(NO. 74.) COMMITTEE. (Hansard, 24 April 1868)

THE LORD CHANCELLOR
said, that since the three Bills on the subject of bankruptcy (the Bankruptcy Acts Repeal Bill, the Bankruptcy Bill, and the Judgment Debtors Bill) were laid before their Lordships, and had been made public, he had received a number of communications which induced him to propose modifications in various details of those measures. A noble and learned Lord had also given notice of Amendments, some of which he deemed to be improvements on the Bill, while to others he was not able to give his assent. Under these circumstances, he thought that the most convenient course to pursue would be to go into Committee on the Bills pro formâ, with the view of introducing the Amendments on the Report, 1218 and he would then propose to fix the Committee again on Monday week.

§ LORD CRANWORTH
thought it very necessary that, in abolishing imprisonment for debt, great care should be taken that the measure should not be made a simple means to enable a debtor to hold any property he might acquire after bankruptcy.

§ LORD ROMILLY
said, that one of these Bills effected a serious change in the whole system of the English Law. It was proposed to be enacted that a bankrupt should be deemed guilty of misdemeanour, and be liable to imprisonment for three years, with or without hard labour, at the discretion of the Judge, for certain acts, if those acts were done with a view to defraud creditors. The bankrupt was to be held guilty unless he proved to the satisfaction of a Judge and jury that he committed the acts, perfectly innocent in themselves, without intent to defraud. For instance, in Part XX., sec. 365, it was enacted, that if within four months next before adjudication the bankrupt removes any part of his property to the value of £10, he is guilty of a misdemeanour and liable to be imprisoned for three years, with or without hard labour, unless he shows to the satisfaction of the Court and jury that he did not do so with intent to defraud. Therefore the bankrupt, when prosecuted under this clause, may have his account with his banker produced, and be called upon to prove that any cheque drawn by him for four months before adjudication, which exceeded £10, was not drawn for a fraudulent purpose. What answer could the bankrupt give to vindicate himself from such a charge? If he proposed to explain the transaction he is stopped at once; the bankrupt would not be allowed to give his evidence on oath, and unsworn evidence would be held to be no evidence at all. Can he call witnesses and prepare his defence? By no means. For that purpose he must employ an attorney; but he would not have the means of employing an attorney or procuring the attendance of witnesses, as every penny would have been taken from him by the process of bankruptcy. If Parliament were to do this, they would either enact a clause which it would be impossible to enforce, or they would authorize an act of the greatest possible injustice. Such a provision, even if it should be passed by their Lordships, would never be assented to by the House of Commons; and there was, besides, a great number of other clauses of a similar character. Nothing 1219 was more remarkable than the difference of feeling of the mercantile creditor in the abstract and in the concrete; always ready to enact clauses of the utmost cruelty against debtors generally—always most merciful and kind to the individual debtor who had become insolvent. The great evil of such legislation was that its tendency was to promote a system of reckless credit, instead of endeavouring, as it should do, to discourage that system, which was the principal cause of wild speculation and ultimate ruin.

THE LORD CHANCELLOR
said, that he concurred in every word which fell from his noble and learned Friend (Lord Cranworth) with regard to the after-acquired property of the bankrupt. He thought it was very necessary they should be careful, when they were abolishing imprisonment for debt, not to hold out our bankruptcy proceedings simply as a means for a person to get what was commonly called "whitewashed." But upon that point the present Bill proceeded further than that of 1866, which made after-acquired property liable if the dividend had been less than 6s. 8d. in the pound; whereas it was now proposed to make such property liable, under the direction of the Court, no matter what the proportion of the dividend might have been. With regard to the subject introduced by his noble and learned Friend the Master of the Rolls, he could assure his noble and learned Friend that the principle upon which the clauses to which he had referred were framed involved no novel principle in our criminal jurisprudence. There were many cases already in existence where the onus of proof was made by the law to rest on the person charged, that the acts charged were not the result of any criminal conduct on his part. This matter was one which had been much considered by the mercantile community; and they concurred in the view that if a person in trade was found, for example, falsifying or destroying books or removing property at particular dates, having reference to the particular circumstances of those dates, the onus should be thrown upon him of showing that he acted without any criminal or improper intention towards his creditors, and the creditors should not be left under the obligation of proving that which they could not prove—namely, what was passing in the mind of the debtor. He agreed, however, with his noble and learned Friend, that it was worthy of the consideration of their 1220 Lordships whether, if they thought it right to throw the burden of proof upon the debtor, his mouth should not be so far unsealed that he should be allowed to give his own statement of the transactions in which he had been engaged.

§ LORD ROMILLY
said, he believed it impossible for a Bill of this magnitude to be passed through Parliament in the two or three months remaining of the Session, and that it would be as well before it was proceeded with, to take the opinion of three or four well-qualified persons as to its provisions. When he had the honour of introducing the Incumbered Estates Court Bill for Ireland, he submitted his measure to a number of persons whom he knew to be hostile to it, and in that way objections were pointed out which would not otherwise have presented themselves; and he thought a similar benefit would be derived from a further discussion of this Bill out-of-doors.

THE LORD CHANCELLOR
reminded his noble and learned Friend that the measure had gone fully through the very process which he advocated. A Bankruptcy Bill had been introduced and freely criticized before a Select Committee in 1866. In 1867 another Bill, profiting by that criticism, had been brought in, and had also undergone similar criticism; and the present Bill was the result of the experience derived from those two previous occasions. He had, he might add, that day had the pleasure of meeting a deputation from the Chamber of Commerce of Liverpool, who had stated to him that they highly approved of the Bill, while pointing out two or three particulars in which they desired that its provisions should be modified.

EARL GREY
said, he altogether disapproved that principle of commercial morality which allowed men to launch into all sorts of speculations, and to pocket the money derived from them if they were successful, while, if they failed, only a small dividend was paid to their creditors. There ought, in his opinion, to be some modification of the old system of imprisonment, to meet the grave offences which were in those cases the result of imprudence as well as of fraud.