And he is not sippet fm exersing is ng of elect by the receipt of a dividend fun de esure if he rehat i was ja per cent imterest (b)), A jumti ant segance creare, bring a security on the separate estate of the partner in us your and separate lects may apply the proceeds of his semary as may be mis atramage Er pie Dickim, In re Foster, 1 R x Eg As a rule a partner at give aging the joint estate in competition with the print creditors, who are in fact his own creditors, nor can the firm prove against the separate estate of one partner in competition with the Separate credities. Naxos v. Gerdim, 1 App. Cas, 195). There are, however, two exceptions to these rules: (1.) Where the property of a partner has been fraudulently applied to partnership purposes, or the property of the partnership to the use of a partner (Ex pte Säilita, 1 GL & J., 374, at p. 382; Ex pte Harris, 2 V. & B., 210, 1 Rose, 437; Read v. Bailly, 3 App. Cas., 94). (2.) Where the partners, or some or one of them, carry on a distinct and separate business and the debt has arisen out of a dealing between trade and trade (Ex put Sillitoe, suprà; Ex pie Williams, 3 Mont. D. & D. G., 433; Ex pte Maude, In re Braginton, L. R. 2, Ch. 550). One partner cannot prove against the separate estate of another partner, so long as there are any joint debts and a possibility of such separate estate being liable for them (Ex pte Carter, 2 Gl. & J., 233; Ex pte Ellis, 2 Gl. & J., 312; In re Dixon, Ex pte Gordon, L. R. 10, Ch. 160, affirmed sub tit. Nanson v. Gordon, I App. Cas., 195). · But if the separate estate is insufficient for the payment of the separate creditors, then, as there will be no surplus for distribution amongst the joint creditors, and consequently no competition with them, the partners may prove (Ex pte Topping, 4 De G. J. & S., 551; Ex pte Sheen, In re Wright, L. R. 6, Ch. 235 cf. Lacey v. Hill, L. R. 8, Ch. 441). So, too, when a partner has paid all the joint debts, he may prove against the separate estates of his other partners for the share which each ought to have borne (Ex pte Watson, 4 Madd., 477; Ex pte Young, 2 Rose, 40, Buck, 449); the payment must be actually made, giving an indemnity not being sufficient (Ex pte Moore, 2 Gl. & J., 166). (4.) Subject to the provisions of this Act all debts. proved in the bankruptcy shall be paid pari passu. Debts arising from voluntary bonds or covenants, which cannot be impeached, must be paid pari passu with the ordinary debts of the bankrupt (Ex pte Pottinger, In re Stewart, 8 Ch. D., 621); see s. 47, as to the avoid ance of voluntary settlements, which is now applicable to non-traders as well as traders. (5.) If there is any surplus after payment of the foregoing debts, it shall be applied in payment of interest from the date of the receiving order at the rate of four pounds per centum per annum on all debts proved in the bankruptcy. Any ultimate surplus after payment of the costs belongs to the bankrupt (s. 65). s. 40. (6.) Nothing in this section shall alter the effect of section five of the Act twenty-eight and twenty-nine Victoria, chapter eighty-six, "to amend the Law of Partnership," or shall prejudice the provisions of the 38 & 39 Vict. Friendly Societies Act, 1875.2 1 The Partnership Law Amendment Act, 1865 (28 & 29 Vict., c. 86), provides that, a person may lend money to a trader on a contract in writing upon the terms that he shall receive interest varying with the profits of the business or a share of the profits, without being thereby constituted a partner or rendered responsible as such. Section 5 provides in effect that, in the event of the bankruptcy, or insolvency, or death of the trader insolvent, the lender of any such loan shall not be entitled to recover any portion of his principal or of the profits or interest payable in respect of his loan until the claims of the other creditors of the trader for valuable consideration in money or money's worth have been satisfied. If a person make a loan of this kind and at the same time take a mortgage, his rights under the mortgage will not be interfered with by that section (Ex pte Shiel, In re Lonergan, 4 Ch. D.,7 89, overruling Ex pte Macarthur, In re Ramsden, 40 L. J. Bankr., 86). Where money has been advanced under an agreement, falling within the purview of that Act, which is subsequently put an end to by the parties and bills are given for an ascertained sum then due thereunder, no proof can be made in respect of such bills until all the other creditors have been satisfied; but monies lent by the same person to the same trader at interest, independently of such agreement, may be proved like any other debt (Ex pte Mills, In re Tew, L. R. 8, Ch. 569; Ex pte Taylor, In re Grason, 12 Ch. D., 366). See, further, as to the construction of that Act (Pooley v. Driver, 5 Ch. D., 458; Ex pte Delhasse, In re Megevand, 7 Ch. D., 511). 2 The Friendly Societies Act, 1875 (38 & 39 Vict., c. 60, s. 15 (7)), provides that " upon the death, or bankruptcy, or insolvency of any officer of a society having in his possession by virtue of his office any money or property belonging to the society, .. his heirs, exe c. 60. cutors, or administrators, or trustee in bankruptcy or insolvency ss. 40, 41. them, or any person authorised by the society, or by the committee of management of the same, to make such demand, pay such money and deliver over such property to the trustees of the society in preference to any other debts or claims against the estate of such officer." Preferential claim in case of apprentice ship. "The right given is one against the common rights of Her Majesty's subjects, and therefore those who claim that right must bring themselves within the express provisions of the statute," per Fry, J., who held that a bank, being a corporation, could not fill the office of treasurer of a friendly society (In re West of England Bank, Ex pte Swansea Friendly Society, 11 Ch. D., 768). It had previously been held that the bankers of a society could not be said to hold any office (Ex pte Harris, De G., 162; Ex ple Whipham, 3 Mont. D. & De G., 564). Where the treasurer of a society was a member of a banking firm, by whom an account was kept in the names of the trustees of the society, the treasurer making an annual return of the balance of the account as being moneys in his hands, it was held, on the bankruptcy of the firm, that the society was entitled to priority against the separate estate of the treasurer (Ex pte Riddell, 3 Mont., D. & De G., 80). The money must be due from the officer by virtue of his office, and the priority will not be extended to moneys due from him under a contract or loan (Ex pte Stamford Friendly Society, 15 Ves., 280; Ex pte Ross, 6 Ves., 802; Ex pte Fleet, 4 De G. & Sm., 52). The benefit given by that Act is not lost by reason of the society neglecting for some time to require security, or to audit the accounts of its officers (Absolom v. Gething, 32 Beav., 322). 41.-(1.) Where at the time of the presentation of the bankruptcy petition any person is apprenticed or is an articled clerk to the bankrupt, the adjudication of bankruptcy shall, if either the bankrupt or apprentice or clerk gives notice in writing to the trustee to that effect, be a complete discharge of the indenture of apprenticeship or articles of agreement; and if any money has been paid by or on behalf of the apprentice or clerk to the bankrupt as a fee, the trustee may, on the application of the apprentice or clerk, or of some person on his behalf, pay such sum as the trustee, subject to an appeal to the Court, thinks reasonable, out of the bankrupt's property, to or for the use of the apprentice or clerk, regard being had to the amount paid by him or on his behalf, and to the time during which he served with the bankrupt under the indenture or articles before the commencement of the bankruptcy, and to the other circumstances of the case. If the apprenticeship fee has been paid and the apprentice actually ss. 41, 42. serves under the agreement, although the indentures are not executed, he will be entitled to the benefit of this section (Ex pte Haynes, In re Donkin, 2 Gl. & J., 122). (2.) Where it appears expedient to a trustee, he may, on the application of any apprentice or articled clerk to the bankrupt, or any person acting on behalf of such apprentice or articled clerk, instead of acting under the preceding provisions of this section, transfer the indenture of apprenticeship or articles of agreement to some other person. landlord to 42.-(1.) The landlord or other person to whom any Power to rent is due from the bankrupt may at any time, either distrain for before or after the commencement of the bankruptcy, rent. distrain upon the goods or effects of the bankrupt for the rent due to him from the bankrupt, with this limitation, that if such distress for rent be levied after the commencement of the bankruptcy it shall be available only for one year's rent accrued due prior to the date of the order of adjudication, but the landlord or other person to whom the rent may be due from the bankrupt may prove under the bankruptcy for the surplus due for which the distress may not have been available. (2.) For the purposes of this section the term "order of adjudication" shall be deemed to include an order for the administration of the estate of a debtor whose debts do not exceed fifty pounds, or of a deceased person who dies insolvent. Subject to the limitation prescribed by this section, a landlord can distrain for rent notwithstanding a receiver has been appointed and is in possession of the bankrupt's property (Ex pte Till, In re Mayhew, L. R. 16, Eq. 97; Ex pte Cockrane, In re Mead, L. R. 20, Eq. 282). If a trustee continues in possession of property, of which the bankrupt was tenant, without disclaiming, the landlord can distrain for rent accrued due after the commencement of the bankruptcy (Ex pte Hale, In re Binns, 1 Ch. D., 285), but if he has distrained once after the bankruptcy for a year's rent, he cannot distrain a second time for rent accrued due subsequently, as the effect would be to allow him more than one year's rent in full (Ex pte Sir W. Hart Dyke, In re Morrish, 22 Ch. D., 410). ss. 42,43. “Other person to whom any rent is due" means a person standing to another in a position analogous to that of a landlord to his tenant, or a person who is empowered to recover rent or charges by the same means as a landlord (Ex pte Birmingham and Staffordshire Gas Light Co., L. R. 11, Eq. 613 cf. Ex pte Hill, In re Roberts, 6 Ch. D., 63). Relation back of trustee's title. A distress may be levied for rent due under an attornment clause in a mortgage deed, provided that the fair inference to be drawn by the Court is, that the clause was intended to create a real rent and a real tenancy, and was not a mere device to evade the bankruptcy laws and inserted to give the mortgagee in the event of the bankruptcy of the mortgagor an additional security upon chattels which would otherwise have been distributed among other creditors :-in the cases of In re Stockton Iron Furnace Co., 10 Ch. D., 335, Ex pte Voisey, In re Knight, 21 Ch. D., 442, and In re Threlfall Ex pte Queen's Benefit Building Society, 16 Ch. D., 274, the clause was held valid, but in the cases of Ex pte Williams, In re Thompson, 7 Ch. D. 138, and Ex pte Jackson, In re Bowes, 14 Ch. D., 725, invalid. If the deed is otherwise unimpeachable a distress may be levied under an attornment clause in a second mortgage, notwithstanding that the mortgagor has already attorned tenant to the first mortgagee of the same property (Ex pte Punnett, In re Kitchin, 16 Ch. D., 226; Morton v. Woods, L. R. 4, Q. B., 293). Where two tenants in common mortgaged property on which they carried on business in partnership, and each separately attorned tenant to the mortgagor, it was held the mortgagor could not distrain upon the partnership property (Ex pte Parke, In re Potte, L. R. 18, Eq. 381). The relation of landlord and tenant created by the attornment clause exists merely for the purposes of the security, and does not therefore derogate from the mortgagee's rights as such, hence he was held entitled to certain trade fixtures put up on the mortgaged premises (Ex pte Punnett, In re Kitchin, 16 Ch .D., 226). If a landlord should prove for his rent instead of levying a distress, he is restricted to his right of proof and cannot afterwards distrain (Ex pte Grove, I Atk. 104)). Payment to a landlord who is about to distrain even after an act of bankruptcy is a protected transaction (Stevenson v. Wood, 5 Esp. 200), provided it be for not more than a year's rent accrued due prior to the order of adjudication. Property Available for Payment of Debts. 43. The bankruptcy of a debtor, whether the same takes place on the debtor's own petition or upon that of a creditor or creditors, shall be deemed to have relation back to, and to commence at, the time of the act of bankruptcy being committed on which a receiving order is made against him, or, if the bankrupt is proved |