attaching immediately by force of the contract upon all that property which in futuro may be brought on the premises, is clearly different from a contract that the mortgagee shall have a power of entering upon the premises for the purpose of seizing and taking possession of that future property. . . . A power, however, is very different from an interest; and if the extent and limit of the contract be merely that the mortgagee shall have such a power, then an interest will not arise under the power till the power is exercised." An But § 388. Agreements between Landlord and Tenant. agreement that a landlord may take chattels as additional security for his rent is not binding until seizure, in those jurisdictions in which the law gives no right of distress.1 removable trade fixtures may be thus secured to the landlord, though not to third persons, because being affixed to the soil, the world has notice that the right of removal depends upon the terms of the lease.2 And in several of the Southern States a lien may be given upon growing crops without possession, and such lien binds the trustees.3 In England a mortgagor of land may attorn tenant to his mortgagee to the extent of the fair value of one year's rent, that being the limit of distress in case of bankruptcy. An agreement for more will be voidable by the trustees as a fraud on the bankrupt law.5 § 389. Directions and Orders. A mere direction to an agent or consignee to pay money to a creditor, not communicated to the creditor so as to create an equitable lien, is revoked by the assignment. A usage to permit insurance brokers 1 Re Morrow, 1 Lowell, 386, Fed. Cas. No. 9850; Re Dyke, 9 N. B. R. 430, Fed. Cas. No. 4227. 2 Re Morrow, 1 Lowell, 386, Fed. Cas. No. 9850. 3 Wylie v. Smith, 2 Woods, 673, Fed. Cas. No. 18,110; McLean v. Klein, 3 Dillon, 113, Fed. Cas. No. 8884. 4 Morton v. Woods, L. R. 4 Q. B. 293; Re Stockton Iron Furnace Co., 10 Ch. D.335; Ex parte Punnett, 16 Ch. D. 226; Ex parte Voisey, 21 Ch. D. 442. 5 Ex parte Williams, 7 Ch. D. 138; Ex parte Jay, 14 Ch. D. 19; Ex parte Jackson, 14 Ch. D. 725. 6 Scott v. Porcher, 3 Meriv. 652; Ex parte Perry, 3 M. D. & De G. 252; Ungewitter v. Von Sachs, 4 Ben. 167, Fed. Cas. No. 14,343; Morrell v. Wootten, 16 Beav. 197. See Yeates r. Groves, 1 Ves. 280; Yates v. Hoppe, 9 C. B. 541; Ex parte Hankey, 4 Dea. 1; McMenomy v. Ferrers, 3 Johns. 71; Tibbits v. George, 5 A. & E. 302; Peyton v. to set off losses and return premiums against their personal liability for the premiums is revoked by the bankruptcy of the underwriter, if the broker has no personal interest by way of lien or otherwise in these losses. A covenant that the proceeds arising out of a contract of the debtor with a third person shall be paid to a creditor, though it be valid and be acted on to the time of the bankruptcy, will not bind the trustees to pay money which they earn by carrying out the contract; because the bankrupt cannot covenant for the future action or earnings of his trustees.2 § 390. Naked Powers. - A mere power to a creditor to collect a debt or deal with a chose in action may be considered revoked unless it can be fairly gathered from the whole transaction that an interest in the chose itself was intended to be given. In some of the cases cited in the note, the revocation was by death, or by a conveyance of the property to a purchaser with notice. The fact that the power purports to be irrevocable will not of itself make it so.3 It should be noted. in this connection that, prima facie, a power to a creditor to collect a debt for his own use is an assignment. Some of the cases in the last note may seem to overlook this; and an order to the debtor's debtor to pay out of a particular fund, if communicated to the creditor creates a lien.5 § 391. Power coupled with an Interest. Any power or license which is part of or in aid of a grant, security or lien, legal or equitable, is not revoked by bankruptcy. Of this the Hallett, 1 Caines, 363; Alley v. Hotson, 4 Camp. 325; Ex parte Steward, 3 M. D. & De G. 265; Re Whitlock, 1 Manson, 33. manier, 2 Mason, 342, Fed. Cas. No. 6898, 8 Wheat. 174, 3 Mason, 294, Fed. Cas. No. 6897; Webb v. Walker, 7 Cush. 46; Langdon v. Langdon, 4 Gray, 1 Minett v. Forrester, 4 Taunt. 541; 186; Kempton v. Bray, 99 Mass. 350. Parker v. Smith, 16 East, 382. 2 Ex parte Mackay, L. R. 8 Ch. 643; Wiltshire Iron Co. v. Great Western Rwy. Co., L. R. 6 Q. B. 101; Ex parte Nichols, 22 Ch. D. 782; Ellis v. Boston, Hartford, & Erie R. R. Co., 107 Mass. 1, 30, per Wells, J. 3 See Hovill v. Lethwaite, 5 Esp. 158; Howes v. Ball, 7 B. & C. 481; Goodsell v. Benson, 13 R. I. 225; Hunt v. Rons 4 Gerrish . Sweetser, 4 Pick. 374; Matheson v. Rutledge, 12 Richardson (S. C.) 41; Hutchinson v. Heyworth, 9 A. & E. 375; Diplock v. Hammond, 2 Sm. & Giff. 141. 5 Ex parte Kirk, 1 Atk. 107; McMenomy v. Ferrers, 3 Johns. 71; Legro v. Staples, 16 Maine, 252; Patten v. Wilson, 34 Penn. St. 299; Lowery v. Steward, 25 N. Y. 239. most usual illustration is a power of sale contained in a mortgage.1 In building contracts it is often stipulated that the owner of the premises may have or use materials of the builder as security for advances or to complete the contract on default. If the owner is in possession of the land and the contract gives him a lien as soon as the materials are brought upon the land, it will be valid.2 If not, and, if the time for seizure has not come, or if the seizure is not made before the title of the trustees accrues, the creditor's right is gone.3 In all these cases, a seizure made in pursuance of the contract before the title is changed will be respected.* § 392. Bankruptcy does not revoke a Will. The decree does not revoke the bankrupt's will, because there may be assets at the death of the bankrupt upon which it will operate,5 nor a statutory power to an assignee in an earlier insolvency to seize any property which does not come within the scope of the decree in bankruptcy, such as property acquired after the discharge; nor a covenant to settle such property. If, however, the bankrupt law is broad enough to admit proof of damages under such a covenant, the debt will be discharged, if the bankrupt receives his certificate, and the collateral covenant though not revoked, will be discharged.8 A power will not be revoked by relation to an act of bankruptcy committed in the country unless it was known to the 1 Jones, Mortgages, 5th ed. §§ 1793 a; Dixon v. Ewart, 3 Meriv. 322; Hall v. Bliss, 118 Mass. 554; Calloway v. People's Bank, 54 Ga. 441; Lightner's Appeal, 82 Penn. St. 301; Smart v. Sandars, 5 C. B. 895. 2 Brown v. Bateman, L. R. 2 C. P. 272; Ex parte Newitt, 16 Ch. D. 522; Hawthorn v. Newcastle R. Co., 3 Q. B. 734 note; Crowfoot v. Lond. Dock Co., 2 C. & M. 637; Manton v. Moore, 7 T. R. 67. 3 Tripp . Armitage, 4 M. & W. 687; Rouch v. Great Western Rwy. Co., 1 Q. B. 51; Ex parte Barter, 26 Ch. D. 510; Ex parte Jay, 14 Ch. D. 19; Reeve v. Whitmore, 4 De G. J. & S. 1; Carr v. Krehl v. Great Central Gas Co., L. R. 5 Ex. 289; Hope v. Hayley, 5 E. & B. 830; Re Waugh, 4 Ch. D. 524; Re Styan, 1 Phil. 105; Young v. Hope, 2 Ex. 105. 5 Charman v. Charman, 14 Ves. 580. 6 Ex parte Pain, L. R. 3 Ch. 639; Lavender v. Gosnell, 43 Md. 153. 7 Lyde v. Mynn, 4 Sim. 505;. 1 MyL & K. 683. 8 Collyer v. Isaacs, 19 Ch. D. 343; Thompson v. Cohen, L. R. 7 Q. B. 527; Cole v. Kernot, L. R. 7 Q. B. 534 note. person for whose benefit it is exercised.1 This point is of no importance in the United States because the title of the assignees does not relate back to such an act. §393. Authority of Agent and Partner. It was said by a learned judge that the bankruptcy of an agent revokes his authority, and this dictum is repeated by text writers; 2 but it is not sound as applied to ordinary agencies. Revocation in bankruptcy depends upon the change of title, and the trustees of an agent have no title to the property of the principal. The practical application of this dictum, if it were sound, would be that a third person knowingly dealing with a bankrupt agent would not be protected; but no such decision can be found. On the contrary it has been repeatedly decided that a bankrupt acting as trustee or agent may maintain actions notwithstanding his bankruptcy.3 The principal, no doubt, will expressly revoke, if he finds occasion. If one has been entrusted with the note of another as an accommodation, he may endorse it after his bankruptcy. 5 The agency of a partner to act for the firm may be said to be revoked by the bankruptcy and assignment; but the true way of stating this is that the partnership being dissolved, the agency which is an incident falls with it. § 394. Submission to Arbitration. - A submission to arbitration in the country does not bind the trustees under a subsequent decree, and therefore ceases to be mutual, and the other party may revoke, without liability on his covenants. If however the trustees have appeared before the arbitrators, and the case has then proceeded beyond the time for revoking, both parties will be bound." An arbitration by rule of court cannot be revoked by the trustees. Money paid into court by the defendant to abide an award is subject to a lien and does not become general assets, 1 Elliott v. Turquand, 7 App. Cas. 79. 2 Per Holroyd, J., Hudson v. Granger, 5 B. & Ald. 27; Story, Agency, 9th ed. § 486; Evans, Prin. & Agt. 92. 3 Supra, § 369. 4 See Wallace v. Hardacre, 1 Camp. 45; Arden v. Watkins, 3 East, 317; Sparhawk v. Broome, 6 Binney, 256; Willis v. Freeman, 12 East, 656. 5 Craven v. Edmondson, 6 Bing. 734. 6 Marsh v. Wood, 9 B. & C. 659. 7 Dod v. Herring, 1 Russ. & M. 153. unless it comes within the cause for dissolving attachments.1 If an award and judgment for the defendant for costs were made after the bankruptcy, and the assignees had not intervened, the costs were formerly not a provable debt and the bankrupt was personally bound to pay them.2 § 395. General Summary of the Assignee's Title. 1. The assignees take every valuable property or interest, vested or contingent, legal or equitable, which the bankrupt held, or was entitled to, for his own benefit, at the date of the petition in bankruptcy. 2. In addition to this they take, as representing the general creditors, whatever creditors by judgment or otherwise could have recovered of third persons at law or in equity, because held for the bankrupt on a secret trust or conveyed by him in actual or constructive fraud of their rights. 3. They may upset conveyances or payments in fraud of the bankrupt law itself, such as preferences. 4. They do not take, even at law, property in which the bankrupt had a legal but not a beneficial interest; nor those personal rights which by the general policy of the law are not assignable even in equity, such as actions for libel or assault; nor what the statute expressly exempts for the benefit of the debtor and his family. 5. They are not bound to accept property which may involve them or the estate in loss, such as leaseholds and shares in companies subject to assessments. 1 Taylor v. Shuttleworth, 6 Bing. N. C. 277; Ex parte Michie, 1 M. D. & De G. 181; Tayler v. Marling, 2 M. & G. 55; Ex parte Banner, L. R. 9 Ch. 379. 2 Andrews . Palmer, 4 B. & Ald. 250; Haswell v. Thorogood, 7 B. & C. 705. |