Page:Encyclopædia Britannica, Ninth Edition, v. 3.djvu/359

Rh Insolvents Court in 1SG1, all insolvent debtors were admitted to the relief of bankrupt s discharge, but a distinction is still made on several important points between traders and non-traders. A schedule to the Act of I860 gives a list of the different occupations which are to be considered as &quot; trades,&quot; and the exception is expressly stated that &quot; a farmer, grazier, common labourer, or workman for him, shall not, nor shall a member of any partnership, association, or company, which cannot be adjudged bankrupt under this Act, be deemed as such a trader for the purposes of this Act.&quot; The liability to bankruptcy may therefore be said to be now almost co-extensive with the capacity to make a contract. Persons who cannot make a binding contract, e.g., married women, minors, lunatics, &c., cannot be made bankrupts. But where this incapacity is removed (as for example in the city of London, where by custom a married woman may trade as afemme sole), the liability to bankruptcy will arise. Proceedings in bankruptcy are now begun by a petition from one or more creditors (claiming not less than 50), alleging that the debtor in question has committed an act of bankruptcy, and praying that he may be adjudged a bankrupt. The following are &quot; acts of bankruptcy : &quot; (1 .) If the debtor has assigned his property to trustees for the benefit of his creditors ; or (2), has made a fraudulent con veyance of any of his property ; or (3), with intent to defeat his creditors, has departed from or remained out of England; or, being a trader, has left his dwelling-house, or begun to keep house, or suffered himself to be outlawed ; or (4), has filed a declaration of inability to pay his debts ; (5.) If execution for not less than 50 has been levied by seizure of goods (in the case of a trader) ; (C.) If the creditor has served a &quot; debtors summons &quot; for not less than 50, and the debtor has for three weeks (or if a trader, for seven days) neglected to pay or compound for the same. The adjudication must be asked for within six months of the act of bankruptcy, and the petitioning creditor s debt must be for a liquidated (i.e., ascertained) sum due at law or in equity, and must not be a secured debt unless the security is given up for the benefit of the creditors. Should the alleged debtor deny his indebtedness, the court may dismiss the summons or direct the issue to be tried by itself or some other competent court ; and similar proceedings take place when the debtor appears to the creditors petition and repudiates his indebtedness. The consequence of adjudication is that all the bank- i upt s property vests in the registrar of the court, until the appointment by the creditors of a trustee, and thereafter in the trustee. The word property has been expressly defined to include money, goods, things in action, land, and every description of property, whether real or personal, also obligations, ornaments, and &quot;every description of estate, interest, and profit, present or future, vested or contingent, arising out of, or incident to, property as above defined.&quot; The adjudication &quot; relates back &quot; to the time of the &quot; act of bankruptcy.&quot; The bankrupt may retain the tools of his trade and the necessary clothing and bedding of his family to the extent in all of 20. It is the duty of the trustee to discover, take possession of, realize, and distribute the bankrupt s property ; and, subject to the provisions of the Bankruptcy Act, he must follow the directions of the com mittee of inspection or the creditors. The bankrupt is required to aid in the administration. He must procure a statement of his affairs, and submit to a public examination thereon. A bankrupt under examination is not, like a witness in other courts, protected from questions tending to inculpate himself, although he cannot be compelled to answer a question whether he has done some specific act clearly of a criminal nature. His answers may afterwards be used as evidence against him on a criminal charge. The bankrupt cannot now be arrested or imprisoned except for attempts to leave the country, avoid appearance, remove or conceal his goods, &c., or, after adjudication, for removing goods above the value of 5, or failing to attend examina tion, or committing contempt of court. If a member of the House of Commons is adjudged bankrupt, he becomes incapable of sitting or voting for one year after the adjudication, unless within that time the bankruptcy is annulled or the creditors satisfied. If on the expiration of a year neither of these events has taken place, the court certifies the fact to the speaker, and the seat of the bank rupt member thereupon becomes vacant. A bankrupt peer is disqualified from sitting or voting in the House of Lords, unless and until his bankruptcy is annulled on the ground that the order of adjudication ought not to have been made, or the bankrupt is discharged by actual payment or satisfaction in the prescribed mode from all debts and liabilities due at the date of his bankruptcy. The conditions on which a bankrupt may obtain his discharge have been already stated. The discharge releases the bankrupt for all debts provable under the bankruptcy, except debts due to the Crown, or for offences against the revenue, and debts incurred by means of fraud or breach of trust. The court has power to annul the bankruptcy on various grounds, but in that case all acts properly done by the trustee in reference to the property of the bankrupt will now remain valid. A partnership may be adjudged bankrupt, and the general rule of distribution is that the joint creditors have priority of payment out of the joint or partnership property, and the separate creditors out of the separate estate. A less public form of bankruptcy is also sanctioned by the Act of 18G9. By 125 it is provided that the credi tors of a debtor may declare (by a majority in number and three-fourths in value) that his affairs are to be liquidated by arrangement and not in bankruptcy. By 12G the creditors may, by a resolution under the same conditions, resolve that a composition shall be accepted in satisfaction of the debts due to them by the debtor. If liquidation is resolved on, every creditor, whether having notice of the meeting or not, is absolutely restrained from taking any proceedings for recovering his debt, unless it appears to the court that his debt is prejudicially affected by the resolution; otherwise under liquidation or composition, the court may restrain or permit other legal processes on respect of provable debts as it thinks fit. In Scotland, as in England, the law of bankruptcy arose as a remedy against the frauds of insolvent debtors. It was declared by an Act of the Scottish Parliament (1621, c. 18) that no debtor after insolvency should fraudulently diminish the fund belonging to his creditors, and if a deed of assignment was gratuitously executed after the contract ing of debt in favour of a near relation or a confidential friend, fraudulent dealing was to be presumed. The Act 1G96, c. 5, settled the definition of a notour or notorious bankrupt, a question which had previously engaged the attention of the judges of the Court of Session. The statute defines a &quot; a notour bankrupt &quot; to be any debtor who, being under diligence by horning or caption, at the instance of his creditors, shall be either imprisoned, or retire to the abbey or any other privileged place, or flee or abscond for his personal security, or defend his person by force, and who shall afterwards be found, by sentence of the Lords of Session, to be insolvent. Bankruptcy as thus defined was, it is said, intended to afford a remedy against fraudulent preference by debtors, and not as the ground-work of a general process of distribution, although by later statutes it became a necessary requisite of every such process. The exceptions recognized in the Act of 1G9G, of persons absent from Scotland, and therefore not liable to imprisonment, or of persons exempted therefrom by special privileges, 