purposes for which a Bankruptcy Act is required; but at the same time the machinery should be such as creditors could have confidence in, that the machinery shall not be set in motion to their prejudice until they have had the information necessary to enable them to judge how that machinery should be set in motion. Therefore I have suggested that the Lord Chancellor's Bill would accomplish a good deal of this. I think if the first meeting was presided over by an officer of the Court, who should have authority to control the proceedings, the creditors would have the means of forming a just judgment as to whether the course should be by liquidation or bankruptcy.-Mr. HALL: If a man distributes his estate by preference, and works it down to 2s. 6d. in the pound, then there is fraud?-Mr. DANIEL: I would place every preferred creditor who receives money from a debtor who is hopelessly insolvent in the same position as the creditor, under the 87th section, obtains execution. It is quite impossible that any legislation can make men honest or prudent.-Mr. HALL: Fifteen shillings in the pound.Mr. DANIEL: And all that can be done is to provide the best machinery we can to do it. I don't think that any amount of dividend should entitle a debtor to claim his discharge as of right. His discharge, whether he pays 1s. or 19s., should be voted by the creditors and confirmed by the Court. The PRESIDENT of the Department.-In closing this discussion I shall trouble you with very few observations, although the subject is such an important one that I trust you will bear with me if I say something upon it. The discussion which was originated by Mr. Daniel divided the subject into two heads, the first dealing with alterations to the law required, and the other the alterations in Bankruptcy procedure. As to the first, what Mr. Daniel laid the most stress upon was the alteration which was required in the law of fraudulent preference. Upon that I need hardly say I am thoroughly at one with him. The decision which has taken place in the House of Lords it seems to me will in time, and must when it becomes thoroughly understood, destroy the Law of Bankruptcy altogether. When once men come to see that it is quite open to them, as soon as they find out that insolvency is inevitable, to favour those creditors whom they think will be most useful to them and most likely to help them afterwards, and leave out everybody whom they do not think will be of use-the moment they see that they can do it under the protection of the Bankruptcy Law, it will be found you cannot have a Bankruptcy Law at all. That seems to me the logical result of that decision. I always feel it a reproach on my own advocacy, because I was engaged in the case, and I cannot help thinking that as I entertained such a strong opinion on the subject it must be my fault; but the House of Lords having decided contrary to my opinion, one is bound now to bow to their decision and believe it to be law. All I can wonder is that the result did not seem to be-except to one of their number-a monstrous result. If the result which would follow had seemed to them to be a monstrous one, one would hope they would take steps to remedy the law; but because they did not feel its monstrosity, I do not suppose they will ever earnestly ask for reform. As regards the other matters of substantive change, I do not propose to say anything upon them beyond this, that if you can draw such a definition as would include cases of what everyone understands to be gambling under the colour of business, and which would at the same time exclude cases of legitimate dealing, I don't think anyone would doubt it would be quite proper that you should prevent men who had been gambling in this way from proving; but I am afraid there will be a great difficulty in getting any such definition as is suggested. As to the procedure, I think a great deal of evil has arisen from the fact that the procedure now does not take place under the Bankruptcy Act which was passed by Parliament in 1869, but under rules which were framed under powers given by the Act. If an example was wanted of the vicious system of Parliament not being at the trouble to determine the details, but leaving them to be determined afterwards by somebody else, and providing that whatever that somebody else decides, consistent or inconsistent with the Act, shall have the same force as if Parliament had put it into the Act, you have it here. That, I submit, is about the worst course of proceeding you can adopt to arrive at any rational legislation. That is what has been done here, because if there was any principle in the Act of 1869 it was that a debtor should no longer be permitted in his own interests to invoke the protection of the Bankruptcy Law— that he should not be able to petition for adjudication against himself; that all proceedings should be the hostile proceedings of creditors, and that the creditors should be at liberty to take the matter out of Bankruptcy and deal with it themselves either by way of liquidation or composition. That I believe to have been the scheme of the Act; but the Act empowered them to make rules, and it has been held that these rules have the same effect as if inserted in the Act, even although they were inconsistent, whilst some have been upheld even although they were in direct contradiction to the sections in the Act. There is a rule framed which enables a debtor to petition for liquidation, and a provision which works out the scheme and gives it the same effect as adjudication -a provision which gives all the protection which a bankruptcy gives. That is the work of the rules and not of the Act, and the effect is when a debtor petitions for a liquidation against himself, he now gets every protection which he before got without the odium of a bankruptcy, so that whereas it was intended to make matters worse for the debtor, it has made them better. It was intended he should not petition and get protection for himself as against everybody, and the result is he can get all that protection without the discredit of becoming bankrupt. Of course now the matter has got so much settled that there would be a difficulty in reverting to the old scheme, and what we should now do is to make the liquidation proceedings as satisfactory as we can, though one cannot wonder at their being unsatisfactory having regard to their origin. No doubt a great deal of the mischief does arise from the fact that the creditors take so little interest in the matter, although a great deal of it arises from the fact that the initiating of the proceedings is all left in the hands of the debtor who has more interest to manipulate it to serve his own ends than any individual creditor has in opposing him, which should not be permitted. What we should aim at is this. If the creditors wish the estate to be liquidated out of Bankruptcy, by Q all means let that be done; but don't let the debtor procure the matter to be taken out of Bankruptcy control. Don't let the matter go into liquidation or composition or any other arrangement, absolutely and finally, until precautions are taken to see that it is really the wish of a sufficient number of the creditors. Let a great deal more control be exercised by the Court over all the preliminary proceedings which are to result in a liquidation. Once you are satisfied that a liquidation or composition is the will of the creditors, let them deal with the matter as you please; but down to this let the Court take every precaution to see it has not been a mere arrangement at the wish of the debtor, and it seems to me we don't take half the precaution we should in this respect. Some suggestions have been made very valuable in that direction. One can easily understand why creditors don't do so much as prima facie one would expect. We have known cases in which they would rather not appear as creditors at all, and one can well understand it, because a man does not like it to be known that he has given credit to a man who does not deserve it. Therefore, there is quite sufficient to account for the creditors not taking that interest in the case which we would expect, and that of course you cannot hope to provide against. Of course, if they are holding back on that account, they are only reaping what they have sown, and the law cannot assist them. But apart from that, you ought to put much fewer facilities in the way of the debtor managing this, and to put many more in the way of the creditors managing the matter themselves, and seeing that what has been done is done rightly and is what ought to be done. I own I do not see any reason why you should not extend to the liquidation proceedings the Bankruptcy provision with regard to the payment of a certain amount in the pound before a man gets his discharge. Why, because the creditors think they can get the estate managed more economically by liquidation, the debtor should not still be liable to pay 10s. in the pound, unless the creditors choose to release him, I am at a loss to understand; and therefore that seems to me to be another practical reform; but it is another instance in which that which was looked upon as a great protection in the Act has been defeated, because by the system of liquidation you have destroyed Bankruptcy, and the bankruptcies are a very small proportion indeed to the number of liquidations. THE JUDICATURE ACTS.1 What has been the Effect of the Judicature Acts on the Interests of the Commercial Classes and Suitors generally; and what Amendments are needed? By ALEXANDER EDWARD MILLER, LL.D., Q.C. Now OW that we have completed the first year of our experience of the new system introduced by the Judicature Acts, it seems a fitting time to take a short review of the principal results of the legal revolution,' as it has been termed, which was inaugurated last November. It would obviously be hopeless to attempt anything like a thorough examination of the system in all its bearings within the limits of a paper such as this; and the very utmost that I can expect to do is to call attention to some of the more salient points, especially those in which there seems to be occasion for further legislative interference. It will be generally admitted that the first feeling produced by an examination of the working of the system during the past year is one of blank disappointment. Nothing seems to have been done beyond assimilating the names of a few dissimilar processes, and substituting a singularly uncouth set f expressions for the ancient designations of the Courts and judges. And if this had been in very truth the entire outcome of the Acts the result would not have been wholly accidental. I well recollect that at the Summer Assizes of 1873, while the principal Act was still before Parliament, the subject was discussed at a Judges' dinner at which I was present, and the presiding Judge (I won't say who he was) rather startled me by gravely remarking, The beauty of the Bill is, that it seems to do so much, and does so little; it looks as if we were all to be transmogrified, but it is only the difference between you was and " as you were. The ingenuity of judicial construction, great as it unquestionably is, has not succeeded in minimising the results of the Acts quite to this extent, but the efforts made in that direction have been only too successful, and some of the enactments-particularly in matters of pleading-which, in the Bill, looked most full of promise, have in the hands of judges at chambers turned out most barren of performance. Take, for instance, the right of discovery. Can 6 66 as 1 See Transactions, 1873, p. 226; Sessional Proceedings, 1873–4, p. 115; 1874-5, p. 239. anyone doubt that the intention of the Act was that every suitor should have an indefeasible right to discovery as extensive as that hitherto enjoyed by plaintiffs in Equity, subject only to the risk of having to pay in any event' the costs of any unnecessary or irrelevant curiosity? In order, however, to guard against this power being abused for purposes of spite or mere delay, a judge at chambers is authorised to order any improper interrogatories to be struck out 2; and this authority has been so exercised as practically to strike out every question that could not have been asked before the passing of the Act. Thus the plaintiff in an action for libel has not been permitted to enquire of the defendant whether or not he published the document-'interrogatories not applicable to that form of action '3; in an action for recovery of land the defendant has not been allowed to question the plaintiff as to the particulars. of his pedigree-you cannot see your adversary's brief'; and finally, in no action whatever can the plaintiff interrogate as of right until after the delivery of the statement of defence, because it does not appear, till then, whether the information desired will or not be relevant to the issue." But the crowning absurdity is to come. When an unfortunate defendant to an action for account, where of all things one would suppose discovery before judgment' to be needless, moved on the authority of the decision last mentioned to strike out the interrogatories which had been delivered along with the statement of claim, he is gravely told—and by the Court of Appeal 6that that decision does not apply to actions in the Chancery division, but the plaintiff in those actions is at liberty to interrogate at the same stage of the cause and in the same manner as he was before the Act. And this is the outcome of a new system for the complete assimilation of the practice in every branch of the Court. Take another example. The new system of pleading, as described in the rules and orders which form part of the Act of 1875, is (on paper) as theoretically perfect as it is well possible to imagine. [I cannot say as much for the examples given in the schedules.] Plaintiff and defendant alike are to state concisely and intelligibly the facts on which they respectively rely. The old principle at Common Law, which allowed a defendant to raise as many issues, consistent or inconsistent, as he pleased, taking his chance of 2 Ibid., rule 5. Order 31, rules 1, 2. Strong v. Tappin, 20 S.J. 241; Drake v. Whiteley, Ibid. 281. • Disney v. Longbourne, L.R. 2 Ch.D. 704, affirmed on appeal. |