3. Any person who intends to file a petition as above referred to shall cause due notice of his intention to be published not less than three times in the Staatscourant and in a local newspaper, if there is one, at least twenty-one days before the hearing of the application, mentioning the date upon which and the place where the application will be filed, and he shall further lodge at the office of the Master of the High Court at Pretoria, or if he resides outside the limits of that district, then also at the office of the Landdrost of the district under whose jurisdiction he resides, or of the Special Landdrost of a public diggings, a statement of his affairs, and all such schedules, statements, accounts, and other documents as may be deemed the necessary for his purpose and support of application.

The aforesaid statement and other documents shall lie for the inspection of creditors at all times during office hours for a period of fourteen days from the date of the first publication of such notice in the Staatscourant as hereinabove provided.

No voluntary surrender of an estate as insolvent shall be accepted until proof shall have been given to the satisfaction of the Judge or of the Court that the provisions of this section have been complied with, and that there are sufficient funds or assets to cover the preliminary costs of sequestration.

NOTE.

The provisions of this section, requiring that the publication of notices of intention to surrender shall take place at least 21 days before the date fixed for making the application, apply to all the three publications referred to in the section--not to the first one alone (Ex parte Morris [1903], T.S. 877).

4. From and after the publication of any notice in the Staatscourant as above, it shall not be lawful to sell any property of the estate to which such notice relates, attached under any writ of execution or other process in the nature of an attachment, except by order of the Court aforesaid.

The proceeds of any property already sold under legal process shall remain in the hands of the Sheriff or other officer of the law charged with the execution of such legal process, and shall not be paid out by him unless by order of the aforesaid Court.

NOTE.

In Nelson & Co. vs. Whiting (4 E.D.C. 322) the Cape Eastern Districts Court ordered the sale of property attached in execution to be proceeded with, notwithstanding notice by the debtor of his intention to surrender, where it appeared that the debtor was not acting bona fide, and had delayed to file his schedules at the Magistrate's office for inspection.

5. It shall be lawful for the said Court, upon such application being made, to institute an enquiry, and for that purpose to direct the petitioner, and such other persons as to the Court may seem fit, to appear before it.

And the Court may likewise direct such petitioner to appear before a Commissioner appointed by the Court and thereunto duly authorised, who shall be competent to direct the petitioner and such other persons as to him may seem fit to appear before him to be examined, and who shall make out and transmit to the Registrar of the High Court a report of such examination.

6. When such Court after enquiry, or on considering the report of any such Commissioner, is of opinion that there are valid grounds for accepting the surrender of such estate, it shall thereupon grant an order for the sequestration of such estate for the benefit of the creditors in general.

7. It shall also be lawful for the Court aforesaid, upon the petition of a single creditor whose claim is not less than £50, setting forth valid reasons, or upon the petition of two or more creditors so petitioning upon a claim jointly of not less than £100, no matter whether such claims are due or not at the time of the application, to grant an order placing the estate of any such person under provisional sequestration, upon the ground that he has committed an act of insolvency, or upon any other ground which to the Court may seem fit.

NOTE.

An order for compulsory sequestration was granted, where the grounds relied upon were that a debtor had sent a circular to his creditors offering to assign his estate, and alleging that if this offer was refused he must surrender it (Rubidge and others vs. Foxcroft, 9 E.D.C. 134).

8. Any person shall be deemed to have committed an act of insolvency :

(a) If, having any
any property, whether movable or
immovable, personal or real, within this Republic,
he shall depart therefrom, or being out of this
Republic shall remain absent therefrom, or shall
depart from his dwelling-house, or otherwise absent
himself with the intent, by any of these acts, to evade
the payment of his debts.

(b) If, having against him the sentence of any competent Court, he being thereunto required, shall not satisfy the same, or shall not point out to the officer charged with the execution thereof sufficient disposable property to satisfy the same.

(c) If he shall make any alienation within this Republic or elsewhere, or if he mortgage or pledge any of his goods or effects, with the intent thereby to prejudice his creditors in their rights, or to prefer one creditor before another.

NOTES.

(a) In Hansen, Schrader & Co. vs. Krogmann (Transvaal Supreme Court, 1904, not yet reported) the Court granted an order sequestrating the estate of an absent debtor. But in Barkhuysen vs. Van Huysten (1 J. 26), where a person had left the Cape Colony 27 years before, leaving debts still unpaid, and was still out of the Colony, compulsory sequestration of his estate on those grounds was refused. The Court said that where the debt was of many years' standing, the defence of prescription might be set up, and further pointed out that it was not clear that the debtor had left the Colony with intent to delay or defeat his creditors.

66

(b) This order is the one ordinarily granted when a debtor makes a nulla bona return to a writ of execution (Mears vs. Nel, 9 C.L.J. 249). The words being thereunto required, shall not satisfy the same," constitute a distinct act of insolvency, and have no connection whatever with the clause or shall not point out," which is another act of insolvency (In re Webster, 3 M. 220). The writ of execution must be on a judgment still in force, and no order of sequestration will be granted on a return to a writ for a superannuated and unrevived judgment (Brink vs. De Lima, 3 M. 304).

A debtor cannot oppose an application for compulsory sequestration, where he owes a creditor £550, on the ground that he (the debtor) has received an offer to purchase certain immovable property owned by him for £600, which sum is payable at 3, 6, and 12 months. In such a case, if the creditor holds the title deeds of the property, the Sheriff is entitled to make a return of nulla bona, provided there are no other assets in the estate (Porter vs. Roberts' Executors, 2 J. 286). The creditor, if he has obtained a judgment, is entitled to be satisfied at once; and so is any ordinary creditor, where no credit has been given, or there is no agreement to postpone payment.

(c) A debtor had drawn up schedules for the surrender of his estate, but had not signed them. His principal creditor, knowing this, induced him to withdraw the schedules, and to transfer what was virtually his whole estate to him to satisfy his debt and the debts of some other creditors. No sequestration took place. The transaction was held to be a fraud on the creditors not included in this arrangement, and was accordingly set aside under the Common Law as a fraudulent alienation (Loescher vs. Pelser, Kruger & Co., 9 E.D.C. 195).

The Court has no power to sequestrate the estate of an rehabilitated insolvent (Ex parte Worthington [1904], T.S. 47).

un

9. Every petition as aforesaid shall be filed in Court in writing, and shall be accompanied by :

(a) An affidavit in writing from every petitioning creditor
of the cause of his claim and the justice thereof.
(b) A certificate from the Master of the High Court, or
from the Landdrost of the district in which he resides,
or from the Special Landdrost of a mining area where
his petition has been filed, that he has given security
to the satisfaction of the said official for the payment
of the necessary fees and charges for the prosecution
of the said sequestration until the choice or appoint-
ment of a trustee.

NOTE.

(b). The security to be filed is the sum of £25, which is deposited with the Master or the Resident Magistrate.

10. The creditor or creditors upon whose petition any order of sequestration shall be made, shall, at his or their own cost, prosecute all the proceedings in the said sequestration until the election or appointment of a trustee.

The said trustee shall reimburse such costs after they have been taxed by the Master of the High Court to the said creditor or creditors out of the first moneys that shall be received from the estate.

NOTE.

In a Cape case (Du Preez vs. Botes' Trustee, 2 J. 386) it was decided that this preference for costs applies to the case of a voluntary sequestration in the same way as to compulsory sequestration. "They are not treated as ordinary debts due by the insolvent, but as part of the costs of sequestration, and as such are payable by the trustee."

11. Upon granting a provisional order for the sequestration of any estate, the Court shall at the same time grant a rule nisi, upon the return day of which the debtor shall have to appear to show cause, if any, why a final order for the sequestration of his estate shall not be granted.

way.

The above rule shall be served upon the debtor in the usual

If, however, the debtor has been forty days absent from his usual place of residence or business within the Republic, copies of the said rule shall be affixed upon the outer door of the High Court, and at the same time published in the Staatscourant.

NOTE.

The practice of the Transvaal Courts since 1902 has been to require the original petition to be served on the debtor, with notice of the application, before the day when the rule nisi is applied for, in cases. where there is no return of nulla bona.

12. The said Court shall, upon the day of hearing, receive proofs of the matters in the aforesaid petition set forth, and adjudge thereon, whether the said debtor has appeared to answer the rule or not.

The Court may, upon application of the debtor, anticipate the day, due notice thereof having first been given to the petitioning creditor or creditors.

The Court may also, when sufficient reasons appear, delay the said adjudication for any reasonable time.

NOTE.

In

In Drummond vs. Marillac (1 J. 2) an application was made for compulsory sequestration. The debtor opposed this, and applied for a postponement of the matter, on the ground that he was bringing an action against the petitioning creditor, formerly his partner, which, if successful, would act as a set-off to what was due to the creditor. this action the debtor stated he was also claiming damages for fraud in business transactions, and for perjury alleged to have been committed by the creditor. Both these charges had been made in an action between the parties, wherein judgment was given for the creditor. The Court now decided that the former action had put the questions of fraud and perjury out of dispute, and refused to postpone the sequestration.

It must be clearly proved to the satisfaction of the Court that the petitioning creditor's debt amounts to £50. In Fletcher & Co. vs. White (16 J. 276) the creditor alleged that the respondent was indebted to him in an unsatisfied judgment for £26 6s. 10d. for goods sold, and £30 17s. 6d. for moneys lent and advanced. In April, 1899, the creditor sent a letter of demand to the debtor for £56, but afterwards sued him for only £26 6s. 10d. The Court held that "the fact that only £26 was sued for would, in the absence of any satisfactory explanation, lead to the inference that the claim for the additional £30 could not be substantiated," and refused the order for sequestration.

13. Whenever any petitioning creditor fails to appear or to prove his claim, or the act of insolvency wherewith the debtor is charged, to the satisfaction of the Court, it shall be lawful for the Court to set aside such provisional order of sequestration and dismiss the petition, or to require further proof of the matters therein set forth. In the former case all matters and questions relating to the estate shall revert to their original position, and be determined as if no petition for the sequestration of the estate had ever been presented.