§ The Chancellor of the Exchequer
rose, in pursuance of his notice, to move for leave to bring in a bill to amend the law with respect to clerical members of joint-stock companies. He felt it necessary to make this motion in consequence of a recent decision by the Court of Exchequer, to the effect, that it was unlawful for 817 a clergyman in orders to be a member of any joint-stock company. It appeared that in the year 1817, a bill was introduced into the other House, and afterwards passed into a law, prohibiting all spiritual persons from engaging in any trade for gain or profit, and imposing a penalty upon any transgressor of the law. Not only was that penalty imposed, but it was enacted, that the acts of any company into which such spiritual persons had been introduced, were null and void. This was the present state of the law, and the result was, that if any clergyman became a proprietor of stock in any of those companies, not being charter companies, but joint-stock partnerships, that the companies in question would be incapacitated from recovering any just or lawful debt; and it might be pleaded in bar, to any attempt made to recover a debt from persons who had been engaged in business with them, that there was a clergyman a member of the company, and that he was engaged in trading, contrary to the intent and meaning of the 57th George 3rd, and consequently they were not competent to recover a just debt. He believed that that construction which had been put upon the act was quite unexpected. No person ever supposed that the prohibition justly imposed upon clergymen trading for the purpose of profit was to be a prohibition against their investing money in any species of stock—in Joint-stock companies like any other stock. He repeated, that the bill he asked leave to introduce was founded on proceedings that had lately taken place in the Court of Exchequer. In the case to which he alluded, the Northern and Central Bank having taken proceedings to recover payment of a bill of exchange from a person of the name of Franklin, Mr. Franklin pleaded that there were two clergymen belonging to the bank, and consequently that the bank was not entitled to recover; and the Court of Exchequer held that that plea was good. He therefore trusted the House would see it was absolutely necessary that the law should be altered. The construction put upon the existing act was, in point of fact, a surprise on the whole world; and, in his opinion, it rendered the bill which it was his intention to propose indispensable. The consequence of the decision of the Court of Exchequer would be, not only that penalty and loss would be inflicted on a clergyman who might be a member of a joint-stock company, but penalty and loss would be inflicted on every individual who might belong to 818 such company. If, therefore, the case was important on the first hypothesis, it became doubly important on the second. It was not only on behalf of joint-stock banks that he asked leave to bring in this bill, but on behalf of all joint-stock partnerships; such as insurance companies, dock companies, canal companies, railway companies, &c, which would come within the decision of the learned judges of the Court of Exchequer. Were such a bill not to be introduced parties might be ruined to an extent scarcely calculable. To give the House some idea of what might be the result if the present state of the law were to be allowed to continue, he might state that there were no fewer than 108 joint-stock banks in operation, carrying on business through 474 branches, having a capital consisting of 2,776,000 shares, and a nominal capital of 66,000,000l. According to the decision of the Court of Exchequer, there was not perhaps one of those companies which would be able to recover a single debt. Having thus endeavoured to point out the inconvenience arising from the present state of things, he would now state the nature of the remedy which he proposed by the Bill in question. The House would see that the remedy must be retrospective, because if they were to proceed prospectively only, they would leave all the confusion incident to the existing state of the law, which he was anxious to remove. At present, if any man should become a shareholder, either by purchase or inheritance, though not a clergyman at the time, and should afterwards enter into holy orders, the whole proceedings connected with the establishment would be vitiated. They were, therefore, bound to legislate retrospectively in this matter. Was it to be allowed that a decision in the Court of Exchequer should vitiate all the proceedings and compacts of joint-stock banks up to the present hour? If so, a door would be opened to fraud, and considerable difficulty and derangement would be created in the commercial world. In bills of an analogous character, which had been introduced with a retrospective operation, it had been usual to introduce a saving clause with respect to existing suits; but he did not intend to introduce such a clause into this bill, as it would enable parties to defeat a contract by pleading a fact of which they were ignorant at the time the contract was entered into. He proposed to give validity to all contracts respecting joint-stock companies, not with- 819 standing the fact of a clergyman being a member of them. But at the same time he meant to introduce a clause enabling courts of justice to award costs to parties who had instituted proceedings on the faith of the existing law. These were the main provisions of the bill for which he was about to move. Although the bill was to have a retrospective operation, he did not mean that it should be perpetual. All that he intended to propose was, that it should last until the end of the next Session of Parliament. For that proposition there was a precedent. The same course had been adopted with reference to a bill of an analogous character introduced in 1823. A bill was brought into the House to prevent actions being brought against clergymen for non-residence; but the operation of the bill was limited to a certain period. For the same reason he proposed that the bill for which he was about to move should not be perpetual, although it should give a remedy retrospective in its operation, only saving to the parties who might have brought actions the right of receiving costs, at the discretion of the court. Having endeavoured to explain the objects which he had in view, he should now move for leave to bring in a bill to legalise certain contracts which had been or might be entered into by certain parties or shareholders of joint-stock companies.
§ Mr. Warburton
begged to ask the right hon. Gentleman whether it was his intention to introduce any clause to prevent clergymen from holding office as managers or directors of the companies in question?
§ The Chancellor of the Exchequer
replied, that there was no prohibitory clause in the bill at all. Its object was merely to give validity to certain contracts which had been made in ignorance of the law. If the House should deem it expedient to introduce such a provision as that adverted to by the hon. Member for Bridport, he (the Chancellor of the Exchequer) should be ready to discuss the question; but the present was not the proper time. The subject would be more properly introduced when the Church Bill, now on the table of the House, came under consideration. In that bill there were certain clauses to prevent clergymen from entering into trade; and, if it were considered expedient, a clause might be introduced to prevent them from becoming directors and managers of joint-stock companies. His 820 hon. Friend must be aware that at the present moment clergymen were not prohibited from being members of chartered companies. If his hon. Friend would advert to the University Life Insurance Company he would find that the Archbishop of Canterbury was at its head, that the vice-presidents were all bishops, and that many of the directors were clergymen of the established church. Whatever the policy of the proposition adverted to by his hon. Friend might be, he could only repeat that the present was not the proper time for considering it.
§ Mr. Thomas Attwood
hoped the right hon. the Chancellor of the Exchequer would reflect a little before he gave effect to such an ex post facto bill as that which he proposed. Forty years ago all joint-stock companies were deemed a nuisance by law, and the shares were not transferable. He trusted that the right hon. Gentleman would not persevere in his present proposition.
§ Leave given.
§ Bill brought in and read a first time.