1867 May 11.

FALCONAR v. MCKENZIE.

Trader-Debtor Summons—Bankrupt Law Consolidation Act, 1849 (12 & 13 Vict. c. 106), s. 86-Costs-Construction.

Where a creditor, having taken out a trader-debtor summons against his debtor, and filed an affidavit of debt under s. 78 of 12 & 13 Vict. c. 106, recovers in an action for the debt less than the amount sworn to in the affidavit, and the defendant applies to the Court for an order for costs under s. 86, the Court, on being satisfied of the absence of reasonable and probable cause for swearing to the amount in the affidavit, is bound to make the order, no discretionary power to withhold it being given by the section.

THE plaintiff took out a trader-debtor summons against the defendant, under s. 78 of the Bankrupt Law Consolidation Act, 1849 (12 & 13 Vict. c. 106), making an affidavit of a debt exceeding 1007. for beer supplied. The defendant denied the debt, and the plaintiff brought this action, in which he recovered only 647., as it appeared that part of the debt was covered by bills still running. A rule having been obtained, calling on the plaintiff to shew cause why the defendant should not have his costs allowed, under s. 86,

Temple, Q.C., and Gainsford Bruce, shewed cause. They contended that s. 86 requires two conditions to be satisfied before the defendant can claim his costs: first, "provided that it shall be made appear to the satisfaction of the Court" that the plaintiff "had not any reasonable or probable cause for making such affidavit of debt in such amount as aforesaid;" and secondly, "provided such Court shall thereupon, by rule or order, direct that such costs shall be allowed to the defendant." Admitting that the first condition would be satisfied, they contended that the second made the allowance of costs discretionary in the Court; and they proposed to shew circumstances which made it unfit that the defendant should in this case have costs.

Manisty, Q.C., in support of the rule, was not called on.

BRAMWELL, B. We are both of opinion that we have no discretion in the matter, and that the rule must be made absolute. No doubt the repetition of the word provided gives some ground for the plaintiff's contention; but it is evidently used carelessly, and only as making the "rule or order" a necessary condition to

entitle the defendant to his costs, and to the incidental advantages

1867

v.

MCKENZIE.

given him by the section; otherwise the act would have said FALCONAR that the costs should be allowed, if it appears to the satisfaction of the Court that there was no reasonable or probable cause for the affidavit, and if (speaking negatively) no reason appears why they should not be allowed. Moreover, the statute has given no rule to guide our discretion. Are we to determine the question by reference to the conduct of the defendant in the action, or in any other matter, or to the fact of one party being rich and the other poor, or with reference to what circumstances are we to exercise our judgment? In the absence of any indication of such a rule, the words cannot mean more than that the Court, on being satisfied of the first point, shall thereupon allow the defendant his costs.

PIGOTT, B., concurred.

Rule absolute.

Attorneys for plaintiff: Pattison & Wigg, for J. B. Falconar, Newcastle-upon-Tyne.

Attorneys for defendant: J. & J. K. Wright, for W. A. Oliver, Sunderland.

MILNER v. RAWLINGS.

Deed under s. 192 of the Bankruptcy Act, 1861 (24 & 25 Vict. c. 134)—Execution

-Undertaking by Attorney.

The plaintiff issued execution, after notice that a composition deed under s. 192 of the Bankruptcy Act, 1861, was about to be registered by the defendant; the defendant's attorney gave notice of the same fact to the sheriff's officer, who withdrew on having the attorney's undertaking for the amount of the debt and costs, after refusing to withdraw on any other terms. At the time the undertaking was given the deed was in fact registered, and contained a release of all the creditors' "claims and demands." The defendant having paid to the sheriff the amount of the undertaking under protest, and the sheriff having paid the same into court, the defendant moved to have the money paid out to him :

Held, that the defendant was entitled to the money, inasmuch as the money represented the proceeds of the execution, and the plaintiff was not, at the time the undertaking was given, in a position in which he could have derived any benefit from the execution if it had been proceeded with.

ON the 15th of January the plaintiff commenced this action against the defendant under the Bills of Exchange Act, 1855. On

May 11.

1867

MILNER

V.

RAWLINGS.

the 25th the defendant's attorneys gave notice to the plaintiff's attorneys that the defendant had on that day executed a composition deed under s. 192 of the Bankruptcy Act, 1861; but the plaintiff proceeded with his action, signed judgment on the 29th, and on the same day issued execution. On the 30th the sheriff of Warwickshire levied on the defendant's premises, and advertised a sale for the 1st of February. The defendant's attor neys applied to the bailiff in possession to abstain from selling, but the bailiff declined to do so, unless they would give an undertaking to pay the debt and costs; and accordingly, at about halfpast seven P.M. on January 31, they gave the undertaking, and the officer then retired from possession and withdrew the handbills. The deed had in fact been already registered at two P.M. on the same day. It contained a release of "all claims and demands." In pursuance of the undertaking the defendant on the 4th of February paid to the officer the amount of the debt, costs, and poundage, with a protest that the plaintiff was not entitled to the money, and a notice that he should claim to have it returned. The sheriff took out an interpleader summons, on the hearing of which Martin, B., ordered that the sum of 351. 7s. 1d., being the amount paid to the sheriff after deducting his fees, should be paid into court; discharged the sheriff; directed that there should be no action; and ordered that the question between the plaintiff and defendant should be brought before the Court on special case or motion.

May 11. L. Kelly moved on behalf of the defendant for the payment of the money to him. First, the deed, which contains a release of all claims and demands, and which on its registration bound the plaintiff, was, at the time this undertaking was given, already registered. The plaintiff's execution was therefore gone (the words "claims and demands" being sufficient to release it: Bac. Abr. tit. Release (I.)), and there was no consideration for the undertaking. Secondly, the undertaking was obviously meant only to stand in lieu of and to preserve intact the rights of the parties as they existed at the moment when it was made, and it will follow their condition. Now, by s. 197 of the Bankruptcy Act, 1861, after the registration of the deed, all the rights of the creditors are

governed by the rules of bankruptcy. But by reason of s. 184 of the Bankrupt Law Consolidation Act (12 & 13 Vict. c. 106), which must, according to the decision in O'Brien v. Brodie (1), be construed strictly, and the policy of which is extended by s. 73 of the Bankruptcy Act, 1861, the execution here could not have profited the creditor, since the registration had already taken place when the undertaking was given, and before execution by seizure and sale. A sale even on the day advertised would have been too late, and the creditor must have repaid the money.

Macnamara shewed cause in the first instance. Admitting the positions alleged on the other side, the plaintiff is entitled to the money. The defendant must be taken to have paid it when the undertaking was given, and he or his agent then knew the facts, or, which is the same thing, had the means of knowledge; he cannot therefore now recover it back, even though he was not originally compellable to pay it: Boyle v. Blackstock. (2) But in fact there was a good consideration for the undertaking, for it purchased the withdrawal of the sheriff, and since at that time neither he nor the plaintiff had notice of registration, the execution was still "available," and the sheriff's act in proceeding with it would have been perfectly legal. In any case, it averted the injury of a sale, which could only have been prevented, if at all, by an application to the Court, and the relief of the defendant from the necessity of making this application was itself a sufficient consideration. But further, this money was paid to satisfy the attorneys' undertaking, and the cases shew that where an attorney has given an undertaking, the Court will enforce it, even though it would not be enforceable as an ordinary contract. Both points are illustrated by Atkinson v. Bayntun (3), and Butcher v. Steuart (4), where the alleged invalidity of an execution was held to be no answer to an undertaking by which the defendant was released from custody under it. The second is illustrated by Re Hilliard (5), where the undertaking was invalid under the Statute of Frauds; and by Hellings v. Jones (6), where an undertaking for payment of the plaintiff's costs, given on an agreement being made to enter

(1) Law Rep. 1 Ex. 302.

(2) 8 L. T. (N.S.) 641.

(3) 1 Bing. (N.C.) 444; see pp. 457-8.

(4) 11 M. & W. 857, at pp. 875-6.

(5) 2 D. & L. 919.

(6) 10 J. B. Moore, 360

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MILNER

v.

RAWLINGS.

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RAWLINGS.

a stet processus, was enforced against the attorney, although the defendant died insolvent before taxation or expiration of the time for putting in bail.

BRAMWELL, B. I think this rule should be made absolute; and the conclusion is plain, when we consider who are the parties claiming this money. The one is the plaintiff in the action; he claims money in the hands of the sheriff, and he can only do so on the assumption that it is the proceeds of the execution. Now, suppose the sheriff had returned nulla bona, and the plaintiff had brought an action against him for a false return, would not the sheriff have had a perfectly good defence? That return means, in substance, that there are no goods available for the purposes of the execution. If wrong goods were taken by the sheriff, and were sold by him, or their value paid to him, he would be justified in returning the money realized to the person to whom the goods belonged, and in making this answer to the judgment creditor. That is the case here, and, therefore, the return would be perfectly good, and the sheriff would have a complete defence to the action. If this is so, it shews to demonstration that the plaintiff is not entitled to the money. Further, with respect to the point that an undertaking was here given by the attorney, this was done on behalf of his client, though without authority; his client has since ratified his act, and now claims the money which he has paid in pursuance of it; and he is entitled to do so. I am satisfied that, in making this decision, we are doing nothing opposed to the authorities cited to us; we certainly have no such intention.

PIGOTT, B. I am of the same opinion. We must see on what terms this money was paid. If it was paid to release the goods from the execution, then, without reference to what were at that time the rights of the parties, the plaintiff is entitled to it. But, was that the meaning of the transaction? I think not; but rather that the execution debtor by his attorney claimed to be entitled to the benefit of a composition deed already executed and assented to, and then either actually registered or shortly about to be so, and meant to do what he could to try the right in the best and