Case 11. Fraudulent Foresight

Titius, a Catholic merchant, when he perceived that within a short time he would necessarily have to surrender his goods, sent two thousand pounds to the rector of the college where his two sons were being educated, which sum would suffice to pay the expenses of the whole future education of his sons. The matter happened as he had foreseen; but, after paying fifteen shillings for each pound owed, he received a legal discharge (absolute discharge), without the creditors knowing anything about those two thousand pounds. While making his Easter confession, Titius disclosed all these things to his confessor. Hence it is asked:

1. What is a fraudulent surrender of goods?

2. After one who has surrendered his goods has received a discharge, is he still bound to pay his debts in full?

3. What is to be said of the obligations and manner of acting of Titius?

1. What is fraudulent bankruptcy?

Bankruptcy may be fraudulent in many ways. A few instances may be given. “1. If the bankrupt does not, to the best of his knowledge and belief, discover to his trustee all his property, and the mode in which he has disposed of any part thereof; except in the ordinary way of his trade, if any, or in the ordinary expenses of his family. 2. If he does not deliver up all such part of his property as is in his custody or control, and which he is required by law to deliver up. 3. If, after the presentation of a petition, or within four months before, he conceals any part of his property to the value of £10 or upwards, or conceals any debt due to or from him. 4. If within the same period he removes any part of his property to the value of £10 or upwards.”¹

1 Stephen, Commentaries, vol. ii, p. 244.

2. This question was answered above, p. 284.

3. What about the obligations and the way of acting of Titius? Titius is a fraudulent bankrupt, and his discharge will not avail him in conscience. The greater part at least of the £2000 which he sent to the rector of the college belonged to his creditors, and the effect of his action is that his sons are being educated at the expense of his creditors. Titius may allow the rector to keep practically all that is due to the college for the education of the two boys up to the present, but either the rest of the £2000 or a sum equal to it he should distribute among his creditors.