COMMITTEE.

HC Deb 21 February 1861 vol 161 cc715-46

Bill considered in Committee.

(In the Committee.)

Clauses 51 to 55 agreed to.

Clause 56 (Deputy for Chief Judge),

MR. EDWIN JAMES

said, it was pro- posed by the Bill that in the temporary absence of the Chief Judge one of the Commissioners in Bankruptcy should preside. But, as the principal business of the Chief Judge would be to hear appeals from the decisions of these Commissioners, he thought it very undesirable that one of their number should act as his substitute. With a view, therefore, to secure uniformity of ruling, of the entire absence of which the mercantile public at present complained so grievously, he moved, by way of Amendment, that one of the Queen's counsel, or a serjeant-at-law, should be appointed to preside in the absence of the Chief Judge.

THE ATTORNEY GENERAL

said, he would look into the clause with the view of seeing whether an alteration might not be made to remove the objection of the hon. and learned Member for Marylebone.

Amendment withdrawn.

Clause agreed to.

Clauses 57 to 62 inclusive agreed to.

Clause 63 (Persons refusing to answer may be ordered to pay costs),

MR. EDWIN JAMES

said, he wished to propose the addition of the words, "provided the person shall be compellable by law to answer such question or to sign such examination."

THE ATTORNEY GENERAL

said, that in framing the clause it was assumed that the Judge would not order the payment of costs until he had satisfied himself that the question or examination was such a one as the person could be compelled to answer or sign. He had, however, no objection to the Amendment.

Clause as amended, agreed to.

Clauses 64 to 67 agreed to.

Clause 68 (Issues may be directed),

MR. WALPOLE

said, he had great doubt about the propriety of the clause. The 67th Clause empowered the Chief Judge and the Judges of the Court of Appeal in Chancery to direct questions of fact to be tried before themselves, and the clause under consideration allowed them to direct issues to be tried in any Court of common law, either before a Judge of assize in any county or at the sittings in London and Middlesex. If there was one thing more than another which ought to be observed in law reform (and no one would give a more cordial assent to his proposition than the hon. and learned Gentleman opposite), it was that every Court ought to be sufficient of itself, and by itself, to determine any question within its jurisdiction which was submitted to it; and he was afraid that if they permitted issues to be tried in the way authorized in the clause, they would be Bending issues for trial which might just as well be tried before the Court. He quite admitted that it might be advantageous to send down a case into the country to be tried instead of trying it in London, and thus save the expense and inconvenience of bringing all the witnesses up here. To that extent be thought the clause might be useful.

THE ATTORNEY GENERAL

said, he thought they ought to put the greatest confidence in those who had the administration of justice in their hands, and leave them to act, in many cases, according to their discretion. Contingencies might arise that would render the sending of these issues to the courts necessary; and therefore he thought the power of doing so should remain.

MR. WALPOLE

said, be did not wish the hon. and learned Attorney General to give up the clause, but to put in some words to limit as much as possible the sending of issues for trial.

MR. MALINS

proposed that the words "in cases of necessity" should be inserted; and observed that, at one time, in the Court of Chancery it was a general rule, when points of law arose, to send an issue to the common law courts, but now it was only done in cases of absolute necessity.

THE ATTORNEY GENERAL

said, be had no objection to insert in the clause the words "if required by circumstances."

MR. WALFOLE

said, the insertion of those words would meet his views.

Clause as amended agreed to; as were also Clauses 69 to 73.

Clause 74 (Appeal from Commissioners and County Court Judges),

MR. EDWIN JAMES

said, he thought it desirable that a right of appeal should be given with respect to cases now pending, as well as with respect to cases that might arise subsequently to the passing of the Act.

MR. MALINS

said, he thought some Such Amendment as that proposed by his hon. and learned Friend was necessary. The decision of the Insolvent Court was final. There was no appeal from the judgment of the Commissioner. A case had lately arisen in which the Chief Commissioner of the Insolvent Court decided upon disposing of a sum exceeding £5,000 belonging to a Mr. Dyson, who had be- come insolvent a second time. The Vice Chancellor had decided that the money belonged to the purchaser of Dyson's property, and not to Dyson; so that while the Court of Chancery decided the money belonged to A, the Chief Commissioner ruled that it should be given to B. He, therefore, hoped the learned Attorney General would propose some words to remedy that inconvenience.

THE ATTORNEY GENERAL

said, that the matter was undoubtedly one of great importance, and he would, therefore, propose to add after the words "under this Act," in the third line of the clause, the words "including decisions and orders in all matters pending in bankruptcy or insolvency at the time of the passing of this Act."

Clause, as amended, agreed to.

Clause 75 (Mode of Appeal).

MR. MALINS

said, he thought that in all matters the appeal should be independent of the permission of the Judge appealed from, and he suggested that the time within which an appeal could be taken should be forty-two, instead of twenty-eight days.

MR. MOFFATT

moved as an Amendment, to leave out the words, "on the hearing thereof no new evidence shall be received without leave of the Judge."

THE ATTORNEY GENERAL

said, that the provision was a very salutary provision, for unless some such restriction existed a great temptation was held out, he would not say to perjury, but to strain the evidence in order to supply the defects in making out the case on a first hearing. Nothing, too, was more likely to lead to litigation and expense than permitting parties to come in with fresh testimony. He preferred the term in the Bill of twenty-eight days to the forty-two days suggested by his hon. and learned Friend, especially as the Judge had power to extend the period.

Clause agreed to.

Clauses 76 to 80 agreed to.

Clause 81(Abolition of distinction between Trader and Non-trader).

SIR FITZROY KELLY

said, that as several hon. Members who wished to take part in the discussion of this important clause were absent, he would suggest the postponement of the clause for the present, and that notice should be given of its coming on.

THE ATTORNEY GENERAL

said, there was a full House at five o'clock, and it was known that the Bankruptcy Bill was the first order of the day, while it was then only six o'clock. It was impossible to discuss the clause at a more auspicious time.

MR. MALINS

said, he was glad the hon. and learned Attorney General had refused to postpone the clause. It was of the very essence of the Bill; it was known it was coming on, and if hon. Gentlemen would not stay for it, even till dinner time, their absence was the best proof of their assent to the clause.

SIR GEORGE BOWYER

said, he should have been glad if the hon. and learned Attorney General had postponed the clause, and given the public a little more time for consideration, before so important a principle of jurisprudence was finally settled by the House. The popular argument was that no distinction should be made between the trader and non-trader, but that distinction could not be given up with a due regard to the principles of jurisprudence. The distinction was contained in the codes of all nations, and was founded on principles of public policy. The law of insolvency which applied to persons who were not traders was grounded on different principles and a different spirit from the law of bankruptcy. The spirit of the law of insolvency was favourable to the debtor. Insolvency originally meant a cessio bonorum, and was introduced as a favour to debtors, who, by giving up their property, were enabled to withdraw themselves from the very stringent laws against debtors. The law of bankruptcy was laid down by a statute passed in the reign of Henry VIII., which was very much of a criminal statute. It was introduced, not for the relief of debtor, but for the benefit of creditors, to whom it gave extraordinary remedies, founded on the peculiar circumstances of trade, which, being dependent on credit, could not he carried on without a punctual discharge of the trader's obligations. The law of bankruptcy applied to the trader, and made him answer on oath every possible question with regard to his means, got hold of all his property, cut it up and distributed it among his creditors with circumstances certainly of very great severity. That was necessary in the case of a trader, because trade could not be carried on without credit, and credit could not be maintained unless the creditors had such extraordinary remedies afforded by law. These principles were laid down by Blackstone, and in the French code the distinction between trader and non-trader was also to be found, bankruptcy applying to the first and not to the other, and the best commentators on the French Code agreed with Blackstone on this subject. The present Bill, therefore, removed a landmark of jurisprudence by confounding the trader with the non-trader. He hoped the Committee would consider the great vexation and trouble it would cause persons, who were not traders, to be brought under the law of bankruptcy, which had been described as a fearful legal instrument with all kinds of engines for cutting up a debtor, and distributing all he possessed among his creditors, and he likewise trusted that the landed gentlemen would carefully consider before they subjected themselves to powers of so exceptional and tremendous a character. The clauses might be made the means of great annoyance and cruelty, and something very like extortion, and I might place persons of property in very disagreeable predicaments. He had read last year a very able, witty, and pointed article in The Times, which went, he thought, to prove beyond doubt, that the law of bankruptcy ought not to be applied to non-traders, although, he regretted to say, the writer had carried out his views to no practical conclusion. The article, however, had awakened public attention to a great extent on the subject; and he, believing that the principle involved in the clause required still further consideration at the hands of the Committee and the country, deemed it to be his duty to move that it be postponed.

THE CHAIRMAN

said, that the remarks of the hon. and learned Baronet were addressed to the merits of the clause, and certainly not calculated to prepare the Committee for the Motion he had made. He did not know whether the hon. and learned Baronet would deem it necessary to persevere in his Amendment.

SIR GEORGE BOWYER

intimated his intention to persevere in the Amendment.

SIR LAWRENCE PALK

said, he was quite certain it was the general feeling of the public, who had considered the clause, that it ought to be omitted from the Bill. He trusted that the hon. and learned Gentleman would not risk the success of his measure by insisting on the clause. At all events, he hoped he would postpone its consideration until some other night. It was not usual, nor was it, indeed, decorous, for persons who had no knowledge of the legal profession to rise and speak on Bills of this sort. They must be pardoned if they trusted to the opinions of the legal advisers on their side of the House, and did not read such Bills with the accuracy they ought to do. That was the reason why the provisions of the clause had escaped the notice of many hon. Members when it had come under the consideration of the House last Session. He hoped that the clause would be postponed.

LORD JOHN MANNERS

said, although he concurred in the opinion that the fullest Parliamentary notice had been given of the intentions of the Government in regard to the progress of the Bill that night, yet, after what had happened, it was equally clear that, owing to some misapprehension, there was not that general comprehension of that important clause which was essential to a proper discussion of its provisions and a satisfactory settlement of the points involved. It was certainly one of the most novel and important provisions of the Bill. He should not presume to suggest a postponement of the clause, believing that the hon. and learned Gentleman had good grounds for proceeding if he were so minded. But in order to prevent unnecessary divisions he would suggest to the hon. and learned Gentleman whether, after all, time would not be gained by adopting the course recommended by his hon. and learned Friend. If, on the other hand, the hon. and learned Gentleman, in the fair exercise of his discretion, were determined to proceed with the discussion, he feared that they should prepare for warm discussions upon that particular clause in the next stage of the Bill, ending probably by a division or a series of divisions. Under such circumstances, he apprehended, very little time would be gained by proceeding with the clause after a very desultory conversation, to be followed afterwards by more full and mature discussions upon the same clause, terminating probably in divisions of the House.

THE ATTORNEY GENERAL

said, he was quite sure that the noble Lord would be the last person in the House that would lend himself to any obstructive measure, or to any Parliamentary tactics that were not quite regular. But he was sorry he could not answer the appeal made to him. It would have given him great pleasure if, consistently with his duty, he could acquiesce in the proposition for a postponement of the clause. He might appeal to the observations of the hon. and learned Member for Truro (Mr. Montague Smith) the other night as evidence of the arrangements made for the discussion of the clause on that evening. He believed he was also warranted in saying that the hon. and learned Gentleman the Member for Belfast (Sir Hugh Cairns) was also prepared for the discussion of the clause that night. He felt that, if he acceded to the proposition, he should be giving up the night to no purpose. He should postpone his observations upon the merits of the clause itself until the Amendment was disposed of. Whilst he tendered his thanks for the courtesy shown him in the last Session, as well as the present, he was pained at being compelled, from a sense of duty, to refuse compliance with the request made to him.

COLONEL DUNNE

said, they were told that there was a great difference between the measure of last year and that before the Committee. There was certainly some difference between the two measures, but many hon. Members were wholly unaware of the mischief which might be concealed under the garb of legal phraseology. The Attorney General certainly denied there was any such thing to he feared. He (Colonel Dunne), however, thought that before they went further into a discusssion upon this clause those hon. Members on his side of the House, at all events, should have an opportunity of consulting lawyers in whom they confided. He candidly confessed he had — in common, he believed, with every country Gentleman on his side of the House—a general distrust of all the proceedings of the hon. and learned Attorney General—and he thought an opportunity should be afforded for the lawyers on the Opposition side of the House to express their opinions upon the measure.

MR. A. MILLS

said, he was of opinion that there was no possible reason for the postponement of the clause. It was well known that this question of trader and non-trader was the great point to be discussed that night.

LORD JOHN MANNERS

observed, that after what had been said, he would take leave to impress upon his hon. Friend that under the circumstances it would but be a waste of time to oppose the clause in the present stage of the Bill, and that it would be much more advisable if they would reserve their opinions upon the question at issue, until they had reached the next stage. He trusted that the clause would be now allowed to pass, if possible, sub silentio.

Amendment negatived.

Clause agreed to.

Clause 82 (Act of Bankruptcy by Non-trader),

SIR HUGH CAIRNS

said, the case of non-traders was one of peculiar difficulty. He had, however, always entertained the view that to a certain extent it would be a benefit, and not a disadvantage, to non-traders to be subject to the bankrupt laws —and the only question was to what extent. It appeared to him that a very plain and simple line could easily be drawn and adhered to. Whenever a judgment debt had been recovered against a non-trader, so that the creditor was in a position to put him in prison and keep him there for a length of time, which he could only leave as an insolvent debtor; the best thing that could happen to the debtor would be that his creditor, in consequence of the judgment, should have the power, without the formality of putting him in prison, of making him a bankrupt. The Attorney General had adopted that principle; but he (Sir Hugh Cairns) was sorry to say that the hon. and learned Gentleman went further. That a judgment creditor should sue out a capias requiring a debtor to appear and show cause why he should not be made a bankrupt was quite right, and the best thing that could be done, for if a bankrupt were thrown into prison he was of no use to himself or any one else; but by the 82nd and following clauses the hon. and learned Attorney General introduced a larger and more dangerous element. Under the Bill as it stood, any person who went beyond the realms with the intention of defeating his creditors could be adjudged a bankrupt. That was an excellent rule with regard to a trader, because he was bound to a particular place of business, or to have a properly accredited representative on that place; but the case of the non-trader was entirely different. He was not bound to any particular place, nor was he bound to pay his debts to a day; and, therefore, it would be introducing an extremely dangerous principle to enable a creditor to make a non-trader a bankrupt simply upon his own statement that he was abroad for the purpose of defeating his creditors. What would be the consequence? The creditor would go before a Judge and tell a plausible story—they always did so—that to the best of his belief So-and so had gone abroad to avoid his creditors. The Judge was perfectly helpless in the matter, and he would be obliged to say, "This is the only evidence I have in the matter, and I must presume the man has gone abroad to avoid his creditors." But he might have gone abroad for a variety of motives, none of which might have been that of avoiding his creditors. He wanted to know why a non-trader who happened to be out of the country should be in a worse position than a non-trader in the country. They could not make the latter a bankrupt unless they had a judgment against him, and as there was power at common law to direct the service of a writ abroad, a non-trader resident abroad could be proceeded against under the judgment debtors clauses. He would, therefore, venture to suggest to the hon. and learned Attorney General whether he could not avoid a great deal of opposition to that and the following clauses, and take an important, practical, and safe step in the matter, by confining the case as regarded non-traders going abroad to what were called the judgment debtors summons clauses.

SIR GEORGE BOWYER

said, that the very luminous argument of his hon. and learned Friend perfectly illustrated the fact that they could not bring the case of the non-trader into the same position as that of the trader without gross impropriety. Let people consider what it was to be brought under the saws and harrows of the bankruptcy law. To a person of high rank, the very fact of being a bankrupt was a slur and a stain, and a thing which, in the history of a family, looked very ugly. Now, that might happen to a man whose means were far beyond what he owed, but who might be obliged to leave the country from some temporary embarrassment, or might be abroad at the time of the embarrassment, though perfectly willing to pay his debts. It was different with a trader, who ought to be in his place of business, or have some one there to represent him. A man of landed estate, who was a non-trader, was not under the same obligation to remain in the country, and, if compelled to do so, it would be a great restraint upon the liberty of the subject. He thought such a principle ought not to receive the sanction of the Committee, unless it were shown that the administration of justice in the ordinary courts, in cases of debtor and creditor, was not sufficient, as regarded non-traders, without resorting to the extraordinary and exceptional remedy given by the law of bankruptcy.

THE ATTORNEY GENERAL

said, that as there seemed to be an understanding that there should be a deliberate argument upon that matter at a future stage, he would not attempt then to reply to the observations of his hon. and learned Friend the Member for Belfast. He would merely say that, if non-traders could not abscond from their creditors, or if judgments could be recovered against them, he should he content with the debtor summons clauses. The hon. and learned Baronet the Member for Dundalk had asked a question, and he would beg leave to answer it by another. Did the hon. Baronet believe that there were no people belonging to this country abroad who had taken away their property, evaded their creditors, and lived abroad for years in shameless extravagance, whilst their defeated and disappointed creditors were unable to evade the shame? If the hon. Baronet believed there were no such persons, his position and his argument were consistent; but if he believed there were such persons, then he ought to join with him (the Attorney General) in attempting to put an end to such disgraceful transactions.

SIR GEORGE BOWYER

said, the hon. and learned Attorney General had spoken of a man going abroad and taking with him all his property, and leaving his debts unpaid. Now, he wanted to know if a man had carried all his property abroad what was the use of making him a bankrupt? If he had property in England, that property was liable to his debts. There were various Acts of Parliament to facilitate the service of process on persons abroad, and if he had property in England, it could be seized by the ordinary law, and the bankruptcy law was not necessary in such cases. And the notion of preventing a man from going abroad by making him a bankrupt, was very much like attempting to catch a bird by putting salt on its tail.

MR. MALINS

said, that there were many cases in which there were persons who had debts and also property, and the question was whether they would allow them to retain the property and leave the debts unpaid. That was the simple question which they were discussing. The principle of justice required that those who had debts and property should apply the property to pay the debts. There could be no doubt that it would be useless to make a man a bankrupt who took all his property abroad with him; but what the hon. and learned Attorney General meant was, that there were those who with large debts went abroad to avoid payment, and who, instead of taking all their property with them, drew it from England as it became due. If the law of England, then, were in such a state, ought it to be allowed to continue? Was he wrong in stating that such a state of affairs existed? Was it not possible that at the present moment a man might have thousands a year in landed property, and have it transmitted to him at Paris and Rome, where he lived in luxury, while his debts remained unpaid? If that could be the case, would any man say that it ought to be continued? How was such a man to be reached? They could not get a judgment against him—he was out of their reach; and within his own knowledge there were a great number of cases in which gentlemen had told him that they were in a state of starvation in consequence of the credit given to landed proprietors who absconded, and were living abroad. He thought too that there was protection enough thrown around the debtor by the clauses. If a debtor was abroad, the Court must be satisfied that he had absconded, and was remaining abroad for the purpose of avoiding the payments of his debts; and after service of the process, he must also have 60 days' notice before any proceedings could be taken against him. Ho had told the hon. and learned Attorney General last year that his Bill required more protection for the non-trading debtor, but that had effectually been given by the present measure. The clauses were of great importance. They were framed not for the benefit of creditors only but also of debtors; for he (Mr. Malins) believed that a greater benefit could not be conferred upon a man in a state of insolvency than to make him a bankrupt, and give him the opportunity, if he were a honest man, of beginning the world afresh, and he felt satisfied that the Legislature would be taking a course likely to restore a healthy-state of society by acting in such a spirit. To postpone the clauses would be to destroy the essence of the Bill, and if they were given up he should no longer care a straw for it. He had heard with astonishment that country gentlemen had not had sufficient notice of what was intended by those clauses, as the hon. and learned Attorney General had most lucidly explained their tendency when introducing the Bill.

He (Mr. Malins) should support the clauses, as he believed that they were calculated to base the law of debtor and creditor upon a rational principle, and in that conviction he should give the Bill his strenuous approval.

MR. A. TURNER

remarked that whatever distinction might be established between traders and non-traders, he hoped that in one respect both would be treated alike. When either a trader or a non-trader incurred a debt, as an honest man, he was bound to pay it. The hon. and learned Baronet (Sir George Bowyer) said that a man who went abroad, and who did not pay his debts, might by this clause he placed in a position he did not like. No doubt, a trader was bound to be in his place to pay his debts; and he could not understand why a non-trader, having gone abroad and made no provision for the payment of his debts, should complain that he was made a bankrupt.

MR. SEYMOUR FITZGERALD

maintained that the distinction taken by his hon. and learned Friend the Member for Belfast was a good one, because, in case of a man going abroad drawing all his income from this country, it was perfectly easy to bring an action against him, serve process abroad, and obtain judgment exactly in the same manner as if he resided in England. The allegation was that in case of the absence of a person from this country, an affidavit by a creditor that the debtor was abroad with the intention of delaying his creditors would be sufficient to put the Court in motion. He was of opinion that if there was no evidence on the other side, an affidavit, in which the creditor stated that to the best of his belief A. B. was abroad for that purpose, although it might be perfectly false, would be quite enough to constitute an act of bankruptcy. Such was the impression which had been conveyed to him by men of considerable eminence at the bar, and he should like to know whether or not it was correct.

SIR GEORGE BOWYER

said, the hon. and learned Member (Mr. Malins) had not dealt with the real point before the Committee. The question was, whether the ordinary process of law in the case of non-traders was insufficient to enforce the payment of debts, and therefore justified the application in reference to non-traders of the extraordinary and stringent remedies of bankruptcy. They all knew that, with regard to traders, the ordinary administration of the law was not sufficient. But he wanted to know why the ordinary adminis- tration of the law was not sufficient. His hon. and learned Friend put the case of a man who drew his rents from England and lived somewhere abroad, and did not pay his debts. He (Sir George Bowyer) did not justify that; but if there were such a case, they might serve him with process abroad, and proceed to judgment and execution, and thus stop the rents in England. Bankruptcy was wanted in order to administer the law for particular purposes— namely, the purposes of trade; but if a man was not a trader, those reasons for bankruptcy did not exist. He thought the proceeding now proposed was like attempting to catch a bird by sprinkling salt on its tail.

SIR LAWRENCE PALK

said, he could not but express surprise at the observations of the hon. and learned Member for Wallingford. That hon. and learned Gentleman had effectually answered his own arguments, for he had eulogized in magniloquent phrase the reforms in the Court of Chancery, and proved most convincingly that there was no necessity for the clause under discussion. The Bill unfairly enacted a heavier penalty against the non-trader than against the trader. A non-trader coming into possession of a heavily-encumbered estate, and striving, foolishly perhaps, to keep up the establishment maintained by his father before him, might become temporarily overwhelmed with debt, and then this measure would inflict on him all the irreparable evils of bankruptcy. Such a person would be not only punished as a trader for his folly, but he would be injured in another way. By making him a bankrupt, his character would be taken away, and he would lose his social position. He fully admitted that if persons went abroad, taking all their property with them, and at the same time leaving their creditors to starve, the law ought to be altered to meet such cases. But when the hon. and learned Member for Wallingford levelled his remarks against the landowners, had he forgotten that it was no novelty for young men to be ensnared and pressed on to ruin by usurers? Had the hon. and learned Member, however, never heard of lawyers helping young men to ruin? It was not always the tradesman who ruined the landowner. No, frequently, and more frequently than the hon. and learned Member would like to admit, the lawyer.

MR. EDWIN JAMES

denied that the Bill, as the hon. and learned Baronet (Sir George Bowyer) seemed to think, laid a trap for the landed gentry of England. It was only when a man either went abroad to defraud his creditors, executed a deed for the same purpose, or lay in prison fourteen days to evade payments of his debts, that he would be liable to be made a bankrupt. It was derogatory to the landowners of England to appeal to the Committee to throw out the clauses out of regard for persons coming within such a category. He hoped none of the landed gentry would be guilty of the deliberate fraud which would be necessary to bring them under this clause. It would be a national disgrace if any landed gentleman could be found to do so. The system of commerce and credit did not depend on the bankrupt law, as some hon. Members seemed to suppose, but upon the character and respectability of those who engaged in mercantile transactions. Nobody in business trusted another man simply because he knew he might make him a bankrupt. This clause would operate as a safeguard to expectant, heirs, who could now be put in prison by usurers under the Insolvent Act. Such young persons would not be so likely to incur debts for which they might be made bankrupt. The hon. and learned Baronet, using an elegant ornithological metaphor, said that the remedy proposed in the Act would be like trying to catch birds by putting salt upon their tails; but the hon. Gentleman was wrong in his notion; because if a person were adjudged a bank rupt he was bound to surrender, and if he did not surrender he would be a fraudulent bankrupt. But a fraudulent bankrupt would be delivered up under the extradition treaty; and therefore the bird would really be caught. Last Session the Bill was rather a startling one, but he was sure that hon. Members would see that, surrounded by the safeguards now introduced, the landed gentry would have no cause to fear the alteration of the law.

SIR FITZROY KELLY

said, he sincerely wished well to the Bill, and, therefore, he regretted that the first few words he should have to say with respect to the measure should assume something like the aspect of objection. He entirely agreed in the principle of the abolition of the distinction between trader and non-trader. It had long been abolished in Scotland, and might be effected in this country without any evil consequences. A measure of that kind, however, required the utmost forethought and attention, and no such provision should be introduced into our law without being accompanied with all the safeguards which the ability of the hon. and learned Attorney General would so well enable him to throw around it. There were one or two points of importance in the clauses now under consideration, to which he would call attention. No doubt, when it could be made out to the satisfaction of a Judge, or proper tribunal, that a person was really residing abroad, or had gone abroad, with intent to delay his creditors, such a person, whether trader or non-trader, ought to be brought within the operation of the bankruptcy laws. But there was some danger, inasmuch as personal service might be dispensed with, that a gentleman, who, for perfectly legitimate reasons, might have resided for years abroad, and without the means of receiving notice of what was going on against him might, on the affidavit of a creditor, that he was abroad for the purpose of avoiding his creditors, be made a bankrupt without the least suspicion on his part that any steps were being taken against him, and without his being guilty of the offence imputed to him. There was no exception, in that respect, as to any description or class of persons. Take, for instance, the case of an officer in the Army, who might be serving in China, India, or any distant colony, and necessarily abroad in the discharge of his duty, and who might owe a debt, or a few debts, of no great magnitude—the creditor might obtain judgment, and within a very short time convert that judgment into a fiat, and make the officer bankrupt. Ho thought some clause should he introduced for the protection not only of officers of the Army and Navy, but that numerous class of other persons who are engaged in our Colonies and elsewhere abroad in the public service, such as Ministers and Consuls. Any of these persons might owe debts in this country, which it was quite right they should be obliged to pay, by judgment and execution, and by the enforcement of the judgment in the country in which they were. But really, to say that every gentleman residing abroad, if he happened to owe debts in this country, should be liable within a short time, with or without personal service, to be made a bankrupt, did appear to him full of danger. He thought clauses might easily be introduced giving the Judge of the Court of Bankruptcy large discretion as to the circumstances under which he should issue fiats in bankruptcy against persons who were abroad in the public service, or continuously residing abroad. He hoped, before these clauses again came under the discussion of the House, the learned Attorney General would turn his attention to the question, whether some exception could not be introduced, some safeguard and protection provided for the numerous class of persons to whom he had referred, and who certainly ought not to be liable to the Bankruptcy Act.

MR. WALPOLE

said, the discussion had made a very great impression upon his mind as to the necessity for the Committee upon Public Business, which had been recently appointed, and as to the advantages which the House was supposed to possess in discussing the clauses of a Bill of great extent in Committee. Whether they were now discussing a clause or not was not very apparent. The hon. and learned Attorney General had declined to discuss the clauses, because hon. Gentlemen who might be expected to oppose them were not prepared to state the full grounds of their opposition. The consequence would be that after passing all these clauses at the proper time when, if at all, they should be minutely analyzed and discussed, it was to be expected that a future time there would be a fuller debate upon them at a stage when the House would not be in Committee, and when the clauses could not be properly analyzed, the result of which might lead to the passing of an imperfect and unsatisfactory measure. He regretted, therefore, that they were not proceeding now to discuss each clause at that—the proper time. The hon. and learned Gentleman who spoke last had forced that observation from him, for he had discussed all the clauses relating to that branch of the subject, instead of addressing himself to the particular clause before the Committee. In fact they were discussing the general principle, whether non-traders should be put upon the same footing as traders, or, at least, whether the laws relating to the two classes should be assimilated. But that principle ought to have been discussed upon the second reading, or upon the clause which led to that assimilation, and then there would have been a chance of arriving at a clear result. The hon. and learned Member for Dundalk (Sir George Bowyer) opposed the principle of such assimilation, while the hon. and learned Member for East Suffolk (Sir FitzRoy Kelly) supported it. But if he were in favour of the principle, why did he not apply himself to what was the main object of discussion at that moment—namely—whether the application of that principle was sufficiently guarded in extending it for the first time to the case of non-traders? Had the discussion taken place on that basis, they would have made advantageous progress with the Bill; but as they were now proceeding, the consideration of the protections which the non-trader ought to have would be postponed to a time when they could not discuss them satisfactorily. He was in favour of the principle of assimilation, and also of the clauses in the Bill relating to judgment-debtor summons. He held that they ought to proceed on the principle that whenever a judgment was obtained against a non-trader, or whenever a debtor became liable to have a judgment against him for the payment of a debt which he refused to pay, then the law which was applicable to him should be assimilated to the law applicable to the bankrupt. He had guarded the phrase because he entirely agreed with what fell from his hon. and learned Friend the Member for Belfast (Sir Hugh Cairns) as to how the non-trader ought to be protected. The non-trader ought to be pot in the position either of one who had had a judgment against him and who refused to pay his debt, or of one against whom a judgment might be obtained, but who evaded his creditors in such a manner as to prevent them from getting it. If the hon. and learned Attorney General would proceed on that principle, then he would go along with him to the full extent of the measure. But in Clause 82 the non-trader was not put into the position of one who had a judgment against him. The creditor was allowed to present a petition to the Court of Bankruptcy for the payment of the debt, or rather for an adjudication in bankruptcy against the debtor. He would advise the hon. and learned Attorney General to make Clause 82 applicable to the trader only, and, when they came to the clause relating to non-payment after the judgment debtor summons, to introduce another clause, drawn from Clause 82, to facilitate the creditor's process against a person who was residing abroad for the purpose of avoiding payment of his debts, and to enable the creditor to obtain judgment on proof that the debtor had received due notice of the claim against him. As the clause stood, the debtor might be made bankrupt before it was known whether or not he would pay his debts. The presentation of the petition was a stigma upon him which ought to be removed. Let the process be improved, let it be made to reach the man, whether he went abroad with or without his property, in such a manner that the moment judgment, or what was equivalent to it was obtained, the creditor could proceed upon it, and if he would not pay what he owed, the whole of his property should be taken for distribution among the creditors. Let everything be done to make the process speedy and effectual when once judgment had been obtained, but let the debtor have an opportunity of answering the claim before the stigma was placed upon him. If the hon. and learned Attorney General would adopt that suggestion, it would remove every objection to the assimilation of the two classes; and unless he did so many cases of hardship would undoubtedly arise. For instance, a gentleman might go abroad owing sundry debts, small in amount, but in the aggregate sufficient to render him liable to be taken into the Bankruptcy Court under the measure. A petition might be presented against him while he was abroad praying that adjudication in bankruptcy might be awarded against him, and the stigma might be fixed upon him before he knew anything of the proceedings, or had an opportunity of arresting them by instructing his solicitor to pay the debts. As the discussion of the principle involved in the clause had been postponed to another time, he would content himself with throwing out these suggestions to his learned Friend, who would, he hoped, consent to afford the non-trader the protection to which he was entitled. From the consideration which he and his learned Friend the Member for Belfast had bestowed on this question when in office, he was satisfied that the principle he had indicated was the right one, and it was upon that principle that they had intended to found the measure which they then had in contemplation.

THE ATTORNEY GENERAL

said, he entirely concurred with his right hon. Friend, and he lamented that the noble Lord should have warned the Committee against proceeding with a discussion which the House would never be in a better position to undertake, as was proved by the speeches of hon. Gentlemen opposite Indeed, he should earnestly solicit a continuance of the debate after the luminous speech of his right hon. Friend. With the spirit of that speech he entirely concurred. Indeed, had he been admitted into the se- cret counsels of his right hon. and learned Friend, he could not have had a more perfect agreement with him than that which was expressed on the face of the Bill. He understood his right hon. Friend to lay down the principle that a non-trader ought to be put in the position of a person who had had a judgment recovered against him, or against whom a judgment might be obtained. It was entirely with reference to the latter position that the 82nd Clause had been framed; and it was because the law would have been defeated bad the remedy been confined to the judgment-creditor that it had been extended to the man who was entitled to become one, although not yet in that position. A creditor was placed by the 82nd Clause in exactly the condition of one who had a right to obtain a judgment against a debtor. In 1852 the Common Law Procedure Act was passed for the purpose of facilitating the service of process; and accordingly it was laid down as follows—that when the defendant in an action, being a British subject, was out of the jurisdiction of the superior courts, it should be lawful for the plaintiff (that is, the creditor) to issue a writ of summons, and that the time for the appearance of the defendant should be regulated by the distance from England of the place where he was residing; and on the Court or Judge being satisfied that the cause of the action had arisen within the jurisdiction, and that the writ had either been personally served on the defendant or reasonable efforts had been made to do so, and that it had come to his knowledge, and that the defendant either wilfully neglected to appear to such writ or was living out of the jurisdiction of the Court in order to defeat and delay his creditors—then the Court, being satisfied of these things, was entitled to award judgment against the defendant. In the present measure he had done the very same thing. The creditor was, under this clause, placed in precisely the same position as a creditor who was now entitled to have judgment given; but instead of the execution being for the benefit of the individual creditor who happened to be first in the race, it would be an universal execution which would secure a just and equal distribution of the property of the debtor among all his creditors, all of whom were equally entitled to judgment. That universal execution would be carried out under the name and by the law of bankruptcy; and the clause under consideration only applied to the absconding debtor the existing law, and laid down the principle that when a creditor had proved the position of his debtor to be such as he had described, he should be entitled to process, not limited to himself alone, but universal and general, for the benefit of all the creditors who were in a similar position. These were the grounds upon which this clause was brought forward, and he hoped that his right hon. Friend, whose objections were those of a lawyer and a statesman, would feel that this was a sufficient answer to them. The right hon. Gentleman the Member for Horsham (Mr. S. FitzGerald) had expressed a fear that a creditor would, under this clause, upon producing an affidavit containing the bare expression of his belief that his debtor had gone abroad, or remained abroad, with intent to defeat or delay his creditors, be entitled to an adjudication of bankruptcy. He could assure his right hon. Friend that he had been misinformed. The mains animus of the debtor in going or remaining abroad must be proved by overt acts, either of commission or omission; and, without evidence of such acts, no tribunal would act upon the mere belief of the creditor. The right hon. Gentleman the Member for the University of Cambridge (Mr. Walpole) had objected that the presentation of the petition would attach a stigma; but it must be observed that the petition was nothing more than a process of debt, nothing more than a writ; it was not a matter of publicity or notoriety, and could not be entertained by the Court unless it was accompanied by prima facie evidence that an act of bankruptcy had been committed. The hon. and learned Baronet the Member for Dundalk (Sir George Bowyer) asked, why not have the ordinary process of law? Did he not know that in nineteen out of twenty of such cases as the clause was intended to meet, the ordinary process of law was mocked at and evaded? When debtors went abroad they frequently put their property into the hands of some other person, who was the visible holder, but yet held under some secret trust. There were cases, also, in which friendly creditors entered into possession of estates, allowing the absconding debtors to receive the incomes from the land. Until they could get the debtor and examine him and make him answer questions, the power of obtaining execution and sequestration was utterly useless. Such was the fact, and it was in order to put an end to that state of things that the clause had been introduced.

The Bill would not be more stringent than common honesty demanded, and he trusted that he should be supported by the Committee in his attempt to bring the law of England into conformity with the character for honesty and integrity which the country had long enjoyed, but with which its laws had hitherto been far from corresponding.

MR. ROLT

said, he did not think the non-traders of England were liable to the imputation of want of honesty to which they had been subjected by his hon. and learned Friend. As, however, the Committee had adopted the 81st section he would not go into the general question, but would confine his remarks to the clause under consideration, which did not appear to him to afford sufficient protection to the non-trading portion of the community. By the clause it was proposed to make it an act of bankruptcy in a non-trader to go abroad with intent to defraud his creditors, or, being abroad, to remain there with a similar object, and, on application, supported by satisfactory evidence, power was given to the Court to order that a copy of the petition should be served upon the debtor, and that the debtor should appear with certain restrictions as to time and place. Such an application must necessarily be an ex parte proceeding, and nothing could be easier than for a man disposed to do so to give evidence sufficiently strong to induce the Judge to issue the order. Much would, of course, depend on the individual Judge, but in the great majority of cases all the obtainable evidence would be the oath of the applicant himself that the debt was due, that he had requested payment, and that on the following day his debtor left the country, as he was satisfied, and swore to the best of his belief, with the object of evading payment. As regarded the service of the petition, it was to be assumed that the Judge would grant a reasonable time; if, for instance, the debtor were in Paris, a fortnight would probably be allowed him to make his appearance. But, if service could not be effected, then the clause directed—with a variety of alternatives which might be read as if in a parenthesis—that, if on hearing the petition the Court should be satisfied that an act of bankruptcy had been committed, such debtor should be adjudged a bankrupt. The Committee would perceive that here both the proceeding on which the order was obtained in the first instance and that on which the ultimate ruling was obtained, were in their very nature ex parte, and thus a debtor who never had the least intention of defrauding any one, but simply happened to be absent for a time, might be adjudged a bankrupt without ever being heard in his own defence. A creditor had simply to say—"The last place I heard of my debtor, was so-and-so; I have inquired there and cannot find him; nobody knows anything about him;" and the impossibility of proving service was shown. In dealing with evidence of that kind it was not necessary that the creditor should be always unscrupulous; he might be hot or hasty, or there might have been some quarrel about his particular debt. The remedy suggested by his right hon. Friend the Member for the University of Cambridge (Mr. Walpole) would go far to meet the evils arising under the clause; and he did not think that the objection had been adequately met by the hon. and learned Attorney General. He ventured to submit that it was not enough to take the same proceedings to make a man a bankrupt which sufficed to procure a judgment. Let the Common Law Procedure Act be followed in the first instance, and then, on stringent proof that a debtor had exhausted his remedy on a judgment, and could not by means thereof obtain payment, let him apply to the Court for an adjudication of bankruptcy. If some further safeguard than was provided by the clause did not exist, persons living abroad would be placed in great peril; for he was sure the experience of his hon. and learned Friend would supply quite as many instances as had come under his own observation—where a case made on ex parte application was wholly displaced the moment that the other side had an opportunity of being heard.

MR. WALPOLE

said, what he had suggested was, that before a non-trader should be liable to the bankruptcy law, be should be in the position of a person who had judgment against him, and yet refused or declined to pay his debt. The difference between that and the measure as it stood was, that in the one case they would give every opportunity to a man to pay his debts before proceeding in bankruptcy; whilst, in the other, they allowed the creditor to proceed ex parte, though the debt might not have been demanded, and due diligence might not have been used to get the debt. The whole proceeding might be behind the back of the debtor. It was not a proceeding by writ to get the payment of his debt, but a petition to subject the debtor to an adjudication in bankruptcy. He would therefore move that words to the following effect be introduced into the first rule after the words "probably be found:"—"And also that the creditor has demanded or used due diligence to obtain payment of the debt; but that he is defeated in that object by some act or acts of bankruptcy committed by the debtor." All he desired was, that the debtor should have due notice of the steps being taken with regard to him.

THE ATTORNEY GENERAL

said, that the creditor must begin by proving that he was unable to obtain the debt by reason of the absence of the debtor; and by the right hon. Gentleman's (Mr. Walpole) Amendment, he would be required to show that he was unable to obtain it by reason of an act of bankruptcy on the part of a debtor. One of the rules already annexed to the clause, declared that the Court "shall, if satisfied that an act of bankruptcy has been committed, adjudge such debtor to be a bankrupt." This condition appeared to him sufficient to provide against the danger apprehended by the right hon. Gentleman.

MR. ROEBUCK

said, he wished to ask whether, by the rules under discussion, anything more need be proved by satisfactory evidence than that the debtor was in a particular foreign place?

THE ATTORNEY GENERAL

replied, that the creditor was required to prove that fact, in order to get from the Court an order that a copy of the petition should be served upon the debtor in the place in which he was proved to be; but after service of the copy was effected, or proof given that service could not be effected, the Judge must be satisfied of the commission of an act of bankruptcy before be could adjudge the debtor to be a bankrupt.

MR. SEYMOUR FITZGERALD

remarked, that what had fallen from the hon. and learned Gentleman the Attorney General only showed the extreme danger of the clause which the Committee had now under consideration. As had been observed by one of his hon. and learned Friends, it would be difficult to say what might be the interpretation which particular Judges would give to the clause. One might require less and another more evidence before making an adjudication. An exemplification had taken place in the course of the discussion. The hon. and learned Gentleman—who might at some time be called on to preside over the juris prudence of the country—said that under the clause it would be necessary not only to have the affidavit of the creditor that the debtor was abroad for the purpose of evading payment, but also proof of overt acts of bankruptcy. His hon. and learned Friend the Member for Belfast (Sir Hugh Cairns), who might also, in time, preside over the jurisprudence of England, was of a totally different opinion. In the case of a trader nothing was easier than to show overt acts. If he shut up his place of business and left the country, that might be considered an overt act; but it was perfectly possible for a non-trader to close his house and proceed to a foreign country without any intention of committing an act of bankruptcy. He had no objection to the assimilation of the law as between traders and non-traders, but be was inclined to believe that the only safe mode in which the bankruptcy law could be applied to the latter was by providing that it should be preceded by a judgment.

MR. BOVILL

said, the clause now under consideration dealt with persons who were abroad, but it did not provide that any previous notice should be given to them of the proceedings about to be taken, nor did it provide that a previous application should have been made to them for payment of the debt. It did not even require that any primâ facie proof should be given that an act of bankruptcy had been committed. The hon. and learned Attorney General had, no doubt, said, referring to the latter part of the clause, the Court of Bankruptcy must be satisfied that an act of bankruptcy had been committed. That was true, but that was not till after the order was made for the service of the petition, and he thought that no step should be taken till after the act of bankruptcy was proved in the first instance. He concurred in the Amendment of the right hon. Member for the University of Cambridge. He would venture to suggest to the hon. and learned Gentleman (the Attorney General), that the application should be made only after the recovery of a judgment, or that the clause should be amended by the introduction of the words proposed by his right hon. Friend.

MR. MONTAGUE SMITH

said, he was opposed to making non-traders bankrupt; but if a nun-trader were to be subject to the bankruptcy law at all, his absconding without paying his debts should be regarded as a test of insolvency, as it was in the case of a trader. It was neces- sary however, in the case of non-traders to take great care to ascertain that the person leaving the country without paying his debts, did so with a fraudulent intent. Some protection in that respect was evidently necessary, and was desired by those who were favourable to the principle of the clause on both sides of the House. He was not satisfied with the Amendments which had been proposed, and the subject required more consideration than could then be given to it. He would, therefore, suggest that the hon. and learned Attorney General should, now he had had the opportunity of hearing this discussion, withdraw the clause for a time, in order to remodel it, and bring it up in a more perfect form for discussion on some future occasion. Under the third rule, if the abode of the debtor could not be discovered, service at his last known place of residence in this country was to be deemed, as it was termed, "good service;" and, after a lapse of sixty days, the debtor not appearing, he was to be adjudicated a bankrupt. That was not just, as it was highly probable that, in many instances, notices so served would never reach the person for whom they were intended. A gentleman, for instance, might have his last place of abode at a lodging-house, and the proprietor would take no interest in the matter; or he might give up his house and the new tenant know nothing of him.

MR. PULLER

said, that his hon. and learned Friend, the Attorney General, had, in his opinion, fully established the necessity for making non-traders liable. No doubt, the difficulty was the fencing of such a step with proper securities. He thought the conditions upon which the bankruptcy was to be adjudicated ought to be modified. For instance, where it turned out that the information was incorrect upon which an order to serve the notice abroad bad been obtained, then the creditor ought to be compelled to make a service at the last known place of abode of the debtor. In every case there should be either actual or constructive service; but if the House looked at the 4th rule of the 82nd section they would see that there were three cases provided for—the case of actual service, the case of constructive service, and the case in which service directed to be made abroad could not be effected; those three ought to be reduced to two, by expressly requiring that in the last-mentioned case there should be service at the last known residence. He thought, moreover, that whenever the creditor was allowed to serve a copy of the petition at the last known residence of the debtor, he should be compelled to publish a notice in the Gazette, because it might often happen that there would be friends of the debtor in England, who, for his honour, would come forward and arrange with the creditor if they were aware of the debt. Again, the Act ought to provide that, if any person has been made a bankrupt in ignorance of the fact, and without having been actually served with a copy of the petition, he should be at liberty on returning to England to prove that such was the case; and having done so, and paid his creditors, the bankruptcy should forthwith be annulled.

MR. MALINS

said, that they had had much discussion on the subject, the sole object of which was that the non-trader should be properly protected. By passing the clause, however, they simply declared what was an act of bankruptcy on which a man might, on inquiry, be adjudicated a bankrupt. A desire had been expressed that the Act should only be applicable to non-traders after a judgment had been obtained against them. The only object of that could be to ensure to the debtor due notice. The second rule provided that Such order shall limit a time after such service within which the debtor is to appear on such petition, such time to depend on the place or country within which such petition is to be served, to that he proposed to add the words, "but in no case shall it be less than sixty days." That would afford all the protection that was necessary. He objected very much to the proposition that the creditor should have to get judgment before he could avail himself of this Act; for it placed him in the disadvantage and expense of having to go through two processes to effect one end. Without putting the creditor to that trouble and expense, he thought the Amendment he proposed would secure to the debtor sufficient notice. He would, therefore, propose that the notice should not he less than forty or sixty days in the first instance.

THE ATTORNEY GENERAL

said, that in the Bill of last year it was required that the mains animus—the fraudulent intent—should be proved, and this year he had added a provision that the creditor should also show that he had exhausted every means in his power of giving notice to the debtor. All these clauses were intended for that purpose, in order to secure full notice to the debtor. After all the proof had been given it was still necessary to prove the act of bankruptcy. Further security he did not see how he could give, but he would consider the clauses, and if he could insert any words to remove the species of nervous apprehension which seemed to be felt by hon. Gentlemen opposite he would do it.

MR. BOVILL

pointed out that the Attorney General would find proper words in the statute of 1852, which might be adapted to this Bill. What was wanted was that these proofs should be given before the writ was issued.

Clause agreed to.

Clause 83 (Lying in Prison and Escaping out of Prison),

MR. EDWIN JAMES

said, that by the clause it was enacted that a debtor lying in prison for fourteen days should be deemed to have committed an act of bankruptcy. He thought a distinction ought to be drawn between the case of a trader lying in prison and that of a non-trader. It might happen, for instance, that a young man might be thrown into prison for damages in an action, say for breach of promise, or other breach of social duties, and though he might have ample means to disharge his liability, fourteen days would be too short a time to allow him to realize them. The case of traders and non-traders was very different, and a distinction ought certainly to be drawn between them in this respect. He would suggest an extension of the time in the case of non-traders, and with that view he should move to insert the words, "extending the time in the case of non-traders to lying in prison for three calendar months."

THE ATTORNEY GENERAL

said, the point involved was a delicate point, and he should be happy to adopt the suggestion of his hon. and learned Friend, and make the distinction between the trader and the non-trader; but a great difficulty would arise when they came to consider the latter clauses in the Bill. One of the principal points of the Bill, and that which he much favoured, was the endeavour it made to lay a foundation for the abolition of imprisonment for debt. He thought that any debtor who had been in prison for fourteen days might, at the end of that period, be discharged from prison on an adjudication of bankruptcy being made against him by one of the registrars, who would attend the gaol for the purpose. In his opinion it was a useless thing to send a debtor to prison. The present law was that if a man remained in prison for twenty-one days it was an act of bankruptcy. He thought it desirable to shorten the time to fourteen days, for no man would permit himself to lie in prison for that period if he had creditor money to discharge the debt. He believed that a great part of the arrangements of the Bill would be destroyed if it were decided that the long period of three months in prison should be required in the case of a non trader. He should be glad if the clause were agreed to upon the understanding that it should be considered on a future occasion.

MR. MOFFATT

said, he thought the time allowed to non-traders should be longer than was provided for in the clause. The time for making arrangements was so short that many persons who wished to avoid the discredit of being declared bankrupts would not have it in their power to do so.

MR. MONTAGUE SMITH

pointed out the real distinction which existed between a trader and a non trader, the former of whom was bound always to have within his reach the means of paying his debts, while a non-trader was different, and very often could not realise his property. He thought it unfair that he should have all the stigma of a bankrupt attaching to him merely because he was occupied more than fourteen days arranging his affairs in prison. At the same time he was of opinion that three months was too long a time to allow.

MR. AYRTON

said, he had no opinion to give on the particular proposition made by the hon. and learned Member for Marylebone; but he thought that if the non-trader was to be absolved from his debts in the same way as the trader he ought to be brought under the full stringency of the law. Commercial men had given evidence before a Committee of that House to the effect that there was a lower tone of commercial morality in this country than on the Continent, and the reason they assigned was that of the looseness of our bankruptcy law. On the Continent none but a trader could be discharged from payment of his debts; but in this country a person known as a non-trader could, by buying and selling some one article, get into the Bankruptcy Court, and there free himself from the payment of his debts. They were now, by this Bill, putting it in the power of every non-trader to be absolved from his debts, and in that case they ought to bring him under all the requirements of the law of bankruptcy. He was afraid we were going in the direction of the immorality of the United States; not in the direction of the morality of the Continent of Europe.

MR. BARROW

said, that hon. Gentlemen had not looked to the practical view of the subject. It appeared to him desirable both for debtor and creditor that the non-trader, whose property generally was not of so convertible a character as that of the trader, should have a longer period than fourteen days to make arrangements either to dispose of his property or to raise money for the payment of the debt. He thought that three months would be too long for that purpose; but, on the other hand, the time allowed by the Bill was too short.

MR. EDWIN JAMES

said, he was willing to withdraw his Amendment if the hon. and learned Attorney General would give the non-trader the option of finding security.

THE ATTORNEY GENERAL

said, he would reconsider the subject and bring up an Amendment on the Report.

Amendment withdrawn.

Clause agreed to, as was Clause 84.

Clause 85 (Trader Debtor suffering Execution to he Levied),

MR. AYRTON

said, he wished to have an explanation of the clause, which was not clear as to the comparative position of creditors who received money or seized assets from a debtor after bankruptcy.

THE ATTORNEY GENERAL

said, that the principle of the clause was that if a man permitted his property to be taken in execution and sold, that was to be taken as an act of bankruptcy. A subsequent part of the clause provided what should be done in the event of there being no adjudication. Great care was taken to treat the seizure and sale so that the notoriety of it should be accepted as notice of an act of bankruptcy. If the debtor were adjudged a bankrupt within thirty days from the date of seizure, the money received by the execution creditor must be paid by him to the assignee under the bankruptcy.

SIR FITZROY KELLY

said, that among the disadvantages of this not being a consolidation Bill was that of being obliged to look back to the Bankrupt Act now in force to see how the clauses of the present Bill would work.

MR. HODGKINSON

said, that if a creditor, in the exercise of his rights, ob- tained an execution against a debtor, it was, no doubt, undesirable he should have an opportunity of monopolizing the estate to the prejudice of other creditors. But it also seemed desirable, on the other hand, that the creditor who brought an insolvent debtor to a reckoning should not be placed in a worse position than the other creditors by the expenses he had incurred being added to his debt. He, therefore, would move to add at the end of the clause, "but in all cases in which an execution shall be levied, the costs of such execution and of any seizure and sale thereunder shall be a first charge upon the goods seized and upon the proceeds of the sale thereof, and may be deducted from such proceeds."

MR. MONTAGUE SMITH

said, the law had hitherto favoured the active creditor, and his costs ought to be secured to him.

THE ATTORNEY GENERAL

said, he believed that the usual course was for the sheriff to deduct the expenses of the sale and seizure out of the proceeds and to hand over the clear balance to the execution creditor. He thought the Amendment was unnecessary.

MR. HODGKINSON

pointed out that the costs incurred by the execution creditor subsequent to the judgment would still be unprovided for.

MR. EDWIN JAMES

said, that the subsequent costs amounted to hardly anything. He suggested that some provision should be made to meet a state of things which often happened in the Metropolis. The large drapers, and other wholesale dealers, who wished that this Bill should become law, and who also, he believed, desired the passing of a Bill by which every insolvent estate should pay 20s. in the pound, were in the habit of setting persons up in their own business, retaining a warrant of attorney, and selling up these persons if necessary. That was an abuse which should be guarded against.

Amendment withdrawn.

Clause agreed to.

Clauses 86 and 87 agreed to.

Clause 88 (Debtor Summons),

THE ATTORNEY GENERAL

proposed to insert the following words after the word "execution," in the first line of page 22:—"in respect to any debt amounting to £50 or upwards."

Amendment agreed to.

MR. EDWIN JAMES

observed that the clause provided "that every judgment creditor who is or shall be entitled to sue out against a debtor a writ of capias ad satisfaciendum or to charge the debtor in execution shall be entitled, at the end of one week from the signing of judgment, to sue out against the debtor, whether he be a trader or not, a summons called a judgment debtor summons, &c. He proposed to allow more time to non-traders, and should move to insert the words "at the end of one calendar month" in respect to persons not being traders.

THE ATTORNEY GENERAL

said, he would assent to the Amendment.

Clause as amended agreed to.

Clauses 89 to 115 agreed to.

Clause 116, (Persons Imprisoned under County Court Acts are not to be Released),

MR. AYRTON

said, the release given to all other debtors who surrendered their property made the retention of the power of imprisoning debtors by the County Court Judges an anomaly. They had provided for paupers getting out of prison, and for turning out of prison those persons who did not wish to leave it. But another class of persons, principally the working classes, appeared to be exempted from all benefit of the change in the law. Why should those who came under the jurisdiction of the County Courts he alone liable to imprisonment? Every other class, by surrendering their property, could absolve themselves from the operation of the law except those who contracted debts under £20. The law ought to be the same with respect to the man who owed a few shillings as the man who owed £10,000.

THE ATTORNEY GENERAL

said, he did not propose to interfere with the power of legal imprisonment by a Court in cases of fraud. That power the County Courts would retain; the cases in them were not all cases of pure debt.

MR. COLLIER

said, an Act passed last Session of Parliament, which he brought in himself, limited the jurisdiction of the County Courts in the matter of imprisonment for debt.

MR. AYRTON

said, the jurisdiction of the County Courts to which he alluded was still in existence, and if the law of imprisonment was to be brought into consistency the clauses to which he referred in the County Courts Act must be repealed.

Clause agreed to.

Clause 117 agreed to.

Committee report Progress; to sit again on Monday next.