Ch. XVIII. Act, 1882,1 remains in possession as reputed owner, the section Where goods originally belong to bankrupt. applies. And lastly, the question whether goods are in the "order and disposition" of a man, in other words, whether he is the reputed owner, is a question of fact.3 Lord Selborne, L. C., says :-4 "The doctrine of reputed ownership does not require any investigation into the actual state of knowledge or belief, either of all creditors or of particular creditors, and still less of the outside world, who are no creditors at all, as to the position of particular goods. It is enough for the doctrine if those goods are in such a situation as to convey to the minds of those who know their situation the reputation of ownership, that reputation arising by the legitimate exercise of reason and judg ment on the knowledge of those facts which are capable of being generally known to those who choose to make inquiry on the subject. It is not at all necessary to examine into the degree of actual knowledge which is possessed, but the Court must judge from the situation of the goods what inference as to the ownership might be legitimately drawn by those who knew the facts. I do not mean the facts that are only known to the parties dealing with the goods, but such facts as are capable of being, and naturally would be, the subject of general knowledge to those who take any means to inform themselves on the subject. So, on the other hand, it is not at all necessary, in order to exclude the doctrine of reputed ownership, to show that every creditor, or any particular creditor, or the outside world who are not creditors, knew anything whatever about particular goods, one way or the other. It is quite enough, in my judgment, if the situation of the goods was such as to exclude all legitimate ground from which those who knew anything about that situation could infer the ownership to be in the person having actual possession." Notwithstanding these remarks, it appears to be settled First. That where goods originally belong to the bankrupt, the fact that he remains in possession till he commits the act of bankruptcy is primâ facie evidence that he continues in possession as reputed owner.5 The rule is subject to the following exceptions: (a.) Where the goods were made by him to order, unless it was his course of business to make goods of that nature and to keep them on his premises for sale." (b.) Where the change of ownership is notorious, as by the 1 Ante, p. 102. 2 Re Ginger, [1897] 2 Q. B. 461. See Re Weibking, [1902] 1 K. B. 713. 3 Edwards v. Scott, 1 M. & Gr. 962. 5 Lingard v. Messiter, 1 B. & C. 308; Exp. Lovering, 9 Ch. 621; Exp. Brooks, 23 Ch. D. 261. 6 Wilkins v. Bromhead, 7 Scott, N. R. 921. purchaser's name, or seal, or a notice, being so placed Ch. XVIII. as to show that the goods belong to him.1 (c.) Where the goods are sold but not delivered, and there is a notorious custom in the trade to leave them in the were at the time of sale.1 Secondly. Where the goods did not originally belong to the bankrupt, the goods are not in his order and disposition : (a.) Where he has hired them and there is a well-known custom in his trade to hire such goods." (b.) Where he hires a furnished house." (c.) In case of agistment.7 10 9 (d.) Where there is a well-known custom in the trade to send Where goods did not origi nally belong to bankrupt A creditor who has issued execution against the property of a Executions. debtor, or has attached any debt due to him, cannot retain the benefit of the execution or attachment against the trustee in bankruptcy of the debtor, unless it has been completed before the receiving order, and before notice of the presentation of the bankruptcy petition, or of any available act of bankruptcy.22 An execution against goods is completed by seizure and sale; an attachment of a debt is completed by receipt of the debt; and an execution against land is completed by seizure, or by the appointment of a receiver.13 These provisions are not applicable in the case of an administration order under sect. 125.11 Ex p. Watkins, 8 Ch. 528; Shrubsole v. Sussams, 16 C. B. N. S. 452. Re Goetz, [1898]1 Q. B. 787. 3 Priestley v. Pratt, L. R. 2 Ex. 101; Re Terry, 11 W. R. 113; Carruthers v. Payne, 5 Bing. 270; 30 R. R. 592; Ex p. Dyer, 53 L. T. 768. Exp. Watkins, sup. ; Ex p. Vaux, 9 Ch. 602; Ex p. Dyer, sup. Horn v. Baker, 2 Sm. L. C. 259; p. Powell, 1 Ch. D. 501; Crawcour v. Salter, 18 Ch. D. 30; Ex p. Turquand, 14 Q. B. D. 636. 6 Walker v. Burnell, Doug. 303; Ashton v. Blackshaw, 9 Eq. 515. Exp. Woodward, 54 L. T. 683. Ch. XVIII. Avoidance of settlements; -of covenants to settle after-acquired property. When goods are seized in execution, and before sale or completion of the execution by the receipt or recovery of the full amount of the levy, notice is served on the sheriff of a receiving order against the debtor, the sheriff must deliver the goods and any money seized or received to the official receiver. If the execution is on a judgment exceeding 201., and the goods are sold or money paid to avoid sale,3 the sheriff must retain the net proceeds for fourteen days; if, within that time, notice is served on him of a bankruptcy petition, and a receiving order against the debtor is made thereon, or on any other petition of which the sheriff has notice, he must pay such proceeds to the official receiver or trustee.1 An execution levied by seizure and sale on the goods of a debtor is not invalid by reason only of its being an act of bankruptcy; and a person who purchases in good faith from the sheriff acquires a good title against the trustee.5 The Act of 1883, provides that: (1.) Any settlement of property, not being a settlement made. before and in consideration of marriage, or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, or a settlement made on or for the wife or children of the settlor of property which has accrued to the settlor after marriage in right of his wife, shall, if the settlor becomes bankrupt within two years after the date of the settlement, be void against the trustee in the bankruptcy; and shall, if the settlor becomes bankrupt at any subsequent time within ten years after the date of the settlement, be void against the trustee in the bankruptcy, unless the parties claiming under the settlement can prove that the settlor was at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settlement, and that the interest of the settlor in such property had passed to the trustee of such settlement on the execution thereof. 8 (2.) Any covenant or contract made in consideration of marriage, for the future settlement on or for the settlor's wife or Levy, [1892] 1 Q. B. 772. S. 46 (1), (2), 2 That is, "taken in execution for a 3 Bower v. Hett, [1895] 2 Q. B. 51, 337. Betteridge, [1898]1 Q. B. 256. 5 Act of 1883, s. 46 (3). 6 S. 47. See as to the course of legislation on the subject of this section, per Cave, J., in Re Lowndes, 18 Q. B. D. 678; and Vaizey on Settlements, 1546. 7 Ex p. Hillman, 10 Ch. D. 622. 8 A life interest reserved to the settlor under the settlement is to be taken into account in estimating his solvency; Re Lowndes, 18 Q. B. D 677. children of any money or property wherein he had not at the date Ch. XVIII. of his marriage any estate or interest, whether vested or contingent, in possession or remainder, and not being money or property of or in right of his wife, shall, on his becoming bankrupt before the property or money has been actually transferred or paid pursuant to the contract or covenant, be void against the trustee in the bankruptcy.1 (3.) "Settlement" shall for the purposes of this section include any conveyance or transfer of property. The settlement is not avoided ab initio, but only from the date when the trustee's title accrues, and a bonâ fide purchaser for value from a donee under such a voluntary settlement has a good title against the trustee in bankruptcy, if he had no notice that the settlor was insolvent, though he knew that the donee claimed under a voluntary settlement. This section does not affect the validity of ante-nuptial settlements, nor of any other settlement made for value. It is not confined to formal settlements, but includes every voluntary transfer of property where it is intended to be preserved for the benefit of any person, as distinguished from a mere gift of money intended to be spent. It should, however, be noted that trusts declared by a marriage settlement in favour of persons not within the consideration of marriage fall within the section.+ This section does not apply where an insolvent estate is being administered under sect. 125.5 6 transactions without Bona fide transactions with the bankrupt which took place Bonâ fide before the date of the receiving order are protected; subject to the provisions of the Act with respect to the effect of bankruptcy notice. on an execution or attachment, and with respect to the avoidance of certain settlements and preferences, nothing in the Act invalidates : (a) Any payment by the bankrupt to any of his creditors; (6) Any payment or delivery to the bankrupt; (c) Any conveyance or assignment by the bankrupt for valuable consideration; (d) Any contract, dealing, or transaction by or with the bankrupt for valuable consideration, 1 See Vaizey on Settlements, 1552. Re Brall, [1893] 2 Q. B. 381; Re Carter, [1897] 1 Ch. 776. 3 Re Player, 15 Q. B. D. 682; Re Vansittart, [1893] 1 Q. B. 181; Re Plummer, [1900] 2 Q. B. 790. 4 Wollaston v. Tribe, 9 Eq. 44; Smith G.P.P. v. Cherrill, 4 Eq. 390; cf. Mackie v. 5 Re Gould, 19 Q. B. D. 92; post, p. 338. 22 Ch. XVIII. provided that the other party to any of the transactions referred to had not at the time of such transaction notice of any available act of bankruptcy1 committed by the bankrupt before that time. A transaction which comes within the terms of this section is protected although it may be an act of bankruptcy. Disclaimer of contracts. Administration in bankruptcy of estate of deceased insolvent. 3 Before the Act of 1869 it was settled law that the mere fact of one of the parties to a contract becoming bankrupt did not of itself put an end to the contract. No doubt a man who had contracted with a bankrupt to supply goods to him was not bound to deliver them to him unless paid beforehand; and a man who had contracted to do work for the bankrupt was not bound to perform it unless his remuneration was secured. But, with these qualifications, the bankrupt's contracts subsisted, and the assignee was entitled to perform them, and if he performed them he got the benefit of them. But he was not bound to adopt a contract, or he might adopt it for a time, and afterwards, if he found that it was not beneficial, he might abandon it, and the other party had no remedy except his action against the bankrupt for breach of contract. The act of 18695 authorized the trustee to disclaim (inter alia) "unmarketable shares in companies and unprofitable contracts." It was held, on the construction of the Act, that if the trustee when called upon to disclaim a contract of the bankrupt declined to do so but carried it on, he might afterwards disclaim; in which case the other party to the contract could prove for damages for breach of contract against the bankrupt's estate under s. 31. Under the Act of 1883, as modified by the Act of 1890,7 the trustee can disclaim shares or stocks in companies, unprofitable contracts, or other unsaleable and onerous property, within a limited time, except in cases where he has been requested by some person interested in the property to decide whether he will disclaim or not, and he has not disclaimed within twentyeight days or such further time as may be allowed by the Court. The Act of 18839 introduced novel provisions by which creditors of a deceased debtor may obtain, on petition, an order for the administration of the estate of the deceased debtor according to the 1 Ss. 6, 168. 8 2 Shears v. Goddard, [1896] 1 Q. B. See Bailey v. Thurston, [1903] 1 K. 4 See Re Sneezum, 3 Ch. D. 473. 6 S. 55. 7 S. 13. 8 Re Bastable, [1901] 2 K. B. 518. 9 S. 125, amended by the Act of 1890, s. 21. See Re Williams, 36 Ch. D. 573, 583; Re Gould, 19 Q. B. D. 92. |