every other view but that of constituting an act of bankruptcy. Shepherd, S. G. contrà.-1. A trader has a right to commit an act of bankruptcy; and no negociation between him and his attorney for that purpose could invalidate the act; provided it were bona fide towards the creditors, and none of them. concerted it, or were privy to it. The bankrupts had committed two acts of bankruptcy sufficient to uphold the commission. Smith did not. know of the deed of assignment, That deed itself, by which the bankrupts conveyed away all their property, is an act of bankruptcy. The recital did not alter its effect. No matter to whom they convey. They part with all their property by deed. This deed, without question, is revocable by the bankrupt laws; but the fact of such a conveyance constitutes an act of bankruptcy. If Smith had been privy and assenting, that circumstance would have impeached the deed; but the contrary is in evidence. He did not know of it till the commission was opened.-2. The denial to Smith was a clear act of bankruptcy. This denial was not concerted between Smith and the bankrupts, which circumstance alone it is that makes the act of bankruptcy fraudulent. It is immaterial that Smith went to their respective houses, not expecting money. The denial to a creditor is an act of bankruptcy; because it is evidence of a beginning to keep house with view to delay creditors. Burrough, J.—I am of opinion that these were 1816. PROSSER 2. SMITH, 1816. PROSSER v. SMITH. fraudulent and concerted acts of bankruptcy, and I shall direct the Jury accordingly. Laying the deed out of consideration, which was evidently contrived for the purpose, there were three concerted acts of bankruptcy, committed most glaringly in the sight of the petitioning creditor, through the medium of his own, and the bankrupts' solicitor, who goes from house to house for the purpose. The only question then is, was Croom the agent of Smith? If the Jury, under the circumstances, think he was such agent, the commission cannot stand. The Jury found a verdict for the plaintiff. Best and Vaughan, serjeants, and Campbell, for the plaintiff. Shepherd, S. G., Lens, serjeant, and Tindall, for the defendant. Cases of difficulty have arisen upon the question, how far a commission of bankrupt can be supported, which is founded upon an act of bankruptcy, either committed voluntarily by the trader, and with the intent of making himself a bankrupt by such act, but without the privity or concurrence of his creditors; or upon an act committed by the trader in concert with his creditors. With respect to the first point: If the act of bankruptcy, on which the commission is sought to be sustained, be an act, moving solely from the bankrupt, as a denial to a creditor, or an assignment by deed of all his effects, though such denial or assignment should be with the intent of making himself a bankrupt, it is not easy to see how an objection could be raised to such act, as incapable of supporting a commission. The bankrupt cannot object to such act himself: he is of necessity concluded by it. Who then is to impeach it? A case is put, which is very frequently resorted to as an act for sustaining a commission of bankrupt. A trader conveys all his property by deed to a particular creditor, or to a certain number of creditors; or to trustées, for the satisfaction of his creditors universally; all of which acts are acts of bankruptcy. The trader knows that he is committing an act of bankruptcy; he knows that the deed is void, and he intends that it should be void at the time of execution. Can such deed, it is said, sustain a commission? Can such deed (which constitutes an act of bankruptcy upon these two grounds only, 1. Either that it is a fraudulent preference of particular creditors; or, 2. That it places his property under a .distribution different from that ordained by the bankrupt laws, and which deed is not intended by the bankrupt to operate in either of those ways, but to exclude the power of fraudulent preference on one hand, and to let in the operation of the bankrupt laws on the other); can such deed, it is demanded, be sufficient to uphold a commission? The case has not arisen; but when it shall arise, we presume that such act would support a commission. That a commission of bankrupt may be supported, notwithstanding the privity of the bankrupt, is now settled. Ex parte Edmonson, 7 Vez. Jun. 303. The only objection is, to an act concerted with a creditor. Now, it is no objection to any act, as an act of bankruptcy, that the bankrupt intended it to be so; and this rule is founded upon manifest and sufficient grounds; for, in the first place, it may be the only means of rescuing his property from the urgent pressure of one particular creditor, and thereby bringing it within the equitable distribution of the bankrupt laws. In the first construction of these laws, and the judgment of the Courts upon them, bankruptcy appears to have been regarded in two points of view; in the first place, as criminal insolvency; and, secondly, as a condition of necessity. Under neither of these points of view, therefore, could any voluntary act 1816. PROSSER v. SMITH. 1816. PROSSER で。 SMITH. of the trader, by which he constituted himself a bankrupt, be regarded as admissible in law; or, in other words, as not criminal. The bankrupt, therefore, was always viewed in the light of a criminal; and therein the act of making himself a bankrupt voluntarily was treated as a fraud. But further experience has exposed the fallacy, and, indeed, the great practical mischief of such a doctrine in fact. The Courts, therefore, proceeding now upon а more liberal construction, look, not so much to the act itself, as to the act in connection with the condition of the affairs of the bankrupt, and with the circumstances which precede and follow it. If, therefore, upon such examination, they find such voluntary act of the trader to be a mere bona fide declaration of his insolvency; or, as it were, a surrender of himself and his property to the bankrupt laws, it is the practice of the courts of law and equity to deem such act and commission thereon founded perfectly sufficient. But as, in cases where the bankrupt commits this voluntary act in concert with one of his creditors, there is a manifest presumption that such creditor is to have some peculiar interest above the others, the law very properly discountenances such concerts and private agreements; and therefore, arguing upon the legal nature of bankruptcy as a crime, determines that no creditor shall avail himself of a criminal act which he has caused to be done. As respects a creditor under these circumstances, such act is no act of bankruptcy: but as such act is still the index of that condition of affairs which the law determines to be insolvency; such act, though insufficient as respects the creditor and trader who concerted it, is sufficient to uphold a commission by any other creditor. For example, a concerted assignment of effects, which is the case put, cannot be insisted upon as an act of bankruptcy by any creditor, a party to such conveyance, or privy to such conveyance. Bamford v. Baron, 2 T. R. 594. Back v. Gooch, ante, p. 13. and Tappendall v. But Burgess, 4 East 230. any creditor, not privy nor conseuting, but arriving at the knowledge of it, may of course secure his own equity of distribution by taking out a commission upon it; or otherwise, the trustee of such deed might become possessed of the whole property, and exclude other creditors. The act, therefore, is evidently an act of bankruptcy as affects the other creditors. But it is not so in the case of a concerted denial to one creditor; for such denial being by concert, is no sign, symptom, or act of insolvency; and nothing can be founded on it; which is otherwise in the case of the deed. In Hooper v. Smith, 1 Black. 441. Lord Mansfield says, The relation of a commission of bankrupt to the time of committing the act, though useful to prevent frauds, is sufficiently hard already upon private persons; and ought not to be extended farther. An act of bankruptcy in the eye of the law is considered as a crime;but where is the crime of denying oneself to another by previous consent and agreement." But although a concerted act of bankruptcy is not available, except for creditors not privy to it, yet a commission upon a concerted act of bankruptcy may be supported upon another act. Ex parte Bourne, 16 Vezey Jun. 145. In this case, the Lord Chancellor (Eldon) expresses himself as follows: "I recollect cases in which it was settled upon a singular ground, that an assigument of all the property is an act of bankruptcy, though the direct and immediate object is not to delay but to satisfy the creditors. But it was held, that a trader had not a right by deed to place his property under a distribution dif. ferent from that directed by the bankrupt law; and it was carried to this extravagant length, that, though the assignment was intended for the benefit of all the creditors including that one, yet it was an act of bankruptcy. In the case of Bamford v. Baron, 2 T. R. 594, note, in which I was counsel, an attempt to set up such an assignment as an act of bankruptcy, was made by a person who was a party to the transaction; and the opinion of the Court was, that such person could not represent it as an act of bankruptcy; that, according to the common expression, his mouth was shut. But the understanding of the bar was, that there was nothing to prevent another creditor, not a party to the transaction, from treating that as an act of bankruptcy; an inference favoured by the expression, that the mouth of that particular creditor was shut; and I believe many commissions have been in fact sup ported upon such acts of bankruptcy, by persons not parties 1816. PROSSER V. SMITH. |