Ex parte Forder: CA 1881

A sale of part of the property of the bankrupt was made by a trustee in bankruptcy to two buyers, one of whom was the trustee’s under-age son. The contract was not binding on the son for his minority, and the sale was also at an undervalue.
Held: The case was decided on that ground, but on a broader view. Lord Selbourne LC said: ‘Many authorities had laid down emphatically, not only with regard to trustees generally, but with regard to assignees in bankruptcy in particular, that they could not exercise the power of sale given to them for the benefit of the creditors directly or indirectly for the benefit of themselves or of anyone so connected with them as to stand in a position more advantageous than an ordinary purchaser.’ The sale being to the trustee’s son, who was still a minor and so not bound by the contract, and: ‘How under such circumstances the bankrupt’s estate will be bound by the contract it was impossible to conceive. At any rate, the circumstances threw on the trustee the burden of showing that it was a proper contract.’


Lord Selbourne LC


(1881) 25 Sol Journ 720


England and Wales

Cited by:

CitedNewgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
Lists of cited by and citing cases may be incomplete.


Updated: 06 May 2022; Ref: scu.220737