SECOND READING. (Hansard, 23 June 1891)

§ LORD HERSCHELL
My Lords, this Bill proposes to amend the Law relating to bills of sale by exempting from the operation of what I may call the later Bills of Sale Acts, a certain class of security which is a very common form, and has been, as I know personally for a great many years, of mercantile security used particularly at Liverpool. It may be used, of course, in many other places, but I know of its use largely there. The earlier Bills of Sale Acts were intended for the protection of creditors, so that persons might not make secret dispositions of their goods, and the creditors find themselves in consequence defrauded. In an Act having that object in view the widest possible definition, of course, was given to the term bill of sale. In subsequent years Acts were passed having exactly the opposite view, namely, the protection of the debtor, because it was found that ignorant and unwary debtors were often entrapped into signing documents containing complicated provisions which they did not understand, by which they were some 1162 times led into difficulties and very often defrauded. It will be seen at once that the stringent provisions of these laws were not applicable to the mercantile instruments which had been in use for many years. They were never intended to be applied to cases of that description. The definition of bills of sale, which was very properly made as wide as possible, when the object was to protect creditors, was applied with certain exceptions to bills of sale where the purpose was the opposite one of protecting the debtor, the result being restrictions which would never, I am quite sure, have been designedly put upon mercantile instruments in consequence of the legislation attaching to them. This Bill proposes to relieve this particular class of mercantile instruments in common use from those restrictions. Of course it would not interfere with their being subject to the law of reputed ownership, or the provisions for the protection of creditors, but it would exclude those provisions which are inserted for the protection of debtors but which are quite inapplicable to mercantile transactions of this description. I have therefore to move the Second Reading of this Bill, which has passed the other House without objection.

§ THE LORD CHANCELLOR
My Lords, I entirely support the object of this Bill. The only doubt I have is one which I am sure is shared by my noble and learned Friend himself, that is to say, whether any attempt of a patchwork kind to get rid of the main objection here is not rather vain, in view of what must one of those days be undertaken, namely, the amendment of these two Acts of Parliament. They are Acts of Parliament it will be seen for totally different objects, and appointing totally different remedies, and the result is that it is extremely difficult among commercial people to know whether from the form of particular documents, they come within the definition of bills of sale or not. Speaking for myself, I may say that presiding in the Court of Appeal not long ago, the same difficulty was entertained by members of the Court as to whether a railway debenture was not a bill of sale within some of the definitions 1163 and therefore void unless made to comply with the provisions in regard to a bill of sale, as in the case of a person borrowing money on his household goods. Now, that is a result leading almost to an absurdity, and the consequence has been that mercantile people who have to deal with these securities, feel that sooner or later there must be an effort made to consolidate the law on this subject, and to prevent the application to ordinary commercial instruments of provisions which were intended for the protection merely of debtors. It was not intended to apply such a principle as that to commercial instruments, which it is necessary should be dealt with as rapidly as possible, and which certainly could not be managed with proper rapidity if business men had to go to a lawyer on every occasion in order to find out whether the particular instrument with which they were dealing was or not in exact form. Certainly the provision would have to be modified in some respects to bring it within the law with regard to those instruments. I think it right to say this, because I myself brought in a Bill last year applicable to these Liverpool instruments, which it was supposed at the time would be sufficient to get rid of the difficulty. I now find, however, there is another class of instruments which this Bill is supposed to affect, coming under the operation of the Act. The result, I think, is that we must, sooner or later, amend the law and put it into a more intelligible form, so as to render those two Acts of Parliament harmonious legislation, which at present they certainly are not.

§ LORD HERSCHELL
I entirely agree with the noble and learned Lord on the Woolsack. I have been tempted, I was going to say—though, perhaps, it is hardly the right way—to put my hand to the task and put these two Acts into more intelligible and satisfactory form, and certainly, if my noble and learned Friend will afford me his assistance in doing so, I shall be happy to make the attempt in the coming Session.