by the rules of the common law), but also interest and all charges, to be computed from the time of making such protest. But if no protest be made or notified to the drawer, and any damage accrues by such neglect, it shall fall on the holder of the bill. The bill, when refused, must be demanded of the drawer as soon as conveniently may be; for though, when one [470] draws a bill of exchange, he subjects himself to the payment, if the person on whom it is drawn refuses either to accept or pay, yet that is with this limitation, that if the bill be not paid when due, the person to whom it is payable shall in convenient time give the drawer notice thereof; for, otherwise, the law will imply it paid; since it would be prejudicial to commerce if a bill might rise up to charge the drawer at any distance of time, when, in the mean time, all reckonings and accounts may be adjusted between the drawer and the drawee.y Notice of dishonor. Relative liabilities of parties to a If the bill be an indorsed bill, and the indorsee can not get the drawee to discharge it, he may call upon either the drawer or bill or note. the indorser, or, if the bill has been negotiated through many hands, upon any of the indorsers; for each indorser is a warrantor for the payment of the bill, which is frequently taken in payment as much (or more) upon the credit of the indorser as of the drawer. And if such indorser, so called upon, has the names of one or more indorsers prior to his own, to each of whom he is properly an indorsee, he is also at liberty to call upon any of them to make him satisfaction; and so upward. But the first indorser has nobody to resort to but the drawer only." What has been said of bills of exchange is applicable also to promissory notes that are indorsed over, and negotiated from one hand to another; only that in this case, as there is no drawee, there can be no protest for non-acceptance; or, rather, the law considers a promissory note in the light of a bill drawn by a man upon himself, and accepted at the time of drawing. And in case of non-payment by the drawer, the several indorsees of a promissory note have the same remedy as upon bills of exchange against the prior indorsers. * Lord Raym., 993. (66) The holder of the bill may bring actions against the accepter, drawer, and all the indorsers at the same time; but though he may obtain judgments in all the actions, yet he can recover but y Salk., 127. one satisfaction for the value of the bill; but he may sue out execution against all the rest for the costs of their respective actions. (Bayley, 43.)-[CHRISTIAN.]* *The holder of a promissory note may proceed in like manner in New York; but he may also, if he chooses, bring only one suit, and include in it all or any of the parties to the bill or note. The mode of proceeding is regulated by statute of 1832, ch. 276; see, also, 2 R. S., 274–276, 2d ed. 568 CHAPTER XXXI. OF TITLE BY BANKRUPTCY. THE preceding chapter having treated pretty largely of the acquisition of personal property by several commercial methods, we from thence shall be easily led to take into our present consideration a tenth method of transferring property, which is that of bankruptcy. X. Bankruptcy; a title which we before lightly touched X. Title by upon,a so far as it related to the transfer of the real estate of the bankrupt. At present we are to treat of it more minutely, as it principally relates to the disposition of chattels, in which the property of persons concerned in trade more usually consists, than in lands or tenements.' Let us, therefore, first of all consider, 1. Who may become a bankrupt; 2. What acts make a bankrupt; 3. The proceedings on a commission of bankrupt; and, 4. In what manner an estate in goods and chattels may be transferred by bankruptcy. become a 1. Who may become a bankrupt. A bankrupt was beforeb 1. Who may defined to be "a trader who secretes himself, or does certain bankrupt. other acts tending to defraud his creditors." He was formerly considered merely in the light of a criminal or offender ;c2 and in this spirit we are told by Sir Edward Coke,d that we have fetched as well the name as the wickedness of bankrupts See page 285. b Ibid. (1) For the existing law of bankrupt cy, see the note at the end of this chap ter. c Stat. 1 Jac. I., c. 15, § 17. creditors their debts and duties, but at their own wills and pleasures consume the substance obtained by credit of other men, for their own pleasure and del(2) Throughout the first three stat- icate living, against all reason, equity, utes the bankrupt is uniformly called an and good conscience." The bankrupt offender, and the original design of the being deemed an offender, and being bankrupt laws appears to have been to completely divested of the disposition prevent and defeat the frauds of crimin- of his property, these statutes at the al debtors; for the 34 & 35 Hen. VIII., first would naturally be considered pec. 4, the first bankrupt statute, begins nal statutes; for this reason, I presume, with this preamble: "Whereas divers the 21 Jac. I., c. 19, begins by declarand sundry persons craftily obtaining ing that "the aforesaid statute shall be into their hands great substance of other largely and beneficially construed and men's goods, do suddenly flee to parts expounded for the aid and relief of the unknown, or keep their houses, not creditors."-[CHRISTIAN.] minding to pay or restore to any their [472] from foreign nations. But at present the laws of bankruptcy are considered as laws calculated for the benefit of trade, and founded on the principles of humanity as well as justice; and to that end they confer some privileges not only on the creditors, but also on the bankrupt or debtor himself. On the creditors, by compelling the bankrupt to give up all his effects to their use without any fraudulent concealment; on the debtor, by exempting him from the rigor of the general law, whereby his person might be confined at the discretion of his creditor, though in reality he has nothing to satisfy the debt; whereas the law of bankrupts, taking into consideration the sudden and unavoidable accidents to which men in trade are liable, has given them the liberty of their persons, and some pecuniary emoluments, upon condition they surrender up their whole estate to be divided among their creditors. In this respect our legislature seems to have attended to the example of the Roman law. I mean not the terrible law of the Twelve Tables, whereby the creditors might cut the debtor's body into pieces, and each of them take his proportionable share; if, indeed, that law, de debitore in partes secando, is to be understood in so very butcherly a light; which many learned men have with reason doubted.f Nor do I mean those less inhuman laws (if they may be called so, as their meaning is indisputably certain), of imprisoning the debtor's person in chains; subjecting him to stripes and hard labor at the mercy of his rigid creditor; and sometimes selling him, his wife, and children to perpetual foreign slavery trans Tiberim;g an op[473] pression which produced so many popular insurrections and secessions to the mons sacer. But I mean the law of cession, introduced by the Christian emperors; whereby, if a debtor ceded, or yielded up all his fortune to his creditors, he was secured from being dragged to a jail, "omni quoque corporali cruciatu semoto." For, as the emperor justly observes, “inhumanum erat spoliatum fortunis suis in solidum damnari.” Thus far was just and reasonable; but, as the departing from one extreme is apt to produce its opposite, we find it afterward • The word itself is derived from the word bancus, or banque, which signifies the table or counter of a tradesman (Dufresne, i., 969), and ruptus, broken; denoting thereby one whose shop or place of trade is broken and gone; though others rather choose to adopt the word route, which in French signifies a trace or track, and tell us that a bankrupt is one who hath removed his banque, leaving but a trace behind.(4 Inst., 277.) And it is observable that the title of the first English statute concerning this offense, 34 Henry VIII., c. 4, "against such persons as do make bankrupt," is a literal transla tion of the French idiom, qui font banque route. Taylor, Comment., in L. decemvi ral. Bynkersh., Observ. Jur., i., 1. Heinecc., Antiq., iii., 30, 4. In Pegu, and the adjacent countries in East India, the creditor is entitled to dispose of the debtor himself, and likewise of his wife and children; insomuch that he may even violate with impunity the chastity of the debtor's wife; but then, by so doing, the debt is understood to be discharged.-(Mod. Un. Hist., vii., 128.) h Cod., 7, 71, per tot. enacted,k that if the debtor by any unforeseen accident was reduced to low circumstances, and would swear that he had not sufficient left to pay his debts, he should not be compelled to cede or give up even that which he had in his possession; a law which, under a false notion of humanity, seems to be fertile of perjury, injustice, and absurdity. The laws of England, more wisely, have steered in the middle between both extremes; providing at once against the inhumanity of the creditor, who is not suffered to confine an honest bankrupt after his effects are delivered up, and, at the same time, taking care that all his just debts shall be paid so far as the effects will extend. But still they are cautious of encouraging prodigality and extravagance by this indulgence to debtors, and therefore they allow the benefit of the laws of bankruptcy to none but actual traders; since that set of men are, generally speaking, the only persons liable to accidental losses, and to an inability of paying their debts without any fault of their own. If persons in other situations of life run in Persons subject to the debt without the power of payment, they must take the conse- bankrupt quences of their own indiscretion, even though they meet with laws. sudden accidents that may reduce their fortunes; for the law holds it to be an unjustifiable practice for any person but a trader to encumber himself with debts of any considerable value. If a gentleman, or one in a liberal profession, at the time of [474] contracting his debts, has a sufficient fund to pay them, the delay of payment is a species of dishonesty, and a temporary injustice to his creditor; and if, at such time, he has no sufficient fund, the dishonesty and injustice is the greater. He can not, therefore, murmur if he suffers the punishment which he has voluntarily drawn upon himself. But in mercantile transactions the case is far otherwise. Trade can not be carried on without mutual credit on both sides; the contracting of debts is, therefore, here not only justifiable, but necessary. And if by accidental calamities, as, by the loss of a ship in a tempest, the failure of brother traders, or by the non-payment of persons out of trade, a merchant or trader becomes incapable of discharging his own debts, it is his misfortune, and not his fault. To the misfortunes, therefore, of debtors, the law has given a compassionate remedy, but denied it to their faults; since, at the same time that it provides for the security of commerce, by enacting that every considerable trader may be declared a bankrupt, for the benefit of his creditors as well as himself, it has also (to discourage extravagance) declared that no one shall be capable of being made a bankrupt, but only a trader; nor capable of receiving the full benefit of the statutes, but only an industrious trader. The first statute made concerning any English bankrupts The first was 34 Hen. VIII., c. 4, when trade began first to be properly Act, 34 Hen. * Nov., 135, c. 1. Bankrupt VIII., c. 4 " I., c. 19. denizens. Bankers, brokers, and factors. cultivated in England; which has been almost totally altered by statute 13 Eliz., c. 7, whereby bankruptcy is confined to such persons only as have used the trade of merchandise, in gross or by retail, by way of bargaining, exchange, rechange, bartering, chevisance, or otherwise; or have sought their living Stat. 21 Jac. by buying and selling. And by statute 21 Jac. I., c. 19, persons using the trade or profession of a scrivener, receiving other men's moneys and estates into their trust and custody, are also made liable to the statutes of bankruptcy; and the bene[475] fits, as well as the penal parts of the law, are extended as well Aliens and to aliens and denizens as to natural-born subjects; being intended entirely for the protection of trade, in which aliens are often as deeply concerned as natives. By many subsequent statutes, but, lastly, by statute 5 Geo. II., c. 30,m bankers, brokers, and factors are declared liable to the Statute of Bankruptcy; and this upon the same reason that scriveners are included by the statute of James I., viz., for the relief of their creditors; whom they have otherwise more opportunities of defrauding than any other set of dealers; and they are properly to be looked upon as traders, since they make merchandise of money in the same manner as other merchants do of goods and other movable chattels. But, by the same act," no farmer, grazier, or graziers, and drover shall (as such) be liable to be deemed a bankrupt; for, though they buy and sell corn, and hay, and beasts, in the course of husbandry, yet trade is not their principal, but only a collateral, object; their chief concern being to manure and till the ground, and make the best advantage of its produce. And, besides, the subjecting them to the laws of bankruptcy might be a means of defeating their landlords of the security which the law has given them, above all others, for the payment of their reserved rents; wherefore, also, upon a similar reason, a receiver of the king's taxes is not capable, as such, of being a bankrupt; lest the king should be defeated of those extensive remedies against his debtors which are put into his hands by Petitioning the prerogative. By the same statute,P no person shall have a commission of bankrupt awarded against him, unless at the petition of some one creditor, to whom he owes £100; or of two, to whom he is indebted £150; or of more, to whom altogether he is indebted £200. For the law does not look upon persons whose debts amount to less, to be traders considerable enough either to enjoy the benefit of the statute themselves, or to entitle the creditors, for the benefit of the public commerce, to demand the distribution of their effects. Farmers, drovers ex cepted. creditor's debt. [476] What is a trading. In the interpretation of these several statutes, it hath been held that buying only, or selling only, will not qualify a man to be a bankrupt; but it must be both buying and selling, and · 1 That is, making contracts.- (Du fresne, ii., 569.) m § 39. n § 40. |