INTRODUCTION.

Insolvent Defined, etc.-Blackstone, in his Commentaries, vol. 2, 285, 471, defines an insolvent person as one who is unable, from any cause, to pay his debts, or who is unable to pay his debts as they fall due, in the usual course of trade or business: See 2 Kent's Commentaries, 389; 3 Dowl. & R. 218; Sugden on Vendors, 487. In its primary sense, insolvency is more extensive in meaning than bankruptcy. Bankruptcy denotes the condition of a trader or merchant who is unable to pay his debts in the usual course of business. Story, J., in 3 Stor. C. C. 453, derives “bankrupt" from bancus ruptus, a broken bench or counter, showing that the use of the word is confined to describing broken merchants or tradesmen. The preamble to the statute 34 and 35 Henry VIII., chap. 6, a. D. 1542, is as follows: "Whereas divers and sundry persons, craftily obtaining into their own hands great substance of other men's goods, do suddenly flee to parts unknown, or keep their houses, not minding to pay or restore to any of their creditors their debts and dues, but, of their own wills and pleasures, consume the substance obtained by credit of other men for their own pleasure and delicate living, against all reason, equity and good conscience." It appears from this that the word bankrupt was only applied to a dishonest merchant or trader. This meaning is now, by common usage, changed, and no dishonesty attaches to its use, but the word is still properly applied only to traders and merchants. Insolvency, then, strictly applies to any person not a trader or merchant who can not pay his debts. Both bankruptcy and insolvency laws contemplate an equal distribution of the insolvent or bankrupt person's property. Congress having the power to establish a uniform rule of the subject of bankruptcies (Const. U. S., arts. 1 and 8), the several states, from a desire of avoiding what might seem to be an infringement upon the exclusive right of Congress, have mostly termed their laws upon the subject "insolvency laws," or "acts

for the relief of insolvent debtors." Such legislation has obliterated the distinction between bankruptcy and insolvency laws, and there appears to be now, in effect, no practical difference between the two words.

Authority to Make a Bankrupt Law. -In Ogden v. Saunders, 12 Wheat. 218, it was held that the power of making a bankrupt law, which shall be binding upon all creditors, and all description of debts, rests in Congress, and when Congress acts, its authority is exclusive, and thereby the state laws are rendered inoperative.

Operation of State Laws.-That the state laws only operate upon creditors residing in the state where the debtor resides is affirmed in Cook v. Moffat, 5 How. 295.

Discharge, When not a Bar.-A discharge will not bar a note due a citizen of another state: Baldwin v. Hale, 1 Wall. 223, 234. It is not a bar to debts contracted in other states, unless it appear that the plaintiff proved his debt against the defendant's estate in insolvency, or in some manner became a party to the proceedings: Gilman v. Lockwood, 4 Wall. 409.

Contracts between Citizens of Different States.-It has been also decided that an insolvent law can not be made to apply to contracts made within the state between a citizen of the state and one who is a citizen of another state: Ogden v. Saunders, 12 Wheat. 213.

Foreign Creditor, When Bound by Proceedings.-If a creditor out of the state voluntarily makes himself a party to the proceedings under the insolvent laws of the state, and accepts a dividend, he is bound by his own act, and is deemed to have waived his ex-territorial immunity and right: Sturgis v. Crownshield, 4 Wheat. 122; 3 Story Const. 252-256; and there are numerous other cases to the same effect.

Obligation of Contracts not to be Impaired. The act of 1880, not being amendatory of the act of 1852, supplemented by the act of 1876, but being independent of those statutes, seems only to affect contracts made after it went into operation, which was June 16, 1880. Any other view recognizes the right of a state to pass laws impairing the obligation of a contract. An insolvency law permitting a debtor's discharge from debts created while the law is in force, does not impair a contract. The law of the place where the agreement is made enters into and becomes part of the contract; and a debtor's obligations made after the taking effect of the law of 1880,

may be discharged upon compliance with the terms of the act. This view is sustained by the reasoning in Sturgis v. Crowninshield, 4 Wheat. 122; Farmers' and Mechanics' Bank v. Smith, 6 Id. 131; McMillan v. McNeill, 4 Id. 209; Ogden v. Saunders, 12 Id. 213, and cases referred to.

Repeal of Conflicting Laws.-Section sixty-eight of the Act of 1880 repeals all laws in conflict with its provisions, except that pending cases are not affected. Unless the courts hold that the Act of 1852, and the supplemental Act of 1876, are not in conflict with the provisions of the Act of 1880, there can be no discharge from debts contracted prior to the sixteenth day of June, 1880, unless the acts of 1852 and 1880, and the supplement of 1876, are treated as one.

It will not be presumed that the legislature intended to repeal the existing law. If the intention was to repeal all laws upon the subject of insolvency, the Acts of 1852 and 1876 would have been mentioned by title, but only "conflicting laws" are mentioned. Subsequent statutes do not abrogate former ones by containing different provisions on the same subject; they must be contrary to produce that effect: Saul v. His Creditors, 5 Martin La. 569; same case, 16 Am. Dec. 212.

Conflict of Laws.-Each law takes hold of an insolvent debtor's estate and distributes it ratably among his creditors, and in proper cases grants a discharge to the debtor. So far the Acts are in harmony with each other. If there is a conflict it is in the practice, not in the substance of the law. When two laws upon a cognate subject, passed at different times, are inconsistent with each other, the one first passed must yield to the latter: Estate of Wexom, 35 Cal. 320; McMann v. Bliss, 31 Cal. 122. See, also, Ex parte Smith, 40 Id. 419; People v. Burt, 43 Id. 560, and there are numerous other cases to the same effect.

Assignments for Benefit of Creditors.-The Act of 1880 must also be read and construed in connection with Title III., Part II. of the Civil Code, allowing general assignments for the benefit of creditors. See Billings v. Billings, 2 Cal. 107; Dana v. Stanford, 10 Id. 269; Wellington v. Sedgwick, 12 Id. 469; Cheever v. Hayes, 3 Id. 471; Cheever v. Woods, 8 Id. 152; Nagle v. Lyman, 14 Id. 450; Lawrence v. Neff, 41 Id. 566.

Construction of the Act.-The statute, being in derogation of the common law, will be strictly construed. All the requirements of the statute must be strictly complied with: McAllister

v. Strode, 7 Cal. 428; Judson v. Atwill, 9 Id. 478. Proceedings in insolvency are special, and no intendment can be made in favor of the jurisdiction: McDonald v. Katz, 31 Id. 167. Nor will the liberal construction established by section 4 of the Code of Civil Procedure be allowed, the statute not being part of one of the codes.

Schedule, Inventory.-Wherever the words "schedule" and "inventory" are used in the Act, in different sections, there can be no reasonable doubt that they are used as synonymous terms: Bump's Bankruptcy, 13. But where they are used as in sections 5 and 6, which require the "petition,' schedule," and " inventory" to be verified and filed, the meaning is not clear, especially as, in construing statutes, effect must be given to every word: Langenoar v. French, 34 Cal. 92. However, as the word "inventory" has a general meaning, applicable to insolvency and bankruptcy proceeding (Bouvier's Law Dic.), and as the word "schedule" has a limited meaning (Id.), and as it will be difficult to affix a separate meaning to each word as herein used, they should be regarded as of one meaning.

Serving Debtors of Insolvent.-There appears to be no provision for serving the debtors of the insolvent with the order provided for in section nine, forbidding the payment of any debts and the delivery of any property to the insolvent. Nor is provision made for making and filing the schedule, if the debtor appears in involuntary proceedings, without it resides in the power to punish delinquents for contempt, under the provisions of section sixty-four.

Proof of Debts.-The Act contemplates that all debts must be finally proved in court; but if the language used is only considered, the filing of an uncontested verified claim is sufficient, under section fifteen, to permit a claimant to participate in the election of assignee. The forms in the appendix are prepared under the belief that the superior courts will, by rule, not only require a verified claim to be filed, but an allowance by the judge before the claimant participates in the choice of assignee. The authority to do this is found in section fortyseven, where it is provided that witnesses may be examined in respect to alleged debts.

Sales of Property.-Under section twenty-one the assignee is given authority to sell, at public auction, all the estate of the insolvent, and as ordered by the court. Under section twentyfive, which apparently deals only with private sales, a petition,