lease shall be deemed to have been surrendered (kk), the contract determined, or the shares forfeited, from the date of the order of adjudication; or, if real property, it will revert to the person entitled on the determination of the estate of the bankrupt therein. The persons interested in such property in reversion or remainder, however, are entitled to call upon the trustee to disclaim within a certain time, and he will not be entitled to disclaim afterwards (s. 24). 503 Contracts or dealings with the bankrupt without notice.-The title of the trustee to the property of the bankrupt has relation back to the act of bankruptcy, so that the property ceases to be his, and becomes the property of his trustee from the time of the commission of the act of bankruptcy (ss. 11 & 15)(). But the harsh effect of this doctrine is modified by ss. 94 & 95(m), which enact, that all conveyances, transfers, delivery of goods, contracts, or dealings, by, with, or to, any bankrupt, made in good faith and for valuable consideration before the date of the order of adjudication, shall not be deemed invalid, provided the person so dealing with the bankrupt had not at the time thereof notice of any act of bankruptcy committed by the bankrupt and available against him for adjudication. As against persons, therefore, having notice of the act of bankruptcy and not being, consequently, within the protection of this clause, the title of the trustees will have relation back to the time of the act of bankruptcy(n), unless, perhaps, the adjudication of bankruptcy is the act of the court, under s. 125, in consequence of a liquidation by arrangement having become impracticable, and without any creditor's petition having been presented, and possibly in cases where the creditor's petition is founded on the debtor's own declaration, duly filed, admitting his inability to pay his debts(0). Where a guarantee society, in pursuance of an agreement between them and the bankrupt, entered into his house and seized his goods, without any knowledge of his having committed an

(kk) But this does not apply to rent due between the date of the adjudication and the disclaimer by the trustee in bankruptcy; and it seems that as between the lessor and the lessee, the latter is still liable for the rent. Smyth v. North, L. R., 7 Exch. 242.

(1) The title of a trustee under a liquidation by arrangement (see s. 125) relates back in a similar manner: Ex parte Duignan, L. R., 11 Eq. Ca. 604; 6 Ch. App. 605

As to the distinction between liquidation by arrangement, and a composition deed under 8. 126, see Ex parte Birmingham Gas Light and Coke Co., L. R., 11 Eq. Ca. 204; Ex parte Sheriff of Middlesex, L. R., 12 Eq. Ca. 207.

(m) These are substantially a re-enactment of s. 133 of 12 & 13 Vict. c. 106.

(n) See Fawcett v. Fearne, 6 Q. B. 28; Exley v. Inglis, L. R., 3 Exch. 247; 37 Law J., Exch.

145.

(o) Sect. 6. And see Stevenson v. Newnham, 13 C. B. 301; Monk v. Sharp, 2 H. & N. 548; 27 L. J., Exch. 29. But see Jones v. Harber, L. R., 6 Q. B. 80; Ex parte Duignan, L. R., 6 Ch. App. 605.

act of bankruptcy, it was held that this was a "transaction" protected by the 133d section of the repealed Act (12 & 13 Vict. c. 106), and that the assignees could not maintain an action against the guarantee company for the entry and seizure(p).

504 Title to chattels purchased from a bankrupt after an act of bankruptcy.If a man buys goods of a bankrupt, and pays over the price to the latter with knowledge of the act of bankruptcy, he will have no title to the goods as against the trustee; but if he had no notice of the act of bankruptcy at the time he paid the money, the transaction will be protected by the above sections. A trustee in bankruptcy does not, by sending in a bill of parcels or invoice of goods purchased, necessarily ratify a dealing between the bankrupt and a third person as a sale. It may amount only to a qualified offer on their part to adopt the transaction as a sale, provided the defendant will pay for the goods, so as to leave it open to them to maintain an action for the conversion of the property if the defendant will not pay the money demanded(g). But if the trustee unreservedly adopts the transaction as a valid contract of sale, he cannot afterwards treat a refusal to re-deliver the goods as a conversion(r). 505 Transfer of property by bankrupts constituting an act of bankruptcy— Fraudulent preference(s).—If there be a voluntary conveyance of property by a man who is indebted at the time, which conveyance would have the effect of delaying or defeating the payment of creditors, such conveyance is stamped with the character of fraud(t). Every conveyance for an antecedent debt is a voluntary conveyance, and when it is made to the prejudice of other creditors, it becomes a fraudulent conveyance and an act of bankruptcy(u), and avoidable by the trustee in bankruptcy(v). Again, if a man hands over property for payment of his creditors, except under pressure, he makes a voluntary preference, and that is an act of bankruptcy(x). And the handing over property, even under pressure, may be an act of bankruptcy, for the

(p) Krehl v. Great Central Gas Co., L. R., 5 Exch. 289. The word "transaction" is not used in the late act; the words are "contract or dealing" only. As to the sufficiency of a seizure in such a case, see Brewin v. Short, post, p. 430.

(q) Valpy v. Sanders, 5 C. B. 893; 17 Law J., C. P. 249.

(r) Edwards v. Hooper, 11 M. & W. 363.

(8) See 33 & 34 Vict. c. 76.

(t) Young v. Fletcher, 34 Law J., Exch. 154. Marks v. Feldman, L. R., 4 Q. B. 481; 5 ibid. 275. (u) Jones v. Harber, L. R., 6 Q. B. 77; Ex parte Cohen, L. R., 7 Ch. App. 20. See Ex parte Hawker, L. R., 7 Ch. App. 214; Re Wood, L. R., id. 302.

(v) Heilbut v. Nevill, L. R., 5 C. P. 478.

(x) Lacon v. Liffen, 32 Law J., Ch. 315. Addison on Contracts, 6th ed., p. 156. Bills v. Smith, 34 Law J., Q. B. 68.

6th section(y) provides, that if an execution for a debt of more than 50%. be levied by seizure and sale of the goods of a trader, he is to be deemed to have committed an act of bankruptcy. But a bona fide transfer of all a person's property to secure a past debt and a future advance is not an act of bankruptcy (z), although the advance is for the purpose of satisfying an existing debt(a), and there be power to seize all after-acquired property(b). Nor is a bona fide transfer of all the trader's property, under pressure, unless a fraudulent preference, voidable by the trustee, in cases where there is no relation back of his title(c). An assignment by a debtor of his property to a trustee for the benefit of his creditors, is an act of bankruptcy(d). And so is the filing of a petition for liquidation by arrangement under s. 125(e). The 6th section of the Act enacts that any fraudulent conveyance, gift, delivery, or transfer (i.e., a conveyance or transfer fraudulent in fact, e.g., without consideration), by a debtor of his property or any part thereof, shall be an act of bankruptcy; and the 92nd section enacts that every conveyance or transfer of property or charge thereon, etc., except to a purchaser, payee, or incumbrancer in good faith and for valuable consideration(f), made by any person unable to pay his debts as they become due from his own money, in favor of any creditor or in trust for him, with a view of giving such a creditor a preference over the other creditors, shall be deemed fraudulent and void as against the trustee in bankruptcy, if the person making such conveyance, transfer, etc., become bankrupt within three months afterwards. It has been held, however, that this section has not altered the law with respect to fraudulent preferences, and that it is still necessary, in order to constitute a fraudulent preference, that the conveyance or transfer be made voluntarily and in contemplation of bankruptcy, and that, if made upon pressure, the intention of the bankrupt to prefer one creditor to another is not material(g); and further, that if the payment be made without any view of preferring one creditor to

(y) Which is a re-enactment of the 24 & 25 Vict. c. 134, s. 73. See Woodhouse v. Murray, L. R., 2 Q. B. 634; 4 ibid. 27.

(z) Allen v. Bonnett, L. R., 5 Ch. App. 577. See Re Colemere, L. R., 1 Ch. App. 128; Ex parte Foxley, L. R., 3 Ch. App. 515. But under certain circumstances it may be.

Fisher, L. R., 7 Ch. App. 636.

Ex parte

(a) Lomax v. Buxton, L. R., 6 C. P. 107.

(b) Hutton v. Cruttwell, 1 E. & B. 15.

(c) Jones v. Harber, L. R., 6 Q. B. 77.

(d) Sec. 6. And see Ponsford v. Walton, L. R., 3 C. P. 167; Ex parte Squire, L. R., 4 Ch. App. 47.

(e) Ex parte Duignan, L. R., 11 Eq. Ca. 604; 6 Ch. App. 605.

(f) Ex parte Blackburn, L. R., 12 Eq. Ca. 358.

(g) Ex parte Craven, L. R., 10 Eq. Ca. 648; L. R., 6 Ch. App. 70.

another, it is not a fraudulent preference, although made without pressure by a person unable to pay his debts as they became due(h). 503 Executions levied on the property of bankrupts.-The 6th section of the Act further provides, that any execution, for 501. and upwards, levied by seizure and sale on the property of a trader, shall be an act of bankruptcy; and the 87th section provides that the sheriff or bailiff of the County Court shall in such cases retain the proceeds of the sale in their hands for a period of fourteen days, in trust to pay them over to the trustee in bankruptcy, if a petition for adjudication or liquidation by arrangement(i) be presented within that time; but if no petition be presented, then to the execution creditor(). Subject, however, to the above provisions, any execution against the bankrupt's land or goods, executed in good faith, by seizure in case of land, and by seizure and sale in case of goods, before the adjudication, and without notice of any previous act of bankruptcy, is valid (s. 94).

Where an execution has been levied, but between the time of the seizure and sale a trustee in bankruptcy or in liquidation has been appointed, the title of the latter will prevail by relation over that of the execution creditor, if the act of bankruptcy preceded the seizure, although the sale has been delayed by an injunction, under s. 13(k); a fortiori, therefore, if the seizure has been completed by sale, it will not be defeated by notice of an act of bankruptcy committed subsequently to the seizure(). If the creditors of the debtor prefer to accept a composition under s. 126, the execution creditor will be entitled to the proceeds of the execution(m).

The notice, which the execution creditor must have, must be of an act of bankruptcy committed previous to the seizure(n), and it must convey specific information as to the acts constituting the act of bankruptcy. A notice, stating circumstances which may or may not amount to an act of bankruptcy, is insufficient(o).

(h) Ex parte Bolland, L. R., 7 Ch. App. 24.

(i) Ex parte Key, L. R., 10 Eq. Ca. 432.

(ii) "If the goods remain unsold in the hands of the sheriff at the time of the appointment of the trustee in bankruptcy he is entitled to them against the execution creditor. Ex parte Rayner, L. R., 7 Ch. App. 325."

(k) Ex parte Veness, L. R., 10 Eq. Ca. 419. Slater v. Pinder, L. R., 6 Exch. 228. 7 id. 95. Ex parte Bailey, L. R., 13 Eq. Ca. 314. Ex parte Duignan, L. R., 11 Eq. Ca. 604; 6 Ch. App. G05. Ex parte Rocke, L. R., 6 Ch. App. 795.

(1) Ex parte Todhunter, L. R., 10 Eq. Ca. 425 "But the goods must have been seized before the act of bankruptcy, for the mere delivery of a writ of fi. fa. to the sheriff before the act of bankruptcy is not sufficient as against a trustee in bankruptcy appointed subsequently. Ex parte Williams, L. R., 7 Ch App. 314."

(m) Ex parte Sheriff of Middlesex, L. R., 12 Eq. Ca. 207.

(n) Ex parte Todhunter, L. R., 10 Eq. Ca. 425.

(0) Evans v. Hallam, L. R., 6 Q. B. 713.

507 Title of trustee in bankruptcy to property settled or transferred by bankrupt.-By s. 91 of the Act(p), it is further provided that any settlement, conveyance, or transfer of property made by a trader, shall be void against the trustee, if the settlor becomes bankrupt within two years from the date of the settlement or transfer, and shall also be void if the settlor becomes bankrupt within ten years, unless at the date of the settlement the settlor was able to pay all his debts without the aid of the property comprised in it. But this section does not apply to settlements or transfers made before and in considertion of marriage, nor to a purchaser or incumbrancer in good faith and for valuable consideration, nor to settlements, etc., made on the settlor's wife or children, of property which has accrued to him in right of his wife after marriage. Any covenant or contract made by a trader in consideration of marriage for the future settlement of property in which he had not at the time of the marriage any interest vested or contingent, is also void against the trustee, if the property has not been transferred, or money, etc., paid before the bankruptcy; but this does not apply to property to which the bankrupt becomes entitled in right of his wife.

508 Title to chattels of which a bankrupt was reputed owner at the time of his bankruptcy.-By s. 15 of the Act(q) it is further enacted, that the property of the bankrupt, divisible amongst his creditors, shall comprise all goods and chattels being at the commencement of the bankruptcy in the possession, order, or disposition of the bankrupt, with the consent and permission of the true owner, of which goods and chattels the bankrupt is the reputed owner, or of which he has taken upon himself the sale, or disposition as owner(); but no chose in action, other than debts due to the bankrupt in his trade or business, are to be deemed goods and chattels within the section. This section probably extends to chattels which were in the order and disposition of the bankrupt at the time of his committing any act of bankruptcy capable of supporting the adjudication, though such act be prior to the act on which the adjudication is founded(s). But it would not, semble, oust the jurisdiction of the courts of common law or Chancery to decide what goods were in the reputed ownership of the bankrupt or not(t).

(p) This section is in substitution of s. 126 of 12 & 13 Vict. c. 106.

(q) Which is substantially a re-enactment of 12 & 13 Vict. c. 106, s. 125.

(r) See Hornsby v. Miller, 28 L. J., Q. B., 99.

(8) See Stansfield v. Cubitt, 2 De G. & J. 222.

(t) See Mather v. Lay, 2 J. & H. 374; Graham v. Furber, 14 C. B. 157; 23 Law J., C. P. 10.