principles, in general, that the statute of Henry the eighth had introduced. And so far every thing was in favour of the creditor; for the bankrupt being considered as a criminal (c) could naturally expect no favour at the hands of the legislature but at length it appeared harsh to strip a man of all his resources, without relieving him at the same time from his difficulties; and by 4 Anne, c. 17, it was consequently provided, (in imitation, as Blackstone conceives, of the Roman law of cession (d),) that a bankrupt, who had thus been compelled to surrender the whole of his effects, and had in all matters conformed to the law of bankruptcy, should be entitled to his discharge from all further liability for the debts theretofore contracted. From this period, then, the bankrupt law, as distinguished from the ordinary law between debtor and creditor, involved the three general principles of a summary and immediate seizure of all the debtor's property, a distribution of it among the creditors in general, (instead of merely applying a portion of it to the payment of the individual complainant,) and the discharge of the debtor from future liability for the debts then existing; and a system of this character was thought to adapt itself so wisely to all the objects of a sound policy, that it was soon extended to cases of a kind not contemplated by its original founders. The condition of bankruptcy was made, by later statutes, to follow (if any creditor thought fit to petition), on the com mission, not only of the direct frauds before particularized, but of some other specified acts, affording only an inference of fraudulent intention, or merely arguing a strong deficiency in credit; and at length, by provisions of recent date, a trader has been allowed, at his own free will, and by a mere declaration that he is insolvent, to bring himself within the benefit, and to incur the liabilities, of bankruptcy, subject only to this condition, that he shall make it appear that his available estate is sufficient to produce not less than 1501. (e). Whatever may be the merits, however, of this peculiar system of law, it is one which the legislature has always thought fit to confine to the class of actual traders ;-for, first, it is these alone whom it has deemed to be fairly entitled to the benefit of a total discharge from debt, upon the cheap condition of surrendering what remains of their estate. [If persons in other situations of life run in debt, without the power of payment, they must take the consequences of their own indiscretion, even though they meet with sudden accidents that may reduce their fortunes. If a gentleman, or one in a liberal profession, at the time of contracting his debts, has a sufficient fund to pay them, the delay of payment is a species of dishonesty, and a temporary injustice to his creditor: and if at such time, he has not a sufficient fund, the dishonesty and injustice is the greater. He cannot, therefore, murmur, if he suffers the punishment which he has voluntarily drawn upon himself. But in mercantile transactions, the case is far otherwise. Trade cannot be carried on without mutual credit on both sides the contracting of debts is therefore here not only justifiable, but necessary. And if by accidental calamities, : (e) 12 & 13 Vict. c. 106, s. 70; 15 & 16 Vict. c. 77; 17 & 18 Vict. c. 119, ss. 16, 20. By the section last mentioned, a provision of 12 & 13 Vict. c. 106, is repealed (sect. 93), by which the condition was that the available estate should suffice to pay the creditors 5s. in the pound. Provisions on the same general principle of voluntary bankruptcy will be found in the former acts of 5 & 6 Vict. c. 122, s. 22, and 7 & 8 Vict. cc. 41, 96. [as, by the loss of a ship in a tempest, the failure of brother traders, or by the non-payment of persons out of trade, a merchant or trader becomes incapable of discharging his own debts, it is his misfortune and not his fault.] Again, it is only in respect of commercial interests, that our law views with approbation the two other principles by which the system in question is characterized, viz. the summary seizure of the whole of the debtor's property, and its compulsory surrender for the purpose of general distribution among his creditors. Any person, indeed, (whether engaged in trade or not,) who is arrested for debt, may purchase his liberty by a voluntary surrender of his whole estate, or may even be compelled to a surrender, as we shall have occasion presently to show in our remarks on the insolvent law. But the general principle of English jurisprudence, with respect to persons not actually imprisoned or bankrupt, is to leave individual creditors to their separate remedies by action, and to allow the debtor to enjoy his property without molestation, as against those creditors who do not think fit to resort to legal proceedings. The statutes of Henry, Elizabeth, and Anne, above referred to (and indeed all statutes concerning bankruptcy, of prior date to itself), were afterwards repealed by 6 Geo. IV. c. 16, which consolidated the different regulations on this subject, but has itself been since repealed by 12 & 13 Vict. c. 106, called "The Bankrupt Law Consolidation Act, 1849" (f). In proceeding to take some view of the system which this statute and the later one of 17 & 18 Vict. c. 119 (for amending the law of bankruptcy in some particulars), comprise (g), [we shall first of all (f) By this act, and by 17 & 18 Vict. c. 119, the following statutes of date subsequent to 6 Geo. 4, c. 16, are wholly or in part repealed; 1 & 2 Will. 4, c. 56; 3 & 4 Will. 4, c. 47; 1 & 2 Vict. c. 110; 2 Vict. c. 11; 2 & 3 Vict. c. 29; 5 & 6 Vict. c. 122; 10 & 11 Vict. c. 102; 11 & 12 Vict. c. 86. 7 & 8 Vict. c. 96; 8 & 9 Vict. c. 48; (g) It may be right to remark that the system of bankrupt law, though mainly laid down by statute, is also governed in various matters of practice by certain "Rules and Orders," (bearing date 19th [consider, who may become a bankrupt; secondly, what acts make a bankrupt; thirdly, the proceedings] on a bankruptcy (1); and, lastly, the effect of the bankruptcy in transferring the bankrupt's estate: in the course of which disquisition we are to be understood as confining ourselves to the case of persons who become bankrupt in their individual or natural capacities: for though some commercial or trading companies are liable under certain circumstances to become bankrupt in their corporate or associated capacity, without involving the bankruptcy of their members individually (m); yet as the course of the bankrupt law in these cases, is peculiar and remote in some respects from the track of the ordinary practice, it appears to be more in accordance with our general plan to abstain from any detail of them in this place, and merely to refer the reader to the provisions of the acts by which they are regulated. To resume, then, the consideration of ordinary bankruptcies, we shall inquire, I. Who may become a bankrupt. The general description of persons liable to the operation of the system is given in these words, by the statute of 12 & 13 Vict. c. 106, "all persons using the trade of merchandize, by October, 1852,) which were made by the Commissioners of Bankruptcy under the 8th section of the Bankrupt Law Consolidation Act, 1849, and which, by 17 & 18 Vict. c. 119, may be varied, abrogated, and made for the future by the Lord Chancellor, with the advice and assistance of the Lords Justices, and any two or more of the Commissioners in Bankruptcy. (1) In the time of Blackstone, "a commission of bankruptcy " used to issue. Afterwards, the proceedings were commenced by issuing, at the instance of a creditor (or the trader, as the case might be), a fiat, viz. a power, signed by the Lord Chancellor, and addressed to the Court of Bankruptcy, in London, or in a country district, -authorizing the proceedings to be taken in such court. But, instead of a fiat, the course is now by petition, filed by the creditor or the trader, (as the case may be,) in such court, without previous application to the Lord Chancellor. (m) See 7 & 8 Vict. cc. 111, 113, s. 48; 19 & 20 Vict. c. 47, ss. 2, 3, 107, 108. 66 way of bargaining, exchange, bartering, commission, con"signment, or otherwise, in gross or by retail; and all persons who either for themselves, or as agents or factors. "for others, seek their living by buying and selling, or by buying and letting for hire, or by the workmanship of "goods or commodities (n)." But besides these, persons engaged in many other particular employments, are enumerated (o). There is an express exemption, however, of farmers and graziers (p), who are not liable as such to become bankrupts, and their exemption is founded on this principle, that [though they buy and sell corn and hay, and beasts, in the course of husbandry, yet trade is not their principal, but only a collateral, object,—their chief concern being to manure and till the ground, and make the best advantage of its produce. And besides, the subjecting them to the laws of bankruptcy might be a means of defeating their landlords of the security which the law has given them above all others, for the payment of their reserved rents. Wherefore, also, upon a similar reason, a receiver-general of the taxes (q) is not capable as such of being a bankrupt,] lest the queen should be defeated of those extensive remedies against her debtors which are put into her hands by the prerogative. And upon other grounds of policy and convenience, there is also an ex (n) 12 & 13 Vict. c. 106, s. 65; see Paul v. Dowling, Moo. & Mal. 263; Heane v. Rogers, 9 Barn. & Cress. 577; Gibson v. King, 10 Mee. & W. 667. (0) These employments are as follows:-Alum makers; apothecaries; auctioneers; bankers; bleachers; brokers; brickmakers; builders; calenderers; carpenters; carriers ; cattle or sheep salesmen; coach proprietors; cowkeepers; dyers; fullers; keepers of inns, taverns, hotels or coffee houses; lime burners; livery stable keepers; ket gardeners; millers; packers; mar printers; shipowners; shipwrights; |