COURT OF APPEAL.

Press, Volume XXX, Issue 4155, 20 November 1878, Page 5 (Supplement)

COURT OF APPEAL.

XOBBTN AKD AJTOTHBB T KISSLING. This following report •£ this highly important case, some parts of which hare been al-eady given in telegrams, is supplied by the " New Zealand Time* " :— Thtjbsday, Novkmbbb 14. [Before hie Honor the Chief Justice, Mr Justice Williams, Mr Justice Gillies, and Mr Justice Johnston] Mr Heaketb, for the appellant—This is an appeal from the judgment of the Supreme Court of tLe Northern district npon a demurrer by the appellant, defendant in the Court below, to the plaintiff's declaration, on which occasion judgment waa given, overruling the demurrer, with costs. The declaration which was demurred to is as follows :— " That on or about the fourth day of June, in the year one thousand eight hundred and seventy-seven, the plaintiffs retained and employed the defendant for commission or reward to purchase for the plaintiffs a certain pieoe or parcel of land situate in the Piako district, in the colony of New Zealand, and known as the Mangateparu Black. Bounded on the north by the Mangakabika Block; on the east by the Piako River and the Mangakumia Stream ; on the south by the said stream, and on the west by a Government block called Hangawera, ac the said Mangatepara block is delineated by the plan drawn hereon, and j bordered blue. That the said defendant acocpted the said re'ainer and purchased the land as agent for and on behalf of the plaintiffs. That the plaintiffs have always been and are still willing and hare offered to pay the purchase money of the said land and a reasonable sum to the said defendant for his commission for purchasing the same. That the said defendant, in breaoh of the said duty as the said plaintiffs' agent, has obtained a conveyance of the said land in his own name, and clei-ns the said hni as his own property, and refuses to acknowledge the said plaint iff*' right to the same. Wherefore the plaintiffs claim a transfer of the land to them, and the plaintiff* pray'suoh further or other relief as to this honorable Court may seem fit." The appeal ie brought against that judgment. On the occasion of the learned Judge, giving judgment-, the authorities, which are very numerous on the question, were not fully gone into by the learned Judge, because it was known that the parties desired to take *he opinion of this Court with regard to the point tli at had been raised under the Statute of Frauds: and therefore the Judge expressly stated in the judgment that he did not go co fully into the authorities, knowing that if he had done so it would have involved delay, and that the parties could not probably take the opinion of the Court of Appeal at the present session. The nature of the action ie one against the 4efendant as a supposed trustee, to have an express trust created or declared. I submit that is the nature of the action itself. No doubt in the judgment itoelf which was given the case was treated as a case of a different character—as a case of a fraud by an agent on bis principal, not treated ac a case in which an espreseed trust was claimed to exist, but as a case altogether outside the Statute of Francis. The position taken up by the appellants in this case is this :—That the Courts of Law or Equity have never gone so far as to limit the degree to which the conscience iteelf shall be shocked. Taking the 4th section of the Statute of Fraud*, how many cases exist where parti-s say—" I admit I agreed to buy lur.d ; I admit that 1 agreed to give you a certain price, but there is no contract in writing." Then how often, does a person part with his goods on the Terbal representation of another, who says, " I admit that I agreed to buy, but you have not got my guarantee in writing." The case is an important one for this reason, that if the Court should not be with mc in the position I propose taking up, the Court will, in fact, have to overrule some seven text writers. [Johnston, J. —lt will never overrule text writers.] It trill rnle this, at all events—that the text writers have misinterpreted the law. A principal has no power to declare a trust j he is nota person entitled to declare a trust. With regard to the Statute of Frauds, it is the seventh sjction on which the demurrer ie alleged to be founded. I submit that in the ea=eof Cave t McKenzie, the jiHgment of the Master of the Bolls there admit, that up to the time the contract remaned executory there was no confidence in the agent because he was agent. The present; plaintiff ""Jjwg on his own declaration.. I «fnut that the plaintiff, if ho wishes this relief at all must Uke stand under the f th and notunder the Sth section of the Statute of There can be no fraud, I »"£*»*• « the Statrt* of Frauds allows it, no Court wiU »y it it a fraud. If hi» caw comei within the I Statute of Fraudi. it i> cot in the power of

the Court to say that it is a fraud, because the Court would thereby be repealing the statute, which, of course, it has no power to d). I submit that it is not a fraud. The turning point of the argument is as to whether parol evidence can be given—as to whether the trust should be manifested by some writing. If the right or title of tbe plaintiff cannot be established without proof of a contract with the defendant, parol evidence of that contract cannot be given. Parol evidence cannot be given, because if parol evidence is given of the contract, parol evidence is given of the agency, and therefore of the trust. (Lewin on Trusts, cd. 2, page 148149) The word agent is in italics. There is ho' misconception with regard to tlie teit. It is dirt-ted to a

person -w\i_o __» _____ agent, ______ to a. person xrho is a. pji-acipaL It; £_-„ tb_refoz«. <-t_-_-«c-fc_--<_L to *_, contracted with, and although in equity he ia :: ! H a trustee, it ia a treat arising ex contractu, and not arising by operation of law. The agent was employed to buy as an agent. He was engaged by a principal to buy, and bought in his own name. _J-illi_>_, J.—Yes, _*<-_• __ W&-—L- If Z-. p____r_«___- r-qaoab, z_ _L_f____ ___t; to boy a. pteoa of ___<_. and _lefe_.____t;

pi mm. tin iiiiiij nam i

not allow a man to keep an estate where he did not .receive -remuneration, and compel him to give it up if he is to receive remuneration. [Gillies, J.: It is the duty of an agert engaged to buy for a principal to buy in the name of his priccip—l and not in hie own.] I submit mnrt confidently tint if a penon is asked to buy an estate for another, and he says he -rill do it, clearly he is an agent. It aris. s necees.rily from the relationship, and does not require a stipulation that he shall pay him for what he does. Thej;e is every im-p-cation of agency ; not only is ■h'- principal, but the principal and agent created. [Johnston, J.: You don't assume a Quantum meruit when the circumstances disprove the notion of a remuneration passing.] Ifc does not want remuneration to create that relationship. As a general view, I would submit this to the Court—that I have not been able to fled any case in which the Statute of Frauds has been set up under the 7th section and not allowed. Certainly in the argument in the Court below no case whatever of that description was cited where the defendant claimed the benefit of the Statute of Frauds. l_Q-illies, J.: In several cases where defendants claimed the benefit of the Statute of Frauds, it was shown that the statute did not apply.} If your Honor refers to the case of Cave v. McEenzie, where section 8 was set up, then I agree there have been cases of that kind * but not where section 7 was relied on. [G-illies, J.: In tha case of Cave v. McKenzie the 7th section was expressly relied on.] I'submit, on the authority of Mr Justice Storey (Equity Jurisprudence, vol. 2, section 1201 a) that in this c_se there is no resulting trust, and that no resulting trust can arise. If a resulting trust could have arisen out of the same facts, how could the Judges in the criminal cases decide that the evidence was immaterial ? If it could raise a resulting trust, the evidence was most material. There has been a conveyance in the present case of the legal estate to hi« supposed trustee. By getting a conveyance of the legal estate, it can only be got out of him by his being declared a trustee; it is sought in this action to get itf out of him in spite of the Statute of Frauds. If the equity is in the plaintiffs, they can nOw declare the trust, and obarge that land with the trust they choose to declare. If they cannot declare the trust, the equity is not in them. I submit that tbe Court is really asked to give a judgment which, in effect, amounts to a repeal of the Statute of Frauds ; that the Court is asked to give a judgment which amounts to this : aocording to the mind of the Court these facts are so shocking that -> c cannot allow you to take the benefit of the' Statute of Frauds.

Cases cited:—Story'e Equity, seo. 1201 a, | 9fch cd.; Perry on Truete, eeoe. 78, BX, 83, 84, 85,134,133, 4 and 5 ; Lawin on Tjrusts, pp. 148 and 9; Kent's Commentaries, vol. 4, p. j 332 ;" SugcTen's vendor and pur., 14th. cd., ! pp. 149 and 50; Dart's vendor and pnr., 4th cd., p. 852; White and Tudor's Leading Coses, vol. 1, pp. 174 and 5; Russell on Orimei, vol. 3, p. 19, sth cd.; Burdett v Pickersgill, 1 Eden p. 516; Bartle v Hutchinion, 2 Veeey, 627, and cases cited in Sugden ; Dave v McKenzie, 37 L.T., 5.8., p. 219; Heard v Pilley, L. J., 4 Oh. App., p. 548 ; Bex r Boston, 4 East, p. 572 ; Rex v Benerecker, Pedro's Add. Cases, p. 93; Box v Danston, R. and M., N.P.R. 109 ; Burden v Sheridan, L 4 American Keport* (Iowa), p. 505 ; Henderion v McKenzie, N.Z. Jur., vol. 1, n.s. p. 47; Pollock* Principles of Contract, p. 235. The Court intimated that they would hear Mr A. Whitaker, for the respondent, next day it 11 a.m. The Court then adjourned. FBIDAT, NOVEMBER 15. TJefore their Honors the Chief Justice, Mr Justice Justice Johnston, and Mr Justice Williams.] The hearing of this case was resumed. Mr A. Whitaker, for the respondent: I do sot think it necessary to read the pleadings igain. There are two grounds on which I lubmib that the respondent must succeed. Che first and more important is that this is an iction not to enforce a trust of lands, alleged ;o be created or declared by the parol agreement of the parties, but is an action for reief by a principal against his agent in respect >f a fraud by the latter, committed in hie iduciary character of agect, in which case the Statute of Frauds does not apply ; or, as has seen said, this Court "will not allow the Statute of Frauds to be made an instrument jf fraud." The second ground on which I rely is that demurrer is not tho proper way in which this question can be decided. As to the first ground, I |*ould refer the Court to the following authorities:—Taylor on Eviiencs, vol. 11., p.p. 884, 930 (which lays the foundation of all these cases) ; Leee v Nuttall, Tamlin's Reports, p. 282 ; also in R. and M. Reports, vol. 1., p. 54. The defendant in this case is a solicitor. [Per Curiam That does not appear.} Then I would ark to amend the declaration and make it so appear. [The Chief Justice —That can only be done on payment of ell costs in this Court and the Court below.] Mr Eesketh—l will consent to the amendment on those terms. Mr Whitaker did not press the application, The case of JJartlett v Pickersgill, relied on by my learned friend, would hardly be congidered law at the present day. Although that case has not been distiuotly overruled, (till it has been very much donbted by judge! of the present day. I wouH also direct the Court's attention to the case Bank of Londor v Tyrrell, 27 Bev&n, p. 273 ; and Haig v Kay 7 L.R., Oh. Appeals, p. 469. The latter is s very much stronger case. Here then was an absolute conveyance to the do fendant Kay, and it appears to mc to b< a case which falls exactly within the 7tt section of the Statute of Frauds, because a the time of the conveyance he ought to havi required the declaration or creation of a trus or a confidence in himself for the purpose o showing how the defendant held the property The next cases to which I would direct th attention of the Court are—Hobday v Peten 28 Bevan, p. 349 ; Taylor v Salmon, 4 M. an< C, p. 134 ; Childors v Childero, 1 DeGex am J., p. 492 ; Lincoln v Wright, 4 DeGex am J., p. 16; Divies v Otty, 35 8., p. 208; Lloy v Spillet, 2 A., p. 150 ; Wood v Midgk>y, i DeGrex and McN. and G., p. 45 ; Nicholson 3 Irish Reports, "eg., p. 308 ; Heap v Pilley, 4 L.B. Ch. Appeals, p. 548; Carte v Palmer, 8 C. and F., p. 657; Baker Whiting and others (American case) ; Zinn' Leading Cases on Trust, p. 136 ; Blair Bromley, 5 H., p. 542 ; 8.-cc v Holbeck, 2 D p. 654 a ; Trevellyan v Charter, 11 C. and F p. 714 A large number of t«xt books wei quoted by my learned friend yesterday. wish to moke a few extracts from two ( three of them, which will throw quite a di ferent light on the subject. The first to whic I shall refer is Perry on Trusts, section 206 Kerr on Frauds, pp. 123 24; Spence'e Equil Jurisdiction, vol. JI, p- 203 ; Tesker v Jarv (Judge Richmond's decision at Nelson : banco) Cave v McKenzie, L.J., 46, eh. 564 and Henderson and another v McKenzi "N Z. Jurist," H. 8., vol. 1., p. 47. We contei that in this caee the seventh e?ction of tl Statute of Frauds does not apply; there ie n trust or confidence. [Johnston, j. —The nata of the fraud i> this, that the plaintiff abstain! from going to purchase the land, because I had an agent ready to do it, and the age: found he could get a good bargain, apdboug is bit own name, and stuck to it/] Then,

to the second ground on which I submit the appeal must be dismissed, —namely, thatde» murrer is not the proper way in whioh this question can be decided.—l contend that the proper course would have been for the defendant to have pleaded, and if judgment was given in favor of the plaintiffs, it would have been open to him to move that judgment be set aside, because there was not sufficient evidence of fraud. The leading oase on that point is Davies v. Otty, 33 8., p. 540, which is an authority on the point that the right way to raise the Statute of Frauds is not by demurrer. Young v. Austen, 4 L 8., c.p., p. 553; Wood v. Midgley, 5 De Gex and Me_f., p. 41. I submit that the proper way to determine this question is not by demurrer, and that therefore upon that and the first g-fo-__.-_<l to which I referred the appeal _n___.___.fc

my learned friencl tiaa tailed to deal altogether with the prominent points and features OT | this case. With regard to tbe numerous cases quoted, I would submit that they are to ■be classified under three beads. First— Cases between principal and agent, under which X B__ttn__it Taylor "*c-_ Sahno-J- TT«-«-i-r- -v. __.illey_ a_ocL Gave -v. __S___c.t__.-ti_ ss ie come. _____ these The second class of cases are cases betvreen solicitor and. client, nnder which head falls the Bank of London and Tjrrell and Lees v. Nuttal. The third class of cases are cases between the grantor and the grantee direofc, under which form -Eftug y, Kay, Booth v, Turk, Payiea y, Ottey, and Lincoln v Wright come. In none of those ca.es has the plaintiff to adduce evidence of suoh agency as the statute requires to be in writing. This is a case where, if I , may use the expression, statutory evidence, competent proof, is required. The proof of | the relationship of principal and agent in a case of this kind is by statute required to be in writing. I don't mean by that that the relationship must be created by writing, but there must be a writing from whioh it can be shown, on the authority of all I stated yesterday. This is an aotion to have an express trust declared. The plaintiff is asking for an express trust to be declared, and the Statute of Frauds says, " You are only entitled to it when you have a writing." The plaintiff cannot get this land unless the Court find that the defendant is a trustee. The other side say that there is a resulting trust; we say there is an express trust. The plaintiff cannot get what he is asking for without invoking his agreement with the defendant. He must call that agreement to his aid. I*.o resulting trust cm arise if the plaintiff "must invoke the agreement with the defendant. The authorities lay down the principle that an agent cannot benefit himself at the expense of his clients. The case is essentially one of principal and agent, not of trust. There would be no question to disouss if the agent employed to buy in his principal's name had bought in the name of the prinoipal; but it is when he is employed to buy in the name of his prinoipal, and he buys in his own, that the case can come into the books at all. The learned counsel then proceeded to comment, at considerable length on the authorities cited by the respondent's counsel. The Court reserved jude-nent.