REQUISITE PRECAUTIONS.

13094. All Bound.—If there is no proviso to the contrary, all who execute the deed are bound, without binding those who do not execute (13219); but,

13095. None Bound.—It is customary to provide that if all the creditors in the debtor's list do not execute, then the deed shall be void.

STIPULATED CONDITIONS.

13096. Fatal Neglect. If the terms stipulated for in a deed of composition are not completely fulfilled, the deed is henceforth void, and all the creditors are absolved from its provisions; thus,

13097. Unpaid Instalments.—If an instalment is not paid at the time provided, the creditor to whom it is payable has his right of action for the full unpaid balance.

13098. Stipulated Bills.—If it is stipulated that bills shall be given, neglect to give them in due time renders the deed void; and 13099. Dishonoured Bills.-If any bill given under a deed of composition is dishonoured, the deed is rendered void; and

NECESSARY TENDER.

13100. It has been expressly decided on many occasions the the sums stipulated for in a deed of composition must be tendered to the respective creditors; for,

13101. Application Needless. It is no part of the duty of a composition creditor to apply for the payment due to him; on the contrary,

13102. Duty of Debtor.—It is the duty of the composition debtor to seek out his creditors if need be, and to make tender (369: of the money as it comes due; therefore,

13103. Importance of Good Faith.—It is very important to every composition debtor that he should faithfully adhere to his stipula tions; otherwise,

VAIN EFFORTS.

13104. All his labour may be in vain;

13105. His debts may revive in full; and

13106. The ruin of the position of freedom he might have gained is probably inevitable; but,

COMPLETE CLEARANCE.

13107. When the terms of a composition deed are strict adhered to, it is a complete clearance of the debts it refers to; an 13103. The Bright Side.-There are hundreds of instances

where young men have succeeded, by a deed of composition, in continuing business without serious interruption or exposure, and have afterwards, with the advantage of the wisdom of maturer years and experience of the past, succeeded in acquiring not only wealth, but the esteem and confidence of their composition creditors.

STATUTORY COMPOSITIONS UNDER THE

ACT.a

LEGISLATIVE FACILITIES.

13109. As there are often difficulties in the way of procuring the complete execution of a private deed of composition, the Legislature has provided facilities for obtaining compositions under the compulsion of statutory provisions (13141); and

13110. Stubborn Minorities.-The object of statutory compositions being to compel the assent of unreasonable creditors, all the provisions are with a view to enforce upon stubborn minorities the course which the majorities conceive to be for their benefit (13141).

MEETING ESSENTIAL.

13111. A statutory composition must be initiated by calling a meeting of creditors (13231).

13112. The express provision of the Act is as follows:

The creditors of a debtor unable to pay his debts may, without any proceed ings in bankruptcy, by an extraordinary resolution (13122) resolve that a composition shall be accepted in satisfaction of the debts due to them from the debtor; therefore,

13113. Letter and Spirit.-According to the letter and spirit of the Act, a statutory meeting of creditors may be called in the same manner as any other meeting (13054); and

13114. Schedule.-The Act provides that every creditor whose name and debt appears upon the schedule which is submitted to

(a) It will be observed that the rules (13138) which have been made under the authority of the Act have exceedingly confused the law relating to statutory compositions. The essentials of the Act are here given, and those separately created by the rules elsewhere (13227). Parties interested must judge for themselves which course to pursue.

the first meeting shall be bound by the decision of the meeting whether he has notice of the meeting or not; for,

13115. All Bound.-There is no provision in the Act to the effect that creditors who have no notice of statutory proceedings shall not be bound by them.

PRESENCE OF DEBTOR.

13116. Essential.—At every statutory meeting of creditors the debtor is bound to be present, unless his absence is caused by severe illness, or other cause declared by the meeting to be a suffi cient excuse (13227); and

13117. Statement.-The Act provides that he must be prepared at the first meeting with a full statement of his affairs, showing the whole of his debts, his assets, and a list of his creditors, with the amount owing to each respectively (13227); and

13118. Examination.-He is bound to submit to examination, and must answer questions put to him touching the state of his affairs (13227).

SPECIAL RESOLUTIONS.

13119. All the important business of statutory meetings of creditor must be by means of special resolutions (13273-8); and

13120. Definition. A special resolution of creditors is one passed by a numerical majority in number and three-fourths value of the creditors actually present in person or by proxy at a duly constituted meeting (13113); but,

13121. Small Creditors.—Creditors for amounts of £10 or less are not entitled to be counted in the numerical majority (13250).

EXTRAORDINARY RESOLUTIONS.

13122. In order to make a statutory composition binding. must be confirmed by an "extraordinary" resolution (13283); and 13123. Definition.—An extraordinary resolution of creditors is a special resolution passed by two successive meetings of creditors; and

13124. Essential Preliminary.—An adjourned meeting of cre tors for the purpose of completing an extraordinary resolution mus be called by circular, issued not less than seven days nor more th fourteen days previously to such adjourned meeting (13280).

13125. Presentation to Registrar.-When an extraordinary rese lution of creditors has been duly passed in favour of a proposed composition with creditors, such resolution, in order to take effe must be presented, together with the debtor's statement of afers

to the registrar of the Bankruptcy Court of the district (13226); and

13126. Registration.—When an extraordinary resolution accepting a composition, accompanied by a clear statement of the affairs of the debtor, is duly presented to the registrar of the Bankruptcy Court of the district, it is the duty of such registrar to register such resolution in the records of such Court (13226); and

13127. Binding.-As soon as an extraordinary resolution is duly registered, it becomes binding upon all the creditors who appear upon the schedule filed with the registrar (13115); but,

OPTION OF CREDITORS.

13128. Revision of Resolution.-The creditors may alter or vary the terms they have made by any subsequent extraordinary resolution duly registered (13126); for,

13129. Resolution Superseded. A subsequent extraordinary resolution, duly registered, alters or supersedes any previous resolution which has been registered (13285); and

13130. Proceedings in Bankruptcy.-Notwithstanding that proceedings may be going on towards a statutory composition, any creditor to the amount of £50, or any number of creditors whose aggregate claims amount to £50, may, any time before the completion of an extraordinary resolution, anticipate the decision by proceedings in bankruptcy (13367); and

13131. Opposition to Registration.-Though an extraordinary resolution may have been passed, any creditor or creditors whose claim amounts to £50, may appear before the registrar of the Bankruptcy Court of the district to show cause why it should not be registered (13126); or,

13132. After Registration.—After a statutory extraordinary resolution has been registered, any creditor or creditors whose claims amount to £50 may inspect the registered statement; and

13133. May effectually object to subsequent proceedings, and supersede them by proceedings in bankruptcy (13367); provided always that,

13134. Necessary Justification.-Should a creditor or creditors object to proceedings for the purpose of effecting a statutory composition at any stage of such proceedings, the objection must be sustained by unqualified and conclusive evidence that the proceedings are fraudulent, dilatory, unreasonable, or otherwise irregular (13350).

EXCLUDED CREDITORS.

13135. Not Bound.-Actual creditors of the debtor whose names do not appear in the registered statement of affairs, are not bound by the composition (13126).

13136. Survival of Debts.-Their debts and rights of action against the debtor survive, and may be resumed any time not barred by limitations (6607).

OFFICIAL CONFUSION.

13137. The foregoing particulars of the mode of proceeding to procure a statutory composition are strictly in accordance with the 126th Section of the Bankruptcy Act, 1869 (13324); but,

RULES.

13138. The 78th Section empowers the Lord Chancellor and the Chief Judge in Bankruptcy to make or alter rules for proceedings under the Act; and

13139. Two Thousand Provisions.-The power of making rules has been exercised to the extent of publishing no less than 319 original rules, accompanied by 136 original forms, which, together with 136 very long and elaborate Sections of the Act, each section including, on an average, at least ten provisions, make, altogether, with supplementary rules, orders, and forms, about two thousand skilfully contrived and often contradictory instruments for badgering both debtors and creditors into ruination and law expenses; and

13140. Perplexing Jumble.-Though compositions and liquidations are dealt with in the Act quite distinctly, and in separate parts of the Act, the rules now in force, as well as the forms accompanying them, jumble the two things together as though the Act made no distinction; consequently,

EXTREME DIFFICULTY.

13141. The tendency of the rules is to render statutory com positions extremely difficult to accomplish; because,

13142. Defiance of the Act.-Every debtor who seeks to effect a statutory composition is compelled, under the rules, in defiance of the Act, to proceed in the same manner as for a liquidation (13227); hence,

13143. Hostile Machinery.—A debtor cannot seek a statutory composition with a view to continuing his business without at the same time setting in motion the machinery which may be turned