execution, which he did accordingly; and about four hours after- 1868 wards he received an order to discharge the defendant on payment WOODWARD of 97. 1s. 10d. and the fees. This payment was made, and the defendant was released. No receipt was given by the sheriff for the payment made to him by the defendant, but on the 12th of April, when the sheriff paid over to the bank the 97. 1s. 10d., the following receipt was given : "The Metropolitan and Provincial Bank v. Pell. "Received, April 12, 1866, of Mr. Bunn, officer to the sheriff of Middlesex, 97. 1s. 10d., in discharge of debt and costs herein. "For plaintiff's attorney, J. Holditch." This sum of 97. 1s. 10d. was the amount of taxed costs due to the bank in their action against the defendant. No further or other payment was at any time made by the defendant in respect of the bill. The plaintiffs, on the 31st of May, 1866, and after the bill had been transferred to them by H. W. Cresswell in manner aforesaid, commenced the present action. The Court were to have liberty to make such amendments in the pleadings as the judge at nisi prius might have made, and to draw any inferences of fact which a jury ought to have drawn. The question for the Court was, whether, upon the facts, the defendant remained liable to pay the amount of the bill to the plaintiffs. H. Matthews, Q.C., for the plaintiffs. The bank being the holders of the bill at maturity, commenced actions against the defendant, the acceptor, and Cresswell an indorser. The bank obtained judgment against the defendant on the 3rd of March, and lodged a ca. sa. on the 6th of March, but they did not take him and discharge him till the 29th. On the 21st Cresswell paid the bill and he then became the holder, and he could sue the defendant or any other party prior to himself, or negotiate it, as he did, and give a right to the plaintiffs. "A bill of exchange is negotiable ad infinitum until it has been paid by or discharged on behalf of the acceptor. If the drawer has paid the bill, it seems he may sue the acceptor upon the bill; and if, instead of VOL. IV. F 1 V. PELL. 58 1868 v. PELL. COURT OF QUEEN'S BENCH. [L. R. suing the acceptor, he put it into circulation upon his own indorseWOODWARD ment only, it does not prejudice any of the other parties who have indorsed the bill, that the holder should be at liberty to sue the acceptor:" per Lord Ellenborough in Callow v. Lawrence (1) cited in Byles on Bills at p. 157, 8th edit. Judgment and execution issued against any party to a bill, without satisfaction, are no extinguishment of the debt either as against him or any other party: Tarleton v. Allhusen. (2) In Thompson v. Parish (3), Cockburn, C.J., after alluding to the judgment of Littledale, J., in Beard v. M Carthy (4), says, "With the greatest respect for the very learned judge who decided that case, I cannot help thinking that in saying 'that taking the defendant in execution is the same as if the defendant had paid the debt and costs,' he has gone too far. The effect of taking the debtor in execution is, no doubt, to suspend all other remedies against him; but it is going too far to say that the debt is thereby altogether extinguished." And Willes, J., in the same case, cites Foster v. Jackson (5), as expressly laying down the law, that taking a debtor in execution under a ca. sa. is not an actual satisfaction. (6) Cresswell, therefore, was still liable on the bill at the time he paid it; and although English v. Darley (7) may be an authority that the bank, by releasing the acceptor from custody, discharged all the indorsers, yet that doctrine is inapplicable in the present case, as Cresswell had already paid the bill under legal pressure. This is simply the case of one of several sureties sued by the creditor concurrently with the principal debtor. And the surety having paid under pressure of the action, he has an immediate right of action against his principal, which no subsequent act of a third person can divest. [HAYES, J. Before the principal debtor had been taken or released from custody, the debt had been lawfully discharged by his surety; it would be monstrous if the subsequent voluntary act of a third person could deprive the surety of his right of action against the principal. (1) 3 M. & S. at p. 97. (2) 2 Ad. & E. 32. (3) 5 C. B. (N.S.) at pp. 692, 698; 28 L. J. (C.P.) at pp. 156, 158. (5) Hob. at p. 59. (6) See Claxton v. Swift, 2 Show. 441, 503. (7) 2 B. & P. 61. (4) 9 Dowl. 136. LUSH, J. After the bill had been paid by Cresswell, could the bank have proceeded against the defendant?] In Byles on Bills, 8th ed. p. 205, it is said, "The better opinion seems to be, that to an action against the acceptor payment by the drawer is no plea." A. S. Hill, Q.C., for the defendant. It is a fallacy to say that Cresswell paid and became the holder of the bill on the 21st of March; it was not till the 13th of April that he had perfected his right to the possession of the bill, when it was handed over to him. Up to that time the bank were the holders of the bill, and not Cresswell; and they, by discharging the acceptor out of custody, discharged and extinguished the bill and all rights upon it: Jaques v. Withy. (1) Cresswell had acquired no right of action at that time. H. Matthews, in reply. The bank had no right to the bill after it had been paid in full on the 21st of March; and therefore (conceding which is a very doubtful point, that the discharge of the acceptor from execution without payment would otherwise have extinguished the bill), the discharge of the defendant could have no operation on Cresswell's vested right of action. LUSH, J. I had some difficulty at first, but I have come to a conclusion satisfactorily to my own mind that our judgment ought to be for the plaintiffs. The bank were indorsees and holders of the bill at its maturity. They brought actions against the defendant, the acceptor, and two indorsers of the bill. In the action. against the defendant, the acceptor, the bank obtained judgment on the 3rd of March, and on the 6th of March a ca. sa. was lodged with the sheriff. On the 21st of March, before the defendant was taken in execution, Cresswell, one of the indorsers who had been sued, paid to the bank the amount of the bill. If he had paid the costs also, he would have been entitled at once to the possession of the bill. Assuming, therefore, that the non-payment of the costs, to which I will advert presently, made no difference, Cresswell, having paid the bill as indorser or surety, had a right of action at once against the defendant, the principal, or person primarily liable, and this right was vested on the 21st of March. On (1) 1 T. R. 557. 1868 WOODWARD บ. PELL. 1868 the 29th of March the defendant was detained in execution, and if WOODWARD the bank had continued to hold him that would have been no V. PELL. answer by the defendant to an action by Cresswell, and neither in my opinion would his discharge have been any answer. It would be monstrous, as my Brother Hayes observed, if the act of a third person in discharging the principal out of custody could take away the prior vested right which the surety had against him. The discharge was a mere voluntary act by the bank, although it might be a very proper act on their part. Then, does the fact that Cresswell had only paid the amount of the bill, and not the costs, before the discharge of the defendant, make any difference? Clearly not. He paid sufficient to cover the amount due on the bill, and specifically appropriated it to the payment of the bill; and the only effect of the nonpayment of the costs was, that the bank had a lien upon the bill till the costs were paid; but Cresswell's right to the bill, and his rights and remedies on the bill against the defendant, were just the same as if he had paid the costs on the 21st of March, and the bill had then been handed to him. He was then the holder of the bill. Therefore, Cresswell having this vested right of action on the bill against the defendant, it would be unreasonable in the extreme if Cresswell, the surety, were to be deprived of his right of action against the principal, because the principal by the voluntary act of a third person had been discharged; and Cresswell having this right of action on the bill could transfer it to the plaintiffs, who are therefore entitled to recover. HANNEN and HAYES, JJ., concurred. Judgment for the plaintiffs. Attorney for plaintiffs: H. A. Maude. Attorneys for defendant: Elmslie, Forsyth, & Sidgwick. HART AND ANOTHER V. SMITH. Bankruptcy Act, 1861 (24 & 25 Vict. c. 134), s. 192-Construction of Composition In an action of debt, the defendant pleaded a deed between himself, a trustee, and all his creditors, by which the defendant covenanted with the creditors respectively, if the deed were duly registered under the Bankruptcy Act, 1861, to pay to each of his creditors such sums as should in the aggregate be at the rate of 2s. in the pound upon the amount which would have been proveable against him if he had become bankrupt at the date of the registration, by two instalments of 1s. each. And it was agreed that the trustee should hold the defendant's property, already assigned to him, in trust for the defendant until default, provided that, if default was made in payment of the composition or any instalment thereof, the trustee should sell and apply the proceeds, inter alia, in payment rateably of the debts due to the creditors. The creditors for themselves respectively released the defendant from the debts due to the creditorsr espectively; and it was agreed and declared that in case default should be made, contrary to the covenant, in payment of the composition, or any instalment thereof, to the creditors respectively, then the release should be at an end, and the creditors should be at liberty to sue for the full amount of their respective debts less any amount already received. The plea then averred that the deed had been duly registered under s. 192, and the plaintiff was bound thereby. The plaintiff replied that the instalments due to divers creditors, other than the plaintiff, had not been paid or tendered. On demurrer : Held, that, upon the proper construction of the deed, the release was an absolute release by each of the creditors of his own debt, subject to be avoided as against him if the instalments due to him were not paid; that the plea was therefore good without alleging such payment or tender; and that the replication was bad. The plaintiff also replied, on equitable grounds, that he was not an assenting creditor; that at the time the deed was executed the defendant was possessed of available assets sufficient to pay a much larger composition than 2s. in the pound; that the deed was not bonâ fide entered into or assented to by the majority of creditors for the equal benefit of all the defendant's creditors, but was entered into and assented to by such majority solely from motives of benevolence and kindness to the defendant, and for his sole and only benefit, and without just regard to the rights and interests of the other creditors of the defendant. On demurrer: Held, a good replication, as shewing the deed was not valid within s. 192, on the authority of Ex parte Cowen (Law Rep. 2 Ch. App. 563). DECLARATION on ten bills of exchange by the plaintiffs as drawers and payees against the defendant as acceptor, with the common counts. First plea, that the defendant, before action, made his deed as follows: The plea then set out a deed of the 5th of December, VOL. IV. G 1 1868 Nov. 20. |