1841.

GIBSON

v.

CARRUTHERS.

Exch. of Pleas, have occurred where contracts of purchase, made with the fraudulent intent to cheat the vendor, and dispose of the goods at a swindling price to raise money, have been deemed void. In some cases such contracts have been made the foundation of criminal charges of felony or fraud. If a man, intending bankruptcy, were to purchase goods for the mere object of making a better dividend, or of preferring a favourite creditor, without the least intention of paying for them, I presume, upon the clear proof of such facts, the vendor would be held absolved from his contract. Now bankruptcy and insolvency are presumably founded in intention and fraud, and the law, which protects the vendor in such a case from the loss of his goods, by delivery of them to a bankrupt or insolvent, may very properly be considered as proceeding on the principle, that a contract to purchase goods by one, who shortly after becomes bankrupt or insolvent, was a fraudulent contract, and void as against the vendor, though not against the vendee, who could not set up his own fraud to avoid his contract. I consider the absence of all example of the assignees of a bankrupt vendee bringing an action for the non-delivery of goods, a very cogent proof of the opinion which has prevailed on this subject. But there is a case of an action brought by an insolvent vendee against the vendor, the decision of which goes the full length of establishing the position I have laid down, that the insolvency of the vendee discharges the vendor from the obligation of parting with the goods upon credit. It is the case of Reader v. Knatchbull, tried at the Sittings at Westminster after Hilary Term, 1786, before Mr. Justice Buller. "The plaintiff declared upon an agreement by the defendant to deliver to him a quantity of Manchester cottons. The defence was, that after making the contract the plaintiff had compounded with his creditors. Mr. Justice Buller directed the jury, that if they believed the plaintiff was really in such a situation as to be unable to

1841.

pay for the goods, that was a good defence in point of law Exch. of Pleas, to the action; and the jury accordingly found a verdict for the defendant." A note of this case will be found in the report of Tooke v. Hollingworth (a).

This authority ought to be deemed conclusive upon a question in which common sense and common justice point to the same conclusion. Now to apply the principle to the present case. Is it a case in which the vendor, after the commencement of the transitus, might have stopped the goods, and prevented their delivery to the bankrupt? That it is so is proved by the case of Bohtlingk v. Ellis, already cited, in which, though the vendee, by the contract, was to charter a ship and send it for the goods, and though the goods were accordingly shipped in that vessel, it was held that the vendor might still exercise the right of stopping in transitu; that case is indeed exactly similar to the present, in all points but one, which makes this a stronger case for the exercise of the right, and that point is, that, by the contract, here the vendor was to retain the bills of lading in his own hands till they were exchanged for the money. It is the case, therefore, of a contract to sell goods to be delivered at a future time, before which the vendee becomes bankrupt. If, therefore, the vendor should ship the goods before he has notice of the insolvency, he has a right to stop their delivery to the insolvent, who cannot pay him for them. Is he bound, then, after previous notice of the bankruptcy, to send the goods upon the chance that the assignees may take them and pay him? Surely not; the assignees are under no obligation to pay him; they may refuse to take the goods and leave them on his hands. He is, therefore, according to the opinion of the other members of this Court, reduced to this dilemma, that he is bound to send the goods to London, there to take the chance of market, which, if favourable, may tempt the assignees to receive them, and pay the price; if unfa(a) 5 T. R. 218.

GIBSON

v.

CARRUTHERS.

1841.

Exch. of Pleas, vourable, must bring a loss upon him, even of the whole, should the price not be equal to the freight. Whereas the very object of his contract was, to sell for a fixed price, and have nothing to hazard.

GIBSON

บ.

CARRUTHERS.

Under these circumstances, it appears to me that he was discharged by the insolvency of the vendee from the obligation to send forward the goods at all: that according to the case above referred to, he would have had a good defence against the insolvent, had he, being insolvent, brought an action for the refusal to ship the goods before his bankruptcy; and consequently that no cause of action for not shipping the goods vested in the assignees.

I observe the declaration is so framed as to embrace the alternative of a right of action in the assignees upon the original contract, and a right of action derived from their notice that they would perform the contract in place of the bankrupt. But if no right of action existed in them to compel the shipment of the goods, the declaration is bad; and I am of that opinion.

But if it could be supposed, which I think it cannot, that any right of action could arise out of their notice that they were ready and willing to receive and pay for the goods, then, as such notice must have been given in reasonable time, the plea which alleges that it was not given in reasonable time must be good, so that in either case the judgment on the demurrer ought to be for the defendant.

I would add only one remark, to distinguish the case of an executor from that of an assignee. A party contracting to sell goods must contemplate the existing and continuing solvency of the vendee till the goods are paid for, but he cannot contemplate the continuance of his life, so as to make that an implied condition of the delivery. He contracts, therefore, in point of law, with the vendee and his executors, but not with the vendee and his assignees.

Judgment for the plaintiffs.

Exch. of Pleas, 1841.

VACATION SITTINGS AFTER EASTER

TERM.

JONES v. WILLIAMS and Others.

May 11.

TRESPASS for breaking and entering the plaintiff's Trespass for

that the defen

an action a

breaking and dwelling-house, and seizing his goods and chattels. Plea, entering the that before the said time when &c., the plaintiff com- and seizing his plaintiff's house menced an action of debt against the defendant John goods. Plea, Williams, during the pendency of which action it was, by dant brought a certain agreement in writing made between the plaintiff gainst the plainand defendant, after reciting &c., mutually agreed to refer tiff, which was the said action, and all matters in dispute in the said cause, bitration by an agreement afto the award, arbitrament, and final determination of R. terwards made G. T. [The plea then set out the agreement, the material provisions of which were as follows:] And it was further

referred to ar

a rule of Court;

that the arbitrator awarded a

certain sum to

be due to the defendant, and

refusing to do,

issued a writ of

agreed, that the costs before then incurred by the parties to the said agreement in the said cause, or in anywise ordered the plaintiff to pay respecting the said disputes and differences, and such it on a certain as had been incurred up to and inclusive of the day of day, which he that agreement, including the costs and charges of wit- the defendant nesses who had been subpoenaed by either party to attend fi. fa, and levied the trial of the said cause, and the costs of their travelling on the plaintiff's goods. Replihome, and the costs of preparing the said agreement and cation, that by the said award, and of carrying the same respectively into it was effect, and the costs and charges of the said arbitrator, and the costs and charges attendant on or incurred in the said reference by the said parties, their advocates and wit

a rule of Court

that the said

writ should be

set

regularity.

Rejoinder (by way of estoppel) that, after the

making of that rule of Court, the plaintiff ruled the sheriff to return the writ of fieri facias : — Held, on special demurrer to the rejoinder; first, that the replication was good, and that it was unnecessary to aver that the rule of Court was acted on.

Secondly, that the plaintiff, by ruling the sheriff to return the writ, was not estopped from shewing that it was not a good writ, for although it might be bad as against the party suing it out, it might still be good as respected the sheriff; and that the filing of record did not affirm the existence of a void writ; and therefore that the replication was bad.

Thirdly, that the 1 & 2 Vict. c. 110, does not authorize a party to issue execution for money awarded by an arbitrator.

Fourthly, that the words in the 18th section, "monies or costs, charges or expenses," mean money decreed or ordered to be paid, together with the costs, &c., to be ascertained on taxation by the officer of the Court, and that no order to pay costs is requisite after taxation.

VOL. VIII.

A A

M. W.

1841.

JONES

บ.

WILLIAMS.

Exch. of Pleas, nesses, should abide the event of the said reference and of the said award, to be taxed as between attorney and client, and to be paid by such party against whom a balance of the accounts should appear to be due by the award, at such time and in such manner as the said R. G. T. by his award should direct. And it was agreed that the arbitrator should be at liberty to examine, ascertain, and settle the accounts as claimed in the particulars of the plaintiff's demand, and the defendant J. W.'s set-off in the said action; and the arbitrator was to be at liberty to direct the payment of any balance which he might find to be due from those particulars, either from the plaintiff to defendant J. W., or from defendant J. W. to the plaintiff, at such time and in such manner as the said arbitrator should think fit: as by the said agreement, reference being thereunto had, will fully appear.

The plea then stated, that the arbitrator awarded that there was a balance due upon the accounts from the plaintiff to defendant J. W., amounting to 697. 8s. 11d., which sum, together with the costs, charges, and expenses, the arbitrator directed to be paid by the plaintiff to the defendant J. W. on the 1st September then next: it then alleged that the agreement was made a rule of Court: that after the making of the award, and before the said times when &c., the costs, charges, and expenses, so made by the said agreement to abide the event of the said award, were duly taxed as between attorney and client, at a large sum of money, to wit, the sum of £239, whereof the plaintiff afterwards had notice, and was then requested by the defendant J. W. to pay him the said sum of 697. 8s. 11d., together with the costs, charges, and expenses so taxed as aforesaid, amounting in the whole to the sum of 3081. 8s. 11d., according to the tenor and effect of the said rule of Court, and of the said award and submission, but the plaintiff wholly neglected and refused to pay the same or any part thereof: that afterwards, and before the said times when &c., the said rule of Court being in full force and effect, and the