Debate on the Despatch of Business, Court of Chancery Bill. 413 should be vested in the Lord Chancellor for Southampton Buildings were sold and the the time being for the purposes of the Act. With regard to the proposal of his noble and learned friend to refer the question of solicitors' fees to a Select Committee, he thought it was going out of their lordships' way, and would be doing an act which was not at all necessary. Lord St. Leonards said, that one thing was most obvious, that nothing would be more unwise than to disturb the late settlement on this question without grave consideration. What he called the late settlement was the Act passed in 1852, when the new arrangements were made with regard to the Court of Chancery, affecting not only the matters referred to in the Bill now before their lordships, but the whole business of the highest Court of judicature in the kingdom. He was not disposed to offer any opposition to the present measure, but there ought to be great forbearance exercised in coming to a decision upon any particular branch of the system until they saw how all its parts worked together. If their lordships allowed a pressure from without to have too much influence, they might by and by find it exceedingly inconvenient. Give the system a little time to work, and whatever evils might be found in it, set about and correct them. As regarded the appointment of an additional junior clerk to each chief clerk, it was impossible to resist that demand. He agreed with his noble and learned friend, as to the appointinent of an additional chief clerk, that if not absolutely necessary he should regret its being done. If the Judges did not require it, he was sure the chief clerks did not require it. If there were more chief clerks, it appeared to him that the great security of the whole plan of 1852 would be violated. That plan was based upon this:-that the clerks should be kept in their proper position, that they should be men of ability and of judicial power, but that they should not be viewed in the same light as the Masters were, but should depend upon and be under the sole direction of the Judge. The duties of the chief clerks, from what he had himself seen, had been well discharged, and he believed the offices were filled by men who had proved themselves competent for the duties intrusted to them. With regard to the building of new Courts, he certainly would press upon his noble and learned friend the necessity of taking the subject into consideration without loss of time. He rejoiced that he had successfully resisted the transferring of the Judges Chambers to the Masters' offices. He felt that the locality was extremely prejudicial for carrying on the business of the Court of Chancery; but, although he did so, he never thought of hiring chambers except as a temporary arrangement. There was a spot in Lincoln's Inn on which two new Courts could be built, with convenient chambers for the Judges' clerks, and if the Masters' Offices in money applied to the new building, the expense would be very small indeed. He thought the Government ought to erect the building suggested, as it was almost essential to the working of the legislation of 1852. As his noble and learned friend retained the Master of the Reports and his salary, he did not object to that part of the bill. He considered the clerks in the Record Office had mistaken the course which they ought to have taken, and that, instead of petitioning against the Bill, they should have gone to his noble and learned friend and respectfully submitted to him any complaint on the subject of remuneration. Unless the new system were watched they would have abuses springing up. It was not sufficient to carry measures of reform. It was the duty of his noble and learned friend on the woolsack, of his noble and learned friend near him (Lord Lyndhurst), and of himself-who understood the subjectto give their anxious attention, for the benefit of the suitor, to see that the system worked as was intended. It was said that the attorneys did a great deal of work and had very little remuneration for it, but they must take the business altogether, and consider whether the whole did not produce sufficient remuneration. His noble and learned friend said the attorneys had the temptation to make conveyances of unnecessary length for the sake of costs, but he did not believe-though in every profession there would be some persons who would act dishonourably and discreditably-that any respectable professional man would indulge in great length for the mere purpose of making charges. If they altered the fees, that would give an additional motive for delay. They could not prevent delay except by such arrangements as those of 1852. His argument with the attorneys was that, although the scale of fees was not so large as formerly, the facility with which cases would be decided and their bills paid would be more advantageous than those long-winded suits in which the interest of their money absorbed a great proportion of their profits. He could have no other motive in settling the fees of 1852 than that of giving fair remuneration to the attorneys, standing as he did between them and the suitors. If it could be shown that they were entitled to higher remuneration he was perfectly ready to join with his noble and learned friend in giving it; but still he must say they ought to take the rough with the smooth-it would not do to take all the plums and leave the rest of the pudding. The attorneys desired to have any expense saved by their exertions considered in the amount of remuneration. If that could be done he should not object, but there must be something by which to measure the value of services, and, therefore, the proposition on the part of the solicitors did not seem to him to be practicable, He would not oppose the committee, but he was bound to declare that he should not go to 414 Debate on Court of Chancery Bill.-Amended Bill for Despatch of Chancery Business. that committee with any hope of ever coming | trars') under the superintendence, direction, at a satisfactory conclusion. and control of the registrars, subject nevertheThere were in the scheme of 1852 several less under the superintendence, direction, and things requiring attention, and one was the operation of the regulation relative to the examination of witnesses. Care should be taken to see that the expenses were kept within narrow bounds, and that no special examination was taken without very sufficient grounds. There ought also to be some check upon the number of counsel who attended before the examiner. Lord Lyndhurst said, it is now nine or ten years since he had washed his hands of the Court of Chancery, and he had never wished to entangle himself again in its folds. He had to-night presented a petition from the Incorporated Law Society, who were more minutely acquainted than any other body of men with the proceedings of the Court of Chancery. He had no doubt their statements were correct, and he had founded his observations upon the statements of that petition. The Lord Chancellor had referred to the pe tition of the clerks in the Record Office, who had not adopted a perfectly correct course in presenting a petition to their Lordships' House without previously communicating with the head of that Court. The circumstance, however, should never be an obstacle in their way as far as he was concerned, but he must protest against such a course as irregular. Lord Lyndhurst said, that the bill did not put the clerks of the Record Office on the same footing as the other offices, as was recommended by the Select Committee of the House of Commons of 1848. The House then went into Committee pro formá on the bill. control of the Registrars, as to all and every part of the business now transacted in the Report Office to such rules and regulations as the Lord Chancellor, with the advice and assistance of the Master of the Rolls, may from time to time think fit by order to make concerning the same." The 8th clause is thus altered : Nothing in this Act contained shall be taken to repeal or alter, as far as regards James Thomas Fry, the present Master of Reports and Entries, any of the provisions contained in the sections numbered respectively 34, 35, and 36 of the said Act" for the Relief of the Suitors of the High Court of Chancery," relating to the countersigning by the Master of Reports and Entries of notes or cheques drawn by the Accountant-General of the Court of Chancery upon the Bank of England, and the payment thereof by the same Bank, and directing that the Master of Reports and Entries should also perform all such other duties (as well as the duties in the same Act mentioned) as the Lord Chancellor should from time to time by any order direct, and the same provisions shall respectively continue in full force as far as regards the said James Thomas Fry, and tinue the said James Thomas Fry as an officer the Lord Chancellor is hereby required to conof the Court of Chancery for the performance of the duties hereinbefore mentioned, or such other duties as aforesaid, after and notwithstanding that the abolition of the said office may have taken effect under this Act. The 10th clause has also been modified thus: "In case, upon the abolition of the office of the Master of Reports and Entries taking effect, any of the persons now respectively AMENDED BILL FOR DESPATCH OF holding the offices of Clerks of Records and CHANCERY BUSINESS. THE 5th clause has been altered by the following additions, which are marked in italics : Writs shall be required under this Act to discharge the duties of the office of the Master of Reports and Entries, or any of them, and the Lord Chancellor, with the advice and assistance of the Master of the Rolls, shall deem the duties then devolving upon the said persons to be too extensive in proportion to their present salaries, they resectively may receive, in addition to their respective salaries as Clerks of Records and Writs, such salaries, not exceeding the sum of "From and after the time when such abolition shall take effect, the business of the Report Office (except such part thereof as is transacted by the entering clerks) shall be conducted pounds per annum each, as the and carried on under the superintendence, di- Lord Chancellor, with the advice and assistrection, and control of the Clerks of Records ance of the Master of the Rolls, shall by order and Writs, who shall thenceforth discharge all direct; but such additional salaries shall cease such duties relative to the Report Office as in the event of the vacancy now existing being may then belong to the Office of the Master of filled up by the appointment of a fourth Clerk Reports and Entries, as far as the same may of Records and Writs, or in the event of the said be from time to time necessary or proper to be persons now respectively holding the offices of discharged; and such part of the business of Clerks of Records and Writs being relieved the Report Office as is transacted by the enter-from the duties of the office of Master of Reports ing clerks shall be conducted and carried on by and Entries." such entering clerks (who shall be thenceforth Further Proposed Reforms in Bankruptcy Law. 415 FURTHER PROPOSED REFORMS IN certificate from the creditors to the Commissioner: BANKRUPTCY LAW. THIS branch of our jurisprudence seems doomed to unceasing change, as well in the rules of Law as in the constitution and practice of the Courts. During the last 30 years no less than 26 Acts of Parliament have been passed. An able letter has just been published by Mr. Whitmore, the Official Assignee, which, we must admit, points out several important defects in the last Bankruptcy Consolidation Act of 1849. Mr. Whitmore observes on the Report of the Commissioners, that it does not touch the root of the evil, consisting in the palpable fact, that the Bankruptcy Court is held in low estimation by the public, and that no one resorts to it who has an alternative. Mr. Whitmore thus accounts for this result:: "The large merchants avoid it; for they, by the aid of the arrangement by deed clauses, can effect their settlements more to their own satisfaction out of Court. The large warehousemen avoid it; for they, having succeeded in extending the penal clauses, and in introducing the classification of certificates, resort to the Court only as a penal one. Honest debtors avoid it; for they are at once classed with the dishonest. Creditors avoid it; for they dislike its forms and its publicity; and all avoid it, really or ostensibly, on account of the expense. I do not stop to prove this; it is written on every page of the evidence, and admitted, in other terms, in the report itself." The Author of the Pamphlet then contends that the Legislature has committed a capital error in attempting to combine objects in their nature incongruous. He says, 1st, "The Legislature invites an honest debtor to petition the Court of Bankruptcy, and then gives him, what has now, more than ever, become a bad name. It invites him to petition, and then at once, and without inquiry, classifies him with, and treats him as, the dishonest. It invites him to petition, and, when he has voluntarily given up all, sends a messenger into possession, and a broker to take an inventory, of all his effects, to prevent him from abstracting a part. It invites him to petition as an honest man, and then, honest as he may be, subjects him to be judged under the penal clauses, in connection with the certificate. Moreover, the Legislature requires the Court, as an administrative Court, to be self-supporting, and then defeats the object by making the Court Penal." 2nd. Mr. Whitmore objects to the transfer of the power of granting the bankrupt's "It is a sound principle in commercial economy, that all parties, competent to manage their own affairs, should manage them in their own way, without the intervention of the Legislature. A debtor engages to pay his creditor twenty shillings on a given day. The debtor, from one of the many causes-misforconduct-which lead to insolvency, fails, and tune, imprudence, error of judgment, or misthe creditor agrees to forgive him his debtwhether from expediency, or from kindly feeling, it matters not-and to accept ten shillings instead of the twenty. Why not? and what is fitting in regard to one creditor is fitting in regard to any number of creditors. from the creditors the power of granting to "When, therefore, the Legislature took their debtors their certificates-in other words, of forgiving them their debts-and transferred it to a Court of Judicature, it lost sight of a principle, the soundness of which it has recognised in the arrangement by deed clauses; and if it recognises its soundness in those clauses, why not also recognise its soundness, at least in administrative matters, in the Court of Bankruptcy?" The requirements of an Administrative, as distinguished from a Penal Court, are next adverted to: "Her Majesty's Commissioners, in their report, say, 'In its main features, a Court of Bankruptcy is a Court of Administration;' and, again the characteristic of a Court of doubt is true. But it is not less true, that the Bankruptcy is administration;' and this no transferring the power over the certificate, from the creditors to the Court, the penal clauses as they affect the certificate, and, still more perhaps, the attempt at a classification of certificates, have gone far to convert, and in conjunction with the increased facilities for arrangements out of Court, are daily more and more converting this, in its main features, Court of Administration' into a Criminal Court. 66 Ought this state of things to exist? I think not; and I seek to disentangle this Court of Administration from the fatal meshes of the Penal Law, in which it has become gradually involved, and to reduce administration to its original and more simple elements. "It will hardly be contended that this country does not require a Court purely administrative. The necessity for it is proved by reference to a return made by Mr. Perry showing the estimated number of compositions and assignments during the ten years from 1843 to 1853, exclusive of deeds of inspectorships, to amount to 88,717. We know how much there was of wrong doing even under the control of the bankruptcy system, previous to the establishment of the Court in its present form in 1832; and is it to be believed that in the 88,717 compositions and assignments above 410 Further Proposed Reforms in Bankruptcy Law. referred to, and in the arrangements by deed out of Court, there has been no wrong doing? The reverse is notorious. "The necessity is further proved by another test; namely, by the clauses No. 224-229, in the present Act authorising arrangements by deed, granting powers to majorities to bind minorities out of Court; powers of which an extension is now recommended by her Majesty's Commissioners, but which appear, even in their minds, to require some justification. Not that arrangements by deed are otherwise than desirable, where all parties concur; but the Legislature, when sanctioning the principle of majorities controlling minorities, is bound, at least, to give to the minorities full protection, and such full protection can more readily and effectually be extended through the immediate administration of the Court than by making it ' ancilliary.' doubtedly be, by the public: that the Administrative Court be a private Court; or rather, have the same publicity as, and no more than, attaches to arrangements by deed out of Court, the publicity that is sufficient for the one being sufficient for the other: that the Penal Court continue to be a public one: that the Administrative Court dispense with all unnecessary forms in regard to proofs of debts by creditors, and also with unnecessary forms of accounting by debtors; so as to bring the Administrative Court more in harmony with the wishes and wants of the public: that the proceedings in the Penal Court be also simplified, where practicable: that, in the Administrative Court, the certificate rest with the creditors, as virtually it does under arrangements by deed and compositions out of Court, subject to a right of appeal by the debtor from the creditors to the Commissioner sitting in the public "It can be no valid argument for extending Court: that, in the Penal Court, the certificate, the application of the above principle to, and, if it must be so, rest with the Commissioner; as it is recommended, beyond, those clauses, though, even in this Court, if the large majothat the Court, in its present state, is imper-rity of creditors consent to release their debtor, fect. The obvious answer is, perfect the Court. "Nor is the necessity for a Court purely administrative, met by the clauses in the present Act which relate to arrangements under the control of the Court, for practically, they are useless to any good purpose. "It can hardly either be contended that ready means should not be afforded by the Legislature for the punishment of dishonest debtors; but whether the present are the right and most efficient means, or whether, as ' of her Majesty's Commissioners' think defined legal offences should be punished, only after trial by jury before the regularly constituted Courts of penal judicature,' the Legisla ture will determine. some I doubt the wisdom of judicial interference, except in cases of fraud: that in the Administrative, as in the Penal Court, the Commissioners have the same full powers as at present, and that they make their own separate arrange ments for sitting in either Court, according to the amount of business to be transacted: that in the Administrative, as in the Penal Court, immediate protection be given, when necessary, to the property of the debtor." The next question urged on the reader is the distinction to be drawn between the debtor entitled to the milder dealing of the Administrative Court and the debtor to be subjected to the penal Court; and the writer remarks that "How then are the objects I have pointed out as incongruous-how a sound principle in "It is more consonant with the principles of regard to the granting of the certificate-how justice, to consider every man honest until he the distinct requirements of an Administrative, be proved to be otherwise, rather than at once and of a Penal Court-to be respectively at- to classify him with the dishonest, only betained? The means, it appears to me, are very cause he has failed in his engagements. It simple. The present Court of Bankruptcy had been more in accordance with justice that would be sufficient for all purposes, if separated into two departments; the one purely Administrative, the other, if it must be so, Penal: the one to be called the Administrative, the other the Penal, or Bankrupt,' Court." the 630 bankrupts, referred to as having obtained first class certificates, had been per mitted to pass through an Administrative, rather than through a Penal, Court. And it is curious to observe that, while our more recent legislation, and the spirit of the age, have inclined to the side of mercy, the bankrupt law should have become more penal. I take then administration to be the rule, subjection to the penal law the exception; and I assume the following to be tests of honesty in a debtor, entitling him, prima facie, to the benefits of the Administrative Court. The voluntary sur render of everything he possesses; the submission, in all things, to the wishes of his creditors, whether he be a petitioning debtor to the Court, or be petitioned against by a credi tor. And I doubt whether any one single creditor should have the power to transfer such a debtor to the Penal Court; for, if the argu Reforms in Bankruptcy Law.-Law of Attorneys and Solicitors. ment, approved by her Majesty's Commissioners in their report, in favour of the power of six-sevenths of the creditors to bind the remaining one-seventh, be sound, it would seem to follow that, not the will of one creditor only, but the concurrence of one-seventh of the creditors at large, should be necessary to transfer the debtor's estate from the Administrative to the Penal Court. Such debtors as have absconded, or may be proved, to the satisfaction of the Commissioner, to be about to abscond; to have vexatiously avoided, or harassed, their creditors; to have made away, or to be about to make away, with their property, or to have otherwise infringed the bankrupt laws, deserve, perhaps, to have their affairs administered in the Penal or Bankrupt Court." These suggestions are, we think, entitled to serious attention. LAW OF ATTORNEYS AND 417 made by credit being given to her by him in "But the petitioner, whose story differs very much, though not altogether, from that of the respondent, says, in effect, that it was agreed between the three that the respondent should be at liberty to apply the whole or any part of the 500l. in meeting and defraying, or towards meeting and defraying, the costs and expenses of procuring or endeavouring to procure and suing for a parliamentary divorce or parliamentary dissolution of a marriage that had taken place between Mrs. Wortham's only daughter, Mrs. Newenham, and a very objectionable person much older than that young lady (the marriage having been contracted under circumstances highly reprehensible, at least on the part of the husband); of which divorce or dissolution the two ladies and the petitioner were, with the sanction and encouragement of the respondent, desirous. But it In the year 1846, a Solicitor being then was (the petitioner says) also agreed that Mrs. concerned professionally for the petitioner, sible to the petitioner for the 500l., with Wortham should become personally responreceived on his account from a gentleman interest. He says that she became so, and named Withall, a sum of 5507. belonging that, accordingly, the 500l. remained in the to the petitioner, and paid him of that sum respondent's hands, applicable by him for 50%., but the remaining 5007. continued in those costs and expenses, but, so subject, on his hands, and this petition was presented to obtain payment of the balance. SUMMARY JURISDICTION ON PETITION The Vice-Chancellor Knight Bruce said: "The remaining sum of 5001. has continued in the respondent's hands ever since, and, as he claims no set-off against the petitioner, is, of course, prima facie and presumptively now due from the respondent to the petitioner, who presumptively and prima facie also is entitled to recover it from him by a summary proceeding of the present kind, the character and manner in which it was received by him for the petitioner being considered. It has been upon the respondent therefore to show why an order should not be made against him accordingly. As to this, however, with respect to 2001., part of the 500., there has been no difficulty, the petitioner having, on a ground that I shall presently notice, confined his claim to the residue of the money, namely, to the 300l. first-mentioned; as to which, therefore, alone I have to decide. He the petitioner's account and for his use. moreover says, that the proceedings for the divorce or dissolution, though commenced, became at an early state ineffectual and failed; that the whole of the costs and expenses thus incurred did not exceed 2001. ; that he is willing to have them taken as amounting to 2001.; and that, in the events which have happened, the remaining 3007. must be treated simply as money of the petitioner in the respondent's hands. "This is the question, or these the questions, so far as matter of fact is concerned, of which I have to dispose. There is, I need scarcely say, a collection of conflicting affidavits, including some by the petitioner and the respondent, which the counsel on each side have treated as part of the evidence. They, in fact, dealt with the petitioner as a competent witness for himself, and with the respondent as a competent witness for himself; and it is indecd clear, that, if either was not a receivable witness for himself, the other was not so for "The respondent's defence is this: he himself. But, as I view the materials before says, that in 1846, one of his clients, Mrs. me, it is of little or no importance whether Wortham, the widow of the petitioner's uncle, each or neither of them is treated as a compebeing then in want of money, it was agreed tent witness for himself. I may in the next between her and the petitioner that he should place make the remark (however obvious) that lend her 500l. at interest, and it was also when an affidavit, whether that of a party used agreed between them, that, as she was then for or against him, or that of a mere witness, indebted, and likely to become additionally in- is read in evidence, it is competent to the debted to the respondent, the loan should be Court, according to a judicial view of what is |