having been given more than a year before the imprisonment began, the act did not make it invalid. The plaintiff then went on to prove a case of fraud, independently of the provisions of the Insolvent Act, under the stat. of KHz.; but on the case being sub\'a1mitted to the jury, they found that the transaction was not fraudulent, and gave a verdict for the defendant. Humfrey, on a former day in this term, obtained [193] a rule to shew cause why there should not be a new trial, on the ground of mis\'a1direction. AAdams, Serjt., and Whateley, shewed cause. It is submitted that the learned Judge was right in his direction to the jury. The question depends upon the con\'a1struction to be put upon the 7 Greo. 4, c. 57, s. 32, which enacts, that if any prisoner, who shall file his petition for his discharge under the act, shall, before or after his imprisonment, being in insolvent circumstances, voluntarily convey his property to any creditor, every such conveyance shall be deemed, and is thereby declared, to be fraudulent, and void as against the provisional assignee ; provided always, that no such conveyance shall be so deemed fraudulent and void, unless made within three months before the commencement of such imprisonment, or with the view or inten\'a1tion by the party so conveying, of petitioning the said Court for his discharge from custody under that act. Now, the meaning of that section is, that the assignment shall not be deemed fraudulent and void, unless it be made within three months before the party goes to prison ; or, if he has previously gone to prison, then with the inten\'a1tion of petitioning for his discharge from custody. The intention of the act was to put a certain limit to the operation of that section, which is but reasonable. [Alderson, B. Suppose there were pregnant evidence that three months and one day before he went to prison, an insolvent made a voluntary conveyance of bis property, you would say it was not within the act, and the deed could not be impeached.] Certainly, that may be the consequence. The proviso is to he construed, reddendo singula singulis ; the assignment is to be void, whatever his intention was at the time of making it, if he goes to prison within three months, but not otherwise ; or if, being in prison, he makes the assignment with the view of petitioning for his discharge. One part of [194] the proviso is intended to apply to the case of a party before he goes to prison, but who goes to prison within three mouths after the assignment; the other to the case of a party being in prison, who makes the assignment with a view to petition for his discharge. The case was therefore properly left to the jury. AHurnfrey, VVaddington, and VV'hite, in support of the rule. The case of Wainierii/ht v. Miles (3 M. & Scott, 211), is a decision against the construction relied upon on the other side, There the sale of the insolvent's effects took place more than three months before the insolvent was arrested and went to prison, and the Court held, that it was a question for the jury whether the assignment was made with an inten\'a1tion of taking the benefit of the Insolvent Act. That question could not have arisen, unless the Court had thought that the 32nrl section applied to a case like the present. The object and intention of the legislature was to make void all voluntary conveyances by persons in insolvent circumstances, provided they give a fraudulent preference to a particular creditor; but that it shall not be necessary to adduce any evidence of the fraud, if the insolvent goes to prison within three months, in which case it is to be deemed ipso facto fraudulent and void; if it is beyond the period of three months, then it must be shewn that it was made with the view or intention of petitioning for his discharge. The object of the legislature was to favour the distribu\'a1tion of the insolvent's effects equally amongst all his creditors. Then, if the construc\'a1tion put at the trial was not right, there ought to be a new trial, as it ought to have been left to the jury to say, whether the insolvent executed this deed with the view or intention of petitioning for his discharge under1 the Insolvent Act. ACur. adv. vult. A[195] The judgment of the Court (ft) was now delivered by A(a) I'ai'ke, 13., Eolhuid, B., Aldersou, 13., and Gurney, B.

726 BECKE V. SMITH 2 M. &W. 196.

Aparke, B. The only question which remained for consideration, after the argu\'a1ment against the rule for a new trial in this case was, as to the true construction of the 32nd section of the 7 Geo. 4, c. 57. It occurred to my Brother Bolland on the trial, that the section applied to such assignments and transfers only as were made within three months before the commencement of the imprisonment, or during its continuance ; and the assignment in question having been made more than a year before the insolvent went to prison, he thought that this section could not render it void. The plaintiff is entitled to a new trial, if that view of the subject was incorrect; and upon consideration, we all agree that it was. AIt is a very useful rule,(ft) in the construction of a statute, to adhere to the ordinary meaning of the words used, and to the grammatical construction, unless that is at variance with the intention of the legislature, to be collected from the statute itself, or leads to any manifest absurdity or repugnance, in which case the language may be varied or modified, so as to avoid such inconvenience, but no further. ALet us adopt that rule in this case. The 3'2ud section enacts, "That, if any prisoner, who shall tile his or her petition for his or her discharge, under this act, shall, before or after his or her imprisonment, being in insolvent circumstances, voluntarily convey, assign, transfer, charge, deliver, or make over any estate, real or personal, security for money, bond, bill, note, money, property, goods or effects whatsoever, to any creditor or creditors, or to any person or persons in trust for, or to or for the use, benefit, or advantage of any creditor or creditors, every such con-[196]-veyance, assignment, transfer, charge, delivery, and making over, shall be deemed and is hereby declared to be fraudulent and void, as against the provisional or other assignee or assignees of such prisoner appointed under this act: provided always, that no such conveyance, assignment, transfer, charge, delivery, or making over, shall be so deemed fraudulent ami void, unless made within three months before the commencement of such imprisonment, or with the view or intention by the party so conveying, assigning, transferring, charging, delivering, or making over, of petitioning the said Court for liia or her discharge from custody under this act."

By the first part of the clause, every voluntary conveyance to a creditor, by one who afterwards petitions for his discharge, made either before or after his imprison-in em t, whilst he is in insolvent circumstances, is avoided. Then comes the proviso, by; way of qualification of the foregoing provision, which enacts, that no such convey\'a1ance shall be void, uziless made within three months before the commencement of the imprisonment, or, with a view of petitioning the Court for his discharge. If either of these circumstances occurs, the voluntary conveyance by an insolvent is rendered null; if made within the three months it is void; if made at any time, with a view of petitioning the Court, it is void, for there is not a word expressly to confine the last alternative within any limit of time : and though, at first sight, the words, " with a viejw of petitioning for his discharge," might strike the reader as applying to persons tha!n in custody, such is not necessarily their meaning. In reality, they are just as applicable to a person out of prison, as to one in prison. The construction contended for by the plaintiff is, therefore, according to the words of the clause; it is, besides, a very reasonable one. The effect is this. As voluntary preferences are usually given on the eve of the taking the benefit of the act, a time is fixed (three months) within which, [197] to prevent many questions, all voluntary conveyances to a creditor, made when the debtor is in insolvent circumstances, are avoided : before that time all such conveyances are avoided, where the actual intent to give a preference to a particular creditor is proved ; and thus, the same effect is given to the insolvent, as to the bankrupt law, with reference to all anterior1 transactions. AOn the other hand, in order to give to the clause the meaning contended for on the part of the defendant, the grammatical construction must be altered, by intro-duding some words for the purpose of limiting the operation of the latter alternative : ant. the clause: must be read as if it had been written thus, " Provided that no such ass:gnmeiit, if made before imprisonment, shall be void, unless made within three months beforq, &c., or if made after, unless made with a view or intention by the party conveying of petitioning the Court for his discharge." But if this were done, thig incongruity would arise, that a stronger case would lie required to avoid an assignment made after imprisonment than one made before. Besides, if this con-

(4) Per Burton, J., in Warburton v. Lowland, 1 Hudson & Brooke's Irish Reports, G48. A2 Bt &W. 198. BAKER V. BROWN 727

strucfcion were adopted, every assignment made more than three mouths before the commencement of the imprisonment would be valid, however clear the intention to give a preference might he ; aud thus the whole object of the act might be defeated by a fraudulent insolvent, who, after conveying all his property to favoured creditors, would only have to go out of the way for three months, and then take the benefit of the act, after which no one assignment of his property could be questioned on the ground of fraudulent preference. AIt appears to us, therefore, that the true construction of the clause is, that every voluntary assignment, made by one in insolvent circumstances, is void, whenever made with intention to take the benefit of the act. And this was the clear opinion of the Court of Common PIe;vs in the [198] case of I't'ainwright v. Miles (3 Moore & Scott, 211), though the point was not fully argued. It is true, that upon the plaintiff's view of the case, in order to give full effect to the intention of the legislature, and to embrace all cases of voluntary transfers, both before and after imprisonment, the language of the clause (not very accurately drawn) must in one respect be understood, not according to its strict sense : and the words " within three months before the commencement of the imprisonment," which, strictly construed, exclude the time of imprisonment, must be read so as to include it, and taken to mean " within a period commencing three mouths before the imprisonment;" otherwise one of the inconveniences above pointed out, as necessarily resulting from the defendant's construction, would follow, namely, that a conveyance after imprisonment, though voluntary, would be protected, unless made with a view and intention of petitioning. ATo obviate such an incongruity, common to both the constructions, according to the strict grammatical sense, the words must be thus slightly varied. AWe are of opinion, for these reasons, that the rule must be made absolute for a new trial, when the question to be submitted to the jury, with reference to this section, will be, whether the assignment was made by the insolvent, when in insolvent circum\'a1stances, voluntarily, and with the view and intention by him of petitioning the Insolvent Court for his discharge from custody. If all these circumstances concur, the plaintiff would be entitled to a verdict, but otherwise he would not.

Rule absolute.