001-NLR-NLR-V-02-In-the-Matter-of-the-Insolvency-of-JOHN-GREGORY-DE-KROES.pdf
THE
NEW LAW REPORTS OE CEYLON.Insolvency—How assignee should deal with assets.
The assignee of an insolvent estate can deal with the assets of-theestate only in the way authorized by the Ordinance. He is notentitled to pick and choose the creditors to whom he will pay awaythe assets. He must declare a dividend, and, with the leave ofCourt, pay the creditors in accordance with such dividend.
npBLE assignee of the estate of the abovenamed insolvent received
4L two sums of Bs. 2,365 and Rs. 1,267*20 from Government,inrespect of certain landed property of the insolvent acquired byGovernment for public purposes. In February, 1893, the assigneemoved the Court for''authority to pay out of these sums of moneylegal expenses in six cases which the Court had authorized himto institute as assignee. The District Judge refused to make anorder on the motion, observing that he had no power “ either to“ hinder or direct the assignee in hiswith the property
“ which had vested in him.” In DecernDer, 1$95, the ActingDistrict Judge, on representations made to him by Mary De Kroes,the insolvent’s wife, who claimed the said sums of money as- belonging to her separate estate, examined the assignee, whostated that out of the said sums of money he paid away certaincreditors of the insolvent and the legal expenses aforesaid.The District Judge suspended his judgment as to whetherthe payments were actually made or not, and ordered that theassignee do forthwith bring into Court the said two sums. The
VOLUME II.
vol. n.
12(55)29
1869.
MogS.
( 2 )
t
assignee appealed, making Mary De Kroes respondent on hispetitionof appeal.
Wendt i(Pereira with him), for appellant. The procedure isirregular. There was no audit under seotion 113. [Per Curiam.—The Court acted under seotion 78^ The wife was not a provedoreditor, and oould not move the Court. – [Per Curiam.—It isimmaterial how the Court oome by the knowledge on which itacted.] The assignee oould not be ordered to pay into Court'moneys whioh his accounts ■ showed had been paid to oreditorsuntil the Distriot Judge deoided whether the payments to creditorshad actually been made or not. It was unnecessary to obtainauthority to pay costs of suits instituted by consent of Court underseotion 82.
Roberta, for Mrs. Kroes, Was-jed on.
8th May, 1896. Bonser, C.J.—
In thiB case the assignee of on insolvent estate was ordered bythe Court to bring into Court oertain Bums of money belonging' tothe insolvent estate, whioh had oome into his hands.
He says he had paid away the money to oreditors of the estate.The answer to that is, that he had no authority to-make the pay-ments, and that he has not paid the* money according to law. .
An assignee is not entitled .to deal with the assets of an estateaxoept in the way the Ordinance authorizes. He is not entitledto pick and ohoose the oreditors to whom he will pay away theonsets.' He must declare a dividend, and, with the leave of theCourt, pay the oreditors in acoordanoe with the dividend deolared.
Moreover, in this oase, the assignee made these payments wellknowing he was not entitled to make them. He applied to theDistrict Court for its sanotion to these payments, before makingthem, and that sanotion was refused.
As the assignee has mode Mr. Roberts1 olient a party to thisappeal, he must pay her1 oosts.
Lawbib, J.—I agree.