Shortly after I began working as an archivist at the Municipal Archives in 2017, I was asked to write a finding aid for the “insolvency assignment” records. My first thought was… what’s an insolvency assignment? I had no idea. But I did notice that the date span of the records extended back to the late 18th century, so that was promising. With a little research I learned that an insolvency assignment was a legal process during which debtors and/or their creditors petitioned the New York State Supreme Court to appoint an assignee to manage the sale of the debtor’s property to pay off debts owed to his or her creditors.
Then, when I began to examine the records I discovered many of the insolvent debtors were not the destitute in New York City, but rather men and women of means. They were merchants and stockbrokers, some of whom came from well-established New York families. I found records of some stockbrokers who started what would become the New York Stock Exchange including Leonard A. Bleecker, Alexander Zunzt, Ephraim Hart, Benjamin Seixas, and Samuel March. Alexander Zunzt, who owed over 50,000 pounds in 1786, petitioned the New York Supreme Court for an insolvency assignment to be discharged from his debt four times—in 1786, 1798, 1804, and 1811. I also found the names of descendants from some of the earliest Dutch settlers of New Netherland such as Leffert Lefferts and Garret Rapalje. Both Lefferts and Rapalje came from wealthy families who made their fortunes from farming and were slaveholders.
The Archives’ insolvency assignment records provide documentation of the legal process as debtors and/or their creditors petitioned the New York State Supreme Court (at the county level) to appoint an assignee to manage the sale of the debtor’s property to pay off debt. Depending on the state or federal law, insolvency assignments could be either voluntary (petitioned by debtor and some of his/her creditors) or involuntary (petitioned by creditors if the debtor tried to flee or hide from creditors, or lived in another state or country). In the State of New York, the Legislature passed laws pertaining to insolvent debtors as early as April 13, 1786 when they passed the “Act for the relief of insolvent debtors” which allowed debtors to keep some clothing and bedding. As described in the 1991 publication Duely & Constantly Kept: A History of the New York Supreme Court, 1691-1847, documents found in a voluntary insolvency assignment usually included:
- Petition of the insolvent debtor and his/her creditors. The creditors had to represent three-fourths, or after 1813, two-thirds of the total amount owed by the debtor.
- Appointment of assignee(s) to the estate of the debtor who would serve as trustee(s) for the petitioning creditors and oversee the selling off of the debt during the legal process.
- Affidavit of each petitioning creditor stating the amount of debt owed to him/her.
- Account of debts of the insolvent debtor, with names of debtors and the amounts owed them
- Account and inventory of real estate and personal estate of the insolvent debtor. This is often in the form of an itemized list of property.
- Order by the judge for the assignee(s) to advertise the sale of the debtor’s property. The purpose of the advertisement was to notify other creditors to allow them the chance to challenge the sale of the property.
- Affidavit(s) of the publication of the advertisement to sell the debtor’s property. This included a clipping of the newspaper advertisement.
- Certificate of assignment by assignee(s) that affirms that the property had been delivered to them.
- Affidavit of the assignment by the judge that discharged the insolvent from further liability for debts incurred prior to the date of his petition.
Garret Rapalje: Importer, land speculator, and insolvent debtor
Garret Rapalje was born in New York in 1730. He was a descendent of Joris Jansen Rapelje (the family surname has been spelled numerous ways over the years) and Catalina Trico who settled in New Netherland around 1624. Rapelye Street in Brooklyn is named after the family. Garret Rapalje married Helena de Nyse and they had four children. Rapalje was a land speculator and importer based in New York City and also had an iron foundry and grist mill in New Jersey. During the American Revolutionary War, it appears that Rapalje was a Loyalist and he was briefly imprisoned in 1777 and 1778. In 1787, he filed an insolvency petition with some of his creditors in the New York County Supreme Court. At time of the petition he was in jail in New York City due to his insolvency. According to his insolvency assignment records he owned at least 10,500 acres in New York, New Jersey, and what would become Vermont (at the time, Vermont was not yet a state). Sometime after discharging his debt in 1787, he moved to the present-day Louisiana (it was not part of the United States at this time) where he had a plantation. Traces of Garret Rapalje’s history can be found in the Natchez District (now part of Louisiana and Mississippi) court records dating from 1793 pertaining to his plantation and his enslavement of people. Before he died in circa 1796 he moved back to New York City.
The Municipal Archives’ collection of New York County Supreme Court insolvency assignment records date from 1768-1908, with the majority dating from 1798-1900. They document insolvent debtors whose insolvency proceedings were held in the New York County Supreme Court and the legal actions that were taken in response to their insolvency. Actions included imprisonment (imprisonment for debt was abolished by the New York State Legislature in 1831) and/or selling the real estate and personal property of a debtor to pay creditors.
As a body of records, the insolvency assignments offer a lot of stories. They document financial history in New York City and the United States as they illustrate the numerous financial panics and subsequent state and federal laws that were enacted to deal with the repercussions of the panics. As all but four of the insolvency assignments date from after the American Revolution, they also help document the transition of the American legal system from one highly influenced by the British legal system to a uniquely American legal system. The records also have great research potential as they can help fill gaps in the historical record and can be used by genealogists and family historians.
Contact the New York City Municipal Archives for the finding aid to the insolvencies. For more information on the court system, read: Duely & Constantly Kept, A History of the New York Supreme Court, 1691-1847. James Folts, The New York State Archives and Records Administration and New York State Court of Appeals, 1991.