Con Gressional Record

.· 1874. CON_GRESSI ONAL RECORD. 1231 That, Benton said, was_the fund~ental principle of all b~pt Mr. MORTON. And there the word "insolvent" is used in its pop ~ · laws, a proceeding of creditors for therr own benefit; and that, he srud, ular sense. Congress had abandoned. And then he said further- Mr. THURMAN. No, sir; the word "insolvent" is not used there in and made it practically an insolvent law, at the will of the debtor, for the aboli the statute in its popular sense; it is used in its legaJ sense. 'Vhere the tion of his debt at his own pleasure. creditor knowing that the debtor is not able to pay his debts, as they fall due in the ordinary course of business, a~tempts to obtain a pref~ That is the thing to which Benton objected. He said the volun erence, the ba.nkrupt law deprives him of the benefit of that prefer~ tary part of the act of 1841 made it a mere insolvent law for the dis ence, and administers the estate for the benefit of all the creditors charge of the debtor from his debts at his own pleasure, and was alike. unconstitutional, and in violation of the funclamental principle· of Mr. MORTON. May I ask the Senator a question 'f every bankrupt law. Mr. THURMAN. Certainly. But now the Senator from lllinois, and my colleague, too, have got Mr. MORTON. I ask the Senator hii reason, or the reason of the a definition of insolvency' that I think must be rather amusing to the committee, for extending t.he time from fourteen to forty days 'f lawyers of the Senate whose attention has been given to the law more l\Ir. THURMAN. I can tell the Senator what I understand to be than to politics. They say that insolvency means th::~,t situation or the reason of it. It is because the law is entirely too severe when it condition of a man when his property is not sufficient to ultimately puts a man into bankruptcy because he is compelled, however honest pay his debts, and that therefore every man whose assets may, by he may _be, to suspencl payment of his commercial paper and cannot wise administration and in the course of time, be sufficient to pay his resume m fourteen days. debts, is not, in contemplation of law, an insolvent. They will seek 1\ir. MORTON. I ask the Senator if the reason is not that a period in vain for any such definition of insolvency in any book of the law of fourteen days is not regarded as long enough to enable the man to that ever was written. What iii insolvency' Let us see what the collect his debts or convert his property Now, aoes the Senator courts say insolvency is in contemplation of law; and mark it, they think a period of forty days is long enough for that 'f say it not only in reference to bankl'upt laws, but in reference to the Mr. THURI\IAN. You must fix some limit and you must make a. insolvent laws of the States, and to the statutes of the States which law that will work practically so a-s not to disturb the business of the - prohibit transfers by insolvents, or in contemplation of insolvency by cotmtry. You give a man forty days. He then has that time to turn debtors with intent to prefer creditors. around to procure discounts of thirty days' paper, and if he cannot I :first read from a decision of the supreme court of the State of Ohio arrange with his creditors in forty days, or procure discounts that will in the year 1843, in the case of Mitchell vs. Gazzam, 12 Ohio Reports, enable him to meet his engagements and prevent one~fourth of his pa.ge 336, in which the court say: crerlitors in number and one~third in value from insisting that he CounBel have labored to define the meaning of the term "insolvency." In the mercantile sense it means a person unable to pay his debts accordjng to the ordinary shall go into bankruptcy, the chances are, a hundred to one, that if usages of trade. But in the broad sense use(~ by the statute it means a person you gave him six months he would be in just exactly as bad a con~ whose affairs have become so deranged that he is unal!le to pay his debts as they dition; for, mark it, after the forty days expire, still you cannot put fall due. him into bankruptcy unless one-fourth of the creditors in number That is insolvency; and one-third in amount shall say that he ought to be put into bank~ And if, from such a deranged state of his affairs, and the sense of inability to me~t ruptcy; and when that number do say that, the presumption is fair his moneyed en"'IW'ements, he should transfer his property to a trustee to pay Ius tmtil the contrary is shown to be the case, that that is the sentiment de,bts, we should' ~gard such assignment as made in contemp1ation of insolvency, and or would be the sentiment of the great body of his creditors if they within the meaning of the statute. were consulted. But in order to guard against a mistake of that That is the meaning of the statute. And so the :first English act of kind, if that is not the opinion of the majority of his cr.editors in banh'Tuptcy, the statute of 34 and 35 Henry VIII, in describing who number and value, we have providea that they may come into court are bankrupts, says they "are those not minding to pay or restore any and repl'esent that it is to their interest that the proceedings sh ould their creditors their duties but at their own will and pleasure." be dismissed, and the court may, if they :find that would be for the But, sir, we have plenty of other decisions. I read now from Bump's interest of the creditors, dismiss them. Law and Practice of Bankruptcy : Mr. STEWART . I move that the Sen~te proceed to the considera~ The t erm " insolvency'; is not always 'used in the same sense. It is sometimes tion of executive business. used to denote the insufficiency of the entire property and assets of an individual Mr. EDMUNDS. Of course that is not a debatable question; but! to pay his debts. wish to say that I shall hope to ask the Senate to-morrow to stay here That is the sense in which the Senator uses it, but it is never used and :finish this bill. in a court in that sense. The PRESIDENT pro tempm·e. The question is on the motion of Mr. LOGAN. If the Senator will aJlow me, I stated in the same the Senator from Nevada. connection that under insolvent laws and a bankrupt law that made The motion was agreed to; and the Senate proceeded to the consid an iru!olvent by the law, of course the court gave it that construction. eration of executive business. After six minutes spent in executive Where you declare a man to be insolvent for certain acts, the court session the doors were reopen ed, and (at :five o'clockp. m.) the Senate. can decide nothing else, and hence he is insolvent; but I spoke of the adjourned. word "insolvent" itself, as to the meaning of the word outside of that. Mr. THURMAN. The word "insolvent" has a legal signification, and that is the only signification given to it in the courts. Bump HOUSE OF REPRESENTATIVES. says : The term 11 insolvency'' is not always used in the same sense. It is sometimes used THuRSDAY, February 5, 1874 . to denote the instJ.fficiency of the entire property and assets of an individual to pay his debts. This is its general and its popular meaning- The House met at twelve o'clock m. P rayer by t h e Chaplain, Rev. Not its legal meaning, but its general and popular meaning- J . G. BUTLER, D. D. but it is also used, in a more restricted sense, to express the inability of a party The Journal of yesterday was read and approved. to pay his deb~ as they become due in the ordinary course of business. _ SURVEY OF GALENA RIVER. Mr. LOGAN. That is where it is restricted by iaw. The SPEAKER laid before the House a letter from/the Secretary of Mr. THUR IAN. No, sir; that is in every statut e of insolvency. War, in answer to a resolution of the House of January 22, 1874, trans It is in this latter sense that the term is used when traders and merchants are mitting maps of the survey of the Galena River; which was referred said to be insolvent. to the Committee on Commerce. Every definition, either under the State laws or under this bankrupt MILITARY POST, KEY WEST, FLORIDA. law, defines insolvency in precisely the same way. It is the inability The SPEAKER also laid before the Honse a letter from the Secre of a merchant, banker, broker, or the like, one of these commercial tary of War, in relation to an appropriation for the purchase of a piece people, to pay his debts as they fall due in the ordinary course of busi of land adjoining the military post at Key West, Florida; which was ness; his failure, when they fell due, to meet his engagements.

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