The Sun.
London, England, 1859-02-16 00:00:00

PRICE 4D. STAMPED, SD.

trader and non-trader. This state of things has given rise
to a great deal of difficult discussion, and to distinctions that
hardly seem valid, and which often have no foundation. For
instance, while an apothecary, who sells drugs, might Le
made at any time a bankrupt, the physician, who trades in
his skill, cannot be subject to the same law. According to
an exception made in one of the acts of Parliament, farmers
and innkeepers are not liable to the bankrupt laws. The
farrier,, who converts a bar of iron into a horseshoe, may be
made a bankrupt; .but the farmer, who changes milk into
butter and cheese, is not liable to the same laws. There
arise every day questions respecting the capacity
and character of a person who is in debt, as
to whether he ought or ought not to be reckoned a
bankrupt or insolvent. What I propose on this subject is,
to abolish the distinction altogether. (Hear, hear.) We
propose that persons in debt should all come under the same
law, that there should be a law applicable to bankrupt and
insolvent alike in one court, which should make the dis-
tinction which the particular character of the transactions
might warrant. Of course, there is a great difference be-
tween the case of an insolvent who has had nothing to do
with trade, but has incurred debts wantonly and extrava-
gantly, and the case of a trader ivho, by some failure in a
well-grounded speculation, has become a bankrupt. But it
is better that the distinction should be made by the Court,'
and that each transaction should be treated according to its
merits and character, than that an attempt should be made
by law to persevere in maintaining the present distinction.
(Hear, hear.) Another benefit,would arise from this—
namely, there being only one court, much greater economy,
simplicity, and uniformity would be' found in the proceed-
ings. (Hear.) That one court being called by the name
of the Bankruptcy and Insolvency Court, or by whatever
other name, would be empowered to deal with all these-
matters, and the persons at the head of it would' be persons
of high• standing, fully equal to deal with all questions of
bankruptcy and insolvency that might come before them.
A matter which is much complained of by traders is the
distance of the present courts from their place of residence
and business. There are seven courts in the country, be-
sides the Courts of Bankruptcy and Insolvency in London.
A trader living, for instance, in the western part of Corn-
wall would be put to great expense to go to Exeter in order
to proceed against a person owing him a debt, and in that
manner justice is frequently defeated. On this subject Lord
Brougham proposed some years ago that CountY Courts
should have jurisdiction. That proposal was objected to
by the commissioners to whom I have referred, and who-
gave reasons why, in their , opinion, the County Courts
should not administer these affairs. Nevertheless, consider-
ing how much has come within the jurisdiction of the
County Courts—how much every day their business car-
ries them into matters of considerable difficulty in point of
law, and considering the very great convenience which
traders would have in resorting to a tribunal within an
easy distance of their own residence, I think it perfectly
right that the proposal should be made in this billy that if
the creditors on meeting think fit by a certain majority in
number and value to carry the case before the County
Court, they shall be empowered-to do so. It is not proposed
to abolish the jurisdiction of the present Bankruptcy Courts
in the country. In many instances creditors may think
that their 'cases will have a more satisfactory decision' in
those courts.. But wherever they are of opinion that they
would best find their remedy in the County Courts it is
proposed to allow them to do so. Although it has taken a
quarter of a century with-all parties concurring and no
party opposition to make the change, I believe that of late
years no change has been so beneficial among our amend-
ments of law as that which established local courts and
enabled those who are aggrieved to resort to a court within
an easy distance in order to procure a remedy for the evils
under which they suffered. "(Hear,hear, and cheers.) The
next proposal of the bill refers to another evil which
is much complained of—namely, the power of making
voluntary settlements. it is quite true that these volun-
tary settlements or arrangements have been very much
resorted to. It is quite true that the Courts of Bank-
ruptcy, as the 'commissioners stated, have had their
quantity of business relieved by the number of voluntary
arrangements. It is quite true that the evils which I have
mentioned have prevented , many traders going into the
Court of Bankruptcy ; but, while this has been the case,
there has been no sufficient authority or sanction given to
the mode in which voluntary arrangements have been car-
ried out. In Scotland there is such a mode, but in this coun-
try a minority of creators—a very small minority—have is
in their power to defeat any such arrangement. It has
been stated, and by a person of long experience and autho-
rity upon this subject, that it is desirable that even if one
creditor should stand out' voluntary arrangement should
not take place—that even if one creditor should propose
that the matter should be carried into court it is not right
to allow of any such arrangement. : But that opinion is
founded on the supposition that in every case the great ma;
jority of creditors wish to make some unfair arrangement
which' should be unknown to the public, and that the one
creditor is a patriotic and public-spirited man, who wishes
justice to be done, and is not contented with such a con-
cealed and secret proceeding. But facts do not agree with
this supposition. It is very often the ease that these one or
two creditors who stand out are men who wish to indulge
their spite, are unreasonably obstinate, or are opposed from
some caprice or other to voluntary settlements. We propose
that in cases where a majority of creditors in number, and
four-fifths in value, shall agree to one of these private ar-
rangements, then with due precautions and with sufficient
sanction it shall be lawful to settle the affairs out of court.
Another complaint which has been made is with regard to
the uncertainty in the punishment of fraud. Traders in the
country generally complain very much—l will not say with
bow much reason, but theyZcomplain—that in cases where
they consider the conduct of the debtor has been fraudulent
undue lenity is shown on the part of the commissioner. I
believe, on very high authority, that the best way will be
that whenever there appears to be a prima facie case of
fraud means shall be taken to send such a case before a jury;
that only upon conviction by a jury shall any punishment be
awarded ; and that the punishment awarded by the Court
or judge shall be sufficient to deter persons from entering
into trade and carrying on trade in a most fraudulent man-
ner, thereby not only cheating their creditors, not only de-
frauding all those with whom they are brought into contact,
but inflicting a stigma and disgrace upon the commercial
character of the country. (Cheers.) With regard to what I
have just stated as to vohmtary arrangements, it is proposed
that a memorandum shall be signed by a majority in num-
ber of the creditors and four-fifths in value ; that such deed
or memorandum shall be registered in the Bankruptcy or
County Court district ; that its provisions shall be enforce-
able by summary application to such court ; and that to pre-
vent fraudulent arrangements the judge of the court shall
have power to call the debtor before him and to examine him
as to his conduct. The last proceeding which takes place in
bankruptcy is the certificate. According to the old state of
the law the certificate was either granted or refused. In
certain cases, where no adequate grounds for granting a cer-
tificate could be found, it was refused; but in every case
when it was thought that the debtor had given afair account
of his transactions, that he had entered with honesty into
his trade, and that he had been only destroyed by those revo-
lutions in commerce which overthrow even those who carry
On business with the greatest integrity—in all such cases the
certificate should be granted. It was thought to be an im-
provement on the law in this respect that there should be
three classes of certificates—one class for those who had got
into debt by unavoidable misfortunes, another class for those
who might have got into debt by unavoidable misfortunes or
not, and a third class for those who had not fallen in debt
through unavoidable misfortunes. But these distinctions
are somewhat too nice for human reasoning. (Hear,
hear.) In the first
place, the words " unavoidable mis-
fortune," although we apply them in charity to men who
have failed in trade, to a very critical eye seem inapplicable
to most cases in which, though the misfortune may not
have been easily avoidable, it might have been avoided•
by a greater degree of prudence and sagacity. And on the
other hand, with regard to the third-class certificate,
saying that the debt was not owing to unavoidable misfor-
tune, it affixed a stigma to a man for the rest of his life,
which perhaps in many cases was unjust. We think it
better to recur to the old distinction of granting a certifi-
cate, or refusing it. (Hear.) On the whole, it makes a
distinction between the fair trader and the fraudulent 'spe-
culator, and therefore I propose in this bill to abolish alto-
gether the differen.ee of certificates. I do not wish at the
present time to go into the various details of this bill; I
will only say that it is proposed in this bill to consolidate,
as well as to amend, the law of Bankruptcy ; and it appears
to me that those who have desired that the bill shall be in-
troduced in this shape have judged rightly in desiring that
it should contain consolidation as well as amendment. With
regard to amendment, I think there aro very few points on
which there is any difference of opinion. When I intro-
duced the bill last year there were many provisions of that
bill upon which there appeared to be on the part of the Go-
vernment and on the part of professional gentlemen who
considered it great objections. But many of those provi-
sions, as I understand, are now to be adopted. If that be
the case, it is better that we should attempt at the same
,to consolidate the law. Of course, the few points of
difference which remain and the language of consolidation
must be carefully considered, and perhaps will be betterittee
considered by members of both houses than in committee
of the whole house. All I wish is to lay the bill on the
table of the house, in order to leave itfairlleymreto consider
considered, and
•
hereafter, when the houso has time and
such a subject, that all its provisions shall be considered
with care and deliberation. There is no person in this
country who has shown more desire for law reform than
the present Attorney-General and the present Solicitor-
General. (Hear.) The law officers of the Crown, lam
sure, will b© willing to adopt any measure which they think
will be an improvement of the law, and at the same
time raise the character of ithose who carry on
the trade and commerce of - the eolllltrY,' (Cheers ,)

I trust, therefore, that this being a matter of deep melt \',•e••P4
. .
-Ar.
serious concern to all classes of the co m r
unity, and one on . z
which men of all parties must desire to ee a good measure ;..7.41
passed, I may be permitted nosy to intro use the bill, and, ;4i
%.,
time will be hereafter given for a fair con ideratjon of itti:'•4s:;„.• ei
merits. (near, hear.) The noble lord concluck by la, S
ing for leave to bring in the bill.
The ATTORNEY-GENERAL said that no apology was
needed from the noble lord for bringing so important a
matter as the laws of bankruptcy before the house ; nor was
it necessary for so experienced a reformer as the noble lord
to quote the authority even of those eminent mercantile
bodies by whose advice and counsel ho said ho had been
aided in favour of any measure which he might introduce.
Be had listened with great attention to the statement of the
noble lord, to collect from it whether this bill were in all
respects identical with the bill brought in by the noble lord
last session, with the main provisions of which he had
made himself acquainted ; but he had not been able to as-
certain whether various important principles which the
noble lord proposed to legislate last session were likewise
comprehended in this bill. With regard to the very impor-
tant provision for diminishing the expense of the proceed-
ings in bankruptcy, he doubted very much whether giving
the majority of creditors power, if they thought fit, to place
the whole affairs of an estate in the hands of a single as-
signee of their own choosing would eventualfy lead to any
diminution of cost. There was this evil, too, attendant
upon the proposal, that for an official assignee appointed
by the Court, from whom ample security was required, and
who exercised the duties of his office under heavy responsi-
bility, a single assignee would be substituted, nominated by
the creditors, who might be in narrow circumstances, and
who must necessarily have no business of his own to attend
properly to the business of the bankruptcy. Bus if, when
the bill were printed, it were seen that it contained provi-
sions which would really lead to the diminution of expense,
her Majesty's Government and the house generally would
be glad to adopt them. He rejoiced to find that the noble
lord gave hie sanction to the abolition of the distinction be-
tween traders and non-traders, and he agreed in the enco-
mium which the noble lord had passed on the Bankruptcy
Law of Scotland. This same abolition was contemplated
by the bill which had been introduced in the other house
by the Lord Chancellor. A measure embracing the entire
law of bankruptcy, - and the amendments of which it was
thoUght to be capable at the present time, had been laid
before the other house by his noble friend opposite, and he
suggested,, therefore, that the noble lord opposite should
'not preis forsVard the future stages of this bill until
ataple time had been given to Parliament and the country
f 6 compare the two bills together, so that the whole
subject might be treated in a comprehensive spirit.
Ilear.) With regard to the proposal to give jurisdiction
in bankruptcy to the County Courts, although it might be
very plausible to say that whatever the creditors might
agree to should be_ lionesses they were the persons chieely
concerned it must not be forgotten that to give entire con-
•trol to the County Courti over the whole proceedings in a
bankruptcy case, where questions of great difficulty might
arise, without any appealto a superior Court, might lead to
very inconvenient consequences. He should have thought
it better to give a co-ordinate jurisdiction in bankruptcy to
those County Courts in matters not very large in amount,
with an appeal to the great Bankruptcy Courts established
in London. The next question treated of by the noble lord
was one of the utmost importance. It was as to whether the
creditors of a bankrupt might not, if they thought fit, adopt
in all cases a voluntary system of liquidation, totally apart
from the Bankruptcy Court. The principle of the law of
bankruptcy, in all countries, was that where a trader became
insolvent his whole property should at once be placed in the
hands and under the control of the creditors in the cheapest
and most expeditious mode which the law could define, and
that the honest debtor should then be freely and for ever ac-
quitted and discharged of all claims against him, while the
dishonest debtor should be adequately punished according t•
the amount of his delinquency. But when we came to apply
that principle to any measure of liquidation the greatest
practical difficulties were found to exist, and he had been
unable to gather from the statement of the noble lord what
provision he proposed to meet those difficulties. When the
noble lord's bill was before the house last session he consi-
dered it with great attention, and it appeared to him at that
time that the clauses relating to liquidation-wera utterly in-
adequate to effect tho desired purpose. Probably, in the
meantime, the noble lord might have reconsidered and
changed those clauses. However, that might be, he should
give his best attention to all the provisions bearing upon
this important part of the subject, and, should they appear
to him to be well suited for the purpose in view, ho
would do his utmost to give effect to them. (Hear, hear.)
Another important . point, involving difficulties of a
constitutional character, related to the extent to which a
fraudulent debtor should be punished. He knew not in
what way the noble lord proposed to deal with that part of
the subject ; but the difficulty at the very outset was this--
that a great many acts might be done by a debtor which,
though of such a nature that it would bo highly inexpedi-
ent, if not impracticable, to bring them within the opera-
tion of the criminal statutes of the country, were yet such
that it would be impossible to allow them to pass, when
proved in the Court of Bankruptcy, without some punish-
ment being inflicted on the debtor. Such, for example, was
the contracting of a debt when the debtor knew that he had
no means of paying it. On the other hand, when offences
of such a character were committed that it became just and
expedient to punish the debtor for having offended against
the criminal law of the country, this great difficulty arose :
If he were tried before a judge and a jury, no bankrupt's
estate would be able to bear the expense of those prosecu-
tions ; while, if the jury were dispensed with; it would be
said that the constitution of the country was violated and •
disregarded. Under these circumstances he should look
with great anxiety to the bill cf the noble lord to see how
these many and great difficulties were met, and he was not
without hopes that before the session terminated they
I might succeed in perfecting a measure which should give
satisfaction on this important subject to the great mercan-
tile and trading fists of the country. (Hear, hear.)
With regard to lidation, he might be excused for
stating to the house at for many years he had given his
most earnest attention to that great question. It was now
under the consideration of Government, and he proposed
within a few days to bring before the house the entire sub-
ject of consolidation, and it would be to him matter
of great satisfaction if in the improvement of any branch
of the statute law of England they could com-
bine consolidation with improvement. (Hear, hear.)
The noble lord, however, seemed almost to have
forgotten that the law of bankruptcy had been completely
consolidated within the last few years, and he thought that
it would be inexpedient to interfere with the provisions of
that measure until the sense of one or of both houses of
Parliament should be taken upon the general scheme of con-
solidation. (Hear, hear )
Mr. HEADLAM said that, speaking generally, the bill of
the noble lord had this very great advantage, that it em-
bodied in it all those provisions which the delegates from
most of the great trading communities of the country be-
lieved to be essential to their interests, and that it really
did contain a complete consolidation of the law of bank-
ruptcy, (Hear, hear.) With respect to the jurisdiction
given to the County Courts, he had found generally through-
out the north of England a very strong opinion in favour of
such jurisdiction, and in that opinion he concurred. He
thought, however, that there should be an appeal to an ap-
pellant court in bankruptcy, and he was happy to find that
that was given in the bill. The great difficulty which they
had to overcame obviously was the expense attendant upon
the liquidation of a bankrupt's estate. It was almost im-
possible to estimate the magnitude of this evil at present.
Generally speaking, the expense averaged over 30 p e
costcent
but of course if the average were over 30 per cent. ther
that
in particular be cases must infinitely greater, and nd he believed
t
that sometimes it amounted to as pinch as 80 per cent. It
was an important feature of the bill of
nthe n
it would very materially lessen this expese •
was the lack of
noble lord
hear.)
Another great defect in the present system
,
control which the creditors now had over the administration
im i
of bankrupt estates; and he could not agree with the At-
torney-General in thinking that the appointment of an
assignee by the creditors themselves
believed the opinion of themselves would not be a means
of diminishing expense. He
commercial world was contrary to that of the Attorney-
General on this point. (Hear.) When the reform of the
Court of Chancery was before the country great benefit
was derived from the assistance given by able and learned
laymen, including the right hon. gentlemen the member
for Carlisle and the President of the Board of Trade, and
they had a right to anticipate that a similar advantage
would be now derived to the cause of bankruptcy reform.
(Hear, hear.)
Mr. MOFFATT said all the consolidations that had
taken place in the laws of bankruptcy and insolvency had
proved practically a failure. A cumbersome and expensive
machinery had been provided to preserve the property of
the creditors, and but few creditors were willing to avail
themselves of it. (Hear.) He had expected, after the note
of preparation which had been sounded, that some large
and clearly-defined reform of these laws would have been
brought before them that night. (Hear.) He expected that
the noble lord would have brought forward some broad and
effective plan by which the expense and delay now expe-
rienced would have been greatly lessened ; but no such
measure had been laid before them. (Hear.) It was tho
general complaint of creditors that they could not get at the
assets of a debtor; that the debtor either set them at de-
fiance, or drove them into a compromise, leaving on their
minds the conviction that they have not got hold of all his
assets. (Hear.) He had hoped, therefore, that some
strin-
gent measure would have been proposed by which debtors
would be summarily compelled to surrender theirasenientrnire.
property into the hands of their creditors ; but hetonw clauso
relied to say that he did not find on that p
in the bill of the noble lord that would
Drindefects were
of the old
latter. (Hear, hear.) Indeed, most
referred to the Scotch
• aigarelief to the
retained in the bill. The noble lord
law ; and had he adopted the strong
k pt estates he would
the Scotch law with regard to measuresv laid down in
-dNin.not believe there was any
have conferred something that bankrupt estates
As regarded
the person of the debtor, he dito 0
ppress or harass him
desire in the community
unduly, but there
strong desire, when a per-
sonmeet his debts, that (as the
Attorney-General had
was unable towas a
expressed it) the whole of
his property should pass entirely and promptly to the
anan action
nn
creditors. (Hear,
po to punish fraud, but pro-
hear.) The noble lord did not propose
to give the commissioners
at
ande viere de
expense
ns
es t
ofb y
bring this action at law? WoUld the
creditors be et the troubleWhoe
fraud ? ($
ear, individual guilty of ear, hear.) His
an
punishconviction was that, generally speaking, creditors were iin-
different to everything but how to get the most they could
. krue t
out of the estate of a b , U
_p (Hear.) In conclusion,
he doubted very much whether the bill of the noble lord
would provide any material amendment of the law as it now
stood. (Hear.)
Leave was then given.to bring in the bill, which was
brought up and read a first time.
TURNPIKE TOLLS AND BRIDGES
Mr. ALCOCK moved that a humble address be presented
to her Majesty, praying that she will begraciouslypleased
t to
to issue a royal commission to • • •
inquire into and report as
the best means of abolishing
the tolls on the turnpike roads
and bridges in England and Wales. He said there had been
no tolls in Ireland since April, and they were abolished by
means of a commission. The difficulty in this country•was
the mortgage debt, which amounted to £5,5G0,000, and the
annual interest was about £209,000. Now, the amount of
real property assessed to the property tax under schedule A
Was £103,000,000, and a rate of 2d. in the £1 would yield
£.860,000, which would be sufficient to repair the turnpikes
and pay the interest. Mr. Alcock was proceeding with some
further remarks, when .
An Hon. MEMBER moved that the house be counted, and
there being only 38 present, the house adjourned at if
ntatito past s.. ceviock. - ' .