Mahalm v M'Cullagh and Scottish Amicable Life Assurance Society

JurisdictionIreland
CourtChancery Division (Ireland)
Judgment Date15 May 1891
Docket Number(1890. No. 11, 774.)

Chancery Division.

(1890. No. 11, 774.)

MAHALM
and

M'CULLAGH AND SCOTTISH AMICABLE LIFE ASSURANCE SOCIETY.

Re Harnett 17 L.R. Ir. 543.

Rimini v. Van PraaghELR L.R. 8 Q. B.1.

Kidson v. TurnerENR 3 H. & N. 581.

Heather v. Webb 2 C. P. Div.1.

Jackeman v. Cook 4 Ex. Div. 26.

Ex parte Barrow 18 Ch. Div. 464.

Ex parte Bagshaw 13 Ch. Div. 304.

Ex parte KingELR L.R. 20 Eq. 273.

Couldery v. BArtrum 19 Ch. Div. 394.

Societe Generale de ParisELR 8 App. Cas. 606.

Ex parte Mann 5 Ch. Div. 367.

Re Montgomery 7 L.R. Ir.27.

Furlong v. Fottrell Ir. R.3 Eq. 432.

Ex parte Phillips 36 W. R. 567.

Deering v. Bank of IrelandELR 12 App. Cas. 20.

Ex parte Nettleship 2 M.D. & D.124.

Ex parte Langston 17 Ves. 227.

Ex parte Burrell 1 Ch. Div. 537.

Jackeman v. Cook 4 Ex. Div. 26.

Rimini v. Van Praagh L. R. S Q. B 1.

Ex parte Barrow 18 Ch. Div. 464.

Jackeman v. Cook 4 Ex. Div. 26

Ex parte Barrow 18 Ch. Div. 464

Bank of IrelandELR 12 App. Cas. 20.

Sheerman v. Thompson 11 A. & E. 1027.

Peakman v. HarrisonELR L.R. 14 Eq. 484.

Arranging debtor — Promise to pay debt discharged by certificate — Corrupt agreement by creditor as to composition — 20 & 21 Vict. C. 60, s. 14735 & 36 Vict. C. 58.ss. 64, 76.

YoL. XXVII.] CHANCERY DIVISION. 431 VATTALM v. M'CULLAGH AND SCOTTISH AMICABLE V.-C. 1891. April 30. (1890. No. 11,774.) May 6, 7, 15. Arranging debtor-Promise to pay debt discharged by certifleate-Corrupt agreement by creditor as to composition-20 4, 21 Viet. c. 60, a. 147Â35 cgr 36 Viet. c. 58, ss. 64, 76. M. a trader, being indebted to C., effected a policy of assurance on his life in favour of C., and the same was held by C. as security for the debt. IL subsequently presented a petition of arrangement, and in the arrangement matter C. proved a debt of £1266, but valued his securities at £480, including the policy valued at £90, leaving an unsecured balance of £786. M.'s proposal was to pay lls. in the £, in four instalments, and it was accepted and confirmed. M. made default in payment of the third instalment, and he thereÂupon presented a second petition for arrangement, and proposed a composition in cash of 5s. in the L. This proposal was accepted and confirmed. C. filed a proof for £972, in which he expressly included the amount of the first proof 1786, and credited the composition instalments paid, the balance being the price of goods supplied since the first arrangement. C., with his proof, filed a release or waiver, by which it was agreed that he should make no claim for the composition payable in respect of his debt, but that it should be taken on M.'s application for a certificate that the resolution had been carried into effect as regards C. M. carried out his proposal as to the other creditors, obtained his certificate, and subsequently paid C. the composition of 5s. on the amount of his proof. After M.'s death his administratrix offered C. the £90. C. thereupon alleged that M. in the second arrangement matter, being unable tovRovide the di: in then;-. all his creditors, with their knowledgexequestad..C. to execute the waiver i d i wa • • .. I f ' waiver,-M. should pay C. the composition of 5s. in the £ on his debt out of Court, and that the Toney should remain in C.'s hands as security for the whole amount of his debt, mid-that M. should pay the premiums thereon. C. further alleged that it was also agreed that in consideration of C.'s continuing to trade with and give credit to M., the policy should be held by C. as security also for any new debt so incurred. M. had become indebted to C. on the new account. C. claimed to hold the policy as security, not only for the £90, but also for the entire unpaid balance of the old debt, and for the amount due on the new account. Held, that the waiver or release did not amount to a withdrawal of proof by C., nor remit him to his former rights in respect of his security. LAW REPORTS (IRELAND). [L. R. I. On the evidence, and being of opinion that the case came within the prin.. ciple of the rule that some corroboration is necessary where a claim is made against the estate of a dead man, and that there was in this case no such corroboration, the Court decided that, as to the old debt, C. had not established the existence of the alleged agreement. I Held, also, that even if the agreement had been established as a fact as to the old balance, it was rendered invalid by section 147 of the Irish Bankrupt and Insolvent Act, 1857, and section 64 of the Bankruptcy (Ireland) AmendÂment Act, 1872. But as to the amount due on the new trading : held, that no question arose under the Bankruptcy Law ; and the Court being of opinion that C.'s evidence on this point was corroborated, held, that the agreement alleged by him was valid as to the portion of it unaffected by the Bankruptcy Law, though void as to the the portion of it affected thereby, and that C. was entitled to hold the policy as security for the amount due on the new trading account, in addition tothe 90. AcTioN for a declaration that a policy of assurance on the life of William Mahalm, deceased, for a sum of £1000, effected with the defendants the Scottish Amicable Life Assurance Society, was held by the defendants James M'Cullagh, Son, and Co., as a mortgage only, to secure repayment to them of a debt of the said William Mahalm ; and that the plaintiff might be at liberty to redeem said mortgage ; and for an injunction to restrain the AssuÂrance Society from paying the amount of the said policy pending the action. The statement of claim stated :-William Mahalm was indebted to the defendants M'Cullagh in a sum exceeding £1000, and for the purpose of securing its repayment he agreed with them that a policy of assurance should be effected on his life in the sum of £1000, and that he should pay the annual premiums, and that the policy should be held by the said defendants as security for the purÂpose aforesaid ; in pursuance of said agreement the said defendants on the 21st November, 1879, effected such a policy with the Scottish Amicable Life Assurance Society ; the policy was retained by the defendants M'Cullagh, and the costs and expenses connected with same, and the premiums thereon down to his death, were paid by William Mahalm. Mahalm being unable to meet his engageÂments with his creditors, on the 8th June, 1886, presented a VoL. XXVII.] CHANCERY DIVISION. 433 petition for arrangement to the Court of Bankruptcy ; in the said V.-C. arrangement the defendants M'Cullagh filed a proof of debt for 1891. the sum of £1266 1 ls., but valued their securities at £480 98. 7d., MAHALM including the policy which they valued at £90 12s., leaving an M C OLLAGH. unsecured debt of £786 ls. 5d., and said proof was admitted. The proposal of Mahalm was to pay 118. in the £ on unsecured debts, and the unsecured balance of secured debts, in four instalments : the proposal was accepted and confirmed. Mahalm paid the first two instalments, including those payable to the said defendants, but made default in payment of the third, and he then presented a second petition for arrangement, and proposed a composition of 58. in the £ in cash. This proposal was accepted by the creditors, and the same was confirmed by the Court on the 19th August, 1887. The said defendants filed a proof of debt for £972 38. 5d. in which they expressly included the amount of the first proof as £786 ls. 5d., and gave credit for the composition instalments actually paid, the balance of their proof being for the price of goods supplied since the first arrangement. With their proof the said defendants, filed a release as follows :- " I, Andrew WCullagh, of Lower Abbey-street, in the city of Dublin, a creditor in this matter, whose debt has been admitted for the sum of £971 17s. 5d. sterling, do hereby consent and agree for self and partners hot to make any claim for the composition payable to me in respect of the said debt according to the resolution or agreement of creditors in this matter ; and I further consent and agree that upon the application of the petitioner for his certificate, this consent shall be taken as evidence that the said resolution or agreement has been carried into effect so far as regards me, and that I have been satisfied according to the tenor thereof; provided that if the petitioner shall, during the progress of the arrangeÂment, be adjudicated bankrupt, or if the estate and effects of the petitioner shall be realized for the purpose of distributing the proÂduce rateably among the creditors according to the resolution, nothing herein contained shall affect my right to receive a diviÂdend upon my said debt, or so much thereof as shall remain due. I also consent and agree that this consent shall be received and filed with the proceedings in this matter, and if necessary shall be V.- C. made a rule or order of this Court. Dated this 7th day of October, 1891. 1887.-J. M4CULLAGH, SON, & Co. itiAnAuu m.,CuLLAGE. The release was filed in Court on the 21st October, 1887. William Mahalm carried out his proposal, and by order of the Court dated the 18th November, 1887, he was declared entitled to receive his certificate under section 64 of the Act of 1872, and the certificate was on the same day issued to him. Subsequently, Mahalm paid the said defendants the composition of 5s. in the £ on the amount of their proof. Mahalm died on the 3rd February, 1890. The plaintiff was his administratrix, and she bad offered the said defendants the sum of £90 128., and had, after action, made a further tender of the said sum, with interest thereon at 5 per cent. from the 5th July, 1886, and undertaken to pay costs of action to date ; but the defendants had refused same, and claimed to be entitled to the entire of the policy moneys. The defendants, the Assurance Society, had brought the amount of the policy into Court, and the...

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