210 



BANKRUPT C Y. 



for himself, or as agent or factor for others, seeks his 

 living by buying and selling, or by the workmanship 

 of goods or commodities." All persons capable of 

 entering into trade, are liable to sequestration ; peers 

 and others having privilege of parliament ; unmarried 

 women and widows coming under the description, 

 and also married women who carry on trade or mer- 

 chandise independent of their husbands. Trading 

 companies may also be sequestrated. The statute 

 makes the following exceptions: holders of India stock, 

 or stock in any of the banks established by public 

 authority, or in the Friendly Insurance Company, 

 the Forth and Clyde navigation, or other inland na- 

 vigations, or the British fisheries, common labourers 

 or workmen for hire, landholders and tenants of land, 

 or husbandmen, if such persons be not otherwise 

 bonajidc under the foregoing description. A grazier, 

 though he also be a tenant, may be sequestrated, if 

 he deals in cattle not the produce of, nor grazed upon, 

 his own farm. A foreigner who has traded to Scot- 

 land, or a Scotsman domiciled abroad, cannot be se- 

 questrated although found in Scotland. 



Such are the persons liable to sequestration. It 

 is next to be considered, from what acts bankruptcy 

 is inferred, so as to authorise this process. AVhere 

 the debtor himself concurs, no proof of bankruptcy 

 is necessary. Where he does not concur, the credi- 

 tor must shew that certain steps of diligence have 

 been taken against him. These are, That the debt- 

 or shall be under diligence by horning and caption 

 for debt, and shall either, in virtue thereof, be im- 

 prisoned, or retire to a sanctuary, or fly or abscond 

 for his personal safety, or defend his person by force ; 

 or being out of Scotland, and not liable to be im- 

 prisoned, by reason of privilege or personal protec- 

 tion, shall be under diligence by charge of horning, 

 attended with arrestment not loosed, or poinding of 

 any part of his moveables, or decree of adjudication 

 of any part of his estate, for payment or security of 

 debt, at the instance of any creditor. 



When a person comes under the description of the 

 statute, and has been rendered bankrupt by the use 

 of any of the diligence just mentioned, any one cre- 

 ditor, to the amount of 100, or two creditors to 

 the amount of 150, or three or more to the amount 

 of 200, either with or without the concurrence of 

 the bankrupt, may apply by summary petition to the 

 court of session for a sequestration. Where the 

 bankrupt concurs, sequestration is immediately award- 

 ed ; where he does not concur, a warrant is granted 

 for serving the petition upon him, and if he does not 

 appear, and shew cause to the contrary, sequestration 

 is awarded against him. The court at the same time 

 appoints the creditors to meet and choose an interim 

 factor for managing the estate, and also appoints a 

 subsequent meeting for choosing a trustee. When- 

 the factor is chosen, he has power to take possession 

 of the whole estate, books, and vouchers of the bank- 

 rupt, who is bound to grant powers of attorney, for 

 recovering any effects he may have abroad. At the 

 next meeting ordered by the court, which must be 

 within six weeks, and not less than four of the first 

 deliverance on the petition for sequestration, the cre- 

 ditors who have produced their grounds of debt, and 

 affidavits to the verity, proceed to elect a trustee, to 



whom the estate may be assigned for the 

 hoof. This trustee is to be chosen by a majority of 

 the creditors in number and value. Two trustees 

 may be chosen to act, the one failing the other, but 

 one only can act at the same time. At this meeti: 

 the bankrupt must exhibit a state of his affairs, and 

 the interim factor must also produce an account of 

 his management. 



The trustee must find security to the creditors for 

 his faithful management ; after which the Court of 

 Session, upon application, will confirm 'his nomina- 

 tion, and he is then authorised to take possession of 

 and uplift the estate of the bankrupt, and to exoner 

 the interim factor. The court at the same time ap- 

 points the bankrupt to grant a regular conveyance of 

 his whole estate to the trustee under the pain of frau- 

 dulent bankruptcy, and failing his doing so, the 

 court may commit him to prison. Whether such 

 conveyance be granted or not, the whole estate 

 adjudged by the court to be vested in the trustee for 

 behoof of the creditors. 



The trustee must, within eight days of his ap- 

 pointment, apply to the sheriff to fix two days U 

 the examination of the bankrupt, upon all matters 

 relating to his affairs. The bankrupt's wife and 

 others of his family, and any other person connected 

 with his affairs, may also be examined. At the last 

 of these examinations, the bankrupt must take an 

 oath that he has exhibited a full state of his affairs ; 

 and failing his doing so, he shall be guilty of the 

 crime of fraudulent bankruptcy, and punished ac- 

 cordingly, and rendered infamous. The trustee may 

 apply to the court to grant protections to the 

 bankrupt from diligence to enable him to attend exa- 

 minations, and to assist in recovering his estate ; and 

 while so employed, the creditors may give him an al- 

 lowance for his support not exceeding two guineas a 

 week. 



A general meeting of the creditors is to be held 

 the first lawful day after the last examination of the 

 bankrupt, for the purpose of instructing the trustee 

 as to the management of the estate. At this meet- 

 ing three commissioners are to be chosen to audite 

 the accounts of the trustee, to fix the commission to 

 which he shall be intitled, and to advise and concur 

 with him in compromises and submissions as to the 

 bankrupt's estate. 



It is the duty of the trustee to recover and con- 

 vert into cash, as soon as possible, the estate of the 

 bankrupt, which shall be a fund of division among 

 those who were creditors prior to the sequestration. 

 All preferences or conveyances in security of prior 

 debts, which have been granted by the bankrupt to 

 prior creditors within sixty days of the application 

 for sequestration, are presumed to have been fraudu- 

 lent, and are liable to be reduced ; and all arrest- 

 ments and poindings used by individual creditors, 

 within the same period, are void, and give no prefer- 

 ence, except that the bonajidc arrester or poinder is 

 entitled to retain his expenses of diligence, and ten 

 per cent, more on the price or appraised value. All 

 bona fide transactions with the bankrupt in the buy- 

 ing and selling of goods, and paying or receiving of 

 money, previous to the sequestration, are safe from 

 challenge. 



