is brought for the benefit of the cestui que trust (a). In the common case of the assignee of a debt using the name of the assignor in an action to recover the debt, the court will not allow a release of the debt executed by the assignor to be set up to defeat the action (b). So, in the case of a wife separated from her husband and using his name in an action to recover a debt to which she is beneficially entitled, the court will not allow a release by the husband to be pleaded (c). It seems that in some cases the courts of law have set aside the release itself; but it is said that this has been per incuriam, and that the courts of law have no authority to set aside the release; all they can do is not to allow the release to be pleaded (d). grounds. Since the C. L. P. Act, 1854, ss. 83, 85, has permitted Replication to plea of repleadings on equitable grounds a release given by one co-lease upon plaintiff collusively with the defendant in fraud of the other equitable co-plaintiffs, if pleaded, may be met by an equitable replication of the fraud; so likewise, a plea of a release by a trustee, or nominal plaintiff, may be met by a replication on equitable grounds that it was given to the defendant collusively, and in fraud of the party beneficially interested, who is the real plaintiff in the action. In the case of De Pothonier v. De Mattos (e), a replication upon equitable grounds to pleas of release and payment, that the plaintiff had assigned the debt, and that, after notice of the assignment to the defendant, the release was given and the payment made in order to defraud the assignee, who was suing in the name of the assignor for his own benefit only, was held good on demurrer. If the release is obtained by a fraud of the debtor upon Release the releasing creditor, without collusion on the part of the obtained by (a) Hickey v. Burt, 7 Taunt. 48; and see Payne v. Rogers, Doug. 407; Gibson v. Winter, 5 B. & Ad. 96. (b) Legh v. Legh, 1 B. & P. 447 ; per Parke, B., Rawstorne v. Gandell, 15 M. & W. 304, 307; and see Phillips v. Clagett, 11 M. & W. 84; De Pothonier v. De Mattos, E. B. & E. 461; 27 L. J. Q. B. 260. (c) Innell v. Newman, 4 B. & Ald. 419. fraud. Covenant not to sue. Covenant not to sue debtors. latter, and is pleaded as a defence, it may be met by a replication of fraud as in the case of a release obtained by fraud from a single creditor; and there is no occasion for summary interference by the court to set aside the plea, or for an equitable replication (a). A covenant under seal made by a creditor to his debtor, covenanting absolutely not to sue for a particular debt or breach of contract, does not in terms release the right of action, and only purports to render the covenantor liable for suing in breach of the covenant; but between the two parties to the covenant, where the damages recoverable in an action brought for suing contrary to the covenant would be equal in amount to the debt or damages recoverable in the action covenanted to be forborne, if an action be brought in breach of the covenant, the covenant not to sue may be pleaded as a defence, upon the principle of avoiding circuity of action, that is, in order to avoid the recovering a sum of money in one action, which may be recovered back in another action between the same parties. The covenant not to sue becomes thus, in effect, equivalent to a release, and in pleading may be so treated (b). A covenant not to sue, in order to operate as a release upon the ground of avoiding circuity of action, must be between the same parties as the original right of action (c). · A covenant not to sue one of several persons jointly liable, one of co- though it may be pleaded as a release by the covenantee, does not operate as a release of the others (d). So, a covenant by one of several joint creditors not to sue the debtor does not discharge the debt as against the creditors jointly, but only gives the debtor a right of action against the covenantor, if he breaks his covenant (e). A composition deed made (a) Wild v. Williams, 6 M. & W. (b) 2 Wms. Saund. 47 g g; per between a debtor and his Morley v. Frear, 6 Bing. 547, 554; (c) Webb v. Spicer, 13 Q. B. 886. (d) Lacy v. Kinaston, 1 L. Raym. 690; Dean v. Newhall, 8 T. R. 168; Hutton v. Eyre, 6 Taunt. 289; Price v. Barker, 4 E. & B. 760. (e) Walmesley v. Cooper, 11 A. & E. 216. creditors containing a release of the debtor, but with a reserve of the remedies of the creditors against other persons jointly liable with the debtor, is construed, as against the joint debtors, merely as a covenant not to sue the debtor, so that the joint debtors are not thereby discharged, and in an action against them cannot plead it as a release of the debt (a). But as against the debtor with whom the covenant is made, if sued alone, such a deed is effectual as a release and may be pleaded in bar of the action (b). A deed of composition made by a debtor under the Bankruptcy Act, 1861, containing a release of the debtor, without preserving the remedies of the creditors against other persons jointly liable with the debtor, does not become binding by force of the act against non-executing creditors, in case there be such persons jointly liable with the debtor (c). for limited A covenant not to sue for a limited time does not operate Covenant as a release, even between the parties to it, and is not avail- not to sne able as a defence on the ground of avoiding circuity of time. action, but operates merely as a covenant, for breach of which the covenantee may bring his action for damages (d). So also, a covenant not to sue until the happening of a certain event (e). A covenant not to sue on a bond during the life of the obligor, except in case of assignment for the benefit of the assignee, was held to be no answer to an action by an assignee of the bond in the name of the obligee (ƒ). So, a simple contract engaging to suspend the remedy on a previous contract for a limited time, does not operate as a discharge or suspension pleadable in bar, but only gives a right of action for damages for its breach (g). But a covenant not to sue for a limited time, with a condition that, if a suit be brought before the time, the right of action shall be forfeited, operates as a discharge by force of the condition, if the action be brought within the time, (a) Willis v. De Castro, 4 C. B. N. S. 216. (b) Keyes v. Elkins, 5 B. & S. 210; 34 L. J. Q. B. 25. (c) See ante, p. 502 (a). (d) Ayloffe v. Scrimpshire, 2 Salk. 573; Carth. 63; Thimbleby v. Bar- ron, (e) Webb v. Spicer, 13 Q. B. 886. and may then be pleaded in bar to the action (a). A deed of composition between a debtor and his creditors contained a covenant on the part of the creditors not to sue before a certain date, and that the deed might be pleaded as a bar or in discharge of every action brought contrary to the true intent and meaning of the deed; it was held, in an action brought by a creditor within the time, that the covenant not to sue for a limited time, being accompanied by the express provision that during the limited time it might be so pleaded, was pleadable in bar to the action (b). CHAP. IV. SECT. IX. MERGER AND EStoppel. Merger. Ir is a general rule of law that a party by taking or acquiring a security of a higher nature in legal operation than the one he already possesses merges and extinguishes his legal remedies upon the minor security or cause of action; that is to say, if a bond or covenant is taken for a simple contract debt, the remedy upon the simple contract is extinguished; and if a judgment is recovered in an action brought upon a simple contract, or bond, or specialty debt, the original right of action is merged in the judgment, which, being matter of record, is of a higher nature (c). The merger or extinguishment of the inferior security takes place by mere operation of law, independently of any intention of the parties that the higher security should operate in satisfaction or discharge of the inferior security (d). (a) Gibbons v. Fouillon, 8 C. B. 483; cited ante, p. 500; Belshaw v. Bush, 11 C. B. 191, 202, 204. (b) Walker v. Nevill, 3 H. & C. 403; 34 L. J. Ex. 73; and see Corner v. Sweet, 35 L. J. C. P. 151. (c) Higgen's case, 6 Co. 45 b; Drake v. Mitchell, 3 East, 251, 259; Owen v. Homan, 3 Mac. & G. 378, 407; 20 L. J. C. 314, 323; Price v. Moulton, 10 C. B. 561, 572, 573. (d) Price v. Moulton, 10 C. B. 561; per Lord Truro, L.C., Owen v. Homan, 3 Mac. & G. 378, 408; 20 L. J. C. 314, 324; per Parke, B., Norfolk Ry. Co. v. M Namara, 3 Ex. 628, 632. In an action brought to recover a debt upon a simple contract the defendant pleaded that, in pursuance of an agreement to that effect, he executed an indenture whereby he covenanted with the plaintiff to pay him the debt; the plea was held good, although it contained no allegation that the indenture was accepted by the plaintiff in satisfaction of the debt, Maule, J., saying: "It does not merge or extinguish the debt; but it merges the remedy by way of proceeding upon the simple contract.-The intention of the parties has nothing to do with that.-The policy of the law is, that there shall not be two subsisting remedies, one upon the covenant, and another upon the simple contract, by the same person against the same person for the same demand” (a). dies must the debt, It is a necessary condition of the merger that the two The remesecurities be co-extensive, that is to say, that the superior beco-exten security be made for the same identical debt, and between sive,—as to the same parties, as the inferior security. Thus, if a bond for a limited amount is given to secure a simple contract debt for money then owing, and such further sums as should be afterwards advanced to an indefinite amount, there is no merger (b). So, where a banker, upon opening an account with a customer, took from him a bond to secure his current balance of account, it was held that such bond did not merge the remedy by simple contract for future advances (c). It has been laid down that a merger may operate in respect of part of an entire debt; but this seems still to be doubtful (d). A merger in a higher security may be pleaded as to part of an indebitatus count, because several distinct debts may be claimed under such count; if the plaintiff wishes to object that the part pleaded to was part of an entire and indivisible debt, he should plead a replication to that effect (e). The superior security must also be between the same and as to parties as the inferior security in order to operate in merger (a) Price v. Moulton, 10 C. B. 561. (b) Norfolk Ry. Co. v. M'Namara, 3 Ex. 628. (c) Holmes v. Bell, 3 M. & G. 213; Price v. Moulton, 10 C. B. 561, 572. (d) Higgen's case, Co. 45 a; cited by Jervis, C.J., Price v. Moulton, 10 C. B. 561, 570. (e) See Price v. Moulton, 10 C. B. 561, 570. the parties. |