The tender by the debtor to one of such creditors of the amount of his debt will not prevent the adjudication. (Re Andrew, L. R. 1 Ch. D. 358.) 7. Can a debtor who has traded while under age, after he has attained full age be adjudicated a bankrupt in respect of a trude debt contracted, and upon an act of bankruptcy committed, during his infancy? Give reasons for your answer. No, he cannot, because by law an infant is deemed incapable of trading, and therefore cannot be made a bankrupt in respect of such a debt. If the debt had been for necessaries supplied to the infant suitable to his condition in life it would be otherwise. A trade debt cannot be enforced against an infant, although it is confirmed by him in writing after he comes of age. (37 & 38 Vict. c. 62; and see the recent case on appeal, Re Jones, Ex parte Jones, 50 L. J. Ch. (App.) 673, overruling Re Lynch, Ex parte Lynch, 45 L. J. Bcy. 48; L. R. 2 Ch. D. 227.) 8. A., by a written agreement, contracts with B. to build certain premises by a given date. The agreement contains various conditions and stipulations, and finally a provision that if the contract be not in all things duly performed by the contractor, that he shall pay to his employer (B.) £1000 as and by way of liquidated damages. Before the works are completed A. becomes bankrupt, his trustee carries on the work for some time and then abandons the contract. Another builder is then employed to complete the works, which are not finished till long after the time named. Can B. prove against A.'s estate for the £1000 or for any other amount? for your answer. Give reasons The above case is similar to Re Newman, Ex parte Capper (App.), 46 L. J. Bcy. 57; L. R. 4 Ch. D. 724, where it was decided that the £1000 was a penalty and not liquidated damages. It follows, therefore, that B. can prove against A.'s estate for the amount of damage he has actually sustained through "the contract not being in all things duly performed by A. and at the time named." The question whether a specified sum is to be regarded as a "penalty" or "liquidated damages" is for the Court. The leading case is Kemble v. Farren, 6 Bing. 141. Chitty, in his work on Contracts, 10th ed., p. 809, deduces from the cases the following rule :: The Courts will hold that the words "liquidated damages" are not to be taken according to their obvious meaning in any case where the doing or omitting to do several things of various degrees of importance is secured by the sum named, and where, notwithstanding the language used, it is plain from the whole instrument that the real intention was different. And so it is said that if a party agree to pay a specific sum on several events, all of which are capable of accurate valuation, it must be construed as a penalty and not as liquidated damages. (Chitty on Contracts, 10th ed., pp. 809, 810.) But if by a contract one certain sum is to be paid as liquidated damages on breach of any one of several stipulations, the real damages for the breach of no one of which can be ascertained at the date of the contract, such sum will not be treated as a penalty, even though it is apparent on the face of the agreement that the breach of one stipulation may be more serious in its consequences than the breach of another. Where, however, one of the stipulations is to pay a fixed sum of money, and the amount to be paid for breach of any stipulation is a much larger sum, such amount is a penalty, and only the real damage can be recovered. (Wallis v. Smith, 47 L. T. 389.) 9. A judgment creditor obtains a garnishee order nisi attaching a debt due to his judgment debtor, but before it is made absolute the latter becomes bankrupt. Who is entitled to the attached debt, the judgment creditor or the trustee in bankruptcy? Give reasons for your answer. The judgment creditor, because from the date of the garnishee order nisi if validly made and served he becomes a secured creditor within the meaning of sect. 16 (5) of the Bankruptcy Act, 1869 (32 & 33 Vict. c. 71). (Re Stanhope Collieries Co., L. R. 11 Ch. D. 160; Lowe v. Blakemore, L. R. 10 Q. B. 485; 44 L. J. Q. B. 55; Ex parte Joselyne, Re Watt, L. R. 8 Ch. D. 327; 47 L. J. Bank. 91; Baldwin's Bankruptcy, 113.) 10. A bankrupt, or liquidating debtor by arrangement, after his discharge, but before the proceedings are closed, acquires further property. To whom will the same belong? To the debtor or the trustee in bankruptcy? Give reasons and refer if you can to any section or sections of the Bankruptcy Act affecting the question, and any decided case upon the subject. To the debtor, because to hold otherwise would be to decide that a debtor cannot acquire property on his own account with his creditors' consent until all his estate has been realised, however many years that may take to do. The sections affecting the questions are sects. 15, 48, and 49. The decided case is Ebbs v. Boulnois, 44 L. J. Ch. 691; L. R. 10 Ch. 479; 32 L. T. 650; 23 W. R. 820; Baldwin's Bankruptcy, 172; and see Re Pettitt's Trust, 45 L. J. Bcy. 63; L. R. 1 Ch. D. 478; 34 L. T. 51; 24 W. R. 359. Sect. 15 of 32 & 33 Vict. c. 71, is to be read as if it were subject to the proviso in sect. 48 of that Act: Per James, L.J., in Ebbs v. Boulnois, supra. 11. A. has proved in the bankruptcy of B., and has received a dividend (less than 10s. in the £). The bankruptcy has been closed, but no discharge granted. Can A. take any, and if any, what steps, and when, to obtain payment of the balance of his debt? A. cannot take any steps to obtain payment of the balance of his debt until the expiration of three years from the close of the bankruptcy. At the end of the three years, if the bankrupt has not obtained his order of discharge during the three years, any balance remaining unpaid in respect of any debt proved in such bankruptcy (but without interest in the meantime) will 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 bankrupt with the sanction of the Court which adjudicated him 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. (32 & 33 Vict. c. 71, s. 54.) 12. Sale by A. to B. of 300 tons of ore, to be delivered 50 tons per month. The whole quantity is delivered except one instalment of 50 tons, due in January. The previous December instalment had not been paid for, and after its delivery B. had declared himself insolvent, and subsequently became bankrupt. A., in consequence of such declaration of insolvency, refused to deliver the January instalment. No tender of the price was made by the trustee in bankruptcy, who, however, called upon the seller A. for damages for breach of contract. Advise A. as to his legal rights under the above circumstances. A. was justified, after B.'s declaration of insolvency, in refusing to deliver the January instalment, and consequently the trustee cannot recover any damages for breach of contract (Ex parte Chalmers, Re Edwards, 42 L. J. Bey. 2, and on app. 37; L. R. 8 Ch. 289). We therefore should advise A. not to part with the January instalment until the trustee tenders to him not only the price of the January instalment, but also the price of the unpaid December instalment. It may be mentioned that nothing short of a distinct inability on B.'s part to pay, avowed either by word or deed, will entitle a vendor to refuse to deliver. (Re The Phoenix Bessemer Steel Co., Limited, Ex parte The Carnforth Hematite Iron Co., Limited, 46 L. J. Ch. 115; L. R. 4 Ch. D. 108; 25 W. R. 187; 35 L. T. 776; Baldwin's Bankruptcy, 60.) 13. Action of tort. Plaintiff obtains a verdict for, say, £500 damages: after verdict, but before judgment signed, defendant is adjudicated a bankrupt. Can the plaintif be restrained from enforcing his judgment for the amount of his verdict? Give reasons for your answer. No; because the jurisdiction of the Court to restrain any creditor from proceeding is conferred only by sect. 13 of the Bankruptcy Act, 1869, and that section is limited to "debts provable" in the bankruptcy, and the £500 damages in this case not being liquidated and arising in respect of a tort, is not a debt provable until it becomes liquidated by the judgment of the Court. (See Ex parte Baum, Re Edwards, 44 L. J. Bey. 25; L. R. 9 Ch. 673; Ex parte Brooke, Re Newman, 46 L. J. Bey. 57; L. R. 3 Ch. D. 494; Baldwin's Bankruptcy, 148.) 14. B., a bankrupt, after adjudication, gives to one of his creditors a bond for his debt, provable under the bankruptcy. Can the creditor sue B. upon the bond? Give reasons for your answer. After doing so, substitute "bill of exchange" for "bond" in this question, and say whether it would under any and what circumstances make any and what difference to B.'s liability. Previous to the Bankruptcy Act, 1869, coming into operation, the law was that such a bond could not be sued upon, but such a bill of exchange might have been sued upon by a bonâ fide holder for value without notice of the bankruptcy proceedings (see the Bankruptcy Act, 1861, sect. 164; and Kidson v. Turner, 3 H. & N. 581). The law on the subject is now the same (Chitty on Contracts, 182) unless the bond or bill of exchange is void under the law of fraudulent preference, or as an act of bankruptcy, or under 13 Eliz. c. 5, or as amounting to a fraud at common law. If a bankrupt or liquidating debtor, after having obtained his discharge, for a new consideration enters into a contract with one of his former creditors to pay a debt which that creditor is barred by the discharge from suing him for, as well as a new sum, the creditor can sue the discharged bankrupt or liquidating debtor both for the old debt and new sum, notwithstanding the discharge (Jakeman v. Cook, 48 L. J. Ex. 165; L. R. 4 Ex. D. 26). If, however, composition proceedings are pending under the Bankruptcy Act, 1869, and they, though partially, are not completely wound up, one of the creditors who is bound by the composition cannot, behind the backs of the other creditors who are also bound thereby, enter into an arrangement with the debtor whereby he is to be paid his own debt in full, nor can the fact that the creditor agrees on his part to supply the debtor with goods on credit at all validate the arrangement. (Ex parte Barrow, In re Andrews, 50 L. J. Ch. 821.) 15. A., in consideration of a loan of £500, assigns a policy of life assurance on his (A.'s) life to secure the payment of such loan. A. afterwards becomes bankrupt. No notice of the assignment of the policy is given to the insurance company until after the adjudication. The trustee claims the policy as being in the order and disposition of the bankrupt. Is he entitled to it as against the |