the granting of the order of sequestration, save and except such claims as the creditors shall have against him by virtue of any offer of composition accepted by them, and which shall still remain unsatisfied. NOTES. Rehabilitation is a complete discharge of all debts incurred before insolvency. If an insolvent afterwards undertakes to pay his old debts, such new contract must be sued upon, and not the original liability (Quin Bros. vs. Van der Merwe, 9 J. 217). A testator bequeathed the usufruct of a certain sum of money to his wife during her life, and directed that on her death the money should go to the children of the marriage in equal shares. One of the children became insolvent in 1861. In 1862 the account and plan of distribution in his estate were confirmed by the Court. In 1866 the insolvent was rehabilitated, the deficiency in his estate being £1,081. His mother died in 1870, having by her will appointed all her children joint heirs of her estate. The testator predeceased her in 1861. The Court held that before the making of the order confirming the account and plan of distribution the insolvent's right to receive his share of the inheritance on the death of his mother was a future estate, which became legally vested in his trustee, who was entitled to recover the insolvent's share of inheritance, notwithstanding the intermediate rehabilitation (Quin vs. Board of Executors, B. 1870, p. 78). 140. No creditor shall by reason of the rehabilitation of any insolvent be deprived of his right to claim from any person, who is bound to him as a surety for the insolvent, the balance of any debt in respect whereof the suretyship was entered into. NOTES. A passed a bond in January, 1826, for £150 to plaintiff, and as security ceded and delivered in pledge a bond dated January, 1821, by C for £175, with defendant as surety and co-principal debtor. A surrendered. The £150 bond was proved in his estate, and the £175 bond, ceded by his trustees to plaintiff, was now proceeded on to the extent of £150. Defendant was held liable on the £175 bond, notwithstanding that it had not been proved on the estate of C (who had surrendered in 1826), who was subsequently rehabilitated (Hoets' Executors vs. De Vos, 2 M. 53). 141. All preferences, gifts, securities, or payments granted, made, promised, or offered by the insolvent to or for the benefit of his trustee or of any creditor, and all secret agreements or collusive arrangements entered into by him with such trustee or creditor with the intent and purpose of inducing such person not to oppose his rehabilitation, shall be null and void. The trustee or creditor who shall accept any offer made as hereinabove set forth shall forfeit for the benefit of all the other creditors jointly (the creditor who has accepted such offer always excepted) a sum of money equal to double the amount or double the value of whatever he shall have so received from the insolvent. 142. As long as the insolvent is not rehabilitated in manner as above set forth, the sequestration of his estate shall continue in force, even after the final distribution of his estate and the discharge from office of his trustee. 143. Whenever pending such time it shall appear that there are further assets belonging to the estate which were not known at the time of the distribution of the estate, or that the insolvent has acquired fresh assets, whether by inheritance or otherwise, or that the profits made by the insolvent in the business carried on by him, by virtue of Art. 28, amount to more than was strictly necessary for the maintenance of himself and his family, then any creditors who shall have proved any debt upon the estate of any such insolvent may apply to the High Court for an order for the distribution of such assets respectively among the creditors who have so proved their debts upon the estate. NOTES. The Court has a discretion as to the issue of a writ of execution under § 127 of the Cape Ordinance (corresponding in principle to § 143 of the Transvaal Law), and will not direct a writ to issue unless there is reason to believe that sufficient assets will be found to give an appreciable dividend to creditors (Greeff's Trustee vs. Fourie's Executor, 16 J. 576). If there are sufficient assets, the Court will grant such an order, so long as the insolvent has not received his rehabilitation (Smith vs. Kotze, B. 1874, p. 137). 144. It shall be lawful for the Court, whenever it shall find that there is a sum of at least £50 available for distribution, after deduction of costs, to order the Master of the High Court to call a meeting of creditors for the election of a trustee, according to the provisions of this Law, who shall be charged with the distribution of such sum. 145. All the provisions of this Law relating to the trustee and to the distribution of the estate shall, mutatis mutandis, apply to any such trustee and any such distribution as is referred to under Art. 144. CHAPTER VIII. Fraudulent and Culpable Insolvency. 146. An insolvent shall be deemed to be guilty of the crime of fraudulent insolvency, and shall be punished for the same by imprisonment, with or without hard labour, for a period not exceeding seven years:— (a) If he, either before or after the making of the order of sequestration, has alienated, mortgaged, pledged, embezzled, concealed or removed anything belonging to his estate to the value of £10 or upwards with intent to prejudice the rights of his creditors. (b) If he has concealed or removed, destroyed or mutilated any office books, accounts, receipts, or any other documents relating to his estate, with intent thereby to defraud his creditors. (c) If he has fraudulently contracted any debt. (d) If he shall, at the second meeting of his creditors, or (f) If he shall have connived at, or by not at once estate. (g) If at any time when examined by the Court or by the presiding officer, or by any creditor at a meeting of creditors, he makes any false answer to any lawful question with the intent to defraud his creditors. (h) If he shall, being summoned to appear in accordance with the provisions of Art. 159, leave the Republic, or otherwise remove himself, or conceal himself with the intent by so doing to avoid the trial referred to under that Article, or to avoid any writ of arrest issued against him under Art. 160. NOTES. A warrant may be issued for the arrest of a person charged with fraudulent insolvency even before the provisional order of sequestration of his estate has been confirmed (In re Jacobson, 15 J. 392). Pending trial on a charge of fraudulent insolvency, the Court will order an attachment of goods consigned to the insolvent (if he is charged with alienating property belonging to his estate), and will order letters addressed to the insolvent to be opened in presence of the Master (In re Robinson, 4 S. 104). An insolvent who has been committed for trial on a charge of fraudulent insolvency, and is brought for examination before a commissioner of the Supreme Court, can only decline to answer questions having a tendency to prejudice him on his trial (In re Holtman, 3 M. 302). An insolvent was charged with having fraudulently contracted certain debts to the amount of £60, and was convicted. The charge on the trial of the case (remitted to the Magistrate) did not set forth the persons alleged to have been defrauded. and the amounts to the extent of which it was alleged they had been defrauded. On this ground the conviction was quashed (Queen vs. Jacobsohn, 9 C.T.R. 230). In a case where two parties are charged with fraudulent insolvency, very slight evidence of the knowledge by one partner of the fraudulent acts of the other is required to justify the conviction of both (Queen vs. Margolius, 4 C.T.R. 440). 147. An insolvent shall be deemed to be guilty of the crime of culpable insolvency, and shall be punished for the same by imprisonment, with or without hard labour, for any period not exceeding six months: (a) If he shall fail to attend before his creditors at the first, second or third meetings of his insolvent estate, or shall remain away from any adjournment of any of the said meetings without leave from the presiding officer; or if he fail to attend at any other meeting of his creditors after being duly required to do so. (b) If he has kept no adequate or proper books or accounts containing all such entries relating to and exhibiting the nature of his dealings as (regard being had to his particular trade or calling) might reasonably be expected or required. (c) If at any meeting of creditors in his insolvent estate, being thereto required by the presiding officer, he cannot account for or discover what has become of any money, security or other property, which shall have been proved to have been in his possession so recently before the sequestration as to make it his duty so to do. E (d) If he shall not be able, after having been requested in writing by the said trustee so to do, to give a true and sufficient explanation of the cause of his insolvency. (e) If he shall have given to any of his creditors an undue preference. (f) If he shall have contracted any debt or debts to the amount of £50, without any reasonable or probable expectation of being able to discharge the same. (g) Or if he shall have granted, made, or promised to any creditor any gift, payment, security or any other unlawful consideration in order to procure the consent and concurrence of such creditor to any offer of composition, or to prevent opposition to his rehabilitation. NOTES. A person found guilty of culpable insolvency in having committed one or more of the seven specific offences mentioned in the foregoing section can be sentenced to any term of imprisonment up to six months for each of the offences for which he is so found guilty (Queen vs. Keyter, 12 J. 127). The Court cannot inflict a fine on a conviction of culpable insolvency (Queen vs. Wolpert, 9 C.T.R. 328). (a) An act of culpable insolvency may be committed by the insolvent absenting himself from the second meeting of creditors, although he attended at the first meeting (Vorster vs. Lilienfeld, 5 E.D.C. 254). (b) A butcher was charged with culpable insolvency in not keeping such reasonable and proper books as (regard being had to his particular trade or calling) might reasonably be expected and required. The evidence showed that his books consisted of a cash-book, a day-book, and a journal, with no ledger, and that the cash-book contained many omissions, and for a period of eighteen months had not been balanced. This was held to constitute culpable insolvency (Queen vs. Wallace, 12 E.D.C. 189). (d) Proof must be given that the insolvent was requested in writing by the trustee to explain his insolvency, on trial of a charge brought under this sub-section (Queen vs. Wallace, 12 E.D.C. 189). (f) The term " any debt or debts" under this sub-section must be restricted to debts provable against the insolvent estate (Queen vs. Klein, 8 J. 39). 148. Every trustee and every creditor of the estate of any insolvent shall, with regard to the prosecution of any offence of culpable insolvency, which has been committed, have the same right of prosecution which any private person has by law with regard to any offence committed against his person or property. |