If the bill be an indorsed bill, and the indorsee cannot get the drawee to discharge it, he may call upon either the drawer or 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 often 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 upwards. 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 maker, the several indorsers of a promissory note have the same remedy, as upon bills of exchange against the prior indorsers.

CHAPTER XXVII.

OF TITLE BY BANKRUPTCY.

IX. A NINTH method of transferring property, is that of bankruptcy; a title already touched upon, so far as it relates to the transfer of the real estate of the bankrupt. It is now to be treated more minutely, as it principally relates to the disposition of chattels, in which the property of persons concerned in trade generally consists.

1. A bankrupt has been defined to be a trader who secretes "himself or does certain other acts, with intent to defeat or "delay his creditors." He was formerly looked upon as a criminal or offender: and in this spirit we are told by 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 annoyance of legal proceedings when he has nothing to satisfy the debt. Till quite recently the law allowed the benefit of bankruptcy to none but traders: justly considering, that if persons in other situations of life ran in debt without the power of payment, they should take the consequences of their own indiscretion, even though they met with sudden accidents that might reduce their fortunes. And the position of those debtors who were not entitled to the benefit of the bankrupt laws, was, consequently, one of great hardship. For as a judgment creditor had a right to cause the person of the debtor to be detained in prison until he satisfied the claim, the unhappy debtor might possibly be detained for years in hopeless confinement. This, indeed, became so common an occurrence, that special acts of parliament were passed for the liberation of these insolvents. These statutes were at first only temporary in their nature, and partial in their operation; and the evil remained unabated until 1813, when tne relief of insolvent prisoners was permanently provided for, and ultimately administered according to a regular system in the court for the relief of insolvent debtors.

The proceedings therein were analogous to those in a bankruptcy, with one essential point of difference; that whereas the bankrupt was relieved from all claims upon him whatever, the insolvent remained burdened with the whole of the debts, which his property was unequal to discharge; and all future acquisitions which he might make were for the benefit of his creditors until they were fully paid. The result was that a trader, however reckless, could, as a bankrupt, be freed from all his obligations; while a non-trader, however unfortunate, had no means of escape from the pressure of his liabilities.

The palpable injustice which often resulted from this state of the law, led at last in 1861 to the subjection of all debtors, whatever to the bankrupt laws: the sole distinction between traders and non-traders now consisting in this, that what constitutes

an act of bankruptcy in the one, is not necessarily an act of bankruptcy in the other. For what acts a man may be made a bankrupt, reference must be had to the several statutes on this subject, and the resolutions formed by the courts thereon.

The first proceeding in a bankruptcy is the filing of the petition, either by the debtor himself, or by a creditor or creditors whose debts amount to £50, on which the court either makes what is called a " Receiving Order," for the protection of the estate, or dismisses the petition.

A petition must be prosecuted in the court of the district in which the debtor resides or carries on his business; but the proceedings may be transferred from any one court to any other, or may be prosecuted in London at the request of the creditors, or if the High Court shall so order.

The petition must be verified by affidavit, and served upon the debtor; that he may have an opportunity of disputing the statements therein contained, at the hearing. These statements are usually the debt, the trading, if the debtor be a trader, and the act or acts of bankruptcy; and they are to be carefully investigated, and, if they cannot be sworn to, proved by witnesses, before the debtor is called upon to answer.

The debtor if he intends to dispute any of the statements in the petition, must give notice, stating which of the matters he intends to dispute; and, if disputed, all these matters must be again proved, the attendance of all witnesses, and the production of all documents being enforced by process of the court, if neces

sary.

The Receiving Order, when made, operates to vest all the property of the debtor in the proper Official Receiver of the court or district. It also ipso facto stays all pending proceedings against the debtor for any debt provable under the bankruptcy: excepting such as may be necessary by secured creditors to realize their securities. For the further protection of the estate, the court may appoint a special manager to carry on the business of the bankrupt. The receiving order is advertised in the London Gazette and locally, and although not so called, amounts practically to what is popularly known as an adjudication in bankruptcy.

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The debtor must, within three days, file a full statement of affairs verified by affidavit. The receiving order may be cancelled by the court for good grounds shown. Soon after the making of the receiving order a first meeting of the creditors is called; presided over by the Official Receiver to the estate, and at this meeting the creditors consider whether the debtor shall be adjudicated a bankrupt, or whether they will accept any scheme of arrangement, or offer of composition that he may make. Presuming them to resolve upon an adjudication, or to pass no resolution, then the debtor is formally adjudicated a bankrupt by the court.

If they decide upon adjudication, the creditors may proceed to elect a trustee, and, if they wish it, appoint a committee of inspection of not more than five nor less than three persons to act with and control the trustee; the trustee takes the place of the Official Receiver of the court, and immediately on the making of the receiving order becomes the receiver of all the bankrupt's property, and has power to sell or dispose of goods of a perishable nature, or other property, the holding of which until the choice of the trustee by the creditors would prejudice the bankrupt's estate.

When a trustee has been chosen, and after he has given security, and been approved by the Board of Trade from which body he obtains his certificate of appointment, all the bankrupt's estate and effects vest in him for the benefit of the creditors. He calls meetings, collects debts, audits the accounts of any receiver who may have been appointed; receives all rents, interest, proceeds of sales, or other monies which may accrue from the bankrupt's estate; brings and defends actions; sells book-debts; and compromises claims. All books, papers, and accounts relating to the estate must be delivered up to him if required, and the bankrupt must attend him at all reasonable times, to assist in getting in and protecting the estate.

The debtor has next to pass his public examination upon the statement of his affairs, which he is required to lay before his creditors at their first meeting. This examination is compulsory upon every debtor against whom a receiving order has been made, and whether or not he is adjudicated, or carries out a scheme of composition or an arrangement. It ought to be a stringent and searching enquiry, at which the Official Receiver

is present with a report upon the cause of the failure, and the prospects of the estate.

If the bankrupt has conformed in all points to the directions of the law by passing his public examination, he is now in a position to obtain his order of discharge. For this purpose he must make an application which, will be heard in open court, and at which his creditors may attend, and oppose; the Official Receiver being present, with a report which is primâ facie evidence of its contents. The court is empowered to grant or refuse an absolute order of discharge; or suspend its operation for a specified time; or grant an order subject to any conditions with respect to any earnings or income that may afterwards become due to the bankrupt, or with respect to his after-acquired property. The court must refuse the discharge, if the bankrupt has committed any of the misdemeanours specified in the Bankruptcy Act or the Debtors Act of 1869. And in deciding upon the debtor's application for his discharge, the Court has to consider any facts relating to his conduct, character, and career, affecting the question, such as failure to keep accounts, trading while insolvent, rash speculations, extravagant living, frivolous and vexatious defences, undue preferences, and former failures, if any. A debtor adjudged bankrupt, is at once disqualified for being a member of either house of parliament, a justice of the peace, a mayor, alderman or counsellor of a borough, a guardian of the poor, or a member of any local board or vestry. The court, on giving an order of discharge has, therefore, further to consider whether it will grant him a certificate that the bankruptcy was caused by misfortune without any misconduct on his part, for, unless such a certificate be given, he remains subject to these disqualifications.

When granted, the order of discharge releases him from all debts owing by him at the time he became a bankrupt, and from all claims and demands provable under the bankruptcy, even though judgment shall have been obtained against him; except such arise from any fraud or breach of trust, or are due to the crown. For that, among other purposes, all proceedings in bankruptcy are entered of record as a perpetual bar against actions to be commenced on this account: and the production of the order of discharge is conclusive evidence of the bankruptcy, and of the validity of all the proceedings therein, and is plead