(1.) This is an appeal from a judgment of Mr. Justice Bakewell, sitting in insolvency on two applications which by consent were heard together. The first was an application dated the 4th May 1912 by the Official Assignee in the insolvency of a firm carrying on business as P.M. Enayattulla Sait & Co. He asked by his notice of motion that there should be at declaration that a certain sale-deed dated the 1st October 1910 executed by the insolvent in favour of his wife, who is the appellant before us, is void as either a fraudulent preference under Section 56 or a voluntary transfer under Section 55 of the Insolvency Act. The other application was an application by the appellant in which she asked that the insolvent should be declared trustee on her behalf with respect to a sum of Rs. 21,000. It is conceded by Mr. Chamier that there has been some misapprehension as regards the amount, and that it ought really to be Rs. 14,000. The notice of motion by the appellant also asks that the sale-deed in question should be declared valid and binding on the Official Assignee. In the course of the argument of this appeal the claim to the relief asked for in the appellant s notice of motion has not been pressed, and the real contest has been with reference to the question whether the order of the learned Judge made on the motion of the Official Assignee of the 4th of May was right.
(2.) The sale-deed in question was executed on the 18th October 1910. The order of adjudication was made, on a creditor s petition, on the 21st of November 1910. It is, as I have said, by the insolvent in favour of his wife. It recites that certain moneys of the wife came into the hands of the insolvent, that these moneys were placed on account with the insolvent s firm (now insolvent) and that out of these moneys the insolvent had received on his own account for cultivation business and other purposes mentioned in the recital a sum of Rs. 7,000 which sum the deed states he was liable to pay his wife. This sum of Rs. 7,000 is the alleged consideration for the sale-deed. Having regard to the fact that the transaction I took place shortly before the insolvency and also to the relations between the parties, the onus is of course upon the appellant to show that the transaction is one which should be allowed to stand. With : regard to this portion of onus Lord Justice. Williams in In re Lake, Ex parte Dyer (1901) 1 Q.B. 710 : 70 L.J. K.B. 390 : 84 L.T. 430 : 49 W.R. 291 : 8 Manson, 145 : 17 T.L.R. 296., makes these observations : If a man on the eve of bankruptcy makes a payment to a particular creditor, the presumption immediately arises that he makes that payment with the dominant view of giving, a preference to that creditor over his other, creditors. There is no need for any evidence that that view was expressed in so many words by the bankrupt : it is a presumption which would arise from the transaction". Now, in this case it is not disputed that a Sum of Rs. 25,000, which was the wife s separate property was deposited by the insolvent with his firm. It is admitted that of this sum the wife has had for her own purposes a sum of, Rs. 4,000, that leaves a balance of Rs. 21,000 and the wife s case is that her husband appropriated, the sum of Rs. 7,000. This Rs. 7,000 is said to be the consideration for the sale- deed. As regards this Rs. 7,000 Mr. Chamier said that the transaction for which, the Rs. 7,000 purported to be the consideration was re-entered into to make good a breach of trust on the part of the insolvent, and he relied on the decision of the House of Lords in Sharp v. Jackson (1899) App. Cas. 419 : 68 L.J.Q.B. 866 : 80 L.T. 841 : 6 Manson 264 : 15 T.L.R. 418., and that of the Court of Appeal In re Lake, Ex parte Dyer (1901) 1 Q.B. 710 : 70 L.J.K.B. 390 : 84 L.T. 430 : 49 W.R. 291 : 8 Manson, 145 : 17 T.L.R. 296. Then, as I understood his argument, he contended that even if , the relation between the insolvent, the husband, and the wife was not that of trustee and cestui que trust, there was at any rate a contractual obligation on the part of the insolvent to pay the wife money which belonged to her, which the husband had made use of, and on that ground, he said, the transaction should be upheld. In this connection he referred us to the case of In re Vautin, Ex parte Saffery (1900) 2 Q.B. 325 : 69 L.J.Q.B. 703 : 82 L.T. 722 : 48 W.R. 652 : 7 Mauson, 291. There was also some discussion with reference to In re Bryant, Ex parte Bryant (1895) 1 Q.B. 420 : 64 L.J.Q.B. 417 : 14 R. 192 : 72 L.T. 133 : 2 Manson 37 : 59 J.P. 196. Mr. Chamier contended that the decision in that case was not applicable here for the reason, amongst others, that that was a case which had reference to a question of undue preference for the purposes of the discharge section of the Bankruptcy Act and not to any question of fraudulent preference. No doubt these are interesting questions of law, but they only arise, and it is only necessary for us to consider them, if in fact the insolvent at the time he executed the sale-deed in question was liable to his wife, either as trustee, or by reason of some contractual obligation, to the extent of Rs. 7,000. This question of fact seems to be the question which we ought to deal with first.
(3.) The learned Judge does not deal with it until he comes to the end of his judgment. He deals with the question of pressure (this has not been relied on in this Court) and ho attaches considerable importance to the change of front on the part of the appellant or her advisers. Speaking for myself, I do not know there is very much in that--I suppose a party is entitled to set up as many defences as may be available when a transaction of this sort is impugned. Of course the matter is of importance (and this is the point of view from which the learned Judge considered it) because, if the evidence with regard to the alleged pressure is obviously false, and the learned Judge comes to the conclusion it is, that goes to throw doubts upon the genuineness of the transaction. In dealing with this question of fact the learned Judge says that no question was asked and no attempt was made to distinguish the Rs. 4,000 which admittedly the wife has spent and the Rs. 7,000 which according to her case was drawn and made use of by the husband without her authority. The learned Judge does not find in so many words that no money were due by the insolvent to the appellant at the date of the sale, but I think it is clear that that was the conclusion which he came to. So we have first to consider whether there is evidence to show that at the time of the sale-deed the husband was pecuniarily liable to the wife with regard to that, as in the case of an alleged fraudulent preference there can be no doubt the onus lies heavily on the appellant.