The New York herald., 1874-10-07
THE AMENDED BANKRUPTCY ACT.
Con1sc ation of Debts and the Distribu-
tion OF Bankrupt Property.

C0ndscati of Debts and the Dtstrfbu.
tion OF Bankrupt Property.
Yesterday case involving the constitutionality
or the recent amendment to the Bankruptcy law
came up for argument before Judge Blatchford, in
the United States District Court in the matter OF
NJ Remar Co. Under the amendment to the
law In question the bankrupts prorered to pay a
composition to their creditors OF ten per cent
in cash, and two subsequent payments Of ten per
cent each, secured Dy notes. one note being pay
able IN iour months and the other at eight months
Mr.. Campbell, or the firm OF Hilton, Campbell Il
Bell appeared on behalf OF certain creditors to
oppose the confirmation OF the profered compo-
stion by the Court. He contended that the re-
cent amendment by Congress 10 the Bank
ruptcy act was unconstitutional mas
much 1t provided for the connscatton
OF debt, and not Tor the distribution OF the BANK
rupt's property among his creditors, which was
the main and essential element OF all bankrup .cy
law The surrender Of such Dankrupt's property
was pTincipie kh9wn a. Lae earnest period ~ o. tne
render OF the bankrupt's property lor the beneft
OF his creditors, and, having made such surrender.
quent earnings small not become liable lor the
debts he had incurred up to the period Of his
bankruptcy. In Story's Commentaries 1t was
laid down that the general object OF all bank
ruptcy and insolvency law was, on The one hand,
20 secure to creditors an appropriation oi .
hand TO relieve honest ueo.0rs from being perpe-
tualiy bound to their creditors The amendment
" lue DAMN uPtCy IA" uiu NV iuini ohy VI suCSo
conditions. The debtors merely said that they
would pay q certain percentage upon their DEBTS.
Mr.. BoaTdman, on behalf OF the debtors, con-
tended that his learned friend. MI. Campbell, was
entirely mistaken in saying that no bankruptcy
law provided tor O composition. The law OF Eng
land provided Tor such a composition, and he read
section OF the English law to sustain his asser-
non. Under that law compositions were ire
quently effected by debtors with their creditors.
And what the meaning OF compositions 1t
meant in this connection. that the debtors bound
themselves TO pay the creditors In instalments,
sums less than they were originally bound to pay
them. In this case the composition provided for
satisfactory lndorsers upon the notes.
Judge Blatchiord asked how II was to be 1ound
out that the indorsers were satisfactory.
Mr. Buardman replied that the words 'satisfac-
tory indorsers'' In this case. though their names
were not set out IN the composition, meant per-
sons whose pecuniary responsibility was good,
and nothing more tnan that. AS TO the question
Campbell he (Mr. Boardmanl had say that it
was within the power OF Congress TO select sucn
machinery 1t chose eor the purpose OF giving
ef1ect TO the Bankruptcy law, and this mode OF
composition was just one OF the modes for giving
effect to the law
Mr. Campbell briefly replied to the argument Of
Mr.. Boardman. He contended that, under the
composition, the property OF the debtors would
revert back to them, and the creditors whom he
represented would tnen be lett TO some indefinite
remedy. If the debtors did not, at the end Of the
wnere were they TO be iound as they would then
have taken possession OF their property and proc
ably disposed ol 1t
Judge Blatcnlord, who said that the point was
an important one, took the papers and reserved
his decision.