Richard White, Francis Jenks Burlton, Vincent Wheeler, and James Eysam Graham, - Appellants; Job Walker Baugh and Thomas Beale, - Respondents
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1835 |
| Date | 01 January 1835 |
| Court | High Court of Chancery |
English Reports Citation: 5 E.R. 1261
COURT OF CHANCERY.
Mews' Dig. xii. 84; xiv. 800. S.C. 3 C1. & F. 44; and, in Ch., sub nom. Salway v. Salway, 2 Russ. & M., 215; 4 Russ. 60. See also Trustee Act, 1893, s. 17.
[181] ENGLAND. COURT OF CHANCERY. eichard white, fkancis jenks burlton, vincent wheeler, and james eysam graham,-Appellants; job walker baugh and thomas beale, -Respondents [1835]. fMews' Dig. xii. 84 ; xiv. 800. S.C. 3 01. & F. 44; and, in Oh., sub nom. Salway v. Salway, 2 Russ. & M., 215; 4 Russ. 60. See also Trustee Act, 1893, s. 17.] A receiver in order to obtain sureties, enters into an agreement with them, that A. the partner of one of the sureties, shall attend upon the receipt of the rents of the estates, and that they shall be paid into a bank at L., in the name of the sureties ; and that all monies to be applied for the purposes of the receivership, shall be drawn for by checks prepared and written by A. and signed by the receiver. This agreement having been acted upon, the bank at L. failed, and a loss was sustained. The account was then transferred to another bank, under the same agreement, when another loss ensued by failure of the bankers. Held, upon petition, that the receiver was responsible for the amount of losses, etc. In the month of August, 1820, the Appellant Richard White was proposed and was subsequently appointed to be receiver of the estates of John Salwey, Esquire, deceased, in a cause wherein John Salwey was Plaintiff, and Elizabeth Salwey, and others, were Defendants. Upon his appointment he was required to find two sureties, and the Appellant Francis Jenks Burlton and William Adams (since deceased), who was represented by his executors, the Appellants Vincent Wheeler and James Eysam Graham, agreed to become and be-[182]-came such sureties, and entered into a recognizance, dated the 10th of November, 1821, in the penal sum of £8000 in the usual form. The sureties for the receiver, as the condition upon which they consented to become sureties, stipulated with the receiver that the monies which he should receive in his character of receiver should be lodged in some bank, in the names of the sureties, and that all monies to be applied for the purposes of the receivership should be drawn for by checks prepared and written by George Anderson, a solicitor in partnership with William Adams and that the checks so drawn should be signed by the receiver Richard White, and expressed to be " on account of the trustees of the late John " Salwey, Esquire," and they further required that Anderson be at liberty to attend with the receiver on the rent days to receive the amount of rents, which it was stipulated should be afterwards paid into the account to be kept with the bankers. These stipulations were acceded to by the receiver, and an account was accordingly opened 1261 IX BLIGH N. S. WHITE V. BAUGH [1835] in the names of the said sureties with the firm of Giles, Edward, and James Prodgers, bankers of Ludlow, and which firm afterwards became Edward Prodgers and Co. There were some incumbrances affecting the said testator's estates which bore interest, and the bankers had a general authority to pay such interest to the parties entitled to it without drafts being drawn for the same ; but with that exception the bankers had no authority to pay any money on account of the receivership, except the same were drawn for by drafts signed by the receiver, Richard White, and expressed to be " on account of the trustees of the late John Salwey, Esquire," [183] and they never did pay except on drafts in that form. All monies received on account of the receivership were paid into the bank of Messrs. Prodgers until they became bankrupts, at which tinle there was a balance of £1464 2s. 2d. in their hands on account of the said receivership. The said sum of £1464 2s. 2d. was proved under the commission as a debt due to Richard White as such receiver, upon the joint affidavit of himself and his sureties. Soon after the failure of Messrs. Prodgers an account was opened with Messrs. Coleman, Morris, and Sons, of Leominster, in the names of the sureties, and the same arrangements as to the payments of interest and honouring the drafts of the said Richard White the receiver, were made as had existed during the time the account was kept with Messrs. Prodgers. An account was also opened by the Appellant Richard White with the firm of Coleman and Wellings of Ludlow, bankers, but this was not opened in the names of the sureties; it was headed " An account between the firm and the trustees of " the late John Salwey, Esquire," and no such arrangement was made between the receiver and his sureties with respect to the monies placed in this bank as had been made with respect to the monies placed in the other two banks, nor was any arrangement at all made between them as to such monies placed with Coleman and Wellings of Ludlow ; but the receiver paid into and dr%w from this bank at his own discretion, and without any authority from the sureties or either of them to the firm for that purpose. Both these banks failed in the month of March, 1826, when the balance of [184] receipts up to Midsummer, 1824, in the bank of Coleman, Morris, and Sons, at the time of their failure, was £1120 5s. 5jd., and that with Messrs. Coleman and Wellings was £259 2s. 8d. This sum of £1120 5s. 5|d. was proved under the commission against Coleman, Morris, and Sons, in the name of the Appellant Francis Jenks Burlton; and the other sum of £259 2s. 8d. was proved under the commission against Coleman and Wellings by the Appellant Richard White. The whole amount of balances of receipts to Midsummer, 1824, in the hands of the three banking houses, was £2843 10s. 3|d. Under the order by which Richard White was appointed receiver he was directed to pay his balances from time to time into the bank of England in the name of the accountant-general of the court of chancery to the credit of the cause; but on the 6th of August, 1824, an order was pronounced on petition whereby Richard White the receiver was directed to pay to Richard Salwey, who was entitled to the rents and profits of the estates for his life, the sum of £617 17s. 7d. being the balance reported due from him on the passing his accounts to Midsummer, 1822, and whereby the receiver was also directed to pay the future balances upon his subsequent accounts up to Midsummer, 1824, as the same should from time to time be reported due from him by the master as such receiver unto the said Richard Salwey. On the 20th of July, 1824, the sum of £617 17s. 7d., which was the actual balance reported due from the receiver to Midsummer, 1822, together with £164 19s. Od. due for costs was by a draft transmitted to Mr. George Henry Dansey, the London [185] agent of Messrs. Adams and Anderson, with the following letter addressed to him :- " Dear Sir, " Re Trustees of John Salwey, Esq. " We send you enclosed a draft for £782 16s. 7d. being the balance of Mr. White's " account as receiver, up to Midsummer, 1822 ; you will as before pay £617 17s. 7d. " part thereof into court to the credit of the receiver, and £164 19s. Od. residue to " Messrs. Still, Strong, and Rackham. Be so good as to acknowledge the receipt, " and send us the vouchers as soon as you have procured the same." Mr. Dansey on the 22d of July, following, paid the sum of £164 19s. Od. as directed by the letter, and at the same time requested Messrs. Still, Strong, and Rackham 1262 WHITE V. BAUGH [1835] IX BLIGH N. S. who were the solicitors for the trustees of the estates, to give him directions as to the paying into court the said sum of £617 17s. 7d. Mr. Dansey was informed by Messrs. Still, Strong, and Rackham, that the agents of Mr. Salwey had requested that the said sum of £617 17s. 7d. should nof be paid into court, but should be paid to Mr. Salwey, and that a petition for that purpose was about to be presented, and they requested him to hold the money, as they had no directions for paying the same into court. This was communicated to Messrs. Adams and Anderson, who repeated their directions to Mr. Dansey for payment into court of the said sum of £617 17s. 7d. Mr. Dansey again called on Messrs. Still, Strong, and Eackham, when they informed him that an order had been pronounced for payment of the money to Mr. Richard Salwey, and that they would send the order to Mr. Dansey [186] with a receipt from Mr. Salwey for the sum of £617 17s. 7d. Neither this order nor the receipt was ever sent to Mr. Dansey, and in April, 1825, he paid the sum of £617 17s. 7d. to the account of Messrs. Adams and Burlton, with Messrs. Coleman, Morris, and Sons, of Leominster. Richard Salwey died in February, 1825, and his will was proved by the Respondents, two of the executors thereby appointed. William Adams died, having by his will appointed the Appellants Wheeler and Graham his executors. Neither the receiver nor his sureties knew of this order until, after the death of Mr. Richard Salwey, which happened on the 5th of February, 1825, and it does not appear that the order was in fact drawn up in his life-time. The will of Richard Salwey was not proved until the month of February, 1827, and no order was obtained for payment to his representatives or to any other person of the monies directed by the order of the 6th of August, 1824, to be paid to him. On the 26th of July, 1827, the Respondents Job Walker Baugh and Thomas Beale, as the executors of Richard Salwey deceased, presented their petition to the Master of the Rolls, Sir John Leach, stating the principal facts before mentioned, and praying-" That it might be referred to the master (Mr. Cross) to compute " interest on the said sum of £2843 10s. 3|d. from the time when the same ought " to have been paid by the said Richard White, and that the...
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