SUPPLEMENT. 



aoas 



BANKRUPTCY. 



BANKRUPTCY. 



1088 



BANKRUPTCY. Since the article BANKRUPTCY in the first volume 

 of this Cyclopaedia was written, the law relating to bankruptcy and 

 insolvency has undergone such extension and alteration by the legis- 

 lature during the last session of parliament (24 4 25 Viet., c. 134) that 

 a short review thereof is necessary. 



The Court of Bankruptcy will henceforth consist of the present 

 Commissioners in Bankruptcy, and to them is confided all needful 

 powers of the Superior Courts of Law and Equity and of the Court 

 for Relief of Insolvent Debtors. Thn county court judges are hence- 

 forth to exercise in the country all the powers of the present district 

 commissioners, and vacancies in the country district commissionerships 

 will not henceforth be filled up ; and the London commissioners are, 

 m vacancies occur, to be reduced to three. The Court for Relief of 

 Insolvent Debtors is abolished, and the jurisdiction of the County 

 Courts in insolvency is discontinued. The present Court of Appeal in 

 Chancery is preserved, and appeals lie to it from the County Courts in 

 bankruptcy as well as from the Court of Bankruptcy proper. 



Questions of fact may, under the directions of the Court of Appeal, 

 be tried in bankruptcy by juries, or issues may be sent to be tried at 

 law. Sworn shorthand writers may be appointed ; and these will cer- 

 tainly form a novel feature in our administration of justice. 



The principal feature of the recent act is that non-traders are 

 brought within the privileges and liabilities of bankruptcy, although 

 the distinction between a trader and a non-trader is still for some pur- 

 pOM8 preserved. This distinction will appear from the following 

 summary of the alterations introduced as to acts of bankruptcy. 



Acts of Bankruptcy by traders are continued as hitherto, subject to 

 such additions and alterations as are here noticed. Any person 

 whether a trader or non-trader, may be adjudged a bankrupt for lying 

 in prison for debt or after a detainer for debt, or in the case of a trader 

 for fourteen days, instead of twenty-one days as heretofore, and in the 

 case of a non-trader for two months, unless he is prepared with sufficient 

 security for the debts in respect of which he is so imprisoned or 

 detained ; or for escaping from prison where detained for debt, 



A Trader Debtor whose goods are seized and sold under judgment 

 for a debt or money demand exceeding 50/., is held to have committed 

 an act of bankruptcy at the time of the seizure; notwithstanding which 

 the sheriff may, unless a petition for adjudication intervene, proceed 

 to sell the goods seized ; but he must retain the proceeds for seven 

 days, after which period he may pay them over to the execution 

 creditor, who, however, has to pay them back, subject to deduction of 

 the costs of action and execution, to the assignees in bankruptcy if the 

 execution trader debtor is adjudicated a bankrupt within fourteen days 

 from the day of sale. A non-trader may be made bankrupt by depart- 

 ing or remaining out of this realm with intent to defeat or delay his 

 creditors, or by making some fraudulent gift or conveyance of any of 

 his property, or by filing in court a declaration of insolvency followed, 

 within two months, by a petition for adjudication of bankruptcy. 



Acts of Bankruptcy after Judgment Dthtor Summons. Every judg- 

 ment creditor for a debt of 501. or upwards, may sue out against his 

 debtor at the end of one week from the date of the judgment, if he be 

 a trader, or at the end of one calendar month if he be a non-tra<ler, a 

 judgment debtor summons requiring him to appear and be examined 

 touching his ability to pay the debt. In the same way disobedience to 

 a peremptory order in equity, in bankruptcy, or lunacy, directing pay- 

 ment of money on a day certain may be followed by a similar judgment 

 debtor summons after the expiration, in the case of a trader, of seven 

 days, or in the case of a non-trader of two calendar months, from the 

 Hay tiled for payment. Trader debtor summonses should be served 

 personally, except in the case of persons in custody when service may 

 Ije made on the sheriff, or other person in whose custody the debtor is. 

 Where personal service cannot be effected, and the debtor is keeping 

 i nit of the way, the summons may be advertised as directed by the act. 

 The procedure upon the return of the summons is particularly pro- 

 vided, and the court may, upon non-payment of the debt, and whether 

 the debtor appears or not, adjudge him a bankrupt without any 

 ltition for adjudication ; but a debtor thus adjudicated upon in his 

 absence may, within seven days from receiving notice of the adjudica- 

 tion, appear. and show cause against it. 



]',-,.,, 'lir'js tn obtain Adjudication. A debtor may himself petition 

 for adjudication without filing any previous declaration of insolvency ; 



but he must file a statement upon oath of his debts and liabilities, and 

 of the causes of his embarrassments. In the case of non-traders, in order 

 to support a petition for adjudication, or a judgment summons, the 

 debt must have accrued after the 6th day of August, 1861 (the date of 

 the passing of this act). Debtors in prison may petition in formd 

 pauperii, upon making affidavit of poverty. Jailers are to make 

 monthly returns of all their prisoners detained for debt ; and a registrar 

 of the court for the district is monthly to visit all jails within the 

 jurisdiction of his court, and to examine touching their estate and 

 dealings all such prisoners included in such return who have been in 

 custody fourteen days iu the case of traders, or two calendar months in 

 i the case of non-traders. Prisoners not submitting to such examination 

 may be committed to jail for a month, with hard labour, and also be 

 adjudicated bankrupts. But prisoners detained solely under County 

 Court or Small Debt warrants are not within these latter provisions, 

 nor are they entitled to petition in forma paiipcris. 



Procedure after Adjudication.- The official assignee must forthwith 

 take possession of the bankrupt's estate, and must hold it until the 

 appointment of a creditors' assignee. The first meeting of creditors 

 and the president thereof are to be appointed by the court ; and the 

 majority in number and value of the creditors may transfer the pro- 

 ceedings to any County Court out of the metropolitan district ; and a, 

 majority in value may then determine upon any allowance to be made 

 the bankrupt up to the time of his passing his last examination. The 

 proceedings in bankruptcy may be superseded, and an arrangement 

 for winding up and administering the estate out of bankruptcy may be 

 come to by due majorities of the creditors ; and the debtor may then, 

 upon making a full discovery, be entitled to an order of discharge. 

 Some important provisions are made as to sale of real estate belong- 

 ing to bankrupts, and particularly as to the settled real estate of 

 non-traders; but these are of too technical a nature for discussion 

 here. 



Creditors' Assignee. The majority in value of creditors who have 



proved may choose their assignee, in whom, upon confirmation and 



i certificate by the court, the estate and effects of the bankrupt are to be 



I exclusively vested ; and the official assignee is thereupon forthwith to 



render to such creditors' assignee a full account of the bankrupt's 



estate, and of all dealings therewith, which account is to be formally 



! audited and furnished to every creditor who has proved. The creditors' 



assignee may be required to give security ; and he may be removed by 



the court at the instance of the creditors, and a new assignee may be 



j chosen. The duties of the creditors' assignee are similar to those 



hitherto discharged by the official assignee ; but to the latter is still 



' entrusted the collection of all debts under 101. The creditors' assignee 



must, from three months to three months, account to the official 



assignee for his dealings with the estate ; and his accounts are to be 



printed and furnished to the creditors. 



Dealings irit/t the Estate. Assignees may occupy leasehold premises 

 of a bankrupt up to some day on which rent is payable not beyond six 

 months from the adjudication, and may then elect to decline any lease 

 or agreement for a lease under which the premises had been held. 

 Creditors' meetings may authorise the mortgage or pledge of the 

 bankrupt's estate. 



Proof of Debts. Creditors may prove their debts by forwarding 

 i through the General Post to the assignee a statement thereof, verified 

 by their own declaration of its truth. False proofs entail the punish- 

 ment of perjury. Landlords may prove for rent pro raid in respect 

 of current periods. Unliquidated damages may be ascertained by the 

 verdict of a jury before, or under the direction of, the court. Con- 

 tingent liabilities may be determined and valued by the court at the 

 instance of the person claiming the benefit of such liability. 



Orders of Discharge. The classification of certificates is abolished. 

 Where a bankrupt is charged with any misdemeanour under this act, 

 he may be tried by the court, or, if the bankrupt require it, by a jury 

 either in the Court of Bankruptcy, or, in the option of that court, in 

 any " of the ordinary courts of criminal justice." If the bankrupt 

 be convicted of such misdemeanour, his discharge may be refused, or 

 suspended, absolutely or conditionally. If he bo not convicted of any 

 such misdemeanour, his conduct is still to be inquired into by the 

 court, and his order of discharge may be granted, or refused, or sus- 

 pended, either absolutely or conditionally ; and the bankrupt may be 



