lawful debts? It is argued that the 94th section renders this covenant void. But that section only says that it shall not be lawful to mortgage any lands of the corporation, except with the approbation of the Lords of the Treasury, which was not obtained in this case; and although the mortgage may be invalid, that is no reason why the corporation should not be liable on their covenant to repay the mortgage money. BRAMWELL, B.: I also am of opinion that the plaintiff is entitled to judg ment. If the case of Pallister v. The Mayor of Gravesend is good law, a simple covenant by the corporation to repay money is not void, because the money was borrowed for purposes other than those to which the borough fund is applicable. The question then is, whether this covenant is invalidated because it is contained in a deed by which the corporation do something which it is alleged they were not legally competent to do. In my opinion, if the security by way of mortgage was unlawful, the whole deed would be void; since, though an instrument void in part, at common law, may be good for the other part, yet if void by statute it is altogether void; according to the old saying, "that the statute is like a tyrant, when he comes he makes all void, but the common law is like a nursing father, makes void only that part where the fault is and preserves the rest" (1). Then does the Municipal Corporation Act absolutely prohibit a contract by way of mortgage? The 94th section says, that it "shall not be lawful" for the corporation to mortgage any of their lands without the consent of the Lords of the Treasury. That only means that they shall not be entitled to do so. Then the case of Kerrison v. Cole (2) is an authority for holding that this covenant is good. WATSON, B.: I am also of opinion that the plaintiff is entitled to judgment. There is nothing in the Municipal Corporation Act to prevent a corporation from entering into a covenant to repay money borrowed on mortgage. The Act says that it shall not be lawful for a corporation-that is they shall not have the power-to mortgage their property without the approbation of the Lords of the Treasury; and the question is, whether the covenant to repay the mortgage money is collateral to or dependent on the mortgage. I think it is purely collateral. It is not like a covenant in a lease which is dependent on the lease. The language of the 13 Eliz. c. 20, is stronger than that of the statute WILMOT, Ch. J., in Collins v. Blantern, 2 Wils. 347. (1) Per HOBART, Ch. J., in Norton v. Simmes, Hob. 14 (see Maleverer v. Redshow, 1 Mod. 36), adopted by (2) 8 East, 231. in question. It says that all chargings of benefices "shall be utterly void." And it was held by Lord KENYON in Mouys v. Leake (1), that though a grant of a rent-charge by a rector out of his benefice was void under that Act, yet the covenant in the deed of grant, to pay the rent-charge, was valid. Again, the 26 Geo. III. c. 60, s. 17, required *that, upon the transfer of property in a ship, the certificate of registry should be recited in the bill of sale, "otherwise such bill of sale shall be utterly null and void to all intents and purposes; but it was held by Lord ELLENBOROUGH in Kerrison v. Cole (2), that though a mortgage of a ship was void under that statute, yet a covenant in the same instrument for payment of the mortgage money was good. Those cases are founded on good sense and are sound law, and it would be mischievous to disturb them. Judgment for the plaintiff. KIDSON v. TURNER. (3 H. & N. 581-587; S. C. 27 L. J. Ex. 492; 6 W. R. 678.) 46 A bond is a "contract, promise or agreement" within the meaning of the 204th section of the Bankrupt Law Consolidation Act, 1849" (3); and therefore a bond, given by a bankrupt for payment of a debt barred by his certificate, is void. [The Bankruptcy Acts now in force do not contain any similar provision. It is, therefore, considered sufficient to preserve the head-note of this case.] SOLVENCY MUTUAL GUARANTEE COMPANY v. YORK. (3 H. & N. 588-594; S. C. 27 L. J. Ex. 487.) A declaration stated, that by an agreement between the plaintiffs, a Guarantee Company, and the defendants: after reciting that the defendants had delivered to the Company a declaration in writing containing a statement of the amount of their business and losses thereon during the three years precedent, and that they were desirous of being guaranteed by the Company in respect of their future annual sales in their business, according to the deed of settlement of the Company and the rules and bye-laws thereof, and that the Company had agreed to enter into the guarantee thereinafter contained upon the terms thereinafter mentioned: It was agreed between the defendants and the Company, that if the defendants should pay the sums thereinafter mentioned, and should comply with the provisions of the deed of settlement, &c., the subscribed funds of the Company should be liable to pay the defendants nine-tenths of their losses in respect of goods sold by them during the term of three years and one month from the 1st of December, 1853, unto the 31st of December, 1856, and during any further period the defendants should contribute to the funds of the Company and the Company should consent to receive further payments but subject always to the provisions contained in the deed of settlement, &c., and also to the provisions thereinafter contained and indorsed thereon. That one of the provisions indorsed by the plaintiffs on the agreement was, that every guarantee upon gross annual returns should, from the expiration of the original term, (1) 8 T. R. 411. (3) Repealed, 32 & 33 Vict. c. 83, (2) 8 East, 231. s. 20. PAYNE v. MAYOR OF [ *581 ] 1858. June 7. 1858. June 7. [ 588 ] SOLVENCY GUARANTEE SOCIETY YORK. [ *589 ] be treated as a renewed contract, unless either the member interested therein, or the board of directors, should give two calendar months' notice of an intention not to renew the same. The declaration then alleged that the defendants agreed to pay the Company 431. 15s. in each year during the term of the guarantee that the agreement so made was a guarantee upon gross annual returns within the meaning of the provision indorsed on the policy, and that no notice of an intention not to renew the guarantee had been given by either party; and alleged as a breach the non-payment of an instalment of 431. 15s.. being the annual premium for the year 1857, and 107. 18s. 9d., an instalment for the year 1858. Pleas: first, that the sums are claimed in respect of periods after the 31st December, 1856, and that from and after such date the defendants refused to contribute to the funds of the Company. Secondly that on the 31st December, 1856, by agreement between the plaintiffs and another Company, the plaintiffs' Company became dissolved and were amalgamated with that other Company, and the business, funds and property of the plaintiffs' Company were transferred to that other Company. Thirdly for defence on equitable grounds, a plea stating an agreement to amalgamate, as in the second plea: Held, that the first plea was bad, for the stipulation for notice was part of the contract; and no notice having been given the agreement continued for another three years. Also, that the second and third pleas were bad; since it did not appear that the Company were not empowered by their deed of settlement to amalgamate. THE declaration stated, that by an agreement, made the 22nd December, 1853, between the above Company of the one part, and the defendants of the other part: after reciting that the defendants were butter merchants at Liverpool and had delivered into the office of the Company a declaration in writing, containing a statement of the amount of their business and losses thereon during the three years preceding such declaration, and of such other particulars as were required by the rules of the Company; and that the defendants were desirous of being guaranteed by the Company in respect of their future annual sales in their business, according to the terms of the deed of settlement of the Company and the rules and bye-laws thereof; and that the Company had agreed to enter into the guarantee thereinafter contained upon the terms thereinafter mentioned; and that the defendants had contributed to the funds of the Company the sum of 10. Os. 10d., and had further agreed to pay to the Company such further sums as were thereinafter mentioned: It was thereby agreed by and between the defendants and the Company in manner following (that is to say), that if the defendants should pay to the Company the sums thereinafter mentioned, and should fully comply with the provisions of the said deed of settlement and the rules and byelaws for the time being of the Company; and further, that if the total amount of the sales made by the defendants in any, or in any one, of the years in which the guarantee was thereinafter made to extend, should not exceed 25,000l., then and in such case the subscribed funds of the Company should, according to the provisions of the said deed of settlement, rules, and byelaws, be subject and liable to pay to the defendants nine-tenths of the loss or damage to be occasioned to the defendants in respect of any goods sold by the defendants during the term of three years and one month from the 1st of December, 1853, unto the 31st December, 1856, by reason of any or any one. of the purchasers of such goods being duly found and declared bankrupt or taking the benefit of any Act for the Relief of Insolvent Debtors, &c., within such time as aforesaid and during any further period in respect whereof the said member should contribute to the funds of the Company and the Company should consent to receive further payments at the rate aforesaid: but subject always to the provisions contained in the deed of settlement, rules and bye-laws, and also to the provisions thereinafter contained and indorsed thereon. That one of the provisions indorsed by the plaintiffs on the agreement, before and at the time the same was so made by the defendants, was and is that every guarantee upon gross annual returns, floating risks, &c., whatever might be the original term of the same, should, from the expiration of such original term, be treated as a renewed contract of the like nature and conditions, unless either the member interested therein or the board of directors should give two calendar months notice of an intention not to renew the same. And the defendants did thereby agree with the Company, in consideration of the said guarantee, to pay the Company the further sum of 371. 7s. 1d., being the remainder of the annual consideration payable thereon up to the 31st December, 1854; and also the sum of 431. 15s. in each and every succeeding year during the term of the said guarantee at the times and in the amounts thereinafter mentioned (that is to say), at such time or times as the directors of the Company should appoint by any notice to be left at the place of business of the defendants fourteen days before the time appointed. That the agreement of guarantee so made and entered into between the plaintiffs and defendants was and is a guarantee upon gross annual returns within the meaning of the said provision so indorsed upon the said policy, and that no notice of an intention not to renew the said guarantee at the expiration of the period of three years and one month has ever been given by the board of directors to the defendants, or by the defendants to the board of directors. The declaration then averred that the plaintiffs gave to the defendants fourteen days notice to pay certain instalments of the sum of 431. 15s., being the annual premium for the year 1857, and 10l. 18s. 9d., an instalment for the year 1858. Breach; non-payment. SOLVENCY GUARANTEE SOCIETY v. YORK. [ *590 ] SOLVENCY GUARANTEE SOCIETY ť. YORK. [591] [ *592 ] Pleas. First, that the sums accrued due and are claimed in respect of periods after the 31st of December, 1856; and that from and after such date the defendants ceased to contribute, and wholly refused to contribute to the funds of the Company; of which the plaintiffs had notice. Secondly. That the sums accrued due and are claimed in respect of periods after the 31st day of December, 1856; and that on such last-mentioned day, without the knowledge or consent of the defendants, by mutual agreement between the plaintiffs and a certain Company duly incorporated and called "the Mercantile Guarantee and Assurance Company," and which said last-mentioned Company was composed of and consisted of other and different members than "the Solvency Mutual Guarantee Company," the Solvency Mutual Guarantee Company became and was then dissolved, and the members thereof became and were amalgamated into, and became and were members of the Mercantile Guarantee and Assurance Company," and the business, funds and property of the Solvency Mutual Guarantee Company were transferred to the Mercantile Guarantee and Assurance Company. Thirdly. For a defence on equitable grounds: a plea stating that before and at the 31st of December, 1856, it had been agreed between the plaintiffs and "the Mercantile Guarantee and Assurance Company," &c. (as in the second plea mentioned). Demurrers to pleas, and joinders therein. Turner, in support of the demurrers: The first plea confesses the breach, without raising any defence. It admits that no notice was given by either party of an intention not to renew the contract, and simply states that the premiums accrued due and are claimed in respect of periods after the expiration of the three years. But no notice *having been given, the contract became renewed for the next three years. It is consistent with every allegation in the plea that during the periods therein mentioned, the defendants received from the plaintiffs the guaranteed amount for their losses. The second plea affords no defence. Although the business, funds and property of the plaintiffs were transferred to another Company, it does not follow that they cannot pay the claims upon them. The transfer may enable them to do so. Either the deed of settlement provides for such a transfer, or it does not: if it does, the transfer was properly made; if it does not, it was ultra vires and void: King v. The Accumulative Life Fund and General Assurance Company (1). The third plea is also (1) 111 R. R. 588 (3 C. B. N. S. 151). |