Act of bankruptcy by the purchaser.

(g) Above, p. 546, n. (u).

(h) Above, p. 549, n. (p).

(i) 2 Dart, V. & P. 995, 1004, 5th ed.; 1114, 1126, 6th ed.; 1029, 7th ed.; Rawlins on Specific Performance, 87, 88.

(k) Above, p. 546, n. (a); Expte. Barred, L. R. 10 Ch. 512.

(l) See stat. 46 & 47 Vict. c. 52, s. 55; above, p. 546, n. (a).

(m) Holloway v. York, 25 W. R. 627.

(n) Stat. 46 & 47 Vict. c. 52, s. 55 (2).

(o) Expte. Barrell, L. R. 10 Ch. 512; Collins v. Stimson, 11 Q. B. D. 142.

(p) Stat. 46 & 47 Vict. c. 52, s. 55 (7).

(q) Above, pp. 546, n. (u), 547, n. (g); see next note, and He Pollitt, 1893, 1 Q. B. 175, 455; Ponsford v. Union of London, etc. Bank, 1906, 2 Ch. 444; Davis v. Petrie, 1906, 2 K. B. 786.

(r) Franklin v. Brownlow, 14 Ves. 550.

(s) See above, p. 548: ' v. Stimson, 11 Q. B. D. 142.

(t)See above, p. 548; Collins v. Stimson, ubi sup. (u) See above, pp. 548. 51'.*.

(x) See above, p. 549. (y) See above, p. 550, n. (r)

If the purchaser be adjudged bankrupt pending completion, the vendor ought to make application in writing to the trustee in the bankruptcy requiring him to decide whether he will disclaim the contract or not; for if the trustee do not disclaim the contract within twenty-eight days after the receipt of such an application or within such extended period as may be allowed by the Court, he will no longer be entitled to disclaim the contract but shall he deemed to have adopted it (a). These last words, as to the adoption of the contract, were added to the bankruptcy law by the Bankruptcy Act, 1883 (b), and they have not yet received any judicial interpretation. Apparently, their effect is to impose on the trustee, being so deemed to adopt the contract, the liability to fulfil it with the bankrupt's assets, but not to make the trustee otherwise personally liable on the contract (c). If so, it would seem that the purchaser's trustee in bankruptcy, on being so deemed to adopt the contract, would be liable to be sued on the contract by the vendor either for specific performance or for damages (d). If however the vendor make no application requiring the trustee to elect as to disclaimer of the contract, and the trustee allow the time otherwise limited to him for disclaiming onerous property (e) to elapse without disclaiming the contract, it is not provided that the trustee shall be deemed to have adopted the contract; and in such case it does not appear that the trustee comes under any liability to perform it, or that the vendor can maintain any action thereon, either for specific performance or damages, against the trustee (f). But by the Bankruptcy Act, 1883 (g), the Court may, on the application of any person who is, as against the trustee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as to the Court may seem equitable, and any damages payable under the order to any such person may be proved by him as a debt under the bankruptcy. If the purchaser's trustee in bankruptcy do not disclaim the contract, the question arises whether the vendor can safely complete the contract with the trustee electing to adopt it. The Bankruptcy Act, 1883 (A), gives no express power to the trustee to perform the bankrupt's contracts generally. But the trustee is expressly empowered, with the permission of the committee of inspection, to bring any action or other legal proceeding relating to the property of the bankrupt (i), which includes the benefit of a contract made by the bankrupt (k); and by the former bankruptcy law the trustee was entitled to perform a contract entered into by the bankrupt, if he thought it would be beneficial to the creditors (l). It seems therefore that, as under the present Bankruptcy Act the purchaser's trustee may, with the permission of the committee of inspection, sue the vendor for specific performance of the contract on the usual terms of paying the price, so he may well secure the same benefit on the same terms without litigation where the vendor is willing to carry out the contract (m); hut it is thought that the trustee ought to obtain the permission of the committee of inspection before so performing the contract, and that the vendor cannot safely complete the contract unless this be done (n).

Adjudicatkm of bankruptcy against the purchaser.

(z) See Wms. Pers. Prop. 542, 543, 16th ed.

(a) Stat. 46 & 47 Vict. c. 52, s. 55 (4).

(b) Apparently in consequence of the decision in He Sneezmn, 3 Ch. D. 463.

(c) See the arguments put forward in the Court of Appeal and the judgment of James, L. J., in the last-mentioned case:' Williams's Bankruptcy Practice, 261, 262, 7th ed.

(d) See above, p. 552.

(c) Above, p. 546, n. (a).

(f) SeeRe Sneezum 3 Ch. D. 463

Holloway v. York, 25 W. R.627

(g) Stat, 46 & 47 Vict. c. 52, s. 55 (5).

(A) Stat. 46 & 47 Vict. c. 52;

56, 57: Re Sneezum 3Ch. D. 463, 4 7

(i) Sect. 57 (2).

(k) Sect. 168.

(I) Re Sneemm, 3 Ch. D. 463, 472, 474.

If before completion of the contract the purchaser should be adjudged bankrupt and obtain an order of discbarge or should make a composition or a scheme of arrangement with his creditors approved under the Bankruptcy Act, 1890, it appears that he would be released from all liability under the contract, even though the trustee had not disclaimed the contract and the vendor had not proved in respect of the purchaser's liability (o).

Insolvent purchaser when discharged from liability on the contract.

If the purchaser were an undischarged bankrupt at the time when the contract of sale was made, and the vendor complete the contract and receive, in ignorance of that fact, any money or negotiable securities in payment of the price, the same cannot, of course, be recovered from him, whether the trustee in bankruptcy were entitled thereto or not (p). If, however, the vendor receive notice, before completion, of the purchaser's bankruptcy, it does not appear that he would obtain a good title to any money subsequently paid to him by the bankrupt in pursuance of the contract, unless the money had been acquired by the purchaser since the commencement of the bankruptcy, and the trustee had not intervened to claim it (q). The purchaser, it seem-, would be obliged to prove that this was the case, and, if he failed to discharge this obligation satisfactorily, the vendor could not safely complete the contract without the concurrence of the trustee (r). .