Court Of Common Pleas, Gu...
____J3AjO0" 1J-e IOrif ChdcfJusstice BESr - nnA q ..pr . ; ,I- rs. "K-. rOLLOCIt pened the pleadiing,s. The plairtiffiiinthis action t"ee-T tlbe Assgtecs of the estate of John Legh alid Co., basikrup- s, and ithe defendn-ats vwere Messar. Alorlansis, Auiriol, and Co., d~'irsi Pall.MAIL. The actGio was for money had andi rcceived. ''the de?cndantshd I oeaded the general issue, end on that pDint i-xie htaxl been joine~ 'Mr. %SeMent WIt n~ opened the case for t'he plainitiff, wrht cl,h Sal, WIMMCdmfLs materials ofeonfusion than any cause whichi J_e- had I-nowf l ittig his exKerence at the bar. He wotuld, how- ever, exert bis utmost endeavour tosmlf it, and to present it in I cea aL~hveasPossileCor.the consideration of the 'u' -. This zt0 tsbrOught to revcvr 6.000. being th arceds olsix bills of exeli=i~ fr101.eh,vhich th akrupt John Leghi hiad ZPO!sited ins t-he bauds of the defiendants. The ustio" which the 31-cY aswud b-:re to decide was simply thlis-hiad Ih d efendants; any ra-t-ofF to reducL the ClaiM Vwhich hiis clients miadie upon themi? The dc'detJ3t3 Atdmintte that they had Teceived the sixbills of exchange; bult theyanidthatuthlybatone set-off'againsttheni of 4,0861. lOs. 1Od., inrsetOf thr ee bills which they had discounted for the 0 rrel an enbee-tOz Coal C-ozpany, of which the bankrupt Joi ig ba bcath a lts; and another set-off of 1,2801. 1M1. 5i., which the same John L-agh had overdrawn on% his private banking ac- count;- whieb, truth a sum orf11321. 12s. f9d. that they had paid inito C-ourt, would make up the suim of 6,0001. claimed by the plain. t.iflit. The items which, made up thc sum of 4,08111. l0s. 10d. w9uld all deMe41 upon the same principle; said as she chiefquestion in the 'muse M-0-2. 0at of them he should shortly procceed to state it, mere- ly 'nfornIDg his lcaled 'friends n thie ocher sidec, that hie sihould Pu't themi to the st2ict peo~f that the bankrupt had Overdrawn his ac- Qiftby 1,2S&il, with -the de.fendlants. Int the commnencemnent of the Yc' 1822 the Orre.l andi Pemberton Coal Company stood in need of P'cu'arY 3.SLSratce, and appliedl for it to Air. AMorland, through the ace'c Of the bknk-reot, who asked themn to discount for thatCorn- hsi is~- nos iae Of haid for 1,2501., anid 'wo bills, one of l,50OOL and another or 1,0001, drawn upon a person of thte namne of Lea, residing in tpn'-e, Dublin. At thie timRe these bills were (Ir"C"sloted, the bankrupt deposited with 31c~srs. AMorlands, six bills of exeltarie as a collateral security and the present action was brought to r-corer thseir proceeds, as the bills which they hiad been ~Ira tO ac-cure had some timne ago been discharged. T he dcfea 2ants coastnded that those bills had not been dischtarged; andl if they OvJId establish that point, they had a right to retaini so m itch laf she proceeds of the six bills as Would protect them fromn any Ioloss. He nluss Doir inform the jurv that the Onrel ard Peniberton Coal (xmpan.)v eptV en accouni wi I the defendants-that the bankTssPt, John egit,also ept en aczcount with them ; as dlid also his lbre. they Mr T.Leg, thfe nmember for Newton, who was under several gualt. tn themi for the Orrel and Peamberton Coal Company. It wast his dutv that day to contend that the 'hbee bhi! for 3,7501. haid. bceel diszcha2rged uy the Orrel antl Pemberton Coal Companiv; anti iNZ-1oing so he should chiefly, rely upion an accotunt which 'the de- ft~-sanL, themnselves hadl delfrecred in t~o that company. It appeared f&heil tbat areount, thatt time three bill, to whiich hehd alluded were dsIMhOnonred when they became dute;' th3t the defendants had placed -;hZern to the debit side or the Orrel and Pemberton Coal Com-pany's 1a2?count tha"zzt they hall afterwrardas received nmany large paymnents upVon tihat accunt, and had finally closed it by Tcceiving as balanMce from Mr. T. Lath the large sum- of 33,7481. NOW it 'r.-cco for hinm to sue what the accounits wrere between Mlr. T. L:c-h and the deferiddits he had c.nly to contendi thiat they hadt cou rignt to re-rLin the proceedIs of the bankrp hsin on account of an .lim chy might suppose tlemeselvei to have uipon his brother Mr. T. L,e~.h. He' laidl it down as a clear point of law, thiat whieni a banker hid a demand acainst his customer which he placed on the debit Sidr of the clistomei's account, anid when he wenit on receiving and payingr large sunis of money on behalf of that customer, he haul Ito rtg,h't at the clotin-' of the a~otmnt to go back anid select any par. ticular item of it" ara Say tdlat it had not been paid. Tne aunts re- eIred must alway,i be considemi as going to the payment of thec eldesat item~,, and could not be pjaced in oppositlon to anv particular itens 17hich the banker might think it proper toselecr. Tl~lsis princi.. pi!e hiai been established in Vevainoe'9 case, and( was now considered ras indi:sputablclaw. Acting upon thi pinciple, he contendled that the three bilL, to which he hadt before alluded were fully satisfied by sums which thcdefaxdan,sack-noslerleed theniselves to havre received on btafo h O-rel and Pemuberton COmt Company, after thie dti- I tmoaoair of the bills a-as. no-iaed to them. If lie made that point -at in evidence, his, Lordship, he was, sure, wouuld telU them that they tsit~t.~on oflaw, tind a etlc fo rhis clients. ThaimAe or pvingintoCourt 03-21. l99. d.. wvas then u i n read, forthT LCpurpose of prov,ing that the pla-intiffis were the assigne-s under the cauninuiojn is:aued againtm John Le-gh and Co. M5r. SeTg-at TADDY, for the detendants, submitted, that as they had givten rittice to the plaintiffs at the time they paid this money into tOur, that they shouild call iupon them to prove the act of bankruptcy, ned4 the sibsequen.t proceedings under the commission, the payusvnt'e'f that money into, Court Ought not be zonsidered as a waver of their right to dispute that Which they had given notice at the timte of maicin.t the payment, that theel would dispute by every mcanas Int their power. :ll.:eat St.ktri followed on the samne side. ft Was unfair to Prsum that a Pary smttelud that which h egave n otice that h e would dispute. If the doctrine were considered sound, that the payment of money Into Coonr, in en action brouight by the assignees of a ban-krupt, admi-ted the validitr of the comnisasion, what was a de.. fendznt to dlo who disputed tfse commission, antl Yet felt that-he aas intlebtied to a egrtain point .o the estate of the bankrupt, thoughs nct to the amnount claimned by hiis assignees ? Mlr. Se; rgant AVTLDI admitted that the defendants had given no-. tice to his clients that they wrould call upon) him to Prove tile pro.. ccedings unider tile commnnission, lie di-i not feel it necessary to ar- gue th point Yrhich his learned friends hiad ituSt made. The 11ORDi tttTEF JV-STICE maintainied, that the payment of mocney into Court admitted time title of the plaintiffs to sue for it. The ;t!mintifli were mentioned in the rule as the assignees of John Le4h, a bankrupt. This Was en admission on the part of the de- fendants that Legh was a bankrupt, and the plaintiffs were his assig.. flees.Theriiwas., therefore, no occasion, in his opinion, to prove tim proceeding tidr the commrission. .Mr. Sergeant TADDY requeste-d that a note might be taken of this Ti.!. i-i immediately assented. :klr. rKnigIt, thelintf attorney, was then examined: he de- posed as follors :-.l receiv-ed this account (producing a written pa- 1er) from 11r. Williams, the cashier to .Morluads end Co., as their aczrount with the Or-nl and Pernbertan Coal rompaay. It has been admitted by Sir G. Duck-ett, One of the partners in the firm of Mlor- land and Co., as their accountin my presence, and in thiat OfMSr. Wil- lsing. I conversed with themn regatrding it about a fortnigzht ago, At that thne SkIr. Williamns stated in the pre.~ence of Sir G.Duckett, s.hat six bills rotr 0,0001. ba.d beeni received by them from M1r. John L-gh, the bankrupt, as a col'ateral security for their discounting his our. note of hand for I 25U1. and two bils drawn on a person of the name of Lea, at D-ablin-the,one for 1.0001. and the other for l,5W0L 1Mr., Wiliams swaed that there wias a further bill of 1,0001. which thev had paid to John 1eigh, as against the produce of the bills for -01 which they had received. I did not clearly under- stand whe-the-r this last bill was for the Orreal and Pemlberton Coal C,aMpanly, or tbr Mr. John Legh's private account ; I think itwas for the latter. They told me that the three bills they discounted were dishernoured, ant! therefore thee claimed the proseeeds of the six bills as a set-off. The three bills when dishonoured were puit to the debit of the Orrel and Pemberton Coal Compary. The entry on) February, 20, 1822, i-s, "Bill on J. P. Lea, returned 1,10O1L 16s. 3d. Irish, at Si, 1,0161. 16&.Ii The secosd en' is " Februiary 22, bill on Ltegh returned 1,2501." The esit'y one 28al,',th of Febmuary IS, Bill On .1. P. Lea, rTtu-rntd l,66l 1. I& d. Irish, at 81, L5 II% 6d." It appears by this accoutnt that they had credited the Orrel Company, o-n the 17th of January, 11122, wi h ewe of the bills, which were afterwards returnedl, end tIme note of 1,2501. on a s-abssepiernt dayr. Crovs-ewcarine.i by Mlr. Szeigeant TADDY..-Sir G. Duckeftt was treesu-ni at the whole of thec conversation which I had with Air. Wil- Fiing. He w-As writing letters part of the time, but he Occasionally Jumiedmini our discusslion. He discussed the question that bankers had a right to apply tshe sums they recleired to any item they chuose, notithumaingthe wee i th haitof making pay-ments and re. ceiro aiy fr te art. Imetioedto him, that the case of`D~- vaura as eciedl i th teth f scha practice. M1r.lWilliamns deliere upn oth t th Cotnisionrs f Bnkrptsthe account I hve rodced astheaccuntreglary kcptanddelvered its by his huse o th Orrl tedPembreonCoal an .I had this aczcount in my hn,adpitdt t hnIhdsu converfation wtith Sir Gcorw DcetndSrWilms. The whole discussion arosea uponz this paper. I poitedott them the items which I have Xj.c-.exaxnincil.-They told me that they hiad received the oroceeds el-thr bills forr 6,M)t. The zccourit -as then put in and read. It commenced on the 24th of January, end concludedl on the 5th of September, 182. Thec last item put so the creflit of thec Comipany was, " Per Thomas Let. 3.7481. Il9s. Id.." r.SZes-eant TAiDDY for the defendants, stated, that though he hail exatmined Sir. Knig ITbtetty strictly, as to the idenitity of thle a~untprodued, h wasnot inistructed, not t(lid he intend to contest the elieryof nynsout delivered by, the defendants, or te 'teny any receipt o payment of money that they had declared themselves to have mnde. He had cross-examuined Alr. Knighit in the manner he had 6don, n hope that he shouild elicitsomnething from -hifa whleb would come the ,plaintiff,.tocall Silr.Villiams,thecashier of eh~d~-~dat. me he oxso x1lan the accounts which he had ~w;t~,nd ltih oul ne befInlyexplaitned without hiun. As ~~isht. that-the whle trasaction should he fairly before. nir'e wold do iiacwhic hi leanedfrienid ought to hiave done : he iusad cll r. illamsint th bo, who shoutldsmtat to them thle whole of thi ray oplicate transaction. He must state to them-nit thi s saeo .eprocec!dhl that the defendantl did not come into Court omuhOn their own account' a oni0 account of 3Ir. T. Legh. He zdimited the principle of law laid downi byluis leared friend, thzat, sihen money lvas paid into the hanids of a banker en neettit of one of his citatomners, and when that banker was daily pyng ~d recccvinf money on Iiis behalf, the mioney paid into hiis hands muse be co-nindered a-s applicable to the earliest items on the bankers account, and could not be selecte-d as the balance teeany- particular item Iledid nct, however, sec how that principle o'law could ba applied to this case, which lie contended was altogether dificirent fromt the case of. Devainues, to which his learned friend had alied.. 1e would atate the: transaction to the julry in the manner in,' which hc intended to snake it oit in evidence. He admit- aa that three differeat accounts had been kept at Morlands', by Jehn Lsgh, the banlrspt, by Mir. T. Lcgh, the tuember for Newton, snd by the Orrel and Penbhrton CoalCompany. Now he mnuct saqt,s thetre, that Mer. T. Legh was under liabilities gene- r1lly tS lex5es. m olandns "d Co, for the Orrel and Pemnberton Coad (Conpany, .to the amount of 33000. ; andl that lie was indebted to them on thleir arount at the pernod when the bills were given which raised this action, in the sutn of 41,0001. That was a point whd ille r.isled the jsar to kee in their resnetnbrr en. In the be. ginirng of 182. Mr. John Legn, 'who was agent for the Orrel and PeFbebon caA C ompanry, applied to Measrs. MUorland for an ad- vance of eneya on t7o, bills of exchange-and his own note of hatnd, end requested tlut those billTs should be placed to the credlt of that FnPty. Mless Mloflatd.s, r.beotmg satisfied vith the biljl, asked for oMea co0llztraj t-ecrity. In consequence, they receiver-first thrze bills, nd arsfrards two more bills of exchange for 1,0001.. ea_ch drawn on the Rev. M?r. Hill. Having tbus got se- eurity for t.C0L, thery adrnced 5,7001. to the Ornel andi Pem- tnna CQQ~I Company. 3Ur. John-Legh, at the same time, pplsed Gat anz isanCeof 1,001, on hiown privateacount, and hainjr gireas a fixth bill fqr 1,pW0I. obtained it- Finding that the Usy itetd gin s c thr. coverda the advaes hich aad been naide to Wim, Aifr. John Legh asked leave to overdraw his ac- count. He did so; and by thati neans had given the defendants a set off', whicb he should prove to them in a nidannier that Mr. sSergeant WVIP.b said that he would adimit that tle defend- ants hail a right to dleduct the 1,011. whlich tdeyhafl advanced for the.~petsonal use of the bankrupt, and also the 2801. i6s. 5d. byo which he had overdraw n his account.- The LORD C;lrClE? JJusrtcFg.-hen, as a unm of money has beet paid into Court, this admission narrows the question to this point_.-ave the defendants a right to retain the amount of the thre'e bills anid theloss charged upon them ? Does it not? Mlr. Sergeant VILDnS replied that it did. A conversation then took place at the bar, in whioe. it was deter- mined that the snm of 3361., charged by Aliorlands as a loss of profit on the three bills, owing to thicir non-acceptance in Ireland, should be referredl to some gentlemen to decide wlhether, undler the particu- lar circumstances of the casc, it was a charge that bankers usually made to their ctstomers; if it were such a charge, then it was to be allowedl to them in the account. Mr. Sergeant TADD Y then proceeded with his 2ddress to the jury. He was glad that the qulestion for their consideration had beer thuls niarrowctr. His learned friend argued on the supposition, that after these thrce biUs had been debited to the Orrel and P;mbertonoCoal Company, large payments had been received by Messrs. ALorlands and lo., on their behalf, which more than coveredi thenm; and, as a proof of It, he had stated, that 33,tJ00. had been paid to them on be- half of the Company, by ir. T. Iegh, Now, he would tell his learned friend. that no payment had ever been made by Ehat gentle- man; the l3,01t)]., to which his learned friend had alluded, had merelv been transferred to the credit of the Orrel and Pemberton Coal Company, an( to the d&bitof Mlir. T. Legh1. If there had been a pavnment in cash by Alr. T. Legh to them, then lie would allow tbat his leamned friend's law would l4ave applied to this case; but he Iwould prove to themn, that there had been no paymenit, but otily a transfer, which did not discharge ihe claim whiclh Alessrs. Morlands had upon these bills. lessrs. IMorlands had made this transfer, because ilMr. T. Legh was under liabilities to them to a very great amotint for the Coal Company; anC having mrade it, thev invested I AMr. T. Legh with all the rights which they had formerly possessed. Nothing was rnore clear in point of lawv than this principle, that if a creditor went against a surety instead of against the principal, the surety was entitled to all the bene,'it whicl the principal would have had. had the surety gon.4against him. Hemaintainedtthatif thejtirv should entitle the assignees by their verdict to recover the sum thev now claimed. they would be taking so much money from the pocket of Air. T. L,egh. His learned friend lhad acted as if accounts had been closed, not only between Mtessrs. M1lorlinds and the Orrel anti Pemberton Coal Company, but also between them and MIr. T- Legh but this was by no means the case; the accounts were still running on, and both of them were in debit to Morlands. If he should sAake out these points in evidence, he helt that the defend- ants must be entitled to a verdict. Mir. B. WVilliams, the cashier to llessts, MIorlands, was then put into the box. flis deposition was as follows :-Mess s. Morlauds have an account wiih Thomas Legh, vltit John Ltgh, and with the Orrel and l'embercon Coal Company. I know that Jolin Legh was the agent for that Company. I recollect that *bout the mid-t (le of January last, he pp'icd 'to uS for advances in favour of that coninany. He wisiied two bills, one of 1,0101., and another of 1 5001. drawn or. a Atr. Lea, of Dublin, to be placed to their credit. 1i e (lid not accede to thart request-at least not in the first instance. WVe were not satisfiecd with the security of the bills, and we were un- der heavy advances to the Company. ie then tendered. us three bills of f,000i. each, which were deposited with us as a collateral security for the bills drawn on Dubln. On his producilg those (sills, wue Pittthe former bills to the credit of the Orrel anti Pemberton ,.oal Oonpanv, laving tirst made inquiry into them. Two Iays afterwards, John ILegh b -ught us 1,egh an l Son's note for 1,2501. to be placed to the credit of the Orrel and PembeTton Coal C-om- pany. lXle agreedl to place the n so, on rcceiving two other bills of 1,0001. each as a collateral security. These five bills on iir. Hill had then about twenty montiths to rmn. Alr. T. Legit had come untler great liabilities for the Orrel and Pemberton Coal Com pan, and we had furnished money toit on sccmirities'Which he had furnisihed. On the 5th of September, 1822, 33,7481. 1Js. Id. was transferred bv Ua to the credit of the Orre1 and Pemberton Coal Company, anti to the debit of T. Legbl. The LORD (C1IFr JUSTICX. Looking at this accouint, anti seeing " per T. L.egh, 33,7481. l9s. Id.,- I should say it was a sum of money paiml in by .Mr. T. begh-how was it ? The witness.-There was no cashlpaymcnt from T. Lezh corres. poruting w ith the entry made on the 5th of Septeniber. That entry wan made by us in consequence of a large sum of money being paid to uis for MIr. T. Legh. Wlte transferredl it to the cretlit of the Orrel and Pcmnberton Coal Comnpany, and ilebirel ittohlisaccount. Wlhen Mr. T. Legh camle to teovn lie was informedI of the transf r. le wvas also told that tihete was a further sum of r,,0001. due from the Orrel and Pemberton Coal Comz- pany, on bills than1 running; that 33,7481. oldd had been transferred to his debit, but that there would be 3,000 anti odcl pounds due to his balance in rthe cnsuing September, arising froni the produce of the five bills. WVe hail available securities of Mr. T. Legh to lhe amount of 34,0001) We inanl a bond of his for 10,000 . The account of the Orrel and Pemberton Coal Company and of Mr. T. Legh werc never in credit with us. Cross-examined.-On the 22d of February, 1822, after these two bills hid been placed to the credit of the Company, their account was only bad by 1,2001. Independently of these two bills, we made pay- ments abnout the same time of 1,5801., on acceptances which we had given for thein two nionths previously. I do not know that the large sum of money which I stated to have been paid to our house for Air. T. Lerii amounted to 4B,0001. I know that it was about 30,0001. or 40,0001. The account with the Orrel and Petiberton Coal Coim- pany was kept in the usual forn. The case tor the defence was closed. Mr. Sergeant Wsx.ng replied ripon the evidence, andl contended that no answer had been given to the case wlich he had made out. He had stated that these bills had been satisfi. d in two modes-first, that they had been debited to the Orrel and Pemiberton Coal Com- pany, ind then that they ha(l been extinguished by the great pay- ment which the bankers bad received on its account ; and secondly, ,hat they had beeti satisfied by ithe payment of 33,0001. odd which had been made by Alr. T. Legh. Hlis learned friend had asserterd that no such pavment had ever been maade by Mr. T. Legh but although he gave it the soft name of ua tTansfer, his own wit- ness had proved that it was no, only a paytnenit, but- a pavment in caslh. Besides, it ought to be recollected trlat thie bills had been given for a special purpose, anti were not, therefore. applicable to the general purposes of the Company. Under these circum-nstances, 'he leat his case wit h confidence in the hiands of the jury. The LouD CHIEFF .JUSTICE, in sumningup the evidence to the jury, told thetn, that the accounts involved in this action were left entirehto their consideration. Thank Heaven, he liad notlhing to do with tfiemn. All that he had to do, was to expound the law relative to them, which was very clear. -By the civil law, m11oney receive(l by a banlker had alwavys been npplic3ble to the payment of the oldest debt. The law of E;ngland had at one tihne varied from the civil lawv; but it was now settled, that in the case of a banker the payments were not to be applied to any particular debt lie chose to sclect, lut to the oldest ite-is of account. The jury would, there. fore, consider in this case when these bills had been debited to the Orrel and Pemberton Coal Company; and if they fournd that the pay. nments afterwards received on its accounts by Mlorland were sufficient to liquildate 'hem, then the plaintiff wouliabe entitled to recover. Ile thought, however, that they ought not to take into their colsidira- tion the sun of 33,0001. otld, because it hacl only been a transfer in account, and not money absolttely paid. S ill, if tlre other sums re- ceived fbr the company exceeded the amount of these bills, it would is their duty, as he bad before told them, to find a verdict for the Itlaintiff. TieJury then retired; andI after being absent from C urt for a considerable time, found a verdict for the plaintiff-Damages, 3,1131. UOWUT OF COtU-1ON PLEAS. GflILDLrIAtt. SrTT.V w2. " ' sA aNLsOTUlsR, ASStGNEES OF LF.Ou, V. .IOftLAND .. _ -_ AND CO.