1813.

OLIVE

v.

SMITH.

[64]

that the bankruptcy happening on the 13th of December, the one sum might be retained by the defendant against the other: and the Court there approve of the case Ex parte Prescot. There were debita in presenti solvenda in futuro. So here, it must have the same operation between the parties, as if the payment had been made at the time the trust was given. Ex parte Boyle, Cooke, 5 ed. 561. Lord Cork lent Shepherd his notes for 9817., and Shepherd promised to indemnify him. Shepherd becoming bankrupt before two of the notes were due, Lord Cork paid what remained due on them, Shepherd having paid 100%. in part. The Lord Chancellor held, that the administrator of Lord Cork was entitled to set the debt due to Shepherd against the payments after the bankruptcy. This case must necessarily have proceeded on no other ground than that of a mutual credit; for it is only by the statute 49 Geo. 3. c. 121., that if a person is surety for another, though he pays not the money before bankruptcy, he may pay it after, and prove it under the commission. That case, therefore, most obviously shews, that though there was no debt due at the time of the bankruptcy, yet that as there was a mutual credit, when that mutual credit ripened into a mutual debt, it became the same thing as if it had existed in the shape of a debt at the moment when the mutual credit was created. In Smith v. Hod son, Lord Kenyon, C. J. there recognizes both the cases, Ex parte Deeze, and French v. Fenn. If there had been no mutual dealings, the defendant Hodson in that case could not have proved his acceptance as a debt under the commission. But when the assignees brought an action against him for goods sold and delivered, it was holden, in order to enable him to counterbalance his acceptance by the goods, that he had a mutual credit: for Lewis and Potter had trusted the defendant with the goods, and the defendant had trusted the bankrupts with his acceptance; and though it was not paid till after the bankruptcy, yet the right should refer to the time of creating the credit. Lord Hardwicke's first opinion is the best. [Mansfield, C. J. Unfortunately Lord Hardwicke's judg ments in general are known only by Mr. Atkyns' Reports, which are extremely inaccurate.] The last case is precisely in point, and justice is on this side. Ex parte Prescot, 1 Atk. 232. has been confirmed by many subsequent cases. The petitioner was creditor by notes for 1001. and 107.; and debtor by bond of 3401., not payable for near three years after the

petition,

petition, and he prayed and was permitted to pay only the balance. At that time a debitum in præsenti solvendum in futuro could not be proved under a commission of bankruptcy. So Lord Hardwicke necessarily must have decided this case on the ground of mutual credit, as the reporter represents.

Best, being prevented by indisposition from arguing the case, Rough, Serjt. endeavoured to support the rule. In the case Ex parte Ockenden the Court expressed a wish not to break in upon the laws of bankruptcy. The defendants have called in aid the justice of the case. It is a mere question of law; and there is no more injustice done if the plaintiff succeeds in this cause, than there is in any other cases of bankruptcy. [Mansfield, C. J. Acc.] The original briefs and record in Parker v. Carter have been searched into, and that case is found distinguishable from this; the printed report of the case states the defendants to have been general agents: it therefore was important to inquire in what their agency consisted. By the case laid before Wood, B. then at the bar, for his opinion, on which the action was brought, it appears that the general agency was exercised in the capacity of an insurance-broker only. Williams was at this time indebted to Carter and Co., for other assurances effected for him. Therefore it appears, there was no general agency, otherwise than in the character of insurance-broker, which differs that case from the present. And the question in that case therefore was, whether the allowance to the defendant should go beyond the expences on that particular policy; and the term general agent, as it is there used, means that he had a general lien for all policy business. [Gibbs, J. I observe that the argument in the report of that case is not founded on the ground of mutual credit, but of lien only, which seems to agree with the plaintiff's hypothesis; and it is extraordinary that the special case reserved upon the trial of the cause leaves us in the same obscurity: it says, he acted as insurance-broker, and general agent, as per accounts an nexed.] Those accounts have not been found. [Mansfield, C. J. It was a strange thing if there the question was, whether the defendant should retain only for his balance on that particular policy, or for the general balance of the insurance account. Gibbs, J. I came to London in 1775. I was pretty early conversant with some business of that sort, and never remember any doubt to have existed in the profession whether a policy broker had a lien for his general balance on the insurVOL. V.

E

ance

1813.

OLIVE

2.

SMITH.

[65]

1813.

OLIVE

v.

SMITH.

[66]

[67]

ance accounts.] Wood's opinion was, that he had no such lien. [Gibbs, J. The difficulty is, that if the doctrine of mutual credit is to prevail to this extent, there is no case where the doctrine of lien need be mooted in bankruptcy: for wherever there is a lien, there is also a mutual credit. Yet the cases have not gone on that ground, but many of them have been seriously and carefully considered on the question of lien.] Ex parte Ockenden was decided against the principle of mutual credit; and it now appearing that Ex parte Deeze was decided on the particular circumstances, that case must also be laid aside. French v. Fenn falls very much within the principal case. [Gibbs, J. There was no express credit in French v. Fenn, but the contrary.] Rough admitted that he did not know how to explain away French v. Fenn.

Adjornator.

On this day Best endeavoured to support the rule. He urged that the decisions relied on by the defendant had gone much further than the letter of the act of parliament warranted; the true sense of mutual debts and mutual credits was to be confined to pecuniary transactions only; and inasmuch as there were contradictory decisions upon the point, the most reasonable should be adhered to: the right of set-off could not, for the purposes of justice, be carried too far; but the right of mutual credits was not to be extended, because, instead of favouring an equal distribution of the funds among the creditors at large, wherein the greatest equity lies, it favours an individual at the expence of the general creditors. Lord Hardwicke is opposed to himself in two conflicting decisions; and Lord Mansfield, in Green v. Farmer, 1 Bl. 653., says that Ex parte Ockenden is the better doctrine: the cases Ex parte Deeze, Ex parte Prescott, Ex parte Boyle, French v. Fenn, and Parker v. Carter, must therefore be considered as having proceeded on a mistaken doctrine. (He prayed that this case might be turned into a special verdict, and might go to the dernier resort.)

MANSFIELD, C.J. The case of Parker v. Carter runs upon all-fours with the present case: the cases of French v. Fenn, and Ex parte Prescott, are also prodigiously strong. Some of those cases seemed to have gone further than the words of the statute would clearly warrant, and say that wherever there is a mutual trust, the balance only shall be paid. I should have thought that the words of the statute meant only money transactions;

but

but if the extension of mutual credit be, as it has been contended, a mistaken doctrine, the mistake is so deeply rooted, it having been again and again confirmed, that it would be rash indeed to overturn it; and there is a great deal of justice in the determination, at which not only the Court of King's Bench, but the Court of Chancery, have arrived on this point. It would be nugatory to put this in a course of further discussion, when every Court would say that the point had been determined again and again: the rule, therefore, must be discharged. HEATH and CHAMBRE, Js. concurred.

GIBBS, J. The result of the case of Green v. Farmer was contrary to this doctrine; and, therefore, if the doctrine of mutual credit is to prevail to the extent now contended for, the case of Green v. Farmer was wrongly decided: that case was decided solely on the question, whether the dyer had a lien, and the question of mutual credit was not thought of. The point was considered in the cases of Ex parte Prescott and Ex parte Deeze; and from thenceforth, as far as we can learn, it was at rest for a considerable period, till the case of French v. Fenn, which took place about thirty years ago; and the case Ex parte Deeze was then again brought forward. The Court of King's Bench gave it a good deal of consideration. The case Ex parte Ockenden was mentioned, but the Court gave credit to the case Ex parte Deeze, by adopting the doctrine laid down in that case; and the Judges, in deciding subsequent cases, always expressing their approbation of it. Supposing the doctrine to prevail, all the law of lien is, as I before stated, superseded in cases of bankruptcy, because that can never arise without the question of mutual credit arising at the same time. The doctrine has been established not only in the Court of King's Bench, but in the Court of Chancery: for in the case Ex parte Boyle, . though the Chancellor at first doubted whether he could receive the proof or not, he afterwards was of opinion that the petitioner was entitled to set off the debt due to Shepherd against the payments made after the bankruptcy. Lord Hardwicke was much struck with the justice of the doctrine, and with the hardship if it should be otherwise; it is too much to ask us to send the case to two other courts, when the counsel for the plaintiffs clearly shew they are convinced in this; and the more the doctrine is thought of, and the more they discuss and analyze every case that has been so decided, the more they feel it. Rule discharged.

1813.

OLIVE

v.

SMITH.

[ 68 ]

1813.

June 30.

An inferior of

cer in justifying under a war

ment issued by

a sheriff under a justicies needs not shew any return of the

Neither need

he shew that a

summons issued

before the distringas.

The statute 51

Geo. 3. c. 124. s. 2. regulating

process by summons and distringas does not

extend to counties palatine.

If an officer under process justify taking

TH

MOORE v. TAYLOR and DRY.

HIS was an action of trespass for breaking and entering the plaintiff's dwelling-house at Liverpool, and seizing rant of attach- and selling his goods. The defendants pleaded, 1st, the general issue. 2dly, As to breaking and entering the plaintiff's dwelling-house, and making a great noise and disturbance writorwarrant. therein, and staying and continuing making such noise and disturbance without the plaintiff's licence or consent, and against his will, for the time in the first count mentioned; and as to the breaking to pieces, damaging, and spoiling the clock and table, and seizing and taking the goods and chattels, and carrying away the same, and converting and disposing thereof to their own use; that the defendant Taylor prosecuted out of the Chancery of our Lord the King of his county palatine of Lancaster, a certain writ of our Lord the King called a justicies, directed to the then sheriff of Lancaster, by which writ the king away goods and commanded the sheriff that he should justice the plaintiff, that converting them to his own justly and without delay he might answer the defendant Taylor of 1007. as he said he could reasonably shew that thereof the plaintiff ought to answer; which writ afterwards, and before the time when, &c., to wit, on, &c. was delivered by the defendant of attaching the Taylor to Edward Greaves, Esq. then sheriff, to be executed in due form of law; and, therefore, the sheriff afterwards and before the time when, &c. on the 19th day of February made his certain warrant in writing under his hand and seal of office of sheriff, and directed the same to the defendant Dry and others therein named, bailiffs of the sheriff, and by the warrant *commanded them, and every of them, jointly and separately, that they or some of them should attach the plaintiff by his goods and chattels, so that he might appear at the then next county court which was to be holden for the county, to answer the defendant Taylor of a plea of trespass on the case to his damage of 100%., which warrant afterwards, and before the time when, &c. on the same day, &c. was delivered by the defendant Taylor to the defendant Dry, so being such bailiff, to be executed in due form of law; by virtue of which writ and warrant the defendant Dry so being such bailiff, afterwards at the

use, which is unwarrantable, but qualifies it after, by saying he took them

for the purpose

plaintiff according to the exigency of the writ, he throws it on the plain. tiff to shew the

excess in his replication. The taking an unreasonable quantity of goods under process of at

tachment does

not make the of

ficer a tres

passer ab initio.

*[ 70 ]