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This was an action against the defendant syndicate and its directors for the rescission of a contract made in June, 1894, for the purchase by the company from the syndicate at a price of £850,000 of certain nitrate grounds and works at Laguna-, Chile, and for damages. The question shortly was whether the description of the property in the contract and the statement: in the prospectus contained such misrepresentations as would support a case for rescissi in and damages, and after having voluminous evidence, the court found that of the numerous matters complained of two only were legitimate grounds for complaint—namely, the state of the water supply at the date of the contract and for some time after, and the non-completion in some respects of one-half of the factory or “ maquina" until some short time after the contract. The facts, so far as material, are sufliciently referred to in the judgment.
Roman, J ., after referring to the fact that fraud was not alleged against any of the defendants, nor was ever intended to be alleged, and considering at length the material circumstances, continued : I think it would not be fair or equitablo to now decree rescission of the contract. I quite agree that if the company had satisfied me, on looking at all the circumstances, that it was entitled to ask for rescission, I should not have allowed any option to the syndicate of paying damages or making good its representations instead of rescission: see Rawlina v. Wirkham (7 W. R. 14-5, 3 De G. & J . 304) and the authorities there cited, in all of which it is to be noted that nothing but rescission would have afforded complete or proper relief to the lfiarties complaining. In the case now before me I think that justice w" be done, and the company will obtain all the relief it is entitled to against the syndicate, by directing, upon the alternative claim of the company for damages for breach of contract, an inquiry as to what loss or damage the company has sustained by reason of the maquina not being in complete working order on the 30th of J une, 1894. \Vith regard to the case put forward against the original directors of the company, it follows rrom what I have already said as to these directors not having been guilty of bad faith that the case against them must be substantially based on negligence. Nothing that they have done was beyond their powers as directors. The company said they were liable (1) for entering into such a contract without proper investigation, and ('2) for carrying it out and for paying the purchase-moneys with notice of the defects in the property. Now, directors are not liable when acting intra vireo and in good faith for loss accruing to their property by their acts unless arising from what has been called “gross negligence” on their part. Exception has often been taken, and with good cause, to that phrase. But it has been fuquently used, and in other cases besides those concerning directors, and has its use, inasmuch as there is a practical difference between the degrees of negligence for which different classes of persons are responsible (Giblin v. lllcflullen, L. R. 2 P. C. 317, per Lord Chelmsford, pp. 336 and 337). A director is no doubt liable for acts done by him which he knows to be ultra wire: the company and result in loss to the company, nor can he with impunity pay away without inquiry the company's moneys if it should subsequently turn out that they have been paid for a purpose to which they could not lawfully be applied, but imprudence or want of judgment would not by itself make a director liable: JllarzetIi'a clue (28 W. R. 541, per the present Lord Esher, p. 543). \Vith reference to the position of the directors in the present case as being also interested as directors of the syndicate, the observations of Lord Selborne in Hinche v. Sim (L. R. 1894 A. C. 654, p. 660; 43 W. R. Dig. 36) may be referred to, where he says: “If tho defendants truly and reasonably believed at the time that what they did was to the interest of the company they are not chargeable with dolus or breach of trust merely because in promoting the interests of the company they were also promoting their own.” Now, in the present case, ought the directors to be held liable for breach of duty under the circumstances above stated because they entered into the contract and gave tho syndicate time to remedy the defects, and because, notwithstanding the delay in the remedy and pending the remedy, they proceeded with the contract and obtained the conveyance and paid the purchase-money? I think not. Although they did not call the attention of the shareholders to the defects and delay, I see no sufllcient evidence to justify mo in coming to the conclusion that they did not truly and reasonably believe that what they were doing was for the interest of the company, though they may have been imprudent in some respects. Bearing in mind the knowledge of the property they had, I do not see why they were bound to make further investigations before sealing the contract on behalf of the company; and on this part of the case I may refer to Om-end, Gurney, rt Ca. v. Gibb (L. B. 5 H. L. 480), and in considering the conduct of the directors the position of affairs at that time has to be regarded. His lordship dealt with this, and concluded that there had been no negligence of a kind for which directors could be held liable by action to their company.—Coc.\'sr:r., Swinfen Eady, Q.C., A. T. Lawrence, Q,.C., Kirby/, and Peterson; Cozens-Ifardy, Q.C., Carson, Q.C., Jllrwnag/rtcn Q.C., and Rrmell Clarke,‘ Crackanl/lorpe, Q,.C., Furwell, Q C., and 0. Leigh Clare. Somcrrons, Slaughter 5- May ; Budd, Jclmaom, 5- Jacks; Blunt 500.
[Reported by J. F. Water, Barrister-at-Law.]
Loxnnn Bcrrnmo Acr-I\'r:\\' AND Sour:\\'r~r.\'r‘ Drrrsaznr Donzsrrc BUILDmo Enzcrsn IN Pr./ton or O1.n Ps.nsrrsas—“ Dzvrarn IN ANY Rnsrncr "Gnovmn 'ro an Covsaran noas Nor Excssn Ana/l Occurrnn in" OLD Pannrsrs-—l’r.Axs Mcsr he Saar I.v—Lor\‘non Bcrr.r~1.\'o Acr, 1894 (57 8: 58 Vrcr. c ccxrrr ) ss. 41, 43, I45, 150.
Special case stated by ametropolitan police magistrate upon a notice of an objection to an objection under the London Building Act, 1894, s. 43. The facts were as follow : The appellant had served a building notice under section 145 on the district surveyor of the district of St. George's, Hanoversquare North, and had annexed thereto the plans and sections of new domestic buildings which he proposed to erect on ground previously occupied by houses. The plans shewed that the new buildings would not cover any ground that was uncovered before, but the arrangement of the upper floors was such that a certain amount of the former existing air space would be occupied by the new buildings, which were to be higher and to contain more cubic feet than the old. The surveyor served notice of his objection to pass the plans under section 150 of the Act, and the matter came before the magi-trate, who found that the plans of the proposed new buildings deviated in certain respects from the plans of the old buildings, and he held that the word " deviate" in section 43 (2) applied not only to the area of ground covered by the old buildings, but also to any structural alteration in the buildings in respect to their height and width and depth on the several floors, and he afllirmed the objection to them given by the surveyor of the district, the present respondent, under section 150. The question for the decision of the court was whether tho owner of premises had a right to rebuild them in a different manner to the old buildings so long as the new buildings did not, in fact, cover more of the ground than the old buildings did, without first obtaining the leave of the London County Council. For the owner of the premises it was contended that section 43 (2) had reference to the ground-plan only, and that so long as the new buildings occupied no more land than did tae old ho was free to rebuild a domestic building in such a way as he thought fit provided that he did not contravene any of the provisions as to height and the like in section 47. For the respondent it was pointed. out that Part V. of the Act, in which part this group of sections was to be found, was headed, “ Open Spaces about Buildings, and Height of Buildings.” By section 41 all new buildings were to leave air space from the ground upwards, and in many instances to rebuild on the old plan would be to evade this important provision of the Act.
T}-IE Coca-r (\VrLr.s and KEXNBI)Y, JJ.) dismissed the appeal, and supported the decision of the magistrate. The cardinal object of the Act was the limitation of private rights over property for the general good. If the building owner desired to erect his new buildings on a different plan to that upon which the old building was put up, he must submit his complete set of plans for the approval of the county council. Perhaps if his new building was identical with the old, then ho might get the protection of section 41 (1), if not, he must submit plans for tho discretionary sanction of the county couucil.—Corxs1zr., Mamnorrarr, Q,.G., and I‘oy.s¢r; Horace Avery and Daldy. Somcrrons, Samilands 4- Go. ; Blaxland.
[Reported by Esslrmn Barn, Barrister-at-Law.]
MEBBEY DUCKS AND HARBOUR BOARD v. TWIGGE AND BUTIEBS. Div. Court. 29th April.
In this case the question was whether under the Mersey1Dock Acts Consolidation Act, 1858 (21 & 22 Vict. c. xcii.), s. 234, certain goods imported into Liverpool from Singapore, but transhipped at London, were liable to foreign dock rat-es and town dues, or whether they were liable to town dues only in accordance with the resolutions of tho board now in force in respect of goods imported coastwise. Section 234 provides, so far as relates to this case, as follows : “ All goods imported from parts beyond the seas or coastwise into the port of Liverpool, and brought into the docks, or land at, or deposited upon, or carried. over any quay, &c., . . . belonging tothe board . . . shall be liable to the rates specified in Schedule U hereunto annexed. . . .” By Schedule C the rates on tapioca imported from parts beyond the seas is declared to be 3d. per cwt. and coastwise lid. Since the Act was passed the Mersey Docks and Harbour Board, by resolution, remitted the dock rates on goods imported coastwise. A consignment of 306 bags of tapioca was shipped by the consignors at Singapore on board the steamship Agamenmon, belonging to a Dutch company registered at Amsterdam, for carriage to Liverpool under the terms of a bill of lading which contained a power to tranship at London. The Dutch company and the Ocean Steamship Co., an English company, worked in conjunction, and the profits of the Dutch company went to the shareholders of the English company. Tlra Agamemnon, after touching at Amsterdam, proceeded to London, where she discharged all her inward cargo, including the tapioca. Entry was made of all her cargo carried to London, and the usual London dues paid on it. For the purposes of the Customs Act tho ship and cargo were treated as arriving from beyond the seas. The tapioca was then shipped on board The Surpodon, belonging to the Ocean Steamship Co. T/w Sm-pedon's voyage was to Liverpool and thence to China. The Liverpool cargo, including the
tapioca, was carried under a “ transire" from the Customs, a document which is only issued in respect of cargo carried (so far as Customs are concerned) coastwise. At Liverpool the tapioca, with the other cargo from London, consigned to Liverpool was discharged and was treated for Customs purposes as carried coastwise, and no examination and no entries were passed in respect of it. The defendants were the purchasers of 150 bags of the tapioca, and these were delivered to them from the plaintiffs’ docks. The plaintiffs’ claim was for £1 5s., being the amount of the foreign dock dues at 2d. per cwt., less credit for coastwise town dues. It was contended on behalf of the defendants that the tapioca was im ported coastwise, and that for the purpose of ascertaining the meaning of the expression “coastwise" in section 231 it was necessary to refer to the Customs Laws Consolidation Act, 1876 (39 & 40 Vict. c. 36), under which the goods in question ought to ho treated as imported coastwise: Mersey Dorks and Harbour Board v. Henderson (13 App. Cas. 600) was cited in support of this proposition. The following sections of tho Customs Laws Consolidation Act, 1876, were referred to: Sections 40, 41, 64, 101, 140, and 1-15.
Murrsw, J ., in delivering judgment, said that section 234 oi the Mersey Dock Acts Consolidation Act, 1858, provided that all goods imported into the port of Liverpool from ports beyond the seas should be liable to the dock rates mentioned in Schedule C. The section further provided that goods imported coastwise should pay certain other dock rates. When the plain language of section 23-1 was lookcd at, nothing would seem to be clearer than that, under the circumstances of this case, the goods were imported into Liverpool from a port beyond the seas. It was said, however, on behalf of the defendants, that the section had a subtle and concealed meaning, and that it must be construed by reference to the Customs Consolidation Act, 1876, and the regulations made under that statute. It was said that the effect of that statute was to deprive the plaintiffs of the dues payable in respect of goods imported from beyond the seas, which they would otherwise have been entitled to under tho Act of 1858. That would be a most extraordinary result, because the Customs Act had nothing to do with these dock dues, which were payable for harbour and dock services rendered by the plaintiffs. The defendants’ case was put in this way. The Customs Act, it was said, must be taken to contain a provision that goods transhipped at London were to be deemed to be imported into London, and then carried coastwise to Liverpool There was no express provision in the Customs Act to that effect, or in the regulations made under it, but it was said such a provision ought to be implied from the course of business. The evidence showed that the course of business of the Customs authorities was that when a vessel arrived in London it was ascertained what dutiable and what non-dutiable goods were on board, and when that had been done the Customs had no further interestin non-dutiable goods. The tapioca in question, which was non-dutiable after transhipment, was not placed on a coasting vessel, but on The Sarpcdon, which, after discharging a part of her cargo at Liverpool, proceeded on a foreign voyage, so that the action of the Customs authorities in sending the tapioca under a “ transire," which was only issued in respect of goods carried coastwise, was irregular. VVhen the goods were dutiable they were treated after transhipment in a diflerent manner. They were forwarded under a_bond. In other words, the Customs authorities kept their hands on them till they reached their destination, where the Customs were paid and the record made. Therefore in the case of'the transhipment of dutiable goods, no such implication as was contended for by the defendants could arise. But if t e contention of the defendants prevailed, it would result that there would be one set of dock dues payable to the plaintiffs in respect of dutiable goods and another set of dues in respect of non-dutiable goods. Under these circumstances, there did not appear to be any reason for implying any such regulation in construing the Mersey Docks Act of 1858. The extremely slender foundation on which the defendants’ argument was based was that, in the case of Henderson v. Hersey Docks and Harbour Board (13 App. Cas. 600), the late Master of the Rolls and the House of Lords had had recourse to the language of the Customs Act in order to ascertain the meaning of the words “ trading inwards ” in a section of the Mersey Docks Act; but in that case the Customs Act was merely referred to as a dictionary might be referred to for the purpose of ascertaining the meaning of an ambiguous word. Because that had been done, it was now argued in this case that, whenever a question arose as to the meaning or construction of the Mersey Docks Act, that question must be decided by referring to the Customs Act. The argument of tho defendants was, in his lordship’s opinion, quite untenable. There would, therefore, be judgment for the plaintifls for the amount claimed, with costs on the High Court E6810.-—COl.‘NSl'lL, Joseplr Walton, Q.C., C-zrrer, Q.C., and T. G. Horridge; Boyd, Q.C., and S:-rullon. Soucrrons, Rowclife, Rawle, Q Co., for A. T. Squarey, Liverpool; Stokes Q Stokes, for T/iorm'l_l/ §- Uamaron, Liverpool.
[Reported by C. G. Wrnaaausu, Barrister-at-Law.)
into voluntary liquidation in January, 1898. This was a summons by the liquidator of the African Gold Co. in the winding-up of the Auriferous Co. to raise the question whether he was entitled to set-off the amount due from the Auriferous Co. to the African Gold Co. against the calls due from the latter to the former company.
\Vnrcu'r, J. , held, that the amount of the debt could not be set off against the sum due for calls. If the African Gold Co. had not been in liquidation it could not have set off its claim for money lent against its liability for the amount of the calls. This was decided before the Judicature Act, 1875, in Re“ Overenrl, Gurney, 4- Co. (Limited), Griw‘Il's vase (14 \V. R. 1015, L. R. 1 Ch. 5'28), Black §- C'o.’s can (21 \V. R. 68, L. R. S Ch. 254, 261), and since the Judicature Act it had been decided that the same rule held good whether the call was made before or after the liquidation had commenced, and whether the liquidation was compulsory or voluntary: Re Whitelmua Q Co. (27 \V. R. 181, 9 Ch. D. 595); the ground of the rule being that all contributions from shareholders are by the Companies Acts made applicable for the payment of the company's creditors pari passu, and that a person who is a. creditor and a contributory cannot ba allowed to do what amounts to paying his own claim in full out of a fund which ought to be distributed ratcably : Black 4- Co.’s case ; Ra Pyls lVork.r (38 W. R. 282, '14 Ch. D. 534, 537, 585). Whether the same rule would apply if the liquidator sought to enforce the call by action seemed never to have been decided, but the call though made before the liquidation and therefore at one time a debt to the company was also enforceable by the liquidator by balance order as a contribution to be made in the winding-up for pari pass“ distribution, and in this tense was not a subject of set-off in the case of a limited company. In the present case the African Gold Co. was also in liquidation, and the question arose as to the effect of that. If the African Gold Co. had been a bankrupt individual the liquidator of the Auriferous Co. must have enforced his claim in bankruptcy and according to the bankruptcy law, which even before the Judicature Act would have allowed the set-off : Re Dru:/cworlh, Ezparle Cooper (15 \V. R. 367, L. R. 2 Ch. 578) ; Ra Universal Bankiny C'orpo1'alion, E.vparle Slrang (18 \V. R. 475, L. R. 5 Ch. 492). Here the creditor was not a bankrupt individual but a company in liquidation and the particular ground on which Re Drwkworlli was decided was not applicable. The liquidator of the Aurifcrous Co. had not to proceed in the Bankruptcy Court but in the Chancery Division, and was entitled to the benefit of the Companies Act as there administered. The question therefore was, Had section 10 of the Judicature Act, 1875, introduced into the law of the winding-up of companies the bankruptcy rules as to setoif ? This question was decided in the negative by Gilt’: vase (27 W. R. 934, 12 Ch. 1). 775), which was cited with approval in the Court of Appeal in R: lVa.vlringlon Diamond Co. (41 \V. R. 681 ; 1893, 3 Ch. 9-3), and the1iquidator of the Aurifcrous Co. was entitled to prove in the winding-up of the African Gold Co. for the whole amount still due on the shares, leaving tho liquidator of the African Gold Co. to his right of proof in the winding-up of the Auriferous Co. It was true that in Gill’; case the creditor contributory was not a company in liquidation, but that circumstance did not prevent it from being in point as a decision that the bankruptcy law of set-off was not imported by the Judicature Act into the law of companies so as to allow a set-oil against calls, though for other purposes there may be the same right as in bankruptcy to a set-off of cross-claims as existing at the time of bankruptcy. Ra Duclcworth had therefore no application. This view seemed to bo consistent with all the decisions on section 101 of the Companies Act, 1862, since the Judicature Act, though there was some difilculty in reconciling Re Duckworlh, with what Lord Selborno said in Black § Co.’a can with reference to a “statutory trustee,” yet the learned judge did not think that the House of Lords would now overrule what was said in Re Duck-worfh.—Couxssi., George R. Nortlicole ; Howard W right. Somorrons, W alto §- Habershon ,' Frralrfielda 5' Williams.
Whereas, from the present stnte of the business before Mr. Justice North, Mr. Justice Stirling, Mr. Justice Romer, and Mr. Justice Byrne respectively, it is expedient that a portion of the Causes assigned to Mr. Justice North, Mr. Justice Stirling, and Mr. Justice Romar, should for the purpose only of Hearing or of Trial be transferred to Mr. Justice Byrne; Now I, the Right Honourable Hurdingc Stanley, Earl of Halsbury, Lord High Chancellor of Great Britain, do hereby Order that tho several Causes and Matters set forth in the Schedules hereto, be accordingly transferred from the said Mr. Justice North, Mr. Justice Stirling, and Mr. Justice Romer to Mr. J ustico Byrne for the purpose only of Hearing or of Trial, and be marked in the Cause Books accordingly. And this Order is to be drawn up by the Registrar and set up in the several Ollices of the Chancery Division of the High Court of Justice.
SaniovJackson 1898 N 158 April 13
SamevCoote 1898 N 159 April 13
ClieasleyvChest0n 1897 C 1,152 Oct 27
National Provincial Bank of England v Tommy 1897 N 812 Nov 2 In re Mallam l\Iallam v Mallam 1897 M 1,219 Nov 5
RoevRoe 1896 R 2,094 Novll
Pickstock v Earlo 1897 P 1.187 Nov 15
Browne v Ciilnan 1897 B 2,795 Nov 19
BechervDavey 1897 B 1,915 Nov 24
FranklinvLee 1897 F 186 Nov 29
In re Hale Lilley v Foad adjd sumns Nov 30
)IetkievCurd 1896 M 2,542 Dec 2
HarveyvGreig 1897 H 3,332 Dec 10 i
Evelynvlioward 1897 E 1,211 Nov 10 .
1898. In re Cerckel’s Patent, 1896 No 15,493 and Patents, &c,Acta petn entered in witness list Feb 5 Fabriques de Pi-oduits Chimiques de Thann & de Mulhouse v Lifiitte 8: C0 1897 F 1,523 Feb 10
In re Sinnctte's Patent, No 1,670 of 1888 petn entered in witness list Feb 12
Notice is hereby given that, after tho expiration of forty days from the date hereof [May 10] it is proposed to submit to her Majesty in Council, in pursuance of the above-mentioned Act, the draft of an order in Council making Rules of Court touching the practice in prize proceedings to be observed in Vice-Admiralty Courts and Colonial Courts authorized to act as Prize Courts. And notice is hereby further given that, in accordance with the provisions of the Rules Publication Act, 1893, copies of the proposed draft Order in Council can be obtained by any public body, within fgflilzy ggivls of the date of this notice, at the Privy Council Otllce,
LAVV SOCIETIES. INCORPORATED LAW SOCIETY.
Sanacr Coiuiirraa on Moiviar Larvnrxc, 1898.
Report of special committee of the Council of the Incorporated Law Society, as adopt/ed by the Council 22nd of April, 1898 :
The committee have considered the communication (referred to them by the Council on the 25th of March), from the Select Committee of the House of Commons on Money Lending, inquiring if the Council had any suggestions to offer as to remedies, or alterations to recommend in the present state of the law with regard to money lending. The committee find that in the evidence taken by the Select Committee the following, among other suggestions, have been made : (1) That professional money lenders should be registered. (2) That professional money lenders should be compelled to take out a licence to be granted to a person only in his own name. (3) That the minimum limit of bills of sale should be raised from £30 to £50; in other words, that bills of sale for less than £50 should be illegal. (4) That the provision in the Bills of Sale Act, 1878 (repealed by the Amendment Act, 1882, as regards bills of sale by way of security), that bills of sale should be attested by a solicitor, and state that the document had been previously explained by him, should be re-enacted; or, in substitution, that attestation should be before a registrar of a county court. (5) That it should be made a criminal offence for professional money lenders to issue false and misleading advertisements. (6) That power should be given to the court to fix ll. fair rate of interest in all cases where there is anything unfair or oppressive in the bargain. (7) That the practice of interference with contracts by professional money lenders should be assimilated to that which is adopted by courts of equity in setting aside “ unconscionable bargains made with expectant heirs and reversioners." (8) That further discretionary powers should be given to county court judges. Tho committee consider that their remarks and suggestions may conveniently follow the order of these suggestions. While recognizing the advantage! which would accrue from the check which proper registration and licensing would put upon professional money lenders, the committee consider that such a measure is not practicable. They see difllculty ill giving alegal definition of a “ professional money lender " so as to confinfl it to the class concerned with the mischief to be dealt with, and to avoid bringing in bankers, financial and trust companies and firms, discount houses, stockbrokers, solicitors, insurance companies, and othcrs,_W_l1° lend money with or without security. They also agree in the opmwll which has been expressed that professional money lenders, if registered and licensed, would make use of that fact in pushing their trade, and thus obtain additional power over the unwary. The committee also think
,that if registration were practicable, the registers would not in practice be
resorted to by the classes for whose protection they would be intended. Moreover, to be of any use, the entries on the register must be renewed at frequent intcrvals, and a system of supervision would be needed to ensure compliance with the law and to prevent its becoming a dead letter. The proposal that professional money lenders should be compelled to trade only in their own names, also involves the practical diflloulty of defining professional money lenders in such a way as to include only the so-called professional money lender and to exclude bankers and others who lend money. There are many firms and companies who trade under names which do not indicate the individuals who actually carry on the business, and it would seriously interfere with business if this long-established custom were prohibited. The committee approve of the proposal that the minimum limit of bills of sale should be raised from £30 to £50, and that bills of sale for less than £50 should not be allowed. In some cases it may no doubt happen that a bill of sale is the only security which borrowers in great need can offer, and the restriction may shut out all chance of help. But those cases must be comparatively few, while the cases of oppression by the means of small bills of sale are numerous. The committee are of opinion that the rate of interest on bills of sale might be limited to 15 per cent. per annum on bills of sale to secure £100 and under, and 10 per cent. per annum on bills of sale to secure over £100, following the principle of the Pawnbrokers Acts. The committee are also in favour of the re-enactment of the provision in the Bills of Sale Act, 1878, that bills of sale should be attested by a solicitor, and that the attestation should state that the effect had been explained to the grantor by the attesting solicitor. It is considered that this safeguard constitutes a valuable check upon usurious bills of sale, and tends to ensure that illiterate borrowers do not sign documents without proper knowledge of their contents. With deference to the weighty opinions expressed before the select committee, the committee consider that the suggestion to make it criminal for professional money lenders to issue false and misleading advertisements and circulars is not capable of being carried out in practice, much as they would wish to see some remedy of this character put in force to check the evils of such advertisements and circulars. Suggestions of thiskind wouldmeet with universal approval provided they could be made operative and be restricted to the classes of cases intended; but it seems to the committee that any proposals dealing with money lending advertisements as such must of necessity go beyond the limits intended, and might produce disastrous results. The committee consider that the chief remedy for the evils under consideration must be sought in the direction indicated in the proposals that unjust and oppressive transactions should be revised by the courts of law, including county courts, and, in proper cases, a fair rate of interest fixed. It is no doubt a serious thing to meddle with freedom of contract, but the Legislature has seen fit to do so on more than one occasion, and to prohibit certain classes from contracting themselves out of protective statutes. It would be still more serious to interfere with banking and mercantile business or to place any obstacle in the way of ordinary commercial transactions. But the remedy of granting relief by the court against unconscionable bargains does not necessarily involve interference with freedom of contract. It is more analogous to cases where contracts are avoided as being against public policy, and it is assumed that the suggested legislation need not forbid
contracting out, because the remedy will, of necessity, override any contract. In all ages and in all countries endeavours have been made by legi.~lation to deal with the evils of money lending at high rates of interest, but with small success, as will be seen on reference to the useful book on "The Law of Unconscionable Bargains,” by Bellot 8: Willis, recently (published. An interesting history of the efforts to repress usury and har dealing, and of the shifts of money lenders is there given, together with the reasons which led to the total abolition of the Usury Acts in 1854. The extreme difficulty of dealing with the evil by repressive legislation is there abundantly illustrated. But, even while the usury law existed, extensive classes of transactions were always free from restriction. Among these may be mentioned contracts in a foreign country or loans to be repaid abroad, and cases where the right to recover the money lent is put in jeopardy. As instances of the latter class may be mentioned sums lent on bottom:-y or at rnpandentia, and also annuities for lives or other contingencies. Moreover, in ordinary banking and mercantile transactions, commission in addition to interest is frequently charged, and when money is dear tho commission may be at a high rate. Legislation would be disastrous which interfered with such transactions, especially
in times of panic or financial embarrassment. Cases, too, not unfrequently occur in which money is lent at great risk, and consequently at large interest, where no unfair advantage is taken by the lender. For these reasons the committee are of opinion that restrictive legislation attempting to re-introduce to any extent the laws against usury, or fixing a maximum rate of interest in the case of professional money lenders, is undesirable, except in the cases of bills of sale. In their opinion legislation in the direction of rectifying unconscionable bargains is more likely to be attended with success in remedying the undoubted evils attendant upon the present system of money lending by professional money lenders. The committee suggest that the legislation might take the form of a declaration that the law against unfair dealings might be enforced by order of any judge or master of the High Court, or of any judge or registrar of the county courts, declaring the bargain unfair, or the rate of interest excessive, and substituting aiower rate of interest or other modification of the contract, as occasion may require. It has been suggested that the practice of the High Court exercising its equitable jurisdiction in setting aside unconscionable bargains with expectant heirs and reversioners should be adopted. It may be remarked that this doctrine of the court is not confined to the Chancery Division nor to bargains with expectant heirs or reversioners. In more than one case eminent Common Law judges have applied the same doctrine. Lord Mansfield, C.J., did not
hesitate in several actions in the King’s Bench to grant relief in oases of hard and unconscionable bargains, and Lord Chancellor Hardwioke, in Chester/ield v. Jansen, stated that there were instances where the common law had given relief, giving as an example a case before Hyde, J ., in 1663. In another case, Thombury v. Wlzitacre, a court of law stated that in the event of the case going to trial the jury would consider the folly of the defendant and give only reasonable damages. There are, in fact,
numerous cases in the reports from the leading case of 0heste1jielrl_v. Jansen, decided in 1750, down to the present time, to prove that relief may be given in all cases where, from the circumstances or conditions of the parties contracting, or from weakness on one side or usury on the other, or extortion or advantage taken of that weakness, the presump
tion of fraud arises, and that fraud in this sense does not mean deceit or circumvention, but it means an unconscientious use of the power arising out of these considerations and conditions. The late Denman, J ., in Neville v. Snelliny (15 Ob. D. 679), said that the doctrine might be applied to all cases of undue advantage taken by money lenders. At the same time a mere high rate of interest will not be conclusive, because, as was pointed out by Byles, J ., a merchant or a manufacturer under pressing necessities may require an immediate advance, and the security he can offer may be such that some additional interest in the nature of a premium of insurance against the risk may be required, or the demand for temporary financial accommodation may be so great that the supply may not be commensurate with the demand. In such cases it may be absolutely essential in the manufactui-er’s or merchant’s interest, and for the benefit of the whole community, that lenders should be at liberty io advance money at high rates of interest. The county courts having only a limited equitable jurisdiction have not power to give effect to the equitable
doctrine of relief against unconscionable bargains. Under the County
Courts Act, 1888, s. 67, the jurisdiction in equity is limited to eight classes of actions or matters, and no action not coming within those classes can be safely commenced in a county court. Actions for relief against fraud or mistake are included, but they do not, it is conceived,
embrace cases in which the presumption of fraud arises from the circumstances of the parties. It might be convenient that any new Act of Parliament should contain a preamble shewing that it is directed against the evils attendant upon the system of money lending by professional money lenders at high rates of interest, or under oppressive conditions as to repayment, and especially in cases where misleading advertisements or circulars have been resorted to, or where young or aged or ignorant persons or married women have been concerned, or persons under fear of publicity to themselves or their friends, or where the business is carried on under false or misleading names. The object of such a preamble (and there are many precedents in forcible language in the old statutes against usury) would be to indicate the class of cases in which the court is expected to interfere, and not to specify or limit the circumstances which would justify interference. The committee think that it would not be expedient to attempt in any such Act of Parliamentto define the cases which should constitute unfair dealing, or that legislation should be limited to lending money at high rates of interest. Such transactions may be carried on under many specious disguises, such as sale and re-purchase of goods, or hire and purchase of goods, or the loan of property, or they may take the form of mortgage transactions, or annuities on lives or other contingencies. \Vhat seems desirable is that it should be recognized that in all cases tho court, of its own initiative, and without any request on the part of a defendant, should have power at any time to set aside or rectify any dealing or bargain where the parties have not been on equal terms, and where any advantage has been taken by one party against the other, either from necessity, or pressure, or ignorance, and to open up any accounts or transactions purporting to have been closed under such conditions, and to go behind and set aside any judgment of the court, and to order repayment of any amounts already paid in excess of the amount held by the court to be reasonable. The committee think that any proposed legislation might also enable the county court to restrain a grantee under a bill of sale from removing or selling chattels or otherwise as provided by the Bills of Sale Act, 1882, s. 7. And that in money lending transactions the lender should be bound
to furnish at the time to the borrower and his surities, if any, copies of every document signed by him or them, and that any breach of this duty should be taken into consideration by the court upon any question of unfair dealing. It is also thought that it should be a matter for consideration in the drafting of any Bill dealing with the money lending question whether transactions of the nature of renewals of loans should be valid between judgment debtor and judgment creditor so long as the judgment remains unsatisfied. And fu_rther, that thc powers of the county court to order payment by instalments should be extended to judgments for sums exceeding £20, and that the power given by section 153 of the County Courts Act, 1888, in cases such as sickness should be extended to all cases of money lending, if for any reason the defendant is unable to discharge the debt or damages. There is another point to which the committee attach especial importance, and that is that the pro
cess of obtaining such relief should be easy, inexpensive, and not
accompanied with unnecessary publicity. It is a matter of common
experience that the business of professional money lenders depends to a
large extent on the fact that needy borrowers cannot, or will not, face
publicity. The committee therefore recommend that the proposed Act of
Parliament should enable either party to invoke the aid of the court
privately, and notnecessarily on a trial in open court. It is suggested
that this end might be attained by giving a right in any existing action or proceedingtoeither party to have any question of unfair dealing referred
without pleadings or any interlocutory proceeding in the Queen's Bench
Divisiontoan oficial referee, and in the Chancery Division to a master or judge in chambers; and in the county courts to the registrar, or judge, sit
tinginchambers. And that, where there is no existing action or suit, proceedings might, without writ or pleadings, be commenced by originating summons for plaint, asking relief against unfair dealings, and be disposed of in chambers. The committee aro of opinion that the evils of the existing system of money lending 'would ba to a large extent remedied if the relief could be granted without publicity. In many cases needy borrowers are deprived of any independent advice or protection when they have recourse to professional money lenders, and they submit to any conditions for immediate and secret relief. In conclusion the committee recommend that the following suggestions be communicated to the Parliamentary Select Committee: (l) '.[‘o raise the minimum limit of bills of sale from £3’) to £50, and to limit the rate of interest to 15 per cent. per annum on bills of sale to secure £100 and under, and to 10 per cent. per annum on bills of sale to secure over £100. ('2) To re-enact the provision in the Bills of Sale Act, 1878, that bills of sale should be attested by a solicitor, and that the attestation should state that before the execution of the bill of sale the effect had been explained to the grantor by the attesting solicitor. (3) To give a borrower under a bill of sale liberty to repay aloan, nominally payable at a fixed date or by instalments, by tendering, at any time, the principal sum with interest at the rate specified, together with fourteen days‘ interest in lieu of notice. (1) To declare and extend the powers of the High Court and county courts so as to enable them to interfere as referred to above where there has been oppression or unfair dealing, and especially that this relief should be rendered available without unnecessary publicity.
Anstey, Alfred, B.A. (Camb.) Archdale, John Frederick St. Quintin
Archer, Goodwyn Luddington
Barnes, Walter Sidery
Barton, John Austin, B.A. (Camb.) Bartram, Cecil
Bate, Benjamin Horace
Beale, \Valter Herbert, B.A. (Oxon.) Bompas, Alan Chantrey
Brenan, Herbert Eustace, B.A.
Britten, Algernon John
Bnrge, Sydney George
Butler, Alfred \Varren
Carlyle, Thomas Fairfax
Carvalho, Samuel N unes
Castellnn, Charles Ernest
Cayley, Norman, B.A. (Camb.)
Clarke, Charles Neville
Clarke, Leslie, B.A. (Oxon.)
Coe, Charles Graburn, B.A. (Camb.) Cook, George Rope
Cooper, John Campbell . Cottam, Charles Edmondeon, B.A.
Cuthbert, Robert Frederick
Davies, Daniel John
Davis, Sydney Carlile
Davson, Arthur Mackenzie, B.A.
Dobb, Richard Barrett
Dobell, George Berkeley
Dundas, Charles Percival During Euden, Harold
Edmunds, William Rees
Evans, Cecil Wilfrid
Farmer, Frank Morley
Farrar, James Gill Lister
Fraser, James Scholfield
Galloway, Thomas Percival, B.A.
Gcare, John Walter
Gosden, Oscar George
Gregory, Charles Lewis
Grifllths, Trevor Coleridge
Guillet, William Percy
Haines, George Emeris
Harral, Francis Monckton
Hobbs, Ernest \Villiam,M.A. (Edin.)
Horton, Charles Ernest
Howard, George Frederick Thomas
Humphrey, William Murray
J ohnstone, William Yuile
Jones, William Llewelyn
Kelly, Charles Edward
Kendrick, Henry Haden
Lawrence, John Gerald
Lemon, Allan Bruce
Longhurst, Alfred Melville
McBean, Alexander Hamilton
Marshall, William Leslie
Marten, Charles J osc h
Martyn, Gerald Stcplien
Meyer, Hcr‘~~—f Ellis