T. 9, CH. 2. bankrupt, made to such bankrupt by a depositary of such PART III money or goods before the date of the order of adjudication, who had not at the time of such payment or delivery notice of any act of bankruptcy committed by the bankrupt, and available against him for adjudication. 3. Any contract or dealing with any bankrupt, made in good faith and for valuable consideration, before the date of the order of adjudication, by a person not having at the time of making such contract or dealing, notice of any act of bankruptcy committed by the bankrupt, and available against him for adjudication" (s. 94). 1607. of certain entered into by or in the property of the bank rupt. Subject and without prejudice to the provisions of this Protection Act relating to the proceeds of the sale and seizure of goods transactions of a trader, and to the provisions of this Act avoiding relation to certain settlements, and avoiding, on the ground of their constituting fraudulent preferences, certain conveyances, charges, payments, and judicial proceedings, the following transactions by and in relation to the property of a bankrupt, shall be valid, notwithstanding any prior act of bankruptcy:-1. Any disposition or contract with respect to the disposition of property by conveyance, transfer, charge, delivery of goods, payment of money, or otherwise howsoever made by any bankrupt in good faith and for valuable consideration, before the date of the order of adjudication, with any person not having at the time of the making of such disposition of property notice of any act of bankruptcy committed by the bankrupt, and available against him for adjudication; 2. Any execution or attachment against the land of the bankrupt, executed in good faith by seizure before the date of the order of adjudication, if the person on whose account such execution or attachment was issued had not at the time of the same being so executed by seizure notice of any act of bankruptcy committed by the bankrupt, and available against him for adjudication; 3. Any execution or attachment against the PART III. T. 9, CH. 2. Liquidation by arrange ment. goods of any bankrupt, executed in good faith by seizure and sale before the date of the order of adjudication, if the person on whose account such execution or attachment was issued had not at the time of the same being executed by seizure and sale notice of any act of bankruptcy committed by the bankrupt, and available against him for adjudication" (s. 95). 1608. "A debtor unable to pay his debts may summon a general meeting of his creditors, and such meeting may, by a special resolution as defined by this Act, declare that the affairs of the debtor are to be liquidated by arrangement and not in bankruptcy, and may at that or some subsequent meeting, held at an interval of not more than a week, appoint a trustee, with or without a committee of inspection" (s. 125 (1)). 1609. "All such property of the debtor as would, if he were made bankrupt, be divisible amongst his creditors shall, from and after the date of the appointment of a trustee, vest in such trustee under a liquidation by arrangement, and be divisible amongst the creditors, and all such settlements, conveyances, transfers, charges, payments, obligations, and proceedings as would be void against the trustee in the case of a bankruptcy shall be void against the trustee in the case of liquidation by arrangement." "The trustee under a liquidation shall have the same powers, and perform the same duties, as a trustee under a bankruptcy, and the property of the debtor shall be distributed in the same manner as in a bankruptcy " (s. 125). 1610. CHAPTER III. OF BANKRUPTCY UNDER THE STATUTE OF 1883. T. 9, CH. 3. [THE stat. 46 & 47 Vict. c. 52 (Appendix), the Bankruptcy PART III. Act, 1883, amends and consolidates the law, and also changes and remodels the practice of bankruptcy. It became law on the 25th of August, 1883, and certain provisions take effect from its passing; thus after that time, in consequence of s. 170, no composition or liquidation by arrangement under ss. 125 and 126 of the Bankruptcy Act, 1869, can take place without the sanction of the Court or Registrar. But the date of its commencement is the 1st of January, 1884, and by s. 170, the Bankruptcy Act, 1869, is repealed from that date, except as to proceedings then pending. Also by s. 127, the Lord Chancellor, with the concurrence of the President of the Board of Trade, is empowered from time to time to make general rules for carrying into effect the objects of the Act. In this chapter will be found a concise account of the principal changes effected by the Act in the law of Bankruptcy, with some important enactments which appear especially applicable to the subject matter of the present work. 1610a. of pro All proceedings under the bankruptcy law must be Initiation commenced by a bankruptcy petition, presented on the ceedings, conditions and in the manner prescribed in the Act (ss. 5, 6, 7, and 8), and followed by an order of the Court, called a receiving order, which results, either in composition or arrangement, or in bankruptcy. But, except under a petition and with the approval of the Court, there can be no liquidation or composition. The acts of bankruptcy T. 9, CH. 3. PART III. [are specified in s. 4, and the distinction between traders and non-traders in relation to acts of bankruptcy, and generally throughout the Act, is abolished. After the presentation of a petition an official receiver may be appointed at any time, to be receiver of the debtor's property. 1610ь. Receiving order. First meeting of creditors. The first result of a bankruptcy petition, properly substantiated, is the making of a receiving order by the Court, the effect of which is to constitute the person appointed to act as official receiver, receiver of the debtor's property, and to stay proceedings by unsecured creditors. But the order does not, like an adjudication order, make the debtor a bankrupt or divest him of his property, or subject him to the forfeitures and disabilities contingent on bankruptcy (ss. 5, 7, 8, and 9). Every debtor against whom a receiving order is made is publicly examined in Court as to his conduct and property; in which examination the official receiver must, and the creditors, and trustee (if appointed), may take part, and the debtor is bound to answer all proper questions (s. 17). But a receiving order cannot be made against any corporation, or against any partnership, or association, or company registered under the Companies Act, 1862 (s. 123). 1610c. The first meeting of creditors, after the making of a receiving order, is held for the purpose of considering whether a composition or scheme of arrangement shall be entertained, or whether the debtor shall be adjudged bankrupt; and in the latter case the creditors may at once appoint a trustee (ss. 15, 21). The meeting must be summoned by the official receiver, and must be held within fourteen days of the receiving order,-unless a later date is, for any special reason, allowed,—and at least seven days' notice must be given by advertisement. The official receiver must also send notice to each creditor, T. 9, CH. 3. [together with a summary of the debtor's statement and PART III. the receiver's observations thereon (schedule 1, rules 1-3). 1610d. or scheme of arrangement. At the first meeting the creditors may resolve by special Composition resolution, to entertain a proposal for a composition or scheme of arrangement. For the acceptance of a composition or arrangement, there must be a subsequent confirming resolution by a majority in number, representing three-fourths in value, of all the creditors, which must not be passed until the debtor's public examination is concluded, nor until there has been circulated among the creditors a notice stating the terms of the proposal, and a report of the official receiver thereon (s. 18, (1-3)). When a composition or scheme of arrangement has been accepted, the Court may approve it after hearing a report of the official receiver, but must withhold its approval if the proposal does not appear to be reasonable, or calculated to benefit the general body of creditors, or if the debtor has committed any misdemeanour under the Bankruptcy Law, or under Part II. of the Debtors' Act, 1869. It is also within the discretion of the Court to withhold its approval if the debtor has been guilty of any such misconduct as would justify the Court in withholding, suspending, or qualifying his discharge (s. 18, (5, 6)). Any trustee appointed under a composition. or scheme, is subject to all the regulations applicable to a trustee in bankruptcy, and the provisions of Part III. of the Act, with reference to the administration of property, apply to a composition or scheme as far as possible. (s. 18, (12, 13)). 1610e. tion of and vesting If a composition or scheme is not accepted and approved, Adjudica or if the creditors pass a resolution that the debtor be bankruptcy adjudged bankrupt, or pass no resolution, the Court will of property. adjudge the debtor bankrupt, and the property of the bankrupt then becomes divisible amongst his creditors |