AND TRUSTEE. of the covenant to repair, passes away from the bankrupt; BANKRUPT or the Trustee may disclaim any interest in the property, in which case also, the bankrupt ceases, from the date of the adjudication, to have any interest in the property, or to be liable in any way for future breaches of the covenants (d). 2nd. Indentures of apprenticeship.—An indenture of apprenticeship is completely discharged at the will either of the bankrupt or the apprentice, by the order of adjudication (e). all lia The general principle as to all other liabilities on con- Bankrupt tracts made by the bankrupt before bankruptcy, is that freed from if the claims against him are proveable, the order of bilities discharge (f) (not the bankruptcy) frees him from liability which are proveable. for them. The tendency of successive Bankruptcy Acts has been so to extend the number of claims which are made proveable, that it may now be laid down that (subject to some few exceptions hereafter enumerated), all claims against a bankrupt arising on contracts or promises made by him before bankruptcy are proveable against his estate, and are, therefore, barred by his discharge (g). There are some debts or liabilities which are not got (d) Bankruptcy Act, 1869, s. 23. As regards breaches committed before the adjudication, the bankrupt's liability is exactly the same as for the breach of any other contract made by him before bankruptcy. (e) Bankruptcy Act, 1869, s. 33. (f) Ibid., s. 49. (g) This is the result of the following provisions of the Bankruptcy Act, 1869, s. 31: Demands, in the nature of unliquidated damages, arising otherwise than by reason of a contract or promise [i. e., demands arising from torts], shall not be proveable in bankruptcy; and no person having notice of any act of bankruptcy available for adjudication against the bankrupt, shall prove for any debt or liability contracted by the bankrupt subsequently to the date of his so having notice. "Save, as aforesaid, all debts and liabilities present or future, certain or contingent, to which the bankrupt is subject at the date of the order of adjudication, or to which he may become subject during the continuance of the bankruptcy, by reason of any obligation incurred previously to the date of the order of adjudication, shall be deemed to be debts proveable in AND BANKRUPT rid of by the order of discharge, and which, therefore, constitute the exceptions to the general rule under consideration. TRUSTEE. Exceptions. Debts held not proveable by Court. Debts contracted after notice Exception 1.-Debts or liabilities held not to be proveable by the Court of Bankruptcy. "Any person aggrieved by any estimate made by the Trustee may appeal to the court having jurisdiction in bankruptcy, and the court may, if it think the value of the debt or liability incapable of being fairly estimated, make an order to that effect, and upon such an order being made, such debt or liability shall for the purposes of this Act, be deemed to be a debt not proveable in bankruptcy" (h). Exception 2.-Debts or liabilities contracted after notice to the creditor of an act of bankruptcy (i). of act of bankruptcy. Debts Exception 3.-Debts or liabilities incurred by means of fraud or incurred by breach of trust (k). fraud. bankruptcy, and may be proved in the prescribed manner before the trustee in the bankruptcy. * "Liability' shall, for the purposes of this Act, include any compensation for work or labour done; any obligation or possibility of an obligation to pay money or money's worth on the breach of any express or implied covenant, contract, agreement, or undertaking, whether such breach does or does not occur, or is or is not likely to occur, or capable of occurring, before the close of the bankruptcy; and generally it shall include any express or implied engagement, agreement, or undertaking, to pay, or capable of resulting in the payment of money, or money's worth, whether such payment be as respects amount fixed or unliquidated; as respects time present or future, certain or dependent on any one contingency, or on two or more contingencies; as to mode of valuation capable of being ascertained by fixed rules, or assessable only by a jury, or as a matter of opinion." (h) Bankruptcy Act, 1869, s. 31. Compare, as to the meaning, under the Bankruptcy Act, of "debt and liability," sect. 31 and s. 4. A number of claims were held not proveable under former Acts, mainly on the ground that their value could not be estimated. It is possible that many claims decided not to be proveable under the former Acts, may be held to be, as a matter of fact, incapable of proof under the present Act. (i) Ibid., s. 31. (k) Ibil., s. 49. Exception 4.-Debts or liabilities whereof the bankrupt has BANKRUPT obtained forbearance by fraud (7). AND TRUSTEE. Debts whereof forbearance obtained by fraud. Exception 5.-Debts due to the Crown (m). Exception 6.-Debts with which the bankrupt stands charged for an offence against a statute relating to any branch of the public revenue, or at the suit of the sheriff or other public officer on a bail bond, entered into for the appearance of any person prosecuted for any such offence (n). RULE 71.--An undischarged bankrupt remains liable on contracts made by him before bankruptcy. Crown debts. Debts due for offence against revenue. RULE 71. Undis charged bankrupt made The mere bankruptcy not being itself a discharge from liable on liabilities, an undischarged bankrupt is obviously up to contracts the close of the bankruptcy still liable on his contracts, before though as already explained (o), he may apply to the court to stay an action against him. But a bankruptcy may be closed, and yet under the present Act the bankrupt may not obtain his discharge, and thus may, even after the proceedings in bankruptcy are ended, remain an undischarged bankrupt (p). (7) Bankruptcy Act, 1869, s. 49. (m) Ibid. (n) Ibid. He may, however, be discharged from the last two classes of debts by the consent of the Commissioners of the Treasury. (0) See p. 307 n. (c), ante. (p) His position, which is peculiar, is thus defined by the Act : "Where a person who has been made bankrupt has not obtained his discharge, then, from and after the close of the bankruptcy, the following consequences shall ensue : "1. No portion of a debt proveable under the bankruptcy, shall be enforced against the property of the person so made bankrupt until the expiration of three years from the close of the bankruptcy, and during that time, if he pay to his creditors such additional sum as will, with the dividend paid out of his property during the bankruptcy, make up ten shillings in the pound, he shall be entitled to an order of discharge, in the same manner as if a dividend of ten shillings in the pound had originally been paid out of his property. "2. At the expiration of a period of three years from the close of the bank ruptcy. BANKRUPT TRUSTEE. The result of the Act seems to be, that during three years after the close of the bankruptcy, no claim depending on a contract made before the adjudication of bankruptcy can be enforced against the property of the bankrupt; but it would rather appear that there is nothing to prevent a creditor from bringing an action against the bankrupt in respect of such claim during the three years (q). After the lapse of the three years any unpaid balance of debt proved under the bankruptcy, becomes, in case the debtor has not obtained an order of discharge, a judgment debt, and payment can, it is presumed, be enforced either by execution or by an action on the judgment. RULE 72. Trustee can be sued on contracts made by him as trustee. RULE 72.-The Trustee can be sued as a Trustee on contracts entered into by him in his character as a Trustee. The rule under the old Bankruptcy Acts was, that the assignees of a bankrupt could not be sued as assignees at law. They did not (nor does the Trustee) represent the bankrupt as regarding his liabilities. In other words, they could not be sued on contracts made by the bankrupt in the same way in which an executor can be sued bankruptcy, if the debtor made bankrupt has not obtained an order of discharge, any balance remaining unpaid in respect of any debt proved in such bankruptcy (but without interest in the meantime), shall be deemed to be a subsisting debt, in the nature of a judgment debt, and, subject to the rights of any persons who have become creditors of the debtor since the close of his bankruptcy, may be enforced against any property of the debtor with the sanction of the court which adjudicated such debtor a bankrupt, or of the court having jurisdiction in bankruptcy in the place where the property is situated, but to the extent only, and at the time and in manner directed by such court, and after giving such notice and doing such acts as may be prescribed in that behalf." Bankruptcy Act, 1869, s. 54. The expression debt proveable under the bankruptcy, includes, speaking generally, all liabilities arising out of any contract made before the adjudication of bankruptcy. See Chapter XVII. (q) See, however, Bankruptcy Act, 1869, s. 12, compared with sect. 54. on the contracts of his testator, since the mode in which a creditor of a bankrupt must enforce his claim is, not by action against the assignees or Trustee, but by proof against the estate. The assignees, on the other hand, if they themselves entered into contracts, were personally liable if at all (r). If, for instance, as they had power to do, they adopted contracts entered into by the bankrupt, they personally took the liabilities of the contracts (s), and thus, on adopting a lease made to the bankrupt, incurred the same liabilities as any other assignees, and could get rid of them in the same way as other assignees, by assigning over the lease (t). The position of the Trustee under the present Act is apparently different. He, like the assignees, is in no sense liable, and cannot be sued for the breaches of contract of the bankrupt; but he can enter into engagements in his character as a Trustee, and such engagements will bind succeeding Trustees. This, at least, seems to be the effect of the following enactment (u) :— "The Trustee of a bankrupt may sue and be sued by the official name of the Trustee of the property of a bankrupt,' inserting the name of the bankrupt, and by that name may hold property of every description, make contracts, sue and be sued, enter into any engagements binding upon himself and his successors in office, and do all other acts necessary or expedient to be done in the execution of his office." It may be inferred from this, that if a Trustee adopts a contract made with the bankrupt,-e. g., a lease, he and his successors become liable upon it as Trustees. The Trustee can, when the bankruptcy is closed, apply to the Court for a release (x); and, the order of release, (r) Ridout v. Brough, Cowp. 134; Broom, Parties, 2nd ed., s. 183. (s) Gibson v. Carruthers, M. & W. 321. (t) Onslow v. Corrie, 2 Madd. 330; Broom, Parties, 2nd ed., s. 230. (u) Bankruptcy Act, 1869, s. 83, cl. 7. (x) See Bankruptcy Act, 1869, ss. 51-53. BANKRUPT AND TRUSTEE. |