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this sub-section in particular, the following language Occurs :
• There is no indication in any instance of anything being contemplated, except what may be properly described as general legislation ; such legislation as is well expressed by Mr. Justice Caron when he speaks of the general laws governing Faillite, bankruptcy and insolvency, all which are well known legal terins expressing systems of legislation with which the subjects of this country, and probably of most other civilized countries, are perfectly familiar. The words describe in their known legal sense provisions made by law for the administration of the estates of persons who may become bankrupt or insolvent, accordiny to rules con derinitions prescribeil by law, including of course the conditions on which that law is to be brought into operation, the manner in which it is to be brought into operation, and tiie effect of its operation."
The latter part of this extract supports what has been said in an earlier chapter (v) in reference to bankruptcy and insolvency being legal relations, the creation of which out of any given combination of circumstances, is alone in the power of the Dominion parliament. In the absence of any such legislation, it is difficult-in view of the scope attributed to sub-section 13 of section 92 (w), “property and civil rights in the province ”—to see on what ground provincial legislation, making provision for the distribution of a man's estate among his creditors, and for his discharre from liability upon his contractual obligations, can be impugned. In view, however, of the difference of opinion among the judges who have had to consider this question, this view, we need hardly say, is put forward with much diffidence.
In Crombie v. Jackson (x), that was held to be a valid provision, in the Insolvent Act in force at that date (1874), which obliged a person, making claim to any part of the property of an insolvent transferred to the possession of his
(1) See ante, p. 215.
(rc) See the notes to that sub-section. (.r) 31 U. ('. Q. B. 575.
assignee under the Act, to proceed, under the Act, by summary proceedings before a county judge. In our view, these cases involving enquiry as to the validity of individual sections of former Insovent Acts are not of much practical importance ; they would assist of course in the framing of a new Act; but the important cases are those in which provincial Acts or clauses of provincial Acts have been impugned on the ground that their provisions are in the nature of insolvency legislation. At the same time, in the face of the divergence of view which exists upon the subject, we should hardly be justified in overlooking the former class of cases.
In Peak v. Shields (y), was involved the question of the validity of th: 136th section of the Insolvent Act of 1875, which provide l that a debtor, afterwards becoming an insolvent under the Act, who had fraudulently obtaine l goods on creclit knowing himself unable to meet his engagements, might be subjected to imprisonment for two years unless the debt and costs were sooner paid. The opinions delivered were very conflicting, some of the judges expressing the view that the clause was legislation regarding procedure in civil matters, others that it was properly described as insolvency legi lation, and others again that it might be upheld as criminal legislation. The broader question involved in the case, namely, the power of a colonial legislature to legislate respecting wrongs committed abroad, was treated of in chapter IX., ante, p. 189.
In Re Eldorado Union Store Company (2), it was held in Nova Scotia, and again in Shoolbred v. Clark (a), it was unanimously held by the Supreme Court of Canada, that the Dominion Winding-up Acts are insolvency legislation, and are properly made applicable to companies incorporated under provincial Acts. In Allen v. Hanson (b), it was held
(y) 8 S. C. R. 579; 6 0. A. R. 639 ; 31 U. C. C. P. 112.
that these Winding-up Acts also apply to companies incorporated under Imperial Acts, the power in such case being limited, of course, to dealing with the realization and distribution of the assets in Canada. See the earlier case of Merchants Bank v. Gillespie (c), in which it was held that the Winding-up Act then in force, did not, upon the proper interpretation of it, apply to such an Imperial Company.
In Clarkson v. Ontario Bank (il, and other cases reported with it, the validity of certain legislation by the Ontario legislature (R. S. 0. c. 124—“ an Act respecting assignments and preferences by insolvent persons ") -- was in question. The court was equally divided. The opinions of Hagarty, C.J.O., and Osler, J.A., who held the Act ultra rives, proceed upon the broad ground thus expressed by the Chief Justice :
• It is to all intents a law for the Judicial administration of an insolvent's estate by means unknown to the common law, anil conferring rights on an assignee in addition to, and beyond all rights assigned to him by the debtor."
On the other hand, Burton and Patterson, JJ.A., who upheld its validity, support their opinions by pointing out that the various clauses, examined in detail, deal with matters within the legislative competence of a provincial legislature under sub-section 13 of section 92. property and civil rights. In view of this difference of opinion it can be easily understood, therefore, that the view have attempted to express in an earlier chapter is advanced with much mistrust. In all these
there will have to be a pronouncement by the Judicial Committee of the Privy Council or an amendment to the B. N. A. Act, before the position of impecunious debtors is satisfactorily settled.
In Clarkson v. Ontario Bank, Burton and Patterson, JJ.A., both expressed some doubt as to section 9 of the Act then in question, which section did not itself come im
(c) 10 S.C. R. 312.
(d) 15 0. A. R. 106.
mediately in question in the case. It provided that an assignment, under the Act, for the general benefit of creditors, should take precedence of all judgments and executions not completely executed by payment : and afterwards, in Union Bank v. Neville (c), it was held by Chief Justice Sir Thomas Galt, to be ultra vires, as being insolvency legislation.
“ The question now is whether or not the assignee is entitled to take these goods out of the possession of the sheriff. It is manifest that the assignor himself has no such authority, and it appears to me that, that being the case, he could confer no such right on his assignee. By the words of the statute itself, it is plain that the provisions are to have effect only in cases of insolvent debtors or persons on the verge of insolvency; consequently, to attribute to an assignment under the statute a power to remove goods in the hands of the sheriff under execution against an insolvent, must, in my opinion, be considered as an Act relating to “ bankruptcy and insolvency.”
To the same effect—from the other standpoint--we may note the case of Kinney v. Dulman (f), decided by the Nova Scotia Supreme Court, upholding the validity of section 59 of the Insolvent Act of 1869, which provided that a juilgment not completely executed, should as against an assignment under that Act, create no lien or privilege upon the property of the insolvent.
In The Queen v. Chandler (g), it was held by the Supreme Court of New Brunswick, that those provisions, in what are commonly known as Indigent Debtors Acts, providing for the examination of a confined debtor and for his discharge from imprisonment upon proof of indigence, and of the absence of fraudulent dealings with his property, cannot be passed by provincial legislatures. This case arose in 1868, and the judgment of the court was founded upon views, as to the wide scope of this sub-section, which cannot in view of the later authorities be now consided
(c) 21 O. R. 152.
(f) 2 Russ. & Ches. 19; 2 Cart. 412. (9) 2 Cart. 421; 1 Hannay 556.
a correct exposition of the law. The words “ bankruptcy and insolvency ” were interpreted as covering all legislation as to impecunious debtors even entirely apart from any system of bankruptcy and insolvency legislation, and, in this view, the Act in question was held to be an insolvent Act (1). In another aspect, however, the case may well be referred to, as being one of the earliest decisions emphatically enunciating the doctrine that, under the B. N. A. Act, it necessarily devolves upon courts of justice to inquire into the validity of post-Confederation Canadian legislation. The fact that the Governor-General had not disallowed the provincial Act in question, was decisively held by the court to be immaterial, upon an inquiry as to its legal validity.
Upon the question as to the scope of this sub-section 21, The Queen v. Chandler has never been overruled, but, in subsequent cases in New Brunswick, the wide view upon which the decision in the early case proceeded has evidently and necessarily been modified. Prior to the Union, the New Brunswick legislature had passed an Act extending the gaol limits-an Act affecting confined debtors. This Act was not to come into operation until April 1st, 1868, but before that date, and after Confederation, it was repealed by a subsequent enactment. The New Brunswick Supreme Court intimated that there was nothing in the point that the Act was one relating to insolvency, and that therefore the provincial legislature was within its powers in repealing it (i). And, again, in Armstrong v. McCutchin (j), the Supreme Court of New Brunswick held that an Act of the legislature of that province abolishing imprisonment for debt was not ultra vires, as respects a party not shown to be a trader, subject to the Dominion Insolvent Act. Ritchie C.J., says:
(h) See the remarks of Mr. Justice Burton in Clarkson v. Ontario Bank, ubi supra; and see also notes to sec. 92, s.-s. 14, post.
(i) McAlmon v. Pine, 2 Cart. 487 ; 2 Pug 44. (j) 2 Cart. 494 ; 2 Pug. 381.