Page images
PDF
EPUB

being be in course of working by the said lessees, their executors, administrators and assigns, and for that purpose to enter into such other lands as well as the said described lands, of all which premises the plaintiffs had notice before they had any estate or interest therein. And that after the making of the said deed and before the plaintiffs had any estate or interest in the said lands, the said lessees were possessed of the said lands, other than the said described lands, for the residue of a certain term of years not then expired, and afterwards and before the grievances complained of, all the estate and interest of the said lessees of and in the said lands, other than the said described lands, and also of and in the said described lands, and of and in all the coal, culm and materials, and also the horses, gins, engines, whimsies, waggons, &c., employed upon and in connexion with the said works referred to in the hereinbefore recited deed, as well upon the said lands other than the said described lands, and in the said described lands, by assignment thereof, to them, the said plaintiffs, as trustees under a deed of settlement of all the real and personal estate in trust for the benefit of creditors, dated the 30th of April, 1870, by John Evans and others, the lessees hereinbefore mentioned, then made, became and were vested in the plaintiffs, and thereby, and not otherwise, the plaintiffs became and were possessed of the said lands. And the defendants say that afterwards and during the said term, 1761. 6s. 3d. of the said rent became due and was unpaid, and all times elapsed, &c., necessary to entitle the defendant Stepney to distrain upon the goods, chattels and effects of the said lessees, their executors, administrators and assigns in the said deed mentioned, and for that purpose to enter upon such other lands as well as the said described lands, and that the defendant Stepney, by the defendant Rosser, as his agent thereto in such behalf authorised, did thereupon enter upon certain lands other than the said described lands, such other lands being lands upon which at the time being pits or openings, by or through which the coal or culm by the said deed demised, was at the time being in course of workNEW SERIES, 41.-EXCHEQ.

ing by the said plaintiffs as trustees for the said lessees, their executors, administrators and assigns, for the purpose of distraining, and did there take and distrain divers goods, that is to say, coal, culm, materials, horses, goods, &c., which were being employed, worked, gotten, raised and used upon and in connexion with the said works, as a distress for the said rent still remaining due and unpaid, which are the alleged trespasses complained of.

Demurrer and joinder.

Beresford (with him Manisty), for the plaintiffs, in support of the demurrer, contended that the power of distress relied on gave no right to distrain upon the lands where the goods were taken; that a grant or license by a termor to his landlord to enter upon other land than that demised for the purpose of following distrainable goods which had been removed from the demised premises, is wholly invalid as against an assignee, or stranger, in possession of such other land; and that the circumstances stated in the plea afforded no authority whatever for the trespasses complained of.

Hardinge Giffard (with him C. E. Coleridge) argued that the plea shewed a good defence at law. It states circumstances amounting to the grant of a rent-charge which, though issuing out of a freehold, may be distrained for on the grantee's leaseholds-Co. Litt. Lib. 2. cap. 12. s. 221, citing Butt's Case (1); Gilbert on Rents, 42. The proviso amounts to a covenant binding on the land, and is very different from a mere license-Jones v. Reynolds (2).

[MARTIN, B.-There is no specific land here in respect of which your rent-charge is granted. The remedy by distress is annexed to something issuing out of the land.]

There is no real distinction between coal and land. If a lessee of Whiteacre, who happens to be seised of Blackacre, permits his lessor to distrain on Blackacre for the rent of Whiteacre, this is more than a license, it is a covenant running with the land, binding in this case on the

(1) 5 Coke 23. (2) 4 Ad. & E. 805.

2 E

plaintiffs, who are in the same interest as the lessees and who must be considered to have taken the assignment with notice, and cannot get rid of their liability to the defendant Stepney on the ground of not having knowledge of what they ought to have enquired into-Morland v. Cook (3), Tulk v. Moxhay (4).

Beresford in reply.-The interest of the plaintiffs and the lessees is not identical. Their tenancy of the lands where the distress was levied is not altogether independent of their tenancy of the demised lands. On the assignment, therefore, the power of distress, which was no more than a mere personal license, was altogether lost.

Cur. adv. vult.

The judgment of the Court (5) was, on June 1st, delivered by

KELLY, C.B.-In this case a right is claimed under a covenant in a deed of demise of a coal mine, to distrain for rent reserved under the demise, not only upon the mine or land demised, but upon other land belonging to the lessee or his assignees.

The covenant is that the lessor may distrain certain chattels upon any land in which pits should be opened through which the coal demised should be in a course of working. It happens in this case that the land in which the distress has been made was held upon lease by the lessee at the time of the demise, and has since passed from him to the plaintiffs by assignment. But it might have come into the possession of the plaintiff's the day before the distress; and it might have consisted of a single close or of an estate of 10,000 acres. And it might be conveyed away by the plaintiffs before another year's rent becomes due, and the plaintiffs might then have become posBessed of other lands in which a pit may have been opened through which the coal was obtained, and so these other lands, if this distress can be maintained, would be liable to another distress.

(3) 37 Law J. Rep. (N.s.) Chanc. 825.

(4) 11 Beav. 571; s. c. 18 Law J. Rep. (N.s.)

Chanc. 83.

(5) Kelly, C.B.; Martin, B.; Bramwell, B.; and Channell, B.

This shifting character thus attaching to the land and the uncertainty of its limits, and the tenure by which it is held, are inconsistent with any right of distress incident to either a rent-charge or on a rent-service. A rent-service issues out of the land demised, and passes with the right of distress to the reversioners. Here the rent is claimed, and the distress made, not upon the mine or premises demised, but upon land of which the distrainer is not the reversioner.

But it has been contended that this rent is rent-charge, and that a distress may be made upon other lands of the grantee than those out of which the rent issues. A rent-charge is thus defined by Lord Coke-"If a man seised of certain land grant a yearly rent to be issuing out of the same land to another in fee or in feetaile, or for terme of life, &c., with a clause of distresse, &c., then this is a rent-charge" (6).

In such a case, however, the lands out of which the rent issues, and the other lands upon which it is charged (and no doubt such a rent may be charged on other lands belonging to the grantor), and the tenure by which they are held, and the quantity and description of the estate, are all specified and defined, and appear by the grant. Further, the lands so charged remain liable to the rent-charge, notwithstanding any subsequent alienation; and no lands afterwards acquired by the party liable to the rent-charge can be affected by it; whereas, by the terms of this covenant, any lands, though afterwards acquired, and whatever might be their extent or value, become liable to a distress, if a pit be dug within them communicating with the mine. No such rentcharge ever existed, or can exist by law, issuing not out of lands specified in the grant, but out of any lands which may at any time afterwards become the property of the covenantor, and in which a pit may be sunk to work the mine.

In this case the supposed right to distrain exists only under a covenant which may possibly support an action against the covenantor, but which if it could be held to pass with the land demised to an as

(6) Sec. 218; 144 a.

[blocks in formation]

Bankruptcy Act, 1869, 88. 4, 39 and 81 -Annulling of Bankruptcy on Appeal— Mutual Credits, Debts or Dealings-Revert ing of Property to Bankrupt-Set-off.

An adjudication in bankruptcy under the Act of 1869 having been made against the defendant, his trustee in bankruptcy sold part of the estate, and paid the proceeds into a bank to an account which he kept as such trustee. The bank knew the circumstances, and also that there was an appeal against the adjudication pending. The bank afterwards became bankrupt, and, subsequently, the adjudication against the defendant was annulled by the Court of Appeal, on the ground that no act of bankruptcy had been committed. The Court

made no order under section 81 as to the vesting of the defendant's property. The trustee in bankruptcy of the bank having brought an action against the defendant for a debt due to the bank before the defendant's bankruptcy,-Held, affirming the judg ment of the Court below, that the defendant could set off equitably the money paid by his

trustee into the bank.

Appeal under the Common Law Procedure Act, 1854, s. 34, from the decision of the Court of Exchequer (1).

The declaration contained the common money counts by the trustee in bank

(1) See 40 Law J. Rep. (N.8.) Exch. 189.

ruptcy of the surviving partners of Harvey & Hudson, a Norwich banking firm, against a customer, for a debt of 4501., the overdrawn balance of his banking account, due before the firm became bankrupt.

3rd plea, on equitable grounds-That the defendant having been adjudged bankrupt, and E. M. Bullard having been appointed trustee of the property of the defendant as such bankrupt, and having as such trustee become possessed of divers moneys of the defendant, which were equal in amount to the plaintiff's claim, Bullard, before the bankruptcy of the surviving partners of the banking firm, lent the said amount with notice of the premises to the banking firm, who thereupon became indebted in respect thereof to Bullard, as such trustee; and that after the loan, the adjudication in bankruptcy of the defendant was duly annulled, whereupon the amount so lent by Bullard reverted to and became, before suit, and still is, due to the defendant, and that all things had happened, &c., necessary to entitle the defendant to plead this amount as an equitable set-off against the plaintiff's claim.

4th plea-A set-off of an amount equal to the plaintiff's claim for money lent by the defendant to the banking firm, and for money received by the banking firm for the use of the defendant, which amount was due from the surviving partners of the firm at the time of their bank.

ruptcy, and still is due to the defendant.

Issue on the above pleas.

At the trial, before Blackburn, J., at the Suffolk Spring Assizes, 1871, the following facts were proved: In March, 1870, the defendant was a customer of the banking firm of Harvey & Hudson, being the balance due on his overdrawn and indebted to them in the sum of 4501., account. The firm of Harvey & Hudson consisted of the late Sir R. Harvey, R. A. Kerrison, and R. Kerrison.

On the 26th of March, 1870, a debtor's summons was issued by the firm against the defendant, and on the 7th of May the defendant was on that summons adjudi cated bankrupt. On the 10th of May, 1870, the defendant appealed against the order of adjudication to the Chief Judge in Bank. ruptcy, who dismissed the appeal, and the

defendant then appealed to the Lords Justices of Appeal in Chancery.

At a meeting of the defendant's creditors, held on the 31st of May, 1870, E. M. Bullard was appointed trustee in bankruptcy, and Sir R. Harvey and two others were appointed a committee of inspection for administering the property of the defendant, upon the vote of the solicitor and proxy of the firm, whose debt of 4501. exceeded the total amount of the debts of the other creditors of the defendant.

Bullard proceeded to realise the estate, and in pursuance of a resolution of creditors under section 30 of the Bankruptcy Act, 1869, also passed by the solicitor and proxy of the firm at the aforesaid meeting, paid into Harvey & Hudson's bank proceeds to the amount of 6651., or thereabouts, to the credit of an account headed "Mr. William Johnson's trustee E. M. Bullard, in account with Messrs. Harvey & Hudson." The sum of 6651. was made up of various sums which were paid into the account between the 3rd of June and the 5th of July, 1870.

On the 19th of July, 1870, Sir R. Harvey died. On the 22nd of July the surviving partners, R. A. Kerrison and R. Kerrison, were adjudicated bankrupts, and on the 3rd day of August, 1870, the plaintiff was appointed their trustee in bankruptcy.

On the 2nd of August, 1870, the Lords Justices of Appeal in Chancery allowed the appeal on the ground that no act of bankruptcy had been committed, and made a decree that the order of adjudication in the County Court and the order of the Chief Judge in Bankruptcy dismissing the appeal, be discharged; also that the adjudication in bankruptcy "be annulled," the defendant "not to be at liberty to bring any action, in respect of the adjudication, against Ballard as the trustee appointed thereunder, except with respect to the moneys received by him acting as such trustee." The decree was silent as to the defendant's property. Harvey & Hudson had due notice of and were heard by their counsel against both of the appeals.

It was contended by the defendant that upon the annulling of the defendant's bankruptcy as aforesaid, the amount

standing to the credit of the account of Bullard, as the defendant's trustee, which exceeded the plaintiff's claim in this action, became available as an equitable or legal set-off to the plaintiff's claims, or as a mutual credit.

Blackburn, J., directed a verdict for the defendant on the 3rd and 4th pleas, and reserved to the plaintiff leave to move to enter the verdict for him; and a rule nisi was afterwards obtained to enter the verdict for the plaintiff on the 3rd (2) plea on the grounds

First. That there was no mutual debt, credit or dealing between the bankrupts and the defendant available under the statute.

Second. That the bankruptcy of the defendant having been annulled after the bankruptcy of Harvey & Hudson, the debt and liability to the defendant arising from the annulling of his bankruptcy could not be set off.

This rule having been discharged by the Court of Exchequer (1), the plaintiff now appealed, and the question for the Court was, whether the above rule nisi ought to have been discharged or made absolute.

Field (Merewether with him), for the plaintiff, the appellant.-When Bullard paid the money into the bank, he was trustee of it for the defendant's creditors, and not for the defendant in any event. In no event could the defendant be entitled to more than the net residue after deducting payments which Bullard would have to make for his own remuneration and for the other expenses of the trusteeship. Even if the defendant's bankruptcy had been annulled before the bank became bankrupt, he could not have set off this money; but since the annulling was after the bank became bankrupt, the case is stronger for the plaintiff, who represents not the bank but the creditors of the bank. The only person who could sue the bank for this money is Bullard-Bailey v. Finch (3); and the defendant's only remedy was by sueing Bullard for it, which remedy was reserved to the defendant by the decree of the Lords Justices. Though the goods were originally the defendant's, (2) The rule did not mention the 4th plea. (3) 41 Law J. Rep. (N.S.) Q.B. 83.

the proceeds of the sale were not his money-Moore v. Pyrke (4). There was not at the bank any actual coin belonging to Bullard, but only the right to sue for money, and this right could not "revert" to the defendant, for it is not "property" within section 81. Even if anything "reverted," it would be not the right to all the money paid in, but the right to such dividends as the bank estate. would yield upon the net residue of the money paid in. "Annulling," under section 81, does not mean more than superseding, and does not make the adjudication void ab initio, Smallcome v. Ollivier (5). There has been no mutual debt, credit or dealing, under section 39, between the plaintiff and the defendant, for the only dealing was between the bank and Bullard.

Graham, for the defendant, was not called to argue. upon

COCKBURN, C.J.-We are all agreed that the Court of Exchequer were right in discharging the rule to enter the verdict for the plaintiff. First, it is clear that section 81 of the Act of 1869 applies to the present case. It would indeed be a strange construction if we held that the words in that section, "the property of the debtor," include his goods and chattels, but not the proceeds of a sale of his goods and chattels, or cash at a bank.

Then comes the question, what is the effect of the annulling of the adjudication in bankruptcy with respect to the case now before us. I have no doubt that if the adjudication against the defendant had been annulled before the bankruptcy of the bank, this fund standing in Bullard's name would have been money standing

to the defendant's use in the books and coffers of the bank, so that there would have been a mutual credit between the defendant and the bank, and that the defeudant could have set off this money against his debt to the bank. Then a difficulty was said to arise from the fact that the annulling of the adjudication did not take place till after the bank

[blocks in formation]

ruptcy of the bank; and the question is whether that fact prevents there being a mutual credit between the bank and the defendant. After the best consideration which I can give to section 81, I think it does not.

I think that subject to all sales and dispositions (that is, all lawful sales and dispositions) of property and payments duly made before the annulling of the adjudication by the trustee, or any person under his authority, or by the Court, and subject to any terms or conditions which the Court may in its equitable jurisdiction impose on the parties, the

effect of section 81 is to remit the debtor to his original position and all his original rights. Here the Court of Bankruptcy made no such terms or conditions, and no payments had been made out of this fund, which therefore stands in the bank intact. I think the effect of section 81 is to remit the defendant, from the moment when the adjudication was annulled, to his original position and rights in reference to all his property, and, amongst the rest, this money. It is, therefore, the same as if this money had been paid into the bank in the defendant's name instead of in Bullard's name. According to what I believe to be the true construction of section 81, this fund became, by virtue of the annulling of the adjudication and the consequent remittal of the defendant to all his rights, the money of the defendant ab initio. It was therefore the defendant's money at the time when the bank were adjudicated bankrupt, and may be set off against the debt sued for.

BLACKBURN, J.-I am of the same opinion. I never doubted that if the adjudication had been annulled before the bankruptcy of the bank, and the accounts had then been stated between the bank and the defendant, this money would have reverted to the defendant as part of his property, and would have been the subject of a set-off. But in fact the adjudication was annulled after the bankruptcy of the bank. Without determining how far the annulling of an adjudication relates back under section 81, and without going any further than is necessary for this decision, I think that since it appears that at the time of the

« EelmineJätka »