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. 7«G, 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 BinS. (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 ™** ****?** TeleSraPh| 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, 305r
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
&ClSPt°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 pos«sion " 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 jfleg 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. 0
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 my °Pmi°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. Zl—IIiylt, 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 Gil»bs, 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 lessor ^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 RcT. 2 C. I1. 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 full1 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 °^ ^Pr^ 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 has teen termed the whole cause of action; that is, both the con-
SPEKCE tract 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 Rcr. 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 cargO Of oats> 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. 8±d.
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. 7±d.9 157. 4s., and 5091 4s., or in all, 6007. 8s. 7±d. 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 comPuted 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), " "JJAIN
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. Ja»:»:,
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.
jant 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. Jan- 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 gnc[ jn 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 cnattels, 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
BKOOK 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,
,rv- 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 yEEEM,Vx
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 ijRmSH 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 receip* °f a posted notice, but also gives a reasonable account of
AMERICAN, ns 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 ie^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.
l»71 it must be because it is so as a general rule. That is to say, there
"BRITISH AND is 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 O7
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 MAXTKI>
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 comPanyj 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. \\. 0 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 wnicn 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- pA^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 PA^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 wrong 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
JJAXTED 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> iu 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
gANKEY 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. 37—6 & 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 and 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 PAI)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). ^^7ith 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^ain*^s Wred 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, and1
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 ; (;ARSTAIUS
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 in 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 <jAB8TA1KS
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. 0 H. L. 3£0.
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 of 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.
gLATER 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 PIN*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 an«execu-
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)Ay]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 Ju(^Se 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. I5., 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 " £0 Bankrupt — " Mutual Dealing " — Set-off1 — 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, DE LANCEY
James, and Susan De Lancey, and entitled to the fund be- T|IE QUEEN
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 DB
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(llliva^ent 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 QUEK>
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 JJEOOKMAN
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 wras 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
0 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. ^ pN 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 scribed. 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
given ciass Of 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. only *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) 0 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 Pro0^ > a Prmcipl6 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
v»as 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^ ^» ^ Parry> 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 wTrote
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 pM]^gOK
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 conviction 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 would 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 Preferred and 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, wrould 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 yME',jsox
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 .JOHV-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- ~ jOUNfON
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 EM,*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 in 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 *ne7 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 JOH\-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 *ke 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, JOU>-.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." JOHSSOX
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. P0^ 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 Pr°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 toi7 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 been 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», Sl—1'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 tin1
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 Act requiring
Personal Skill — Illness — Excuse from Perform-
ance.'] 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 in case of her being too ill to perform.
In an action a.gainst 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 per-
form. ROBINSON v. DAVISON - 269
COSTS — Case sent to county court - - 35
See COSTS OF CASE SENT TO COUNTY
COURT.
Indemnity - 43
See INDEMNITY AGAINST COSTS.
Reference by consent — - 200
See COSTS UNDER COUNTY COURT ACTS. 1.
Reference of cause and all matters in dif-
ference - 213
See COSTS UNDER COUNTY COURT ACTS. 2.
COSTS OF CASE SENT TO COUNTY COURT— 30
& 31 Viet. c. 142, ». 10 — Case sent to !><• trud in tlie
County Court.] After an action has been sent to
be tried in a county court under oO .V :!1 Viet,
c. 142, s. 10, the court in which the action was
brought has no jurisdiction over the costs, and
cannot make an order to tax. MOODY r. STEWAHD
[35
COSTS TO ABIDE THE EVENT OF REFERENCE
[213
See COSTS UNDEH COUNTY COURT ACTS. 2.
COSTS UNDER COUNTY COURT ACTS — Rpfr-r-
ence by Consent — Discretion of Arbitrator.'] In
! an action of trover and of debt a verdict was
taken for the plaintift* 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 bo entered for '11. 10s. as to the
claim in trover, and for 11. 12«. 8'/. as to the claim
' in debt, and directed the defendant to pay the costs
of the reference and award. He hail 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 t-ix both the.
! costs of the cause and of the reference and award : —
j 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 lie had
recovered in the cause sums not exceeding 10/. in
tort, and 20/. in contract. FORSHAW ?\ DE WETTE
[200
2. Cauxe and all Hatter* in Difference re-
ferred— Cost* of Cause to abide 'LKrcnt of li> f< rence''
— County Courts Act, 18'JT, s. .">.] A cause and all
matteis 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 re-
ference and award should be in the discretion of
the arbitrator." As to the cause, the arbitrator
awarded a verdict for the plaintiff for 2.">W. Is. ; as
to the other matters in difference, he found that
242?. 13s. Wd. was due to the defendant from tint
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 'JO/., the
"event of the reference" was such as to entitle
the plaintiff to his costs of the canst', and he was
not deprived of them by the County Courts Act,
18t>7, s. 5. STEVENS r. CHAPMAN - 213
COUNTY COURT, CASE SENT TO - 35
See COST OF CASES SENT TO COUNTY COURT.
COUNTY COURT APPEAL — li>,i* rallii^ »;*>»
('ounty Court JuJtje, to ani>nd Cafe— Malicious
Prosecution — Reasonable and ]'r<>b<ib!<' fVnwc.]
On the hearing of an act ion for malicious prosecu-
tion in the county court to which it was remitted
(under 30 A :'»t Viet. c. 142, s. 10), the judge who
tried the cause ruled that there was an absi-nco of
reasonable and probable cause. The defendant
appealed. The judge stated a case, in which ho
gave what he stated to be the result oi the cvi-
434
INDEX.
[Ex. VOL. VI.
COUNTY COURT APPEAL— continued.
dence, but did not set out the evidence in detail
nor insert the depositions before the police magis-
trate, 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.
THORNEWELL v. WIGNER - - 87
COUNTY COURT JURISDICTION — Interpleader
Summons under 30 & 31 Viet. c. 142, s. 31 — High
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. DEATH v. HARRISON - 15
COURSE OF BUSINESS— Carrier - 36
See MISDELIVERY BY CARRIER.
COVENANT TO REPAIR— Landlord and Tenant-
Lease — Notice of icant of Repair. .] Upon a cove-
nant 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-rep.iir, unless he
Las received notice of want of repair : — So held,
by Bramwell and Channell, BB. ; Martin, B.,
dissenting. MAKIN v. W ATKINSON - 25
COVERTURE— Disability - - 129
See DISA BILITY.
CREDITORS' DEED— Lease - 32
See ASSIGNMENT OF LEASE.
CUSTOM OF STOCK EXCHANGE— Sale of Shares
— Usage of Stock Exchange — Ultimate Buyers-
Ticket — Principal and Agent.~] The plaintiffhav-
ing through his brokers on the Stock Exchange
sold to the defendant, a jobber, ten shares in
Overond, Gurney, & Co., Limited, the defendant
«n the " name day " passed a ticket to the plain-
lift' s brokers containing the name of G. as the
ultimate buyer. No objection was made to the
inane, and the plaintiff executed a transfer to G. !
«f 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 thorn as part of the shares so pur-
chased ; but the name of G. was passed in pur-
suance of S.'s instructions, and according to an
arrangement by which G., who was a person of no
menus, consented to allow his name to be passed
i'.i couoideration 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 WHS unable to j
recover from G., he brought this action to recover J
fhom from the defendant : — Held, affirming the
judgment of the Court below (Lush, J., dissent- j
ing), that the action was not maintainable. — By
Keating. Mellor, Montague Smith, and Brett, JJ., ;
that the defendant Lad fulfilled his obligation by :
parsing a name to which no objection was taken
CUSTOM OF STOCK EXCHANGE— contin ued.
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 nomi-
nee.— 2. That in a contract for the sale of shares
made on the Stock Exchange "for the account,"
all the parties to it who are members of the Stock
Exchange contract amongst themselves as prin-
cipals, 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 Ex-
change, 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 hold-
ing 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 nnd 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. 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 de-
livering 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 pur-
pose by the rules of the Stock Exchange. — By
Cockburn, C.J., that G. was the ultimate pur-
chaser of the shares within the meaning of that
term as applied in the usage of the Stock Ex-
change, and was so treated by the plaintiff, and
that the defendant was therefore free from lia-
bility according to the decision in firisseU v. Srts-
towe (Law Rep. 4 C. P. 36).— By Lush, J., that
G. not being the real buyer of the shares, the de-
fendant, by passing G.'s name as ultimate pur-
chaser, had not fulfilled his contract with the
plaintiff, whom he was therefore liable to indem-
nify against calls. MAXTED v. PAINE. ^Second
Action) - - Ex. Ch. 132
2.
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 ac-
count of the 15th of July, 1870. Subsequently he
told the plaintiffs to carry over the shares to the
account of the 29th of July. This was done, and
the defendant was furnished with an account shew-
Ex. VOL. VI.]
INDEX.
415
CUSTOM OF STOCK EXCHANGE— continw.fl,
ing him to be liable to a difference of KJ8S/. 10*.
On the Ibth of July the plaintiff* were dot-hired
defaulters, and, in accordance with the rules of
the Stock Exchange, all their transactions were
closed, and accounts made np at the price* 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
C013/. 13*. nd. In an action to recover tin's
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 tliat therefore they were
•entitled to recover. DUNCAN v. HILL - 255
DAMAGES — Execution — County court - 15
See COUNTY COURT JURISDICTION.
DEBT — Payment by stranger - 124
See DISCHARGE OF DEHTOR.
DEFECT OF TITLE — Vendor ami Purchaser— Sale
of llcsidue of a Leas/; — Eym'tdMe Interest in Agree-
ment for Ideate — Meamre of Damage* for lirearh
of Contract by Vendor.'] The executors of II.
liaving 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 condition-
ally on the defendant* signing a duplicate form
of consent, whereby it Wits 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 de-
fendants contracted to assign their interest in tlie
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 plain-
tiffs, who brought this action to recover the deposit
money which they had actually paid, the expenses
incidental to the investigation of the defendants'
title, and also damages for the loss of their bar-
gain : — Ifeltt, that thfi case was within the prin-
ciple of Fhircau v. Tltornhill (2 W. HI. 1078), and
tint the plaintiffs were only entitled to recover
their deposit money and the expenses incidental to
the investigation of the defendants' title. BAIN r.
FoTHKItGILL - - 59
DEFECTIVE MACHINERY— Negligence - 73
,S-«> EVIDENCE OF NEC-LICENCE. 1.
i DISABILITY— Prescript ion Act* 3 <(• 4 Win. 4,
j c. 27), s.lti— Successive JJtsaLiliticii icitliuitt linn];
• — 'Infancy — Coverture.'] When the person to whom
the right to bring an action for the recovery of
land accrues is under a disability, and bef. re the
removal of that disability the Mime person falls
under another disability, s. 1(! of 1} A: 4 Wm. 4,
c. 27, preserves his right to bring an action until
ten years after the removal of the latter disabilitv.
— In 18;K), 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 plaintiffs title avcrned she
was an infant ; she married under age, and con-
tinued under coverture until the time of bringing
this action in 187". In an action by herself nml
her husband in her right to recover the land: —
Held, that the action was maintainable, notwith-
standing that more than twenty years had elapsed
since the title accrued, and more than ten years
since the removal of the disability of infancy.
BORROWS v. ELLISON - - 129
DISCHARGE OF DEBTOR— 1 'ayment lij Mramjrr
— Ratification.! The defendant being indebted to
the plaintiff, 8., who had acted as his attorney
in the matter of tlie plaintiff's cla'm (the amount
of which was disputed) but whose authority
had been countermanded, paid to the plaintiff GO/.
in discharge of the disputed claim. The plaintiff
afterwards, at the request of S., and before any
ratification by the defendant, repaid to S. the GO/.,
and sued the defendant for the debt. The defen-
dant pleaded as to GO/, payment, and relied upon
the payment made by S. : — llt-hl, that it \\as com-
petent to the plaintiff and S., before ratification by
the defendant, to cancel what they La 1 done, and
that the plea of payment was therefore not proved.
WALTER r. JAMES - 124
DISCRETION OF ARBITRATOR— (V-ts 200
Sue COSTS UNDEU COINTY C<u KT ACTS. 1.
DUTY— Exemption 193
See STAMPS. 1.
EQUITABLE INTEREST- -Sale— Title 59
See DEFECT OF TITLE.
" EVENT OF REFERENCE " 213
•SV-C CoSTS VNIIEK Coi'NTY CofKT ACTS. -.
EVIDENCE— County court appeal 87
Si-e COUNTY COIKT AITKAL.
Written contract — 1'arol variation - 70
See EVIDENCE TO VAIIY WI:ITTI:X CON-
TRACT.
EVIDENCE OF NEGLIGENCE -/'/. «>li,i<i— Lia-
bility of Master to k'rrranl — I >< f> <•> I a M>n-l,iin /•>/—
tierrant'x iijnnraiice of Defft-t.] 1 Vclanttion by the
administratrix of (;. W. that the defendants \\eiv
owners of a factory and machine, und (J. W. was
employed by them to w<>iU tie rein, and in the
course of his employment it w:i* in ces.-iiry for him
to enter the machine to cl« an it: tl.a' by the
negligence of tlie defendant > it was unsafely ron-
strut-ted and in a defective eondition, :m 1 \\a-. l.\
reason of not Iteing sufficiently gunrdi-d. un^it to
be used ami entered, as the .1, teinlants \\ell
knew ; and by reason of the piviniM s, nml also by
reason, as the defendants \\ell knew, of no suf-
ficient apparatus having Ix-eu provided by tin in
to protect <;. W.. it was suddenly put in million
whiUt !.e was at work in the machine, a. id lu:
41G
INDEX.
[Ex. VOL. VI.
EVIDENCE OF NEGLIGENCE— continued.
thereby sustained injuries from which he after-
wards died. On demurrer : — Held, that the decla-
ration sufficiently shewed that the machine was
set in motion hy the defendants' negligence, and
that it therefore disclosed a cause of action, al-
though there was no allegation that G. W. was
ignorant of the dangerous and defective character
of the machine. — Semble, per Martin, B. The
defendants would, under the circumstances alleged,
be liable, even if the machine had been set in
motion by a stranger. WATLING v. OASTLEU. 73
2. Negligence — Licensee — Invitation —
Customer.^ At the defendants' station at C. it
was the practice to unload coal waggons by shunt-
ing 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 nagged patli 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 wnggon, and descended onto the flagged path.
The flag he stepped on gave way, and lie 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 plain-
tiff 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.
HOLMES v. NORTH EASTERN RY. Co. Ex. Ch. 123
EVIDENCE TO VARY WEITTEN CONTRACT—
Evidence — Written Agreement — Parol Variation —
Collateral Agreement.} The respondent agreed to
hire of the appellant certain grass laud on the
terms of a lease which was to be signed at some
future time. The lespondent, having entered on
the land, found it was overrun with rabbits, 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 re-
spondent 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 agreement, and asked the
jury to say whether it liad 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 misreception of evidence :
— Held, that the parol agreement was collateral to
the written lease, and that the evidence was
properly admitted. MOKGAN v. GRIFFITH - 70
EXECUTION— Bankruptcy — Priority - 228
See SEIZURE UNDER Fi. FA. 2.
EXECUTION— continued.
- Fi. fa. — Seizure. ] .
See SEIZURE UNDER Fi. FA.
EXEMPTION FROM DUTY -
See STAMPS.
EXTRA COSTS— Indemnity -
See INDEMNITY AGAINST COSTS.
FEE WITHOUT WORDS OF LIMITATION— Will
before 1838.] 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 "VV. P. the sum of 51. 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. PICKWELL v. SPENCEU.
[190
FI. FA— Seizure - - 20S
See SEIZURE UNDER Fi. FA. 1.
- Seizure— Bankmptcy — Priority - 228
See SEIZURE UNDER Fi. FA. 2.
FICTITIOUS ORDER— Delivery— Carrier - 3G
See MISDELIVERY BY CARRIER.
FORGERY— Ratification - 89
See RATIFICATION OF FORGERY.
FRAUD — Compulsory reference - - 224
See MATTER OF " MEKE ACCOUNT."
FREIGHT — Payment on account 20, Ex. Ch. 319
See PAYMENT ON ACCOUNT OF FREIGHT.
FULL AND COMPLETE CARGO— Charterparty—
" Baltic " printed Rates — Cargo of " Oats or other
lawful Mercliandise.''~\ By a charterparty the
defendant, the charterer, undertook to lead 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. 6cZ. 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 plaintiffs 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 being "lawful merchandise" within the
meaning of the charterparty, the defendant had
fulfilled his contract by unloading a full and com-
plete cargo of those articles, and, therefore, was
not, on the true construction of the charterparty,
liable for the additional freight claimed by the
plaintiffs as upon a full cargo of oats. THE SOUTH-
AMPTON STEAM COLLIERY COMPANY v. CLARK.
Ex. Ch. 53
HEIRS AND ASSIGNS - -
See RULE IN SHELLEY'S CASE.
HIGH BAILIFF— Interpleader -
See COUNTY COURT JURISDICTION.
- 291
Ex. VOL. VI.]
INDEX.
•117
ILLNESS — Excuse for non-performance of con-
tract - - 269
See CONTRACT FOR PERSONAL SERVICES.
INCOME-TAX— Liability of focal Coal Dues—
Hale or Duty— 5 & G Viet. c. 35, Scheds. (A), (7)).]
By 13 Geo. 3, c. 34, a power was given to Improve-
ment Commissioners for Brighton, to levy a duty
•of Gd. on every chaldron of c«ml lauded on the beach
or brought into the town, for the purpose of erect-
ing and maintaining groyns, &c., against the sen.
By subsequent Acts the duty was continued and
increased, and by G Geo. 4, c. clxxix. it was, to-
gether 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,
nnd the maintenance of groyns and other sea
works: — Held, that the corporation (who had suc-
ceeded to the rights of the commissioners) were
liable to pay income-tax in respect of the coal duty.
ATTORNEY-GENERAL r. BLACK - 78
2.
Liability of Local Coal Dues — Rate or
Duty— 5 & G Viet. c. 35—Scheds. (A*) and (/>)]
By 13 Geo. 3, c. 34, a power was given to Improve-
ment 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) wore liable to pay
income-tax in respect of the coal duty. ATTORNEY-
GENERAL v. BLACK j . - - Ex. Ch. 308
INDEMNITY— Costs - 43
See INDEMNITY AGAINST COSTS.
INDEMNITY AGAINST COSTS— Contract of In-
demnity— Taxed Cods — Extra Cost*.] In 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 cove-
nants 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 defending 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 Ixith the extra costs paid by him to his
attorney and the taxed costs. HOWARD r. LOVE-
GUOVE- _____ 43
INFANCY— Disability - - - 129
See DISABILITY.
INJUNCTION— Admiralty Court - 4
See ORDER OF ADMIRALTY COCRT.
INTERPLEADER— County court - 15
See COUNTY COURT JURISDICTION*.
INVITATION— Railway company Ex. Ch. 123
See EVIDENCE OF NEGLIGENCE. _.
JUDGE, PROVINCE OF - 89
Si-e RATIFICATION OF FOKGEUY.
JURISDICTION— Costs 35
Sec COSTS OF CASE SENT TO COUNTY
COURT.
JURY. PROVINCE OF 89
See RATIFICATION OF FORGERY.
LAND, MONEY TO BE LAID OUT LN— Lvjraoy
duty - - 286
See LEGACY DUTY.
LAND— Xegli gent user - Ex. Ch. 123
See EVIDENCE OF NEGLIGENCE. '2.
LANDLORD AND TENANT — Collection of
water - - 217
See COLLECTION OF WATER.
1 Covenant to repair - 25
See COVENANT TO REPAIR.
LEASE — Assignment 32
See ASSIGNMENT OF LEASE.
LEASE, SALE OF— Defect of title— Measure of
damage - - - 59
See DEFECT OF TITLE.
LEGACY DUTY— :!G Geo. 3,o. ">_, «. 19— Money to
IH' 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 IKJ conveyed to the uso
of C. (his eldest son", for life, remainder toC.'s n'i>t
and other sons in tail male, rcmaind< r to J. (Ids
second son) for life, remainder to J.'s iirst 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 grandnophew of the testator,
and heir-at-law of the testator and of C., J., and
| g. -.—Held, that under s. 19 of 3G Geo. .'}. c. 5_, duty
I was payable by E. at 5 ]>er cent, as on a bequest
, from .S. DE LANCEY r. Tin: QUEEN 286
LETTER OF ALLOTMENT— Comfm »'j—A Untment
I of Sh<ir<-8.~\ The defendant applied for shares in
! the plaintiff's company; Chares were allotted to
1 him, and a letter of allotment was po>ted to his
address, but was never received by him: — //</</,
: that the defendant was not a shareholder. Ihnilop
• v. Hi(j(jins (1 H. L. C. 1181 comment' d on. THE
BRITISH AND AMERICAN TELEGRAPH COMPANY.
v. COLSON - 108
LETTER POSTED BUT NOT RECEIVED 108
•Sec LETTER UF ALLOTMENT.
LICENSEE— Railway company - Ex. Ch. 123
See EVIDENCE OF NEGLIGENCE. -.
LIMITATION, WORDS OF— Fee without - 190
See FEE WITHOUT WORDS <T LIMITATION.
LOCAL COAL DUES -Income-tax 78, Ex. Ch. 308
See INCOME-TAX.
MACHINERY, DEFECTIVE— Negligence 73
Sec EVIDENCE OF NEGLIGENCE. 1.
MALICE Bankruptcy— Adjudication 329
S';e MU.ICIOUSLY ritocuiitNG ADJUDICA-
TION.
418
IXDEX.
[Ex. VOL. VI.
MALICIOUS PROSECUTION— Appeal - 87
See COUNTY COUHT APPEAL.
MALICIOUSLY PROCURING ADJUDICATION—
Bankruptcy — Reasonable and probable Cause —
Debtor's Summons — Act of Bankruptcy — Stay of
Proceedings — Bankruptcy Act, 1869, s. 6, subs. 5,
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, sind 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 secxirities 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 bank-
ruptcy, stating as the act of bankruptcy the failure
of i he defendant within seven days after the ser-
vice of the debtor's summons 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 bank-
rupt; the adjudication was confirmed on appeal
by the Chief Judge in Bankruptcy, but was after-
wards 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 the
seven days, was drawn up by him. — In an action for
maliciously, and without reasonable and probable
cause, procuring 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
bankruptcy, that the proceedings in bankruptcy
were stayed until an appointment had 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 Clcasby, B.,
that, an application to dismiss the debtor's sum-
mons having been made and a stay of proceedings
ordered, no act of bankruptcy was committed by
the plaintiff in not paying, securing or compound-
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, lie
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
Avhich '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. 6 of the Bankruptcy Act, 1309,
an act of bankruptcy was committed at the expira-
tion of the seven days from the service of the sum-
mons, the plaintiff not having paid, secured, or
MALICIOUSLY PROCURING ADJUDICATION—
continued.
compounded for the debt ; and that, at any rate,
| having regard to the decisions of the county court
1 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., quaere, whether under the present
bankruptcy law, as regulated by the Bankruptcy
Act, 1869, any action can be maintained for pro-
curing an adjudication of bankruptcy. — By Bram-
well, B., no action is maintainable where the want
1 of reasonable and probable cause is only error in
point of law ; and — Qutere, whether, although no
adjudication ought to have been made pending
the stay, the creditor had not a right to present
a petition. JOHNSON v. EMERSON AND SPARROW
[329
MASTER AND SERVANT— Defective machinery
See EVIDENCE OF NEGLIGENCE. 1. [73
MATTER OF " MERE ACCOUNT "—Compulsory
Eeference— 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
delivered, during a period of nearly five years, at a
price of 2s. 5d. 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, compul-
sorily 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 oy a jury. The plaintiffs applied to rescind
this order, alleging that they proposed at the trial
to attempt to prove that the defendant had been
guilty of fraudulent conduct by the secret abstrac-
tion 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 be-
cause 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. THE BIR-
MINGHAM AND STAFFORDSHIRE GAS COMPANY r.
KATCLTFF - 224
MEASURE OF DAMAGE — Contract for sale of
lease— Defect of title - 59
See DEFECT OF TITLE.
"MERE ACCOUNT" - - - - 224
See MATTER OF " MERE ACCOUNT."
MISDELIVERY BY CARRIER— 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., ad-
dressed there under that name. On the arrival of
the goods at Glasgow, the defendants, following
the course of business usual with carriers between
Ex. VOL. VI.]
INDEX.
41!)
MISDELIVERY BY CARRIER— continual.
Liverpool and Glasgow, sent a notice to the address
nppearing on tlic goods, requesting their removal,
and stating that the notice must be produced, in-
dorsed as a delivery order. This notice was re-
ceived by H., who indorsed it " C. Tuit & Co.,"
and upon presenting it so indorsed, obtained de-
livery of the goods. In an action against the
defendants, ns carriers, for misdelivery : — Held,
that the defendants, having followed the usual
ORDER OF ADMIRALTY COURT— continued.
matter. The 24 Viet. c. 10, s. !.'{, 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 tho
instance of tho defendants, stopping the present
action, which was brought against them to recover
damages for loss of the plaintiffs' goods in conse-
quence of the sinking of n ship belonging to the
defendants. The defendants thereupon applied to
course of business, which must be read as part of , this Court for a rule to stay, but the Court declined
Ihe plaintiffs' directions, had obeyed the plaintiffs'
•directions, and were not liable. M'KfiAN r. M'lvoB
[36
MISTAKE IN TELEGRAM— Principal and Agent
— Telegraph Clerl:.~] The defendant wrote a mes-
sage 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 pre-
vious communication with the defendant to the
•effect that be 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 there-
tore the plaintiffs were not entitled to recover tlie
price of more than three rifles. HENKEL v. PAPE 7
MISTAZE OF FACT— Payment (Ex. Ch.) 243
See VOLUNTARY PAYMENT.
HONEY TO BE LAID OUT IN LAND — Legacy
duty -
See LEGACY DUTY.
MUTUAL DEALINGS— Bankruptcy
See ANNULLING BANKRUPTCY.
- 286
- 279
73
NEGLIGENCE— Defective machinery
See EVIDENCE OF NEGLIGENCE. 1.
Railway company - Ex Ch. 123
See EVIDENCE OF NEGLIGENCE. 2.
NOTICE— Repair 25
See COVENANT TO REPAIR.
NOTICE OF WRIT DELIVERED TO SHERIFF
See SEIZURE UNDER Fi. FA. 1. [203
"OATS OR OTHER LAWFUL MERCHANDISE"
[Ex. Ch, 53
Sec FULL AND COMPLETE CARGO.
" OCCUPATION "—Bill of sale 1
See APPARENT POSSESSION.
OCCUPIERS OF UPPER AND LOWER FLOORS—
Water - - 217
See COLLECTION OF WATKR.
ORDER OF ADMIRALTY COURT— Practice— Sift //-
iny Proceedings — Siqwrior Court of Lair or Equili/
—Injunction— C. L. 1'. Act, 1852, *>. 220.] 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 en-
tertain proceedings at the owner's suit to determine
and distribute among the various claimants the
amount of such liability irith power to stop all
<trtion3 or suits in relation to the same subject
VOL. VI— Ex.
to interfere, being of opinion that the Common
Law Procedure Act, 1852, s. 220, was not appli-
cable to any case except where an order stopping
an action or suit had l»cen issued by a " superior
court of law or equity," and seeing no reason to
exercise their discretionary power at common law
of staying proceedings. MILBURN r. THE LONDON
AND SOUTH WESTERN RAILWAY COMPANY - 4
ORDER FOR DELIVERY— Carrier -
See MISDELIVERY OF CARRIER.
- 36
PAROL EVIDENCE— Variation of written contract
[70
See EVIDENCE TO VARY WRITTEN CON-
TRACT.
PARTITION OF SHARES— Stamps - - 101
See STAMPS. 2.
PARTNER — Authority — Payment - Ex. Ch. 243
See VOLUNTARY PAYMENT.
PAYMENT— Freight - - 20. Ex. Ch. 319
See PAYMENT ON ACCOUNT or FREIGHT.
Mistake of fact - - Ex. Ch. 243
S<e VOLUNTARY PAYMENT.
— Stranger - - 124
Si-e DISCHARGE OF DEBTOR.
PAYMENT ON ACCOUNT OF FREIGHT— Ship
and Shipping — -CJiarterparty.] The plaintiff char-
tered a vessel to the defendants for a homeward
voyage from Calcutta, with an option to the de-
fendants to send tho vessel on an intermediate
voyage at a freight therein mentioned, " 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 l>c deducted,
together with 1J- per cent, eommis.-ion on the
amount advanced and cost of insurance, from
freight on settlement thereof, and the remainder
on light delivery of the cargo at port of discharge)
in cash as customary." By another clause tho
master was to " sign bills of lading at any current
rate of freight required without prejudice to tho
ehartcrpurty : but not tinder chartered rates, ex-
cept the difference is paid in cash." The de-
fendants elected to send the voscl on tho inter-
mediate voyage, and paid the 12001., lint induced
the, master, whom they required t<> .-ign bills of
lading at a rate below the chartered rate, to jxis-tjioiio
payment of the difference till the cargo was com-
plete; the difference amounting to a less sum tlum
12007., they then claimed to l.avo satisfied their
obligation by the 12007. already paid, and refused
further payment. The vessel was lo^t on her way
out to sea. In an action for the difference : — Held,
that the plaintiff was entitled to the 12007., and
also to the difference. BYRNE r. SCHILLER - 20
2 O
420
INDEX.
[Ex. VOL. vr_
PAYMENT ON ACCOUNT OF FREIGHT -con*.
2. Ship and Shipping — Charter part y.]
Payments made iu advance on account of freight
cannot be recovered back, although the vessel is
lost. The plaintiff chartered a vessel to the de-
fendants for a homeward voyage from Calcutta,
\vith 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 : —
1200Z. in rupees to be advanced the master by the
freighters' agents at Calcutta against his receipt,
and to be deducted, together with 1J 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
tinder 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 belowthe 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 (affirm-
ing the judgment of the Court below), that the
plaintiff was entitled to recover. BYRNE v.
SCHILLER - - Ex. Ch. 319
PERSONA DESIGNATA— Will - - 291
See RULE IN SHELLEY'S CASE.
PERSONAL SKILL— Contract - 269
See CONTRACT FOR PERSONAL SERVICES.
PLEADING— Negligence - - 73
See EVIDENCE OF NEGLIGENCE. 1.
PRACTICE (COMMON LAW) -Compulsory refer-
ence - - - 224
See MATTER OF " MERE ACCOUNT."
Costs 35
See COSTS OF CASE SENT TO COUNTY COURT.
County court appeal - - 87
See COUNTY COURT APPEAL.
— Staying proceedings - - 15
See COUNTY COURT JURISDICTION.
— AVrit for service abroad - 46
Sea CAUSE OF ACTION.
PROOF FOR CONTINGENT LIABILITY— con*.
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 trans-
fer 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 1861, antV
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 ob-
tained his discharge : — ffeld, that the defendant
was not discharged from his liability on the bond.
KENT v. THOMAS - - 31&
PROVINCE OF JUDGE - 89
See RATIFICATION OF FORGERY.
PROVINCE OF JURY - - 89-
See RATIFICATION OF FORGERY.
RAILWAY COMPANY— Negligence Ex. Ch. 125
See EVIDENCE OF NEGLIGENCE.
RATE OR DUTY — Income-tax
See INCOME-TAX.
PRESCRIPTION— Disability -
See DISABILITY.
- 129
89
PROMISSORY NOTE— Forgery— Ratification
See RATIFICATION OF FORGERY.
PROOF — Bankruptcy — Contingent liability 312
See PROOF FOR CONTINGENT LIABILITY.
PROOF FOR CONTINGENT LIABILITY— Bank-
ruptcy Ai-.t, 1840, ss. 177, 178.] A bond for 1000Z.
was executed by the defendant to the plaintiff,
subject lo a condition, which recited an agreement
by 'the defendant to sell to the plaintiff 1100/.
consols, being a sum to which the defendant's
wife was entitled on the deatli 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 defendant's default or otherwise, never
78, Ex. Ch.
89
RATIFICATION— Forgery -
See RATIFICATION OF FORGERY.
Payment by stranger - - 124.
See DISCHARGE OF DEBTOR
RATIFICATION OF FORGERY— Forged Signa-
ture 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 20?., dated the 7th of No-
vember, ISGi), and purporting to be made in favour
of the plaintiff, by the defendant and Jones. While?
the note wa.s current the defendant signed the fol-
lowing memorandum, in order to prevent the pro-
secution 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 20?.,
bearing my signature and Richard Jones' in favour
of Mr. Brook [the plaintiff]." At the trial of an.
action against the defendant on the note, the judge
ruL.d that this memorandum was a ratification,
and directed the jury that the only question for
them was, whether the defendant signed it. It
being admitted that he did, a verdict was entered
for the plaintiff :— Held (per Kelly, C.B., Channel!'
and Pigott, BB., Martin, B., dissenting), a inip-
diroction :— Per Kelly, C.B., Channell and Pigott.
BB., that the memorandum could not be con-
strued as a ratification, inasmuch as the act it
professed to ratify was illegal and void and in-
capable 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 lo prosecute Jones, and was there-
fore void as founded on an illegal consideration. —
Semitic, that the memorandum being ambiguous
in its terms, it should have been left to the jun-
to say what its real meaning was when looked^ at
in connection with the circumstances under which
it Avas signed. BROOK v. HOOK - - 88-
Ex. VOL. VI.]
INDEX.
•I I'll
SEASONABLE AND PROBABLE CAUSE— A p-
peal - 87
See COUNTY COURT APPEAL.
REFERENCE TO ARBITRATION— Costs 200, 213
See COSTS UNDER COUNTY COURT ACTS.
[1, 2.
REPAIR, COVENANT TO - 25
See COVENANT TO KEPAIR.
REVERTING OF PROPERTY TO BANK-
RUPT - - 279
See ANNULLING BANKRUPTCY.
RIGHT OF ACTION— Collection of water 217
See COLLECTION OK WATER.
RULE IN SHELLEY'S CASE— Will— Heirs " and
Assiyns " — Persona l)eri<jnata— Ultimate Limita-
tions — Child "born 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 in-
solvency, with remainder to her use for life, re-
mainder 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 unmarried."
His will recited the settlement, and the limita-
tions contained in the will substantially coincided
with those contained in the settlement. The ul-
timate 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 assujns of
E. A. V. (the daughter) as if she had continued
sole and unmarried," with remainder to the tes-
tator'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 Hred until the age of twenty-three.
He predeceased the testator, who died in 1S4'.».
The husband of E. A. V. became insolvent in the
following year. E. A. V. died in lSu'8. In eject-
ment by the plaintiff, who filled the double cha-
racter 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, as-
suming it to have taken effect, the plaintiff being
the heir of E. A. V., ns if she had remained sole
and unmarried, was entitled to recover as persona
designate.— Quested v. .V<Y7ie«(24 L. J. (Ch.; 722),
commented upon. BROOKMAN r. SMITH - 291
RULE TO AMEND CASE— County court
appeal - 87
See COUNTY COURT APPKAI,.
SALE OF LEASE— Defect of title— Measure
of damage - 59
See DEFECT OF TITLE.
SALE OF SHARES - Ex. Ch. 132
See CUSTOM OF STOCK EXCHANGE. 2.
SALE UNDER FL FA. — Bankruptcy —
Priority - - 228
See SEIXURE UNDER Fi. FA. 2.
SEIZURE— Fi. fa. - 203
See SEIXURE UNDER Fi. FA. 1.
SEIZURE AND SALE— Fi. fa. -Bankruptcy
— Priority - - 228
See SET/ i RE UNDER Fi. FA. 2.
SEIZURE UNDER FI. FA.— X//< ,-,'/- »/:,,,v—
" Actual Seizure " — Hill of Sale bonti ti'l<- anil fur
Valuable Consideration — Xi,tice of )!"/•// hurhuj
been delivered to tin- Sheriff to br esi'i-uli-d — l'.) <v
20 Viet. c. 1>7, x. 1.] An execution-debtor wns
possessed of a mansion-house and grounds, and
I also of a farm, which, with the exception of two-
1 outlying fields, adjoined the grounds and formed
1 part of one block with them. The farm was in
' the debtor's occupation, although the accounts
were kept distinct. The farmhouse wns a mile
distant from the mansion-house in a direct line-.
On the 1'Jtli of May. a writ of fi. fa. was executed
at the mansion-house by the under-sheriff, who
informed the JXTSOIIS in charge tin-re, including
the steward of the cslate, that all the goods on
1 the estate were seized ; and a man wns left in
possession. No act of seizure was done at the
farmhouse or upon the f;irm on that day, the undcr-
sheriff intending what he had done to l>e a seizure
of the whole ; but on the following dav a man
was put in jiosscssion at the farmhouse. The iroods
on the fnrm were claimed by assignees under a
bill of sale, made for an antecedent debt, and for
; the purpose of Diving it a preference over the-
i execution, and which was executed on the evening
> of the littli after the seizure at the mniisioii-hon.se,
was completed. At the time of the ex»cution of
the bill of sale, it wns known to the solicitor of
', the assignees that the judgment creditor had
• threatened to seize, and that a writ of li. fa. on
1 the same judgment had been executed in smother
county; and it was expected by him. but not
known, that a writ had been delivered to the
sheriff of the county in which the goods lay : —
Hell, that what was done on the I'.ith of May
• amounted to an "actual seizure " of the goods on
the farm and at the farmhouse, within the meaning
of 10 & 20 Viet. c. !>7, s. l.—S, mil.', that the bill
of sale was bona fide and fora valuable considera-
tion 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 de-
livered to the sheriff to he executed within the
proviso in the- same section.— <^r«r/r. whether
notice of the writ issued in another county was
notice within the meaning of the provis
SToNi: r. I'ADWICK
2. — - HanJ;ni)itci/ Act. 1S''!> — I'.
Seizure and S(d<' — Seizure In fort' A>'t
ruptcy— Sale after Adjudication. ~\ An
creditor, for a sum le.-s than ."id/., wh
the goods of a bankrupt before tin1
of any act of bankruptcy is entitled t
<JLAI>-
203
f
Jinn];-
cution
has seized
.nnn.ittiug
the pro
ceeds of them as against the trustee, although
the adjudication is prior to the snl>\ — ].'.r juirti-
Vein-fit (Law Hep. 10 E<j. 411J) di.-euss. d. SI.ATKK
r. PIMIEU - - 228
SET-OFF — Conijwiiii—Wiiiiliiin-ujt iiinb-r >'»y^r-
rision — Comjuntu-x Act, 1SC2 2.~> ,(• 2(5 Viet. .-. S;i).
<w. ST. 101, i:M). i:il.] Where a limited company.
being insolvent, passes a resolution to \\in I up
voluntarily, ami an order i< afterwards in ide to
continue the winding-tip under the supers iM"!i of
the Court, in an action afterwards brought by the
liquidator in the name of the company against a
422
INDEX.
[Ex. VOL. VI.
SET-OFF — continued.
member, a debt due from the company to the de-
fendant previous to the resolution cannot be set off
against a debt incurred by the defendant to the
company after the resolution. SANKEY BROOK
•COAL COMPANY v. MARSH - - 185
Bankruptcy - - 279
See ANNULLING BANKRUPTCY.
SHARES— Allotment - - - - 108
See LETTER OF ALLOTMENT.
. Sale of— Default of broker - - 255
See CUSTOM OF STOCK EXCHANGE.
< Sale of— Stock Exchange - Ex. Ch. 132
See CUSTOM OF STOCK EXCHANGE.
Transfer — Stamps - - 101
See STAMPS. 2.
SHELLEY'S CASE— Eule in— Will - - 291
See KULE IN SHELLEY'S CASE.
SHERIFF— Fi. fa.— Seizure - - 203
See SEIZURE UNDER Fi. FA. 1.
•SHIP — Agent — Commission - 9
See COMMISSION "INWARDS AND OUT-
• Charterparty — Cargo - - Ex. Ch. 53
See FULL AND COMPLETE CARGO.
Freight - - 20, Ex. Ch. 319
See PAYMENT ON ACCOUNT OF FREIGHT.
STAMPS — Exemption from Duty — Benefit Build-
ing Society — Drafts by Members on Society — 10
Geo. 4, c. 56, s. 37—6 * 7 Fm. 4, c. 32, s. 4.] By
the rules of a benefit building society, its members
were holders either of completed shares of 30Z., 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 sufficient to pay
all the members wishing to withdraw, they were
to be paid in rotation according to the priority of
their notices. By the practice of the society,
members holding completed shares were allowed
to withdraw only whole shares, but members hold-
ing 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 uncom-
pleted shares. The mode of withdrawing shares,
Avhether completed or imcompleted, 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 bearer. The drafts were
usually paid within a week of the notice to with-
draw. Drafts payable to bearer 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 Win. 4, c. 32, s. 4, and 10 Geo.
4, c. 56, s. 37. ATTORNEY-GENERAL v. GILPIN 193
2. Transfer of Shares — Partition of Shares
• — 55 Geo. 3, c. 184, Sched. tit. Transfer.1] Four
residuary legatees, of whom two were executors, by
STAMPS— continued.
a deed, made in pursuance of an arrangement for
specifically dividing among them certain parts of
the testator's personal estate, transferred and re-
leased to one another shares in nine companies
forming part of the residuary estate, so as to rest
in each of the four a portion of the shares in each
of the comp*anies, and in one of them all the shares
in the ninth company : — Held, that the deed re-
quired only four transfer stamps under 55 Geo. 3,
c. 184, Sched. tit. Transfer. FREEMAN ?•. COM-
MISSIONERS OF INLAND REVENUE - - 101
STATUTES.
13 Geo. 3, c. 34 - 78, Ex. Ch. 308
See INCOME-TAX.
36 Geo. 3, c. 52, s. 19 - - 286
See LEGACY DUTY.
55 Geo. 3, c. 184, Sched. tit. « Transfer " 101
See STAMPS.
4 Geo. 4, c. 36. s. 57 - - - 193
See STAMPS.
6 Geo. 4, c. clxxix. - - 78, Ex. Ch. 308
See INCOME-TAX.
3 & 4 Wm. 4, c. 27, s. 16 - - 129
See DISABILITY.
6 & 7 Wm. 4, c. 32, s. 4 - - - 193
See STAMPS.
5 & 6 Viet. c. 35, Sched. (A.), (D.) - 78,
Sse INCOME-TAX. [Ex. Ch. 308
12 & 13 Viet c. 10G, ss. 177, 178 - - 312
See PROOF FOR CONTINGENT LIABILITY.
15 & 16 Viet c. 76, s. 18 - - 46
See CAUSE OF ACTION.
s. 226 - 4
See ORDER OF ADMIRALTY COURT.
17 & 18 Viet. c. 36, ss. 1, 7 - - 1
See APPARENT POSSESSION.
c. 104, s. 514 - 4
See ORDER OF ADMIRALTY COURT.
c. 125, s. 3 - - - 224
See MATTER OF " MERE ACCOUNT."
19 & 20 Viet. c. 97, S.I - - - 203
See SEIZURE UNDER Fi. FA. 1.
24 Viet. c. 10, s. 13 4
See ORDER OF ADMIRALTY COURT.
25 & 26 Viet. c. 89, ss. 87, 101, 130, 131 185
See SET-OFF.
30 & 31 Viet. c. 142, s. 10 - - - 35
See COSTS OF CASE SENT TO COUNTY
COURT.
Viet. c. 142, s. 5 - 200
See COSTS UNDER COUNTY COURT ACTS.
[1,2.
Viet. e. 142, s. 31 - - 15
See COUNTY COURT JURISDICTION.
32 & 33 Viet. c. 71, s. 6, subs. 17 - 329
See MALICIOUSLY PROCURING ADJUDICA-
TION.
32 & 33 Viet. c. 71, ss. 39, 81 279
See ANNULLING BANKRUPTCY,
STATUTORY DUTY— Water Company— Water-
works Clauses Act, 1847, s. 42 — Liability for not
keeping Pipes charged icith Water at the Statutory
Ex. VOL. VI.]
INDEX.
STATUTORY DUTY— continued.
Pressure.'] By s. 42 of the Waterworks Clauses
Act, 1847, the undertakers nre to keep their pipes
to which fire-plugs nre fixed, constantly charged
with water at a curtain pressure, and are to allow
all persons at all times to use the same for extin-
guishing fire without compensation. By s. 43, a
penalty of 10/., recoverable by a common informer,
is imposed en the undertakers for the neglect of
(amongst others) this duty. — On demurrer to a
declaration, by which the plaintiff claimed da-
mages against the defendants (a water company)
for not keeping their pipes charged as required f>y
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
•rood. ATKINSON v. NEWCASTLE AND GATESHKAD
WATERWORKS COMPANY - 404
STAYING PROCEEDINGS— Interpleader - 15
See COUNTY COURT JURISDICTION.
STOCK EXCHANGE— Custom - Ex. Ch. 132
See CUSTOM OF STOCK EXCHANGE.
Custom — Default of broker - - 255
See CUSTOM OF STOCK EXCHANGE.
SUPERIOR COURT OF LAW OR EQUITY —
Order - 4
See ORDER OF ADMIRALTY COURT.
VOLUNTARY PAYMENT— continued.
the defendants to believe that he hud authori/ei
1 it, but they did in fact believe he had. — l.'pon th
, dissolution of the partnership, U appeared froi
I the accounts that the firm owed the defendant
i more than aOOO/., and the plaintiff accepted bill
for the whole balance apparently due. These bill
were handed to the defendants for the purjiosc <:
i being discounted. Before they arrived at maluritj
j the plaintiff discoveied the application by tli
| defendants of the 1000Z. to Woomough's piivat
; debt, lie nevertheless met the bills, at the -am
, time informing the defendants that he did H
'• under protest, and only to save his father's crcdi
whose name was on the bills as drawer. In a
• action to recover the 1000/., as money paid nude
a mistake of fact : — Ileld, first, that the defendant
could not retain the money as against Wwlnough'
private debt, the plaintiff never having authorize
its appropriation t •> that debt, nor conducted him
self so as to give them reasonable grounds fn
believing that he had ; and, secondly, that th
plaintiff having been ignorant of the r< al fact
of the case when the bills were drawn, had n<i
precluded himself from recovering by meetin:
them at maturity when ho had discovered tli
, facts, inasmuch as his so doing could not b
regardetl as a voluntary act. KENDAL v. WOOD
[Ex. Ch. 24
SUCCESSIVE DISABILITIES - 129
See DISABILITY.
TAXED COSTS— Indemnity - 43
See INDEMNITY AGAINST COSTS.
TELEGRAM— Mistake - 7
Sec MISTAKE IN TELEGRAM.
TITLE, DEFECT OF— Measure of damage - 59
See DEFECT OF TITLE.
TRANSFER OF SHARES— Stamps - 101
See STAMPS. 2.
UPPER AND LOWER FLOORS, OCCUPIERS OF
— Water - - 217
See COLLECTION OF WATER.
USAGE OF STOCK EXCHANGE Ex. Ch. 132, 255
See CUSTOM OF STOCK EXCHANGE.
VALUABLE CONSIDERATION— Bill of sale 203
See SEIZURE UNDER Fi. FA. 1.
VENDOR AND PURCHASER— Breach of contract
—Defect of title - - 59
See DKFECT OF TITLE.
VOLUNTARY PAYMENT — Partners — Authority
of one Partner to land another — Mistake of Fart. \
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 reque.-t 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 him-
self in such a manner as to make it reasonable for
WATER— Collection of - 21
See COLLECTION OF WATER.
WATER COMPANY— Cause of action - 40
See STATUTORY DUTY.
WILL — Construction - - 19
See FEE WITHOUT WORDS OF LIMITATION
Money to be laid out on land — Legacy dut
See LEGACY DUTY.
Rule in Shelley's Case -
See RULE IN SHELLEY'S CASK.
WINDING-UP OF COMPANY— Set-off
See SET-OFF.
WORDS— "Actual seizure "
See SEIZURE t NDF.R Fi. FA. 1.
" Apparent possession "
Si'e APPARENT POSSESSION.
" Born or to be born " -
Sec RULE IN SHELLEY'S CASK.
— " Cause of action "
Sre CAUSE OF ACTION.
''Costs of reference" -
[28<
29
20
2 i :
See COSTS \ NIT.K COUNTY CHUHT Arrs. '2
Heirs and assigns '' 29!
See Ri LI: IN Snr.i.i KV'S CA.-K.
Inwards and outwards '' |
Sec COMMISSION " INWARDS AND <>i T
WARDS."
Mere account "
Sec MATTER OF
22
•2 P
Ml.KK An <HNT."
Oats or other lawful merchandise" Ex. Ch
Se? FULL AND COMPLETE CAI;C;U. [5!
3
424 INDEX.
[Ex. VOL. VI.
WORDS — continued.
" Occupation " - - 1
See APPARENT POSSESSION.
"Inverting" - - 279
See ANNULLING BANKRUPTCY.
WORDS OF LIMITATION, FEE WITHOUT 196
See FEE WITHOUT WORDS OF LIMITATION.
WEIT DELIVERED TO SHERIFF— Notice 203
See SEIZURE UNDER Fi. FA. 2.
WRIT— Service abroad - - 46
See CAUSE OF ACTION.
WRITTEN DOCUMENT— Construction - 89
See RATIFICATION OF FORGERY.
END OF VOL. VI.
LONDON I PRINTED BY WILLIAM CLOWES AND SONS, STAMFORD STREET
AND CHARING CRO3*.
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