what would happen if an Agent went bankrupt after receiving money from the Principal?

...but without paying a third party to whom P was now bound? How would P reclaim the money from A?

The principal has an equitable interest in the money and the agent is treated as a trustee of it, unless the agent was free to mix the principal's money with his own and use the funds in his general business.

In the former case the principal will have a proprietary claim to the money. It won't matter if the agent has mixed the funds with his own improperly because the principal will have a claim in the mixed fund and the normal rules of following and tracing should apply. Of course if the principal's funds have been dissipated (for example the agent paid them into a separate bank account, then used the entire account balance to go on holiday), then the principal will only have a personal claim (I guess it would be 'falsifying the account'). But that won't help him if the agent is skint.

In the latter case where the agent was allowed to use money for his general business then the principal can only ever have a personal claim, even if the money he paid across is still readily identifiable, because the principal can't have intended to keep a beneficial interest in that situation.

Are you studying Commercial Law at the moment? Could you recommend me a book? I'm reading the Mckendrick Commercial Law book but I'm finding it pretty hard to navigate, it's not very clear to me. You really seem to know what you're talking about.

Yeah I'm studying it at the moment - so bear in mind that if I seem like I know what I'm talking about, I might actually be completely wrong and end up failing the course

I'm mainly using Sealy and Hooley - it's a 'cases and materials' book but just as good as a textbook imo because of the depth it goes into. I have Goode & Mc as well but don't really get on with it either. And finally our recommended book is Dobson & Stokes - which is only really useful as an introductory book, don't think I would recommend it because it's quite superficial.