An Interesting Point in Bankruptey At H: M. Supreme Court last Friday, His Honour Judge Skinner gave judgement on a motion by the Hongkong & Shanghai Banking Corporation and the Banque de VIndo Chine, who claimed to secured creditors as regards certain goods, or the proceeds of. the sale thereof, stored in the godown of Arthur Reeves Burtenshaw, deceased, at Hankow, at the date of his death.
Mr. A. C. Holborrow! and Mr. Langley Smith appeared on behalf of the banks, Mr. K. E. Newman represented the trustee, and Mr. S. LIH. McKean an unsecured creditor.
His Lordship said: This is a motion in bankruptcy transferred from the Provincial Court at Han. kow by, order to this court for argument and decision. It arises in the matter of the estate of one Burtenshaw deceased, which is being wound up as a bankrupt estate. The claimants are the Hongkong & Shanghai Bank and the Banque de I'Indo Chine, and, therefore, there are two motions; this judgement covers them both. The.motion was served on the trustee in the bankruptcy, and he asks for a declaration that the claimants are to be ranked og secured creditors in respect of certain goods found in the bankrupt's godowns. The practice followed in this matter seems to be the same as that adopted in the matter of one Bavier, heard and decided in this court in 1910. The trustee, having doubts on the claims, made by the bank, declined to admit or reject their proof and left them to move the Court for a declaration of their rights. think this is an inconvenient practice: and its inconvenience and possible injustice was shown in the course of the proceedings before me: for on the last argument, one unsecured creditor applied to be heard on the matter, and his application was resisted by the present chiments. I think the trustee, if he had doubts, ought to have rejected the claim and left the Bank to appeal against his decision; on that appeal, he would have doubtless taken the view of the unsecured creditors who were vitally interested in the matter. If he had no doubts, he should have admitted the claim, which would still have left the unsecured creditors or some of them the right to appeal.
As it is, the position put to me ras that there was no power on this motion for the court to hear the unsecured creditors at all: though it is clear that, after the Banks, they are the persons really interested. The case of Ex parte Kearsley in ro Genese 17.Q.B.D.1)_ shot that a dissentient minority of unsecured creditors has the power to bring their views before the Court, though the trustee may have acted in ac-
Text read from the printed page and cleaned; old type leaves the occasional error.