The Sun.
London, England, 1845-05-15 00:00:00

LAWS OF BANKRUPTCY AND
INSCTINENCY.
(From the ellorning Chronicle.)
From the great interest which has of late been felt
with reference to the state of the laws of bankruptcy
and insolvency, we are induced to call the attention
of our readers to the extensive alterations in those
laws which ware embodied in a Bill brought into the
House of Lords in the last session, the provisions of
which alO not appear to be generally known.
;The want of far deeper and more systematic re-
.
Sornas than have yet been attempted with reference to
this subject has been long felt, and has recently been
strongly expressed among the mercantile classes. It
was emphatically insisted on by the Commissioners
appointed to inquire into the laws of bankruptcy and
insolvency in 1840.
Nearly all the principal European states have,
within the last fifteen years, revised and remodelled
iffir laws affecting the persons and property of bank-
-rupts and insolvents, abrogating the inconsistent and
often cruel provisions of ?ornier legislation, and sub-
stituting provision-5 based upon a diligent considera-
tion of first principles, regulated in matters of detail
by the results of practical experience.
Our own country has hitherto persevered in the
employment of two separate systems, neither resting
Ripon any basis of principle, but resulting from what
may almost be called the accident of law-making, and
exhibiting, at the present moment, a patchwork of
legislation not only discreditable to the statute-book
of the first trading community in the world, but what
of infinitely greater importance, productive of con-
fluences highly injurious to the commercial mora-
lity and the commercial prosperity of the country.
The laws of every State ought to represent, or lead
where they do not represent, the moral sense of the
community. A man should feel that the laws of his
country will overtake him with punishment if dis-
honest steps are taken to escape from present difficul-
tks, and will support and protect him in pursuing an
opposite course. Few persons will deny that the
English bankrupt laws have a contrary tendency.
One learned judgels said to have observed from-the
bench, that our bankrupt laws are such that a trades-
man may be supposed to owe it to his family to fail
twice in his life. In any attempt to reform these laws,
the only opposition that need be feared will be that
emanating from the perverted sense of right and
wrong which those very laws engendered, from the
mistake of supposing that immunity of dishonesty
from punishment is justice,merelybecause it has been
so long declared to be law.
The conviction that a necessity exists for funda-
mental changes in this branch of our system of juris-
prudence, induced the late Government to entrust the
investigation of the subject to the Commission ap-
pointed in 1840. The Commissioners published a
great mass of highly valuable evidence, contributed
both by professional and by mercantile men, Which
presented even to those who possessed some know-
ledge of the subject a really astounding mass of
frauds and abuses perpetrated under the sanction of
• law, But though the evidence recorded by the Com-
missioners is highly valuable, the report itself was
far from answering the expectation formed from the
high reputation deservedly possessed by several of
the members of th,,, Commission. The inefficient
character of this document may, perhaps, be ac-
counted for by supposing that different views were
taken by different members of the Commission, and
that those who did not choose to pursue the course
adopted by Mr. Law of publishing a separate report,
acquies eed in some sort of compromise of their
various opinions, resulting in the unsatisfactory docu-
ment published as the report of the Commissioners.
The beedships and abuses exhibited in the evidence
taken under the commission led to the adoption of
some immediate measures of improvement introduced
by Lord Brougham. .But it was felt, as has been
declared by the Noble and Learned Lord himself,
that the magnitude and importance of the subject
demanded more searching reform than could be
effected by thus engrafting measures of improvement
upon an Incurably vicious system. Accordingly,
after an examination of the whole law of debtor and
credftor, particularly with reference to such improve-
ments as could be derived from the laws of other
nations, entrusted by the present Government to a
learned sergeant in 1843, the information, derived
from various sources, foreign and domestics, was ern-
'bodied in a bill containing provisions which embrace
the whole law of commercial and non-commercial
-iniolvency, prepared by Mr. Sergeant Manning. The
WI, though drawn by order of the Government, was
brought into thellouse of Lords, not by any mem-
ber of the administration, but by Lord Brougham,
at whose suegestion it is understood the examination
had been undertaken, and this comprehensive measure
was lost sight of in the excitement attending the dis-
cussion of the merits of two bills relating to parti-
cular branches of the law of insolvency, the one
brought in by Lord Cottenham, the other by Lord
Brougham, the latter of which bills received the
sanction of the Legislature.
In introducing the Bill, Lord Brougham stated
that the followine. foreign Codes had been consulted :
—The French Code de Commerce of 1807-8, and the
enactments substituted for this Code by the law of
1838; the Spanish commercial Code promulgated
in 1829 ; the Portuguese Commercial Code of 1833 ;
two Dutch Commercial Codes of 1823 and 1838 ; the
Prussian Cole ; the Hungarian Code, or rather the
Code prepared for the Austrian States, but adopted
at present in Hungary alone; the Code of the Grand
Duchy of Baden ; the Sardinian Code, promulgated
in December, 1842 ; the Neapolitan Code of 1819 ;
the laws of the several Hanse towns, and those of
Denmark and Norway;
the Austrian Code of 1782 ;
the Lombardo-Venetian Code of 1843, and the Codes
of 'several of the Swiss cantons ; the American Law
off' Bankruptcy, enacted by Congress in 1841, and re-
pealed in 1843 ; the Law of Cessio Bonorum, in
Scotland and France, and the proposed Code of Laws
for the kingdom of Wirtemburg.
The first point provided for is the consolidation of
the jurisdictions of the Courts of Bankruptcy and In-
solvency. Oa this point it is unnecessary to enlarge,
as it appears to be generally admitted that such a
change is highly desirable. Even in the able sup-
plementary report of Mr. Law, though written in de-
fence of his own court, the whole argument is
directed to the peculiar advantages of the method of
process in that court. His objections will, therefore,
be dbviated when every advantage in the process of
the Insolvent Debtors' Court is a lopted. The ano-
maly of two distinct courts having jurisdiction over the
same class of subjects has not arisen from any principle,
from any preconceived intention or plan whatever.
It is 'attributable to the fact that the bankrupt laws
were originally introduced for the purpose of obtain-
ing a rateable distribution of the debtor's property,
and with no other object whatever; while the In-
solvent Debtors' Court was opened solely with a view
to the relief of the imprisoned debtor. One court
could afford no protection to an unfortunate
and persecuted debtor ; the other could not enforce
the payment of one shilling of what was due to the
creditor. The successive provisions by which these
defective enactments have been patched up still leave
it a matter of what may almost be called accident,
whether a man in insolvent circumstances is brought
bat° a court where the dishonest escape with nearly
complete impunity, or into a court where the innocent
must submit to a preliminary punishment as the in-
dispensable foundation of its jurisdiction.
Passing from the constitution of the Court, the
sextquestion considered by the Bill is, who are to be
the subjects of its jurisdiction. And on this point it
hnotorious that seine difference of opinion, perhaps
more isppaxent than real, has been expressed by the
highest authorities. Lord Cottenham introduced a
Bill making a summary process universal for persons
of all ranks and conditions. Lord Brougham thought
Viet some limitations might be requisite, and drew an
amusing picture of a prince of the blood subjected to
the details of a process of bankruptcy ; he also pro-
tested against a summary process being used for debts
contracted under a different system of law, while he
characterised as " unfortunate" the distinction be•
tween traders 'and non-traders which had hitherto
subsisted. The Lord Chancellor, without committing
Leirnself to either opinion, remarked that it was a
question that required mature consideration. " lle
did not mean to say it was wrote, to frame a Bill in
the manner in which the present' measure had been
drawn up; it might be perfectly•right to establish all
that equality which it would be the effect of this Bill
to create; •he only begged them to remember that
the case, obviously, was one in which their Lordships
otsqht to proceed cautiously to inquire, to examine
to inyeetigate—that was all that he suggested.
" '
.t.... By-the plan detailed in the Bill of May, 1844,
various objections which have bee;ivsufogested' appear
e
ts be obviated.- It is proposed to a new court,
to be called the Court "of Insolvency, jurisdiction over
the_ following classes of debtors :-
1. Habitual traders who are subject to the present
bankrupt laws.
2.. Persons who, rwt being habitual trader,, are in-
delytel in respect of contracts of a commercial cha-
racter, so as to g've to creditors, in respect of bills of
exchange or other dealings of a commercial nature,
the same remedies for unfulfilled engagements what-
.ever be the occupation of the party.
3. Persons who are indebted to traders who have
kept a regular set of books, being an adaptation to
inodern usages of the provisions of the statutes of 11
and 13 Edward 1., de ilfercatoribus, which enabled
merchants to summon their debtors, and require from
them an acknowledgment on record of their debts.
'4. Persons who are debtors in respect of debts of
reddrd, whether by judgment or otherwise; debtors
otwiiich class are at present, tip a certain extent, sub-
leCt to the jurisdiction of the Insolvent Debtors Court.
,-tifi,- .Insolvents who are in possession, or have the
W
' Id4sltiolbf money in a fiduciary character, a provision
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~,, -ati4ififout interfering with the right of parties
i ,-, "1,64-064tctchancery, promises to afford a more ready
' j -1:411
._ atfii4eAremedy than at present exists in cases of
;Q ,-- . 1521aviaR or insolvency of guardians, executors,
0r:5413c-trikees.
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