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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 purests), 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 me 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 alike 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 cir. over-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 thé 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 Ses. tion 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 å 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 oblithe 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 subBut 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 Attorney Debtor 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 vest 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 10l. 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 al.
EXAMINATION. though I do not wish to add to the penal cha. 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
Result of the Examination.-Notes of the Week. didates for examination, but only 83 com- ting on Saturday the 23rd day of February pleted their testimonials of service and at- next, and will on the said 23rd day of February tended on the day of examination - Tuesday, next proceed in giving judgment in all causes
and matters then standing for judgment. the 22nd January
The Examiners were,-Master Turner, of the Court of Queen's Bench, Mr. Austen, Mr.
SATURDAY HALF-HOLIDAY. Coverdale, Mr. Lake, and Mr. Tooke.
We understand that, at the instance of the Of the above number 70 were passed and promoters of the Meeting of Bankers and Mer13 postponed
chants at Guildhall, the Council of the Incor. porated Law Society have asked the Judges to
receive a deputation on the subject of the proNOTES OF THE WEEK. posed closing of legal business at 2 o'clock on
Saturdays; and that Lord Campbell appointed QUEEN'S BENCH SITTINGS. Friday, the 1st February. We are not able at Lord Campbell said the cases which had not present to state the result. yet been argued were not of such number or weight as to induce the Court to appoint sittings SOLICITORS' COSTS IN EQUITY. in banco after term, a course which they would We learn that the Commissioners who were not scruple to adopt if necessary, but not appointed to inquire into the claims of soliciotherwise, as considerable inconvenience at-tors for an increase of their costs in Chancery tended such sittings. His Lordship then gave Lord Chancellor, and that his Lordship is en
proceedings, have made their report to the notice that on Saturday, the 23rd day of Feb., gaged in considering the suggested alterations. the Court will hold a sitting at half past 10, to give judgment in cases which have been already argued and stand over for judgment.
UNQUALIFIED PRACTITIONERS IN THE
John Pitt Taylor, Esq., the Judge of the BUSINESS OF THE COURT OF QUEEN'S
Woolwich County Court, when taking his seat BENCH.
on the 26th January, remarked on the excesOn the 19th inst., Lord Campbell said that sive number of judgment summonses taken. in all cases in the Special Paper and Crown He said a class of persons who acted as agents Paper, if an application be made to the Court were very busy in hunting up the poor and upon a day previous to the day on which the taking out summonses without making incases ought to be argued, and sufficient ground quiry as to the means of the defendants. He for the postponement be laid before the Court, had made up his mind to put a stop to these they will be postponed accordingly; but other proceedings, and would commit no defendant wise the cases in those papers will be taken in to prison unless it was clearly proved that such their order. If one side only is present the defendant refused to pay, having the means to Court will hear that side ; and if neither side do so. The number of judgment summonses be present the case will be struck out. The taken out in that Court was six times in excess greatest inconvenience has arisen from appli- of the Lambeth Court, although the latter cations being made for the postponement of district contained double the population of cases during the day on which they ought to be Woolwich. These agents took out summonses argued. That is inconvenient to the Court as for the sake of their commission, but it was well as to the counsel who are to argue them. never intended that County Courts should be The Court will be most happy to accommodate made the instrument of oppression. gentlemen of the Bar, and if on a prior day an application be made for the postponement of any case the Court will be ready to listen to it;
LAW APPOINTMENTS. but, unless such application be made, the Court will in future uniformly and rigidly take confer the honour of Knighthood upon Mr.
The Queen has been graciously pleased to the cases in their order,-From The Times.
Baron Bramwell, one of the Barons of the
Court of Exchequer.
Mr. William Carpenter Rowe, Q.C., Chief This Court will, on Tuesday the 5th, Wed
Justice of Ceylon has had the honour of nesday the 6th, Thursday the 7th, Priday the knighthood conferred upon him. 8th, Saturday the 9th, Monday the 11th, Tues
Mr. Peter Benson Maxwell, Recorder of day the 12th, and Wednesday the 13th days of Prince of Wales' Island, has had the honour of February next hold Sittings, and will at such knighthood conferred upon him. Sittings proceed in disposing of the business Mr. Richard Bolton M'Causland, Recorder then pending in the Paper of New Trials and of Singapore, has had the honour of knighthood in the Special Paper, and will also hold a Sit- conferred upon him.
Superior Courts : Lord Justices.-V. C. Stuart.- Queen's Bench.
269 Mr. Matthew R. Sausse, Paisne Judge at Mr. William Dournan, Solicitor, has been Bombay, has had the honour of knighthood appointed Clerk of the Peace for Sudbury, in conferred upon him.
the room of Mr. William Dournan deceased.
RECENT DECISIONS IN THE SUPERIOR COURTS.
REMOVED WITHOUT MOTHER.
a manager and shareholder, and the repreLee v. Goren. Jan. 19, 25, 1856. sentatives of deceased co-managers and sharePRIORITY OF UNREGISTERED DECREE TO
holders of an association for trading purposes SUBSEQUENT VESTING ORDER OF INSOL
in India, against the defendant, who was a VENTS ESTATE.
shareholder, and the representatives of deThe defendant in a suit, in which a decree of a Mr.
Hudson, who died in India
ceased shareholders, except the representatives was made, was declared an insolvent, and a resting order on his assignees was made appointed the defendant his executor, who, subsequent thereto, but before it was regis-, he had proved the will in India, and prayed
however, refused to administer here, although tered Held, reversing the decision of for an account of the partnership assets and Vice-Chancellor Stuart, that under such for a contribution by the shareholders to disorder although not registered under the charge the liabilities. This motion was now 2 Vict. c. 110, the assignees were entitled made under the 15 & 16 Vict. c. 86, s. 44, for to priority over the plaintiff's in the suit.
an order on the defendant to represent Mr. This was an appeal from the decision of Hudson in the suit. Vice-Chancellor Stuart. It appeared that the C. M. Roupell in support; Rogers, contrà. plaintiffs had obtained a decree against a Mr. The Vice-Chancellor said, the order must be Holmes, but that before its registration on granted as asked. August 10, 1853, under the 1 & 2 Vict. c. 110, he became an insolvent, and that a vesting
Queen's Bench. order was made of all his real and personal estates in assignees, but this order had not been
Regina v. Churchwar. Jan. 23, 1856. registered. The Vice-Chancellor held that the ORDER OF REMOVAL.-WHERE CHILDREN plaintiffs were entitled in priority to the assignees, whereupon this appeal was presented. Three pauper children were residing with
Wigram and Toller for the respondents ; their mother, who was in extreme poverty Malins, Elmsley, G. Lake Russell and Hum- and unable to provide them with proper phreys for the appellants.
food and clothing, and was besides living
Cur, ad. vult. with another man by whom she had several The Lord Chancellor said, that before the children. The paupers' uncle relieved passing of the 1 & 2 Vict. c. 110 no right ex- them several times, and ultimately, with the isted making the decrees of this Court available mother's consent, obtained an order for against real estate, and until the registration, their admission to the workhouse. An which was necessary under the Act, was ef- order for their removal to their place of fected it obtained no additional power thereun- settlement without their mother was conder. The insolvent's estate, therefore, passed firmed, and held, that the 9 & 10 Vict. c. under the vesting order made before such registration, to the assignees, and the decision of 1 Which enacts, that “if in any suit or the Vice-Chancellor must be reversed. other proceeding before the Court it shall ap
pear to the Court that any deceased person Bice-Chancellor Stuart.
who was interested in the matters in question Sutherland v. De Virenne, Jan. 25, 1856.
has no legal personal representative, it shall be
lawful for the Court either to proceed in the EQUITY JURISDICTION IMPROVEMENT ACT.
absence of any person representing the estate — REPRESENTATIVE OF DECEASED PER- of such deceased person, or to appoint some
person to represent such estate for all the purIn a suit by a manager and shareholder, and poses of the suit or other proceeding, on such
the representatives of deceased co-managers | notice to such person or persons, if any, as the and shareholders of an association for Court shall think fit, either specially or genetrading purposes in India, against the rally by public advertisements; and the order defendant, who was a shareholder, and the so made by the said Court, and any orders representatives of deceased shareholders, consequent thereon, shall bind the estate of except the representative of a Mr. H., who such deceased person in the same manner in died in India, and had appointed the de- every respect as if there had been a duly con. fendant his executor, who refused, however, stituted legal personal representative of such to administer here : An order was made deceased person, and such legal personal reunder the 15 & 16 Vict. c. 86, 8. 44, presentative had been a party to the suit or for the defendant to represent Mr. H. proceeding, and had duly appeared and subtherein.
mitted his rights and interests to the protecIt appeared that this suit was instituted by tion of the Court.”
SOX IN SUIT BY DEFENDANT.