of cases. In order to ascertain what class of case this is, it seems right to consider the difference between the alternative terms. How do the obligations of an assignee taking an assignment at the date of the filing of the petition differ from the obligations of the bankrupt lessee at the same date under the lease? The main difference seems to be that an assignee is only bound by such covenants as run with the land, including, of course, rent, and only for breaches occurring after the assignment, before the assignee has assigned over, and that the liability of the assignee is a liability by a privity of estate, and not a liability in contract. Such being the difference, I have to consider under what circumstance it is that a mortgagee or under-lessee ought to be relieved in respect of liability for past breaches. It is to be remembered that the object of the disclaimer sections is to relieve the trustee from personal liability, and to give the landlord an immediate right of proof for the damage he sustains by losing his tenant. This is an incident of administration of the bankrupt's estate. It is not, I think, intended to interfere further than is absolutely necessary with the rights of the lessor and third persons inter se. I think that I ought in construing section 13 to alter as little as may be such rights. Now, in cases where there is no privity of contract, a lessor on the one hand has no rights against a mortgagee or under-lessee under the covenants; but on the other hand, the mortgagee and under-lessee would lose their security or tenancy, as the case may be, if the landlord re-entered for nonpayment of rent or nonperformance of the covenants contained in the original lease. Primâ facie, it would seem that a mortgagee or under-lessee who, by taking a vesting order, deprives the landlord of his right of re-entry should only be allowed to do so if he is willing to give the landlord those terms which the landlord could have got from him by proceedings in ejectment. Now, what is it that the landlord gains by the vesting order, which ought to make the Court deprive him of these rights? The mere fact, if it be the fact, that he has thereby a new tenant liable in contract during the whole term would not seem a sufficient reason for depriving the landlord of these rights. On the contrary, it seems to me just and right generally that a mortgagee taking a vesting order should remain liable for past breaches. I confess that I find it very difficult to define what are, and what could be, the circumstances under which the under

lessee or mortgagee should be entitled to be relieved from such obligations if he elects to take a vesting order. But it would not be safe, and it would not be right to say that under no circumstances can it be just that the under-lessee òr mortgagee electing to take a vesting order should be relieved from such past obligations, for the statute assumes that there may be circumstances under which it would be right that he should be so relieved, because it seems to me when the statute says that the person in whose favour the vesting order is made may in some cases take the vesting order on the terms that the person taking it shall be subject only to the same liabilities and obligations as if the lease had been assigned to him at the date when the bankruptcy petition was filed, it assumes that the liability of such an assignee is a liability only for breaches of covenants subsequent in date to the assignment. Such, undoubtedly, is the liability of an assignee, in so far as the covenants are concerned. I do not think that when the Legislature says that a vesting order may be made subject only to the same liabilities and obligations as if the lease had been assigned to the person taking the vesting order at the date when the bankruptcy petition was filed it can be intended to reserve to the landlord the right of ejecting from the land the person taking the vesting order in respect of breaches which occurred during the tenancy of the lessee, and before the date of the filing of the bankruptcy petition. If that is true, I can only repeat, as I said before, that I cannot myself conceive any state of things in which it would be right to relieve the person taking the vesting order from the liability as framed in section 55 originally.

But whether I am right in this view or not, it is sufficient for me to say that I do not think that in all cases of mortgages the mortgagee taking the vesting order should be relieved from all obligations incurred prior to the filing of the petition. If the Legislature had intended that, and they had intended that not only in the case of mortgagees, but also in the case of under-lessees, the simple and plain course for the Legislature to have adopted would have been to have repealed the proviso contained in subsection 6 of section 55, and to have substituted section 13 for it. But the Legislature has not done that. It has affirmed the proposition, to my mind, that, generally speaking, the right of the lessor upon a vesting

order being taken by a mortgagee or under-lessee is to have the under-lessee or mortgagee take upon himself the burden of the unperformed obligations. It is sufficient to dispose of this case, if I say that, generally, it seems to me that that was the intention of the statute, and that I find in this particular case no special circumstances that should induce me to modify that which the Legislature has laid down as the general terms upon which this vesting order is to be taken. But I feel myself that this conclusion to which I have come as to the construction of section 13 is not one which will work well in practice, and I should like to put such a construction upon section 13 as will be useful in practice. I propose, therefore, to go on and state the mode in which I think that an effect may be given to section 13 which will be more generally useful than the hard construction which I have just placed upon that section. I wish to begin by saying that I must not be taken to decide one way or the other as to whether section 55 and section 13, either both or one of them, deal necessarily with the whole term of the lease as being the subject of the vesting order. It is very difficult to suppose that the Legislature meant that where there was a lease, for, it might be 99 years, and someone-it might be for a special purpose, or it might be a purpose within his means-had taken an under-lease for a short term of years, that he could only save his property-save the money that he might have advanced or spent upon the property-by taking a lease for 99 years, and I equally think that it is difficult to assume that the Legislature intended that he should be entitled to insist, if he wished, upon a vesting order in respect of the whole of such term. It seems to me that the clear and general intention of the Legislature is, to interfere as little as possible with the rights of the lessor and third parties, and only to relieve the estate, giving a right of proof to the lessor to relieve the trustee from personal liability, and when that is done, try and conserve the rights of other persons as little altered as may be.

Now, how can I deal with section 13 so as to carry out that general purpose of the Act of Parliament? It seems to me I can do it in this way. Section 13 is a section for the relief of the undertenant or mortgagee in hard cases. It seems to me that section 13 gives to the under-lessee or mortgagee very favourable terms, more favourable terms than the rights of the parties would generally en

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title them to. Now, how can I apply section 13? Why, I can say to the landlord, "I shall make this modification under section 13 unless you do that which is right and reasonable," and that is what I propose to do here. I am of opinion here, first, that generally there is nothing in the relation of the parties, and in the election of the mortgagees to take the lease which should entitle them to these special terms. I bear in mind that the Legislature does not entitle me by the words of the section to graduate the terms. But I think in effect it does, and, therefore, what I say here is, I shall call upon the mortgagees to elect whether they will take the vesting order under the terms of section 55; but, at the same time that I call upon them to elect whether they will do that, or be excluded if there is any condition that they can suggest which is right and reasonable between the parties, I will put pressure upon the landlord, and make him accept that condition, by saying to him, "Unless you accept it I will adopt the modification under section 13."

His Lordship then called on Hansell, as representing the mortgagee company, to say if there was any condition which he thought ought to be imposed upon the lessor, as, if he could suggest any condition which was reasonable, his Lordship would put it to the lessor.

Hansell asked for time to consult his clients, and his Lordship granted the mortgagee a fortnight to make his election and suggest any terms.

March 30.

On the application this day of the mortgagee company, his Lordship made it a term of the vesting order that the landlord should at any time accept a surrender, upon the mortgagee company giving six months previous notice in writing, and performing all the covenants and obligations of the lease down to the date of disclaimer. He declined to limit the amount due for repairs to a sum to be decided or agreed, and also to limit the effect of a covenant in the lease to preserve the licence.

Solicitors: Layton, Sons & Lendon, for the Lessor.

Clapham, Fitch & Co., for the Mortgagee.

IN RE GEORGE GALLARD, EX PARTE HARRIET GALLARD.

1895, March 12. VAUGHAN WILLIAMS, J.

Bankruptcy-Costs of Trustee-Taxation-Solicitor of Trustee employing Member of Committee of Inspection-Profit Costs-Bankruptcy Rules, 1886, 1890,

r. 317.

Where the London solicitor of a trustee in bankruptcy employs as his country agent a member of the committee of inspection without the sanction of the Court, and pays the agency bill, the trustee cannot be allowed such costs on taxation so far as they represent the personal profit costs of the solicitor committee man.

THIS was a motion by way of appeal from the taxing master disallowing an item of 1397. contained in the trustee's bill of costs in the above bankruptcy. The receiving order against G. Gallard was made in 1887, and one James Harris was on 6 October, 1887, appointed trustee in the bankruptcy by the creditors with a committee of inspection. The committee of inspection consisted, among others, of Williams, a member of a Brighton firm of solicitors, Williams & Cooper; Hunt, the managing clerk of the trustee's solicitors; and Stretton, the principal creditor. The committee of inspection appointed Messrs. Ashurst, Morris, Crisp & Co., solicitors to the trustee. In the course of the liquidation Messrs. Ashurst & Co. found there was certain work in the bankruptcy necessary to be done at Brighton-the public examination of the debtor and the defence of an action in the Brighton county court-and they employed Williams & Cooper to do the work. No sanction of the Court to Williams making a profit was obtained under Rules 317, 317A (1). Williams & Cooper did the work, and sent in in the usual

(1) Rule 317, 317A of the Bankruptcy Rules, 1886, 1890, are as follows:-Rule 317. "No member of a committee of inspection of an estate shall, except under and with the sanction of the Court, directly or indirectly, by himself or any employer, partner, clerk, agent, or servant, be entitled to

derive any profit from any transaction arising out of the bankruptcy, or to receive out of the estate any payment for services rendered by him in connection with the administration of the estate, or for any goods supplied by him to the trustee for or on account

of the estate. If it appears to the