Page images

Act of 1882, to the following cases, i.e. : (1) If the grantor makes default in payment of the debt secured or interest, or in performance of any agreement contained in the bill necessary for maintaining the security ; (2) If the grantor becomes bankrupt or suffers the goods to be distrained upon for rent, rates, or taxes ; (3) If the grantor fraudulently removes the goods from the premises ; (4) If the grantor does not, without reasonable excuse, produce to the grantee on demand in writing, his last receipts for rent, rates and taxes; and (5) If execution is levied against the goods of the grantor under any judgment. By sect. 13 of the Act of 1882, it is further provided that after seizure the goods shall not be sold or removed for five days, during which period the grantor may, if the cause for seizure no longer exists, apply to the court, under sect. 7, to restrain a sale or removal (9).

Other points under the Acts.—The registration of a bill of sale must, by sect. 11 of the Act of 1878, be renewed every five years. The Court can, in a proper case, rectify the register and extend the time for registration or renewal (sect. 14 of the Act of 1878). When a bill is satisfied, the registrar may order a memorandum of satisfaction to be entered on the filed copy. Finally, it may be observed that the due registration of bills of sale by way of security, does not prevent chattels comprised in them from falling within the order and disposition" clause of the Bankruptcy Act, 1883 (sect. +3), in case of the grantor's bankruptcy (r). Te ticini

j (9) Generally as to the grantor's (r) Act of 1882, S. 15 ; Re rights, see Johnson v. Diprose, Ginger, [1897] 2 Q. B. 461. [1893] 1 Q. B. 512.



The property of a bankrupt is, by the statute law, divested out of him and vested in the bankruptcy trustee, for distribution by the latter among the general creditors of the bankrupt. The title of the trustee and (through him) of the creditors of the bankrupt, is consequently by bankruptcy ; and it extends not merely to the personal estate, but also to the real estate, of the debtor.

The foundation of the law of bankruptcy in this country is the statute 34 & 35 Hen. VIII. (1542) c. t, which described bankrupts as those " who obtain other men's goods and then suddenly flee to parts unknown, or keep their houses and there consume their substance, without paying their debts." And the Act (as subsequently amended by the 13 Eliz. (1571) c. 7) provided that, upon complaint in writing to the Lord Chancellor, not only the property but also the person of the debtor, should be made available for the payment of all his creditors rateably, according to their debts. In both these Acts (as will have been observed) the bankrupt was, in a sense, regarded as a criminal, and he met with no favour at the hands of the legislature. At length, however, it came to be considered harsh to strip

man of all his resources, and at the same time not to relieve him from his difficulties ; and it was accordingly provided, by the 4 & 5 Anne (1705), c. 4, in imitation probably of the Roman law of cession (à), that a bankrupt trader, who had been compelled to surrender the whole of his effects, and had in all matters conformed to the law of


(14) 2 Bl. Com., p. 473, citing Cod. 7, 71; Inst. 4, 6, 40.


bankruptcy, should be entitled to his discharge from all further liability for his debts theretofore contracted.

By divers subsequent statutes, further provisions were enacted,—applicable some of them to traders, and others of them to non-traders, for bringing debtors within the law relating to bankrupts; and further, any debtor (whether a trader or not), was enabled, under these later statutes, to institute voluntary proceedings against himself, with the view of becoming a bankrupt, and so of obtaining a discharge from his debts and liabilities. The administration of the law of bankruptcy (which had originally been entrusted to commissioners appointed by the Lord Chancellor, and acting for each case separately) came at length to be assigned, for all bankruptcies arising within the metropolitan area, to a particular court called the “ Court of Bankruptcy"; and, for all bankruptcies arising outside of that area, to district bankruptcy courts, which latter courts are now represented by such of the county courts as have jurisdiction in bankruptcy.

The statutes of Henry, Elizabeth, and Anne above referred to, and some subsequent Acts on the same subject, were repealed by the 6 Geo. IV. (1825) c. 16, whereby a new system was then established for bankruptcy administrations. But this new system, after continuing in force for a considerable time, was itself afterwards abandoned ; and in the course of the reign of Victoria, successive attempts were made to provide a satisfactory system for the administration of bankrupt estates (b). The existing system is that which has been provided by the Bankruptcy Act, 1883 (C), the Bankruptcy (Discharge and Closure) Act, 1887 (d), and the Bankruptcy Act, 1890 (e), and the

(6) 12 & 13 Vict. c. 106 (The Bankruptcy Act, 1849); 24 & 25 Vict. c. 134 (The Bankruptcy Act, 1861); and 32 & 33 Vict. c. 71 (The Bankruptcy Act, 1869).

(c) 46 & 47 Vict. c. 52; General

Rules, 1886 and 1890 ; Scale of
Fees and Percentages, October,
1886 ; and Order as to Stamps,
October, 1886.

(d) 50 & 51 Vict. c. 66.
(e) 53 & 54 Vict. c. 71.

rules made thereunder; which system is, in all its branches, subject to the control of the Board of Trade, an entirely new feature in our bankruptcy law. The tribunals having jurisdiction in bankruptcy are now the High Court of Justice, to which the jurisdiction of the London Court of Bankruptcy was transferred by the Act of 1883, and such of the county courts as are not excluded from bankruptcy jurisdiction by order of the Lord Chancellor (f).

In proceeding to consider the existing law of bankruptcy, we shall first of all inquire, who is capable of being made (or of becoming) bankrupt ; secondly, under what circumstances and in what manner he is al juicated bankrupt; thirdly, the proceedings in the bankruptcy generally, subsequently to adjulication, or subsequently to the receiving order (which in general precedes the adjudication) ; fourthly, the effect of the bankruptcy on his estate ; and fifthly, the bankrupt's discharge ; and we shall conclude by giving some account of the compositions or schemes of arrangement which debtors not infrequently enter into, and which, although they formed no part originally of the law of bankruptcy, are now become closely connected with it. And here let us premise this one observation, namely, that upon every court having jurisdiction in bankruptcy as now established, there has been conferred a general power of deciding all questions of priorities, and all questions whatsoever, whether of law or of fact, which may arise in any case of bankruptcy, and which it may be deemed by that court necessary or expedient to decide for the purpose of doing complete justice, or of making a complete distribution of the property of the bankrupt ; and in the execution of its powers, a court having jurisdiction in bankruptcy under the Act, is not liable to be restrained by the order of any other court (9).

(1) Act of 1883, ss. 92, 93. (g) Ibid.,

8. 102, re-enacting a similar provision in the Act of 1869, s. 72; Er parte Dickin,

In re Pollard (1878), 8 Ch. D. 377 ; and In re Lowenthal (1884), 13 Q. B. D. 238.

I. Who is capable of being made a bankrupt.—This is a predicament which has always been, and still is, applicable to none but debtors ; and the term “ debtor " has the same sense in bankruptcy as under the general law, and imports a party bound (at law or in equity) to pay another a certain and liquidated sum of money. But we must bear in mind, of course, that although a judgment debtor is a "debtor,” not every judgment or order of the court for the payment of money makes a man a “ debtor(h).

Under the older bankruptcy laws, traders alone could be brought within the jurisdiction ; and this distinction gave rise to many disputes as to what constituted a person a trader for the purposes of the statutes. But, with the single exception to be hereafter noticed, the distinction between traders and non-traders has ceased to apply, all persons, generally speaking, being now liable to be made bankrupt. This exception is the case of the married woman, who, though not, as a rule, within the scope of the bankrupt laws, may, by the Married Women's Property Act, 1882, if she carries on trade separately from her husband, be made bankrupt in respect of her separate estate (') ; but the bankruptcy could not be based upon non-compliance with a bankruptcy notice (k). An infant cannot, in the ordinary way, even though engaged in trade, be made bankrupt, inasmuch as he cannot bind himself by ordinary contract (1). Whether he could be made bankrupt in respect of debts for necessaries, or for liabilities in torts, seems never to have been decided. Persons who (as being either peers or members of Parliament) used to have certain privileges or protection from

[merged small][merged small][merged small][ocr errors]

(h) In

re Sacker, Ex parte Sacker (1888), 22 Q. B. D. 179, explaining Ex parte Harris (1876), 2 Ch. D. 423; 53 & 54 Vict. c. 71, s. 1.

(i) 45 & 46 Vict. c. 75 ; Act of 1883, s. 152; and see In re Gardiner (1887), 20 Q. B. D.

249 ; In re Lymes, [1893] 2 Q. B. 113.

(k) In re Frances Handford & Co., [1899] 1 Q. B. 566.

(1) Ex parte Jones, In re Jones (1881), 18 Ch. D. 109, overruling Er parte Lynch (1876), 2 Ch. D. 227.

« EelmineJätka »