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six calendar months next immediately preceding the time of filing his petition within the district of such County Court to which he shall prefer his petition. The jurisdiction of the Commissioners of the Court of Bankruptcy in matters of insolvency was taken away, and jurisdiction was given in all matters of insolvency to the judges of the County Courts. (See 10 & 11 Vict., c. 102, ss. 4 and 6.)
These observations are equally pertinent now as when they were published, and are entitled to great weight and consideration; and it is also important to bear in mind that, assuming the distinctions between insolvency and bankruptcy are to be abolished, concurrent jurisdiction should either be given to the county courts in all cases, or provision should be made for the county courts to retain jurisdiction to the extent to which they now possess it under the Protection Acts.
In considering what the proposed court should be, Mr. Bond has some sensible remarks in pp. 9 and 10 of his publication:
It must be local, and it should be stationary. The county courts are already overworked; they sit at different places; there is no appeal from the exercise of their jurisdiction in insolvency; and their machinery is not adapted to administrative purposes. That of the courts of bankruptcy, with some alterations, may be well fitted for the objects in view. Those courts have at present scarcely anything to do. With the present staff, one Commissioner might sit every day at the same place, so as to be at all times accessible (which, however, is unfortunately far from being the case at present); and this is of the utmost importance in very many cases where prompt action is required. With such amendments as may be found requisite, they are, therefore, the most fitting tribunals to undertake that which, according to the plan which has been faintly shadowed out, would become the sole primary jurisdiction in all matters of insolvency, and by giving it to them no expense would be incurred either in new appointments or retiring pensions. It is not necessary to weary you with suggestions as to the amendment of process. Suffice it to say, that it should be as simple as is consistent with perspicuity and the preservation of a proper record of the proceedings of the court, and that it is, for obvious reasons, desirable to secure as much of uniformity as possible.
II. Then as to control, which is the second point to which it has been proposed to direct your attention. When the property of an insolvent debtor has been taken from him by operation of law, to be distributed, as far as it will go, among his creditors, it becomes theirs; and they, by themselves, or by means of trustees or assignees chosen by themselves, ought to have the control of it, instead of, as now, being thought officious and sometimes snubbed, if they presume to make an inquiry about it. Experience has long taught me that the whole official assignee system is an expensive mistake, and the sooner
it is put an end to the better. There can be no doubt that under the old system some wrong was done. But it suited the purpose of the hour to magnify the amount of it; and even then it was insufficient to justify the violent transition which took place from one extreme to the other, under the superintendence of a judge, appointed by the crown, and sitting daily in open court; and not of commissioners, nominated by the parties themselves, and meeting only when convened by them, in a room at an inn, its repetition, if not impossible, would at least be as unfrequent as are the losses by the misconduct of official assignees, or of trustees under assignments, and the total extent of mischief probably less.
The writer here approves of localisation, but is satisfied with the existing courts, which, nevertheless, in our judgment are insufficient; for there are but seven bankruptcy districts throughout England. One great objection to the county courts is, doubtless, their not being stationary, and this is a strong reason for not giving them the exclusive jurisdiction; but we do not see that it is conclusive against their possessing concurrent jurisdiction, which would be a great convenience in the populous manufacturing districts, where the county court circuits are not large, and the judges are sitting almost daily at one of several places within a radius of eight or ten miles. With reference to the machinery or staff of the county courts, we think there would be no great difficulty in adapting it to bankruptcy matters, if the proposed alterations, by which the administrative portion of the business will be intrusted to the creditors, or their assignees, be carried out. Mr. Rayner thus states the various propositions which have been made with reference to this subject:
1. That the existing district courts should be continued as at present, debtors owing less than £300 being permitted, or rather required, to file their own petitions for adjudication in the county courts where they reside.
2. That the district court should be retained, the commissioners going circuit to all towns having 20,000 inhabitants.
3. That the district courts should be continued, the county courts having concurrent jurisdiction in cases where the debts do not exceed £1000.
4. That the district courts should continue to have exclusive jurisdiction to adjudicate, a majority in value of the creditors being empowered, at their first meeting, to remove the proceedings into the most convenient county court, provision being also made for debtors to
petition either the bankruptcy or county court for an arrangement under judicial superintendence.
5. That the district courts should be entirely abolished, and the jurisdiction transferred to the county courts sitting in such places, within their circuits, as may be fixed by order in council; the twelve country bankruptcy commissioners, and their registrars, being appointed judges and registrars of county courts, at their present salaries, and attached to the twelve county courts having the largest number of plaints.
The first proposition is contained in the government bill, and the fourth is the plan provided by Lord John Russell's bill. Mr. Rayner then continues:
After considering these various propositions, we think the best arrangement as to the jurisdiction would be, to restrict the exclusive jurisdiction of the present district courts to the county court circuits in which they are situate, and to give concurrent jurisdiction in all other cases to the county courts in other circuits within such districts. This plan would possess the same advantage which distinguishes Lord John Russell's bill, and would set itself right if the county courts were found inefficient; and it would not increase the business of the county courts in the twelve large towns in which the district courts are held. Its adoption would, in many cases, save the expense of travelling a considerable distance to attend adjudication and first meeting, and, practically, the effect would be, that petitions for adjudication would be presented to the county courts in all cases where, under Lord John Russell's Bill, the proceedings would be removed at the first meeting of creditors; and we do not think that the county court judges are less qualified to adjudicate than to determine questions arising subsequent to adjudication.
The effect of this would be to give the creditor or debtor filing the petition the option of going to the district bankruptcy court or county court in every case, except where the debtor resides or carries on business within those county court circuits in which the district courts are situate; and in the latter case the bankruptcy courts would retain exclusive jurisdiction. We see no objection to this, and we think in many cases considerable expense in obtaining adjudication might be saved by it; but if it be adopted, full power should be given to the district courts to remove the proceedings from the county court to the district court, or vice versa, or from one county court to another when it becomes necessary to do so, in order to secure a full investigation, or for the convenience of a considerable majority of creditors.
VOL. VII. NO. XIII.
If this plan be not adopted, there should be added to Lord John Russell's bill clauses somewhat similar to the 49th and 51st sections of the government bill, giving the county courts concurrent jurisdiction to adjudicate where the debts do not exceed £300 or £400. With this addition Lord John Russell's bill will probably be satisfactory to the commercial community in towns which do not possess bankruptcy courts at present. Here the inconvenience of attending the present courts is so strongly felt, that no measure will be acceptable which does not at the least give concurrent jurisdiction to the county courts after adjudication in the mode provided by this bill.
The question as to the propriety of retaining, in all cases, the service of the official assignee after the choice of trade assignee, is, as we have before intimated, materially affected by the provisions to which we have just alluded; and we do not see how, independent of other considerations, the present system can be conveniently continued if the creditors are allowed to remove the proceedings into the county court which is most convenient to them.
It is by parties who are concerned in cases which will be removed, that the strongest objections to the compulsory employment of official assignees are felt; and it will be of little use to allow them to transfer the proceedings, if they are compelled to employ an official assignee attached to the district court.
We do not wish, however, to consider the question upon this narrow ground alone.
Mr. Bond instances as one of the greatest evils of the present system-"That so much of the management and control of an insolvent estate is given to officials, and too little to the creditors or their trustees-the trade assignees." And again he says, "that the official assignee system is an expensive mistake, and the sooner it is put an end to the better."
Mr. Rayner takes the same ground at p. 15 of the useful reprint of his able articles in the Solicitors' Journal:
The most important question arises with reference to the future position and duties of the official assignee; but we need not discuss
this subject at any great length, as both the bills before parliament provide, in effect, that the creditors may, at their option, continue or determine the official assignee's services at the first meeting. The entire abolition of the office has been advocated; but in this we cannot concur, as it is most important that there should be an officer of the court ready to step into the possession of the bankrupt's estate the moment after a ljudication. The official assignees are especially fitted to perform this duty, for which it is proposed to pay them £500 a-year, and such of them as are qualified and willing to act efficiently as trade assignees, will doubtless be elected in most cases by the creditors. It has been objected that the salary proposed is too small; but we understand that when the first batch of official assignees was appointed, they had no expectation of receiving more than £500 per annum for their whole duties as now performed, and we feel sure that nothing but their own disqualification or inaptitude for business will interfere to prevent their realizing incomes under the new act, equal to those now received by them.
At the first meeting the creditors are fairly entitled to choose a trustee or assignee, for the winding up and distribution of the estate, which is in reality their own, and we do not think it consistent with any sound principle to deprive them of this right. The bankrupt's property and assets can be more economically realized by such an assignee than by an official of the court, and nothing is easier than to make provisions for securing the estate, and its speedy administration. Under the old system these provisions did not exist, but we have never yet heard it contended that the estate was not more effectually and economically realized by trade assignees under the old law, than by an official assignee under the present system. The only inconvenience to be apprehended under Lord John Russell's bill, is, that it may give rise to a good deal of canvassing or touting, by those who are eligible to be appointed creditors' assignees, which we understand is the case in Scotland, but this may probably be avoided by electing the inspectors first (who would usually be the three largest creditors) and allowing them to choose the assignee. Great care must, however, be taken not to disturb the provisions for securing and speedily administering the estate, as it will furnish the strongest argument to the supporters of the present system, if the bill be in the slightest degree defective in this respect.
It appears to us that the most important aspect of the question is this: Is it, or is it not, a sound principle of legislation, to insist upon the creditors employing an officer of the court, to get in and distribute assets which are in reality their own, and which they consider can be as effectually and economically realized and divided by a trustee or assignee of their own choosing? Experience should decide the point. The authors we have quoted think the principle bad, and that it would be just as reasonable