BANKRUPT. A person who has committed an act of bankruptcy; one who has done some act or suffered some act to be done in consequence of which, under the laws of his country, he is liable to be proceeded against by his creditors for the seizure and distribution among them of his entire property. Ashby v. Steere, 2 Woodb. & M. 347, 2 Fed. Cas. 15; In re Scott, 21 Fed. Cas. 803; U. S. v. Pusey, 27 Fed. Cas. 632.
A trader who secretes himself or does certain other acts tending to defraud his creditors. 2 Bl. Comm. 471.
In a looser sense, an insolvent person; a broken-up or ruined trader. Everett v. Stone, 3 Story, 453, Fed. Cas. No. 4,577.
A person who, by the formal decree of a court, has been declared subject to be proceeded against under the bankruptcy laws, or entitled, on his voluntary application, to take the benefit of such laws.
BANKRUPT LAW. A law relating to bankrupts and the procedure against them in the courts. A law providing a remedy for the creditors of a bankrupt, and for the relief and restitution of the bankrupt himself.
A bankrupt law is distinguished from the ordinary law between debtor and creditor, as involving these three general principles: (1) A summary and immediate seizure of all the debtor's property; (2) a distribution of it among the creditors in general, instead of merely applying a portion of it to the payment of the individual complainant; and (3) the discharge of the debtor from future liability for the debts than existing.
The leading distinction between a bankrupt law and an insolvent law, in the proper technical sense of the words, consists in the character of the persons upon whom it is designed to operate;—the former contemplating as its objects bankrupts only, that is, traders of a certain description; the latter, insolvents in general, or persons unable to pay their debts. This has led to a marked separation between the two systems, in principle and in practice, which in England has always been carefully maintained, although in the United States it has of late been effectually disregarded. In further illustration of this distinction, it may be observed that a bankrupt law, in its proper sense, is a remedy intended primarily for the benefit of creditors; it is set in motion at their instance, and operates upon the debtor against his will, (in invitum,) although in its result it effectually discharges him from his debts. An insolvent law, on the other hand, is chiefly intended for the benefit of the debtor, and is set in motion at his instance, though less effective as a discharge in its final result. Sturges v. Crowinshield, 4 Wheat. 194. 4 L. Ed. 529; Vanuxen v. Hazlehursts, 4 N. J. Law, 192, 7 Am. Dec. 582; Adams v. Storey, 1 Paine, 79, 1 Fed. Cas. 142; Kunzler v. Kohaus, 5 Hill (N. Y.) 317.
The only substantial difference between a strictly bankrupt law and an insolvent law lies in the circumstance that the former affords relief upon the application of the creditor, and the latter upon the application of the debtor. In the general character of the remedy, there is no difference, however much the modes by which the remedy may be administered may vary. Martin v. Berry, 37 Cal. 222.
BANKRUPTCY. 1. The state or condition of one who is a bankrupt; amenability to the bankrupt laws; the condition of one who has committed an act of bankruptcy, and is liable to be proceeded against by his creditors therefor, or of one whose circumstances are such that he is entitled, on his voluntary application, to take the benefit of the bankrupt laws. The term is used in a looser sense as synonymous with "insolvency,"—inability to pay one's debts; the stopping and breaking up of business because the trader is broken down, insolvent, ruined. Phipps v. Harding, 70 Fed. 468, 17 C. C. A. 203, 30 L. R. A. 513; Arnold v. Maynard, 2 Story, 354, Fed. Cas. No. 561; Bernhardt v. Curtis, 109 La. 171, 33 South. 125, 94 Am. St. Rep. 445.
2. The term denotes the proceedings taken under the bankrupt law, against a person (or firm or company) to have him adjudged a bankrupt, and to have his estate administered for the benefit of the creditors, and divided among them.
3. That branch of jurisprudence, or system of law and practice, which is concerned with the definition and ascertainment of acts of bankruptcy and the administration of bankrupts' estates for the benefit of their creditors and the absolution and restitution of bankrupts.
As to the distinction between bankruptcy and insolvency, it may be said that insolvent laws operate at the instance of an imprisoned debtor; bankrupt laws, at the instance of a creditor. But the line of partition between bankrupt and insolvent laws is not so distinctly marked as to define what belongs exclusively to the one and not to the other class of laws. Sturges v. Crowninshield, 4 Wheat. 122, 4 L. Ed. 529.
Insolvency means a simple inability to pay, as debts should become payable, whereby the debtor's business would be broken up; bankruptcy means the particular legal status, to be ascertained and declared by a judicial decree. In re Black, 2 Ben. 196, Fed. Cas. No. 1.457.
Classification. Bankruptcy (in the sense of proceedings taken under the bankruptcy law) is either voluntary or involuntary; the former where the proceeding is initiated by the debtor's own petition to be adjudged a bankrupt and have the benefit of the law (In re Murra [D. C.] 96 Fed. 600; Metsker v. Bonebrake, 108 U. S. 66, 2 Sup. Ct. 351, 27 L. Ed. 654), the latter where he is forced into bankruptcy on the petition of a sufficient number of his creditors.
—Act of bankruptcy, see Act.—Adjudication of bankruptcy. The judgment or decree of a court having jurisdiction, that a person against whom a petition in bankruptcy has been filed, or who has filed his voluntary petition, be ordered and adjudged to be a bankrupt.—Bankruptcy courts. Courts for the administration of the bankrupt laws. The present English bankruptcy courts are the London bankruptcy court, the court of appeal, and the local bankruptcy courts created by the bankruptcy act, 1869.—Baukruptcy proceedings. The term includes all proceedings in a federal court having jurisdiction in bankruptcy, founded on a petition in bankruptcy and either directly or collaterally involved in the adjudication and discharge of the bankrupt and the collection and administration of his estate. Kidder v. Horrobin, 72 N. Y. 167.
BANLEUCA. An old law term, signifying a space or tract of country around a
