Wakilii

Official Receiver v Barreto (Civil Appeal No. 22 of 1938)

East African Court of Appeal · [1939] EACA 25 · 1939 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from decision of Lucie-Smith, J. (Kenya) concerning application for payment of execution proceeds
Decision
Appeal allowed; Official Receiver entitled to retain execution proceeds as against execution creditor under section 43(2) of the Bankruptcy Ordinance, 1930.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Where goods are sold in execution of a judgment exceeding four hundred shillings and the bailiff receives notice of a bankruptcy petition within fourteen days of the sale, section 43(2) of the Bankruptcy Ordinance, 1930 requires the bailiff to pay the proceeds (less costs) to the Official Receiver, who is entitled to retain them as against the execution creditor for the benefit of the general body of creditors. The section deprives the execution creditor of the fruits of the sale even though execution was completed before the bankruptcy petition was presented.

Outcome

Appeal allowed; Official Receiver entitled to retain execution proceeds as against execution creditor under section 43(2) of the Bankruptcy Ordinance, 1930.

Facts

On 13 September 1938, a debtor's goods were sold in execution of a decree for more than Sh. 400 which had been passed in the respondent's favour. On 14 September 1938, a bankruptcy petition was presented against the debtor and on the same day notice thereof was given to the bailiff. On 15 September 1938, an interim receiver was appointed and on 4 October 1938 a receiving order was made on the petition. Meanwhile, on 27 September 1938, the execution creditor applied for an order for payment to him of the moneys received by the Official Receiver from the bailiff in respect of the proceeds of the sale in execution. The application was granted by Lucie-Smith, J. The Official Receiver appealed.

Issues

  1. Whether the Official Receiver was entitled to retain the proceeds of a sale in execution under section 43(2) of the Bankruptcy Ordinance, 1930, where goods were sold on 13 September 1938, notice of a bankruptcy petition was given to the bailiff on 14 September 1938, and a receiving order was made on 4 October 1938.

Orders

  • Appeal allowed.
  • Order of the lower court set aside.
  • Costs in this Court and the Court below awarded to the Official Receiver.
  • Order for costs against Colonial General Stores, Ltd. set aside.

Rules and key headnotes

Bankruptcy — Effect on Antecedent Transactions — Execution Proceeds
Where goods are sold in execution of a judgment exceeding four hundred shillings and the bailiff receives notice of a bankruptcy petition within fourteen days of the sale, section 43(2) of the Bankruptcy Ordinance, 1930 requires the bailiff to retain the proceeds for fourteen days and, upon receiving notice of a bankruptcy petition within that period, to pay the balance (after deducting costs) to the Official Receiver, who is entitled to retain it as against the execution creditor.
Bankruptcy — Execution — Deprivation of Fruits of Sale
The effect of section 43(2) of the Bankruptcy Ordinance, 1930 is not to render the sale in execution absolutely void, but to deprive the execution creditor of the fruits of the sale and to transfer them to the trustee in bankruptcy for the benefit of the general body of creditors where notice of a bankruptcy petition is given within fourteen days of the sale.
Bankruptcy — Statutory Interpretation — Section 43(2)
Section 43(2) of the Bankruptcy Ordinance, 1930 expressly refers to the proceeds of sale, the connotation being that execution has been completed by seizure and sale. There is no requirement that the receiving order be made within fourteen days of the sale; it is sufficient that notice of the bankruptcy petition be given to the bailiff within that period.
Bankruptcy Ordinance — Relationship Between Sections 42 and 43(2)
Section 42 of the Bankruptcy Ordinance, 1930 lays down a general rule as to what a creditor must do to retain the benefit of an execution, while section 43(2) provides specific consequences which ensue where an execution has been in respect of a judgment for over four hundred shillings. Section 42 does not introduce an exception to section 43(2).

Legislation cited (4)

  • Bankruptcy Ordinance, 1930 (Kenya) s.43(2)
  • Bankruptcy Ordinance, 1930 (Kenya) s.42
  • Bankruptcy Act, 1883 s.46(2)
  • Bankruptcy Act, 1869 s.87

Cases cited (5)

  • Latter v Juckes and Page [1927] 1 KB 17
  • In re Pearce ex parte Crossthwaite (1886) 14 QBD 966
  • Figg v Moore Brothers [1894] 2 QB 690
  • Ex parte Villars in re Rogers (1871) LR 9 Ch 432
  • Re Andrew, Official Receiver v Standard Range Foundry Co [1936] 3 All ER 450

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Official Receiver v Barreto (Civil Appeal No. 22 of 1938) [1939] EACA 25 (1 January 1939)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.