The Evansville journal. [volume] (Evansville, Ind.) 1866-1870, 1867-04-19
Business Under the Bankruptcy Bill.
xJErorr,, the NJ Y Eipa neial 4 rot.fcla Il


Bankruptcy bill passed by the Thirty
ninth Congress, was begun in the first
days of the session of its successor, but as
the Fortieth Congress has adjourned with
<ou. taking action upon the matter, it be-
com eS the cOnsmerciai community to pre-
pare themselves for the effect upon their
financial relations and general policy of
this most seri. us and important law. $50
By the terms of the act, it was provided
afed by the act. it should 20 into enect ina-
mediately upon its approval by the Presi-
dent; but the fist day of June. 1851. was
ings under the act should be commenced.
This last prOviso seems 10 have generated
an impression that the act has as yet no
M rcial community. But this is very
serious mistake, and one which 1t be.
hooves all persons engaged in business,
large and necessarily confidential opera
tions OF a traffic Of any kind in such a
community as this metropolis, must care
The bankrupt system is directly aimed
fat the right Of an insoivents creditor max
mon law and under our State statutes is
permitted. There is of course a difficulty
In some cases In enforcing this principle.
state Of afnsolvencv. When, therefore,
shall a preference be consfdes ed as made
fraudulent under the act? The bill nov
passed makes the period four months be-
forethe commencement of the ankrupt-
The LIST of June is noE two months of.
Under the act q petition of bankruptcy
may be filed, and proceedings commenced
in the case of any firm or Individual in
/ New York within two mouths from this
date. These proceedings may be directed
to procuring either a voluntary or an In
voluntary bankruptcy; and in either case,
transactions in which the future bank
rupt is at this moment engaged will come
For it Is provided in Section Is. under the
head of preferences and Fraudulent Con-
80, under the head of 'Involuntary Bank
ruptcy, that transactions which may
have taken place within four months
proceedings in bankruptcy" shall be
brought under the purvfew of the COM
nIissary, and shall materially affect the
settlement of the case. It will be seen,
therefore, that ever since the first week in
February, 1867, merchants and others
sword of a law, which may be brought
| first week 81 June next = and fhis not
Tor BE aorming whatare universally recog.
niZed as acts of fraud, but In the case also
q persons who desire simply 70 conform
financial honor at all the large centers of
American trade and commerce, to-wit:
pay up or secure. in view of insolvency.
TO make the matter clear, let us take
case. On the 18th of June next, We viii
say, proceedings in bankruptcy will be
comp enced against firm now doing
business in New York. On the 18th of Feb
ruary last, this firm, we will suppose, con-
tracted confidential debt with another
firm, there having for long time existed
between the two firms reciR ocal relations
of service IN tn this Nay Ten DAYS aft t
debtor firm deposits with the creditor firm,
bank or railway stock in amount sufi1c1ent
event of disaster to the borrowers. In the
second week of June, proceedings, as We
before suggested are 70 be commenced In
the course of the proceedings, it comes to
light that the transaction took place to
the security was deposited, the debtors
estate was already in an embarrassed con-
dition. The provisions of the act are spe-
.under the shesd of a : fraaduaent~ convey
ances TForssays thessaet In section IS:
contemplation of insolvency, within four
months before the filing of the petition by
or against him, with ay1ew GO give pref
erence TO any creditor or person hav-
ing u claim against him, or who is under
any liability for him, eprocures any part of
his property to be attached, sequestered. or
seized on execution, or makes any pay
ment, pledge, assis nment, transfer, or con-
veyance of any part of his property, either
directly or. indirectly, absolutely or condi- ]
tionally, the person receiving such pay
ment. pledge, assignment, ira Rsfer, or con-
veyance, or to be benefited thereby, or by
such attachment, having reasonable cause
to believe such person is insolvent, and
that such attachment, payment, pledge,
assignment, or conveyance, Is maoe III
fraud of the provisions of this act. the
same shall be void, and the assignee may
recover the property, or the value OF II,
1rom the personso receiving it, or. so TO be
benefited. Es~s=~r
And a little further on, the act defines
fraud by adding that if such sale. asSlgn-
ment, transfer, or conveyance IS not mace
in the usual and ordinary course of bust
ness of the debtor, that fact shall be pTfnad
fdcie evidence of fraud. While in another
section it is also provided that if the cred
itor accepts such preference, having rea-
sonable cause to believe that the security
was pledged in contemplation of insolven-
cy, his claim shall be disallowed by the as
signee, etc.
ueIS can pc lutte uouDl, We LnInA, snaI
will in many cases be great difficulty in
escaping such action in the Commissary