Baring v Noble; Clayton's Case
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1816 |
| Date | 01 January 1816 |
| Court | High Court of Chancery |
English Reports Citation: 35 E.R. 781
HIGH COURT OF CHANCERY
[572] clayton's Case. ^f_ , Facts of tho case. . ò'' ..''ò'/ ''/ ' /òò -ò The next class of creditors was represented by Mr. Clayton, and consisted of those ,1 who, after the death of Devaynes, continued to deal with the surviving partners both by drawing out and paying in money ; payments being made by the surviving "' partners before they received any money of tho creditors ; and the balance, varying ''//s from time to time, sometimes increased, and sometimes diminished ; but upon theX/7^ whole considerably increased by the subsequent transactions. ò' 'ò In this case also, the creditor had deposited exchequer bills with the house, which''*?-*' exchequer bills were sold in Devaynes's lifetime without tho knowledge of the creditor, t& and the produce applied to meet the exigencies of the house ; and the partioular/'Og facts of the case, as appeared upon the Master's Report, were the following :- /^^ At the death of Devaynes, Clayton had a balance of ,£171.3 on his cash account / with the banking-house. Prior to the death of Devaynes, he had deposited with /ò'ò/' the partners two exchequer bills for £500 each, without giving them, any power/.*;;, or authority to sell or dispose of the same, except as it was mutually agreed, and^,, understood between him and them., that, when the exchequer bills should be paid off, they, the partners, wore to buy with the produce, or take in exchange, other exchequer bills, to be held by them in tho same manner. Contrary to this agreement or undertaking, and without the consent or knowledge of Clayton, the partners did, in the lifetime of Devaynes (on the 19th of June 1809), sell these bills for £1.035, which produce they applied to their own use. And of this transaction Clayton had no notice until after the bankruptcy of the surviving partners. [573] Between the death of Devaynes and the bankruptcy, tho payments made to Clayton by the surviving partners exceeded the amount of the balance (£.1717) and the produce of the exchequer bills (£1035) together ; and tho payments so made amounted to tho sum of £1260, within a few days .after Devaynes's death, and before they had received any monies whatever. But their subsequent receipts largely exceeded tho sums paid ; and the balance due at the time of the bankruptcy (exclusive of tho produce of the Exchequer bills) exceeded the amount of the balance 782 DhVAYNES v. xoblk ; clayton's cask imer. 571. due at Devaynes's death. And Clayton, having, since the bankruptcy, discovered that the exchequer bills had been sold, and not replaced, provecHhe amount of the balance, together with the produce of the bills, as a debt under the commission ; and received dividends upon the same, but did not sign the certificate. The Report went on to state that Clayton, residing at Newcastle, kept his accounts with the partnership according to the custom already explained, of bankers with their country customers. On the 30th of March 1810, his account was made up and balanced by the surviving partners, and transmitted to him ; and the balance was carried forward, and the account continued to the time of the bankruptcy. In the account so rendered, the proceeds of the exchequer bills were credited so aa falsely to represent that they had been paid off by government on the 31st of October 1809, the day at which they were payable, and that a new exchequer bill for £1000 had on the same day been purchased, or taken in exchange from government, in their stead; and Clayton, being deceived by such statement, did not learn the truth of the case till after the bankruptcy, as already mentioned. [574] Under these circumstances Clayton claimed against the estate of Devaynes the sum of £1171 (as the residue of the balance of £1713, after deducting the amount of the dividends received thereon), and the sum of £971 (as the value of the exchequer bills), with interest, after deducting the amount of the dividends received in respect of the said exchequer bills. The circumstance of the notice given by Clayton and Scottt as solicitors for the Executors of Devaynes, to the surviving partners, " that the use of Devaynes's name in the firm was without their consent '' (which notice was so given without Clayton's personal knowledge), has been already detailed. Master's Report. On the subject of these claims, the Master reported his opinion to be - First, that the subsequent payments made by the surviving partners ought to bo applied to the account of the cash balance clue at the death of Devaynes ; and that Clayton had, by his subsequent dealings and transactions with the surviving partners, released the estate of Devaynes from the payment of the said cash balance, and every part thereof. Secondly, that, with respect to the value of the exchequer bills, Clayton had not, by his said dealings and transactions, released the estate of Devaynes from the payment of the value thereof, and such interest as after mentioned. Thirdly, as to the mode of estimating the value, and computing the interest, that the mode of computation adopted by the claimant (viz. by charging the actual amount of the proceeds on the 19th of June 1809, and calculating interest on that amount from that time), was erroneous, because, if the exchequer bills had not been sold, but kept and disposed of according to the agreement, the same, both principal and interest, would have been received on the 31st of October 1809, and [575] the principal only invested in new exchequer bills bearing the same rate of interest, which was accordingly represented (as aforesaid), to have been actually done ; and the Master was consequently of opinion, that Devaynes's estate should be charged with interest, at the rate of £5 per cent., only from the said 31st of October 1809, in addition to the principal sum ; and, having computed the same accordingly, found the sum of £885 to be the amount of such principal and interest, for which the estate of Devaynes still remained liable in respect of the said exchequer bills. Exceptions. To different branches of this report each of the parties took exceptions ; Clayton contending that, with respect to the cash balances, the estate ought merely to be discharged to the extent of any such balance a-s was paid to his use, after giving him credit for the sums paid in, and deducting the amount of ;thc drafts drawn by him, after the Testator's death; and, as to the interest oruthc exchequer bills, that the same ought to be allowed from the time when they were sold, and not only from the time when they would have been paid off by government ; while the representatives of Devaynes disputed the claim to the exchequer bills altogether. In the argument, it was thought most convenient to proceed, hi the first place, upon the last of these exceptions. Third Exception. July 18-22, 23. Hart, Wetlicrell, and Sidebottom, Martin and JIazlevsood, and Abercromby, for different parties in support of the exception. The deposit of exchequer bills with a banker stands cm a totally different footing from the deposit of money ; for the former is a mere naked bailment, unaccompanied [5761 with any advantage arising from the use of the thing deposited. The selling USER. 577. MVAYNES V. NOBLK ; CLAYTON'S CAS.K 783 of these exchequer bills, before they became cash in the common course of payment, cannot in this Court be stated as any thing more than a breach of trust ; for this Court is not competent to judge of questions of criminal jurisdiction. This constitutes the amount of the exchequer bills so sold a simple contract debt from the partnership to Clayton, and nothing further. This being the state of the transaction at the death, of Devaynes, the first step taken by Clayton, be being at that time ignorant of the sale of the exchequer bills, is to give notice to the surviving partners, as solicitor for Devaynes's representatives, not to continue Devaynes's name in their firm ; for this act, although really the act of his partner in the name of the partnership, is binding upon himself as a partner. Alder son v. Pope (1 Campb. 404:). The inference to bo drawn from it is, that they consider the estate of the deceased as not to be resorted to ; but that the house ought to be continued as the sole debtors. After giving this notice, whereby he has evidenced his intention that the acts of the surviving partners shall not be construed to affect the estate of the deceased, he continues his dealings with those surviving partners. He then, receives from them an account whereby it is represented to him that the bills have boon disposed of in the regular course, and new bills taken in exchange or purchased with the proceeds ; and he adopts this account, and the representation contained in it, without further inquiry ; so far releasing Devayne's estate by such adoption ; because it is owing to his own laches that that estate is now sought to be charged with the amount of the proceeds. If it should bo said that, when Mr. Clayton adopted. [577] the surviving partners as debtors, he did not mean so to adopt them as to the exchequer bills, which he supposed to remain in specie ; yet if, when he is subsequently told that they no longer remain in specie, having been sold in the regular course of business at a period later than the death of the deceased partner (even though that be a false representation as to the time and circumstances of the sale), and, if being so told, he acquiesces in the account rendered, and consents to the surviving partners continuing in possession of the proceeds of those exchequer bills, whether in the form of cash, or of new exchequer bills, how can it be pretended that, in. so acquiescing, he retains any hold over the estate of Devaynes, which he has himself previously declared to be wholly unconnected with the partnership as to all subsequent dealings 1 | It was also contended, that the sale of the exchequer bills appeared...
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