Jose Alexandro Ferreira Brandao, - Plaintiff; George Henry Barnett and Others, - Defendants
| Jurisdiction | England & Wales |
| Judgment Date | 28 August 1846 |
| Date | 28 August 1846 |
| Court | House of Lords |
English Reports Citation: 8 E.R. 1622
House of Lords
Mews' Dig. i. 1035; vi. 601; viii. 1642; x. 129. S.C. 3 C.B. 519; 1 Man. and Gr. 908; 6 Man. and Gr. 630. Approved on point as to banker's lien, in London and Chartered Bank of Australia v. White, 1879, 4 A.C. 413; and cf. Leese v. Martin, 1873, L.R. 17 Eq. 236; Goodwin v. Robarts, 1875, L.R. 10 Ex. 346; Misa v. Currie, 1876, 1 A.C. 569; Bechuanaland Exploration Co. v. London Trading Bank (1898), 2 Q.B. 658, 673.
Banker - Exchequer Bills - Lien.
XII CLARK & FINNELLY, 787 BRANDAO V. BAENETT [1846] [787] JOSE ALEXANDRO FERREIRA BRANDAO,- Plaintiff; GEORGE HENRY BARNETT and Others,-Defendants [Feb. 25, March 3, 9, 10, Aug. 28, 1846]. [Mews' Dig. i. 1035; vi. 601; viii. 1642; x. 129. S.C. 3 C.B. 519; 1 Man. and Gr. 908; 6 Man. and Gr. 630. Approved on point as to banker's lien, in London and Chartered Bank of Australia v. White' 1879, 4 A.C. 413 ; and cf. Leese v. Martin, 1873,-L.R. 17 Eq. 236; Goodwin v. Eobarts, 1875, L.R. 10 Ex. 346; Misa v. Gurrie, 1876, 1 A.C. 569; Bechuanaland Exploration Co. v. London Trading Bank (1898), 2 Q.B. 658, 673.] Banker-Exchequer Bills-Lien. The general lien of bankers is part of the law merchant, and is to be judicially noticed, like the negotiability of bills of exchange. A banker's lien does not arise on securities deposited with him for a special purpose, as where exchequer bills are placed in his hands to get interest on them, and to get them exchanged for new bills. Such a special purpose is inconsistent with the existence of a general lien. Where a person who is in reality the agent of another, deposits exchequer bills with his own bankers, without informing them whose property these bills are, the bankers may be held entitled to consider these bills as the depositor's property, and to hold them as security for any money due to them from him, if the mode of deposit, or the circumstances attending it, give them a lien on the bills as against him. A. was the London agent of B., a Portuguese merchant, and in that character purchased exchequer bills for him, received interest on them, and at proper intervals got them exchanged for others. He acted in the same manner for several other foreign customers. A. kept an acount with C., as his banker, and at C.'s banking-house had several tin boxes, in which he deposited these exchequer bills, and of which he kept the keys. On the 1st December, 1836, A. took out of a tin box several exchequer bills, which he delivered to C., requesting C. to get the interest due'on them, and to get the exchequer bills exchanged for others. C. did so. Before A. came to take back the exchequer bills, acceptances of his beyond the amount of his cash-credit account, were presented at C.'s bank, and paid. A. afterwards became bankrupt: Held that C. had not a lien on the exchequer bills in his hands for the balance due to him on A.'s account. This was a writ of error brought upon a judgment of the Court of Exchequer Chamber, reversing upon writ of [788] error a judgment given for the plaintiff by the Court of Common Pleas, in an action of trover. The declaration was in the usual form of trover, for converting exchequer bills. The pleas were, 1st, not guilty; 2ndly, a denial of the plaintiff's property in the exchequer bills; and, 3rdly, a special plea, in which the defendants, as bankers, set up a claim, by way of lien, to retain the exchequer bills to secure the balance due to them from a firm called James Burn and Co. The exchequer bills sought to be recovered were twenty-one in number, and amounted to the sum of 10,100. The balance of James Burn and'Co., in respect of which the lien was claimed, amounted to 3211 19s. 7d. The plaintiff was a Portuguese merchant, who, up to the year 1834, resided at Rio de Janeiro, but in that year returned to Portugal, where he has since resided. The defendants are bankers in London. Edward Burn, who for many years carried on business as a merchant in London, and traded under the firm of James Burn and Co., kept an ordinary banking account with them, drawing cheques upon them, and making bills payable at their bank: and such cheques and bills were paid by the defendants out of the funds held by them on Burn's account, which was always in cash to meet them. Burn was the agent and correspondent of the plaintiff, who from time to time remitted bills of exchange and money to Burn, and employed him upon commission to 1622 BRANDAO V. BARNETT [1846] XII CLARK & FINNELLY, 789 invest the proceeds in exchequer bills. Burn was employed in the same manner by other foreign correspondents. Burn kept at his bankers, in separate tin boxes, under his own lock, the exchequer bills purchased for his different correspondents, except when it became necessary to receive the interest and exchange the bills. Upon some of those occasions Burn took the plaintiff's [789] exchequer bills from the tin box, and delivered them to the defendants, with a request that they would receive the interest and exchange the bills; and after the defendants had so done, Burn obtained the new bills from them when he next called at the banking house, which generally happened within a week or fortnight after the receipt of the bills by the defendants; and when he so obtained them, he locked them in the tin box, as before, where they remained till wanted. Prior to December 1836, Burn had sold, by express order of the plaintiff, so much of the plaintiff's exchequer bills as reduced the amount to 10,100, and on 1st December, 1836, the remaining exchequer bills of the plaintiff (to that amount) were locked up in the private tin box, as before described. The usual advertisement by the Government for the payment of the interest and exchanging the exchequer bills appeared about that time; and on or about 1st December, Burn went to the banking- house of the defendants, and took from his private tin box the last mentioned ex chequer bills, and delivered them to one of the defendants, saying, " will you have the kindness to get these bills exchanged for me? " The defendants counted the bills, repeated the number to Burn, who said, " Right; " and no further conversation passed upon the occasion. The following is the form of one of the exchequer bills : - " No. 8551. 1000. By virtue of an act, 6th and 7th Gulielm IV., Regis, for raising the sum of 14,007,950, by exchequer bills, for the service of the year 1836-7, this bill entitles , or order, to one thousand pounds, and interest after the rate of twopence halfpenny per centum per diem, payable out of the first aids or supplies to be granted in the next session of Parliament, and this bill is to be current and pass in any of the public revenues, aids, taxes, or supplies, or to the account of his Majes-[790]-ty's exchequer at the Bank of England, after the 5th day of April, 1837. Dated at the Exchequer this 19th day of December, 1836. If the blank is not filled up, this bill will be paid to bearer. These cheques must not be cut off.-J. newport." The blanks in the exchequer bills delivered out by Burn had not been filled up, and they were therefore negotiable securities, payable to bearer, and transferable by delivery. The defendants, on the 20th of the same month of December, delivered up the bills so received from Burn at the proper office, receiving the interest due upon them, which they carried, as usual, to the account of Burn, and obtained in exchange the new exchequer bills, which formed the subject of this action. The defendants had no, notice, until the failure of Burn, that the bills were not his property; nor were the names of Burn's bankers ever communicated to the-plaintiff. At the time Burn delivered the exchequer bills to the defendants, on 1st December, he was unwell, and he was unable to come to town on business, as usual, from that time until after his failure in business, which happened on the 23d day of January, 1837, and he had no communication with his bankers (the defendants) further than that in the interval he had desired his clerk to procure from the defendants the particulars of the exchequer bills received in exchange for those delivered by him to be exchanged; and the defendants furnished to the clerk a paper containing such particulars. On the morning of the 21st January, 1837, the balance of Burn's account was in his favour to the amount of 1596 11s. But in the course of that day, bills accepted by Burn, and made payable at the defendants, were presented for payment, and the defendants paid them to the amount of 4808 10s. 7d. These bills had been accepted at periods prior to the delivery of the exchequer bills to the defendants. These payments by the defendants absorbed the balance to the credit of Burn's account [791] and made him a debtor to the defendants to the amount of 3211 19s. 7d. For this amount the defendants held the plaintiff's exchequer bills, and in consequence of such detention this action was brought. 1623 XII CLAEK & FINNELLY, 792 BRANDAO V. BARNBTT [1846] At the trial of the cause before the Lord Chief Justice Tindal, at the sittings after Michaelmas Term, 1837, a verdict was found for the plaintiff, subject to the opinion of the Court of Common Pleas upon a special case, with liberty to either party to turn the case into a special verdict, which was afterwards done. In Michaelmas Term, 1840, the Court, after taking time to consider, gave judgment in favour of the plaintiff (1 Man. and G. 908; Scott N.E. 96). This judgment was afterwards reversed in the Exchequer Chamber (6 Mann, and Gr. 630). Sir T. Wilde and Mr. Montagu Smith for the plaintiff in error:-It is admitted that bankers may, as a general rule, have a lien on property deposited with them by their customer, if at the time of such deposit their customer is actually indebted to them. But that lien can only arise on such property as may come into their hands in the way of their...
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