Page:Harvard Law Review Volume 1.djvu/267



HEN a trader or a trading corporation becomes insolvent the common law of England and America permits the several creditors to obtain such advantage and preference as legal diligence may chance to give them, and authorizes the debtor to make such preferences among them as he pleases.

Bankrupt laws are intended to change all this, and to give to all creditors of equal rank an equal share in the debtor’s property. Courts of Equity, though they cannot interfere with legal diligence or legal assignments, have borrowed the notion of equality, and will apply it whenever a case is fully under their control, as where an insolvent corporation is being wound up, or where creditors proceed in equity against equitable assets.

Not only in Courts of Equity but in the mercantile world it is now admitted to be both wise and just that all creditors should share alike the assets of an insolvent. In some of our States bankrupt laws have been passed, and in others laws regulating general assignments, all aiming, with more or less success, at this equality.

Notwithstanding this general consensus of opinion, it is impossible to attain equality among creditors if the debtor has property and owes debts in several States or countries, by reason of a