Whitaker v Wright
| Jurisdiction | England & Wales |
| Judgment Date | 02 May 1844 |
| Date | 02 May 1844 |
| Court | High Court of Chancery |
English Reports Citation: 67 E.R. 128
HIGH COURT OF CHANCERY
S. C. 7 Jur. 320; 8 Jur. 267. See Cardell v. Hawke, 1868, L. R. 6 Eq. 466. For subsequent proceedings, see 3 Hare, 412.
[310] whitaker v. wright. Jan. 18, 27, 31, 1843. [S. C. 7 Jur. 320; 8 Jur. 267. See Cardell v. Hawke, 1868, L. E. 6 Eq. 466. For subsequent proceedings, see 3 Hare, 412.] A Court of Equity restrains a creditor from enforcing his legal rights against the estate of his deceased debtor only upon the principle that the creditor is enabled to bring into equity (with some specified exceptions) all his legal rights, and that the validity of his debt must be determined in equity upon the same principles as 2 HARE, 311. WHITAKER V. WEIGHT 129 at law; and the circumstance that the creditor is also the Plaintiff in the cause is not material as to the mode of determining the validity of such debt. In the proof of a bond debt, before the Master, it is not the practice to require an affidavit of the consideration, unless a case of suspicion against the bond is raised. Under a decree in a suit by a bond creditor on behalf of himself and the other creditors on the estate the executor may, in the Master's office, impeach the validity of the bond upon grounds which were not in issue in the cause at the hearing. A witness called by the Plaintiff, and cross-examined by the Defendant, before the hearing, on a point not then in issue in the cause, allowed to be examined again by Defendant on the same issue when raised before the Master under the decree. This was a creditor's suit, instituted, in 1838, by William Whitaker (and afterwards revived by his executors) against the personal representatives of Strethill Wright the younger, seeking payment of a debt alleged to be due on a bond, dated the 10th of February 1817, whereby P. W. Dumville, therein described as the principal debtor, and S. Wright and the said Strethill Wright the younger became jointly and severally bound to the said William Whitaker in the sum of £1800, with a condition making void the same on payment to him of £900 and lawful interest on the 10th of November then next. The bill stated that, after deducting certain dividends on the debt received under the bank-[311]-ruptcies of Wright the elder and Dumville, the sum of £835 still remained due on the bond. The Defendants, by their answer, not admitting the debt, the Plaintiffs examined J. Eoscoe, the attesting witness, and proved the bond. The Defendants exhibited cross-interrogatories, and examined J. Roscoe as to the consideration for the bond. Dec. 14, 1841. At the hearing the Defendants insisted that the effect of the evidence was to shew that the transaction had been usurious, and that a part of the alleged consideration had been returned to Whitaker by way of bonus. The Plaintiffs contended that, no issue on this Jpoint having been raised on the pleadings, the evidence directed to it could not be taken into consideration, and that any payment to Whitaker was at the utmost nothing more than an item in the account of the debt which 'was to be taken: Walker v. Woodward (1 Russ. 107). The evidence was entered as read,(l) and the common decree in the suit of a specialty creditor was made. The Master by his report stated the charge carried in by the Plaintiffs of the sum alleged to be due for principal and interest on the bond, and also the contents of the bond, and that a state of facts and countercharge had been laid before him by the Defendants, wherein it was alleged that no good or sufficient consideration passed between the parties for giving such bond, but that such bond was made and executed to cover an usurious transaction between William Whitaker and P. W. Dumville, and that the Plaintiffs ought to prove the consideration, and that the bond is in fact [312] void under the provisions of the statutes respecting usury, and that in support of such counter state of facts and charge the deposition of the said J. Eoscoe had been produced and read; and on consideration of such charges, and of the evidences laid before him in support thereof respectively, he was of opinion that there was sufficient ground for calling on the Plaintiffs to prove the consideration of the bond, and he accordingly requested them so to do; and, the Plaintiffs having declined so to do, he had not thought fit to allow the charge so brought in by them as a debt against the estate of Strethill Wright the younger until the consideration of such bond should have been so proved as aforesaid, and, no other debt having been claimed before him in consequence of the advertisement, he had not thought it necessary to proceed to take the accounts directed to be taken by the said decree. The Plaintiffs excepted to the report, on the ground that they ought not to be required to prove the consideration. (1) See observations on the case of Walker v. Woodward; and on the rule as to the entering of evidence relating to the particulars of an account, 1 Hare, 245-6. V.-C. xii.-5 130 whitaker v. wright 2 hake, sis. Mr. Romilly and Mr. Follett, for the Plaintiffs, cited Ewndell v. Lord Rivers (1 Phillips, 88), Hill v. Montagu (2 Mau. & Sel. 377), Nichols v. Lee (3 Anstr. 940). . Mr. Temple and Mr. Elmsley, for the representatives of the obligor, mentioned Owens v. Dickenson (Or. & Ph. 48), Ferrall v. Shaen (1 Wms. Saund. 294). the vice-chancellor [Sir James Wigram]. The bill is filed by a Plaintiff claiming to be a bond [313] creditor on behalf of all the creditors of the obligor. No issue, impeaching the bond on the ground of usury, or any other ground which has ; been since the subject of contest, was tendered by the answer of the representatives of the obligor; but, in the cross-examination of the attesting witness to the bond, some evidence was given by him, which the Master has since thought raised a suspicion against its validity. The decree made was nothing more than that which is usual in a creditor's suit; and the evidence, therefore, having no effect on the decree, the formal admission of it was not objected to on the part of the Plaintiff, and it was accordingly received. The cause, when in the Master's office, assumed a different aspect; for the Defendants, representing the debtor doing that which it is not disputed in this case they had a right to do, have endeavoured to shew that the bond was founded upon an usurious contract or consideration; and have, by their state of facts, raised a question in the office, which was not raised on the pleadings before the Court. The Defendants gave in evidence the cross-examination, which had been previously read in the cause, but which could not then be noticed, inasmuch as it did not apply to any question in issue on the pleadings. The Master has not reported either for or against the bond; he has only refused to allow the debt against the estate until the consideration should be proved; and, in this state, the case comes before me. Two points were suggested in argument before me-one was as to the effect of the decree; the other as to what was the duty of the Master in the investigation of the case, as distinct from the question of the form of the decree. With respect to the form of a decree in a creditors' suit the Court does not treat the decree as conclusive [314] proof of the debt. It is clear that it is not so treated for all purposes, for any other creditor may challenge the debt, Owens v. Dickenson (1 Cr. & Ph. 48); and it is equally clear that, in practice, the executor himself is allowed to impeach it. If, in a case where the Plaintiff^sues on behalf of himself and all the other creditors, and the Defendants, who represent the estate, do not admit assets (see Woodgate v. Field, ante, p. 211), it is objected, at the hearing, that the debt is not well proved, the Court tries the question only whether there is sufficient proof upon which to found a decree; and, however clearly the debt may be proved in the cause, the decree decides nothing more than that the debt is sufficiently proved to entitle the Plaintiff to go in to the Master's office; and a new case may be made in the Master's office, and a new evidence may be there tendered. The real question is, in what way the new case is to be tried, or what is the course to be pursued in the Master's office 1 The Plaintiff says that the course should be the same as at law, and that he brings his legal rights with him into equity; and, subject to some qualification, I cannot refuse my assent to the Plaintiff's proposition. When a decree is made in a creditor's suit, under which all the creditors may come in, this Court will not permit the estate to be embarrassed by proceedings which might conflict with each other, to the prejudice of the executor or administrator, Perry v. Phelips (10 Ves. 34); but nothing would be more unjust than that the Court should restrain the creditor from proceeding to enforce his rights at law, except upon the principle of allowing him to bring his legal rights with him into the office of the Court, which it substitutes for the proceedings at law, Dornford v. Dornford (12 Ves. 127); Eemngton v. Evans (1 You. 276); and the circumstance that the creditor is also the Plaintiff in the suit in equity [315] makes no difference in that respect. The only qualifications which now occur to me of the general rule that a legal creditor brings all his legal rights with him are founded, first, upon the circumstance that, in certain special cases, a Court of Equity, in the ordinary course of administering assets, will distinguish a voluntary bond from one given for value, Lady Cox's case (3 P. Wms. 339); Jones v. Powell (Eq. Cas. Abr. 84, pi. 2); GUlham v. Locke (9 Ves. 612); Assignees of Gardiner v. Shannon (2 Sch. & Lef. 228); and, secondly, that, in all cases, this Court requires an affidavit of the truth of the debt from the creditor, which at law is not required. This affidavit is 2.HAKE.316. WHITAKER V. WJBIGHT 131 required to...
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