[BILL 102.] LORDS' AMENDMENTS. (Hansard, 6 April 1865)

§ SIR COLMAN O'LOGHLEN
said, he wished to call the attention of the House to an important Amendment which had 786 been made in this Bill by the House of Lords. According to the present state of the law in England, no railway company could be declared bankrupt, and no share holder could be rendered liable for more than the unpaid amount of his shares. He believed that was also the law in Scotland. Up to the end of last year it was believed that the same law prevailed in Ireland; I but it was discovered about that time by some ingenious gentleman that railway companies could be made bankrupt in Ireland, and the result was that one railway company had been made bankrupt. A doubt had also arisen as to whether shareholders in railways in Ireland could be rendered liable for more than the unpaid amount of their shares. Under these circumstances the present Bill, with the sanction of the Law Officers of the Crown, was introduced. It consisted of two clauses, the first of which prohibited any railway company in Ireland being made bankrupt; and the second prevented any shareholder being rendered liable for more than the unpaid amount of his shares. The Bill passed that House; but a Select Committee of the House of Lords, to whom the Bill was referred when it got there, struck out the second clause. When the Bill was returned to the House of Lords, a Motion was made to re-instate the clause, and was lost by a majority of three only. He considered it would be a most unfortunate proceeding if that House should agree to the Amendment of the House of Lords, as the result would be that the assets of the railway companies to be made bankrupt would be lost in litigation, and the shareholders would be harassed by legal proceedings. He moved that the House disagree with the Lords' Amendment.

§ MR. BAGWELL
said, it was very desirable that the Attorney General for England should give his opinion upon this question, which had created a large amount of fear in Ireland, where railways were required, but where they would not be made if the law should continue to be that shareholders must be held to be liable beyond the amount of their shares.

§ COLONEL SYKES
said, it was clear that there ought not to be one law for England and another for Ireland in this matter. He thought it desirable that the Government should declare its view on the subject.

§ COLONEL FRENCH
said, that there ought to be some expression" of opinion on this matter by the legal advisers of the 787 Crown. Persons who bought shares in Irish railways certainly imagined that their liability was limited to the amount of their shares; but if these Amendments were agreed to no man would be secure.

§ SIR GEORGE BOWYER
thought it a little extraordinary that when so important a legal question as this was being discussed the legal advisers of the Government were not present. He did not, however, think their advice very material, because in his view there could be no two opinions about the matter, for the simple reason that if the holders of Irish railway shares were made liable to the full extent of their property in case of the bankruptcy of the railway company, no one would hold shares in them, and thus railway enterprise in Ireland would be put an end to altogether. If such a question arose in respect to railways in England, the House would be up in arms, the Standing Orders would be suspended, and they would not separate until the matter had been placed on a proper footing. It would be an instance of inexcusable supineness on the part of the Government, if there was not an immediate expression of opinion on the question.

§ SIR PATRICK O'BRIEN
thought that disagreeing with the Lords' Amendments would tend rather to complicate the question, because the settlement would be thrown over the Easter holidays, and before the House met more than one railway company in Ireland might be made bankrupt.

§ COLONEL GREVILLE
said, that as the legal advisers of the Government were absent, perhaps the right hon. Gentleman at the head of the Board of Trade would give the House the benefit of his opinion. The right hon. Gentleman's name was on the back of the Bill.

§ MR. MILNER GIBSON
said, that the question being somewhat of a legal character, he was not the proper authority, but as he had been appealed to he had no objection to give his opinion on it. As he understood, the shareholders in the Irish railways in question took their shares with limited liability, which was the undoubted law at the time they took them, and therefore they could not be called on for anything beyond the amount of the shares. That was the position in which they stood in 1857, when the Bankruptcy (Ireland) Act passed for the purpose of providing for the winding-up bankrupt companies. Railways were not excepted from that Act, and it had been held, from certain language in 788 that Act, that the shareholders in any railway which might be made bankrupt could be called upon to contribute until the whole of the debts of a bankrupt railway were paid. He could not conceive it possible that any court of law would come to such a conclusion, or that an Act which was passed merely for the purpose of winding-up companies could alter the extent of liability falling on shareholders. All that it could do was to provide a mode of collecting the contributions which it was just that the shareholders should severally pay. The question was whether the House was to declare that it was not the intention of the Legislature, when it passed the Bankruptcy Act, to put an end to that limitation of liability which shareholders legally enjoyed by the constitution of their company, or to leave shareholders subject to the litigation that might arise in consequence of the ambiguous language of the Act. In his opinion it was but fair and reasonable to relieve the shareholders from the consequences of an ambiguity in that Act; for whatever might be said about injustice to creditors being inflicted by an ex post facto law, it must be recollected that the creditors acquired the rights they claimed by the operation of an ex post facto law—if the Act of 1857 had the effect which it was pretended; who ever heard of a general law directly taking away the private property of persons, or exposing to liability persons who never heard of it, who were never consulted, and who most certainly were not in the mind of the Legislature when the Act of 1857 was passed? It therefore appeared reasonable and just to re-insert the clause, and disagree with the Lords' Amendments.

COLONEL DUNNE
said, he did not think any difficulty would arise from the delay in the Bill which would be caused by disagreeing with the Amendments.