The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1899-02-20
LAW A BOON 70 bANkRUPTS
PRACTICAL WORKINGS OF NEW
FEDERAL INSOLVENCY ACT.
May Greatly Restrict Application of
state Attachment and Garnish-
mrnt >tatute>-Frauds ON Credit

The bankruptcy law passed by the last
congress, which applies To all states and
territories In tae Union and which is Fl0w
IN fGI operation in this state. promises to
effect 10 an unsupported extent the state
laws for the collection OF debts and the
protection Of creditors. Many Seattle
lawyers are OF the opinion that the at
tachment and punishment statutes will
be greatly restricted in their application
b. the Federal Law. and that suits sgo@-
Ing out OF frauds upon creditors VIII IN
tAe future % rare in the state courts.
Heretofore the sequel TO business fail
ure has always resemhi.d to a marked ex-
tent handicap hurdle race OK the credi-
tors. with the superior court as "A goal
and the estate of the bankrupt 5 "a prize
nrst come first served from the booty.
The creditor ilrst appr3sed OF the debtor )
shaky condition would file suit and attach
his property. thus precipitatiug the crash.
Then creditor after creditor would fic
suit and attach until the sheriff would
hold the property for debts many times
grsater than Its value.
4 long court trial would follow; the
prIoriiies OF the different attachments
would be questioned and disputed over,
and finally tae lucky creditors who We're
first Ia tie race would us paid IN fun a.
long As the money held out. Their less
ALERT competitors would oe left 10 mourn
their hardness
1t is claimed that the new bankruptcy
law VIII do away with such proceedings
toE ta,- reason that the Hing u the t{rSt
suit renders the deDtor a bankrupt within
tee meaning % the law, and allows any
Ct iHo remaining creditors 10 take tie
matter Into the United States court. where
under the law the estate can bc settled
and distributed eQuitaoly and at small
expense.
In the same way any attempt on the
part OF debtor IN give any creditor
preference y construed as an act Of bank
fuptcy under the law. and the offender
can he brought into court and compelled
10 gave up AL his property in satisfaction
II the Claims Of his creditors. The In
adequacy Of the state laws TO deal with
frauds by doctors has long been a source
of complaint among lawyers. who see in
the United States laws promise OF relief
~ speedy means.
Tie new law also provides what has
long been desired, relief TO hopeless Bank
Tupts. discouraged from even attempting
10 pay their debts by the apparent futiiitv
OF the task. Under the state law. only
debts accruing subsequent 10 ITS passage.
IN 1877, can De wiped out. all others must
t- paid. This. the lawyers say. is fer the
reason that no state has a right 10 pass
any law impalriug the obligation Of con-
however. and can therefore make and
has made. a bankruptcy law under which
the bankrupt can ahsolve himself Of ali
GabtS 80 matter when contracted
Up 10 last Thursday fhirty-one petitions
FOR Bankruptcy either voluntary or fn-
Voluntary. have been filed In the Seattle
+ tsiefAl court ne proportion or EpIDn-
tary md involuntary bankrupts is appar-
emily about the same. Most OF the yoluu~
tafy hsrkrupts seem 70 desire 20 b. rid
90 debts contracted in other states and Of
long standing Debtors are allowed under
the provisions OF the act to claim in all
cases the liberal exemptions provided by
the laws Of Washington. but must set out
IN their petitions for bankruptcy a com
rlete schedule Of their debts and assets
and OF all property claimed as exempt
No Bankruptcy cases are heard by the
court direct Judge Hartford has appoint
- ex-SurreEDe Judge John = U0yt com
missioner IN bankruptcy. tn list ali claims
take al testimony and make findings in
every case and report 70 the court which
has bat 60 examine and approve the COM
missioner = doinES
Under the lnw any person but no cor
p0TRttor may become a voluntary hank
FUp'. The restrictions upon involuntary
bankruptcy are greater Under this sec
tiuu ~ thc }sw any person except wage
Garner or tiler 81 the soil. any unincor-
rovat@1 company. or any mercantile or
manufacturing corporation may lie ad-
judged q bankrupt Il owing 81 1s.s or over
ard Being inSolyent. Private banks also
come "a under This section but not state
ar national banks
The small number of persons No Tar TAX
fng advantage - the voluntary tank-
TUpfcy provisions of he act IS som thing
~ r. surprise 70 r7ost lawyers II WIS
supposed that general rush would -.
made fer che court when the law went
into effect last ocfaa<r hut the expocta-
tlon ives uet realized