§ Order for Second Reading, read.
, in moving that the Bill be now read a second time, said, that the object of the measure was to remove certain defects in the Bills of Sale Act (1854), the Preamble of which said that frauds were largely committed upon creditors by secret bills of sale of personal chattels, whereby persons were enabled to keep up the appearance of being in good circumstances and possessed of personal property; while the holders of such bills of sale could take that pro- 791 perty, to the exclusion of the creditors. The grantor of a bill of sale remained in possession of the property which was the subject of that instrument, but the grantee became its absolute owner; and persons were induced to give credit to the former on the faith that he was the real owner. Thus things went on, until the apparent owner got into difficulty, and then a person who had given him credit brought an action against him, and obtained an execution against his goods, whereupon up sprang the owner of the bill of sale and swept away the property, the bill of sale being perfectly good against the execution creditor. The Act of 1854 was accordingly passed to check frauds upon bonâ fide creditors, by requiring the holder of a bill of sale to register it in the office of the Court of Queen's Bench, which was open to the public. The Act further inflicted a penalty on the holder of a bill of sale who did not register, and it made the bill of sale null and void against the creditors if they issued execution against the debtor or made him a bankrupt. The Act, however, gave the holder of a bill of sale 21 days within which to register, the effect of which was, that within that period a bill of sale was not void against an execution creditor, and the execution was defeated. In fact, that Proviso as to the 21 days was a loophole of escape, and it had enabled dishonestly-inclined money-lenders and other persons, as it were, to drive a coach and six through the Act of Parliament. That was done in this way—a money-lender advanced a sum of money to a man and obtained a bill of sale on his goods as a security. He did not register the bill of sale, but allowed a fortnight, or it might be 20 days, to elapse, and then he took another bill of sale, which he again did not register, but renewed at the end of another fortnight or 20 days, repeating that process over and over again, so that there should always be a bill of sale in force which did not require registration. The result was, that secret transfers had been effected and bonâ fide execution creditors were defrauded, in defiance of the Act of 1854. The legality of thus constantly renewing bills of sale was at one time doubted, but the Court of Common Pleas had, with an expression of regret, decided that those bills of sale were good against an execution creditor, and 792 the Court of Exchequer Chamber had confirmed that decision. The Act of 1854 had consequently become a dead letter against those who understood how to renew those instruments in the way he had described. It was to remedy that defect that the present Bill had been introduced. It would render the non-registration of the first bill of sale fatal to its success. Not only were creditors cheated under the existing law, but the grantor of a bill of sale was also subjected to extortion. It being, of course, his interest to conceal the fact that he had given a bill of sale on his property, he had frequently to pay a considerable sum to the grantee of the bill of sale every time it was renewed. In a case before the Master of the Court of Common Pleas, a bill of sale, given to secure an advance of £100, had been renewed every fortnight for about a year, and £5 was exacted on each renewal, making something like 100 per cent on the loan. To prevent various modes of evading the Act of 1854 which might be resorted to, the Bill provided that all transfers of personal property, whether effected by bills of sale or otherwise, should be subjected to registration. In conclusion, he would say that the present Bill was almost identical with one which he brought in last year, but he did not press it to a second reading on that occasion, because the Lord Chancellor then introduced into the other House a more comprehensive measure. He had now brought the Bill in again with the approbation of that noble and learned Lord, and he would move its second reading.
§ Motion made, and Question proposed, "That the Bill be now read a second time.—(Mr. Lopes.)
THE ATTORNEY GENERAL
said, he hoped that the House would give the Bill a second reading. The 2nd section of the Bill dealt, and apparently in a satisfactory manner, with a difficulty which doubtless existed; but the 3rd section, the object of which he approved, would, he thought, require to be carefully considered in Committee.
§ MR. NORWOOD
, as the representative of a mercantile community, thanked the hon. and learned Member for introducing the measure, for the present system of evading the necessity of registration was condemned by all trading 793 societies in the Kingdom. He thought the 3rd section would require amendment, and he reserved to himself the right of opposing that clause in Committee.
§ MR. FORSYTH
supported the second reading, but indicated certain defects in the wording of the Bill which would have to be amended in Committee.
§ Motion agreed to.
§ Bill read a second time, and committed for Tuesday, 13th April.