2. Taxes. • 3. Liabilities for obtaining property under false pretenses.
4. Liabilities for wilful or malicious injury to prop erty or persons.
5. Alimony.
6. Support of wife or child.
7. Debts not scheduled in time for proof and al lowance unless it can be shown that the creditor had actual notice of proceedings.
8. Debts arising out of the bankrupt's breach of fiduciary obligations.
Liabilities falling in any one of the classes above enumerated remain a burden on the bankrupt after his discharge and the creditor will be justified in seeking to enforce the obligation by taking any pro ceedings he might take if the bankruptcy proceedings had never been instituted.
25. Advantages of Bankruptcy Act.—The Na tional Credit Men's Association has done an excel lent piece of work in keeping the present bankruptcy act on the statute books. This act has frequently been attacked by certain interests that would probably profit by a recurrence to the confusion in which busi ness was steeped when the property of insolvent debt ors was subject to administration under state laws. The present Bankruptcy Act insures fair and uniform treatment to all creditors and provides a safe method of reaching an insolvent debtor's property.
26. Canadian practice.—There is no national bankruptcy or insolvency law in Canada, and there has not been since 1880. Each province has its own insolvency laws and procedure. In none of the prov inces is a debtor discharged by becoming an insolv ent. If the dividend from his insolvent estate does not meet the claims of his creditors in full, they have their recourse for any balance so long as their claim is not outlawed. The discharge from further liability is an incident of bankruptcy legislation, and as such could only be enacted by the Dominion parliament. The general effect and purpose of the provincial in solvency laws is to secure a ratable distribution of an insolvent's estate among his creditors.
27. trader who finds himself in dif ficulty may make a voluntary assignment of his estate for the benefit of his creditors. The assignment may be made to the sheriff of the county, to an official assignee, or to a resident of the province approved by a majority of the creditors whose claims amount to WO or more.
In Quebec alone can a debtor who is in insolvent condition and yet refuses to assign, be forced to do so. He must either pay or be subject to civil arrest, in which case his assets are seized and dealt with for the benefit of creditors.
In the other provinces much the same practical re sult is secured by proceeding under the provincial Creditors' Relief Act. In the first place, if an in solvent trader refuses to assign, an action may be brought by one creditor on behalf of himself and all other creditors of the same class, and under his j udg ment all the assets may be sold and the proceeds rat ably distributed among any executive creditors and other creditors who prove and file their claims within the proper delays.
On the other hand, if a judicial assignment is made, then another procedure is followed. In most of the provinces, other than the Province of Quebec, a copy of the assignment with an affidavit of a witness must be registered—generally at the office of the county court clerk, tho in some provinces at the office for registry of deeds. In all the provinces the assign ment must be advertised in the Official Gazette and in one or more newspapers. This notice calls the creditors to a general meeting and notifies them to prove and file their claims. Claims should be accom panied with such vouchers as the nature of the claims permits. At the general meeting a curator is ap pointed, and he proceeds to get in all assets, to real ize on goods and property, pay privileged claims and pay a dividend to ordinary creditors.
28. Fraudulent conveyances and or other gratuitous contracts made when a person is unable to pay his debts in full or knows that he is on the eve of insolvency, are deemed to be made with intent to defraud creditors, and may be set aside. That is the general rule of the English law provinces. In Quebec every conveyance or transfer of either per sonal or real property with the intent to delay or de fraud creditors by any person who knows be is on the eve of insolvency is void against such creditors, pro viding the other party to the contract knows his in tention and acts in collusion with him. So also a large payment of money or a transfer of property by an insolvent to a creditor knowing his insolvency, is deemed to be made with intent to defraud, and such creditor may be compelled to make restitution or pay the value, for the benefit of all creditors concerned. And generally, where a debtor in insolvent circum stances, or on the eve of insolvency, voluntarily, or thru force, gives a confession of judgment that has the effect of defeating or defrauding his creditors, or of giving one or more a preference over others, the j udg ment is void and cannot be executed. So also a, sale on credit to a person who knows of the vendor's in solvency is generally held as fraudulent as against creditors, in that it hinders and delays them. A chattel mortgage to secure a creditor, or in settlement of a debt previously contracted, or to secure a surety, if given within sixty days of an assignment, is void as toward other creditors. In Ontario by an amend ment passed in 1910, if an assignment is made within sixty days after a transaction that has the effect of giving one creditor a preference over others, such transaction is presumed to be performed with that intent.