have the means of paying, the amount of the debt is immaterial (Lewis' Case, 1873, 42 L. J. Ch. 379). A debtor may be committed if he had the means of paying part of the debt, though not the whole (Re Fryer, Ex parte Fryer, 1886, 3 Morr. 231). The Court cannot, in ordering payment by instalments, make a prospective order for commitment: but once default has been made, the order of commitment may be made, and suspended if the instalments are duly paid.

The power of commitment is a responsible one, and it is only intrusted, in the case of the County Courts, or any Courts other than the superior Court, to the judge or his deputy. It must be exercised in open Court. It is a remarkable commentary on the popular idea that imprisonment for debt is abolished that in the year 1903, 17,598 persons were incarcerated in English prisons for debt on civil process; in 1905, the number was 19,830.

A married woman cannot be committed under sec. 5 of the Debtors Act for non-payment of a judgment debt payable out of her separate estate, because the ordinary form of judgment against her does not make her personally liable, but only operates against her property (In re Morley, 1887, 20 Q. B. D. 120).

CRIMINAL PROCEEDINGS.-The Debtors Act having meted out six weeks for defaulting judgment debtors, goes on to provide-in more stringent terms for the punishment of fraudulent debtors (s. 11):-If, for instance, the bankrupt does not, to the best of his knowledge, (1) discover all his property. In such a case the onus of proving no intent to defraud is on the prisoner (R. v. Thomas, 1870, 22 L. T. 138; R. v. Bolus, 1870, 23 L. T. 339; and see R. v. Michell, 1880, 43 L. T. 572); (2) if he does not deliver up to the trustee all his property which is in his custody or under his control, as well as all books, documents, or papers (3) relating to such property; if (4) he conceals any part of his property to the value of £10 or upwards, or any debt, or (5) fraudulently removes any part of his property (see R. v. Humphris, [1904] 2 K. B. 89; R. v. Wiseman, 9 Mans. 12), or (6) makes a material omission in any statement relating to his affairs, or (7) allows a false debt to be proved, or (8) prevents the production of any book, document, or paper relating to his property or affairs, or (9) conceals, destroys, mutilates, or falsifies any book or document affecting or relating to his property or affairs, or is privy to such concealment, etc. (see Re Solomons, [1904] 1 K. B. 106), or (10) makes, or is privy to making, any false entry in any book or document, affecting or relating to his property or affairs, or (11) fraudulently parts with any such document, or alters it or makes an omission in it, or (12) attempts to account for any of his property by fictitious losses or expenses, or (13) within four months of the commencement of bankruptcy obtains any property on credit by false representations or other fraud, or (14) obtains any property on credit, under false pretence of carrying on business, or (15) pawns, pledges, or disposes of, otherwise than in the ordinary way of his trade, any property which he has obtained on credit, or (16) is guilty of any false representation or other fraud, for the purpose of obtaining the consent of his creditors or any of them, to any agreement with reference to his affairs or his bankruptcy (see Re Dunn, Ex parte the Official Receiver, 1902, 9 Mans. 1) -for any of the above offences, a bankrupt is liable to imprisonment for any term not exceeding two years, with or without hard labour (D. A. s. 11). It makes no difference now, in these cases or the case of abscond

ing (see infra), whether the bankruptcy is on a petition by a creditor or by the debtor, or is based on a receiving order in lieu of committal, under sec. 103 (5) of the Bankruptcy Act (B. A. s. 163 (1) (2)).

A bankrupt's absconding from England, or trying to abscond, with property to the amount of £20, which ought to go to his creditors, is felony, punishable with imprisonment for two years, with or without hard labour (s. 12). It is likewise a misdemeanor-one year, with or without labour-if a person, in incurring any debt or liability, has obtained credit under false pretences, or by any fraud, or has, with intent to defeat or delay his creditors, or any of them, made any gift, delivery, or transfer of, or any charge on, his property (s. 13). (See R. v. Hopkins, 1897, 4 Mans. 134.)

An undischarged bankrupt, obtaining credit to the extent of £20 or upwards from any person, without informing such person that he is an undischarged bankrupt, is guilty of misfeasance under the Debtors Act, 1869 (B. A. s. 31). It is sufficient under this section to constitute the offence, that credit was obtained, though there was no agreement to give it (R. v. Peters, 1886, 16 Q. B. D. 636). Keeping goods to the value of £20 is within the section, though the order for goods was less (R. v. Juby, 1887, 55 L. T. 788). The maximum penalty is one year (R. v. Turner, [1904] 1 K. B. 181). The Court may commit a bankrupt for trial for any misdemeanor under the bankruptcy law, and has, for this purpose, all the powers of a stipendiary magistrate (B. A. s. 165); and it is no bar that the bankrupt has got his discharge (B. A. s. 167). Where the Court has ordered a prosecution for any offence under the Debtors Act, 1869, or for any offence arising out of any bankruptcy proceedings, it is the duty of the Director of Public Prosecutions to institute and carry on the prosecution (B. A. s. 166). The form of indictment need only set forth the substance of the offence charged, specifying the offence, as nearly as possible, in the words of the Act (D. A., 1869, s. 19). A bankrupt is not protected from being convicted for fraud, under secs. 75 to 84 of the Larceny Act, 1862 (fraud by agents, bankers, or factors), because he has first disclosed the offence in any compulsory examination or deposition before any Court, on the hearing of any matters in bankruptcy or insolvency (B. A., 1890, s. 27), but such statement or admission is not admissible in evidence under sec. 85 of the Larceny Act in proceedings against him.

The number of offences for which bankrupts were convicted on trial in 1904 under the Debtors Act, secs. 11, 12, and 13, was 130; the most common being that of an undischarged bankrupt obtaining credit to the extent of £20, and not making full discovery of his property.

WORKING OF THE PRESENT SYSTEM.-How, then, has the system inaugurated by the Act of 1883 worked? Is it come to stay, or will it, like so many others that have gone before it, have its day and cease to be? So far as the future may be judged by the past, the bankruptcy system embodied in the Acts of 1883 and 1890 is the most efficient, the most economical, and the most just which this country has yet seen, and as such there seems every prospect that it will establish itself firmly. It represents a via media-consulting, that is, the wishes and the interests of creditors, with just enough official control to prevent those abuses which spring up so easily from the supineness or self-seeking of creditors, the dishonesty of debtors, and the temptations of trustees. It discriminates-which no previous system has done-between insolvency brought

on by misconduct and insolvency due to misfortune; and by steadily discountenancing the one and dealing leniently with the other, it has done much to maintain a high standard of commercial morality. There has of late years been much protest-especially on the part of solicitorsagainst the growth of officialism. Officialism, however, it must be remembered, is only a phase of State socialism, and whether we like it or not, State socialism is more and more revealing itself as a marked tendency of our social evolution. As a principle in bankruptcy administration, an official machinery is indispensable to the effective working of the disciplinary jurisdiction of our system, while the hardships which it inflicts on solicitors and accountants may easily be exaggerated. Half the insolvent estates are administered outside bankruptcy altogether, and if in those which are administered in bankruptcy a non-official trustee is appointed in only a small minority of cases-one in seven-this is very much due to the fact that the estates are not In 660 cases in 1904, worth an accountant's while to undertake. solicitors were employed by official receivers, and the costs of the proceedings aggregated £8462. Two points in the system more vulnerable than officialism are (1) the multiplication of undischarged bankrupts, as to which see p. 55; and (2) the number of insolvent estates which are liquidated outside the Bankruptcy Court altogether. The total number of insolvencies-the commercial wreckage-for instance, in 1904, was 8631. Of these, 4546-nearly half-were administered in bankruptcy, 4085 under deeds of arrangement. The explanation of this is to be found in two causes: First, the antipathy naturally felt by traders to the publicity of bankruptcy-credit once tarnished in that Court seldom recovers its original brightness; and, secondly, to the unpopularity of officialism with solicitors, who find a private arrangement far more acceptable than bankruptcy to themselves as well as to their clients. To legislate against arrangements which thus commend themselves to the trading community-to prohibit a debtor settling privately with his creditors, if he can-would only be justified by proof that private deeds of arrangement are extensively used to commit frauds on creditors, either from the apathy of creditors or the want of official control over the trustees; and no such evidence is forthcoming. The Inspector-General in Bankruptcy admits that the trusts of such deeds are, in the majority of cases, "honestly and efficiently carried out." They usefully supplement our bankruptcy system; and an effectual guarantee for the bona fides of the trustees of such deeds is now provided by sec. 25 of the Bankruptcy Act, 1890, which empowers the Board of Trade to require from them a full account of their receipts and expenditure. But the fact remains that the assets under these deeds of arrangement are administered without any of the safeguards which bankruptcy affords in the public examination, and in the censorship exercised by the Court over a bankrupt's discharge, and looking at the possibilities of abuse which they afford, the legislature may very well think it necessary to subject them to stricter supervision.

In judging any system of insolvent administration, this must always be remembered that insolvency, however admirably or adroitly the assets are administered, can never-from its nature-be quite satisfactory; not to the debtor certainly, nor to the creditors, nor to the State. All that can be done or hoped for in the most ideal system is (i.) to administer the assets expeditiously and economically; and

(ii) to

VOL. II.

severely discourage all irregular, reckless, or fraudulent trading. It can fairly be claimed for the system now in operation that it does both these things.

The British Empire.-In most parts of the British Empire, English Bankruptcy Law has served largely as a model. This is particularly the case in Australasia: Victoria (Acts Nos. 1102 of 1890 and 1513 of 1897), South Australia (No. 385 of 1886), Western Australia (Nos. 32 of 1892 and 15 of 1898), and New Zealand (No. 24 of 1892). In Queensland (No. 5 of 1874), Tasmania (Nos. 32 of 1870 and 12 of 1899), and New South Wales (No. 25 of 1898), the system resembles rather that under the English Act of 1869, but in New South Wales minorities are better protected.

In Canada, the subject is one of exclusive Dominion legislation under the British North America Act, 1867, s. 21, but there is no Dominion Act. The Provisional Acts deal in patch-work fashion with such subjects as priority among execution creditors, absconding debtors, the avoidance of fraudulent assignments et cession de biens.

In Cape Colony, English law is substantially followed (Nos. 38 of 1884 and 22 of 1887); so in Natal (No. 47 of 1887).

In the Transvaal, the Insolvency Law (No. 13 of 1895) provides for voluntary surrender and compulsory sequestration; and that of the Orange River Colony is similar.

In Gambia, Jamaica, Hong-Kong, Mauritius, Grenada, Trinidad and Tobago, British Guiana and the Straits Settlements, the English system substantially prevails.

An English bankrupt, it should be mentioned, is entitled to plead his discharge in England as a defence in a colonial Court. The reason of this is that by the express words of the English Bankruptcy Acts all the property of the bankrupt in the colonies, as well as in the United Kingdom, is vested in his trustee. His title must therefore receive recognition in the colonial Courts, and from this it has been held to follow that the bankrupt, being denuded of his property by the English law, is also entitled to plead the discharge given him by the same law (see per Lord Davey, New Zealand Loan Co. v. Morrison, 5 Mans. 171, P. C.).

United States.-The United States only obtained a national law of bankruptcy in 1898. In this system the acts of bankruptcy are-put shortly-five. They are: (i.) the debtor having removed any of his property to hinder or delay his creditors; (ii.) having transferred property while insolvent, with intent to prefer a creditor; (iii.) having suffered any creditor to obtain a preference; (iv.) having made a general assignment for the benefit of his creditors; (v.) having "admitted in writing his inability to pay his debts, and his willingness to be adjudicated bankrupt on that ground." What is remarkable is that these acts of bankruptcy do not include non-payment by a debtor of his debts, so that a debtor can only be adjudicated a bankrupt on the ground of indebtedness, with his own consent in writing.

Any person, other than a corporation, can file his petition in bankruptcy.

The United States Act avoids the quagmire of fraudulent preference caused by the use in the English Act of the words "with a view to prefer." It sensibly looks at results, not intention. Compositions are allowed if approved by the Court. The discharge is a weak point. It is

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granted without regard to dividends or the lack of them. The administration of bankruptcy is entrusted to the ordinary District Courts. France.-In France, bankruptcy falls into three classes: (1) Faillite; (2) Banqueroute simple; (3) Banqueroute frauduleuse. The firstFaillite, simple suspension of payment is not punishable, but it involves grave disabilities. The defaulting debtor has no political rights, cannot hold any public office, or sit on a jury, or act as a stockbroker. The other two are both punishable. The difference between them corresponds to the English classification of offences for the purposes of discharge. Extravagance, gambling, disorderly book-keeping will found Banqueroute simple: to found Banqueroute frauduleuse, there must, as the words imply, be fraud. It argues a high standard of commercial honour in France that a discharge in bankruptcy, even when accompanied by a declaration d'excusabilité, leaves the balance a debt of honour, non-payment of which prevents rehabilitation, and leaves the debtor, though released from legal liability, under the moral stigma of the disabilities above mentioned. Every trader who suspends payment must file a declaration of such suspension at the Tribunal of Commerce of his district. He must also render an account of his conduct and of the state of his affairs. Any creditor may institute proceedings by summoning the debtor before the Tribunal and proving the suspension of payment. The syndic in the French system is the equivalent of our official receiver. His possession of the debtor's property does not divest the debtor's title, but only deprives the debtor of the power of managing or selling the property.

Germany. The German Bankruptcy Act was passed in 1877. It embodies the same distinction as the French system between failure and bankruptcy simple or fraudulent; in other words, it discriminates, as our English Acts do, misfortune from misconduct. Offences such as extravagance in living, gambling, highly speculative business transactions, omission to keep proper accounts or the destruction of account-books, are visited with "simple bankruptcy;" acts of fraud (dolus) or gross dereliction of duties imposed by law are visited with "fraudulent" bankruptcy. Both are punishable: fraudulent bankruptcy by penal servitude, or, in case of mitigating circumstances, by imprisonment for not less than three months. Debtors who, with knowledge of their insolvency, have given a preference to a creditor, are liable to imprisonment not exceeding two years. Accessories in fraudulent bankruptcies are liable to penal servitude-a creditor, for instance, who conspires with the debtor to secure an advantage to the prejudice of the other creditors.

A trustee under the German system is appointed, and the estate liquidated with great promptitude, often by sale by auction.

Compositions must have the approval of the Court.

[Bibliography. Baldwin on Bankruptcy, 9th ed.; Robson on Bankruptcy, 7th ed.; Wace on Bankruptcy; Williams on Bankruptcy, 8th ed. For students: Ringwood on Bankruptcy, 9th ed.; Manson on Bankruptcy; Goiraud, French Commercial Law.]

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