LAW REPORT.

Evening Star, Issue 3306, 24 September 1873, Page 2

LAW REPORT.

SUPREME COURT.- IN BANCO.

Wednesday, September 24. (Before his Honor Mr Justice Chapman.)

Masonic Hall Co. v. Hardwick and OTHKKS. —-His Honor delivered judgment herein, as follows: This is an action for an interlocutory injunction in the action the object of which is to set aside a sale of the property called the Masonic Hall, made by the agent of the defendant Miss Hardwick, to’ the defendant Hudson, and to restrain the parties from completing the said sale. The facts upon which the plaintiffs’ equity is founded, when stript of verbalsimplification, may be very briefly stated. Miss Hardwicke is the assignee of the original mortgagee, one Douglas, and Mr Webb acted as her agent. The interest on the mortgage had been suffered by the plaintiffs to fall into arrear, and by the terms of the deed the mortgagee had a power of sale twenty-one days after ‘default, winch period had elapsed. .As tho agent of Miss Haidwick pressed tho mortgagers, and expressed bis intention to exercise the power of sale, a meeting of the shareholders of the plaintiffs company took place on the 17th July, and, as there appeared some prospect that they might be aide to make some arrangement for* leasing the property, and so he able to satisfy the mortgagee, Webb, it is alleged (par. 10) promised not to exercise the mortgagee’s power of sal® for one month from the date of the meeting. On the l?()th of that month, however, a sale by private contract was, without any notice to or communication with the plaintiffs made to the defendant, Hudson, for the sum of 1/2,450, which sum, it is alleged (par. 15) is considerably below the value of the property. It is further alleged (par. 19) that the defendant Hudson had notice of Webb’s promise to delay the sale for one month at the time that he entered into the contract of sale. The authority of Webb to make such a promise, in his capacity of general agent to Miss Hardwick, in the management of her interests, is disputed, and the notice to Hudson, without being ci.pivssjv denied, is disputed, as being notice of an nricoipljtional promise. Moreover, it is contended that prpmise, if within the authority of Webb, was c.qiybtioual, and that the condition was rejected by the plaintiffs themselves, and further that tho promise was revoked by Webb. The three material elements, therefore, which must be considered, are : 1. Whether Webb was clothed with implied authority to make a promise to abstain him from exercising the power of sale for one month; 2. Whether an unconditional prqmisg to that effect was in fact made and renmiued -uiii'C'Vokcd at the time of sale and 3. Whether Hudson Ipjd notice thereof ? There jive some minor cqnsiibii'.vCpus which will icquire notice; but the three allegations in the declaration which I have just mentioned, constitute tlje plaintiffs’ equity upon which thpir right to relief rests. It has more than once occurred to me, in disposing of motions for an injunction, that tips Court has necessarily presented to its consideration one important feature distinct from and in addition to those by which the Courts of Equity in England gnd the Supreme Court of Victoria are influenced in like cases. Where issues of fapt are raised, those issues may bo, and usually are submitted to a jury. Hence the Court ought not to prejudge them. It is true that the determination of such issues may bo left to the judge ; but when the interlocutory motion is made, unless there be an express understanding to that effect, the Court cannot know that such issues will not have to go to a jury. The presumption is that they will. Take, for example, a case turning upon whether a defendant has or has not notice of a certain state of facts._ In England, the Court is generally in a condition to decide the question at once, and if the evidence of such notice is conclusive, the injunction issues ; whereas, if the notice be negatived in the ojnnion of the Court, the injunction is refused. But, under our practice, the Court cannot determine that issue, and notwithstanding that the opinion of tire Judge who hears the (•ption may lean move or less strongly against ‘the co/.'dn’sjveness of the evidence in support of the qiibg/Won M notice, the interim injunction ought to issue ilntil jbrt fact can be decided by a jury. It seems tq'nje', >»•<*, that where so important an element reiflaifiV mumaMe (if decision, this Court may, in llKiny Tasc-v, find itself compelled to grant' ail injunction until the heaving, where in England it would be refused. No doubt where fin! ,sr indr mis essential and notice is not averred, shq jUtat ought at once to decide against the ’jrfajntlnV the injunction, because their declaration would* bt w.d, fy want of equity. So where the evidencebibtfsit yudgo by affidavit is such as to justify a (ffiectiorf fco /jm jury to find the issue in the negative,'thineThe very gist of the action for the relief sought being stripped away, the Court should refuse the injunction at once. I refer to cases turning upon only for tlic purpose of a very simple ViM iut: IJigiblc illustration; but my observations' Avid apply equally 'to other allegations essential to this right to relief, and which’ involve an issue of fart to bo determined by the jury at a of ’the action. Still there must always appear upon the fficp qf the declaration (which answers to the bill in equity in England) sufficient ground for sustaining the injunction until the hearing or trial of the disputed issues, and that it is the function of the Court to determine. And first as to the grounds of demurrer, which have been relied on as against the plaintiffs’right to the injunction. fcuch of the grounds as attack the

alleged promise to grant the delay of one month before proceeding with the threatened sale—viz., that it was without consideration (ground 2), was not in writing (ground 5), and was not by deed (ground 6), seem to me to mistake the nature of the _ promise. It is not a contract requiring mutuality, and so is irrevocable at the will of either party ; it does not create any interest in land so as to violate the Statute of Frauds, nor does it vary the deed. It is almost a mere license, revocable at the wid of the defendant Hardwick or her agent the day after it was made whether it was revoked at all, or whether it was revoked so as to give the plaintiffs a reasonable time, may be a question hereafter, but I see nothing in the declaration to show that it was revoked so as to give effect to the fourth ground of demurrer. _ Moreover, it is not necessary that such a promise should be under seal. It does not alter the terms of the deed. The deed enables the mortgagee to exercise the power of sale at the expiration of twenty-one days after default, but does not compel its immediate exercise. The mortgagee may wait for a longer period, and if she may i wait I think she may also promise to wait, and if a verbal promise so to wait be given, though \ I think it may be revoked, it is against good conscience to proceed in violation of such promise without revocation and notice thereof. It is with matters affecting the conscience of defendants that Courts of Equity have constantly to deal. I do not think it necessary to allege express authority (ground 3), and whether it_ is implied in the general agency I shall inquire hereafter. Whether the tender was too late (ground 8) is not a ground of demurrer. The tender is sufficiently averred according to the plaintiffs’ aspect of the equity, on which they rely. Whether it was or was not too late must depend ultimately on the determination of the other features of the case, viz., the promise or authority to make it, whether it was or was not i cvoked, and whether under the circumstances the sale of the 20th July is valid, and whether Hudson had notice of the promise. As to Mrs Fenn (ground 9), she is properly made a party by reason of her interest, although she might safely have submitted to the Court, and so saved herself from costs. Except as to any costs she may incur, she is safe in either alternative. If the sale be ultimately sustained, she gets her mortgage money; if the sale be set aside, she retains the security of the mortgage. Finally, as to the notice to Hudson (ground 10), it is sufficiently averred to avoid demurrer ; as to its sufficiency, that is a matter of evidence. Those comprise all the grounds of demurrer except the first, namely that the declaration shows no equity, and that involves the whole question which I am about to examine. And first, as to Webb’s implied authority to make the promise to delay enforcing the sale for one month. Albert v. Grosvcnor Investment Co. (L.K. 3, Q.B. 123), is relied on by the learned counsel for the plaintiffs. The plaintiff Albert had given to the defendant a bill of sale, and covenanted to pay an instalment every Monday, In case of a single default the mortagees had power to take possession of the goodsjind sell them. On Monday, August 28, 18(5”), an instalment became due, and Albert s wife went to the manager of the company and asked for time until the 11th September, to which ho assented, but on the sth September he wrote to say that he should take immediate pos session, which he accordingly did on the 7th of the same month. Now if the matter had stopped here, the letter of the sth might perhaps have been treated as a revocation of the verbal promise of the 28th August; but on the 7th September Albert’s wife again went to the office, when she was told, not by the manager but by a clerk, that if she would bring L4O on the following Saturday, the 9th September, the bill of sale should he given up to her, as that sum would cover all claims. On the Saturday she went with the EIO and tendered it; but she was told bv the clerk that there was no one at the office authorised to receive it, and was also told to conic again on Monday. On Monday, the llth September—be., the day named in the original promise—she went again to the office and offered the money, which was refused. The Court held (against similar objections to those raised in this case) that parole evidence of the promise was admissible, and that, as the money wns rciwly witlnn the time specified, there was no default. The learned counsel for the defendant Hudson has attempted ingeniously, but, I think, unsuccessfully, to distinguish the cited case from the present, by suggesting that the former was a promise before default, whereas Webb’s promise was after default. As a matter of fact, this is doubtful. The letter of the sth September might have been deemed a revocation, had the question been raised. But there was a new promise on the 7(;h, which was after default, and it is not clear upon which promise the Cqurt founded its judgment. Moreover, it appears to me that a promise before default is much move open to technical’ objection than one after default. A promise to enlarge the time before default bad much more the appearance of varying the deed than made after default. There are even cases which _ might be cited against enlarging the time mentioned in a deed by parole. But when the time named in the deed has elapsed, and the mortgagee’s right to seize accrues, there is certainly no rule of law or equity to compel him to exercise his right on the very day on which it accrues. He may stay his hand, and, as I have already said, if lie can delay, why should he not have legal power to promise to do so. This view appears to me to leave such a clause in a deed just where it was. It does not vary the deed in any way, whereas a similar promise before default has at least a very‘strong appearance of varying the terms of the deed. If, therefore, the Court in the cited case sustained the promise as one binding in good conscience, although made before default, I certainly think that a similar promise made after one default, less open to technical oojectious. It waives the right to take advantage of the first default, it renders a new default necessary, and if the money be ready withjn the time, a court q f law may well say there is no default, though a court of equity yffujld prefer sayjug that the? viqlatiqn 'of q, prqluisp so iqade is against good conscience. If a court qf law cap find itself justified in giving effect to such a parole_ promise, a court qf equity ought more especially tq do so by virtue of its very salutary jurisdiction oyer the com sciences of the parties for the prevention of frapd whether actual or constructive. The cited Qasq is also authority for the proposition that such a promise may be made by an agent; for what is a manager but an agent ? Indeed, the manager is so treated in the judgment. But I am not disposed to let the ease rest on authority alone. The promise is perfectly reasonable. It is beneficial to the principal. The mortgage was at what may be now considered a high rate of interest, and if the arrears could be met it would be the mortgagee’s interest to keep the mortgages alive. Nit one could understand this better than Mr Webb. In making the promise, therefore, in the hope that the arrears might be kept down, he was acting loyally for his principals, and in furtherance of their interest, and that promise ought in good conscience to have been kept. I cannot infer, from Mr M‘Culloch’s letteraudthe conversations to which it refers, that it engrafts a condition on the original promises, or amounts to revocation. Something may have been said about paying the rates, which the secretary may have declined ; but the linking of this with the original promise to wait a month is an ingenious suggestion of counsel which does not appear to have bweu thought of by the parties at £j,ie time. Thinking, then, that Webb had ample authority, as general agent to the mortgagees, to give tiipp. that so far as appears at present it was unconditional aj)d not revoked, and that it was so understood at the time qf the meeting of the 'shareholders, it only remains for me to say that notice to Hudson is sufficiently averred to sustain the injunction until such notices have been sustained before . the payment of the purchase-money, although sodpriiy ]:? d been given, and a conveyance : executed • kill,l have been held to bo equally binding as notice before the contract. It has , also been held that notice is in time if given before the conveyance hits been executed, although the purchase-money may have been paid. ■ It appears to me, therefoic, that the case made by the declaration is very strong. It is founded : on a violated promise, which ought in good con- \ science to have been kept, and upon a disregarded notice which ought to have ‘operated as a uautipn to any prudent man against inuring any further in the purchase. ’There are two other features subordinate indeed to those I have discussed, but which strengthen the case. Inadequacy of consideration is averred. The only skilled witnesses who supply evidence estimate the value of the property far above the price for which it was sold, An admission

of Campbell is invoked to the offset that, if a sale were pressed, the proceeds would be insufficient to pay off the liabilities of the Company. But what liabilities’ He may for ought that appears have contemplated other liabilities beside those under the two mortgage deeds. Webb, in his letter to the plaintiffs’ solicitor of the 2Sth July, says, We have kept in view the desirability ( of realising such a sum as would enable the Company to pay all its other liabilities as well as those to the mortgagees, and we have in part succeeded in accomplishing that end. But that was not the true end, nor was it the proper measure of the price to be aimed at the best price the market would afford at the tune was the true end to be sought. Another suspicious feature was this. The whole correspondence of the 2Sth shows the sale to have been precipitate, Webb threatens a sale in terras implying that a sale had not taken place on the morning of that day. It is alleged that the contract had been made on the 2oth July. There may be some doubt as to this. Webbs letter threatening a sale may be true. If the sale did take place on the 26th the letter of the 28th is untruthful and unconscientious. If the letter of the 2Sth be true, then the sale of the 26th cannot be! true. Either the fact of the sale of the 26th has no existence, or the letter of the 28th was calculated and perhaps designed to blind the eyes of the plaintiffs and throw them off their guard for a few days, so as to give time for the wale of the property to be completcd, I think that these two circumstances add. considerable weight to the principal grounds upon which I think the injunction ought to be granted. Question of costs reserved. Mr Barton applied for leave to appeal, which was granted, and if the appeal was not lodged ■within seven days, defendants to have fourteen days to plead, Regina v. Burke.— Mr E. Cook moved fora rule nid to quash a conviction, which was granted.