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Court of Queen's Bench


Exchequer Chamber and House of Lords



1872. Nov. 8.

Turnbull. 44. hd. Ch. 558.


Bankruptcy Repeal Act, 1869 (32 & 33 Vict. c. 83), s. 20-Bill given for Debt discharged by Bankruptcy Bankruptcy Act, 1861 (24 & 25 Vict. c. 134), s. 164.

No action can be maintained on a bill accepted in consideration only of a debt discharged by a bankruptcy or arrangement under the Bankruptcy Act, 1861, although such bill was given after the repeal of this Act by the Bankruptcy Repeal Act, 1869 (32 & 33 Vict. c. 83).

Declaration by plaintiff, as the indorsee of a bill for 451. at twenty days, dated January 2nd, 1870, and accepted by defendant; and as indorsee of another bill for 301. at two months, dated January 20th, 1870, and accepted by defendant. Common counts for interest and money due on accounts stated.

Third plea to the first and second counts, and as to so much of the third count as referred to money payable upon an account stated, that before the drawing or acceptance of the bills, or either of them, the defendant carried on business in partnership with J. Van Praagh as a diamond NEW SERIES, 42.— Q.B.

merchant, and he and J. Van Praagh were indebted to the plaintiff and other persons, and thereupon a deed was made between the plaintiff and J. Van Praagh and their creditors in the words and figures following. [The plea then set out the deed, dated July 13th, 1869, by which B. and J. Van Praagh assigned all their property to a trustee, to be administered for the benefit of their creditors as in bankruptcy, and the creditors, in consideration of the deed, released the debtors in like manner as if they had obtained a discharge in bankruptcy.] The plea then averred performance of all conditions precedent; and that after the deed had become binding on the plaintiff, the bills in the declaration mentioned were drawn, accepted, and indorsed to the plaintiff as in the declaration mentioned, and save as aforesaid there never was any consideration for the drawing, indorsing, acceptance, or payment of the bills or either of them by the defendant, and the plaintiff first received and always held the bills without value, and with notice of the premises.

Demurrer and joinder in demurrer.

Littler, in support of the demurrer.The plea is bad. There can be no doubt that had the bills in question been ac


cepted before the Bankruptcy Act, 1869 (1), no action could be maintained upon them by reason of the express provisions of the Bankruptcy Act, 1861, s. 161. But at the time when the bills were accepted, the old law had been repealed, and as the repealing Act contains no provision against such an action as the present one from being maintained, by the common law, in the absence of express enactment, a debt discharged by bankruptcy is a sufficient consideration for a subsequent agreement. In Wennall v. Adney (2), there is an elaborate note on the effect of an express promise founded simply on a moral obligation, in which the opinion of Lord Mansfield in Hawkes v. Sanders (3) and Trueman v. Fenton (4), (1) By the Bankruptcy Act, 1861 (24 & 25 Vict. c. 134), s. 164, after the order of discharge takes effect the bankrupt shall not be liable to pay or satisfy any debt, claim, or demand proveable under the bankruptcy, or any part thereof, on any contract, promise, or agreement, verbal or written, made after adjudication, and if he be sued on any such contract, promise, or agreement, he may plead in general that the course of action accrued pending proceedings in bankruptcy, and may give this Act and the special matter in evidence.

With regard to trust deeds for benefit of creditors, it is thus enacted, by section 197-" From and after the registration of every such deed or instrument, the debtor and creditors and trustees parties to such deed, or who have assented thereto, or are bound thereby, shall in all matters relating to the estate and effects of such debtor be subject to the jurisdiction of the Court of Bankruptcy, and shall respectively have the benefit of, and be liable to all the provisions of this Act, in the same or like manner as if the debtor had been adjudged a bankrupt, and the creditors had proved and the trustees had been appointed creditors' assignees under such bankruptcy."

By the Bankruptcy Repeal and Insolvent Court Act, 1869 (32 & 33 Vict. c. 83), s. 20, The enactments described in the schedule to this Act (the

(2) 3 Bos. & P. 247.

(3) Cowp. 289.

(4) Ibid. 548.

that an agreement by a bankrupt after his certificate to pay an antecedent debt, is one upon which an action may be brought, is cited, and commented upon.

[QUAIN, J.-Had not the bankrupt at the time of the repeal of the old Act a vested right which could not be defeated by any subsequent enactment?]

In Flight v. Reed (5) it was held by the Court of Exchequer, Martin, B., dissenting, that where bills had been given to secure previous bills, which last when given were in respect of a loan at an interest contrary to the existing usury laws, that the second bills upon repeal of these laws could be enforced; and this case has a close analogy to the present one.

Lucius Kelly, in support of the plea.There is nothing in the Bankruptcy Repeal Act, 1869, which creates a right to sue on these bills. In Jones v. Phelps (6), in a case where the respondent became bankrupt in 1868, and after adjudication gave the appellant, a creditor, bills in respect of this debt, and again, after the passing of the Bankruptcy Act, 1869, gave fresh bills in renewal of those originally given, Bacon, V.C., held that a debtor summons in respect of these new bills was properly dismissed. His Honour was inclined to think that for the purposes of the case s. 164 of the Act of 1861 was not repealed, but he preferred to base his decision on the broader ground, that when a debtor was discharged from a debt by bankruptcy, a promise by him to pay it was a mere nudum pactum. With regard to Flight v. Reed (5), the Court will remember that an usurious transaction was so far valid, that if the schedule includes the Bankruptcy Act, 1861), are hereby repealed, "but this repeal shall not affect the past operation of any such enactment, or revive any Court, office, jurisdiction, authority, or thing abolished by any such enactments, or affect the validity or invalidity of anything done or suffered before the commencement of this Act, or any right, title, obligation, or liability accrued, or restriction imposed before the commencement of this Act."

(5) Hurl. & C. 703; s. c. 32 Law J. Rep. (N.S.) Exch. 265.

(6) 20 Weekly Rep. 92.

VOL. 42.]


creditor chose to destroy his securities, he might recover the amount actually advanced, while here there was no consideration whatever for the bills, as the plaintiff's claim was discharged by the deed of arrangement.

Littler, in reply.

COCKBURN, C.J.-I think that the plea is good. The action is on bills of exchange accepted by the debtor in respect of a debt which became due while the Bankruptcy Act, 1861, was in force, and it appears that he entered into a deed of arrangement, the effect of which was to discharge him from his debts in the same manner as if he had obtained a discharge in bankruptcy. Now by section 164 of the Act of 1861 the bankrupt is not liable after an order of discharge in bankruptcy to pay any debt or demand provable under the bankruptcy on any contract made after adjudication. Subsequently the Act of 1861 is repealed, and after this repeal the bills were given. It has been contended before us that in the case of a bankruptcy after the repeal bills of exchange like those in question might be given and sued upon. Upon this point I pronounce no opinion whatever; it will be time enough to decide it when it comes before us. It is quite clear that when the Bankruptcy Repeal Act, 1869, was passed the law imposed a restriction upon the right to sue upon these bills; and it seems to me impossible to suppose that the Legislature intended anything so monstrous and anomalous as to remove this restriction in respect of past transactions, though they may have intended to alter the law with respect to future bankruptcies. And when I look at section 20 of the Act of 1869, I find that the repcal is not to affect the past operation of previous enactments, or any right, title, obligation or liability accrued, or restric tion imposed, before the commencement of the Act. I think these words are quite large enough to apply to the present case. Under the old law, the plaintiff could not have sued the debtor in respect of these bills, and I cannot suppose that the Legislature intended to take away this restriction, but have every reason to think that they meant to preserve it.

MELLOR, J.—I am of the same opinion. The effect of section 164 of the Act of 1861 is, that after the order of discharge takes effect the bankrupt is not to be liable to satisfy any demand provable under the bankruptcy, on any contract or promise made after adjudication, and if sued on any such contract, may plead that the cause of action accrued pending proceedings in bankruptcy. It seems, therefore, that the question is, whether a bill of exchange given in respect of such a debt before the Act of 1869, comes within the meaning of the words in section 20, "shall not affect the past operation of any such enactment, or affect the validity or invalidity of anything done or suffered before the commencement of the Act." It seems to me that the transaction is clearly within the words of the saving clause.

HANNEN, J., concurred.

QUAIN, J.-I am of the same opinion. When the Act of 1869 was passed, tho law which it repealed prohibited the revival of a debt discharged by a bankruptcy. Having regard to the case of Surtees v. Ellison (7), where it was held that a bankruptcy founded upon a trading which had only continued previously to the existing Bankrupt Act, 9 Geo. 4. c. 16, could not be supported, as the trading could not be regarded as if it had continued after the passing of the new Act, I should have been disposed to hold, apart from the express words of the saving clause, that the present Act could not make the position of the parties to the transaction different from that in which they stood before the old Act was repealed. But I agree with my Lord and the rest of the Court that the saving clause expressly prevents this action from being maintained.

Judgment for the defendant.

Attorneys-G. S. & H. Brandon, for plaintiff E. D. Lewis, for defendant.

(7) 9 B. & C. 759.


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Nov. 15.




[N. S.

FURNESS RAL3he cattle, and whilst the plaintiff was ac-
companying the cattle during the transit,
the defendants committed the causes of
action in the first count mentioned.

Negligence-Agreement by RailwayPassenger to travel at his own Risk.

Declaration, that plaintiff was received by the defendants, a railway company, as a passenger to be safely carried on their railway on a journey from Piel Pier to Carlisle, and that the defendants so negligently negligently managed the railway and the traffic upon it, that a collision took place, by which the plaintiff was injured. Plea, that the plaintiff was received as a passenger under an agreement that he should travel at his own risk. Replication, that it was by reason of gross and wilful negligence and mismanagement of the defendants that the collision took place :-Held, that the replication was bad, for the agreement stated in the plea must be taken to include the negligence mentioned in the replication.

Declaration. First count-That the plaintiff became and was received by the defendants as a passenger to be safely and securely carried upon a railway of the defendants on a journey from Piel Pier to Carlisle for reward to the defendants. Yet the defendants did not safely and securely carry the plaintiff upon the said railway on the said journey, and so negligently and unskilfully conducted themselves in relation thereto, and in managing the railway and the traffic thereon, that a locomotive engine and tender there being on the railway, ran into and came into collision with the train of carriages in one of which the plaintiff was such passenger, and the plaintiff was thereby greatly shaken, bruised and otherwise injured, &c.

Third plea to the first count-That the defendants received the plaintiff to be carried under a free pass from Piel Pier to Carlisle as a drover, accompanying cattle, which the defendants had contracted to carry from Piel Pier to Carlisle under an agreement, whereby it was provided that any drover accompanying the cattle during the transit from Piel Pier aforesaid to Carlisle should travel at his own risk, and the plaintiff did not become nor was received by the defendants to be by them carried on any other terms, and whilst the defendants were carrying

Replication to the defendants' third plea that it was by, and by reason of gross and wilful negligence and mismanagement of the defendants, in and in relation to the matters in the first count mentioned, that the alleged grievances therein mentioned were committed by the defendants.

Demurrer and joinder in demurrer.

Crompton, in support of the demurrer.The question turns entirely upon the construction of the notice or agreement stated in the plea, and this notice is so worded as to exempt the company from responsibility, even though their servants. may have been guilty of gross negligence. The plaintiff is carried gratuitously, and chooses to enter into a contract which takes away his right to maintain this action. The question has been practically decided in several cases. In Carr v. The Lancashire and Yorkshire Railway Company (1), the railway company at the time they received a horse from the plaintiff gave him a ticket which stated that they would not be responsible for any injury or damage, however caused, occurring to live stock travelling upon their railway. It was proved that the plaintiff's horse while in the custody of the defendants was injured through gross negligence on their part. It was held that upon the true construction of the notice the defendants were not responsible for the loss, although occasioned by their negligence. Austin v. The Manchester, Sheffield and Lincolnshire Railway (2), is to the same effect, the Court there, as in the former case, laying stress on the words damage however caused, which was in the notice, and holding that proof of gross negligence did not take the case out of the exemption. In Hinton v. Dibbin (3), where a parcel was handed to a carrier without a declaration of the

(1) 7 Exch. Rep. 707; s. c. 21 Law J, Rep. (N.S.) Exch. 261.

(2) 10 Com. B. Rep. 454; s. c. 21 Law J. Rep. (N.S.) C.P. 179.

(3) 2 Q.B. Rep. 646; s. c. 11 Law J Rep. (N.s.) Q.B. 113.


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