1891

SHAW

v.

HYETT.

Hodges, J.

any possible injustice which this law can work. If a person trust an insolvent with money after his insolvency to do work for him, and if prior creditors can get any profit made out of that, that I think is altogether for the benefit of the previous creditors. It cannot do them any harm; it may do them some good by enabling them to be paid off after the subsequent creditors. Mr. Duffy endeavoured to distinguish Tucker v. Hernaman, and the other cases, by saying that under our present Insolvency Act, subsequently acquired property passes to the assignee just as previously acquired property would do, and in this respect our Act is different from the English Act. But Herbert v. Sayer (d), Cohen v. Mitchell (e), compared with Sartori v. Laby (f) show that afteracquired property passes in precisely the same way under the English Act as under the Victorian Act. I therefore arrive at the conclusion that the subsequent creditors are entitled to a preference in accordance with the doctrine in Tucker v. Hernaman.

There is then a question raised as to whether or not, even if that were so, the plaintiff was not entitled to any balance that may exist over and above the amount necessary to pay the subsequent creditors, and a suggestion was made that an order to that effect ought to be made by this Court. I think that the case of Tucker v. Hernaman again shows that I ought not to make that order. I do not know at the present time that there is one penny that any creditor under the previous insolvency is entitled to, and therefore I do not see any reason for making an order to hand over any balance to the assignee that he may hand it back to the executors to be dealt with according to the trusts of the will. It would be idle for me so to direct. If I have to make an order at all I shall make the order made in Tucker v. Hernaman.

I proceed now to deal with the counterclaim. The defendants claimed that the deceased paid the only two creditors who have proved, and that that being so, they are entitled to have the estate released. One of the creditors admits that he has been paid all that was due to him, and it is for me to say now whether or not I find as a fact that John Philip Motteram paid Mr. Hopkins the money which he was entitled to get under the (d) 5 Q.B. 965. (e) 25 Q.B.D. 262. (ƒ) 9 V.L.R. (L.) 329.

insolvency. Mr. Motteram, as I have said, was insolvent in 1868.
Mr. Hopkins proved his debt immediately afterwards for the sum of
408l. 15s. 9d. He had previously issued a fraud summons against
Motteram to compel the payment of Motteram's indebtedness or some
portion thereof to him, and that fraud summons was the reason for
Motteram, petitioning the Insolvent Court; so that we start in
1868 when the debt was owing. Mr. Hopkins was not inclined
to show any mercy to or consideration for Mr. Motteram, but was
determined to enforce the payment of the money due to him
without any consideration whatever for Mr. Motteram. Hopkins
then proved on the estate for the sum of 408l. 15s. 9d. I have
had considerable doubt whether that sum of 4081. 15s. 9d. was
really due. There are certain cheques about which there was some
evidence given which lead me to think that that sum was not due,
and Mr. Hopkins' own evidence with regard to one of his bills.
of costs would lead me to the conclusion that that amount of
4081. 158. 9d. was not due. However, I am not called upon to
question that matter in this proceeding. He proved for that in
November, and in the same year he writes to Mr. Motteram:
"In reply to yours of the 23rd inst., I beg to acknowledge receipt
of a bank draft for 201., which leaves a balance of 2801. still due to
me. I am willing to carry out my arrangement with you on
the same terms, viz.: 25l. cash and your acceptances for 11l. 10s.,
each payable monthly, extending over a period of twenty-four
months, the said acceptances to be endorsed by Mr. Rigby. The
attachment to issue in default. You are well aware that this was
the arrangement made, so that I cannot see how you could have
been surprised at what you saw in the Argus." So, that between
the date of his proving and the 24th November, the debt had been
reduced to 280l. I have no information, except the statement of
Mr. Hopkins, that he agreed to take 300l., or how the sum was
reduced to 2801. from 4081. I have no evidence of payments,
nor have I any correspondence in which anything of that kind
occurred, but I have here a statement that it is reduced to
2801. I am more disposed to think that in the interval other
moneys had been paid, or if in the interval they had not been, that
there had been an interview in which Mr. Hopkins had been told that
4081. was not the correct amount. Be that as it may, Hopkins

1891

SHAW

v.

HYETT.

Hodges, J.

1891

SHAW

v.

HYETT.

Hodges, J.

indicates that the balance due is 2801., and he says he is willing to
take the balance in a certain way. That is the balance he says.
Now, it has been very unfortunate, but there is an absence of
proof of communication between the parties relative to this subject
matter from that date-24th November 1868 to April 1890.
Mr. Hopkins, who says 2801. is due, and that he is willing to take
it in a particular way, and who has been showing no considera-
tion for Mr. Motteram, never, so far as the evidence shows, writes
another letter or suggests in any way that default has been
made, but allows the matter to stand over for twenty-two years
without one word of comment. Without the evidence of
Mr. Hopkins I should be disposed to infer that the arrangement
proposed in the letter, if not carried out in terms, had been carried
out by Motteram paying the money by instalments. We hear no
more of attachments or fraud summonses until we hear of the
attachment in Watson's matters. And except that up to the time
of Motteram's death not one single word has been said. Mr. Hop-
kins, however, says that he has not been paid, and he writes, in
January 1891, this letter to Mr. Hyett, one of the executors and
the defendant. "I am in receipt of yours of the 8th instant.
I have seen the official assignee with regard thereto, and the lowest
amount that can be accepted in this matter is 408l. 15s. 9d." (that
is the amount he proved for in the first instance in the insolvency),
"being the amount of my claim, without interest, to which I
would be entitled under my judgment, and 251., the assignee's
costs and charges, making in all the sum of 433l. 15s. 9d.”
So that he says that the amount of his claim-the lowest
amount that can be accepted-is 408l. 15s. 9d. He said in
November 1868 that the balance due was 2801. The first time
he makes a claim after it was reduced to 2801. is after the
death of the only man who can give evidence about it except
himself, and then he claims the full amount as if there had not
been one penny paid. And what makes that matter worse is
the evidence he gives. One might have thought that matters had
been forgotten in this space of twenty years, and that payments
had been made and that that letter had been forgotten. But
Mr. Hopkins says: "I was aware of the payment of 201. at the
time the action was commenced. I had no copy of the letter of

24th November. I was not aware of its existence. And further on I wrote this letter (15th January 1891), when I knew that a less sum was due." So that Mr. Hopkins informs the Court. that when he made a claim for 4081. against the estate of a deceased person he knew that was a dishonest claim, and that that money was not due; and after that I am asked to believe him and not to infer, after the lapse of twenty-two years, that the money had been paid. Mr. Hopkins might have submitted that he had forgotten of the reduction of the amount. to 2801., but I presume he was astute enough to see that if some payments had been made and forgotten by him, it might have been inferred that others had been. So he was willing to take up this other position, that he made a claim on the executors which he knew was not an honest one. So far as this part of the case is concerned I cannot say that I entertained any doubt from the time the evidence was given, but I desired to let the matter stand over that I might think over it and as far as possible deal calmly with it. I have gone through the evidence again and again to see if I could not put some other construction on it, to see if I could not reconcile it with fair and honest dealing, and having failed to do so I am bound now to express the reasons why I cannot accept that statement of Mr. Hopkins. There is a long silence, so far as the evidence goes, after that letter of the 24th November 1868. It is a mere chance that that letter was not burnt or lost when the firm changed their offices. If that letter had gone with the others this Court would have known nothing of it, and I should have taken Mr. Hopkins' statement and believed it. I would have taken the statement of a man who was practising a profession which one hopes is an honourable one. But that letter, coupled with Mr. Hopkins' evidence, shows that he made a claim against the estate of a deceased person which he knew to be a dishonest one, even if the evidence does not also show that he was prepared to support that claim by a false declaration, and I decline to believe. in the honesty or accuracy of Mr. Hopkins' testimony. There was another gentleman, Mr. Rigby, who was clerk to Mr. Motteram for a period at that time, and who appears to have separated from him not on the very best of terms, and he gives evidence which, to my mind, is utterly unsatisfactory, and I must decline.

1891

SHAW

v.

HYETT.

Hodges, J.

1891

SHAW

v.

HYETT.

Hodges, J.

to believe him also. In the course of his evidence he said that moneys were paid by him, that the account book was made up by him, and entries made in it by him. There was a son of Mr. Motteram's in Court, who was in his father's office, and he (Mr. Rigby) was asked whether he was prepared to contradict Mr. Motteram on that question, and he said, "No, he was not prepared to contradict him"; and he afterwards proceeded to try and explain away that, for he said he kept this in secret. I do not think it likely that any book for keeping the accounts of the office of a solicitor could be kept a secret so that no one in the office could see it, and that the son of the attorney, who I have no reason to believe was not in his father's confidence, should not have known of the existence of the book in which the office accounts were kept. I therefore decline to believe Mr. Rigby, and infer from the lapse of time and the silence of the creditor who was prepared to show no mercy to his debtor, from the fact of letters not being produced which one would expect to exist if the debt had not been paid, from the fact that that amount was reduced, and from the fact that the creditor admits that the claim he made upon the executors was not a just one, and admits that he knew it was not a just claim; from these facts I infer that the money was paid. There is much more that leads me, in default of direct evidence, in the same direction, but I am strongly impressed that I should draw that inference.

Then comes the question, finding that to be so, can I order, as asked by the counterclaim, the estate practically to be released and a conveyance to the executors made. I do not think I am in a position to make that order, because, although the only creditors who have proved have been paid, I am not satisfied that there is not one other who may have some claim that is not disposed of, and I therefore propose to make the order made in Tucker v. Hernaman, with certain slight variations. There will be a direction as to the order in which the moneys are to be applied; in the first instance, in the payment of the creditors subsequent to the insolvency; in the next place to the plaintiff as trustee for any persons who can be shown to be entitled to prove or to be paid under the insolvency, other than Drought and Hopkins; the balance to the executors, to be dealt with in accordance with the trusts of the will. Accounts