^ .^^ii^< IMAGE EVALUATION TEST TARGET (MT-3) // V // ^\^ "^ 1,0 1.1 ^|28 |25 Ui Uii i: ■^ 136 ii 12.2 us 14.0 2.0 L25 1111.4 U m <- Z Hiotographic Sciences Corporation » 23 WEST MAIN STREET WEBSTER, N.Y. 14580 (716) 872-4503 4 , • , V CIHM/ICMH CIHM/ICMH ^«9 Microfiche Collection de Series. ■ microfiches. [g] Canadian Institute for Historical Microreproductions / Institut Canadian da microraproductions historiquas \ ^ %■ Tachnical and Bibliographic Notaa/Notas taeliniquaa at bibliographiquaa Th< to Tha Instituta haa attamptad to obtain tha baat original copy availabia for filming. 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Un dee symboles suivsnts apparattra sur la darnidre image de cheque microfiche, selon le cas: le symbols -^ signifie "A SUIVRE", le symbols ▼ signifie "FIN". IMaps, plates, charts, etc., may be filmed et different reduction ratios. Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: Les cartes, planches, tableaux, etc., peuvent Atre f llmAs A dee taux de reduction diff Arents. Lorsque le document est trop grand pour Atre reproduit en un seul clichA, 11 est filmA A partir da I'engle supArieur gauche, de gauche A droite, et de heut en bas, en prenant le nombre d'images nAcessaire. Les diagrammas suivants illustrent la mAthode. 12 3 1 2 3 4 5 6 B THE JPBJ* COMMENTARIES G ON THE PEESENT BANKRUPT ACT, IN A SERIES OF LETTERS, AODRBflSBD TO THE EDITOR OF THE MORNING COURIER. JPBINTBD BY LOTBLL AND GIBSON, ST. NICHOLAS 8TBBHT. PpjCB, 7^D. % ,., ,i- ' • ■? * t * ^AttilS-, -,i -..VV BDUDlSiQDE FAUTBUl .\ COMMENTARIES <« THE PRESENT BANKRUPT ACT. ,,, *"i";v)-f'''v No. I. :- f';;;.; ■";;! oi TO THE EDITOR OF THE MORNING COURIER. |3 Sm, — It is generally anticipated that considerable amendments will be proposed, if not made law, before the close of another Session of the Provincial Parliament. It may be advantageous to the public generally to become a little better acquainted with the details of an Act of such vital importance to them; and it may be that a few commentaries on the system, put forth by one who has watched the practical working of it, may be of use to the future framers of any amendment which may be brought forward. I, however think, that a second series of amendments will only add to the present incomprehensible reading of the Act of 9th December, 1843. A new Act is what is required in this country, and so framed that Judge, Lawyer and Assignee will have no difficulty in at once compre- hending what part is to be performed by each in the ceremony. , ;w - , ,, \ I ^ 4 COMMEN'f ARIES 03* One very great error connected with the present system is the taking up of a case in Bankruptcy by one Judge — the first mretihg and ai4>oiiitlii]tent of Assignee by another — the second meeting for examination of Bankrupt by a third, &c. I am of opinion that it is a matter of vital importance to all concerned in a case of Bankropti:^ that the Goip^issi|n sln^rbe issued and the whole proceedings conducted to completion by one Judge, I have been witness to a contestation* commenced and pretty far entered into, by the At- torneys for Bankrupt and Creditors before one Judge, carried to an adjourned mq^ng before another, who" had to be informed by the Attorneys of the details of proceedings had before Jiis colleague* Common sense dictates the folly and expense of such a course. An able Lawyer, having fifty oases to attend to, and having progressed therein to a certain- point, becomes thoroughly conversant with the subject, which, being impressed on his memory, he can at any time, (with the assistance of his notes) take up, and proceed with bis pleading or whatever it might be. So with our worthy Judges in adhering to the system of going through with a case in^ Bankruptcy. A Lawyer transfers a suit to another Lawyer; he is obliged to explain his memoranda and proceedings; the same requires to be done in the Bank* rupt Court by the Attorneys to the Judge, u- f- ;: -v; Before proceeding to sundry details in regard to the Sheriff's department — Biailiff's fees — the nullity of rule* taken out in the Bankrupt Court against Bailiffs em- ployed by the Sheriff— Bailiff's bills taxed by the Sheriff — the irregularity of fees allowed to Guardians — general character of Guardians of Bankrupt Effects — ( / TUK BANKRUPT ACT. length of time q£ Efibcts being under charge of Guar^- dians — liability of Sheriff in case of fire where no Insurance exists^-duty of petitioning Creditor to see that Insurance is effected on Personal and Heritable Property previous to being taken possession of by the Sheriff— Sheriff's Bailiffs disposing of Bankrupt Effects by Auction— consequences of, to the Creditors, &c.> &c. — I shall bring under notice — Seotion V. — " And be it enacted, That if any such Trader, so summoned as aforsaid, shall not come before the Judge or Commissioner, at the time appointed, (having no lawful impediment made known to, and allowed at the said time by the Judge or Commissioner,) or if any such Trader, upon his appearance to such summons, shall refuse to admit the demand, and shall not make a deposition in the form herein before men- tioned, that he believes he has a good answer to such demand, then, and in either of the said cases, if such Trader shall not, within twenty-one days after personal service of such summons, pay, secure, or compound for the demand, to the satisfaction of his Creditor, or enter into a bond with securities to the satisfaction c£ BR SIGNING ADMISSION FOR TUB DEMAND, BUT HOT OOMPLTINO WITH THE OTHER REQUIREMENTS. Section VIII. — " And be it enacted, That if any such Trader, so summoned as aforesaid, shall, upon his said appearance, sign an admission only for part of the demand, in the form aforesaid, and shall not make a deposition, in the form hereinbefore required, that he believes he has a good defence to the residue of the said demand, then, if such Trader, as to the sum so admitted, shall not, within twenty-one days next after the fyling of such admission, pay, or tender or offer to pay, to his Creditor the sum so admitted, or secure and compound for the same, to the satisfaction of his Creditor, and as to the residue of such demand, shall not, within twenty-one days after personal service of such sum- mons, pay, secure, or compound, for the same, to the satisfaction of his Creditor, or enter into a bond, in such sum, and with two sufficient securities as the Judge or Commissioner shall approve of, to pay what- ever sum shall be recovered in any action which shall have been, or shall thereafter be, brought for the recovery thereof, together with such costs as shall be given in that action, every such Trader shall be deemed to have committed an act of Bankruptcy on the twenty- second day after the service of the summons: Provided a Commission of Bankruptcy shall issue against such Trader within two months from the fyling of the said affidavit." , , , 10 COMMENTAtUES ON TRADER SION1N3 ADMISSION TO A FART OF DIMAND) ARBITRATORS MAT BE APPOINTED TO DITERMINS THE AMOUNT DUE. Section IX. — ** And be it enacted, That in any case when any such Trader, so summoned as aforesaid, shall, upon his said appearance, make a deposition, in the form hereinbefore required, that he believes he has a good answer to the said demand, or to some, and what part thereof, it shall and may be lawful for the Judge or Commissioner, on the application of the said Trader, or of his Creditor, acting as aforesaid, to name one Arbitrator — ^for the said Trader to name a second— and for the Creditor, whose claim is disputed, to name a third, to arbitrate and adjudge between the parties respectively, as to such demand; and in case either the said Trader or the Creditor shall refuse or neglect to name an Arbitrator as aforesaid on his behalf, then the said Judge or Commissioner shall nominate and appoint such Arbitrator; and the award and determination of any two of them, the said Arbitrators, shall be final and conclusive, unless the same shall be set aside by the Court of Review, as hereinafter provided; and every such Trader who shall not, within twenty- one days next after the fyliug with said Judge or Commissioner by such Arbitrators, of such award and determination, pay, or tender and offer to pay, to his Creditor, the amount of the said award and determination, if against him, in whole or in part, or secure or compound for the same, to the satisfaction of his Creditor, every such Trader shall be deemed to have committed an act of Bankruptcy on the twenty-second day after the fyling THE BANKRUPT ACT. 11 of such award an(} iletermination: Provided a Com- mission of Bankruptcy shall issue against such Trader within two months from the fyling of the said affidavit of the Creditor.'* In all cases of Arbitration I think it would be ad- vantageous to issue printed Orders of Court, to be served by a Bailiff on each of the parties appointed to act, appointing a day to meet and determine, under a penalty of two pounds ten shillings, neglecting so to do, unless said Arbitrators can show good cause for non^performance. I am. Sir, Tour obedient servant. Observer, Montreal, 7th February, 1848. No. ILL TO THE EDITOR OF THE MORNIMO COURIER. Sir, — The following Section has reference to — CONVEYANCES MADE FOR THE PURPOSE OF GIVINa UNDUE PREFERENCE TO ANT CREDITOR 16 BE VOID. Section XIX.— « And be it enacted, That all pay- ments, securities, conveyances, or transfers of property, or agreements made or given by any Trader in con- templation of Bankruptcy, and for the purpose of giving any Creditor, Indorser, Surety, or other person, any 12 COMMENTARIES ON ( U ■■ preference or priority over the general Creditors of such Bankrupt, and all other payments, securities, eon- yeyanoei, or transfers of property, or agreements, made or given by such Trader in contemplation of Bank-* ruptoy) to any person or persons whatever, not being a honaJidB Creditor or Purchaser, for a valuable con- sideration, without notice, shall be deemed utterly void, and a fraud under this Act; and the Assignees under the Bankruptcy shall be entitled to claim^ suef for, recover, and receive the same as a part of the assets of ' the Bankrupt, and the person making such unlawful pre- ference, or payment, shall receivo no.4)@oharge under the provisions of tl^s Aqt: Provided ahrays, that all dealings and transactions, by and with any Bankrupt, bona fide made and entered into, more than thirty days before the issuing of the Commission against him, shall not be invalidated or affected by this Act: Provided, that the other party to such dealings or transactions had no notice of a prior act of Bankruptcy; and pro- vided also, that nothing in this Act contained shall be construed to annul, destroy, or impair, any lawful rights of married women, or minors, or any aliens, mortgagees, h3rpothecs, or other securities on property, real or per- sonal, which may be valid by the laws of any part of this Province, and which are not inconsisterit With' the provisions of this Act." -:n ■^.^;^ mim^^ Supposing such a thing as a properly written up Cash Book could be found, in three cases cut of twelve which are brought into Court, it might proye a source of great amusement to a disinterested person to witness the operation of this Section of the Act: "And be it enacted, That all payments made or given by any THE BANKRUPT ACT. 13 Creditors of uritiesy con- sents, made Q of Bank* 9 iiot being [uable con- tterljvoid, nee^ under •r sue for, e assets of awful pre. rge under 8, that all Bankrupt, iirtjrdays him, shall Provided, nsactions and pro- shall be ul rights I or per- part of dth the bten up ^ twelve source nritness \d Be it Trader in contemplatiorTpf Bankruptcy;" ** Provided always^ that all dealings and transactions, by and with any Bankrupt bond, fide made and entered into more than thirty days before the issuing of the Commission against him, shall not be invalidated or affected by this Act** Generally speaking, all men know at least six months previous what conclusions they must come to— why then allow a person iri contemplation of Bank- ruptcy to go on giving preference,2should he think proper, for five months, out of the six. Where teachers of Latin are so scarce the words " bona fide^* should have been accompanied by a translation; and even then parties would be found rather dull of comprehension. I am humbly of opinion that this Section of the Act should be very carefully revised. Supposing that a Trader, on balancing his books, say on the 31st December, finds that he has a considerable balance at the credit of Profit and Loss Account, being gain on the year's transactions, that he is free of debt — his Real Estate of course unencumbered — and besides a stock, say of the value of J6o,000, on hand; on the day in question he settles all his Real Estate on his wife and children; during the ensuing month he enters into speculations in flour and grain, embarks say £20,000 by giving Promissory Notes, meets with reverses to the extent of :£5,000; he resorts to Auction to endeavor to realize his stock, valued at £5,000; it leaves him ;£4,000, perhaps; he becomes embarrassed, and in the month of April " takes the benefit of the Act,* so called; the settlement made by him on the 31st December was bon& fide (in good faith); he was perfectly solvent, his subsequent speculations proved unfortunate; what he :i4 14 COHMENTAItlBS ON did was done for the best, and as all his transactions can bear thorough investigation the settlement remains valid; he did not give away the property of any other man. Not so with the Trader whose books have not, or cannot be, balanced on the 31st December, and who consequently, is ^* at sea,** but notwithstanding makes a settlement of his Real Estate, goes on speculating without ascertaining his real position, and within six months calls a meeting of his Creditors; into Court he will he driven, as there only, under the charge of an impartial Assignee, and an Attorney well versed in cro5<-questioning, will the Creditors probably benefit by a reversion of the settlement so made by the Bank- rupt. I am. Sir, Your obedient servant, Obsebyxb. Montreal, Feb. 15, 1848. No. IV. TO TBI EDITOR OF THE MORNING COUKIEB. Sib,— In letter No. 3 the Trader, by a mistake in printing, is made ** to embark £20,000 by giving Promissory Notes;" it ought to have been £10,000. AMOUNT WHIOH MUST BE DUE TO THE CBEDITOB OR CBEDITOBS PETITIONING FOB A COMMISSION OF BANKRUPTCY. Section XXI. — ** And be it enacted, That the amount of the debt or debts of any Creditor or Creditors, THU BANKRUPT ACT. 15 petitioning for a Commission of Bankruptcy under this Act| shall be as foUovrs, that is to say: the single debt of such Creditor, or of two or more persons being partners, petitioning for the same, shall amount to £50 or upwards; and the debts of two Creditors, so petitioning, shall amount to £70 or upwards; and the debts of three or more Creditors, so petitluning, shall amount to £100 or upwards; and that every person who has given credit to any Trader, upon valuable consideration, for any sum payable at a certain time which time shall not have arrived when such Trader committed an act of Bankruptcy, may so petition, or join in petitioning, as aforesaid, whether he shall have had any security in writing for such sum or not." In adopting legal proceedings in the Court of Queen's Bench, the facility with which the Defendant can have a case referred to the subsequent Term, I consider highly detrimental to the interests of the fair Trader. And as the Bankrupt Act is specially meant to protect him, it occurs to me that the substitution of £25 or upwards, " the single debt of such Creditor, or of two or more persons, being partners, petitioning for the same," in place of £50, would have a very beneficial effect, in, first, compelling the'gentlemen of the Bar to be active in pushing through the business of their clients in one Term, where practicable, and, secondly, giving the unfair Trader no time to " c?o" his Creditors to any extent. The concluding part of the preceding Section requires, I think, a little explanation, to make it plain to common > capacity, — ** And that evert/ person who has given credit to any Trader, upon valuable consideration, for any 16 COMMENTAKIES ON sum payable at a certain timey which time shall not have arrived when such Trader committed an act of Bankruptcy^ may so petition or join in petitioning^ as qforesaidf whether he shall have hmd any security in writing for such sum or not." Supposing a Grocer makes a purchass of a wholesale Merchant of a quantity of goods, for which he grants his Promissory Note at three months, and one month subsequent to granting said Promissory Note commits an act of Bankruptcy, he thereby causes (as it were) the Promissory Note to mature, so placing it in the power of the Merchant " to petition or join in petition- ing" and to attend first meeting of Creditors, and vote for an Assignee. I am, Sir, Tour obedient servant, Obserter. Montreal, Feb. 26th, 1848. No. V. TO THE EDITOR OP THE MORNING COURIER. Sir, — Since I became somewhat intimate with Bank- rupt Court matters, I have been convinced of the necessity of shortening as much as possible the periods of notice of the Estate remaining in the hands of the Sheriff, and of the advertising the sale of Real-Estate; all delays are prejudicial to the interests of the Cre- ditor. THE BANKRUPT ACT. IT FIRST MEETUTO OF CREDITORS APPOINTED. Section XXIII. — " And be it enacted. That the Judge or Commissioner shall, in the Commission, fix the day and place for the first meeting of the Creditors of such Bankrupt, which shall be at some convenient place within the District wherein such Commission is issued; and the time shall not be less than fourteen days, nor more than thirty days, after the date of the Commission." The Commission being issued, and made public through the medium of the Press, I have not been able to find out in what manner the Creditors are benefited by their property being subject to the control of the Sheriff's representatives " not less than fourteen days, nor more thanr thirty days" In many cases in which I have had an interest, I have had more fear of effects being consumed by fire under the charge of guardians, than if the premises had been locked up, and the key snug in the Sheriff's pocket, so to remain until the mis-spent number of days had elapsed. I am of opinion that ten days would be ample time allowed from the issuing of the Commission to the first meeting for the appointment of Assignees, and during those ten days the only guardian the law should allow, should be the Bailiff who takes possession of the Estate; n'^ other in his stead. I am, Sir, Your obedient servant, Obseryeb. Montreal, March 9th, 1848. b2 18 COMMKNTAUES ON No. VI. TO THE EDITOR OF THE MOBNING COURIER. Sir, — The following Section compels the Bankrupt to mnke out a Schedule *' containing a full and true account of all his Creditors." Much time and expense would be saved if, at the same time, the law compelled the Bankrupt to prepare an Inventory of his household furniture — a list containing particulars of his Real Estate, if any, with all deeds pertaining thereto, num- bered 1, 2, and 3, and so on — an Inventory of all his Stock in Trade, horses, carriages, &c. &c.; these prepared, a few hours would suffice to point out each item to the Bailiff taking possession, he checking off, and the Bankrupt having, at same time, a duplicate prepared; the documents could be compared at once, signed by the Bankrupt and Bailiff, and when the latter made his return to Court, the duplicate would be at once ready for the Assignee to proceed to take possession. The present system is, to say the least of it, a very unsafe one for the Assignee, generally giving a receipt to the Sheriff for, he knows not what. SHERIFF TO TAKE POSSESSION OF THE BANKRUPT'S ' ■'■ ESTATE. Section XXV. — " And be it enacted. That the Sheriff shall, as soon as may be after the issue of the Commission, demand and receive from the Bankrupt, and from all other persons, all the Estate ir. his or their possession which belongs to such Bankrupt, with fill the deeds, books of account and papers r^Intingp THK BANKRUPT ACT. 19 thereto; and the Bankrupt shall accordingly deliver ta the Sheriff such part of the said Estate, and other things above specified, as may then be within his possession or power, and shall disclose the situation of such parts thereof as may then be in the possession of any other person, or so to enable the Sheriff to demand and receive the same; and the Bankrupt shall also make a Schedule containing a full and true account of all his Creditors, with the place of residence of each Creditor, if known to him, and the sum due to each; and the said Schedule shall also set forth the nature of each debt, whether founded on written security, on account or otherwise, and also the true cause or con- sideration thereof, and a statement of any existing mortgage, hypothec, pledge, or other collateral security, given for the payment of the same, which Schedule he shall produce at the first meeting of his Creditors, to * be delivered to the Assignees, who shall then be chosen." The preceding Section brings us to the first meeting, at which the law should compel the Bankrupt to fyle a regular balance-sheet taken from his ledger, not con- cocted, as in too many instances they have been, by some apt Accountant, Lawyer, or perhaps, Assignee, I say, taken from his ledger, and let the Attorney, or the Assignee, when examining the Bankrupt, make interrogatories bearing pointedly upon this most im- portant of all items, in connection with the interest of the Creditors. Besides a balance-sheet taken off, and agreeing with the brought down balances of the Bank- rupt's ledger, the law should also compel the Bankrupt to fyle, at the said first meeting, his profit and loss h 20 COMMKNTAKIKS ON account, for, at least, one year previous to the Com- mission, made out in such detail that even the most uneducated of his Creditors will learn, by a little study, what his losses, what his house-expenses, what his pocket-money, &c. &c., have amounted to, and what business he has been doing to enable him to cover these; the profit and loss account, in (what the law now its on, however lamely attended to) " a regu- lar set of books," should, at a ghmce, exhibit the above particulars. — The reason for insisting on the fyling of a balance-sheet, also a profit and loss account, at the first meeting, is to give time to the Assignee and the Attorney for the Creditors, or any of the Creditors who may wish to go over the statements, and take notes preparatory to the examination of the Bank- rupt at the second meeting. To make the Bankrupt Act efficient, it must he made much more stringent in regard to statements fyled in Court and sworn to. I venture to afiirm that, notwith- standing the amended Act, by which the Bankrupt is debarred his discharge unless he shall have kept a regular set of books, not ten in twenty cases will pro- duce balance-sheets taken from their ledgers; not four months past, ledgers have been carried into Court, which I defy any Accountant to balance; in fact, it would matter little at which end an Accountant com- menced. I shall shortly trouble you with commentaries on Section 26th. ; ; I am, Sir, Your obedient servant. Observer. Montreal, March 13, 1848. TUB BANKRUPT ACT. 21 No. VII. TO THE EDITOR OF THE MORNING COURIER. Sir, — I was highly gratified on ascertaining that tho Act, as now in force, continues until the assembling of Parliament; the gentleman who took care of the Bill deserves well at the hands of the British importers, who, should tho Bankrupt Act be abolished, should cease to give credit to a certain class of the community, whom I shall take good care to bring into notice. I am firmly of opinion that the present law, imperfect and unfair as it is, requires only to be st ictly and impartially administered, in order to prevent swindling; let the Commissioners act on the suggestions contained in my No. YI, and Assignees will have a pleasing, instead of a torturing, task to perform, in so far as regards the adjustment and settling of accounts. The Bankrupt will hardly be able to exhibit statements founded on his memory, and the Commissioners them» selves will be saved a world of trouble and loss of valuable time, by the insisting on the production of a " regular set of books** balances properly brought down in the ledger, the balance-sheet taken therefrom ; also a profit and loss account for twelve months pre- ceding the issuing of the Commission. In repeating this opinion, I may as well express another, which is, that if these suggestions are not acted on, the sooner the Bankrupt Act is abolished the better, for if fictitious statements are entertained by any Commissioners, I would undertake, with the assistance of a certain Attorney, to carry our (late) much lamented townsman, Mr. Seeley, safely through to his discharge. 83 COMMENTAKILS UN .n I shall now proceed to the examination of Section XXVI.—" And be it enacted, That the Judge or Commissioner shall attend the meeting, and shall receive proof of the debts due to the Creditors of such Bankrupt, who shall be present, and shall allow all the debts which shall be duly proved, and cause a list thereof to be made, which shall be certified by himself, and be recorded and fyled with the other papers in the case; and the Creditors so present as aforesaid, who shall have proved their debts, shall then proceed, in presence of the Judge or Commissioner, to choose one or more Assignee or Assignees for the Estate of the Bankrupt, such choice to be made by the greater part in value of the Creditors according to the debts then proved." In many instances I have observed Creditors bring forward claims against Bankrupts, not in detail; al- though not laid down in the Act, the Judges very properly decline admitting claims so drawn out, — and where Promissory Notes form the items of the claim, the Judges very properly insist upon their production. Very great inconvenience arises from the neglect of Creditors in not preparing their accounts, and having the affidavits filled up the day previous to the first meeting of Creditors; — for a trifling compensation this object can be attained by application to the Clerk of the Court. Creditors prepared, the Judge can at once proceed to receive proof, and in half an hour the ap- pointment of Assignees will have taken place, instead of sometimes occupying two hours in the preparation and swearing to claims, to the great detriment of those Creditors who have come punctually at ten o'clock and M THE BANKRUPT ACT. proved their claims. I think a little management on the part of the Commissioners would put a stop to the practice. I am, Sir, Your obedient servant, Observer. Montreal, March 28, 1848. No. vni. TO THE EDITOR OF THE MORNING COURIER. Sir, — The next Section which appears to me to require some little alteration, is that which provides, IN CASE OF FAILURE TO ELECT ASSIGNEES, THE COMMISSIONERS MAT AFPOINT THEM. Section XXIX. — " And be it enacted, That in case no choice of an Assignee or Assignees shall be made by the Creditors at the said first meening, the Judge or Commissioner shall appoint one or more Assignees, and if any Assignee so chosen or appointed shall not, within six days after notice thereof, signify hiff acceptance in writing, and deliver it to such Judge or Commissioner, then his election or appointment shall be considered void, and the Judge or Commissioner shall, from time to time, proceed to appoint until the acceptance is duly signified." Supposing that half a dozen Creditors came forward and proved their claims, and when asked by the Judge COMMENTiLRlES Oli whom they thought proper to inflict with the office of Assignee, and that they could not agree, the Judge could then (supposing he found two competent amongst the six) name Assignees; why should they be allowed six days to signify their acceptance of the office ? Why not be required to say yes, or no, on the spot ? Sup- pose they declined, and the Judge did not consider any one of the remaining Creditors capable of fulfilling the duties of an Assignee, he nominates a person not then present who could, why should such a person be al- lowed six days to say yes or no ? A message sent by the Judge, through the Bailiff in charge of the Estate, might bring answers from ten different persons, if ne- cessary to apply to so many, in a couple of hours, and the routine of the Court would thus proceed unim- peded. Supposing ten different parties in succession nominated by the Judge, and each took advantage of the letter of the law, 60 days would be consumed; this is not probable, but it might happen; then the Estate would remain subject to the control of Sheriff, Guar- dians, loss by fire, &c., &c. The most effectual method of amending, or rather of abolishing, the 29th Section of the Act, also many other Sections, would be the appointing of Official Assignees, under a Bench of Control, and instead of Sheriffs, Bailiffs and Guardians, let there be Bailiffs and Guardians attached to, and directly responsible to, said Bench of Control. I am, Sir, Your obedient servant, Observer. Montreal, April, 3, 1848. THE BANKRUPT ACT. m ' TO THE*iilTOR 6p irkE MbROT^G COURIElt. Sir,— Allow me to inquire of your correspondent^ <' Observer/' who appears to be studying the Bankrupt Law, if a person takes a house on a lease of two or four years, and, at the expiration of the first year, he fails in business, can the landlord fyle his claim for the full term of the lease ? And, if allowed by the present law to swear to a claim for rent of three unexpired years of the lease, can his (the landlord's) claim afifect the granting of the Bankrupt's Certificate of Discharge? — or, in other words, are he and his claim reckoned among the " four fifths of number and amount ?" ■**>•«») ■•^, J/ f.-g •-r I am, Sir, hloow liA.... ri Your obedient servant, ,., ,u;. '4- ., .,;: ..v.: .j.yo j;,.iJf;o-:t: Montreal, April, 3, 1848.,., ., . '.'uj »jj Ji<5'.'i;s>ai isi f.'U ■■ .'T. di tin 1^i!u^ ■qofin b!?j^;ii-ftor. Ij ^^. ni \^: jo ^^uo" ■ -h . , TO « A. B. C." "' Sir,— In reply to the enquiry in your letter, ad- dressed to the Editor of the Morning Coutkr — " If a person takes a house on a lease of two or four years, and at the expiration of the first year, he fails ia business, can the landlord fyle his claim for the full, terms of the lease," &c. Provided a Commission of Bankruptcy issue three months previous to the expiration of the first year's lease, the landlord's claim goes no farther; but sup- c 26 C03IMENTAA]£S ON posing the Coiumission to issue at, or near to, the ex- piration of the first year, the Estate becomes liable for the second year of the lease, the Assignee having power to dispose of the same for the benefit of the Creditors, not only of the second year, but up to the termination, whatever the time may be. Should the Assignee as- sume the lease for the unexpired term of say three years, he is supposed to sell the lease, together with the personal estate, satisfy the landlord, and so put it out of his power to interfere with the Certificate of Discharge. i . : , » v -., — .. But supposing that the nett proceeds of the Estate Ci. e.f Bankrupt Court Fees, Attorneys, Sheriff, Bailiftsy and Guardians being paid) were not sufficient to liqui- date the second year's lease, the Assignee would, of course, abandon it, and the landlord's claim would rest for the first year, deducting any payments made on account; and, exceeding £20, < if not more, of the Bankruptcies which take place amongst them are caused by the enormous rents which they undertake to pay, and which, unfortunately for the wholesale mer- chant, frequently form part of his liabilities." ^. I am, Sir, Your obedient servant, ' Observer. Montreal, April, 8, 1848. THK BANKRUPT AOT. 27 ■ ^•-- -■-'•• — No. IX. ^^'-^ ■ ^'^-'^J'- ^--^oii- f U yo THK EIDTOH OF THE MORNING COURIER. < Sir, — The office of Assignee being one of the most disagreeable posts that a person can fill, partially caused by the framing of the present Act, added to the class of people with whom he at times comes in contact, I think it is incumbent on our lawgivers to protect Assignees; who are held to be officers of the Court. The following extract from the 32nd Section of the Act has been put in practice in oui- Bankrupt Court:-— HOW CTEDIT0K9 MAY REMOVE ASSIGNEES AND AP- POINT OTHERS. " And it shall be in the power of the Creditors, by such a vote as is provided in the 26th Section of this Act for the choice of Assignees, at any regular meeting called by order of the Judge or Commissioner for that purpose, and called in his discretion, on the application of a majority of the Creditors who have proved their debts, either in number or value, to remove all or any of the Assignees, &c." Creditors should not have it in their power to remove an Assignee bi/ a mere vote — the discretion of a Judge may be abused; the proper method to be adopted in removing an Assignee or Assignees, is to fyle a charge or charges in Court, supported by affidavit, against the Assignee or Assignees, said affidavit to be accom panied by a petition to the Court, requesting that a meeting of the Creditors should be called for the pur- COMMKNTARIES ON pose of hearing the defence of such Assignees to the charges alleged against them, and then and there, having them removed, should the explanations offered by them be deemed unsatisfactory, said explanations to be stated in writing, and regularly fyled on the record, accompanied by affidavit, should the Judge deem it requisite. Such a course would effectually prevent maliciousandmeddling Creditors from giving annoyan. e to Assignees, who, by the mere vote of a majority of such a class, might be deprivedof the means of earning a livelihood. I think the Court should place its offi- cers on as respectable a footing as possible, and when so placed, be very tenacious of their standing. Whilst adverting to Assignees, I think it would prove of in- finite advantage to the interests of the community to have an enactment passed, that no person should be eligible for the office of Assignee until he has, or i^ prepared, to fyle a document in Court showing that he is possessed of unincumbered property, either real or personal, to the value of J6500 — say five hundred pounds; also, fyling in Court a Policy of Insurance over said real or personal estate. And besides, providing three seurties, in £50 each, for his intromissions. .. r . ,^ : '•(li I am. Sir, * » , . , , Your most obedient servant, 'v:-\'M Observer. Montreal, April 29th, 1848, t,;(' ■:i . THE BANKRUPT LAW. 29 3{fi;tj .u. -.; .i i,-v ,,.M .>. Observer. Montreal, July 26, 1848. 's.uii'v i'».;,i!iii. f'ii.ifei ■ li'-zfr'-' .___ ^ .'i* II-.'-' i .ca Yfniit'rirf>-^' No. xn. I.t':'! ^:''rfi>'/ Jc'ii y) :.]. .. v'l Vi T ^ nnir ;i: ^ ' TO THE EDITOR OF THE MORNING COURIER. *' '* Sir, — High rents are a source of constant complaint amongst our citizens who are not proprietors ; on the other hand, proprietors are sometimes heard to exclaim that they do not realize 2\ per cent, on their outlay; few instances, in reality, I should think. ' It is a well known fact, that when the wholesale merchant requires to look over the statement of the affairs of his bankrupt debtor, he generally finds an enormous amount due to the landlord, probably all a 34 COMMENTARIES ON privileged cluiin, which, deducted in tvto froui the bankrupt's shewings, leaves a dividend hardly worth the loss of the time to any Creditor looking after. RENT DUE BY THE BANKRUPT. Section XLVIIL — And be it enacted, "That no distress for rent, made or levied after an act of Bankruptcy, upon the Goods or Effects of any Bank- rupt, (whether before or after the issuing of the Commission,) shall be available for more than twelve month's rent accrued prior to the date of the Com- mission, but the landlord, or party to whom the rent shall be due, shall be allowed to come in as a Creditor, under the commission, for any overplus of the rent due, and for which the distress shall not be available." I cannot see why landlords should be allowed to benefit (let their neglect in looking- after their rents be ever so culpable) by being able to demand payment of a whole year's rent, so much to the injury of con- fiding Creditors; rents being generally collectable quarterly in this city, and when moderate, are, I sup- pose, collected. I think it would be of essential benefit to the wholesale merchant that, where a landlord has allowed seven months to elapse without collecting the rent of his premises, he should be compelled to rank on the estate for the Jirst six months as unprivileged, and be allowed to rank for the remaining six months as privileged, I think such a practice would have the effect of compelling some of our citizens to reduce their aristocratic ideas to their proper level, and instead of renting TIIK BANKRUPT LAW. 1^ A shop at (say) £250 A house at 70 Paying a book-keeper 150 Paying two clerks 100 Paying two porters 100 And disbursing for house expenses, keep of an errand horse, Assessed Taxes, &c... 600 Annual expenditure 1 ,370 Let them fall back to the system adopted in a certain " Happy Land," where people, generally, live within their incomes, and rent A shop at (not exceeding) £150 A house at (not exceeding) 50 Pay a book«keeper (not exceeding) 1 00 Pay two clerks (not exceeding) 1 00 Pay two Porters, (not exceeding) , . , . 1 00 And for house expenses, &c., nut exceeding) 350 Annual expenditure 850 This system adopted, the present rotten one would be succeeded by a wholesome trade, and, in all probability, the landlord would be regularly paid, without prejudice to the interests of the other creditors, in cases of insol- vency. Every merchant in the city is perfectly well aware that business here is overdone; still he will import, still he will give credit, without sufficient enquiry — hence his losses, perhaps ultimate ruin. I '' I am. Sir, iii it i^t Your obedient servant, '.n ^:-^utr : , . . OBSERVER, > July 31, 1848. i li 36 COMMBNTARIEH ON No. XIII. • i TO THE EDITOR OF THE MOBMINO COURIER. «| It Sir, — The system of giving Credits beyond three months in a Colony, which may be said to be still in its infancy, is generally found to be most pernicious to the interests of the fair trader, and, sooner or later^ from affluence, reduces him to what may be termed very middling circumstances; what has been the result to the merchants of Montreal from their intercouse with their Upper Canada brethren? their profit and loss account cai^ tell!! And let them now endeavour by legal measures to square up their running accounts current with their said brethren^ and they will ascertain what additional sum they will require to pass to the debit of profit and loss account. ^ The trade with Upper Canada has for many years been a rotten one, and there is every chance of its con- tinuing so, so long as the system of giving over three months' credits is continued; and these remarks are quite applicable to the business transactions of this section of the country. This brings me to the Section: — PUNISHMENT OF BANKRUPT FRAUDULENTLY OBTAINING CREDIT, IMMEDIATELY BEFORE HIS BANKRUPTCY. Section LV. — "And be it enacted. That if any Bankrupt shall, within three months next preceding the date of the Commission against him, under the false colour, or pretence of carrying on business, or dealing in the ordinary course of trade, have obtained fHK BANK.KUPT ACT. 37 on credit from any other person^ any goods or cliattelci, with intent to detraud the owner thereof i or if anjr Buch Bankrupt shall, within the time aforesaid) with fluch intent, have removed, concealed or disposed of any goods or cFi^tteli so obtained, every such person so offending shall be deemed to be guilty of a miide- meanor, and, being convicted thereof, shall be liable to imprisonment in any common gaol in this Province, for any term not exceeding one year, as the Court, before whom he shall be tried, shall think fit." " Have obtained on credit from any other person any goods or chnttelst with intent to defraud the owner thereof" From the wording above quoted, it is to be presumed that the penalty applies solely to the obtaining credit from an Agent, or party holding the goods of another person on consignment, or in trust, and not to the obtaining a direct credit from a proprietor. I am of opinion that in extending the working of this Section to four months next preceding the date of the issuing of the Commission, much good would result, seeing that the fraudulent Bankrupt would thus be placed, at all events, beyond the pale of granting a three months' Promissory Note, with intent to defraud; and thus the common remarks — " The fellow granted me a three months* note for a purchase^ and within two or three days of its becoming due^ he acknowledged his insol- vency) which I consider neither more nor less than a downright swindle** ) would be abolished. t.uv\ >v. «f>vif -v ^. lam, Sir, \^: >a%t vi ,)>»:^ 1S«, tf (■1 -i.M- Your obedient servant, >* < "> ^^y- *• Montreal, August 9, 1848. *" r' P "■-»—. 88 COMMENTAUIES ON No. XIV. TO THE EDITOR OF THE MORNING COURIER. Sir, — Having been requested to refer to a number of the " Magic LanterUf* a paper which has recently made its appearance in this City, in consequence of its containing some allusions to the Bankrupt Court, I procured a copy at the Office, No. 24, St. Vincent Street. There is a deal of truth contained in the following, which I have extracted from that paper: — " Some are determined that nothing will do the country good unless the Bankrupt Law is abolished^ which appears to me a most ridiculous affair. How can that benefit them ? Do they wish to make their debtors die in prison, or to paralyse the resources and enterprise of a Merchant, because one unlucky transac' tion has left him in debt ?" " The Bankrupt Law entails curses with it, upon our community, which are enough to destroy all con- fidence in Mercantile men. When men come out of that Court richer than when they went in, when you see them proving claims upon Bankrupt Estates for more than any person believes them worth." " fVe have no public opinion, and this explains the reason of the evils attendant upon the Bankrupt Court. It is not that the principle of such Courts is radically bad, or that the constitution of ours is altogether wrong ; but so long as those who, in that Court, are guilty of acts which ought to brand them as — ♦ • ♦ ♦ ♦ ♦^ — * ####### *.^are welcomed again TBE BANKKUPT ACT. 39 to the society of the wealthy and the educated * *, our City will never possess an elevated moral charac' ter:' " / think that if no other means were left hut a return to the harsh measures of arbitrary imprisonment against unfortunate debtors, which was formerly in use, the Bankrupt Court, with all its abuses, should be retained; but surely, in this agesoferHle in inventions, the brains of our Legislators are not so sterile, that they can devise no other means of security against fraud towards the creditor, or unnecessary harshness towards the debtor. 1 have had some knowledge of the proceedings in this Court, and I must confess that I cannot imagine any thing more revolting than the scenes which are ever and anon passing there. We have heard much of the " honor and integrity^* of British Merchants, and of the chicanery of Lawyers, but take the two Courts, listen to the quibbles of the Lawyers in the Queen's Bench, and to the downright lying and perjury which may be heard from parties in the Bankrupt Court; and I, as a member of the Bar, will never shrink from the comparison. But Ifeel certain that if we had British public opinion, and really British Merchants here, we should have less to complain of in the Bankrupt Court J^ I have been witness to many ** exhibitions^* in the Bankrupt Court, and have frequently thought that, could it be conducted without the presence of the members of the Bar, peace and good-will would dwell there. Creditors would not have reason to grumble at bills taxed, and not taxed, which Assignees are called on to provide for, and weeks and months wasted in^ 40 COMMENT A UIKS O^ contestations, occupying the time of an Assignee, tfrhicii might be much more profitably employed. I am not at all singular in the opinion, that until the Judges of the Bankrupt Court are solely employed in that Court, und sit together, no good can result from any new Bankrupt Act which may be framed. ^^-^.,,s^ »k>«i Atit. ^;, From the preceding allusions to perjury. I now beg to bring before the notice of the public the following^ *• 't^V^^ -^l-i FALSE SWBABING OB AFFIRMATION TO BE DEEMED Oil 1 .■*.iaV'_i«». Utt' .*.* *"• PERJURT. ,V VAv ^_t.,, Section LVI. — " And he it enacted, 7 hat every per- son whOf in any examination be/ore a Commissioner, Judge, or any person lawfully deputed by him, or in any ajffidavit or deposition authorized or directed by this Act, shall wUfttUy and corruptly smear or affirm falsely i shall, on conviction thereof, suffer the pains and penal- ties in force in this Province against wilful and corrupt perjury." The man who fyles in Court a Balance- Sheet founded on supposition, (and a half of the Balance- Sheets which are fyled there are such,) not taken from his Ledger, requires to ease his own conscience in connection with the preceding section of the Act. The man who makes oath that he has delivered up all Books, Papers, Letters, Notes &c., to the Bailiff, and afterwards, from the keen searching of the Assig- nee, is required to make further production, has again to ease his conscience. - ? ? v^^^y ^r )»'..;i: j m-:>A The man who hands over funds to a wife, sister, or other relative, to meet the 'wet day;" and when asked THE BANKHUPT ACT. 4>1 by the Bailiff for money belonging to the Estate, returns " no money'' — has again to ease his conscience. The period between the First and Second Meeting for examination of Bankrupts, is too short to allow of a thorough examination into the affairs of the Estate by the Assignee; and Creditors are generally too hasty in granting discharges to Bankrupts; let them henceforth procrastinate) should there be some ground for doing so, and it will then be found that Traders will struggle very hard to steer clear of the Bankrupt Court ; let the examination of Bankrupts be carried on always in presence of the Judge, and let all the Creditors be present, and if they have any questions to ask their debtor, let them inscribe them on a slip of paper, and hand them to the Assignee. And then let " Members of the Bar'* show their respect for it, and the Commis- sioners present, by examining the Bankrupt in a be* comingly solemn manner. "?. - , rj I have had some very important suggestions trans- mitted to me in relation to the Notice in Bankruptcy, which will form the subject of my next number. ,, i'vei;,;%sL,4:! lam. Sir, .,, .^-.;--»rn^*tn i. i.- ■-.:■! ...f; ■u, ^L ; , , J Your most obed't 6erv*t, ,^:,;^, ; :; ,j,, . I ,, , Observer. 13th September, 1848. - , , '(»■.-. .'t ■:■'. >"-pr;'' No. XV. .U,r1 TO THE EDITOR OF THE MORNING COURIER. Sib, — The following suggestions, with which I have been favored, in regard to the issuing out of the Com- mission in Bankruptcy, give the honest Debtor an d2 42 COMMEHtARtES ON i*.i immediate chance of "beginning the world" anew, and providing for himself, and family — should he have any — and at the same time benefit his Creditors in relieving them of the heavy costs attendant on the passing through the Bankrupt Court:—' " One of thie objections started by those who oppose the renewal of the Bankrupt Law, is the great injury done both to th6 Debtor and Creditors by the injudi- cious suing but of a Commission of Bankruptcy by any one obstinate and inconsiderate Creditor who may have a claim which the Debtor maybe unable to meet at the moment, and yet have amply sufficient means to meet all demands, if not thrown into the Bankrupt Court, and time granted to him. "To obviate this it is suggested, that, when any Creditor has made such proof as would, under the present law, entitle him to sue out his Commission, thereupon, a rule nisi should in the first instance be issued by the Judge calling on the debtor to show cause why the Commission should not issue, and at the same time call a meeting of the Creditors, on a given day, in the Bankrupt Chambers, to examine into the affairs of the debtor. Should four-fifths or two-thirds of these Creditors, in amount, return to the Judge that they are satisfied with the statements of the debtor, and their readiness to accept his Estate without going into Bank- ruptcy, and grant him his discharge, then it shall be lawful for the Judge to authorise such an assignment in favor of such of the Creditors as shall be chosen Trustees, this fissignment to be binding on the remain- der oi the vyreCUtOrS. di tJlU olT/wgcsi isl {H::>'tt>»iri f*^^ Al THE BANKRUPT ACT. 43 " If the fourth-fifths or two-thirds of the Creditors return to the Judge that they are not agreed, the Com- mission of Bankruptcy will forthwith issue. " Time may be allowed to Creditors in England to assent or refuse/' The system of Trusteeship, such as is commonly resorted to in Scotland, would, I think be found to work admirably in this country, in cases where Credi- tors have every confidence in the integrity of the party becoming insolvent. In the hope that an efficient Bank- rupt Act will emanate from the coming Session of Parliament, it is unnecessary for me, meantime, to enter upon the details of the office of Trustee. One of the great beauties of the system is the causing Trus- tees to find ample security tor their intromissions, a custom which might be very advantageously brought into practice in any future Bankrupt Act with which we may be favored. wv v tj-^fT^ i/ktt^fi A am, oir, iM?,?^ii-f.A' t i\r, ^ai^t ■ >3**^-*«'« ni .-Jjvf^s^ t V Your most obed't serv't, .i.^> v.^.... Observer. 21st September, 1848* -^ ■^^ ,„J.v - 1> i. ..,. -••i ,' "rnk Tii>i, ^. .„,___„_. i'l ton -iV^r; *t ■t*i. J ., ,.-, rr TO THE iS1>IT6ft OF THK MORNING COURIER. Sir, — I now come to one of the most important features of the Act, viz.: — The discharge of the Bank- ^• COMMENTARIES OK MEETING FOR ALLOWANCE OF CERTIFICATE. Section LXI.— *' And be it enacted, That it shall be lawful for the Judge, or Commissioner, by whom the Commissioft was issued^ to appoint a public sitting for the allowance of such Certificate to the Bankrupt named in such Commission, (whereof, and of the purport whereof, twenty-one days notice shall be given, in manner to be directed by such Judge, or Commissioner, and a copy of such notice shall be served on one of the Assignees, or on their Solicitor,) and at such sitting, ani/ of the Creditors of such Bankrupt may bs heard against the allowance of the Certificate^ and the Judge, oi Commissioner, shall consider any objection against allowing such Certificate, and either find the Bankrupt entitled thereto, and allow the same, or refuse or sus' pend the allowance thereof, or annex such condition thereto as the justice of the case may require: Provided always, that no Certificate shall be such discharge, unless such Judge or Commissioner shall, in writing, under his hand and seal, certify to the proper Court of Review that such Bankrupt has made a full discovery of his estate and effects, and in all things conformed as aforesaid, and that there does not appear any reason to doubt the truth or fulness of such disco- very; nor unless the Bankrupt make oath in writing that such Certificate was obtained fairly and with- out fraud; nor unless the allowance of such Certi- ficate shall, after such oath, be confirmed by the Court of Review, against which confirmation any of the Creditors of the Bankrupt may be heard before such Court." m mm TtlE bANKRUt'T ACT. 4,-5 CKitTli'lCATE NOT TO BE GRANTED TO A BANKRUPT UNLESS ASSENTED TO BY FOUR-FIFTHS IN NUM- BER AND VALUE OF THE CREDITORS PROVINO DEBTS OVER £20. , , , . Amended Act,-^9th June, 1846,-^Seotion XXI.— ^t r?/B;i Observer. Montreal, October 2, 1848. £ 99 COMMKNTARIES ON No. xviir. to THE KDITOK OF TUB MORNINO COURIER. '.!V. 'W ' Sir, — In No. XVII. I made allusion to the AH" mentary Allowance given to Bankrupts, also the allow- nnce of lOs. per day, a» laid down in the following Section : — ALLOWANCE TO BANKRUPT FOR HIS SUPPORT. Section LXXVIII.— " And be it enacted. That every Bankrupt, duly appearing, attending, and con- forming, according to the provisionn of this Act, shall receive from the Assignees ten shillings per day, for each day's attendance on the Judge, Commissioner, or Assignee, when required; and shall also be allowed, for the necessary support of himself and his family, a sum not exceeding twenty shillings per week for each member of his family, and for such time, not exceeding two months, as the Judge, or Commissioner, shall order." An application for the ten shillings per day by a Bankrupt, never havings to the best of my recollection, come under my notice, I, of course, had no opportunity of seeing the result of such application when brought before the Commissioners. The reading of the Section leads one to suppose that the Bankrupt is allowed ten shillings per day when being *^ put through!* the regular routine of the Bankrupt Court. If such is the meaning, and acted on, hence originates another spoliation of Creditors. I have known instances (where books IHF. BANKULPT ACT. il were in Much a Htate that the Assignee might as well hovu commSDced at the end of the Ledger as at the begining to make a Balance Sheet) where the constant attendance of tho Bankrupts for twentif or thirty days was absolutely necessary to bring the Accounts into ** ship-shape," and prepare the statements required by the Court; during all which period the Alimentary Al- lowance was received, the Bankrupts earning a little from their customary avocations. To remedy this, I would beg to suggest the following alteration : — And be it enacted, That every Bankrupt, duly appearing, attending, and conforming to the provisions of this Act, shall receive from the Assignees, after the expiration of the period during which he shall have been in reeeipt of an Alimentary ^Allowance, a sum at the rate of ten shillings per day for each full day's attendance on the JudgCf Commissionery or Assignees^ when required. In our Court the Alimentary Allowance is generally " ordered^* and paid for two months, which in Estates yielding only some £300 or £400, becomes a matter of serious importance to the Creditors. In all the cases of Bankruptcy which have come under my notice, and they have been numerous, I do not recollect of over two persons who remained unemployed at the expiration of one month from the date of the first meeting of Credi- tors, — many continued gaining a living from the period of the serving of the Summons throughout up to the day of the Certificate being granted. Creditors should not be burthened jn such cases with the support of the Bankrupt, and besides, perhaps, a large family; there- fore, a proviso should be made, that should it be ascer- tained that the Bankrupt, during the period of his 62 COMMENTARIES Otf being required to pass through the routine of the Court, is in receipt of wages, salary, or income, from whatever source derived, sufficient to enable him to support him-> self and family, he shall not be allowed to further en-* croach upon the funds belonging to his Creditors, but shall be paid so much per full day, as the Judge, or Commissioner, shall, in his discretion, order, for the time he may be required to absent himseU* from the business in which he may be engaged, not exceeding ten shiUings per day. .^.i {)},sov/ ■ri^ifr^-*.,..^, I am, Sir, -r-^J - • ••"•*> -_;} i^^ ;,^.,,^ Your obedient servant, ?./-.»/.. c Obsebyeb. . Montreal, October 5, 1848. . > y . , „ ^i^.i'^tv •> ■• ■T>- :^^y^iv^'^'-': v^^^tmi .i- No. XIX. t TO THE EDITOB OF THE UOBNING COUBIEB. >f>r / SiB,— I am of opinion that the following Sections of the Amended Act shou^ be entirely done away with .. . ; '-^fqfOVr'U B^Wifarr;-)-. ..;>^■.'«ft?),HTf*qO#f• << RIGHTS OF THE LESSOR, &C., UNDER LEASES MADE TO PERSONS AFTERWARDS BECOMING BANKRUPT. ' Section VIII. — " And be it enacted, Th^t the lessor of any lands or real property under a lease originally made for more than one year, to a Trader subsequently made a Bankrupt, shall be paid his rent in full to the end of the then current yearly term, pro- THE BANKRUPT ACT. 53 vided the Commission issue three months before the expiration of the said yearly term, from and out of the net proceeds of the personal effects of the Bankrupt, in and upon the said lands and real estate at the date of the the said Commission, after payment of the expenses inci- dent thereto, if the other estate of the Bankrupt be insuf- ficient for the payment of the said expenses, or part thereof ; and at the expiration of the said yearly term, the lease shall be cancelled by the Bankru][*'.cy, unless the Assignee shall declare his option to continue the lease according to its tenor, for the benefit of the Creditors, in which case the lessor shall receive the present value of his rent to the end of the term, which said present value shall be calculated on the rent stipu- lated to be paid by the lease, and the unexpired term of the Lease may be sold, or otherwise dealt with, by the Assignee, as the other property of the Bankrupt.'' " ASSIGNEE MUST ELECT WHETHER HE WILL ACCEPT OR DECLINE ANY LEASE, OR AGREE£fENT FOR A , LEASE. BANKRUPT DISCHARGED PROM FARTHEK J , PAFMENT UNDER JT IP HE DELIVER IT UP AS HEREBY REQUIRED." ,. ,^ ^ ., . . , .., Section IX. — " And be it enacted, That any Bank- rupt entitled to any lease, or agreement for a lease, shall not, if the Assignee accepts the same, be liable to pay any rent, accruing after the date of the Co.n mission, or to be sued in respect to any subsequent non-observ- ance, or non-performance, of the conditions, covenants, or agreements^ therein contained ; and if the Assignee decline the same, shall not be liable as aforesaid, in case he deliver up such lease, or agreement, to the i «-iii 54 COMMENTARIES ON lessor, or the person ageeing to grant a lease, within fourteen days after he shall have had notice that the I Assignee shall have declined as aforesaid i and if the Assignee shall not (upon heing required) elect whether he will accept or decline such lease,or agreement for alease, the lessor or person so agreeing as aforesaid, or any person entitled under such lessor or person so agreeing, shall be entitled to apply, by petition, to the Judge, or Gommis- sioner, who may order him to elect, and to deliver up such lease, or agreement, in case he shall decline the same, and the possession of the premises, or may make such other order therein as he shall think fit." Allowing rent to come in as a privileged claim for 80 long a period as is now permitted by the Bankrupt Act, I consider an inducement to the Trader to be reckless as to what amount of rent he becomes respon- sible for, — should he drive a large and successful business, he will be able to pay; should he not, his Creditors pay. The wealthy landlord refrains from pressing too hard perhaps; allows his tenant to get twelve months in arrears, knowing well that, so long as there is enough on the premises to pay his rent, he is secure — his is a privileged claim. To prevent Traders from endeavoring to keep their " heads above water," by making use of funds properly belonging to the landlord, (the same may be said as to salaries due to Clerks,) I am of opinion that the fol- lowing system, if adopted, would work well: — * Supposing a Commission in Bankruptcy issued on or subsequent to the 1st November, let it be enacted, that the landlord shall not be entitled to any privilege ffeyond the quarter then expired^ supPQsiiig the rent to THE BANKRUPT AOT. 55 be payable quarterly; and should arrears have been al- lowed by him to accumulate beyond the three months preceding, on these arrears he shall come in for his dividend as a common Creditor, — for the remaining six months his claim, of course, to be privileged; should a lease exist, the Assignee should be bound to give immediate notice that he shall relinquish on the 30th A pril succeeding. Supposing the Commission of Bank- ruptcy to issue subsequent to the customary period of giving notice of removal, so as to allow the landlord ample time to advertise notice of let, say 8th January; the Assignee to have power either to arrange with the landlord, in regard to the lease, by allowing a reason- able compensation for the ensuing twelve; months, and 6) ~ /. the estate of the lease, or of doing his best to let t^ premises again for the twelve months at the same, or, if possible, a higher rent, by whicli means the Creditors would not suffer loss. j ,,:,, ,,^, I am. Sir, ,,„. ^ Your obedient servant, .., j- ,. ,.^,,. Obsbbvbr. Montreal, October 11, 1848. ,,. , iti ■-iv"ir~:. ViS' jm •v.'A t' .*un^V^-.Cv"^. No. XX. TO THE EDITOR OP THE MORNING COURIER. ,^ Snt, — Supposing one hundred Commissions of Bank- ruptcy were issued to-morrow against that class of our community denominated small shop-keepers, and who by the Act should he compelled to keep a regular set 56 COMMENTARIES ON of books by Single Entry, how many do you suppose would produce *^ proper books of account, exhibiting, from time to time, the state of his affairs and business?" I venture to assert not ten out of the hundred. When a new law is brought into play a certain degree of leniency, on the part of the Judge, no reasonable Cred- itor will find fault with, — but after a community be- comes acquainted with the consequences of despising the rules laid down for the proper regulation of society, it behoves the Judge to be up and doing, showing those who thus exhibit a contempt of Court that they will be taught to obey, and that the very letter of the following Section will be acted up to:—' j4ct, 9th June, 1846. — Section XX. — " And be it enacted, That if any Bankrupt, after the passing of this Act, shall be found not to have kept, and produced proper Books of Account, exhibiting from time to time, the state of his affairs and business, in the manner and form in which such Books of Account are kept by Traders using the same calling or business as such Bankrupt, he shall not be deemed to have made a full discovery of his estate and effects; and the want, or non-production, of such Books of Account shall be a valid cause for the disallowance, or non-confirmation, of his Certificate." , The Bankrupt, instead of *' exhibiting, yrow time to timet the state of his affairs," should be compelled to produce a regular Annual Profit and Loss Account, for at least two years previous to the date of the Com- mission, either from Books kept by Single or Double Entry, as the case may be. Such a document fyled in Court, and made oath to, would, at a glance, enable THE BANKRUPT ACT. the Creditors to decide as to the Bankrupt's being en- titled to his discharge. I think I have before remarked, that it is bad policy to grant a Bankrupt eithet his Alimentary Allowance or his Certificate in too great a hurry. I am, Sir, , Your obedient servant, --- 'fj Observbb, Montreal, October 12, 1848. . . ■ .. ^ re ■'■^■^ ^h: ;i ^f i> No. XXL '■ TO THE EDITOR OF THE M0BNIM6 COURIER. ! Sir, — Having concluded my remarks on the Amend- ed Act, I shall now take a peep at the ** Rules and Orders and Tariff' of Fees made by the Circuit Judges of the District of Montreal^ and confirmed by the Judges of the Court of Queen* s Bench, on the ^th day of October, lSi6,** ' -^..,1 Order III. — " That the sitting of the Court in bankruptcy shall commence at ten, A. M." Order IV. — ** To insure regularity of proceedings at the sittings of the Court, Summonses returned shall first be called, then Petitions and Summary Proceedings shall be heard, and lastly Commissions and the Meet- ings under them, appointed to be held, shall be pro- peeded with." I have repeatedly heard Creditors complain of valu- able time lost by detention at the Bankrupt Court, 58 C0MMKNT4RIE:a ON M: , !i ■ hi ' ■■'i ■ ' :i i\ fm waiting the appointment of Assignees. It would be well, I think, to introduce the hearing of Petitions and Summary Proceedings after completing the routine re- quired to be gone through under the Commission or Commissions of the day, and also to introduce some system which will compel Creditors to have their claims prepared the day preceding the First Meeting of Creditors for the appointment of Assignees, not, as is customary, to bring them to Court at ten o*clock on the day of Meeting, and employ the Clerk of Court, or an Attorney, to make out the claim, and, perhaps, an Interest Account, thereby detaining those Creditors who have already proved claims, and who are desirous of being at their counting-houses. It is as easy for the Creditor to go to the Clerk of Court, or to his At- torney, the day before the Meeting, and have his claim prepared, as to . delay to the last, prejudicing thereby his own, and his neighbor's interest. I am, Sir, Your obedient servant, Obsbbybb. Montreal, October 19, 1848. No. XXII. TO THB ¥^D;T0R of THE MORNING COURIER. Sir, — The next subjects requiring notice in the " Rules and Orders" are — Order No. XV. — " So soon as an Assignee shall have duly signified his acceptance of the office, the THE BANKRUPT A-CT. 59 would be tions and DUtine re- aission or luce some ave their Meeting of not, as is o'clock on ' Court, or erhaps, an Creditors re desirous as easy for to his At- e his claim ng thereby ISSBVEB. URIER. •tice in the isignee shall office, the Clerk shall forthwith cause to be delivered to him, or to his Attorney, a duplicate of the instrument required to be made in that behalf, together with the requisite Order or Process of Court, to put him in possession of the Estate of the Bankrupt, and the Deeds, Books of Account, and papers relating thereto." No. XVL— "That the Assignee shall forthwith, after receiving tb*- s? Estate, sort and : :~"*>fe?r the said Deeds, Books oi Acwount, and papers, and enter them in a Register Estate Book, to be by him kept for the said Estate, and a list thereof shall be by him made and delivered to the Clerk of the Court, to be fyled in the Record of Proceedings in the case." In addition, I would beg to suggest that the ** requi- site Order or Process of Court" should contain an order on the Sheriff to, at the same time, deliver to the As- signee a copy of the Inventory of the Stock of the Bankrupt, as taken by the Bailiff, duly completed and subscribed as by law required. Should it be decided in the framing of a new Bank- rupt Act that Sheriff's Officers are to be employed, I would suggest, seeing the long period in which the Estate of the Bankrupt remains in their keep, as it were a dead letter, that, instead of the Assignee being taxed, as laid down in Order No. XVI., to the retarding of his progressing with the Estate, the Bailiff shall, during the period of his being in possession of the Estate of the Bankrupt, " sort and number the said Deeds, Books of Accounts, and papers, and enter them in a (Sheriff's J Register Estate Book, to be by him kept for all Estates, (in Bankruptcy,) and a list thereof shall be by him" attached to the Inventory of seizure 60 COMMENTARIES 017 I- of said Estate, to be delivered to the Clerk of Court, duplicate, of course, being handed to the Assignee, who grants a receipt therefor, thereby becoming responsible for contents of said list. The Bankrupt to be com- pelled to describe his Books, Deeds, and papers to the Bailiff. I am. Sir, Tour obedient servant, Obberveb. Montreal, October 23, 1848. I' ; ; i No. XXIII TO THE EDITOR OF THE MORNINO COURIER. Sir,— In the " Tariff of Fees in Bankruptcy" the Solicitor, or Attorney, is allowed, " for drawing and fyling each claim. Us. 8d. The printed forms used for ** drawing** (so termed) cost Is. 3d. per dozen, and, generally speaking, the filling up of a blank form oc- cupies about ten minutes time. The poor man's claim generally runs from £5 to £10. Supposing he pays his Attorney 1 Is. 8d. for filling up his claim and fyling it with the Clerk of Court — he then pays the Clerk of Court, for receiving the claim and endorsing it, say Is. 3d., amounting, in all, to £0 12 11 and supposing the dividend realized Is. per £ on his claim, of £10, the poor man re- ceives 10 thereby adding to his previous loss £0 2 11 tllK PANKitUPT ACT. 61 f Court, lee, who poDsible be com- rs to the BBVBB* RXEK. btcy" the kwing and brms used ozen, and, : form oc- lan's claim ig he pays andfyling e Clerk of ing it, say £0 12 11 10 £0 2 11 (two nnd eleven -po-nce) besides lost time. To remedy this, a scale of charges should be established to meet the circumstance of all 'svho happen to be imder the necessity of having reeource to the Bankrupt Court to recover what may be forthcoming. I would beg to suggest the following to tiie Solicitor, or Attorney, for filling up each claim: — under £10, 2s. 6d. ; over £10 and under £20, 5s. j £20 and under £50, 6s. 3d.; £50 and over, 7s. 6d. A sharp young Lawyer, making himself intimate with this department, and having an office in the proximity of the Court-House, and giving due notice, by advertisement and otherwise, could, I think, easily earn from £200 to £300 a-year, in pre- paring claims for fyling in Bankruptcy, charging 2s. 6d. to 5s. for each. The Sheriff is allowed — 1st, "For each Commission delivered to him, and return thereof, £1 5s.;" 2nd, ** All actual disbursements for advertising, all disburse- ments for taking charge of the Estate until delivered to the Assignee, to be subject to the discretion of the Judge;" 3rd, " All services of Summons, Orders, or Rules, 2s. 6d.;" 4th, "Mileage in all cases, for each league's distance from the Court-House, out and in, 2s,. 6d.;" 6th, "For each day's seizure under the Commission of Bankruptcy, 15s.;" 6th, " For taking Inventory of the Estate and Copy, 10s.;" 7th, "For executing every Warrant of Attachment, 5s.;" 8th, ** Poundage — 1 per cent, on the proceeds of Personal Estate received by the Sheriff, amounting to £1,000, — and on such proceeds exceeding £1,000, poundage of 1 J per cent., provided such last poundage do not ex- €» CoMMENTARTES ON THK KANICRIJI'T ACT. If: Tji.j,' if t[x coed £20 currency, — the said poundage payable to the Sheriff as the Estate shall be realizetl.** I should like to see a return made by the Slierift', and the Officers attached to the Sheriff's Court, of the amoimt of all moneys received by them in connection with the Bankrupt Court since the beginning oi' 184G. Further comment on the Tariff of ITees in Bankruptcy I consider at present unnecessary, save that they have been too long iu existence; they are now under review in good hands, and no doubt will be either abolished or considerably modified, in order to meet with the nakedness of the land. " To the Clerk of the Bankrupt Courts hisfeesy as specially/ allowed by the Statute" any one conversant with the duties he has to perform, and the responsibility of his office, will admit, on looking over the rate of fees allowed to him, that they are exceedingly moderate. I have now concluded my Commentaries on the Bankrupt Act, Eules of Practice, &c., and I sincerely hope that my humble endeavors to create a more ef- cient system may prove advantageous to the country at large. I am, Sir, Your obedient servant, Observek. Montreal, October 24, 1848. able to the :he Sheritt*, mrt, of the connection Qgof 184G. Bankruptcy ; tbey have ider review iv abolished it with the , Ms fees, as conversant ssponsibility ' the rate of ly moderate, ries on the 1 1 sincerely e a more ef - the coujitry nt, )bservek.