Bankrupt

In American law. The meaning of this term remains perhaps to be settled, although the tendency hitherto has been to give it the looser sense of insolvent, or in other words, to use the terms bankrupt and insolvent indifferently, as expressive of the same description of persons. See Insolvent. At the time of the passage of the first bankrupt law of the United States, (Act of Congress, April 4, 1800, repealed by act of December 19, 1803,) the terms bankrupt and bankruptcy seem to have been understood in nearly or quite the technical sense they bore in the English statutes. Afterwards, however, the distinction between bankrupt and insolvent became gradually obscured, the courts finding it difficult to discriminate with accuracy between bankrupt and insolvent laws. Marshall, C. J., 4 Wheatm's R. 122. 2 Kent's Com. 390. This distinction was finally and effectually broken down by the late act of Congress, August 19, 1841, which expressly united the provisions of both descriptions of laws, and included (§1,) under the denomination of bankrupts, not only " merchants, retailers, bankers, factors, brokers, underwriters and marine insurers,** who should commit certain acts of bankruptcy specified; but also, and indeed primarily, " all persons whatsoever, residing in any state, district or territory of the United States, owing debts which should not have been createdin consequence of a defalcation as a public officer, or as executor, administrator, guardian or trustee, or while acting in any other fiduciary capacity," and which they were unable to pay. A very able opposition was made to th& extension of the meaning of the term bankrupt, in several judicial opinions delivered soon after the passage of the act, to which its early and total repeal (in 1843) has given additional weight and value. Opinion of Bronson, J., (dissenting), 5 m Ws N, Y. Rep. 329—371. Opinion of Wells, J., U. S. District Court, Missouri, 2 N, Y. Legal Observer, 185. Judge Bouvier, in his valuable Law Dictionary, has restored in some degree the old distinction between bankrupt and insolvent, defining the former to be "a person who has done, or suffered some ctct to be done, which is by law declared an act of bankruptcy*^ The word trader, it will be seen, is here omitted, while, on the other hand, it is prominently employed by Dr. Webster, in giving even the less technical sense of bankrupt: — " A trader who fails, or becomes unable to pay his just debts; an insolvent trader. In strictness no person but a trader can be a bankrupt." So a bankrupt is called by Mr. Justice Story, " a broken up and ruined trader^ 3 Story's R, 453. These definitions, taken together, bring us very nearly to that of the English law. See supra.