In Re Bonacina Le Brasseur v Bonacina - Thomson Reuters

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[1912] 2 Ch. 394 Page 41912 WL 17417 (CA)(Cite as: [1912] 2 Ch. 394)the special provisions of the Act of 1849, which arevery different to s. 30, sub-s. 3, of the Act of 1883.There was a new contract here enforceableaccording to Italian law. It was made in Italy inItalian form and language, both the parties to itwere Italians, and it was intended to be performedin Italy. It is not contrary to public morals or publicpolicy and will therefore be enforced in thiscountry.FN21 3 H. & N. 581.has no application, and further that the moralobligation to pay the debt is sufficient to found alegal obligation if a document such as the "privatascrittura" has been executed. It seems to me,therefore, that the claimant is in precisely the sameposition in this country as he would have been ifthere had been an English contract of the same datewith a new and valuable consideration. In short, theclaimant relies upon a new and enforceablecontract entered into after the discharge andtherefore not in any way subject to the provisionsof s. 30, sub-s. 3.Cur. adv. vult.FN22 4 Ex. D. 26.July 2. COZENS-HARDY M.R.This is an appeal from a decision of Eve J., whohas disallowed a claim in an administration action.The testator and the claimant were both Italians.The testator, who was resident in England, wasadjudicated bankrupt in 1897 and obtained hisdischarge in 1901. The claimant had made variousadvances to the testator prior to the discharge. Noproof was made by the claimant in the bankruptcy,for the best possible reason, that he was not awareof the bankruptcy. On October 15, 1906, adocument was executed in Italy by which thetestator acknowledged his debt to the claimant asbeing 43,959 lire, which sum he undertook to paywithin five years with interest. This document,which is called "privata scrittura," was to bedeemed to be a public instrument. It was contendedon behalf of the executor that by virtue of s. 30,sub-s. 3, of the Bankruptcy Act, 1883, noproceedings could be taken in England in respect ofthis debt, and Eve J. has assented to this view.It is important to observe that the order ofdischarge only released the bankrupt from debtsprovable in bankruptcy and that sub-s. 3 has nooperation except in respect of a debt from whichthe bankrupt was released by the order ofdischarge: as to which see s. 37, sub-s. 3. It hasbeen held by a Divisional Court in Jakeman v.Cook [FN22], and by Vaughan Williams J. *400 inIn re Aylmer [FN23], that a promise after dischargeto pay a debt barred by the discharge is perfectlygood if supported by a new and valuableconsideration. If therefore in 1906 an Englishcontract for value had been executed, I think theproof must plainly have been admitted. But the"privata scrittura" is a document subject to Italianlaw, and the evidence adduced by Italian lawyersseems to me to have established that according tothe law of Italy the English doctrine ofconsideration being necessary to support a contractFN23 1 Manson, 391; 70 L. T. 244.I was for some time pressed by the decision inKidson v. Turner [FN24], but that case reallyturned upon the language of s. 204 of theBankruptcy Act, 1849, which differs materiallyfrom s. 30 of the present Act. The words there werethat no bankrupt after his certificate should beliable to pay any debt from which he will havebeen discharged by virtue of his certificate "uponany contract, promise, or agreement made after theissuing of the fiat or filing of the petition foradjudication," and it was there held that a bondgiven by a bankrupt in consideration of a debt fromwhich he had been discharged was, within themeaning of that section, a contract or agreementafter the issuing of the fiat or filing of the petitionfor adjudication. It seems to me that that case isreally no authority upon the present case. Nor do Ithink that the decision of the Divisional Court inHeather & Son v. Webb [FN25] has anyapplication. In that case there was a contractwithout any consideration to pay a debt barred bythe bankruptcy. In the present case there is a validenforceable new contract subsequent to thedischarge.FN24 3 H. & N. 581 *401 .FN25 2 C. P. D. 1.In the view which I take, it is not necessary toconsider many of the interesting and importantquestions discussed by Mr. Lawrence in his ableargument. For these reasons I think that thedecision of Eve J. must be reversed, and the claimmust be allowed and the Master's certificate variedaccordingly.Copr. © West 2004 No Claim to Orig. Govt. Works
[1912] 2 Ch. 394 Page 51912 WL 17417 (CA)(Cite as: [1912] 2 Ch. 394)FN28 4 Ex. D. 26.FARWELL L.J.I am of the same opinion. If an action werebrought here on the agreement of October 15,1906, as on a stated account it would fail, for theitems on which the stated account is founded wouldat once disclose the want of any consideration tosupport it. The moral duty which in LordMansfield's time sufficed is no longer available,because the Act of 1883 releases the bankrupt fromall debts provable in bankruptcy and enables him toplead his discharge as a bar to any proceedings "inrespect of any debt from which he is released bythe order." The necessity of going back to the olddebt as a consideration brings the action within thewords "in respect of," &c. The term "cause ofaction" includes cases where so much of the causeof action as constitutes the consideration for thepromise has occurred before the discharge: perLindley J. in Heather & Son v. Webb. [FN26] Butwhile the Act destroys the consideration formerlyavailable, it does not make it illegal, still lessimmoral, to pay, or agree to pay, the released debt.If therefore the bankrupt after discharge enters intoa new contract for valuable consideration he maybind himself to pay the amount of the old debt.Honourable men pay their just debts if they can,whether protected by a release in bankruptcy ornot, just as honourable men pay bets fairly lostalthough irrecoverable at law. The distinctionbetween a contract which is merely void and onewhich is immoral is well settled. The first is a merenullity, innocuous for good or ill. The latter taintsand destroys the whole of the new contract, as Ihave tried to explain in Hyams v. Stuart King.[FN27] If therefore a bankrupt who has got hisdischarge wishes to deal with his former tradesmenand finds that they refuse to supply him at ordinaryprices unless and until he pays or secures thebalance of their debts proved in the bankruptcy, itis competent to them to enter into a valid *402contract to secure their object: Jakeman v. Cook[FN28] and In re Aylmer. [FN29] All that isrequisite to such a bargain is that it should be madeafter discharge bona fide for value. Whether theseal on a bond would be sufficient consideration Iwill not stay to consider. The case of Kidson v.Turner [FN30] can be dealt with when it arises.FN26 2 C. P. D. 9.FN27 [1908] 2 K. B. 696, 726, 727.FN29 1 Manson, 391; 70 L. T. 244.FN30 3 H. & N. 581.Now in the present case the new contract,although made long after discharge, has in Englishlaw no consideration to support it: but it is anItalian contract made in Italy between Italians andis governed by Italian law, and the expert evidenceconvinces me that it is a contract valid andenforceable in Italy. If so, the only bar to itsvalidity here disappears. No question of procedurearises; a contract which is void (not being immoral)here may be perfectly good in a foreign country,and, if so, can be enforced here, unless there issome rule of procedure that forbids the action: seeMoulis v. Owen. [FN31] But there is no such ruleunless the discharge can be effectually pleaded as arelease: and it cannot be so pleaded, because thecontract is subsequent to the discharge, and thequestion of consideration goes, not to theprocedure, but to the validity of the contract, andthat is a matter of foreign law.FN31 [1907] 1 K. B. 746.KENNEDY L.J.It appears to me, after considering the excellentarguments of the learned counsel on both sides, thatour decision in this case must depend upon thecharacter and effect of the "privata scrittura" as alegal document according to the law of Italy. If theclaim put forward by the appellant ought to beregarded simply as a claim to obtain the payment ofa debt which under s. 37 of the Bankruptcy Act,1883, constituted a debt provable in the bankruptcyof the debtor, and therefore a debt from whichunder s. 30, sub-s. 2, the debtor was released by hisorder of discharge, it is clear that s. 30, sub-s. 3,enables the respondent, the debtor's executor, tomake a successful defence to the claim, and that thejudgment of Eve J., disallowing the claim, isperfectly correct. The objection to the maintenanceof *403 such a claim which is created by s. 30, subs.3, is a matter of legal procedure, and in all suchmatters the lex fori prevails. But--and it is here thatI feel myself obliged to part company from thelearned judge in the Court below--ought theappellant's claim to be treated simply as a claim inrespect of a debt which was provable in thebankruptcy of the deceased debtor? It appears toCopr. © West 2004 No Claim to Orig. Govt. Works
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In Re Bonacina Le Brasseur v Bonacina - Thomson Reuters

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