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Janes v. Whitbread & others.

lawful for the trustee, at the expense of the said trust estate, to recover the amount of any debt or debts of any or either of the several creditors, parties thereto, to be verified by solemn declaration, or in such other manner as to the said trustee should seem expedient; and in the event of any such creditor or creditors refusing or failing so to verify his, her, or their debt or debts, then that such creditor or creditors so refusing or failing as aforesaid should lose all benefit, dividends, and advantage to be derived from or otherwise claimed under the said indenture, any thing therein contained to the contrary notwithstanding; and thereupon the said trustee was thereby authorized and empowered to pay such last-mentioned dividends unto the said Ellis, and the said trustee was authorized and empowered to pay or make such arrangements with the creditors whose debts were under 20l. as he, the trustee, might deem expedient. Then followed a proviso, that any resolution signed by the majority in number and value of the creditors parties thereto should be binding on all the parties thereto, and should be effectual for the allowance and passing of the accounts of the said trustee, and for discharging him from the trusts thereof, and from all claims and demands in respect thereof; and that all questions relating to the same should be decided according to the English bankrupt law. The indenture then concluded with a release to Ellis by his creditors, parties thereto, subject to a proviso, that the same should be void in case Ellis had concealed or kept back any part of his estate and effects to the value of 201., except the linen and wearing apparel of him and his family. The jury having found that the deed was executed bona fide for the benefit of creditors, a verdict was entered for the plaintiff, leave being reserved to the defendants to move to enter a nonsuit, or a verdict for the defendants, if the court should think that the deed was void against creditors not executing.

M. Chambers, Q. C., having obtained a rule nisi accordingly, citing Owen v. Body, 5 Ad. & El. 28, and also on the ground of the verdict being against evidence,

Miller, Serj., and R. B. Miller, now showed cause. It is said that the deed is void on the ground of its containing a clause enabling Ellis to be employed by the trustee in carrying on his trade, which, it is said, would have the effect of making those creditors who should sign it partners. The case relied on by the defendants is Owen v. Body, 5 Ad. & El. 28; there the deed authorized the trustees to carry on the trade of the debtor so long as they should think desirable, and to pay such sums of money as should be necessary for the continuing and carrying on of the business and keeping up the stock in trade, and the court held the deed to be void against creditors who did not execute it, because it imposed, therefore, such terms as might have constituted a partnership among the persons executing. In the present case, the deed of assignment would not have the effect of making the creditors who execute it partners in the business. The object of the deed, as disclosed on the face of it, is only to wind up the affairs of the concern. It would be impossible to dispose of the good will of the trade

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Janes v. Whitbread & others.

(which, indeed, was the most valuable of what was assigned) to any advantage, without carrying on the trade in the mean time; and all that this deed contemplates in the way of the trustee carrying on the business is only for a short time, and so long only as would be neces sary to accomplish the sale of it.

[Jervis, C. J. You say the deed is an assignment on trust to collect in the debts and effects of the debtor, and the trade is to be carried on only for the purpose of winding it up.]

Yes; and this distinguishes the present case from that of Owen v. Body; but if this case cannot be so distinguished, then it is submitted that Owen v. Body is not law, for the reasons given in that case by the court might equally be applied to every assignment for the

benefit of creditors.

[They then contended that the verdict was not against evidence.]

M. Chambers, Q. C., and Honyman, contra. The defendants are entitled to have a nonsuit, or a verdict entered in their favor, on the ground of the deed of assignment being fraudulent as against creditors under stat. 13 Eliz. c. 5. It appears on the deed that there is a trust for the benefit of the grantor, and that the deed is not for the benefit of creditors, for whose benefit it is said to be set up as valid. This is the foundation of the authority of Owen v. Body, which is not distinguishable from the present case. The deed here empowers the trustee to carry on the trade in the usual manner, and, therefore, in the language of Lord Denman, it imposes terms to which it would not be reasonable to expect creditors would submit. It creates a trust for the benefit of Ellis, the grantor, which invalidates the deed, according to the second resolution in Twyne's Case, 3 Rep. 81 a., and prevents it from being within the 6th section of 13 Eliz. c. 5, which excepts from the operation of that statute any estate made on a good consideration, and bona fide. The deed, not being one which would be beneficial for creditors, is a deed made with the intent to delay and hinder creditors, within the 13 Eliz. c. 5, s. 2.

[Maule, J. Every deed which has the effect of withdrawing property from a creditor is strictly a deed made with the intent to delay, within the 2d section of the 13 Eliz. c. 5. But the case of Pickstock v. Lyster, 3 Mau. & S. 371, decides that, if the deed provides for a fair and equal distribution amongst all the creditors, it is not within the spirit and intent of the statute. The case of Owen v. Body distinguished the deed in that case from Pickstock v. Lyster, because the deed there did not, as the court said, provide for a fair share amongst the creditors, as incurring debts for the carrying on of the trade was not such as creditors willing to take a fair share could reasonably be expected, as Lord Denman said, to accede to. In fact, the object of the deed in that case was to carry on the trade in a spirited manner.]

The present case, it is submitted, is as strong as the case of Owen v. Body. [They then proceeded on the point of the verdict being against evidence, but as to this the court stopped them. The court, however, wished to be informed if there was any rule in interpleader

Janes v. Whitbread & others.

suits, respecting costs upon granting rules for new trials, different from what it is in other cases.] It is submitted that the costs should abide the event of the second trial. This court so granted the rule in Gillingham v. Stuart, which has not, however, been reported. [The case of Hood v. Bradbury, 6 Man. & G. 981, was also referred to.]

JERVIS, C. J. This rule was obtained on two grounds: the first was, whether the deed of assignment was not inoperative by reason of there being in it a power to the trustee to carry on the trade of the debtor; and the other ground was, that the verdict was against evidence. The court granted the rule on the first point, for the purpose of discussing the case in contrast with Owen v. Body, which was said to govern the present case. The argument of this case has shown that Owen v. Body is not applicable to it. There, one of the purposes of the trust was to carry on the trade, and Lord Denman, in delivering the judgment of the court, that the assignment was not good, said, "The deed imposed such terms as might have constituted a partnership among the persons executing, and those were terms to which creditors were not bound to submit." In the present case, however, the deed contemplates the selling the property assigned, and the winding up the affairs of the debtor, and only authorizes the trustee to go on with the trade for the purpose of winding up, which is the principal object of the deed, the carrying on the trade being no more than ancillary to it. I, therefore, am of opinion that this deed is not void; and for the reasons I have already stated, and which were pointed out by my brother Maule in the course of the argument, I feel justified in saying that this case is not governed by that of Owen v. Body. As to the verdict being against the evidence, I think the rule on this ground should be made absolute. Then the question is, On what terms? According to the ordinary rule, it would be on payment of costs, because there is no reason for saying that the jury have improperly arrived at the conclusion they came to. It has been suggested that a different rule applies to an interpleader issue than to other cases, and that we so acted in the case of Gillingham v. Stuart; but it seems to me that that case is no authority for departing here from the general rule, for in that case the new trial was granted to ascertain whether the plaintiff had been guilty of fraud by means of perjury in the evidence he produced on the former trial, so that the costs of the first trial would necessarily depend on the result of the subsequent verdict, and, therefore, the costs were reserved. Here, however, the ordinary rule must prevail.

MAULE, J. I am of the same opinion. With respect to the case of Owen v. Body, I think, on the grounds I have already mentioned, it is distinguishable from the present case, and I do not wish it to be thought that I find fault with the law of it. I think the judgment in that case, if understood with reasonable reference to what the learned judge was speaking about, may be easily intelligible. In that case, the main object of the deed was to carry on the trade for the benefit

Arden v. Goodacre.

of the creditors; but here the main object was to have the property realized; so that the two cases are perfectly different. As to the verdict being against the evidence, the court agree that there ought to be a new trial on that ground; but I do not see any thing in the case which is to take it out of the usual course as to its being on payment of costs, and which course applies to interpleader issues equally with others.

CRESSWELL and TALFOURD, JJ., concurred.

Rule accordingly.

ARDEN V. GOODACRE.1

Trinity Term, April 29 and June 9, 1851.

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Sheriff, Action against, for Escape - Measure of Damages — Final Process 5 & 6 Vict. c. 98.

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In an action on the case by an execution creditor against the sheriff, for the escape of his debtor, the measure of damages is the value of the custody of the debtor at the moment of the escape; and no deduction ought to be made on account of any thing that the creditor might have obtained by diligence in retaking the debtor after the escape.

CASE for an escape, against the late sheriff of Leicestershire.
Plea Not guilty.

This action was brought, pursuant to a rule of court, dated the 31st of January, 1850, (see Reg. v. The Sheriff of Leicestershire, in a cause of Arden v. Bingham, 14 Jur. 1026,) for the purpose of ascertaining the amount of damages the plaintiff had sustained by reason of the escape of W. Bingham, who had been taken in execution by a bailiff of the defendant on the 5th of January, 1850, upon a writ of testatum capias ad satisfaciendum, at the suit of the plaintiff, for the sum of 26907., and interest on 21567., at 5l. per cent., from the 29th of December, 1849, with costs of execution, &c. The trial took place, before Jervis, C. J., at the sittings for Middlesex, after last Hilary term, when it appeared, with reference to the question raised by the present motion, that after the escape on the 5th of January, 1850, and pending the proceedings in this action, Bingham was again taken in execution by the sheriff of Kent, at the suit of other creditors, and, while he was so in custody, information was given on the 10th of August, to a clerk at the plaintiff's attorney's office in London, of that fact. The attorney himself was out of town at the time, and did not return until the 12th, and the clerk, in the absence of his principal, took no steps to detain Bingham, and he was accordingly discharged from custody on the same day. The chief justice directed the jury, that the plaintiff's attorney had thus been guilty of negligence; that the maxim, "Vigilantibus non dormientibus subservit lex," applied; and that the jury might take into considera

1 20 Law J. Rep. (N. s.) C. P. 184. 15 Jur. 776.

Arden v. Goodacre.

tion the conduct of the plaintiff, and might reduce the damages if he had been guilty of laches, and could have arrested the debtor at a period subsequent to the escape, when the debtor had the means of paying his debt. The jury returned a verdict for the plaintiff, damages 401.

Byles, Serj., (April 24,) for the plaintiff, obtained a rule nisi for a new trial, on the ground of misdirection; against which

Channell, Serj., and Hugh Hill, (April 29,) showed cause. The question is, whether the sheriff can set off against the value of the debtor, at the time of the escape, the amount which the plaintiff may have lost by his own laches. It is submitted that the plaintiff was bound to do all in his power to lessen the loss he sustained by the escape, and that the direction to the jury was right, that they might consider, in estimating the damages, that the plaintiff had taken no steps between the 5th of January and the month of August following to retake the debtor. It is the duty of the creditor, as well as of the sheriff, to take the debtor, and the former may have the greater opportunity for doing it; he may issue a fresh ca. sa., whereas the sheriff could not take him if he was out of the country, except on fresh pursuit. (Dalt. Sheriff, 139.)

[Jervis, C. J. Suppose a carrier between A. and C. leaves the plaintiff's basket at some intermediate spot, B., and tells the plaintiff where the basket is, and that he must get it himself; if the plaintiff has the means of getting it, and refuses to do so, is the measure of damages the full value of the basket?]

No; but that is not a parallel case. The question here is, What is equitable between the parties? The court may say justice has been done, for now, under the 5 & 6 Vict. c. 98, the sheriff is only bound to indemnify the plaintiff. The latter is not at liberty to say, "I have got the sheriff, and, therefore, will make no exertions myself." If the question depends on whether the sheriff is to be considered as a tort feasor, or as a contractor who has broken his contract, of the two he is the latter, and it is not necessary to prove damage as well as injury in an action against him. Suppose he had retaken the debtor, and the plaintiff had got his whole debt; in that event he would have been entitled to a verdict, with nominal damages, in an action against the sheriff for the original escape; Clifton v. Hooper, 6 Q. B. 468; and the case would be like that of Marzetti v. Williams, 1 B. & Ad. 415.

[Williams, J. The sheriff, by his breach of duty, abridges the satisfaction to which the creditor is entitled. This is a sufficient reason for the latter being entitled to damages for an escape, without resorting to a contract. The creditor is entitled, when once the debtor is taken in execution, to the continuous custody of his body.]

Suppose that the sheriff is a tort feasor, then the case stands thus: the escape was on the 5th of January, and the debtor immediately goes to France; there could, therefore, have been no recaption. The

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