said, he was of opinion that an alteration in the present system of Commissioners was necessary, but he thought the present Bill required many alterations and modifications which there was not now time to make with so much minuteness and care as the importance of the subject demanded. In the first place, he thought the fees to be paid under the Bill were much higher than they ought to be. After comparing their amount with those connected with the present system, he had come to the conclusion, without fatiguing the House with the details, that the expenses of the new Bill would be greater in the proportion of forty-five to thirty-six than those attached to the existing methods of managing a bankrupt's estate. Another great objection to the Bill he considered to be, the appointment of four Judges instead of one, and he was borne out in this opinion by the high authority of the late Sir Samuel Romilly, who had declared that one Judge in bankruptcy cases was sufficient; an 655 increased number led to inattention in the whole. He feared, therefore, the expenses attending the appointment of these four Judges would be worse than thrown away. In any alteration that was to be made, patronage should be avoided. He fully exonerated the noble and learned Lord with whom the Bill originated, from any desire to increase his patronage thereby, but he should prefer that the number of Commissioners should be increased by three, with but one Judge, which would form an additional number to act in times of commercial distress, when the amount of duty would be materially augmented. He was also of opinion, that the expenses of appeals would be materially increased, and their number augmented. By the existing system one or two appeals were all that could be had, but by the proposed arrangement there might be four: the first from the Commissioners to the Subdivision Court; the second from the Commissioners of the Subdivision Court, to the Court of Review; a third from the Court of Review to the Lord Chancellor; and a fourth from the Lord Chancellor to the House of Lords. With every desire to accede to every real improvement in the bankrupt-laws, he feared the plan before them could not be considered such. Instead of effecting any Reform in the expense of this branch of the legislation, the proposed system would be found to be much more expensive. Instead of giving credit to the statements of individuals upon so serious a question, the House ought to appoint a Committee, before which professional men might be examined touching its merits. As to the argument that the law would be made either cheap or expeditious by the Bill, that was, in his opinion, altogether a fallacy. If the Bill should not be carried during the present Session, it was his determination to move, at a future time, that the subject be referred to a Committee [a cry of "move, move."] He would have no objection to move for the appointment of a Committee, if the proposition would not be considered as a mode of getting rid of the Bill, but it would, and with the views he entertained upon the question of the Bankrupt-laws, that would not be a fair way of meeting the question. He certainly hoped that the Bill would not pass, but he must decline the adoption of such means of defeating it. His object was, to have a fair 656 investigation—to have an efficient Court, and there were no facts before the House calculated to show that there was any chance of the accomplishment of such an object by the instrumentality of the measure they were now considering.
Mr. John Smith
regretted exceedingly that his hon. friend (Mr. Warburton) had found it necessary to oppose the Bill, for he knew that the hon. Member invariably acted upon his conscientious opinion upon every subject. He anticipated no such expense from the breaking up of the present system as seemed to be apprehended, and he knew from a long practical experience, that the change which must be produced by the Bill would be of the most beneficial nature. One of the most fruitful sources of litigation was the proof of a debt under a Commission by the present system, and his hon. friend proposed that to be continued, as preferable to the improved method now under review. He could assure his hon. friend, that the difficulties and delays of appeal in such instances were so great, that creditors were disposed to put up with severe loss rather than appeal at all. A Court of Review would obviate that evil, it was to be sitting throughout the year, and therefore, there was a necessity for more than one Judge. A suit would be decided in a few days instead of lasting as many months. Independent of this, but with all deference to the opinion of his hon. friend he had no hesitation to declare that he should prefer the opinion of two or three sensible and judicious lawyers to the authority of one, and he believed from a Court so constituted there would be few or no appeals. Those who were to act under the Bill could have no motive for an improper decision. His hon. friend was not, perhaps, although extensively engaged in commercial matters, practically experienced in those which unfortunately terminated in Commissions of Bankrupt. He (Mr. John Smith) had had a long experience of things of the kind, and he could not help declaring that no language which he could use could adequately express his detestation of the mode of decision in use amongst the seventy Commissioners. The word "execration," more accurately than any other, expressed the sentiments of commercial men as to the existing state of the Bankrupt-laws. He really believed that, in nine cases out of ten, bankrupts' cases were not thoroughly inquired into. A man who had seen the 657 working of the system said, on being; concerned in such a case, "I will take things as they come, without giving myself any further trouble to inquire, for I am sure, to do so will only be attended with loss of time, trouble, and expense." Even in the case of Howard and Gibbs, bad and contemptible as that case was, if the affairs of the bankrupts had been properly investigated and managed before the Commissioners, there would, he most conscientiously believed, have been a surplus at the winding up; and Howard would not now be, as he actually was, languishing in poverty. Immense sums of money were expended in working that Commission. Hundreds of meetings were held, and law suit followed law suit without end. He had been called to a meeting of the creditors of that firm, with many other unfortunate and interested persons; when the Solicitor to the Commission said "Gentlemen, a certain person owes the estate a large sum of money, and the only remedy you have is to file a bill against him." This was judged, after much discussion, so expensive a remedy, that the creditors declined to prosecute the claim. He had strong reasons for believing that there were, to say the least of it, very frequently a connivance, not to say a conspiracy, between the solicitors, the petitioning creditors, the accountants, and the bankrupts. He did not think it necessary here to enter upon the subject, of country Commissions, that fertile source of fraud; but he must be permitted to remark, that it was necessary that a bankrupt ought to have his certificate if he had acted honestly and fairly, and given up his property so as to satisfy his creditors in the best manner circumstances would penult; but if he had acted nefariously or improperly, there was no doubt a certificate ought to be withheld. In some cases whatever the opinions of the creditors might be, the certificate ought never to be granted, particularly as was often the case when the bankrupt happened to be a complete and notorious blackguard. He would give one instance of the fact:—a vulgar, ignorant young man, whom he might very well call a blackguard, happened to become a bankrupt, and he (Mr. John Smith) happened to be a creditor. The bankrupt was very obstinate in withholding facts in his statement before the Commissioners, and it was a difficult matter to get from him an acknowledgment of what he had done 658 with certain property, which, according to his books, he had received, to the amount of 17,000l. At last he admitted that he had spent it all in the following manner:—"Why," said he, "I kept a carriage for my mother in town, and I kept one woman at Brighton, and another at Hampstead, and I had two children by the latter to keep, and I kept a house in town." In short, the fellow confessed that he squandered the money away. Now he never entertained a notion of signing the certificate, of such a man; but the fellow got his certificate notwithstanding, and very soon too; and the Commissioners said, in answer to an appeal made to them upon the subject, "What can we do? We can't help it. He has told us the truth." The fellow soon afterwards recommenced business, and had it in his power to pursue a similar course of plunder. Now it would be most desirable to prevent blackguards of that description from obtaining additional facilities, and practising similar frauds, and he did hope the establishment of efficient Commissioners, under a Court of Review, would effectually check such fraudulent practices. A great deal had been said about the expense resulting from the new measure, and the dissatisfaction with which the public were likely to view that expense; but he knew it to be a fact that the public would think very little of expense if they could get the affairs of bankrupts equitably managed, and speedily and satisfactorily settled. They were willing to pay for substantial justice, and substantial justice they could not, have if the present system, or any part of if, were allowed to continue. His hon. friend had suggested a Committee up-stairs, and the examination of professional men. He (Mr. John Smith) had sat in the Chair above stairs upon the very subject, and he had had the assistance of the ablest men; but he could not boast of the progress that was made. As to the examination of professional men, it should be considered that the Bill would go to deprive a number of gentlemen of that description of their profits; and it was very natural to expect from most of them a decided opposition to the measure. He the more firmly relied upon the Bill, as it was the production of the great mind of the most extraordinary man in the country—of the man possessing the highest powers and the most intense desire to do good to his country.
§ Mr. Freshfield
, having been referred to in the course of the debate, felt it necessary to make a few remarks upon the machinery of the Bill now before them, which he was convinced was so defective that the Bill ought not to be passed in its present state. He was satisfied, that no Commission of any magnitude could be worked with such machinery as was proposed by it, under the superintendance of an official assignee whose duty it appeared was, to collect as quickly as possible the assets of the bankrupt, and pay them forthwith into the Bank But all persons conversant with the business of bankruptcies well knew, particularly those which were connected with colonial property, that the very first and necessary object of the assignee was, to obtain funds, not to distribute among the creditors, but to work the Commission. It would be necessary to send out means to procure the foreign assets to be remitted, but under the proposed Bill, this necessary preliminary could only be obtained by an application to the Court of Chancery, for the official assignee was bound to pay all the funds, as they were received, into the Bank. It might also be found difficult to persuade that Court that it was necessary to remit 10,000l., or perhaps a larger sum, to the West Indies, for instance, on the chance of procuring a crop, worth much more, from the estate of a bankrupt situated in one of the colonies, and even if the application succeeded, it could only be successful after much delay and expense. Another objection was, as to the payment of dividends to creditors. Their first and great object of course was, to obtain a division of the funds of the estate, which had been paid into the Bank by the agency of the official assignee, and how were the persons interested, to obtain this money for distribution? Was it meant that a given sum should be issued at the discretion of the official assignee, or that the whole assets were to be handed over to the other assignees by him for such purpose of distribution? If the last plan was to be the method, then the great danger of the present system would be continued, for the assignees would have the management of the fund, and the creditors had no security against fraud or failure. If, to prevent the chance of these losses, the first plan was pursued, and a given sum issued, then the impossible case must be supposed of the official assignee knowing what the demands of the various creditors 660 might be from day to day. But supposing that the more natural course was followed, according to the usual practice of the Court of Chancery, that each dividend was to be paid by the authority of the Accountant-general, that officer would take no responsibility, and it would be necessary to identify the creditors by the presence of the solicitor to the Commission, whose fee for attendance would probably make a large deduction from the amount of the dividend. Another objection to the Bill was, the amount of the per-centage to be paid to these official assignees. It frequently occurred, particularly in West-India bankruptcies that the aggregate amount of assets was 400,000l. or 500,000l., was an official assignee to have a large per-centage upon this immense sum? It even appeared by the wording of the Bill as if they were to have a per centage upon the gross assets, without reference to any deductions, while the proper arrangement undoubtedly ought to be, to make the per-centage of the official assignee depend on the sums obtained by the creditors, so as to make the interest of both parties the same. If the official assignee was to be entitled to his per-centage on the gross sum, and the creditors received their dividends, of course, only on the nett, it might happen that the difference between the two sums would be extremely large, and there could be no check upon the expenses of working the Commission. It was his most full and deliberate opinion that the Bill had been concocted with too much haste, that many of its arrangements were crude and imperfect, and although he was well aware that there were errors and imperfections in the existing system, yet it did not follow, if these could be cured by an alteration of the whole arrangements, that those alterations could be made at once and off-hand without the alterations themselves being liable to many objections. He was of opinion, therefore, with the hon. member for Bridport, that it was adviseable this Bill should be referred to a Select Committee, who might improve it and make it perfect if possible.
§ Mr. Hunt
hoped that the Ministers would not press a Bill of this consequence at the advanced period of the Session. It would be an expensive measure, and he for one could not see what benefit the suitor would derive from it. It was understood that Sir John Bayley was to be the 661 new Judge; he at present was one of the Barons of the Exchequer, with a salary of 5,000l. a-year. The salary of the Judge of the proposed Court was to be 3,000l. only, with quite as much to do. It was not in human nature to work more and be paid less, and therefore the appearance of this arrangement was so improbable, that he feared there was something behind—something that was not to see the light. Although the Lord Chancellor himself might not sell the patronage created by this Bill, yet there were such persons as Lord Chancellor's Secretaries, and other officers, through whom appointments to the new offices could be obtained. He fully believed there was no merit in the measure, but that it would turn out a great and overpowering job.
§ Mr. George Bankes
said, the objections which had been so forcibly urged by many hon. Members had been so feebly answered, and there appeared so many objections to the measure, that even the supporters of the Bill admitted, that as it stood it would be inadequate to the purposes for which it was framed; that, in fact, a Supplemental Bill would be necessary; so that it was plain that the Bill could not be sufficiently discussed in the present Session. The Bill went to invest one man with a patronage which might be much abused to political purposes, while it did not provide a remedy for the defects of the present Bankruptcy Commissioners system. The Bill was, in fact, so highly objectionable, that he would—acting on the suggestion of the hon. member for Bridport—move as an Amendment on the original Motion, that it be referred to a Select Committee to inquire into its provisions and machinery, and report thereon to the House.
§ Sir Charles Wetherell
said, he rose to second the Motion for the Bill to be referred to a Select Committee, and he did so upon many of the principles which had been urged by the hon. Gentlemen who had opposed the Bill, and whose arguments had been wholly unanswered. To press a measure of so much importance at such hours and seasons as those at which this Bill had been presented, was inconsistent with the privileges of the House of Commons. It was only yesterday that the Bill was put into a shape in which it was possible to regard it as a tangible measure—yet it was last night pressed upon their consideration at a late and unseasonable hour. Was that consistent 662 with fair discussion? The expense created by the Bill, would, according to the best calculation, amount to 26,400l. a-year. But that was not all. The hon. member for Buckinghamshire admitted, that the Bill was in a great degree an experimental measure; but what was to be done with this experimental Court? The Chief Judge was to have a retiring pension of 2,000l. a-year; each of the Puisne Judges a retiring pension of 1,000l.; and all the Commissioners, Registrars, and other officers connected with it, retiring pensions of different amounts also. This was the economy of the Bill. Then the Bill was not to come into operation until January next, yet the Lord Chancellor was, if he pleased, to be at liberty to appoint all the officers of which it was to be constituted, as soon as the Bill was passed; that was to say, to use a legal phrase, the Lord Chancellor was to have seisin of the Judges before the Judges have seisin of any Court to sit in, or any jurisdiction to attend to. That might seem very reasonable and very just to a man with a master mind, but to him it seemed most unreasonable and unjust. The hon. and learned Gentlemen on the other side of the House, although assembled in goodly array, did not condescend to answer any objections. A general order had been issued apparently among them to hold their peace. The hon. and learned Attorney-General had retreated from discussion; though, on ordinary occasions, he was withal an eloquent and a fluent man; with a copious and elegant choice of language; no one had a greater talent for discussion: yet, somehow or other, the Attorney-General had of late been gagged in the House of Commons. When one would expect him to enter fully and fluently into discussion—when it was necessary for the explanation of measures which he had introduced to the consideration of the House—behold he was either mute, or most niggard and parsimonious of words. It was said, that you must pay the salaries when you appoint to these offices, but according to this Bill the salaries were to commence in January, and the duties in February, so that, on the passing of this measure, they were to pay these gentlemen for the performance of no duties whatever. Perhaps the two silent Law-officers of the present Government could give some urgent reasons for adopting this course, were they not forbidden. Could any practical good 663 result, either to the suitors or to the public, from the institution of such a Court as this, or from an attempt to carry into effect a plan so involved and complicated as the present? The Court, he believed, would only be erected to be almost immediately demolished, and it would never enable any man to carry into effective or useful operation the Bankrupt-laws. He would not go into the whole of the details of this Bill, or into an investigation of all its rude and complicated machinery, for that had already been done by his learned friends; but there were one or two points which he thought peculiarly deserving of attention, and which he would allude to for the purpose of illustrating his own views. The first item was 26,000l. a-year for the payment of the legal batch of officers, and then came the official assignees, whose proposed enormous emoluments had already been touched on by his hon. and learned friend (Mr. Knight), and also by the hon. member for Bridport. The thirty official assignees to be paid by a per centage, were to be chosen from the merchants of the city of London, by the Lord Chancellor, thus giving a degree of patronage and of political influence to that high legal functionary which no person ought to have. The selection of the thirty merchants for official assignees ought not to be given to the Lord Chancellor—it would be better to give the patronage to the Archbishop of Canterbury, or still more desirable to give it to some civilian, such, for instance, as the Secretary of State, or the Vice-President of the Board of Trade. It was impossible, that the Lord Chancellor, with so many other duties, could find time to learn who were fit and proper persons to be appointed to these offices, and he must, therefore, rely upon the report or recommendation of his Secretary, or some other person. The Secretary of the present Lord Chancellor would, he dare say, make a proper choice, but he objected to leaving the power in the hands of any Secretary of any Chancellor. It was vain and idle to suppose, that my Lord Chancellor Brougham, or my Lord Chancellor anything else, could individually select these persons—the duty must devolve on the Secretary, or upon some other officer of the Lord Chancellor, and such a vast power ought to be intrusted to no such subordinate and inferior person. Hon. Gentlemen opposite, doubtless, recollected the number of speeches that were made 664 relative to the four Tellers of the Exchequer, and the great outcry that was made until these offices were abolished. The only duties these Tellers had to perform was, to give a tally for the money paid into the Exchequer, and also to keep a tally for the money paid out. They were considered as holding sinecure offices, which were, therefore, abolished; but this Bill appointed officers who, in point of fact, would be the Tellers of the Bankrupt Court, and would be sinecurists just as much as those Tellers of the Exchequer whose offices had been abolished. He invited his Majesty's Ministers to defend the appointment of these official assignees, and he challenged either of the legal functionaries opposite to do so. The whole of their duty would consist in getting together all the property of the bankrupt, to see that it was distributed, and to take a large per centage for themselves, while at the same time all the laborious duties were to be performed by the assignees chosen by the creditors. He had seen the lists of the persons intended to fill these and other offices, and these appointments were to be a means of political patronage, so that we should have only Reforming assignees. It was said, that Mr. Justice Bayley had consented to accept one of the new offices under this Bill, and that that learned Judge most cordially approved of the proposed alterations. But he had the authority of that learned Judge to say, that he had never consented to accept any appointment in the new Court, and that he had never expressed his approbation of this Bill. It was thought necessary that the authority of some eminent man should be had in favour of this Bill—it was considered desirable that some eminent lawyer, or learned Judge—some Sir Edward Coke, or Lord Hardwicke—some Selden or Maynard, should have expressed his approbation of it; and therefore Mr. Justice Bayley was called upon to throw his cloak around it. This Bill, however, had not that learned Judge's approval, and he had never authorized any person to say that it had. He had heard the names of some of the persons who were to fill the chief offices in this Court; and he understood that a learned Serjeant, who retired some years since from Westminster Hall, was to be one of the Judges. That learned Serjeant was a most respectable and learned man; but recently he figured as a leader in the 665 cause of Reform at all the metropolitan county meetings. That confirmed him in the opinion that all those officers would be appointed from political motives; and he protested against the Lord Chancellor appointing political persons to judicial offices. He did not mean to say, that according to the common course, the Lord Chancellor was not justified in appointing his own friends, but it was preposterous for the Legislature to establish a new Court of justice for a mere political purpose. There were no regulations in the Bill for giving the new Court control over the official assignees, but the matter was left to the Lord Chancellor, in case of complaint. He was sure that this part of the plan would lead to the greatest confusion, for a man might be appointed to one of these offices, of good mercantile credit, but still a very improper person from his disposition to discharge the duties of such an office. What enormous sums would be made by these official assignees in the case of a large failure! For instance, there was the very recent case of a large West-Indian house, which stopped payment for upwards of 400,000l.; and out. of such a bankruptcy, even the official assignee would make a small fortune. He recollected an instance of a bankrupt failing for upwards of a million; and upwards of 700,000l. was divided amongst the creditors. The smallest per-centage on such a large sum as this would be of a considerable amount. Indeed, the places of these official assignees would be worth, at least, from 4,000l. to 5,000l. a year. There was a per centage upon the collection, and also upon the paying out, and all the money paid into the Bankrupt Court must be paid out toties quoties, as it was wanted. The money was not to be left in the hands of the official assignees, for one of the objects of this Bill was not to permit the accumulation of property in the hands of the Assignees, but to have it in custodiam legis. According to this Bill, the consent of the Chancellor must be had before the money could be got out of the Bank, for the purpose of making dividends. It was said that evening, that this power was to be given to the official assignee, and that that officer should be enabled to get effects out of the Bank when he pleased; if this was the case, the clauses of the existing law must be altered, and there would be no security against the commission of a fraud by the official assignee. 666 He agreed with the hon. member for Buckinghamshire, that the present Bankrupt-law was most defective, and that there was hardly any branch of this law in which material improvements could not be made; but it appeared to him that this Bill would do anything rather than tend to improvement. Of all the means of security for the proper division of the effects of a bankrupt, this was the most clumsy and the worst that had ever been devised. The objections to this part of the measure increased in proportion to the consideration he was able to give to it; and they were insuperable, and no alteration could remove them. The hon. member for Buckinghamshire had dwelt much upon the defective administration of the Bankrupt-laws, and stated that the chief objection was the delay. The hon. member also stated that, at the period Lord Eldon was Chancellor, previous to the institution of the Vice-chancellor's Court, all bankrupt petitions were heard in the long vacation, and that, therefore, some were necessarily postponed for nearly a twelvemonth. This was a great evil, for he had known Lord Eldon often hear several hundred bankrupt petitions. When the Vice-chancellor's Court was established, the greatest advantage was derived to the public, and the relief in the bankrupt eases was immediately felt. At the institution of that Court, the greatest objections were felt to the removal of the bankruptcy business to any other Court, as the mercantile interests thought that they were entitled to the decisions of the highest legal authority in questions of this nature. An arrangement was made, however, by which the more difficult questions were still referred to the Lord Chancellor; and, by this means, for the last ten years there had been no arrears whatever in bankruptcy cases in the Court of Chancery. No one could deny that the present Lord Chancellor was a man of great talent, and that he got through business with great rapidity; but, at the same time, it ought to be recollected that he had been materially assisted by the Vice-chancellor; for there were no arrears in his Court. The next topic he had to allude to, had reference to the officers who had been displaced. The Lord Chancellor very wittily called the Commissioners the septuagint; but this Bill would replace them by a sextuagint. There was no great difference between the two numbers. The present 667 system was to be discontinued, because seventy officers were considered too numerous; but this Bill actually appointed to succeed them between fifty and sixty persons. His hon. friend, the member for Tewkesbury, a good banker and a sensible man, as well as the hon. member for Buck-ingamshire, had often told a dismal tale of the confusion arising from the number of officers in the old Court, but what would they say to this new Court? The chief complaint appeared to be, that great confusion arose in consequence of the same list of Commissioners being engaged upon more than one Commission at the same time. But surely it was not necessary to change the whole constitution of the Bankrupt Court, because the Commissioners did not sit often enough, or confine themselves to a definite question. The whole evil, in this respect, arose from the want of a practical rule in the arrangement of business. The hon. and learned member for Newark complained that affidavits were made in this Court for the mere increase of expense, and that it was inexpedient to proceed by affidavit when issue was to be joined on a question. Was not this the common course in the King's Bench; and in many cases were not the proceedings commenced on affidavit, and more especially on all questions of mandamus? He was surprised, therefore, that his hon. and learned friend should vituperate this Court for doing that which was done in the chief common-law Court of this country. He certainly did not think that it was desirable to encourage the referring questions of bankruptcy to Juries; and, in the time of Lord Eldon, the trials of issues of this nature were not frequent. Great improvement might be made in the proceedings of the Commissioners, but it would not be a material amendment to hold out inducements to try issues. The trying issues would be attended with ten times the expense of proceeding by affidavit. At present the Commissioners did not hear the whole case and determine on it, but if any difficulty arose they sent it to the Chancellor to determine. It would be desirable that the Commissioners should hear the whole case, and that there should be no appeal except in case of disputed judgment; by this means the great evil arising from the continual introduction of new matter would be removed. Thus the Lord Chancellor would not have to decide on a new case, but only to confirm 668 or rescind the judgment of the Commissioners on the case submitted to them. It had always been a matter of great anxiety with the merchants to get the decision of the first Equity Judge in the kingdom, but now this could not be done without occasioning very considerable additional expense, as the case must be carried through two additional Courts before the decision in this Court of appeal could be obtained. All these subjects were well worthy of the most serious consideration, and it was on this account that he was desirous to have the whole matter referred to a Committee up-stairs. He trusted that hon. Gentlemen opposite would resist being hurried on with a measure of this magnitude and importance, and would not consider it consistent with the dignity of the House of Commons that they should be found, at this late period, to pass a measure for establishing a new Court of Justice, without having an opportunity of examining into the probable workings of the Bill. The Solicitor General, when examined before the Chancery Commission, said, that he never would consent to separate the appeal in cases of Bankruptcy from the Great Seal. The appeal to the Lord Chancellor in the present Bill was a complete and idle mockery, and, in point of fact, the Chancellor would get an increase of emolument from this Bill, and would have nothing whatever to do. If this matter should be referred to the Committee, and after investigation it should be determined that these alterations ought to be made in the Court, then they should have the satisfaction of proving that they had not been hasty and unadvised in their decision. Some Gentlemen in this House would recollect the constant attacks made upon Lord Eldon, and that scarcely a week was allowed to pass over without some personal allusions being made to that distinguished man, in consequence of the establishment of the Vice-chancellor's Court. But a more able man than that eminent Judge never presided in a Court of justice; a man of greater talent and genius could not be met with; and a Judge more conscientious and laborious than Lord Eldon, never was placed on the judgment-seat. He might truly be said to have had a master-mind. He was, however, a Tory Chancellor, and therefore could not make those changes and adopt those systems which a Whig Chancellor did with perfect impunity. Hon. Gentlemen 669 opposite would have lifted up their hands with astonishment, and would have exclaimed against Lord Chancellor Eldon making those changes and adopting those plans which they lauded Lord Chancellor Brougham to the skies for doing. Oh, happy Whig Chancellor! Oh, unhappy Tory Chancellor! Unhappy Tory Lord Chancellor, who was to be allowed no assistance! Happy Whig Lord Chancellor, who had not only got a Vice-chancellor, but who had got a Bill that would give him a Chief Justice, three Puisne Judges, and six Commissioners, who were to relieve him of all his bankruptcy business, and give him patronage to the amount of 26,000l. a-year ! The unfortunate mastermind of Lord Eldon was to have no assistance, and was obliged to pay 2,500l. towards the salary of a Judge, who was asserted to be necessary on account of his personal defects. But now the times were changed. We had now a Whig Lord Chancellor, a Whig Administration supported by Whig adherents, and they were to erect a new Court of Bankruptcy to relieve the master-mind of the Whig Lord Chancellor from all its bankruptcy business. The Gentlemen on the other side of the House seemed to be pleased with their good fortune; they seemed to be chuckling at their luck, and no doubt they had cause to chuckle when it was recollected that, day after day, Lord Eldon was attacked in this House by the Press, in every quarter, where the malignity of party could reach, and was told that he ought to de all the business of the Court of Chancery; whilst now the story was, that a new Court was wanted. They might well triumph, for the Whig Chancellor had a triumph, and they were triumphantly sailing with him down the stream of unnecessary patronage. It was upon these grounds that he was disposed to say, that although the existing system of Bankrupt-laws should receive considerable amendment, yet the system, as a system, was correct, had had had the approbation of some of the most eminent men in the Court of Chancery. Let there be, if necessary, an Act to improve the system; reduce the number of the Commissioners, compel them to exercise and complete all the duties of a Court below, but adhere to the principle of a direct appeal to the Lord Chancellor. He never, in any case, was more satisfied of the tendency of any Bill to create dissatisfaction, than he was of this Bill's having that effect; 670 for it would increase expense in every possible way, and aggravate all the evils now so bitterly complained of. Under these circumstances he could conscientiously second a motion for a Committee; and if the result should be, that all the merchants and lawyers had changed their opinion, let it be stated, and establish a new Court upon that new opinion; but not establish a new Court, in favour of which no man who had ever thought upon the subject could have decided.
§ The Amendment having been put,
The Solicitor General
said, the hon. and learned member for Boroughbridge had reproached him for what he called the libido tacendi. This was a great fault in his eyes; but he would put it to the House whether he did not, in his desire to avoid it, fall into the opposite fault of the libido loquendi. He (the Solicitor General) was always most anxious to avoid wasting the time of the House by useless and unnecessary speaking; and if he now broke through his habits of silence, it was from an honest desire to bring back the attention of the House to the subject before them, and to rescue the Bill from the mistakes and misapprehensions, and consequent, misrepresentations, of his hon. and learned friend himself who spoke last. The question before the House was one of the greatest importance to the mercantile public of this country. It was, whether the Bankrupt-law should continue to be administered upon a system acknowledged by most Gentlemen Opposite to be bad; or be administered in the manner proposed by this Bill. His hon. and learned friend had characterised this measure by the name of "an experimental Bill." If he meant that it did for the first time otter a new judicature to the country, it was an experimental Bill; but if he meant that it was an experimental Bill, because not founded on sound reason and law, the imputation rested upon his own assertion only, for no attempt had been made to shew the fact by argument. There were several topics urged by the other side which it was needless to advert to, because the Gentlemen who had pressed them had, in many cases, answered one another. Some eulogized the present system of Commissioners, whilst others told the House that the Commissioners must, beyond a doubt, be thrown aside. The hon. member for Bishop's Castle, who addressed the House so fully and eloquently upon the subject 671 last night, said of the Commissioners,A breath can make them as a breath has made.Yet they were told by others, that this body, consisting of seventy persons, were sufficient satisfactorily to decide all the various complicated questions that arose upon this branch of jurisprudence. To do this Bill justice, hon. Gentlemen must understand the whole of that system upon which it was intended to operate. At that late hour of the night he would not trouble the House with what at no time was pleasurable, a technical legal argument; and indeed he was relieved from all difficulty upon that point; for the Bill did not in the slightest degree touch the present system of law, except in one particular, which all eulogized. In that particular, it would remedy an evil pointed out by the hon. member for Buckinghamshire. He alluded to that clause in the Bill which was to give validity to concerted Commissions. The hon. member for Buckinghamshire stated the difficulties of the mercantile world in winding up the affairs of an insolvent trader by means of a deed of trust. Now, concerted Commissions would have the effect of deeds of trust, and this Bill would rescue trustees under such circumstances from the perilous responsibility which now rested upon them. His hon. and learned friend had told them, among other reasons for not altering this system, that it was founded in enlightened times. He was happy to state, for the satisfaction of the House, that it formed no part of that ancient jurisprudence which they were told ought not to be touched; that it was in truth modern, but as to whether it was founded in enlightened times, he would presently give the House reason to judge. The Bankrupt-law owed its origin to the reign of Henry 8th. Before then there was no such thing as a Bankrupt-law, or any law approaching to it in character, except those which related to our dealings with the Lombard merchants. He should say, therefore, that in the statute of the 34th and 35th of Henry 8th originated the present system. At that time our mercantile speculations were beginning to enlarge, and there being, as the preamble of the Act stated, great frauds committed by persons becoming bankrupt, the statute was passed. In what manner did it treat bankrupts? It treated them as offenders, and handed them over to a jurisdiction which could not now be justified; nor was it then attempted to 672 be justified, except by the exigency of the case. The statute handed over the merchant to the order and direction of the Lord Chancellor, or Lord Keeper, the Treasurer, the Chief Justices of the King's Bench or Common Pleas, and another Minister. One of these parties was always to form part of the tribunal which was to take charge of him. No forms of pleading were prescribed, no rules of Court drawn up; no orders, no directions were given; in short, no limitation was placed to the power possessed by these parties over a bankrupt. The law continued in that state for thirty years, and then came the 13th of Elizabeth, which, perhaps, might be more truly said to have laid the foundation of our present bankruptcy system. That statute introduced Commissioners as convenient persons to whom the Great Seal was to delegate the order and administration of the bankrupt's affairs. By a construction of that statute, which would now be considered questionable, if not too late, this ordering and direction, instead of being shared among the other officers of the State named in the statute of Henry 8th was assumed by all Lord Chancellors, from the reign of Elizabeth downwards. Eighteen statutes were afterwards passed upon the subject of bankruptcy, most of them of the kind he had described, till the great statute of George 2nd. They all treated the bankrupt as an offender; and although they contained clauses for the security of creditors, their provisions in other respects must make them be looked upon as penal statutes; and, what was a great singularity, one of them contained an express declaration, that, although highly penal, they were to be construed against the bankrupt in the most liberal way. The last Act repealed them all, as also fifteen general orders that had been incorporated with them. The Bankrupt-law was said not only to be very perfect on account of the number of statutes that had been passed upon it, but from the great care and attention that had been bestowed upon it by different Lord Chancellors, particularly by Lord Hardwicke and Lord Eldon. With respect to the latter, he had been under great obligations to him in the early part of his life—obligations which he should never forget, and he would join in every eulogy that could be passed upon him. As a Judge, he was as great and eminent as it was possible to be. But the present Bill was not founded upon 673 imputations cast upon Lords Eldon and Hardwicke. It was, indeed, the object of hon. Gentlemen on the other side of the House to deal with this case personally. He would introduce no personal observations, except of a complimentary nature. But what was the conclusion he drew from these labours of Lord Eldon and Lord Hardwicke? It was, that so monstrously defective was the system, as far as the statutes were concerned, that to make out anything like equity it was necessary to resort to great and eminent Judges, who, under authorities questionable in point of law, had given a perfection to the system for which he should look in vain in the statutes which enacted it. The first question which any man would ask in looking at this law of statutes, of orders, and judgments of successive Chancellors, must be—how can such a system have been tolerated? The fact was, that it had been only the great exertions of eminent Judges, acting on doubtful judicial authority, which had given solidity to the system. But just in the same proportion that the Judges were complimented, the system itself was proved to be defective. Perhaps the House would allow him shortly to state the actual operation of the whole system. The Statute of 1 Elizabeth appointed individuals to exercise the important functions of Commissioners. These gentlemen, the present Commissioners, were comparatively young and inexperienced; but, whatever might be their errors on that account, they were as honest, as conscientious, and as enlightened a body as could be brought together under such a vicious system. Gentlemen of eminence, experience, and standing at the Bar, could not be induced to take upon themselves these comparatively humble functions. What would the House think when he told them, that in all the reports there was not one report of a case decided before the Commissioners—no report of any argument held before them? In short, they were never considered to form a Court for the purposes of law, all matters of law in bankruptcy going, directly or indirectly to the other Courts. The hon. member for Bridport last night admitted that the average number of petitions before the Lord Chancellor was 600, and he thought he made an important distinction when he stated, that fourteen of them only were appeal petitions and that the others were original. Bu what would the people of England say of 674 that system by which 600 petitions had been drawn from the Commissioners by the Court of Chancery, although no statute had delegated the power of hearing them to the Great Seal? All matters ought first to go before the Commissioners, and only to come before the Lord Chancellor by appeal. These petitions to the Chancellor were statements upon paper, confined by no rule of pleading, but containing pretty much what the petitioner chose to put in them. This statement had to be verified by affidavits, which were again answered by contrary affidavits. But as the history of these interminable affidavits had been given by some of his learned friends, he should not pursue it further. He had known many cases in his experience, in which the only limit set to this mischievous species of litigation (if considered with reference to expense) had been the utter exhaustion of all funds. Another matter, perhaps even more important, he must mention to the House: it was almost impossible to conceive the horrid perjuries to which this system led; but the House might form some notion of it, when he stated, that most of the cases which gave rise to these petitions, were cases in which fraud was charged on both sides, and in which there were attacks upon personal character. What was the situation of a Judge who had to decide on a case so brought before him? It was matter of daily complaint and lamentation, both by lawyers and Judges, that it was impossible in such amass of contradictory evidence to get at the truth. This arose not only from the infirmity of all written testimony, and from the statement of the parties being voluntary, and from nobody cross-examining them, but because crimination and recrimination took place till there was a mass of affidavits containing contradictions which made the barrister throw them down in a species of moral disgust. The Judge dared not decide upon such evidence, and at last sent the case to an issue, to be tried in a Court unconnected with the Court of Chancery, where all the affidavits were good for nothing, and the case was tried as between plaintiff and defendant, with due forms of pleading, and all the advantages of oral evidence. A new trial after this might be wanted; instead of moving for it before the Court which tried the issue, the parties came again to the Lord Chancellor. If they were pleased with the manner in 675 which their case had been conducted in the Court of common-law, they brought the same counsel, at a great expense, to argue the motion for a new trial, into the Court of Chancery. He had known cases—both where new trials were granted and refused—ultimately decided upon grounds, which, if taken originally, would have prevented all the expense of going to a Court of common-law. Considering this as an experimental Bill, the hon. and learned member for Borough bridge had, most likely, not thought himself bound to read it so attentively as if it were an established law, and had, therefore, fallen into a mistake with respect to the appeals to the Lord Chancellor. The appeals under the present system were such as he had stated them to be. But there was another evil to complain of. When a case had run the gauntlet of the Commissioners, of the Vice-chancellor's Court, and the Court of King's Bench, where the facts were decided upon, if some ingenious counsel could persuade the Great Seal that the matter in dispute was equity, and not to be dealt with in a Court of common-law—what, then, did the House think was the course pursued? Under the existing system it frequently happened, that before a party could receive a single shilling out of the estate to be divided, he must file a bill in Chancery, and thus commence de novo. The Lord Chancellor sitting in Bankruptcy, was not the Lord Chancellor sitting in Chancery. Therefore, when a bill in Chancery was filed, the party, in point of fact, commenced the whole of his proceedings de novo. The House would no doubt recollect the bankruptcy of Marsh, Stracy and Co., with whom the unfortunate man, Fauntleroy, had been connected. In that case every species of litigation was resorted to. In the Court of Chancery there was petition after petition. The best opinions, the soundest judgments, were given upon every disputed point, yet, from the defective state of the system upon which the bankrupt business was disposed of, the parties were still enabled to prevent a final settlement, and to multiply legal proceedings and legal expenses to an extent quite unprecedented either in his recollection, or in that of any other practitioner at the Bar. As the law at present stood, let the question in bankruptcy be ever so important, ever so proper for the consideration of a Court of law, any of the parties, 676 by filing a bill in Chancery, compelled the others to go through all the forms, and bear all the expenses of a long proceeding in equity. That being the case, could any man doubt the necessity of making an alteration in the existing law, and of establishing some such jurisdiction in bankruptcy as should prevent a repetition or a continuance of the evils of the present system? One of the great objects which any law upon matters of this kind should have in view, should be a speedy distribution of assets among the creditors. He had stated enough to shew that that was not and could not be the case under the existing mode of administering the Bankrupt-laws. Then, was it not the duty of Parliament to interfere, and to pass such measures as should place the creditor on a fairer footing? What was the object of this Bill? It was not to alter the law, but to improve its machinery, and the means of administering it. For he agreed with his hon. friends, that although he did not admire the means by which our Bankrupt-law was obtained, yet that, in point of fact—by what means it now mattered not—there was built up and consolidated as perfect a system of law upon the subject of bankruptcy as could well be imagined. That being the case, but abuses still existing—it was obvious, if the law was perfect, that the means of administering it must be imperfect. Then it became the duty of the Legislature to correct those means. That could only be done by establishing a new Court. To establish a new Court was the object of this Bill. To accept this Bill, then, was the duty of this House. They were asked, why establish a new Court? For this reason—that hereafter, as far as bankruptcy was concerned, law and equity might be administered in the same Court—that one single tribunal might be erected to determine that which hitherto had been subject to the various, the conflicting, the expensive and unsatisfactory decisions of different persons in different capacities, from the Commissioners to the Lord Chancellor—from a jury of the Court of common-law to the House of Lords. The hon. and learned member for Boroughbridge, among other objections to the Bill, said, that by the Subdivision Court it was proposed to vest in a single Commissioner powers which had hitherto only been intrusted to three. In his opinion, there was no reasonable ground of objection 677 upon that point. The one Commissioner would have a power which he had not hitherto possessed. That, however, only increased his responsibility, and if he had any difficulty upon a point, and desired to have the opinion of other responsible persons upon it, he would be able to obtain that opinion at once, and without any delay; he would only have to walk into another room, meet his brother Commissioners, and thus at once determine the doubtful point. Then there was the Court of Review, to which the first appeal might be made from the decision of the Commissioners. The general advantage of this Court would be, to prevent appeals from being carried either to the Court of Chancery or the House of Lords. The Judges who would preside in it were to be eminent lawyers, and from their decisions it could not be expected that many appeals would be made. The Court of Review, too, would be not only a Court of Record, but a Court of law and equity. It would try issues of fact, as well as determine points of equity. If the suitor, however, was dissatisfied, he would not lose his right of appeal to the highest tribunal of the country, any more than under the existing law; but it was hoped that, by the establishment of the Court of Review, the evils of ruinous expense and vexatious delay would, in almost every case, be effectually guarded against. The hon. and learned member for Borough bridge had brought forward a most formidable statement with respect to the expenses to which this Bill would give rise, as well as the patronage which it would create. The patronage to the Lord Chancellor must be—would be boundless, illimitable—the expense enormous—certainly not less than 26,400l. a-year. How the hon. and learned Gentleman could have arrived at those conclusions he knew not. He complained of not having had sufficient time to make himself acquainted with the provisions of the Bill. How could he find out then that the patronage would be so boundless—the expenses so enormous? The fact was, that the Bill would not cost the country 1l. per annum, because the whole of its expenses would be more than paid out of the fees derived from the suitors in the new Court. As for patronage, the hon. and learned Gentleman seemed to forget that the Lord Chancellor abolished by this Bill, the seventy Commissionerships, to which he had always had the appointment. 678 Was there any foundation for the hon. and learned Member's argument against this Bill upon the grounds of patronage and expense? The Bill was to a certain extent an experimental Bill; but doubtless it would be found to answer. There was one other point, and one only, to which he would allude before resuming his seat. A sense of justice to the noble and eminent person who now presided in the Court, of Chancery, deterred him from attempting to defend him from the attacks which had been made upon him in the House, in consequence of his introduction of this Bill to the consideration of Parliament. His character as a public man stood too high to demand eulogy from any one; he, therefore, should leave that character where he found it. Any thing he could say would fall short of his merit; and there was not one of his labours which more entitled him to the gratitude of his country than this attempt to amend the administration of the Bankrupt-laws. And if the House passed the Bill into a law, among the many monuments to his fame this would be one of the most celebrated—one of the most lasting.
§ Mr. Arthur Trevor moved, that the Debate be adjourned.
§ Lord Althorp
said, if there were any Gentlemen who wished to speak on the principle of the Bill, he, of course, could not expect them to go on at that late hour, but any main objections which hon. and learned Members might have to propose would be equally available to their purpose in the Committee.
§ Mr. Pemberton
stated, that, it, was his intention to offer certain arguments which applied to the principle of the Bill.
§ The Debate adjourned.