The Caucasian. (Clinton, N.C.) 188?-1913, 1898-07-07
TINE DanxauPTcv Law.


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k6~~t-Is viii Provide . Csifsrsa s,.-
tssa of Bsakraps<y.
Pending the passage Of the confer
ence report on the bankruptcy bill By
the senate, Mr.. Nelson, in expls uation
Of the bill. said:
Al the last session Of Congress the
Senate passed . bankruptcy bill. IL
was In lis chief provisions . voluntary
bill. Ii contained provisions for to-
voluntary bankruptcy in two classes
OF cases-cases where . mao made Q
transfer Of his property With intent to
defraud his creditors and cases where
4 man transferred his property With
intent to prefer some Of bis creditors.
Those two grounds were stated in Ren-
erll terms, but were ample TO cover
those two classes Of cases.
When the bill went over 10 the
House, they adopted "a . substitute for
it substantially, with some mooi6ca-
tioos, what has been known for fears
- tie Torr.y bill. The bill came
back in that condition and went into
conference on the 3sd Of March last,
and We have been wrestling with it in
conference from that time until about
. week ago.
l may say, inasmuch Is | was to
some exteDt the author Of the Senate
bill that l always felt that in the matter
Of procedure it WAS not "a complete q
bill - it ought to be. IL left good deal
to be supplied BY rules OF court. The
House bill, on the other hand, contain.
ed elaborate provisions ~ to admins.
tratiOn and procedure. A good deal
Of 1t perhaps might have been we'll
left to rules Of court. The conferees,
however, concluded that it WAS per
haps best to adopt what are known as
the administrative and procedure fea-
lures Of the House bill.
The main contention between the
two Houses and between the conferees
Of the respective Houses was in re-
spect to three questions First, as to
the grounds Of involuntary bank.
ruptcy; next. Is to the Offenses for
which . bankrupt could be imprison-
ed; and, thirdly, what Limitation and
restrictions should be placed upon dis
charge.
The House bill contained nine diff
ferent classes Of grounds for bank
ruptcy, put under eight distinct heads,
one Of them, the fourth, containing
two grounds. Four OF those grounds
have been entirely eliminated by the
conference, and the other five have
been greatly modified. The FIVE
grounds for involuntary bankruptcy
agreed upon by the conferees are these
First, . transfer or concealment Of
property with intent to defraud ones
creditors;
Second, a transfer of property while
iosOlvent with intent to prefer one or
more creditors over the other;
Third, = preference through legal
proceedings, coupled with the fact that
the alleged bankrupt must be insol-
vent and that he has failed to remove
the embargo or preference that has
occurred through legal proceedings
1--we days before sale of his property
in the proceedings;
Fourth, where . man has made a
general assignment to his creditors :;
and,
Fifth, where a man has admitted
in writing his insolvency and his
Willingness to be put into bankruptcy
on that ground.
1t will be perceived that in respect
OF the last two grounds they are prac-
tlcally voluntary. II man makes no
general assignment to his creditors, he
can not be put into bankruptcy and
II man is in an insOlvent condition,
he has one of two options. He can
either go into voluntary bankruptcy or
be can make general assignment for
Tue b nrhc Of his creditors; in either
a his q 70 10 Hsr1S ;e<o
ruptcy and he gets his discharge.
The fifth ground, Of course. is purely
within his control. 1t is admitting bis
insolvency and his willingness to 20
into bankruptcy on that ground. In
other words, it amounts to this: The
man says, II do rot care about being
put to the trouble of going into bank
ruptcy. l admit 1 am insolvent, II
my creditors care about it, they can
put me into bankruptcy"
Practically, then, there are onIv
three grounds of involuntary bank.
ruptcy, and two of those-a transfer of
property to defraud creditors and a
transfer to preferred creditors-are
SUBSTANTIALLY included in the Senate
bill, though in more general terms.
These two grounds are, moreover,
wholly 1T the the option and under the
control of the bankrupt.
The only 9th ground is what is
termed prefere .ce by legal proceed
ings; that is, if a man is insolvent and
his creditors proceed against him by
attachment, and through such process
seek to take his property, in that case,
II ne Is not able to discharge those pro-
ceedlngs before a final sale on execu-
ton, he can be put into bankruptcy.
1t is to be observed in respect to this
ground, considered in connection with
other provisions of the bill, that the at
taching creditor can easily be deprived
OF his preference. II bankruptcy pro-
ceedings are instituted within four
months, his attachment is set aside and
the property that he has attached goes
into the general estate of tbs bankfu ut
Tor distribution among the creditors.
Hence, while there may seem to be an
apparent hardship in the eyes of those
who are opposed to involuntary bank
ruptcy In this case, yet there is, on the
other hand, a protection in it against
the attaching creditor, for he will be
SLOW to move when he knows that the
other creditor can put the man into
bankruptcy and vacate the attachment.
and he will have nothing left but the
expense of paying costs and attorneys'
fees.
Now, coupled with these grounds for
Involuntary bankruptcy which have
described is another thing that gives
color to the whole matter and taxes
away the harshest features of those
grounds. Under the House bill il a
man had committed one of the nine
classes OF acts Of bankruptcy, he could
be put into bankruptcy on the petition
OF MS creditors, even though he was
solvent. In the conference bill We have
MADE 1t . condition that no man, no
mater ~nat act OF bankruptcy he has
committed, can be put into bankruptcy
unless he is insOlvent,
Then we have adopted q new rule. a
new definition of insolvency. Under
the old bankruptcy law and at com
mon law . man was deemed insolvent
when he did not pay his debts in the
- ADvv