Rodick v Gandell
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1851 |
| Date | 01 January 1851 |
| Court | High Court of Chancery |
English Reports Citation: 42 E.R. 749
BEFORE THE LORD CHANCELLOR LORD TRURO.
S. C. 19 L. J. Ch. 113; 13 Jur. 1087.
[7(3] rodick . gandell. Before the Lord Chancellor Lord Truro. May 6, June 4, 5, 6, 1851 ; July 21, 1852. [S. C. 19 L. J. Ch. 113 ; 13 Jur. 1087.] An agreement between a debtor and a creditor that the debt owing shall be paid out of a specific fund coming to the debtor, or an order given by a debtor to his creditor upon a person owing money or holding funds belonging to the giver of the order directing such person to pay such funds to the creditor, will operate as an equitable assignment of such debt or funds. A railway company was indebted to A., their engineer, who was greatly indebted to his banker : the latter having pressed for payment or security, A., by letter to the solicitors of the company, authorized them to receive the money due to him from the railway company, and requested them to pay it to the banker : the solicitors, by letter, promised the banker to pay him such money on receiving it. Held, that this did not amount to an equitable assignment of the debt. This was an appeal from the decision of the Master of the Rolls dismissing a bill iiled on behalf of the bankers of the Defendants Messrs. Gandell & Brunton. The question in the suit was, whether a letter written by these last-named gentlemen to Messrs. Pinniger & Westmacott (also Defendants in the suit), to solicitors of certain railway companies from whom money was alleged to be due to Messrs. Gandell & Brunton, authorizing them to receive such money and to pay it to the bankers, and the solicitors having by letter promised so to do, constituted, as contended by the Plaintiff, an equitable assignment to the bankers of the debt. The Master of the Rolls held that it did not, and the Plaintiff now appealed to the Lord Chancellor. The cause as heard before the Master of the Rolls will be found reported in the 750 RODICK V. GANDELL 1DB O. M. tc Q. 76C 12th Volume of Mr. Beavan's Eeports, page 325; and the judgment of the Lord Chancellor enters so fully into the facts of the case that any further preliminary statement is rendered unnecessary. Mr. R. Palmer and Mr. J. V. Prior, for the Plaintiff. They contended that the transaction in question con-[764]-stituted a valid equitable assignment, and cited and commented on Rmv v. Dawson (1 Ves. 331), Yeates v. Groves (1 Ves. jun. 280), ej-] arte fiouth (3 Swanst. 392), Lett v. Morris (4 Sim. 607), Watson v. The Duke of Wellington (1 Russ. & M. 602), Sum v. Carmlho (4 Myl. & Cr. 690). They also submitted that the assent of the solicitors, Messrs. Pinniger & Westmacott, placed rthein in the situation of a party dealing with property after notice of a charge, Jones v. Smith (1 Hare, 43); and that they could not be justified in applying the funds in any manner contrary to the claim of the bankers, Davis v. Bowsher (5 T. R. 488). They further insisted that the bankers were not bound to appropriate the sums coming into their hands from Messrs. Gandell & Brunton, subsequent to the transaction in question, in liquidation of the balance due at the time of the transaction rather than in liquidation of subsequent advances ; Kirby v. The Duke of Marlbormujh (2 M. & S. 18), Ex parte Langston (17 Ves. 227), Hmtnker v. Wigg (4 Q. B. Rep. 792). They cited also Ex parte Skinner (1 Deac. & Chitty, 403), Fitzgerald v. Stewart (2 Sim. 333), Lyde v. Mynn (1 Myl. & K. 683). [The Lord Chancellor, in the course of the argument, referred to Hunt v. Mortimer (10 B. &C. 44).] Mr. Rolt and Mr. Selwyn, for the Defendant Pinniger (Messrs. Pinniger &r Westmacott severing in their defence), and in support of the decision of the Master of the Rolls. [765] They contended that the case of equitable assignment was not established : that, having regard to the position in which Pinniger stood to his partner Westmacott, he had incurred no personal liability, Barfoot v. Goodall (3 Camp. 147), Blair v. Bromley (2 Phil. 354); and that, at all events, the Plaintiff could have only a legal demand for the monies come to the hands of the solicitors, and that there was no ground for the interference of a Court of Equity ; Foley v. Hill (1 Phil. 399), Tin--Mouth-Eastern Railway Company v. Brogden (3 Mac. & Cr. 8). They cited and commented on Wallwyn v. Coutts (3 Mer. 707), Curtis v. Auber (1 J. & W. 526), Garrard v. Lord Lauderdale (3 Sim. 1), Metcalfe v. The Archbishop oj York (6 Sim. 224), Burn \. Carmlho (4 Myl. & Cr. 690), Langton v. Hvrtrni (1 Hare, 549), Malcolm v. Scott (6 Hare, 570; 3 Mac. & G. 29). Mr. Bethell and Mr. G. M. Gifford, for the Defendant Westmacott. They submitted, first, that nothing had been done which the Court could regard in the light of an equitable assignment, in the proper sense of that term ; and, secondly, that if there was an assignment at all, it was a security for a debt due at that particular time, and that that debt had been subsequently liquidated. In reference to the assignability in equity of choses in action, and the necessity of notice in order to render such assignment complete, they cited ll-i/all v. Howies (1 Ves. 348), [766] Jones v. Gibbons (9 Ves. 407), Lowriilge v. Cooper (3 Russ. 1), Williams v. Everett (14 East, 582); and they distinguished the present case from Row v. Daivson (1 Ves. 331), and Burn v. Carmlho (4 Myl. & Cr. 690). They also referred to Copis v. Middkton (Turn. & R. 224), Ex parte Fulyean (4 Deac. 217), Walker v. Hardman (11 Bli. N. S. 229), Henniker v. Wigg (4 Q. B. Rep. 792). Mr. Follett and Mr. Kinglake appeared for the assignees of Messrs. Gandell & Brunton, who were bankrupts. Mr. R, Palmer, in reply, cited Willet v. Chambers (2 Cowp. 814), Lacy v. M'Neile (4 Dowl. & Ry. 7), Wood v. Braildick (1 Taunt. 104). July 21, 1852. The following judgment was, on the consent of the parties to take the aame, delivered out by Lord Truro subsequently to resigning the Great Seal. This bill is filed in the name of the Plaintiff, as the public officer representing a joint stock bank carrying on business at Liverpool under the firm of "The Liverpool Union Bank," and which bank was a creditor of Gandell & Brunton for an amount of about 3000. The Defendants in the original bill were Pinniger & Westmacott, against whom the relief is prayed, and Gandell & Brunton the debtors to the bank ; 1DEG.M. 60.767. RODICK V. GANDELL 751 and, by supplemental bill, Charles Turner, George Long and Charles Hutching, [767] the assignees nominated under a fiat in bankruptcy issued against Gandell & Brunton, were made Defendants. By the bill the bank prayed that it might be declared that the Liverpool Union Bank was entitled to have the full benefit of two letters set forth in the bill, and respectively dated the 2Gth and 27th December 1845, as an effectual charge by way of equitable assignment upon the debts due to Gandell & Brunton from the railway companies mentioned in the letter dated 26th December 1845, for the purpose of securing the debt due to the bank not exceeding 3000, and that Pinniger & Westmacott might be decreed to account for and pay either the sum of 3000 to the bank, or the full amount of all sums received by them, or which without their wilful neglect they might have received on account of the debts due to the said Gandell & Brunton from the railway companies to the extent of 3000. The material facts stated in the bill were, that Gandell & -Brunton, who were engineers, were indebted to the bank represented by the Plaintiff, and that, to induce the bank to forbear enforcing the payment of the debt, and also to pay other drafts, they agreed to give a charge by way of equitable assignment upon certain debts due to them from the several railway companies named in the bill; that the Defendants Pinniger & Westmacott were solicitors to the railway companies, and were employed about the settlement of the claims made by Gandell & Brunton and others against the company, and that Pinniger & Westmacott, at the request of Ganrlell & Brunton, had agreed to concur in the proposed arrangement with the bank; that Gandell & Brunton, pursuant to the suggestion made by Pinniger & Westmacott, wrote to them a letter stating; " We hereby request of you that you will pay into the bank of Messrs. Cunliffe, Brooks, & Co., for the Liverpool Union Bank, [768] all monies now due to us from the Cheltenham, Oxford and London Junction Uailway," &c. (naming the other railway companies), " and we hereby authorize you to receive such monies in our names for the purpose from the different committees : we will thank you to write to the bank, saying you will act on this letter;" that on the 27th December 1845, Pinniger & Westmacott wrote a letter addressed to the bank, and alao to Cunliffe & Co., the London correspondents of the bank, stating : " We have received from Messrs. Gandell & Brunton a letter of which we hand you a copy on the other side: as requested by that letter, we beg to say that we will, on receiving the monies due to Messrs. Gandell & Brunton from the several railways mentioned, pay them to you to their credit, and that we will effect this as early as possible ;" that the letter of Pinniger & Westmacott was handed to the bank by the clerk of Gandell & Brunton, and that, on the 29th of December, the agent of the bank wrote to Pinniger & West-nmcott, stating: " I have received your favour of the 27th instant, guaranteeing the payment of all monies received by you on account of Messrs. Gandell & Brunton into our hands: the amount due to us is under 3000, on payment of which amount your letter will be given up ;" that upon the faith of those letters the bank subsequently paid certain drafts, and that the sum of 3969, 14s. 8d. had become clue to the bank. The bill then sets forth a lengthened correspondence between the several parties ; but I do not think it necessary to detail that correspondence, because I think the question in the cause must be decided by the legal effect of the...
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