Page images

which is expected. To the holder of the bill it may be important to realize his money immediately. Why then should he be deprived of the power of selling it for whatever price he can obtain ? The only ground on which this provision can be supported, is, that it will prevent holders of bills and notes from selling them improvidently. But do they need this protection? Cannot they judge best whether it is for their interest to sell or not? Will they be grateful to the legislature for protecting them, as if they were infants or idiots ? A bill or note to which an insolvent is a party seems to us as fair a subject of sale, as any other. And it appears to us an extremely doubtful policy for the legislature to pass any act to diminish the value of such a bill or note. For the effect of the act will not be to prevent the sale of such bills and notes, but merely to make their price a little less, in consequence of the danger of detection if the purchaser appears as a petitioning creditor, or the additional trouble which will ensue from using the name of the seller or assignor as the petitioning creditor, instead of that of the purchaser.

The 30th section of the 7th article, which places debts due to the state on the same footing as those to individuals, deserves unqualified approbation. There is no reason, except the right of the strongest, which should entitle any government to the lion's share in the division of an insolvent's estate. We wish that the policy of the United States in this particular could be altered.

The policy of the provision in the 34th section of the 8th article, that debts owing by the insolvent as guardian, executor, administrator, or trustee, shall be preferred to other debts, seems to us questionable. We will not stop to inquire into an obvious defect in the expression used in this section, in not fixing the meaning of the word “trustee.' As it now stands we are left in complete doubt, whether it is to be confined to trustees under wills, marriage settlements, and other instruments under seal, or is to extend to all cases in which courts of law or equity would call the insolvent the trustee of his creditor. Waving, however, this question, we cannot see the propriety of the provisions of this section. We are ready to admit that a debtor may be more culpable with regard to some kind of debts than others. We do not dispute that he is more blamable, in employing funds in his own business which ought to have been preserved in a separate form for the parties interested in

them, than in purchasing goods, for which, by unforeseen events, he becomes unable to pay. But it does not follow that in distributing the insolvent's funds, the law ought to give one class of these debts a preference to another.

The culpability of the debtor in the origin of a debt, or the strength of the moral obligation by which he is bound to pay it, will not afford any rule for giving preferences. Many common debts, which the law does not prefer, may be contracted under circumstances which render the debtor exceedingly culpable, much more so, indeed, than many cases in which he is preferred. One person, for instance, is employed to sell stocks, with orders to remit the money immediately 10 his employer, but instead of doing so, he employs the money in his own business; another knowing himself to be insolvent, purchases goods on a credit, and immediately sells them at auction for cash, and absconds with the money; a third, having a friend's endorsement on blank papers, fills them up with notes to a larger amount than was intended, and by his failure obliges his friend to pay them. In these cases, and many more of a similar character, which will readily occur to the reader, the debtor is highly culpable, and the creditor is made to suffer in consequence of the debtor's dishonesty. Yet we should hesitate very much before giving any preference even in such cases. In fact, no line can be drawn between debts, on account of the moral quality of the debtor's conduct in regard to them. In regard to some debts, his conduct may be entirely free from blame, in regard to some it may be inconsiderate, in regard to some it may be unfair, and in regard to others it may be fraudulent.

But if any line could be drawn between different classes of debts in regard to the moral conduct of the debtor, still his criminality in originating any debt, though it might be a ground for punishing him, is none whatever for punishing his other creditors. Fraud in the origin of a particular debt might well be the ground for preventing his discharge from operating upon it, but is no ground for giving the creditor a larger share of the debtor's property. All creditors seem to stand on an equal footing in regard to the debtor's property, for all may fairly be supposed to have placed equal reliance upon that fund; but the personal confidence of one creditor, or the debtor's breach of trust, affords only a ground for a further personal claim against the debtor in case of insolvency. But even in these cases, allowing a claim to exist after the discharge, would be intended as a punishınent for the debtor's misconduct, and we feel very doubtful whether some other species of punishment might not be more advisable.

In order to show the injustice which is likely to follow from the preference proposed by this section, it is only necessary to consider such cases as are likely to occur. A, for instance, who is a guardian, employs his ward's property in his own business; and the possession of these funds gives him the appearance of property. Trusting to this appearance, B, C, and D, sell goods to A on credit. A fails, with the goods of B, C, and D, remaining unsold in his hands. Is it not manifestly unjust that these goods thus obtained from B, C, and D, should be appropriated for the benefit of A's ward, and B, C, and D receive no share of them? To our seeming it would be far more just, if any preference were allowable, which however we are far from advocating, to allow B, C, and D to reclaim their respective goods remaining unsold in the hands of A.

Another case. A, at a time when he is worth $50,000, becomes executor to an estate worth $50,000 more, the proceeds of which he brings into his business. After a year or two he fails, owing $50,000 for money lent and goods sold, and $50,000, to his testator's estate. All his effects, which have arisen as much from the debts which he has himself contracted, as from the property in his hands as executor, will, by the New York law, go to pay the debt to the testator's estate, leaving nothing for the other creditors. Is there any reason, justice, or equity in this distribution ?

It may, perhaps, be urged that wards, legatees, and representatives of persons deceased, and other cestui que trusts, ought to be preferred, because the trust which they give is involuntary, while that given by common creditors is voluntary. If the fact were admitted, and it is no doubt true in many cases, the conclusion would not follow. Let us consider these classes separately. An executor is voluntarily chosen by a testator. If his estate is wasted through the unfaithfulness of the person in whom he reposed confidence, why should the whole loss be thrown upon the other creditors, rather than upon the objects of the testator's bounty. In the case of an administrator, persons interested in the estate are protected by the bond which he is obliged to give, so that if any loss accrues,

it will in most cases eventually fall on his sureties in the bond, rather than on claimants against the estate. Is there any reason why these sureties, who have voluntarily placed confidence in the insolvent, should be preferred to any other class of creditors ? With respect to guardians, if they are not appointed by the father, they are required to give bonds, and therefore the same considerations apply to them as to executors and administrators. With regard to other trustees, when the cestui que trust has himself appointed his trustee, there seems to be no reason why he should have a preference over any other creditor of the trustee. And where the trustee is selected by another person, not the cestui que trust, as the person who makes the appointment or directs the mode of making it, must be one who has an interest in or control over the property, it seems reasonable, if the property is wasted by the trustee, that all the loss should not fall upon the general creditors, but that the objects of his bounty who contded in the trustee, should bear a proportion of the loss.

The 41st section of the same act contains a very liberal provision, in giving a creditor who does not prove bis debt until after a dividend made, a right to receive the sum he would have been entitled to on any former dividend before any new dividend is declared.

We regret that we cannot pass the same praise on the next section. It is not reasonable that creditors should lose their dividends if not claimed within a year. In cases of creditors residing at a great distance, or dying within the year, this provision might operate with great severity. It is reasonable that unclaimed dividends should be divided ainong the remaining creditors, but two or three years seems to us not too long a period to delay the distribution ; for it is clear that no creditor will ever voluntarily and intentionally abandon bis dividend. His rights are superior to those of the other creditors, and should never be sacrificed, until it becomes extremely improbable that he will ever vindicate them.

The provision of the first section of the 4th article, requiring that the debtor shall have been imprisoned more than sixty days on execution, before the creditors can apply to compel an assignment, and the provision of the second section of the 6th article, that a person imprisoned for a sum exceeding five hundred dollars, must be three months imprisoned on execution, before he can petition for his discharge under that article, seem to us justly chargeable with barbarous cruelty. We cannot imagine what good purpose is served by this imprisonment, The debtor is not to be presumed guilty of any fraud or dishonesty, for he has never been tried for either, but is imprisoned solely because he is a debtor. His property is not likely to be increased by his two or three months imprisonment, but to be diminished by the expenses of himself and his family during his confinement. Neither is he more likely to have his moral sensibility improved by what he must consider the severity of his creditor, but on the contrary it will probably be deadened, and he will feel less compunction at secreting property for his own use, than he would if he had been treated with humanity. It may be said that he ought, before execution issued, to have applied for a discharge with two thirds of his creditors, or to have made such an assignment as would exonerate him from imprisonment. But it may be that two thirds of his creditors would not join in the application, and that he preferred to be imprisoned rather than assign his property without obtaining a complete discharge. And we cannot say that in so doing he would always be blamable.


12mo. pp.

Memoir of Thomas Addis Emmet. By CHARLES GLIDDEN

Haynes. With a Biographical Notice of Mr. Haynes. New York. G. & C. & H. Carvill. 1829. 132.

WHILE Mr. Emmet was attending the Supreme Court at Washington, in 1824, and boarding at the same house with Mr. Haynes, their conversation, in the intervals of their occupations, turned much upon the events of Mr. Emmet's life, and he then understood it to be Mr. Haynes's object to collect biographical materials. The facts then collected, Mr. Haynes at the time reduced to the form of a narrative, which was, however, not published until 1829, after the decease of both; and the biography of each is contained in the same volume. The facts, therefore, relating to Mr. Emmet's personal

« PreviousContinue »