§ The Solicitor GeneralI rise with much reluctance at this late hour (one o'clock), to trespass on the attention of the House; but as I have been taunted by several hon. Members for postponing this Motion, and the delay which has already arisen has occasioned great disappointment out of doors, I must now beg to be permitted to give a short outline of the measure which I have to propose for abolishing imprisonment for debt, and for reforming the Law of Debtor and Creditor in this country. If I have the honour to obtain leave to bring in the Bill, and it is read a first time to-night, I shall name a distant day for the second reading, so that Members may be fully acquainted with its details before they come to the discussion of a plan of such importance and novelty. I could not venture simply to recommend abolishing imprisonment for debt, without substituting new remedies to enable the creditor to obtain satisfaction from the property of his debtor. The direct modes by which the property of the debtor can now be discovered and seized are so defective, that, till they are altered, it is probably necessary to give a power to imprison his person for the purpose of indirectly reaching his property, and compelling him to do justice.
786 The object of the law upon this subject ought to be to enable the creditor, upon his debtor refusing payment, first to ascertain and record his debt by the judgment of a Court, and then to obtain satisfaction from whatever property the debtor may possess, as expeditiously and at as little expense as possible. While the debtor is solvent, he must be forced to pay every creditor according to priority of demand and diligence; and if he be insolvent, he should be deprived of the administration of his property, that it may be divided rateably among all his creditors. Where he acts honestly, and makes a full disclosure and cession for their benefit, he ought to be discharged; as, if he contracted his debts with an intention and reasonable prospect of punctually paying them, and he is prevented by unforeseen misfortunes from doing so, he fulfils his obligation by surrendering the whole of his property, and he should be permitted to obtain his release without any unnecessary harshness. But the frauds of debtors must be guarded against; and if they buy goods with intent to cheat, if they secrete their property, or if they abscond from their creditors, they ought to be punished as criminals.
On these principles, I think imprisonment for debt may be abolished. On these principles the Bill has been framed which I have now the honour to propose. It originates in the labours, and I am happy to say, it has the approbation, of the Common Law Commissioners, to whom the country is already so deeply indebted for the improvement of our jurisprudence.
The first part of the plan is to allow any holder of a bond, bill of exchange, or promissory note, to have immediate execution,—when there is no question as to the genuineness of the instrument, and there is no reasonable ground of defence. Such is at present the law of Scotland, of France, and, I believe, of almost every other commercial nation. But, in England, the debtors upon such instruments may compel the creditors, before being entitled to process for obtaining satisfaction, to file declarations and replications, and to go to trial before a Jury, and to bring witnesses to prove facts about which there is no real dispute, although when the trial comes no defence be attempted. The consequence is, that no inconsiderable portion of the time of the Chief 787 Justice of England is occupied in trying undefended causes; great delay, vexation, and expense are occasioned unnecessarily; and the fund is often squandered among lawyers which ought to have been applied in the payment of just debts. I propose that, upon an affidavit being made of a party being indebted on a bond, bill of exchange, or promissory note, there shall be judgment and execution in a certain number of days, unless security be given absolutely to pay the debt and costs, or a Judge shall determine that there is reasonable ground of defence.
The property of the debtor is the only source from which satisfaction can be made to the creditor, and imprisonment for debt can only be justified as a method of getting at that property. It is found, however, in many cases, wholly ineffectual. The debtor taken in execution, goes to a prison, takes a house within the rules, conceals his property, lives luxuriously, and sets his creditors at defiance. If, indeed, his debts do not exceed 300l., he may be brought up under the Lords' Act, and compelled to make a disclosure and assignment of his property at the peril of transportation. But, strange to say, in a country which boasts of equal laws, there is no effectual remedy against him who owes much, and has the ability, without the inclination, to pay. I propose that in every case, on judgment being obtained, and a refusal to pay,—whatever may be the amount of the debt or damages, the debtor may be summoned before a Judge, and compelled to make a true disclosure of his property upon oath. If he fails to do so, he will be sent to prison as a criminal, to remain in close confinement till he conforms to the law such property as he discovers, or a sufficient part of it, the Judge will immediately assign to the creditor in satisfaction of the debt. On security being given, the Judge may have power to give a reasonable time for the payment of the debt, or to direct that it shall be paid by instalments. If the debtor makes a full disclosure of his property, and acts honestly, his person is free.
The next object of the Bill is to afford the creditor a remedy against every species of property belonging to the debtor. At present only half the freehold land can be seized unless there be two Judgments of the same Term, and copyhold land cannot be at all touched. Funded property is protected from process 788 of execution; and bonds, bills of exchange, and such securities, are called choses in action, not bona et catalla and, therefore, cannot be sold by the Sheriff. There is no reason for such distinctions, and they ought to be abolished. While an honest debtor, stript of all his property by unforeseen events over which he had no control, may be hopelessly immured in a gaol, will you suffer a man with 5,000l. a-year in copyhold land, or in the three per cents, to cheat a tradesman by going abroad or residing within the rules of the Fleet?
The next provision of the Bill is for the benefit of unfortunate and honest debtors, by carrying into full effect the principle which we have partially adopted from the civil law, of the cessio bonorum. At present, before a party can be discharged by the Insolvent Debtors' Court, he must be arrested and go to prison, and when liberated, his future effects remain liable for his debts. This is a harsh proceeding towards a man who has committed no fault, and is willing to do what is just; a person can hardly be the inmate of a gaol and leave it without contamination,—neither degraded in his own estimation nor that of others; and in going through this form of imprisonment and liberation a most enormous expense is incurred, which, of course, is all abstracted from the fund that ought to be divided among creditors. The insolvent, when discharged, feeling that if he subsequently acquires property, he is working for others—is generally listless, idle, or profligate for the rest of his days. The Insolvent Debtors' Court has, without reason, become exceedingly unpopular in this country. The Judges who preside there are learned, intelligent, and honourable men. The fault is not in them, but in the system of law which they have to administer. I have to propose, that hereafter a man who finds that he is unable to pay all his debts in full, but wishes to cede all his property to be rateably divided among his creditors, shall be permitted to do so voluntarily, without being cast into prison; and that if he makes a full disclosure and cession, it shall be lawful for the Judge under whose jurisdiction the proceeding has been conducted, and a Certain proportion of his creditors, to grant him a certificate by which be will be entirely exonerated from all his past engagements, and thus beginning the world 785 anew, he may avail himself of the bounty of his friends, and of his own industry, skill, and talent, to regain his station in society, and to provide creditably for his family. This will assimilate the situation of common debtors to that of traders subject to the Bankrupt-law. The legal definition of those traders is extremely arbitrary and capricious, and there seems little reason why there should not be one uniform system of insolvent law for all classes of the community.
So much for honest debtors. To fraudulent debtors I wish no tenderness to be shown; being fully convinced that there is more injustice on the part of debtors than of creditors, and that swindling produces more misery than an oppressive use of the power of imprisoning for debt. At present a single individual may buy goods on credit to any amount with the determined purpose of never paying for them but of selling them at a sacrifice for ready money and absconding with the proceeds; he may so abscond; or if arrested, and seeking the benefit of the Insolvent Debtors Act, he may wilfully make away with his property, or render a false account of it—without being directly liable to be punished for any of these misdeeds. That he may prey upon society with impunity, therefore, he has only to take care that he does not so associate himself with others as to be liable to be indicted for a conspiracy. To check such practices it is proposed to enact that it shall be a substantive misdemeanor, liable to be punished by fine and imprisonment, for any individual, under pretence of carrying on business in the ordinary course of trade, to obtain on credit any goods with intent to defraud the owner thereof; or to assist in disposing of goods so obtained; or to make any fraudulent grant or conveyance of property with intent to defraud creditors; or after petitioning to be discharged, to render any false account; or after judgment has been obtained against him by any creditor, to abscond or conceal himself with intent to defraud such Creditor or avoid making such disclosure of his property as by law is required.—I cannot help entertaining a sanguine hope that these provisions will have a powerful tendency to deter unprincipled men from contracting debts which they have no means or wish to pay. From the mere power of summoning and examining after 786 judgment obtained, much may be expected. At present the person about to contract a debt fraudulently, knows that unless he chooses to petition the Insolvent Debtors' Court, not a question can be put to him; and before he goes through this ceremony, he has taken care to waste or to secret the whole of his property—for which reason it seldom happens, that there is a dividend for the creditors of even one farthing in the pound.
I now come to the most important part of the Bill, which is for abolishing imprisonment for debt, except in cases of fraud, and this not only on mesne process, but likewise in execution. It does seem extraordinary, that the power of imprisoning for debt on mesne process, which was unknown to the common law, should have been introduced and permitted so long in a country professing to have such respect for personal liberty. Every man not having privilege of Parliament, is at the mercy of every other man, and without any authority from any tribunal or Magistrate, and without any evidence of any debt, maybe arrested and imprisoned for any sum; being left, when his credit is ruined, and he has suffered all the mischiefs of long and unjust confinement in a gaol, to the mock remedy of an indictment for perjury, or an action for a malicious arrest. There can be no doubt that this power has often been abused for the purposes of oppression and extortion. Upon an arrest on mesne process, bail may be given, if bail can be obtained; but will the House believe, that the expense of so giving bail exceeds 300,000l. a-year? And by so much are creditors prejudiced, for the benefit of bailiffs, and the lower class of legal practitioners. Bail being given, the plaintiff" has gained but little, for there may at any time be a render to prison in discharge of the sureties, and he has got nothing but the person of his debtor, whom he is not allowed to cut into pieces, or to sell into slavery. An arrest may sometimes prove advantageous to the first creditor who resorts to it, but it is unjust to the others, for it generally leads rapidly to bankruptcy; and while he is paid in full, they who have shown forbearance, must be contented with a slender dividend.
Imprisonment for debt under process of execution has not generally been so much reprobated; but, upon due consideration, it will not be found less objectionable. The only legitimate, and the only recog- 787 nized object of it in this country is, to enable the creditor to get possession of a sufficient portion of the substance of the debtor to satisfy the debt. It is not considered as punishment for the offence of being poor. But how is this object attained by the imprisonment of the debtor? Suppose that he is utterly destitute of property; suppose that he has a little, which he honestly wishes to yield up for the equal benefit of his creditors; suppose that he has sufficient property which he is dishonestly determined to conceal;—in each of these cases, where is the profit of mere imprisonment? Will it not be much better, according to the plan I have proposed, to allow voluntary cession to the honest debtor, and to summon and examine every man against whom a judgment has been obtained, with a power of directly assigning his property of every description, and of treating him as a criminal, on proof of fraud?
There is one occasion where imprisonment for debt may be fairly resorted to; and that I mean to retain and improve—where the debtor, instead of meeting his creditors and disclosing his property, tries to abscond from them, often carrying along with him the money of which he has defrauded them. In Scotland, arrest is admitted under such circumstances, even on mesne process, and on oath being made that the debtor is in meditatione fugœ, a warrant for his arrest is granted, commonly called a fugy warrant. In England, an arrest on a capias ad respondendum is frequently found ineffectual for this purpose. A merchant at Liverpool may discover that a person who is indebted to him is to take his departure next morning with considerable property in a ship for America, to return no more. He can only write to London for a writ; but before it arrives, the fugitive is beyond reach of process. I propose, that wherever a creditor shall go before any Magistrate, and swear to the debt due to him, and by affidavit state facts from which it may be reasonably inferred that his debtor is about to abscond with intent to defraud, a warrant to arrest may be granted, which may be immediately executed. If this be before judgment, bail must be given for the debtor's appearance, should there be judgment against him; if after judgment, he may be immediately examined respecting his property, and security may be required that he shall be forthcoming from 788 time to time, till the Judge certify that he has conformed to the law.
Imprisonment for debt will thus be permitted only in the rare cases, where the debtor is justly treated as a criminal, on strong presumptive evidence of fraud. And, what a mass of human suffering will be put an end to! At this late hour, will not trouble the House with returns from the various prisons in England and Wales; but I may venture to say, that every considerate man must be shocked and grieved by finding the immense numbers who are yearly immured in the gaols of this kingdom for debt, to the destruction of their credit, to the corruption of their morals, and to the utter ruin of their usefulness in society. Many persons in trade, who are in the habit of selling on credit, and shopkeepers in particular, I am aware, are exceedingly alarmed by the prospect of losing the power of arrest; but I am persuaded they will find that they have more than an equivalent in the new and effectual remedies afforded to them against the property of their debtors; and if they should become a little more cautious in inquiring into the circumstances and character of those to whom they give credit, perhaps it may be nothing the worse for the community, or for themselves.
I have been strongly urged, in taking away mesne process against the person,—by way of substitute, to allow it against the goods of the debtor; but, after great consideration, I have been obliged to dismiss this suggestion as inexpedient; for trade in this country could not be carried on, if a lien on goods might be acquired by a simple affidavit of debt; and as attachments against the goods, if permitted, would be far more numerous than arrests of the person, the expense of giving bail or security would be still more enormous.
I will not further fatigue the attention of the House. I am conscious of the disadvantages under which I have made this statement; but, defective as it is, I hope the House will see, that the plan, a faint outline of which I have described, deserves at least to be received and considered. Therefore, with sincere thanks for the great indulgence which I have experienced, I shall conclude by moving for leave to bring in a Bill to Abolish Imprisonment for Debt, except in cases of fraud, and for Amending the Law of Debtor and Creditor.
§ Mr. Humeexpressed his thanks to his Majesty's Government for the introduction of the present measure, which, if carried, he was satisfied would be productive of great benefit, as well to the creditor as the debtor. He hoped his hon. and learned friend would lose no time in forwarding it, so as, if possible, to pass it during the present Session.
§ Sir Robert Inglisobjected to a measure of such vast importance to the trading interests of the country being discussed at so late an hour, and suggested the propriety of ample time being afforded in order to enable those parties whose interests it principally affected to consider its provisions.
§ Mr. Shawcould assure the House, that the introduction of the measure before them was viewed by the tradesmen of the metropolis, whom it was likely most especially to affect, with feelings of the greatest apprehension. The generality of them were of opinion, that its enactments would shake all credit in the country. For his part he could not see how any of its details could be carried into practice.
§ Lord Althorpexpressed the happiness it gave him to be a party in the introduction of such a measure as his learned friend had just detailed. He was convinced it would work in every respect most beneficially.
§ The Solicitor Generaldoubted much whether the present Bill could be extended to Ireland, but admitted, that if it were, when carried into effect in England, found to work well, no time should be lost in proposing the introduction of a similar measure for Ireland.
§ Leave given; the Bill brought in, and read a first time.