§ Order for Committee read.
§ Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."1084
§ MR. GEACH
moved, as an Amendment, that the House be put into Committee on that day three months. He did so because no opportunity had been given for properly discussing the subject. But few Members, he believed, were acquainted with the provisions of this measure, and he himself knew hardly anything of its nature until it had been read a second time. Its object was to assimilate the law on the subject in this country to that of Scotland, in one particular, by providing summary means of procuring judgment on a bill of exchange, when dishonoured. It provided that, on registering the Bill, before a registrar to be appointed for the purpose, execution might be obtained, and a man driven into bankruptcy, or his effects completely sold off, within six days after the bill had been dishonoured. He regretted that the practice of the Scotch law in this respect, and its working in commerce, were not better understood in that House. It might have been found to be attended with advantage in Scotland, but there were circumstances peculiar to Scotland which might account for that, and the want of which in this country might disappoint the expectations of its promoters. One of these circumstances was the greater extent of the banking system in Scotland as compared with England. As regarded merchants and others in a large way of business in England, the measure was clearly unnecessary; for their position was such, that the moment their affairs wore a threatening aspect, they were obliged to communicate the circumstance to their creditors. The harsh operation of the measure would be most felt by persons in a smaller way of business; for it would certainly happen under this measure that a man with 30s. in the pound would be forced into bankruptcy, and though so well able to pay the claims upon him, his ruin would most likely be as complete as if his circumstances were less favourable. Under this Bill a man would be driven to register a dishonoured Bill; for, unless he did so, another party to it would come in and do so, and take advantage of him. To illustrate the want of necessity for this measure, he might state that, for a period of eighteen years, he had been manager of a joint stock bank at Birmingham, a town whose transactions were best fitted to illustrate the subject. During that period, 246,000 bills of exchange had passed through that bank, amounting in 1085 value to 20,000,000l., or the low average of 85l. each. Though the average was so low, only 30,000 of these bills had been returned, and the result of the whole was, that only in one single case had the bank to go into a court of law, and in eighteen cases only did they lose money, their total loss amounting to less than 2,000l. He contended, then, that the credit system of this country was a safe one, that the creditors had ample means already of enforcing their claims, and that a measure proposing so sweeping a reform in the law between debtor and creditor ought to have been preceded by the Report of a Commission specially appointed to investigate the subject. For these reasons he begged to move that the House go into Committee on the Bill on that day three months.
§ Amendment proposed, to leave out front the word "That" to the end of the Question, in order to add the words "this House will, upon this day three months, resolve itself into the said Committee," instead thereof.
§ SIR ERSKINE PERRY
opposed the Amendment, as the present Bill was a sound measure of law reform, and completely in accordance with the spirit of legislation of the present day. It was a mistake to represent it, as the hon. Member for Coventry (Mr. Geach) had just done, as a great change in the law; it did not at all alter the law as related to bills of exchange, but it enabled parties who were compelled to go to law to obtain their remedy in the simplest and most economical manner possible. This was the great object of all sound procedure, and it was entirely in accordance with the useful measure which had just passed through the committee of that House—the Common Law Procedure Act. What were the facts as regarded hills of exchange? It had been ascertained that out of one thousand actions, in not more than one was there any real defence; and the object aimed at was, to provide that in the nine hundred and ninety-nine defenceless cases, no sham defence or pleas for delay should be set up, or time and money be thrown away in unnecessary litigation. He had listened attentively to the arguments of the hon. Member for Coventry, and he had also made himself master of the objections which had been urged out of doors against this Bill; add they all reduced themselves to one position, namely, that a debtor who has entered into a solemn engagement to pay a sum of money on a certain day, 1086 should have what the hon. gentleman called a "breathing time" allowed him. But this principle was wholly unsound, and opposed to the clearest principles, both of good faith and expediency. What is desirable is, that the contracts entered into between man and man should be observed spontaneously and with punctuality; but if the assistance of a court of justice is to be called in, it should be done with as much efficacy and with as little vexation and expense as may be. The true function, in fact, of a court of justice in civil matters is to give effect to the contracts which individuals chose to enter into with one another.
In that system of laws which Lord Lyndhurst once pronounced to be the noblest monument of wisdom ever erected by man—the civil law—the prætor used to inscribe on his yearly album this principle as the guide to all his proceedings: Pacta conventa servabo ait Prætor; and all our legislation, as to courts of law, ought to aim at embodying the same principle. Unfortunately, in our common-law courts, a narrowness of interpretation and a sacrifice of substance to technicalities, had too often prevailed; and courts of equity, with their larger views and clearer perception of the true functions of a court of justice, had become necessary; but the reforms of the present day have the scope of enabling the truth to be arrived at in every kind of court, in the most simple and effectual manner that can be devised.
The hon. Member for Coventry had taken up a very popular side, when he pleaded so earnestly for debtors, and for leniency towards them; but nothing was so dangerous as to be carried away by feeling in a question to be decided only by reason and experience. He (Sir E. Perry) had had much to do in adjudicating between creditor and debtor, and in the court over which he had presided for many years, there was a summary jurisdiction which enabled the judge to give time to the debtor to pay his judgment debt. But he was satisfied, from long experience, and after many ineffectual attempts to temper justice with mercy, that it was an improper interposition of the judge to interfere between the parties as to the contracts they had entered into. He is never in the position to know exactly what the condition of the parties is; and often, when he flatters himself he is performing an act of the highest grace, he is committing great injustice, and is, in fact, setting aside the 1087 law which parties have prescribed to one another, and which it is his duty to administer.
The sound principle, therefore, is, that debtors and creditors should make their own terms with one another, and that courts of justice should only interfere to lend their machinery and enforce the contracts when required. In this observation will be found a complete answer to the argument so much relied on by the hon. Member for Coventry, derived from his banking experience at Birmingham. He has stated, that out of 30,000 returned bills, only eighteen actions had been brought, and that the rest were settled between the parties out of court. Assuming for a moment the correctness of his statistics—though one does not see how a bank, which looks to its own customer on a dishonoured bill, is able to ascertain the history of each bill after it leaves its own till and has been taken up by the discounter—still, exactly the same reasons which operate now to prevent creditors from pressing harshly on their debtors, will be in operation under this new Bill. There are laws stronger than any this House can frame, which are in operation to prevent oppression and undue harshness in cases of this nature—these are, the laws of human nature, self interest, and the regard for the opinion of one's neighbour, which intervenes to prevent creditors from ruining their debtors, that is, their customers, and from insisting on the letter of the law, when a little timely forbearance will strengthen and foster the healthy connection between them.
But the hon. Gentleman spoke with alarm of the extraordinary extent to which credit has spread itself in this country, and the danger to which it may be exposed by a measure of this kind. The House, however, I apprehend, will not listen to an argument in behalf of artificial props, or to anything which restricts the natural and healthy workings of society after its own spontaneous promptings. If numerous classes of the community give bills of exchange, and enter into solemn engagements to pay money which they cannot meet, the law ought not, by its vicious legal procedure, to encourage such rotten speculations. An argument from Birmingham on this subject, supported, as it seems to be, by the hon. Member for North Warwickshire (Mr. Spooner), is fraught with suspicion, and will carry little weight with the House. Indeed, he 1088 (Sir E. Perry) had been disappointed in finding such little validity in the objections of the hon. Member for Coventry; for he had understood that he bad a great case to bring forward against this Bill. The only plausible objection he had heard raised against the measure was, that it gave the holder of a bill of exchange a great advantage, by way of remedy, over a creditor on a simple contract debt. Undoubtedly, if any form of procedure could be devised by which judgment in an undefended action in every case could be secured to the creditor as speedily as under this Bill, it would be a great boon to the public. But an essential difference exists between a simple contract debt and a bill of exchange, which always has made the latter an effectual security. In the former, say an action for goods sold, everything has to be proved, the contract, the delivery of the goods, the conditions of sale, the amount of credit; in the latter, everything is specified and reduced to writing between the parties.
In the present measure the House has the satisfaction of knowing that it is taking up no speculative reform, but is adopting a practice which has been in force for 170 years in Scotland, where the system of credit and banking operations generally have taken a firmer and healthier root than in any other country in Europe. All the great commercial countries of the Continent—France, Holland, Belgium, Germany, and Spain—have adopted summary proceedings, with regard to bills of exchange; and it had occurred to him more than once, whilst presiding over a court of justice, to hear foreign merchants complain of being compelled to bring a regular formal suit in an English court of justice, and to be delayed for months, on a bill of exchange, when nothing, in fact, required to be proved.
He trusted, therefore, that the House would allow the Bill to go into Committee, and he would assure them, that, notwithstanding the long list of Amendments which had been suggested by the legal profession, there were only two or three points on which it would be necessary to take the opinion of the House. The substitution of attorneys for notaries had been proposed, but he believed the idea was abandoned by the hon. and learned Member by whom it had been made, and it was clearly unsound. Another proposition had been brought forward, that the office of registrar should be filled by one of the Mas- 1089 tern of the Common Pleas; but it was most necessary, for the due working of the Bill, that a separate officer should be located in the heart of the City, with no other functions to attend to; and not the least of the advantages attending this course would be, that it would enable all men of business to take the necessary steps on a dishonoured bill by their own clerks, and without any legal assistance. He had no desire to say a word against the profession to which he had the honour to belong, but he was satisfied that the interests of the public essentially required that they should never be compelled to call in a lawyer, unless a case for legal acumen and technical knowledge actually occurred.
Lastly, he would beg the House to observe under what auspices the Bill was introduced to them. It had passed through the House of Lords, where it had been supported by the Government, and had been submitted to a Committee of law Lords, including the Lord Chief Justice, Lord Brougham, and the Lord Chancellor, who had unanimously approved of it. The measure itself had emanated from a committee of London merchants and bankers, and had been discussed at public meetings at Liverpool, Leeds, Bradford, Manchester, &c., petitions from many of which places he had himself presented; and the other day the Lord President of the Council (Lord J. Russell) had presented a petition in favour of the measure from merchants and traders of the City of London, which, he had been informed was more numerously signed by members of the mercantile community than any petition which had emanated from the City of London during the last fifty years.
§ MR. SPOONER
said, he had no doubt that many bankers and merchants connected with the City of London were anxious to have this Bill passed, for he could easily conceive that those who were concerned in extensive bill transactions might be naturally desirous, if drawers of bills did not meet their engagements, to have the means of compelling them speedily to fulfil such engagements. The great evil of this measure, however, would be that it would force numbers of small traders into hasty bankruptcy—a result which might be avoided by judicious treatment on the part of the holders of their bills. The hon. and learned Gentleman opposite (Sir E. Perry) had said that debtors and creditors should be left to settle their own arrange- 1090 ments. That was his (Mr. Spooner's) opinion; but this Bill would interfere with those arrangements, for it would compel the holders of bills of exchange to proceed according to the provisions of the measure. The holder of bills of exchange would practically be compelled to adopt proceedings, because, if he did not do so, he would lose his claim on the collateral securities. They were told that the system proposed to be established by this Bill worked well in Scotland, but in Scotland there was no circulation of small bills of exchange. In England one tradesman drew a bill upon another, and passed it to a third, and it seldom came into a banker's possession until it had gone through a great many hands; but in Scotland the small bills were not paid away, but remained with the bankers until they were due. No case of necessity had been shown for the adoption of this Bill; he thought it would probably occasion very great evils, and he would, therefore, support the Amendment.
§ MR. WILSON
observed that it was a great error to suppose that small bills of exchange did not circulate in Scotland, for there was, in fact, no part of the United Kingdom where trade was carried on to such an extent by bills of exchange of small amount as in Scotland. He did not believe that the adoption of this Bill would lead to any diminution of the accommodation now afforded to customers, and he would, therefore, support the measure.
§ MR. JAMES MACGREGOR
opposed the Bill and expressed his opinion that Mr. Geach's very extensive acquaintance with banking and commerce entitled him considerable respect. He opposed the Bill on principle without asking any favour for debtors, but merely asking that all debtors might be put upon a legal footing. He considered that the law might very well be allowed to remain in its present state until another Session, and that if any Amendment were required it ought to be general, instead of being confined to bills of exchange, and thus giving a preference to the holders of such bills over contract creditors.
§ Question put, "That the words proposed to be left out stand part of the Question."
§ The House divided:—Ayes 56; Noes 30: Majority 26.
§ Main Question put, and agreed to.
§ House in Committee.
§ Clause 1.
§ MR. JAMES MACGREGOR
moved an 1091 Amendment, providing that the Bill should not come into operation until the 24th of October, 1856, instead of the 24th of October, 1854, as was proposed by this clause. He considered that a sufficient time would not elapse between the termination of the Session and the 24th of October next to enable the trading and mercantile classes of this country to become thoroughly acquainted with the provisions of the measure.
THE ATTORNEY GENERAL
suggested that bills accepted previous to the Bill coming into operation should be excepted from the operation of the Bill.
§ Amendment agreed to.
§ Clause, as amended, agreed to; as were also Clauses 2 and 3.
§ Clause 4 (appointing a registrar of protested Bills).
§ MR. MASSEY
thought it inexpedient to appoint a new officer, when there were already many officers of the Court of Common Pleas who were altogether underworked.
§ SIR E. PERRY,
in advocating the propriety of a new officer, explained that the new officer would not be paid by salary, but merely by fees. As to the Court of Common Pleas, there was no doubt there was too large a staff there both of judges and of officers, and that the fifteen judges might be advantageously reduced in number.
§ MR. BOWYER
pointed out that fees were as much a burden upon the country as salaries. The Masters of the Common Pleas at present received 1,200l. a year for doing very little, and the obvious propriety of the case was, that the junior Master should earn his salary by performing the functions created by this Bill.
§ MR. HENLEY
altogether objected to the appointment of a new officer, when there were five officers of the Court of Common Pleas who ought to have something given them to do, for their large, all but, sinecures. He also objected to pay the new officer by means of fees.
§ LORD JOHN RUSSELL
suggested that. as there were several other Orders of the Day, it would be better to report progress on this Bill.
§ MR. MACGREGOR
hoped that the further consideration of the Bill would not be set down for some occasion when the Government had arranged to have a majority present.
§ Bill reported; as amended, to be considered on Friday next.