Amendments into the wording of the Act, made but little substantial alterationso far as related to the particular subject of his remarks-in its provisions. He scarcely need, however, inform the House that the Bill which he had framed proposed to extend the law to all cases of property committed to the charge of agents, although they might not have received any instructions in writing. The next subject to which he would allude was one to the consideration of which he would invite the particular attention of the House. He might, first of all, state that he unquestionably recognized that principle of the English law which provided that no man should be put upon his trial and found guilty upon evidence procured from his own confession made in a civil proceeding. That was a principle which should, in his opinion, be preserved, and he had therefore continued the exemption from liability to criminal prosecution on the ground of evidence given before a civil tribunal in a civil case; but he did not propose to include within the scope of that exemption the extraordinary provision continued in the 7 & 8 Geo. IV., which, no doubt, had originally been forced on his hon. Friend (Mr. Drummond). It enacted that a person who had criminally converted property thus entrusted to him, and made a voluntary confession of his guilt in any proceedings instituted against him in a court of bankruptcy or insolvency, should by such confession escape all criminal prosecution and penalties. There were in the Bill other clauses providing that criminal liability should not be permitted to interfere with the civil rights of the party. There was also another clause in the Bill, which provided that in the case in which a civil suit had been instituted against a trustee to recover property which he had fraudulently appropriated, no criminal proceedings should be taken during the progress of that suit without the leave of the Judges before whom it happened to be pending. He proposed that, for fear of criminal proceedings being resorted to for the purpose of influencing the civil suit, and also to prevent civil proceedings being instituted in order to extort a confession. It was a clause, however, which possibly might lead to some difference of opinion. Those were the principal features in the Bill. Of the language in which it was drawn up he was by no means particularly enamoured, but he felt assured he would receive from both sides of the House the most zealous co-operation in the endeavour to remedy its defects. He himself had prepared the Bill, and therefore he should welcome any suggestions which might be made to him with that view, from whatever quarter they might come; and he should, in conclusion, express a hope that the present Session might be signalized by such an instalment of legal reform as would remove a great opprobrium to our jurisprudence, and would lead-particularly in the case of those in humble life, among whom the constant recurrence of the frauds against which the Bill sought to provide produced so much misery-to an improved state of things, while it tended to place our legislation on a more respectable footing than that upon which it now stood. The hon. and learned Gentleman then moved for leave to bring in his Bill. There MR. MALINS congratulated the House that this subject had now been brought under their consideration by his hon. and learned Friend the Attorney General in a speech which was worthy of his reputation and the interests involved in it. was among those whom he had the honour to address scarcely one who had not in all probability, at some period or another of his life, dischared the duties of an executor or a trustee, and to them, of course, it was needless to say that the question with which his hon. and learned Friend proposed to deal was one which was worthy of their most serious attention. He himself had long been of opinion that breaches of trust under aggravated circumstances should be rendered liable to criminal prosecution, and he might add that the present Lord Chief Justice of the Court of Common Pleas had, when Attorney General, introduced a Bill by which it was intended to carry out objects similar to those which his hon. and learned Friend had in view. That hon. and learned Gentleman had felt, however, some difficulty in prosecuting that mea, sure on account of a doubt entertained by some of the most distinguished Judges of the land as to whether it would be expedient to endanger the civil remedy by giving a criminal one? The hon. and learned Gentleman opposite was, he was glad to see, fully alive to that danger. No doubt it was a very poor remedy to afford those who had been injured by a breach of trust, to send them to the Court of Chancery. It was, indeed, a poor consolation to those who had been ruined by the misconduct of a trustee, in appropriating to his own use that which he was bound to protect for the interest of those in whose sure effective for the object he had in view behalf it was committed to his charge, to preventing its going too far, and making send them to the Court of Chancery for redress; not on account of any defect in that court, for in this matter it was perfectly innocent, and there was no part of its jurisdiction more beneficially exercised or more frequently brought into operation, and he regretted to say, also, very frequently brought into operation in working great hardships on trustees. There were few gentlemen in society but had at some time or other committed a breach of trust. And why had they done so? Families, or members of families, applied to the trustees; a pressing necessity had arisen; family arrangements were proposed; and it was urged upon the trustees that if a certain sum of money could be advanced, a certain property purchased or sold, or something done which was not strictly regular, the interest of the family would be greatly promoted. Trustees had frequently and most correctly been described as an unfortunate class of persons. Theirs was, indeed, a thankless office; for whilst they incurred great perils they could not, from the rigid rules of the Court of Chancery, themselves derive any personal benefit. It was of the highest importance, then, that there should be thrown around them guards and precautions to prevent that, which was done from motives of benevolence, being attributed to motives of criminality. He concurred with the Attorney General in thinking that the law ought to be made more stringent in cases where trustees had deviated from their duty from a regard to their own interests, and especially in gross cases where executors and trustees knowingly and abominably sold out, perverted, and appropriated trust property to their own use. At present the only remedy was by a bill in Chancery to make them restore the funds they had appropriated. That would be an effectual mode of proceeding if the delinquents had the money forthcoming; since, for the honour of human nature, it generally happened that the Trustees had acted under some pressure of poverty and necessity, and that deceived by false hopes they had trusted at some future period to be able to replace the money. Seeing the difficulties by which the question was beset, he thought it would require the exercise of the greatest possible care on the part of the House -all the experience and ability of his hon. and learned Friend, and the assistance of all sides of the House, to make the mea those criminals who acted from the best and purest motives. It was with the greatest satisfaction, also, that he found his hon. and learned Friend was prepared to grapple with that other great question of the criminal misappropriation of trust property by the direction of the Trustees and Managers of Joint-stock Banks. Numerous instances of this kind had of late occurred which were perfectly familiar to the public. Need he mention the Tipperary Bank, the Royal British Bank, and an Indian Bank which had lately failed. These were three prominent instances; but not all. Gentlemen who practised in Chancery were daily being made acquainted with others. He himself would tomorrow be professionally engaged in the case of an Australian Banking Company, with respect to which this state of things occurred. The Bank was established in 1844 or 1845, with a capital nominally of £300,000 or £400,000. The Company never raised more than £40,000. The Directors, however, at once proceeded to trade on a large scale; borrowed more than £300,000 on debentures, and misappropriated the whole of the money. Process was instituted in the Court of Chancery, which had wound up the affairs as nearly as possible, and it had done so under the Winding-up Act by calling upon the unfortunate shareholders in the Company to pay up upwards of half a million of money. Such cases frequently occurring with regard to these Joint-stock Banks, produced the painful impression upon his mind that there was in this country-from what cause he knew not, but he deeply deplored the fact-an absence, to a lamentable extent, of commercial integrity. Of course, these were exceptional cases; for, as a rule, the commercial classes of England were composed of men of high respectability and great integrity, but unfortunately the public could not discern those who were from those who were not, and thus a stigma was cast upon our country which lowered us in the scale of nations. He rejoiced to find that his hon. and learned Friend had made up his mind to see if the law, as it stood, was not strong enough to reach such criminal acts as that of declaring dividends of a large amount in order to deceive the public, at the very time that those who declared the dividend knew that the capital was all gone. In conclusion, he rejoiced at the introduction of this most important measure-important, not only as affecting the law, but as making a strong effort, which he trusted every Member in the House would aid in rendering successful, to put the law in such a state as would enable it to uphold, as far as the law could do it, the integrity of commercial transactions, as well as the integrity of all men who took upon themselves the administration of trusts. ments which he wished the House to accept was precisely the same as that of the Bill passed last Session with regard to all joint-stock companies with the exception of banking and insurance companies. The Act of last year, he might observe, was introduced after the greatest consideration, and would, he trusted, prove very beneficial in its operation. The present state of the law respecting banking and insurance companies was this:-There was now a MR. HADFIELD, whilst welcoming the great conflict between the remedy of bankintroduction of the measure, was of opi- ruptcy and the remedy, as it was called, of nion that the utmost care and caution winding-up under the Acts passed for that were necessary not to offend gentlemen purpose. It was a most unfortunate pewho undertook the management of others' culiarity of this country that we did not interests in the capacity of trustees. It confide to any one tribunal the duty of was already one of the most difficult things administering complete justice on an entire to get suitable persons to act. He himself subject, but gave to different tribunals the had always refused to be a trustee beyond charge of its fragmentary parts. Where the circle of his own family. With regard a joint-stock banking company fell into to Joint-stock Banks it was most desirable difficulties and became insolvent two things that they should be looked into closely. I had to be effected. The one was the payHe considered them as engaged in a profitless competition; and it was matter of surprise to him how a man of property could ever consent to take a share in any one of them. The Directors themselves were generally chosen from a class of men who were utterly unfitted for the office. MR. NAPIER asked if the hon. and learned Gentleman proposed to extend his Bill to Ireland? THE ATTORNEY GENERAL replied, that the measure was to be a general one, applicable to the United Kingdom. MR. NAPIER expressed his gratification at this announcement, and Leave given. Bill to make better provision for the punishment of Frauds committed by Trustees, Bankers, and other persons entrusted with Property, ordered to be brought in by Mr. ATTORNEY GENERAL, Sir GEORGE GREY, and Mr. BAINES. JOINT-STOCK COMPANIES, &c. COMMITTEE. LEAVE. Order for Committee read; Acts read. THE ATTORNEY GENERAL begged the patient indulgence of the House while he called its attention to a measure of a somewhat peculiar character, because it intended to deal with an existing state of things, and was therefore, to a certain extent, retrospective. He had a Resolution to move on which would be founded a Bill to amend the particular Act under which public companies were liable to be made bankrupt, and also to amend the Winding-up Acts. The spirit of the enact ment of its creditors and the putting of its assets in their power. The other was the determination of the measure and relative proportions in which individual shareholders should contribute to make up the deficiency in the fund available for meeting the company's obligations. It would be imagined that both of these processes might be conducted by one tribunal. But, in fact, when a public company became insolvent the duty of winding-up the estate for the payment of the creditors might belong to the Court of Bankruptcy, while the operations for apportioning the contributions required from the various shareholders and for settling their respective equitable rights could only be effected through the medium of another tribunal— the Court of Chancery, under the Winding-up Acts of 1848 and 1849. company consisting of many shareholders particular individuals might be called upon. to pay the debts of the concern in unequal ratios. For example, one shareholder, whose fair contribution was only £2,000, was liable to be called upon by the creditors for say £20,000, and could be compelled to pay it too. And the question was, how could this person come upon his fellow-shareholders, who were equally li able, to recover the remaining £18,000? The difficulty attending the solution of this point, and the mode of working it out, had led to the introduction of the Winding-up Acts of 1848 and 1849. Then there arose from this state of the law a conflict between the two jurisdictions, of In a which the whole community had recently had a most painful and distressing exhibition brought before their eyes in the notorious case of the Royal British Bank, to which previous reference had been made, and in which it would be recollected that all the several branches of that great tri bunal, the Court of Chancery, were occupied for a considerable period, not in determining either the rights of the creditors or the liabilities of the shareholders, but in deciding between the claims of the official managers under the Winding-up Acts. and the rival claims of the assignee under the bankruptcy to have the benefit arising from the cutting up and distribution of the estate. Thus, for a considerable time our Courts were engaged, not in the actual administration of justice, but in settling the preliminary question in which of our courts that justice must be sought. Another serious evil arising from the same conflict of jurisdiction lay in the liability of the shareholders of the insolvent company to as many actions as there were creditors. What was the consequence of this state of affairs? Keeping to the example of the British Bank as an illustration, the creditors of which were about 6,000 in number, and the shareholders some 280 or 300, at present every single creditor had a right, after certain preliminaries, to bring an action to recover his claim against every single shareholder. Thus they had 6,000 creditors multiplied by 300 to represent the number of actions which the existing law allowed to be brought as the consequence of the failure of this particular company. What was the practical result? He held in his hand an exceedingly long list of actions, from which he found that one creditor, for a sum of less than £150, had commenced no fewer than twenty-five different suits. He had a second lis giving the number of shareholders who had fled the country; and a third-which was also very long giving the number who had become bankrupts. Many others had, no doubt, made settlements of their property and arrangements as to their effects in the hope of evading the consequences of this state of the law, because they found it utterly impracticable, with 6.000 creditors, and 300 share holders, to come to any mutual understanding. Common sense would dictate that somebody should have the power of representing the interests of the shareholders, and somebody else the power of representing the rights of the creditors, with the view to an arrangement by which the liabilities of the shareholders should be determined, and each of them rescued from what was perhaps even worse than the original loss-namely, the accumulated costs of the innumerable actions, which seriously aggravated the first misfortune of the unhappy shareholder. He (the Attorney General) had, therefore, to submit to the consideration of the House a remedy in regard to the existing state of things and for all future cases of this description. Let the creditors of a banking, or any other public company, not included in the late Acts, be called together by advertisement, and be enabled, subject to certain conditions and under the approval of the Court, to choose one or more persons to represent their interests; and let those persons be armed with authority to make any arrangement with the representatives of the shareholders for the purpose of obtaining that amount of contribution from each individual shareholder which might be right or practicable. When this was done, let the shareholders be protected from liability to actions on the terms-of immediately making application to the Court, having the direction of the proceeding, and submitting to such conditions as it might think fit to attach to the privilege of immunity from action by the creditors. In the case of a bank a shareholder was placed by the existing law in a situation of peculiar hardship, because as soon as the bank was made bankrupt he was liable to pay the whole of its debts, although the whole of the company's available assets might have been seized by the creditors. It was most unjust to leave a man liable to pay the entirety of the debts, when. probably, in the course of three or four months the whole of the difference between the dividend realized under the bankruptcy and the full amount of the debts might be forthcoming by means of contributions levied under the Winding-up Act rateably upon the shareholders. Suppose the assets realised 7s. in the pound, was it not most unjust to permit a shareholder to be sued for the whole 20s.? His liability ought to be confined to the 13s. Under the pre sent Bill the Court would give protection against this oppression upon the terms of the shareholder giving security for a reasonable amount. The Bill resolved itself into two propositions. Instead of the interests of the most important and largest creditors being destroyed by the refusal of some one or two creditors of inferior amount to concur in an arrangement, it tiplicity of actions alluded to by the hon. was proposed to empower the majority of and learned Gentleman. The object of the the creditors, in number and value, to ap- Bill was to effect a compromise of the point a person to carry a just and equit-existing law, but he would suggest an imable arrangement into effect. At present provement. By the present law the pera person might be a creditor at the time son as well as the property of the creditor of the bankruptcy for some £40 or £50. could be taken. The course adopted was An attorney came to him and said, "Sell an exhausting process; for instance, a call me your debt;" the rights of the creditor was made on 350 shareholders, to which were transferred to the attorney for a con- only 200 responded; a second call was sideration, and some 200 or 300 actions then made, which reduced the number to were brought upon that miserable debt. say 100, and on that 100 a third call was As many hon. Gentlemen were no doubt made. He would suggest that directly aware, this was done in the case of the an order to wind-up was made, the right Royal British Bank. The shareholders of creditors to sue individual shareholders found it impossible to meet the demands should cease. It might be said that if this of the creditors with any chance of set- were so the shareholders would leave the tling the claims or making a fair compro- country or make away with their property. mise. The object of the Bill was to At present, however, under the Act for the enable the creditor to be represented, and Abolition of arrest under Mesne Process a by that means to bind the whole body creditor had the power, by permission of a of creditors to advantageous terms. The Judge, to arrest a debtor who was about other proposition was this-to enable a to leave the country, and he would give the shareholder, as soon as terms had been same power to creditors in this case, under agreed upon, to apply to the Court for pro- a Judge's order, to arrest shareholders tection against vexatious proceedings, by where there was evidence to show that giving security to answer the amount they were about to abscond to avoid their which, so far as he was concerned, should liability. Such a provision as he had sugbe required of him to carry out the ar- gested would get rid of the enormous evil rangements already agreed upon by the disclosed in the case of the Royal British representative of the creditors. He be- Bank, where there were 350 shareholders, lieved that the Bill would be beneficial abundantly able to pay all their debts, and alike to creditors and debtors, because where, if the right of sueing individual while the former would be more likely to shareholders had not existed, he believed obtain payment of their debts, the latter the affairs of the bank might have been would be saved from ruinous litigation. wound up, calls made, every creditor satisThe Bill would apply to all existing as well fied, and the shareholders set perfectly as to future companies, and would there- free. The Bill which came last year from fore supply a grievous defect in the Bill of the Lords was unfortunately lost owing to last Session. The hon. and learned Gen- the opposition of many hon. Gentlemen tleman concluded by moving, that the from the other side of the Channel, who House resolve itself into Committee to were under the impression that he supconsider the said Acts. ported it in order to favour some of the MR. MALINS believed that many of shareholders in the Tipperary Bankthe provisions of the contemplated mea- which was far from his intention. sure of the hon. and learned Gentleman Bill, if it had passed last year, would have were almost identical with those of a Bill saved the shareholders of the British Bank which came down from the Lords last from almost all their troubles, and he acSession, but which unfortunately he was cused the Government of a want of moral not able to carry beyond a second reading. courage in connection with it. Because If it had become law he believed that much there was a great feeling against the of the misery which had been occasioned measure on the part of those whose supby the failure of the Royal British Bank port Ministers desired to have, they left might have been avoided. Many of the the battle solely in his hands, with the unfortunate shareholders had fled the coun- result he had indicated. This was the try, not to avoid payment of their fair share sort of support which private Members got of the debts of the bank, but to save them-in attempting to improve the law. Now, selves from the entire ruin which might however, the Government was obliged to have been brought upon them by the mul- come forward and do that which it re That |