INTERPLEADER CLAIM.

Hauraki Plains Gazette, Volume XXXV, Issue 4695, 7 May 1924, Page 2

INTERPLEADER CLAIM.

INTERESTING PAEROA CASE. JUDGMENT OF MAGISTRATE. Al Monday's silting of tlie Paeroa. Magistrate s Court Mr J. H. Salmon, S.M.. gave the following written judgment in au interpleader claim, Jane Coolc v. Edmund William Turrit'., Mr J- L. Hanna appeared for plaintifi and Mr Porritt defended in person •in September 21. 11)23. Reginald Noel Llcppell, farmer, Paeroa, in consideration of Jane Coote having that day guaranteed his account with the National Bank of New Zealand, for the sum of £2OO, executed an instrument ay way of security in favour pf the -aid Jane Coote over certain stock then depasturing on the farm of tlie grantor in Mill Road, Paeroa, which wsa held by him under lease from :he trustees of Tetley’s estate. T 1 is instrument was registered in the Supreme Court office at Auckland on October 8, 1923. Tlie instrument recites ;hat the grantor is the owner of the stock therein meiitipned. It was subsequently proved in other proceedings, end is now admitted, that Winifred Margaret Heppell, the wife at the g - antor, was the true owner of some of the stock included in tlie said instrument, and that three brood sows also included therein were the property of the Tetley estate. ••At some time subsequently to tlw giving of this security the trustees in Tetley’s estate distrained for rent in respect of the farm leased by the said Reginald Noel Heppell, and in pursuance of such distress the whole of the stock mentioned in the bill of siue were seized and sold, realising something over £IOO. ••On March 8, 1924. Winifred Margaret Heppell, in an action for wrongful distress before another magistrate in this Court at Paeroa, recovered judgment against the trustees of Tetley’s estate for £66 6s, with costs amounting to £l3 19s, in respect of the cattle above referred to whien were Per own property. A counterclaim by the trustees was allowed at £ll. with costs £ll 17s. leaving a balance uue of £57 8s on Mrs Heppell’s judgment. •‘On February 18. 1924. Mr ®. W. Porritt solicitor. Paeroa, had recovered judgment against Mrs Heppell in respect of her separate estate on a claim for cash advanced and paid and for professional services rendered amounting to £25 4s 7d, with cos's £3 Is, a total of £2B 8s 7il. "On March 10. 1924, Mrs Heppell, by assignmuet under her hand duly witnessed, purported to assign to Mrs Jane Coote tlie judgment lor £66 6s obtained by her-on March 8, 1924. against the trustees of Tetley’s estate. This assignment was produced in evidence, and being unstamped was admitted upon payment of the proper amount of stamp duty and tae penalty dim thereon. "On March 12. 1924. notice of this assignment was sent by Mr J. LHanna, as solicitor for Mis Heppell, to Mr E. W. Porritt. as solicitor for tlie trustees in Tetley’s estate, by or dinary letter post. This letter was dated March JL 1924, and was posted in Paeroa at 9.30 a.m. on,March 12, 1924. "On March 12, 1924. at 12.45 p.m., Mr E. A. Porritt, solicitor, Paeroa, a partner of Mr E. W. Porritt, paid into Court the sum of £3O in respect of the judgment Winifred Margaret Heppell versus the trustees of Tetley's estate, and at the same time lodged an application for a distress warrant in form 93 against the separate estate of Mrs Heppell on the judgment E. W. Porritt versus Winifred Margaret Heppell. A distress warrant wa-J issued accordingly at 12.45 P.m. oi'. March 12, and on the same date the 'ba’liff lodged with the Clerk of tlie Court at Paeroa under section 120, sub-section b of the Magistrate s Ci. arts Act, 19U8, u notice under his hand that he had seized the sum ci £29 Os 7d under such distrees warra’i'out of the sum of £3O paid into Court as aforesaid, and requiring tlie said Clerk of the Court not to part with the said money accordingly. •In Um. afternoon of March 12 a letter was sent by Mr Porritt to Mr Hanna acknowledging the receipt -i his letter of March 11 containing the notice of the assignment, imd informing h.m tliat £3O had been paid imo Court to the credit of Mi’s Heppell in respect of the judgment against the trustees of Tetley’s estate ; that th? bailiff hail seized the sum of £29 Us 7d under winranl of distress on the judgment E. W. Porritt versus Mrs Heppell ; and that the trustees of Tecley’s estate were arranging to provide the balance due by them under the judgment. "On March 13, 1924, Mr Hanna, as solicitor for Mrs Jane Coote, filed an interp.eader claim claiming to be entitled .to the moneys paid into Court as aforesaid by virtue of the assignment Horn Mrs Heppell to Mr,s Jane Coote dated March 10, 1924. "Upcn these facts several important points arise, and I propose to deal with iPeso points in what 1 regard as the order of their importance. “Um’.er Rule 53 of the Magistrates Court the of proving that the goods or moneys seized by the bailiff on an execution are hers >s upon the pliintiff on the interpleader claim. Mrs June Coote. The plaintiff relies upon ibc assignment of March >0 above referred to. Objection i.s taken to thi- assignment that it was made for vo;notary consideration and that its effect is to defeat, hinder, or delay a creditor, and that 't is therefore void under the Statute 13 F.liz. cap 5. "I i ropose to deal first with the questun of consideration. In order to constitute this assignment a valid assign nent under the Statute there must be good consideration, and ‘good’ consideration has been deflnod by numerous authorities as Valuable’ consideration. Now, the consideration expressed in the assignment is as. follows:— “ ‘Where as Jane Coote, of Paeroa,< widow, advanced two hundred pounds (£200) to my husband, Reginald Noel Wonpoll. on the security of a bill 3fsale i.ver certain cattle certaM of which gre mine, And whereas in &

case before the Stipendiary Magistrate at Pacroa decided on March 8. 1924. i was awarded damages amounting l.c £66 and costs against .Samuel Holes. Mary Ann Tetley, George Buchanan, EdmiiLd William Porritt, John William Tetley, .and Joseph Tetley therein described for wrongful seizure ol my cattle. And whereas the said Jane Coote has a legal charge on nij said c.title or the proceeds now, therefore in consideration of the premises . .'- and at the end of the document the assignment is slated to be ‘in pa' t payment of-my liability imp t° f’’.e said Jana Conte in respect of my cattle.’ “Now there, never was any liabilii•' in law due ,by. Winifred Margaret Heppell to Jane Coote in respect of her cattle, which, as .we have seen, were wrongly included in the instrument by way of security given bv Reginald Noel Heppell. who recites that he is the owner of such cattle. Moreove.i, Mrs Heppell has recovered damages for wrongful distress upon her cattle against the landlords of her husband, who m turn were probably misled by the recital in the bill of sale above referred to •‘lt was sworn by Mr Hanna in hisixdei.ee that at the bearing of the action for wrongful distress Mrs Hcnpe'.l swore that she knew of the inclusion of her cattle in the bill of sale, and that she had always recognised her liability to Mrs Coote. He contends, therefore, that Mrs Heppell is now estopped from denying her liability to Mrs Coote and that as against Mrs Coote her cattle were properlyincluded in the bill of sale. I am asked to import this estoppel into the| assignment in order to find a consideration. “What is contended is. that because of a benefit conferred upon Mrs Heppell's husband in the past—a benefit which, of course, indirectly benefited Mrs Heppell herself— and oecause Mrs Heppell since that date has admitted this benefit and has admitted that she stood silent and permitted her stock to be wrongly described as the property of her husband and to be therefore wrongly included in the bill oi •ale given by him that these facts constitute by process of estoppel valu able consideration for the subsequent assignment of a judgment. Estoppel is only a rule of evidence, and it is usually recognised that an action cannot, be founded thereon : Low v. Boitveric (1891) 3 Cr. 82 at p 101 per Lindley L. J. and at p 105 per Bowed JJ J. This doctrine has, it is true, been disputed as a decisive test, but we may take it that it is still open to doubt whether an action can be founded oil estoppel alone. "It is possible that Mrs Heppell ma> even have promised to recompense Mrs C' otc to the extent of the £6O recovered by her iif respect of. th? v i <)ii t ful distress. Morally it is, perhaps, tne least that Mrs Heppell could Co, but even if this promise had in fact been made it is clear that theie J . no consideration" for the assignment. which, on the face of it, is l ised upon a moral obligation. The I'dliming passage from Anson is dii etly in point :— - “ ' ■• ‘A past consideration is, in effect, I-' consideration al all; that is to say, it confers no benefit on the promisor jiu! involves no detriment to the ! roniises in respect of his promise, it is some act or forbearance in time past by which a man has» benefited v.thput thereby incurring any legal Lability. If, afterwards, whether liom good feeling or interested motives, il matters not, he makes t piomisc to tlie person by whose act or foroearance he has benefited, and l'iat promise is made upon no other consideration than the past benefit, ii is gratuitous and cannot be enforced ; it is based upon motive and not u on < onsideration.’ “The following passage is from Jialsbury vol 7 P 386 par. 799: ‘A mere motive, such as the moral obligation to repay a benefit already ieiciveii. is not valuable consideration." “On the first point, therefore, 1 hold that this assignment was made grntuiwusly and upon voluntary considerat ' 11. “The next point to be considered is v. hether the effect of this assignment v. as to defeat, delay, or hinder a creditor, and whether it is therefore Void under the Statute 13 Eliz. cap 5. U.i this point it is stated in Halsbury v ! 15 pB3 par. 172 ’The question of intent to delay, hinder, or defraud a; editors is always one of fact, which qhe Court has to decide on the merits i i each particular ease, .after taking all the circumstances surrounding the in iking of the alienation into account. A i intention to defeat an expected execution by a particular judgment editor does not necessarily constii...e a fraud within the statute, but io lw valid .an alienation made with such intent must be for full value and, as b.tween the debtor and the grantee, a bona Ude transaction.’ Now, what arc the circumstance., surrounding the making of this assignment i Mrs Heppell, having tstoo 1 -i'ent and allowed her cattle to be v ongly included in the ; bill of sale by her husband to Mrs Coote, the landlords distrain for rent and s-. ize the stock on the farm and sell them, thereby defeating Mrs Coote ■; security. Mrs Heppell then brings av. action' against the landlords for wrongful distress and recovers some £66, which apparently represents the value of her particular cattle. - To the extent of those cattle, and subsequently to the extent of £66 which represents' the value of those cattle, Mrs Heppell was therefore possessed of separate estate The action for wrongful distress was commenced on December 21, 1923* the plaint being signed by Mr Hanna as solicitor for Mrs Heppell. Prior to .the hearing of that action, and while it was st'H pending, Mr Porritt, who had previously acted as solicitor for Mrs Heppell, obtained judgment against her in respect of her separate estate on February 12. 1921, for £25 4,s 7d and costs, a total of £2B 8s 7d, for cas;i advanced and professional services rendered, of which claim for £25 is no less than £l5 9s Id represents cash advances or payments made on feejr behalf. “At the date of such "last-mentioned judgment Mrs Heppell’s cattle ha.l been *o)d under distress for rent, but

she ln.il not then recovered Juugmeu: for wiongful distress- in other words, she had not converted her right io sue in respe ■ of these cuttle into tlis £6'j of separate estate. On March 8, IV >l, Mrs Heppell obtained judgment fo r 1.6 C and costs in respect of that cause of action and thereby became entitled to separate estate against which execution might issue. On March 10, 1924, Mrs Heppell executed Ups velutary assignment of the judgment to Mrs Coote.

•■Apply the principles laid down in Hulsbury above Quoted, and looking at all the surrounding Circumstances, 1 can come to one conclusion only, ami that is that this assignment was made with intent to defeat this particular creditor, and that its effect has been to delay and hinder him. 1 therefore hold that this assignment is void under the Statute.

"The third point to be considered is the question whether express notice of this assignment was given, as required by section 46 of the Property Law Act, 1908. This point is now immaterial in view of my finding that the assignment itself is void, but I propose to deal with the various points raised in case it may be desirable to take the matter further “Section 46 provides that to render anv absolute assignment in writing of this: sort effectual express notice in writing must have been given to the debtor, trustee, or other person from whom the assignor would have been entitled to receive or claim sued debt or chose in action. The. section of the Property Law Act dealing wit/) service of. notices is section 116, wh’ch provides by subsection (1) (b) that service is sufficient ‘it sent by post in a registered letter, addressed to the person to be served, by name at his aforesaid place of abode or business, and if that letter is not in due course returned through the post olt’ce undelivered,' Now, it is admitted that this letter of March 1.1 which was posted at 9.30 a.m. on March 12, wsa not registered, and the addressee defies in evidence that it was received until shortly after 1 p.m. on March 12 : that is to say, shortly after the distress warrent had been lodged and executed. Since the time of the receipt of this notice is disputed I must hold that the evidence of service oi express notice as required by the section does not disclose a sufficient compliance with the section. There is direct authority for this ruling in the case of Smith v. Corry, 11 G.L.R. 698. “The interpleader claim to title to these moneys must, of course, rely upon the assignment, but the claim contains also a statement that consent to the judgment in respect of which the warrant of distress was issued by Mr Pdrritt in the case of Pori’itt ■ vei’s'us, Mrs Heppell was given oii a condition .which was rot carried out by the plaintiff and that the plaintiff was not entitled to distrain. Then is not sufficient evidence to supbprt this statement.

"Rule 53 of the Magistrates Court Rides provides that at the hearing of an interpleader claim the case shall proceed a.s if the claimant were the plaintiff and the execution creditor the defendant. The onus being, therefore, upon the claimant to prove that the sum of money in the hands of the Clerk of the Court was her property by virtue of the assignment relied upon, and the claimant having failed to establish that claim, the interpleader claim must fail. ‘Certain other points were, however, argued during the bearing ci this claim which it may be desirable to dismiss. It was contended by Mr Hanna that this sum of money in the hands of the Clerk of the Court was trust property, and was not therefore liable to be seized in execution. Tin's contention is, I think, based upon me assumption that the assignment was valid, and it therefore becomes unnecessary to deal with the argument on this point.

"Another argument on behalf ofi the plaintiff interpleader was directed against, the validity of the distress warrant executed on March 12. The evidence showed tliat the solicitor, on the morning of March 12, having informed the bailiff that he would be issuing a distress warrant later in the morning, took a distress warrant with the names and particulars al ready filled, in but the warrant undated to a Justice of the Pea.cc and procured his signature thereto. Tn?, certificate in the margin of the warrant had not then been signed. The solicitor then proceeded to the office of the Court and lodged his application for distress warrant In form No. 90' ami the distress warrant in form No. 93 already signed by flic Justice

but undated. The cerHQcate in Che margin of the warrant was subsequenta signed by the. Ckui of the Court 'and the warrant issued to the bailin', who executed it, as we have seen, Ly giving notice to the Clerk of* Hie Court under section 120. It was contended that the warrant was irregularly issued under section 112 and Rule 46; that the Justice granting the warrant had no power to do so under the section until he bad received ,thi:> certificate from the Clerk f the Court —that is to say, until the certificate had been signed by the Clerk of the Court. “On the face of it the distress warrant was complete and in order at the time it was executed oy the bailiff, and the maxim ’Omnia praesumuntur rite esse act’ would apply. Evidence was, however, called to prove the alleged irregularity in the gra.n. of the warrant by the Justice. Section 112, subsecton (1) of the Magi strates Courts Act, 1908, provides : Tn every action where judgment has been given or an order made for the payment of any sum of money, an.l the amount thereof is not paid within forty-eight hours or at the time or times or in the manner thereby di reefed, the Magistrate or any Justice, at the request of the party prosecuting such judgment or order, and upon receiving a certificate from the Clerk of the Court or other person authorised to receive such money that the same or some part thereof remains unpaid, shall, if the time allowed for giving notice of appeal has expired, grant a warrant of distress or successive warrants of distress, under his hand directed to the bailiff )f the Court . . .’

“It is to be noticed that the certificate may be supplied by the Clerk of the Court'Or other person authorised to receive such money.. Now, ‘the other person’ entitled to receive such money (i.c. the judgment debt) is the judgment creditor, and the section evidently contemplates a safeguard for the Justice signing the warrant that one of these two persons- shall sign the certificate. Tn practice, the certificate is invariably signed by the Clerk of the Court, and the forms provide for his signature, and Rule 49 prescribes the form of the certificate. “In this case neither person had signed the certificate when the warrant was granted by the Justice, and it may be that under the section the jurisdiction of the Justice to grant such a warrant depends upon his having first received such a certificate. and that if he grants such a warrant without having first received such t: certificate the warrant is bad because it is issued without jurisdiction. On the other hand it may be tliat if he grants such a warrant without having first received such a certificate he might render himself liable, in the event of the judgment having been satisfied or partially satisfied, to an action for damages under section 182 of the Magistrates Courts Ac*, in which case he is entitled to the protection of sections 183 and 184, and Division TV. of the Justices of the Peace Act, 1908. I refer to these, provisions because the tenor of all these provisions seems to be that only the Supreme Court shall have power to quash the warrant, and it is necessary for tlie war/ant to be quashed before an action would lie. I do not propose, therefore, to decide whether this warrant was granted without jurisdiction, or whether its issue was irregular, because that is a question whicn arises only between Mrs Heppell and the execution creditor, and does not concern the present claim, which is n» interpleader claim filed by or on behalf of Mrs Coote, and the sole question is whether Mrs Coote has established her claim to these moneys. “The following passage from Cababe on Interpleader (3rd ed) p 78, makes the position clear : ‘The law deducibls from the authorities would seem lo be that in sheriff’s interpleader, if

the execution debtor be in possession of the goods at the time the sheriff seizes, the claimant ought to be the plaintiff in the issue, that the onus of proof rests upon him of .showing that

he lias a title to the goods which justifies his intervention, and that suca

onus can only be satisfied l.v proof jf f actual title in himself. Even if, howI ever, lie offers prima facie evidence of such title it will be open to the execution creditor to rebut it, by showing that the claimant has in fact no title. "In Richards v. Jenkins, 18 Q.B.D. •15t, the execution creditor was allowed to set up the title of the trustee ; in bankruptcy of 'the claimant in orI der to defeat the claim, and this alj though tlie execution creditor was estopped from denying the claimant’title (Stout and Sim's Practice, slh cdp 278). ■ 'The claim will, therefore, be dismissed, with costs, solicitor £2 2s.’