J.C.

Lindsay Petroleum Company v. Hurd.

1874

his opinion had a special value. He says, "I expected it"-the letter-" would be shown, and that it would influence the opinion of such parties, as I was pretty generally known through that part of the country, and also known to have acquired knowledge respecting oil lands." He says, that he not only wrote that letter, but he personally communicated with a Mr. Martin and a Mr. Neads, recommending them to invest in the company, and repeated to one of them, Martin, what he had said in the letter. "I told him that if I had known a certain piece of the property had been in the market at the price offered, I would have purchased myself." And when Browne and Sadler, two gentlemen who are not shown to know anything about the value of oil property themselves, go down to look at the land, an inspection on which so much reliance is placed,-when they come to look at the land Farewell contrives to meet them, and says this: "I went to see them because I was interested in Kemp's succeeding in selling the lands, of which I gave him the option. I did not tell the parties that I was interested in any of the lands." But he talked to them, and helped to persuade them to be satisfied; and he says, distinctly, "I did not tell Browne and Sadler I was so interested. To all appearance I was a disinterested party to those that did not know it. I did not think it necessary to tell them.' More abundant evidence of what a court of equity calls fraud it *would be very difficult to conceive, and their [245 lordships have no hesitation in saying that, in their judgment, the decree made by the Vice-Chancellor was perfectly and entirely right.

The sole difficulty which their lordships have felt or now feel arises from the suggestion, which they do not think themselves at liberty altogether to disregard, though it ought not in their judgment to stop the appeal, that the company may now have been dissolved, and may not be in a position to make the necessary reconveyance. Undoubtedly, if they are not in that position, they have come here by the appeal asking for that to which they must know they are not entitled except upon conditions, which, if that be so, they cannot fulfil; and justice would not be done if provision were not made in the form of the order for the possible contingency of their inability to make a reconveyance. What therefore their lordships propose to recommend to Her Majesty is this: To reverse the decree appealed from, and to substitute for it a decree to this effect: Declare that, subject to the right of the respondents to a reconveyance of the lands in the pleadings mentioned, the appellants are entitled 8 ENG. REP.

26

1874

Lindsay Petroleum Company v. Hurd.

J.C.

to have the sale and the conveyance of such lands cancelled and rescinded; and that on such reconveyance being made to the satisfaction of the Court of Chancery for the province of Ontario, in the manner directed by the decree of the 15th of December, 1868, the defendants do repay to the plaintiffs the sum of $13,750, with interest from the date of the payment of the said purchase money to the date of such reconveyance, together with the costs of the suit to be taxed by the master, including all the costs in the several courts below. But if such reconveyance be not made, then the bill ought to be dismissed as against the defendants other than Hurd, without costs, so far as it asks relief beyond that given by the Court of Error and Appeal, in Ontario. Declare the appellants entitled to the costs of this appeal if such reconveyance is made; but the respondents entitled to the costs of the appeal if it be not made; and reserve any order as to such costs until after it shall be known whether the reconveyance is made or not, with liberty to apply, and then an affidavit of course can be made.

Credit must be given to the respondents, as against the sum to be repaid by them if a reconveyance is made, for the 246] amount paid under the order appealed from; the sum carrying interest being reduced, by that payment, as at the date when it was made. If it should appear that, although a reconveyance can be made, some persons other than the company are now entitled to receive the money to be repaid, the form of the order may be expressed so as to meet that case, by directing repayment to the appellants, or to such other persons, if any, as are now entitled in their right. The rate of interest will be the same as that allowed by the decree of the 15th of December, 1868. Their lordships will advise Her Majesty to remit the case to the court below, with these declarations.

Solicitors for the appellant: Rashleigh & Smart.

Solicitors for the respondent: A. Farewell; T. B. Nelson.

J.C.

Torrance v. Bank of British North America.

1873

[Law Reports, 5 Privy Council Cases, 246.]

J.C.,(1) March 8, 11, 1873.

DAVID TORRANCE, THOMAS CRAMP, and JOHN TORRANCE, trading under the name or firm of David Torrance & Co. (Defendants) Appellants; and THE BANK OF BRITISH NORTH AMERICA (Plaintiffs) Respondents.

ON APPEAL FROM THE COURT OF QUEEN'S BENCH FOR LOWER CANADA IN THE PROVINCE OF QUEBEC (APPEAL SIDE). (9)

Renewal of Bill-Wrongful Appropriation of Check-Suretyship.

A. drew a bill on B., which B. accepted. C. became the holder for value. Before due date it was agreed between A. and C. (A. assuring C. of B.'s concurrence) that the bill should be renewed; and C. gave to A. a check on C. for the amount of the bill, to the intent that B. should be placed in funds to meet the original bill, and should thereupon accept the renewed bill.

*A. sent the new bill to B. for acceptance, and also sent him the check, and [247 B. knew the purposes for which both were sent.

B. cashed the check and paid the first bill, but refused to accept the second:

Held, that B. had no right so to appropriate the check without accepting the bill: Held, also, that the agreement between A. and C. did not release B. from his suretyship as acceptor of the first bill.

THIS was an appeal from a decision of the Court of Queen's Bench in Canada, by which they affirmed the judgment of the court below there, in which it was held that the Bank of British North America were entitled to recover the sum of $10,000 and interest against Messrs. Torrance & Co.

The facts were set out in the declaration in the cause and in the findings of the jury, the substance of the defence having been a denial of all the material facts alleged in the declaration, and those facts in a great number of issues having been left to the jury and the jury having given their determination upon them. The question to be determined was, whether, having regard to the facts alleged in the declaration and the findings of the jury, a cause of action sufficiently appeared to entitle the Bank of British North America to recover this sum of money against Messrs. Torrance & Co.

The material facts as found were these: The Bank of British North America were the holders for value of a bill of $10,000 which had been drawn by one E. M. Yarwood upon (1) Present: SIR JAMES W. COLVILE, SIR BARNES PEACOCK, THE LORD JUSTICE MELLISH, SIR MONTAGUE E. SMITH, and SIR ROBERT P. COLLIER,

(2) The MS. notes of the late Mr. Moore, Q.C., have been used in the preparation of this report.

1873

Torrance v. Bank of British North America.

J.C.

Messrs. Torrance. As found by the jury Messrs. Torrance were accommodation acceptors, and it was the duty of Yarwood, as between him and Messrs. Torrance, to provide for the bill, when it became due at Montreal on the 18th of July. On the 15th of July Yarwood applied to the Bank of British North America to enable him to renew the bill, and he represented to the bank that Messrs. Torrance would be willing to come into an agreement to renew the bill and to accept the renewed bill, and thereupon it was arranged between Yarwood and the bank that a new bill should be drawn. A new bill was drawn on the 15th of July at three months' date. It was discounted by the bank for Yarwood, and he at the same time, in order to provide funds to take up the bill which became due on the 18th of July, drew a check on 248] the bank in favor of *Messrs. Torrance or order. That check the bank accepted, payable at par at Montreal; this transaction taking place in London. They then delivered the check to Yarwood, and Yarwood forwarded the check to Messrs. Torrance with a letter, in which he stated: "I have drawn on you to-day at three months for $10,000, and enclose check on B. B. N. America for same amount to retire bill due on 18th inst." That letter, having been sent on the 15th of July with the check, arrived at Montreal on the morning of the 17th, and was there received by Messrs. Torrance. The bank at the same time sent the renewed bill of the 15th of July to their manager at Montreal to obtain the acceptance of Messrs. Torrance to the renewed bill, and the bank, on the morning of the 17th of July, left the renewed bill with Messrs. Torrance for their acceptance, it being the practice there that twenty-four hours are allowed before the drawee determines whether he will accept or not. That having been left for acceptance on the morning of the 17th of July, on the afternoon of the 17th of July, Messrs. Torrance presented the check for $10,000 at the bank and received payment of it. Messrs. Torrance, the same day, gave notice to Yarwood that they refused to accept the renewed bill. There was a letter received the same day or the next day by Cramp, one of the partners in the firm of Torrance & Co., and another letter subsequently which fully explained the whole transaction. Messrs. Torrance on the 18th duly paid the first bill. The material questions submitted to the jury were these: "Fifth, did Yarwood request the plaintiffs to discount said draft of the 15th day of July, 1867, and allow him to draw a check for the full amount thereof, in order that he might therewith retire the said first-mentioned draft, and upon the representation and engagement by him that

J.C.

Torrance v. Bank of British North America.

1873

the defendants would accept such new draft, and did the 'plaintiff discount such new draft, and accept the said check, and certify it as being payable in cash at Montreal, on the faith of such representation, assurance, and undertaking, and deliver it to the said E. M. Yarwood for the purpose aforesaid?" And to that they replied: "Yes." The sixth question asked about the contents of the letter, and on that they said: "Yarwood remitted the check in his letter of the 15th of July, 1867, to cover the draft due the 18th instant, without explaining how he had obtained it." The eleventh *question was, "When they so presented the check [249 for payment did they know, or had they reason to believe, that it represented the proceeds of the draft of the 15th of July, 1867, and that such draft was only discounted upon the faith that they would accept it?" The answer was, We are of opinion that the defendants had reason to believe that the check was the proceeds of the draft of the 15th of July, and that the said draft was discounted upon the faith that the defendants would accept it.

Mr. Benjamin, Q.C., and Mr. Cohen, for the appellants: Article 433 of the Code of Procedure of Lower Canada enacts that "whenever the verdict of the jury is upon matters of fact in accordance with the allegations of one of the parties, the court may, notwithstanding such verdict, render judgment in favor of the other party if the allegations of the former party are not sufficient in law to sustain his pretensions." In this case the allegations of the plaintiffs were not sufficient in law to sustain their pretensions, notwithstanding the verdict of the jury. The declaration was bad, and there was no cause of action. If the check was given to Yarwood without condition, we could not be bound.

As to the letter of the 18th of July, 1867, Yarwood never held out that he was acting as the agent of Torrance. The principal debtor and creditor made arrangements for the payment of the check while in London, which released the surety, though he was not aware of it, being at Montreal. If the creditor does anything by which the interest of the surety is affected, he is discharged. The court in Canada says, "We will not go into the question whether the arrangement is or is not for the benefit of the surety. It is enough that the surety's position is altered."

The case of the Bank of Ireland v. Archer, (') is an exact counterpart of the present case.

(1) 11 M. & W., 383.