man and his bankers or agents, in which he is in the practice of transferring to them negotiable instruments, to be discounted and credited, or to lie over till they come to maturity, paper of this description happens to be transmitted within the sixty days, it is not struck at by the act.

In transactions with bankers, in which bills or drafts are discounted, or in which money is deposited, within the sixty days, the question whether this was done in the usual course of business, or for the purpose of giving a preference, is a question of fact which, if disputed, and if the transaction do not bear its character on its face, must go to a jury.

The circumstance that the debt which it is intended to meet is not due at the time of the transaction, will bring a preference of any kind by transference, security, indorsement, or payment of money, within the act. Thus, when a bill was given in payment of two instalments of a bond, the one due, the other not, the transaction was held good as to the former, as to which it was a payment, but bad as to the latter, as to which it was a security.1

If a merchant sell goods to a creditor so that he may plead compensation as against the debt, the transaction is reducible, but not if it be made by public roup in the ordinary course of business.

A security which, though it be but an acknowledgment of a debt justly due, places the creditor in a better position than he could place himself in by legal diligence, comes under the act; and so does an acknowledgment of a debt enlarging its amount, and thereby enabling the creditor to obtain a greater dividend than he would otherwise receive.

Intention of Parties.-The material subject of inquiry being, whether or not the transference, security, &c., was made for the purpose of constituting a preference, it is not relevant to inquire whether the receiver was acquainted with the state of the debtor's affairs, or had any reason to anticipate his early bankruptcy.

On the other hand, it will not make an intentional preference, by the debtor, valid, that the original debt, which it was intended to meet, was constituted without the creditor's consent or knowledge; and thus it would appear that wherever a debt has been incurred by fraudulent appropriation, an attempt to make restitution within the sixty days is struck at by the act.*

1 Pattison v. Allan & Co., 3d December 1828.-* See the authorities for these principles stated and examined in the author's Law of Bankruptcy, &c., p. 208-232.

The act does not strike at the completion by infeftment (see above, p. 55) of heritable securities for money borrowed, granted at the time of the advance; and it is held "that wherever there is stipulated a specific security over a particular subject, in consideration or on the faith of which an advance of money or transfer of goods is made, the completion of that security, although after an interval of time, and after the term of constructive bankruptcy has begun, is not within the intent and meaning of the act.1

Infeftment. In the case of dispositions, heritable bonds, and other rights "whereupon infeftment may follow," the date of the deed is taken to be the date of the recording of the sasine.2

Intimation and Delivery.-Dispositions, assignations, and venditions, which do not require sasine, but to which intimation and delivery are requisite, in order to render them complete as transferences or as securities," are, for the purposes of the act, to be reckoned to be of the date of the intimation, delivery, or other act requisite for completing the same." 3

Assignation of Lease.-An assignation of a lease, where the tenant has the right to assign, completed by actual possession, does not require, in questions with creditors, intimation to the landlord; and the date of the actual possession will mark the completion of the transaction.*

CHAPTER III.

MERCANTILE SEQUESTRATION.

SECT. 1.-Introduction.

THE object of the sequestration law is, on the occasion of a man engaged in trade becoming bankrupt (see above, p. 367), to reduce his whole available means to a common fund for division among his ordinary creditors, after those who have preferable claims (see above, p. 356, et seq.) are satisfied. It

B. C. ii. 256.-2 1696, c. 5. 54 Geo. III. c. 137, § 12. 2 & 3 Vict. c.. 41, § 25.3 54 Geo. III. c. 137, § 13. 2 & 3 Vict. c. 41, § 25.- See the Law of Bankruptcy, &c., p. 236.

has the effect of uniting the zeal and activity of the creditors on the one common point of turning the bankrupt's estate to the best account, instead of leaving them each to exert himself for his own individual advantage at the expense of the claims of others, and the interest of the creditors as a body.

It is a peculiarity of all systems of mercantile bankruptcy, and distinguishes them from the arrangements for the distribution of the estates of other insolvents, that when the conduct of the bankrupt has been upright, and he has conformed with the statute, he is discharged of all his debts. The merchant's difficulties are generally occasioned by unsuccessful speculations, and as his creditors are in a great measure participators in his career, by allowing him to incur obligations to them which they know he can only meet by successful trading, it is thought unjust that he should bear for ever the burden of his misfortunes, while it is contrary to the interest of the public that he should be deprived of inducements to energy and enterprise. The non-trader, however, who runs in debt, with but a few exceptions, deliberately exceeds his income. His hopes of future fortune will generally arise from the chances of succession, and it would be unjust that his creditors should, by his obtaining an absolute discharge, be precluded from any share in his good fortune. Hence it is a general feature of measures for distributing the estates of those who are not traders, whether in England or Scotland, that though they may be released from immediate legal enforcement, they are not discharged from their debts.

Various sequestration acts have from time to time been passed for Scotland, after the example of the bankruptcy statutes of England. The last, 2 & 3 Vict. c. 41, came into operation on 28th August 1839. This statute does not affect proceedings in sequestrations commenced before the time when it thus became effectual, and these must be concluded in terms of the old statute 54 Geo. III. c. 137.

The chief Bankrupt Statute of England is the 6 Geo. IV. c. 16; amended by 1 & 2 Wm. IV. c. 56, and the 5 & 6 Vict. c. 122. The principal point in which the English law differed from that of Scotland, was formerly in a special commission being issued for the conducting of each bankruptcy. By the two last-mentioned acts this system has been materially altered. The "Commission" is superseded by a "Fiat" issued from the Court of Bankruptcy, a new tribunal erected by the acts,-authorizing the petitioning creditor to prosecute his complaint in the Court of Bankruptcy. The most remarkable feature in the new system,

however, is in the appointment of official assignees. They are chosen by the lord chancellor from among commercial men of a certain standing, and they are members of the Court of Bankruptcy. They are to act in concert with the "Chosen Assignees" or Trustees, whose duty it is to suggest all suitable means for realizing and distributing the estate under the direction of the creditors. Over the measures so adopted, with the approbation of the creditors, the official assignee in a bankruptcy has no direct control. All the proceedings are, however, conducted under his eye, and he may check any fraudulent attempts on the part of the chosen assignee; while he is at the same time the person in whom all the bankrupt's property is vested. The act 1 & 2 Wm. IV. only brought bankruptcies within a certain area round London under the authority of the Bankruptcy Court. By the 5 & 6 Vict, c. 122, the system was extended to Country Bankruptcies, an establishment of bankruptcy courts, with official assignees, having been made uniform over all the country. A bankruptcy code similar to that of England was extended to Ireland by 6 & 7 Wm. IV. c. 14.

It has been considered that this plan is calculated to give the creditors all the advantages derivable from the impartiality of official management, without neutralizing the zeal and energy that characterize the efforts of individuals when their personal interest is at stake. In 1844, some alterations were made on the English Bankruptcy system, one of which was the passing of an act for winding up the affairs of bankrupt Joint Stock Companies, noticed above (p. 193).

SECT. 2.-Persons against whose Estates Sequestration may be awarded.

The description of persons liable to sequestration under the act is as follows:-Any debtor "who is, or has been, a Merchant, Trader, Manufacturer, Banker, Broker, Warehouseman, Wharfinger, Underwriter, Artificer, Packer, Builder, Carpenter, Shipwright, Innkeeper, Hotel-keeper, Stablekeeper, Coach-contractor, Cattle-dealer, Grain-dealer, Coaldealer, Fish-dealer, Lime-burner, Dyer, Printer, Bleacher, Fuller, Calenderer, and generally any debtor who seeks, or has sought his living, or a material part thereof, for himself, or in partnership with another, or as agent or factor for others, by using the trade of merchandise, by way of bargain, exchange, barter, commission or consignment, or by buying and selling, or by buying and letting for hire, or by the

workmanship or manufacture of goods or commodities." No one can be sequestrated as a "holder of stock in any of the public or national funds, or of India stock, or as a partner in any company incorporated or established by act of Parliament, or by charter, or as a landholder or farmer, unless such landholder or farmer be bonâ fide a dealer in cattle not the produce of, nor grazed, nor worked on his farm, or unless he be a dealer in grain not the produce thereof" (§ 5).

Where Debtor applies. In the case where the debtor consents and applies for sequestration, with the statutory concurrence, the only requisite besides that of his coming within one of the classes of traders above set forth is, that he be personally "subject to the laws of Scotland." It is not necessary that he should have been made bankrupt, or that he has had a domicile in Scotland, or that his business has been conducted in Scotland (§ 5).

Bankruptcy, &c.-The debtor (unless he consent to the sequestration) must be bankrupt (see above, p. 367), must have carried on business within Scotland, and must have also, within a year before the date of presenting the petition, resided, or had a dwelling-house or place of business in Scotland (§ 5).

Sanctuary.-A debtor within the above definition may be sequestrated though he be not bankrupt, if he have been in the sanctuary for sixty days, either continuously or not, within the space of twelve months (§ 7).

A company carrying on business as above may be sequestrated, provided (unless the company consent) that one of the partners has been made bankrupt for a company debt, and the company have carried on business in Scotland, and a partner have had a dwelling-house or the company a place of business in Scotland within a year and day before the presentation of the petition (§ 6).

Deceased Debtor.-Sequestration may be awarded of the property of " any deceased debtor who at the time of his death resided, or had a dwelling-house, or carried on business in Scotland, and was at that time owner of heritable or moveable estates in Scotland;" but not until the expiry of six months after his death, unless he had granted a mandate to apply for sequestration, or was bankrupt when he died, or had remained in sanctuary for sixty days, at some time or other within the twelve months preceding his death, or unless his successors shall concur in the petition or renounce the succession" (§ 4). It has been held that such sequestration may take place though the deceased died before the