Debt means a definite sum of money owed by A to B. The word includes the right of the creditor as well as the liability of the debtor. It is contrasted with the liability for damages, or other unliquidated liability. In England there is, in general, no method of securing debts before they are payable (what is called a garnishee order applying only to judgment debts); but future and contingent debts may in Scotland be secured by arrestment or inhibition where the debtor's solvency is doubtful. The main division of debts in Scotland is into movable and heritable—the former being primarily chargeable only upon the debtor's personal funds, although they may, by adjudication, be made also a charge upon his real estate; and the latter being directly a charge upon his real estate. The former have always been treated as personal estate as far as regards the creditor's succession, while until 1868 the latter were considered as heritable estate. Now, there is no distinction. In England also a debt may be secured on the debtor's real estate, as by mortgage or equitable lien; but these mortgages were always regarded as personal estate, although until 1874 the formal title was in the heir, not the executor. In England, a debt of record is one proved to exist by the records of a court. The most important are judgment debts, which have not only certain facilities in execution and attachment, but must be paid in full out of the personal estate before any debts due on contract. A judgment debt, when delivered in execution, creates a charge on the debtor's real estate, as if he had given a mortgage. Specialty debts in England are debts by contract created by a deed or an instrument under seal. Such debts were formerly entitled to a preference over simple contract debts, such as the liability under a bill of exchange. But that was altered in 1869. In the administration of a deceased's estate, the order of preference among debts (as recognised by the Judicature Act of 1873) is (1) expenses; (2) crown debts; (3) judgment debts; (4) recognisances and statutes; (5) special and simple contract debts. Under the Judicature Act in England, and at common law in Scotland, in the winding up of the estates of deceased persons, provision must be made for the valuation of contingent and future liabilities or debts, very much in the same way as under sequestration or liquidation proceedings in cases of bankruptcy.
In bankruptcy there are certain preferential debts, such as taxes and rates, wages and salaries. In England, actions of debt, when on contract under seal, must be brought within twenty years; on other contracts, within six years. The time in both cases is taken from the accruing of the cause of action—i.e. the breach of contract; but if a subsequent acknowledgment in writing has been made by the party liable, or he has paid the debt in part, or paid interest, the time will run from such subsequent act. In Scotland, on the other hand, obligations generally, and especially such as correspond to the specialty contracts of England, are only subject to the long negative prescription of forty years, but tradesmen's accounts and some others prescribe in three years (see PRESCRIPTION). The debtor's summons, commonly used in England, is a summons to pay generally a trade debt (not less than £50) within so many days, otherwise an act of bankruptcy will have been committed, and a bankruptcy petition will be presented.
IMPRISONMENT OF DEBTORS.—Except in the case of fraud, no debtor can be imprisoned in England for a debt below £20, exclusive of costs. But such debtors, if ordered by an insolvent or county court to pay the debt by instalments, or otherwise, may, if they make default, be committed by the court to prison for forty days. In Scotland, the limit below which imprisonment for debt is incompetent is £8, 6s. 8d. If a debtor escapes after arrest, and before imprisonment, the officer of the law in charge of the process is liable for the debt.
In England, imprisonment for debt was abolished by the Debtors Act, 1869, except in certain cases, the most important of which are those of a defaulting trustee and of a judgment debtor who is able, but refuses to pay. In certain actions for £50, defendants about to leave the country may be imprisoned, and under the Absconding Debtors Act, 1870, insolvent debtors may be arrested to prevent their evading bankruptcy proceedings by going abroad. In Scotland, imprisonment for debt was abolished by the Debtors (Scotland) Act, 1880, 43 and 44 Vict. chap. 34, generally known as Cameron's Act; except in the case of taxes, fines, or penalties due to the Queen, and rates and assessments lawfully imposed, and also sums decreed for alimony. By the Civil Imprisonment (Scotland) Act, 1882, 45 and 46 Vict. chap. 42, imprisonment was further limited, (1) in the case of assessments, to a period of six weeks; (2) in the case of alimony, to debtors wilfully failing to pay, though possessed of means, or being able to earn the same. These acts do not exclude imprisonment where a debtor is in meditatione fugæ, or where he refuses to perform an obligation ad factum præstandum. What is known in Scotland as a fugæ warrant is granted where it appears that a debtor, in a debt above £8, 6s. 8d., is about to leave the country without providing for its payment. Security must be given to present the debtor when decree is obtained, so that he may be charged to pay. It is thought this remedy does not apply to foreigners travelling through Scotland for pleasure.
In the United States originally imprisonment of debtors was adopted as a part of the common law, but at the present time imprisonment for debt, except in case of fraud, or of an absconding debtor, is believed not to exist in any of the states. Congress, empowered by the United States Constitution to make a uniform bankrupt law, has exercised this power, and subsequently repealed the law of imprisonment (see BANKRUPT); and now, by Revised Statutes 990 and 991, no person can be imprisoned for debt by any process issuing out of the courts of the United States, in any state where by the laws of the state imprisonment for debt has been abolished. Most of the states, by constitutional provision (either by Article of the Constitution, or by Declaration in Bill of Rights), have prohibited arrest or imprisonment for debt, while the other states, either by direct statutes prohibiting imprisonment for debt, or by poor debtors laws, or by insolvent laws, secure the same result; it being held to be against public policy to deprive a man, by imprisonment, of the power to pay his debts, and make him a direct charge upon the state. These statutes and constitutional provisions are not in conflict with the provision of the United States Constitution, prohibiting the states from making any law impairing the obligation of contracts, as imprisonment for debt is no part of the contract; but they do not in general apply to arrest in actions for tort. In some states, statutes providing for the arrest of a defendant in actions for breach of promise have been held to be unconstitutional, as in conflict with the provisions of state constitution prohibiting arrest for debt, that provision applying to mesne as well as final process. If a person in custody of the court is discharged by giving bail for the payment of a fine or other money within a certain specified time, the bail may be forfeited, but no commitment can be made for the payment of the fine, as that would be imprisonment for debt, but a judge may imprison for personal examination in act of execution.
RECOVERY OF DEBTS.—With respect to the recovery of debts, if the debt exceeds £50 in amount, the creditor must, in England, proceed in one of the superior courts of law; and, in Scotland, he may proceed either before the superior court or before the sheriff-court. If the debt do not exceed £50, the creditor may proceed in the English county court, or the sheriff-court; if below £25, in Scotland he must proceed in the sheriff-court.
In England, the first step to recover a debt not exceeding £50 in the county court, is for the creditor to go to the registrar of the district within which the defender resides, or to the jurisdiction of which he is on some other ground amenable. He there fills up a printed form, called a plaint, shortly stating the claim and the ground of it. The registrar upon this issues a summons, and gives it to the bailiff of the court, who serves a copy of it on the defendant. This summons names a day on which the parties must appear before the judge. No written pleadings are in general necessary; but if the debtor has any special defence—such as, that he has a counter-claim against the plaintiff, or that he (the defendant) was a minor at the time the debt was contracted, or that he has been discharged under the bankruptcy acts—he must give the creditor notice in writing five days before the hearing. If he simply denies the debt, he has nothing to do but to attend the hearing, with what witnesses he may require. If the witnesses are not likely to come voluntarily, summonses to enforce their attendance (as well as the production of documents) may be obtained at the registrar's office. At the hearing, the judge (unless a jury have been required) proceeds himself in a summary way to try the cause. He examines the witnesses on oath, keeping no record of the evidence; and, on hearing the parties, gives judgment at once. If he decides for the plaintiff, he may make the sum payable at once, or in cases below £20, by instalments. The costs are according to a fixed scale, which may be seen in the court or in the registrar's office.
There are provisions for parties having their case tried by jury, and also for appeal on questions of law. Either party who wishes it, may ask for a jury; and if the sum claimed exceed £5, the demand must be complied with. If there be a jury, the number of jurors is five, and their verdict must be unanimous. The party dissatisfied with the verdict may ask for a new trial, and the judge, if he thinks right, may grant it on such terms as he thinks reasonable. This power to try by jury is used very rarely indeed—less than one per cent. of all the cases which go to trial being tried in that manner. The right to appeal is against decisions in point of law, and against the admission and rejection of evidence. The appeal is to a Divisional Court of the High Court of Justice. It is taken by requiring the judge to state a case for the opinion of the higher court, and thereafter entering it for discussion there. The appellant must give security for the costs of the appeal, and (if defendant) for the amount (both of principal and costs) contained in the judgment. The right of appeal is not much exercised, and the parties have it in their power to agree beforehand (in writing) that there is to be none. Leave to appeal is required where the sum sued for is less than £20. Before trial, cases may be removed by Certiorari (q.v.) to the High Court of Justice, but that is in the discretion of the superior judge.
When judgment is for the creditor, and the order for payment is not complied with, execution may issue against the goods of the debtor. Although imprisonment for debt was (in the general case) abolished in England in 1869, it still remains the law that in the county courts, in certain cases, the debtor may also be imprisoned. The debtor is summoned to show cause why he has not obeyed the judgment. At this hearing (whether the debtor attend or not), the creditor may get an order to commit, if he can show, to the judge's satisfaction, that the debtor has had since the judgment sufficient means to pay, and has refused to do so. This imprisonment may be for six weeks, but it is not held to be equivalent to payment. Of course the debtor is protected by bankruptcy or liquidation.
Although it is competent to proceed in the county courts for sums as large as £50, they are not much used for sums above £20. When the debt does not exceed £20, there is a certain compulsion on the creditor to resort to the county court, for if he resorts to a superior court, and recover no more than that sum, he will have no costs, unless he satisfies the court that he had sufficient reason for taking that course. In point of fact, there is only about one case for a sum exceeding £20, for a hundred which do not exceed it; and the average amount sued for is between £2 and £3. The law upon this extremely important practical matter is now consolidated in the County Courts Act, 1888.
In Scotland, under the Small Debt Act, 1 Vict. chap. 41, as amended in 1853, debts not exceeding £12 may be recovered in the Sheriff Small-debt Court. The creditor takes two copies of his account to the office of the sheriff-clerk for the circuit in which the debtor lives; from him he obtains a summons, in which the day for the trial is fixed; and this summons he takes to an officer of the court (sheriff-officer), who serves a notice, with one of the copies of the account, on the debtor, at least six days before the trial. The presence of a witness at citation was dispensed with by the Citation Amendment Act of 1871, which also abolished lockhole citation; and under the Citation Amendment Act of 1882, citation by registered letter instead of by messenger-at-arms will be allowed in the general case, it being formerly allowed only where the debtor hid himself, or refused access, or had gone for forty days. Both parties may employ an officer to cite witnesses. The creditor must appear at the trial, either by himself or by one of his family, or by such other person as the sheriff may permit. Law-agents require special permission to appear, unless where both parties consent. If the defender intend to plead a counter-claim, he must cause a sheriff-officer to give a copy of it to the pursuer, at least one free day before the trial; otherwise, there are no written pleadings. On the day fixed for the trial, if the debtor does not appear, decree is given against him, with expenses, as a matter of course; against which he can afterwards be 'reponed' only on consignment of the expenses and a sum of 10s. If both parties appear, the judge hears the case. If the pursuer or the defender have clearly no good ground of action or defence, he disposes of it at once; but if not, he examines the witnesses on oath. No record of the evidence is taken. At any time before judgment, the case may be remitted to the 'ordinary court' of the sheriff, where it is conducted by agents on written pleadings and written proof. Otherwise, the whole proceedings are concluded in one day, adjournments not being permitted, except in special cases. After judgment, there is no appeal, except on the ground of want of jurisdiction, malice, oppression, or wilful neglect of the statutory forms, in which cases there is an appeal to the Court of Justiciary. The judgment provides for execution against the debtor's goods. This process is often used for the recovery of small rents.
The Debts Recovery Act, 1867 (30 and 31 Vict. chap. 96), has extended the Scottish small-debt jurisdiction, with important alterations, to £50. The class of debts that may be sued for between £12 and £50 has been limited to those which most require summary proceedings—namely, those which prescribe if not sued for within three years, such as all ordinary merchants' accounts, and accounts for professional services or for servants' wages. The principal differences between this and the proper small-debt proceedings are, that agents are allowed to appear; that there are two days in court, one at which the grounds of action and defence are stated, and an adjourned one, at which the witnesses are examined; that the judge makes a note of the pleas of the parties; that a record is kept (if required) of the admissions in fact and of the evidence; and that there is a right of appeal, if the debt does not exceed £25, from the sheriff-substitute to the sheriff, and if it exceed £25, also to the Court of Session. If the judge be not asked to take a note of the evidence, there is no appeal in matters of fact. All the fees and costs, whether payable to the sheriff-clerk, the officers of the court, or the law-agents, are distinctly stated in the act, and must be hung up in every court. In other respects, the proceedings are analogous to those in the Small-debt Court, and, like them, may proceed either at the principal town of the county, or at one of the towns at which sheriff's circuit-courts are held.
In England and in Scotland there are other courts which deal with the recovery of debts beside the county courts. The Sheriff's Court of the City of London has a jurisdiction similar in general to that of the English county courts; and there are local courts, such as the Court of Passage at Liverpool, and the Manor Court at Bradford, which exercise jurisdiction in small as well as other debts. In Scotland, the magistrates of royal burghs, and the justices of peace, possess a small-debt jurisdiction for debts not exceeding £5 in amount. In the latter case, the Royal Commission of 1870 recommended a reform, especially as regards fees and execution against goods. The widespread belief that a corpse could be attached for debt was a vulgar error.
LAWS OF DEBTOR AND CREDITOR.—In the history of execution for debt the march of social progress may be traced in earlier times. On the one hand, lending is confounded with alms-giving; and the exaction of interest, and even of capital, is regarded as an act of inhumanity towards the poor. On the other hand, when the creditor's rights come to be recognised in a legal sense, there seem to be no limits set to them. If he is entitled to exact the debt at all, he is entitled to seize the goods of the debtor; and if the debtor has no goods, he is entitled to his services. But the possession of his services implies the possession of his person; and the possession of his person implies the possession of his life. The person of the individual, the father of a family, brings along with it right over his wife, his children, and his slaves. The creditor thus becomes the absolute master of the life and liberty of his debtor, and of all those who are dependent upon him. The arrangements of the Mosaic Law are an illustration of the manner in which, in the rude forms of society, the laws of debt thus combine a degree of lenity with a degree of severity which are equally alien to modern views. If an Israelite became poor, it was a duty to lend to him, and no interest was to be exacted either in money or in produce. If he was a foreigner, the case was different, and the taking of interest was legal (Exod. xxii. 25; Deut. xxiii. 19, 20; Lev. xxv. 35-38). When the Sabbatical year arrived—i.e. at the end of every seven years—there was a general remission of debts as between Israelite and Israelite; and the near approach of the year of remission was not to be recognised as an apology for declining to lend to an indigent brother (Deut. xv. 1-11). Pledges, it is true, might be taken, but even here the same humane principles prevailed. The upper millstone was sacred, for to take it would be to deprive the debtor of the means of subsistence. If raiment was the pledge, it must be returned before nightfall, when it might be required for a covering (Exod. xxii. 26, 27); and the widow's garment could not be taken in pledge. In strange contrast to this is the provision (Lev. xxv. 39) that a poor Israelite may be sold to one possessed of substance, even when modified by the special provision that he shall serve as a hired servant, not as a bond-servant, and shall be set at liberty when the year of jubilee arrives. Michaelis says that the judicial procedure for debt was quite summary, the most important causes being decided probably in a single quarter of an hour; and he remarks that Moses nowhere thinks it necessary to mention how a debt was to be proved before a judge. There was, however, an extensive system of appeal; from the judge over 10, the case was carried to the judges over 50, 100, and 1000, and finally to Moses himself. As every Israelite was entitled to claim the land of his fathers at the jubilee year, and thus to place matters on the footing on which they were after the settlement in Palestine, debts and burdens on land were limited to claims to the fruits of forty-two harvests; but houses, with the exception of those of the Levites, might be sold in perpetuity (Lev. xxv. 29, 30, 32, 33). Children were often given in pledge (Job, xxiv. 9), and ultimately into slavery, in payment of debt (2 Kings, iv. 1). Subsequent to the Captivity, the pressure of debts upon the poor became so intolerable, that Nehemiah espoused their cause, and insisted on a general remission (Nehem. v.), exacting from the rich an oath that they would never afterwards press for payment.
Both in Greece (Plut. Vita Solonis, 15) and in Rome (A. Gell. xx. 1, 19; Liv. ii. 23) the creditor had a claim to the person of the debtor. Previous to the time of Solon this arrangement had produced consequences at Athens closely analogous to those which afterwards led to the struggles between the patricians and plebeians at Rome; and his abolition of it forms one of Solon's many claims to the character of an enlightened legislator. By the Twelve Tables, it was enacted at Rome that if the debtor admitted the debt, or had had judgment pronounced against him for it, thirty days should be allowed him for payment. At the expiration of that period he was liable to be given into the hands of his creditor, who kept him sixty days in chains, exposing him on three market days, and proclaiming his debt. If no one stepped in to release him, the debtor at the end of that time might be sold for a slave, or put to death. If there were several creditors, the letter of the law permitted them to cut their debtor in pieces, sharing him in proportion to their claims; but Gellius says this law was never enforced. To treat him as a slave, however, and make him work out the debt, was the common practice; and the children in his power, in accordance with the whole constitution of society at Rome, followed his condition. The Lex Poetelia (326 B.C.) alleviated the condition of the debtors (nexi) by prohibiting the voluntary alienation of personal freedom. It is uncertain whether it also put an end to the involuntary alienation by the execution of judgment debts. 'During the Republic a debtor could not be taken as a slave to satisfy a judgment debt. The imprisonment of the debtor in a public prison took the place of his reduction to slavery' (chap. vii. 71, 1). Great prominence was given by the plebeians to a change in the laws of debtor and creditor, on the occasion of their first secession, in 494 B.C.; and subsequently during the whole course of the struggles between the two orders. At Rome the creditor was not bound to maintain his debtor in prison, but it was an offence to prevent food and bedding being supplied. In 320 A.D. Constantine abolished imprisonment for debt, unless the debtor was contumacious.
During the feudal period the person in general was not attachable for debt, imprisonment being inconsistent with the duties of warlike service, to which every man was bound; and it was for the encouragement of commerce, and in consideration of the merchant having to deal with strangers and foreigners, that it was first introduced by the mercantile communities of Europe.
For further information on this and cognate subjects, see other articles in this work, such as ARRESTMENT, ATTACHMENT, BANKRUPTCY, BOND, CESSIO BONORUM, CONTRACT, DILIGENCE, HUSBAND AND WIFE, INFANT, SANCTUARY, &c. For the history of the law of imprisonment for debt, see, for England, Reeves's History of the Law, and for Scotland, Bell's Commentaries. For archaic systems of execution for debt, such as the Indian darna, or fasting at the door of the debtor, see the works of Sir Henry Sumner Maine.