DEBTORS' AND CREDITORS' ACT.

Press, Volume VIII, Issue 840, 10 July 1865, Page 3

DEBTORS' AND CREDITORS' ACT.

Hie "Otago Daily Times," of July 5 contains a letter from Mr. John Baihgste on the subject of the formation of an Insolvency Court. He offers tte following suggestions:— The Constitution of the Court: The leading principle of any Act should be to instnbute a bankruptcy estate as expeditiously and cheaply as possible, and according to the instruction of the creditors. Keeping this in view, I most decidedly object to the constitution of an Insolvency Court by itself, or the appointment of an Insolvency Commissioner. This would lead to the erection of a separate court and a staff of officials, all to be supported at the cost of the creditors. In the Bankruptcy Courts have been bitterly complained against, and the recent Committee of the House of Commons ha?e exposed scandalous corruption. To remedy the delay arising from the over-burdening of the Judges wifli routine duties, I beg to suggest that the petition may be presented to the Supreme Court, or to any Resident Magistrate, whose order sequestrating the bankrupt's estate should Test Ihe same in the Clerk of Court until the first meeting of creditors ehouldbe held for the appointment of * trustee. The Clerk of Court should be empowered by bis assistants to take instant possession of the bankrupt's books, papers, and effects for safe custody till a trustee be appointed. An early day should be fixed for the bankrupt's examination, of which duty the Court should be entirely relieved. The examination should be conducted befojea barrister of not leas than three years standing, or a resident magistrate. In the realization of an insolvent estate time is money; and such an immediate examination would be beneficial to the creditors, although a feemight.be payable where it was conducted by a barrister. An early meeting>of creditors should take place for the election of a trustee; and when he is appointed by the requisite majority, the judge's order confirming the election should, on being registered, vest the whole of the bankrupt's estate in tiie person of the trustee. Who should petition : Any debtor on whom a writ has been served should be able:to apply for sequestration, in order to prevent bis estate being taken in execution, to the prejudice of his creditors generally. The 4th section of the Act should be also retained. Power should also be given to any above £50, (or two or more to thifc amount) to petition where the Bankrupt has committed any overt act of insolvency; such as allowing judgment on a writ for a debt; being taken . in execution for any debt; calling a meeting of his creditors; suffering any real or personal estate to be ideeMm execution or other legal process; dishonoring a bill, and not paying tiie same within three days after it Mttatej orin any of the circumstances defined in Section IV. of the statute. Pronrioa should mc made for seques-tnJaan-of the-estate of a person who h*Bka the colony in debt. The words ** with mtent to defeat or defraud his eredftore n in the 6th section should be sfcroek: oat Where an act-can be JWfflraLthjs should be conclusive as to toepeint CWw of Creditor*—No creditor sbeolißeaUowed to vote, or be ranked, : to* lodged & claim, verified ijywuiaers, where necessary, and with j™M*it; and in every case securities neM should be stated ; and valued, so jjjtfthe trustee may claim, if he think PHP*; the securities for behoof of the v ®*™we s *t the valuation named. In 2J™£*P a scheme of ranking, the kwlwahould give a formal deliverance " claim, to Dβ intimated to the *ko, if dissatisfied, may apPJrt to the District Judge, where toe <a*»ie undet-£loo, and otherwise to Bills current and «*« contingent obligations should be gg«tod>» at the date of sequestra--«j*W?'«J* e After his examinations g*JjM°Jtrapt maj obtain his discharge Ijjj^^ l6 unanimous consent of his 2*"**? ci » .or alter six months -with. •J**- consent of a statutory majority; J* *» the latter case it should ■ om& of any creditor to •Jjjaraae {suen as fraud, reckless "orej? speculation, irregular delay in balancing ~22*5* * J* 81 ") wn 7 c discharge ; 2Sr JM * ** discretion to the Court to delay-the ~Jjfcß*jißß» It does not seem expedient »wf the power of withholding conSα * BCaa *S e com t^ 6 creditors, , lapse of two years, when a m *l himself fur a'dis-.-*5 c ' Priorities or Preferences —It *2"g objectionable that any crediton gjjjy* have the power, by early execu-; : 'mst j° * ece * ¥e payment from an insolto the prejudice .of other who, from bills being current

or other causes, may not be in a position to follow out judgment. All Sheriff's sales, therefore, within twenty days before sequestration, should not confer a preference, excepting as to costs; and the creditors should be bound to account for the free proceeds as part of the debtor's estate, for the benefit of his creditors generally. Special Provision —No Act will afford the remedy desired unless it be efficiently worked. At present an estate gets into the hands of trustees, and in some cases is no longer heard of. A trustee should be compelled to declare dividends at stated periods, or give a valid reason for delay by public notice in the " Gazette." An officer should be appointed to be called " The Auditor in Bankruptcy," whose duty it should be to see that bankrupt estates are efficiently administered. Trustees should find security to his satisfaction, and render periodical accounts of their acting for his ex animation and audit. He should decide as to the remuneration to be allowed, and have power, by petition, to bring any trustee to the bar of the Court to answer for any irregularity or misconconduct. Such an officer, under the title of "The Accountant in Bankruptcy," has been most vigilant in looking after the administration of the Bankrupt Act in Scotland recently, and the results have been most advantageous to creditors.