were then removed by the purchaser, the trustee afterwards disclaimed the lease, it was held by the Court of Appeal upon the construction of the 23rd sect. of the 1869 Act, reversing Bacon, C.J., that the lease was in effect surrendered as from the date of the trustee's appointment, and the proviso for removal of the fixtures was by construction of law with all the other provisions of the lease put an end to before the removal, the removal could not be justified, and the lessor was entitled to the proceeds of the sale (b). § 55. In Ex parte Sir W. Hart Dyke re Morrish (c), the Court of Ex parte Hart Dyke re Appeal again fully considered the effect of a disclaimer, both as Morrish. it affected the landlord's right of distress, and to damages, as well as the trustee's rights and liabilities. M. occupied a farm under a lease from H. D., dated 4th October, 1873, at a rent of 7501. payable half yearly on the 29th September and 24th March. The lease also contained covenants inter alia, that the lessee would yearly "during the continuance of the demise lay up and stack on the farm all the corn, and grain, and hay grown thereon, and consume upon the farm such of the hay, straw, haulm, clover, and roots which should be raised thereon, and which should not have been sold by the lessee." With a proviso that it should be lawful for the lessee to sell from time to time, and to carry off and remove from the farm any of the hay, straw, &c., which should be grown thereon, on his feeding and consuming on the farm a certain quantity of cattle and do other acts. The lessee had also the right to build labourers' cottages, the lessor to pay at the end of the term for such cottages at a valuation, and also for "all the hay and straw grown in the last year (which should be left for the succeeding or incoming tenant) at a feed price," and also for manuring seeds, &c. There was also a proviso for re-entry and forfeiture for non-payment of rent, or breach of covenants, or in case the lessee, &c., should "by his own act, default, or procurement, whether voluntary or not, or by virtue of or under any Act of Parliament . . . lose, be deprived of, or cease to be entitled to the actual possession," with a proviso in favour of the lessor's right of distress. M. erected three cottages, but failed to pay the rent, which fell due on the 29th September, 1880, and 24th March, 1881; and on the 5th September, 1881, filed his petition; and on the 23rd September, a (b) Glegg ex parte re Latham, 19 Ch. D. 7; 51 L. J. Ch. 367; 45 L. T. 484. (c) Supra. BB 8 55. receiver was appointed, who then took possession. On the 13th September, 1881, H. D. levied distress for 6717. 9s. 9d., one year's rent (less deductions) due up to March, 1881; and for 337. 10s. the expenses of the distress, all of which the receiver paid. On the 13th October three trustees were appointed under the liquidation then resolved upon, and they took possession; and on the 14th October, H. D. commenced an action to recover possession. Appearance having been entered, the action was not gone on with; but on 25th October another distress was levied for rent and costs, 3947. 15s., due 29th September. A consent order was afterwards made, directing the withdrawal of the distress on payment of the money into Court. On the 14th November, 1881, on the application of the trustees on notice to H. D., leave was given to them to disclaim on or before the 18th November, on payment of proportion of rent from the 5th September (date of petition) to the 29th September (term day), and to give up possession. On the 14th November, the trustees executed disclaimer, having sent cheque for 491. 68. 4d., proportion of rent to H. D. (which was returned), and on the same day withdrew from possession. On the 21st November, H. D. took possession. Then, as well as on the trustee's appointment, there was on the farm, hay and straw, grown partly in 1880, but chiefly in 1881. H. D. claimed the whole of it without payment; but the trustees also claimed it as theirs, and insisted if the landlord claimed it, he should pay for it at market prices. They also claimed to be paid for labour on fallows and manures. H. D. also claimed hop-poles which the trustees had taken and sold; also the tenant's fixtures then on the farm; also damages for breaches of lessee's covenants alleged to have been committed between the granting of the lease and the filing of the petition. The Registrar having decided that H. D. was entitled to the rent paid into Court due up to the 29th September; that the trustees were entitled to the hop-poles; that H. D. should pay for hay and straw at the market price on 21st November; but that H. D. was not liable to pay either for the cottages, nor for acts of husbandry, nor for tenant's fixtures, and that he was not entitled to claim damages in respect of breaches of covenant; the trustees appealed to the Chief Judge against so much of the order as directed the rent to be paid to H. D. ; and H. D. appealed against so much of the order as directed that he should pay for " hop-poles," and the hay and straw, § 55. and by which it was declared that he was not entitled to damages. The Chief Judge discharged the order so far as it affected the rent, holding that the distress for rent accrued due after the petition; but that in all other respects, the lease having been determined, and being at an end, the order was upheld. From this decision H. D. appealed, and subject to a slight variation (in favour of H. D. as to the hay and straw which was out in 1880, and which ought to have been consumed), the decision of the Chief Judge was confirmed by the Court of Appeal, and the following propositions laid down:--(1) The trustee may disclaim even though the lease has been Principles laid determined by effluxion of time, or by forfeiture between his appointment as trustee and the execution of the disclaimer. And in such a case the effect of the disclaimer is that both the lease itself, as well as the term, is put an end to, and so neither the lessor nor the trustee can claim the benefit of any provisions contained in the lease which were to come into operation at the expiration or sooner determination of the term (d). But semble, that the trustee may also disclaim a lease which has been disclaimed before his appointment. (2) The effect of Sect. 34 of the Act of 1869 was to limit the landlord's right of distress after the bankruptcy to one year's rent, accrued due prior to the filing of the petition for liquidation (i.e., the commencement of the liquidation) (dd). (3) In respect of breaches of covenant committed by the tenant during his occupation, the landlord's only remedy is to prove for damages, and he has no right of set-off as against moneys due by him to the trustee for severed crops (e). (4) But quære, when a lease contains a proviso giving the lessor a right to re-enter in the event of breach of covenant by the lessee, but not making the lease ipso facto void in that event, whether under the present practice, the mere commencement of an action by the lessor to recover possession of the property for breach of covenant, or the commencement of such action, followed by appearance by the trustees, will, without actual entry, operate to determine the lease (ƒ). down. 8 55. Application of rules. Except as to leave. Contract is not determined. Where, however, there is an express stipulation that the tenant should have the fixtures, the trustee was held justified in removing them notwithstanding disclaimer (g). It is submitted that where the leave is now sought and is about to be given under Sub-s. 3, the rules laid down in the cases cited will still be useful as guides if not absolutely applicable, both as regards the trustee's liability for rent, and in respect of the several rights of landlord and tenant to fixtures, tenant's improvements, &c. As to period when lease is to be deemed surrendered, see General Rules. See also cases where no leave is necessary, General Rules. Onerous and Unprofitable Contracts. The same rules substantially, which are applicable to disclaimer of leases, will also enable the trustee to disclaim onerous or unprofitable contracts, or shares or stocks in companies, and any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money. And by this section the same limits are given, i.e., three months after his appointment, for the trustee to disclaim, and twentyeight days after the receipt of an application to disclaim (h). It would seem that no leave is required where the contract is not a lease, and, therefore, in all ordinary cases, even of tenancies, the trustee can disclaim without such leave, and the party affected is left to the right to make application under Sub-ss. 5 or 6. The contract itself seems not to be determined upon the execution of the disclaimer. The language of this section determines only the bankrupt's interest or liability, or the liability of his property and the trustee's interests, and no more ; the contract for all other purposes, as regards other persons continues to subsist. T. (N. S.) 404; which was com. with the case of Ex parte Sir Hart Dyke; and see W. N. July 7, 1883, C. A. (g) Ex parte Gregg re Latham, supra. (h) Sub-s. 2. See also sub-s. 5, as to rescission of contracts and the payment of damages by or to either party; and sub-s. 6 as to vesting the property in person entitled. In this Act there are no words, as in the Act of 1869, §§ 55, 56. directing to whom the property should revert, but the Court, when applied to, is to make an order vesting the property either in the person entitled or in such other person to whom the Court thinks just that it should be delivered by way of compensation, to any such person who may be under a liability not discharged by the Act in respect of such property (i). Under the Act of 1869 it was held that, after a disclaimer of freehold property, subject to an equitable charge by the trustee of the mortgagor, the legal estate reverted to the Crown (k). It is to be borne in mind that, as to contracts which are not Contracts not subject to same leases, the rule as to the trustees liability under the 1869 Act rule as leases. was not the same as the rule laid down as applicable to leases in the cases already considered. So, where a trustee on being called upon to decide whether he would or would not disclaim a contract entered into with the bankrupt, declined or neglected to disclaim, he was held not to have impliedly adopted the contract, either personally or on behalf of the estate, and therefore that he was entitled at any subsequent time to cease to perform it, leaving to the party with whom the contract was made to his remedy, and the right of proof for the measure of injury sustained at the time of breach (1). But now Sub-s. 1, 2, and 4, seek to make clear what effect a failure to disclaim will have as regards all such contracts, and the trustee's liability. 56. Subject to the provisions of this Act, the trustee Powers of may do all or any of the following things: trustee to deal with property. Act, 1869, 8. 25. (1.) Sell all or any part of the property of the bankrupt Bankruptcy (including the goodwill of the business, if any, and the book debts due or growing due to the bankrupt), by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels : (2.) Give receipts for any money received by him, (i) Sub-s. 6. (k) Re Mercer and Moore, 14 Ch. D. 287; 49 L. J. Ch. 201; 42 L. T. 311. A trustee who purchases upon the bankruptcy of a mortgagor from the first mortgagee, although in the interest of creditors, cannot defeat the rights of a second mortgagee, (1) Ex parte Davis re Sneezum, 3 |