insolvency

Under the Bankruptcy Act it means an insufficiency of assets at a fair valuation to pay the debts

The state of a person who is unable, from any cause, to pay his debts. Two tests of insolvency prevail, their application generally being governed by the purpose for which the fact of insolvency is ascertained, though there is some confusion in the cases in this respect. Generally, for the purpose of enabling the debtor or his creditors to take advantage of insolvent acts, one is insolvent who is unable to meet his obligations as they accrue in due course of trade, and is unable to proceed in business without making some arrangement with his creditors, without regard to the ultimate sufficiency of his assets in liquidation. 112 Pa. St. 294; 98 Iowa, 321; 86 Me. 246; 3 Gray (Mass.) 600; 116 Mo. 226. Within the rule relating to conveyances by insolvent persons, it is generally held that one is insolvent whose obligation could not be collected by legal means out of his property. 43 N. Y. 75; 31 Mo. 73. If one has means from which payment could be enforced, he is not insolvent, even though he is in embarrassed circumstances, and unable to make present payment (136 N. Y. [N. Y.] 632). Property so situated that it cannot be reached by creditors is not to be considered in determining, the issue of solvency (g. v.). Distinction between "insolvency" and "bankruptcy," see "Bankruptcy."

The condition of a person who is insolvent; inability to.pay one's debts; lack of means to pay one's debts. Such a relative condition of a man's assets and liabilities that the former, if all made immediately available, would not be sufficient to discharge the latter. Or the condition of a person who is unable to pay his debts as they fall due or in the usual course of trade and business. See Dewey v. St. Albans Trust Co., 56 Vt. 475, 48 Am. Rep. 803 ; Toof v. Martin, 13 Wall. 47, 20 L. Ed. 481; Miller v. Southern Land & Lumber Co., 53 S. C. 364, 31 S. E. 281; Leitch v. Hollister, 4 N. Y. 215; Silver Valley Mining Co. v. North Carolina Smelting Co., 119 N. C. 417, 25 S. E. 954; French v. Andrews, 81 Hun, 272, 30 N. Y. Supp. 796; Appeal of Bowersox, 100 Pa. 438, 45 Ain. Rep. 387; Van Riper v. Poppenhausen, 43 N. Y. 75; Phipps v. Harding, 70 Fed. 470, 17 C. C. A. 203, 30 L. H. A. 513; Shone v. Lucas, 3 Dowl. & R. 218; Herrick v. Borst, 4 Hill (N. Y.) 652; Atwater v. American Exch. Nat. Bank, 152 III. 605, 38 N. E. 1017; Rug-gles v. Cannedy, 127 Cal. 290, 53 Pac. 916, 46 In R. A. 371. As to the distinction between bankruptcy and insolvency, see Bankruptcy.

— Insolvency fund. In English law. A fund, consisting of moneys and securities, which, at the time of the passing of the bankruptcy act, 1861, stood, in the Bank of England, to the credit of the commissioners of the insolvent debtors' court, and was, by the twenty-sixth section of that act, directed to be carried by the bank to the account of the accountant in bankruptcy. Provision has now been made for its transfer to the commissioners for the reduction of the national debt. Robs. Bankr. 20, 56,

— Open insolvency. The condition of one who has no property, within the reach of the law, applicable to the payment of any debt. Hardesty v. Kinworthy, 8 Blackf. (Ind.) 305; Som-erby v. Brown, 73 Ind. 356.

Sometimes, the insufficiency of the entire property and assets of an individual to pay his debts — the general and popular meaning.

In a more restricted sense, inability to pay debts as they become due in the ordinary course of business. The term is used in the latter sense when traders and merchants are said to be insolvent, also in bankrupt laws. With reference to persons not engaged in trade and commerce, the term may have a less restricted meaning,' Opposed, solvency^ q. v. In the sense of the Bankrupt Act, means that a party, whose business affairs are in question, is unable ' United States v. Guiteau, 10 F. E. 163, 166, 167-68, 182-83 (Jan. 85, 1882), Cox, J.; note and cases to same, pp. 189-208, by Dr, Wharton. " Connecticut Mut. Life Ins. Co. v. Lathrop, 111 U. S. 618-20 (1884), Harlan, J.; 1 Whart. & S. Med. J. § 237. s Toof i;. Martin, 13 Wall. 47 (1871), Field, J. See to pay his debts as they become due in the ordinary course of his daily business.^ Insolvency is owing debts in excess of the value of one's tangible property. Without debts there can be no insolvency. Poverty and insolvency are not synonymous terms within the meaning of a statute conferring the right to administer upon an estato.^ Insolvent.- 1, adj. Not possessing the means with which to pay debts in full; concerning one so involved. In the last sense " insolvency " is frequently used. Thus we have insolvent debtor, trader, criminal, circumstances; and insolvent or insolvency laws. 3, n. A person who is not pecuniarily able to pay his debts as they fall due; also, a person whose property, if distributed pro rata among his creditors, would hot be sufficient to pay their claims in full. Insolvency or insolvent laws. Laws passed by the individual States for the distribution, among creditors, of the property of persons who are unable to pay their debts in the ordinary course of business. In strictness, "bankrupt" laws apply only to traders or merchants, and "insolvent" laws to all other persons. Insolvent laws 'are banlcrupt laws passed by the States. Bankrupt laws discharge absolutely; insolvent laws leave future acquisitions liable. State laws are suspended while a national law is in operation. 8 See Bankruptcy; Cause, 1 (3), Probable; Ciroum-