Re Patrick M'Loughlin, A Bankrupt

JurisdictionIreland
Judgment Date02 December 1915
Date02 December 1915
CourtCourt of Appeal (Ireland)
In re Patrick M'Loughlin, a Bankrupt (1).

Appeal.

CASES

DETERMINED BY

THE KING'S BENCH DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL,

AND BY

THE COURT FOR CROWN CASES RESERVED.

1916.

Bankruptcy — Examination of Witnesses — Unsatisfactory Answering — Committal — Irish Bankrupt and Insolvent Act, 1857 (20 & 21 Vict. c. 60), s. 385.

M., the bankrupt, and his wife were examined in the bankruptcy proceedings as to the ownership of certain leasehold premises. It appeared that in the year 1913, prior to the adjudication, M. and his wife, in proceedings in the Chancery Division in connexion with an agreement for the sale by M. of the premises, had made affidavits in which they stated that the premises in question, which had been previously assigned by M. to his wife in consideration of her paying a mortgage debt on them, were held by the wife upon trust for M. subject to the amount paid by her on foot of the mortgage. In an action subsequently brought by M. against his solicitor for negligence in connexion with the sale, it was alleged in the statement of claim that at the date of the assignment by M. to his wife it was verbally agreed that she should hold the premises in trust for M. subject to the amount paid by her on foot of the mortgage. On the examination in bankruptcy, M., in answer to questions put to him by counsel for the assignees in bankruptcy, swore that the premises were his wife's property. He at first denied that he had sworn the affidavit in the proceedings in the Chancery Division, but when it was produced he admitted his signature to it, but said that he had never read it. His wife when examined swore that the premises were hers. When examined as to the affidavit made by her, she said that she was lying sick in bed when she signed it, and that nothing was read to her but a few lines. The judge in bankruptcy made an order committing the bankrupt and his wife for unsatisfactory answering.

Held, by the Court of Appeal (O'Brien L.C. and Molony L.J., Ronan L.J. dissenting), that the answering of the bankrupt and his wife was not unsatisfactory within the meaning of s. 385 of the Irish Bankrupt and Insolvent Act, 1857, and that the order of committal should be discharged.

Held, by Ronan L.J., that the evidence of the bankrupt and his wife as a whole was characterized by such fencing and shuffling that the judge was entitled to consider it unsatisfactory, and was justified in making the order of committal.

What amounts to unsatisfactory answering within the meaning of s. 385 of the Irish Bankrupt and insolvent Act, 1857, considered.

Appeal from an order of Boyd J., committing to prison the bankrupt, Patrick M'Loughlin, and his wife, Ellen M'Loughlin, for unsatisfactory answering.

On the 6th April, 1909, Patrick M'Loughlin had executed to his wife an assignment of certain premises held by him under a lease for ninety-nine years from the 1st November, 1906. In the year 1913 the premises were put up for sale by Patrick M'Loughlin, and sold to a Miss Magrath. When the abstract of title was furnished, the purchaser's solicitor objected to the title. The vendor's solicitor replied that the Vendor's wife would join in the conveyance. The purchaser refused to complete, and issued a summons under the Vendor and Purchaser Act praying that it might be declared that the objections of the purchaser to the title had not been sufficiently answered, and that a good title had not been shown; and claiming a return of the deposit paid by the purchaser. For the purpose of those proceedings an affidavit was made by Patrick M'Loughlin in which, after referring to the lease dated the 24th September, 1907, by which the premises in question were demised to him for the term of ninety-nine years from the 1st November, 1906, he stated:— “Before the said lease was executed, I had obtained a letter of lease. Subsequently to my obtaining the said letter of lease I executed a mortgage to one Patrick Forde for the sum of £150, and upon the original of said mortgage, bearing date the 11th December, 1906, marked ‘B,’ I have endorsed my name before swearing this affidavit.”

“2. On the day of I was married to my present wife, Ellen M'Loughlin. Shortly after my marriage the said Patrick Forde required payment of the money due him on said mortgage deed. At this time my wife had money deposited in her name in the Northern Bank, and it was agreed between myself and my wife that in consideration of my wife paying off the sum then due the said Patrick Forde, I should execute to her an assignment of the premises. Accordingly, on the 6th day of April, 1909, an assignment was made between Patrick Forde of the first part, me, this deponent, of the second part, and Ellen M'Loughlin of the third part. At the time this assignment was made there was a verbal arrangement between myself and my wife, and it was agreed between us that she, the said Ellen M'Loughlin, should stand possessed of the said premises, subject to the amount paid by her to the said Patrick Forde, in trust for me, this deponent, absolutely. There was no instrument creating this trust. Before I offered the premises for sale I had my wife's authority to do so, and she is perfectly willing to join in any deed that may be required to complete the title. I say that I have spent considerably over £500 in erecting buildings on the said plot demised by the said lease. My wife never took any part in contributing to this expenditure, and no change was ever made in the landlord's books, and I am still the tenant of the said premises, and in occupation of same, and have paid my rent every year in my own name to the landlord's agent, and I beg to refer to the rent receipts up to the last gale day, which show that I am the tenant of the said premises.”

Mrs. Ellen M'Loughlin also made an affidavit, in which she stated as follows:— “1. I am the wife of Patrick M'Loughlin, the vendor herein. I do not claim to be entitled to the beneficial interest in the premises, the subject of this action. 2. I beg to refer to the original assignment, dated 6th April, 1909, and made between Patrick Forde of the first part, Patrick M'Loughlin of the second part, and me, this deponent, of the third part. At the time this assignment was executed, it was arranged between my husband, the said Patrick M'Loughlin, and me, this deponent, that I should stand possessed of the said premises in trust for the said Patrick M'Loughlin absolutely, subject to the amount paid by me on foot of the mortgage to Patrick Forde. 3. There was no instrument in writing creating this trust. Before my husband put up the said premises for sale, I gave him and his solicitor, Mr. James A. Kieran, authority to do so, and same has my consent, and I am prepared to join in any deed of conveyance to complete the title to the said premises. 4. Since the date of said assignment my husband has continued to pay the rent of said premises in his own name, and in addition has carried on business in said premises, and has traded in his own name, and expended considerable sums of money in permanent improvements.”

The summons was heard before Barton J., who granted the purchaser's application. The decision was affirmed by the Court of Appeal (1).

An action was subsequently brought by Patrick M'Loughlin

against his solicitor for alleged negligence in connexion with the sale. Paragraph 5 of the statement of claim set out as follows:— “At the date of the said indenture of assignment in the last paragraph mentioned [the assignment of the 6th April, 1909] it was verbally agreed between the plaintiff and the said Ellen M'Loughlin that the said Ellen M'Loughlin should stand possessed of the said premises, subject to the said sum of £150, being the amount paid by her to the said Patrick Forde as aforesaid, in trust for the plaintiff absolutely.”

The jury found that there was no negligence on the part of the solicitor, and he obtained judgment for his costs of the action, and on the 5th July, 1915, Patrick M'Loughlin was adjudicated a bankrupt in respect of the amount due for these costs.

On the 19th November, 1915, the bankrupt and his wife were examined before Boyd J., sitting as judge in bankruptcy, by Wylie K.C., for the assignees. The following transcript of the shorthand writer's notes of the bankrupt's evidence was signed by him:—

“The bankrupt, being sworn and examined before the Court … upon his oath, by Mr. Wylie K.C., instructed by Messrs. Horan & Devine, solicitors for the assignees, saith, in answer to questions, as follows:—

1. Did you own this property in Ballinamore, or did your wife? Which property? 2. The house in Ballinamore, Sir, who owned it? I owned one house, a drapery establishment, there. 3. Do you own the property you are living in? It is my wife's property. 4. Is it her property altogether? Yes. 5. Altogether? Yes, certainly. 6. Absolutely? Certainly. 7. Do you remember swearing an affidavit on the 29th day of September, 1913, with this statement in it? [Document handed in.] Look at paragraph 2. [Counsel reads paragraph beginning, ‘I was married to my wife, Ellen M'Loughlin.’] Did you swear that affidavit, Sir? I did not 8. You did not? Never. The affidavit, my Lord, never was read for me. 9. Mr. Justice Boyd—You had better be careful. Witness—The affidavit, my Lord, never was read for me. (The original affidavit was brought from Mr. Justice Barton's Court and shown to witness.) 10. Mr. Justice Boyd — Do you see your signature to that document? I do, my Lord. 11. Is it your signature? It is, my Lord. 12. Why did you deny you swore it? What I say is this, my Lord, and I say it yet, and I cannot go hack of the truth, this document never was read to me. 13. Mr. Wylie K.C.—That is what you say now? Yes, that is what I said all the time. 14. Do you remember starting an action against Mr. Kiernan for negligence in the sale of the house? I do, and it was right. 15. Do you know what the action...

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