The Attorney General
moved, that the Bankruptcy Court Bill be committed.
§ On the question, that the Speaker leave the Chair,561
Mr. James L. Knight
rose reluctantly to address the House on a subject of such great importance at so late an hour of the night; but he was obliged to do so in consequence of the determination of his Majesty's Ministers to submit a measure of this importance to the consideration of the House at that period of the Session, and at so late an hour. Before he proceeded to make the observations with which he should have to trouble the House on the present occasion, he wished to guard himself against being misunderstood upon two points. In the first place, he desired anxiously not to be understood as considering or treating this as a party question. It was a question of great importance as affecting the general administration of justice, and he should be ashamed of himself if he could be actuated by any other motives than those which ought to influence a man in the consideration of such a question. He would take this opportunity of saying, that if he considered the present measure as one calculated to advance the interests of the community, with reference to the subject to which it related, it should have his humble support from whatsoever quarter it might come. He was also anxious not to be understood as contending, that the present state of the bankrupt-law was one that might not usefully receive some alteration. He agreed with all, or almost all, of those who had considered the subject, that there were several points in which this branch of the law, as well as most branches of it, might usefully receive some alteration. Admitting, therefore, that there might be points in which the bankrupt-law of the country might receive useful alterations, the question was, whether the Bill now before the House, would produce that alteration which was called for, and whether legislation, to the extent proposed by this Bill, could be usefully adopted for the general benefit of the community. He certainly felt some regret at the manner in which this subject was treated by his hon. and learned friend, the member for Winchelsea, and by the hon. and learned member for Newark, neither of whom, treated the subject in that tone of moderation and temperance which the nature of the question required. The hon. and learned member for Winchelsea during the observation which he addressee to the House on this subject, repeatedly diverged from his course, for the purpose 562 of making general observations, tending to the depreciation of that important Court, of which bankruptcy was a separate jurisdiction. He did not wish to allude more particularly to those observations because they were foreign to the matter then in hand. But whenever the question should arise to which those observations should be relevant, he should be quite ready to meet that hon. and learned Gentleman, if possible, to concur with him; and, if differing, to state the reasons on which his opinions were founded. The hon. and learned member for Newark went, if possible, a great deal further, because he thought himself warranted in saying, that the present system of the Bankrupt Laws was one which received the general execration of the public. How his hon. and learned friend, speaking from the very heart of the House—speaking, to a certain extent, as the organ of Government, could bring himself so to characterize the whole system of commercial law, which it. was very possible might remain unaltered, in its present state—how he could bring himself to make such a declaration, he was at a loss to conceive. It might be very well to make such statements when something like proof could be brought for ward to support them; it might be very well to state facts of any kind; but to speak thus of a system which had grown up and gradually improved under the superintendence of the first and best men that had ever sat on the bench in this country—to speak of such a system as a subject of general execration, was something far beyond what he ever expected to hear in that House, and certainly far beyond any observation he ever anticipated hearing from the hon. and learned Gentleman himself. The bankrupt-law of this country was not a law introduced in dark and barbarous times, or in times when institutions were totally foreign to those under which we now lived: it was introduced in the reign of Elizabeth, was amended in the reign of James, and received its grand improvement, under which it continued to be administered for so many years, from one of the greatest and best Judges that ever sat in this country, Lord Hardwicke, under whose auspices that great statute which amended the Bankrupt Laws was introduced. The principle of that statute was, to put the administration of the affairs of bankruptcy under a species of Chamber tribunal, much 563 more competent to investigate matters of account than an open Court not invested with the whole administrative care of the estate, which tribunal was assisted by trustees chosen by the creditors at large for the use and benefit of the estate, and from the decisions of that tribunal appeals were given to the first Judge in the country—namely, the Lord Chancellor. Had it ever occurred to any of the eminent Judges who had held the Great Seal in this country, to change such a system—had it ever occurred to my Lord Hardwicke, that the system was in its nature a proper subject of execration, and that it was a system of law under which a commercial country could not exist, the case might have been different. But did it ever occur to any of them? Did it ever occur to a great man since that time not unfriendly to Reform, not indisposed to change—he meant Sir Samuel Romilly, than whom no man ever existed more desirous to improve the administration of justice. Among other improvements which that great and public-spirited man introduced into the House, there were certain measures which were considered by it with the greatest degree of attention, and which were introduced after the greatest deliberation, for the purpose of improving the Bankrupt Law of the country. These alterations did improve it most materially; but were they of a nature to strike at the whole system? were they of a nature to level with the ground all that Lord Hardwicke had raised on the foundation of his eminent predecessors? Were those alterations of a nature to affect the whole administration of the commercial laws of the country, or to introduce a new system of law, which he would undertake to say, in point of detail, would require at least a twelvemonth to learn, even if then it could be correctly understood? What would be the consequence of launching this new system upon the community, with all its great, and extensive alterations, in lieu of an old system with which the commercial world had been familiar for so many years, he, for one, was at a loss to conjecture. This, however, he could see, that it must produce confusion, to a degree almost indescribable, until the various and extensive new provisions of this Bill, in detail as much as principle, should come to be correctly understood and applied. Having taken the liberty of shortly alluding to the general nature of this Bill, he would now pro- 564 ceed, as shortly as he could, to notice some of the inconveniences of this system which had been pointed out—inconveniences to which the learned and eminent persons to whom he had alluded, were not blind, but against which they endeavoured to guard carefully and sufficiently without unnecessary expense. One inconvenience was the want of judicial power to enforce that respect which ought to be paid to every tribunal. It was discovered that, as the law stood for a considerable time, the Commissioners, sitting to dispense justice, might be treated with insult and contumely, and yet might not be able to protect their jurisdiction by a proceeding in the nature of contempt—that lack of power which had been, if he correctly understood those hon. Gentlemen who had spoken on the other side, one of the causes of the objections which existed to this tribunal. Why, this objection had been already removed; by the existing law, the Commissioners had the same power of enforcing respect as any other Court had. There could be no fair reason for supposing, that since the passing of enactments which had produced that effect, the Commissioners' Court should not be attended with as much decorum and respect as any in existence. Then, it was said, that the lists of Commissioners were composed of improper names; but whose fault was that? It was the fault of the Lord Chancellor for the time being: it was not the fault of any past Lord Chancellor, but of the Lord Chancellor for the time being, who had the power of removing them at his will and pleasure—A breath unmakes them as a breath has made.The Commissioner's was no patent place; he did not hold by warrant of the Crown. The Lord Chancellor handed to his secretary a list of names to whom a commission should be directed, and he, at his own will and pleasure, at any one moment, could direct that no commission should be issued to any one particular individual, and that another name should be inserted. If the Lord Chancellor on coming to the Great Seal, or during the period he administered justice in the Court of Chancery, should find that in this jurisdiction there was an incompetent or improper person, it was not only in his power, but his absolute duty, to decide that no more commissions should be issued to that person. It was said, however, that some of these Commissioners were unfit. He 565 believed they were; but generally speaking, the Commissioners were men eminently fitted to discharge some at least of the duties of their situation alone, and without advice, and certainly qualified, with the assistance they received from those more experienced Commissioners who were always joined in the same list, to perform all the duties of the office in a satisfactory manner, in which manner, according to his judgment, and according to the proofs they had upon the subject, they had discharged them. But probably some proof upon this point, some result of experience might be applied, as a mode of ascertaining the manner in which these Commissioners had exercised their functions. He was, of course, now arguing the case only with reference to the London Commissioners, because one of the peculiarities of this Bill was, that it made a wide distinction between London and country Commissioners; on which latter point he should have a word or two to say presently. From the returns which had been made of the number of appeals prosecuted from the decisions of the Commissioners, it appeared that the average number of bankrupt petitions set down for hearing in the course of the year was, in round numbers, about 600. It must not be supposed that these were all appeal petitions: how many of them did the House suppose were appeal petitions? He had been furnished, from an authentic source on which he could rely, with an account of the number of petitions in bankruptcy in a given half-year,—the half-year from October 1828 to March 1829, both inclusive. The number of petitions in bankruptcy presented in that half-year were 318. Of these 318 petitions, only fourteen were upon questions that had been before the Commissioners; these fourteen, including appeals from the country, as well as from the town Commissioners; and yet this was the jurisdiction that had been branded as incompetent, which had been branded in the face of the country as execrable, and which had been boldly stated as unfit and improper to discharge the duties confided to it. This, however, was not all the information they possessed upon the subject. His learned friend, Mr. Montagu, an authority eminently competent to judge on this subject, as both sides of the House must admit, than whom a more strenuous opponent of this Bill did not live, and who was very properly quoted upon certain 566 points by the hon. and learned member for Newark, in his publication, entitled, "Letters to Sir Robert Peel on the Chancery Commission," gave this information. At a certain period, his honour the Vice-Chancellor, now Master of the Rolls, adopted a plan of classifying the petitions in bankruptcy, that was, taking them under different heads, and taking the different heads in rotation, as he judged most convenient: this afforded an excellent opportunity of ascertaining what these petitions were. Now, the number of petitions set down for hearing before the Vice-Chancellor, Sir John Leach, under that arrangement in June 1826, amounted to 190—of these the number of appeals from the Commissioners amounted only to twenty-three, including appeals from the decisions of the country Commissioners. In the following month of July 1826, the number of petitions set down for hearing was 253, and of these only twenty-seven were appeals from the Commissioners. The proportion, therefore, of appeals was astonishingly small; and it should be recollected, that according to the present system—a system which he wished to see altered as much as any man, and which he would lend his humble aid to alter, if necessary, in any reasonable manner that could be suggested—the case was not heard before the Court of Chancery in the same state as it was heard before the Commissioners, but it was heard on additional evidence. This, however, was a mischievous practice, which might easily be corrected without the assistance of any Act of Parliament, and which he hoped to see corrected before he was six months older. When it was recollected that the number of appeals was so exceedingly small, though many of them were heard on additional evidence, he would ask, how could it be fairly inferred that the Commissioners so exercising their jurisdiction, were an incompetent tribunal? He might be told, that the expense and delay of proceeding prevents the parties from appealing in many cases. He utterly denied that, if that course operated at all, it could by possibility operate to any thing like the extent that would produce this proportion. It was perfectly absurd to suppose that it could be so. He certainly could bring no other warrant for what he stated—no other qualification for this discussion than that of having been for some years practically conversant with these matters, having 567 been employed in them, and the other business of the Court to which he belonged from morning to night. He was enabled to state, that the cases cited by the learned Attorney General, the hon. and learned member for Newark, and the hon. and learned member for Winchelsea, were but a few out of a very great number, and therefore they gave anything but a fair and correct idea of the general state of bankruptcy. The cases which had been cited were those in which very great and complicated accounts had given rise to questions and disputes, which were by no means cases of ordinary occurrence. Now the House should recollect, that these hon. and learned persons had spread their inquiries in picking up these cases over a very long space of time. The case of Martin Thomas was in progress at the time when he (Mr. Knight) was first called to the Bar, a good many years ago: the case of Bartholomew Thomas was nearly as old. In a period, therefore, now spreading over a good many years—his learned friends had been able to select only a very few cases of this description. Apply this period as a criterion to any other branch of the laws of this country—for risks and vexation are not confined to any one branch of it—and see whether similar cases had not occurred in other Courts; were there no litigiously contested suits, no expensive actions in the other Courts of this country? Were there no other instances in which the spirit of litigation could be shewn to have succeeded in causing delay and expense? Were there no other cases in which peculiar circumstances had given rise to waste of time and expensive proceedings? He used the expression courteously, but really this was hardly a fair or proper mode of argument. It was not a proper way of bringing before the House the whole state of this branch of the law, to select three, four, or five instances of litigation extending over a period of something more than fourteen years. It might be urged that the cases which his hon. and learned friends had selected were fair samples of the whole. He denied that, from his own personal knowledge: but he did not ask the House to believe the fact because he stated it. He was sure his hon. and learned friend opposite would do him the credit to allow that he believed what he said, or, at least, that he had some knowledge upon the subject, and some experience, and he would assert, that the cases 568 which had been cited afforded nothing like a fair representation of the general nature of cases in the Court of Chancery. Having been concerned in most of the petitions in bankruptcy before the Vice-Chancellor, he had had the means of acquiring information on this subject, and he considered that they were generally far from being voluminous or encumbered with affidavits, and those which were always the most voluminous and contradictory, cases of concerted commissions, would be materially improved by one part of this Bill, of which he very much approved. It was proposed by this Bill to put an end in future to all objections to Commissioners on that ground, and the consequence was, that these voluminous petitions would be done away with. So much, therefore, with regard to the conduct of these Commissioners. The appeals had been wonderfully few. According to all his experience, the parties had not been prevented from appealing by the expense of the proceedings; because, the majority of the cases were those in which the bulk of the affidavits and the expense were not considerable, because the proceeding by which a petition in bankruptcy was prepared was short and simple. It might, perhaps, be stated, that, the parties were prevented from appealing from the decisions of the Commissioners by reason of the delay which took place. No delay with regard to bankrupt petitions ever existed in the Vice-Chancellor's Court; there was at one period a considerable number of very bulky petitions, of great weight and importance, in the Lord Chancellor's paper, but in the Vice-Chancellor's paper—his Honour's being the Court in which they were originally heard—there never was any considerable delay, and there was now none at all. A petition might be heard as soon as it was presented. The number of petitions which stood in the paper of the present Vice Chancellor when the Court rose for the vacation, was very trifling. None had been presented more than two months, and every one would be heard before November was over. But when a bankrupt petition was pressing in its nature, the Court invariably advanced it on the paper. Those who talked of the interminable delay and expense of this proceeding, ought to know, that if any counsel could state to the Court that a bankrupt petition was in its nature pressing to be heard, the Court instantly ad- 569 vanced it—he himself had been repeatedly engaged in cases where there had been a decision of the Commissioners on one day—say Monday—it had been pressing in its nature, the Vice-Chancellor or the Lord Chancellor had been applied to, to advance it; he had done so; it had been in the paper on the following Wednesday morning, and sometimes heard on that morning; or, if time had been required to answer affidavits, it had been heard before the week was out. It was, therefore, the fault, either of the party himself or of the agent, if a case of pressing importance was not heard directly, because the Court was always open. One word more on the subject of affidavits. Nothing tended so much to increase the bulk of affidavit evidence as delay, because the parties often thought that they never could sufficiently add to that description of evidence. Some fact, or some admission, occurred to the recollection or imagination of the individual, which it was supposed might be of importance, and accordingly, it was embodied in an affidavit: this was met by another, and so they went on with affidavits in the shape of assertion and contradiction from time to time, until the bulk of the evidence had, in some few cases, become enormous; but, under the present system, this was prevented, because the petition was set down in its turn to be heard, and those affidavits only were required which might be thought material to the decision of the case, and a vast multitude of facts which were subsequently remembered or imagined, and which were, more or less, material to the issue between the parties, were not given in evidence, accordingly the bulk of affidavits in bankruptcy became less and less every day. He had been induced, in the observations he had made on the Commissioners, to remark on the subject of the jurisdiction by affidavit, to which he must presently again refer, but this would prevent his enlarging much upon that topic, and he had shewn that the affidavits in the Court of Chancery need not be very bulky or expensive. Objections had been urged to a jurisdiction by affidavit generally, and he was quite ready and willing to admit that, there were objections to that mode of investigating questions; but it should be recollected that the proceeding by affidavit had one material advantage—namely, that it enabled them to have the statements of the parties themselves upon oath; and one of 570 the most useful modes of investigating the truth was, to observe narrowly how far a party shrunk from asserting a fact, or from repudiating an assertion—this was an advantage belonging to such a jurisdiction which was not easily redeemed. But the question had been argued as if bankruptcy were the only jurisdiction which decided upon affidavit. Every Court in the country decided upon affidavit to a greater or less extent. Were there not important, cases in which the King's Bench decided on affidavit? He had himself seen cases in the Court of King's Bench decided on affidavits which had exceeded in bulk anything he ever saw in the Court of Chancery; and on questions relating to a new trial, where, in general, the case was discussed wholly on the evidence given in the Court below. In support of this assertion he could mention many cases, and cite one in particular which occurred on the western circuit some years ago. His hon. and learned friends opposite were perfectly aware of the multitude of cases in which both the King's Bench and Common Pleas daily decided on affidavit. This was the case, too, in all matters of lunacy in the Court of Chancery; in cases affecting the guardianship of infants, in questions by which the most important rights in this country were litigated and decided; and, therefore, the House would not here enter into any observations, affecting the general nature of the propriety of the jurisdiction by affidavit without impairing the whole jurisdiction of the country; and if the jurisdiction of bankruptcy was to be objected to on this ground, they must go round to all the Courts in Westminster Hall, and remodel and reform every one of them. They must not be told, then, that the general impropriety of the jurisdiction by affidavit was a reason for introducing an Act of Parliament with respect to bankruptcy; it had nothing whatever to do with it. There were two cases in which the jurisdiction must be by affidavit, must continue to be by affidavit, and in which there were objections to all other modes of proceeding. But why need there be any affidavits at all? If the jurisdiction by affidavit, generally, be so objectionable—if his hon. and learned friends were prepared to bring in their separate measure for destroying the King's Bench jurisdiction by affidavit—and to be consistent with argument they must go 571 that length—then the Lord Chancellor must give his directions, or, if there was any doubt on the subject, a short enactment would do it in a moment, that the parties should proceed before the Court upon the same evidence on which they proceeded in the Court below, and then they would have all they required. The hon. and learned Gentleman opposite seemed to forget, that the Commissioners had the power of examining witnesses vivâ voce. Their depositions were taken down in writing from the mouth of the witnesses, from questions put to them; if it were known by the parties that the case would be tried by the Court above, upon the same evidence as that taken before the Commissioners, they would arm themselves with their witnesses before the Commissioners—they would take the greatest pains to have the latter properly brought before the Court below, and there would not then be so many appeals from their decision. Did all this render this Act of Parliament necessary? What was the nature of the present tribunal? It was established in the reign of Queen Elizabeth; it was amended by Lord Hardwicke; it was improved again by Lord Thurlow, and his great successor; no part of it was attempted to be subverted by Sir Samuel Romilly; and these alterations were proposed under the auspices of a Judge of whom he wished to speak with all possible public and private respect; but who, for all that, had not been at the head of that jurisdiction yet barely twelve months. Under this jurisdiction, questions were, in the first instance, mooted before Commissioners selected by the Lord Chancellor, who was responsible if they were not properly qualified; for, he might change all, or any of them, at a moment's notice. The examination of the witness was vivâ voce, he was confronted with the person to whom he was opposed, and, in the event of a party appealing from the decision of the Commissioners, he had his option of going either before the Lord Chancellor or Vice-Chancellor. He had shewn that this jurisdiction might be relieved from all the inconveniences of affidavit evidence—if affidavit evidence was generally inconvenient, which he was sure no lawyer in that House would say—without being prepared to go this length. He had shewn, that delay did not exist, and that affidavits, if affidavits were to be used, would necessarily be brought within a rea- 572 sonable compass and a reasonably short space of time. He had shewn that every pressing case might be, and was, heard immediately, and that every case which was not pressing might be heard within the space of two months after the petition was filed. This was the actual state of the case. Another objection was made to the present system, namely, that the Commissioners did not attend to their duty—that they had to attend to several commissions at the same moment. If it was as the learned Serjeant, or one of his hon. and learned friends told them—if a Commissioner were so to misconduct himself as to be busying himself with a newspaper when he ought to administer justice, could it possibly be supposed that a Judge who so misconducted himself would not be instantly removed by the Lord Chancellor, who had at any time the power of taking up his pen and striking him out of the list? If there was any real cause of complaint—if it really were a mischief that the Commissioners at public meetings at Basinghall-Street, which place was now substituted for Guildhall, should attend to several meetings at the same time—why did not the Lord Chancellor prevent it? Why did he not—as he might—issue an order that only one commission should be attended to at a time, and that a given portion of time should be allowed for each commission? He had the power, and, if it was required of him, he ought to exercise it. Why had no Lord Chancellor done so? Because it was not requisite to be done: if it were requisite, the number of appeals would be somewhat greater than he had mentioned: he had stated what proportion the appeals bore to the decisions; and could any one suppose that, if the business were so improperly transacted, the number of appeals would not be considerably increased? In point of fact, however, the business at public Meetings was generally of such a nature that, without any inconvenience, two or three Commissions might go on at the same time; because, if it should turn out that the matter was one requiring grave deliberation and discussion, it was adjourned to a private meeting. He was not going round about to avoid mentioning the evils of this subject. He was shewing that it was not inconsistent with the due administration of bankruptcy that considering the nature of the business transacted at Basinghall-street, three or four public 573 meetings might be held at the same time; if this was not the case, and if this were an evil, whose fault was it? Why, it was the fault of the Lord Chancellor; and if any Commissioner should not think it worth his while to remain in a commission, in respect of which he should be so occupied and so restricted, the numbers might, if necessary, be diminished and so reduced as to make these offices worth the attention of a sufficient number of competent individuals. He did not mean to defend the practice of taking several commissions at the same time; but if there was any practical mischief in it, it was for the Lord Chancellor to correct it. He would, while on the subject, trouble the House with the evidence given before the Chancery Commission by his learned friend Mr. Roots, known by most of them as a very experienced and judicious Commissioner of Bankrupts, who had been a Commissioner in the year 1825—when that gentleman gave the evidence to which he was about to refer—upwards of twenty years, and who had practised in the bankruptcy business in the Court of Chancery for a period now extending over a quarter of a century. He was asked, 'Would it not be a very material improvement to have the Commissioners distributed in such a manner as to ensure their attention?' His answer was, 'I do not think that, in general, such an arrangement could be made, so as to be productive of benefit, for one reason, among others, as I have already stated, that there is not enough business in each Commission to employ the whole of the Commissioners, and therefore one Commissioner might sit for an hour and have nothing at all to do.' He meant to shew, before he sat down, that the new Judges to be appointed under this Bill would, during three-fourths of the year, have nothing whatever to do. The former gentleman stated, in answer to a question put to him, 'I doubt whether any very material benefit would arise from that, if the Commissioners take care not to hold too many meetings together.'—'Then you think no improvement, would result from that?' ' No; because it is but seldom that any Commission in itself requires so much exclusive attention, unless in an extraordinary case—the failure of a very large house, for instance, in the course of which you have most difficult matters to inquire into. But it is very seldom 574 that one Commission is so complicated that it is difficult to do anything else: at the same time, when a large failure takes place, it is the practice to devote the meeting to it exclusively.'—'Then it is your opinion that you can attend to the business to be done under Commission A as well as B?' 'Under A it may happen that there may be nothing to be done; and, in that case, I may as well attend to another: it hardly ever happens that three Commissions at the same time have the same quantity of business.' He had now shewn, from the evidence of Mr. Roots, than whom a more experienced Commissioner did not exist, that more than one Commission could be attended to at once, and this shewed why the Lord Chancellor had not interfered. Before he left this part of the subject, he would shortly address himself to the number of meetings held under Commissions. Observations had been made on the temptations to which these gentlemen were exposed, to neglect, a proper performance of their duty, and to increase the number of meetings, on account of the profits arising from them. It happened fortunately that they had the means of ascertaining the average number of meetings held under Commissions in London, and the result of that average at once precluded the possibility of the justice of any such observation. The number of London Commissions opened in the course of a year, taking an average of twelve years, was 650. The average income of the London Commissioners, derived from fees at meetings alone, might be safely taken at. 26,000l. a-year; that sum divided among fourteen lists came to exactly 40l. a Commission upon 650 Commissions, and 40l. a Commission would give, as near as possible, thirteen meetings under every Commission; that was the average under London Commissions of a considerable number of years. Of those thirteen meetings, some were public and some private. Among the public meetings were included mere matters of course, the execution of the assignment, for instance, and other matters of that description, which were inevitable under all Commissions; therefore he was taking it at a fair calculation, when he said, that the average number of private meetings under every London Commission, did not exceed six, or at the utmost seven. Could the House consider this as a very large proportion, when the 575 great and important mercantile interests involved in the administration of London Commissions were taken into consideration? Could any man living say, that an average of six or seven private meetings under each London Commission was more than was proper? He really was surprised and astonished when he received this information from authentic sources, to find that it was possible to transact such important business with so small a number of private meetings. What became, then, of the taxation and oppression of private meetings? What of the argument with respect to those extraordinary cases of twenty or thirty meetings under one Commission? He had shewn to the House, that the average number of meetings was six or seven; and considering what this business was, and considering that the whole expense of these meetings was so very small, was there any occasion for legislation on this point? There were no practical grievances which could not be remedied by an order of the Lord Chancellor; the expense was much less than it had been stated to be; but it was again stated, as an objection, that in many instances enormous masses of affidavits were thrown away, because the Court, when it came to hear the case, declared itself incompetent to decide it, and directed an issue to be tried; this, the hon. and learned Gentlemen on the other side declared to be a case of frequent occurrence. He would tell those hon. and learned Gentlemen, and one in particular, that this was a subject of which he could know nothing, never having practised in the Court. Out of 600 petitions set down for hearing in the course of a year, not more than ten on the average were sent to a Jury. Really, anybody who had heard the hon. member for Winchelsea, would suppose that this enormous expense was incurred in almost every case. In fact, issues were only directed at all in those cases where the Court, in endeavouring to satisfy itself on conflicting evidence, thought that justice might be better administered by that means, and where it did happen that the questions to be investigated were of such a nature as to require the examination of witnesses in open Court. It was also said by the hon. and learned Gentleman, that many questions ought to be sent to a Jury which were not now so disposed of. He did not know on what ground this argument might be founded, but he did 576 know, that most eminent lawyers from the common-law Bar, who had come to preside in the Courts of equity, and who, of course, were most competent to deliver an opinion, said, that highly as they valued Trial by Jury, invaluable as it was in this country in some cases, yet in the majority of mercantile questions it was not the most satisfactory tribunal, because the verdict of a Jury was liable to be influenced by a powerful advocate. He would not endeavour to deprecate Trial by Jury, but in such cases as these it was not necessary to extend the number of issues. The Bill, in the first place, established a Court in Bankruptcy, to consist of four Judges, who were to form a Court of Review, and were always to sit in public, "except as otherwise directed by this Act," there being no such direction in any part of the Bill. If this Bill should ever find its way into Committee, there was no doubt that this part must be amended. All the jurisdiction in bankruptcy that was now exercised by the Lord Chancellor or the Vice-Chancellor, was given to these Judges. There might be cases in which issues might be directed most advantageously to the interest of all parties concerned. At present, country cases were tried at the nearest assizes, and the witnesses being resident on the spot, of course the parties were not put to any very great expense in bringing them before the Court; but under this new Bill, on every petition in bankruptcy, whether it was in a country case or a town case, the issue was to be tried by one of the Judges of this Court, in his own Court here, and nowhere else. Supposing this part of the Bill were to remain in its present state, he would beg to ask those hon. and learned Gentlemen who talked of the expense of the present system, whether they did not think the expense would be increased to an enormous extent? This was clearly a lapsus; but he could shew five hundred other points for the purpose of bringing under the consideration of the House, the manner in which this Bill, by which the whole commercial law of the country was to be altered, had been brought forward, and on which Bill he was driven, at that late hour of the night, and at the very expiration of the Session, to address the House. In addition to the Judges of this Court, there were to be three clerks and a secretary appointed; and all costs of suit between party and party in this Court of Review were to be taxed by one 577 of the Masters in Chancery. So that this Court was not even to tax the bills of its own practitioners, but they were to be submitted to the revision of another Court. The mode of preventing both delay and litigation was this. Commissioners were to be divided into two subdivision Courts—of course three in each, for the purpose of taking examinations, and questions which were referred from a single Commission were to go to these Courts, unless the Commissioners should think fit to direct otherwise. What this otherwise was to be, nobody knew. These subdivision Courts might sit in public or private, as occasion might require; and the Act directed that it should be lawful for one or more of these Commissioners to exercise all the duties vested in the Commissioners of Bankrupts, provided always that the single Commissioner should have the power to commit any bankrupt or other person examined before him, unless as directed by the Bill. Now, at present, three Commissioners had the power of committing a bankrupt. The Act, with a laudable anxiety for the liberty of the subject, provided that that should be the case. But the effect of this Bill would be, that one Commissioner could exercise that important duty which was now vested in three. This was most objectionable. The proceeding before Commissioners of Bankrupts at the present time, was well known and understood by the House. The Commission was in common use, and contained words to which successive times had applied a meaning; but this Act struck away the Commission, and produced something in the nature of a fiat, which no one could understand from the provisions of this Bill. It was enacted, that in every case in which the Lord Chancellor had power to issue a Commission under the Great Seal, it should be lawful for him so to do, and also for the Master of the Rolls, the Vice-Chancellor, and each Master in Chancery, and so on—in short, the effect of this provision was, to alter a power which, from the reign of Queen Elizabeth down to the present time, had been committed to the Lord Chancellor alone. At present, if there was the slightest doubt on the docket paper—the paper on which the Commission issues respecting the owing of the debt, and so on—it was submitted to the Lord Chancellor, but in future it was to be submitted not only to him but to those Judges whom the very principle of this 578 Bill deprived of all knowledge and experience. He might be wrong, certainly, in the view he took of some parts of this Bill, but so he understood them. The Bill then went on to say, that the country Commissioners should be selected by a Master in Chancery, who was to exercise his discretion as to fit and proper persons. It was not to be forgotten that this Bill gave the power of committal to country Commissioners, that was to say, to country attornies; and was it to be endured, that the whole commercial law of the country was to be exercised in this way, by individuals selected in this manner? The Bill then proceeded to the enactment of a new oath to be taken by Commissioners in the country, and afterwards to a long and laborious provision with respect to the manner of proceeding, in case the bankrupt should dispute the adjudication. 'That if any trader adjudged bankrupt shall be minded to dispute such adjudication, and shall present a petition praying the reversal thereof to the said Court of Review, such petition to be presented within two calendar months from the date of such adjudication, if such trader shall be then residing within the United Kingdom, or within three calendar months from the date aforesaid, if then residing in any other part of Europe, or within one year from the date aforesaid, if then residing elsewhere, &c.' A commission of bankruptcy was an ex parte proceeding, and a man might be made a bankrupt without having any previous notification of it. According to this Bill, although at the time of his being made a bankrupt he might be at the extremity of Russia in Europe—still he was to have no redress, if the adjudication was an improper one, unless he proceeded within the space of three months. A commission of bankruptcy might be taken out against a man the moment after he had sailed for India: he might be totally unaware even of the probability of such a thing occurring; the Commission might have been sued out under the most vexatious circumstances; yet, according to the provision of the Bill, if the adjudged bankrupt did not, within the space of twelve months—which, in most instances, would be impossible—institute proceedings in England to dispute the adjudication, he would be declared a bankrupt for ever. These considerations convinced him (Mr. Knight) of the necessity of considering the provisions of this 579 Bill fully and minutely, and of the impropriety of proceeding with so important a subject at this hour of the morning. The next clause related to the power of the Lord Chancellor to annul the fiat. It provided—'That it shall be lawful for the Lord Chancellor, upon the reversal of any adjudication of bankruptcy, or for such other cause as he shall think fit, to order that any fiat issued by virtue of that Act shall be rescinded or annulled; and such order shall have all the force and effect of a writ of supersedeas of a Commission, according to the existing laws and practice in bankruptcy.' This involved a direct contradiction to the preceding provisions of the Bill—a contradiction which it was perfectly impossible for him to reconcile. At this time, however, it would be vain and idle to dwell upon it. Then, by the 23rd clause, an alteration was proposed, for which a good reason might be given; but which, as at present informed, he was totally unable to understand the necessity of. The clause provided—'That it shall be lawful for any Commissioner, who shall make any adjudication of bankruptcy, to appoint two or more public meetings, instead of the three meetings directed by the said recited Act, for the bankrupt to surrender and conform, the last of which said meetings shall be on the 42nd day by the said Act limited for such surrender.' Under the existing system three meetings of creditors were held. At the second, the assignees were chosen; and at the third, the bankrupt's accounts were investigated. If there were to be but two meetings held, and no assignees chosen at that time, how were the bankrupt's accounts to be investigated? This was a point of importance, and deserving of infinitely more attention than at this time of the night it was possible to bestow upon it. The appointment of the official assignees belonged to a distinct head of observation, which he would pass by, and the next provision could, in his opinion, lead only to delay and expense. By the 34th clause it was enacted—'That any one of the said six Commissioners may adjourn the examination of any bankrupt, or other person, to be taken either before a Subdivision Court, or the Court of Review, or, if need be, before both Courts in succession, and may likewise adjourn the examination of a proof of debt, to be heard before a Subdivision Court, which 580 said Court shall proceed with such last-mentioned examination, and finally, and without any appeal, except upon matter of law or equity, or of the refusal or the admission of evidence, shall determine upon such proof of debts. Provided always, that in case, before the said Commissioner, or Subdivision Court, both parties, the assignees or the major part of them, of whom one to be the official assignee, and the creditor, consent to have the validity of any debt in dispute tried by a Jury, an issue shall be prepared under the direction of the said Commissioner or Subdivision Court, and sent for trial before the Chief Judge, or one or more of the other Judges; and if one party only apply for such issue, the said Commissioner or Subdivision Court shall decide whether or not such trial shall be had, subject to an appeal, as to such decision, to the Court of Review,' Under this clause, every creditor would be driven to the necessity of either having his case tried before a Jury, or of having it decided in the first instance by the Subdivision Court, without any appeal. The House would judge of the propriety of such an enactment. By the next clause it was provided—'That if such Commissioner, or Subdivision Court, shall determine any point of law or matter of equity, or decide on the refusal or admission of evidence, in the case of any disputed debt, such matter may be brought under review of the Court of Review, by the party who thinks himself aggrieved; and the proof of the debt shall be suspended until such appeal shall be disposed of, and a sum not exceeding any expected dividend or dividends on the debt in dispute, in such proof, may be set apart in the hands of the said Accountant-General until such decision be made.' If there was any one proposition more generally acknowledged and acted upon than another in bankruptcy, it was, that the Accountant General received no money. Sums were lodged in the Bank under his name, but he actually received none. That was a principle which the Bill would invade. By the next clause it was provided—'That if the Court of Review shall determine in any appeal touching any decision in matter of law, upon the whole merits of any proof of debt, then the order of the said Court shall finally determine the question as to the said proof, unless an 581 appeal to the Lord Chancellor be lodged within one month from such determination: and, in case of such appeal, the determination of the Lord Chancellor thereupon shall, in like manner, be final touching such proof; but if the appeal, either to the Court of Review or the Lord Chancellor, shall relate only to the admission or refusal of evidence, then, and in that case, the proof of the debt shall be again heard by the Commissioner or Subdivision Court, and the said evidence shall be then admitted or rejected, according to the determination of the Court of Review or the Lord Chancellor.' This, again, was a provision which, by multiplying the number of appeals, by involving and perplexing the mode of proceeding, and by increasing expense, must, if carried into operation, amount almost to a denial of justice. The next clause related to the new trial of issues; and it provided—'That after any issue, by this Act authorized, shall be tried, a new trial may be moved in the Court of Review, which new trial shall be granted or refused according to the rules of the Common Law, and the practice of the Courts of Westminster, in granting or refusing new trials.' The fortieth clause surprised him not a little, after what he had heard with respect to the mischief of affidavits. It enacted—'That the said Judges and Commissioners of the said Court of Bankruptcy shall, in all matters within their respective jurisdictions, have power to take the whole or any part of the evidence either vivâ voce or by affidavits, to be sworn before one of the said Judges or Commissioners, or a Master ordinary or extraordinary, &c.' So that power was given to the Judges or the Commissioners to receive evidence in this obnoxious and objectionable mode. The conclusion he came to upon reading the provisions of this Bill was, that it would multiply expense, prolong litigation, create doubt, give rise to obscurity upon matters of detail, and throw great and general difficulty in the way of administering this branch of the law. In that part of the Bill which contained provisions for appointing the official assignees, a remedy was provided against an evil which had ceased to exist, or which, at least, was already provided against by Act of Parliament. In order that the estate of the bankrupt might be properly managed, the Commissioners were o ave the power of appointing an 582 official assignee, who, whether he was acceptable or not to the creditors, was to assume the management of the estate. What respectable merchant or tradesman in the city of London would consent to become the assignee to a bankrupt's estate, if, in doing so, he must be linked with a stranger? It was by no means uncommon for respectable persons to say, "I will act with A or B as assignees, but I will not act with C or D." By the provisions of the Bill, which related to the official assignee, it would be enacted, that no other should act as assignee, without being linked with a person of whom, perhaps, he knew nothing. Then the official assignee was to receive all the bankrupt's property. This was one of the most objectionable parts of the Bill. The official assignee, having received all the property, was not only to pay the money, but also to transfer all stock in the public funds, or of any public company, and monies, Exchequer-bills, India bonds, or other public securities, and all bills, notes, and other negotiable instruments into the Bank of England, to the credit of the Accountant General of the high Court of Chancery. The money and other property having been thus paid into the Bank of England, how was it to be got out again? Was the Court to be applied to for its order on every occasion that any portion was required? The expense and the enormity of inconvenience arising from such a provision would never be endured by the commercial world. This provision of the Bill must be perfectly nagatory. No respectable merchants and bankers of London would consent to accept the office of assignee under such a Bill as this. The only object that could be assigned for appointing this official assignee was, to prevent an evil which seldom occurred—namely, the failure of an assignee. A more unsatisfactory mode of preventing such an evil could not be suggested. The official assignee being, in the first part of the clause, invested with a positive, and a superior or paramount power, was in the latter part of it fettered by the following proviso—'That nothing herein contained shall extend to authorize any such official assignee to interfere with the assignees chosen by the creditors, in the appointment or removal of a solicitor or attorney, or in directing the time and manner of effecting any sale of the bankrupt's estates or effects.' With such a proviso what could the official assignee 583 really have to do? He was to give security. The clause enacted—'Such official assignee to give such security, to be subject to such rules selected for each estate, and act in such manner, as the said Chief and other Judges, with the consent of the Lord Chancellor, shall from time to time direct.' It was perfectly monstrous to suppose, that an assignee should, in every case, find security to the full amount of the probable value of an estate. But even if called upon only for a portion—in all probability, weeks, nay, months, might elapse before that security could be completed. Such were the means by which the evils of delay were sought to be avoided by this Bill. The official assignee was to derive an income from the estate by a percentage on all he collected. That was a totally new source of expense, because hitherto the assignees had never been paid. While the average expense of each Commission amounted, under the existing system, to 50l., under the new one it would amount to 60l. or 80l. He agreed with the hon. member for Winchelsea, that where the administration of the law was the object, expense should not be thought of. But this would not be an improvement, and therefore he objected to every additional expense which it created. Economy had been placed in the front of this Bill, as one of its great recommendations. In his opinion, however, economy was a recommendation which it did not possess. How were the Judges and Commissioners to be paid?—out of a fund to be raised by a tax upon the bankrupt's estates. These officers, too, were to have retiring salaries. That being the case, it was doubtful whether there would be at all times funds enough to pay them; and then, as a matter of course, a call must be made upon the country. At present, the average time occupied by the Lord Chancellor and the Vice Chancellor, in hearing bankrupt cases, was sixty-eight days; and as it was most probable that the number of appeals would be greater than at present, it was not likely that a greater time would be required for that purpose than was now found necessary. But suppose that a hundred days were to be occupied in this way. As the Vice Chancellor now got through all the bankrupt appeals, and was able to perform a considerable portion of other business, it was impossible to see what the suitors would gain by the new Court. He had not the least doubt that 584 the ultimate effect of these changes would be, to get rid of the Vice Chancellor's Court, which would be a most objectionable measure. The Bill was considered by the profession to be wholly uncalled for, and inadequate to the purposes for which it was framed; and he trusted it would not be persisted in at this late period of the Session. He did not deny, that improvements might be made in the machinery and working of Bankruptcy Commissions; but the Bill did not comprehend those improvements. Instead of amending defects, it would increase the difficulties in all questions of this nature, and add materially to the expense. It would create doubts and obscurity where the law was at present clear; and would weaken the confidence which it was highly expedient should be maintained between the commercial interests and the Judges in bankruptcy.
§ Mr. George Bankes
had strong objections to urge against this Bill, but as he could not urge them then, he wished the Debate to be adjourned.
§ Sir Charles Wetherell
said, that he would use an expression of Lord Brougham's on another occasion, and say, that this Bill stunk under his nostrils.
§ Debate adjourned.