Death Penalty For Bankruptcy Crimes At U.S. Constitutional Convention (U.S. v. Duarte)

London Tower — site of many public hangings (Photo by Marilyn Swanson)

“Blackstone . . . observed that acts such as . . . robbery, certain thefts, fraudulent bankruptcy, forgery of coin, and forgery of a marriage license were felonies that could warrant death.”

This quote is from United States v. Duarte, Case No. 22-5048 (9th Cir., decided May 9, 2025), citing 4 William Blackstone, Commentaries on the Laws of England, at 6, 156, 162-65, 238-39, 246-47 (Oxford, Clarendon Press 1st ed. 1769).

Bankruptcy Lore

A bit of American lore on bankruptcy law is this: the insertion of the Bankruptcy Clause into the United States Constitution occurred with little debate at the Constitutional Convention and with only one naysayer.

The naysayer story goes like this:

“Roger Sherman of Connecticut objected to granting Congress authority to establish bankruptcy laws, remarking that in England, ‘Bankrutptcies were in some cases punishable with death’”; and
“In response, Gouverneur Morris of New York acknowledged that it was ‘an extensive & delicate subject,’ but agreed with the bankruptcy proposal because he did not see any ‘danger of abuse of the power by the Legislature of the U.S.’”

Such quotes are from the “Historical Background on Bankruptcy Clause” portion of “Constitution Annotated,” at Constitution.gov.

Context

I’ve always thought Roger Sherman’s “punishable with death” concern to be odd. That’s because it appears in the record of the Constitutional Convention without any context.

–Blackstone’s Commentaries

That context is finally provided by the May 9, 2025, opinion from the Ninth Circuit Court of Appeals quoted above. The context is no less than Blackstone’s Commentaries, published in 1769, which would have been known to those at the Constitutional Convention in 1787.

–A Hanging

What they would also have known is that hangings for bankruptcy fraud in Merry Olde England were still occurring at the time of the Constitutional Convention. Here’s an example of a famous series of events that “captured the attention of the times,” back in the 1760s:

“Hanging was a spectator sport in eighteenth-century England, and . . . the usual crowd turned out to watch [John Perrott] swing. They came to see off not a murderer, rapist, or highwayman, but rather a bankrupt.”
“Around eight o’clock in the morning on Wednesday, November 11, 1761, the condemned prisoner, John Perrott, was taken from his cell in London’s Newgate Prison. He spent some time praying with the prison chaplain and receiving the Sacrament; then his leg shackles were knocked off and his hands bound. At a quarter after ten, he appeared ‘pale and trembling’ in the prison yard.”
“A few minutes later the under sheriff came to transport Perrott to his execution. He was loaded onto a cart and carried the short distance to the scaffold erected at the ancient hanging place in West Smithfield. Once there, Perrott looked about anxiously, concerned to see his hearse. Reassured of its presence, he prayed fervently and at around eleven o’clock was ‘launched into eternity.’”
John Perrott was not the last person hanged in England for bankruptcy fraud—“John Senior, a clothier from the village of Alverthope, outside Wakefield in Yorkshire,” in 1813 became the actual “last man hanged for fraudulent bankruptcy in England.”

The foregoing quotes are from, E. Kadens, “The Last Bankrupt Hanged: Balancing Incentives in the Development of Bankruptcy Law,” 59 Duke L.J. 1229 (2010).

Progress

We’ve been making progress on bankruptcy laws in these United States from the time of the Constitutional Convention to today:

no one has ever been hanged in these United States for violation of bankruptcy laws;
debtors’ prisons were fully abolished in these United States by the 1830s; and
bankruptcy is no longer treated as part of the criminal law in these United States—it is treated as a civil matter, with criminal penalties arising only from specific wrongful acts.

Regress—Bartenwerfer v. Buckly?

But, still, it’s disconcerting when the U.S. Supreme Court does such things as limit bankruptcy relief for individual debtors based upon a bankruptcy ruling from the 1800s.

In Bartenwerfer v. Buckley, 598 U.S. 69 (2023), for example, the U.S. Supreme Court:

denies an individual debtor’s discharge, for fraud, without any proof that the debtor actually committed fraud . . . or participated in any fraud . . . or even knew anything about any fraud; and
it does so on the basis of a ruling from the 1800s—i.e., Strang v. Bradner, 114 U.S. 555 (1885).

Conclusion

It’s comforting to know that, in these United States, (i) the death penalty has never existed for bankruptcy crimes, (ii) debtors’ prisons are gone, and (iii) bankruptcy laws are civil laws—not criminal laws, absent specific wrongful acts.

But none of that was a given, back in the days of our Constitutional Convention, which provides context for the bit of bankruptcy lore described above.

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