schedule of the principal part of which property is hereto annexed.

To have and to hold, all the above granted premises, to the said E. F., his heirs and assigns, in trust, to sell and dispose of said property on such terms as he may think most for the interest of all concerned, and collect and convert into money all the debts and demands, or so much thereof as may prove collectible; and, after deducting from the proceeds of said property the expenses incurred by E. F. in transacting the business, and a reasonable compensation for his services, to divide and pay the residue of said proceeds among all the creditors of said A. B., (who shall become parties hereto within days from date hereof,) in equal proportions to their respective claims.

E. F. agrees to execute said trust, being only responsible for his actual receipts or wilful defaults. And the creditors, whose names are subscribed, agree to said assignment, and that this instrument, upon payment of their proportion of the proceeds as aforesaid, shall be a release in full of all their claims.

Witness our hands and seals this 18 ; and the creditors, whose names unite in adopting the seal set against the signer of them as their common seal.

day of , A. D. are signed hereto, name of the first

A. B. [L. S.]

E. F. [L. S.]

Signatures of Creditors. [L. S.]

Common seal of Creditors.

[To be recorded when real estate is included.]

NOTE.-In most of the States, a creditor not acceding, could, by attachment or by levy of judgment, prevent the carrying out of such assignment. In some States no preference of one class of creditors over another is allowable; in others, a debtor may legally prefer one or more creditors. By omitting the clause in brackets, this form will conform to the Statute Assignments in some of the States.

CHAPTER XX.

OF BANKRUPTCY AND INSOLVENCY.

SECTION 1.-Of General Principles, Common to Both. Most governments authorize a peremptory and adverse levy upon all a debtor's property, (with some specified exceptions,) and sometimes upon his body by arrest and imprisonment, at any time and without notice, for payment of his debts.

In some States, the property of a resident debtor cannot be levied upon till after judgment; and in others, it may be attached on preliminary process, and held as security for payment of such judgment as may afterwards be recovered. See Chapter XXI.

Some governments authorize personal arrests and imprisonment for debt. It has been found, in all commercial countries, that many persons, by inevitable misfortune, become so embarrassed with debts as to be unable to engage in the prosecution of business, whereby they are put to inconvenience, and the productive capacity and wealth of the State is diminished; and for the relief of such persons, laws of bankruptcy and insolvency are passed. They are alike in many respects, and the lines of difference between them are not so clearly marked as to enable any person to say with definiteness, what belongs exclusively to the one and not to the other class. Both have this object in common, that they are intended to secure the application of the effects of the debtor to the payment of his debts, and then to relieve him from their burden. But some insolvent laws of some of the States of this Union do not, in any manner, relieve the debtor from his debts, being framed entirely in the interest of the creditor, for the mere sequestration and distribution of the debtor's estate, and his compulsory examination in reference thereto.

The usual and leading objects of these laws are four: First, to compel an equal distribution of the effects of an insolvent debtor among his creditors, in proportion to their claims; in the accomplishment of which purpose, the law defines what shall be deemed acts or evidence of insolvency, and from the moment of the commission of one of those acts, the debtor becomes. liable to be proceeded against as a bankrupt. Application may be made to the proper court by petitions of a creditor, and, upon adjudication of his bankruptcy, all power of the debtor over his property is taken away and vested in assignees. If there be danger that the debtor will conceal or fraudulently dispose of the property, while the proceeding is pending and before adjudication of bankruptcy, the law usually provides for a preliminary injunction, which may be issued by the court in its discretion to prevent this.

Second, to exempt the person of the debtor, and also his future acquisitions, from liability for his ordinary debts then existing; the creditors being compelled, as to all claims not resting upon dishonesty or fraud, to receive their respective dividends in full satisfaction of their demands.

Third, to encourage honesty in the accomplishment of this end, by making the discharge conditional and dependent upon the honesty of the debtor, while penalties, sometimes quite severe, are annexed to dishonesty.

Fourth, to render possible and to encourage future efforts in business; to which end, if the debtor is found to have been honest and fair in his dealings, and in his obedience to the law, he is usually allowed a small proportion of his estate with which to try his fortunes again.

SECTION 2.

The Constitution of the United States confers upon Congress the power to establish uniform laws, throughout the Union, upon the subject of bankruptcy. Ante, p. 37. It has been held by the Supreme Court of the United States, that the power thus vested in Congress is not exclusive: but the same power may be exercised by the States, under the restrictions of the national constitution, which are such that no

State law can be permitted to impair the obligation of a contract; and any of its provisions, which contravene the regulations of a United States bankrupt law then in force, are void; and they are not permitted to affect the rights of citizens of other States, unless they choose, by proving their debts under them, voluntarily to submit to their provisions. The most important authorities bearing upon the questions of the rights of the general government and of the several State governments in the matter of laws of bankruptcy and of insolvency, and upon the effect of State laws, are, Sturgis vs. Crowningshield, 4 Wheaton, 195; Ogden vs. Saunders, 12 Wheaton, 213; Blanchard vs. Burrell, 13 Mass., 1; Braynard vs. Marshall, 8 Pick., 194; 3 Story on Constitution, pp. 252 -256; Norton vs. Cook, 9 Conn., 314; May vs. Breed, 7 Cush., 15; Scribner vs. Fisher, 2 Gray, 43; Marsh vs. Putnam, 3 Gray, 551; Donnelly vs. Corbett, 3 Selden, 500; Poe vs. Duck, 5 Maryland, 1; Whitney vs. Whitney, 35 N. H., 457; Dinsmore vs. Bradley, 5 Gray, 487; Peck vs. Hibbard, 26 Vt., 698; Long vs. Hammond, 4 Maine, 204; Geo. A. Hawkins and others, appeal from probate, 34 Ct., 548; Sedgwick, Assignee, vs. Place and others, (heard before Judge Nelson in U. S. C. C., for Southern District of N. Y., in 1869, and reported in Weekly Bankrupt Register, Vol. 1, p. 204.)

The doctrine of most of the cases seems to be, that the passing of the bankrupt law, by the national authority, suspends the operation of all State laws upon the subject, except where proceedings have been already instituted, (as in Judd vs. Ives, 4 Met., 401,) in which case the State law was allowed a modified operation, to the extent of proceedings pending. These last cases, (Hawkins' appeal and Sedgwick vs. Place,) go further, and hold that it is competent for parties to take any proceedings under State laws, which are not in conflict with the principles and provisions of the National Law.

Since the passage of the U. S. Bankrupt Law of 1867, several well prepared books have been published, with full references to principles discussed in adjudged cases, and notes of judicial decisions; to which reference may be had by those

who desire fuller information on this subject; we only remark that, in reference to the effect of foreign proceedings in bankruptcy, the American rule differs from the English. Their rule is, that proceedings under a bankrupt law have a universal operation everywhere; while we limit their effect, by holding that the assignment, under a foreign law, passes the title to personalty in our jurisdiction, where no other rights intervene, but is not valid for that purpose, (unless the domestic law so provides,) as against a subsequent attaching creditor here. And as to a foreign discharge, the rule, as established by the most authoritative decisions, is that, if its effect be to extinguish the debt by the law of the place of contract, such a discharge will be valid everywhere.

But, where the effect is only to take away some portion of the remedy, as the arrest of the body of the debtor, such exemption from arrest is not elsewhere recognized; the general rule of law being that statutes affecting only the remedy are confined in their effect to the State which enacted them. Of this class are statutes exempting from arrest, and statutes of limitation. See Chapters 21 and 23.

SECTION 3.

Synopsis of the Bankrupt Law of the United States of 1867, and the Amendment of 1868.

First. Of the Courts of Bankruptcy and their Jurisdiction. The several District Courts of the United States are by statute constituted Courts of Bankruptcy, and invested with original jurisdiction in their respective districts in all matters relating thereto. It is provided that they shall always be open for the transaction of bankruptcy business; and the jurisdiction conferred upon them is defined as extending to all cases in controversies arising between the bankrupt and any creditor who shall present a claim for proof; to the collection of all the assets of the bankrupt; to the ascertaining and liquidation of liens and other specific claims upon the estate; to the adjustment of priorities and conflicting interests between parties; to the marshalling and disposition of the