The Online Library of Liberty

A project of Liberty Fund, Inc.

• Acknowledgments and Dedicatory
• A Note On the Texts, Editions, and Translations
• Introduction
• Chronology of Events
• Editions of Coke’s Works
• Mottoes and Crests of Sir Edward Coke
• I: Reports
• Part One of the Reports
• The Preface to the Reader.
• Shelley’s Case.
• Part Two of the Reports
• (preface) to the Learned Reader.
• Manser’s Case.
• The Case of Bankrupts.
• |[46 A] the Archbishop of Canterbury’s Case. *
• Part Three of the Reports
• (preface) to the Reader.
• Heydon’s Case.
• Fermor’s Case.
• Part Four of the Reports
• (preface) to the Reader.
• The Lord Cromwell’s Case. *
• Cutler V. Dixon.
• Vaux’s Case.
• Slade’s Case.
• Part Five of the Reports
• (preface) to the Reader.
• Foster’s Case.
• Cases of By-laws and Ordinances the Chamberlain of London’s Case.
• Clark’s Case.
• The Case of Market-overt.
• Semayne’s Case.
• Rooke’s Case.
• Pinnel’s Case.
• |[125 A] the Case De Libellis Famosis.
• Part Six of the Reports
• (preface) to the Reader.
• Jentleman’s Case.
• Part Seven of the Reports
• (preface) Deo, Patriae, Tibi. 2
• Calvin’s Case, Or the Case of the Postnati. 1
• The Case of Swans.
• Penal Statutes.
• Part Eight of the Reports
• (preface) Deo, Patriae, Tibi. 3
• Vynior’s Case. *
• Dr. Bonham’s Case.
• The Case of Thetford School, &c.
• Part Nine of the Reports
• (preface) Deo, Patriae, Tibi. 3
• William Aldred’s Case.
• John Lamb’s Case.
• Mackalley’s Case. (in the Killing of the Sergeant of London.)
• Part Ten of the Reports
• (preface) Deo, Patriae, Tibi. 5
• The Case of Sutton’s Hospital.
• The Case of the Isle of Ely.
• Part Eleven of the Reports
• (preface) Deo, Patriae, Tibi. 4
• The Lord De La Warre’s Case.
• The Case of the Tailors of Habits &c. of Ipswich.
• The Case of Monopolies.
• James Bagg’s Case.
• Part Twelve of the Reports
• Ford and Sheldon’s Case.
• Case of Non Obstante, Or Dispensing Power.
• Q. If High Commissioners Have Power to Imprison.
• Floyd and Barker.
• Of Oaths Before an Ecclesiasticall Judge Ex Officio.
• Of Pardons.
• Customs, Subsidies, and Impositions.
• Buggery. 1
• Premunire.
• Nicholas Fuller’s Case.
• Sir Anthony Roper’s Case.
• Sir Anthony Roper’s Case.
• The Case of Heresy.
• Langdale’s Case.
• Mouse’s Case.
• Prohibitions Del Roy.
• The Lord Aburgaveney’s Case.
• Of Convocations.
• Proclamations.
• Thomlinson’s Case.
• Walter Chute’s Case.
• Sir Stephen Procter’s [proctor’s] Case.
• Exaction of Benevolence.
• Part Thirteen of the Reports
• (preface) to the Reader.
• Prohibitions.
• The Case De Modo Decimandi, 1 and of Prohibitions, Debated Before the Kings Majesty.

The Case of Bankrupts.

(Smith v. Mills) (1589) Trinity Term, 31 Elizabeth I

In the Court of the King’s Bench. First Published in the Reports, volume 2, page 25a.

Ed.: John Cook, a merchant, went bankrupt, owing Robert Tibnam £64 and another group of creditors £273, 12d. The second group of creditors got a commission in bankruptcy against Cook. Cook gave part of his goods to Tibnam in partial payment of his debt, and Tibnam sold them. But the bankruptcy commissioners sold the same goods to the group of creditors in partial satisfaction of their debts. In an important case construing the then-two-decade-old bankruptcy statute, Chief Justice Wray of the King’s Bench held that the sale by the commissioners was good, that the purpose of the statute was to protect all of the creditors of a bankrupt, and that a bankrupt debtor cannot give preferential settlements to one creditor, but both debtor and creditors must accept an equal settlement for all of the creditors.

Gregory Smith, Cullamor, and other good merchants of London, brought an action upon the case upon trover and conversion of divers goods, in London, against Thomas Mills, and upon not guilty pleaded, the jury gave a special verdict to this effect: John Cook, of Spalding, was possessed of the same goods, and exercising the trade of buying and selling, 30 Januarii, 29 Eliz. became a bankrupt, and absented himself secundum formam statuti,1 (which was found at large), and the said 30 Januarii was indebted to the plaintiffs, being subjects born, in £273 12d. pro merchandizis per quemlibet eorum prius venditis;2 and then also was indebted to Robert Tibnam, being also a subject born, in £64. Afterwards, 12 February, 29 Eliz. the plaintiffs exhibited a petition to the Lord Chancellor to have a commission upon the Statute of Bankrupts; and 17 February, 29 Eliz. a commission was granted, according to the said statute, under the Great Seal, to William Watson and others. And afterwards, 21 Februarii, 29 Eliz. John Cook gave and delivered the said goods to Tibnam, in satisfaction of part of his said due debt, the goods being of the value of £24. Andafterwards, ultimo Martii,3 29 Eliz. the commissioners, by deed indented, sold to the plaintiffs jointly the said goods, and at the same time the said Mills, then factor to Tibnam in ea parte,4 refused to come in as creditor, but claimed the said goods as the proper goods of his master, by the gift aforesaid; and afterwards the goods came to the defendant’s hands, and he converted them; but whether the said sale of the said commissioners, notwithstanding the said gift and delivery to Tibnam, be good or not, that was the doubt referred to the consideration of the Court. And judgment was given by Wray, |[25 b] Chief Justice, and the whole Court, for the plaintiffs. And in this case divers points were resolved:

1st, That the said sale made by the said commissioners, was good; and because the doubt arose only upon the words and intent of the stat. of 13 Eliz. cap. 7., the Court considered the several parts and branches thereof: First, the Act describes a bankrupt, and whom he defrauds, scil. the creditors. 2. To whom the creditors should complain for relief, scil. to the Lord Chancellor. 3. How, and by what way, relief and remedy is provided, scil. by force of a commission under the Great Seal, &c. 4. The authority of the commissioners, scil. to sell, &c. that is to say, to every one of the creditors a portion, rate and rate alike, according to the quantity of his or their debt. So that the intent of the makers of the said Act, expressed in plain words, was to relieve the creditors of the bankrupt equally, and that there should be an equal and rateable proportion observed in the distribution of the bankrupt’s goods amongst the creditors, having regard to the quantity of their several debts; so that one should not prevent the other, but all should be in aequali jure.5 And so we see in divers cases, as well as the Common Law, as upon the like statutes, such constructions have been made; for, as Cato saith, Ipsae etenim leges cupiunt ut jure regantur;6 And therefore it is held, in 35 Hen. 8. tit. Testaments, Br. 19. a man holdeth three manors of three several lords by knights service, each manor of equal value, he cannot devise two manors and leave the third to descend, according to the generality of the words of the Acts of 32 & 34 Hen. 8. of Wills, for then he should prejudice the other two lords, but, by a favourable and equal construction, he can devise but two parts of each manor, so that equality between them shall be observed. And in 4 Edw. 3. Assize 178. the lord of a town cannot improve it all, leaving sufficient common in the lands of other lords, within the Statute of Merton, cap. 4. And so, in cases at the Common Law, an equality is required; as, in 11 Hen. 7. 12b. a man binds himself in an obligation and his heirs, and hath heirs and lands on the part of his father and on the part of his mother, both heirs shall be equally charged; 48 Edw. 3. 5a, 5b. in dower, if the heir be vouched in three several wards within the same county, he shall not have execution against one only, but all shall be equally charged; 29 Edw. 3. 39. the like case. So here, in our case, there ought to be an equal distribution secundum quantitatem debitorum suorum;7 but if, after the debtor becomes a bankrupt, he may prefer one (who peradventure hath least need), and defeat and defraud many other poor men of their true debts, |[26 a] it would be unequal and unconscionable, and a great defect in the law, if, after that he hath utterly discredited himself by becoming a bankrupt, the law should credit him to make distribution of his goods to whom he pleased, being a bankrupt man, and of no credit; but the law, as hath been said before, hath appointed certain commissioners, of indifferency and credit, to make the distribution of his goods to every one of his creditors, rate and rate alike, a portion, according to the quantity of their debts, as the statute speaketh. Also, the case is stronger, because this gift is an assignment of the bankrupt after the commission awarded under the Great Seal, which commission is matter of record, whereof every one may take conusance.

Lastly and principally, the Court relied upon other words in the Act, scil. “And that every direction, bargain and sale, &c. done by the persons so authorised as is aforesaid, in form aforesaid, shall be good and effectual in law, &c., against the said offender, &c., and against all other persons claiming by, from, or under such offender, by any act had, made, or done, after any such person shall become bankrupt, &c.:”

So that, in as much as this assignment and delivery of the said goods was after the said Cook became bankrupt, notwithstanding that, the commissioners may well sell them. And the Court resolved, that the provisoconcerning gifts and grants bona fide,8 makes no gift or grant good, which the bankrupt makes after he becomes bankrupt, but excludes them out of the penalty inflicted by the same proviso. And divers exceptions were taken to the verdict by the defendant’s counsel.

1. That it was not found, that the said sale by the commissioners of the said goods was by deed enrolled, as they objected the words of the said Act require: but to that, it was answered, and resolved by the Court, that the words of the Act concerning enrolment of the deed coming next after these words, “goods and chattels,” are, “or otherwise to order the same for true satisfaction and payment, &c., and that every direction, order, &c., shall be good and effectual;” so this sale, without deed enrolled, is good enough.

2. It was objected, that it was not found that the commissioners had first seen the goods before their sale; for the words of the Act are, scil. “to be searched, viewed, &c.:” to that, it was answered, and resolved, that the said words, “or otherwise to order, &c.” “and that every direction, &c.” refer it to the discretion of the commissioners, and peradventure they cannot come to the sight of them.

3. That the commissioners ought to make several distributions to the several creditors, and not to make a joint sale, or assignment, to several creditors; for if |[26 b] he owed A. £20, B. £20, and C. £5, a joint sale, or assignment, to A. B. and C. is not according to the power given to the commissioners by the said Act; for the Act limits them to make disposition “amongst the creditors, &c., to every one a portion, rate and rate alike, according to the quantity of their debts;” but in this case, he, who hath the least debt, shall have as great interest in the goods, as he who hath the greatest; and so such assignment, in the said case put of several debts, is void, quod fuit concessum per Curiam.9 But to that it was answered, and resolved by the Court, that in the case at the Bar, it appears by the verdict, that the debt due to the plaintiffs was joint, for they found, ut supra, that the said John Cook was indebted to the plaintiffs in £273 12d., which shall be intended a joint-debt, and so the sale good, in the case at the Bar.

4. That for as much as the words of the Act are, “To every of the said creditors a portion, rate and rate alike, distribution ought to be made to all the creditors:” But here it appears, that the said Tibnam was a creditor, and £64 due to him, and yet nothing is allotted or assigned to him, so the sale is void: To that it was answered, and resolved by the Court, that in this case the factor of the said Tibnam, in ea parte, refused to come in as a creditor, but claimed all the goods: And this Act gives benefit to those who will inquire and come in as creditors, and not to those, who either out of obstinacy refuse, or through carelessness neglect, to come before the commissioners and pray the benefit of the said statute; for vigilantibus et non dormientibus jura subveniunt,10 for otherwise a debt might be concealed, or a creditor might absent himself, and so avoid all the proceedings of the commissioners by force of the said Act. And every creditor may take notice of the commission, being matter of record, as is aforesaid, and so no inconvenience can happen to any creditor who will be vigilant, but great inconvenience will follow, and the whole effect of the Act be overthrown if other construction shall be made.

[1. ][Ed.: according to the form of the statute,]

[2. ][Ed.: for merchandise previously bought from each of them;]

[3. ][Ed.: on the last [day] of March,]

[4. ][Ed.: in that behalf,]

[5. ][Ed.: in the same legal position.]

[6. ][Ed.: The laws themselves desire to be ruled by right;]

[7. ][Ed.: according to the amount of their debts:]

[8. ][Ed.: (In or with) good faith,]

[9. ][Ed.: which was granted by the Court.]

[10. ][Ed.: The laws aid those who are vigilant, not those who sleep,]