There is not any bankrupt law, technically so called, existing in New York; but there is a permanent insolvent law, enabling every debtor to be discharged from all his debts upon the terms and in the mode prescribed. The first general insolvent law of New York was passed in the year 1784, and alterations and amendments have from time to time been made, until the system attained all the consistency, provision, * and im- * 394 provement that the nature of the subject easily admits. (a)

Insolvent laws prevail throughout the Union, and constitute a system of an important and interesting character, and subject to diversified modifications, for the relief of the debtor. In the states of Maine, New Hampshire, Virginia, and Kentucky, they are confined to the relief of debtors charged in execution. In New Jersey, Delaware, Maryland, Tennessee, North and South Carolina, Georgia, Alabama, Mississippi, and Illinois, the insolvent laws extend to debtors in prison on mesne or final * process. In Massachusetts, New York, Connecticut, * 395

The same rule was declared in Van Raugh v. Van Arsdale, 3 Caines, 154, and it has repeatedly been recognized in England and Scotland, as well as in this country. See Doug. 170; 1 H. Blacks. 693; 2 Ibid. 553; 1 East, 6, 11; 5 Idem. 124; Lewis v. Owen, 4 B. & Ald. 654; 2 Bell's Comm. 689-691; Woodhull v. Wagner, Bald. C. C. U. S. 296. Van Hook v. Whitlock, 26 Wendell, 43. Bartley v. Hodges, 1 El. Best & Smith, 375.

(a) With respect to the operation, value, and policy of the general system of insolvent law, it is observed, by the chancellor and judges of the Supreme Court of New York, in a report made by them to the legislature, January 22d, 1819, in pursuance of a concurrent resolution of the two houses, that, "judging from their former experience, and from observation in the course of their judicial duties, they were of opinion that, the insolvent law was the source of a great deal of fraud and perjury. They were apprehensive that the evil was incurable, and arose principally from the infirmity inherent in every such system. A permanent Insolvent Act, made expressly for the relief of the debtor, and held up daily to his view and temptation, had a powerful tendency to render him heedless in the creation of debt, and careless as to payment. It induced him to place his hopes of relief rather in contrivances for his discharge than in increased and severe exertion to perform his duty. It held out an easy and tempting mode of procuring an absolute release to the debtor from his debts; and the system had been, and still was, and probably ever must be, from the very nature of it, productive of incalculable abuse, fraud, and perjury, and greatly injurious to the public morals." See, on this subject, supra, vol. i. pp. 419–422. It was stated by the chief justice, in giving the opinion of the Supreme Court of the United States, in Sturgess v. Crowninshield, 4 Wheaton, 122, that the insolvent laws of most of the states only discharge the person of the debtor, and leave his obligation to pay, out of his future acquisitions, in full force. The Insolvent Act of Maryland, of 1774, subjected to the former debts of the insolvent his future acquisitions by descent, gift, devise, bequest, or in a course of distribution. See 5 Harr. & Johns. 369.

Rhode Island, Pennsylvania, Ohio, Indiana, Missouri, and Louisiana, they are still more extensive, and reach the debtor whether in or out of prison. (a) The insolvent laws of New York enable the debtor, with the assent of two thirds in value of his creditors, and on the due disclosure and surrender of his property, to be discharged from all his debts contracted within the state, subsequently to the passing of the Insolvent Act, and due at the time of the assignment of his property, or contracted before that time, though payable afterwards. (b) The creditor who raises objections to the insolvent's discharge is entitled to have his allegations heard and determined by a jury. The insolvent is deprived of the benefit of a discharge, if,1 knowing of his insolvency, or in contemplation of

(a) The statutes of Connecticut, Ohio, New Jersey, Pennsylvania, Illinois, North Carolina, Tennessee, Georgia, and Missouri, for the relief of insolvent debtors, go only to discharge and exempt the person of the debtor from imprisonment. Statutes of Connecticut, 1838, p. 270. Statutes of Ohio, 1831. Statutes of Illinois, 1838. R. L. of Missouri, 1835, p. 328. Prince's Dig. of Statutes of Georgia, 2d edit. 1837, p. 287, 293. Purdon's Dig. of Penn. Laws, 514. Elmer's Dig. 255. R. S. of New Jersey, 1847, tit. 9, ch. 1, 2, 3, 4, contains the whole system of provisions for the relief of debtors. North Carolina R. S. vol. i. 320. Statute Laws of Tennessee, p. 390. This is understood to be the limitation of insolvent laws in the greater number of the states. See supra, vol. i. p. 420. The new insolvent law of Massachusetts was passed in 1838, granting a complete discharge to debtors, whether in or out of prison, who comply with its provisions. The application for relief may be made by the debtor, or by certain of his creditors. It applies, of course, only to contracts made subsequent to its passage, and it resembles, in several of its features, the United States Bankrupt Act of 1800, and appears to be cautiously and wisely digested. See infra, p. 522, note. In Vermont, it is even a constitutional provision that the debtor shall not be continued in prison where there is not a strong presumption of fraud, after delivering up and assigning, bonâ fide, all his estate for the use of his creditors.

(b) Laws of N. Y. April 12th, 1813; February 28th, 1817; February 20th, 1823; and April 9th, 1833. Under the English Insolvent Debtor's Act, the discharged insolvent becomes liable to a surety, who pays for him, after his discharge, an annuity due before. Abbot v. Bruere, 5 Bingham (N. C.) 598. The insolvent laws of New York have been redigested and amended by the N. Y. Revised Statutes, vol. ii. pp. 15-23; but the Insolvent Act of April 12th, 1816, is declared to be in force although consolidated in the Revised Statutes, vol. ii. pp. 15-23. See N. Y. R. S. vol. iii. p. 647. It appears, notwithstanding that dictum of the revisers, that the General Insolvent Act of 1813, and all the Acts amending the same, are in force only in a very modified, if in any degree; for under the General Repealing Act, N. Y. R. S. vol. iii. p, 133, sec. 115, and Ibid. p. 154, sec. 549, so much of the Insolvent Act of 1813, and the Acts amending it, as are not, and also that are, consolidated and reënacted in the Revised Statutes, are repealed! The system has been improved by more effectual provisions against fraud and abuse.

1 At any time within two years before petitioning. Laws of 1854, c. 147.

it, he has made any assignment, sale, or transfer, either absolute or conditional, of any part of his estate, or has confessed judgment, or given any security with a view to give a preference for an antecedent debt to any creditor. (c)2 The discharge applies to all debts founded upon contracts made within the state, or to be executed within it; and from debts due to persons resident within the state at the time of the publication of notice of the application for a discharge; or to persons not residing within the state, but who united in the petition for his discharge, or who accept a dividend from his estate. The discharge likewise applies to all liabilities incurred on contracts made after January 1st, 1830, by making or indorsing any promissory note or bill of exchange prior to his assignment, or incurred by reason of payments by any other party to the paper, made prior or subsequent to the * 396 assignment. The discharge likewise exonerates the insolvent from arrest and imprisonment thereafter, upon all debts existing prior to the assignment. Any fraud whatever, in relation to any proceedings under this statute, or its requisitions, renders the discharge null and void. (a) 1

(b) N. Y. Revised Statutes, vol. ii. p. 20, sec. 24. By the laws of Louisiana, an insolvent debtor cannot give preference. Hodge v. Morgan, 14 Martin (Louis.) 61. By the Insolvent Act of Pennsylvania, of 16th June, 1836, the insolvent debtor is deprived of the benefit of the Act, if it appears that the insolvency arose from losses by gambling, or by the purchase of lottery tickets.

(a) N. Y. Revised Statutes, vol. ii. pp. 15-23. The fraud that goes to defeat the relief, under the insolvent laws of Pennsylvania, is the fraudulent concealment or con

The following decisions are under the bankrupt law of 1841; they may also have a bearing upon the effect of assignments under the insolvent laws. An assignment by a debtor in contemplation of bankruptcy, and to give preferences, is not absolutely void, but only so as to the assignee appointed under the Bankrupt Act. Seaman v. Stoughton, 3 Barb. Ch. 344.

In Beavis v. Garner, 12 Ala. 661, it was held, that the assignee of the bankrupt acquired no right to property of which the latter had made a fraudulent assignment, as the legal and equitable rights of the bankrupt, and those rights only, passed to the assignee.

If the assignment be made by the debtor, in consequence of the act of the creditor, it is not voluntary and invalid under the bankrupt laws. Van Casteel v. Booker, 2 Wels. H. & Gor. 691.

To show a payment by the debtor to be in contemplation of bankruptcy, something more than insolvency must be shown; and to be voluntary, the payment must originate with the debtor, the first step being taken by him, and not the creditor. In re Rowell, 21 Vermont, 620. An assignment, giving preferences, is an act of bankrupety. Ex parte Breneman, Crabbe, 456.

1 See Lyon v. Marshall, 11 Barb. (N. Y.) 241; Bell v. Leggett, 3 Seld. 176; Caryl v. Russell, 3 Kernan, 194. By 12 & 13 Vict. c. 106, an arrangement may be entered into between

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* (2.) There are other provisions belonging to the insolvent system which are exclusively applicable to imprisoned debt

veyance of the estate, and not the fraudulent means by which the insolvent acquired possession of property, nor his unprincipled and extravagant waste of it. Case of Benney, 1 Ashmead, 261. In England, by the statutes of 1 Geo. IV., 3 Geo. IV., and 5 Geo. IV., the system of their insolvent laws was remodelled and greatly improved, and placed under the jurisdiction of the insolvent's court. The Insolvent Acts in England were consolidated by statute 7 Geo. IV. c. 57, and greatly amended by statute of 1 & 2 Vict. c. 110. They apply to persons in actual custody for debt, and the estate is vested in assignees, and the prisoner or his creditors may petition for an order to vest his estate in assignees. The main object of the last statute was to abolish imprisonment for debt on mesne process, except where fraud can be shown. It is, in many of its provisions, analogous to their bankrupt system. Voluntary preferences, by the insolvent, before or after imprisonment, are declared fraudulent. For debts fraudulently, improvidently, or maliciously contracted, and for damages arising upon torts, or acts ex delicto, the insolvent is liable to close imprisonment, and to be deprived of his discharge for a period not exceeding two years. The discharge only protects the person from imprisonment, and does not protect the future acquisitions and property of the debtor; and the Act enables the creditor to reach such property, whether in the funds, or existing in choses in action, or held in trust. In 1844, by 7 & 8 Vict. ch. 96, the English insolvent law was further meliorated and improved. Imprisonment on execution was by statute abolished as to all debts not exceeding £20; and every debtor may be released from his debts upon surrender of his property, and without any imprisonment, be his debts of whatsoever amount, if he applies for the benefit of the Act while at liberty, and before execution. The assignment of the debtor's property. includes all his estate, real and personal, at home and abroad, which is vested, or which may in future revert, descend, or come to him, by purchase, will, or otherwise, before he shall have obtained the final order of discharge, and also all debts due to him before such order, (wearing apparel, bedding, and implements not exceeding £20, excepted.) It was further declared, that after the final order to be given on the fair surrender of his property, the fature acquired property of the debtor was not to be taken. But much complaint is made in England, by merchants and traders, against the operation of their bankrupt and insolvent laws, as being a fruitful source of fraud and abuse; and the true cause of the evil is said to be the abolition of arrest on mesne process. It is proposed to restore arrest on mesne process, guarding it carefully against abuse. A bill for that purpose was introduced into Parliament in 1846. It is likewise proposed in the English discussions, and with much plausibility, if not reason, to abolish all process against goods and chattels, except in bankruptcy, and, as a substitute, to extend the bankrupt laws to all classes of debtors. See the London Law Review for November, 1846, vol. v. pp. 87-99, where the subject is considered at large. See vol. i. p. 422, as

an insolvent trader and his creditors, releasing him from his obligations, which shall be binding on all the creditors if signed by six sevenths in number or value. See Tetley v. Taylor, 8 E. L. & Eq. 370; McNaught v. Russell, 38 Idem. 520. Such an arrangement must dispose of the debtor's whole property without reservation. March v. Warwick, Ibid. 288. See some strictures on this provision in 15 Law Review, 49.

In 1849, the law of bankruptcy was further amended and consolidated by the passage of the "Bankrupt Law Consolidation Act," 1849, 12 & 13 Vict. ch. 106. Chitty's Statutes. I. 203. And again amended by an Act of 17 & 18 Vict. ch. 119.

ors, who may, in all cases free from fraud, be discharged from prison, and exempted from future arrest, without the hazard of any constitutional objection. Imprisonment is no part of the contract; and simply to release the prisoner does not impair the obligation, but leaves it in full force against his property. (a) *The English process of execution against the body, (and *398 which we have generally followed in this country,) is intended to confine the debtor until he satisfies the debt. It is not a satisfaction strictly, but a means to procure it; though the language of the writ directs the defendant to be imprisoned to satisfy

to the effect of the cessio bonorum, in the civil law, and to which our insolvent laws are analogous. The learned commentator on the Partidas, (Greg. Lop. Gl. 3,) as cited in a note to the Institutes of the Civil Law of Spain by Aso and Manuel, (b. 2, tit. 11, th. 3, sec. 2, n. 49,) says that the future acquirements of the debtor would not be liable ander the cessio bonorum in the case of a compulsory cession, and in any case sufficient must be left for the debtor to live upon, ne egeat.

The laws of the individual states on the subject of bankrupt and insolvent debtors have hitherto been unstable and fluctuating; but they will probably be redigested, and become more stable, since the decisions of the Supreme Court of the United States have at last defined and fixed the line around the narrow enclosure of state jurisdiction. The commissioners appointed to revise the Civil Code of Pennsylvania, in their report, in January, 1835, pp. 52, 53, complain, in strong terms, of the existing state of things. Congress will not exert their constitutional power, and pass a bankrupt law, and no state can pass a bankrupt or insolvent law, except so far as regards their own citizens; and even then, only in relation to contracts made after the passage of the law. Foreign creditors, and creditors in other states, cannot be barred, while state creditors may be. The former preserve a perpetual lien on after-acquired property, except so far as the statutes of limitations interpose. State bankrupt and insolvent laws cannot be cherished under such inequalities. A difficulty exists in Massachusetts in respect to their attachment and insolvent laws. The process of attachment of the goods of the debtor on mesne process, in that state, has existed since 1789, but their insolvent law dissolves the attachment, on the debtor being placed under the operation of that system, either by his voluntary act or by the act of his creditors, and which system aims at equal distribution among the creditors. Creditors suing in the federal courts are said to hold their attachments without having them dissolved, as they are in the state courts by the force of the provision in their insolvent system. The Law Reporter for March, 1846, vol. 8, p. 524.1

(a) Mason v. Haile, 12 Wheaton, 370. Marshall C. J.; 4 Wheaton, 201. Beers v. Haughton, 9 Peters U. S. 329. The insolvent law of New York, in its application to imprisoned debtors, and as it existed prior to April, 1831, and April, 1840, may be seen in the N. Y. Revised Statutes, vol. ii. pp. 24, 39. But since imprisonment for debt in New York is now essentially abolished, a detail of the provisions of that system is no longer requisite.

1 But, by Act of Congress, 1848, ch. 14, attachments in the courts of the United States are put upon the same footing as in the state courts.