§ Order for Third Reading read.
§ Motion made and Question proposed, "That the Bill be now read the third time."—(Mr. R. T. Reid.)
§ MR. LEWIS FRY
said, he should not have attempted to detain the House at that late hour were it not that this important measure had passed the second reading without any discussion whatever. It was an important Bill affecting a large number of contracts relating to the sale of land and mercantile transactions for the sale of goods; and it ought not to pass without evidence that the change in the law which it contemplated was required by mercantile men. In past years it had been denied the support of important organizations representing the mercantile bodies of the country. The question had been discussed by the Associated Chambers of Commerce several times, and there had been great divergence of opinion upon it. When it was last discussed the majority were against any change in the Statute of Frauds; and since 1872—now 11 years ago—the subject had not been brought forward, and this was pretty good evidence that there was no desire for a change in the law. It appeared to him that if the law was to be altered, it should be amended on much broader lines than those upon which the Bill proceeded. They ought to make up their minds whether it would be to the interest of the public that verbal contracts such as were affected by the Bill should be enforced or not. If it was right that they should not, the law should remain as it was at present; but if the House was of opinion that these contracts should be enforced, the Statute of Frauds itself should be amended. His opinion was that this change of the law, if effected at all, should certainly not be brought about by the indirect and roundabout process proposed in the Bill. If it should be thought to be desirable that these contracts should be enforced 863 in our Courts of Law, he could not understand why the plaintiff should be confined to the one proof pointed out in this measure—he meant the admission of the person against whom the contract was sought to be enforced. It seemed to him that these contracts should be equally capable of being enforced without the admission of the defendant; as he could conceive cases in which the plaintiff would be in a position to bring satisfactory evidence of the verbal contract having taken place without the admission of the defendant. Conversations might be taken down by persons present when verbal contracts were made, or the terms of a contract might be reduced into writing, and all that might be wanting might be the actual signature of the defendant, and in such a case there would be no doubt whatever as to the real terms of the contract; and yet in these cases no remedy was proposed. Another objection he took to the Bill was that the remedy it proposed would be very partial. In many cases, it would be no remedy whatever to persons seeking to enforce verbal contracts. Large numbers of gentlemen in business in the City of London were represented by agents, and a man who was so represented could not be made a party to an action under the Bill. Therefore, no remedy would be provided for the evils in cases of that description. He also considered that the Bill would tend largely to an increase of perjury. They would be putting an enormous temptation in the way of a defendant against whom a verbal contract was sought to be enforced, to give a simple denial, because that would have the effect of enabling him to escape altogether from the conditions of a verbal contract. In regard to contracts for the purchase and sale of real estate, this Bill would produce bad results. Hon. Members acquainted with the facts relating to the sale and purchase of real estate would know that no cautious person would enter into a written contract without taking legal advice; because, if he entered into an open contract, he would very often render himself liable to grievous mischief, either in the way of abatement of purchase money, if any error had been made, or of being called on at great cost to produce documents of title which might not be 864 in his possession, or a longer title than he might be able to produce. A written contract for a sale was necessarily preceded by a verbal bargain, and a man might run great risks if, by an Act of Parliament, they made this antecedent verbal contract legally binding. That was what the Bill would do. He thought the measure would be a trap for incautious vendors, who would find very frequently that, by virtue of its provisions, they had been parties to that which would produce disastrous results. He held in his hand a Report on the Bill which had received the unanimous approval of the Council of the Incorporated Law Society. He would not trouble the House by reading the whole of the Report; but, in effect, it pointed out that, in regard to those contracts, the Bill was most objectionable. In conclusion, he moved that the Bill be read a third time that day three months.
Amendment proposed, to leave out the word "now," and at the end of the Question to add the words "upon this day three months."—(Mr. Lewis Fry.)
Question proposed, "That the word 'now' stand part of the Question."
§ MR. R. T. REID
said, that certain contracts were required to be in writing, otherwise they could not be enforced against either of the persons party to them. In cases where verbal contracts were entered into dishonestly — and roguery was very often displayed by parties who, though admitting the contract, refused to carry it out, because it was not in writing—the object of the Bill was that in such cases as these, where the defendant put up such a defence, the plaintiff might ask him on his oath—"Is it true or not true that you entered into a contract with me?" If he said it was not true, then the plaintiff was defeated, there being no written contract to substantiate the plaintiff's claim; but if the defendant admitted that he had made a verbal contract, he would be liable to the extent of his admission to fulfil that contract. Of course, if a man chose to be a rogue, although he had entered into a contract, he might deny the fact. He did not think many hon. and learned Gentlemen differed from him upon this subject; and the proof of that was to be found in the fact that his Bill had reached its present stage without opposition. What were 865 the arguments of his hon. and learned Friend (Mr. Lewis Fry) against this Bill? He complained that it did not go far enough. But with regard to that complaint, he would undertake to support any proposal his hon. and learned Friend might suggest in order to make it go further. All that the Bill would do would be to prevent persons from dishonestly availing themselves of a technicality in order to evade the performance of what was morally a binding contract.
§ MR. GREGORY
said, he thought the Bill was open to very grave objection. It seemed to him to revive the worst part of the old system of the Court of Chancery in his recollection — namely, the system of interrogatories, which had been called torturing the consciences of defendants. The system was one of setting up equitable contracts, by endeavouring to extract from the defendant admissions in the course of examination. He deprecated any attempt of that kind for the purpose of arriving at information. Under the law, as it at present existed, some written evidence was required of a contract—it might not be a formal agreement, but something to show an agreement. He thought it was but right and just that there should be some evidence of a contract having been entered into between man and man. What was proposed in this Bill? It was this. They might meet a man in the street and ask him if he would sell his corn, or his produce, or whatever he dealt in; and if the man gave them even a negative reply they could administer to him an interrogatory, putting to him—"What did you say?" "Did you not say—?" "How did you say—?" "Did you admit such-and-such a thing?" "Did you not admit such-and-such a thing?" or "Do you deny such-and-such a thing?" They might put these questions to a man in such a way that it would be a very difficult thing for him to get out of the interrogatory to which he was subjected without risk of perjury. It would become a matter of ingenuity on the part of learned gentlemen either to constitute a contract by means of interrogatories, or to get out of a contract entered into by means of interrogatories — learned gentlemen might set themselves to work to prove or disprove facts by means of the power contained in this Bill. He had seen 866 that kind of thing done very frequently in his Chancery practice, and he himself earnestly deprecated anything which would tend to revive that system. He believed that to be the result of the present Bill, and on those grounds he strenuously opposed its adoption.
§ MR. WILLIS
said, he opposed the third reading of the Bill on two grounds —first, because he was satisfied it would bring no relief to those persons whose contracts the hon. and learned Member desired to enforce; and, secondly, because he thought it would bring about that result which it was the object of the Statute of Frauds to prevent—namely, an increase of perjury. His hon. and learned Friend (Mr. Reid) said that if a contract was admitted, why should it not be enforced? He agreed with that; but his lion. and learned Friend knew perfectly well that if he interrogated a dishonest man be would deny that there had been any binding arrangement, and would say that the contract had been merely a matter of negotiation, and that it was never intended that it should be binding until reduced into writing. He did not believe that in one case out of ten they would ever get an admission to suit the plaintiff who brought the action. The Statute of Frauds was passed for the purpose of preventing perjury being committed in cases of this kind. Cases of the evil effects of administering these interrogatories might be multiplied indefinitely. In Common Law cases, for instance, he had rarely been engaged in a case in which a verdict was given for the plaintiff where he did not find that interrogatories had been administered, and answered in the negative that which the jury answered in the affirmative. In many cases they found contracts in writing with the exception of the name, and the Statute worked an injustice. In his opinion, it would be better to repeal the 4th and 17th sections of the Act. He felt strongly, however, that if this Bill passed it would only bring about increased disorder and largely increase the crime of perjury, which, as things at present existed, was by no means decreasing at the present moment.
§ MR. GRANTHAM
said, he was sorry to be obliged to disagree with his hon. and learned Friends. He was certain that the Bill would not bring relief. It would be the simplest thing in the world 867 to get out of it, because, as an hon. and learned Member had said, it would only apply to cases where people did not want to get out of contracts. If a man did not wish it to apply he would say—"I did not enter into a contract." He might admit that there had been some negotiation, and might even say that the terms of a contract had been put down in writing, but that he had not actually made a contract. He (Mr. Grantham) hoped the House would not accept the Bill. It was a matter for consideration whether a change should be made in the Statute of Frauds; but he could not recommend this Bill, which, he thought, would increase perjury tenfold. In nearly every case where the Statute of Frauds was set up, to his mind there would be direct perjury under this Bill.
§ THE SOLICITOR GENERAL (Sir FARRER HERSCHELL)
owned he could not altogether share the views expressed by several hon. and learned Members in regard to the terrible results which would follow the passing of a Bill of this kind. Many of the fears to which hon. and learned Gentlemen had given expression were the kind of fears which were always heard from some lawyers whenever a change in the law was passed. When they had spoken about some change in the method of examining witnesses, it was said—"You should not do that—it will tend to develop perjury." The matter seemed to him an extremely simply one, and he could not agree with his hon. and learned Friend who had just spoken that the man who would set up a defence on the Statute of Frauds would be prepared to commit perjury. As a rule, if a man were asked whether or not he had entered into a verbal contract, if he had done so he would not deny it. He (the Solicitor General) did not think the Bill would produce any great results; but the question was this—what was the object of the Statute of Frauds? It was this—that a man who made certain bargains should not be bound by them unless they were in writing, signed by himself and the other contracting party. This was passed because of the fallibility of memory, and differences of opinion as to what were the terms agreed upon, and many other difficulties of that kind, rendering it uncertain whether a contract had been entered into or not. But where was the hardship in binding 868 a man to a contract he admitted, whether it was in writing or not? That was all this Bill sought to do—to ask a man who set up the Statute of Frauds as a defence—"Did you make a contract?" If he replied "No," there would be an end of the thing; but if he admitted that he had made a contract, that admission could be enforced against him. He (the Solicitor General) would leave the matter in the hands of the House; but he had thought it his duty to point out, as clearly as he could, the nature of the measure.
§ MR. MORGAN LLOYD
said, he did not agree with the hon. and learned Gentleman the Solicitor General with regard to the object of the Bill. To his mind it went further than simply putting it to the defendant whether or not he had entered into any contract; because he found that, according to Clause 2, a plaintiff could interrogate an officer of any Corporation, and his answer, whatever it might be, would be binding on the Corporation. An agreement might have been negotiated between a plaintiff and the Directors of a Company; and yet, if the Secretary of that Company, on being questioned, said that a contract had been made, that admission would be binding on the Directors. Was that an alteration in the law which the House should sanction? Any officer of a Company or Corporation, who might overhear part of a conversation between his Directors and the plaintiff, might say "yes" when an interrogatory was proposed, and so seriously and unfairly prejudice the interests of his employers. He (Mr. Morgan Lloyd), as he had stated, could not agree with what had been said as to the object of the Statute of Frauds. The Preamble of that measure stated that its object was to prevent perjury. If the present law was to be altered, it should be done in a way different to that laid down in the present Bill.
§ COLONEL NOLAN
said, he should like to ask one of the lawyers what was the law in Ireland on this matter—he did not pretend to know it himself. To the best of his belief, in Ireland, if a man came to buy a number of head of cattle, they did not let him have the cattle unless he paid the money for them. If this Bill were te pass, a rogue might come up to a dealer, buy some cattle, and refuse to pay for them until they 869 were delivered. He might say—"You have not fulfilled your contract until you have delivered the cattle." So far as he (Colonel Nolan) understood the Bill, it would bear that construction, and such a thing as that would very materially interfere with ordinary business arrangements. It would be very objectionable to change old customs in this way. If his doubts on this matter were removed, it would be satisfactory.
The House divided: — Ayes 43; Noes 47: Majority 4.—(Div. List, No. 239.)
Main Question, as amended, put, and agreed to.
Third Reading put off for three months.