§ Order for Second Beading read.
§ MR. NORWOOD, in moving that the Bill be now read the second time, said, that the object of the measure was to relieve manufacturers and wholesale dealers from the serious hardship to which they were subjected by a provision of the County Courts Amendment Act of 1867. 1562 By the clause to which he referred, to recover a debt not exceeding £50, the plaintiff must bring his action within the district where the defendant resides, or carries on his business—a provision which operated very harshly. For instance, a manufacturer at Manchester or Birmingham might sell goods upon credit to a trader residing in a small town at a considerable distance, and if the debtor neglected to pay, the plaintiff had to go to the County Court of the district where the defendant lived and prove I his debt, often at an expense—putting out of view the trouble and inconvenience—very nearly as great as the sum claimed. He proposed to meet the hardship of the case in this way—In the case simply of goods sold and delivered in the course of trade, and in no other, he proposed that the plaintiff might, upon filing an affidavit, institute his suit in the County Court of the district in which he resided. Though at the first blush there might appear to be a hardship to the debtor in compelling him to defend himself in the County Court of the plaintiff's district, there would be really none at all, because in nine cases out of ten there is no defence, and judgment goes by default. The practical result of the existing state of the law was that many wholesale houses refused to give credit on small accounts, because the expense and trouble of obtaining payment was almost worse than the loss itself. But to prevent the possibility of hardship to the debtor, he proposed to insert a clause to this effect—that on the defendant receiving from the County Court of the plaintiff notice of the plaint, he might go to his own County Court, and upon stating that he had a good defence, and paying into court a reasonable sum to cover probable costs of plaintiff and his witnesses, the action might be brought there. Several Chambers of Commerce, and among them those of Worcester and Wolverhampton, were in favour of the Bill, and the question having been brought before the Associated Chambers of Commerce they had passed an unanimous resolution that there ought to be an alteration of the law. The Incorporated Law Society of London had intimated their satisfaction with the measure, with the exception of some trifling details which they would have altered; they had even 1563 asked him to go further, and not to restrict its operation to the sale and delivery of goods, to which it was confined. But there was higher authority still in its favour. The committee of County Court Judges appointed by the Lord Chancellor to take into consideration all questions affecting County Courts had, through their secretary, sent a communication entirely approving his Bill, and making suggestions the more effectually to meet any cases of hardship. To show the necessity for a change in the law, he might mention that it appeared from a Return that in 1866, out of 872,437 plaints issued, there were only 8,874 decisions in favour of the defendants, and more than half the plaints were decided without trial at all. That fact would abundantly support his statement—that the great bulk of the actions to which he alluded were positively undefended. Another thing that he proposed to do was to give a summary jurisdiction with reference to cases of tradesmen's dishonoured acceptances below £10, for there was an immense number of them which ranged between £10 and £5. Now, it was in the interest of the small tradesmen themselves that reasonable facilities for the recovery of debt should be afforded, because they depended upon the credit given by the wholesale houses, and that would not be given freely where those houses possessed no proper protection. He anticipated active opposition to the Bill, but he besought the House to weigh sufficiently the interests of the commercial classes in a matter so widely affecting their interests.
§ Motion made, and Question proposed, "That the Bill be now read a second time."—(Mr. Norwood.)
§ SIR FRANCIS GOLDSMIDrose to move that the Bill be read a second time that day six months. He thought the Bill open to the objection of being at once too extensive and too narrow—too extensive as comprising things which did not, and too narrow as not comprising things which did, fall within the mischief intended to be remedied. The case which the hon. Gentleman sought to make out was that of the inconvenience and damage caused by the present state of the law to wholesale traders in their dealings with the retail trade. But he (Sir Francis Goldsmid), 1564 had heard, over and over again, that the retail traders were subject to quite as much inconvenience from unpaid debts as the wholesale. Tailors, for instance, were obliged to charge their paying customers much more than they otherwise would, in order to recoup themselves for losses from customers to whom they gave credit, and who did not pay. But it was not suggested that retail traders would be benefited by the proposed enactment. On the other hand, he would show that this Bill would extend to persons as to whom the hon. Gentleman had made out no case, and whom he did not intend it to affect. The 2nd clause applied to actions for the price or value of goods sold and delivered to the defendant to be dealt with in the way of his trade, profession, or calling. If that clause were adopted, such cases as these might occur. An artist, for the colours to be used in the painting of his pictures, a schoolmaster for school requisites, a clergyman for the paper on which he might have written some excellent theology, might each be brought from one side of the kingdom to the other to defend an action—in a case, where, perhaps, an overcharge had occurred—simply because they made use of the things supplied in the way of their profession or calling. The hon. gentleman had assumed that in almost all instances the plaintiff was in the right, and he instanced the large number of cases which were undefended. But that was owing to the present state of the law, and was no reason for altering it, since if we gave facilities for bringing actions carelessly, they were sure to be brought. Now, if the House considered to which party the greater inconvenience would be occasioned by a cause being tried at a distance from his place of business, they would find that it would be to the retail trader, because the wholesale dealer had a number of travellers who were constantly going about, and it might be no great hardship to have one of them attend to prove the debt. It would be quite otherwise with the retail dealer, who might be called from one end of England to the other in order to defend the action. Then the 3rd clause was even worse, for it proposed to give the holder of a bill of exchange the right to sue in the district in which he carried on business. Every gentleman who, whether from being engaged in com- 1565 merce or otherwise, had acquired any knowledge of bills of exchange must be aware that it was of their very essence to be transferable from holder to holder. Now, any man taking a bill of exchange either knew or might easily ascertain where the acceptor was, and therefore where the holder had to sue. But if this Bill passed the unfortunate acceptor never would have the slightest conception where he was to be sued, because the bill of exchange might at one moment be held in Northumberland, at another in the neighbourhood of Land's End. That would afford the greatest encouragement to unfair actions. Commercial men might, no doubt, be well aware where the shoe pinched; but, speaking as a lawyer, he ventured to say that they did not always know how to prevent its pinching. Believing that the object of the Bill was ill denned, and that its provisions were ill calculated to effect that object, he begged to move that the Bill be read the second time that day six months.
§ MR. WATKIN WILLIAMS, in seconding the Amendment, said there were several grounds which might fairly be put forward in opposition to that Bill. One of the most important of those grounds was that it was unwise and impolitic to legislate on this subject in the way of reforming one branch of our system of judicature when the whole of that system required, and would, he believed, shortly undergo a thorough reform. The present County Courts were established in 1846 to give cheap and speedy remedies for the recovery of small debts. For that purpose they proved successful; but from time to time a continual course of casual and piecemeal legislation had been adopted in regard to those courts, which had entirely altered their original character and objects. Their jurisdiction had been successively extended to Equity, Admiralty, and Bankruptcy cases, in addition to questions of Common Law; and, not only had the Judges of those courts to perform their multifarious duties without a Bar to assist them, but, to add to their difficulties, they had to administer all those various branches of the law subject to different courts of appeal, each governed by different, and sometimes conflicting, legal principles. Their decisions were liable to review in Equity cases by the Court of Chancery; in Admiralty cases by the Court of Admiralty; and 1566 in Common Law cases by the Common Law Courts. The result of that state of things did not redound to the credit of our system of judicature; and it arose from the fact that small Bills of that kind were allowed to pass through Parliament almost without attracting any attention, until, by degrees, the whole law of England was fundamentally altered and thrown into confusion, and the odium of it was cast upon the lawyers. That was a system which it was their duty to oppose. The lawyers and the commercial men should join together in carrying out the reform of our system of judicature. A Commission was now sitting on that subject, whose Report might be expected very shortly, and they might hope that, from its recommendations, a complete and sweeping reform of that description would follow. He thought that all the different superior courts should be consolidated into one supreme tribunal, with universal jurisdiction, and possessing absolute and complete power to distribute the different classes of business amongst different branches of such tribunal, and to construct the necessary machinery for doing complete justice in every instance. In addition to that, let them have one final appellate court for the whole Empire. And, lastly, he would have all these County Courts made into distinct courts, associated with the supreme court, to bring justice to every man's door throughout the country; and the limit of their jurisdiction might be fixed at £100, £200, or £500, as might be deemed expedient. He believed that no obstacle would be raised by the lawyers to the adoption of such a reform, the interests both of the lawyers and of the commercial men being the same in that matter. With regard to the Bill then before the House, its 3rd clause, in his opinion, involved a mischievous principle, and would cause great injustice to acceptors of bills, who might be sued without notice and even without presentation. He did not refer to trade bills, but to bills of other classes. There ought certainly to be a summary remedy afforded in reference to bills of exchange, but the mischief of the clause applied to those numerous cases where bills of exchange had been improperly obtained, and where either nothing at all was due, or only a portion of the amount named in them was so. In 1567 many cases it would happen that an acceptor sued in a remote part of the kingdom by a pretended bonâ fide holder for value would find it more to his advantage to submit to some amount of extortion than to travel to that place with witnesses to defend himself.
§ Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day sixmonths."—(Sir Francis Goldsmid.)
§ Question proposed, "That the word 'now' stand part of the Question."
§ MR. MACFIEwas disposed to reserve his judgment upon that Bill until they had heard the Attorney General's opinion of it. The present occasion, however, was, he thought, a good one for the House to consider the question of whether the codification of the commercial law was not desirable. Very great inconvenience arose from the difference in the law north and south of the Tweed, and it was especially desirable to consider whether Scotland should not be brought within the range of the English law where the English law was the best, and England also brought within the range of the Scotch law where the Scotch law was best.
§ MR. MORLEYdesired to endorse the opinion which had been expressed by the hon. Member for Hull (Mr. Norwood), that the class of cases proposed to be dealt with under this Bill was one which called for attention at the hands of the Legislature. The fact that only one in ten of the actions brought in the County Courts was defended established this. A man who purchased goods on a fixed term of credit, and failed to keep his engagement, was guilty of a breach of contract, and the plaintiff, in recovering the money, ought not to be put to any more trouble than was absolutely necessary. He would give the defendant every security for his costs, provided he could make good his defence, but the plaintiff ought to have every necessary facility for recovering the money which the defendant had failed to pay. Whether the present Bill met the evil complained of or not he would not pretend to say, but he certainly did think the state of things which now existed called for the attention of the learned Attorney General.
§ Mr. SERJEANT SIMONsaid, if this were a Bill extending the jurisdiction 1568 or altering the character of the County Courts, pending the inquiry to which, reference had been made by the hon. and learned Member for Denbigh (Mr. Watkin Williams), he would have been prepared to vote against it. But the measure did not really partake of that character. It seemed to him to be only the proper and natural corollary of the Act of last Session, and to which indeed the objection now taken to the present Bill was more properly applicable. During the operation of the first Act, no matter where the debtor might reside, the plaintiff had the right of bringing his action in the superior courts for any debt exceeding £20, or for any sum where the cause of action did not wholly arise within the district where the defendant dwelt, and of bringing him from any part of England to defend himself. But the last Act had taken away this right, and the plaintiff was compelled to bring his action in the County Court of the district where the defendant dwelt, under pain of losing his costs if he recovered less than a certain sum. There were provisions in the Bill to guarantee the defendant against the hardship of being taken to a great distance in order to defend himself. The plaintiff was required to make affidavit of his debt, and also that it was a debt for goods sold and delivered. The defendant might give notice to the registrar of his district that he had a good defence, and then the plaintiff would be required to find security for the costs. With regard to loss from being taken away from his business, it must be assumed that the Judges would make proper compensation in cases where the defendant proved to be in the right. In the case of bills of exchange, he thought it would be unfair to persons who might give bills of exchange to transfer that jurisdiction wholesale—as might be done on the face of the Bill—to the County Courts; but, as he understood the hon. Member (Mr. Norwood), it was intended to give those courts jurisdiction only to such an amount as they already possessed, in the case of goods sold and delivered. Believing that the Bill would only bring into fair operation the Act of last Session, as a lawyer he was very happy to offer it his support.
§ MR. T. CHAMBERSsaid, there was a preliminary objection to the Bill proposed—namely, that its object was to 1569 apply a special remedy to a special grievance at a moment when the whole operations of our system of judicature were under the consideration of a special Commission whose Report was soon expected, It appeared to him, therefore, to be inexpedient to press, at such a time, alterations of so trifling a character as where a cause should be tried. The alleged grievance complained of was, after all, a very doubtful one; and if the proposed remedy were adopted, it was very questionable whether it would not have the effect of creating a much more serious and substantial grievance in respect to a large class of individuals who might be improperly sued upon claims against which they had a good defence. There was no doubt that the establishment of the County Courts had conferred great advantages upon the public generally; and even supposing that it was wrong to make the creditor follow his debtor, the remedy proposed by the hon. Member for Hull involved the introduction into the County Courts of a scale of costs which would go far towards frustrating the very object for which those tribunals were established—namely, the cheap and facile recovery of small debts. Any incidental advantage which might accrue from the adoption of Bills like the present would not compensate for the injury they might do to the most useful institutions ever set up in this country for administering justice. He therefore hoped that the measure would not be pressed.
§ MR. ST. AUBYNsaid, that according to the statement of the author of the Bill himself the measure was introduced in the interests of manufacturers and whole-sale dealers and, besides that it certainly paid small regard to those of the smaller tradesmen, it entirely overlooked those of the working classes who might be grievously oppressed under its provisions. He hoped that the Bill would be withdrawn for the present, with a view to its provisions being rendered more fair and equal to all parties concerned.
§ MR. STAPLETONsaid, he doubted very much whether the Bill was viewed with favour by either the commercial community or the legal profession, and the only lawyer in the House who had yet spoken in favour of the Bill represented, in common with most of those who supported the measure, a commercial and manufacturing community. 1570 One of the objections to the Bill was that it would enable a gang of swindlers to carry on their calling by spreading themselves over the country and suing the same parties at the same time in the County Courts in remote districts. He recollected a story in Yorkshire of a very ingenious tradesman belonging to that county, who carried on business as a saddler. When he found there was one saddle sold, as to the purchaser of which he was in doubt, his custom was at Christmas, when he made out his bills for his customers, to set down a saddle in every individual account, so that if he made out twenty-seven bills he charged twenty-seven saddles to his various customers. There were parties also who might do a most successful business by bringing suits on the speculation of getting the costs. He could not help believing that the real author of this Bill must be the ingenious tradesman he had mentioned. Instead of its being a hardship on a dealer to go a long distance in order to sue his debtor, the hardship was generally the other way, as the plaintiff was provided with an attorney who could very easily manage the matter for him. In his opinion the science of jurisprudence was less understood in England than in any other civilized country. For instance, a Bill was often allowed to be proceeded with although clause after clause was inserted which destroyed all the efficiency of the original measure. With respect to the question now under consideration, the best way to deal with it would be to retain the present rule as to the issuing of the plaint, but to allow the Judge to change the venue on good ground being shown for such a proceeding.
MR. HENLEYsaid, he was always unwilling to thrust in his oar among learned Gentlemen, because he knew the danger of so doing. Ho, however, venturd to ask the attention of his hon. and learned Friend the Attorney General, because he knew that the hon. and learned Gentleman had strong opinions upon the question of imprisonment for debt; and he wished to ask him whether, under the provisions of this Bill, there might not be an extension of the system of imprisonment for debt? Now, imprisonment for debt under the County Courts Acts really meant penal imprisonment. It was not simple confinement at the will and pleasure of the 1571 Judge of the County Court when it was alleged that the defendant was able but unwilling to pay—under what he (Mr. Henley) always considered the miserable pretence of contempt of court—but an imprisonment of an absolutely penal character. In the original Act, he believed it was laid down that for every 1s. owed there might be one day's imprisonment; but the statutes on the subject had been since so altered and multiplied, that he could not pretend to say what the present law was. If the Government were disposed to assent to a large extension of the jurisdiction of those courts he hoped they would take into their consideration how far imprisonment for debt ought to exist in respect to poor people when it was almost entirely abolished in respect to all other classes. He confessed he always thought it unfair that this power of imprisonment, as it was now exercised by the County Court Judges, should exist; and he now ventured to suggest to the Law Officers of the Crown and the Home Secretary—if they were going to extend this jurisdiction—the necessity to which they might be exposed of providing much additional prison accommodation for the many more unfortunate persons that would be committed under the orders of the Judges.
THE ATTORNEY GENERALsaid, he intended to take an intermediate course in reference to the Bill. He should ask his hon. Friend (Mr. Norwood), who had charge of this Bill, to postpone its further progress until, at all events, they had received the Report of the Judicature Commission who were now investigating the whole judicial system of the country. Their Report when complete would deal with the rearrangement of circuits, and other provisions for the more effectual administration of justice locally by the superior courts; and as the local administration of justice was a question to be dealt with as a whole, he thought he was entitled to ask his hon. Friend to postpone the consideration of this measure. Some of the objections that had been urged against the Bill were of a very serious character, and he confessed he looked with alarm upon the powers proposed to be given to the holders of bills of exchange. These powers were such as might be perverted so as to effect a great injustice upon parties who 1572 might be sued by an endorser, living hundreds of miles away, upon bills of exchange for which they had, perhaps, received little or no consideration. He concurred in the remarks made by his hon. and learned Friend the Member for Marylebone (Mr. T. Chambers) that the County Courts worked on the whole extremely well, and that their institutions were among the most successful efforts of modern legislation. He therefore deprecated the practice of endeavouring every Session to tinker them by the introduction of some such measure as that before the House. Such efforts tended rather to despoil those courts of their many advantages than to improve them. He trusted under those circumstances, that the hon. Member would accede to the reasonable request of postponing his Bill. With respect to the appeal made to him by the right hon. Gentleman opposite (Mr. Henley), he could assure him that he felt the full force of his observations. He (the Attorney General) had already succeeded in passing an Act limiting the power of imprisonment for debt exercised by the County Court Judges, and he believed that the Act had worked successfully, and that they had now fewer complaints upon that point than they had had previously to its passing. He was however aware that the evil still existed. It was a question, no doubt, of great difficulty; but he did not think that the remarks of the right hon. Gentleman in respect to it applied fairly to the Bill, inasmuch as its object was not to extend the jurisdiction of the County Courts—although one or other of its clauses might have such an effect. In a few days, it was his intention to bring in a Bill for the total abolition of imprisonment for debt, when he was sure the right hon. Gentleman would find that he had provided some safeguard against this particular jurisdiction of the County Court Judges.
§ MR. NORWOODsaid, that after the appeal which had just been made to him by the hon. and learned Gentleman he would consent to the postponement of the Bill, reserving, however, to himself the power to proceed with it at a future time in case he should deem it expedient to do so.
§ Amendment and Motion, by leave, withdrawn.
§ Second Reading deferred till Wednesday 12th May.