SUPREME COURT.

New Zealand Spectator and Cook's Strait Guardian, Volume VIII, Issue 659, 26 November 1851, Page 3

SUPREME COURT.

Monday, 10th November, 1851. Ferris v. The Canterbury Association. Mr. Hart applied for a rule for an injunction to restrain the Canterbury Association from proceeding further (by suing out distress or otherwise) in a certain cause heard before two justices sitting for the Resident Magistrate, in the Resident Magistrate’s Court at Lyttelton, wherein the complainant was defendant, and the said Association plaintiff. Mr. Hart, in support of the motion, read an affidavit of the ’complainant, on which be grounded his application. It appeared that, on the 2nd July, the Canterbury Association advertised certain lands for sale, comprising, among others, a certain town section of a quarter of an acre, in the port town of Lyttelton. By their regulations they require any intending buyer who desires a particular lot to be put up, to pay to the “deposit account” of the Assjcialion with the Union Bank the upset price of £l2 per section. Mr. Ferris accordingly paid in this sum. At the sale, the section or allotment was knocked

down to Mr. Ferris for the sum of £3O. Before completing the purchase, Mr. Ferris demanded < f the Association “an abstract of their title,” which was refused him, and in lieu thereof a copy of the Act of Parliament 13 and 14 Vic., c. 70, “empowering the Canterbury Association to dispose of certain lands in New Zealand,” together with a copy of the Charter of the Association, was handed to his solicitor, Mr. Dampier. A deed of conveyance was then prepared by Mr. Dampier, framed on the assumption that a purchaser from the Association, lor his own security, is bound to see that one (at leas'.) of the “conditions” in the Act of Parliament (namely, that one-sixth of the purchase-money has been paid to Her Majesty) has been fulfilled by the Association ; the deed witnessing, that “ out of which said sum of thirty pounds the said Association have paid to or for the use of Her Majesty, the sum of five pounds, being one-sixth part of such purchase money, as by the said Act of Parliament required, and as appears by the receipt of the Colonial Treasurer of the said Province, or other proper officer appointed by the Secretary of State for that purpose hereupon indorsed,” &c.

This deed the Agent of the Canterbury Association refused to execute, on the ground “ that it contains mattpr which he has repeatedly declared to be, in his opinion, such as he is not bound or empowered to admit.” The Agent of the Canterbury Association then brought an action in the Resident Magistrate’s Court against Mr. Ferris, for the balance of the purchase money, £lB, and obtained an adjudication in his favour ; and it is to restrain the Association from farther prosecuting that judgment to execution that this application is now made. First, Mr. Hart urges that the Court has exceeded or mistaken its jurisdiction, inasmuch as the sum of £l2 cannot be deemed a deposit, because there was no contract or agreement for the sale of any land at the time the money was paid. It is therefore rather a stake than a deposit. Hence the sum in dispute was the whole purchase money, or £3O, which is beyond the jurisdiction of the Resident Magistrate’s Court.

Mr. Justice Chapman. — On this single point as to jurisdiction, I conceive the complainant has no case. The sum of £l2 was paid avowedly to the “ deposit account” of the Association with the Union Bank ; subject, no doubt, to be returned in the event of no purchase being made. It was not paid to the Bank, or to any officer of the Bank, as a stake holder. But assuming that it was in the nature of a stake in the first instance, and that the Bank held it—not to the credit of the Association—but as a stake holder, it clearly became a deposit at the fall of the hammer, and the Association is entitled to treat it as part of the purchase money; hence the balance was the proper sum to sue for, and was within the jurisdiction of the Resident Magistrate’s Court. Mr. Hart continued—-The difference between Mr. Ferris and the Canterbury Association, and the point on which we desire to take the decision of the Court arises upon the peculiar wording of that portion of the Act of Parliament empowering the Canterbury Association to dispose of land. It appears by the 2nd section, that the Association is empowered to convey land, “subject to the conditions following ;” then follow six “conditions;” and that to which attention is desired, is the fifth, which is in these words:—“That one-sixth pari of the produce of such sales * * be paid bv the Association tn Her UoJdn k-- , » ---j-w.j, ..v. heirs and successors, such payment to be made at such times, and to such persons, as one of Her Majesty’s Principal Secretaries of State shall, by writing under bis hand, determine * * and the receipt of any one of Her Majesty’s Principal Secretaries of State shall be a complete discharge to the Association for the moneys paid to him.” This gives io the Association, at most, but a conditional fee, or power to convey a conditional fee; in which case, the purchaser is not safe unless he receive some assurance that the condition has been fulfilled. The other conditions, though operating on the Association, do not seem to be such as to affect the estate of the purchaser. The emigration fund, for instance, is properly retained by the Association, because they are the trustees for its expenditure—the purchaser pays his money, and so far as he is concerned, the “condition” is fulfilled—the proper expenditure of the funds is not the condition. The same remark applies to all the conditions except the fifth ; but that condition is entirely different to all others —it is a payment to the Crown, on which the whole power to convey depends, and the purchaser has a clear right to be assured that the “ condition” has been fulfilled. The conveyance tendered had no other object than the purchaser's security. There is another very serious difficulty;— the Association may have forfeited its charter in any one of the ways mentioned in the Act, or its power to convey may have been deter-

mined, and may not exist at t’>is very moment, so that its agents and attorneys may be executing grants long alter their power to do so has ceased.

It may be urged that the Bth clause of the Act relating to the lands of the Canterbury Association, discharges purchasers from the necessity of enquiring as to the fulfilment of any of the said conditions, or the regularity of any sale made by the Association ; aud this is the question which, to solve all doubts, it is the object of the present application to determine. Upon looking further at the clause, it appears that all sales made by the Association shall, so far as the safety of purchasers is concerned, be deemed to be within the “aforesaid power.” But it is suggested that a power to sell and a power to convey are distinct and different powers. The owner of land may, by letter, authorize his agent to sell it, but must by deed authorize him to convey it. The sale, pursuant to the letter, is binding in equity only; the conveyance would complete the title. The sale by the Canterbury Association may bind the Association and the Crown to convey, but the purchaser is entitled to have a grant from the Crown, or a conveyance from the Association, with proof that the condition has been fulfilled at the time he pays his purchase money. The application for injunction is founded on the fact that the Resident Magistrate’s Court is not a fit Court to determine the. questions involved in this case, and cannot do justice.

On Thursday, 20th November, 1851, Mr. Justice Chapman gave the following decision, refusing the injunction prayed :— I have looked at the Act of Parliament giving power to the Canterbury Association to dispose of lands, comprised within the “schedule to which the Act refers,” with especial reference to the point now raised, and I cannot discover the slightest ground for this application. Mr. Ferris’s solicitor applied to the Agent of the Association for an abstract of the title of the Association to the land which he had purchased. How could the Agent give an abstract of a title which the Association does not possess? The Association has no title to the land itself; the Act of Parliament does not take the lands themselves out of the Crown; it gives no estate to the Association : all that it confers is power to convey, power to make a good and indefeasible title, to create estates in and over portions of the demesne lands of the Crown within certain limits. The power of the Association is analagous to that of the Governor of a cclony, though created in a different, but not less effectual manner. Has it ever occurred to any lawyer to ask a Governor for an abstract of his title ? The next question is, what is the extent of the power of the Association ? Can that body create “ an estate in fee simple,” or merely an estate subject to a condition which the purchaser, for his own security, must see fulfilled ? I can see no room for doubt that a grant or conveyance in fee simple to a purchaser, executed as prescribed by the act, affords to such nurcbaser as perfect and indefeasible a title to the land it purports to convey, as any species of assurance known to the law of the land ; and I come to this conclusion, not merely upon the word s of the last clause of the Bth section (which exempts purchasers from inquiring into the fulfilment of the conditions), but on the whole tenour and obvious intention of the act. In the first place, the power to convey is thus Stated :—The said A ssocialion shall have power, by instrument under their common seal, to dispose of and convey all or any part of the lands described in the said schedule * * by way of absolute sale to purchasers for estates in fee simple.” This power is made subject to certain conditions, and to the terms of purchase; but the subsequent portions of the Act show, that these conditions are intended to affect the power only, and in a particular manner, and not to affect the estate of the purchaser. The introduction of the word “but” before the sentence, “ subject to the following conditions," has the effect of making it relate, grammatically, to the word “ power” rather than to the word “estates” and “licenses.” If they were to have been made subject, &c., the word but would have been omitted. Moreover, though called conditions, they are not in • the nature of conditions annexed to the fee, , (and from the very terms of the fifth condij tion it is not even precedent to the creation | of the purchaser’s estate), but are merely ! conditions to be performed by the Association, I in order to secure to that body a continuance of their “ power of disposition,” and subject s to a prescribed remedy in case of breach ; ! namely, revocation of the power. If it had i been intended that the condition should be ' annexed to the estate, and imposed on the I purchaser, we must presume that the legisla- : ture would have employed words apt and ' proper for the purpose—words at least as clear as conveyancers employ in similar cases. ' (Litt, 328 et sen.) The Crown does yet re- ; serve any right to re-enter for any condition

broken, because no condition is imposed on the nurchaser: and because (except as to lands conveyed to the purchaser) the lands comprised in the schedule remain in the Crown ; but the Act provides, that “ if the Association should at any time, &c. * * omit, or neglect to observe or perform any of the conditions aforesaid, one of Her Majesty’s Secretaries of State may, if he shall think fit, by warrant under his hand, declare that the power of disposition over the land in the said schedule hereby given to them has determined.” This, then, is the peril which the Association lies under, and none other ; for, ejcpressw unius exclusio est alterius. The same section then goes on further to provide, that “ no purchaser shall be bound to inquire as to the fulfilment of any of the said conditions.” Thus the remedy, in case of breach, being made a question solely between the Crown and the Association, and the purchaser not being bound to inquire as to the fulfilment of any condition, I think he has no right so to inquire. I must further add, that the view taken by Mr. Ferris involves so inconvenient a dilemma, as in itself to show that it is quite untenable. The condition is that one sixth of the whole produce of such sales shall be paid to her Majesty. How can the Association pay out of a particular, fund, before they have received it ? The Asso•ciation cannot fulfil the condition until Mr. Ferris fulfils his contract, yet Mr. Ferris contends he ought not to fulfil his contract until the Association has performed the condition. It cannot be contended that the Association ought to pay one sixth of the whole purchase money out of the deposit, because that would be to make an unwarrantable inroad ■upon the emigration and other funds chargeable upon the deposit. As to the suggestion that the power of the Association may be at an end this moment, no alarm need be felt by any purchaser on that score. Conveyances made by the Association in the Colony after such determination, and before notice is received in the Colony, will be good and valid in law. This rule, ■as applied to a far more solemn act than a grant of Land is stated with great force and clearness in an opinion given in 1732 by the Attorney and Solicitor General of that day, Yorke and Talbot both of them lawyers of great eminence who afterwards occupied the woolsack. The case was this; —Carolina had before that time been under a proprietary Government ; the lords proprietors appointed the Governor, who, with a Councikand Assembly made laws, in the proprietors’ names. All the rights of the proprietors were transferred to the Crown by sale. After the sale, the Governor, Council and Assembly continued to make laws in the names of the proprietors —a body existing no longer. “We are of opinion” said those eminent lawyers “ that laws passed by the Governor appointed by the lords proprietors, and in their names, after the Sale, and before notice thereofarrivedin the pro ■twice are of the same validity as such laws would have been if they had been passed in like manner before such sale; but that any laws passed in the proprietors’ name, after the notice of their having conveyed their interest to the Crown, are absolutely null and void (Chalmers’ Opins. of Eminent Lawyers, vol. 1, 238). So in a great number of cases where Commissions are determined by the demise of the Crown acts done at distant places under such commissions after the demise, but before notice, have been held to be good and valid, Crow v. Vernon, Cro. Car. 97, Burch v. Mary Lowder, 1 Vern. 400 Thompson’s case, 3 r. \vms. 19, 5. rhe appointment of a new Governor in England by commission under the, great seal determines the former Governor’s commission, but all acts done by the former Governor, before notice—official notice, not mere rumour—of the new commission, have always been held to be good and valid ; ami this rule extends to the highest function in which the Governor takes part, ■namely, the making of laws. The rule is ■aiso'applicable, and may be illustrated by the •case of the New Zealand Company. Their powers were determined on the sth July,lßso. Any act done by the Company in London after that date (with the exceptions stated in the Act of Parliament) would be null and void ; but notice was not received here until the end of October, 1850, up to which date the Principal Agent’s authority lasted ; but on the day on which notice was received by him here his functions also ceased.

For the above reasons the injunction prayed must be refused.