pound, he is left to the discretion of the commissioners and assignees, to have a competent sum allowed him, not exceeding three per cent.; but i they pay ten shilling in the pound, he is to be allowed five per cent.; it twelve shillings and six-pence, then seven and a half per cent.; and if fifteer shillings in the pound, then the bankrupt shall be allowed ten per cent., provided that such allowance do not, in the first case, exceed 2007., in the second, 250l., and in the third, 300l.. (y) (36).

Besides this allowance, he has also an indemnity granted him, of being free and discharged for ever from all debts owing by him at the time he became a bankrupt; even though judgment shall have been obtained against him, and he lies in prison upon execution for such debts ; and, for that, among other purposes, all proceedings on commissions of bankrupt are, on petition, to be entered of record, as a perpetual bar against actions to be commenced on this account: though, in general, the production of the certificate, properly allowed, shall be sufficient evidence of all previous proceedings (2). Thus, the bankrupt becomes a clear [*484] man again (37): and, by the assistance of his allowance and his own industry, may become a useful member of the commonwealth; which is the rather to be expected, as he cannot be entitled to these benefits, uness his failures have been owing to misfortunes, rather than to misconduct and extravagance.

For, no allowance or indemnity shall be given to a bankrupt, unless his certificate be signed and allowed, as before mentioned; and also, if any creditor produces a fictitious debt, and the bankrupt does not make discovery of it, but suffers the fair creditors to be imposed upon, he loses all title to these advantages (a). Neither can he claim them if he has given with any of his children above 1001. for a marriage portion, unless he had at that time sufficient left to pay all his debts; or, if he has lost at any one time 5l., or in the whole, 1007. within a twelvemonth before he became bankrupt, by any manner of gaming or wagering whatsoever; or within the same time has lost the value of 100l. by stock-jobbing (38). Also

(y) Stat. 5 Geo. II. c. 30. By the Roman law of cession, if the debtor acquired any considerable property subsequent to the giving up of his all, it was liable to the demands of his creditors. (Ff. 42. 3, 4). But this did not extend to such allowance as was left to him on the score of compassion for the maintenance of himself and family. Si quid mise

(36) The 128th section of the statute so often referred to on this subject, embodies the substance of the text, with this variation only, that the allowance to a creditor who pays ten shillings in the pound, or upwards, may now be made to the amount of 4001., and the allowance to a bankrupt who pays twelve shillings and sixpence in the pound, may amount to 500, and the allowance to a bankrupt who pays fifteen shillings in the pound, may amount to 600l.; and a discretionary allowance to a bankrupt who does not pay ten shillings in the pound, may be given to the amount of 3001.

(37) See ante, note (2) to this chapter. The

The discharge, to have this effect in NewYork, must have been granted on an application made by the debtor and two thirds in value of all bs creditors residing in the U. S.; (2 R. S. p. 16. § 1, 2 : p. 22. ◊ 30, 31, &c.); or

ricordiæ causa ei fuerit relictum, puta menstruum vel
annuum, alimentorum nomine, non oportet propter
hoc bona ejus iterato venundari: nec enim fraudan
dus est alimentis cottidianis. (Ibid. 1. 6).
(2) Stat. 5 Geo. II. c. 30.
(a) Stat. 24 Geo. II. c. 57.

121st section of the statute of 6 Geo. IV. c. 16, enacts, that a bankrupt who has in all things conformed to the bankrupt laws, and obtained his certificate, shall be discharged from all debts due by him when he became bankrupt, and from all claims and demands proveable under the commission; and the 131st section enacts, that no promise, after the certificate allowed, to pay any debt discharged by such certificate, shall be oinding, unless such promise be made in writing, signed by the bankrupt, or by some person lawfully authorized, in writing, by such bankrupt.

(38) In note (35) to this chapter, the 130th section of the consolidated bankrupt act is else on the application of a creditor, when the debtor has been imprisoned more than 60 days · (id. p. 24, § 1. and p. 27, 17.) In other cases his person only is exempted from imprison

ment.

to prevent the too common practice of frequent and fraudulent or careless breaking, a mark is set upon such as have been once cleared by a commission of bankrupt, or have compounded with their creditors, or have been delivered by an act of insolvency: which is an occasional act, frequently passed by the legislature: whereby all persons whatsoever, who are either in too low a way of dealing to become bankrupts, or not being in a mercantile state of life, are not included within the laws of bankruptcy, are discharged from all suits and imprisonment, upon delivering up all their estate and effects to their creditors upon oath, at the sessions or assizes; in which case their perjury or fraud is usually, as in case of bankrupts, punished with death. Persons who have been once cleared by any of

these methods, and afterwards become bankrupts again, unless [485] they pay full fifteen shillings in the pound, are only thereby indemnified as to the confinement of their bodies; but any future estate they shall acquire remains liable to their creditors, excepting their necessary apparel, household goods, and the tools and implements of their trades (b) (39).

(b) Stat. 5 Geo. II. c. 30.

cited, which makes an alteration as to the amount of gambling losses which will deprive a bankrupt of the advantages of a certificate or allowance. It appears, also, from the 73rd section of the same act, that portions giving by a trader to any of his children upon their marriage, though such portions exceeded 100l. and he was at the time insolvent, cannot be recalled upon his bankruptcy; and that part of the 12th section of stat. 5 Geo. II. c. 30, which deprived a bankrupt who had given such portion of the benefits of a certificate, is not retained in the recent act.

(39) The 127th section of the statute of 6 Geo. IV. c. 16, does not merely make such future estate liable to such bankrupt's creditors, but absolutely vests it in the assignees under their commission, who are authorized to seize the same, in like manner as they might have seized property of which such bankrupt was possessed at the issuing of the commissions against them.

(It may be here observed, to close this branch of the subject, that, by the 50th section of the same act, mutual debts and credits may be set off against each other, notwithstanding any prior act of bankruptcy committed before the credit given to, or the debt contracted by, the bankrupt provided the person claiming the benefit of such set off had not, when such credit was given, notice of the act of bankruptcy. By the 51st section of the act, debts which were not payable at the time of the bankruptcy may be proved, deducting a rebate of interest, at the rate of 5 per cent. to be computed from the declaration of a dividend to the time when such debts would regularly have become payable. The 52nd section of the statute enables sureties and persons liable for the debts of bankrupts, after they have discharged the debts, to prove their demands in respect of such payments, as debts under the commissions and to receive dividends with the other creditors, not disturbing any former dividends.

The 53rd section contains a proviso for

proof by an obligee in a bottomry or respon dentia bond, and the assured in any policy of insurance, though the loss or contingency may have happened after the issuing of the com mission against the obligor or insurer. The 54th section of the act admits annuity credi tors to prove for the actual value of their annuities, such value to be ascertained by the commissioners. The 55th section provides, that, until the value of an annuity granted by a bankrupt shall have been so ascertained as aforesaid, the grantor shall not be allowed to sue any collateral surety for the payment of such annuity: (this clause, it has been held applies to annuities granted before the passing of the act, as well as to those granted since. Bell v. Bilton. 1 B. Moore & Payne, 582); and if the surety pay the amount so ascer tained and proved under the commission, he shall thereby be discharged from all claims in respect of such annuity: but, if such surety shall not pay the sum so proved, he may be sued for the accruing payments of the annuity, until he shall have satisfied the amount so proved, with interest thereon, at the rate of 4 per cent, from the time of notice of such proof, and after such satisfaction, the surety shall stand in the place of the annuitant in respect of such proof; and the certificate of the bankrupt shall be a discharge to him from a claims of such annuitant or of such surety in respect of such annuity. The 56th section of the statute enacts, that debts which are contingent at the time of the debtor's bankruptcy, may, if the creditor wishes it, be valued by the commissioners, and proof shall be admitted to the amount so ascertained, and dividends be payable thereon; or, if such value shall not be ascertained before the contingency happens, the creditor may prove in respect of the entire debt, and receive divi dends thereon, not disturbing former divi dends; provided the creditor had not, when such debt was contracted, notice of any act of bankruptcy by the bankrupt committed. The 75th section of the act relieves a bankrupt em

Thus much for the proceedings on a commission of bankrupt, so far as they affect the bankrupt himself personally. Let us next consider,

4. How such proceedings affect or transfer the estate and property of the bankrupt. The method whereby a real estate, in lands, tenements, and hereditaments, may be transferred by bankruptcy, was shewn under its proper head in a former chapter (c). At present, therefore, we are only to consider the transfer of things personal by this operation of law.

By virtue of the statutes before mentioned (d), all the personal estate and effects of the bankrupt are considered as vested, by the act of bankruptcy, in the future assignees of his commissioners, whether they be goods in actual possession, or debts, contracts, and other choses in action; and the commissioners by their warrant may cause any house or tenement of the bankrupt to be broke open, in order to enter upon and seize the same And when the assignees are chosen or approved by the creditors, the com missioners are to assign every thing over to them; and the property of every part of the estate is thereby as fully vested in them, as it was in the bankrupt himself, and they have the same remedies to recover it (e).

The property vested in the assignees is the whole that the bankrupt had in himself, at the time he committed the first act of bankruptcy, or that has been vested in him since, before his debts are satisfied or agreed for. Therefore, it is usually said, that once a bankrupt, and always a bankrupt; by which is meant, that a plain direct act of bankruptcy once committed cannot be purged, or explained away by [486] any subsequent conduct, as a dubious equivocal act may be (f); but that, if a commission is afterwards awarded, the commission and the property of the assignees shall have a relation, or reference, back to the first and original act of bankruptcy (g). Insomuch that all transactions of the bankrupt are from that time absolutely null and void, either with regard to the alienation of his property, or the receipt of his debts from such as are privy to his bankruptcy; for they are no longer his property, or his debts, but those of the future assignees. And if an execution be sued out, but not served and executed on the bankrupt's effects, till after the act of bankruptcy, it is void as against the assignees (40). But the king is not bound by this fictitious relation, nor is he within the statutes of bankrupts (h); for, if, after the act of bankruptcy committed, and before the assignment of his effects, an extent issues for the debt of he crown, the goods are bound thereby (i) (41). In France, this doctrine of

titled to a lease, which the assignees accept, from all liability to pay any rent accruing after the date of the commission, or to be sued in respect of any subsequent non-observance or the non-performance of the covenants contained in such lease; and, if the assignees decline to accept the same, the bankrupt will still be released from the said liabilities, in case he deliver up the lease to the lessor with in fourteen days after he shall have had notice that the assignees have declined to accept the

same.

(40) If a sheriff take goods in execution af ter an act of bankruptcy committed by the

party against whom the execution is sued out, it has been held, that the sheriff is liable to the assignees, in trover, although he had no notice of the act of bankruptcy, and although the commission did not issue until nearly two months after the execution. (Price v. Helyar, 1 B. Moore & Payne, 552).

(41) The king is not bound by the acts relating to bankrupt, not being named therein; (Awdley v. Halsey, W. Jones, 203. Brassey v. Dawson, 2 Str. 982; and see ante, note (30) to this chapter); and, by virtue of the prerogative, if a debtor to the crown become a bankrupt, and a commission be sued out

This relation back to the act of insolvency, does not take place in New-York

relation is carried to a very great length; for there, every act of a merchant, for ten days precedent to the act of bankruptcy, is presumed to be fraudulent, and is therefore void (k). But with us the law stands upon a more reasonable footing: for, as these acts of bankruptcy may sometimes be secret to all but a few, and it would be prejudicial to trade to carry this notion to its utmost length, it is provided by statute 19 Geo. II. c. 32, that no money paid by a bankrupt to a bonâ fide or real creditor, in a course of trade, even after an act of bankruptcy done, shall be liable to be refunded. Nor, by statute 1 Jac. I. c. 15, shall any debtor of a bankrupt, that pays him his debt, without knowing of his bankruptcy, be liable to account for it again. The intention of this relative power being only to reach fraudu lent transactions, and not to distress the fair trader (42).

(k).Sp. L. b. 29, c. 16.

The assignees may pursue any legal method of recovering this property so vested in them, by their own authority; but *can- [487] not commence a suit in equity, nor compound any debts owing to

the bankrupt, nor refer any matters to arbitration, without the consent of the creditors, or the major part of them in value, at a meeting to be held in pursuance of notice in the Gazette (/) (43).

When they have got in all the effects they can reasonably hope for, and reduced them to ready money, the assignees must, after four and within twelve months after the commission issued, give one-and-twenty days' notice to the creditors of a meeting for a dividend or distribution; at which time they must produce their accounts, and verify them upon oath, if required. And then the commissioners shall direct a dividend to be made. at so much in the pound, to all creditors who have before prov ed, or shall then prove, their debts (44). This dividend must be made equally, and in a rateable proportion, to all the creditors, according to the quantity of their debts; no regard being had to the quality of them. Mortgages, indeed, for which the creditor has a real security in his own hands, are entirely safe; for the commission of bankrupt reaches only the equity of redemption (m). So are also personal debts, where the creditor has a chattel in his hands, as a pledge or pawn for the payment, or has taken the debtor's lands or goods in execution (45).† And, upon the equity of

(1) Stat. 5 Geo. II. c. 30.

act of bankruptcy by him committed; and such creditor shall not be liable to refund the same to the assignees of such bankrupt. provided the person so dealing with the bankrupt had not, at the time of such payment by or to the bankrupt, notice of any act of bankruptcy by such bankrupt committed.

(43) If, after such notice given, creditors whose debts amount to one third in value of the whole sum proved under the commission do not attend the meeting, the assignees are empowered by the 88th section of the statute of 6 Geo. IV. c. 16, to do any of the acts specified in the text above, the commissioners giving their consent in writing.

(44) The 106th section of the statute of 6 Geo. IV. c. 16, enacts, that the commissioners shall appoint a public meeting, not sooner than four calendar months from the date of the commission, nor later than six calendar months from the last examination of the bankrupt, for the purpose of auditing the accounts of the assignees; and the 107th section enacts, that the commissioners shall, not sooner than four, nor later than twelve calendar months from the issuing the commission, appoint a public meeting, to make a dividend of the bankrupt's estate, at which meeting all credi tors who have not proved their debts shall be entitled to prove the same; and the commissioners shall then order such a dividend as they see fit to be made, and the assignees shall forthwith make such dividend; but no dividend shall be declared, unless the accounts

+ Mr. Christian observes, that "where a ereditor has a mortgage or pledge, which he thinks insufficient to satisfy the whole of his debt, he may apply to the commissioners, and if they see no objection to the title of the mortgage, they nay order it to be sold, and

(m) Finch, Rep. 466.

of the assignees shall have been first audited as aforesaid.

(45) The 108th section of the statute of 6 Geo. IV. c. 16, enacts, that no creditor having any security for his debt; or having made any attachment in London, or any other place, by virtue of any custom there used, of the goods and chattels of a bankrupt; shall receive upon any such security or attachment more than a rateable part of such debt; except in respect of any execution or extent served and levied by seizure upon, or any mortgage of or lien upon, any part of the property of such bankrupt before the bankruptcy: provided, that no creditor, though for a valuable consideration, who shal. sue out execution uper. any judg. ment obtained by default, confession, or nil dicit, shall avail himself of such execution to the prejudice of other fair creditors, but shall be paid rateably with such creditors. execution, however, will not be set aside, but will stand for the benefit of all the creditors rateably: (Taylor v. Taylor, 5 Barn. & Cress. 394): and this rateable distribution will be enforced at common law, without putting the parties interested to the extraordinary remedy of a court of equity. (Mitchell v. Knott, 1 Simons, 499). The case of a creditor who obtained judgment before his debtor's bankruptcy, and who does not come in under his commission, is left as it was before the passing of the act. (Ex parte Botcherley, 2 Glyn & Jameson, 370.)

The

The great seal exercises (with caution) a that the produce shall be applied in discharge of the expenses of the sale, and of the mort gagee's debt; and if there be a deficiency, the mortgagee shall be permitted to prove it under the commission. Order March 8th 1794.