execution creditor has taken possession under the sale to him by the sheriff, and has thus been effectually preferred to all the other creditors. We therefore heartily approve of this proposal, and would carry it farther by reducing the amount to £20, being the amount we suggested upon clause 5, sub-clause (d.), to constitute au act of bankruptcy. Sub-clause 6 is very necessary after the decisions in Ex parte Abbott, Re Gourlay (29 W. R. 143, L. R. 15 Ch. D. 447), and Ex parte Vale, Re Bannister (29 W. R. 885), and the remarks of Lord Justice James at the conclusion of the report in Ex parte Abbott. We would strongly urge upon Government the propriety of providing for this by a short separate Bill, so that, whatever may be the fate for next session of the Bankruptcy Bill, owing to the pressure of other business, this crying anomaly at least may be rectified without any further delay. Clause 63 contains provisions affecting a landlord's power to distrain for rent, and is as follows: “63.—A landlord shall not, after a person has been adjudicated bankrupt, distrain or proceed with a distress for rent due from him before the adjudication, but may, with the leave of the court, and on proof that the tenancy has been continued for the benefit of the bankrupt's estate, distrain for rent which has accrued due since the adjudication.' A comparison of this clause with section 34 of the Act of 1869 will show that a very considerable alteration from the present law is proposed. As the law at present stands, if a landlord distrains before the commencement of the bankruptcy his distress holds good for any amount of arrears of rent (not, of course, barred by the Statute of Limitations), and he can also distrain after the commencement of the bankruptcy, with the limit, however, that such distress will be available only for one year's rent accrued due prior to adjudication. This clause is designed to abolish the landlord's summary remedy for, and also bis right to be paid, any portion of rent accrued due prior to the bankruptcy in preference to other creditors out of the debtor's property upon the premises. With a strong landlord interest in Parliament it is not likely that the proposal will pass without very considerable discussion and opposition. For our own part, we think the clause goes too far in one direction and not far enough in another. We do not think that the landlord's summary remedy by distress for a reasonable amount of arrears of rent, and his preferential claim in respect thereof, should be entirely taken away from him, but we think he might very well be limited to six months' arrears of rent. If he chooses to let the rent fall in arrear for any longer time he ought to be made to do so with the risks of an ordinary creditor in case of bankruptcy supervening. It is very hard upon creditors to find all their estate swept away from them by a distress for a large balance of arrears of rent, the existence of which they have not had any opportunity of knowing, as in a very recent case in our own experience. To remedy the ovil of such a case we suggest (and herein we think the clause does not go far enough) that sale under a distress for rent for more than six months' arrears, the excess being more than, say, £20, should constitute an act of bankruptcy the same as seizure and sale under an execution, so that creditors might be able to avail themselves thereof for the purpose of obtaining an equitable distribution of their debtor's estate, and with that object we would make regulations for sales under distress in such cases similar to clause 62, sub-clause 5. As the clause is drafted, if a landlord should succeed in selling before adjudication, he would be entitled to retain the proceeds to the full amount of his distress. Now, it might be impossible for the creditors to obtain adjudication in time to prevent him from selling; in fact, it would certainly be so if the debtor chose to oppose rather than to assist them. Section 34 of the present Act is more stringent in this respect, as that limits the landlord's power of distress, if levied "after the commencement of the bankruptcy," which, by section 11, means the time of the committing of an act of bankruptcy by the debtor, which must, of course, be prior to an order of adjudication. With regard to rent accrued due since adjudication, the clause, as drafted, would put the onus of proving that the tenancy had been continued for the benefit of the bankrupt's estate upon the landlord before he could obtain leave to distrain! Why should this be so? Surely the fact that the trustee has thought fit to continue the tenancy and has left property there to distrain upon ought to be sufficient to be proved, so far as the landlord is concerned. The rest is a question between a trustee and his estate only, with which a landlord has nothing to do. In National Feather Duster Co. v. Susan M. Hibbard, says the Albany Law Journal, Mrs. Hibbard's husband was experimenting with a view of making a feather duster; his wife made a valuable suggestion in the progress of the experimenting, upon which he acted; and a duster was produced which was a success. Held, that the suggestion did not make the wife the inventor. Blodgett, J., said: “The idea of a feather duster to be made of feathers of the common turkey or other domestic fowls, seems clearly to have originated with George W. Hibbard. The desideratun was to make those feathers pliable. He was seeking to accomplish this, when the suggestion was made to him by Mrs. Hibbard to try cutting or splitting them. The proof on the part of Mre. Hibbard fails to show, indeed it falls far short of showing, that she ever made a feather duster or thought of making one from turkey feathers made pliable by splitting them, until after her husband had been for some time at work in that direction." RECENT DECISIONS. SALE BY TRUSTEES IN LIQUIDATION OF GOODWILL OF BANKRUPT'S BUSINESS. (Walker v. Mottram, C.A., 30 W. R. 165.) The decision in Labouchere v. Dawson (20 W. R. 309, L. R. 13 Eq. 322), that although the vendor of the goodwill of a business is at liberty to resume business in the old line in the old neighbourhood, he must not specially solicit business from his old customers, has, we believe, been hitherto regarded as clearly settled and has been constantly acted upon. In Leggott v. Barrett (28 W. R. 962) Brett, L.J., said he was inclined to think that the decision was right; and in Ginesi v. Cooper (L. R. 14 Ch. D., at p. 598) Jessel, M.R., treated it as "an authority for saying that a man who had sold the goodwill of his business must not solicit the old customers to deal with him," and he extended the rule by holding that he must not deal with such old customers. And he justified the extension by this illustration: Suppose a solicitor sells his business, say at five years' purchase, could he, having offices on the first floor, immediately afterwards go on to the ground floor, paint up his name and receive his clients as usual, because they choose to come to him, even if he did not actually ask them to come and transact their business with him? The answer would be that he was stealing that which he had sold; and any conduct more outrageous more opposed to morality or law could not well be imagined." One would think it difficult to find fault with the decisions in Labouchere v. Dawson and Ginesi v. Cooper; and in the present case both Lush and Lindley, L.JJ., seem to recognize and approve of those decisions. But Baggallay, L.J., expressed his dissent from the former case. "There are a great many points," he is reported to have said, "in which I disagree with that decision." And he added, in giving judgment, that Labouchere v. Dawson is at present not an authority which has been actually adopted by the Court of Appeal. All we cau say is that if it has not it ought to be. No doubt the case went beyond any previous authority, but then it has been accepted and acted upon for nearly ten years; it has received high judicial sanction, and it would be a strong measure now to reverse that decision on the mere ground that the previous authorities did not go so far. or 66 The question in the present case was whether the rule in Labouchere v. Dawson extends to the case of a sale by trustees in liquidation of the goodwill of a business. Cruttwell v. Lye (17 Ves. 335) is an authority to show that after such a sale the liquidating debtor or bankrupt may, in the absence of any express contract in the assignment, solicit the customers of his old trade. Lord Eldon there refused to grant an injunction to restrain a bankrupt, after a sale under a commission of bankruptcy of the goodwill of his trade, from soliciting former customers. In the present case (where there was no contract in the assignment restricting the rights of the liquidating debtor) the court came to a similar decision. They said that an assignment of a business and its good-will, without more, appears to us to pass now just as much and no more than in the days of Lord Eldon. As against the assignor, it confers on the assignee the exclusive right to carry on the business assigned, and, as incidental to this, it also confers on him the exclusive right to represent himself as carrying on that business, and, consequently, the right, not only to sue the assignor for damages if he has infringed these rights, but also to restrain him from infringing them if he manifests an intention to infringe them. Moreover, to this extent, a bankrupt who does not concur in his trustee's assignment is in no better position than a bankrupt who does. Every bankrupt, whether he concurs or not, is bound by every lawful disposition of his property by his trustees [see Hudson v. Osborne (39 L. J. Ch. 79)], and whatever rights such a disposition confers on a purchaser must be respected by But, in our the bankrupt, whether he joins in the conveyance or not. opinion, the right of a purchaser of the goodwill of a business from the trustee in bankruptcy does not extend to restrain the bankrupt (even (even if he joins in the conveyance) from bona fide commencing a fresh business, and from seeking assistance in it from his old friends and customers. It would be contrary to the policy of the bankruptcy laws to extend Labouchere v. Dawson to When a man sells his own business and good such a case. will for his own benefit it is thought unfair on his part to avail himself of his personal acquaintance with his old customers, and to induce them to withdraw their support from the business he has sold; and this element of personal unfairness may be sufficient to justify the decision in Labouchere v. Dawson. The case is put on the ground of implied contract by Lord Justice Brett in Leggott v. Barrett, and this is perhaps the best ground on which to rest the decision. The obligation enforced in Labouchere v. Dawson is, however, a purely personal obligation, and not a mere incident to the transfer of property." It will be seen that in all this the court are speaking of the case of an assignment of goodwill without more. It would seem from the words we have placed in italics that a bankrupt, whether he concurs in the assignment or not, will be bound to respect any stipulations for the protection of the purchaser which are contained therein. REVIEWS. HINDU LAW. A PROSPECTUS OF THE SCIENTIFIC STUDY OF THE HINDU LAW. By J. H. The British nation has bound itself, by many solemn pledges, to administer Hindu law among the Hindus, and not to compel them to submit, in such matters as inheritance, marriage, and the like, to foreign systems which would be inconsistent with their domestic routine and offensive to their religious feelings. It was ascertained many years ago that Hindu law was not the same in every part of India, any more than Roman law, as practically administered, is the same in the various parts of Europe in which it forms the basis of the national jurisprudence. It was further ascertained-at least people thought so that Hindu law might fairly be divided into five local systems, very similar to one another in the main, but differing in a few particulars which were of sufficient importance to be strongly insisted upon. These were called the Benares, Mithila, Bengal, Maharashtra, and Dravida "schools," and were considered to be represented by a large number of venerable Sanskrit treatises, of which the Mitakshara, Vivada Chintamani, Dayabhaga, Vyavahara Mayukha, and Smriti Chandrika, might be looked upon as the principal guides in their respective divisions. On this understanding the courts commenced their labours about a century ago; and, although they have undoubtedly made mistakes (chiefly from relying too much on one or two popular English writers), they have, upon the whole, discharged their duties reasonably well according to their lights. Nevertheless Mr. Nelson tells them that they are all wrong, and that their administration is one gigantic tissue of error; for, in the first place, the division of Hindu law into five schools is imaginary, and, secondly, the very existence of the Hindu law itself is problematical. being the case, there can be no impropriety in classifying the Hindus according to the particular book which they take as their guide. The objection to the word "school" is frivolous; it is perfectly well known that this word was only applied by Colebrooke for convenience, and was never intended to be accepted in a literal sense. The objection to the localization of particular schools is more serious; but we cannot see that Mr. Nelson has produced any sound argument or evidence against the conclusions which were arrived at so long ago on this question of fact. For the general proof of his theory as to the nonexistence of schools he falls back on his own earlier work, "A View of the Hindu Law." We have examined with care the passages referred to, and we are prepared to state that, unless a mere expression of adverse opinion amounts to a confutation, the statement that Burnell and others have shown up the absurdity" of the idea of schools in that place appears to us to be entirely incorrect. How, upon such evidence-or rather, in such absence of evidence-can we be asked to give up views which, up to the present time, have been generally accepted, and which were originally put forward by one whose mind, on Mr. Nelson's own admission, was ever marked" by "scholarly instincts and accuracy of thought"? 66 We have, of course, been able to deal only with one or two of the more general propositions formulated by Mr. Nelson; but these are of so fundamental a character that by them the "Prospectus," as a work to be relied upon, must necessarily stand or fall. We could have wished that the author had treated his subject with less enthusiasm and more discrimination. When he complains that Colebrooke, Macnaghten, “ and the rest," have often been blindly followed by the courts, which have thus been sometimes led into error, he is undoubtedly right; when he states that Hindu law has sometimes been applied to persons not former point, he does not seem to be aware that the errors of English properly subject to it, he is probably right again. But, as to the late years; and, as to the latter, he ought to have mentioned that the writers, especially of Macnaghten, have been frequently pointed out of Legislature has given power to the courts to recognize customary law, so that it is the fault of the particular judge if all non-Mohammedans are His suggestion of an official inquiry as sometimes classified as Hindus. to Hindu and customary law may possibly be good in itself, but it is marred by the one-sided formation of the proposed commission, and by the foregone conclusion that the doom of Hindu law will thus be assured. This is too much like condemning a man first and trying him afterwards. Possibly there may be less of Hindu law in the ordinary sense of the expression, and more of customary law, in the Madras Presidency than elsewhere in India; but Mr. Nelson speaks now of his own part of India, and now of India generally, while, in the ardour of his of judging, to which he alludes. Mr. Nelson is a man of intellect, and, excitement, he seems at times to forget, and his readers have no means apparently, of extensive reading; but, in discarding the oracles of the past, he has set up some modern idols of his own, and he must be considered, at present, rather as the legal mouth-piece of those whom he one who, after a thoroughly independent consideration, presents the public with his own deliberate calls the views. than Sanskritisto as MAGISTERIAL LAW. AN ELEMENTARY TREATISE ON MAGISTERIAL LAW AND ON THE PRACTICE If anybody ever took the trouble to answer, seriously, the well-known "Historical Doubts as to the Existence of Napoleon Buonaparte," we are satisfied that the difficulty we experience in dealing with Mr. Nelson's opinions must be a very tolerable reflex of the feelings of such a person when mustering his mental forces against Archbishop Whately's jeu d'esprit. Nevertheless we shall endeavour to show that Mr. Nelson is wrong; and we shall begin by contending that the mere fact of a considerable corpus juris having been found in existence, dealing in minute Mr. Shirley has followed up his "Sketch of the Criminal Law" with detail with questions of inheritance, &c., is in itself a proof that a recog- an elementary work on magistrates' law, on the ground that the latter nized system existed at the commencement of the British rule. Mr. has recently been constituted a special examination subject. The book Nelson will answer: (1) the alleged corpus juris consisted of merely is well arranged, all the provisions of the Summary Jurisdiction Act, speculative treatises; (2) these treatises represented an obsolete state of 1879, being stated under the proper heads. The first part deals with the things. The former allegation seems scarcely to require remark, the fact "Ordinary Practice of Magistrates' Courts," including the appointment, of a large number of books having been written without any hint of a qualification, and disqualification of magistrates, and the requisites of theoretical intention, and subsequently handed down with reverence from informations, summonses, and warrants. The subject of convicgeneration to generation, affording a sufficient practical refutation. But, tions is, perhaps, somewhat inadequately treated. The procedure in apart from this, it must be remembered that Colebrooke, Strange, and summary convictions is kept distinct from that with reference to indict. all the other early translators and writers, accepted these books as able offences, and the practice as to appeals at quarter sessions, stating genuine legal treatises, and that the testimony of so many eminent special cases, certiorari, nandamus, and habeas corpus is well and clearly experts cannot be got rid of by the mere use of contemptuous phrases. explained, there being also a chapter on 66 Reformatories and Industrial As to the law embodied in these books being obsolete, the same early Schools." The second part refers to "Subjects Frequently Occupying experts would probably have discovered this if it had been so, and the the Attention of Magistrates," such as bastardy, education, highway, fact that they did not make the discovery throws the onus of proof on licensing, &c. We think Mr. Shirley has been well advised to content Mr. Nelson. It may be added that the Dayakramasangraha, the clearest himself in the appendix with a mere abstract of Jervis's Acts and the and most business-like of all the native treatises on inheritance, was Summary Jurisdiction Act, but his index is rather meagre. We observe written as recently as the eighteenth century, and that this work, so far that the preface is dated in July last, and thus Mr. Shirley has just missed from treating the older books as obsolete, comprises, with some further the Newspaper (Law of Libel) Act, 1881, which has superseded his comdevelopments, the whole system of inheritance as contained in the ments (at p. 42) on Reg. v. Carden (L. R. 5 Q. B. D. 1). We think Dayabhaya. that students will be well advised to provide themselves with this work. With regard to the minor point of the five "schools," it is certain that the maxims set forth in each of the five principal works above-mentioned are different, in one or more particulars, from those embodied in some or all of the others. The discrepancies in some cases are slight, in all partial, but they are substantial differences as far as they go, and they are alluded to, in many instances, by the old writers themselves. That THE EMPLOYERS' LIABILITY ACT. A TREATISE UPON THE EMPLOYERS' LIABILITY ACT, 1880. By ALFRED HENRY The prophecy of Sir George Bramwell, in his letter to the late Sir Henry Jackson, that there would be "a frightful crop of litigation" if the Employers' Liability Bill was passed, has not as yet been fulfilled. Although the Employers' Liability Act has now been in operation for rather more than a year, we believe that no decision of the High Court upon any of its provisions had, up to the end of September last, found its❘ way into the reports, and therefore the readers of this book will search in vain for any authoritative guide in the construction of the statute. Mr. Ruegg has endeavoured to make up for this deficiency by giving a digest of thirteen county court decisions under the Act, between April and October of last year. His work commences with an interesting, if somewhat superfluous, history of the law previous to the passing of the Act. The comments upon the Act are very exhaustive, and are supplemented with a notice of such of the earlier authorities as the author considers bear upon its provisions; but we think that some of these cases, such as those relating to accidents to licensees, or to accidents resulting from the act of God, scarcely fall within the scope of the present work. The County Court Rules under the Act are given in full, and the book will prove a very useful manual. THE LAW OF THE EMPLOYER'S LIABILITY FOR THE NEGLIGENCE OF SERVANTS CAUSING INJURIES ΤΟ FELLOW SERVANTS, TOGETHER WITH THE EMPLOYERS' LIABILITY ACT, 1880, WITH NOTES, AND A SKETCH OF THE HISTORY OF THE LAW. By THOMAS BEVAN, Barrister-at-Law. Waterlow Brothers & Layton. We have here, first, a general sketch of the Roman, French, Prussian, Scotch, and American law on the subject, which is followed by a digest of the English decisions up to the passing of the Act. These are kept distinct from the Act itself, although many of them are again referred to under the various sections. In this part of the book many Irish, Scotch, and American authorities are noticed, as well as portions of other statutes which incidentally refer to the same subject, such as Lord Campbell's Act and the Factory and Workshops Act, 1878. There is a very good index, and the author has not deemed it necessary to limit his references to authorities to only one series of reports. EMPLOYERS AND EMPLOYED. By G. ROSE INNES, jun., Solicitor. Effingham Wilson. Mr. Innes has set out the text of the Employers' Liability Act, 1880, and the County Court Rules which have been framed with reference thereto, with an introductory chapter showing the changes which the Act has effected, and another upon the law of negligence, in which he indicates some of the principal difficulties of construction to which the statute may give rise. This will prove & useful book for non-professional readers. CORRESPONDENCE. There was a misprint in Mr. Whitcombe's letter last week of "mortgagor's advisers " for "mortgagee's advisers." SOLICITORS' REMUNERATION. [To the Editor of the Solicitors' Journal.] Sir,-It seems, if what I hear be true, that the members of the Incorporated Law Society will hear nothing from the council about the proposed scale till it is public property. This may be of no consequence if the scale turns out to have been fairly and wisely framed. But I hear also that the scale will propose two per cent. up to £1,000 on sales and mortgages-excluding disbursements. This does not appear to me to provide fairly for transactions of £500 and under, especially if fees to counsel are among the disbursements excluded, for in small transactions the work is usually done by the solicitor, while in larger matters counsel is called in to advise and settle drafts. I infer from notices in your journal of the reports of provincial law societies, and from other circumstances, that the members of those societies have been treated by their councils with less reserve than we in town have experienced. If so, why so? P. B. P. THE ENLARGEMENT OF LONG TERMS. [To the Editor of the Solicitors' Journal.] Sir,-A few weeks ago, in an article upon the enlargement of long terms under section 65 of the Conveyancing Act, you raised a question of some practical interest. You construed the phrase, "beneficially entitled in right of the term," which occurs in sub-section (2) (i.), to mean that the person entitled under that provision to enlarge the term into a fee must have the term vested in him. And you remarked that," in the latest edition of a well-known collection, there is more than one pre cedent, purporting to enlarge a long term into a fee simple by virtue of the Act, in which the person making the declaration appears on the face of the deed not to have the term vested in him." You probably referred to the 11th edition of Prideaux's Precedents; in which (vol. 1, p. 432, and p. 433) will be found precedents answering to the description given by you. I also observe that Messrs. Wolstenholme and Turner, at p. 85 of their edition of the Act, express the opinion that "a tenant for life, legal or equitable, can effect the conversion." Commenting upon this passage you take occasion to repeat your opinion, that an equitable tenant for life is not within the terms of sub-section (2) (i.). I do not think it necessary for me here to express any opinion, except that the question raised is one of practical importance. There are signs that section 65 is likely to have a less narrow operation than was at first in many quarters taken for granted. It is evident that if you are right, nothing but mischief can come from the free circulation of forms sanctioned by high authority, which, upon your interpretation, are inoperative. And your interpretation is, at all events, not so evidently wrong that it can safely be disregarded without further consideration; especially as it is the interpretation which leans to the side of greater caution: an argument which usually counts for a good deal with conveyancers. But my object is only to point out that the profession has a practical interest in seeing this question discussed and sifted. Lincoln's-inn. HENRY J. HOOD. THE REPEAL OF LORD CRANWORTH'S ACT. [To the Editor of the Solicitors' Journal.] Sir, The conclusion drawn by a correspondent in your columns last week, that the saving clause in section 71 of the Conveyancing Act is "fully sufficient to save the powers of Lord Cranworth's Act in the case of any instrument to which it applied," is affected by the circumstance that these powers are not implied in a deed, but are conferred on a person. If they were, indeed, statutory forms "attracted by the existence of an instrument "-to adopt the language of your correspondent-I think the result might be as he states; but the frame of the Act is wholly different. The power to give receipts (section 12), the application of the purchase-money (section 14), the conveyance to the purchaser (section 15)-in fact, all the powers and provisions in Parts II. and III.— depend solely on the substantive enactment without reference to the particular instrument. They are "conferred or annexed to particular offices, estates, or circumstances" (see section 32); and can scarcely be kept alive by a clause relating to the "operation, effect, or consequence of any instrument." I may point out that the reasonable application of these words is to such cases as a sale and conveyance under the statutory power before the 1st of January, 1882. AUBREY ST. JOHN CLERKE. Lincoln's-inn, Jan. 21. [To the Editor of the Solicitors' Journal.] Sir, Your issue of the 21st inst. contains a prominent paragraph respecting the operation of section 71 of the Conveyancing Act, which is calculated to carry widespread alarm to all mortgagees who have omitted from their mortgages the usual powers of sale, &c., in reliance upon the provisions of Lord Cranworth's Act. I understand your view to be that mortgagees in all such cases have now, according to the plain reading of the 71st section, irrevocably lost the benefit of those powers, and in support of that theory you cite the very decided opinion of Messrs. Clerke and Brett, as expressed in their edition of the new Act. result, if true, would obviously be a most disastrous one, and to allay unnecessary alarm, and also to abate the prejudice which might arise against adopting the new Act, I am sure you will not hesitate to give equal prominence to the fact that Messrs. Wolstenholme and Turner (Conveyancing Act, p. 91) and other editors of the Act do not share in this view. Such a But for the remarks of the learned commentators to whom you refer, I should have thought it too clear for dispute that, under the terms of Lord Cranworth's Act and of the new Act, the statutory powers of sale, of insuring, and of appointing a receiver which, by virtue of a mortgage executed between August 28, 1860, and January 1, 1882, are conferred upon the mortgagee, remain unimpaired, notwithstanding the repeals effected by section 71 of the Conveyancing Act; and I know that the same view is taken by other persons engaged in the practice of conveyancing. For my own part I have the greatest difficulty in seeing how any other result can be squeezed out of what, with great deference, T. C. seems to me a very plain section. New-square, Lincoln's-inn, Jan. 26. [Our correspondent's account of our view is incorrect. We did not think that the powers in question are irrevocably lost; we thought that the courts would feel themselves compelled, in spite of great difficulties. placed in their way by the wording of the section, to hold that it meant to preserve the powers for the benefit of mortgagees whose mortgages were executed before the commencement of the Conveyancing Act. We congratulate the Act upon our correspondent's inability to see any difficulty in the section. No Act more needs a polite facility in its interpreters.-ED. S. J.] BILLS OF SALE. [To the Editor of the Solicitors' Journal.] Sir,-In Reed's "Bills of Sale Act, 1878," it is said that "a bill of sale, if otherwise bona fide, and for valuable consideration, will not be invalid merely because its effect is to delay a particular creditor or to defeat an expected execution; nor will such an effect invalidate a deed, executed for the benefit of one or more creditors, unless the transaction is merely a cloak for retaining a benefit to the grantor, or made for the mere purpose of defeating creditors." The authorities cited are Wood v. Dixie (7 Q. B. 802), and Alton v. Harrison (L. R. 4 Ch. 623). In the latter case Stuart, V.C., said, “The result of the authorities shows the question to be whether the transaction is bona fide or a contrivance for the benefit of the debtor." And Giffard, L.J., affirming the Vice-Chancellor's judgment, used similar language. A debtor, in insolvent circumstances, being importuned by some of his creditors and apprehensive that one or more of them might obtain judgments, and levy execution against his furniture, applied to a friend for a loan of £100, which was granted and secured by a bill of sale on the furniture. The principal object of the loan, both on the part of the debtor and the lender, was to protect the goods from being seized in execution by a creditor, but another object was to enable the debtor to pay the more importunate creditors sums on account of their claims, and so pacify them for a time. The whole £100 was so applied. Is the bill of sale valid as against an execution creditor under the 13 Eliz. c. 5? or, in case bankruptcy supervenes, can it be supported as against the trustee ? It was not "a mere cloak for retaining a benefit to the grantor" (to use the language of Giffard, L.J.), inasmuch as a loan was actually raised and distributed amongst some of the creditors, and it is intended that the lender shall actually have the property comprised in the bill of sale unless redeemed. Will some of your readers favour me with their opinion on the case? As in the great majority of the transactions of life, the motives of the actors were not single, but double or mixed. A COUNTRY SOLICITOR. WANTED, A YOUNG COUNSELLOR. [To the Editor of the Solicitors' Journal.] Sir, I send you the enclosed advertisement from the Times as a novelty in the way of legal advertisements. X. [The following is the advertisement: To Legal Gentlemen.-Wanted, a young counsellor, or barrister, to proceed with a land case (which would be submitted through the solicitor), involving a large sum.-Apply to Ireland.] CASES OF THE WEEK. SOLICITOR-LIABILITY FOR FRAUD OF PARTNER-SALE UNDER ORDER OF COURT-RECEIPT OF DEPOSIT FROM AUCTIONEER.-In a case of Briggs ▼. Bree, before the Court of Appeal on the 18th inst., an important question arose as to the liability of solicitors to make good the loss resulting from a fraud committed by a partner. On the 15th of November, 1879, an order was made in the action that certain real estate should be sold with the approbation of the judge. The judge afterwards directed that the property should be sold on the 20th of January, 1881, by an auctioneer who was appointed for the purpose, and one of the conditions of sale provided that the purchaser should, immediately after the sale, pay into the hands of the auctioneer a deposit of ten per cent. on the amount of his purchase-money. The auctioneer entered into the usual recognizance, binding him duly to account for all sums of money which he should receive on account of the purchase-moneys of the estate at the sale, or, in case the estate should not be sold at the sale, for all sums of money which he should receive on account of the purchase-money at any subsequent sale, and duly to pay the same in such manner and at such time as the judge should direct. The property was not sold at the sale, but shortly afterwards an offer was made to the auctioneer to purchase it for £2,800. He communicated this offer t the plaintiffs' solicitors, who had the conduct of the sale, and they accepted it, subject to the sanction of the court. A conditional contract was prepared, and was sent by the plaintiffs' solic tors to the purchaser's solicitors. The purchaser executed it, and his Fo citors returned it to the plaintiffs' solicitors, together with a cheque for £280 drawn to the order of the auctioneer. The plaintiff,' solicitors sent the cnract to the auctioneer for execution by him on behalf of the vendors. This was done by B., one of the partners in the firm of the plaintiffs' solicitors, who had the management of the action, and who purported to act in the name of the firm. He also, on the 1st of March, 1881, in a letter written by him in the name of the firm, sent the cheque to the auctioneer, requesting him to indorse it and return it with the contract, "so that we may pay the amount into court, pursuant to the order for sale and your recognizance." The auctioneer indorsed the cheque to the order of the plaintiffs' solicitors, and returned it to them with the contract signed by him. The partner B. indorsed the cheque in the name of his firm, but, instead of paying the money into court, be paid the cheque into his own private account, and applied the proceeds to his own use. He afterwards absconded. His partners knew nothing of this transaction. At the time when it took place the contract for sale had not been approved by the judge, and no order had been obtained for payment of the money into court. On the 7th of March, 1881, the contract was approved, and on the 19th of May an order was made that the purchaser should pay the balance of his purchase-money into court, and that the auctioneer should pay the deposit into court. After B. had absconded his partners discovered the fraud which he had committed, and the question was raised whether they or the auctioneer were bound to make good the £280. It was urged, on their behalf, that the auctioneer had not strictly complied with the terms of his recognizance, which bound him to pay the money according to the direction of the judge, and that he could not discharge himself by paying the money without any order to the plaintiffs' solicitors. Moreover, it was said that it was no part of the ordinary duty of the solicitors to receive the money, or to act as bankers, and that, therefore, B.'s partners could not be liable for his act in so doing. On behalf of the auctioneer affidavits were made by several solicitors (one of them a member of the Council of the Incorporated Law Society) to the effect that it is part of the duty of the solicitor for the party having the conduct of the sale to receive from the auctioneer the deposits received on the sale, and to pay them into court for him, having first obtained the necessary directions, and that this would be the ordinary course of practice in a London solicitor's office. Also that the solicitors for the party having the conduct of the sale are invariably allowed by the taxing master, as part of the costs of the sale, the regulated charges for the payment into court. With reference to these affidavits it was urged on behalf of the plaintiffs' solicitors that, at the most, they showed that the practice which they mentioned applied after an order for payment of the deposit into court had been made, and not to a case like the present, where no such order had been made when the money was paid over by the auctioneer. Bacon, V.C., held (30 W. R. 132) that B.'s partners must make good the loss, and this decision was affirmed by the Court of Appeal (JESSEL, M.R., and BRETT and HOLKER L.JJ.). JESSEL, M.R., said that in such a case an innocent person must suffer, but it was more satisfactory that the partners of the man who had committed the fraud should suffer rather than an entire stranger. In an ordinary case the auctioneer would have received the deposit, and would have transmitted it in due time to the solicitors who had the conduct of the sale for payment into court-that is, after the title had been approved, and a certificate obtained from the chief clerk, and an order made for the payment of the money into court. It was clearly proved to be the ordinary practice for the solicitors who had the conduct of the sale to pay the deposit into court in this way, and they were entitled to make a charge for so doing. The only question was whether, if the solicitor asked the auctioneer for the deposit before the certificate and the order for payment had been made, the payment to the solicitor would be made in the ordinary course of business. It would be an extreme refinement to say that, if the solicitor asked the auctioneer for the money after the certificate, his partners would be liable for it if he misapplied it, but that if he asked for it the day before the certificate was inade, the payment to him would be beyond the scope of his ordinary authority as a solicitor, and his partners would not be liable. Assuming that it was not the ordinary practice for the solicitor to obtain the deposit from the auctioneer before the certificate was made, still his lordship thought that his doing so would be within the ordinary scope of the business of a solicitor, and consequently that his partners would be liable for bis acts. BRETT, L.J., said that the duty of the auctioneer under bis recognizance was to pay the money into court, and he doubted whether, as between himself and the court, the auctioneer could justify what he had done. But the present question was, not between him and the court, but between him and the solicitors. It was admitted that, if the certificate had passed, it would have been in the ordinary course of business for the solicitors to receive the money from the auctioneer, and that in that case the solicitor's partners would have been liable. It seemed to follow that if B. had told the auctioneer that the certificate had passed when it had not, B.'s falsehood would not have absolved his partners. His lordship thought it would be drawing too fine a distinction to say that the solicitor could ask the auctioneer for the money after the certificate, but not before. It was obvious that the payment to the solicitor would in either case be contrary to the strict letter of the auctioneer's recognizance. But the practice of making the payment to the solicitor arose out of the necessities of business, and the reason for it applied as much before as after the certificate. The practice was for the solicitor to ask the auctioneer for the money at a time when it was convenient that he should have it for the purpose of paying it into court, and the auctioneer was entitled to assume that the statement in the solicitors' letter to him, that it was convenient that they should have the money then for the purpose of paying it into court, was a true statement. B. was doing that which would, if he had been a truthful and honest man, have been within the scope of his authority as a solicitor, and therefore his partners were bound by his acts, and were liable for his default. HOLKER, L.J., concurred.-SOLICITORS, Harper & Battcock; C. J. Mander. notice of the adjudication is given to the drawer between the delivery and the date of the cheque, the adjudication being founded upon an act of bankruptcy committed by the payee before the delivery of the cheque to him, but the drawer having had no notice of the act of bankruptcy at the time when he delivered the cheque. Bacon, C.J., held (30 W. R. 124) that the drawers of the cheque must pay the amount over again to the trustee in bankruptcy of the payee, on the ground that they ought, after they had received notice of the adjudication, to have directed their bankers not to pay the cheque. This decision was reversed by the Court of Appeal (JESSEL, M.R., and BRETT and HOLKER, L. JJ.). The cheque was delivered by the drawers to the bankrupt on the 25th of April, in payment of a debt which they owed him, and it was post-dated on the 28th of April. On the 27th of April the payee was adjudicated a bankrupt, and notice of the adjudication was served on the drawers. The act of bankruptcy had been committed on the 14th of April, but the drawers had no notice of it when they delivered the cheque. The cheque was made payable to the order of the bankrupt, and he indorsed it to his nephew, in order that he might obtain the money for him. The nephew, on the 28th of April, paid the cheque to his own bankers, in order that they might at once carry the amount of it to the credit of his current account with them, which they did. The cheque was afterwards paid by the drawers' bankers to the nephew's bankers. JESSEL, M.R., said that the case was rather a singular one, but it appeared to him to be clearly within section 94 of the Bankruptcy Act. At the time when the cheque was given the act of bankruptcy had been committed, but the givers of the cheque had no notice of it. Therefore, though the cheque was postdated, the giving of it was a dealing with the bankrupt, and it was made by section 94 a valid dealing. What was the duty of the givers of that which in law was a bill of exchange? Was there any obligation on a person who had, as it was commonly called, paid a debt by a bill of exchange (though it was not a payment in law) to refuse to pay the bill if the drawer became a bankrupt? His lordship was not aware of any such obligation. If the giving of the cheque was a valid transaction, everything followed from it. The person who was ordered to pay paid. If the trustee had stopped the cheque, or had given notice to the bankers, it would have been another matter. Why the drawer of the cheque should give notice his lordship could not discover. He had never heard of any obligation to stop a cheque given for value to one person for the benefit of some other person. The argument assumed that there was some obligation in the case of a bankrupt which there would not otherwise be. But there was no such provision in the Bankruptcy Act. The court, however, ought also to consider what the result of stopping the cheque would be. The person who stopped it would run the risk of its being in the hands of a bona fide holder for value-i.e., the risk of having to pay the costs of an action by such a holder. Why should he do that for the benefit of the creditors of the bankrupt? There was another point sufficient to dispose of the case-viz., that the very thing had actually occurred here. The bankrupt's nephew paid the cheque to his own bankers, and they placed the amount to his credit. The bankers were, therefore, holders of the cheque for value. The moment they credited the amount of it to the nephew the cheque became their property. Therefore, if the drawers had stopped the cheque on the 28th of April, still they could not have avoided paying it. The original transaction being protected by section 94, it was clear that the trustee could have had no claim to the cheque. But it was enough to base the decision on the first ground. The appeal must be allowed. BRETT, L.J., said that the giving of the cheque on the 25th of April, dated the 28th, was equivalent to giving a promissory note payable on the 28th. This altered the legal position of the creditor as regarded the debtor, for it suspended his right to sne for the original debt during the currency of the note. It was, therefore, a dealing with the debtor, and it was protected by section 94. By the delivery of the note to the bankers on the day it became due, with the intention that the amount should be at once placed to the customer's credit, the bankers became immediately holders of the note for value. It was presented to the drawers' bankers, and paid by them. This was a payment of the original debt, and a payment by reason of a protected dealing, and, unless the drawers were bound to stop the cheque, the trustee could have no right to the money. It came back, therefore, to the question whether they were bound to do that. His lordship knew of no legal obligation, by contract or by law, on a person who had once given a cheque to stop it. If the drawers in the present case had stopped the cheque, they would not only have put themselves in danger, but they would have rendered themselves liable to the bankers who were the holders of the cheque for value. HOLKER, L.J., said that it would be a strange thing, when the appellants could stop the cheque only by running the risk of incurring the obligation of having to pay it, that they should be bound to pay it over again because they did not stop it.-SOLICITORS, E. Doyle & Son; Munton & Morris. BILL OF SALE-STATEMENT OF CONSIDERATION-EXPENSES OF DEED-BILLS OF SALE ACT, 1878, s. 8-APPEAL EVIDENCE IN COURT OF FIRST INSTANCE -DUTY OF APPELLANT-RIGHT TO RAISE NEW CASE IN COURT OF APPEAL. -In a case of Ex parte Firth, before the Court of Appeal on the 19th inst., an important question arose whether the consideration given for a bill of sale had been stated in it so as to comply with the provisions of section 8 of the Bills of Sale Act, 1878, and the result of the decision was, in one respect, to shake the authority of the recent decisions of the Court of Appeal in Ex parte National Mercantile Bank (28 W. R. 348, L. R. 15 Ch. D. 42) and Ex parte Challinor (29 W. R. 205, 16 Ch. D. 260). The bill of sale contained a recital that the grantee had agreed to lend to the grantor the sum of £40, upon having the repayment thereof, together with the further sum of £20, being the amount of interest and expenses attending the advance, secured in manner thereinafter appearing. And the deed was expressed to be made "in consideration of the sum of £40 now lent and paid by the mortgagee to the mortgagor." The deed provided for the re-assignment of the property by the mortgagee to the mortgagor on payment to the mortgagee of the sum of £60 by consecutive monthly instalments of £5 each. At the foot of the deed was a receipt signed by the mortgagor, acknowledging that he had received the £40 on the day of the date of the deed. The evidence, as the Court of Appeal beld, proved that in fact only £38 103. was paid to the mortgagor on the execution of the deed, the sum of £1 10s. having been retained by the mortgagee, notwithstanding the request of the mortgagor that the whole £40 might be paid to him, for the purpose, as was represented, of paying a fee of £1 to the solicitor who attested the execution of the deed, and ten shillings to a person sent on behalf of the mortgagee to inspect the property. Bacon, C.J., held that the whole £40 was paid, and that the deed was valid against the trustee in bankruptcy of the mortgagor, but this decision was reversed by the Court of Appeal (JESSEL, M.R., and BRETT and HOLKER, L.JJ.). JESSEL, M.R., said that on the evidence the court must come to the conclusion that only £38 10s. was paid to the grantor, and not £40 as was stated in the deed. If that was so, how could it be said that the true consideration was stated in the deed? It was said that the thirty shillings was deducted for expenses incident to the transaction itself. But there was a great distinction between the advance of a sum of money upon the terms that out of it a debt due by the borrower to a third person should be paid, a part of the sum being handed back by the borrower to the lender for that purpose, and the case of the retention or handing back of a sum which was not truly a debt until after the transaction was completed, a sum which consisted of the expenses of the transaction itself." When a mortgage was completed the mortgagor was liable to pay to the mortgagee the expenses of the mortgage deed, but there was no debt in respect of those expenses until the transaction was completed. It had, indeed, been decided that, if the transaction, fell through, the intending mortgagee could not recover the expenses from the mortgagor. To avoid this risk it was usual for the intending mortgagee's solicitor to obtain an undertaking from the intending mortgagor's solicitor to pay the expenses in any event, and sometimes a formal contract was entered into for the purpose. The intending borrower could not, there fore, be liable to the lender for any expenses incident to the transaction until after it was completed. In the present case, indeed, his lordship was of opinion that there could be no liability at all for the expenses, even after the completion of the transaction, inasmuch as £20 was expressly charged for inte rest and expenses. There was not, therefore, even an inchoate debt for the expenses. The principle of the decisions in Ex parte National Mercantile Bank and Ex parte Challinor was explained by James, L.J., in the latter case thus (L. R. 16 Ch. D. 266) :-" When a man borrows money he generally does so for the purpose of paying his debts, at any rate be ought to employ it in paying them, and if, by his direction, the money stated as the consideration is applied by the lender in the honest discharge of the borrower's debts, there is no reason for saying that that is not a payment of the money to him. That was the principle of our decision in Ex parte National Mercantile Bank, and ia that case, besides the promissory notes of the borrower, which were taken up, there were deducted some charges for the preparation of the security. It appears to me quit right to deduct the costs of preparing the bill of sale, and the auctioneer's charges for valuing the property, for that is what happens upon every mortgage transaction. The amount advanced is always considered to be that which is mentioned in the mortgage deed, and out of that sum the solicitor who prepares the deed, who is always the solicitor of the mortgagee, deducts his own costs of preparing the deed, and the fee of any person who has been employed to value the mortgaged property with a view to the making of the advance. And it does not seem to me that the money was the less paid to the borrower because part of it was, with his consent, applied in payment of a debt for costs to his solicitor, which was not, indeed, strictly payable, because a bill of costs had not been delivered, but which was really owing to the solicitor." The Master of the Rolls was quite willing tɔ take those decisions as thus explained. It was plain that James, L.J., in dealing with the small sum which had been there deducted for the costs of the deed, thought that it was a debt; the fact that it did not become a debt till after the transaction was completed was not present to his mind. All that he intended to decide was that a debt, strictly so called, due from the mortgagor could be deducted from the consideration stated in the deed. This reconciled those two cases with the subsequent decisions, such as Hamilton v. Chaine (29 W. R. 676, L. R. 7 Q. B. D. 319). At any rate the court was not disposed to extend the decisions in Ex parte National Mercantile Bank and Ex parte Challinor any further. BRETT, L.J., said that those two cases could in future be treated as binding authorities only in cases which came within the principle enunciated by James, L.J., as the ground of the decision-i.e., they were authori ties only for saying that, if part of the consideration stated in a bill of sale was, by the direction of the grantor, given at the time, applied in discharging then existing debts due by him, the money so paid might be properly stated in the deed as money then paid to him. Beyond that these cases had no binding authority. Another point arose thus :-In the county court there were affidavits on the part of the grantor that only £38 103. was paid to him on the execution of the deed, and affidavits on the part of the grantee that the whole £40 was paid. The witnesses were cross-examined before the judge, with the result that he disbelieved those of the grantee and believed those of the grantor. No note, however, was taken of this oral evidence, either by the judge, or by counsel, or by a shorthand writer, and when the appeal came before the Chief Judge the original affidavits were the only evidence adduced. But his lordship was informed of what had taken place in the county court. He, however, decided the case upon the affidavits alone, coupled with the receipt signed by the grantor, and upon this evidence he reversed the decision of the county court judge, and held that the whole £40 had been paid to the grantee. The Court of Appeal were of opinion that this was not a right course to adopt. JESSEL, M.R., said that it was a miscarriage. The appellant was bound to present to the Chief Judge a sufficient note of the oral evidence. |
