INSOLVENT is, literally, a man who cannot pay his debts. But a man is not properly called insolvent till he has been found to be so by the process to which he is liable under the insolvent acts, if he does not pay his creditors. Statutes have from time to time been passed for the purpose of releasing from prison, and sometimes from their debts, persons whose transactions have not been of such a nature as to subject them to the Bankrupt Laws. These statutes have been passed for a limited time only, and have been continued by subsequent enact ments.
The Insolvent Law of England was consolidated by the 7 George IV. c. 57, continued by the 1 William IV. c. 38, and since by annual statutes for one year. It was somewhat modified by 1 and 2 Victoria, c. 110. The law is administered by commissioners appointed by the crown, in a court called the Insolvent Debtors' Court, and three of the commissioners from time to time make circuits, and give their attendance at the assize towns or other places where prisoners may be or dered to appear. [Cntarrrs.] By the 1 & 2 Viet. c. 110, no person can be arrested upon mesne process in any civil action, except in certain cases specially provided for by the act.
The general object of the law as to in solvency is to release the debtor from pri son, to free his person from liability as to debts contracted previous to his discharge , but to make all his present and future ac' quired property available for the benefit of his creditors. Where new creditors have a claim on the insolvent's subsequently acquired property, which is of such a nature that it cannot be taken in execu tion, it may be necessary to apply to a court of equity, which in administering such estate of a deceased insolvent, will pay the creditors subsequent to the insol vency first, and then the creditors prior to the insolvency.
It is not easy to state the law and prac tice as to insolvency at present, in conse quence of several acts having been re cently passed in a great hurry, and in consequence of the last act having only lately come into operation.
From August, 1842, to August, 1845, three acts have been passed relating to insolvent debtors : these are 5 & 6 Vict., c. 116 ; 7 & 8 Vict., c. 96 ; and 8 & 9 Vict., C. 127.
The act 5 & 6 Vict., c. 116, which came into operation 1st November, 1842, enabled a person who was not a trader within the meaning of the bankrupt laws, or a trader who owed debts which amounted in the whole to less than 3001., to obtain by petition a protection from the Court of Bankruptcy in London or the commissioners of the District Courts of Bankruptcy in the country, from all process whatever (except under a judge's order), either against his person or pro perty until the case was adjudicated by the court. In the interim the insolvent's property was vested in an official assignee appointed by the court. If, on the hear ing of the petition, the commissioner were satisfied with the allegations which it contained, and that the debts were not contracted by fraud, breach of trust, or by any proceedings for breach of the laws, he was empowered to make a final order for the protection of tne petitioner from all process, and to cause his estate and effects to be vested in an official as signee, together with an assignee chosen by the creditors. The commissioner might also, if he thought fit, make an order for carrying into effect such pro posal as the petitioner might have set forth in his petition, and direct some al lowance to be made for the support of the insolvent out of his effects.
The act 7 & 8 Vict., c. 96, passed 9th August, 1844, is entitled An act to amend the law of Insolvency, Bank ruptcy, and Execution.' It enacted that any prisoner in execution upon judgment in an action for debt, who was not a trader, or whose debts, if a trader, were under 300/., may, without any previous notice, by petition to any court of bank ruptcy, be protected from process and from being detained in prison for any debt mentioned in his schedule ; and if so detained, the commissioners of any bank ruptcy court may order his discharge.