THE COURTS—TO-DAY.

Evening Star, Issue 7475, 20 March 1888, Page 2

THE COURTS—TO-DAY.

SUPREME COURT—IN CHAMBERS,

(Before His Honor Mr Justice Williams.)

Wakd v. the National Bank.—This was a f.ummons for directions " to proceed with the accounts directed by the decree herein, and to show cause why there should not be given directions as to the manner in which each of the accounts should be taker." His Honor now delivered judgment as follows : It is clear that the LI.OOO debited to King's account on the 2nd April, 1879, represents the L'l,ooo secured by Mr Ward's first guarantee of the 3rd of October previous, and that the sum was properly brought to account on that day, as the term of the guarantee had expired, and tho guarantee had thenceforward ceased to be a continuing guarantee, and had become simply a guarantee for a past overdraft. This would distinguish the case from Henniker v. Wigg, 4 QB„ 792, and City Discount Company v. M'Leau, LR„ 9 C.P., 692, and bring it within the principle of such a caso as in re Boys, L.R., 10 Eq, 467. If therefore this particular debt of LI.OOO has, as between King's assignee and the bank, been liquidated either wholly or in part, so far is Mr Ward exonerated from his liability as surety for this sum. Now, we have King's bank-book mado up to the time of the bankruptcy. Up to that time, no doubt, the rule in Clayton's case would apply, and tho entries to the credit of the account would be applied to liquidate the debits earliest in date. Up to the time of the bankruptcy, however, the credits were insufficient, according to this rule, to discharge any part of the LI.OOO. It appears from the bank-book that the balance to debit at tbe time of the bankruptcy was some LB.OOO. This amount, followin™ the above rule, is made up from the entries to the debit of the account latsst in date until they reach that amount, and amongst these entries is this LI.COO. King therefore at the time of his bankruptcy was indebted to the bank in a number of separate and distinct debts, including amongst others this LI,OOO, and which amounted in the whole to about 18,000. Now, after the bankruptcy the account ceased to be a current account. King, of course, could not operate upon it, and it was not carried on as between the bank and the assignee. Any sums received by the bank after the bankruptcy in reduction of tho account could only have been in respect of the proceeds of bills or the realisation of othtr securities held by the bank beforj and at the time of the bankruptcy, as against King's indebtedness. Now, as I have said, and as was pointed out by Bramwell, 8., in the City Discount Company v. M'Lean, L R., 9 C.P.. at p. 603, the question must bo determined as if it arose between King (or in the present case between King's assignee) and the bank ; and the question therefore is whether King's assignee would be entitled to say that the proceeds of securities held by the bank at the time of the bankruptcy and realised afterwards must be applied to extinguish the earlier items to the debit of the account at the time of the bankruptcy. I think it is clear the assignee would not bo so entitled. Assume, for instance, that of all the amounts owing at tho time of tho bankruptcy the LI.OOO only was provable. The bank in such a case would cltarly have had the right to prove for that amount and to appropriate tho proceeds of the securities to the other amounts. As between the creditor and the assignee l the

creditor holding a security not specifically applicable to any particular debt is entitled to apply it in discharge of whatever liability of the bankrupt he may think fit.— (Ex parte Johnson, 3 De G. M. and G., p. 238; Notes to Tudor's L.C. in Mercantile Law, 3rd edition, p, 35; 2 Griffiths and Holme?, pp. G4O and 641, and cases there cited.) As stated by Lord Truro, in ex parte Johnson (at p. 230), to say that the creditor may, at the bankruptcy of his debtor, appropriate bis securities to whatever part of the debts and liabilities of the debtor he may think fit, and yet to say that he must apply the proceeds when realised in dis.haitfe of the earlier dubt, is to assert two contradictory propositions. Having had this right originally the question now is whether the bank has so acted as to preclude them from now insisting upon it. Now, I understood from Mr Haggitt at the argument that he admitted that the bank in their own books had cirried on this account without making a break at the time of the bankruptcy, and had entered to the credit of the account tho various sums received afterwards. Now, if the bank had rendered an account to the assignee or to Mr Ward showing the account so continued, it might have been said that the bank bad elected not to insist upon their right. The mere entry, however, of the amounts in the bank's own books does not bind the bank n( r prevent them from afterwards insisting on their right of appropriation.—(dmson v. Ingham, 2 U. and C, 651.) It seems to me that tho right to appropriate need not be asserted until it becomes necessary for the bank to take some steps to assert it, as, for instance, on a settlement of acoounts between the parties (Wilkinson v, Sterne, 9 Mod., 427); or, as in the present case, when a claim inconsistent with that right u set up as a defence to a claim the validity of which may depend on the existence of the right. If the validity of the claim of the bank to the LI 000 depends on the existence and exercise of the right of the bank to appropriate the making the claim, it must involve the assertion of the i ight and an intention to exercise it. In ex parte Johnson (3 De G. M. and G., 218) the right of appropi iation was asserted and exercised for the first time by a petition to the Bankruptcy Court to prove, although the money had been received more than thirty years before.— (See also Mills v. Fowkes, 5; Bing, M.C, 455; Philpson v. Jones, 4 N. and M., p. 16.) I think, therefore, that the bank are not bound to apply monbys received since the bankruptcy to liquidate the earlier items to the debic of the account at the time of the bankruptcy. As to the point that Mr Ward, by the terms of tbe guarantee, ought not to be debited with bills discounted, it is plain from the decision of the Com t of Appeal that this question cannot now be raised.—(4 N.Z L.R, Court of Appeal, 66). The amount of LI,OCO must, according to that decision, be taken to have been due upon the guarantee on the 2nd of April. The only question open was whether it had been extinguished by payments into the account under the rule in Clayton's case. It was not to extinguished before bankruptcy, and I have now decided that the bank can appropriate the proceeds of securities received afterwards as they choose. A.°, however, Mr AVard on payment of the LI,CCO is entitled to a proportion of the proceeds of the securities, he is entitled, as was admitted by Mr Hagg tt, to an account of them. Costs L 5 53; defendants' costs in cause in any event. He A. R. Livingston - .—On the motion of Mr J. Maegregor this bankruptcy was declared closed ; application for discharge to be made on the 9th inst. Re CiUKUis Battrick, deceased.—On the application of Mr D. Stewart, of Balclutba, letters of administration were directed to issue as applied for. RESIDENT MAGISTRATE'S COURT. (Before Messrs J. P. Jones and D. Wishart, J.P.s.) Judgment was given for plaintiffs by default in the following cases for goods supplied :—H. E. Hart v. J. Penny, LS 9b 7(1; name v. W. WKtt, L 4 15a 2d (Mr Tnorntcn for pl? ; ntifl); J. Kirby v. F. Klingenfeld, 17s Gd.

C. Johns v. J. Anderson.—Cla'm, LI, money lent. Mr Catomore for plaintiff.— Judgment for p)ai*?t'ff, with costs. Ahlfeld B-os. v. A. Bito3u.—Claim, L2 13s. for goods supplied. Mr Wi'kinson for plaint;??, Mr Catomore for defendant.— Judgment for L- lis Id and CO3L3. F. Crai-; v. E. Sullivan.—Claim, (is, for express hire.—Judgment for 2s, without costs. _ CITY POLICE COURT. (Before E. 11. Carew, Esq,, 11.M., and Messrs G. Bell ard J. D. Feraud, J.P.s.) Druxku'nnk.ss, John Arnulrony and George Jlardie were convicted of this offence and discharged. James Henry Oeoi-tje, wbo sa : d t N at he had kept the pledge for years past, was also discharged on promising to take the p'.edgc ogain. Petty Larceny. Annie Whitely was charged with stealing vusterday a can the property of Charles Croxford, and valued at 7s.—Accused said that she was drunk when she took the can.—She was sertenccd to six weeks' i nprisonment, the Bench remarking that drunkenness was no excuse for crime.

By-Law Casks.— An Assyrian named Emki's Zahalis was fined 5?, without costs, for hawking fancy goeds alout town without a license. Henry Laptev and Henry Harbour were each fined 2s, without ccsts, for allowing horses to wander; while for a similar offence Georye Owhl and Michael Meenan were each fined ss, without costs. Embezzlement. William James M'Ceivana was charged with having, in October last, embezzled, at Wellington, the sums of 103, Cs, and 10s, the moneys of his employer, Henry Fielder.—Detective Henderson stated that he had just arrestedthe accused, by virtue of a warrant received from Wellington, and would ask that he be remanded to that place. Accused had admitted that h's name was as given in the wa-rant. He had been employed here of late as barman at the Anchor Hotel.—The Bench remanded the accused to Wellington ; bail to be allowed, himself in LSO and one surety in a similar amount.