SUPREME COURT JUDGMENTS.

Otago Witness, Issue 2672, 31 May 1905, Page 13

SUPREME COURT JUDGMENTS .

His Honor Mr Justice Williams gave judgment on Monday in two civil cases, his decisions being appended: — , Tuaptka Hospital Board (Mr Sim) v. G-. Cruickehank and another (Mr Hosking). — I Motion fox writ of mandanms. | Judgment was as follows:— " The whole difficulty in this case has arisen from the plaintiffs taking what th?ir counsel conceived to be the short and simple method of an action for us« and occupation in order to determine the right to possession of a tenement. Tlhe proper remedy would of course be ejectment or trespass, and the latter action might have be-en broaight in the ! Magistrate's Court. Once it is shown in an action for use and occupation that the possession of the defendant was adverse the action must fail. In order to sustain an action for use and occupation there must have been an entry by the defendant for the purposes j of occupation under an agreement with the plaintiff (Foa on ' Landlord and Tenant,' page 859). Such an agreement may be express or implied,_ but the existence of an implied I agreement is negatived if it appears that the defendants entered under some third person who claimed adversly to the plaintiff (Churchward v. Ford, 2 H & N, 446). It was admitted before the magistrate, and it is sworn in the statement of defence in the present proceedings, that the defendants rented the hall in respect of which the plaintiffs sxied ! for the use and occupation from a person I who wag let into possession by the Corporation of Tapanui before the plaintiffs had ob- i tamed any title. The contest had been j ■whether this person had a right to enter on the land and remove the building of the hall j from the land on which it stood or whether the plaintiffs had the right to prevent him. His possession was plainly adverse to the ; plaintifls, and thai of the defendants who I claim under him -was adverse also. There ! could not therefore have been any implied -agreement between the defendants and the plaintiffs that the defendants would pay the plaintiffs for the use and occupation of the hall because they had already constituted themselves tenants to somebody else. As upon tho undisputed facts the plaintiffs must have failed, and' the magistrate could not propearly have given judgment in their favour, they cannot come to this court for a man- ' damns to compel him to determine the question. The magistrate has already heard the plaintiffs' evidence, but has not determined the question. No doubt h-e ought to have determined it, and to have determined it against the plaintiffs, bui the plaintiffs cannot complain that he has not decided in favour of the defendants. No doubt the magistrate was misled by the way in which { tho case "was brought before him. In an \ action for use and occupation, if a question j of title arises it can only arise in-/ cidentally, and the magistrate wouid, under section 34 of the act of 1893, have jurisdiction to determine it. In such an action the question is the existence of an express or implied agreement for a tenancy between the plaintiff and the defendant. The question of title is only relevant so far as it tends to prove or disprove the existence of such an agreement. It may in the circumstances j of any particular case be relevant, but it is not the issue in the action, and is merely incidental to it. Had the action been for trespass, other considerations would have applied, and possibly in the circumstances of +he particular case the jurisdiction of the magistrate might have been ousted. That, however, it is unnecessary now to decade. Motion dismissed, ■with costs as per scale."

in the matter of " The Companies Act, 3903," and of the North Otago Dairy Company : Ex parte J. B. MacEwan and Co. — Summons to admit proof of debt. — Mr W. C. MacGregor in support, and Mr Hosking to oppose.

Judgment was as follows : — " I think the agreement here must bo interpreted in a similar way to the agreement in the case of Ogdens (Limited) v. Nelson U903 2 X.8., 287, 1904, 2 X.8., 410). Mr MacEwan lent his money to the company as part of the consideration for the agreement, and there was an absolute contract by the company to employ him, and by him to act as agent and advisor to the company fox three years from 'he date of the agreement. For this he was to receive each year a stated commission on the gross output of the company. Now, as was said by Lord Alyerstone in the above case, effect cannot be given to this transaction except upon the theory that the company continued to carry on business during the term mentioned in the agreement. It was therefore an implied term of the agreement, not that the company would carry on business under all circumstances, but that it would not by its own act or default incapacitate itseff from carrying on business, and would not do any voluntary act which would make it impossible that the business shoTild be continued. If, however, the power of the company to carry on business is taien away by something for which the company is not responsible, th.o agreement is not broken (Turner v. Goldsmith, 1891. 1 Q. 8., 644; Ogdens, Limited, v. Nelson). What took place is shown by the minutes of the company, by the correspondence, by Mr Cooke's affidavit, and by Mr MacEwan' s evidence which he gave in a very frank way. The season, June, 1903. to September, 3904, had been a very disastrous season. A loss had been made by paying suppliers more than they had be»n previously receiving. This was done owing to" the competition of Hie Taieri and Peninsula Milk Supply Company, which, by reason of its having a local market, could afford to give higher prices for milk than the North Otago Company. Several of the shareholders of the North Otago Company went ever to the Taiari and Peninsula Company. Mr MacE-wan says : 'It was competition from the Taieri and Peninsula Company and disloyalty of their own shareholders that got this company into difficulties — disloyalty in inviting the Taieri and Peninsxila Company to come into the district. That was done by shareholders acting conjomMy. There was no resolution of directors to that effect. An active propraganda was going on among the milk suppliers by the Taieri and Peninsula Company. If shareholders went over to the Taieri and Peninsula Company it would have been more ox less difficult for the company to live.' Mr MaoEwa-n n*uned one of the directors as taking part in these disloyal proceedings, but there rs nothing to suggest that the directors as a. body were not doing their best to carry on the business of the company. In consequence of the company being in difficulties it was decided to sell out to the Taieri and Peninsula Company, and Mr MacEwan acted gratuitously as agent for that purpose, and effected a eale of the business and property of the company for Mr MacEwan in his letter of the 12th September, 1904, to the secretary of the company says : ' "We feel very sorry to think that your shareholders are letting this business out of their hands, but presume there ia no help for it.' Mr MJacEwan wanted the business, if possible, to be carried on, and did not wish it to be disposed of if siich a, step could be avoided. He says in his evidence : ' The condition of things made it almost imperative to sell to protect the creditors and for us to protect ourselves. We were never afraid, as we knew the Taieri and Peninsula Company would take it over at any time at the amount we -«»e advancing on debentures.* On re-

examination Mr MacEvran says: 'If the Taieri and Peninsula Company had not taken it o\*er we should have had to finance the cc mpany ourselves. Tha/t was our intention. We got the debenture money, but in addition there is £1100 on open account on which"" we proved. Four shilling dividend has been paid, and there is a prospect of a further 3s.' ft appears, therefore, that the company had practically no alternative but to take the , course it did take. The condition of things had been brought about by th-e competition of a stronger company, -which could afford to ' pay higher prices for milk, and by the defection of individual shareholders, for neither of which were the company or Mr MacEtvau at all responsible. In order, however, to carry out the sale it was necessary to go into voluntary liquidation. Mr MacEwan, who was also a shareholder in the company, was present at a meeting of the company held on the Bth October last, and seconded and voted for a resolution that an extraordinary meeting of shareholders be held on the 18th October for passing resolutions for voluntarily winding x\p the company, for the appointment of a liqui- ( dator, and "for recommending him to sell to • the Taieri and Peninsula Company. On the \ 18th October the meeting was held and the resolutions passed, Mr MacEwan voting- for them. The resolution for winding up was in the terms required by section 220, subsection (c), of the Companies Act : ' That it has been proved to the satisfaction of the company that the company cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up the same/ The statement that the company could not by reason of its liabilities continue its business was true, and certainly could not now be controverted by Mr MacEwan even if he wished to do so. The only way in which the company could hay& continued its business would have been, by Mr MacEwan continuing to finance it. But it does not appear that he. offered ,to do this. He thought that the course actually taken was better for himself as well as- fox the company, and as he had £1100 due 'to him from the company on open account, no doubt it was better. If in the circumstances the company had not gone into voluntary liquidation and sold to the Taieri and Peninsula Company, the company would -still have been compelled to stop business, and would have been ultimately forced into liquidation. All the above circumstances distinguish the present case from Ogdens (Limited) v. Nelson. If the company had been able in a commercial sense to carry on its business, and had nevertheless sold to the Taieri and Peninsula Company, it would by its own -voluntary act have made it impossible to carry on its business, and, on the authority of Ogdens (Limited) v. Nelson, Mr MacEwan would have been entitled to damages. Here, however, the company acted under the stress of circumstances, for which it was not responsible, and which was for all practical purposes irresistible. No doubt the liquidation was what ie called in the Companies Act a voluntary liquidation, but the liquidation was not the cause of the company being unable to continue its business. The company was not able to continue its business by reason of its liabilities, and the fact that it was so unable was the cause of the liquidation. The liquidation was voluntary in name only. I think, therefore, that in the above circumstances the company ceasing to carry on its business was no breach of the agreement by the company, and that the summons must be dismissed."