HC Deb 18 March 1823 vol 8 cc609-15
Mr. Peter Moore

rose, for leave to bring in a bill for the repeal of the Insolvent Debtors' act. Of the evils occasioned by the act, no man could doubt, who was aware of the fact, that five farthings in the pound was the whole amount of dividend received from the estates of those who had taken the benefit of it. He might be asked, why he did not move to go into a committee upon the act, instead of moving to repeal it? There had already been 200 committees upon it; and the result which all of them had come to was, that they did not know how to remedy its evils. Even his noble friend (lord Althorp), who lived only to benefit mankind, would confess, that his object in passing this bill had been completely disappointed; for, instead of relieving the unfortunate debtor, it served to form the basis of, a system of fraud, profligacy, and perjury, such as had never before been witnessed.

Lord Althorp

could not agree to the repeal of these acts, unless a new act was brought in to remedy the evils which they were said to have created. He was surprised that the hon. member should have repeated the statement of five farthings in the pound being the whole amount of dividend received under the present acts. The return to which the hon. member alluded, was made under the act as it existed before it was amended. The present law was founded on a very salutary principle; but he would not deny that, in its details, it might require several amendments. He was, therefore, glad to hear, that the solicitor-general had pledged himself to take it under his consideration. He wished the House would compare the law as it now bore upon insolvent debtors, with the one which had formerly existed regarding them. Formerly, the creditor might imprison his debtor for life, and the imprisonment served as a discharge for the debt. The consequence was, that the gaols became filled by degrees; and acts were constantly passed to empty them. He was of opinion that, under the present law, the confinement was not long enough. He likewise thought that it would be a considerable amendment of the present system, if a power were given to a certain number of creditors to object to an insolvent's discharge.

Mr. Wynn

said, that when the small sum recovered from insolvents under the present act was spoken of, they should consider what would have been the sum recovered if the present law had not passed. Under the old system occasional insolvent acts were passed by which the gaols were emptied of debtors without any examination; so that the practice was constantly resorted to by the debtors of suffering a mere simulated confinement, in order to get rid of the claims of their creditors. He was glad the solicitor-general had undertaken the amendment of the act; as he could by no means agree to abandon the principle of it.

Mr. Abercromby

was convinced, that no one who was acquainted with the ancient law on this subject, would assent to the motion. He was, however, free to confess, that the existing law stood in need of amendment, and that the House was bound to provide some improvement of it, by which equal justice might be done both to the debtor and to the creditor. The House, after having so often heard the statement, that only five farthings in the pound had been received from the estates of insolvent debtors, would be surprised to learn, that there was now 10,000l. in the hands of the assignees of the insolvent court, which nobody had come forward to claim. The reason of this might be, that the dividends in question were so small as not to be worth claiming; and that circumstance might arise from most of the parties who took the benefit of these acts being in reality insolvents. He was convinced the salutary principle of this bill would in time be fully recognized by the people of England. He felt that conviction from knowing, that in Scotland, where the law of debtor and creditor was much more lenient than it had been in England, the cessio bonorum was a measure to which the people had clung with great tenacity.

Mr. Hobhouse

hoped his hon. friend would withdraw his motion. It had been stated, that there was 10,000l. now lying unclaimed in the hands of the assignees of the insolvent court. He did not think this circumstance very singular, when he recollected that the sums claimed were millions, and the dividends unclaimed only as many thousands. Besides, the insolvent court was a very expensive one. The fees levied in it absolutely swallowed up all the property that came into it. A paper had been put into his hands by one of his constituents, who had unfortunately come into the insolvent court. His creditors were, however, so satisfied with his conduct, that they consented to his discharge, after the ordinary forms had been gone through. He was accordingly discharged; but a paper had just been delivered to him in regular form, in which he was made the debtor of the attorney of the court for the sum of 42l. 1s. 10d.; the consequence of which was, that notwithstanding the clemency of his creditors, he expected to be arrested tomorrow at the suit of the attorney. Among the items of the bill were—"Attending, taking instructions for your schedule, 6s. 8d.;"—"Drawing same, 10l. 10s.;"—"Fair copy of schedule, for your own use, 3l. 10s." He did hope, that when the solicitor-general amended this act, he would do something to remedy abuses like these.

Sir. R. Wilson

said, that though his constituents had met to consider of these acts, there was not one of them who had held up his hand for the repeal of the principle on which they were founded.

Mr. Bright

thought that some means might be found of conciliating the principle of the Insolvent acts, with security to creditors. Imprisonment, for example, might be proportioned to the amount of the debt: a long period might be awarded for a large debt, and a smaller period for smaller debts. The principle of the cessio bonorum was good; but the attempt to enforce it, had failed. The objection of the commercial part of the world was, not that the law was bad, but that it was inefficient, and that it encouraged fraud. He was of opinion, that the Habeas Corpus should be taken away, in order that the debtor might continue imprisoned in the neighbourhood where his character was known. Debtors ought not to be allowed the rules of the prisons before they appeared to take advantage of the act; and when remanded, they ought to remain in the power of the court, without any creditor being able to grant a discharge. The system of appointing assignees was complicated, and required revision. There was also a species of fraud now prevalent; namely, accommodation bills. The court should be instructed to judge of this species of fraud in insolvents; or some other court should be appointed for this purpose.

Mr. Sykes

said, the question was, whether the Insolvent act should be totally repealed, or only amended. He was in favour of the latter. He complained that the provisions of the act before magistrates in the country were executed in a very loose way. The debtor was discharged almost without inquiry, as opposition was ineffectual.

The Solicitor General

said, that the feeling of the House was clearly in favour of the principle of the bill. If, however, the motion of the hon. gentleman were carried, the future effects of an insolvent would not be liable to his creditors, because that provision of the existing law would be repealed. Besides, every individual discharged, and now able to plead the statute in answer to a renewed claim, would be deprived of that protec- tion. A difficulty would also arise, as to the property of insolvents now in the hands of assignees. These observations Showed, that the repeal was impossible; and, as to the necessity of doing so, it was to be recollected, that in any new measure many of the present provisions must of course be revived. The only practicable method was, for a number of competent individuals, in the first instance, to investigate the defects of the present bill. In the petitions upon the table he had looked in vain for any useful suggestion; and on inquiry how the insolvent law stood in Ireland, he was told that neither debtor nor creditor had reason to complain. On looking at the acts, therefore, for the two countries, he was surprised to find that they were in all respects similar. With regard to the evils growing out of the present law, he was satisfied that, though some might exist, they had been very much exaggerated. His principle was this—that where a debtor had conducted himself fairly and honestly, without incurring claims he had no prospect of satisfying, that he ought not to be subjected to imprisonment—all his future property should be liable, but his person ought to be free. That principle he could never, abandon. Imprisonment in this country, was a punishment for crime; and to allow imprisonment for debt, was to make the creditor an interested party, a judge in his own cause, deciding without inquiry, and punishing without appeal. He hoped, therefore, that the House would support lain in improving the law, upon the principle he had stated. As to fraud, it seemed to him, that the provisions of the act were extremely well calculated to prevent and to detect it. Most extensive powers were given to the commissioners for this purpose; but the fault lay in the inertness of creditors, who had no right to turn round and assert, that frauds were committed with impunity, when they themselves neglected the means of detecting them. It was a mistake to say, that the debts in the schedule amounted to ten millions, while the sum divided did not exceed 60,000l. Many of the debts were of course, upon bill transactions, and they were necessarily multiplied, often ten fold, in order to include all the indorsers who might have a claim upon the insolvent. He thought that no argument could fairly be derived from cases of bank ruptey. An honest man did not go to prison until he had nothing left to satisfy his creditors; so that he could not give any account of assets; while a man was often made a bankrupt, who possessed large funds. No solicitor would work a commission, unless there were considerable assets. He did not mean to withdraw the pledge he had given of bringing in an improved measure. He would set himself to consider what frauds had been practiced, and the best means of preventing and detecting them; and, after he had so done, he would submit the result to the House.

Mr. Ellice

concurred in the general principles stated by the solicitor-general. He congratulated the House and the country, that the law officers of the crown had pledged themselves to frame a measure to remedy the evils of the existing act.

Mr. Hume

thought the enormous expense of proceedings in the Insolvent Debtors' court, were worthy of the serious attention of the solicitor-general. If the law gave creditors no power over the persons of debtors, they would be more cautious in trusting. He thought it would be for the advantage of debtor, the creditor, and the public if imprisonment for debt were wholly abolished. But, while the House sanctioned the principle of not detaining people in prison for debt, he was surprised they should permit the crown to imprison its debtors for life. In Scotland the case was different. He could conceive no worse means of getting payment of a debt, than to confine individuals fur 10, 15, or 20 years. It threw into the hands of government a power of confining for life an individual obnoxious on account of his political principles, and of letting those at large, who would purchase their liberty by subserviency. It was a cruel thing to confine a poor wretch for a paltry debt of 10l., and to allow such a defaulter as Mr. Theodore Hook to go at large.

Sir J. Newport

explained the operation of the Insolvent Debtors' act in Ireland. No complaints were made in that country. The people were not much disposed to give credit; and it was from the facility of giving credit, that most of the evils arose.

The Solicitor General

said, that the bill of costs complained of by an hon. member did not affect the constitution of the court. It was merely a bill between solicitor and client.

Mr. Hobhouse

said, it was the bill of one of, those attorneys to whom the forms of the court obliged persons to apply. The bill was made out from the printed regulations; and it was so far a recognized bill, that the debtor might be arrested at any moment for its amount.

Mr. W. C. Wilson

wished that en adviser, in the way of amicus curiœcould be appointed to assist country magistrates who were called upon to sit upon questions of insolvency.

The motion was then withdrawn.