Lords Sitting of 17 July 1828

CORPORATE FUNDS BILL.
Lord Goderich,before he proposed the second reading of this bill, thought it right to explain the objects of the bill, and the grounds on which he conceived it ought to be read a second time. The different Corporations of the country were in possession of Funds, which were applicable to some specific purposes; some of those purposes were charitable, and others related to the police and local administration of the town. But besides the property which was so appropriated, cor
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porations possessed another species of property, the application of which was not definite. Any misapplication of the former species of property might be remedied by an application to a court of law; for the corporation was amenable to law if it were misapplied. But, with regard to the latter species of property, having no definite application, he was assured, and he believed correctly, that there was no object to which such funds might not be legally applied. It might be supposed, that those who placed such funds at the disposal of corporations, intended them to benefit the town, or to be applied to some purpose connected with the interests of the corporation; but, if what was stated as to the law was true, they might be applied to any purpose, wholly distinct from purposes connected with the corporation. It was competent, by the law, when any corporation possessed funds not definitely appropriated, for the members to apply it to their own exclusive benefit. They might deal with it so as not to transmit any of it to their successors; they might gamble in the funds with it; or form joint-stock companies; or apply it to any other purpose that had no reference whatever to the purposes for which it might originally have been appropriated. If any body were to tell those who had given such funds to a corporation, that they had been employed to speculate in members of parliament, they would think the corporation ought not to be intrusted with any such power. If they were at liberty to apply the funds to the purposes of a contested election, when no such purposes were contemplated by the individuals who placed those funds at the disposal of the corporation, it was, in his opinion, inconsistent with the freedom and purity of election, and a corrupt mode of returning members to parliament. If there were a power of applying funds in such a manner, it was high time that power should be restrained. He would not deal with that power on the mere possibility that it might be so abused; but the grounds on which he should recommend the bill to their lordships' notice was, that the money of corporations had been so applied, and in a most extraordinary manner. The first case he would mention, was that of the Corporation of Northampton, which had advanced 1000 l. to secure the return of a member of parliament. He did not think that case alone

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would constitute a ground for parliamentary interference; but there was another case of much greater importance—that of: the Corporation of Leicester. The funds of that corporation had been applied without disguise. At the last general election the corporation took a great interest in the election of the borough, and to further the views of the candidate they favoured, they incurred an expense which would surprise their lordships. It was not 1,000 l. or 2,000 l., or 5,000 l. or 10,000 l., but; 27,000 l. that had been expended on a contested election. If the corporation was at liberty to expend 27,000 l., he did not know why it might not expend 227,000 l., or employ its whole funds; which would be the most formidable weapon that could be used against purity of election. If it were fit that a corporation should so apply the funds to carry on the election of a town, they might apply them to the election of a county, and expend twenty or thirty thousand pounds in contesting it. The corporations might go a step further; two or three of them might unite, and form a joint-stock purse; and there could be no limit set to their operations, if there were no right to interfere. He did not say it was probable that corporations would employ their funds in this manner; but if one employed 1,000 l., and another 27,000 l., he could not tell to what extent they might carry their assumed rights; for they were assumed, and contrary to the principle of common sense and the practice of the constitution. On this ground he recommended the bill to their lordships.
The Lord Chancellorsaid, he had looked at the bill, and felt it his duty to oppose the second reading. He must express his surprise that his noble friend should have moved it, for when a bill of a similar character was brought in last session, which he also thought it his duty to oppose, he thought it had been opposed by his noble friend. He had opposed that bill, as a member of his majesty's government, and had thought it his duty to do so. His noble friend had not, in supporting the bill, fallen into the mistake of those who had supported it in another place, who seemed to suppose that corporations held their property differently from individuals. Corporations were situated precisely the same as individuals: they held some property in trust, as individuals held property in trust and if
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they abused the trust, they were amenable to courts of justice for their errors or offences. They also held property not in trust; and over such property the corporation exercised the same right as individuals did over their property. There was no difference known to the law. If any gentleman had voted for the measure under this notion, he had voted for it under a mistaken view of the law. He would repeat, that there was no difference whatever between the law as applied to corporations and to individuals, with regard to the property they possessed and held in trust. His noble friend had supported the bill, on the alleged misconduct of the corporation of Leicester. Last session the imputation was against Northampton; this year it was against Leicester, and he had no doubt that the imputation against the corporation of Leicester, when inquired into would be found, like the case of Northampton, not to be supported. It was necessary, in speaking upon this subject, to distinguish between the corporation and the corporation party. At the last election, the corporation party resolved to support sir Charles Hastings. He was opposed by Mr. Evans, and he believed by Mr. Denman. The corporation party then resolved to support Mr. Otway Cave, on condition that he and sir Charles Hastings should defray the expenses of the election to a certain extent, and not allow them to fall on the corporation. To this the candidates consented, and they had received the support of the corporation. Sir Charles Hastings had paid his share; but in consequence of the default of Mr. Otway Cave—he did not use the word default as giving judgment against Mr. Cave—but in consequence of Mr. Cave not choosing to pay his share of the expenses, a large burthen had been thrown on the corporation party. He did not know that it would be defrayed by the corporation, but the corporation party's I candidates were liable for the amount. The corporation might indemnify them; but if, in doing so, it misapplied the funds, redress might be obtained in a court of law. He knew the corporation of Leicester, and he was sure that if any improper application had taken place, complaints would be made in a court of justice. He did not think it was correct to say, that corporations should not influence elections. They ought to have someweight and influence in elections. Why

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should they not have influence over elections, as well as a peer or a wealthy commoner? If the corporation misapplied its influence, it was amenable to the law. At Leicester, the great expense was occasioned by bringing the out-voters down to the election. It had cost Mr. Evans 20,000 l., and the corporation had expended 27,000 l. If their lordships looked at the conduct of the different boroughs of the country, they would find, that those in which the independent interest, as it was called, predominated, and not those in which the corporations predominated, were the most corrupt. If corporations were not allowed to apply their own funds and influence in this way, they would have recourse to some wealthy individual; and it would be his influence which would secure the return, and not that of the corporation. He thought there was no grounds for interference, and that the measure would be injurious. He had opposed the bill of last session on similar grounds, and he was surprised that his noble friend, of all men, should have moved the second reading.
The Earl of Rosslynthought the learned lord bad mistaken the use of the word influence. No one had contended, that the corporation should not exert an influence in the elections, arising from their authority, in the place where they resided: but to employ their funds for the purposes of an election, did not seem to him to be proper. If a corporation might expend 27,000 l., it might charge a debt on its successors. All funds intrusted to a corporation were intended for the benefit of the inhabitants; and any application of the funds, different from that, could not be proper.
Lord Eldonsaid, he did not mean to vote against this bill because he had voted against the bill of last year, but because he thought it was against the principles of the constitution. No man could doubt, at least no lawyer could doubt, what the law was on the subject. The right of corporations to property which they did not hold in trust, was the same as the right of individuals to private property. He knew this was law in Westminster Hall forty years ago, and he believed it was so to this day. Corporations had a right to dispose of the property they held, not in trust, to any purposes that were legal and not corrupt. The present bill, like the bill of last year, did not purpose to put a
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stop to any corrupt or illegal practices, but to take a right from all corporations which they had always exercised. If it were carried, every application of corporation funds, such as buying pictures, or giving a Lord Mayor's dinner, would be illegal. He was sure their lordships would hesitate before they passed a bill, which did not correct an individual abuse, but took from corporations those rights which they held, both by the principles of the law and the constitution.
Lord Calthorpesaid, that the learned lords who had just addressed the House had not made a proper distinction between the acts of an individual and those of a corporate body. It was well known, that a corporate body in which there was a divided responsibility, would do many acts, on which no individual among them would venture, if left to act by himself. If the principle laid down, of allowing corporations to dispose of their funds, for a purpose not having immediate reference to their charter were acceded to, it would be difficult to know where to draw the line. Their lordships had abundant evidence to prove the disposition to abuse, and they would not, in his opinion, be justified in rejecting this bill.
The Earl of Carnarvonsaid, that the question was, whether such an application of Corporate funds as was here mentioned was contemplated by the donors of corporate property. If it was, then their lordships were right in rejecting this bill; but if they considered such an application an abuse, they were bound to pass it. The learned lord had said, that an abuse by one corporation was not a justification of such a measure as this bill; but if one corporation did abuse its trust, it would be a good ground for passing a measure which would prevent similar abuses in other corporations. He was therefore in favour of the bill; and for this additional reason,—that if some such measure did not pass, it would, where there happened to be divided interests in the corporation, give to one party, the majority, by a power of diverting to extraneous purposes, funds which were intended for the benefit of all. The mayor of all boroughs was the returning officer at elections. He was bound by his oath to strict impartiality between the candidates; and yet, by that rule, he might give his casting vote for the application of the funds of the corporation, in aid of the interests of the one can.

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didate in preference to the other. He was convinced that there could not be a more improper application of Corporate funds; and he should therefore vote for the bill.
Lord Goderichwished to correct a mistake into which the lord Chancellor had fallen with respect to Mr. Otway Cave. That gentleman had made no agreement with the corporation of Leicester, or with any party, to pay part of the expenses. An arrangement was made by others, which was to be kept from the two candidates, and that gentleman had heard nothing of it, nor did he suspect it until that corporation made a demand on him for several thousand pounds, which he very properly resisted.
The Lord Chancellorsaid, he had not meant to cast any imputation on Mr. Otway Cave.
Their lordships then divided on the amendment; Content 41; Not Content 10; Majority against the bill 31.