the fiat under which the assignees claim; therefore it must be an act committed after the petitioning creditor's debt had accrued(n); and one of which the petitioning creditor can avail himself. So, where the act of bankruptcy was a fraudulent conveyance by the bankrupt, to which the petitioning creditor was a party, it could not be set up in support of the assignee's claim (o). Payments made to a bankrupt bonâ fide, and more than two months before the issuing the commission, were held valid under 6 Geo. 4, c. 16, s. 81, such payments being comprehended under the word "dealings,' provided the party had no notice of a prior act of bankruptcy; and knowledge of the bankrupt's insolvency is not sufficient to take the case out of the protection of this section (p). It lies on the party seeking to protect a payment under this clause to prove that the party paying had no notice of an act of bankruptcy (q). (See, as to fraudulent preference, p. 231, ante.) Payments by or to the Bankrupt with Notice.] Payment made to the bankrupt for a specific purpose, being clothed with the specific trust, no property in it passes to the assignees, and therefore, if the specific purpose fails, the bankrupt may repay the money. So, where money was paid to a bankrupt in prison for the purpose of compounding with his creditors, and that purpose having failed the money was repaid, such re-payment was held to be valid against the assignees (r). And as it is not a ground of defence to an action by the bankrupt against any one indebted to him, that the debtor has notice of an act of bankruptcy; so payments to the bankrupt enforced by coercion of law, are valid against the assignees, though made after notice of an act of bankruptcy, if no fiat has actually issued (s). But whether, in order to render such payments valid, it is necessary that judgment should be recovered, seems to be undecided, though it is thought that payments enforced by the actual arrest of the debtor would be valid (t); (and as to property specifically appropriated, see further, p. 242, ante.) Delivery of his Goods, &c. to the Bankrupt, without Notice.] As property of a trader in the hands of another person, immediately on the trader's committing an act of bankruptcy, became the property of the assignees; if the holder of it afterwards delivered it to the bankrupt, it was the same as if he had delivered it to a stranger, and the assignees had a right to recover the value of it from him, although he were ignorant, at the time he delivered the property, of any act of bankruptcy having been committed by the owner. But now, by stat. 6 Geo. 4, c. 16, s. 84, no person, or body corporate or public company, having in his or their possession or (n) Ex p. Birkett, 2 Rose, 71: Ward v. Clarke, Mood. & M. 497. (0) Burbidge v. Watson, 4 Car. & P. 170. (p) Tucker v. Barrow, 3 Car. & P. 85: Mood. & M. 137. (q) Pearson v. Graham, 2 Nev. & P. 636; 6 Adol. & E. 899. (r) Toovey v. Milne, 2 B. & A. 683: and see Moor v. Barthrop, 1 B. & C. 5. (8) Foster v. Allanson, 2 T. R. 479. (t) 1 Christ. 601. custody any money, goods, wares, merchandises, or effects belonging to any bankrupt, shall be endangered by reason of the payment or delivery thereof to the bankrupt or his order; provided such person or company had not, at the time of such delivery or payment, notice that such bankrupt had committed an act of bankruptcy. A similar provision was contained in one of the repealed Acts, namely, stat. 56 Geo. 3, c. 137, s. 1. Notice, What.] We have just enumerated the instances in which transactions with a trader are deemed valid, notwithstanding a previous act of bankruptcy, if the party dealing, &c., with him, had no notice at the time of his having committed an act of bankruptcy. Besides the ordinary evidence of the parties having a knowledge of the fact, either express, or to be implied from circumstances, it is enacted by stat. 6 Geo. 4, c. 16, s. 83, that the issuing of a commission shall be deemed notice of a prior act of bankruptcy (if an act of bankruptcy had been actually committed before the issuing the commission), if the adjudication of the person or persons against whom such commission has issued shall have been notified in the London Gazette, and the person or persons to be affected by such notice may reasonably be presumed to have seen the same (u). There were clauses in two of the repealed Acts (46 Geo. 3, c. 135, s. 3, and 49 Geo. 3, c. 121, s. 2), upon this subject, but so different from the present, that it is unnecessary to give the cases that have been decided on them. And by stat. 6 Geo. 4, c. 16, s. 85, if any accredited agent of any body corporate or public company shall have had notice of any act of bankruptcy, such body corporate or company shall be thereby deemed to have had such notice. 3. Concealment and Discovery of the Bankrupt's Property. By stat. 6 Geo. 4, c. 16, s. 120, any person wilfully concealing any real or personal estate of the bankrupt, and who shall not within forty-two days after the issuing of the commission, discover such estate to one or more of the commissioners or assignees, shall forfeit the sum of one hundred pounds, and double the value of the estate so concealed; and any person who shall, after the time allowed to the bankrupt to surrender, voluntarily discover to one or more of the commissioners or assignees any part of such bankrupt's estate, not before come to the knowledge of the assignees, shall be allowed five per centum thereupon, and such further reward as the major part in value of the creditors present at any meeting called for that purpose shall think fit, to be paid out of the estate recovered on such discovery. And if the bankrupt shall remove, conceal, or embezzle any part of his estate, to the value of £10 or upwards, or any books of (u) See Warner v. Barber, 8 Taunt. 176. accounts, papers or writings relating thereto, with intent to defraud his creditors, he shall be deemed guilty of felony, and punished with transportation for life, or not less than seven years, or with imprisonment or transportation and hard labour for not more than seven years. (6 Geo. 4, c. 16, s. 112, post.) 4. Sale, Management, or Disposition of the Property. All the property of the bankrupt must be sold, either before the commissioners or by public auction, as the commissioners may think most advantageous; or the assignees may sell it by private contract, if that appear to be the most advantageous way of disposing of it (x); and the assignees must act upon their own responsibility; the Court will not interfere with the assignees in the disposition of the property (y), or in the amicable arrangement of the claim of a particular creditor upon the estate (z); but where there is a fair doubt in the minds of the assignees how to act in a case of difficulty, the court will order a reference, to ascertain if the proposal would be for the benefit of the creditors (a). Thus the court has referred it to one of the commissioners to inquire if it would be beneficial to the estate for the assignees to accept an offer made them to purchase part of the bankrupt's property (b); or to carry into execution a contract entered into by the bankrupt for sale of the timber upon his estate (c); or a contract entered into by the assignees for sale of part of the bankrupt's estate (d); or to carry on the bankrupt's business (e); or to reduce the rent of premises let by the assignees (f); or to enter into a proposed arrangement with certain creditors (g); or to conclude an arrangement entered into by the assignees for the settling claims upon the estate and the mode of payment of the creditors, such arrangement having been assented to by all the creditors, save one, who did not oppose (h); or a compromise with parties as to their right to property claimed by the assignees (i); and after a compromise, between the litigating parties and the assignees, had been sanctioned by a meeting of the creditors, it was confirmed by the court without a reference (k), and such a reference will be, where one of the assignees declines or refuses his concurrence of an arrangement touching the estate agreed to by a meeting of the creditors (1); but the order made even upon a reference, would not justify the assignees or bind the creditors, if the proceeding should turn out (x) Ex p. Dunman, 2 Rose, 66. (y) Er p. Hurly, 2 Dea. & C. 631: Ex p. Belcher, 4 Dea. & C.87; 1 Mon. & A. 478: Ex p. Belcher, 3 Dea. & C. I. (2) Ex p. James, 3 Dea. & C. 290. (a) Er p. Marks, 2 Dea. 86; 3 Mon. & A. 35. (b) Ex p. Goding, Mon. & B. 263; 1 Dea. & C. 323. (c) Ex p. Jeffery, 1 Dea. & C. 206. (d) Ex p. Bradstock, 1 Dea. 272; 2 Mon. & A. 490: Ex p. Kirby, 4 Dea. & C. 400; 2 Mon. & A. 142: Ex p. Trimmer, 3 Mon. & A. 245. (e) Ex p. Mandel, 4 Dea. & C. 725. (f) Ex p. De Begni, 4 Dea. & C. 225; 1 Mon. & A. 277. (g) Ex p. Kirby, 2 Mon. & A. 142. (h) Ex p. Hyslop, 4 Dea. & C. 809; 2 Mon. & A. 289. (i) Er p. Ballard, 3 Mon. & A. 29: Ex p. Bousfield, 3 Mon. & A. 41. (k) Ex p. Arran, 1 My. & C. 509; 3 Mon. & A. 42: Ex p. Jerrard, 3 Dea. 1; 3 Mon, & A. 358. Ex p. Hare, 3 Mon. & A. 43. (1) Ex p. Taylor, 2 Dea. 339; 3 Mon. & A. 222. to be improvident (m). So, if the assignees enter into an agreement with the bankrupt and his surety to have the fiat annulled, upon having the debts paid in full, and the surety, upon faith of the agreement, pays a sum of money to the official assignee, and is ready to perform the agreement on his part; as the requisites of the 6 Geo. 4, c. 16, s. 133, had not been complied with, this must be considered a private agreement of the assignees, and the court will not interfere to prevent the assignees from proceeding to sell the property of the bankrupt (n). And where the bankrupt was party to a suit in Chancery, and the Master had reported that it would be for the benefit of the creditors that the suit should be compromised, the Court of Review refused to order the compromise to be entered into, but directed the order in Chancery to be registered in the Court of Bankruptcy (0); but where the surviving assignee paid the sum of £50 to induce a claimant to discontinue an action under circumstances advantageous to the estate, the court sanctioned the arrangement by ordering the repayment to the assignee, as it would form a proper item of disbursement in his accounts (p). And where the bankrupt was entitled, as tenant for life in remainder, to certain settled estates, and by the settlement it was provided that the person who should be entitled to the use and occupancy of the mansion-house should reside and dwell therein, and use the name and arms of G. upon pain of forfeiting all benefit under the settlement; and after the bankrupt obtained his certificate the estate for life fell into possession: the court gave its sanction to an agreement between the assignees and the bankrupt, giving him a reasonable allowance to fulfil the conditions of the settlement (q). The new statute 1 & 2 Will. 4, c. 56, s. 35, gives some discretion to the assignees in the carrying on the trade of the bankrupt; but any creditor can object to the carrying on the trade, by insisting upon an immediate sale of the stock (r). (See post, tit. Assignees.) Any of the creditors who have proved under the fiat may, by petition, compel the assignees to proceed to a sale, even although the assignees may fairly think that deferring it, or keeping the property instead of selling it, may be more advantageous to the creditors (s). But creditors cannot prevent assignees from selling, although they may be proceeding to a sale in a manner apparently objectionable, and open to suspicion; for the assignees act at their own risk and upon their own responsibility, and they, and not the court, are the judges of the propriety and expediency of the sale (t). A dormant assignee cannot be compelled to execute a conveyance of part of the estate where the sale was effected without his concurrence, and of the propriety of which he has reasonable doubt, without a reference to the registrar to (m) Er p. De Begni: Ex p. James, supra. (n) Er p. Nainby, 3 Dea. 587. (0) Er p. Williams, 4 Dea. & C. 111; 2 Mon. & A. 689. (p) Er p. Plater, 4 Dea. & C. 214; 2 Mon. & A. 364. (q) Er p. Goldney, 3 Dea. 570; 1 Mon. & C. 75. (r) Ex p. Hall, 2 Dea. 263; 3 Mon. & A. 169. (s) Ex p. Goreng, Cook, 289; see 6 Ves. 622: Er p. Hall, 3 Mon. & A. 169. (t) Exp. Montgomery, 1 Glyn & J. 338. ascertain if the sale is for the benefit of the estate, and to approve the conveyance (u). The sale should be advertised, or other sufficient notice should be given of it (v). It is not liable to auction duty (x). Neither the assignees (y), nor the commissioners (z), nor the solicitor to the commission (a), unless the solicitor is also mortgagor (b), nor even the auctioneer employed to sell (c), shall bid at the sale, either for themselves or on behalf of others (d), without first obtaining the consent of the creditors, and petitioning for leave to do so; otherwise the court, upon application, will set aside the sale, and order a re-sale; and the petition, in such a case, must be served on the assignees and the bankrupt (e). Even where an assignee bought in two lots of the bankrupt's real property, without the consent of the creditors, and upon a re-sale there was a loss upon one lot, and a gain on the other, but the balance was in favour of the bankrupt's estate, the assignees were charged with the loss of the lot that was undersold (f). The general rule is, to remove an assignee who purchases part of the estate without leave (g). But the court will give leave to the assignees to bid for the bankrupt's estate, if the application is made with the sanction of the creditors, and the assignees are not to have the conduct of the sale (h). But in a recent case the court refused leave for the assignees to bid, though with the assent given by general meeting of the creditors, where all the creditors who had proved did not attend the meeting (i). To enable a sole assignee to bid, he must either be removed, or a person must be chosen by the creditors at a public meeting to appear on the petition for leave to bid and protect the estate (k); and the court refused to confirm a purchase by an assignee made without leave of the court, unless all the creditors consented (1). And where the assignee purchased without leave, and improved the estate, it was ordered to be re-sold, and to be put up at the price given by the assignees, adding the sums laid out in improvements (m). And where the creditors, at a meeting convened for the purpose by advertisement, proposed to one of the assignees to purchase the bankrupt's effects at a valuation which had been made of them, yet the court refused to sanction this, without first referring it to the commissioner to ascertain whether the property could be more advantageously disposed of (n); but except under very peculiar cir (u) Ex p. Underhill, 3 Dea. 326; 3 Mon. & A. 660. (v) See Ex p. Montgomery, supra. (x) 6 Geo. 4, c. 16, s. 98, ante, p. 31. (y) Ex p. Hodgson, 1 Glyn & J. 12: Er p., in re Salisbury, Buck, 255: Er p. Turvill, 3 Dea. & C. 346. (z) Er p. Bennett, 10 Ves. 381: Ex p. Harrison, Buck. 17. (a) Er p. Bennett, 10 Ves. 381: Er p. James, 8 Ves. 337: Ex p. Farley, 3 Dea. & C. 110. (b) Er p. Towne, 4 Dea. & C. 519; 2 Mon. & A. 29. (c) Ex p. Lewis, Cook, 289. (d) Ex p. Grylls, 2 Dea. & C. 290. (e) Er p. Page, 4 Mad. 459. (f) Er p. Lewis, 1 Glyn & J. 69; and see Ex p. Burton, Id 355. (g) Ex p. Alexander, 1 Dea. 273; 2 Mon. & A. 493. (h) Anon., 2 Russ. 350. (i) Ex p. Beaumont, 1 Mon. & A.304; 3 Dea. & C. 549. (k) Ex p. Molineux, 4 D. & C. 460; 2 Mon. & A. 245. (1) Er p. Thwaites, 1 Mon. & A. 323. |