In some states, the statutes require the filing of an inventory, or schedule of his property, by the debtor, and an appraisement, after which the debtor or his agent is allowed to select the property which he is entitled to hold as exempt, or in his absence the officer may be required to make the selection, and, under some statutes, until this is done, the debtor has no right to claim his exemptions." In many cases, except where specific property is exempt, it is necessary to have the property appraised before the debtor can set apart that which he claims as exempt. 29. 182 Remedies. - Where the debtor's right of exemption has been violated, that is, when property which he is entitled to claim as exempt, and to which claim has properly been made, has been seized either in execution to satisfy a creditor's claim, or in attachment, he may seek a remedy in any one of several different ways. He may bring an action to recover the specific property from the hands of the officer who has seized it, or, if the property have been sold at an execution sale, from the hands of the purchaser." Or the injured debtor may bring an action for damages for being deprived of his exempted property, either against the officer executing the writ, or, if a creditor wrongfully direct an officer to levy upon and sell exempt property under execution or attachment, or otherwise participated therein, against such creditor, or against him and the officer jointly. Or, as held in Michigan, such an action may be brought against the purchaser at an execution sale who takes and carries away property to which he has acquired no title by his purchase by reason of its being exempt. It is, however, held in a Pennsylvania case, that if an officer wrongfully refuse to have the property appraised on the demand of the debtor for the privilege of the statutory exemption, and sell the same, the purchaser at the sale, nevertheless, acquires a good title; but the officer, by refusing or neglecting to do = 184 181 Am. & Eng. Encyc. Law (2d Ed.), Vol. 12. p. 236, citing Code Civ. Pro. 183 182 11 Gray (Mass.) 211 (1858). 18 3 32 Pa. 82 (1858). 184 32 Mich. 56 (1875). his duty in the matter of making an appraisement, and by proceeding with the sale, becomes a trespasser and liable to the debtor. 185 186 In Illinois, it is held the officer who seizes property exempt under the statute may be proceeded against for treble the value of the property seized; and in Pennsylvania, it is held that the officer's act in seizing and selling exempt property may form the ground of an action upon his official bond against himself and his sureties." 187 The injured debtor may take steps to have the property of which he has been unlawfully deprived returned to him, by moving to quash or vacate the levy, and set aside the sale of the exempt property. And in some states, the debtor has the right to recover possession of the exempt property by replevin, or by a proceeding of a similar nature, known as claim and delivery. 185 32 Pa. 82 (1858). 186 11 Ill. 585 (1850). 1875 Binn. (Pa.) 184 (1812). THE LAW OF DEBTOR AND CREDITOR (PART 4) INSOLVENCY AND BANKRUPTCY DEFINITIONS 1. Insolvency is inability to pay debts as they become due in the ordinary course of business; in a popular and general sense, the term denotes the insufficiency of the entire property and assets of an individual to pay his debts.' Therefore, a person who is unable to pay his debts as they fall due in the usual course of trade or business is properly denominated an insolvent;' and this is so, although his assets in value exceed the amount of his liabilities.' A corporation is insolvent when its assets are insufficient for the payment of its debts, and it has ceased to do business, or has taken, or is in the act of taking, a step which will practically incapacitate it from conducting the corporate enterprise with reasonable prospect of success, or its embarrassments are such that early suspension and failure must ensue.* Under similar conditions a partnership is insolvent. Bankruptcy is the state or condition of being a bankrupt, or in a state of insolvency. A bankrupt, originally and 113 Wall. (U. S.) 40 (1871). 22 Kent Comm. 383. 3 110 Cal. 488 (1895) For notice of copyright, see page immediately following the title page strictly, was a trader who secreted himself or did certain other acts tending to defraud his creditors. By modern usage, a bankrupt is an insolvent person; a person who has done, or suffered to be done, some act which is by law declared to be an act of bankruptcy." In English law, there were two characteristics which distinguished bankrupts from insolvents. These were that the former must have been a trader, and the object of the proceedings against, not by, him. Formerly, a bankrupt was considered merely in the light of a criminal or offender, but, as Blackstone states it, "at present the laws of bankruptcy are considered as laws calculated for the benefit of trade, and founded on the principles of humanity as well as justice; and to that end they confer some privileges, not only on the creditors, but also on the bankrupt or debtor himself; on the creditors, by compelling the bankrupt to give up all his effects to their use, without any fraudulent concealment; on the debtor, by exempting him from the rigor of the general law, whereby his person might be confined at the discretion of his creditor, though in reality he has nothing to satisfy the debt; whereas the law of bankrupts, taking into consideration the sudden and unavoidable accidents to which men of trade are liable, has given them the liberty of their persons, and some pecuniary emoluments, upon condition they surrender up their whole estate to be divided among their creditors."" The distinction between a bankrupt and an insolvent is not generally regarded in the United States, but, in Europe, the distinction still exists. The meaning of the term bankrupt, as used in the federal constitution, was not the technical early English one, but was commensurate with insolvent. Yet, in the early bankruptcy laws of the United States, the word bankrupt was used in the old English sense. The distinction, however, became less observed, and was formally abandoned by the act of 1841.* 52 Black. Comm. 471; see subtitles Bank ruptcy Laws, Definitions, infra. 6 Bouv. Law Dict. 72 Black. Comm. 472. 8 Bouv. Law Dict. |