THE SECRET CASE.

Dominion, Volume 4, Issue 1111, 26 April 1911, Page 4

THE SECRET CASE.

ACCOUNTS IN A TRUST ESTATE. ; WRIT TQ:;ISSUE, DECISION: OF THEjiPPEAL COURT., SMALL VARIATION, m THE ORDER. Another scene in wbat has become known as "The Secret Case" was enacted yesterday hiorning when the Court ,i>f Appeal, comprising' Mr. Justice Williams, Mr. 'Justice Edwards, Mr. Justice : .'Dehnistqn, and Mr. Justice Copper, gave its decision in thq case Thomas ;• Kennedy-,'Macdpnaid, appellant,., and. Mary Rose, Janet Mackay Rose, Ellen ■"•. Greenfield, and John. Green- . ; field, the respondents. ■'."v At the hearing Mr. A. \V. Blair had appeared for tho' respondents and 'Mr* C. H..'.'.' Treadwell for tho appellant. ' JUDGMENT OF THE COURT. -The judgment of the Court, was de- • fiiyered by.-.Mr. Justice Edwards. This, : 'said his Honour, was an appear from - .an order of the Supreme Court, made :■'.' ;on,Fobruary 10' last, whereby leave was 'granted to the respondents to issuo a writ-of attachment'against Macdouald ;fby; reason of liis having failed to eom|p]j* an- order, of the; Court made ;by consent on December-22, 1910. This 'last-mentioned order was made in a suit wherein the respondents were plaintiffs and the appellant was defendant., /, The suit was brought against the appellant.'as trustee of the respective esi tates of' Ellen Greenfield, deceased, and , : 'Robert Mackay ; Greenfield, deceased. \ : ; The prayer was that an account might '-. ib'e'takeh:df the'assets taken possession :pf'by the appellant,,.as such trustee, and that the appellant might be ordered ,- to pay into Court such sum of money as might'be found oh the taking of the- : .siccounts to,bo due and I owing by the K iapppllant to such trust estates. On '.April .19,. 1907,: an order was by conjscnt made that the accounts so prayed I •'■should be' taken before the Registrar ; of the Supreme. Court at Wellington. (The accounts so ordered were taken aci 'cordingjy' before the Registrar and an ■accountant. V

-,v "A Surcharge of £240," : t'TJpon. the taking of such accounts the appellant was'surcharged with a sum ■••• of £240, as to which iho Registrar arid reported as follows:—• j. r" With reference tea. further sum' of , £240 paid to the said Thomas Kennedy •Macdonald on Juno' 21, 1902, by Sid- ; ■iiey Cooper Leary, being half share of .commission, less £10 expenses, paid to ■the said Sidney Cooper Leary, by James . jltockie for'-the sale of tho sharo of said James Lockio in the said Wai>moa Block; and which sum the said (Thomas Kennedy Macdonald claimed. ■ jfrom the said Sidney Cooper Leary for [ obtaining, .the consent of the said. [Thomas, Kennedy Macdonald as trustee .. .of the Greenfield estate, part owners of : |the said block, to the purchase by the ' their co-part-.;ners-m tlie; said block of the said share of the said James" Lockie; we are of '/°P. I ,p, l iv i that; together , : .witfl :interest thereon at the ■ rate of ■fjs Per cent;.per annum.: from June 21, 1902, up of payment,- should be surcharged against "the said Thomas : Kennedy,Macdonald, on thegroundthat ; he was acting as trustee on behalf.of :% sandjGisenfield J&ltate in connection ! with the..said 'purchase,:. -and as'such ,is not entitled, to pajticipato in any commission'oil'the' said' purchase; and that such* sum. of £240, with interest ias aforesaid; should be, credited to.the . trust'estate." ~ ; : ' '■'..:■■' ' '■ >•••

_ROn a motion • fer vary this report, his Honour .Mr, Justice .Cooper held that the surcharge of £240 hail heen properly, made. . ■'■': '■" .' '-..■■.■

■ .'By- a-further report,' made on December 17, 1910. the, Registrar and accountant reported that the appellant was indebted to the trust estate of Robert Mackay Greenfield, deceased, in the sura of, £142 17s. 6d, in, respect of interest ,upon ratfrieys' misapplied 'by him. The affidavits show that this sum, was avriyed at by agreement befaveen the soli:«itp}5 V .fflr v thespartics.- ! i. ■.■' •■■ - What; the Supreme, (Jourti Ordered. ;On December 22, 1010, an order of the '.Supreme Court was madein .the followjing .terms :e-"TJpon reading the-motion ; paper .filed .herein, and the affidavit of j Sydney, Cooper. Leary. in support thereof, ;and upon hearing; Mr. A. W. Blair, of co.unselfor the above*nained plaintiffs' 1 and Mr. C. H. ; Treadwell, of counsel for .the above-named, .defendant, and by- con- ."• .sent; it.is ordered .that: the,above-named defendant to pay kto Court the sum of •£2606 Us. lid., '"being-- the' .amount ; agreed; upon by the '.parties' as '• duo by J the aboyeriiamed defendant-as trustee of :the estate 1 of; Ellen Greenfield, deceased, 'and alsj) that,the defendant do, pay'-into : Court the ..sum : of £950 85."'43.," being .the amount': agreed -upon as being due ,-?by; the defendant asitrustee of the es,'tate of Robert Mackay -Greenfield, deceased ; and it is further ordered that ■this'order is to remain <jn abeyaiico'iin- -. til February 1, 19.11, -and that notice of ,any application thereafter to •; be :'mado '.■upon, this -order shall be;served' upon the defendant; and it is further'ordered

that the costs of and. incidental to this order, be reserved.-",''-"

, The sums mentioned in the order above.set out included the-sum of £240, with which the appellant had been surcharged in- taking the 'accounts, and also the sum of £1-12 17s. 6d. for inter-' est allowed against the appellant, as already mentioned:".. ."■"'■'_ ..'...;. Leave to Issue Writ of Attachment. The appellant having failed to comply jrith the order,of December 22, 1910, the respondents moved the Court for leave to issue a writ •of attachment .against him,in respect-of such non-com-pliance, in so.far as such non-compli-ance related to the sum of £3504 os. 9d., being the total amount of, the .two sums mentioned in the order of' December 22 1910, less the sum of £142 17s. 6d.' which represented interest allowed against the appellant, as already.mentioned. On February 10 last an order was-.made by their .Honours the Chief Justice and Sir.-, Justice. Chapman granting; to the respondents leave to issue a writ of attachment against the appellant accordingly. From this order the present appeal is brought. Upon the argument before the Court, various objections made to the order appealed-from wero over-ruled by the Court during /the course of the hearing. First, it was urged that the moneys, in respect of the non-payment of which the order of February 10 last was made, are not, in the possession or control of the appellant, within -the meaning of the Imprisonment for Debt Limitation Act, 1908, Section 3, Subsection 2 (c). That the appellant .has not the funds now available to meet his liability in respect of these moneys is, no doubt, true. But all the cases show that it is no answer under the statute for a trustee who has been ordered to pay trust moneys into Court, or to a party to. the action, to say: "I had the moneys,, but I have spent them, and I have now no means to meet the liability." To support - this proposition it is sufficient to refer to I ho case of Middieton v. Chichlster, C Ch., Ap. 152, in which- it was very clearly laid down .by Lord Hatherloy, L.C., mid James Hellish, l.s.s: "Misappropriated Trust Funds." Then it was .said.that the action, in connection with which the -order -appealed from has been made, is an action

for the recovery, of debt or damages, and that the power of the Court - to enforce its order for, payment by attachment -has' been-taken away by Ru10'392 of the ' Codo of Civil Procedure No doubt the relation of debtor and . creditor does, in a sensoi exist between a trustee, who has misappropriated- trust.'fluids; and thoso to whom tho misappropriated funds belong ; but the relation between the parties is : something -more than tlip simple .relation, of debtor and creditor. Tho remedies with respect to a debt arising in such circumstances are not the same as those in an action for a simple debt. Tho action must bo a claim for specific relief, not the ordinary action for debt. In the course of such an action tho defendant; imay \i be ordered to pay into Courts any! -moneys, which prima facie appear%i,be.'owJng'Ay.. him, butthis is .liot-'tho'.case-iii'vatffacti'on of debt, even \vhen : 'tiiat''debt- : 'nnsei. : ;from what is called a constructivetrust.,'..This is very clearly shown in the judgment of Cotton, L, J., in Lister.and, Co..v. Stiibbs, 45 Ch.-Div. 1, to;whicli ; wq shall later on Prefer, more at .length' : fbr; another purpose.-- .The. collocation.- -of the words {'debt or/-damages';- in' Rule 592 shows, in.biif..opinion, .quite clearly what.is meant'oy thatrule. '.It means merely thata;writ.of attachment'.sliaU not issue to enforced judgment 'man ordinary action for debt" arising without delinquency, or for the recovery of'damages. [Tho word /'debt'.'"in this rule refers to the common law action for debt,, and does, riot include the equitable action which formerly could have been brought only in a Court of Equity. To hold otherwise would be to hold that Rule 392-of the Civil Code has, in effect,repealed Sub-section 2 (c) of Section 3 of'tho Imprisonment for Debt Limitation Act, 1908. ,'i_. ■ Then it was contended that the effect of Rule 392 .is-that writs of. attachment can issue only in respect of.-.tho disobedience of final:.", judgment?; and that.the-order of is not a final judgment:';';-TJle;; : ahswer to this contention is that the word . judgment" is not used' in the code in any such.limited sense. Rule 29.4 ,says that "a judgment may be either final or may direct-such accounts to be taken, inquiries made,-or other acts done, and proceedings instituted, as the Court giving judgment deems necessary, and may give tho conduct of the action subsequently to judgment to'such party to the action as the Court thinks proper. 'Rule 348 explicitly provides that every order Of the Court raay.be enforced in the same manner as a judgment to the same effect." If the contention of the appellant's counsel, upon this point were correct, it would follow that not only every order for payment of a sum of money would be nugatory, but that every interim injunction granted for the protection of property might bo disregarded with impunity. It is not in dispute .that a writ of attachment' cannot bo issued in respect of.any sum which includes interest upon mone'vs misappropriated, /tho reason being" l tliat such interest can never be said to have been in the possession or control of the defendant. Upon this point the case of Middleton y. Chichester 6 Ch. Ap. 152. which has been followed in many other cases, is conclusive. The same principle, of course, applies to,the non-payment of any sum of monev,: included in an order of the Court'for pavment, which is not, and •has not-at any time been, m the possession, or, control .of .fte defendant.clothed witlra trust."

, : , ~,,T(irea. Questionsjo? .peeision., The substantial questions which .this iCoiirf'ha's.to decide are three m num- ■ V) Whether or not, in view of the fact that the order of December 22, 1910, included in the sums ordered to be paid a sum for interes^withputdistinguishing ..- principal flfrtaftliiterert? a writ'of attachment may issue, in: respect of so : mucli of such sums' as represents principal, upon, proof, 'on the motion, for,leave to;;issue- the wrrt,-o the respective'amounts of interest 'of whicli the sums mentioned in that-order, are in 'fact compounded, (2) 'Whether or not the sum of surcharged against the; appellant ;is, in the circumstances above-stated, ; a sum whicli is in the possession or control of the appellant within the meaning of Sub-section 2 (c) of Section 3 of tho Imprisonment for Debt Limitation \Act,-4i908V'. : : h vir,*4s '•:" •''W'Whether or not the order ot February 10 last can, if necessary, be varied or amended,'so as to cqiinno its operation to 'moneys in respect of tho non-payment of which a writ of attachment : may be issued? ! ,, .. Tho First Question Answered. In our: opinion, continued Mr... Justice Edwards, the answer to. the first ot these questions must be that if it can be shown conclusively from the pioceedings>in "the afctJon\';mlw:bi!sli tho order for pavment is made, how; much ot the"sum wn'ich'Hhe'-rlefehdafit bordered to pay is the principal of the moneys misappropriated, and.how much is interest, then an order granting leave to the plaintiff'to issue a-writ of attachment in respect of the principal sum only may properly be made. The'reasons wby.-leaye should not do wrahtecl in respect "of-a sum": which, includes both principal arid interest arcvery clearly stated in the judgment of Lord Hatherley, L.G.V in whicli Lords Justices : James and Melhsh concurred, in'lVliddletori'V.''Chichester';-'6-'Gh. - Ap. 152 (1871). This caso is not ah authority to show that'an'order for the issue of a writ of attachment cannot be made, if it can be shown clearly upon tho application how much of the sum included in the order for payment represents principal money misappropriated, and how much interest which tho defendant has. been ordcrod to pay m respect of such principal money. In re Hickev: Hickey v. Colnicr, 30, W.R., 53 (18S6)—We do not think that Mr.- Justice Kay meant'-to go beyond the'authority of Middleton. v.,..Ohichester. Tho question to be determined upon this .point was in no way before ■the learned Judge, and we cannot think that tho chanco use in an unconsidered judgment of words which are a little wider than were necessary can be relied upon as an authority upon this point. •In "Brewster'v. Prior, 3, T.L.R., 590-' (1887), the judgment m respect of which.leave to issue a writ of attachment was sought did not upon its face show that tho defendant was a trustee, nor did it. show that it was in respect of moneys which were in tho possession or under the control of the defendant'. " Tho plaintiff was allowed by 'Sterling J. to go behind the judgment for the purpose of establishing these facts; and, having established them, an order granting leave to issue a writ of attachment was made.' . If it is allowable to go behind tho order for this purpose, we are unable to see what logical reason there can be for "refusing to allow the plaintiff to go behind tho order for tho purpose of establishing how much of the sum named in the order represents capital moneys misapplied, and how much represents interest allowed consequent upon such misapplication.

Authority for Questions 1 and 3. . '. This question lias, however, been expressly ■ decided in In re Lord . Berwick: Berwick v. Lamb, 81, L.T., 722, on appeal, lb. 797. Tho same case, on appeal, has also decided the third point which this Court has to determiner—namely, whether or not' if the order granting leave- to issue a writ of attachment is made in respect of moneys wk»ch are not properly tho subject of such an order, as well as' in respect of moneys which are, the order can bo amended or varied' on appeal, so as to confine its operation within duo limits. Tho facts n : s stated in Berwick v. Lamb are as follow. Under the will of,the.fifth-Lord Berwick, the persons entitled to the possession of'the Berwick estates might sell the heirloonj/j,

but were to replace them out of the proceeds of sale by- articles of a similar character. The': defendant Lamb was a co-trustee with the seventh Baron, tenant for life of the Berwick Estates. The seventh Baron, with the consent of the defendant, sold • the heirlooms for £4100 to Wortlieimer, and received tho money, but did not purchase otherarticles in their place. Tho purchaser paid the defendant £200 in connection with the salo- of tho heirlooms. Tho defendant also received £200 from a Life Insurance Society as •. commission for effecting insurances on the life of the seventh Lord Berwick. The seventh Lord Berwick paid back £631 7s. (3d. out of tho purchase moneys of tho heirlooms, and died. The estates then passed to the plaintiff, tho eighth Lord Berwick. Tho plaintiff recovered judg-. ment in an action against the defendant for £4300, less-£631.75. 6d., and for £200. ,The £4300 included, without distinguishing it; the sum of £200 paid to tho defendant by Wertlieimer in connection with the salo'of tho heirlooms. The sum of £200 separately mentioned in the judgment represented the sum paid to tho defendant by tho Lifo Insurance Society as commission on insurances effected on the life of tho seventh Lord Berwick. Tho defendant failed to comply with tho judgment, and the planfcifF moved for leave to issuo a writ of attachment against him in respect of the whole of such sums. The .writ was refused by Judgo Kekewich. so far as concerned tho sum of £4100 paid to tho seventh Lord Berwick, because that sum had never come into the possession or under the control of the defendant. It was.granted as to £200, part.of tho sum of : £4300, being the sum paid by Wertlieimer to the defendant to induce him to consent to the sale of tho heirlooms, and as to tho £200 separately mentioned in the judgment, being the sum received by the defendant as commissionon the insurances effected on tho life of the seventh Lord Berwick. As to the first point under, consideration, the learned judgo said:—"lt was said that Lamb was not ordered to pay £200, but only £4300 less £631 7s. Gd. That might be,a technical argument for not sending a man to prison, because as a fact he was not ordered to pay £200. The answer to that is that ho was ordered to. pay £4300, less' £631 7s. 6d., and I see no difficulty in dividing up the separate amounts." The defendant Lamb appealed from the order of Judge Kekewich. .The ..appeal came■ before Lindley,' M.R., -and ' Williams . and •Romer, L.J.J. Judgment on the appeal was given-by the Master of the Bolls, Lords Justices "Williams 'and Eomer concurring. It.',is very short.'' "This case,'_' said the Master of the Rolls, "is divided into two parts. First, with reference to £200 received by-Mr. Lamb in cqnnection with the sale of tho heirlooms. I am of opinion on the evidence that his appeal is hopeless. He' cannot justify the retention of this sum. Then, as to Mr. Lamb's arrangement with the Norwich Union Lifo Assurance Society, under which he received £200 as commission on premiums paid by tho late Lord Berwick on policies on his life, it is plain that at tho time when Mr. Lamb received that money ho was not a trustee. He says it was merely a payment to him in the ordinary way as agent of tho Insurance Company only. That might require consideration, but by the judgment in. tho administration action of July 12, 1899, from which ho has not appealed, it has been declared that he is not entitled to retain that sum, 'and ho has been ordered to pay it .to thoplaintiff.. 'Assuming ;tliat;-,, judgment stands, is it a caso iirwhich" the order as to that money ought to be enforced by. attachment? I do not think it is. I am of opinion it does not-coino within tho exemptions mentioned in Section 4 of the Debtors Act, 1869. 'Therefore, attachment must not issuo in respect of tho £200 received by Mr: Lamb' from tho Insurance Company. The order-of Kekewich, J., must bo -varied, and (•attachment will issno in respect of tho £200 received in connection with the sale of tho heirlooms only, but as the order for attachment stands, though the amount payable has-been reduced, the appellant must pay tho costs'of tho appeal."

This case, therefore, is a, ''distinct authority for two propositions 'which cover the first and the third questions which this Court has to' determine. First, that where a judgment or order directs payment of ono sum which in fact is compounded of two sums, in respect of 1 one of which .a writ of attachment may issue,- while, in respect of the other it may not, -the Court, in order to ascertain the respective amounts of the two sums, may "ro behind the judgment or'order, and may grant leavo to issuo a writ of attachment in respect of the sum to which that proceeding is applicable; second, that if the order granting leavo to issue a writ of attachment is too wide, and embraces as well a sum to which thit proceeding is not applicable, •as a sum in respect of which it may properly bo applied, tho Appellate Court may vary the'order so as to bring.it within its due limits.

As to the Second Point. The case also appears to mo. to be an authority upon' the second and only remaining point with which this l Court has to deal—namely, whether or not the sum of. £240 surcharged against the appellant is, in the circumstances of tlie case, a sum which is in the possession or control of the appellant, within the meaning of Sub-section 2 (c) of Section 3, of the Imprisonment tor Debt Limitation Act, 1908. In our opinion it is not, and wo think that tiie judgment of the English Court of Appeal m Berwick v. Lamb establishes that it is not. The reasons of the English Court for treating differently the two sums, each of £200, in question in that case are not clearly stated in.the report, but they appear to us to be fairly obvious. The sum of ,£2OO. paid by Wertheimer. to the defendant to induce him to consent to the sale • was neither .more nor less than part of the purchase money for the heirlooms. It was money clothed with a trust from the moment that the defendant Lamb received it. By no process of sophistry could lie ever have supposed that it was honestly, his money to deal with it as ho pleased. ' As to tho £200 received from the Life Assurance Company, . the matter stood upon an entirely differnet footing.' That money when paid over to the defendant, was not money in which Lord Berwick had any interest. It was tho money of the insurance society. The defendant Lamb could only have been held liable to the plaintiff on the ground that he occupied, in some way or another, a fiduciary position in connection with tho matter. In all such cases as is shortly stated in "Lewin on Trusts," eleventh edition, p. 196, "a constructive trust is raised by a Court of Equity wherever a person clothed with a fiduciary character gains some personal advantage by availing himself of his position as trustee, for, as it is impossiblo that a trustee should bo allowed to mako a profit by his office, it follows that so soon as the advantage in question is shown to have been acquired through tho medium. of a trust, the trustee, however good a legal title ho may have, will be doomed in equity to hold for the benefit of his cestui quo trust" (beneficiary under the trust). To this must be added (as is stated at pp. 203. 204, of tho samo work) that "until some judgment or decroo has been obtained Hie money cannot be said to be the monoy of tho principal." Tho authorities unon this point are perfectly clear and conclusive: Metropolitan Bank v. Heiron, 5 Exch. Div. 310, Lister and Co. v. Stubbs, 45 CD. 1, 13. in which the Court of Appeal affirmed the decision of Sterling J., in re Thome: Vinnnt v. Ratlcliffc (1B91). 2 Oh. 360. Tho sum received by the defendant Lamb as commission from thp Life Assurance Society in the case of

Lord Berwick v. Lamb was not, therefore, the money of Lord Berwick when lie received it. A writ of attachment could not therefore issue against him in respect of that .sum-because it was not, when he received it, money of Lord Berwick in his possession or control. The sum of £240 received by tho appellant in the present case stands in exactly the. same position. It. was not the purchase money of any part of the trust estate. It was a sum paid out of his own remuneration by tho agent,-who effected the sale of Lockie's interest in the Waipaoa Estate to tho appellant, as trustee- of tho Greenfield Estate, and tho other persons interested in that estate, : as the prico of tho appellant's concurrence in the sale. .Obviously the appellant could not bo allowed to retain■ that sum, -when his right .to do so was questioned by the persons beneficially interested in tho Greenfield Estate, but tho authorities are clear that the appellant cannot be attached by reason of his non-payment of that sum pursuant to the judgment. The case in this respect is indistinguishable from Lister and Co. v. Stubbs 45 O.D. 1. The headnoto in that case correctly sums up the effect of the judgments of Sterling J. in tho Court of first instance, and Cotton, Lindlcy, and Bowen L.J.J, in tho Cdurt of Appeal. It is as follows: —"Tho plaintiffs, a | manufacturing company, employed the defendant, who 'was their foreman, to buy for them certain materials which they used in their business; and the defendant, under a corrupt bargain, took from one of the firms, of whom he so bought, largo sums by way of commission, a portion whereof he invested. Tho plaintiffs brought an action against the defendant to recover the moneys so paid to him, claiming to bo entitled to follow such moneys into the investments thereof; and they moved, for an injunc- ' tion to restrain, the defendant from dealing with the investments, or for an order directinghim to bring tho moneys or the. investments into Court. Held' (affirming tho judgment of Sterling J.) that the-, relation between tho defendant and the plaintiffs was that of debtor and. creditor, and not that of trustee and cestui que trust, and that.tho plaintiffs were not entitled to the order." • " '■ . ' A Corrupt Bargain. Cotton, L.J., in -the course of his judgment, said:—"Tho case here is this: The defendant, being in the confidential employment of tho plaintiffs, made a corrupt bargain with persons who supplied the partnership with dyo - stuffs. The bargain was most manifestly corrupt, but does that make tho'money, which tho defendant received in pursuance of that bargain, tho money of tho plaintiffs? Mr. Justice Sterling, in' the course of his judgment, referred to my decision in the case, of the Metropolitan Bank v. Hciron 5. Exch. Div.. 319. I think that I took a correct view in, my judgment in that.case; and in my.opinion this is not the money of the plaintiffs, so as to make the defendant a trusteo of it for them, but it is money acquired in such a way that, according to all rules applicable to such a case, the plaintiffs,' when they bring the action to a hearing, can get an order against tho defendant for tho payment of that money to them. That is to say there is a debt due from the defendant to the plaintiffs in consequence of the corrupt bargain which ho entered into; but tho money which ho has received under that bargain cannot, in tho view .which I take, be. treated as money of the plaintiffs, which was handed by them to the defendant to be paid to : : Messrs!; Varley; in, discharge-of the debt duo \by J tho 'plaintiffs ••' to 'Messrs. Varley oh tho '-contract" between them. When the facts are ascertained the plaintiffs will have tho opportunity of sotting aside -tho contract altogether, and returning tho stuffs, or, without setting aside-tho contract, :of suing Messrs. Varley for tho money, 'which they have fraudulently handed over to tho defendant. But in my opinion tho moneys which, under this corrupt bargain, wcro paid by. Messrs. Varloy to the defendant cannot,bo;s'aid,to be. tho money of tho ' plaintiffs before' "■■' any judgment or decree in some such action has been made." Lindlcy, L.J. observed: "Tho real state of the case as between Lister and Co. and Messrs. Varley and Stubbs is' this: -Lister and Co., through-.their agent Stubbs,- 'buy. goods of.jMessrs. Varley at certain prices, and pay for them...Tho ownership of the goods is, of course, in Lister and Co.; the ownership of the money is in Messrs. Varley. Then Messrs. Varley have entered into, an arrangement with Stubbs, who ordered'tho goods of them, to give Stubbs a commission; That is what it comes to. .What:.is the -legal.position between Messrs. Varley and Stubbs? They owe him tho money. Ho can recover it from them by an action, unless the illegality of the transaction afford them a defence; but the i appellants havo asked us to go further, and to say that Messrs.. Varley were Stubbs's agent in getting his commission from Lister' and Co.- That appears to mo to be an entiro mistake. The relation _ between Messrs. Varley and Stubbs is that of debtor and creditor. They pay him. Then conies tho question, as. between Lister and Co. and Stubbs, whether Stubbs can keep the money he has received without accounting for it?. Obviously ,npt. ..I. apprehend that -ho 'is liable to account for it the moment that he gets it. It is an obligation to pay and account to Messrs. Lister and Co. with or without interest, as the ' case may be. I say nothing at all about that. But the relation between them is that of debtor and creditor; it is not that of trustee and cestui que trust." No, Attachment for the £2«o. The sum of £240 received by the appellant from Leary as the prico of his concurrence in the sale of Lockie's interest in tho Waipaoa Estate was not therefore moneys of the Greenfield Estate at the time when he received.it. He became liable to account for it, and judgment. has been properly recorded against him in respect of that matter. But until that judgment had been pronounced this sum could hot be said to be moneys belonging to, the Greenfield Estate. He cannot, therefore, bo attached for non-payment of that sum. The result is, therefore, that the order of February 10 must be varied by deducting from the sum therein mentioned the sum of £240. Subject to this variation the order must stand. The Question of Costs. . There remains the question of costs, said his Honour. Tho respondents had under consideration the question of what moneys should be deducted from tho sums mentioned in the' order of December 22 last before they moved for leave to issue a writ df attachment, and they should" have seen, that the proper deductions were made. They failed to do so, and the result of this appeal will bo that a bad order will be made good. The appellant has partially succeeded, and ho was entitled to como to tho Court to obtain even that small measure of success. Ho docs not, however, appear to have raised tho point upon which ho has succeeded in tho Court' below. Wo think that there should be no costs to eitlier party. Mr. Justice Williams, Mr. Justico Deniviston, and Mr. Justice • Cooper concurred. Security for Costs Returned. Mr. Treadwell remarked that £100 had'boon paid into-Court by way-of security for costs only. Counsel'said he presumed ho would bo entitled to take that out. Mr. Blair said tho money had been paid in for a particular purpose, and that purpose having failed ho supposed appellant would bo entitled to take it out No further objection was raised. Stay of Proceedings Asked For. Mr. "I presume, your Honours, there will be a further stay

of proceedings until his Honour, who deals with the matter in the ■Supremo Court, makes an appointment." Mr. Justice Edwards: "Is it necessary? I don't suppose," ho added, "that Mr. Biair wants him (appellant) to remain in custody until dealt with?" Mr. Blair did not think ho should bo bound to terms. What ho proposed to do was to get an appointment from tho Judgo as to the date on which he would ;ti\ko tho matter. Mr. Justice .IMwards: "Wo can't stay it. We made tho'order'. Mr. Blair does not wish to be oppressive." Mr. Blair: "No, your Honour, certainly not." Mr. Justice Williams: "Tho matter must bo left io tho judgment of the parties themselves." What the Judgment Moans. Tho result of tho abovo judgment is that tho plaintiffs in tho original action have leave to issue a writ of attachment in respect of the sum of £3264 ss. Otl. Wo understand .that the ordinary procedure which" is followed insuch cases is that after obtaining an appointment from'' the Judge or' Judges who will hear tho matter, the plaintiffs, seal the writ ■■ of attachment, .which writ' is addressed to tho -sheriff- ana commands lim to attach' the defendaut and bring him befoio tho Court upon a dato appointed',• there'to answer -any matters that ■ aro laid to his charge. The defendant is brought "before tho Court under arrest and" given an opportunity to show causo why he should not he ' imprisoned. Under tho Imprisonment for -Debt Limitation Act, tho maximum punishment -'which' the Court can inflict is twelve mouths' imprisonment. It is understood that' Miv Blair, counsel for tho plaintiffs,'will askj-'at "'-' lO o'clock this morning that, /bo fixed as above; "-'"-' : " : ' '-'"■ '".'