1867 June 12.

OLDIS v. ARMSTON.

Debtor and Creditor-Deed under the Bankruptcy Act, 1861 (24 & 25 Vict. c.
134), s. 192—Action by non-assenting Creditor-Unreasonable provision—
Plea shewing on its face that an unreasonable provision can have no operation.
To an action by a non-assenting creditor, the debtor pleaded a deed under the
Bankruptcy Act, 1861, containing an unreasonable provision. The plea averred
facts shewing that at the time of the registration of the deed, the unreasonable
provision could have no operation against non-assenting creditors :-
Held, a bad plea, notwithstanding the averment.

DECLARATION on the common money counts.

་

Plea setting out the provisions of a deed under s. 192 of the Bankruptcy Act, 1861, between the defendant (the debtor) and all his several creditors, containing a release in the usual terms, in consideration of the payment to them by him of a composition of 2s. 6d. in the pound, and the following, amongst other clauses:'They, the said several creditors, do severally, and not the one for the other of them, or the acts, deeds, or defaults of the others, or any other of them (but as to secured creditors without prejudice), covenant and agree to, and with, the said debtor, his executors, &c., immediately after payment of the said composition, to hold harmless and indemnify the said debtor, his executors, &c., of and from the payment of any sum of money, costs, charges, or expenses, in or about or relating to any bill of exchange, promissory note, or other security or securities, which he may have given to them the said creditors respectively, or on account of their said several debts respectively, or any part thereof." Averment of performance of all conditions necessary to make the deed as binding on the plaintiff as though he had been a party thereto, and that at the time of the making and registration of the said deed as aforesaid no creditor of the defendant who had not before the registration of the said deed as aforesaid, in writing assented to or approved of the said deed, and executed the same as a creditor, and no creditor of the defendant whosoever, and no person or persons whosoever, had any claim or demand against the defendant other than or save and except for a debt within the meaning and operation of the 192nd section of the Bankruptcy Act, 1861; nor had any such creditor or person, nor has he since had, nor can he

hereafter have, any claim or demand against the defendant, for or in respect of any sum of money, costs, charges, or expenses, in, about, or relating to, any bill of exchange, promissory note, or other security or securities, given by the defendant to his creditors respectively, or to any or either of them, for, or on account, or in respect, of any debt to which such deed relates; nor had nor has the defendant given to any or either of his creditors (other than to certain creditors who, before the registration of the said deed, duly assented in writing to and executed the same) any such bill of exchange, promissory note, or other security, as in the said deed mentioned.

Demurrer and joinder.

Murphy, in support of the demurrer. The covenant to indemnify the debtor against outstanding bills, &c., is unreasonable, according to the decisions in Woods v. Foote (1) and Ingelbach v. Nichols. (2) The deed therefore is void, and cannot be pleaded in bar to an action by a non-assenting creditor; and the averment in the plea that there were no bills on which the objectionable clause could operate at the time of the registration of the deed, does not make the plea good. A deed under s. 192 of the Bankruptcy Act, 1861, must be good in itself, in order to be capable of being used as a defence.

The Court called on

Lucius Kelly, contrà. First, the deed is reasonable. It is distinguishable from the cases cited, because the covenant of each creditor to indemnify, is confined to bills given to the particular creditor covenanting.

[THE COURT (Kelly, C.B., and Martin, B.) intimated that they considered the authorities cited shewed the clause to be unreasonable.]

Secondly, assuming the deed, looked at alone, to be void, the plea is nevertheless good. The averment shews that when the deed was registered the objectionable clause could have no operation on non-assenting creditors. At the time of registration none but executing creditors held bills, and non-assenting creditors therefore could by no possibility be prejudiced.

(1) 1 H. & C. 841; 32 L. J. (Ex.) 199.

(2) 14 C. B. (N.S.) 85.

1867

OLDIS

V.

ARMSTON.

[KELLY, C.B. The effect of the averment, according to your contention, is to strike the unreasonable clause out of the deed.]

That is so. A clause which, at the date of registration, cannot operate quoad non-assenting creditors, is one to which they at any rate cannot object. In Balden v. Pell (1) Blackburn, J., in reference to a covenant in the deed there pleaded, which was made absolutely binding on executing creditors, whether the deed could take effect under the Bankruptcy Act, 1861, s. 192, or not, and which was represented as unreasonable, says (2): "Is that an objection in the mouth of a non-assenting creditor? What difference does it make to him if a creditor who signs takes upon himself to incur a liability ?" The same question may be asked here. [He also cited Hidson v. Barclay (3); Keyes v. Elkins (4); Johnson v. Barratt (5); Woods v. De Mattos (6); Thompson v. Knight. (7)] Murphy was not called upon to reply.

THE COURT (Kelly, C.B., and Martin, B.) were of opinion that a plea to an action by a non-assenting creditor, setting up as a defence a deed under the Bankruptcy Act, 1861, s. 192, containing an unreasonable clause, could not be made good by an averment of extrinsic circumstances tending to shew that the clause could not prejudice the plaintiff. They considered that a deed to be capable of being pleaded must be good in itself, and therefore held the plea bad.

See BILL OF SALE.
ACTION-Maliciously signing Judgment-Malicious Arrest-Estoppel-
Judgment-Common Law Procedure Act, 1852 (15 & 16 Vict. c. 76)
s. 27.] A. having issued a writ of summons against B., specially
indorsed for 281., B., without appearing to the writ, paid 107. to_A.,
on account of the debt. A. afterwards, under the Common Law
Procedure Act, 1852, s. 27, signed judgment for default of appear-
ance, for the full amount of 287. and costs, and issued a ca. sa., in-
dorsed for that amount, under which B. was arrested, and paid the
sum demanded. B. having brought an action against A. for maliciously
and without probable cause signing judgment and issuing execution :—
Held, that, whilst the judgment stood for the full amount, it estopped
the plaintiff from denying the correctness of the judgment or of the
execution.

2.

Quare, whether, if the judgment had been rectified, by reducing it
to the amount for which it ought to have been signed, as in Hodges
v. Callaghan (2 C. B. (N.S.) 306), the action would have been main-
tainable?

HUFFER V. ALLEN AND ANOTHER
where commenced in the name of a dead man, his represen-

tatives cannot be substituted as plaintiffs

15

54

316

324

189

AFFIDAVIT of debt for obtaining a judge's order for holding a defendant
to bail, form of

See PRACTICE. 1.

AGENT, effect of fraudulent misrepresentation by, acting in the course of
his business

See PRINCIPAL AND AGENT. 2.

effect of signature of bill of lading by
See SHIP AND SHIPPING. 4.7

AGREEMENT: See CONTRACT.

24

259

VOL. II.

2 Q

3

PAGE

54

AMENDMENT, where an action is commenced in the name of a dead

man, his representatives cannot be substituted as plaintiffs
See PRACTICE. 2.

ARBITRATION, what amounts to a reference to, within s. 13 of the
Common Law Procedure Act, 1854

See VENDOR AND PURCHASER.

ARBITRATION CLAUSE in fire policy, construction of ..

See CONSTRUCTION. 5.

ARBITRATOR: See ARBITRATION.

ASSIGNMENT of all their rolling stock by railway company, effect of
See RAILWAY COMPANY. 2.

ATLANTIC CABLE, construction of policy of insurance upon

See MARINE INSURANCE.

1.

72

122

ATTORNEY-Compromise-Retainer-Negligence.] If the plaintiff in
an action continues the authority of his attorney after judgment, by
allowing him to proceed to obtain satisfaction, the attorney retains the
power to bind his client by a compromise.

has no power to bind his partner by a post-dated cheque ..
See PARTNERSHIP.

2.

163

228

See PRINCIPAL AND AGENT. 1.

of general manager of railway company to bind company
See RAILWAY COMPANY. 3.

BANKRUPT: See BANKRUPTCY ACT, 1861.

BANKRUPT LAW CONSOLIDATION ACT, 1849 (12 & 13 Vict.
c. 106), s. 125-Reputed Ownership-Custom.] Where a custom
exists for the buyer to leave goods bought in the hands of the seller,
and is so notorious as to be practically known to all persons dealing
with the seller in his business, goods so left in the hands of the seller
for a time not longer than is clearly within the custom, do not on the
bankruptcy of the seller pass to his assignees, under s. 125 of the
Bankrupt Law Consolidation Act, 1849.

2.

3.

PRIESTLEY V. Pratt anD ANOTHER

s. 86-Trader-Debtor
Summons-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 defen-
dant 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.
FALCONAR V. MCKENZIE

BANKRUPTCY: See BANKRUPTCY ACT, 1861.

BANKRUPTCY ACT, 1861 (24 & 25 Vict. c. 134), s. 192-Deed of Ar
rangement-Debtor and Creditor-Inequality-Release-Tender of
Composition-Scheduled Creditors.] A deed of arrangement, under