Can a debtor who is on the eve of bankruptcy make a promissory note that is not payable?
British Columbia, Canada
The following excerpt is from Tildesley v. Weaver, 1998 CanLII 6690 (BC SC):
Thus in Trueman v. Fenton the debtor, on the eve of his bankruptcy, purchased a quantity of linen from the plaintiff. Payment of the purchase price was deferred. The debtor gave the plaintiff two promissory notes payable at six weeks and two months respectively. After he became bankrupt and before his discharge the debtor, by way of compromise, provided the plaintiff with a new note for approximately half the amount owing in satisfaction of the indebtedness. The new note was held to be valid.
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