Litchfield v Dreyfus
| Jurisdiction | England & Wales |
| Date | 1906 |
| Court | King's Bench Division |
Money-lender - Definition - Exception - “Business not having for its primary Object the lending of Money” - Discounting Bills of Customers and Friends - Financing a Business -
The Money-lenders Act, 1900, s. 6, defines a money-lender to be “every person whose business is that of money-lending, or who …. holds himself out in any way as carrying on that business,” but excepts sub-s. (d), “any person bona fide carrying on any business not having for its primary object the lending of money, in the course of which and for the purposes whereof he lends money.”
A. carried on business as an art dealer for many years prior to 1903, and in the course of his business it was necessary and incidental thereto to give long credit and to take from his customers bills in payment of the amounts they owed to him for their purchases, and to discount and renew the bills from time to time. In 1903 he retired from the business and sold off his stock by public auction, and took bills for the greater part of the purchase-moneys, which he discounted and renewed from time to time, and some of which were still running. After his retirement he carried on business as an expert art valuer and adviser, and he also assisted two art businesses, in which he was largely interested, by discounting for them their customers' bills and by taking bills for the interest from time to time due on the debentures he held in one of those businesses. He also assisted some old friends in the curio trade, and a few persons with whom he had been connected in business, about ten in all, with loans and by discounting bills for them. He did not advertise as a money-lender, and did not discount bills for any outsiders. In an action by A. on bills given him in 1904 for a loan made by him to an old customer:—
Held, that A. was not, and never had been, a money-lender within the meaning of s. 6 of the Money-lenders Act, 1900; and that, as to the bills given on the sale of his stock and renewed and still running, he came within exception (d) in the section.
THIS was an action tried by Farwell J., sitting as an additional judge of the King's Bench Division.
The plaintiff sued on three bills of exchange. Two of them were dated June 10, 1904, for 50l. each, accepted by the defendant, and payable three months after date to the order of the plaintiff. The third bill was dated August 11, 1904, for 70l., and was accepted by the defendant and payable three months after date to the order of Nyburg & Co., art dealers, and was indorsed by them to the plaintiff in payment of a debt which they owed to him. The defendant admitted the plaintiff's claim, but by way of counter-claim and set-off alleged that the plaintiff was indebted to him in large sums — (1.) for commission on goods bought of the plaintiff by a Mr. Mainwaring on the introduction of the defendant; (2.) for commission on bills of Mr. Mainwaring discounted by the plaintiff on the introduction of the defendant; (3.) for the value or proceeds of sale of a gold snuff-box and certain other articles deposited by the defendant with the plaintiff. At the trial of the action the defendant, who was an art dealer, obtained leave to amend his defence by adding an allegation that the plaintiff was a money-lender, and, not being registered under the Money-lenders Act, 1900, could not recover on the bills. The plaintiff denied that he was a money-lender.
It appeared from the plaintiff's evidence that for many years...
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