EASTWOOD

v.

BAIN. [ *739 ]

[ *740 ]

to accept, the said bill on behalf of the said Company, as the defendants at the time of the said order well knew; and the said bill always hath been, and *is, unavailable and not binding on the Company, and the same was accepted without their authority, and the said bill, though indorsed, remains unpaid, &c.

Pleas: to the first count. Traverse of acceptance. To the second count. First: Not guilty. Secondly: That the plaintiffs did not, in reliance upon the said acceptance and believing that the same was duly authorized by the Company, receive or take the bill so indorsed as in that count mentioned.

At the trial, before Pollock, C. B., at the sittings in London after Trinity Term, it was proved that one J. A. Scott, having been employed by the Surrey Gardens Company, Limited, to build refreshment rooms, drew upon the Company a bill of exchange, which was accepted, as

follows:

LONDON, 22nd July, 1857. oler the sum of five

order

Surrey Gardens
Company, Limited.
Payable at Messrs.
Cocks, Biddulph &Co.

"WILLIAM ELLIS,

cepted

"To the ROYAL SUBRED CR
"COMPANY, LIMITED.'

S

JOHN A. SCOTT,
"New Inn Yard.

The bill was indorsed by Scott to Pritchard and by Pritchard to the plaintiffs. Ellis, the secretary, proved that the bill was accepted by the authority and order of the defendants, who were three of the directors of the Company. The order appeared in the minute book of the Company. The Company was registered, as a Company with limited liability, on the 17th of April, 1856. Scott, the drawer, was a shareholder. The Company was proved to have been insolvent when the bill became due. Neither Pritchard nor the plaintiff were called to prove that they gave value for the bill. By the 90th clause of the deed of settlement, it was provided "that the directors shall not issue or accept any promissory notes or bills of exchange for or on behalf of the Company; but they may receive promissory notes and bills of exchange for the Company, and such notes and bills may be indorsed in the name of the Company by the secretary and one of the directors for the time being," &c.

The defendants' counsel submitted; first, that the defendants were not liable as acceptors of the bill; secondly, that it was not proved that they had made any representation with respect to the bill, and that Scott the drawer, being a shareholder, must have known that the defendants had no power to accept or

authorize Ellis to accept the bill; thirdly, that it was not shown that the plaintiffs had sustained any damage, the Company having been insolvent when the bill became due. The learned Judge directed a verdict for the plaintiffs with 5001. damages, reserving leave to move to enter the verdict for the defendants.

Edwin James having obtained a rule nisi to enter the verdict for the defendants, or to reduce the damages to a nominal sum, Overend and Barstow now showed cause:

The bill is not binding on the Company. The acceptance must be read, "accepted on behalf of the Company by the authority of the Company." That is a false representation on the face of the bill. It may be that both Scott, who was a shareholder, and the defendants knew that the defendants, as directors, had no power to authorize Ellis to accept the bill; but on the principle of Polhill v. Walter (1), the representation appearing on the face of the bill must be considered as made to all who received it in the course of its circulation. The representation need not be made *to a particular person, if when made it was intended to circulate in the commercial world: Gerhard v. Bates (2). The plaintiffs are at least entitled to a verdict for nominal damages.

Edwin James, Hale, and R. E. Turner, in support of the
rule:

In actions for false representation nominal damages do not follow as a matter of course. If damage is not shown to have resulted from the false representation there is no ground of action. Here it was not proved that the plaintiffs gave value for the bill, and therefore the allegations traversed by the last plea were not proved. (They referred to Taylor v. Ashton (3), and 1 Wms. Saund. 230, note 4.)

POLLOCK, C. B.:

The rule must be absolute to enter the verdict for the defendants. The first count is on the bill of exchange. As to that, the acceptance was not the acceptance of the Company, or of the defendants who were charged as acceptors. No person can accept a bill of exchange except the person to whom it is addressed, unless he accepts for the honour of the drawer. The plaintiffs therefore must fail on that count. The second count is for a false representation. That is a case where an action does not lie, whether the defendants have been guilty of fraud or not, unless the plaintiffs have sustained damage. (3) 63 R. R. 635, 646 (11 M. & W. 401, 415).

(1) 37 R. R. 344 (3 B. & Ad. 114). (2) 95 R. R. 655 (2 El. & Bl. 476).

Here it was consistent with the evidence that the plaintiffs may have been the mere puppets of Scott.

BRAMWELL, B.:

It is clear that this was not the acceptance of the defendants. That disposes of the first count. As to the second, the plaintiffs have not proved that they sustained any damage from the wrongful act. This is an action to recover the damage done. by the act complained of, which, unless damage result from it, is not actionable. The action is in effect for the special damage, and the plea of "Not guilty" is a denial that the damage alleged was caused by the defendants' conduct: Wilby v. Elston (1).

WATSON, B.:

I am not satisfied as to the meaning of the second count, but, taking it as charging fraud and that the false representation follows the bill, the plaintiffs must show that they were defrauded. The rule deducible from Langridge v. Lery (2), and the cases there referred to, is, that when the action is not upon a contract, in order to constitute a cause of action for false representation the plaintiff must prove that the defendant was guilty of fraud, and that he has sustained damage, the result of that fraud. Here there was no direct communication between the plaintiffs and the defendants. It is only because the bill came into the plaintiffs' hands that it is said that the plaintiffs are damnified. But in an action of this sort it will not be presumed that a plaintiff has given value merely because the bill is produced by him. There is no doubt but that if Pritchard or the plaintiffs had given value for the bill they would have been called to establish the fact.

CHANNELL, B.:

I also think that the rule must be absolute. It is not necessary to decide whether the bill is good or bad as against the Company. As to the special count, the declaration alleges that the defendants falsely pretended that they had authority, on behalf of the Royal Surrey Gardens Company, Limited, to accept, and to order Ellis to accept, the bill on behalf of the Company. Now, assuming that there may have been a false representation which would in certain events have given a right of action to the *plaintiffs, the defendants are clearly entitled to a verdict on the last issue, because there was no evidence to sustain a verdict for the plaintiffs on that issue: in fact the defendants are entitled to a verdict on all the issues. Rule absolute.

(1) 8 C. B. 142.

(2) 46 R. R. 689 (2 M. & W. 319).

VAUGHAN v. TAFF VALE RAILWAY COMPANY.

(3 H. & N. 743-752; S. C. 28 L. J. Ex. 41; 4 Jur. N. S. 1302.) [The judgment in this case was reversed in the Exchequer Chamber (5 H. & N. 679). The case will be reported in a later volume of the Revised Reports.]

SEMPLE v. KEEN.

(3 H. & N. 753-754; S. C. 28 L. J. Ex. 151.)

[Effect of arrest on writ of ca. sa. .]

METCALF v. HETHERINGTON.
(3 H. & N. 755–756; S. C. 28 L. J. Ex. 155.)

[Obsolete practice.]

FUTCHER v. HINDER.

(3 II. & N. 757—766; S. C. 28 L. J. Ex. 28; 7 W. R. 57.) [Arrest on writ of ca. sa.]

ELLIS v. HOPPER.

(3 H. & N. 766—769; S. C. 28 L. J. Ex. 1; 4 Jur. N. S. 1025; 7 W. R. 15; 32

L. T. O. S. 77.)

One of the conditions of a race was that "all disputes should be
settled by the stewards, whose decision should be final." There were
four stewards, and a dispute having arisen as to whether the plain-
tiff's horse or the defendant's mare was the winner, three of the
stewards voted in favour of the plaintiff's horse. One of the three

had betted against the defendant's mare: Held, that the steward
was not disqualified from acting by reason of his pecuniary interest
in the event of the race; and even assuming that he was, that
did not annul the decision of the other stewards.

THIS WAS
a feigned issue to try whether the plaintiff was
entitled to certain stakes called the " Farmers and Tradesmen's
Stakes," for which a race was run at the Howden Spring
Meeting, 1858.

At the trial, before Pollock, C. B., at the last Yorkshire Summer Assizes, it appeared that seven horses started for the race, which was a steeple chase, and amongst them the plaintiff's horse, called "Chieftain," the defendant's mare, called "Milkmaid," and a mare belonging to a third person, called Filly by Vortex." The defendant's mare came in first, the plaintiff's horse second, and "Filly by Vortex" third. The plaintiff claimed the stakes on the ground that the defendant's mare had crossed the path of "Filly by Vortex," and so prevented his horse winning. There was a printed programme of the race, which contained the following condition-" All disputes to be settled by the stewards, whose decision shall be final." There were four stewards, three of whom voted in favour of the plaintiff, and one for the defendant. One of the stewards, named Allenby, who had voted for the plaintiff's

1858.

1858. Nor. 10.

1858. Nov. 24.

1858. Nor. 20.

1858.

Nov. 2.

[ 766 ]

[ *767 ]

ELLIS

v.

HOPPER.

[ *768 ]

horse, had a pecuniary interest in the event of the race, since he had betted with one Walker against the defendant's mare.

It was objected, on behalf of the defendant, that the decision of the stewards was not binding, inasmuch as Allenby was an interested party and decided in his own favour. The learned Judge directed a verdict for the plaintiff, reserving leave to the defendant to move to enter the verdict for him.

Atherton now moved accordingly:

As a general rule, if a judge has a direct pecuniary interest in the event of a suit, he is incapable of acting, and the matter is coram non judice. In the case of persons constituted judges without the option of the parties, the rule is clear; as, for instance, the Judges of the superior courts of law and equity: Dimes v. The Proprietors of the Grand Junction Canal (1). The same rule applies to Judges of inferior Courts, as justices of Quarter Sessions: Reg. v. The Justices of Suffolk (2). The rule also prevails in the case of judges chosen by the parties. In Russell on Arbitration, p. 108, 2nd ed., it is said: "The arbitrator ought to be a person who stands indifferent between the parties. If he has any secret interest in the subject in question, or has any bad feeling towards either disputant, he is not a proper person to be a judge between them." Here the stewards were in the position

of arbitrators.

(WATSON, B.: Is there any implied *condition that if one of the stewards has made a bet the whole tribunal shall be disqualified from acting?)

The objection resulting from interest is the same as in the case of legally constituted judges.

(POLLOCK, C. B.: If the vote of this steward is annulled, there is still a majority of two to one in the plaintiff's favour.)

By the condition contained in the programme of the race the four stewards ought to act.

POLLOCK, C. B.:

We are all of opinion that there ought to be no rule. It appeared to me at the trial that the case was not within the principle of the decision in Dimes v. The Proprietors of the Grand Junction Canal, and I think so still. This is not like the case of a judge or an arbitrator; it is a reference according to certain rules, one of which was that the stewards should decide all disputes; the object being to prevent the (1) 88 R. R. 330 (3 H. L. C. 739). (2) 88 R. R. 630 (18 Q. B. 416).