BANKRUPT LAWS BILL. (Hansard, 19 April 1809)

Sir S. Romilly
, in order to obviate an objection, which he understood was to be made to the clause for allowing bankrupts who may have obtained their certificates to be witnesses, without any release of their allowances, in cases where their assignees were claimants, proposed an amendment, to provide that bankrupts were not to be allowed to be admitted as witnesses under this act, but in such cases wherein they may by law be competent witnesses before the passing of this act.—The effect of this amendment was to allow bankrupts to be witnesses upon releasing their interest in the particular matter in issue, without a general release of their allowances upon the other property assigned under the commission.
A long discussion ensued both on the clause and the amendment, in which the Attorney and Solicitor General, and Mr. Davies Giddy, expressed strong doubts of the propriety of making any inroad upon the law and rules of evidence as they exist at this moment; and sir Samuel Romilly, Mr. Stephen, Mr. Jacob, Mr. Morris, and sir Charles Price, argued, in substance, that it was desirable to adopt the clause thus amended, in order to do away the practice of giving nominal releases by fictitious instruments which were afterwards to be concealed, and to prevent, if the release were real, the bankrupt from being obliged to give all he would in that 97 case possess in the world, for the purpose of becoming a competent witness. The amendment was, however, in the end agreed to, and the clause so amended retained as a part of the bill.—On the clause for requiring creditors to release all right of action, on proving their debt under a commission of bankruptcy, the Attorney General stated that he had some objections to this clause, but should wave them, as he understood that his hon. and learned friend intended to obviate them by a clause, which would provide against a creditor's releasing his right of action against a third party, where he had such right, as well as such bankrupt, and to prevent the creditor from releasing his right of action against the future effects of a bankrupt, whose dividends under a second commission of bankruptcy should not amount to fifteen shillings in the pound.—On the clause for authorizing the Lord Chancellor, or the Lord Keeper of the Great Seal, for the time being, to direct notices, other than personal notices, to be served upon creditors in England and Ireland reciprocally, upon appeals by petition on the part of a bankrupt, to whom his creditors should after two years continue to refuse his certificate, a member took some trifling objections, which, after a few observations from sir Samuel Romilly and the Solicitor General, were over-ruled, sir Samuel Romilly having previously stated his intention to bring in a clause, after the bill should be gone through, providing that in all such cases such other notice should under English commissions be given in the Dublin Gazette to Irish creditors, and under Irish commissions of bankruptcy to English creditors in the London Gazette.—On the clause giving to the Lord Chancellor or the Lord Keeper of the Great Seal, the power to grant a certificate on such appeal by the bankrupt, if the certificate should appear to have been withheld by the creditors from improper motives, another long discussion took place, the Attorney General and Mr. Jacob contending that it was more fit that the power of granting or withholding the certificate should be vested in the creditors or in some proportion of them, than in any other tribunal, because the creditors must be the best judges whether the bankruptcy was fraudulent, though it might not at all times be in their power to prove the grounds upon which they were of this opinion, on an appeal by the bankrupt 98 to the Chancellor. Whilst, on the other hand, it was most strenuously contended by Mr. Abercromby, that this was the most beneficial clause in the bill, because no certificate would be granted upon an appeal, unless it should appear to the Lord Chancellor that the creditors have no good ground for withholding it; and it appeared from an account on the table, that out of 16,000 persons, who had been bankrupt within the last twenty years, 6,597 were uncertificated, and could never acquire any property for themselves or their families, unless this clause should be enacted to place them within the reach of relief.

§ Mr. Stephen
contended that the great proportion of uncertificated bankrupts being three-eighths of the whole number, proved that the interference of parliament was necessary. This proportion was much the greatest in years of unexampled misfortune; and this circumstance went strongly to prove, that it was not merely the dishonesty of debtors, but their misfortunes, which were punished by stopping their certificates.

The Solicitor General
contended that it was better that, according to the law as it now stands, the bankrupt's certificate should depend on the judgment of the creditors than of the Lord Chancellor. He cited to this effect the opinions of lord Thurlow, lord Rosslyn, and lord Clare, who had been all of them chancellors. He thought that in this bill humanity appeared to be confined to the bankrupts, and that the sufferings of the creditors had not been sufficiently attended to. If, however, the clause should be rejected, he would move that instead of four-fifths of the creditors, three-fourths of the creditors, and of those only who had released the person of the bankrupt, should be sufficient for signing the certificate.

Sir Samuel Romilly
said, that the hon. and learned gent. had misstated what lord Eldon had said about the opinions of lords Thurlow, Rosslyn, and Clare. What they had said was, that it would be dangerous to leave the determination of the certificate entirely to the Chancellor. The present clause, however, did no such thing: it only empowered the Chancellor to interfere if he thought proper, upon a petition presented by a bankrupt who had been two years without his certificate. Now, as to fraudulent bankrupts, all those who had any experience in the court of chancery knew that they obtained their 99 certificate easier than the honest bankrupts. Fraudulent bankrupts always contrived to have false debts proved, in order to get themselves whitewashed, according to the common phrase. Their bankruptcies were for the purpose of gaining their certificates; whereas honest bankrupts had much oftener to endure the severity of the laws from the obstinacy or caprice of some one creditor. He allowed the people of England and the merchants of England were generally humane; but often great cruelties were practised, which the law should prevent. To say, that from the humanity of the English character these cruelties were not common, was in fact to say nothing. Neither were murders common, but that was no reason that there should not be laws against them. He could state one instance of cruelty to a bankrupt which came within his own knowledge. A bankrupt had been arrested at the suit of a house in the city, and one of the partners of that house was chosen the assignee. This assignee delayed for three years to make any sort of dividend, in order that the house might not be obliged to make its election about proving under the commission. At the end of three years, however he was obliged to make a dividend, but he then divided his debt, proving only one-half. This creditor had frequently been heard to declare, that the bankrupt should never go out of jail except to his grave, and his threat was accomplished. It having been stated to the Chancellor, that the bankrupt could not live more than two or three weeks longer in confinement, he appointed an early day to hear his petition; but though the decree was in favour of the bankrupt, the assignee contrived to have another detainer laid upon him, which gave rise to a more protracted litigation, and his debtor never did leave the jail but for his grave; and there was no doubt but the death of the bankrupt was owing to the obduracy of the creditor. He did not say that such cases were common, but that they should not be allowed to exist. The life of an honest man or his perpetual imprisonment, should not depend upon the caprice of partial judges, after the bankrupt had fairly surrendered his effects.

§ Mr. Wilson
said he was rather anxious not to admit this clause than to dispute it; but till he could put the bankrupt law on a footing which should protect the fair trader, he could not agree to adopt it.
100 The clause was then agreed to. Several new clauses were afterwards brought up by sir Samuel Romilly and the Solicitor General, and agreed to. The house resumed; the report was received, and ordered to be taken into further consideration this day se'might.