Debt

Debt, a legal obligation to pay money, arising out of a contract, express or implied. In general, whenever a contract is such as to give one of the parties a right to receive a liquidated sum of money from another, as in the case of a bond for the payment of money, or an implied promise to pay for goods supplied so much as they shall be reasonably worth - a debt then exists between these parties; while if the demand be of wholly uncertain amount (as, say, for damages arising from negligence or otherwise) it is described not as a debt, but as a claim for damages. As debts may thus arise from contracts, and the contracts may be either specialty contracts or simple contracts, so the debts resulting therefrom are termed either specialty debts or simple contract debts. Debts may, however, arise not only by deed or simple contract, but by matter of record, and in that case they receive the appellation of judgment debts or debts of record. A debt of record is a sum of money appearing to be due upon the evidence of a court of record; thus it may be due upon a statute merchant or statute staple, or upon a recognisance, which latter is an obligation of record, entered into before some court or magistrate duly authorised, whereby the party bound (the recognisor) acknowledges his debt to the Crown or to a private person (the recognisee) as the case may be, to be void if he shall do some particular act - as if he shall appear at the assizes, keep the peace, pay a certain debt, or the like. Judgment debts are also, as already mentioned, debts of record, for when any sum is, in any action in any court of record, adjudged to be due from one party to another, whether that sum was originally liquidated so as to constitute a debt between them, or was fixed and ascertained for the first time by the verdict of a judge or jury, the claim having been originally in the nature of damages, that is a judgment debt, and a debt of record. Debts may also arise other than from contracts and judgments, as where an Act of Parliament affixes a penalty to some particular offence which is made recoverable by an informer; any one committing such offence becomes indebted in the amount of the penalty to the informer, so soon as the information is laid. Also anyone who has never contracted at all to pay a rent charge issuing out of land may become liable therefor as for a debt, and that merely by reason of his having taken and enjoyed the land out of which the rent charge issues. And practically there is a contract implied by law in all such cases of liability.

Debts may be attached. Debts are now assignable at law so as to enable the assignee to sue for them in his own name, but express notice must be given to the debtor, trustee, or other person from whom the assignor would be entitled to claim such debt; formerly he could only sue in the name of the debtee. Debts are further distinguished as secured and unsecured. By the Judicature Act, 1873, it is provided that in the administration of an insolvent estate of a deceased person and in the winding up of an insolvent company the same rule shall prevail as to the rights of secured and unsecured creditors, and as to debts and liabilities provable, and as to the valuation of annuities and future and contingent liabilities respectively as may be in force for the time being under the law of bankruptcy with respect to the estates of persons adjudged bankrupt.