BANKRUPTCY

1. The state or condi- tion of one who is a bankrupt; amenability to the bankrupt laws; the condition of one who has committed an act of bankruptcy, and is liable to be proceeded against by his cred- itors therefor, or of one whose circumstances are such that he is entitled, on his voluntary application, to take the benefit of the bank- rupt laws. The term is used in a looser sense as synonymous with "insolvency,"— inability to pay one's debts; the stopping and breaking up of business because the trader is broken down, insolvent, ruined. See 2 Story, 354, 359. 2. The term denotes the proceedings taken, under the bankrupt law, against a person (or firm or company) to have him adjudged a C D bankrupt, and to have his estate adminis- E tered for the benefit of the creditors, and di vided among them. 3. That branch of jurisprudence, or system of law and practice, which is concerned with the definition and ascertainment of acts of F cures his future acquired property from a lia- bankruptcy and the administration of bank- bility to the payment of his past debts. Web-rupts' estates for the benefit of their credit- ster. A bankrupt law is distinguished from the ordi- nary law between debtor and creditor, as involv- ing these three general principles: (1) A sum- mary and immediate seizure of all the debtor's property; (2) a distribution of it among the cred- itors in general, instead of merely applying a por- tion of it to the payment of the individual com- plainant; and (3) the discharge of the debtor from future liability for the debts then existing. The leading distinction between a bankrupt law and an insolvent law, in the proper technical sense of the words, consists in the character of the per- sons upon whom it is designed to operate,-the former contemplating as its objects bankrupts only, that is, traders of a certain description; the latter, insolvents in general, or persons unable to pay their debts. This has led to a marked separa- tion between the two systems, in principle and in practice, which in England has always been care- fully maintained, although in the United States it has of late been effectually disregarded. In fur- ther illustration of this distinction, it may be ob- served that a bankrupt law, in its proper sense, is a remedy intended primarily for the benefit of creditors; it is set in motion at their instance, and operates upon the debtor against his will, (in in- vitum,) although in its result it effectually dis- charges him from his debts. An insolvent law, on the other hand, is chiefly intended for the benefit of the debtor, and is set in motion at his instance, though less effective as a discharge in its final re- sult. 5 Hill, 327. The only substantial difference between a strict- ly bankrupt law and an insolvent law lies in the circumstance that the former affords relief upon the application of the creditor, and the latter upon the application of the debtor. In the general char- acter of the remedy, there is no difference, howev- ors and the absolution and restitution of bankrupts. As to the distinction between bankruptcy and insolvency, it may be said that insolvent laws op- erate at the instance of an imprisoned debtor; bankrupt laws, at the instance of a creditor. But the line of partition between bankrupt and insolv- G ent laws is not so distinctly marked as to define H what belongs exclusively to the one and not to the other class of laws. 4 Wheat. 122. Insolvency means a simple inability to pay, as debts should become payable, whereby the debtor's business would be broken up; bankruptcy means the particular legal status, to be ascertained and declared by a judicial decree. 2 Ben. 196.

The state or condi- tion of a bankrupt. See INSOLVENCY,

(111) the bankrupt is protected from proceedings against him by his creditors during the bankruptcy.* BANKRUPT, (in resolution of stockholders of company). 41 Conn. 502. (of a drover, in slander). 2 Day (Conn.) 495. & Sel. 287. (of a merchant, in slander). 1 Mau. erty of an insolvent person, firm or corporation, among his or its creditors. In England, however, the process of administering the property of an insolvent corporation or company is now called "windingup" or "liquidation" (q. v.) The law of bankruptcy is founded on the principle, that when a man becomes insolvent, the property then remaining to him rightfully (112) made the petition, founding it upon one or more alleged acts of bankruptcy, such as are recited in § 3, infra. 23. Bankrupt laws. - There have been three general bankrupt laws in force in the United States at different periods, viz.: the act of Congress of 1800; that of 1841, and that of March 2d, 1867, amended by act of June 22d, 1874, and since repealed. Under the act of 1867, and the amendment above recited, the following were the grounds upon which a person, firm or corporation could be proceeded against at the instance of his or its creditors: (1) departure from the State of the bankrupt's residence with intent to defraud creditors; (2) remaining absent from the State with such intent; (3) concealment to avoid service of process; (4) concealment or removal of property to prevent its being attached, &c.; (5) making an assignment or other transfer of property with intent to delay, defraud or hinder creditors; (6) arrest in a civil action for $100 or more, the claim being one provable in bankruptcy and the process of arrest remaining in force for twenty days or longer; or imprisonment for more than twenty days in a civil action on contract for $100 or more; (7) gifts, payments or other transfers of money or property, or the confession of a judgment, or procuration by the debtor of the taking of his property on legal process for the purpose of giving a preference to certain creditors, &c., or with intent to defeat or delay the operation of the bankrupt law; (8) fraudulent stoppage of payment of commercial paper, or continued suspension of payment of such paper for a period of forty days, by a bank, banker, broker, manufacturer, merchant, miner or trader; (9) failure for forty days, by a bank or banker to pay a deposit lawfully demanded. 24. Petition for adjudication. - In England, a bankruptcy generally consists of the following steps: The filing by a creditor in the appropriate court of a petition, stating that the debtor is indebted to him in the sum of £50 at least, that he has committed an act of bankruptey, and praying that he may be adjudicated a bankrupt. (Bankr. Act, 1869, 26. When the act of bankruptcy consists of non-compliance with a debtor's summons the issue of the debtor's summons may be considered as the first step in the bankruptcy.) The petition is accompanied by an affidavit verifying the statements contained in it. (Id. 80.) A time is then apwinted by the registrar of the court for the hearing of the petition (Bankr. Rules (1870), 34) and a sealed copy of the petition, indorsed with notice of the time appointed for the hearing, is served on the debtor. (Id. 60.) If the debtor intends to oppose or show cause against the petition, he gives notice accordingly. Bankr. Rules (1870), 36. § 5. Hearing of petition. At the hearing, either the petition is dismissed (Bankr. Act, 1869, 8, as where the petitioning creditor fails to prove the statements in the petition), or the proceedings are stayed (as where the debtor gives security for the payment of the alleged debt, and the creditor is left to establish it by proceedings in the ordinary courts), (Id. § 9) or the debtor is adjudicated bankrupt. 26. Adjudication. On the debtor being adjudicated bankrupt, all his property vests in the registrar of the court (Id. § 17), and all rights against him (except those arising from torts, &c.,) must be enforced in the bankruptcy (Id. 12), and therefore no creditor can bring an action against him. But every creditor, before he can take part in the proceedings or receive dividend, must prove his debt by making an affidavit in a particular form. Bankr. Rules (1870) 67. See PROOF. a 7. First meeting. As soon as may be after the adjudication, a meeting of the creditors who have proved their debts is held, for the purpose of appointing a trustee and a committee of inspection; this is called the "first meeting." Bankr. Act, 1869, 22 14, 16. 8. Trustee. On the appointment of the trustee being ratified by the court, the property of the bankrupt passes from the registrar and vests in the trustee without any transfer (Id. 17); his duty is to discover, take possession of, manage, realize and distribute the property among the creditors, subject to the directions of the committee of inspection, the creditors and the court. Id. & 20. 47.) 9 Close of bankruptcy. When the property has been realized and distributed, an order is made that the bankruptcy has closed. (Id. & No further proceedings (except for granting the bankrupt his discharge, and for enforcing the rights of the creditors against the bankrupt if he has not obtained his discharge,) (In re Pettit's Estate, 1 Ch. D. 478; In re Westby, 10 Ch. D. 776, in both which cases the question arose with reference to property acquired by the bankrupt after the close of the bankruptcy,) can then be taken in it, and the trustee in proper cases obtains his release. Bankr. Act, § 51. 10. Classification.---Bankruptcy is usually classed under modes of acquisition (2 Bl. Com. ELF-ARROWS.-Flint stones sharpened of each side in shape of arrow-heads; made use of in war by the ancients Britains, of which several have been found in England, and greater plenty in Scotland, where, it is said, the common people imagine they drop from the clouds.- Jacob. ELIGIBLE TO OFFICE, (defined). 15 Ind. (in a State constitution). 15 Cal. 117; 327. 3 Nev. 566.

The state of being actually or legally bankrupt. The act or process of becoming a bankrupt. Complete loss; -- followed by of.

A legally declared or recognized condition of insolvency of a person or organization. | a rule in Tycoon where if the top player does not get first place that round, they instantly get last place