The county record. [volume] (Kingstree, S.C.) 1885-1975, 1898-11-10
THE BANKRUPT LAW.
Valuable Information as to the Workings OF
the New Law.

Mai. James F. Hart, q careful and
accurate lawyer, has furnished the
Yorkyille Enquirer with timely and i'm
portant information as to the signiti-
canoe and operation OF the new bank
rupt law. This article Will prove in
terestipg TO the public generally, and
especially to individuals and firms who
arc III debt. Here is what Maj. Hart
says: The bankrupt law, recently en-
acted by Congress, is now i'll full effect,
and available to all who may seek its
benefits. Its provisions seem to be
but little understood, as the press
generally has not given much attention
TO its legal features. The main pur-
pose of the law is to provide the way to
close UP the business of such persons
as are hopelessly irsolvent, give their
creditors a ratable distribution OF the
assets in hand, (reserving the State
homestead exemptions to the bankrupt J
and then grant a5solution for the
balance of the Indebtedness. When
there has been no dishonesty or fraud,
the mode of obtaining the benefit OF the
act is speedy and inexpensive.
A secondary purpose Of the act Is to
force into bankruptcy, and thereby
compel distribution of the assets OF
any person who. being insolvent, Is
misusing or fraudulently applying his
means. Insolvency, in the present act,
has q new and more liberal definition
than has usually been given 1t, and no
person is to be adjudged insolvent who
has sufficient property, at fair valua-
ton, to pay his debts, exclusive ofsuch
property as he may have conveyed away.
The effect of the law is the feature that
will attract the widest attention. How
far it supercedes State insolvent laws,
such as assignments for benefit of cred
itors and releases by such means does
not seem to be fully agreed.upon. But
as to partnerships, an assignment
would be ascribed as an act Of bank
ruptcy, and the assignors forced to set
tie their Indebtedness under the terms
of the bankrupt act, for most obvious
reason.
Under the decisions of our supreme
court, all partnership assets are given
exclusively to the partnership creditors;
and these creditors, if not fully paid
then come in ratably with the individ-
ual creditors to share The individual as
sets. The bankrupt law provides, how
ever, q different rule for distribution,
and gives partnership assets to partEer-
ship creditors, and individual assets to
individual creditors, with the right to
each class to participate in any surplus.
Individual creditors of partnership,
of course, would not stand by and per-
NIT distribution under the State as
sisnment law when they can get O
better provision under the bankrupt
law. But aside from this, it seems to
6e the better legal opinion that, as un-
der the Federal constitution Art. L.,
Sec. 10) 'No State shall pass any law
impairing the obligation of contracts, "
but the right to establish IAN uniform
system of bankruptcy. (Art. /, Sec
s. is reserved for the United States
Congress this remedy. when enacted.
must supercede and diSplace all State
insolvent laws.
So long as Congress failed to exercise
the power to adopt the uniform" sys.
tenn for the whole Union, each State
exercised the right of providing its own
system OF relief for jnsolvents. But
the constitutional system having been
provided, the State systems are super
ceded. This view seems to be the log
ical one, and, If correct, the enactment
of the bankrupt law has produced an
unexpected and startling influence on
State laws. How to obtain the bene-
fits of the bankrupt law can better be
ascertained by interested persons con-
sulting their lawyers. But, briefly
stated, proceedings, are commenced by
petition to the United States district
court; and after this most of the pro-
ceedings are before local referees
appointed by the district judge, one or
more for each county. Trustees are
appointed to take charge or the assets
and convert into money. The fees al
lowed are so exceedingly small that
there will be found difficulty in secur-
igg suitable persons to fill appoint
ments of referees and trustees.
Iho !sw is full in its directions as to
the minor details of the process Of
bankruptcy, and these will not interest
the public. But altogether. it pre-.
sents wise, liberal and humane meth
cd by which the stihed business en-.
ergy of many who went to the wall
uader the grinding depression of the
last ten years, may be released and
given opportunity for new expression
in the business world. And in this
view, it is not only blessing to the
unfortunate, but boom to the whole
eountry