The Sun.
London, England, 1849-05-07 00:00:00

117 MAY 7, 1849.

BANKRUPT LAW CONSOLIDA-

TION BILL.
(From the Law &view.)
This Bill has been amended by the select Committee
to whom it was referred, and we believe has now, in its
amended shape, the concurrence' of the Lord Chancellor,
and will consequently, in all probability, shortly become

Lord Brougham found the Chancellor differed with
him on several of the propositions in his original mea-
sure. He found him opposed, Ist, to the title of Judge;
2d, to the proposed Court of Appeal; and 3d, to the very
important chapter whereby it was proposed to give to the
Court of Bankruptcy a jurisdiction to distribute the es-
tates of deceased debtors, whether traders or non-traders.
It consequently became necessary for his Lordship to
consider whether he would insist on these matters,
whether he would debate them in Committee of the whole
House, or at once yield to the wishes of the Chancellor,
and thereby ensure the other parts of his measure, as to
which, substantially, the Chancellor and he are agreed;
and, under all- the eircitmstances, we are of opinion his
Lordship has done wisely in adopting the latter course.
The two first points on which the Chancellor was
opposed to Lord Brougham were matters of very little
moment; the first (the title of Judge) of absolutely none;
and the second (the proposed. COurt of Appeal) was a
proposition, the propriety and expediency of which, at
least, might very well be qaestioned, seeing the conflict
of evidence on the subject, and the very trifling number
of
,the -appeals from decisions of the commissioners. The
third (the chapter +relating to the distribution of the
estates of deceased debtors) was a matter of much im-
portance, and, to a considerable extent, supported by the
evidence taken before,the Select Committee. But here,
also, as we have already said, we consider Lord Brougham
*to have done well in giving way, more particularly, as
regarding this, it is understood his Lordship has obtained
from the Chancellor the promise of some mode of facili-
tating creditors' suits, retaining the jurisdiction in the
Court of Chancery.
Lord Brougham's amended Bill still contains much
that is very desirable and greatly needed; indeed the
consolidation of the different Statutes relating to Bank-
ruptcy would alone render it a most important measure.
As the Bill stands, it amends, methodtses and, consoli-
dates those statutes—it provides for the reduction of the
number of London commissioners from six to four,
thereby effecting a considerable saving—it gives to the
commissioners original jurisdiction in all matters in
bankruptcy—it abolishes the fiat, and introduces a more
simple mode of procedure—it gives a power to examine
trader debtors on summons—it simplifies the present
Acts of Bankruptcy, and creates aditional ones—it more
effectually protects creditors against fraudulent prefer-
ences and secret transfers, protecting at the same time
all bona fide transactions—it affords increased facilities
for arrangements between debtors and creditors, extend-
ing them to traders, this privilege having heretofore been
confined to non-traders—and it confers a penal jurisdic-
tion for certain specified commercial offences; and, with
respect to others, gives the court power to order pay-
ment of the costs of prosecutions out of a certain fund.
These are the more important parts of the measure, and
several of them were proposed in a Bill introduced by his
Lordship in March, 1847. By substituting a petition to
the court in lieu of the fiat now issued by the Lord Chan-
cellor, and giving to the commissioners original jurisdic-
tion in all matters, much useless delay and unnecessary
expense is got rid of. We have efficient commissioners—
men universally respected, and in every way competent
to the discharge of their duties—men enjoying the con-
fidence and respect of the commercial community, and
engaged daily in the administration of the Bankrupt
Laws, and daily dealing with and deciding questions of
immense magnitude, and yet constituted as the Bank-
ruptcy Courts at present are, there are matters trifling in
importance, and, in many cases, of mere form, on which
they have no power to decide, and as to which the suitor
is compelled to go to the new substitute for the Cuurt of
Re view—namcly to the Vice-Chancellor appointed to sit
in Bankruptcy. This, also, was a matter proposed to be
remedied by Lord Brougham's Bill of March, 1847; but
his Lordship then only accomplished the transfer of the
insolvent jurisdiction to the Insolvent Debtors' Court
and the County Courts, the abolishing of the circuits of
the Insolvent Court Commissioners, and the reduction
of certain of the commissionerships in both courts.
What we have been stating, however, is very absurd.
But the absurdity of it is the least part of the affair—
the expense is a serious grievance, as may be shown in a
few words. Take, for instance, the case of an applica-
tion by a mortgagee for leave to bid at the sale of the
mortgaged property. This is a matter of mere form,
and would be decided by the commissioner, acting in the
bankruptcy, in five minutes. But the commissioner
has no power to do this; the mortgagee must apply to
the Vice-Chancellor; he must prepare and file his petition;
must make and file an affidavit or affidavits in support of

it; must serve the assignees; and he must instruct counsel
The matter then comes on for hearing; it is unopposed;
but the assignees of the bankrupt's estate must, never-
theless, appear also—must also instruct counsel; and
this farce, and others of a still more ridiculous nature,
are daily being gone through ; and such was latterly,
for the most part, the business of the Court of Review,
and is now the sort of bankruptcy business transferred
to, and decided on by, his Honour Vice Chancellor
Knight Bruce. The appeal business—the business which
alone ought to come before the Vice-Chancellor sitting
in Bankruptcy—amounts to next to nothing. A return
made to the House of Lords, for the five years ending
11th November 1847, shows the average number of ap-
peals from all the commissioners (town and country) to
be under fifteen a year.
Another example, of a kind similar to the one just
given, is the application by a bankrupt trustee to prove
against his own estate—another, that of an equitable
mortgagee to be be proved such, and to have his account
taken. The commissioners have no power; the bank-
rupt, or mortgagee, must go to the Vice-Chancellor.
And a rather striking illustration of the absurdity of all
this, happened not long ago. The mortgage was one of
leasehold premises, the rent under 1001. The mortgagee
had to present his petition to the Court of Review, to
support it by affidavit, to instruct counsel, &c., all in the
manner already described. The petition came on to be
heard—the assignees did not oppose—they instructed
counsel to appear, and consent to any order the court
might think fit to make—and the Chief Judge, being
well advised, made the common order, finding the peti-
tioner an equitable mortgagee, and referring the matter
to the commissioner acting in the Bankruptcy to tyke
the account. A more complete farce cannot be conceived.
But the costs to the parties exceeded 201., and the pro-
perty was subjected to an additional quarter's rent from
the delay consequent on the application; and the real
work—the taking the account—came back after all to
the commissioner. In the same bankruptcy the solicitor
for a legal mortgagee (with which, strange to say, the
commissioner is entrusted with power) made an applica-
tion to the commissioner (Commissioner Goulburn)
to
take his account, and make an order for sale. The
amount was 2,0041.—the account was taken, an ordtr
made directing the sale, and the matter completed, in
less than half an hour, at an expense under 31.!
But the very first proceeding in bankruptcy—the fiat
—is. an anomaly. At present, before a petitioning cre-
ditor, or a trader desirous of making himself bankrupt,
and delivering up his estate to be divided among his
creditors can proceed a single step in the Court of Bail-
ruptcy (a court, by the way, instituted for the very pur-
pose of hearing such matters), he must first go the Lord
Chancellor, and obtain what is called a fiat, to enable
him to prosecute his complaint, which is issued as a
matter of course, and altogether unnecessary; aid
which, having been reported against by the Commis-
sioners of Inquiry of 1840, ought long ago to have been
abolished. It is useless, and attended with unnecessary
trouble, expense, and delay, and after all, if, when the
fiat is obtained, there should, from any accident, happen
to be an error in it—an error of even the most trifling
nature—all the proceedings are stopped. The commis-
sioner has no power to correct it—he cannot go On.
The petitioning creditor, or trader, must go to the Vice-
Chancellor—must instruct counsel—obtain an order to
amend his fiat—and must get that order confirmed by
the Lord Chancellor—and the amendment is only made
by filing what are called fresh docket papers (a new
affidavit and petition), the estate being in the meanwhile
endangered and liable to be swept away by judgment
creditors.
It has been said by certain opposers of Lord
Brougham's measure, that the proposal to give the Court
of Bankruptcy a power of imprisonment as a punishment
for certain specified commercial offences, in the manner
done by the Bill, is in effect an abolition of the trial by
jury. This is a great mistake. Chapter 10—the chapter
treating of offences against the law relating to bank-
ruptcy—leaves the punishment of matters deemed felony
and misdemeanour, and also of perjury, exactly where
it now stands (see Articles 314, 315, 316, and 317); and
although Articles 319 and 320 give to the court a direct
power to punish by imprisonment for certain offences
therein specified, this cannot be said to interfere with
trial by jury ; and those who allege tbat it does, alto-
gether foreet both the present state of the law in this
respect, and the imperfections in it which the articles aro
intended, and in our opinion are well calculated, to
remedy, This will appear by an examination of these
articles.

ART. 319.
If at the sitting appointed for the last examination of
any bankrupt, or at any adjournment thereof; or at any
sitting or adjourned sitting for the allowance of his cer-
tificate, it shall appear to the Court that the bankrupt
has been guilty of any of the offences hereinafter in this
article mentioned, it shall be lawful for the Court to
adjudge that such bankrupt shall be imprisoned for any
term not exceeding two years. Provided always, that
this article shall not take effect until after the expiration
of six months from the commencement of this Act, and
then only against such traders as shall have been ad-
judged bankrupt on petitions for adjudication under this
Act, and for offences committed after the commencement
of this Act.
List of offences within the meaning of this Act, and in
this article above referred to.
First—lf the bankrupt shall at any time after his
bankruptcy, or within two months next preceding his
bankruptcy, with intent to conceal the state of his affairs,
or to defeat the objects of the law of bankruptcy,tir d
have
destroyed any book, paper, deed, writing, or other
meat relating to his trade, dealings, or estate.
Second—If the bankrupt shall, with the like intent,
have kept, or caused to be kept, false books, or have
made false entries in, or withheld entries from, or wil-

[PRICE SD.

fully altere 1 or falsified, any book, paper, deed, writing,
or other document, relating to his trade, dealings, or

estate.

Third—lf the bankrupt shall have contracted any of
his debts by any manner of fraud or breach of trust, or
by means of false pretences, or without having had any
reasonable or probable expectation, at the time when
contracted, of being able to pay the same; or shall by
any manner of fraud, or by means of false pretences,
have obtained the forbearance of any of his debts by
any of his creditors.
Fourth—lf the bankrupt shall at any time within two
months next preceding his bankruptcy fraudulently,
with intent of diminishing the sum to be divided among
his creditors, or of giving an undue preference to any of.
his creditors, have paid or satisfied any such creditor,
wholly or in part, or have made away with, or mort-
gaged, or charged any part of his property, of what kind
soever.

Fifth—lf the bankrupt shall at any time after his
bankruptcy, and with the like intent as last aforesaid;
have concealed from the Court, or his assignees, any debt
due to or from him, or have concealed or made away
with any part of his property, of what kind soever.
Sixth.—lf the bankrupt shall have contracted any of
his debts by reason of any judgment in any proceeding
tor breach of the revenue laws, or in any action for
breach of promise of marriage, seduction, criminal con-
versation, libel, slander, assault, battery, malicious ar-
rest, malicious prosecution, or malicious trespass.
Seventh.—lf the bankrupt shall under his bank-
ruptcy, or at any meeting of his creditors within three
months next preceding thereto, have attempted to acT
account for any of his property by fictitious losses or
expenses.

ART. 320.
If at the sitting appointed for the last examination of
any bankrupt, or at any adjournment thereof, or at any
sitting or adjourned sitting for the. allowance of his cer-
tificate, it shall appear to the Court that the bankrupt
bus been guilty of the offences hereinafter in this article
mentioned, it shall be lawful for the Court to adjudge
that such bankrupt shall be imprisoned for any term not
exceeding one year; provided always, that this article
shall not take effect until after the expiration of six
months from the commencement of this Act, and then
only against such traders as shall have been adjudged
bankrupt on petitions for adjudication under this Act,
and for offences committed after the commencement of
this Act.
List of offences within the meaning of this Act, and in
this article above referred to.
First—lf the bankrupt shall have put any of Ms cre-
ditors to any unnecessary expense by any vexatious or
frivolous defence or delay to any suit for the recovery of
any debt or demand provable under his bankrupcy, or
shall be indebted in costs incurred in any action or suit
vexatiously brought or defended.
Second—lf the bankrupt shall at any time after his
bankruptcy, or at any meeting of hi i creditors holden
within two months next preceding his bankruptcy, have
wilfully prevented or withheld the production of any
book, paper, deed, writing, or other document relating
to his trade, dealings, or estate.
Third—lf the bankrupt shall during his trading, or
for one year at least next preceding his bankruptcy,
have omitted to keep proper books of account, or shall
kept his books imperfectly, carelessly, and negli-
gently, and so as not to exhibit at the bankruptcy the
real position of the bankrupt as to his debts and credits.
Fourth—lf the bankrupt shall have omitted to take
stock, and entered the same in a book or on paper in
writing, once at least during every L ] years of his

trading.
Fifth—lf the debts, claims. and demands proveable
under the bankruptcy shall, from time to time as such
debts, claims, and demands were contracted, have so
greatly exceeded the means of the bankrupt to provide
for the due payment or satisfaction thereof (regard being
had to his actual and expected property) as to show gross
misconduct in the bankrupt as a trader in contracting
the same.

Sixth—lf the bankrupt shall, in his conduct as a tra-
der, at any time after his bankruptcy, or within twelve
months next preceding his bankruptcy, have wilfully
committed or suffered any act which in the opinion of
the Court shall not amount to any offence above specified
in this Act, but which, nevertheless shall appear to the
Court to have been committed or suffered by the bank-
rupt in violation of good faith, or with intent to defraud
or injure some one or more of his creditcrs.
We certainly confess ourselves unable to discover in
these any cause for alarm. On the contrary, we think
they will work well—will ensure the puishment of the
offences specified (which the law, as it at present stands,
does not), and that the knowledge of their existence will
alone operate to prevent the necessity for a resort to
them. They are not to take effect " until after the
expiration of six months from the commencement of this
Act—and then only against such traders as shall have
been adjudged bankrupt on petitions for adjudica-
tion under this Act—and for offences committed after
the commencement of this Act.

Surely this is a great improvement in the present
state of things. As the law now stands, the Court has
no power to punish. It matters not of what the bank-
rupt may have been guilty. He may have bought
goods of A, and sold them next day to B for half their
cost; or he may have pawned them, and disposed of the
money so obtained in any conceivable manner; he may
have done all this in a hopeless state of insolvency, or
in contemplation of bankruptcy; or he may have com-
mitted any, or all, of the acts specified in Articles 319
and 320: it signifies nothing if he makes true discovery,
the Court has no power to touch him. It may refuse,
or suspend, the bankrupt's certificate, and withhold
protection, and any judgment creditor who has not
proved may take and imprison him. But the imprison-
ment is not for the offence or offences of which the
bankrupt has been proved to have been guilty; it is for
non-payment of the imprisoning creditor's debt—a debt
which the bankrupt, if he has made true discovery, can
have no possible means of paying. The thing, if done
at all, is done in a round-about and a clumsy and incon-
sistent, ard, we will add, in a most undignified man.
ner. A bankrupt may thus be punished, but if he
be, the punishment is effected in a way by no means
likely to operate to a sounder state of things, or to be
commensurate to the offence ; it is unseemly, and, above
all, it is uncertain, and may be altogether evaded.
The opposers of Articles 319 and 320 desire a con-
tinuance of the present system, with this difference, that
all creditors who have proved under the bankruptcy
shall be deemed judgment creditors, and entitled to have
a capias ad satisfaciendam on a certificate from the Court
that they have so proved, and that they shall, on the ad-
journment of a bankrupt sine die, or on the refusal or
suspension of his certificate, be entitled to take and im-
prison him on such capias. But where, we would ask,
is the security that any such capias would be put in force,
and what the manifest and all but avowed object ? We
know, or at least have a strong suspicion, of what would
follow. We fancy n e are not very wide of the mark in
supposing that every creditor would do just that which
was most likely to put something into his own pocket.
Were imagine he would use his capias, not with a view to
punishment for the commission of a commercial offence,
but as a means of screwing something out of the bank-
rupt or his friends—leaving utterly out of view all con-
siderations of public policy. This is what assuredly
would happen. And as to the " abolition of trial
by jury," where is it now—and where would it be
under the system propounded by the opposers
of the articles we have quoted ? There is none,
and would be none. The creditor takes the un-
protected or uncertificated bankrupt, and impri•
sons him; and he may keep him in prison for just the
same period as it is proposed by Lord Brougham's Bill
that the Court shall have power to imprison him; but in
either way there is no trial by jury. The one is, as we
have already said, a round about, clumsy, inconsistent,
and most undignified proceeding; the other, a direct
mode of punishing for a particular and a specified offence,
and one likely, we firmly believe, to place trading and
commercial dealings on a sounder footing, and we con-
sequently sincerely desire that it may meet with the
success which we think it merits.
The saving by the Bill and the fees abolished are as
follows:

SAVING.
Two London Commissioners, abolished as va-
cancies occur, 2,0001. each ...
Secretary of Bankruptcy... ...
One Registrarship, the office held by Mr. Ayrton
at the time of his promotion, never filled up,
and now abolished ... . .
Three London Registrars abolished—Mr. Ser-
geant Lawes retiring now, and two abolished
as commissionerships become vacant. See
Articles 37 and 39 .. ••• •••
Clerk of Enrolments, and his clerk, abolished...
Registrar of meetings, abolished ••• •••
Two clerks in chief Registrar's office, abolished
Ushers and Remembrancer of Court of Review,
abolished
Two London ushers, abolished as commissioner
ships become vacant ••• :.• ••• •••
Accountant's offices, clerks abolished ... •••

. £4,000
. 1,500

1,200

3,000
1,000
800
400

£12,950

DEDUCT INCREASE OF SALARIES.
Brought forward £12,950
„. £5OO
▪ 300
••• 250
••• 300
• 1,100
••• 20
••• 120
••• 100

Chief Commissioner ••• •••
Chief Registrar ••• •••
Senior Registrar ... ••• •••
Taxing Master ••• •
•••
Country Registrars, 100/. each •••
Usher of Chief Commissioner •••
Country Ushers, 101. each •••
Housekeeper „,.••
•••

2,790

Ultimate annual Saving

... £10,160

FEES Docket struck and not acted upon .D.
.. ...L1 12 6
Renewed fiat ... „.
...
... ... 0 12 0
Auxiliary fiat ... ... ...
... ... 0 12 0
Certified copy, declaration of insolvency
... 0 2 6
Certificate to authorise advertisement in
Gazette
Filing affidavits and other documents
Filing fiat ••• ..• ••• • •
Search warrant ••• ••• .••
Searching affidavit ... • • ••• Order made in any matter heretofore within
the jurisdiction of the Court of Review ... 1 0 0
Mingle of order ...
... ... ... 0 2 4

... 0 2 6
... 0 1 0
... 0 1 0
... 0 5 0
... 0 1 6