COMMITTEE. (Hansard, 25 February 1861)

THE ATTORNEY GENERAL
said, he wished to propose an Amendment which should have the effect of leaving it open to the majority in value of the creditors to resolve that the proceedings in Bankruptcy should be transferred to any County Court. He wished it to be competent for Creditors to take the case into any County Court that might be most convenient for themselves.

§ MR. SCHOLEFIELD
said, he would propose as an Amendment, the insertion of the words "number and" before the word "value," in the 14th line; the object of his Amendment being to give the majority in number as Well as in value of the 881 creditors the powers proposed to be conferred by the clause.

§ MR. BAINES
stated that the Chamber of Commerce of Leeds were of opinion that the majority of creditors, as well as the value, should be taken into account; and he, therefore, should support the Amendment.

LORD HENLEY
said that he had been waited on by several members of Chambers of Commerce who wished this alteration to be made. But, after mature consideration, he had come to the conclusion that it would be better if the alteration were made in the next clause.

§ MR. MURRAY
said, he was of opinion that it was very desirable that in some instances the number of the creditors should be taken into consideration. It very often occurred that in small bankruptcies a father, brother, or some other relative turned up as a creditor to a large amount, when if there had been no bankruptcy no such debt would have been demanded. The proposal was that the majority in value of the creditors should have the disposal of the assets and the regulation of the proceedings in bankruptcy; but he thought that in small bankruptcies, where the assets did not exceed £2,000 or £3,000, and where an uncle or relative came forward and claimed to be the largest creditor, regard should be had to the number of the creditors. He thought it desirable that in the clause under consideration the word "number" as well as the word "value" should be inserted, but that in the other parts of the Bill it should be value only.

THE ATTORNEY GENERAL
said, that the principle of the Bill was to include numbers as well as value wherever a choice such as that of assignee was to be made, but to give to value the preponderance where anything connected with the disposal or the administration of the estate was concerned. A question might arise as to what tribunal should have the administration of an estate. He would take a case in which twenty creditors had debts to the aggregate amount of £1,000, and two or three other creditors with debts amounting to £8,000 or £9,000, the proportions being as nine to one. The smaller creditors might be desirous to have the estate administered in the County Court; while the larger creditors might be anxious to put it into the hands of a superior and more efficient tribunal. The question was should the men who had £8,000 or 882 £9,000 of debts prevail over those who had only £1,000; or should the numbers who made up the sum of £1,000 preponderate over the smaller numbers who represented the larger sum? Acting on the principle that the estate ought to be regarded as the property of the creditors, it appeared to him that those creditors who had the largest interest in the estate ought to have a predominating voice in determining what tribunal ought to administer it. It was a question, however, for mercantile men to decide, and he should be ready to adopt any decision the Committee might come to which was not a departure from the general principle of the Bill. It had been said that a relation of the bankrupt might bring in a large debt, but it should be recollected that debt would not be admitted without examination; and if a relation was entitled to rank as a creditor, he did I not see that he should be deprived of his right merely because he was a relation.

§ MR. BOVILL
then moved the insertion, in line 20, after the word "shall," the words "be at liberty to;" the object of the Amendment being to give the Court a discretionary power of sending eases to the County Courts, instead of making it obligatory. In the transference of proceedings in bankruptcy being transferred to the; County Courts they ought to consider well the position of the County Court Judges. There were many bankruptcy cases of great importance, which it might be expedient to consider before the Court above.

THE ATTORNEY GENERAL
remarked, that if the resolution of the creditors were to be followed up by a contested application, the result would be that litigation would probably arise out of every one of these meetings. He could only repeat his feeling of regret that new duties of a laborious character were to be thrown upon the County Court Judges without their receiving additional remuneration.

§ SIR FITZROY KELLY
said, he was unavoidably absent when the question just alluded to by the hon. and learned Attorney General as to the necessity for granting additional remuneration to the County Court Judges was considered, but he (Sir Fitzroy Kelly) should certainly feel it his duty to take a vote of the Committee as to the amount at which the salaries of the County Court Judges should be fixed. He begged to recommend the subject to the attention of the hon. and learned Gentleman and his colleagues, so that the Committee might be 883 relieved from a very painful discussion en the subject.

§ MR. HADFIELD
proposed to add to the end of the clause the words "and the bankrupt shall be entitled to an order of discharge."

THE ATTORNEY GENERAL
said, that great inconvenience would be felt from the adoption of the words proposed, because the alteration would enable the bankrupt to go away and leave the creditors without the necessary information. He had no objection to substitute for the Amendment the words "and the bankrupt, having made a full discovery of his estate, shall be entitled to apply for a certificate of discharge." Security would, then, be taken that the bankrupt should be in attendance on the creditors until the estate was wound up.

§ MR. HADFIELD
said, he would withdraw his Amendment, on the understanding that the clause should be altered in accordance with the suggestion of the hon. and learned Gentleman.

§ MR. MURRAY
said, it would be desirable that the creditors should choose whom they pleased to be assignee, and not be restricted in their choice to one of their own body. He moved an Amendment accordingly to that effect.

THE ATTORNEY GENERAL
said, he had introduced the words objected to by the hon. and learned Gentleman in deference to the opinion of the House. It was thought that no person should be an assignee who was not a creditor. He should, however, prefer to alter the clause according to the Amendment of the hon. and learned Member.

§ MR. BAZLEY
supported the Amendment.

MR. MOFFATT
proposed after the words "assignee" to insert "as creditors' assignee."

THE ATTORNEY GENERAL
said, he should perhaps meet the hon. Member's views by leaving out after the words "upon the appointment of the creditors' assignee" the words the "powers and duties of the official assignee shall cease and determine; and"

§ MR. VANCE
said, that it often happened that the most desirable man could not be chosen, or would not take the duties. In the north of England commercial men would prefer that it should be left to the determination of three-fourths of the creditors in number and value whether the estate should vest in the creditors' assignee or the official assignee. He had no Amendment to propose, however, as the Bill was being hurried through Parliament so rapidly that the Chambers of Commerce and solicitors in bankruptcy bad had no opportunity of considering its provisions.

§ MR. MALINS
said, he was very much of the same opinion. He had that morning received twelve or fifteen communications from Chambers of Commerce and others interested in the Bill in different parts of the country, but he had been engaged all day, and had not had time to look at them. The Attorney General's Bill was only introduced on the 12th of the month, and had been pushed on so rapidly that hon. Members were at the greatest disadvantage, because they did not know the opinion of their constituents and of commercial bodies. A great feeling, however, existed against the trade assignee; and many advantages had accrued from the appointment of an official assignee, who could devote his whole time for the benefit of the estate.

MR. MOFFATT
said, that the Bill had met public approval, because it gave the creditors the management of the property. Very sufficient precautions were taken against abuses by trade assignees. He would be willing to accept the suggestion of the hon. and learned Attorney General. MR. GLYN said, he was sorry to see any objection raised to the clause. With regard to cases of malversation, so many portions of the Bill protected the public against them that no distrust need be entertained. The mercantile community, while giving due praise to official assignees, were very desirous that in the management of estates a little more should be left to the control of the trade assignees than was the case at present. What they complained of was that after a man was made a bankrupt, and the official assignee appointed, the trade assignees were very 885 little consulted, and the management of the estate passed away from them almost entirely.

§ MR. MURRAY
said, the question was again raised by this clause whether it was intended that a majority of the creditors in number or a majority of creditors in value, or both, should require certain things to be done. Now, following out the principle of the Bill, he apprehended that the proper course would be to state the major part of the creditors in value. He should therefore propose, in line 24, after the word "the" to insert the words "major part in value of the."

§ MR. COLLIER
said, he thought the Amendment was unnecessary, as the words proposed had been already inserted.

THE ATTORNEY GENERAL
said, he had received a number of letters suggesting alterations in the Bill which the writers would have found they needed not to have written if they had read the Bill or the interpretation clause. With respect to the expression "creditors present at a meeting," hon. Members would find, by reference to the interpretation clause, that it would include creditors represented by any person duly authorized in writing, and that the authority would not require a stamp.

§ MR. ROEBUCK
asked if it would not be better to give the power to represent an absent creditor to some public officer.

THE ATTORNEY GENERAL
promised when they came to the passage in the interpretation clause to add the words "official assignee."

MR. MOFFATT
said, that the Bill would not work if the conditions imposed on trade assignees by this, clause and Clause 185 remained. It was difficult without such penal restrictions to get persons to act as trade assignees. Their object, he thought, was to obtain men of standing and of high credit and reputation; but such men would never accept the office with the conditions proposed. This clause required that the trade assignee should give security for the amount of the debts he collected; but, in the commercial world it would be considered a great offence to 886 ask any one to give security where he voluntarily took an office for the benefit of others as well as himself. He proposed to strike out from after "assignee" to the end of the clause, and insert And if they shall so determine, the creditors' assignee may appoint any person to act as such manager, with such remuneration out of the estate as the majority shall think fit.

THE ATTORNEY GENERAL
said, the hon. Member read the clause as if it were a matter of obligation that security should be given by creditors' assignees, whereas there was no obligation. Under the clause creditors had power to choose certain persons, not being creditors, to be managers of estates, and to remunerate them for their trouble; and it was deemed a very wise thing that they should be enabled to impose conditions on those persons. It would be better to leave the clause as it stood, as it conferred very wholesome power; and could not, he thought, give offence to any gentleman, and he hoped the hon. Member would consent to withdraw the Amendment.

MR. MOFFATT
reiterated his belief that if the clause and Clause 185 remained the Bill would be utterly worthless. He had proposed his Amendment at the suggestion of a number of influential mercantile men, and if the Attorney General would promise to adopt it when they came to Clause 185, which was still more objectionable, he would withdraw it now, but otherwise he would press the question to a division.

THE ATTORNEY GENERAL
said, that if, when they arrived at Clause 185, the majority of the Committee were in favour of the hon. Member's Amendment he would defer to their opinion.

§ MR. BOVILL
thought that the clause giving power to appoint a manager was one of the most important clauses of the Bill, and that it could scarcely be too much appreciated. He would, however, suggest the alteration of the wording of the latter part of the clause so as to correspond with the Amendment already agreed to.

§ MR. VANCE
said, that as far as his own experience went, he believed that if any creditor were asked to become creditors' assignee, and thus to confer a great obligation on the rest of the creditors, and, at the same, told that he must give security, although he would receive no remuneration whatever for his services, he would spurn 887 the offer with the greatest indignation. The clause, he was quite sure, would never work well, and would not satisfy the mercantile community, but, as the Attorney General seemed determined to insert it, he could say no more.

§ MR. STEUART
said, he thought the hon. and learned Attorney General was asking the wrong person to give security. The clause did not provide that security should be taken from the manager, and yet the manager was likely to be the dangerous person, and not the creditors' assignee. He would have the custody of the property to a considerable extent, the collection of the debts, and the winding-up of the whole estate.

§ MR. BEECROFT
said, he was of opinion that, instead of appointing a manager, it would be far better to pay the creditors' assignee and make him responsible.

THE ATTORNEY GENERAL
said, the principle of the clause in that respect was borrowed from the law of Scotland where it had worked admirably. In that country an official factor was appointed over an estate, and received remuneration; a committee of creditors controlled and advised him in the execution of his duty; and, according to the best information he had been enabled to get, the expense of winding-up a bankrupt estate in Scotland was about 13 or 14 per cent, whereas, in England, it was between 33 and 34 per cent. There was a great concurrence of opinion in the mercantile community in favour of the clause. He had no objection to insert after the words in the thirtieth line, "called for the purpose," the following, "a majority in value of the creditors present." It would be the fault of the creditors if any improper person be appointed manager.

THE ATTORNEY GENERAL
said, he thought it desirable to insert the words "or manager" after the word "assignee," so as to give the creditors power to remove the manager for any misconduct. He moved the addition of the like words throughout the clause.

§ MR. SCHOLEFIELD
said, that the 888 clause restricted the payment of monies by creditors' assignees to the Bank of England, to which there was this objection—that the Bank of England allowed no interest to depositors as other banks did. He should, therefore, move to insert, after the words "Bank of England," "or such bank as the creditors at their first meeting shall direct." No harm could be done by such a provision. The creditors were dealing with their own money, and it seemed but fair that they should choose where it should be invested.

§ MR. MURRAY
said, he would propose an Amendment which would come before that of the hon. Member. He proposed to leave out the words "not necessarily retained for current expenses." He thought that all money received should be paid in, and that all the money required for expenditure should be drawn out. Retaining those words would leave a loophole for the assignee keeping money in his hands which ought to be in the Bank.

THE ATTORNEY GENERAL
said, that the words "necessarily retained for current expenses" imposed a great check. The inconvenience of striking out the words would be, that the creditors' assignee would be compelled to pay every small sum he received, even down to £5, into the Bank, and he would not be able to get anything out without going to the official assignee; and the result would be that costs would be incurred for getting out £5, £10, or £20, as it might be required. The words "necessarily retained" throw on the assignee the onus of proving the necessity.

MR. GLYN
said, there was much observation abroad as to the large balance which would be kept at the Bank of England on this account. He was not prepared to say that some commission ought not to be charged by the Bank; but, at the same time, it ought to be regulated.

§ MR. ALDERMAN SALOMONS
said, he had always heard in the City of London the opinion that for commercial service there should be a commercial remuneration, and he could not see why the creditors' assignee should not have some remuneration for his services. The great objection made to that was on account of the large sums carried off by the official assignee, and creditors had felt that it would be better if some of their own body had the management of their own affairs. He thought it was better that the money should be paid into the Bank of England, 889 as the fact that no interest was allowed would probably cause the assets to be collected and divided with all possible expedition.

§ MR. AYRTON
said, he was of opinion that the manager would be the person who would interfere on all occasions respecting the estate. He doubted if the assignee would undertake any duty, and if so, the necessity for the course recommended by the hon. Member for Greenwich (Mr. Alderman Salomans) would not arise.

§ MR. ROEBUCK
said, he agreed with the remarks of the hon. Member (Mr. Ayrton). There would be a manager in place of an official assignee, and that manager would be appointed by the attorneys to the estate.

§ Mr. SCHOLEFIELD
said, he would then propose his Amendment.

§ MR. MURRAY
said, he wished to draw attention to the state of the account with the Bank of England. For 1S59 and the four or five preceding years, the Bank of England had an average balance of between £80,000 and £100,000, and for keeping the cash accounts they charged between £3,000 and £4,000 a year. There was no charge for receiving the money, hut there was a charge of one-fourth per cent for paying it: so that, in point of fact, every creditor who was entitled to £100 of dividend had 5s. to pay to the Bank of England in addition to other charges. The Report of the Commission, of which the right hon. Gentleman the Member for Cambridge University (Mr. Walpole) was chairman, drew attention to the necessity of making some alteration, and he thought that a good time for effecting a diminution in the charges. The Bank of England having a balance of from £50,000 to £100,000 a year, a running fund, it struck him that the least they could do was to receive the money and pay it without any charge whatever. He trusted the hon. and learned Attorney General, during the progress of the Bill, would take the matter into his own consideration.

THE ATTORNEY GENERAL
said, that in introducing the Bill of last Session he drew the attention of the House in a pointed manner to the charge made by the Bank, and stated that he had no doubt an arrangement could be made with the Bank, by which he hoped at least that two-thirds of the charge might be saved to the creditors. He had no doubt that some such 890 arrangement might now be made. At the same time, it was only fair to the Bank that he should call the attention of the Committee to the fact that these payments were made in different parts of the country, and that might be a reason for allowing some percentage to the Bank for making these payments. The hon. Member might feel assured that the subject would not escape his attention; and, undoubtedly, great care would be used in endeavouring to make a more advantageous arrangement with the Bank for the future. With regard to the Amendment proposed by the hon. Member for Birmingham (Mr. Scholefield), he was sorry that he could not assent to it. When the alteration was made by which official assignees were appointed, the system of having private banks was entirely put an end to, and he thought most judiciously; for, under the old system, when the creditors chose the bank, they were never able to ascertain whether certain sums of money might not be left in the banker's hands undistributed. Accordingly, when the new system was introduced, the official assignees exerted themselves, and they found that very large sums of money were retained by different bankers throughout the country, who had profited by the detention of these monies for an indefinite period of time, and which might have been held until the crack of doom if it had not been for the new system. He could not by any means consent that money should be left in the hands of private bankers. When paid into the Bank of England, and it was carried to one account, it was impossible that it could be lost sight of. He thought it would be a very injurious thing to permit banks to bid, as it were, in competition for creditors' money by offering them a certain amount of interest. He hoped the Committee would adhere to the present practice, which ensured the payment to the whole body of creditors of every shilling of the estate, which might not be the case if the money were paid into private banks.

§ MR. SCHOLEFIELD
said, he should not press his Amendment against the opinions of the hon. and learned Attorney General.

MR. PAGET
said, that the clause in its present shape limited too much the func- 891 tions of the official assignee. He would leave it to the creditors' assignee to state what debts should be recovered by the official assignee. He should, therefore, move to insert in the clause the words, "All such debts due to the estate which the creditors' assignee may require."

MR. BAGLEY
seconded the Amendment.

§ MR. MURRAY
said, he hoped the clause would be allowed to remain as it was. The Amendment would at once put an end to the principle of the Bill, which was to leave the collection of the debts to the creditors' assignee.

§ MR. EDWIN JAMES
remarked, that the adoption of the Amendment would lead to much confusion and expense in the management of estates.

§ MR. AYRTON
suggested that the clause might be made a little more elastic.

THE ATTORNEY GENERAL
said, that the Amendment proposed would never answer the purpose for which it was intended. Let them take a debt of £150, and suppose the creditors' assignee should direct the official assignee to get in that debt, resort must be had to the services of a solicitor. In that case, he would much rather it should be done under the immediate control of the creditors' assignee than that the debt should be handed over by him to the official assignee, who, in his turn, would have to resort to legal assistance. But in the case of small debtors the official assignee had a number of clerks, and as soon as a man was made bankrupt he would send round a printed circular requiring them to pay their debts. If that was not done the official assignee could then have resort to summons before the Commissioner, or to proceedings in the County Court, and he would discharge the debt much more readily and economically than it could be done by a solicitor.

MR. PAGET
said, he would not press the Amendment, but he hoped the clause would be postponed, as there was a general feeling in the country in favour of the proposal he had made, and it would be well to give time duly to consider the matter.

THE ATTORNEY GENERAL
said, that it would be competent for the hon. Member when the Report was brought up, to move the omission of the clause, and to substitute any well-considered clause which he might have arranged in the meantime.

§ MR. ROLT
observed, that such postponements had rarely any other results 892 than shifting the period of discussion on the substance of clauses; but he ventured to think that these clauses would require alteration at some future time. To pass the clauses in their present shape would be to add chaos to the present confusion. If the proposal in the Bill were some well-defined scheme of making the official assignee, paid by salary, act under the supervision of the creditors it would be intelligible. But as the Bill stood, with the divived functions of the two assignees, he was afraid it would not be found to work well.

THE ATTORNEY GENERAL
said, that there never had been more prophecies of failure than with regard to the Testamentary Jurisdiction Bill; and yet no law had been found to work more quietly or more efficiently than that. He thought there ought to be an efficient audit of both assignees' accounts; and it was a simple process for obtaining that audit which excited the alarm of the hon. and learned Gentleman.

§ MR. AYRTON
suggested that some difficulty might be experienced under the clause in case of a business being carried on by the creditors, and he therefore recommended the insertion of the words "if the assignees should so require."

§ MR. COLLIER
said, he thought the clause was better as it stood.

§ MR. AYRTON
said, he should propose the omission of the clause. Clause 163 gave power to make the future property of a debtor available for the payment of his debts if he had misconducted himself towards his creditors; but Clause 141 was an absolute clause. It was confined to persons connected with the public departments; but he did not see why, if its principle was sound, it should not be equally extended to the servants of the Bank of England, of railway companies, and other private establishments. The Bill provided that any person surrendering his property to his creditors, and who had conducted himself honestly, should receive an entire discharge for past debts, but under the clause persons in the employment of the State would be subjected to an exceptional treatment, their future incomes being proposed to be made available for past debts.
893 He did not desire to withdraw such a power from the Court in case of fraud, but he was anxious to see equal justice done to all classes of the community, and he maintained that there was no ground for making this distinction between the employés of the Government and other persons. He would, therefore, move the omission of the clause.

THE ATTORNEY GENERAL
said, the clause was taken almost verbatim from the Insolvent Act, 1 & 2 Vict. c. 110, s. 56. Certain discharged bankrupts were in the enjoyment of half-pay, retiring pensions, or settled salaries for life. Their pensions or allowances were, in point of fact, their life estates, and undoubtedly some portion of them ought to be taken for the payment of their debts. It frequently happened, however, that these allowances partook of the nature of retainers for future services, and in such cases only such a proportion of the income ought to be taken for the creditors as would leave the public employé a sufficient maintenance to enable him to discharge the duties of his office. If a man for example, had a retiring pension of £800 or £1,000 a year there was no good reason why a certain part of it, after providing him with a sufficient livelihood, should not go to his creditors. His hon. Friend asked, why not make the clause universal? But the servants of private employers were in a very different position from the servants of the Government. They held their situations only durante bene placito, and their earnings could not, therefore, be dealt with as a settled permanent source of income. The only question was whether the clause went far enough; because, in the case of retiring salaries, it was doubtful whether the whole ought not to be taken like any other life interest.

§ MR. AYRTON
said, the hon. and learned Gentleman had not answered his main objection to the clause. It was true the provision existed in the Insolvent Act, but the principle of that Act was overturned by the principle of this Bill. The Insolvent Act only gave the non-trader exemption from arrest, all his future property being liable till the day of his death for the payment of his debts. This Bill, on the contrary, declared that the non-trader on surrendering his property at the moment should be entirely discharged from his debts, unless he had been guilty of fraud; but the liability of a bankrupt's future earnings for past debts was to he kept 894 alive by the clause under consideration against a particular class of the community only. He asserted that what a man earned by his exertions in the public service could not fairly be distinguished from what a man earned in the service of the Bank of England, where his situation was as permanent as any under the Government. If a man's income was in the nature of a life estate it would pass to the assignees; but if it arose from services to be rendered, then it in no respect differed from the salary given by a public company. The clause was, therefore, not applied impartially.

THE ATTORNEY GENERAL
said, that retiring pensions would not pass under a general assignment in bankruptcy, and therefore had to be dealt with under some such special power as that given by the clause. Under the present law of insolvency, if a man were discharged having a salary of this kind he might be brought up de anno in annum, and so much of his salary be assigned to his creditors as the Court might think right. What the Court could now do annually he proposed by the Bill that it should do once for all on the discharge of the bankrupt.

§ MR. AYRTON
said, he objected to this clause also, by which the salary of a clergyman might be applied to the payment of his debts after his insolvency. A clergyman would be ill qualified for the performance of his duties if the stipend which was attached to his office was taken away from him. The clause was an injurious one, and he hoped it would be struck out.

§ MR. COLLIER
said, he did not see any reason, on the ground of religion or morality, why the property of a clergyman should be protected after his bankruptcy any more than the property of other people. If a clergyman obtained credit upon his known possession of a fixed income he ought to be liable to the same consequences as other people. The clause, in fact, was only an extension of the preceding clause relating to pensions.

THE ATTORNEY GENERAL
said, he was pleased to find that the hon. Member for the Tower Hamlets (Mr. Ayrton) was so great a friend to clergymen. He thought the clause would be beneficial rather than prejudicial to the clergy, by not creating any invidious inequality, such as that sug- 895 gested by the hon. Member, in their favour. The clause proposed that if a clergyman had an income of £2,000 or £3,000, and ran into debt so as to bring himself into bankruptcy instead of afterwards keeping his carriage, and living at a proportionate expense, he should dispense with such luxuries for a time, live humbly, and pay his debts; and it could not be doubted that his ecclesiastical duties would not be worse performed in consequence of such a mode of living. The clause, however, introduced but little novelty, for, according to the present state of the law, the Bishop was permitted to step in and demand a certain portion of the income for the payment of a curate to perform the duties of the living. The clause proposed that the Bishop might select the bankrupt clergyman as the person to perform the duties, and receive the pay thus appropriated by the Bishop from the assets.

§ MR. AYRTON
said, his observations applied to clergymen with small incomes; and, if the Attorney General had given the Bishop a power to remove from his post a clergyman who should become bankrupt he should have been much obliged to him. But he thought that the income which was intended to pay for duties to be performed in a parish or district, ought to be appropriated solely to that purpose. He did not desire to give clergymen a power to con tract debts with impunity, but thought the parishioners ought to be considered as well as the creditors of a bankrupt clergyman.

§ MR. MALINS
observed, that the clause was but the re-enactment of the existing law.

§ MR. EDWIN JAMES
said, if the Bishop was to be compelled to remove a bankrupt clergyman from having his living, so as to prevent him from any future means of paying his debts, it would be better to pass another Act of Parliament making the Bishop pay the bankrupt's debts. He thought that his hon. and learned Friend had misconceived the effect of the clause. Clergymen were often subscribers to banks and other institutions, which sometimes failed. In fact, clergymen might become bankrupt by misfortune, and it would plainly be a great injustice to deprive them altogether of their livings on that account.

§ MR. SCHOLEFIELD
suggested that 896 there was an apparent inconsistency between the clause and Clause 131. By Clause 131 it was provided that a majority of the creditors should have power to remove an assignee; but by the clause before the Committee any two or three creditors might apply to the Court, which could remove the assignee without the concurrence of the majority of the creditors.

THE ATTORNEY GENERAL
said, he thought the two clauses were perfectly consistent. Clause 131 rendered the removal of the assignee a matter of course, where a majority of creditors in number and value desired it; but this clause gave power to the Court, upon complaint of any creditor, to remove the assignee upon proof of misconduct.

§ MR. EDWIN JAMES
suggested, that the provisions of the Bill would be improved if they were extended to meet the case of a bankrupt who had effected insurances, thereby rendering himself liable for future premiums, though he had relinquished all his property. In point of law this was admitted to be an evil; and to such an extent was the hardship felt that a case had come to his knowledge in which a man regularly took the benefit of the Insolvent Act and was put into prison every year when the premiums became due.

THE ATTORNEY GENERAL
said, his hon. and learned Friend had but anticipated his feeling. Any clause introduced with the object he had in view might also be extended to the case of bankrupts who, having taken shares in companies, though discharged by the Court, had been held to be liable for future calls.

§ MR. MALINS
said, he wished to ask the learned Attorney General if he had any objection to abolish the disqualification at present existing that a bankrupt should not receive a certificate after it had been once refused by the Commissioner? He knew of two cases where persons were exiles because they could not obtain certificates; and in one case the bankrupt had written to him to say that the cause of his failure was that of giving too much credit to certain customers; that he had no certificate, no protection, and no means 897 of obtaining a livelihood. He (Mr. Malins) thought power should be vested in the Judge to enable him to give certificates to a bankrupt without the consent of the creditors.

THE ATTORNEY GENERAL
said, that according to the existing law, a most severe power was given to creditors. If the discharge or certificate of any bankrupt was refused, any creditor who had proved a debt was entitled to go to the Commissioner and demand a certificate of that debt, and upon such certificate he could throw the debtor into prison. The same process might be repeated by each creditor who had so proved. The Commissioners of 1854 reported against that power as extremely severe, and by the present Bill it was proposed to repeal the clauses which allowed of these proceedings; and in consequence of that repeal he ventured to ask that the Chief Judge should, under certain circumstances, be empowered to commit the bankrupt to prison for twelve months. He thought it right that if the bankrupt was to be imprisoned, the Judge, and not the creditor, should imprison him, and perhaps this arrangement would effect the object which his hon. and learned Friend had in view.

MR. WALFOLE
said, the clause provided that any bankrupt charged with a misdemeanour should be tried by a jury if he should require it. He wished to move that the words "if the bankrupt should require it" should be omitted. He thought that in all cases where a bankrupt was put upon his trial for a misdemeanour he should have the benefit of a jury as a matter of course. He believed that that would be a great protection to the bankrupt; and he also thought that all cases of misdemeanour would be better tried by a jury than by a single Judge.

THE ATTORNEY GENERAL
said, that he had been induced to adopt the clause as it stood for these reasons. In a great many cases they could not possibly have a trial by a jury without great inconvenience and expense. It constantly happened that in bankruptcy the matter turned upon a great mass of accounts and trade transactions, which it would be very difficult to bring to the mind of a jury; but which the Judge or the Commissioner might be perfectly familiar with in consequence of antecedent proceedings under the bankruptcy. If bankrupts were necessarily tried by juries it would cast upon them the very onerous duty of obtaining 898 the assistance of counsel, and he believed many bankrupts would prefer having the charge investigated by a Judge alone.

§ MR. ROEBUCK
suggested that if a bankrupt were to demand a jury he would put himself in opposition to the Judge, and he feared would bring into play an element of antagonism between the bankrupt and the person who was to try him, which ought not to exist. One of the great faults of continental procedure was that the Judge was put in opposition to the prisoner.

THE ATTORNEY GENERAL
said, his fears lay in the opposite direction; for if he himself were the Judge he knew he should prefer that there should be a jury in all trials for crimes, because it would relieve him from the unpleasant necessity of finding the prisoner guilty. He preferred to leave the clause as it stood rather than to adopt the Amendment proposed, for he had no fear that the Judge would be influenced by any feeling of anger towards a prisoner because he had demanded a jury.

§ MR. MELLOR
asked if it would not be desirable to give the assignees as well as the bankrupt the power of demanding a jury. There might be reasons also which would induce the assignees as well as the bankrupt to prefer to have the charge tried by a jury.

THE ATTORNEY GENERAL
replied, that the Judge had at all times the power of directing a trial by jury, which he thought would provide for the case suggested by the hon. and learned Member.

§ MR. GREGSON
moved as an Amendment that there be inserted in that part of the clause which declared it to be an offence in the bankrupt to carry on business "by moans of fictitious capital," the words, "or by means of accommodation bills for which no value has been received."

§ MR. ROEBUCK
said, he would ask the learned Attorney General if trade could he carried on without accommodation bills. He believed not; and if they put an end to accommodation bills they put an end to the whole system of trade.

THE ATTORNEY GENERAL
said, he could not agree to the Amendment. Accommodation bills might to a certain extent he perfectly innocent, and were in many cases very necessary. But it was different where they were used in excess, as in a recent flagrant case, where a firm 899 and many satellite firms had carried on business by means of accommodation bills transferred from one to the other. Where a firm depended mainly upon such fictitious capital it would come within the operation of the clause as it stood; but it would be impossible to treat as an offence that which within a certain limit might be perfectly right and innocent, and which was wrong and criminal only in excess.

§ MR. SCHOLEFIELD
said, that one of the offences declared by the clause was the wilful omission to keep proper books of account with intent to conceal the true statement of his affairs. It was at all times difficult to prove a wilful intent, and he would submit whether under any circumstances a trader ought not to be punished who had not kept "proper books of account." The absence of such books afforded great facilities for fraud, and he did not think that a bankrupt who had failed to keep them should be free from blame, or even punishment. He would, therefore, move that the words "with intent to conceal the true state of his affairs wilfully," be omitted from the clause.

THE ATTORNEY GENERAL
asked who was to determine what were "proper books of account." A simple form of books might be quite sufficient to show accurately the extent of his dealings, and yet a professional accountant might say that they were not "proper books of account." "Proper books of account" became, therefore, a thing so exceedingly indefinite, that he could not for a moment admit the Amendment.

§ MR. MALINS
said, he hoped that the hon. and learned Attorney General would very seriously consider the propriety of lessening the severity of the rule in reference to the imprisonment of bankrupts and the order of discharge. Great injury might be inflicted upon the future prospects of the bankrupt, and his family be ruined while no material benefit accrued to society.

THE ATTORNEY GENERAL
said, that when a man was discharged from prison after undergoing punishment for an ordinary offence it was not thought necessary to give him a written character. Persons became bankrupt five or six times. They rose from the ground as often as they fell with new vigour, new means, and new prosperity. It was high time that more stringent powers should be put into the 900 hands of the Judge, and, he had for that reason, vested supreme power in a Chief Judge, to whom this discretion might very properly be left.

§ MR. ROLT
said that a question arose on the sixth paragraph of the clause, which was connected with the distinction between traders and non-traders. He entirely agreed that there ought to be no distinction between the obligation of the trader and non-trader to pay debts. A distinction, however, there must be, greater than was made in the Bill as to the remedies for enforcing payment. But the whole question of abolishing the distinction between traders and non traders had been argued on the assumption that it was in favour of the non-trader. It was always assumed that the non-trader escaped an obligation which was imposed on the trader; and it was forgotten that under the laws of bankruptcy there was a boon or privilege by which the bankrupt's future estate was released from liability. In that respect he protested against the abolition of the distinction. The result of his observation was that the explanation of a great deal of commercial dishonesty was to be found in the trader knowing that if he speculated recklessly and successfully he kept his gains, and that if he failed his future property was safe. He was not speaking of any one class being more or less dishonest than another, but he felt strongly that the result of a wholesale abolition of the distinction between the trader and non-trader would be to bring to the latter incentives to dishonesty of conduct which were at present wholly wanting. The clause gave the Court power to grant an order of discharge, subject to any condition or conditions touching after-acquired property of the bankrupt, But he held that it was not sufficient that the Judge should have power in certain given and expected cases, nor was it just that when a young man got largely into debt he should be discharged from it by bankruptcy, and that his expectations, whatever they might be, should be realized without the payment of his debts. The effect of such a proviso would only lead to dishonesty among the non-trading community. Although he did not propose to move an Amendment to the clause, he thought it necessary to call the attention of the Committee to the question.

THE ATTORNEY GENERAL
said, he could not concur in the observations of his hon. and learned Friend; but as no Amendment was moved it was not necessary to continue the argument. Still he could not 901 help expressing his surprise that his hon. and learned Friend, who had been familiar for so many years with Courts of Equity, should speak of a creditor as a person entitled to the benefit of the expectations of a non-trader. The creditors were entitled to nothing more than the surrender of all the property actually held by the bankrupt. If persons were to be at liberty to give credit to a young man because he was known to be heir to a great estate, that would only encourage him in extravagance and a profligate course of life. A striking illustration was given in the Report by one of the Commissioners of the difference in the state of the present law between bankruptcy and insolvency. A country gentleman might collect a large sum of money, say to pay off the incumbrances upon his estate, and deposit it at a banker's. If the banker stopped payment he might get his certificate in bankruptcy, and a few weeks afterwards might be riding in his carriage. The country gentleman would, perhaps, become insolvent, and would resort to the Insolvency Court; but, unlike the banker, when he came out of it his debts hung round his neck for ever after. Was it right and just that the future property of the debtor should be taken in one case and not in the other? The present Bill removed this anomaly, but gave the Judge a discretionary power which would be sufficient to protect creditors against fraud.

§ MR. SELWYN
said, that at present when an insolvent debtor obtained the benefit of the Act he had to give security for the future payment of his debts, if he ever had the power. The warrant of attorney given for that purpose, however, could not be put in motion by any vindictive creditor, but remained in the discretion and under the power of the Court, and if he at any time acquired property it was within the discretion of the Court to say whether it should be made available for the payment of his past debts. He had never heard any general complaint of the abuse of that power; and if the power so vested in the Insolvent Debtor Commissioners had been exercised with discretion, it might, he thought, be safely intrusted to the Chief Judge of the new Court. There was a wide distinction between a trader and a non-trader; for if a non trader having an income of £,2000 a year spent £3,00u any future sum to which he might become entitled could not be said to be fairly and properly his own. In exceptional cases, such as those referred to by the hon. and 902 learned Attorney General, let the Judge have the power to give an unconditional discharge; but, as the Bill was now worded, in ninety-nine cases out of a hundred, there was to be an unconditional discharge of the non-trader.

THE LORD ADVOCATE
said, that in Scotland they had had for about five years a system similar to that about to be introduced by his hon. and learned Friend, and they had found none of the disadvantages which had been spoken of. No extreme cases of hardship or persecution had occurred. In discussing these matters he thought they were too apt to deal with abstract cases, and not with the real practical cases to which the law was to be applied. The extreme cases on one side and the other were exceptional, and the ordinary cases of bankruptcy law lay between them. The real object of the bankruptcy law was not to punish persons for contracting debts by lavish extravagance—that was the exception—but to make the whole estate of the debtor available for the payment of his debts equally among his creditors; and that matter had been very much lost sight of during the discussion on the Bill. Other objects were the discharge of the honest debtor and the punishment of the fraudulent debtor; and in the case of fraud the Court was armed with the necessary power to punish. He could not conceive any benefit to society in tying round a man who had been unfortunate this chain perhaps all through his life, simply for the chance that he might possibly earn something for the benefit of his creditors. On the contrary, it was for the benefit of the creditors themselves that the debtor, on giving up to them all his property, should be exempted from any condition respecting his future property. The debtor might ultimately succeed in the world, and, from a regard to honour, might pay what he never would have paid if he had been kept in fear of his future property being seized for the payment of past debts.

§ MR. MALINS
said, in all cases it was desirable to proceed on general principles. He agreed with the general principle laid down by the learned Lord Advocate, that the object of a bankruptcy law should be to produce a cessio bonorum for the creditors, and a discharge from his debts for the debtor. Creditors should take care whom they trusted. In that respect he did not see that there should be any distinction made between traders and non-traders. When persons gave credit to 903 non-traders they had the opportunity of knowing the means of the debtor, to a greater extent perhaps than they had even in the case of traders. There were reckless creditors as well as reckless debtors; and creditors ought not to be encouraged by law to give credit, not on the existing means of the debtor, but on the expectation of property to be hereafter acquired. Nothing could be more abominable than the system of giving credit to extravagant young men with large expectations in use amongst money lenders; and the greater the discouragement that could be given to those speculators on property in reversion or expectancy the better it would be for society. But the fact was that the Bill as it now stood did give power to the Court in certain cases, where the transactions of the debtor had been tainted with fraud, to make any future acquired property liable for the payment of his debts. As to the supposed or alleged hardship in the case of non-traders, those who were conversant with the actual practice of the Courts knew that nothing was so easy as for non-traders to get up a colourable and fictitious trading, and thus entitle themselves to all the benefits of the Bankruptcy Act. A few years ago the son of an Earl entitled to large property in reversion, in order to get rid of his debts, made himself a brick-maker—that was he turned over some clay, made a few bricks, and sold them, and then came before the Court of Bankruptcy in the character of a trader, and received a discharge from the whole of his liabilities. The law of debtor and creditor ought to be the same for all, whether traders or non-traders.

§ MR. MELLOR
said, he supported the clause as it gave the Court just the power it ought to have of imposing conditions on the discharge of a debtor analagous, in fact, to that now possessed by the Insolvent Debtors' Court.

§ MR. WALPOLE
said, he bad given notice to move the omission of the clause which gave power to the Chief Judge to send cases of misdemeanour for trial in the Criminal Courts. That appeared to him to be contrary to the general principle of the Bill, and to the principle of legislation lately followed, of making every Court sufficient to try out to the end all the cases which were brought before it. On that simple ground he trusted that his hon. and 904 learned Friend would consent to the omission of the clause.

THE ATTORNEY GENERAL
said, the clause not only referred to the Chief Judge but also to the Commissioners; and it was thought better to give to District Commissioners the discretionary power of sending cases of misdemeanour to the assize courts, for this, among other reasons, that the persons so dealt with would not in the country be able to obtain the services of counsel to defend them. He thought, therefore, the clause was a very proper clause, and that it was necessary to adhere to it.

§ MR. ROEBUCK
remarked that a person committing perjury either in the Court of Chancery or in courts which had no criminal jurisdiction, were constantly sent for trial to the courts of assize. The clause created no anomaly.

§ MR. WALPOLE
said, he must frankly admit that the reason given by his hon. and learned Friend in favour of this discretionary power had made a strong impression upon him; and he would, therefore, withdraw his Amendment. Still he thought that, in the generality of cases, the Court of Bankruptcy should begin and end the investigation into the charges against the bankrupt.

§ MR. MALINS
expressed his opinion that the clause ought to give a power of appeal to a bankrupt as well as to the creditors.

THE ATTORNEY GENERAL
said, he had considered this matter a great deal; and it had occurred to him that where a case was tried before the Chief Judge, accompanied by the Commissioner, it was not desirable to give the bankrupt whose discharge had been refused a right of appeal; but in a case where the Commissioner heard and decided alone the bankrupt should have the right of appeal to the Chief Judge.

§ ALDERMAN SALOMONS
said, he would take occasion to reiterate his opinion that the assignee ought to receive remuneration. The duties and responsibilities cast upon him were enormous, while no return 905 was made to him. At all events the penalty of 20 per cent was too high, a rate to charge him for retaining money in his hands.

THE ATTORNEY GENERAL
said, 20 per cent was the rate charged in the Bill of 1810; and he really saw no reason for mitigating the penalty in the present Bill.

§ MR. MOFFAT
said, he objected to the enactment of a series of pains and penalties against the creditors' assignee. That person was not to be remunerated; he was to incur a great deal of trouble, and then, at the end of his trust, he was to appear before the creditors almost in the position of a delinquent, to submit the whole of his accounts to them, and to ask humbly for his discharge. No gentleman would accept an office burdened with such humiliating conditions. He would move the omission of the clause altogether, and the substitution of the following:— At a meeting for the declaration of a final dividend the accounts of the creditors' assignee shall he audited by the official assignee, in the presence of the Registrar or of the County Court Judge, as the case may be, and thereafter the creditors' assignee shall be entitled to his discharge, unless cause be shown to the contrary.

THE ATTORNEY GENERAL
said, he would remind his hon. Friend that the Committee had already given power to the creditors to appoint to the office of creditors' assignee a person who might have nothing whatever to do with the estate, He maintained, moreover, that no honourable man, who had a trust to perform, would hesitate to do towards those who had confided in him precisely the things described in the clause—namely, call a meeting of the creditors, and lay before them all his books and papers of accounts. There was nothing in the clause to alarm any man who desired to discharge his duty properly.

MR. FORSTER
said, that the language of the clause would deter any commercial man from accepting the office of trade assignee. Owing to the exceeding energy with which the Attorney General was pressing the measure the people in Lancashire and Yorkshire had hardly been able to form an opinion upon many parts of the measure.

MR. MONTAGUE SMITH
said, he would support the clause for the reason which the two hon. Gentlemen opposite had given for opposing it. In his opinion, the official assignee would do the work much better than a creditors' assignee, but if there was a creditors' assignee stringent regulations would be necessary.

§ MR. BAZLEY
observed, that traders ought to be allowed to manage the estate by appointing, if they thought fit, an assignee from among their own body, and no derogatory conditions ought to be attached to the performance of this duty.

THE ATTORNEY GENERAL
said, the clause directed that the creditors' assignee should convene a meeting of creditors, and submit to them his books of account. If it were thought desirable, he would omit the part of that provision which empowered the creditors to come to a resolution expressing their opinion of the conduct of their assignee, who would then merely lay before the creditors his books of account, and would afterwards apply to the Court for an order of discharge. He would move the omission of these words accordingly.

MR. HENLEY
asked, whether it was intended that the Court should consider the conduct as well as the accounts of the creditors' assignee? Every three months he was to submit his accounts to the official assignee; and not only to submit but to swear to them. But, after his accounts had been examined and sworn to, he did not get his acquittance. He might have to go on appearing from three months to three months for seven years. But at the end of three months he might come under the cognizance of the Judge. He thought when the accounts of the creditors assignee had been examined, he ought to have an acquittance. But it was clear that the Bill was drawn to discourage any wish of the creditors to have an assignee, so that the business might go to an official assignee after all. The Bill was so framed that no merchant or tradesman would undertake the duty of creditors' assignee. If it was intended to lessen the work of the official assignee it might be fair to cut down his salary; but as most of the business would be turned over to him again it was not fair that his salary should be reduced.

§ MR. ROEBUCK
thought, that after having displaced the official assignee it would be found they had increased the expense by the change.

THE ATTORNEY GENERAL
said, the clause required no more than was demanded of every trustee before he was released from his trust.

THE ATTORNEY GENERAL
said, it was his intention to move that the Chairman should report progress.

§ MR. BARROW
said, he would take that opportunity of expressing the satisfaction with which he had heard the other night the suggestion for withdrawing small transactions from the operation of the Bill. He believed the learned Attorney General was not fully aware of the great number of small transactions. He thought it would be very desirable, and would save great expense, to exempt altogether from the operations of the Bill every case where the debts did not exceed £500.