UNDISCHARGED BANKRUPT

New Zealand Times, Volume L, Issue 11708, 21 December 1923, Page 2

UNDISCHARGED BANKRUPT

PROPERTY TRANSACTIONS. QUESTION OF VALIDITY. REFERENCE BY MR JUSTICE CHAPMAN. “It was not, therefore, part of the estate which vested in the assignee, but when once it took the form of money paid unconditionally into the hands of the Maori, it could not he any longer protected, and must he regarded as having been acquired when so received,” said Mr Justice Chapman, in an interesting judgment regarding a bankruptcy matter which came before His Honour some time ago in the Taranaki district. The bankrupt in question was a native. . . “It then beoamo liable to bo claimed by creditors or by tlio assignee in their interest.”

His Honour wont on to say that tlie decisions which modify the sweeping language of the statutory provision of the Bankruptcy Act, 1908 (section 61) os to after acquired property protect persons dealing with the bankrupt from such capricious action of the courts as would make every penny gained by ihe debtor the exclusive property of the ns.dgnco. To the immediate operation of this statute they offered a well-known and long recognised exception. Tho head note of Cohen v. Mitchell (supra) expressed the standard in cases to which that case applied. It was not, however, of universal application; indeed it bad been described as expressing an exception rather than tho fenera.l rule. Regarding ex parte 'orcl (1. Gh.D. 52), that case appeared to point clearly to a rule that a case like this was not to be treated as resembling the case of an undischarged bankrupt being left to trade and deal with another set of creditors. Taking Cohen v. Mitchell as the authority laying down the rule applicable to this case, the head note runs as follow; “Where a bankrupt who has not obtained his discharge enters into transactions in respect of property acquired after the bankruptcy, then, untu the trustee intervenes, all such transactions with any person dealing with the bankrupt bona fide and for value Whether with or without knowledge of, the bankruptcy, are valid as against' the trustee.”