If he votes in respect of his whole debt he is deemed to have surrendered his security, unless the court on application is satisfied that the omission to value the security had arisen from inadvertence. And a creditor must not vote in respect of any debt on or secured by a current bill of exchange or promissory note held by him, unless he is willing to treat the liability to him of every person who is liable thereon antecedently to the debtor, and against whom a receiving order has not been made, as a security in his hands, and to estimate the value thereof and, for the purposes of voting, but not for the purposes of dividend, to deduct it from his proof. The trustee may, within twenty-eight days of the vote, buy the security at the estimated value plus twenty per cent.

If a receiving order is made against one partner of a firm, any creditor to whom that partner is indebted jointly with the other partners of the firm, or any of them, may prove his debt for the purpose of voting at any meeting of creditors, and shall be entitled to vote thereat.

Chairmen of Meetings.-The Official Receiver, or his nominee, acts as chairman at the first meeting of creditors; but, at any subsequent meeting, the creditors choose their own chairman. The chairman has power to admit or reject a proof for the purpose of voting, but his decision is subject to appeal to the court. If he is in doubt whether the proof of a creditor should be admitted or rejected he must mark the proof as objected to and allow the creditor to vote, subject to the vote being declared invalid in the event of the objection being sustained.

Proxies. A creditor may vote either in person or by proxy. Proxies are of two kinds, general and special. The forms are issued by the official receiver or by the trustee, as the case may be. A creditor may give a general proxy to his manager or clerk, or any other person in his regular employment. In such case the instrument of proxy must state the relation in which the person appointed thereunder stands to the creditor.

A special proxy may be given to any person to vote at any specified meeting or adjournment thereof, on all or any of the following matters

(1) For or against any specified proposal for a composition or scheme of arrangement.

(2) For or against the appointment of any specified person as trustee at a specified rate of remuneration, or as a member of the committee of inspection, or for or against the continuance in office of any specified person as trustee or member of a committee of inspection. (3) On all questions relating to any matter other than those

above referred to, arising at any specified meeting or adjournment thereof.

A proxy may not be used unless it is deposited with the official receiver or trustee before the meeting at which it is to be used. The official receiver of the estate may be appointed by a creditor as his general or special proxy.

Adjournment of Meetings.-The meeting may be adjourned by the chairman, with the consent of those present, from time to time and from place to place. But it is not competent for a meeting to act for any purpose except the election of a chairman, the proving of debts, and the adjournment of the meeting, unless at least three creditors are present or represented. If the creditors do not number, in all, more than three, they must all be present or represented.

Debtor's Statement of Affairs.

If the receiving order has been made on the petition of the debtor himself, he must within three days from the date of the order, or, if a creditor has petitioned, then within seven days of the order, prepare and submit to the official receiver a statement of and in relation to his affairs, verified by affidavit, including particulars of his assets and liabilities, the names of his creditors, and particulars of the securities held by them.

The official receiver sends to each creditor mentioned in the statement a notice of the time and place of the first meeting of creditors and a summary of the debtor's statement of affairs.

The court may, on the application of the official receiver or trustee, summon before it the debtor or his wife, or any person known or suspected to have in his possession any of the estate or effects belonging to the debtor, or supposed to be indebted to the debtor, or any person whom the court may deem capable of giving information respecting the debtor, his dealings or property, and may require any such person to produce any documents in his custody or power relating to the debtor, his dealings or property.

Public Examination.

The debtor must undergo a public examination in open court in regard to his conduct, dealings and property. The official receiver fixes the date as soon as possible after the delivery of the Statement of Affairs and he gives notice to the debtor and creditors and publishes it in the London Gazette and in a local paper. The debtor is examined on oath, and notes of his examination are taken down in writing and, after being read over to or by the debtor, are signed by him and can be used as evidence

against him. Any creditor who has tendered a proof, or his representative, may question the debtor concerning his affairs and the causes of his failure. The Official Receiver takes part, and if there should be a trustee appointed before the conclusion of the examination, he also may take part therein. The examination may be adjourned by the court and, if the debtor should prove contumacious, it may be adjourned sine die, in which case, under Rule 195, the debtor must bear the expense of making a fresh appointment and of advertising the date.

It is further provided by the Rules that if the debtor should fail to attend his examination a warrant will be issued for his arrest.

Any of the parties, viz., official receiver, trustee, creditors and debtor may employ solicitors or counsel to take part in the public examination. When the court is of opinion that the debtor's affairs have been sufficiently investigated it may, by order, declare the examination concluded; but such order may not be made until after the day appointed for the first meeting of creditors.

If the debtor should be a lunatic, or suffer from any such affliction or disability as, in the opinion of the court, would make him unfit to attend his public examination, the court may make an order dispensing with such examination, or directing that he be examined on such terms, in such manner, and at such place as seems to the court to be expedient.

Composition or Scheme of Arrangement.

The debtor may propose a Composition in satisfaction of his debts, or a Scheme of Arrangement of his affairs and, if he does so, any such proposal must be submitted within four days of the delivery of his statement of affairs, or within such further time as the official receiver may fix. If the creditors who have proved their debts resolve by a majority in numbers and a threefourths majority in value to accept the composition offered, or to adopt the scheme of arrangement suggested, and the court should approve the proposal, there is no need for the debtor to be adjudged bankrupt otherwise the creditors may resolve by a majority in value that he shall be. The court will not assent to the scheme unless it appears that the proposals are reasonable and likely to benefit the general body of creditors, and in cases where the court would be bound to refuse the bankrupt his discharge, it must refuse to sanction the scheme.

Where the scheme is consented to by the court, the receiving order is discharged and the debtor is in the same position, providing he carries out the terms of the scheme, as if the bankruptcy had been carried through and he had obtained his discharge.

It should be borne in mind that such a composition as this is not the same as an arrangement with creditors made under the Deeds of Arrangement Act, 1914. (u) The effect of the latter is that only those creditors who assented to the scheme are bound, and the debtor is not released from the claims of others, whereas in the former case he is released from the claims of all.

Adjudication.

The court will adjudge the debtor bankrupt—

(1) If by resolution of a majority in value of the creditors they resolve that he be adjudged bankrupt.

(2) If they pass no resolution.

(3) If they do not meet.

(4) If a composition or scheme of arrangement is not approved within fourteen days after the conclusion of the examination.

(5) At the debtor's own request at the time of making the receiving order.

On adjudication, the property of the bankrupt becomes divisible among his creditors, and is vested in the trustee (referred to hereinafter) (v) for that purpose. Notice of every such order is advertised in the London Gazette and in a local paper, and the date of the order is deemed to be the date of adjudication.

Annulment of Adjudication. The court may annul the adjudication

(1) When in the opinion of the court the debtor ought not to have been adjudged bankrupt.

(2) Where it is proved to the satisfaction of the court that the debts of the bankrupt are paid in full. This is at the discretion of the court, and depends on the debtor's conduct.

(3) If the creditors at any time after the adjudication by a majority in number and three-fourths majority in value resolve to accept a composition or a scheme of arrange

ment.

The Trustee.

Where a debtor is adjudged bankrupt, or the creditors have resolved that he shall be, the creditors may, by ordinary resolution, appoint a person, whether creditor or not, to fill the office of trustee of the property of the bankrupt, or they may resolve to leave the appointment to the committee of inspection, referred to hereinafter. (w) The person so appointed must give security (v) See post, pp. 304–308. (w) See post, p. 308.

(u) See post, p. 469.

to the satisfaction of the Board of Trade, which issues a certificate that his appointment has been duly made, and the Board approves the appointment on other grounds also, that is to say, the certificate will not be issued where

(1) The trustee was not elected bonâ fide;

(2) He is unfit to act, e.g., where he has in any previous case been removed for misconduct;

(3) He is likely not to prove impartial owing to his connection with the bankrupt or any creditor.

The whole of the debtor's property at once vests, automatically, in the trustee. There may be more than one trustee, but it is not usual. If the creditors do not appoint a trustee within four weeks of the adjudication, or if negotiations for a composition or scheme are pending at the expiration of the four weeks, then, within seven days of the breakdown of the negotiations, the Board of Trade may appoint a person to act as trustee. The creditors or the committee of inspection may, at any subsequent time, appoint a trustee and, on such person being certified by the Board of Trade, he takes the place of the trustee appointed by the Board.

Official Receiver as Trustee.-The official receiver acts as trustee in the following cases—

(1) Before the appointment of a trustee, and during any vacancy in the trusteeship.

(2) Where the estate is not likely to exceed three hundred pounds in value.

(3) Where the estate to be administered is that of a deceased insolvent.

Termination of Appointment of Trustee. The appointment of trustee may be determined as follows

(1) If he wishes to resign. A meeting of the creditors must be called and seven days' notice thereof given to the official receiver, and it then rests with the meeting as to whether his resignation be accepted or refused. (2) If he is removed. This may be done

(a) By ordinary resolution by the creditors at a meeting called, at the request of one-sixth in value of the creditors, by a member of the committee of inspection or by the official receiver.

(b) By the Board of Trade.

(i) If the Board are of opinion that he is guilty of misconduct or fails to perform his duties, or