BANKRUPT. 



BANKRUPT. 



870 



the bankrupt's estate and effects, to be by them held for the benefit of 

 the creditors at large. 



By the Act for the Abolition of Fines and Recoveries, 3 & 4 Wm. IV. 

 c. 74, the Court of Bankruptcy may dispose for a valuable considera- 

 tion of all lands of which the bankrupt is tenant in tail, and thereby 

 create as large an estate as the bankrupt himself might have done had 

 he not become bankrupt. The copyhold estate of the bankrupt does 

 not pass to the assignees by virtue of their mere appointment, but the 

 court is authorised to convey such property to any person who pxir- 

 chases it. The purchaser is to agree and compound with the lord of the 

 manor wherein it is situate for the fines and services, and the lord shall 

 at the next court grant the property to the vendee. Contingent 

 estates and interests in real property which belong to the bankrupt pass 

 to the assignees ; but the expectancy of an heir-at-law (or possibility, 

 as it is technically called) is not such an interest as vests in the assig- 

 nees. Offices of an inheritable nature, or such as are held for a term 

 of years, are in general saleable, and therefore pass to the assignees, 

 provided they do not concern the administration of public justice ; 

 and as an officer on half-pay cannot sell his half-pay, so on principles 

 of public policy, he cannot be called on to discover or surrender it in 

 case of his becoming a bankrupt. All the debts and choses in action 

 due to the bankrupt vest in his assignees, who have a right to sue upon 

 all beneficial contracts entered into with the bankrupt before his 

 bankruptcy, and also for all torts and injuries affecting his property ; 

 but not for mere personal wrongs, such as assaults, slanders, libels, and 

 the like. The right to bring a real action passes to the assignees, even 

 though the estate may be the bankrupt's in right of his wife. The 

 bankrupt's interest in a patent, and his right to publish a newspaper, 

 constitute property which vests in his assignees. As the right of the 

 bankrupt to sue at law on contracts passes to his assignees, so also does 

 his right of suing in equity to enforce their specific performance ; but 

 in order to protect vendors who have agreed to sell real property to a 

 trader who becomes bankrupt, the assignees are compelled (on being 

 required) to execute the agreement or to abandon it, or if they fail to 

 do so, the vendor may apply to the Court of Bankruptcy, and the court 

 will order the assignees to deliver up the agreement, or make such 

 other order as it shall think fit. The bankrupt's personal property 

 situated in a foreign country will pass to the assignees, unless the law 

 of the foreign country prevent it. With respect to leases, the assig- 

 nees are not bound to accept a leasehold interest belonging to the 

 bankrupt unless they think proper ; for in some cases such a property 

 is burdened with rent and covenant* beyond its value, and would prove 

 low to the creditors. Such property, therefore, remains vested in 

 the bankrupt till the assignees have done some act amounting to an 

 acceptance, such as taking possession of it, or intermeddling with it in 

 the capacity of owner ; but a mere experiment, by putting it up to 

 lale to ascertain it value, will not constitute an acceptance of it. If 

 the assignees accept the lease, they become liable to the landlord for the 

 rent and covenants, and the bankrupt is discharged from both from the 

 date of the filing of the petition for adjudication. If the assignees 

 decline the lease, the bankrupt is also discharged by the Bankrupt 

 Acts from the rent and covenants, provided he deliver up the lease to 

 the landlord within fourteen days from his having notice that the 

 assignees have declined it ; and if the assignees, on being required, fail 

 to elect whether they will accept or decline the lease, the landlord may 

 apply to the Court of Bankruptcy, and the court will order them so to 

 elect, and to deliver up the lease in case they decline it. Property 

 which the bankrupt holds as trustee for others does not pass to his 

 assignees, being in no way beneficial to his creditors. If the bankrupt 

 has stock standing in his name, the court may order it to be transferred 

 into the names of the assignees. Whatever beneficial interest the 

 bankrupt may have in property of his wife passes to his assignees ; but 

 property which she enjoys as a sole trader in the city of London, or 

 which is settled to her separate use, does not fall within the operation 

 of the bankruptcy. If the assignees are able to recover possession of 

 the wife's property in a court of law, equity will not interfere with 

 their legal title ; but if the property is of such a nature that they are 

 compelled to sue in a court of equity to recover it, that court will 

 require provision to be made for the wife out of the fund. All 

 property which might be redeemed by the bankrupt, may be redeemed 

 by his assignees for the benefit of the creditors. The assignees not 

 only take all the bankrupt's present property, but also property which 



* . i-.. __. i__ _ !_ _i_i i i_:_ im i . . T 4. 



where the bankrupt, a furniture broker, was engaged to remove goods, 

 and he employed, for that purpose, vans, packing-cases, and five or six 

 men, it was held that his demand for this employment passed to his 

 assignees, since it did not consist solely of a remuneration for his 

 personal labour. The right to nominate to a vacant ecclesiastical 

 bsnefice does not pass to the assignees. To the assignees also pertains 

 the duty of calling meetings, collecting debts, and acting generally for 

 the benefit of the estate under the orders of the court ; the official 

 assignee, until assignees are chosen by the creditors, having been, as we 

 have already seen, to all intents and purposes the sole assignee of the 

 oankrupt's estate and effects. 



5. The Examination and Certificate of the Bankrupt. At the second 

 of these sittings, at farthest, which must be on a day not less than 



thirty and not exceeding sixty days from the advertisement in the 

 ' Gazette ' (unless the time be enlarged by the court) , the bankrupt, 

 upon notice personally served upon him, or left at his usual place of 

 abode, must surrender himself personally to the commissioners; which 

 surrender (if voluntary) protects him from all arrest, unless he lias 

 been guilty of certain offences enumerated by the statute, which 

 involve a refusal of protection : and he must thenceforth in all respects 

 conform to the directions of the statutes of bankruptcy ; or, in default 

 of either surrender or conformity, shall be guilty of felony, and may be 

 transported for life, or imprisoned for seven years. When the bank- 

 nipt appears, the commissioner is to examine him touching all matters 

 relating to his trade and effects. He may also summon before him, 

 and examine, the bankrupt's wife, and any other person supposed to 

 have any of the bankrupt's property in his hands, or to be capable of 

 giving information touching his affairs. And in case any of them shall 

 refuse to answer, or shall not answer fully, to any lawful question, or 

 shall refuse to subscribe such their examination, the commissioner may 

 commit them to prison without bail till they submit themselves, and 

 make and sign a full answer ; the commissioner specifying in his warrant 

 of commitment the question so refused to be answered. And any 

 gaoler permitting such person to escape or go out of prison shall forfeit 

 500/. to the creditors. 



The bankrupt upon his examination, which may be adjourned from 

 time to time, or sine die, is bound upon pain of transportation for life 

 (formerly the penalty was death) to make a full discovery of all his 

 estate and effects, as well in expectancy as in possession, and how he has 

 disposed of the same, together with all books and writings relating 

 thereto : and is to deliver up all in his own power to the commissioners, 

 except the necessary apparel of himself, his wife, and his children ; 

 household furniture, tools, and such like necessaries, which, to the 

 amount in value of 20^., are to be allowed to him ; and in case he con- 

 ceals or embezzles any effects to the amount of 10/., or withholds any 

 books or writings, with intent to defraud his creditors, he shall be 

 guilty of felony, and be liable to transportation for life or not less than 

 seven years, or imprisonment for any term not exceeding seven years. 

 Under the rigorous enactment of the statute 21 Jac. I. c. 19, which 

 was not repealed until the year 1816, unless it appeared that his 

 inability to pay his debts arose from some casual loss, he might, upon 

 conviction by indictment of such misconduct and negligence, be set 

 upon the pillory for two hours, and have one of his ears nailed to the 

 same and cut off. 



After forty-two days from the filing of the petition have elapsed, 

 any person voluntarily discovering any part of the bankrupt's estate, 

 before unknown to the assignees, is entitled to five per cent, out of the 

 effects so discovered, and such farther reward as the assignees with the 

 consent of the court shall think proper. But any person wilfully con- 

 cealing the estate of the bankrupt, after the expiration of the twoand forty 

 days, shall forfeit 100A, and double the value of the estate concealed. 



Hitherto, everything is in favour of the creditors, and the law seems 

 to be pretty rigid and severe against the bankrupt ; but, in case he 

 proves honest, it makes him full amends for all this rigour and severity. 

 For, if the bankrupt has made an ingenuous discovery, and has con- 

 formed in all points to the directions of the law, the court proceeds to 

 appoint a public sitting for the allowance of the certificate of con- 

 formity. And unless there appears cause to the contrary, the court 

 certifies that the bankrupt has made a full discovery, and conformed in 

 all respects. This certificate may in certain cases be suspended for a 

 time, but if the bankrupt be proved to have destroyed or falsified his 

 books or entries, or to have been guilty of any manner of fraud in 

 contracting debts, or to have given a fraudulent preference to any of 

 his creditors, or concealed or made away with any of his property, or 

 given fictitious accounts of his losses and expenses, or put his creditors 

 to unnecessary expense by frivolous defences, or wilfully withheld the 

 production of any book relating to his dealings, or have wilfully omitted 

 to keep proper accounts of his trading, then the court may refuse or 

 suspend the certificate, or annex such conditions to it as the justice of 

 the case may require. And if the bankrupt is shown to have lost 201. 

 in one day by gaming, or 2001. within the year next preceding the 

 filing of the petition, or if within the same time he has lost 2001. by a 

 time bargain for the purchase or sale of stock, he is not entitled to a 

 certificate, or if he obtains one it is void. 



Three classes of certificates are given ; the first where the bankruptcy 

 is found to have arisen from unavoidable losses and misfortunes ; the 

 second when it has not wholly arisen from such causes ; and the third 

 when it has not arisen from such causes at all ; and this finding is in 

 every case specified in the certificate. Notice of the allowance of the 

 certificate, the time of suspension (if any), and the conditions of 

 allowance (if any), is given by advertisement in the ' London Gazette,' 

 ten days or more before the time allowed by the statute for appealing 

 against the granting of the certificate ; and if no appeal be lodged, the 

 Court at the expiration of the time, on production of the ' Gazette ' 

 containing the advertisement, delivers to the bankrupt the certificate 

 of conformity, unless the delivery of the certificate have been sus- 

 pended. When the certificate has been allowed, the bankrupt is 

 entitled to a decent and reasonable allowance out of his effects, for his 

 future support and maintenance, and to put him in a way of honest 

 industry. This allowance is Tendered proportionate to his former good 

 behaviour, in the early discovery of the decline of his affairs, tested by 



