which the poor debtor must pass before he would be even entitled to a discharge at all, and he thought the stringency of the Act should be mitigated by the abolition of this clause requiring a dividend of 33 per cent. It was a desirable provision that a minority of the creditors should not be able to control a majority of the creditors. He would call their attention to the provisions for a composition and discharge. There must be a majority in the number of creditors at the first meeting called, and when the proposition for composition was submitted, and after the majority had consented to a certain mode of composition, the Assignee called a special meeting for the specific purpose of considering that proposition, and at that meeting there must be the concurrence, not merely of the majority in number, but of those holding three-fourths of the aggregate amount of indebtedness. The opinion of the creditors was forwarded to the Judge, accompanied by the affidavit of the insolvent, to the effect that no one of his creditors had been induced by any preferential arrangement, or promise of preferential payment to give his consent; and after that is done it must be made to appear to the Judge that the consent of the majority of the creditors had been fairly obtained, that the trader had not, to the knowledge of any one interested, been guilty of fraudulent concealment of his property, or evasion, or false swearing, that he had kept his account books properly, and after all that the Judge had the discretionary right to confirm the discharge or postpone the discharge. Although a man might have been honest, yet if he had been negligent in business, or had recklessly endorsed the security of others, or had continued his business unduly after he believed himself an insolvent, the Judge might withhold his discharge. After the poor debtor had passed through all that ordeal, and had acquitted himself of any dishonest intent or reckless impropriety he should get his discharge. To withhold the discharge under these circumstances would be an act of prohibition; and that opinion was not confined to himself, but was entertained by representatives of the creditor class by the members of Beards of Trade and others, who represented the creditor class purely in that matter-and they considered this clause requiring a dividend of 33 per cent. should be dispensed with. He Mr. Colby.

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believed it should not be in the power of a single obstinate creditor, where there was a general concurrence of the majority of those interested, still further to embarrass and delay the proceedings under the Act. The effect of this clause would be to prevent composition, which was the most desirable arrangement, since it saved costs. He therefore moved "That the Bill be referred back to Committee of the Whole for the purpose of striking out the 58th Clause which makes it a condition that if the dividend be less than 33 per cent. the discharge may be refused.”

Hon. Mr. BLAKE said he felt bound, for the reasons given by the hon. member for Stanstead, to support the amendment. He believed that the debtor should be encouraged and threatened to go into insolvency while there was anything to be di vided amongst the creditors. He believed that if power were given to a debtor to go into insolvency voluntarily, it would be proper to impose as a condition of discharge that the dividend to be realized from the estate should not be less than a certain amount; but to tell the insolvent that he should not be allowed to go into insolvency of his own accord--that the time for him to do so must be fixed by the creditors, and that in case of their forcing him into insolvency, and the estate should not bring 33 cents on the dollar, he should not have his discharge, was too hard, and besides was inconsistent with the principle of the | Bill.

Mr. WOOD said it seemed remarkable that nearly all the amendments that had been offered to this Bill had been proposed by gentlemen who were opposed to any Insolvency Act at all. The hon. gentleman who moved this amendment was one of that number. If this clause were retained in the Bill, and held over the head of a debtor, the inducement to save as much as he could of his estate would not be held out. If he knew that he could not get his discharge, unless the estate would realize 33 per cent., he would call his creditors before him at the earliest possible moment and lay the condition of his estate before them. If they were satisfied, he would at once be put into insolvency. The amendment was not fair to the commercial community. If this clause were struck out a debtor could go on spending his money as he pleased without giving any account of it, because he

would know that under any circumstances he could get his discharge.

Hon. Mr. TUPPER said this amendanent was not accurate in point of fact. The 58th clause would not bear the interpretation put проп it by the mover of the amendment. Under that clause no Judge had the power to refuse a discharge to any debtor whose assets amounted to ten cents in the dollar, pro- | vided he could account in a satisfactory manner for the deficiency. That was a good provision. No debtor should get his discharge who could not account for his deficiency, whether he paid 33 cents in the dollar or 60 cents.

Mr. PALMER quite agreed with the zemarks which had fallen from the hon.

clause

member for Cumberland. This would do no injustice to the honest trader who could give a satisfactory account of

the condition of his estate.

No man in

this country should go on with his business when his assets were reduced to anything

like 33 per cent.

credit again. The clause was a good one

and should not be struck out.

Mr. YOUNG said that under the old law he was in favor of some check being placed on the release of debtors who had became insolvents, as some abuses had undoubtedly occurred in that way. He felt, however, the position was entirely altered by the change in the principle of the Bill, and the fact that a man could no longer make a voluntarily assignment, but could be placed in insolvency by his creditors whenever they pleased. Under the 58th Clause a number of the creditors of a debtor might refuse to allow him to go into insolvency while he was able to pay 33 cents on the dollar,and if he afterwards became an insolvent, the fact that he was unable to pay that dividend would operate against him obtaining a discharge. He was strongly of opinion that if under the

old law Parliament went a little too far in

the interest of the debtor, there was now danger of going too far in the interests of

the creditors. It bebooved hon. members to honest and industricus traders who to guard against doing an act of injustice might be unfortunate in business from some unlucky speculation.

When the hon.

a

Mr. PATERSON said there was strong feeling in this House in favor of doing away altogether with the Insolvency Law. Now, why was this? The fact was that under the operations of the old law, in which there was 110 clause of this kind, fraud was perpetrated to such an extent that it was considered the country would be better without an Insolvency Act at all. The object of this clause was to prevent the frauds which had been so prevalent in the past, and at the same time, it afforded relief to the honest trader. Under the old law men had passed through the Insolvency Court, paying ten or fifteen cents in the dollar, and when whitewashed occupied a better position than the men they had defrauded. Any one whose estate could not pay 33 cents in the dollar, who had not been overtaken by some unexpected calamity, had no right to be whitewashed or to receive

Mr Wood.

too much to ask that the insolvent, after being stripped of all his property should be refused a discharge. Under the Bill the creditors would have entire control of the insolvent's estate, and they might so mismanage it as to prevent the debtor from being able to pay the dividend specified, and obtain a discharge. The hon. member for Cumberland had argued that under that 50th clause no Judge would refuse to grant a discharge to an insolvent, provided he was able to explain why he could not pay 33 cents on the dollar. That was, however, just where the difficulty arose. In many cases perfectly honest men would find it difficult to explain the reasons why they were unable to pay that amount. Moreover, explanations that would be satisfactory to a Judge of one county, might not prove so to another; and hence there would be different decisions in different localities. It would be a much wiser policy for Parliament itself to decide the conditions under which the insolvent should obtain his dis

charge, rather than leave the power in the bands of any single person. Again, it should not be forgotten that there were a dozen different points in the Bill, which, if not satisfactorily explained, would debar the insolvent from obtaining a discharge. The Bill was an exceedingly stringent one, and was framed almost entirely in the interests of the creditors. He trusted hon. members would judge the question on its merits, and not be led to do an injustice, because under the system of voluntary assignments, there were some abuses; but recognizing that the Bill provided for compulsory assignments, he hoped they would vote for the amendment of the hon. member for Stanstead, which would protect the honest and industrious debtor.

Mr. SCATCHERD said the section proposed to be struck out did not compel the payment of a dividend of 33 per cent. before a discharge was granted, but it provided that if an insolvent failed to pay that amount he was compelled to account for the deficiency to the satisfaction of a Judge before he obtained a discharge. The 56th section provides that an insolvent should not obtain a discharge if he was guilty of fraud, and that point would have to be decided by the Judge. He held that the 58th section was the best section in the Bill, and if any amendment would be made, it should be in the direction of compelling an insolvent to pay a hundred cents on the dollar, and he would therefore vote against the amendment.

Mr. LANGLOIS said that creditors who were traders were interested in debtors making a composition, for insolvent traders shortly afterwards resumed business, and the creditors were recouped in the shape of additional trade. Non-traders did not occupy the same position, and the clause was framed in their interest.

Mr. THOMPSON (Cariboo) supported the amendment, and protested against such large discretionary power being placed in the hands of Judges, who, like all men, were fallible, and entertained prejudices against certain parties. If the Dominion should have an Insolvent Law, there should be no dividend specified to be paid by the insolvent, and when a bankrupt was compelled to come forward and transfer all his property to his creditors, he was entitled to his discharge.

Mr. RICHARD thought the question had not been properly put by the hon. Mr. Young

member for Stanstead in his amendment. The only question which the Judge had to decide in considering an application for a discharge, was whether the insolvent had been honest or dishonest. If the insolvent had been honest, no matter if his assets only realized five cents on the dollar, he would be entitled to his discharge; but if he were proved dishonest and paid ninety cents, he would not be entitled to it. The clause was not a limiting, but a protective one. If an insolvent paid thirty-three cents dividend the presumption was that he had been honest in business, and the burden of proof would rest on the creditors to show that he had not so acted and was not entitled to a discharge. If, however, the debtor paid a smaller dividend, the burden of proof fell upon him to show that he had acted honestly, and if that was proved he would obtain his discharge. The clause would therefore operate as a definite guarantee to creditors for the honesty of debtors.

Mr. DEVLIN, as seconder of the amendment, desired to state that the commercial opinion of Montreal was against the clause as it appeared in the Bill, and it had been opposed by the President and Vice-President of the Board of Trade of that city. He was surprised at the anxiety manifested by some hon. members to have the clause passed, because clauses 56 and 57 appeared to provide sufficient safeguards for creditors. The 58th clause was opposed to the true interests of the people, for it placed the insolvent at the mercy of the Judge. In 1871 the total liabilities | of insolvents in England amounted to $17,000,000 and the assets to $3,000,000, showing an average dividend of three shillings and sixpence on the pound sterling, and it was unwise, therefore, to provide in the Act for insolvents in this country to pay so large a dividend as 33 cents on the dollar.

It being six o'clock, the Speaker left the chiafr.

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AFTER RECESS,

Mr. DEVLIN said he did not desire to occupy the attention of the House longer with a debate upon the clause he had seconded. He believed the question was fully understood by hon. members, and that the feeling was that there should be no further debate upon the question.

Mr. COLBY moved that the Bill be referred back to a Committee of the Whole, with instructions to amend the 58th section by striking out "33" and inserting "10" in place thereof. He hoped the House would recollect that this Bill was an Act. which applied to traders strictly. It was a question as between traders of the creditor class, who, as a rule, were the wholesale merchants, and the debtor class of traders, who, as a rule, were retailers. Formerly under the law on our Statute Books it was the privilege of the debtor trader when he found himself in failing circumstances to make a voluntary assignment of his estate and compel the creditors to accept it. Under that law it would have been logical, fit, and proper where a debtor used that privilege to pay the trader a certain percentage. The law was changed, however, and that privilege to the retail trader was taken away. It was now a stringent law for the use and benefit of the wholesale trader for winding up the retail trader's estate. He did not think it should be made too stringent on the retail traders of

Mr. Colby.

the country. The rosponsibily of action being now in the hands of the wholesale trader, if he neglected to take advantage of an early opportunity-if he chose by his own negligence to let the estate drift into a position where it could not a small percentage, pay more than it was at his own risk. The estate under this Bill would be taken out of the hands of the debtor, and wound up by the creditors without consulting the individual who of all others could best assist in making the most of it. He did not think that any percentage should be fixed, but since the principle had been affirmed he should reduce it to a lower amount than thirtythree per cent. He regretted to see that the cost of winding up an estate under this Bill was not to be lessened, but was to be fully as great as under the existing law. He knew instances in which estates of large magnitude had been entirely wasted by the process of winding them up. In one case an estate valued at $13,000 was wound up. The father of the debtor offered ninety cents on the dollar-this was refused, and the estate was thrown into insolvency and though valued at $13,000, did not pay the cost of winding it up. Instead of ninety cents the creditors got nothing at all. He thought the proposition he now submitted to the House would perhaps meet the views of the hon. gentleman better than his former amendment on which he had hoped a vote would be taken.

Mr. COLIN MACDOUGALL said he would have been better pleased if the clause had been struck out altogether, but that could not be done now, and he would support the next best thing, which was to reduce the percentage as much as possible, The voluntary clause being done away with and a compulsory one substituted this proposition of the hon. member for Stanstead was one which ought to meet with the approval of this House. Down to thirty-three per cent., it was incumbent upon the creditor to show cause why the debtor should not get his discharge, but below that amount the burden of proof as to the cause of the deficiency was thrown on the debtor; and if it should happen after all the expense of winding up the estate that it did not pay thirty-three cents on the dollar he could not get his discharge. He would therefore support the amendment.