(bancus ruptus), is so called, because, when the bank or stock is broken or exhausted, the owner is said to be a bankrupt. And this word bankrupt is derived from the French bank route, which signifies a breaking or failing in the world: banque in French is as much as mensa in Latin, and route is the same as vegigium; and this term is said to be taken originally from the Roman mensaritis, which were set in public places; and when a tradesman flipped away, with an intention to deceive his creditors, he left only some vegigia or signs of his table or shop behind him. But a bankrupt with us, from the several descriptions given of him in our statute-law, may be defined "a trader, who secretes himself, or does certain other acts tending to defraud his creditors." For the better understanding of this article, it will be proper to consider, 1. Who may become a bankrupt: 2. What acts make a bankrupt: 3. The proceedings on a commission of bankruptcy: and, 4. In what manner an estate in goods and chattels may be transferred by bankruptcy.—But of these, the two last being treated under the article Commission of Bankruptcy, the two first only belong to this place.

1. A bankrupt was formerly considered merely in the light of a criminal or offender; and in this spirit we are told by Sir Edward Coke, that we have fetched as well the name, as the wickedness, of bankrupts 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 closely to the example of the Roman law. We mean not the Comm. II. 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 a very butcherly a light; which many learned men have Bankrupt. with reason doubted. Nor do we 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 labour, at the mercy of his rigid creditor; and sometimes selling him, his wife, and children, to perpetual foreign slavery trans Tiberim (a): an oppression which produced so many popular insurrections, and secessions to the mons facer. But we 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 gaol, "omni quoque corporali cruciati semota." For, as the emperor justly observes, "inhumanam erat spatulation 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 afterwards enacted, 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 debt without the power of payment, they must take the consequences of their own indiscretion, even though they meet with 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 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 not sufficient fund, the dishonesty and injustice is the greater. He cannot therefore murmur, if he suffers the punishment which he has voluntarily drawn upon himself. But in mercantile transactions the case is far otherwise. Trade cannot 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.

In the interpretation of the several statutes made concerning English bankrupts *, it hath been held, that *34 Hen. buying only, or selling only, will not qualify a man to be a bankrupt; but it must be both buying and selling, and also getting a livelihood by it; as, by exercise, fixing the calling of a merchant, a grocer, a mercer, or Geo. II. in one general word, a chapman, who is one that buys & sells anything. But no handicraft occupation (where nothing is bought or sold, and therefore an extensive credit, for the stock in trade, is not necessary to be had) will make a man a regular bankrupt; as that of a husbandman, a gardener, and the like, who are paid for their work and labour. Also an innkeeper cannot, as such, be a bankrupt; for his gain or livelihood does not arise from buying and selling in the way of merchandise, but greatly from the use of his rooms and furniture, his attendance, and the like; and though he may buy corn and victuals, to sell again at a profit, yet that no more makes him a trader, than a schoolmaster or other person is, that keeps a boarding-house, and makes considerable gains by buying and selling what he spends in the house; and such a one is clearly not within the statutes. But where persons buy goods, and make them up into saleable commodities, as shoemakers, smiths, and the like; here, though part of the gain is by bodily labour, and not by buying and selling, yet they are within the statutes of bankrupts; for the labour is only in melioration of the commodity, and rendering it more fit for sale.

2. To learn what the acts of bankruptcy are which render a man a bankrupt, we must consult the several statutes, and the resolutions formed by the courts thereon. Among these may therefore be reckoned,

1. Departing from the realm, whereby a man withdraws himself from the jurisdiction and coercion of the law, with an intent to defraud his creditors. 2. Departing from his own house, with intent to secrete himself and avoid his creditors. 3. Keeping in his own house, privately, (except for just and necessary cause), so as not to be seen or spoken with by his creditors; which is likewise contrived to be an intention to defraud his creditors, by avoiding the process of the law. 4. Procuring or suffering himself willingly to be arrested, or outlawed, or imprisoned, without just and lawful cause; which is likewise deemed an attempt to defraud his creditors. 5. Procuring his money, goods, chattels, and effects, to be attached or sequestrated by any legal process; which is another plain and direct endeavour to disappoint his creditors of their security. 6. Making any fraudulent conveyance to a friend, or secret

(a) In Pegu, and the adjacent countries in East India, the creditor is intitled to dispose of the debtor himself, and likewise of his wife and children: infomuch 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. Bankrupt, secret trustee, of his lands, tenements, goods, or chattels; which is an act of the same suspicious nature with the last. 7. Procuring any protection, not being himself privileged by parliament, in order to screen his person from arrest; which also is an endeavour to elude the justice of the law. 8. Endeavouring, or deferring, by any petition to the king, or bill exhibited in any of the king's courts against any creditors, to compel them to take less than their just debts; or to procrastinate the time of payment originally contracted for; which are an acknowledgment of either his poverty or his knavery. 9. Lying in prison for two months, or more, upon arrest or other detention for debt, without finding bail, in order to obtain his liberty. For the inability to procure bail argues a strong deficiency in his credit, owing either to his suspected poverty or ill character; and his neglect to do it, if able, can arise only from a fraudulent intention: in either of which cases, it is high time for his creditors to look to themselves, and compel a distribution of his effects. 10. Escaping from prison after an arrest for a just debt of £100, or upwards. For no man would break prison that was able and desirous to procure bail; which brings it within the reason of the last case. 11. Neglecting to make satisfaction for any just debt to the amount of £100, within two months after service of legal process, for such debt, upon any trader having privilege of parliament.

These are the several acts of bankruptcy expressly defined by the statutes relating to this article; which being so numerous, and the whole law of bankrupts being an innovation on the common law, our courts of justice have been tender of extending or multiplying acts of bankruptcy by any construction or implication. And therefore Sir John Holt held, that a man's removing his goods privately to prevent their being seized in execution, was no act of bankruptcy. For the statutes mention only fraudulent gifts to third persons, and procuring them to be seized by sham process, in order to defraud creditors: but this, though a palpable fraud, yet, falling within neither of those cases, cannot be adjudged an act of bankruptcy. So also it has been determined expressly, that a banker's stopping or refusing payment is no act of bankruptcy: for it is not within the description of any of the statutes; and there may be good reasons for his so doing, as suspicion of forgery, and the like: and if, in consequence of such refusal, he is arrested, and puts in bail, still it is no act of bankruptcy; but if he goes to prison, and lies there two months, then, and not before, is he become a bankrupt.

As to the consequences resulting from the unhappy situation of a bankrupt, see the article Commission of Bankruptcy.