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Full text of "The law reports"


THE LIBRARY 

OF 

THE UNIVERSITY 
OF CALIFORNIA 

LOS ANGELES 



SCHOOL OF LAW 



Tor, VI. Ex. 



THE 



INCORPORATED COUNCIL OF LAW REPORTING 



FOB 



ENGLAND AND WALES. 



of tfjt Council. 
Chairman SIR EOUNDELL PALMER, Knt, M.P., Q.C. 

EX-OFFICIO MEMBERS. 

THE ATTORNEY-GENERAL, SIR E. P. COLLIER, Knt., M.P. 
THE SOLICITOR-GENERAL, SIR J. D. COLERIDGE. Knt., M.P. 
THE QUEEN'S ADVOCATE-GENERAL, SIR TRAVERS Twiss, Kut. 



ELECTED MEMBERS. 
MR. SERJEANT O'BRIEN 
MR. SERJEANT PULLING 

SIR KOUNDELL PALMER, Knt., M.P., Q.C. 
E. P. AMPHLETT, Esq., M.P., Q.C. 

WILLIAM FORSYTH, Esq., Q.C. 
H. WARWICK COLE, Esq., Q.C. 

T. W. GREENE, Esq., Q.C. 
JOHN GRAY, Esq., Q.C. 

JOHN A. EUSSELL, Esq., Q.C. 
WILLIAM CRACROFT FOOKS, .Esq., Q.C. 



Serjeants' Inn. 
Lincoln's Inn. 
Inner Temple. 
Middle Temple. 
Gray's Inn. 



WILLIAM WILLIAMS, Esq. (Firm Messrs. Currie and 
Williams), Lincoln's Inn Fields 

W. S. COOKSON, Esq. (Firm Messrs. Cookson, Waine- 
wright, & Pennington), 6, New Square, Lincoln's Inn 



Incorporated 
Law Society. 



Secretary JAMES THOMAS HOPWOOD, Esq., 3, New Square, 
Lincoln's Inn. 



THE 



LAW REPORTS. 



Court of 



REPOKTED BY 

JAMES ANSTIE AND ARTHUR CHARLES, 

BARRISTERS AT-L A w. 



EDITED BY 

JAMES REDFOORD BULWER, Q.C. 



VOL. VI. 
FROM MICHAELMAS TERM, 1870, TO TRINITY TERM, 1871, 

BOTH INCLUSIVE. 

XXXIV VICTORIA. 



LONDON: 

|)rntteb for the |itrorporatcb Council of afo ^rporting for (bnglunfc unb 23l:ilcs 
BY WILLIAM CLOWES AND SONS, 

' DUKE 8TKEET, 8TAMFOKD STREET; AND 14, CHARING CROSS. 

PUBLISHING OFFICE, 51, CAREY STREET, LINCOLN'S INN, W.C, 



JUDGES 



OF 



THE COURT OF EXCHEQUER, 

XXXIII VICTOKIA. 



The Eight Hon. Sir FITZROY KELLY, Knt., C.B. 

Sir SAMUEL MARTIN, Knt. 

Sir GEORGE WILLIAM WILSHERE BRAMWELL, Knt. 

Sir WILLIAM FRY CHANNELL, Knt. 

Sir GILLERY PIGOTT, Knt. 

Sir ANTHONY CLEASBY, Knt. 

ATTORNEY GENERAL: 

Sir ROBERT PORRETT COLLIER, Knt. 

SOLICITOR GENERAL : 

Sir JOHN DUKE COLERIDGE, Knt. 



708044 



ERRATA. 



Page Line For ' Read 

32 3 " 25 & 26 Viet. c. 134 " .. " 24 & 25 Viet. c. 134 " 

161 21 "contrived" .. "construed"' 

167 32 "Lowndes"' .. "Lowe's" 

168 note (1) " 9 Eq.," .. " 10 Eq." 
178 17 "broker" .. "brother" 

180 30 " settled for up to that " settled ; for up to that 

time ;" .. time " 

308 22 "5&6Wm. 4," .. "5 & 6 Viet.," 

243 To Kendal v. Wood add foot-note, " Decide 1 in the sittings after Easte: 
Term, 1870." 



TABLE OF CASES REPORTED 



IN THIS VOLUME. 



A. 



PAGE 



Atkinson v. Newcastle and Gates- 
head Waterworks Company 404 
Attorney-General v. Black 78, 308 
v. Gilpin 193 

B. 

Bailey v. Johnson 279 

Bain v. Fothergill 59 
Beeson, Duncan v. 268 n. (1) 
Birmingham and Staffordshire 

Gas Company v. Ratcliff 224 
Black, Attorney-General v. 78, 308 

Briggs, Robinson v. 1 

Borrows v. Ellison 128 
British and American Tele- 
graph Company, Limited v. 

Colson 108 

Brook v. Hook 89 

Brookman v. Smith 291 



Byrne v. Schiller 



20, 319 



c. 



Carstairs v. Taylor 217 

Chapman, Stevens v. 213 

Clarke, Southampton Steam 

Colliery Company v. (Ex. Ch.) 53 
Colson, British and American 

Telegraph Company v. 108 



PAGE 



Commissioners of Inland Re- 
venue, Freeman v. 101 
Cross v. Pagliano 9 



D. 

Davison, Robinson v. 
Death v. Harrison 
De Lancey v. Reg. 
De Wette, Forshaw v. 
Duncan v. Beeson 
Hill 



v. 



269 
15 

286 

200 
268, n. (1) 

255 
46 



Durham v. Spence 

E. 

Ellison, Burrows v. 128 

Emmerson, Johnson v. 329 

F. 

Forshaw t>. De Wette 200 

Fothergill, Bain v. 59 

Freeman v. Commissioners of 

Inland Revenue 101 

G. 

Gilpin, Attorney-General v. 193 
Gladstone v. Padwick 203 

Griffith, Morgan v. 70 



TABLE OF CASES EEPOETED. 



[Ex. VOL. VI. 



H. 



PAGE 

15 

7 
255 



Harrison, Death v. 
Henkel v. Pape 
Hill, Duncan v. 

Holmes v. North Eastern Kail- 
way Company (Ex. Ch.) 123 
Hook, Brook v." 89 
Howard v. Lovegrove 43 
Hunt, White v. 32 

J. 

James, Walter v. 124 

Johnson, Bailey v. 279 

Johnson v. Emerson 329 

K. 

Kendal v. Wood (Ex. Ch.) 243 
Kent v. Thomas 312 

L. 

London and South Western 

Eailway Company, Milburn v. 4 
Lovegrove, Howard v. 43 



M. 



Coal 



25 



Makin v. Watkinson 

Marsh, Sankey Brook 
Company v. 

Maxted v. Paine (Second Ac- 
tion) (Ex. Ch.) 132 

Milburn v. London and South 
Western Eailway Company 

M'lvor, M'Keane v. 

M'Keane v. M'lvor 

Moody v. Steward 

Morgan, Appellant 
Eespondent 



Griffith, 



185 



4 

36 
36 
35 



70 



N 



Newcastle and Gateshead 
Waterworks Company, At- 
kinson v. 404 

North Eastern Eailway Com- 
pany, Holmes v. (Ex. Ch.) 123 



0. 

PAGE 

Oastler, Watling v. 73 

P. 

Padwick, Gladstone v. 203 

Pagliano, Cross v. 9 

Paine, Maxted v. (Ex. Ch.) 132 

Pape, Henkel v. 7 

Pickwell v. Spencer 190 

Pinder, Slater v. 228 

E. 

Eatcliff, Birmingham and Staf- 
fordshire Gas Company v. 224 
Keg., De Lancey v. 286 
Eobinson v. Briggs 1" 
v. Davison 269 



S. 

Sankey Brook Coal Company 

v. Marsh 185 

Schiller, Byrne v. 20, 319 

Slater v. Pinder 228 

Smith, Brookmau v. 291 

Southampton Steam Colliery 

Company v. Clarke (Ex. Ch.) 53 

Spence, Durham v. 46 

Spencer, Pickwell v. 190 

Stevens v. Chapman 213 

Steward, Moody v. 35 

T. 

Taylor, Carstairs v. 217 

Thomas, Kent v. 312 

Thornewell v. Wigner 87 

w. 

Walter v. James 124 

Watkinson, Makin v. 25 

Watling v. Oastler 73 

White v. Hunt 32 

Wigner, Thornewell v. 87 
Wood, Kendal v. (Ex. Ch.), 243 



TABLE OF CASES CITED. 



Abrams v. Winshup . 
Adair, Ex parte . 
Adams v. Lindsell . 
Adkins v. Farrington 
Allanson v. Atkinson 
Allen v. Greaves . 
' v. Morrison 
Allhusen v. Malgarejo 
Alsop v. Price 
Alston v. Grant . 
Andrew v. Moorhouse 
Ashpitel v. Bryan 
Attorney-General v. Jones 
v. Vigor 



3 Russ. 350 . 
24 L. T. (N.S.) 198 
1 B. & A. 681 . 
5 H. & N. 586 . 
1 M. & S. 583 . 
Law Rep. 5 Q. B. 478 
8 B. & C. 565 . 
Law Rep. 3 Q. B. 340 
1 Doug. 160 . 
3 E. & B. 128 . 
5 Taunt. 435 . 
3 B. & S. at p. 492 
1 Mac. & G. 574 
8 Ves. 256 



PAGE 
. 192 

281, 283 
. 122 
. 314 
. 286 
. 162 
. 103 

47, 49, 51 
. 314 
. 219 
. 323 

91, 92, 97 
. 82 
, 305 



B. 



Bailey v. Johnson 

Baker v. Jardine .... 
Balme v. Hutton .... 
Bank of Hindustan v. Kintrea . 
Barber v. Fox .... 
Barker, Ex parte .... 
Barnard v. Pilsworth 
Barwis, Ex parte 
Beaujolais Wine Company, In re 
Bell v. Twentyman 

Belshaw v. Bush .... 
Benner v. Equitable Safety Insurance) 
Company . . . . J 

Betty Smith's Trusts, In re 
Bird v. Brown .... 
Blades v. Arundale 

Blakey v. Dixon .... 
Boast v. Firth . . ... 

Bodenham v. Hoskins 
Boodle v. Davies .... 
Boorman v. J^ash 
Brett v. Jackspn .... 



Law Rep. 6 Ex. 279 . . 377 

13 East. p. 235, n. . . 103 

9 Bing. 471 . . .232 

Law Rep. 5 Ch. Ap. 95 . 133 

2 Wins. Satmd. at p. 137, k. . 246 

9 Ves. 110 . . . 31. r > 

6 C. B. 698, n. . . 198 

6 D. M. & G. 762 . . 315 

Law Rep. 3 Ch. Ap. 15 .187 

I Q. B. 766 . 219, 220, 222 

II C. B. 191 . . 125, 126 

6 Allen R. 222 . . 322 

Law Rep. 1 Eq. 79 . . 303 

4 Ex. 7G, at pp. 798-9 91, 126 

1 M. & S. 711 . 208, 211 

2 B. & P. 321 . . . 322 
Law Rep. 5 C. P. 1 . 272, 278 

2 D. M. & G. 903 . 281, 283 

3 A. & E. 200 . 214, 215 
9 B. & C. 145 . . . 315 
Law Rep. 4 C. P. 259 . . ol(i 



TABLE OF CASES CITED. 



[Ex. VOL. \'I. 



Brighton Arcade Company v. Dowlim 

Brook, Ex parte . 

Brookman's Trusts, In re 

Brown rigg v. Eae 

Bullock v. Bennett 

Burgess v. Wheate 



Law Rep. 3 C. P. 175 
6 D. M. & G. 771 



PAGE 

186, 187, 188 
315 



Law Rep. 5 Ch. Ap. 182 . 302 

5 Ex. 489 .'. . 246 

7 De G. M. & G. 283 . . 297 

1 W. Bl. 123 . , 306 



C. 



Calthorpe v. Gough 

Carr v. Wallachian Petroleum Company,) 
Limited . . . . | 

Carter v. Warne .... 
Cary v. Dawson .... 

Castellan v. Hobson . . .-j 

Chaplin a. Rogers 

Chapman v. Cottrell 

Charles v. Altin .... 

Cliauntler v. Robinson 

Clark v. Cort .... 

Clifford, Lord, v. Watts . 

Clifton v. Furley 

Cochrane v. Green 

Cockburn v. Alexander . 

Cockle v. London and South Western 

Railway Company 

Cole v. Davies .... 
v. Meek .... 
Cole's Case 



Coles v. Bristowe . 

Cook v. Lister 
Cooper v. Harding 

Copeland v. North Eastern Railway Com- 
pany .... 

v. Stephens 

Corbett, In re 

Cotterell v. Jones 

Cotton v. James . 

Couch v. Steel 

Coward v. Gregory 

Cowell v. Amman Colliery Company 

Craven v. Smith . . . 

Cruse v. Paine 
Cutler v. Southern 



3 Bro. C. C. 395 
Law Rep. 1 C. P. 636 

1 Mood. & M. 479 
Law Rep. 4 Q. B. 568 
Law Rep. 10 Eq. 47 

1 East, 192 

3 H. & C. 865 . 
15 C. B. 46 . 

4 Ex. 163 

Cr. & Ph. 154 . 
Law Rep. 5 C. P. 577 
7 H. & JST. 783 . 
9 C. B. (N.S.) 448 
6 C. B. 791 



. 303 
22 

33, 34 

. 314 

133, 139, 140, 
150, 168 

. 208 

. 47 

. 324 

. 219 

. 281 

. 274 

. 88 

. 281 

. 54 

. 403 



Law Rep. 5 C. P. 457 

1 Ld. Raym. 724 208, 210, 213 

15 C. B. (N.S.) 795 . 54, 58 

Cro. Eliz. 97 . . .27 

Law Rep. 4 Ch. Ap. 3, 6 ; Law Rep. 
6 Eq. 149,152 '136,142,152, 

153, 156,158,159,161, 169, 
170, 173, 174, 175, 177, 179 

13 C. B. (N..S.) 543, at p. 594 125 
7 Q. B. 928 . . .380 

-) 6 E. & B. 277 ; 2 Jur. (KS.) 
.) 1162 . . 103,104 

I B. & A. 593 . . . 33 
4 H. & N. 452 . . . 88 

II C. B. 713 . . . 44 
1 B. & Ad. 128 . . 343 
3 E. & B. 402 . . 407, 409 
Law Rep. 2 C. P. 153 . . 27 
6 B. & S. 333 . 201, 202, 215 
Law Rep. 4 Ex. 146 . 35, 273 



Law Rep. 4 Ch. A p. 441 : Law Rep. 

6 Eq. 641 . '14: 
2 Wms. Saund. 62, n. (4) 



D. 



.Daniels v. Fielding 
Davis v. Williams 
Day, Ex parte 



1 6 M. & W. 200 
13 East, 232 . 
7 Ves. 301 



380 
103 
315 



Ex. VOL. VI.] 



TABLE OF CASES CITED. 



Xlll 



De Lancey's Succession, In the Matter OH 

De Silvale v. Kendall 

Doo v. Brabant .... 

d. Hartwright v. Fereday 

d. Thorn v. Phillips . . . 

d. "Willey v. Holmes . 

Doe d. Evers v. Challis . 

Duff v. Budd .... 

Duncan v. Topham . . . \ 

Dunlop v. Higgins . . X 

Dyneu v. Leach .... 



Law Hep. 4 Ex. 345 ; 

5 Ex. 102 
4 M. & S. 37 . 
4 T. 11. 706 
12 A. & E. 23 . 
3 B. & Ad. 753 
8 T. R. 1 

20 L. J. (Q.B.) 113 
3 B. & B. 177 . 
8 C. B. 225 ; 7 C. B. 

1 H. L. C. 381 . 
26 L. J. (Ex.) 221 



PACK 

Law Hep. 

286 
. 323 
206, 303 
. 103 
. 102 
. 191 
. 291) 
. 39 

295 109, 110, 

115, 120, 121 

108,111,112, 

113, 115, 119 

75 



E. 



Edwards v. Scarsbrook 
Emery v. Parry . 
Engei v. Fitch 
Evers v. Challis . 



3 B. & S. 280 



232, 235, 236, 
241, 242 

TO. 



17 L. T. (X.S). 152 . 

Law Rep. 3 Q. B. 314 ; 4 Q. B. 

659 64. 67 

7 H. L. C. 531 296, 297, 299, 305 



r. 



Farley v, Danks . 
Farrow v. Wilson 
Fife v. Round 
Finucane's Case . 
Fisher, Ex parte . 
Fletcher's Case . 

Fletcher v. Pynsett 

Flureau v. Thornhill 

Follett v. Hoppe . 
Forster v. Wilson 
Fortescue v. Pat on 
Francis v. Cockrell 
Frayes v. Worms 
Freeman v. Cooke 
Furber v. Sturmy 



4 E. * B. 493 

Law Rep. 4 C. P. 744 

6 W. R. 282 . 

17 W. R. 813 . 

Buck, 188 

37 L. J. (Cli.) at p. 50 



342, 



343, 3 1 9 
. 274 
. 47 

109, 121 

. 315 

110 



Cro. Jac. 102 ; Roll. Abr. Cund. 

C. 1, 2, 3, 4 
2 W. Bl. 1078 



5 C. B. 226 . 
12 M. & W. 191 
3 L. T. (N.S.) 268 
Law Rep. 5 Q. B. 501 
19 C. B. (X.S.) 159 

2 Ex. 654, 663 

3 H. & N. 521 . 



29 

59, 64, 65, 66, 67, 
68,69 
. 286 
. 281 
. 88 
218, 220 
. 323 
!>7, 171 



88 



G. 



Garside v. Trent and Mersey Navigation 

Gawler v. Chaplin 

Giles v. Grover . 

Goodson v. Forbes 

Gordon v. Ellis . 

Goss v. Lord Nugent 

Grace r. Morgan . 

Gray iv West . 



4 T. R. 581 . . . 40 
2 Ex. 503 . ' . . 208 
9 Bing. 128 . . L'30, 232 

6 Taunt. 171 . . . 103 

7 M. & 0. 607 . . . LMG 

5 P.. & Ad. 58 . . . 72 
2 P.iim. X. C.-534 . . 44 
Law Rep. 4 Q. B. 175 . . 273 



TABLE OF CASES CITED. 



[Ex. VOL. VI. 



Green v. Bicknell 
Cribble v. Buchanan 



Grissell v. Bristowe 



Grissell's Case 
Gross, In re 
Gurin's Case 



PAGE 

8 Ad. & E. 701 . . 315 
18 C. B. 691 . . 214, 215, 217 
3 Pick. E. 20 . . . 321 
Law Rep. 4 C. P. 36 ; Law Rep. 
3 C. P. 112 133, 136, 142, 153, 
158, 159, 161, 167, 168, 173, 
175, 181, 182, 183, 184, 258, 
261, 262, 263, 264 

Law Rep. 1 Ch. Ap. 528 . 187 
24 L. T. (KS.) 198 . 281, 283 
Law Rep. 3 Ch. Ap. 40 .116 



H. 



Hasedorn v. Oliverson 

Hall v.Wright . 

Harris v. Ferrand 

Hart v. Alexander 

Harvey v. Johnston . . 

Hastie's Case . 

Haul v. Hemings . 

Hawkins v. Maltby . . . 

Heane v. Rogers . 

Hebb'sCase . 

Heffield v. Meadows 

Heilbut v. Nevill 

Heslop v. Chapman 

Heugh v. London and North Western Rail- 
way Company . 

Hicks v. Shield ', 

Higgs v. Northern Assam Tea Company . 
Hocking v. Acraman . . . 

Hodgkinson v. Kelly 
Holmes v. Clarke . . . 

v. Craddock 

v. Twist . 

Hopkins v. Grazebrook . 

v. Thomas 

How v. Kennett . 
Humble v. Langston 
Hutton v. Cooper 



2 M. & S. 485 . . . 92 

E. B. & E. 746 272, 274, 277 

Hardr. 41 . . .26 

2 M. & W. 484 . . 157 
6 C. B. 295 . . 110, 115 
Law Rep. 4 Ch. Ap. 274 . 314 
1 Roll. Rep. 285 . . 29 
Law Rep. 3 Ch. Ap. 188 134, 140, 171 
9 B. & C. 577 . . . 92 
Law Rep. 4 Eq. 9 110, 117, 121 
Law Rep. 4 C. P. 595 . . 91 
Law Rep. 4 C. P. 354 ; Law Rep. 

5 C. P. 478 246 

23 L. J. (Q.B.) 49 . 351, 394 

Law Rep. 5 Ex. 51 .42 

7E.&B.633 . 22,23,24,323 

Law Rep. 4 Ex. 387 . . 189 

12 M. & W. 170 . . 207 

Law Rep. 6 Eq. 496 . . 258 

6 H. & N. 349 ; 7 H. & N. 937 . 75 

3 Ves. at p. 320 . . 303 
Hob. 51 . . .29 

6 B. & C. 31 64, 65, 66, 67, 68, 69 

7 C. B. (N.S.) 711 . . 314 
3 Ad. & E. 659 . 33, 34 
7 M. & W. 517, at p. 528 153, 154 
6 Ex. 159 232 



Imhoff v. Sutton . 
Indermaur v. Dames 
Irving v. Clegg . 



I. 



Law Rep. 2 C. P. 406 . . 225 
Law Rep. 1 C. P. 274 ; Law Rep. 

2 C. P. 311 75 

1 Bing. N. C. 53 . 54, 58 



Jackson v. Spittall 
Jeffryes v. Evans . 
Jessop v. Crawley 



J. 



Law Rep. 5 C. P. 542 
19 C. B. (N.S.) 246 
15 Q. B. 212 . 



46, 47, 51, 52 

. 72 
17 



Ex. VOL. VI.] 



Johnson, Ex parte 
Jones v. Broadhurst 
v. Westcomb 
v. Yates 



TABLE OF CASES CITED. 
J. 



Law Rep. 5 Ch. 741 
9 C. B. 173 
1 Eq. C. Ab. 245 
9 B. & C. 532 . 



PAGE 

280, 331 

125, 126 

. 299 

246, 251 



K. 



Kemp v. Balls 
Key, Ex parte 
Kirchner v. Venus 



10 Ex. G07 

Law Rep. 10 Eq. 432 

12 Moo. P. C. 361 



126 
233 
324 



L. 



Laveroni v. Drury 

Leach v. Buchanan 

Lee v. Stephens . 

Leman ;. Gordon . 

Leverson v. Lane . 

Lindley v. Lacey . 

Lloyd v. Carew 

Lock v. Furze 

London and Mercantile Discount 

pany, In re 
Lucas v. Wilkinson 
Lucena v. Craufurd 



Com- 



8 Ex. 166 
4 Esp. 226 
2 Show. 49 
8 C. & P. 392 . 
13 C. B. (X.S.) 278 
17 C. B. (N.S.) 578 
Prec. in Chan. 72 
Law Rep. 1 C. P. 441 



"i Law Rep. 1 Eq. 277 

1 H. & N. 420 
1 Taunt. 325 



. 219 

. i)l 

. 192 

. 322 
246, 248 

. 72 

. 295 

. 64 

. 187 

. 126 

. 92 



M. 



Mackinnon v. Sewell 
Manfield v. Maitland 
Marriott v. Hampton 
Marsh v. Keating 
Mashiter v. Buller 

Maxted v. Paine (First Action) . 

v. (Second Action) . 

Meadows u. Parry 

McPherson v. Dauiell 

Meliors v. Shaw . 

Mersey Docks and Harbour Board i 

Cameron 

Metcalfe v. Hetherington . 
Meyer, Ex parte . 

Minturn v. Warren Insurance Company 
Mitcalfe v. Hanson 
Mollett v. Robinson 
Moore v. Clark 



v. Watson 

Moorsom v. Page 
Mudge v. Rowan 



2 My. & K. 202 296, 299, 300, 302 
4 B. & Aid. 582 . . 322 

2 Sm. L. C. 6th ed. p. 375 . 246 
1 Bin S . (N.C.) 198 . 281, 285 
1 Camp. 84 . . 322 

Law Rep. 4 Ex. 81 141, 151, 175, 
176, 181 
Law Rep. 4 Ex. 203 ; Law Rep. 

6 Ex. 132 258, 261, 263, 364 

1 V. & B. 124 . . 296, 2'JO 

10 B. C. at p. 272 . . 373 

1 B. & S. 437 . 78 



11 H. L. C. 443 



310 



11 Ex. 257 . . 75 

6 D. M. &G. 775 . . 315 

2 Allen R. 86 . . . 322 

Law Rep. 1 H. L. 242 . 314,315 
Law Rep. 5 C. P. 646 . . 258 

5 Taunt, at p. 96 . 25, 27, 30 

Law Rep. 2 C. P. 314, at p. 317 

201, 202, 203, 215 

4 Camp. 103 . . 54, 58 

Law Rep. 3 Ex. 85 . 315, 316 



xvi TABLE OF CASES CITED. [Ex. VOL. VI- 

PAGB 

Muschamp v. Lancashire ani Preston) Q ,, ? ^ T A0 -. 
Junction Railway Company . .} 8 M. & W. 421 

N. 

Nash v. Dickenson . . . Law Rep. 2 C. P. 252 . . 208 

0. 

Oldfield v. Dodd . . . . 8 Ex. 578, at p. 582 . . 345 

P. 

Panton v. Williams . . . 2 Q. B. 169 . . 375 

Paradine v. Jane .... Aleyn, 26 . . 272, 274 

v. .... Aleyn, 26, at p. 27 223, 272, 274 

Parker v. Ince . . . . 4 H. & N. 53 . . . 316 

Payne's Case .... Law Rep. 9 Eq. 223 . . 133- 

Pellatt's Case .... Law Rep. 2 Ch. 527 . . 116- 

Pickard v. Sears . . . . 6 A. & E. 469 . . .92 

Pickering, Ex parte . . . Law Rep. 4 Ch. Ap. 58 . 314 

Pitman v. Hooper . . .3 Sumn. R. 50 . . . 321 

^cfomplny ** ****?** Tele S ra P h | Law Rep. 4 Q. B. 706 . .a 

Pollock \. Stables' .' ! ! 12 Q. B. 765 . . . 258 

Pomfret v. Ricroft . . . 1 Wms, Saund. 322, n. (1) 219,222 

Porter v. Kirkus .... Law Rep. 2 C. P. 590 . . 33 

Potter v. Sanders . . . .6 Hare, 1 . . 116, 121 

Pounsett v. Fuller . . . 17 C. B. 660 . . 65, 68 

Powell v. Edmunds . . .12 East, 6 . .72 

Q. x 

Queensbury Industrial Society v. Pickles . Law Rep. 1 Ex. 1 . . 281 

4. A - i, n i 24 L. J. (Ch.) 722 296, 297, 305 r 

Quested v. Michell .} 3^ 3Q 

E. 

Ramsden v. Dyson . . . Law Hep. 1 H. L. 129 . . 72 

Reg. v. Woodward . . . Leigh & Cave, C. C. 122 . 91 

Reidpath's Case . . . . Law Rep. 11 Eq. 86 . 109, 121 

Revenga v. Mackintosh . . . 2 B. & C. 693 . . 353, 360 

Rex v. Ridgwell . . . . 6 B. & C. 665, at p. 669 . 1 104 

Reynolds v. Harris . . . 3 C. B. (N.S.) 267 . . 214 

Ridgway v. Wharton . . .' 6 H. L. C. at p. 296 . . 91 

Ringer v. Cann . . . . 3 M. & W. 343 . 33- 

Robinson v. Harman . . . 1 Ex.' 850 . . 64, 65 

Roe d. Bowes v. Blackett . . . Cowp. 235 . . .191 

Routh v. Thompson . . .13 East, 274 . .92 

Royal Liver Friendly Society, In re . Law Rep. 5 Ex. 78 . . 198 

Rushbrooke v. Hood . . . 5 C. B. 131 . . .103 

Russian Steam Navigation Company v.) , q Q -o />r g \ Q-, Q F * re- 

Silva .} ' 



Ex. VOL. VI.] TABLE OF CASES CITED. 

Rylands . Fletcher . . .{ L Rep. 3 H. f, 330 



Sahlgreen and Carrall's Case . . Law Rep. 3 Ch. Ap. 323 . 116 

Samrnon v. Miller . . . 3 B. & Ad. 596 . .315 

Samuel v. Duke . . . . 3 M. & W. 622 . . 232 

Saudback v. Thomas . . .1 Stark. 306 . . .44 

Saunders v. Best . . . . 17 C. B. (N.S.) 731 . . 314 

v.Drew. . . . 3 B. & Ad. 445 . . 323 

Saunderson v. Griffiths . . . 5 B. & C. 909 . . .92 

Seymour v. Maddox . . . 16 Q. B. 326 . . .75 

Shaw v. Fisher . . . . 5 De G. M. & G. 596 . 133, 157 

Sheppard v. Murphy . . .2 Ir. Rep. Eq. 544 . 167, 178 

Sichel v. Borch . . . . 2 H. & C. 954 . 46, 47, 49, 50, 51 

Sikes v. Wild . . . . 4 B. & S. 421 . . 65, 68 

Simpson v. Eggington . . .10 Ex. 845 . . 125, 126 

Sinclair v. Eldred . . .4 Taunt. 7 . . .44 

Skinner w. Gunton . . . 1 Wms. Saund. 228 d. et. seq. . 372 

Smallcombe v. Olivier . . . 13 M. & W. 77 . . 281 

Smith v. Edge . . . . 2 H. & C. 659 . . . 215 

Smith's, Betty, Trusts, In re . . Law Rep. 1 Eq. 79 . . 303 

& ClS Pt n Steam COlHery C mpany V } L< Rep. 4 Ex. 73 . . 54 

Southcote 'v. Stanley '. '. '. 1 H. & N. 247 . . 75, 77 

South Staffordshire Railway Company v.) rv- 190 01 r 

T> * j f O a*jX. 1 i ' . * oJ.t) 

Burnside . . .- . J 

Sparrow v. Sowgate . . . Sir W. Jones, 29 . . 272 

Staines v. Planck . . . . 8 T. R. 386 . . 315 

Stophenson v. Hart . . .4 Bins;, 476 . . .39 

Stevens v. Jcacocke . . . 11 Q. B. 731 . . .407 

Stocken v. Collin . . . . 7 Al. & W. at p. 516 . . 122 

Stubbs v. Holy well Railway Company . Law Rep. 2 Ex. 311 . . 274 

Supple, Lessee of v. Raymond . . Hayes, 6 . . . 131 

Sutton v. Tatham . . . 10 A. & E. 27 . . . 258 

Swann v. Falmouth . . . 8 B. & C. 456 . . 208, 210 



T. 

Tapner v. Merlott . . Willes, 177, 180 . 296, 305 

Tarbuck v. Tarbuck . . . 4 L. J. (N.S.) Ch. 129 294,296,303 

Taylor v. Caldwell . . . 3 B. & S. S26 . . 272, 275 

v. Cass .... Law Rep. 4 C. P. 614 . . 36 

Tempest, Ex parte . . . Law Hep. 6 Ch. Ap. 75, 76 . 232 

Thomas v. Bird . . . . 9 M. & W. 68 . . .103 

v. Desanges . . . 2 B. & Aid. 586 . . 232 

Thorn v. Croft .... Law Rep. 3 Eq. 193 . . 198 

Tinkler v. Hildcr . . . .4 Ex. 187 . . 17 

n , T, ( Law Rep. 10 Eq. 425 231,232,2-11, 

Todhunter, Ex parte . . ' ,,.j.' 

Torrington, Lord v. Lowe . . Law Rep. 4 C. P. 26 . . 167 

Towse v. Henderson . . .4 Ex. 890 . . . 57 

Trayes v. Worms . . . . 19 C. B. (N.S.) 159 . . 323 

Turner v. Ambler . . . 10 Q. B. 252 . . 352, 354 

VOL. VI. Ex. c 3 



xviii TABLE OF CASES CITED. [Ex. VOL. VI. 

u. 

PAGE 

Universal Life Assurance Company, Ex I Law Relx 1Q Eq 458 > 189 

parte . . . . -j 

V. 



Veness, Ex parte . 
Vyse v. Wakefield 



( Law Rep. 10 Eq. 419 231, 232, 233, 
| 238, 239, 241, 242 

. 6 M. & W. 442 26, 27, 28, 29, 30 



W. 



Walker v. Bartlett 

v. Giles . 

v. Moore . 

Wallace v. Kelsall 
Warburg v. Tucker 
Warren v. Rudall 
Watson v. Duykinck 
Wellock v. Hamond 
Wells v. Bridge . 
White v. Sealy . 
Whitehead v. Izod 
Whitworth v. Hall 
Wilbraham v. Snow 
Wilkin v. Reed . 
Wilkinson v. Howel 
Wilkinson v. Stoney 
Willis, In re 
Williams v. Bosanquet 

v . Clough 

v. Lloyd 

v. Smith 

Wilson v. Tumman 
Wiltshire Iron Company v. 

Railway Company 
Wyllie v. Wilkes 



18 C. B. 845 

6 C. B. 662, 696 
10 B. & C. 416 

7 M. & W. 264 
E. B. &E. 914. 
4 K. & J. 603 . 

3 Job. R. 335 . 
Cro. Eliz. 204 . 

4 Ex. 193 . 

1 Doug. 49 . 
Law Rep. 2 C. P. 228 

2 B. & Ad. 695 

2 Wms. Saund. 47 a. 
15 C. B. 192 . 

M. & M. 495 . 
1 J. & S. 509 
4 Ex. 530 . 
1 B. & B. 238 . 

3 H. & N. 258 . 
Sir W. Jones, 179 
14 C. B. (N.S.) 596 
6 M. & G. 236 . 



Great Wertern| Law Rep> fl 
. 2 Doug. 519 



134, 154, 157 

. . 198 

. . 65 

. . 246 

. 314,316 

. . 303 

. 320, 321 

. .191 

. 103,106 

. . 314 

. .133 

. . 344 

. . 232 

. . 273 

. . 374 
92, 94, 95, 97 
315, 316, 317 

. . 33 

. . 75 

. . 272 

. . 380 

. 91, 96 



. 315 



Y. 



Teames v. Lindsay 
Young v. Roebuck 
v. Winter . 



3 L. T. (N.S.) 855 
2 B. & C. 296 . 
16 C. B. 401 



. 22 

232, 236 

315 



CASES 



DETERMINED BY THE 



AND BY THE 



COUKT OF EXCHEQUER CHAMBER, 

ON ERROR AND APPEAL FROM THE COURT OF EXCHEQUER, 



IN AND AFTER 



MICHAELMAS TEEM, XXXIV VICTORIA. 



ROBINSON v. BRIGGS. 1870 

of Sale Apparent Possession 17 & 18 Viet. c. 36, ss. 1, 7 Occupation. 

The 17 & 18 Viet. c. 36, s. 7, enacts that personal chattels shall be deemed to 
*be in the "apparent possession" of the grantor of a bill of sale, so long as they 
shall remain or be in or upon any house, land, or other premises " occupied " by 
him : 

Held, that the " occupation " referred to in this section is actual de facto 
occupation. 

The grantor of a bill of sale, which was not registered, was tenant of rooms where 
the goods comprised in it were placed, but he resided elsewhere. Having made 
default in paying the sum secured he gave the keys of the rooms to the grantee, 
who opened the rooms and put his own name on some of the goods. None, how- 
ever, were removed, and an execution at the suit of a judgment creditor against 
the grantor was afterwards levied on them : 

Held, that the grantor did not "occupy" the rooms within the meaning of 
17 & 18 Viet. c. 36, s. 7, and that the goods were not to be deemed in hi.s 
" apparent possession," and that the bill of sale was therefore valid as against the 
execution creditor. 

DECLARATION for trespass to goods. Plea (among others) : not 
possessed. Issue thereon. 
VOL. VI. B 3 



COUET OF EXCHEQUER [L. E. 

1870 The plaintiff was the grantee of a bill of sale dated the 8th of 

"KOBINSON "~ Jutyj 1868, of some household furniture then at No. 5, Nelson 
BIOGGS Street, Sunderland. The bill of sale was given to him by Eobert 
Coundon, a seafaring man, to secure an advance of 250?. The 
defendant was the sheriff of the county of Durham, and on the 
10th of May, 1870, seized the goods comprised in the bill of sale 
under a writ of fi. fa. sued out by a judgment creditor of Coundon. 
The bill of sale was not registered, and Coundon remained in 
possession of the goods until he went to sea in the autumn of the 
year 1868, when the house in Nelson Street was given up, and 
Coundon's wife, acting for him, took two rooms at No. 12, Ward 
Street, Sunderland, to be ready for her husband's return, and to these 
two rooms she removed the household furniture in question. She re- 
mained in the rooms for two or three nights, but afterwards went to- 
live elsewhere with her daughter-in-law, only going to Ward Street 
occasionally in the daytime to fetch any article she might happen 
to require. When her husband returned in the spring of 1870 he 
joined his wife at the daughter-in-law's house. On the 9th of May, 
1870, the plaintiff, pursuant to the terms of the bill of sale, de- 
manded payment of the 250 secured by the bill within twelve 
hours, and default being made, Coundon directed his wife to take 
the keys of the rooms in Ward Street to the plaintiff and give 
them up to him, in order that he might take possession of the 
furniture. She did so, and the plaintiff went to Ward Street with 
the keys, opened the rooms, and put his name on some of the 
goods which, however, he did not remove. On leaving, he locked 
the door. Next day the execution on the part of the judgment 
creditor was levied by the defendant. Neither Coundon nor his 
wife were at the rooms between the time when the keys were 
delivered to the plaintiff and the levy. 

The cause was tried before Cleasby, B., at the Durham Summer 
Assizes, 1870. The learned judge left it to the jury to say 
whether No. 12, Ward Street, was at the time of the execution 
being put in by the sheriff in the occupation of Coundon or not. 
The jury found that it was not, and a verdict was thereupon 
entered for the plaintiff. 

Nanisiy, Q.C., for the defendant, moved for a new trial on the 



YOL. VI.] MICH. TEEM, XXXIV VICT. 

ground of misdirection, and that the verdict was against the evi- 1870 



dence. At the time of the execution the goods comprised in the bill ROBINSON 
of sale were in the " apparent possession " of Coundon, the grantor, 
within the meaning of 17 & 18 Viet. c. 36, s. 1, and therefore the 
bill of sale not being registered was invalid as against an execution 
creditor. Sect. 7 of 17 & 18 Viet. c. 36, enacts that personal 
chattels shall be deemed to be in the " apparent possion " of the 
maker of a bill of sale "so long as they shall remain or be in any 
house . . . occupied by him or as they shall be used and enjoyed 
by him in any place whatsoever, notwithstanding that formal pos- 
session thereof may have been taken by or given to any other 
person." Now here Coundon was the "occupier" of the Ward 
Street rooms, though he did not reside there. He was tenant of 
the rooms, and they were used for a purpose designated by him. 
His wife had the sole control over the keys and went to and fro 
when she pleased. The mere handing over of the keys to the 
plaintiff certainly did not terminate Coundon's tenancy or change 
the occupation. 

THE COURT (Kelly, C.B., Bramwell, Pigott, and Cleasby, BB.) 
refused the rule. Coundon remained tenant of ^ the Ward Street 
rooms, but he had ceased to be in actual occupation, and the mere 
continuance of his tenancy was not sufficient. The occupation 
pointed at in 17 & 18 Viet. c. 36, s. 7, must be an actual de facto 
occupation. There was nothing of that sort here, and the plaintiff 
had done all he was called upon to do to reduce the goods into his 
own possession. He, if anyone, was the actual occupier of the 
premises. 

Eule refused. 

Attorney for_defendant : Dixon,for Watson of DurJiam, 



13 2 



COUET OF EXCHEQUER. [L. R, 



1870 MILBURN AND OTHERS v. THE LONDON AND SOUTH WESTERN 

Nov. 8. RAILWAY COMPANY. 



Practice Staying Proceedings Order of Court of Admiralty Superior Court 
of Law or Equity Injunction C. L. P. Act, 1852, s. 226. 

The 17 & 18 Viet. c. 104, s. 514, enables the Court of Chancery, in cases where 
any liability has been, or is alleged to have been, incurred by the owner of a ship 
in respect of (inter alia) damage to, or loss of goods, and several claims are made 
or apprehended with regard to such liability, to entertain proceedings at the 
owner's suit to determine and distribute among the various claimants the amount 
of such liability with power to stop all actions or suits in relation to the same 
subject matter. The 24 Viet. c. 10, s. 13, confers a similar power on the Court 
of Admiralty. That Court acting under the last-mentioned statute, made an 
order in certain Admiralty proceedings, at the instance of the defendants, stopping 
the present action, which was brought against them to recover damages for loss 
of the plaintiffs' goods in consequence of the sinking of a ship belonging to the 
defendants. The defendants thereupon applied to this Court for a rule to stay, 
but the Court declined to interfere, being of opinion that the Common Law Pro- 
cedure Act, 1852, s. 226, was not applicable to any case except where an order 
stopping an action or suit had been issued by a "superior court of law or 
equity," and seeing no reason to exercise their discretionary power at common 
law of staying proceedings. 

THE plaintiffs brought this action to recover the value of two 
cases of goods delivered by the plaintiffs to the defendants in 
London on the 15th of March, 1870, to be carried by them from 
London to Guernsey via Southampton. The goods were safely 
^conveyed to Southampton, where they were on the 16th of March 
placed on board the steamship Normandy, then bound for Guern- 
sey, whereof the defendants were owners. Whilst on her voyage, 
the Normandy came into collision with a ship called the Mary, and, 
in consequence, sank with the whole of her cargo. In May, 1870, 
cross causes of damage were instituted in the Admiralty Court 
against the Mary and Normandy for the recovery of the damages 
which, the owner of each ship alleged he had received through the 
negligence of the captain of the other. Whilst these suits were 
pending, the defendants instituted proceedings in the Court of 
Admiralty for the limitation of their liability, according to the 
provisions of the Merchant Shipping Amendment Act, 18G2 
(24 & 25 Viet. c. 63), s. 54, and actions, of which the present was 
one, having been brought, and others threatened against them for 



VOL. VI.] MICH. TEEM, XXXIV VICT. 

the recovery of damages for the loss of the life of persons as well 1870 
as for the loss of goods, they applied to the Court of Admiralty for MILBCRN~ 
an order to stop all such actions under the Merchant Shipping v \ 
Act, 1854 (17 & 18 Viet. c. 104), s. 514, and the Admiralty Court ' SOCTH" 

"\VK^TKRV 

Act, 1861 (24 Viet. c. 10), s. 13. (1) An order was thereupon RAILWAY Co. 
made in the following terms : " The judge having heard counsel 
for the plaintiffs [the now defendants] and the several defendants 
[amongst whom were the now plaintiffs], orders that all actions 
and suits pending in any other court in relation to the subject 
matter of this suit, to wit, the liability of the owners of the vessel 
Normandy, the plaintiffs in this suit, in respect of loss of life or 
personal injury or loss or damage to ships, goods, merchandize, or 
other things, on the occasion of a collision which occurred on or 
about the 17th of March, 1870, between the Normandij and a 
vessel called the Mary, be stopped, the plaintiffs, by their counsel, 
undertaking to admit their liability in all such actions or suits as 
soon as this Court shall have pronounced for the damage pro- 
ceeded for in the cause pending in this court, entitled the Nor- 
mandy, or for a moiety of such damage/' A copy of this order was 
served on the plaintiffs. 

Butt, Q.C. (C. W. Wood with him), moved for a rule calling on 

(1) The 17 & 18 Viet. c. 104, entertained by such Court of Chan- 
part 9, s. 514, enacts, that " in cases eery . . . may be conducted in such 
where any liability has been, or is manner, and subject to such regulations, 
alleged to have been, incurred by any as to making any persons interested 
owner in respect of loss of life, per- parties to the same, and as to the 
sonal injury, or loss of or damage to exclusion of any claimants who do 
ships, boats, or goods, and several not come in within a certain time, 
claims are made or apprehended in and as to requiring security from the 
respect of such liability, then ... it owner, and as to payment of costs, 
shall be lawful, in England or Ireland, as the Court thinks just." 
for the High Court of Chancery . . . to The 24 Viet. c. 10, s. 13, enacts, 
entertain proceedings at the suit of any that, "whenever any ship or vessel, 
owner for the purpose of determining or the proceeds thereof, are under 
the amount of such liability, . . . and arrest of the High Court of Admiralty, 
for the distribution of such amount the said Court shall have the same 
rateably among the several claimants, powers as are conferred upon the High 
with power for any such court to stop Court of Chancery in England by the 
all actions and suits pending iu any 9th part of the Merchant Shipping 
other court in relation to the same Act, 1854." 
subject matter ; and any proceeding 



COUKT OF EXCHEQUEE. [L. E. 

1870 the plaintiffs to shew cause why all proceedings in the action 



should not be stayed in accordance with the order of the Admiralty 
j, v - Court. This order is not one of a "superior court of law or 
SOUTH equity," when the Common Law Procedure Act, 1852, s. 226 (1), 
RAILWAY Co. would apply in terms, and this Court would be compelled, on 
application, to stay all proceedings. But, although the order is 
one of the Admiralty Court only, and not of a superior court, 
still this Court, having regard to the fact that it was made by the 
Admiralty Court exercising the powers of the Court of Chancery, 
under 24 Viet. c. 10, s. 13, will, in the exercise of its discretion, 
and acting in analogy to the course they would be obliged to 
adopt had the Common Law Procedure Act, 1852, s. 226, applied 
in terms, stay proceedings. 

[BRAMWELL, B. You ask us to exercise the power to stay, 
which we are possessed of at common law. Is there any pre- 
cedent for its exercise under such circumstances as those of this 
case ?] 

No ; but the Common Law Procedure Act, 1852, s. 226, having 
enacted that the Court shall stay, where the Court of Chancery 
has issued an injunction, it is not unreasonable to ask the Court, 
in the exercise of its discretion, to stay, where the Court of 
Admiralty, which pro liac vice is, under 24 Viet. [c. 10, s. 13, 
equivalent to the Court of- Chancery, has issued an injunction. 

KELLY, C.B. This rule must be refused. The Common Law 
Procedure Act, 1852, s. 226, does not apply to this case, and, apart 
from that statute, the Court see no valid reason for staying 
proceedings. 

BRAMWELL, PIGOTT, and CLEASBY, BB., concurred. 

Eule refused. 
Attorney for defendants : L. Cromlie. 

(1) By the Common Law Procedure of law or equity at Westminster, . . . 

Act, 1852, s. 226, it is enacted, that in any other court than that by or in 

" in case any action, suit, or proceed- which such injunction may have been 

ing in any court of law or equity issued, or rule or order made, . . . the 

shall be commenced, sued, or pro- said other court shall stay all further 

secuted, in disobedience of, or contrary proceedings contrary to any such in- 

to, any writ of injunction, rule, or junction, rule, or order." 
order of either of the superior courts 



VOL. VI.] MICE. TERM, XXXIV VICT. 



HEN'KEL AND ANOTHER v. PAPE. 1870 

* Contract Principal and Agent Tthgruph Clerl; Mistake in Telegram, 

The defendant wrote a message for transmission by telegraph to the plaintiffs, 
ordering three rifles. By mistake the telegraph clerk telegraphed the word " the " 
for " three ;" and the plaintiffs thereupon, acting upon a previous communication 
with the defendant to the effect that he might perhaps want as many as fifty 
rifles, sent that number to him. The defendant declined to take more than three. 
In an action against him to recover the price of the fifty rifles : 

Held, that the defendant was not responsible for the mistake of the telegraph 
clerk, and that therefore the plaintiffs were not entitled to recover the price of 
more than three rifles. 

DECLARATION for goods bargained and sold, and for goods sold 
and delivered. 

Pleas, first, except as to 11. never indebted ; and, secondly, as to 
77. payment into Court. The plaintiffs accepted the money paid 
into Court, and joined issue on the first plea. 

The plaintiffs are gun manufacturers in London and Birming- 
ham, and the defendant is a gun-maker at Newcastle-upon-Tyne. 
On the 4th of June, 1870, the plaintiffs received from the defendant 
the following letter : " Send sample Snider, with sword-bayonet., 
forward immediately. I can fix an order for fifty, I think, and it 
may lead to many large orders. Can you do tliem at 34s. nett cash 
on delivery, so as to secure the order ? I shall have to cut very fine, 
and several will be in for it." In reply the plaintiffs wrote : " We 
have forwarded you this day sample Snider, with sword-bayonet. 
We cannot possibly do them for less than 35s. nett cash." With 
this letter the sample was sent. On the 7th of June the plaintiffs 
received the following telegram purporting to come from the de- 
fendant: "Send by mail immediately the Snider rifles same as 
pattern. Must be here in the morning. Ship sails then." The 
plaintiffs on receipt of this communication sent fifty rifles to the 
defendant. On the 9th of June they received the following letter 
from him : " I am surprised that you sent fifty instead of three 
rifles. The telegram was to send three" In fact, the clerk who 
sent the telegraphic message had by mistake telegraphed the 
word "the" instead of "three." The defendant had written 
" three," and not " the," on the message paper. Under these cir- 



COUET OF EXCHEQUER. [L. IT. 

1870 cumstances the plaintiffs insisted on the defendant accepting the 
________ - g.j.y r jfl eg ggn^ but the defendant declined to take more than- 

three. This action was then brought. The defendant paid a sum 
into court sufficient to cover the price of three rifles and their 
carriage. He denied his liability as to the residue of the plaintiffs' 
claim, contending that he could not be made responsible for the 
mistake of the telegraph clerk. 

The cause was tried before Blackburn, J., at the Surrey Summer 
Assizes, 1870, when a verdict was directed for the defendant, with, 
leave to move to enter a verdict for the plaintiffs for the invoice 
price of the remaining forty-seven rifles. 

H. Thompson Chiity moved accordingly : The telegraph clerk 
was the defendant's agent to transmit the message, and the 
defendant is responsible for the mistake in the transmission. 
Chitty on Contracts, 6th ed. p. 197. There is no privity be- 
tween the plaintiffs and the telegraph clerk, nor can they pro- 
ceed against the Post-office, his employers: Playford v. United' 
Kingdom Telegraph Company. (1) Their right remedy is against 
the defendant. Suppose in a letter written by himself he had 
made the mistake, he would clearly have been liable ; and in the 
transmission of each particular message the telegraph clerk is the 
agent of the sender. Upon the sender therefore must rest the 
responsibility of any error committed by the agent in the course of 
his employment. 

KELLY, C.B. We are of opinion that in this case there should 
be no rule. The question is whether the defendant has entered 
into a contract to purchase fifty rifles, and there is no doubt he 
might have bound himself either by letter or a telegraphic message, 
But the Post-office authorities are only agents to transmit messages- 
in the terms in which the senders deliver them. They have no 
authority to do more. Now in this case the evidence is that the 
defendant agreed to take three rifles, and three only, and he 
authorized the telegraph clerk to send a message to that and to 
no other effect. That being so, there was no contract between 
the plaintiffs and defendant for the purchase of "fifty rifles. The 

(1) Law Hep. 4 Q. B. 706. 



VOL. VI.] MICH. TEEM, XXXIV VICT. 

defendant cannot be made responsible because the telegraph clerk 1&70 
made a mistake in the transmission of the message. There was no 
contract between the parties such as the plaintiffs rely on. The 
verdict therefore ought to stand. 

BRAMVVELL, PJGOTT, and CLEASBY, BB., concurred. 

Rule refused. 
Attorney for plaintiffs : W. II. Smith. 



CROSS AND OTHERS v. PAGLIANO. 187() 

Charterparty Construction Commissions "imvards and outwards'" Printed Nov. H 
and Written Matter. 

A charterparty made between the plaintiffs, the charterers, through the agency 
of G. & Co., and the defendant, the captain of the Elvezia, provided among other 
things that the ship should proceed with a cargo to San Francisco, "where the 
ship shall be consigned to charterers' agents inwards and outwards, paying the 
usual commissions . . . and deliver the same . . . and so end the voyage ;" 
and that " on her return to her port of discharge in the United Kingdom " she 
should be reported at the Custom House by G. & Co. : 

Held, that these provisions did not impose on the defendant an obligation to 
accept a homeward cargo for the United Kingdom from the plaintiffs' agents at 
San Francisco, but merely bound him, if he had determined upon taking a return 
cargo on board there, to employ them to procure and ship it. 

DECLARATION on a charterparty made between the plaintiffs 
and the defendant, whereby it was among other things agreed 
that for a certain agreed freight payable by the plaintiffs, the 
charterers, to the defendant, the master of the ship Elvezia, the 
ship should proceed with a cargo to San Francisco, and should be 
there and thence consigned to the agents of the plaintiffs, the 
defendant paying commission inwards and outwards; that all 
things were done, &c., yet the defendant broke the charterparty 
in not consigning the ship to the plaintiffs' agents, and in not 
paying commissions inwards and outwards. 

Pleas : First, Non assumpsit. Secondly, Traverse of breaches. 
Thirdly, Exoneration. Issues thereon. 

The charterparty declared upon, which was entered into on 
behalf of the plaintiffs by Messrs. Gow & Co., of Glasgow, con- 



10 COUET OF EXCHEQUER. [L. R, 

1870 tained the following, amongst other stipulations : 1. That the ship 
CROSS should proceed from Glasgow with a full cargo to San Francisco, 
"where the ship shall be consigned to the charterers' agents 
inwards and outwards, paying the usual commissions, or so near 
thereto as she may safely get, and deliver the same agreeably to 
bills of lading, and so end the voyage ;" and 2. That the ship 
should be reported by Messrs. Gow & Co. " at the custom-house 
on her return to her port of discharge in the United Kingdom." 
This second stipulation was in print at the end of the charterparty. 
It was inserted in all Messrs. Gow & Co.'s forms. 

At the time of his entering into this charterparty the captain was 
in fact, but not to the plaintiffs' knowledge, bound under another 
of an earlier date to bring home a cargo of goods from Selina Cruz 
in Mexico to Hamburg ; and after discharging the plaintiffs' cargo 
at San Francisco, to which port the ship had proceeded in accord- 
ance with the charterparty made with the plaintiffs, she sailed in 
ballast for Selina Cruz, where the homeward cargo was obtained. 
The plaintiffs' agents were not employed in obtaining this cargo ; 
they had offered the captain a cargo for Europe at San Francisco, 
but he being already bound under his earlier contract, declined to 
accept it. They received a small amount of money for services 
rendered by them in connection with the ship sailing in ballast. 

At the trial before Kelly, C.B., at the Guildhall sittings after 
Trinity Term, 1870, on proof of these facts, a verdict was entered 
for the plaintiffs, for an agreed amount of damages, calculated on 
what was proved to be the usual basis for estimating commissions, 
viz., 2^ per cent, for the voyage to the foreign port, and 5 per 
cent, for the return voyage, with leave to the defendant to move 
to enter a verdict for him. 

A rule was afterwards obtained accordingly, on the ground that 
the defendant was not bound to accept cargo from the plaintiffs' 
agents at San Francisco, and that there was no breach of the 
contract by him, and that the commission claimed was not 
payable. 

Nov. 14. Henry James, Q.C., and Cohen, shewed cause. The 
charterparty clearly contemplates that the ship shall make a return 
voyage with a cargo supplied by the plaintiffs' agents. The ship is 



VOL. VI.] MICH. TEEM, XXXIV VICT. 11 

consigned to them "inwards and outwards," and "commissions," 1870 
not a commission only, are payable. The word, being in the plural, CROSS 
shews what the intention was. Again, the printed clause indicates 
that the parties intended the ship to return to the United Kingdom 
from San Francisco. Otherwise the stipulation that she is to be 
reported by Messrs. Gow & Co. has no meaning. The circum- 
stance of the clause being in print does not deprive it of signifi- 
cance. Taking both clauses together, the ship, if not bound to 
return direct to her port of discharge in the United Kingdom, was 
at all events bound to take a cargo for some European port, 
whether in the United Kingdom or in any other reasonable place, 
from the plaintiffs' agents. The terms of the charterparty would 
not be satisfied by a mere coast voyage of a few miles, for 
example. 

Sir G. Honyman, Q.C. (R. (?. Williams and Herschell with him), 
in support of the rule. According to the plaintiffs' construction, 
this charterparty imports an absolute engagement by the captain 
that he will return from San Francisco with a homeward cargo, 
to be provided by the plaintiffs' agents. But the true meaning of 
the first clause is, that the plaintiffs' agents are to receive the 
usual commission inwards, and outwards also if they, in fact, pro- 
vide a cargo, or perform any services with reference to the ship's 
return voyage from San Francisco, but not otherwise. If any ship- 
broker's work was done there, the plaintiffs' agents were to do it on 
the ordinary terms, but they were not to have a right to insist upon 
such work being done. As to the word " commissions " being in the 
plural, it is quite consistent with the defendant's contention ; and, 
indeed, in this case, commissions were actually earned. With regard 
to the printed clause it ought not to be construed to bind the 'de- 
fendant to return. A sensible meaning may be given it by holding 
that it applies to the case of the ship returning in fact, but at the 
defendant's option, to the United Kingdom. [He was stopped.] 

KELLY, C.B. The question in this case depends on the con- 
struction to be placed on two clauses of the charterparty between 
the plaintiffs and the defendant. The first of these provides that 
the ship shall proceed with a cargo from Glasgow to San Francisco, 
where she "shall be consigned to the charterers' agents inwards 



12 COURT OF EXCHEQUER. [L. R. 

1870 and outwards, paying the usual commissions, or so near thereto as 
CEOSS she may safely get, and deliver the same agreeably to bills of 
PAGLIANO lading, and so end the voyage." Now, it is noticeable that the 
word " voyage " is in the singular number, and but for the occur- 
rence of the word " outwards " there could be no sort of doubt as 
to the meaning of the clause. The charterparty would then clearly 
contemplate a single voyage to San Francisco, where, after the- 
cargo was discharged, the contract between the parties would come 
to an end. But the plaintiffs insist that something more was co<n- 
tracted for, the ship being consigned to their agents inwards and 
outwards, paying the usual commissions, and that the defendant 
was bound to accept an outward cargo to the United Kingdom 
from those agents, and pay commission on it. I am of opinion, 
however, that inasmuch as clearly no voyage from San Francisco 
would have been stipulated for without these words, it cannot be 
that their being added creates an absolute engagement by the 
defendant such as the plaintiffs contend for. I think the words- 
merely mean that if, on arrival at San Francisco, the defendant 
takes another cargo on board for any port, whether in the United 
Kingdom or elsewhere, the plaintiffs' agents shall be employed 
to get and ship it, and shall be entitled to commission for their 
services as ship's brokers. The words do not appear to me to- 
create a new and extensive liability, namely, that the defendant 
should be bound to take a cargo at San Francisco so as to entitle 
the plaintiffs' agents to commission. 

Then it is said that, independently of this part of the charter- 
party, the words at the close of it clearly shew that it was the 
intention of the parties that a return cargo should be placed on 
board at San Francisco for some port in the United Kingdom. 
The clause provides that the ship " shall be reported at the custom 
house on her return to her port of discharge in the United King- 
dom " by the plaintiffs' agents, Messrs. Gow & Co. ; and it is ecu- 
tended that these words constitute an absolute contract that the 
ship shall return. But, in my judgment, they mean no more than 
that, if the ship do return, the Glasgow brokers shall be employed 
to report her, and shall be paid for any services incidental to that 
report. Under these circumstances, and taking this view of the 
contract between the parties, I think the commission sued for was- 



VOL. VI.] MICH. TERM, XXXIV VICT. 13 

not earned, the ship not having taken, in fact, a cargo on board at 1870 
San Francisco. The rule, therefore, must be made absolute. CROSS 

V. 

PAGLIAKO. 
BRAMWELL, B. I am of the same opinion for the same reasons, 

but I desire to add a few words. First, with regard to the clause 
providing for the consignment of the ship outwards as well as 
inwards, paying the usual commissions. I take its meaning to be 
this : Whatever would have to be done by a ship's broker if a 
cargo had been taken on board outwards at San Francisco the 
plaintiffs' agents were to do ; or if the ship should sail in ballast 
-as, in fact, she did any services required in connection with her 
so sailing were to be performed by those agents. As to the argu- 
ment that the word " commissions " in the plural must mean that 
commissions were to be payable both on the voyage to San Fran- 
cisco and back, it seems to me very refined ; but, adopting it, it 
does not serve the plaintiffs, for their own accounts shew that they 
have, in fact, received more than one commission. 

If the case had rested entirely on this clause, I should have 
thought it too clear for argument. But then the printed words at 
the end of the charterparty are pressed on us. It is said that, 
either alone or together with the earlier clause, they shew that 
the ship was bound to come back to a port in the United Kingdom 
to discharge with a cargo taken on board at San Francisco. Such, 
at all events, was one of the contentions on behalf of the defend- 
ant. But it was also put rather more vaguely thus : it was said 
that the ship was bound to bring back a cargo either to a port in 
the United Kingdom or some " reasonable " port in Europe. This 
phrase, however, really has no meaning in connection with the 
present subject. The ship was an Italian ship, and Genoa was 
suggested as a reasonable port. But it could not be maintained 
that for this reason she would be limited either to Italian ports or 
the Mediterranean. In fact, under the earlier charterparty she 
was bound for Hamburg. There is, in fact, no rule by which we 
can determine what is or is not a " reasonable " port, and in con- 
nection with such a subject-matter the phrase is mere verbiage. 
The plaintiffs must contend that the ship was bound to come back 
to a port in the United Kingdom. But is it possible that the 
words of this clause can be so construed ? It is a usual clause ; it 



COURT OF EXCHEQUER. [L. B. 

1870 is in print ; it is in all the cliarf erparties entered into by Messrs. 

CROSS Gow, and I think we can give it a sensible meaning. It means, 
AGLIASO ^ n m y P m i n > that if the ship comes back she is to be reported 
by the plaintiffs' agents, but it does not mean that she shall come 
back. To hold that the words are imperative would be, to rny 
mind, irrational. They cannot bind the captain to get a cargo at 
San Francisco. I may add that, in my opinion, these printed 
clauses are very mischievous. If persons who enter into contracts 
would put down the terms in writing, there would be fewer mis- 
takes as to what they really have contracted to do than there are 
now as to the effect of these printed clauses, which, very often, 
neither party takes the trouble to read. 

PIGOTT, B. I am of the same opinion. I have not from the 
beginning of the argument entertained much doubt as to the 
meaning of this charterparty. We must construe the contract as 
a whole reasonably. And, first, with regard to the words "inwards 
and outwards, paying the usual commissions," I think it reasonable 
to hold- that they mean that, so far as a ship's broker is employed 
at San Francisco, whether to clear out the ship in ballast or with 
cargo, the plaintiffs' agents are to do the work. We cannot imply 
from the words an absolute obligation on the captain to take a 
cargo from them. Then as to the printed words, I entirely agree 
with my Brother Bramwell. I think that the clause is intended 
to meet cases where a homeward cargo is found, in fact, at the 
foreign port, but is not intended to bind the captain of the ship 
to take such a cargo. 

Rule alsoluie. 

Attorney for plaintiffs : E. Byrne. 
Attorneys for defendant : Westatt & Robert* 



VOL. VI.] MICH. TERM, XXXIV VICT. 15 



DEATH v. HARRISON. 1870 

County Court Interpleader Summons under 30 & 31 Viet. c. 142, s. ZlIIiylt, Nov ' 16t 
Bailiff of County Court Stay of Action. 

Where an interpleader summons has been issued under s. 31 of the County 
Courts Act, 1867 (30 & 31 Viet. c. 142), the county court judge has power to 
adjudicate upon any special damages to which the claimant of the goods seized 
may be entitled arising out of the execution ; and, whether such damages are 
claimed before him or not, no action in respect of them can be maintained by the 
claimant. 

DECLARATION, trespass for breaking and entering the plaintiff's 
house, and seizing and converting his goods, laying as special 
damage that the plaintiff was thereby deprived of the use of his 
said goods in the way of his business as a lodging-house keeper, 
and was prevented from letting furnished lodgings for the season 
then ensuing, and was otherwise injured. 

The fifth plea contained allegations shewing that a warrant had 
issued out of the Essex County Court at Harwich, for the satisfac- 
tion of a judgment recovered in the Essex County Court at Col- 
chester by the defendant and one Benham against D. D., the 
plaintiff's son, by virtue of which warrant the bailiff entered the 
plaintiff's house (the door being open and goods of D. D. being 
therein), and seized the goods in question as and for the goods of 
. D. D. ; that on the same day the plaintiff claimed the goods and 
served notice of his claim on the bailiff, and that thereupon the 
registrar of the Harwich County Court issued interpleader sum- 
monses in the usual form, directed respectively to the defendant 
and Benham and to the plaintiff, and which were duly served ; 
that before the day fixed for adjudication, the plaintiff not having 
deposited with the high bailiff either the value of the goods claimed, 
or the bailiff's costs of keeping possession till the summons was 
adjudicated upon, nor offered to do so, the bailiff sold the goods 
and paid the proceeds into Court (1) ; that the judge afterwards 
adjudicated on the claim, and declared that the plaintiff (the 
claimant) was entitled to goods sold to the amount of 237. 14s., 
subject to certain deductions for fees, and that the residue of the 

(1) See 19 & 20 Viet. c. 10S, s. 72. 



16 



COURT OF EXCHEQUER. 



[L.R. 



1870 



DEATH 

v. 
HARRISON. 



goods sold were not proved to belong to the claimant, and ordered 
that no action or proceeding should be taken against the bailiff; 
that the sum to which the plaintiff was entitled under the order 
was duly paid to him, and that the order was not appealed from ; 
the plea then alleged (after setting out rule 175 of the County Court 
Eules, 1868) that the plaintiff delivered particulars of his claim 
after 'the sale of the goods, and did not make any claim for 
damages arising or capable of arising out of the seizure or sale ; 
and, finally, the plea alleged that all forms were observed and con- 
ditions complied with necessary to make the judge's order valid, 
that it was final and conclusive between plaintiff and defendant, 
and that the seizure and taking in the declaration was the aforesaid 
seizure by the high bailiff, and that the seizure and conversion by 
the plaintiff was the causing the writ of execution to be issued and 
the levy to be made, and that the defendant was not otherwise 
guilty of the trespass and grievances complained of. (1) 
Demurrer and joinder. (2) 



(1) It was suggested by Martin, B., 
that the final allegation of the pica 
made it amount to an argumentative 
plea of not guilty ; but this point was 
waived by Gray, Q.C. 

(2) The 31st section of 30 & 31 Yict. 
c. 142, is as follows : 

" If any claim shall be made to or in 
respect of any goods or chattels taken 
in execution under the process of a 
county court, or in respect of the pro- 
ceeds or value thereof, by any person, it 
shall be lawful for the registrar of the 
Court, upon application of the high 
bailiff, as well before as after any action 
brought against him, to issue a sum- 
mons calling before the said Court, as 
well the party issuing such process as 
the party making such claim ; and the 
judge of the Court shall adjudicate upon 
such claim, and make such order be- 
tween the parties in respect thereof and 
of the costs of the proceedings, as to 
him shall seem fit, and shall also adju- 
dicate between such parties or either of 
them and the high bailiff in respect to 



any damage or claim of or to damages 
arising or capable of arising out of the 
execution of such process by the high 
bailiff, and make such order in respect 
thereof and of the costs of the proceed- 
ings as to him shall seem fit ; and such 
orders shall be enforced in like manner 
as any order in any suit brought in 
such Court, and shall be final and con- 
clusive as between the parties, and as 
between them, or either of them, and 
the high bailiff, unless the decision of 
the Court shall be in either case ap- 
pealed from, and upon the issue of the 
summons any action which shall have 
been brought in any Court in respect of 
such claim, or of any damage arising 
out of the execution of such process, 
shall be stayed." 

Rule 175 of the County Court Rules 
of January,1868, is as follows : 

" Where the claimant to goods taken 
in execution claims damages from the 
execution creditor, or from the high 
bailiff, for or in respect to the seizure 
of the goods, he shall in the particulars 



VOL. VI.] MICH. TERM, XXXIV VICT. 17 

Jelf, for the plaintiff. The 175th rule, made in pursuance of 1870 
SO & 31 Viet. c. 142, s. 31, only enables the claimant, if he thinks 



fit, to insert a claim for special damage in his particulars, but 
this is for his benefit, and it does not take away his right of action 
if he elects not to claim in that form. To construe it other- 
wise would be to treat it as taking away his right by implication 
merely. 

Gray, Q.C. (Hudson with him), in support of the plea. After 
the issue of an interpleader summons under 30 & 31 Viet. c. 142, 
s. 31, no action can be brought by any of the parties to the sum- 
mons in respect of any claim arising out .of the execution, but the 
whole matter must be adjudicated upon by the county court judge. 
Under s. 118 of the old Act of 9 & 10 Viet. c. 95 (for which the 
present section has been substituted), it was held by the majority 
of this Court, in Tinkler v. Hilder (1), that after the issue of the 
interpleader summons no action could be brought in respect of 
any part of the execution. There, no particulars of claim having 
been delivered, there was in fact no claim before the county court 
judge; the case is, therefore, in that respect a strong one. Since, 
however, the plaintiff in the action had accepted costs under the 
order to stay, he was held to have acquiesced in it, and the case 
was formally decided upon that ground ; but three of the judges 
(Pollock, C.B., and Parke and Eolfe, BB., Platt, B., dissenting), 
expressed a strong opinion upon the general question. In Jessop 
v. Crawley (2) the same opinion was expressed and acted upon 



of his claim to the goods state the that you arc hereby required five days 

amount he claims for damages, and before the said day to deliver to the 

the grounds upon which he claims officer in charge of the said process or 

<lamages." leave at my office particulars of the Raid 

The form of the interpleader sum- goods and chattels which are claimed by 

mons to the claimant (Sched. Form 80) you, and of the grounds of your claim, 

is as follows : and in such particulars you shall set 

"You are hereby summoned, &c., to forth fully your name, address, and 

support a claim made by you to certain description, and take notice that in the 

yoods and chattels taken in execution event of your not giving such particulars 

under the process issued, &c., and in as aforesaid your claim will not bo 

default of your then establishing such heard by the Court." 
claim the said goods and chattels will (1) 4- Ex. 1ST; 18 L. J. (Ex.) 42',i. 
then be sold according to the exigency (2) 15 Q. U. 212; 19 L. J. (Q.15.) 

of the said process; and take notice 319. 

VOL. VI. C 3 



18 



COURT OF EXCHEQUER. 



[L. R. 



1870 



DEATH 

v. 
HARRISOK. 



by the Court of Queen's Bench ; and that case is exactly similar 
to the present, except that there the adjudication of the county 
court judge upon the summons had been adverse to the claimant, 
whereas here it has been partially in his favour. But, even assum- 
ing the correctness of what is said there by Patteson, J., that if 
the decision had been in the claimant's favour it might have been 
otherwise, and he might have brought an action for breaking 
and entering, that can have no application here; because, the 
adjudication not being wholly in his favour, but goods of the 
execution debtor being in fact upon the premises, the entry is 
justified. But the question is set at rest by the words of the pre- 
sent section, which enacts that the county court judge shall adju- 
dicate " with respect to any damage or claim of or to damages 
arising or capable of arising out of the execution of such process 
by the high bailiff." These words, which were not in the earlier 
statute, are inserted for the very purpose of including a claim to 
special damage, and it is therefore clear that the county court 
judge must adjudicate upon the whole matter. 
Jelf, in reply. 

MARTIN, B. I am of opinion that this is a good plea, and, in 
saying this, I am expressing the opinion I entertained when this 
point was before the Court on a former occasion and received a 
great deal of attention. (1) The plea brings the case entirely 



(1) The case referred to was a case 
of Ward v. Jackson, where, upon an 
application made after issue joined, the 
master made an order to stay the action, 
which Montague Smith, J., on appeal, 
qualified by putting the defendant under 
certain terms; against this qualification 
of the order the defendant appealed to 
the Court, and obtained a rule, against 
which Wills shewed cause on the 3rd 
of May, 1870. He contended that great 
practical injustice would be done if the 
statute were taken to bar the claimant 
of his action for consequential damage, 
first, because the damage might not 
have accrued nor be calculable at the 
time of hearing the summons, and 



secondly, because the summons gave no 
notice to the claimant that he could 
then enforce his claim for special 
damage, but appeared only to refer to 
his claim for the goods themselves or 
their proceeds. Kemplay supported 
the rule. 

Kelly, C.B., doubted whether the 
legislature intended to take away the 
right of action in such a case, but the 
rest of the Court (Martin, Bramwell, 
and Cleasby, BB.), were of a different 
opinion. The case stood over for judg- 
ment ; and on the last day of term it 
was intimated that, on the ground of 
the difference of opinion in the Court, 
the rule would be discharged, with 



VOL. TL] 



MICH. TEEM, XXXIV VICT. 



19 



within the words of the statute ; the entry is justified, and the 
only point not explicitly stated is, that the summons was issued at 
the request of the high bailiff; but, by the Act, this must have 
been so. The case then being within the words of the statute, s. 31 
says expressly that the order made shall be final and conclusive. 
This is equivalent to saying that the whole matter between the 
parties shall be at an end ; and I have no doubt that the words 
were inserted with that very intention. The legislature directed 
this measure to meet the exigencies of common affairs, notwith- 
standing that in some exceptional and doubtful cases a hardship 
may be inflicted. My Brother Channell has desired me to say that 
he is of the same opinion. (1) 

CLEASBY, B. This plea is in substance a plea of res judicata ; 
it shews that though, the particular claim of special damage was 
not in controversy, the subject-matter out of which it arose was, 
and that in that proceeding a claim of special damage was properly 
open to adjudication. If the plaintiff had made his claim then, 
it could not be said that it could now be agitated again. But it 
is the same thing if the reason why the judge did not adjudicate 
upon it was that the plaintiff did not give particulars of his 
claim. 

Judgment for the defendant. 

Attorneys for plaintiff: Doyle & Edwards, for II. Jones, 
Colchester. 

Attorneys for defendant : Paterson, Snow, & Burney, for A. If. 
White, Colchester. 



liberty to the defendant to plead the 
matter in defence, so that the question 
might, if it was desired, be brought 
before the Court of Error; Martin, B. 
also expressing an opinion that an 
application to stay after issue joined 



was too late. It was in consequence of 
what took place on that occasion that 
the matter was pleaded in the present 
case, instead of being made ground of u 
motion to stay. 
(1) Channel!, P.., had left the court. 



1870 

DEATH 
v, 

HARRISOX. 



C 2 



20 COURT OF EXCHEQUER. 



1870 BYENE v. SCHILLER AND OTHERS. 

-ZVow. 21. 



Ship and Shipping Charterparty Payment on account of Freight, 

The plaintiff chartered a vessel to the defendants for a homeward voyage from 
Calcutta, with an option to the defendants to send the vessel on an intermediate 
voyage at a freight therein mentioned, " stich freight to be paid as follows : 
1200Z. in rupees to be advanced the master by the freighters' agents at Calcutta 
against his receipt, and to be deducted, together with 1 per cent, commission 
on the amount advanced and cost of insurance, from freight on settlement 
thereof, and the remainder on right delivery of the cargo at port of discharge in 
cash as customary." By another clause the master was to " sign bills of lading 
at any current rate of freight required without prejudice to the charterparty ; 
but not under chartered rates, except the difference is paid in cash." 

The defendants elected to send the vessel on the intermediate voyage, and paid 
the 1200Z., but induced the master, whom they required to sign bills of lading 
at a rate below the chartered rate, to postpone payment of the difference till the 
cargo was complete; the difference amounting to a less sum than 1200Z., they 
then claimed to have satisfied their obligation by the 1200 already paid, and 
refused further payment. The vessel was lost on her way out to sea. In an 
action for the difference : 

Held, that the plaintiff was entitled to the 1200/., and alse to the difference. 

SPECIAL case stated in an action on a charterparty, dated the 
4th of February, 1868, by which the plaintiffs ship Daphne was 
chartered to the defendants for a voyage from Calcutta to London 
or Liverpool. 

The charterparty contained the following clause : " The freighters 
to have the option, to be declared within twenty days of the 
vessel's arrival at Calcutta, of sending the vessel (subject to the 
general provisions of this charterparty) on one intermediate voyage 
from Calcutta, at their option, either to Port Louis, Mauritius, or 
to Colombo, with a full and complete cargo of rice in bags, paying 
freight on the same at and after the rate, if to Port Louis, of 
1 rupee 12 annas, and if to Colombo of 1 rupee 8 annas per bag of 
rice (of 2 bazaar maunds intake weight) delivered ; such freight to 
be paid as follows : 1200Z. in rupees to be advanced the master 
t>y the freighters' agents at Calcutta against his receipt, and to be 
deducted, together with 1 per cent, commission on the amount 
advanced and cost of insurance, from freight on settlement thereof, 
and the remainder on right delivery of the cargo at port of dis- 
charge in cash as customary." 



VOL. VI.] MICFF. TERM, XXXIV VICT. 

After various clauses not relating to the intermediate voyage, the I&TO 
following clause occurred : " The master to sign bills of lading at 



any current rate of freight required, without prejudice to the v - 

J SCIIILLEIJ. 

charterparty ; but not under chartered rates except the difference 
is paid in cash." 

On the arrival of the ship at Calcutta in December, 1868, the 
defendants elected to send her on an intermediate voyage to Port 
Louis, and freights being low, they required the master to sign bills 
of lading at a rate considerably below the charterparty freight. 

On two bills of lading being presented to the master for signa- 
ture at 1 rupee 6 annas per bag (the portion of cargo they repre- 
sented being then on board), he refused to sign them without being 
paid in cash the difference between that rate of freight and the 
charterparty freight ; but on the defendants assuring him that all 
would be made ri;ht when the vessel had finished loading, he 

o c' 

signed the two bills, and from time to time signed other bills for 
the residue of the cargo, all at a rate of freight below the charter- 
party freight. 

The total freight at the charterparty rate would have been 
33S2Z. ; and the bills of lading freight fell short of this sum by 
7377. 

On the 2nd of March, 1809, the ship being ready to sail, the 
master demanded of the defendants payment in cash of the dif- 
ference, but the defendants refuse;!, claiming to have it set off 
against advances made by them on account of the ship. 

On the 3rd of March the ship sailed ; and after some delay 
caused by the state of the tides, which compelled her to return to 
Calcutta for assistance, she was totally lost on the 10th of March 
on her way down the river. 

Various disbursements had been made by the defendants at 
Calcutta on account of the ship, in respect of which they claimed 
credit for a sum exceeding 12001. ; certain items in this account 
were disputed by the plaintiff, whose calculation reduced the 
amount below 1200Z., and who sought in this action to recover that 
difference, in addition to the difference of 737?. ; but in the course 
of the argument it was agreed that the question should be limited 
to the issue of whether the plaintiff was entitled to recover the 
737?. in addition to the 1200?. 



22 COUET OF EXCHEQUEE. [L. E. 

1870 E. G. Williams (Edivards with him), for the plaintiff. The 

BYRNE plaintiff contends that the defendants were bound to pay 12007. 

c, v ' at Calcutta in respect of the intermediate freight, before the coni- 

bCHlLLER. r 

mencement of the voyage, whatever the rate of freight might be, 
and also bound before the same time to pay in cash the difference 
between the chartered freight and the bills of lading freight if the 
latter were at a lower rate than the former ; and this is in exact 
agreement with the words of the charterparty. The plaintiff's right 
under the first head is clearly established by the case of Hicks 
v. Shield (1), which shews that where the sum to be paid is not a 
loan or advance but a prepayment of freight, the shipowner cannot 
be called upon to refund it, although, owing to the loss of the 
ship, no freight is earned ; the law on this point is correctly stated 
in Maude and Pollock on Shipping, 3rd ed. pp. 269, 270. That the 
sum of 1200Z. stipulated for is of this character is shewn by the 
stipulation as to insurance, the test applied in Hicks v. Shield (1), 
and which is here satisfied. That the second payment is also a pay- 
ment of freight is too clear for argument, it is a payment of that part 
of the chartered freight which is not covered by the bills of lading 
freight. It became due as soon as the cargo was put on board, 
and the right to recover it is not affected by the loss of the vessel : 
Yeames v. Lindsay (2) ; Carr v. Wdllacliian Petroleum Company, 
Limited. (3) The only ground, therefore, on which the defendants 
can rest their case is that the two clauses are dependent, and the 
one restricted by the other. But there is nothing to justify that 
assumption, they are distinct in form and in position ; the former 
is attached to the provision allowing the charterer the benefit of 
an intermediate voyage, the latter to a provision giving him the 
privilege of having bills of lading signed at such freight as he 
shall choose, and equally applicable to the homeward and to the 
intermediate voyage. 

Suit, Q.C. (Baylis with him), for the defendants. That the 
defendants were liable to pay the 1200Z. is not disputed, and Hicks 
v. Shield (1) carries the matter no farther than this ; but they 
deny their liability to pay the difference in addition. The object 
-of the stipulation as to the payment of the difference in cash is to 

(1) 7 E. & B. 633 ; 26 L. J. (Q.B.) 205. 
(2) 3 L. T. (N.S.) 855. (3; Law Eep. 1 C. P. G3G. 



VOL. VI.] MICH. TERM, XXXIV VICT. 23 

secure to the shipowner that part of the chartered freight in re- 1870 
spect of which he loses his lien by allowing the master to sign BYRNE 
bills of lading for a lower rate. Obviously the two clauses are to p * 
be read in connection with one another, and no sum is to be paid 
in respect of the differences eo nomine, unless in fact the differences 
exceed 1200?. In the words of the charterparty, the defendants 
have paid the difference of 737?. in cash, namely, by paying the 
1200?. Further, the difference which is to be paid under the 
second clause is not, like the 1200?., a sum which is to be paid 
in all events. The indicia on which the Court relied in Sides v. 
Shield (1) are here wanting, and on the loss of the vessel any pay- 
ments made under that head could be recovered back by the 
defendants ; that being so, the plaintiff cannot recover what he 
would be bound immediately to refund. 
R. G. Williams, in reply. 

MARTIN, B. Upon the substantial question in this case rny 
opinion, founded upon the words which the parties have thought 
fit to use, is that the plaintiff is entitled to our judgment. The 
question turns upon the clause relating to the intermediate voyage, 
and it appears to me that there is no ambiguity in the language 
used. The defendants were to be at liberty to put on board a 
cargo at the rate of 1 rupee 12 annas per bag of rice delivered. 
The plaintiff was in that event to have 1200?. in hand, which was 
to be deducted on the final settlement ; the remainder was to bo 
paid on right delivery at Port Louis. He had a vested right of 
action for that 1200?. on the vessel being directed by the defend- 
ants on the intermediate voyage. According to the case of Hicks 
v. Shield (1) this sum was to be considered as an advance of freight 
and could not be treated as a loan, or recovered back in the event 
of freight not being earned. The Court of Queen's Bench based 
their decision in that case on the stipulation that insurance was to 
be deducted on the final settlement, which they regarded as con- 
clusive evidence that the money Avas to be treated as an advance 
of freight, and was not to be recovered back in the event of a loss 
of the vessel. "We are bound to act on that decision, which is not 
unreasonable, and it applies in terms to the present case. But 

(1) 7 E. & B. C30 ; 20 L. J. (Q'.K) 205. 



2-i COUET OF EXCHEQUER. [L. R. 

1870 there is a further provision in the charterparty which assumes that 

BYRNE the freight obtained may not be so much as the charterparty 

v - freight, and provides that, in that event, the master shall not sign 

& CHILLER* 

bills of lading for the lesser rate of freight unless he is paid the 
difference in cash. This is an event not contemplated in the 
previous clause, which is wholly independent of the rate of freight ; 
the payment it provides for is, therefore, a distinct payment in 
addition to the 1200Z. stipulated for above. Then, looking at what 
took place at Calcutta, the plain meaning of it was, " if you will 
wait till all the cargo is ascertained, and we can calculate the total 
amount, we will then pay cash for that total amount instead of 
paying upon each bill of lading separately." 

The only other question is, whether the defendants, in the event 
which has happened, are entitled to recover back the amount which 
ought to have been so paid. I think they are not. Taking the 
whole together the plaintiff was to be entitled to the whole of both 
sums, provided it did not exceed the charterparty freight. 

CHANNELL, B. I am of the same opinion. The case of Hicks 
v. Shield ( 1 ) is binding on us, and the argument used by the Court 
of Queen's Bench is equally, and indeed more strongly, applicable 
here. It is not only said that " such freight " shall be paid in 
part by the sum of 1200Z., excluding the notion of its being merely 
an advance or loan, but it is also stipulated that that sum with 
insurance and commission shall be deducted on the final settlement. 
Again, there is no reason to say that the difference which was,, 
according to the other clause, to be paid in cash was to be in- 
cluded in the 1200?., or that the clauses are in any way dependent 
on each other. Lastly, if the defendants had, according to the 
further stipulation, paid the difference of freight in cash, they 
could not have recovered it back on the ground of the loss of the 
vessel. The payments are distinct, and the plaintiff is entitled to- 
both sums. 

Judgment for the plaintiff for 737L 

Attorneys for plaintiff: Chester & UrquUart. 
Attorney for defendants : R. T. Laltey. 

(1) 7 E. & P. 633 ; 26 L. J. (Q.B.) 203. 



VOL. VI.] MICH. TERM, XXXIV VICT. 



MAKIN v. WATKIXSOX. 1870 

V0|i 99 

landlord and Tenant Lease Covenant to repair Notice of want of repair. 

Upon a covenant by the lessor to keep in repair the main walls, main timbers, 
and roofs of the demised premises, the lessor cannot be sued for non-repair, unless 
he has received notice of want of repair : So 

Held, by Bramwcll and Channell, BB. ; Martin, B., dissenting. 

DECLARATION upon a covenant contained in a lease of a mill and 
other buildings with machinery and fixtures, by which the lessors 
(of whom the defendant was one) covenanted with the plaintiff 
(the lessee) that they would at all times during the demise, at 
their own expense, maintain and keep the main walls, main timbers, 
and roofs of the said buildings in good and substantial repair, order, 
and condition ; alleging performance of conditions precedent, and a 
default in repairing whereby, <frc. 

Plea : That the plaintiff gave no notice to the lessors of any 
want of repair in the main walls, main timbers, and roofs, nor that 
the same were not in good and substantial order and condition. 

Demurrer and joinder. 

Wills was called upon to support the plea. The only direct 
authority for the plea is a dictum of Mansfield, C.J., and Gilbs, J., 
in Moore v. Clark (1), that " the lessor may charge the lessee 
without notice ; for the lessor is not on the spot to see the repair? 
wanting ; the lessee is, and therefore the lessee cannot charge, the 
lessor for breach of repairs without notice, for the lessor may not 
know that repairs are necessary." The justice of this is the more 
obvious if its principle is applied to a similar case, that of a watch- 
maker selling a watch with an agreement to keep it in repair for 
six months ; it is plain that he could not be sued for non-repair 
unless the buyer required repairs to* be done. The lessor in the one 
case, and the watchmaker in the other, not only would not, but 
could not, know that repairs were wanted unless notice was given, 
for they would have no right to insist upon examining the premises 
or the watch, and would be guilty of a trespass if they did so 
against the will of the possessor. The dictum above cited is sup- 

(1) 5 Taunt, at p. 9G. 



26 COUET OF EXCHEQUER. [L. E. 

1870 ported by several analogous cases. In Com. Dig. Condition, L. 10, 
MAKIN it is laid down that " if a condition be that the lessee repair, and 
WATKI'NSON ^ ia * ^ e l essor ^ n ^ timber, the lessee ought to demand timber, and 
give notice how much will be sufficient." 

[BRAMWELL, B., referred to L. 8, " if a condition, covenant or 
promise be to pay as much for goods as every other pays ; the obligee 
shall give notice how much another pays."J 

In Yin. Abr. Condition. A. d. pll. 13, 38, it is laid down that 
when the condition is an act to be performed by a stranger, 
the obligor must take notice at his peril ; but in the case cited in 
the latter placitum (Pollen v. Kingesmeal, as stated in the margin) 
and in Harris v. Ferrand, reported in Hardr. 41, and cited in Yin. 
Ab. Notice. A. 2, pi. 12, the principle is more fully and more 
correctly stated that, " notice is not necessary where the thing lies 
as much in the cognizance of the one as the other; but where it 
lies more properly in the cognizance of the plaintiff than of the 
defendant notice is necessary." That principle was acted upon in 
Vijse v. Wdkefield (1), and is entirely applicable to this case. 

[MARTIN, B. A distinction has always been made between a 
condition and a covenant. 

CHANNELL, B. The principle has been laid down that where 
notice or demand is merely formal, the bringing of the action is 
sufficient notice, but not otherwise.] 

Here the notice is essential ; if the lessor is to have no notice, 
extensive repairs may have been executed by the tenant, of which 
the lessor knows nothing, and of the necessity of which he has, 
after they are done, no means of judging, but for which he may 
be compelled to pay ; and he may be made liable for consequential 
damage which he had no opportunity of preventing. 

[BRAMWELL, B. The case would be different if the covenant 
were, on the making of the lease, to put in repair. But the plain- 
tiffs contention would reduce the lessor to a dilemma ; if he 
went on the premises to repair, and repairs were not needed, he 
would be liable to be sued in trespass ; if he did not go and repairs 
were needed, he would be liable for consequential damage, and he 
could have no knowledge whether they were or were not needed.] 
Kemplay, in support of the demurrer. If the defendant is right 
(1) G M. & W. 442. 






VOL. VI.] MICH. TERM, XXXIV VICT. 

there is no difference between a covenant to repair and a covenant 1870 
to repair on notice. The rule is, that notice is not necessary unless MAKIX 
it is stipulated for by the contract: see 1 Wins. Saund. 110, note 
to Cutler v. Southern, and 2 Wins. Saund. G2, n. (4), where all the 
authorities are collected: Coles Case. (1) 

[BRAMWELL, B. The covenant in Cole's Case (1) was to save 
harmless, but if it Lad been merely to indemnify, must not notice 
have been given of the damnification ?] 

The defendant's view cannot be sustained without adding words 
to the covenant, and there is no authority for such addition. 

[BRAMWELL, B. Words were added in Vyse v. Wakefield. (2) 
The question is, whether in reason the covenant does not require 
the addition ; we must construe it if possible as a covenant made 
by reasonable people.] 

It is not necessary for that purpose to add words; there is 
nothing unreasonable in it as it stands ; the lessee being under an 
obligation to repair would have an implied licence to do all things 
necessary. The dictum in Moore v. Clark (3) was not necessary 
to the case ; on the other hand, Coivard v. Gregory (4) is in favour 
of the plaintiff. 

[BRAMWELL, B. There the covenant was to put the premises 
in repair, which implied they were out of repair.] 

CHANNELL, B. I am of opinion that this is a good plea. The 
declaration is good, because it avers the performance of conditions 
precedent, which would include a request if a request is necessary. 
The question is, whether the plea denying the giving of notice is 
a good defence. I agree that the case of Moore y. Clark (3) is not 
an authority; because, although what was said there upon this 
point was said by two very eminent judges, one of them (Gibbs, J.), 
peculiarly conversant with pleading, and was illustrative of the 
matter under discussion, yet it was not necessary to the determina- 
tion of the case. We must, therefore, look at the question apart 
from direct authority and upon general principles. And, looking 
.at it in this way, Vyss v. Wakefield (2) is, to some extent, an 
authority, for it warrants the proposition that, when a covenant 

(1) Cro. Elix. [)7. (3) 5 Taunt, at p. DC.. 

( ') G M. & W. -112. (4) Law Rc T . 2 C. I 1 . l.",3. 



28 COURT OF EXCHEQUER. [L.R. 

1870 would, according to the letter, be an unreasonable one, words not 
inconsistent with the words used may be interpolated to give it a 



* reasonable construction. This proceeds on the assumption that 

YY ATKINSON. . 

the contracting parties were reasonable men, and intended what 
was reasonable. If, however, the language of the covenant 
is clearly inconsistent with the words sought to be added, I 
agree that, however absurd the covenant may be, it cannot be 
varied. 

Now here repairs are to be done to the exterior of the premises, 
as to which it is just possible that the lessor might, by observation, 
acquire a knowledge of their necessity. But the main timbers of 
the building, which must be within its carcase, and the roofs are 
to be kept in repair ; and of the repairs required for these he could 
have no knowledge without notice. He could not enter to see the 
condition of those parts, even though, independently of his obliga- 
tion under the covenant, it might be of great consequence to him 
to be acquainted with it. Here, therefore, by the rule of common 
sense, which is supported by the case of Vyse v. Wdkefield (1), we 
ought to import into the covenant the condition that he shall have 
notice of the want of repair before he can be called on under the 
covenant to make it good. 

BKAMWELL, B. I am also of opinion that the plea is good. To 
hold it to be so we must hold the defendant's covenant to be a cove- 
nant to repair on notice. I have the strongest objection to interpo- 
late words into a contract, and think we ought never to do so unless 
there is some cogent and almost irresistible reason for it, arising 
from the absurdity of the contract if it is read without them. 
Does such a reason, then, exist here ? I think it does. I think 
that we are irresistibly driven to say that the parties cannot have 
intended so preposterous a covenant as that the defendant should 
keep in repair that of which he has no means of ascertaining the 
condition. The lessee is in possession ; he can say to the lessor: 
" You shall not come on the premises without lawful cause ;" and 
to come for the purpose of looking into the state of the premises 
would not be a lawful cause. If the lessor comes to repair when 
no repair is needed he will be a trespasser ; if he does not come, 

(1) 6M.&W. 442. 



VOL. VI.] MICH. TERM, XXXIV VICT. 2!) 

he will, according to the plaintiff's contention, be liable to an action 1870 
on the covenant if repair is needed, and will be liable, not only to 
the cost of repair, but to consequential damage for injury to 
chattels caused by want of the repairs he had no opportunity of 
effecting. This is so preposterous that we ought to hold that the 
parties intended the covenant to be read with the qualification 
suggested. 

As to the authorities, we have, in the first place, an obiter 
dictum of two eminent judges, which was appropriate to the matter 
in hand, and is, therefore, of great value, though not binding. 
The authorities on analogous cases, collected in Comyn's Digest, 
are by no means clear ; some seem one way, some another, and 
one, which occurs under the title Condition, L. 9, is very much in 
favour of the plaintiff. The case there referred to is Fletcher 
v. Pynsett (1), where, it appears, the defendant covenanted with 
the plaintiff that, if he would marry the defendant's daughter, the 
defendant would assure to him a certain copyhold ; and it was held 
that the plaintiff was entitled to sue without giving notice of the 
marriage. It seems to be suggested that, when the engagement is 
conditional upon the doing of an act by a third person, notice must 
be taken from that person. But this cannot be the reason of the 
rule, for, in a case put under L. 8 of the title I have referred to, 
it is said that a promise to pay as much for goods as any other 
pays requires a notice of how much another pays. (2) But there 
seems no reason why the obligee should be less bound to give 
notice, or the obligor more bound to take notice of the act of a 

(1) Cro. Jac. 102 ; see to same effect, is referred to iua similar case of v. 

Roll. Abr. Cond. C. 1, 2, 3, 4 under the Henning {Haul v. Hemings, in 1 Roll, 

heading "At what time performance Rep. 285), it is said a difference was 

should be when no time is limited." taken " if the agreement be that he 

(2) Holmes v. Tivist, the case there shall pay so much as J. S. in particular 
referred to, was decided by the Ex- payed ; iu that case quia constat de 
chequer Chamber, reversing the judg- persona, and he is indifferently named 
ment of the King's Bench, some judges betwixt them, the defendant at his 
of the Court below agreeing with the peril shall inquire of him, and the plain- 
judgment of reversal (Hob. 51); the tiff is not bound to give notice." The 
reason there assigned was, that the price latter reason seems to be adopted by 
was "a thing of his (the plaintiffs) Parke, 13., in Vyse v. Wakefidd (OM. & 
private knowledge, and not like the W. at pp. 453, 454), as the ratio 
case of bond to perform the award ;" decidendi of these cases. 

in Cro. Jac. 432, where the same case 



30 COUET OF EXCHEQUER. [L. B. 

1870 stranger than of the act of the obligee himself, as in some of the 
MAKIN cases put in L. 9, where it is said notice is not necessary. 

^ we ^^ * ^ ie reason f ^ ne ru ^ e ' ^ * s ' * na * wnen a thing is ia 
the knowledge of the plaintiff, but cannot be in the knowledge of 
the defendant, but the defendant can only guess or speculate about 
the matter, then notice is necessary. 

To have inserted a provision in the covenant requiring notice 
would certainly have been very reasonable. When it is a question 
of putting it into the covenant by implication, one must needs, as 
in all such cases, have great doubt ; but upon the whole, looking 
to the authorities, and bearing in mind what is said in Moore v. 
Clark (1), I think we are warranted in so reading the covenant. 

MARTIN, B. I am of opinion that this plea is bad. I think that 
when we are construing a contract we ought to adhere to its words, 
and not insert words not to be found in it ; otherwise it is impos- 
sible for the parties to know what are the obligations they have 
bound themselves to, or for counsel to advise with certainty. Now 
the declaration states a covenant by the defendant to keep in good 
and substantial repair, and that the defendant did not keep in 
repair. In answer to this the plea alleges that there was no notice 
of want of repair. I think this plea bad, and for the simplest 
reason, that no such stipulation is contained in the covenant, nor 
anything from which such a stipulation can be inferred. 

I cannot perceive that the covenant as it stands is so unreason- 
able as is alleged. Moreover, there are in leases covenants to 
repair generally, and covenants to repair on notice ; but if this 
covenant is construed in the way proposed, it is idle to require 
notice in terms ; the one covenant will do as well as the other. 

The authorities appear to me directly against the plea. The 
proposition laid down by Mr. Cowling arguendo in Vyse v. Wake- 
field (2) is, I apprehend, perfectly correct : " The general rule is, 
that a party is not bound to do more than the terms of his contract 
oblige him to do ;" and all the judgments support what he says. 
Lord Abinger, C.B., says (3) : " The rule to be collected from the 
cases seems to be this, that where a party stipulates to do a certain 

(1)5 Taunt, at p. 96. (2) 6 M. & W, at p. 446. 

(3) G M. & W. at p. 4f,?. 



VOL. VI.] MICH. TERM, XXXIV V1CT. 

tiling in a certain specific event which may become known to him 1870 
or with which he can make himself acquainted, he is not entitled 
to any notice, unless he stipulates for it." Now, the assumption in 
the present case that the defendant cannot know without notice is, 
in my judgment, idle. Parke, B., says (1) : " The general rule i.s, 
that a party is not entitled to notice unless he has stipulated for 
it ; but," he adds, " there are certain cases where, from the nature of 
the transaction, the law requires notice to be given, though not ex- 
pressly stipulated for ;" he proceeds to describe those cases as cases 
where the thing to be performed is indefinite, and at the option of 
the plaintiff; and he decides the case before him on the ground 
that an option still remained to be exercised by the plaintiff. The 
present transaction is not of such a nature. Lastly, Rolfe, B., 
says (2) : " I own that when the case was first opened my impres- 
sion was in favour of the plaintiff ; and for this reason, that when 
a party enters into a contract, he is bound to perform it, whether 
reasonable or not. Where the law casts an obligation upon him, 
it says that it shall be reasonable : but that is not so when a party 
contracts to do a particular act ; for then it is his own fault for 
entering into such a contract." I entirely agree with the rule of 
law so stated, and therefore think that we are not at liberty to 
import any such stipulation into this covenant as the defendant 
claims. 

Judgment for the defendant. 

Attorney for plaintiff: W. Flower. 

Attorney for defendant : Jewin. 

(1) 6 M. & W. at p. 433. (2) 6 M. & W. at p. 450. 



32 COURT OF EXCHEQUER. [L. B. 



1870 WHITE v. HUNT. 

Creditors' Deed Assignment of Lease Acceptance of Lease. 

By a deed for the benefit of creditors (executed after the repeal of 25 & 26 Viet. 
c. 134) the debtor assigned to the defendant all his personal estate, and the de- 
fendant executed the deed, and acted under it. In the personal estate was 
included a lease as to which the defendant did no act specifically accepting it. In 
an action by the landlord for rent : 

Held, that the lease had passed to the defendant, and that he was therefore 
liable. 



APPEAL from the decision of the deputy judge of the Wilts 
County Court at Melksham, on a plaint for rent. 

The plaintiff was owner of a public-house, lately occupied by one 
Bolton, on a tenancy from year to year, under which half a year's 
rent became due at Lady Day, 1870, which was the rent sued for. 
The defendant was a trustee for creditors, to whom Bolton had, by 
a deed dated the 28th of February previous, assigned all his 
"goods and chattels and personal estate." The defendant had 
executed the deed, and had acted under it in realizing the goods 
and chattels comprised in it which were upon the premises, and 
for that purpose had entered and used the premises ; but he had 
not, it was contended, done any act to shew his acceptance of 
the lease. The deputy judge found, as a fact, that there had been 
no actual acceptance of the lease by the defendant ; but neverthe- 
less held that it passed to him by virtue of the assignment, no 
disclaimer of it having been made, and that he was therefore liable 
for the rent. The defendant appealed. 

Finlay, for the defendant. The defendant never having ac- 
cepted this lease, cannot be made liable for rent. This is the 
case of a composition deed with creditors ; and there being in the 
late Bankruptcy Act, 1869, no provision for such deeds, the ques- 
tion must be determined according to the rules which governed 
such deeds before that Act, and independently of the now repealed 
Act of 1861 (24 & 25 Yict. c. 134), by which they were, for the first 
time, expressly provided for, and in analogy to the decisions which 
have been made under the latter statute with reference to deeds 



VOL. M ] MICH. TEEM, XXXI V V1CT. 

registered under it. Now, with respect to assignees in bankruptcy, 1870 
it was decided in Copeland v Stephens (1), that the general assign- WHITE 
raent of the bankrupt's estate did not vest in them a lease until HUNT 
acceptance ; and in Carter v. Warne (2) Lord Tenterden applied 
the same rule to a common creditors' deed. In Porter v. KirJcus (3) 
the 145th section of the Act of 1849 was held applicable to deeds 
registered under s. 192 of the Act of 1861. It has been thought 
that the authority of Carter v. Warne (2) has been shaken by How 
v. Kennett (4), and this was the opinion of the learned judge of the 
county court ; but in How v. Kennett (4) it was not necessary to 
decide the question, and the case of Carter v. Warne (2) was not 
even dissented from. That case is therefore the ruling authority, 
and it is supported by Einger v. Cann (5), where it was thought 
necessary to ask the jury whether the assignees had accepted the 
lease in respect of which they were sued. 

Field, Q.C., for the plaintiff. The question is the same as that 
decided in Williams v. Bosanquet (6), and is in no way influenced 
by Copeland v. Stephens (1), which was decided with reference to 
the words and the intention of the Bankruptcy Acts, and upon an 
assignment made under a statutory power. If the parties choose, 
as they have done here, to conduct their affairs at common law, 
instead of taking the protection of the statute, they do it at their 
own risk, and cannot obtain any assistance from the statute, the 
provisions of which they have elected to disregard. It is true tha 
in How v. Kennett (4) the doctrine laid down in Carter v. Warne (2). 
was not directly overruled, but it was described by Patteson, J. (7), 
as "new," and cannot, it is submitted, be supported. 

Finlay, in reply. 

MARTIN, B. My opinion upon this case is not so strong as that 
of my learned Brethren; but as they are clear upon the point, 
I do not hesitate to express what has always been my opinion, 
that if a man, whether as an assignee for creditors, or in his own 
right, takes an assignment of property, it becomes his by virtue of 
that assignment, without any further act of acceptance. 

(1) 1 B. & A. 593. (4) 3 Ad. & ]]. 050. 

(2) 1 Mcod. & M. 470. (5) 3 M. & W. 3-13. 

(3) Law Rep. 2 C. P. 590. ((5) 1 13. & B. 238. 

(7) 3 Ad. & E. at p. CIO. 
VtL. VI. D 3 



34 COURT OF EXCHEQUEE. [L. E. 

1870 BRAMWELL, B. I am of the same opinion. If this had been a 

WHITE purchase, no one could have doubted that the assignee took the 
HUST > lease. Then what is the difference here? The defendant is 
assignee of the lease by an instrument which he has executed, and 
under which he has acted. If Lord Tenterden had pronounced 
his opinion in Carter v. Warne (1) after consideration, I should 
have hesitated to overrule it ; but it was an opinion expressed in 
the hurry of nisi prius business, and is a little blown upon in Hoiv 
v. Kennett. (2) I think we may therefore look at the matter as 
one of principle ; and so dealing with it, my opinion is that the 
learned county court judge was right, and that our judgment must 
be for the plaintiff. 

CHANNELL, B. It is no doubt true that in bankruptcy, by reason 
of the language of the statutes, an assignee in bankruptcy may, 
notwithstanding the vesting in him of the bankrupt's general 
estate, refuse a lease which he regards as a damnosa hereditas, 
and that he is not taken to have accepted it unless he does some 
act which unequivocally testifies his acceptance. But in the case 
of an assignment at common law the property would, without any 
actual acceptance, clearly pass, although an assignee who had never 
executed the assignment would be entitled to disclaim. I have 
some doubt whether Lord Tenterden expressed his opinion in 
Carter v. Warne (1) entirely in the way appearing in the report. 
If, however, that case is to be treated as accurately representing 

his view, I cannot assent to it. 

Judgment for the plaintiff. 

Attorneys for plaintiff: Doyle & Edwards. 
Attorney for defendant : Bartrum, Bath. 

(1) 1 Mood. & M. 479. (2) 3 Ad. & E. 659. 



VOL. VI.] MICH. TERM, XXXIV VICT. 35 



MOODY v. STEWARD. 1870 

JYor. 21. 
County Courts Act, 18G7 (30 & 31 Vict.c. 142), s. 10 Case ss?ii to le tried in the - 

County Court. 

After an action has been sent to be tried in a county court under 30 & 31 Yict. 
c. 142, s. 10, the court in which the action was brought has no jurisdiction ov<.r 
the costs, and cannot make an order to tax. 

THIS was an action for slander, originally brought in this 
court, but sent for trial to the Greenwich County Court, under 
50 & 31 Viet. c. 142, s. 10. A verdict was obtained for 5Z., but 
the judge who tried the cause declined to make any order as to 
costs, being of opinion that he had no jurisdiction as to them, at 
any rate as to those which were incurred before the cause was 
sent down. A summons was taken out at Chambers calling on 
the defendant to shew cause why it should not be referred to a 
master to tax the plaintiff's costs. The summons was heard by 
Willes, J., and was referred by him to the Court. 

Nov. 19. Pearce moved accordingly. He cited Craven v. 
Smith (1), and contended that at least the costs incurred in this 
court must be taxed here. 

[BBAHWELL, B., referred to the words of the section (2), and 
asked whether the Court had any jurisdiction to tax costs.] 

The cause remains in the court for some purposes. In Taylor 

(1) Law Rep. 4 Ex. 146. cause as if both parties had agreed, by a 

(2) 30 & 31 Viet. c. 142, s. 10, memorandum signed by them, that the 
enacts that the defendant in any action said county court should have power to 
of tort may, on satisfying certain con- try the said action, and the same had 
<litions, obtain an order from any judge been commenced by plaint in the said 
of the court where the action is brought county court; and the costs of the 
remitting the cause for trial before a parties in respect of the proceedings 
county court to be named in the order ; subsequent to the order of the judge of 
that " thereupon the plaintiff shall the superior court shall be allowed 
lodge the original writ and order with according to the scale of costs in use in 
the registrar of such county court, who tin; county courts, and the costs of the 
shall appoint a day for the hearing of proceedings in the superior court shall 
the cause . . . and the county court so be allowed according to the scale hi USD 
named shall have all the same powers in such latter court." 

and jurisdiction with respect to the 

D 2 ;>, 



36 



COURT OF EXCHEQUER. 



[L.B. 



1870 



MOODY 

v, 
STEWARD. 



v. Cass (1), an order to tax was obtained upon the county court 
judge's certificate. 

[PiGOTT, B. The section gives costs to be taxed according tc* 
the scale in the superior court, that is all. 

BRAMWELL, B. We will speak to my Brother Willes.] 

Cur. adv. vuli. 

Nov. 21. BRAMWELL, B. We have considered this case, and for 
the purposes of the present application it will be sufficient to say 
that we are of opinion that we have no power to make the order. 
The whole cause has gone to another court, and is no longer within 
our jurisdiction. That is sufficient to dispose of the matter ; but 
we will add the expression of our opinion that there is full 1 j 
diction in the judge of the county court. 



PIGOTT, B., concurred. 
Attorney for applicant : PooJc. 



Rule refused. 



Noa. 22. 



M'KEAN AND OTHERS v. M'lVOR AND OTHERS. 
Carriers Misdelivery Fictitious Order. 

The plaintiffs being imposed upon by a fictitious order sent by H., a person 
employed by them to obtain orders, forwarded goods by the defendants, who were 
carriers between Liverpool and Glasgow, addressed to C. Tait & Co., 71, George 
Street, Glasgow, that being the. name and address given them by H. In fact,, 
there was no such firm as C. Tait & Co., but H. had made arrangements at 71, 
George Street, for receiving letters, &c., addressed there under that name. On- 
the arrival of the goods at Glasgow, the defendants, following the course of 
business usual with carriers between Liverpool and Glasgow, sent a notice to* 
the address appearing on the goods, requesting their removal, and stating tha/t 
the notice must be produced, indorsed as a delivery order. This notice was- 
received by H., who indorsed it " C. Tait & Co.," and upon presenting it so in- 
dorsed, obtained delivery of the goods. In an action against the defendants, as- 
carriers, for misdelivery : 

Held, that the defendants, having followed the usual course of business, which 
must be read as part of the plaintiffs' directions, had obeyed the plaintiffs' directions, 
and were not liable. 

SPECIAL CASE, stated in an action brought to recover damages 
for the misdelivery and conversion of goods of the plaintiffs. 
(I) Law Rep. 4 C. P. 614. 



VOL. VI] MICH. TERM, XXXIV VI CT. 37 

The plaintiffs are flour and starch merchants at Manchester, 1870 
iind the defendants are carriers by water between Liverpool M-KEAN" 
and Glasgow. * 

M'lVQR. 

On the 20th of March, 1807, Heddell, a person employed by the 
plaintiffs to obtain orders in Glasgow, represented to them that 
he had obtained an order for a parcel of goods from F. Covvie & 
Co., of 11, West Nile Street, Glasgow. There was in fact no such 
trading firm as F. Cowie & Co. ; but Heddell and one Cowie had, 
for the purpose of this fraud, taken an office at the address named, 
where they had put up the name of F. Cowie & Co., and where 
they from time to time received letters, notices, and parcels. On 
the 29th of March the plaintiffs delivered to Thompson, M'Kay, & 
Co., carriers, at Manchester, the goods supposed by them to have 
been so ordered, with a direction to forward them to F. Cowie & 
Co., 11, West Nile Street, Glasgow, by canal to Liverpool, and 
thence by steamer to Glasgow; and on the same day wrote to 
Heddell, at his own address, and also to F. Cowie & Co., at 
11, West Nile Street, announcing the despatch of the goods. 
The goods were forwarded by Thompson, M'Kay, & Co. to Liver- 
pool, and there delivered by them to the defendants for carriage to 
Glasgow, the defendants knowing nothing of the plaintiffs, except 
that their names appeared on the way-bill as senders of the goods. 
The sum of Is. 6i7. was paid by the plaintiffs to Thompson, M'Kay, 
& Co. on the delivery to them of the goods, on account of the car- 
riage from Manchester to Glasgow ; the defendants collected at 
Glasgow the balance of the through freight, accounting to Thomp- 
son, M'Kay, & Co. for the cost of carriage between Manchester and 
Liverpool. 

On the arrival of the goods at Glasgow, the defendants, follow- 
ing the course of business always pursued by carriers of goods 
between Liverpool and Glasgow, caused a notice to be sent to 
F. Cowie & Co. at the address named, notifying the arrival of the 
goods, requesting the consignees to send for them, and stating 
that the notice must be produced indorsed as a delivery order. 
The notice was delivered at 11, West Nile Street, and came to the 
hands of Heddell and Cowie. Heddell, in the name of F. Cowio 
& Co., indorsed the notice with an order to deliver the goods to 
one John Tho:n, a respectable tr.ulor in Glasgow, to whom the 



38 COURT OF EXCHEQUER. [L. R. 

1870 goorls were delivered by the defendants on the production of the 
M'KEAN notice so indorsed. 

M'l ' R ^ n ^ ie 2Sth ^ ^P r ^ another parcel of goods was sent by the 

plaintiffs to F. Cowie & Co. under precisely similar circumstances, 
and was similarly delivered by the defendants on the production 
of their notice, indorsed by Heddell in the name of F. Cowie & Co. 

On the 1st of May Heddell telegraphed to the plaintiffs that he 
had obtained an order from C. Tait & Co., of 71, George Street, 
Glasgow ; and on the following day the plaintiffs forwarded the 
goods telegraphed for under precisely similar circumstances with 
the two former parcels. There was, in fact, no such firm as 
C. Tait & Qo. ; but Heddell had made arrangements (but not in 
conjunction with any person named Tait) for receiving at 71, George 
Street, letters, notices, &c., addressed there to C. Tait & Co. 
Accordingly, the notice sent by the defendants Avas received by 
Heddell, who indorsed it in the name of C. Tait & Co., and on the 
production of the order so indorsed obtained delivery of the goods 
from the defendants. 

The carters who were sent to obtain the delivery of the goods 
from the defendants, and to whom the goods were delivered on the 
production of the indorsed notices, were in each case carters in 
the employment of respectable firms of carters in Glasgow. 

All three parcels of goods were disposed of by Heddell, and the 
moneys applied by him to his own purposes. 

The defendants in all respects acted bona fide, and followed the 
usual course of business as above described. 

The Court was to be at liberty to draw inferences, and the ques- 
tion for their opinion was, whether the defendants were liable to 
the plaintiffs in respect of all or any, and which, of the said parcel* 
of goods. (1) 

(1) This case originally came before convenient method of raising the defence,. 

the Court on demurrer to a plea in and suggested that a special case should 

which the above facts were partially be stated ; and, a technical error appear- 

stated. The Court gave judgment ing in the entry of the judgment below,, 

against the plaintiffs (reported 18 L. T. by consent of the parties the judgment 

(N.S.) 410); error was brought upon was quashed, and a judgment of re- 

this judgment, and the case came on for pleader awarded, the parties to state 

argument in the Exchequer Chamber the facts for the opinion of the Court of 

on the 20th of June. 1868. The Court Exchequer, 
then observed that a plea was an in- 



VOL. YL] MICH. TERM, XXXIV VICT. 39 

Holker, Q.C. (Bryce with him), for the plaintiffs. It may be 1870 
admitted that if the carriers had no means of exercising a judg- 
ment as to the circumstances under which delivery was claimed, 
they would have been guilty of no negligence. But they had 
greater means of knowledge than the plaintiffs ; they were on the 
spot, and could have made inquiries ; but without inquiry they 
did an act which enabled Heddell to obtain possession of the 
goods. 

[MARTIN, B. It is here found as a fact that the custom was 
to send a notice in the mode which they adopted. If that was the 
usual mode, it must be taken to have been known to the plaintiffs, 
and to have been incorporated into their direction to the carriers. 
In what respect, then, did the defendants not obey the plaintiffs' 
directions ?] 

As to the third parcel at least, if they had exercised proper care 
in carrying out those direction?, and made inquiries, they would 
have discovered that there was no C. Tait & Co. 

[BiiAMWELL, B. I can see no want of reasonable care. Did 
not the persons designated as C. Tait & Co. in fact get the goods ? 
If so, the defendants are clearly in the right.] 

They did not get them, for there were no such persons. The 
case is the same as if the goods had been stolen, in which case the 
defendants would bo clearly liable. The case of Steplienson v. 
Hart (I) is in point; the circumstances there were very similar to 
those of the present case. 

[BRAMWELL, B. There were circumstances there to excite 
suspicion ; but, I think the reasoning of Gaselee, J. (2), who dis- 
sented from the judgment of the Court, is right ; there was nothing 
to shew that it was not West who received the box ; it may rather 
be collected that it was.] 

Duff v. Budd (3) is also in point. 

[MARTIN, B. The parcel was directed there to an actual person, 
and was delivered to another person under circumstances of 
negligence.] 

At any rate, the goods here were not delivered to the persons 
to whom they were addressed, for there wera no such persons. 

(1) 4 Bing. 47G. (2) 4 Bing. at p. 488. 

(3) 3 B. & B. 177. 



40 COURT OF EXCHEQUER. [L. R. 

1870 There was therefore a misdelivery, for which the defendants are 
M'KEAN answerable : Garside v. Trent & Mersey Navigation. (1) He also 
M'lvor referred to the judgment on the demurrer in this action (2). 

C. Eussell (Milward, Q.C., with him) for the defendants. First, 
there was no contract between the plaintiffs and defendants ; the 
contract was with Thompson, M'Kay, & Co. : Muscliamp v. Lan- 
cashire & Preston Junction Ey. Co. (3) 

[THE COURT. That is clearly so.] 

Secondly, there has been no negligence and no misdelivery ; the 
defendants have exactly pursued the plaintiffs' orders, when those 
orders are interpreted by the custom. 

[CHANNELL, B. The finding upon this is clear ; there was a 
bona fide custom. 

BRAMWELL, B. It is admitted that the order was to deliver at 
the address, or wherever else the consignees might direct. The 
only question is, did the consignees give any direction ?] 

The plaintiffs cannot say they did not ; the person who had 
assumed that name from the outset, and who received letters 
addressed to that name at 71, George Street, was the person who 
gave the direction. If the defendants had gone to the place and 
inquired, they would have found nothing to excite their suspicion. 

Holker, Q.C., in reply. 

MARTIN, B. We are all of opinion that the defendants are 
entitled to judgment. I will assume that this action is properly 
brought against the defendants, although the plaintiffs' contract 
was, in fact, with Thompson, M 'Kay, & Co.; and, assuming that, 
the defendants will not be liable unless they have acted in u 
manner not justified by their duty to the plaintiffs. But it appears 
to me that they have done exactly what they were directed to do. 
I pass over the first two cases, in which the defendants have made 
what is equivalent to a delivery to Cowie & Co. at their premises. 
The other case is the only one that raises any difficulty. But as 
to this, when the plaintiffs thought fit to act upon the order which 
Heddell had given them in the false name of C. Tait & Co., and 
gave directions to the defendants to deliver goods to C. Tait & Co. 

(1) 4 T. JI. 5S1. (!') IS L. T. (N. S.) 410. 

(3) 8 M. & W. 421. 



VOL. VJ.j MICH. TERM, XXXIV VICT. 41 

at 71, George Street, Glasgow, I think they affirmed that there 1870 
were such persons as C. Tait & Co. at that place. That they were 
led into that belief by the fraud of Heddell makes no matter ; they 
did so state in fact, and the carriers had a right to assume that 
this statement was correct, and have a right now to say that the 
person to whom they delivered the goods was, as he was in fact, 
the person who represented himself to the plaintiffs as C. Tait & Co. 
But if the carrier delivers at the place indicated, or does what is 
equivalent to a delivery there, he does all that he is bound to do : 
he obeys the sender's directions, and is guilty of no wrong. To 
make him liable there must be some fault ; it is a question of fact 
whether there has been any such negligence as makes him guilty 
of a conversion ; and where he has carried out the directions of the 
sender, the mere fact that he has delivered the goods to some 
person to whom the sender did not intend delivery to be made, is 
not sufficient to support the allegation that he has converted them. 

BKAMWELL, B. I am of the same opinion. We must take it 
that the contract was between the plaintiffs and Thompson, M'Kay, 
& Co. ; but it is still open to the plaintiffs to say that the defend- 
ants have been guilty of a conversion. I assume that a misdelivery 
would have been a conversion ; but the difficulty is to see that 
there has been any misdelivery. When the direction given by 
the plaintiffs is expanded as interpreted by usage, it comes to this, 
" Take the goods to Glasgow, and at 71, George Street, you will 
find a person or persons bearing the name of C. Tait & Co., who 
will receive the goods or give an order for them, and to whom or 
whose order you must deliver them." The defendants take the 
goods, they give the customary notice to C. Tait & Co., they 
receive an indorsement in that name directing delivery, and deliver 
accordingly. Are they not entitled to say that the order ought 
to be thus expanded according to the custom, and that, if so 
expanded, it would have justified the delivery ? My difficulty was 
(and it only applies to the last order, for as to the first two no 
doubt delivery was made to the order of persons using the name of 
Cowie & Co.), whether it could be said that the defendants did 
deliver to the order of C. Tait & Co., or whether the plaintiffs 
might not say, "There are no such persons as C. Tait k Co. ; it is 



42 COURT OF EXCHEQUER. [L. R. 

1870 true we thought there were, but there were not in fact ; our dircc- 
M'KKAN~ tion was therefore impossible of performance ; but it does not follow 
that you were entitled to deliver to any one else." And I have 
doubted whether the case was not the same as if the defendants 
had not written at all, but Heddell, hearing that the goods were 
in the defendants' hands, had come and told them to deliver else- 
where than at the address named ; in which case there would be 
great difficulty in saying that the defendants would have discharged 
their duty. It would be the same as if a letter were addressed 
to a place where no such person lived as was mentioned in the 
address, and the letter were delivered to some one standing on 
the pavement. But the distinction is, that there were, according 
to the plaintiffs' statement, some persons using that name at 
that place, and these were the persons designated in the order 
as the persons to whom the defendants were to deliver. The de- 
fendants therefore may say, " We have obeyed your directions, 
for we have delivered to the order of persons who, at 71, George 
Street, were more or less using the name of C. Tait & Co., and to 
whom you told us to address ourselves for directions." 

CHAJJNELL, B. I am of the same opinion. We must view the 
order as if it were interpreted by the course of business. If so, 
there has been no such misdelivery as amounts to a conversion. 
The plaintiffs are, as it were, estopped from saying that there were 
no such persons as C. Tait & Co. 

Judgment for the defendants. (1) 

Attorneys for plaintiffs: Eeed, PheJps, d' tiedgwiclt. for Sale ct> 
Co., Manchester. 

Attorneys for defendants : Gregory & Co. 

(1) See HciKjli v. London and Xorth Western Railway Company, La\v Rep. 
5 Ex. 51. 



VOL. VI.] MICH. TERM, XXXIV VICT. -i3 



HOWARD v. LOVEGROVE. 1S70 

Contract of Indemnity Indemnity against CWs Taxed Costs Extra Costs. ^ 1 '- $ 

Li an action by a lessee against the assignee of the lease for breach of a 
contract by the assignee to indemnify the lessee against a failure to perform the 
covenants contained in the lease, the plaintiff sought to recover, among other 
heads of damage, the whole costs, as well those paid by him on taxation 
as extra costs paid by him to his own attorney, incurred in unsuccessfully defend- 
ing an action brought against him by the lessor for breach of one of the covenants 
in the lease committed after the assignment : 

Held, that the lessee was entitled to recover both the extra costs paid by him 
to his attorney and the taxed costs. 

DECLARATION by the lessee of one Newman against tho assignee 
of the lease for a breach of the following undertaking addressed to 
the plaintiff: "I, the undersigned, William Lovegrovc, hereby 
undertake, in consideration of your having this day assigned to me 
all your interest under the agreement between yourself and 
Mr. Newman, to indemnify you against payment of rent and 
performance of the covenants and conditions contained therein. 
7th March, 1866." The defendant pleaded, among other pleas, a 
denial of the breach. Issue. 

At the trial before Martin, B., at the Middlesex sittings in Michael- 
mas Term, 1870, it appeared that the premises demised being out 
of repair in the year 1869, Mr. Newman gave to the plaintiff', his 
lessee, who was under a covenant to repair contained in the lease, 
notice of the amount at which the dilapidations were valued, and 
of his intention to bring an action for that amount. The plain- 
tiff communicated the contents of this notice to the defendant, 
his assignee, who was then in possession of the premises, and after- 
wards proposed to him to come in and defend the action. The 
defendant did not adopt this course, and Newman's action pro- 
ceeded against the plaintiff, who paid 30?. into court. That sum 
was accepted by Newman and a nolle prosequi was entered. 
The present action was brought to recover the sum of 30?., and the 
costs to which the plaintiff had been put in defending the action. 
A verdict was found for the plaintiff for 72?. 16s. IQd., 121. 9s. 4d. 
of which consisted of costs which had not been allowed on taxation 
between party and party, but had been paid by the plaintiff to his 



44 COUKT OF EXCHEQUER. [L. R. 

1870 own attorney for services rendered in the action of Newman v. 
HOWARD Howard. 



v. 

LOVEGROVK. 



Prentice, Q.C., moved for a rule for a new trial on the ground of 
misdirection and excessive damages. The extra costs beyond those 
allowed on taxation are not recoverable against the defendant, and 
the learned judge should have told the jury in assessing the damages 
to exclude them from their consideration. In Sinclair v. Eldred (1) 
it was held that in an action for malicious prosecution the plaintiff 
could recover no damages for extra costs, and Mansfield, C.J., 
(at p. 9), expresses an opinion that no action can be maintained 
for extra costs i.e., costs in excess of what the law allows. In 
Grace v. Morgan (2), commenting on Sandbacli v. Thomas (3), in an 
action for an excessive distress the plaintiff was held not entitled 
to recover any thing beyond the taxed costs of his replevin on the 
distress. Sandback v. Thomas (3) is an authority in conflict with 
these cases, but it was a nisi prius decision, and must be considered 
as overruled. Again, according to Cotterell v. Jones (4), an action 
for " extra " costs is under no circumstances maintainable. In the 
present case the plaintiff, it is true, sues not in tort, but on an 
express contract of indemnity. Still the principle of the authorities 
cited applies, and the only proper measure of damage here is the 
costs ascertained by the usual course of law. 

KELLY, C.B. In this case I think there should be no rule. 
The plaintiff was liable in the action brought against him by 
Newman, and with a view of preventing further litigation, after 
notifying the action to the defendant, he paid 301. into court in 
satisi'action. This he is, of course, entitled to recover. Then 
there are the costs incurred in defending the action, as to which 
the question before us arises. It is said that the defendant cannot 
be made liable for more than such costs as the master allows on 
taxation. But I am of opinion that all the costs the plaintiff in- 
curred, both those allowed as between party and party, and also those 
properly incurred in addition between himself and his own attorney, 
were necessarily incurred. This being so, it would be unjust, and we 
should not give its full effect to the contract of indemnity entered 

(1) 4 Taunt. 7. (3) 1 Stark. 30G. 

(2) 2 Bing. N. C. 534. (4) 11 C. B. 713 ; 21 L. J. (C. P.) 2. 



VOL. VI] MICH. TERM, XXXIV V1CT. 45 

into with him by the defendant if we were to deprive him of these 1870 
extra costs. HoWARD 

V. 

MARTIN, B. I am of the same opinion. It is admitted that the LovEOROVE - 
plaintiff ought to recover the costs of the action brought against 
him by the landlord, and the question is what are these costs ? I 
should say that they include everything which his attorney could 
recover against him. To give him the mere costs as taxed by the 
master, who acts according to a particular scale, would not be a 
complete indemnification. I was of this opinion at the trial, and I 
see no reason to alter it. It is not, in my opinion, the duty of the 
judge in such a case to tell the jury that as a matter of law they 
can give nothing beyond the taxed costs. I must add that I think 
the same reasoning would apply to actions of tort, and I am, there- 
fore, unable to assent to the principle of the decisions which have 
been cited to us. 

PIGOTT, B. I am of the same opinion. The case differs from 
those which have been referred to. Those were actions of tort, 
but here the action is for the breach of a contract of indemnity, 
and I think the plaintiff is entitled to recover the whole of the 
damages which the jury gave him. He did all he could through- 
out. He could not repair himself, his assignee being in possession ; 
he could not prevent the landlord from bringing the action. When 
it was brought he informed the defendant, who might have taken up 
the defence if he had liked ; but not taking that course the plaintiff 
paid money into court in satisfaction. Thus, from first to last he 
did nothing unnecessary, and these costs, both taxed and extra, 
appear to me the natural and necessary consequence of the 
defendant's breach of contract, and to be recoverable, as coming 
within the strict rule as to the mode in which damages should be 

measured. 

Rule refused. 

Attorney : Ilallam. 



40 COURT OF EXCHEQUER. [L. R. 



1870 DURHAM v. SPENCB. 

Writ issued for Service Abroad Cause of Action Common Law Procedure 
Act, 1852, (15 & 16 Viet. c. 76), s. 18. 

The defendant made a promise of marriage to the plaintiff whilst both parties 
were residing abroad. Both afterwards came to England, where the defendant 
wrote a letter to the plaintiff renouncing the contract. He afterwards left the 
country. The plaintiff, under 15 & 16 Viet. c. 76, s. 18, issued a writ indorsed 
for service abroad. The defendant, having been served with the writ abroad, 
moved to set it aside : 

Held (by Martin, Pigott, and Cleasby, BB. ; Kelly, C.B., dissenting), that the 
writ was rightly issued. 

By Pigott and Cleasby, BB. (agreeing with Jackson v. SpiUall (Law Rep. 
5 C. P. 542),) that cause of action in s. 18 means the act or omission constituting 
the violation of duty complained of, and not the whole cause of action. 

IN tins action a writ had been issued under 15 & 16 Yict. c. 76, 
s. 18, for service abroad under the following circumstances : The 
defendant, whilst resident at the Cape of Good Hope, bad made a 
promise of marriage to the plaintiff, who was then resident at 
Calcutta. On returning to England, he wrote a letter to the 
plaintiff, who was then also in England, renouncing the contract, 
and this was the breach complained of. He had since gone back 
to the Cape, where he was served with the writ in this action. 

The 15 & 16 Yict. c. 76, s. 18, enacts that, in case any defend- 
ant, being a British subject, is residing out of the jurisdiction 
of the superior courts (except in Scotland or Ireland), the plaintiff 
may issue a writ in the form specified, indorsed for service out of 
the jurisdiction, "and it shall be lawful for the Court or judge, 
upon being satisfied by affidavit that there is a cause of action 
which arose within the jurisdiction, or in respect of the breach of a 
contract made within the jurisdiction, and that the writ was per- 
sonally served, or, &c." from time to time to give the plaintiff 
liberty to proceed in the action. 

Nov. 24. Day moved to set aside the writ and all proceedings 
under it. The whole cause of action not having arisen within the 
jurisdiction, the 18th section does not apply. Sichel v. Porch (1) 

(1) 2 II. & C. 954 ; 33 L. J. (Ex.) 170. 



VOL. VI.] MICH. TERM, XXXIV VICT. 47 

and Alllmsen v. Malgarejo (1), decided under s. 19, are in favour of 1870 
this view ; Chapman v. Cottrell (2) is consistent with it ; and Fife v. DURHAM 
Round (3) and Jackson v. Spittall (4) are opposed to it. 

Petlieram shewed cause in the first instance, and referred to 
Day's Common Law Procedure Acts, pp. 18, 19 (3rd. ed.) 

Day, in reply. 

Cur. adv. vult. 

Nov. 25. The following judgments were delivered : 

PIGOTT, B. There is unfortunately a difference of opinion in 
the Court on this case, and I have now to express my own opinion, 
which is in accordance with the doubt I expressed in the earlier 
case in this Court of Sicliel v. Borcli. (5) Since that decision a 
case has occurred in the Court of Common Pleas, in which, in a 
very clear and elaborate judgment, the learned judges of that court 
came to a conclusion contrary to the case of Sicliel v. Borcli (5) and 
the case of Alllmsen v. Malgarejo (1) in the Queen's Bench, which 
followed it. 

After full consideration I adopt the view taken in the Court of 
Common Pleas in Jackson v. Spittall (4); and I do so because it 
appears to me to be in accordance with the true meaning of the 
words used by the legislature, and because it is in furtherance of 
the object which the legislature had in view in framing the section. 
The 18th section permits the service of the writ abroad whenever 
the cause of action arises within the jurisdiction or there is a 
breach without the jurisdiction of a contract made within it. The 
state of facts on which the question arises here is, that a promise 
of marriage was made between two persons residing respectively at 
the Cape of Good Hope and at Calcutta, which promise was to 
be performed in England ; or, if not, it was at any rate to be per- 
formed in a reasonable time, and that reasonable time elapsed and 
the time for performance arrived, and the refusal to perform, 
which constitutes the breach, took place when both parties were 
in England. What, then, did the legislature mean when it spoke 

(1) L.-UV Ecp. 3 Q. B. 340. (4) Law Rep. 5 C. P. 542. 

(2) 3 II. & C. 805; 34 L. J. (Ex.) (5) 2 H. & C. 054 ; 33 L. J. (Ex.) 
18G. 179, UO. 

(?. C \V. 1\. 2S2. 



48 COUET OF EXCHEQUER. [I,. E. 

1870 of the cause of action arising in England ? Did it mean what 
DURHAM h as teen termed the whole cause of action; that is, both the con- 



SPEKCE t rac t and the breach ? I think that is not the true construction. 
I understand by cause of action that which creates the necessity 
for bringing the action. No doubt, to make the act or omission 
complained of a cause of action, a contract must have preceded, 
but so also a negotiation must have preceded the making of the 
contract ; yet I should not include in the expression cause of action 
that negotiation, nor any of the other circumstances that might 
form part of the necessary evidence in the cause as the ground- 
work of the cause of complaint, but only the cause of complaint 
itself, that is, the breach. That this was the intention of the 
legislature, I think, appears from the alternative case put in the 
section, which allows of redress being obtained in England for a 
breach of a contract which was made here, although the breach 
may have taken place abroad. In this latter case it is evident the 
legislature did not consider it necessary that the whole cause of 
action should arise here ; and I infer that it intended to give a 
remedy here equally in the corresponding case ; that when, for 
instance, a man contracts in China to deliver goods in England, and 
by failing to deliver them here creates a breach of contract and a 
cause of action here, there should be redress in the English courts 
as much as when a contract is made in England and broken in 
China. 

I cannot, therefore, take any other view than that adopted by 
the Court of Common Pleas ; and 1 think we are not justified in 
introducing into the section a word not found there, and saying 
that when the legislature says cause of action it means whole cause 
of action, and not that which the words used naturally express, 
namely, the fact which gives rise to the action. 

MARTIN, 13. I am also of opinion that this writ was rightly 
issued. The statute says that the proceedings it describes may be 
taken whenever there is a cause of action arising within the juris- 
diction or in respect of a breach without the jurisdiction of a 
contract made within the jurisdiction. Now, here the contract 
was made without the jurisdiction ; but a contract of marriage 
constitutes a continuing relation between the parties, by which 



VOL. VI.] MICH. TEEM, XXXIV VICT. 40 

they remain mutually bound to one another until the obligation is 1870 
in some way dissolved. "While the parties were under this obliga- DURHAM 
tion, both came to England, and in England the defendant wrote 
to the plaintiff a letter which would be evidence of a breach, the 
breach itself being the non-performance of the contract within a 
reasonable time. When the reasonable time for performance 
elapsed, and the defendant refused to fulfil his obligation, a cause 
of action did, within the meaning of the statute, arise, and it arose 
in England, because that is the place where the parties were when 
the breach took place. We were pressed with the case of Sichel v. 
Borch (1), but I think that decision not inconsistent with the judg- 
ment I am now pronouncing, and I adhere to it. There a bill was 
drawn in Norway, and was indorsed there, but, being drawn on a 
merchant in London, it was sent over here for payment, was pre- 
sented in London by a person who became entitled to it by in- 
dorsement, and was dishonoured. It was contended that the 
dishonour of the bill was a cause of action arising in England ; 
but I thought that a reasonable construction must be given to the 
Act, and I held, and still hold, that the Act was never intended to 
embrace cases of that kind, or to make a foreign merchant liable to 
be sued here, whose only connection with England is that he has 
drawn a bill upon this country, where he has perhaps neither 
establishment nor agency. The Court of Queen's Bench has 
assented to that judgment, after consideration, in the recent case 
of Allliusen v. Malgarejo (2), and I think we ought not to depart 
from it. 

KELLY, C.B. I entirely concur in the regret expressed by my 
Brother Pigott, that a difference of opinion should prevail in the 
court on a matter of daily practice, but I find it impossible to concur 
in the view entertained by the rest of the Court. The difficulty, 
however, which arises from the ambiguity of the terms used in the 
Act, must be met according to the best of our individual judgment, 
assisted by such authority as can be found upon the subject. In 
Alllmsen v. Malgarejo (2) the Queen's Bench, following the rule- 
laid down in this court in Sichel v. Porch (1), has held that by cau-o 
of action in 15 & 16 Viet. c. 76, s. 18, the legislature meant whole 

(1) 2 H. & C. 954; 33 L. J. (Ex.) 170. (2) Law Rc r . 3 Q. P. 3-:0. 
VOL. VI. E 3 



50 COUET OF EXCHEQUEE. [L. E. 

1870 cause of action, and not merely the act which constitutes the 
DURHAM breach. Quite independently of authority, that is the construction 
v ' I should have placed upon the words. If, as is required by the 
opposite construction, the words cause of action are to be read as 
equivalent to the words " breach of contract," I can see no reason 
why, inasmuch as the latter words are used in the second branch 
of the alternative, they should not also have been adopted in the 
first, instead of the ambiguous phrase, cause of action. But, further, 
it appears to me contrary to the plain and ordinary meaning of the 
terms, to say that the act, which merely completes the cause of 
action, is the cause of action. Of itself, the act or omission, the 
non-payment, non-acceptance, or non-delivery, does not constitute a 
cause of action ; what makes it such, that without which it would 
have no legal quality at all, is the contract that the person whose 
default is complained of, should pay, accept, or deliver. To make 
up a cause of action, therefore, it is necessary to import the pre- 
ceding contract ; and the cause of action can only be said to arise 
where both parts of it take place. That is the construction I put 
on the words of the Act ; and I see no reason to alter these words 
for the purpose of giving them an operation which I do not believe 
to have been intended. The section acts beneficially to prevent 
the evasion of the payment of just debts, or of the performance of 
obligations contracted here, by keeping out of the reach of service ; 
but it would be productive of great injustice if it were made appli- 
cable to the case of a foreigner residing at a distance, without 
knowledge of the process of our courts, or of the persons to whom 
he should resort for advice, and without any connection whatever 
with this country except that a breach has occurred here of a con- 
tract made by him in his own country. The facts in the case of 
Sichel v. Borch (1), which is now questioned, illustrate the practical 
inconvenience and injustice which would result from the contrary 
decision. In that case a Norwegian merchant, resident in Norway, 
drew there a bill which he indorsed to a firm in London ; if he had 
indorsed it to a Norwegian in Norway, and it had by subsequent 
indorsement become vested in an indorsee in London, the case 
would, according to the view contended for, have been the same ; 
and in such a case there would be a contract wholly completed in 
(1) 2 H. & C. 954 ; 33 L. J. (Ex.) 179. 



VOL. VI.] MICH. TEEM, XXXIV VICT. 51 

Norway between parties resident there. Now, if a person resident ISTO 
in England chooses to take such a bill from abroad, there is no DURHAM 
injustice in saying that he ought to sue in the country where the 
contract was made ; but there would be a great injustice and incon- 
venience if he should be entitled to sue here the maker of the bill, 
and if the latter should be liable to be served with process, and 
should be compelled to instruct an attorney in England, where 
perhaps he has no connections and no funds. The contract is by 
the ordinary rules of international law to be regulated by the law 
of the country where it is made; but, according to this view, 
the matter is to be judged and determined, not in that country 
whose law is to be administered, but in this country, where that 
law is unknown, only by reason of the plaintiff's being entitled to 
require performance here. 

In my opinion, therefore, the meaning of the words, as well as 
the intention of the Act, is that a remedy should be afforded in 
England in respect of contracts made here, whether the] breach 
takes place in England or abroad ; but that it was never designed 
to extend the remedy to the case of contracts made abroad, and 
only broken here ; and that, if that had been the intention, it 
would have been, as it easily might be, expressed in clear and 
distinct terms. 

I therefore entirely adhere to the judgment of this Court in 
Sichel v. Borch (1), confirmed as it is by the case of AWiusen v. 
Malgarejo (2) in the Court of Queen's Bench ; and I cannot concur 
in the point of view taken by my Brother Martin, according to 
which the present case would not fall within the principle there 
laid down, by reason of the contract here being a contract con- 
tinuing until breach, and, therefore, subsisting between the two 
parties whilst both were in England. 

I have perused the judgment of the Court of Common Pleas in 
Jackson v. Spittall (3), and although I recognise the inconvenience 
there dwelt upon, which may in some cases be caused by the want 
of a remedy in this country, yet the rule which we are to act upon 
is a general one, and the balance, both of justice and expediency, 
appear to me to incline strongly to the opposite side. 

(1) 2 H. & C. 954 ; 33 L. J. (Ex.) (2) Law Rep. 3 Q. B. 340. 

179. (3) Law Rep. 5 C. P. 542. , 

E 2 3 



52 COUKT OF EXCHEQUER. [L.R. 

1870 CLEASBY, B. I agree in discharging this rule. The difficulty 

DURHAM appears to me to arise altogether from departing from the words 

SPENCE use< ^ * n ^ e ^ c *' ^ " rea( ^ them as they stand, I think they are 

intelligible ; but if I introduce another word, and for cause of 

action say whole cause of action, I can no longer understand them. 

Does it include every act of every description which concurs to 

make the cause of action, or only some portion of those acts, and 

if so, what portion ? I cannot say. The whole cause of action, if 

it has any meaning, includes everything necessary to the cause of 

action, and must include the negotiation as well as the contract. 

Now the cause of action must have reference to some time as 
well as to some place ; does then the consideration of the time 
when the cause of action arises, give us any assistance in deter- 
mining the place where it arises ? I think it does. The cause 
of action arises when that is not done which ought to have been 
done, or that is done which ought not to have been done. But 
the time when the cause of action arises, determines also the place 
where it arises ; for when that occurs which is the cause of action, 
the place where it occurs is the place where the cause of action 
arises. I cannot avoid the conclusion that a cause of action arises 
where that takes place which first makes a cause of action ; the 
contract does not make a cause of action ; but a cause of action 
does arise when and where the person who has entered into the con- 
tract does or omits to do that which gives a cause of action. But 
the whole cause of action in the sense which makes it include both 
the contract and the breach, arises nowhere. I agree with my 
Lord in thinking that some inconvenient consequences may arise 
from our so holding ; but, on the other hand, if a man enters into 
a contract which is to be "performed in England, he by his own 
act subjects himself to the difficulty, and can scarcely complain if 
he is sued for his default in the place where he has said perform- 
ance shall be made. 

If I could otherwise have hesitated in corning to this conclusion, 
the argument in the judgment of the Court of Common Pleas in 
Jackson v. Spittall (1) appears to me quite unanswerable. In sub- 
stance it is this: when the section speaks of a cause of action 
arising within the jurisdiction, and then goes on to say, " or in 
(1) Law Rep. 5 C. P. at pp. 551, 552. 



Rule discharged. 



Attorneys for plaintiff: Dale & Stretton. 
Attorneys for defendant : Stocken & Jupp. 



YOL. VI] MICH. TERM, XXXIV VICT. 53 

respect of the breach of a contract made within the jurisdiction," it 1870 
must be taken in the second alternative to repeat the words " cause DUBHAM 
of action," and would if it were expanded, run thus : " or a cause 
of action in respect of the breach of a contract made within the 
jurisdiction." That being so, it is plain that in this branch of the 
alternative, the words cause of action cannot mean whole cause of 
action, because, by the assumption, the contract is made within the 
jurisdiction, and the breach takes place without the jurisdiction. 
It means the breach of contract out of which the action arises. If 
so, then it means the same in the first branch of the alternative ; 
and the only difference is, that here it is immaterial to consider 
where the broken contract was made, or where the right, whatever 
its nature, was acquired, which has been infringed ; it is sufficient 
if the injurious act or omission took place here ; whereas in the 
second alternative, where the breach takes place abroad, it is only 
contracts made here that are protected by the section. 



[IN THE EXCHEQUER CHAMBER.] Dee. 2. 

THE SOUTHAMPTON STEAM COLLIERY COMPANY v. CLARKE. 

Charterparty Futt and Complete Cargo Freight "Baltic" printed Rates 
Cargo of " Oats or other lawful Merchandise? 

By a charter-party the defendant, the charterer, undertook to load at Archangel 
" a full and complete cargo of oats or other lawful merchandise," and the plaintiffs, 
the shipowners, to deliver the same on being paid freight as follows : " 4s. Gd. 
sterling per 320 Ibs. weight delivered for oats ; and if any other cargo be shipped, 
in full and fair proportion thereto, according to the London Baltic printed rates." 

The defendant put on board at Archangel a full and complete cargo of flax, 
tow, and codilla, being three of the articles mentioned in the Baltic printed rates, 
and paid to the plaintiffs the freight earned by the goods thus shipped according 
to a scale derived from the tables which constitute the Baltic rates. The plain- 
tiffs claimed, in addition, the difference between this amount and the larger amount 
which would have been earned by a full and complete cargo of oats : 

Held (affirming the judgment of the Court below), that flax, tow, and codilla 



54 COUKT OF EXCHEQUER [L. E. 

1870 being "lawful merchandise" within the meaning of the charterparty, the defend- 
ant had fulfilled his contract by loading a full and complete cargo of those articles, 



c and, therefore, was not, on the true construction of the charterparty, liable for the 

COLLIERY Co. additional freight claimed by the plaintiffs as upon a full cargo of oats. 
v. 

APPEAL by the plaintiffs from a decision of the Court of Ex- 
chequer, discharging a rule to enter a verdict for them. (1) 

June 27. The case was argued by 

Manisty, Q.C. (Cohen with him), for the plaintiffs ; and by 
Field, Q.C. (Gadsden with him), for the defendant. 
The following authorities, in addition to those referred to in the 
Court below, were cited during the argument : CoeJcburn v. Alex- 
ander (2) ; Irving v. Glegg (3) ; Cole v. Meek (4) ; Hoorsom v. 
Page (5) ; Russian Steam Navigation Co. v. Silva. (6) 

Cur. adv. vult. 

Dec. 2. The judgment of the Court (Willes, Keating, Black- 
burn, Mellor, and Montague Smith, JJ.) was delivered by 

BLACKBURN, J. This is an appeal from the judgment of the 
Court of Exchequer in discharging a rule to set aside the verdict 
found for the defendant. 

The case was argued in last sittings before my Brothers Willes, 
Keating, Mellor, Montague Smith, and myself, when the Court took 
time to consider. The Chief Justice of the Queen's Bench, who 
only heard a small part of the argument, is not a party to this 
judgment. 

The whole question depends on the construction of a charter- 
party, the material parts of which were that the plaintiffs' ship 
was to proceed to Archangel, " and there load from the factors of 
the said merchant (the defendant) a full and complete cargo of 
oats or other lawful merchandise, to be brought to and taken from 
alongside free of risk and expense to the ship, and not exceeding 
what she can reasonably store and carry," and, being so loaded, 
should deliver the same at her port of destination " on being paid 

(1) Eeported Law Rep. 4 Ex. 73, (4) 15 C. B. (N.S.) 795 ; 33 L. J. 
where the facts are fully stated. (C. P.) 183. 

(2) 6 C. B. 791. (5) 4 Camp. 103. 

(3) 1 Bing. N. C. 53. (6) 13 C. B. (N.S.) 610. 



VOL. VI.] MICH. TERM, XXXIV VICT. 55 

freight as follows : 4s. 6d. (say four shillings and sixpence sterling) 1870 
per 320 Ibs. English weight delivered for oats, and if any other SOUTHAMPTON 
cargo be shipped to pay in full and fair proportion thereto accord- ~ TEAM 
ing to the London Baltic printed rates, taking as a basis for natural ^ 
weight of the oats 36 Ibs. (English) per bushel. . . . The freight 
to be paid on unloading and right delivery." 

Copies of the London Baltic printed rates form part of the case 
on appeal. They fix the proportions of the freight of a great 
many articles; so that the freight of one of those enumerated 
articles being ascertained, it only requires the working out of a 
sum in proportion to ascertain the freight of any other of the 
enumerated articles. The part of the tables referring to the freight 
of codilla, flax, and oats are as follows : " codilla " is to pay one- 
half more than the freight of clean hemp ; " flax, in all cases, the 
same freight as hemp;" and under the head of "grain" it is 
provided thus: "Wheat, ninety-seven imperial quarters equal 
to ten tons of clean hemp ; oats to pay 22^ per cent, less than 
the freight of wheat." 

When, therefore, the freight for a quarter of oats is ascertained, 
that for a quarter of wheat is to bear to it the proportion which 
1000 bears to 775, so that the rate for a quarter of wheat in pro- 
portion to any fixed rate for a quarter of oats can be worked out. 

The following figures, if the sums are correctly worked out, 
would be the proportions in the present case : If a bushel of oats 
weighs 36 Ibs., a quarter of oats must weigh 288 Ibs. ; and, conse- 
quently, if 320 Ibs. pay 4s. 6d., a quarter must pay 4s. and six 
tenths of a penny. Taking this as the rate for oats, a quarter of 
wheat must pay a fraction more than 5s. 2^d. The rate for a 
quarter of wheat being fixed, that for a ton of hemp or of flax is to 
bear the proportion to it which ninety-seven bears to ten, which, at 
the above rate for wheat, makes very nearly 21. 10s. 8%d. for a ton 
of hemp or flax ; and as codilla is to pay one-half more, the freight 
for codilla on the same calculation is very nearly 31. 16s. 

The first question that arises is, what is the true construction of 
the charterparty ? Mr. Manisty, for the appellants, contended 
that the words, " if any other cargo be shipped to pay in full and 
fair proportion thereto," mean that the amount of freight payable 
for the other articles which constitute that other canro should be 



56 COURT OF EXCHEQUER [L. R. 

1870 so fixed that the aggregate freight for the whole bulk of that 

SOUTHAMPTON other cargo should equal that which would have been payable for 

STEAM a car g O O f oa t s> and that the reference to the London Baltic printed 

rates is only for the purpose of fixing the relative rates of those 
CLARKE 

other articles between themselves. 

This construction would render it necessary after the whole 
cargo was supplied to go through a most elaborate calculation in 
order to ascertain what sum was to be inserted in the bill of lading for 
each article, as the freight to be paid on the delivery of that article. 

But we do not think that this is the true construction of the 
charterparty. We think it is merely a mode of writing shortly 
that the freight for each article mentioned in the London Baltic 
printed rates shall be that which on working out the sum in pro- 
portion would be the rate for that article when oats were at the 
specified rates. Taking this view (and assuming the figures above 
worked out to be correct) the charterparty has the same effect as 
if it had been expressed thus, " and if any other cargo be shipped, 
to pay for wheat 5s. 2^d. per quarter, for hemp or flax 21. 10s. 8d. 
per ton, for codilla or tow 37. 16s. per ton," and so on, inserting the 
proportionate rate for each of the articles enumerated in the printed 
Baltic rates. And this is the construction which was put upon the 
bill of lading in Russia Steam Navigation Company v. Silva (1), 
where evidence of usage was received; but my Brother Willes 
expresses an opinion, in which we concur, that the construction 
would have been the same without any evidence. This also is the 
construction put upon the charterparty in the court below, and we 
think it correct. The freight, therefore, for the cargo actually 
carried, consisting of 30 tons of flax, 4 tons of codilla, and 134 tons 
of tow, would, at the above figures, amount respectively to 
761. Os. 7d. 9 157. 4s., and 5091 4s., or in all, 6007. 8s. 7d. In the 
case the figures arrived at by the calculations are stated differently, 
and amount fo 6027. Os. 6d. As the larger sum has been paid, it 
is not necessary to inquire where the error lies. " 

As the articles actually carried are all provided for by the 

printed rates and the custom of trade, which reckons tow as 

codilla, it is unnecessary to express any opinion as to what would 

have been the case if articles not so provided for had been offered 

(1) 13C.B. (N.S.)610. 



VOL. VI.] MICH. TEEM, XXXIV VICT. 57 

as lawful merchandise. But another question was raised on the 1870 
appeal on which there is more difficulty. SOCTHAMITOX 

The articles tendered for cargo were of so slight a specific COLLMK^CO 
gravity that the ship was obliged to ship an unusually large pro- ^ r - 
portion of ballast, so that she carried only 168 tons of cargo to 120 
tons of ballast, and the freight earned was in consequence not very 
much more than one-half of that which would have been carried if 
the cargo had consisted of oats. If, therefore, the shipper has a 
right under such a charterparty to supply any of the enumerated 
articles in such proportions as suits his own convenience, without 
any regard to the interest of the shipowner, the defendant has 
pushed his right to an extreme, and we should be glad to find that 
there was something to prevent his doing so. But we can find 
nothing to enable us to do so. 

The general rule in construing a contract which gives an alter- 
native is, that the party who is to do the first act, which cannot be 
done without determining which it shall be, shall have the election : 
see Com. Dig. Tit. Election A. And applying this rule where there 
is a contract that the shipper shall supply a full cargo, consisting of 
one or more of several articles ; the shipper has the right to elect 
which of those articles he will supply. And when a full cargo is 
supplied it is (in the absence of any stipulation express or implied 
to the contrary) the shipowners' duty to procure what ballast he 
may require for that cargo: Towse v. Henderson. (1) It seems 
clear that if the only articles specified in the charterparty had been 
those which the shipper, having an alternative, chose to supply, the 
shipowner must have furnished the large proportion of ballast gratis. 

It might have been prudent for the shipowner to protect him- 
self against an extreme use of this privilege, by stipulating that 
the freight should not be less than some fixed sum, if the freighter 
would have assented to such a stipulation ; but as we have already 
said, we cannot assent to the argument that such a stipulation is 
expressed by the words, " in full and fair proportion." It might also 
have been prudent to insert a stipulation that the shipowner should 
not be bound to supply more ballast than bore a reasonable pro- 
portion to the cargo shipped, say, for example, one ton of ballast 
to ten of cargo, and should be paid dead freight for the excess of 

(1) 4 Ex. 890. 



58 COUET OF EXCHEQUER [L. B. 

.1870 ballast, and a custom to that effect would not be unreasonable. 
SOUTHAMPTON But there is no such stipulation, and the jury found that there is 
such custom. (1) 



The only remaining question is, whether any such qualification 
is implied by law. There is no authority for saying that such a 
qualification is implied by law. Moorsom v. Page (2) is a direct 
authority to the contrary. That was, it is true, only a nisi prius 
decision, but it was followed in Irving v. Glegg (3), and approved 
of in Cole v. Meek (4), though the Court there thought that on 
the construction of the charterparty before them there was a stipu- 
lation to supply broken stowage. Fifty-six years have elapsed 
since Moorsom v. Page (2) was decided, "and we cannot find that 
during all that time it has ever been questioned, and it may be 
worth noticing that in the Baltic printed rates there is an express 
provision that the rate of freight for mats from Archangel shall 
only be where they do not exceed .one-sixth of the ship's cargo, 
which seems a stipulation inserted for the very purpose of guard- 
ing against the abuse of the power known by the merchants to 
exist. It is so important that the law should be fixed, and that 
mercantile men should know what their documents will be held to 
mean when construed in a court of law, that we should be slow to 
overrule a case so long acted upon, even if we thought that if it 
was res integra we should have decided the other way. But think- 
ing, as we do, that the case was rightly decided, we must hold that 
in the absence of any stipulations, express or implied, to the con- 
trary, the shipper may supply a full cargo of any one or more of 
the articles enumerated in the charterparty, and that the ship- 
owner must protect himself against any hardship that may arise 
from an extreme use of this privilege, by a stipulation on his 
part. 

We think, therefore, that the judgment below was right, and 
should be affirmed. 

Judgment affirmed. 

Attorneys for'plaintiffs : Westall & Roberts. 
Attorney for defendant : J. Cooper. 

(1) Law Eep. 4 Ex. at p. 75. (4) 15 C. B. (N.S.) 795 ; 33 L. J. 

(2) 4 Camp. 103. (C.P.) 183. 

(3) IBing. N. C. 53., 



VOL. VI.] MICH. TERM, XXXIV VICT. 



BAIN AND OTHERS v. FOTHERGILL AND OTHERS. 1870 

Vendor and Purchaser Sale of Residue of a Lease Equitalle Interest in Agree- 
ment/or Lease Defect of Title Measure of Damages for Breach of Contract 
by Vendor. 

The executors of H. having an agreement for a twenty-one years' lease of an 
iron ore royalty, contracted to assign their interest in the term to the defendants. 
In order to perfect the assignment, the consent in writing of the lessors was, 
under the terms of the agreement, necessary. The lessors were at the time of the 
contract willing to consent conditionally on the defendants signing a duplicate form 
of consent, whereby it was provided that no further assignment should take place 
without a fresh consent. Before the defendants had fulfilled this condition, and 
without the consent of the lessors to the assignment to the defendants having been 
obtained, and without any fresh consent from them to another assignment of the 
term, the defendants contracted to assign their interest in the royalty to the 
plaintiffs. At the time of their entering into this contract they knew that the 
consent of the lessors to the assignment to third parties was necessary, but no 
mention of the necessity of such consent was then made to the plaintiffs. The 
defendants afterwards fulfilled the condition upon which the lessors had originally 
been willing to consent to the assignment to them, but the lessors had meanwhile 
withdrawn their consent, and although the defendants used all reasonable means 
they failed to obtain the lessors' consent either to the assignment from the exe- 
cutors of H. to them or to the assignment from them to the plaintiffs. They 
were, therefore, unable to carry out their contract with the plaintiffs, who brought 
this action to" recover the deposit money which they had actually paid, the ex- 
penses incidental to the investigation of the defendants' title, and also damages 
for the loss of their bargain : 

Held, that the case was within the principle of Flureau v. Tltornhill ('2 W. 
Bl. 1078), and that the plaintiffs were only entitled to recover their deposit money 
and the expenses incidental to the investigation of the defendants' title. 

SPECIAL case. 

The plaintiffs carry on business as ironmasters at Harrington, 
in the county of Cumberland, under the name of Bain, Blair, & 
Paterson. 

The defendants, under the name of the Plymouth Iron Com- 
pany, carry on ironworks in Wales, and amongst others, several 
of those which formerly belonged to a certain Mr. Anthony Hill, 
now deceased. Anthony Hill was possessed of numerous iron- 
works and of extensive iron ore mines under several unexpired 
leases or agreements for leases, and amongst others, he was pos- 
sessed of a Miss Watter's royalty, consisting of the iron ore mines 
under a property called Crossfield, at Cleaton, in the county 



60 COUKT OF EXCHEQUER [L. K. 

1870 of Cumberland, by virtue of an agreement dated the 19th of 
BAIN "October, 1861, for a lease for the term of twenty-one years, to be 
FOTHEEGILL com P u ted from the 20th of March, 1860. That agreement con- 
tained a clause providing against the assignment or subletting of 
the premises thereby agreed to be demised without the consent of 
the lessors in writing being first obtained. 

Mr. Hill died on the 2nd of August, 1862. In August, 1863, his 
executors entered into a contract with the defendants for the sale to 
them of all the above-mentioned ironworks and mines of Anthony 
Hill, including his interest in Miss Watter's royalty, for the sum 
of 250,OOOZ., but the purchase had not been completed on the 17th 
of October, 1867. In order to enable them to carry out the assign- 
ment to the defendants of their testator's interest in Miss Watter's 
royalty the executors applied to the lessors for their consent to 
such assignment. The lessors were willing to give such con- 
sent, provided the defendants would execute a duplicate of it. 
A consent in writing was accordingly prepared in duplicate, and 
on the 16th of June, 1865, one part was executed by the lessors 
and retained in the hands of their solicitor. The other part was 
sent on the 15th of June, 1865, to the solicitors acting for the 
executors, who immediately sent it to the defendants' solicitors for 
execution by the defendants. The consent was limited to the 
assignment from Hill's executors to the defendants, and provided 
that nothing therein contained should authorize the defendants to 
assign any part of the premises comprised in the agreement of the 
19th of October, 1861, without the previous consent in writing of 
the lessors. 

On two or three occasions subsequently to the month of June, 
1865, the solicitor for the lessors requested the solicitors of the 
executors to obtain the execution by the defendants of this dupli- 
cate consent or licence, and about the llth of October, 1865, 
intimated that the lessors would withdraw their consent unless 
the duplicate was returned executed in a few days. This intima- 
tion was communicated on that day to the solicitors of the defend- 
ants ; but, notwithstanding, the duplicate consent remained in the 
hands of the defendants' solicitors unexecuted at the time when 
the agreement now in question of the 17th of October, 1867, was 
entered into. 



VOL. VI] MICH. TERM, XXXIY YICT. 61 

Miss Walter's royalty formed a small item amongst the large 1870 
properties called the Plymouth Ironworks, comprised in the con- BAIX 
tract of August, 1863. Numerous abstracts of title were at various FoTH ^ GILL 
times delivered to the defendants' solicitors in respect of the several 
properties, and questions arose upon some of them which were the 
subject of negotiation between the defendants' solicitors and the 
solicitors of the executors, and were not finally settled until October, 
1868, when the purchase of all the properties comprised in the 
contract of August, 1863, was completed. Except upon the ques- 
tion of the licence to assign no difficulty arose as to the title to 
Miss Watter's royalty, though its conveyance to the defendants 
was delayed by the investigation of title of other portions of the 
property. 

On the 17th of October, 1867, Mr. Paterson, one of the plaintiffs, 
had an interview with the defendant Fothergill with the view of 
purchasing the defendants' interest in Miss Watter's royalty. The 
terms were discussed between them, and an agreement was written 
out by Mr. Fothergill and signed by both parties in these terms : 

"Plymouth Ironworks, near Merthyr Tydvil, 
" Messrs. Bain, Blair, & Patersou, " October 17, 1867. 

" Gentlemen, We offer to sell you our interest in Miss Watter's 
royalty in Cumberland upon the following terms, namely, 25007. 
to be paid us in cash on our handing you a transfer of the said 
royalty [here followed other terms, which it is unnecessary to 
state in detail.] A deposit of 2507. to be made us forthwith, and 
the which arrangement to be carried out and accomplished as soon 
as may be. The usual covenants for our protection as standing 
between you and our lessors to be made by you. 

(Signed) " Eichard Fothergill, 

" For the Plymouth Iron Co. and Self. 
" We accept of offer on terms stated. 

" Bain, Blair, & Paterson, 

" p. John Paterson." 

The agreed deposit of 2507. was then paid by Mr. Patersou to 
Mr. Fothergill, and a receipt was written at the foot of the agree- 
ment, and signed by Mr. Fothergill. 

Before acceding to the terms set forth in the above agreement. 



02 COUET OF EXCHEQUER. [L. K. 

1870 and before those terras were reduced into writing, Mr. Paterson 

BAIN asked for time to consult his partners, but Mr. Fothergill said he 

* never left offers open, and that Mr. Paterson must decide it at 

JbOTHEKGILL. 

once. The bargain was thereupon concluded. 

Before the 17th of October, 1867, Mr. Fothergill had been 
informed that it would be necessary to obtain the consent of the 
lessors for the assignment to third parties of the defendants' interest 
in the royalty, but at the meeting with Mr. Paterson no mention 
was made by him of the necessity for such consent. Either it did 
not cross his mind, or if it did occur to him he forbore to mention 
it, feeling sure that no difficulty would arise in respect to it, and that 
the matter was therefore one of no importance. In mining leases 
in Cumberland it is usual to provide against transfer or subletting 
without the consent or licence of the lessor, but Mr. Paterson was 
not actually informed of the necessity in the present case until, on 
his return to Cumberland a few days after his interview with 
Mr. Fothergill, he learned it from a person who had himself been 
in treaty with the defendants for the royalty. On the 24th of 
October Mr. Paterson saw the agent of the lessors, who told him 
there was still a consent to be signed by the defendants in relation 
to the transfer from Hill's executors to them ; and on the follow- 
ing day the plaintiffs accordingly wrote a letter to Mr. Fothergill 
asking him to do what was necessary to give the plaintiffs early 
possession. Shortly after the receipt of this letter the defendant 
Fothergill wrote to the lessors' agent, informing him of the dis- 
position of the defendants' interest, and requesting him to facilitate 
the transfer to the plaintiffs. 

After some further correspondence and negotiations, both by 
the plaintiffs and Mr. Fothergill with the lessors' agent, which 
proved ineffectual, Mr. Fothergill on the 16th of November, 1867, 
wrote to the plaintiffs a letter in the following terms, proposing to 
cancel the contract: "A condition exists, of which I certainly 
knew nothing, exacting a consent which I have no means of obtain- 
ing, and which I am advised is absolutely essential to action, and 
which consent both you and 1 have tried in vain to obtain. Is it 
not, therefore, better to abandon an arrangement which we cannot 
carry through ?" 

The defendants' solicitors had not, prior to the 17th of October, 



VOL. VI.] MICH. TERM, XXXIV VICT. G3 

1867, mentioned to the defendants the subject of the first consent 1870 
of the lessors being necessary ; and, in fact, the application by the BAIN 
executors' solicitors in 186$ to procure the signature of the de- FOTHEBGILL 
fendants to the consent was considered by the defendants' solicitors 
premature, it being then uncertain whether the title to the 
Plymouth Ironworks, which was the principal part of the pro- 
perty purchased, could be perfected. The consent of the lessors 
for the assignment to the defendants was withdrawn by the lessors 
on the 6th of January, 1868. 

In May, 1868, the title to the Plymouth Ironworks having then 
been satisfactorily shewn, the duplicate consent of the loth of 
June, 1865, was executed by the defendants, and sent to the soli- 
citors for Hill's executors. On the 25th of June following, the 
consent so signed by the defendants was tendered to the solicitor 
for the lessors in order to be exchanged for the consent executed 
by the lessors, but their consent having been withdrawn, the form 
which they had executed was no longer in the hands of their soli- 
citor, and from thenceforward their agent absolutely declined to 
consent to an assignment to the defendants, unless the defendants 
would enter into an agreement with another person named Stirling 
for the sale to him of their interest in Miss Watter's royalty, which 
they ultimately did. The plaintiffs, who were not aware of this 
sale, still continued to insist on the performance by the defendants 
of the original agreement, until on the 24th of November, 1868, 
they received a letter from the defendants enclosing a cheque for 
250, the amount of deposit money paid by them. The plaintiffs 
returned the cheque, and commenced this action to recover damages 
for the loss of their bargain. 

The defendants paid into court a sum sufficient to cover the 
deposit, and interest, and the expenses incurred by the plaintiffs 
with reference to the carrying out of the agreement. 

The question for the opinion of the Court, who were to draw 
inferences of fact, was, whether the plaintiffs were entitled to re- 
cover any damages beyond the sum paid into court. If the 
Court should be of opinion in the affirmative, judgment to le 
entered for the plaintiffs for a sum to be assessed by an arbi- 
trator ; if in the negative, judgment to be entered for the de- 
fendants. 



64, COUET OF EXCHEQUER [L. K. 

1870 Quain, Q.C. (Herschell with him), for the plaintiffs. This case is 

BAIN governed by Hopkins v. Grazebrook (1), and not by Flureau v. 

* ThornhUL (2) The defendants were* guilty of a double default. 

FOTHERGILL. v ' 

They were aware that to complete their own title an assent in 
writing by the lessors to the assignment from Hill's executors to 
them was necessary, but through their own carelessness they failed 
to get it. Then, not having obtained it, they assumed to contract 
to assign their interest, which was, in fact, no interest, to the plain- 
tiffs. They could not assign it without a fresh assent to the assign- 
ment, and that second assent they were not in a position to ask for, 
never having completed their own title. Where a vendor is in 
possession, and bona fide believes that he has a good title, he 
is within the rule in Flureau v. Thornhill (2), and, if it turns 
out that his title is not " marketable," he is only liable to repay 
the deposit money and expenses paid by the purchaser. But here 
damages for loss of bargain are recoverable, for the defendants 
knew they had not what they professed to sell. They undertook to 
sell that of which they themselves had not secured the command : 
Robinson v. Harman (3) ; Engel v. Fitch (4) ; Lock v. Furze. (5) 

[CLEASBY, B. The defendants here did not agree to sell the 
property, but only their interest in the property, whatever it. 
might be.] 

That interest could not be anything but the residue of a lease ; 
but, in fact, they had no such residue to sell. 

[CHANNELL, B. In Hopkins v. Grazebrooh (1) there was an 
express contract to make a good title by a day certain. There is 
nothing equivalent in this case.] 

There is here a contract by persons who profess to be the owners, 
and are not in possession, to legally assign the residue of a term 
at a time when two assents by the lessors, both of which were 
necessary, have not been obtained. It may be conceded that the 
defendants may have thought there would be no difficulty in 
getting them. But a man without an actual "holding" title, 
who sells with a mere bona fide expectation of being able to com- 
plete his bargain, is not within Flureau v. Thornhill. (2) 

(1) 6 B. & C. 31. (4) Law Eep. 3 Q. B. 314 ; 4 Q. B. 

(2) 2 W. Bl. 1078. 659. 

(3) 1 Ex. 850. (5) Law Eep. 1 C. P. 441. 



VOL. VI.] MICH. TEEM, XXXIV VICT. 65 

[CLEA.SBY, B. Two consents would not be necessary. The 1870 
lessors might have consented to an assignment direct from Hill's 
executors to the plaintiffs.] 

There would have been insuperable difficulties in such a course 
being adopted. The conditions of the assignment from the execu- 
tors to the defendants and from them to the plaintiffs were alto- 
gether different. Under these circumstances, the defendants are 
liable for substantial damages. Flureau v. Thornhill (1), which 
introduces an exception to the ordinary rule of assessment of 
damages, ought to be strictly limited to cases of " defect in title," 
i.e., to the cases where a vendor being the owner or in possession 
of property with a good " holding " title, fails to satisfy the pur- 
chaser that it is marketable. It has no application where a vendor 
is absolutely in default, and contracts to sell what he lias not. 
Wallcer v. Moore (2) is distinguishable. There the vendor was 
only held liable for actual expenses incurred by the purchaser, but 
he was in possession of the property he professed to sell. 

Manisiy, Q.C. (Hotter, Q.C., and J. B. Mellor with him), for 
the defendants. This case is entirely different from Hopkins v. 
Grazebrook (3), where the ratio decidendi was, that there had been 
an express undertaking by the defendant to make a good title at 
a time when he knew he could not do it, and had no reason to 
suppose he ever would be able to do it. So in Robinson \: Har- 
man(4) there was a breach of an express covenant for quiet enjoy- 
ment. But here there is merely a contract to assign an interest 
in the residue of a term which the defendants had reasonable 
grounds for supposing they would be able to assign in due legal 
form. The case is similar to Sikes v. Wild (5) and to Pounsdt v. 
Fuller /(6) The defendants eventually failed, though they did all 
they could. They were in no default, and their failure was caused 
by what was in the strictest sense a defect in title within the 
meaning of Flureau v. Thornhill. (1) 

Quain, Q.C., in reply. 

MARTIN, B. I think the defendants are entitled to our judgment. 

(1) 2 W. Bl. 1078. (5) 4 B. & S. 421 ; 32 L. J. (Q.U.) 

(2) 10 B. & C. 416. , 375. 

(3) 6 B. & C. 31. (6) 17 C. B. 6GO ; 25 L. J. (C.l\) 

(4) 1 Ex. 850. 145. 

VOL. VI. F 3 




COUET OF EXCHEQUER [L. R. 

1870 A fixed rule in cases such as these is very desirable, and we find 
such a rule in Flureau v. Thornhill ( L), laid down more than a 
hundred years ago, and as binding upon us, in my opinion, 
as any positive statutory enactment. The same rule is enun- 
ciated clearly in Sedgwick on Damages, 4th ed. p. 234, where 
the author says, after referring to the general rule governing the 
assessment of damages : " To this general rule there undoubtedly 
exists an important exception which has been introduced from the 
civil law in regard to damages recoverable against a vendor of 
real estate who fails to perform and complete the title. In these 
cases the line has been repeatedly drawn between parties acting 
in good faith, and failing to perform because they could not make 
a title, and parties whose conduct is tainted with fraud or bad 
faith. In the former case, the plaintiff can only recover whatever 
money has been paid by him, with interest and expenses. In the 
latter, he is entitled to damages resulting from the loss of his 
bargain. The exception cannot, I think, be justified or explained 
on principle, but it is well settled in practice." Now here there 
is no suggestion of bad faith, and according to the practice thus 
laid down for our guidance, a practice which is derived from 
Flureau v. Thornhill (1), all that can be recovered where a 
bargain for the sale of property goes off from a defect in 
the vendor's title is the deposit money, with any other expenses 
incidental to the initial stage of the contract. And the first 
sentence of Mr. Justice Blackstone's judgment in that case shews 
very plainly why this rule ought to be adopted. It is because the 
sale is not absolute, but conditional upon its being found that the 
vendor has a good title. The vendor does not absolutely warrant 
the title, but he must act with bona fides in the matter. The 
law, therefore, touching these cases has thus been laid down, and 
we must act accordingly. 

But then it is contended that the present case is governed by 
Hopkins v. Grazebrook (2), and not by Flureau v. Thornhill. (1) 
Now in Hopkins v. Grazebrook (2), there were circumstances which 
were held to take the case out of the rule of Flureau v. Thornhill (1), 
and I by no means say the decision was wrong. It is quite clear, 
however, from the judgment that Lord Tenterden disapproved of 
(1) 2 W. Bl. 1078. (2) G B. & C. 31. 



VOL. VI.] MICH. TEEM, XXXIV VICT. 67 

Flureau v. Thornhill (1), but his views have not been followed in 1870 
subsequent cases. The doctrine of Hopkins v. Grazebrooh (2), " "JJ AIN 
therefore, ought not to be extended. The true rule is laid down _ v - 

FOTHEKGILL. 

in Engel v. Fitch (3), and seems to me to include the present case. 
It may perhaps be wrong in principle, but we are bound by it, and 
apply it to the facts before us, to which I now proceed to advert. 

It appears that the executors of one Anthony Hill were possessed 
of an agreement for a twenty-one years' lease of an iron ore royalty 
at Crossfield. There was in the agreement a proviso that a lease 
should be forthwith prepared. The lessees could not assign the 
demised premises without the consent in writing of the lessors. 
In August, 1863, the lessees contracted to assign the residue of 
the term to the defendants, who thus became interested in the 
agreement for a lease belonging to Hill's executors. This was, it 
appears to me, an equitable interest, and this, and this only, was 
sold to the defendants. They became entitled, in equity, on the 
sale, to have the agreement performed, subject to the lessors' right 
to object to them as assignees. The consent in writing required 
to the assignment was never in fact obtained, and, without having 
obtained it, the defendants on the 17th October, 18G7, agreed to 
sell their interest in the agreement, and it might perhaps be con- 
tended that what the defendants really sold was the interest they 
had, and that if they were willing to convey that, whatever it was, 
their contract was performed. This point, however, is not relied 
on by the defendants, for it is admitted that they did not perform 
their contract, and that the plaintiffs can recover back the deposit 
they paid, and the expenses, if any, they incurred. As to any 
further damages being recovered, we must remember that the 
defendants, though it may be careless and forgetful, acted with 
unquestionable bona fides. As in Flureau v. Tlwrnliill (1), the 
defendants were willing to complete their contract, and only 
failed because they failed to get the consent which they might 
reasonably have supposed there would be no difficulty in getting. 
Under these circumstances, I think the rule in Flureau v. Tlwrn- 
M?(l), as explained by the judgment of the Court of Exchequer 
Chamber in Engel v. Fitch (3), governs this case. I do not think 

(1) 2 W. Bl. 1078. (2) G 13. & C. 31. 

(3) Law flop. 4 Q. B. C50. 



68 COUET OF EXCHEQUER. [L. E. 

1870 it necessary to go through the other cases referred to in detail. 

BAIN Nor do I wish it to be supposed that I consider Hopkins v. Graze- 

FOTHKRGILL brook (1) to be wrongly decided. That case may have been 

rightly decided, but the decision rests upon its own exceptional 

circumstances. 

CHANNELL, B. I also think that the defendants are entitled to 
judgment. The rule in Flureau v. Tliornliill (2) is anomalous and 
exceptional to the general rule of law as to the damages recover- 
able for breach of contract; it must therefore be carefully applied, 
as indeed it always has been. The case has never been overruled, 
but, whenever it has been discussed, the Courts have upheld it, 
and distinguished other cases from it. With regard to Hopkins v. 
Grazebrook (1), it is noticeable that the case was not fully con- 
sidered, the rule having been refused. The judgment there 
delivered by Lord Tenterden deserves, as do all his judgments, 
the greatest respect, but it is plain that he was not satisfied with 
the decision in Flureau v. TJiornhill (2), which, however, in spite 
of this expression of disapproval, has been acted upon ever since. 
Here the question is, whether, under the circumstances now before 
us, we are to be governed by Flureau v. Thornhitt (2) or by Hopkins 
v. Grazebrook. (1) No\v, in the latter case, the defendant had 
absolutely no- estate, but only a contract for an estate. Neverthe- 
less, he put up the estate for sale on or before a day named, a 
course which involved the necessity of making a good title by 
the day named. Lord St. Leonards, in. his treatise on Vendors 
and Purchasers, 14th ed. p. 359, attaches importance to this fact, 
and it accounts, in my opinion, in some degree for the decision. 
Moreover, the circumstances there seem to shew conduct amount- 
ing to what the law would consider fraud on the defendant's part. 
Other cases have been referred to, which I need not enumerate, 
and especially two were cited for the defendants, Pounseti v. 
Fuller (3) and Sikes v. Wild (4), which seem to me strong autho- 
rities for them, and go to prove that the rule laid down in Flureau 
v. Thornhfll(2) aprlies wherever fraud is not suggested. I think 

(1) 6 P. & C. 31. (3) 17 C. B. 660 ; 25 L. J. (C.P.) 

(2) 2 W. Bi. 1078. 145. 

(4) 4 B. & S. 421 ; 32 L. J. (Q.B.) 375. 



VOL. VI.] MICH. TERM, XXXIV VICT. 61) 

the facts stated in this special case clearly bring the defendants ISTO 
within that rule, and that they are therefore entitled to our 
judgment. 

CLEASBY, B. I am of the same opinion. I do not think tin's 
case is governed by Hopldns v. Grazebrook. (1) The agreement 
between the parties is contained in the letter of the 17th of October, 
containing the defendants' offer to sell their (i interest in Miss 
Watters' royalty." But what was their interest ? It appears that 
they had agreed to purchase a large mining property, including 
Miss Watters' royalty, but they had not actually purchased any 
legal interest whatever. There was only an agreement for a lease, 
with a stipulation that the lease should be prepared in due course. 
The defendants were, therefore, really dealing, not with actual 
property, but only with their interest in a contract relative to 
property. This is quite a different thing from the contract in 
Hopkins v. GrazebrooJc (1), where the defendant undertook to make 
a, good title by a day certain. We are therefore thrown back on 
the rule of Flureau v. Thornhill(2), which establishes that, where 
there is no fraud, and no express contract to sell property with a 
knowledge on the vendor's part that he has not the title to sell, 
as was the case in Hopkins v. Grazebrook (1), no damages for loss 
of bargain can be recovered. Here the defendants merely con- 
tracted to sell their interest, and afterwards did everything they 
could to enable the plaintiffs to have the benefit of that contract. 
They do not seem to me to have been in any default such as to 
take them out of the rule in Flureau v. Thornliill (2), and render 
them liable to the damages claimed. 

Judgment for the defendants. 

Attorneys for plaintiffs : Helder & Kirkbaiik. 
Attorneys for defendants : Thomas & Hollams. 

(1) 6 B. & C. 31. (2) 2 W. Bl. 1078. 

END OF MICHAELMAS TEEM, 1870. 



VOL. VI. G 



70 



CASES 



DETERMINED BY THE 



COURT OF EXCHEQUER 



AND BY THE 



COURT OF EXCHEQUER CHAMBER, 

ON EEEOK AND APPEAL FROM THE COURT OF EXCHEQUER, 



IN AND AFTER 



HILAEY TEEM, XXXIV VICTOBIA. 



1871 MORGAN, APPELLANT ; GRIFFITH, RESPONDENT. 

_ ' ' _ Evidence Written Agreement Parol Variation Collateral Agreement. 

The respondent agreed to hire of the appellant certain grass land on the terms 
of a lease which was to be signed at some future time. The respondent, having 
entered on the land, found it was overrun with rahbits, and, on the lease being 
presented to him for signature, declined to sign it unless the appellant would 
promise to destroy the rabbits. The appellant refused to put a term in the lease 
binding him to do so, but agreed by parol that he would destroy them. The 
respondent thereupon signed the lease, which provided, among other things, that 
the tenant should not shoot, hunt, or sport on the land, or destroy any game, but 
would use his best endeavours to preserve the same, and would allow the landlord 
or friends at any time to hunt, shoot, or sport on the land. Afterwards, the 
rabbits not having been destroyed by the appellant, the respondent sued him in 
the county court for the damage done by them to the grass and crops on the 
land demised. The judge on the trial admitted evidence of the parol agree- 
ment, and asked the jury to say whether it had been made, and whether the 
lease had been signed on the faith of it. They found for the respondent on 
both points. Upon appeal on the ground of the misreception of evidence : 

Held, that the parol agreement was collateral to the written lease, and that the 
evidence was properly admitted. 

APPEAL by defendant from the Northamptonshire County Court. 
This action was brought by William Griffith, plaintiff, to recover 



VOL. VI.] HILARY TEEM, XXXIV VICT. 71 

from George Morgan, defendant, compensation for damage done to 187 1 
the grass and crops of the plaintiff " in consequence of the breach MORGAN- 
by the defendant of his promise to keep down and destroy the v - 

J L J GRIFFITH. 

rabbits on the land hired by the plaintiff of the defendant." 

At the hearing of the cause the following facts were proved : 

The plaintiff, who is a farmer and cattle-dealer, agreed in the 
summer of 1867 to hire of the defendant some grass land from 
Michaelmas Day in that year on the terms of a lease which was to 
be signed at some future time. He entered on the land as tenant 
on the Michaelmas Day, and soon afterwards found the land over- 
run with rabbits, which did considerable damage. Prior to Lady- 
day, 1868, the lease was presented to him for signature, but he 
refused to sign it if he was to be annoyed by the rabbits in future 
as he had been before, and did not sign it. Upon paying his 
March rent he complained to the defendant of the annoyance he 
was suffering, and expressed his determination not to continue in 
occupation unless the rabbits were destroyed. The defendant 
thereupon promised to destroy them. At Michaelmas, 1868, the 
lease was again tendered by the defendant to the plaintiff for signa- 
ture, when he complained a second time of the number of rabbits 
on the land, and refused to sign or continue to hold the land beyond 
the then current year unless the defendant undertook their de- 
struction. The defendant then said, according to the plaintiff's 
evidence, " I promise you faithfully they shall be destroyed," and 
the plaintiff requested that a term to that effect should be inserted 
in the lease. The defendant refused compliance, but again promised 
that the rabbits should be destroyed, and the plaintiff accordingly 
signed the lease in its original form. It demised the land at a 
specified rental from year to year as from Michaelmas, 1867, an<l 
contained a stipulation that the tenant should not shoot, hunt, or 
sport on the land, or destroy any game, but would use his best 
endeavours to preserve the same, and would allosv his landlord or 
friends at any time to hunt, shoot, or sport on the laud. 

The defendant failed to destroy the rabbits as he had promised, 
and the plaintiff, finding that they were even more troublesome 
than before, gave notice to quit, and quitted at Michaelmas, 1870. 
He afterwards brought this action. 

The defendant denied that he had given the promise, and further 

G 2 3 



72 COUET OF EXCHEQUER. [L. E. 

1871 contended that, even if given in fact, it could not be received in 

MORGAN evidence, inasmuch as it added to, and varied and was inconsistent 

GRIFFITH w ^h, the express terms of the lease. The judge considered that 

evidence of it was admissible, and asked the jury whether the lease 

had been signed by the plaintiff on the express promise by the 

defendant to destroy the rabbits. They found in the affirmative, 

and a verdict was entered for the plaintiff. The defendant appealed 

against the ruling of the judge ; and the question for the Court 

was, whether the judge was right in admitting the parol evidence 

of the defendant's alleged promise, and in his direction to the 



Aspland, for the defendant. The plaintift cannot rely on 
the contemporaneous verbal promise of the defendant. He is 
bound by the lease, and no new term can be added to it by parol 
evidence: Goss v. Lord Nugent (I) ; Ramsden N.Dyson. (2) It 
cannot be said that the agreement is wholly collateral. The plain- 
tiff desired to have it embodied in the lease, but the defendant 
refused. It was one of the terms of the taking, which, not being 
reduced into writing with the others, cannot be enforced : Powell 
v. Edmunds (3) ; Emery v. Parry. (4) It imposes on the landlord 
an additional onerous obligation, and is inconsistent with the full 
enjoyment of the right of shooting for pleasure which is contained 
in the lease: Jeffryes v. Evans. (5) This inconsistency distin- 
guishes the present case from Lindley v. Lacey (6), where evidence 
of an agreement wholly collateral to the written one, and relating 
to a different subject-matter, was admitted. Again, there was no 
consideration for this verbal promise. 

[KELLY, C.B. The signature of the lease was a good and suffi- 
cient consideration. Suppose the plaintiff had refused to sign on 
the ground that the defendant had declined to promise to keep 
down the rabbits, and the defendant had filed a bill for specific 
performance in equity, or brought an action at law for non-per- 
formance of the agreement, in the former case no decree Avoulcl 
have been made unless on the terms of the defendant's keeping 

(1) 5 B. & Ad. 58. (4) 17 L. T. (N.S.) 152. 

(2) Law Hep. 1 H. L. 129. (5) 19 C. B. (N.S.) 240 ; 34 L. J. 

(3) 12 East, C. (C.P.) 2G1. 

(C) 17 C. B. (N.S.) 578 ; 34 L. J. (C.P.) 7. 



VOL. TL] HILAKY TERM, XXXIV VICT. 

down the rabbit?, and in the latter only nominal damages would be 1871 
recoverable.] MOIW 

The plaintiff was already bound to execute the lease. 

Arthur Wilson (Roll with him), contra, was not called on. 

KELLY, C.B. All that is possible has been said on behalf of the 
defendant, but it has failed to convince me. I think the verbal 
agreement was entirely collateral to the lease, and was founded on 
a good consideration. The plaintiff, unless the promise to destroy 
the rabbits had been given, would not have signed the lease, and a 
court of equity would not have compelled him to do so, or only on 
the terms of the defendant performing his undertaking. The deci- 
sion of the county court judge must therefore be affirmed. 

PIGOTT, B. I am of the same opinion. The verbal agreement 
in this case, although it does affect the mode of enjoyment of the 
land demised, is, I think, purely collateral to the lease. It was on 
the basis of its being performed that the lease was signed by 
plaintiff, and it does not appear to me to contain any terms which 
conflict with the written document. 

Judgment for the respondent. 

Attorneys for appellant : Torr, Janeway, Tagart, & Janeway. 
Attorneys for respondent : Lewis, Munns, Nunn, & Longden. 



WATLING v. OASTLEU AND ANOTHER. J a ::, 

Pleading Liability of Master to Servant Defective Machinery Servant's 
ignorance of Difcct, 

Declaration by the administratrix of G. W. that the defendants were owners of a 
factory and machine, and G. W. was employed by them to work therein, and in 
the course of his employment it was necessary for him to enter the machine to 
clean it ; that by the negligence of the defendants it was unsafely constructed and 
in a defective condition, and was, by reason of not being sufficiently guarded, 
unfit to be used and entered, as the defendants well knew ; and by reason of the 
premises, and also by reason, as the defendants well knew, of no sufficient 
apparatus having been provided by them to protect G. W., it was suddenly put 
in motion whilst he was at work in the machine, and he thereby sustained injuries 
from which he afterwards died. On demurrer : 

If eh!, that the declaration sufficiently shewed that the machine was set in 



COUKT OF EXCHEQUER. [L. R. 

1871 motion by the defendants' negligence, and that it therefore disclosed a cause of 
~ action, although there was no allegation that G. W. was ignorant of the dangerous 



and defective character of the machine. 
v, 

OASTLER. Semlle, per Martin, B. The defendants would, under the circumstances alleged, 
be liable, even if the machine had been set in motion by a stranger. 

DECLAEATION by the administratrix of George Watling, that at 
the time, &c., the defendants were owners of a factory and machine 
therein, and George Watling in his lifetime was employed by the 
defendants as a labourer to work for them in the factory and 
machine ; that in the course of his employment it was necessary 
for him to get into the machine for the purpose of cleaning and 
rectifying it ; that by the negligence and default of the defend- 
ants the machine was constructed unsafely and in a defective and 
improper manner, and was, by reason of not being sufficiently 
guarded, in an unsafe and unfit condition for being used and en- 
tered in the manner aforesaid, which the defendants well knew; 
that by reason of the premises, and also by reason, as the defend- 
ants well knew, of no sufficient or proper apparatus having been 
provided by the defendants to protect the said George Watling, 
while so employed by them in and about the machine as aforesaid, 
from injuries arising from the unsafe and unguarded state of the 
machine, while the said George Watling was, in the course of his 
employment, cleaning and rectifying it, it was suddenly put in 
motion, and involved and cut him, and he afterwards died of Ins 
wounds. [Then followed the averments necessary under 9 & 10 
Yict. c. 93, to entitle the administratrix to sue.] 

Demurrer and joinder. 

Prentice, Q.C. (Murphy and B. V. Williams with him), in sup- 
port of the demurrer. The deceased was employed to do dangerous 
work to a defective machine, and it should have been averred in 
the declaration that he was not aware of the danger and defect. 
Unless he was ignorant, there was no duty in the defendants 
towards him. Their knowledge is not enough to make them 
responsible, if the deceased shared it. 

[MARTIN, B. Surely that fact would be matter of defence. It 
is not necessary to allege in terms that the deceased was ignorant 
of the danger. There seems to me to be a prima facie cause of 
action here. If Watling ran the risk of getting hurt with his eyes 



VOL. VI] HILAKY TEEM, XXXIV VICT. 75 

open, he was guilty of contributory negligence. But contributory 1871 
negligence need not be negatived in pleading.] WATLING 

The parties stood in the relation of master and servant, and that 
being so, ignorance of the danger ought to be alleged in order to make 
out even a prima facie case. Although a plaintiff is not bound to 
negative a possible line of defence, he must shew facts which raise 
a legal duty : Seymour v. Maddox (1). But it is consistent with, the 
declaration as it stands that the plaintiff voluntarily and with 
knowledge ran the risk ; and if so, the defendants were under no 
duty towards him to guard the machine or to prevent its being set 
in motion : Smith's Master and Servant, 3rd ed. p. 214 ; SoutJicote 
v. Stanley (2) ; Dynen v. Leach (3) ; Williams v. Clough (4) ; 
Indermaur v. Dames (5). Again, it is not shewn that the 
machine was actually set in motion by the defendants. A 
stranger might have done it, or a careless fellow-servant, in 
which case the defendants would not be liable : Metcalfe v. Hetlier- 
ington (6). 

Keelle, contra. The declaration sufficiently connects the defend- 
ants with the injury. It does, in fact, allege, although indirectly, 
that by their negligence and default the machine was set in motion. 
And even if it does not, there is still a cause of action against 
them. They were bound, knowing the dangerous character and 
defective construction of the machine, to take care that it was not 
and could not be set in motion while the deceased was cleaning it. 
If moved by a stranger, they were nevertheless responsible. They 
ought to have provided against such an event by properly guarding 
it. Again, the deceased's ignorance is matter which may be 
inferred from the allegations ; and if not, there is still enough to 
raise a duty in the defendants towards the deceased. His know- 
ledge of the dangerous and defective state of the machine is 
matter of defence, which need not be alleged or proved in the first 
instance: Holmes v. Clarke (7). 

Prentice, Q.C., in reply. 

(1) 16 Q. B. 326 ; 20 L. J. (Q.B.) 327. (5) Law Rep. 1 C. P. 274 ; Law Hep. 

(2) 1 H. & N. 247 ; 25 L. J. (tix.) 2 C. P. 311. 

339. (G) 11 Ex. 257 ; 24 L. J. (Ex.) 314. 

(3) 26 L. J. (Ex.) 221. (7) 6 H. & N. 349 ; 7 II. & N. 937 ; 

(4) 3 H. & N. 258 ; 27 L. J. (Ex.) 30 L. J. (Ex.) 135; 31 L. J. (Ex.) 
325. 356. 



76 COUET OF EXCHEQUER [L. B- 

1871 KELLY, C.B. This case is not by any means free from doubt, 

WATLIXG but looking at the declaration as a whole, I think it discloses a 
OASTLKR caus< 3 f action. It is enough if there be certainty in pleading to 
n common intent, and we should presume all that we reasonably 
can, in order to sustain a declaration which substantially shews a 
breach of duty in a defendant, although its terms may be some- 
what ambiguous. Now here there is, in the first place, an express 
allegation that it was necessary for the deceased in the course of 
his employment to get into the defendants' machine in order to 
clean it. Then comes a positive statement that the machine was- 
defectively constructed by reason of the defendants' default ; and 
afterwards there is a distinct and precise allegation of the de- 
fendants' knowledge of the danger and inefficiency of their ma- 
chine. It is then averred that " by reason of the premises " a 
phrase which involves the whole of what goes before and also- 
" by reason, as the defendants well knew, of no sufficient o? 
proper apparatus having been provided by the defendants" to 
protect the deceased while employed by them in the machine, 
the machine, while the deceased was cleaning it in the course 
of his employment, " was suddenly put in motion," whereby the 
deceased was so much injured that he died. We have, there- 
fore, on the face of this declaration, distinct allegations of the 
original defective construction of the machine, of the defendants' 
knowledge of the defect, and of the occurrence of the injury to 
the deceased, in the course of his employment, the machine having 
been " suddenly put in motion " while he was in it ; and I think 
that although it is not so stated in express words, we may gather 
that it was so set in motion by the defendants' negligence and 
default. 

But it is further objected that there is no allegation that the 
deceased was himself ignorant of the defects and dangers of the 
machine, and that without such an allegation, no breach of duty is 
shewn to have been committed by his employers. Now it certainly 
would have been expedient had the declaration contained a definite 
averment of the deceased's ignorance. We must, however, recol- 
lect, although the old and more exact form of pleading in a case of 
this sort is no longer followed, the averment that the injury was 
caused " by reason of the negligence and default of the defendants " 



VOL. VI.] HILAIIY TERM, XXXI V VICT. 

must bo taken as equivalent to an averment in the old form tliat 187 1 
it was by their mere negligence and default. And so reading tho A\- ATUN 
words, I think it is unnecessary to allege in express terms that the J. 
deceased was ignorant of the defective character of the machine. 
If it were not so in fact, that will be matter of defence at the trial 
under the general issue. The defendants will, in that case, succeed 
in shewing that the accident did not occur through their mere 
negligence. But I am of opinion that the deceased's ignorance 
need not be alleged in terms. 

With regard to Southcote v. Stanley (1), I will only say that the 
decision did not turn on the relation which exists between employer 
and employed, and the duties which arise from that relation. The 
case, moreover, seems to be somewhat loosely reported, and the 
judgments of the Court are evidently not given in full. The case, 
as it appears, certainly does not seem to me satisfactory, and I do 
not think it should govern our decision on this occasion. 

MARTIN, B. I also think the declaration is sufficient. It con- 
tains enough to shew that the injury was caused by the defendants' 
default, and that the deceased did not know the risk he was 
running. Moreover, if a servant be employed by a master to clean 
or use a defective and dangerous machine, improperly constructed. 
and without a guard, and if the employer knows the defect and 
danger and the servant does not, and is therefore guilty of no con- 
tributory negligence, I am not prepared to say that the servant, in 
case he is injured whilst in the course of his employment, has no 
cause of action against his employer, although it may be that the- 
employer did not himself set the machine in motion, but that some 
third person, unconnected with him, did so. Looking at the whole 
declaration, therefore, I think it discloses a cause of action in 
whichever way it is construed, and although the deceased's igno- 
rance of the danger is not expressly averred. At all events, I 
am not prepared to say it does not, although it is framed very 
ambiguously. There is, however, enough certainty to a common 
intent to prevent us holding it bad on general demurrer. 

PIGOTT, B. I am of the same opinion. The declaration shews 
(1) 1 II. & X. lM7 ; L'5 L. J. (Ex.) 330. 



78 COUET OP EXCHEQUEE. [L. E. 

1871 that the deceased was employed to clean a machine, known by his 

WATLING ~~ employers to be dangerous and defective. It charges them suffi- 

OVSTLER cientiy both with knowledge of the defects, and with negligence. 

But then it is said that the deceased's ignorance of the danger 

and defects of the machine ought to have been averred. I do not 

think that necessary. It was not averred in Mellors v. Shaw (1), a 

similar case to this ; and it seems to me rather matter of defence 

under the general issue. The knowledge of the deceased is no 

more than contributory negligence, and it is not needful in such an 

action as this to allege that the injured person did not contribute 

to the accident. 

Judgment for the plaintiff. 

Attorney for plaintiff: Henry Smith. 
Attorneys for defendants : Ford & Lloyd. 



j ant 26. ATTORNEY-GENERAL v. BLACK. 

Income-tax Liability of Local Coal Dues Bate or Duty 5 & 6 Viet. c. 35, 
Sclieds. (A), (D). 

By 13 Geo. 3, c. 34, a power was given to Improvement Commissioners for 
Brighton, to levy a duty of GcZ. on every chaldron of coal landed on the beach or 
brought into the town, for the purpose of erecting and maintaining groyns, &c., 
against the sea. By subsequent Acts the duty was continued and increased, and by 
6 Geo. 4. c. clxxix. it was, together with rates which the commissioners were em- 
powered to levy, market tolls, &c., to form a common fund for the general pur- 
poses of the Act, which included paving, lighting, and watching, and the main- 
tenance of groyns and other sea works : 

Held, that the corporation (who had succeeded to the rights of the commis- 
sioners) were liable to pay income-tax in respect of the coal duty. 

CASE stated under 22 & 23 Viet. c. 21, s. 10, upon an informa- 
tion against the town clerk of the Corporation of Brighton, to 
recover penalties for not making the returns required by 5 & 6 
Viet. c. 35 (see ss. 40, 52, 54, 55). The information was brought 
to try the question, whether the corporation were liable to pay 
income-tax upon certain duties levied by them upon all coal, 
culm, &c., landed on the beach or brought within the limits of 
the town of Brighton. 

(1) 1 B. & S. 437 : 30 L. J. (Q.B.) 333. 



VOL. VI.] 



HILARY TERM, XXXIV VICT. 



79 



GENERAL 

v. 
BLACK. 



The duty was originally imposed by 13 Geo. 3, c. 3-1 (1), 'by which, 1871 
after (pp. 623-638) empowering certain commissioners to pave, ATTOKNEY- 
light, and cleanse the streets, and for that purpose (p. 628) to 
levy rates not exceeding 3s. in the pound, on the occupiers of all 
property in the town, and (pp. 642-653) to establish a market, the 
rents and profits of which were (after payment of moneys bor- 
rowed) to be applied towards paving, &c., the streets, and in repair- 
ing the groyns thereafter mentioned ; and after reciting the erec- 
tion of groyns to protect the town against the encroachments of the 
sea ; it was enacted (pp. 654-655) that the commissioners should 
be trustees for the maintenance and erection of groyns, and such 
other works as should seem to them proper; and that for that 
purpose there should be paid to them the sum. of Gd. for every 
chaldron of sea coal, culm, and other coal that should be landed on 
the beach or coast of Brighthelmstone, or otherwise brought into 
the said town within the parish of Brighthelmstone aforesaid ; and 
the Act contained further provisions (pp. 655-656) for enabling 
the commissioners to enforce payment of the duties through the 
officers of customs at the port of Shoreham, and by detention and 
sale of vessels in the event of non-payment. 

Under this Act the old groyns were maintained and new ones 
erected. The coal duty was received and the market established, 
and the rents and profits arising from it duly collected and 
applied. 

By 50 Geo. 3, c. xxxviii., the former Act was, with certain 
exceptions, repealed (s. 1), and after reciting its provisions, and 
that the coal duties had been found inadequate, the commis- 
sioners were, by s. 107, authorized and required to erect and 
maintain such works as should appear necessary for the safety of 
the town, or of the beach or shore within the town ; and it was 
enacted that there should be paid to them any rate or duty which 
they should order and direct, not exceeding 3s. in the pound, for 
every chaldron of sea coal, culm, or other coal, which should be 
landed on the beach of the town or in any other manner, by land 
carriage or otherwise, brought or delivered within the limits of the 
town. By ss. 108-111, further powers were given for levying 
the duties, and (by s. 114) for borrowing 5000Z. on the credit 
(1) Printed among the public Acts, but with the sections not numbered. 



su 



COURT OF EXCHEQUER. 



[L. P, 



v. 
BLACK. 



1871 thereof; and it was provided that a drawback should be returned 
ATTORNEY- of the whole rate or duty for every chaldron landed to be for- 
5UAL warded, and forwarded to any other place for sale or consumption. 
By s. 116, after the payment of moneys borrowed on the credit of 
the duties, and of the expenses of erecting and maintaining the 
groyns and other works, the commissioners were empowered to 
apply any surplus in aid of the rate for paving, watching, lighting, 
and cleansing, as they should think reasonable and proper. They 
were also empowered (s. 82) to levy on the occupiers of property 
in the town to an amount not exceeding 4s. in the pound in any 
one year for paving, lighting, cleansing, and watching. Further 
powers were given (ss. 99-106) for enlarging and regulating the 
market ; the surplus arising from the market, or the rents or tolls 
thereof, was directed to be applied, either in aid of the rate for 
paving, cleansing, lighting, and watching, or of the coal duty, as 
to the commissioners should seem reasonable and proper. 

By the Brighton Town Act (6 Geo. 4, c. clxxix.), which recited and 
repealed the above-mentioned Acts (s. 1), and appointed new com- 
missioners (s. 3), it was enacted (s. 117) that all the rates, tolls, 
duties, assessments, and impositions, authorized by the Act (except 
the watering rate (ss. 59, 60) ), should when received be consoli- 
dated into and form one fund, and be applicable by the commis- 
sioners for the general purposes of the Act. 

The general purposes included repairing, lighting, watching, and 
cleansing the streets, &c. (ss. 3-1, 37, 41, 50, 70) ; providing fire- 
engines (s. 61) ; the purchase of lands, &c., for widening and 
improving streets, or for providing a site for a town -hall (s. 97) ; 
the erection of a town-hall, the extension of the market, the 
erection of a town pound and of a prison (s. 139) ; the establish- 
ment of a provision market (s. 148), and of a corn, hay, and cattle 
market (s. 149) ; and the erection and maintenance of groyns, walls, 
jetties, piers, &c. (s. 162). 

By s. 133 the commissioners were empowered to levy a rate, 
not exceeding 4s. in the pound in any one year, on the tenants or 
occupiers of all tenements or hereditaments whatsoever within the 
town, except agricultural land and buildings. 

By s. 163 there was to be paid to them any rate or duty which 
they should direct, not exceeding 3s. for every chaldron of coal 



VOL. VI.] HILARY TERM, XXXIV VICT. 

or culm, and further duties were granted them on coke (not ex- ISTI 
ceeding Is. 6d. per chaldron), on cinders and ashes (not exceeding ATTOUNEY 
1s. per chaldron), and on charcoal (not exceeding \d. per bushel), '^ E|{ AI. 
and so in proportion for any less quantity which should be I^ACK. 
" landed on the beach of the town, or in any other manner by laud 
carriage or otherwise, brought or delivered within the limits of 
the town." 

By ss. 164-169 similar powers to those contained in the repealed 
Act were given, for securing payment of the duty. 

By s. 171 a drawback of the whole rate or duty was allowed on 
all coal, culm, or coke landed or unloaded within the limits of the 
Act "for the purpose of being forwarded to any other place or 
places, and not to be consumed within the said limits," and which 
was so forwarded. 

The town was on the 1st of April, 1854, incorporated by charter 
under 1 Viet. c. 78, s. 49, and by The Brighton Commissioners 
Transfer Act, 1855, the corporation were appointed commissioners 
for carrying the Brighton Town Act into execution. 

The Local Government Act, 1858 (21 & 22 Viet. c. 98), was 
adopted in I860, and the corporation became the local board. By 
a pi'ovisional order under that Act, confirmed by the Local Govern- 
ment Supplemental Act, 1861 (24 & 25 Viet. c. 39), the two latter 
Acts were incorporated with the local Acts, certain parts of the 
Brighton Town Act (including ss. 61, 97, and 133) were repealed, 
and the purposes of the imrepealed parts were to be deemed to be 
purposes of the Public Health Act and the Local Government Act. 
S. 87 of the Public Health Act (11 & 12 Viet. c. 63), provides for 
the levying a general district rate. 

In the year ending the 31st of August, 1866, the coal duties 
produced 10,358?., and it was stated -in the case that- they amounted 
annually to 9000?. or 10,000?. beyond the cost of collection. 

Income-tax was paid on the coal duties from 1858 to 1865, under 
Sched. (A.) of 5 & 6 Viet. c. 35, but in 1866 payment was refused. 
In 1867-1868 assessments, in default of returns, were made (under 
Sched. (D.) in consequence of 29 & 30 Viet. c. 36, s. 8), but pay- 
ment was refused by the corporation. 

The question for the opinion of the Court was, whether the rates 
and duties levied by the Corporation of Brighton on coal, culm, 



82 COUET OF EXCHEQUER. [L. R. 

1871 coke, cinders, ashes, and charcoal, in manner above mentioned, 

ATTORNEY- were chargeable with income-tax. 
GENERAL 

BLACK. J an - 24, 26. Sir R. P. Collier, A.G. (Button with him), for 
the Crown, referred to 5 & 6 Yict. c. 35, ss. 1, 40, 60, Sched. (A.), 
No. III., which enumerates, under tenements and hereditaments: 
(< third, . . . rights of markets and fairs " and " tolls ;" and 
s. 100, Sched. (D.), 6th Case, and to Attorney-General v. Jones (1), 
and contended that the coal duties were no more exempt from 
income-tax than the market tolls, in respect of which the liability 
was admitted. 

[MAETIN, B. Is not this a tenement? See Co. Litt. 19 (b) 
20 (a)]. 

THE COURT called on 

Manisty, Q.C. (G. Bruce with him), for the defendant. The 
coal duty is to be looked at with reference to the Act of 6 Greo. 4, 
c. clxxix., by which it is amalgamated with the rates into a 
common fund applicable to general purposes. This provision 
deprives it of any peculiar character which it may have originally 
had. 

[MAETIN, B. The same argument would apply to the market 
tolls, and to the property of corporations brought into the Borough 
Fund, by s. 92 of the Municipal Corporations Act (5 & 6 Wrn. 4, 
c. 76). How does this duty differ from the port dues and other 
tolls, owned by Liverpool and many other towns, which have 
always been taxed to the income-tax ?] 

The duty is in its own nature a tax, and not a property or a 
profit. It is imposed in effect on the inhabitants of the town, and 
in respect of coals consumed in the town ; and a drawback is 
allowed on coals merely landed for the purpose of further trans- 
port. The case might be otherwise if, as in the cases referred to 
by Martin, B., the tax were imposed on the public generally. But 
here it coincides in its limits with the rate-paying district, and falls 
upon the same persons who would have to pay the rates which are 
aided by it. That it is exempt, is shewn by s. 102, which pro- 
vides for the payment of the tax on interest upon money lent on 

(1) 1 Mac. & G. 574. 



VOL. VI.] 



HILARY TERM, XXXIV VICT. 



83 



rates or assessments not chargeable by the Act, which implies an ISTI 
exemption of rates ; but this is both by its nature and its name ATTOKNEY- 
a rate. GENERAL 

BLACK. 

Sir R. P. Collier, A.G., in reply. To refer to s. 102 is begging the 
question ; the section implies that there may be rates and assess- 
ments chargeable to income-tax. In 12 Car. 2, c. 4, customs 
duties are called rates ; and there can be no doubt if customs 
duties were in private hands they would be liable. This is not 
a tax imposed by the community on themselves, but it is a 
tax on strangers, whether it be taken in regard to the importer 
who actually pays the duty, or to the consumer on whom it ulti- 
mately falls ; the drawback is not on all coal taken out of the 
town, but only on coal landed for the purpose of being forwarded 
and actually forwarded. The power to vary the duty can make- 
no difference ; it could make none in private hands ; the reason of 
it is the variation in the exigencies it is to meet ; but the pur- 
pose to which it is applied cannot exempt it, if in its nature it is 
taxable. 

KELLY, C.B. I am of opinion that the Crown is entitled to 
our judgment. A grant has been made to the Corporation of 
Brighton of a coal duty from which they derive an annual income 
amounting, as is stated in the case, to the sum of 10,0007. This 
income is, prirna facie, as much liable to income-tax as if it were 
possessed by a private individual ; the question therefore is, 
whether there is anything in the nature of the duty, or in tho 
purpose for which it was granted, or to which it is to be applied, 
or, to use an expression more familiar to political economy than to 
law, in the incidence of the tax, which will exempt it from this 
liability. No solid argument has been presented to us in favour 
of this contention. First, it was said that the duty was applicable 
in general to those purposes to which the rates levied on inhabi- 
tants, or those levied on householders only, are ordinarily applied : 
in short, that it was applicable to borough, or indeed to strictly 
parochial purposes. It is true that among the purposes to which 
the amalgamated fund, which includes the proceeds of this duty. 
is appropriated by the later of the Acts regulating its receipt and 



84 



COURT OF EXCHEQUER. 



[L. R. 



1871 application (6 Geo 4, c. clxxix.), some of the purposes I have 
ATTORNEY- mentioned, such as " paving, lighting, &c.," are to be found ; but 
GENERAL we a } so g nc [ j n the enumeration of purposes in the same proviso, 
BLACK, the much larger purposes of purchasing lands to widen and 
improve streets, erecting a town-hall, a market-house, &c. No 
doubt if a fund were to be applied simply and merely to pur- 
poses producing a result that would itself not be liable to 
taxation, such for instance as sewers, it would be a strong argu- 
ment to shew that the fund was not itself liable to taxation. But 
the fund in question might, for instance, be applied to estab- 
lishing a market, the tolls of which would undoubtedly be liable 
to income-tax. Why then should not the fund itself be so? 
Coupling this consideration with the nature of the duty in ques- 
tion, that duty is unquestionably within the terms of the Act. 

It is said that, by analogy with the other elements of which the 
amalgamated fund is composed, it ought to be free from taxation. 
But the same might be said of the property of municipal corporations 
in general, because, under s. 92 of the Municipal Corporation Act, 
it forms, together with rates, a common fund which is applicable 
to all the ordinary purposes of municipal government. 

As to the argument that the use of the phrase rate or duty proves 
anything as to the character of the coal duty in question, it is 
answered by the Act of 12 Car. 2, c. 4, to which the Attorney- 
General drew our attention, where the word is applied to custom 
duties. 

It only remains to consider whether, as was contended, this is in 
substance and reality a tax only on the inhabitants of Brighton, 
or still more, on the rateable inhabitants only. It is certainly no 
such thing. If we trace from its first collection to its ultimate 
destination the tax on every ton of coals imported, we find that 
the incidence of the tax is by no means confined to the rate-payers 
nor even to the inhabitants, but that it must (as is the case with 
every tax) Ml upon the consumer, who may live, perhaps, at a 
considerable distance from Brighton. In the first instance, no 
doubt, it is paid by the merchant who imports the coals ; but he 
sells to the poor as well as to the rich, to the non-rate-paying as 
well as to the rate-paying inhabitants ; he may further sell, and 
probably will sell, a considerable proportion to persons resident in 



VOL. VI.] HJLAEY TEEM, XXXIV VICT. 85 

the neighbourhood, not within the limits of the local rates. If, 1871 
therefore, as I have said, the incidence of the tax falls at last on ATTORM-Y- 
the consumer, the incidence is not on the rated inhabitants of GENEKAI - 

V. 

Brighton alone, but is in part, at least, on persons resident without BLACK. 
its limits. 

MARTIN, B. I am of the same opinion. The real question as 
to the liability to income-tax of the produce of these coal duties 
depends on whether they come within the designation of property 
or profits. By the structure of the various provisions of 5 & 6 Viet, 
c. 35, it is plain the legislature meant to include every kind of 
property yielding income. Sched. (A), which is contained in the 
first section, includes "all lands, tenements, and hereditaments;" 
and I think there is reason for contending that this duty is a 
tenement. But it is not necessary to decide this, for s. 100 
provides that the duties contained in Sched. (D) "shall extend 
to every description of property or profits which shall not be 
contained in either of the said Scheds. (A), (B), or (C), and to 
every description of employment of profit not contained in Sched. 
(E)." The section then contains rules for ascertaining the duties 
in the particular cases mentioned in the section ; and the sixth 
case which it gives is as follows : " The duty to be charged in 
respect of any annual profits or gains not falling under any of the 
foregoing rules, and not charged by virtue of any of the other 
schedules contained in this Act." It seems almost impossible that 
any net could be extended more widely ; every possible source of 
income seems included. 

The quality and nature of this duty depends, in my opinion, on 
the Act of 13 Geo. 3, c. 34. The subsequent statute enacts, that the 
whole of the duties shall go, with the other items of revenue of 
the commissioners, into a common fund ; and in the general 
district account of the corporation, who have now succeeded to the 
rights of the commissioners, after several rates which would not be 
within the Income-tax Act there come the coal duties in question, 
followed by market dues and rents of land. All these sources of 
revenue are brought by the Act into one fund ; but that does not 
alter the character of the duties as determined by the earlier Act. 
This may be exemplified by the Municipal Corporations Act, which 

VOL. VI. H 3 



86 COUKT OF EXCHEQUER. . [L. E. 

1871 directs (s. 92), that "the rents and profits of all hereditaments, and 

ATTORNEY- the interest, dividends, and annual proceeds of all moneys, dues, 

GENERAL cna ttels, and valuable securities," the property of the corporation, 

BLACK. shall go into the borough fund, and be applicable to the general 

purposes mentioned in the section. No one would contend that 

because it was so enacted, the large property belonging to several 

municipal corporations, such as Liverpool, could not be taxed; 

the only effect is that the income of the public property is brought 

in to contribute to the public expenses. 

What, then, is the effect of the Act of 13 Geo. 3, c. 34 ? Powers 
are given by it to the commissioners, to whose rights the Corpora- 
tion of Brighton have succeeded, to purchase lands, and establish a 
market; these powers they have exercised, and the corporation 
admit their liability to pay income-tax in respect of the market 
tolls thence derived, in respect, therefore, of one species of pro- 
perty created by the Act. The Act then goes on to recite that the 
groyns are out of repair, and for the purpose of restoring them 
and keeping them in repair, it enacts that the commissioners may 
take the coal dues now in question. It seems to me, therefore, 
that a property has been created by this Act, to which the corpora- 
tion would under the Act still be entitled, if the repair of the 
groyns did not cost a farthing a year. The consideration for the 
grant of the duties was the repair of the groyns, but the duties 
were not measured by that consideration any more than where 
tolls are granted in consideration of the maintenance of a light- 
house, which often far exceed the cost of maintenance. This, 
therefore, appears to me a species of property falling within the 
description in the Act of " property or profits," and is, therefore, 
subject to the payment of income-tax. 

KELLY, C.B. My Brother Channell, who heard the whole of 
the argument, has desired me to say that he entirely concurs in 
the judgment now pronounced. 

Judgment for the Crown. 

Attorney for the Crown : The Solicitor of Inland Revenue. 
Attorney for defendant: Tilleard & Co., for D. Black, Town 
Clerk, Brighton. 



VOL. VI.] HILARY TERM, XXXIV VICT. 87 



THORNEWELL AND WIFE v. WIGNER. 1871 

County Court little calling upon County Court Judge to amend Case Malicious ^ an - " 
Prosecution Reasonable and Probable Cause. 

On the hearing of an action for malicious prosecution in the county court to 
which it was remitted (under 30 & 31 Viet. c. 142, s. 10), the judge who tried the 
cause ruled that there was an absence of reasonable and probable cause. The 
defendant appealed. The judge stated a case, in which he gave what he stated 
to be the result of the evidence, but did not set out the evidence in detail, nor 
insert the depositions before the police magistrate, which were put in evidence at 
the hearing. On an application by the defendant : 

Held, that the judge must amend the case by setting out the depositions and 
the other evidence material to the question of reasonable and probable cause. 

THIS was an action for malicious prosecution, which was brought 
in this court, remitted for trial to the Lambeth County Court, and 
tried on the 10th of September, 1870, before the deputy judge. 
The judge ruled that there was no reasonable and probable cause, 
and the jury found a verdict for the plaintiffs for 50Z. 

The defendant gave notice of appeal on the ground (amongst 
others) that the facts did not justify the judge in ruling that there 
was an absence of reasonable and probable cause. The judge stated 
a case, in which he gave a summarized statement in a narrative 
form, of the facts proved at the trial, adding, " the above statement 
gives the result of the evidence so far as is material for the deter- 
mination of the question raised for the opinion of the Court of 
Appeal." He did not, however (except occasionally), state what 
facts were proved by what witnesses, nor did he set out any part 
of the evidence verbatim, nor did he set out the depositions taken 
before the police magistrate, which were put in evidence at the 
trial. 

The defendant obtained a rule calling on the judge and on the 
plaintiffs to shew cause why the judge should not amend the case 
by setting out the evidence given at the trial, so far as was material 
to the question of reasonable and probable cause, and by setting 
out the depositions taken before the magistrate and put in evidence 
At the trial. 

The defendant's attorney made an affidavit as to evidence 
omitted from the case as drawn by the judge. 

H 2 3 



88 COUET OF EXCHEQUEE. [L.E. 

1871 Bronibij and Dodd shewed cause. Under s. 43 of 19 & 20 Yict. 

THORNEWELL c 108 (amended by 21 & 22 Viet. c. 74, s. 4), the present form of 

* procedure is substituted for the writ of mandamus ; but the 

WlGNER. f 

remedy, though changed in form, is not extended, and the Court 
will not grant a rule under that section, where it would not have 
formerly issued a mandamus. It has accordingly been held that 
a rule will not be granted where the matter is within the discre- 
tion of the judge: Clifton v. Furley (1) ; Furber v. Sturmy (2) ; 
Fortescue v. Paton (3) ; In re Corbett. (4) 

[CHANNELL, B. This is not a matter of discretion at all. The 
learned judge is bound to state a case, in order that this Court,, 
which is to hear the appeal from his judgment, may have the 
proper materials for forming an opinion. 

MARTIN, B. He is asked to do no more than any judge of the 
superior courts does, who is required to sign a bill of exceptions.] 

The Court cannot act upon the defendant's affidavit ; but, if it 
could, the affidavit shews no material omission, and therefore prac- 
tically answers the defendant's application. 

[MARTIN, B. I am not prepared to say if it were shewn on 
affidavits that material evidence was given at the trial which 
was not set out in the case, that we should not compel the judge 
to set out that evidence. But that question does not arise here ; 
the learned judge only professes to give the "result" of the 
evidence, he does not say that he has set out the whole.] 

G. Bruce was not called on to support the rule. 

KELLY, C.B. The learned judge has only set out the " result " 
of the evidence, and such as he deems material ; but we have to 
consider whether his judgment was correct, and we cannot deter- 
mine this without knowing, not only what on his construction of 
the evidence he deemed material, but the whole evidence on which 
he formed his opinion. 

MARTIN, B. I am of the same opinion. We ought not to call 
on a county court judge to do anything that we should not feel 

(1) 7 H. & N. 783 ; 31 L. J. (Ex.) (3) 3 L. T. (N.S.) 268. 

170. (4) 4 H. & N. 452; 28 L. J. (Ex.) 

(2) 3 H. & N. 521 ; 27 L. J. (Ex.) 254. 
453. 



VOL. VI.] HILARY TERM, XXXIV VICT. 89 

obliged to do ourselves in the like circumstances ; but it is impos- 1871 
sible to decide upon the case without having the whole evidence THORNEWELL 



WIGNEK. 



CHANNELL, B., concurred. 

Rule absolute. 

Attorney for plaintiffs : C. V. Lewis. 
Attorneys for defendant : Pattison & Wigg. 



BROOK v. HOOK. Jan. 27. 

Ratification Forged Signature to Promissory Note Ratifying a Forgery 
Construction of Written Document Province of Judge and Jury. 

The defendant's name was forged, by one Richard Jones, to a joint and several 
promissory note for '201., dated the 7th of November, 1869, and purporting to be 
made in favour of the plaintiff, by the defendant and Jones. While the note 
was current the defendant signed the following memorandum, in order to prevent 
the prosecution of the forger, at the same time denying that the signature to the note 
was his or written by his authority : " I hold myself responsible for a bill dated 
the 7th of November, 1869, for '201., bearing my signature and Richard Jones' in 
favour of Mr. Brook [the plaintiff]." At the trial of an action against the de- 
fendant on the note, the judge ruled that this memorandum was a ratification, 
and directed the jury that the only question for them was, whether the de- 
fendant signed it. It being admitted that he did, a verdict was entered for the 
plaintiff : 

Held (per Kelly, C.B., Channell and Pigott, BB., Martin, B., dissenting), a 
misdirection : 

Per Kelly, C.B., Channell and Pigott, BB., that the memorandum could not be 
construed as a ratification, inasmuch as the act it professed to ratify was illegal 
and void and incapable of ratification ; but that it was, in fact, an agreement by 
the defendant to treat the note as his own in consideration that the plaintiff would 
forbear to prosecute Jones, and was therefore void as founded on an illegal 
consideration. 

Semble, that the memorandum being ambiguous in its terms, it should have 
been left to the jury to say what its real meaning was when looked at in connec- 
tion with the circumstances under which it was signed. 

DECLAKATION on a promissory note. Plea : traversing the 
making of the note. Issue. 

At the trial before Martin, B., at the Bristol Summer Assizes, 
1870, the following facts were proved: In July, 1868, Richard 
Jones, a brother-in-law of the defendant, applied to the plaintiff 



90 COURT OF EXCHEQUER. [L. E. 

1871 for a loan of 50?. The plaintiff declined to lend the money unless- 
BEOOK a substantial name was given as security. Jones said that he 
thought the defendant would join him in a note, and one was 
soon afterwards given to the plaintiff, purporting to be signed by 
Jones and the defendant, which was renewed and eventually partly 
paid off by Jones. On the 7th of November, 1869, there was a 
balance of 20Z. remaining due, and on that day the plaintiff re- 
ceived by post from Jones the note now sued on, which 'was in 
these terms : 

"Yatton, Nov. 7, 1869. Three months after date we jointly 
and severally promise to pay Mr. Brook, or his order, the sum of 

20?. for value received. 

" Kichard Hook, 

" Eichard Jones." 

On the 17th of December, 1869, whilst the note was still current, 
the plaintiff saw the defendant, who denied his signature. The 
plaintiff then said that it must be a forgery by Jones, and that he 
would consult a lawyer as to taking criminal proceedings against 
him. The defendant replied that he would rather pay the money 
than that Jones should be prosecuted, and, subsequently, at the 
plaintiff's instance, signed the following memorandum, at the 
same time again denying that he had ever signed, or given Jones 
authority to sign, the note : 

" Memorandum ; that I hold myself responsible for a bill, dated 
Nov. 7th, 1869, for twenty pounds, bearing my signature and 
Eichard Jones', in favour of Mr. Brook. Huntspill, Dec. 17th, 

1869. 

"Eichard Hook." 

It was not disputed that the signature to the note was forged, or 
that the defendant had, in fact, signed this memorandum. The 
learned judge directed the jury that the plaintiff was entitled to- 
the verdict, if the defendant had signed the memorandum, the 
construction of the document being, in his judgment, a question 
for him, and his opinion being that it amounted to a ratification 
of the contract professedly made in the defendant's name on the- 
face of the note. A verdict was accordingly entered for the- 
plaintiff. In Michaelmas Term, 1870, a rule was obtained by the 
defendant, calling on the plaintiff to shew cause why there should! 



VOL. VI.] HILAEY TEEM, XXXIV VICT. 91 

not be a new trial, on the ground that the verdict was against the 1871 
evidence, and for misdirection in this, that the learned judge BBOOK 
directed the jury that the only question for them was, whether 
the memorandum of the 17th of November was signed by the 
defendant. 

Jan. 12. Kingdon, Q.C., Cottins, and R. D. Bennett, shewed 
cause. The defendant's signature to the memorandum was not 
disputed, and, on the true construction of that document, he 
thereby ratified the act of Jones, in placing his name to the note 
without his authority : Wilson v. Tumman. (1) 

[KELLY, C.B. The defendant could not ratify an act which did 
not profess to be done for him or on his account. Here the signa- 
ture was a forgery. Could that be ratified ?] 

The act purported to be done for the defendant. If Jones had 
said, " I sign for Hook, with his sanction," he would only have ex- 
pressed in language what the act of writing the name on the note 
already sufficiently expressed : Byles on Bills, 10th ed. p. 199. In 
Ashpitel v. Bryan (2), Crompton, J., refers to a case tried by him 
at Bristol, where the facts were almost exactly identical with the 
present case, and where he held the plaintiff was entitled to re- 
cover. Again, the defendant is estopped from denying that the 
note was his. His conduct altered the condition of the plaintiff, 
who, after getting the defendant's signature to the memorandum, 
might, if he had pleased, have negociated the note : Leach v. 
Buchanan (3) ; Reg. v. Woodward (4); Greenleaf on Evidence, 
vol. i. p. 50. Further, the meaning of the memorandum, which 
was an instrument complete in itself, \vas not a question for the 
jury : Hejfield v. Meadows. (5) 

[MARTIN, B., referred to Broom's Legal Maxims, 5th ed. p. 871, 
citing Bird v. Brown (6), and Ridgway v. Wliarton. (7)] 

Lopes, Q.C., and Pooh, in support of the rule. The law of rati- 
fication does not apply to this case ; for Jones never pretended or 
suggested that he was the defendant's agent to sign the note : 

(1) G M. & G. 236. (4) Leigh & Cave, C. C. 122 ; 31 L. J. 

(2) 3 B. & S. at p. 492 ; 32 L. J. (M.C.) 91. 

(Q.B.) at p. 95. (5) Law Rep. 4 C. P. 595. 

(3) 4 Esp. 226. (G) 4 Ex. 76G; 19 L. J. (Ex.) 15 i. 

(7) 6 H. L. C. at p. 296. 



92 COUET OF EXCHEQUER. [L. R. 

1871 Story on Agency, 7th ed. s. 251, a ; Saunderson v. Griffiths (1.) ; 

BROOK Routh v. Thompson (2) ; Lucena v. Craufurd (3) ; Hagedorn v. 

HOOK Oliverson. (4) Moreover, no one can ratify a felonious act : 
Story on Agency, 7th ed. ss. 240, 241. The case referred to by 
Crompton, J., in Aslipitel v. Bryan (5), is distinguishable. There 
the position of the plaintiff had been materially altered, and the 
question was not one of ratification, but of estoppel : Pickard v. 
Sears. (6) 

[CHANNELL, B. The doctrine of estoppel is quite distinct from 
that of ratification, and is based on different premises.] 

Secondly : The question of the real meaning of the memoran- 
dum, as interpreted by the previous conversation between the 
parties, and the surrounding circumstances, ought to have been 
left to the jury : Wilkinson v. Stoney (7) ; Heane v. Rogers. (8) It 
is ambiguous, and might be read in one sense as a guarantee, in 
which case it would be invalid as being founded on an illegal 
consideration, viz., the forbearance of a prosecution for forgery. 

Cur. adv. vult. 

Jan. 27. The Court differing in opinion, the following judg- 
ments were delivered : 

MARTIN, B. This was an action upon a promissory note tried 
before me at the last Bristol Assizes. 

The note was dated the 7th of November, 1869, whereby the 
defendant and one Pdchard Jones jointly and severally, three 
months after date, purported to promise to pay the plaintiff or his 
order 201. for value received. The plea traversed the making of 
the note. 

The plaintiff was called as a witness, and stated that in July, 
1868, Richard Jones applied to him for a loan of 50Z., and told him 
that the defendant Hook (who was his brother-in-law) would join 
him in a note as surety ; that a note was given to him purporting 
to be signed by the defendant and Jones, which was renewed and 
partly paid off; and that upon the 7th of November, 1869, there 

(1) 5 B. & C. 909. (5) 3 B. & S. at p. 492 ; 32 L. J. 

(2) 13 East, 274, (Q.B.) at p. 95. 

(3) 1 Taunt. 325. (6) 6 A. & E. 469. 
(4; 2 M. & S. 485. (7) 1 J. & S. 509. 

(8) 9 B. & C. 577. 



VOL. VI.] HILARY TERM, XXXIV VICT. 

was 201. remaining duo ; that upon that day ho received by post isil 
the note sued upon, and believed the signatures to be those of the BUOOK 
defendant and Jones; that upon the 17th of December, 1869, * . 
whilst the note was current, he saw the defendant and shewed the 
note to him, and said that the note purported to be signed by him ; 
that the defendant denied the signature to be his ; that the plain- 
tiff said, if so, it must be a forgery of Jones, and that he would 
consult a lawyer with the view of taking criminal proceedings 
against him ; that the defendant begged him not to do so, and said 
he would rather pay the money than that he should do so ; that 
the plaintiff then said he must have it in writing, and that if the 
defendant would sign a memorandum to that effect he would take 
it ; and that the defendant then signed a memorandum as follows : 
" Memorandum, that I hold myself responsible for a bill, dated 
Nov. 7th, 1869, for 20Z., bearing my signature and Eichard Jones', 

in favour of Mr. Brook. 

"KichardHook: 
"Deer. 17th, 1869." 

that when the document was signed the plaintiff understood the 
defendant denied the signature to be his ; that he only knew the 
defendant from what Jones had said of him, and that he had no 
idea the note was a forgery until he saw the defendant. 

This was the plaintiff's case, and the learned counsel for the de- 
fendant proposed to call the defendant to prove that the note was a 
forgery and that his name was forged. I stated that, in my opinion, 
that was an immaterial circumstance, and that if he signed the 
memorandum of the 17th of December the plaintiff was entitled to 
the verdict upon the issue joined, and that it was for me, and not for 
the jury, to determine what was the construction of that document. 
Thereupon the verdict was entered for the plaintiff, and I stayed 
execution until the fourth day of the following term. 

A rule has been obtained for a new trial upon the following 
grounds : First, that the verdict was against the evidence ; and, 
secondly, for misdirection, viz., that the judge directed the jury 
that the only question for them was, whether the memorandum 
of the 17th of December was signed by the defendant. The 
statement, as to my direction, is substantially correct, and if 
I was wrong in holding that the signing and making by the 



94 COUET OF EXCHEQUER [L. K. 

1871 defendant of the memorandum of the 17th of December entitled 
B KOOK the plaintiff to the verdict upon the issue joined, the defendant is 

" entitled to have the rule made absolute, and to have a new trial. 
HOOK. 

On the argument I asked the learned counsel for the defendant 
what he deemed to be - the proper direction to the jury, and he 
stated it ought to have been as follows : " That having regard to 
what took place, and the circumstances under which the memo- 
randum was given, the jury ought to have been asked whether the 
defendant intended to ratify and confirm what had been done by 
Jones in forging his name, or whether he intended to guarantee 
the payment of the note." Now I am of opinion that I could not 
lawfully have submitted this question to the jury. In the first 
place, I am of opinion that when the defendant signed a memo- 
randum professing to be an entire and complete writing evidencing 
a transaction, the construction of that document, and not his in- 
tention, other than shewn by the writing, is the true test ; and 
further, that it is a matter of law for the judge to construe the 
document, and its construction was not a matter to be submitted 
to the jury. A case was cited from an Irish report, Wilkinson v. 
Stoney (1), that under the circumstances in that case there was a 
question for the jury. I have no doubt that that case was rightly 
decided ; but there the writing was a letter, and there were other 
facts bearing upon the transaction, but the present was the case of 
a single writing made for the purpose of evidencing a transaction, 
and I entertain no doubt that such a writing is to be construed by 
the judge and not by the jury ; if it were not so, there would be 
no certainty in the law ; and, secondly, there was no evidence here 
that the document was a guarantee, or intended to be a guarantee, 
but it merely was, that the defendant was responsible upon the note. 
I am, therefore, of opinion that I would have acted erroneously if 
I had submitted the above question to the jury. And I remain of 
opinion that, under the circumstances of this case, the only ques- 
tion for the jury was, whether the memorandum of the 17th of 
December was the memorandum of the defendant, and that my 
ruling was right, that if it were, it was a ratification of the contract 
made in the name of the defendant, and binding upon him upon 

(1) U. & S. 509. 



VOL. VI.] HILARY TERM, XXXIY YICT. 95 

the legal principle that "omnis ratihabitio retrotrahitur et man- 1371 
dato aequiparatur :" Co. Litt. 207, a. BROOK 

I apprehend that the circumstance of Jones being a party to v - 
the note is immaterial, and that the question is the same as if the 
note were several and the defendant's name alone on it ; and in my 
view of the case the facts may be taken to be that upon the morn- 
ing of the 17th of December the defendant was not liable upon 
the note because his signature was forged ; that the plaintiff took 
and held the note believing that the signature was a genuine one, 
and that the contract to pay was the contract of the defendant ; 
and that the defendant, upon the statement that a lawyer would be 
consulted as to the criminal responsibility of Jones, signed the 
document of the 17th of December. In my opinion this was a 
ratification within the meaning of the above maxim, and rendered 
the defendant liable to pay the note. A ratification is the act of 
giving sanction and validity to something done by another. Jones, 
purporting to utter an obligatory and binding security, had given 
to the plaintiff the note bearing the defendant's name, and the 
defendant, by the writing signed by him, declared that " he held 
himself responsible upon it, it bearing his signature ;" and if that 
was not giving sanction and validity to the act of Jones in deliver- 
ing the note so signed to the plaintiff, I am at a loss to know what 
a sanction or ratification is. To say it is not, seems to me a plain 
misconstruction of a written document, and the denial of a self- 
evident proposition. 

Suppose nothing had been said as to criminal proceedings against 
Jones, and that the defendant, upon being shewn the note by the 
plaintiff, had merely said, " The writing is not mine, but I am respon- 
sible for it," can any one doubt that the maxim would have applied, 
and that the defendant had ratified the transaction ? It is so stated 
by Mr. Justice Burton in the case of Wilkinson v. Stone]/ (1) before 
cited, and he was one of the most eminent of modern lawyers. 
Then does the circumstance that the plaintiff said that ho would 
consult a lawyer in regard to criminal proceedings against Jones 
make any difference? I think not. A ratification of a contract is 
not a contract, it is an adoption of a contract previously made in 
the name of the ratifying party. The contract, if a simple con- 

(1) 1 J. & S. 509. 



96 COURT OF EXCHEQUER [L. E. 

1871 tract, must have been made upon a valuable consideration. If it 
BROOK were not, the adoption or ratification of it would be of no avail. 
HOOK This is the true meaning of the sections cited by Mr. Lopes from 
Story on Agency. If a contract be void upon the ground of its 
being of itself and in its own nature illegal and void, no ratifica- 
tion of it by the party in whose name it was made by another will 
render it a valid contract ; but if a contract be void upon the 
ground that the party who made it in the name of another had no 
authority to make it, this is the very thing which the ratification 
cures, and to which the maxim applies " omuis ratihabitio retro- 
trahitur et mandate gequiparatur." No words can be more ex- 
pressive. The ratification is dragged back as it were, and made 
equipollent to a prior command. 

A ratification is not a contract, and requires no consideration. 
It was so said by Mr. Justice Burton in the case before referred to. 
It may be, and is, that a contract " in consideration that the holder 
of a promissory note would not prosecute a man for the felony of 
forging a name to the note, the defendant would pay the note or 
guarantee the payment of it " would be illegal and void ; but there 
was no evidence of such a contract, even in words, in the present 
case ; and if there were, there would be a legal principle to prevent 
its operation, for the written memorandum was made and signed 
for the purpose of evidencing the transaction, and there is not a 
word of contract in it either on behalf of the plaintiff or indeed of 
the defendant. It is what it was intended to be, a ratification or 
adoption by the defendant of the signature and contract made 
in his name, it may have been by a forger, or it may have been 
under circumstances which would not have justified a conviction 
for that offence. For the purpose of my judgment I assume it 
was a forgery for which Jones might have been convicted. The 
case of Wilson v. Tumman (1) was cited on both sides ; it is a case 
of great authority, and is a considered judgment. It is there laid 
down " that an act done for another by a person not assuming 
to act for himself, but for such other person, though without any 
precedent authority whatever, becomes the act of the principal if 
subsequently ratified by him. In such case the principal is 
bound by the act whether it be for his detriment or advantage, 
(1) G M. & G. 236. 



VOL. VI] HILARY TERM, XXXIV VICT. j)7 

and whether it be founded on a tort or on contract to the same ISTI 
extent and with all the same consequences which follow from the " BROOK 
same act done by his previous authority." Several other cases were " 
cited to the same effect, but there is no doubt about it. Tindal, 
C.J., lays it down as the known and well established rule of law ; 
and, as it seems to me, it is conclusive in the favour of the plaintiff 
in the present case. 

But it was said that a forged signature cannot be ratified. No 
authority was cited for this, and I believe none can be found. In one 
sense, perhaps, a forgery cannot be ratified or condoned as regards 
the forger, but there is no authority whatever to distinguish the 
ratification of a parol contract and of a written one made by one 
person in the name of another without authority. The expression 
of Tindal, C.J., is " made without any precedent authority what- 
ever," which would clearly include a forged document. There is in 
Mr. Broom's Treatise on Legal Maxims, p. 807, a comment upon the 
maxim, and also in Mr. Justice Story's Book on Agency, begin- 
ning at s. 239 ; and in neither of these treatises is one word to be 
found drawing any distinction between the ratification of a written 
contract which was in its inception a forgery, and one which was 
not of that character the foundation of ratification of contracts 
is throughout deemed to be, that the contract originally purported 
to be by and in the name of the person ratifying. But there is 
authority to the contrary. In the before cited case of Wilkinson 
v. Stoney (1), Mr. Justice Burton clearly shews that he thought a 
forged acceptance of a bill could be ratified; and in Aslipitdv. 
Bryan (2), the late Mr. Justice Crompton stated that a cause had 
been tried before him where a father was sued upon his acceptance 
forged by his son. The party who held the bill went to the father 
and said, " We shall proceed against your son Is this your accept- 
ance ?" and the father said, " It is ;" and upon this evidence he 
thought the rule as to estoppel in Freemanv. Cooke (3) applied, and 
that the father was liable. He says that a bill of exceptions was 
tendered to his ruling by a very learned person, but after consider- 
ation it was abandoned. He goes on to say that he was not sure 
whether the party had knowledge that it was not the acceptance of 

(1) 1J. & S. 509. (2) 3 B. & S. at p. 402 ; 33 L. J. (Q.B.) at p. 95. 

(3) 2 Ex. Cot; 18 L. J. (Ex.) 114. 



COURT OF EXCHEQUER. [L. R. 

1871 the father, but he says that in his opinion that was immaterial, and 
BROOK that the person making the statement must be considered as saying, 
H ^ K " The instrument may be treated as if accepted by me." This case 
seems to me to be identical with the present ; and with me no 
higher authority exists than the judicial opinion of Mr. Justice 
Crompton. He put the case on the ground of estoppel. I think 
the doctrine of ratification the more applicable, but whether such a 
document as that of the 17th of December operates by way of 
estoppel or by that of ratification, in my opinion it rendered the 
defendant liable. I still think, upon these grounds, that my ruling 
at nisi prius was right, and that the rule ought to be discharged. 

The judgment of Kelly, C.B., Channell and Pigott, BB., was 
delivered by 

KELLY, C.B. This is an action on a promisspry note payable 
two months after date, and purporting to bear the signatures of 
one Jones and of the defendant. The declaration is on the note, 
and the defendant has pleaded that he did not make the note. 

Upon the trial it appeared that the signature of the defendant 
to the note was not his own, and it was assumed by the learned 
judge who tried the cause, and by counsel on both sides, that it 
was a forgery ; consequently, if the case had rested there the 
defendant would have been entitled to the verdict. But it was 
proved that Jones having been indebted to the plaintiff upon a 
previous bill in part paid, leaving 20 still due, the note in ques- 
tion was handed by Jones to the plaintiff for that balance of 20. 
When the note was about to become due the plaintiff had an 
interview with the defendant, at which, upon the note being men- 
tioned, the defendant at once declared that it was not his signature, 
and it was perfectly understood between them that it was, in truth, 
a forgery ; whereupon the plaintiff said that he should consult his 
solicitor with a view to proceed criminally against Jones ; upon 
which the defendant said, rather than that should be, he would pay 
the money. Upon this the following paper was drawn up by 
the plaintiff, and was signed by the defendant : 

" Memorandum ; that I hold myself responsible for a bill dated 
7th of November, 1869, for 20L bearing my signature and Richard 
Jones', in favour of Mr. Brook." 



VOL. VI.] HILARY TERM, XXXIV VICT. 

Upon this evidence it has been contended on behalf of the 1871 
plaintiff that this paper was a ratification of the making of the note BROOK 
by the defendant, and, upon the principle " omnis ratihabitio H v ' . 
retrotrahitur et mandato priori aequiparatur," the jury were 
directed to find that the note was the note of the defendant, and 
that the plaintiff was entitled to the verdict. 

I am of opinion that this verdict cannot be sustained, and that 
the learned judge should have directed a verdict for the defendant ; 
or at least, have left a question to the jury as to the real meaning 
and effect of the memorandum and the conversation taken together ; 
and this, first, upon the ground -that this was no ratification 
at all, but an agreement upon the part of the defendant to treat the 
note as his own, and become liable upon it, in consideration that 
the plaintiff would forbear to prosecute his brother-in-law Jones ; 
and that this agreeement is against public policy and void, as 
founded upon an illegal consideration. Secondly, the paper in 
question is no ratification, inasmuch as the act done that is, the 
signature to the note is illegal and void ; and that although a 
voidable act may be ratified by matter subsequent, it is otherwise 
when an act is originally and in its inception void. 

Many cases were cited to shew that where one sued upon a bill 
or note has declared or admitted that the signature is his own, and 
has thereby altered the condition of the holder to whom the 
declaration or admission has been made, he is estopped from 
denying his signature upon an issue joined in an action upon the 
instrument. But here there was no such declaration and no such 
admission ; on the contrary, the defendant distinctly declared and 
protested that his alleged signature was a forgery ; and although 
in the paper signed by the defendant he describes the bill as bearing 
his own signature and Jones', I am of opinion that the true effect 
of the paper, taken together with the previous conversation, is, that 
the defendant declares to the plaintiff: "If you will forbear to 
prosecute Jones for the forgery of my signature, I admit and will 
be bound by the admission, that the signature is mine." This, 
therefore, was not a statement by the defendant that the signature 
was his, and which, being believed by the plaintiff, induced him 
to take the note, or in any way alter his condition ; but, on the 
contrary, it amounted to the corrupt and illegal contract before 



100 COUKT OF EXCHEQUEE. [L. E. 

1871 mentioned, and worked no estoppel precluding the plaintiff from 
BROOK" shewing the truth, which was that the signature was a forgery, 

, r v - and that the note was not his note. 
HOOK. 

In all the cases cited for the plaintiff the act ratified was an act 
pretended to have been done for or under the authority of the party 
sought to be charged ; and such would have been the case here, 
if Jones had pretended to have had the authority of the defendant 
to put his name to the note, and that he had signed the note for 
the defendant accordingly, and had thus induced the plaintiff to 
take it. In that case, although there had been no previous 
authority, it would have been competent to the defendant to ratify 
the act, and the maxim before mentioned would have applied. But 
here Jones had forged the name of the defendant to the note, and 
pretended that the signature was the defendant's signature ; and 
there is no instance to be found in the books of such an act being 
held to have been ratified by a subsequent recognition or statement. 
Again, in the cases cited, the act done, though unauthorized at the 
time, was a civil act, and capable of being made good by a subse- 
quent recognition or declaration ; but no authority is to be found 
that an act which is itself a criminal offence is capable of 
ratification. The decision at nisi prius of Mr. Justice Crompton 
referred to in argument is inapplicable, it being uncertain whether 
the plaintiff in that case knew that the alleged signature of the 
defendant was forged, and there being no illegal contract in that 
case to forbear to prosecute. The same observation may be made 
upon the case from Ireland cited upon the authority of Mr. Justice 
Burton. I am therefore of opinion that the rule must be made 
absolute for a new trial, and that upon this evidence the jury ought 
to have been directed to find a verdict for the defendant, or at all 
events (which is enough for the purpose of this rule) that if any 
question should have been left to the jury it ought to have been 
whether the paper and the conversation taken together did not 
amount to the illegal agreement above mentioned. My Brothers 
Channell and Pigott concur in this judgment. 



Rule absolute. 



Attorney for plaintiff: Willett. 
Attorneys for defendant : Torr & Co. 



VOL. VI.] HILARY TERM, XXXIV VICT. 101 



FREEMAN v. THE COMMISSIONERS OF INLAND REVENUE. 1871 

Stamps Transfer of Shares Partition of Shares 55 Geo. 3, c. 184, Sclied. JaHf 2 

tit. Transfer. 

Four residuary legatees, of whom two were executors, by a deed, made in pur- 
suance of an arrangement for specifically dividing among them certain parts of 
the testator's personal estate, transferred and released to one another shares in 
nine companies forming part of the residuary estate, so as to vest in each of the 
four a portion of the shares in each of eight of the companies, and in one of them 
-all the shares in the ninth company : 

Held, that the deed required only four transfer stamps under 55 Geo. 3, c. 184, 
Sched. tk. Transfer. 

CASE stated by the Commissioners of Inland Revenue under 
13 & 14 Vic. c. 97, s. 15. 

The deed in question was executed for the purpose of effecting 
a division among the four residuary legatees under the will of 
G. Freeman, of railway shares in nine companies, forming part of 
the residuary estate. The deed was in the following form : " We, 
H. W. Freeman, &c., and E. Freeman, &c., the executors of the 
will of G-. Freeman, &c., without pecuniary consideration, but in 
pursuance of an arrangement for specifically dividing certain parts 
of the personal estate of the deceased among ourselves and 
J. R. Freeman, &c., and S. Freeman, &c., the four residuary 
legatees named in the said will, do hereby, with the privity of the 
said J. R. Freeman and S. Freeman, transfer and release the 
undermentioned parts of such personal estate in manner herein- 
after appearing ; that is to say (A), to the said H. W. Freeman, to 
be henceforward held in his own right, and not as executor [shares 
in' eight companies] : (B), to the said E. Freeman, to be hence- 
forward held in his own right, and not as executor [other shares 
in the same eight companies] ; (C), to the said J. R. Freeman 
[other shares in the same eight companies, and all the shares in 
a ninth company] ; (D), to the said S. Freeman [the remaining 
shares in the first eight companies]. To hold the said several stocks 
and shares unto the said H. W., E., J. R., and S. Freeman respec- 
tively, and their respective executors, administrators, and assigns, 
subject to the several conditions on which we held the same at the 
time of the execution thereof. And we, the said H. AY., E., J. R., 
VOL. VI. I 3 



102 



COUET OF EXCHEQUEE. 



[L. E. 



1871 



FREEMAN 
v. 

COMMIS- 
SIONERS OF 

INLAND 
EEVENUE. 



and S. Freeman, do hereby respectively agree to take the several 
stocks and shares hereby expressed to be transferred to us 
respectively subject to the conditions aforesaid. As witness, &c." 
This deed was executed by all parties. 

The deed was presented to the Commissioners for their decision 
under 13 & 14 Yict. c. 97, s. 14, stamped with a 80s. stamp, under 
55 Geo. 3, c. 184, Sched. tit. Transfer. (1) The Commissioners 
required it to be stamped with thirty-three stamps as containing 
thirty- three separate transfers, but at the request of the parties 
stated this case under s. 15. The case was argued on the 14th 
of June, but stood over for the purpose of stating whether the- 
executors had been registered as holders of the shares in question 
under s. 18 of the Companies Clauses Act. The fact that they 
had been so registered was supplied by affidavit. 

Anstie, for the appellants. The deed is in substance a deed of 
partition; it deals with a fund in which all the parties have a 
common interest, and does nothing beyond dividing the fund 
among them. It is in the same position as a partition of lands 
occupied before 55 Geo. 3, c. 184, which was only taxable as a 
" deed not otherwise charged," and was for the first time specially 
provided for in that Act in order to meet the case where the pay- 
ment of a substantial sum (not less than 300?.) for equality of 
partition made the transaction in substance, as to part of the land, 
a sale ; in other cases it was to bear the " ordinary deed stamp " 
(55 Geo. 3, c. 184, Sched. tit. Partition). This shews that the fact 
of several distinct interests being created by a deed, does not make 
it taxable as containing several transactions ; and the same prin- 
ciple is laid down in many cases where, notwithstanding the 
provision of 12 Anne, st. 2, c. 9, s. 24, instruments containing con- 
veyances of several distinct interests, or containing several distinct 



(i) 55 Geo. 3, c. 184: Sched. tit. 
Transfer, after providing a fixed duty 
for the transfer of Bank Stock, South 
Sea Stock, and East India Stock on sale 
or otherwise, and providing (by a refer- 
ence to the titles, Conveyance, Mort- 
gage) for the duty on a transfer by way 
of sale or mortgage of " any share or 
shares in the stock of any other corpo- 



ration, company, or society whatever," 
imposes a stamp duty of 30s. on the 
" Transfer of any share or shares in the 
stock and funds of any other corpora- 
tion, company, or society whatever, not 
otherwise charged under the head of 
mortgage or of conveyance upon the 
sale of any property." See note (1). 
post, p. 107. 



VOL. VI.] HILAEY TERM, XXXIV VICT. HJ8 

agreements, or several separate trausactions, have been held only ISTI 

liable to a single stamp, if the whole transaction has had a common y EEEM , V x 

purpose : Thomas v. Bird (1) ; Goodson v. Forbes (2) ; Davis v. v - 

Williams (3) ; Baker v. Jardine (4) ; Allen v. Morrison (5) ; Doe SIGNERS OF 

d. Hartwriffht v. Fereday (6) ; RushbrooJce v. .Hood. (7) In JFe#s 

v. Bridge (8) a conveyance of shares by three persons to one was 

held to require only a single transfer stamp. That case at least shews 

that the number of transactions here cannot exceed four. To 

require a stamp in respect of the shares in each company would be 

no more reasonable than to require a separate stamp in respect of 

each article of property contained in a deed of gift. Further, since 

the executors are already legal holders of the shares retained by 

them, it is submitted there can be no stamp required in respect of 

those shares. 

[MARTIN, B. Is this a transfer at all ? It appears to me to be 
only an arrangement amongst the parties as to the manner in 
which they will divide the fund.] 

It is recited to be made in pursuance of such an arrangement ; 
and it purports to be an actual transfer. 

[MARTIN, B. The words used cannot give it the operation of a 
transfer if it is not such in fact. This is not such a deed as is 
contemplated by the Companies Clauses Act, 1845, s. 14; the 
companies, who are entitled by s. 15 to retain the deed, would 
not be called on to register it.] 

The deed satisfies all the requirements of s. 14, and therefore 
operates as a complete transfer. It is not essential that the 
deed should be in the form given in schedule (B), or that it should 
relate only to a transaction in a single company ; no such objection 
was raised by the pleading, the argument, or the judgment in 
Copeland v. North Eastern Ry. Co. (9) Duplicate originals duly 
stamped with duplicate stamps delivered to the secretaries of the 
several companies will satisfy the terms of the Act. 

(1) 9 M. & W. 68. (7) 5 C. B. 131 ; 17 L. J. (C.P.) 58 ; 

(2) 6 Taunt. 171. 11 Jur. 931. 

(3) 13 East, 232. (8) 4 Ex. 193. 

(4) 13 East, p. 235, n. (9) C E. & B. 277 ; 2 Jur. (X.S.) 

(5) 8 B. & C. 565. 1162. 

(6) 12 A. & E. 23. 

12 3 



104 



COURT OF EXCHEQUER. 



[L. B. 



1871 



FREEMAN 

v. 

COMMIS- 
SIONERS OP 

INLAND 
HEVENCE. 



Sir E. P. Collier, A. G. (Hutton with him), for the Commis- 
sioners of Inland Revenue. It may be conceded that the deed 
is a valid transfer, provided it be duly stamped ; but it contains 
thirty-three transactions, and must bear thirty-three transfer 
stamps. All the cases cited were cases where several interests 
coalesced in one person, or several agreements were made with 
one person. They can go no farther than to shew that only four 
stamps are required. But, by the express words of the Act, there 
is to be a stamp on a transfer of shares in " any company." Now, 
here there is a transfer to each of three persons of shares in eight 
separate companies, tmd to one person of shares in nine companies. 
It is plain, therefore, that there are thirty-three separate transac- 
tions or transfers. This is the more clear when it is considered 
that there must in each company be a separate registration of each 
person in respect of the shares appropriated to him. 

MAETIN, B. My impression is that both sides are mistaken, and 
that a 35s. stamp is the proper one. For the purpose of ascertaining 
with what stamp a document ought to be impressed the document 
onght to be looked on as what, upon the face of it, it is that is, 
according to its true and proper effect, not according to the 
technical words which may be used in it. This is so stated and 
laid down by Bayley, J., in Eex v. Eidgwell. (1). 

Now, I am of opinion that the view taken by Lord Campbell in 
Copeland v. North Eastern Ey. Co. (2), of ss. 14 and 15 of the 
Companies Clauses Act, 1845, is correct ; and the effect of that 
opinion is this : that the legislature intended that the document by 
which a transfer of shares was to be effected, and which was to be 
delivered to and kept by the company, should be a short form of 
deed indicating that transaction, and that alone. But if the 
argument addressed to us to-day is right, and this deed is a 
transfer, the company must, for the purpose of registering the 
transferees, receive and retain in their custody this deed, or, by the 
same reasoning, a marriage settlement, if the parties thought fit 
to draw it in this manner. This would involve enormous trouble ; 
and it was, I believe, never intended by the legislature that a deed 
of transfer tendered for the purpose of registration to a company 

;. (1) 6 B. & C. 665, at p. 669. (2) 6 E. & B. 277 ; 2 Jur. (N.S.) 1162. 



VOL. VI.] 



HILARY TEEM, XXXIV VICT. 



105 



should deal with any other matter than the transfer of the shares 
in that company. 

If I am right in this, the present deed is not such a deed as a 
company could be compelled to receive as a transfer, and the use 
of the word " transfer " will not subject it to the transfer stamp. 

Further, I cannot see how the word " transfer " can appropriately 
be used with respect to the shares of which the executors were 
already legal owners, and which are retained by them. But 
assuming the deed to be as to the other shares a transfer, then 
I think it ought to bear seventeen transfer stamps. 

KELLY, C.B. Both parties to this appeal have agreed that the 
deed before us is a deed by which a transfer of shares was effected 
at the time of its execution ; and but for the doubt expressed by 
my Brother Martin, I should unhesitatingly have come to the same 
conclusion. When the precise terms of the deed are looked at it 
seems impossible to deny that it effects a complete and perfect 
transfer, having in it all that is required by the Companies Clauses 
Act. The two executors are at law possessed of the whole of these 
shares, in trust for themselves and the two other residuary legatees 
in equal parts. The object of the deed is to divide the fund, and 
to vest in each of the four the legal interest in his portion. To 
effect this, they mutually "release and transfer" to one another 
the apportioned parts of the shares ; the executors transferring to 
each of the other two and respectively releasing to one another the 
legal interest, and each of the four releasing to each other the 
equitable interest in the shares appropriated to them respectively ; 
thus creating in each a complete and perfect title to his own por- 
tion. It appears to me, therefore, that the parties have well con- 
sidered and determined the effect of this instrument, which they 
have submitted to us as a deed of transfer. 

The question then is, what is the proper stamp duty on this 
deed of transfer ? Stating the question shortly, it is, how many 
separate and complete transactions are effected by the deed ? 
When we look at the substance of the matter, which is what we 
are bound to consider, the intention and the substantial effect of 
the deed is, that each of the four persons entitled to these shares 
shall take to himself at law and in equity one-fourth part, and 



1871 



COMMIS- 

SIONERS OF 

INLAND 

ItEVEXUE. 



106 COURT OF EXCHEQUEK. PL. E. 

1871 shall convey to each of the other three his interest in the portions 

FREEMAN^ which are to be given to them respectively, so that each may 

,, v - have, under and by virtue of the instrument, a complete legal and 

COMMIS- * ... 

SIGNERS OF equitable interest in his portion of the shares. This is, in truth, 
REVENUE, four different transactions and no more. The number cannot in 
any way be multiplied, except by assuming that, if in a transaction 
between two persons for one consideration, several different chattels 
were sold (say, for instance, a horse, a watch, a necklace, a piano- 
forte, and a ring,) and were conveyed by deed, that deed would 
require five separate stamps, or a stamp for every piece of property 
conveyed. There is no difference between that case and the pre- 
sent one. Could it be said, if all the rest conveyed the whole of 
the shares for one consideration to one of their number, that because 
there happened to be shares in nine companies the deed would 
require nine stamps ? Clearly not. The case of Wells v. Bridge (1) 
conclusively shews the contrary. 

But it is contended that the present case differs from the case of 
the conveyance of chattels which I have supposed, because some- 
thing remains to be done for the completion of the title of share- 
holder. But all that relates to the deed, including the affixing 
of the stamp, precedes the acts required to be done by the 15th 
section of the Companies Clauses Act. The stamp must be settled 
before any of the further steps can be taken, the company being 
bound before receiving the deed to see that it is duly stamped. 
Again, the stamp cannot be affixed until the deed is complete ; 
everything must be done necessary to entitle the parties to call 
upon the commissioners to adjudicate upon the stamp, before the 
question can arise for their decision. What, therefore, is done 
afterwards is quite independent of the deed; and unless there 
were some express provision making everything inoperative unless 
these further acts were done, we must treat the deed as complete 
and effectual in itself so far as its proper object, the conveyance of 
the interests dealt with, is concerned. Now, if all the Act required 
was that a copy of the deed should be left with the company, no 
such difficulty as is suggested could arise. But a difficulty is sup- 
posed to arise because the Act directs that the deed itself, duly 
stamped, shall be left with the company, which can only be effected 

(1) 4 Ex. 193. 



VOL. VI.] 



HILARY TERM, XXXIV VICT. 



107 



in the present case by the multiplication of duplicates. The use of 
duplicate originals is, however, a common practice in many cases ; 
and if one deed is stamped with the proper transfer stamp, and 
duplicate deeds are stamped with the stamp provided by the Act 
in the case of duplicates, are not those duplicate deeds "duly 
stamped " within the meaning of s. 14 ? But that is a point we 
need not decide. As to the present question, I have already said 
that the deed appears to me to contain four transactions ; but if it 
were merely doubtful whether there were more, we ought not, in a 
case of taxation, to multiply the number of stamps required beyond 
what is clear and certain. 

PIGOTT, B. I agree that there ought to be four transfer stamps 
on this deed, and four only. It is in effect a deed relating to four 
distinct transfers, by means of which each of the four parties obtains 
a distinct and separate interest ; and no one of them could obtain 
such an interest without the concurrence of all the others. We 
ought not to multiply the duties if there is any doubt upon the 
point. 

Upon the question of whether the companies will be bound to 
register this deed, I have some doubt ; but it is not necessary to 
decide the point, and if decided in the negative it would not assist 
the stamp office. 

Judgment that the deed should bear 
four transfer stamps. (1) 

Attorneys for appellants : Duignan, Lewis & Lewis. 
Attorney for Commissioners : Solicitor of Inland Revenue. 



(1) By 33 & 34 Viet. c. 99, all the 
earlier Stamp Acts are repealed, and 
by 33 & 34 Viet. c. 97, the law as to 
stamps is consolidated. In the schedule 
to the latter Act, the head " Conveyance 
or Transfer, whether on sale or other- 
wise," continues the old duties on the 
transfer of Bank Stock and East India 
Stock, and imposes a duty of 2s. Gd. 
for every 100Z. of " debenture stock or 
funded debt of any corporation or com- 
pany " transferred. The next title 
imposes an ad valorem duty on the 



"Conveyance or Transfer on sale of 
any property (except such stock or de- 
benture stock, or funded debt as afore- 
said)." The title " Conveyance or 
Transfer by way of security " refers to 
the title Mortgage. Lastly, a duty of 
10s. is imposed on any "Conveyance 
or Transfer of any kind not hereinbefore 
described." 

By s. 7, subs. 2, "If more than 
one instrument be written upon the 
same piece of material, every one of 
such instruments is to be separately 



1871 

FBEEMAN 
v. 

COMMIS- 
SIONERS OF 

INLAND 
REVENUE. 



108 COUET OF EXCHEQUER. [L, E, 



1871 THE BRITISH & AMERICAN TELEGRAPH COMPANY, LIMITED, 

Jan. 31. v. COLSON. 

Company Allotment of Shares Letter of Allotment posted but not received. 

The defendant applied for shares in the plaintiffs' company ; shares were allotted 
to him, and a letter of allotment was posted to his address, but was never received 
by him : 

Held, that the defendant was not a shareholder. 

Durilop v. Higgins (1 H. L. C. 381) commented on. 



ACTION for a sum of money alleged to be due from the defend- 
ant to the plaintiffs, on an allotment of shares in their company. 
The first count stated a promise by the defendant that, in consi- 
deration the plaintiffs would allot him fifty shares, he would pay 
21. upon each of the said shares, and alleged the performance of 
conditions precedent, and breach by non-payment. In the second 
count the defendant was sued as a shareholder of fifty shares, for 
a call of '11. due thereon, with interest. 

The defendant (amongst other pleas) pleaded to the first count,, 
denial of the allotment ; to the second count, never indebted. 

Issue. 

The cause was tried before Bramwell, B., at Westminster, on the 
28th of June, 1870. It was proved that the defendant on the 13th 
of February, 1867, sent an application to the plaintiffs for fifty 
shares, the letter of application containing an undertaking " to pay 
on allotment the deposit of 11. per share;" that on the 14th, fifty 
shares were allotted to him at a meeting of directors, and notice 
of the allotment posted to his address (31 Charlotte Street, Fitzroy 
Square) ; and that his name was entered on the register as holder 
of the fifty shares. 

The defendant, however, swore that he had never received the 
notice ; that another person of the same name lived opposite to 
him in the same street ; that about that time the numbers in the 



and distinctly stamped with the duty instrument, with duty in respect of 

with which it is chargeable. each of such matters." 

By s. 8, subs. 1, " An instrument These two provisions correspond to 

containing or relating to several distinct s. 24 of the Act of 12 Anne, st. 2, c. 9, 

matters is to be separately and dis- repealed (under the title of 13 Anne> 

tinctly charged, as if it were a separate c. 18) by 33 & 34 Viet. c. 99. 



VOL. YL] 



HILARY TERM, XXXIV YICT. 



100 



street were changed (his own number being changed from 31 1871 



v. 

COLSON. 



to 87), and that several letters then sent to him had never reached ij RmS H AND 

i AMERICAN 

^ im ' TELEGRAPH 

On the 28th of February the plaintiffs, on being informed that COMPANY 

the notice had not reached the defendant, sent him a duplicate 
notice, which he refused to accept. 

The jury found that the letter of allotment was posted to the 
defendant on the 14th of February, but that he never received 
it ; and that the second notice was not sent in reasonable time. 
The learned judge, acting on Dunlop v. Higgins(V), thereupon 
directed the verdict to be entered for the plaintiffs ; reserving leave 
to the defendant to move to enter the verdict for him, upon the 
authority of Finucanes Case. (2) A rule having been obtained 
accordingly, 

Nov. 17. Pollock, Q.C., and Lewis, shewed cause. The case is 
concluded by the authority of Dunlop \.Higgins (1), which shews 
that a contract is completed by the posting of a letter accepting the 
offer. The same doctrine was recognized in Duncan v. Topliam (3), 
which is directly in point, because there the letter of acceptance 
never reached its destination. In Finucanes Case (2) neither of 
these cases was cited, and the case is not a considered one. 

[They proceeded to argue upon some clauses of the com- 
pany's articles of association, but the Court observed that if the 
defendant was not in fact a shareholder, he could not be bound by 
them.] 

Gill, in support of the rule. Finucanes Case (4) lays down a 



(1) 1 H. L. C. 381. 

(2) 17 W. K. 813. 

(3) 8 C. B. 225 ; 18 L. J. (C.P.) 310. 

(4) 17 W. R. 813. In lleidpaOts 
Case (Law Rep. 11 Eq. 8G), (which 
occurred in the winding-up of the same 
company, the Constantinople and Alex- 
andria Hotels Company), Lord Romilly, 
M.R., again decided this point. There 
it was proved that a letter of allotment, 
and, subsequently, letters requiring 
payment of the allotment call and 
threatening legal proceedings, were 
posted to Reidpath's address; but Reid- 



path, though he admitted that he had 
continued to reside at the address given 
by him to the company, and stated 
nothing to account for the letters not 
reaching him, denied that he had ever 
received any of them. Lord Romilly, 
M.U., said (at p. 89), "It is admitted 
that there are three things which con- 
stitute the contract, the application for 
shares, the allotment of shares, and the 
notice of allotment. The two first it 
is not necessary to consider in this case ; 
but who ought to prove the notice of 
the allotment ? I apprehend the com- 



110 



COUKT OF EXCHEQUER 



[L. E. 



1871 



sensible rule, namely, that if the defendant not only denies 
BRITISH AND rece ip* f a posted notice, but also gives a reasonable account of 

AMERICAN, n s no reaching him, he will not be liable as if he had received it. 
TELEGRAPH 
COMPANY The defendant has here satisfied that condition. In Duncan v. 

COLSON. Topham (1), the point was not argued at length ; the case of 
Harvey v. Johnston (2), there referred to, is no authority on the 
question ; and the point now suggested was not raised. It was 
laid down by Wood, V.C., in Fletchers Case (3), that to complete 
a shareholder's contract it is necessary " that the allotment should 
be communicated and acquiesced in." It is true the point did 
not arise there ; but in HebVs Case (4), where, after the allotment 
had been made, but before it was communicated to the applicant, 
he withdrew his application, it was held that this was no contract 
to accept the shares. 

Cur. adv. vult. 

Jan. 31. The following judgments were delivered : 

KELLY, C.B. This was an action to recover 100?., or 21. per 
share upon fifty shares in the above company. The defendant 
denied his liability, and the question reserved at the trial is, 
whether the plaintiffs are entitled to recover or not. 

On the 13th of February the defendant applied to the plaintiffs 
for fifty shares in the company, by the following letter : " To 
the directors of the British and American Telegraph Company 
Limited. Gentlemen, I request that you will allot me fifty 
shares in the above company, subject to the memorandum and 



pany ought to prove that. Does the 
fact of putting the notice in the post- 
office sufficiently prove it ? I find no 
case which has laid down that rule, and 
the cases referred to do not amount to 
it. I do not think I should be at 
liberty so to hold in opposition to the 
distinct and positive oath of the re- 
spondent, who says he never received 
the letters. In this state of circum- 
stances I cannot fix him as a contribu- 
tory." The latter part of these obser- 
vations, relating to the conclusion of 



fact, appears to go only to the question 
of the weight of evidence, and not to 
lay down any general rule. 

(1) 8 C. B. 225 ; 18 L. J. (C.P.) 310. 

(2) 6 C. B. 295 ; 17 L. J. (C.P.) 298, 
cited in Duncan v. Topham as 7 C. B. 
295. 

. (3) 37 L. J. (Ch.) at p. 50. 

(4) Law Rep. 4 Eq. 9. The letter 
of allotment there was sent to the com- 
pany's agent for delivery to the appli- 
cant, but was not delivered to the 
applicant till after his retractation. 



VOL. VI.] HILARY TERM, XXXIV VICT. Ill 

articles of association, and I hereby agree to become a member 1871 
of the company in respect of such shares, or in respect of any less BRITISH AND 
number you may allot me, and to pay on allotment the deposit of r^"^^ 
27. per share thereon ; and I request that my name may be placed COMPANY 
on the register of members for the shares so allotted." COLSOX. 

To which, on the 14th of February, the plaintiffs replied, through 
their secretary, by the following letter of allotment: "British 
and American Telegraph Company Limited. Sir, The directors 
having considered your application, have allotted you fifty shares 
in this company, and I have to request that you will pay the- sum 
of 1007., being an allotment deposit of 27. per share, on or before 
Wednesday the 20th instant, to the account of the company, 
either at Messrs. Dimsdale, Drewitt, Fowler, & Barnard, Bankers, 
50 Cornhill, E.C., or at the London and County Bank, Lombard 
Street." 

This letter was put into the post on the 14th of February, and 
should have reached the defendant on the following day, but from 
some confusion arising from the manner in which the houses were 
numbered in the street in which the defendant resided, the letter 
was not delivered to him. A fortnight afterwards, upon some 
communication between the parties, the letter of allotment first 
became known to the defendant, and the jury have found that this 
was not within a reasonable time. The learned judge, upon the 
authority of the case of Dunlop v. Higgins (1), directed a verdict 
for the plaintiffs, reserving leave to the defendant to move to enter 
a nonsuit; and I am of opinion that the rule should be made 
absolute. 

It appears to me, that if one proposes to another, by a letter 
through the post, to enter into a contract for the sale or purchase 
of goods, or, as in this case, of shares in a company, and the 
proposal is accepted by letter, and the letter put into the post, the 
party having proposed the contract is not bound by the acceptance 
of it until the letter of acceptance is delivered to him or otherwise 
brought to his knowledge, except (in some cases) where the non- 
receipt of the acceptance has been occasioned by his own act 
or default. 

The consequences, if the law were as contended for on the part 
(1) 1 H. L. C. 381. 



112 



COUKT OF EXCHEQUER 



[L E. 



AMERICAN 

TELEGRAPH 

COMPANY 

v. 
COLSON. 



1871 of the plaintiffs, would be such as to work great and obvious 
BRITISH AND injustice in a variety of mercantile transactions of constant 
occurrence. A merchant in London writes to another .merchant 
at Bristol offering to sell him a quantity of merchandise at the 
price of 1000?.. and the Bristol merchant by return of post accepts 
the offer and agrees to become the purchaser ; but the letter mis- 
carries and is never received. Would the Bristol merchant be 
entitled a week afterwards to bring an action for the non-delivery 
of the goods, when the London merchant, from having received 
no answer to his letter, has sold them to another person ? Then, 
suppose that A., a stockbroker in London, who has been in the 
habit of making purchases of stock for B. in Liverpool, writes to B. 
on the 1st of January, "I can offer you 10,OOOZ. in 5-20 bonds 
at 90, but I must require your answer by return of post." B., 
receives the letter at Liverpool on the morning of the 2nd, and 
writes by the post of that night to A. in London, " 1 accept the 
10,000?. 5-20 bonds at 90, and request you will hold them for me 
until further instructions ;" the letter by some accident miscarries 
and never reaches the hands of A., who, receiving no reply 
throughout the 3rd of January, sells the stock on the morning of 
the 4th to another purchaser. B. applies .to him ten days after, 
when the stock has risen 50 per cent., and directs him to sell. If 
the putting of the letter into the post by B. at Liverpool on the 
2nd is equivalent to the delivery of it to A. on the 3rd, B. is 
entitled to maintain an action as if it had been delivered, and 
recover the 50 per cent, upon the stock. It is absolutely impos- 
sible that such can be the law of this country. Numberless cases 
of this nature might be put, in which the principle which regulates 
the making of contracts among mercantile men would be set at 
nought, if the law be as contended for on the part of the plain- 
tiffs ; that principle being that a contract is complete only when a 
proposal is made by one party, accepted by the other, and the 
acceptance notified to the maker of the proposal. 

The learned judge in this case directed a verdict for the 
plaintiffs chiefly, if not wholly, upon the authority of Dunlop v. 
Higgins (1). But it will be found that this case is no authority 
at all for the proposition contended for by the plaintiffs, that the 
(1) 1 II. L. C. 381. 



VOL. VI.] 



HILARY TERM, XXXIV VICT. 



113 



putting a letter into the post accepting a contract is equivalent to 
the delivery of the letter to the person written to, and binds him 
by the acceptance although it should never have been delivered. 
The facts of the case of Dunlop v. Higgins (1) were these : on the 
28th of January, Dunlop & Co., merchants at Glasgow, wrote to 
fliggins at Liverpool, and put the letter in the post, offering to 
sell to him 1000 tons of iron at 65s. This letter was delivered at 
Liverpool to Higgins at 8 A.M. of the 30th of January ; the first 
post for Glasgow left Liverpool on that day at 3 P.M., and the 
second at 1 A.M. of the 31st. Higgins wrote a letter on the same 
day, the 30th, accepting the iron, and put it into the post during 
business hours on that day, that is to say, a little after 3 P.M., 
which it was not denied was in proper time. This letter should 
have been delivered in Glasgow about 8 A.M. on the 1st of 
February, but owing to the bad state of the roads, there being a 
railway only for a part of the journey, the mail did not arrive at 
Glasgow till some hours later, and the letter was not delivered to 
Dunlop & Co. till about 2 P.M. They afterwards renounced the 
contract, on the ground that the acceptance had not reached them 
at 8 P.M., and alleging that in the meantime they had sold the 
iron to another purchaser. Higgins, thereupon, brought his 
action for the non-delivery of the iron pursuant to the contract, 
and he was held entitled to recover. In this decision of the 
Court of Session, and the affirmance of it by the House of Lords, 
I entirely concur, on the plain ground that the acceptance of the 
contract reached Dunlop & Co. in time; and the judgment which 
I am about to pronounce is in perfect accordance with it. 

It is said, however, that the ground upon which this case was 
decided was, that the contract was complete and binding upon 
Dunlop & Co., not upon the acceptance of it by Higgius coming 
to hand, but upon the putting of the letter into the post by 
Higgius upon the 30th of January ; and it is further insisted that 
Lord Cottenham laid it down as law, that the putting of a letter 
into the post accepting a contract is equivalent to the delivery of 
that letter, although it should never in fact bo delivered at all to 
the person to whom it is addressed. 

No such proposition was laid down by Lord Cottenham, or by 
(1) 1 II. L. C. 381. 



1871 



AND 

AMERICAN 

TKLKGRAFH 

COMPANY 

v. 

COLSOX. 



114 



COUET OF EXCHEQUEE. 



[L.E. 



1871 



X>R1TISH AND 

AMERICAN 

T ELEGBAPH 

COMPANY 
COLSON. 



any other judge, either in the Court of Session or in the House of 
Lords. The points, indeed, that were taken in argument seem to 

*- 

^g quite apart from any iust legal view of the case. It was 
insisted by Dunlop & Co. that, Higgins' letter of acceptance 
being by mistake dated on the 31st, they had a right to assume, 
and Higgins had no right to disprove, that it was actually written 
on the day, and so too late to bind them to the contract. But this 
objection to the action was rightly overruled in the House of 
Lords ; and it was held that Higgins was at liberty to shew, as the 
fact was, that the letter was written and put into the post on the 
30th. It was undoubtedly argued, that the putting of the letter 
into the post by Higgins on the 30th amounted then and at once 
to an acceptance of the contract binding upon Dunlop & Co., 
without reference to the time at which it was delivered, or even if 
it had never been delivered at all; and upon this point Lord 
Cottenham treats it as a question of fact, whether the posting of 
the letter by Higgins on the 30th was or was not a compliance 
with the duty of the party. He rightly holds that it was ; and in 
his judgment he observes, not that the posting of a letter is 
equivalent to its delivery ; no such doctrine is to be found 
throughout his Lordship's judgment; but that Higgins was not 
responsible for the delivery according to the course of the post by 
the post-office, over which he had no control. And this, no 
doubt, is true ; not merely as a general, though somewhat vague 
and indefinite proposition, but as strictly applicable to the facts of 
that case, Higgins having been in no wise responsible for the 
letter, which he posted at Liverpool at a little after 3 P.M. on the- 
30th, not having reached Glasgow until 2 P.M. instead of 8 A.M. 
on the 1st of February. This, however, is very different from the 
proposition that the contract was completed and binding upon 
Dunlop & Co., not by the delivery to him of the letter of 
acceptance on the 1st of February, but by the putting it into the 
post by Higgins at Liverpool on the 30th. Nothing like this was 
ever said or suggested by Lord Cottenham, or any other judge, 
and the supposition that such had been the decision of the House 
of Lords is only to be accounted for by the vague and inaccurate 
terms of the marginal note to the report of the case. 

The other case relied upon for the plaintiffs is Duncan v. Top- 



VOL. VI.] 



HILARY TEEM, XXXIV VICT. 



AMEBIOAN 

TELEGUAFU 
COMPANY 

v. 
COLSOX. 



ham. (1) There, in an action for non-delivery of goods purchased, ISTI 
in which the contract was alleged to be, to deliver within a reason- i3, UTISII 
able time, the proof was of a contract " that the goods must be put 
on board directly ;" and the judge at the trial having ruled that 
this evidence supported the declaration, the defendant obtained a 
rule for a new trial on the ground of variance, and the rule was 
afterwards made absolute. This decision, therefore, has no appli- 
cation to the present case ; but it certainly appears that, upon the 
trial of the cause, Mr. Justice Cresswell had directed the jury that 
the contract was complete on the posting of the plaintiff's letter 
accepting the offer of the goods, notwithstanding it might never 
have come to the defendant's hands. It does not appear how far 
this ruling was material in the cause ; but, the counsel for the 
defendant having referred to it as one of the grounds upon which 
he claimed a rule nisi for a new trial, no express judgment is given 
upon that point ; but upon the statement of it Maule, J., observed, 
" I think it was the mode of proof in Harvey v. Johnston." (2) And 
Wilde, C. J., observed, " There is also a case of Dunlop v. Hig- 
gins (3), in the House of Lords, where the same point was decided." 
Now, upon looking at the case of Harvey v. Johnston (2), it will be 
found that no such point arises, and that the decision had no rela- 
tion to any such question ; and all that appears is, that upon an 
argument as to whether an offer made can be retracted at any time 
before acceptance, Wilde, C. J., observed, " An order for goods is 
binding upon the party sending it before the letter accepting the 
contract is received by him." This case, therefore, of Harvey v. 
Johnston (2), is no authority whatever in support of the proposition 
contended for ; nor, for the reasons before assigned, is the case of 
Dunlop v. Higgins. (3) All that fell from the Court, therefore, in 
Duncan v. Topham (1), as far as relates to this point, is founded 
entirely on an erroneous reference by two of the judges to these 
two cases. There is certainly the opinion of Mr. Justice Cresswell 
at nisi prius, which seems to support this doctrine ; but I cannot 
accede to it, notwithstanding the high authority of that learned 
judge. 

It may be that in general, though not in all cases, a contract 

(1) 8 C. B. 225 ; 38 L. J. (C.P.) 310. (2) G C. B. 295 ; 17 L. J. (C.r.) 20S. 
(3) 1 H. L. C. 381. 



COUET OF EXCHEQUER. [L. R. 

1871 takes effect from the time of acceptance, and not from the subse- 
BRITISH AND quent notification of it. As in the case now before the Court, if 



L ASIEIUCAN t ] ie i e ^er of allotment had been delivered to the defendant in the 
TELEGKAPH 
COMPANY due course of the post, he would have become a shareholder from 

C'OLSON. the date of the letter. And to this effect is Potter v. Sanders. (1) 
And hence, perhaps, the mistake has arisen that the contract is 
binding upon both parties at the time when the letter is written and 
put into the post, although never delivered ; whereas, although it 
may be binding from the time of acceptance, it is only binding 
at all when afterwards duly notified. 

On the other hand, the authorities are numerous to shew that a 
contract is not complete until the acceptance of it is made known 
by the one party to the other. In Pellatfs Case (2) Lord Cairns, 
and Turner, L.JJ., lay it down that, upon an application for 
shares to be allotted, the registration of the shares by the company 
does not make the applicant a shareholder ; and Lord Cairns 
expressly says (3), " I cannot, therefore, consider an application for 
shares, followed by registration not communicated to Mr. Pellatt, 
to constitute a completed contract." 

In Gunns Case (4) it was held by Stuart, V.C., and confirmed 
on appeal by Eolt, L. J., that upon an application for shares, and 
on allotment and registration of shares in the name of the appli- 
cant, he does not become a shareholder unless he has notice of the 
allotment ; and the Lord Justice, in his judgment, treats an appli- 
cation for an allotment of shares and an ordinary commercial con- 
tract as identical. His language (5) is directly applicable to the 
present case ; " There must be the consent of two parties to a con- 
tract. One man may make an offer to another and say, ' I agree to 
buy your estate ;' but the person to whom he has made this offer 
must say : ' I agree to sell you the estate,' or he must do something 
equivalent to an acceptance, something which satisfies the Court, 
either by words or conduct, that the offer has been accepted to the 
knowledge of the person who made the offer." 

SaTilgreen & CarralVs Case (6) is to the same effect. There, where 
there had been a contract to accept shares on allotment of shares, 

(1) 6 Hare, 1. (4) Law Bcp. 3 Ch. 40. 

(2) Law Rep. 2 Ch. 527. (5) Law Rep. 3 Ch. at pp. 43-44. 

(3) Law Rep. 2 Ch. at p. 535. (6) Law Rep. 3 Ch. 323. 



v. 



VOL. VI.J HILARY TERM, XXXIV VICT. 117 

and the allotment had been made but not communicated, Lord 1871 
Cairns, L.J., observes (1), "But to complete this appropriation, to BRITISH AND 
make it binding upon Sahlgreeu & Carrall, to make them equitable r^^^^ 
owners of the shares, and to entitle the company to enter them on COMPANY 
the register, it was necessary that they should be informed of what 
was done, and, until notice was given to them, there was no bind- 
ing appropriation which could make them owners of any shares." 
Hebb's Case (2), cited in argument, is to the same effect. 

Upon these grounds, therefore, I am of opinion that the action 
is not maintainable, and that the rule to enter a verdict for the 
defendant must be made absolute. 

In this judgment my Brother Pigott agrees. 

BRAMWELL, B. In this case the material facts are, that the 
defendant applied to the plaintiffs to have shares in their company 
allotted to him ; that shares accordingly were allotted to him ; that 
the plaintiffs wrote and posted in due time a letter to him inform- 
ing him thereof, but that the letter never reached him. 

The question is, if he by these means became a shareholder and 
liable to pay a deposit which by his letter of application he under- 
took to pay on allotment. The plaintiffs say he did, by the mere 
posting of the letter ; the defendant says that was not enough, that 
he was entitled to know if his offer to become a shareholder was 
accepted, and that posting the letter to him is not equivalent to 
giving him that notice. The plaintiffs, admitting in a sense that 
he was entitled to know, say, that posting a letter containing a 
notice that his offer was accepted and shares had been allotted to 
him was sufficient. Both parties agree that shareholder-ship is 
constituted by a contract between the company and the intending 
shareholder ; both agree that for an offer to enter into a contract 
to be binding on the offeror, the person to whom it is made must 
give the offeror notice that he accepts it ; and both agree that if 
the plaintiffs had not availed themselves of the post, but had sent 
their letter by hand and the messenger had not delivered it, there 
would have been no acceptance of the defendant's offer. 

But the plaintiffs say that it is different in the case of the public 
post. Why it should be, no reason is given. If it is in this case, 

(1) Law Hep. 3 Ch. at p. 327, (2) Law Hop. 4 Kq. 9. 

VOL. VI. K 3 



118 



COURT OF EXCHEQUER. 



[L. R. 



AMERICAN 

TELEGRAPH 

COMPANY 

. 

COLSON. 



l71 it must be because it is so as a general rule. That is to say, there 
"BRITISH AND i s nothing peculiar in this case ; there is nothing peculiar in appli- 
cations for shares and in the acceptance of the application. To 
hold, therefore, that the plaintiffs are right, it seems to me that we 
must lay it down as a general proposition, that in cases where the 
post may be used, wherever a person posts a letter, he does that 
which is equivalent to delivering it to the person to whom it is 
directed. So that if an offer is made by letter, and a letter is 
posted accepting it, the offerer is bound. That if a man orders his 
broker to buy stock or shares, and hold them to the orders of the 
principal, and the principal posts a letter ordering the broker to 
sell, the broker not selling would be liable to damages, though the 
letter never reached him. So of a warehouseman bound to forward 
goods on an order from their owner ; so of a notice to quit ; so if a 
man proposed marriage, and the woman was to consult her friends 
and let him know, would it be enough if she wrote and posted a 
letter which never reached him ? I put this case, not to raise a 
smile, but to shew an extravagant consequence of such a general 
rule. 

In all the cases I have put it would be extremely hard to make 
liable the person who had never received the letter ; it would be 
wholly unjust and unreasonable. It may be said that it would be 
hard to leave the sender of the letter without remedy. But there 
is this to be said ; the sender of the letter need not use the public 
post. If he does, he may guard against mistake by sending two 
letters, or requesting an answer and sending another on non-receipt 
of the answer, or by taking other steps to ascertain the arrival or 
non-arrival of the letter, and to remedy the mischief of the latter 
event. But the person to whom it is addressed can do absolutely 
nothing ; for by the hypothesis he does not know it has been 
sent. 

When these considerations are borne in mind, when it is remem- 
bered that it is open to the sender to adopt other means of sending, 
when it is certain that if he does he is responsible for the due 
arrival of the letter, it seems to me right to hold that as a rule the 
post is the agent of the sender of a letter, and that the delivery of 
a letter to the post not followed by delivery by the post to the 
person to whom it is sent, is no delivery to the latter, and has no 



VOL. VI.] 



HILARY TERM, XXXIV VICT. 



119 



more effect than if the letter had been given to a hand messenger 1871 



AND 

AMERICAN 

TELEORAl'II 

COMPANY 
r. 

COLSOX. 



and not delivered, or had been kept in the pocket of the sender. BRITISH 
In the absence of authority, therefore, I should hold, and confi- 
dently hold, that in this case the defendant's offer had not been 
accepted, and that he was not liable. Of course if the person 
addressed had agreed that posting a letter should suffice, like a 
delivery of goods to a carrier, he would be bound. But it seems to 
me that when nothing more appears than that the post may be 
resorted to, the mere posting should not bind the person written 
to ; because, in all cases, unless the contrary appears by express 
stipulation, the post may be resorted to. If it should be argued 
that convenience requires such a rule, as otherwise persons might 
untruly deny the receipt of letters, the answer is, that if such 
a rule prevailed persons would untruly assert the posting of 
them. 

But there are many authorities that it is necessary to examine ; 
the first and most important is Dunlop v. Hiygins. (1) 

The short facts of that case are, that Dunlop at Glasgow had 
made an offer by post to Higgins at Liverpool ; that Higgins was 
bound, according to the usual practice of merchants, to post his 
answer of acceptance on a certain day, the 30th of January ; that 
Higgins did on that day post an answer accepting the offer ; that 
in ordinary course of post that letter would reach Glasgow at 
8 A.M., the 1st of February ; but that, owing to the slippery state 
of the roads, the train at Warrington was missed by the postman 
from Liverpool, and the letter was not delivered to Dunlop till the 
next delivery at 2 P.M. ; it was held he was bound. Now, one 
might say of this case, that it was on an appeal from Scotland, 
and perhaps not intrinsically binding on us. But it certainly was 
not dealt with by Lord Cottenham as a question of Scotch law. 
It may also be justified on this ground ; the parties by their cor- 
respondence recognize the post as a proper medium of communica- 
tion; then that must be subject to inevitable circumstances. I 
do not say accidents, because the delay was occasioned by frost. 
And, certainly, it would seem strange that if the ordinary delivery 
of letters was at ten, and a frost or fog delayed the delivery till 
eleven, the person receiving the letter could say he was not bound. 
(1) 1 II. L. C. 381. 



120 



COUET OF EXCHEQUER. 



[L.B. 



1871 



AMERICAN 

TELEGRAPH 

COMPANY 

v. 
COLSON. 



If the answer were to be sent by hand, surely it would be enough 
BRITISH AND * sen( ^ it by hand as fast as the state of the roads would admit. 
The difficulty of the case is not so much its facts, as what Lord 
Cottenham said. He seems to me correctly represented in the 
head-note, " a contract is accepted by the posting of a letter de- 
claring its acceptance." He says (1), "Then comes the question, 
whether under those circumstances, that, by the usage of trade, 
the fact of the letter being delayed, not by the act of the party 
sending it, but by an accident connected with the post, the party 
so putting the letter in on the right day is to lose the benefit 
which would have belonged to him if the letter had arrived in due 
course." He speaks of an " accident." He further says (2), " If a 
party does all that he can do, that is all that is called for. If 
there is a usage of trade to accept such an offer, and to forward it 
by means of the post, and if the party accepting the offer puts his 
letter into the post on the correct day, has he not done everything he 
was bound to do ? How can he be responsible for that over which 
he has no control ?" . . . " It is not disputed it is a very frequent 
occurrence, that a party having a bill of exchange, which he tenders 
for payment to the acceptor, and payment is refused, is bound to 
give the earliest notice to the drawer. That person may be resi- 
dent many miles distant from him ; if he puts a letter into the 
post at the right time, it has been held quite sufficient ; he has 
done all that he is expected to do as far as he is concerned ; he 
has put the letter into the post, and whether that letter be de- 
livered or not is a matter quite immaterial, because for accidents 
happening at the post-office he is not responsible." It seems to 
me that the correct way to deal with these expressions is, to refer 
them to the subject-matter, and not to consider them as laying 
down such a proposition as the plaintiffs here contend for; but 
that, where the post may be used between two parties, it must be 
subject to those delays which are unavoidable. 

The next case is Duncan v. Topham (3), that certainly is directly 
in favour of the plaintiffs as reported in the Common Bench Reports. 
But I doubt the accuracy of that report. The point is not mentioned 
in the report in the Law Journal (4), and in the report in 8 C. B. at 



(1) 1 H. L. C. at p. 397. 

(2) 1 H. L. C. at p. 398. 



(3) 8 C. B. 225. 

(4) 18 L. J. (C.P.) 310. 



VOL. VI.] HILARY TERM, XXXIV VICT. 121 

p. 232, Maule, J., refers to a case of Harvey v. Johnston, mentioned 1871 
in the report as 7 C. B. 295, but really 6 C. B. 295. That case was BRITISH AND 
an action for breach of promise of marriage, and the evidence of y^^x* 
acceptance of the offer was, the plaintiff's going to the place where COMPANY 
she was to be married ; and in Duncan v. Topliam (1) the plaintiff COLSON. 
accepted the offer by sending off the goods as desired ; and see per 
Cresswell, J., 6 C. B. at p. 304. So that it may be that the Court 
refused the rule, not on the ground that the posting of the letter, 
without delivery, was a sufficient acceptance of the offer, but on 
the ground that the sending of the goods was sufficient. Still 
there is the opinion of Mr. Justice Cresswell at nisi prius in support 
of the now plaintiffs' contention. There is also the case of Potter 
v. Sanders (2), before Wigram, Y.C., who held that a contract for 
the sale of an estate was made when the letter containing the 
acceptance of an offer was posted. It arrived ; and he says that 
the vendor by posting did an act which, unless interrupted, con- 
cluded the contract between himself and the plaintiff. But, as I 
have observed, the letter did arrive, and the sender was bound by 
it, and necessarily bound from its date, and could not, therefore, 
after he had sent it and before its arrival, make a contract for the 
sale of the same land with a third person. Perhaps this case, 
therefore, does not prove much. There are also two cases before 
Lord Romilly ; Finucane's Case (3) and HeWs Case (4). In the 
former, he held that posting a letter of allotment which had not 
been received was not sufficient. It is true that there had been 
laches in the company, but Lord Romilly does not seem, as far 
as can be guessed by the short note, to have decided the case on 
that ground. In the latter case he says (5), " Dunlop v. Higgins 
decides that the posting of a letter accepting an offer constitutes 
a binding contract, but the reason of that is, that the post-office 
is the common agent of both parties." He certainly seems, there- 
fore, to understand that case in the sense the plaintiffs here 
contend for. (6) 

As to the cases where it had been held that notice of dishonour 

(1) 8 C. B. 225 ; 18 L. J. (C.P.) 310. (5) Law Rep. 4 Eq. at p. 12. 

(2) 6 Hare, 1. (6) See, however, Reidpath's Case 

(3) 17 W. R. 813. (Law Rep. 11 Eq. 80), cited ante, 

(4) Law Rep. 4 Eq. 9. p. 109, note. 

VOL. VI. L 3 



122 



COUET OF EXCHEQUER. 



[L. B, 



AMERICAN 

TELEGRAPH 

COMPANY 

v. 

COLSON. 



1871 is duly given if the letter is posted, one may say that is a positive 
BRITISH AND mercantile rule peculiar to such cases. Alderson, B., says in 
Slacken v. Cottin (1), "If the doctrine that the post-office is only 
the agent for the delivery of the notice were correct, no one could 
safely avail himself of that mode of transmission." 

Still, these cases are rather in favour of the plaintiffs than other- 
wise. Adams v. Lindsell (2) seems to have nothing to do with the 
question. A misdirected letter was considered as rightly delivered 
on the day it was delivered in fact, so as to enable the receiver to 
act on it. The practice, also, that in proving a letter the posting 
only is shewn, may be relied on. But that is because it must be 
presumed, till the contrary is shewn, that a public establishment 
such as the post-office has done its duty. 

On this review of the authorities they cannot be said to be con- 
clusive either way. I am left, therefore, at liberty to act on my 
own judgment, and as I entertain a strong opinion in favour of the 
defendant on principle, and the Lord Chief Baron and my Brother 
Pigott are of opinion in favour of the defendant, I think we ought 
to make the rule absolute to enter a verdict for him. 



Rule absolute. 



Attorneys for plaintiffs : Lewis, Munns, & Co. 
Attorneys for defendant : Hathaway & Andrews. 



(1) 7 M. & W. at p. 516. 



(2) 1 B. & A. G81. 



VOL. VI.] HILAKY TEEM, XXXIV VICT. ] 23 



[IN THE EXCHEQUER CHAMBER.] 

HOLMES v. NORTH EASTERN RAILWAY COMPANY. 1871 

Negligence Licensee Invitation Customer. 

At the defendants' station at C. it was the practice to unload coal waggons by 
shunting them, and tipping the coal into cells; it was also the practice for the 
consignees of the coal or their servants to assist in the unloading, and for that 
purpose to go along a flagged path by the side of the waggons. The plaintiff 
was consignee of a coal waggon, which could not be unloaded in the usual way on 
account of all the cells being occupied. With the permission of the station- 
master, he went to his waggon, which was shunted in the usual place, took some 
coal from the top of the waggon, and descended on to the flagged path. The flag 
he stepped on gave way, and he fell into one of the cells, and was injured : 

Held (affirming the judgment of the Court below), that, although not getting 
his coal in the usual mode, the plaintiff was not a mere licensee, but was engaged, 
with the consent of the defendants, in a transaction of common interest to both 
parties, and was therefore entitled to require that the defendants' premises should 
be in a reasonably secure condition. 



APPEAL from the decision of the Court of Exchequer (1) dis- 
charging a rule obtained by the defendants to enter a verdict for 
them on the ground that there was no evidence of negligence in 
them causing the injury to the plaintiff complained of. 

Manisty, Q.C. (Kemplay with him), for the defendants. 
Bohn, for the plaintiff', was not called upon. 

THE COURT (Cockburn, C.J., Willes, Keating, Mellor, Montague 
Smith, Lush, Brett, JJ.), affirmed the judgment, for the reasons 
given by the Court of Exchequer. 

Judgment affirmed. 

Attorneys for plaintiff: Doyle & Edwards, for Nixon, Darling - 
ton. 

Attorneys for defendants : Williamson & Hill. 

(1) Reported Law Rep. 4 Ex. 254. 



VOL. VI. M 



124 COUET OF EXCHEQUEE. [L. B. 



1871 WALTEE v. JAMES. 

Payment of Debt l>y Stranger -Discharge of Debtor Ratification. 

The defendant being indebted to the plaintiff, S. who had acted as his attorney 
in the matter of the plaintiff's claim (the amount of which was disputed) but whose 
authority had been countermanded, paid to the plaintiff 601. in discharge of the dis- 
puted claim. The plaintiff afterwards, at the request of S., and before any ratification 
by the defendant, repaid to S. the 60?., and sued the defendant for the debt. The 
defendant pleaded as to 60Z. payment, and relied upon the payment made by S. : 

Held, that it was competent to the plaintiff and S., before ratification by the 
defendant, to cancel what they had done, and that the plea of payment was 
therefore not proved. 



ACTION on an attorney's bill, amounting to 637. 17s. 3d. The 
defendant paid into Court 31. 17s. 3d., and to the residue pleaded 
payment. 

The cause was tried before Mellor, J., at the Gloucestershire 
Summer Assizes, 1870. It appeared at the trial that the plaintiff 
had a claim against the defendant for professional services ; that 
Southall, acting as the defendant's attorney, had been concerned in 
negociation with the plaintiff in respect of this claim, and had 
induced him to accept 601. in discharge of it ; that Southall had 
been instructed by defendant to pay that sum to plaintiff, but 
that before paying it those instructions had been countermanded, 
and he had ceased to act as defendant's attorney ; that, neverthe- 
less, considering himself under a moral obligation to the plaintiff 
to see him paid, he subsequently did pay the 60Z., and paid it, 
as he stated in evidence, in discharge of plaintiff's claim upon 
defendant ; but that afterwards, and before any act of defendant 
assenting to or adopting the payment, he requested plaintiff to 
return him the money, which was accordingly done. It was left 
in some doubt on the evidence whether Southall did or did not 
inform plaintiff, at the time of paying him, that he had ceased to 
act as defendant's attorney. No evidence was given of any adop- 
tion of the payment by defendant before plea. 

The learned judge ruled that the defendant could take advan- 
tage of the payment by Southall, and a verdict was entered for the 
defendant, with leave to the plaintiff to move to enter the verdict 
for him, the Court to have power to draw inferences of fact. A rule 
having been obtained accordingly, 



VOL. VI.] HILAEY TERM, XXXIV VICT. 125 

Jan. 20. Cave (Huddleston, Q.C., with him) shewed cause. 1871 
The payment by Southall to plaintiff, being made and accepted as WALTER 
an absolute discharge of defendant's debt, did, in fact, discharge 
the defendant, and his liability could not afterwards be restored. 
In Fitz. Abr. tit. Barre, pi. 166, it is said: "If a stranger does 
trespass to me, and one of his relations, or any other, give any- 
thing to me for the same trespass, to which I agree, the stranger 
shall have advantage of that to bar me ; for, if I be satisfied, it is 
not reason that I be again satisfied, Quod tota curia concessit." 

[MARTIN, B. That only shews that the trespasser may take 
advantage of the payment, which is clear ; he adopts and ratifies 
the act, and makes it a good accord and satisfaction between him- 
self and the plaintiff.] 

Nothing is said as to the necessity of an express ratification by 
the defendant; only the plaintiff's consent is insisted upon. To the 
same effect is Co. Litt. 206 (b), where it is said that if a stranger, in the 
name of the mortgagor or his heir, tender the mortgage money, 
" and the mortgagee accepteth it, this is a good satisfaction." 

[MARTIN, B. The conclusion of the sentence shews the assent of 
the mortgagor to be necessary : " the mortgagor or his heir agree- 
ing thereunto may re-enter into the land ; omnis ratihabitio retro- 
trahitur et mandato eequiparatur. But the mortgagor or his heir 
may disagree thereunto if he will."] 

In the Roman law the rule prevailed that payment to the 
creditor by a stranger discharged the debtor from liability, although 
the debtor was ignorant of, or even dissented from, the act, lust. 
Lib. 3, tit. 29, 1, and that rule is not opposed to any authority in 
the English law ; the dictum to the contrary, in Jones v. Broad- 
hurst (1) being, as pointed out by Willes, J., in Cook v. Lister (2), 
not necessary to the decision of the case. The cases of Belshaw v. 
Bush (3) and Cook v. Lister (2) practically reduce the decision in 
Jones v. Broadhurst (1) to a question of pleading, and shew that a 
payment made by a third person may be adopted by the debtor, so 
as to discharge him from liability ; and Simpson v. Eggington (4) 
shews that such a payment may be adopted by plea, even though 

(1) 9 C. B. 173. (3) 11 C. B. 191 ; 22 L. J. (C.P.) 24. 

(2) 13 C. B. (X.S.) 543, at p. 594; (4) 10 Ex. 845; 24 L. J. (Ivv) 
32 L. J. (C.P.) 121, at p. 126. 312. 

M 2 3 



126 COUKT OF EXCHEQUER [L. B. 

1871 it has been previously repudiated. That case is stronger than the 
WALTER present, for here there has been no repudiation by the defendant ; 
JAMES. his refusal to allow Southall to pay the plaintiff out of his 
moneys is no evidence of an unwillingness that Southall should pay 
him out of his own. The only difficulty attaching to the rule 
contended for is, that it is said the contractual relation existing 
between the parties cannot be altered except by mutual consent. 
But the payment being for the benefit of the debtor, his consent 
must be presumed until the contrary is shewn ; here not only is 
the contrary not shewn, but he expressly adopts and ratifies it. In 
Lucas v. Wilkinson (J), the decision seems to have turned on the 
question whether Morris paid the bond out of the defendant's 
moneys. 

Henry James, Q.C., and Griffits, in support of the rule. To 
maintain the defendant's position, it must be contended that even if 
the defendant adopted Southall's payment, Southall would have no 
remedy against him ; otherwise the payment could not be presumed 
to be for his benefit, it would only make Southall his creditor 
instead of the plaintiff. But it is not to be supposed that Southall 
intended a gift to the defendant; a payment made without consi- 
deration can ordinarily be recovered back, and the intention to 
give must be proved ; the payment was intended to discharge the 
defendant, because it was expected that defendant would ratify it ; 
but before any ratification, and therefore before the discharge was 
completed, the transaction was undone and the money returned. 
The law is expressly laid down in Jones v. Broadhurst (2) ; Belshaw 
v. Bush (3) ; Simpson v. Eggington (4) ; Bird v. Brown (5) ; Kemp 
v. Balls (6) ; and Lucas v. Wilkinson (1), that payment by a third 
person " is not sufficient to discharge a debtor, unless it is made by 
the third person as agent for and on account of the debtor with his 
prior authority or subsequent ratification." (7) The briefly reported 
resolution cited from Fitzherbert is opposed to this view ; it does 
not negative the necessity of the stranger's assent ; on the con- 
trary, it implies his actual ratification ; and it is merely begging 

(1) 1 H. & N. 420 ; 26 L.J. (Ex.) 13. (5) 4 Ex. 786, at pp. 798-9 ; 19 L. J. 

(2) 9 C. B. 173. (Ex.) 154, at p. 157. 

(3) 11 C. B. 191 ; 22 L. J. (C.P.) 24. (6) 10 Ex. 607 ; 24 L. J. (Ex.) 47. 

(4) 10 Ex. 845 ; 24 L. J. (Ex.) 312. (7) 10 Ex. at p. 847. 



VOL. VI.] HILARY TERM, XXXIV VICT. 127 

the question to say that if the plaintiff here recovers he will be 1871 
' ; aerain satisfied." 



Cur. adv. 
Feb. 14. The following judgments were delivered : 

KELLY, C.B. [after stating the facts of the case, proceeded : ] 
Southall, therefore, in paying the debt appeared to act as the 
defendant's agent ; but it turned out afterwards that, although he 
had originally been authorized by the defendant to come to an 
arrangement with the plaintiff, and to make this payment, that 
authority had been revoked before the payment was made. He 
did not, however, communicate to the plaintiff that he had no 
authority ; on the contrary, he professed to act for the defendant, 
and the plaintiff believed him to be so acting, and received the 
sum paid in full satisfaction of his debt. But when the plaintiff 
found that the money had been paid without the defendant's 
authority, he returned the money to Southall. And now the 
question is, whether the defendant can by his plea of payment 
adopt and ratify the act of Southall, although before action that act 
had, by arrangement between the plaintiff and Southall, been undone. 

Now, the law is clear, that where one makes a payment in the 
name and on behalf of another without authority, it is competent 
for the debtor to ratify the payment ; and there seems to be no 
doubt on the authorities that he can ratify after action by placing 
the plea of payment on the record. Prima facie, therefore, we 
have here a ratification of the payment by the defendant's plea ; 
but whether the payment was then capable of ratification depends 
on whether previously it was competent to the plaintiff and Southall, 
apart from the defendant, to cancel what had taken place between 
them. I am of opinion that it was competent to them to undo 
what they had done. The evidence shews that the plaintiff 
received the money in satisfaction under the mistaken idea that 
Southall had authority from the defendant to pay him. This was 
a' mistake in fact, on discovering which he was, I think, entitled to 
return the money, and apply to his debtor for payment. If he had 
insisted on keeping it, the defendant might at any moment have 
repudiated the act of Southall, and Southall would then have been 
able to recover it from the plaintiff as money received for Southall's 
use. I am, therefore, of opinion that the plaintiff, who originally 



128 COUET OF EXCHEQUER [L. R. 

1871 accepted this money under an entire misapprehension, was justified 
'"WALTER" in returning it, the position of the parties not having been in the 
T * meantime in any way altered, and that the defendant's plea of 
payment fails. The rule must accordingly be made absolute. 

MARTIN, B. I am of the same opinion. The rule which I con- 
ceive to be the correct one may be stated as follows. When a 
payment is not made by way of gift for the benefit of the debtor, 
but by an agent who intended that he should be reimbursed by 
the debtor, but who had not the debtor's authority to pay, it is 
competent for the creditor and the person paying to rescind the 
transaction at any time before the debtor has affirmed the pay- 
ment, and repay the money, and thereupon the payment is at an 
end, and the debtor again responsible. This being, in my judg- 
ment, the true rule, the plaintiff in this case was entitled to 
recover. 

KELLY, C.B. My Brother Cleasby concurs in the judgment of 

the Court. 

Rule absolute. 
Attorney for plaintiff: Southall. 

Attorneys for defendant : W. Eogers, for Wright & Marshall, 
Birmingham. 



Ftll 10 BORROWS AND WIFE v. ELLISON. 

~ Prescription Act (3 & 4 Wm. 4, c. '27), s. 16 Disability Successive Disabilities 
without Break Infancy Coverture, 

When the person to whom the right to bring an action for the recovery of land 
accrues is under a disability, and before the removal of that disability the same 
person falls under another disability, s. 16 of 3 & 4 Wm. 4, c. 27, preserves his 
right to bring an action until ten years after the removal of the latter disability. 

In 1833, the plaintiff became entitled to land, which the defendant then entered 
into possession of, and continued to occupy until action brought. At the time 
when the plaintiff's title accrued she was an infant; she married under age, and 
continued under coverture until the time of bringing this action in 1870. In an 
action by herself and her husband in her right to recover the land : 

Held, that the action was maintainable, notwithstanding that more than twenty 
years had elapsed since the title accrued, and more than ten years since the 
removal of the disability of infancy. 



EJECTMENT tried before Cleasby, B., at the Liverpool Summer 
Assizes, 1870. 



VOL. VI.] 



HILAEY TERM, XXXIV VICT. 



The plaintiff, Ann Borrows, claimed, as one of the testator's 
children, under the will of Joshua Ellison, who died on the 30th 
of June, 1828. By his will the testator devised his freehold estate, 
on his wife's death or marriage, equally between and amongst all 
his children, share and share alike. 

The defendant, the testator's eldest son, claimed under a codicil, 
by which, as he contended, the testator had devised the whol 
freehold estate to him. 

He also contended that the plaintiffs were barred by 3 & 4 
Wm. 4, c. 27, s. 2, as to which the following facts were admitted : 

The widow of the testator married again on the 14th of February, 
1831, and thereupon the defendant entered on the property, of 
which he had ever since kept possession. 

The plaintiff Ann married the co-plaintiff Thomas Borrows on 
the 14th of October, 1833, she being then under age. 

Upon these facts, it was contended for the plaintiffs, that as the 
disability of coverture had commenced before the disability of 
infancy terminated, the disability was continuous, and the right of 
Ann Borrows was saved by s. 16. (1) 

A verdict was entered for the defendant, with leave to the 
plaintiffs to move to enter the verdict for them. A rule having 
been obtained accordingly, 

S. 17 provides that "no entry, 
distress, or action shall be made or 
brought by any person who at the 
time at which his right to make any 
entry or distress or to bring an action 
to recover any land or rent shall have 
first accrued, shall be under any of the 
disabilities hereinbefore mentioned, or 
by any person claiming through him, 
but within forty years next after the 
time at which such right shall have 
first accrued, although the person under 
disability at such time may have re- 
mained under one or more of such disa- 



1871 

BORROWS 

v. 
ELLISON. 



(1) 3 & 4 Wm. 4, c. 27, s. 16, provides 
that, "if at the time at which the 
right of any person to make an entry 
or distress, or bring an action to recover 
any land or rent, shall have first 
accrued as aforesaid, such person shall 
have been under any of the disabilities 
hereinafter mentioned, that is to say, 
infancy, coverture, &c., then such per- 
son, or the person claiming through 
him, may, notwithstanding the period 
of twenty years hereinbefore limited 
shall have expired, make an entry or 
distress, or bring an action to recover 
such land or rent at any time within 
ten years next after the time at which 
the person to whom such right shall 
first have accrued as aforesaid shall 
have ceased to be under any such disa- 
bility, or shall have died, which shall 
have first happened." 



bilities during the whole of such forty 
years, or although the term of ten years 
from the time at which he shall have 
ceased to be under any such disability 
or have died, shall not have ex- 
pired." 



130 COUKT OF EXCHEQUER. [L. R. 

1871 Hotter, Q.C., and Wheeler, shewed cause. (1) The words of the 

BoBBOW8 16th section do not admit of the plaintiffs' construction. The 
*_ section says, that the action may be brought " within ten years 
next after the time at which the person to whom such right shall 
have first accrued as aforesaid shall have ceased to be under any 
such disability," that is, such disability as is mentioned in the 
previous part of the section, namely, a disability existing " at the 
time at which the right of any person to make an entry or distress 
or bring ari action " first accrued. No disabilities, therefore, are 
protected except such as existed at the time when the title first 
accrued. 

It agrees with this that the word is in the singular ; and although 
s. 1 gives to words in the singular the force of the plural, that can- 
not apply when, as here, the context shews that the singular was 
meant. But if it could, the plaintiffs would not be assisted, for 
still the disability must be " such " a disability, namely, a disability 
existing when the title accrued. 
[THE COURT referred to s. 17.] 

The words of the 17th section limiting the time to forty years, 
" although the person under disability at such time may have 
remained under one or more of such disabilities during the whole 
of such forty years," are not inconsistent with the defendant's argu- 
ment ; the section does not say that one disability may supervene 
upon another so as to continue the protection ; rather the contrary 
may be inferred. The words " under disability," in the first part 
of the section, are general, and if the meaning had been as 
suggested, the same general words would have been used in the 
latter part of the section ; but, on the contrary, the words used are, 
" may have remained under one or more of such disabilities ;" 
these words signify that the person entitled must remain under 
the specific disability or disabilities under which he was when 
his title accrued ; the words " one or more " are probably inserted 
to meet the case of more than one disability existing at the time 
when the title accrued, and one of those disabilities afterwards 
ceasing. 

(1) The questions arising on the defendant's construction, are of no in- 
construction of the will and codicil, as terest; the case is therefore not reported 
to which the Court decided agaiu&t the upou this point. 



VOL. VL] HILAKY TERM, XXXIV VICT. 131 

\Baylis referred to Lessee of Supple v. Raymond. (1)] 1871 

The section of the statute under which that case was decided BORROWS 

differs from 3 & 4 Wm. 4, c. 27, s. 16 ; it has no words referring ELUSOX. 

the disability whose termination is spoken of to the disability 

existing at the time of the title accruing. 

Baylis (Milward, Q.C., with him), in support of the rule, was 

not called on. 

MARTIN, B. The Irish case is directly in point, and I should 
have come to the same conclusion without that authority. We 
cannot read the saving clause in so confined a way as was con- 
tended for by Mr. Holker. The party never at any time being 
free from disability, the disability, though due to different causes, 
must be looked upon as one continued thing. 

PIGOTT, B. I am of the same opinion. The words at the end 
of s. 16 must be construed reasonably. The intention was to give 
an extended time to the person entitled, so long as he remained 
under disability. If no break occurs, but the causes of disability 
overlap, he does so continuously remain under disability, notwith- 
standing there may be more causes than one. 

CLEASBY, B. I am of the same opinion. The words of the 
16th section are " any such disability ;" that is, any of the dis- 
abilities previously mentioned. 

Rule absolute. 

Attorneys for plaintiffs : Gregory & Co. 
Attorney for defendant : S. Marsh. 

(1) Hayes, 6, decided under 10 shall or may, notwithstanding the said 
Car. 1, Sess. 2, c. 6, s. 13 (Irish), which twenty years [limited by s. 12] be ex- 
enacts that "if any person or persons pired, make his entry as he might have 
that hath or shall have such right or done before this Act ; so as such per- 
title of entry [as mentioned in s. 12J son and persons, or his or their heir or 
be or shall be at the time of the said heirs, shall within ten years next after 
right or title first descended, accrued, his or their full age, discoverture, 
come, or fallen, within the age of one coming of sound mind, inlargement out 
and twenty years, femme covert, non of prison, or coming into this realm, or 
compos mentis, imprisoned, or beyond death take benefit of the same, and 
the seas, that then such person and per- at no time after the said ten years." 
sons, and his and their heir and heirs, 



132 COUET OF EXCHEQUER [L. R. 



[IN THE EXCHEQUER CHAMBER.] 

1871 MAXTED v. PAINE. 

Feb. 11. [SECOND ACTION.] 

Stock Exchange Sale of Shares Usage of Stock Exchange Ultimate Buyers 
Ticket Principal and Agent. 

The plaintiff having through his brokers on the Stock Exchange sold to the 
defendant, a jobber, ten shares in Overend, Gurney, & Co., Limited, the defendant 
on the " name day " passed a ticket to the plaintiffs brokers containing the name of 
G. as the ultimate buyer. No objection was made to the name, and the plaintiff 
executed a transfer to G. of the ten shares. It was afterwards discovered that the 
brokers named on the ticket as G.'s brokers had been instructed to buy by S., and 
had, in fact, bought a large number of shares for S. as undisclosed principal. The 
ten shares in question (the dealings not being for specific shares) were delivered to 
them as part of the shares so purchased; but the name of G. was passed in 
pursuance of S.'s instructions, and according to an arrangement by which G., 
who was a person of no means, consented to allow his name to be passed in 
consideration of a sum of money paid to him. The purchasing brokers, as well as 
the defendant, were ignorant of this arrangement. Calls having been made on 
the shares which the plaintiff was compelled to pay, and which he was unable to 
recover from G., he brought this action to recover them from the defendant : 

Held, affirming the judgment of the Court below (Lush, J., dissenting), that 
the action was not maintainable. 

By Keating, Mellor, Montague Smith, and Brett, JJ., that the defendant had 
fulfilled his obligation by passing a name to which no objection was taken within 
the time limited by the usage, and that in the absence of any fraud on his part, 
he could not be treated as ultimate buyer himself, or be made liable for the calls. 

By Blackburn, J. : 

1. That under a contract for the sale of shares, apart from Stock Exchange 
usages, the seller cannot require the buyer to take a transfer into his own name ; 
but that he has a right to be indemnified by the buyer against future calls, which 
is not affected by his transfer of the shares to the buyer's nominee. 

2. That in a contract for the sale of shares made on the Stock Exchange " fur 
the account," all the parties to it who are members of the Stock Exchange con- 
tract amongst themselves as principals, and there is no difference between a 
member who is a jobber and one who is not. 

3. That according to the usage of the Stock Exchange, as proved in this case, 
upon a sale on the Stock Exchange " for the account," fifteen days is the extreme 
time within which the member holding or issuing the name-ticket, as the case 
may be, is to declare any failure on the part of the issuer of the ticket to accept 
and pay for the shares, or on the part of the holder of the ticket to deliver them ; 
and the omission to do so has the effect of preventing him from coming on the 
intermediate parties who have passed the ticket for such default. 

When the transfers have been delivered to the issuing member, and the price 
is fully paid to the holder, there is a novation, which frees the member who 
merely passed the ticket from further liability. 



VOL. VI.] 



HILARY TERM, XXXIV V1CT. 



133 



If either, or both, of those members were agents for others, the principals, though 
undisclosed, may sue and are liable to be sued to the same extent as their agents, 
and no more. 

The novation is between the holder of the ticket or his principal and the issuer 
of the ticket or his principal. 

4. That, in the present case, the defendant completely fulfilled his contract by 
delivering on the name day a ticket really issued by a member of the Stock 
Exchange, and was not responsible for any mistake or misconduct on the part of 
the issuers of the ticket, not having been applied to within the time limited for 
that purpose by the rules of the Stock Exchange. 

By Cockburn, C.J., that G. was the ultimate purchaser of the shares within 
the meaning of that term as applied in the usage of the Stock Exchange, and was 
so treated by the plaintiff, and that the defendant was therefore free from liability 
according to the decision in Grissell v. Dristowe (Law Hep. 4 C. P. 36). 

By Lush, J., that G. not being the real buyer of the shares, the defendant, by 
passing G.'s name as ultimate purchaser, had not fulfilled his contract with the 
plaintiff, whom he was therefore liable to indemnify against calls. 

ERROR from the decision of the Court of Exchequer in favour 
of the defendant on a special case. (1) 

May 18, 19, 1870. The case was argued for the plaintiff by 
Manisty, Q.C. (Herschell with him), and for the defendant by 
Macnamara (Hellish, Q.C., and Beresford with him). 

The following authorities, in addition to those referred to in the 
Court below, were cited during the argument : Paynes Case (2) ; 
Bank of Hindustan v. Kintrea (3) ; Castellan v. Hcbson (4) ; 
Whitehead v. Izod (5) ; Shaw v. Fisher. (6) 

Cur. adv. vult. 

Feb. 11, 1871. The following judgments were delivered : 

MONTAGUE SMITH, J. My Brothers Keating, Mellor, and 
Brett, agree with me in the following judgment: In this case 
the plaintiff claims to be indemnified by the defendant in respect 
of two calls which he was compelled to pay on ten shares in 
Overend, Gurney, & Co. The shares were sold on the Stock 
Exchange by the plaintiff's brokers to the defendant, a jobber, 
and afterwards transferred by the plaintiff under the circumstances 
hereinafter mentioned to a person called Goss. The transfer was 

(1) Reported Law Rep. 4 Ex. 203, (3) Law Rep. 5 Ch. 95. 
where the facts are fully stated. (4) Law Rep. 10 Eq. 47. 

(2) Law Rep. 9 Eq. 223. (5) Law Rep. 2 C. P. 21'S. 

(G) 5 De G. M. & G. 596. 



1871 

MAXTED 

v. 
PAINE. 



134 COUET OF EXCHEQUER. [L. E. 

1871 not registered, and the plaintiff remaining on the register was 

~MAXTED ~~ compelled to pay two calls made after the transfer to Gross. He 

v ' now claims to be indemnified by the defendant on an implied 

sr AINE. 

obligation which he alleges to exist under the original contract of 
sale. The principal questions for consideration are, what are the 
usages of the Stock Exchange with reference to the circumstances 
of this case, and to what extent those usages are applicable to, 
and form part of this contract, and govern the performance of it ? 
The sale was made on the Stock Exchange on the 24th of May, 
1866, after the stoppage of the company, by Messrs. Sandeman, 
Dobree, & Co., the brokers of the plaintiff, to the defendant, a jobber. 
It is found in the case that the plaintiff instructed Messrs. Sande- 
man & Co., whom he knew to be brokers on the Stock Exchange, 
to sell the shares for him on the Stock Exchange, and that they 
were sold there by such brokers in pursuance of those instructions 
in the usual manner " for the account day." Certain rules and 
usages of the Stock Exchange exist relating to sales made for the 
account day, and to the manner in which such sales are to be 
carried out. 

It appears that the shares were 50Z. shares, and that 15?. only 
had been paid up. The sale was at 17 discount, which means 
that, contrary to the ordinary course of things between seller and 
buyer, the seller was to give 21. to the buyer to take the shares 
from him. It must be evident that in a sale of shares under these 
conditions the vendor is selling in order to relieve himself from 
future liability to calls upon the shares, and consequently it is 
implied in such a contract that a new taker of the shares shall be 
substituted for him, who will agree to take the liability on himself. 
In furtherance of this implied understanding it has been held that 
the person who assents to be the transferee, and has a transfer 
executed to him, although he is not the original buyer, becomes 
in privity with the transferor, and is bound to indemnify the trans- 
feror from liability to future calls: see Walker v. Bartlett (1), 
Hawkins v. Malfby. (2) 

The usages and practice of the Stock Exchange are stated in 
the case. It appears from them that, in bargains for the account, 
the jobber, on the day previous to " the account day," is bound to 

(1) 18 C. B. 815; 25 L. J. (G.P.) 263. (2) Law Eep. 3 Oh. 188. 



VOL. VI.] HILAEY TERM, XXXIV VICT. 135 

pass to the selling broker the name of a person willing to take the 1871 
shares as " the ultimate purchaser " of them. This day is called MAXTED 
" the name day," and, of course, is as familiar as " the account 
day." If there have been no sub-sales, or if he chooses to do so, 
the jobber may pass his own name as the ultimate purchaser. 
The name of the ultimate purchaser is given by passing a docu- 
ment called " the name ticket," made out by the broker of the 
ultimate purchaser, and which ticket may, and most frequently 
does, pass through the hands of many intermediate dealers on the 
Stock Exchange. It is a consequence of these usages that the 
jobber is not bound to take a transfer of the shares to himself, but 
may, in the above way, pass the name of another person as a pur- 
chaser ; and when this is done the transfer is made to such pur- 
chaser. 

It is found to be a part of the custom, and it is a part which has 
a very material bearing on the questions arising in this case, that 
the selling broker, at any time before the transfer of the shares is 
executed, mav object to the name given by the jobber ; and in the 
event of the jobber and broker failing to agree, the broker may 
appeal to the committee of the Stock Exchange, who, on such 
appeal, " have the power to require the jobber to give a better 
name." It appears to us that this custom is distinctly and positively 
found : all which is left at all uncertain in the finding, relates 

7 O 7 

only to the mode in which the committee would act in the exercise 
of their power. The jobber, by the rules, pays to the selling broker 
the price at which he agreed to buy the shares. It is found in 
the case that when the price has been paid, and the jobber has 
given a name pursuant to the rules, which is, of course, subject to 
the usage giving the right to object, he has fulfilled all the obliga- 
gations required of him by the usages of the Stock Exchange. It 
may be that the rules of the Stock Exchange for the completion 
of bargains were mainly framed with reference to the dealings in 
shares where the liability to future calls is not in contemplation ; 
but the usage giving the right to object to a name, above referred 
to, seems to be precisely adapted to the cases of transactions in 
shares where such future liability exists. It must be notorious, 
as matter of fact, that for many years there have been dealings to 
an immense extent in shares in public companies, which have not 



136 COURT OF EXCHEQUER. [L. R. 

been fully paid up, and as to which, therefore, a liability to future 
MAXTED calls would rest upon the seller until the transfer was registered. 

^ v ' The fact that the seller, as in this case, sells his shares at a dis- 
PAIKE. 

count larger than the sum paid on them, whilst it shews that the 
liability to future calls is thought to be imminent, does not alter 
the character of the transaction. 

There would, therefore, appear to be no sufficient reason for 
coming to the conclusion that the rules of the Stock Exchange, 
qualified, as above, by the power to object to the name given as 
the ultimate purchaser, should not be applicable to sales of shares 
such as that made between the plaintiff's brokers and the defendant 
in this case, although the effect of the contract, no doubt, is rather 
to transfer a liability than a benefit. We have referred to the 
usages of the Stock Exchange for the purpose of directing atten- 
tion to such parts of them as bear most directly upon the special 
circumstances in which this case differs from those already decided ; 
but it is unnecessary further to discuss the general question, be- 
cause it has been decided by courts of appeal of co-ordinate juris- 
diction that contracts of the character above referred to are to be 
interpreted and governed by the usages of the Stock Exchange : 
Coles v. Bristowe (1) ; Orissell v. Bristowe. (2) 

The main contention on the part of the plaintiff was this : 
Assuming that the rules of the Stock Exchange do apply to sales 
of the above description, and that where the name of a bona fide 
purchaser is given and accepted and the transfer made to him, the 
jobber is no longer liable ; yet that, under the circumstances of 
this case, where it is contended that the name given was not that 
of a real ultimate purchaser, the responsibility of the jobber is not 
terminated. The short facts on this point are as follows : Messrs. 
Foster and Brathwaite, the brokers issuing the name ticket, which 
ultimately was passed to the defendant and by him to the plaintiff's 
brokers, had bought ten shares for Sir Samuel Spry. This pur- 
chase was made before the stoppage of Overend, Gurney, & Co. ; 
and after that stoppage Sir Samuel Spry, not desiring to take the 
shares, procured, through his solicitors, a person of the name of 
Goss to take a transfer of the shares into his name, and paid him 
4Z. 10s. for his assent to do so. Goss was a person without means. 
(1) Law Rep. 4 Ch. 3. (2) Law Rep. 4 C. P. 36. 



VOL. VL] HILARY TERM, XXXIV VICT. 137 

Sir Samuel Spry's solicitors then instructed Messrs. Foster and 1871 
Brathwaite not to pass his name, and gave them the name of Goss MAXTED 
to be passed in the name ticket. Messrs. Foster and Brathwaite 
accordingly put Goss's name in the ticket, which, after passing 
through several brokers' hands on the Stock Exchange in the 
usual way, ultimately came to the defendant, who passed it on to 
Messrs. Sandeman & Co. The plaintiff's brokers, Messrs. Sandeman 
& Co., without making any inquiry about Goss or raising any 
objection to him, prepared the transfer of the shares to Goss, and 
it was executed by the plaintiff, and then delivered by Sandeman 
& Co. to Foster and Brathwaite, who handed it to the solicitors 
who acted for Sir Samuel Spry, and apparently for Goss, in the 
transaction. The price was duly settled by the defendant with 
the plaintiff's brokers. The name and address of Goss, who lived 
in London, were truly given to Foster and Brathwaite, and stated 
in the name ticket ; but neither they nor the defendant knew the 
circumstances under which his name was given, except that Foster 
and Brathwaite, of course, knew that Sir Samuel Spry had in- 
structed them to purchase, and had then, through his solicitors, 
instructed them not to give his name, but to give the name of 
Goss. 

Goss, although he did not execute the transfer, clearly assented 
to have the transfer made to him. The transfer is dated on the 
31st of May, 1866, and was handed over by Sandeman & Co., the, 
plaintiff's brokers, to Foster & Brathwaite on the following 7th of 
June. Two calls were subsequently made, viz., on the 20th of 
August, 1866, and the 10th of June, 1867, which the plaintiff was 
obliged to pay. No notice of this was given to the defendant, 
and no claim was made by the plaintiff until the 13th of April, 
1867, when he made an application to the committee of the Stock 
Exchange. It is obvious upon this statement that everything had 
been done for completing the contract by transfer, so far as the 
defendant is concerned, in conformity with the usages of the Stock 
Exchange. And supposing the name of Sir Samuel Spry had 
been passed on the ticket, it could not have been contended, con- 
sistently with the decisions already referred to, that after the 
plaintiff had accepted his name and had executed the assignment 
of the shares, the defendant would still have remained liable to 



] 38 COUBT OF EXCHEQUEE. [L. E. 

1871 indemnify the plaintiff against future calls. But it is said that 
MAXTED the substitution of the name of Goss for Sir Samuel Spry was an 
P " irregularity, or a fraud, preventing the operation of the rules of 
the Stock Exchange, which would put an end to the liability of 
the defendant. There was clearly no irregularity or fraud so far 
as the defendant was concerned. It is not necessary to determine 
whether the circumstances under which Gloss became the sub- 
stitute for Sir Samuel Spry gave to the plaintiff the right to resort 
to him or to his brokers for indemnity. But they do not seem to 
us to constitute a fraud which prevents the defendant from 
asserting that he has performed all the obligations of his contract. 
It must, in the usual order of business, be a common and well 
known practice for persons to give orders to brokers to purchase 
shares which they do not intend to have transferred into their 
own names, as in the cases where shares are bought as a gift to 
relatives, and other like cases. The mere fact, therefore, that the 
buying broker does not insert the name of the person by whom 
he is instructed in the ticket is, probably, no irregularity at all. 
It is not found as a fact that it is an irregular proceeding, and it 
certainly would not by itself be evidence of fraud. In many 
cases it may obviously be of little practical consequence to the 
seller, so long as he retains the right to object, whether the name 
be that of an original buyer or not, for it must very frequently 
happen, as a matter of fact, that the original buyers of worthless 
or doubtful shares are speculative persons without means. The 
protection of the seller is found in the usage of the Stock Exchange, 
which gives him the right to object to the proposed transferee, 
and to require a better name. In this case, Messrs. Foster & 
Brathwaite of course knew when they passed Goss's name that 
he was not their principal, but the defendant certainly could not 
know whether Goss was the original buyer from them or not. In 
fact, in cases of this kind, none but the brokers issuing the 
name ticket can know whether the name in the ticket is that of 
the person originally giving authority to buy, or a nominee of his. 
The circumstances under which Goss, a man without means, was 
induced by the solicitors of Sir Samuel Spry to consent to take 
the transfer may, or may not, amount to a fraud, which, as between 
the plaintiff and Sir Samuel Spry, would entitle the plaintiff to 



VOL. VI.] HILARY TERM, XXXIV VICT. 

relief: see on this point the judgment of Jarnes, V.C., in Castellan 1871 
v. Hobson (1) ; but we fail to see how those circumstances shew MAXTED 
that the defendant has not fulfilled his obligation under the con- 
tract according to the rules of the Stock Exchange. The effect of 
the passing of the name of the nominee of the person who originally 
authorized the buying broker to purchase the shares, instead of 
the name of such person, cannot, we think, be to abstract from the 
contract between the plaintiff and the defendant the usages of the 
Stock Exchange. Those usages must still form a part of the con- 
tract, and the question whether the defendant has fulfilled the 
obligations of his contract must be solved with reference to them ; 
and, supposing this to be so, it appears to us that the defendant 
has done all he was bound to do, and all he could do, in accordance 
with the usages. Moreover, he has confessedly acted in a per- 
fectly bona fide manner throughout the transaction. On the other 
hand, the plaintiff's brokers have not done all they might have 
done in accordance with the usages of the Stock Exchange. 
They, as well or better than the defendant, must have known the 
object the plaintiff had in selling his shares, and however unusual 
it may be to do so, they might have made inquiry about Goss, 
and, if dissatisfied, might within the proper time, viz., ten days, 
have objected to accept him as the transferee, and required the 
defendant to give a better name. If the plaintiff's brokers and 
the defendant had not agreed on the matter, then, according to 
the usages, the committee of the Stock Exchange might have 
been referred to, and might have ordered a better name to be 
given. 

We cannot doubt upon the evidence that if an objection had 
been made by the plaintiff's brokers, a better name than Goss's 
would have been obtained either by agreement or under compul- 
sion. It results from what has been already said, that the loss of 
the plaintiff might have been prevented if his brokers had done 
what, by the usages of the Stock Exchange, they were empowered 
to do ; but they made no inquiry or objection, and adopted Goss 
as a transferee. The plaintiff transferred the shares to him. and 
the deed of transfer was handed over, without any intervention of 
the defendant, directly by the plaintiff's brokers to Messrs. Foster 
(1) Law rtcp. 10 Eq. -17. 

VOL. VI. N 3 



140 COUET OF EXCHEQUER. [L. B. 

9 

1871 & Brathwaite. The plaintiff, therefore, not only assented to treat 
MAXTED Goss as assignee, but executed the contract by transferring the 
p v - shares to him, and the plaintiff and Goss were thus brought to- 
gether as contracting parties : Hawkins v. Maltby. (1) It is true 
that when this was done, the plaintiff was ignorant of the circum- 
stances under which Sir Samuel Spry had obtained the assent of 
Goss to be transferee, and these acts may not interfere with his 
remedy, if any, against Sir Samuel Spry. It may be but on this 
question we give no opinion that sufficient evidence exists to 
shew that Sir Samuel Spry was the real purchaser as between 
himself and the plaintiff : see Castellan v. Hobson (2) ; but the 
acts done by the plaintiff, when considered as between the plaintiff 
and the jobber, are in strong contradiction to the supposed right 
of the plaintiff to treat the defendant as the purchaser of the 
shares, and to found on that relation the implied liability to 
indemnify him from the calls. This implied liability was un- 
doubtedly imposed upon Goss by his acceptance of the transfer, 
and the plaintiff having actually transferred the shares to him as- 
the purchaser, cannot, we think, now alter the position of the 
defendant, and throw upon him the liabilities, when he cannot 
give him the rights, of a purchaser. The attempt to do so was not 
made until nearly a year after the completion of the transaction, 
and after the plaintiff had long known the actual state of the case. 
If the jobber's liability were not at an end when he has passed the 
name of a purchaser to wjiom no reasonable objection can be made, 
or of one to whom no objection is made when it might have been, 
and who is adopted by the seller as the transferee, it would be 
difficult to say when and under what conditions it would cease. 
The usages of the Stock Exchange provide at once for the security 
of the seller and of the jobber ; they give the right to the seller 
to object to the nominee, and make the jobber liable as purchaser 
until a nominee is tendered to whom no objection can reasonably 
be made, or one to whom no objection is made when it might have 
been. Suppose the plaintiffs had made inquiry about Goss, and 
had^then elected to accept him ; or suppose Goss had been solvent 
when the" ticket was first passed, but became insolvent after the 
transfer ; or suppose a man of apparent solvency was named in 
(1) Law Rep. 3 Ch. 188. (2) Law Rep. 10 Eq. 47. 



VOL. VI.] HILARY TERM, XXXIV VICT. Ml 

the ticket, who, being really insolvent, was accepted ; how uncer- 1871 
tain under these and many other conditions which might be sug- MAXTEU 
gested would the liabilities of the jobber be if the usages did not 
determine them. It is not likely that any rules will satisfactorily 
meet all the questions which may arise in cases of this kind, where 
the real nature of the transaction is that the holders of shares with 
large prospective liabilities are trying to dispose of them to un- 
known substitutes, but we confess that it seems to us the usages of 
the Stock Exchange in this respect, if acted on, would reasonably 
provide for the security both of the seller and the jobber, and if 
the brokers for the sellers Avill take care to exercise the power of 
objection in cases requiring it, their employers may in future be 
protected from the danger of transferring their shares to persons 
unable to fulfil the obligations they undertake. It appears to us 
that our present judgment is consistent with and supported by the 
recent decisions in the courts of appeal both of law and equity. 
The present case is clearly distinguishable from Cruse v. Paine (1), 
where the jobber was held liable. In that case the contract was 
made " with registration guaranteed," and Lord Hatherley, L.C., 
determined the case with reference to this express guarantee which 
had not been fulfilled. The case of Maxfed v. Paine (1st action) (2) 
is also distinguishable, for in that case the person whose name was 
passed as the buyer had not agreed, when his name was so passed, 
to purchase or take the shares, and the Court of Exchequer in 
giving judgment in the case now before us, which was subsequently 
determined, did not apparently consider their decision in the 
former case to affect or govern the present. 

In the result we think the judgment of the Court of Exchequer 
ought to be affirmed. 

LUSH, J. I regret that I am unable to concur with my learned 
Brethren in thinking that the judgment of the Court below ought 
to be affirmed. As the facts have been fully stated in the judg- 
ment already delivered, I do not repeat them. 

The question is, what was the contract of the defendant as inter- 
preted by the usage of the Stock Exchange set out in the case, 
that usage being supplemented by the printed rules ; there being 

(1) Law Rep. 4 Ch. 441. (2) Law Rep. 4 Ex. 81 . 

N2 3 



142 COURT OF EXCHEQUER. [L. R. 

1871 no doubt that the usage was incorporated into and formed part of 

~ MAXTED the contract. If the contract was, that he would, if he did not 

p v \ take the shares himself, give as his substitute the name of his 

sub-vendee, he has broken his contract. If, on the other hand, the 

alternative was that he would give the name of some person willing 

to take them without regard to whether that person should be the 

buyer or not, he has fulfilled his contract, and the plaintiff must 

fail. 

The question, as observed by Bramwell, B., in the Court below, 
is entirely a question of fact ; one which if the cause had been tried 
must have been left to the jury. We are, however, by the case 
put in the place of the jury, and must take upon ourselves the 
functions which properly belong to, and which I cannot help 
thinking would in this case have been much more satisfactorily 
performed by them. Whether, if the shares were to turn out pro- 
fitable, Sir Samuel Spry would be able to invite the aid of the 
courts to get them back from Goss seems to me irrelevant to the 
inquiry. The question is not, Avhat are the rights of Sir Samuel 
Spry as against Goss, but what are the rights of the plaintiff as 
against his vendee; whether the defendant had a right to put 
forward Goss as the transferee instead of Sir Samuel Spry. 

In the cases of Coles v. Bristowe (1), and Grissett v. Bristowe (2), 
the jobber had done what, it is contended by the present plaintiff, he 
ought to have done here, namely,' he had given, as the transferee, 
the name of the real purchaser, and the decision was that he had 
by so doing performed his contract, and was therefore not answer- 
able for any subsequent default of the transferee. In this case the 
,-name he has given is not that of the purchaser. Is the distinction 
material ? I cannot help thinking that it is. Now, I cannot sup- 
pose that the rules of the Stock Exchange were devised with any 
view to their sanctioning or allowing of any such trickery as was 
perpetrated in this case. It is as much the interest of that body 
as it is the interest of the public who buy and sell through their 
agency, to promote fair dealing. The rules appear to have been 
framed for the twofold purpose of giving all possible facility for 
the transmission of shares from hand to hand in the interval 
between the purchase and the settling day, and also of securing 
(1) Law Rep. 4 CL. 3. (2) Law Rep. 4 C. P. 36. 



VOL. VI.] HILARY TERM, XXXIV VICT. 143 

and enforcing by the agency of a domestic tribunal the bona fide 1871 

performance of contracts. I cannot, therefore, give to the usage MAXTED 

such a construction as would enable the buyer to evade the liability 

which the contract of purchase involves, except so far as I can see, 

from the plain terms of the usage, that it was intended he should 

be relieved from that liability. Looking at the evidence as to 

what the usage is and to the printed rules of the Stock Exchange, 

I think the object clearly is to bring together on the account day 

the original seller and the ultimate buyer. There is nothing in 

the evidence or the rules which would suggest to my mind the 

notion that the substitution of any one but his sub-vendee would 

satisfy the contract of the jobber, but the contrary. It is plain 

that if on the settling day the jobber remains the holder of the 

shares he has no option. The statement is explicit that in such 

case he must " take to the shares himself," an expression which I 

can only interpret as meaning that he must take a transfer of 

them to himself. If he sells them he sells to a broker who is by 

the terms of the 87th rule (1) bound to pass to him in the same 

way a ticket containing the " name and address of the buyer," and 

this ticket the jobber is, by his contract, at liberty to "pass on to 

his vendor. Every broker who subsequently buys the shares buys 

upon the same terms. So that what the rules contemplate is the 

transfer to the jobber himself if he has not sold the shares, and the 

transfer to his vendee if he has. 

If, when he has sold the shares, he is at liberty to give to his 
vendor the name of a person who is not the buyer, I cannot con- 
ceive why he should be prohibited from giving the same name 
when he has not sold. For it is no concern of the seller what the 
jobber does with the shares. All that he wants is a transferee who 
is able and willing to answer for any calls which may thereafter be 
made, and such person, it is presumed, he will find in the person 
who buys them. The inference, to my mind, from this prohibition 
is irresistible that the intention was to prevent the substitution of 
a sham purchaser for the real one. 

Great stress was laid upon the fact, which is stated in the case, 
that both the defendant and the brokers who first handed in the 
ticket with Goss's name, were ignorant of the circumstances of 
(1) Set out Law Hep. 4 C. P. at p. 54. 



144 COURT OF EXCHEQUER. [L. R. 

1871 Goss, and of the arrangement by which he was induced to allow 
MAXTED the use of his name, and counsel shrank from contending that 
p v ' either of these parties would have been justified in giving Goss's 
name if they had known who and what he was. But I am unable 
to see, upon the grounds taken by the defendant, what difference 
this would have made. If it is within the contract to give in the 
name of any person willing to take the shares, whether he be the 
buyer or not, subject to the contingency of the seller objecting to 
him, the defendant would have been equally justified in what he 
did if he had done it with fall knowledge of the facts. If it is not 
within the contract, but a breach of it, his ignorance that it is a 
breach does not exonerate him. 

It was. contended, that this construction of the usage is un- 
reasonable and must be rejected, inasmuch as the defendant did 
not, and jobbers and brokers of intermediate buyers, cannot, in 
general, know whether the name handed to them is that of the 
real purchaser or not. 

If the incurring of liability for the acts and defaults of others 
were uncommon in matters of business, there would be force in 
the objection. But responsibilities of this kind are constantly 
undertaken in commercial transactions. A merchant sells a cargo, 
which he warrants to be of a given quality, not because he has 
seen or knows anything about it, but merely because he bought it 
with a warranty. Another contracts to deliver goods on a given 
day, trusting to the engagement of the person of whom he bought, 
that he will deliver on that day. It is one of the necessities of 
commerce that men should act upon the faith of each other's 
engagements. 

What is there unreasonable in supposing that the jobber who 
sells trusts to the good faith of the broker that the latter will 
perform his contract ? The merchant who warrants the quality of 
his goods knows that if the warranty is broken it will be no excuse 
that it was broken by the merchant who sold to him, but that he 
must answer to his vendee for the loss his breach of contract has 
occasioned, and look to his vendor for reimbursement. So, in this 
case, the jobber must answer for his breach of contract to the 
seller, and must look to the broker who bought of him for re- 
imbursement, and he, in his turn, to his vendee, and so on till the 



VOL. VI.] HILARY TERM, XXXIV VICT. 145 

delinquent is reached. In no other way can justice be done, at 1871 
least in a court of law, whatever remedy there may be in equity, MAXTED 
inasmuch as there is no privity, and, therefore, no right of action 
between the original seller and the ultimate purchaser who does 
not take a transfer ? 

Another point relied on is, that time is given by the usage for 
inquiring into the sufficiency of the nominee, and this, it is alleged, 
implies that the jobber is at liberty to name whom he will, seeing 
that the vendor is at liberty to reject him if he can shew that the 
nominee is not a responsible person. I cannot see that any such 
implication arises from this provision. The real purchaser may be 
a person whom the vendor may not choose to trust, one whom he 
may not unreasonably decline to take in substitution for the jobber 
to whom he sold, and it is a reasonable qualification of the option 
to put another in his place, that the other shall be a responsible 
person. 

I agree that if Goss had been the real buyer, the not objecting 
to his sufficiency within the stipulated time would have precluded 
the plaintiff from taking objection to his sufficiency afterwards. 
But if the contract was, as I take it to have been, that the real 
purchaser should be named, the fact that Goss was accepted as 
such in ignorance of his real character, cannot be a defence to the 
breach of contract. 

A further ground of objection was, that the transfer of the 
shares to Goss concludes the plaintiff, as he has thereby disabled 
himself from completing his contract with the defendant, and has 
acquired a new cause of action against Goss. I agree that by the 
transfer of the shares to, and their acceptance by Goss, the latter 
became liable to an action for not indemnifying the plaintiff 
against further calls. This is a liability arising out of the relation 
of transferor and transferee, and is contemplated by the contract. 
It is, in fact, the condition upon which the jobber is relieved from 
personal performance. The very ground of complaint is, that this 
liability ought to have been undertaken by Sir Samuel Spry. 
The defendant, in effect, said by his contract (assuming I am 
right in my construction of it), " I will either take the shares 
myself, or give you the name of my sub-vendee, who will take 
them, and therefore become liable to indemnify you against future 



COUET OF EXCHEQUER. [L. E, 

1871 calls." But he did not give the name of his sub-vendee, and the* 

MAXT~ED ~ consequence is, that the plaintiff has in ignorance of that fact; 

p v ' transferred to Goss, and, by so doing, has lost the remedy which./ 

he would have had against Sir Samuel Spry. By the act of the- 

defendant, or those for whom I think he became responsible, the- 

plaintiff has been induced to transfer to a sham buyer, who is 

insolvent, instead of to the real buyer who is solvent. 

The other branch of this objection, namely, that the plaintiff 
has put it out of his power to deliver the shares to the defendant,, 
is based upon a misconception of the nature of the action. If the- 
complaint were that the defendant refused to accept and pay for 
the shares an averment of readiness and willingness to deliver them 
would be essential, but this is like the case where the buyer of 
goods has induced the seller to deliver them to a third person upon, 
his guarantee that that person is solvent. In such case the action: 
is not for the price but for such damage as the seller has sustained, 
by reason of the insolvency of the third person. Another argu- 
ment urged upon us, and one which appears to have weighed witli/ 
the Court below, was, that to hold the jobber bound to give the- 
name of the real buyer would operate as an inconvenient restric- 
tion, inasmuch as it would prevent purchasers from vesting shares 
in trustees of settlements or making gifts of them by way of 
advancement or otherwise. If such should be the consequence, 
the inconvenience would be as nothing compared with the mischief 
which, in my opinion, would result from the opposite decision. Ifc 
matters little that the buyer in the cases supposed should be 
obliged to take the transfer to himself in the first instance and 
then pass them over to his trustee or donee ; but it is of great 
moment that no encouragement should be given to evasion or 
trickery. I arn, however, far from being convinced that such 
consequence would follow. There is a substantial distinction' 
between a person who takes with the intention of holding as 
owner and bearing the burden of ownership and one selected for 
the ( 'mere purpose of enabling the owner to take the chance of 
profit and avoid the risk of loss ; one who cannot bear the burdens 
of ownership, and who, for that very reason, is chosen, and consents 
to take the shares in his name. It does not follow because the 
latter is not deemed to be the " buyer " that the former may not 



VOL. VI] HILARY TEftM, XXXIV VICT. 147 

well be regarded as such within the contemplation of the parties 1871 
and the reasonable scope of the usage. MAXTED. 

For these reasons I ain of opinion that the judgment of the 
Court below is erroneous. 

BLACKBUKN, J. In this case the plaintiff, through his brokers, 
Sandeman, Dobree & Co. (who were members of the Stock 
Exchange), on the 24th of May, 1866, made a contract on the 
Stock Exchange for the sale to the defendant, a jobber (also a 
member of the Stock Exchange) of 100 shares in a joint stock 
company, Overend, Gurney and Co., Limited, at 17 discount 
for the next account day, viz., the 30th of May, 1866. As far as 
regards thirty of those shares no question was ever raised, and as 
regards sixty of them it was admitted, in the court below, that the 
defendant had fulfilled his contract, and no attempt has been made 
in the Court of Error to question the judgment given for the 
defendant in respect of so much. The facts as relates to the 
remaining ten shares are as follows : 

The defendant Paine, in the course of his business as a jobber 
had, besides contracting with Sandemau & Co. for the purchase 
from them of 100 Overends on the terms of being paid by them 
21. a share for relieving them of what was, at the time, considered 
by the parties a burthensome possession, contracted with Messrs. 
Barry & Co. (also members of the Stock Exchange) for the sale to 
them for the same account of Overends, on what terms as to pay- 
ment is not stated in the case. Foster and Brathwaite (also 
members of the Stock Exchange) had, it appears from the twenty- 
fifth paragraph, purchased from some member of the Stock 
Exchange, whose name is not given, 140 Overends for the same 
account, as I collect though it is not expressly stated, at a discount 
of something not far from half, but at all events so that Foster & Co. 
had to pay for the shares, which, at the time when this contract 
was made were considered, by the parties to it, a valuable possession. 
In making this last contract Foster and Brathwaite, who were 
brokers, were in fact acting for Sir Samuel Spry, who is not a 
member of the Stock Exchange. 

All contracts on the Stock Exchange are made by the members 
among themselves as principals, and though from the fact that one 



148 COUET OF EXCHEQUER. [L. E. 

1871 of the parties is a broker the other would hav good reason to 
MAXTED believe that there was an undisclosed principal behind, he would 
n0 ^ know that for certain, and the contract would have the effect 
of making the two members liable to each other as principals. 
The undisclosed principals of those two members can at law enforce, 
and are at law liable for the contracts made by their agents ; and 
the rales 49, 61, and 62 of the Stock Exchange (1), though they 
indicate clearly a wish to exclude all non-members from any right 
to enforce a contract made on the Stock Exchange, are ineffectual 
for that purpose; but though not effectual for this object, they 
have, in my mind, great importance when we come to construe the 
rules of the Stock Exchange and their usages, as those rules shew 
a clear intention as much as possible to confine the power to enforce, 
and the liability on, contracts to members only. 

Foster & Co., as such members, in due course issued a ticket. 
Whether this ticket was originally issued for the 140 Overends 
and afterwards split, or whether they originally, for some reason 
issued a ticket for ten shares only, is not stated, and is probably 
not material ; but Messrs. Barry & Co. became holders of a ticket 
on which appeared the names of Foster and Co. as issuers of the 
ticket for ten Overends, and as the members of the Stock Exchange 
who were to pay 144?. 7s. Qd. ; and Francis Robert Goss, of 17 
William Street, Camclen Town, Holloway, as the name supplied by 
Foster & Co. as that into which the shares were to be transferred. 
This ticket would bear upon it the names of each member of the 
Stock Exchange through whose hands it passed. Messrs. Barry 
passed this ticket to the defendant Paine, who then passed it on to 
Sandeman and Co. It would, when it came into the hands of 
Sandeman & Co., have the names of Barry & Co. and of Paine on 
it as two of the members of the Stock Exchange through whose 
hands it passed. It is obvious that at the time when this ticket 
was received and handed on in the Stock Exchange, no one of the 
different members, subsequent to Foster & Co., who received and 
handed it on, could in the ordinary course of things know more 

(1) Sec rules 49 and 61, set out Law a reference for payment to a non-rncni- 

Eep. 4 C. P. at p. 53, and Law Eep. 4 ber ; nor shall he be obliged to pay a 

Ex. at p. 214. Rule 62 is as follows : non-member for any securities bought 

" No member shall be obliged to take in the Stock Exchange." 



VOL. VI.] HILARY TERM, XXXIV VICT. 149 

about Goss than that his was a name given in by Foster & Co., 1871 
members of the Stock Exchange ; and it is expressly found that MA X TKI> 
the defendant Paine was entirely ignorant of the manner in which 

J. AINI-, 

the name of Goss was obtained, which I will notice presently. 
Sandeman & Co., having received this ticket, were brought in 
contact with Foster & Co. They had, by their contract with 
Paine, to pay 20Z. as a consideration for getting rid of ten shares 
considered by them a burthen, as in fact they turned out to be, 
and they were made aware by the ticket that Foster and Co. had 
contracted with some member of the Stock Exchange to pay 
144Z. 7s. 6d. for the purchase of an equal number of shares, then 
considered by them, erroneously, to be a beneficial property ; and 
they knew that Foster and Co. put forward the name of Goss as 
the person into whose name the shares were to be transferred. 

Whether Sandeman & Co., before causing their client, the 
plaintiff, to transfer the shares into the name of Goss, ought to 
have made inquiries as to who and what Goss was, and whether 
they are liable to their client for negligence in not doing so, are 
questions on which it is not necessary in this case to decide, but 
which must be thought of when considering what is the effect of 
the contract for the account. In fact Sandeman & Co., acting, I 
believe, in that respect like other brokers, took the matter for 
granted, and supposed the name given by Foster & Co. all right. 
They caused their client to execute a transfer to Goss. They, on 
the 31st of May, 1866, delivered that transfer to Foster & Co., who 
duly paid them the 144/. 17s. Gd., and they credited the defendant 
with that amount. 

It appears by necessary inference, though not expressly stated, 
that there was a satisfactory settlement in account between all the 
various members of the Stock Exchange through whose hands the 
ticket had passed as to the different, and probably very different, 
prices at which they had bought and sold. On the 13th of April, 
1867, more than ten months after the defendant had every reason 
to believe the transaction was satisfactorily ended, the plaintiff, 
for the first time, brought forward facts then recently discovered 
by him. These are stated in paragraph 25 of the case, by which 
it appears, in brief, that Foster & Co.'s client, Sir Samuel Spry, 
being desirous of evading the liability which he had instructed 



150 COUET OF EXCHEQUER. [L. E. 

1871 Foster & Co. to incur on his behalf, had sought out Goss, a person 
MAXTEU who, as James, V.C., in Castellan v. Habson (1) expresses it, on 
account of his vacuity might sing in the presence of a vice- 
chancellor, and paid him 41. 10s. to allow his name to be sent in 
as the transferee. Of course Goss has not paid the subsequent 
calls ; the plaintiff has been forced to do so, and the right of action 
against Goss having been from the first worthless, he sought for 
redress. His first attempt was, on the 13th of April, 1867, to 
apply to the Committee of the Stock Exchange, but they declined 
to interfere, and now he comes to a court of law. 

I think no one can read the above statement without feeling 
that the plaintiff is entitled to relief from somebody. He has 
selected the defendant Paine as the person whom he sues. And 
what we have to determine is whether the defendant is liable. 
The majority of the Court below have held that he is not, and I 
have come to the same conclusion as the majority of this Court,. 
viz., that the judgment should be affirmed ; but for reasons of my 
own, which I think it right to state fully, though the consequence 
is inconvenient length. The question raised by the appeal is, 
whether under the circumstances stated in the case, the defendant 
has so far as regards these ten shares, fulfilled the contract made 
by him. The answer to that question depends on a question cf 
mixed fact and law, namely, what that contract was. 

I think it desirable to consider, in the first instance, what would 
have been the legal effect and consequence of a contract similar to 
that made in the present case if made for cash on the Stock Exchange, 
or made off the Stock Exchange altogether, and then inquire what 
difference is produced by its being made on the Stock Exchange, 
and for the account. Now, I apprehend that a contract made for 
the sale of 100 shares in a specified company, at a particular price 
(if not qualified by any special agreements or customs), would 
require the person who had contracted to sell, or rather to supply 
the shares, to be ready and willing in a reasonable time after 
making the bargain, to give to the buyer the full benefit of the 
ownership of the specified number of shares in the company 
named ; but he would not be required to give him any particular 
shares inasmuch as the contract was not for specified shares. Nor 
(1) Law Eep. 10 Eq. at p. 50. 



VOL. VI.] HILARY TERM, XXXIV VICT. 151 

would he be required to give him shares which stood in his own 1871 
name. It would be a fulfilment of the contract on his part if, as MAXTED 
was the case in the other action between these same parties, 
Maxted v. Paine (first action) (1), he was able to procure a transfer 
of shares standing in the name of a third party, whom he could 
either induce or compel to be at the right time ready and willing 
to transfer the ownership in fulfilment of this contract. And on 
the other hand, the buyer would be bound not only to pay the 
price and to accept the benefits of ownership, but also to relieve 
the seller from all the burthens of ownership. Where the shares 
are not paid up in full, this last object is effectuated when the 
shares are transferred by deed to some one who executes the 
transfer, and that transfer is registered, and consequently, in an 
ordinary case, the contract of the buyer is to procure that the 
transfer shall be executed by a transferee, and that the transfer shall 
be registered so as to relieve the registered owner of the shares 
tendered in fulfilment of the contract from all liability to future 
calls. 

In many companies the articles of association reserve a right to 
the directors to refuse to register a transfer, unless satisfied with 
the transferee, and as (according to the view I take of the matter) 
the buyer selects the name into which the shares are to be trans- 
ferred, he is bound by his contract to select a person with whom 
the directors will be satisfied, as otherwise he does not fulfil his 
obligation to relieve the registered owner from all future liability. 

But I think that (in the absence of some express stipulation, or 
what comes to the same thing, of some custom to that effect incor- 
porated in the contract) there is no obligation on the person who 
has agreed to buy the shares to have the transfer made out in his 
own name, or registered in his own name, and consequently that 
the person who has agreed to sell has not the right to object to 
execute a transfer to a nominee of the buyer, any more than the 
vendor of real estate could object to execute, when required, a 
conveyance, on the ground that it was not a conveyance direct to 
the person with whom he made his contract, or the vendor of goods 
could refuse to deliver them to the order of the purchaser, and 
insist on delivering them to the purchaser himself. He has a right 
(1) Law Rep. 4 Ex. 81. 



152 COUET OF EXCHEQUER [L. E. 

1871 to require his contractor to procure the transfer to be executed by his 

jfc^TED nominee, and to be registered after execution so as to relieve him 

p v - from all future liability, and he has a right to hold his contractor 

personally liable if this is not done, but in my opinion he has no 

right to dictate to the contractor whether he shall do this by taking 

the shares in a nominee's name or in his own. 

This is a position which, I think, has in the present case an im- 
portant bearing on the ground on which my Brother Cleasby gave 
judgment in the court below ; and I understand that the very founda- 
tion of that of my Brother Lush is, that, by the usage of the Stock 
Exchange, the ticket is not valid unless it contains as transferee 
the name of the person who, as principal to the member issuing 
the ticket (in this case Foster & Co.), actually made the contract, 
in this case Sir Samuel Spry. It is right to give my reasons for 
holding this opinion, and I think it the more necessary to do so 
because in Coles v. Bristowe (1), Lord Cairns, in delivering the 
judgment, commenting on an admission that the contract for the 
account made with a jobber did not require the jobber to register 
a transfer in his own name, observes, " This admission goes far in 
our opinion to take the case out of the ordinary class, in which 
there is no intervening jobber (where the vendor can clearly re- 
quire the purchaser to accept and register a transfer in his own 
name) and to fix the position of a jobber as an intermediate or 
third person who undertakes to bring forward a purchaser who will 
take the shares from the vendor." 

Two opinions are indicated in this statement, one that the 
contract of a member of the Stock Exchange, who is a jobber, is 
different from that of a member who is not a jobber ; or, in other 
words, that if Sandeman & Co., in this case had chanced to deal 
with Barry & Co., who were brokers, instead of dealing with Paine, 
who is a jobber, Barry & Co. might be liable, when Paine would 
not, and that Barry's liability to Paine is greater than Paine's to 
Sandeman, a position in which I do not agree. When I come to 
inquire what difference the custom of the Stock Exchange makes 
in a contract for the account, I will state my reasons for this. The 
other opinion is that which is indicated in the parenthesis, that the 
vendor can clearly require a purchaser to accept and register a 
(1) Law Hep. 4 Ch. at p. 10. 



VOL. VI.] HILAKY TEEM, XXXIV VICT. 153 

transfer in bis own name. This was not the point to be decided 1871 
in Coles v. Bristowe (1), but it was of considerable importance as a MAXTED 
link in the chain of reasoning in support of that judgment. And p^- E 
I need not say when I found that Lord Cairns took this for granted 
I was induced to pause ; and though, after a good deal of thought 
and some research, I am convinced that there is an error in this 
position, I express that opinion with reserve till I hear the reasons 
to be assigned in support of it. 

The following authorities and considerations are what occur to 
me in support of my position, that the person contracting to buy 
is bound to procure that the transfer which he has requested to be 
made to his nominee shall be executed and registered by that 
nominee so as completely to relieve the transferor from all future 
liability in respect of the ownership of those shares, or, in default, is 
personally liable for all damage sustained in consequence, though 
he has required the transferor to execute a transfer not into his 
own name. 

This was the ground on which the majority of the Common 
Pleas proceeded in Grissell v. Bristoive (2) ; and Malms, V.C., in 
Coles v. Bristowe (3), both treating the practice of the Stock 
Exchange as no more than machinery by means of which the 
person contracting to buy procured a nominee. The courts of 
appeal, in each of those cases, determined that the practices and 
usages of the Stock Exchange were more than such machinery, 
and made it part of the contract, when the sale was for the account, 
that there should be a novation ; but they did not determine that, 
if the courts below had been right in their view of the effect of the 
usages, the decisions below would have been wrong. And it seems 
to me that they would in that view have been right, both on prin- 
ciple and on authority. In Hunible v. Langston (4), Parke, B., in 
delivering the judgment of the Court, states what was the course if 
a contract for the supply of shares (not subject to any custom) was 
to be precisely followed out. " The plaintiff, after shewing a good 
title to the defendant, would have a right to call upon him to 
complete his purchase in a reasonable time, by preparing a deed 
in the statutory form ; and if the defendant had done so the 

(1) Law Rep. 4 Ch. 3. (3) Law Rep. G Eq. 1-10. 

(2) Law Rep. 3 C. P. 112. (4) 7 M. & W. 517, at p. ">2S. 



154: COUET OF EXCHEQUER [L.E. 

1871 plaintiff might then have executed it and required the defendant 
MAXTED to do the same, and to deliver, or attend with him to deliver, the 
PAINE deed to tne com P an yj tnat a memorial might be entered into and 
indorsed on the deed of transfer, pursuant to the 169th section. 
If all this had been done, the plaintiff would have been no longer 
liable to any call ; if the defendant had refused to perform his part, 
he would have been subjected to an action for the non-performance 
of that which he had omitted to do ; and if, in consequence of the 
defendant's breach of his contract, the plaintiff had been obliged 
to pay future calls, he might have recovered this amount by way 
of special damage for the defendant's breach of contract." 

This, I apprehend, is correct ; but there are two remarks to be 
made, first, that in practice the production of the certificates is suffi- 
cient proof of the title to the shares ; and, second, that the statutory 
form being very well known and very simple, the vendor in prac- 
tice prepares the transfer as soon as he is informed into what name 
the shares are to be transferred ; though in consequence of its being 
the purchaser's duty so to do, the purchaser always pays the cost 
of the transfer, consisting chiefly of the stamps. 

The vendor, in Humble v. Langston (1) had, at the request of his 
purchaser, abstained from requiring him to pursue this strict course, 
and the Court of Exchequer decided that there was no contract at 
law to indemnify him, his only remedy being in equity, as it is 
expressed at p. 530 : " The plaintiff, by his neglect to get the 
conveyance completed and the transfer entered, becomes a trustee 
for the defendant and his assigns, and receives the profits, and 
must pay the outgoings ; but there is no authority for saying that 
the law makes any promise by a cestui que trust to a trustee, 
simply to repay all that the trustee may pay on his own account, 
still less on that of the subsequent cestui que trusts." 

This latter part of the judgment was, however, reversed in the 
Exchequer Chamber, in the case of Walker v. Bartlett (2), where 
Wightman, J., in delivering the judgment of the Court, says; 
"the defendant, however, did not cause the shares to be registered 
in his name ; and the plaintiff was, in consequence of his name 
being continued on the register, obliged to pay some calls ; and the 

(1) 7 M. & W. 517. 
(2) 18 C. B. 845, at p. 861 ; 25 L. J. (C.r.) If 03, at p. 2G5. 



VOL. VL] HILARY TERM, XXXIV YICT. 155 

question before us was, whether the defendant was, under the cir- 1871 
cumstances of the case, bound to cause the shares to be registered MAXTEU 
in his own name, or, if he did not, whether there was an implied PAINE. 
contract of indemnity by him to the plaintiff. With respect to 
the first point, we think that there was no obligation on the 
part of the defendant to cause the shares to be registered in his 
name as owner. The form of the document [i.e., the transfer, 
which in that case was not required to be under seal] in which 
the name of the proposed transferee was in blank, shews that 
it was perfectly understood between the parties to the contract 
that the defendant should not be bound, unless he liked it, to 
register the shares in his own name, but that he might transfer to 
some other person the same right that he had ; and the second 
point then arises, whether if the defendant does not choose to avail 
himself of that power, which for his benefit and convenience is 
made optional with him and not with the plaintiff, there is not an 
implied contract on his part to indemnify the plaintiff against the 
consequence of his (the defendant's) suffering the plaintiff's name 
to be continued on the register, after he has done all that the 
nature of the contract between him and the defendant, and of the 
property which was the subject of it, would require him to do, to 
convey a perfect title to the defendant." 

The Court of Exchequer Chamber decided that there was, and 
that the plaintiff was entitled to recover on the first count, which 
alleged the contract to be, on the plaintiff's part, to execute and 
deliver to the defendant a transfer generally, not a transfer to the 
defendant himself. And it is obvious that to put any other con- 
struction on the contract would be very inconvenient. It would 
prevent the making of a contract for the purpose of applying the 
shares to the fulfilment of an obligation already contracted to 
supply shares to another, as, for instance, to vest them in the 
trustees of a marriage settlement ; and it would render it imprac- 
ticable for two brokers to deal with each other as principals for a 
sale for cash, when, in fact, each was acting for an undisclosed 
principal, and this would be without any corresponding benefit to 
the vendor. For it is obvious that so long as the supplier of the 
shares has the personal liability of his contractor, who is bound to 
see that by the registering of the transfer the burthen of the 

VOL. \\. 3 



( 3 COUKT OF EXCHEQUEK. [L. E. 

ownership is removed from him, it is immaterial to him whether 

lo/ 1 

- that object is to be obtained by registering one name or another. 
If it is done he is free, if it fails he still has the personal liability 
PAINE. ^ ^ original contractor, and in no case could he under the con- 
tract have more. If, indeed, the execution of a transfer to the 
nominee had the effect of relieving the contracting party from 
liability, and obliging the person contracting to supply the shares to 
look to the nominee alone for redress, it would obviously be of 
importance to refuse to execute a transfer to any unknown nominee ; 
but it seems to me clear that the execution of that transfer cannot 
have such an effect. In Cruse v. Paine (1), Giffard, Y.C., after 
pointing out that the contract for the sale, or rather the supply of 
shares, standing by itself, entitled the purchaser to the benefit 
of the property in the shares, and consequently that he would, in 
a court of equity, be considered as owner, and as such bound to 
indemnify the vendor against all calls, proceeds to say : " Surely it 
cannot be said that, if there is a contract between the plaintiff and 
the defendants, which makes them distinctly liable to the plaintiff 
in respect of these shares, and puts them in the same position as 
though they were shareholders instead of him, the mere fact of his 
having executed at their instance a transfer, can alter the liabilities 
of the one or the other ? . I apprehend, in order to alter those 
liabilities, you must aver and you must make out this, that there 
has been another and new and different contract entered into, and 
that the nature of that other new and different contract is, that it 
is to be substituted for the first contract ; that, in point of fact, there 
has been what is termed a ' novatio.' " In this I quite agree. 

In Coles v. Bristowe (2) Lord Cairns asks in the course of the 
argument, " If I agree with the owner of a leasehold house to buy 
or find a buyer for it on the 1st of January, and I do find a buyer, 
who is to indemnify the owner against the covenants ?" 

I speak with diffidence as to a point on conveyancing with which 
I am not familiar, and on which, it not having been argued, I 
have not had the assistance of the bar, but I apprehend that the 
person who made the contract would be bound to indemnify the 
owner, and consequently that the owner might insist on his enter- 
ing into a covenant to that effect. But if the purchaser tendered 
(1) Law Rep. 6 Eq. 641. (2) Law Rep. 4 Ch. G. 



VOL. VI.] HILARY TERM, XXXIV VICT. 157 

for execution a conveyance by which the lease was to be transferred 1371 
to A. B., and the purchaser, by the same deed, covenanted with 

the owner to indemnify the owner of the lease, I cannot think 

J 

that the owner could refuse to execute it, and insist on the pur- 
chaser rendering himself liable to the landlord, for, unless from 
the terms of the lease the landlord had a right to object to an 
assignee, it would be quite immaterial to the owner who A. B. 
was. If the landlord had such a right it would be necessary that 
A. B. should be one whom the landlord would accept. 

Now, if I am right in the view I take of the decision in Walker 
v. Bartlett (1), the seller of the shares has what is equivalent to 
the personal covenant of his purchaser to indemnify him. And 
unless the company, from their constitution, had a right to object 
to a transferee it would be quite immaterial to the vendor of the 
shares who the transferee was, provided he was of full age and 
competent to accept a transfer. I do not mean to express any 
doubt that if the result of the transaction was that the relation of 
trustee and cestui que trust was created between the vendor and 
that transferee, it would be important to the trustee to have a 
solvent cestui que trust ; but that would arise not from the con- 
tract of sale but from the subsequent transaction which created the 
relation of trustee and cestui que trust. Nor do I mean to express 
any doubt that those transactions might be such as to be in effect 
equivalent to a transfer from the owner in his capacity of owner 
to himself in his capacity of trustee, and so fulfil the contract ; but, 
unless such was the case, I think the mere execution of a transfer 
to a nominee would not release the original contractor from his 
liability. There may very well be what Giffard, Y.C., calls a 
" novatio." A familiar instance is that which often takes place 
where there is a change in a firm, one partner retiring and a new 
one coming in. There the customers of the firm, the outgoing 
partner and the incoming partner, often do come to an arrange- 
ment by which the customers agree to discharge the retiring 
partner and accept the new firm as their debtors : see Hart v. 
Alexander. (2) 

The case, as I understand it, of Shaw v. Fisher (3) was one of 

(1) 18 C. B. 815 ; 25 L. J. (C. P.) 263. (2) 2 M. & W. 481. 

(3) 5 De G. M. & G. 596. 

02 3 



158 COURT OF EXCHEQUER [L. R. 

1871 novation. There, Fisher having purchased specific shares sold by 
MAXTED the plaintiff's broker at auction afterwards agreed with Carmichael 
PA*.\E * se ^ ^ m m ' s bargain. The plaintiffs brokers consented to this 
and returned the name of Carmichael to the plaintiff as the 
purchaser ; the price was paid and the shares transferred into the 
name of Carmichael. A year afterwards, when the calls were 
made and Carmichael had failed, the plaintiff, who up to this time 
had never heard of Fisher's name, discovering the facts, filed a bill 
against Fisher for a specific performance. He failed on the ground 
that Carmichael was not a mere nominee of Fisher, and that 
whether the plaintiff had or had not a right to redress against his 
broker for doing what he did, there had been a substituted con- 
tract, that there was what Giffard, V.C., calls a " novatio." And I 
may observe at once that I consider GrisseU v. Bristowe (1) and 
Coles v. Bristowe (2) as deciding that when matters had gone so 
far as they had in those cases, they established a '' novatio ;" and 
I think that the decision in Cruse v. Paine (3) is, in effect, that 
the defendant's guarantee of registration prevented the " novatio." 

There is only one point more necessary to notice before proceed- 
ing to consider the effect of the Stock Exchange customs as to a 
sale for the account. 

At the time when this contract was made, the company, Overend 
and Gurney, Limited, had stopped, their books were closed, and both 
parties were quite aware that after that, registration of a transfer 
was impracticable. As the sale was at 17?. discount, only 15?. 
having been paid up, the purchaser, instead of, as is usual, paying 
money for the benefits of the ownership and accepting the burthens 
as a consequence, was to be paid money for accepting the burthens 
and had the benefits given to him to boot. This shews clearly 
that the main object of the plaintiff was to be relieved from lia- 
bility ; but the contract was in other respects the same as usual, 
except that both sides knew that the register of a transfer, so as to 
relieve the registered owner from primary liability to calls, was 
impracticable, and that the exoneration of the plaintiff from such 
liability must remain in contract. Mr. Manisty, in his argument, 
pointed this out, and relied on it strongly, as shewing that the 

(1) Law Rep. 4 C. P. 3G. (2) Law Rep. -i Ch. 3. 

(3) Law Rep. 4 Ch. 441, on appeal. 



VOL. VI.] HILAKY TERM, XXXIV VICT. 159 

customs of the Stock Exchange, with reference to a sale for the 1871 
-account, were not applicable to such a contract at all. I agree 
with him so far as to think that if the defendant had entered into 
A contract of this kind (without qualification from custom or other- 
wise) he could not have got rid of his liability to indemnify the 
plaintiff against future calls by procuring the registration of the 
transfer to a nominee ; but he might get rid of this continuing 
liability by a "novatio," by procuring a substituted contractor 
willing to engage to be liable in his place, whose liability the 
plaintiff was willing to accept instead of the defendant's, or whose 
.liability he, the defendant, by virtue of his contract with the plain- 
tiff, could compel the plaintiff to accept instead of his, the de- 
fendant's. And consequently I think that in the present case 
the question is, whether the nature of the contract to sell " for 
the account" is such as to shew that, under the circumstances 
.stated in the case, the defendant has done so much as to be in a 
position to say that the plaintiff was either bound, under his 
.contract, to take the liability of a third person as substituted 
contractor for the defendant, or has actually accepted such lia- 
bility whether bound to do so or not, or has so conducted himself 
as to give the defendant a right to preclude him and treat him 
.as if he had accepted such substituted liability. 

Having said thus much I am now brought to what is the great 
question in the cause. What difference does it make that the con- 
tract was on the Stock Exchange for the account ? I have no doubt 
that the plaintiff, now seeking to enforce a contract made on his 
behalf, must take the contract as it really was, incorporating in it all 
the usages relative to such contracts. And the questions, what are 
those usages, and what is their extent, and what do they mean, 
are all questions of fact to be ascertained by evidence. But when 
once they are ascertained the legal effect of the customs upon the 
contract is a question of law. Now, in Grissell v. Bristowe (1), the 
majority of the Court of Common Pleas, deciding on the facts 
agreed on by the parties, and stated in a special case, came to a 
conclusion from which the Court of Exchequer Chamber differed. 
And in the case of Coles v. Bristowe (2) Malins, V.C., acting on 

(1) Law Rep. 3 C. P. 112 ; Ibid. (2) Law Rep. G Eq. 149 ; Ibid. 
4 C. P. 36. 4 Ch. 3. 



160 COUET OF EXCHEQUEE. [L. E. 

1871 the facts alleged and admitted in the bill and answer before him, 
MAXTED and on the evidence produced before him, came to a conclusion 
PAINE ^ rom wn i cn tne Court of Appeal in Chancery differed. Those 
decisions in the Court of Exchequer Chamber and of Appeal are 
the decisions of courts of co-ordinate jurisdiction with this, but no 
doubt proceeding on the facts in those cases. I think it open to 
the parties in any case that may arise to prove that the facts 
stated in those cases as to the customs of the Stock Exchange 
were inaccurate or incomplete ; but no attempt has been made in 
the present case to do so, and I think that we are as much bound 
by the decision of a court of co-ordinate jurisdiction, as to the legal 
effect of the same facts, as we should be by any other decision of 
such a court. I think, therefore, that the question in the present 
case is concluded in this court so far as the decisions in those two 
cases proceed, and consequently that it is to be treated as settled, 
that if the circumstances were the same as in those cases, the 
defendant would be discharged. But the circumstances are not 
precisely the same, and what we have to determine is, whether the 
difference in the circumstances makes any difference in principle ; 
and for that object it is necessary to inquire what the customs and 
usages of the Stock Exchange really are. 

The materials which we have before us are, in the first place, the 
written rules of the Stock Exchange in force at the time when 
this contract was made, viz., in 1866. They have, as I learn, been 
in some respects altered since that time ; I do not know whether 
in any respects material to the questions raised in this case, but I 
mention the fact, because it is well to state distinctly, in case any 
question should arise hereafter on a contract made after the rules 
were altered, that the rights of the parties must, in my opinion, 
depend on the effect of the rules in force at the time that contract 
was made, and not on the effect of the rules in 1870. And besides 
those written rules, we have the evidence as to the practice, and, 
as I may call it, the unwritten comment on those rules from the 
usage of those who in everyday use apply those rules. This also 
may change, but this contract must be understood according to 
what was the accepted understanding amongst those dealing on 
the Stock Exchange in 1866. And I may state at once that, in 
my opinion, the whole difficulty in these cases as to bargains for 



VOL. VI.] HJLAEY TERM, XXXIV VICT. 161 

the account arises from this, that those who framed the rules, and 1871 
those who by putting them in use have established a practice and MAXTED 
understanding which ought to regulate the rights of the parties, 
have mainly had in contemplation the establishment of a clearing- 
house, for which they have provided with admirable skill, and 
they have also provided for other matters of everyday occurrence, 
such as the payment of the price, and the enforcing of the actual 
delivery of the transfers, though not perhaps quite so skilfully. 
But I think that they have not at all had in contemplation the 
subject of the indemnification of the vendor against future calls, 
and the courts are therefore in this, as in many other cases, 
obliged to determine what was the contract depending on the 
intention of the parties with reference to a state of things which, 
when those parties made the contract, was not in their contempla- 
tion, and as to which, therefore, they have not clearly expressed 
any intention, because in truth, not thinking of the matter, they 
had no intention to express. 

In trying to do this, great hardship must often be inflicted on 
one side or the other. The courts of appeal in Grissell v. Bris- 
towe (1), and Coles v. Bristowe (2), were much influenced by the 
consideration that if the usages were so contrived as to fix the 
member of the Stock Exchange who entered into a contract such 
as the defendant has made with a liability to carry out the con- 
tract for all time, and see that the seller of the shares was really 
relieved from future responsibility in respect of the shares, they 
would impose upon all jobbers who had dealt in such shares a 
liability which they never supposed they undertook, making the 
trade of a jobber a very perilous one, and that the effect would be 
to reduce to unexpected bankruptcy a large class of respectable 
men. I believe this would have been the efiect of such a decision. 
I suppose no one will dispute that this would have been a great 
evil, and one to be avoided if possible. But then, on the other 
hand, it is to be remembered that there are two parties to a 
contract, and that if such a construction is put upon the usages as 
to make the contract in favour of the vendor merely illusory, and 
produce the result that a person in the position of the plaintiff, 
who has paid money to the defendant in order to get rid of all 
(1) Law Rep. 4 C. P. 36. (2) Law Rep. 4 Ch. 3. 



162 COUET OF EXCHEQUER [L.B. 

1871 future liability on those shares, has either nothing at all for 

MAXTED his money, or at least only recourse against a person of whom, 

PAUJE at *ke time of the contract, neither he nor his broker had 

ever heard, and who may be without means, I suppose no one 

will dispute that this also is a great evil, and to be avoided if 

possible. 

I will now proceed to state what I understand to be the effect of 
the rules and usages of the Stock Exchange. The great and main 
object of the members of the Stock Exchange in establishing a 
periodical account and making their rules as to name days and 
settling days and tickets seems to me to have been the same as 
that which has led to the establishment of the clearing-house, and 
which I take to be this, that the number of actual transfers and 
payments should be reduced to a minimum, and that all that can 
be done by setting off one contract against another, and settling 
them in account without any actual transfer or payment of cash, 
should be done. And notwithstanding what I cannot help think- 
ing the mistaken objections of the lawyers of the past generation 
against settling matters in account, I think this is a laudable and 
convenient object. 

A member of the Stock Exchange may be a jobber, the nature 
of whose business it is to sell stock or shares just above the market 
value, and to buy just below it, and make his profit of the turn of 
the market. If he could arrange his dealing so that he should 
have to deliver to various buyers shares at a higher price, and 
receive from various sellers the precisely same number of shares 
at a lower price, and could set the one against the other, and 
merely receive the difference of the prices, the convenience to him 
would be obvious. 

I suppose jobbers cannot always bring their contracts so pre- 
cisely to a balance ; and though by taking in for each other in the 
way, described in the recent case of Allen v. Greaves (1) they 
succeed in reducing the quantity, yet sometimes they have a 
balance of shares which they must either actually supply or 
actually receive, as the case may be. 

' A member of the Stock Exchange may also be a broker, who 

has principals, though their names are never disclosed, and the 

(1) Law Rep. 5 Q. B. 478. 



VOL. VI.] HILAKY TEEM, XXXIV VICT. 163 

member of the Stock Exchange makes the contract as principal, 1871 
-and is personally liable as such. If a broker has made only one MAXTED 
contract for one constituent to sell, and has made only one con- p A ^ E 
tract for another to buy, he will require from the person with 
whom he has the one contract to sell that he should actually 
relieve his selling constituent of the shares sold, and he will 
require from the person with whom he has a contract to buy that 
he shall actually supply his buying constituent with the shares 
bought, so that in that simple case there is no room for economy 
in the number of shares actually transferred. But if, as is very 
commonly the case, the broker has a speculative constituent who 
enters into many contracts, some to buy and some to sell, in the 
hope that he may get a profit from the fluctuation of the market, 
or if he, the broker, has carried over some of these transactions to 
the next account, it is obvious that the broker will on the behalf 
of that constituent only wish for the transfer of the balance of such 
shares. 

The interest, therefore, which a broker member of the Stock 
Exchange has in establishing the principle of the clearing-house 
is the same in kind, though not so extensive in degree as that 
which a jobber member has. 

In order, therefore, to effectuate the clearing-house object the 
system of "tickets" has been introduced. The 87th rule (1) 
requires that the " buyer " of shares, &c., shall pass a ticket for the 
same containing the names and address of the buyer in full before 
twelve o'clock on the name day, either in the Stock Exchange or 
at the office of the seller. 

Taking the words of this rule literally without the explanation 
afforded by usage, it would seem that the buyer who was to pass 
the ticket, and the buyer whose name was to appear on the ticket 
were to be the same person, but that construction would totally 
defeat the object of the Stock Exchange. What is meant is 
obviously that the member who has contracted to buy, or rather 
to accept shares from another member, shall pass to him a ticket 
issued by any member of the Stock Exchange (either the passer 
or any other), on which ticket shall appear the name and address 
in full of that person, whose name has been supplied by the issuer 
(1) Set out Law Rep. 4 C. P. at p. 54. 



164 COUKT OF EXCHEQUER [L. B. 

1871 of the ticket as being the name into which the transfer was to be 
made. 



c< The member into whose hands that ticket is passed mav either 

PAINE. r 

hold it himself or pass it on in furtherance of a contract made 

with another member. Thus, when in the present case, Barry & 
Co., in furtherance of their agreement with Paine, passed to him 
the ticket originally issued by Foster & Co., containing on it the 
name and address in full of Goss, Barry & Co. complied with the 
87th rule, by as buyers from Paine passing to him, who was their 
seller, a ticket issued by Foster & Co., containing the name and 
address in full of Goss as the person into whose name the shares 
were to be transferred. 

It is the opinion of my Brother Cleasby in the Court below, and 
of my Brother Lush in this Court, that Foster & Co. had not 
originally complied with the rule when they issued the ticket, 
because they ought, instead of inserting the name of Goss, to have 
inserted that of Spry. In this I do not agree ; but even if it was 
so, none of the other members of the Stock Exchange through 
whose hands the ticket passed, either knew or could know any- 
thing about this. At all events, Barry & Co. passed to Paine what 
purported to be a ticket such as is meant by the rule. Of course, 
in putting this construction on the rule, I proceed on the ground 
that I think that the members of the Stock Exchange have used 
the word " buyer" in one sense in the first line of the 87th rule, and 
in another in the third line of the rule, and consequently that I 
think I find the mercantile community are not more careful in the 
use of language than we often find those to be who frame Acts of 
Parliament. 

Paine, when he passed this ticket to Sandeman & Co., also 
complied with the rule. It is obvious that in carrying out this 
arrangement it may happen that a member becomes possessed of 
a ticket for A and B and C shares when he is under contract to buy 
from one member A shares, from another B shares, and wishes 
himself actually to deliver C shares, and consequently wishes 
to pass to his two sellers two separate tickets for A shares and 
B shares respectively ; and himself to continue holder of a ticket 
for C shares. To meet this case a power of dividing or split- 



VOL. VI.] HILARY TERM, XXXIV VICT. 105 

ting the ticket is given, which is mentioned in the 87th and 91st 1871 
rules. (1) "Ml^EtT 

No question arises on that power in this case, and it is only P A ^E 
material as shewing the main object of the rules, and how skilfully 
they have been devised for effectuating that object. 

It is obvious that if this course is followed out, a member of the 
Stock Exchange (whether broker or jobber) who is desirous of 
taking actual delivery of any number of shares which he has 
agreed to buy, is, on the name day, to issue to his seller a ticket 
containing his (the issuing member's) name, and specifying the 
sum which he (the issuing member) is to pay for those shares on 
delivery of them, and stating in full the name and address of the 
person into whose name he (the issuing member) desires those 
shares to be transferred; and that a member of the Stock Ex- 
change who has sold shares which he desires actually to transfer 
must, at the end of the name day, be holder of a ticket either in its 
entirety as originally issued by a member of the Stock Exchange, 
or split in the manner above specified. There may be a great 
many intervening members between the two. The ticket which 
the member A. holds at the end of the name day, bearing on it 
the name of the member Z. as the original issuer, and which con- 
tains the name and address of either a member or a non-member 
as the person into whose napie Z. intends the shares to be trans- 
ferred, may have passed through the hands of as many members as 
might be designated by all the intervening letters of the alphabet, 
and may have been split a dozen times ; and the issuing member 
may have been a jobber or a broker, and the intervening members 
may have been brokers or jobbers, or both, and the holding member 
may be either a broker or a jobber. Still the result will be that 
the holder of that ticket is brought in contact with the issuer 
of it, and both must necessarily be members of the Stock Ex- 
change. 

I need not dwell on the provisions in the rules framed for the 
purpose of securing that such tickets shall be passed on the name 
day ; they are a little complicated, but seem to me quite sufficient 
for their purpose, and in this case they were effectual. Snndeman 

(1 ) Set out Lfhv Rep. 4 C. P. at pp. 54, 55. 



166 COUET OF EXCHEQUER. [L. E. 

1871 & Co., as holders of the ticket, were brought into communication 

MAXTED with Foster & Co. as issuers of that ticket, and they mutually 

PAINE dealt with each other as such. I incline to think that in such a 

case the law would imply (or, if not, a jury might, and I would, 

without hesitation, find as a fact) that there was a contract between 

the holder and the issuer of the ticket to perform the reciprocal 

duties which they owe to each other as such. 

This contract, in the language of a pleader before the Common 
Law Procedure Act, would have been thus expressed : " In con- 
sideration that the holders of the ticket (that is, in this case, 
Sandeman & Co.), at the request of the issuers (that is, Foster & 
Co.), promised to treat them as the issuers and perform to them all 
things which the holder ought to perform to the issuer, they 
(Foster & Co.) then promised Sandemau to perform to them all 
things which the issuer ought to perform to the holder." 

If the parties entering into this contract were agents (as Sande- 
man & Co. were for Maxted, and Foster & Co. were for Spry), I 
apprehend their principals, though undisclosed and unknown, would 
be parties to the contract, and would be subject to the same liability 
as their agents, and entitled to have the same benefit of the 
contract. 

The contract would be implied very much on the same principle 
as that on which the assignee of a bill of lading receiving the goods 
is held to contract with the shipowner to pay him the freight 
originally due from the assignor of that bill of lading. 

And the convenience of it in the present case may be made clear 
by supposing A. to hold a ticket issued by Z., which had passed 
through the hands of members whom we may designate by the 
other letters of the alphabet, and that Z., without any valid reason, 
refused to pay. If there is no privity between A. and Z., it will be 
necessary, in order to enforce the performance of Z.'s duty, for A. 
to sue B., B. to sue C., and so on, till ultimately Y. will sue Z., 
who will thus, at the expense of twenty-five lawsuits, be compelled 
to perform his duty by a process very troublesome and costly, 
whilst if there is privity between A. and Z., it may be enforced by 
a direct suit between those parties. And this imposes no hardship 
upon the issuer of the ticket, as it only places him in the same 
position relatively to the holder of it in which he would have 



VOL. VI.] HILARY TERM, XXXIV VICT. 167 

stood towards his first vendor if that vendor had never passed 1871 
away the ticket, but had himself delivered the shares direct. MAXTED 

The reasoning of Christian, L.J., in Sheppard v. Murphy (1), 
seems to me to proceed entirely on this principle. There Lowndes 
& Co. were the brokers who issued the tickets, on which they 
placed the name of Murphy as transferee, and Murphy was their 
principal. They passed that ticket to Kennedy, a jobber, and 
from him it was passed to Sheppard, who was the ultimate holder 
of the ticket. Sheppard (who stood in the situation which Sande- 
man & Co. hold in the present case) instituted the suit against 
Murphy. The Court below had decided that there was no privity 
between Sheppard and Murphy. The Court of Appeal reversed 
this. The reasoning of Christian, L.J., as I understand it, is that 
privity of contract was established between Lowndes & Co., as the 
issuers of the ticket, and Sheppard as the holder of the ticket, and 
that consequently there was privity between Murphy and Sheppard, 
not because Murphy's name was given in, but because Murphy was 
the principal of Lowndes. 

The case of Lord Torrington v. Loice (2), at first view, seems in 
conflict with this. There Lowe stood in the same relation to Lord 
Torrington as in the present case Spry does to Maxted. And the 
Court of Common Pleas, assuming that the original buyer from 
Lord Torrington's broker was liable to him, which, according to 
Grissell v. Bristowe (3), then not reversed, was the law, held that 
there was no privity between him and any one other than that 
created by the execution of the deed of transfer to which Lowe 
was no party. It is not necessary to overrule this decision, as it is 
not directly in question ; but it has a material bearing on the rest 
of my argument. I think it right to say I do not think it was 
right, though the fault may have been in the way the case was 
stated. For though no doubt in fact the course of business was 
the same as that described in the present case, and Lowndes' 
brokers, Spencer and Norton, had issued a ticket, of which Lord 
Torrington's brokers, Lawrence & Pearcc, had become the holders, 
and though the statements in par. 5 of the special case in Tor- 
rington v. Lowe (2) may perhaps now be so understood, yet it is 

(1) 2 Ir. Eep. Eq. 544. (2) Law Hep. 4 C. P. 20. 

(3) Law Rep. 3 C. P. 112. 



168 COUET OF EXCHEQUER [L. K. 

1871 plain that neither the Court of Common Pleas, nor the counsel 
MATTED vvno argued the case, so understood the statements. The question 
p v ' whether there was any implied contract between the issuer and 
the holder of the ticket on which would depend the question 
whether Lowe was liable at law to Lord Torrington was not pre- 
sented to them. And though I am bound in candour to admit 
that there are expressions which lead me to believe that if it had 
been the decision would have been the same, yet I have much less 
scruple about even in the Court of Exchequer Chamber ex- 
pressing my dissent from that decision than if the point had been 
considered. 

The recent case of Castellan v. Hobson (1) decides that in equity 
Lord Torrington might have made Lowe liable, and it seems to me 
that there is no reason why the liability should be different in law 
and in equity. But even assuming that I am right in thinking 
that there is privity between them and a contract to perform their 
reciprocal duties, there still remains an important question, viz., 
what are their reciprocal duties ? The general effect of the usage 
is, I think, that which is expressed by Cockburn, C.J., in Grissell 
v. Bristowe (2) : " In the end the transaction becomes one which 
is to be carried out between the last vendee " (i.e., the issuer of the 
ticket) " and the original seller, as though such vendee had pur- 
chased immediately of such seller." This would, I think, be 
precisely accurate if it were not that the prices vary, and that the 
different members through whose hands the ticket has passed are 
liable to pay and entitled to receive different sums. In the pre- 
sent case it appears that Foster & Co.'s immediate vendor was 
entitled to receive 14Z. 10s. per share, and Paine's immediate 
vendor, the now plaintiff, instead of receiving anything, was to pay 
21. per share for getting rid of the shares. It might have been the 
other way, and that the issuer of the ticket was to receive money 
for taking the shares, and the holder to be paid for parting with 
them. Such violent fluctuations in the price are, I suppose, rare, 
but in all cases there are fluctuations in price during the account, 
and the sums to be paid and received by the different members 
through whose hands the ticket has passed are not the same. 

(1) Law Rep. 9 Eq. 47. (2) Law Rep. 4 C. P. at p. 43. 



VOL. VI.] HILARY TERM, XXXIV VICT. 169 

The 62nd rule (1) shews that the members are personally liable 1871 
to each other for those payments, and that the Stock Exchange MAXTED 
wished (though it was beyond their competence to do so) to pre- 
vent their being liable to any non-members who were [ principals. 
The purchaser has a right, before he parts with his money, to have 
the shares transferred, and the vendor has a right, before he parts 
with the shares, to have his money paid. Those two, on the general 
principles of the law of contract, would be contemporaneous acts, 
and the vendor would, in the absence of any agreement to the con- 
trary, have a reasonable time for preparing the transfer after he 
was made aware of the name of the person to whom the shares are 
to be transferred. I think the effect of the 98th rule (2) is to sub- 
stitute ten days for that uncertain reasonable time. The 80th rule 
seems to indicate a practice by which the members are entitled to 
receive at once, from those to whom they have sold, the differences 
in price beyond that marked on the ticket before the transfer is 
delivered, subject to some qualifications not now material. The 
79th rule is material. It runs thus : " A member having sold 
stock or other securities, and transferred or delivered the same 
according to the tickets or directions given him by the buyer, has 
a right to demand payment from such buyer, and in case the seller 
apply to the member whose name is on the ticket, and is either 
refused payment or receives a cheque which is dishonoured, the 
buyer shall make immediate payment." This, as it seems to me, 
indicates that though for convenience the payment up to the amount 
stated on the ticket is to be made by the member who issues it and 
is expressed on it to be the member who pays, yet the original con- 
tractor with the holder of the ticket is still liable, and consequently 
that there can be no novation until all the payments are actually 
made or settled in account, and so it is expressly held in Coles v. 
Bristowe. (3) 

The rule just cited is made for the purpose of securing pay- 
ment where the shares have been delivered according to the 
directions of the ticket. The 96th rule (2) by the first part of it 
provides for something which (perhaps from want of sufficient 
information as to the mode in which payments are settled), I do 

(1) Ante, p. 148. (2) Set out Law Rep. 4 C. P. 5G. 

(3) Law Rep. 4_Ch. at p. 12. 



170 COUET OF EXCHEQUER. [L. E. 

1871 not quite understand. The latter part is thus expressed : " and if 
MAXTED the stock or shares be not delivered within fifteen clear days the 
PAINE issuer of the ticket shall alone remain responsible." This seems to 
me clearly to indicate, first, that the issuer of the ticket (Foster 
& Co.) is, according to the understanding of the Stock Exchange, 
responsible where the transfers are not taken and paid for ; and 
second, that after the lapse of fifteen days without complaint other 
members whose names are on the tickets are to be free from respon- 
sibility. The 99th rule (1), which is framed for the purpose of 
enforcing delivery of the shares, in like manner provides that 
the lapse of fifteen days without any attempt to buy in shares shall 
release the seller (by which I understand in this rule the member 
immediately contracting with the member who has not bought 
in) from all loss caused by the failure of any member through 
whose default the shares were not delivered. 

This shews that the liability of the seller to deliver continues 
after the delivery of the ticket, and that there is no "novatio" 
merely from the passing of the ticket. And this also is expressly 
held in Coles v. Bristowe. (2) 

Taking these rules together it seems clear that the object of the 
framers was, that the transfer should be made into the name sup- 
plied by the issuer of the ticket, that the transfers thus executed 
should be handed to the issuer of the ticket, and that the prices 
should be paid, and that each member should be responsible for 
the performance of his own part, and that as far as possible they 
should have nothing to do with outsiders. 

I cannot in those rules or in the statement of usage discover any 
trace of a difference as to the liability of a broker member, and that 
of a jobber member. On the contrary, it seems that their con- 
tracts and their duties towards those with whom they contract are 
identical, though the motives inducing them to enter into the 
contracts may be different. 

This is the reason for my dissent from what seems implied by the 
words of Lord Cairns, in Coles v. Bristowe (2), which I have before 
quoted. Up to the time when the 'payments are settled there is 
great difficulty in seeing how there could be any "novatio" 
between the holder and issuer of tickets, because the prices which 

(1) Set out Law Eep. 4 C. P. at p. 5G. (2) Law Eep. 4 Ch. at p. 12. 



VOL. VI.] HILARY TERM, XXXIV VICT. 171 

they are to pay and receive are different. And in Hawkins 1871 
v. Mattby (1) the plaintiff ultimately failed, because he did not MAXTED 
perceive the materiality of this, and did not shape his bill accor- 
dingly. And up to the time of the transfers and certificates being 
handed over to the issuer of the ticket, there is no obligation on 
him to pay the price, and the terms of the 99th rule above referred 
to shew that in case of default in the delivery of the shares, the 
seller is not discharged from liability to his buyer, and consequently 
there can be no " novatio " till then. But the rule also plainly 
indicates a very business-like and sensible desire to have every- 
thing settled promptly, and to provide as far as possible that after 
the lapse of fifteen days from the date of the ticket without com- 
plaint, every member who is not himself guilty of personal default 
shall be free from responsibility. And it seems to me that the 
system of the Stock Exchange could not possibly work unless this 
was so. The holder of the ticket who is to deliver the shares, and 
the issuer of the ticket who is to take them, may without any 
impropriety, as between themselves, agree to postpone the actual 
completion of the transfer, and continue it (as it is called) to the 
next account, or they may exonerate each other, one of them 
accepting a sum of money from the other for so doing. The 
intermediate parties to the ticket have no interest in hinder- 
ing them from pursuing either of those courses, provided it does 
not keep alive their liability, and they have no means of know- 
ing whether the transaction has been ^completed by actual transfer 
and registration of the shares, or postponed by carrying over 
the contract, or finally put an end to by an exoneration. The 
principle is stated in Freeman v. Cooke (2) that "conduct by 
negligence or omission where there is a duty cast upon a person 
by usage of trade or ctherwise to disclose the truth, may often 
have the effect of precluding" the party failing to make the dis- 
closure from afterwards relying on it. And I am much inclined 
to think that on this principle an omission on the part of the 
member holding the ticket, to disclose in due time to the inter- 
mediate parties on that ticket, that there had been a failure in the 
performance of the duty of the issuer of the ticket, would preclude 

(1) Law Rep. 3 Ch. 18$. (2) 2 Fx. 663. 

VOL. VI. P 



172 COUKT OF EXCHEQUER [L. E. 

1871 the holder (and of course his principal, if he has one) from setting 
MAXTED up that failure as against those intermediate parties. If I am right 

T , * in the construction I put upon the 96th and 99th rules, the Stock 
PAINE. i L 

Exchange have declared fifteen days to be the extreme time within 
which the member is to declare any failure on the part of the 
issuer of the ticket to accept and pay for the shares, or on the part 
of the holder of the ticket to deliver them, and have expressly 
provided that a failure so to do shall have the effect of preventing 
them from coming on the intermediate parties for those defaults. 
When, however, transfers have been actually executed to the 
person who is named by the issuer of the ticket, and those transfers 
have been handed over to the broker who issued that ticket, the 
seller has done everything on his part to be performed, and when 
the price has been paid everything on the part of the buyer has 
been performed, except the protecting the transferor from liability 
for any future burthen arising from the ownership of the shares, 
which has now become ascertained and specific. Where the shares 
are paid up in full this is of no consequence at all, and where the 
shares are of a real value, bearing any considerable proportion to 
the unpaid calls, it is of little importance. In such cases as the 
present this protection from future liability is of the utmost im- 
portance. But all legislation proceeds on the principle of pro- 
viding for the ordinary course of things : In ea quee frequentius 
accidunt, praeveniunt jura. And the Stock Exchange in framing 
their rules have made provisions for the ordinary cases, and have 
omitted to provide for this exceptional case. 

Where the registration is practicable, as in the case of a solvent 
company, the breach of contract in failing to have the shares 
registered must in general take place within the fifteen days, and 
I see no difficulty in supplying the omission in the rules to pro- 
vide for that case. The party who neglects within fifteen days to 
inform the intermediate parties on the ticket of a breach already 
occurred, should be held concluded from relying against them on 
such a breach. But where the company is being wound up, the 
registration, though not impossible, is impracticable, and the 
failure to indemnify the shareholder against future liability does 
not in general occur till long afterwards, and if the point was not 
already decided, I should feel a difficulty about this. But Coles 



VOL. VI.] HILARY TERM, XXXIV VICT. 173 

v. Bristowe (1), and Grissell v. Bristowe (2), seem to me to deter- is?i 
mine that, when the transfers have been delivered to the issuing MAXTKD 
member and the price is fully paid, there is a novation which 
frees the member who merely passed the ticket from further 
liability. And Coles v. Bristowe (1) further determines that this 
novation does not arise from the voluntary act of the seller in 
accepting the substituted liability of a third party in accord and 
satisfaction of the contract. Coles had in that case taken alarm, 
and given his broker instructions to complete the transaction with 
Bristowe direct, and not to recognize any sub-purchasers except 
as nominees of Bristowe. The evidence as to this will be found 
at p. 151 of Coles v. Bristowe, in Law Rep. 6 Eq. At p. 14 of 
the report of the case on appeal, in Law Kep. 4 Ch., Lord Cairns 
deals with this as an ineffectual attempt to vary a contract already 
made. 

The case therefore decides that it is part of the contract for 
a sale for the account, that where the price has been paid and the 
transfers executed to the nominees of the member who issues the 
ticket, and the transfers have been delivered to the member who 
issues the ticket, the member passing the ticket is free from 
further responsibility. That decision, and the decision of the 
Exchequer Chamber of GrisseU v. Bristowe (2), conclude the 
question so far, except in the House of Lords. 

We, sitting in a Court of co-ordinate jurisdiction, must hold 
that there is a " novatio," and it only remains open to consider 
what that " novatio " is, and subject to what conditions. 

It will be seen from what I have written that, in my opinion, 
the effect of the usage is that the member issuing the ticket is 
much in the position of one who has issued to his immediate con- 
tractor a promissory note, promising to perform to the assign of 
that promissory note those duties which he would otherwise have 
had to perform to that immediate contractor. 

If there were no custom, the person contracting to take shares 
would promise to accept from his vendor a transfer, and to indem- 
nify against future calls. The contract on the Stock Exchange 
for the account is to supply him on the name day with a ticket 
which he may either hold or pass on. Each member through 
(1) Law Rep. 4 Cli. 3. (2) L;uv Hq\ 4 C. T. .",(1. 



COURT OF EXCHEQUER. [L. E. 

1871 whose hands the ticket passes is in a position analogous to the 

MAXTED indorsee of that note, and the ultimate assignee, who is actually 

v - to deliver the shares, is in a position analogous to the holder of 

Tp TW"|J 

that note, and I think that the effect of the custom is, that unless 
what resembles notice of the dishonour of this note is given within 
fifteen days, the intermediate indorsers of the ticket are released, 
and then, and not till then, there is a novatio in my opinion 
between the two members of the Stock Exchange, who are in the 
position of holder of that ticket and issuer of it. The Stock 
Exchange could only regulate the proceedings of their members, 
but if either or both of those members were agents for others, the 
law says that the principals, though undisclosed, may sue and are 
liable to be sued to the same extent as their agents, and no more. 
And there is no hardship on either party in a practice thus 
understood. 

The issuing member and his principal have no additional 
burthen or obligation thrown on them, the only difference is that 
they are liable for the fulfilment of the same duties to another 
person. The principal who instructed his broker to sell, authorized 
him to contract with any member of the Stock Exchange, and 
after the fifteen days have elapsed, he has the same rights against 
the issuer of the ticket, who must necessarily be a member, that 
he would have had against him if the contract had been in the 
first instance made with that member. And the convenience and 
security given to those who pass the tickets, by a custom which 
secures that the full extent of their liabilities on each account 
shall be finally ascertained within fifteen days, is obvious aud 
great. 

This is the conclusion I come to, which leads me to affirm the 
judgment below, on the ground that the defendant Paine has com- 
pletely fulfilled his contract by delivering on the name day a 
ticket really issued by a member of the Stock Exchange, and that 
he is not responsible for any mistake or misconduct on the part of 
the issuer of that ticket unless he is applied to within the fifteen 
days ; but it is right to point out that there is authority opposed 
to my view, and in support of that of Cleasby, B., in the court 
below, and Lush, J., in this court. In Coles v. Bristowe (1), the 
(1) Law Rep. 4 Ch. 3. 



VOL. VI.] HILARY TERM, XXXIV VICT. 175 

judgment indicates that it was the opinion of the Court that the 1871 
novation was not with the member of the Stock Exchange who 
issued the ticket, but with the nominee whose name is given by 
him upon that ticket. And being struck by the obviously illusory 
character of a contract which would compel the seller of shares to 
accept the substituted liability of any one, the Court intimated an 
opinion that it must be a nominee to whom no reasonable objec- 
tion could be made, and the language of the judgment of the 
Exchequer Chamber in Grissell v. Bristowe (1), though not quite 
so explicit, indicates a similar opinion. 

These opinions are entitled to great respect, and are weighty 
authorities ; but being no necessary part of the judgment in those 
cases, they are not binding on us. And it is now necessary to 
inquire whether they were well founded. For the Court of Ex- 
chequer, in the first action of Haxted v. Paine (2), had a case in 
which the facts appear from the report to be that one North, a 
member of the Stock Exchange, issued a ticket containing the 
name of Maxwell as the person into whose name the shares were 
to be transferred, and passed it to Witton, who passed it to Paine, 
who passed it to the broker of the plaintiff. In fact, though it 
was not known to any of the intermediate parties who passed the 
ticket, North had mistaken the extent of his authority from 
Maxwell who was in consequence not bound by North's contract. 
It was much more than fifteen days after the contract before any 
application was made to Paine, and, according to the view I have 
taken of the custom, Paine ought to have been held no longer 
liable, the plaintiff's recourse being against North, the issuer of 
the ticket ; but the Court of Exchequer, following the opinion in- 
dicated in Coles v. Bristowe (3), thought that the only novation 
was with the nominee, and that Maxwell not being bound, there 
was therefore no novation at all. If I were now sitting in a court 
of co-ordinate jurisdiction, I should be bound by this decision ; 
sitting in a Court of Error I am bound to review it, if necessary ; 
and I think it is necessary. For my Brother Cleasby in this case, 
in the court below, has followed up this a step further, and holds 
that the issuer of the ticket is bound to put on it an " ultimate pur- 

(1) Law Bep. 4 C. P. 112. (2) Law Rep. 4 Ex. 81. 

(3) Law Rep. 4 Cl). 3. 



176 COUET OF EXCHEQUER. [L. K. 

1871 chaser," and that, therefore, the issuer of the ticket in the present 

" MAXTED case did wron g m issuing a ticket containing the name of such a 

* person as Goss. And I quite agree that, so far as relates to the 

conduct of Sir S. Spry, this is correct, though seeing that it is 

found as a fact that Foster & Co., the actual issuers of the ticket, 

were wholly ignorant of the matters which made this wrong, I do 

not see that they were guilty of moral wrong. 

But he proceeds to draw the conclusion that the usage required 
the defendant, Paine, not merely to pass a ticket really issued by 
a member of the Stock Exchange, and containing the name reall y 
supplied by that member, but a ticket containing a proper name 
supplied by that member, and that the members who, without either 
knowing or having the means of knowing the state of things, pass 
a ticket which has, in fact, not been properly framed, are all liable 
if the ticket was so issued as to be, as he strongly phrases it, " a 
document which is fabricated for the purposes of imposition." I 
should have great difficulty in answering this reasoning if I 
thought the first case of Maxted v. Paine (first action) (1) rightly 
decided. 

And my Brother Lush, if I understand his judgment, holds 
that at least the issuer of the ticket ought to have put the name 
of his real principal, Sir S. Spry, upon the ticket, and that, 
not having done so, the intermediate parties, who without either 
knowing or having the means of knowing who the real principal 
of the issuers of the ticket was, passed a ticket not containing his 
name are responsible. 

I will now proceed to state my reasons for dissenting from these 
opinions. 

I have, in the earlier part of this judgment, given my reasons 
for thinking that it is no part of the contract of a purchaser of 
shares to give in either his own name or the name of his real 
principal as that into which he requires the shares to be trans- 
ferred ; that he does contract to accept a transfer into the name 
which he furnishes, whatever it may be, and to indemnify the 
vendor against all calls after the transfer is executed and delivered 
to him. And, also, that the vendor has no right to object to 
execute a transfer to any one named by the purchaser, and does 
(1) Law Hep. 4 fix. 81. 



VOL. VI.] HILARY TERM, XXXIV VICT. 177 

not by executing the transfer release his purchaser from the obli- 1871 
gation to indemnify him. This is contrary to what is assumed in MAXTED 
Coles v. Bristowe (1) to be the law. I have, therefore, not come to 
this conclusion without much thought. Having come to it, I have 
given my reasons at length, and now I proceed on the supposition 
that the effect of the contract, when not qualified by custom, is as 
I have first stated. 

If I am right, the purchaser for the account can be under no 
obligation to furnish any particular name, nor can the seller for 
the account have any right to object to any name unless the 
custom is such as to cast the duty on the purchaser and give the 
right to the vendor. Nothing of the sort appears in the printed 
rules. The 13th paragraph of the case (2) is supposed to contain 
a statement that there is such a custom. I do not think it does. 
The committee of the Stock Exchange exercise a power over the 
members very analogous to that which the courts of law sum- 
marily exercise over the attorneys who are the officers of their 
courts. And it seems agreed on all hands that they would exercise 
this power where a member was guilty of fraud or want of good 
faith. And the paragraph shews that the members, when these 
questions arose, began to discuss among themselves whether the 
committee would or would not intervene if the holder of the 
ticket complained in due time that an improper name was on the 
ticket; and they have differed in opinion as to what the com- 
mittee would do in such a case. 

It does not appear that the committee ever have done or even 
been asked to do anything except in this particular case, in which 
they declined to interfere. Exercising therefore the power given 
me by the case, I draw the inference of fact that no custom to 
this effect is proved to exist. 

But I go further, for I think there are many strong reasons 
for thinking that no such custom does or can exist. For, as it 
seems to me, it would render the carrying on of business on the 
Stock Exchange impracticable. If the effect of executing the 
transfer to the person whose name is given on the ticket was to 
substitute the liability of the nominee, not merely for that of 
those members who have passed that ticket, but also for that of 
(1) Law Rep. 4 Ch. 3. (2) Law Hq.. 4 Ex. at p. '2W. 



178 COUET OF EXCHEQUER. [L. E. 

1871 the member who has issued the ticket and himself placed the 

MAXTED name upon it, it would seem but reasonable that the transferor 

v - should have a right to object to execute any transfer until he was 

affirmatively satisfied that the name to him unknown was that of 

a person whom he might safely trust to that extent. 

No one of the intermediate parties who passed would have any 
means of satisfying him of this, and even the member who issued 
the ticket might often be in the same position. 

It is, I believe, very common for London brokers to have orders 
sent them from the country through some country banker or local 
broker or other agent. Those they accept on the credit of the 
person giving them the order, without either knowing or caring 
who the ultimate principal is. This is illustrated by the facts in 
Sheppard v. Murphy. (1) There the London broker took the order 
from a Dublin broker, who again took it from a brother of the 
defendant, professing to have authority from the defendant. But 
the defendant denied that he had given his broker such authority, 
and though the ultimate judgment was that the defendant had 
given the authority, it was not proved without much difficulty. 

It is obvious that in such a case as that, no one of the members 
of the London Stock Exchange who were concerned in the trans- 
action, could have supplied satisfactory evidence that Murphy was 
the real principal, though in fact he was. 

There is no evidence whatever that the issuer or passer of the 
ticket is ever in practice required to furnish such evidence, and it 
seems that any custom which gave the transferor a right as part 
of his contract to require it, would in the case of a rising market 
give facilities to an unwilling vendor to avoid fulfilling his contract, 
and would therefore be so inconvenient that it would require 
strong evidence to make me believe that it existed. 

But it is said that there is no right to require any one to prove 
affirmatively that the name proposed is a good one ; that the burthen 
is upon the persons who take that ticket, that they are to make in- 
quiries, and that unless they can prove affirmatively that there is 
some " reasonable objection " to accepting the liability of the person 
whose name is given in, they are bound to do so. I do not under- 
stand what is meant by a "reasonable objection." In Coles v. 
(1) 2 Ir. Rep. Eq. 544. 



VOL. VI.] HILARY TERM, XXXIV VICT. 179 

Bristoive (1), the persons whose names were given in all refused ISTI 
to pay the calls, which they had clearly contracted with some MAXTEU 
one to pay ; and they did this for no apparent reason, but that 
they thought they could not be forced to do so. That was 
strong evidence that they were either insolvent and unable to 
pay, or dishonest repudiators of a just claim. Yet it was taken 
on an admission as a fact that no reasonable objection in fact 
existed to taking the substituted liability of persons, who it seems 
to me must have been in either one or other of those categories. 
The extreme vagueness of the supposed custom seems to me a 
strong ground for thinking that no such custom can in practice 
exist. 

Passing by this, if the custom does exist, the broker must bo 
bound to his customer to make the inquiries, and be liable to 
him for negligence if he does not. Now the general law would 
give the party, who was to get the transfer executed by the person 
in whose name the shares stand, a reasonable time for that 
purpose. And the rules of the Stock Exchange, as I have before 
pointed out, seem to me to fix that reasonable time at ten days. 
During those ten days, though they are not given for that purpose, 
the selling broker might make inquiries, but if he deals on a large 
scale, and has many contracts for the same account, it would, I 
think, be almost impracticable for him to make inquiries as to 
them all. This makes me think it highly improbable that the 
usage should be such as to cast upon the broker a duty which he 
could not practically perform. It appears from the report in 
Coles v. Bristowe (2), that in that case evidence was given that the 
brokers did not in practice inquire as to the solvency or responsi- 
bility of the transferees. 

But whatever may be the force of these observations as regards 
the member who ultimately holds the ticket, it is much stronger 
in favour of those who pass it. 

It is to be remembered that the obligation cast by the rules of 
the Stock Exchange on the member purchasing from another is 
not, as is inaccurately stated in the body of the case, simply to 
supply a name on the name day. It is between the hours of 
twelve and two on that name day to pass a ticket issued either by the 
(1) Law Rep. 4 Cb. 3. (2) Law Rep. G Eq. 152. 

VOL. VI. Q 3 



180 COUKT OF EXCHEQUER [L.R. 

1871 member himself, or issued by some other member, and duly passed 

JJ AXTED to him, and on that ticket appears the name furnished by the 

,, v - member who issued the ticket. On a busy account day the 

A AINE. 

number of tickets passing through a member's hands must be very 
numerous; they must pass through many hands, and the -whole 
transactions are to be completed within two hours. The ticket in 
practice must be passed on so rapidly that there can be scarcely 
time enough to make a memorandum of the fact that such a 
ticket has been passed to him by one member, and from him to 
another. It is obviously impossible that the passing member 
should stop the whole course of business by making inquiries as to 
who the person is whose name has been put upon that ticket. 

And I cannot think that a custom exists, which would compel 
the passing member to take and pass on a ticket issued by another 
member, and containing a name inserted on the ticket by that 
member, without inquiring or having the opportunity of inquiring 
under what circumstances that name was inserted, and yet make 
him liable, if at any future time it should appear that either owing 
to the mistake or misconduct of the issuing member a name was 
placed on that ticket, which ought not to have been so placed. 

The whole machinery of the Stock Exchange is based on this, 
that the members deal with each other, and are liable to each 
other as principals. 

It seems to me that the ultimate novation by the custom must 
be between the members, and that when it takes place it puts the 
member issuing the ticket under an obligation to fulfil exactly 
that duty which before that novation he would have had to fulfil to 
the member with whom he had originally contracted. 

That novation, therefore, cannot take place till after all the dif- 
ferences in prices have been settled for up to that time ; the obli- 
gation on the holding member, who is not to part with his shares 
till paid the sum for which he has contracted to sell, is not pre- 
cisely correlative with that of the issuing member, who is only 
bound to pay the sum for which he has contracted to buy, which 
may be smaller. That must be done within ten days ; but the 
custom seems to me to give five days further, as of grace, during 
which the novation is suspended. It is not necessary for the 
decision of this case to determine whether the novation in this case 



VOL. VI.] HILARY TERM, XXXIV VICT. 181 

was with Goss, the nominee, with whom the transfer was executed, 1871 
or with Foster & Co., who issued the ticket, and with Sir 8. Spry as MAXTED 
their principal, though it is so essential a part of the reasoning on p v \ 
which my judgment is based, that I have thought it right to 
express my opinion that it is with the latter. But I think it is 
necessary to determine whether the custom of the Stock Exchange 
is such that a member of the Stock Exchange, no matter whether 
broker or jobber, who on the name day has passed a ticket duly 
issued by another member, and containing a name, has fulfilled his 
contract, and is, after the lapse of fifteen days, free from all further 
liability. I am of opinion that the custom is to this effect, and 
on that ground I affirm the judgment. I could not, in my view of 
the matter, come to that conclusion unless I thought the judgment 
in Maxted v. Paine (1st action) (1) was wrong ; but I do not think 
that the affirmance of the judgment below, on the reasons given 
by the other members of the court, overrules Maxted v. Paine 
(1st action) (1), which must still remain an authority. 

COCKBUEN, C. J. (2) Agreeing in the main in the judgment which 
has been delivered by my Brother Montague Smith, I, nevertheless, 
wish to base my judgment on the ground that, in my opinion, tho 
decision in this case follows from, and must be governed by, tho 
judgment of the Court of Exchequer Chamber in the case of 
Grissell v. Bristowe (3), and that it appears to me unnecessary to 
discuss the present case as though the judgment in the case 
referred to had never been pronounced, and the question as to the 
effect of the usage of the Stock Exchange were an open question, 
and to be dealt with now for the first time. 

The present case differs from, that of Grissell v. Bristoive (3) in 
one particular only, and the sole question is whether that one 
particular takes the case out of the principle of the former decision, 
by which, so far as it is applicable, we must, of course, necessarily 
be bound. In the present case, as in Grissell v. Bristowe (3), tho 
action is brought by the seller of shares sold according to the 
custom of the Stock Exchange against the first buyer, on the 
ground that the ultimate buyer has foiled to fulfil the terms of the 

(1) Law Eep. 4 Ex. 81. (2) This judgment was read by Lush, J. 

(3) Law Eep. 4 C. P. 36. 



182 COURT OF EXCHEQUER. [L. R. 

1871 contract by reason of his not paying calls subsequently made on 
~MAXTED" tne snarep > i u consequence whereof the plaintiff, as the registered 
v - owner of the shares, has been compelled to pay such calls. 

The particular in which this case differs from Grissdl v. Bris- 
toive (1), is, that the party whose name was given by the defendant 
on the name day as the ultimate buyer by whom the shares were 
to be bought and paid for, and to whom they were to be transferred, 
was not the real buyer, but was a person who had been induced by 
the party on whose account the shares had in fact been bought, 
namely, Sir S. Spry, in consideration of a gratuity, to consent to 
take Sir Samuel Spry's place, and become the transferee of the 
shares ; a transaction which, it should be observed, was wholly 
unknown to the defendant, who believed the party in question, one 
Goss, to be bona fide the purchaser of the shares. 

In my opinion, this circumstance does not affect the result, and 
it seems to me that if the grounds on which the judgment of the 
Court of Exchequer Chamber in Grissdl v. Bristowe (1), are duly 
considered, it necessarily follows that our judgment must be in 
favour of the defendant. My reason for so thinking is that it 
appears to me that the effect of the whole transaction, as between 
Sir Samuel Spry and Goss, in the first instance, and between Goss 
and the plaintiff, in the second, was to constitute Goss, as between 
him, the plaintiff and the company, in effect the purchaser of the 
shares. If any circumstances had afterwards arisen whereby the 
company had been restored to a prosperous condition, and which 
had led to the discharge of the order for winding up, and the 
shares, instead of being at a discount, had again become valuable, 
Goss, and Goss alone, could have insisted on being registered as 
the owner, and would alone have been entitled to receive any 
dividend payable on them. 

It is unnecessary, as it seems to me, to consider how far in such 
an event Goss might have been held to be a trustee for Spry, or 
might have been compellable to transfer the shares to the latter, if 
indeed the fraudulent nature of the purpose out of which the 
transaction between himself and Spry originated would not have 
been fatal to any such claim on the part of the latter. It is 
enough to say that, as between himself and the plaintiff, Goss 
(1) Law Rep. 4 C. P. 36. 



VOL. VI.] HILARY TEEM, XXXIV VICT. 183 

became the purchaser, and became bound to the performance of 1871 
the contract. There can be no doubt, I apprehend, that Goss MAXTEU 
became liable to the plaintiff to pay future calls on the shares, or 
that if, instead of being a man of straw, he had been or had after- 
wards become a man of substance, against whom it would be worth 
while to bring an action, an action would lie against him to re- 
imburse the plaintiff. In the judgment in Grissell v. Bristowe (1) 
the Court say, " when the seller adopted the substituted parties 
as the buyers, and the price was paid by the one, and the property 
transferred by the other, a contract, and the relation of vendor 
and vendees, immediately arose between them." I am, therefore, 
of opinion that Goss must, for the present purpose, be treated as 
the purchaser of the shares. It is clear that he was so treated by 
the plaintiff, who executed the transfer of the shares to him with- 
out hesitation or objection. If this be so, the case is brought 
directly within the decision in Grissell v. Bristowe. (2) In that 
case the Court held that, while according to the reasonable con- 
struction of the usage of the Stock Exchange, the first buyer in 
availing himself of the right afforded by the usage, and therefore 
implied by and comprehended within the terms of the original 
contract, of substituting another buyer for himself, was bound to 
give the name of a person willing and able to fulfil the contract, 
yet if the seller, instead of objecting to the person so proposed, 
accepted such person as the buyer, and proceeded to transfer the 
shares to him, he took him for better or worse, and in so doing 
released the original buyer from all further liability ; in other 
words, that there was no implied warranty of the sufficiency of the 
substituted buyer, or of the performance of the contract in its 
ulterior details by him, but simply an obligation, if he availed 
himself of his right of substituting a buyer, to provide one to 
whom the seller could not reasonably object ; while, on the other 
hand, the right of the seller to object would be waived if, instead 
of availing himself of the opportunity of inquiring and of his right 
to object, he at once accepts the party proposed as buyer, and 
proceeds to transfer the shares to him. 

In the judgment of the Court in Grissell v. Bristowe (3) the 

(1) Law Rep. 4 C. P. at p. 51. (2) Law Rep. 4 C. P. 30. 

(3) Law Rep. 4 C. P. at p. 50. 
VOL. VI. R 3 



Ig4 COUKT OF EXOHEQUEE. [L. E. 

1871 Court say, with reference to the effect of thejseller having without 
objection transferred the shares of the nominee of the first buyer, 
" * n so doing it * s obvious that the plaintiff has for ever deprived 
himself of the power of transferring the shares to the defendants, 
yet it was in consideration of having the property in the shares, 
which must always be assumed to have some value, conveyed to 
them in the event of their nominees not fulfilling their obligations 
as buyers, that the defendants assented to be bound to the obliga- 
tions of the contract. "When, therefore, the plaintiff has by his 
own act put it out of his power to give to the defendants the con- 
sideration which formed the basis of the contract, and has trans- 
ferred that benefit to another, it would obviously be unreasonable 
and unjust that he should be at liberty to enforce the obligations, 
the consideration for which entirely fails." 

It is unnecessary to consider what may be involved in the right 
of the seller to insist on the substituted buyer being competent to 
fulfil all the obligations of the contract, and how far he may be 
entitled to ask for information from the original buyer, or insist 
on time to enable him to make the necessary inquiries. We are 
here dealing with a case in which the seller has accepted the pro- 
posed buyer, and has transferred the shares to him. ; and the 
principle of the decision in Grissell v. Bristowe (1) appears to me 
therefore clearly to apply. I therefore concur with the majority 
of the Court in holding that the judgment of the Court of 
Exchequer must be affirmed. 

Judgment affirmed. 

Attorneys for plaintiff: Freshfields. 
Attorneys for defendant : J. & M. Pontifex. 

(1) Law Eep. 4 C. P. 36. 



END OF HILARY TERM, 1871. 



VOL. VIJ 



CASES 



DETERMINED BY THE 



COURT OF EXCHEQUER 



AND BY THE 



COURT OF EXCHEQUER CHAMBER, 

OX ERROR AND APPEAL FROM THE COURT OF EXCHEQUER, 



IN AND AFTER 



EASTER TERM, XXXIV VICTORIA. 



SANKEY BKOOK COAL COMPANY, LIMITED, v . MARSH AND ANOTHER. 

Company Winding-up under Supervision Set-off Companies Art, 1862 April 2C. 

(25 & 26 Viet. c. 89), ss. 87, 101, 130, 131. 

Where a limited company, being insolvent, passes a resolution to wind up 
Voluntarily, and an order is afterwards made to continue the winding-up under 
the supervision of the Court, in an action afterwards brought by the liquidator in 
the name of the company against a member, a debt due from the company to 
the defendant previous to the resolution cannot be set off against a debt incurred 
by the defendant to the company after the resolution. 

DECLARATION, that before the contracting by the defendants of 
the debt thereinafter mentioned a resolution was duly made by the 
plaintiffs' company, in which the defendants were then shareholders, 
to wind up the company voluntarily ; that a liquidator was duly 
appointed ; that afterwards a petition was presented to the Court 
of Chancery and an order made thereupon that the said voluntary 
winding-up should continue subject to the supervision of the Court, 
which order still remains in full force and effect, of all which pre- 
mises the defendants had notice; that after the aforesaid resolution 

VOL. VI. S 3 



186 



COUET OF EXCHEQUER. 



[L. E. 



1871 



SANKEY 

BROOK 

COAL Co. 

v. 
MARSH. 



and appointment, and while they were in full force and effect, and 
while the company was being wound up in pursuance of the reso- 
lution as aforesaid, and while the defendants continued share- 
holders, the defendants became indebted to the plaintiffs for money 
payable for goods bargained and sold, goods sold and delivered, 
work, labour and materials, money paid, interest, and on accounts 
stated. 

Plea: Set-off of money which, by an indenture made between 
the plaintiffs and the defendants before the making of the said 
resolution, the plaintiffs covenanted with the defendants to pay to 
the defendants at a time which elapsed before the making of the 
resolution, and of money lent by the defendants to the plaintiffs 
before the making of the resolution, and of money received by the 
plaintiffs for the use of the defendants before the resolution. 

Demurrer and joinder. 

Quain, Q.C. (FitzAdam with him), in support of the demurrer. 
The defendants, being shareholders when the winding-up com- 
menced, are shareholders still ; for after the commencement of the 
winding-up the status of members cannot be changed: s. 131 of 
the Companies Act, 1862. They are therefore contributories, and, 
the winding-up being continued under the supervision of the Court, 
they are within s. 101, the principle of which has been considered 
applicable to actions at common law : Brighton Arcade Company 
v. Dowling. (l) In that case s. 101 was held not to apply to the 
case of a voluntary winding-up ; but the Court expressly say that 
their decision would be otherwise in the case of a winding-up under 
supervision. And on general principles this ought to be so. A 
voluntary winding-up commences from the date of the resolution 
to wind up (s. 130) ; thereupon the company ceases to carry on 
business, except for the purpose of winding up, but its corporate 
state and powers continue until the affairs of the company are 
wound up (s. 131) ; and these powers are exercised by the liquida- 
tors (s. 133), but solely for the purpose of winding up the com- 
pany. It was during the continuance of this state of things that 
the debt sued for was contracted. But further, an order has here 
been made upon a petition under s. 147, to continue the winding-up 

(1) Law Rep. 3 C. P. 175. 



VOL. VI.] 



EASTEE TERM, XXXIV VICT. 



187 



subject to the supervision of the Court; and that petition has, 
with respect to the jurisdiction of the Court over suits and actions, 
the same effect as a petition for winding up (s. 148). The effect of 
the whole proceeding is, that the winding-up is in substance a wind- 
ing-up for the benefit of all the creditors, who have the first charge 
on the assets collected ; and the claim of set-off now made is an 
attempt by the defendants to obtain payment of 20s. in the pound 
upon their debt, contrary (they being shareholders) to s. 101, and 
to the provisions of ss. 131 & 153, that after the commencement of 
the winding-up (that is, the resolution (1) ) no alteration can be 
made in the status of the members. It is also contrary to ss. 87 & 
163, which provide that after the winding-up no proceeding shall be 
commenced or proceeded with against the company without the 
leave of the Court. The reasoning in GrisselTs Case (2), Wiltshire 
Iron Co. v. Great Western Ry. Co. (3), and Brighton Arcade Co. v. 
Dowling (4), is entirely in favour of the plaintiffs. 

Milward, Q.C. (B. V. Williams with him), in support of the plea. 
The case is within the statute of set-off, and is also within the case 
of Brighton Arcade Co. v. Doiding. (4) The fallacy is in supposing 
that a winding-up under supervision is necessarily different in its 
circumstances from a voluntary winding-up. It may still remain 
nothing but a dissolution of a solvent company, for their own 
benefit, and without any reference to their creditors (s. 129) ; for a 
petition under s. 147 may be presented by a member. {5) 

[On the suggestion of the Court, Quain assented to the insertion 
in the declaration of an allegation that the company was in- 
solvent.] 

Quain was not called on to reply. 

MABTIN, B. I am of opinion that this set-off cannot be esta- 
blished. If any provision of the legislature compelled us to allow 
it, we must do so, although the result would be grossly unjust ; 
but, in my judgment, these debts are not in substance and in fact 
mutual debts within the meaning of the statute of set-off. The 



1871 



SANKEY 

BKOOK 

COAL Co. 

v. 
MAKSIT. 



(1) Weston's Case,Law Rep. 4 Ch. 20. 

(2) Law Rep. 1 Ch. 528. 

(3) Law Rep. 6 Q. B. 101. 

(4) Law Rep. 3 C. P. 175. 



(5) See In re Beaujolais Wine Co., 
Law Rep. 3 Ch. 15 ; In re London and 
Mercantile Discount Co., Law Rep. 1 Eq. 
277. 



188 



COURT OF EXCHEQUER, 



[L. R. 



1871 



SANKEY 

BEOOK 

COAL Co. 

v. 
MARSH. 



debt owing by the company was contracted and became due 
whilst they were in a state of solvency and independency; the 
debt to them became due after the commencement of a winding-up 
under the supervision of the Court of Chancery, and arose from 
the sale of property of the plaintiffs made subsequently to the 
liquidator taking the affairs of the company under his control. 
These are, in substance and good sense, not debts between the 
same parties. 

It is argued that Brighton Arcade Co. v. Dowling (1) is in 
favour of the defendants' claim ; but at the very commencement 
of his judgment in that case, Bovill, C.J., distinctly says that he 
confines his judgment to the case of a voluntary winding-up, and 
that it would be otherwise in the case of a winding-up under the 
supervision of the Court. The other learned judges say the same, 
and I have no doubt that that view is correct. 

BKAMWELL, B. I am of the same opinion. We might decide 
the case on the authority of Brighton Arcade Co. v. Dowling (1) ; 
for although the observations upon this point which are made in 
that case are, in one sense, extrajudicial, yet they are the deliberate 
expression of opinion of four learned judges, who justified their 
decision by shewing that the point before them was different from 
that now before us, and who were therefore compelled to consider 
this very question in order to arrive at their conclusion. But, 
independently of that authority, if we look at the substance of the 
matter, it cannot be that the defendants ought to succeed. Sub- 
sequently to the plaintiffs' insolvency the liquidator carried on 
their business, possibly altogether, but at any rate primarily, for 
the benefit of their creditors, who had the first claim on whatever 
might be realized. In the course of carrying on that business 
goods are sold to the defendants, who claim to set off against the 
price a debt due to them from the company before the winding-up. 
The case is precisely as if a person against whom assignees in 
bankruptcy brought an action for a debt incurred to them, should 
attempt to set off a debt due to him from the bankrupt. If, there- 
fore, the good sense of the matter is looked at the case is plain, 
and the only thing that could be said in favour of the defendants 
(1) Law Rep. 3 C, P. 175. 



VOL. VI.] 



EASTER TERM, XXXIV VICT. 



189 



would be, that there is nothing in a winding-up to impair the effect 
of the statute of set-off; that the debts are here mutual, the one 
being due from the plaintiffs to the defendants, and the other due 
from the defendants to the plaintiffs ; and that at common law it 
matters not what are the equitable rights of the parties a de- 
fendant, for instance, being entitled to his set-off notwithstanding 
that the plaintiff has assigned over his debt. But I think that 
these debts are in substance not mutual, but that the real plaintiff 
is the liquidator, and that the debt sued for is really due to the 
body of creditors in whose behalf he brings the action. I think 
we are entitled to look at the substance of the matter, and that we 
should be most unjustifiably cleaving to the letter if we allowed 
this set-off to prevail. 

But further, it is a well-known and familiar rule of law, that no 
plea of set-off is good if it is founded on a claim that could not be 
made the subject of an action. Now, could the defendants 
maintain an action against the plaintiffs for their claim ? I say 
they certainly could not ; for by the 87th section of the Companies 
Act, 1862, "no suit, action, or other proceeding shall be proceeded 
with or commenced against the company except with the leave of 
the Court, and subject to such terms as the Court may impose." 
Whether, if such an action were brought, this provision would be 
taken advantage of by plea in bar or in abatement, or by stay of pro- 
ceedings, is immaterial ; here it appears on the record that no such 
action could have been maintained. In Higgs v. Northern Assam 
Tea Co. (1) a replication, shewing that under the circumstances the 
set-off pleaded by the company was inequitable, was held good ; and 
that case has since been approved by the Master of the llolls in 
Ex parte Universal Life Assurance Co. (2) This shews that in an 
action against the company a replication shewing that the real 
plaintiff was the liquidator, and that he sued for the benefit of the 
general body of creditors, would be good ; for equity would in that 
case restrain the defendants from setting up this defence. On 
this ground, in addition to tliose before mentioned, I am of opinion 
that these are not mutual debts, and that the plea of set-off 
is bad. 



1871 

HANKEY 

BROOK 

COAL Co. 

V.' 

MAUSII. 



(1) Law Hep. 4 Ex. 387. 



(2) Law Hep. 10 Eq. 458, 



190 COUBT OF EXCHEQUER. [L. B. 

1871 Our decision is entirely in accordance with the principles 

g ANKEY acted upon in Wiltshire Iron Co. v. Great Western Railway. (1) 

BEOOK 

COA Co< Judgment for the plaintiffs. 

MAESH. 

Attorneys for plaintiffs : Sharpe, Parker, & Co. 

Attorneys for defendants : Gregory <& Co. 



May 8. PICKWELL v. SPENCER AND OTHEES. 

Witt before ] 838 Fee given without Words of Limitation. 

By a will dated before 1838, the testator gave lands to his wife without words 
of limitation. He also made her executrix and general legatee ; and directed that 
" my executrix shall pay my eldest son W. P. the sum of 61. a year for wages as 
long as he shall continue to labour on the farm after my decease " : 

Held, that the wife took the fee. 

SPECIAL CASE stated in an action of ejectment, brought by John 
Pickwell, the customary heir of Matthew Pickwell. 

The land in question, which was copyhold, was devised by 
Matthew Pickwell, by a will dated 26th of March, 1821, in the 
following words: "I give and bequeath to my beloved wife, 
Mary Pickwell, all those my copyhold closes, which I have sur- 
rendered to the use of my will, situate, &c. I also give and 
bequeath to my said wife Mary Pickwell all the land which may 
fall to the said closes by the inclosure of the High Moor. Also, I 
give and bequeath to my said wife, Mary Pickwell, all my money, 
securities for money, goods, chattels, and effects, of what nature or 
kind soever, and wheresoever the same shall be at the time of my 
decease. And I do nominate, &c., my said wife executrix of this 
my last will." The testator then directed that " if my said wife 
Mary Pickwell marry again," an inventory should be taken of all 
the land, goods, &c., before-mentioned by certain persons, whom he 
appointed guardians of his children, with power to take away the 
goods, chattels, and effects, and " to reserve" them and the lands 
for the benefit of his children, until the two youngest should have 
arrived at an age capable of providing for themselves, and then to 

(1) Law Rep. 6 Q. B. 101. 



VOL. VI.] EASTER TERM, XXXIV VICT. 19 

sell the whole and divide the proceeds " equally amongst my sur- 1371 
viviug children. It is also my will that my executrix shall pay p KWEL] 
niy eldest son William Pickwell the sum of 51. a year for waees, 

SpENCtr 
as long as he shall continue to labour on the farm after my 

decease." 

The testator died shortly after making his will. In 1832, Mary 
Pickwell sold the lands in question to Eichard Snow, who died in 
1857, having devised them to trustees for his wife during her life, 
and after her death to the defendants as tenants in common. 

Eichard Snow's widow died, and the defendants were admitted 
in 1865. 

Mary Pickwell died in 1870. 

The question for the opinion of the Court was, whether Mary 
Pickwell took any larger estate in the land than a life estate. 

April 27. The case was argued by 

Field, Q.C. (J. J. Aston with him), for the plaintiff, and 
Manisty, Q.C. (F. M. White with him), for the defendants. 
They cited Roe d. Bowes v. Blackett (1), and Doe d. Willey \. 

Holmes. (2) 

Cur. adv. vult. 

May 8. The judgment of the Court (MARTIN, BRAMWELL, and 
CLEASBY, BB.) was delivered by 

CLEASBY, B. The question in this case is, whether the devise 
to Mary Pickwell without words of limitation (which, standing by 
itself, would only give an estate for life), is enlarged to a devise in 
fee by reason of what follows in the will. 

It has been established from a very early period, that where 
a devisee whose estate is undefined, is directed to pay either a 
sum in gross, or an annual sum, he takes an estate in fee. This 
is a rule adopted to escape from the technical necessity of words 
of limitation, and the reason given is, that if the devisee had only 
an estate for life, he might possibly be damnified ; and the amount 
of the charge and the probability of loss are not taken into con- 
sideration. 

In Wellock v. Hamond (3), the devise was to the wife of the 

(1) Cowp. 235. (12) 8 T. R. 1. (3) Cro. Eliz. 201. 






192 COUET OP EXCHEQUEE. [L. E. 

1871 testator for life, remainder to his eldest son, he paying 40s. to each 
PICK-WELL of his brothers and sisters within two years after the death of the 
w ^ e * "* was adjudged a fee * n * ne eldest son, and at that early 
time the rule was considered as established. The judgment of the 
Court is : " It is a fee, for the value is not material, and no book 
speaks of the value." 

In Lee v. Stephens (1), the devise was to A. conditionally that he 
should allow to his son Nicholas, meat, drink, &c., during his 
natural life. A. was held to take a fee. 

It has also been considered that it makes no difference that the 
payment has to be made upon a contingent event as, for instance, 
upon a certain person attaining twenty-one : Doe d. Thorn v. 
PhiUips (2) ; Abrams v. Winshup (3). 

In the present case the direction is, that the executrix shall pay 
to the eldest son 5Z. a year for wages so long as he works upon the 
farm devised to her. We consider the word executrix here does 
not mean as executrix, but is a designatio personse, the payment 
being connected with the farm devised to her. The payment, 
therefore, is for an uncertain period, over which the devisee has 
no control, and although it is said to be for wages, it is still com- 
pulsory. The reason usually given in these cases applies, viz., 
that the devisee might die in a week after the testator ; yet still 
the will directs that she shall pay the sum mentioned so long as 
the son works upon the farm that is, after she has ceased to have 
any interest in it, if she only takes an estate for life. The con- 
clusion at which we arrive is, that the devisee, Mary Pickwell, took 
an estate in fee, defeasible of course (either at law or in equity), 
upon her marrying again. 

It was also contended that the devise or limitation over in case 
the widow married again, had the same effect as a limitation over 
in case the devisee died under twenty-one, the latter limitation 
having undoubtedly the effect of enlarging a devise without words 
of limitation to an estate in fee. There is no clear authority bear- 
ing upon such a limitation as the present, and we think it better 
to express no opinion upon it, as it is not necessary for the 
decision of the case ; and the other conclusion in favour of the 

(1) 2 Show. 49. (2) 3 B. & Ad, 753, 

(3) 3 Euss. 350. 



VOL. VI.] EASTER TEHM, XXXIV ViCT. 193 

defendants rests upon the established rule and the authorities to 1871 
which we have referred. PICKWELL 

Judgment for the defendants. SPEJ/CEK. 

Attorneys for plaintiff: Su~ann & Co. 

Attorneys for defendants : Borrett, White, & Borrett. 



ATTORNEY-GENERAL v. G1LPIN AND OTHERS. May 8. 

Stamps Exemption from Duty Benefit Building Socidy Draffs by Members 
on Society 10 Gco. 4, c. 5G, s. 376 & 1 Win. 4, c. 32, s. 4. 

By the rules of a benefit building society, its members were holders either of 
completed shares of 30?., or of uncompleted shares of 301., to be paid up by 
monthly instalments. A notice of twenty-eight days was to be given by any 
member wishing to withdraw his shares, who was, at the same time, to leave 
his pass-book at the office ; and if at any time the money in hand was not suffi- 
cient to pay all the members wishing to withdraw, they were to be paid in rota- 
tion according to the priority of their notices. By the practice of the society, 
members holding completed shares were allowed to withdraw only whole share.", 
but members holding uncompleted shares were allowed to withdraw the whole or 
any part of the money standing to the account of the shares. Interest was paid 
half-yearly on completed shares, but not on uncompleted shares. The mode of 
withdrawing shares, whether completed or uncompleted, was by the member 
giving notice of withdrawal, upon which he was furnished with a form of request 
for a draft, on the receipt of which request, signed by him, a draft for the amount 
was forwarded to him, made payable to leaver. The drafts were usually paid 
within a week of the notice to withdraw. Drafts payable to Icarer were forwarded 
half-yearly to the holders of completed shares, in respect of the interest due on the 
shares, without any previous request : 

Held, that such drafts were liable to stamp duty, not being within the protection 
of 6 & 7 Wm. 4, c. 32, s. 4, and 10 Geo. 4, c. 56, s. 37. 

CASE stated under 22 & 23 Viet. c. 21, in a proceeding against 
the trustees of the National Permanent Mutual Benefit Building 
Society, to recover penalties for paying unstamped drafts. 

The society was registered under 6 & 7 Wm. 4, c. 32. By the 
society's rules the shares were 30?. each (rule 1) ; they were to be 
completed by monthly instalments (rule 3) ; but might, under cer- 
tain conditions, be advanced by the executive committee, out of 
money in hand, to members not in arrear (rule 7). Interest was 
to be allowed on subscriptions in advance, and on completed shares 



194 



COURT OF EXCHEQUER. 



[L. R. 



ATTOBNEY- 

GENEBAL 
v. 

GlLPIN. ' 



1871 (rule 5) ; at the end of the year, such a portion of the profits as 
the committee might direct was to be placed to the credit of 
the holders of unadvanced shares, but not paid till the shares were 
withdrawn or realized (1) ; and when any share was advanced, or 
completed, or withdrawn, before the end of the year, interest was to 
be allowed at such rate as should be determined by the committee 
(rule 17). ' 

Any member might withdraw his shares twenty-eight days after 
having given notice of his intention to do so, and left his pass- 
book at the office ; but if the money in hand were insufficient to 
pay all the members wishing to withdraw, they were to be paid 
in rotation according to the priority of their notices ; and every 
member withdrawing was to give up his pass-book (rule 13). j 

Payment to any one producing a member's pass-book, and repre- 
senting himself to be that member, was to discharge the society 
and its officers, unless notice of the loss of the pass-book had been 
given (rule 14). 

The only rule relating to cheques was the 24th, which provided 
that " no payments shall be made out of the funds of the society 
except by order of the executive committee ; and all cheques upon 
the bankers shall be signed by one trustee and two other mem- 
bers of the executive committee, and countersigned by the 
secretary." 

Members are supplied with two forms of pass-book, one for com- 
pleted and the other for uncompleted shares, but not with cheque- 
books. There is no restriction other than the 13th rule to prevent 
the holder of an uncompleted share from drawing out the whole or 
any portion of the moneys standing to the credit of such share ; 
but a member is not allowed to withdraw part of a completed 
share. 

The practice with respect to drawing out the whole or any part 
of the money standing to the credit of a member in the books 
(except interest on completed shares, for which forms of draft are 
sent half-yearly, as the interest becomes due, without any previous 
request) is as follows : The member gives the society a notice of 
the sum intended to be drawn out ; the society's accountant then 
forwards him a request for a form of draft for the sum named, 
(1) See 6 & 7 Wm. 4, c, 32, s, I. 



VOL. VI.] 



EASTER TEEM, XXXIV VICT. 



195 



which the member signs and returns, together with his pass-book ; 
the accountant thereupon forwards a draft in the form given below, 
filled up in all respects except the signature of the drawer. 

It is not the practice of the society to avail itself of the twenty- 
eight days mentioned in rule 13, and the draft is, in general, 
drawn and cashed within a week of the notice of withdrawal. 

The society, though having (by rule 18) a power of borrowing, 
has never exercised it. It receives no other deposits than the 
payments of members upon shares, and it has no other funds than 
the aggregate of the members' shares, and the balance of unappro- 
priated profits. There is no limit to the number of shares in the 
society, or to the number, whether completed or uncompleted, 
which any member may hold. Any person can take a share on 
payment of a fee of Is. per share ; the monthly instalments are 
not enforced, and the whole amount of a share or any number of 
shares may be paid at once, or from time to time, at the pleasure 
of the holder. 

The only office of the society is in London, but its members are 
resident in various parts of the country. It does not purchase 
land or houses for its members, or assist its members in obtaining 
houses or land otherwise than by advancing money on mortgage, 
and such advances are made to other persons as well as to mem- 
bers. The average amount of moneys standing to the credit of 
members in respect of completed shares in 1808-69 was 518,265Z., 
and in respect of uncompleted shares, 581,1117.; and the number 
of drafts drawn during the year was 19,865, exclusive of drafts by 
which the whole amount standing to any member's credit was 
drawn out on his share becoming a completed share. 

Of the drafts in question, one was drawn by Stephen Hanger, a 
member, in respect of an uncompleted share, and was in the 
following form : 



1871 



ATTOKNEY- 
GENEHAL 

v. 

GlLPIN. 



" 80,338 
Led. 151. 
Fo. 462. 

10Z. 18s. 2d. 



National Freehold Land Society 

(Registered as the National Permanent 
Mutual Benefit Building Society, pur- 
suant to 6 i% 7 Wm. 4, c. 32). 

1 Feb., 1870. 



"On demand, pay to bearer ten pounds 18/2, payable to me 
pursuant to notice of withdrawal. 



196 



COUKT OF EXCHEQUER 



[L. B. 



1871 

ATTORNEY- 
GENERAL 

v. 

GlLPIN. 



To 

"The Trustees of the National 
Permanent Mutual Benefit Build- Signature, 

ing Society, 14, Moorgate Street, STEPHEN HANGER. 

London. 

Office hours, &c." 

The draft was crossed as follows : 

Pay Smith, Payne, & Co., 
Eandall & Co., Maidstone." 

This draft, after being signed by Banger, was paid away by 
him, and on the 5th of February was paid to the holder, without 
having been stamped. 

The second draft was drawn by Ruth Ann Tanner, a member, 
in respect of interest on a completed share, and was similar in 
form to the other. The body of the draft was in the words : 

" On demand pay to bearer twelve shillings and one penny, for 
interest on my completed share account, due to me this day." 

This draft was not crossed. It was dated the 31st of October, 
1869, and, after being signed by E. A. Tanner, was paid to the 
holder on the 1st of November, without having been stamped. 

The question for the Court was whether both or either of the 
drafts were liable to stamp duty. 

April 25. Sir E. P. Cottier, A.G. (C. Button with him), for the 
Crown. These drafts are in reality cheques, and are within 21 & 
22 Viet. c. 20, s. 1, which takes away the exemption in favour 
of cheques drawn payable within a certain distance, contained 
in the previous Acts of 55 Geo. 4, c. 184, 16 & 17 Viet. c. 59, 
and 17 & 18 Viet. c. 83; those who pay them are therefore liable 
to a penalty, either under 55 Geo. 3, c. 184, s. 11, or under 17 & 18 
Viet. c. 83, s. 7. But exemption is claimed under 6 & 7 Wm. 4, 
c. 32, s. 4, which extends to benefit building societies the provisions 
of the then existing Friendly Societies Act (10 Geo. 4, c. 56) (1), 
" so far as the same or any part thereof may be applicable to the 
purpose of any benefit building society, and to the framing, cer- 
tifying, enrolling, and altering the rules thereof." But, in the first 
(1) Since repealed by 19 & 20 Viet, c. 63. 



VOL. VL] 



EASTER TERM, XXXIV VICT. 



107 



GENERAL 
v. 

GlLl'IX. 



place, this is, either not at all, or not exclusively, a benefit building 1871 
society ; it is a banking society, and it is in this character that ATTORNEY- 
the transactions in question take place. Secondly, these cheques 
are not within the terms of 10 Geo. 4, c. 56, s. 37 (1) ; they are 
not drafts or orders " required or authorized to be given in pur- 
suance of" the Act; they are not even required or authorized to 
be given in pursuance of " the rules of the society," although, even 
if they were, it could not be admitted that 18 & 19 Viet. c. 63, 
s. 37 (which adds these words), applies to this society. The object 
of the Act (which must here mean the Act of 6 & 7 Win. 4, 
c. 32) was to assist the members of the societies in acquiring 
land for the erection of dwelling-houses ; but the purpose of these 
drafts is to carry on the business of banker and customer. Neither 
do the rules of the society contemplate any such a mode of 
carrying on business, but evidently intend payment to be made 
only upon the pass-book (see rule 13). 

Quain, Q. C. (Thrupp with him), for the defendants. If the drafts 
are negotiable instruments, it is true that, unless they are protected 
by 6 & 7 Wm. 4, c. 32, s. 4, and 10 Geo. 4, c. 56, s. 37, they are 
liable to stamp duty ; but they are distinctly within the terms of 
those sections. The society is carrying on its own legitimate busi- 
ness, and drafts in this form are essential to the convenient trans- 
action of it. Both the Act and the rules contemplate the pay- 
ment out to members, both of whole shares and of parts of uncom- 
pleted shares, and of interest on whole shares; the only limitation 
placed on the dealing with uncompleted shares being, that periodi- 

(1) By 10 Geo. 4, c. 56, s. 37 : " No 
copy of rules, power, warrant, or letter 
of attorney, granted or to be granted by 
any person as trustee of any society esta- 
blished under tins Act, for the transfer 
of any share in the public funds stand- 
ing in the name of such trustee, nor any 
receipts given for any dividend in any 
public stock or fund or interest of Ex- 
chequer bills, nor any receipt, nor any 
entry in any book of receipts, for money 
deposited in the funds of any such 
society, nor for any money received by 
any member, his or her executors or 
administrators, assigns, or attorney?, 



from the funds of such society, nor any 
bond nor other security to be given to 
or on account of any such society, or 
by the treasurer or trustee or any 
officer thereof, nor any draft or order, 
nor any form of assurance, nor any 
appointment of any agent, nor any cer- 
tificate or other instrument for the revo- 
cation of any such appointment, nor any 
other instrument or document what- 
ever required or authorized to be given, 
issued, signed, made, or 2'oduced in 
pursuance of this Act, shall 1x3 subject 
or liable to be charged with any stamp 
duty or duties \vliatsoever." 



198 



COURT OF EXCHEQUER. 



[L. R. 



1871 



ATTORNEY- 
GENERAL 
v, 

GlLPIN. 



cal interest or profit shall not be paid upon them (6 & 7 Wra. 4, 
c. 32, s. 1, and rule 17). It is essential that the mode actually 
adopted, or some equivalent mode, should be used, for it would be 
practically impossible otherwise to make remittances to members 
at a distance of the sums to which they were entitled. If so, these 
are certainly drafts or orders authorized or required by the Act, 
and they are so in a greater degree than the instruments which 
were held exempt in Walker v. Giles (1), Barnard v. Pilsworth (2), 
and Thorn v. Croft (3) ; and 31 & 32 Viet, c. 124, s. 11, amounts to 
a legislative declaration that these are correct decisions. They are, 
in fact, directly within the words used by this Court in delivering 
judgment in In re Royal Liver Friendly Society (4) ; they are docu- 
ments " relating to the conduct of the internal business ;" they are 
" required in the administration of the society's affairs." That 
the number of members is large, and therefore the funds of the 
society large also, only shews that the purpose and policy of the 
Act have proved successful. But, secondly, these drafts are not 
negotiable instruments ; they are payable only out of a particular 
fund, and in the event of there not being money in hand, the 
holder must wait for his turn. 
C. Button, in reply. 

Cur. adv. vult. 

May 8. The judgment of the Court (Kelly, C.B., Channell and 
Pigott, BB.) was delivered by 

KELLY, C.B. The question is, whether the instruments before 
us, which are, in form, ordinary cheques, require a stamp. They 
certainly do, unless the circumstances under which they are drawn 
exempt them from duty under some express legislative enactment. 
It is contended that they do obtain that exemption by reason of 
6 & 7 Wm. 4, c. 32, s. 4, which extends to benefit building socie- 
ties the provisions contained in 10 Greo. 4, c. 56, with reference to 
friendly societies. The section of the latter Act which is relied 
upon is s. 37, which contains among the list of exempted instru- 
ments, " draft or order ;" it is necessary, therefore, to inquire what 

(1) 6 C. B. 662, 696 ; 18 L. J. (2) 6 C. B. 698, n. ; 18 L. J. (C.P. 
(C.P.) 323, 329. 330, n. 

(3) Law Rep. 3 Eq. 193. (4) Law Rep. 5 Ex. 78. 



VOL. VI.] 



EASTER TERM, XXXIV VICT. 



109 



GEN Kit A i< 

v. 
GILPIN. 



sort of drafts and orders arc contemplated by the section. They 1871 
must be drafts or orders " required or authorized to be given, ATTORNEY . 
issued, signed, made, or produced, in pursuance of " the Act ; and 
I think these words limit the drafts and orders mentioned to such 
as are drawn by an officer of the society for its purposes, or by a 
member upon the society, payable to himself only. The rules of the 
society evidently contemplate a payment to the member personally, 
on the production of his pass-book, and after its examination, and 
not a payment made on the draft of a member at a distance, and 
perhaps abroad, payable to the bearer, and passing from hand to 
hand with or without indorsement. Indeed, looking at the facts 
stated in the case, it may be doubted whether this is really a 
benefit building society at all ; at all events, this is not a transac- 
tion falling within the ordinary transactions of a building society, 
but is a transaction between banker and customer. The society 
has possessed itself of deposits amounting to more than one million 
pounds, which remain in its hands in the ordinary mode of banking 
business. A notice is required of a member's intention to with- 
draw his deposit, but on the expiration of the limited time, the 
member is entitled to withdraw either his completed share or shares 
of 301., or the whole or any part of his uncompleted shares. This 
is clearly a banking transaction, and not a transaction within the 
operations either of a benefit building society or a friendly society, or 
within the spirit and meaning of 10 Geo. 4, c. 56, or 6 & 7 Wm. 4, 
c. 32. The result is, that these drafts are liable to stamp duty, and 
the Crown is, therefore, entitled to the judgment of the Court. 

Judgment for the Crown. 

Attorney for the Crown : Solicitor of Inland 'Revenue. 
Attorneys for defendants : Russell, Davies, & Russell. 



200 COURT OF EXCHEQUER, [L. B. 



1871 FORSHAW v. DE WETTE. 

April 2J. Costs County Court Act, 1867, s. 5 Reference by Consent Discretion of 

Arbitrator. 

In an action of trover and of debt a verdict was taken for the plaintiff for 
the damages claimed, subject to a reference, " the costs of the cause to abide 
the event of the award, and the costs of the reference and award to be in the 
discretion of the arbitrator." The arbitrator awarded that the verdict should be 
entered for 2?. 10s. as to the claim in trover, and for 11. 12s. 8d. as to the claim in 
debt, and directed the defendant to pay the costs of the reference and award. He 
had the power of certifying for costs, but gave no certificate. The taxing-officer 
declined to tax the plaintiff either his costs of the cause, or of the reference and 
award. On a rule directing him to tax both the costs of the cause and of the 
reference and award : 

Held, that the plaintiff was not entitled to the costs of the cause, but that he 
was entitled to those of the reference and award, although he had recovered in the 
cause sums not exceeding 10Z. in tort, and 20Z. in contract. 

THIS was an action in the Common Pleas of Lancaster, in which, 
at the Liverpool Summer Assizes, 1870, a verdict was entered for the 
plaintiff for the damages claimed, subject to a reference, "the costs 
of the cause to abide the event of the award, and the costs of the 
reference and award to be in the discretion of the arbitrator." The 
declaration contained a count in trover, and a count in debt, and 
the arbitrator awarded that the verdict should stand and the 
damages be reduced to 2?. 10s. on the count iu trover, and to 
71. 12s. 8d. on the count in debt. He had the same power of 
certifying for costs as a judge at nisi prius, but gave no certifi- 
cate as to the cause. The costs of the reference and award he 
directed should be borne by the defendant. The prothonotary 
having been applied to by the plaintiff to tax him both the costs of 
the cause and of the reference and award, declined to tax either. 
The plaintiff appealed from this decision, and his appeal was heard 
at chambers before Byles, J., who made no order, without prejudice 
to any application which might be made to the Court. 

Jan. 27. R. G. Williams moved for a rule calling on the defen- 
dant to shew cause why the prothonotary should not tax the 
plaintiff his costs of the cause and of the reference and award. 

First, as to the cause j no certificate for costs is required, for 



VOL. VI.] EASTER TERM, XXXIV VICT. 201 

where the total sum recovered in the action exceeds 10?., as it does 1871 
here, and one of the causes of action is in tort, the County Court FORSIIAW 
Act, 1867, s. 5, does not apply. (1) The plaintiff ought not to be DE \VETTK. 
deprived of his costs of the cause because the arbitrator has applied 
specifically a sum under 107. to the count in trover. Secondly, as 
to the costs of the reference and award, the arbitrator had power to 
award them under the express terms of the order of reference. 

THE COURT (Kelly, C.B., Martin, Channell, and Pigott, BB.), 
refused the rule on the first point, being clearly of opinion that 
the plaintiff was deprived of his costs under the County Court Act, 
1867, s. 5, having only recovered 21. 10s. in respect of the tort 
sued for. On the second point they granted a rule nisi. 

April 29. Nasmith shewed cause. The arbitrator exceeded his 
authority in awarding that the defendant should pay the costs of 
the reference and award. The reference was of the cause only, 
and less than the amounts specified in the County Court Act, 1867, 
s. 5, having been awarded on the counts for tort and debt respec- 
tively, the arbitrator had no power to direct the defendant to pay 
the costs. In Moore v. Watson (2), on a compulsory reference of 
an action of contract to a master, the costs of the cause to abide 
the event, and those of the reference and award to be in the 
master's discretion, he awarded less than 207., and directed the 
defendant to pay the costs of the reference ; but the Court held 
the plaintiff was deprived of those costs. The same rule applies 
here, although the reference was by consent : Cou-ell v. Amman 
Colliery Co. (3) 

E. G. Williams, in support of the rule, was not called on. 

KELLY, C.B. I think this rule should be made absolute. The 

(1) The County Court Act, 1867 to any costs of suit, unless the judge 

(30 & 31 Viet. c. 142), s. 5, enacts certify on the record that there was 

that "if, in any action in any of the sufficient reason for bringing such ac- 

superior courts the plaintiff shall re- tion in such superior court, or unless the 

cover a sum not exceeding 20Z., if the court or a judge at chambers shall by 

action is founded on contract, or 10. rule or order allow such costs." 

if founded on tort, whether by verdict, (2) Law Rep. 2 C. P. 314. 

judgment by default, or on demurrer (3) U B. & S. 333; 34 L. J. (Q.K) 

or otherwise, he shall not be entitled 161. 

VOL. VI. T 3 



202 COURT OF EXCHEQUER. [L. R. 

1871 arbitrator had a discretionary power over the costs of the reference 
FOBBHAW an d award, and he has directed the defendant to pay them. The 

* taxing-officer has declined to tax them, and this application is 
DE WETTE. 

made for the purpose of compelling him to do so, and of thus 
enabling the plaintiff to get the costs awarded to him. It is 
contended, however, that a less sum having been recovered in the 
cause than would entitle the plaintiff to costs under the County 
Court Act, 1867, s. 5, the arbitrator exceeded his authority, and 
that he had no power to direct the costs of the reference and 
award to be paid by the defendant, and two cases have been cited 
in support of that contention. They are both, in my opinion, 
clearly distinguishable. The first was Cowett v. Amman Colliery 
Co. (1), and there it was held that the costs of the cause were not 
recoverable, less than 20Z. having been recovered in an action of 
contract. No question was raised there as to the costs of the 
reference and award, whilst here the only question is as to those 
costs. All that the case decided was that, as far as the cause was 
concerned, no award could do away with or get rid of the provisions 
of the County Court Act then in force. As to the second case that 
of Moore v. Watson (2) that was a compulsory reference of a 
cause under the Common Law Procedure Act, 1854 ; and the Court 
held, that though the order of reference gave the arbitrator a dis- 
cretionary power over the costs of the reference and award, and 
though he exercised it in favour of the plaintiff, the plaintiff was, 
nevertheless, not entitled to costs, having recovered less than 201. 
But the reason of that decision is obvious. In a compulsory re- 
ference of a cause, the costs of the reference and award are part 
and parcel of the costs of the cause, and the event of the cause, if 
a less amount is recovered than the County Court Acts contem- 
plate, must disentitle the plaintiff to the whole costs. But in the 
case before us the reference was by consent, and the costs of the 
reference and award are provided for by the express agreement of 
the parties, and they can, therefore, be severed from the costs of 
the cause. The arbitrator, having this power given him over the 
costs of the reference and award, has directed the defendant to pay 
them ; and I think he had power to do so, and that his award ought 
to be carried into effect. 
(1) 6 B. & S. 333 ; 34 L. J. (Q.B.) 161. (2) Law Rep. 2 C. P. 314. 



VOL. VI.] 



EASTER TERM, XXXIV VICT. 



203 



CHANNELL, B. I am entirely of the same opinion. The two 
cases cited are distinguishable on the grounds stated by the Lord 
Chief Baron. 

PIGOTT, B. I also think the rule should be made absolute, 
though the observations of Willes, J., in Moore v. Watson (1), have 
caused me to feel some doubt on the matter. Still I see nothing 
in the language of the County Court Act, 1867, s. 5, to deprive 
the plaintiff of the costs here awarded to him. The words of the 
section are "costs of suit," and do not necessarily include the costs 
of a reference and award. As to these, I think the parties were 
entitled to make any agreement they pleased. Here they agreed 
that these costs should be in the arbitrator's discretion, and he has 
decided that the plaintiff ought to have them. In my opinion he 
had power to do so, although the amount recovered would not 
entitle the plaintiff to the costs of the cause. 

Rule absolute. 
i Attorneys for plaintiff: Cunli/e & Beaumont. 

Attorneys for defendant : Emmet, Watson, & Emmet. 



1871 



FORSHAW 
V. 

DE WETTE. 



GLADSTONE AXD AXOTHKB u. TADWICK. 

Sheriff Seizure " Actual Seizure" under a Fi. Fa. Bill of Sale "buna fide and 
for Valuable Consideration Notice of Writ having been delivered to the Sheriff 
to be executed 19 & 20 Viet. c. 97, -s. 1. 

An execution-debtor was possessed of a mansion-house and grounds, and also of 
a farm, which, with the exception of two outlying fields, adjoined the grounds and 
formed part of one block with them. The farm was in the debtor's occupation, 
although the accounts were kept distinct. The farmhouse was a mile distant 
from the mansion-house in a direct line. On the 19th of May, a writ of fi. fa. was 
executed at the mansion-house by the under-sheriff, who informed the persons in 
charge there, including the steward of the estate, that all the goods on the estate 
were seized ; and a man was left in possession. No act of seizure was done at the 
farmhouse or upon the farm on that day, the under-sheriff intending what he had 
done to be a seizure of the whole ; but on the following day a man was put in 
possession at the farmhouse. The goods on the farm were claimed by assignees 
under a bill of sale, made for an antecedent debt, and for the purpose of giving it a 
preference over the execution, and which was executed on the evening of the 19th, 
after the seizure at the mansion-house was completed. At the time of the execu- 



(1) Law Rep. 2 C. P., at p. 317. 
T 2 



204 COUET OF EXCHEQUER. [L. R. 

1871 tion of the bill of sale, it was known to the solicitor of the assignees that the judg- 
ment creditor had threatened to seize, and that a writ of fi. fa. on the same judg- 



ment had been executed in another county ; and it was expected by him, but not 
PADWICK. known, that a writ had been delivered to the sheriff of the county in which the 
goods lay : 

Held, that what was done on the 19th of May amounted to an " actual seizure " 
of the goods on the farm and at the farmhouse, within the meaning of 19 & 20 
Viet. c. 97, s. 1. 

Semble, that the bill of sale was bona fide and for a valuable consideration, 
within the same section. 

By Bramwell, B., that there was no notice to the assignees of the bill of sale 
that the writ in question had been delivered to the sheriff to be executed within 
the proviso in the same section. 

Quaere, whether notice of the writ issued in another coixnty was notice within 
the meaning of the proviso. 

SPECIAL CASE stated upon an interpleader issue, raising the ques- 
tions whether, within 19 & 20 Viet. c. 97, s. 1 (1), a bill of sale 
made to the plaintiffs by the Duke of Newcastle of the live and 
dead stock at Hardwick Farm, was, as against the defendant, an 
execution-creditor of the Duke, bona fide, and for valuable consi- 
deration ; whether, within the same section, there was an actual 
seizure, under the defendant's writ, of the chattels comprised in 
the bill of sale before its execution ; and whether, assuming that 
there was no actual seizure, the plaintiffs had, at the time of the 
making of the bill of sale, notice within the proviso at the end of 
the section. 

The defendant, having recovered judgment against the Duke of 
Newcastle for 95,000?., issued, on the 15th of May, 1869, a writ of 
fi. fa. to the Sheriff of Nottinghamshire, under which a warrant was 
sent down to the under-sheriff on the 18th of May. 

At 3.45 P.M. on the 19th of May, the under-sheriff and the 
sheriff's officer arrived at Clumber, the seat of the Duke in Not- 
tinghamshire. The house, offices, and grounds of Clumber are 
surrounded by the fields of Hardwick Farm (also called the Home 

(1) 19 & 20 Viet. c. 97, s. 1, enacts of such writ, provided such person 

that : " No writ of fieri facias or other had not, at the time when he acquired 

writ of execution, and no writ of attach- such title, notice that such writ, or 

ment against the goods of a debtor, shall any other writ by virtue of which the 

prejudice the title to such goods ac- goods of such owner might be seized or 

quired by any person bona fide and for attached, had been delivered to and 

valuable consideration, before the actunl remained unexecuted in the hands of 

seizure or attachment thereof by virtue the sheriff, under-sheriff, or coroner." 



VOL. VL] EASTER TERM, XXXIV VICT. 205 

Farm) and by woods and rough ground the whole, except two fields, 1871 
forming one block about two-and-a-half miles square. The fields of GLADSTONE" 
the farm lie dispersed over the block, and are in parts separated 
by patches of wood ; the whole extent of the farm is 1500 acres. 
The farmhouse is, in a straight line, about one mile distant from 
the mansion-house, by the road nearly a mile and three-quarters. 
Of the two fields lying outside the block, one is in a different parish, 
but lies near to the farm the other is three miles distant ; but 
both were used as part of the farm, and were included in the rent 
mentioned below. Subject to a term, under which the trustees of 
his settlement were in possession of the woods, the Duke was 
tenant for life of the estates, and was in possession of both Clum- 
ber and Hardwick ; but for some time the accounts had been kept 
separate ; a fixed rent was paid by the Duke to his agent for Hard- 
wick, which was treated as part of the outgoings of the farm, and 
was accounted for by the agent as part of the rental of the estate ; 
and similarly Hardwick was credited with farm produce and 
farm labour supplied by Hardwick to Clumber, or to the woods in 
the possession of the trustees. The farm was managed by a bailiff, 
resident at Hardwick, under the superintendence of the Duke's 
agont, who had also the superintendence of Clumber, and was the 
Duke's steward as well as agent. 

At the time of the arrival of the under-sheriff and sheriff's officer 
at Clumber, the Duke was absent, and there was no steward, agent, or 
upper-servant there, except the housekeeper, and Smith, the groom 
in charge of the racing and breeding establishment, who lived in a 
house within the curtilage. The under-sheriff produced the warrant 
to Smith, and after inquiring the particulars of the stock upon the 
farm, told him that he must consider everything as seized under 
the execution, except the racehorses, which had been already 
assigned to the execution-creditor, and asked him to tell the 
sheriff's officer if he saw any attempt to remove anything off the 
estate, which Smith promised to do. He then told the house- 
keeper of the execution, that all the effects of the Duke were taken 
under it, and that she must not suffer anything to be removed. He 
then drove towards the farmhouse, but meeting with rain, and 
expecting the arrival at Clumber of the Duke's steward, he returned 
without reaching it, and without doing anything there to indicate 



206 COUKT OF EXCHEQUER. [L.B. 

1871 a seizure of the stock occupying the fields through which he passed, 

GLADSTONE because he considered what he had already done to be a seizure of 

p * all the stock and goods on the whole estate. On returning to the 

house, he found the steward arrived, and informed him that he had 

seized all the effects of the Duke under the warrant. The steward 

gave him a notice from the trustees, claiming certain articles as 

heirlooms; and in reply he stated that the farming-stock, and 

horses, and everything belonging to the Duke, had been seized 

under the warrant, which he produced. He then left a man in 

possession and went away. This took place at half-past five o'clock. 

On the following day the sheriff's officer went over to the farm, 
and began an inventory of the stock and effects, and placed a man 
in possession there. On his arrival there he found notices posted, 
claiming the goods under the bill of sale to the plaintiffs. 

The bill of sale to the plaintiffs was executed by the Duke 
at ten minutes to six on the evening of the 19th, and was made 
under the following circumstances. The Duke had purchased of 
the plaintiffs, as trustees of the residuary personal estate of the late 
Duke, stock upon the farm which formed part of the residue, for the 
sum of 8000, of which 6000 remained still unpaid, but secured by 
his bond. On the 17th of May it was arranged between the 
Duke's solicitor and the solicitor of the trustees, that a bill of sale of 
the live and dead stock at Hardwick should be executed by the 
Duke to the plaintiffs to secure this debt ; and the bill of sale was, 
in fact, executed by the Duke at the time above-mentioned. The 
object of the arrangement was to defeat the defendant's execution, 
and to give a preference to the trustees. It was made by the solicitor 
to the trustees without any previous communication with them, 
but in the exercise of his general authority, and was afterwards 
approved by them. Before its execution, it was known to botli the 
solicitors that the defendant threatened to seize under the execution 
unless 15,000 were paid by the 18th ; and it was also known to them 
that on the 18th of May the defendant had, under a writ to the 
Sheriff of Middlesex, issued on the 15th of May upon the same 
judgment, seized thej goods of the Duke in his house in London. 
And they expected, though they did not know, that a writ had 
been delivered to the Sheriff of Nottinghamshire ; and it was in 
that expectation that the solicitor to the trustees prepared and sent 



VOL. VI.] EASTER TERM, XXXIV VICT. 207 

down the notices, which were served on the under-sheriff at 1871 
Clumber, and were posted at Hardwick. 



It was to be taken that the trustees did, on the evening of the v - 
-in i PAIMVJCK. 

19th, take possession, by the Dukes steward as their agent, of the 

live and dead stock at Hardwick, unless possession had already 
been taken by the under-sheriff within the meaning of the statute. 
The question for the opinion of the Court, who were to draw 
inferences of fact, was whether, as regards the goods on Hardwick 
Farm, the execution or the bill of sale was entitled to priority. 

Sir J. D. Coleridge, S.G. (C. S. Bowen with him), for the plain- 
tiffs. The case turns upon the construction of 19 & 20 Viet. c. 97, 
s. 1, within the protection of which the plaintiffs claim to be. 
That they are holders bona fide, and for a valuable consideration 
under the bill of sale, is clear ; they are therefore protected, unless 
there was an actual seizure previous to the execution of the bill 
of sale, or unless they are within the proviso at the end of the 
section, as having received notice that the writ had been delivered 
to the sheriff to be executed, and remained in his hands unexecuted. 
They clearly had no such notice. They had notice of the writ 
issued in Middlesex, but that writ was not one which bound these 
goods, or under which the levy took place ; it is not therefore the 
writ referred to by the statute. Of this writ they had no notice 
that it " had been delivered to the sheriff to be executed ;" for 
notice that it was about to be put in execution was not notice of the 
fact that it was in the course of execution ; and not being notice at 
the time, it could not afterwards become so by the event. Various 
circumstances might occur to prevent the creditor from carrying 
out his threat, and the payment of the sum of 15,000/. was one 
such circumstance. Notice of an act of bankruptcy to deprive an 
execution-creditor of his protection must be precise and certain, not 
merely constructive and conditional : Hocking v. Acraman. (1) The 
question therefore is, whether there had been an " actual seizure." 
This is mainly a question of fact, but it is subject to certain general 
principles. The leading principle is, that seizure imports taking 
actual control of the thing seized. This is forcibly illustrated by 
the Roman law as to delivery, which required that the thing trans- 

(1) 12 M. & W. 170. 



208 COURT OF EXCHEQUER. [L. R. 

1871 ferred should be put in the physical power of the transferee : Dig. 

' GLADSTONE lib - 41 > tit - 2, 1. 1, 21 ; Pothier Traite de Propriete ; Pt. i. c. 2, 

* s. 4, art. 1, Savigny on Poss. (trans, by Sir E. Perry), pp. 142, 157, 

Jr A DTVICK 

170, 173. Although in a contract of sale the English law does not 
require delivery to perfect it, an illustration of the same principle 
may be found in the case of acceptance and receipt under the Sta- 
tute of Frauds, which does not take place unless there is either 
delivery, or some act "tantamount" to it: Chaplin v. Rogers. (1) 
If so much is required in a transaction which is by consent, at least 
as much must be necessary where the whole is the act of one 
side only, done against the will of the other. And in the case 
of a sheriffs levy a similar measure has been applied : Nash v. 
DicJcenson (2), and Blades v. Arundale. (3) The words of the statute 
are " actual seizure," which mean more than that merely construc- 
tive seizure which alone took place here. That the word " actual " 
is used with a design, is shewn by the proviso, which allows the 
validity of a bill of sale taken after notice of delivery of the writ 
for execution, provided it no longer remains unexecuted : that is, 
after the sheriff has seized what he considers enough, the execution- 
debtor is to be at liberty to deal freely with the rest of his property. 
But the sheriff's duty is to seize only so much as is necessary : 
Gawler v. Chaplin (4) ; he is therefore to discriminate what he 
does seize from what he does not, and only what he clearly indi- 
cates to have been taken by him can be said to be " actually 
seized." It is not necessary to say what exact mode should be 
adopted ; probably any goods on the spot, and already inventoried, 
would have been seized, but a mere formal taking of possession at 
Clumber cannot amount to a seizure at Hard wick, more than a 
mile off, and held as a separate possession, and in fields separated 
by intervening property of other owners ; this is only such a formal 
and fictitious possession as is referred to in the Bill of Sale Act 
(17 & 18 Viet. c. 36), s. 7, and is there treated as a nullity. The 
cases of Cole v. Davies (5), and Swann v. Falmoutli (6), are not 
in point ; a seizure in the one case in a house, in the other on a 
wharf, was held to be a seizure of all the goods in it. But there is 

(1) 1 East, 192. (4) 2 Ex. 503 ; 18 L. J. (Ex.) 42. 

(2) Law Rep. 2 C. P. 252. (5) 1 Ld. Raym. 724. 

(3) 1 M. & S. 711. (6) 8 B. & C. 456. 



VOL. VI] EASTER TERM, XXXIV VICT. 209 

a broad distinction between goods in a house or wharf (1), and 1371 
goods scattered over open fields, and even within the protection GLADSTONE 

(as here) of a different house. . r 

' PAUWICK. 

Denman, Q.C. (F. H. Lewis with him), for the defendant, was 
not called upon. 

MARTIN, B. We are both of opinion that the defendant is 
entitled to our judgment. The case is one of the greatest impor- 
tance to sheriffs, for, if the plaintiffs succeeded, the sheriff would 
be liable to an action by the execution-creditor, in which the 
measure of damages would be the value of the goods which he has 
failed to seize. 

The case turns upon the question, whether what has been done 
here was an " actual seizure," within the 1st section of 19 & 20 
Viet. c. 97. Two other questions have been raised: the first, 
whether this bill of sale was " bona fide and for valuable considera- 
tion," within the meaning of the statute. We are not obliged to 
decide this question ; but I have no doubt whatever that it is per- 
fectly competent for a debtor to execute a bill of sale in order to 
favour a particular creditor, and give him a priority over an exe- 
cution which is expected to be levied, and that, apart from the 
bankruptcy laws, there is nothing fraudulent in such a transaction. 
With respect to the second of these questions, which turns upon 
the proviso of the section relating to notice, I should, if the matter 
should hereafter call for a decision, be prepared to entertain the 
question whether, ii rotice were given that execution would imme- 
diately issue, and that notice were followed up by placing the writ 
in the hands of the sheriff before the accruing of the title under a 
bill of sale, the case would not fall within the proviso I have 
referred to. At present I say nothing upon it. 

I rest my judgment entirely on the fact that there was here an 
" actual seizure " under the writ. I am clearly of opinion that 
Clumber and the farm were one thing there was one possession 
of them ; and what was done in one part was the same as if it had 
been done in the whole. It is not because the accounts of the two 
were kept distinct, for the purpose of ascertaining whether the 

(1) Sec Savigny on Possession, p. 160. 



210 COUET OF EXCHEQUER. [L.R 

occupation of the farm was a profitable one, that they are really two 

GLADSTONE distinct things. The Duke of Newcastle was therefore possessed 

PADWICK. of the mansion-house, offices, and farm as of one whole thing ; and, 

as was held in Swann v. Falmouth (1), and Cole v. Davies (2), the 

seizure was effectual over the whole extent of the property. 

The law as to writs of execution is very clearly laid down at 
pp. 219 f. and g. of 1 Williams' Saunders, in the note- to the case of 
Wheatley v. Lane; and it appears from this note that the common 
law attached but little importance to the possession of a chattel ; for 
notwithstanding that a chattel was, so far as any one knew or could 
tell, in the possession of a judgment-debtor, yet on the signing 
of judgment andjthe teste of the writ of execution a matter of 
which the public in general were invincibly ignorant the goods 
of the debtor were bound as against every one ; they were so far 
bound that it was not competent to the debtor to give a title to 
them except by sale in market overt, which gives a title against all 
the world. Similarly, a bill of sale executed in Cornwall would 
pass at once the property in things situated in Northumberland, 
and the assignee acquired a title without any change of possession 
or any notice to other persons. Further, the rule prevailed that 
property draws possession with it; and though, for technical 
reasons, the assignee of chattels might not be able to maintain 
trespass in respect of goods of which he had never acquired actual 
possession, yet he might maintain trover; and to maintain this 
action, some degree of possession is necessary, as is shewn by the 
old form of declaration. The effect of 29 Car. 2, c. 3, s. 16, was 
that the writ did not bind the goods till it was delivered to the 
sheriff to be executed; but this also was an act of which the 
public knew nothing. The object of the statute now in question 
(19 & 20 Viet. c. 97, s. 1) was to remedy this inconvenience, and it 
accordingly provides that the writ shall not bind until the goods 
are actually seized under it. Whether such a seizure has been 
made, is a question of fact ; and I am of opinion that there was in 
this case an actual seizure of the goods in question, and that, if a 
jury were to find the contrary, their verdict would be set aside as 
contrary to the evidence. [The learned judge then reviewed the 
statements in the special case, and proceeded.] I have no doubt 
(1) 8 B. & C. 456. (2) 1 Ld. Rayrn. 724. 



VOL. VI.] EASTEK TERM, XXXIV VICT. 211 

that this amounted to an actual seizure. With respect to the Bills 1871 

of Sale Act (17 & 18 Viet. c. 36), s. 7, which speaks of " formal GLADSTONE 

possession " being taken, I think those words do not refer to any 

such state of facts as existed here, but that they are illustrated by 

the case of Blades v. Arundale (1), where the bailiff merely locked 

the warrant up in a table-drawer and went away. In such a case, 

I think, no actual seizure would be made ; but where the execution 

of the writ is carried out, as has been done here, I have no doubt 

that it is effectual. 

BRAMWELL, B. I am of the same opinion. In the first place, 
I agree that the bill of sale was good. There is no reason why a 
creditor should not help himself, or why, as against one creditor, a 
debtor should not favour another. I am also of opinion that there 
was no notice of this writ within 19 & 20 Viet. c. 97, s. 1. The 
only notice that was given with respect to it was, not a notice that 
the writ " had been delivered " to the sheriff, but only that it was 
probable it would be. A notice of something certain and inevit- 
able as of the rising of the tide though given beforehand, 
might, perhaps, after the event be treated as notice of the fact ; 
but this cannot be said with respect to what is merely probable. 
Whether notice of the writ delivered to the Sheriff of Middlesex 
was a notice within the section it is unnecessary to say. 

The main question then arises, which is, whether there was here 
an " actual seizure " before the execution of the bill of sale. To 
construe the statute, we must consider the inconvenience it was 
intended to remedy, which was the hardship caused by the existing 
law to boiia fide buyers of goods from execution-debtors, against 
whom a writ of execution had issued, the writ binding the goods 
upon its delivery to the sheriff, although, by reason of the goods 
not having been seized, the buyer had no means of knowing it. 
The present statute substitutes " actual seizure " of the goods for 
delivery of the writ to the sheriff, as that which is to bind the 
goods as against purchasers bona fide and for valuable considera- 
tion ; but as no such fiction as constructive seizure was resorted to 
before the Act, the word " actual " is of no peculiar force, ami 
" actual seizure " means no more than " seizure." 

(1) 1 M. & S. 711. 



212 COUKT OF EXCHEQUER [L. E. 

1871 The question then is : Had the sheriff seized before the execu- 

GLADSTONE tion of the bill of sale ? And in order to see what in effect was 
p * done up to five o'clock, we are entitled to look at the account of 
the subsequent proceedings in order to see the intention of what 
was done before. 1 It is admitted, and it is clear, that it is not 
necessary for the sheriff to lay his hand on a single article. The 
difficulty, then, is to say why what was done was not sufficient, or 
what more ought to have been done than was done. It is certain 
that, if the Duke of Newcastle had himself been there, he could 
not lawfully have removed any of the stock from the farm ; and if 
he had done so for his own purposes, he would have been in danger 
of an indictment for larceny. It was suggested that more might 
have been done ; but I am of opinion that, where property 
is all one holding, as it was here, if the sheriff goes and makes 
known at the mansion-house or dwelling-house of the occupier 
that he is come to seize, and does, so far as words and intention 
can go, seize all the goods on that holding, he has done enough. 
If, indeed, the Duke of Newcastle had occupied another house 
in a different parish, I should doubt whether what was done at 
Clumber would have amounted to a seizure of goods there ; I 
think it would not, but it is unnecessary to decide the point. 
Here it was all one holding; and when the sheriff, being pre- 
sent at the house with the writ of execution, says, " I seize every- 
thing on this holding," enough is done to constitute a seizure of 
the whole. 

It is said that, if this is so, the object of the statute will be 
defeated ; but that is not so. Suppose the Duke of Newcastle, 
not knowing what had taken place at Clumber, had sold part of 
the stock on Hardvvick Farm, and the buyer complained of the 
hardship of having his purchase overridden by the execution- 
creditor, he would be open to the answer, that he trusted the Duke 
personally. If, on the other hand, he had assumed the cattle to be 
the property of the Duke because he was the occupier of Clumber, 
the answer would be that, if he had gone to Clumber, he would 
have found it in the occupation of the execution-creditor. And, 
further, if everything had been done which has been suggested as 
necessary to a seizure, the same hardship might have happened, 
unless the whole were kept under lock-and-key. The case of Cole 



VOL. VI.] EASTER TERM, XXXIV VICT. 213 

v. Davies (1), which lays down that seizure of a part in the name 1871 
of the whole is seizure of the whole, is, I think, good law. GLADSTONE 

It was argued that tho words of the proviso in the latter part of P AI) WICK, 
the section shew that " actual seizure " has an extended meaning, 
and that, after the writ has been executed, and therefore when it 
no longer " remains unexecuted," a good title can be made to goods 
not actually seized, notwithstanding notice of the writ. But my 
understanding of this part of the section is, that it is not enough, 
to prevent a stranger from acquiring title to the goods, to know 
of a writ having been issued ; but that, if there be notice that it is 
delivered to the sheriff to be executed, though not executed in 
fact, and it is afterwards executed, that is enough to prevent a 
stranger from acquiring title to the goods as against the execution- 
creditor, for it is enough to give him warning not to buy. 

On these grounds, therefore, I am of opinion that the defendant 
is entitled to our judgment. 

Judgment for the defendant. 

Attorneys for plaintiffs : Duncan & Murton. 
Attorneys for defendant : Robson & Tidy. 



STEVENS v. CHAPMAN. 

Costs Cause and all Matters in Difference referred Costs of Cause to abide 
11 Event of Reference" Count ij Courts Act, 18G7, s. 5. 

A cause and all matters in difference were referred, and it was ordered that 
" the costs of the cause should abide the event of the reference, and that the costs 
of the reference and award should be in the discretion of the arbitrator." As to 
the cause, the arbitrator awarded a verdict for the plaintiff for 259?. Is. ; as to the 
other matters in difference, he found that 242?. 13s. 10c?. was due to the defendant 
from the plaintiff, and directed that this sum should be deducted from the damages 
and costs recoverable in the action, and that the defendant should pay the plaintiff 
the balance : 

Held, that although, the arbitrator had decided something in favour of each party, 
and although the difference between the two sums awarded did not exceed 20, 
the " event of the reference " was such as to entitle the plaintiff to his costs of the 
cause, and he was not deprived of them by the County Courts Act, iy67, s. o. 

THIS was an action on a promissory note for 22ftf. IGs. 6d., 
payable on demand. The defendant traversed the making 
of the note, and pleaded failure of consideration and a set-off. 
(1) 1 Ld. Raym. 72J. 



214 CODET OF EXCHEQUER [L. E. 

1871 The cause was entered for trial at the Devon Summer Assizes, 

STEVENS.^ 1870, but the record was withdrawn, and the cause and all matters 

v - in difference referred by judge's order to an arbitrator. The 
CHAPMAN. _ J J < 

submission contained the following clause as to costs : 

" It is hereby agreed that the costs of the cause shall abide the 
event of the reference, and that the costs of the reference and 
award shall be in the discretion of the arbitrator." 

The arbitrator (who had the same powers as a judge at nisi prius 
to amend and certify) awarded as to the cause in favour of the 
plaintiff on all the issues, and assessed his damages at 259?. Is. ; 
and as to the other matters in difference he awarded that there 
was due from the plaintiff to the defendant upon a balance of cer- 
tain farming accounts between them 242?. 13s. lOd. He further 
directed that the last-mentioned sum should be allowed out of 
and deducted from the amount of damages and costs recoverable 
by the plaintiff in the action, and that the defendant should pay 
the plaintiff the balance of such damages and costs accordingly ; 
and he ordered each party to bear his own costs of the reference, 
and to pay one-half the costs of the award. 

The Master having declined to tax the plaintiff his costs of the 
cause, Hannen, J., made an order directing him to do so. 

A. diaries moved for a rule calling on the plaintiff' to shew 
cause why the order should not be rescinded. The clause as to 
costs is not in the usual form, the parties having agreed that 
they shall abide the "event of the reference" The question, 
therefore, is, whether the general event is such as to entitle the 
plaintiff to the costs of the cause. He is not entitled, inasmuch 
as the arbitrator did not decide everything referred in his favour : 
Boodle v. Davies (1) ; and the fact that in the result a balance 
remains to be paid over to the plaintiff makes no difference : 
GribUe v. Buchanan (2) ; Reynolds v. Harris (3). Again, the event 
here is a liability to pay the difference between 259?. Is. and 
242?. 13s. lOd. ; the arbitrator's direction that the latter sum should 
be deducted from the damages and costs of the action being 
founded on the erroneous impression that the costs of the action 

(1) 3 A. & E. 200. (2) 18 C. B. 691 ; 26 L. J. (C.P.) 24. 

(3) 3 C. B. (N.S.) 267 ; 28 L. J. (C.P.) 26. 



VOL. VI.] EASTEK TERM, XXXIV VICT. 215 

could be recovered by the plaintiff, and amounting to no more 1871 
than a direction that the 242?. 13s. lOd. should be deducted from STEVENS 
the damages : Moore v. Watson (1). The plaintiff, therefore, has ' 

recovered less than 207., and having received no certificate is de- 
prived of costs under the County Courts Act, 18G7 (30 & 31 Viet. 
c. 142), s. 5. The parties in making their bargain as to the event 
of the reference governing the costs must be taken to have done 
so having regard to the law upon the subject. The County Courts 
Act applies to references by consent : Cowell v. Amman Colliery 

Co. (2) ; Smith v. Edge. (3) 

Cur. adv. vult. 

Later in the day the following judgments were delivered : 

KELLY, C.B. I think there should be no rule. By the order 
of reference the costs of the cause are directed to abide the " event 
of the reference," and on looking at the award we find that the 
arbitrator has found all the issues in the cause for the plaintiff, 
and directed a verdict for 259Z. Is., and in my opinion the words used 
as to the costs must be taken to be equivalent to " event of the 
reference as far as the action is concerned." Upon that construc- 
tion the plaintiff is clearly entitled to his costs. We were pressed 
during the argument with the two cases of Boodle v. Davies (4), 
and Gribble v. Buchanan (5). ^^ 7 ith regard to the former, the 
arbitrator did not award for the plaintiff expressly in the cause, 
but although he did find that the trespasses complained of had 
some of them been committed, he simply awarded that " the action 
should cease." So that he cannot be said to have decided the 
cause there in favour of the plaintiff. As to the second case, the 
costs of the reference, and those only, were to abide the event of 
the award, the costs of the action being otherwise provided for. 
The most, therefore, that the decision amounts to is, that where the 
costs of the reference are to abide the event of the reference, and 
the reference is partially in favour of one and partially of the 
other, each shall bear his own costs, though there be a substantial 
balance payable by one to the other. The decision, therefore, is 

(1) Law Rep. 2 C. P. 314. (3)J2 H & C. 659 ; 33 L. J. (Ex.) 0. 

(2) 6 B. & S. 333 ; 34 L. J. (Q.B.) (4) 3 A. & E. 200. 

161. (5) 18 C. B. 691 ; 2G L. J. (C.P.) 24. 



216 COUET OF EXCHEQUER [L. B- 

1871 not in point, and I do not think that we should be governed in 
STEVENS this case by it. The rule must accordingly be refused. 



V. 

CHAPMAX. 



MARTIN, B. I am of the same opinion. I have no doubt that 
the intention of the parties was that the plaintiff, if successful in 
the action, should have the costs of the action, and I think the 
words used express that intention. They appear to me to mean 
that the costs of the cause shall abide the event of the reference 
of the cause. I may add, that from the terms of his award this- 
was clearly the construction which the arbitrator put upon them, 
and it seems to me to be the true construction. 

BRAMWELL, B. I also think that this rule should be refused. It 
is contended that this reference has had no such "event" as to en- 
title the plaintiff to his costs of the caiise, which are to follow the 
event of the reference, because the arbitrator has not decided every- 
thing referred to him in favour of one party. I do not assent to this 
view of the matter. It does not seem to me sound in principle, 
and none of the authorities cited decide the point. I think the 
true construction of the clause, which is not in the ordinary form, 
is this : that the costs are not to go as the cause is determined, but 
as the reference is determined, and that if the defendant could 
overtop the plaintiff's claim in the cause he was to have the costs,, 
but that if he fell short of it the plaintiff was to have them. On 
the construction contended for, the plaintiff would be placed in a 
singular position, for he would run the risk of losing the costs of 
the cause, in which we may assume he had good reason to 
believe he should be successful, in case the arbitrator found any- 
thing, however small, in favour of the defendant in respect of the 
other matters in difference. That certainly cannot have been his- 
real intention in consenting to the reference, and I do not think 
the words used compel us to a construction which would end in 
such a result. Then as to the balance between the amount re- 
covered in the cause and that payable to the defendant in the 
reference being less than 20Z., I do not think it material. The 
plaintiff, who has made this special arrangement as to his costs 
cannot be said to " recover " the balance within the meaning of 
the County Courts Act, 1867, s. 5. If the record were made up,. 



VOL. VI.] 



EASTER TERM, XXXIV VICT. 



217 



judgment would, I presume, be signed in the action for the whole 
amount of the verdict awarded. 

CLEASBY, B. I am of the same opinion. None of the cases 
cited are precisely in point, though Gribble v. Buchanan (1) closely 
resembles this case. But there the costs of the cause were ordered 
to follow the event of the cause, so that the only question which 
arose was as to the costs of the reference, and whether, when they 
were to abide the event, either party could recover them, unless 
everything was decided in his favour. Here the costs of the cause 
are to abide the event of the reference, and I think that " event " 
has been, on the true construction of the submission, such as to 
entitle the plaintiff to the costs of the cause. 

Rule refused. 

Attorneys for defendant : Coode, Kingdon, & Cotton. 



1871 

STEVENS 
v. 

CHAl'MAX. 



CARSTAIRS AND ANOTHER v. TAYLOR. 

Landlord and Tenant Occupiers of Upper and Lower Floors Collection 

of Water. 

The plaintiffs hired of the defendant the ground-floor of a warehouse, the upper 
part of which was occupied by the defendant himself. The water from the roof 
was collected by gutters into a box, from which it was discharged by a pipe into 
the drains. A hole was made in the box by a rat, through which the water 
entered the warehouse and wetted the plaintiffs' goods. The defendant had used 
reasonable care in examining and seeing to the security of the gutters and the 
box. In an action by the plaintiffs against the defendant for the damage so 
caused : 

Held, that the defendant was not liable, either on the ground of an implied con- 
tract, or on the ground that he had brought the water to the place from which it 
entered the warehouse. 

ACTION tried before Martin, B., at the Liverpool Spring Assizes, 
1871. On the 4th and 5th counts (2) the plaintiffs were nonsuited, 

(1) 18 C. B. 69 L ; 2G L. J. (C.P.) 24. 



April 20. 



(2) The 4th and 5th counts, and the 
pleas to them, were as follows : 

4th count : " That the defendant was 
possessed of and occupied a warehouse, 

VOL. VI. 



and the plaintiffs became and were 
tenants to the defendant of the ground- 
floor of the warehouse, upon the terms 
(amongst others) that the defendant 
U 3 



218 COUET OF EXCHEQUER. [L. E. 

1871 leave being reserved to them to move to enter a verdict on those- 
CABSTAIRS~~ counts for 90?., upon the following facts : 

TAYLOR ^ ie P^ a i n *^ s W re d of the defendant, upon no special terms as to 
repairs, the ground-floor of a warehouse at Liverpool, for the 
purpose of storing rice. The defendant himself occupied the upper 
floor, where he stored cotton. The water from the roof was collected 
in gutters, which terminated in a wooden box resting on the wall, 
and partly projecting over it on the inside ; thence the water was dis- 
charged by a pipe into the drain. The gutters and box were 
examined from time to time by a person employed by the defendant,, 
and they had been, in fact, examined and found secure on the 18th 
of April ; but between that day and the 22nd a rat gnawed a hole in 
that part of the box which projected on the inside of the wall ; on the 
latter day a heavy storm occurred, and the collected rain-water passed 
through the hole into the upper floor of the warehouse, and thence 
reached the ground-floor and injured the plaintiffs' rice. The gutters- 
and box were constructed in the mode ordinarily used in Liverpool. 

April 20. Benjamin moved in pursuance of the leave reserved. 
The defendant is liable on the ground of contract ; he has implied ly 
undertaken that the warehouse let to the plaintiffs shall be suitable 
for the purpose for which it is let, which cannot be said to be true 
if it is accessible to water or to rats : Francis v. CocJcreU (1). 



should and would at all times during the ground-floor of a warehouse, and 1 
the tenancy keep the roof of the ware- the defendant was possessed of and oc- 
house in good and tenantable repair, cupied all the upper floors of the ware- 
order, and condition ; that the defendant house ; and the defendant so negligently 
was in the possession and occupation of and improperly used and managed the 
the whole of the warehouse, except the said upper floors that large quantities 
ground-floor, yet the defendant did not of water, which the defendant had 
during the tenancy keep the roof in suffered to collect in and upon the said 
good and tenantable repair, order, and upper floors, penetrated and flowed from 
condition, Ly reason whereof large the upper floors into the ground-floor 
quantities of water penetrated the roof so occupied by the plaintiffs, and wetted,, 
and the upper floors, and flowed down damaged, and destroyed goods of the 
into the ground-floor, occupied by the plaintiffs being in the said ground-floor." 
plaintiffs, and wetted, damaged, and Pleas : 8 to the 4th count, denial of 
destroyed goods of the plaintiffs, being the tenancy on the terms alleged ; 9 to 
in the said ground-floor." the same, denial of the breach ; 10 to 

5th count : " That before, &c., the the 5th count, not guilty, 
plain tiffs were possessed of and occupied (1) Law Eep. 5 Q. B. 501. 



VOL. VL] EASTER TERM, XXXI V VICT. 219 

[MARTIN, B., referred to the note to Pom/ret v. Ricroft. (1)] 1871 

Independently of contract, and without negligence, he is liable ; (; ARS TAIUS 
for by what he has done he has collected the water from the roof , * 
in a particular manner, and has poured it upon the plaintiffs' 
premises. He is, therefore, within the rule established in Chauntler 
v. Robinson (2) and Rylands v. Fletcher, (o) In Bell v. Twenty- 
man (4), the defendant was held liable for an obstruction caused 
in his land, but without his default, to a watercourse which flowed 
on to the plaintiff's hind, although he removed the obstruction 
within a reasonable time after notice. The observations of the 
Court, made in their considered judgment (at p. 774), are strongly 
in favour of the plaintiffs. But this case is stronger; for here the 
defendant "maintained in a defective state" an apparatus which 
by reason of its original imperfect construction in projecting 
inwards, made this accident possible : Alston v. Grant. (5) At 
least the defendant was liable on the ground of negligence ; both 
in having the apparatus so constructed, and in not providing 
against rats : Laveroni v. Drury. (6) 

[MARTIN, B. That case turned entirely on the terms of a bill 
of lading.] 

KELLY, C.B. [After stating the facts the learned Judge con- 
tinued : ] It has been argued that the defendant was liable on the 
.ground either of contract or of a duty imposed by law. It is unne- 
cessary to consider whether, as between landlord and tenant, where 
the landlord is in possession of the upper floor, and the tenant of the 
lower, there is an implied contract by the landlord so to maintain 
the part of the premises in his possession as not to permit damage 
to happen to the tenant through any ordinary causes. Assuming 
that there is such an implied contract, or assuming that, inde- 
pendently of the relation of landlord and tenant, there is a duty 
on the owner and occupier of the upper part of a house so to 
manage and keep it as to prevent the happening to the occupier of 
the lower floor of accidents arising through ordinary causes, the 
plaintiffs would not be entitled to recover. The complete perforni- 

(1) 1 Wins. Sauna. 322, n. (1). (4) 1 Q. B. 7GG. 

(2) 4 Ex. 163. (5) 3 E. & B. 128 ; 23 L. J. (Q.B.) 
{3) Law Rep. 3 H. L. 330. 163. 

(0) 8 Ex. 100; 22 L. J. (Ex.) 2. 



220 COUET OF EXCHEQUEE. [L. E. 

1871 ance of any such contract or duty would not have guarded against 
CAESTAIRS the mischief in question. It is not that the defendant left the roof 
T ** out of repair, or did any act directly occasioning the passage of 
the water ; but the cause of the mischief was, that a rat had 
shortly before the accident eaten its way through the box into 
which the gutters discharged themselves, and made a hole through 
which the water poured into the warehouse. Clearly there is no 
duty on the occupier above, whether he be landlord or only occu- 
pier, to guard against an accident of this nature. It is absurd to 
suppose a duty on him to exclude the possibility of the entrance of 
rats from without. The case of a ship is totally different : it may be 
possible to insure freedom from rats in a vessel ; but it is impossible 
to say with respect to warehouses generally that this can be done. 
The cases relied upon do not approach the proposition contended 
for. Francis v. CocJcrett (1) only establishes that if a person hires 
the use of a thing, there is an implied undertaking, on the part of 
the person who receives the consideration, that the thing shall be 
reasonably fit for the purpose for which he lets it ; and it cannot 
be contended that the premises let to the plaintiffs were not reason- 
ably fit for a warehouse. In Sett v. Twentyman (2) a watercourse 
passed through the land of one person into the land of another, 
and there was a duty on the owner through whose land it passed 
to keep it clear of ordinary obstructions. The course was ob- 
structed by the bricks of a fallen wall ; and the plea averred, not that 
the bricks were removed within a reasonable time of the accident, 
but only that they were removed within a reasonable time of notice. 
Whatever doubt may arise upon some expressions used by the 
Court, the decision is only that the plaintiff was not bound to give 
notice, nor the defendant entitled to wait for it. (3) In Eylands 
v. Fletcher (4), what happened was the necessary and inevitable 

(1) Law Hep. 5 Q. B. 501. mitted duty. In tlie sentence begin- 

(2) 1 Q. B. 766. ning, " If the defendant was liable on 

(3) In Bdl v. Twentyman (1 Q. B. general principles, he was to cleanse 
766) the declaration alleged, and the and keep open the watercourse at all 
plea did not deny, a duty on the defend- events" (p. 774), there appears to be 
ant to cleanse the watercourse ; and the an error in punctuation, and that there- 
judgment of the Court appears to Vie ought to be a comma after the word 
pronounced with reference to this ad- " liable." 

(4) Law Eep. 3 H. L. 330. 



VOL. YIJ EASTER TERM, XXXIV VICT. 

consequence of what the defendant did ; and in his judgment in 1871 
the Exchequer Chamber (1), Blackburn, J., alludes expressly to CAKSTAIK.S 
two exceptions from liability the act of God and vis major. Here TAYLOB. 
the accident was due to vis major, as much as if a thief had broken 
the hole in attempting to enter the house, or a flash of lightning 
or a hurricane had caused the rent. There is, therefore, no 
foundation for the plaintiffs' claim, and the rule must be refused. 

BRAMWELL, B. I am also of opinion that there should be no 
rule. The argument has satisfied me to a considerable extent, but 
its last link fails. I am satisfied that the defendant conducted the 
water to the place where it escaped. He may therefore be said, 
in a sense, to have poured the water on to the plaintiffs' premises, 
which is more accurate than to say that the water escaped, or to 
use any other expression which speaks of the water as though it 
were an active agent. The defendant made a gutter, of such a 
shape, character, and direction, that when the hole in question had 
been made, the water poured into the plaintiffs' premises. Sup- 
pose that an ordinary cistern were pierced by a stranger, and the 
water in consequence escaped, the proximate cause of the accident 
would be the act of the person who pierced the cistern ; the owner 
of the cistern could not be said to have poured the water upon his 
neighbour's premises, unless he afterwards filled the cistern. But 
the defendant has here conducted the water to the place fiom 
which it poured on to the plaintiffs' premises, and he may there- 
fore be said to have poured it on to them. So far the case re- 
sembles Rylands v. Fletcher (2) ; and I am satisfied that it makes 
no matter that the defendant is the plaintiffs' landlord, but that 
the case must be argued as if there hail been a severance of the 
freehold. 

But I am clearly of opinion that there is a material difference 
between the cases. In Hi/lands v. Fletcher (2) the defendant, for 
his own purposes, conducted the water to the place from which 
it got into the plaintiff's premises. Here the conducting of the 
water was no more for the benefit of the defendant than of the 
plaintiffs. If they had been adjacent owners, it would have been 
for the benefit of the adjacent owner that the water from his roof 

(1) Law Rep. 1 Ex. at pp. 279, 280. (2) Law Rep. 3 II. L. 330. 



922 COURT OF EXCHEQUER. [L. B. 

1871 was collected, and the case would have been within the decision 
CABSTAIRS i n Rylands v. Fletcher (1) ; but here the roof was the common 
T *' protection of both, and the collection of the water running from 
it was also for their joint benefit. Similar considerations apply to 
the case of Bell v. Twenty man (2) ; the stream flowing through 
the defendant's land flowed there for his benefit ; it was his 
property, and he could not say that he was doing something for 
the benefit of the plaintiff jointly with himself. But here the 
plaintiffs must be taken to have consented to this collection of the 
water which was for their own benefit, and the defendant can only 
be liable if he was guilty of negligence. 

Is there, then, any evidence of negligence ? I think not. It is 
said there was negligence in so constructing the box that if a hole 
were made in this place the water would enter the warehouse. 
But how can it be said that there was negligence, when it was 
constructed in the way in which such things are ordinarily con- 
structed ? When it is repaired, it will probably be repaired in 
such a way that this accident cannot occur again ; but, as I have 
often said, to treat this as evidence of negligence is to say that 
whenever the world grows wiser it convicts those that came before 
of negligence. It is said that rats can be easily got rid of out of 
a warehouse ; but, assuming it to be so, it is no negligence not to 
take means to get rid of them till there is reason to suppose they 
are there ; and it cannot be said that persons ought to anticipate 
that rats will enter through the roof by gnawing holes in the 
gutters. 

PIGOTT, B. I am of the same opinion. 

MAKTIN, B. I am of the same opinion. A warehouse is built 
with gutters, which carry off the water from the roof into a box, 
from which pipes convey it into the drains ; all this is done in the 
mode ordinarily used in such buildings. The plaintiffs take of 
the defendant the lower storey on no special terms, the defendant 
occupying the upper floor. Now, I think that one who takes a 
floor in a house must be held to take the premises as they are, and 
cannot complain that the house was not constructed differently. 

(1) Law Rep. 3 H. L. 330. (2) 1 Q. B. 766. 



VOL. VI.] EASTER TERM, XXXIV VICT. 22< 

Probably the defendant was under a liability to use reasonable 1871 
care in keeping the roof secure, but he cannot be held responsible <j AB8TA1KS 
for what no reasonable care and vigilance would have provided T * 
against. He cannot certainly be considered guilty of negligence, 
for he caused the roof to be examined periodically, and it was, in 
fact, examined and found secure only four days before the occur- 
rence complained of. He has acted with care, and performed the 
whole of the duty that was cast upon him. He is charged upon 
an implied duty ; and with respect to duties implied by law, the 
true rule is laid down in Parradine v. Jane (1) : " Where the law 
creates a duty or charge, and the party is disabled to perform it 
without any default in him, and hath no remedy over, there the law 
will excuse him ; as in the case of waste, if a house be destroyed 
by tempest, or by enemies, the lessee is excused." The distinction 
between such a liability and one created by express contract is 
pointed out in what follows : " But when the party, by his own 
contract, creates a duty or charge upon himself, he is bound to 
make it good, if he may, notwithstanding any accident by inevitable 
necessity, because he might have provided against it by his con- 
tract." That rule is an answer to the plaintiffs' claim. At the 
trial my impression was that the rule laid down by Bainsford, J., in 
Pomfret v. Eicroft (2), that the lessor was bound to repair, was the 
law, but it appears by the note to that case (note 1) that it is not 
so. The decision in Eylands v. Fletcher (3) has really no bearing 
on the case ; it referred only to the acts of adjoining owners of 

land. 

Rule refused. 



Attorney for plaintiffs : H. G. Field, for Etty, Liverpool. 

(1) Aleyn, at p. 27. (2) 1 \Vnis. Saund. 322. 

(3) Law Rep. H. L. 30. 



224 COURT OF EXCHEQUER. [L. R. 



1871 THE BIRMINGHAM AND STAFFORDSHIRE GAS COMPANY 

May 1. v. RATCLIFF. 

Compulsory Reference Matter of " Mere Account" Suggestion of Fraud 
Common Law Procedure Act, 1854, s. 3. 

The plaintiffs sued the defendant for 7,129,300 cubic feet of gas sold and de- 
livered, during a period of nearly five years, at a price of 2s. 5(7. per cubic foot. 
The defendant, as to part of the claim, paid money into court, and pleaded, as to 
the residue, "never indebted" and payment. He then obtained an order, under 
the Common Law Procedure Act, 1854, s. 3, compulsorily referring the action, on 
the ground that the matter in dispute was wholly or in part one of " mere account," 
which could not conveniently be tried by a jury. The plaintiffs applied to rescind 
this order, alleging that the}' proposed at the trial to attempt to prove that the 
defendant had been guilty of fraudulent conduct by the secret abstraction of their 
gas, and that upon this question, which would regulate the damages awarded, 
they were entitled to the verdict of a jury : 

Held (by Channell and Pigott, BB., Kelly, C.B., dissenting), that the nature of 
the dispute was not altered because the plaintiffs imputed fraud to the defendant 
in relation to it ; that, substantially, the matter was one wholly or in part of mere 
account, which could not be conveniently tried by a jury, and that therefore the 
order was rightly made. 



IN this case the writ was specially endorsed in the following 
manner : 

" 1865, 9th October to 9th May, 1870. The plaintiffs claim 
668?. 18s. 7d., the balance due on the following account : 

s. d. 
7,129,300 cubic feet of gas consumed during 

the above period, at 2s. 5d. per 1000 cubic 

feet 861 9 2 

Paid on Account . . 192 10 7 



668 18 7 

Amount due, being for the quantity improperly taken without 
passing through the meters, and for gas supplied between 4th 
January and 9th May, 1870." 

The declaration was for gas sold and delivered, gas supplied, 
and for money due on accounts stated. The defendant, except as 
to 150Z. (which he paid into Court) pleaded never indebted and 
payment ; and immediately afterwards, on the 29th of June, 1870, 
applied (under the Common Law Procedure Act, 1854, s. 3) to 
Cleasby, B., for an order to refer, upon the ground that the matter 



VOL. VI.] EASTER TERM, XXXIV VICT. 

in dispute consisted, " wholly or in part, of matters of mere account, 1871 
which could not conveniently be tried in the ordinary way." (1) In 
opposition to this application, the plaintiffs filed affidavits, to the 
effect that they proposed to prove at the trial that the greater part GAS COMPAN 

t?. 

of the gas now sought to be recovered for, had been secretly ab- RAT-CUFF. 
stracted, with the privity of the defendant, from their mains, and 
conveyed through service-pipes to the defendant's premises without 
being in any way connected with the meters which registered the 
consumption. A large number of burners and a blowpipa had 
been, as they alleged, supplied in this clandestine manner with g;is. 
The defendant absolutely denied all knowledge of any improper 
abstraction of the gas, although he admitted that, owing to the 
carelessness of his men, some gas had been used which had not 
passed through the meter ; but the plaintiffs contended that they 
had a right to submit the question to a jury, and that if the jury 
should find in their favour, no question of account would be involved 
at all, inasmuch as " omnia prsesumuntur contra spoliatorem," and 
the right measure of damages would be the greatest amount of gas 
which could pass in the given time through the service-pipes in 
question. Cleasby, B., made the order, and in Hilary Term last a 
rule to rescind it was obtained on the part of the plaintiffs. 

April 29. Hanisty, Q.C., and J. W. Mcllor shewed cause. They 
cited Imho/v. Button (2). 

Sir J. B. Kttrslake, Q.C., Fit-Id, Q.C., and A. Will*, supported the 

rule. 

Cur. udi:. vuU. 

May 1. The following judgments were delivered : 

PIGOTT, D. The question raised by this rule is, whether we ought 
to rescind my Urother Cleasby 's order for compulsory reference 

(1) The Common Law Procedure Act, such court or judge, upon such applica- 

185-i (17 & 18 Viet. c. 125), s. 3, enacts tion, if they or he think fit to 

that " if it be made appear, at any time order that such matter, cither wholly or 

after the issuing of the writ, to tho in part, be referred to an arbitrator ap- 

satisfaction of the court or a jud^e, pointed by the parties, or to an officer 

upon the application of either party, that of the court .... upon such terms as 

the matter in dispute consists wholly to costs and otherwise as such court or 

or in part of matters of mere account, judge shall think reasonable." 

which cannot conveniently be tried in ("'-) Law Hep. '_' (.'. P. -10'";. 
the ordinary \\-ay, it ^hall b;- lawful for 

VOL. VI. X 



226 COUKT OF EXCHEQUER [L. E. 

1S71 under the 3rd section of the Common Law Procedure Act, 1854. 

BIHMINGIIAM The reference was to a master ; and what we have to determine is, 

AXU STAF- -Aether the matter in dispute consists wholly or in part of matters 

FORD8HIRE * </ I 

GAS COMPANY o f mere account, which cannot be conveniently tried in the ordi- 
KATCLIFF. nary way. I am perfectly satisfied on the latter point, that the 
action could not be conveniently tried, but would certainly be 
ultimately referred, because no jury would be able to follow all the 
details. Now, as to whether the cause of action consists wholly or 
in part of matters of " mere account," the particulars shew that it is 
for 7,129,300 cubic feet of gas, consumed during a period of nearly 
five years, at a price of 2s. 5d. per cubic foot. It seems to me that 
this is a matter of " mere account," and nothing has been urged to 
shew the contrary. The contention amounts only to this, that the 
case should go to a jury, because it may become a question how 
the gas was taken, and it may be necessary to say whether it was 
taken by the defendant fraudulently or not. That does not, how- 
ever, alter the matter in dispute, which is, how much gas was 
taken, and what its price was? The tort, if there be any, is 
waived by the plaintiff bringing his action in contract, and the 
question of fraud is quite collateral. The arbitrator need not find 
at all whether it was taken fraudulently or not ; and though it may 
be a mode of proving the utmost amount that was taken, to shew 
some fraud to induce a jury, or the arbitrator, to take an unfavour- 
able view of the defendant's case still, that is a mode of proof, 
and does not prevent the question from remaining a matter of 
account. I think, if we were to determine that because fraud may 
come in incidentally or collaterally, an action should not be re- 
ferred, we should greatly embarrass those who have to make these 
orders. On the ground, therefore, that the nature of the dispute 
is not altered, because the plaintiff may seek to impute fraud to 
the defendant in relation to the subject-matter of the action, I 
think the rule should be discharged. 

CHANNELL, B. I also think the rule should be discharged. The 
question is, whether the learned Judge had power under the Common 
Law Procedure Act, 1854, to make the order ; for if he had no juris- 
diction, no question of discretion arises. What, then, is the action ? 
Looking to the pleadings and particulars, 1 think that, according 



VOL. VI.] 



EASTEE TERM, XXXIV VICT. 



227 



AND STAF " 

FORDBHIBE 

AS COMPANY 
' 



to the true construction of the statute, this is a matter of " mere 1871 

account." I do not go the length of saying that because the plaintiff BIRMINGHAM 

has declared in contract, that of itself shews this to be matter of 

account. He might have had a difficulty in declaring otherwise, 

because the transaction which he proposes to attempt to prove RATCUFK. 

might have amounted to a felony. But the question between the 

parties depends on the quantity of gas consumed. It is true it is 

not simply a case of measurement ; the taking of the account may 

be attended with more intricacy than in the ordinary case. Still, 

the question to be decided remains the same. Even if it becomes 

necessary to apply the rule which presumes everything " contra 

spoliatorem," the application of that rule would still be only a 

mode of ascertaining how much gas the defendant has used. It 

is not the less an account between the parties, because the plaintiff 

is entitled, from something incidental, to call on the arbitrator to 

put a more favourable construction on the evidence he brings 

forward, than would be put upon it under ordinary circumstances. 

KELLY, C.B. I regret to differ from the rest of the Court in 
this case, which is not a mere question of practice, but a most 
important one on the construction of the Common Law Procedure 
Act, 1854. In order to make out the plaintiffs' claim, three 
matters of fact must be ascertained : first, the number of burners 
and blowpipes ; secondly, the quantity of gas which would be con- 
sumed by the burners and blowpipes during the eight hours which 
is the time during which the gas is lighted ; and thirdly, the 
number of years during which this consumption has been going on. 
But, looking to the facts that appear on the affidavit, I find that 
the plaintiffs allege that some gas has been clandestinely obtained 
by the defendant, and that it is for this reason that the measure- 
ment of the meters is not sufficient as in an ordinary case it 
would be to ascertain the amount. The question which will arise 
will be, whether the pipes by which this gas was so obtained were 
laid down in the time of the defendant's occupation or not. If 
they were, he must have been a party to the laying them down, 
and must know when it took place ; and should a jury come to the 
conclusion that the gas had been secretly taken, with his privity, 
they would be justified in making, and no doubt would make, 

VOL. VI. Y 3 



228 COUET OF EXCHEQUER. [L.E. 

1871 every presumption against him. The real question in the cause 

BIRMINGHAM appears to me to be whether these pipes were laid down by the 

AND STAF- defendant or not. and it is one which must be decided by exami- 

FOKDSHIRE 

GAS COMPANY nation of the place, taking up the flooring, and so on, to ascer- 
KATCJJFF. tain when the change was made ; and I cannot hold that under 
these circumstances the matter in dispute is one of mere account. 
Whether a matter may be referred under the statute depends, not 
on what may be the nature of the case as it appears on the decla- 
ration or pleas, but on what, in fact, is the substantial controversy 
in the cause. The whole of the proposed evidence, as well as the 
question raised by the pleadings, must be, in my opinion, taken 
into consideration in determining whether the question in the 
cause is a question of " mere account." Taking this view of the 
matter, I think that the learned Judge had no power, under the 
Act, to make this order. But, as a majority of the Court are of a 
contrary opinion, the rule will be discharged. 

Rule discharged. 

Attorneys for plaintiffs : Tucker & Lake. 
Attorneys for defendant : lliffe. Russell, & Riffe. 



May 3. SLATETC v. FINDER. 

Bankruptcy Act, 1869 Execution Seizure and Sale Seizure before Act of 
Bankruptcy Sale after Adjudication. 

An execution creditor, for a sum less than 50, who has seized the goods of 
a bankrupt before the committing of any act of bankruptcy is entitled to the pro- 
ceeds of them as against the trustee, although the adjudication is prior to the sale. 

Ex parte Veness (Law Hep. 10 Eq. 419) discussed. 

SPECIAL CASE stated by order of Brett, J., under the Common 
Law Procedure Act, 1860, s. 15. 

The plaintiff is trustee of the property of George Allen, a 
bankrupt, and the defendant is an execution .creditor of Allen. 

On 'the 12th of August, 1870, the defendant recovered judgment 
against the bankrupt for 49?. 13s. Id., and on the 19th of August, 
1870, issued a fi. fa., under which, on the same day, the sheriff 
seized. On the 20th of August, 1870, a petition for adjudication in 



. vi.] 



EASTER TERM, XXXIV VICT. 



229 



bankruptcy was duly presented against Allen ; the act of bank- 
ruptcy on which the petition was founded was committed on the 
same day. On the 22nd of August, 1870, at 11.45, A.M., Allen 
was adjudicated bankrupt, and the plaintiff was afterwards duly 
appointed trustee. At twelve o'clock the sale commenced under 
the execution, and proceeded until two o'clock, when notice of the 
adjudication was given to the sheriff and the defendant, and the 
sale was stopped. The questions for the Court arc, whether the 
trustee is entitled to the proceeds of the sale, or only to what may 
remain after satisfying the execution ; and whether, supposing the 
above-mentioned proceeds are not sufficient to satisfy the execu- 
tion, the defendant is entitled to have the residue levied out of 
the goods which at the time when he and the sheriff had notice 
remained unsold. (1) 



1871 

SLATE i: 
v. 

PlNDF.Ii. 



(1) The following sections of the 
Bankruptcy Acts of 1849 and 1869 
are material : 

The Bankruptcy Act, 1849, s. 133, 
enacts that " all executions and attach- 
ments against the goods and chattels of 
any bankrupt bona fide executed and 
levied by seizure and sale before the 
date of the fiat or the filing of a peti- 
tion for adjudication in bankrtiptc}', 
shall be deemed to be valid, notwith- 
standing any prior act of bankruptcy 
by such bankrupt committed, provided 
the person at whose suit or on whose 
account such execution or attachment 
shall have issued had not at the time 
of so executing or levying such execu- 
tion or attachment, or at the time of 
making any sale thereunder, notice of 
any prior act of bankruptcy by him 
committed." 

S. 184 enacts that " no creditor 
having security for his debt, or having 
made any attachment in London, or in 
Any other place, by virtue of any 
custom there used, of the goods and 
chattels of the bankrupt, shall receive 
\ipon any such security or attachment 
more than a rateable part of such debt, 
except in respect of any execution . . . 



served and levied by seizure and sale 
upon . . . any part of the property of 
such bankrupt before the date of the 
fiat, or the filing of a petition for adju- 
dication in bankruptcy." 

The Bankruptcy Act, 1869, enacts : 
S. 12. "Where a debtor shall be 
adjudicated a bankrupt, no creditor to 
whom the bankrupt is indebted in 
respect of any debt provable in the 
bankruptcy shall have any remedy 
against the property or person of the 
bankrupt in respect of such debt except 
in manner directed by this Act. But 
this section shall not affect the power 
of any creditor holding a security upon 
the property of the bankrupt to realize 
or otherwise deal with such security in 
the same manner as he would have 
been entitled to realize or deal with the 
same if this section "had not been passed.'' 
S. 13. "The Court may, at any time 
after the presentation of a bankruptcy 
petition against the debtor, restrain 
further proceedings in any action, suit, 
execution, or other legal process against 
the debtor in respect of any debt prov- 
able in bankruptcy ; or it may allow 
such proceedings, Avhether in progress at 
the commencement of the bankruptcy, 
2 3 



230 



COUET OF EXCHEQUER. 



[L. R. 



1871 April 24. The case was heard before Martin and Bramwell, BB 



SLATER 
v. 

PlNDEK. 



E. Thomas, for the plaintiff. By the Bankruptcy Act, 1869 
(32 & 33 Viet. c. 71), ss. 14, 15, and 17, upon the appointment of 
a trustee all the property belonging to the bankrupt at the com- 
mencement of the bankruptcy vests in him. Now in this case the 
commencement of the bankruptcy was on the 20th of August, when 
the property in question was unquestionably in Allen, since by seizure 
only an execution creditor does not alter the property in the goods 
seized : Giles v. Grover. (1) This being so, sale as well as seizure 
before adjudication was necessary to protect the creditor. For by 
32 & 33 Yict. c. 71, s. 95, subs. 3, which deals with " protected 
transactions," it is enacted that any execution against a bankrupt's 



or commenced during its continuance, 
to proceed upon such terms as the 
Court may think just. The Court may 
also, at any time after the presentation 
of such petition, appoint a receiver or 
manager of the property or business of 
the debtor against whom the petition 
is presented, or of any part thereof, and 
may direct immediate possession to be 
taken of such property or business, or 
any part thereof." 

S. 14 provides for the appointment of 
a trustee, and s. 15 defines the property 
of the bankrupt divisible among his 
creditors. S. 17 vests the bankrupt's 
property in the trustee upon his 
appointment. 

S. 87. "Where the goods of any 
trader have been taken in execution in 
respect of a judgment for a sum exceed- 
ing fifty pounds, and sold, the sheriff . . . 
shall retain the proceeds of such sale 
in his hands for a peiiod of fourteen 
days, and upon notice being served on 
him within that period of a bankruptcy 
petition having been presented against 
such trader, shall hold the proceeds of 
such sale, after deducting expenses, on 
trust to pay the same to the trustee ; 
but if no notice of such petition having 
been presented be served on him within 



such period of fourteen days, or if such 
notice having been served, the trader 
against whom the petition has been- 
presented is not adjudged a bankrupt 
on such petition, or on any other peti- 
tion of which the sheriff . . . has 
notice, he may deal with the proceeds 
of such sale in the same manner as he 
would have done had no notice of the 
presentation of a bankruptcy petition 
been served on him." 

S. 95. " Subject and without preju- 
dice to the provisions of this Act relating 
to the proceeds of the sale and seizure 
of goods of a trader . . . the following 
transactions by and in relation to the- 
property of a bankrupt shall be valid, 
notwithstanding any prior act of bank- 
ruptcy . . . 

Stib-s. 3. "Any execution or attach- 
ment against the goods of any bankrupt 
executed in good faith by seizure and 
sale before the date of the order of 
adjudication, if the person on whose 
account such execution or attachment 
was issued had not at the time of the 
same being executed by seizure and 
sale notice of any act of bankruptcy 
committed by the bankrupt, and avail- 
able against him for adjudication." 

(1) 9 Bing. 128. 



TOL. VI.] EASTER TERM, XXXIV VICT. 231 

goods, executed in good faith by seizure and sale, before the date 1871 
of the order of adjudication shall be valid, notwithstanding any SLATER 
prior act of bankruptcy, if the execution creditor had not notice of 
any act of bankruptcy at the time of such seizure and sale. The 
language used must be taken to apply to cases where the seizure 
precedes, as well as where it follows, an act of bankruptcy. Express 
protection, therefore, being afforded to executions levied by seizure 
-and sale, it follows that an execution levied by seizure only is not 
protected. The 184th section of 12 & 13 Viet. c. 106, is, it is true, 
repealed by 32 & 33 Viet. c. 83 (Bankruptcy Repeal Act, 1869), 
but it is by implication re-enacted by 32 & 33 Viet. c. 71, ss. 12, 13. 
The mere circumstance of seizure does not constitute the execution 
-creditor a " secured " creditor, who is defined by 32 & 33 Viet. c. 71, 
s. 16, as any one " holding any mortgage, charge, or lien," on the 
-bankrupt's estate. The reasoning of Bacon, V.C., in Ex yarie 
Veness (1) supports the plaintiff's contention, and neither the 
decision in that case nor in Ex parte Todliunter (2) is inconsistent 
with it. Lastly, s. 87, which applies in terms only to cases where 
goods are seized for a debt of more than 50?., and which makes 
executions voidable for fourteen days after actual sale, if the sheriff 
should within that time have notice of a petition in bankruptcy 
having been filed, throws light on the intention of the legislature 
in cases where the seizure is for less than 50Z. Can it have been 
intended to make seizure sufficient in the latter case, and yet leave 
the execution in the former voidable, though seizure and sale have 
taken place ? 

Cohen, for the defendant. The seizure by the defendant was 
-before any act of bankruptcy, and that being so, the creditor was 
in a position of one holding security ; and the only legislative enact- 
ment which could have deprived him of the benefit of his security 
was 12 & 13 Viet. c. 106, s. 184. But that section has been re- 
pealed by 32 & 33 Viet. c. 83, and is not re-enacted either expressly 
or by implication by the Bankruptcy Act, 1869 (32 & 33 Viet. c. 71). 
That Act only contains the same general provisions vesting the. 
bankrupt's property in the assignees or trustees as all previous 
Bankruptcy Acts had done ; but these leave the position of an exe- 
cution creditor who has seized before any act of bankruptcy un- 

(1) Law Rep. 10 Eq. 419, at \\ 423. (2) Law Hep. 10 Kq. -12.". 



232 COUET OF EXCHEQUER [L. R. 

1871 touched : Thomas v. Desanges (1) ; Balme v. Button (2) ; Giles v. 
g LATER Grover (3) ; Samuel v. Duke (4) ; Hutton v. Cooper (5) ; Edwards v. 
p c ' ScarslrooJt (6) ; Young v. Roebuck (7) ; Williams' Bankruptcy Law 
and Practice, pp. 103-5. The effect of these decisions was to esta- 
blish a broad distinction between seizure before and seizure after an 
act of bankruptcy. In the former case the creditor did not require 
protection. His title was perfected subject only, between 1849 and 
1869, to the necessity imposed upon him by 12 & 13 Viet. c. 106, 
s. 184, of selling before the date of the fiat or the filing of a peti- 
tion for adjudication. The decision in Ex parte Veness (8) may be 
supported on the facts of the case, inasmuch as, according to one 
view of them, an act of bankruptcy had been committed prior to 
seizure by the execution of a bill of sale by the bankrupt. The 
dicta relied on were therefore unnecessary to the actual decision ; 
and both in that case and in Ex parte Todhunter (9) the Chief 
Judge recognises the repeal of s. 184 of 12 & 13 Viet. c. 106. 
Both cases, moreover, were decided on the liquidation clauses of 
the new Act. 

[MARTIN, B., referred to Wilbraliam v. Snoiv (10) as shewing 
that an execution levied by seizure bound the debtor's goods.] 

It certainly bound them in the absence of any statute to the 
contrary, according to the general principles of the bankruptcy 
law which are still in force (see 32 & 33 Viet. c. 83, s. 20), and are 
to be considered as governing the construction of the new Act : see 
per James and Mellish, L.JJ., in Ex parte Tempest (11). 

[BKAMWELL, B. It seems strange that in cases under s. 87 
executions may be avoided for fourteen days after actual sale, 
and yet that in other cases seizure should alone suffice to protect 
the creditor.] 

It is an anomaly, but such an anomaly would not warrant the 
inference that s. 184 of 12 & 13 Viet. c. 106, is re-enacted; and 
it may be explained by the consideration that the execution by 

(1) 2 B. & Aid. 586. (7) 2 H. & C. 296 ; 32 L. J. (Ex.) 

(2) 9 Bing. 471. 260. 

(3) 9 Bing. 128, at p. 140. (8) Law Kep. 10 Eq. 419. 

(4) 3 M. & W. 622. (9) Law Rep. 10 Eq. 425. 

(5) 6 Ex. 159 ; 20 L. J. (Ex.) 123. (10) 2 Wms. Saund. 47 a. 

(6) 3 B. & S. 280 ; 32 L. J. (Q.B.) 45. (11) Law Rep. 6 CL. at pp. 75, 76. 



VOL. VI.] EASTER TERM, XXXIV VICT. 

seizure and sale in a case under s. 87 is in itself made an act of 1871 
bankruptcy by s. 6, subs. 5 : see Ex purte Key. (J.) SLATKK 

Thomas, in reply. . l< 

1 FINDER. 

Cur. adv. vuU. 

May 3. In consequence of the importance and novelty of the 
question, and of the reasoning contained in the judgment of 
Bacon, V.C., in Ex parte Veness (2), upon which the plaintiff 
relied, Martin and Bramwell, BB., directed the case to be reheard 
before four judges, and CoJien accordingly re-argned it for the 
defendant before Kelly, C.B., Martin, Chanuell, and Cleasby, BB. 

During the course of the argument Martin, B., read the follow- 
ing judgment, which he had prepared after the first hearing, as 
expressing the opinion he had then formed on the case : 

This is a special case which was argued before my Brother 
Bramwell and myself. The facts are very clear and simple. The 
plaintiff is the trustee of one Allen, a bankrupt. On the 20th of 
August, 1870, a petition for adjudication was presented against 
him. The act of bankruptcy was committed the same day. On 
the 22nd of August at a quarter before twelve he was duly ad- 
judicated bankrupt ; the order of adjudication is dated the same 
day, and the plaintiff is the trustee. On the 12th of August 
the defendant recovered a judgment against the bankrupt for 
497. 13s. Id. On the 19th of August he issued a fi. fa. directed to 
the sheriff of Middlesex. On the same day the sheriff levied. On 
the 22nd at 12 o'clock he commenced to sell, and about 2 o'clock, 
and whilst the sale was proceeding, notice of the adjudication was 
given to him and the defendant. The questions submitted to the 
Court are : first, whether the plaintiff (the trustee) is entitled to the 
proceeds of the sale, or only to what may remain after satisfying 
the execution ; secondly, whether, supposing the proceeds are not 
sufficient to satisfy the execution, the execution creditor is entitled 
to have the residue levied out of the goods unsold when he and 
the sheriff had notice of the adjudication. I am of opinion that 
the trustee is entitled only to the proceeds which remain after 
satisfying the execution, and the defendant (the execution creditor) 

(1) Law Rep. 10 Eq. 432. (2) Law Rep. 10 En. 4U. 



234 COUET OF EXCHEQUER [L. K. 

1871 is entitled to have the residue of his debt levied out of the goods 
SLATER unsold at the time of the notice. The question depends upon the 
FINDER construction of the Bankruptcy Act, 1869 (32 & 33 Viet. c. 71), and 
is of very considerable importance. 

The first contention on behalf of the plaintiff (the trustee) was 
founded upon the 95th section. I am clearly of opinion, how- 
ever, that this enactment has reference to a different state of 
things, and docs not affect the present question. It is a clear 
principle in bankrupt law, recognised and adopted by the llth sec- 
tion of the present Bankruptcy Act, that upon the commission 
of an act of bankruptcy the title of the assignee had relation back 
to the time of the act of bankruptcy, and the goods of the bank- 
rupt became the goods of the assignee from that time. A legiti- 
mate consequence of this doctrine was, that if a sheriff levied after 
the act of bankruptcy under an execution against the bankrupt, he 
levied not upon the goods of the bankrupt, but upon the goods of 
the assignee, and was a wrongdoer as against him, and liable to an 
action for the value of the goods. 

The operation of this doctrine was, that if a man committed an 
act of bankruptcy at any time within the period prescribed by the 
Statutes, and the petitioning creditor's debt then existed, it was 
competent for the assignee, upon a fiat issuing, to maintain an action 
against the sheriff as a wrongdoer for levying under an execution 
against the bankrupt which he was at once bound to execute and of the 
existence of which he was at the same time in invincible ignorance, a 
circumstance which rendered him liable to an action as a wrongdoer. 
The Bankrupt Act, 6 Geo. 4, c. 1 6 (ann. 1825), afforded some remedy 
to this injustice by enacting, in the 81st section, that executions boua 
fide executed or levied more than two months before the issuing 
of the commission (the then initiation of proceedings in bankruptcy) 
should be valid, notwithstanding any prior act of bankruptcy com- 
mitted by the bankrupt. The 95th section of the present Act is in 
furtherance of the same principle ; instead of giving the protection 
to the execution being executed and levied two months before the 
bankruptcy, it gives it to the seizure and sale before the order of 
adjudication ; but they were both enacted with the same object, 
viz. to protect the execution creditor and the sheriff against the 
operation of a prior act of bankruptcy, and have no bearing upon 



VOL. VI.] EASTEK TEEM, XXXIV VICT. 

the present question where the seizure was before the act of bank- 187 1 

ruptcy. SLATE 

This will be found very clearly explained in the case of Edwards PU^, 
v. Scarsbrook (1). The statute 12 & 13 Viet. c. 10G, s. 133, was in 
furtherance of the same object, to relieve the execution creditor 
and the sheriff from the operation of the doctrine of relation, and 
does not apply to the present case. But the learned counsel for 
the plaintiff further contended that, by the 15th section, all property 
which belonged to or vested in the bankrupt at the commencement 
of the bankruptcy became vested in the trustee, and was divisible 
amongst the general body of creditors ; and that by the 12th sec- 
tion no creditor had any remedy against the property of the bank- 
rupt except in the manner directed by the Act ; and his contention 
was. that notwithstanding at the commencement of the bankruptcy 
the sheriff was in possession of the goods, still by reason of the pro- 
perty in the goods being then in the bankrupt the goods became 
freed from the sheriff's right to possession, and became the property 
of the trustee in the sense that he was legally entitled to the 
present possession adversely to the sheriff. I am of opinion that 
this is not the true construction of the statute. To elucidate this 
question it is necessary to go back to what is generally spoken of 
as the first Bankrupt Act, viz. the 13 Eliz. c. 7. By the 2nd section 
it enacts, amongst other things, that the assignee shall take the 
bankrupt's goods and chattels wherever they may be found and 
known. At this time, upon the issuing of a writ of fi. fa., the goods 
of the defendant were said to be bound from its teste, and in the 
interval of time between the enactment of this statute and the 
21 Jac., a question had arisen whether as between the plain- 
tiff, as an execution creditor, and .the assignee of a bankrupt, 
the plaintiff who had issued a writ of fi. fa. before the act of 
bankruptcy was entitled to the goods against the assignee, and 
the judgment was that he was so entitled; for by s. 9 of 21 
Jac. c. 19, it is enacted that a creditor having security for his 
debt by judgment, whereof there is no execution served and 
executed upon the goods of the bankrupt before he became bank- 
rupt, shall not be relieved for any more than a rateable portion of 
his debt with the other creditors, without respect to his security. 
(1) 3 B. & S. L'SO; 32 L. J. (Q.B.) 45. 



236 COUKT OF EXCHEQUEK. [L.B. 

1871 Now, two things are observable from this enactment : first, that the 
binding of the goods by reason of the issuing the fi. fa. before 



v - the bankruptcy was no longer to be of avail, but that the execu- 

JL 1NDER. 

tion must be served or executed upon the goods in order to defeat 
the right of the assignee ; and, secondly, that the right or claim 
which the judgment creditor had upon the goods of his debtor is 
called a security. 

The 6 Greo. 4, c. 16, does not seem to have made any material 
alteration in the law in regard to seizures or levies made before the 
act of bankruptcy. But the before-mentioned statute, 12 & 13 Viet. 
c. 106, s. 184, enacts, very much in the language of the 21 Jac., 
that no creditor having security for his debt of the goods and 
chattels of the bankrupt shall receive upon such security more than 
a rateable part of such debt, except in respect of an execution 
served and levied by seizure and sale before the date of the fiat 
or the filing of the petition. Upon this section the Court of 
Queen's Bench held, in the before-mentioned case of Edwards v. 
Scarsbrook (1), that when the order of things was first, seizure ; 
secondly, act of bankruptcy and notice ; thirdly, sale ; and fourthly, 
adjudication the execution creditor was entitled to the proceeds 
of the goods ; and the Court of Exchequer held, in Young v. Roe- 
buck (2), that where the adjudication preceded the sale the assignee 
was the party entitled. I entirely concur with both these judg- 
ments ; but this section is now repealed, and has not been re-enacted, 
and in my opinion the present case depends upon the true con- 
struction of the 12th and 15th sections of the now existing Bank- 
rupt Act. 

The 15th section enacts that the property of the bankrupt 
divisible amongst the creditors shall comprise all such property as 
may belong to or be vested in the bankrupt at the commencement 
of the bankruptcy. Now had this been the only provision I should 
have been clearly of opinion, in analogy to the principles long 
established under the former law, that it only passed to the trustee 
that which belonged to the bankrupt beneficially, and was subject to 
all lawful charges and claims of third parties. The word "property" 
is ambiguous as regards goods, and property in goods may be in 

(1) 3 B. & S. 280 ; 32 L. J. (Q.B.) 45. 

(2) 2 H. & C. 296 ; 32 L. J. (Q.B.) 260. 



VOL. VI.] EASTER TERM, XXXIV VICT. 21 

a bankrupt, so as to make him the sufferer in the case of their 1871 
destruction, although a third person may lawfully hold posses- SLATED 
sion of the goods until a claim upon them be satisfied, as in 

PlNPEH. 

the case of a pledgee or other bailee with an interest, or an 
unpaid vendor ; or the word " property " may mean the corpus and 
substance itself, as a horse or other chattel is said to be the property 
of its owner. But it was argued that the 12th section enacted that 
no creditor shall have any remedy against the property or person of 
the bankrupt in respect of his debt except in manner directed by 
the Act. If it was necessary, I should be prepared to hold that "pro- 
perty" here means the same thing as "property" in the 15th sec- 
tion ; but the remaining part of the section puts it beyond doubt ; 
it enacts that it shall not affect the power of the creditor holding a 
security upon the property of the bankrupt to realize or otherwise 
deal with such security. Now, the words "holding a security" 
are the words used in the 9th section of 21 Jac. and the 184th 
section of 12 & 13 Yict. c. 106, to describe the interest of the 
plaintiff in an execution under which a sheriff has seized and is in 
possession of goods, and in my opinion the interest of such execution 
creditor is expressly protected. 

It only remains to notice the 87th section of the new Act, to which 
reference was made by the learned counsel for the plaintiff. It 
enacts that when the goods of a bankrupt trader have been taken 
in execution on a judgment for a sum exceeding 501. the judg- 
ment in the present case is for a sum under 50?. the sheriff shall 
retain the proceeds in his hands for fourteen days, and certain 
other consequences follow. This enactment has nothing to do with 
the present case, it was an enactment of absolute necessity. The 
6th section made an execution against a debtor, a trader, to obtain 
payment of not less than 507. levied by seizure and sale an act of 
bankruptcy. Except for the 87th section the sheriff would have 
been bound to pay the execution creditor the amount of the levy 
immediately upon its realization, and at the same time upon the 
adjudication of the execution debtor to be bankrupt would have been 
liable to pay the value of the goods seized to the trustee by the 
operation of the doctrine of relation before referred to. This section 
is enacted for the avoidance of this injustice, and also perhaps to 
put such a creditor in the same position as the general creditors. 



238 COUKT OF EXCHEQUEE. [L. R. 

1871 I have entered into the grounds of my judgment thus largely, 

SLATEB because this question perpetually occurs at chambers upon inter- 
P DEK ' Pleader summons, and it is very desirable that it should be 
settled. 

At the close of the argument the Court delivered judgment as 
follows : 

KELLY, C.B. I think the defendant is entitled to our judgment. 
It appears that he was the execution creditor of one Allen, a bank- 
rupt. The judgment was dated on the 12th of August, 1870. On 
the 19th of August a fi. fa. was issued, and seizure under it took 
place on the same day ; on the 20th there was an act of bank- 
ruptcy committed, followed by a petition for adjudication, and on 
the 22nd at 11.45 A.M. adjudication took place. At 12 o'clock a 
sale commenced under the execution, and part of the bankrupt's 
effects was sold. Before the sale was over, however, notice of the 
adjudication was given to the sheriff and the defendant, and the 
proceedings were stopped until the rights of the parties interested 
should be ascertained. The substantial question now is, whether 
the execution creditor the goods having been seized by him before 
any act of bankruptcy had been committed is to be defeated by 
reason of the adjudication in bankruptcy preceding the sale. 

Now, down to the Bankruptcy Act of 1849 (12 & 13 Viet. c. 106), 
there can be no doubt that seizure entitled the execution creditor 
to the goods of a bankrupt, or their proceeds, as against an assignee 
in bankruptcy, unless before such seizure an act of bankruptcy had 
been committed. But by s. 184 of that Act it was provided that 
where an act of bankruptcy occurred before the execution had been 
perfected by seizure and sale, the title of the assignee should 
prevail ; and thus the law stood until 1869, when the 184th section 
of the Act of 1849 was repealed. Unless, therefore, the new 
Bankruptcy Act contains any provisions amounting either expressly 
or by implication to a re-enactment of the Act of 1849, s. 184, the 
execution creditor would, in the case before us, be entitled to 
recover ; and I cannot find any such provisions in the Act. 

It has been well observed by Mr. Cohen, in his comments on 
Ex parte Veness (1), that the question is not, as there seems to be 
(1) Law Rep. 10 Eq. 419. . 



VOL. VI.] EASTER TERM, XXXIV VICT. 239 

indicated, whether a seizure by an execution creditor is protected 1871 
by statute, but whether the old common law of bankruptcy, as we SLATER 
may call it, prevails ; and whether an act valid in itself has been P IN *DER 
nullified by some positive legislative enactment. I cannot find any 
enactment in the Act of 1869 which would have any such effect. 
Section 95, subs. 3, does not apply at all to this case. With regard 
to s. 12, which enacts that " where a debtor shall be adjudicated a 
bankrupt, no ' creditor ' to whom the bankrupt is indebted in 
respect of any debt provable in the bankruptcy, shall have any 
remedy against the property or person of the bankrupt in respect 
of such debt, except in manner directed by this Act," it 
might be contended, if the words stopped at this point, that an 
execution creditor, being a " creditor," was within the language of 
the section. But then the proviso goes on to enact that "this 
section shall not affect the power of any creditor holding a security 
upon the property of the bankrupt to realize or otherwise deal 
with such security in the same manner as he would have been 
entitled to realize or deal with the same if this section had not 
passed ;" and it is clear from the authorities that the words " creditor 
holding security " comprise an execution creditor who has seized 
before any act of bankruptcy has been committed. Therefore, the 
previous portion of the section is set aside by the proviso as far as 
regards an execution creditor who has seized, and the only question 
is, whether his right to sell the goods, founded as it is upon his 
seizure before any act of bankruptcy, is defeated or nullified by 
any express legislative provision. I cannot find any enactment of 
the sort, and therefore the defendant is, in my opinion, entitled to 
our judgment. 

It is said that the decision of Vice-Chancellor Bacon in In re 
Veness (1) is contrary to this decision, or at all events that the 
reasoning of that learned and eminent judge is opposed to it ; and 
no doubt there are expressions in the judgment which seem to 
indicate that the judge considered that an execution creditor who 
had seized prior to any act of bankruptcy required protection by 
statute if his title were to avail against the assignee, or rather 
trustee. " Laying aside," he says (at p. 423), " all considerations 
appertaining to the law of relation in bankruptcy (on which I do 
(1) Law Rep. 10 Eq. 419. 



240 CODET OP EXCHEQUER. [L. B. 

1871 not. think it necessary or expedient now to pronounce any opinion), 
SLATER it seems that a trustee having been appointed, and the date of his 
FINDER appointment being the commencement of the liquidation (the 
period at which the property vests in him), and of the same force 
and effect as if an order of adjudication in bankruptcy had on that 
day been made, it cannot be questioned that any execution levied 
on such property would be ineffectual against the trustee unless it 
is protected by some provision of the statute. The only protection 
applicable in this case is to be found in the 3rd division of the 
95th section, which renders valid any execution against the goods 
of a debtor, executed in good faith by seizure and sale before the 
date of the adjudication, if there was not at the time of the seizure 
and sale notice of any act of bankruptcy committed by and avail- 
able against the debtor for adjudication." 

Now if this language is taken strictly, it is certainly, in my opinion, 
not in accordance with the law. An execution levied by seizure 
before any act of bankruptcy is prima facie effectual, and needs 
no protection whatever, and, as the only statute which nullified it 
has been repealed and not re-enacted, remains effectual although 
adjudication in bankruptcy may occur before sale. 

MARTIN, B. This case was argued last week before my Brother 
Bramwell and myself, and I retain the opinion which I then formed, 
and which, I may observe, is in accordance with the view expressed 
by the Messrs. Williams in the excellent edition of the new Bank- 
ruptcy Act they have recently published. 

CHANNELL, B. I am of the same opinion. The question is really 
short and easy. Down to the year 1 849 the execution creditor 
in a case like the present would clearly have been entitled as 
against the assignees of the bankrupt, seizure having taken place 
before any act of bankruptcy. But s. 184 of the Act of that year 
rendered sale before the petition for adjudication essential, and 
thus the creditor's right was limited. That section is repealed, 
and there is not, so far as I can see, any corresponding enactment 
in the Act of 1869. This disposes of the case, but a re-argument 
was deemed advisable, for the reasons stated by my Brother Martin. 
Upon careful investigation of the facts, however, I do not think 



VOL. VI.] EASTER TERM, XXXIV VICT. 211 

the decision in Ex parts Veness (1) inconsistent with our judgment, 1871 
although there may be expressions in the reasoning of the learned SI.ATEU 
judge in that case which appear to be inconsistent with what I con- p^,,,. 
sider to be the true view of the law. The judge ruled correctly, 
both in Ex parie Veness (1) and in Ex parie Todhunter (2), that s. 18-1 
was repealed, and was not re-enacted. If he intended to decide also 
that an execution creditor who had seized before an act of bank- 
ruptcy requires statutory protection, I think he was in error. He 
had, at common law, a valid title by such seizure, of which he could 
only be deprived by express statutory enactment ; and the section 
which did deprive him having been repealed, his title is now per- 
fectly good, and he does not need to be protected. My judgment, 
therefore, is for the defendant. 

CLEASBY, B. I am of the same opinion. I think that the case 
of Edwards v. Scarsbrook (3) is decisive in favour of the defendant. 
Many old difficulties have been touched upon in the argument 
and first principles appealed to, as to which there has never been a 
question. The bankruptcy of a man cannot deprive his creditor 
of an acquired right ; and a creditor who has lawfully seized his 
debtor's goods under an execution before any act of bankruptcy 
has acquired a right of which he cannot be deprived except 
by the provisions of an Act of Parliament. Now 12 & 13 Viet. 
. 106, s. 184, did deprive the execution creditor of his former 
right, but it has been repealed, and there is no equivalent enact- 
ment in the present Act. The 95th section, subs. 3, does not 
apply to the present case at all, but only to executions levied by 
seizure and sale without notice at the time of such seizure and 
sale of any act of bankruptcy ; that is, according to Edwards v. 
Scarsbrook (3), of any act of bankruptcy prior to seizure. If tk> 
seizure is first in time the creditor wants no protection. 

Then with regard to the two decisions of the Chief Judge in liunk- 
ruptcy, which are both, it should be remarked, upon the liquidation 
clauses of the Act of 1869, they appear to me to be consistent 
with each other, and not to be opposed to our judgment in this case. 
There was a difference, in fact, between the two cases. In Ex 

(1) Law Kep. 10 Eq. 419. (2) Law Rep. 10 Eq. 42".. 

(3) 3 B. & S. 260; 32 L. J. (Q.B.) 45. 



242 COURT OF EXCHEQUEE. [L. R, 

1871 par'e Veness (1) the trustee was appointed before, and in Ex parte 

SLATER Todhunter (2) after sale. And, reasoning upon the various. 

v - clauses and rules in reference to liquidation by arrangement, the 

x INDER. 

judge comes to the conclusion that the date of the sale is the 
material point, and accordingly decides one case for the trustee,, 
and the other against him. But he does not, as I understand him, 
in the passage which has been read by the Lord Chief Baron, lay 
it down as a principle of ordinary bankruptcy law that anexecu- 
tion levied by seizure before an act of bankruptcy requires the 
protection of some statute as against the assignee. Nor does he 
in any way question Edwards v. Scarsbrook (3), which, as I have- 
said, really decides the present case. Whatever, therefore, be the 
true meaning of the passage in question, I do not feel that, in 
coming to the conclusion that the defendant is entitled to judg- 
ment, we are in conflict with the actual decision of the Chief 
Judge in the case relied on by the plaintiff. 

Judgment for the defendant* 

Attorney for plaintiff : Barnett. 

Attorneys for defendant : Cooper & Holmes. 

(1) Law Eep. 10 Eq. 419. (2) Law Eep. 10 Eq. 425. 

(3) 3 B. & S. 260 ; 32 L. J. (Ex.) 45. 



VOL. VI.] EASTER TERM, XXXIV VICT. 213 



[IN THE EXCHEQUER CHAMBER.] 18?I 

May 18. 
KEN DAL v. WOOD AND ANOTHER. 

Partners Authority of one Partner to bind another Mistake of Fact 
Voluntary Payment. 

The plaintiff and Woolnough were partners, and during the partnership had 
dealings with the defendants. Woolnough was indebted to them on his own 
account, and at his request they applied 1000J. of the partnership money, paid by 
him to them, to the liquidation of his private debt. The plaintiff did not know 
of or authorize this mode of applying the money, and had not conducted himself 
in such a manner as to make it reasonable for the defendants to believe that he 
had authorized it, but they did in fact believe he had. 

Upon the dissolution of the partnership, it appeared from the accounts that the 
firm owed the defendants more than 5000J., and the plaintiff accepted bills for the 
whole balance apparently due. These bills were handed to the defendants for the 
purpose of being discounted. Before they arrived at maturity, the plaintiff dis- 
covered the application by the defendants of the 1000?. to Woolnough 's private 
debt. He nevertheless met the bills, at the same time informing the defendants 
that he did so under protest, and only to save his father's credit, whose name was 
on the bills as drawer. lu an action to recover the 1000., as money paid under 
a mistake of fact: 

Held, first, that the defendants could not retain the money as against 
Woolnough's private debt, the plaintiff never having authorized its appropriation 
to that debt, nor conducted himself so as to give them reasonable grounds for 
believing that he had ; and, secondly, that the plaintiff having been ignorant of 
the real facts of the case when the bills were drawn, had not precluded himself 
from recovering by meeting them at maturity when he had discovered the facts, 
inasmuch as his so doing could not be regarded as a voluntary act. 

ERROR from the decision of the Court of Exchequer in favour 
of the defendants on a special case. 

The action was brought to recover 1000 for money received by 
the defendants for the plaintiff's use. The plaintiff is a cotton 
spinner at Manchester, and the defendants are cotton dealers at 
the same place, carrying on business under the name of " G. 
& E. Wood." Prior to 18G2, the plaintiff's business was carried 
on by one Woolnough, in partnership with Thomas Rowbotham. 
In April, 18(52, the partnership was dissolved, and Rowbotham 
assigned his interest to Woolnough, who took on himself all the 
liabilities of the firm. At this time the firm was indebted to the 
defendants in the sum of more than 3000?. for cotton supplied. 
VOL. VI. Z 3 



244 COUKT OF EXCHEQUER [L. B. 

1871 Rowbotham was to be paid an agreed sum for his share of the 
KBNDAL partnership property, and on account of that sum he received from 
Woolnough promissory notes to the amount of 80007. 

In April, 1862, the plaintiff became Wool nough's partner in the 
business, and they continued to carry it on until October, 1866. 
The plaintiff was not aware when the partnership was arranged 
that Woolnough had given the promissory notes above mentioned 
to Rowbotham ; nor did he know that Woolnough had not paid 
Rowbotham for his share in the business. Neither of these cir- 
cumstances came to his knowledge until after the bankruptcy of 
Woolnough in 1867. 

During the existence of the firm .of Woolnough & Kenclal, Wool- 
nough managed the business and kept the books. The partnership 
\\ as dissolved in October, 1866, when Woolnough owed the plaintiff 
4000?. on the partnership account. Upon the dissolution, the 
plaintiff took upon himself all the liabilities of the firm. 

During the whole period of their partnership, Woolnough and 
the plaintiff purchased cotton from the firm of G. & E. Wood ; 
and there were extensive dealings between them of which accounts 
current were from time to time rendered. To these the plaintiff 
had access, but in point of fact they were not examined by him 
until after the dissolution of the partnership. 

Upon the dissolution of partnership, the defendants claimed of 
the plaintiff a balance of 57587. The plaintiff examined the books, 
and finding that substantially they disclosed that sum to be due, 
paid it by 7587. in cash, and three acceptances for 50007. 

In April, 1867, AVoolnough became bankrupt, and the plaintiff 
was appointed creditors' assignee. Among the bankrupt's papers 
he found, together with other documents, two receipts dated respec- 
tively the 4th and 22nd of May, 1866, signed by the defendants, 
which purported to be on account of cotton supplied by them to 
the firm of Woolnough & Kendal. In consequence of this dis- 
covery, the plaintiff investigated the accounts current between the 
defendants and Woolnough & Kendal, and he then discovered that 
credit had not been given for the amount represented by the re- 
ceipts. The circumstances under which the receipts were given 
were as follows : 

On the 4th of May, 1866, Woolnough paid the defendants 5007. 



VOL. VI.] EASTER TERM,' XXXIV VICT. 245 

of the partnership moneys, and they gave him the receipt of that 1871 
date, but at Woolnough's request they credited him with this sum, 
and appropriated it in liquidation of some of the promissory notes 
which had been made by Woolnough in favour of Rowbotham, and 
by him endorsed to them. A further sum of 500Z. was paid by 
Woolnough to the defendants on the 22nd of May, 1806, for which 
they gave'the receipt of that date. This amount was first of all 
entered in the daybook thus : " Cr. Woolnough & Kendal," but 
the word " Kendal " had afterwards been struck through, and the 
money was credited in cashbook and ledger to Woolnough. It 
was applied by the defendants, at his request, in a similar manner 
to the former sum of 500Z. 

The several sums above mentioned were all entered in the cash- 
book of Woolnough & Kendal as having been paid to the defendants. 
Woolnough never told the plaintiff how he had caused them to be 
dealt with ; nor had he any authority, in fact, to appropriate them 
as he had done, but the defendants believed he had. Four years 
previously Woolnough had appropriated partnership funds in a 
similar manner, and accounts had been sent in in which those funds 
had not been duly credited. 

The last of the acceptances (which was for 2000Z.) given by the 
plaintiff to the defendants to discharge the balance of 57G8Z. came 
due on the 15th of June, 1867, arid the plaintiff, although at 
that time he had discovered Woolnough's dealing with the partner- 
ship funds, paid it. He, however, at the same time informed the 
defendants that he did so simply on account of his father's name 
being attached as drawer to the bill, and gave them notice that he 
paid " under protest of non-indebtedness," and that he was about 
to take immediate steps to recover the amount. 

The question for the Court, who were to draw inferences of fact, 
was whether the plaintiff was entitled to recover the several sums 
of money which Woolnough had caused to be applied in the 
manner stated in the case. 

The case was argued in the Court of Exchequer on the 8th of 
June, 1869, by Manisty, Q.C. (Jordan with him) for the plaintiff, 
and R. G. Williams for the defendants. The Court were equally 
divided in opinion upon it, Kelly, C.B., and Bramwell, 13., giving 
judgment for the defendants, and Pigott and Cleasby, BB., for the 

Z 2 3 



246 COURT OF EXCHEQUER [L. R. 

1871 plaintiff. Cleasby, B., withdrew his judgment, and the plaintiff 

KENDAL brought error. 

v. 
WOOD. 

May 18, 1870. Manisty, Q.C. (Jordan with him), for the 
plaintiff. The defendants' mere belief that the partnership money 
was applied to the payment of Woolnough's debt with the plain- 
tiff's authority is not enough to furnish a defence to this action, 
there being no authority in fact and no conduct on the plaintiff's 
part from which authority might reasonably be inferred : Leverson 
v. Lane (1) ; Heilbut v. Nevill. (2) The money now sued for was 
paid under mistake of fact. It was not paid voluntarily, nor has 
the plaintiff been guilty of any such carelessness as disentitles him 
to recover. 

R. G. Williams for the defendants. Had the partnership con- 
tinued to exist, the action would not have been maintainable, for 
Woolnough must have been joined as plaintiff: Wallace v. 
Kelsall (3) ; Brownrigg v. Eae (4) ; Gordon v. Ellis (5) ; Jones v. 
Yates (6); and the dissolution of the partnership cannot give 
Kendal a better right than he had before : Lindley on Partner- 
ship, vol. 1, p. 170. Again, when the plaintiff met his acceptance, 
he knew the real state of the accounts, and having paid the 
money, he cannot recover it back as having been paid under a 
" mistake of fact." The payment was voluntary. It was not one 
he was bound to make : Marriott v. Hampton (7) ; Barber v. Fox (8). 
There is nothing in the case to shew that the bill was in the hands 
of third parties, when perhaps the payment being to save credit, 
might be considered compulsory. 

Manhty, Q.C., in reply. 

COCKBURN, C J. (after referring to the facts of the case) pro- 
ceeded : The question that first arises, is whether the defendants 
at the time they received this money, or at the time they appro- 
priated it to the satisfaction of Woolnough's debt, knew it was 

(1) 13 C. B. (N.S.) 278; 32 L. J. (4) 5 Ex. 489. 

(C P.) 10. (5) 7 M. & G. 607. 

(2) Law Rep. 4 C. P. 354 ; Law Rep. (6) 9 B. & C. 532. 

5 C. P. 478. (7) 2 Sm. L. C. Gth ed. p. 375. 

(3) 7 M. & W. 264. (8) 2 Wms. Satmd. at p. 137, k. 



VOL. VI.] EASTER TERM, XXXIV VICT. 247 

partnership money. Of that I think there cannot be the slightest 1871 
doubt; because, in the first place, the facts shew that the money KENDAL 
must have been puid in satisfaction of partnership liability, and, 
though it may have been that while the transaction was in fieri, the 
other partner may have directed the appropriation of the money 
to the satisfaction of his own debt, it is clear from the fact of his 
having at first sought to apply it to the satisfaction of the partner- 
ship debt, and a receipt having been given expressly as for money 
received on account of the partnership debt, the defendants must 
have known, or have had every reason to know and to my mind 
it is the same thing that this was partnership property. Then 
comes the next question : had they knowledge or had they reason- 
able ground to believe that Woolnough had the authority of his 
partner to apply the partnership money in satisfaction of his own 
debt? Now the fact turns out to be, and it is a fact beyond dis- 
pute, that Woolnough had no such authority to apply the money 
in satisfaction of his own debt. But, assuming that he had, or that 
the defendants had reason to believe that he had, would that alter 
the law applicable to the case ? As it seems to me, there is no 
ground here for saying that we can probably infer that the defend- 
ants had reasonable ground to believe that Woolnongh had such 
authority. It is true that, four years before, Wooluough had, in 
like manner, appropriated the partnership funds to the liquidation 
of his own debts to the defendants ; and it is also true that accounts 
had been sent in in which sums of money had not been credited to 
the partnership, as they ought to have been if the money in ques- 
tion had been properly appropriated to the satisfaction of the part- 
nership debt. But those transactions were by four years anterior 
to the transaction which we are now inquiring into, and it does not 
seem to me to be reasonable to assume that because a man four 
years before may have had the authority of his partner for apply- 
ing partnership funds in a particular manner, he should continue 
to have it. 

Therefore I assume, from the state of facts, that there was no 
authority on the part of Woolnough thus to apply the partner- 
ship funds, and that there was no belief on reasonable grounds in 
the minds of the defendants that he had that authority. 

Now it appears to me quite clear that this is not a transaction 



248 COUET OF EXCHEQUER. [L. E. 

1871 good in point of law. Assuming the law to be as stated in Smith's 
KENDAL Mercantile Law, 7th ed, p. 45, and adopted by the Court of Com- 
" mon Pleas in the ease of Leverson v. Lane (1) which has been cited, 
it is this : " The unexplained fact that a partnership security has 
been received from one of the partners in discharge of a separate 
claim against himself, is a badge of fraud, or of such palpable neg- 
ligence as amounts to fraud, which it is incumbent on the party 
who so took the security to remove by shewing either that the 
partner from whom he received it acted under the authority of the 
rest, or at least that he himself had reason to believe so." Now, 
here the misappropriation of partnership funds being without 
authority and without reasonable belief on the part of the defend- 
ants that Woolnough had received that authority, the transaction 
is one which cannot be sustained. I must not be taken to admit 
that reasonable belief will suffice in absence of actual authority. 
I am strongly of opinion that if a creditor of one of two partners 
chooses to take from his debtor what he knows to be partnership 
securities or partnership funds, without ascertaining whether the 
debtor has the authority of his partner as to this application of the 
partnership funds, he does so at his own peril, and it is not enough 
that he has even reasonable cause to believe in the existence of 
the authority. But, as I have said, it is not necessary, in the view 
I have taken of the matter, to decide that point or to quarrel with 
the proposition as laid down, because it seems to me that the facts 
here would not warrant the inference of there being any reasonable 
cause for the belief, assuming, as on this special case we must, that 
belief to have been entertained. 

The transaction, then, is void. No doubt there are technical 
difficulties which might in some other form of proceeding have 
presented themselves as insuperable obstacles in the plaintiff's 
way. Suppose an action had been brought while the partner- 
ship existed, on behalf of the partnership, to recover back this 
money, there would have been the fatal difficulty that the delin- 
quent partner must have been a party to the proceedings. But 
we are cleared from any difficulty arising from the necessity of 
Woolnough, the delinquent partner, being made a party to the 
suit. He is not a necessary party ; the plaintiff brings this action 
(1) 13 C. B. (N.S.) 278 ; 32 L. J. (C.P.) 10. 



VOL. VL] EASTER TERM, XXXIV VICT. 21!> 

upon the ground of having paid the money sued for in ignorance 1871 
of the fact that there had been any misappropriation of the part- KKNPAL 
nership funds, and in ignorance of his own position relatively to w*V 
the claim made against him, and in ignorance of the real state of 
the account between his firm and the defendants. Then Mr. Wil- 
liams puts his case on another ground, namely, that this was a 
payment made by the plaintiff after he had become aware of those 
facts upon which he now rests his present demand. Now, it is true 
that an acceptance which had been given by the plaintiff for a 
sum of money, including the sum which he now seeks to recover, 
was paid by him on its becoming due, and it became due after his 
ignorance had been dispelled and he had knowledge of the fact. 
But the acceptance was given while he was still in ignorance, and 
when it became due he paid it under protest. Mr. Williams says 
that makes no difference as regards the effect of the payment. Be 
it so ; but there are other circumstances which I think ought to be 
taken into account. In the first place, the acceptance was given 
for a larger sum, although it comprehended the sum now under 
discussion ; and a man might well doubt whether he would be at 
liberty, when he has given a bill or acceptance upon which he is 
partially liable, to refuse payment of that acceptance when due. 
But it is quite clear that if the acceptance was in the hands of 
a third party who might hold it for value, he would have no 
defence. I gather from the statement of the case that this bill 
had been given for the purpose of being discounted by the defend- 
ants ; that the bill had been discounted, and was at that time in 
the hands of third parties ; added to which, the father's name was 
to it as the drawer of the bill with the concurrence of the defend- 
ants, and the father's commercial position, as well as the plaintiff's, 
would have been seriously affected by this bill being refused pay- 
ment. As I have already said, as regards part of it, the plaintiff 
was not in a situation to deny the validity of the bill, and I do not 
think he was bound to expose himself to an action, which certainly 
would have been brought against him or his father. I do not 
think, therefore, that that is such a payment as disentitles the 
plaintiff to recover in the present action. 

BLACKBURN, J. I also agree that the plaintiff is entitled to 



230 COURT OF EXCHEQUER. [L. R. 

1871 recover the sum of 1000. The real difficulty is in ascertaining 
KBNDAL what the facts are. When once they are ascertained, if they are 
WOOD ascertained in the way in which I understand them, I do not think 
there is any difficulty in point of law. The plaintiff here, at the 
time of the dissolution of the partnership, was under the belief 
that there was a sum of more than 5000 due to the de- 
fendants ; and, being under that belief, he gave them money to 
that amount, including, among other things, bills of exchange, 
the last of which was for 2000. Before that bill of exchange 
became due, he believed he had discovered, and as I shall shew 
presently he was right in believing it, that so much was not due, 
and that when he accepted these bills on the supposition that 
this 5000 and more was due from himself and Woolnough (his 
partner) to the defendants, he was in reality paying 1000 too 
much. Entertaining that belief when the 2000 bill was coming 
due and I certainly agree with my Lord that the inference of 
fact is that the bill was in the hands of a third person and that 
he could not refuse to pay it he wrote to the defendants, telling 
them that the acceptance was given under a mistake, but that 
for the sake of his father's credit he sent the 2000 that the bill 
might be taken up and not returned ; but he does it under protest 
and without the slightest waiving of his right to demand back 
the money, it having been paid to the defendants under a mistake 
of facts. Mr. Williams argued that whatever might be the merits 
of the case in other respects, inasmuch as the plaintiff knew all 
that he now knows, his honouring the bill under those circum- 
stances made the payment by him a voluntary payment. But I 
take it that if the bill was in the hands of a third person, which I 
am inclined to think it was, he had no defence, and he could not 
help himself. But suppose it was not, I think if a man accepts a 
bill under those circumstances and meets and retires it to save the 
credit of his father and his own, he is quite as much under com- 
pulsion and pressure as where, for example, he pays money under 
protest for goods detained under a mistaken claim of money due 
for their carriage ; so that that point lies clearly out of the case. 

Then comes the question : When he accepted this bill which 
he ultimately honoured, was it under a mistake of facts ? The 
belief under which he accepted the bill was, that he and his fellow- 



VOL. VI.] EASTEK TERM, XXXIV VICT. 251 

partner owed the sum of money which is stated to be the balance 1871 
of the partnership account; and the allegation is, that facts after- KKNDAL 
wards came to his knowledge which shewed that 100>)Z. of that 
had been discharged, and that the balance was 10007. less than 
he had originally supposed. Now, it is in my mind utterly 
immaterial whether those facts shew that there was not liability 
because he had a defence in equity ; or there was not liability 
because he had a defence at law. He paid the money under the 
belief that he was liable to pay it. I think it is important to men- 
tion this, because it is to my mind quite immaterial whether the 
facts shew a defence at law or in equity. 

I now come to the great difficulty in the case ; and it here be- 
comes important to recollect what a partner is. A partner is a joint 
tenant with his fellow partner of the property of the firm, and in 
respect that there is a joint tenancy of the property of the firm, 
partners are obliged to be joined in suing, according to Jones v. 
Yates. (1) If, then, you can shew that one of them is a party to the 
thing complained of, you drive the aggrieved partner over to equity 
instead of law, and this is one of the instances in which the 
jurisdiction of the courts, not being united in one, sometimes does 
produce injury. Again, besides the partners being joint tenants, 
they are also agents for each other ; and here there is no difference 
between law and equity. The one partner is agent for the other 
partner, and it is an agency to do all the matters which are within 
the ordinary scope of business which the partners carry on ; 
but when a partner does that which is beyond this prima facie 
authority with which he is entrusted, those who deal with him do 
so at their peril. Now, the giving of partnership money for a 
private debt is beyond the ordinary authority implied by the 
name of partner. Those who receive the money ought to satisfy 
themselves that the partner paying it really has authority ; or, 
probably, if they can shew that the other partner whom he seeks 
to bind has so conducted himself that they had reasonable ground 
to suppose there was authority, it would do as well. But where, as 
in this case, the partner had not authority in fact, but the de- 
fendants believed honestly, and perhaps if the defaulting partner 
was a man of good repute they might say reasonably, that there 

(1) 9 B. & G. 532. 



252 COUET OF EXCHEQUER. [L. K. 

1871 was authority ; then, if they are wrong, they cannot fall back on the 
KENDAL other partner, and say he is bound, merely because of their belief, 
unless they shew that the other partner has conducted himself so 
as to authorize that belief. [The learned judge then referred to 
the facts of the case in detail, and proceeded : ] I think, when the 
defendants received this money from the hands of the partners 
they were chargeable with the money as against the partnership, 
and if they appropriated it afterwards to Woolnough's own debt, 
they were doing it in the honest but unwarrantable belief that he 
had authority so to appropriate it ; and consequently they are not 
discharged of the money. Therefore, when the plaintiff Kendal 
paid the whole of the money, he paid it under a mistake of fact ; 
the fact was that only the smaller sum was due, and consequently 
he is now entitled to recover the 1000Z. sued for. 

KEATING, J., concurred. 

MELLOE. J. I am of the same opinion. I entirely agree that 
this money is recoverable, unless the plaintiff paid it through his 
own default or voluntarily with a full knowledge of the facts. It 
is contended that by meeting his acceptance he really did so pay 
it ; but I cannot assent to that view of the case. He had given 
the acceptance before the discovery was made, and he was, I think, 
bound to meet it, considering that he was at all events partially 
liable upon it, and that his father's credit, as well as his own, was 
involved. It does not seem to me in any sense a voluntary pay- 
ment. With regard to the allegation that the plaintiff was guilty 
of carelessness and negligence in not discovering the mistake when 
he first investigated the accounts, I do not think it made out. 
Being, therefore, not guilty of any negligence, and not having 
made the payment voluntarily, I think he is entitled to succeed 
in this action. 

MONTAGUE SMITH, J. I am of the same opinion. The main ques- 
tion is, whether the partnership account ought to be credited with 
two sums of 500Z. which were paid by Woolnough under the circum- 
stances mentioned in the case. I think the partnership account 
ought to be so credited. If the two sums were paid irrevocably 



VOL. VI.] EASTER TERM, XXXIV VICT. 2. r >3 

as payment of the partnership debt, then of course so much of the 1871 
partnership debt was wiped out, and there would be a good defence KENDAL 
by both the partners, and of course by one of them, at law ; but * 
if that was not an irrevocable payment, the two sums were re- 
ceived by the defendants with the full knowledge that those 
moneys were partnership moneys, and they received them from one 
partner in payment of his separate debt. Having that knowledge, 
it seems to me that they cannot retain that money for the separate 
debt when it turns out in point of fact that \Voolnough had no 
authority whatever from his partner so to appropriate the money. 
When a separate creditor of one partner knows he has received 
money out of partnership funds, he must know at the same time 
that the partner so paying him is exceeding the authority implied in 
the partnership that he his going beyond the scope of his agency ; 
and express authority, therefore, is necessary from the other part- 
ner to warrant that payment. Now I quite agree with what has 
been stated, that there may be conduct on the part of the other 
partner which may be a substitute for express authority ; conduct 
which may lead persons dealing with the other partner to suppose 
that he had that authority given to him, but in this case there is 
no authority whatever; on the contrary, express authority is 
negatived, and there is no evidence of any conduct on the part 
of the plaintiff by reason of which the defendants may reasonably 
have supposed he had given such authority. That being so, I 
have no doubt that if these accounts were taken in a court of 
equity the defendants would be compelled to place those two 
sums of 5007. to the credit of the partnership account. In ignorance 
of that state of things the plaintiff has paid the two sums out of 
his own moneys, which he would not have paid if he had known 
the true state of things. In the view I take of the matter, there- 
fore, he is entitled to recover them back. I entirely agree with 
the rest of the Court, for the reasons given, that the fact of taking 
the bill up after knowledge of the circumstances does not make 
the money he so paid to take it up a voluntary payment. At the 
time he gave the bill, which I conceive to be the material point of 
time, he was in ignorance of the facts, and his having come to the 
knowledge of them. before the bill became due does not make the 
taking it up a voluntary payment. 



254 COUET OF EXCHEQUER. [L. E. 

1871 LUSH, J. I am of the same opinion. Assuming this 1000?. to 

KEKDAL be a payment originally by Woolnough to his own private account, 
then as the defendants knew the money was partnership money, I 
think that, although they believed that Woolnough had the autho- 
rity of his partner to appropriate that money to his own account, 
they cannot justify keeping it to that account, there being no 
authority in fact. The mistaken belief that the one partner had 
that authority cannot prejudice the right of the other, if the other 
did nothing to induce such a belief. As already observed, the 
defendants, knowing that it was partnership money, knew that in 
appropriating that money to his private account, Woolnough was 
exceeding the authority belonging to him as a partner ; and there- 
fore they took the money, under the circumstances, at their peril ; 
and the fact being that the one partner had .not the authority of 
the other, they cannot keep it. Then it is alleged that there is a 
difficulty in the way ; that if an action had been brought for this 
balance the action must have been brought against both the 
partners, and inasmuch as the defendant Kendal in that action 
would have been bound by the act of Woolnough, he could not 
have proved a joint payment of a joint account. For aught I 
know, that may be true ; but then I think it clear if Kendal could 
not have relieved himself at law, he might in equity ; for there he 
might have compelled the defendants to rectify the account, and 
so have relieved himself from the obligation. 

Now, he gave the bill in question, which he ultimately paid, in 
ignorance of the real facts of the case ; facts the knowledge of 
which would have enabled him, either at law or equity, to relieve 
himself of the obligation to pay. And, according to all the autho- 
rities, if the 1000Z. had been originally paid in money, instead of 
being paid by means of a bill, the plaintiff would have been 
entitled to recover it back. Is he the less entitled because he gave 
a bill, and because the knowledge of the fact comes to him before 
the bill comes due ? It cannot be said that the taking up of an 
acceptance by a mercantile man can be deemed a voluntary pay- 
ment ; but at all events, to make out such an argument as that, it 
ought to be clearly and distinctly stated as a fact, that the bill, at 
the time he took it up, was not in the hands of a third party. 
We are left entirely in the dark on this point. I should rather 



VOL. VI.] 



EASTER TERM, XXXIV VICT. 



infer, if I were driven to draw an inference, that the bill had been 
discounted, and was in the hands of some person for value ; at all 
events, it is not necessary one way or the other to raise such a 
question as that. Therefore I agree with the rest of the Court in 
thinking that the judgment ought to be reversed. 



BRETT, J., concurred. 



Judgment reversed. 



Attorneys for plaintiff: Peed, Plielps, & Sidgwiclc. 
Attorneys for defendants : Johnson & Weather alls. 



255 



1871 

KKNDAL 

v. 
WOOD. 



DUNCAN AND ANOTHER v. HILL. 

Stock Exchange Usages Principal and Agent Principal's Liability to Broker 
for Broker's Default. 

The plaintiffs, brokers on the London Stock Exchange, were instructed by the 
defendant, who was not a member of the house, to buy certain shares in various 
public undertakings for him for the account of the 15th of July, 1870. Subse- 
quently he told the plaintiffs to carry over the shares to the account of the 20th of 
July. This w;is done, and the defendant was furnished with an account shewing 
him to be liable to a difference of 1GSSL 19s. On the 18th of July the plaintiffs 
were declared defaulters, and, in accordance with the rules of the Stock Exchange, 
all their transactions were closed, ami accounts made up at the prices current on 
that day, without the knowledge of or any reference to the defendant. The result 
was that there was a difference against the defendant of 6013/. 13s. 5(/. In an 
action to recover this sum : 

Held, that the rules of the Stock Exchange, regulating the mode of dealing 
with defaulters, bound the defendant ; that the plaintiffs, though themselves the 
defaulters, might take advantage of those rules, and that therefore they were 
entitled to recover. 

DECLARATION. 1st count : for money paid, interest, work done, 
commission, and money due on accounts stated. 

2nd count: that the plaint iffs, as the defendant's brokers, and 
upon his retainer, contracted with divers persons on his behalf 
for the purchase and sale, by the plaintiffs, of certain stocks and 
shares on the terms that the defendant would indemnify the 
plaintiffs in respect of such contracts ; that all conditions were 
fulfilled, &c., yet the defendant did not indemnify the plaintiffs, 
whereby they were required to pay, and have paid, divers sums of 



May 1. 



256 COUET OF EXCHEQUER. [L. B. 

1871 money for damages for the non-performance by the defendant of 
DUNCAN the said contracts. 

HILL ^ rc ^ count : that the plaintiffs, as the defendant's brokers and 

upon his retainer, contracted with divers persons for the purchase 
and sale of certain stocks and shares, upon the terms that such con- 
tracts should be performed or settled by the defendant according 
to the usage of the London Stock Exchange ; that all conditions 
were fulfilled, &c., yet the said contracts have not been performed 
or settled as agreed, whereby the plaintiffs were forced to settle 
and close the said contracts by sales and purchases of the said 
stocks and shares at a loss to the plaintiffs. 

Pleas : 1. To 1st count : never indebted. 2. To 2nd count : 
traverse of agreement to indemnify. 3. To same : that the plain- 
tiffs did not, as the defendant's brokers or upon his retainer, contract 
with divers or any persons, on his behalf, for the purchase or sale 
by the plaintiffs of stocks or shares. 4. To same : that the plaintiffs 
were not damnified. 5. To 3rd count : traverse of agreement that 
the contracts should be performed or settled, according to the 
usage of the London Stock Exchange. 6. To same : a similar plea 
to the 3rd. 7. To same: traverse of the breach. 8. To 2nd and 
3rd counts: that after the making of the alleged agreements, 
and before breach, it was agreed between the plaintiffs and the 
defendant that the said contracts should be closed and settled by 
the plaintiffs, as his brokers, on a day then agreed on for reward to 
the plaintiffs, and on the terms that the defendant should indemnify 
them against any loss arising from the closing and settlement of the 
contracts on that day ; and the plaintiffs, before breach, accepted 
the said agreement in full satisfaction and discharge, and thereby 
released and discharged the defendant from further performance of 
the agreements in the declaration alleged. 

Eeplieation, joining issue on all the pleas, and to the 8th plea 
a new assignment for other breaches. The defendant pleaded to 
the new assignment similar defences to those pleaded to the 2nd 
and 3rd counts of the declaration, except the 8th plea. Issue. 

At the trial before Kelly, C.B., at the London sittings after 
Michaelmas Term, 1870, the following facts were proved : 

The plaintiffs were, at the time of the occurrences which gave 
rise to this action, brokers on the London Stock Exchange ; the 



VOL. VI.] EASTER TERM, XXXIV VICT. 257 

defendant is a gentleman resident in London. He is not a member 1871 
of the Stock Exchange. In June, 18(J9, he commenced dealing in DUNCAN 
stocks and shares through the plaintiff, Mr. Duncan, as his broker, 
and went on doing su up to the month of July, 1870. On the 1st 
of July Mr. Duncan was joined in business by the other plain- 
tiff, Mr. Wreford. The defendant continued to employ them as 
his brokers in the same manner as he had hitherto employed 
Mr. Duncan, and they bought for him, by his instructions, a large 
quantity of stocks and shares in various public undertakings for 
the account of the 15th of July. The defendant not wishing to 
take up these stocks and shares on the 15th of July, directed 
the plaintiffs, on the 13th of July, to carry them over to the next 
account day, the 29th of July. This was done, and he was fur- 
nished by them with an account shewing him to be liable to pay 
a difference of 16887. 19s. The plaintiffs were declared defaulters 
on the 18th of July, and, according to the rules of the Stock 
Exchange (1), all their transactions were peremptorily closed, and 
their accounts made up by the official assignees at the prices 
current on that day, without any communication with the prin- 
cipals. The result was that the difference against the defendant 
was 6013Z. 13s. 5d., which the plaintiffs now sought to recover on 
an alleged contract of indemnity. The learned judge thought that 
the whole of the usages and practice of the Stock Exchange was 
imported into the contract between the parties, and accordingly 
directed a verdict for the plaintiffs for this amount, with leave to 

(1) The following are the rules under mon the defaulter before such meetings, 
which the committee of the Stock to enter into a strict examination of 
Exchange act in the case of a broker every account, to investigate any bar- 
becoming a defaulter : gains suspected to have been effected at 

'142. A member unable to fulfil his unfair prices, and to manage the estate 

engagements shall be publicly declared in conformity with the direction of the 

a defaulter by direction of the chair- majority of the creditors present, 
man, deputy chairman, or any two " 169. The official assignees shall 

members of the committee. publicly fix the prices at which a de- 

" 167. Two or more members shall be faulter's transactions shall be closed, 

appointed annually by the committee such prices to be those current in the 

to act as official assignees, whose duty market immediately lx;fore the declara- 

it shall be to obtain from a defaulter his tion ; but in the event of a dispute as 

original books of account, and a state- to the prices named, they shall be fixed 

ment of the sums owing to and by him, by two members of the committee." 
to attend meetings of creditors, to sum- 



258 COUKT OF EXCHEQUER. [L. R. 

1871 the defendant to move to enter a nonsuit, or to reduce the damages 
DUKCAN to 1688/. 9s. It was arranged that the defendant should at once 
pay this latter sum to the plaintiffs, who had paid it for him in the 
first instance, on the 15th of July. 

In Hilary Term last a rule was obtained, calling on the plaintiffs 
to shew cause why the verdict should not be set aside and a 
nonsuit entered, or why the damages should not be reduced to 
1688?. 19s. (paid to the plaintiffs), on the ground that the further 
damages claimed were not damages recoverable against the de- 
fendant, and that in that respect the plaintiffs were not legally 
damnified, or entitled to indemnification, or otherwise to recover 
in the action. 

April 17, 27, 28. Sir J. D. Coleridge, S.G., Powell, Q.C., and 
Day, shewed cause, and contended that the defendant was bound 
by all the usages of the Stock Exchange, and that the difference 
against him, having been declared and estimated by the assignees 
in the ordinary way, must be paid by him : Grissettv. Bristowe (1). 

Sir J. B. KarsIaJce, Q.C., J. Brown, Q C-, and J. 0. Griffits, in 
support of the rule. It must be admitted that the usages of the 
Stock Exchange, which govern the ordinary transactions of sale 
and purchase of stocks and shares, are incorporated into contracts 
made with persons who were not members of the Exchange ; but 
a defaulting broker has no right to avail himself of a usage regu- 
lating the mode of dealing \\ith defaulters in order to fix his 
principal with an additional liability. The usage relied on by the 
plaintiffs is not in any way connected with a bargain for the sale 
or purchase of shares. It is as to a matter wholly collateral to the 
contract. Moreover the sale was behind the defendant's back ; he 
neither knew nor could know anything about it. 

[They cited Taylor on Evidence (3rd ed.), p. 952, s. 1075 ; Addi- 
eon on Contracts (6th ed.), p. 935 ; Sutton v. Tatliam (2) ; Pollock 
v. Stables (3); Mollett v. Robinson (4); Maxted v. Paine (2nd 
action) (5) ; Hodgldnson v. Kelly (6).] 

Cur. adv. vuli. 

(1) Law Rep. 30. P. 112 ; Law (4) Law Rep. 5 0. P. 646. 

Rep. 4 C. P. 36. (5) Law Rep. 4 Ex. 203 ; ante, p. 

(2) 10 A. & E. 27. 132. 

(3) 12 Q. B. 765. (6) Law Rep. 6 Eq. 496. 



VOL. VL] EASTER TERM, XXXIV VICT. 259 

May 1. KELLY, C.B. The question in this case, which we are called 1871 
upon to determine, and which lies at the root of all cases of con- DCXOAN 
tracts entered into npon the Stock Exchange, is whether any one of 
the public who enters into such a contract through his broker, 
who luurit necessarily be a member of the Stock Exchange, impliedly 
agrees that all rules and customs of the Stock Exchange affecting 
the rights and liabilities of all parties to those contracts, or who 
become interested in them after they have been made, shall be 
imported into and become part of the contract, and be binding 
upon himself, the principal, as well as his agent the broker ; and 
that depends upon whether it is a reasonable condition and con- 
sistent with justice, and with the principles of the law of England, 
that these rules and customs shall be so imported into the contract, 
and that an agreement to that effect is founded upon a sufficient 
consideration moving to the individual in question from all the 
other parties to the contract, and involving benefits and advan- 
tages to the party contracting, which make it reasonable and 
just. 

The plaintiffs are brokers upon the Stock Exchange, and the 
defendant a merchant, who, for about eighteen months before the 
time of the contract in question, had effected a number of trans- 
actions to a very large amount in the purchase and sale of shares 
through the plaintiffs upon the Stock Exchange. Upon many of 
these he had realized large profits, upon others he sustained con- 
siderable losses; and on or about the 13th of June, 1870, he in- 
structed the plaintiffs to purchase for him a considerable number 
of shares in various public undertakings at the market price of the 
day, and this contract was carried over at his request from time to 
time, and at length to the account-day, the 15th of July. On the 
13th of July, when it was necessary either to carry on the con- 
tract to the next account-day, the 29th of July, or to settle the 
transaction for the 15th, by paying the difference between the price 
agreed upon for the shares and the market price of the shares on 
that day, the 15th, the defendant being unable to find the amount, 
which on that day would have been 1G88Z. 19s., instructed the 
plaintiffs to carry on the contract from the 15th to the 29th. On 
the 15th, the defendant being unprepared with the money, it was 
advanced and paid by the plaintiffs. On the 18th, the plaintiffs, by 

VOL. VI. 2 A 3 



260 COUET OF EXCHEQUER. [L. R. 

1871 reason of the failure of many for whom they had effected contracts, 
DONOAN and, among others, of the defendant, to make good their payments, 
became unable to meet their engagements, and were declared 
defaulters under rule 142 of the Stock Exchange. On that day, 
official assignees having been appointed under rule 167, they 
proceeded to close the plaintiffs' transactions, and, among others, 
the contract in question made on behalf of the defendant. The 
sum payable in order to settle the transaction, and in effect to 
relieve the plaintiffs and the defendant from the contract, amounted 
to 6013Z. 13s. 5d,, and to recover this sum from the defendant the 
action was brought. To refer to the figures: the loss on the 13th 
was the before-mentioned sum of 1688?. 19s., and upon the 15th, for 
carrying over to the 29th, the sum of 4,037Z. 8s. od. ; and upon the 
18th, as before stated, 6013Z. 13s. 5d. ; and if the contract had not 
been closed on that day, but had been, as agreed upon, carried over 
to the 29th, the loss would have amounted to 13,4047. 18s. 9d. 
This transaction, supposing the defendant and the plaintiffs to be 
identified, and the defendant to have indemnified the plaintiffs 
by paying the money upon the close of the transaction, on the 
18th of July, the day of their failure, would have been simply 
this : the defendant instructed the plaintiffs, his brokers, to 
purchase, and the plaintiffs contracted to purchase accordingly the 
shares in question at the market price of the day ; and when the 
first account-day arrived, and when the defendant was bound to 
find the money, the agreed price of the shares, and was unable to do 
so, the settlement was at his request carried over or postponed from 
time to time, until at length the 29th of July was the day appointed 
when he would be bound either to pay the whole amount of the 
purchase-money agreed upon, and take up and receive the shares, 
or to ascertain the price of the day, and if it should be less than 
the price contracted for, to cancel the contract and pay to the 
seller the difference between that sum and the value of the shares 
at the market price of the day. But upon the failure of the 
brokers, and the obligation upon them attaching to close the con- 
tract upon the 18th, it became necessary for him either to take 
up the shares and pay the whole price agreed upon, or to cancel 
the contract and pay the difference between that sum and the 
value of the shares at the market price of the day. 



VOL. VI.] EASTER TERM, XXXIV VICT. 261 

Upon these facts the question for the Court to determine, as in 1871 
GrisseU v. Bristowe (1) , Maxted v. Paine (2nd action) (2), and many DUNCAN 
other cases, is whether one of the public who employs a broker cr a 
jobber to enter into a contract on his behalf on the Stock Exchange, 
must not be held to have entered into the contract subject to and 
incorporating into it all the reasonable rules and usages prevail- 
ing upon the Stock Exchange, and which are absolutely binding, 
upon their own members. 

If it be not so, it is difficult to understand how any one of 
these contracts can be said to have been entered into at all ; for 
at every step of the transaction, from the original making of the 
contract to its complete and final performance, something is done 
not expressly specified or mentioned, or referred to, by any of the 
parties at the time that it is made, which is in fact done by reason 
and in pursuance of these rules and usages, and which could not 
or would not be done but for their existence and their effect and 
operation upon the performance of the contracts. 

Thus, in this case, if the defendant were to insist that he had 
simply entered into a contract through his broker with the jobber, 
for the purchase of the shares in question, to be delivered and paid 
for on the 15th of July, and on that day were to pay the money 
into the hands of his broker and demand the shares ; the jobber 
may in the meantime, on the name day, have given in the name of 
another seller, who had not been objected to, and had become 
insolvent and was unable to deliver the shares. The defendant, 
the purchaser, demands the shares of the jobber. lie answers that 
his contract was to deliver the shares or to name another as the 
seller; and that he has named another accordingly, and is dis- 
charged. And this is true ; for the contract into which he had 
entered is subject to the rules of the Stock Exchange ; and by 
those rules he had the alternative of naming another seller. The 
result is, that unless the purchaser's contract was also subject to 
those rules, no contract has been made ; for the defendant's con- 
tract without the rules is absolute, and the jobber's being according 
to the rules is conditional, and so there would be no contract at 
all. It is necessary, therefore, to consider whether it is one of the 

(1) Law Rep. 3 C. P. 112 ; Law (2) Law Rep. 4 Ex. 203 ; ante, p. 
Rep. 4 C. P. 36. 132. 

2 A 2 3 



262 COUET OF EXCHEQUER. [L. E. 

1871 conditions of the contract binding upon the principal that he shall 
DOKCAN identify himself with his agent the broker, and take upon himself 

HILL a ^ h' s duties and liabilities in conformity with these rules and 
usages ; and therefore whether, when the nature of all these trans- 
actions is considered, there is a good consideration moving to the 
principal and binding upon him, for the incurring of such, an 
obligation. 

To refer, in the first place, to the authorities, the principle 
of the decision in Grissett v. Bristowe (1) is, that the usages 
of the Stock Exchange, if not unreasonable, are imported and 
incorporated into all contracts entered into by any of the public 
for the purchase or sale of stocks or shares upon the Stock 
Exchange, and, through the medium of brokers or jobbers, mem- 
bers of the Stock Exchange and themselves bound by these 
usages. There the plaintiff had entered into a contract for the 
sale of certain shares in Overend & Gurneys upon the Stock 
Exchange, through the medium of a broker, with the defendant, a 
jobber, both members of the Stock Exchange, the sale and pur- 
chase to be carried into effect and completed on the account-day, 
the 15th of May, 1866. Before that day, and in due time, accord- 
ing to the rules of the Stock Exchange, the defendant gave in the 
names of certain other persons not parties to the contract which 
had been made by the plaintiff, but who were to be the ultimate 
purchasers of the shares the plaintiff had contracted to sell. These 
persons were not objected to within the time allowed for that pur- 
pose by the rules of the Stock Exchange ; and such purchasers, 
though the plaintiff had done all that in him lay to complete the 
performance of his part of the contract, failed to register the 
transfer of the shares, or to pay the amount of some subsequent 
calls, which the plaintiff thereupon became liable to pay. He 
then brought his action against the defendant for non-performance 
of the contract to indemnify; and it was held that, under the 
above circumstances, the defendant having, in pursuance of the 
rules of the Stock Exchange, given in the names of the ultimate 
purchasers, to which no objection within due time had been made, 
had thus transferred the liabilities of a purchaser from himself to 

(1) Law Eep. 3 C. P. 112; Law Eep. 4 C. P. 36. 



VOL. VI.] EASTEK TERM, XXXIV VICT. 263 

the persons so named, had ceased to be a party to the contract, 1S71 
and so was not liable to the action. DUNCAN 

Here, then, a term or condition was held to have been imported 
into the contract, and to form part of it, to the effect that if the 
purchaser should, within a certain time, deliver in the names of 
another person or persons to be substituted for himself as the pur- 
chasers of the shares, if no objection be made to them by the seller 
\\ithin a given time, they shall be deemed the purchasers under 
the contract, and the defendant, the original actual purchaser, dis- 
charged. No such condition was ever expressly mentioned or 
alluded to at the time when the plaintiff instructed his broker to 
enter into the contract. It was wholly inconsistent with all that 
the contract would prima facie import, inasmuch as it enabled the 
original contracting party, the seller, to discharge himself from 
the performance of the contract altogether by substituting another 
person or persons as contracting parties who might be, and actually 
proved to be, wholly insolvent. 

Several other cases have since been decided in accordance with 
the judgment of the Exchequer Chamber in Grissell v, Bristowe. (1) 
Among them is the case of Maxled v. Paine (2nd action) (2), affirmed 
in error in the Exchequer Chamber. (3) There upon a contract for 
the sale of shares originally made between a broker and a jobber, 
but transferred by the jobber to an ultimate purchaser by giving in 
the name Goss on the name day, who was not objected to within 
the ten days allowed for that purpose by the usage of the Stock 
Exchange, it appeared that Goss was not the actual purchaser, and 
was a man wholly without means, who had consented to the use of 
his name for a small pecuniary consideration, and who was there- 
fore unable to perform the contract, or to indemnify the plaintiff 
against calls that had been subsequently made. But these circum- 
stances were unknown to the jobber, who had originally entered 
into the contract of purchase, and so there was no fraud. And it 
was held that the usage, although its effect was to substitute an 
insolvent for a solvent purchaser, formed part of the contract, and 
was binding upon all parties ; that Goss was alone liable as the 

(1) Law Rep. 3 C. P. 112 ; Law Rep. 4 C. P. 30. 
(2) Law Rep. 4 Ex. 203. (3) Ante, p. 132. 



264 COUET OF EXCHEQUER. [L. R. 

1871 ultimate purchaser ; and that the defendant was discharged. It is 
DUNCAN remarkable that the judges of the Court of Common Pleas who 
HILL originally decided the case of Grissell v. Bristowe (1), including 
Byles, J., who pronounced an admirable judgment, dissenting from 
that of the other members of the Court, assumed that by the rules 
of the Stock Exchange, the jobber having given in the name of 
another purchaser on the name day, the seller or broker had no 
power to object to him, and that the liability of the jobber was at 
an end. In the case, however, last referred to of Maxted v. Paine 
(2nd action) (2), this point, in consequence of the insolvency of the 
nominee, came prominently before the Court, and a power in the 
seller to object to the nominee appearing to be part of the custom, 
it ceased to be unreasonable, and was therefore properly treated 
as incorporated into and forming part of the contract. 

We have now to consider whether the custom and the rules in 
relation to defaulters, and their operation upon the rights and 
liabilities of the parties, are also to be held reasonable, and so 
incorporated into and forming part of the contract in this case. 
The rules which govern the question are, first, rule 49 : " That the 
Stock Exchange does not recognize in its dealings any other parties 
than its own members ; and that every bargain, therefore, whether 
for account of the member effecting it, or for account of a principal, 
must be fulfilled according to the rules, regulations, and usages 
of the Stock Exchange." It follows from this rule that if a con- 
tract be made upon and between members of the Stock Exchange, 
it must of necessity, with all its incidents and consequences, be 
carried into effect from beginning to end in conformity to those 
usages, or it must altogether fall to the ground, and never be 
carried into effect at all. It is difficult, therefore, to see how any 
one can maintain an action upon such a contract without admitting 
the full operation upon it of the rules and usages of the Stock 
Exchange, under which alone it can come into existence or be 
carried into effect. 

We must next consider, then, what the usage is which is sought 
to be incorporated into the contract upon which this action is 

(1) Law Rep. 3 C. P. 112 ; Law (2) Law Rep. 4 Ex. 203 ; ante, p. 
Rep. 4 C. P. 36. 132. 



VOL. VL] EASTEE TEEM, XXXIV VICT. 265 

brought. For this purpose we must look to the rules 142, 167, ISTI 
168, 169, the effect of which is, that upon a member of the Stock DUNCAK" 
Exchange, as the plaintiffs are in this case, becoming unable to 
meet his engagements, he may be publicly declared a defaulter, and 
official assignees may be appointed to investigate and wind up the 
contracts into which he has entered, and to close his transactions 
at the price current in the market on the day before he shall have 
been declared a defaulter. Applying these rules to the present 
case, upon the plaintiffs becoming defaulters, upon the llth of July 
their assignees were required to close their transactions, including, 
among others, the contract in respect of which this action is 
brought, and, in other words, to settle the contract by the pur- 
chaser paying to the seller the price, or as much as should remain 
unpaid of the price, of the shares contracted for, and taking up 
the shares, or by paying the difference between that price and the 
market price of the day, and so putting an en'l to the contract. 
The plaintiffs in this case being the purchasers, they are called on 
to pay the one or the other of these sums, the difference, in case of 
the contract being brought to an end, being 6013Z. 13s. 5d. This 
sum therefore became payable on the 18th of July under this con- 
tract, and, according to these rules, by the purchaser to the seller. 
The principal and the real purchaser was the defendant. The 
actual purchasers were the plaintiffs, and this sum being thus pay- 
able by them according to the rules of the Stock Exchange, the 
simple question in the case is, whether upon this entire transaction 
there is a contract in law on the part of the defendant, the real 
principal, as purchaser, to identify himself with the plaintiffs, his 
agents, and take upon himself and satisfy the liability to which their 
failure had subjected him; in other words, to complete the per- 
formance of the contract which he had entered into according and 
in conformity to the foregoing rules. Nothing can be more clear 
than that, if such be not the implied contract between the plaintiffs 
as the agents, and the defendant as the principal, the contract must 
fall to the ground altogether ; for the actual makers of the con- 
tract, the brokers and the jobber, having entered into it as a con- 
tract according to and incorporating the rules, and one of these 
rules being, that upon the failure of the brokers the contract must 



266 COUET OF EXCHEQUER. [L. E. 

1871 be settled and brought to an end ; then as that can be done only 
DCNOAN by the payment of the difference in question, if the defendant, the 
HILL principal, severs himself from his agents, the brokers, and refuses 
thus to carry the contract into effect according to the rules, he 
must renounce it altogether ; and if the shares had risen in value 
to any amount, he could not have enforced the contract, and 
obtained the benefit of the rise. By the rules of the Stock 
Exchange the broker is the only party recognized, and he, as pur- 
chaser, is liable to the jobber, as seller, for the price of the shares 
purchased and sold ; and it would be absurd to contend that when- 
ever the price becomes payable the principal, the defendant in this 
case, is not bound to enable his agent to perform his contract by 
finding and paying over, through him or otherwise, the amount 
due to the seller, and yet that if the shares had risen in value he 
could have enforced the performance of the contract either by 
insisting upon the delivery and transfer to himself of the shares, 
or upon the payment to him of the difference according to the 
price of the day. It is, in truth, but one of the many incidents to 
a contract of this nature, that in case the broker shall become a 
defaulter he is liable to pay immediately the price of the shares, 
and so to bring the contract and the performance of it to a conclu- 
sion. And although in this particular case the principal is, no 
doubt, subjected to a disadvantage, it is more than countervailed 
by the many advantages resulting to him from his being enabled 
by means of these rules to enter into a contract at any moment 
for the purchase or sale of any quantity of stock or shares at the 
market price of the day. 

The great and important question arising in all these cases, and 
next to be considered, is, whether upon contracts thus made upon 
the Stock Exchange, between its members and according to its 
rules and usages, it is reasonable that the principal should be 
identified with the agent or broker, and bound and liable, as the 
agent himself is, to the performance of the contract made in all its 
incidents and with all its consequences. 

To enable us to consider this question, we must consider what the 
nature of most of these contracts is, and what are the benefits and 
advantages accruing to the public and constituting the considera- 



VOL. VI.] EASTER TERM, XXXIV VICT. 2G7 

tion in respect of which they take upon themselves all the risks and 1871 
liabilities of their agents, the members of the Stock Exchange, DUNCAN 
arising out of or connected with these contracts. We must, in the 
first place, remember that the broker and the jobber, between 
whom the contract is actually made upon the Stock Exchange, 
become themselves personally liable for its performance to each 
other, and to all who, under the operation of the rules of the 
Stock Exchange, have been or may become parties to or interested 
in the contract. 

And but for these two persons, the broker and the jobber, taking 
upon themselves these liabilities, no one of the public could enter 
into any of these contracts at all. For how would any one, de- 
sirous of investing say a sum of 4500 in American stock on the 
15th of July in any year, find some other person ready to sell and 
transfer to him, at that very time, that exact amount of stock at 
the market price of the day ? The principal then receives, as 
consideration for the liability which he incurs, the convenience 
that a purchase or sale may be effected of the desired amount 
and at the desired time, which he would find it impossible to make 
except through the medium of a broker, while the broker could 
not effect the contract at all but by agreeing that it should be 
taken to be made in conformity to the rules and usages of the 
Stock Exchange, and by making himself personally liable for the 
performance of it, according to those rules and usages. 

The disadvantages, therefore, to which the public may occasion- 
ally become liable upon contracts of this nature are slight, indeed, 
compared with the great benefits which they derive from being 
enabled to enter into contracts or sales for any amount, or any 
description of stocks or shares which they may desire to buy or 
sell, and at the precise time at which they may wish to effect such 
transactions. We think, therefore, upon the authorities referred 
to and upon reason and principle, that in this case, and in all such 
cases, there is a good and sufficient consideration for the liabilities 
which the principal may incur, in this that the agent or broker 
takes upon himself a personal liability to perform the contract, 
while the principal becomes entitled to all the benefits an-.l 
advantages which can result from its performance. 



268 



V. 

HILL. 



COUET OF EXCHEQUEE. 



[L. E. 



1871 Upon these grounds I am of opinion that the plaintiffs are 

DUNCAN entitled to the judgment of the Court. 



CHANNELL and PIGOTT, BB., concurred. 



Rule discharged. (1) 



Attorneys for plaintiffs : Whites, Eenard, & Floyd. 
Attorney for defendant : Oehme. 



(1) In Duncan and Another v. Bee- 
son, which was argued on the 1st of 
May, 1871, the facts were similar to 
those in the preceding case, with the 
addition that Beeson had already paid 
the plaintiffs, on the 15th of July, the 
difference to which he was liable on 
the carrying over of the shares. 



THE COUIIT (Kelly, C.B., Channell 
and Pigott, BB.) did not consider this 
circumstance affected the plaintiffs' 
right to recover, 

Powell, Q.O., and Murpliy, shewed 
cause. 

J. Brown, Q.O. (Philbrick with him), 
supported the rule. 



END OF EASTEE TEEM, 1871. 



VOL. VI.] 26!) 



CASES 



DETERMINED BY THE 



COUKT OF EXCHEQUER 



AND BY THE 



COURT OF EXCHEQUER CHAMBER, 

ON ERROR AND APPEAL FROM THE COURT OF EXCHEQUER, 



IN AND AFTKR 



TKINITY TEEM, XXXIV VICTOEIA. 



ROBINSON v. DAVISON. 1871 

Conditional Contract Contract to do. an Act requiring Personal Skill Illness a 'J 2b- 
Excuse from Performance. 

The plaintiff contracted with defendant's wife (as her husband's agent), that 
she should play the piano at a concert to be given by the plaintiff on a specified 
day. She was, on the day in question, unable to perform through illness. The 
contract contained no express term as to what was to be done iu case of her 
being too ill to perform. In au action against the defendant for breach of this 
contract : 

Held, that his wife's illness and consequent incapacity excused him, inasmuch 
as the contract was in its nature not absolute, but conditional upon her being well 
enough to perform. 

DECLARATION : That the plaintiff was a professor and giver of 
musical entertainments, and thereupon, in consideration of a 
certain fee to be paid by the plaintiff to the defendant, the de- 
fendant promised the plaintiff that Arabella Davison, the wife of 
the defendant, should perform at a certain musical entertainment 
to be given by the plaintiff, and would procure a vocalist to sing 






270 COURT OF EXCHEQUER. [L. R. 

1871 thereat, and provide a fit pianoforte for the purpose of the enter- 
KOBINSON tainment, and all conditions were performed, &c. ; yet Arabella 
Davison did not nor would perform, and the defendant did not 
procure a vocalist or piano, whereby the plaintiff was unable to 
give the entertainment, and suffered loss in consequence. 

Plea (inter alia) 9 : That the promise alleged was made subject 
to the term and condition that, if Arabella Davison should be 
unable to perform at the said musical entertainment in conse- 
quence of illness, the defendant should be exonerated and dis- 
charged from fulfilling his promise; and that Arabella Davison 
was unable to perform in consequence of illness. Issue. 

At the trial, before Brett, J., at the last Lincolnshire Spring 
Assizes, the record was by leave amended by the addition of a 
count alleging that the contract between the plaintiff and de- 
fendant required Mrs. Davison, in case of disability to perform 
through illness, to give notice thereof to the plaintiff within a 
reasonable time after she knew that she would be unable to 
perform ; that she was disabled through illness, yet failed to give 
notice within a reasonable time, whereby, &c. 

Pleas to added count : 1. Denying the alleged term as to giving 
notice ; and 2. Alleging performance of it. Issue. 

The plaintiff is a professor of music and giver of musical enter- 
tainments at Gainsborough, in Lincolnshire, and the defendant 
is the husband of an eminent pianist known professionally 
as Miss Arabella Goddard. In December, 1870, the plaintiff 
entered into an engagement with Mrs. Davison, that she should 
perform on the piano at a concert at Brigg, in the same county, 
on the evening of the 14th of January, 1871, for an agreed 
fee, Mrs. Davison to provide a piano and a vocalist upon the 
occasion. Nothing was expressly said as to what was to be done 
in case Mrs. Davison should be ill on the day in question, or in 
any way incapacitated from performing. The defendant's responsi- 
bility in respect of his wife's contract was not disputed. On the 
morning of the 14th of January the plaintiff received a letter by 
post from Mrs. Davison, stating that she was too ill to attend at 
the concert. A medical certificate was enclosed. Upon receipt 
of this communication the plaintiff despatched messengers to 
the people in the neighbourhood who had taken tickets, to 



VOL. VI] TEINITY TERM, XXXIV VICT. 271 

prevent their coming, and took all other steps he could to 1871 
give notice to the public that the concert was unavoidably post- ROBINSON 
poned. All the money he had taken was, of course, returned. j) A y ]S N . 
If Mrs. Davison had telegraphed the fact of her illness on tho 
13th of January instead of writing, the plaintiff could have put 
off the concert at a less expense than that which was actually 
incurred. 

The plaintiff gave evidence at the trial that he had lost about 
701. by the postponement of the concert. With regard to the 
added count, he stated his expenses for messengers, &c., to be 
2Z. 13s. 9d. beyond what he would have had to spend had he had 
earlier notice. He further stated that, owing to the notice being 
so late, he lost the opportunity of providing an efficient substitute 
for Mrs. Davison. Had he received it before, ho could, he said, 
have done so, and have given the concert. Allowing the same fee 
to a substitute as he had contracted to pay Mrs. Davison, he put 
his loss at about 40/. 

On the part of the defendant, evidence was given that Mrs. 
Davison was so ill that she could not have fulfilled her en- 
gagement without danger to her life ; and the plaintiff did not, 
eventually, dispute the fact. The learned judge directed the jury 
that the contract was subject to the implied condition that the 
defendant was excused if his wife was so ill as to make it unreason- 
able, on the ground of illness, that she should perform her engage- 
ment ; and as to the added count, that if she was disabled by 
illness, or was so ill as to be unable to keep her engagement, she 
was bound to give the plaintiff notice within a reasonable time ; 
and that, if they thought that reasonable notice had not been 
given, the plaintiff was entitled to a verdict either for his out-of- 
pocket expenses or for his whole loss, less the fee he would have 
had to pay a substitute, according as the jury might think him 
right or wrong in supposing he could have obtained an efhVieiit 
substitute, had the fact of Mrs. Davison's illness been telegraphed 
to him on the 13th. The jury found a verdict for the defendant 
on the issue raised by the ninth plea to the original count in tho 
declaration, and for the plaintiff, upon the issues on the pleas to 
the added count, for 21. 13s. ( Jd. The judge refused to certify for 
costs. 



272 COURT OF EXCHEQUER. [L. R. 

1871 In Easter term last a rule was obtained calling on the defendant 

fioBiKsoN to shew cause why a new trial should not be had, on the ground 
DAVI N ^at *^ e J u( ^S e misdirected the jury in telling them that the 
contract was subject to the implied condition that the defendant 
should be excused if Mrs. Davison was so ill as to make it unrea- 
sonable, on the ground of illness, that she should perform ; also on 
the ground that the damages were inadequate ; also calling on the 
defendant to shew cause why he should not pay costs under 30 & 
31 Viet. c. 142, s. 5. (1) 

O'Brien, Serjt., and Wills, shewed cause. The illness and dis- 
ability of the defendant's wife excused the defendant from per- 
forming this contract. The engagement to play the piano was one 
which she and she only could fulfil. It was a personal service, 
from which illness exonerated her. Suppose she had died ; clearly 
no action for a breach could have been maintained, and incapacity 
caused by no default of her own equally excuses. The contract 
is based upon an implied understanding that the artist shall be 
physically capable of performing. The performer's health is the 
basis of the contract ; and it is fallacious to say that, because, no 
express term exonerating from the duty to perform in case of illness 
was inserted in the contract, therefore it is an absolute contract. 
It really is a conditional one : Sparrow v. Sowgate (2) ; Williams v. 
Lloyd (3) ; Taylor v. Caldwell (4) ; Boast v. Firth (5). The case of 
Paradine v. Jane (6) has no application here; the defendant 
there contracted to pay rent in all events. Again, in Hall v. 
Wright (7), although a majority of the judges held that it was no 
answer to a declaration alleging an unconditional promise to marry, 
that the result of marrying would be dangerous to the defendant's 
life, the decision is based partly on considerations connected with 
the exceptional nature of the marriage contract, and partly on the 
pleadings in the case. The decision of the dissentient judges, and 

(1) It was agreed that the learned (2) Sir W. Jones. 29. 

judge in effect had ruled that the de- (3) Sir "W. Jones, 179. 

fendant was excused only by the abso- (4) 3 B. & S. 826 ; 32 L. J. (Q.B.) 

lute incapacity of his wife to play, 164. 

although the word " unreasonable" had (5) Law Rep. 4 C. P. 1. 

been used in one passage of the sum- (6) Aleyn, 26. 

ming-up. (7) E. B. & E. 746 ; 29 L. J. (Q.B.)43. 



VOL. VL] TRINITY TERM, XXXIV VICT. 273 

the reasoning of the majority, is in favour of the defendant in this ISTI 

case. ROBINSON 

With regard to the added count, the plaintiff was not entitled 
to a verdict, for no notice was necessary at all. Or assuming that 
there was an implied condition that notice of incapacity should 
be given, it was fulfilled. At all events the damages for its non- 
fulfilment are not inadequate. As to the rule for costs, the plain- 
tiff failed on the main question, and could not have got even the 
small verdict he did without an amendment, which was of doubtful 
propriety, as it raised a question which the parties had not intended 
to try : Willcin v. Reed (1). The mere fact of the questions to be 
tried involving legal difficulties is no reason for granting costs, 
where the amount recovered is insignificant : Craven v. Smith (2) ; 
Gray v. West (3). 

Seymour, Q.C., and Cave, in support of the rule. As to the 
costs, a rule for them should be granted, on the ground of the 
difficulty of the legal questions connected with the case, which 
could not have been satisfactorily settled in the county court. 
[Casts were also asked for on other grounds brought before the 
Court on affidavits, to which, however, it is unnecessary to refer.] 
As to the two chief questions first, if there was an implied 
condition that illness excused Mrs. Davison from performance, it 
is also a condition that notice within a reasonable time should be 
given to the plaintiff. Here the notice was, according to the 
finding of the jury, too late to be of any use, and the damages 
given are inadequate. Secondly, the defendant is entitled to a 
new trial on the ground of misdirection. He chose to make an 
express contract for his wife that she should do a certain thing 
on a specified day, and if illness prevented her he must pay 
damages. He might have made a conditional contract if he had 
chosen, but having bound himself absolutely, the law will not 
imply the condition. There is a difference between an obligation 
imposed on a man by law, and one imposed by his own act. In 
the latter case, however unreasonable the contract may be, he must 
perform it, or pay damages for non-performance : Paradine 

(1) 15 C. B. 192 ; 23 L. J. (C.P.) 193. (2) Law Rep. 4 Ex. 146. 

(3) Law Sep. 4 Q. B. 175. 



274 COURT OF EXCHEQUER. [L. R. 

1871 v. Jane (1); StuUbs v. Holy well Ey. Co. (2) ; Farrow \.Wihon (3); 

ROBINSON Benjamin on the Contract of Sale, p. 424; Lord Clifford v. Watts (4). 

D Vl It was proved, indeed, that Mrs. Davison could not have attended 
the concert without danger to her life ; but in Hall v. Wright (5) 
the defendant pleaded he could not marry without danger to his 
life, yet he was held not to be excused. That case is a direct 
authority in favour of the plaintiff here. 

KELLY, C.B. The main question in this case is one of great 
importance, and deserves attentive consideration. It appears that 
the defendant's wife, an eminent pianist, was under a contract to 
appear at a concert given by the plaintiff at Brigg, on the 14th of 
January, 1871. She was prevented by illness from fulfilling the 
engagement, and it is contended on her behalf that her illness and 
consequent incapacity to perform constitute a lawful excuse for 
non-performance of the contract. I am of opinion that this conten- 
tion is well founded. This was a contract for the performance of a 
service which could alone be undertaken by the defendant's wife. 
She could not depute it to any one else, as it depended on her own 
personal skill ; and the rule which governs such cases was, I think, 
correctly laid down by my learned predecessor Pollock, C.B., in 
Hall v. Wright (5) who says (6) : " Now it must be conceded on 
all hands that there are contracts to which the law implies ex- 
ceptions and conditions which are not expressed. All contracts 
for personal services which can be performed only during the life- 
time of the party contracting, are subject to the implied condition 
that he shall be alive to perform them ; and should he die, his 
executor is not liable to an action for the breach of contract occa- 
sioned by his death. So a contract by an author to write a book, 
or by a painter to paint a picture within a reasonable time, would, 
in my judgment, be deemed subject to the condition that, if the 
author became insane, or the painter paralytic, and so incapable 
of performing the contract by the act of God, he would not be 
liable personally in damages any more than his executors would 

(1) Aleyn, 26. (4) Law Rep. 5 C. P. 577. 

(2) Law Rep. 2 Ex. 311. (5) E. B. & E. 746 ; 29 L. J. (Q.B.) 

(3) Law Rep. 4 C. P. 744. 43. 

(6) E. B. & E. at p. 793. 






VOL. VI.] TRINITY TERM, XXXIV VICT. 275 

be if he Lad been preventer! by death." The learned Chief Baron 1871 
was, it is true, one of the dissentient judges in that case, but the UOKIXSOX 
principle he enunciated appears to have been one to which the 
majority assented ; and it clearly applies to the present case. Here 
an artist contracted to play the piano at a concert ; but if he or 
she should be unable by reason of illness or other cause to perform, 
the performance of the contract is, upon the principle laid down, 
excused. The law is also well stated in Taylor v. CaldweU (1), by 
[Blackburn, J. There the defendant had contracted to supply the 
plaintiff with a room in a music-hall on a particular occasion. 
Before that occasion arrived the hall was burnt down, and the 
defendant was held not to be liable on his contract. The existence 
of the room was the foundation on which both parties proceeded, 
and the fire, which happened through the default of neither, ex- 
cused both. The learned judge says (2) : "There are authorities 
which we think establish the principle that where, from the nature 
of the contract, it appears that the parties must from the beginning 
have known that it could not be fulfilled, unless when the time 
for the fulfilment of the contract arrived some particular specified 
thing continued to exist, so that, when entering into the contract, 
they must have contemplated such continuing existence as the 
foundation of what was to be done ; there, in the absence of any 
express or implied warranty that the thing shall exist, the contract 
is not to be construed as a positive contract, but as subject to an 
implied condition that the parties shall be excused, in case before 
breach performance becomes impossible from the perishing of 
the thing without default of the contractor." I think this principle 
is directly applicable here ; the parties must have known their 
-contract could not be fulfilled unless the defendant's wife was in a 
state of health to attend and play at the concert on the day named. 
Then comes the question whether it was necessary to give notice 
within a reasonable time to the plaintiff of Mrs. Davison's disability, 
.and whether, assuming that it was, reasonable notice was given; 
or, if not, whether the plaintiff has recovered inadequate damages. 
Now, I do not feel it necessary to decide whether or not notice is 
-necessary, but it may well be that it is, at any rate where tlio 

(1) SB. & S. 82C, ; 32 L. J. (<).!',.) 101. 

(2) 3 D. & S., at 1-. 833. 
VOL. Vf. 2 B 3 



276 COURT OF EXCHEQUER. [L. R- 

1871 illness which disqualifies the performer precedes by any consider- 
ROBINSON able interval the day of the engagement, and where for some time 
DAVISON before that day he is certain that he will be unable to fulfil his 
contract. But I assume in this case that notice was necessary, 
and that it was not given within a reasonable time ; that Mrs. 
Davison should have telegraphed on the 13th of January, instead 
of sending a letter by the evening post. What the difference was 
between the loss actually occasioned to the plaintiff, and that 
which he would have sustained had a telegram been sent, was 
properly left to the jury, and I see no reason to interfere with 
their finding. The damages do not seem to me to be insufficient. 
Lastly, as to the application for a rule for costs under the 
County Court Act, 1867, s. 5, I do not think we should grant it. 
The plaintiff failed on the substantial question which he intended 
to try, and he is not entitled to a certificate for costs because he 
succeeded as to this trifling claim, which might well have been 
tried in a county court ; and even upon this he could not have 
recovered, unless the learned judge had thought fit to amend the 
declaration. For these reasons, therefore, I am of opinion that the 
rule should be discharged. 

My Brother Channell, who heard the argument, but has been 
obliged to leave the court, entirely agrees with this judgment. 
But he declines to express any opinion as to whether notice of the 
performer's disability was requisite. For the purposes of this 
rule he assumes that it was, but sees no reason to disturb the 
verdict on account of the damages being inadequate. 

BRAMWELL, B. I am of the same opinion. I certainly think 
we ought not to grant a rule for costs. The plaintiff went to trial 
upon a cause of action which he failed to sustain, but succeeded, 
after having obtained leave to amend, in recovering a small sum 
upon his fresh cause of action. It is said that difficult questions of 
law were involved, but, as I have often said on other occasions, the 
true criterion is not the difficulty of the questions to be tried, but 
the amount recovered. And where the amount is below the limit 
specified in the County Court Act, then there should be no costs, 
unless indeed a question of right, or some important principle of 
general application, is involved. 



VOL. VI.] TRINITY TEBM, XXXIV VICT. '277 

Then with regard to the amendment, assuming it was right to 1871 
make it, and further assuming that the direction of the judge as KOIHNSO* 
to the necessity of notice was right, I think the plaintiff has re- DA ^ ON 
covered as much damages as he is entitled to. There remains 
only the main question, as to which I wish to add a few words. 
It is admitted that this lady was not fit to play ; that it would 
have been dangerous to her life to go to the concert, and if sho 
had gone that she could not have played efficiently. I think 
under such circumstances we may well hold that it was part of 
the bargain not merely that she should be excused from playing, 
but that she should not be at liberty to play. It cannot be, 
surely, that she would have had a right to insist on performing 
her engagement as best she could, however ineffectually that 
might have been, and then demand payment of her fee from 
Mr. Robinson. 

It is contended, however, that to say that illness incapacitating 
from performance excuses, is to engraft a new term on an express 
contract. But this is really a fallacy, and one which obtained I 
say it with respect with some of the judges \vho composed the 
majority in Hatt v. Wright (1) ; not, however, with all, because 
some of them intimated that the contract of marriage might be 
subject to the qualification insisted on by the defendant, and based 
their judgments on the fact that the contract declared on was 
unconditional in its terms, and on that ground held that the plea 
was no answer to it. The fallacy consists, first, in supposing there- 
is in the first instance an absolute contract ; and, secondly, that 
the new term is a condition added to its express terms ; whereas 
the whole question is what the original contract was, and whether 
it was a contract with or without a condition. I may add, further, 
with regard to Hall v. Wright (1), that I retain the opinion I there 
expressed, and I think it entirely applicable to the present case. 
This is a contract to perform a service which no deputy could 
perform, and which, in case of death, could not be performed by 
the executors of the deceased : and I am of opinion that by virtue 
of the terms of the original bargain incapacity cither of body or 
mind in the performer, without default on his or her part, is an 
excuse for non-performance. Of course the parties might ex- 

(1) E. B. & E. 746 ; 29 L. J. (Q.B.) 43. 

2 B 2 3 



278 COURT OF EXCHEQUER. [L.R. 

1871 pressly contract that incapacity should not excuse, and thus pre- 
"lioBiNsoN elude the condition of health from being annexed to their agree- 

.. * ment. Here they have not done so ; and as they have been silent 
DAVISON. J J 

on that point, the contract must in my judgment be taken to have 
been conditional, and not absolute. This is the conclusion I come 
to upon principle, and the cases cited seem to me in accordance 
with it. 

CLEASBY, B. I am of the same opinion, and will add nothing 
except on the main question. This is a contract that a lady 
should perform as a pianist ; that is, should undertake a duty re- 
quiring a high degree of skill and taste, and one which if not 
performed properly can hardly be said to have been performed at 
all. It is, moreover, a duty which could not be done by a deputy, 
but only by the lady herself, and, that being so, I think that dis- 
ability or incapacity, caused by the act of God, excuses the defen- 
dant. The whole contract between the parties was based upon the 
assumption by both that the performer would continue living, and 
in sufficient health to play on the day named. This was really 
the very foundation of the promise, and where the foundation fails 
the promise built on it must fail also. Now here the foundation 
was wanting, for there was on Mrs. Davison's part an entire and 
total incapacity to do the thing contracted for. The law which 
governs the case is well stated in the judgment of Brett, J., in 
Boast v. Firth (1). His observations apply here, and I entirely 

concur in them. 

Rule discharged. 

Attorneys for plaintiff: T. H. & A. E. Oldman. 
Attorney for defendant : Lumleij. 

(1) Law Rep. 4 C. I 5 ., at pp. 8, 9. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 27! 



BAILEY v. JOHNSON. 1871 

Bankruptcy Act, 1869 (32 & 33 Viet. c. 71), ss. 39, 81 Annulling Bankruptcy Ju1 "' - 
Property " reverting " Bankrupt " Mutual Dealing " Set-off 1 Money 
nod and received. 

The defendant having been adjudicated bankrupt on a debtor summons issued 
by a banking firm of H. & II., a trustee was appointed, who realized the estate, 
and paid the proceeds into the bank of H. & H. in pursuance of a resolution of 
creditors. The firm of H. & H. were afterwards adjudicated bankrupts, the sum 
paid in by the trustee then standing to his credit in their books. Afterwards the 
order adjudicating the defendant bankrupt was reversed on appeal, and no order 
was made under s. 81 of the Bankruptcy Act, 18G9, as to his property. In an 
action brought by the plaintiff, as trustee in the bankruptcy of II. & H., against 
the defendant, to recover the amount of his debt to them : 

Held, that the defendant was entitled to set off the amount so paid into the 
bank by the trustee in his bankruptcy, either as an equitable set-off or as a 
mutual credit. 

ACTION by the trustee in bankruptcy of the estate of K. A. 
Kerrison & R. Kcrrison for money due from the defendant to 
the bankrupts and Sir Robert Harvey, deceased, on a banking 
account, and for money due on accounts stated between the plain- 
tiff as trustee and the defendant. 

Pleas : 1. Never indebted. 2. Payment. 3. On equitable 
grounds, that the defendant, having been adjudged bankrupt, and 
one E. M. Bullard having been appointed trustee of his property 
as such bankrupt, and Bullard having, as such trustee, become 
possessed of moneys of the defendant equal in amount to the 
plaintiff's claim, lent the same, before the bankruptcy of R. A. 
Kerrison & R. Kerrison, to the bankrupts and Sir R. Harvey ; 
that the adjudication in bankruptcy against the defendant was 
duly annulled, whereupon the amount so lent by Bullard reverted 
to, and became, before action brought, due to the defendant, 
which amount the defendant claimed to set off against tlie plain- 
tiff's claim. 4. To so much of the plaintiff s claim as related to 
money due on accounts stated between the plaintiff as trustee and 
the defendant, set-off of money due at the time of the bankruptcy 
of R. A. Kerrison & R. Kerrison from them and Sir R. Harvey, 
deceased, to the defendant. Issue. 

The cause was tried before Blackburn, J., at the Suffolk Spring 



280 COUET OF EXCHEQUER. [L. R. 

1871 Assizes, 1871. It appeared that the defendant was, in March, 
~BAILEY 1870, indebted to the banking firm of Harvey & Hudson (con- 
, v - T isting of R. A. Kerrison, E. Kerrison, and Sir Robert Harvey) in 
the sum of 4507. 

On the 26th of March a debtor summons was issued by the 
bank against the defendant, on Avhich he was, upon the 17th of 
May, adjudicated bankrupt. On the 31st of May, E. M. Bullard 
was appointed trustee. He proceeded to realize the estate, and, 
in pursuance of a resolution of creditors under s. 30, paid into the 
bank proceeds to the amount of 6651. 

On the 16th of July, Sir Robert Harvey having in the mean- 
time died, the firm were adjudicated bankrupts, and the plaintiff 
was appointed trustee. 

Subsequently the defendant's bankruptcy was annulled. (1) 

It was contended that upon the annulling of the defendant's 
bankruptcy the amount due to Bullard, as trustee, became the pro- 
perty of the defendant under s. 81 of the Bankruptcy Act, 1869, 
and that he was now entitled to avail himself of it as a legal or 
equitable set-off against the plaintiff's claim, or as a mutual credit. 

The learned judge directed a verdict to be entered for the 
defendant on the 3rd and 4th pleas, reserving to the plaintiff 
leave to move to enter the verdict for him. A rule having been 
obtained accordingly, 

Brown, Q.C., Bulwer, Q.C., and Graham, shewed cause. The 
defendant had a good set-off against the plaintiff. By s. 30 of the 
Bankruptcy Act, 1869 (32 & 33 Viet. c. 71), and the supple- 
mentary 109th rule, the trustee is bound to pay whatever money 
he receives on account of the estate into such bank as the majority 
of creditors in number and value, or the committee of inspection, 
or the Court, may direct ; or, failing any direction, into the Bank 
of England. The money in question was paid in pursuance of 
these provisions, and was, when so paid in, the property of the 
creditors, but subject to the contingency of the bankruptcy being 
annulled. The bankruptcy being annulled in fact, and no order 
made under s. 81, the money then, by virtue of that section, 
reverted to and became the property of the bankrupt, subject to 
(1) See Ex parte Johnson, Law Rep. 5 Cb. 741. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 281 

any payment which might have been already made out of it. . 1871 
That the word " property " in s. 81 includes choses in action follows BAILEY 
from the express provision of the interpretation clause (s. 4) ; and 
even without that provision the result would be the same : Queens- 
bury Industrial Society v. Pickles. (1) The cases decided under 
the earlier Bankruptcy Acts, such as Smallconibe v. Olivier (2), 
can no longer be considered applicable, as present Act contains 
an express provision, not to be found in the earlier statutes, that 
the property shall revert to the bankrupt, which must be con- 
strued according to the ordinary sense of the words. In fact, there- 
fore, it was always the property, not of the creditors, but of the 
defendant ; although, by virtue of the saving in s. 81, dealings with 
it by the trustee properly made between the making and the 
annulling of the adjudication were unimpeachable. The interpo- 
sition of Bullard, the trustee, makes no difference, the plea being 
oquitablc : Cochrane v. Green. (3) The bankers having full notice 
and knowledge of all the circumstances, there was in equity a good 
set-off at the time of the bankruptcy of Harvey & Hudson, a set- 
off which would have been allowed in bankruptcy, or would have 
been a foundation for a bill by the defendant to restrain an action 
by the bank : Clark v. Cort (4) ; Bodenham v. Hoshins (5) ; Ex parte 
Adair, In re Gross. (6) Having regard, indeed, to the words of the 
statute, it is probable that the defendant could have maintained an 
action against the bank for money had and received, in which case 
there would be a legal set-off: Marsh v. Keating. (7) It supports 
this view that the defendant could, on the other hand, not have 
maintained any action against Bullard, who had acted regularly, 
and was protected by the statute ; if, therefore, he could not main- 
tain an action against the bank, the words of s. 81 would, with 
respect to money so situated, have no legal effect at all. But even 
if there was not a set-off either at law or in equity, there was, at 
any rate, a "mutual credit" or a " mutual dealing " within s. 3! >, 
and therefore a matter for set-off in bankruptcy. 
[They also referred to Forster v. Wilson. (8) ] 

(1) Law Rep. 1 Ex. 1. (5) 2 D. M. & G. 903; (reported 

(2) 13 M. & W. 77. below, 21 L. J. (CIO 864) 

(3) 9 C. B. (N.S.) -148; 30 L. J. (G) 24 L. T. (N.S.) 198. 
(O.P) 97. (7) 1 Bin.-. (X.C.) 198. 

(4) Cr. & Ph. 154. (8; 12 M. & W. 191. 



282 COUKT OF EXCHEQUER. [L. R.. 

1871 O'Malley, Q.C., Metcal/e, and Merewether, in support of the rule. 

BAILEY This money was never the property of the defendant at all, but of 
JOHN'SOK ^ ne creditors. Even assuming that it reverted to him under s. 81, 
this would only be by means of a right to sue in Bullard's name ; 
and he acquired no such right until after the bankruptcy of Harvey 
& Hudson. But the intention of s. 81 is, that an order shall be 
made, which never has been made here ; the order may direct 
that the property shall vest in some other person, or that it 
shall revert to the bankrupt ; but without an order it is impossible 
to adjust the rights and relations that may have arisen during 
the bankruptcy. There was, therefore, at the time of the bank- 
ruptcy of Harvey & Hudson no right of set-off either legal or 
equitable, nor has any such since arisen. But, further, s. 81 is 
not applicable at all to the case ; for here there has not been 
the annulling of a bankruptcy, but only an order reversing the 
decision of the Court below. It is still more clear that there has 
been no mutual credit or mutual dealing between the defendant and 
the bank. He was no party to the transaction between Bullard 
and the bank, nor did Bullard in any way act as his agent. 

KELLY, C.B. I am of opinion that this rule should be dis- 
charged. Before the bankruptcy either of the defendant or of 
Harvey & Hudson, the bank were creditors of the defendant to the 
amount of between 400?. and 500/. Afterwards, the defendant 
having been made bankrupt, a sum of money was, before the bank- 
ruptcy of Harvey & Hudson, paid into the bank by Bullar>l, the 
trustee in the defendant's bankruptcy. Harvey & Hudson knew 
that they were creditors of the defendant ; they knew also that the 
money paid in by Bullard was not his money, but that he was a 
trustee for the defendant's creditors ; and they also knew that pro- 
ceedings were pending to annul the defendant's bankruptcy, and that 
if these proceedings were successful, Bullard would be trustee no- 
longer for the creditors of the defendant, but for the defendant him- 
self. What then were the rights and liabilities of the parties ? If 
under the circumstances the effect of the proceedings together was 
to make the money really the money of the defendant when it was 
paid in ; then, as at the time of their bankruptcy Harvey & Hudson 
would clearly have had a right to a set-off if they had been sued by 



VOL. VI.] TRINITY TEKM, XXXIV VICT. 283 

tlie defendant in the name of Bullard for the amount paid in, so also 1871 
an equitable right of set-off would have existed in favour of the de- 
fendant in an action by Harvey & Hudson upon the balance duo, 
or he would have had a right to file a bill to restrain the action. 
Now that this was in reality the money of the defendant is clear 
from the case of Bodenliam v. Hoskins (1) and Ex parte Adair, In 
re Gross (2), which shew that if the whole case were before the 
Court of Bankruptcy or the Court of Chancery, this money would 
there be treated as his. Upon the other hand, it is equally clear 
that after the proceedings were annulled the trustee would no 
longer have the rights of a trustee for the creditors, and he would 
not be entitled to obtain the money out of the bank. 

Reference has been made to s. 81 of the Bankruptcy Act, 1869, 
and to the effect of the reservation contained in it. That reserva- 
tion was, I think, inserted to meet the cases where, before the 
annulling of the bankruptcy, various interests had been created and 
rights vested, as, for instance, by the distribution of some of the 
assets amongst some of the creditors, but not amongst others of them, 
and it was necessary that the Court of Bankruptcy should have 
power to take possession of the property in the hands of the trustee, 
or to order him to retain it for certain purposes. Here, however, 
no such order has been made. That question, therefore, being out 
of the way the only sensible meaning which can be attached to the 
word " revert " is, that what was apparently the property of the 
trustee at the time of the annulling of the bankruptcy, shall 
thereupon become the property of the person whose bankruptcy 
has been annulled, as if it had always been his. 

Upon the whole, therefore, the result is, that this money was, 
when it was paid in, really and in equity the money of the de- 
fendant, although the trustee might, during the continuance of the 
bankruptcy lawfully dispose of it ; that on the bankruptcy being 
annulled he and he alone could claim it ; and that he may, there- 
fore, now set it off against the claim of the bank upon him. 

MARTIN, B. 1 am of the same opinion, though I have had 
great doubts upon it. It is clear that mutual debts or credits to 

(1) 2 D. M. & G. 903; (reported below, 21 L. J. (Ch.) ^C4.) 
(2) 24 L. T. (X.S.) 198. 



28-1 COURT OF EXCHEQUEE. [L. E. 

1871 be set off must exist at the time of the bankruptcy ; the 39th 
BAILEY section of the present Act being in substance the same as the 
J *so.v mutual credit clause of the old Act, though differently ex- 
pressed. Now, here, at the time of the bankruptcy of Johnson, 
Harvey & Hudson were entitled to prove against Johnson's estate, 
for the full amount of their debt, but afterwards, and before their 
own bankruptcy, they become indebted, not to Johnson, but to 
Bullard, in the sum sought to be set off. I have been satisfied, 
however, in the course of the argument, that the Act transferred to 
Johnson the debt due from the bank to Bullard ; and we may, 
therefore, read the phrase " mutual credit " as including the right 
of Johnson, who may be deemed a person claiming through or 
under Bullard. The set-off is therefore established. 

BRAMWELL, B. I am of the same opinion : and I entertain no 
doubt upon the matter beyond what one must always feel in deal- 
ing witli questions involving equitable rights. If Johnson's bank- 
ruptcy had not been superseded, the plaintiff in this action could 
not have insisted on proving against Johnson's estate, and leaving 
Bullard to prove against the estate of Harvey & Hudson ; there 
would be as it were a mutual credit between the two estates. Then 
what is the effect of the bankruptcy being superseded ? I should 
have a difficulty in saying there was a set-off if we had to rely on 
the word " revert," in s. 81. I give no opinion on the effect of that 
provision, or upon the question whether he could have sued the 
bank in his own name. But I think that the cases cited shew that 
Johnson could follow the money ; and that he was entitled to give 
notice to the bank to pay him, and not to pay Bullard. It is said 
that difficulties may arise in some cases; that may be so, but none 
are suggested here. Therefore I think Johnson had a good equit- 
able right to the money paid by Bullard into the bank, and, if so, 
he takes it with the title which Bullard had, including the right- to 
set-off which the one estate had against the other. I think there- 
fore, that the plea is made out. 

A difficulty occurred to me, which I mention, in order to remove 
it. Suppose the plaintiff had brought an action against Johnson, 
and the bankruptcy had not been superseded, there would have 
been no set-off; and if so, how can a right accrue to him by the 



VOL. VI.J TRINITY TERM, XXXIV VICT . 285 

superseding of it? Two answers may be given. The first is, that 1871 
by s. 12, no action can be proceeded with against the bankrupt BAILEY 
without the leave of the Court ; and that under s. 13 no Court 
would allow such an action to be brought by the trustee on be- 
half of a person who was the petitioning creditor, and who knew 
of the interest which the bankrupt had in the money, without 
allowing that sum to be set off. Another answer is, that though 
Johnson could not have pleaded a set-off in such an action, he can 
now plead it, because there has been a dealing between them 
which has resulted in a debt to him, though it would not have 
done so if the bankruptcy had continued; there is therefore a 
mutual credit. 

CLEASBY, B. I am of the same opinion. It seems to me that 
there is a third answer to the difficulty, which my Brother Brain- 
well has raised, that Johnson could not plead this set-off, because 
the money was not his, but Bullard's. It has been said that the 
property in chattels can be followed, but not the property in a 
debt ; but in equity a debt is as assignable as a chattel is in a court 
of law. " If A. having a debt due to him from B. should order 
it to be paid to C., the order would amount, in equity, to an 
assignment of the debt, and would be enforced in equity, although 
the debtor had not consented thereto:" Story on Eq. Jurisp. 
1044. The effect, then, of the assignment of a debt is, that the 
whole title and interest is in equity vested in the assignee of the 
creditor, with a right to use the name of the assignor to recover 
it. Here Johnson takes the debt by virtue of the Act, which says 
it shall, upon the bankruptcy being superseded, belong to him ; 
and if so, he has the same title which Billiard had, and by relation 
can make use of that right, the Act placing him in the position of 
the trustee with all its advantages. 

But I am disposed to go further, and to think that he would 
have a title at law to recover this as money had and received to 
his use. I think this is shewn by Marsh v. Keating (1), whore the 
plaintiff, whoso stock had been sold under a forged power of 
attorney, was held entitled to recover the price at which it was 
sold from the person receiving the proceeds. The case of Allan- 
(1) 1 Bing. N. C. IDS. 



286 COUET OF EXCHEQUER [L. E. 

1871 son v. Atkinson (1) is also in point. There similarly the assig- 
BAILEY nees were held entitled to recover the proceeds of goods of the 
JOHNSON, bankrupt improperly disposed of by the sheriff, from the creditors 
to whom they had been paid, as money had and received. These 
cases shew that if Harvey & Hudson had not become bankrupt, 
Johnson could have maintained an action against them. To the 
same effect is Follett v. Hoppe(2), where the circumstances were 
very similar to those of Allanson v. Atkinson (1), and where 
Maule, J., says, " In general where money which belongs to one 
person has been received by another, without that person's autho- 
rity, the action for money had and received will lie to recover it 
back." Therefore, if the money remained in the hands of the bank, 
I think Johnson might, by virtue of the Act, have sued Harvey & 

Hudson. 

Rule discharged. 

Attorneys for plaintiff: Sole, Turner & Turner. 
Attorney for defendant : Lewis Hand. 



June 5( DE LANCEY v. THE QUEEN. 

Legacy Duty Act (36 Gfo. 3, c. 52), s. 19 Money to be laid out in Land 
Unconverted Fund falling into Possession. 

A testator, who died in 1800, by his will, bequeathed to trustees a fund to be 
laid out in land, which was to be conveyed to the use of C. (his eldest son) for 
life, remainder to C.'s first and other sons in tail male, remainder to J. (his second 
son) for life, remainder to J.'s first and other sons in tail male; remainder to his 
own right heirs. 

C. and J. died without issue and intestate, and S., the testator's only daughter, 
became entitled to the fund, being heir-at-law of the testator, as well as of C. and 
J. She died intestate, and at her death the fund, which had never been invested 
in land, passed to E., who was grandnephew of the testator, and heir-at-law of 
the testator and of C., J., and S. : 

Held, that under s. 19 of 30 Geo. 3, c. 52, duty was payable by E. at 5 per 
cent, as on a bequest from S. 

PETITION of right, setting out the facts stated in the case of In 
the Matter of De Lancey's Succession (3), and the decisions of this 
Court and the Court of Exchequer on the question there raised, 

(1) 1 M. & S. 583. (2) 5 C. B. 226, at p. 242 ; 17 L. J. (C.P.) 76, at p. 81. 

(3) Law Rep. 4 Ex. 345 ; 5 Ex. 102. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 287 

stating that the petitioner, Edward Floyd De Lancey, a grand- 1871 
nephew of the testator, was the heir-at-law of Charles Stephen, D E LANCEY 
James, and Susan De Lancey, and entitled to the fund be- T|IE Q UEEN 
queathed by the testator to be laid out in land ; that the Commis- 
sioners of Inland Revenue refused to return to the petitioner the 
sum paid to them upon their erroneous assessment of succession 
duty at 5 per cent., and claimed to retain it, although they had 
made no assessment of legacy duty in respect of the fund, and 
although the legacy duty payable was only at the rate of 2i per 
cent., and claiming a return of the whole of the sum so paid, or the 
balance, after deducting legacy duty at 2 per cent., with interest. 

Plea : That the legacy duty payable on the fund was at the rate 
of 5 per cent., being duty payable as on a legacy or residue of 
personal estate coming to the petitioner from Susan De Lancey. 

Demurrer. 

Sir J.B. Karslake, Q.C. (Toivnsend with him), for the petitioner. 
The Exchequer Chamber having now decided that legacy duty, 
and not succession duty, is to be paid, the question of the rate 
must be determined by 36 Geo. 3, c. 52, s. 19. (1) By the pro- 

(1) 36 Geo. 3, c. 52, s. 19: "Any persons shall become entitled to an 
sum of money or personal estate di- estate of inheritance in possession in 
rected to be applied in the purchase of the real estate to be purchased there- 
real estate shall be charged with, and with, or with so much thereof as shall 
pay, duty as personal estate, unless the not have been applied in the purchase 
same shall be so given as to be enjoyed of real estate, the same duty which 
by different persons in succession; and ought to be paid by such person or 
then each person entitled thereto in persons, if absolutely entitled thereto 
succession shall pay duty for the same as personal estate by virtue of any 
in the same manner as if the same had bequest thereof as such, shall be charged 
not been directed to be applied in the on such person or persons, and raised 
purchase of real estate, unless the same and paid out of the fund remaining to 
shall have been actually applied in the be applied in such purchase." 
purchase of real estate before such duty By 55 Geo. 3, c. 184, sch. pt. iii. tit. 
accrued ; but no duty shall accrue in " Legacies and Succession to personal or 
respect thereof after the same shall moveable estate upon intestacy " where 
have been actually applied in the pur- the testator or intestate died before the 
chase of real estate, for so much thereof 5th of April, 1805, duty was made pay- 
as shall have been so applied : Pro- able at 2i per cent, upon a devolution 
vided, nevertheless, that in case, before to or for the benefit of a brother or 
the same, or some part thereof, shall sister of the deceased, or any descendant 
be actually so applied, any person or of such brother or sister, and at 4 per 



288 COUKT OF EXCHEQUER [L. R. 

1871 viso in that section the same duty is to be paid by the person who 
DE LANCEY becomes entitled to an estate of inheritance in possession in the 
THE QUEEN rea ^ es *ate to be purchased, as if he were absolutely entitled to 
the unconverted fund by bequest. The bequest spoken of must 
certainly be the bequest of the person who directed the fund to 
be laid out in land ; no other testator is mentioned in the section, 
nor is there any other will by virtue of which the petitioner in 
fact takes the fund. But he does take it under and by virtue of 
that will ; for it is in consequence of the character of realty im- 
pressed upon the fund by the will that he becomes entitled to it. 
To say that he takes as by the bequest of Susan, which is the con- 
tention of the Crown, is to say that he takes as by the bequest 
of a person who herself refused to take any interest in the fund. (1) 
Further, the amount claimed, even if rightly claimed, is not a sum 
which the Crown can set off. No assessment has yet been made. 
Sir E. P. Cottier, A.G. (Hutton with him), for the Crown (called 
upon as to the latter point only). 36 Greo. 3, c. 52, s. 6, makes the 
duty payable on any legacy a debt to the Crown from the persons 
taking the burthen of the execution of the will, who are trustees 
for the petitioner. Assessment is not required to make it a debt. 

KELLY, C.B. I am of opinion that the Crown is entitled to our 
judgment. Under s. 7 of 23 & 24 Viet, c. 34, the Crown is entitled 
to plead a set-off in answer to a petition of right. Here there is a 
plea which, though not in a very precise or formal manner, claims 
a set-off; and it is not material to consider in what exact manner 
the right of the Crown arises if the Crown is in fact entitled as 
against the petitioner to a sum equal to that which is sought to 
be recovered. 

The question, then, is, whether duty is payable by the petitioner 
as upon a bequest from the testator, or as upon a bequest by 



cent, on a devolution to or for the Lancey, died before the 5th of April, 

benefit of a brother or sister of the 1805, and therefore if the petitioner 

father or mother of the deceased or any took from him, duty was payable at 

descendant of such brother or sister ; 2^ per cent. ; Charles, James, and Susan 

but where the testator died after the all died after that date, and therefore if 

5th of April, 1805, duty was payable the petitioner took from them or either 

at 3 per cent, and 5 per cent, in the re- of them, duty was payable at 5 per cent. 

spective cases. The testator, James De (1) See Law Rep. 4 Ex. at p. 346. 



VOL. VI] TKINITY TERM, XXXIV VICT. 289 

Susan, the person who was last entitled to the fund. The fund in 1871 
question has never been converted, and therefore the proviso of D B 
s. 19 applies. (1) By that proviso the amount of duty payable is THE 
the duty which the person taking the fund would be liable to pay 
if he were entitled to it as personal estate by virtue of any bequest 
thereof as such, the words expressing only the nature of the 
bequest to him, but not indicating its author. Is, then, the peti- 
tioner to be treated as absolutely entitled to the fund by the 
bequest of his great uncle, or as so entitled by the bequest 
of Susan? I think the latter. It is argued that it must be 
the testator, because the money, in fact, comes to the petitioner 
under his will. But the phrase is ambiguous. No doubt, in the 
sense that a particular clause in the will impresses the fund with 
the character of real estate, it is by virtue of the will that the 
petitioner takes. But when we look to the limitations of the will 
we find that its effect had altogether ceased when the fund reached 
Susan. The limitation to the testator's right heirs vested the 
fund successively in Charles, James, and Susan ; and Susan, taking 
it in possession as heir-at-law, might have sold or willed it away 
absolutely. The operation of the will had therefore ceased, and 
the petitioner takes the fund under a title derived from Susan. 
But it is the person from whom he takes that we are to look to in 
considering who is the person whose bequest is referred to in the 
statute for the purpose of ascertaining the amount of duty to be 
paid. Susan, therefore, is the person by whose bequest the peti- 
tioner is, for the purposes of the Act, to be considered to have 
taken, and duty is therefore payable at 5 per cent. 

MARTIN, B. I am of the same opinion. Treating this as a 
gift of real estate, the effect of the will was, that on the testator's 
death Charles became entitled to a life estate in the land, with 
various remainders over; and in addition became entitled to a 
remainder in fee simple, which he had power to alienate, or to 
devise by will, or in any other respect to treat as his property. 
On his death this estate in remainder passed to James, as his 
heir-at-law ; and upon the death of James, Susan took it as heir 
to her two brothers. Now we must deal with the Act of Parlia- 
(1) See ante, \\ 287, n. 



290 COUET OF EXCHEQUER [L. II. 

1871 ment with reference to the state of the law which makes money 
DE LANCEY bequeathed in the manner in which this will bequeathes it 
THE QUEEN e( l ll i va ^ en t to land. The proviso is not very intelligibly expressed, 
but the words " entitled to an estate of inheritance in possession 
in the real estate to be purchased therewith," must mean entitled 
to an absolute interest in the money which was bequeathed to be 
laid out in the purchase of land. Reading it so, then I think the 
meaning of the further words is, that the same duty is to be paid 
as if it were taken by bequest from the person last entitled in 
possession to an absolute interest in the money; and that person 
was Susan. The bequest is to be taken as a bequest from the 
individual from whom, following the analogy of the devolution of 
the property if it had been real estate, the person taking the fund 
in fact derives his title. 

BRAMWELL, B. The Court of Exchequer Chamber having 
decided that legacy duty and not succession duty is payable, I am 
of opinion that five per cent, is the amount of the duty to be 
charged. It may be a question whether there is a debt to the 
Crown which is the proper matter of a set-off. But, in one way 
or another, the Crown is entitled to retain the money, either 
to avoid circuity of action, or on the ground that the persons 
who are responsible for making, and who have in fact made, the 
payment, are the persons who have to administer the fund to pay 
the legacies ; and if so, the money claimed never belonged to the 
petitioner, but to some one else. He cannot therefore get it back, 
but only those can who are entitled to it. Either way, therefore, 
our judgment must be for the Crown. 

CLEASBY, B. There is some difficulty in applying the words of 
the proviso to any bequest but that under the will, and it might be 
suggested that the first part of the section alone imposed any duty, 
and that the proviso might be taken as regarding only a devolution 
from the testator, and as directing that, in estimating how much 
duty should be paid, regard should be had to the relationship of 
the person taking the absolute interest, to the testator by whose 
will the money is directed to be applied in the purchase of real 
estate. And one difficulty in holding otherwise is, that if Susan 






VOL. VI.] 



TRINITY TERM, XXXIV VICT. 



291 



had made a will bequeathing this fund, there would have been no 1871 
words in the clause to meet the case ; for the proviso only applies DK LANCE 
to persons taking an estate of inheritance, and could not apply to TJJE Q UEK> 
persons who took by bequest from the person owning the absolute 
interest in the unconverted fund. But this construction would 
hardly be consistent with the judgment of the Court of Exchequer 
Chamber, and I therefore arrive at the same conclusion as my 
Lord and my learned Brothers. 

Judgment for the Crown. . 

Attorneys for petitioner : Townsend, Lee, & Houseman. 
Attorney for Qrown : The Solicitor of Inland Revenue. 



BROOKMAX v. SMITH. 

TFt'Z? Rule in Shelley's Case Heirs " and Assigns " Persona Designata 
Ultimate, Limitations Child " lorn or to be born." 

A testator, by a settlement made on the marriage of his daughter, covenanted 
with trustees to leave an equal child's share of certain freehold property to the 
use of her husband for his life or until insolvency, with remainder to her use for 
life, remainder to the use of the issue of the marriage, with specified limitations ; 
and if there should be no issue, or there being issue all should die under twenty- 
one years of age, then to the use of her heirs " as if she had died sole and un- 
married." His will recited the settlement, and the limitations contained in the 
will substantially coincided with those contained in the settlement. The ultimate 
limitation was as follows : " And in case every child born or to be born shall 
die under the age of twenty-one years, and without leaving issue, then to the use 
of the heirs and assigns of E. A. V. (the daughter) as if she had continued sole 
and unmarried," with remainder to the testator's right heirs. There were three 
children born of the marriage. Two died in infancy, and previous to the date of 
the will ; one was alive at that time, and lived until the age of twenty-three. 
He predeceased the testator, who died in 1840. The husband of E. A. V. became 
insolvent in the following year. E. A. V. died in 18G8. In ejectment by the 
plaintiff, who filled the double character of heir-at-law of the testator and of 
E. A. V., against the defendant, an " assign " of E. A. V. : 

Held, first, that the ultimate limitation never took effect, and that the plaintiff 
was entitled to recover as heir of the testator ; and secondly, that, assuming it to 
have taken effect, the plaintiff being the heir of E. A. V., as if she had remained 
sole and unmarried, was entitled to recover as persona designata. 

Quested v. MicMl (24 L. J. (Ch.) 722), commented upon. 

SPECIAL CASE. By articles of agreement, dated the llth of April, 
1823, made in contemplation of the marriage of Elizabeth Ann 
VOL. VI. 2 C 3 



MUIJ 22. 



292 COURT OF EXCHEQUEE. [L. R. 

1871 Brookman, daughter of Thomas Brookman, with Ernanuel William 
BBOOKMAN Violett, Thomas Brookman covenanted with trustees that if the 
SMITH marriage was solemnized and Elizabeth survived him, or dying- 
should leave any child or children, or issue of child or children, he 
would by his last will give and devise, or otherwise well and effec- 
tually settle and assure to proper trustees, a child's share or equal 
part with his other children of all the real and personal estates he 
should die seised or possessed of, to the use of Emanuel William 
Violett and his assigns for life, with remainder to trustees and 
their heirs during his life, with remainder to the use of Elizabeth 
and her assigns for her life, with remainder to trustees and their 
heirs during her life, to preserve contingent remainders, with 
remainder to the child or children of the intended marriage, for 
such estates as Emanuel and Elizabeth should jointly appoint, 
and in default, as the survivor should appoint or devise, and in 
default, to the use of the children equally as tenants in common, 
and their heirs and assigns, with a clause of survivorship or 
nccruer in case of any of the children dying under twenty-one 
without issue ; and if there should be but one such child, and such 
one child should live to attain the age of twenty-one years, or 
dying under that age should leave lawful issue, then to the use of 
such one remaining or only child, his heirs and assigns ; " and if 
there shall be no child, or, there being"; such child or children, if 
all of them shall die under the age of twenty-one years and 
without any of them leaving lawful issue, then to the use of the 
heirs and administrators (according to the tenure or quality of the 
property) of Elizabeth Ann Brookman as if she had died sole and 
unmarried" The articles further declared that in case Emanuel 
should become bankrupt or insolvent, then the profits of the trust 
estates limited to him for life should cease as if he were dead, and 
that the trustees should pay these profits to Elizabeth, if she should 
be living, during the joint lives of herself and her husband, for her 
sole and separate use ; and in case at the time of the bankruptcy 
or insolvency she should be dead, or if she should afterwards die 
leaving Emanuel surviving, then the trustees should stand possessed 
of the trust estates on the same trusts as were thereinbefore declared 
concerning the same from and immediately after the death of the 
survivor of Emanuel and Elizabeth, in like manner as if Emanuel 



VOL. 71.] TKIKLTY TEEM, XXXIV VICT. 293 

were dead ; provided that in case Elizabeth should die in Thomas 1871 
Brookman's lifetime without issue surviving her, then the covenant BUOOKSIAX 
as to a child's share should cease. It was further declared that 
the will of Thomas Brookman, and the settlement to be made, 
should be penned in the most full, clear, explicit, and liberal manner 
to effect the intention of the parties. 

Shortly after the date of these articles the intended marriage 
took place. On the 23rd of January, 1840, Thomas Brookman 
made his will, whereby, after reciting the marriage articles and 
his desire to perform his covenants specifically according to 
their true intent and meaning, he devised, amongst other estates, 
the freehold property now in question to trustees to the use of 
Enmnuel Violett and his assigns until he should die or become 
bankrupt or insolvent, and after his bankruptcy or insolvency, 
in case his wife should be then living, to the use of the trustees, 
their heirs and assigns, on trust during the joint lives of Emanuel 
and Elizabeth, for her separate use without power of anticipation, 
and after his death to her use for life, with remainder to the use 
of their children as they or the survivor should appoint, and in 
default of appointment to the use of all and every their children 
and child as tenants in common, with benefit of survivorship in 
the event of any child dying under twenty-one without leaving 
issue ; " and in case every child born or to be born should die 
under the age of twenty-one years, and without leaving issue, then 
to the use of the heirs and assigns of Elizabeth Ann Yiolett as if she 
had continued sole and unmarried" with remainder to the testator's 
right heirs, in case Elizabeth should die in his lifetime and without 
leaving issue surviving her. 

At the time the will was made, Elizabeth Ann and Emanuel 
Violett were both living. They had had three children, only one 
of whom was then surviving. The other two had died previously 
under the age of twenty-one. The survivor, Thomas Brookman 
Yiolett, attained that age and died in the year 1847, a bachelor, 
aged twenty-three. In 1849 the testator died, and during the follow- 
ing year Emanuel Violett became insolvent. In 1855 Mrs. Violett, 
by deed acknowledged, made a settlement of her interest in the 
real and leasehold estates comprised in the above devise, giving 
herself a power of appointment by deed or will. She died in 

2 C 2 3 



294 COUKT OF EXCHEQUEK. [L. R. 

1871 1868, having exercised her power in favour of George Smith, the 

~ defendant. !No more children were born of the marriage besides 
BROOKMAN 

V. the three above mentioned. This action was brought by James 
SMITH 

Brookman, who filled the double character of heir-at-law of the 

testator and of Elizabeth Ann Violett, to recover from the de- 
fendant the estates appointed to him, and of which he entered into 
possession on the death of Elizabeth Ann Violett. The question 
for the opinion of the Court was, whether the plaintiff was entitled 
to recover all or any of these estates. 

Jan. 16, 18, 23. Waley (Finder with him), for the plaintiff. 
The husband, Emanuel Violett, being still alive, the first question 
is in whom during his life, but after his insolvency and after his 
wife's death, is the legal estate. It will be perhaps contended that 
the trustees still possess it ; but on the true construction of the 
limitations it clearly passed from them on the death of Elizabeth 
Ann Violett. They only took an estate commensurate with the 
duties which they had to perform, and by the death of the wife those 
duties were terminated. [This point was conceded by the defendant.] 
Then there remains the really substantial matter in dispute. Did 
the plaintiff, who is the heir-at-law of the testator and also of 
Elizabeth, take the property on her death ; or did it pass to the 
defendant, who claims under a deed of assignment executed by her 
and duly acknowledged ? The answer depends on the meaning to be 
attached to the words of the will, which are to be interpreted, 
although not controlled, by the marriage articles. Now first, the 
event on which the ultimate limitation to Elizabeth and her lieirs 
and assigns, as if she were sole and unmarried, takes effect, never 
happened. One child did reach the age of twenty-one, and that 
excludes the ultimate limitation. Then this child having died 
after twenty-one, in the testator's lifetime, the plaintiff is entitled 
as heir-at-law of the testator : Jarman on Wills, 3rd ed. vol. ii., 
p. 758 ; Tarbuclc v. TarbucJc. (1) The words ushering in the limi- 
tation should be read as though the name of the child who was in 
existence when the will was penned were mentioned. They will 
then be as follows " In case T. B. Violett, or any other child born 
or to be born, attain the age of twenty-one," &c. ; and this coii- 

(1) 4 L. J. (N.S.) Ch. 129. 



VOL. TL] TRINITY TERM, XXXIV YICT. 295 

struction points the paragraph, and indicates the testator's inten- 1871 
tion, that if any child of Elizabeth attained twenty-one the ultimate BROOKMAS- 
limitation to her heirs, &c., should be inoperative. It is true the 
child who reached that age died, living the testator. But that 
makes no difference in the rule of construction, which depends on 
the state of the family when the will was made, and must be 
applied just as though T. B. Violett had survived the testator. 
Secondly, assuming the ultimate limitation to have taken effect, 
the plaintiff is still entitled as the heir of Elizabeth and persona 
designata. There is iu this will a vested life estate in remainder 
in Elizabeth, with a limitation immediately to her heirs and assigns, 
as if she were sole and unmarried. It will be said by the defendant 
that the rule in Shelley 's Case applies, and that Elizabeth took 
an estate not for life merely ; but that the estates coalesce, and the 
ultimate limitation is to be read as though Elizabeth took an 
estate in fee simple. But in order to apply the rule in Shelley s 
Case two requisites must be satisfied : (a) The ultimate limita- 
tion must be to the heirs of the person having a life interest, as a 
class, and meaning heirs in the ordinary sense of all the heirs ; and 
(&) it must be by way of remainder vested or contingent, and not by 
way of executory devise. Now here the " heirs " of Elizabeth, 
using the word in the ordinary sense, have already been dealt with, 
and the limitation only deals with her heirs as if she were sole and 
unmarried, i.e. her collateral heirs. A child of hers could not take 
under the clause, which contemplates an entire extinction of 
Elizabeth's issue. Again, the limitation is by way of executory 
devise : Fearne's Contingent Kemainders (ed. 1827, by Butler), p. 
276 ; Loyd v. Carew (1) ; Jarrnan on Wills (3rd ed.), vol. ii. p. 30G. 

But it would seem that, on this reading of the clause, no effect 
is given to the word "assigns." In fact, however, no word in 
conveyancing language is more insignificant. Probably it was 
inserted in accordance with the common form. It certainly ought 
not to govern the meaning to be placed on the clause. Moreover 
the marriage articles, in execution of which the will professes to 
have been made, do not contain the word, and it should on that 
account be treated as surplusage.' 

[MAKTIN, B. The proviso which immediately follows the clause 
(1) Free, in Chanc. ~'2. 



296 COUKT OF EXCHEQUEE. [L.E. 

1871 may be said to shew that the intention of the testator was that 
BBOOKMAN the daughter should have an estate in fee simple.] 
SMITH That was not his absolute intention ; he made the will to fulfil 

an onerous obligation, but when the whole document is looked at, 
it is plain he desired to get quit of the obligation, provided no 
children of his daughter survived him. The plaintiff's construc- 
tion is both in accordance with the strictest rules of interpretation, 
and with the real desire of the testator. 

Joshua Williams, Q.C. (Tindal Atkinson' with him), for the 
defendant. The limitation to Elizabeth, her heirs, &c., took 
effect, all the members of the class whom the testator designed, 
and was bound under the articles to provide for, being dead when 
he died ; and the circumstance that one of them reached twenty- 
one is immaterial, as he did not survive the testator. Where a 
gift is to a class, as here to the children of Elizabeth, the rule of 
construction is that only the members of the class who are alive 
when the testator dies are intended : Jarman on Wills (3rd ed.) 
vol. ii. p. 306 ; and if they are all removed at his death, the gift 
over takes effect : Mackinnon v. Sewell (1) ; Evers v. Challis. (2) 
Thomas Brookman Violett is not expressly mentioned, and there- 
fore the reason of the observation cited from Jarman on Wills 
(3rd ed.) vol. ii., at p. 758, does not apply : Doo v. Brabant (3) ; 
Meadows v. Parry (4) ; Jarman on Wills (3rd ed.), vol. ii. p. 751. 
Tarbuck v. Tarbuck (5) is distinguishable. 

Then the question arises as to the real meaning of the limita- 
tion. It was designed to give Elizabeth an unlimited power of 
disposition, which she has exercised in the defendant's favour: 
Tapner v. Merlott (6) ; Sugden on Powers (9th ed.) pp. 106, 108. 
It is true that sometimes the word " assigns " has little meaning, 
but here it has a sensible importance. It confers a power of 
appointment on Elizabeth " as if she were sole and unmarried ;" 
and although it is not in the 'marriage articles, its insertion is 
quite consistent with them, and was necessary to effectuate the 
testator's real intention. Quested v. Michell (7) is in point. More- 

(1) 2 M. & K. 202. (4) 1 V. & B. 124. 

(2) 7 H. L. C. 531. (5) 4 L. J. (N.S.) Gh. 129. 

(3) 4 T. E. 706. (6) Willes, 177, 180. 

(7) 24 L. J. Ch. 722. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 21)7 

over, the rule in Shelley's Case applies, and Elizabeth took the 1871 
whole estate, as well as a power to appoint it. The words, " as if JJ EO OKMAN 

she were sole and unmarried," are to be taken in connection with a * 

SMITH. 

the word "assigns," and not with "heirs and assigns;" so that 
" heirs " may be read in its ordinary meaning, and then the rule 
would prevail, the limitation being clearly by way of contingent 
remainder, and not of executory devise : Evers v. Challis. (1) 

Waley, in reply. Quested v. Micliell (2) appears to have been 
decided with reference to the very peculiar provisions of the will, 
and it is a case which is not supported by other authorities, and 
inconsistent with the view generally adopted in practice of an 
ultimate limitation to "heirs and assigns." Moreover, here the 
marriage articles shew that the word "assigns" ought not to be 

considered : Bullock v. Bennett. (3) 

Cur. adv. vuU. 



May 22. The judgment of the Court (Kelly, C.B., Martin, Pigott, 
and Cleasby, BB.) was delivered by 

CLEASBY, B. This case was argued before the Lord Chief 
Baron, Martin and Pigott, BB., and myself, and I have now to 
deliver the judgment of the Court. The question arises upon the 
will of Thomas Brookman. It bears date the 23rd of January, 
184.0, and was made under rather unusual circumstances. 

In the year 1823, by a deed of settlement made upon the 
marriage of his daughter Elizabeth Ann with one Ernanuel 
William Violett, he had covenanted with the trustees to make a 
settlement by will of an equal child's share of his real and per- 
sonal property upon his daughter, her intended husband, and 
the children of the marriage with specified limitations. This 
settlement is recited in the will, and it is also recited that the 
will is intended to carry it into effect; and the limitations con- 
tained in the will are substantially to the same effect as those 
provided for in the settlement, with some slight differences which 
will be adverted to. It is unnecessary to repeat here the words of 
the limitations, as the will forms part of the case. They are, so 

(1) 7 H. L. C. 531. (2) 24 L. J. Ch. 722. 

(3) 7 De G. M. & G. 283; 24 L. J. (Ch.) 512. 




298 COUKT OF EXCHEQUER. [L. E. 

far as is material to the present case, in substance as follows : 
" ^ the use f husband for life, or until lie becomes bankrupt, or 
takes the benefit of the Insolvent Debtors Act ; then to the use of 
the trustees during the joint lives of husband and wife, upon trust 
to pay the rents, &c., to the wife for her sole and separate use,, 
free from debts of husband, but not by way of anticipation ; to the 
wife for life if she survives her husband ; then to trustees to pre- 
serve contingent remainders during the life of the wife ; then, 
subject to power of appointment among the children, to all the 
children of the marriage in fee as tenants in common, with benefit 
of survivorship ; and if only one child, to the child in fee." And 
then comes the clause upon which the question arises, which is in 
the following terms : " And in case every child of the said 
Emanuel William Yiolett, by Elizabeth Ann his wife, born or to 
be born, should die under the age of twenty-one years, and with- 
out leaving issue born, or to be born in due time afterwards, then 
I direct that the last-mentioned freehold messuages shall go, and 
remain, and be, to the use of the heirs and assigns of my daughter, 
Elizabeth Ann Yiolett, as if she had continued sole and unmarried." 
This limitation is hereafter called the " ultimate limitation." 

The facts necessary to be noticed in order to determine the 
effect of the will are, that there were three children of the mar- 
riage, all of whom died in the lifetime of the testator. Two of 
them, died in infancy, but one attained the age of twenty-one 
years, and died in the year 1847, aged twenty-three years. It was 
stated upon the argument that when the will was made the last- 
mentioned child was the only one living. The testator died in the 
month of October, 1849. In the year 1850 Einanuel William. 
Yiolett presented his petition to the Insolvent Debtors' Court, and 
took the benefit of the Act for the Kelief of Insolvent Debtors. 
Elizabeth Ann Yiolett died in 1868, leaving her husband surviving. 

Two questions arise in this case : first, whether, under the 
circumstances which have taken place, the ultimate limitation 
has taken effect ? secondly, what is the proper effect of the ulti- 
mate limitation ? Upon the first question the plaintiff contends 
that the devise over was upon an event which did not happen, and 
that he, as heir-at-law of the testator, was entitled. The words of 
the will, taken strictly, apply only to the case of the children or 



YOL. VI.] TKINITY TERM, XXXIY YICT. 299> 

child of the marriage dying under twenty-one and without leaving 1871 
issue, and do not, so taken, include the case of there never being BKOOKMAX 
any children who could take. SMITH 

The answer to this on behalf of the defendant was, that upon 
such a devise to a class like children, and a devise upon failure of 
the class by death under twenty-one and without issue, the devise 
over would take effect ; or, as it is sometimes expressed, there is an 
implied devise over in the event of there being no children at all, 
capable of taking under the will. For this several authorities 
were referred to : Meadows v. Parry (1) ; Mackinnon v. Sen-ell (2) ; 
Doe. d. Evers v. Cliallis (3) ; and Evers v. Challis. (4) In the first- 
named case the Master of the Eolls disposes of the matter in a word, 
saying that it is not distinguishable from the case (Jones v. West- 
comb (5) ) where a testator devised to the child with which his 
wife was enceinte ; and if such child died before twenty-one, then 
over. And the devise over was held to be good, though the wife 
proved not enceinte. 

The authorities referred to shew that, as a general rule, the 
devise over takes effect when the previous estate fails for want of 
persons to take under it. 

In the present case the rule is said not to be applicable for two 
reasons : first, from the particular language preceding the ulti- 
mate limitation taken in connection with the existing state of 
things when the will was made ; and, secondly, from the fact that 
after the will w r as made one of the children attained the age of 
twenty-one years, though he died in the lifetime of the testator. 

The peculiarity of the language in the present case is the intro- 
duction of the words " born, or to be boru." If these words are to 
be read as though they were used at the death of the testator, and 
if they signify, as contended for by the defendant, " which have 
been born and are living at the time of my death, or are born 
afterwards," then it appears to me that the present case would not 
be distinguishable from the other cases, and the rule must apply, 
and the ultimate devise take effect. Upon that supposition the 
class actually designated by the will would be the children alive 

(1) 1 Y. & B. 124. (3) 20 L. J. (Q.R) 113. 

(2) 2 My. & K. 202. (4) 7 II. L. 531. 

(5) 1 Eq. C. Ab. 243. 



300 COUET OF EXCHEQUER [L. E. 

1871 at the death of the testator ; and if there were none then alive the 
BEOOKMAN class would fail altogether, and the case would then be in principle 
* the same as Mackinnon v. Sewell (1), already referred to, where 
the devise was to the children of the devisee alive at her decease. 

It was suggested in furtherance of this view that the effect of 
the clause is the same, whether the words " and now alive " are 
inserted or not, because in general a devise to a person can only 
take effect if that person is alive at the death of the testator. But 
this appears to us to be incorrect. It is confounding two things 
which are quite distinct, viz., the effect of the clause taken by 
itself, and its effect in construing other parts of the will. It makes 
no difference, as regards a person taking an estate under a will, 
whether the devise be to him generally, or whether it be to him 
expressly in case he survives the testator. If he dies in the life- 
time of the testator, he cannot take in either case ; but the difference 
is, that in the one case the estate fails by lapse, which generally 
is not contemplated by the testator, and in the other case it fails 
by the event which is contemplated and provided for. The law 
now recognizes the fact that lapse is not contemplated by the tes- 
tator ; for by the Statute of Wills (7 Wm. 4 & 1 Viet. c. 26, s. 33) 
it is enacted, that in cases of devise to a child or issue of the 
testator of any estate of inheritance the devise shall not lapse, but 
shall take effect in favour of the issue of the devisee, if alive at the 
death of the testator, just as if the death of the devisee had hap- 
pened immediately after the death of the testator. But are those 
words to be read as spoken at the death of the testator, and in 
the sense mentioned ? The words actually used are " born or to 
be born." There is, in the first place, this obvious objection to 
reading these words as if they were used at the death : viz. that, if 
so used, they would require the additional words " and now alive " 
to be added to them, so as to make the words " born and now 
alive, or to be born," otherwise the limitation could not come in at 
all ; for the word " born " cannot be rejected, and the limitation is 
to take effect in case a child born, or to be born, died under 
twenty-one and without issue. But a child had been born and 
attained twenty-one, so that the condition upon which the estate 
was to go over failed altogether ; and, in order to give effect to 
(1) 2 My. & K. 202. 



VOL. VI.] TRINITY T.ERM, XXXIV VICT. 301 

those words as if they were used at the death, other words, " and 1871 

now alive," must be added, importing an additional condition, and IJKOOKMAN 

this of itself seems an almost insuperable objection to reading 

them as so used. If the words were " now born or to be born," 

there can be no doubt that they must refer to the date of the will ; 

or if they were " born, or to be born hereafter," they must equally 

refer to the date of the will. 

In the present case there are no explanatory words, and we have 
to deal with the words themselves. It often happens, in apply- 
ing the words of a will to its proper object, when those words, 
taken by themselves, might apply to several objects, that we 
have to refer to the state of facts at the time of making the will. 
It is only necessary to refer to the well-known illustration of 
this given by Mr. Jarman in his work on Wills (3rd ed.) vol. i. 
p. 304 : viz., that a devise to the wife of A., and no more, refers to 
the wife of A. at the time of making the will, if he has one at that 
time, and to no one else. But if A. has no wife at that time, then 
to his wife at the death of the testator. 

Now, in the present case, the circumstances to be considered are 
the settlement (recited in the will) which the testator was carry- 
ing into effect, and the fact of there being a son alive, of the age of 
about sixteen, when he was engaged in carrying it into effect. There 
is a striking difference in the language of the settlement and of 
the will as regards the circumstances under which the ultimate 
limitation is to come into operation. The words of the settlement 
are : " And if there shall be no child of the marriage, or if," &c. 
Now, at the time of making the will the testator could not use 
these words, because there was then one son living, and no one can 
doubt that this fact caused the altered language in the will. It 
was having regard to that fact that the words in the will are : 
" Child born, or to be born." It seems to follow from this that the 
testator had in his mind the existence of one of the class to take, 
and having that in his mind, he used the words " born, or to be 
born." 

The case, then, is rather one of an omission of the testator to 
provide for the case of a lapse than of a class contemplated not 
coming into existence. It is right to add that what has been said 
is not in the slightest degree at variance with the judgment of 



302 COUKT OF EXCHEQUEE. [L. R. 

1871 Lord Justice Giffard upon this will in the case referred to : In re 
BROOKMAN Brodkmans Trusts (1) ; but in entire conformity with it so far as it 

v ' eoes. The Lord Justice decided in that case, in which there was 
SMITH. to 

an application on behalf of the father to come in, as heir of the 
son, on the ground that the son, who had attained twenty-one, had 
a vested interest under the settlement and will taken together, 
that the testator had not provided for a lapse, and that there was 
no obligation upon him to provide for a lapse ; and he overruled 
the decision of Vice-Chancellor Malins, which was in favour of the 
representative of the son, and was founded rather upon what ought 
to have been provided for than upon what was provided for. 

If the view taken of the will is correct, and the case is properly 
described as one of lapse, then it is more like the case of a devise 
to a designated person than to a class which does not come into 
existence, and the defendant must fail, because it would not be 
contended and the argument was, in fact, repudiated that in 
the case of a devise to A., and in case he died under twenty-one 
to B., the devise over to B. would take effect if A. lived to attain 
twenty-one, and afterwards died during the lifetime of the testator. 

It is deserving of notice that in the deed of conveyance and 
settlement by Elizabeth Ann and her husband executed in 1855 (I 
mean in the copy supplied to me), the will of Thomas Brookman is 
recited ; but in the recital of the limitations in question, which is 
in other respects exact and full, the words " born, or to be born," 
are omitted. This is accounted for by the fear that if those words 
were inserted, the title of the persons conveying would appear upon 
the face of the deed to be defective, without a further recital as to 
no child being born, which could not be made. 

But apart altogether from the particular language of the will in 
the use of the words " born, or to be born," a further question arises, 
whether the fact of the son attaining twenty -one in the present case 
does not of itself prevent the ultimate limitation from taking effect? 
Upon this question it is impossible in the compass of this judgment 
to examine all the numerous cases which bear upon it. They are, 
many of them, discussed in the judgment in Mackinon v. Sewell (2), 
and are to be found in the 2nd vol. of Mr. Jarman's work on 
Wills, 3rd ed. p. 757. There are also since decided, In re Betty 
(1) Law Rep. 5 Ch. Ap. 182. (2) 2 My. & K. 202. 



VOL. VI.] TEINITY TERM, XXXIV VICT. 303 

Smith's Trusts (1), and Warren v. Rudatt. (2) In some apparent 1871 
conflict of authorities it is worth while to observe that the certificate BROOKHAN 
of the Court of Queen's Bench in Doo v. Brabant (3) and which 
was against the opinion expressed by Lord Thurlow in that case (4), 
when he sent it to the court of law was afterwards confirmed and 
acted upon by the Lords Commissioners holding the Great Seal ; 
and that the decision of Lord Alvanley in Caltliorpe v. Gougli (5), 
(and which Lord Thurlow had questioned), was strongly main- 
tained by the learned judge in Holmes v. Craddock (6), and that 
Tarluck v. Tarbuck (7), which really seems in point with the 
present case, was a decision of Lord Cottenharn's, after argument 
by Mr. Pemberton and Mr. Bickersteth, and a full reference to the 
authorities. 

The reasonable conclusion is, and it is warranted by the prepon- 
derance of the authorities (when examined), that in cases like the 
present, where all the other conditions have been performed which 
make the estate absolute and indefeasible in the person to take, 
whether a designated person, or a class, or one of a class, the devise 
over does not take effect by reason of the death of the previous 
devisee in the lifetime of the testator. The failure of the previous 
estate is then due solely to lapse, or something analogous to lapse. 
In that case the condition upon which the ultimate limitation is to 
take effect is negatived by the contrary event happening. But 
when the failure of the previous estate is caused by the events not 
happening upon which it is to arise or be complete, then the ulti- 
mate limitation may come in. In the present case, for example, it 
would undoubtedly have come in if there had been no child of the 
daughter until after the making of the will. There may be a doubt 
what the result would have been if she had a child, and that child 
died under twenty-one and without issue. But in the case which 
has happened, viz. of there being a child, and that child attaining 
twenty-two, the foundation of the ultimate devise taking effect 
fails altogether. 

In the present case the son attained twenty-one. It is worth 

(1 ) Law Rep. 1 Eq. 79. (4) 3 Bro. C. C. 393. 

(2) 4 K. & J. 603 ; 28 L. J. (Ch.) 70. (5) 3 Bro. C. C. 395. 

(3) 4 T. 11. 706. (6) 3 Ves. at p. 320. 

(7) 4 L. J. (X.S.) Ch. 129. 



COUET OF EXCHEQUER. [L. B. 

1871 while to consider for a moment what the result would have been if 



BROOKMAN he had died under age leaving issue, which is the other event by 
SMITH which the ultimate limitation would be defeated if it occurred 
after the death of the testator. If that other event had occurred, 
it might have deserved consideration whether s. 33 of the Wills 
Act (7 Wm. 4 & 1 Yict. c. 26), already adverted to, would have 
applied so as to prevent a lapse, and make the estate go to the 
issue, provided they survived the testator. If it would have ap- 
plied it may be an additional reason for saying that, as the ultimate 
limitation would not come in if one of the events occurred in the 
lifetime of the testator, in like manner the other event so occurring 
would defeat it. But this is only an additional reason, and is not 
further gone into because the authorities have not been consulted 
to ascertain whether this section has been held to apply only where 
the devise is to a designated person. If, therefore, it were necessary 
to decide the case upon the first question, we should do so in 
favour of the plaintiff, on the ground that the ultimate limitation 
did not take effect. 

But the other question, viz. the effect of the ultimate limitation, 
was fully argued before us, and it is right, therefore, that an 
opinion should be given upon it. The words of the ultimate 
limitation over are as follows : " In case, &c., I direct that the last- 
mentioned freehold messuages, lands, tenements, hereditaments, 
and premises shall go, remain, and be to the use of the heirs and 
assigns of my daughter Elizabeth Yiolett, as if she had continued 
sole and unmarried." And supposing it to take effect, the plaintiff 
claims under it as heir of Elizabeth Ann, as if she continued sole 
and unmarried, and entitled to succeed to it upon her death. 

The defendant claims under a deed of appointment and con- 
veyance, executed by Elizabeth Ann and her husband and duly 
acknowledged by her, and contends that either she had a contingent 
remainder in fee (the contingency being her having no child living 
at the testator's death, or born afterwards, who attained twenty- 
one, or had issue), or that by virtue of the words of the limitation, 
" heirs and assigns," she had an absolute power of disposition and 
appointment. 

As regards the first contention of the defendant, it was sug- 
gested that the devise being to the children in fee, and if they die 



VOL. VI.] TRINITY TEEM, XXXIY VICT. 305 

under twenty-one and not leaving issue, then over, the devise over 1871 
must be an executory devise, and could not therefore unite with 
the previous life estate given to her by the will, so as by the rule 
in Shelley s Case to give her a fee; but it is conclusively settled 
by the case of Evers v. Challis (1), that though the express devise 
over, if there were children to take who died under twenty-one and 
without leaving issue, would be an executory devise if children 
survived the testator, yet the implied devise over, in case there 
were no children to take at all, would be a contingent remainder, and 
capable of uniting with the previous life estate, and produce the 
result mentioned. And if the devise over had been to her heirs 
or to the heirs of her body, she would have taken an estate in fee 
or an estate tail in remainder. 

But there are no such words of limitation in this case. The 
words are, " to the heirs and assigns of Elizabeth Ann, as if she had 
continued sole and unmarried ;" these words prevent her own son, 
if she married a second time and had one, from succeeding. This 
makes the rule in Shelley's Case inapplicable for want of proper 
words of limitation. Indeed, the main reliance of the learned 
counsel was not placed upon the application of the rule in Shelley s 
Case but upon the effect of the word " assigns " following the word 
"heirs" in the ultimate limitation; and he contended that the 
effect of the words " heirs and assigns " was to place the property, 
subject to the previous interests, at her disposal, and subject to her 
appointment. In favour of that conclusion some authorities were 
referred to: a dictum of Willes, C.J., in Tapner v.Merlott (2), that 
those words might possibly receive such a construction ; Attorney- 
General v. Vigor (3), where Lord Eld on thought a power of 
appointment might be implied upon the very complicated settle- 
ment made by Sir George Downing upon the marriage of his son, 
though as this power was not executed no decision was founded 
upon it ; and especially reliance was placed upon the case of 
Quested v. Michell (4), where Vice-Chancellor Kinderslcy held, that 
upon an ultimate legal limitation of real and personal estate to 
the heirs, executors, administrators, and assigns of a previous 
equitable devisee for life (the rule in Shelley s Case being obviously 

(1) 7 H. L. C. 531. (3) 8 Yes. 25G. 

(2) Willes, 177. (4) 24 L. J. (Cb.) 722. 



306 COUET OF EXCHEQUER [L. E. 

1871 inapplicable), the effect of the limitation was to give a power of 
BROOKUAN appointment to the devisee, with a remainder to the heirs of the 
SMITH devisee at her death in default of appointment. 

The learned judge does not consider it by any means a clear 
case, and founds his conclusion upon particular considerations, which 
are adverted to. Without saying anything to impeach the correct- 
ness of that decision, we think that in construing the present will 
the words " heirs and assigns," coupled with the words " as if she 
continued sole and unmarried," and with the other dispositions of 
the will, ought not to be construed as conferring a power of 
appointment upon Elizabeth Ann. In general the words "and 
assigns " following the word " heirs " have now no operation. At 
an early period of our legal history a feoffment or conveyance to a 
" man and his heirs " only gave the right of enjoyment to a man 
and his heirs in succession, with no power of alienation. The 
subject is clearly explained in the case of Burgess v. Wheate. (1) 
After shewing the original effect of a conveyance to a man and his 
heirs, the Master of the Rolls proceeds : " The next step in favour 
of the tenant was to aliene without licence, for which purpose a 
larger grant was necessary, viz. to his heirs and assigns." And 
he afterwards shews how the complete power of alienation was 
acquired, if a man had his estate limited to him and his heirs. 
And the result is well expressed by Mr. Williams, in his work 
on the principles of the law of real property. Speaking of the 
usual limitation to a man, his heirs and assigns for ever, he says : 
" The words ' to assigns for ever ' have, at the present day, no con- 
veyancing virtue at all, but are merely declaratory of that power 
of alienation which the purchaser would have without them :" 
Williams on Real Property, 8th ed. p. 141. 

In the present case there does not appear to us to be any suffi- 
cient reason for holding the words " heirs and assigns" as conferring 
anything but an estate or interest. There are several reasons for 
this conclusion. In the first place, in the immediately preceding 
devise to the children, the same words, " heirs and assigns," are 
used in the ordinary conveyancing sense, and in general the same 
sense is attributed to a word repeated in the same instrument. 
Secondly, in the corresponding clause in the settlement which the 

(1) 1 W. Bl. 123. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 307 

will is to carry into effect, the word " assigns" is omitted, and the 1871 
property, freehold and leasehold, is to be limited to the heirs and BBOOKMAN 
administrators (according to the tenure and quality of the pro- 
.perty) of the said Elizabeth Ann as if she had died sole and 
unmarried. It would be going very far to conclude from such 
a change of language as the usual introduction of the word 
" assigns" after the word " heirs," that between the settlement 
and the will which was to carry the settlement into effect, the 
testator had changed his mind as to the ultimate disposition of 
the property in favour of the daughter. Thirdly, the words " as if 
she had died sole and unmarried" in the settlement, can have no 
.meaning except as indicating the person who is to take, and they 
ought to have the same meaning in the will, and not be applied to 
the word " assigns " as indicating the extent of control over the 
property. Fourthly, although it is a good general rule, as laid down 
in the case of Quested v. Michell (1) by Vice-Chancellor Kindersley, 
that in construing instruments effect is to be given to each word ; 
yet this rule has little application to a word like the word 
" assigns" following the word " heirs," which in that connection 
generally has no meaning. Fifthly, the words in the settlement 
are, " as if she had died sole and unmarried ;" in the will, " as if she 
had continued sole and unmarried." There does not appear any 
reason for supposing that the two forms of words are intended to 
have different meanings. But the words used in the settlement, 
" as if she had died sole and unmarried," can have no meaning 
except as indicating the person who is to take as heir. It would 
hardly be sense to say that Elizabeth Ann should have the same 
power of appointment to assigns, as if she died sole and un- 
married. If the words, then, are to be read in the settlement and 
in the will with the same meaning, they can refer only to the word 
" heirs " in the sentence, and not to the word " assigns." Lastly, 
the construing the limitation in the sense in which Vice-Chancellor 
Kindersley construed the limitation in Quested v. Mitchell (1), and 
which he considered clearly gave effect to the intention of tho 
testator as apparent upon the will, would in the present case be 
opposed to that intention. 

The construction of the Vice-Chancellor was, that the person 

(1) 24 L. J. (Ch) 722. 
VOL. VI. 2 D 3 



308 COUKT OF EXCHEQUER [L. E. 

1871 named should have the power of appointment over the property, 
BROOKMAN an< i that, subject thereto, it should go to the person filling the 
SMITH character of heir at her death. Now, in the present case the 
testator was by his will really making a settlement upon the mar* 
riage of his daughter, and certainly, by the provisions in the 
will, shews he had no intention that the husband should have any 
control over the property, or exercise an option to any extent, 
whether the heir of his daughter should succeed or not. But by 
giving the daughter the complete power of disposition, and so 
defeating the heir, the husband has practically, by his influence 
some control, and perhaps complete control. Other reasons might 
be given, but enough has been said to shew that the decision in 
Quested v. Michell (1) ought not to govern the present case. 

For the reasons above given, we are of opinion that the ultimate 
limitation did not, upon the facts of this case, take effect, and that, 
if it did, the heir of Elizabeth Ann at her death was entitled to 
succeed. Judgment for the plaintiff. 

Attorneys for plaintiff: Pitman & Lane, a 
Attorneys for defendant : Sharp & Turner. 



June 17. ^ p N THE EXCHEQUER CHAMBER.] 

ATTORNEY-GENERAL v. BLACK. 

Income Tax Liability of Local Coal Dues Sate or Duty 5 & G Win. 4, 
c. 35 Schedules A. and D. 

By 13 Geo. 3, c. 34, a power was given to Improvement Commissioners for 
Brighton to levy a duty of Gd. on every chauldron of coals landed on the beach or 
brought into the town, for the purpose of erecting and maintaining groyns, &c., 
against the sea. By subsequent Acts the duty was continued and increased, and 
by 6 Geo. 4, c. clxxix. it was, together with rates which the commissioners were 
empowered to levy, market tolls, &c., to form a common fund for the general 
purposes of the Act, which included paving, lighting, and watching, and the 
maintenance of groyns and other sea works : 

Held (affirming the judgment of the Court below), that the corporation (who 
had succeeded to the rights of the commissioners) were liable to pay income-tax; 
in respect of the coal duty. 

ERROR upon the judgment of the Court of Exchequer in favour 
of the Crown, on a case stated under 22 & 23 Viet. c. 21, s. 10, 
(1) 24 L. J. (Ch.) 722. 



VOL. VI.] 



TRINITY TEEM, XXXIV VICT. 



GENERAL 

0. 
BLACK. 



upon an information against the town clerk of the corporation of 1871 
Brighton, to recover penalties for not including in the income-tax ATTORNEY- 
returns, required by 5 & 6 Viet. c. 35, certain duties levied by the 
corporation under local Acts upon all coal landed on the beach or 
brought within the limits of the town of Brighton. (1) 

Manisty, Q.C. (Freeman with him), for the defendant. 

Sir K P. Collier, A.G.(HuUon with him), for the Crown. The 
same arguments were urged which had been used in the court 
below. 

BYLES, J. After listening attentively to the arguments which 
Mr. Manisty has addressed to us, I am of opinion that the judgment 
of the Court below must be affirmed. This impost is, at all events, 
of the nature of a toll within the 3rd rule of Sched. A. No. III. 
in s. 60. With respect to its incidence one thing at least is plain. 
It originally falls on the persons immediately engaged in the 
importation of the coal. What is its ultimate incidence it may be 
difficult to ascertain precisely ; but at least it falls on strangers as 
well as on the inhabitants of the place. As to the benefit, there is 
no doubt who take it; it is taken solely by the tax-payers of 
Brighton, who have an entire discretion as to its application. On 
these grounds I entertain no doubt that the proceeds of the impost 
are liable to income-tax. 

BLACKBURN, J. I am of the same opinion. The question is as 
to the construction of 5 & G Viet. c. 35. [The learned judge 
referred to s. 60, Sched. A., and s. 100, Sched. D., and pro- 
ceeded : ] The words in this latter section are very extensive. 
My Brother Martin says, "It seems impossible that any net 
could be extended more widely ; every possible source of income 
seems included." (2) Not, however, that every kind of income 
derived by a corporation, in whatever way it may come to them, 
would be included in it. They would not be liable except in 
respect of something of the same nature and kind as what had 
been previously mentioned; not, for instance, in respect of a 

(1) Reported ante, p. 78, where the facts are fully stated. 
(2) Ante, p. 85. 

2 D 2 3 



310 COURT OF EXCHEQUER. [L. R. 

1871 borough rate, a poor-rate, or a highway rate, because these are not 

ATTORNEY- within the analogy of the " property or profit " previously de- 

rENEKA scr ibed. The question, then is, whether this particular income does 

BLACK. come within the description of "property or profit;" and after 

listening attentively to the arguments for the appellants, I have 

come to the conclusion that it does. 

The mention of " rights of markets and fairs " and " tolls " in 
Sched. A., No. III., shews the intention of the legislature to include 
in the general sweeping words of Sched. D, sources of income 
similar to these. Harbour and port dues therefore, originally 
granted to the owners of the ports, being ejusdem generis with 
market dues and tolls, would be included in those general words. 
The question therefore is, whether the rate or duty in this case is 
of the same sort or kind as harbour or port dues. 

I observe, in passing, that the fact of the proceeds of the rate 
being brought into a common fund, which also includes other kinds 
of income that are not subject to income-tax, does not affect the 
question ; for the true principle is that adopted in Mersey Docks and 
Harbour Board v. Cameron (1), that if the fund is in its nature 
subject to taxation, it remains so subject, notwithstanding its pro- 
ceeds are to be applied to public purposes, and the proceeds which 
are to be so applied are what remain after discharging the burden 
to which it is subject. That circumstance therefore furnishes no 
ground of distinction. 

Taking this rate or duty then independently of that considera- 
tion, it is strictly ejusdem generis with tolls and dues granted by 
the Crown to the private owner of a market, or harbour, or port, 
upon all goods sold or brought to land. Till recently, a very 
large sum, amounting to about 14,000?., was yearly received by the 
Corporation of Liverpool for port dues (now transferred to the 
Mersey Harbour Board), and it is very clear that this income 
would have been liable to taxation as ejusdem generis with tolls, 
or at all events as property. The rate or duty which has been 
granted to the Corporation of Brighton is equally so, and is caught 
by the net spread by s. 100. 

KEATING, J. I am of the same opinion. The argument has 
(1) 11 H. L' C. 443; 35 L. J. (M.C.) 1. 






VOL. VI.] TRINITY TERM, XXXIV VICT. ,'511 

been brought within a narrow compass. Mr. Manisty does not 1871 
contend that harbour and port dues, and other revenues of that ATTOKKEY- 
description, are not taxable ; and the Attorney-General admits 
that a district rate is not. The question then is, does the rate in 
question partake more of the nature of the one or of the other ? I 
am of opinion that it does not partake of the character of a district 
rate imposed by the inhabitants of a place upon themselves ; and 
that on the other hand, it is very difficult to distinguish it from 
harbour dues. I agree, therefore, in thinking that it is subject to 
income-tax ; and I also agree that the purpose to which it is 
applied cannot affect the question of its liability to the tax. 

MELLOR, J. I am of the same opinion. To determine the 
question of liability, we must consider the source of the income. 
The rate from which it is derived was granted as a consideration 
for the repair of the groyns, and is in the nature of harbour dues, 
much more than in the nature of a district rate. It is levied in 
the first instance on those who import the coal, whatever the 
ultimate incidence of the tax may be. That it is thrown into a 
common fund with other sources of revenue which are not taxable 
cannot alter the question, which depends upon its character when 
received. 

MONTAGUE SMITH, J. I am of the same opinion. Everything 
has been urged that could be, but not enough to impeach the 
judgment of the Court below. I agree that the purpose to which 
the rate is applied cannot be taken into consideration, if in its 
nature it is a property or profit; it can only be looked on as one of 
the circumstances which determine whether it is more in the nature 
of a tax or of a toll. 

LUSH, J. I also am of opinion that this is a profit within the 
meaning of the Income Tax Act ; and I think there is an essential 
distinction between these dues and a district rate. This impost 
has been granted by Parliament to the Corporation of Brighton 
on the importation of coals; it is paid by the importer upon im- 
porting them, without any act of the corporation, and whether it 
is required by them or not ; for clearly no shipowner could refuse 
to pay it on the ground that it was not needed. It is then a due 



312 



COURT OF EXCHEQUER. 



[L. R. 



BLACK. 



1871 or a debt, payable so long as the Act of Parliament continues in 
ATTORNEY- force, whereas a rate is a call made by the local authority on a 
gi ven c i ass O f inhabitants from time to time as occasion requires. 
J? or these reasons I think this is not in the nature of a tax, but of 
a property or profit. 

Judgment affirmed. 

Attorney for the Crown : The Solicitor of Inland Revenue. 
Attorneys for defendant: Tilleard & Co., for D. Black, Town 
Cleric, Brighton. 



June 12. KENT v. THOMAS. 

Proof in Bankruptcy Contingent Liability Bankruptcy Act, 1849, 
18. 177, 178. 

A bond for 1000?. was executed by the defendant to the plaintiff, subject to a 
condition, which recited an agreement by the defendant to sell to the plaintiff 
1100Z. consols, being a sum to which the defendant's wife was entitled on the 
death of her mother, E. P., and an assignment of the same to the plaintiff by a 
deed of same date ; and also recited that the defendant's wife might survive him 
and refuse to confirm the assignment ; or that the plaintiff might, through de- 
fendant's default or otherwise, never realize the benefit of the same; the condition 
being that, if the defendant should, within six months after the death of E. P., 
obtain the transfer of the said sum of consols, or if the trustees thereof should, 
within six months after the death, of E. P., transfer the same to the plaintiff, his 
executors, administrators or assigns, the bond should be void. 

The defendant became bankrupt under the Bankrupt Acts of 1849 and 18G1, 
and before the expiration of six months after the death of E. P., he obtained his 
discharge. In an action on the bond commenced after the defendant obtained his 
discharge : 

Held, that the defendant was not discharged from his liability on the bond. 

DECLARATION on a bond for 1000Z. 

Plea, setting out the condition of the bond, which recited that 
the defendant had agreed with the plaintiff for the sale to him of 
1100Z. Three per Cent. Consols, being one-fifth of 5,500?. consols, 
to which Mary Ann, the wife of the defendant, was entitled upon 
the death of her mother, Elizabeth Price, under the will of Eobert 
Brown, deceased, which fifth part was, by a deed of assignment of 
even date assigned to the plaintiff, his executors, administrators 
and assigns ; and also recited that Mary Ann Thomas might sur- 



VOL. VI.] TRINITY TERM, XXXIV VICT. 313 

vive her husband and refuse to confirm the assignment; or that 1871 
the plaintiff might, through the default of the defendant or other- KENT 
wise, never realize the benefit of the same ; the condition being, THOMAS 
that if the defendant should, within six mouths after the death of 
Elizabeth Price, obtain the transfer of the said fifth part ; or if the 
trustees of the sum of 5,5007. consols, or the share of the said 
Mary Ann Thomas, should, within six months after the death of 
the said Elizabeth Price, pay, transfer, or assign the said share to 
the plaintiff, his executors, administrators or assigns, then the 
above-written obligation should be void. The plea farther alleged, 
that after the making of the bond, and the passing of the Bank- 
ruptcy Act, 1861, but before the passing of the Bankruptcy Act, 
1869, before action the defendant became bankrupt, and received 
his order of discharge. 

Demurrer. 

Replication: that at the time of the bankruptcy and discharge, 
no breach of the condition of the bond had happened, and that 
the bankruptcy took place and the order of discharge was obtained 
before six months after the death of Elizabeth Price. 

Demurrer. 

R. V. Williams, for the plaintiff. The bankruptcy of the de- 
fendant is no answer to the action, for the bond created neither 
a "debt payable on a contingency" within the 177th section of the 
Bankruptcy Act, 1849, nor a "liability to pay money on a contin- 
gency," within the 178th section of the same statute. It could not 
have been proved under s. 177, for under that section the proof is 
to be immediate, and the claim must be capable of estimation. 
But before breach it would have been impossible to put a value 
on the plaintiff's claim. Whether it would ever arise, depended 
on a double contingency, the survival of the wife, and her refusal 
to confirm the assignment. It might never arise at all, and on 
this ground alone was not capable of estimation. But further, it 
was not a debt at all. It was in the nature of a claim for unli- 
quidated damages to be assessed for breach of the condition. This 
is so apart from the 8 & 9 Wm. 3, c. 11, s. 8, which perhaps only 
-applies where breaches of several covenants are contemplated ; at 
common law (as the language of the statute appears to indicate) 



314 COUET OF EXCHEQUER. [L. R. 

1871 in an action on a bond conditioned to be void in case of non- 
KENT performance of a single covenant, the jury would have assessed 
THOMAS. on ly *he damages actually sustained, White v. Sealy (1). The 
defendant, therefore, must contend that the plaintiff's claim was 
in respect of a " liability to pay money on a contingency " within 
s. 178. But, firstly, the event is not shewn to have happened within 
six months. Secondly, under that section also, it is necessary that 
the contingency should be single, and the claim capable of estima- 
tion ; and these two conditions, of which the former is in effect a 
branch of the latter, have been held equally essential, and, on 
the same reason, under the Bankruptcy Act of 5 Geo. 2, c. 30, 
Alsop v. Price (2) ; under ss. 177 and 178 of the Act of 1849, 
Warburg v. Tucker (3) ; Hopkins v. Thomas (4) ; Mitcalfe v. Han- 
son (5) ; and under s. 154 of the Bankruptcy Act, 1861, and s. 75 
of the Companies Act, 1862, Ex parte Pickering (6) ; Hasties 
Case (7). The case of Gary v. Dawson (8) is a direct authority 
upon the point here raised, and illustrates both s. 178 of the Act 
of 1849, and s. 154 of the Act of 1861. 

Home Payne, contra. Gary v. Dawson (8) was an action for con- 
tribution ; and the claim arose not because the defendant had 
broken his contract with the plaintiffs, but because he failed to 
perform the legal duty implied from his relation of co-suretyship 
with them ; the claim, therefore, was in the nature of a claim for 
damages. It was also a claim arising out of a duty not to pay 
money but to replace consols, and on this ground it may be dis- 
tinguished from Adkins v. Farrington (9), where it was held that 
the right of one co-surety upon a promissory note against his co- 
surety was barred, a decision which agrees with Saunders v. Best(W). 
The present case is, in fact, the case of a debt payable on a con- 
tingency; the bond is not within 8 & 9 Win. 3, c. 11, s. 8, and 
might, under the old law, have been proved in bankruptcy after 
forfeiture[; and might, under s. 178 of the Act of 1849, be proved 

(1) 1 Doug. 49. (5) Law Rep. 1 H. L. 242. 

02) 1 Doug. 160. (6) Law Rep. 4 Ch. 58. 

(3) E. B. & E. 914 ; 28 L. J. (Q.B.) (7) Law Rep. 4 Ch. 274. 
56. (8) Law Rep. 4 Q. B. 56S. 

(4) 7 C. B. (N. S.) 711 ; 29 L. J. (9) 5 H. & N. 586 ; 29 L. J. (Ex.) 
(C.P.) 187. 345. 

(10) 17 C. B. (N. S.) 731. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 315 

before forfeiture. This distinction between a claim for damages 1S71 
and a debt has always been observed ; in the former case proof KENT 
was never allowed until the Act of 18G1 (s. 153): Boorman v. THOMAS. 
Nash (1) ; Green v. Bicknell (2) ; Young v. Winter (3) ; in the 
latter proof was allowed, and in this class were reckoned, before 
the Act of 1849, bonds which had been forfeited before bank- 
ruptcy, though conditioned to secure future payments : Wyllie v. 
WilJces(4); Staines v. Planck (5) ; Sammon v. Miller (6) ; Ex parts 
Day (7); Ex parts Fisher (8) ; see also Ex parte Barker (!>); and 
under that Act proof may equally be made in respect of bonds not 
yet forfeited, or covenants which relate to future payments : Young 
v. Winter (3). The same principle has been applied to guaran- 
ties : In re Willis (10) ; which decision was followed by Knight 
Bruce, V.C., in Ex parte Brook (11), in conformity with his own 
opinion, expressed though not acted upon in Ex parte Meyer (12), 
and was also approved and followed by the Lords Justices in Ex 
parte Barwis (13). These cases have overruled the previous decisions 
upon which Ex parte Meyer (12) was founded : Griffith & Holmes on 
Bankruptcy, vol. i., p. 577 ; and they are entirely in favour of the 
defendant here. The cases of South Staffordshire By. Co. v. Burn- 
side (14) (decided under 6 Geo. 4, c. 1C) ; and Nudge v. J?owaw(15), 
are distinguishable upon the ground pointed out in Mitcalfe \. 
Hanson (16), that there the obligation was to the continuance of a 
payment, not to the payment in the future of a single liability ; 
and they do not involve the proposition that a claim, in order to 
be proveable, must be capable of an exact estimation, a proposition 
inconsistent with In re Willis (10). 

B. V. Williams, in reply. In re Willis (10), and Ex parte 
Barwis (13), are distinguishable on the ground that there was a 
certain subsisting debt in respect of which the guarantie was given ; 

(1) 9 B. & C. 145. (9) 9 Vcs. 110. 

(2) 8 Ad. & E. 701. (10) 4 Kx. 530 ; 19 L. -1. (Ex.) 30. 

(3) 16C.B.40L ; 24 L. J. (C.r.)214. (11) 6 I). M. & G. 771. 

(4) 2 Doug. 519. (12) D. M. & G. 775. 

(5) 8T. R. 386. Per Lord A'en?/^, (13) 6 1). M. & O. 702: LT. L. '. 
C.J., at p. 389. (Bkr.) 10. 

(6) 3 B. & Ad. 59G. (14) 5 Ex. 129 ; 20 L. J. (Kx.) 120. 

(7) 7 Ves. 301. (15) Law Rep. 3 Kx. 85. 

(8) Buck. 188. (16) Law Hop. 1 H. L. '-Ml'. 



316 COUET OF EXCHEQUER. [L. R. 

1871 they do not tend to establish the principle that a claim may 

KENT be proved which cannot be estimated ; and the contrary is estab- 

THOM\S lished by Brett v. JacJcson(l) ; Mudge v. Rowan (2): and Parker 

v. Inee(3). The claim on this bond, notwithstanding its form, can 

only be for the amount of damage suffered by non-performance of 

the condition ; that is all which equity would allow to be enforced, 

or which the Court of Bankruptcy, administering both law and 

equity, would recognize as the claim ; and that claim is, until 

breach, wholly uncertain. 

BBAMWELL, B. I think the plaintiff is entitled to our judg- 
ment. Whether he will establish his claim to 1000, or whether 
he will be only entitled to such a sum as the jury may find to be 
the damage sustained by him by reason of the non-performance of 
the condition of the bond, we need not decide. For whether the 
bond is or is not within the statute of 8 & 9 Wm. 3, c. 11, it is in 
neither case within either s. 177 or s. 178 of the Bankruptcy Act, 
1849. As to s. 178, it appears to me that the opinion I expressed 
in Warburg v. Tucker (4) is correct ; and, indeed, the defendant's 
counsel finds it difficult to say that the present liability was p rove- 
able under that section as a " liability to pay money upon a con- 
tingency," unless, assuming the plaintiff to have a right to recover 
upon the bond as a debt, it were proveable as a " debt payable on 
a contingency," under s. 177. Assuming, then, s. 177 to be the 
material section, to bring a debt within it the debt must neces- 
sarily be one susceptible of valuation. Here I think (not for- 
getting the decision of In re Willis (5) ) there was not a debt 
payable on a contingency within the meaning of the section. 
By that section the right of the creditor claiming to prove is, to 
" apply to the Court to set a value upon such debt, and the Court 
is hereby required to ascertain the value thereof." This assumes 
that the debt is of such a kind that the Court can set a value 
upon it. Whether In re Wittis (5) was rightly decided, or whether 
it is distinguishable on the ground that the liability to pay was 
there absolutely certain, for that the original debtor, being insol- 

(1) Law Rep. 4 C. P. 259. (4) E. B. & E. 914, at p. 926; 28 

(2) Law Rep. 3 Ex. 85. L. J. (Q.B.) 56, at p. 59. 

(3) 4 H. & N. 53 ; 28 L. J. (Ex.) 189. (5) 4 Ex. 530 ; 19 L. J. (Ex.) 30. 



VOL. VL] TRINITY TERM, XXXIV VICT. 317 

vent, would pay nothing, it is not necessary to determine. If not 1871 
distinguishable, it has been certainly overruled by more recent KENT 
decisions, which have settled that the debt must be capable of 
valuation. Is there, then, such a debt ? We have not very ample 
materials before us, but we must take into account the contin- 
gencies which appear upon the pleadings. If the only one had 
been the duration of the life of Mrs. Price, it might have been 
calculated on the principles adopted by insurance companies. But 
there was also the contingency of survivorship. If the defendant 
survived his wife and Mrs. Price, he would have been entitled, as 
his wife's representative, to the fund, which would then have passed 
to the plaintiff as his assignee, and with a title enforceable against 
the trustee. But if the wife survived the husband she would be 
entitled to claim the fund ; or, if they both survived Mrs. Price 
long enough to entitle the plaintiff to claim to have a transfer of 
the fund, and a bill was filed against the trustees to obtain pos- 
session of it, the wife's equity to a settlement would arise, and the 
sum to be settled would depend on the view which the Court of 
Chancery took of the circumstances of the family. Another pos- 
sibility occurs ; suppose the bankrupt, after obtaining his dis- 
charge, to die worth 20,000?., and to make his wife executrix and 
sole legatee, and suppose that consols had in the meantime fallen 
to 80, so that the stock became of less value than 1000?. ; she 
might elect to transfer the stock rather than to pay the 1000?. 
Taking into account all these contingencies, I cannot see how this 
liability could possibly be valued : and since to make it proveable 
it is necessary that it should be capable of valuation, the claim is 
neither within s. 177 or s. 178 of the Bankruptcy Act, 1849. 

CHANNELL, B. I also am of opinion that this liability is within 
neither of the two sections, 177 and 178. It cannot be treated 
as within s. 178, for there is nothing to shew that the event 
happened within six months after the bankruptcy. Looking at 
the case, then, with reference to s. 177, I think it is not a " debt 
payable on a contingency " with in the meaning of that section. 
If the case could not be distinguished from In re Willis (1), 
there might be some difficulty ; but that case is distinguishable ; 
(1) 4 Ex. 530 ; 19 L. J. (Ex). 30. 



318 COUKT OF EXCHEQUER. [L. E. 

1871 and, laying it aside, the more recent decisions have clearly settled, 



KENT * na * where a valuation of the claim is impracticable there can be- 
THOMAS no P ro0 ^ > a P rmci pl6 wholly inconsistent with the conclusion 
which we are desired to adopt as established by that case. This 
is not a liability which there may be merely some difficulty in 
estimating ; but to estimate it is substantially impracticable. The 
right to prove in respect of debts not immediately payable depends 
entirely on the express provisions of the statute ; and it must be- 
clearly made out that that right exists before the corresponding 
relief of the debtor can be established. 

PIGOTT, B. I am of the same opinion. It is admitted that the 
case does not fall within s. 178. Is it, then, within s. 177 ? To 
be so it must be capable of valuation. This appears plainly from 
the provision of the section, that the Court shall set a value upon 
it, for the legislature cannot have intended to fasten on the Court 
an impossible task. Now, however this bond is looked at, whether 
as giving rise to a claim for damages or to a debt, the contingen- 
cies which must be looked at when you try to ascertain its value 
are so numerous and so uncertain in their character, that it is- 
impossible to solve the question of the amount for which the 
creditor should be admitted to prove. This plainly appears from 
the contingencies which my Brother Bramwell has stated ; and 
in deciding against the defendant, we are following the rule which 
the cases have clearly established. 

Judgment for the plaintiff. 

Attorneys for plaintiff : Brooksbank & Gdllard. 
Attorneys for defendant : Blake & Hughes. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 319 



[IN THE EXCHEQUER CHAMBER.] 1871 

June 20. 
BYRNE v. SCHILLER AND OTHERS. 

Ship and Shipping Charterparty Payment on account of Freiyht. 

Payments made in advance on account of freight cannot be recovered "back, 
although the vessel is lost. 

The plaintiff chartered a vessel to the defendants for a homeward voyage from 
Calcutta, with an option to the defendants to send the vessel on an intermediate 
voyage at a freight therein mentioned : " such freight to be paid as follows : 
12001. in rupees to be advanced the master by the freighters' agents at Calcutta 
against his receipt, and to be deducted, together with H per cent, commission on 
the amount advanced and cost of insurance from freight on settlement thereof, 
and the remainder on right delivery of the cargo at port of discharge, in cash as 
customary." By another clause the master was to " sign bills of lading at any 
current rate of freight required, without prejudice to the charterparty ; but not 
under chartered rates, except the difference be paid in cash." 

The defendants elected to send the vessel on the intermediate voyage, and paid 
the 1200?., but induced the master, whom they required to sign bills of lading 
below the chartered rates, to postpone payment of the difference till the cargo 
was complete. The difference was not paid, and the vessel was lost on her way 
out to sea. In an action for the difference : 

Held (affirming the judgment of the Court below), that the plaintiff was en- 
titled to recover. 

ERROR on a special case stated in an action on a charterparty, 
dated the 4th of February, 1868, by which the plaintiff's ship 
Daphne was chartered to the defendants for a voyage from Calcutta 
to London or Liverpool (1). 

By the charterparty the freighters were to have the option of 
sending the vessel on an intermediate voyage, at a named rate of 
freight. " Such freight to be paid as follows : 12007. in rupees, to 
be advanced the master by the freighters' agents at Calcutta 
against his receipt, and to be deducted, together -svitli 1 j per cent, 
commission on the amount advanced and cost of insurance, from 
freight on settlement thereof, and the remainder on right delivery 
of the cargo at port of discharge, in cash as customary." 

It was also provided as follows : " The master to sign bills of 
lading at any current rate of freight required, without prejudice to 
the charterparty ; but not under chartered rates, except the differ- 
ence is paid in cash." 

(1) Reported, ante p. 20. .' 



320 COUKT OF EXCHEQUER [L.R. 

1871 The defendants elected to send the ship on the intermediate 

BYRNE voyage, and required the master to sign bills of lading at rates 

SCHILLER under the chartered rates ; and they induced him to do so, without 

receiving the difference in cash, on the assurance that all would be 

made right when the vessel had finished lading. The difference, 

however, was not paid, and the vessel was lost on the voyage. 

This action was brought to recover the difference, amounting to 
7377. The Court below gave judgment for the plaintiff, and the 
defendants brought error. 

Butt, Q.C. (Baylis with him) for the defendants (1). The sub- 
stantial question in this case is whether a prepayment of freight is 
final, or whether it can be recovered back if the goods are lost, 
and the freight therefore never earned. The true doctrine is that 
it can be recovered back, unless there is a distinct indication of a 
contrary intention. That this is the old and well-established doc- 
trine in general mercantile law is clear ; and it is the rule which 
is adopted in all the European codes. It is thus stated by Kent, 
C.J., in Watson v. Duykinck (2), decided in 1808. After observing 
that the English authorities afforded little light upon the question, 
the learned judge says, " Cleirac in his commentary on the judg- 
ments of Oleron, art. 2, no. 9 (Les Us. et Coutumes de la Mer, p. 42) 
declares that in cases of shipwreck, the master is bound to render 
to the merchants the advances which they may have made upon 
the freight, and he cites a decision of one of the early jurists in 
confirmation of his doctrine: Naufragio facto exercitor naula 
restituit quse ad manum perceperat, ut qui non trajecerit. The 
ordinance of the marine (tit. du Fret, art. 18) recognizes the 
ancient rule, and ordains, that if goods be lost by the perils of the 
sea the master shall be holden to refund the freight which had been 
previously advanced to him, unless there be a special agreement to 
the contrary. This agreement, according to Valin (Com. sur 1'Ord. 
torn i. p. 661) always contains an express stipulation that the 
money advanced shall be retained in any event which may happen 
in the course of the voyage. The policy of the general rule on 

(1) The argument was commenced differently constituted, it was now 
in Hilary Term, but the Court being recommenced. 
(2) 3 Joh. E. 335, at p. 339 






VOL. VI.] TRINITY TERM, XXXIY VICT. 321 

this subject was to take a\vay the temptation to negligence or mis- 1871 
conduct, which the certainty of freight was calculated to produce BYRNE 
in the master. I ought, perhaps, to observe that there is a dictum 
of Saunders, C.J., stated in an anonymous case in 2 Show. 283, 
which would seem to imply that advance money for freight was in 
no event to be refunded ; but I do not place reliance upon that 
very imperfect report in opposition to the explicit opinions of the 
writers who have been mentioned. The general principle un- 
doubtedly is, that freight is a compensation for the carriage of 
goods, and, if paid in advance, and the goods be not carried by 
reason of any event not imputable to the shipper, it then forms the 
ordinary case of money paid upon a consideration which happens 
to fail." In a note to this case it is said, " Roccus is also of 
opinion that freight paid in advance must be refunded if the ship 
is lost during the voyage, or is prevented by any sinister accident 
from arriving at her port of destination : Naulum seu vectura non 
debetur, si locator navis propter amissam navim vel alium casum in 
earn contingentem iter non fecerit ; inio si solutum fuerit repetitur. 
De Nav. et Naulo not. 80. This doctrine he derives from the 
Digest (lib. 19, tit. 2, 1. 15, 6)." It may be added, that Roccus, 
at the place cited, gives an instance which exactly bears out the 
general principle so stated. The case of Watson v. Duykincli (1) 
was a strong case, because it was there found as a fact that it was 
the custom of New York (the port of shipment) that passage 
money was not refunded. This rule has been uniformly followed 
in America. In Griggs v. Austin (2), decided in 1825, it was 
adhered to by Parker, C. J. ; and in Pitman v. Hooper (3), where 
the point decided was that seamen's wages were payable out of 
whatever freight there was to pay them, Story, C. J., says, " in the 
ordinary case of freight paid in advance, I do not understand that 
if the voyage is not performed the owner can, without an express 
stipulation to the purpose, retain it; but the shipper is entitled to 
recover it back. ... I am aware that some of the English 
cases look the other way; and, whilst they seem to admit the 
doctrine, fritter it away upon very nice distinctions." More 
recently the same doctrine was laid down in Mint-urn v. Warren 

(1) 3 Joh. R. 335. (2) 3 Pick. R. 20. 

(:-) a Sumo. R. 50, at p. 66. 



322 COUET OF EXCHEQUEE. [L. E. 

1871 Insurance Company (1), and Benner v. Equitable Safety Insurance 
BYRNE Company (2) ; in the former case it was decided that the shipper of 
SCHILLER, goods had no insurable interest in advanced freight, the words of 
the bill of lading being, " paying freight for the said coal, nothing; 
sixteen dollars per ton being prepaid in New York ;" and in the 
latter, it was held that, the shipowner had an insurable interest on 
freight, without any deduction for cash advanced, notwithstanding 
it was so advanced under a provision in the charterparty, that cash 
should be furnished to the captain at cost and free of commission. 
The same rule is adopted in the Code de Commerce, art. 302, as 
well as in other European codes (3). See also Parsons on Shipping 
vol. i. p. 210. 

In England the law has been laid down in the same way by 
Lord Ellenborough, in Hashiter v. Buller (4), decided in 1807 ; 
and by Lord Abinger, in Leman v. Gordon (5) ; and the general 
principle that freight only becomes due by performance of the 
voyage was clearly stated in BlaJcey v. Dixon (6). The last cited 
case shews the true nature of a payment in advance where it is 
stipulated that it shall not be returned ; it is not properly freight, 
but a payment made for taking the goods on board ; and this shews 
the necessity of a clear indication of intention that the payment 
shall be of that nature. Accordingly in Manfield v. Maitland (7) 
it was held that a charterer had not an insurable interest in cash 
advanced to the captain under the charterparty ; but it must be 
admitted that in that case there was nothing to connect the advance 
with the freight, which was all to be paid on delivery, half in cash 
and half in bills. The only case which appears to authorize in an 
unqualified way a contrary rule is the anonymous case in 2 Show. 
283 ; but the facts of that case are not given, and all that is stated 
on this point is that Saunders, C. J., laid it down on the trial at 
Guildhall that, " advance money paid before, if in part of freight 

; (1) 2 Allen E. 8G. , provision is inserted in the New 

(2) 6 Allen E. 222. York Civil Code : see the sections on 

(3) See Italian Codice di Commercio Freightage, ss. 1115-1125. 
(1866), art, 409 (the same with art. (4) 1 Camp. 84. 

332 of the Codice Albertino of 1842) ; (5) 8 C. & P. 392. 

Spanish Codigo de Comercio, art, 787 ; (6) 2 B. & P. 321. 

German Handelsgesetzbuch, art. 618 ; (7) 4 B. & Aid. 582. 
Dutch Code, art. 482. No corresponding 



VOL. VI.] TRINITY TERM, XXXIV VICT. 

and named so in the charterparty, although the ship be lost before is?l 



it come to a delivering port, yet wages are due according to the 

proportion of the freight paid before: for the freighters cannot 

SCHILLER. 

have their money ;" from the form in which this is put, as well as 
from the two previous holdings in the case, it appears that the 
action was for wages, and may probably have been so decided out 
of favour to a claim of that nature ; the question of the right to 
retain the advanced freight only arose indirectly. In Andrew v. 
MoorJwuse (1), (1814), advanced freight was held not recoverable; 
but there the shipper had elected to pay in London, the port of 
shipment, at a lower rate of freight, which was held an indication of 
intention that he should take the risk. In De Silvale v. Kendall ('2) 
the shipper also failed in his action for the advances which were 
described as part of the freight, and were stipulated by the charter- 
party to be made "free of interest and commission," those words 
being held to indicate that the advance should not be a loan ; and 
Lord Ellenborough said (3) : "If the parties have chosen to stipulate 
by express words, or by words not express but sufficiently intelli- 
gible to that end, that a part of the freight (using the word freight) 
should be paid by anticipation, which should not depend upon the 
performance of the voyage, may .they not so stipulate ?" The 
case must be taken with reference to the words used by Lord 
Ellenborough ; that there must be some indication that the pay- 
ment " should not depend upon the performance of the voyage ;" 
and such indications appear in all the cases where advanced freight 
has been retained. In Saunders v. Drew (4) the ship was to be re- 
fitted for the homeward voyage on account of which the freight 
was to be advanced, and a specific portion of the homeward freight 
vas to be paid on that account ; in Hicks v. Shield (5) stress was 
laid on the fact that the charterer was to insure the advanced 
freight; and Frayes v. Worms (0) was decided on the same prin- 
ciple. Admitting, therefore, that the English rule to this extent 
differs from the rule of foreign law, that express words are not neces- 
sary ; yet none of the cases shew that some distinct indication of in- 

(1) 5 Taunt. 435. (5) 7 E. & B. G33; 2G L. J. (<>.!'..) 

(2) 4 M. & S. 37. 9Q5 

(3) At p. 42. (G) 19 C. B. (X.S.) 159 ; 34 I, J. 

(4) 3 B. & Ad. 445. (C.P.) 274 (nom. Trayts v. Worm*). 
VOL. VI. 2 E 3 



324 COUET OF EXCHEQUEE. [L. K. 

1871 tention is not necessary, although the rule mayliave been sometimes 
BYRKE laid down in terms wider than was necessary. If, however, the cases 
SCHILLER are thought to go farther, it is still open to this Court to correct 
them. But in the present case there is not only wanting any indica- 
tion of intention that the advance shall be retained, but there is an 
indication to the contrary ; for although it is expressly stipulated, 
with respect to the 1200, that the charterer shall insure, no such 
stipulation occurs with respect to the payment of differences. It 
is reasonable, therefore, to say that the intention of the parties was 
only to give to the shipowner a substitute for the amount of the 
lien which he lost by the signing bills of lading at a less rate than 
the charterparty freight. If so, the defendants would be entitled 
to recover the money back if they had paid it ; and can now, to 
avoid circuity of action, set it off against the plaintiff's claim: 
Charles v. Altin (1). 

[CocKBUiiN, C.J. (2). We are all agreed that the law is too 
firmly settled for us to depart from it, even in a court of appeal, 
that where freight is paid in advance, it cannot be recovered back. 
Counsel for the defendants, therefore, need only address themselves 
to the question of whether, upon the terms of the charterparty, 
the payment here was a payment 'on account of freight. We cannot 
shake the general principle, but we are not disposed to carry it 
any farther.] 

Milward, Q.O., (R. G. Williams, with him) for the defendants. 
Without the special clause in question the charterer could not call 
upon the captain to sign bills of lading for any other than the 
chartered rates. The immediate payment of the difference is the 
price he pays for exercising this option. It would be inconsistent 
with the whole tenor of the arrangement, and especially with the 
words that the difference shall be " paid in cash," to construe this 
payment as other than an advance of freight. He cited Kirchner v. 
Venus (3). 
Butt, Q. C., waived his reply. 

COCKBURN, C.J. I am of opinion that we must affirm this 
judgment, on the ground that, on looking at the clause in the 

(1) 15 C. B. 46 ; 23 L. J. (C.P.) 197. (2) After an adjournment, ' 

(3) 12 Moo. T. C, 361. 



VOL. VI.] 



TRINITY TERM, XXXIV VICT. 



325 



charterparty, the true construction is tliat the payment of dif- 
ferences under and according to it, was to be a payment on account 
of freight. 

It is settled by the authorities referred to in the course of the 
argument, that by the law of England a payment made in advance 
on account of freight cannot be recovered back in the event of the 
goods being lost, and the freight therefore not becoming payable. 
I regret that the law is so. I think it founded on an erroneous 
principle and anything but satisfactory ; and I am emboldened to 
say this by finding that the American authorities have settled the 
law upon directly opposite principles, and that the law of every 
European country is in conformity with the American doctrine 
and contrary to ours. In France and Germany the rule has been 
settled for a long time. Valin even doubts the wisdom and pro- 
priety of allowing any exception to the rule that an advance on 
account of freight must be repaid in the event of freight not 
becoming payable ; and we learn from Bedarride's great work on 
Mercantile Law (1) that at the time of framing the Code do 
Commerce the question was seriously discussed whether such an 
exception should bo introduced into the code, but that finally in 
favour of the principle of freedom of contract, it was inserted 
iu art. 302, which is as follows: "II n'est dii aucun fret pour 
les marchaudises perdnes par naufrage ou echouement, pillcVs 



1871 



BYRNE 
v. 

SclIILLKR. 



(1) After referring to Valin's opinion 
that no such exception ought to he 
allowed, the author proceeds : " Cette 
opinion se fit jour dans la discussion du 
Code de Commerce. On convint facile- 
ment que 1'exception aneantissait la 
regie, parcequc toutcs les fois quo le 
capitaine rec.oit line avance sur le fret 
on ne manque pas de stipuler que cette 
avance lui sera acquise quoi qu'il arrive. 
Mais le principc dc la liberto dcs con- 
ventions 1'emporta. On faisait d'ail- 
leurs rcmarquer que les chargeurs ne 
sont pas moins jaloux dc leurs intdrGts 
quo le capitaine des sicns, qu'ils no 
souscriront done a unc pareille con- 
vention qu'autant quo les avantages 
qti'ils font sc trouvcront balances par 



les avantages qu'ils so procurent."- 
Bedarride Com. on the Code de Com- 
merce, vol. ii. p. 43(i. Yalin, after ex- 
pressing the opinion ahove referred to, 
adds that the stipulation has neverthe- 
less become "comme de style" on 
Canadian voyages and in charterparties 
to the Crown. (Yalin, Com. sur 1'Ord. 
vol. ii. p. CGI). 

Of the discussion referred to by Bedar- 
ride, no trace is to be found in the pro- 
ceedings at the Conferences as reported 
in Locre', Legislation de la France, 
vol. xviii. pp. 255-398 ; sec especially 
pp. 353, 355, 3G8, 378. 

Art. 18 of the Ordonnancc is in sub- 
stance the same with art. 302 of the 
Code. 



326 COURT OF EXCHEQUER. [L. R. 

1871 par des pirates ou prises par des eimemis. Le capitaine est tenu 

BYRNE " de restituer le fret qui lui aura e"te avance, s'il n'y a convention 

g v - contraire." But whatever may be the true principle, I quite agree 

that the authorities founded on the ill-digested case in Shower (1), 

are too strong to be overcome; and if the law is to be altered, it 

must be done by the legislature and not by contrary decisions. 

That being so, we must consider the clause of the charterparty 
in question, to see whether the payment required by it to be 
made in the event of the master being called upon to sign bills of 
lading at a lower rate than the charterparty freight, was intended 
to be a final and conclusive payment on account of freight, or 
whether this obligation was merely introduced with the view of 
making good the loss of lien which would be so caused. Now 
though I should be glad to think that we could take the case 
out of a general rule with which we are not satisfied, yet, when wo 
look at the words of the charterparty, we must hold that the former 
is the true construction. I am much struck with the use of the 
word "paid;" and I agree that this payment prima facie means 
payment on account of the freight to which the shipowner would 
be entitled if the goods reached home. The shipowner was entitled 
to payment according to the rates stipulated for in the charter- 
party. But if the charterer finds that he cannot get those rates, 
he has secured to himself an option of calling upon the master to 
sign bills of lading for conveyance of the goods at a lower rate ; 
the shipowner, on the other hand, has said " by doing so, the 
security which I have by my lien on goods at freight is endan- 
gered ; if, therefore, you require this to be done, I, on the other 
hand, say I shall expect you to pay me the difference at once, and 
to pay it once for all." There is nothing unreasonable or savouring 
of extortion in saying that if the reduced rate of freight is to bo 
signed for, the difference shall be paid at once, and that part of 
the rate of freight originally stipulated for wiped out of the 
transaction. Looking at the fact that the charterparty contains 
nothing expressing any intention that this payment should be a 
mere substitute for the lien, and nothing inconsistent with this 
payment being an advance on account of freight ; I cannot come 
to any other conclusion than that the parties have agreed that this 
(1) Anon. 2 Show. 283. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 32 

payment should be a payment on account of freight, and so struck 1871 
out of the transaction. When we have reached this conclusion BYRNE 
tho case falls within the general rule. Therefore, not havin": been Vl 

!3C'1I1J,LEB. 

paid at all, inasmuch as if it had been paid it could not have been 
recovered back, the plaintiff is now entitled to recover it. 

BYLES, J. If we were at liberty to decide the case independently 
of authority wo might be glad to arrive at a different conclusion. 
But the current of authority, though arising from a somewhat 
scanty spring, has become too strong to be resisted ; it is so strong 
as to be binding upon us here even in a court of appeal ; probably 
even binding on the House of Lords. I think, therefore, that tho 
judgment must be affirmed, and will add nothing to the reasons 
which have been given by the Lord Chief Justice. 

KEATING, J. I am of the same opinion. It is impossible for 
us to act contrary to the current of authority, whether the prin- 
ciple was originally a sound one or not. It is no doubt unfortunate 
when the law of this country differs from the law which prevails 
in the rest of the world ; but the rule on this subject is fixed, 
and to decide otherwise would be to disturb innumerable floating 
contracts which have been entered into on that footing. The only 
question therefore is, whether the present case ranges under the 
class of cases where there is a payment on account of freight. I 
think it does, and that it was clearly the intention of the parties 
that this should be a payment in any event, a payment which 
should be absolute and not liable to be affected by the loss of the 
goods. 

MONTAGUE SMITH, J. I have felt some hesitation in coming to 
a conclusion from the difficulty of precisely apprehending tho 
ground on which the English rule has been placed. I appre- 
hend that rule to be that a prepayment of freight is not recover- 
able, and that it depends upon this, that there is an implied 
understanding that it shall be made once for all, and shall not bo 
subject to any contingency. Foreign law requires that for this 
purpose there shall be an express agreement between the parties ; 
our law, on the contrary, supposes there is an implied agreement 
unless it is expressly excluded. That being the foundation of the 

VOL. VI. 2 F 3 



328 COUET OF EXCHEQUER [L.E. 

1871 rule, the question is whether it was intended that the money to 

BYRNE be prepaid here was to remain in suspense and to be kept by the 

v - shipowner only in the event of the arrival of the goods, or whether 

feCIIILLEB. * 

it was a payment in the nature of a prepayment of freight 
and not recoverable. And looking at the rule of English law 
which has been so long established, which the parties must be 
assumed to have known, and with reference to which they must 
be assumed to have contracted, it appears to me that they in- 
tended the difference not to remain in suspense, but to be an 
absolute payment as to which the shipowner should be subject 
to no contingency. It is clear the master could only be required 
to sign bills of lading at less than the chartered rate of freight by 
virtue of the clause, " the master to sign bills of lading at any 
current rate of freight required, without prejudice to the charter- 
party ; but not under chartered rates except the difference is paid 
in cash ;" and it seems to me that when the parties say that the 
payment shall be "in cash," not in bills but only in money, they 
indicate an intention that the payment shall not be subject to any 
contingency. 

i LUSH, J. I am of the same opinion. It is of the highest im- 
portance that a rule of commercial law established for so many 
years should be adhered to. I was at one time somewhat struck 
by Mr. Butt's argument that the payment of differences was in- 
tended only as a substitute for the loss of lien. Such a provision 
might be a very reasonable one ; but looking at the terms in which 
the parties have expressed their agreement I think that is not the 
fair import of the words they have used ; but that it was intended 
that this should be a payment out and out. According to the rule 
of our law, therefore, it cannot be recovered back. 

Judgment affirmed. 

Attorneys for plaintiff: Doyle & Edivards, for H. Jones, 
Colchester. 

Attorneys for defendants : Paterson, Snow, & Burney, for A. M, 
White, Colchester, 



VOL. VI] TRINITY TERM, XXXTV VICT. 329 



JOHNSON v. EMERSON AND SPARROW. 1871 

Action for maliciously procuring an Adjudication in Bankruptcy Reasonable Ie '' 

and probable Cause Debtor's Summons Act of Bankruptcy Stay of 
Proceedings Bankruptcy Act, 18G9, s. 6, sttbs. G, s. 7. 

A debtor's summons, issuing out of a county court, having been served on the 
plaintiff, a trader, on the 28th of March, on the 2nd of April an application was 
made by him to dismiss it, and on the 12th an order was made that a bond with 
sureties should be executed by the plaintiff, within seven days of service of the 
order, and an action brought to try the debt ; the order also contained a stay of 
proceedings. The order was served on the 13th, and notice of securities was given 
on the 18th; but no appointment was made by the registrar, and the bond was 
not executed. The seven days having expired on the 20th, the creditor on the 
21st presented a petition in bankruptcy, stating as the act of bankruptcy the 
failure of the defendant within seven days after the service of the debtor's sum- 
mons to pay, secure, or compound for the debt ; and on the same day he obtained 
ex parte the appointment of a receiver. The plaintiff was afterwards adjudicated 
bankrupt; the adjudication was confirmed on appeal by the chief judge in bank- 
ruptcy, but was afterwards annulled by the lord justice, on the ground that the 
stay of proceedings in the order of the 12th of April was absolute, and not limited 
to the seven days given for the execution of the bond. 

Throughout the proceedings the defendant acted as the attorney of the creditor, 
and the order of the 12th of April, including the insertion of the limit of seven 
days, was drawn up by him. 

In an action for maliciously, and without reasonable and probable cause, pro- 
curing the plaintiff to be adjudicated bankrupt, the jury found that the defendant 
acted personally and of his own accord in carrying on the proceedings ; that he 
was actuated by malice ; and that he knew, when he filed the petition in bank- 
ruptcy, that the proceedings in bankruptcy were stayed until an appointment bad 
been made by the registrar for the examination of sureties and execution of the 
bond ; and the verdict was entered for the plaintiff. On the argument of a rule 
to enter the verdict for the defendant, or for a new trial : 

Held, by Kelly, C.B., and Cleasby, B., that, an application to dismiss the 
debtor's summons having been made and a stay of proceedings ordered, no act of 
bankruptcy was committed by the plaintiff in not paying, securing or comjKiund- 
ing for the alleged debt within seven days from the service of the summons ; that 
the allegation of an act of bankruptcy being in fact untrue, and being (as they 
inferred from the evidence) either known by the defendant to be untrue, or at any 
rate not bona fide believed by him to be true, he was liable in this action ; and 
that the error of the Court in making the adjudication did not discharge him from 
liability, but was only evidence from which (if the fact had been doubtful) it 
might have been inferred that he had reasonable and probable cause for thinking 
that the statement was correct. 

By Martin and Bramwell, BB., that under subs. 6 of s. G of the Bankruptcy 
Act, I860, an act of bankruptcy was committed at the expiration of the seven 
days from the service of the summons, the plaintiff not having paid, secured, or 

VOL. YI. 2 G 3 



330 



COUET OF EXCHEQUER 



TL.R. 



1871 



JOHNSON 
v. 

EMERSON. 



compounded for the debt (1) ; and that, at any rate, having regard to the decisions 
of the county court judge and the chief judge, and their own opinion that an act 
of bankruptcy had been committed, there was no evidence of want of reasonable 
and probable cause for presenting the petition. 

By Martin, B., qusere, whether under the present bankruptcy law, as regulated 
by the Bankruptcy Act, 1869, any action can be maintained for procuring an 
adjudication of bankruptcy. 

By Bramwell, B., no action is maintainable where the want of reasonable and 
probable cause is only error in point of law ; and 

Quzere, whether, although no adjudication ought to have been made pending 
the stay, the creditor had not a right to present a petition. (2) 

ACTION for maliciously, and without reasonable and probable 
cause, procuring the plaintiff to be adjudicated bankrupt (3). The 



(1) Since decided in Ex parte W-ier, 
Law Rep. 6 Ch. 

(2) So held in Ex parte Wier, Law 
Rep. fi Ch. 

(3) The declaration was as follows : 
That the defendants falsely and ma- 
liciously, and without reasonable and 
probable cause, filed a petition for adju- 
dication in bankruptcy against the 
plaintiff, according to the provisions of 
the Bankruptcy Act, 1869, and caused 
and procured the plaintiff to be ad- 
judged a bankrupt, and his real and 
personal estate, goods, and effects to be 
seized and taken from him (alleging 
that the adjudication was afterwards 
annulled) ; whereby and by reason 
whereof divers farms, dwelling-houses, 
and business premises of the plaintiff, 
that is to say, &c., were, on the 21st 
of April, 1870, forcibly entered into by 
night, and occupied by divers persons, 
who remained there injuring the plain- 
tiffs property and seizing and disposing 
of the plaintiffs goods then being 
thereon for and during the period of 
fifteen weeks that is to say, from the 
21st of April up to the 3rd of August 
in the same year. (Further alleging 
alarm and inconvenience to the plain- 
tiff and his family during the said 
period of fifteen weeks ; the disposses- 
sion of the plaintiff, and the loss of 
certain enumerated stock, goods, and 



chattels ; interruption during the same 
period of his farming and other busi- 
nesses ; injury to his business, and in 
particular to his business with certain 
named persons; loss of his banking 
balance and other debts, and of rents; 
loss of increased interest payable in 
default of punctual payment of interest 
on a mortgage; and legal costs and 
expenses). 

To this the defendants pleaded : 
1. Not guilty; 2. That the adjudi- 
cation was not annulled upon the 
merits. 

The adjudication was appealed against 
to Bacon, V.C., Chief Judge in Bank- 
ruptcy. As his (unreported) judg- 
ment in dismissing the appeal is several 
times referred to in the judgments of 
the Court, it is here given in full. 

BACON, V.C. The single question in 
this case is, whether or not an act of 
bankruptcy has been committed? I 
don't see what the county court judge 
could have done other than he has 
done, for it is very plain that an act of 
bankruptcy has been committed. An 
order is made on the application of the 
debtor that the summons be dismissed 
on his executing a bond with sureties 
within seven days. Therefore he must 
be taken to have known, as soon as 
that order was pronounced, that he had 
seven days, and only seven days, in 



VOL. VI.] 



TRINITY TEEM, XXXIV VICT. 



331 



-cause was tried before Kelly, C.B., at Guildhall, at the sittings 
after Hilary Term, and a verdict was entered for the defendant 
Emerson, and against the defendant Sparrow, with 15007. damages. 
A rule having been obtained pursuant to leave reserved, to enter 
the verdict for the defendant Sparrow, on the ground that there 
was no evidence of personal participation by him, or of malice, or 
of want of reasonable and probable cause ; and also for a new trial, 
on the ground that the verdict was against the weight of evidence 
and that the learned judge misdirected the jury in saying that there 
was reasonable and probable cause, and in the construction he put 



1871 

JOHNSON 

i\ 
EMEKMJN. 



which to do all that was required. 
What does he do ? He waits until the 
IGth of April before he suggests the 
names of any sureties. On the 18th 
the objection is taken that his solicitor, 
Mr. Hand, cannot be a surety ; and on 
the 19th objection is made to the other 
surety. Then he does nothing until 
the 22nd, which is after the petition in 
"bankruptcy has been filed, and then he 
suggests another surety instead of Mr. 
Hand. It is quite clear, the seven 
days having elapsed, that an act of 
bankruptcy had been committed. It 
was the debtor's own fault, and his 
alone, that the prescribed time was 
allowed to elapse. He neglected, up 
to the 16th, to do anything ; and when 
the objection was made to the sureties, 
he did not even apply to the registrar 
to extend the time for perfecting his 
security. Under these circumstances 
what could the registrar do ? Suppos- 
ing that he had neglected some part of 
his duty under the 162nd rule, that 
would not affect the case, for here the 
Court had decided that within seven 
days the sureties should be completed, 
and the registrar had nothing to do 
with fixing any other day. This is not 
an irregularity of which the debtor 
can complain, or say that any in- 
justice has been done. He had it en- 
tirely in his own hands to give se- 

2 



curity ; and I entirely concur in the 
view which the judge took of that part 
of the case. As to the act of bank- 
ruptcy being committed, it seems to 
me too clear to admit of any doubt. 

Then it is said that this is a case of 
great hardship ; and the debtor stated 
in his affidavit that he is able to pay 
all his debts over and over again. But 
this forms no ingredient in the question 
before me. The Court is called upon 
to pronounce its decision on one single 
point. It would be a most dangerous 
precedent if, after an act of bankruptcy 
has been committed, the Court were to 
go into an inquiry whether the bank- 
rupt has or has not the means of pay- 
ing his debts, and it would defeat all 
the objects of the law of bankruptcy. 
If the plaintiff has enough to pay his 
debts over and over again, it is very 
much to be regretted that he has been 
so ill-advised as to allow this proceeding 
to go on. All the other creditors would 
be prejudiced if I were to listen to this 
application, and reverse the adjudi- 
cation. There is no ground whatever 
for it, and I dismiss the application. 

The adjudication was afterwards 
annulled by James, L. J., on the ground 
that the stay of proceedings was abso- 
lute : Ex parte Johnson, Law Hep. 
5 Ch. 741. 

G 2 



3o2 COTJKT OF EXCHEQUER [L. E, 

1871 on tlie Act of Parliament and the rules and forms thereof, and on 
JOHNSON the facts of the case, it was argued on 

EMERSON. ^^ ^' ^' anc ^ ^ ^ P arr y> Serjf-, Henry James, Q.C., and 
Tapping, for the plaintiff, and by 

Huddleston, Q.C., Field, Q.C., and Merewether, for the defendant. 
The facts and arguments are fully stated in the judgments 

delivered. 

Cur. adv. vult. 

Jane 7. The following judgments were delivered. 

CLEASBY, B. This^ was an action against the defendant for 
falsely, maliciously, and without reasonable and probable cause, 
filing a petition in bankruptcy against the plaintiff, and causing 
him to be adjudged bankrupt and all his property to be taken 
from him, and the declaration sets out various heads of special 
damage, among others, the having the live stock taken from two 
farms which he was occupying, the loss of his credit as a draper, 
and that his tenants, whose names are given in the declaration 
(twelve in number) refused to pay him their rents. 

The case was tried before the Lord Chief Baron, at the sit- 
tings after Hilary Term, and a verdict entered for the defendant 
Emerson, and against the defendant Sparrow, with 15007. damages. 

It will be convenient, in what follows, to call Sparrow the- 
defendant. 

An application has been made pursuant to leave reserved to set 
aside the verdict and enter a verdict for the defendant on the 
ground that there was no evidence of personal interference by 
Sparrow, or of malice, or of want of reasonable and probable cause,, 
and also for a new trial on the ground of misdirection, and that 
the verdict was against the weight of evidence. 

The lestrned judge put three questions to the jury. In substance 
as follows : 

First. Did the defendant personally act in carrying on the pro- 
ceedings, and of his own accord apart from the instructions of his 
client as to the steps taken ? To which the answer was that he 
did so act. 

Second. Was the defendant actuated by malice in what he did, 
that is, by an undue and improper motive, for instance, coercing 



VOL. VL] TRINITY TERM, XXXIV VICT. 333 

the plaintiff, by the use of bankruptcy proceedings, into the ac- 1871 
knowledgment of a doubtful debt in order to gratify a powerful JOHNSON 
client ? To which the jury answered that he was so actuated. 

J * .hMEKSON. 

Third. Did the defendant know, when he filed the petition in 
bankruptcy, that the proceedings in bankruptcy were stopped until 
,n appointment had been made by the registrar for the examina- 
tion of the sureties and the execution of the bond? The jury 
answered that he did know it. 

The principal questions argued before us in this case were, 
whether there was evidence of a want of reasonable and probable 
cause for taking the proceeding of presenting the petition for 
adjudication, and whether there was any evidence of malice. 

It was hardly contested that the part taken by the defendant 
was such, that if he acted without reasonable and probable cause 
and was actuated by malice he would be responsible in this action, 
though he acted only as attorney. 

Everything was actually done by him which was complained of, 
and if he was himself under the influence of any bad motive or 
feeling, no one but himself would be responsible for that. And, 
therefore, if the question of malice was found against the defen- 
dant, it seems to dispose of this objection. Otherwise, there might 
be no redress in such a case, for the client might not act maliciously 
and so not be responsible, and the attorney might only use the 
opportunity given him by the client of doing so. 

It appears to me, that the verdict of the jury in answer to the 
first question is not wanted to dispose of this objection. However, 
the verdict certainly does dispose of it, independently of the ques- 
tion of malice, for it cannot be said there was no evidence what- 
ever to support it, having regard to the proceedings connected with 
the order of the 12th of April with the form of which the client 
had nothing to do, but which was afterwards made the ground for 
breaking off the completion of the security and at once making 
the plaintiff a bankrupt. 

It will be convenient here to state the facts and dates. 

The plaintiff was a customer of the bank of Sir Kobert Harvey, 
at Norwich. He owed him a certain admitted bank balance, had 
also mortgaged some freehold property to him for 3007., and there 
was a claim made by Sir liobert Harvey for a further sum or 



334 COUET OF EXCHEQUEK. [L. E. 

1871 alleged bank balance of 453?. This last item was denied by the- 
JOHNSON plaintiff on the ground that he had made over to Sir Eobert cer- 

, v - tain bills of exchange to the same amount, which he had not 

EMERSOK. 

indorsed or become a party to, and that the effect was that either 
the last mentioned balance never arose or had been satisfied. 

The defendant, the solicitor to the bank, about the 14th of 
March, wrote to the plaintiff that unless the account was paid 
they would proceed in bankruptcy against the plaintiff. The 
solicitor of the plaintiff wrote to the defendant to say that the 
plaintiff denied his liability, and that he was ready to appear to* 
any writ. 

On the 26th of March, the defendant issued a debtor's summons, 
under the Bankruptcy Act of 1869, which was served on the 
plaintiff on the 28th of March. 

On the 2nd of April, the plaintiff filed an affidavit in compliance 
with the Act, denying his liability. 

On the same day, the registrar appointed the 12th of April to- 
hear the application. On that day the parties and solicitors- 
attended, and an order was made in the following form : 

" The Bankruptcy Act, 1869. 
" In the County Court of Norfolk, holden at Norwich. 

" In the matter of a debtor's summons by Messrs. Harveys & 
Hudsons against William Johnson. Upon the application of 
William Johnson to dismiss this summons, and upon reading the 
affidavit of William Johnson, and upon hearing Sir Eobert John 
Harvey Harvey, Baronet, one of the firm of the said Messrs. 
Harveys and Hudsons, it is ordered that the said William John- 
son, within seven days from the service of this order upon him, 
enter into a bond in the penal sum of 912?. 9s. 8d. with such 
two sufficient sureties as the Court shall approve of, to pay such 
sum or sums as shall be recovered by Messrs. Harveys and Hud- 
sons against the said William Johnson in any proceedings taken 
or continued against him for the recovery of the demand men- 
tioned in such summons together with such costs as shall be given 
by the Court in which such proceedings are had. 

"And it is further ordered that all proceedings on this sum- 
mons shall be stayed until the Court in which the proceedings 
shall be taken shall have come to a decision thereon. 



VOL. VI.] TRINITY TEEM, XXXIV VICT. 335 



"Given under the seal of the Court this 12th day of April, 

1870. JOHNSON 

"By the Court, * 

" Thomas H. Palmer, Registrar." 

It was undisputed that the order in this form was drawn up by 
the defendant, and was in his handwriting, and was by letter of tli 
same date served by him upon the plaintiffs solicitor. It was 
sworn in the defendant's case, that the period of seven days was 
first mentioned by the registrar ; but as the case went to the jury 
upon the credit of the witnesses, and they found every question 
against the defendant, the fact last alluded to cannot be regarded 
as an undisputed fact. 

It was stated at the meeting on the 12th of April, that there 
would be no difficulty in obtaining an extension of the time for 
perfecting the security. This fact was proved in the plaintiff's 
case, and was not, I think, disputed in the defendant's. Indeed it 
seems to be referred to in one of the defendant's letters, viz., that 
of the 23rd of April. 

It did not appear that any opposition was made to giving 
security. 

It was sworn on the part of the plaintiff, that at the meeting of 
the 12th of April, Mr. Hand's name was mentioned as likely to be 
one of the sureties without any objection, but it was sworn on the 
part of the defendant that something was said by the registrar 
about the solicitor of the party being an objectionable surety. 

This part of the case must be regarded as disputed, and the con- 
duct of the parties and the correspondence is material as leading- 
to the proper inference. 

On the 16th of April Mr. Hand presented to the registrar a 
notice of sureties, pursuant to the 162nd of the bankruptcy rules. 
proposing himself and William Hardingham (describing him) as 
sureties; and the following correspondence passed. On the 16tli 
of April the solicitor of the plaintiff wrote to the defendant : 

"I send you here with notice of securities, copies of which I have- 
also forwarded to Mr. Palmer (the registrar). I presume you will 
have no objection to myself and the gentleman who will join me, 
and I will prepare the bond and have the same sent to the regis- 
trar. I suppose you will not require any affidavit; if you do, 



336 COUKT OF EXCHEQUER. [L. R- 

1871 kindly write me, and I will send same to be filed with the 
JOHNSON bond." 

EMERSON "' o wn ^ c ^ * ne defendant replied on the 1 8th : " We find that 
the registrar of the Norfolk County Court will in all cases upon 
principle decline to accept the debtor's attorney as a security for 
the payment of money. You will, therefore, substitute some one 
else for yourself, and we will make inquiries as to the other 
security proposed. We may add that in this case most certainly 
the affidavit of justification will not be dispensed with." 

On the following day the defendant wrote again, objecting to 
the name of Mr. Hardingham. 

Mr. Hand, on the 22nd of April, forwarded another notice, pro- 
posing Mr. Larter and Mr. Hardingham as the sureties, and w T rote 
as follows : 

" I understood from my clerk that on the hearing of the appli- 
cation to dismiss your summons, neither you nor the registrar 
objected to my being security for Mr. Johnson ; as you have now 
objected, it is not my intention to have any personal altercation on 
that point ; I have, however, written to my client, and he now sends 
in the names of his proposed securities, of which I inclose you my 
formal notice, and have also sent copies to the registrar. The 
matter had now better proceed in the ordinary course. Both the 
proposed sureties will make the usual affidavit of justification. 
I see by the order the security was to have been given within 
seven days. Events have shewn this to be utterly impossible. 
I am not aware upon what authority the registrar puts us under 
terms for seven days, but in this it is not in me to dictate." 
On the following day the defendant replied : 
"We cannot recognize your notice of sureties, dated on the 
22nd inst., as in consequence of your not having obtained from 
the Court an extension of time within which to perfect security, 
an act of bankruptcy, as we are prepared to contend, was duly 
completed, and on the 21st our clients presented a petition for 
adjudication of bankruptcy, the hearing of which has been fixed 
for the 12th of May at the registrar's office at 12 o'clock, and a 
receiver has been duly appointed." 

I may here add that it was not a valid objection to Mr. Hand 
as security, either on the part of the defendant or of the registrar, 



VOL. VI.] TKINITY TEEM, XXXIV VICT. 337 

that he was the solicitor of the debtor. In the Courts of Common 1871 
Law it has long been the settled practice not to take attorneys as JOHNSON 
bail for their clients, and there may be a professional feeling p M] ^g OK 
against doing so ; but I apprehend the registrar could not, as 
stated in the defendant's letter of the 18th inst., decline to accept 
Mr. Hand as security, and the defendant was not justified in 
writing as he did on the subject. 

On the 21st of April a petition for adjudication had been pre- 
sented, with an affidavit, prepared by the defendant, that the 
plaintiff had committed an act of bankruptcy ; and the act of 
bankruptcy sworn to was, that he did not, within seven days from 
the service of the debtor's summons, pay, or secure, or compound 
for the sum due. 

On the same day an affidavit was prepared by the defendant, 
and sworn by Sir R. Harvey, that it was highly important in the 
interests of the creditors that a receiver should be appointed to 
take immediate possession of the property of the plaintiff. And 
on the same day, on the application of the defendant, an order for 
the appointment of a receiver was made. 

On the night of the following day a person of the name of 
Bullard, the clerk of the registrar, having been appointed receiver, 
entered on the dwelling-house where the plaintiff was residing, and 
where he carried on his business, and he was deprived of the pos- 
session of all his property. 

Adjournments of the hearing of the petition for adjudication 
took place on account of the absence of the county court judge, 
and on the 7th of May both parties were heard upon the last- 
mentioned petition, and the plaintiff was adjudicated a bankrupt. 

The answer of the plaintiff to the petition, as far as I can collect 
it from the evidence, was that as there had been no appointment 
by the registrar, in pursuance of the lC2nd rule, to complete the 
security, there had been no default by him, and could therefore be 
no act of bankruptcy. 

It was urged on behalf of the petitioning creditor that the 
82nd section of the Bankruptcy Act, 1869, applied, and that the 
objection taken was in the nature of a formal defect or irregularity, 
and that no substantial injustice had been caused ; and the county 
court judge adopted this argument and decided accordingly. 



338 COUKT OF EXCHEQUER [L. E. 

1871 An appeal was presented to the Chief Judge in Bankruptcy, and 

JOHNSON heard on the 26th of May, and the chief judge dismissed the 
EMER N application with costs. (1) The reason given, according to the notes 
of the judgment handed up, was as follows : 

" An order was made on the application of the debtor that the 
summons be dismissed on his executing a bond with sureties within 
seven days. Therefore he must be taken to have known as soon 
as that order was pronounced that he had seven days, and only 
seven days, to do all that was required." 

Unfortunately this was a mistake as to the terms of the order, 
which, in compliance with rule 41 and with the printed form, 
contains an indefinite stay of proceedings on the debtor's summons, 
and was also, as is submitted, founded on a mistake as to an act of 
bankruptcy having been at that time committed. 

Accordingly an appeal was brought to the Lords Justices, and 
Lord Justice James, on the 2nd of August, 1870, without hesi- 
tation, allowed the appeal, on the ground that all proceedings on 
the debtor's summons were stayed when the petition for adjudi- 
cation was presented, and annulled the adjudication, giving the 
petitioner all the costs, except those of the appeal to the Lords 
Justices. (2) 

I wish to add here that, as the reason given for the annulling 
the adjudication (viz. that express stay of proceedings) was an 
obviously sufficient one, there is nothing to shew whether the 
learned Lord Justice thought the order to try the validity of the 
debt would not, in conjunction with the Act of Parliament, operate 
as a stay of proceedings, without any express stay ; or that his 
Lordship thought an act of bankruptcy could be committed during 
the proceeding to try the validity of the summons. 

The additional facts to be noticed are, that the debts of the 
plaintiff, besides his disputed debt, amounted to between 400?. and 
500?. ; that the live stock bullocks, &c. upon his farm, exclusive 
of horses, were sold for 800? ; that the property under mortgage to 
Sir E. Harvey for 300?. had been mortgaged for 1990?., and all had 
been paid off except 300?. ; and that, according to the statement 
made by the plaintiff upon oath in the proceedings upon bank- 
ruptcy, besides the goodwill of his business as a draper, he was 
(1) See ante, p. 330, n. (2) Law Rep. 5 Ch. 741. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 33l> 

possessed of property of the value of 5000, after paying all his 1871 

debts. JOHNSON 

There appeared upon the proceedings to have been only one 
meeting of creditors under the bankruptcy, and this was held on 
the 31st of May, 1870. 

It was said to be a meeting of the majority in value of the 
creditors, and, besides Sir B. Harvey's disputed debt of 4537., there 
were other creditors of various sums, amounting altogether to about 
170?. The defendant represented all the creditors there, having 
previously obtained their proxies ; and the resolutions said to be 
come to were, that Mr. Bullard (who had been the receiver) should 
be the trustee, that Sir B. Harvey and two other persons should be 
the committee for superintending the administration of the pro- 
perty of the bankrupt, and that all moneys received by the trustees 
should be forthwith paid into Sir K. Harvey's bank. 

The above is a general outline of the facts. 

A question was raised in argument before us, whether, inasmuch 
as an adjudication actually took place upon the petition, and this 
adjudication was afterwards supported upon hearing both parties by 
the Chief Judge in Bankruptcy, this action could be maintained, 
although it turned out that the adjudication was entirely erroneous, 
and was afterwards annulled by Lord Justice James upon appeal. 
Now when we deal afterwards with the question of reasonable and 
probable cause, full effect will be given to the opinion of the 
county court judge and of the Chief Judge in Bankruptcy as argu- 
ments, and very strong arguments, in favour of the defendant ; and 
if it appear that he acted bona fide, and had really only made a 
mistake, the fact that the judge made the same mistake would raise 
a strong presumption in his favour. But what I am now con- 
sidering is a suggestion which was made in the course of the argu- 
ment, that the matter having been ; brought regularly before the 
judge who heard both the parties, the adjudication was the act of 
the judge, and the person who instituted the proceedings could not 
be made responsible. 

As regards the present case, there are several answers to this 
objection. 

First : What is complained of is presenting the petition, which 
was at once followed by the appointment of a receiver, and which 



340 COUKT OF EXCHEQUEE. [I,. E. 

1871 were ex parte proceedings, and, long before any adjudication, 
JOHNSON destroyed the plaintiff's credit, prevented his carrying on his 
F * T business, and deprived him of the possession of all his property. 

It can hardly be disputed, if the county court judge had refused 
to adjudge the plaintiff a bankrupt and dismissed the petition 
for adjudication, supposing the petition was presented and the 
receiver sent in without reasonable ground and maliciously, the 
plaintiff would be entitled to recover. And if this foundation of 
the proceedings be unlawful and actionable, how can it be said that 
because the county court judge afterwards erroneously acts upon 
them the plaintiff is not entitled to recover in respect of the con- 
sequences ? The adjudication of the judge, which is set aside and 
annulled, cannot legalize what had been unlawfully done ; nor can 
it prevent what followed from being the consequence of what had 
been unlawfully done. And as soon as the adjudication is annulled, 
all that takes place is properly the consequence of the petition, 
because the annulling the adjudication is not merely the reversal 
of a judgment, leaving the judgment operative in the meanwhile, 
but it annuls it as if it had never been made ; and it is necessary 
to introduce express provision to protect the trustee and to give 
validity to his acts. This effect of annulling the adjudication 
follows not only from the word itself, but from sections 28 and 81. 
It must be borne in mind that a petition for adjudication is not 
like an ordinary commencement of an action, which leaves both 
parties in the same position. It is a most important ex parte pro- 
ceeding against a man, and must be on that account accompanied 
by a positive affidavit of an act of bankruptcy having been com- 
mitted, since it may be followed by another ex parte proceeding for 
the appointment of a receiver. The necessity for the affidavit and 
the form of it appear by the bankruptcy rules and forms. The 
petition may be likened to an application for a capias to hold to 
bail, and the latter application requires in like manner a positive 
and distinct affidavit of the debt. The one makes a man's property 
liable to be taken, the other makes his person liable to be taken ; 
the distinction being, that the one requires the intervention of 
another ex parte proceeding, viz., the application for a receiver, the 
other does not. 

Secondly : The statement contained in the affidavit accompanying 



VOL. VI.] TRINITY TERM, XXXIV VICT. .'Ul 

the petition for adjudication was untrue. It was either untrue in 187 1 

stating that an act of bankruptcy had been committed, or (if an JOHNSON 

act of bankruptcy in one sense had been committed) it was untrue EMBBSON 

in putting forward an act of bankruptcy as one which could then 

be made the subject of proceedings when it could not be so made. 

The petition itself assumes that there is no stay of proceedings, 

and the affidavit which accompanies it, and on which it is founded, 

of necessity contains the same assumption, so that the omission of 

the pending application to dismiss the summons, and of the stay 

of proceedings, is not only a suppressio veri, but also a suggestio 

falsi. 

But if the affidavit can be read as stating the facts truly, and 
the mistake was in the judge in acting upon it after the facts were 
brought before him, I should still be of opinion that, supposing it 
to be established that the proceeding was in reality an unfounded 
and improper one, and that there was malice and an absence of 
reasonable and probable cause, the defendant could not defend 
himself upon the ground that the injury was caused by the mis- 
take of a judge. Every one suffers more or less from the mistakes 
and errors of others. A man may mistake another for an assassin 
and deal with him accordingly. Or a man may by a mistake be 
convicted of a crime of which he is innocent. Such results are 
inevitable. Humanum est errare. It is an influence which some- 
times may operate (for a time at least) in a man's favour, but more 
generally to his prejudice. Is it not then a wrong deserving of 
redress if a man without any reasonable ground, and from a bad 
motive, brings another within the sphere and reach of this adverse 
influence, and to his great damage ? It may be that the whole 
proceeding is knowingly taken in the expectation of a mistake 
being made and to take the chance of it. The mistake of the 
judge may be the only hope of a vindictive prosecutor, and still ho 
may state nothing but the truth. 

Suppose, for example, a man to take proceedings against another 
at petty sessions for some offence against the game laws. The 
prosecutor makes out a good prima facie case by true evidence. The 
defendant being taken by surprise, or not having his witnesses 
ready, is convicted. He appeals to the quarter sessions, and the 
case is fully gone into, and it is established in the clearest manner 



342 COURT OF EXCHEQUER [L. E. 

1871 that the man is innocent, and that there was no real ground what- 
JOHNSON ever for the charge, and that the prosecutor must have known it, 
EMERSON anc ^ * ne conv i c tio n is quashed. In like manner the question 
before the petty sessions might have turned upon the applicability 
of some Act of Parliament to the matter brought forward, and the 
justices, from some cause anticipated and expected by the prosecu- 
tor, such for instance as the influence of advocacy, or imperfect 
argument of the question, or from the subject not being perfectly 
understood, or from strong opinions which the magistrates were 
known to entertain, came to a conclusion unfavourable to the 
accused, which was afterwards shewn to be clearly erroneous, and 
was accordingly set aside. Supposing in these cases it to be made 
out that there was no reasonable or probable cause for taking 
the proceedings, and the prosecutor in taking them was influenced 
by a bad motive, would not the person accused and injured have 
a claim to redress, and would it be said that the whole was the 
mistake of the judge, and that the administration of the law and 
not the prosecutor was to blame ? The difficulty of proving the 
absence of reasonable and probable cause might be increased in 
such a case, but that is all. The prosecutor would be to blame, 
and would be responsible because he instituted the proceedings 
against the accused, and did so without reasonable ground and 
from a bad motive. 

A case was referred to on the argument : Farley v. DanJcs (1). 
That was an action like the present, for wrongfully and without 
reasonable cause and maliciously suing out a commission in bank- 
ruptcy, and causing the plaintiff to be adjudicated a bankrupt. 
In that case the defendant had made an affidavit which contained 
untrue statements, but which if true did not amount to an act of 
bankruptcy. The plaintiff was nevertheless adjudicated a bank- 
rupt upon that affidavit. The bankruptcy being afterwards super- 
seded, the action was brought, and it was strongly contended for 
the defendant that the insufficient affidavit of the defendant had 
not caused the adjudication, but the blunder of the commissioner. 
The Court, however, unanimously rejected the objection. This 
case is a conclusive authority that the erroneous adjudication of 
the judge may properly be said to be caused by the defendant if 
(1) 4 E. & B. 493 ; 24 L. J. (Q.B.) 244. 



VOL. VI.] TEINITY TERM, XXXIV VICT. 343 

he has improperly set the law in motion. Lord Campbell, in his 187 1 
judgment, says : " The declaration was clearly proved. It alleges JOHNSON 
that the defendant caused and procured the plaintiff to be adjudi- E*iBsojf. 
cated a bankrupt. Is that true? The defendant presented a 
petition in which he alleged that the plaintiff had committed an 
act of bankruptcy. He swears to the existence of a debt, and 
that no payment has been made. And thereupon the adjudication 
takes place, which would not have taken place but for the 
defendant's presenting the petition and making the deposition." 

Mr. Justice Coleridge says, " It seems to me that we are to in- 
terpret the words ' caused and procured ' in their ordinary sense. 
An interpretation, as it seems to me, rather refined, and for which 
I see no authority, is suggested, that nothing is a consequence of 
the untrue statement which would not be a necessary and legal 
result of the truth. The words are satisfied, if the false statement 
in fact occasions the result." Mr. Justice Crompton says, " The 
only principle on which we could make the rule absolute would be 
that a legal consequence of the defendant's statement must be 
proved. But there is not the less wrong in causing the act to be 
done, because the act would be illegal at any rate. In a popular 
sense, a person who puts the law in motion causes the thing to 
be done." So that the adjudication is the consequence of the 
petition. 

In Cotton v. James (1) there had been an adjudication, and the 
form of the declaration appears, both from the statement of facts 
and the judgment, to have been for suing out the commission 
only ; and all that followed must have been regarded as a part of 
the damages, and not as a substantive cause of action. And in 
substance it is so in the present and in every similar case, and 
there are not separate causes of action upon the several alleged 
steps in the proceeding. And this seems of itself to dispose of the 
suggested objection to the plaintiff's recovering, founded upon 
there having afterwards been an adjudication upon hearing both 
parties. 

In the course of his judgment in the case of Farley v. Danks (2) 
Lord Campbell says : " Where a man makes a true statement of 

(1) 1 B. & Ad. 128. 
(2) 4 E. & B. at p. 499 ; 24 L. J. (Q.B.) 244. 



344 COUET OF EXCHEQUER [L. R. 

1871 fact, upon which the Court acts wrongly, the grievance, it is true, 
JOHNSON arises not from the statement, but from the judgment ; but it 
EMEBSOX wou ld be monstrous to hold that this is so where the statement is 
maliciously false." 

A man is not responsible for an act of the judge which is, 
upon the face of the proceedings, an illegal one, if he has only 
stated the truth. For example, if a man were to make a com- 
plaint before a magistrate for an assault, and the magistrate were 
to issue a warrant for an assault and highway robbery, the com- 
plainant would not be responsible, though he had set the law in 
motion without sufficient grounds. In such a case the illegal act 
of the magistrate would not be attributed to the complainant. 
And, of course, where a man only gives true information to a 
magistrate or other person, and the magistrate or secretary of state 
directs a prosecution, there the man merely giving the information 
is not responsible at all. But, in general, prosecutions in this 
country are at the instance of, and conducted, by private prose- 
cutors. In such cases the committal of the accused for trial is a 
judicial act done upon hearing both parties ; but I never heard it 
suggested that the prosecutor, who had applied for the warrant, 
and who had the man brought up, was not liable for all the con- 
sequences if it appeared afterwards that the prosecution was wholly 
unfounded, merely because the prosecutor had not stated what was 
positively untrue in his depositions. 

I apprehend that, if three things concur, the person prosecuting the 
proceedings is liable to an action. First, if the proceeding be really 
without foundation ; and this must be evidenced by the proceedings 
having finally terminated in favour of the plaintiff, whether the pro- 
ceedings be in bankruptcy or by indictment (see Whitworth v. Hall(V), 
where it is said that actions for malicious prosecutions, malicious 
arrests, and taking bankruptcy proceedings, stand upon the same 
foundation). Secondly, the proceeding must have been taken 
without reasonable and probable cause. And thirdly, lest persons 
should be deterred, by fear of the consequences, from enforcing 
the law with despatch upon bona fide suspicion, before a man can 
be made responsible it must be shewn that, in taking the proceeding, 
he was actuated by malice or by some bad motive. 
(1) 2 B. & Ad. 695,. at p. 698. 



VOL. VI.] TIUNITY TERM, XXXIV V1CT. 345 

It remains, therefore, to see whether in the present case there 1871 
was sufficient evidence upon these three matters. ~Jon.v^>T 

As regards the first viz., the proceeding being unfounded (or, 
as it is called in the declaration, false) the judgment of Lord 
Justice James, annulling the bankruptcy, is conclusive. 

As regards the second ingredient viz., the absence of reason- 
able and probable cause it is upon this part of the case that the 
chief difficulty (at least, in my mind) has existed, because this is 
a matter of law, and there may be sufficient undisputed facts to 
enable the judge to determine this question in the defendant's 
favour ; and if that be so the motive of the defendant is quite 
immaterial. 

The question is, whether there was reasonable and probable 
cause, or, more correctly speaking, a want of reasonable and pro- 
bable cause, for presenting the petition for adjudication on the 
21st of April as upon an act of bankruptcy then committed. 

In order to determine this, it is necessary to consider the pro- 
visions of the Bankruptcy Act, 1869, relating to proceedings under 
a debtor's summons. I think that it will be found that this Act 
has made a considerable change in the law, and that a person 
served with a debtor's summons who disputes the debt is now under 
the protection of the Court, instead of being, as he was before, to 
some extent, at the mercy of the creditor. 

It should be noticed that the Act, and the bankruptcy rules 
made in pursuance of the Act, must be construed together. 15y 
s. 78 the rules have the same power as if enacted in the body of the 
Act. 

In the argument before us, and also before Lord Justice James, 
this was not sufficiently attended to, and undue reliance was 
placed upon the language of s. 7, without regard to the rules 
of Court and prescribed forms which carry the enactment into 
effect. 

The act of bankruptcy is described in the Gth sub-sect, of s. 6, 
and is in the following terms : 

" That the creditor presenting the petition has served, in the 
prescribed manner, on the debtor a debtor's summons, requiring 
the debtor to pay a sum due of an amount not less than i>0l., and 
the debtor, being a trader, has for the space of seven days . . . 

VOL. VI. 2 H 3 



346 COUET OF EXCHEQUER [L. K. 

1871 succeeding the service of such summons neglected to pay such 
JOHNSON sum, or to secure or compound for the same." 
EMERSON ^ should be observed, that this act of bankruptcy is only found 
in the Acts of Parliament subsequent to 6 Geo. 4, c. 16, and is of 
a very stringent nature, for it may arise out of non-payment of a 
sum of money which the debtor may bona fide deny that he owes, 
but still may be unable to pay or secure. This power to compel a 
man to commit an act of bankruptcy is obviously liable to abuse, 
and may be made the means of great oppression : and as a person 
who uses a dangerous instrument is bound to the greater care, so 
a person using this power should be upon his guard, especially if 
he use it in an oppressive manner, not to overstep the law. The 
case of Oldfield v. Dodd (1) shews how strictly such an enactment 
is construed. In the course of the argument in that case Mr. 
Justice Cresswell speaks of its effect being to make a man a bank- 
rupt by an entirely new course of proceeding ; and Mr. Justice 
Maule characterizes it as an " extraordinary and summary mode of 
making a man a bankrupt." The present Act, however, gives the 
debtor some better protection than he had before. 

The 7th section first enacts that the summons shall be in the 
prescribed form, giving to the debtor, both in the body and in the 
indorsement, a proper warning of the effect of it ; and in the 
second part of the section it points out how the debtor, if he denies 
the debt, may apply to dismiss the summons, and may have all the 
proceedings on the summons stayed until the validity of the debt 
is determined. The language of this section, taken by itself, might 
give some ground for the inference that the giving the required 
security is a condition to the stay of the proceedings ; but the 
rules of Court deal clearly with this proceeding, and make the 
stay of proceedings unconditional. At the same time, these give 
full effect to this section, since, if the security is not given, the 
stay of proceedings might be removed. 

It is necessary to advert to the prescribed form of the debtor's 
summons. It is form 4 of the schedule to the rules, and in the 
body of it the debtor is informed that, unless he pays, or com- 
pounds for the debt within seven days, he will have committed 
an act of bankruptcy, on which he may be adjudged a bankrupt 
(1) 8 Ex. 578, at p. 582 ; 22 L. J. (Ex.) 144. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 347 

on the petition of the creditor, unless he shall have applied 1871 
within the time to dismiss the summons on the ground that he 
denies the debt; and the indorsement on the summons gives him 
notice that the application to dismiss the summons must be accom- 
panied with an affidavit denying the debt, when the registrar will fix 
a day for hearing his application. 

This indorsement is in compliance with the express direction of 
rule 22, and rule 23 provides that, upon the debtor filing the affi- 
davit, the registrar shall fix the day for hearing the matter and 
give notice to the creditor. 

The effect of the writ and indorsement appears to me to be 
quite clear, that if the application is made with the proper affi- 
davit, no act of bankruptcy is committed till the application is 
disposed of. For the 7th section of the Act provides that the 
summons and the indorsement shall be in such a form as to make 
known to the debtor the consequences of inattention to the requi- 
sitions therein made, and he is informed that he will have com- 
mitted an act of bankruptcy unless he applies within the seven 
days for a dismissal of the summons. So that he would be de- 
ceived by the contents if there was still an act of bankruptcy, not- 
withstanding he had applied with a proper affidavit and obtained 
#n appointment from the registrar to hear his application. 

It was suggested, I think, upon the argument, that the summons 
might be read as notifying that at the expiration of the seven 
days there would be a complete act of bankruptcy and then, as a 
separate clause, that unless an application to dismiss were made 
within the seven days, there might be an adjudication. But the 
effect of this would be that if the summons was dismissed, and no 
debt ever existed, there would still be an act of bankruptcy at the 
expiration of the seven days, though the defendant had denied the 
debt upon oath within that time : and a man might be compelled 
to commit an act of bankruptcy as often as a creditor swore that 
he owed him a debt above 50, though there was in each case no 
debt at all. It appears to me that the rational and also th<> gram- 
matical construction of the summons is, that if the defendant is 
not paid, &c., within seven days, then unless a proper application 
is made within that time to dismiss the summons, there will be an 
act of bankruptcy, and the defendant will be liable to be made a 

2 II 2 3 



348 COUET OF EXCHEQUER. [L. E. 

1871 bankrupt. And this agrees with rule 41, which provides that there 

JOHNSON shall be no adjudication upon a petition founded on such an act of 

EMEKSON bankruptcy between the application to dismiss the summons and 

the hearing of the application, which is substantially the same as 

enacting that there shall be no act of bankruptcy to found an 

adjudication. 

But the matter is made more clear when the prescribed form of 
the order is considered which is given if the debt is really dis- 
puted. It is No. 9 in the Appendix, and directs that the debtor 
shall give security by bond, with sureties to be approved by the 
registrar to pay any sum which the creditor may recover against 
the debtor in any proceedings taken to recover the sums mentioned 
in the summons and costs. And there is a separate paragraph at 
the end " And it is further ordered that all proceedings on this 
summons shall be stayed until the Court in which the proceedings 
shall be taken shall have come to a decision thereon." 

It thus appears, that under the present Act of Parliament, as 
soon as the debtor has made the application and filed the required 
affidavit, both parties are upon an equality, except that the regis- 
trar may, if he thinks proper, require security for the debt. There 
is nothing conditional in the order, and no number of days is 
fixed for the giving the security ; and the debtor is relieved from 
the difficulty which he was in before of being embarrassed and ob- 
structed in completing his security within seven days, and then 
having an adjudication snapped against him if he had a sharp 
practitioner to deal with. Under the present Act no step can be 
taken without applying to the Court. There is no presumption 
against the debtor, and provisions are introduced for his protec- 
tion as a litigant party before the Court. For example, it is pro- 
vided by rule 25, that unless the creditor shall take proceedings 
within twenty-one days after security is given to establish the 
debt, and shall prosecute them with effect and without delay, the 
debtor shall be entitled to have the summons dismissed with costs. 
This places the debtor in the same position as a defendant in an 
ordinary suit, when he obtains judgment as in a case of a nonsuit. 

The intended effect of the order made upon a denial of the 
debt, when that debt is made the foundation of an act of bank- 
ruptcy, becomes clear when that order is compared with the order 



TOL. VI.] TRINITY TEEM, XXXIV VICT. :j ID 

made upon a denial of the petitioning creditor's debt only. In 1871 
that case, the bankruptcy not being the subject of dispute, it is 
necessary to proceed with vigour and with despatch to prevent the 
dilapidation of the bankrupt's estate, and accordingly we find that 
the order No. 18 in such a case is essentially different from No. I) 
to which we have referred. By No. 18 the bond is to be given 
within a stated number of days, and the stay of proceedings is 
only conditional upon the bond being given. So that in the 
latter case the power is left in the hands of the creditor, which is 
taken from him in the former. 

It certainly appears to me to be the clear result of s. 7 of the 
Act, and of the rules 22, 23 and 41, and of the order Xo. 9, that 
as soon as the debt being denied that order is made, the existence 
of the debt, and the validity of the debtor's summons is placed 
sub judice in the court where the proceeding is taken, and, that 
being so, the effect and operation of the debtor's summons is 
necessarily suspended as long as that state of things continues. 
And as the act of bankruptcy is not the mere non-payment of the 
debt, but the non-payment in obedience to the summons, and the 
summons is the foundation of the act of bankruptcy, as long as 
the validity of the summons is sub judice, there can be no act of 
bankruptcy by disobedience to it. As soon as the validity of the 
summons is determined, then either it is dismissed, in which case 
there is of course no act of bankruptcy, or the application to dis- 
miss it is rejected, and then the result is the same as if there had 
-been no application to dismiss it at all and an act of bankruptcy 
had been committed ; and, if the date of it became of conse- 
quence, it would probably be at the expiration of the seven days 
mentioned in the summons. 

If the conclusion arrived at is correct, then not only was the 
petition for adjudication improperly presented while the validity 
of the whole proceeding was sub judice, and all proceedings con- 
sequently stayed, but the adjudication was obtained by the 
defendant upon an affidavit which was untrue, in stating that an 
-act of bankruptcy had been then committed, in particularizing as 
an act of bankruptcy to found an adjudication the non-payment of 
the debt, which was only an act of bankruptcy under a different state 
of facts from that which then existed, and in suppressing the uu- 



350 COUET OF EXCHEQUEK. [L. K. 

1871 conditional stay of proceedings. It is true this last fact must be 
JOHNSON taken to be known to the registrar, but the event shewed that it 
EMERSON mac ^ e DO difference whether he knew it or not ; and in fact the- 
omission from the affidavit of all notice of the application and 
stay of proceedings made it good upon the face of it, and a suffi- 
cient foundation for all the subsequent proceedings. 

One argument must be noticed which was addressed to us on 
behalf of the defendant, namely, that although no adjudication 
could be made during the stay of proceedings, yet there was nothing 
to prevent a petition for adjudication from being properly presented. 
And for this purpose we were referred to the language of rule 41. 
That rule declares that the debtor, in such cases as we are now 
considering, shall not be adjudicated a bankrupt on the petition of 
the creditor until after the hearing of the application to dismiss 
the summons, or when the summons has been dismissed, or during 
a stay of proceedings. And the argument was that it may be im- 
plied from this that, although there can be no adjudication, yet the 
petition may be presented. 

It is a sufficient answer to this to say that if the petition for 
immediate adjudication is well founded, the adjudication must 
follow ; and if a man cannot be adjudicated a bankrupt upon an 
existing state of facts, no petition can be properly presented upon 
those facts. But it seems to me to have been unnecessary to pro- 
vide, as is done at the end of the rule, that there shall be no 
adjudication if the summons is dismissed, or during a stay of pro- 
ceedings. It was necessary to provide for the interval between the 
application to dismiss and the hearing of the application, because 
the application itself was not made a stay of proceedings, and, 
having done so, the other matters were added (though unneces- 
sarily) lest they should seem to be excluded. But, further, the 
order itself contains a stay of all proceedings on the summons. 
How can it possibly be said that a petition which is an ex parte 
proceeding, to be followed by the appointment of a receiver, which 
is also an ex parte proceeding, and which destroys a man's credit, 
and deprives him of the possession of all his property, is not 
within the stay of all proceedings ? It is in fact the proceeding to 
be taken upon the summons, for s. 7 directs that the summons 
shall state that in the event of the debtor not paying, &c., a 



VOL. VI.] TRINITY TERM, XXXIV VICT. 351 

petition may be presented against him praying that he may be mi 

adjudicated a bankrupt. 

JOHNSON 

It follows from what has been said that the presenting the peti- r - 

., . . KMEUSON. 

tion, tne procuring the appointment of a receiver, and the procuring 

of the adjudication, were acts done in clear violation of the Act of 
Parliament. As the defendant was taking the proceedings under 
this Act, and putting it into force against the plaintiff, he must be 
taken to have been acquainted with its contents, and he did him- 
self, moreover, draw up and serve the order of the 12th of April 
containing the stay of proceedings in pursuance of the Act. It 
appears, therefore, to me that the defendant acted without reason- 
able and probable cause when he took such important steps at a 
time when they were forbidden by the Act under which he was 
proceeding. But I think this conclusion must be taken, subject to 
the qualification, that, in a matter of some diiliculty connected 
with a new Act of Parliament, and on which opinions might differ, 
a mistake might be made without any blame attaching, and that 
a person under the influence of such a mistake might still have 
reasonable and probable cause for taking a proceeding, which it 
turned out afterwards was not justified. 

But this, I think, introduces the province of the jury to deter- 
mine whether the defendant in what he did was acting under a bona 
fide mistake as to the effect of the Act. If I had been compelled 
to form my own opinion upon that question at the trial, I should 
have thought that the defendant was not acting under the influence 
of a mistake at all, but under the influence of a determination to 
drive the plaintiff into bankruptcy, and that, under that influence, 
he hastily and gladly, and perhaps blindly, laid hold of the oppor- 
tunity which the expiration of the seven days mentioned in the 
order gave him of arriving at his object. But in considering the 
question of reasonable and probable cause, it is quite right to take 
the opinion of the jury whether, at the time when the proceeding 
was taken, the defendant really believed it was a well-founded 
proceeding. This was settled by the case of llcslop v. Chap- 
man (I). It was an action for a malicious prosecution for perjury, 
and information had been given to the defendant which, if true, 
justified him in instituting the prosecution. The learned judge 
(1) 23 L. J. (,'. 15.) -lit. 



52 COUET OF EXCHEQUEK. [L.R. 

1871 who tried the cause directed the jury (1) that if the defendant 

JOHX$O>I~" " a * ^ ie ^ me wnen ne P re f erre d an d prosecuted the indictment, 
* acting upon the information which he had received, believed, and 
had any reasonable grounds to believe, that the plaintiff had 
sworn falsely .... then there was reasonable and probable cause 
for preferring and prosecuting the indictment ; but if the defend- 
ant at the time when he preferred and prosecuted the indictment 
did not believe the information he had received to be true, but in 
his own mind believed, and had reasonable grounds to believe that 
the plaintiff had not sworn falsely, and still more, if he believed 
that the plaintiff had spoken the truth, then there was no reason- 
able and probable cause." A bill of exceptions was tendered by 
the defendant to this direction, and, after argument, it was unani- 
mously upheld in the Exchequer Chamber. 

The rule had been clearly laid down before in the written judg- 
ment of the Queen's Bench, in Turner v. Ambler (2) : " In other 
words, the reasonable and probable cause must appear not only to 
be deducible in point of law from the facts, but to have existed in 
the defendant's mind at the time of his proceeding ; and perhaps 
whether it did so or not is rather an independent question for the 
jury, to be decided on their view of all the particulars of the 
defendant's conduct, than for the judge, to whom the legal effect 
of the facts only isjmore properly referred. In the present case 
the plaintiff had certainly dealt with the defendant's goods in such 
a manner as could hardly fail to raise a strong suspicion that he 
had committed a felony. On this the judge gave his opinion that 
there was reasonable and probable cause for the prosecution. His 
knowledge of this could not be made a matter of doubt. But the 
plaintiff imputed to him on the trial that he took unfair advantage 
of the irregular conduct of the plaintiff to turn him out of posses- 
sion of his house, without believing that a felony had been com- 
mitted ; and he pointed to the defendant's eagerness to get rid of 
him as a tenant as furnishing evidence, not of his motive, but of 
his opinion. It is difficult to distinguish between this state of mind 
and malice ; but the Court of Common Pleas, in a late decision, 
sustained a direction that the defendant, though cognizant of 

(1) 23 L. J. (Q.B.) at p. 50. 
(2) 10 Q. B. 252, at p. 2GO ; 16 L. J. (Q.B.) 158, at p. 160. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 353 

reasonable and probable cause, did not think it reasonable and mi 
probable, but acted from malicious motives only, and without that JOHNSON ~ 
belief." And to the same effect is the case of llavenga \. Mackin- j.-^^ v 
tosh (1), an action for a malicious arrest, in which a most accurate 
judge, Mr. Justice Holroyd, says (2) : " Assuming that a boim fide 
belief, founded upon the opinion of counsel, that a parly had a 
good cause of action, when in fact he had none, would be sufficient 
to shew that he had a probable cause of action (upon which, how- 
ever, I pronounce no opinion) ; still in this case, as it must be 
taken after the finding of the jury that he did not believe he had 
any cause of action, it is quite clear that there was no probable 
cause." And it is obvious that if this were not so, a man might 
intentionally make the abstract possibility of mistake when there 
was really no mistake, an opportunity for gratifying malicious 
feelings by an injurious proceeding. 

This matter has been fully considered, and the authorities re- 
ferred to, because it forms a very important ingredient in the 
present case. It is of itself a complete answer to what appears at 
first sight a serious objection to the plaintiff's case, viz., that if the 
county court judge and the chief judge thought there was good 
cause, the defendant was entitled to think so too. Another answer 
to that objection is, that those judges were imposed upon by the 
positive affidavit prepared by the defendant, which he ought to 
have known to be untrue, and which by the finding of the jury he 
did know to be untrue. For the opinion of the jury was taken 
whether the defendant knew and believed at the time of filing the 
petition, that further proceedings in bankruptcy were stopped until 
the registrar made the appointment for the examination of the 
sureties and the execution of the bond ; and the jury found that 
he did so know and believe ; and it was in reality until that ap- 
pointment that the proceedings were stopped. For if at that time 
the plaintiff had not been ready with suih'cient sureties to execute 
the bond, he would have lost the benefit of the order of the l'2th of 
April, and the registrar might have set it aside and dismissed the 
plaintiff's application, and so the proceedings in bankruptcy would 
then have gone on. 

It only remains to be considered upon this part of the case 
(1) 2 B. & C. 693. (12) 2 B. & C. at p. COS. 



COUKT OF EXCHEQUER [L. E. 

1871 whether there was sufficient evidence to be left to the jury of this 



JOHNSON knowledge and belief of the defendant ; for this is not to be 
EMERSON assumed, though there be an improper motive, without some 
evidence. (Turner v. Ambler (1) above cited.) 

Such knowledge and belief cannot, of course, be distinctly proved, 
and must be collected from all the circumstances ; but there was 
ample evidence of it for the jury. In the first place, the defendant 
may be taken to have made himself thoroughly acquainted Avith 
the provisions of an Act of Parliament under which he was taking 
these proceedings. Secondly (which is of itself sufficient), he had 
himself drawn up the order of the 12th of April, requiring the 
security to be approved of by the registrar, and ordering a stay of 
proceedings. Thirdly, it was open to the jury to consider that the 
stay of proceedings was corrected afterwards, because he found it 
would shew that he had no cause for proceeding. There are other 
circumstances in the correspondence on the subject of the security, 
in the consulting Sir R. Harvey on the 21st, and not taking proper 
advice in a doubtful case, and in insisting upon a written admission 
from the plaintiff of the legality of the proceedings as a condition 
for sparing the plaintiff's property, which are material upon this 
part of the case, as well as upon the question of malice. 

There was, no doubt, evidence the other way in the fact that he 
would hardly with this knowledge and belief take proceedings 
which were so likely eventually to be abortive. The jury may 
well have thought it a sufficient answer to that improbability that 
if a sufficient affidavit could be made to found a petition for an 
adjudication, and get a receiver at once appointed, the plaintiff 
would probably be crushed, and at the mercy of the defendant's 
client. And the groundless haste Avith which the receiver Avas 
appointed and put into possession (as Avill be afterwards pointed 
out) favours that conclusion. In fact, after the proceedings before 
the chief judge, the plaintiff Avas overwhelmed, and did sue for 
mercy, but the defendant or his partner insisted upon his signing a 
paper admitting that all the proceedings Avere legal and valid, and 
that he refused to do. It Avas also some evidence, no doubt, against 
the defendant's knoAvledge of the defect in the proceedings, that all 
the facts Avere known to the registrar, and he Avould probably at 
(1) 10 Q. B. 252, at p. 260 ; 16 L. J. (Q.B.) 158, at p. 160. 



VOL. VL] TRINITY TERM, XXXIV VICT. 355 

once set the matter right. But the result shewed that no appre- 1871 
hension need be entertained of the knowledge or judgment of the JOHNSON 
registrar, for he at once, and though with full notice of the facts, 
as is suggested, adopted the petition, sent the receiver into imme- 
diate possession, and assisted at and drew up the adjudication. 
There was, therefore, sufficient evidence to justify the conclusion of 
the jury upon this part of the case, and I cannot say that I am 
dissatisfied with their conclusion. 

The only remaining question is, whether there was any evidence 
which could properly be left to the jury of malice, or of the defend- 
ant acting under the influence of some improper motive. I appre- 
hend that the mere fact of the defendant taking the proceedings 
with the knowledge and belief that they could not properly be 
taken, w r ould be some evidence of malice. But in the present case 
the conduct of the defendant throughout the whole of the proceed- 
ings from the beginning to the end was before the jury ; and I do 
not say it deserved an unfavourable construction, but it certainly 
admitted of such a construction, and might be attributed to the 
influence of those motives of interest which are for the most part 
hidden beneath other appearances, and must be left to the careful 
conclusion of men of the world with good sense and good feeling 
rather than be made the subject of strict argument and reasoning. 

The whole proceeding to make the plaintiff a bankrupt was, no 
doubt, a lawful one ; but the object of the proceeding was not a 
proper one. There is no pretence for saying that the proceedings 
were taken to carry into effect the legitimate objects of the bank- 
ruptcy law, viz., the fair distribution of a bankrupt debtor's assets 
among his creditors, so that his debts may be paid. The proceed- 
ing was taken by an angry man to coerce the plaintiff into an 
admission of the debt. It appeared distinctly in the evidence that 
the defendant was told that if the plaintiff admitted the debt the 
proceedings in bankruptcy need not be taken. 

A proceeding originated in anger, and for the above purpose, 
was not likely to bo conducted with consideration or fairness, and 
there are many unfavourable circumstances in the conduct of the 
defendant throughout. He begins at the meeting before the regis- 
trar on the 12th of April, by throwing out a charge of the bills 
being forgeries, and somehow prevails upon the registrar to compel 



356 COUET OF EXCHEQUEE. . [L. E. 

1871 security to be given (which, having regard to the position of the 
JOHNSON plaintiff and to the offer of security which was made, and the 
EMERSON mortgage which Sir E. Harvey held), was quite unnecessary. 

He is then, somehow or other, a party to the period of seven 
days for giving the security being inserted in the order. I don't 
stop to examine the evidence for the defendant, as to this originat- 
ing with the registrar. I think it appeared, however, that this was 
the first case of the sort which the registrar had ever had. The 
defendant, however, draws up the order in that form at variance 
with the forms in use. And it is unfortunate for him that it was 
the insertion of this period of seven days which he afterwards made 
the ground of petition for adjudication. 

I pronounce no decided opinion upon the effect of the corre- 
spondence between the defendant and Mr. Hand on the subject of 
the sureties, but (bearing in mind that it had been stated on the 
12th of April, that there would be no difficulty in extending the 
period of seven days), a person reading it with some care would be 
able to form an opinion whether there was an appearance of reser- 
vation and design on either side, and the conclusion upon that alone, 
taken by itself, would be unimportant ; its importance would arise 
from its throwing light upon the conduct pursued on the 21st. 

On that day, somehow or other, in consequence of the terms of 
the order of the 12th of April, and what had taken place in the 
meantime, the plaintiff had been brought into some difficulty. 
This was obviously attributable not to the plaintiff himself but to 
Mr. Hand, whose conduct and default, if there was any, appears 
upon the correspondence, and who might have been liable to an 
action at the suit of the plaintiff, if the adjudication had been 
upheld. 

Now, under what circumstances did the defendant take the 
decisive proceedings of the 21st of April ? It appears that it was 
thought necessary to see Sir Robert Harvey on the subject. This 
was certainly no act of bankruptcy upon which the plaintiff could 
act as a matter of course, under his general directions to take pro- 
ceedings in bankruptcy against the plaintiff. Mr. Emerson gave 
some account of what took place when he saw Sir E. Harvey. 
The jury were entitled to come to their own conclusion as to the 
real effect of what took place. We cannot say positively that Sir 



VOL. VI.] TRINITY TERM, XXXIV VICT. 357 

Robert was told that the seven days had expired, and from the 1871 

elay interposed in giving the security the plaintiff was in a diffi- JOHSSOX 
culty, and might be taken at a disadvantage. J>ut we know from y ME ',j sox 
Mr. Emerson's statement, that it ended in Sir Robert Harvey 
saying, that if Mr. - - had had the matter, the fellow would 
have been made a bankrupt long ago. " The fellow would have 
been made a bankrupt !" What does this mean ? There was no 
real object to administer the estate in bankruptcy for the benefit 
of the creditors. It means " the fellow who has dared to dispute 
my debt would have been punished." And what is done ? On 
that day the " fellow" is made a bankrupt. The defendant on the 
same day prepares the petition, prepares the affidavit of Sir R. 
Harvey and gets it sworn, prepares the affidavit for a receiver and 
gets it sworn. Were these affidavits true? I think they were 
both false. 

Truth and falsehood, it has been well said, are not always op- 
posed to each other like black and white, but oftentimes and by 
design are made to resemble each other so as to be hardly distin- 
guishable ; just as the counterfeit thing is counterfeit because it 
resembles the genuine thing. The affidavit supporting the peti- 
tion has the resemblance of truth, but is, I think, not really true. 
It amounts to this. The plaintiff did not pay a sum within seven 
days from the service of the summons, and so has committed an 
act of bankruptcy. I have stated my opinion that the non-payment 
within the time is only an act of bankruptcy when an application 
to dismiss the summons is not pending. 

It was essential to the affidavit accompanying the petition (the 
petition being the groundwork for the appointment of a receiver), 
that there should be a positive statement of an act of bankruptcy, 
as appears by the rules and forms, and therefore the affidavit is in 
this form. It is untrue, as I have said, in stating that an act of 
bankruptcy had been committed. But it is equally untrue, if the 
act of bankruptcy was one which was not available because pro- 
ceedings were pending to try the validity of the summons, to conceal 
that fact, and so make an affidavit which justified upon the face of 
it the appointment of a receiver. It is really difficult to suppose 
that, after what had taken place, the defendant could believe that 
the plaintiff was precluded from disputing the debt, and hence the 



358 COURT OF EXCHEQUER [L. E. 

1871 conclusion of the jury in answer to the third question involves this, 

JOHNSON v ^ z -> that the affidavit was untrue, and knowingly so, in what was 

EMERSON concealed. But what can be said of the affidavit for a receiver as 

a part of the proceeding for making the fellow a bankrupt ? What 

necessity for a receiver before adjudication, when the real object of 

the proceedings is known ? 

The affidavit states it was highly important for the interests of 
the creditors that a receiver should be immediately appointed. 
Was there any real ground for this ? 

With the mortgage held by Sir Robert, which had been reduced 
from 1990Z. to 300?., and the readiness with which the other bank 
balance had been paid off, and the offer to secure the debt which 
was the real cause and ground of these proceedings, and the position 
of the plaintiff carrying on his business in the ordinary way, was 
it not known, or ought it not to have been known, to be untrue ? 

I am aware that Mr. Emerson, in his evidence on the trial, states 
that Sir Robert had said that the plaintiff might make away with 
his property. This was a matter of some importance to state at 
the trial ; but the jury would have to consider whether, if Sir 
Robert said so, he believed it, and whether the defendant, who 
knew what the real cause of the proceedings was, could have 
thought Sir Robert believed it under the circumstances, and when 
he was in possession of such a security. 

Further, after the chief judge had on the 26th of May affirmed 
the adjudication, the plaintiff seemed to be at the mercy of the 
creditor, and asked Mr. Emerson to intercede with Sir Robert for 
him. He, in effect, begged that everything might not be sold, and 
told him he was ready to give an ample mortgage upon his pro- 
perty and pay the disputed debt, and everything, rather than 
be ruined. They insist, as a condition, that he shall sign a paper 
admitting all the proceedings to be legal. This was on the 28th 
of May. At that time the amount of the plaintiff's liabilities was 
known, and the receiver had been in possession, and the ample 
extent of his property must have been known. It can hardly be 
doubted that all this was communicated by Mr. Emerson to his 
partner, the defendant, before the meeting of creditors. On the 
31st of May there is a meeting of the creditors under the bank- 
ruptcy. The only person present (as I read the proceedings), is 



VOL. VI.] TRINITY TERM, XXXIV VICT. 359 

the defendant, who has the proxy of all the creditors, from Sir 1871 
Eobert for 453Z. down to Mr. - , for 14s. &?., and it does place JOHNSON 
the defendant in a very unfavourable liirht that ho should, under , v - 

J EMERSON. 

circumstances which I have mentioned, have proposed and carried 
a, resolution that the disposal of the whole of the plaintiff's pro- 
perty should at once be placed in the hands of Sir Kobert (the 
principal person in the committee of inspection), and the proceeds 
paid into his bank ; in other words, that he should be placed 
entirely in the power of such a creditor. 

Those are the circumstances attending the step taken by the 
defendant to make the plaintiff a bankrupt on the 31st of May. 
I cannot see how there can be two opinions as to the plaintiff 
having sustained a most grievous injury. On the morning of the 
122nd of May he was a prosperous man carrying on his business 
in good credit, occupying two well-stocked farms, and he had been 
so thriving as to reduce the mortgage upon his freehold property 
from 1990?. to 300?. I cannot see that he had done anything 
wrong or approaching to what was wrong. He had disputed a 
claim made by his banker, but had offered ample security for it 
if established, and had a right to suppose that it was in a course 
for decision, and could not have any idea of the destruction which 
was impending over him. And on the night of that day, without 
anything like notice or preparation, his house is invaded, his trade 
put a stop to, his credit destroyed, and he is deprived of the 
possession of all his property. And this occurred after he had 
proposed, as I think I noticed, to give a charge upon his property 
for the debt if it was established. Is there to be no redress for 
this against the man who did it ? That really depends upon 
whether the proceeding on the 21st of April was taken by the 
defendant without reasonable and probable cause. I feel this to 
be a question of some difficulty, particularly as I understand there 
is some difference of opinion among my learned Brothers on tho 
subject. I have before considered how far the question of reason- 
able and probable cause depends upon the animus and state of 
mind of the defendant. But, as I think the decision of the present 
case turns upon a correct view being taken of reasonable and pro- 
bable cause, I will make an additional remark on it. I will 
suppose the defendant, feeling some doubt as to the legality of the 



360 COUET OF EXCHEQUER. [L. E. 

1871 petition for adjudication and the propriety of making an affidavit 
JOHNSOX of an act of bankruptcy having been committed, had taken proper 
EMERSON advice upon the subject, and received for answer that it was a 
matter of considerable doubt, and too doubtful to justify such 
a step being taken. Would he have had reasonable cause because 
the answer was a doubtful one ? I think not. I think a state of 
doubt in his own mind would not be enough, though in a really 
doubtful case an honest belief might : Ravenga v. Mackintosh (1). 
The refusal to entertain the concession asked on the 28th of May, 
which secured Sir Robert everything he could require, unless the 
plaintiff admitted the legality of all the proceedings, indicates a 
doubt then existing, even after the decisions which had taken place ; 
and I must say, apart from the finding of the jury on the second 
and third questions, all the circumstances of the case, from the 
beginning to the end, tend to shew that the acts of the 21st of 
April, which placed the plaintiff in the position of a bankrupt, 
were taken in headstrong and reckless obedience to the angry 
Avishes of Sir Robert Harvey. The defendant may have rushed to 
the conclusion that the plaintiff was in such a difficulty that the 
law could not enable him to get out of it ; but this is very different 
from a bona fide belief that the law justified the proceeding. 

I am, therefore, of opinion, that the defendant is not entitled to 
enter a verdict upon the questions reserved ; that there was no 
misdirection ; that the verdict is warranted by the evidence, and 
therefore that the rule should be discharged. 

BKAHWELL, B. The plaintiff complains that the defendants 
maliciously and without reasonable and probable cause presented 
a petition, praying that the plaintiff might be adjudicated a bank- 
rupt, and caused and procured him to be so adjudicated. This is 
the form and substance of his complaint. A verdict has been 
found for the defendant Emerson, and the question now is whether 
the plaintiff has shewn an absence of reasonable and probable cause 
as to the remaining defendant, Sparrow. I am of opinion lie has not ; 
on the contrary, in my judgment the defendant not merely had 
reasonable and probable cause for all he did, but all he did had real 
and proper cause, and was according to law. Let me say at the 

(1) 2 B. & C. 693. 



TOL. VI.] TRINITY TERM, XXXIV VI CT. 301 

outset that I think the plaintiff ought not to have been adjudicated 1871 
a bankrupt. I agree with Lord Justice James (1) that by the order .J O HV-OX 
of the 12th of April proceedings were stayed. I further think they ].' MI ,y^ ox 
were stayed by virtue of rule 41. I should also think they were 
stayed by implication without express words directing a stay ; upon 
the principle that where a matter is pending on the determination 
of which the next step depends, that next step cannot be taken, 
as for example a summons to set aside proceedings for irregularity 
is a stay from its return. In ray opinion the plaintiff's application 
to dismiss the debtor's summons of Sir II. Harvey was pending. 
He, the plaintiff, had done all he could do ; the registrar had failed 
to give notice under rule 1G2, and the seven days in the order of 
the 12th of April were not a time within which the plaintiff was 
to perfect the security at his peril. I mention these several 
.grounds for thinking the proceedings stayed from a motive which 
will appear. It is enough that they were stayed for any reason, 
.and nobody now disputes they were. If so, then the plaintiff 
ought not to have been adjudicated a bankrupt. I3y that adjudi- 
cation a wrong and injustice were done him. .. I do not say this 
disrespectfully. The judge made a mistake, as we see now it is 
pointed out. It is to be hoped this may be'forgiven in a judge, 
but it was this mistake that caused the wrong to the plaintiff: the 
defendant did nothing wrong. 

This I will now proceed to establish. As attorney for Sir li. 
Harvey, he issued the debtor's summons. Xo one can doubt 
Harvey's right to do that. The debt was due. It may be the 
plaintiff bona fide disputed it. But whether he did or not (as to 
which I shall have to say a word presently), the statute gives 
the creditor a right to issue such a summons. Jt may be issued 
against the most solvent and honest man in the country, who 
with perfect good faith disputes a debt. The next ^tep the de- 
fendant took as attorney for Harvey was to present the petition 
for adjudication, in which he stated that the plaintiff had com- 
mitted an act of bankruptcy, by neglecting to pay, or secure, 
or compound for the debt within seven days after service of the 
debtor's summons. In my judgment, that statement was true; he 
.had committed an act of bankruptcy thereby. It seems to me 
(1) Law Hep. 5 Ch. 741. 

VOL. VI. li I 3 



362 COUKT OF EXCHEQUEE. [L.IL 

1871 that under s. 6 of the Bankruptcy Act, 1869, subs. 6, a person served 
"JOHNSON " ~ w ^ n sucn a summons, owing the money, and not paying, or securing,. 
" or compounding within the seven days, commits an act of bank- 
ruptcy absolute and perfect ; not inchoate, contingent or defeasible. 
He may prevent his being adjudicated a bankrupt at once, by 
applying under s. 7, but he nevertheless has committed an act of 
bankruptcy. This, I own, to me seems plain if the statute is 
examined. For suppose he applies. If he procures the debtor'^ 
summons to be dimissed, of course the act of bankruptcy cannot 
be relied on to support an adjudication ; on the other hand, sup- 
pose it is not dismissed, then the Court, as it seems to me, must 
stay proceedings on the debtor's summons, either with or without 
security from the debtor, but only " for such time as will be re- 
quired for the trial of the question relating to such debt." By 
rule 24, if the question has been decided against the validity of 
the debt, the debtor (sic) shall be entitled to have the summons 
dismissed. By rule 25, if security has been given by the debtor, 
the creditor must proceed in a certain time, or the debtor's sum- 
mons may be dismissed. I find no rule as to what shall be done 
where the creditor establishes the debt. Kule 43 speaks of pro- 
ceedings being stayed on a petition. Either that or the principle 
of it applies ; for as the proceedings are only stayed till the debt 
is established, it follows that he may then proceed, viz., present 
his petition for adjudication. But that can only be on the ground 
that there is an act of bankruptcy, yet nothing further has hap- 
pened to constitute one. This shews, then, that the act of bank- 
ruptcy is perfect and absolute at the end of the seven days where 
the debt is due, and it is not paid, secured, or compounded for. 
Suppose no security is ordered, or the securities turn out worthless, 
is the creditor not to be able to make the debtor a bankrupt ? 
Sect. 7 says that the summons is to state that in the event of the 
debtor failing to pay or compound, a bankruptcy petition may be 
presented against him. The form No. 4 says, " you will have com- 
mitted an act of bankruptcy in respect of which you maybe adjudged 
a bankrupt on a bankruptcy petition being presented, unless you 
shall . . . have applied to the Court to dismiss the summons," i.e.,. 
the act will be committed, but adjudication may be prevented by 
an application to dismiss. w No doubt it is strange that, where good 



VOL. VI.] TRINITY TERM, XXXIV VICT. 3(J3 

security is given, the creditor will have the right to make the debtor 1871 
a bankrupt, but will have no reason for doing so. But the same JOHNSON 
consequence may follow in any case where the debtor disputes the 
petitioning creditor's debt : see s. 9. No doubt, also, it seems strange 
that a perfectly solvent man, bona fide disputing a debt, may in 
this way be made liable to bankruptcy proceedings. Whether in 
such case the petition might be dismissed under s. 8, on payment 
of the debt, it is not necessary to determine. I should think it 
might be; for under s. 80, subs. 10, it is certain proceedings 
might be stayed altogether. It is to be observed that the same 
difficulty would arise if it is supposed the act of bankruptcy is not 
complete till the debt is established. Whether the legislature 
contemplated this or not I cannot say. But let us not make the 
common mistake of supposing that because they did not intend it. 
they intended something else, when perhaps the truth is they had 
no intention in the matter. The words are plain, and the act of 
bankruptcy has been committed. I think the law was the same 
before this statute. 

But, further, the petition stated the truth. It stated an act of 
bankruptcy had been committed, but it stated in what way. If it 
was incorrect, it was in the conclusion it drew in point of law. 
But it is said it ought to have mentioned the stay of proceed- 
ings. As well might it be said that a candid declaration should 
anticipate the plea and the plaintiff's replication, or an indict- 
ment state that insanity was tho defence, but unfounded. This 
was a matter to come from the other side if relied on, and not 
from the defendant, who, I believe, notwithstanding tho finding of 
the jury, thought it no answer, and who, if lie thought otherwise, 
was no more bound to state it than he was any other matter he 
might think the plaintiff would rely on. Then it is said, that 
proceedings being stayed, the petition ought not to have been 
presented. I think Harvey had a right to present the petition, 
though it was not right to adjudicate the plaintiff bankrupt on it. 
at the time he was so adjudicated; Mr. Field pointed out that 
by s. 6 "no person shall be adjudged a bankrupt on any of the 
above grounds, unless the act of bankruptcy on which the adjudi- 
cation is grounded has occurred within six months before t!i< 
presentation of the petition." If, therefore, the trial of the validity 

212 3 



364 COUET OF EXCHEQUER. [L. R. 

1871 of the debt did not take place within six months of the seven days, 
JOHNSON the petition would be presented too late, unless presented before 
EMERSON *' na ^ trial ; and if it might be presented at some time before then, 
it might be at any time. Further, rule 41 does not say that in a 
case such as this the petition shall not be presented during the 
stay of proceedings, but that the debtor shall not be adjudged a 
bankrupt during the stay. Further, a receiver may be appointed 
before adjudication, as much where the act of bankruptcy is the 
one in question here, as in the case of any other act of bankruptcy. 
But for this purpose a bankruptcy petition must be presented. 
No doubt the latter part of s. 7 says proceedings are to be stayed 
on security being given, and the order of the 12th of April says 
that all proceedings on this summons (i.e., the debtor's summons) 
shall be stayed until the court in which the proceedings shall be 
taken shall have come to a decision thereon. That order, how- 
ever, for the reasons aforesaid, is perhaps to be understood with 
this limitation, that all proceedings other than the presentation of 
the bankruptcy petition shall be stayed. It is to be observed that 
the form is as applicable to the case where the petition has been 
presented as where it has not. So also the statute is consistent 
with a petition being presented before the security is given, and 
consequently before the stay operates. Be this as it may, it was 
for the plaintiff to take the objection. Harvey had a right to the 
judgment of the Court. Every Court which has ordered a stay of 
proceedings is competent to limit that stay where justice requires 
it. Whether, therefore, there was a stay or not of the presentation 
of a bankruptcy petition, I think Harvey had a clear right to 
present it, leaving the objection to come from the other side for 
the Court to deal with. Further, the Court to which the petition 
was presented, and the registrar particularly, knew the facts. 

It is argued that the presentation of the petition and suppression 
of the stay, caused the appointment of a receiver, which was 
after, and owing to the suppression of the proceedings being stayed. 
But the appointment of a receiver is not a consequence of the pre- 
sentation of the petition. It could not be unless there had been 
such presentation, but it is a consequence of an independent applica- 
tion. It is no more a consequence of the petition than a capias was 
the consequence of a writ of summons. This was the next step, 



VOL. VI.] TRINITY TERM, XXXIV VICT. 3G5 

viz., the procuring the appointment of a receiver, anil the taking 1871 
possession of the plaintiff's goods. This is no part of the plain- ~ j OUNfON 
tiff's complaint, as part of his cause of action, lie states it as a 

1 KMER8OK. 

consequence of what he complains of, but not as a substantive 
complaint. This is not a formal objection. Had that been his 
complaint, the questions and the damages would have been wholly 
different. I pass it by, then, for the present. The next matter 
was the hearing and adjudication. It is not pretended that the 
defendant made any untrue statement on that occasion. He con- 
tended that the facts shewed an act of bankruptcy, and a debt, 
and that Harvey was entitled to an adjudication of bankruptcy on 
his petition, and the Court so held. 

It appears, then, that the defendant has throughout made no false 
statement, nor suppressed anything he was bound to mention, but 
put his client's case according to the truth before the Court for its 
decision. If wrong, the defendant is wrong in point of law. I think 
where that is the case an action for malicious proceedings without 
reasonable and probable cause, is not maintainable. If it is in this 
case, so would it be in case of an indictment. We have no public- 
prosecutor, private prosecutors have trouble enough to encounter, 
and I think it would be most mischievous if they were to be told 
that they would be liable if they made a mistake in point of law, 
and the tribunal agreed with them. An extravagant case has been 
put of a lawyer of great repute, complaining to and persuading an 
ignorant magistrate that a larceny had been committed, when there 
was no pretence for saying so ; such a thing would be very dis- 
creditable to the lawyer and the magistrate ; to the latter for his 
ignorance or deference to the complainant's opinion. l>ut on 
principle, it is better that the person wronged in such a case should 
be without remedy, than that in every case it should be open to a 
prisoner prosecuted to say that the law was so egregiously mis- 
taken that there was a want of reasonable and probable cause. 

But I will take the case another way. I will suppose that a 
mistake or erroneous contention in point of law may constitute an 
absence of reasonable and probable cause though the actual facts 
are truly stated to the tribunal. Is the matter in thi> case so 
plain is the error so gross, that the defendant must or ought to 
have known he was wrong ? 



366 COURT OF EXCHEQUER. [L. B. 

1871 The wrong is supposed to be in stating that the defendant had 

JOHNSON committed an act of bankruptcy and in not stating that proceedings 
EMERSON were stayed. I have stated the reasons why I think the adjudica- 
tion should not have taken place. Let us look at some considerations 
the other way. By the latter part of s. 7 the Court " may upon such 
security being given (if any) as the Court may require, stay the pro- 
ceedings for such time as required," for the trial as to the debt. It 
is therefore on such security being given that the stay is to be. 
Form 9, then, is perhaps wrong. Perhaps it is wrong in four particu- 
lars. Perhaps it ought to name a time for giving security. Perhaps 
it ought to have an interim stay during that time, and such further 
time as may be ordered. Perhaps it ought to order the stay till 
trial on security being given. Perhaps it ought to give leave to 
present a petition for adjudication. The form does not do these 
things. The actual order made, did name a time for giving 
security was it so very gross a blunder to interpret it as staying 
the proceedings for seven days, and then further if security was 
given meanwhile ? Let us see who are parties to this mistake ; 
the plaintiff's advisers in the county court, the judge there, the 
plaintiff's advisers before the vice-chancellor, the vice-chancellor 
himself, the special judge in these matters, and the plaintiff's 
advisers before the lord justice, who alone found out the objection. 
It is very well now that it is pointed out to say it is clear. Sup- 
posing I thought so, I should say the question is not, how it appears 
to me or the particular judges who decide the case and who may 
Happen to have extraordinary learning and abilities. The question 
is how such a thing might well appear to this defendant before the 
matter was pointed out ; and then I must see how it appeared to 
others before whom it came ; and seeing how it did appear to them, 
I cannot say that an opinion shared in by so many was without 
reasonable and probable cause. So with respect to the act of 
bankruptcy. I cannot say there was no reasonable and probable 
cause for saying that one had been committed, for I think there 
had been. But that ought not to govern this case with the other 
judges, for I may be making a blunder exceptional, I hope, but 
too great to be credibly a blunder in any one ; but when they come 
to consider the question they must take the opinion of myself in 
addition to that of others who have shared it, and ask themselves 



VOL. VI.] TRINITY TERM, XXXIV VICT. 

"whether it is a mistake without reasonable and probable cause. I 1871 

-am of opinion then that if a mistake or untrue proposition in law jouxso 

would make liable to an action like this a person who truly stated E M ,* WO 

the fact, there is no such gross mistake or untrue proposition in 

this case as to shew an absence of reasonable and probable cause. 

Nor can I, with all respect, agree to the argument urged against 

the defendant, that if he in fact knew this opinion was wrong he 

had no reasonable and probable cause, however reasonable and 

probable the opinion might be. For if the opinion is reasonable 

and probable where is the evidence he knew it was wrong ? There 

is none. 

Further, I think a wrong question was left to the jury c Did 
the defendant know that the proceedings were stopped till the 
registrar should make an appointment for the examination of the 
sureties, and execution of the bond ?' For suppose he did, he had 
a right to the opinion of the Court on the point on a case truth- 
fully stated, as I say this petition was. A man's rights are to be 
determined by the Court, not by his attorney or counsel. It is for 
want of remembering this that foolish people object to lawyers 
that they will advocate a case against their own opinions. A 
client is entitled to say to his counsel, I want your advocacy, not 
your judgment ; I prefer that of the Court. 

I have now some remarks to make as to the appointment of a 
receiver. Here again I must say that as well as I can judge most 
clearly a receiver ought not to have been appointed. But here 
again I can see no blame in the defendant, nor am I sure there was 
any in Sir R. Harvey. The debt he claimed was clearly due to 
him. He might well think the defence was not bona fide. I will 
content myself with saying I cannot believe the plaintiff thought his 
defence a just one ; though he may have been told it was good in 
law. Then Harvey believed that some of the names to the bills 
were forgeries. Believing this believing the debt justly due 
believing as he well might that its denial by the plaintiff was not 
bona fide, might he not well believe that delay was the plaintiff's 
object, and delay for the purpose for which delay is often sought 
by debtors, viz., to misappropriate their effects ? I say I am by no 
means sure that Sir II. Harvey was not justified in wishing to have 
,a receiver. But what did the defendant do ? He does not appear 



368 COUET OF EXCHEQUER. [L. IL 

1871 to have known the plaintiff's circumstances, nor anything about 
JOHNSOX nmi > except that he was denying a debt clearly due. Then, when 
EMEKS x Harvey swore the affidavit, he did it to get a receiver appointed. 
Can it be said the defendant was wrong in acting as he did ? It 
seems to me impossible to say so. Here again the defendant has 
made no false statement. If Harvey's affidavit was untrue, it is- 
not shewn that the defendant knew it to be so. All the defendant 
has done has been to ask the judgment of the Court on the case 
he presented. Further, this case was presented to the registrar,, 
who knew all that had happened in the court. I confess I think, 
he ought to have refused the receiver on an ex parte application 
under the circumstances ; but if he was wrong it was his fault and 
not the defendant's. I desire to be understood as speaking with, 
reserve [on this point, as it is not specifically before us, and may 
be the subject of another trial. Moreover, I repeat, that there is 
no complaint of this in the declaration as a cause of action, and 
that the verdict cannot be sustained on this ground. Wholly 
different damages would be given. No question went to the jury on. 
this, and the utmost the plaintiff would be entitled to is a new trial. 
On these grounds, I think, there was no absence of reasonable and 
probable cause. If there was, then there was abundant evidence of 
malice, or rather malice was proved. Because the case would then 
be, that unjustifiable legal proceedings were taken to coerce an 
admission of a debt. Mr. Field in effect admitted this. The 
attorney, party to this, would be as liable as his client. His duty 
to his client would no more excuse than would the duty of an 
assassin to the man who hired him. It would be a duty he had: 
assumed which he was not bound in law to perform, and might 
have renounced. But for the other reasons I have given, I think 
this rule should be absolute to enter a verdict for defendant. If 
there is a scrap of evidence, still the verdict is wrong, and there- 
should be a new trial. 

MARTIN, B. This was an action for falsely and maliciously, and 
without reasonable or probable cause, presenting a petition in 
bankruptcy against the plaintiff, and procuring him to be adjudged 
a bankrupt. The facts of the case are very simple and the material 
ones in writing. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 

The plaintiff was a trader at North "SValsham, in Norfolk, and a 1871 
customer of the Crown Bank of Norwich, which had a branch at JOWSSQX 
North Walsham. The late Sir Robert Harvey was the senior FjI /,' iSON 
partner in the bank, and is alleged to have been a man of very 
imperious and domineering temper. The bank claimed a balance 
of upwards of 400Z. to be due by the plaintiff on a banking account ; 
but the plaintiff denied the debt, and insisted that nine dishonored 
bills of exchange which he had paid into the bank, but which he 
had not indorsed, operated as payment or satisfaction. It may 
here be stated that this question has been the subject of an action 
in this Court, and that there was not the slightest pretence for the 
allegation that these bills operated as payment. 

The defendants are attorneys at Norwich, and Sir Robert Harvey, 
in the beginning of March last year, instructed them to make the 
plaintiff a bankrupt. They proceeded to do so, and their first 
step was by a letter of the 4th of March, 1870, wherein they 
demanded payment of the debt. Payment not being made, they, 
upon the 26th of March, applied to the County Court of Norfolk, 
holden at Norwich, which Court had jurisdiction in the matter, for 
a debtor's summons under the 7th section of the Bankruptcy Act, 
1869 (32 & 33 Viet. c. 71.) The summons was granted and duly 
served upon the plaintiff. Under the same section the plaintiff was 
entitled to apply to dismiss the summons, and he did so, and upon 
the 12th of April all the parties, Sir liobert Harvey, and the 
defendant Sparrow as his attorney, and the plaintiff and his 
attorney, attended before the registrar (see s. 67) and upon that 
day an order was made sealed with the seal of the Court, and 
signed by the registrar "that the plaintiff should within seven 
days from the service of the order, enter into a bond with two 
sufficient sureties as the Court should approve, to pay such sum as 
should bo recovered by Messrs. Harvey in any proceeding to be 
taken against the plaintiff for the recovery of the debt, together 
with costs." And it was further ordered " that all proceedings on 
the summons should be stayed, until the Court in which the pro- 
ceedings should be taken should have come to a decision thereon/' 
Mr. Sparrow, one of the defendants, prepared the order. It was the 
first order of the kind made by the Court, and it was proved that 
the attorney in the proceedings usually prepares such documents. 



370 COURT OF EXCHEQUEK. [L. K. 

1871 It is said that the order is not in accordance with the 162nd rule 



JOHNSON made under the authority of the Bankruptcy Act, 1869, and it may 
EMERSON ^ e so ' ^ u ^ a c ^ er ^ ^ * ne attorney for the plaintiff was before the 
registrar, he did not object to it, on the contrary he appears to 
have acquiesced in it, and gave the names of the sureties, one of 
whom was Mr. Hand, the plaintiff's attorney. It does not seem 
to me material to consider whether this order was in a proper 
form or not. It was an order made by a Court of Eecord of 
competent jurisdiction, and I think it is a valid order until it be 
set aside by the Court itself (s. 71) or by a Court of Appeal, 
which it never has been; on the contrary it was acted upon by 
Lord Justice James, who, upon the clause in it as to the stay of 
proceedings, set aside the adjudication of bankruptcy of the 
plaintiff hereinafter stated. The order was duly served upon the 
plaintiff. During the seven days a correspondence took place 
between the defendants and Mr. Hand, and in one of the letters, 
the defendant wrote that the registrar objected upon principle to 
the attorney for the alleged debtor being one of the sureties. The 
other surety was also objected to, and in the result no bond was 
executed within the seven days, which expired on the 19th. 

Upon the 21st, by the express direction of Sir Kobert Harvey, 
a petition in bankruptcy was presented by the defendants and 
served upon the plaintiff. Upon the same day an order was made 
by the Court under the 13th section, appointing a receiver and 
directing immediate possession to be taken of the plaintiff's pro- 
perty, which was done. The act of bankruptcy alleged was, that 
the petitioning creditor had served on the plaintiff a debtor's 
summons, and that he being a trader had for seven days neglected 
to pay the debt, or secure or compound for it (s. 6, subs. 6). The 
plaintiff objected to the petition, which he was entitled to do 
under the 8th section, and several hearings took place before the 
learned judge of the county court himself, and the result was that 
upon the 8th of May he adjudged the plaintiff to be bankrupt. 
The order is under the seal of the Court, and is signed by the 
judge, and states that proof satisfactory to the Court of the debt of 
the petitioner, and of the trading, and the act of bankruptcy alleged 
to have been committed, having been given, " it is ordered that 
the plaintiff be and he is hereby adjudicated bankrupt." 



VOL. VI.] TRINITY TERM, XXXIV VICT. :371 

The order was duly gazetted and advertised. It does not seem 1871 
to have occurred to any one before the matter came before Lord JOHN-SOX 
Justice James, that the order of the 12th of April was a stay of 
proceedings, nor did the plaintiff propose before the county court 
judge to give a security in order to have the question relating to 
the debt tried. He proposed to give a charge upon some mortgaged 
property, which will hereafter be referred to, but this Sir Ixobert 
Harvey refused to accept. The plaintiff was dissatisfied, and 
appealed to the Chief Judge in Bankruptcy ; first, to rescind the 
order for the receiver, and second!/, to annul the adjudication. 
Both were argued by counsel and both dismissed with costs. Again 
no complaint seems to have been made that the order of the 12th 
of April was a stay. The question discussed seems to have been 
whether there was an act of bankruptcy. Another appeal was 
then made to Lord Justice James, who annulled the proceedings 
upon the ground that the order of the 12th of April was a stay at 
the time of the petition and adjudication. (1) An application 
was made to the Lords Justices for leave to appeal to the House 
of Lords, which they refused, and thereupon this action was 
brought. 

The cause came on to be tried before the Lord Chief Baron at Guild- 
hall, and at the conclusion of the plaintiff's case the learned counsel 
for the defendants applied for a nonsuit. The learned judge stated 
liis opinion to be that there was no evidence against Mr. Emerson, 
but that there was evidence against Mr. Sparrow, but reserved his 
judgment until after the evidence for the defence had been given. 
At the conclusion of the case he directed the jury to find a verdict 
for the defendant Emerson, and gave leave to the defendant Sparrow 
to move to enter a verdict for him, and left three questions to the 
jury. First, did the defendant personally participate and act in the 
instituting and carrying on the proceedings in bankruptcy, apart 
from the instructions of his clients, and of his own accord. Second, 
was the defendant actuated by malice, that is as explained, by any 
undue and improper motive, as, in order to please his clients, to 
coerce the plaintiff into the acknowledgment of a doubtful debt 
and one which he denied to be due. Third, did ho know or believe 
\vhen he filed the petition in bankruptcy that the proceedings to 
(1) Law Rep. 5 Ch. 741. 



372 COURT OF EXCHEQUER. [L. R. 

1871 obey the order of the 12th of April, and any further proceedings 

JOHNSON i n bankruptcy were stopped until the registrar should make an 

EMER N appointment for the examination of the sureties and the execution 

of the bond? The jury found them all in the affirmative, and 

assessed 1500Z. damages, and the verdict was entered for the 

plaintiff for that sum. 

A rule was moved for on behalf of the defendant Sparrow, to 
enter the verdict for him, and also for a new trial. It has been 
argued, and I am of opinion that it ought to be made absolute to 
enter the verdict for the defendant, upon the ground that there 
was no evidence to go to the jury to support the cause of action 
alleged in the declaration. 

It was said, and truly, that the proceedings in bankruptcy were 
very harsh proceedings. Bankruptcy is the proper step when a 
man is so largely indebted that all his property is required to pay 
his creditors, and ought not to be had recourse to when payment 
can be enforced by an execution in an ordinary action at law. In 
this case also, Sir Eobert Harvey had in mortgage property of the 
plaintiff which he must have known would have been ample security 
for the banking account, but this security he refused to accept. 
All that can be said for him is, that probably he was very angry 
and indignant at the defence set up by the plaintiff to the debt 
due to the bank; but as regards the defendant, the evidence is 
that the refusal to accept the mortgage security was the personal 
act of Sir Eobert Harvey himself. 

The nature of the present action is well understood, and is ex- 
plained in the notes to Skinner v. Gunton. (1) It is part of the 
liberty of the law that any man may prefer an indictment against 
another for an alleged crime, but when the indictment is dis- 
posed of in favour of the accused, he may maintain an action 
of tort for damages, provided he can establish that the charge 
was false and malicious, and without reasonable or probable cause. 
Upon the same principle, although no action is maintainable for 
the mere bringing a civil suit, however groundless and malicious, 
yet formally, if the suit was commenced by capias followed by 
arrest, a similar action was maintainable ; and so also in cases of 
bankruptcy under the old law, when the proceeding was false, 
(1) 1 Wins. Saund. 228 d. et seq. 



VOL. VI] TRINITY TERM, XXXIV VICT. 373 

malicious, and without reasonable or probable cause, an action 1871 

could be maintained. At the time when this action was first JOHNSON- 

applied to cases of bankruptcy, the proceeding to make a man bank- 

rupt was ex parte. The petitioning creditor was said to strike the 

docket. But under the present law the petition is to be heard before 

a Court of Record. The debtor must be served with the petition, 

and has a right to appear before the Court, and contest the matter 

by attorney or counsel. The Court is required to hear evidence, 

and if satisfied with certain proofs to adjudge the debtor to be 

bankrupt ; and if not satisfied, may dismiss the petition with costs 

(s. 8). The act of adjudication is therefore a judicial act. 

As has been already said, it was incumbent upon the plaintiff to 
give evidence that the proceeding of the defendant was false and 
malicious. I think these words mean that the proceeding was not 
merely groundless and without foundation in law, but that it was 
so to the knowledge of the defendant, or, what is the same thing 
in matters of this kind, that a reasonable and sensible man, know- 
ing the facts and circumstances which the defendant did, would 
have formed the conclusion that the proceeding was groundless. 
They also mean that it was malicious. Malice in a legal sense 
means a wrongful act done intentionally without just cause or excuse : 
McPherson v. Daniell(l) ; and I quite agree that if an attorney, 
knowing a proceeding in bankruptcy to be groundless, presented a 
petition, either from the motive of gain to himself, or in obedience 
to the instructions of an oppressive and vindictive client, it would 
be in law a malicious act. And if the present case depended upon 
whether there was evidence to go to the jury that the acts of the 
defendants were malicious, I think there Mas. There was the act 
of inserting the provision as to the seven days in the order of the 
12th of April, although I myself believe this was an innocent act ; 
there was the objecting to Mr. Hand as a surety, and apparently 
stating untruly that the registrar objected to him ; this I also 
believe to be an innocent act ; indeed the effect produced on my 
mind by the letter was that it was a friendly one. ]>ut there was 
the act of procuring the appointment of receiver, and there is the 
alleged motive that the proceeding in bankruptcy was not for the 
real and bonti fide object of carrying out a bankruptcy, but in 
(1) 10 B. & C. at p. 212. 



374 COUKT OF EXCHEQUER. [L. E. 

1871 order to obtain the admission of a debt. The question here is not 
JOHNSON what conclusion I myself would draw from the facts, but whether 
EMERSON * ne 7 were evidence to go to the jury of malice, and I think they 
were. 

But I think there was no evidence that the defendant knew, or 
that a reasonable and sensible man possessing the same knowledge 
he did would have known, that the proceeding in bankruptcy was 
groundless and without foundation. On the contrary, I think the 
evidence shews that he believed the proceeding was Avell founded. 
The judge of the county court and the Chief Judge in Bankruptcy, 
Avith the same knowledge that the defendant had, were of the 
same opinion. To have legally made the plaintiff bankrupt, three 
facts must have existed: First, that he was a trader, which [it is 
admitted he was. Secondly, that there was a good petitioning 
creditor's debt ; this there was beyond all cavil or doubt ; it was 
decided to be so by the judge of the county court ; it does not 
appear to have been disputed before the Chief Judge in Bankruptcy ; 
and it has been the subject of an action in this court, and has 
been judicially before it, and we were all of opinion that it was a 
good debt, and that the supposed defence to it was groundless, in 
my opinion, frivolous. Thirdly, I think there was an act of bank- 
ruptcy ; there had been served upon the plaintiff a debtor's sum- 
mons requiring him to pay the debt, and he had for seven days 
neglected to pay it, or secure, or compound for it. This is an act 
of bankruptcy (s. 6, subs. 6), and such was the opinion of the Chief 
Judge in Bankruptcy. (1) 

That which caused the petition and adjudication to be set aside 
had nothing to do with the real merits, it was that in the order of 
the 12th of April there was a stay of proceedings, and should 
there be a new trial this may be a not unimportant circumstance : 
see Wilkinson v. Howel. (2) 

In my opinion there is not only no evidence that the defendant 
knew or believed that there was a stay, but there is strong evidence 
to the contrary. The plaintiff and his legal advisers knew the 
contents of the order, and in the proceedings before the county 
court judge and the Chief Judge in Bankruptcy, it never occurred to 
them that the petition and adjudication were wrong or irregular, 
(1) See ante, p. 330, n. (2) M. & M. 495. 



VOL. VI.] TE1NITY TEEM, XXXIV VICT. [} 

nor did it occur to these learned judges themselves, both of whom 1871 
had the order before them. What reason is there, then, for assuni- JOHNSON 
ing that the defendant knew it ? I think his conduct shewed the 
contrary, and that there is, therefore, no evidence that his conduct 
was false or malicious within the meaning of these words in the 
declaration. 

But I further think that he had reasonable and probable cause, 
or rather that there was no want of reasonable and probable cause. 
The order is, as I have said, a valid order until it be set aside : it was 
made under the last paragraph of the 7th section, which enacts that 
the Court may require a security to be given for the debt, and that 
upon such security l)eing given, the Court may stay proceedings 
upon the debtor summons. Now this order was, that the security 
should be given within seven days, and I think the defendant may 
not unreasonably have supposed and believed that, the security 
not having been given within seven days, the stay of proceedings 
was gone, and that he might lawfully proceed with the petition. 
I, therefore, further think that there was no evidence of want of 
reasonable and probable cause, which is an essential ingredient in 
this action. This is a question of law : Panton v. Williams. (1) 
The plaintiff's case rests upon the order of the 12th of April ; it 
was before two learned judges, sitting in and forming, as to one of 
them, one of the highest courts of justice in the kingdom ; it is not 
imputed that the defendant concealed or kept back it or anything 
else from them ; and it would be extraordinary when those two 
judges adjudged that there was lawful cause for the petition and 
adjudication, that we, upon the construction of the same order, 
should adjudge that the attorney had not reasonable and probable 
cause for thinking so. It seems to me that to do so would be in- 
consistent and repugnant. I am, therefore, of opinion that there 
was no evidence to go to the jury, and that the Lord Chief Baron 
should have so held at the trial. 

But I am also of opinion that there was misdirection as to the 
first question that was left to the jury. I am not aware what the 
evidence was as to the acts of the defendant of his own accord and 
apart from the instructions of Sir R. Harvey. It is difficult to 
collect from the reading of a long note all the evidence in a cause, 

(1) 2 Q. R 1G9. 



376 COUET OF EXCHEQUER [L. E. 

1871 and there may have been evidence upon this point, although I did 
JOHNSON n t apprehend it ; the Lord Chief Baron will no doubt refer to it 

EMERSON. in his Judgment. 

As to the second question, I think there was misdirection. The 
debt due by the plaintiff to the bank is assumed to be a doubtful 
debt. There is no ground for supposing it to have been of this 
character, or in the least doubtful. It was as undoubted a debt as 
ever existed, and the supposed defence to it, in my opinion, 
frivolous. I cannot myself imagine how any man could have sup- 
posed that a dishonoured bill paid into a bank operated as payment 
of an advance in cash made by the bank to the customer. I think 
the jury ought to have been told this, and that it is material in 
such a case as this that they should have been tol(| that there was 
no doubt as to the evidence of the debt. 

As to the third question, as I have already stated, I think there 
was no evidence to go to the jury that the defendant knew or 
believed when he filed the petition that the proceeding was stayed. 
I think the evidence is to the contrary, and that until the hearing 
of the appeal before Lord Justice James, no one knew or believed 
that there was any stay at all. 

This is an unfortunate case. The first blame, in my opinion, 
rests upon the plaintiff. I think a customer of a bank who insisted 
that his balance was paid by dishonoured bills would irritate any 
banker, much more so such a man as Sir K. Harvey is said to have 
been ; and it is clear that he suspected the bills to be forgeries ; 
but, as I have already said, I think the proceeding in bankruptcy, 
although lawful, was harsh and oppressive. I also think the 
requiring a receiver to be appointed was, under the circumstances, 
a very harsh and oppressive act. I do not myself believe there 
was any intention by the defendant to coerce the plaintiff into an 
admission of the debt ; it seems to me that Mr. Emerson's account 
of the letter and transaction of the 30th of May is true, and that 
he was sincerely desirous to calm down and propitiate Sir K. 
Harvey, and relieve the plaintiff from the bankruptcy. It was most 
unfortunate that the proceeds of the sale of the plaintiff's property 
should have been paid into the Crown Bank. But there was no 
bank in the kingdom in higher credit than it up to the time of 
Sir E. Harvey's death, and it is a matter of satisfaction that the 



VOL. VI.] TRINITY TERM, XXXIV VICT. 377 

plaintiff has to a very considerable extent been relieved from this 1871 
step by a recent judgment of this Court. (1 ) JOHNSON 

I cannot conclude this judgment without adding that I enter- 
tain great doubt whether the action be maintainable at all. The 
liability of the defendant depends upon the answer of the jury to 
the third question ; had it been in the negative there would have 
been no cause of action, and the Chief Baron would have directed 
a verdict for the defendant. I have said I am of opinion there 
was no evidence to go to the jury upon it ; but assuming that 
there was, and the finding of the jury to be right, the case against 
the defendant, stripped of matter irrelevant and of mere prejudice, 
is this : A creditor, having a debt due to him to an amount suffi- 
cient to support a petition in bankruptcy, employs an attorney to 
take proceedings in bankruptcy against the debtor. This he may 
lawfully do. The attorney proceeds by debtor summons under 
the 7th section. The debtor applies to the Court to dismiss the 
summons under the same section. The Court, being a court of 
record, and having jurisdiction in the matter, hears both parties 
and their legal advisers. The attorney acting for the petitioning 
creditor, and the debtor, having, by the 70th section, the right to 
be heard by counsel or advocate, the Court adjudicates upon it, 
and makes the order of the 12th of April. Now assume that this 
order was a stay of proceedings, and that the attorney knew it. A 
copy of it is served upon the debtor, and he and his legal adviser 
know its contents as well as the attorney for the petitioning cre- 
ditor, but the latter, notwithstanding his knowledge of the stay, 
presents a petition in bankruptcy under the 8th section. I think 
the mere presenting the petition would be no cause of action, it 
would be analogous to the issuing a writ of summons for an alleged 
cause of action, which was known to be groundless and without 
foundation, which affords no cause of action. It possibly might be 
the ground of an application to the Court against the attorney for 
contempt, but nothing more. But, again, the petition is the subject 
of judicial inquiry and judgment by the Court. There is a hearing ; 
the attorney appears on behalf of the petitioning creditor, and ad- 
vocates his case ; the defendant appears with his legal adviser who 
advocates his case ; evidence is given and heard, and the order of 

(1) Lailcy v. Jolinson, ante, p. 279. 
VOL. VI. 2 K 3 



378 COUKT OF EXCHEQUEE. [L. K. 

1871 the 12th of April, containing the stay of proceedings, is laid before 
JOHNSON the Court, and the legal adviser and advocate of the debtor is in 

, v - possession of a copy of it. The case on both sides is closed, and 
EMEESON. r r^ 

the Court delivers judgment, and adjudges that the debtor is 
bankrupt. This adjudication is afterwards annulled by a Court 
of appeal, upon the ground that there was a stay of proceedings 
at the time it was made. The question is, whether an action 
lies against the attorney for falsely, fraudulently, and without 
reasonable and probable cause, procuring the adjudication. One of 
two states of things may have happened before the Court; the 
legal adviser and advocate for the debtor may have objected that 
the order was a stay, and the attorney or advocate for the petition- 
ing creditor may have said the contrary, and argued that it was not, 
notwithstanding that he knew better (a thing not very uncommon 
in advocacy), and the Court may have thought the argument 
of the attorney for the petitioning creditor the more convincing, 
and decided erroneously that there was not a stay, and proceeded 
to adjudicate. Under such circumstances I cannot think an action 
could be maintained against the attorney. Courts (the very 
highest) have many times given wrong judgments, and advocates 
have many times argued before Courts to induce and persuade 
them to give judgments, which they well know would be wrong if 
given, and occasionally have succeeded ; but no one ever heard of 
an action against the advocate for falsely and maliciously and 
without reasonable and proper cause procuring the Court to give a 
wrong judgment. The other state of things may have been, that 
although the order creating the stay was before the Court and a 
copy of it in the possession of the plaintiff and his advocate, that 
neither of them noticed or apprehended that it was a stay, and no 
objection was raised to the adjudication upon this ground. All 
that can be imputed to the attorney for the petitioning creditor is, 
the not having called the attention of the Court to the order, and 
saying that in his opinion there was a stay of proceedings. His 
state of mind is assumed to be knowledge, but it cannot be more 
than strong conviction and opinion. Under such circumstances 
(which as regards the Court and the plaintiff and his legal adviser 
were, I believe, the true circumstances), is the attorney subject to 
a legal obligation or duty towards the debtor to call the attention 



YOL. VI.] TRINITY TEEM, XXXTV VICT. 379 

of the Court to the order, and state his opinion upon it ? He did 1871 
not tell what he knew, or rather, what he thought and believed, but J O H\-SOX~ 
he concealed and kept back nothing " unum est tacere aliud celare." 
The case of Farley v. DanJcs (1) was referred to in the argument. 
Lord Campbell there states that, " if a person truly states certain 
facts to a judge, who thereupon does an act which the law will not 
justify, the party is not liable, because in that case the grievance 
complained of arises not from the false statements of the party but 
from the mistake of the judge." In the present case the defendant 
seems to have stated every fact he knew to the learned judge of 
the county court. It is not imputed to him that he kept back 
any fact whatever. It is assumed against him (I think without 
evidence) that he knew the order of the 12th of April was a stay ; 
but he laid it before the learned judge, and all that can be charged 
against him is, that he knowing (which must here mean being of 
opinion or believing) that the order operated as a stay, did not 
state his opinion or belief to the judge. 

In my opinion, therefore, the legal obligation upon which the 
action depended is, to say the least, doubtful, and this question 
has never been raised or argued at all. When actions of this 
nature were first applied to cases of bankruptcy, the initiatory step 
was striking a docket and issuing a commission ; this was ex parte, 
and the petitioning creditor and his attorney may truly, and in 
the ordinary language of mankind, be said to have caused the 
debtor to be made bankrupt. But the existing state of things is 
quite different. By the 8th and 9th sections a proceeding to 
make a man bankrupt is a judicial proceeding ; there is to be a 
hearing before a court, and evidence and proof given, and the 
court, if satisfied with the proof, is to adjudge the debtor to be a 
bankrupt, otherwise to dismiss the petition, with or without costs 
as it may think just. The Court is constituted by the 59th and 
following sections, and the scope of them is that the kingdom is 
divided into districts, one called the London Bankrupt District, 
and the others the local districts ; the coiyt of the London district 
is to consist of a judge to be called the Chief Judge in Bankruptcy, 
who is to be one of the judges of the superior courts of common 
law or equity, and is to be a principal court of record ; and the 
(1) 4 E & B. 493; 24 L. J. (Q.D.) 241. 

2 K 2 3 



380 COUKT OF EXCHEQUER. [L. R. 

1871 orders of such judge are to be of the same force as if they wer& 
JOHNSON judgments of the superior Courts of common law or decrees in 
EMERSON *k e High Court of Chancery. The local courts consist of a county 
court judge, who, in addition to his ordinary power as such, has all 
the power and jurisdiction of a judge of the Court of Chancery ; 
and by express provision (s. 71), every Court having jurisdiction 
in bankruptcy may review, rescind, or vary its own orders, so that 
the county court judge of Norfolk, who had made the order of 
the 12th of April, had power to rescind or vary it. But, as I have 
said, it seems to me that no other Court, except itself, or a Court of 
appeal from it, had any jurisdiction over it, but is bound to accept 
it as valid. So also, as regards the petition and adjudication, th& 
local Court has the same jurisdiction as the London Court. The 
jurisdiction to both is given by the same section in the same words,, 
and if this action be maintainable it would be so if the matter had 
occurred in the London court. The adjudging a debtor to be 
bankrupt is called an order (s. 10) ; and by s. 65, if made by the 
London Court, is to be of the same force as a judgment of a 
superior Court of common law. I believe no one ever thought that 
an action could be maintained for falsely, maliciously, and without 
reasonable and probable cause, procuring a judgment of one of the 
superior Courts at Westminster ; and upon consideration it may be 
found that no such action will lie in respect of a judgment or 
order of a Court of bankruptcy having jurisdiction to hear and 
adjudicate upon the matter. The reason may be that the judg- 
ment of a Court is not caused or procured by anyone. It is the 
independent exercise of the mind of the Court upon the facts 
before it, and cannot be said to be caused or procured in the sense 
in which these words are used in such actions as the present. I 
do not think it right to pursue the subject further, but I would 
refer to the principles laid down in the cases, Cooper v. Harding (l) r 
Williams v. Smith (2), and especially in Daniels v. Fielding (3) as 
affording the true guide. I think the rule ought to be absolute to 
enter a verdict for the defendant. 

KELLY, C.B. This is a case of great complexity, and of very 
considerable difficulty ; a case in which it is necessary to consider 

(1) 7 Q. B. 928. (2) 14 C. B. (N.S.) 596. (3) 16 M. & W. 200. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 381 

with attention the state of the proceedings, and the legal and actual 1871 
condition of the parties, at each successive stage and period of the JOHNSON 
transactions which are the subject of inquiry. EMEESON 

It may be convenient to consider, in the first place, the several 
questions of law which arise in this case, apart from the particular 
facts upon which it is sought to make the defendant liable to this 
action. And of these the first, which lies at the root of the entire 
case, is, whether any act of bankruptcy was ever committed by the 
plaintiff at all. And first, had he committed an act of bankruptcy 
on the expiration of the seven days from the service of the debtor's 
summons, that is to say, on the 5th of April ? Or, did the applica- 
tion upon the 2nd of April, before the expiration of the seven days, 
suspend the operation of the debtor's summons, and stay all pro- 
ceedings upon it from that day until that application should bo 
finally disposed of? 

The facts of the case upon which these questions arise are short 
and simple. Messrs. Harvey & Hudson, the petitioning creditors, 
of whom Sir K. Harvey was the principal acting partner, claimed a 
debt of 453 against the plaintiff. The plaintiff denied that be 
owed the debt, and refused to pay it. The bankers thereupon, by 
the defendant Sparrow as their solicitor, obtained a debtor's sum- 
mons against the plaintiff, which they served upon him on the 
28th of March, 1870. The seven days, therefore, expired on the 
4th of April. An application to dismiss the debtor's summons, 
founded upon an affidavit that the debt was not due, was made and 
served on the 2nd of April, and an appointment was made for the 
hearing of the application on the 12th of April. On the same 
12th of April an order was made that a bond, with sureties, be 
executed within seven days of the service thereof, and that an 
action should be tried to determine whether the debt was due. 
There was also a clause staying all proceedings till after the trial of 
the action. This order was served on the 13th of April. The 
debtor gave notice of the sureties to the petitioning creditor and to 
the registrar by letters of the IGth of April, which were delivered 
and received on the 18th. The registrar, having then two days and 
no more within the seven to appoint a time and place for the exe- 
cution of the bond, made no appointment, and the seven days 
expired on the 20th. On the 21st the petition was filed, upon an 



382 COUET OF EXCHEQUEK. [L. K. 

1871 affidavit that an act of bankruptcy had been committed by the- 

JOHNSON non-payment of the debt within seven days of the service of the 

E * debtor's summons. On the same 21st of April the appointment of 

a receiver was obtained ex parte, and the property of the debtor 

seized. The petition came on for hearing upon the 7th of May, 

when the plaintiff was adjudicated a bankrupt. 

If, upon the construction of the statute, a complete and perfect 
act of bankruptcy was committed on the 21st of April, upon which 
a petition might lawfully be filed, and an adjudication in bank- 
ruptcy afterwards pronounced, it at once puts an end to the case, 
and the rule should be made absolute to enter the verdict for the 
defendant. But I am of opinion that the application of the 2nd of 
April to dismiss the debtor's summons, founded upon an affidavit 
that the debt was not due, at once and of necessity stayed all pro- 
ceedings in bankruptcy, and suspended the operation of the debtor's 
summons itself until that application should be finally disposed of 
according to law, either by the dismissal of the debtor's summons, 
or of the application, or by an order to stay proceedings until after 
the trial of an action. 

It is obvious that, if the effect of the application to dismiss the 
debtor's summons was not to stay all proceedings in bankruptcy until 
it should be disposed of, the several provisions in the Act of Parlia- 
ment, and the rules for proceeding upon a disputed debt, are 
wholly nugatory and inoperative. And if such be the case, the 
strange result might follow that the proceedings to an adjudication 
might have been carried on pari passu with the application to dis- 
miss the debtor's summons, and the judge might pronounce for 
an adjudication, and the registrar order a stay of proceedings till 
after the trial of an action, or even dismiss the debtor's summons on 
the same day. It may be said that this could not happen, inasmuch 
as the whole of the proceedings are in the same court, and are in 
contemplation of law, and might be in fact, before the judge. But 
this only shews that the Court, or two different officers of the 
Court, the judge and the registrar, might be called upon to make 
two orders inconsistent with each other at the same time ; the one, 
that a petition upon an affidavit that an act of bankruptcy had 
been committed by non-payment of a debt within seven days of 
the service of the debtor's summons, may be received, and sealed, 



VOL. VI.] TKINITY TEEM, XXXIV VICT. 383 

and served with a view to an adjudication ; the other, that the 1871 
debtor's summons be dismissed with costs, on the ground that no JOHNSON 
debt is due. 

But if the application founded upon the affidavit operated of 
itself as a stay of proceedings, and no act of bankruptcy had been 
committed on the 5th, the question arises, whether an act of bank- 
ruptcy had been committed by the plaintiff on the 21st of April, 
by reason of the lapse of seven days from the service of the order 
of the 12th, no bond with sureties having been within that time 
executed. 

Now it appears to me that we have only to look to the plain and 
express terms of the Act of Parliament, and the forms and the 
rules bearing upon this question, to be satisfied that no act of 
bankruptcy whatever had been committed by the plaintiff; that 
he had, from the 2nd of April until the 21st, strictly conformed in 
all things to their provisions, and that upon justifying his sureties 
and executing the bond, if a time and place had been appointed, 
he would have clearly entitled himself to a stay of all proceedings 
whatever against him until an action upon the debt should have 
been tried. The 7th section of the Act, the form of the debtor's 
summons, and the endorsement upon it, the rules pointing out the 
mode of proceeding upon an application to dismiss the debtor's 
summons, and especially rule 162, appear to me clear and decisive 
upon this question. It is s. 7 of the Act which enables a creditor 
to obtain a debtor's summons, and to petition for an adjudication 
in case of non-payment of the debt, or non-compounding for it 
within the time specified in the summons. Then the 2nd branch 
of the 7th section enables the debtor, on making oath that the debt 
is not due, to apply to the Court to dismiss the summons ; and, by 
the express terms of the Act, the application is to dismiss the sum- 
mons, not merely if the debt is not due at all, but if " he is not 
indebted to such an amount as will justify the said creditor in 
presenting a bankruptcy petition against him." 80 that " the 
presenting a petition" is unjustified and unlawful, if no debt, or 
no debt to a sufficient amount, be due. And as no petition can 
be presented without an affidavit founded on the summons, that 
the debt is due and that it has not been paid within the 
seven days, how can a petition be lawful while the application 



384 COUKT OF EXCHEQUEK. [L. E. 

1871 upon that summons is pending to determine whether it is due or 
not? 



JOHNSON 

v. But the latter part of the 1st branch of the 7th section, and the 

EMEESON. 

form (No. 4) of the debtor's summons, and of the indorsement upon 

it, are conclusive upon this point. The 7th section says that the 
summons shall have such an indorsement upon it " as may be best 
calculated to indicate to the debtor the nature of the document 
served upon him, and the consequences of inattention to its re- 
quisitions." Then the form (No. 4) is, " we warn you that unless 
you pay, &c., or compound, &c., you will have committed an act of 
bankruptcy, in respect of which you may be adjudged a bankrupt 
on a bankrupt petition being presented, unless you shall have within 
the time aforesaid applied to the Court to dismiss this summons, on 
the ground that you are not indebted to him in the sum claimed" 
And the indorsement upon the debtor's summons farther states : 
" If, however, you are not indebted, you must make application to 
dismiss this summons by filing an affidavit that you are not so 
indebted with the registrar, who will thereupon fix a day for the 
hearing of your application." The having committed an act of 
bankruptcy, therefore, and the liability to a petition is only to be, 
" unless he should have applied within the time, to dismiss the sum- 
mons" An indorsement in the very terms before mentioned is 
upon the summons served upon the plaintiff, and the plaintiff did, 
accordingly, within the seven days, make and serve the application 
upon the registrar to dismiss the summons. So that, upon the con- 
struction contended for, the debtor is in this position : The Court 
says to him, "If you don't pay or compound for this debt, or 
unless you apply to dismiss this summons, you will have committed 
an act of bankruptcy, and are liable to a petition and to be ad- 
judged a bankrupt; but although you do apply to dismiss the 
summons, and within due time, and are prepared to support your 
application, you will nevertheless have committed an act of bank- 
ruptcy, unless you pay or compound for the debt, and a petition 
may be presented against you." This cannot be; and, indeed, 
neither Sir E. Harvey nor Mr. Sparrow seems to have thought of 
making the plaintiff a bankrupt, and presenting a petition on the 
5th of April. 

We have therefore next to consider whether he had committed 



VOL. VI.] TEINITY TERM, XXXIV VICT. 385 

an act of bankruptcy which authorized the petition and the other 1871 
proceedings on the 21st of April. The plaintiff having, as observed, JOHNSON 
made this affidavit and application, the registrar appoints the 12th 
of April for the hearing. On this day the parties met before the 
registrar, who considered it a case in which, the debt being doubt- 
ful, he ought to call upon the debtor to give a bond with sureties 
to pay the debt, if it should be established in an action to be 
brought, together with the costs, and with a stay of proceedings 
until the action should be determined. And here commenced a 
series of errors and blunders, hereafter to be more particularly 
considered, and which would seem to be incredible but that they 
actually occurred. The 7th section so often referred to, the form 
of the debtor's summons, and the indorsement upon it (No. 4) the 
rules 22, 23, 24, 25, 41, 43, 44, 158, 159, 160, 162, 163, but 
especially rule 162, and the form No. 9, point out and determine 
what is to be done, from the time when the application is made 
until it is finally disposed of, either by the dismissal of the debtor's 
summons, or the dismissal of the application itself, or by an order 
providing for the giving of a bond with sureties and the trial of an 
action to establish the debt. And the provisions touching these 
proceedings are clear and simple in the extreme, save that the 
form No. 9 is so inaccurately framed as to create an apparent 
difficulty, but which, with a little consideration, may be easily 
overcome. The course pointed out, and that ought to have been 
pursued, is plain and clear. ' The 162nd rule admits of no possible 
misconstruction. It is in these words_: " In all cases where a per- 
son proposes to give a bond by way of security, he shall serve by 
post or otherwise on the opposite party, and on the registrar at his 
office, notice of the proposed sureties according to the form set 
forth in the schedule, and the registrar shall forthwith give notice 
to both parties of the time and place at which he proposes that the 
bond shall be executed, and shall state in the notice that should 
the proposed obligee have any valid objection to make to the 
sureties or cither of them, it must then be made." When the 
registrar, therefore, had decided upon the security and the trial of 
an action, and supposing he had authority, as I think he had, to 
prescribe a time for the giving notice of the sureties, the order 
should have been that upon the execution of a bond \\it\i two 



386 COUKT OF EXCHEQUEE. [L. K. 

1871 sureties to be approved by himself at a time "and place to be by 
JOHNS ~ him appointed, proceedings should be stayed till after the trial of 
an action upon the debt ; and that unless the debtor should give 

* 

notice within so many days, or in case he should fail to execute 
the bond with sureties to be approved by him at the time and 
place appointed, the application to dismiss the debtor's summons- 
do stand dismissed. 

But instead of this the order was made according to the form 
No. 9, with the addition of the seven days' clause, which in its 
terms was totally unauthorized. If it had been as prescribed by 
the form No. 9 without the seven days' clause, its effect would 
have been consistent with the Act and the rules, though it would 
have been inaccurately expressed ; for looking to the form No. 9, 
we certainly find that the order is absolute in its terms, that the 
said debtor enter into a bond with such two sufficient sureties as 
the Court shall approve of, to pay such sum or sums as shall be 
recovered in the action. This no doubt is incorrect and calculated 
to mislead, for the registrar has no power to order a bond to be 
executed, but may only direct that on a bond being executed 
according to the statute and the rules, the proceedings shall be 
stayed, or that otherwise the summons shall be dismissed. Still if 
this order had been strictly according to form No. 9, it might have 
been well and easily obeyed. For the parties who had to act upon 
it must have looked to rule 162 to see how the bond was to be 
executed, and would there have found the whole proceeding by all 
the parties distinctly pointed out. The notices of the sureties 
could then have been given, the appointment for the execution of 
the bond made, and at the meeting so appointed, the bond would 
have been executed and the proceedings stayed, or the application- 
would have been dismissed. And such would have been a reason- 
able and by no means a forced construction of such an order. But 
unfortunately when the order was about to be drawn up, although 
it was the first occasion upon which such an order was to be made 
under the new Bankruptcy Act, and it therefore required the 
utmost care and attention, the registrar committed the preparation 
of it to the defendant, the solicitor to one of the parties; and 
between them, and it is said upon the suggestion of the registrar 
himself, who, if it be so, must have been guilty of the most uu- 



YOL. VI.] TRINITY TERM, XXXIV VICT. 387 

pardonable inattention to the duty which he was performing, this 1S71 
limitation of seven days was introduced into the order as the time, J O U>-.SUN 
not within which notice of tho sureties was to be given, but within 
which the debtor was ordered to execute the bond. From thus 
adopting the form 9, which in itself would have been harmless, 
but with the addition of the seven days' clause, the order before us 
was made. But being so made, I think it was the duty of all 
parties, but more especially of the defendant, who had himself 
prepared the order, so to construe and act upon it as to conform iu 
all things to the statute and the rules. And this he might well 
have done, though construing it in the strictest and severest sense 
against the plaintiff, by treating it as an order that the plaintiff 
should give notice of his sureties in sufficient time to enable the 
registrar, upon receipt of such notice, to appoint a time and place 
for the execution of the bond within the seven days, and that then 
and there, if the sureties should prove sufficient, the bond should 
be executed and the proceedings stayed ; or, if such notice should 
not be given, or the sureties should be insufficient, that then the 
application should be dismissed. And had this plain and reason- 
able construction been adopted, when the plaintiff had given tho 
notices in due time, both he and the defendant might reasonably 
have expected that the registrar would enlarge the time, or make 
the appointment for the last of the seven days; and if he had 
failed to do the one or the other, it was then for him to take such 
steps as he might think necessary to repair the omission, or for 
either party who desired to expedite the proceedings to apply to 
him to do so. This was, I think, the only reasonable and just 
construction of the order. But the construction for which the 
defendant must contend, and upon which alone ho can justify his 
acts, is to treat it as an order to this effect : " Ordered, that pur- 
suant to the statute s. 7, and rule 162, the debtor do within seven 
days execute a bond with sureties approved by the registrar, that 
is to say, that the debtor do, within a reasonable portion of the 
seven days, give notice of his sureties, and that the registrar do 
thereupon appoint a time within the seven days for the execution 
of the bond, and that if the debtor shall within such reasonable 
portion of the seven days give due notice of the sureties, but the 
registrar shall fail thereupon to appoint a time for the execution 



388 COUET OF EXCHEQUEK. [L. R 

1871 of the bond within the seven days, and therein shall make default, 
JOHNSON * ne debtor shall be deemed to have committed an act of bank- 
E v - ruptcy, and thereupon the creditor may petition against him and 
cause him to be adjudicated a bankrupt." It is surely impossible 
to argue that such can be the construction of this order, which 
implies that a superior Court of justice has made an order au- 
thorizing one man to violate the law or compelling another to 
perform an impossibility. 

But here a most extraordinary argument has been urged at the 
bar, which I should have thought it unnecessary to notice but that 
it is said upon the authority of a shorthand note to have been some- 
what countenanced by the learned and eminent Chief Judge in 
Bankruptcy. (1) I think the note must be incorrect, or that the re- 
mark must have been made before the rule 162 had been brought 
before him. The argument is, that when the plaintiff found the 
bond could not be executed within the seven days he should have 
applied to the registrar for further time. But in the first place, 
when did he find this ? He had on the 16th sent the notices of his 
sureties to the creditor and to the registrar. He knew (Easter 
Sunday intervening) that they would be received on the 18th and 
that the registrar might have appointed the 20th for the execution 
of the bond. What right or reason had he to expect that as this 
was the last day, if it was necessary that the bond should be exe- 
cuted on that day, that the registrar would not appoint it ? 
Suppose he had appointed it? The plaintiff was ready and 
would have attended, and the bond would have been executed. 
But he received no appointment ; and what was he to do ? He 
could not know until the 19th or the 20th whether that day would 
be appointed or not. But he was to apply for time. When ? He 
could not until he had given notice of his sureties, and it had 
been received, that is, on the 18th, and ought he to have applied 
then ? would his application have been right and proper ? would 
it not have been in effect this ? " Sir, I have given you notice 
of my sureties, and it is now your duty to appoint a time and 
place for us all to attend. The words of the rule are, 'The 
registrar shall thereupon forthwith appoint,' and so be pleased to 
appoint accordingly, and inasmuch as you have made this order 
(1) See ante, p. 330, n. 



VOL. VI.] TRINITY TEEM, XXXIV VICT. 389 

that all tliis is to be done within seven days, I would suggest to ISTI 
you to enlarge the time or you may disobey your own order." J OHSSOX 
When this, the real state of things, is calmly considered, the dis- v \ 

J'^ Ml. II SOX . 

cussion really becomes ludicrous. The plaintiff is to ask for time. 
Why, and for what purpose ? That the registrar may do his duty. 
But again, why should the plaintiff ask for time ? He wanted 
none. He had done his duty and was content to wait till the 
registrar had done his. If the petitioning creditor wished to ex- 
pedite the proceedings, he might have applied to the registrar to 
make the appointment, but nothing more than the services of the 
notices having been done, and as the next step by which alone it 
was possible that the order should be obeyed must have been taken 
by the registrar, it was his default and not that of the plaintiff which 
prevented the order from being obeyed; and I feel bound to 
declare my conviction, that not only no judge and no lawyer, 
but no man of ordinary intelligence, with this 162nd rule before 
his eyes, could believe for one moment that this man could be 
made a bankrupt because the registrar had been guilty of this 
default. I ought perhaps in justice to the registrar to correct this 
expression, because I am far from saying that he made any default 
at all. He received the notices on Easter Monday, and the seven 
days expired on the Wednesday ; and although it would have been 
better, looking to the strange and unauthorized language of the 
order, that he should have notified to the parties that some delay 
must take place, he might well have disregarded or corrected 
the terms of his own order, and appointed some four or five days 
later, when the bond might have been executed and the whole 
business satisfactorily concluded. 

Upon the grounds, therefore, before pointed out, I am of opinion 
that upon the true construction of the statute and the rules, 
together with the orders which have been made, the application to 
dismiss the debtor summons on the 2nd of April suspended its 
operation and stayed the proceedings, until that application should 
be followed by a final order, or should be dismissed ; that the plain- 
tiff having done all that was incumbent upon him, or that it was 
possible for him to do in obedience to the order of the 12th of 
April, the delay or default of the registrar in appointing no time 
and place thereupon for the execution of the bond cannot be held 



390 COURT OF EXCHEQUER. [L.R. 

1871 to result in an act of bankruptcy on the part of the plaintiff; that 

JOHNSON the application was still pending and undisposed of on the 21st of 

EMERSON April, and that the affidavit of an act of bankruptcy, the petition 

and the other acts done, or procured to be done by the defendant 

on that day, were unlawful and void. 

I cannot conclude this part of the case without observing that 
it seems to me impossible to review these proceedings, and consi- 
der them alone as they affect the plaintiff, without wondering 
that it can be seriously contended that they can be authorized by 
the law of this country. If it be the law that the application to 
dismiss the debtor's summons on the 2nd of April did not stop the 
operation of the summons, and prevent the committing of an act of 
bankruptcy on the 5th, or on the 21st, it may well be said that the 
provisions of the 7th section, and the rules for carrying them into 
effect are, in the well-known words of a noble and learned judge, 
" a mockery, a delusion, and a snare." 

Let us consider the condition of the debtor under the circum- 
stances of this case, as they actually occurred. He is threatened 
with bankruptcy, and served with a debtor's summons in respect of 
a, debt which he believes that he does not owe. He is told, and 
truly, that, by the Act of Parliament and the rules, if he denies 
the debt upon oath, and gives a bond with two sureties to pay the 
debt, if upon the trial of an action it is proved to be due, he may 
prevent or put an end to the proceedings in bankruptcy. He 
accordingly makes the affidavit, and applies to the Court for relief, 
and is told that he must give security for the debt, in case it 
should turn out to be due. He answers : " I'm ready to do so. I 
offer you security upon property of mine, in your own hands, worth 
three times the amount of the debt you claim." The reply is: 
" No. I'll not accept it unless you acknowledge the debt." He 
says : " I will not acknowledge the debt. What other security does 
the law require ?" He is told, " A bond with two sureties." He 
says : " Be it so. When, and how, and where are I and my sureties 
to give this bond ?" The law answers, "Look to the 162nd rule." 
What says that? "You must give notice to Mr. Sparrow, the 
solicitor of the petitioning creditor, and to the registrar of the 
names and places of abode of your sureties, and the registrar will 
appoint a time and place where you and your sureties are to appear 






VOL. VI.] TRINITY TERM, XXXIV VICT. 391 

and execute the bond." Ho does so. He gives the notices, and 1871 

in- due time ; and he awaits the appointment to execute the JOHN-SON 

bond; and, while thus awaiting it, he is made a bankrupt, his 

property is seized, his shop shut up, and his credit destroyed in 

a single day. He wakes in the morning of the 21st of April, 

and believes himself to be, and he is, a thriving and prosperous 

man, above the world to the extent of 5000?. He is guilty of 

no fraud, no misconduct, no default. He has done all that the 

law requires ; all that he could do, or that could be done accord- 

ing to law, and he finds, before the sun sets, he is made a bankrupt ; 

that all that he possesses in the world is seized by officers (mis- 

called, as he thinks, officers of justice) ; his dealings in the 

articles of his trade to which he looked for the means of daily 

subsistence stopped, and he returns to his bed to sleep if he can 

a ruined man. 

I thought at the trial, and I think now, that if the law of this 
country permits and justifies an act and a proceeding like this, it 
is impossible to suppose that the legislature would leave that law 
unrepealed for a single session of parliament. 

Then comes the remaining question : Had the defendant reason- 
able and probable cause, or did he not know or believe that he had 
no right or power by law, and no reasonable or probable cause to 
file an affidavit that an act of bankruptcy had been committed, and 
present a petition and procure, ex parte, the appointment of a 
receiver, and seize the property of the plaintiff on the 21st of 
April ? He swore at the trial that he had studied the Act, and 
made himself perfectly acquainted with the rules, and especially 
the lG2nd, to which his attention was called, in terms, by myself, 
and that this was true was proved by the readiness with which he 
took upon himself the preparation of the order of the 12th of 
April ; the rapidity with which he followed up one act and pro- 
ceeding with another ; the affidavit of an act of bankruptcy, the 
petition, the affidavit for a receiver, the appointment of a receiver, 
and the seizure of the plaintiff's property and effects, all on the 
21st of April, between twelve o'clock in the day and six o'clock in 
the afternoon. So also the promptitude with which, on the 7th of 
May, he brought forward a supposed report of a'case to justify the 
seven days' clause, and quoted the S2nd section as an answer to 



392 COUKT OF EXCHEQUER [L. E. 

1871 Mr. Cooke the moment that learned judge had decided that the 
JOHNSON objection made to the act of bankruptcy was fatal. 
EMERSON -^ ne ac * ^ bankruptcy which he swore to in support of the peti- 
tion on the 21st of April was, that the plaintiff had failed to pay 
or compound for the debt at the expiration of the seven days from 
the service of the debtor's summons. It is impossible to believe 
that if he had supposed that this was really an act of bankruptcy 
he would have been restrained by any spirit of forbearance or 
indulgence towards the plaintiff from presenting his petition on the 
5th of April, and proceeding as speedily as possible to an adjudica- 
tion. He must have known, therefore, when he petitioned on the 
21st of April, that no such act of bankruptcy had been committed, 
and that the application to dismiss the debtor's summons on the 
2nd of April had suspended its operation at least until it was 
heard and the order made on the 12th of April. Then, is it 
possible to suppose that he believed an act of bankruptcy to have 
been committed by the non-execution of the bond on the 20th ? 
I cannot bring myself to believe that any intelligent man, with 
the 162nd rule before him, could imagine that the debtor, having- 
given notice of his sureties within the time required, had committed 
an act of bankruptcy, because the registrar had not appointed a 
time and place for the execution of the bond, and so enabled him 
to justify his sureties and execute it. No such act of bankruptcy 
is among the six enumerated in s. 6, and it seems to me absurd to 
suppose that the petitioning creditors' solicitor and the registrar 
together could make it an act of bankruptcy by issuing an order 
which the registrar had no authority to make, and which called 
upon the debtor to perform an impossibility. If then he knew that 
the affidavit and petition were illegal, does it constitute reasonable 
and probable cause to him, and justify his acts that a fortnight 
afterwards one judge, and a month afterwards another the one 
upon different grounds from those upon which the defendant had 
pretended to act, and which he held to be insufficient, the other 
upon grounds which we are unable satisfactorily to ascertain 
pronounced or affirmed the adjudication. 

This raises the general question at once : Is the decision of a 
judge, or of a Court, or of both, that an indictment will lie, or that 
a man may be adjudicated a bankrupt, conclusive evidence that 



VOL. VI] TEINITY TERM, XXXIV VICT. 393 

one who had before preferred the indictment, or petitioned for the 1871 
adjudication, had reasonable and probable cause for the act that 
he did ? I maintain that it is not ; and that it is evidence at all 
only so far as it may tend to satisfy a jury that, what the judge and 
the Court held to be the law, the prosecutor or the petitioner bona 
fide believed to be the law ; and that the moment it is shewn, 
first, that it is not the law, and, next, that the prosecutor or peti- 
tioner knew or believed that it was not the law, there is no 
probable cause to him ; and, if malice be proved, he is liable to an 
action. It is essential to remember that what is probable cause to 
one man may not be probable cause to another ; and this, whether 
the question arises upon matters of law or matters of fact as consti- 
tuting the probable cause. What is probable cause is for the 
judge ; but the question whether the facts existed which constitute 
probable cause, and, in this case, whether the defendant kue\v or 
believed that the acts which he was about to do were lawful, is 
entirely for the jury. In a case like this, therefore, whatever may 
have been the decision of the judge, or of judges, afterwards, the 
question for a jury is whether the defendant bona fide believed 
the law to be such as authorized the act about to be done, or knew 
or believed the contrary. 

Suppose a solicitor had been present at a decision in the House 
of Lords that an assignment to a creditor in a particular form did 
not amount to an act of bankruptcy ; and a month afterwards, to 
gratify malice against a debtor, and thinking that he might impose 
upon a county court judge, he had filed a petition in bankruptcy 
in the county court upon an affidavit that his debtor had com- 
mitted an act of bankruptcy by making an assignment which he 
sets forth, and which is in the exact form before mentioned, and 
the county court judge had held erroneously that it amounted to 
an act of bankruptcy, and pronounced an adjudication accord- 
ingly ; would this decision, when afterwards reversed, be reason- 
able and probable cause to the solicitor for having presented the 
petition and procured the adjudication in bankruptcy ? 

Again, a father and son are living at home together, the father has 
lost his watch, and the butler informs the son that he has seen the 
watch hidden in the footman's box. This would seem to be ample 
probable cause. The son, in the absence of the father, prosecutes 

VOL. VI. 2 L 3 



394 COUET OF EXCHEQUEE. [L.R 

1871 the footman, and lie is convicted to the satisfaction of the judge 

JOHNSON and jury, but an acquittal is afterwards entered upon a technical 

EMERSON. P ^ reserved. It turns out, and is proved upon the trial of an 

action against the son, that he himself stole the watch and hid it 

in the footman's box. Was the conviction probable cause to him, 

or is he liable to the action ? 

So imagine this case. A gentleman, perhaps a barrister, knows 
that to steal a number of rabbits under certain circumstances is no- 
felony ; but wishing to get rid of a troublesome fellow in his 
neighbourhood, prosecutes him before magistrates, charging such 
a theft as a felony, and persuades them that it is felony, and they 
convict him. The conviction is quashed upon some informality, 
so as to remove the technical impediment to an action, and he 
sues the gentleman, who in the mean time has talked about the 
matter and admitted that he knew that the law was against him, 
and this is proved upon the trial. Had he probable cause, or is 
the action maintainable ? The cases of this description are various. 
The magistrates may have convicted upon one ground : the Court 
of appeal may have reversed upon another; but whatever the 
grounds of the different decisions, and however they may or may 
not amount to evidence more or less cogent, that another man, 
the defendant in an action, may well have believed that to be the 
law which a judge or a Court has held to be the law ; every such 
case must raise the question for the jury, Avhether the defendant in 
the action did or did not know or believe that the act about to be 
done was unlawful. If the jury are satisfied that he did, and the- 
act was unlawful, it is immaterial what number of decisions may 
have been pronounced to the contrary, as the jury will have found 
that they had no influence on his mind, and he has done that 
which he knew he had no lawful right to do. It may be said that 
it is difficult and sometimes impossible to prove this knowledge 
and belief in the mind of the defendant in an action ; but it i& 
enough to say that it may in some cases be conclusively and in- 
controvertibly proved by his own confession, and that though it 
be proved by other evidence, that merely varies the degree of 
proof upon which it is always for a jury to decide. 

Heslop v. Chapman (1), in the Exchequer Chamber, seems to 
(1) 23 L. J. (Q.B.) 49. 



VOL. VI.] TRINITY TEEM, XXXIV VICT. 395 

me to establish the proposition that, although the question of 1871 
reasonable and probable cause is for the judge, the reasonable and JOHNSON 
probable cause itself must depend upon the facts, and that the EMEBSOS 
judge cannot pronounce any opinion in point of law until the facts 
are ascertained. And it was decided in that case, that although the 
defendant in an action for a malicious prosecution for perjury had 
been told that what the plaintiff had sworn upon the trial of a 
cause was false, and that that information to the defendant, if true, 
or if he believed it to be true, would amount to reasonable and 
probable cause, yet that it was a question for the jury whether the 
defendant did believe it to be true ; and that if they were satisfied 
that he did not, there was no reasonable and probable cause to 
him, and the action against him was maintainable. 

I agree that in an action like this, where a Court or judge has 
held the wrongful act charged, or a similar act to be lawful, a ver- 
dict negativing probable cause ought not to be pronounced by a 
jury or accepted by a judge, or a Court of law, without great 
caution and much deliberation. And if I entertained any doubt 
that the defendant here knew that he was acting contrary to law, 
I should readily concur in granting a new trial. But I cannot 
bring myself to hold that if a man do an unlawful act to the 
grievous injury, or, as in this case, to the ruin of another, knowing 
that it is unlawful, he can justify or defend himself in an action 
against him for that cause, by shewing that a judge afterwards 
erroneously held the act to be lawful. 

It has been already observed, that if the adjudication was un- 
lawful and void, it is immaterial to consider on what grounds it 
was held to be valid, if the defendant knew or believed that 
he had no lawful right to institute or carry on the proceedings 
at all. But it may be as well to look to what the decisions 
were, by Mr. Cooke, and, as far as we can collect from the evi- 
dence, by Bacon, V.C. The act of bankruptcy set up by the 
defendant was the non-execution of the bond with sureties within 
seven days, which, as already more than once observed, was occa- 
sioned entirely by the default, if it were a default, not of the 
plaintiff, but of the registrar. And when the application to adju- 
dicate came before Mr. Cooke, he distinctly held at once that it 
was no act of bankruptcy, and that the petition could not be sup- 

2 L 2 3 



396 COURT OF EXCHEQUER. [L. B. 

1871 ported ; so that the decision of Mr. Cooke can afford no evidence 
JOHNSON f P r bable cause to the defendant as to the act of bankruptcy. 
E v ' y And all that Mr. Cooke did really hold, and upon which he pro- 
nounced the adjudication, was that upon the construction of the 
82nd section, which enacts : " that no proceeding in bankruptcy 
shall be invalidated by any formal defect or by any irregularity, 
unless the Court is of opinion that substantial injustice has been 
caused by such defect or irregularity, and that such injustice can- 
not be remedied by any order of the Court," an affidavit of an 
act of bankruptcy, and a petition in bankruptcy founded upon it, 
were not invalidated by reason of the fact that no act of bank- 
ruptcy at all had been committed ; and that the want of an act of 
bankruptcy was a formal defect or an irregularity which did not 
invalidate the petition ; and moreover, that the adjudicating a 
man bankrupt who had committed no act of bankruptcy, upon a 
petition, therefore, unsupported by any act of bankruptcy, had 
caused no substantial injustice to the man thus dealt with. I make 
no observation upon the decision, as I have failed to apprehend 
the process of reasoning upon which it was founded ; it is enough 
to say that it could not well be reasonable and probable cause for 
an act done a fortnight or more before the 82nd section was even 
referred to. 

We come next to the decision of Bacon, V.C. Of this we have 
no other account than what purports to be a shorthand note of the 
judgment (1), but which I cannot conceive to be a correct statement 
of what fell from that learned and eminent judge. It begins with a 
statement that an order had been made that the debtor's summons 
should be dismissed on the debtor's executing a bond with sureties 
within seven days. I need hardly observe that no such order was 
ever, in fact, made. It then proceeds to say that the debtor must- 
have known that he had seven days, and only seven days to do all 
that was required. That is quite true, but the learned judge 
cannot have been informed that he had done all that was required. 
The remaining observations of the learned judge, if the report be 
correct, which I cannot think that it is, clearly shew that neither 
the real facts nor the rule can have been brought under his atten- 
tion. It seems to me, therefore, impossible that any decision 

(1) Ante, p. 330, n. 



VOL. VL] TRINITY TERM, XXXIV VICT. 397 

really pronounced by either Mr. Cooke or Vice-Chancellor Bacon, 1871 
even if they had preceded the petition and the other proceedings JOHNSON 
by the defendant, and so had been known to him on the 21st of 
April, would have constituted any probable cause to him for such 
proceedings. 

As to the judgment of Lord Justice James, that learned judge 
seems to have determined that the adjudication should be annulled 
simply and merely upon the plain and obvious ground that all 
proceedings on the summons were expressly stayed until after the 
trial of the action ; and he probably gave little attention to the 
question whether the plaintiff had not done all that he was required 
to do under the order of the 12th of April, before the expiration of 
the seven days. (1) He certainly observes that this difficulty might 
perhaps have been got over, but not till after he had stated that 
there was great force in the argument that the debtor was not in 
default, because the registrar never fixed, as he ought to have done, 
a time and place for the execution of the bond. And he remarked, 
in conclusion, that it was unnecessary to decide that point. 

It has been contended that, supposing the petition and the pro- 
curing the appointment of a receiver to be unlawful, that is not so 
as to the obtaining the adjudication, and that the jury should have 
been directed to distinguish between the acts done on the 21st of 
April, and the obtaining the adjudication on the 7th of May ; and 
that no such distinction having been made, and the verdict and 
the damages given generally upon the whole matter of complaint, 
there must at all events be a new trial. No point of this kind was 
made at the trial. If it had been I should have amended the 
declaration, if necessary, by introducing allegations distinguishing 
between these two subjects of complaint, and directed the jury to 
find separate damages accordingly. But I think no such amend- 
ment was necessary, and no such distinction exists. 

If the defendant maliciously and without reasonable and pro- 
bable cause filed the affidavit and petition on the 21st of April, 
upon which he afterwards proceeded to the adjudication on the 
7th of May, and that adjudication was afterwards annulled and 
the whole proceeding set aside as unlawful and void, the whole 
constitutes but one subject of complaint, and entitles the plaintiff 
(1) Law Rep. 5 Ch. 741. 



398 COUET OF EXCHEQUER. [L. R. 

1871 to maintain this action. It has been said that any man has a 
JOHNSON right to petition for an adjudication, and to bring his petition to a 
EMERSON. court ^ competent jurisdiction, provided he submits his case to the 
Court truly and fairly. But this was not done by the defendant. 
He founded his petition upon an alleged act of bankruptcy on the 
5th of April, being the non-payment of the debt claimed within 
seven days of the service of the debtor's summons, and he claimed 
to support it upon an act of bankruptcy alleged to have been 
committed on the 21st of April, by reason of the non-execution of 
the bond on or before the 20th. But whatever may have been the 
precise form and nature of the entire proceeding or of any part of 
it, if the proceeding itself was originally instituted and afterwards 
carried on unlawfully and without reasonable and probable cause, 
the action lies. Where, before the abolition of arrest on mesne 
process, a man arrested an alleged debtor without reasonable and 
probable cause, and proceeded with his action to trial, and even 
obtained a verdict and judgment, if the judgment and the proceed- 
ings from the beginning were set aside, an action for the malicious 
arrest was maintainable, notwithstanding the plaintiff in the first 
action had proceeded to trial, and, as before supposed, had obtained 
a verdict and judgment. The having commenced an action with 
an arrest maliciously, and without probable cause, and which at 
last is held to be not maintainable, is sufficient to entitle the party 
aggrieved to maintain his action for damages. 

A doubt has been suggested whether the declaration contains a 
substantive charge that the defendant maliciously and without 
probable cause procured the appointment of a receiver, and caused 
the property of the plaintiff to be seized ; but I think that the 
charge as alleged is partible, and is, 

1. That the defendant filed a petition. 

2. Caused and procured the plaintiff to be adjudged a bankrupt, 
and, 

3. Caused his real and personal estate, goods and effects to be 
seized and taken from him ; and that therefore if it were necessary 
to sever these three complaints, either one or the other, or all are 
sufficiently charged. 

Then, was there evidence of malice ? And upon this point it 
may be enough to say, that as the verdict of the jury establishes 



VOL. VI.] TRINITY TERM, XXXIV VICT. 399 

that there was a want of reasonable and probable cause, that alone 1871 
was evidence from which they were at liberty to infer malice. But JOHN-SON 
there were also a great many facts appearing, almost throughout 
the trial, which support the verdict of the jury on this question. 
At the meeting of the 12th of April, when the defendant knew that 
his imperious client was determined to compel the plaintiff, if he 
could, to admit the debt, it was sworn that the plaintiff offered 
security for the debt in case it should be established, upon property 
in the hands of Sir E. Harvey, to three times the amount of the 
debt. And though the defendant denied that he had been con- 
sulted, or had influenced his client to reject this offer, there was 
ample evidence for the jury to find this denial untrue, and that he 
had advised and encouraged Sir R. Harvey to the harsh and 
severe course which he pursued. 

It was also for the jury to consider whether, when he introduced 
into the order the clause requiring the plaintiff to execute the 
bond within seven days, he was not well aware that, if an order 
with a limitation of time was to be made at all, it should have 
been for the giving notice of the sureties within the seven days, 
and not for the execution of the bond. It was this unauthorized 
requirement, not that the notice of the sureties should be given, 
but that the bond should be executed by the plaintiff within that 
time, that afforded him the means of perplexing and misleading 
the registrar and the judge of the county court, when the matter 
came before them. But it was his extraordinary letters of the 
18th and 19th of April which I think afforded the strongest 
evidence of an unworthy and unjustifiable feeling in the defendant 
in the proceedings to carry into effect the order of the 12th of 
April. To form a correct judgment upon these letters it is neces- 
sary to consider the position of the parties, and the stage of the 
proceedings at which they had arrived. The plaintiff had, as so 
often observed, served the notices in strict conformity to the rule, 
and they had been received, and he had no more to do but to 
await an appointment by the registrar, and then to justify his 
sureties and execute the bond. The defendant, on the other hand, 
having received the notice, was not called upon, and had no reason 
or occasion whatever to write to Mr. Hand at all. Ho had only 
to await the appointment to be made by the registrar ; and as by 






400 COUKT OF EXCHEQUEK. [L. IL 

1871 the rule the notice of the appointment would have called upon 
JOHNSON him to give notice to the other parties that he should object to the- 
sureties, it was at that time, after receiving the appointment, that 
whatever objection he might have to the sureties should have been. 
notified to the parties, and made at the meeting to be appointed. 
What then was his motive for writing to Mr. Hand at all, but 
still more, for writing to him in the terms of the letter of the 18th. 
He knew that the seven days expired upon the 20th, and seeing 
that on the 21st he petitioned and obtained the appointment of a 
receiver, and caused the plaintiff's whole property to be seized 
between twelve o'clock in the day and six in the evening; the jury 
may well have asked themselves whether he did not intend, when 
he wrote this letter of the 18th, to execute his purpose and to take 
these ruinous steps against the plaintiff on the 21st. And if he- 
did so intend, what was the course that he ought to have pursued ? 
Common humanity would have suggested that, if he wrote at all 
to the plaintiff, he should have warned him that in two days more 
the seven days would have elapsed, and that he would be liable to- 
be made a bankrupt. Instead of this, he writes to him a letter, 
silent as to the approaching lapse of the seven days and as to any 
proceedings to be taken on the 21st, but telling him that his 
sureties would be objected to ; of which the natural consequence 
was that he would look about him for another surety, and thus 
thrown off his guard, allow the 20th to elapse without taking any 
steps to avert the ruinous proceedings of which the defendant had 
given him no intimation, but against which, if he had been warned^ 
he might possibly have provided. On the other hand, he made no 
communication to the registrar, to whom any objection to the 
sureties ought to have been addressed. And might not the jury 
believe that this was because any intimation to that effect to the 
registrar would have called his attention to rule 162, and induced 
him immediately to make some order which would have enabled 
himself to make the appointment, and so prevent the proceedings 
of the 21st? Then we come to the strange and unfounded state- 
ment in the letter, that the registrar would not upon principle 
accept an attorney as surety. The registrar proved beyond all 
question that he had never come to any such determination, and 
of course had never authorized any one to say that he had ; that, 



VOL. VL] TRINITY TEEM, XXXIV V1CT, 401 

on the contrary, he had expressed his willingness at the meeting 1871 
of the 12th to accept Mr. Hand as surety, and declared upon oath JOHNSON 
at the trial that he would have accepted him if the meeting had 
taken place, and he had offered himself as he had done before. 
What then is the real secret of this extraordinary statement? 
The defendant swore that he had been so told by Bullard, and 
Bullard confirmed him by swearing that he had made that state- 
ment. Bullard, therefore, must have stated that which was un- 
true, even if the defendant had written what he believed to be 
true; and Bullard neither gave nor attempted to give any ex- 
planation whatever of his having made this extraordinary state- 
ment. But considering with attention the whole body of the 
evidence at the trial concerning Mr. Bullard, that although he 
was an officer of the court, and ought to have acted impartially 
between all litigant parties, he was constantly in communication 
with Sir K. Harvey and the defendant ; that he took upon himself 
the duties of the registrar ; that he proposed himself as receiver, 
and was readily accepted by the defendant; that he aided and 
supported the defendant in the cruel and ruinous proceeding of 
the 21st, to seize the whole property and stop the trade and 
resources of the plaintiff, and acted throughout, even to the final 
annulling of the adjudication, first as receiver and afterwards as 
trustee of the plaintiff's estate in bankruptcy; and considering 
also the merciless rapidity with which all these proceedings were 
hurried on, one after the other, to their completion, and that 
throughout them all Bullard and the defendant constantly and 
invariably acted together, might not the jury believe that this 
tale about the resolution of the registrar not to accept Mr. Hand 
as surety was concerted between them, and that Bullard came 
forward as a witness at the trial to save the defendant if he could 
from a verdict, by taking upon himself the authorship of this 
story ? I thought much at the trial, and have anxiously con- 
sidered since, the whole of the evidence bearing upon this part <>(' 
the case, and I am utterly unable to conceive any motive which 
could have induced the defendant, even if the statement had really 
been made to him by Bullard and he had believed it, to write in 
those terms to Hand, and to maintain a perfect silence to the 
registrar, unless that he might prevent Mr. Hand from suspecting 



402 COUKT OF EXCHEQUEK. [L. E. 

1871 the blow which was to fall upon the plaintiff on the 21st, and the re- 
JOHNSON gistrar from remembering the provisions of the rule which required 
EMERSON n * ma ^ e ^ ie appointment. The result was, that neither lie 
nor Mr. Hand had the smallest idea of what was impending, and 
that the series of proceedings which accomplished the ruin of the 
plaintiff took place without any possibility of opposition or oppor- 
tunity of resistance. It may be as well to add in this place, that 
the mode in which the purposes of the defendant were effected on 
the 21st of April is involved in some degree of mystery. The 
statute and the rules require, not merely the affidavit of the act of 
bankruptcy, and the petition, but that before sealing the copies of 
the petition for service, its statements should be carefully investi- 
gated, (rule 32) By whom this was done, or whether it was done, 
does not appear. Then under s. 13, after the presentation of a 
petition, the Court may appoint a receiver, and may direct imme- 
diate possession to be taken of the property or business of the 
bankrupt. We have the affidavit which was used for this purpose, 
and which merely states that it was important that a receiver 
should be appointed. Why important, does not appear. By whom 
this affidavit was considered, and who was the real party granting 
the order, though it bears the signature of the registrar, again we 
are 'not told. The whole of this proceeding took place ex parte; 
but when we look to rule 50, we find reason to think that notice of 
this ought to have been given to the plaintiff so that he might 
have had the opportunity of shewing cause against it ; the words 
of the rule being, that upon applications of this nature, " in cases 
in which any other party or parties than the applicant are to be 
affected by such order, no such order shall be made, unless upon 
the consent of such person or persons duly shewn to the Court ; or 
upon proof that notice of the intended motion and copy of the 
affidavit in support thereof has been served upon the party or 
parties to be affected thereby four clear days at least before the day 
named in such notice as the day when such motion is to be made." 
Nothing of this kind took place, and the proceedings of that day 
were conducted from beginning to end ex parte and unopposed, as 
before detailed. No point upon this was made at the trial by the 
learned counsel for the plaintiff ; but when we are considering the 
question of malice, as well as the nature of the relations subsisting 



VOL. VI.] TRINITY TERM, XXXTV VICT. 403 

and the communications which took place between Billiard and the 1871 
defendant, it may not be immaterial to observe the mode in which JOHNSON 
this important part of the proceeding was conducted. v - 

It is scarcely necessary, as further evidence of malice, to advert 
to the harshness and severity with which these proceedings were 
characterized from beginning to end. I cannot think there was 
any want of evidence on this point, or that any intelligent jury 
could have pronounced any other verdict upon it. I ain of opinion 
also, that the personal participation of the defendant, apart from 
and independently of Sir K. Harvey, is evidenced by the writing of 
the letters of the 18th and 19th of April, and by the obtaining of 
the order to appoint the receiver and the authority to seize the 
plaintiff's property on the 21st of April There were other circum- 
stances as to which evidence was given in the course of the trial, 
which appear to me to have amply justified the verdict of the 



Upon the grounds, then, that the defendant was perfectly aware 
that the application to dismiss the debtor's summons upon the 2nd 
of April suspended and stayed the operation of the summons and 
all proceedings upon it, and that the presenting the petition and 
the other acts done on the 21st of April and the procuring the ad- 
judication on the 7th of May, were unauthorized and unlawful, and 
that the defendant knew that thay were so, I am of opinion that 
he had no reasonable and probable cause for instituting and carry- 
ing them on, and, the jury having found that he was actuated by 
malice, their verdict is well supported by the evidence, and ought 
not to be disturbed. 

The Court being equally divided, followed the course adopted 
in Cockle v. London and South Western By. Co. (1), and the rule 
dropped. (2) 

Attorney for plaintiff: Lewis Sand. 

Attorneys for defendants : Whites, Renard, & Floyd. 

(1) Law Rep. 5 C. P. 457, at p. 472. " Rule discharged ; defendant Sparrow 

(2) Subsequently, to avoid any diffi- to be at liberty to appeal without giving 
culty as to the appeal, Bramwell, B., bail ; execution to be stayed till the 
withdrew his judgment, and. judgment decision of the appeal." 

was entered in the following form: 



404 COURT OF EXCHEQUER. [L. R. 



1871 ATKINSON v. NEWCASTLE AND GATESHEAD WATERWORKS 

May 25. COMPANY. 

Statutory Duty Water Company Waterworks Clauses Act, 1847, s. 42 
Liability for not keeping Pipes charged with Water at the Statutory Pressure. 

By s. 42 of the Waterworks Clauses Act, 1847, the undertakers are to keep 
their pipes to which fire-plugs are fixed, constantly charged with water at a certain 
pressure, and are to allow all persons at all times to use the same for extinguish- 
ing fire without compensation. By s. 43, a penalty of 10Z., recoverable by a 
common informer, is imposed on the undertakers for the neglect of (amongst 
others) this duty. 

On demurrer to a declaration, by which the plaintiff claimed damages against 
the defendants (a water company) for not keeping their pipes charged as required 
by s. 42, whereby his premises were burnt down : 

Held (following Couch v. Steel (3 E. & B. 402 ; 23 L. J. (Q.B.) 121),) that the 
declaration was s;ood. 



DECLAKATION : That by 26 Viet. c. xxxiv. (incorporating the 
Waterworks Clauses Act, 1847), the defendants were incorporated 
with certain powers of taking land and supplying and maintaining 
waterworks ; that the plaintiff was at the time, &c., the owner and 
occupier of a dwelling-house, timber-yard, and saw-mills, situate 
within the limits prescribed by the first-mentioned Act for the 
supply of water by the defendants, and was under the provisions 
of the said Act, and the Waterworks Clauses Act, 1847, entitled, 
for reward to be paid by him to the defendants in that behalf, to 
a supply of water by the defendants, and had complied with all 
the provisions of the said Acts in order to entitle him to such 
supply for domestic and other purposes ; that before, &c., the de- 
fendants had laid down certain pipes near to the said dwelling- 
house, &c., of the plaintiff for the purpose of supplying water 
according to the said Acts,, and had fixed to such pipes certain 
fire-plugs ; that nevertheless the defendants, neglecting their 
duty in that behalf, did not at all times, and especially at the 
time of the breaking out on the said dwelling-house, &c., of the 
plaintiff of the fire thereinafter mentioned, keep charged with 
water their said pipes to which fire-plugs had been and were then 
so fixed as aforesaid, under such pressure as by the said first- 
mentioned Act, and the Waterworks Clauses Act, 1847, was 
required, although the defendants were not prevented from so 



VOL. VI.] 



TRINITY TERM, XXXIV VICT. 



405 



1871 



ATKINSON 



doing by frost, unusual drought, or other unavoidable cause or 
accident, or by the doing of necessary repairs ; that during the 
time the said pipes, with the said fire-plugs affixed thereto, were so 
laid as aforesaid, a fire broke out in the timber-yard and saw-mills AN1) 
of the plaintiff, and by reason of the defendants not having kept WATKHWOKKS 
charged the said last-mentioned pipes under such pressure as afore- 
said, a proper supply of water could not be procured for the pur- 
pose of extinguishing the said fire, and in consequence thereof the 
timber-yard and saw-mills were burnt down, and the plaintiff was 
and is greatly damaged. 
Demurrer and joinder. (1) 



(1) The Newcastle and Gatesliead 
Waterworks Act, 18G3 (26 Viet. 
c. xxxiv.) by s. 3 incorporates the 
Waterworks Clauses Act, 1847 (10 Viet. 
c. 17.) The material sections of the 
latter Act are as follows : 

S. 35 : " The undertakers shall pro- 
vide and keep in the pipes to be laid 
down by them a supply of pure and 
wholesome water, sufficient for the 
domestic use of all inhabitants of the 
town or district within the limits of 
the special Act, who, as hereinafter 
provided, shall be entitled to demand 
a supply, and shall be willing to pay 
water-rate for the samo ; and such 
supply shall be constantly laid on at 
such a pressure as will make the water 
reach the top storey of the highest 
houses within the said limits . . . and 
the undertakers shall cause pipes to be 
laid down and water to be brought to 
every part of the town or district 
within the limits of the special Act," 
on such requisition by the owners and 
occupiers, and upon their entering into 
such agreement as mentioned in the 
section. 

By s. 30, if the undertakers refuse 
or neglect to lay down pipes, as men- 
tioned in s. 35, " they shall forfeit to 
each of such owners and occupiers the 
amount of rate which he would be 
liable to pay under such agreement, 



and also the further sum of 40s. for 
every day during which they shall 
refuse or neglect to lay down such 
pipes, or to provide such supply of 
water : provided always that the under- 
takers shall not be liable to any penalty 
for not supplying water, if the want of 
such supply shall arise from frost, un- 
usual drought, or other unavoidable 
cause or accident." 

By s. 37, the undertakers are to keep 
constantly laid on (unless prevented 
by the above-mentioned causes) in all 
the pipes to which fire-plugs shall be 
fixed, a sufficient supply for certain 
public purposes therein mentioned (not 
including the extinction of fires) ; such 
supply to be provided at rates to be 
agreed upon by the town commis- 
sioners and the undertakers, or deter- 
mined as therein mentioned. 

By s. 38, " The undertakers, at the 
request of the town commissioners, 
shall fix proper fire-plugs in the main 
and other pipes belonging to them," 
in the manner mentioned in the sec- 
tion, " for the supply of water for ex- 
tinguishing any fire which may break 
out within the limits of the special 
Act." 

By s. 30, the undertakers are to 
keep the fire-plugs in repair, and pro- 
vide keys, &c. ; and by s. 40, the costs 
of fixing and repairing the fire-plugs, 



406 



COUKT OF EXCHEQUER 



[L. E. 



COM PANT. 



1871 Holder, Q.C. (Herseliell with him) in support of the demurrer. 

ATKINSON The plaintiff seeks to make the defendants liable upon the statu- 

NEWCASTLE toi 7 duty imposed by s. 42 of the Waterworks Clauses Act, 1847. 

AND But the true inference from s. 43 of that Act is that the legis- 

GATESHEAD , , . 

WATERWORKS lature having given a penalty for the breach of any of the duties 
enumerated in it, including the one in question, and having 
also given a compensation of 40s. a day to any person who might 
suffer an injury by the non-supply of water for which he would 
have to pay, intended by these provisions to state the whole 
liability of the defendants, and did not mean that compensation 
should be paid by them in any other case. It is obvious that this 
would be so with respect to the duty of laying down pipes under 
s. 35; the person injured by the defendants' neglect could not 
recover anything beyond the amount of rate he would be liable to 
pay, and the 40s. a day (s. 36). It would be the same with respect 
to the default mentioned in s. 43 in supplying the town com- 
missioners or persons who had paid or tendered water-rates ; they 
could only recover (besides the 107. penalty) the 40s. a day pro- 
vided by that section. To suppose, then, that a person injured 



providing keys, &c., are to be defrayed 
by the town commissioners. 

By s. 41, at the request and expense 
of the owner or occupier of any work 
or mamifactory, the undertakers are to 
place and maintain a fire-plug as near 
to it as may be. 

By s. 42, " The undertakers shall at 
all times keep charged with water, under 
such pressure as aforesaid [see s. 35], all 
their pipes to which fire-plugs shall be 
fixed, unless prevented by frost, un- 
usual drought, or other unavoidable 
cause or accident, or during necessary 
repairs, and shall allow all persons at 
all times to take and use such water 
for extinguishing fire without making 
compensation for the same." 

By s. 43 : "If, except when pre- 
vented as aforesaid, the undertakers 
neglect or refuse to fix, maintain, or 
repair such fire-plugs, or to furnish to 



the town commissioners a sufficient 
supply of water for the public purposes 
aforesaid, upon such terms as shall have 
been agreed on or settled as aforesaid, 
or if, except as aforesaid, they neglect 
to keep their pipes charged under such 
pressure as aforesaid, or neglect or re- 
fuse to furnish to any owner or occu- 
pier entitled under this or the special 
Act to receive (sic) a supply of water 
during any part of the time for which 
the rates for such supply have been 
paid or tendered, they shall be liable 
to a penalty of 10?., and shall also for- 
feit to the town commissioners, and to 
every person having paid or tendered 
the rate, the sum of 40s. for every day 
during which such refusal or neglect 
shall continue after notice in writing 
shall have been given to the under- 
takers of the want of supply." 



VOL. VI.] TRINITY TERM, XXXIV VICT. 407 

by the defendants' failure to keep the pipes in connection with 1871 
fire-plugs charged, could recover unlimited compensation, would ATKINSON- 

be to give to those who were to pay nothing at all for the use of , v - 

1 J NEWCASTLE 

the water, and who might not be payers of water-rates at all, AM* 
nor even inhabitants, a far larger remedy than is given to those WATEBWOIIKS 
who are entitled to the water on the terms of paying for what they 
get. The use of the water for extinguishing fire being gratuitous, 
the only remedy which the legislature has provided for a person 
who suffers damage from fire by reason of the pipes in connection 
with the fire-plugs not being kept duly charged, is the penalty 
of 101 

[BRAMWELL, B. That penalty he could only enforce as a 
common informer under s. 88, not as a person aggrieved.] 

Stevens v. JeacocJce (1) is in favour of the defendants ; and 
Couch v. Steel (2) is not in point, because here there is a provision 
for compensation where compensation is intended to be given. 
Further, the injury is too remote. 

Quain, Q.C. (G. Bruce and Shield with him), contra, was not 
called upon. 

KELLY, C.B. This case appears to me altogether free from 
doubt. The Act of Parliament imposes upon this company the 
general duty of providing water to meet the wants of the peoplo 
of Newcastle ; and among other duties there is specifically imposed 
upon them that of keeping the water in the pipes connected with 
the fire-plugs (to be placed by them in certain positions), at such a 
level as will enable the water to go to the top storey of the highest 
houses within the district. They have failed in the performance 
of this duty ; the plaintiff brings this action for injury which he 
has sustained by reason of that failure, and the question is whether 
he can maintain it. It is contended that he cannot, because the 
Act imposes penalties for the non-performance of the duty. I \\ ill 
not go further into the authorities or the principles of law appli- 
cable to the question than to refer to the case of Couch v. Steel, 
where the judgment of Lord Campbell (which was the judgment 
of the Court), really comprises the whole law on the subject. He 

(1) 11 Q. B. 731. (2) 3 E. & B. 102 ; 23 L. J. (Q.B.) 121. 



408 COTJKT OF EXCHEQUEE. [L. B. 

1871 says (1) : " The general rule is, that ' whenever a man has a 
ATKINSON temporal loss or damage by the wrong of another, he may have 
NEWCASTLE an ac ^ on on the case to be repaired in damages ' (Com. Dig. 

A Tit. Action on the Case. A.) The statute of Westm. 2, c. 50, 
GATESHEAD . . 

WATERWORKS gives a remedy by action on the case to all who are aggrieved 

by the neglect of any duty created by statute : see 2nd Inst. 
p. 486, and in Com. Dig. Tit. Action upon Statute. F, it is laid 
down that 'in every case where a statute enacts or prohibits a 
thing for the benefit of a person, he shall have a remedy upon the 
same statute for the thing enacted for his advantage, or for the 
recompense of a wrong done to him contrary to the said law.'" 
The second count (which was the one then in question), contained 
no allegation in terms of any duty on the part of the defendant to 
supply medicines for the use of the ship's company ; but the 
plaintiff relied upon the obligation cast upon the defendant by the 
18th section of the statute 7 & 8 Viet. c. 112, by which it is 
enacted that " every ship navigating between the United Kingdom, 
and any place out of the same, shall have and keep constantly on 
board a sufficient supply of medicines and medicaments suitable 
to accidents and diseases arising on sea voyages," in accordance 
with the scale which shall be issued by the Admiralty, and pub- 
lished in the London Gazette ; " and in case any default shall be 
made in providing and keeping such medicines, &c.," the owner of 
the ship shall incur a penalty of 201. for each and every default ; 
and upon this ground judgment was given for the plaintiff. Now, 
substitute for the duty to supply medicines, the duty to provide a 
sufficient supply of water for the purposes in question in this case, 
and the penalty of 10Z. for that of 20?., and the cases are identical. 
I can find no distinction, and therefore our decision must be in 
accordance with the principles there laid down, which appear to 
me entirely free from doubt. 

It has been urged that the damage is too remote ; but what 
kind of damage can be more a proximate consequence of the 
want of water than the destruction by fire of a house which a 
proper supply of water would have saved ? On these grounds I 
am of opinion that the plaintiff is entitled to the judgment of the 
Court. 

(1) 3 E. & B. at p. 411; 23 L. J. (Q.B.) at p. 125. 



VOL. VI.] TRINITY TERM, XXXIV VICT. 409 

MARTIN, B. I do not consider this case as by any means clear. 1871 

It appears extraordinary that this company should, without express ATKINSON 
words, be made an insurance office for all Newcastle and Gates- 



head ; but I do not dissent from the judgment of my Lord and mv ANU 

* GATEPHEAD 

learned Brothers. WATERWOKKS 

COMPANY. 

BRAMWELL, B. I agree with the Lord Chief Baron ; I think 
the case is decided by the authority of Couch v. Steel (1), but it 
is material to say, that I should have come to the samo con- 
clusion without it. The statute has imposed upon the defendants, 
by s. 42, the duty of keeping their pipes, in which fire-plugs are 
fixed, charged with water under a certain pressure, and they are 
to allow all persons at all times to take and use this water for ex- 
tinguishing fire without paying compensation. They have under- 
taken this duty, and have consented that it should be put on them, 
in consideration, I suppose, of the benefits they derive from the 
powers conferred on them by the statute. No\v, when a duty is 
imposed on a person, it always supposes a correlative right in 
some one, either in the public or in the individual. "When it 
is in the public, the remedy is usually by indictment ; but when 
the duty is imposed for the benefit of the individual, then, unless 
some peculiar and specific remedy is given to him by the same 
statute which creates his right, it seems to follow that he has 
the ordinary remedy by action. Is, then, this duty created in 
such a way as to confer the correlative right upon the public or 
on the individual ? It is manifest that it is created in such a 
way as to confer the right, not upon any section of the public, 
but upon the individual. The public at large are not interested 
in extinguishing fires in the houses of individuals, but the indi- 
vidual is. Therefore it seems to me to follow that, unless some 
compensation is given to him for the violation of his right, he is 
entitled to maintain an action at common law. Mr. Holker could 
not help admitting, that although a common informer (which, 
as it includes all mankind, must include the sufferer) might have 
recovered a penalty of 10Z., yet there is not in the statute any 
compensation given to the sufferer, whose right to the water for 

(1) 3 E. & B. 402 ; 23 L. J. (Q.D.) 121. 
VOL. VI. 2 M 3 



410 COUKT OF EXCHEQUEE. PL. K. 

1871 the extinguishment of fire on his premises has been infringed. 
ATKINSON If so > then the ordinary right of action exists. 

^ nas b een suggested that this was not the proximate cause of 



AND damage ; but to my mind clearly that is not so. The plaintiff's 
GATESHEAD . ...... 

WATEIIWOKKS right is to have the pipes charged tor the purpose ot extinguishing 

fire ; and he has alleged that, in consequence of these" pipes not 
being so charged he could not extinguish the fire, and his house 
was burnt down. It appears to me that we have here the imme- 
diate consequence of a proximate cause. 

CLEASBY, B. I have come to the same conclusion, and I confess 
without hesitation. Under this Act of Parliament the defendants 
obtain great powers of taking lands, appropriating streams, &c., 
and are also entitled to charge certain rates for the water supplied. 
That is the consideration for which they are satisfied to enter into 
the corresponding obligation imposed upon them by the 42nd 
section, which provides that they shall keep their pipes charged 
with water at a certain pressure, "and shall allow all persons at 
all times to take and use such water for extinguishing fire." 

It has hardly been contended that the 42nd section, taken by 
itself, would not give him a complete right ; but it has been argued 
that the effect of the 43rd section is to enact by implication that 
no compensation shall be made, except such as is there provided. 
But this does not appear to me to do so ; that section, which pro- 
vides a penalty recoverable by a common informer, has nothing 
to do with compensation, but is for the purpose of prevention ; if 
at any time if at a time when the water was not required at 
all, it could be shewn that the water was not kept at the right 
pressure, the defendants would have been liable to that penalty. 
Neither that nor any other section makes any provision for com- 
pensation to a person prevented from having the benefit of the 
42nd section, in whatever way that may happen ; and there is, 
therefore, nothing in the Act to disentitle the plaintiff to maintain 
this action. 

Judgment for the plaintiff. 

Attorneys for plaintiff : Walters & Gusli, for Clarices & Youll, 
Newcastle-upon- Tyne. 

Attorneys for defendants : Williamson, Hill, & Co. 



INDEX. 



ACCEPTANCE OF LEASE - 32 

See ASSIGNMENT OF LEASE. 
ACCOUNT, MATTER OF MEEE 224 

See MATTKII OK " MERE ACCOUNT.'' 
ACT OF BANKRUPTCY Debtor's summons 329 
See MALICIOUSLY PROCURING ADJUDICATION. 
Execution Priority - - 228 

See SEIZURE VNDEIJ Fi. FA. 2. 
ACTION, CAUSE OF - 46 

See CAUSE OF ACTION. 
Statutory Duty - 404 

See STATUTORY DUTY. 

ADJUDICATION Bankruptcy Debtor's sum- 
mons - - 329 
See MALICIOUSLY PROCURING ADJUDICATION. 
Bankruptcy Execution Priority - 228 

See SEIZURE UNDER Fi. FA. '2. 
ADMIRALTY COURT Order 4 

See ORDER OF ADMIRALTY COURT. 
AGENT Broker Stock Exchange 255 

See CUSTOM OF STOCK EXCHANGE. 1. 
Broker's default - Ex. Ch. 132 

See CUSTOM OF STOCK EXCHANGE. 2. 
Commission - - 9 

See COMMISSIONS " INWARDS AND OUT- 
WARDS." 
Mistake in telegram - 7 

See MISTAKE IN TELEGRAM. 
ALLOTMENT OF SHARES - 108 

Sec LETTER OF ALLOTMENT. 

ANNULLING BANKRUPTCY llankruplcy Act, 
18t>!> (32 <t 33 Viet. c. 71). ss. 3t, Sl1'ropertij 
"revertiny" to Bankrupt " Mutual deidiny" S<-t- 
off M< me;/ had and received. ~] The defendant having 
been adjudicated bankrupt on a debtor summons 
issued by a banking tirm of H. & II., a trustee was 
appointed, who realized the estate, and paid the 
proceeds into the bank of II. & H. in pursuance 
of a resolution of creditors. The firm of II. & H. 
were afterwards adjudicated bankrupts, the sum 
paid in by the trustee then standing to his credit 
.in their Ixioks. Afterwords the order adjudicating 
the defendant bankrupt was reversed on apj>eal, 
and no order was made under s. 81 of the Bank- 
ruptcy Act, 18G9, as to his property. In an action 
brought by the plaintiff, as trustee in the bank- 
ruptcy of H. & H., against the defendant, to 
recover the amount of his debt to them: HcJd, 
that the defendant was entitled to set off i}ie 
amount so paid into the bank by the trustee in 
VOL. VI Ex. 2 



ANNULLING BANKRUPTCY continued. 
his bankruptcy, either as an equitable set-off or r\* 
a mutual credit. BAILEY c. JOHNSON - 279 
APPARENT POSSESSION///// of Sole 17 <( 1* 
Viet. c. 'M, s*. 1, 7 Occupation.] '\'\\>- 17 A: IS 
Viet. c. 3H. s. 7, enacts that jx'rsonal chattels shall 
be deemed to be in the " apparent po.-st ssion " of 
the grantor of a bill of sale, so long as they shall 
remain or be in or upon any house, land, or other 
premises " occupied " by him : Held, that the 
"occupation " rcfemd to in this section is actual 
dc facto occupation. Tin- grantor of a bill of sale, 
which was not registered, was tenant of rooms 
where the goods comprised in it were placed, but 
he resided elsewhere. Having made default in 
paying the sum secured he gave the keys of tin 1 
rooms to the grantee, who opened the rooms anil 
put his own name on some of the goods. None, 
however, were removed, ami an execution at the 
suit of judgment creditor against the grantor \v;is 
afterwards levied on them: Utl'l, that t lie grantor 
did not ''occupy" the rooms within the meaning 
of 17 & 18 Viet. e. 3H, s. 7, and that the goods 
were not to be deemed in his ' apparent jxissesMon," 
and that the bill of sale was therefore valid as 
against the execution creditor. IVOUINSH.V r. 
: BRIGGS - 1 

APPEAL County court Case 87 

See COUNTY COURT AITEAL. 
ARBITRATION Costs 200 

See COSTS UNDER COUNTY COURT ACTS. I. 

- 213 

See COSTS UNDER COUNTY COURT Arr> ti. 
Matter of" mere account' 1 224 

See MATTER OF " MERE ACCOUNT. ' 

ASSIGNMENT OF LEASE Cr,-<litnr* 

Acceptance of Leave.] By a deed for the benefit of 

creditors 'executed after the repeal of til \ -"> Viet. 

c. 134) Ihe debtor assigned to the defendant all 

his jKTsonal estate, and the defendant executed 

. the died, and acted under it. In the per.sonaJ 

estate was included a lease as to which the det'en- 

d.int did :io act specifically acreptitf.: it. In an 

' action by the landlord for rent -.Jlcld. that the 

lease had pa-sod to the defendant, and that he v .is 

therefore liable. WHITE r. Hi NT - 32 

AUTHORITY Partner Payment - Ex. Ch. 243 

See VOLUNTARY FAYMI NT. 

" BALTIC " PRINTED RATES Ex. Ch. 53 

Sec FULL AND coiU'LETE CARGO. 
N 3 



412 



INDEX. 



[Ex. VOL. VI. 



BANKRUPTCY Annulling - - 279 

See ANNULLING BANKRUPTCY. 

Creditor's deed Lease - 32 

See ASSIGNMENT OF LEASE. 

Debtor's summons Adjudication - 329 

See MALICIOUSLY PROCUEING ADJUDICA- 
TION. 

Execution creditor Priority - - 228 

See SEIZURE UNDER Fi. FA. 2. 

Proof Contingent liability - - 312 

See PROOF FOR CONTINGENT LIABILITY. 

BENEFIT BUILDING SOCIETY - - 193 

See STAMPS. 

BILL OF EXCHANGE Payment - Ex. Ch. 243 
See VOLUNTARY PAYMENT. 

BILL OF SALE Apparent possession - 1 

See APPARENT POSSESSION. 
Consideration - - 203 

See SEIZURE UNDER Fi. FA. 1. 

BEOXEE Default - - - Ex. Ch. 132 

See CUSTOM OF STOCK EXCHANGE. 1. 

Stock Exchange - 255 

See CUSTOM OF STOCK EXCHANGE. 2. 

CALLS Indemnity Sale of shares Ex. Ch. 132 
See CUSTOM OF STOCK EXCHANGE. 1. 

CAEEIEE Misdelivery - 36 

See MISDELIVERY BY CARRIER. 

CASE ON APPEAL County court - 87 

See COUNTY COURT APPEAL. 

CASES Couch v. Steele (3 E. & B. 402 ; 23 L. J. 
(Q.B.) 121) followed - 404 

See STATUTORY DUTY. 

Dunlop v. Higgins (1 H. L. C. 381) com- 
mented on - - - 108 
See LETTER OF ALLOTMENT. 

Flureau v. Thornhill (2 W. Bl. 1078) fol- 
lowed - - - 59 
See DEFECT OF TITLE. 

GrisseU v. Bristowe (Law Eep. 4 C. P. 36) 

followed - - Ex. Ch. 132 

See CUSTOM OF STOCK EXCHANGE. 1. 

Jackson v. Spittall (Law Kep. 5 C. P. 542) 

followed - - 46 

See CAUSE OF ACTION. 

Quested v. Michell (24 L. J. (Ch,) 722) com- 
mented upon - - 291 
See RULE IN SHELLEY'S CASE. 

Ex parte Veness (Law Rep. 10 Eq. 419) 

discussed - - 228 

See SEIZURE UNDER Fi. FA. 2. 
CAUSE OF ACTION Writ issued for Service 
Abroad Common Law Procedure Act, 1852 (15 & 
16 Viet. c. 76), s. 18.] The defendant made a 
promise of marriage to the plaintiff whilst both 
parties were residing abroad. Both afterwards 
came to England, wliere the defendant wrote a 
letter to the plaintiff renouncing the contract. 
He afterwards left the country. The plaintiff, 
under 15 & 16 Viet. c. 76, s. 18, issued a writ in- 
dorsed for service abroad. The defendant, having 
teen served with the writ abroad, moved to set it 
aside: Held (by Martin, Pigott, and Cleasby, 
BB. ; Kelly, C.B., dissenting), that the writ was 



CAUSE OF ACTION co ntinued. 
rightly issued. By Pigott and Cleasby, BB. 
(agreeing with Jackson v. Spittall (Law Hep. 5 
C. P. 542), that cause of action in s. 18 means the 
act or omission constituting the violation of duty 
complained of, and not the whole cause of action. 
DURHAM v. SPENCE 46 



Statutory duty - 

See STATUTORY DUTY. 



- 404 



CHAETEEPAETY Agent Commission - 9 
See COMMISSIONS " INWARDS AND OUT- 
WARDS." 

Freight Payment - 20, Ex. Ch. 319 

See PAYMENT ON ACCOUNT OF FREIGHT. 

Full and complete cargo - Ex. Ch. 53 

See FULL AND COMPLETE CARGO. 

" CHILD BOEN OE TO BE BOEN " - - 291 
See RULE IN SHELLEY'S CASE. 

COAL DUES Income-tax - 70, Ex. Ch. 808 

See INCOME-TAX. 

COLLATEEAL AGEEEMENT Written contract 
Parol variation - - 76 

See EVIDENCE TO VARY WRITTEN CON- 
TRACT. 

COLLECTION OF WATEE Landlord and Tenant 
Occupiers of Upper and Lower Floors.'] . The 
plaintiffs hired of the defendant the ground-floor 
of a warehouse, the upper part of which was 
occupied by the defendant himself. The water 
from the roof was collected by gutters into a box, 
from which it was discharged by a pipe into the 
drains. A hole was made in the box by a rat, 
through which the water entered the warehouse 
and wetted the plaintiffs' goods. The defendant 
had used reasonable care in examining and seeing 
to the security of the gutters and the box. In an 
action by the plaintiffs against the defendant for 
the damage so caused : Held, that the defendant 
was not liable, either on the-ground of an implied 
contract, or on the ground that he had brought 
the water to the place from which it entered the 
warehouse. CARSTAIRS v. TAYLOR - - 217 

COMMISSION Charterparty - 9 

See COMMISSION " INWARDS AND OUT- 
WARDS." 

COMMISSIONS " INWAEDS AND OUTWAEDS " 

Charterparty Construction Printed and 

written Matter.'] A Charterparty made between 

the plaintiffs, the charterers, through the agency 

of Gr. & Co., and the defendant, the captain of the 

Elvezia, provided among other things that the 

ship should proceed with a cargo to San Francisco, 

j '' where the ship shall be consigned to charterers' 

agents inwards and outwards, paying the usual 

commissions . . . and deliver the same . . . and 

| so end the voyage ;" and that " on her return to 

her port of discharge in the United Kingdom " 

j she should be reported at the Custom House by 

, G. & Co. : Held, that these provisions did not 

I impose on the defendant an obligation to accept 

! a homeward cargo for the United Kingdom from 

I the plaintiffs' agents at San Francisco, but merely 

bound him, if he had determined upon taking a 

return cargo on board there, to employ them to 

procure and ship it. CKOSS v. PAGLIANO - 9 



Ex. VOL. VI.] 



INDEX. 



413 



COMPANY Shares Allotment - - 108 
See LETTER OP ALLOTMENT. 

Winding-rip Set-oft' - - 185 

See SET-OFF. 

COMPANIES ACT, 1862 Sects. 87, 101, 130, 131 
See SET-OFF. [185 

COMPULSORY REFERENCE - 224 

See MATTER OF " MERE ACCOUNT." 



CONSIDERATION Bill of sale - - 203 
See SEIZURE UNDER Fi. FA. 

CONSTRUCTION Charterparty 9 

See COMMISSION " INWARDS AND OUT- 
WARDS." 

Charterparty - - 20, Ex. Ch. 319 

See PAYMENT ON ACCOUNT OF FREIGHT. 

Contract Indemnity - - 43 

See INDEMNITY AGAINST COSTS. 

Will - 190 

See FEE WITHOUT WORDS OF LIMITATION. 

Written document - - 89 

See RATIFICATION OF FORGERY. 

CONTINGENT LIABILITY Proof - - 312 

See PROOF FOR CONTINGENT LIABILITY. 

CONTRACT Indemnity 43 

See INDEMNITY AGAINST COSTS. 

Parol variation of written contract - 70 

See EVIDENCE TO VARY WRITTEN CON- 
TRACT. 
Personal skill - - 269 

See CONTRACT FOR PERSONAL SERVICES. 
Sale of lease Measure of damage - 59 

See DEFECT OF TITLE. 
Sale of shares - - Ex. Ch. 132 

See CUSTOM OF STOCK EXCHANGE. 1. 
Telegram 7 

See MISTAKE IN TELEGRAM. 

CONTRACT FOR PERSONAL SERVICES Con- 
ditional Contract Contract to do an Ac