Re Galvin, A Bankrupt

• Jurisdiction: Ireland
• Judgment Date: 27 June 1897
• Date: 27 June 1897
• Court: Court of Appeal (Ireland)

IN RE GALVIN, A BANKRUPT.

Appeal.

Bankruptcy — Crown debt — Legacy duty — Priority — Prerogative — Practice — Costs against the Crown — 18 & 19 Vict. c. 90, s. 2.

Cork and Bandon Railway Company v. GoodeENR 13 C. B. 826.

Green v. CroftENR 2 H. Bl. 30.

Re Henley & Company. ELR 9 Ch. D. 469.

520 THE IRISH REPORTS. [1897.. M. B. state that he had not an opportunity of attending, or at any rate 1897. did not attend, on the taking of the account against the latter KENNY in Chambers, there will be a further reference on that part of the v. RYAN. case, if it is so desired. Solicitor for the plaintiff : D. Purcell. Solicitors for the defendant James Ryan : Longfeld, Kelly, 4-Armstrong. It. W. L. Appeal. - IN RE GALVIN, A BANKRUPT (1). 1897. March 9. Bankruptcy—Crown debt—Legacy duty—Priority—Prerogative—Practice—June 4, 27. Costs against the Crown—18 & 19 Vict. c. 90, s. 2. A, who was executor of a deceased person, received and applied for his own, use assets of the deceased without paying to the Crown legacy duty payable in respect of certain legacies which there had been assets sufficient to meet. A was subsequently adjudicated a bankrupt, and his assignees in bankruptcy realized his estate : Held, that the Crown debt for legacy duty was entitled to priority over the general creditors of the bankrupt; and (reversing the decision of Boyd, J.) that such priority could be asserted by motion in the bankruptcy matter, and existed notwithstanding the vesting of the bankrupt's estate in his assignees. Held, by Boyd, J., that costs cannot be given against the Crown where the Attorney-General is not a party eo nornine. Bey. v. Beadle (7 E. & B. 492) followed in preference to Ex parte Jordan (31 L. R. Ir. 1). APPEAL from the order of Boyd, J., dated the 29th February, 1896, refusing priority in payment of legacy duty of the Crown. The bankrupt was solicitor to Martha Crawford, a person living in Belfast possessed of considerable means. By her will, dated the 9th April, 1894, Martha Crawford left some pecuniary legacies, bequeathed one annuity of £15 a-year to Maria Stirling, and appointed the bankrupt executor. There was no disposition (1) Before LORD ASHBOURNE, C., PALLES, C.B., and FITZGIBBON and. WALKER, L. JJ. VoL. I.] CHANCERY DIVISION. 521 of the residue. She died on the 26th April, 1894, and on the Appeal. 16th May probate was granted to the bankrupt. On the 9th May 1897. he lodged his account, which showed assets to the extent of In re Glum. £10,272 12s. 5d., the debts were £32 10s. 6d., leaving a net balance of £10,2401s. lld., to which her next-of-kin were en-titled after purchase of an annuity for Maria Stirling. The assets were invested in £400 Great Northern Stock, £2000 Belfast and Northern Counties Preference Stock, and some shares in the Belfast Bank, and there was £3304 on deposit receipt. ProceedÂings were commenced by the next-of-kin against the bankrupt to administer the assets in Sayers v. Galvin, and on the 23rd January, 1896, an order to administer was pronounced by the Vice-ChanÂcellor. On the 23rd March a further order was made that the bankrupt should lodge in Court the money in his possession belonging to the estate. He failed to obey the order, and was attached for disobedience. On the 17th March, 1896, Galvin was adjudicated bankrupt, and from evidence taken in the Court of Bankruptcy, it appeared that Galvin had lost Miss Crawford's money to the extent of £9500 by speculation on the Stock Ex-change. A claim was made by the Inland Revenue for payment of legacy duty as a preferential payment in priority to the general creditors, and this application was refused by Boyd, J., on the .29th February, 1896 (1), and the Inland Revenue appealed. (1) The following is the judgment of Born, J., delivered January 15th, 1897 : In this case an application has been made to me, on behalf of the Crown, for payment, out of the estate realized by the assignees of the bankrupt, of moneys alleged to be due by the bankrupt as executor of the will of Martha Crawford in respect of legacy duty on the amount of her estate and effects. The motion before me is grounded on an affidavit made by Mr. Wm. Haine Maunder, principal clerk of the legacy and succession duty department of the Inland Revenue, Custom House, Dublin, on the 2nd December, 1896. In this affidavit it is stated that from the books of the said department it appears that probate of the will of the said Martha Crawford was granted to the bankrupt on the 16th May, 1894, and that, as appears by the schedule of assets sworn by the said M. A. Galvin as such executor, for the purpose of obtaining probate of the said will, the estate and effects of which the said testator died possessed, .52 ,2 THE IRISH REPORTS. [1897. Appeal. Serjeant Jellett, Q.C., and C. E. APDermott, for the Commis 1897. sioners of Inland Revenue : In re The section under which the claim of the Crown attaches is G}ALVIN. sect. 37 of 5 & 6 Viet. c. 82. The way in which the duty was levied up to 36 Geo. 3, c. 52 (Eng.), which corresponded with 54 Geo. 3, c. 92 (Ir.), was that legacy duty was always paid in form of a stamp duty on the receipt. The inconvenience of that course was pointed out by Heath, J., in Green v. Croft (1). The duty is regulated by sect. 37 of 5 & 6 Viet. c. 82, which provided that legacy duty was to be paid by executors or admiÂnistrators on retaining or paying legacies, and if the duty was not paid, it remained a debt due by the executor to the Crown. amounted to the sum of £10,240 Is. lld., and that the bankrupt as such exeÂcutor, has not delivered to the Commissioner of Inland Revenue an account of said personal estate and effects, and paid the legacy duty thereon, as required by law. The said affidavit of the said Mr. Maunder further alleges that the next-of-kin of the deceased (who, under her said will, became entitled to her estate) appear from the proceedings in the Court of Chancery in the action of Sayers v. Galvin to be descendants of brothers and sisters of the testatrix, and are chargeable with legacy duty at the rate of 5 per cent., and that the sum payable for legacy duty would presumably amount to more than £500, but that £500 will be accepted in satisfaction thereof. The affidavit finally alleges that the said legacy duty and interest is a debt due to Her Majesty, and payable to the said Commissioners of Inland Revenue out of the assets of the bankrupt, which are now or may be under the control of this Court. I may, in passing, observe that the evidence of the alleged facts on which this motion is grounded is most unsatisfactory and vague, and is not, in my opinion, sufficient to entitle the applicant to the order sought by the notice of motion. I, however, desire to decide this case, not upon any technical grounds, but on what I conceive to be the law applicable to the case had the evidence been satisfactory. It is quite clear that the provisions in the Bankruptcy Act, giving priority to certain Crown debts do not take away any rights of the Crown to priority in respect of other debts to which it is entitled to payment. There is also no doubt that legacy duty is a debt due to the Crown, and that such duty becomes payable upon the retainer by the executor of assets of his testator for his own or others' benefit. In the present case it is stated the bankrupt fraudulently made away with (1) 2H.131.30. vol. I.] CHANCERY DIVISION. In this case there was receipt of the money, the debts were paid, the probate duty was paid, and then the legacy duty attaches. A debt created by a...