Debts released by order of discharge.

Rule as to undis

charged

bankrupt obtaining credit.

Effect of

(74.) From what debts does an order of discharge release the bankrupt?

From all debts provable in bankruptcy,

except :

(1.) Any debt on a recognizance.

(2.) Any debt with which the bankrupt may be chargeable at the suit of the Crown, or of any person for any offence against a statute relating to the public revenue, or at the suit of the sheriff or other public officer on a bail bond entered into for the appearance of any person prosecuted for any such offence, and he will not be discharged from such excepted debts, unless the Treasury certify in writing their consent to his being discharged therefrom.

(3.) Any debt or liability incurred by means of any fraud or fraudulent breach of trust, to which he was a party, or any debt or liability whereof the bankrupt has obtained forbearance by any fraud to which he was a party (s. 30). (75.) What is the rule as to an undischarged bankrupt obtaining credit?

An undischarged bankrupt, adjudged bankrupt under the Act of 1883, who obtains credit to the extent of £20 or upwards from any person without informing such person that he is an undischarged bankrupt, is guilty of a misdemeanour, and may be dealt with and punished as if he had been guilty of a misdemeanour under the Debtor's Act, 1869 (s. 31).

(76.) What effect has an order of discharge order of upon the liability of a person jointly liable with on liability the bankrupt?

discharge

of person jointly

liable with bankrupt.

An order of discharge does not release any person who, at the date of the receiving order, was a partner or co-trustee with the bankrupt,

or was jointly bound or had made any joint contract with him, or any person who was surety or in the nature of a surety for him (s. 30). (77.) Where a debtor having obtained his discharge in a bankruptcy or a liquidation by arrangement, promises, for a new and valuable consideration, to pay a debt from which he has been released by the discharge, will an action lie against him for the amount of the debt?

Debtor promising to pay debt after discharge in ruptcy, or liquidation by arrange

bank

to

by debtor pay debt in full after composi

After composition resolutions have been passed ment. and registered, can the debtor, before the comple- Agreement tion of the composition, enter into a valid agreement with one of the creditors who is bound by the resolutions, to pay him his debt in full, the creditor agreeing at the same time to give the debtor further tions credit?

An action will lie upon a promise by a debtor who has obtained his discharge in bankruptcy or liquidation to pay a debt which has been released by virtue of the discharge, provided such promise was made upon a new and valuable consideration (Jakeman v. Cook, L. R. 4 Ex. D. 26; 48 L. J. Ex. 165, 27 W. R. 171.) But it is only after a composition has been fully worked out and paid, that the debtor can, for a new consideration, enter into a binding contract to pay in full the debt of one of the creditors bound by the resolutions to accept a composition. Such an agreement entered into prior to the completion of the composition is in contravention of good faith, and the spirit of the bankruptcy laws and is void. (Ex parte Barrow, re Andrews, 45 L. J. 197).

tion resolu

passed.

(78.) In what case is a foreign discharge, or a dis- Foreign or charge pursuant to a Colonial Act, a good answer to colonial

E

discharge. Plea of English discharge in bar to action in colonies.

Liability for future calls.

an action here for debt? Can an English discharge be pleaded in bar to an action in the colonies for debt? "By the comity of nations, a foreign discharge is a good answer to an action here for a debt contracted in the country where such discharge was granted; but it is none if the debt were contracted in this country; nor, in like case, is a discharge pursuant to a Colonial Act. An English discharge, however, can be pleaded in bar to an action in the colonies for a debt incurred there, because this country retains a paramount jurisdiction over her own colonies. Indeed an English discharge is a complete bar in the English Courts to a debt contracted in any part of the world." (Baldwin, 2nd ed. 266.) (79.) A shareholder in a company, registered under the Act of 1862, becomes bankrupt, having paid all calls then due. The trustee disclaims the shares which remain in the bankrupt's name. After the bankrupt has obtained his discharge, the company is wound up, and calls are made. No future calls were proved for in the bankruptcy. Is the bankrupt liable for such future calls? Give reasons for your answer.

He is not liable (1) Pecause the disclaimer operates to determine as from the date of the receiving order, the rights, interests, and liabilities of the bankrupt in respect of the shares (Bankruptcy Act, 1883, s. 55); and (2) Because the future calls constituted a debt provable in the bankruptcy, from which the bankrupt would be released by his discharge. (Bankruptcy Act, 1883, ss. 30, 37.)

PART II.

DISQUALIFICATIONS OF BANKRUPT.

(80.) Under what disqualifications does a bank- Disqualifi rupt labour?

He is disqualified for :

(1.) Sitting or voting in the House of Lords, or on any Committee thereof, or being elected as a peer of Scotland or Ireland to sit and vote in the House of Lords:

(2.) Being elected to, or sitting or voting in the House of Commons, or on any Committee thereof:

(3.) Being appointed or acting as a justice of the peace:

(4.) Being elected to, or holding or exercising the office of mayor, alderman, or councillor :

(5.) Being elected to, or holding or exercising the office of guardian of the poor, overseer of poor, member of a sanitary authority, or member of a school board, highway board, burial board, or select vestry (s. 32).

And if a person is adjudged bankrupt whilst holding the office of mayor, alderman, councillor, guardian, overseer, or member of a sanitary authority, school board, highway board, burial board, or select vestry, his office thereupon becomes vacant (s. 34).

(81.) How may the disqualifications to which a bankrupt is subject be removed?

They will cease if and when

cations of bankrupt.

How disqualifications may be re

moved.

Member of

(1.) The adjudication of bankruptcy against him is annulled; or

(2.) He obtains from the Court his discharge with a certificate to the effect that his bankruptcy was caused by misfortune without any misconduct on his part. The Court may grant or withhold such certificate as it thinks fit, but any refusal of such certificate is subject to appeal (s. 32).

(82.) What is the course to be pursued when a member of the House of Commons becomes bankbankruptcy rupt?

Parliament,

of.

Annulment

If a member of the House of Commons is adjudged bankrupt, and the disqualifications arising therefrom are not removed within six months from the date of the order, the Court is, immediately after that time, to certify the same to the Speaker, and thereupon the seat of the member will become vacant (s. 33).

(83.) In what cases has the Court power to annul of adjudi- an adjudication?

cation.

Effect of annulment.

(1.) Where in the opinion of the Court a debtor ought not to have been adjudged bankrupt; or

(2.) Where it is proved to the satisfaction of the Court that the debts of the bankrupt are paid in full (s. 35).

(84.) What is the effect of an adjudication being annulled?

Where an adjudication is annulled, all sales and dispositions of property and payments duly made, and all acts theretofore done, by the official receiver, trustee or other person acting under their authority; or by the Court, are valid, but the property of the debtor who was adjudged