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under officials who can compel trustees to keep separate bank accounts for every bankrupt estate under their management, to pay into such accounts all sums they have in hand above a small amount, and draw cheques for all payments, and to have their own and all other costs, charges, and expenses incurred in managing and winding-up the bankruptcy taxed and approved of, before they can get their discharge. The amount at present lost to creditors is enormous, and the amount which would be saved by bringing the accounts of all insolvent estates, which are dealt with by the law of bankruptcy, under official control, would more than amply repay any extra expense which might be incurred, and ought to be imposed on bankrupt estates by way of percentage, or the like.

Section 15.—This section explains what property is divisible amongst the creditors of the bankrupt, and what are not. It does not appear to call for any observation unless in so far as it comprehends the doctrine of reputed ownership as to goods and chattels in the possession, order, or disposition of a trader who has become bankrupt. When the Act of 1869 was debated in the House of Commons, the present Master of the Rolls condemned the doctrine as the result of an accident. That the creditors of a bankrupt should divide amongst them the proceeds of the property of some one who was not, and never intended to be a creditor, is anomolous and unjust. The rights of creditors ought not to be greater than those of the debtor; and the efforts made by the Legislature to provide remedies against the inprovidence and the thoughtlessness of creditors themselves are unfair to a victimized owner, and is based on the vicious principle of dividing amongst a class what exclusively belongs to some other person. Where the owner has given a man the right of dealing with his property by sale or consignment, he has no right to proceed against those who have bona fide dealt with his agent; but where specific property, capable of

identification, and belonging to a third person, happens to be in the hands of a bankrupt, it ought to be restored to the real owner, and it ought no more to be subject to division amongst the creditors than property to which a trust attaches. The reputation of ownership should not deprive the real owner of his right of ownership; much less ought the circumstance, that the bankrupt has taken upon himself the sale or disposal as owner, give his creditors the power to enlarge their dividends at the expense of innocent people. In the 5th sub-section there is a proviso that the doctrine shall not apply to book debts; but, in the case of Cook v. Hemming, 3 C.P. 334; 37 L.J., C.P. 179., where a contract had been made for supplying butcher's meat to an asylum, and the contract was wholly performed by an assignee under the contract, and the original contractor having become bankrupt, it was held, Willes J., dissentient, that the debt due from the asylum was within the order and disposition of the original contractor. The exemption in the proviso has evidently been made on the supposition that there could hardly be reputed ownership where the property was not visible and tangible by the outside public; but a deeper principle should lie at the bottom of such legal relations, and that is that the property of every man should be restored to him, and that all involved in a common loss should bear it equally and without being entitled to share amongst them what, in point of fact, did not belong to the insolvent debtor. Numberless cases have arisen out of this sub-section with more profit, it is to be feared, to lawyers than creditors; and the circumstances which, by judicial decisions, have been held to negative the consent of the true owner, as to his allowing the goods or chattels to be in the disposition of the bankrupt, may well raise a doubt as to the practical commercial value of an enactment, which was made to punish those who allowed their goods and chattels to be in the hands of persons whose apparent wealth enabled them to get into debt with the

general public. The value of the enactment cannot be known; but its opposition to the plain doctrines of morality and common honesty should bring about an early abrogation of the enactment. This rule, as to reputed ownership, has been really left to be interpreted by juries; and the result has been that, like a house which has been transformed both internally and externally, it is hardly possible to recognise the original structure.

Section 17.-By the 6th sub-section, votes may be given either personally or by proxy. There cannot be a doubt that the activity of those who wish to be appointed trustees on bankrupt estates has not increased the dividends of creditors; but, although various proposals have been made to diminish this activity, there does not appear to be any feasible way of eliminating the abuses which it has engendered. It is, of course, rather hard that the supineness of creditors has brought about the abuses condemned; but why a creditor should be compelled to leave his business to attend meetings of the bankrupt's creditors, or why he should be deprived of appointing a representative to act in his name, is not easy to see.

Section 30.—This section enacts that trustees shall pay all sums of money in their hands into such banks as shall be appointed by the creditors or into the Bank of England, and declares that they shall pay 20 per cent. per annum on all sums kept in their hands for more than twenty days, and that they shall be liable to dismissal from office in consequence of failure so to do. How this enactment is carried out will be understood from the 7th Table annexed to the Comptroller's Report for 1876. Thence it would appear that the balance of payments in the hands of trustees on 31st December, 1876, amounted to the large sum £441,364 25. rod., and that the sum appearing as consigned in the Bank of England, at the same date, was £10,784 18s. 5d. The Comptroller complains of this former gigantic sum being allowed to remain in the hands of

trustees, and suggests that separate bank books should be kept by trustees for each bankruptcy. Further, basing his calculations upon the accounts which must be submitted to him, and those under liquidation by arrangement and agreements for composition, he arrives at the conclusion that no less than four millions of money are under the control of trustees, who have an almost unrestricted power to use these enormous sums very much as they please. This is a state of matters which is intolerable, and would be entirely annulled by the system of official inspection already suggested, and made applicable to all bankruptcies, liquidations by arrangement, and compositions. To give some idea of the stupenduous and multitudinous transactions involved under the law of bankruptcy, it may be stated that the bankruptcies in the year 1876 were 976; liquidations by. arrangement, 4,986; and compositions with creditors, 3,287; and that the total liabilities for 1876 amounted to £20,873,349, and the assets to £6,165,458. Another important feature of the law of bankruptcy is that the bankruptcies since 1870 have diminished fully one-third, that liquidations by arrangement and compositions with creditors have been more than doubled between 1870 and 1876. Clearly the public are dissatisfied with the administration of insolvent estates under the bankrupt law proper, or some unfair or unfortunate influences are at work to induce creditors to agree to liquidation or composition. The cause has been attributed to the unjustifiable use of proxies. If this should be the real cause, no remedy can be applied by the Legislature with much hope of success, since the creditors choose to injure themselves. But, if this cause is not the true one, there is no escape from the alternative that creditors find their own advantage in agreeing to liquidation or composition. The truth is, the distinction of bankruptcy and liquidation by arrangement should cease, and the procedure under bankruptcy proper should be abolished, and liquidation by

arrangement should alone exist; or, what is the same from my point of view, liquidation should be abolished and bankruptcy simplified. In no case should a bankrupt be exempted from public examination in Court. Whatever may be the real cause for this preference, there is no ground whatever for allowing trustees, or creditors, or their proxies to carry on liquidations or compositions without being under the restraining hand of officials whose duty would be to enforce the regular keeping of books of payments and receipts, the punctual payment of all sums into bank, and the taxation of all accounts in the administration and realization of the insolvent estates. To enforce such regulations is a duty which the Legislature owes to the general public, and is based on the elementary principles of the law of bankruptcy; that is to say, that, when a debtor cannot pay all his debts in full, and the law allows him to be discharged on payment of a part, the bankrupt estate should, in all cases, be dealt with as a prudent man would deal with his solvent estate.

Section 37.—This section refers to proof in respect of distinct contracts, and gives a creditor the right to rank on the estate of one who is a sole contractor, and when the debt is joint as well as sole, also on the estate of a firm of which he is a member; but the general rule in ranking in England is that a creditor cannot prove against the estate of a firm and also against the separate estates of the partners. If the debt is a partnership-debt the creditor must prove against the assets of the partnership; and if a debt against an individual partner, against his separate estate.

This is not the rule in Scotland, for a creditor of a partnership may prove against the assets of the partnership, and setting a value

what he expects

to receive from the partnership, and from the individual partners, he may claim

the balance due to him from the solvent or insolvent estates, as the case may be, of the individual partners. That the laws of England and


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