Before this statute, the commissioners could not expunge a proof without the consent of the parties (m): the only remedy was by petition to the Lord Chancellor. Under this clause the commissioners may expunge the petitioning creditor's debt (n), but the commissioners have authority by this section, only where the objection is, that the whole or part of the debt proved is not justly due from the bankrupt. But the debt may be due, and still the creditor may have no right to prove under the fiat; as, for instance, where the creditor has taken the bankrupt in execution for it after the issuing of the fiat, (see ante, p. 156), or the like; in which cases the only remedy is by petition to the court. So, if a creditor prove under the fiat for a debt, and conceal the fact of his having securities of the bankrupt for it, this is a ground for applying to have the debt expunged (o); the application must be by petition to the court, and not on the petition of the bankrupt (p), · unless he can shew that the decision would affect his interest in the surplus or his allowance (q). Fraud is a good ground for expunging a debt (r); and the objection in such a case may be raised either before the commissioners, or by petition. So also a debt may be satisfied by circumstances, after proof made; as where the creditor, after proving his debt under the fiat, and before the bankrupt had obtained his certificate, died, leaving the bankrupt a legacy, it was, on petition, ordered that the proof be reduced by the amount of the legacy, and the executor to refund the dividend received by him on the excess of the sum proved (s); or where bills on other parties, held by the creditor as a collateral security for the debts proved, are paid (t). And as the Statute of Limitations is no bar in cases of fraud, it will not avail as an objection to the expunging a proof and refunding dividends fraudulently received (u). But after a lapse of seven years, the court refused to order dividends to be refunded, where they were received under a mistaken view of the law (x). The commissioners cannot expunge a proof because the creditor hold a security for the debt, which he did not disclose on proving; for the proof is an election to abandon his lien on the property, which thereby becomes a part of the bankrupt's estate, and can be recovered by the assignee (y); and the Court of Review will not expunge a proof on the ground of the creditor having instituted process for the recovery of the debt in a foreign country, in the absence of evidence of the nature of the process, though it will stay the payment of the dividends upon the proof (z). A mere claim cannot be expunged (a); and if a creditor makes an unsuccessful (m) Er p. Graham, 1 Rose, 456. (n) Ex p. Neale, 2 Glyn & J., 308: and see p. 70, ante. (0) Er p. Hossack, Buck, 390. (p) Ex p. Pownall, 2 Mon. & A. 707. (q) Ex p. Pitchforth, 3 Dea. 487; 1 Mon. & A. 96. (r) See Er p. Cawthorne, 2 Rose, 186; 15 Ves. 260. (8) Er p. Man, Mon. & M'A. 210. 4 Dea. & C. 442. (u) Er p. Bolton, 1 Mon. & A. 60; 8 Dea. & C. 556. (r) Er p. Soper, 2 Mon. & A. 55; 4 Dea. & C. 569. (y) Er p. Ro'fe, 2 Dea. 421; 3 Mon. & A. 305. (2) Er p. Cotesworth, 1 Dea. & C. 281; Mon. & B. 92. (a) Exp. Dobson, Mon. & A. 670. application to expunge a debt under the above section of the statute, he may be ordered to pay the expenses incurred by the assignees for the commissioners' and solicitors' fees, and the use of rooms for meetings, &c. (b). (As to the jurisdiction of the Court of Review in expunging debts, see further, Ex p. Baldwin, p. 22, ante; and see p. 110, ante). SECTION 8. Choice and Appointment of Assignees. 1. Official Assignees. Appointment.] By 1 & 2 Will. 4, c. 56. s. 22, it is enacted, that a number of persons not exceeding thirty, being merchants, brokers, or accountants, or persons who are or have been engaged in trade in the cities of London or Westminster or the parts adjacent, shall be chosen by the Lord Chancellor to act as official assignees in all bankruptcies prosecuted in the said Court of Bankruptcy, one of which said official assignees shall in all cases be an assignee of each bankrupt's estate and effects, together with the assignee or assignees to be chosen by the creditors; such official assignee to give security, to be subject to such rules, to be selected for such estate, and to act in such manner as the said chief and other judges, with the consent of the Lord Chancellor, shall from time to time direct; and all the personal estate and effects, and the rents and profits of the real estate, and the proceeds of sale of all the estate and effects, real and personal, of the bankrupt, shall in every case be possessed and received by such official assignee alone, save where it shall be otherwise directed by the said Court of Bankruptcy or any judge or commissioner thereof: provided always, that until assignees shall be chosen by the creditors of each bankrupt, such official assignee so to be appointed to act with the assignees to be chosen by the creditors, shall be enabled to act, and shall be deemed to be, to all intents and purposes whatsoever, a sole assignee of each bankrupt's estates and effects. As to commissions of bankrupt subsisting at the time the statute 1 & 2 Will. 4, c. 56, came into operation, and which, by sect. 39, are directed to be removed into the Court of Bankruptcy, it is, by sect. 40, enacted, that it shall be lawful for each commissioner of the said court, who shall thenceforth act in such commission, at his discretion, to appoint some one of the aforesaid official assignees to act with the existing assignees, if any, under such com missions, and to direct the existing assignees to pay and deliver over to such official assignees all monies, books, pa (b) Ex p. Kirkcaldy, 4 Dea. & C. 52; 1 Mon. & A. 642. pers, and effects whatsoever, in their possession or custody as such assignees and all the real and personal estate of the bankrupt under such commission shall, immediately on such appointment, vest in such official assignee, jointly with the existing assignees, if any, in like manner as if the proceedings in the said bankruptcy had originally been commenced by virtue of this act, without prejudice to any action or suit commenced, or any contract entered into by the existing assignees at the time of the passing of this act. And by General Order, Jan. 12, 1832, the official assignees are to be divided equally among the six commissioners and each commissioner shall appoint his class of assignees to act in rotation under the several bankruptcies prosecuted before him; such rotation to be settled by ballot, according to such regulations as aforesaid, except in special cases to be referred by the commissioner adjudicating therein to the other commissioners of his Subdivision Court, or the Court of Review: and the same rules for the appointment of official assignees shall be followed as to existing commissions; but it is recommended that no official assignee be appointed under commissions already opened, unless there appears good cause for so doing. The commissioner has a discretion to appoint or not to appoint an official assignee in the case of a commission issued before the stat. 1 & 2 Will. 4, c. 56, came into operation, and removed into the Court of Bankruptcy under that statute (c). The Court of Review has a controlling power over the commissioner in the appointment of an official assignee, when he does not exercise a sound discretion in the appointment (d); and where the majority of the creditors objected to the appointment of an official assignee, under an old commission, the court suspended the order (e). (See further as to official assignees, sect. 18, post). Death or Removal of.] By 1 & 2 Will. 4, c. 56, s. 24, it is enacted, that it shall be lawful for the Lord Chancellor, from time to time, as any vacancy may occur in the said before-mentioned number of official assignees, to appoint some other such person as aforesaid to fill any vacancy so occurring; and in case of the death or removal of any official assignee who shall have been appointed to act in any bankruptcy, it shall be lawful for the said Court of Bankruptcy, subject to any rules to be made by virtue of this act, to appoint another official assignee of the number hereby prescribed to act in the same bankruptcy in the place of the assignee who shall have so become dead or been removed. And by 1 & 2 Will. 4, c. 56, s. 36, (see p. 165, post), the Court of Review has jurisdiction to remove an official assignee, and without appointing another (f). An official assignee will be allowed to retire from his office by petition to the Court of Review, upon his (e) Ex p. Ellis, Mon. & B. 116; 1 Dea. & C. 209. (d) Ex p. Bramston, 2 Dea. & C. 375. (e) Er p. Parker, 1 Dea. & C. 530. (f) Ex p. Ellis, Mon. & B. 116; 1 Dea. & C. 209. undertaking to pass his accounts from time to time as the several estates to which he is official assignee are wound up (g). 2. Creditor's Assignees. Who may be chosen.] An assignee of a bankrupt is a mere trustee for the creditors. It is not necessary that he himself should be a creditor, although he usually is so; and therefore it has been determined that an assignee, if he had not proved under the commission, may commence or prosecute any action or suit against the bankrupt, for the recovery of the debt due to him, his acceptance of the office of assignee not being deemed an election to come in under the commission (i). Where the act of bankruptcy on which the fiat is founded is the execution of a composition deed, a party to that deed, we have seen, cannot be a petitioning creditor (ante, p. 69); but he may be chosen assignee (k). The bankrupt himself, however, cannot be assignee, whether he have obtained his certificate or not (1); nor the solicitor to the fiat (m); nor should any person be appointed, who has an interest adverse to the creditors. As the creditors, however, in their discretion, may choose whom they will, the legislature have thought it necessary to vest a controlling power in this respect in the court, who, upon petition, may order the assignee, if ineligible, to be removed, and a new assignee appointed, as hereinafter mentioned; and in one case, where a person, who had an interest adverse to a large party of the creditors, was chosen assignee, the Chancellor exercised this control, by appointing an agent or inspector to act as assignee on their behalf(n). Besides which, by stat. 6 Geo. 4, c. 16, s. 61, the commissioners shall have power to reject any person, chosen by the creditors as assignee, who shall appear to then unfit to be such assignee: and upon such rejection another assignee or assignees shall be chosen. (Vide infra). But the rejection of the assignee by the commissioners is not final: an appeal lies from their decision (o). Usually two assignees, sometimes three or more, sometimes only one, are chosen, in proportion to the magnitude of the bankrupt's concerns. When, where, how, and by whom chosen.] By stat. 6 Geo. 4, c. 16, s. 61, at the second meeting appointed by the commissioners as aforesaid, (see ante, p. 93), or any adjournment thereof, assignees (g) Er p. Goldsmid, 3 Dea. 309; 3 Mon. & A. 623. (i) Er p. Ward, 1 Atk. 153. (k) Jackson v. Irvine, 2 Camp. 48: Tappenden v. Burgess, 4 East, 330. (1) Er p. Jackson, 2 Rose, 221; 1 Cowp. 286. (m) Er p. Rice, Mont. 259. (n) Ex p. Mil's, 2 Rose, 68; 3 V. & B. 130: and see Er p. De Tastet, 1 Rose, 324; 1 T. & B. 280: Er p. Martell, i Rose, 325: Er p. Basarro, 1 Rose, 266: Er p. Simpson, 2 Rose, 337. (0) Ex p. Candy, Mon. & M‘A. 197. of the bankrupt's estate and effects shall be chosen; and all creditors who have proved debts under the commission, to the amount of ten pounds and upwards, shall be entitled to vote in such choice; and also any person authorized by letter of attorney from any such creditor or creditors, upon proof of the execution thereof, either by affidavit sworn before a master in Chancery, ordinary or extraordinary, or by oath before the commissioners viva voce, and in case of creditors residing out of England, by oath before a magistrate where the party shall be residing, duly attested by a notary public, British minister or consul; and the choice shall be made by the major part in value of the creditors so entitled to vote: provided that the commissioners shall have power to reject any person so chosen who shall appear to them unfit to be such assignee as aforesaid; and upon such rejection, a new choice of another assignee or assignees shall be made as aforesaid. And by 1 & 2 Will. 4, c. 56, s. 20, authorizing the commissioner who shall make any adjudication to appoint two or more public meetings, instead of the three meetings directed by the 6 Geo. 4, c. 16, "the choice of assignees shall take place at the first of such two meetings." The choice of assignees must therefore be made at the first public meeting, or at an adjournment thereof; and when the commissioners were absent at the time appointed for the first meeting, which consequently was not held, the commissioners being functi officio, an order of court was considered necessary to appoint another time for the first meeting (p); and the commissioners have the power to adjourn the choice of the assignees, if they think proper, even although all the creditors who are present concur in the election (q). But where they adjourned it for the purpose of allowing time to investigate a proof tendered to them, and it appeared that the debt tendered, even if proved, was not of an amount sufficient to affect the choice of assignees already made, the court, upon petition, ordered the commissioners to execute the assignment to the assignees who had been chosen (r). In country fiats the major part of the commissioners must be present at the meeting at which the assignees are chosen ; and where one commissioner alone was present at the meeting, the choice of assignees was set aside, even although the assignment was regularly executed by three commissioners ($). The choice is to be made by the major part in value of the creditors who have proved debts under the fiat to the amount of £10 or upwards, and who are either present at the meeting, or have deputed others by letters of attorney to vote for them. (Vide supra, and see the form of the letter of attorney, ii. p. 53; and of the affidavit of execution, ii. p. 53). Even the bankrupt himself may vote, if he have been allowed to prove a debt of £10 or upwards under the fiat (t); and a creditor on a voluntary bond, (p) Er p. Hall, 1 Dea. 536. (q) Ex p. Garland, 2 Rose, 361; Mad. 318. (r) Ex p. Woolley, 1 Glyn & J. 366. (8) Ex p. Moore, 1 Glyn & J. 190. & J. 151. |