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CHAPTER THE THIRTY FIRST.
OF TITLE BY BANKRUPTCY.

THE preceding chapter having treated pretty largely of the acquifition of perfonal property by feveral commercial methods, we from thence fhall be eafily led to take into our prefent confideration a tenth method of transferring property, which is that of

X. BANKRUPTCY; a title which we before lightly touched upon ^a, fo far as it related to the transfer of the real eftate of the bankrupt. At prefent we are to treat of it more minutely, as it principally relates to the difpofition of chattels, in which the property of perfons concerned in trade more ufually confifts, than in lands or tenements. Let us therefore firft of all confider, 1. Who may become a bankrupt: 2. What acts make a bankrupt: 3. The proceedings on a commiffion of bankrupt: and, 4. In what manner an eftate in goods and chattels may be transferred by bankruptcy.

1. WHO may become a bankrupt. A bankrupt was before ^b defined to be “a trader, who fecretes himfelf, or does certain “other acts, tending to defraud his creditors.” He was formerly confidered merely in the light of a criminal or offender ^c; and in this fpirit we are told by fir Edward Coke ^d, that we have fetched as well the name, as the wickednefs, of bankrupts from foreign

.{FS}
^a See pag. 285.
^b Ibid.
^c Stat. 1 Jac. I. c. 15. §. 17.
^d 4 Inft. 277.
.{FE}
nations^e
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nations ^e. But at prefent the laws of bankruptcy are confidered as laws calculated for the benefit of trade, and founded on the principles of humanity as well as juftice; and to that end they confer fome privileges, not only on the creditors, but alfo on the bankrupt or debtor himfelf. On the creditors; by compelling the bankrupt to give up all his effects to their ufe, without any fraudulent concealment: on the debtor; by exempting him from the rigor of the general law, whereby his perfon might be confined at the difcretion of his creditor, though in reality he has nothing to fatisfy the debt; whereas the law of bankrupts, taking into confideration the fudden and unavoidable accidents to which men in trade are liable, has given them the liberty of their perfons, and fome pecuniary emoluments, upon condition they furrender up their whole eftate to be divided among their creditors.

IN this refpect our legiflature feems to have attended to the example of the Roman law. I mean not the terrible law of the twelve tables; whereby the creditors might cut the debtor's body into pieces, and each of them take his proportionable fhare: if indeed that law, de debitore in partes fecando, is to be underftood in fo very butcherly a light; which many learned men have with reafon doubted ^f. Nor do I mean thofe lefs inhuman laws (if they may be called fo, as their meaning is indifputably certain) of imprifoning the debtor's perfon in chains; fubjecting him to ftripes and hard labour, at the mercy of his rigid creditor; and fometimes felling him, his wife, and children, to perpetual foreign flavery trans Tiberim^g: an oppreffion, which produced fo

.{FS}
^e The word itfelf id derived from the word bancus or banque, which fignifies the table or counter of a tradefman (Dufrefne. I. 969.) and ruptus, broken; denoting thereby one whofe fhop or place of trade is broken and gone; though others rather caufe to adopt the word route, which in French fignifies a trace or track, and tell us that a bankrupt is one who hath removed his banque, leaving but a trace behind. (4 Inft. 277.) And it is obfervable that the title of the firft Englifh ftatute concerning this offence, 34 Hen. VIII. c. 4. “againft fuch perfons as do make bankrupt,” is a literal tranflation of the French idiom, qui font banque route.
^f Taylor. Common. in L. decemviral. Bynkerfh. Obferv. Jur. I. 1. Heinece. Antiqu. III. 30. 4.
^g In Pegu, and the adjacent countries in Eaft India, the creditor is entitled to difpofed of the debtor himfelf, and likewife of
.{FE}
his
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many popular infurrections, and feceffions to the mons facer. But I mean the law of ceffion, introduced by the chriftian emperors; whereby if a debtor ceded, or yielded up, all his fortune to his creditors, he was fecured from being dragged to a goal, “omni quoque corporali cruciatu femoto ^h.” For, as the emperor juftly obferves ⁱ, “inhumanum erat fpoliatum fortunes fuis in folidum damnari.” Thus far was jjuft and reafonable: but, as the departing from one extreme is apt to produce it's oppofite, we find it afterwards enacted^k, that if the debtor by any unforefeen accident was reduced to low circumftances, and would fwear that he had not fufficient left to pay his debts, he fhould not be compelled to cede or give up even that which he had in his poffeffion: a law, which under a falfe notion of humanity, feems to be fertile of perjury, injuftice, and abfurdity.

THE laws of England, more wifely, have fteered in the middle between both extremes: providing at once againft the inhumanity of the creditor, who is not fuffered to confine an honeft bankrupt after his effects are delivered up; and at the fame time taking care that all his juft debts fhall be paid, for far as the effects will extend. But ftill they are cautious of encouraging prodigality and extravagance by this indulgence to debtors; and therefore they allow the benefit of the laws of bankruptcy to none but actual traders; fince that fet of men are, generally fpeaking, the only perfons liable to accidental loffes, and to an inability of paying their debts, without any fault of their own. If perfons in other fituations of life run in debt without the power of payment, they muft take the confequences of their own indifcretion, even though they meet with fudden accidents that may reduce their fortunes: for the law holds it to be an unjuftifiable practice, for any perfon but a tradefman to encumber himfelf with debts of any confiderable value. If a gentleman, or one in a

.{FS}
his wife and children; informuch that he may even violate with impunity the chaftity of the debtor's wife: but then, by fo doing, the debt is underftood to be difcharged. (Mod. Un. Hift. vii. 128.)
^h Cod. 7. 71. per tot.
ⁱ Inft. 4. 6. 40.
^k Nov. 135. c. 1.
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M m m

liberal

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liberal profeffion, at the time of contracting his debts, has a fufficient fund to pay them, the delay of payment is a fpecies of difhonefty, and a temporary injuftice to his creditor: and if, at fuch time, he has no fufficient fund, the difhonefty and injuftice is the greater. He cannot therefore murmur, if he fuffers the punifhment which he has voluntarily drawn upon himfelf. But in mercantile tranfactions the cafe is far otherwife. Trade cannot be carried on without mutual credit on both fides: the contracting of debts is therefore here not only juftifiable, but neceffary. And if by accidental calamities, as by the lofs of a fhip in a tempeft, the failure of brother traders, or by the non-payment of perfons out of trade, a merchant or tradefman becomes incapable of difcharging his own debts, it is his misfortune and not his fault. To the misfortunes therefore of their faults: fince, at the fame time that it provides for the fecurity of commerce, by enacting that every confiderable trader may be declared a bankrupt, for the benefit of his creditors as well as himfelf, it has alfo to difcourage extravagance declared, that no one fhall be capable of being made a bankrupt, but only a trader; nor capable of receiving the full benefit of the ftatutes, but only an induftrious trader.

THE firft ftatute made concerning any Englifh bankrupts, was 32 Hen. VIII. c. 4. when trade began firft to be properly cultivated in England : which has been almoft totally altered by ftatute 13 Eliz. c. 7. whereby bankruptcy is confined to fuch perfons only as have ufed the trade of merchandize, in grofs or by retail, by way of bargaining, exchange, rechange, bartering, chevifance ^l, or otherwife; or have fought their living by buying and felling. And by ftatute 21 Jac. I. c. 19. perfons ufing the trade or profeffion of forivener, receiving other mens monies and eftates into their truft and cuftody, are alfo made liable to the ftatutes of bankruptcy: and the benefits, as well as the penal parts of the law, are extended as well to aliens and denizens as to na-

.{FS}
^l that is, making contracts. (Dufrefne. II. 569.)
.{FE}
tural
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tural born fubjects; being intended entirely for the protection of trade, in which aliens are often as deeply concerned as natives. By many fubfequent ftatutes, but laftly by ftatute 5 Geo. II. c. 30. ^m bankers, brokers, and factors, are declared liable to the ftatutes of bankruptcy; and this upon the fame reafon that fcriveners are included by the ftatute of James I. viz. for the relief of their creditors;) whom they have otherwife more opportunities of defrauding than any other fet of dealers: and they are properly to be looked upon as traders, fince they make merchandize of money, in the fame manner as other merchants do of goods and other moveable chattels. But by the fame act ⁿ, no farmer, grazier, or drover, fhall (as fuch) be liable to be deemed a bankrupt: for, though they buy and fell corn, and hay, and beafts, in the courfe of hufbandry, yet trade is not their principal, but only a collateral, object; their chief concern being to manure and till the ground, and make the beft advantage of it's produce. And, befides, the fubjecting them to the laws of bankruptcy might be a means of defeating their landlords of the fecurity which the law has given them above all others, for the payment of their referved rents: wherefore alfo, upon a fimilar reafon, a receiver of the king's taxes is not capable ^o, as fuch, of being a bankrupt; left the king fhould be defeated of thofe extenfive remedies againft his debtors, which are put into his hands by the prerogative. By the fame ftatute ^p, no perfon fhall have a commiffion of bankrupt awarded againft him, unlefs at the petition of fome one creditor, to whom he owes 100 l; or of two, to whom he is indebted 150 l; or of more, to whom all together he is indebted 200 l. For the law does not look upon perfons, whofe debts amount to lefs, to be traders confiderable enough, either to enjoy the benefit of the ftatutes, themfelves, or to entitle the creditors, for the benefit of public commerce, to demand the diftribution of their effects.

.{FS}
^m §. 39.
ⁿ §. 49.
^o §. eod.
^p §. 23.
.{FE}

M m m 2

IN

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IN the interpretation of thefe feveral ftatutes, it hath been held, that buying only, or felling only, will not qualify a man to be a bankrupt; but it muft be both buying and felling, and alfo getting a livelyhood by it. As, by exercifing the calling of a merchant, a grocer, a mercer, or, in one general word, a chapman, who is one that buys and fells any thing. But no handicraft occupation (where nothing is bought and fold, and therefore an extenfive credit, for the ftock in trade, is not neceffary to be had) will make a man a regular bankrupt; as that of a hufbandman, a gardener, and the like, who are paid for their work and labour^q. Alfo an inn-keeper cannot, as fuch, be a bankrupt^r: for his gain or livelyhood does not arife from buying and felling in the way of merchandize, but greatly from the ufe of his rooms and furniture, his attendance, and the like: and though he may buy corn and victuals, to fell again at a profit, yet that no more makes him a trader, than a fchoolmafter or other perfon is, that keeps a boarding houfe, and makes confiderable gains by buying and felling what he fpends in the houfe, and fuch a one is clearly not within the ftatutes ^s. But where perfons buy goods, and make them up into faleable commodities, as fhoe-makers, fmiths, and the like, here, though part of the gain is by bodily labour, and not by buying and felling, yet they are within the ftatutes of bankrupts^t; for the labour is only in melioration of the commodity, and rendering it more fit for fale.

ONE fingle act of buying and felling will not make a man a trader; bbut a repeated practice, and profit by it. Buying and felling bank-ftock, or other government fecurities, will not make a man a bankrupt; they not being goods, wares, or merchandize, within the intent of the ftatute, by which a profit may be fairly made ^u. Neither will buying and felling under particular reftraints, or for particular purpofes; as if a commiffioner of the

.{FS}
^q Cro. Car. 31.
^r Cro. Car. 549. Skinn. 291.
^s Skinn. 292. 3 Mod. 330.
^t Cro. Car. 31. Skinn. 292.
^u 2 P. W^ms. 308.
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navy
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Ch. 31.
navy ufes to buy victuals for the fleet, and difpole of the furplus and rufufe, he is not thereby madea a trader within the ftatutes ^w. An infant, though a trader, cannot be made a bankrupt: for an infant can owe nothing but for neceffaries; and the ftatutes of bankruptcy create no new debts, but only give a fpeedier and more effectual remedy for recovering fuch as were before due: and no perfon can be made a bankrupt for debts, which he is not liable at law to pay^x. But a feme-covert in London, being a fole trader according to the cuftom, is liable to a commiffion of bankrupt ^y.

2. HAVING thus confidered, who may, and who may not, be made a bankrupt, we are to inquire, fecondly, by what acts a man may become a bankrupt. A bankrupt is “a trader, who fecretes himfelf, or does certain other acts, tending to defraud his creditors.” We have hitherto been employed in explaining the former part of this defcription, “a trader:” let us now attend to the latter, “who fecretes himfelf, or does certain other acts, tending to defraud his creditors.” And, in general, whenever fuch a trader, as is before defcribed, hath endeavoured to avoid his creditors or evade their juft demands, this hath been declared by the legiflature to be an act of bankruptcy, upon which a commiffion may be fued out. For in this extrajudicial method of proceeding, which is allowed merely for the benefit o commerce, the law is extremely watchful to detect a man, whofe circumftances are declining, in the firft inftance, or at leaft as early as poffible: that the creditors may receive as large a proportion of their debts as may be; and that a man may not go on wantonly wafting his fubftance, and then claim the benefit of the ftatutes, when he has nothing left to diftribute.

TO learn what the particular acts of bankruptcy are, which render a man a bankrupt, we muft confult the feveral ftatutes, and the refolutions formed by the courts thereon. Among thefe

.{FS}
^w 1 Salk. 110. Skin. 292.
^x Lord Raym. 443.
^y La Vic v. Philips. M. 6 Geo. III. B. R.
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may
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Ch. 31.
may therefore be reckoned, 1. Departing from the realm, whereby a man withdraws himfelf from the jurifdiction and coercion of the law, with intent to defraud his creditors ^z. 2. Departing from his own houfe, with intent to fecrete himfelf, and avoid his creditors ^a. 3. Keeping in his own houfe, privately, fo as not to be feen or fpoken with by his creditors, except for juft and neceffary caufe; which is likewife conftrued to be an intention to defraud his creditors, by avoiding the procefs of the law ^b. 4. Procuring or fuffering himfelf willingly to be arrefted, or outlawed, or imprifoned, without juft and lawful caufe; which is likewife deemed an attempt to defraud his creditors ^c. 5. Procuring his money, goods, chattels, and effects to be attached or fequeftered by any legal procefs; which is another plain and direct endeavour to difappoint his creditors of their fecurity ^d. 6. Making any fraudulent conveyance to a friend, or fecret truftee, of his lands, tenements, goods, or chattels; which is an act of the fame fufpicious nature with the laft ^e. 7. Procuring any protection, not being himfelf privileged by parliament, in order to fcreen his perfon from arrefts; which alfo is an endeavour to elude the juftice of the law ^f. 8. Endeavouring or defiring, by any petition to the king, or bill exhibited in any of the king's courts againft any creditors, to compel them to take lefs than their juft debts; or to procraftinate the time of payment, originally contracted for; which are an acknowlegement of either his poverty or his knavery ^g. 9. Lying in prifon for two months, or more, upon arreft or other detention for debt, without finding bail, in order to obtain his liberty ^h. For the inability to procure bail argues a ftrong deficiency in his credit, owing either to his fufpected poverty, or ill character; and his neglect to do it, if able, can arife only from a fraudulent intention: in either of which cafes it is high time for his creditors to look to

.{FS}
^z Stat. 13 Eliz. c. 7.
^a Ibid. 1 Jac. I. c. 15.
^b Stat. 13 Eliz. c. 7.
^c Ibid. 1 Jac. I. c. 15.
^d Stat. 1 Jac. I. c. 15.
^e Ibid.
^f Stat. 21 Jac. I. c. 19.
^g Ibid.
^h Ibid.
.{FE}
themfelves,
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Ch. 31.

themfelves, and compel a diftribution of his effects. 10. Efcaping from prifon after an arreft for a juft debt of 100 l. or upwards ⁱ. For no man would break prifon, that was able and defirous to procure bail; which brings it within the reafon of the laft cafe. 11. Neglecting to make fatisfaction for any juft debt to the amount of 100 l. within two months after fervice of legal procefs, for fuch debt, upon any trader having privilege of parliament ^k.

THESE are the feveral acts of bankruptcy, expreffly defined by the ftatutes relating to this title: which being fo numerous, and the whole law of bankrupts being an innovation on the common law, our courts of juftice have been tender fo extending or multiplying acts of bankruptcy by any conftruction, or implication. And therefore fir John Holt held ^l, that a man's removing his goods privately, to prevent their being feifed in execution, was no act of bankruptcy. For the ftatutes mention only fraudulent gifts to third perfons, and procuring them to be feifed by fham procefs, in order to defraud creditors: but this, though a palpable fraud, yet falling within neither of thofe cafes, cannot be adjudged an act of bankruptcy. So alfo it has been determined expreffly, that a banker's ftopping or refufing payment is no act of bankruptcy; for it is not within the defcription of any of the ftatutes, and there may be good reafons for his fo doing, as, fufpicion of forgery, and the like: and if, in confequence of fuch refufal, he is arrefted, and puts in bail, ftill it is not act of bankruptcy ^m: but if he goes to prifon, and lies there two months, then, and not before, is he become a bankrupt.

WE have feen who may be a bankrupt, and what acts will make him fo: let us next confider,

3. THE proceedings on a commiffion of bankrupt; fo far as they affect the bankrupt himfelf. And thefe depend entirely on

.{FS}
^I Stat. 21 Jac. I. c. 19.
^k Stat. 4 Geo. III. c. 33.
^l Lord Raym. 725.
^m 7 Mod. 139.
.{FE}
the
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Ch. 30.
the feveral ftatutes of bankruptcy ⁿ ; all which fhall endeavour to blend together, and digeft into a concife methodical order.

And, firft, there muft be a petition to the lord chancellor by one creditor to the amount of 100 l, or by two to the amount of 150 l, or by three or more to the amount of 200 l ; upon which he grants a commiffion to fuch difcreet perfons as to him fhall feem good, who are then ftiled commiffioners of bankrupt. The petitioners, to prevent malicious applications, muft be bound in a fecurity of 200 l, to make the party amends in café they do not prove him a bankrupt. And, if on the other hand they receive any money or effects from the bankrupt, as a recompenfe for fuing out the commiffion, fo as to receive more than their ratable dividends of the bankrupt's eftate, they forfeit not only whot they fhall have fo revceived, but their whole debt. Thefe provifions are made, as well to fecure perfons in good credit from being damnified by malicious petitions, as to prevent knavifh combinations between the creditors and bankrupt, in order to obtain the benefit of a commiffion. When the commiffion is a warded and iffued, the commiffioners are to meet, at their own expenfe, and to take an oath for the due execution of their commiffion, and to be allowed a fum not exceeding 20 s. per diem each, at every fitting. And no commiffion of bankrupt fhall abate, or be void, upon any demife of the crown.

When the commiffioners have received their commiffion, they are firft to reveive prolf of the perfon's being a trader, and having committed fome act of bankruptcy ; and then to declare him a bankrupt, if proved fo ; and to give notice thereof in the gazette, and at the fame time to appoint three meetings. At the firft of thefe meetings an election muft be made of affignees, or perfons to whom the bankrupt's eftate fhall be affigned, and in whom it fhall be vefted for the benefit of the creditors ; which affignees are to be firft named by the commiffioners, and after-

1. FS}
   

ⁿ13 Fliz. c. 7. 1 Jac. I. c. 15. 21 Jac. I. c. 19. 7 Geo. I. c. 31. 5Geo. II. c. 30. 19Geo. II. c. 32. & 24Geo. II. 57.

1. {FE}
   
2. wards
   

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wards to be approved or rejected at the faid meeting by the major part, in value, of the creditors who fhall then prove their debts : but no creditor fhall be admitted to vote in the choice of affignees, whofe debt on the balance of accounts does not amount to 10 l. At the fecond meeting any farther bufinefs relating to the commiffion may be proceeded on. And at the third meeting, at fartheft, which muft be on the forty fecond day after the advertifement in the gazette, the bankrupt, upon notice alfo perfonally fervid upon him or left at his ufual place of abode, muft furrender himfelf perfonally to the commiffioners, and muft thenceforth in all refpects conform to the dirctions of the ftatutes of bankruptcy ; or, in default thereof, fhall be guilty of felony without benefit of clergy, and fhall fuffer death, and his goods and eftate fhall be diftributed among his creditors.

In café the bankrupt abfconds, or is likely to run away, between the time of the commiffion iffued, and the laft day of furrender, the may by warrant from any judge or juftice of the peace be committed to the county goal, in order to be forthcoming to the commiffioners ; who are alfo cmpowered immediately to grant a warrant for feifing his goods and papers.

When the bankrupt appears, the commiffioners are to examine him touching all matters relating to his trade and effects. They may alfo fummon before them, and examine, the bankrupt's wife and any other perfon whatfoever, as to all matters relating to the bankrupt's affairs. And in café any of them fhall refufe to anfwer, or fhall not anfwer fully, any lawful queftion, or fhall refufe to fubfcribe fuch their examination, the commiffioners may commit them to prifon without bail, till they make and fign a full anfwer ; the commiffioners fpecifying in their warrant of commitment the queftion fo refufed to be anfwered. And any goaler, permitting fuch perfons to efcape, or go out of prifon, fhall forfeit 500 l. to the creditors.

Vol. II.
Nnn
The
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THE brankrupt, upon this examination, is bound upon pain of death to make a full difcovery of all his eftate and effects, as well in expectancy as poffeffion, and how he has difpofed of the fame; together with all books and writings relating thereto: and is to deliver up all in his own power to the commiffioners; (except the neceffary apparel of himfelf, his wife, and his children) or, in cafe he conceals or imbezzles any effects to the amount of 20 l, or withholds any books or writings, with intent to defraud his creditors, he fhall be guilty of felony without benefit of clergy ^o.

AFTER the time allowed to the bankrupt for fuch difcovery is expired, any other perfon voluntarily difcovering any part of his eftate, before unknown to the affignees, fhall be entitled to five per cent. out of the effects fo difcovered, and fuch farther reward as the affignees and commiffioners fhall think proper. And any truftee willfully concealing the eftate of any bankrupt, after the expiration of the two and forty days, fhall forfeit 100 l, and double the value of the eftate concealed, to the creditors.

HITHERTO every thing is in favour of the creditors; and the law feems to be pretty rigid and fevere againft the bankrupt: but, in cafe he proves honeft, it makes him full amends for all this rigor and feverity. For if the bankrupt hath made an ingenuous difcovery, hath conformed to the directions of the law, and hath acted in all points to the fatisfaction of his creditors; and if they, or four parts in five of them in number and value, (but none of them creditors for lefs than 20 l.) will fign a certificate to that purport; the commiffioners are then to authenticate fuch certificate under their hands and feals, and to tranfmit it to the lord chancellor: and he, or two judges whom he fhall ap-

.(FS)
^o By the laws of Naples all fraudulent bankrupts, particularly fuch as do not furrender themfelves within four days, are punifhed with death: alfo all who conceal the effects of a bankrupt, or fet up a pretended debt to defraud his creditors. (Mod. Un. Hift. xxviii. 320.)
.(FE)
point,
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Ch. 31.
point, on oath made by the bankrupt that fuch certificate was obtained without fraud, may allow the fame; or difallow it, upon caufe fhewn by any of the creditors of the bankrupt.

IF no caufe be fhewn to the contrary, the certificate is allowed of courfe; and then the bankrupt is entitled to a decent and reafonable allowance out of his effects, for his future fupport and maintenance, and to put him in a way of honeft induftry. This allowance is alfo in proportion of his former good behaviour, in the early difcovery of the decline of his affairs, and thereby giving his creditors a larger dividend. For, if his effects will not pay one half of his debts, or ten fhillings in the pound, he is left to the difcretion of the commiffioners and affignees, to have a competent fum allowed him, not exceeding three per cent: but if they pay ten fhillings in the pound, he is to be allowed five per cent; if twelve fhillings and fixpence, then feven and a half per cent; and it fifteen fhillings in the pound, then the bankrupt fhall be allowed ten per cent: provided, that fuch allowance do not in the firft cafe exceed 200 l, in the fecund 250 l, and in the third 300 l. ^p

BESIDES this allowance, he has alfo an indemnity granted him, of being free and difcharged for ever from all debts owing by him at the time he became a bankrupt; even though judgment fhall have been obtained againft him, and he lies in prifon upon execution for fuch debts; and, for that among other purpofes, all proceedings on commiffions of bankrupt are, on petition, to be entered of record, as a perpetual bar againft actions to be commenced on this account: though, in general, the production of the certificate properly allowed fhall be fufficient evidence of all previ-

.(FS)
^p By the Roman law of ceffion, if the debtor acquired any confiderable property fubfequent to the giving up of his all, it was liable to the demands of his creditors. (Ff. 42. 3. 4.) But this did not extent to fuch allowance as was left to him on the fcore of compaffion, for the maintenance of himfelf and family. Si quid mifericordiae caufa ei fuerit relictum, puta menftcuum vel annuum, alinentorum nominee, non oportet prepter hoe bona ejus iterates venuudori: nec enim fraudandus eft alimentis ottidianis. (Ibid 1.6.)
.(FE)

N n n 2

ous

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ous proceedings. Thus the bankrupt becomes a clear man again; and, by the affiftance of his allowance and his own induftry, may become a ufeful member of the commonwealth: which is the rather to be expected, as he cannot be entitled to thefe benefits, but by the teftimony of his creditors themfelves of his honeft and ingenuous difpofition; and unlefs his failures have been owing to misfortunes, rather than to mifconduct and extravagance.

FOR no allowance or indemnity fhall be given to a bankrupt, unlefs his certificate be figned and allowed, as before-mentioned; and alfo, if any creditor produces a fictitious debt, and the bankrupt does not make difcovery of it, but fuffers the fair creditors to be impofed upon, he lofe all title to thefe advantages. Neither can he claim them, if he has given with any of his children above 100 l. for a marriage portion, unlefs he had at that time fufficient left to pay all his debts; or if he has loft at any one time 5 l, or in the whole 100 l, within a twelvemonth before he became bankrupt, by any manner of gaming or wagering whatfoever; or, within the fame time, has loft to the value of 100 l. by ftockjobbing. Alfo, to prevent the too common practice of frequent and fraudulent or carelefs breaking, a mark is fet upon fuch as have been once cleared by a commiffion of bankrupt, or have compounded with their creditors, or have been delivered by an act of infolvency: which is an occafional act, frequently paffed ^q by the legiflature; whereby all perfons whatfoever, who are either in too low a way of dealing to become bankrupts, or not being in a mercantile ftate of life are not included within the laws of bankruptcy, are difcharged from all fuits and imprifonment, upon delivering up all their eftate and effects to their creditors upon oath, at the feffions or affifes; in which cafe their perjury or fraud is ufually, as in cafe of bankrupts, punifhed with death. Perfons who have been once cleared by this, or either of the other methods, (of compofition with their creditors, or bankruptcy) and afterwards become bankrupts

.(FS)
^q Stat. 28 Geo. II. c. 13. 32 Geo. II. c. 28. 1 Geo. III. c. 17. 5. Geo. III. c. 41.
.(FE)
again,
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again, unlefs they pay full fifteen fhillings in the pound, are only thereby indemnified as to the confinement of their bodies; but any future eftate they fhall acquire remains liable to their creditors, excepting their neceffary apparel, houfehold goods, and the tools and implements of their trades.

THUS much for the proceedings on a commiffion of bankrupt, fo far as they affect the bankrupt himfelf perfonally. Let us next confider,

4. HOW fuch proceedings affect or transfer the eftate and property of the bankrupt. The method whereby a real eftate, in lands, tenements, and hereditaments, may be transferred by bankruptcy, was fhewn under it's proper head, in a former chapter ^r. At prefent therefore we are only to confider the transfer of things perfonal by this operation of law.

BY virtue of the ftatutes before-mentioned all the perfonal eftate and effects of the bankrupt are confidered as vefted, by the act of bankruptcy, in the future affignees of his commiffioners, whether they be goods in actual poffeffion, or debts, contracts, and other chofes in action; and the commiffioners by their warrant may caufe any houfe or tenement of the bankrupt to be broken open, in order to enter upon the feize the fame. And, when the affignees are chofen or approved by the creditors, the commiffioners are to affign every thing over to them; and the property of every part of the eftate is thereby as fully vefted in them, as it was in the bankrupt himfelf, and they have the fame remedies to recover it ^s.

THE property vefted in the affignees is the whole that the bankrupt had in himfelf, at the time he committed the firft act of bankruptcy, or that has been vefted in him fince, before his debts are fatisfied or agreed for. Therefore it is ufually faid, that once a bankrupt, and always a bankrupt: by which is meant,

.(FS)
^r pag. 285.
^s 12 Mod. 324.
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that a plain direct act of bankruptcy once committed cannot be purged, or explained away, by any fubfequent conduct, as a dubious equivocal act may be ^u; but that, if a commiffion is afterwards awarded, the commiffion and the property of the affignees fhall have a relation, or reference, back to the firft and original act of bankruptcy ^u. Infomuch that all tranfactions of the bankrupt are from that time abfolutely null and void, either with regard to the alienation of his property, or the receipt of his debts from fuch as are privy to his bankruptcy; for they are no longer his property, or his debts, but thofe of the future affignees. And, if an execution be fued out, but not ferved and executed on the bankrupt's effects till after the act of bankruptcy, it is void as againft the affignees. But the king is not bound by this fictitious relation, nor is within the ftatutes of bankrupts ^w; for if, after the act of bankruptcy committed and before the affignment of his effects, an extent iffues for the debt of the crown, the goods are bound thereby ^x. In France this doctrine of relation is carried to a very great length; for there every act of a merchant, for ten days precedent to the act of bankruptcy, is perfumed to be fraudulent, and is therefore void ^y. But with us the law ftands upon a more reafonable footing: for, as thefe acts of bankruptcy may fometimes by fecret to all but a few, and it would be prejudicial to trade to carry this notion to it's utmoft length, it is provided by ftatute 19 Geo. II. c. 32. that no money paid by a bankrupt to a bona fide or real creditor, in a courfe of trade, even after an act of bankruptcy done, fhall be liable to be refunded. Nor, by ftatute 1 Jac. I. c. 15. fhall any debtor of a bankrupt, that pays him his debt, without knowing of his bankruptcy, be liable to account for it again. The intention of this relative power bveing only to reach fraudulent tranfactions, and not to diftrefs the fair trader.

THE affignees may purfue any legal method of recovering this property fo vefted in them, by their own authority; but cannot

.(FS)
^t Salk. 110.
^u 4 Burr. 32.
^w Atk. 262.
^x Viner. Abr. t. creditor and bankr. 104.
^y Sp. L. b. 29. c. 16.
.(FE)
commence
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commence a fuit in equity, nor compound any debts owing to the bankrupt, nor refer any matters to arbitration, without the confent of the creditors, or the major part of them in value, at a meeting to be held in purfuance of notice in the gazette.

WHEN they have got in all the effects they can reafonably hope for, and reduced them to ready money, the affignees muft, within twelve months after the commiffion iffued, give one and twenty days notice to the creditors of a meeting for a dividend or diftribution; at which time they muft produce their accounts, and verify them upon oath, if required. And then the commiffioners fhall direct a dividend to be made, at fo much in the pound, to all creditors who have before proved, or fhall then prove, their debts. This dividend muft be made equally, and in a ratable proportion, to all the creditors, according to the quantity of their debts; no regard being had to the quality of them. Mortgages indeed, for which the creditor has a real fecurity in his own hands, are entirely fafe; for the commiffion of bankrupt reaches only the equity of redemption ^z. So are alfo perfonal debts, where the creditor has a chattel in his hands, as a pledge or pawn for the payment, or has taken the debtor's lands or goods in execution. And, upon the equity of the ftatute 8 Ann. c. 14. (which directs, that, upon all executions of goods being on any premifes demifed to a tenant, one year's rent and no more fhall, if due, be paid to the landlord) it hath alfo been held, that under a commiffion of bankrupt, which is in the nature of a ftatute-execution, the landlord fhall be allowed his arrears of rent to the fame amount, in preference to other creditors, even though he hath neglected to diftrein, while the goods remained on the premiles; which he is otherwife intitled to do for his intire rent, be the quantum what it may. ^a. But, otherwife, judgments and recognizances, (both which are debts of record, and therefore at other times have a priority) and alfo bonds and obligations by deed or fpecial inftrument (which are called debts by fpecialty, and are ufually the next in order) thefe are all put

.(FS)
^z Finch. Rep. 466.
^a Atk. 103, 104.
.(FE)
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on a level with debts by mere fimple contract, and all paid pari paffu. Nay, fo far is this matter carried, that, by the exprefs provifion of the ftatutes, debts not due at the time of the dividend made, as bonds or notes of hand payable at a future day, fhall be paid equally with the reft ^b, allowing a difcount or drawback in proportion. And infurances, and obligations upon bottomry or refpondentia, bona fide made by the bankrupt, though forfeited after the commiffion is awarded, fhall be looked upon in the fame light as debts contracted before any act of bankruptcy.

WITHIN eighteen months after the commiffion iffued, a fecond and final dividend fhall be made, unlefs all the effects were exhaufted by the firft. And if any furplus remains, after paying every creditor his full debt, if fhall be reftored to the bankrupt. This is a cafe which fometimes happens to men in trade, who involuntarily, or at leaft unwarily, commit acts of bankruptcy, by abfconding and the like, while their effects are more than fufficient to pay their creditors. And, if any fufpicious or malevolent creditor will take the advantage of fuch acts, and fue out a commiffion, the bankrupt has no remedy, but muft quietly fubmit to the effects of his own imprudence; except that, upon fatisfaction made to all the creditors, the commiffion may be fuperfeded ^c. This cafe may alfo happen, when a knave is defirous of defrauding his creditors, and is compelled by a commiffion to do them that juftice, which otherwife he wanted to evade. And therefore, though the ufual rule is, that all intereft on debts carrying intereft fhall ceafe from the time of iffuing the commiffion, yet, in cafe of a furplus left after payment of every debt, fuch intereft fhall again revive, and be chargeable on the bankrupt ^d, or his reprefentatives.

.(FS)
^b Lord Raym. 1549.
^c 2 Ch. Caf. 144.
^d Atk. 244.
.(FE)