Domestic Encyclopædia (1802)/Commission of Bankruptcy
COMMISSION OF BANKRUPTCY, is that issued by the Lord Chancellor, on persons becoming bankrupt within any of the statutes, and directed to certain commissioners, who are appointed to examine into it, and to secure the bankrupt's lands and effects, for the satisfaction of his creditors.—See Bankrupt.
The proceedings on a Commission of Bankruptcy relate, 1. either to the bankrupt himself; or, 2. to his property.
1. In the former case, a petition should be presented to the Lord Chancellor, by a creditor to the amount of 100l. or by two, to the value of 150l.; or by three, or more, to that of 200l.; in consequence of which, he grants a commission to certain persons denominated Commissioners of Bankrupt. The petitioners are bound in a security of 200l. to make the party amends, in case they do not prove him bankrupt. And if they receive any of the bankrupt's money, or effects, as a recompense for sueing out the commission, so as to obtain more than their due proportion of his estate, they forfeit the same, together with their whole debt.
On receiving their commission, the commissioners first ascertain whether the bankrupt was a trader, within the meaning of the bankrupt laws, and had committed an act of bankruptcy; and, if it be so proved, declare him bankrupt, notice in the Gazette, and appoint three meetings for the creditors. At one of these meetings are chosen, by a majority (in value) of creditors, the assignees, or persons in whom the bankrupt's estate shall be vested for their benefit. And, at the third meeting, which must be on the 42d day, at farthest, after the advertisement in the Gazette (unless the time for his surrender be especially enlarged), the bankrupt, on notice being served personally on him, or lett at his place of abode, must surrender himself to the commissioners, and thenceforth conform in every respect to the directions of the statutes of bankruptcy; or, in default thereof, he is guilty of felony, without benefit of clergy, suffers death, and his effects are divided among his creditors.
When the bankrupt appears, the commissioners are to examine him concerning his trade and effects; and if he give a false statement, or conceal any property to the value of 20l. or withhold any books or writings, in order to defraud his creditors, he is also guilty of felony, without benefit of clergy. But, if the bankrupt has made a true discovery, conformed to the directions of the statutes, and acted to the satisfaction of his creditors, and they (or four-fifths of them in number and value) will sign a certificate to that purport, the commissioners are to authenticate the same under their hands and seals, and transmit it to the Chancellor; who, or two judges appointed by him, on oath made by the bankrupt, that such certificate was not fraudulently obtained, may allow the same, or disallow it, upon cause shewn by any of the creditors. If no cause be shewn, the certificate is granted, and the bankrupt is entitled to an allowance out of his effects, in proportion to the dividend paid. In consequence of such certificate, he is discharged from every debt owing by him at the time he became a bankrupt.
2. With respect to the proceedings affecting the bankrupt's property, the assignees may pursue any legal remedy for getting possession of the same, but cannot commence a suit in equity, compound debts owing to the bankrupt, nor refer matters to arbitration, without the consent of the major part, in value, of the creditors. As soon as they have collected all the effects, and converted them into money, they must, within twelve months after the issuing of the commission, give twenty-one days notice to the creditors, of a meeting for a dividend, or distribution, at which time they are to produce their accounts, and verify them on oath, if required. A dividend of so much in the pound is then to be made equally and rateably to all who have already ascertained, or may then prove, their debts. Within eighteen months after the commission issued, a second and final dividend is to be made, unless all the effects were exhausted by the first. And if any surplus remain after satisfying all the creditors, it shall be restored to the bankrupt.
For a more complete account of the law now in force relative to bankrupts, we refer our readers to Mr. Cooke's Bankrupt Laws, 8vo. 2 vols. 16s. and to Mr. Cullen's Principles of Bankrupt Law, 8vo. 10s. 6d. in which the provisions of the legislature, and the judicial decisions, are fully and perspicuously stated.