The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1869-04-10 00:00:00

THE CHILD OF GREAT TRAVAIL!

"The friend of other years" reappeared in the
House of Commons on Monday night, and mirabile
diette, there was absolutely something new said about
it (remarks The Timex). The Attorney-General
moved the second reading of the Bankruptcy Bill, and
under ordinary circumstances nothing was to be ex-
pected on such an occasion but an interchange of
gossipping complaints and suggestions between legal
and commercial members. We have had many Bank-
ruptcy Bills, and they have all been treated in the
same manner. Each measure has been hailed as an
improvement on its predecessor, and after the lapse of
a few months the law has commonly been pronounced to
be as bad as ever. The Lord Chancellor did indeed
tell the House of Lords that this particular Bill
PM the child IA great travail. The Government had
exhausted their energies in the way of Legal Reform
in shaping it. No lees than four other subjects of the
highest legal importance had been deferred that the
Law of Bankruptcy might be maturely considered.
Yet we believe we shtuld have received the Bill with
silent and humble incredulity, and have been content
to await the evidence of experierce as to its value, had
not the sec.nd reading been, 88 we have said, signal-
ized by some novelty of discussion. Mr. Jessel, a new
member, entered at length upon the principles of the
satisfaction and discharge of contracts, and impressed
the House with an ability which has already made a
reputation in the Court of Chancery,

The following interesting extracts are from the hon.
member's speech :
Everyone must admit that the great and first object when
a man failed in paying his debts was to bring about as soon
as possible an arrahgement between himself and his creditors.
That arrangement should be knitted by the will of the con-
tracting parties. It was impossible to get agreement among
a large number, and therefore all nations bad entitled the
majority to bind the remainder. Commercial law was a
branch of national law, and great advantage would be
gained by looking at the Roinau law. Only in a sense
was it true that the common law was not based on the
Roman law, for we had used the Roman law as the
Turks had treated the splendid edifices of the countries
they conquered, and had pulled out a stone here and
there, and made buildings which we called our own.
rhe great principle with every nation had been to bong
creditor and debtor to an agreement. The majority
adopted was three-fourths. In this bill the fraction was
raised to five-sixths, for which departure from the pi esent
law he saw no reason. The continental law left the majority
of the creditors perfectly free to make any arrangements
they wished with the debtor, and this was the true principle.
Precautions should, however, be taken to secure a real
majority, and to prevent persons from voting who were not
entitled to vote as ceeditors. It was in this point that the
existing Bankruptcy Act failed. There was no better means
of securing genuine creditors than to make them prove their
debts, as in bankruptcy. This was the practice in France;
and, so far as he knew, in every continental nation. Having
ascertained who the creditors were, the twat thug wasto
ascertain their wishes—,hear, hoar—which was now not
done at all ; the assignees were really not chosen
by the creditors, but by one or two competing solicitors.
Thus would not he the case if they had a genuine meet-
ing of creditors to see if an arrangement was possible to
avoid bankruptcy. There was another danger—that of some
creditors being paid .to give their anent. In this country
this had never been made criminal, but It was so made in
every nation on the Continent, lie should much like to see
the provb ions of the French commercial code adopted in our
law, and if that were done he would give to creditors full
poa er to make what arrangements they chose.
The great principles to look to were—first, to secure that
the property of the debtor should be equally divided amongst
his creditors; and second, to protect h m iii his e forts to
re instate himself in the world, lie entirely departed from
the notion that the tenure aminired propeity of the
bankrupt should be released from liability on ponient
of 105. in the 'mond ; he would hold it liable for the
full satisfaction of his debts. Nothing under the present
system was productive of greeter or more well-founded di,
satisfied on than seeing reckless speculators who had been
bankrupt two or three times, go by rolling in their carriages,
whilst those who had been reduced to poverty by them
trudged on foot. (Hear, hear.)

After referring to the Roman law, the fimt English
law of bankruptcy, passed in the reign of Henry VII t.,
and the statute of Anne in 1705, the hon, member
traced the laws of bankruptcy down to the time of
George IV., in wh•ise reign the Consolidation Act wee
pa.w.l; and h- th••ii proceeded to remark, that—

VfoLla tljatuiu. unco IS iuru Laa

or very te, oay *collate ; lie may lad, act being actually
fraudulent; he may go to the court of Bankruptcy and get
a certificate of discharge, he may go there again three or
four times ; he may make a daring speculation and realise
half a million, and in the end he may laugh at his creditors,
who linty be in rags and tatters. Now that he considered was
a disgrace to the leg ailatien of this country. ; Hear, hear )
They ought to look abroad to foreign countries, and not to
be so self-sufficient as to think they alone knew how to legis-
late for the country, lie believed a man would not work less
hard because he knew he was working for an honest purpose,
and with a view of paying his creditors who had just demands
upon him. Ile thought restoring the laws to what it ought
ti be, viz., compelling small, when he was fairly able to do
so, to pay his creditors, was the only way to make people
less reckless in their speculations aud more honest In their
dealings. item, hear.: Ile hoped when this bill gut into
committee the bankruptcy law would be placed In confor-
mity with that of every other civilised nation.
There was another subject on which our bankruptcy law
stood alone—he meant the doctrine of" reputed ownership."
In every other country in which a bankruptcy law prevailed
It was supposed to be right to divide the property of the
bankrupt among his creditors, but not to divide among them
the property of other people. But the latter peculiarity was
observed in the legislation of this country, and he hoped to
see it dove away with by the present bill. Like the other
doctiine be had alluded to, this one arose from a mistake or
an accident. The original intention was that if a man put
into the hands of another goods for the purpose of enabling
him to obtain credit on the belief—though it were ill-fountled
—that the goods were his own, he sh..uld be compelled to
make the representation good, and the creditors should take
the good. That was perfectly intelligible ; it was the
KOBl.l law, and the law of every other civilised nation.
It was a fraud on the part of the person who gave the
goods, and it was quite right that the creditors should
take them. But how did it happen that in this
country the creditors were allowed to take other
people's goods? It mole from a slip in the framing of the
Act of Parliament. The doctrine worked in this way when
any goods were in the possea.ion, and at the disposal, of a
man, with the oinsent of the true owner, and that possession
remained undisturbed until the act of bankruptcy, the
assignees took the goods and divided them amongst the
creditors, and the true owner was deprived of them for the
benefit of persons who had no mond or legal claim on them,
lb it w. rued this wan, in other wort. : the object of the law
being to protect creditors, the creditors shall take the goods
which, as far as he was concerned, he was led to believe were
the debtor's: he was not to be allowed to take thew under
an execution, but after bankruptcy ; and he could not take
theni unless they remained in the llehtor's possession at the
time of his act of bankruptcy. Nothing more inconsistent
was ever invented or imagined. Hear, hear:.
Here the hon. member quoted the ancient statute from
whence had arisen the injustice of which he eouiplained.]
Ile now passed to a matter of much greater importance,
involving a state of law which existed in this country alone
—be meant the mode of disposal iif the property of any
man who died insolvent. Was it credible that ill this nine-
teenth century the property of a man who had been adjudi-
cated a bankrupt and died was distributed fairly. but that if
the MAD died the day before the adjudication the property was
Ilivi.led in a totally different manner, among different people
lied in ti fferent proportionsl the state of the law had arisen
froin accident. It was one of those legacies which had been
handed down from generation to generation awl not interfered
with, but It was one of those things he had never been aide
to make a foreigner understand. He would give the House
some examples of the working of this law, and they would
then see what fearful injustice it entailed. In other
civilised countries the law was, that when a man died insol-
vent the property was divided tinning his creditors, rateably,
without preference or priority. Now, that was consistent
with equity and justice. (Hear, hear) lint hi this country
all who po-tiessed a bond or covenant—any instrument, in
fact, having a seal attached -was paid 211 s. in the pound with
interest but the man who held a bill of exchange got
nothing at all. That was the wonderful effect of the seal.
Now, in the case of a trader dying, traders seldom gave bonds
Ice covenants—they usually gave bills of ex,hatige and pro-
missory notes—but to the trader's private friends and rela-
tives documents signed anti sealed were given, and the con-
sequence was, that when the insolvent trader died before he
was made • bankrupt, all his relatives and family friends,
including the trustees of his marriage settlement, got paid in
fulL

Ile would give an example of this which occurred in his
own practice a few years ago. An insolvent attorney died—
anti he was sorry to say that attorneys wimetinies became in-
solvent and committed frauds—and this attorney had both
become insolvent and committed frauds. Ile was trustee of
two settlements of about £5,000 each—glo,ooo In all. Ile
died, having assets about £4,000; there was a suit in
Chancery, alai it turned out that in one case the attorney
had insured the deed by affixing his seal to it, and in the
other case he omitted the ceremony, and the result was, that
the person who had the document with the seal got the
whole of his 4,000 or 5,000, 81141 the person who had no seal
got nothing, and had to pay the costs of the suit including
his )Mr Jessel's fee. A laugh) He could give another
reniarkable instance of the same kind. An insolvent
trader, without a fraction, and owing more than
he possessed, got married, and having nothing to
settle, covenanted that his executors should pay
the trustees of his marriage settlement £lO,OOO for the
benefit of his wife and future family. Some time after-
wards the man died indebted. Ile was insolvent at
the time of the settlement, and lived and died intalvent,
anti when they came to administer his property they found
he had £lO.OOO, but owed his trade creditors 00,000. The
costs were paid, which reduced the sum to a little under
£lO,OOO, and the whole of the remainder of the fund
was paid to the trustees of the marriage settlement,
and the creditors got nothing, and hail to pay their iiwn
costs. hear.) That was the way to divide a man's assets
when he died before there was an adjudication against him
In bankruptcy. It was one of those things that ought
not to last so many centuries as it had endured, and he
hoped it would be abolished on the passing of this bill.
(Hear, hi.ar.) If a man hail a mortgage or other charge
upon a debtor's property, and the debtor became a bank-
rupt, the value of the mortgage or charge was deducted
as a secured debt, and the creditor proved for the difference;
but if the debtor died first the creditor proved for the whole,
without setting any value on the mortgage security. It
should be the same whether a man was declared insolvent
or not before he died. A trader wan not to give a fraudulent
preference to any creditor; if he did he was punished, and
the creditor was made to refund; but supposing a nian died
before he was adjudicated a bankrupt, the executor had a
full right to prefer one creditor to another amongst creditors
of equal degree; he might pay one creditor in full, and leave
the rest to gin without anything. ((lear.) The executor was
not punishable, and the creditor who got the money c'iuld
not be compelled to refund. Hear, hear ) He had a
case In which a tradesman was the executor of a
gentleman of high rank, who owed a good deal, leaving
assets may sufficient to pay as. or ss. In the pound. The
executor, being a tradesman, said he thought the tradesmen
ought to be paid ; and, having collected all the assets as
quickly as he coulsi. paid all the tradesmen before his ( Mr.
Je•sers client) could tile a bill to stop him All the creditors
who were tradesmen were paid, and to the rest were left
something like ninepence In the pound. Ile Was colnisel in
a case where a grrat China firm hail dealings with a 1111111 in
England who had formerly been their clerk, all4l who became
bankrupt. His affairs did not prosper, mid he larrowed
large alum of motley from his wife's brother, from
his wife's father, and from other relatives and other
friends, lie died insolvent, asid his widow proved
toe will. She pot the administration into the hands
of her father, nil,. ad mini+tered rite assets in this
aay Ile p.dd himself in full— lauc.hteg he paid the
widow's brother mid cemsins will the friends and relatives of
the family in full The principal creditors were in China,
a, ii when they sent instructions to file a bill there was not
enough left to pay the expenses of the Chancery snit. why
should the eye) utor have the right to di, what the man him-
self was ma entitled t0i1,,? He thought the law should be
altered, and proposed that no executor or administrator
should be allowed hereafter to i etain f.irhis own dell, or-give
a preference between the creditors; that there should be no
preference or priority among creditors; all4l that the mort-
gage creditors should be put on the same footing as the
others. (Hear, hear.)