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

LAWS OF BANKRUPTCY AND
INSOLVENCY.
•, (From the Morning 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 were embodied in a Bill brought into the
House of Lords in the last session, the provisions of
which do not appear to be generally known.
The want of far deeper and more systematic re-
forms 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
their laws affecting the persons and property of bank-
rupts and insolvents, abrogating the inconsistent and
often cruel provisions of former legislation, and sub-
stituting provisions 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
upon any basis of principle, but resulting from what
may almest 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
is of infinitely greater importance, productive of con-
sequences 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 men should feel that the laws of his
country will overtake him with punishment if dis-
honest steps are taken to escape from present difficul-
ties, 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 judge is said to have observed from the
bench, that our bankrupt laws are such that a trades-
man may be supoosed to owe it to his family to fail
twice in his life. In any attempt to reform these laws,
the only °position 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, merely because 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-
prielenca, initered the late Government to entrust the
investigation of the subject to the Commission ap-
poiateti in 18.10. Tha Commissioners published a
great mess 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 elmeee perpetrated-under the sanction of
law. Bat 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 niembers of the Commission. The inefficient
character of this document reeve 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,
acquieis !el in seine sort of compromise of their
various opinions, resulting in the unsatisfactory docu-
ment published as the report of the Commissioners.
The herdships an I abuses exhibited in the evidence
taken under the commission led to the adoption of
some immedi its 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
effectel by thus engrafting measures of improvement
upon an incurably vicious system. Accordingly,
after an examination of the whole law of debtor and
creditor, 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 em-
bodied in a bill containing provisions which embrace
the whole law of commercial and non-commercial
insolvency, prepared by Mr. Sergeant Manning. The
bill, though drawn by order of the Government, was
brought into the House of Lords, not by any mem-
ber of the administration, but by Lord Brougham,
at whose saeeestion 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 cito parti-
cular branches of the law of insolvency, the one
brought in by Lord Cottenhatn, 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 following foreign Codes had been consulted:
—The French Code de Commerce of 1807-8, and the
enactments substituted for this Code by the law of
1833 ; 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
of Bankruptcy, enacted by Congress in 1841, and re-
pealed in 1843; the Law of Cessio Bonorum, in
Scotlend and France, and the proposed Code of Laws
for the kingdom of Wirtemburg.
Time first point provided for is the consolidation of
the jurisdiction; 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 lila 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 obviated when every advantage in the process of
the Insolvent Debtors' Court is adopted. 'line ano-
rn ily of twit dietinct courts; having jurisdiction over the
same class of subjects has not arisen from any principle,
front eny 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 rateeble distribution of the debtor's property,
and with ne other object whatever; while the In-
solvent D exert was opened solely with a view
to the relief of the imprisoned debtor. Oae court
coal ti affeel no protection to an unfortunate
and pereeeeted. debtor ; the other could not enforce
the iris m.e)t of one shilling of what was due to the
creditor. The successive provisions by which these
slefeetivs enactment e nave been patched up still leave
it a matter of what may almost be called accident,
whether a min in insolvent circumstances is brought
into a court where the dishonest escape with nearly
complete impunity, or into a court where the innocent
mites sulenht to a preliminary punishment as the in-
dispensable found ition of its jurisdiction.
Passing from the constitution of the Court, the
next question considered by the Bill is, who are to be
the sahjects of its jurisdiction. Anti on this point it
is notorious that sense difference of opinion, perhaps
more apparent than real, has been expressed by the
highest authorities. Lord (:ottenharn introduced a
Bill making a summery process universal fir persons
of all ranks and conditions. Lori Brougham thought
that :,,_)111:? 11,11-0.1t10:13 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 summery 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. Tae Lord Chancellor, without committing
himself to either opinion, remarked that it was a
question that required mature consideration. "He
did not mean to say it was wrong 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
ouiet to proceed cautiously to inquire, to examine,
to investigate—that was all that he suggested."
By the plan detailed in the Bill of May, 1844
various objections which have been suggested appear
to be obviated. It is proposed to give to a new court,
to be called the Court of Insolvency, jurisdiction ionove
the fellowing classes of debtors
:-
1. Hebitual traders who are subject to the present
bankrupt, laws.
2. Persons who, not being habitual traders, are in-
delete', in respect of con:.racte of a commercial cha-
raeter,s) to give to creditors, in respect of bills of
exchange or other dealings of a commercial nature,
the same remedies fir 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
modern usages of the provisions of the statutes of 11
and 13 Etiweril 1., de ille:-c,itoribug, 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
record, whether by judgment or otherwise; debtors
of which class are at present, to a certain extent, -sub-
ject to the jurisdiction of the Insolvent Debtors Court.
5. Insolvents who are in possession, or have the
control of money in a fiduciary character, a provision
which, without interfering with the right of parties
to resort to Chancery, promises to afford a more ready
and efficient remedy than at present exists in cases of
analversation or insolvency of guardians, executors,
or other trustees.