Page images
PDF
EPUB

for

tors threatened him, made his son's cre- to the trustees. All the creditors, except ditors the following offer, viz., first, to the plaintiff and one other, accepted the secure to the creditors a dividend of 10s. promissory notes and executed the deed, in the pound on the amount of their debts, and the notes so accepted were paid at if they would accept that composition in maturity. full discharge of their respective debts, In February, 1868, the plaintiff comand would execute a composition deed, menced an action against W. A. White, to be registered in bankruptcy ; secondly, the son, for the amount of his debt, and, the payment of the composition to be when the promissory notes were formally secured by the joint and several pro- tendered to him, he refused to accept missory notes of the debtor, W. A. White, them. and his father, the now defendant, Wil- The action thus brought against the liam White, such notes to be made and son was referred to an arbitrator, and the delivered to trustees for the creditors question raised before the arbitrator was within seven days after the registration as to the validity of the deed. But the of the deed ; thirdly, the assets of the es- son retired from the reference, and the tate of the debtor to belong to the defend- award was made in favour of the plaintiff, ant, William White.

the deed being thus found to be bad and The offer was embodied in an agree- not binding on dissenting creditors, and a ment, and was accepted by the creditors, verdict was subsequently entered up and among them by the plaintiff, who was the plaintiff for the amount he claimed. a creditor for 2,1151., and who signed the In consequence of this action, brought minutes of the agreement on the 29th of against the son, he and his father served November, 1867.

upon the trustees a notice, dated the 7th A deed was accordingly prepared, which of January, 1869, not to deliver their was executed by the debtor and by his joint and several promissory notes to the father on the 16th of December. But on plaintiff if he should apply for them, and the 17th of December the plaintiff wrote on the 1st of March, 1869, the son was a letter withdrawing his assent to the adjudicated a bankrupt. proposed arrangement, on the ground that On the 16th of April, 1869, the plainthe balance-sheet laid before the creditors tiff made a demand on the trustees for by or on behalf of W. A. White was not the promissory notes, but, in consequence correct, and that the consents of the cre- of the notice of the 7th of January, ditors had therefore been obtained by the trustees refused to deliver them, fraud. But the solicitors to Messrs. assigning as a reason the notice of the White returned answer that the deed was

7th of January sufficiently executed to bind non-assenting On the 21st of April the plaintiff comcreditors, and that it would be registered menced another action, this time against forth with, and they denied that the ba- the father, for detinue of the above merilance-sheet was not correct.

tioned promissory notes, with the usual The composition deed was registered money counts. The defendant pleaded on the next day, the 18th of December, the above facts, and the verdict obtained under section 192 of the Bankruptcy Act, by the plaintiff against W. A. White on 1861, and within seven days after such the ground that the deed was bad and registration the defendant and his son not binding on dissenting creditors. He made and delivered to the trustees named also pleaded that he was not possessed of in the deed their joint and several pro- the notes and did not detain them. missory notes for the payment to the By consent of all parties the record several creditors of the son the respective was withdrawn, and the opinion of the amounts due to them as the composition Court was sought upon a Special Case. of their respective debts; and soon after The Special Case set out, with other facts, William White proceeded to realise the the facts above stated, from all of which assets of his son, the debtor. On the one person might have drawn an infer24th of December notice was sent to all ence that the deed was bad, another that the creditors of the delivery of the notes it was a good deed; but the Special Case

[ocr errors]

did not state whether the deed was to be below is reported in 40 Law J. Rep. (N.s.) considered valid or invalid as against Q.B. pp. 12 and 163; in the report at p. 9 dissenting creditors, neither did it reserve of that volume the Special Case is set out for the Court the usual power to draw at length. inferences.

Error was brought to this House. In the Court of Queen’s Bench the argument and the judgment proceeded on

Sir J. Karslake, and Day (with them J. the question whether the plaintiff having valid deed and binding on the plaintiff; he

Murphy) for the plaintiff.—The deed is a withdrawn his assent from the composi. tion deed, and having taken proceedings is therefore entitled to all advantages and recovered a verdict on his original

under it. If the defendant wishes to debt against W. A. White, could then, be

resist the plaintiff's claim to those advanentitled to his composition of 108. in the

tages he must make out that the deed is pound under the terms of the deed, and

not a valid deed, but his whole conduct to enforce his right, if he had any, to

goes to shew that it is valid, especially as recover from the defendant the notes or

he has taken under it his son's, the their value, the notes being in the

plaintiff's debtor's, property.

possession of the trustees and being retained

The plaintiff is not estopped by anyby them by the direction of the defendant, thing he has done ; it is true that he has and it was held by Cockburn, C.J., and

obtained a verdict, but that is not enough; Mellor, J., that, on the facts stated in the

there must be action taken on the verdict Special Case, it must be taken that the or a judgment entered up to work an deed was a valid deed, by which the estoppel, and here there has been neither plaintiff was bound, and that he was judgment nor execution. The notes entitled to all the advantages it conferred being joint and several, and the amount notwithstanding he had sued the original secured by them still unpaid, the plaintiff's debtor, and that as he could get nothing out

remedy against the father is not affected of such debtor he was entitled to succeed

by any abortive proceedings he may have in his action against the debtor's surety.

taken against the son. These notes have But Lush, J., was of opinion that there

been made and delivered for the plaintiff's was not enough to shew that the deed

benefit. The burden of proving a failure was valid, and also that the plaintiff was

of consideration for a bill of exchange or estopped from alleging that he was bound

a promissory note lies on those who rely by the deed, or consequently entitled to upon such failure. It is therefore for its benefits, and that as he had not ac

the defendant to prove such failure of cepted the suretyship of the defendant he

consideration in this case; he can only could not recoverin thataction against him.

do that by establishing that the deed was The Court of Exchequer Chamber re

invalid. He cannot establish its inversed the judgment of the Queen's Bench

validity, because the Special Case does on the ground that as no power was re

not find that the deed was invalid, and it served to them to draw inferences, they

does find facts which tend to its validity. could not decide whether the deed was a

The other side will rely on the fact, as valid deed or not, and unless it were found alleged by them, that the notes were given acknowledged by the plaintiff that the

in order to keep the debtor out of bank. deed was valid and binding on him he ruptcy, and they will set up a pro tanto

failure of the consideration for which the was estopped by the judgment he had obtained on the express ground that the

notes were given ; but a partial failure of deed was not valid or binding against consideration is no answer to an action him; that therefore he must fail so far as

on a promissory note-Dell v. King (1). his action was founded on the money

There must be a total failure, which of counts; and as to the count in detinue, as

course in this case could not be found, the defendant was not in possession of

for there remains the consideration of the the notes, he could not be said to detain release of 108. in the pound of the debtor's them, and the plaintiff must fail on that obligations. count also. The case in both the Courts

(1) 33 Law J. Rep. (x.s.) Exch. 47.

them;

them

As to the judgment of the Lord Chief cation. I apprehend that in such a state Baron, that the Court could not draw of things as that he has no right to bring inferences from the facts stated in the an action of detinue against a person who Special Case, they referred to 23 & 24 neither has the notes nor is entitled to Vict. c. 126. ss. 4-10.

demand them back from the trustees. I Mr. Brown, Sir G. Honyman and Mr. see no reason why he should be conFrancis, for the defendant in error, were sidered to be in a position in which he had not called on.

absolute control over the notes. And

certainly nothing that has been stated of THE LORD CHANCELLOR.—[His Lord- the facts in this case makes it clear to me ship stated the facts, and said] The first that the trustees were his servants or his question that arises here is as to the agents, so as to be in a condition to act form of the action. It certainly appears solely on his account, so as to be able to to all of your Lordships that it was say in a Court that what was done by brought in a very singular form. The them was done by him, the defendant, in promissory notes were in the hands of the

the present action. He gave this order trustees; they had been placed in their either rightly or wrongly. Whether he hands, it is true, to be delivered over to was entitled to give it or not, is not in that the parties who should apply for them. respect of consequence, because the sole This gentleman had originally refused to question is whether or not at that time make any application for the notes. The the trustees were holding the notes as notes remained in the hands of the mere stakeholders, and were bound to trustees, and after all these proceedings hold them for the party entitled, but not had taken place against the son, then an bound to hold them absolutely for him. application was made by the appellant He gave them an order not to part with for the notes. The parties who held of course if they were simply his

appear to me, I confess, to be in the servants the action was properly brought position of stakeholders ; they are stake- against him, but if they were in any holders as between the son and the plaintiff other position than that of his servants, in the present action. What happened the action was wrongly brought against was this—The father and the son together him. Here was a stakeholder holding the having executed the notes, and the father notes, and one party said, “ Deliver them being dissatisfied with what had taken to me;' the other party said, “Do not place in this course of proceeding against deliver them, I forbid it.” The consethe son, gave notice to the holders of the

quence is that the course of procedure notes not to part with them, and there- should have been some mode of proceedupon they declined parting with them. ings to bring that matter to an issue, but I should have thought that if an action not I apprehend by bringing an action of could be brought at all, the proper form detinue against the person who had not of action to have been adopted by the the notes at all, nor any power over them, plaintiff would have been an action

but had simply given an order to the against the trustees for non-delivery of persons having the notes in their possesthe notes ; but instead of that he brought sion not to part with them. an action against the father in respect of Then the actiou takes another form. this order, which it is said he gave for the There are counts in which the notes are non-delivery of the notes. The trustees declared upon as if the plaintiff were the chose to act upon that order, and to with- holder ofthem. Manifestly he was not the hold the notes. The father did not ask holder of them, they have never been parted to have them delivered back to him or to with to him. He says it must be one of his son ; he asked no such thing as that, two things, either the trustees are agents he did not profess to be the sole owner of holding them for me, in which case, the notes, so as to be entitled to have a clearly and simpliciter, I am the holder, re-delivery of the notes to him ; all that or they must be holding them for the he said was, do not deliver them to the defendant in the action, and then I am person who is making the present appli- right in bringing my action of detinue NEW SERIES, 41,-Q.B.

2 Y

against him. But it appears to me that no longer a question with us as to whether a third case may be that these gentlemen the one party or the other is bound to are holding the notes for the proper per- submit proof, but that the question for son, whoever he may be, who may even. your Lordships is whether now having tually turn out to be entitled to them, but all the facts of the case before you, your it would be absolutely inconsistent with Lordships can arrive at a complete conhis action of detinue to say that the de- clusion whether the one or the other party fendant holds them, because, as it appears has made that clear which ought in some to me, the defendant is only asserting a form to be made clear to us. It should be right to stop the party who is attempting made clear in some way or other whether to get possession of them, and it does not the deed is valid or invalid. We are in a on that account follow that he is the complete state of doubt and uncertainty proper object of an action of detinue, and upon it from this circumstance that simply that the notes can be recovered from him, a number of facts are stated, and the he not being in possession of them, and common precaution has not been taken of the plaintiff on the other hand not being in allowing the Court to draw inferences possession of them either, the true state of from the facts so stated. The statute the case being simply that they are in the which was referred to just now with repossession of these trustees who are holding ference to proceedings in error, only says the property in dispute.

this—that the Court of Error may find That appears to me at once to be a fatal any inferences which the Court below blot in this case. But there is another ought to have found. That only means circumstance in the case. We ought to that when the parties have entrusted the determine according to the view of either Court below with the duty of drawing the one side or the other, whether or not inferences, then the Court above may this deed is a valid or invalid deed, as- draw inferences. If the Court below suming that the action could go on if this has drawn inferences which the Court difficulty in the form of action did not above thinks erroneous inferences, as occur. The plaintiff has strongly argued, drawn from the statements, the Court I am here prevented by the Law of Bank- above may correct the inferences, not raptcy from taking out execution in re- feeling themselves bound by the inspect of my original debt. I cannot ferences drawn by the Court below, recover from the debtor my original debt, And they find such inferences as they and that being so, although I have in fact think proper and just from the whole proceeded as far as to get a verdict in case stated in the case. But when another course of proceeding in asserting the Court below has no power to draw my original right, yet I find myself stopped inferences, the Court above is just in the in that action just upon the threshold of same position. It has no greater power my obtaining the fruits of my victory, by than the Court below in that matter. this deed being a valid deed executed in It has simply the power of correcting an such manner as to bind me according to imperfection in their decision which may the statute. Then we bave to inquire have arisen from an erroneous exercise of whether it is or is not a valid deed. On the power given to the Court below. So the other hand the defendant asserts in that we are left in a state of complete unthe action that it is an invalid deed. And certainty with regard to the condition of it is said that the one side or the other this deed. The whole of this unfortunato ought to prove that.

It is argued on

litigation and the expense, inconvenience behalf of the plaintiff that the defendant's and annoyance which it has caused to all duty is to prove the invalidity of the deed. parties, seems to have arisen from the And if we had heard the counsel for the failure to take a very simple course in the defendant, we should have heard an first instance, for some reason or other it equally ingenious argument, insisting that is impossible to know why-whether it the plaintiff ought to have established its was a mistake or whether there was some validity. But I apprehend that we are purpose in it. The plaintiff has not gone bound upon the case stated, and that it is to the very tribunal which could have

administered complete relief to him if he that the mere bringing of the action will be right in all respects, namely, the Court not forfeit any benefits to which he may of Bankruptcy, which has complete power be entitled under the deed. Then they over the trustees holding these promissory have contended, that if the matter goes notes—which has complete power to deal beyond the bringing of an action, and if with them as if they were assignees in it results in a verdict or judgment which bankruptcy, and which therefore can decides that the deed is valid, that verdict administer justice between all parties, not or judgment will not disentitle the creonly as between this single creditor on the ditor to any benefits to which he would be one hand, and the father and the son on entitled under the deed. And they have the other; but as between this creditor on further contended, that if the action the one hand, the father and the son on should result in a verdict or a judgment the other hand, and the whole body of not affirming the deed, but proving that creditors in the third instance. It was the deed was invalid, and if the creditor pressed upon us very much in the argu- should think afterwards that that was a ment, that what is wanted to bind all the verdict or judgment which could not be creditors in this transaction, is some such sustained as against the body of creditors power as the Court of Bankruptcy has. at large, and that notwithstanding that That Court having all the parties before verdict or judgment, the deed is valid, it, would be able to say as regards all the still he ought not to be precluded from creditors, not only these two who are in asking for the benefits to which he is enlitigation, but all of them, what the rights titled under the deed. of each and all of them were, under this Now, it is not absolutely necessary in instrument which has been here exe- this case to decide these questions which cuted.

have been thus argued with great ability, It appears to me, therefore, my Lords, and I do not desire to be taken as exthat the only mode of arriving at justice pressing any final opinion upon them, but in this case, or rather of enabling the I am very much disposed to concur with parties to arrive, if they think fit, at all those arguments. But the difficulties justice in the case, will be for

which we have to encounter in the present ships to affirm the judgment of the Court case, before we can arrive at a decision upon below, and dismiss the appeal as usual these arguments, are these. In the first with costs; and to say that this affirmance place, we have an action of detinue brought shall be without prejudice to any appli- for the recovery of these promissory notes, cation which the appellant may be advised not against the person or persons who to make to the Court of Bankruptcy with hold the promissory notes, but against respect to the matters in question. another person who has given notice to

the holders of the notes not to part with LORD COLONSAY concurred.

them. The persons who hold the notes

are clearly not his servants or agents, LORD Cairns.—This case has been argued they are independent persons, trustees with very great ability both by Sir John appointed in medio between him and the Karslake and by Mr. Day, and they cer- creditors under the deed—and his notice tainly have in many respects placed it to may be right or it may be wrong, but it my mind in a more satisfactory position appears to me to be impossible to say that than it seems to have assumed in the

the possession of the notes by the trustees minds of some of the learned judges in the is the possession of the defendant in the Court below. They have contended that action, and that therefore the defendant supposing you have got a creditors' deed is liable to an action of detinue for dewhich is valid under the Bankruptcy Act taining these notes which are not in bis of 1861, a creditor, who has not assented possession. to the deed but who is bound by the I am sorry to say that this appears to operation of the words of the statute, may me to be an absolutely fatal impediment bring an action for his original debt, in in the way of the plaintiff

. I think if order to test the validity of the deed, and your Lordships were to disregard that

your Lord

« EelmineJätka »