The Sun.
London, England, 1861-03-22 00:00:00

THE SUN, LONDON, FRIDAY 'EVENING, MARCH 22, 1861.

hear.) He hoped his hon. and learned friend would not
press that part of the clause.
The clause was finally withdrawn.
Sir H. CAIRNS moved the following clause :—"lf any
debtor shall, at the time of adjudication, be liable upon any
bill of exchange or promissory note in respect of distinct
contracts as member of two or more firms carrying on sepa-
rate and distinct trades, and having distinct estates to be
wound up in bankruptcy, the circumstance that such firms
arc in whole or in part composed of the same individuals
shall not prevent proof and receipt of dividend in respect of
such distinct contracts against the estates respectively liable
upon such contracts."

The ATTORNEY-GENERAL said this was a must im-

portant subject, and he was much obliged to his hon. and
learned friend for having drawn the attention of the com-
mittee to it. Re proceeded to explain the object of the
clause, which was purely of a technical nature, and pro-
posed to add words which would extend the operation of
the clause to cases where one of the joint contractors was a
sole trader.

The clause, as amended, was agreed to.
Mr. MURRAY proposed amendments the effect of
which would be that the taxation of solicitors' bills in the
district court, instead of being settled by the local regis-
trars, as proposed by the bill, should be in all casea settled
in London. He said he had before him a report of a case
from which it appeared that a local registrar, whose name
he would not mention, had improperly allowed himself cer-
tain fees, and the bill allowing such charges fell to the re-
gistrar's own duty to settle. The commissioner had acknow-
ledged that the registrar was in fault, but he said that the
money having been refunded that was enough, and no more
notice need be taken of the matter. This state of things
ought to be avoided. His object also was to secure uni-
formity of charge in London and the country.
Several amendments to clause 18 were agreed to ; one of
them, proposed by Sir F. KELLY, having reference to the
remuneration for additional duties imposed on the registrars
by this act.
An amendment was proposed by Mr. MURRAY, with re-
ference to the taxation of bills of costs under the control 'of
the metropolitan court.
The ATTORNEY-GENERAL thought such a provi-
sion would cause much practical inconvenience and expense,
by requiring solicitors engaged in bankruptcy business in
the local courts to send up to London and employ their
agents here to attend the taxation of their bills.
Mr. LOCKE called attention to that provision of the
27th clause by which the taxing-master of the Insolvent
Debtors Court was to be transferred to the Bankruptcy
Court, " and employed as general orders might direct."
He did not know the meaning of this phrase.
Mr. HADFIELD thought it would be inconvenient and
an enormous expense, both to creditors and their solicitors
in the country, that the latter should be obliged to come to
London to have their bills taxed from time to time. The
effect would be that the party who came up would get the
ear of the taxing-master, and everything would be decided
according to his representation.
Mr. MALINS observed that all common law bills were
taxed in London, and there would be some advantage in
having an uniform system of taxation.
At the request of the ATTORNEY-GENERAL, who re-
marked that sufficient notice of the amendment had not been
given,
Mr. MURRAY agreed to withdraw it.
Amendments proposed by the ATTORNEY-GENERAL to
clauses 20 and 30 were agreed to.
On clause 40,
Mr. MALINS said that it would give the Lord Chancellor
power to grant two-thirds of their salary as a retiring pen-
sion to the present official assignees after 20 years' service,
provided they were 65 years of age. But one or two of
those gentlemen, although they had not attained that age,
were appointed in 1832, and were now anxious to retire.
He thought the 30 years' service, without the condition as
to age, should be taken as sufficient, and he moved an
amendment to that effect.
Mr. MURRAY and Mr. CRAWFORD expressed their ap-
proval of the amendment.
The ATT ORNEY-GENERAL said there was a difficulty
here in point of principle, for the house had laid it down that
these officers ought not to retire unless two things con-
curred in their case, the 20 years' service, and the age of
65, except in cases of infirmity or sickness. It was now pro-
posed to make an exception or privilege for the benefit of
one or:two individuals. He could not say whether the house

would have no objection to de that.
Mr. HENLEY said the discussion had shown the incon-
venience of considering the bill without its being reprinted
with the amendments made in cDmmittee. (Hear, hear.)
The amendment was then agreed to.
Sir H. CAIRNS moved, at page 19, clause 82, line 31,
after " Provided always," to leave out to the end of the
clause, and insert " That before any adjudication in bank-
ruptcy shall be made against the debtor under this section,
the following rules shall be observed :-1. A copy of the
petition for adjudication shall be served personally on the
debtor, either within the jurisdiction, or in such place or
country, or within such limits abroad, as the court shall,
upon application for that purpose, direct. 2. Such copy
petition shall have endorsed thereon a memorandum, in a
form to be settled by a general order, specifying the time
within which the debtor is to appear on such petition; and

such time shall, when the service is to be made abroad,• be

the time which the court shall think reasonable, having re-
gard to the place or country where the service is to be made.
3. In no case shall the time for appearance be less than
thirty days after service. 4. If at the expiration of the
time limited for appearance the court shall, on the hearing
of such petition, be satisfied that an act of bankruptcy has
been committed within the meaning of this section, it may
adjudge suoh debtor to be bankrupt," and to leave out clause
83. The hon. and learned gentleman said if ion.traders were
to be brought under the operation of the bill it was desirable
to proceed with great caution, and to introduce sufficient
safeguards against any abuse of the provisions of the bill on
that subject. lie thought there ought to be some further
safeguards than those contained in clause 82. (Hear, hear.)
The result of that clause would be this : If a non-trader,
who might be a member of that house, happened to be out
of the country, a statement might be made behind his back
to the effect that he had gone away with the intention of
defrauding his creditors. All the persons who made that
statement would really have to do would be to say that he
did not know in what part of the continent the non-trader
was to be found, and then he would ask the judge to be
allowed to serve the petition at his dwelling house, which
might be shut up, or only in charge of a servant. The con-
sequence might be, therefore, that when the gentleman
returned from his continental tour he might find that he
had in his absence been adjudicated a bankrupt, though
he had not loft the country with any idea whatever of
defrauding his creditors. (Hear, hear.) By the amend-
ment, which would give additional safeguard, he simply
proposed that in all cases there should be a personal service
upon a debtor. (Hear.) The debtor would thus have an

opportunity of coming forward and being heard before he

was adjudicated a bankrupt. As they were now bringing
non•traders for the first time under the operation of a law
of this description he thought the proposal was a very fair
one, and he hoped it would be agreed to by the Attorney-
Gen eral.

Mr. HADFIELD hoped the hon. and learned gentleman
would not press the amendment. He could not understand
why non-traders should be all ,wed to contract debts to any
amount, and then have so many privileges thrown around
them. (Hear.) The payment of just debts ought to be as
strictly enforced against the aristocracy and professional men
as against any other class. A trader was presumed by law
to be always at his place of business, but a non-trader who
was up to his ears in debt might be wandering up and down
the country like an Arab, and there would be the greatest
difficulty in finding his locus in quo. (Laughter.) He
held the doctrine that every man who had contracted a debt
ought to pay for it, and he had no right to go from home on
pleasure until he had done so. (Laughter.) They ought to
make a non-trader keep books like a trader, and if he could
not pay his debts he ought to be brought before the Bank-
ruptcy Court. Sir Samuel Romilly was the first person
who had tried to break ,in upon the existing system, and
carry out the principle contained in this bill.
Sir G. BOWYER hoped the amendment would be use-
ful, and that it would be agreed to by the Attorney-Gene-
ral. At the same time he thought the amendment showed
the inexpediency of including non-traders under the bank-
ruptcy law, because it was evident that they could not be
dealt with in the same manner as traders. The question
was not whether non-traders were equally bound with
traders to pay their debts, but whether non-traders ought
to be brought under an exceptional system of legislation in-
tended for traders. In his opinion this part of the bill was a
serious mistake in legislation. No exception to the general
law ought to be carried beyond the reasons on which that
exception was justified and founded. They ought not to
apply to non-traders that which was intended entirely for
the exigencies of trade and the circumstances in which
traders were placed. Instead of bringing-non-traders under
this bill the Attorney- General should rather introduce a
specific measure extending to them the law of bankruptcy.
He could not make a non•-trader a bankrupt without corn-
!pitting a solecism in the English language.
Mr. HENLEY hoped the Attorney-General would agree
to the proposal of the hon. and learned member for Belfast.
He agreed with the hon. member for Sheffield that all
persons ought to pay their debts. With traders time was
the essence of the debt, but with non-traders that was not
the case.

' Mr. ROEBUCK asked what would occur in this case.
Suppose an officer in the army was sent to India, and he
was there fur eight or ten years, and suppose some one out
of pure malice should say that the officer owed him, say
£lOO, and he should be cited to appear in the Bankruptcy
Court ? He could not appear. Would he under these cir-
cumstances he made bankrupt?

The ATTORNEY-GENERAL said it was utterly im
possible to declare a roan bankrupt under the circumstances
put by the hon. and learned member. No man cr)uld be
declared a bankrupt who was not preyed to have gone
abroad and remained abroad with intent to defraud his
creditors. To make a man bankrupt who had gone abroad
on the service of the Crown would be as preposterous as it
would have been to have made the hon. and learned member
bankrupt when he visited Austria recently. With regard to
the argument on the other side the hon. baronet had ob-
served that the whOle controversy layin this, what should
be evidence of the intent, and what rules should be laid

down for the purpose of ascertaining the intent. He was
willing to agree to this—that the non-trader should not be
made a bankrupt unless the court was satisfied that he had
notice of the proceeding to make him so. He should there-
fore willingly concur in the proposed amendment, provided
his hon. and learned friend would agree to an addition
which he would propose, and which should form the fourth
rule, which should be as follows, "if such personal ser-
vice has not been effected the court must be satisfied that
every reasonable offort was made to effect the same, and
that the attempts to serve such person came to the know-
ledge of the debtor and were defeated by his conduct,"
This in point of fact involved personal notice.
Sir H. CAIRNS said he was willing to make this addi-
tion to the rules. Where a person was endeavouring to
avoid a bankruptcy he thought a substituted service 'might
be allowed.

Mr. WALPOLE also concurred in the addition proposed
by the Attorney. General.

Sir F. KELLY said there were many cases in which per-
sons, non-traders, made deeds of gift and conveyances of
their property, or portions of it, as settlements for their
wives and families. These were looked upon as proper acts
in such persons, but the Court of Bankruptcy would look
upon them as fraudulent as against creditors, so that if a
gentleman who had been abroad for some years—an officer
say—was to execute one of these deeds of gift or settlements
for his family, he would be liable under this clause to be made
a bankrupt. Again, if proceedings in the Bankruptcy Court
were taken against an officer serving abroad he must appear
personally. That was the object of the process, and if he
did not appear he was liable to be made bankrupt. He en-
tirely concurred in the amendment of Sir H. Cairns.

Mr. MALINS observed that the clause did not mean that
the debtor should appear personally, but that he should
appear by his solicitor or authorised agent.
Sir G. BOWYER wished to know who was to bear the
expense of this personal service ? The bill might ruin a
man. First there was the expense of personal service ; then
there was the expense of coming home ; and lastly, there
was the injury it might do his business to be called upon sud-
denly to leave it for the purpose of repairing to England.
And after all it might be a malicious charge suggested by
the envy of a rival, and supported by hard swearing. The
more the discussion proceeded the more insuperable the
difficulties by which the bill was surrounded would appear.
Perhaps members of that house might, some day, have ex-
perience of the effects of the bill, and then they would be
sorry that they had not bestowed more care upon its pre-
paration.

The amendment, with the addition proposed by the
ATTORNEY-GENERAL, was then agreed to.
The ATTORNEY-GENERAL proposed at the end of
clause 83 to add, "No debtor shall be adjudged bankrupt
on the ground of having lain in prison as aforesaid during
fourteen days, unless after he shall have been summoned he
shall not offer such security for the debt or debts in respect
of which he is imprisoned or detained, as the judge, com-
missioner, or registrar, whose duty it would be otherwise
to adjudicate, shall deem reasonably sufficient."

Mr. HENLEY was much obliged to the Attorney-
General for the fair spirit in which he had met the objet •
tions which had been made to portions of the bill. He had
now made it uniform, an no person was now to be ad-
judged a bankrupt until he had been heard.
Sir G. BOWYER said it was clear from the 92d section
that the appearance of the person charged with an act of
bankruptcy must be personal; and, therefore, he repeated
that if a man went abroad he would always be liable to be
brought back by any ill-conditioned person who chose to
swear that he had left the country for the purpose of evading
the payment of his debts.

Sir H. CAIRNS said that would be a very serious thing
if the fact were so ; but section 95 expressly declared that
no person should be obliged to appear personally who could
allege a lawful impediment. He would, therefore, only
have to send home an affidavit stating the fact.
Sir F. KELLY was much obliged to the hon. baronet for
calling attention to this point ; and he should be glad to
know how it was to be made to appear whether an impedi-
ment was a lawful one or not.

The ATTORNEY-GENERAL appealed to the Speaker
whether it was competent to raise another discussion on
this subject after the clauses which referred to it had all
been passed.

soners in the gaol in his (Mr. Henley's) county were there
under committals of county court judges. His impression
rather was that all imprisonment for debt ought to be abo-
lished, except in cases of fraud in the largest and widest
sense. But he did not think it should depend on the judge's
opinion as to whether a man could pay his debts or not.
The ATTORNEY -GENERAL, interposing, said that
the judge's order could issue only if he found the man had
means to pay and did not. It was not a mere matter of

opinion.
Mr. HENLEY said that in a case of this sort, affecting
the debts and liabilities of a poor man, where a great many
per,soni were constantly in prison, imprisonment by a
county court judge was virtually an imprisonment for debt.
He trusted the Attorney-General would give the matter his
fullest consideration.
Mr. CONINUHAM supported the amendment.
The house divided—
For the clause
For the amendment
The clause was retained
Mr. AYRTON objected to the position in which persons
in public employments were placed by clauses 141 and 142,
and moved the insertion of the words, " When the dis-
charge of a bankrupt should be conditional, as hereinafter
provided," at the beginning of the first. His object was to
exempt public servants from future responsibility except in
case of fraud or misconduct.
The ATTORNEY-GENERAL opposed the amend-
ment, and argued that when a person in public employment
contracted debts, power should be given to the judge to
allot a portion of his salary for the payment of his creditors.
After a few observations from Mr. ROEBUCK,
The amendment was negatived without a division.
In clause 159, line 27, the following words were added on
the motion of Mr. MURRAY,—" Provided that in case all
necessary parties agree, the court shall have power to assess
such damages without the intervention of a jury or a refe-
rence to a court of law."
Sir H. CAIRNS said he should propose to leave out
clauses 207 to 218 inclusive. These were what had been
called the dead men's clauses, which was not a very agree-
able name, but the reality was still less so. As they now
stood, if any man died who owed any debts, any creditor
three months after his death would have the power of sum-
moning his executor before the Bankruptcy Court or the
county court of the district where he had resided or carried
on business, and requiring the executor to make it clear
to the judge that the property of the dead was more than
sufficient to pay all his debts ; and if that was not made
•fear, the judge would be empowered to wind up the estate
of the dead man in bankruptcy, and by an ex post facto
operation of the law to declare him bankrupt, fixing thus a
stigma on his memory, and a cruel injury on the family he
had left behind him. Suppose, for instance, a Liverpool
merchant, who had resided in Cumberland or Staffordshire,
and who had died there, leaving an extensive business and
property to the extent of several hundred thousand pounds
in the form of bills and outstanding debts due to him; it
would be possible for any creditor of his to the amount of
a few pounds, to summon his executor three months after
his death before the county court judge in that place where
he died ; and unless the executor could then make
it clear that the merchant's property, in whatever
part of the world it might be, and consisting as it might of
securities not immediately to be realised, was more than
enough to pay his debts, he would be adjudged a bank-
rupt, and his estate be wound up in bankruptcy, at the dis-
cretion of the nearest county court judge. The law of bank-
ruptcy always proceeded on the supposition of some act or
confession of bankruptcy having been done by a man in his
lifetime ; but here that was not the case. And the neces-
sity for making a man bankrupt, which was supposed to
exist whilst he was going on to spend his money and to
contract fresh debts, so that it was right ,for the law to in-
terfere and take the management of his property, could not
exist after the man was dead. lie therefore moved to strike
out the 207th clause.
Mr. E. CRAUFURD said these clauses had been loudly
demanded by the mercantile interest, and they wero intro-
duced into the bill expressly in fulfilment of a pledge given
to a large and influential deputation. There was an address
or memorial in favour of these provisions which had been
sent up with the signatures of 89 of the principal commer-
cial or manufacturing firms. Such an expression of opinion,
should induce the house to pause before rejecting these
clauses, which were likely, in many cases, to afford the
means of administering an insolvent estate in the local
courts, instead of throwing it into Chancery. The coun-
try should have an opportunity of ascertaining by experi-
ment the practical merits of such a system, which might be
decided upon finally after a few years' trial of its working.
It was a very fallacious argument to say that the stigma of
bankruptcy would be cast upon the family of a man who
had died leaving some debts. How could they be protected
against that which was the effect of the conduct of their
deceased relative ? He believed that the clauses now under
discussion would confer a great boon upon this country,
a mode of administration of estates similar to that which
prevailed north of the Tweed, and which was there found to
work extremely well.
Mr. WALPOLE said he should be glad to know whether
the mercantile community, who were said to be in favour of
these clauses, were fully aware of what their effect would
be ? He believed that if the real effect 'of these clauses
were fully appreciated, persons of the mercantile interest
would be the first to desire their rejection. He should con-
ceive that the hon. and learned gentleman's object in insert-
ing these clauses was to provide for dealing with small
estates in the country, which might, on the death of the
persons to whom they belonged, be as well administered by
the local court as by the Court of Chancery. But the sys-
tem now proposed was too large and extensive in its applica-
tion; and, although the object was in itself a good one, it
had nothing to do with the question of bankruptcy, but
should rather be dealt with in a separate bill. The provi-
sions her) inserted were indeed quite inconsistant with the
general objects of this bill to amend the law of bankruptcy,
for, whereas it was a great object of the bill to lead the debtor
and creditor to adjust their differences by a composition or
arrangement out of court, the effect of these clauses would
be in every case where a person had died leaving any debts,
to bring his efhtate into court. Let the house mark what
they were doing. It was most reasonable, when a. person
died, that his relatives should be allowed an interval of time
to look about them, for the purpose of realising his estate,
paying his debts, and preserving the residue. If only three
months were allowed, they would force the executors to sell
the property at a great disadvantage, and in doing that they
would inflict a monstrous injury upon the estate, which the
next of kin and relatives would be entitled to. The effect
of the clause would be to drive all parties into the Court of
Chancery to protect themselves and their property. His
hon. and learned friend would see that these clauses had
really nothing to do with bankruptcy law, which was de-
vised for the purpose of producing an equal distribution of I

53-31

the assets among all the creditors. He would appeal to his
hon. and learned friend to withdraw these clauses from the
present bill; and to bring in another bill m, ith clauses framed
for the purpose of meeting the evils which required a re-
medy, and he ventured to say such a measure would be
supported on both sides of the house.

Mr. CRAWFORD hoped that the hen. and learned
Attorney-General would not withdraw these clauses, as the
mercantile classes, who had been well advised and knew
what they were asking for, desired their retention. No less
than 30 banking houses in London, and several bank*.
establishments in different parts of the country, were anxi-
ous that these clauses should become law.
Mr. HADFIELD said he felt assured that not less than

10,000 mercantile firms were anxious to have these clauses
retained. He would ask Whether a debtor who had died was
to be more considered than abody of suffering creditors who
were kept out of their money.
The ATTORNEY-GENERAL said these clauses were
recommended some years ago by one of the most illustrious
lawyers, now an ornament in the other house, and they had
been introduced into this bill by the recommendation of a
large body of mercantile men. He gave them a promise to
introduce them, and he had done so, but he should himself
prefer their being limited in point of amount, and then he
believed they would work well. He did not think it would
be wise to send this kind of business to local courts which
they, in their institution, were not intended to transact, and
he would observe that one of the great advantages of Chan-
cery was that if after a person died an action was brought
to recover a debt, the executors could come at once to the
court and obtain an order of injunction against the action,
axd then administer tho estate equitably. Now the Cuunty
Courts did not possess this power. He differed from his
hon. and learned friend in thinking that clauses like these
had no place in a bankruptcy bill. He earnestly begged his
hon. friend behind him to accede to the propositionwhich he
was about to make, viz., that in clause 207 after the word
" debtor" in line 13 to strike out all the words that followed
down to and inclusive of the word " ban kruptcy" in the
15th line, and in lieu of those words to insert the following,
" provided it be stated in such petition, and reasonable proof
be given of such statement, that the assets of the deceased
debtor do not exceed £5OO, and that they are insufficient for
the payment of his debts." That, he believed, would limit
the operation of the clause to insolvent estates to £5OO, and
meet the objections which had been urged to the clause.
Mr. MALINS said that no doubt what his hon. and
learned friend had proposed would be a modification of and
greatly improve the clause. Ho thought it, however, so
essentially vicious in principle that nothing would satisfy
him but its being expunged altogether.
Mr. JACKSON hoped the house would agree to the
proposition of the hon. and learned Attorney-General, and
ho begged to move to that effect.

Sir H. CAIRNS should like to ask the Speaker whether
it was competent upon a motion being put that a clause
should stand part of a bill to move an amendment upon that
clause. (Hear, hear.) lie apprehen.led that the only mo-
tion which at present could be decided by the house was
whether or not that clause stand part of the bill.
The SPEAKER said the question then before the house
was whether the clause should stand part of the bill, and he
did not think the clause could be expunged except by con-
sent of the hon. member who proposed it.
The house then divided on the question that clause 207
stand part of the bill.
The numbers were—

Ayes
Noes .. ...
Majority ,
The announcement of the numbers was received with
cheers from the Opposition benches.