FRAUDULENT DEBTORS.

Nelson Evening Mail, Volume V, Issue 29, 4 February 1870, Page 2

FRAUDULENT DEBTORS.

The following epitome of an Act, lately passed through the British Parliament, for the punishment of fraudulent debtors, is takeu from the Commercial Intelligencer, a London Paper. Possibly it may prove of some interest to the solvent portion of our community : — This Act m;iy be considered as a kind of supplement to the New Bankruptcy Bill, and will, under the title of the Debtor's Act, take effect simultaneously with it on the flrst of January It provides for the punishment of fraudulent debtors, and for tbe abolition of imprisonment for debt; but there is an excellent clause at tlie outset of the Act, to the effect that, a bankrupt will be still liable to imprisonment for improper conduct. For instance, if be is a defaulter in the payment of any portion of a salary or income be may have been ordered to pay for the benefit of his creditors, be will not be exempted by this Act from imprisonment, and for this, and a fewother offences specially enumerated, the Act simply provides that the debtor shall not be imprisoned for more thau one year. The Court may commit to prison for a term not exceeding six weeks, or until payment of the sum due, any person who makes default in payment ofany debt due from him in pursuance of any order of that Court, provided that it is proved to the satisfaction of the Court that the bankrupt has, or has had, the means to pay the sum in respect of which he has made default, or has refused to pay it. No imprisonment of this kind wili , operate as a satisfaction or extinguishment of any debt, or deprive any creditor from taking out execution against the debtor's goods, in the same manner as if he were not imprisoned. If a creditor has reason to suppose that the bankrupt is about to leave England, and that his absence will materially affect the case, and proves as much to the satisfaction of the Court, the latter may have him arrested and locked up for six months, unless he gives a security not exceeding the sum claimed in Uie action, that he will not leave England without the leave of the Court. Where the action is for a penalty other than a penalty in respect of any contract, the security given (^instead of being that the defendant will not leave England) shall be to the effect, that any sum recovered against the defendant in the action will be paid. The second part of the Debtors' Act, which provides for the punishment of fraudulent debtors, is perhaps the most important and deserves special attention. Any person adjudged bankrupt, and anybody whose affairs are liquidated by arrangement, will be deemed guilty of a misdemeanour in each of the following cases, and on conviction may be imprisoned for two years, with or without hard labor ; that is to say, — 1. If he hides any facts from the trustee relating to property ; 2. If he does not hand over to the trustee all property he is bound by law to deliver to him, or any books and papers relating to his bankruptcy the trustee may require ; 3. If he fraudulently removes any property ; 4. If he makes any material omission in any statement relating to his affairs ; 5. If, knowing that a false debt had been proved by any one, he fails to inform the trustee of the fact within a month ; 6. If he prevents the production of any book or papers ; 7. If after the presentation of the bankruptcy petition, or within four months before it, he alters so as to falsify any of his books relating to his property, or makes any false entry that may affect his case ; 8. If within the same period he fraudulently parts with any of his books or papers affecting his bankruptcy ; 9. If he attempts to account for any part of his property by fictitious losses or expenses, or by any false representations obtains any property on credit, aud has not paid for it ; 10. If within the same period he pawns, or pledges, or disposes of, other than in the ordinary way of his trade, any property he has obtained on credit and not paid for.' Or, lastly, if he is guilty of any f .Ise representation, or other fraud, for the purpose of obtaining the consent of his creditors or any of them, to any agreement "with reference to his bankruptcy or liquidation. All these casee

are subject to the satisfaction of the jury, that the bankrupt, in committing any one of these offences bad intent co defraud. If bankrupt quits, or makes arrangements to leave England, within four months of or after the presentation of a bankruptcy petition against him, and taking with him twenty pounds' worth of property, which ought by law to be divided amongst his creditors, he will then be guilty of felony, and liable to two years' imprisonment, also with or without hard labor. If in incurring any liability the bankrupt obtains credit on false pretences, or if he with intent to defraud his creditors, makes any gift or transfer of or any charge on his property, or it he has concealed or removed any part of his property since or within two months before the date of any unsatisfied judgment or order for payment of money made against him, he will in each of these •cases be liable to be imprisoned for any time not exceeding one year. If any creditor willfully, and with intent to defraud, makes any false claim or statement of account, he will be subject to the same term of imprisonment. When a debtor makes any arrangement or composition with his •creditors, he will remain liable for the unpaid balance ofany debt which he incurred or increased by any fraud, provided that the defrauded creditor has not assented to the arrangement otherwise than by proving his debt and accepting dividends. "Where the trustee reports to the Court that the bankrupt has been guilty •ofany offence under this Act, or where the Court is satisfied that such is the case, the Court shall, if it appears that there is reasonable probability of his being convicted, order the trustee to prose•cute the bankrupt for such offence, and where this is done, the expenses of the prosecution will be allowed, as are expenses of prosecution for felony. In short the fraudulent debtor, instead of being whitewashed , and regarded by the law as a deserving person in difficulties, will be treated as an ordinary felon. It appears to us that he is .still treated with,some exceptionable tenderness, on the score, no doubt, on which great conquerors escape being called criminals ; for were it not for the greater scale of his operations, and the greater value he has the opportunity for stealing, it is hard to see why a fraudulent debtor should escape with two years' imprisonment while an •ordinary thief may be imprisoned ior seven or more years. On the whole, this Act, taken in conjunction •with the New Bankruptcy Act, is received by the -commercial world with great satisfaction, and although it has to be seen how the details will work in practice, we have at last incorporated in the law the great principles, that the creditors are to have, as far as possible, the management of estates, while the lawyers shall look after the legal points ; and that fraudulent debtors shall be punished as criminals instead of being regarded as classes apart. Traders may now have some hope that they will no longer be legally swindled, under the sanction of the Bankruptcy Courts. The illogical practice of shutting up honest debtors in prison, and thus debarring them from any possibility of paying *4heir debts, however desirous they may be to do so, is also at an end, and will in a few years, no doubt, become a tradition in' the civilised world. That the Government should have been able to carry such measures as the Bankruptcy Bills in such an excited session as the last, is a proof of their steadfast earnestness of purpose ; and ofthe new life that has been infused into the House of Commons by the Eeform Bill, and by the more direct action of public opinion upon our legislators. What the country has wanted for many years past, is a great deal more action rand much less talk, and although it is desirable to maintain the greatest liberty for discussion, it appears to us, that the possibility of fourteen debates and general votes, on principles which are -practically settled — will soon become too much for the patience of the public.