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be after his public examination is concluded, but not before (m); and, on the hearing of the application, the court may grant the bankrupt an absolute order of discharge, the effect of which will be to release him from all debts and liabilities whatever which are proveable under the bankruptcy, save only such as were incurred or forborne by means of fraud or fraudulent breach of_trust, or such as are due to the Crown, or incurred for some offence against the revenue laws, or as estreated bail for any person charged with such offence (n); or, under the Bankruptcy Act, 1890, s. 10, his liability on a judgment for seduction, or under an affiliation order, or upon a judgment against him as co-respondent in a divorce action, A bankrupt, duly discharged, is morever entitled (when the discharge is absolute and unconditional) to enjoy, free from the claims of his creditors (other than those before mentioned as continuing, and other than his new creditors), all future acquisitions of property; so that, in the language often applied to the case of a discharge under former statutes, “ he becomes a clear man again " (o), subject only to continuing to give to the trustee such assistance as may be require:1 for the realisation and distribution of his former property, failing which his discharge may be revoked (p).
In all which respects, the order of discharge appears to have the same effect as the so-called certificate of conformity which used to be granted to bankrupts under the earlier Bankruptcy Acts, or as the order of discharge (in the case of bankruptcy properly so called) and the certificate of discharge (in the case of liquidating debtors) formerly granted under the Bankruptcy Act, 1869 (9). But it is hardly necessary to observe, that the
(m) Sect. 28, rr. 178–182; Act of 1890, s. 8.
(11) Act of 1883, s. 30 ; Cooper v. Prichard (1883), 11 Q. B. D. 351. (0) Ebbs
Boulnois (1875), L. R. 10 Ch. App. 479; In re
Pettitt's Estate (1876), 1 Ch. D. 173.
(p) Act of 1890, S. 8, sub8. (8).
(9) Boustield v. Do (1884), 27 Ch. D. 687.
bankrupt's discharge does not free from liability any surety for, or co-surety or co-contractor with, the bankrupt, or any partner of the bankrupt ; though, on the other hand, the bankrupt cannot, by any promise of his, revive a debt from which he has been duly discharged, whether by order of discharge, or by certificate of discharge or of conformity (r). But the bankrupt is not, as a matter of course,
entitled to the absolute and unconditional order of discharge above referred to. For the court takes into consideration the report of the official receiver as to the bankrupt's conduct and affairs (including a report as to his conduct during the bankruptcy proceedings); and the court may refuse the absolute order of discharge, or suspend the operation of such an order for a specified time, or grant the order subject to any conditions with respect to any earnings or income which may afterwards become due to the bankrupt, or with respect to his after-acquired property ; and the court must refuse the order of discharge in all cases where the bankrupt has committed any misdemeanor of the class already specified (s). And further, the court must either refuse the order, or at least suspend the operation of it for a period of not less than two years or until a dividend of not less than 10s. in the pound has been paid to the creditors, or grant the order subject to such conditions as aforesaid, or require the bankrupt (as a condition of his discharge) to consent to judgment being entered up against him for any unsatisfied balance of the debts proveable, such judgment to be satisfied out of his future earnings and after-acquired property, ---- upon proof — (1) That the bankrupt has omitted to keep such books of account as are usual and proper in the business carried on by him, and as sufficiently disclose his business transactions and financial position within the three years immediately preceding his bankruptcy : or (2) That the bankrupt has continued to trade after knowing himself to be insolvent: or (3) That the bankrupt has contracted any debt proveable in the bankruptcy without having at the time of contracting it any reasonable or probable ground of expectation (proof whereof shall lie on him) of being able to pay it : or (4) That the bankrupt has brought on his bankruptcy by rash and hazardous speculations or unjustifiable extravagance in living : or (5) That the bankrupt has put any of his creditors to unnecessary expense by a frivolous or vexatious defence to any action properly brought against him : or (6) That the bankrupt has, within three months preceding the date of the receiving order, and when unable to pay his debts as they become due, given an undue preference to any of his creditors : or (7) That the bankrupt has on any previous occasion been adjudged bankrupt, or made a composition or arrangement (statutory or otherwise) with his creditors : or (8) That the bankrupt has been guilty of any fraud or fraudulent breach of trust (t): or (under the Bankruptcy Act, 1890) upon proof (9) That the bankrupt's assets are not of a value equal to 10s, in the pound on the amount of his unsecured liabilities, such deficiency of value not being shown to have proceeded from justifiable causes : or (10) That the bankrupt has failed to account satisfactorily for
(r) Act of 1883, s. 30, sub-s. (4) ; Rimini v. Van Praagh (1
2), L. R. 8 Q. B. 1; Elmelie v. Corrie (1878), 4 Q. B. D. 295; E.c parte
Barrow, In re Andrews (1881), 18 Ch. D. 464.
(*) Supra, pp. 201--203.
any loss of assets or for any deficiency of assets to meet his liabilities : or (11) That the bankrupt has, within three months preceding the date of the receiving order, incurred unjustifiable expense by bringing a frivolous or vexatious action : or (12) That the bankrupt has, within three months preceding the date of the receiving order, incurred liabilities with a view of making his assets equal to 10s. in the pound on the amount of his unsecured liabilities. Also, where before his marriage the debtor
(!) Act of 1883, s. 28 ; Ex parte Campbell (1885), 15 Q. B. D.
has made a settlement, or entered into a covenant to settle property, on his wife and children, when he was not really in a position to do so, and such settlement or covenant was in reality designed to defeat or delay his creditors, the order of discharge may be either refused or suspended (u); and it is an express provision of the Bankruptcy Act, 1883 (.), that an undischarged debtor who has been adjudged bankrupt under that Act shall be guilty of a misdemeanor under the Debtors Act, 1869, and be punishable accordingly, if he obtains credit to the extent of 201. or upwards from any person without informing such person that he is an undischarged bankrupt.
Upon the expiration of two years from the date of a conditional order of discharge, if the bankrupt satisfies the court that there is no reasonable probability of his being in a position to comply with the conditions annexed to his discharge, the court may grant him his discharge or otherwise modify the conditions thereof (y) ; and the disqualifications attaching to a bankrupt under the Bankruptcy Act, 1883, sect. 32,—viz., his incapacity to hold certain offices,-are not now to continue for more than five years from the date of the order of discharge (-). Also, by the Bankruptcy (Discharge and Closure) Act, 1887 (a), sects. 2—4, specific provision has been made, (1) For the discharge of bankrupts under the Bankruptcy Act, 1869, or any prior Act or Acts, who have not obtained their discharge under these Acts; (2) For the closing of unclosed bankruptcies under the Bankruptcy Act, 1869; and (3) For superseding the old creditors' assignee (under the Bankruptcy Acts prior to 1869), by the appointment of an official assignee in his place. But the official assignee is in such cases) exempt from all Viability for the acts or neglects of the trustee or assignee whom he supersedes (1.) ; and he may (as may also any
(2) Act of 1983, s. 29.
(z) Ibid. s. 9.
ordinary trustee in bankruptcy) in due course obtain his release (c), and the due remuneration for his services in connection with the bankruptcy (d).
VI. Compositions and schemes of arrangement.-Having now given some account of the existing system under which the law of bankruptcy is administered, we will conclude the chapter by some explanation of an alternative method of proceeding, which is to some extent recognised by the Bankruptcy Act, 1883, and which has always been in very extensive use, being found in some respects more convenient than a bankruptcy. And we will first premise generally, that, although the machinery adopted for this alternative method differs in some of its details from that which has been devised for a bankruptcy, the general principles of the law of bankruptcy are applicable to it. For it has been expressly provided, by the Bankruptcy Act, 1883, that the trustee under a composition or scheme of arrangement under that Act shall have the same powers and perform the same duties as a trustee under a bankruptcy ; that the property of the debtor shall be distributed in the same manner as in a bankruptcy ; and, generally, that all the provisions of that Act with reference to bankruptcy, shall apply (mutatis mutandis) to such a composition or scheme of arrangement (e).
It has always been considered within the true spirit of our modern bankrupt laws to provide a means for carrying into effect any amicable arrangements between a debtor and his creditors; and such arrangements have, in general, been free from any external interference, excepting so far as the prevention of fraud and the interests of commercial morality have otherwise seemed to require, e.J., a debtor who has no assets at all cannot, in common
le) Act of 1883, S. 18, subss. (12), (13).
(c) Act of 1883, s. 82 ; Act of 1887, s. 6.
(d) Act of 1883, s. 72 ; Act of 1890, s. 15.