AMENDMENTS TO THE BANKRUPTCY ACT.
THE consideration by the House of Commons of the amendments introduced by the House of Lords into the Bankruptcy and Insolvency Bill will probably furnish us with the last debate of any interest during the present Session. The late Attorney-General promised that he would consider these amendments solely with a view to the public good, and allowing for the natural bias which every man must feel against the mutilators of his own offspring, he will pro- bably induce his successor to fulfil the pledge. But we own, on investigating the three chief alterations which the Lords are desirous of effecting, that with regard to two out of the three we find it very difficult to say to which side the balance of pub- lic good inclines. The only three amendments which require any notice from a non-professional journal are the abolition of the office of Chief Judge, the excision of the clauses relating to creditors' assignees, and the new clause which modifies the retrospective operation of the Act. The arguments for and against the first of these amendments are of an unusually simple andpractical character. The one party contends that such a judge would have hardly anything to do, and that his salary and other expenses attending him would be a sheer waste of public money. The other side maintain that the accumulation of work under the new Act, arising more es- pecially from the removal of the distinction between the trader and the non-trader, will make the appointment in question absolutely essential to its efficacy. Here, then, we have no principle at stake. The question is only one of comparative probabilities. And only those persons whose avocations have made them acquainted with the state of the Bankruptcy and Insolvent Courts at the present day can hazard anything like a reasonable conjecture on the subject. We presume that neither Lord Westbury, on the one hand, nor the Select Committee of the House of Lords upon the other, arrived at their respective conclusions without due examination of evidence and consultation of practical authorities. For our own parts, therefore, we must decline offering any opinion on the point, merely observing that, ceteris paribus of course, that proposal is the better one by which the public money is saved. The second point at issue Lis, however, a far more im- portant one. It involves no less a question than what is the primary and essential function of a Court of Bankruptcy. Is it, that is, to assist creditors or to promote the ends of justice ? Persons who are likely to become creditors of course maintain the former. Lawyers, and those who habitually consider such questions from an imperial and a priori point of view, maintain the latter. The clause intro- duced by the late Attorney-General, enabling a majority of creditors to appoint assignees of their own who shall take the management of the bankrupt's affairs out of the hands of the official assignees is founded, of course, upon the mercantile point of view. The rejection of that clause by the House of Lords is founded on the imperial point of view. It is urged by one side that a body of persons who have a direct interest in making the most they can of the bankrupt's assets, are the proper people to be entrusted with the control of them. Now, this is just one of those practical arguments to which the English mind is peculiarly sensible. And we are very far from saying that the arguments upon the other side are sufficient to outweigh it. But the arguments on the other side are very far from contemptible, whether we regard the interests of a particular class of creditors, or whether we consider the case with reference to the bankrupt himself. It is quite possible that arrangements may be made by the ma- jority of creditors injurious to the interests of the minority. Rich men who can afford to wait may elect a mode of proceeding that will be the ruin of poor men who can't. The Bill, indeed, provides that all debts under ten pounds shall still be under the exclusive control of the official as- signee. But this provision only meets the evil to a very limited extent. For a rich man may have a debt of ten pounds, and a poor man a debt of fifty. Now, the official assignee, having no interest in the matter, though he may, of course, on that account be rather more ailatory in his pro- ceedings, is far more likely to distribute even justice to all parties. This argument, therefore, is to be set against the plea that those most interested in the bankruptcy are the most proper persons for assignees. But there is another argument remaining on the same side, and from one point of view a more important one. This is that the punishment of the bankrupt, whatever that may be, ought not, after he has once come before the Court, to be liable to be affected by his creditors. It is open to him in the present state of the law to make such a private arrangement with his creditors as it is here proposed to let him make through the medium of a court of law. Why should not this facility be sufficient for him ? It is quite possible that creditors' assignees might have excellent reasons for screening a dis- honest bankrupt, from which, of course, the official assignee would be exempt. And we cannot think' that a court of law should be made the agent of a system manifestly liable to so gross an abuse as this. The punishment of the bankrupt, and the prevention of commercial dishonesty by the example, is one of the chief objects of the Court of Bankruptcy. The creditors would convert it into a means of making the best possible bargain for themselves, without regard to the inte- rests of morality. For these reasons we are on the whole disposed to think that the balance of argument is in favour of the Lords' amendmeqt on this particular point. Upon the third point, however, there is even less room for hesitation. It is provided by the Act that a non-trader may be adjudicated a bankrupt on the petition of a creditor, or creditors, representing a certain amount of debt. This may be done even while the debtor is abroad, and ignorant of the proceedings that are being taken against him. He is, in- deed, to have his action for damages afterwards, if he can prove the adjudication to have been malicious. But con- sidering the difficulty of proving that, the compensation is a poor one, and there are very many people to whom damages for such an inquiry would be no compensation at all. The House of Lords has therefore introduced a clause providing that "the debt of the petitioning creditor of any debtor not being a trader must be a debt contracted after the pass- ing of this Act; and the judgment debtor summons must be a summons in respect of a debt contracted or of a liability incurred after the passing of this Act."
This will, at all events, save those unfortunate gentlemen who, in the innocence of their hearts, have incurred the usual liabilities to tailors, bootmakers, and tobacconists, from being made the victims of any sudden fit of wrath on the trader's part. Henceforward, of course, we shall all have to walk more warily. We shall choose our tradesmen rather by their physiognomy than by the fit of their trousers or the flavour of their cigars ; and we shall only have ourselves to blame if we fall into the hands of a curmudgeon. But should the amendments of the House of Lords be rejected, farewell to long vacation happiness. A secret care will oppress half the tourists in Europe. And at the top of Mont. Blanc, or in the shades of Baden, the heart untravelled will turn trem- blingly to Jermyn-street or Pall Mall. For really to define what is " keeping out of the way," would puzzle the most acute lawyer, and we have little doubt that flagrant acts of injustice, even as it is, will be committed under the new Act. It will become necessary for every man to leave a p.p.c. card upon every tradesman he employs, at least a fortnight before he leaves town, to avoid the imputation of flight. But that he should be put to all this trouble and annoyance on ac- count of debts incurred when no such rule was in existence, is a clear infringement of all sound principles of legislation.
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