COURT OF APPEAL.

New Zealand Times, Volume XXX, Issue 4567, 9 November 1875, Page 2

COURT OF APPEAL.

Monday, November 8, 1875. (Before their Honors the Chief Justice, Mr. Justice Johnston, Mr. Justice Gillies, and Mr. Justice Williams.) The Court opened at 11 a.m. THOMAS V. SMITH (DEMURRER). _ Mi - . Bell applied that this case, which was fifth on the list, might not be taken till counsel who represented both sides arrived from Auckland. ’ " Mr. Justice Johnston remarked that counsel ought to be ready, and said it would never do to have cases taken just when counsel were ready. It was decided that the case should stand over for a reasonable time. WORGAN V. CURL. ' , This was a special case stated by the Chief Justice, with the consent of the solicitors of the parties interested (viz., Mr, Hutchison, for plaintiff, and Mr. Travers and Mr. Hodge for defendant), under the 33rd section of the Court of Appeal Act, 1862, for the decision of ' the Court of Appeal. The question arose at the trial, at the sittings of the Circuit Court of the Supreme Court held at Wanganui iu October last, of .certain issues settled in an action brought by the plaintiff against the defendant for dissolution of a partnership alleged by the plaintiff to exist between' the plaintiff and the defendant, and for an account. The plaintiff denied the existence of the partnership, gome of the issues were admitted. The issues submitted to the jury were as follows : —“2. Was the partnership business mentioned in the said agreement carried on between the plaintiff and defendant under terms of the agreement ? 2a. If the business was carried on in partnership, when did it commence, and does the said partnership still exist? if not, when did it cease ?” After evidence had been called for the plaintiff and the defendant, counsel had addressed the jurv, and the Judge had summed up as usual, the" jury retired, but after six hours’ deliberation they returned into court, and ,the foreman stated that only eleven had agreed to a verdict finding for plaintiff. Eleven of the jury had agreed to intimate to the Court that they had considered their verdict, and that there wasm possibility of the twelve being unanimous, but the foreman stated that tbe twelfth juryman did not concur in the said intimation, and did not concur iu the verdict, His Honor the Chief Justice, who presided on the occasion, took and accepted the verdict of the eleven, so given, as the verdict of the jury, the counsel for the plaintiff urging that he ought to do so, and the counsel for the defendant objecting. The question for the Court of Appeal was whether the said verdict ought or not, under the circumstances, to have been taken and accepted as the verdict of the jury. It had been agreed in the Court below that if the Appeal Court considered such a verdict to have been wrongly accepted then, that the condition of things should be just as if, after the lapse of twelve hours, the Court discharged the jury without agreeing to a verdict. Mr. Hutchison, who appeared to support the reception of the verdict, said it was a mere matter of construction of the second section of the Jury Act of 1871. The provision of the second section ran thus “ Provided that no verdict not arrived at unanimously shall be taken till the jury have retired for a period of at least six hours, and have intimated to the Judge presiding at the trial that they have considered their verdict and that there is no probability _ of their being unanimous.” The second section provided that a verdict of five-sixths might be taken if at the end of six hours there was no probability of unanimity; and probably it would be contended on the other ride that the dissent of the one from the intimation that there was no probability of agreeing disenabled the Court from accepting the verdict. But he (Mr. Hutchison) submitted that this was an argument which had no strength; for if unanimity were not necessary for the verdict itself, neither was it required for a mere intimation. If this were the case, there would never be such a thing as a verdict of the majority, for the simple reason that two jurymen happening to form a minority, and being aware of the extent oi their power, would not concur in an intimation of improbability of agreement. Mr. Justice Johnston remarked that under some systems the verdict of a majority was regarded as the verdict of the jury, but it was not so here.

Mr. Hutchison submitted that after six hours had been spent in deliberation, the jury really became a jury of ten; and if the ten

were unanimous, their verdict was the verdict of the jury; and he contended that, in this -case, when the five-sixths, or rather eleventwelfths, had intimated through their foreman that they had considered their verdict, and believed that there was no probability of unanimity, that was quite sufficient to entitle plaintiff to the verdict, notwithstanding the dissent of the one. Mr. Justice Johnston was not by any means satisfied of that, for it was not inconsistent with probability that a strong-minded man, with more experience than the rest of his associates, might change the opinions of the eleven by his arguments ; and if he felt that with a little more consideration and discussion he would be able to do so, then be could not conscientiously say he believed there was no probability of unanimity, and it would be improper to ignore his protest. Of course he was putting a remote case. ‘ Mr. Hutchison : Very remote your Honor; and the in this instance were altogether against such a result, for, as a fact, at the end of six hours only ten had agreed, but after a short retirement the ten became eleven.

The Chief Justice : That’s an argument against you, Mr. Hutchison, for if in a short time the ten became eleven, is it not possiblethat with a little more time the eleven would become twelve ? (A laugh.) Mr. Hutchison said he had replied to Mr. Justice Johnston to show that there was no chance of the one bringing over the eleven. He submitted that there could be no doubt of the intention of the Legislature, -namely, that after the expiration of six hours a large majority of the voices should be substituted for unanimity. It was clear that his dissent from the verdict of the eleven mattered nothing, and the whole contention of the defendant must rest on his dissent from the proposition that he did not consider it improbable that they would become unanimous. But the two things must go together. So far, the proviso had been considered as if there were two intimations to be made, but in fact (it must be one, and include both facts. That was to say (assuming the case for the defendant), that the dissentient one must intimate to the Judge, through the foreman, that the jury have not considered their verdict, and there is a probability of their being unanimous. This was not done. The present case admitted the strongest application of the proposition, for there was but one dissentient, and that the Act did not contemplate such a minority to have the effect of burking a verdict of eleven others, was further shown by the use of the plural number in connection with the necessary intimation. “They” of the minority did not intimate that there was a probability of “ their ” being unanimous, for there was but one; but “they,” the eleven, intimated, in the words of the Act, that they had considered their verdict and that there was no probability of their being unanimous. Mr. Travers submitted that the proviso would be absolutely senseless if at the end of six hours, without the concurrence of the whole jury in an intimation of the improbability of their all agreeing, the verdict of five-sixths could be taken. If it had been intended that at the end of six hours the verdict of five-sixths could be taken, regardless of any intimation that the jury had considered their verdict as a whole and were not likely to agree, the Act would have said so; but the Act expressly provided against that. Originally all were required to concur in the verdict, but an alteration was made, not to coerce, but to free the conscience of the minority, and if all could concur in an intimation that there was no likelihood of their being, unanimous, then the verdict of five-sixths might be received. If that concurrence could not bo obtained, then the jury were detained for another six hours, and then discharged, and the action had to be tried over again. Whatever might • have been the intention of the Legislature, the statute was very clear, oh the subject; the•_grammatical construction of the proviso was unquestionable, and the reason of it was equally unquestionable, viz., that at the expiration of a certain time the scruples or objections of one or two might be met by their concurring in an intimation that they could not and were not likely to agree with the other ten. Then the verdict of the ten might be received, but if they could not agree to this, then they must be shut up for a longer period. He submitted that the verdict ought not to have been received, and that the case must be tried over again. The Court took time to consider the question. BROGDEN V. MILLER. Argument on demurrer to plaintiffs’ declararion, removed from the Court below by consent of all parties. The declaration set forth that defendant is chairman for the time being of a company established in the city Of Melbourne, in the colony of Victoria, for; carrying on the business of fire and marine insurance, and is sued as such chairman. - That on or about the 7th March, 1874, the said company by their agents, Messrs. Levin and Co., of Wellington, duly authorised and acting in that behalf, made and entered into a contract, in writing, with the plaintiffs, for the insurance of the steamship Paterson against certain risks in thesaid contract mentioned, and the plaintiffs at the same time paid to the said agents the sum of £6O, as the premium for such insurance, pursuant to the said contract, and received from the said agents a receipt endorsed upon the said contract for the said sum of £6O as and for such premium. : The insurance slip, drawn up as usual, and a receipt for £lO, were attached, also the customary memorandum of exceptions. Plaintiffs also paid 10s. for stamps upon the policy, and about the Ist April a policy was delivered to them by defendants, which contained amongst other exceptions the following, which had not appeared in the first memorandum :—“The ship is warranted not to proceed on any sandal wood or beche-de-mer voyages, nor to trade with the natives of the South Sea Islands, nor trade to, touch, or stay at any bay, harbor, or open roadstead, nor to sail through south entrance to Moreton Bay, nor to any other place or port within the limits of Torres Strait north of the eighteenth degree of south latitude; nor to any port or place on the west, coast of New Zealand; and further, this policy will cease to be in force and become void, if the vessel herein assured shall enter upon the guano-carrying trade.” Between the 7th of March, 1874, and the 7th of September, 1874 —to wit, on or about the 13th of July, 1874while the steamship was attempting to prosecute a voyage which was Intended to be protected by the policy of insurance to be made and issued, she was wholly lost. The sixth allegation set forth that plaintiffs were, at the time of the wreck, interested in the ship and premises to the amount of all monies intended to be insured thereon by the policy ; and the seventh allegation ran as follows : —“ That at the time of the delivery to plaintiffs of the said policy of insurance on the Ist day of April, 1874, the plaintiffs verily believed that the same had been made in strict accordance with , the terms and. conditions of the said contract in that behalf, whereas, in truth and fact, as the plaintiffs afterwards discovered, the said policy was not made in accordance with such terms and conditions, but was, as the plaintiffs aver, wrongfully and knowingly made and issued, and delivered to them, so as to cover risks other than the risks agreed to be covered by tbe policy to be issued by the defendants, pursuant to the said contract of 7th March, 1874.” In the eighth and ninth allegations plaintiffs said that, believing the policy had been made and issued in conformity with the terms and conditions of the contract of the 7th March, they applied for payment of the sum, but on tbe agents refusing to do so, plaintiffs then, for the first time, perused the policy, and became aware that it was not in accordance with the beforementioned contract. They applied to the agents of defendant to rectify tbe policy, but they had declined to do so; and the plaintiffs claimed that the policy of the Ist April, 1874, might be rectified so as to accord with the said contract of the 7th March, 1874; and such further or other relief as might seem just. To this declaration defendant, by Mr. Francis Henry Dillon Bell, his solicitor, demurred that it was bad in substance. 1. That it is not alleged in the declaration that the alleged variance between the terms of the alleged contract and the policy was the result of either fraud or mutual mistake of the parties. 2. That the

alleged contract in tlie second paragraph of the declaration set forth is not a policy of-in-surance within the intent and meaning of the word “ policy,” as used in the 10th section of the Stamp Duties Acts Amendment Act, 1869. 3. That it is not alleged that between the day on which the policy in the declaration set forth was delivered to the plaintiff and the day of the alleged loss, the plaintiffs had not the opportunity to examine the said policy, or were prevented by the defendant from doing so. 4. That it is not alleged, nor does it from the statement of facts in the declaration appear, that the plaintiffs could not have sued upon the alleged contract in the second paragraph of the declaration set forth. Mr. Izard (with whom was Mr. BeU) supported the demurrer, first addressing himself to the non-allegation of fraud in the declaration. ~He submitted that the Court would not rectify unless upon the ground of fraud or mutual mistake. With respect to the former, there was no allegation of it whatever,, although in the seventh allegation it was said the policy was “ wrongfully and knowingly made and issued” j ... . Mr. Justice Johnston : Does not the use of the word wrongfully amount to an allegation of fraud ? ' MrT Izard : No ; it must be distinctly charged and alleged. They had not said “ fraudulently made and issued,” but “ wrongfully and knowingly made and issued, ’ and therefore, as there was not a distinct allegation of fraud in -the bill, the Court could not amend. . , Mr. Justice Johnston : If a man acts wrongfully ' against the rights of another party knowingly and intentionally, is that not sufficient to amount to fraud? Mr. Izard : I submit not; “ wrongfully merely means done wrongly, hut that need not be fraudulently. , ... Mr. Justice Johnston: No doubt; but ifitis done “ knowingly,** does not that necessarily amount to a fraud in law ? Mr. Izard submitted that fraud must be distinctly charged in the bill. For purposes of demurrer he was obliged to admit that the policy had' been wrongly made and issued, but defendants were not charged with fraud, nor did the statements in the bill amount to such a charge. ■ A policy might be issued with perfect hond jides, yet not in accordance with the contract. He would admit at once that if fraud were distinctly charged and subsequently proved, the Court could rectify the deed, not the policy, for he should have to contend that the insurance slip was an invalid document under the Stamp Act. Hut there was uo allegation of fraud, and he should pass on to discuss the question of mutual mistake. The Chief Justice drew the attention of Mr., Izard to Lewis’s Equity Drafting 39, on , the question of fraud. . Mr. Izard;’referring 1 to mutual mistake, contended such'a plea could not be admitted in : tbfa case. Mutual mistake, as he understood . it, meant the mistake of both parties; but on the face‘of the declaration he could find no allegation of common mistake, there were no words which* showed " that. Defendants had not been dissatisfied with the policy ; there had been no complaint about it when delivered, and, therefore, plaintiffs were bound by. it afterwards.' The fact of their keeping it was an indication of acceptance of the policy. ' Mr. Justice Johnston could not see how the delivery to plaintiffs affected the matter.. It required no act on their part to validate it. If it had remained in the possession of the company, and had never passed-out of their hands, still it would have been binding upon them.

Mr. Izard : In order to sustain the allegar tion of mistake, they ought to have put upon the face of the declaration an allegation that the policy, as they received it, was wrong within the intention of both parties. Mr. Justice Johnston : So they have. They say “ It was a mistake of us to keep it; but it was your mistake, or your wrongful act, to give us such a policy.** Mr. Izard submitted there was no allegation of mutual mistake, and urged that to enable the Court to rectify a document capable of rectification, there must be a direct* allegation of mutual mistake—-mistake by both parties. Mr. Justice Johnston, after looking at the circumstances, could not see how mistake could be alleged, and After some further discussion, Mr. Izard passed on_to_ the second ground of.. demurrer, and contended that the provisions of the 19th section of the Stamp Act of. 1869 rendered the insurance slip an invalid document. The 19th section of that Actsaid: “ No contract or agreement for sea- insurance shall be valid unless the same shallbe expressed in a- policy, -and every policy shall specify the particular risk or adventure, the names of the subscribers or underwriters, and : the sum or sums insured, and in case any of the above-mentioned particulars shall be omitted in any policy, such policy shall be null and void to all intents - and purposes.” Therefore, it seemed to him that the Court was asked to rectify a policy upon a document which is perfectly invalid. The Chief Justice : Do you say that a document. could be used in evidence for the purpose of getting a policy ? Mr. Izard: Yes. He would call attention to the eighteenth and three or four succeeding clauses of the Act. He quoted zn re London Marine: Insurance (Smith’s case), Daw Kep. 4 Chancery Appeals, 611; and McKenzie and Coulson, Daw Hep., 8 eq., 368. In reference to the latter case, Mr, Justice Johnston enquired whether in that instance there had been a receipt for premium upon ine face of the slip ? Mr. Izard : No, your Honor, but there had been underwriting. Mr. Justice Johnston : There is a receipt here.

Mr. Izard : But that does not make it a policy. Mr. Justice Johnston : But it makes it a different instrument to a mere proposal. I look upon the slip in England as a mere proposal, hut it is very different here, and to that extent the cases do not apply. Mr. Travers said that the slip as used in England was a mere arrangement of terms between ship brokers and insurance brokers, to be affirmed or otherwise afterwards.

Mr. Izard quoted other authorities in support of the position he took :—3 Arnold, 254 ; 13 Weekly Eeporter, 310 ; Fisher and Liverpool Marine Insurance Company, Law Eep., 8 Q. 8., 469 and 474; same case on appeal, 9 Q. 8., 419 ; Yenos and Wickham, 2 H.L. Eep., 3X4; Patterson and Mills, 2 Bligh’s Eep., 232 ; Mead and Davidson, 3 Adolphus and Ellis, 303 ; Edwards and Aberayron, 31 L. Times, 779. In regard to the third ground, he argued it was the duty of plaintiff to have brought their policy to defendant, and protested against it before the loss ; but under the circumstances they were precluded from claiming, as they had accepted the policy. Mr. Justice Johnston failed to see that. If plaintiffs had taken the policy at once, it would have hastened the crisis, but he could not see how it affected the position of the parties. Mr. Izard cited Morrison v. Universal Marine Insurance Company, 27 L.J., 791. Mr. Bell urged, in respect to the fourth ground of demurrer, that the vessel was wrecked within the places protected by the policy, and there was nothing to show that rectification was necessary, inasmuch as they did not allege that the exemptions inserted in the policy prevented them from recovering. He also supported some of Mr. Izard's arguments in reference to the non-allegation of fraud, Mr. Travers admitted that the document of 7th March was not a policy, but merely an agreement, stamped with a shilling agreement stamp; and Mr. Izard consented to the declaration being amended by the insertion of an additional allegation to the effect that the steamer was lost on bar and in a harbor. The Court then adjourned till 11 a.m. on Wednesday.