insolvency
Definitions from Case Law · United States Supreme Court
Definitions from Case Law
From 325 U.S. 300 - Finn v. Meighan · 1945Most cited · 237 citing opinions
Bankruptcy Act
Under the Bankruptcy Act it means an insufficiency of assets at a fair valuation to pay the debts
How the Supreme Court has restated “insolvency”
Each Supreme Court definition of “insolvency,” sized by how often later courts cited it. “Change” is measured by wording overlap with earlier definitions — a rough signal, not a semantic judgment.
How often courts cite the cases defining “insolvency”
Court decisions citing the 5 opinions that defined “insolvency” — 708 in all, by decade. Counts are citations to the defining cases as a whole, not verified uses of the term. The dip in the most recent years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the latest years.
All 5 definitions, chronological · 1805–1945
- ORIGINAL
The words of the act extend the meaning of the word insolvency, to cases where 'a debtor, not having sufficient property to pay all his debts, shall have made a voluntary assignment thereof, for the benefit of his or her creditors.' The word 'property' is unquestionably all the property which the debtor possesses; and the word 'thereof' refers to the word 'property' as used, and can only be satisfied by an assignment of all the property of the debtor. Had the legislature contemplated a partial assignment, the words 'or part thereof,' or others of similar import, would have been added.
under federal priority statute
It will be assumed, for the sake of the argument, that the judgment nisi binds the real estate of the debtor from the time it is rendered. The point decided in those cases was, that a mere state of insolvency or inability in a debtor to the United States to pay all his debts, gives no right of preference to the United States, unless it is accompanied by a voluntary assignment of all the property for the benefit of his creditors. There can be little doubt but that the word insolvency, mentioned in the act of 1790, ch. 35. sec. 45., and repeated in the act of 1797, ch. 74. sec. 5., and of 1799, ch. 128. sec. 65., means a legal insolvency, which, whenever it occurs, the right of preference arises to the United States.
under federal priority statute
The term insolvency is not always used in the same sense. It is sometimes used to denote the insufficiency of the entire property and assets of an individual to pay his debts. This is its general and popular meaning. But it is also used in a more restricted sense, to express the inability of a party to pay his debts, as they become due in the ordinary course of business. It is in this latter sense that the term is used when traders and merchants are said to be insolvent, and as applied to them it is the sense intended by the act of Congress.
Insolvency, as used in the Bankrupt Act, when applied to traders, does not mean an absolute inability of the debtor to pay his debts at some future time, upon a settlement and winding up of his affairs, but a present inability to pay in the ordinary course of his business, or, in other words, that a trader is insolvent when he cannot pay his debts in the ordinary course of business as men in trade usually do, and such must be the conclusion, even though his inability be not so great as to compel him to stop business.
Bankrupt Act — traders