Davies v Stainbank
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1854 |
| Date | 01 January 1854 |
| Court | High Court of Chancery |
English Reports Citation: 43 E.R. 1397
BEFORE THE LORDS JUSTICES.
See Oriental Financial Corporation v. Overend, Gurney & Company, 1871, L. R. 7 Ch. 145, n.; Duncan, Fox & Company v. North and South Wales Bank, 1880, 6 App. Cas. 12; House v. Bradford Banking Company [1894], 2 Ch. 57.
[679] DAVtES v. stainbank. Before the Lords Justices. Dec. 12, 13, 14, 20, 1854 ; Jan. 30, 1855. [See Oriental Financial Corporation v. Oeennd, Gwney £ Company, 1871, L. E. 7 Ch. 145, n. ; Duncan, Fox & Company v. North and South (Fates Bank, 1880, 6 App. Cas. 12 ; House v. Bradfonl Banking Company [1894], 2 Ch. 57.] Indorsees of bills of exchange as a security for a floating balance due on the accounts between them and the drawer had notice that the acceptor was a surety for the drawer. They afterwards entered into an agreement with the latter that the existing debt should be liquidated by the drawer building for them certain ships, and should, in the meantime, be secured by a policy of assurance. Held, 1. That time was thus given to the principal debtor, and that the surety was released in equity, if not at law also. 2. That a creditor who holds a floating guarantee from a surety cannot, without the surety's consent, give time to the principal debtor as to a portion of the debt, without reserving the creditor's rights against the surety, and yet hold the surety liable for that portion. 3. That whether the acceptor could or could not use, by way of defence to an action by the holders of the bills, the giving of time by them to the drawer, he was not bound to do so, but might (at the risk of costs) defend the action on other grounds, and also institute a suit for equitable relief and an injunction to restrain the pro ceedings at law, though if the matter had been pleaded at law, and the Court of law had adjudicated on the plea, the case might have been different. This was an appeal from an order of Vice-Chancellor Kindersley restraining proceedings at law on two bills of exchange. By arrangement the cause came on to be heard at the same time. The bills in question were for £1000 each, and were dated the 3d of September 1846, drawn by Benjamin Davies, one of the Defendants, upon his uncle, Daniel Davies the Plaintiff, in favour of and made payable to Christopher Stainbank and 1398 DAVIES I'. STAINBANK DE 0. M. & 0. 680. Richard Henry Stainbank, two other Defendants. One of them was payable in 1847, the other in 1848. It appeared upon the result of the evidence, that as between the Plaintiff and Benjamin Davies the Plaintiff was a surety merely. In August 1850 the bills remained unpaid in the hands of the Stainbanks, and had been placed by them to the debit of Benjamin Davies, and formed part of a large balance due from Benjamin Davies to them. The bills were left in the hands of Messrs. Stainbank as a guarantee for the floating balance from time to time due from [680] Benjamin Davies to them to the extent of £2000. At and previously to that time the Stainbanks were aware that the Plaintiff claimed to stand in the position of surety merely on the bills. In September 1850 Daniel Davies the younger, a brother of Benjamim Davies, came over to England from Prince Edward's Island, for the purpose of coming to a settlement on behalf of his brother with the Messrs. Stainbank. After some communications had taken place between Daniel Davies the younger and the Defendant R. H. Stainbank, the acting partner of the firm of Stainbank & Son, the following memorandum was drawn up :- " Memorandum of the understanding between Mr. Daniel Davies of Charlotte Town, Prince Edward's Island, on behalf of his brother Mr. Benjamin Davies of the same place, and Messrs. C. Stainbank & Son of London. The balance due from Mr. Benjamin Davies to C. Stainbank & Son being now agreed at £8047, 3s. 10d., it is agreed that the four vessels that have been already dispatched from the island this season, viz. schooner Kestrel, bark Essex, schooner Minna, and brig not yet named, together with their freights and cargoes, to be realized as soon as practicable after their discharge in England, and the produce, less the charge and commission, to be placed to the credit of Benjamin Davies, in part payment of the above balance of £8047, 3s. 10d., arid which it is estimated will altogether produce about £4900, leaving a balance then due or a presumed balance to C. Stainbank & Son of about £3147 or more, if Benjamin Davies has occasion to draw any further small sums of Messrs. Stainbank & Son. " It is agreed between C. Stainbank & Son and Ben-[681]-jamin Davies that when the before-mentioned balance (now estimated at £3147) can be correctly ascertained, the present running account with Benjamin Davies shall be closed for liquidation. "That the first step towards the liquidation shall be the building and completion of a ship of 400 tons register by Benjamin Davies (he having on hand the greater part of the materials ready for the purpose), to be called the 'Charlotte,' which vessel is to be ready for launching the early part of the ensuing season, say before the 5th of August 1851. "To enable Benjamin Davies to complete the said vessel for sea, C. Stainbank & Son engage next year to supply stores and to accept Benjamin Davies's drafts for provisions, &c., to the extent of £500 altogether or more, if they think proper; which stores on being shipped and bills on being accepted are to be placed to the debit of an account to be specifically opened for Benjamin Davies as an account for advances and for the ship ' Charlotte ;' and any stores ordered by Mr. Benjamin Davies shall be ordered distinctly for this account, and any drafts drawn shall state on them to be placed to the bill account, namely, advances for the ship 'Charlotte.' " If it should hereafter be determined to build a larger ship than 400 tons the advances to be increased in proportion, and if cargo is shipped on the ship's accounts C. Stainbank & Son to advance the invoice cost thereof. "That the 'Charlotte' shall be dispatched as soon as she can be rigged and loaded for London, where, as soon as practicable after her arrival, the vessel shall be sold and the proceeds, together with freight or cargo, less all charges and commission, shall then be placed to the [682] credit of Benjamin Davies in liquidation of the before-mentioned balance. "That the further discharge of the said balance shall proceed annually, either in like manner or by remittance to the extent of £300 per annum. It is further understood that Mr. Benjamin Davies shall, without delay, effect an insurance on his life for £1500, and pay the annual premium thereon, the policy of which is to remain with C. Stainbank & Son till the balance be paid in full, after which it is to become the property of Benjamin Davies or his assigns." 6DEa.M,*Q.S3. DAVIES V. STAINBANK 1399 This agreement was not signed; but upon the evidence it appeared to have been adopted by Benjamin Davies and acted on by him and the Stainbanks. In 1852, Messrs. Stainbank commenced an action against the Plaintiff Mr. Daniel Davies, senior, on the bills. He defended it, pleading in effect that, by means of transactions between Benjamin Davies and...
To continue reading
Request your trial
- Coles Myer Finance Ltd v Federal Commissioner of Taxation
-
Evans v Bremridge
...& B. 277)|; Farebrother v. Wekhman (3 Drew. 122); Protherov. Phtlps (7 De G. M. & G. 722 ; 16 C. B. 370. See also Davies v. Stainbank, 6 De G. M. & G. 679); Carron Iron Company v. Maclaren (5 H. of L. Ca. 416). Upon the merits it does not appear whether in Sice v. Gordon (11 Beav. 265), the......
-
Maingay v Lewis
...and LEWIS. Hollier v. EyreENR 9 Cl. & Fin. 45, per Lord Cottenham. Oakeley v. PashellerENR 10 Bligh, N. S. 548. Davies v. StainbankENR 6 De G. M. & G. 679. Combe v. WoolfENR 8 Bing. 161. Howell v. JonesENR 1 Cr. M. & R. 97. Rees v. Berington 2 Ves. 539. Boultbe v. Stubbs 18 Ves. 20. Thompso......
-
Oakford v European and American Steam Shipping Company
...C. 269), Bmar v. M'Donald (3 H. L. Cas. 226, 239), General Steam Navigation Company v. Roll (6 C. B. (N. S.) 550), Dames v. Stainbank (6 De G. M. & G. 679), Small v. Cm-tie (5 De G. M. & G. 141), Pooley v. Harradine (7 Ell. & B. 431). Mr. Daniel, Q.C., and Mr. Cotton, for the Defendants. Th......