§ Order for Committee read.
§ House in Committee.
§ Clause 128 agreed to.
§ Clause 129 (Securities may be purchased).
§ MR. CAYLEY
said, he thought that this clause gave unreasonable power to the Accountant General in Bankruptcy as regarded the investment of the large sums entrusted to him. This clause, in connection with the 132nd Clause, demanded, he thought, the gravest consideration.
§ MR. CRAWFORD
said, he wished to correct some misapprehensions which appeared to exist. The hon. Members for Newcastle-under-Lyne and Kendal stated the other evening that there were in the hands of the Bank of England, on an average, gross balances exceeding £100,000, belonging to the Court of Bankruptcy, and that the Bank derived, by the commission charged for the management of those funds, a sum varying from £3,000 to £4,000 per annum. Now, he (Mr. Crawford) had inquired into that matter, and he was enabled to inform the Committee that there was considerable exaggeration in those statements. Looking at the accounts in past years it appeared there had been on one occasion a balance of £161,000 in the Bank. In the course of a week that sum was reduced to £50,000, and in another week a further considerable reduction was effected. Not long afterwards the balance was not more than £420. It was equally untrue to say that the charge made by the Bank of England for the management of those funds was £3,000 or £4,000 a year—for example, the sum charged last year was only £2,203. Out of that sum the Bank had to pay the salaries of officers employed solely in the management of this branch of the Bankruptcy Court; to pay various incidental expenses, and, in fact, to maintain the whole expenses of an establishment for the purpose. Practically speaking the Bank derived next to nothing for itself for the management of this fund.
§ MR. MURRAY
said, the hon. Member for London (Mr. Crawford) evidently wag not aware of the Return of the Accountant 1991 in Bankruptcy, and which he now held in his hand. This Return showed that the sums received by the Bank on account of the Court of Bankruptcy in the years 1855, 1856, 1857, 1858, and 1859 exceeded £6,500,000, and the payments to nearly the same sum. The Return further stated that the average of the quarterly balances in those years was £83,700. The highest balance was in September, 1856, £166,247; the lowest in March, 1858, £26,369. In respect of remuneration, the hon. Member stated that the Bank received in 1859, £2,200; but the Accountant made it £3,160. The hon. Member was therefore greatly in error as to the amount of remuneration received for managing the account of the Court of Bankruptcy. The hon. Member for London was therefore not justified in charging himself and the hon. Member for Kendall with inaccuracy. He fully adhered to his former statement.
§ Clause agreed to; as were also Clauses 130 and 131
§ Clause 132 (If Securities at any Time insufficient to answer Demands, Deficiency to be made good by Parliament).
§ MR. E. P. BOUVERIE
said, the clause provided that the funds of bankrupt estates paid into the account of the Accountant in Bankruptcy should be invested in 3 per cent consols, and as this was for the security and benefit of the creditors it was only reasonable that they should run the risk of any fall in the value of the stock. The clause, however, gave a guarantee to the creditors that the Government would be responsible for any such loss—a proposition which he thought was highly objectionable.
§ MR. CAYLEY
characterized the proposition to saddle the public with the loss arising from an investment made for the advantage of the creditors as altogether monstrous. He was disposed to take the sense of the Committee upon the clause.
§ MR. VANCE
contended that if the general bankruptcy fund got the benefit of the interest, as he believed it did, the creditors ought in justice to be protected from any fall in the price of the stock. And if the proposition were not agreed to, the creditors should be allowed the interest that might accrue.
THE ATTORNEY GENERAL
said, the clause was word for word the same as the existing law on the subject, which had been in operation for some years. The real facts were those. The Accountant in 1992 Bankruptcy had received from day to day large sums, and consequently had always a large floating balance to his credit. The portion of it which he found it prudent to invest yielded an annual income of about £40,000. That sum of £40,000 was applied for the benefit of the Court of Bankruptcy, and was one of the chief sources of revenue which enabled him to abolish the onerous fees and impositions which were now charged to suitors. He therefore contended that as the profit was taken by the public, and applied to public purposes, the public was bound to guarantee the parties entitled to the money from the possibility of any deficiency. There was no likelihood, however, that the public would be called upon to sustain any loss in consequence of that guarantee.
§ MR. E. P. BOUVERIE
None but the creditors of Estates in bankruptcy were interested in the application of the fund. It was a question in which the public had no interest whatever. He protested against entering into unlimined guarantees for the benefit of creditors in the Court of Bankruptcy.
§ MR. LONGFIELD
said, that the Court of Bankruptcy was a court for the administration of justice in the largest sense of the word, and courts of justice should be maintained at the public expense. Since, therefore, the interest received from these investments went to maintain the court—the public really had the benefit of them, and consequently ought to bear any loss that might arise.
§ MR. BARROW
said, that the hon. and learned Gentleman who had just spoken was mistaken. The Bankruptcy Fund and not the public derived the profits made from the investments.
§ MR. AUGUSTUS SMITH
said, the profits never reached the public. The Bankruptcy Fund retained the profits, and the public by this measure would be bound to make good the losses.
§ MR. MALINS
said, that in the Court of Chancery every penny invested there went not for the benefit of the public, but for those on whose behalf it was invested. With respect to the fund of the Court of Bankruptcy, there was a fund invested, of which the public had the benefit, and as it was so large, he did not believe the public would ever be called upon to pay anything towards the administration of the affairs of bankruptcy.
§ Question put, "That the Clause stand part of the Bill."
§ The Committee divided:—Ayes 85; Noes 20: Majority 65.
§ Clause ordered to stand part of the Bill.
§ Clauses 133 and 134 agreed to.
§ Clause 135 (Released Commissioners' Salaries continued).
§ MR. PAGET moved as an Amendment to leave out the words "the full," and insert "two-thirds of the" in line 4, and at the end of the clause to add, "provided that in case he shall be called upon to perform any of the duties mentioned in section 4, he shall in such case, and so long as he shall be called upon to perform such duties, receive the full amount of his salary, payable in like manner." The reason why he proposed two-thirds was because he greatly objected to embarrass the fund with such heavy payments. The system was not adopted in the military profession, and he did not see why it should obtain in the legal. The system was objectionable to the country, and he thought that it was sufficient to do simple justice in the matter without conferring what would really be a boon.
§ Amendment proposed, in page 30, line 4, to leave out the words "the full," in order to insert the words "two thirds of the."
THE ATTORNEY GENERAL
said, the rule hitherto invariably acted upon was that, if upon public grounds, it was deemed expedient to do away with a public office, they could not do so justly without giving to the officer the full value of his office. He thought it would introduce a dangerous principle, if the House of Commons abrogated any office conferred by contract on individuals for life—or quamdiu se bene gesserint without giving full compensation. The 4th and 5th clauses of the Bill already passed, affirmed the principle that the Commissioners were entitled to their full salaries, and the House would act inconsistently in adopting this Amendment. He trusted the House would not lay down a new rule, which he thought would be disastrous to the real interests of the country.
§ MR. W. WILLIAMS
said, that the principle laid down by the hon. and learned Gentleman was quite new. He denied that there was any contract between the public and these gentlemen. It seemed as though lawyers were to be placed under a different 1994 rule than other men. He remembered the abolition of the Six Clerks. He proposed on that occasion that the retiring allowance of those Gentlemen should be £700 a year, but they were allowed to take away with them £6,000 or £7,000 a year from the public treasury.
§ MR. E. P. BOUVERIE
said, that he thought the hon. and learned Attorney General put the illustration a little too high when he compared these Gentlemen's salaries to private property. But with regard to the justice of the case, the whole of these five Commissioners had been Commissioners twenty-eight years ago, and the country had had the benefit of their services for that period. They were all competent to go on performing their work, and if an Act of Parliament deprived them of their offices it was but just that they should be fully paid. In a public point of view it was desirable not to be too niggard in such a matter, or otherwise officers whose places were to be abolished for the sake of some reform would set their faces against the proposed change, and prove great obstacles in its way.
§ Question put, "That the words proposed to be left out stand part of the Clause."
§ The Committee divided:—Ayes 77 Noes 43: Majority 34.
§ Clause agreed to.
§ Clause 136 (Salaries of Officers of the Court of Bankruptcy).
asked for an explanation of the latter portion of the clause, which provided that the annual sums now payable out of the Consolidated Fund for the use and purposes of the Court for Relief of Insolvent Debtors and the officers thereof, other than the Commissioners of the said Court, shall be paid in future into the Bank of England, to the credit of the Chief Registrar's account in Bankruptcy.
THE ATTORNEY GENERAL
said, that the Insolvent Court was entitled to an allowance in aid of its funds amounting to above £4,500 annually. It was not proposed to make any alteration whatever in the amount, but to transfer the sum to the credit of the new amalgamated jurisdiction. It was but fair that, as the Court of Bankruptcy was to assume the liabilities of the Insolvent Court, it should likewise obtain whatever advantages were attached to it.
§ MR. E. P. BOUVERIE
thought the right hon. Gentleman had been misled by some of the officials of the Court of Bankruptcy. There were no payments from the Consolidated Fund to the officers of the 1995 Court other than the Commissioners, but sums were annually voted in Supply to make good the deficiency in the funds of the Insolvent Court. As that Court was no longer to exist, he thought there was something objectionable in voting sums of money at the outset in aid of a fund which might no longer present a deficiency, and which, should it prove deficient, would have to be made good by a Vote in Supply.
§ SIR FITZROY KELLY
suggested the leaving out of the last portion of the clause. After a short discussion,
THE ATTORNEY GENERAL
said, he would strike out the latter part of the clause to which objection had been taken, and would bring up a separate clause, providing how much was to be taken out of the Consolidated Fund and how much was to be voted every year.
§ Clause, as amended, agreed to.
§ Clause 137 agreed to.
§ Clause 138 (Pensions and Retiring Allowances).
§ MR. E. P. BOUVERIE moved an Amendment, providing that the Lord Chancellor shall not have power to grant retiring allowances in cases of ill-health or permanent infirmity, except after twelve years' service.
§ MR. PEACOCKE
suggested that there should be some smaller amount of compensation where the period of service had been short.
THE ATTORNEY GENERAL
said, if the Committee thought it was necessary to insert a limit of time he would consent to insert seven years, though he thought that there might be some hardship arising even from this.
§ MR. E. P. BOUVERIE
said, he would consent to the limit of seven years, and withdraw the Amendment he had moved.
§ Amendment agreed to.
§ Clause agreed to.
§ Clauses 139 to 151 inclusive agreed to.
§ Clause 152 (Abolition of distinction be-between Trader and Non-trader).
§ MR. HENLEY moved an Amendment for the purpose of raising the important question whether this great change, applying the bankrupt laws to non-traders and traders alike, should or should not take place. He would state to the Committee two or three classes of per- 1996 sons who would be injuriously affected by it. It was most unjust by retrospective action to place some persons in a position of advantage and others in a position of amazing disadvantage, which was never contemplated when the parties contracted. A man's father might have died twenty or thirty years ago leaving an estate chargeable with various amounts, and that man, as was commonly the practice, might have raised money by mortgage on the property to pay off his brothers and sisters. It was a debt, because the man covenanted with the mortgagee to repay the money, as well as pledged the land for it; but it was a debt totally different in its nature from liabilities to his butcher or baker, because the creditor had a special security in the land for payment. A panic might arise—panics seemed to have their cycles, and appeared to come round every ten years. There was a panic in 1847, and another in 1857, when money was hardly to be obtained at all, and, if obtained, only at a most extravagant rate of interest. A person in the situation which he had described might be called upon in such times of pressure to pay off his debt. If he did not it was proposed that judgment might be recovered, and he might be made a bankrupt. He might be told that it was the ordinary case of a man against whom a judgment was recovered; but the screw in ordinary cases could not be compared with the screw of threatening to make such a person a bankrupt, to send him to prison, to seize everything belonging to him, even his most private papers, and to drag his wife into a court, which they had just heard was unfit for any one to enter. That was one class of persons, and a numerous one. A vast portion of the land of England was mortgaged under those circumstances, and it did not apply exclusively to men of high rank and station. He believed that the more they descended the scale the move was the laud mortgaged, and just in proportion as they descended the scale was the difficulty of raising money in times of pressure increased—especially as the usury laws were repealed. It must not be supposed that it was a question which only affected the higher classes. It affected every man—from the Archbishop of Canterbury to the lowest cottager—and such a change ought not to be made without great and corresponding advantages. He saw no objection to there being one Court instead of two. If a man wanted to petition the Court and to be wound up, let him be 1997 made a bankrupt and go to the Bankruptcy Court, but be saw no reason why they should include under the operation of the bankrupt law a class of persons who could not fairly be said to be insolvent debtors. Another class of cases was not unfrequent. A man bad a limited estate. He could not raise money by mortgage. He had perhaps improvidently been spending more than his income. He had to incur debts to put his family out in the world, purchasing commissions or educating them for professions. These debts were usually met by borrowing money on annuities. When the eldest son was twenty-four or twenty-five years of age an arrangement was often made by which the entail was broken, money was raised on mortgage, the annuities were discharged, and the family was again placed in easy and comfortable circumstances. How would the Bill affect persons in that condition? It said that any conveyance for that purpose should be valid if the lender had no notice of any act of bankruptcy. These notices, of course, would make lenders of money very careful. It would not be an easy matter sometimes to say whether a lender had received that species of information which the law described as a "notice." The definition of "notice" often gave rise to litigation, and therefore he believed lenders of money would be very shy of dealing with persons under the circumstances he had described, who might be more or less deeply involved, and might, perhaps, have judgments against them. Then, there was a third class of cases, also of not unfrequent occurrence. He meant cases where persons, being in difficulties, assigned their affairs to trustees, very often for the purpose of raising money by mortgage to pay off other incumbrances. Sometimes a father and son joined in putting an estate under trust in that way, and their affairs were thus set right without further trouble. This Bill, however, would interfere with an arrangement of that kind, because it provided that every trust deed which did not fulfil the conditions specified in the arrangement clause should be utterly void. The case he had instanced was not provided for by the Bill, and the consequence would be that these arrangements would be rendered impossible. Men circumstanced as he had described would, therefore, be almost ruined. For these reasons he held that the clause, naked as it stood, ought not to be agreed to. He hoped the Attorney General would either 1998 agree to exclude the large class of persons he had specified from the operation of the measure, or, if not, at least to introduce such provisions as would prevent that great inconvenience which the Bill, as it stood, must necessarily cause to that class. He could not see that by the proposed arrangement the smallest advantage would be conferred on any one except the moneylenders, who, he believed, were perfectly capable of taking care of themselves. He understood almost all the hon. and learned Gentlemen in the House were against him on this occasion. ["Hear,hear!"—"No!"] He was glad there was some one to say "no," but he feared that, generally, the lawyers were against him. He believed, however, that mankind at large had little reason to feel satisfied when all the lawyers were on one side. When they were divided they fought the matter out, and so the truth was elicited; but when there was a great preponderance of them on one side, it was high time for laymen to look out. It was very desirable, no doubt, that the law should be made as symmetrical as possible; but he could not forget that there had been great lawyers in the world before the present generation, and that for some 200 years they had drawn a geat distinction between trading and other debtors. He was well aware that this distinction had been much broken down in the present century by the introduction of the Insolvency Court system; but he believed there was an essential difference between trading and commercial and non-traders debts, and he thought the distinction ought not to be demolished altogether, as the Bill proposed. In moving the omission of certain words, he did so, not under the pretence that that would be the best way of altering the clauses, but for the sake of raising discussion on the question involved. He then moved the omission of the words "debtors whether" after the word "all."
§ MR. EDWIN JAMES
thought the right hon. Gentleman had hardly done justice to the lawyers, for during the debate on this Bill they had taken a most liberal and generous course, a number of them having voted against the enormous compensation proposed to be awarded. This clause involved one of the most important questions connected with the subject of bankruptcy, as affecting not merely the mercantile but the social relations of the country. When the Attorney General introduced the Bill he (Mr. James) stated that he would support the principle it embodied, and he in- 1999 tended to do so. He must admit, however, that if it was to be carried out, it ought to be surrounded with a great many protections. He found that by Clause 164 every judgment creditor who was entitled to sue out against a debtor a writ of capias ad satisfaciendum—whicli could be got for a debt of £20—or to charge the debtor in execution, was authorized, at the end of one week from the signing of judgment, to sue out against the debtor, whether he be in custody or not, so long as he was in England, a summons, requiring him to appear and be examined respecting his ability to satisfy the debt. Then, again, Clause 170 provided as follows:—Upon the Appearance of the Debtor he may be examined on Oath, by or on behalf of the Creditor and by the Court, respecting his Ability to satisfy the Debt, and for the Discovery of Property applicable in that Behalf, and shall he bound to produce, on Oath or otherwise, such Books, Papers, and Documents in his Possession or Power relating to Property applicable or alleged to be applicable to the Satisfaction of the Debt, as the Court shall think fit, and to sign his Examination when reduced into Writing; and any Debtor who shall upon Examination wilfully fail to discover fully and truly to the best of his Knowledge and Belief all his Property, Real and Personal, inclusive of his Rights and Credits, and to produce all Books, Papers, and documents in his possession or Power relating thereto, shall be liable to be committed by the Court as in the Case of a Bankrupt.It appeared to him that that was a very dangerous and extraordinary power to confer on a creditor, and he could not help thinking that there ought to be some distinction between a mercantile and, ns the phrase was, a gentleman debtor. By the French code no one except the person trading was liable to the Bankrupt Law. But the present clause might be made the means of the greatest extortion. A young man who had contracted a debt of £40 or £50 might get into the hands of usurers, who might make the whole of his property subservient to their extortion. He had given notice of an Amendment, which he should press, to the effect that all Peers, whether Peers of Parliament or otherwise, should be equally liable to the bankrupt laws with Members of the House of Commons.
§ SIR HUGH CAIRNS
believed that this was the first occasion on which a question had been brought before the House of Commons which had excited much discussion out of doors—namely, whether non-traders ought to be liable to the bankrupt laws. He regretted that a discussion of so much importance should come on at so 2000 advanced a period of the Session. It was to be remembered that, whatever the views of hon. Members might be as to the abolition of the distinction between traders and non-traders, such a change was not demanded by commercial circles. The question that interested them was, whether they should have those Amendments in the administration and execution of the bankrupt laws which they had demanded. The other question was not one of urgency, and was not demanded by the feeling of the country, and might have been postponed to another time. It ought not at all events to be legislated upon without a full and searching investigation. Having had occasion to consider the subject, he would frankly state his belief that, to a certain extent, an irresistible argument might be urged in favour of abolishing the present distinction between the trader and non-trader. When, however, he saw the sweeping manner in which the change was proposed to be made he felt the greatest alarm. If the clause were adopted, all non-traders would be brought under the peril of committing one of the acts of bankruptcy therein described. Let the Committee observe what these acts of bankruptcy were, the Commission of any one of which would make a non-trader a bankrupt. By the 155th Clause seven acts of bankruptcy might be committed by a debtor. One was:—"If any debtor shall, with intent to defeat or delay his creditors, depart this realm." Who was to judge of the motive for which a non-trader departed the realm? There was an all important difference herein between a person carrying on business and one who was not. The duty of a trader was to be always at his post. If he quitted the country, it was his duty to make suitable arrangements, and to leave no engagements which his representatives could not satisfy. The burden of proving that he did not go abroad to defraud his creditors was, therefore, thrown upon the trader. But a non-trader was not bound to be in the country. He had no place of business at which he was bound to be present. Another act of bankruptcy was defined to be, if the debtor "being out of this realm shall remain abroad." That was a most astonishing act of bankruptcy to apply to a person who was not in trade. Another Act of Bankruptcy was,If any debtor shall suffer himself to be arrested or taken in execution for any debt not due, or shall suffer himself to be outlawed, or procure his 2001 goods, money, or chattels to be attached, sequestered, or taken in execution, or make or cause to be made, either within this realm or elsewhere, any fraudulent grant or conveyance of any of his lands, tenements, goods, or chattels, or make or cause to be made any fraudulent surrender of any of his copyhold lands or tenements, or make or cause to be made any fraudulent gift, delivery, or transfer of any of his goods or chattels, any such debtor doing, suffering, procuring, executing, permitting, making, or causing to be made, with such intent, any of the acts, deeds, or matters aforesaid, shall be deemed to have thereby committed an act of bankruptcy.
By Clause 158 it was enacted that
If any debtor, having been arrested or committed to prison for debt, or on any attachment for non-payment of money, shall, upon such or any other arrest or commitment for debt or non-payment of money, or upon any detention for debt, lie in prison for fourteen days, or, having been arrested for any cause, shall lie in prison for fourteen days after any detained for debt lodged against him, and not discharged, every such debtor shall thereby be deemed to have committed an act of bankruptcy; or if any such debtor, having been arrested, committed, or detained for debt shall escape out of prison or custody, every such debtor shall be deemed to have thereby committed an act of bankruptcy from the time of such arrest, commitment, or detention.
He had read these provisions to show how wholly inapplicable they were to the state of the law that had grown up in regard to the trade of the country. The law gave the trader certain advantages, but stipulated that in return he must regulate his conduct so as not to elude his engagements as a commercial man. But these acts of bankruptcy that were framed and originated for traders were inapplicable to those who were not men of business, and had no business habits. At all events, it was nothing more than justice, if they were going to make an alteration in the law, that they should only apply it to debts contracted hereafter. Another safeguard ought to be inserted in the Bill. The Legislature might very safely permit all non-traders to be made bankrupts on their own petition. The law at present was that if a creditor were in a position to take any debtor in execution, having recovered judgment against him, the debtor might be put in prison either until he paid or until he volunteered himself to come under the Insolvent Act. It always seemed to him that when the creditor had got to the point when he might put the debtor in prison, the law might advantageously dispense with the formality of putting him in prison, and might enable the creditor to summon him before the Court of Bankruptcy, and make him subject to the operation of
the Bankruptcy Law. If an alteration were made in these respects it would remove a great objection to the present Bill. By the 173rd section creditors might file an affidavit in the District Court against a debtor, and the Court might issue a summons to show cause why he should not be adjudged a bankrupt, which summons was to be returnable in four days from the issuing thereof; so that as the Bill stood a non-trader might be summoned for £40, to appear in four days, and, if he failed to do so, might be adjudged a bankrupt. Nothing could be more convenient as an engine of oppression than this. At present a summons in the case of traders was returnable in fourteen days; and even this had been regarded in mercantile circles as productive of great hardship; but to extend it to non-traders, and to reduce the time from fourteen to four days, was a proceeding unnecessarily harsh. Unless the Attorney General limited this provision to those cases in which a creditor was in a position to put his debtor in prison, or to cases in which the debtor voluntarily submitted to it, he would deem it his duty to vote for the Amendment of the right hon. Member for Oxfordshire.
MR. MONTAGUE SMITH
said, he had given notice to leave out these objectionable clauses. The clause now under discussion made an absolute identity between those who were traders and those who were non-traders, and thus would effect a complete revolution in the law of bankruptcy. There had at all times been a distinction between these two classes in this country, and there was good ground for that distinction, for a man engaged in trade and commerce was bound at all times to meet his engagements, and to be ever at hand both with his person and property; but a man not engaged in trade was not expected to have his estate in a condition to be at once turned into money, to be in a place of business ready to meet his creditor, or if he went abroad, to run the hazard of being adjudged a bankrupt. The vice of the Bill seemed to be that it had many clauses exceedingly proper as applied to traders, but harsh and oppressive to an excessive degree when applied to those not engaged in trade. By virtue of a subsequent clause in the Bill. Any man might be summoned before a Bankrupt Commissioner or County Court Judge for a debt of £40, and, unless he could satisfy the Judge that he could pay not only that debt but any other he might owe, he was to be declared 2003 a bankrupt. He doubted whether in any code, however severe, such a clause had ever been found. A man might be on the moors in Scotland, or salmon fishing in Ireland, and be summoned to appear before the Court in London or before any provincial Court, however remote, within four days, to be examined on oath as to his debts. It might be right that a man engaged in commerce should be able at once to pay everybody, but it was not necessary that every man not in trade, from the Archbishop downwards, should be compelled to appear at four days' notice, and pay all his debts, or be declared a bankrupt. There were persons who had their incomes payable only at stated periods, who had no property, and to whom credit was given on the faith that they would pay when their salary was received. But if a malicious creditor summoned such a person before the Court, and it came out that he could not at the time pay his debts, he would be declared a bankrupt. A farmer, as they all knew, looked to his crops to pay his debts; but, supposing he was summoned three or four months before harvest for a debt, the result might be that his crops would pass into other hands, and he would be ruined. He might refer to the case of officers of the army, also, whose pay came in periodically, and who, when moving about from place to place with their regiments, would be liable to be summoned for small debts. Were they to be declared bankrupts because at the time when they were summoned they were unable to pay all their debts? The distinction between traders and non-traders had always prevailed in this country, and was not an arbitrary distinction, but was founded on common sense and the habits of mankind. It might be perfectly right and proper to frame stringent laws for traders, but that was no reason why those who were non-traders should be drawn into the net with them. He believed the parentage of these stringent clauses of the Bill did not belong to the Attorney General, but to certain classes of the mercantile community. The Bill contained provisions unnecessarily harsh towards non-trading debtors, possessing property not immediately convertible, and unnecessarily lenient towards others, possessing no present property, but having expectancies which sooner or later might be realized. It no doubt contained many valuable provisions as regarded the commercial community; but those who were beyond the pale of trade 2004 had not been consulted regarding it, and he believed that they were utterly ignorant of the consequences that would follow from the adoption of the Bill as it stood. If a clear distinction was not made between traders and non-traders, the Bill, he believed, would be productive of mischiefs that its framers had never contemplated.
§ SIR FITZROY KELLY
said, he was sincerely desirous that this Bill should pass, and he agreed with the Attorney General in supporting the principle of this clause, yet he could not help expressing the wish that his hon. and learned Friend had stated to the House the nature of the protection and safeguards with which he meant to accompany it. It might relieve some of his friends from the apprehensions which, not unnaturally, they entertained regarding this clause if they remembered that by the law of Scotland, as amended some years ago, the distinction between traders and non-traders had been wholly abolished, and he was not aware that any serious mischief, or any mischief at all, had arisen from its operation. He must say that, much as he desired to see this Bill pass, he would rather see it withdrawn than not have a distinct assurance from the Attorney General that some strong safeguards would accompany the clause now under consideration. It was impossible not to perceive that almost all the clauses which immediately followed this, for the most part excellent in themselves as regards traders, were altogether inapplicable to a number of other classes in the community whoso case seemed to have been entirely forgotten. A trader was bound to be at all times ready to pay his debts—it was of the very essence of the solvency of a trader that he should, at any and every moment, be prepared with any sum of money to meet every demand that might lawfully be brought against him; but would they apply the clauses constituting acts of bankruptcy, for instance, to landed proprietors? He was sorry to say that nine-tenths, or perhaps nineteen-twentieths, of the landed proprietors of the country had their property more or less subject to mortgage. A mortgage debt, though due in point of law, was not intended to be claimed, and ran on year after year; but to apply to such a case the provisions of this Act would be to introduce a revolution in the whole state of property, and the condition in which every man in the kingdom who happened to be a landed proprietor would be placed. A gentleman possessed of an in- 2005 come from landed property of some £2,000 a year might have some debts, though, on the whole, in easy circumstances; there might be a mortgage debt; some ill-natured creditor might issue a summons against him, and unless he was able to satisfy that mortgage debt in four days he was liable to be declared a bankrupt by the Judge in Bankruptcy. He could not agree to such a clause unless the Attorney General at once consented to render inapplicable to non-traders in general the whole series of provisions respecting acts of bankruptcy; and, as an additional safeguard, he would suggest that as to the circumstances in which a non-trader should be made a bankrupt, he should be summoned, not within a given time, for that should in all cases depend on the discretion of the Judge, but only on fair and ample notice given. The debtor should then appear, according to the circumstances of the case, to give such information respecting his affairs as might seem reasonable to the Judge; and if it should appear—but only if it should appear—that he was utterly unable to pay his debts, that he was living on his creditors, and that it was necessary the bankrupt law should be put in operation against him—in these circumstances only should he be made a bankrupt, and thus prevented from wasting the estate. It was necessary to introduce into the Bill the most careful and specific provisions with regard to the notice to all non-traders. A trader was bound to be always in presence to meet his creditors; but non-traders might be absent on the Continent for a year or two without their address being known even to their own families, and these cases could not be dealt with unless satisfactory evidence was given that the absent debtor had proper notice. Before going further with this Bill the Committee had a right to expect from his hon. and learned Friend the Attorney General a clear and specific explanation of the safeguards he meant to provide in the case of non-traders.
§ MR. MALINS
concurred in thinking that the question raised by this clause was one of the last degree of importance. It was one of the most valuable provisions of the Bill, providing for the assimilation of the law of debtor and creditor to all classes of the community. He thought it right that every facility should be given for the recovery of debts, and that there should be one uniform system by which those who were unable to pay their debts should have their debts adjudicated. He agreed, how- 2006 ever, that many qualifications should be made with reference to non-traders. They should not be liable to be made bankrupts in the manner provided by the Bill; but only after judgment was obtained. The great principle which it was desirable to establish was that those who did not pay their debts should be made with the greatest facility to do so, or at least to make a cessio bonorum to their creditors; and that then, whether traders or non-traders, they should be restored to their original position and to the capacity of acquiring property. Did the Committee think that non-traders who were in debt should be allowed to retain possession of their property by simply crossing the Channel? He was of opinion that if a proper notice were given at the residence of a non-trader, who was abroad, and he did not within a specified time—say a month or six weeks—return and settle with his creditors, every facility should be given to the latter to obtain possession of his property. The reckless habits of extravagance now too prevalent in the upper and middle classes of society would be checked when it was found that debt could not be incurred with impunity. It was said traders were bound to be always ready to meet the claims of their creditors; but ought not non-traders to be equally so bound? By going to Boulogne a debtor could avoid his creditors, or at least could put such difficulties in their way as amounted to an avoidance of them; but this Bill would compel him either to give up all his property for their benefit, or to come home and deal with them as he must do if he were a trader. No doubt proper safeguards ought to be provided, so as to prevent an oppressive creditor from making even a trader bankrupt; but the principle of the clause deserved the approval of the Committee.
§ MR. CAYLEY
said, the question raised in the clause now under discussion was so important that it ought not to be disposed of summarily, and he therefore begged to move that the Chairman report progress.
THE ATTORNEY GENERAL
hoped the Motion for reporting progress would not be pressed. The House was then as full as he could expect to have it during the discussion of this Bill, and it would be convenient that night to dispose of the question raised by this clause.
§ SIR WILLIAM JOLLIFFE
hoped his hon. Friend would presevere in his Motion to report progress. The subject was one of the gravest import, and came on at that 2007 hour quite unexpectedly. It could not be properly discussed at so late an hour. He asked what could be the position of officers in the army and navy when the present clause passed? He hoped the fullest opportunity would be given for the discussion of this clause.
§ House resumed.
§ MR. MALINS
said, that the clause now under consideration was of the very essence of the Bill, and he wished to know whether, if it was rejected, the Attorney General would withdraw the Bill. If he was disposed to do so, it would be useless to ask the House to spend several mornings in consideration of other clauses.
THE ATTORNEY GENERAL
said, the clauses of the Bill might be so altered as to remove many of the objections to the principle in dispute, and many opportunities would arise in the consideration of the subsequent provisions of the Bill for discussing whether or not non-traders should be included within its operation. Although he thought it was most important that they should be included, he should not be disposed to abandon the measure if the House decided that they should not. The greater part of the remaining clauses were merely a repetition of the existing law, inserted in order that the whole of the law might be comprehended in one Act. He therefore thought there was a reasonable prospect of arriving at the end of the Bill in time for it to go to the other House, so as to be passed into law during the present Session.
§ SIR HUGH CAIRNS
was glad the noble Lord had fixed the further consideration of the Bill for Thursday evening, as it would be impossible to proceed with one clause before the Committee had arrived at a decision upon the principle of including non-traders.
§ MR. E. P. BOUVERIE
suggested to the Attorney General the propriety of so amending the subsequent clauses of the Bill as to obviate the objections entertained to the clause relating to non-traders.
§ MR. AYRTON
thought that if the Attorney General wished to pass his Bill he should limit its application to traders, leaving the question as to non-traders to be dealt with in a separate measure in a future Session.
§ Committee report Progress; to sit again on Thursday.