A lessee assigned the lease by an assignment which constituted an act of bankruptcy. He was subsequently adjudicated bankrupt and his trustee disclaimed the lease. During the interval between the assignment of the lease and the date of the adjudication two quarters’ rent had fallen due, the lessors had sued the assignee and had recovered judgment for the first quarter’s rent, and had commenced proceedings for the second quarter’s rent. The action did not come on for trial until after the adjudication. Was the assignee of the lease liable for the rents notwithstanding the relation back of the trustee’s title?
Held: He was. The bankruptcy provisions, including the relation back of the trustee’s title, were not provisions for the benefit of the bankrupt. As a general rule bankruptcy did not affect the rights and liabilities of persons not parties to the bankruptcy, except so far as might be necessary in the interests of the trustee and creditors and the administration of the bankrupt’s estate in bankruptcy. It was not necessary in those interests to hold that the bankruptcy had freed the assignee from his liability to the lessor. The court reserved its opinion on what would have been the outcome if bankruptcy had supervened before any action had been take by the lessor against the assignee.
Judges:
Romer LJ, Sir Richard Henn Collins MR
Citations:
[1902] 1 KB 595 CA
Jurisdiction:
England and Wales
Citing:
Approved – Titterton v Cooper CA 1882
The bankrupt was a lessee. His trustee did not disclaim the lease, and the question was whether he was personally liable for the rent which had fallen due between the date of his appointment and the date on which he elected not to disclaim.
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, Landlord and Tenant
Updated: 12 May 2022; Ref: scu.186760