HC Deb 11 April 1815 vol 30 cc493-500
Mr. Serjeant Best

rose, in pursuance of his notice, to move for leave to bring in a Bill to amend the laws respecting Insolvent Debtors. His intention, in bringing in this Bill, was first, to force persons who were possessed of property to give it up to their creditors, and next, to punish those persons who had become insolvent through their own profligacy or vice. The first object which he had stated he had no doubt would meet with the general concurrence of the House. The proposition which he should submit was founded upon an Act passed so early as the reign of George the 2d, by which it was enacted, that persons imprisoned for debt should be obliged to deliver up their property for the benefit of their creditors, under the penalty of transportation. The provisions of this Act, however, only extended to persons having incurred debts under the sum of 100l., and his desire was, to extend its operations to debts whatever might be their amount. It was, no doubt, well known to many members of that House, that at this moment there were numerous persons in prison for debt in various parts of this kingdom, who were spending their substance in the most luxurious extravagance, and who bid defiance to those creditors whose ruin they had promoted, by becoming largely in their debt. To give creditors the power of forcing those persons to deliver up their property was, therefore, the first object he had in view; and all the deviation he should make from the Act of George the 2d, was, to extend its operations in an unlimited manner. The other part of his Bill, which was to increase the punishment of persons who from their own acts of folly and imprudence had become insolvent, he was apprehensive would not meet with so general an assent as that which he had just stated; yet he trusted the explanation which he should give would tend to remove any difficulties that might arise. His principal and most anxious wish was to distinguish between the unfortunate and the fraudulent debtor; because he was aware that there was a species of credit that was absolutely necessary; and was far from thinking, that those whose only crime was poverty should be punished. In certain cases, punishment ought rather to fall on those who think proper to trust, than on those who apply for credit. Yet an excess of credit was a public injury; and the effect of the last Bill went to destroy that credit which was highly necessary to the public welfare. Amongst the middle classes, for example, there were persons who could not exist without it. Men in public offices, officers on half-pay, and others similarly situated, whose salaries were received only by the quarter, and then not precisely to a day, would be in the utmost distress but for this accommodation; but the present Bill had tended to withdraw this necessary credit. The reason was, that no tradesman could know whom it was safe to trust, when any man, after getting in his debt, and being pressed for payment, had only to warn him not to proceed against him, as he should in that case, give him a bill upon lord Redesdale at three months. This state of things went to destroy the credit that was necessary, as well as that which was improper. A tradesman might find himself utterly unable to carry on his business, if he was expected to examine most minutely into the circumstances of every body to whom he gave credit. It was no doubt familiar to the House that the Bill which was called "lord Redesdale's Bill" had given rise to many serious objections. It in fact gave the same facility to the dishonest as the honest debtor, to obtain his liberty at the expiration of three months imprisonment. He was willing to admit that the judge who should have to discriminate between these cases would be placed in a very trying situation. In, fact, the only way of separating the honest from the dishonest debtor, would be to introduce some sort of scale by which the claim to the advantages of the Act might be regulated. Such a scale he had prepared for the consideration of the House. He had to propose, that if the debtor was found in a condition to pay 15s. in the pound, he should be entitled to his discharge at the expiration of three months. If he should from the improvident management of his affairs, be only in a condition to pay 10s. in the pound, then he thought his imprisonment should extend to a longer period, namely, to twelve months. Again, if the debtor, by expending that which he must know belonged to others, was unable to pay 10s. in the pound, such a man, he thought, ought to be imprisoned two years, twelvemonths of which, should be passed within the walls of a prison, and not as at present, in what were called the rules. And lastly, if a man was entirely insolvent, and without the hope of paying any portion of his debts, he considered it was but proper that he should be kept within the walls of a prison for two years. It would naturally occur, that there were many cases in which a prisoner might be in no condition, from misfortunes not originating in his own vices, to pay any thing in liquidation of his debts. To such an individual he by no means wished the scale which he had staled to apply; it should, therefore, be open in all cases for the debtor to prove by his own oath, supported by other satisfactory evidence, whether his distresses were attributable to imprudence or misfortune, and if he was able to establish the latter, then he should extremely lament his detention in custody beyond the time that was necessary to prove the fact. It was likewise his intention to provide, that the Judge of the Court should first decide whether a debtor was a fit person to be discharged, and that then a majority of his creditors should sanction that discharge before it took place. It had been remarked, that creditors often, from being at a distance from their debtors, would not be at the expense and trouble of opposing their discharge, and under this impression, many persons got themselves removed by Habeas Corpus, from Northamptonshire, and other distant counties, to the prisons of the metropolis, by which means they escaped all scrutiny whatever. To obviate this practice, he should insert a clause, by which, at the desire of a majority of the creditors, such persons might be removed down to the place where their debts were contracted, so that they might be opposed with effect, and without those enormous expenses which, by the present system, must be incurred, if opposition was to be made. The policy of these amendments to the Bill now in force, he was convinced, would strike every member in the House; and he trusted, if he was allowed leave to bring in the Bill, that he should be able more clearly to establish their necessity. The learned Serjeant concluded by moving, "That leave be given to bring in a Bill for the amendment of the laws relating to Insolvent Debtors."

Mr. W. Bathurst

said, it was impossible for those who had fully investigated the effect of the Bill known by the name of "lord Redesdale's Bill," not to observe that it was injurious as well to public credit as to public morals; by exciting on the one hand a lawless extravagance, and on the other by creating distrust, and destroying that useful credit which was essential to the existence of the country as a commercial nation. He did not wish to advert to the law as it existed before the passing of this Bill, yet he most fully subscribed to the necessity of bringing forward some measure by which a distinction might be made between the unfortunate and the fraudulent debtor; and with this feeling he cordially seconded the motion of the hon. and learned Serjeant on the floor, than whom he thought no man more competent to the performance of the task he had undertaken.

Mr. Horner

said, that from the reading of the motion which he had just heard, he had been released, from the uncertainty in which he was placed from the form of the notice of the learned serjeant, as it stood on the order-book, as it was there stated that his intention was to move for the repeal of the Insolvent Act altogether. He was glad to find that he was mistaken, and that the object of the learned serjeant was only to amend the Bill in question. It was not his intention to follow the hon. gentleman who had spoken last, in his disquisition upon public credit, as all must agree that it was of the last importance not to check the credit of this country by any enactment of law. If he understood the learned serjeant right, he had divided his Bill into two branches—the one for enforcing the delivery of the property of the debtor to the creditor, and the other for the punishment of the insolvent debtor. With reference to the first proposition, as far as it could be accomplished, he had not the slightest objection, as nothing was more just than that the creditor should have the benefit of any property of which his debtor might be possessed. This object, however, he apprehended, could be obtained, as far as it was practicable, under the present Act. The other proposition, for the punishment of the insolvent debtor, was one, however, at which he could not help expressing his surprise, as well from the nature of the proposition itself, as that it should have come from one so intimately acquainted with the laws of the country as the learned Serjeant. If a fraud was committed, he would ask, were there not penal statutes by which it was punishable? Could any thing be so incongruous as the principle of ascertaining the degree of a man's guilt by the number of shillings which he was able to pay his creditors in the pound? The House he was sure would never accede to this principle. What was the learned Serjeant's remedy for the unfortunate debtor? Why, to throw the burthen of reproof upon the debtor. This, however, was done by the present act, one half of which was occupied with clauses to prevent frauds. He decidedly condemned the notion of punishing a man for insolvency, except where the fraudulent or dishonest motives were most explicitly ascertained. He should not oppose the introduction of the Bill, because he was really anxious to see how the learned serjeant had defined the cases of fraudulent and dishonest insolvency.

Mr. Lockhart

said, that the description of persons whom his hon. and learned friend was desirous of punishing, were not those who committed what were termed legal frauds, and who would, of course, be subject to the laws already in force for preventing such crimes; but it should be recollected that there were many frauds which did not come under the head of legal frauds, and which it was extremely desirable should not pass off with impunity. Of this description were those sorts of frauds which were committed by persons assuming false appearances of respectability, and inducing tradesmen to give credit, which, under other circumstances, they would not have given. It was the prevention of these practices his hon. and learned friend had in view, and therefore it was that he was anxious to fix such scales as would enable a due discrimination to be made between the fraudulent and the honest debtor. But the Act as it now stood was only for debauching the principles of a debtor for two or three months, and then setting him at liberty, to the injury of his creditors. Another detect of the Act was, that it made no distinction between the debtor who put his creditor to all manner of vexatious law expenses, and him who at once suffered judgment to go by default. He thought, too, it was a source of great regret, that there was not some mode of recovering small debts, of ten or twenty pounds, less expensive than the present means, by which an expense of 40l. or 50l. was often incurred. It was a fact, that from every cause which was carried into a court of law, not less than thirty persons received fees. This circumstance reminded him of a caricature of the inimitable Hogarth, in which all the powers of the engineer were represented as being applied to draw a cork from a bottle. The hon. gentleman said, it was strange, that in preparing Insolvent Acts, nobody had said a word about those debts which arose from, some species of wrongs, called malicious injuries, which a man may commit against another almost with impunity. Such were those of atrocious battery, or breach of promise of marriage, for which a man, after being convicted in large damages and imprisoned, got free at the end of three months, the same as if he owed only a simple debt. But the greatest injury the act did to trade was, the putting an end to all final actions; for nobody would think of prosecuting a man to recover a small debt, when he knew that the defendant could run him to great expense, and then throw himself in prison. After several other observations in favour of the proposed amendments, the hon. gentleman concluded, by expressing his confidence that they would have the effect of stemming the tide of dishonesty amongst the middling classes of society, and restore principles of equity and justice between man and man.

Mr. Abercrombie

thought that the learned serjeant ought to have deemed it incumbent upon him to show that the Bill as it now existed, had been found inefficient for the purposes for which it was intended. The Bill, however, provided that the judgment which discharged a debtor should be revoked, if within a year it could be proved that he had been improperly discharged; yet the learned serjeant had not said that a single case of such revocation had occurred. In point of fact he was making a law to punish a man for all the casualties and misfortunes of life, but if he was well off, to prevent him from punishment. It was in order to remedy this very evil that the temporary Insolvent Acts had gained the attention of Parliament. The debtor was not the only person in fault. It was well known that a very large proportion of persons were brought into this situation by those who were endeavouring to establish themselves in business, through giving every facility to credit, and who, if they were not successful, could avail themselves of the laws of bankruptcy. But those persons who conducted their business with caution, had never experienced any of the consequences expatiated on by the learned serjeant. On the whole he thought that he had made out no case whatever for interfering with the Act.

Mr. Hurst

expressed his admiration of the present Insolvent Act, which he thought sufficiently effective without any amendment. It had fallen to his lot to sit as chairman under the Act, and from his own experience, he could state that every means were taken to prevent the discharge of fraudulent debtors. In the whole county of Sussex the discharge of but five persons had been opposed.

Mr. Serjeant Best

said, that the last observation of the hon. gentleman who had just sat down, afforded the best argument for his motion, inasmuch as by the Statement he had made, that but five persons had been opposed in the whole County of Sussex, the evil arising from persons removing from distant county gaols to the metropolis was rendered manifest. The learned serjeant replied to the objections that had been made against his proposed Bill, and complained of being misunderstood by those who contended that the object of the Bill was to punish insolvency. It tended merely to discriminate between this insolvency which was unavoidable, and that insolvency which was the result of misconduct.

Mr. Baring

concurred in the general principles of the present Bill. If the learned serjeant had left it to its course of operation for a year or two more, its good or bad effects would be more evident. Before any alteration in the Bill had been proposed, he should have been glad to hear that a committee had been appointed to examine the subject thoroughly.

Leave was then given to bring in the Bill.