Notice. How notice formerly considered. When the issuing of a commis sion to be deemed notice. Corporation or committed an act of bankruptcy. A most important branch of the law of relation, therefore, remains to be considered, viz. what amounts to notice of a previous act of bankruptcy sufficient to avoid a payment to, or a dealing with, the bankrupt which payment or dealing would otherwise have been good. The notice, which would deprive a party of the protection given him by former acts of parliament, has been defined very differently in the various statutes; some confining it to actual knowledge (1) of an act of bankruptcy, while others extended it to notice "of an act of bankruptcy, or insolvency" (2), or of "bankruptcy, insolvency, or stoppage of payment." (3) And by Sir Samuel Romilly's acts it was first declared, that the mere striking of a docket (4) and afterwards, that the issuing of a commission only (5) should amount to constructive notice of an act of bankruptcy;-this last provision being in conformity with the old rule of law, namely, that the issuing of a commission was a public act, of which all the world was bound to take notice. (6) - But by section 83. of the new statute, the issuing of a commission is only declared to be notice of a prior act of bankruptcy (if an act of bankruptcy has been actually committed before the issuing of the commission) — provided the adjudication of bankruptcy shall have been notified in the London Gazette, and the person to be affected by such notice may reasonably be presumed to have seen the same. By section 85., also, if any accredited agent of any body (1) 1 Jac. 1. c. 15. s. 14. (5) 49 G. 3. c. 121. s. 2. or known," in the statute 1 Jac. 1. c. 15. s. 14. (upon the construction of which that case was decided) must be construed according to their ordinary and popular sense, viz. an actual understanding or knowledge, and not a knowledge to be implied by force of law (from the secret issuing of an unknown commission) against the truth of the fact. corporate or public company shall have had notice of any Notice. act of bankruptcy, the corporation or company shall be thereby deemed to have had such notice. public company. act. The notice, as defined by the new statute (1), is simply How no"notice of a prior act of bankruptcy;"-and the only fed in new tice speciconstructive notice is the issuing of a commission, provided a previous act of bankruptcy has been actually committed, and the adjudication has been notified in the Gazette, and the person to be affected by the notice may reasonably be presumed to have seen the same. The only actual notice, therefore, that will now prejudice a party, being confined to the act of bankruptcy, it becomes immaterial to consider those cases, decided with reference to the former statutes, and determining what would and what would not amount to notice of insolvency (2), or stoppage of payment. When the act of bankruptcy consists in the execution As to noof a fraudulent deed, it has been determined that notice tice of a fraudulent of the deed by a person, who is not a party to it, is not conveysufficient notice of the act of bankruptcy.(3) (1) See Sections 81, 82. 50. v. Schofield, 2 M. & S. 538. (5) Read v. Ward, 7 Vin. 119. ance. 698 CHAP. XVII. OF SET-OFF. SECT. 1. Of the Right of Set-off generally in Bankruptcy. 2. Construction of the Term "Mutual Credit," and herein of Cases of Trust and Deposit. 3. As to joint and separate Debts. 4. Set-off between particular Persons. 5. Set-off on Bills and Notes. 6. Of an equitable Set-off. 7. Of the Mode of balancing the Accounts. of the new statute. SECTION I. Of the Right of Set-off generally in Bankruptcy. Provision By the 50th section of the new act it is provided, that where there has been mutual credit given by the bankrupt, and any other person; or where there are mutual debts between the bankrupt and any other person, the commissioners shall state the account between them, and one debt or demand may be set off against another, notwithstanding any prior act of bankruptcy committed by the bankrupt before the credit given, or the debt contracted by him; and what shall appear to be due on either side on the balance of the account shall be claimed or paid on either side respectively; and every debt or demand, made proveable by the statute against the estate of the bankrupt, may also be set off in manner aforesaid against such estate, provided that the person claiming the benefit of such set-off had not, when such credit was given, notice of an act of bankruptcy committed by the bankrupt. the former law. This section has consolidated the provisions of the 5 G. 2. Right of. c. 30. s. 28. and the 46 G. 3. c. 135. s. 3.; but it has also Altermade some alterations in the enactments of those statutes, ations in which it may be as well in the first place to notice. First, the credit need not now be given (as by the 46 G. 3. c. 135.) two months before the date of the commission; therefore, the accounts may now be taken down to the date of the commission. (1) Secondly, the notice, by which the party is to be affected, is confined simply to notice of an act of bankruptcy; and it is now, therefore, immaterial to inquire whether the party had notice that the bankrupt was insolvent, or had stopped payment. Thirdly, the statute declares that every debt or demand, which may be proved, may also be set off against the bankrupt's estate. Consequently all those cases (2), which have been decided not to be within the provision as to mutual credit, because the debt was contingent, would now meet with a different decision; as such debts may now be proved under the 56th section of the new statute. But, with this exception, it does not appear that there is any provision in the new statute to constitute a case of mutual credit, which was not so before. (3) And as the accounts may, also, now be taken down to the date of the commission, provided the party had no notice of an act of bankruptcy when the credit was given, he will not now be deprived (as he was before the statute) (4) of his right to retain a payment made to him by the bankrupt after an act of bankruptcy, for the purpose of taking up bills not due, but which he has made himself liable to pay when due, for the bankrupt's accommodation. The right of set-off in Bankruptcy did not, as has been As to frequently supposed, originate in the statute law; but was origin of (1) See Southwood v. Taylor, 1 B. & A. 471. as to the effect of the 46 G. 3. (2) Ex parte Groome, 1 Atk. 115. Hancock v. Entwistle, 3 T. R. 455. Ex parte Whittaker, 1 Rose, 301. Sampson v. Burton, 2 B. & (3) Eden, 184. (4) Tamplin v. Diggins, 2 Camp. 512. set-off; more extensive in bank ruptcy the general statutes. Right of. (before any interference of the legislature) adopted in practice by the courts of law, which permitted a creditor to set off his debt against his bankrupt debtor, and to pay over or prove the balance, as the case might happen to be. (1) And this remedy or right of set-off of the creditor of a bankrupt is more comprehensive and effectual, than the general law of set-off under the statutes of the 2 G. 2. c. 22., than under and 8 G. 2. c. 24. in the construction of which, indeed, doubts were formerly entertained whether those statutes could be extended to assignees under a commission of bankruptcy (2), on the ground that there was no mutual debt between the assignees of a bankrupt and the creditor. But, though the right of set-off in bankruptcy is perfectly distinct and independent from that given by the general statutes of set-off, yet the latter are held now to extend to actions by assignees, concurrently with the provision of the bankrupt law as to cases of mutual credit. (3) It is not, however, intended to discuss every case that has been decided under the general statutes of set-off, but only those in which any point of bankruptcy has been agitated in the course of the decision. (1) Anon. 1 Mod. 215. Chap man v. Derby, 2 Vern. 117.; and see 1 Christ. B. L. 279. 499. 1 Goodinge B. L. 190. The first statute that took notice of the right was the 4 & 5 Ann. c. 17. which was continued for five years by the 7 Ann. c. 25. s. 4. This last stat. was re-enacted with some variation by the 5 G. 1. c. 24., which, also, was but a temporary act; and after its expiration, a similar but more effectual provision relative to mutual debts and credits was incorporated in the 5 G. 2. c. 50. s. 28. Next came the additional provision of the 46 G. 3.; which last provision, together with that of the 5 G. 2. seem to have formed the ground-work for the enactment in the present statute. (2) Ryall v. Larkin, 1 Wils. 155. (3) Ridout v. Brough, Cowp. 133. Lock v. Bennet, 2 Atk. 48. |