HC Deb 19 July 1860 vol 159 cc2156-67

Order for Committee read.

House in Committee.

Mr. DEASY in the Chair.

(In the Committee.)


The Committee will recollect the question before us when this Bill was last under discussion was one of the very greatest importance. It was the question whether any person, be he a trader or non-trader, shall be subject to the uniform system of administering the law of insolvency proposed to be established by this measure. Although this question may have never before been discussed in the House of Commons, it has been the subject of repeated consideration out of this House during a period, I may say, of thirty years, and whether in the Reports of Commissioners, in the discussions in the other House of Parliament, or in the speeches of the most learned Lords and jurists, there has been but one growing opinion, that it is incumbent on the Legislature, upon every consideration, both of justice and expediency, to do away with the distinction between the code of bankruptcy and the law relating to insolvent debtors, and to substitute for them one uniform system. I believe in this country alone there prevails this peculiarity, that the man who is not a trader has no opportunity, as a general rule, of surrendering his estate for the purposes of an equal distribution among his creditors until he has been first committed to prison. The anomaly and injustice of this rule are most apparent. For what object should you imprison the honest debtor who is desirous of making a cessio bonorum for the benefit of his creditors? To what end is it that so many thousand persons are in this country annually committed to prison, only to be discharged again a few weeks afterwards by the operation of the Insolvent Debtors' Act? Some efforts were made for the amelioration of this state of the law through the legislation introduced by Lord Lyndhurst, whose opinion is worthy of the highest respect; but, generally speaking, the rule I have described still obtains, and, accordingly, the debtor is compelled to submit to incarceration before he can do that which justice and expediency require that every man in a condition of insolvency should have every facility allowed to him for doing, namely, to surrender his property for distribution among his creditors. Now, with that view, I have proposed this enactment, which has been drawn up in very wide terms, because while it would, no doubt, have been necessary to surround the provision with proper safeguards, I have felt that it ought to be left open to the discretion of the House. If this discussion had proceeded, it was my intention to have recommended, in the first place, that the enactment should be entirely prospective—that is to say, that no existing debt (no debt contracted before the Bill came into operation) should avail to support an adjudication of bankruptcy against any person who is a non-trader. It was the object of the measure to lay down some simple and unquestionable tests of insolvency which all would admit might have been justly applied to the non-trader. By tests of insolvency I mean those acts which are commonly denominated acts of bankruptcy. The first test of insolvency proposed to be established by the Bill is absconding from the country and remaining abroad with intent to defeat or delay the remedies of the creditors. I think no hon. Gentleman in this House would for a moment contend that an individual guilty of such conduct should not be deprived of his property, and that that property should not be taken by process of law for distribution among his creditors. Another test of insolvency proposed by the Bill is the debtor's causing his property to be taken in execution, or suffering it to be so taken and disposed of, to the prejudice of the general body of his creditors. Now, no man who is possessed either of means or of credit would permit that to be done; and, therefore, I think such an act would be a very satisfactory criterion of his insolvency. Another mode of arriving at the same result is that if a judgment is obtained against a non-trader, and he is, after a certain period, summoned and examined as to his means of paying that judgment, provided he does not dispute its validity, and it is proved that he had not sufficient property to satisfy it, then he should be liable to have his estate taken from him and divided among those who had just claims upon him. There remains another test proposed by the Bill, which has not been generally understood by the House, and which, as it has been the subject of much misrepresentation, the Committee will perhaps permit me for a moment to explain. It is intended by the measure to apply to the case of the non-trader those clauses in the existing Bankruptcy Act which are commonly denominated the debtors' clauses—that is to say, clauses which enable the creditors to summon the debtor before the Court of Bankruptcy, and call upon him either to pay or satisfy the Court that he has the means of doing so. But I have not thought it fair to include them in this Bill in the naked shape in which they exist in the bankruptcy statutes; and accordingly the Committee will observe, if they will turn to the Bill, that no opportunity to make any demand of this kind against a debtor is given to any creditor who is not in a condition to prove to the Court that the debtor is in insolvent circumstances, and is seeking to evade his creditors. I should have had no difficulty, if the Bill proceeded, in confining this provision to the case of traders, and exempting non-traders from its operation. If this result had been attained the measure would have assumed this form, that no person who was not a trader would have been subject to its operation unless he were absconding or remaining away from this country, unless he was a judgment debtor without the means of paying his debts, or unless his property was actually being so disposed of as to defraud his creditors. I have no doubt, therefore, that if the discussion had gone on, the Committee would have been satisfied with the guards and precautions introduced, or proposed to be introduced, by this measure. But, Sir, reflecting on the anxiety manifested by the House, it appeared to be incumbent on me to consider whether, supposing I succeeded in satisfying the Committee, and in inducing it to extend the Bill to the case of the non-trader, still, if the subsequent provisions of the Bill required so much time to be expended in their discussion that I could not carry the measure up to the House of Lords probaby until the beginning of August, it would be consistent with ordi- nary decency at that period of the year to send up a Bill containing such novel and important provisions to the other House, and expect that Assembly then to take them into its consideration. I, therefore, could not avoid arriving at the conclusion that the House of Lords ought not to be placed in that situation. On the other hand, if I were not fortunate enough to carry with me the opinion of the Committee, and these clauses were to be struck out, it would then be necessary to entirely recast the measure; because hon. Members will do me the favour to recollect that I have been encouraged to go on under the conviction that the House was favourable to this extension of the law. For, with the view of raising the question, the second section of the Bill proposed the abolition of the Insolvent Debtors' Court, and had the Committee been adverse to that proposition, it might naturally have been supposed that its feeling would have been expressed during the consideration of that clause. I was the more encouraged to hope that this alteration of the law would have met the approval of the House, because the same provision was contained in the Bill introduced by the Earl of Derby's Government, and therefore I expected that it would have been received with the more general concurrence. I cannot, however, complain that the House should have viewed this as a matter demanding the most careful deliberation, and we are therefore in this difficulty, that even if we succeeded with the Bill, we could not hope to finish it in time for it to undergo discussion in the other House. On the other hand, if we failed there would equally be insufficient time for bringing the measure forward in an amended shape. I have, therefore, with the approbation of the Government, come unwillingly to the conclusion that it is necessary to abandon the Bill. I hope, however, when this subject has again to be considered, it will be found that the time and attention already devoted to it has not been thrown away. I have gained considerable experience from our discussions; and I trust if I retain office—and if not, the task will be undertaken by more competent hands—I trust I shall be able in another Session to present this measure in less gigantic and formidable proportions, and embodying all its principles and objects in a more condensed form. I trust it will be introduced, whether by myself or by my successor, at an earlier period of the year, when it can re- ceive the due consideration necessary to enable it to pass, for there is a growing and urgent demand for legislation upon this subject. I have only now to express my regret if, in my earnest anxiety to carry this Bill, I have ever seemed to evince any impatience towards the House. I had naturally hoped that during this Session it would have been possible to make some important advance in the improvement of this branch of our law. Circumstances have, however, prevented it; and I trust I can say that nobody will be able to reproach me with having lost any fair opportunity for bringing this great question to a successful termination. I move, Sir, that you do now leave the Chair with the view of proposing, when the House resumes, that the Order of the Day be discharged.


Sir, I have so often ventured to express anxiety with regard to the progresss of this Bill that I am sure the Committee will believe me to be sincere when I say, that I entirely concur in the regrets which have been expressed by my hon. and learned Friend the Attorney General at the necessity which, under existing circumstances, has arisen for its postponement till another Session. I do not mean to say one word by way of suggestion that the course which has been taken by the hon. and learned Gentleman is not a necessary course, is not the most advisable one which he could have adopted. I am sure that the Committee will respond entirely to the demand which the hon. and learned Attorney General has made upon us, and will join with me in expressing the gratitude which is due to him for the pains and labour which he has bestowed upon this measure. I certainly hope that those pains and that labour have not been thrown away, but that at some future time the Bill will be reintroduced and successfully carried through this House. If I may venture to make a suggestion to the hon. and learned Gentleman it is this, that, when the subject of the bankruptcy law comes again before the House, great advantage would be gained if the measure first presented was not a Bill for consolidating the entire law of bankruptcy, but was confined to the changes proposed to be made in that law. Such a measure would distinctly raise the question as to the effect and the extent of those changes, and after it had been passed the consolidation of the law would be a matter of very little difficulty. In place of having a Bill of 500 or 600 clauses brought before the House, we should in the first instance have one of some 50 or 100 clauses containing all the changes, and the larger measure would afterwards be treated more as a matter of routine than as one of discussion. As my hon. and learned Friend has referred to the Bill which was brought in by the late Government, I think I may add that that was the course which was taken by the late Government, and I still think, as I thought then, that great advantage would have resulted from its adoption. The course taken was to lay before and pass through the other House a Bill confined to the changes proposed to be made in the law, with the view and upon a statement that when that Bill had passed both Houses of Parliament it should be followed by a general measure repealing all previous statutes and consolidating the law. Of course, I do not now propose to advert to my hon. and learned Friend's proposal as to making non-traders liable to the bankrupt laws. I still think that, if accompanied by efficient safeguards, it may safely be done. What those safeguards are I will not now discuss. I must, before I sit down, say that it will be matter of great regret to every one that the Resolution at which my hon. and learned Friend has arrived has not been earlier communicated to the Members of this House. We are here this evening apparently expecting a discussion upon the Bankruptcy Bill, and I greatly fear that a number of hon. Members who are very much interested in the questions which are to come on upon going into Committee of Supply are not at all prepared for the change which has been made. I cannot help thinking that the resolution which has been come to must have been known to the Government for some time, and it would have been more convenient if it had been earlier announced what business was actually to be proceeded with to-night.


said, he deeply regretted that circumstances had not enabled his hon. and learned Friend to go on with this very valuable measure. At the same time, he thought that his hon. and learned Friend had exercised a sound discretion in abandoning it for the present. He had stated more than once in the House, as he had communicated to the Attorney General privately, that he was afraid that the time had come when, if he attempted to press the measure through the House, it would be so mutilated, and would he deprived of so many of its most valuable provisions, that it would confer upon the public but little benefit, and upon its author very little lasting reputation—very little, indeed, of that reputation to which the days and nights of labour which he had bestowed upon it entitled him. By the course he had now taken, and by availing himself of the very valuable suggestions which had been thrown out in the course of the debate, the Attorney General would have an opportunity, if he introduced the measure early next Session, of passing it in such a form as would be advantageous to the public and most honourable to himself. The suggestion which had been thrown out by his hon. and learned Friend near him (Sir Hugh Cairns) as to the form in which the measure should be re-introduced was a most valuable one, and, in his opinion, the Attorney General would do well to adopt it. If he had the good fortune to be in the House next year, he should do his utmost, as he had done this year, to assist in passing a measure which should embody the great principles which had been enunciated by his hon. and learned Friend. He regretted that the House had not been earlier informed of the change in the business of the evening; but he was sure that if his hon. and learned Friend could have communicated the information earlier, he would have done so.


said, he wished to thank the hon. and learned Attorney General for the labour he had bestowed upon the measure, and to express a hope that the hon. and learned Gentleman would not consent to make any further concessions when he again introduced his Bill into Parliament.


I should have been extremely sorry to be wanting in courtesy or attention to the House in this matter. The decision which I have announced was not arrived at until two o'clock to-day, and it was immediately intimated to the Gentleman who is the usual organ of communication with hon. Members opposite.


I do not, of course, object to the withdrawal of this Bill. On the contrary, I do not see how the hon. and learned Gentleman could have acted otherwise under the circumstances. I entirely concur in the great admiration expressed by my hon. and learned Friend the Member for Belfast (Sir Hugh Cairns) for the ability and labour which the hon. and learned Attorney General has bestowed on the subject, and in the feeling of regret that the extraordinary course of business in the present Session should have rendered necessary the abandonment of so valuable and important a measure. Nor can I help pointing out to the noble Lord at the head of the Government and to the House the extreme inconvenience which must arise from the withdrawal of a public Bill of this importance and magnitude in this sudden and unexpected manner, when the House has assembled with the intention of considering the measure in Committee for several hours. The result must inevitably be to defeat the object for which the order of our business is printed. I observe that the next order on the paper for this evening, is the consideration of the Navy Estimates in Committee of Supply. Upon the Motion for going into Committee, the hon. and gallant Admiral the Member for Southwark has given notice of his intention to call our attention to the subject of Greenwich Hospital; but my hon. and gallant Friend is not now in his place, and in all probability he has no idea of the sudden change which has taken place. I am bound to accept the statement which, in a tone of so much gravity, the Attorney General has made; but, on the other hand, I must remind him that it was matter of current rumour in this House on Monday and Tuesday that the Government had decided, or very nearly so, to withdraw the Bankruptcy Bill. Under these circumstances I would ask the noble Lord at the head of the Government—who I must say conducts the business of this House generally with great courtesy and fairness—whether it is not desirable that Her Majesty's Ministers should make up their minds upon matters of this importance a little sooner, so that the House should not be exposed to the serious inconvenience which must arise from sudden and unexpected changes in the course of business.


I very much regret the inconvenience, if any, to which the House may be put by the announcement which my hon. and learned Friend the Attorney General has made. At the same time, I think the House would have been put to still greater inconvenience if we had persisted in asking the House to go into Committee on the Bankruptcy Bill after we had resolved to withdraw it for the present Session. [Sir JOHN PAKINGTON: I did not ask you to do that.] I mean, if we had invited the House to give a decision upon a material point of the Bill while we were satisfied in our own minds that the measure could not be carried through. I think one statement which the right hon. Baronet has made in some degree diminishes the ground of his complaint, because he says that, as far back as Monday and Tuesday, it was generally believed in this House that the Bill was to be abandoned for the present-session. If that be so, the announcement which my hon. and learned Friend the Attorney General has made cannot have taken the right hon. Baronet, at least, wholly by surprise.


But the Bankruptcy Bill is on the paper for this evening.


It is. But all I can say is, that we attached so much importance to this measure that we were exceedingly reluctant to give up the hope of being able to carry it through during the present Session. We clung to that hope, perhaps, longer than reason would have justified. There are cases in which hope is said to survive reason; but, be that as it may, we were unwilling to withdraw the Bill until the conviction forced itself upon our minds that there was no reasonable expectation of our being able to pass it in the present Session. We almost came to that opinion yesterday, but our decision was made to depend upon a communication which I was to have with my hon. and learned Friend the Attorney General this morning. I had that communication; I found that he entirely concurred in the conviction to which we had come; and he has taken the earliest opportunity to state it to the House. Those hon. Members who are interested in the business of the House this evening will naturally have looked at the Orders. They will have seen that Committee of Supply was appointed to follow the Bankruptcy Bill. Suppose that the labours of the Attorney General elsewhere had rendered him unable to go on with the Bill to-day—not at all an unlikely thing to have happened—we should then have proceeded at once to the consideration of the Navy Estimates in Committee of Supply. Hon. Members onght to take such contingencies into account; at any rate, nobody can complain that we should now go on with the next Order of the Day.


said, he was sure that the withdrawal of the Bankruptcy Bill would be a matter of great regret, not only to the Members of that House, but to many persons out of doors. The hon. and learned Attorney General might console himself with the reflection that his failure was not owing to any want of diligence or zeal on his part. The truth was that the Bill had been smothered by the immense mass of other important business before the House. He certainly thought that it would have been wiser to have divided the scheme into two or three measures, and to have put the controverted matter into only one. He did not think, however, that the time of the House had been wasted in the discussions which had taken place. The Attorney General had seen some of the difficulties which he would have to contend with in another Session, especially in connection with his proposition to include non-traders in the same category as traders—a question for which, though it had been much discussed in professional circles, the country at large did not seem to be prepared. Great changes of that kind could not be made with a rush or a leap; they must be discussed Session after Session, until they were settled; and when at length a conviction of their wisdom and necessity had forced itself upon the public mind, there would be no discontent at their adoption. He hoped that next Session the hon. and learned Gentleman would not only again launch his barque upon its "sea of troubles," but would carry it safe into port with flying colours, and have his name enrolled in the history of the country as the author of one of the most valuable improvements ever made in commercial law.


said, the hon. and learned Attorney General, in withdrawing his Bill, had cast some sort of imputation upon those who objected to Clause 152, as if they did not want to pay their debts. He agreed with the hon. and learned Gentleman that all men ought to pay their debts; but what he complained of was that Clause 152 would have made solvent men, as well as insolvents, bankrupts. The discussions upon the Bill had hitherto been confined almost exclusively to lawyers. Very few laymen had taken part in it. It was not to be supposed that they could know all the secrets of the bankruptcy and insolvency laws, so as to make their objections to the non-trader point at an earlier period.


said, he hoped that the Attorney General, before he again introduced a measure of this kind to Parliament, would address himself to the commercial laws of France and other Continental States, for he would find that the law he proposed was utterly at variance with the whole commercial law of Europe. He admitted the House was very much in fault in placing his hon. and learned Friend in his present dilemma, because they ought to have raised and discussed the question at a much earlier period.


said, that as the hon. and learned Gentleman had come to the conclusion to withdraw the Bill, he must say that he thought it a great blessing that the Committee was to be spared the occupation at this period of the Session of discussing the 402 clauses remaining to be considered, exclusive of the schedules. The hon. and learned Gentleman had made some complaint that the objection to the particular portion of the Bill to which reference had been made had not been taken earlier, and therefore he would state the reason why he took the objection at this stage of the Bill, and not before. He quite agreed that, for persons who wanted to go into a Court of law to be wound up, there should be but one form. That was why, when he heard the Insolvent Court was to be done away with, he agreed to that proposition; but though he agreed to that he differed as to the propriety of bringing the Bankruptcy Law to bear upon every man who owed only £20 in the world, and did not wish to be wound up one way or another. If a layman might be permitted to throw out a suggestion, he should say that as the commercial community wanted the Bankruptcy Law amended, and facilities for their arrangements being brought under the superintendence of the Court, and as it was desirable that the Courts of Insolvency and Bankruptcy should be amalgamated, those three subjects would make quite a sufficient handful of work for one time. If the hon. and learned Gentleman desired to get through that work he would act wisely in leaving the non-trading part of the matter out of his measure, and take it up at a more leisure period, after the other subjects were completely settled, because it involved a vast change in the law of this country. At the proper time he thought there would be good reasons to show against it; and its omission would afford facilities for the passing of those amendments which the commercial community wanted, while they did not care, he believed, one, farthing about the other matter, If any man could have got through the whole of the 550 clauses of the present Bill he believed the hon. and learned Gentleman was that man. The hon. and learned Gentleman had drawn the clauses of the Bill with such ability and clearness that all persons, whether they liked them or not, could easily see what was intended to be done. Therefore no complaint could be made that any one was taken by surprise; and he was quite sure that if anybody could have got such a Bill through the House the hon. and learned Gentleman was the most likely to have done so; but there were some things so large that no man's power could roll them along. The Bill involved such vast consequences—blessings or curses, as people regarded them—that upon the discussion of the clauses the hon. and learned Gentleman would have found his difficulties increase. He would further observe that the word "debt" applied, no doubt, to traders and non-traders, but it meant two essentially different things in the two cases. When a trader contracted a debt, he agreed for the article, the price, and the specific time of payment, which last was the essence of the bargain; but the case was different with the non-trader. The latter bought goods without a specific time of payment being part of the bargain except in sales for ready money. When it was again attempted to adjust the differences existing in these two states of things—not a very easy task—he hoped the Attorney General would not run the risk of inflicting the hardship of applying the Bankruptcy Law to persons in no wise insolvent, though from no fault of their own they might have debts and so forth on their estates, for the sake of a smaller number of persons who might want a stringent law.


said, he trusted that when the Bill was reintroduced they would hear no more of the amalgamation of bankruptcy and insolvency, which were founded on totally different principles, and he also hoped they would hear no more of the extension of the Bankruptcy Law to non-traders. The two systems were founded on very different principles. The Insolvency Law was intended to be a pendent to the abolition of imprisonment, while the Bankruptcy Law, on the contrary, was a law in the interest of the creditor and to provide for the proper distribution of assets.

House resumed. [No Report.]