The Daily Telegraph. SATURDAY, NOVEMBER 29, 1884.

Daily Telegraph (Napier), Issue 4168, 29 November 1884, Page 2

The Daily Telegraph. SATURDAY, NOVEMBER 29, 1884.

The Bankrupt Act Amendment Act of last session was a -useful and an important measure, the chief features of wlnclr should be known to all business people. Passing over those provisions , which are of merely technical character, we shall notice the principal points in the Act which alters tho law of ISB3. Any separate creditor of any bankrupt in declared to be at liberty to prove his debt under an adjudication oi bankruptcy made against: him jointly with any other person or persons, and distinct accounts are to be kept by the Assignee of the joint estate and also of tho separate estate or. estates of each bankrupt, and the separate estate is to be applied in the first place in satisfaction of tho debts of the separato creditors, and in case there shall be a surplus it is to be carried to the account of the joint estate, and any surplus of the joint estate is to be carried to the account of the separate estate of each bankrupt in the proportion to their respective interests in tho joint estate. If at any time, or from time to time, prior to the date of the order of discharge there is good cause to believe that the debtor is able to pay any sum towards the discharge of debts, claims or demands provable under the bankruptcy the Court may issue a summons requiring him to appear and be examined respecting his ability to make such payment. Should tho the debtor not be in New Zealand the Court may order service to be made by such moans and in such manner as it thinks fit. A Registrar or Clerk of any local Court of Bankruptcy may during any vacation or during the illness or absence from the district of a Judge of the Court exercise all the jurisdiction, power and authority conferred by section 93 of the Act of 1883, i.e., may issue warrants for the arrest of absconding debtors and of debtors who there is reason to believe are about to remove their goods, conceal, or destroy books, documents or writings. It is further expressly declared that tho Clerk oi every local Court may exercise the like powers as are by the Act of 1883 conferred upon a Registrar. This will allow in towns like Invercargill, Oamaru, and Timaru tho Clerk of the District Court tc adjudicate instead of waiting until'the District Judge comes round, -which has been found to cause great delay and loss tc estates. Clauses 78 and 79 of the Act o: 1883 are absolutely repealed, and it is ennoted in lieu thereof :—" (1) Every conveyance or transfer of property or cbarg< thereon made, every payment made, ever] obligation incurred, and every judicial ob ligation taken or suffered by any pcrsoi tmable to pay his debts when they becom due, from his own money, in favour of an; creditor, or any person in trust for an; creditor, with a'view of giving such credita a preference over the other creditors, shall if the person making, incurring, taking paying, or suffering the same is adjudged i bankrupt within threo months after th dato of making, incurring, taking, paying or suffering the samo, be deemed fraudulen and void af against the Official Assignee (2) This section shall not affect the right of any person making a title in good faitl and for valuable consideration through o under a creditor of the bankrupt. , ] Thi effect of this amendment is in thi first place that in all cases of alleged or sus pected fraudulent preference itwill be neces sary to prove that auy conveyance, transfe: or payment sought to be declared void a; against the Assignee has been made with i view of giving one creditor a preferena over the other creditors. Under the term; of the Act of 1883 this proof is not literalli required, but the Judges have in severa cases recently referred to in these column decided that where there has been no intention of fraudulent preference there should, bi no avoidance of the transaction. Tho "avoid ance of preferential payment" is not specifically provided for, such payments being, i may be presumable considered, to be sufficiently guarded against in the clause quoted Tho sections of the original Act which refer to dealing- with land hold under lease oi any agreement by a bankrupt' pro also repealed, and new provisions substituted of an altogether moro comprehensive character. The Assignee may under certain denned circumstances disclaim such property, and the Court may make an order rescinding the contract made with the bankrupt on such terms as it may think equitable, and any damages payable to the other party to the contract may bo proved as a debt under the estate. Any other person injured by the operation of a disclaimer is to be deemed to be a creditor of the bankrupt to the extent «f the injury and may accordingly prove tho same as a debt under the bankruptcy. The Bankruptcy Act of 1883 has been proved, by the formal decision of the Courts, to ho defective in regard to the preferential clause of a landlord for rent. Section 121 enacts that in any case where a sum of money is due by a. bankrupt for rent, auch rent not exceeding the half-year's rent accrued, shall bo paid by the Assignee in priority of other debts; but a person entitled to more than one half- year's rent may proTe for the excess, and it shall not be necessary for the landlord to levy a distress." The Judges have ruled that this does not debar a landlord from his common law rights to distrain. The Amendment Act puts the matter straight, in accordance with the clear intention of the Legislature, by declaring that Section 121 shall be read with the following proviso :—" Provided always that the preferential clause of any landlord, or person hereby conferred, in respect of one half-year's rent shall be limited, and apply only to the rent of premises in which there are goods liable, but for the bankruptcy, to distress for rent, and he shall not be entitled to more than tbo value of the goods distrainablc as a preferential claim, but may prove for the rent due." No distress for rent levied on the property of a bankrupt after the filing of his petition is to bo avoidable, nor unless by leave of the Court, after the filing of a creditor's petition. Section 137 of the Act of 1883, which declares what are to be deemed preferential debts, and the order in which they are to be paid, is amended to tho offect that salaries and wages of employes shall he paid in priority of other debts in all cases where the person has been in tho employment of the bankrupt within sixty days immediately preceding the filing of the petition. From and after the coming into operation of the Act it is declared not to be necessary to make any order of adjudication on a debtor's petition ; but the filing thereof is ipso facto to havo the like effect as if such an order had been made. The Official Assignee in every bankruptcy estate is declared to " hare the right to appear and examine the bankrupt whenever the debtor is before tho Court." We arc indebted to the Mercantle and Bankruptcy Gazette for tho above information.