NOTES BY COLONUS.

Clutha Leader, Volume XVII, Issue 834, 11 July 1890, Page 3

NOTES BY COLONUS.

TIIE BANKRUPTCY LAW. The state of the law of bankruptcy in Ne.w Zealand <9eern.s at the' Ipreseht time to be in a . very .unsatisfactory condition. I don't know whether we are worse off in this respect tliaivother British » coloiiies or, •■ tho i United Kingdom. I remember about 30 years or so ago, the law of bankruptcy was in a very unsettled state in England. There seemed to be a new bankruptcy law about every session of Parliament. A new bankruptcy act appeared to., .come out every year, like a sort of periodical, Judging from the constant failures to legislate satisfactorily on the subject, it would , seem to-^be almost beyond" human power, to settle the law of bankruptcy on a solid' arid ; permanent foundation. ,\ see Mr W. I)pwnie Stewart, M.H.R., the well-known and experienced lawyer of Bun'edin^in his professional address , at, old , Knox Church, said '.— ' For the last 25 yeaite the legislature had- been tihk6ririg> ; at the bankruptcy laws, and the last state of them seems to be worse than the first. Unless . some radical changes were made, as Mr Reid had said, there would not be room! for an r h'onest man here. The Bankruptcy Act was, absolutely un workable. " The Act was a complete botch,- and an , entirely' s newone was tequired.' The particular occasion Which has brought the) law "6f bankruptcy into prominence at present appears to be the failure of Tlioiri'as 5 Lindsay, of Palmerston, stock. dealer; Certainly it appears a bad ..case, as far as ' appears ' in print. Total liabilities,' L 2575; 7s 7d ; and .assets L 172 .6s, : [7d — about equivalent to nil. Mr Donald Reid, one of the chief creditors, was 'extremely angry with the 'bankrupt, as well he might be, smarting under such a heavy loss. Donald Reid and Co. were the largest creditors, and appear to have supplied the. bankrupt with, live stock to a large amount, their debt amounting to L 1077 16 9d-happa,rently a dead loss. Mr Reid seemed at tho ; meeting toinsumate that the action oi the bankrupt was no better, or rather 1 worse, than that of a highwayman. The cases, however, are' not" analogous. Of course if a man. obtains possession of stock or goods with the full intention of never paying for thea\ he is morally no better than a pickpocket or a highwayman: In the cases, however, of a highway .robber, or a pickpocket or one who obtains money or goods under an elaborate scheme of false pretence, the fraudulent intent, is, evident, but when a man obtains' credit, as Mr Reid described, ib, by a fair face and a good reputation, and alleging he was doing a good business, the fraudulent intent is not patent and apparent, or such' as the law recognises as criminal. It is impossible to read the mind. of the defaulter, or be sura whether or hot he intended to defraud. Of course if there be an elaborate scheme of false pretence! tho offender' renders himself liable to bo criminal ly' - : dealt with, but a fair face, good reputation, or even' ah assertion of doing a good business, can hardly be considered . a false pretence in tho meaning, of tho criminal law. In all thes'o cases of clebtor~and cr/edltor it is to. bo observed, that where the creditor suft.ers # tbrough the default of the debtor, the creditor is, in legal phraseology, a parliccps criminis f . he is a party to his own wrong. People are not generally under an absolute necessity to give credit or ' hand over goods or deliver stock except on payment on delivery. Of course it may be said that storekeepers or stockagents can hardly. do any business without giving credit. ' There may be somo truth iii that, "but such people "might bo a good deal more careful than thby often are as to what amount- ajid to whom they give credit. By being loss ready to give credit they might do less business, but -they would, do a, safer-. business and be' less liable to Toss.' There is, hc-wever, so much competition in business, and sucK an eager desire J--to do a good . business, and so much fear of offending customers, that trad-* ing people are apt ' to be hot nearly as cautious as: they should be. This consideration as to the extent to which creditors are themselves ambhdaVile' for j losses they incur, should l.c an objection to enacting a very harsh law of bankruptcy, such a law as would be cruel and severe on . cbmpara'tiVely honest debtors, who may be the victims iof unfbrseeh misfortune. On tlie other 1 hand, when we consider how difficult it is for trading people who wish to do anything like a business to avoid giving credit, the law should not be too lax on people who take advantage of this : readiness to give credit, to obtain an amount of credit to which they are aware they are not entitled, and the obtaining, of which 7 they know greatly : : jeopardises the giver of it. Reckless ' trading is greatly to be deplored, . and, should be severely condemned, whether' the recklessness consist in > an overreadiness to give credit or to take : credit.