Chap. XVII. and effects of such disobedient person.1 Sequestration was, and is, a process of contempt to compel a defendant to perform a duty. The writ of sequestration is a writ issued from the High Court, and is addressed to not less than four persons therein named called the sequestrators, and nominated by the person prosecuting the judgment, commanding them, or any three or two of them, to enter upon and to take the rents and profits of the real estate and the goods and personal estate of the person in default, and to keep the same under sequestration in their hands until the person in default shall pay a certain sum of money, or clear his contempt, and the Court shall make other order to the contrary. The sequestrators are entitled to all the debts due to, and choses in action of, the person in default, and to his stock, and to money in Court belonging to him;7 but until an order is obtained from the Court for payment of the debt or other chose in action to the sequestrators, the debtor may pay the person in default. The Court can order the sale of stock standing in the name of the person in default." The sequestrators may take possession of all personal chattels of the person in default, including growing crops, but excepting wearing apparel and bedding of that person and his family, or the tools and implements of his trade, the value of such apparel, bedding, tools and implements, not exceeding in the whole 51." The sequestrators cannot, however, sell the chattels without leave of the Court, which is only granted if the object of the sequestration is to enforce payment of a sum of money, or if costs have been incurred, or if the goods are of a perishable nature. When the person in default has cleared his contempt, an order can be made for discharge of the sequestration, with directions to the sequestrators to withdraw from possession, and to pass their final accounts, and after retaining their costs, &c., to pay the balance to that person. 1 Ord. XLIII. r. 6. 2 Per Chitty, J., Pratt v. Inman, 43 Rowley v. Ridley, 2 Dick. 630. 5 Francklyn v. Colhoun, 3 Swanst. 276; 6 Couper v. Taylor, 16 Sim. 314. Conn v. Garland, 9 Ch. 101. 8 Wilson v. Metcalfe, 1 Beav. 263; 49 R. R. 356. 9 Couper v. Taylor, 16 Sim. 314. 10 Dixon v. Smith, 1 Swanst. 457; Pelham v. Newcastle, 3 Swanst. 290, n. 11 8 & 9 Vict. c. 127, s. 8. The proceeds of the writ are dealt with by order of Court. Chap. XVII. There appears to be some doubt whether a sequestration can be issued to enforce payment of money to a person, as distinguished from payment into Court. The writ cannot issue unless there has been an order for the payment of money, or performance of some other act within a limited time. It may be issued by leave of the Court or judge against a corporation wilfully disobeying any judgment or order. 3 A sequestration to enforce the payment of costs cannot be issued without leave of the Court or a judge.* 1 Ord. XLIII. r. 6; Walker v. Bell, 2 Mad. 24; 17 R. R. 174. 2 See this discussed, Anderson on Executions, 539, where the conclusion is arrived at that this doubt is not well 3 Ord. XLII. r. 31. Ord. XLIII. r. 7; Hulbert v. Cathcart, [1896] A. C. 470. Ch. XVIII. Common law. "Bankrupt." Object of CHAPTER XVIII. BANKRUPTCY. ONE creditor may, by his diligence in obtaining judgment and suing out execution thereon, obtain satisfaction of his claim in priority to the debtor's other creditors; and at common law a man who was unable to pay his debts in full could not be freed from liability even by giving up all his property to be divided among his creditors in satisfaction, so far as it would go, of their claims. If his body was taken in execution by a creditor, under the right which was formerly given by the law, he might remain in prison all his life; and, even if he was not imprisoned, any property that he might at any time acquire was liable to be taken from him so long as any debt remained unsatisfied. The common law has been altered by a series of Acts commonly called "the Bankruptcy Acts." It is necessary to have a general knowledge of the effect of the repealed Acts, for the title to property is still in some cases affected by them.1 The term "bankrupt," in its original meaning, denoted a trader who secreted himself, or did certain other acts tending to defraud his creditors. The word is said to have been derived from "bancus," the counter of a tradesman, and "ruptus," broken, denoting one whose trade is gone. But since 1861, the term includes non-traders. 3 The object of the earlier Acts was "to relieve the creditors of the bankrupt equally, and that there should be an equal and rateable proportion observed in the distribution of the bankrupt's goods amongst the creditors, having regard to the quantity of their several debts; so that one should not prevent the other, but all should be in æquali jure." 4 1 See as to the early bankruptcy law, 2 Bl. 285, 471 et seq. 2 2 Bl. 285, 472; 4th Instit. 277. The Bankruptcy Act, 1861 (24 & 25 Vict. c. 134), ss. 69, 232. 4 The Case of Bankrupts, 2 Rep. 25 b. The modern law of bankruptcy extends to non-traders, and "has Ch. XVIII. for its object the distribution of an insolvent's' assets equitably among his creditors and persons to whom he is under liability; and, upon this cessio bonorum, to release him under certain con ditions from future liability in respect of his debts and obligations."2 3 The earliest statute relating to bankruptcy was directed against 34 & 35 Hen. all fraudulent debtors, whether traders or not. It authorized the 8, c. 4. Lord Chancellor and certain other great officers of state to seize the property of the debtor and to distribute it rateably among his creditors. 4 This statute was followed by an Act, which applied to traders 13 Eliz. c. 7. only, and under which the jurisdiction was vested in the Lord Chancellor alone, who was empowered to appoint commissioners to seize the persons and property of bankrupt traders and to distribute the property rateably. Proceedings under this Act were commenced by suing out a commission of bankruptcy under the Great Seal: and the property of the bankrupt vested in the commissioners, who assigned it to assignees by whom it was realized and distributed among the creditors." Neither of the Acts above mentioned contained any provision 4 Anne c. 17 for the discharge of the bankrupt; but it was provided by 4 Anne, c. 17 (an Act amended by several subsequent statutes which require no notice in this place), that a trader who had surrendered all his effects might, with the consent of a specified number of his creditors, obtain an order of discharge, called a "certificate of conformity." c. 16. All the prior Acts were consolidated and amended by the Act 6 Geo. 4, of 1825. This Act retained the principle of collecting and distributing the estates of bankrupt traders by means of creditors' assignees. It was framed on the lines of the previous Acts, but it introduced the principle of deeds of arrangement, subject, however, to very severe restrictions. 1 The word "insolvent" is here used in the sense of a person unable to pay his debts; but it sometimes denotes a debtor who took the benefit of the "Insolvency Acts" (see Elph. & Cl. Searches, 100; post, p. 318), which had the same general purpose as the Bankruptcy Acts, but applied to non-traders only. 2 Per James, L. J., Ex p. Walton, 17 Ch. D. 756, cited per Cairns, C., Hill v. 334 & 35 Hen. 8, c. 4. 4 13 Eliz. c. T 5 As to the nature of the jurisdiction of the Lord Chancellor in proceedings under this Act, see Yate-Lee & Wace, 2. 66 Geo. 4, c. 16. Ch. XVIII. 1 & 2 Will. 4, "Fiat." "Assignees." Act of 1849. Act of 1861. Non-traders In 1831 the first Court of Bankruptcy, called the Court of Review, was established. The jurisdiction of the Lord Chancellor in bankruptcy was transferred to the Court of Review, subject to an appeal to the Lord Chancellor. Official commissioners were appointed with all the powers theretofore vested in commissioners appointed by the Lord Chancellor. Proceedings in bankruptcy under this Act were commenced by the petition of a creditor to the Lord Chancellor, followed by the issue of a "fiat" by one of the judges or a master of the Court of Chancery authorizing the creditor to prosecute his complaint in the Court of Review, or before persons named in the fiat who were to have all the powers of commissioners appointed under the Great Seal. A certain number of persons were to be appointed by the Lord Chancellor to act as "official assignees." All the personal estate and the rents and profits of the real estate, and the proceeds of sale of the estate, both real and personal, of the bankrupt were to be received by the official assignee alone. The "present and future real estate" of a bankrupt was to vest in the official assignee and the assignee or assignees chosen by the creditors, by virtue of their appointment, and was to shift from time to time to the assignees for the time being. The then existing law was consolidated and amended by the Bankrupt Law Consolidation Act, 1849, which made some alterations as to deeds of arrangement. Next followed the Bankruptcy Act, 1861,3 which extended the law of bankruptcy to non-traders and substituted an order of discharge for a certificate of conformity, and facilitated composition deeds. 4 Prior to this Act non-traders could obtain relief from their debts while in custody for debt only by the filing of a petition to the Insolvent Debtors' Court, either by the debtor or by the creditor at whose suit the debtor was in prison. The Court then made an order vesting the debtor's property in a “provisional assignee," and had power to appoint any other persons to be assignees, on whose appointment the debtor's property passed to them for the benefit of the creditors. After examination of the 1 By 1 & 2 Will. 4, c. 56, amended by 5 & 6 Will. 4, c. 29. 212 & 13 Vict. c. 106. 3 24 & 25 Vict. c. 134. 4 1 & 2 Vict. c. 110, amended by 5 & 6 Vict. c. 116; 7 & 8 Vict. c. 70; 7 & 8 Vict. c. 96; 10 & 11 Vict. c. 102; all repealed by 24 & 25 Vict. c. 134. There were several earlier Acts, the most important of which was 7 Geo. 4. c. 57. |