Stephen Beuzeville - Bankruptcy Proceedings

26 HARRISON v. COURTAULD. H. T. 1832. [36] 

time of the agreement, but not -when he took the bill, that it was accepted for

accommodation:

Held, that notwithstanding the above release, the acceptor was still liable at the suit of the endorsee. THE Master of the Rolls sent the following case for the opinion of this

Court :—

On the 26th of December, 1826, Harrison accepted a bill of exchange of that date for 298/., drawn upon him by and payable to the order of Stephen Beuzeville, at three months after date. Harrison accepted the bill for the drawer's accommodation. Beuzeville afterwards endorsed and delivered it to Courtauld as a collateral security for a debt of 2000/., which was the balancedue upon certain transactions between them relative to the manufacturing of silk. Courtauld did not then know that the bill was accepted for accommodation; but he was informed of it by Beuzeville before entering into the agreement *next mentioned. The bill, when due, was dishonoured. Beuzeville afterwards became bankrupt; and in October, 1827, an agreement was"- executed between his assignees (with the assent of the creditors) and Courtauld, whereby the assignees agreed to sell a certain mill and premises, lately occupied by Beuzeville, to Courtauld for 1,500/., and to procure him a surrender thereof on his paying the price ; and he promised to relinquish all claims which he had on certain goods upon the premises, on being paid a sum of 261/. due to him for his work bestowed on the said goods. He further engaged, on performance of this agreement by the assignees, to execute a release to them and to the bankrupt's estate of the said debt of 2000/., which constituted the whole of his demand on the estate except his claim on the goods before mentioned for 261/. A release of the 2000/. and of all suits, causes of action, and demands, was accordingly executed in March, 1828, by Courtauld, who afterwards received a counter-release from the assignees. In none of these documents was any mention made of the bill of exchange. In Hilary term, 1828, Courtauld brought an action against Harrison upon his acceptance. The question for the opinion of this Court was,—Whether Courtauld was entitled to recover from Harrison upon the bill ? The case was argued in Michaelmas term by Hill, for the defendant in equity. Courtauld is entitled to recover on this acceptance. The present ease appears to have been sent for the purpose of ascertaining whether Fentum v. Pocock, 5 Taunt. 192, and Carstairs v. Rolleston, 5 Taunt. 551, are still considered law by this court. *Now, there is no authority for saying, that where an accommodation bill has been L endorscd for value to a party who received it without knowing that the acceptance was for accommodation, the acceptor can be discharged as to such endorsee by anything passing between the endorsee and the drawer. If, indeed, the endorsee knew the circumstances of the bill when he received it, some question might, perhaps, be raised on the other side, whether Laxton v. Peat, 2 Campb. 185, was not still an authority for considering the acceptor in the light of a surety, who would be discharged by releasing the drawer. But that point does not ariSe here ; nor did it necessarily arise in Fentum v. Pocock : and an acceptor, considered as the principal party, can only be discharged by express agreement between him and the holder. In Carstairs v. Rolleston, 5 Taunt.

551, the endorsees of a note given to the payee without consideration, released the latter from the note and from the debt; yet the Court of Common Pleas considered the maker liable to the endorsees. That case is in point. It is evident here that the value of the bill was not included in the agreement on the part of the assignees ; nor do they stipulate for its being given up. Courtauld could have no reason for discharging the solvent acceptor. The agreement was only prospective : the acts which were to be done on both sides before the releases were completed, might never be performed ; and, in fact, had not been done at the time when this suit was commenced. In Farquhar v. Southey, Loading...Loading...34] 3 BARNEWALL & ADOLPHUS. 25ore, as to their facts, very near to each other, and not easily distinguishable. But it appears to me that a general principle and rule of law, may, although perhaps not explicitly laid down in any of them, bo fairly collected from the greater number. And that rule I conceive to be this : where a vessel takes the ground in the ordinary and usual course of navigation and management in a tide river or harbour, upon the ebbing of the tide, or from natural deficiency of water, so that she may float again upon the flow of tide or increase of water, such an event shall not be considered a stranding within the sense of the memorandum. But where the ground is taken under any extraordinary circumstances of time or place, by reason of some unusual or accidental occurrence, such an event shall be considered a stranding within the meaning of the memorandum. According to the construction that has been long put upon the memorandum, the words " unless general, or the ship be stranded," are to he *4Y1 cons'dered Дв an exception out *of the exception as to the amount of an •* average or partial loss, provided for by the memorandum, and, consequently, to leave the matter at large according to the contents of the policy ; and as every average loss becomes a charge upon the underwriters where a stranding has taken place, whether the loss has been in reality occasioned by the stranding or no, the true and legal sense of the word " stranding," is a matter of great importance in policies upon goods. In policies on ship, the memorandum is not found. In such policies the inquiry is, whether a loss arose by perils of the sea, and the question is consequently unfettered by any technical phrase. Upon the facts of this case, it appears to ше that the event which happened to this ship is within the second branch of the rule as above proposed. If the rope had not slackened, and the wind had not been in such a direction as it was, the vessel would have remained safe during the night; for although raised by the influx of the tide, she would at its ebb have grounded again on the soft and even bottom over which she had been placed. The events hat occurred, unusual and accidental in themselves, caused the vessel to quit that station, and go in part to another, where, upon the ebbing of the tide, her forepart rested on a stony bank, so as to be above her remaining part, and to cause the straining by which the cargo was injured from the influx of water through the opening of the planks.

I should observe that my judgment in this case is not founded upon the fact of injury to the cargo, or of the want of injury to the ship; I do not consider either of those circumstances as being properly an ingredient in question. *og-| The rule as proposed will probably be found consistent *with the cases quoted at the bar, and which it is not necessary for me to repeat. I will only observe, that the facts of the case of Bishop v. Pentland, 7 B. & C. 219, cannot, in my opinion, be distinguished in effect from those of the present case : it is the last decision on the subject. It cannot be decided that this is not a case of stranding, without overruling that decision. The rule as proposed upholds the judgment in that case : and for the reasons given I think this is a case of stranding; and the verdict must be entered for the plaintiff.

Judgment for the plaintiff.

HARRISON v. COURTAULD.

H. accepted a bill for the accommodation of В., the drawer, who endorsed it over as security for a debt, and afterwards became bankrupt. The endorsee entered into an agreement with the assignees, for purchasing part of the bankrupt's property, and for the arrangement of some claims which he, the endorsee, had upon the estate ; and he afterwards gave them a release of all demands, no mention being made, during this transaction, of the bill, which had been dishonoured. He knew at the38] 3 BARNEWALL & ADOLPHUS. 27 

l M. & M. 14, and in Nichols v. Norris,(a) decided in this court last Easter term, Fentum v. Pocock, 5 Taunt. 192, was recognised as an authority. Some *qq-i doubt, indeed, appears *to be thrown upon it by the judgment of Lord Eldon •* in The Bank of Ireland v. Beresford, 6 Dow. 233 ; but that learned judge seems to have been misinformed as to the facts in Fentum v. Pocock, and to have- supposed that it was there known to all parties, when the holder took the bill, that the acceptance was given for accommodation; and he complains that the Court of Chancery has been misled as to the opinion of the common law coerts on cases of this kind. At all events, the case then before Lord Eldon had circumstances of its own to warrant the conclusions come to by him, independently of any opinion he might entertain as to Fentum v. Pocock.

Adofphus, contra. Lord Ellenborough's decision in Laxton v. Peat, 2 Campb. 185, was certainly disapproved of by the Court of Common Pleas in Fentum v. Pocock ; but their dissent must be taken as qualified by the observation of Sir James Mansfield, that in the last-mentioned case the holder did not know, when he took the bill, that it was accepted for accommodation; whereas, in Laxton v. Peat, that fact was known to the endorsee at the time of the endorsement.

Here, also, it was confessedly known to Courtauld, before he executed his agreement with Beuzeville's assignees, that Harrison had not received value for his acceptance. In this case the accommodation bill (payable at three months) had been more than a year in the hands of the endorsee before he sued upon it. He made no mention of it to the acceptor till the drawer had become bankrupt. The whole course of his conduct had shown, almost' as *4.ftl strongly *as could be done by express agreement, an understanding that •• this bill was not to be put in force. Then, if this be so, the opinion of Lord Eldon, intimated in The Bank of Ireland v. Beresford, 6 Dow'. 233, and expressed more strongly in the subsequent case of Ex parte Glendinning, 1

Buck's Cases in Bankruptcy, 517, is an authority for saying, that where such indulgence is granted to the drawer of a bill, the acceptor, as his surety, is discharged. It is suggested that Lord Eldon might have been misled as to a case at common law ; but it will be remembered that he himself had been a common law judge. [Lord TENTERDEN, C. J. And a very great one.] The agreement of October, 1827, appears to have been intended as a general settlement and satisfaction of demands among these parties : at any rate it must operate so as to Harrison.

Hill, in reply. In answer to Ex parte Glendinning, 1 Buck's Cases in Bankruptcy, 517, it is sufficient to say, that the holder in that case knew, when he received the bill, that it was accepted for accommodation. If, therefore, the distinction drawn from that circumstance in favour of Laxton v. Peat, 2 Campb. 185, be available, it distinguishes Ex parte Gleudinning from the present case.

Here the holder did not know, when he took the bill, the circumstances of the acceptance. He, therefore, had a right to look upon Harrison as an acceptor for value, whose liability could only be discharged by express agreement.

The following certificate was afterwards sent. Cur. adv. vult.

This case has been argued before us by counsel, and we are of opinion, that *41"I un^er tne circumstances above *stated, the defendant is entitled to recover J from the plaintiff upon the said bill of exchange. (a) See the end of the present case. TENTERDEN, J. PARKE, W. E. TAUNTON, J. PATTESON.