Supreme Court Judgments

Supreme Court of Canada

Clarkson v. Tod, [1934] S.C.R. 230

Date: 1934-02-06

In the Matter of the Bankruptcy of Stewart E. Tod, Debtor.

Edward Guy Clarkson, Trustee of the Property of Stewart E. Tod, Debtor (Plaintiff) Appellant;

and

Stewart E. Tod.(Defendant) Respondent.

1933: November 16, 17; 1934: February 6.

Present: Duff C.J. and Lamont, Smith, Crocket and Hughes JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Bankruptcy—Property divisible among creditors—Bankruptcy Act, R.S.C. 1927, c. 11, s. 23 (a)—Future unearned salary of debtor—Allowance for maintenance—Competency to make, and form of, order.

Where a debtor in bankruptcy is in receipt of a yearly salary payable in weekly sums, his future weekly payments of salary, as they fall due, vest in the trustee in bankruptcy, under s. 23 (a) of the Bankruptcy Act, R.S.C. 1927, c. 11, but (under a rule long recognized by the courts) subject to a fair and reasonable allowance to the debtor for maintenance of himself and his family according to their condition in life; and it is competent for the court to make an order, declaring that such future payments, to the extent that they exceed the allowance for maintenance fixed by the court, vest in the trustee from the time or times that they are received by or become owing to the debtor, and ordering the debtor, as he receives such payments, to pay the same (to the extent aforesaid) to the trustee, until creditors’ claims and trustee’s costs are satisfied.

Review of cases.

Judgment of the Court of Appeal for Ontario, [1933] O.R. 519, reversed, and order of Sedgewick J., [1931] O.R. 147, restored.

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APPEAL (by special leave granted by a judge of this Court) from the judgment of the Court of Appeal for Ontario^[1] which reversed the judgment of Sedgewick J.^[2] who made an order declaring that all salary in excess of $100 per week as may be received by or owing to the debtor (the present respondent, who had made an authorized assignment under the Bankruptcy Act) is from the time or times such excess is received by or becomes owing to the debtor, the property of the debtor divisible among his creditors and from such time or times vests in the trustee for creditors, and ordering that the debtor pay to the trustee such excess of salary forthwith after the same is received by the debtor, until the claims of his creditors and the trustee’s costs have been fully satisfied. (The order also permitted to the debtor a reference as to the propriety of the amount allowed for maintenance of himself and his family, and reserved leave to the debtor and to the trustee to move at any time to vary the order in the event of a change in the debtor’s situation with respect to salary.)

By the judgment now reported, the appeal to this Court was allowed and the order of Sedgewick J. restored, with costs to the appellant in this Court and in the Court of Appeal.

W.N. Tilley K.C. for the appellant.

R.S. Robertson K.C. and J.H. Greenberg for the respondent.

The judgment of the court was delivered by

SMITH J.—The respondent, the Assistant General Manager of the Great Atlantic & Pacific Tea Company, made an assignment for the benefit of his creditors on 3rd December, 1932, and the appellant was subsequently appointed trustee. Creditors’ claims amounted to $23,033.69, and the sole asset disclosed was $100 cash on hand.

The respondent, under examination, stated that he is in receipt of a salary of $10,000 a year, paid to him in amounts of $196 each week.

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On the 2nd day of February, 1933, upon the application of the trustee, an order was made by the Hon. Mr. Justice Sedgewick in Chambers, containing the following provision:

IT IS DECLARED that all salary in excess of $100 per week as may be received by or owing to the said debtor (until the claims of his creditors and the costs of the said trustee have been fully satisfied) is from the time or times such excess is received by or becomes owing to the said debtor, the property of said debtor divisible among his creditors and from such time or times vests in Edward Guy Clarkson as trustee for said creditors AND IT IS ORDERED ACCORDINGLY.

AND IT is FURTHER ORDERED that the said debtor do pay to the said trustee such excess of salary forthwith after the same is received by the said debtor, until the claims of his creditors and the costs of the said trustee have been fully satisfied.

An appeal was taken to the Court of Appeal, which set aside the order with costs, and from that decision the present appeal is taken.

The Court of Appeal, purporting to follow its own decision in Re Rung^[3], sets out that it was there held that the earnings of a bankrupt by the exercise of his personal skill are not within the Act as property to be distributed amongst his creditors. The authorities cited in the reasons for that decision are: Ex parte Benwell, In Re Hutton^[4], and In re Jones, Ex parte Lloyd^[5].

In the former case the bankrupt was a bonesetter, earning a large amount each year from fees. It is pointed out that his earnings were dependent on the accident of whether people come to consult him or not, and upon whether he chooses to be consulted, and it was held that the trustee was not entitled to any order.

This case was followed in the case of In re Jones, Ex parte Lloyd⁵, where the bankrupt was a workman employed in a colliery company, and was earning about 25s. a week. Cave, J., referring to the Benwell case⁴, says that

inasmuch as he (the bankrupt) was not entitled to receive that money with respect to any particular period, such as a year or some part of a year, irrespective of the amount of work he did, the money so received was not “income”, ejusdem generis with “salary”.

The reasons in Re Rung^[6] show that, upon the above authorities, the case was made to turn upon the uncertainty of the earnings of the debtor, and at p. 560 there is the following statement:

Nor do I go into the wide question whether, under our Act, subsequent “salary, income * * * * or compensation” is ever assets for the trustee—such enquiry is unnecessary.

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The case of Hamilton v. Caldwell^[7] is expressly distinguished on the ground that in that case the bankrupt was entitled to a salary at the rate of £500 per annum, and was receiving that salary with respect to the year, irrespective of the amount of work he did, and consequently the money so received was properly to be taken by the trustee. It is therefore evident that the present case is distinguishable from the case of Re Rung^[8], because here the debtor is in receipt of a definite yearly salary, as in the case of Hamilton v. Caldwell⁷.

The further reason advanced by the Court of Appeal in this case is, that we are not bound by decisions in Scotland, Ireland and the English Court of Appeal, and that our laws are to be interpreted in the sense in which, we believe from the language employed, the legislature intended; and it is pointed out that words may have a certain meaning in England and a different meaning here.

It is necessary, however, to examine the exact language of the Bankruptcy Act, and, by the application of the ordinary rules of construction, having regard to decisions binding on us and the reasoning of decisions not strictly binding, to determine the two neat questions raised in this appeal.

We have been referred to a long list of cases decided under the various English Bankruptcy Acts from time to time in force, many of which do not directly touch the precise points here in question, which are, whether or not future unearned salary passes to the trustee in bankruptcy by virtue of sec. 23 (a) of the Bankruptcy Act, R.S.C., 1927, ch. 11, and, if they do pass, whether or not it is competent to make such an order as is in question here.

Section 23 defines property of the debtor divisible amongst his creditors and sets out that it shall comprise

(a) All such property as may belong to or be vested in the debtor at the date of the presentation of any bankruptcy petition or at the date of the execution of an authorized assignment, and, all property which may be acquired by or devolve on him before his discharge.

The corresponding section of the English Act of 1869 is 15 (3), carried into the Act of 1883 as sec. 44 (i), and into the Act of 1914 as sec. 38 (a). Sec. 15 (3) of the Act of 1869 reads as follows:

(3) All such property as may belong to or be vested in the bankrupt at the commencement of the bankruptcy, or may be acquired by or devolve on him during its continuance.

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The only change in the wording in the two later Acts is the substitution for the concluding words “during its continuance” of the words “before his discharge.” Sec. 23 (a) of our Act would seem to have exactly the same meaning and effect as the corresponding section in the English Acts, unless there is something in our Act indicating a distinction.

In many early cases in England it is laid down that, notwithstanding the provisions of the Bankruptcy Act, a bankrupt may sue for his personal earnings if the trustee does not interfere, but that any amount recovered beyond what is reasonably necessary for the support and maintenance of himself and family will belong to the trustee.

Chippendall v. Tomlinson^[9]; Silk v. Oshorn^[10]; Kitchen v. Bartsch^[11]; Coles v. Barrow^[12].

In the argument in Chippendall v. Tomlinson⁹, the following from Blackstone’s Commentaries, Vol. 2, p. 485, was relied on:

The property vested in the assignees is the whole that the bankrupt had in himself at the time he committed the first act of bankruptcy, or that has been vested in him since, before his debts are satisfied or agreed for.

In Kitson v. Hardwick^[13], Willes J. quotes from Smith’s Mercantile Law, 8th Ed., 646, language to the same effect.

Williams v. Chambers^[14] is a case where the assignee sued for amount owing for personal earnings of the bankrupt, earned during the bankruptcy, which were claimed to be not more than sufficient for maintenance of the bankrupt and his family. On demurrer the action was dismissed on the ground that the pleading claimed the amount as a debt directly due to the assignee, and that, to hold the assignee entitled to recover,

we must go the length of deciding that the assignee might, in the words of Lord Mansfield in Chippendall v. Tomlinson^[15], let the insolvent out to hire, and contract himself for his personal labour.

The reasons refer to

the comprehensive words of this section, which would entitle the assignee to recover any debt accruing to the insolvent before his final discharge, either for work and labour or any other cause.

Wadling v. Oliphant^[16]. A bankrupt procured employment as editor of a newspaper, and, six years after the

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bankruptcy, and before his discharge, obtained a judgment for £104 as six months’ salary in lieu of proper notice of dismissal. Held, that the trustee could claim this money before it was paid to him as against any creditors subsequent to and without notice of the bankruptcy, on the ground that the money was not the proceeds of the bankrupt’s personal labour subsequent to his bankruptcy, but a compensation for the breach of a contract which became a part of his estate in bankruptcy.

Blackburn, J., points out that Beckham v. Drake^[17] decides that such a sum would pass to the assignee where the breach was before the bankruptcy. He goes on to say that it is unnecessary to decide whether, if an undischarged bankrupt were to make a large salary beyond what he could reasonably require for his support, the surplus amount in his possession is or is not protected from his assignee. And Archibald, J., says:

Now the cases do shew that there is a rule, the extent and limit of which is not exactly defined, by which the bankrupt, after the date of his bankruptcy, may, in certain cases, keep the produce of his personal labour.

Ex parte Vine, In re Wilson^[18]. The bankrupt, before his discharge, recovered judgment for £250 damages for slander, which amount was paid into court. The assignee applied for payment of the amount to him, but the application was dismissed by Bacon, C.J. On appeal, James, L.J., says in his reasons that the general principle always has been that, until a bankrupt has obtained his discharge, all his property is divisible amongst his creditors. But an exception was absolutely necessary in order that the bankrupt might not be an outlaw, a mere slave to his trustee; he could not be prevented from earning his own living.

In Ex parte Huggins, In re Huggins^[19], the question was as to the right of the trustee in bankruptcy to receive part of the pension of a retired judge of a colony, amounting to £875 per annum. On appeal from an order made by the Registrar restraining the bankrupt from receiving the moneys payable to him in respect of the pension, the trustee offered to assent to the bankrupt receiving for his maintenance £350 per annum out of the pension. It was held that

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the pension was income, coming within the provisions of sec. 90 of the statute of 1869, and that property to be dealt with is not property in the abstract, but property divisible amongst the creditors under the Act, defined by sec. 15 (3), as quoted above. Lindley, L.J., then proceeds to say:

All money therefore to which the bankrupt may become entitled in any manner during the continuance of the bankruptcy is within sect. 15. Then, looking a little further, we find a group of sections, sects. 87 to 95, which relate to “property devolving on the trustee”. As I understand them, these sections are modifications and qualifications of sect. 15. The different kinds of property with which they deal vest in the trustee, but subject to the modifications and qualifications contained in this group of sections.

The reasons of Jessel, M.R., are to the same effect. According, therefore, to this decision, if secs. 87 to 95 were not in the English Act, sec. 15 (3) would vest all the salary and income in the trustee, without any modification. Sec. 90 makes special provision as to salary and income, but there is no such section in the Canadian Act.

Re Brindle, Ex parte Brindle^[20]. The bankrupt was employed as a commercial traveller at a salary of £100 per year, terminable by a week’s notice. An order was made for payment by him of £20 every year out of such salary. Held on appeal that the order was right, and notwithstanding that the employment was terminable by a week’s notice, sec. 53 (2) of the Act of 1883, which is the same as sec. 90 of the Act of 1869, applies.

Two cases are cited to show that an assignment of money to be acquired in future and future debts will be enforced:

In re Clarke—Coombe v. Carter^[21], approved in the House of Lords in Tailby v. Official Receiver^[22], holds that an assignment for value of all moneys which the assignor should become entitled to under a will operates as a contract which the court would enforce.

Tailby v. Official Receiver²² decided, reversing the Court of Appeal, that a security of all book debts due and owing, or which might during the continuance of the security become due or owing, was good as to future debts, though not limited to book debts of any particular business.

In re Rogers, Ex parte Collins^[23]. The only part of this case that seems to have any bearing is the statement of Vaughan Williams, J., at p. 431, where he says:

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I conceive that, subject to the rule of not depriving the bankrupt of the means of livelihood, if it be shown that after providing fairly and liberally for the support of the bankrupt there would be a balance of salary, that that balance of salary, even though the salary is a salary for personal exertions, might be made the subject of an order under the 53rd section.

In re Shine, Ex parte Shine^[24]. The bankrupt had an agreement to act at a theatre for a term of two years at a salary of £30 per week, payable weekly. During the bankruptcy, and before the trustee intervened, he entered into an arrangement with the manager that the manager should buy up his debts and should reimburse himself by retaining £20 a week out of the bankrupt’s salary. It was held that this agreement with the manager was valid, and no order was made.

In re Graydon, Ex parte Official Receiver^[25], holds that the principles which underlie sec. 53 of the Bankruptcy Act of 1883, with respect to the salary or income of a bankrupt, are also applicable to his personal earnings. In each case it is a question of amount, and he will be allowed to retain only such sum as is sufficient for the reasonable maintenance of himself and his family, and the residue will pass to his trustee in bankruptcy. In his reasons, Vaughan Williams, J., says:

Now it seems to me, on the authorities, that it is not true to say that no personal earnings of the bankrupt after bankruptcy pass to his trustee. The authorities are not very clear; but I think that the balance of the authorities (see Wadling v. Oliphant^[26], and cases there cited) shows that it is only the personal earnings reasonably necessary for the maintenance of a bankrupt and his family which do not pass to the trustee.

In re Roberts^[27]. The bankrupt claimed as personal earnings a quantity of billiard balls that he received under a contract to use this make of balls only in practice. It was held that the assignee was entitled to the balls. Lindley, M.R., in his reasons, says:

The alleged exception is not to be found in the Act itself, but is said to be an implied exception based upon a long series of authorities and well recognized for the last hundred years.

but he holds that these authorities have no application to the case before him. He reviews the authorities that he mentions, and concludes that the language of sec. 44, clear and express as it is, must not, therefore, be taken so literally as to deprive the bankrupt of those fruits of his

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personal exertions which are necessary to enable him to live. But on the other hand, the necessity is the limit of the exception. This, he says, is in entire accordance with modern decisions, quoting most of those referred to above, and ending with Benwell’s case^[28], which he says turns entirely on sec. 53, and is only an authority for the proposition that a prospective order cannot be made impounding the future personal earnings of a bankrupt. The bankrupt may sue for and recover his earnings if his trustee does not interfere, but what he recovers he recovers for the benefit of his creditors, except to the extent necessary to support himself and his wife and family.

Bailey v. Thurston & Co. Ltd.^[29] In this case Cozens-Hardy, L.J., says:

It has been established for many years that, notwithstanding the generality of the language used in the Bankruptcy Acts, there are some contracts and some rights that do not vest in the trustee. For the present purpose it is sufficient to mention contracts for purely personal service. Such unexecuted contracts are not assignable by deed, and they are not, by virtue of the statute, vested in the trustee. * * * As to future services, the bankrupt can sue for his remuneration under the contract, subject only to the right of the trustee to intervene and claim the fruits of the litigation.

Affleck v. Hammond^[30]. It was held that, as the money claimed by the bankrupt was his personal earnings, it was excepted from the property passing to the trustee in bankruptcy, and as the whole or part was required for his maintenance, he was not a mere nominal plaintiff, and could not be ordered to give security for costs.

Vaughan Williams, L.J., quotes with approval the language of Cozens-Hardy, L.J., in Bailey v. Thurston^[31]. Buckley, L.J., quotes the language of James, L.J., in Ex parte Vine, In re Wilson^[32], and the language of Willes, J., in Kitson v. Hardwick^[33]. Kennedy, L.J., says:

By s. 44 of the Bankruptcy Act, 1883, the trustee in bankruptcy has a general right to intervene. But on that general right of intervention there has been grafted an exception in favour of the personal earnings of the bankrupt, so far as those earnings are necessary for his support, and this exception has been recognized for at least a hundred years. It is true that the generality of s. 44 is emphasized by the fact that particular things are particularly excluded from its operation; but it is nevertheless clear that the Act does contemplate the possibility of the acquirement by an undischarged bankrupt of future property.

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Hollinshead v. Hazleton^[34] merely decides that the salary of a Member of Parliament is within the meaning of sec. 51 of the Act. There is no corresponding provision in the Canadian Act.

Hamilton v. Caldwell^[35]. The appellant Hamilton, at the date of the bankruptcy, was earning, and thereafter continued to earn, under a contract of service terminable on notice, a fixed salary of £500, his total annual income being £670. It was held that the instalments of salary, as they accrued from time to time, beyond what was required for his reasonable maintenance, vested in the trustee under sec. 98 (1) of the Bankruptcy Act of 1913 as acquirenda of the bankrupt, and an order was made for payment to the trustee of the instalments of salary receivable in futuro to the extent of £150 yearly.

Sec. 98 (1) of the Scottish Act reads in part as follows:

98. (1) If any estate, wherever situated, shall, after the date of the sequestration, and before the bankrupt has obtained his discharge, be acquired by him, or descend or revert or come to him, the same shall ipso jure fall under the sequestration, and the full right and interest accruing thereon to the bankrupt shall be held as transferred to and vested in the trustee, as at the date of the acquisition thereof or succession, for the purposes of this Act; * * *

The section, continuing, lays down the procedure to be followed by the trustee to obtain the after acquired property.

The order was opposed on two grounds, namely: (1) that the personal earnings of the appellant, after the date of the sequestration, do not pass under the sequestration to the trustee; and (2) that it was not competent to make an order against the bankrupt with reference to any instalments of the salary before they accrued due.

In the House of Lords, Viscount Finlay says it was admitted by the counsel for the appellant “that the personal earnings of the bankrupt would pass to the trustee under sec. 98 (1) when they accrued, subject to the beneficium competentiae;” and that the second ground alone was argued, the ground advanced against the order being that nothing could be done by the court until the trustee’s title had accrued when each instalment of salary had been earned

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and was payable, and that the trustee should then follow the procedure laid down in sec. 98 (1). He goes on to say:

This argument appears to me to overlook the fact that it must be open to the court to take proceedings to prevent the right of the trustee to each instalment as it falls due being defeated by the bankrupt’s receiving and spending the money himself, and that, if there be no such power, there might be a most inconvenient and unseemly scramble between the trustee and the bankrupt as each instalment fell due. The trustee surely might take steps, as any one instalment was about to fall due, for the purpose of preventing the bankrupt from defeating his title by receiving 1 and spending it, and, if he can do it with regard to each particular instalment, there is no principle or law to prevent him from obtaining a general order of this kind for the protection of his title to receive each instalment as it falls due.

Viscount Cave says:

It is admitted that there is no precedent for such an order, and the question raised by this appeal is whether there was jurisdiction to make it.

He says that a terminable contract for personal services, such as that which is in question in the present case, does not vest in the trustee, and points out that the Scottish Act contains no provision similar to sec. 51 of the English Bankruptcy Act of 1883, enabling the court to attach the salary or income of a bankrupt; and, after quoting sec. 98 (1), says that, so long as the bankrupt continues in his present employment, and has not obtained his discharge, each instalment of his salary as it becomes due will fall within the subsection and will be capable of being impounded by an order made under the subsection. He states that sec. 98 (1) does not, according to its terms, authorize the making of such a declaration until after the property has been acquired and notice has been given inviting persons interested, such as new creditors, to appear and object; and expresses some doubt as to the competency to make the order, and finally states that if a similar question should arise under the English Bankruptcy Act, it would be necessary, in view of the observations of Lord Lindley in In re Roberts^[36] and the cases there referred to, to consider the matter afresh, with special reference to the English law and practice.

Lord Dunedin discusses the Scottish law, and says:

I do not think that the point is without difficulty, but, on the whole I am of opinion that the order as made is a competent order. Although each periodical payment is not vested until it becomes due, yet it is known now that such periodical payments will be made from time to time. I would be an almost senseless proceeding that there should have to be a repeated application each time payment became due.

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He points out that precaution should be taken to guard the interests of others who may be interested in the future earnings, because the trustee’s right is only an inchoate right, which may be defeated by diligence carried through by a subsequent creditor; and that therefore there should be in the order a reservation as to the rights of other persons interested.

Lord Shaw and Lord Wrenbury agree with Lord Dunedin. The latter supports the competence to make the order upon grounds similar to those stated by Viscount Finlay.

The language of sec. 98 (1), quoted above, is not, I think, more comprehensive than that of our sec. 23 (a) also quoted, which sets out that the property divisible among creditors is “all property which may be acquired by or devolve on him (the bankrupt) before his discharge.”

Section 2 (ff) of the Canadian statute reads as follows:

“Property” includes money, goods, things in action, land, * * *

The English decisions referred to above seem to establish beyond any question that, by the language of the English Act, “all such property as * * * may be acquired by or devolve on him before his discharge,” the instalments of salary such as are in question here vest in and belong to the trustee as they fall due, subject to the alimentary provisions referred to.

This precise language is adopted in the Canadian Act and is not capable of any difference of meaning in Canada from its meaning in England.

As already pointed out, there is no section in the Canadian Act, or in the Scotch Act, corresponding to section 90 of the English Act of 1869 (sec. 51 (2) of the Act of 1914) which provides that the court may from time to time make such order as it thinks just for the payment of salary or income of the bankrupt or any part thereof to the trustee during the bankruptcy. As we have seen, however, it is laid down in Ex parte Huggins^[37] referred to above, that sections 87 to 95 of the English Act are only modifications! and qualifications of section 15 of that Act, and that, if these sections were not there at all, salary and income would vest in the trustee without any modification, except that which (has been engrafted by the decisions referred to.

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The meaning and effect of the concluding portion of section 23 (a) of the Canadian Act would therefore seem to be the same as that of the same words in the English Acts, which meaning has been settled, not only by the various decisions in the English Court of Appeal referred to, but also by the decision of the House of Lords in Hamilton v. Caldwell^[38]. The latter case, as mentioned above, expressly holds that the instalments of salary, as they become due, vest in the trustee, and lays it down as beyond doubt that the trustee would be entitled to an order as each instalment falls due, the only question being as to the competency to make an order covering all future instalments. While the language of the statute that was being dealt with in that case is different from the language of the Canadian statute, it is not more comprehensive.

The decision is that it is competent to the court to make such an order, and this decision is arrived at on the general principles of equity, and not by virtue of any special provisions in the Scottish Act.

In Clarkson v. White^[39], Boyd, C., held that future earnings, subject to the modification mentioned, pass to the trustee, and made an order accordingly.

Section 23 (ii) of the Canadian Act provides that the property divisible amongst creditors shall not comprise

Any property which as against the debtor is exempt from execution or seizure under legal process in accordance with the laws of the province within which the property is situate and within which the debtor resides.

In Asselin and Cleghorn^[40], it was held that a judgment creditor is not entitled to have a receiver appointed to receive all debts due to the judgment debtor; that section 58 of the Judicature Act, R.S.O. 1897, ch. 51, is intended only to confer on the courts the former jurisdiction of equitable execution. This follows Holmes v. Millage^[41].

Future earnings, therefore, cannot be reached by equitable execution in Ontario, but may be attached after they become due.

Barry, C.J., K.B.D., New Brunswick, held, in In re Herbert H. James^[42], that future earnings do not pass to the trustee, and are exempt within the meaning of sec. 23 (ii) quoted above.

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I am of opinion that this subsection refers only to property exempt from execution or seizure under legal process by virtue of the Execution Act.

Riddell, J., is probably right in his view that the Canadian Parliament never contemplated that sec. 23 (a) would have the effect of transferring future personal earnings of a bankrupt to the trustee. The draughtsman copied this section practically verbatim from the English Act, and deliberately left out sec. 90 of the English Act—sec. 51 (2) of the Act of 1914—which deals specially with salary and income. It would seem to be quite probable that he and Parliament, in leaving out that section, were of the impression that they were excluding from the operation of the statute future salary or earnings, and I would willingly adopt that view, if there were proper justification for it. This, however, would be a mere speculation as to the intention of Parliament, in which we are not entitled to indulge. We have, as pointed out, the precise provisions in reference to property to be acquired in future, copied from the English Act, without its modifications, the meaning and effect of which have been settled in England for more than a hundred years. When the Parliament of Canada adopted these provisions, we must, I think, assume that the intention was to apply to them the meaning thus long established.

I am of opinion, therefore, that it was competent for the Judge in Bankruptcy to make the order in question.

The amount allowed to the bankrupt by this order is $100 per week out of his salary of $10,000 per year. No question was raised by either side as to the reasonableness of this amount under the circumstances.

The general rule stated in the cases is that the bankrupt is entitled to the fair and reasonable amount required for the maintenance of himself and family according to their condition in life. Lord Esher, in In re Shine^[43] referred to, says, at p. 532:

I think the court ought not to cut down the bankrupt’s means of livelihood too closely, but ought to leave a liberal margin for his support;

and it will be seen that in the quotation from the reasons of Vaughan Williams, J., in In re Rogers, Ex parte Collins^[44],

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at p. 431, set out above, he speaks of “providing fairly and liberally for the support of the bankrupt,” while throughout the various judgments in the cases referred to the judges are shocked at the idea of making a slave of the bankrupt. This feeling gave rise to the engrafted rule referred to, and to the remarks of Esher, M.R., and Vaughan Williams, J., as to making the allowance to the bankrupt liberal.

The appeal must be allowed and the order restored with costs to the trustee here and in the Court of Appeal.

Appeal allowed with costs.

Solicitors for the appellant: Tilley, Johnston, Thomson & Parmenter.

Solicitors for the respondent: Mercer, Bradford & Co.