per § 42. The previous cases were considered and applied in the case of Ex p. Voisey, re Knight, 21 Ch. D. 442. The facts were these: K. borrowed from a building society £7,500, repay- Ex p. Voisey, able with interest at 7 per cent. per annum by monthly instal- re Knight. ments of £71:17s. 6d. If the monthly instalment was not paid when due the borrower was liable to a fine at the rate of 5 cent. per month on the total amount in arrear. K. mortgaged real estate to the trustees of the society to secure the £7,500. The deed was not executed by the trustees, or registered as a bill of sale. The mortgagees were empowered, if the borrower failed to pay three monthly instalments made up as above, or became bankrupt, to enter into possession, or receipt of the rents of the property. It was provided that if the mortgagees became entitled to enter, and the mortgagor should then, or afterwards, occupy any part of the property, he should become tenant from month to month to the mortgagees at a monthly rent equal in amount to the moneys which ought to be paid monthly by the mortgagor for subscriptions, &c., as above, the tenancy to commence from the day when the mortgagor had last fully paid up all that was due, all previous rent to be payable on the day when the mortgagees became entitled to enter, and thereafter all rent to be payable monthly in advance. The mortgagees could determine the tenancy by fourteen days' notice. On 2nd December, K. being in default for three months' payments, the trustees distrained for £664, the whole amount due. On 5th December K. was adjudicated on an act of bankruptcy, committed 26th November. In the January and February following the trustees distrained for two further sums due to the society. It was held that the attornment and all three distresses were valid against the trustee in bankruptcy. The fact that the monthly rent was fluctuating was held no objection, it not being an uncertain rent, and the tenancy was held not to be a tenancy at will. distress to interest. The proceeds of a distress for rent levied under an attorn- Application ment clause in a mortgage deed are, in the absence of any pro- of proceeds of vision to the contrary in the deed, applicable to the payment of principal as well as interest, and the landlord may distrain for the rent reserved, though it exceed the amount of interest due. (Ex p. Harrison, re Betts, 18 Ch. D. 127.) ing recovery A company which has statutory powers to recover money Effect of due to them "by the same means as a landlord may recover statutory rent in arrear " is a landlord within the meaning of this powers enablsection (Ex p. Birmingham Gas Co., re Fanshaw, L. R. 11 Eq. of money by 615), but see Ex p. Hill, re Roberts, 6 Ch. D. 63, from which distress. case it appears that the question is whether the power conferred on the company or person claiming the "rent" is, like a landlord's right of distress, a power, in the words of James, § 42. Effect of discharge. Sub-s. (2). Relation back of trustee's title. L. J., "of their own motion, without any legal process, to seize the goods, or is in truth merely an execution by way of legal process." In the last-mentioned case, it is to be observed, that a magistrate's warrant was necessary to enable the company to seize. A landlord may distrain for rent accruing due if the trustee remains in possession without disclaiming, even though it be rent which, under the terms of the lease, is payable in advance. (Ex p. Hale, re Binns, 1 Ch. D. 285.) As to the effect of discharge of the bankrupt, the certificate did not release a debt for rent, and had not the effect of discharging the statutory remedy given to the landlord. So where a landlord distrained the goods of A. on his tenant's premises for rent in arrear, and the tenant afterwards became bankrupt and obtained his certificate, A., having brought an action of replevin, it was held that the bankrupt's certificate did not extinguish the debt, and therefore that the landlord had a right to avow for a return of distress. (Newton v. Scott, 10 M. & W. 471; and see Briggs v. Sowry, 11 L. J. Ex. 193.) As to an order for administration of the estate of a debtor whose debts do not exceed £50, see post, section 122. As to the administration of the estate of a deceased insolvent, see post, section 125. 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 bankruptey being committed on which a receiving order is made against him, or, if the bankrupt is proved to have committed more acts of bankruptcy than one, to have relation back to, and to commence at, the time of the first of the acts of bankruptcy proved to have been committed by the bankrupt within three months next preceding the date of the presentation of the bankruptcy petition; but no bankruptcy petition, receiving order, or adjudication shall be rendered invalid by reason of any act of bankruptcy anterior to the debt of the petitioning creditor. § 43. relation under By the doctrine of relation, as established in its original Doctrine of severity by 13 Eliz. c. 7, the trader, from the moment of former Acts, committing an act of bankruptcy, was deprived of all power and present of charging or disposing of his property to the prejudice of Act. his creditors (see Eden, Bankruptcy Law, p. 258), and accordingly in theory the title of the assignees dated from the moment when any act of bankruptcy was committed by the trader, however long anterior to the date of the petitioning creditor's debt this might have occurred. In practice, however, the relation of the bankruptcy was not carried back beyond the time of the accruing of the petitioning creditor's debt, as the assignees could not, for the purpose of relation, avail themselves of an anterior act of bankruptcy without destroying their own title as assignees. (Ex p. Birkett, 2 Rose, 71; Ex p. Bowness, 2 M. & S. 479.) It was with reference to this principle that in the 6th of Geo. IV. c. 16, s. 18, which provided for the substitution of another debt in case the petitioning creditor's debt was found insufficient to support the petition, there was added a proviso that the substituted debt should not have been anterior to the debt of the petitioning creditor. The corresponding section of the Act of 1849 (12 & 13 Vict. c. 106, s. 103) omitted the proviso that the substituted debt must not have been anterior to that of the petitioning creditor, but at the same time it was provided, by section 88 of that Act, that no adjudication should be deemed invalid by reason of any act of bankruptcy prior to the debt of the petitioning creditor. This latter provision, though omitted in the Act of 1869, was necessarily implied by the express provisions as to relation. The present section expressly saves the petition and the receiving order as well as the adjudication. Section 11 of the Act of 1869 made the relation to the completion of the act of bankruptcy on which the adjudication was founded, or to the first act of bankruptcy proved to have been committed within twelve months before the adjudication, if at the time of committing such act the bankrupt was indebted to a creditor or creditors in a sum or sums sufficient to support a petition, and if such debt or debts remained due at the date of adjudication. The present Act, which has, by section 6 (1) (c), provided that an act of bankruptcy to be available must have been committed within three months (instead of six, as in the Act of 1869) before the presentation of the petition, has also altered the law as to relation, and provided that the relation shall be to the commission of the act of bankruptcy on which W.B. M § 43. Gazette conclusive evidence of adjudication and act of bankruptcy. Completion of act of bank ruptcy. Inchoate act of bankruptcy. the receiving order is made, or to the first act of bankruptcy committed within three months next preceding the date of the presentation of the petition. It is no longer necessary, in order to establish the latter kind of relation, to prove the existence of debts at the time the act of bankruptcy was committed which continue to exist at the commencement of the bankruptcy, but, as has been already pointed out, the period of relation has been much shortened. It was decided on sections 10 and 11 of the Act of 1869 that an adjudication is, so long as it stands, conclusive evidence as against a third person that the act of bankruptcy on which the adjudication was professedly founded was in fact committed, and that the title of the trustee relates back to that act of bankruptcy. (Ex p. Learoyd, re Foulds, 10 Ch. D. 3.) It is submitted that this decision will apply under the present Act both to a receiving order and to an order of adjudication, since section 132 (2), which corresponds in this respect to section 10 of the old Act, provides that the production of a copy of the Gazette containing any notice of a receiving order, or of an order adjudging a debtor a bankrupt, shall be conclusive evidence in all legal proceedings of the order having been duly made, and of its date. This section provides that the bankruptcy shall relate back to and commence at the time of the act of bankruptcy being committed, upon which the order is made. In section 11 of the old Act the word was completed, and in the interpretation of this, a distinction was drawn between those acts of bankruptcy which are voluntary on the part of the bankrupt, and those which consist of proceedings in invitum. The relation in the latter case was held to be to the completion of the act of bankruptcy (Ex p. Villars, re Rogers, L. R. 9 Ch. 432); and in the former, to the moment of the commencement of the act of bankruptcy; and as such an act of bankruptcy consists necessarily in intention, the relation would seem to be to the moment when the bankrupt proves his intention by his actions, even though the intention is not completely carried out. (Ex p. Snowball, re Douglas, L. R. 7 Ch. 534; Brittain v. Brown, 24 L. T. 504.) Under some of the earlier bankruptcy statutes, it was held that where the act of bankruptcy, even though involuntary, is of such a nature as to be inchoate, and afterwards completed, the relation, upon completion, was to the time when the act commenced, and not to the date of the completion. (King v. Leith, 2 T. R. 141; Edwards v. Gabriel, 31 L. J. Ex. 113.) In the case of Ex p. Helder, re Lewis, 24 Ch. D. 339, it was held that an agent who had paid away money according to §§ 43, 44. his principal's directions, and who, before the payment, knew that it would constitute an act of bankruptcy by the principal, was not liable to repay the money to the trustee in bankruptcy of the principal, because the money did not become the trustee's until completion of the act of bankruptcy to which his title related back, i. e., not until after the money had left the agent's hands. Although in the present Act the word "committed" has been substituted for " completed," it is submitted that the above-mentioned distinction between voluntary and involuntary acts of bankruptcy will still be recognized, and that the principle of King v. Leith, ubi sup., will not be adopted. Under the Act of 1869 it was held that the trustee's title Crown. did not relate back as against the Crown. (Ex p. PostmasterGeneral, re Bonham, 10 Ch. D. 595.) This will still be so, since section 150, which provides that certain provisions of this Act shall bind the Crown, makes no mention of relation. bankrupt's divisible 44. The property of the bankrupt divisible amongst Description of his creditors, and in this Act referred to as the property of property the bankrupt, shall not comprise the following particulars: amongst (1) Property held by the bankrupt on trust for any other person: (2) The tools (if any) of his trade and the necessary wearing apparel and bedding of himself, his wife and children, to a value, inclusive of tools and apparel and bedding, not exceeding twenty pounds in the whole : But it shall comprise the following particulars : (i.) All such property as may belong to or be vested in the bankrupt at the commencement of the bankruptcy, (ii.) The capacity to exercise and to take proceedings creditors. |