A lessee executed a deed by which he conveyed all his real and personal property to trustees for the benefit of his creditors. This was an act of bankruptcy. A commission was issued against him and he was declared bankrupt. He then sought to forfeit the lease for breach of a covenant against assigning the lease without the consent of the lessor.
Held: the assignment, being an act of bankruptcy, was void and did not operate as a valid assignment of the lessee’s interest, with the result that there was no forfeiture. ‘Consequently the bankrupt’s assignment to the trustees not only became void and a nullity ab initio, but was actually avoided by the bankruptcy and the proceedings under the same before any advantage was attempted to be taken of the supposed forfeiture. Under these circumstances, for want of the deed’s operating in law as an assignment, it was not in consideration of law an assignment by the bankrupt; but in that respect the same as if no such deed had ever been executed by him; and we think that the answers given to this by the lessor, viz. that it would then depend on a subsequent contingency (viz. the issuing of a commission andc, whether the bankrupt’s deed would operate a forfeiture or not, and that it would be good in the interim) is no sufficient answer to this objection against the forfeiture, the bankrupt’s deed being void and avoided ab initio, and the title of the assignees of the bankrupt’s estate and effects commencing by relation from the time of execution of that deed…In consequence of that contingency (viz. the proceedings under the bankruptcy having taken place), no assignment (the event on which the forfeiture was to arise) has in effect happened…’
Judges:
Holt J
Citations:
(1826) 5 B and C 11
Cited by:
Cited – Re Dennis (A Bankrupt) CA 22-May-1995
A joint tenancy was severed (under the former law) on the event of an act of bankruptcy, and not only by the later actual adjudication of bankruptcy. The vesting of the debtor’s property in the trustee which occurred on adjudication was automatic; . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 29 April 2022; Ref: scu.186749
