privilege upon the property of an insolvent should be created for a judgment debt by the issue or delivery to the sheriff of an execution, etc., was valid. Ritchie, C.J., said, "An Insolvent Act must necessarily conflict with previously existing legal rights, and insolvency is a subject over which the Dominion Parliament has the exclusive power of legislation. So that a Dominion statute in relation to insolvency overrides all provincial enactments."

In Ontario the law is in an unsatisfactory state. The leading decision shows such a difference, such a variety, of opinion that it seems hopeless to reduce the different expressions of opinion to any definite form. The Act in question in Clarkson v. Ontario Bank (u) partakes largely of the nature of an Insolvent Act, or an Act for the rateable distribution of the property of insolvents amongst their creditors. The basis or origin of the Act was an Act passed by competent authority directed against the preference of one creditor over another itself an Insolvent Act in its results; for if no one creditor can gain a preference over another, all must share rateably. The Act lay dormant, so to speak, while the Dominion Insolvent Acts were in force, but upon the repeal of the Insolvent Act the provisions of the original Act were frequently brought into play. Thenceforward amendments were made which provided indirectly for an equitable distribution, and directly took away, or attempted to take away, the priority of execution creditors which they had by virtue of their writs. To pass such a law, a law which directly or indirectly should secure to creditors a rateable distribution, would seem to be an impossibility, when the jurisdiction to deal with insolvents has been confided to another lawmaking body. "No doubt," said Burton, J.A., in the case referred to, "great difficulty was experienced by the framers of the amendment so to word it as to secure as nearly as possible to creditors the benefits of a bankrupt law without exceeding their jurisdiction." Especially, is it so, when as a matter of fact, to quote again from the learned Judge, some of the sections, "such as section 6, have an alarming

(u) 15 App. R. 166.

similarity to provisions to be found in our former insolvency law."

Judicial opinion being completely divided upon the validity of the Act, it will be necessary to examine the views expressed on each side. It was urged on behalf of the Act (i) that it did not provide any compulsory means of distributing the debtor's estate; (ii) it did not provide for the debtor's discharge, and consequently that it was not a Bankruptcy or Insolvency Act; (iii) it dealt with property and civil rights; (iv) the power was inherent in the former Provincial Legislatures to deal with the subject, and the British North America Act did not destroy it but suspended it only while the Dominion Parliament exercises its rights. This last proposition is not dealt with in the judgments, and is contrary to authority. In fact Mr. Justice Burton, who was in favour of the validity of the Act, expressed himself thus: "It would perhaps have been wiser if the framers of the Confederation Act had provided that in the event of the Dominion neglecting to pass a Bankruptcy Act the Legislatures of the several Provinces should have the power, as is the case in the several States in the Union where Congress omits to pass a general bankrupt law;" which negatives the proposition. We propose to deal with the other objections.

Upon the first objection that the Act did not provide any compulsory means of distributing the debtor's estate, Hagarty, C.J., said, speaking of the Canadian statute of 1864, that it "provided fully for a debtor becoming subject to the law by a prescribed voluntary assignment, and among the specified acts of bankruptcy is a general conveyance of his property for his creditors, other than as prescribed by the Act. It is a well-known fact that under that statute the very large majority of bankruptcies were founded on the voluntary assignment of the debtor. I entertain the opinion that an Act providing for the judicial administration of insolvent estates is not the less an Act on bankruptcy and insolvency, because it happens that it only provides for the application of its provisions to the -case of persons voluntarily putting it in operation, or be

cause it does not provide for compulsory liquidation on ordinary acts of bankruptcy." And again, "An Act, in my opinion, is no less an Insolvent Act, because it is deficient in some of the usual provisions of insolvency legislation." Osler, J.A., considered the Act of a general and public character, purporting to deal with the estates of all insolvent debtors who made assignments, and prescribing to whom and in what manner they should make such assignments, and directly affecting, too, all creditors.

On the other hand, Burton, J.A., said, "There is nothing compulsory upon the debtor. The only effect of his making a general assignment otherwise than the Act provides is, that the transfer is possibly liable, though not so in my opinion, to be avoided by a non-assenting creditor under the previous section. That is a matter which the Provincial Legislature having exclusive power to deal with property and civil rights have clear authority to enact." Again, "The Act now before us does not compel an assignment in a particular form, but provides that if executed in a particular effect it shall have a certain effect," which is going perilously near to saying that the Provincial Legislature can deal with assignments in insolvency so as to give to them or take from them certain effects. If it be admitted that the Dominion Parliament could pass an Insolvent Act providing for voluntary assignments only, and it will hardly be denied that it can do so, their power to do so must exist because of the power given to it to legislate on bankruptcy and insolvency, and to that extent to invade the domain of property and civil rights. Hence this power is expressly withheld from the Provincial Legislatures by the 91st section of the British North America Act.

As to the second objection, that the Act did not provide for the discharge of the debtor. The Chief Justice points out that the earliest Bankrupt Act in England did not do so, and that the provision was first introduced in Queen Anne's reign. If the British North America Act is to be construed, when using the term bankruptcy, as speaking from a knowledge of the bankruptcy laws of England, and

affected thereby, it must bear the intent to include in the term bankruptcy every fragment of the law; and the history of the Acts in England distinctly shows their growth. It does not follow that because the modern Act provides for the debtor's discharge that that will always be the policy of bankrupt laws. The Parliament might return to an ancient law. Whether it is good or bad policy is immaterial. The genius of the law would allow it, and the power to make that law was confided to the Dominion Parliament. If it chose to enact in Canada the Bankrupt Act of Henry VIII., which did not provide for the discharge of the bankrupt, it might do so. The Act would be valid. Consequently, such an Act could not be passed by a Provincial Legislature.

As to the third objection, that the Act dealt with property and civil rights. In Cushing v. Dupuy, and several other cases before the Judicial Committee it has been expressly laid down that the Dominion Parliament must necessarily infringe upon property and civil rights in dealing with many of the subjects confided to it. In fact the whole scope of an insolvency law is to infringe upon civil rights to the extent that the preferences and priorities which creditors might otherwise have are completely swept away; and to infringe upon property laws by taking all the debtor's property and subjecting it to judicial distribution amongst the creditors.

In addition to the reasons given by Hagarty, C.J.O., and Osler, J.A., why these objections should not prevail, there are other reasons given by them for holding the Act to be an Insolvent Act. The assignee is specially empowered to contest in a new right the acts and dealings of the debtor prior to the conveyance-a right naturally and almost necessarily given in an Insolvent Act. It gives the assignment priority over judgments and executions not executed by payment; in other words attempts to take away the liens of execution. creditors, a provision of the Insolvent Act of the Dominion. which had previously been held to be valid. It prescribes the mode of administering the estate, and bars creditors who do not come in within a certain time. It is then

pointed out that this Act re-enacts parts of the late Insolvent Act, and if this can be done piecemeal, and each Act supported under the guise of dealing with property and civil rights, the whole insolvent law might be enacted by the Provinces in pieces.

On the other hand Mr. Justice Burton says, "If the Parliament of the Dominion were to pass a bankrupt law, they would, I entertain no doubt, declare that any assignment for the benefit of creditors made otherwise than in the manner prescribed by that Act, should be an Act of bankruptcy, and void." Yet that is practically what the Provincial Legislature attempts to do. It does not compel the debtor, it is true; but what of that? It practically forbids him to proceed in the rateable distribution of his estate in any way but one-which is the same as saying he must proceed in the one way only; if the Dominion could do that and act within its jurisdiction, it shows that that jurisdiction does not lie with the Provinces.

And again, "It by no means follows that because the Dominion has the exclusive power to make laws having for their object the establishment of one uniform system of bankruptcy throughout the Dominion, that in the absence of such laws the Provinces are debarred from securing as far as possible an equal distribution of the assets of debtors who cannot pay their creditors in full." We find it difficult to give assent to this. If the power of the Dominion is exclusive, the Provinces have nothing to do with the uniform or equal distribution of assets; we can only assent to it by giving full weight to the phrase “as far as possible," and then denying the possibility on account of the exclusive jurisdiction of the Dominion Parliament.

The decisions are thus in a most unsatisfactory state. The reasons given by the Chief Justice and Mr. Justice Osler seem impossible to answer; and with all deference due to the other Judges of the Court, they do not give reasons other than those of policy for upholding the Act.