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Law of Costs.-Points in Equity Practice.-Defects in Law of Debtor and Creditor. 263
AMENDMENT OF BILL AFTER APPIDAVITS
ON MOTION FOR DECREE.
Notice of motion for a decree under 15 & 16 SANITY ON ISSUE DEVISA VIT VEL NON.
Vict. C. 86, s. 15, was served on the defend. The heiress-at-law, the defendant in a suit ants, and affidavits on behalf of the plaintiffs to establish a will, disputed it on the ground were filed in support. The defendants filed of insanity and on an issue devisavit vel non, affidavits in answer, and the plaintiffs filed two went into evidence to prove insanity and failed. affidavits in reply. One of the defendants On the question, whether she was entitled to subsequently died, whereby the suit became her costs of such trial, the Vice-Chancellor abated, and an order was obtained as of course Wood said :
to amend. The motion for decree was not set “I certainly had been under the impression, down for hearing. from the language of Lord Hardwicke in
The Vice-Chancellor Wood held, that the Berney v. Eyre, 3 Atk. 387, and the language order was regular. Gill v. Rayner, 1 Kay & which has been used on this subject in other J. 395. cases, that a definite rule had been fixed, that although on the one hand the heir is absolutely
DEFECTS IN THE entitled, as of course, to his costs where he
LAW OF DEBTOR AND CREDITOR. merely stands by on the trial of an issue, to see whether the will is proved, yet on the other
BY MR. M. D. LOWNDES, OF LIVERPOOL. hand, if the heir set up an opposition impeach- Read at the Meeting at Birmingham. ing the competency of the testator to make a
It is now upwards of 17 years since a vast. will, he is deprived of his costs if he fail. How- change was introduced in this country in the ever, I am quite satisfied from the case cited power possessed by a Creditor over his 'Debtor. from Dickens,' as well as the last decision
At the time that I speak of, or rather a little this subject of Vice-Chancellor Stuart," that it by bailable process, or arrest of the person,
earlier, say 25 or 30 years ago, the proceeding is still a matter which is in the discretion of was the rule; the proceeding by service of the Court, even if the heir set up such a de- writ merely was the exception. fence as I have mentioned. No doubt, the
At present, our law admits only of the option of the heir as to the course to be taken
seizure of the person after judgment recovered,
or under an order in the nature of a judgment, by him must be shown to have been duly ex- except where the Debtor manifests by, some ercised. If it was merely a vexatious oppo- overi act, his intention to abscond, and then sition on his part, the heir is made to pay the permits a Judge of one of the Superior Courts, costs.” Roberts v. Kerslake, 1 Kay & J. 751. or a Judge of the Bankruptcy Court, or
a Judge of the County Court, on special facts
laid before him by affidavit, showing the debt, NOTES ON RECENT STATUTES. and the evidence of the Debtor's intention to
abscond, to make an order for the Debtor to EQUITY JURISDICTION IMPROVEMENT ACT.
be arrested or held to bail. And the same Act which abolished arrest on mesne process, advanced the Creditor's remedy by permitting a
Judgment Creditor to attach 'valuable interests A DEFENDANT became insolvent before de- in Joint-Stock Companies, which could not be cree, and his property vested in his assignees. seized by the Sheriff at Common Law. And The Master of the Rolls held, that they could the Common Law Procedure Act of last Ses
sion permits the attachment of debts owing to not by means of a supplemental statement filed the Debtor. under the 15 & 16 Vict. c. 86, s. 53, obtain But if the inquiry be made, whether all has the statutory supplemental decree under s. 52. been done for the Creditor which in reason Heath v. Lewis, 18 Beav. 527.
and justice ought to be accorded to him, I
venture to think not. I have known a person But see Pickford v. Brown, 1 Kay & J. 643, absconding by one vessel
, and valuable goods where Vice-Chancellor Wood held, that before he was removing from the country shipped by decree a supplemental order might be obtained a subsequent one; the Creditor arriving too under s. 52 against an infant who had been late to arrest the Debtor, but in sufficient time born since the filing of the bill and was a ne- the Debtor's account, but unable to take any
to identify goods in the course of shipment on cessary party to the suit.
step to detain the goods. It might be sup
posed that the Court of Bankruptcy would, at · Blinkehorne v. Feast, 1 Dick. 153. all events, be assisting to the Creditor to seize · Waters v. Waters, V. C. S., June 18, 1854. the goods in such a case. Under any properly
SUPPLEMENTAL STATEMENT BEFORE
Defects in the Law of Debtor and Creditor. prepared code of Bankruptcy no doubt such as restment, but if the Law of Arrestment were remedy would be provided, by making each not interwoven with our Law of Procedure in District Court ancillary to the Court where the general, and become part of our system, I Trader Debtor resided or carried on business; should pause before I introduced it, because but the Bankruptcy Act of 1849, whilst it per- of the great commercial inconvenience occamits, by the 21st section, one Court to be sioned by the arrestment of balances in bankers auxiliary to another as to proofs or examina- and merchants' hands.” The making of such tions, only permits them on a request in writ- a law for England is deserving of great consi. ing from the Court to be assisted, and a Com- deration. It would be very useful in certain missioner has no jurisdiction to declare an cases, but it would be by no means an unmixed absconding Debtor a Bankrupt, unless he has good. In addition to which, one of our most resided or carried on business within his dis- learned Judges was appointed, about three trict; and in the instance I have referred to, years ago, a Commissioner to receive evidence, the trader had not resided or carried on busi- and report on the practicability and desirableness at all within the district of the Court where ness of assimilating the commercial law of the the goods might have been seized. But the three kingdoms, and he has been pursuing Creditor ought to have some redress in such a quietly and unostentatiously, but I believe case, as well against a Trader as against one most praiseworthily, this most comprehensive not in trade, because an absconding Debtor and useful inquiry, which will necessarily em. might not be a trader, and might leave goods brace the preference to be given to the Scotch or property behind him which ought to be or English systems of procedure. One conavailable for the payment of his debts. clusion seems to be irresistible, whether iden
It may be said that the Act for the Amend-tity of law can be accomplished for the three ment of the Law of 1852, has facilitated the kingdoms or not, that in each kingdom, and in remedy where the debtor goes to reside abroad, every part of each kingdom, the law should be by permitting the Creditor to issue process, uniform-there should not be one mode of and to serve his creditor abroad. This is, no procedure applicable to balances at Childs' in doubt, the intention of the Act, but it is so Fleet Street, which may not be put in use as fenced round with forms, I do not say impro- to balances at Twinings' or Coutts' in the per ones, and such is the difficulty of getting a Strand. If it is good, it should apply every. foreign agent to attend to the instructions where ; if not beneficial, it should cease altotransmitted to him, in addition to the difficulty gether. It cannot be right that there should of finding out the residence of a Debtor who be a different remedy for Creditors where the has gone abroad with the intention of avoiding goods of their Debtors are found in London, his Creditors, that the Act I have last referred Bristol, or Exeter, than if found in Manchester, to can be seldom made practically available. Liverpool, Birmingham, Hull, or Newcastle.
Besides, a Debtor residing abroad may owe The facilities with which judgments can now money in England, and his Creditor might find be obtained in ordinary cases of debt, give no goods or property in England which ought to cause for complaint of trouble and expense of be available for the payment of his debts, and intermediate proceedings, but this very facility, yet he might not be able to make him bank- as to judgments, leads necessarily to their rerupt, either from want of proof of trading or of gistration in greater numbers, and as these bean act of Bankruptcy, so that, without an al- come encumbrances affecting the title to real teration of the law, such goods or property property, it is an object worthy of consideration must remain unmolested.
wbether, without injury to the Judgment CreI would, therefore, suggest that where the ditor, purchasers could not be, by a summary goods or property of a Debtor, non-resident in and inexpensive method, relieved from the enEngland, can be found, some process, ana- tanglement of several mortgages and of many logous to the Foreign Attachment of the City judgments. I perceive that, by the Law of of London, to the Arrestment of Scotland, and America, the Sheriff of each State is authoto the Attachment of the United States, and rised to receive payment of a Judgment Debt some modification of which I believe common from any one indebted to the Judgment to most of the States on the continent of Debtor, and to give a good discharge for the Europe, should be issuable at the instance of sums so paid to him. "Our Sheriffs are only an English Creditor under safeguards to pre-county officers, not public officers for the vent abuse.
whole realm, and, therefore, they would be I have here only advocated the change of unsuitable recipients; but the Court of Chanthe law by permitting goods or property to be cery may be considered as the great treasurers seized by initiatory process where the Debtor for the whole kingdom as to funds in dispute. is non-resident in England; I am not yet pre- If, therefore, on the sale of property greatly pared to argue for its being the common mode encumbered by mortgages and judgments, the of procedure in the first instance. I once in- purchaser were permitted to take out a sum. quired of a friend, resident in Glasgow, much mons from the Master of the Rolls, or any of mixed up with the branch of law on which I the Vice-Chancellors, against the seller, to am addressing you, whether, if he had the show cause why the purchase-money should power of legislating for Scotland, he would re- not be paid into the Bank of England, to the peal or continue the Law of Arrestment; his credit of the Accountant-General in Chananswer was, “We are now accustomed to ar- cery; to the joint credit of the sellers and
Defects in the Law of Debtor and Creditor,
265 encumbrancers of such and such a property, ings ostensibly to make him bankrupt, but or other distinctive title; and if no suffi- often merely to extort from the Debtor, or his cient cause were shown, if the Court were relations or Creditors (for Creditors are someempowered to make the order on such sum- times needlessly alarmed at the supposed conmons, and it were enacted that the Account- sequences of bankruptcy to their own interant-General's certificate of payment of pur- ests), terms advantageous to themselves, quite chase-money should be a discharge from all regardless of the equitable arrangement which encumbrances as to such purchaser, it would ought to be made when a Debtor cannot pay afford one of the great facilities rendered by all in full. And I regret to say, that instances the encumbered Estates' Act in Ireland, with are by no means wanting among members of out any additional machinery, as the Court of our Profession of encouragement of hardChancery could, at a light expense, settle the hearted or avaricious Creditors, and who, being equities between the seller of the property and known to have unlimited influence over clients the various encumbrancers, a proper subject of being Creditors, have insisted on large sums inquiry between them, but with which the being paid to them, nominally as costs which purchaser has nothing to do.
they had incurred, or which they might have Having now addressed you on the defects derived from the prosecution of a bankruptcy, which occur to ine in the Law, as it exists be- but really as bribes for prevailing on their tween Debtor and Creditor as individuals, I clients to come into terms of arrangement. would bespeak your attention to that branch of This conduct is disgraceful to a liberal Profesthe Law governing the Debtor and his Credi- sion, and I trust that it will be denounced by tors as a body.
every member of this Society wherever atTo the gentlemen I am now addressing, it tempted. cannot be necessary for me to say, that good But it will not do to rely upon the feeling of policy and duty aljke dictate, that as soon as a honest indignation ; we must seek to lessen or Debtor finds himself unable to pay every Cre- modify this nuisance if we cannot remove it ditor twenty shillings in the pound, he should altogether. at once suspend his payments, and call his To which end we must direct our attention Creditors together, and tell them the true po- to the master grievance of the law of Debtor sition of his affairs, and ask them for their and Creditors as a body, which is, as it seems advice, as well for their benefit as his own, for to me, the Bankrupt Act of 1849. I do not at the commencement of insolvency, at all mean to say that many of the changes introevents, the interests of the Creditors and of the duced by it are not very useful ; on the conDebtor are identical. Nay, more, I venture to trary, I think the giving of original jurisdiction say, through the confidence which a somewhat to each District Court a very salutary improveextended experience in the vicissitudes of com- ment, but there has been no Act of Parliament mercial life warrants, that if a trader, who has since I entered the Profession, now more than not managed his financial affairs judiciously, 35 years ago, which has occasioned so much finds that he has either over-purchased or doubt or difficulty in its construction, and over-shipped himself, or in some other manner which, I believe, mainly arises from these cirover-traded, so as to be unable to meet his en- cumstances. In 1848 and 1849 a committee gagements without assistance, he would find of the great wholesale houses in England, a that assistance would be afforded more easily, numerous and wealthy body, and, perhaps, and on far less rigorous terms, than by having containing the largest number of sellers on recourse to the money-lender, or to those pests credit, sat in London, to obtain from the Goof society, Tradesmen's Loan Societies, or to vernment of the day such a bankruptcy code the more seductive, but, in the long run, al- as would remedy the grievances of which they, most necessarily ruinous game of dealing in as a body, had most to complain. This influ fictitious paper. These expedients for raising ential body won over the energy of Lord money at high rates of interest, and the opera- Brougham, and under his auspices, in the Sestion of compound interest, not according to sion of 1849, a long Bankruptcy Bill, broken the computation in our arithmetic books, at up into divisions and subdivisions, was preone and the same rate annually, but at gene- sented to the House of Commons. The clauses rally augmenting rates of interest, repeated in the Bill were, it is believed, from many three or four times in the year, make a vast hands, some not skilled in Parliamentary inroad upon the means of a Debtor if solvent, draftsmanship, nor even versed in the lanand sadly diminish the sum for division guage of the Acts of Parliament. However amongst his Creditors, if insolvent. So that this may be, the Bill being introduced, and so every Debtor in insolvent or doubtful circum- sanctioned and backed by the influence of the stances should be encouraged to make an early standing Committee to which I have referred, revelation of his affairs to his Creditors, and the Government of the day felt under an obli. the Creditors should meet their Debtor's ap- gation to do something; and when the Session proaches by sympathy and forbearance, and was far advanced, a select committee was apeven assistance, where practicable.
pointed to receive evidence on the whole sub. But to effect so great a good, a considerable ject of the Bankrupt Law. To them, of course, change will be necessary in the Law; the the Bill was referred, the then AttorneyDebtor must have time to consult with his General, now the Lord Chief Justice of the Creditors, without being visited with proceed-Common Pleas, being appointed its chairman.
Defects in the Law of Debtor and Creditor. A vast body of evidence was received, occupy- | by substantive clauses, or by omission from, ing till a very late period in that Session, or addition to, the Bill, as originally drawn, which would have required much time to ar- shall be referred. range and deal with properly, but the Govern- But, undeniably, under any scheme, the ment being determined that a Bankruptcy Bill rights of Creditors must be duly considered; should be passed, having been defeated on a and it is conceived that under the arrangement division on the question of its postponement, clauses under the control of the Court, and the the ill-digested and incoherent mass forming clauses as to arrangement by deed, it was by the Bankruptcy Consolidation Act, 1849, was no means considered what a large portion of the result, the difficulties and perplexities of the debts of Commerce are owing on Bills of which, instead of being alleviated by time, only Exchange, and which are constantly changing become more apparent each succeeding term. hands before they are at maturity, so that,
I trust that this meeting will not separate under both modes of arrangement, impossibiliwithout agreeing upon a memorial to the Lord ties are required from the arranging Debtor. Chancellor (whose kindness and consideration Thus, by the 213th section, under the arrangeto our branch of the Profession cannot be too ment clauses under the control of the Court, highly extolled, for it stands in bold relief to notice of the private sitting is to be given in other eminent men who have risen by our writing to every Creditor not less than 14 days means, but who, having attained the height before the same is held, such notice to be sent they sought, have most ungenerously, if not by post, addressed to every Creditor at his last ungratefully, kicked away the ladder)-I say known place of business or residence. Let that I trust a memorial will be presented to any gentleman ask himself how this is to be the Lord Chancellor, praying his Lordship to done as to any merchant in extensire trade, have the Bankruptcy Act of 1849 submitted to two-thirds of his debts probably being reprethe three gentlemen (whom his Lordship has sented by Bills of Exchange, and the other appointed to revise and consolidate the Statutes one-third being due to home and foreign on important branches of the law), as being houses ; very many of the bill. hoiders must one requiring revision more urgently than any necessarily be unknown for service, and the other, and with instructions to remodel and foreign Creditors could not be served except build anew a Statute of Bankruptcy, having after a great consumption of time. regard to the evidence taken under the late And where an extensive merchant wishes to Commission, as well as to that before the Com- obtain relief under the arrangement clauses by mittee in 1849, and where the draftsman shall deed, he is met by the 235th section, making not wilfully change or ignore what was useful the arrangement a nullity as to all Creditors and intelligible in the Act of 1826, and in who have not notice of the arrangement, and which new matters shall be expressed in plain exacting from the arranging Debtor, in a preand intelligible, and not in incoherent and con- liminary proceeding, a minuteness of informatradictory, terms, like many portions of the tion which he is not required to furnish under Act of 1849, and particularly the clauses as to Bankruptcy itself. arrangements by Deed.
The clauses as to arrangements under the It is on account of the operation of these control of the Court appeared to be borrowed clauses, the defenceless state in which the ar- from a inodern Scotch Act (6 & 7 Wm. 4, c. ranging Debtor and his Creditors are left, that 56), giving their Sheriffs' Courts jurisdiction important changes are here necessary. Debtors as to the process of cessio bonorum. This promust be induced to make known early their cess is of ancient use in the Scotch law, and, actual position to their Creditors, and the if not most aptly described, will be made most Debtor and his Creditors must have time to intelligible to an English lawyer if designated meet and concert measures for their mutual as a Statutory Letter of License to a Debtor, benefit, unmolested by the machinations of on his surrendering all his property for divilitigious and sordid persons, due care being sion amongst his Creditors. taken in the meantime that the property of the It is such a Statutory Letter of License that Debtor is adequately protected, and I'venture I think is the great desideratum in the English to think that by a modification of clauses al. law of Debtor and Creditor. But the present ready existing in the Bankrupt Act, this great arrangement clauses in the Bankrupt Act are boon to Debtor's and Creditors might be af- not capable of practical working in any estate forded.
connected with foreign commerce. The clauses in the Act, as to arrangement I would suggest, therefore, that a Debtor, by deed, originated with eminent Solicitors in in conjunction with one or more of his Credithe City, but these underwent alterations in tors, should be permitted to petition the Banktheir progress through the two Houses, as is ruptcy Court for an order for the issuing of a shown by Mr. Lavie's letter to the last Com- cessió bonorum, in which the Debtor should missioners on Bankruptcy, from which arose express his readiness to surrender or make their ambiguity and obscurity; nor shall we available bis estate and effects for the benefit ever be free from difficulties of this nature of his Creditors, in such manner as they should until Parliamentary draftsmen are employed determine at one or more meetings to be conand paid for by the State, to whom the prepa- vened; and the Creditor or Creditors joining ration of all public Bills shall be entrusted, in such petition should consent to be trustees and to whom, also, all amendments, whether of such estate until the wishes of the Creditors
Defects in the Law of Debtor and Creditor.-Result of the Examination. 267 should be ascertained; and that upon an Creditors in loans, at interest above a fixed rate, order being made for such cessio bonorum, the at all events so long as losses by gambling or Debtor's estate should yest in such Creditor as by stock.jobbing are so seriously visited by the provisional or interim assignee. And if a Bankrupt Act. Creditor should not join with the Debtor in The clauses in the Bankrupt Act, which are such petition, that on the order being made for found most useful in obtaining payment of the cessio bonorum one of the official assignees debts from reluctant traders, are those relating of the Bankruptcy Court should be appointed to Bankruptcy Notice and Summons, that is, provisional or interim assignee, and on the section 78 and following clauses. But these order being made, the Debtor's estate should sections contain many anomalies, which it is to vest in him accordingly. That a private meet- be hoped will be corrected on any revision of ing of the Creditors of such Debtor should be the Bankrupt Statute. held not earlier than one calendar month after For instance, the place of residence of the the order for the cessio bonorum, nor later than trader, not the place of carrying on business, two calendar months, and the time and place is the criterion as to the jurisdiction of the Disshould be advertised in the "London Gazette "trict Court of Bankruptcy, The words of the 21 days before the day of meeting, at which 78th section are, “ if the Creditor of the trader the Debtor should present the best account he shall file an affidavit in the Court in the district can of the state of his affairs, with a proposal in which such trader shall reside, &c.;" so that for the acceptance of his Creditors. And the if a Debtor carry on business in Birmingham, majority of two-thirds in number and value of but reside, that is, sleep, according to the conthe Creditors present at such meeting shall struction of residence, in the cases on the Poor determine as to the acceptance or rejection of Laws and Parliamentary Registration, within the arranging Debtor's proposal, or, if not sa- the jurisdiction of the Bristol Court, a Creditor tisfactory, should determine as to the mode of must resort to the Bristol Court to proceed winding up his estate, whether by acceptance against him by Trader Debtor Summons. of the estate and effects vested in such interim Then suppose a firm of three partners with trustee, in satisfaction of the debts, or by com- three houses, one in London, one in Manchespromise or other mode of arrangement, or by ter, and one in Liverpool, and a partner resident Bankruptcy; of course pending the meetings, in each, which of the three Courts would have the person of the Bankrupt should be protected jurisdiction against the other two, for their reas under the present clause for arrangement, sidence and usual or last known place of abode under the control of the Court.
or business are not within the other's jurisdicWith some brief observations on two other tion? It may be said, that for the relief of the parts of the Bankrupt Statute, I will close my Creditor those clauses should be liberally conpaper.
strued, so as to give any of the three Courts The total repeal of the Usury Laws has just jurisdiction. It may be so said; but on the been effected; their re-enactment is, therefore, other hand it is usual to consider those parts of at present an impossibility, even if it were de- the Bankrupt Statute creating acts of banksirable. It is, therefore, proper to consider the ruptcy as penal, and, therefore, to be strictly right of the Creditor to dictate any rate of in- construed. Supposing however, that each terest, however extravagant, as the settled law of Court has jurisdiction as to all the partners in the land. But any one who has noticed the pro- the case I have mentioned, what would be the ceedings in the Bankruptcy and Insolvent effect as to a partner resident in Scotland ? If Courts, since the Usury Laws have been pro- he were served there, could an English District gressively relaxed, must have observed the Court of Bankruptcy adjudge him bankrupt ? profligate rates of interest which Debtors have Surely reason and convenience dictate that the engaged to pay, and which, in many cases, District Court which contains the place of buhave actually paid for loans, some absolutely siness of any one of the three houses should reserved, in other cases conditionally, in case have jurisdiction over all the partners of the of default
, in payment of the principal at the firm, and that personal service of the summons appointed day
on any partner within the three kingdoms Prudent traders say, that 101. per cent. upon should be good service. It cannot be wrong, the capital turned over in the course of a year to make the place of business of a trader of is all that can properly be calculated upon, one more importance than his place of dwelling, year with another, after due allowance for ex- especially as the very name of “ bankrupt” is penses of trade and bad debts. If this be a derived from the desertion of the trader's place just calculation, the trader who exceeds that of business. rate of interest commits a positive injustice to those Creditors who trust him with goods or
RESULT OF HILARY TERM money at ordinary rates of interest; and although I do not wish to add to the penal cha.
EXAMINATION. racter of the Statute of Bankruptcy, yet I think that as the lender cannot now be visited SOME errors appear in the newspapers refor any extortion or oppression in his dealings with a necessitous borrower, the latter should garding the number of new admissions on the be subject to a deprivation or some suspension Roll of Attorneys. of certificate, if he wastes the substance of his There were in all 111 notices from the Can