Bankrupt Law

A law relating to bankrupts and the procedure against them in the courts. A law providing a remedy for the creditors af a bankrupt, and for the relief and restitution of the bankrupt limself. A law which, upon a bankrupt’s surrendering all his properly to commissioners for tha benefit of his creditors, discharges him from the payment of his debts, and all liability to arrest or suit for the same, and secures his future acquired property from a liability to the payment of his pastdebts. Webster. A bankrupt law is distinguished from the orditary law between debtor and ¢reditar, as invoiving these three general principles: (1) A summary and immediate seizure of all the debtor's property; (2) a distribution of it among tue creditors in general, instead of merely applying a portion of it to the paymont of the individuul complainant; and (8) the discharge of the debtor from future liability for the debits then existing. The leading distinction between a bankrupt law aud an insolvent law, in the proper technical sense of the words, consists in the character of the persons upon whom it is designed to operate,—the former contemplating as its objects bankrupts only, that is, traders of a certain description; the latter, insolvents in general, or persons unable to pay their debts. This has led to a marked separation between the two systems, in principle and in practice, which in England has always been carefully maintained, although in the United States it has of late been effectually disregarded. In further illustration of this distinction, it may be observed that a bankrupt law, in its proper sense, is a remedy intended primarily for the benefit of creditors; it is set in motion at their instance, and operates upon the debtor againsi his will, (in invituim,) although in its result it effectually discharges him fromhiedebts. An insolventlaw, on the other hand, is chiefly intended for the benefit of the debtor, and is set in motion at his instance, though jeas effective as a discharge in its final result, 5 Hill, 327. The ouly substantial difference between a strictly bankrupt law and us iasolvent law lies in the tireumstance that the former affords relief upon the application of the creditor, aud the latter er much ths modes by which the remedy may ba administered may vary. $7 Cal, 222.

A law for the benefit of the creditors of a bankrupt, (q. v.) and for the relief of the bankrupt himself. A law which, upon a bankrupt's surrendering all his property to commissioners for the benefit of his creditors, discharges him from the payment of his debts, and all liability to arrest or suit for the same, and secures his future acquired property from a liability to the payment of his past debts. Webster. Mr. Justice Story describes a bankrupt law as "a law for the benefit and relief of creditors, and their debtors, in cases in which the latter are unable or unwilling to pay their debts." 3 Story on Const. 13, 14. Mr. Stephen speaks of it as a system of law of a peculiar and anomalous character, intended to afford to the creditors of persons engaged in trade a greater security for the collection of their debts than they enjoyed at common law, under the ordinary remedy by action. 2 Steph. Com. 189, 190. The present bankrupt law of England is contained in the statute 6 Geo. IV. c. 16, amended by 1 & 2 Will. IV. c. 56, 2 & 3 Will. IV. c. 114, 3 & 4 Will. IV. c. 47, and 5 & 6 Vict. c. 122. 2 Steph. Com. 193. The leading features of a bankrupt law, or a system established by such a law, as distinguished from the ordinary law between debtor and creditor, are (1) the summary and immediate seizure of all the debtor's property; (2) the distribution of it among the creditors in general; and (3) the discharge of the debtor from future liability for the debts then existing. Id. 191. 2 Burr. 829. The leading distinction between a bankrupt law and an insolvent law, in the proper technical sense of the words, consists in the character of the persons upon whom it is designed to operate; the former contemplating as its objects bankrupts only, that is, traders of a certain description; the latter, insolvents in general, or persons unable to pay their debts. This has led to a marked separation between the two systems, in principle and in practice, which in England has always been carefully maintained, although in the United States it has of late been effectually disregarded. In further illustration of this distinction, it may be observed that a bankrupt law, in its proper sense, is a remedy intended primarily for the benefit of creditors; it is set in motion at their instance, and operates upon the debtor against his will, (in invitum,) although in its result it effectually discharges him from his debts. An insolvent law, on the other hand, is chiefly intended for the benefit of the debtor, and is set in motion at his instance, though less effective as a discharge in its final result. Bronson, J., 5 Hill's R. 331, 348. 1 Dane's Abr. 317.