or allow to be put to him. Any creditor who has tendered a proof, or his representative authorised in writing, e.g. his solicitor (R. v. Registrar of Greenwich, 1885, 2 Morr. 175), may question the debtor concerning his affairs and the causes of his failure (s. 17 (4)). The official receiver and the trustee-if one has been appointed-may also take part in the examination. A debtor cannot refuse to answer a question allowed by the Court because the answer may tend to criminate him (R. v. Scott, 1856, 25 L. J. M. C. 128; R. v. Robinson, 1867, L. R. 1 C. C. R. 80). In case of contempt by refusal to answer, a registrar has no jurisdiction to commit, but he may report the refusal to the judge to deal with (B. R. 88). Bribing a debtor to purchase his silence is a contempt of Court (Re Hooley, Rucker's Case, 1896, 3 Mans. 331). Such notes of the examination as the Court thinks proper are to be taken down in writing and read over.

A debtor's answers on his public examination are evidence against him in subsequent proceedings, civil and criminal (Re a Solicitor, 1890, 25 Q. B. D. 17, at p. 25); but sec. 27 of the Bankruptcy Act, 1890, expressly provides that a statement or admission made by a person in a compulsory examination or deposition before any Court, on the hearing of any matter in bankruptcy, is not to be admissible in evidence against that person in any proceeding in respect of any of the misdemeanors referred to in sec. 85 of the Larceny Act, 1861 (and see Larceny Act, 1901, enlarging offences). The statement of affairs is not an examination or deposition within sec. 27 (R. v. Pike, [1902] 1 K. B. 552). A debtor's answers, though-with these exceptionsevidence against himself, are not evidence against other persons. They cannot be used, for instance, to prove that a transaction was a fraudulent preference (New, Prance & Garrard's Trustee v. Hunting, 1897] 2 Q. B. 19; Re Brunner, 1887, 19 Q. B. D. 572). If the debtor's evidence is wanted for such a purpose, the party wanting it must call the debtor as a witness in the ordinary way (Re Cunningham, 1899, 6 Mans. 199; Re Osborne, Ex parte Lowell, Sol. J. 480).

FIRST MEETING OF CREDITORS.-The Court being then in possession, by its officer, the official receiver, of the debtor's assets, and the creditors apprised of the state of his affairs, the next step is to ascertain how the creditors desire those assets to be dealt with or administered, it being for them to decide whether a proposal for a composition or scheme of arrangement shall be entertained, or whether the debtor shall be adjudged bankrupt (B. A. s. 15). To determine this, the first thing to be done is therefore to call a meeting of creditors. Here, by the way, as elsewhere in the Act, we may note officialism waiting on the wishes of creditors. This first meeting of creditors is, under the Act, to be summoned for a day not later than fourteen days after the date of the receiving order, and it is the duty of the official receiver to summon it by giving not less than seven days' notice of the time and place of the meeting in the London Gazette and in a local paper (B. R. 250), and three days' notice to the debtor personally, or by letter (B. R. 249). The place of meeting is to be that which is most convenient for the majority of creditors (1st Sched. r. 4). The notice informs the creditor of this, and encloses forms of proof, and of general and special proxy, for use by the creditor. It also informs him when and where the public examination will be held, and encloses a summary of the debtor's statement of affairs (if lodged). It further notifies the creditor of the matters on which the

creditors may at the meeting decide, namely, that they may-(1) By ordinary resolution resolve that the debtor be adjudged bankrupt, and appoint a trustee; (2) That they may by ordinary resolution fix the remuneration of the trustee, or leave it to the committee of inspection; (3) That they may by ordinary resolution appoint a committee of inspection from amongst the creditors, or the holders of general proxies or general powers of attorney for the creditors. No person is entitled to vote as a creditor at the first, or indeed any other, meeting of creditors unless he has duly proved a debt provable in bankruptcy to be due to him from the debtor, and the proof has been duly lodged before the time appointed for the meeting (1st Sched. r. 8). This time is between twelve o'clock on the day but one before the meeting, and twelve o'clock on the next day (B. R. 222). In case of an adjourned meeting, a proof too late for the first meeting must be lodged twenty-four hours before the adjourned meeting (B. R. 222a). An unliquidated or contingent or unascertained debt will not qualify a creditor to vote (B. A., 1st Sched. r. 9; Re Dummelow, Ex parte Ruffle, 1873, L. R. 8 Ch. 997; Re Parrott, Ex parte Whittaker, 1891, 8 Morr. 49). If a creditor cannot ascertain exactly the amount due to him-if, for instance, the debt is one due on an open account-the creditor's proper course is to pledge his oath that a certain sum "and upwards" is due to him, and not attempt to estimate what he thinks will probably be due (In re Dummelow, Ex parte Ruffle, 1873, L. R. 8 Ch. 997; Ex parte Simpson, 1744, 1 Atk. 70; 26 E. R. 46). A secured creditor wishing to vote must surrender or value his security, and vote only in respect of the balance (1st Sched. r. 10); as to amendment of valuation, see Re King, Ex parte Mesham, 1885, 2 Morr. 129; Re Sir E. F. Piers, Ex parte C. P. Piers, 1899, 5 Mans. 97; Re Rowe, Ex parte West Coast Goldfields, 1904, 11 Mans. 272; and Re Safety Explosives, Limited, [1904] 1 Ch. 226; on the same principle, the holder of a bill of exchange or promissory note must, for the purpose of voting (not dividend), treat the liability of every person liable on the bill or note antecedently to the debtor as security, estimate the value of such security, and deduct it from his proof (1st Sched. r. 11). The bill or note must also itself be produced to the official receiver, chairman of the meeting, or to the trustee (B. R. 221). A mortgagee must similarly produce his mortgage deed, but he need not produce his title-deeds (In re Dunkley, 1882, 45 L. T. 560). The object of these provisions is, of course, plain, to secure that the persons really interested in the estate-the just creditors shall have the controlling voice in its administration. The chairman of the meetings is the official receiver, or some other person nominated by him (1st Sched. r. 7), and on him devolves the duty of admitting or rejecting proofs for the purpose of voting (1st Sched. r. 14). If in doubt, he should mark the proof as objected to, and allow the creditor to vote, subject to the vote being afterwards declared invalid. Creditors are permitted to vote either in person or by proxy (Sched. i. r. 15), and it is to facilitate their doing so that proxy forms are sent them with the notice of first meeting. Proxies under the Act of 1869 were one of the worst mischiefs of the then system. They had a market value, like parliamentary votes in the old days, and were freely canvassed for and bought by persons competing for the lucrative office of trustee. A proxy might even be worth more than a dividend. The present Acts have aimed at checking this abuse by allowing the creditor to give a general proxy only to his manager, clerk, or other person in his regular

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employment (Sched. i. r. 17); and by providing that, if solicitation has been used by or on behalf of a trustee or receiver in obtaining proxies, or in procuring the trusteeship or receivership, the Court may disallow the wrong-doer all remuneration (1 Sched. r. 20). A creditor may give a general or special proxy to the official receiver of the debtor's estate (1st Sched. r. 21). Proxies, to secure bona fides, must be filled up in the handwriting of the person giving the proxy. The debtor is, unless prevented by sickness or other sufficient cause, to attend the meeting, and to submit to such examination, and give such information as the meeting may require (B. A. s. 24 (b)).

COMPOSITION OR SCHEME OF ARRANGEMENT.-The first meeting of creditors being thus convened, the primary question submitted to the meeting is whether a composition or scheme of arrangement (if any) shall be entertained, or whether the debtor shall be adjudged bankrupt. In practice the normal course is a resolution for adjudication. The number of compositions or schemes of arrangement is quite insignificant -not one in a hundred. If a debtor intends to make a proposal for such a composition or scheme of arrangement of his affairs he is, within four days of submitting his statement of affairs, or within such time as the official receiver may fix, to lodge with the official receiver a proposal, signed by him, embodying the terms of the composition or scheme, and setting out particulars of any sureties or securities proposed (B. A., 1890, s. 3). The form of proposal for a composition is No. 81A (see p. 94), for a scheme of arrangement, No. 81Bв (see p. 95). The official receiver then summons a meeting of creditors, sending to each creditor, before the meeting, a copy of the debtor's proposal, with a report thereon; and if at such meetings a majority in number and three-fourths in value of all the creditors who have proved, resolve to accept the proposal, the same shall be deemed to be duly accepted by the creditors. Any creditor may, by letter to the official receiver, assent to or dissent from the proposal, and such assent or dissent is to have the same effect as if the creditor had been present and had voted at the meeting. Only half the debtor's task is accomplished, however, with the acceptance of the creditors. The Court has still to be persuaded. The application is made by the debtor or the official receiver; and notice of the application is to be given to the creditors, any of whom may oppose, though he has voted for the scheme. Then the Court is to hear a report of the official receiver as to the terms of the scheme and as to the conduct of the debtor; and if it is of opinion that the terms of the proposal are not reasonable, or are not calculated to benefit the general body of creditors, or in any case in which the Court is required, where the debtor is adjudged bankrupt, to refuse his discharge-that is to say, where the debtor has committed a misdemeanor under the Debtors Act, 1869, or the Bankruptcy Act, or any felony connected with his bankruptcy— the Court is to refuse to approve the proposal. It has no option. A scheme is not "calculated to benefit" the general body of creditors if it gives them no advantages which they would not have got if the bankruptcy proceedings had gone on (Re Aylmer, Ex parte Bischoffsheim, 1887, 4 Morr. 152; Re Dixon & Cardus, 1887, 5 Morr. 291; Re Hester, 1888, 6 Morr. 85). If any facts are proved involving "minor offences"-facts on which the Court would be required either to refuse or suspend the debtor's discharge, or attach conditions to it, were he adjudged bankrupt, -as where the debtor has omitted to keep books of account, continued

to trade knowing himself insolvent, brought on his bankruptcy by rash and hazardous speculations (In re Young, 1884, 2 Morr. 37; In re Salaman, 1884, 2 Morr. 61), given an undue preference or defended actions frivolously or vexatiously-the Court is to refuse its approval to his proposal, unless the proposal provides reasonable security for payment of not less than seven shillings and sixpence in the pound on all the unsecured debts provable against the debtor's estate (Re Genese, Ex parte Kearsley, 1885, 18 Q. B. D. 168; Re Bottomley, 1893, 10 Morr. 262; Re E. A. B., 1902, 9 Mans. 105; Re Beer, Ex parte Beer, 1904, 10 Mans. 136; Re Flew, Ex parte Flew, 1905, 12 Mans. 1); but the debtor paying seven shillings and sixpence does not oblige the Court to approve (In re Burr, [1892] 2 Q. B. 467). In exercising the discretion the interests of the creditors are the prevailing consideration, provided the arrangement would not amount to the compounding of an offence, so as to be contrary to commercial morality and public policy (Re Bottomley, 1893, 10 Morr. 262). No proposal is to be approved if it does not provide for payment in priority to other debts of all debts directed to be so paid in the distribution of the property of a bankrupt (B. A., 1890, s. 3 (18)). Approval is signified by the seal of the Court being attached to the instrument embodying the proposal. There are certain debts, however, from which the composition, like the discharge in bankruptcy, does not release the debtor-liability under a judgment against him for seduction, or under an affiliation order, or under a judgment against him as co-respondent in a matrimonial cause; nor does it release him from debts and liabilities from which a discharge in bankruptcy would not release him, ¿e. for fraud or fraudulent breach of trust (B. A. s. 19; Flint v. Barnard, 1889, 22 Q. B. D. 90). Costs of an action against a fraudulent trustee are not a debt or liability incurred by means of fraudulent breach of trust (In re Greer; Napper v. Fanshawe, 1894, 2 Mans. 350).

If a debtor has made a fraudulent or unjustifiable settlement, covenant, or contract, the Court may refuse its approval to the scheme (B. A. s. 29). These restrictions on the power of approval are designed in the interests of commercial morality. It has been repeatedly recognised by the Court of Appeal that it is not enough that a scheme is beneficial to creditors. The conduct of the debtor must be weighed; and the Court must assume a commercial censorship, balancing the two considerations-the claims of creditors and the claims of trading morality-as best it may (Ex parte Rogers, 1884, 13 Q. B. D. 438).

It often happens that a sanguine debtor enters into an arrangement or composition which he finds himself unable afterwards to carry out. He makes default in the payment of an instalment. In such a case, under the older Bankruptcy Acts of 1861 and 1869, the creditors were remitted to their original rights. They might bring actions for their debts. Now their only remedy is to get the debtor adjudicated a bankrupt. The same remedy is prescribed where the Court is satisfied that the composition or scheme cannot, in consequence of legal difficulties, or for any sufficient reason, proceed without injustice or undue delay to the creditors or to the debtor, or that the approval of the Court was obtained by fraud. A composition or scheme of arrangement can be entered into after adjudication as well as before (B. A. s. 23), but such a composition or scheme is extremely rare.

THE ORDER OF ADJUDICATION.-If the creditors resolve at their first

meeting that the debtor shall be adjudicated a bankrupt, or if they pass no resolution or do not meet, or if no composition or scheme is accepted and approved within fourteen days after the debtor's examination, in all these cases the normal result follows, and the Court, in the words of the Act, "shall adjudge" the debtor bankrupt. The words 'shall adjudge" do not, however, mean that the Court has not a discretion in the matter, or that the right of the petitioning creditor is one ex debito justitiæ (In re Pinfold, [1892] 1 Q. B. 73; In re Thurlow, [1895] 1 Q. B. 724). The Court can still, as James, L.J., said in In re M'Culloch, 1880, 14 Ch. D. 716, 723, refuse to make a man bankrupt if the petition is presented for an improper purpose, or if the Court is satisfied that no assets will be forthcoming (see p. 16). In certain circumstances, specified in B. R. 190-4, as, for example, where the debtor has absconded or a quorum does not attend the first meeting, the Court may forthwith adjudicate him a bankrupt; it may do so also if the debtor makes default in furnishing a statement of affairs or himself desires an adjudication (s. 16 (3)). An order of adjudication cannot be made against a firm in the firm's name. It must be made against the partners individually (B. R. 264). Adjudication consummates bankruptcy. Then, and not till then, the property of the bankrupt vests in the trustee, or in the official receiver acting as such, and becomes divisible among his creditors (B. A. s. 20). On adjudication in the High Court the senior bankruptcy registrar, and in the County Court the registrar, gives notice to the official receiver and to the Board of Trade (B. R. 282), who, as in the case of the receiving order, gazette the adjudication in the London Gazette (B. R. 280), and also advertise it in a local paper (B. A. s. 20 (2); B. R. 1932, Forms 31, 32, p. 75).

ANNULLING ADJUDICATION.-Where, in the opinion of the Court, a debtor ought not to have been adjudged bankrupt, or where it is proved to the satisfaction of the Court that the debts of the bankrupt are paid in full, the Court may, on the application of any person interested, annul the adjudication. Instances of adjudications which ought not to have been made are Ex parte Coates, 1897, 5 Ch. 979, and Re Helsby, 1893, 1 Mans. 12. Payment in full means a real payment. Debts are not paid in full because the creditors give discharges in full for a composition (Re Keet, Ex parte the Official Receiver, 1905, 12 Mans. 235; and see Re Gyll, 1888, 5 Morr. 272; Re Burnett, 1894, 1 Mans. 89, and Ex parte Dennis, [1895] 2 Q. B. 630). The Court may refuse to annul even though the statutory conditions are fulfilled, if the bankrupt's conduct makes it proper for the Court to do so (Re Taylor, Ex parte Taylor, 1901, 8 Mans. 230).

DISQUALIFICATIONS CREATED BY BANKRUPTCY.-The diminutio capitis which attended a cessio bonorum at Rome is reproduced in our law of disqualification. Insolvent legislators were at one time a grave scandal. That is all changed now. A debtor who is adjudged bankrupt is by the law of bankruptcy disqualified from sitting or voting in the House of Lords (this is new as to a peer) or the House of Commons. He is also disqualified from being appointed a justice of the peace; from holding the office of mayor, alderman, or councillor; or being elected to or holding the office of guardian of the poor, overseer of the poor, member of a sanitary authority, member of a school board, highway board, burial board, select vestry, or county council. This disqualification clause is a sweeping one, but it is the necessary penalty of impecuniosity. The