061-NLR-NLR-V-26-BAKER-v.-VAIRAMUTTU-CHETTY.pdf
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1925.Present,: Garvin J. and Javewardeiie A.J.
BAKER i. VAIRAMUTTU CHETTY.
183—D. 0. {Inty.) Colombo, 3,364.
Insolvency—Pergonal earnings—Rights of assignee—Ordina nee No. 7 of1S&3, s, 70.
An insolvent's salary vests in the assignee, except to the extentnecessary for the maintenance of himself, his wife, and his family.It would be open to a vCoart to direct the insolvent- to pay intoCourt or to the assignee so much of the salary as is not requiredfor the purpose of such maintenance.
A
PPEAL by an insolvent from an order of the District Judge ofColombo directing him to pay into Court for the benefit of
his creditors a sum of Rs. 175 out of* his monthly salary of Rs. 375,which he earned as an assistant in a business firm. It was contendedfor- the insolvent that his salary does not vest in the assignee, andthat he could not be called upon to bring any portion of it to Cpurt.
Canjimanathan, for insolvent, appellant.
James Joseph t for creditor, 'respondent-.
January 23, 1925. Jayewardenb A.J.—
This ig an appeal by an insolvent against an order directing himto pay into Court for the benefit of his creditors a sum of Rs. 175out of his monthly salary of Rs. 375, which he earns as an assistantin a Fort firm. It is contended for the appellant that an insolvent’ssalary does not vest in the assignee, and that he cannot be calledupon to bring any portion of it into Court. He relies on section 70of the Insolvent Ordinance, 1853, the material part of which isas follows:—“ When any person shall have been adjudged aninsolvent all his personal estate and effects, present and future,wheresoever the same may be found or known, and all propertywhich he may purchase, or which may revert, descend, be devisedor bequeathed, or come to him before he shall have obtained hiscertificate, and all debts due or to be due to him, wheresoever thesame may be found or known, and the property, right, and interestin such debts, shall become absolutely vested in the assignees forthe time being, for the benefit of the creditors of the insolvent, byvirtue of their appointment .. .. ”
No doubt section 70 does not expressly refer to the 44 salary ” or“‘ wages *’ of an insolvent, but the words are wide enough to coverthe 41 salary M or 44 income " earned by an insolvent. But it has
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been held under the corresponding section 141 of the EnglishBankruptcy Act of 1849, on which our Ordinance is based, thatmoney earned by a bankrupt by his personal exertions does notvest in the asignee, if such money is required for the support andmaintenance of himself, his wife, and his family (Chippendale v.Tomlinson,44 1 2 3 * Hesse v. StevensonWilliams v. Chambers9).
In re Roberts* Lindley L.J. discussed the right of an assigneeto the earnings of a bankrupt, and said—
“ The Bankruptcy Act of 1883, like its predecessors, excepts abankrupt's .tools and contemplates "the acquisition offuture property by a bankrupt, and he must live to usehis tools and acquire such property. The present Act,like previous Bankruptcy Acts, must be construed so asto enable him to do so; and the language of section 44,clear and express as it is, must not, therefore, be taken* soliterally as to deprive the bankrupt of those fruits of hispersonal exertions* which are necessary to enable him to live.But, on the other hand, the necessity is the limit of theexception. This is in entire accordance with moderndecisions. See Mercer v. Vans Colina, 5 In re Oruydon *;Wadling v. Olxphant,7 Emdcn v. Carte* In re Royers;**9
and in Affleck v. Hammond,™ Kennedy L.J., dealing with the samepoint, said—
44 By section 44 of the Bankruptcy Act, 1883, the trustee inbankruptcy has a general right to intervene. But on thatgeneral right of intervention there has been grafted anexceptioninfavour of the personal“earningsof the
bankrupt,sofar as those earnings, arenecessaryfor his
support, andthis exception has beenrecognizedfor at
least a hundred years. It is true that the generality ofsection 44 is emphasized by the fact that particular things,are particularly excluded from its operation; but it isnevertheless clear that the Act does contemplate thepossibility of the acquirement by an undischargedbankruptoffuture property. In Wace on Bankruptcy,
p. 208, the exception is thus stated: * To the generalityof the trustee's right to intervene and -claim propertyacquired by the bankrupt before his discharge, as divisibleamongst his creditors, his personal earnings, to the extent,necessarytosupport himself and hiswife andfamily,
form an exception The Act, like its predecessors,.
1(1785) 4 Douglas 318.
2(1803) 3 B. ds P. 565 (577).
3(1846) 10 Q. B. 337.
1 (1900) 1 Q. B. 122 (128).
5 67 L. J. ((?. B.) 424.
8 (1896) 1 Q;B. 417.
71 Q. B.t>. 145.
17 G.h. D. 768.
(1894) IQ. B. 425.
(1912) 3 K. B. 162 (172).
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Jatbwaa-DBNB A.J-
Baker
Vairamuttu
Chetiy
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JaybWAA-DBHfi A.J.
BtMfv.
Vtt&ramuUu,
CheUy
excepts his tools and contemplates the acquisition bv himof future property, and he must live to use such tools andacquire such property; it must therefore be construed,like previous Acts, so as to enable him to do so; and,clear and express as the language is, it is not to be taken soliterally as to deprive him of the fruits of his personalexertions, which are necessary to ^enable him to live.
“ If any authority for that statement were required, In re Roberts(supra) is sufficient. It is no new law, but the exception wasthere recognized, as it has been recognized for a century. ”
The reasons given for engrafting this exception that the Actexcludes an insolvent's tools and contemplates the acquisition byhim of future property is inapplicable under our local law, for toolsare not excepted from the property vesting in an assignee. Toolswere not so excepted by the English Act of 1849, but by an amend-ing Act, 17 and IS Viet., chap. 110, section 25, a bankrupt wasallowed to “ retain for the use of himself and his family under thename of 1 excepted articles, ’ such articles of household furnitureand tools and implements of trade and other necessaries as he shallspecify and select, not exceeding in the whole the value of £20. **This amendment has not been enacted locally. This I do not thinkcan make any difference, for the exception had been in existencelong before the Acts of ,1849 and 1854 were passed, and it wasaccepted as applicable in the construction of Statutes 1 and 2tVietchap. 110, section 37, which contained words identicalwith those in section 141 of the English Act of 1849 and in section 70of our Insolvents Ordinance (see Williams v. Chambers {supra), andas the learned Judge remarked in Affleck v. Hammond (supra), it hasbeen in existence/for over a century.
The rule laid down in these cases, therefore, applies in the construc-tion of section 141 of the repealed English Bankruptcy Act of 1849,and must be applied in the construction of the correspondingsection of the local Act (section 70). Personal earnings of aninsolvent—that is his “ salary " or “ income " except to the extentnecessary for the support of himself, his wife, and family—wouldtherefore vest in the assignee. In the English Bankruptcy Act of1888 express provision has been made for a case of this kind, andsection 58, sub-section (2), enacts that “ When a bankrupt is in thereceipt of a. salary or income, …. the Court, on the applicationof the trustee, shall from time to time make such order as it thinksjust, for the payment of the salary, income, . . . . or of any*part thereof, to the trustee to be applied by him in such manner as.the Court inay direct.
In view of what I hold is the law, it would be open to a Courtto direct the insolvent to pay into Court or to the assignee so muchof his salary or income as is not required for the maintenance of
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himself, his wife, and family. The order of the learned District-Judge is, therefore, right on principle. But the question remains,whether, considering the fact that the appellant is an Europeanand a married man, a sum of Bs. 200 per month is sufficient- tomaintain himself and his wife. I am inclined to think that this ishardly sufficient for the support of two persons of the position in- lifeof the insolvent and his wife.
I would therefore direct him to pay into Court the sum of Bs. 125a month, leaving Bs. 250 for the maintenance of himself and his wife.I make no order as to costs.
Garvix J.—I agree.
Varied.
tm.
JavbwabvobniAJ.
Baker v♦Vairamutti*CheUy