In Re Bonacina Le Brasseur v Bonacina - Thomson Reuters

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(1876-77) L.R. 2 C.P.D. 1 Page 21876 WL 18594 (CPD), (1876) 25 W.R. 253(Cite as: (1876-77) LR 2 C.P.D. 1)parties. It is admitted that prior to 6 Geo. 4, c. 16, adebt barred by bankruptcy might be revived by anexpress promise. That Act (section 131) providedexpressly that no such promise should be of anyavail unless in writing. The subsequent Acts haveall contained express provisions by which it wasenacted that such promises should not revive thedebt. The present Act is entirely silent with regardto the effect of such promises, and contains no suchprovisions as have been inserted in the previousActs. The only possible conclusion from this is thatthe legislature intended to revert to what was thewell-settled law long before 6 Geo. 4, c. 16. Nolegitimate inference to the contrary can be drawnfrom the trifling alteration of the language of the49th section from that used in the sections ofprevious Acts relating to the discharge of thebankrupt. It is incredible that the legislature, havingbefore them the series of particular sectionsexpressly relating to this subject in previous Acts,should, if they intended to re-enact the same law,have omitted any particular reference to the subject,and relied on such trifling alterations ofphraseology as the use of the word "release" in the49th section, instead of "discharge." In previousActs the terms "discharged" and "released" havebeen used indiscriminately, as meaning the samething with regard to bankrupts. Even if the debt isreleased, and so extinguished, it is contended thatthe substantial meaning of the decisions withregard to the revival of a debt by an expresspromise is that the fact of the debt having onceexisted, and never been paid, is a sufficient moralobligation to form a good consideration for apromise to pay it. The distinction for this purposebetween a debt which is extinguished and a debtthe remedy for *4 which merely is barred, is anarrow technicality, and is not the real ground ofthe decisions.[LORD COLERIDGE, C.J. Is not this, within theterms of s. 49, a proceeding "in respect of" the debtfrom which the debtor is discharged?]It is submitted not. The cause of action is not theold debt, but the breach of the new promise.Viewing the section in the light of the previoussections of a similar character, it cannot have beenintended that the words "in respect of" shouldintroduce any change of the law. They are onlyequivalent to "for." [He cited Flight v. Reed [FN3];Hawkes v. Saunders [FN4]: Trueman v. Fenton[FN5]; Rimini v. Van Praagh [FN6]; Wennall v.Adney. [FN7]]FN3 1 H. & C. 703; 32 L. J. (Ex.) 265.FN4 1 Cowp. 289.FN5 2 Cowp. 544.FN6 Law Rep. 8 Q. B. 1.FN7 3 B. & P. 247, 249.Ridley, in reply.LORD COLERIDGE, C.J.The reply raises two points. The first is, that theplaintiffs had no notice of the liquidationproceedings, and the debt was not inserted in thelist of creditors, and consequently that, as againstthe plaintiffs, the order of discharge has no effect.The answer suggested to this point is, that the127th section of the Bankruptcy Act, 1869,provides that the registration by the registrar of aspecial resolution of the creditors on the occasionof a liquidation by arrangement shall, in theabsence of fraud, be conclusive evidence that suchresolution was duly passed and all the requisitionsof the Act in respect of such resolution compliedwith. One of such requisitions is the production ofa list of creditors. Primâ facie, the words of thissection seem irresistible. Our attention, however,has been called by the plaintiffs' counsel to theprovisions of the 126th section of the Act, whichapplies to compositions. Among those provisionsthere is no doubt an express enactment that theprovisions of the composition shall only be bindingon the creditors whose names appear in thestatement of the debtor. But there are no suchwords in the section with regard to liquidation byarrangement. The probable reason for thisdifference has already been suggested. It may wellhave been that, when the legislature *5 was makingan enactment by which persons were to becompelled by the vote of a majority to accept ofless than they would otherwise have been entitledto, it was thought, in the case of an enactment sostringent, especial provision should be made forsecuring due notice to the persons so to be affected.Liquidation proceedings, on the other hand, aresubstantially similar to those in bankruptcy, and thecreditors under such proceedings get neither morenor less than creditors in bankruptcy.Consequently, it may well have been thought thatno other provisions were necessary in the case ofsuch proceedings for the protection of the creditors'rights than the ordinary provisions relating tobankruptcy. I am, therefore, of opinion that, in theCopr. © West 2004 No Claim to Orig. Govt. Works
(1876-77) L.R. 2 C.P.D. 1 Page 31876 WL 18594 (CPD), (1876) 25 W.R. 253(Cite as: (1876-77) LR 2 C.P.D. 1)absence of fraud, the 127th section prevents suchfacts as are stated in this reply from being anyanswer to the defence that the debtor has beendischarged under the proceedings for liquidation.The second point raised by the reply is, that therewas a subsequent promise to pay the debt. Ourdecision as to this must depend on the 49th sectionof the Bankruptcy Act, 1869. It is not denied thatthis was a debt from which, under that section, theorder of discharge released the bankrupt. Thequestion is, whether the subsequent promise couldrevive it. The argument of the plaintiffs' counselwas this. From Lord Mansfield's time down toBaron Parke's it was held that where there was alegal right the remedy for which was barred,though the right continued to exist, as in the case ofdebts the remedy for which was barred bybankruptcy or the Statute of Limitations, the moralobligation arising from such existing right formed asufficient consideration to support a promise, andso the debt might be revived by a subsequentpromise of the debtor to pay it. I do not stay toexamine the reasoning upon which such decisionswere based, it is sufficient that they exist, and Ihave no wish to cast any doubt on them. It is saidthat this being the state of the law prior to 6 Geo. 4,c. 16, express provision has been made with regardto this kind of debt in all the enactments since thenuntil the Act of 1869. In the Act 6 Geo. 4, c. 16, s.131, it was provided that no such promise shouldbe of any avail to revive the debt, unless it was inwriting. In subsequent statutes there have beenprovisions that even a promise in writing should beinsufficient to revive *6 the debt. That state ofthings continued up to 32 & 33 Vict. c. 71, thepresent Act. At the time when that Act was passed,the former Acts with regard to bankruptcy wererepealed by another Act, viz., 32 & 33 Vict. c. 83,which was passed on the same day. The 49thsection of the Bankruptcy Act, 1869, provides thatthe order of discharge shall release the bankruptfrom all debts provable under the bankruptcy, withcertain exceptions, and "in any proceedings thatmay be instituted against a bankrupt who hasobtained an order of discharge in respect of anydebt from which he is released by such order, thebankrupt may plead that the cause of actionoccurred before his discharge, and may give thisact and the special matter in evidence."There is, however, no provision in the Act similarto those contained in the former Acts with respectto the revival of debts barred by bankruptcy. Theargument is, that because the Act is silent on thismatter, therefore the debtor is remitted to theposition in which he stood before 6 Geo. 4, c. 16,and the whole policy of the bankruptcy law sincethat Act has been absolutely reversed. That wouldbe a startling conclusion. It must be observed,however, that the words of the present Act withregard to the effect of the order of discharge are notsimilar to those of the prior Acts.The words of the 126th section of 6 Geo. 4, c. 16,are that "any bankrupt who shall, after hiscertificate shall have been allowed, be arrested orhave any action brought against him for any debt,claim, or demand hereby made provable under thecommission against such bankrupt, shall bedischarged on common bail and may plead ingeneral that the cause of action occurred before hebecame bankrupt and may give this Act and thespecial matter in evidence." I will not go throughthe corresponding sections of the subsequent Acts,because the language, though not identical, issubstantially similar. The effect of them is, thatwhere an action is brought for a debt provableunder the bankruptcy, the defendant may plead thatthe cause of action accrued before bankruptcy.These are not the terms of the 49th section. Thewords of that section are "any proceedings inrespect of any debt from which he is released bysuch order." The plaintiffs' counsel was driven tosay that this was not only not an action *7 broughtfor the old debt, but not a proceeding in respect ofthe old debt. But the claim is in respect of work andlabour done in 1873, before the bankruptcyproceedings. The defence is to that claim, and thereply is to that defence. It is in vain to say that thisis not a proceeding in respect of a debt provableunder the liquidation, and which was discharged bythe order of discharge.The matter is somewhat bare of authority. But wehave been referred to a judgment of Bacon, V.C.,than whom there is no greater living authority onthe subject of bankruptcy, in the case of Jones v.Phelps. [FN8] It is true that the case differedsomewhat from this, inasmuch as it turned on thequestion whether the law previous to the presentAct was applicable or the present law, but the Vice-Chancellor seems to have decided on the widerground that, under the Act of 1869, a promise topay a debt barred by bankruptcy was nudumpactum, as there was no consideration for it. Suchauthority, therefore, as there is is in favour of theview we take.FN8 20 W. R. 92.The present Act in its general scope wasobviously intended to make bankruptcyproceedings more completely effect the object ofwinding up a man's previous liabilities and givinghim an altogether fresh start. I am not prepared toCopr. © West 2004 No Claim to Orig. Govt. Works
Page 1 and 2: [1912] 2 Ch. 394 Page 11912 WL 1741
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In Re Bonacina Le Brasseur v Bonacina - Thomson Reuters

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