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Mallalieu v. Hodgson & another.

upon a preference, and if it is not void as against him, it appears to me to be clear that there was no sufficient consideration for the giving the notes, as he certainly ought to have protected the defendants from the consequences of liability upon these bills. Upon the whole, therefore, I think that the rule should be absolute for entering a verdict for the defendants upon the issue upon the seventh plea, but discharged as to entering the verdict for them upon the issue upon the fifth plea.

COLERIDGE, J. The first question in this case arises upon the rejoinder to the replication to the fifth plea. To that plea, which is of a release by the plaintiff, he replied that the release was obtained from him by the fraud, covin, and misrepresentation of the defendants and others in collusion with them; and the rejoinder traverses this. On the part of the plaintiff, it is contended that the simple issue is, whether the defendants and others did, in fact, procure the execution of the release, entirely or in part, by means of any fraud or misrepresentation as alleged; and, if he is right in so construing the issue, the facts certainly warrant him in applying to have the verdict entered for him; for it is clear that the defendants induced the plaintiff to execute the release partly by assuring him that no other creditor but himself had had any preference given him. Whatever concurring motives there may have been, he would not but for this assurance have executed the release. The assurance related to a fact which was entirely within their knowledge, and it was untrue. But, on the part of the defendants, it is contended that this is too narrow a view of the issue, or rather, that as the plaintiff was himself in the transaction of the composition and release guilty of fraud in respect of the other compounding creditors, by stipulating for a preference to himself, he is not at liberty to insist on the fraud at the same time practised on himself, nor, indeed, to say that it is any fraud which induced him to enter into the composition; and after a good deal of hesitation I have arrived at this conclusion. The plaintiff in this case has entered into an arrangement for the compounding of his claim on the defendants, which is fraudulent as regards the other creditors; he has received the composition notes, and has executed a release; but he now resorts to his original demand, and is thereupon met by a plea of release. Prima facie, the release is an answer to the action, because to allow the plaintiff now to recover for his whole original demand would be a fraud on the other creditors, who have come into the composition on the faith of the plaintiff being a party to it. But the plaintiff replies, that the release was obtained from him by the misrepresentation of the defendants and others in collusion with them; and this being denied by the rejoinder, the only question seems to me to be, whether or not he is estopped from proving his allegation, which is true in fact; because he and the defendants have in the same transaction concurred in a fraud on the other creditors. As far as regards the particular misrepresentation, the plaintiff was innocent; if he had stipulated for no preference to himself, it would have been perfectly innocent in him, laudable indeed, to stipulate that no other

Mallalieu v. Hodgson & another.

creditor should have a preference; and a breach by the defendants of such a stipulation would clearly have avoided the release, and remitted the plaintiff to his original rights. But he has stipulated and obtained a preference for himself, which, for the reason I have stated, will not vitiate the release as against himself, and it appears to me that the having given a preference to others also was no fraud upon the plaintiff. A mere representation by the defendants of a fact not material to the plaintiff would not sustain the issue, and the only way in which the misrepresentation could be material to the plaintiff would be inasmuch as the defendants might be rendered the less able to carry into execution the fraudulent preference to himself by having bound themselves to act similarly by others. But he had no right to have that preference carried into execution, and, therefore, is not in law prejudiced by a failure in regard to it. The whole consideration for his release is the fraudulent preference promised to himself, and the withholding any such preference from other creditors; he cannot allege the former as a fraud on himself to vitiate the release, for he is particeps fraudis, and the latter is so entirely mixed up with it, deriving all its materiality from it, that the same disability seems to me to exist as to it. If I am right in this, the defendants might avail themselves of the answer by a simple traverse, and there needed no special rejoinder. I come to the same conclusion on this part of the rule as my brother Erle; this part of it, therefore, will be made absolute. Upon the other point, the issue raised on the seventh plea, we are all agreed; and I do not feel it necessary to add any thing to the reasons assigned by my brother Wightman.

ERLE, J. With respect to the fifth plea, I take the facts to be as stated by my brother Wightman, who tried the cause, and have come to the conclusion that the verdict ought to be entered for the defendants. The plaintiff, by entering into the composition deed with the other creditors, contracted a duty towards them to release the defendants from their debt. Each creditor consents to lose part of his debt, in consideration that the others do the same; and each creditor may be considered to stipulate with the others for a release from them to the defendants, in consideration of the release by him. Where any creditor, in fraud of the agreement to accept the composition, stipu lates for a preference to himself, his stipulation is altogether void, not only can he take no advantage from it, but he is also to lose the benefit of the composition. The requirement of good faith among the creditors, and the preventing of gain by agreements for preference, have been uniformly maintained by a series of cases, from Leicester v. Rose, 4 East, 372, to Howden v. Haigh, and Bradshaw v. Bradshaw, 9 Mee. & W. 29; s. c. 11 Law J. Rep. (N. s.) Exch. 5.

Here, the plaintiff having received the composition and the value of the preference, which was a fraud upon the other creditors, is seeking to gain a further exclusive advantage to himself, also in fraud of them, by suing for the balance of his original debt, after allowing for the composition and the value of the preference, and claims to avoid his release, on the ground that he was induced by the defendants to

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Regina v. The Southampton Dock Company.

believe that he alone was fraudulently preferred, whereas some other creditors had also obtained some unjust advantage. These are the facts on which he relies to support his replication, that the release was obtained by fraud of the defendant. But a deed is not to be avoided on the ground of a fraudulent misrepresentation, unless the matter misrepresented was a material inducement to the execution of the deed—in other words, unless the matter was such as, in case of a simple contract, would be substantially the consideration for the contract. Here, the misrepresentation relied on is not of this nature; the exclusion of others from a preference is no direct advantage to the plaintiff, and the whole stipulation for a preference being a fraud on the part of the plaintiff towards other creditors, no part of it can be legally relied on by him as forming a material inducement for his deed; it could not form any part of a legal consideration. Also, as in a composition deed the principal parties to the stipulation for a release are the creditors who mutually contract each with the rest of the body, any misrepresentation of the debtor to any one of the creditors cannot be relied on by that one as the material inducement for his stipulation with the others. The debtor only receives the advantage which the creditors contract with each other to grant to him. The rest of the creditors have made the grant which the plaintiff contracted for; they have been no parties to any fraud, and the plaintiff does not prove the issue that the deed which operates between him and them as well as between him and the debtor was obtained by fraud, by showing that he was deceived by the debtor, and would not have executed the deed if he had not been so deceived. I take it to be clear, that he could not avoid the release in case the defendant had not paid him the additional sum agreed for by way of preference, and there is stronger reason for holding that the release could not be invalidated by reason of disappointment, in the belief that no other creditor had been equally successful in defrauding the rest. With respect to the pleadings on the seventh plea, I agree with my brothers Wightman and Coleridge, that the verdict should be for the defendants.

Rule absolute.

REGINA V. THE SOUTHAMPTON DOCK COMPANY.1
Easter Term, May 12, 1851.

Certiorari Costs-5 Geo. 2, c. 19, s. 2- Case reserving Points on both Sides.

Where, upon a case reserved at the sessions, points are raised in favor of both sides, and this court confirms the order of sessions and decides against all the points raised, neither party is entitled to costs under 5 Geo. 2, c. 19, s. 2.

UPON an appeal, by the Southampton Dock Company, against a rate for the relief of the poor to the Quarter Sessions for the town

120 Law J. Rep. (N. s.) M. C. 228.

Regina v. The Southampton Dock Company.

and county of Southampton, several points were raised upon each side, and ultimately the recorder reduced the assessment, reserving liberty to the appellants to state a case for the opinion of this court upon certain points contended for by them. When the case was stated, the respondents claimed to have inserted the points for which they had contended at the hearing, and which had been decided against them; and the case was accordingly drawn up, reserving questions in favor of each of the parties, and giving power to this court to raise or reduce the rate appealed against. The appellants brought up the order of sessions and case by certiorari, and entered into the recognizance required by 5 Geo. 2, c. 19, s. 2, and obtained a rule calling upon the respondents to show cause why the rate should not be further reduced. Upon the argument, the points reserved on each side were urged, the respondents contending that the assessment ought to be raised; and the court being of opinion that the recorder had rightly disposed of all the questions brought before him, affirmed the order of sessions. [See The Queen v. The Southampton Dock Company, 20 Law J. Rep. (N. s.) M. C. 155; s. c. 3 Eng. Rep. 464.] The respondents then obtained a side-bar rule for their costs under the 5 Geo. 2, c. 19, s. 2. A rule nisi to set aside the side-bar rule was obtained, on a former day in the term, on the ground that, as the judgment of the court below had been affirmed in favor of each side upon the points reserved, neither party ought to receive any costs from the other. Against this rule

Sewell now showed cause.

The 5 Geo. 2, c. 19, s. 2, assumes that costs are to follow the decision of this court, wherever the judgment of the court below is confirmed, which is the case here; and no difference can occur because questions are raised on both sides.

[Lord Campbell, C. J. Both parties were dissatisfied with the decision of the sessions.]

The respondents would not have impeached the decision unless the appellants had required points to be reserved in their favor. But when the case was drawn up, they required that the whole case on both sides should be stated.

[Lord Campbell, C. J. If each party had sued out a certiorari, there would have been no costs on either side; and this is substantially the same thing.]

It would not have been possible to bring up two cases; and the respondents had a right, if any case at all were stated, to have their points raised.

Saunders was not called upon to support the rule.

LORD CAMPBELL, C. J. No doubt they had such a right; but equitably, and according to the principles of justice, they ought to pay the costs which they have occasioned by the points reserved at their instance. It would be most unjust in such a case to throw the whole costs upon one party.

PATTESON, J., concurred.

Acraman & another v. Herniman.

WIGHTMAN, J. If the respondents did not wish to rely on their points, the other part of the case might well have been brought up by itself. But having availed themselves of the case, and failed upon their points, they cannot make the appellants pay their costs.

Rule absolute

ACRAMAN & another, Assignees of GARRETT, a Bankrupt, v.

HERNIMAN.1

Easter Term, May 6, 1851.

Bankruptcy-12 & 13 Vict. c. 106, s. 136- Warrant of Attorney -` Filing of Judgment signed within Twenty-one Days-3 Geo. 4, c. 39 Construction 66 Manner and Form."

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The 12 & 13 Vict. c. 106, s. 136, providing that every warrant of attorney which shall not be filed within twenty-one days next after the execution thereof, in manner and form provided by 3 Geo. 4, c. 39, shall be deemed fraudulent and void, refers to the mode of filing provided by that statute, viz., that it should be together with an affidavit of the time of the execution of the warrant of attorney, but it does not incorporate the alternative in sect. 2 of that act, which renders warrants of attorney given by bankrupts valid if judgment be signed upon them within twenty-one days.

Where, therefore, judgment was signed within twenty-one days upon a warrant of attorney given by a bankrupt, and on the same day a copy of it was filed with the clerk of the dockets of the Queen's Bench, but no affidavit of the time of its execution was ever filed : — Held, that the judgment and execution issued upon it were void as against the assignees.

DETINUE.

Pleas-First, non detinet; secondly, that the goods were not the goods of the plaintiffs.

By order of a learned judge, the facts were stated for the opinion of this court in the following case:

The bankrupt carried on business at Bath as a grocer, and was a trader liable to be made a bankrupt. On the 4th of March, 1850, whilst carrying on such business and being such trader as aforesaid, the bankrupt executed, in favor of the defendant, a warrant of attorney and defeasance [set out in the case] which authorized judgment to be entered up against him in the Court of Common Pleas. There was no money due from the bankrupt to the defendant at the time when the warrant of attorney was executed, but it was given to secure the repayment of two acceptances promised to be given by the defendant to the bankrupt of two bills of 120l. and 80l., making 2001. in all, and which bills were in fact accepted by the defendant, on the 6th of March, 1850, on which day the said warrant of attorney was delivered to him in exchange for his said acceptances. The acceptances have been duly paid by the defendant. On the 11th of March, 1850, judgment was signed on the above warrant of attorney, and on the same day, a copy of the warrant of attorney was filed with the

120 Law J. Rep. (N. s.) Q. B. 355.

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