CLAIM FOR £402

Evening Star, Issue 21634, 1 February 1934, Page 14

CLAIM FOR £402

SUPREME CaURT ACTION , PLAINTIFF NONSUITED . In the Supreme,Court yesterday, His .Honour.' Mr J ustice Kennedy delivered liis reserved juclgihent in the'case in ’which Henry Henderson, traveller, Dunedin, claimed £403 6s from Francis Bernard Fraiicis, larid agent, Dunedin, alleged to be due under a deed of ■ covenant. 1 , ■ . ' ' , At the hearing Mr A. G. Neill appeared for the plaintiff and Mr J. S. Sinclair for the defendant. ■ In delivering.judgment, His Honour reviewed the; facts , and said that the plaintiff advanced'to the defendant the slim of £251 Os 5d on September 3, 1927. ,A short time alter, the de 7 fendant, - who had, represented himself ■as embarfessed -hut solvent, called a meeting of his creditors, which was held on October 28, 1927. When the meeting was .called-.the defendant assured the plaintiff;that ho would pay him all Jib. owed. The meeting was attended by the plaintiff and by the solicitor who prepared the deed of covenant, A resolution was carried that the estate be, assigned for the benefit: of the creditors, and 'following this the plaintiff’s solicitor "moved that Mr 'Burdekin ' bo-appointed assignee. His solicitor also seconded a motion that the household furniture, be not assigned, , biit left as the property, of defendant, and-there was evidence that this was in accordance with the plaintiff’s" own wish.. The plaintiff said that he did not vote, and there was no evidence that he did. A subsequent meeting was held sometime in December of the same year. Mr-Bayne was chairman of that meeting. A document was produced to him, and speaking from it, he gave his evidence, , but it subsequently appeared that he had no recollection of having .seen- the document before, so that it could not bbe used to refresh his memory and ho had no independent collection. On this appearing, His Honour rejected this ;evidence as, having no recollection, he "’could not testify merely be reading but, from or absenting to the minute. The secretary, who might. have taken minutes, was not called. What took place at this meeting was, however, referred to in the evidence of the plaintiff,, the defendant and Mr Sim. The plaintiff‘admitted that-a report was made by Mr Payne as tb the position of'the estate, and that the plaintiff said : “ If, Mr Payne, yop say the, man is like .that, the man should suffer.” He stated that he moved no resolution but he rose to his feet and made a statement that the , defendant should no be. allowed to retain his furniture after Mr Payne’s' statement. He recollected a resolution -that the defendant should be given a complete discharge 'on ; payment of ten shillings only but he did not vote nor so declare. Mr Sim said that at: the December meeting the plaintiff proposed' that the defendant should give up his furniture., The plaintiff later attended a meeting hold on March 28, 1933. The minutes of this meeting Were duly proved' as correctly recording what took place. The plaintiff -admitted seeing Mr-, Sellar,-.the trustee’s:agent and'he said -“*1 war|ted'-;to i know when•l was’ getting a .dividend under this assignment.” Ho ■,said later/ that he met Mi* Sellar at Gdbsbh’.Si garage -..arid that* “he, (Sellar) said he would' soon have the assignment'-ready, for me to: sign. I said I wilt not sign anything.” He denied saying to, the defendant, “ It." is 'a Bit hot -getting only about fourpencc in the . pound.’/ The defendant- deposed to meeting -the plaintiff after .. the third meeting,, and itb plaintiff’s'statement that.. “ It is a bit tough only getting ponfpence.” Mr Seller,' the trustee’s agent, said: “ Before;- this meeting 1 think plaintiff had- seen me. _ Subsequent to this meeting, .plaintiff saw me on numerous [ occasions;" : -It was always a ques-tionof-when he • was to receive a dividend from Francis’ estate.”

His Honour said .that upon such, facts the question arose .whether the plaintiff was, bonnet by'.-;the ..deed, or, deeds ,of as 7 'signnlerit ' anff whether , those deeds released the , debfor "‘or suspended the right "of" option so."that the present action might i riot; be>maintained. The creditor ■ had > riot : .signed the., deed of assignriierit,’, but in- His .Honour’s view he would, forthe reasons .'mentioned, be bound, as effectually.’as if he had signed it.’ -Each ,deed was expressly made with all-, creditors of' the debtor, who in writing or otherwise consented to or agreed "to be bound by it. The deed therefore would become operative to release or. suspend the operation of creditors’ claims by virtue of the assent of creditors, and it. only, bound those creditors who, in" Writing or; otherwise, expressly or -implicitly assented to it. “ Tho inquiry must be whether the plaintiff ’has impliedly assented to. the deed,” proceeded His, Honour; “It will’ be observed that persons may bo precluded from petitioning Tor barik-' rnptcy, upon a deed of assignment as an act of bankruptcy, although they may not be actually bound; by the deed. “ In this case, however, the plaintiff does not seek to rely upon, a deed of assignment as an act of bankruptcy, but claims to enforce rights which, he asserts* are unaffected by. the deed. It may be taken as a' universal rule that rio" person is bound by a deed of assignment unless he is entitled to share the benefits secured thereby, and that no person can claim to take the benefit.of the assignment unless he submits to its burden.”

His Honour said that the benefit of the deed was sought by the debtor, who desired to impose its burden upon the creditor. ' Where a' creditor had remained strictly passive .and had done nothing to render himself bound by the deed, the debtor might not enforce it against the creditor, but the creditor, if he had not acted contrary to its provisions, might nevertheless claim to be admitted to its benefit unless, events had occurred which prevented the admission of any fresh creditor. Where the debtor claimed the benefit of the agreement it was necessary to show that the creditor acceded to it. The question was: Did he accede in such a way as to bind himself? For, as Lord Cranworth had observed in a case cited, “ no person can be considered to have impliedly acceded to a deed of this sort within the true meaning of that expression who has not put himself in precisely the same situation with regard to the debtors as if he had executed it.” Applying these principles, His Honour said lie thought the proper conclusion was that, while the acts of the'plaintiff and his solicitor at the meetings referred to might have been sufficient to preclude the plaintiff from petitioning for bankruptcy, relying on the deed of assignment" as an act of bankruptcy, they might not go so far as to show accession to the deeds The matter, however, did not stand there, because in addition to such acquiescence in the deeds of assignment there had been the conduct of the. plaintiff in inquiring as to payment of dividend to himself under the assignment. These inquiries, ns reported—and His Honour said he accepted the evidence called for the defence upon this point—left no doubt that the plaintiff frequently claimed a dividend which could be payable to turn only.

under the asignment and which was so claimed, although it was equally clear that in the end ho declined to sign the deed. In such a claim for a dividend to, himself, whether or not the creditor intended to rely upon a personal right of action, he unmistakably assented to the deed and put himself in precisely the same situation as if he had’executed it so that the trustee would have been bound to have regard to his claim and to have treated him as a cestui que trust. Having sought to obtain the benefit of the deed arid having by his conduct thereby obtained a right to a dividend which the trustee could not disregard in making a distribution, he must submit to the burden of the deed, although ho did not actually sign it. In the case of the Bank of Australasia v. Abbott, which was relied upon by the plaintiff, it appeared that the bank was willing, in fact, to come in under conditions which were not fulfilled, and the correspondence between bank officials disclosed an anxiety to know when a dividend would be declared. Any inquiry was made after the bank had expressed the view that it would hot be a party to the deed, and it was a more general inquiry and not an inquiry for payment of dividend to the bank. Mr Justice Cooper expressly said that the inquiry in the -face of the other circumstances was not a sufficient reason for holding that the bank had assented to the deed, and that decision did pot involve the conclusion that inquiries amounting to claims might, in no circumstances, bo evidence of assent.

Neither deed in express terms contained the usual release, but each contained provision defining the rights of the parties in terms which involved the negative implication that the creditors’ lights were suspended until there occurred the matters mentioned in paragraph 113 of the deeds. It accordingly followed that tlje plaintiff was not at present entitled to maintain the action, and he would be nonsuited accordingly, but without costs, as the action was to a largo extent brought upon the defendant by his own improper assurances. Judgment was given accordingly.