salt v cooper

8/3/2019 Salt v Cooper

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Court of Appeal

Chancery Division

21 December 1880

21 December 1880

[1880 S. 1184.]

(1880-81) L.R. 16 Ch. D. 544

James , Cotton , and Lush , L. JJ.

Jessel , M.R.

1880 Dec. 18, 21

1880 Dec. 4

PracticeActionMotionAppointing Receiver after Final JudgmentWhether NewAction necessaryCause or Matter pending Judicature Act, 1873, s. 24 Rulesof Court, 1875, Order XLII. BankruptcyExecution CreditorEquitable

ExecutionReceiver Bankruptcy Act, 1869(32 & 33 Vict. c. 71), s. 95, subs. 2;

s. 125, subs. 5 .

Held, by the Master of the Rolls, that so long as the final judgment in an actionremains unsatisfied, the action is a cause or matter pending within the meaningof sect. 24, sub-sect. 7, of the Judicature Act, 1873 , and that consequently, in an

action by a creditor against a debtor in which the Plaintiff has obtained finaljudgment, the Court has power, under that subsection, in order to satisfy thejudgment, to grant equitable execution against the Defendant by appointing areceiver upon motion in that action, although the writ may not have been indorsedwith a claim for a receiver; it being unnecessary in such case to bring anotheraction for the purpose.

S. recovered judgment for a debt against C. and issued an elegit. The *545 sheriff

returned that the debtor had no lands which he could seize. C. had leaseholdproperty which was subject to mortgages. S. thereupon obtained the appointmentof a receiver of the rents of the leasehold property without prejudice to the rights ofthe prior incumbrancers. On the same day a petition for adjudication in bankruptcywas filed against C. , and a receiver was appointed in bankruptcy a few minutesbefore the appointment of the receiver in the action. C. afterwards filed a petitionfor liquidation, the same receiver was appointed in the liquidation as had beenappointed in the bankruptcy, and resolutions were passed for liquidation of his


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affairs by arrangement. S. had not, until some day after the appointment of hisreceiver, any notice that C. had committed an act of bankruptcy, or that anyproceedings in bankruptcy were pending against him:

Held, by the Master of the Rolls and by the Court of Appeal, that as, at the timewhen S. obtained equitable execution by the appointment of a receiver, theproperty was legally though not actually in the possession of the receiver appointed

by the Court of Bankruptcy, the equitable execution was ineffectual, and was notprotected by sect. 95, sub-sect. 2, of the Bankruptcy Act, 1869 .

THIS was an action commenced by Saltand others against Cooperin the Queen'sBench Division for goods sold and delivered, and on the 2nd of September, 1880,

judgment was signed for 165 14s., and costs. On the same day a writofelegitwas issued, and lodged with the sheriff ofYorkshire . It appeared thatall Cooper's property was in mortgage, the mortgagees being in possession, andthe sheriff returned that there were no lands, goods, or chattels which he could

seize.

The Plaintiffs, on the 14th of September, obtained from Mr. Justice Stephen , sittingin Chambers, an order appointingCorbidge to be a receiver of the rents and profitsofCooper's leasehold property, such appointment to be without prejudice to therights of any prior incumbrancers, and if any prior incumbrancer was in possession,then without prejudice to such possession. The writ in the action did not claim a

receiver.

On the same 14th of September a petition for adjudication in bankruptcyagainst Cooperwas filed in the county Court at Huddersfieldby a creditor,grounded on an act of bankruptcy committed on the 13th of September, and on the

same day Carterwas appointed receiver and manager by an order of the CountyCourt.

The mortgagees shortly afterwards sold the property, and a surplus remained intheir hands after payment of the mortgage *546 debts. Previously to the sale, andbefore the commencement of the liquidation proceedings, both receivers had given

notice of their appointments to the mortgagees.

On the 24th of September Cooperfiled a petition for liquidation, and on the nextday Carterwas appointed receiver in the liquidation.

On the 18th of October resolutions for liquidation by arrangement were passed, andtrustees were appointed. The bankruptcy petition was not further proceeded with.The Plaintiffs had no notice until the 29th of September of the bankruptcy petitionor of the liquidation proceedings, or ofCooper's having committed any act ofbankruptcy.

On the 23rd of October an order was made transferring the action to the ChanceryDivision, and attaching it to the Court of the Master of the Rolls, and on the 29th of


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October an order was made adding the trustees in liquidation as parties to the

proceedings.

On the 3rd of November the Plaintiffs gave notice of motion that the orderappointing Corbidge receiver might, if and so far as necessary, be extended, so asto enable him to receive all surplus moneys in the hands of the mortgagees arisingfrom the sale of the Defendant's leasehold estates, after payment of all moneys due

on their securities, and that the receiver might be directed out of such moneys topay to the Plaintiffs their debt and costs, and to pay the balance to the trustees

under the liquidation.

The motion was heard before the Master of the Rolls on the 4th of December, 1880.

In the course of the argument on the motion before the Master of the Rolls, adiscussion arose as to which of the two receivers was appointed first on the 14th ofSeptember. It was proved by affidavit that the order appointing the bankruptcyreceiver was made by the County Court at a quarter to four in the afternoon, and it

was ultimately admitted by the Plaintiffs' counsel that Mr. Justice Stephen's orderappointing the Plaintiffs' receiver was made not earlier than four o'clock.

Ince , Q.C., and W. Fooks , for the Plaintiffs, contended that the appointment oftheir receiver operated as a good delivery in execution: *547 Rules of Court, 1875,Order XLII.; Anglo-Italian Bank v. Davies 1 ; Hatton v. Haywood 2 ; Ex parte

Evans 3 .

Macnaghten , Q.C., and Oswald, for the trustees in liquidation:

We submit that the appointment of the Plaintiffs' receiver was irregular, for a

receiver cannot be appointed after final judgment, and here the Plaintiffs did notask for a receiver by their writ. In Colebourne v. Colebourne 4 Vice-Chancellor Hallheld that the writ should be indorsed with a claim for a receiverwhere that is a substantial object of the action: though the point seems to havebeen considered an open one in Anglo-Italian Bank v. Davies . There is no instanceof the old Court of Chancery having made an order in a suit for payment of money,

and then having, in the same suit, appointed a receiver. To obtain a receiver it wasnecessary to institute a new suit; and we submit that that practice has not beenaltered by the Judicature Acts. Moreover, the receiver here was appointed of the

rents and profits only: the Plaintiffs cannot therefore now ask that he may receivethe proceeds of sale.

But there is another objectionand a fatal oneto the Plaintiffs' motion. It nowappears that the bankruptcy receiver was appointed before the Plaintiffs' receiver:the title of the trustees in liquidation is the title of the receiver in bankruptcy, and

relates back to the date of the act of bankruptcy.

[They were stopped by the Court.]

Ince , in reply:


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I submit that the title of the receiver in bankruptcy ceased to exist when theresolutions for liquidation were passed; so that the title of our receiver thenintervened. The liquidation proceedings were distinct from the bankruptcyproceedings, and commenced at the date of the appointment of trustees:Bankruptcy Act, 1869, s. 125, sub-s. 5 . As we had no notice of the bankruptcy atthe time our receiver was appointed, our equitable execution was valid under sect.95, sub-sect. 2 .

Macnaghten :The title of the receiver in bankruptcy did not necessarily cease, forunder the Bankruptcy Rules, 1870, rule 260 , *548 the Court may, at any timeafter the presentation of a petition, allow any proceedings, whether in progress atthe filing of the petition, or subsequently commenced, to proceed upon such terms

as the Court may think just.

JESSEL, M.R.:

The present motion raises points of great importance, and, I must say, also of verygreat difficulty.

The first question is, whether, in an action brought in the High Court of Justice,where judgment has been obtained against a debtor and it appears that the debtoris possessed of property, either freehold or leaseholdhere it is leaseholdwhich,by reason of the existence of a prior mortgage vesting the legal estate in someprior mortgagee, cannot be taken by the sheriff under a writ ofelegit, the Court orthe Division of the Court in which the action is brought can give what is calledequitable execution, that is, can grant a receiver, on motion only in the originalaction; or whether it is absolutely necessary and indispensable that before makinga motion for a receiver, there should be another piece of paper issued called a writ,

with the same plaintiff and the same defendant, but indorsed with a claim for thatequitable execution. That is the question I have to decide. It is by no means sotrivial as it looks when so stated, because we must not forget that in our law informer times, and not so very long ago, formality produced enormous effects onmen's rights. For instance, I need not mention in this Court the magical effect of aseal as regards the operation of writings on various interesting occasions. So that itby no means follows that this is an unimportant question, although, if decided oneway, the only result would be that practitioners in future would expend thenecessary 5s. for the purpose and issue a second writ: and, indeed, until thequestion is decided by the Court of Appeal, I should advise practitioners to do so,

although my own opinion is that it is not necessary.

The question really depends, in my opinion, upon the construction to be put on theJudicature Act of 1873 ; and in putting a construction upon that Act one must haveregard to the purview of the Act, and especially to the expressed intention of theLegislature in passing it. I must, first of all, dispose of an argument *549 whichhas been addressed to me by counsel as to the application and effect of Order XLIIof the Rules of Court, 1875. In the first place, I accede so far to that argument thatI think Order XLII. does not affect this question at all. I think this Order meant toprescribe how execution may be issued by the parties. Though the Order does not


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say so in so many words, you will see at once, on looking at it, that execution maybe enforced in any of the modes in which the judgment might have been enforcedat the time of the passing of the Act. Then you find what those modes ofenforcement arewrit of possession, writ of sequestration, writ of attachment orcommittal: then, under rule 6, writs of execution are to include fieri facias, elegit,and all subsequent writs which may be issued for giving effect thereto; and thenthe rule goes on to say any such process, and so on, evidently referring, in my

opinion, to the writs.

Then we are thrown back upon the Act itself, and we must recollect, first of all,what the main object of the Act was. It is stated very plainly that the main object ofthe Act was to assimilate the transaction of Equity business and Common Lawbusiness by different Courts of Judicature. It has been sometimes inaccuratelycalled the fusion of Law and Equity; but it was not any fusion, or anything of thekind; it was the vesting in one tribunal the administration of Law and Equity inevery cause, action, or dispute which should come before that tribunal. That wasthe meaning of the Act. Then, as to that very small number of cases in which there

is an actual conflict, it was decided that in all cases where the rules of Equity andLaw were in conflict the rules of Equity should prevail. That was to be the mode ofadministering the combined jurisdiction, and that was the meaning of the Act. Tocarry that out, the Legislature did not create a new jurisdiction, but simplytransferred the old jurisdictions of the Courts of Law and Equity to the new tribunal,and then gave directions to the new tribunal as to the mode in which it should

administer the combined jurisdictions.

That being the position of the tribunal, let us see what the directions were whichwere given to it. The new tribunal consisted of two divisions, the High Court ofJusticethe Court of first instanceand the Court of Appeal. Now let us look, first

of all, at sect. 24 , *550 which is the main section as to the combined jurisdiction.It says that, In every civil cause or matter commenced in the High Court ofJustice, law and equity shall be administered by the High Court of Justice and theCourt of Appeal respectively, according to the rules following: and so forth. Then itsays (sub-sect. 1) that if a plaintiff or petitioner wants equitable relief, the saidCourts respectively, and every Judge thereof, shall give to such plaintiff orpetitioner such and the same relief as ought to have been given by the Court ofChancery in a suit or proceeding for the like purpose properly instituted before thepassing of this Act. Then the 4th sub-section says the Courts shall take notice ofall equitable estates, titles, rights, and so on; then the 6th says that the Courtsshall give effect to legal rights; and then comes the 7th sub-section, which appears

to me to have a very important bearing on the present question, and therefore I

will read it. The High Court of Justice and the Court of Appeal respectively, in theexercise of the jurisdiction vested in them by this Act in every cause or matterpending before them respectively, shall have power to grant, and shall grant, eitherabsolutely or on such reasonable terms and conditions as to them shall seem just,all such remedies whatsoever as any of the parties thereto may appear to beentitled to in respect of any and every legal or equitable claim properly broughtforward by them respectively in such cause or matter; so that, as far as possible,all matters so in controversy between the said parties respectively may be


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completely and finally determined, and all multiplicity of legal proceedingsconcerning any of such matters avoided. Those are very large terms. The clauseclearly applies to any remedy whatever; for it says the Court shall grant all suchremedies whatsoever. The claim must be brought forward in the cause, and mustrelate to the matter in dispute in the cause; but beyond that I see nothing toqualify the clear indication of intention that multiplicity of legal proceedings is to beavoided. I may mention also that it says distinctly, as any of the parties theretomay appear to be entitled to in respect of any and every legal or equitable claimproperly brought forward by them respectively in the cause or matter. It is notmerely the original claim; it is any claim that may be brought forward in thematter; that is to say, *551 any claim as regards the cause or matter pending. Acause is still pending even though there has been final judgment given, and theCourt has very large powers in dealing with a judgment until it is fully satisfied. Itmay stay proceedings on the judgment, either wholly or partially, and the cause isstill pending, therefore, for this purpose, as it appears to me, and must beconsidered as pending, although there may have been final judgment given in theaction, provided that judgment has not been satisfied. And, indeed, an

interpretation has been put by the Court on the word proceedings in sub-sect. 5of the same section with regard to a stay of proceedings in any cause or matterpending, namely, that that must, of course, be construed to mean a stay ofexecution on a judgment, although that judgment might not be satisfied; so thatthe party must apply in the cause or matter pending, and cannot bring a new actionfor the purpose. I think, therefore, that the words of the 7th sub-section are large

enough to include the case before me.

The case before me is simply this. It is an action for a money demand, in which theplaintiff asks a Court of Justice to compel the defendant, by means of legal process,to pay what is due to him. That is the meaning of the action. The plaintiff comes to

the Court for no other purpose than to ask the Court to use that constraint whichthe law can impose upon the defendant to compel payment to the plaintiff of hismoney demand. The question in dispute in such an action may sometimes be theamount due, but it more often is the mode of obtaining payment. That being so,the Court gives judgment against the defendant, by which it declares andascertains the amount due, and orders the defendant to pay it. The defendant

disobeys the order of the Court, and then the Court is asked to compel him to pay;and the only mode which, as a general rule, the law now recognises of compellinghim to pay, is by taking away his property, realizing it, and applying the proceedsin payment of the plaintiff's demand. I leave out of consideration the exceptionalcase of attachment, because, as a general rule, that is not the mode necessary tobe adopted. The mode I have stated of compelling payment, we call execution; it is

the obtaining in some shape or other, by legal process, possession of thedefendant's lands or goods, selling *552 them, paying the consequent expenses,and out of the proceeds paying the demand. This mode of enforcing paymentseems to me to be plainly a proceeding in the cause or matter; and the claimbrought forward by the plaintiff that he may be paid the amount of his demand outof the proceeds of the goods or lands of his debtor, when the possession of or titleto those lands or goods is disputed, is certainly a claim brought forwardand Ishould say properly brought forwardin the cause or matter. Then there were


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various modes of attaching the lands or goods of the defendant known to the lawand within the jurisdiction of the courts, which jurisdiction was amalgamated by theJudicature Act and made exerciseable by any single Court. One of the modes wasby writ offieri facias : another mode was by writ ofelegit: a third mode was by theappointment of a receiver by the Court of Equity, when the other modes provedineffectual by reason of the imperfection of the statutes which authorized the sheriffto deal with the property of the debtor. This mode of proceeding by theappointment of a receiver was called equitable execution. It was a mere mode ofdoing that which the plaintiff asks the Court in every action to do, namely, torealize the debtor's property so as to produce the sum demanded. Prior to theJudicature Act , the Courts of Equity, before granting equitable execution, requiredto be satisfied of two things, first, that the Plaintiff in the action had tried all hecould to get satisfaction at law; and then that the debtor was possessed of thatparticular equitable interest which could not be attached at law. As a rule, yourright to recover a money demand could only be fully recognised in a Court of Law.Most money demands were only cognizable there; and therefore, as a rule, whenyou had a mere money demand, you were compelled to bring an action in a Court

of Common Law to recover it; and then, when you had got your judgment, youwere compelled to bring a new actionthen called a suit in Equityby bill toenforce the judgment. Now that appears to me to be the very imperfection whichthe Judicature Act was intended to remedy: you were not to be obliged to go fromone Court to another upon such a simple matter as the enforcement of a judgment,butto quote the words of the 7th sub-section of the 24th sectionthe Court is togrant *553 all such remedies as the parties may be entitled to in the matterpending, so that, as far as possible, all matters in controversy between the partiesmay be completely and finally determined, and all multiplicity of legal proceedingsconcerning any of such matters avoided.

The very object of transferring the jurisdiction to one Court was that it might doeverything without the necessity of going to another Court; and that being so,where is the necessity of going to another Court, when you find that the Act itselfnot only prevents another Court interfering in the action after judgment, but drivesyou to apply to the Court in which the original action was brought, even though theground of the application may be a subject of equity? Before the Judicature Act , if

there was an equity which could only be brought before a Court of Equity, you couldfile a bill to restrain judgment, and that might have been done even after judgmentrecovered; but all that has been put an end to, and you must now go to the sameCourt to deal with the judgment. Upon the same principle you ought to go to thesame Court to deal with its own judgment when you are not staying it, but seeking

to carry it out and enforce it.

Upon the whole, I think that I should be deciding against what appears to me to bethe plain view of the Act of Parliament were I to decide that the issuing of anotherwrit was essential in order to obtain the full effect of a judgment of the Court which

originally pronounced it.

Passing from that, I come now to another question, which is one of somesingularity. The creditors in the action issued their writ ofelegit, and they could get


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nothing by it, because the land in question was vested, as to the legal estate, in themortgagee. Thereupon they applied to Mr. Justice Stephen in Chambers, sitting asa Judge of the Queen's Bench Divisionin which the action was broughtfor areceiver; the application being made upon an affidavit of facts. There can be nodoubt that, before the Judicature Act , if the Plaintiffs had filed a bill stating thosefacts, they would have got their receiver; nor is it suggested that, except for thisceremony of issuing a writ between the same persons and asking for a receiver,there was anything that was wanting. But they only got this receiver about, but notearlier *554 than, four o'clock on the afternoon of the 14th of September; and it isproved by affidavit that on the very same day, at a quarter to four o'clock,the HuddersfieldCounty Court, which had jurisdiction over the matter, had madean order granting a receiver and manager; so that that order was quite completeabout a quarter of an hour before the order of Mr. Justice Stephen was made, andthe debtor was liable to be committed, if he interfered with the receiver appointedunder that order, he having committed an act of bankruptcy on the previous day,the 13th of September; and therefore there was ample jurisdiction in the CountyCourt ofHuddersfieldto grant the order appointing this receiver. What, then, was

the effect of the receivership so created by the County Court? It appears to me itgave that receiver a legal right against everybody except the mortgagees, whowere in actual possession. If Mr. Justice Stephen had been made aware, st fouro'clock on that day, that a receiver had been appointed at a quarter to four on thesame day by the County Court ofHuddersfield, that Court having jurisdiction tomake the order, he would have been bound to refuse, and would have refused, tomake the order he did: he could not have made an order for a receiver to interferewith the receiver of the Court of Bankruptcy: the order would not have had anyeffect whatever. A receiver was sometimes appointed by the Court of Chancery,and I suppose may still be appointed by the Chancery Division, not to act untilsome other receiver, who had been appointed in some other proceeding, was

discharged. That might perhaps have been done in this case, and that would stillhave been equitable execution in the way of seizing the property. Still nothing ofthe kind was done, and Mr. Justice Stephen's order was properly made on theinformation before him, because it saved the rights of the prior incumbrancers.That being so, if the bankruptcy proceedings had gone on, there could, in myopinion, have been no question at all. The bankruptcy receiver was in possession,and properly in possession, before the appointment of a receiver in the action; andit is impossible, therefore, that the receiver in the action could have got possessionunder Mr. Justice Stephen's order, or that it could have amounted to an equitableexecution against the receiver in bankruptcy.

But what occurred was this: the bankruptcy went on up to a *555 certain point,

but on the 24th of September the bankruptcy proceedings were turned into aliquidation. I may say here that it appears in evidencethough I do not thinkanything material turns upon itthat the receiver of the Plaintiffs gave notice to themortgagees a few days after his appointment, but before the 24th of September,and that the mortgagees afterwards sold the property and out of the proceeds paidthemselves. They have a surplus, and the contest before me is as to that surplus. Itis the fact that neither of the receivers got any rents. Then, on the 25th ofSeptember, the bankruptcy proceedings having been turned into proceedings for


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liquidation by arrangement, the same manthough I do not think anything turnsupon thatis made receiver in the liquidation as was receiver in the bankruptcy.The trustees are appointed, and the proceedings for liquidation by arrangement are

completed, so that the bankruptcy proceedings have come to an end.

It is suggested on the part of the Plaintiffs in the action that the effect of thoseliquidation proceedings was to destroy the appointment of the receiver in the

bankruptcy, so far as that receiver would intercept the rights of the Plaintiffs, and itis said that that was equivalent to a discontinuance of the bankruptcy proceedingsand a discharge of the receiver ab initio . In order to try that question, one mustascertain for whom the bankruptcy receiver would have received under the existingcircumstances. The bankruptcy receiver was not appointed until the 14th ofSeptember. There was an act of bankruptcy committed by the debtor on the 13th ofSeptember, and the title of the trustee under the liquidation proceedings thereforerelated back to the 13th of September, and he would consequently be entitled totake from the bankruptcy receiver anything he received, or might have received,from and after that date. Can it be possibly said that the jurisdiction in bankruptcy

is so absurd that, when a receiver has been appointed in the proceedings inbankruptcy to protect the property of the debtor for the creditors, and thoseproceedings are turned into liquidation proceedings giving a title to the trustees tothe very property co protected, that is to operate, not as a discharge of the receiverfrom the time the trustees were appointedas it doesbut as a discharge ofthat*556 receiver ab initio , so that the property which he was appointed topreserve shall not pass to the creditors whose title was intended to be protectedand maintained by that very appointment? Independently of the rule in bankruptcywhich says that the Court may adopt the bankruptcy proceedingsand of course itmayI think that the very facts themselves shew an adoption. The moment thereceiver is discharged he has to pass his accounts to the Court which appointed

him, and that assumes that he is to pay the balance to the person to whom itbelongs. If he had received the money from the mortgagees under the notice tothem, it would have belonged to the trustees in the liquidation: he would havepassed his accounts in the bankruptcy, and would have paid over the balance tothem. Can it be said that by the mere fact that the sale did not take place tillsubsequently the rights of the parties changed, and that the right of the receiver in

bankruptcy therefore ceased? I should be casting ridicule upon the procedure inbankruptcy if I were to so decide. I think, therefore, it must be held that thereceivership in bankruptcy was still a good receivership until the receiver wasdischarged, and that all the property of which he took actual or legal possession, orsuch possession as he could obtain as he did by the simple notice to themortgagees to pay, would be received by him and held by him for the benefit of the

person entitled to those proceedsin this case the trustees. Consequently thetrustees must be held to be entitled to the surplus moneys in question.

The Plaintiffs appealed. The appeal came on for hearing on the 18th of December.

Winslow, Q.C., and Fooks , for the Appellants:


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The appointment of a receiver on the application of the Plaintiffs was a goodequitable delivery in execution: Hatton v. Haywood 5 ; Anglo-Italian Bank v.Davies 6 ; Ex parte Evans 7 . Now, before delivery in execution there must havebeen a seizure in fact or in law There is, therefore, a seizure in law bythe *557 appointment of a receiver. Under an extent, there is a seizure in law bythe finding of the jury. Atkinson on Sheriffs 8 . Under sect. 95, sub-sect. 2, of theBankruptcy Act, 1868 , our equitable seizure, therefore, is good, the Plaintiffs nothaving had any notice of a prior act of bankruptcy, and the Plaintiffs are entitled to

the benefit of sect. 12 , and to have such an order made as they ask.

[JAMES, L.J.:In Chancery, when a receiver had been appointed, though he wasnot actually in possession, a third person could not interfere with the property. Howcould you take in execution property which was in the hands of the Court of

Bankruptcy?

COTTON, L.J.:I do not see why your receiver is to take precedence over the

bankruptcy receiver, whose appointment was prior in time.]

Macnaghten , Q.C., and Oswald, contr ;, were not called upon.

JAMES, L.J.:

I am of opinion that the decision of the Master of the Rolls was right. The questionis whether a receiver appointed on the application of an execution creditor canlawfully seize property of which the Court of Bankruptcy has taken possession bythe appointment of a receiver. The main object of appointing a receiver inbankruptcy is to protect the assets from execution creditors. The 95th section ofthe Bankruptcy Act, 1869, sub-sect. 2 , when it speaks of an execution executed by

seizure before the date of adjudication, must be taken as speaking only of anexecution lawfully executed by lawful seizure; and a seizure by the sheriff after theCourt of Bankruptcy has taken possession of the property by appointing a receiver

is not a lawful seizure.

COTTON, L.J.:

The execution creditors, on the 14th of September, got an order for a receiver ofthe rents and profits of the debtor's leasehold property, which was subject tomortgages. This, if there had been nothing more in the case, would have been agood *558 equitable execution, but at an earlier hour on the same day the Court of

Bankruptcy had appointed a receiver. The object of appointing such a receiver is tokeep out execution creditors, and his holding the property prevented the executioncreditors from getting what they would otherwise have got. I can see no reason forpostponing the receiver appointed by the Court of Bankruptcy to the receiverappointed at the instance of the execution creditor. The receiver of the Court ofBankruptcy had legal though not actual possession from the moment of hisappointment, and the property being thus in the hands of the Court of Bankruptcy,the subsequent equitable execution was ineffectual. I am of opinion that thedecision is right.


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LUSH, L.J.:

I am of the same opinion. The object of appointing a receiver in bankruptcy is toprotect the property for the benefit of the creditors in case the proceedings shouldterminate in bankruptcy. The second clause of sect. 95 of the Act must be read inconnection with the other parts of the Act, and must be taken to proceed on theassumption that the Court of Bankruptcy has not got possession of the property.

Here the property was already in the hands of the Court, and the equitableexecution cannot affect it.

Representation

y Solicitors: Stevens & Co. ; Layton & Jaques .

1. 9 Ch. D. 275 .

2. Law Rep. 9 Ch. 229 .

3. 13 Ch. D. 252 .

4. 1 Ch. D. 690 .

5. Law Rep. 9 Ch. 229 .

6. 9 Ch. D. 275 .

7. 13 Ch. D. 252 .

8. 5th Ed. p. 251.

2012 Sweet & Maxwell

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