by Daniel Defoe
him, and he goes on:- "Send a summons to your creditors, and offer
them what you can propose in the pound (always reserving a good
stock to begin the world again), which if they will take, you are a
free man, and better than you were before; if they won't take it,
you know the worst of it, you are on the better side of the hedge
with them: if they will not take it, but will proceed to a statute,
you have nothing to do but to oppose force with force; for the laws
of nature tell you, you must not starve; and a statute is so
barbarous, so unjust, so malicious a way of proceeding against a
man, that I do not think any debtor obliged to consider anything but
his own preservation, when once they go on with that." "For why,"
says the old studied wretch, "should the creditors spend your estate
in the commission, and then demand the debt of you too? Do you owe
anything to the commission of the statute?" "No," says he. "Why,
then," says he, "I warrant their charges will come to 200 pounds out
of your estate, and they must have 10s. a day for starving you and
your family. I cannot see why any man should think I am bound in
conscience to pay the extravagance of other men. If my creditors
spend 500 pounds in getting in my estate by a statute, which I
offered to surrender without it, I'll reckon that 500 pounds paid
them, let them take it among them, for equity is due to a bankrupt
as well as to any man, and if the laws do not give it us, we must
take it."
This is too rational discourse not to please him, and he proceeds by
this advice; the creditors cannot agree, but take out a statute; and
the man that offered at first it may be 10s. in the pound, is kept
in that cursed place till he has spent it all and can offer nothing,
and then gets away beyond sea, or after a long consumption gets off
by an act of relief to poor debtors, and all the charges of the
statute fall among the creditors. Thus I knew a statute taken out
against a shopkeeper in the country, and a considerable parcel of
goods too seized, and yet the creditors, what with charges and two
or three suits at law, lost their whole debts and 8s. per pound
contribution money for charges, and the poor debtor, like a man
under the surgeon's hand, died in the operation.
2. Another evil that time and experience has brought to light from
this act is, when the debtor himself shall confederate with some
particular creditor to take out a statute, and this is a masterpiece
of plot and intrigue. For perhaps some creditor honestly received
in the way of trade a large sum of money of the debtor for goods
sold him when he was sui juris, and he by consent shall own himself
a bankrupt before that time, and the statute shall reach back to
bring in an honest man's estate, to help pay a rogue's debt. Or a
man shall go and borrow a sum of money upon a parcel of goods, and
lay them to pledge; he keeps the money, and the statute shall fetch
away the goods to help forward the composition. These are tricks I
can give too good an account of, having more than once suffered by
the experiment. I could give a scheme, of more ways, but I think it
is needless to prove the necessity of laying aside that law, which
is pernicious to both debtor and creditor, and chiefly hurtful to
the honest man whom it was made to preserve.
The next inquiry is, whether the extremities of this law are not
often carried on beyond the true intent and meaning of the act
itself, for malicious and private ends to gratify passion and
revenge?
I remember the answer a person gave me, who had taken out statutes
against several persons, and some his near relations, who had failed
in his debt; and when I was one time dissuading him from prosecuting
a man who owed me money as well as him, I used this argument with
him:- "You know the man has nothing left to pay." "That's true,"
says he; "I know that well enough." "To what purpose, then," said
I, "will you prosecute him?" "Why, revenge is sweet," said he. Now
a man that will prosecute a debtor, not as a debtor, but by way of
revenge, such a man is, I think, not intentionally within the
benefit of our law.
In order to state the case right, there are four sorts of people to
be considered in this discourse; and the true case is how to
distinguish them,
1. There is the honest debtor, who fails by visible necessity,
losses, sickness, decay of trade, or the like.
2. The knavish, designing, or idle, extravagant debtor, who fails
because either he has run out his estate in excesses, or on purpose
to cheat and abuse his creditors.
3. There is the moderate creditor, who seeks but his own, but will
omit no lawful means to gain it, and yet will hear reasonable and
just arguments and proposals.
4. There is the rigorous severe creditor, that values not whether
the debtor be honest man or knave, able or unable, but will have his
debt, whether it be to be had or no, without mercy, without
compassion, full of ill language, passion, and revenge.
How to make a law to suit to all these is the case. That a
necessary favour might be shown to the first, in pity and compassion
to the unfortunate, in commiseration of casualty and poverty, which
no man is exempt from the danger of. That a due rigour and
restraint be laid upon the second, that villainy and knavery might
not be encouraged by a law. That a due care be taken of the third,
that men's estates may as far as can be secured to them. And due
limits set to the last, that no man may have an unlimited power over
his fellow-subjects, to the ruin of both life and estate.
All which I humbly conceive might be brought to pass by the
following method, to which I give the title of
A COURT OF INQUIRIES.
This court should consist of a select number of persons, to be
chosen yearly out of the several wards of the City by the Lord Mayor
and Court of Aldermen, and out of the several Inns of Court by the
Lord Chancellor, or Lord Keeper, for the time being, and to consist
of,
A President, } To be chosen by the rest, and
A Secretary, } named every year also.
A Treasurer, }
A judge of causes for the proof of debts.
Fifty-two citizens, out of every ward two;
of which number to be twelve merchants.
Two lawyers (barristers at least) out of each
of the Inns of Court.
That a Commission of Inquiry into bankrupts' estates be given to
these, confirmed and settled by Act of Parliament, with power to
hear, try, and determine causes as to proof of debts, and disputes
in accounts between debtor and creditor, without appeal.
The office for this court to be at Guildhall, where clerks should be
always attending, and a quorum of the commissioners to sit de die in
diem, from three to six o'clock in the afternoon.
To this court every man who finds himself pressed by his affairs, so
that he cannot carry on his business, shall apply himself as
&
nbsp; follows:-
He shall go to the secretary's office, and give in his name, with
this short petition:-
To the Honourable the President and Commissioners of His Majesty's
Court of Inquiries. The humble petition of A. B., of the Parish of
--- in the Haberdasher.
Showeth
That your petitioner being unable to carry on his business, by
reason of great losses and decay of trade, and being ready and
willing to make a full and entire discovery of his whole estate, and
to deliver up the same to your honours upon oath, as the law directs
for the satisfaction of his creditors, and having to that purpose
entered his name into the books of your office on the --- of this
instant.
Your petitioner humbly prays the protection of this Honourable
Court.
And shall ever pray, &c.
The secretary is to lay this petition before the commissioners, who
shall sign it of course; and the petitioner shall have an officer
sent home with him immediately, who shall take possession of his
house and goods, and an exact inventory of everything therein shall
be taken at his entrance by other officers also, appointed by the
court; according to which inventory the first officer and the
bankrupt also shall be accountable.
This officer shall supersede even the Sheriff in possession,
excepting by an extent for the king; only with this provision:-
That if the Sheriff be in possession by warrant on judgment obtained
by due course of law, and without fraud or deceit, and, bona fide,
in possession before the debtor entered his name in the office, in
such case the plaintiff to have a double dividend allotted to his
debt; for it was the fault of the debtor to let execution come upon
his goods before he sought for protection; but this not to be
allowed upon judgment confessed.
If the Sheriff be in possession by fieri facias for debt immediately
due to the king, the officer, however, shall quit his possession to
the commissioners, and they shall see the king's debt fully
satisfied before any division be made to the creditors.
The officers in this case to take no fee from the bankrupt, nor to
use any indecent or uncivil behaviour to the family (which is a most
notorious abuse now permitted to the sheriff's officers), whose fees
I have known, on small executions, on pretence of civility, amount
to as much as the debt, and yet behave themselves with unsufferable
insolence all the while.
This officer being in possession, the goods may be removed, or not
removed; the shop shut up or not shut up; as the bankrupt upon his
reasons given to the commissioners may desire.
The inventory being taken, the bankrupt shall have fourteen days'
time, and more if desired, upon showing good reasons to the
commissioners, to settle his books and draw up his accounts; and
then shall deliver up all his books, together with a full and true
account of his whole estate, real and personal, to which account he
shall make oath, and afterwards to any particular of it, if the
commissioners require.
After this account given in, the commissioners shall have power to
examine upon oath all his servants, or any other person; and if it
appears that he has concealed anything, in breach of his oath, to
punish him, as is hereafter specified.
Upon a fair and just surrender of all his estate and effects, bona
fide, according to the true intent and meaning of the act, the
commissioners shall return to him in money, or such of his goods as
he shall choose, at a value by a just appraisement, 5 pounds per
cent. of all the estate he surrendered, together with a full and
free discharge from all his creditors.
The remainder of the estate of the debtor to be fairly and equally
divided among the creditors, who are to apply themselves to the
commissioners. The commissioners to make a necessary inquiry into
the nature and circumstances of the debts demanded, that no
pretended debt be claimed for the private account of the debtor; in
order to which inquiry they shall administer the following oath to
the creditor, for the proof of the debt.
I, A. B., do solemnly swear and attest that the account hereto
annexed is true and right, and every article therein rightly and
truly stated and charged in the names of the persons to whom they
belong; and that there is no person or name named, concealed, or
altered in the said account by me, or by my knowledge, order, or
consent. And that the said does really and bona fide owe and stand
indebted to me for my own proper account the full sum of mentioned
in the said account, and that for a fair and just value made good to
him, as by the said account expressed; and also that I have not made
or known of any private contract, promise, or agreement between him
the said (or any body for him) and me, or any person whatsoever.
So help me God.
Upon this oath, and no circumstances to render the person suspected,
the creditor shall have an unquestioned right to his dividend, which
shall be made without the delays and charges that attend the
commissions of bankrupts. For,
1. The goods of the debtor shall upon the first meeting of the
creditors be either sold in parcels, as they shall agree, or divided
among them in due proportion to their debts.
2. What debts are standing out, the debtors shall receive summonses
from the commissioners, to pay by a certain time limited; and in the
meantime the secretary is to transmit accounts to the persons owing
it, appointing them a reasonable time to consent or disprove the
account.
And every six months a just dividend shall be made among the
creditors of the money received; and so, if the effects lie abroad,
authentic procurations shall be signed by the bankrupt to the
commissioners, who thereupon correspond with the persons abroad, in
whose hands such effects are, who are to remit the same as the
commissioners order; the dividend to be made, as before, every six
months, or oftener, if the court see cause.
If any man thinks the bankrupt has so much favour by these articles,
that those who can dispense with an oath have an opportunity to
cheat their creditors, and that hereby too much encouragement is
given to men to turn bankrupt; let them consider the easiness of the
discovery, the difficulty of a concealment, and the penalty on the
offender.
1. I would have a reward of 30 per cent. be provided to be paid to
any person who should make discovery of any part of the bankrupt's
estate concealed by him, which would make discoveries easy and
frequent.
2. Any person who should claim any debt among the creditors, for
the account of the bankrupt, or his wife or children, or with design
to relieve them out of it, other or more than is, bona fide, due to
him for value received, and to be made out; or any person who shall
receive in trust, or by deed of gift, any part of the goods or other
estate of the bankrupt, w
ith design to preserve them for the use of
the said bankrupt, or his wife or children, or with design to
conceal them from the creditors, shall forfeit for every such act
500 pounds, and have his name published as a cheat, and a person not
fit to be credited by any man. This would make it very difficult
for the bankrupt to conceal anything.
3. The bankrupt having given his name, and put the officer into
possession, shall not remove out of the house any of his books; but
during the fourteen days' time which he shall have to settle the
accounts shall every night deliver the books into the hands of the
officer; and the commissioners shall have liberty, if they please,
to take the books the first day, and cause duplicates to be made,
and then to give them back to the bankrupt to settle the accounts.
4. If it shall appear that the bankrupt has given in a false
account, has concealed any part of his goods or debts, in breach of
his oath, he shall be set in the pillory at his own door, and be
imprisoned during life without bail.
5. To prevent the bankrupt concealing any debts abroad, it should
be enacted that the name of the bankrupt being entered at the
office, where every man might search gratis, should be publication
enough; and that after such entry, no discharge from the bankrupt
should be allowed in account to any man, but whoever would adventure
to pay any money to the said bankrupt or his order should be still
debtor to the estate, and pay it again to the commissioners.
And whereas wiser heads than mine must be employed to compose this
law, if ever it be made, they will have time to consider of more
ways to secure the estate for the creditors, and, if possible, to
tie the hands of the bankrupt yet faster.
This law, if ever such a happiness should arise to this kingdom,
would be a present remedy for a multitude of evils which now we
feel, and which are a sensible detriment to the trade of this
nation.
1. With submission, I question not but it would prevent a great
number of bankrupts, which now fall by divers causes. For,
(1.) It would effectually remove all crafty designed breakings, by
which many honest men are ruined. And
(2.) Of course 'twould prevent the fall of those tradesmen who are
forced to break by the knavery of such.
2. It would effectually suppress all those sanctuaries and refuges
of thieves, the Mint, Friars, Savoy, Rules, and the like; and that
these two ways:-
(1.) Honest men would have no need of it, here being a more safe,
easy, and more honourable way to get out of trouble.
(2.) Knaves should have no protection from those places, and the
Act be fortified against those places by the following clauses,
which I have on purpose reserved to this head.
Since the provision this court of inquiries makes for the ease and
deliverance of every debtor who is honest is so considerable, 'tis
most certain that no man but he who has a design to cheat his
creditors will refuse to accept of the favour; and therefore it
should be enacted,
That if any man who is a tradesman or merchant shall break or fail,
or shut up shop, or leave off trade, and shall not either pay or
secure to his creditors their full and whole debts, twenty shillings
in the pound, without abatement or deduction; or shall convey away
their books or goods, in order to bring their creditors to any
composition; or shall not apply to this office as aforesaid, shall
be guilty of felony, and upon conviction of the same shall suffer as
a felon, without benefit of clergy.
And if any such person shall take sanctuary either in the Mint,
Friars, or other pretended privilege place, or shall convey thither
any of their goods as aforesaid, to secure them from their
creditors, upon complaint thereof made to any of His Majesty's
Justices of the Peace, they shall immediately grant warrants to the
