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and sold for a judgment above 201., or (by the Bankruptcy
Act, 1890, s. 11) where money has been paid in order to
avoid a sale of the goods, the trustee, on giving notice of
the bankruptcy within fourteen days from such sale or pay-
ment, shall be entitled to claim the sale proceeds less the
sheriff's expenses.
And if the goods have not been
actually sold, the goods are to be handed over to the
trustee, subject to a charge thereon for the sheriff's
expenses, this latter provision not being confined to
executions for 201., but applying to all executions whatso-
ever. But a purchaser in good faith from the sheriff
acquires a good title as against the trustee in bank-
ruptcy (p).

And thirdly, as regards voluntary settlements, it is enacted, that every settlement (including every conveyance or transfer) of property made by a debtor, not being a settlement made before and in consideration of marriage, or in favour of a purchaser or incumbrancer, bona fide and for valuable consideration, or a settlement on wife or children of property accruing after marriage in right of the settlor's wife, shall, if the settlor become bankrupt within two years after its date, be absolutely void as against his trustee ; and shall, if he become bankrupt within ten years, be also void against the trustee, unless the parties claiming under the settlement can prove that at the time it was made the settlor was solvent without the aid of the property settled, and that the interest of the settlor passed to the trustees of the settlement on the execution thereof (9).

Moreover, any covenant or contract made in consideration of marriage, for the future settlement on the settlor's wife or children of property wherein at the date of his marriage the settlor

(p) Sect. 46; In re Hinks, Ex parte Berthier (1878), 7 Ch. D. 882; In re Pearce, Ex parte Crossthwaite (1885), 14 Q. B. D.

966.

(q) Act of 1883, s. 47; Ex parte Dawson (1875), L. R. 19 Eq. 433.

had no estate or interest, and not being property coming to him in right of his wife, will, upon his becoming bankrupt before such property has been actually transferred or paid pursuant to such contract or covenant, be void as against his trustee (r).

The chief duties of the trustee consist in realising and distributing the property of the debtor; and he is, from time to time, to declare a dividend amongst the creditors (s), that is to say, he is to declare what payment shall be made to them out of the balance then at the bank to the credit of the Bankruptcy Estates Account. For he is required to pay, into an account so designated, all sums from time to time received by him, at such local bank as the committee of inspection shall apppoint, and, failing such appointment, at the Bank of England (t). And with regard to the payment of dividends, the Act provides, that, subject to the retention of such sums as may be necessary for the costs of administration, or otherwise, the trustee shall, with all convenient speed, declare and distribute dividends amongst the creditors who have proved their debts; that the first dividend, if any, shall be declared and distributed within four months after the conclusion of the first meeting of creditors, unless the trustee satisfies the committee of inspection that there is sufficient. reason for postponing the declaration to a later date; that subsequent dividends shall, in the absence of sufficient reason to the contrary, be declared and distributed at intervals of not more than six months (u); and that when the trustee has realised all the property of the bankrupt, or so much thereof as can, in the joint opinion of himself and of the committee of inspection, be realised without needlessly protracting the trusteeship, he shall declare a final dividend. But before so doing, he is to give notice, in the prescribed manner, to the persons whose claims to

(r) Sect. 47, sub-s. (2); In re Roberts (1882), 21 Ch. D. 553. (*) Sects. 58-63.

(f) Sect. 74.

(u) Sect. 58.

be creditors have been notified to him, but not established to his satisfaction, that if they do not establish their claims to the satisfaction of the court within a time limited by the notice, he will proceed to make a final dividend without regard to their claims (~); and on the expiration of the time so limited, or of any extension thereof that may have been granted to any claimant, the remaining assets of the debtor are divided amongst the creditors who have proved their debts, without regard to the claims of any other persons. If any surplus remains after paying every creditor in full, with interest where that is allowed (y), and after paying the costs, charges, and expenses of the administration, that surplus belongs to the bankrupt (z).

Dividends are paid rateably among all the creditors, according to the quantity of their debts, no regard being in general had to the quality of them. Hence, judgments and recognizances, and other debts by record or specialty, are all put on a level with debts by mere simple contract; and equitable debts are on the same footing as legal debts. But a creditor, who has a specific security on the property of the bankrupt (such as a mortgage or pledge) is entitled, notwithstanding the bankruptcy, either to give up his security and prove for his whole debt, or else to realise such security, or give credit for its value, and to prove and receive a dividend pari passu with the other creditors in respect of any overplus remaining unpaid (a). So a landlord, who is desirous, after the commencement of the bankruptcy, to distrain for rent on the bankrupt's goods, is entitled to make such distress available for his separate payment to the extent of half a year's rent accrued due prior to the date of the order of adjudication (), though

(x) Sect. 62.

(y) Sect. 40, sub-s. (5); First Schedule, rule 20.

(z) Sect. 65.

(a) Sects. 6, 39; Second Sched.,

rules 9-17; In re Turner (1881), 19 Ch. D. 105.

(b) Sect. 42; Act of 1890, S. 28; Ex parte Voisey, In re Knight (1882), 21 Ch. D.

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for the remainder he must come in pari passu with the rest of the creditors (c). And to this we may add, that a priority is given (and to some extent even as against the landlord's preferential right of distress) to parochial and other local rates, and to any assessed, land, property, or income tax due from the bankrupt, to the extent of one year's assessment; and also to the wages or salaries of the debtor's clerks or servants, not exceeding 501., and due in respect of services rendered during the four months before the date of the receiving order; and also to the wages of any labourer or workman, not exceeding 251., due in respect of services rendered during the two months before the date of the receiving order, all which last mentioned classes of debts are to be paid in full, if the property of the bankrupt is sufficient, and in priority to all others (d), but are to abate inter se if the property of the bankrupt is insufficient for their payment. With these exceptions, and with the exception of the debts which under the provisions of the Partnership Act, 1890, are only to be paid after all other debts for value have been satisfied in full (e), and of a debt for money lent by a wife to her husband in trade, with respect to which the Married Women's Property Act, 1882, contains a like provision (ƒ), all debts proveable under the bankruptcy are to be paid pari passu.

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And with regard to the distribution of the bankrupt's estate, it is to be further observed, that demands in the nature of unliquidated damages, arising otherwise than by reason of a contract, promise, or breach of trust, are not proveable in the bankruptcy (g); and that no person having notice of any act of bankruptcy available against the bankrupt can prove for any debt or liability contracted by

(c) Act of 1883, s. 42; Paull v. Best (1863), 3 B. & S. 537.

(d) Sect. 40; 51 & 52 Vict. (1888) c. 62.

(e) Supra, p. 138.

(f) Sect. 3; In re Cronmire, [1901] 1 K. B. 480.

(g) Act of 1883, s. 37, subS. (1); see Ex parte Baum (1874), L. R. 9 Ch. App. 673; Watson v. Holliday (1882), 20 Ch. D. 780.

the bankrupt subsequently to the date of such notice having been received (h). With these exceptions, however, all debts and liabilities, present or future, certain or contingent to which the bankrupt is subject at the date of the receiving order, or to which he may become subject before his discharge by reason of any obligation incurred previously to such date, may be proved (). And where the debt or liability does not bear a certain value, by reason of its being subject to any contingency, as, for instance, that of a widow marrying again, or for any other reason, the Act directs, that the debt or liability shall (where possible) be estimated by the trustee, and, in case of dispute, according to the order of the court, either with or without the intervention of a jury; and the proof is to be for the suir thus assessed (k). The term "liability" includes 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, agreement, contract, or undertaking, whether likely or not to occur before the close of the bankruptcy, and, generally, any express or implied engagement, agreement. or undertaking to pay, or capable of resulting in the payment of, money or money's worth, whether fixed or unliquidated, present, future or contingent, and whether capable of being ascertained by fixed rules or by jury only, or as a matter of opinion ().

V. The bankrupt's discharge.—To every bankrupt who conforms in all points to the directions of the statute, the law makes full amends for all this rigour and severity; for he may, at any time after being adjudged bankrupt, apply to the court for his order of discharge. This application will be heard in open court as soon as conveniently can

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