BANKRUPT LAWS.

No. I.

AMONG the concerns to which the attention of Congress will be called the present session, there is no one more important than that of "establishing uniform laws on the subject of Bankruptcies throughout the United States." The power of enacting such laws was expressly given by the constitution; and of course the exercise of this power was contemplated by the framers of the government. There appears to be some diversity of opinion respecting the general policy of such laws, and still more concerning the particular provisions which they ought to contain. We shall take some occasion hereafter to discuss the general question; and we think it can be made apparent that a uniform system of bankrupt laws, under proper regulations, would tend even more to the security of the creditor, than to the relief of the debtor. It is our design at present to make a brief sketch of the origin, progress, and present state of the English Bankrupt Law; the successive alterations and amendments of which may furnish some useful hints for the consideration of the subject in this country.

The first Bankrupt Law was passed in 1542 in the 35th year of Henry the Eighth. It is entitled, "An act against such persons as do make bankrupt," and has the following remarkable preamble, showing conclusively that the security of the creditor was its only object: "Whereas divers and sundry persons, craftily obtaining into their hands great substance of other men's goods, do suddenly flee to parts unknown, or keep their houses, not minding to pay or restore to any their creditors, their dues, but at their own will and pleasure consume debts and the substance obtained by credit of other men, for their own pleasure and delicate living, against all reason, equity, and good conscience; it is enacted," &c. By this statute, a court of commissioners was erected, consisting of the Lord Chancellor, and the two Chief Justices, with whom several of the great officers of state were associated, who had power, upon the complaint in writing of any party grieved, to make such orders respecting the person and property of such debtor, as to them should seem expedient; to cause his lands and goods to be sold, and the proceeds to be divided rateably among his creditors; and to call before them and examine upon oath all such persons as were suspected of having or concealing any part of the debtor's property. It was also enacted, that if any person concealed any part of the debtor's effects, he should forfeit double the value of the property concealed; that if any person made a false claim before the commissioners, he should forfeit double the amount of his claim; and that if any person colluded with the debtor to have a false claim allowed, he should forfeit all his goods and chat

tels; the several forfeitures to be employed by the commissioners in the payment of the bankrupt's debts. By this statute only two acts of bankruptcy are specified, that of fleeing to parts unknown, and that of keeping house, not minding to pay his creditors. Until one of these acts was done by the debtor, the commissioners had no authority to proceed according to the statute. And it is expressly pro

vided that the creditors shall not be barred of their debts, excepting so far as they are actually paid by the effects of the debtor. It is worthy of remark, that both in this and the two next statutes on the same subject, the bankrupt is uniformly considered a criminal, and is usually designated as the offender; "the goods of such offender shall be taken by the commissioners," &c. Lord Coke somewhere remarks, that we have fetched as well the name as the wickedness of bankrupts from foreign nations; and he adds, that no act of parliament was made against any English bankrupt, until the 34th year of Henry the Eighth, when the English merchant had rioted in three kinds of costlinesses, namely, costly building, costly diet, and costly apparel.

This act continued unaltered for twenty-eight years; and we have nothing in the books to show how it was executed, or what construction was put upon it.

In 1570, the 13th of Elizabeth, an act was passed for "the repression" of bankrupts, and "for a plain declaration who is and ought to be deemed a bankrupt." This statute confines the operation of the law to merchants and traders; and enumerating several additional acts of bankruptcy, such as beginning to keep house, or departing from

his house, or suffering himself to be arrested, or yielding himself to prison, to the intent of defrauding or hindering any of his creditors, declares that the merchant or trader who shall do such acts, shall be deemed and taken for a bankrupt; that is, from that moment is a bankrupt. The second section gives the Lord Chancellor authority to appoint commissioners, and confers upon these commissioners nearly the same powers, as were possessed by the court of commissioners under the statute of Henry the Eighth. The forfeitures for concealing the bankrupt's effects, or for colluding with him, are the same as in the former act; and it is provided, that if the bankrupt do not surrender himself to the commissioners after five proclamations, upon five market days, made in the town nearest the bankrupt's dwelling, that he shall be out of the Queen's protection; and all persons assisting him in escaping or concealing himself, shall suffer fine or imprisonment at the discretion of the Lord Chancellor. And it is expressly declared, as in the former act, that the creditor shall not be barred of any more of his debt, than such part as shall be actually paid to him by the commissioners; and all property afterwards acquired by the bankrupt, shall become immediately vested in the commissioners until his debts be fully satisfied. Of course, under this statute, the creditor could take the body of the debtor, while the commissioners seized his property;-a striking proof that the discharge of the debtor formed no part of the policy or design of the original bankrupt laws. The enacting part of the eleventh section of this statute is introduced with this remarkable expression, "That if any

person who is, or shall be punished and declared to be a bankrupt by virtue of this act," &c., considering bankruptcy throughout as a crime.

The next statute was passed in 1604, the first year of James the First. The preamble sets forth, "that frauds and deceits, as new diseases, daily increase amongst such as live by buying and selling, to the hindrance of traffic and mutual commerce, and to the general hurt of the realm, by such as wickedly and wilfully become bankrupts."

The statute then declares more particularly who shall be adjudged a bankrupt, but does not vary materially from the description in the former statutes. It enacts, that all voluntary conveyances and gifts made by a bankrupt shall be void. Under this section, which is a very important one in principle, it has been decided, that when a man, who is not a trader and not in debt, makes a settlement upon his wife and children, and afterwards becomes a trader and a bankrupt, this settlement cannot be affected by the bankruptcy. It has also been decided, that money, given by a father who is a trader, to his son to set him up in business, cannot be recovered back by the assignees of the father. This decision seems to have been made upon a literal construction of the words of the statute; which makes void all gifts of lands, tenements, goods chattels, and debts; but does not mention money. [See 2 Maule and Selwyn, 36.] The statute of the 13th of Elizabeth gave the commissioners power to examine all persons who could give any material information respecting the bankrupt's property; this act gives them power to compel the attendance of witnesses,