The Sun.
London, England, 1857-01-29 00:00:00

SOLICITORS.

The costs of the solicitor constitute the most serious item
in the expense of every bankruptcy. Iremy court at Leeds,
in the five yearafiom Jan., 1843, the aggregate amount of
costs-wits 26,47 or above 5,000/. a year. From this it
is easy to form an estimate of the sum paid in all the courte.
It appears to me that the solicitor receives too much out of
each bankrupt estate ; this is not because he is overpaid for
what he does, but because he does too much ; that is, he
does business which ther people ought to do, and which is
hot properly Within the province of a solicitor to me Idle
with. This arose in the following manner :—Before the
year 1832 the solicitor applied to the Lord Chancellor for
each o eninission of baukruptby, and he had what was
termed the carriage of the commission, that is, he had the
custody of it, and the management and control ot the whole
of the business thereuuder. In thos dap it was jocularly
said that a commission of bankruptcy was the most valu-
able commission which the Crown could confer on a sub-
ject. In those days the assignees left everything to the
solicitore,who, on his part, was nothing loth to accept the
charge, knowing that he would be amply remunerated for
his pains. 'ln fact, he did everything, and was well paid
for everything he did. Now, however, the scene is, or
ought to be, totally changed. To take care of a bankrupt
estate we have commissioners, registrars, ail accountaut, a
taxing master, an official assignee, a creditors' assignee, a
messeugar, accountant, and broker, and if these officers do
their duty, all that remains for the solicitor is a little, and
usually but a little, law business. Nevertheless, the soli-
citor still trausacts, and is paid for, much that has no re-
lation to the science of law. The result is that far too large
a proportion ot the expense of bankruptcy is caused by the
solicitor's ordinary bill of costs. • The table of averaged ex-
pensepaihich I have before quoted shows that very nearly
one-third of the whole expenses of bankruptcy consists of
the costs of the solicitor. Now for the remedy. I propose
to appoint a solicitor" o every court, whose duty. would be
to act as official solicitor under every bankruptcy, and to
be paid'a fixed salary of 400/." or 6uo/. a year, such salary
to be paid out of the same fund as the other officers of the
court. The experiment of the official aesieue in place
of the creditors' assignee has been found highly aucceset ul.
I believe that an official solicitor would be no less success-
ful. Ido not propose that it should be imperative. on the
creditors to have recourse to the offici el solicitor. They
should be allowed to select any other solicitor if they think
fit ; only, in that case, the dividend N o uld be reduced by
the amount of the of costs. Ido not perce.ve that this
measure would be unfairly injurious to the profession.
Other great public bodies have their official solicitors, who
are remunerated by fixed salafies, and why not that com-
, mercial chamber, the Court of Bankruptcy ? It is to be
remembered that all'tlie costs of a bankruptcy are paid in
reduction of a dividend to be made of au estate already in-
solvent. I have already suggested various reductions in
different branches of the Court of Bankruptcy, and the so-
licitors will have no just reason to complain if they are in-
cluded in the reduction.
PROOF OF DEBT. .
According to the existing.practice, a creditor who desires
to prove his debt must either attend the court personally, or
transmit an affidavit. The trouble, loss of time, and expense
consequent on attending personally is often considerable, and
the affidavit costs a sum importaut to a peer man ; it can
scarcely be less than from les. to 1/. As no oath or affidavit
.s required under a deed of assignment, or in the Insolvent
Debtors' Court, I do not perceive the necessity for one in the
Court of Bankruptcy. I therefore propose tb abolish both
oath and affidavit. In lieu thereof, let thebankrupt,nu or iu his
absence the official assiee, prepare a licditors, and
let the bankrupt swear to the truth of this list, and let this
suffice, unless the debt be disputed or doubted, in which case
the official assignee should write to the creditor informing him
of that fact, and requesting him to attend personally to esta-
blish his debt. When the time arrives for payment of the divi-
dend, the official assignee may send by post the dividend
cheque (or warrant, as it is termed), which should be endorsed
with e printed form of receipt, to be signed by the creditor,
ending „eenewhat to thii effect, " I declare that the bankrupt
is'new indebiPd to me in the sum of £ for goods sold and
delivered to hien. before his bankruptcy, and. that I have
receiv,d no security" or satisfaction for my debt," and let
signing this declaration be punished as for perjury if untrue,
and be accompanied by fozfeiture of twice the amount of the
dividend.

THE BANIMINT'S c,kLANCE-SIIEET.
The balance-sheet, as it is ternie,-1, is a document which
every bankrupt is compelled to file court before he is al-
lowed to pass his last examination; it plight to contain au
account of his debts and property, and a htatement of
b hisank-
in-
come and expenditure for a certain period before his
ruptcy. In my opinion a radical change is required in the
matter of the balance-sheet, as to its form,
.se
to the person
P
who prepares it, and as to the payment for its' reparation.
As regards the form of the balauce-sheet, it is ICI elaborate
document. This result has been brought about lx, leaving
the preparation of balance•sheets in the hands of a iz,rticular
class of professed accountants. We all know the state of per-
fection to which pleadings, had been brought by
bills the pleaa
au ers
a few years ago —we all know the state to which aud .
swers in Chancery have been brought by the equity draughts-
men—we all know the state to which deeds of conveyance
. have been brought by the eonveyancers—and what's the state

[P 4 4 = STAIVIPE:;. 5D'

to which the balance-sheet has been brought by the account-
ant ? Why, it is a complete work of art, requiring a skilful
connoisseur to rocognirse its beauties: It too frequently is a
work of commercial poetry or invention, Not one merchant
in a thousand cap understand
,it.. Indeed nobody can save
the accountants,who, prepare them and t-e officers of the
Court of Ihinkruptcy, who are cx officio bound' to understand.
•The sober truth isthat, in a great majority of instances, ba-
lance-sheets are costly waste paper; theYare complex inform,
they tend to mislead, they seldom exhibit the truth, they are
unintelligible to many, and nearly useleSs to the few who un-
derstand them, or think they understand. Then, as to the per-
son who pr.:pares it. Till verylately, by one of the fictions of
law, it was supposed to be prepared by the bankrupt himself;
now, by,tke I4nkrupt Act of 1849, the commissioners are al-
lowed to know that itis prepared by an accountant, who has
to be paid. It is my opinion that a simple form of accounts
ought,ititii-orriiretry-easesrta_be prepared by the official as:
signee, o* by the bankrupt himself, with the assistance of the
&Meal assignee. The question as to the preparation of the
balance sheet by the official assignee is one which has been
discussed. I must not trouble this meeting w,th the argu-
ments pro and con. It is enough to say that Mr. Commis-
sioner Faue tried it in his court and approved of it. I tried
it in my court, and; in Iny opinion, the experiment was quite
sir,cessful. It was also tried in another court, but the prac-
tice was put a stop to by the Lords Justices, who disapproved
of it.

TLIAT PUNISHMENTS ARE INADEQIATS AND UNCERTAIN.
It appeals to me that the complaint, that the punishments
inilicted Upon bankrupts who offend against the laws of moral
and mereautile honesty are inadequate and uncertain, is a
well-founded complaint. I submit that it *mild be a general
principle that in every case where a trader does not pay 10s.
or 15s. in the pound, ho ought to be considered and treated
as an offender, till he proves he is not .one —that is, in other
words, npon-iiih should be cast the burthen of proving that,
his failure to pay 20s, in the pound is owing to circumstances
over which he had no control. As the law now stands, the
assivnees are compelled to prove that the bankrupt has been
guilty of some specified, definite offence ; but this proof is
always diffieu t, and not seldom impossible. Indeed it may
be stated roundly that a bankrupt can seldom be proved
guilty of an _offence unless _he confesses it, or unless he has
been wanting in sense as well as wanting in honesty. My
opinion is that a trader who pays less than 103., or perhaps
15s , in the pound, ought not to have any sort of protection,
or any certificate or other advantage from the Court of
Bankruptcy, until he has proved that his insolvency is
not owing to any gross default or immorality. If his
failure and deficient assets are owing to circumstances
over which_he had no control, he will have not the slightest
difficulty in proving such to be the case ; whereas, on the
other hand, the assignees might, have the greatest possible
difficulty in proving anything against the bankrupt, though
they might entertain ne moral doubt of his being a defaulter.
With regard:to particular offences, it appears to me that all
the penal clauses of the Bankrupt Act require careful revision.
One offence only will I refer to in particular—l mean bad
book-keeping. It appears to me that a heavy penalty should
always be annexed where the bankrupt has not kept the best
books which he could, taking into consideration his situation
in life.

APPEALS ON CELTIFICATBS.

Before concluding this subject of punishment and this paper,
I beg to'say a :few words with relation to a matter of some
importance, that is the present state of the appellate jurisdic-
tion as reg irds bankrupts' certificates. The question of the
amount of punishment to be inflicted by the Court of Bank-
ruptcy generally arises on questions of granting, suspending,
or refusing the certificate. It has been stated in a very public
manner that an unfortunate difference of
,opinion exists be
ween the Lords Justices and the Commissioners of the Court
of Baukraptey regarding the proper quantum of punishment
to be affixed to different degrees of culpability in bankrupts
Opplying for their certificates. No doubt it is the fact that on
Appeals the Lords Justices generally alter and modify the
peentence of the Commissioners, almost invariably reducing
the quantum of puuishmeut. But it will be asked, how can it
be said with any propriety that a difference of opinion can
exist between the Commissioners and the Court of Appeal,
;seeing it is the duty of the inferior tribunal to bow to the de-
cisions of the Court of Appeal? It will at once be perceived
that this is a difficult and delicate question to touch upon ; but
;I think I may venture to state, as a general proposition, that
many of the appeals the Lords Justices have so differed
from tho,Commissioners on questions—sometimes of princi-
ple, sometimes of detail—of such a nature that the judgment
:of the one or the other must be fundamentally wrong on
questions of common mercantile life and morals. The result
appears to he, that, in order to maintain that feeling of re-
spect which ought to accompany every tribunal for the
administration of justice, one of two things ought
to take place—either the whole question of the certificate
must be taken from the Commissioner and tran-ferred to the
Lords Justices, or the appeal on questions of certificate must
be abolished, and the decision left with the Commissioner.
As regards the first plan, it is tolerably certain that the Lords
Justices would never tolerate the wearying labour of deciding,
in the first instance, concerning bankrupts' certificates; even
if their lordships felt inclined to undertake the task, it is
very doubtful whether they could possibly find the time, and
if they could still arises the question whether the public would
endure the expense of taking allthe country cases to London;
and finally, would their lordship? decision be satisfactory,
seeing that the whsle case up to that time had been before
another tribunal. The result appears tame that the appeal on
questions of certificate only ought to be abolished. But, in
leaving the decision in the hands of the commissioners alone,
it must be remembered that lawyers are not born with any
peculiar aptitude to judge of commercial matters ; and their
legal education and professional pursuits go very little way
towards supplying what, like all ether men, they have to
learn upon the subject. Skill and knowledge on such matters
is the slow growth of time and experience. The commissioner
sitting daily, attending daily to commercial matters, sur-
rounded by men in trade, and by solicitors connected with
merchants, may be supposed in time to gain some portion of
experience in commercial matters. But in order to guard
the public against any erroneous views which the commis-
sioner may take—he being of course liable to infirmity of judg-
ment, exposed to mistakes, and to take the worst possible
view, even subject to caprices, all of which must be guarded
against—the remedy will bete requite that on questions of the
last examination, or of certificates, if any of the parties (that
is, the bankrupt, the assignees, or any opposing creditor) shall
require it, two commercial men of the district— members of
the Chamber of Commerce if possible—not connected with
the bankruptcy, but of the same trade as the bankrupt, shall
sit with the Commissioners, having a voice and vote in the
determination of the case. With this guard, the appeal to
the Lords Justices on such questions might be abolished with
safety and advantage to all parties. That something should
be done is clear. The habitual reversal or alteration by the
Court of Appeal o the decisions of the Commissioners—those
frequent collisions of opinion about matters of common com
mercial life- must needs damnify one of the courts. I have
just given judgment in a case which strongly illustrates the
necessity of the assistance of commercial men. For two years
past two partners, woolspinners, have been before me. Seve-
ral of the principal creditors, and also the assignees, contend
that the bankrupts have not accounted fur, and have there-
fore concealed pwards of, 44,11001b5. weight of wool. On the
one hand a skilful accountant examined the bankrupts books
and stated that he found this deficiency ; on the other hand,
the bankrupts brought forward a no less skilful accountant,
who aho examined the same books, and arrived at exactly the
contrary conclusion, sating that the deficiency was or might
b.: accounted for by waste of various kinds. It appeared to
me that the bankrupts had been guilty of concealment, and I
refused the certificates ; against the decision the bankrupts
have appealed. Now it would have been in the highest de-
gree satisfactory to me to have had the assistance of some
gentlemen connected with woolspinning, who would have
known exactly what questions to put to the witnesses, and
who would have known what height to allow to their evi-
dence, and who, from themselves inspecting the books, and
bringing their own knowledge to bear on the subject, would
have been able to form a good opinion as to whether the
alleged loss by waste really took place. But an appeal is
gone to the Lords Justices. Among the questions which they
will have to decide will be, whether this or that lot of wool
has been fairly workedup and sold, or whether so many ozs.
per pouud have or have not been wasted in the manufacture
of this orthat particular lot of wool. Cautheir lordships trace
40,000ib. weight of wool through a woolspinner's books any
better than the commissioner could? If, therefore, the appeal
is to continue to the Lords Justices, I think their lordships
ought to have associated with them on such occasions one or two
mercantile men, in the same manner as I have suggested for
the commissioner.
Mr. HASTINGS then read a paper from the Leeds Chamber
of ComMerce, which was to all intents an echo of that read
by Mr. Commissioner Ayrton.
Lord Baouanot wished to bring the discussion to a point
upon those matters upon which there seemed to be a general
agreement So far as he could gather, they wished to throw
the cost of the Court of Bankruptcy upon the Consolidated
Fund, to do away with the offices of messenger and broker
altogether, and, as far as London was concerned, to do away
with the office of registrar. Mr. Ayrton proposed that the
`official assignee should be paid by salary, not by fees. As re-
gards that matter ho could not go quite so far with him, but
thought it better that that officer should be remunerated par-
tially by salary and partially by fees—that was, by fees up to
a certain amount; for if they were to pay him by salary alone
he would be found to sleep iu the performance of his duty. As
regarded the abolition of the appeal, he (Lord Brougham)
likwise disagreed with Mr. Ayrton, as he thought it necessary
to secure uniformity in the administration of the law.
Mr. PAGET, of Leicester, supported the views taken in the
papers read to the conference, and remarked that the public
slid not appal ate the distinction bstween the different classes
of certificates in bankruptcy.
Mr. 'LIMIT said in Birmingham the district court was a
complete byeword from the manner in which the business
there was conducted. He knew of in important case which
had been under adjudication there, and when
it was to . have
been heard the parties and witnesses concerned were
!lit at-
tendance, but there was neither commissioner nor reps rar
there.
Lord BROUGHAM— Why did you not comp
Chancellor ?lilin to the Lord
his letter. Mr.
takep that course, but g t several improvements in
Mr. Morn replied thatot
no
solicitoranswer in
to Birmingham had
ham ohu dd
more important of which were
tLhleoydhenthhernepwtoeyntleown, thOebllgges
first, the
be entitled phaiothyteheehooiledeetr othf
ea
esbilltatoef emxcohrean
dis-
count of the Bank tth • a e time the cash
at the rate of tha
dl
th
eenptirtolperatlot
the power of giving sanction to assign.
been actually paid on the instrument, meentp,
rtoopgeritehteyr
of thewith
giving
the
Court. (Hear, hear.) •
Mr. ANDERTON argued that the law of bankruptcy should
not be confined to traders in the strict sense of the word,
wmaesn Courtt
sad ovnifaanßdcacendk;r outu a nPo
tf
deY,
but should be extended to all debtors, especially to solicitors,
who frequently fell into debt, as they had a great temptation
to do so from the money of their clients passing through their
hands.
Mr. TURNSR said he had received a communication from
Mr. Commissioner Skirrow with which he Would not now
con-
fit-mod
Wthaenvtise,wost
uMur;
fCofluonund
fiassuilotnweritAh yrthtoe nte.
et
trouble the conference, bit would merely state that it con-
Mr. CommisAoner Ayrton, namely, of requiring apdividend
boyt
10s. or 15s, from the estate before granting the bankrupt his
certificate, as it might work great injustice. He did not
wish to place the power of refusing the certificates in the
hands of the commissioner. He thought the better course
would be to make it compulsory on him to grant it if two-
thirds of the creditors were of opinion that the bankrupt
ought to have it All questions of insolvency should, he was
of opinion, be adjudicated upon in bankruptcy, and he
agreed with the noble chairman as to the manner in which
the official assignee should-be paid. As a solicitor, he had
some experience of the working of the laws of bankruptcy,