COURT OF APPEAL.

New Zealand Times, Volume XXIX, Issue 4269, 25 November 1874, Page 2

COURT OF APPEAL.

Monday, 23kd November. (Before their Honors Mr. Justice Gresson, Mr. Justice Richmond, and Mr. Justice Chapman.) THE OTAGO AND SOUTHLAND INVESTMENT COMPANY, APELLANTS, AND AUTUUII JOHN BURNS, RESPONDENT. Special case ou appeal from Supreme Court of Otago and Southland. Mr. Smith and Mr. Stout appeared for the appellants ; Mr. G. Cook for the respondent. Mr. Smith read the special case on appeal. The facts, briefly stated, are as follows ’.-—Mr. Arthur Burns, whilst in England, made application to the appellants for a loan of £3OOO, which was scoured by a bill endorsed by bis uncle, and he agreed to execute a mortgage over certain property in Otago. _ For this loan he was to pay 10 per cent, interest quarterly ; and if the manager of the company in Dunedin disapproved of the security he was to grant, he was to repay the £SOOO when the bill fell due. _ Some dispute arose, the respondent contending that the appellants’ manager had refused the securities ottered, and that he was therefore entitled to repay the amount lent, the appellants contending, on the other hand, that they were quite satisfied with the security, and demanding that ho ■ (Mr. Burns) should execute a mortgage. This he refused to do, and as he had tendered the £3OOO, he declined to pay the interest quarterly. Thereupon the appellants sued him in tho Resident Magistrate's Court at Dunedin for one quarter’s interest, viz., £75, and he pleaded that the agreement to pay interest had ceased, as the company’s manager was dissatisfied with his securities. The 'magistrate, however, gave judgment in the company’s favor, and there was an appeal ou that judgment to the Supreme Court, and the Court dismissed the appeal. As there were other interest due, the company sued for three quarter’s interest, £223. To the plaintiffs declaration in tho action, the defendant pleaded tho same defence as had been pleaded in the Magisti’ato’s Court, and the plaintiffs replied that he was estopped from so doing. There were then rejoinders, Ac., and the plaintiffs by consent withdrew their replication of estoppel. They afterwards, however, applied to plead it again, and tho Judge granted leave to them to plead, and also leave to the defendant to add another plea. The order granting leave plead was not appealed against, but the jurisdiction of the Judge to grant it was questioned in the special case. There >vore then rejoinders, and sur-

rejoinders, and demurrers, and notice of. objections to replications, all substantially attacking the replication of estoppel. The pleadings are of great length, extending over twenty-six pages of printed foolscap. The jury found that the defendant’s plea was proved, thus finding the opposite to what the magistrate found; but they also found the truth of the plaintiffs’ ..replication of estoppel, and under the Judge’s direction assessed the amount due contingently at £225. Two rules nisi were applied for and granted after the trial. One was by the defendant for a nonsuit, or a new trial, or judgmentnon obstante veredicto in the replication of estoppel, and one rule by the plaintiffs to have the verdict entered for them. The Judge granted a new trial, and discharged the other rule. Against these decisions the appeal was brought. Mr. Smith wished first to refer to the term* of the defendant’s rule nisi, in which it was stated that there had been misdirection. The fact was that what direction there was, wa» against the plaintiffs not against the defendant. The first question was that of the estoppel. His Honor Judge Chapman had said the fact decided by Mr. Strode was collateral or incidental. Mr. Justice Chapman: I still think the point on which you rely was collateral and incidental. Mr. Smith : Without deciding ±he point as to the election, the magistrate could not have given judgment. It was a sine qua non, not an incidental question. There were three distinct things involved in Mr. Burns’s agreement, Ist. He undertook to execute a mortgage ; 2nd. He agreed to pay interest ;.3rd. He promised, in the event of the refusal of his securities, to repay principal and interest; so that there were three branches of one agreement. Now the point before the magistrate was, had this agreement to pay interest ceased ? A certain defence was raised before the magistrate, and having failed before the magistrate in that defence the respondent set up the same defence to another instalment of interest—a thing he could not do. Bigelow on Estoppel, p. 43, introduction, and p. 45 ; also Outram v. Morewood, 3 East., 346 ; Smith’s Leading Cases, 2nd vol., 664—notes te Duchess of Kingston’s case. Outram v. Morewood was precisely similar to present .case, as it decides that a material point undecided in a previous action between the same parties is binding on them in a subsequent action. In this case the parties were the same. The subject matter was similar, and there was the same matter controverted ; and it was judicially decided by a court of competent jurisdiction. These five particulars made it binding as an estoppel. Eastmure v. Laws, 5 Bing., N.C., 444 ; Smith’s Leading Cases, 2nd vol., 650 ; Regina v. Hartington, 4 El. and BL, 7SO. The last case went further than was needed to decide in favor of appellants in this case. But to test the argument, let it be tried e converso. If the company had first sued in the Supreme Court, and the same plea was pleaded, could not estoppel be pleaded if when action was brought in the Magistrate’s Court the same defence was set up. Mr. Justice Chapman : Perhaps not. Mr. Justice Richmond : My impression at first would be that in a promise to pay, nothing would conclude the parties but action on identical promise. The doctrine could not be more broadly stated than in Regina v. Hartiugton, and there a question necessarily decided was held conclusive in a subsequent adjudicature in a different matter. Mr. Justice Richmond : You will have to deal with this fact, that the Resident Magistrate’s Court is not a Court of Record, and you have to go behind the judgment to prove the reasons for it. Mr. Smith : It not being a Court of Record is unimportant. The judgment may be proved aliunde. Dyson v. Wood, 3 B. and C. 449. It can be proved by evidence what was put on issue. Mr. Justice Richmond : You will still have to get over whether it was a collateral matter or one ex necessitate rei, bound up with the judgment. lii Regina v. Hartington, it was a judgment in rem, and the writ decided was ex necessitate rci to the judgment. Mr. Smith referred to remarks of Justice Coleridge, p. 794. Barrs v. Jackson, 1 Y. and C. 585 and 1 Phill. was not against the appellants. The next question was as to the jurisdiction. The Resident Magistrates’ Act, 1867, referred to claims not amounting to £IOO, so that the criterion of iurisdiction was what was the amount claimed. Mr. Justice Richmond : But was not question of the nineteen more payments involved ? Mr. Smith : Not necessarily. It was only this special defence that was so involved—sec. 19 of the R.M. Act, 1867 ; Brown v. White, 2 A.J.R, 119. That decision conflicts with Parker v. Wood, 26 J.R., 55. It also is observable that no English cases cited in agreement in Brown v. White. If the principle of Brown v. White was carried out it would happen that where a contract for 10,000 sheep was performed, save and except the delivery of one sheep which was valued at £l, the vendee could not sue for the £1 due in a Magistrate’* Court, but would have to go to a Supreme Court. English cases show that if the ratio decidendi is correct law in Brown v. White, that obvious objections to jurisdiction have been staring the parties in the face, and no advantage even in moving for prohibition taken of them—see McCallum, Hookson, 28 ; and J. C. P., 1 ; in re Walsh v. lonides, 22 and J.Q.8., 137 ; Tattau v. Great Western Railway Company, 29 and J.Q.8., 134 ; Turner v. Berry, 1 L.M, and P., 744. The Court then adjourned.