Nalini Ranjan Chatterjee, Acting C.J.

1. This appeal arises out of certain insolvency proceedingsunder the following circumstances.

2. The insolvents Mogi & Co. carried on business inJapan and several other branches in various parts of the world. They bankedwith the appellants, The Yokohama Specie Bank Ltd. in the latters branches ateach place.

3. The respondents, Messrs. Curlender, & Co. obtained adecree against Mogi & Co. for one lac and 84 thousand rupees on theOriginal Side of this Court and obtained an order for attachment beforejudgment of their assets in Bombay. The Yokohama Specie Bank (who may bereferred to as "the Bank") claimed a lien on the goods attached undera deed of hypothecation dated the 14th July, 1920, and the claim was allowed.

4. On the 10th February, 1921, Mogi & Co. wereadjudicated insolvents at the instance of Curlender & Co.

5. After the adjudication, the Official Assignee obtained adeclaration that the deed of hypothecation referred to above was invalid asagainst him, and the Bank was directed to account for the dealings with thegoods.

6. It appears that before the adjudication, the generalcreditors of Mogi & Co. in Japan appointed a, Re-adjustment Committeeconsisting of several creditors including the Bank. A. circular letter wasissued by them calling upon the creditors of Mogi & Co. to empower theCommittee to act, and it seems that they executed a power of"trusteeship" in favour of the Committee. The Committee appears tohave carried out in Japan a liquidation of Mogi & Co.s debts, paid adividend of 12 per cent, in January, 1922, and a final dividend of 2688 percent in October, 1922. The dividends received by the Bank amount to about 15lacs of rupees. Messrs. Curlender & Co. did not join in the proceedings norreceive any dividend. They have since lodged a proof of debt which has beenadmitted by the Official Assignee.

7. On the 14th January 1925 the Bank lodged a proof of debt,claiming that after all securities had been realised, it still had over onecrore and 52 lacs of rupees due to it, and relied upon a copy of the report ofthe Re-adjustment Committee to show that that was the balance due to it.

8. On the 23rd April, 1925 on the objections of Curlender& Co. the matter stood over in order that the Bank might apply for issue ofa Commission to prove its claim but no steps having been taken by it, Curlender& Co. applied to the Court (1) for an order expunging the proof of theBanks claim or for an order on the Bank to pay to the Official Assignee theamount of dividend received by it in Japan to the Official Assignee and (2) foran order that the Banks claim for the advance made by it under the deed ofhypothecation should be expunged and (3) for an order directing the Bank toproduce all documents and papers in support of its claim before the OfficialAssignee. After the service of notice of the above application, the Bankapplied for Letters of Request to issue for the examination of the President ofits Bank at Yokohama and another member of the Re-adjustment Committee forproof of its. claim.

9. Curlender & Co. asserted in their affidavit that thedividends paid to the Bank and other creditors by the Re-adjustment Committeewere in full satisfaction of their claims. The Bank denied that it was so. Mr.,Justice Pearson was of opinion that the dividends were paid in full dischargeof the claims of the creditors who participated in the proceedings before theRe-adjustment Committee, and that they were not entitled to participate furtherin the insolvency proceedings here. He was further of opinion that assumingthat the Bank did not receive the dividends in full satisfaction of its claim,the Bank must bring in the dividends already received in Japan, before it canbe allowed to participate in any division of the insolvents property here. He,however, refused to make an unconditional order upon the Bank to pay over tothe Assignee the dividends received by it in Japan, but disallowed theCommission and the Letters of Request on the ground that there was no use inallowing the exceedingly long and expansive examination in Japan to go on,unless the Bank was willing to accede to the contention which it had resistedbefore him.

10. The Bank has accordingly preferred this appeal andcross-objections have been put in by Messrs. Curlender & Co.

11. It is contended on behalf of the Bank that it isentitled to prove its claim, and that the question of its right to participatein the dividends here should be decided after evidence is taken, as there areno materials at present for determining it.

12. It is contended by Mr. Pugh on behalf of Messrs.Curlender & Co. that the Bank is bound to bring the dividends it receivedin Japan before it can prove its claim in the Insolvency Court, that treated asa mercantile firm carrying on business in India and having submitted to thejurisdiction of the Insolvency Court, it is bound to account to the Assigneefor the money received in Japan, and that an action for money had and receivedmay be maintained by the Assignee against the Bank, and that in any case itcannot get any dividends until the other creditors have received such dividendas is proportionate to the amount received by the Bank. The Counsel for theOfficial Assignee joined with Mr. Pugh in pressing us to decide the matter.

13. In the case of Banco de Portugal v. Wadddl (1880) 5 A.C.161 : 49 L.J. Bk. 33 : 42 L.T. 698 : 28 W.R. 477, Lord Cairns said "As Iunderstand the law, it would at all times have been perfectly competent to theholders of those bills having received under the Bankruptcy Administration inPorlugal a certain dividend, to come and prove upon the BankruptcyAdministration in England if a Bankruptcy Administration was taking place here,and the only question would be the terms upon which they should prove,"and referring to the case of Selkrig v. Davies (1814) 2 Dow. 230 : 3 E.R. 848 :2 Rose 291 : 14 R.R. 146, observed: "The terms are perfectly clear that aperson who after having proved under a foreign bankruptcy, claims to prove in abankruptcy of the same debtors in England, he may do so; but he may do so uponthe terms of bringing in, for the purpose of dividend, the sum which he hasreceived abroad. As was said by Lord Eldon It has been decided that a personcannot come in under an English Commission without bringing into the commonfund what he has received abroad and Lord Eldon goes on to point out, what isobviously the case, that a creditor, because he happened personally to be inEngland, would not be obliged to bring this sum into the common fund--he mightkeep it if he liked-he might ignore the English Bankruptcy altogether if hepleased but if he did not ignore it, if he sought to take advantage of it, ifhe sought to have some benefit from it...he must bring into the common fundthat which he had already received in respect of the obligations of the samedebtors.

14. In the case of Cockerell v. Dickens 2 M.I.A. 353 : 3 MooP.C. 98 : 1 M. D. & D. 45 : Morton 407 : 1 Sar. P.C.J. 203 : 18 E.R. 334 :13 E.R. 45, however, Baron Parke in delivering the judgment of the JudicialCommittee observed:"The principle is that one creditor shall not take apart of the fund which otherwise would have been available for the payment ofall the creditors, and at the same time be allowed to come in pari passu withthe other creditors for satisfaction out of the remainder of that fund: andthis principle does not apply where that creditor obtains by his diligencesomething which did not and could not form a part of that fund."

15. Under Section 17 of the Presidency Towns Insolvency Act(Act III of 1909) on the making of an order of adjudication the property of theinsolvent wherever situate, shall vest in the Official Assignee and shallbecome divisible among his creditors, and no creditor shall have any remedyagainst such property except with the leave of the Court. But this can haveoperation only with respect to property affected by our law.

16. With regard to Immovable properties situate in a Foreigncountry, the law is thus stated in Westlakes Private international Law, 7thEdition, 182 "Any Creditor, British or alien, may retain any payment whichhe can obtain out of the non-British immovables of a bankrupt or company beingwound up, and if it is only partial may receive dividends in the bankruptcy orwinding up on the residue of his debt pari passu with the othercreditors."

17. So far as moveable property is concerned the generalprinciple is that it is subject to that law which governs the person of theowner. In Westlake, at page 183, it is stated that a creditor who after thecommencement of an English Bankruptcy and not by virtue of any charge prior tothe bankruptcy or of a judgment in rem obtains payment out of the bankruptsmoveables in a non-British country, must account for such payment, if he seeksto receive dividends on the residue, if any, of his debt, but may otherwiseretain it, and this whether or not the payment was obtained by legalproceedings or whether or not the title of the trustees was asserted in suchproceedings if any; but that if he is a British Creditor (or one domiciled inEngland or one who in his character of creditor must be regarded as Englishbecause the debt is owed to a house of business in England of which he is amember) and obtains payment out of the bankrupts moveables in a non-Britishcountry under the circumstances stated above, he must pay over the amount tothe trustees in bankruptcy whether or not he seeks to receive dividends on theresidue, if any, of his debt.

18. It appears, however, that where by the law of theForeign country a person other than the Official Assignee is entitled topayment out of moveable property there, he cannot be ordered to refund it tothe Official Assignee. In Sill v. Worswick (1791) 126 E.R. 379 at p. 394 : 1 H.Bl. 665 : 2 R.R. 816, it was observed "it by no means follows that aCommission of bankrupt has an operation in another country against the law ofthat country. I do not wish to have it understood, that it follows as aconsequence from the opinion I am now giving (I rather think that the contrarywould be the consequence of the reasoning I am now using), that a creditor inthat country, not subject to the bankrupt laws nor affected by them, obtainingpayment of his debt, and afterwards coming over to this country, would beliable to refund that debt. If he had recovered it in an adverse suit with theAssignees, he would clearly not be liable. But if the law of that countrypreferred him to the Assignee, though I must suppose that determination wrong,yet I do not think that my holding a contrary opinion would revoke thedetermination of that country, however I might disapprove of the principle onwhich that law so decided."

19. I do not think it necessary to refer to the authoritiesany further at the present stage, as evidence has not been gone into. Both Mogi& Co. and the Bank are incorporated in Japan though with branch offices invarious parts of the world. It is not shown that the law of Japan or the placeswhere the assets were realised recognises the right of the Official Assignee Itdoes not appear whether Mogi & Co executed any trust-deed, what the termsof the trust were when the deed of trust was executed, what assets have beenrealised, by the Re-adjustment Committee, whether such assets consisted OfImmovable property wholly or partly in Japan or elsewhere or included assets inIndia, whether the property in Japan from which the Bank obtained dividends wasaccording to the law of Japan common fund available to the Assignee inInsolvency for the benefit of creditors generally. There is nothing to showthat the Official Assignee could successfully sue the Bank for the moneyreceived by it in Japan or that the Bank received any money which could beregarded as a part of the common fund available to creditors generally and inconsequence of which the payment of dividends to it could be postponed untilthe other creditors received dividends proportionate to what it had received.In the absence of materials upon the points, the question whether the Bank isbound to bring in the dividends obtained by it in Japan before dividends arepaid to it in the insolvency proceedings here, or whether payment to it shouldbe postponed until other creditors have received proportionately cannot bedetermined.

20. With regard to the 1 lacs of rupees for which the Bankobtained a deed of hypothecation, it is true that the dead has been found to beinvalid. But the amount is said by the Bank to be due to it over and above the1 crore and 52 lacs of rupees, and I do not see why the Official Assigneeshould not consider the claim in the ordinary way when dealing with the rest ofthe claim.

21. I am of opinion that the Bank is entitled to prove itsclaim and the Official Assignee, should consider the proof. The result is thatAppeal No. 129 of 1925 should be allowed and the motion of Messrs. Cur-lender& Co. dismissed with costs of both Courts. The cross-objections aredismissed with costs.

appeal No. 130 of 1925.

22. I have had the advantage of reading the judgment of mylearned brother, and I agree with it. The order of Mr. Justice Pearson will bedischarged and the Official Assignee directed to proceed with the considerationof the Banks proof. No costs to any party in this case.

George Claus Rankin, J.

23. In this case an order of adjudication was made in thisCourt against a firm called Mogi & Co., on the 10th, February, 1921. It wasmade upon the petition of Messrs. S. Curlender & Co., creditors who havesince lodged a proof oil debt which has been admitted by the Official Assignee.The Yokohama Specie Bank Ltd., on the 14th January, 1925, lodged a proof ofdebt claiming that after all securities had been realised, the insolvents wereindebted to it in a sum of Rs. 1,52,23,923. Before the Official Assignee haddecided whether to admit or reject this proof, Messrs. S. Curlender & Co.,on 7th August, 1925, launched a motion before the Judge in Insolvency asking(inter alia) for an order for expunging the proof of the Yokohama Specie Banksclaim or for an order that the aforesaid Bank do pay to the Official Assigneethe amount received by them on account of dividends. The other directions forwhich they asked may be postponed for the present. The motion was dealt with on26th August, 1925, at the same time as an application by the Yokohama SpecieBank, Ltd., for directions as to the mode in which their claim should be provedand for the issue of Letters of Request to take evidence in Japan.

24. The learned Judge had decided, first, that anunconditional order upon the Bank to pay over to the Official Assignee thedividends in question received by the Bank in Japan must be refused. Secondly,that the Bank is not entitled to take part in these insolvency proceedingsuntil it does pay over these dividends. He has accordingly directed theOfficial Assignee not to take any steps to adjudicate on the proof tendered bythe Bank.

25. From this order the Bank has brought Appeal No. 129 of1925 and Messrs. Section Cur-lender & Co. have filed a Memorandum ofCross-objection.

26. The amount of the dividends in question is not provedbut it is apparently a considerable sum and at the opening of this appeal itseemed to me a pity that a matter of importance should be decided upon slightand incomplete materials apart altogether from the question whether the Bankhad a right to a better opportunity of adducing evidence from Japan orelsewhere. In any case it was evident that this question, if decided, could notbe decided in such a way as to bind one creditor only. However, Counsel for theOfficial Assignee after obtaining instructions joined with Counsel for Messrs.S. Curlender & Co. in pressing us to decide the matter on this appealCounsel for the Bank maintaining that evidence from Japan would be necessarybefore anything could be decided against him and that the learned Judge had nosufficient materials upon which to base his decision.

27. In the result, Lam of opinion that as against Messrs. 8.Curlender & Co. and as against the Official Assignee we are, in a positionto decide as follows: First, that the learned Judge was right in refusing tomake an order upon the Bank to pay over to the Official Assignee the dividendsin question Secondly, that the learned Judge was wrong in ordering the OfficialAssignee to stay all proceedings upon the Banks proof unless the Bank firstpaid over to him the dividends in question. Thirdly, that if the proof of the,Bank after due investigation be admitted, a question will then arise as towhether the Bank is entitled to receive any dividend in respect thereof untilthe other creditors shall first have received such dividend as is proportionateto the amount already received by the Bank For the decision of this questionsufficient materials are not before us nor does it require to be decided now.

28. What then are the facts proved by the evidence adducedon these matters. We know that the order of adjudication was made on 10thFebruary, 1921. There is no mention in the affidavits of the date ofpresentation of the petition or of the date of the acts of insolvency on whichthe order was based or as to whether any earlier act of insolvency has beenestablished since which was available at the date of the petition. We knownothing as to the date of commencement of this insolvency save that it was notlater than 10th February 1921 We know that the insolvents are a"firm" called Mogi & Co here, and in Japan called it would seem,Mogi Gomei Kaisha, who are the insolvents we do not know at all except thatthey are the persons who at the date of the order were the partners (B.R. 151).It is, however, conceded at the bar that the head office has been in Japan andthat the Calcutta office and some twenty other offices all over the world werebranch offices. I do not understand it to be disputed that the partners areJapanese. Again though I cannot find that it is properly in evidence, it isconceded that the Yokohama Specie Bank Ltd. or the institution which here andin some other places goes by that name is really a Company incorporated inJapan with its Head Office in Japan. At several places in Japan and in Chinaand in the United States as well as in Calcutta, Bombay, Montreal, London andelsewhere the insolvents carried on business and became indebted to the Bank.At some time in 1920, apparently about October, a meeting of the creditors ofMogi & Co. held in Japan appointed a Re-adjustment Committee. ThisCommittee would appear to have carried out in Japan a liquidation of Mogi &Co.s affairs. It paid not only to Japanese Creditors but also it would appearto creditors, e.g., in Calcutta who applied therefor, a dividend of 12 percent, in January, 1922, and a further 2688 percent, in October, 1922. It seemsthat the creditors who came in under this arrangement did so by executing infavour of the Committee a "power of trusteeship." What this exactlywas cannot be determined on the evidence nor do we know whether Mogi & Co.executed any Trust Deed or other form of assignment. If they did, we do notknow its date. We know nothing of the assets of Mogi & Co. realised by theCommittee. These may have been wholly or partly assets in Japan or in China orin London or anywhere else, but there is not a scrap of evidence that theCommittee intermeddled with any Indian or any British assets. It may be thatthe whole or part of the assets consisted in Immovable property in Japan andelsewhere or it may be that there was nothing but moveable property. What sumwas realised from the Banks securities appears presumably from the figuregiven in its proof of debt. What sum it actually got as dividend on itsunsecured debt does not appear, presumably it got 14,688 per cent, uponsomething. The Committee and its proceedings are stated by the BanksAccountant, Massami Kawada, to be sanctioned by the laws of Japan but beyondthis there is no evidence upon the subject. That its proceedings were illegalunder the law of Japan there is nothing whatever to suggest.

29. This is in effect the evidence upon which the OfficialAssignee and Messrs. Section Curlender & Co. claim to have proved that theyare entitled to cut short all investigation of the Banks proof and to get anorder for payment to the Official Assignee of the unascertained amountreceived by the Bank from the Committee by way of dividend.

30. In my judgment this is not a case of election betweendifferent estates and a creditor lodging a proof can only be required to handover money or other property to the Official Assignee as a condition precedentto his proof being considered in cases where the money or other propertyrightfully belongs to the Official Assignee, that is, where independently ofany claim to prove the alleged creditor could, if, in this country, be sued anddecreed to pay the money or deliver up the property where the money or otherproperty received has not been wrongfully received but has nevertheless beenderived from what falls to be regarded in equity as another part of the totalfund available to creditors proof if allowed upon terms which postpone thereceipt of dividend sufficient to place them upon an equal footing with thecreditor in question.

31. The authorities seem to me to support the followingpropositions.

32. First, Section 17 of the Presidency Towns Insolvency Act(III of 1909) vests in the Official Assignee, the property of the insolventwherever situate and goes on to say that "no creditor shall have anyremedy against that property." This Statute is a Statute of the IndianLegislature. To adopt the phrase of Baron Parke in Cockerell v. Dickens 2M.I.A. 353 : 3 M P.C. 98 : 1 Mont. D. & D. 45 : Morton 407 : 1 S P.C.J. 203: 18 E.R. 334 : 13 E.R. 45, it operates wherever, but not elsewhere, that.Legislature could give the law. This is the principle which English Law itselfapplies to foreign bankruptcies which do not prevent the Courts from making oroblige the Courts to rescind a receiving order at all events where the Foreigncountry is not the debtors domicile In re Artola (1890) 24 Q.B.D. 640 : 59L.J.Q.B. 254 : 62 L.T. 781 : 7 Morrell 80.

33. Secondly, as regards immovables in a Foreign country,such as Japan, the view of international law taken by English and BritishIndian Courts is that our Statutes do not operate unless indeed it is shownthat the Foreign Law will give them effect. This I take to be the view of theJudicial Committee in the case already cited (cf. Westlake, page 182).

34. Thirdly, as regards moveables in a Foreign country, thebasic principle is mobilia sequuntur personam. Prima facie these are governedby the law of the insolvents domicile: Phillips v. Hunter (1895) 2 H. BI. 402: 126 E.R. 618 : 2 R.R. 353, Sill v. Worswick (1791) 126 E.R. 379 at p. 394 : 1H. Bi. 665 : 2 R.R. 816, Cockerell v. Dickens 2 M.I.A. 353 : 3 M P.C. 98 : 1 M.D. & D. 45 : Morton 407 : 1 S. P.C.J. 203 : 18 E.R. 334 : 13 E.R. 45.

35. Fourthly, if the moveable property of an insolventdomiciled here is dealt with by the Courts of a Foreign country in which it issituated in a manner contrary to the rights which our law would have given tothe Official Assignee the person to whom it is adjudged does not hold itwrongfully as against the Official Assignee nor can he be made to deliver upwhat the Foreign Court has given to him except in a case where he too isdomiciled here and the rights of both parties can be limited to those given tothem by our law: Sill v. Worswick (1791) 126 E.R. 379 : 1 H. Bi. 665 : 2 R.R.816. Phillips v. Hunter (1895) 2 H. Bi. 402 : 126 E.R. 618 : 2 R.R. 353. In aproper case coming within this exception our law will act in personam either torestrain proceedings being had or continued abroad or otherwise to give effectto our own law.

36. Fifthly, except in such a case as I have just mentionedby way of exception, where the moveable property of an insolvent domiciled hereis situate in a Foreign country by whose law a person other, than the OfficialAssignee is entitled to obtain possession of it or to receive payment out ofit, such a person cannot be made to refund it to the Official Assignee even ifhe brings what he has received into this country. This was Lord Loughboroughsopinion in Sill v. Worswick (1791) 126 E.R. 379 : 1 H. Bi. 665 : 2 R.R. 816. Insuch a, case the burden of proving what the Foreign Law is would be upon theperson seeking to shelter under it Hunter v. Potts (1791) 4 T.R. 182 : 2 R.R.353 : 100 E.R. 962, Phillips v. Hunter (1895) 2 H. Bi. 402 : 126 E.R. 618 : 2R.R. 353. Lloyd v. Guibert (1865) 1 Q.B. 115 : 6 B. & S. 100 : 35 L.J.Q.B.74 : 13 L.T. 602 : 122 E.R. 1134 : 141 R.R. 352.

37. In the present case we are dealing with a Japanese firmand a Bank incorporated in Japan. It is true that in each of the countrieswhere they had branch offices they have for certain purposes and in some sensea domicile. There is no definite evidence in the case of either as to where theultimate and supreme direction or management was located but we know that theywere both Japanese concerns with head offices in Japan and numerous branchesall over the world. It must be conceded that had the insolvents affairs beenliquidated in Japan by any process of law analogous to bankruptcy, the receiptof, dividends there under would have been in no way wrongful on the part of theBank and postponement of dividends would have been the proper course, Banco dePortugal v. Waddell (1880) 5 A.C. 161 at pp. 166, 167 : 49 L.J. Bk. 33 : 42L.T. 698 : 28 W.R. 477, Ex parte Wilson; In re Douglas (1872) 7 Ch. 490 : 41L.J. Bk. 46 : 26 L.T. 489 : 20 W.R. 564. Can it be laid down that a liquidationby arrangement or a creditors deed is on a different footing altogether la itreally the view of our law that a creditor in Japan or in China had prima facieno right to transact further business with Mogi & Co. from the moment theadjudication order was made in Calcutta That a Japanese creditor could noteven sue for his debt in the country of his own and the debtors domicilewithout the leave of the Calcutta Court, that he should prima facie haveregarded even the Japanese assets as under administration by this Court, andresorted here with his proof of debt I do not doubt that it is the duty of theOfficial Assignee to get in moveable property abroad if he can. Nor do I doubtthat our law proceeds historically on the basis of an assignment of all hisproperty by the debtor. But if the principle be mobilia sequuntur personam, andif this be the view of international law accepted by our Courts, it is surelynecessary as against a Japanese Bankto prove that the law of the place orplaces where the assets were recovered recognises the title of the OfficialAssignee notwithstanding that the domicile of the insole vents was Japanese andthat they have in fact made no voluntary assignment before a claim can beestablished to treat the recovery as wrongful assuming that the dissentingjudgment of Eyre, C.J., in Phillips v. Hunter (1895) 2 H. Bl. 402 : 126 E.R.618 : 2 R.R. 353, was wrong the case being one between Englishmen, it is stillfor a case of the present type and on the present point unanswerable in myview] and if the recovery be not shown to be wrongful, upon what principle canthe case be treated differently from a case of double bankruptcy or a casewhere a foreign creditor has obtained payment abroad by execution after thecommencement of the bankruptcy: Ex parte Wilson; Inre Douglas (1872) 7 Ch. 490: 41 L.J. Bk. 46 : 26 L.T. 489 : 20 W.R. 564. Banco de Portugal v. Waddell(1880) 5 A.C. 161 at pp. 166, 167 : 49 L.J. Bk. 33 : 42 L.T. 698 : 28 W.R. 477.The language used in Selkrig v. Davies (1814) 2 Dow. 230 : 3 E.R. 848 : 2 Rose291 : 14 R.R. 146, and in the older case having reference to English creditorsof English brankruptcy cannot govern such a case as the present cf. as toSelkrigs case (1814) 2 Dow. 230 : 3 E.R. 848 : 2 Rose 291 : 14 R.R. 146.Westlake on International Law, 7th Ed., at p. 177. But in any case the languageused in the old cases as to "refunding what he has received and coming inequally with the rest of the creditors" cannot be taken, at the foot ofthe letter in modern bank, ruptcy practice and applied to foreign creditors ofpersons domiciled abroad. "Bringing into the common, fund" is aprinciple of distribution and nothing more in such cases as the present, as isindeed, amply shown by the judgments in Ex parte Wilson; In re Douglas (1872) 7Ch. 490 : 41 L.J. Bk. 46 : 26 L.T. 489 : 20 W.R. 564, and Banco de Portugal v.Waddell (1880) 5 A.C. 161 at pp. 166, 167 : 49 L.J. Bk. 33 : 42 L.T. 698 : 28W.R. 477.

38. In my opinion, this motion has been brought upon whollyinsufficient materials and as the Official Assignee and Messrs. S. Curlender& Co. have, persisted in claiming a decision now I think the decisionshould be given now against them. The question as to the advance made under thedeed of hypothecation of 14th July, 1920, which has been set aside will bedecided in the ordinary way when the Official Assignee comes to admit or rejectthe proof. So, too, with the question whether the Bank has, by acceptingdividends in Japan, agreed to release the balance of its debt.

39. In Appeal No. 129 of 1925 the proper order, in myopinion, is to allow the appeal and dismiss the motion with costs both here andbelow. The Cross-objections should be dismissed with costs.

George Claus Rankin, J.

40. This appeal is against an order whereby the learnedJudge in insolvency has dismissed the application of the Yokohama Specie, Bank,Ltd. for directions as to the manner in which its proof of debt shall beevidenced and for Letters of Request for the examination of witnesses in Japan.

41. The proceedings disclose that there has been somemisapprehension as to the proper practice in dealing with a proof, of debt, andas to the rights of one creditor to dispute proof lodged by another. Theaffidavit of Mr. Curlender appears to proceed, on the view that the OfficialAssignee has to preside over a formal litigation between creditors as to theirrespective proofs of debt. I do not know where this idea comes from: it mayhave been the practice under the old Statute 11 & 12 Vic. C. 21 and it maybe that something very like it is contemplated by the Provincial insolvency Act(Act V of 1920) but this sort bellum omnium contra omnes is entirely out ofplace under the Act of 1909 which embodies the scheme of the English BankruptcyActs, a plain and business-like scheme. A main object in vesting all theinsolvents property in the Official Assignee and in requiring him to admit orreject proofs is to avoid any such proceedings. The Official Assignee is tomake up his own mind, to satisfy himself as to the justness, of the claim, justas any other Receiver may have to do. He has to examine the proof. His, dutyis, to put no creditor to unnecessary delay or expense. If he admits a proofany other creditor may apply to have the proof expunged. If he rejects theproof there is an appeal to the Judge. It is at. this stage and not before thattechnical questions of proper evidence may arise and any creditor litigating inthis manner about another creditors proof does so at his own risk as to costs.Before that; stage is reached every creditor has prima facie to bear the costof proving his own debt (Scheduled II, 26), other creditors are entitled toinspect a proof and, of course, may and should give all relevant informationand assistance to the Official Assignee. The Official Assignee may use Section36 to obtain information as to any proof. Again on taking proper steps theOfficial Assignee may have the benefit of Counsels opinion on any points oflaw. Nothing could be more proper in a case like the present than for theOfficial Assignee to ask the Banks, representative to come to his office to gothrough the relevant papers, give explanations and take his view as to the furtherevidence required to satisfy him and as to the most convenient way of obtainingit. It is doubtless very well that he should record a minute of what takesplace but if other creditors are to be there at all, a course of very doubtfulwisdom, they must be prevented from turning such proceedings in to anunauthorised form of litigation. They can litigate at the right time before theCourt and until that time comes, they may well be content with giving to theOfficial Assignee any information they have got and leaving the rest to himunless indeed they desire to apply-under Section 36 themselves. At the presentstage the Official Assignee should make up his own mind, as a reasonablebusiness man as to the matters on which he desires further evidence and thekind of evidence necessary to convince him.

42. In my opinion, this proof of debt should go back to theOfficial Assignee to continue his examination thereof. By way of assistance tohim in showing hew he ought to look at the matter I will take the case, forexample, of the report of the Re-adjustment Committee. The Official Assignee,when, the document is produced, must makeup his mind whether he is reallysatisfied that it is the report or a true copy thereof. If he is hot, then onesensible thing would be to ask for an affidavit from Japan verifying it asbeing a true copy of the report. As regards the truth of the contents of thereport or any particular facts arising there; on, he will doubtless require anaffidavit of some one who took a responsible part in the Committees work inJapan. Again, if the account between the insolvents and the Bank at anyparticular place has to be scrutinized, presumably, to begin with, a, certifiedcopy of the account would be sufficient to enable the Official Assignee to feelsure that the document is not a fabricated document. If he wants a further anda better list or particulars as regards the Banks securities, how they wererealised or otherwise, he may call for it and let it be verified by some onewhom he can take to be a responsible man, in a reasonable manner by anaffidavit or in some such way. He will in this way go as far as he can in theordinary line of a business-man applying his own common sense in a matter wherehe has to form his own opinion. He has to satisfy himself. Of course when hehas done all he can do in this way, it may be that he will want to examine somewitnesses in Japan, or he may think it fair and proper to reject the proof. Inthe end he will admit or reject the proof in whole or in part and anybodydesiring to challenge his-decision will then under the ordinary rules of theCourt get the most ample opportunity to do so but upon the ordinary terms. Iconsider that the proper order in this, appeal is to discharge the order of thelearned Judge and to direct the Official-Assignee to proceed with theconsideration of the Banks proof and to allow no costs in either Court to anyparty.

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Mogi and Co. and Ors.vs. S. Curlender and Co. (01.03.1926- CALHC)