The Sun.
London, England, 1857-05-22 00:00:00

that principle should be preserved. He had therefore
continued the exemption of evidence contained in the
confession of the party ; and in order to prevent the pos-
sibility of the civil remedy being taken away by the in-
dividual being permitted to plead the criminal liability
the bill enacted that the man who made the confession
should not have that confession converted into evidence
against him on a criminal charge. Eut he bad not in-
eluded in that exemption the extraordinary provision of
the 42d Geo. 111., and the 7th and Bth Geo. IV., namely,
that if the delinquent should go and voluntarily confess
in any proceeding in bankruptcy or insolvency, that con-
fession should exempt him from criminal consequences.
(Hear, hear.) There were other clauses in the bill cal-
culated, he thought, to provide that the criminal liabi-
lity should not interfere with the civil liability of the
party ; but there was a particular clause which might
possibly lead to some difference of opinion. It was this,
that if the civil remedy was sought before the criminal
proceeding, if there were a suit by a party who had been
defrauded of his property against the trustee, no cri-
minal proeeeding should be taken during the con-
tinuance of that civil remedy without the leave of the
judge before whom the civil suit was taken. These were
the principal provisions of the bill which he ventured to
solicit the indulgence of the house to allow him to intro-
duce. He might state, in conclusion, that he was by no
means particularly enamoured either with its language
or its provisions. He bad himself prepared the bill, and
therrfore it might be more than usually faulty, but he
was perfectly willing to receive suggestions without dis-
tinction of party. He should welcome every suggestion
that was made, and he hoped that this instalment of re-
form would remove an opprobrium in our jurisprudence,
that it would prevent breaches of trust, particularly as
they applied to persons in humble life, where it was im-
portant that the injured party should have his remedy
prompt and easy ; that thereby it would be the means of
repressing the frequent occurrence of offences of this na-
ture, and place their legislation on a more satisfactory
footing. (Cheers.)
Mr. MA.LIIIS said he had listened to the speech of the
hon. and learned gentleman with great interest; he had
brought forward the subject in a manner worthy of his
reputation and ability. He had long held the opinion that
for breaches of trust the parties !should be criminally
punished. The house would remember that in the last
Parliament the distinguished predeoessor of the hon.
and learned gentleman,the now Chief Justice of the Court
of Common Pleas, had in that house for some time a bill
which had the same object. The learned gentleman felt,
however, some difficulty in prosecuting that measure on
account of a doubt which was entertained by some of the
most distinguished judges of the land whether it would
be expedient to endanger the civil remedy by giving a
criminal one ? The hon. and learned gentleman opposite
was, he was glad to see, fully alive to that danger. No
doubt it was a very poor remedy to afford those who
had been injured by a breach of trust,to send them to
the Court of Chancery. Not that that was any fault of
the court ; for there was no part of its jurisdiction which
was more often or more beneficially exercised. In a great
majority of cases breaches of trust were committed not
for the benefit of the trustee, but for those whose interests
were committed to his care. (Hear.) In numberless in-
stances trustees were entreated by the family to sanction
some arrangement which was not strictly regular, and to
such applications they often, unfortunately for themselves,
assented. The office of trustee was, in truth, a thankless
one. It was one from which those who held it were pre-
cluded by the rules of the court from obtaining the least
pecuniary advantage, while on the other band they often
found themselves great losers by it. He thought, there-
fore, that a distinction should be made between those
who had departed from the strict letter of their trust for
no other motive than to benefit the parties themselves,
and those who had done so from motives that were cri-
minal. The bill would require the greatest possible care to
render it on the one band perfectly efficient, and on the
other hand to prevent it from treating as criminal those
whose conduct was not justly open to imputation.
(Cheers.) He (Mr. Matins) could not sit down without
expressing his satisfaction that his hon. and learned friend
bad grappled with the great question of frauds by the
directors of joint-stock companies. Three cases had of
late been brought prominently before the public, but
those who practised in the courts of equity were familiar
with many others. He would mention one. A. bank was
established in 1844 or 1845 ; the capital was to be
300,0001. or 400,0001. The directors borrowed more than
300,000/ ma debentures, and they misappropriated the
whole. The concern had been wound up by the Court of
Ceancery, and the unfortunate shareholders had been
compelled to contribute close up to hall-a-million of money.
He (Mr. Malin had been concerned as counsel fora gen-
tleman wbo, relying on the presumed respectability of the
directors, had taken shares to the extent of 5001., and
had been called upon to pay in respect of that 560/. no
less a sum than 10,000/. (Hear.) The public did not know
all the cases of this kind that occurred, nor indeed did they
know the worst of them. Such things were constantly
taking place, and this showed that there was in this
country, to a lamentable extent, an absence of commer-
cial integrity. It was true these cases were exceptional
ones ; but the public could not discriminate between the
high character of English commercial men as a body,
and those who were effected by the disclosures which
from time to time were made. There was no doubt that
the country had of late been sadly disgraced. (Hear,
hear.) He trusted that his hon. friend's measure would
lead to a better state of things. (Cheers.)
Mr. HADFIELD cautioned the house against resort-
ing to extreme measures. As it was, there was often
the greatest difficulty in the world to find suitable
persons willing to act as trustees. (Hear, bear.) With
regard to joint-stock barks, be was amazed how any-
body could venture to hold a share in one. (Cheers.)
Mr. NAPIER, wished to know whether the bill would
apply to Ireland ?
The ATTORNEY-GENERAL was understood to
reply in the affirmative.
Leave was then given to bring in the bill.
INSOLVENT JOINT-STOCK COMPANIES,
The ATTORNEY-GENERAL asked leave to bring
in a bill of a somewhat peculiar character—a bill intend-
ed to deal with an existing state of things, and therefore
to a certain extent of a retrospective nature. It was a
bill to amend the Acts of Parliament under which pub-
lic companies were liable to be made bankrupt ; and also
to amend the Winding-up Acts. The spirit of the enact-
ment he proposed was precisely similar to one introduc-
ed last session, with the exception that it would apply to
banks and insurance companies. The state of the law
with regard to banks and insurance companies was this.
There was a great conflict with respect to the manner of
obtaining a remedy in case of insolvency, which might be
done under a fiat of bankruptcy or by winding np under
the Winding-up Acts. It was a most unfortunate peculi-
arity of this country that we did not confide to any one
tribunal the duty of administering complete justice on any
one single subject; but we gave to different tribunals a
fragmentary jurisdiction over different parts of the same
subject. If a joint-stock bank became insolvent there
were, of course, two things to be effected. There was
the payment of its creditors ; and there was also the
task of deciding the proportion each individual share-
holder should contribute to make up the deficiency. He
(the hon. gentleman) should have imagined that all that
might have been committed to one tribunal ; but as it
happened, if a public bank became bankrupt, the duty
of winding up the estate might belong to the Court of
Bankruptcy, and that of deciding on the proportion
to be contributed by the individual shareholders might
devolve upon the Court of Chancery, under the Acts
passed in the year 1848 and in the year 1349. Sup-
pose a company had failed, and cne of the shareholders
had been called upon to pay 20,0101., while another had
been called upon to pay only 2,0001. The question would
thus arise how the 18,0001. was to be made up to the
person who had paid the larger sum ; and, in order
to solve that problem the Winding up Acts had been
passed. A conflict had in this manner arisen between
the two jurisdictions of Bankruptcy and Chancery, of
which the community had lately had a most painful and
distressing illustration in the case of the Royal Briti-h
Bank. In that case all the separate exerts of that great
tribunal, the Court of Caanc,,ry, had been occupied for
a considerable time, not in determining the rights of the
creditors or the liabilities of the shareholders, but
in determining the conflicting c aims of the offi,:ial
manager under the Winding-up Acts, and of the
official assignee under the subsequent fiat. (Hear,
hear.) In the case of the British Bank the creditors
were 6,000 in number, and the shareholders 300 ; and
such was the state of the law that every creditor bad a
separate right of action against every shar,holder ; and
there might thus be 6,0011 times 300 suits. The
shareholders were aggrieved by this state of things, and
there was no corresponding benefit to the shareholders.
(Hear.) He (the hon. gentleman) held in his hand a list
of the actions which had actually been brought ; and he
found that one creditor, for a sum of less than 1501.,
had brought no fewer than 25 actions. (Hear, hear.)
And what had been the practical results He had
another Ist of shareholders who had fled the country ;
and another list—a very long one—of shareholders who
had become bankrupt ; and many others had made set-
tlements of-their property or arrangements with regard
to their effects, in the hops of evading the claims to
which they were liable in the present state of the
!ha- (hear, hear.) It was, of course, utterly impos-
sible, when there were 6,000 creditors and 300 share-
hollers, that anything like a mutual arrangement
could be
made ; whereas common sense would recom-
mend that somebody should be empowered in the inte-
rest of the shareholders, and somebody else empowered
to represent the rights of the creditors ; and that then
some arrangement should be e to by
shareholders might at all events be which
rescued from the the
cumulated costs of the It ti
eelrable actions which must
now be added to the originall'
would therefore propose a remedyes
(Hear, hear.) He
loss.
the following de-
scription ; Let an advertisementbe inserted in the publie
prints, calling the shareholders together, and enabling
them to appoint one or more of their number for the pur-
pose of making some arrangementleithosthe
o f personsobt:in tog
whom they were liable, and for the Depose
the amount of contributions from the shareholders thatil'
might be requisite for the payment of the debt. Inne_
diately after that advertisement appeared, he Proposed
to protect the shareholders from their present liability to
actions, provided that they submitted themselves to such
terms as the court might think right. At present the
shareholders were placed in a position of great difficulty,
or, while the property of the company was taken away
from them by bankruptcy, they were liable for the
company' debts. He, therefore, proposed that the
CortunisSlOner should have power to give protection to
the shareholders. Under the existing law a creditor for
a very small amount had it in his power to defeat ar-
rangements, by bringing actions against the individual
shareholders. One provision of the bill was, that a cer-
tain proportion of the creditors should have power
to bind the whole in accepting any compwition, and that
when such an agreement was come to, the shareholders
might apply for and obtain protection from individual
nits. These provisions would be applicable to all exist-
ing as well as future companies. They supplied an im-
portant omission in the bill of last year.
Mr, MALINS referred to a similar bill which he had '