865 



BANKRUPT. 



BANKRUPT. 



attached, sequestered, or taken in execution, or make or cause to 

 be made either within this realm or elsewhere any fraudulent grant or 

 conveyance of any of his lands, tenements, goods, or chattels, or make 

 or cause to be made any fraudulent surrender of any of his copyhold 

 lands or tenements, or make or cause to be made any fraudulent gift, 

 delivery, or transfer of any of his goods or chattels ; every such trader 

 doing, suffering, procuring, executing, permitting, making, or causing 

 to be made, any of the acts, deeds, or matters aforesaid, with intent to 

 defeat or delay his creditors, shall be deemed to have thereby com- 

 mitted an act of bankruptcy." A few observations will elucidate the 

 several acts of bankruptcy mentioned in the above clause. 



Departiny the realm. This must be done with a view to defeat or 

 delay creditors, or it will not constitute an act of bankruptcy ; but if it 

 is done with such intention it is an act of bankruptcy, though no 

 creditor may, IK fact, be delayed by it. The intention is, in general, 

 a question of fact to be decided by a jury. If a man leave the realm 

 in such circumstances that a delay of his creditors will be the almost 

 necessary consequence of his departure, he will be considered to have 

 intended that they should be delayed within the meaning of the law. 

 The word realm means the jurisdiction of the courts of England, and 

 therefore departing to Ireland or Scotland, or a British colony, which 

 are out of such jurisdiction, may constitute an act of bankruptcy. 



Trader departing from his dwelling house. If this is done witK 

 the intent to delay creditors, it is an act of bankruptcy, though none 

 are actually delayed. And if the trader departs without making the 

 necessary arrangements for carrying on his business, it will be presumed 

 that he had the intention specified in the act. The absence must be 

 voluntary, ,in order to constitute an act of bankruptcy. And the 

 trader's own declarations of his bad circumstances, of his fears of 

 arrest, &c., are evidence of his intentions, if they accompany corre- 

 sponding acts, such as removing his goods, books, &c. 



Or otheridse absent himself. A trader's absenting himself from his 

 abode, if voluntarily done, and not by means of an arrest, is prima 

 facie evidence of his intention to delay his creditors. And the absent- 

 ing himself from the Royal Exchange, if he habitually frequents it, or 

 from any temporary place of resort, may have the same effect. The 

 proprietor of a theatre retiring behind the scenes and giving orders to 

 be denied, was held to commit an act of bankruptcy. But a mere 

 breach of an appointment with an individual creditor will not be so 

 considered, though the breach of an appointment to meet creditors 

 generally may be an act of bankruptcy. 



Or begin to keep house. These words having been adopted in the 

 early statutes respecting bankrupts, have acquired a well-known 

 technical meaning, signifying the trader's retiring or concealing himself 

 in his house or place of business in order to avoid creditors, or the 

 giving orders to be denied in case they should call. A general order of 

 denial is not an act of bankruptcy, unless followed up by actual denial, 

 or ly some other act which is evidence of a beginning to keep house. 

 The denial may be at a friend's house, as well as at the house of the 

 trader himself. Closing the doors and shutters of a banking-house 

 has been held a " beginning to keep house," although the trader did 

 not reside at the banking-house. 



Or suffer himself to be arrested or taken in execution for any debt not 

 due, or yield himself to prison. This must be a voluntary yielding to 

 prison by a trader who either is not bond fide indebted to the person 

 on whose behalf he is arrested, or who, on his arrest, has funds to pay 

 the debt, but prefers going to prison with a view to defeat his general 

 creditors. A compulsory going to prison under a bond fide arrest is 

 only an act of bankruptcy when the imprisonment endures twenty- 

 one days. 



Or suffer himself to be outlawed. That is, if a man keep out of the 

 way with intent to defraud his creditors, in consequence of which he 

 is outlawed for want of due appearance to legal process. 



Or fraudulently procure his goods to be attached, &c. This extends both 

 to fraudulent attachments of the trader's goods under the custom of 

 foreign attachment in London and other cities [ATTACHMENT], and to 

 fraudulent judgments, executions, and attachments (Common Law 

 Procedure Act, 1854), out of the superior courts. 



Or make, either within the realm or elsewhere, any fraudulent grant or 

 conveyance of his lands, tenements, goods or chattels. A conveyance of 

 the trader's property, if executed abroad, is now held an act of bank 

 ruptcy. 



An assignment of all a trader's effects to trustees for the benefit ol 

 creditors is a clear act of bankruptcy, since it deprives him of the 

 power of carrying on hia trade, goes to defeat the distribution under 

 the Bankrupt Law, and to vest the property in persons of his own 

 choice, instead of those provided by the law. But if all the creditors 

 (as often happens) assent to, and sign such an instrument, it becomes 

 valid, since they are then estopped, by their assent, from treating it as 

 an act of bankruptcy. And by the 68th section of the Bankrupt Law 

 Consolidation Act, 1849, such an assignment is not to be deemed an 

 act* of bankruptcy, unless a petition for adjudication be filed against 

 the trader within three calendar months from the execution ; provided 

 the assignment be executed by every trustee within fifteen days from 

 the date of the execution by the trader, and the execution be attested 

 and publicly notified in the manner pointed out by the statute. 



An assignment of part of a trader's effects is, in many instances, 



perfectly good and valid ; but if he assign the whole with only some 



ARTS ASD SCI. DIV. VOL. I. 



colourable exception, it is an act of bankruptcy ; and, in general, if he 

 assign over so considerable a proportion of his stock-in-trade and 

 effects as must disable him from carrying on his trade, it is an 

 act of bankruptcy ; and if the assignment be made voluntarily, that is 

 without the pressure of the creditor, and with a view to prefer a par- 

 ;icular creditor, or creditors, it will, though not made in immediate 

 contemplation of bankruptcy, constitute in itself an act of bankruptcy ; 

 and, & fortiori, it will have that effect if made under such circum- 

 stances as show that the trader must, at the time of executing it, have 

 contemplated bankruptcy. A bond fide sale, even if under value, is 

 clearly not an act of bankruptcy. 



Or make any fraudulent gift, delivery, or transfer of any of his goods 

 or chattels. The transfer or delivery must in general, be voluntary, 

 and not brought about by terror of legal process, or even by the 

 importunity of a creditor ; and, in some cases, even the circum- 

 stance of the proposal to make the delivery coming from the creditor 

 and not from the bankrupt, has been held to negative the inference of 

 voluntariness, and to render the transaction valid. But whether of his 

 voluntary motion, or under pressure of a creditor, if a trader transfer 

 over, otherwise than by bona fide sale, the whole of his effects, or such 

 a portion of them as must necessarily lead to insolvency and the 

 stoppage of his trade, it now constitutes an act of bankruptcy. 



The acts of bankruptcy above enumerated depend upon the trader's 

 presumable intention in doing the act. The following are the acts 

 which constitute acts of bankruptcy, whether done with or without 

 an intention to delay or defraud creditors. 



Lying in prison or escaping out of prison. By the 69th section of the 

 Bankrupt Law Consolidation Act, 1849, "if any such trader, having 

 been arrested or committed to prison for debt, or on any attachment 

 for non-payment of money, shall upon such or any other arrest or 

 commitment for debt, or non-payment of money, or upon any deten- 

 tion for debt, lie in prison for twenty-one days, or having been 

 arrested or committed to prison for any other cause, shall lie in 

 prison for twenty-one days after any detainer for debt lodged against 

 him and not discharged, every such trader shall thereby be deemed 

 to have committed an act of bankruptcy ; or if any such trader 

 having been arrested, committed, or detained for debt, shall escape 

 out of prison or custody, every such trader shall be deemed to have 

 thereby committed an act of bankruptcy from the time of such arrest, 

 commitment, or detention." 



The bankrupt law does not now, and never did, make the mere 

 circumstance of being arrested an act of bankruptcy. The most sub- 

 stantial trader is liable, under unforeseen emergencies, to be arrested ; 

 the presumptiop of insolvency arises from the fact of lying in prison 

 twenty-one days without being able to satisfy the debt, or of escaping 

 out of prison to avoid its payment. 



Fifing a declaration of insolvency. Under the old law no effectual 

 provision was made for enabling an honest debtor, who believed 

 himself insolvent, voluntarily to subject himself to the bankrupt law, 

 and thereby to produce an equal distribution of his property among 

 his creditors. It is now provided that if a trader file, in the court 

 within the district whereof he shall have resided or carried on business 

 for the preceding six months, a declaration of hia insolvency, signed 

 by himself, and attested by an attorney, such trader shall be deemed 

 thereby to have committed an act of bankruptcy at the time of filing 

 such declaration, provided a petition for adjudication of bankruptcy 

 shall be filed by or against such trader within three months from the 

 filing of such declaration. 



Compounding uith petitioning creditor. By the 71st section of the 

 Bankrupt Law Consolidation Act, 1849, it is provided that if any 

 trader, after the filing of any petition for adjudication against him, 

 shall pay money to the petitioning creditor, or give or deliver to such 

 petitioning creditor any satisfaction or security for his debt, or for any 

 part thereof, whereby such petitioning creditor may receive more hi 

 the pound in respect of his debt than the other creditors, such pay- 

 ment, gift, delivery, satisfaction or security shall be an act of bank- 

 ruptcy ; and if adjudication of bankruptcy shall have been made under 

 such petition, the court may either declare such adjudication to be 

 valid, and direct the same to be proceeded in, or may order it to be 

 annulled, and a petition or new petition for adjudication may be filed, 

 and such petition or new petition may be supported either by proof of 

 such last-mentioned, or any other act of bankruptcy. 



Trader not paying, securing, or compounding for a judgment debt 

 within seven days after notice requiring payment. By the Bankrupt Law 

 Consolidation Act, 1849, s. 72, it is provided that if a trader, against 

 whom a judgment has been recovered in an action personal for the 

 recovery of a debt or money demand, shall, after seven days notice in 

 writing, personally served upon him, requiring immediate payment of 

 such judgment debt, fail to pay, secure, or compound for the same, he 

 shall be deemed to have committed an act of bankruptcy upon the 

 eighth day after service of such notice. To give or proceed upon such 

 a notice the judgment creditor must be iu a condition to issue exe- 

 cution upon his judgment. 



Trader disobeying order of Cour! of Equity, <<. By the Bankrupt 

 Law Consolidation Act, 1849, sec. 73, it is provided that if a trader 

 disobey any decree or order for the payment of money made by a 

 court of equity, or in any matter of bankruptcy or lunacy, and duly 

 served upon him, the court by which such decree or order was made may, 



3K 



