Labouchere v. Tupper (United Kingdom)

XI MOORE, 196 LABOUCHERE ‘U. TUPPER [I8571

Second. That as no action, suit, or other proceeding, within the meaning of the

233rd section of “ The Bankrupt Law Consolidation Act, 1849,” had a t any time

been taken by tlie Appellant to dispute or annul the petition for adjudication, the

Gazette containing [196] the advertisement of the adjudication was conclusive evi-

dence against the Appellant, that he had become a Bankrupt before the date and

filing of the petition for adjudication.

The Appellant appeared in person in support of the appeal.

He suhniitted, that the ‘‘ Bankrupt Law Consolidation Act, 1849,” did not apply

to New Zealand; and that the Court below ought to have entertained the objections

urged t o the validity of the adjudication of bankruptcy. Upon this point he relied

upon C l a ~ f i v. M7rlZick (a ) , and he disputed the validity of the adjudication, relying

upon the same grounds stated in his reasons of appeal upon this point.

The Lord Justice Knight Bruce.-As the validity of the adjudication is disputed

by the Appellant, it seeiiis the proper course to allow hiin to present a petition to

the Lords Justices sitting in Bankruptcy to annul the adjudication, and in the mean-

time fo r the appeal to stand over.

Mr. Haniien, for tlie Respondent, admitted that the judgment could not be sus-

tained, and consented to this course.

The Appellant accordingly presented a petition to the Lords Justices, to annul

the adjudication on the grounds set forth in the reaeons relied upon by him [197] in

the appeal to Her Majesty in Council (see case upon this point reported nom.

Ez: parte Bunny , 1 De Ger and Jones, 309). The Lords Justices expressed their

opinion that the Appellant had resided abroad with the intent to defeat or delay

his creditors, and that there was a continuing act of bankruptcy while he so con-

tinued to remain abroad with that intent.

The Appellant wishing t o t ry the validity of the adjudication by an action, the

petition was ordered t o stand over with liberty to him to bring such action. The

Appellant ultimately declined to bring an action and the petition was dismissed.

By an Order in Council made upon thrx appeal, leave was granted to the Appel-

lant to withdraw the appeal, by consent.

[Mews’ Dig. tit. BANKRUPTCY, H., IV. COLONIAL BANKRUPTCY; tit. COLONY,

I. GENERAL PRINCIPLES, 1. English Lauv-Introduction and Appl icabi l i ty ,

111. APPEALS TO PRIVY COUNCIL, 6 Practice, 1. In forma pauperis. S.C. sub nom.

Bz p r t e B u n y , 1 De G. and J. 309. As to application of English statute law

to the Colonies, etc., see note to Lyons (Mayor o f ) v. East India Co. (1836),

1 Moo. P.C. at p. 299. Cf. also Goooke v. Charles A. Pogeler Co. (1901),

A.C. 102; Duianey v. Merry, 1901, 70 L.J. K.B. 376. As to special leave to

appeal in civil cases, see note to Reterneye?. v. ObermulleT, 1837, 2 Moo. P.C. a t

p. 125.1

[I981 ON APPEAL FROM THE COURT OF CHANCERY I N THE

ISLE O F MAN.

HENRY LABOUCHEKE and Others,--ApiselZaizts; EMILY TUPPER and

Others,--Respordenfs * [June 17, 18571.

An executor of a trader carying on the trade after his death, though not avowedly

in the character of executor, is nevertheless persmally liable for all the

( a ) 3 Moore’s P.C. Cases, 252. See also Edwards v. Ronald (1 Knapp’s P.C. Cases,

259); Bri t i sh Linen Company v. D r u m n o n d (10 Barn. and Cr. 903): Dauisom V.

F a ~ n 7 e ~ (6 Exch. Rep. 242); LerouG v. Blown (12 Com. Ben. Rep. 801); Mostyn v.

FabrLgas (Cowp. 161), and see notes to that case in 1 Smith’s L.C., 363 (2nd edit.).

* Present: The Right Hon. Dr. Lushington, the Right Hon. The Lord Justice

Knight Bruce, the Right Hon. The Lord Justice Turner, and the Right Hon.

Sir Edward Ryan.

670

LABOUCHERE 11. TUPPER [ 185 71 XI WOORE, 199

debts contracted in the trade after the Testator’s death, whether he is entitled

or not, to be wholly, or to any extent, indemnified by the Testator’s p e r s o d

estate, and whether the Testator’s estate is sufficient or insufficient f o r tha t

purpose [I1 Moo. P.C. 2211.

Neither does the propriety of the executor’s conduct, as between himself and

those beneficially interested in the Testator’s personal estate, give the

creditors of the trade, becoming so after the death of the Testator, the rights

of creditors of the Testator; i t being immaterial, as. fa r as they are con-

cerned, whether the Testator, if be had a partner, was bound by a covenant

with him that the Testator’s executor should continue the trade in partner-

ship with the surviving partners [11 Moo. P.C. 2211.

The executor of a deceased shareholder in a Joint-stock Banking Cbmpany held

not liable to make good out of his Testator’s assets, debts contracted by the

Coriipany subse~uently to the Testator’s death, though the shares were

registered in the executor’s name, and he received the dividends in his char-

acter of executor, the debts due at his death having been subsequently dis-

charged by the Company [ll Moo. F.C. 2211.

There is no difference between the Manx law and the law of England in respect to

the principles applicable to the law of partnership 111 Moo. P.C. 2161.

The Appell~nts were the partners in a firm, which, since 1836, had carried 011

the business of banking in London, under the style of “Williams, Deacon,

Labouchere, Thornton, and Co.,” and one of the Respondents, Carre Cook Tupper,

was the executor of one John Colton Tupper ; tlie other Respondents, Emily Tupper

and her children, were the persons beneficially interested under the Will of John

Colton Tupper.

The appeal was brought against two decrees of the [I993 Court, of Chancery in

the Isle of Man, made in two causes instituted there. The first suit related to a

debt due from the “Isle of Man Joint-&ock Banking Company” to the firm of

Williams, Deacon, and Co. The second cause was a cross suit to the original bill

brought by the Appellants and John Deacon, deceased.

The principal questions raised by the pleadings and the subject of tlie appeal,

were-First, whether the real and personal estate of John Colton Tupper, who was,

a t the time of his decease, a shareholder in ‘. The Isle of Man Joint-stock Banking

Company,” was liable t o the Appellants for the debts due to their firm when that

C ~ ~ n ~ a n y Btapped payment on the 14th of August, 1843 ; and, secondly, if the real

and personal estate was not so liable, whether such estate was liable to the Appel-

lants for the debts owing to their firm from that Company at the time of the decease

of John Colt,on Tupper. By the decree made in the first cause, the Court of

Chancery in the Island declared that the Respondent, Carre Cook Tupper, as

executor of John Colton Tupper, had no power to pledge the estate of his Testator

beyorid the amount invested in the shares, and, therefore, that the estate was not

liable to the deb& incurred by the Company after the death of John Colton Tupper,

beyond the amount invested in such shares, and, that the debts owing by the Corn-

pany to the Appellant’s firm, a t the time of the death of John Colton Tupper, were

discharged by payments made subsequent to his decease. By the decree in the

cross-suit, the bill was dismissed.

The facts of the case out of which the appeal arose were as follox7:-

[ZOO] In the year 1836, a Joint-stock Banking Coiupany, called the ‘‘ Isle of Marl

J~)iiit-stock Banking Company,” was formed for the purpose of carrying on a I3ank-

ing business a t Douglas, in the Isle of Man. This partnership was constituted by a

deed, dated the 2nd of July, 1836, and a memorandum annexed thereto, dated the

22nd of August, 1537, which was made between two persons, named Wulff and

Forbes, of the town of Douglas, Bankers, and John Colton Tupper and u p ~ ~ ~ r d ~ of

130 other persons, as shnrelioIders in the co-partnership. By seetion eight of the

deed of co-partnership it was provided, that the name and place of abode of each

proprietor for the time being, in the ~ o n ~ p a n y , together with the nunxber of shares

held by him, from time t o time, should be entered and written in a book, to lie kept

for that purpose, to be called “ The Shareholders’ Register,” and every proprietor

who should at any time change his name or place of abode, or, being a female,

671

XI MOORE, 201 LABOUCHERE v. TUPPER [ 1 8 5 71

should marry, and the assignees of any proprietor who should become Bankrupt

or Insolvent, and the personal representatives of any proprietor who should die,

should, immediately upon and after the events, leave a notice a t the Banking-house

or office of the Company, in the town of Douglas, stating his name, or new name

and place of abode; and when a female proprietor should have been married, then

the name and place of abode of her husband. Section nine provided, that no

benefit of survivorship should take place between tlie proprietors, and that all the

property of the Company should, as between the several proprietors and their real

and personal representatives, be deemed personal estate. Section fifty-nine pro-

vided, that in case any person in whom any shares [201] in the capital of tlie Com-

pans should, by original subscription, purchase, marriage, bequest. representation,

or other niode of acquisition, become vested, and who should not have executed or

otherwise acceded to the deed, should, fo r three calendar months, after notice,

neglect or refuse to execute the deed of accession as therein mentioned, then it should

be lawful for the Directors for the time being to declare the shares so vested in such

person neglecting or refusing as aforesaid, and all benefit and advantage whatsoever

incident thereto, t o be forfeited to the remaining members of the Company, and the

same sliould be forfeited accordingly. Section sixty provided, that whenever, by

any nieans whatsoever, any shares in the capital of the Company should become

forfeited, or should be duly and effectually transferred to a new proprietor, then

arid in such case, and not before, the resporisibility of the previous owner as a pro-

prietor in the Company in respect of such share or shares should cease aiid deter-

mine, and such previous owner should be exonerated and released from all subse-

quent claims, demands, and obligations, in respect of the same share or shares, and

from all future observance and performance of the covenants, conditions, stipula-

tions, and agreements of the deed in respect of the same share or shares. Section

sixty-one provided, that before any assignee of a Bankrupt or Insolvent proprietor

should sell or assign any share or shares in the capital of the Company vested in

him in that capacity, and before any executor, administrator, or legatee of a de-

ceased proprietor, or any hushand of a female proprietor, should sell, transfer, o r

assign any share or shares vested in him in such capacity or should become a pro-

prietor in respect of such share [202] or shares, or receive any dividends in respect

of the same, he or they should produce to the Directors for the time being of the

Conipany, satisfactory evidence of his or their titles t o the same. By section sixty-

s ix it was provided, that if ever the losses of the Company should have absorbed not

only the whole of the fund called the reserve surplus fund, but also onefourth part

of the paid-up capital of the Conipany, the Directors for the time being should call

a special general meeting of the proprietors, and lay a statement of the affairs of

tlie Company before such meeting, when i t should be lawful for any three or more of

the proprietors a t such meeting to require the dissolution of the Company, unless

two-thirds in nunibar and value of the proprietors then and there present should be

desirous of continuing the Company, which they should be at liberty t o do upon

purchasing the shares of the party or parties desirous of withdrawing, and indem-

nifying such retiring proprietors from the debts and engagements of the Company,

and releasing them as therein mentioned.

The Respondent, Carre Cook Tupper, was a shareholder, and one of the Directors

of the Company from its coniinenceinent until the Bank stopped payment. The

Testator, John Colton Tupper, was, a t the tinie of making his Will and at his death,

also a shareholder in the Company, and by his Will, dated the 23rd of March, 1838,

he gave, devised, and bequeathed unto the Respondent, Emily Tupper, certain

chattels for her benefit during her life, and he also gave and bequeathed unto Carre

Cook Tupper and Edward Forbes, all other his real and personal estate whatsoever,

i n trust to collect and receive the rents, issues, profits, and dividends arising from

tlie same, and all profits [203] arid advantages arising from any shares t o which he

might be entitled in any mines of lead or copper, and fro111 and out of the yearly

income thereof t o pay an annuity to the Respondent, Eiiiily Tupper; aiid upon

other trusts therein mentioned. The Will did not empower the trustees and exe-

cutors to sell any portion of the Testator's estate until the eldest son became of age,

nor did the Will contain any directions relative to the interest of the Testator in

the Banking Company, or in anywise authorize the executors to einploy any par t

672

LABOUCHERE v. TUPPER [1857] XI MOORE, 204

of the Testator’s estate in carrying on or coiitinuing the business of the CO-

partnership.

The Testator died on the 22nd of January, 1840, leaving the Respondent, Eiiiily

Tupper, his widow, and the other Respondents, his children, hini surviving, who

claiined under his Will t o be interested in his residuary, real and personal estate.

Forbes having renounced, Carre Cook Tupper alone acted as executor thereof.

Carre Cook Tupper did not sell the Testat,or’s shares in the Bank, but, being himself

a partner and Director, he caused the shares to be entered in the Shareholders‘

Register as held by I‘ The representatives of J. C. Tupper.” This entry was signed

by Carre Cook Tupper, as one of the Directors of the Company. In August, 1810,

a dividend of 28 per cent was paid upo~i tlie Bank shares ; and in 1841, a divideiid

of 2.6 per cent was paid ; and in 1842, a dividend of 2 5 per cent ; which several

dividends were received by Carre Cook Tupper, as executor, and paid by hini to

the credit of the account of the estate of the Testator with the Bank.

The Company stopped payment on the 14th of August, 1843, and a bill and

action was filed by the Appellants’ firm in the Court of Chancery in the Isle [204] of

Man, on the next day, against all the shareholders in the Company, including Carre

Cook Tupper in his own right and also as executor of John Coltoii Tupper, and

against the legal representatives of many others who had been shareholders in the

Company, claiming the sum of 260,000 due to the Appellaiits’ firni upon eight

promissory notes of the manager of the Company, as a specialty debt; and i r i

December, 1843, a suppleniental bill was filed by the Appellants’ firm, claiming the

sum of 299,941 18s. Id.

The Respondents, the wife and children of John Coltoii Tupper, and Carre John

Tupper, since deceased, on the 20th of March, 1844, filed a bill in the Court of

Chancery in the Island against Carre Cook Tupper, and the Appellants, arid

Willianis the elder, and John Deacon, by which bill, among other things, they

charged that the Coinpany was dissolved by the death of John Colton Tupper, and

that thereafter, Carre Cook Tupper carried on the trade or business of a Banker

on his own account and responsibility in respect of the shares therein so belongiiig

to the Testator at the time of his death; axid that the debt, if any, which was up

to and a t the time of the death of the Testator due to the Appellants’ firni, consisted

of a sniall balance due by the partnership, and which balance, the Plaintiffs charged,

was entirely discharged by payinents subsequently inade to the Appellants’ firm

by the survivors of the partnership; and that since the death of the Testator, Carre

Cook Tupper had continued t o trade with the Testator’s share of the capital of the

Bank which existed at the time of the death of the Testator, and with his other assets

in ronjunction with the surviving partners as [205] aforesaid, under the firm of tlie

“Isle of Man Joint-stock Banking Company,” or surne other style o r firm as a

new partnership, and debts to a very large aiiiount had been contracted by such

iien partnership with divers persons, but particularly as the Respondents alleged

with the Appellants’ firiii; and lhat such new banking partnership carried on by

Carre Cook Tupper, and the other surviving partners as aforesaid, stopped pay-

inent on the 14th of August, then last past, and that the Appellants’ firm had by

virtue of the process of the Court of Chancery in the Isle of Man, granted upon the

bill filed by the Appellants’ firm in the year 1843, attached aiid arrested property

arid effects, part of the estate of the Testator in the hands of Carre Cook Tupper,

as well as Carre Cook ”upper’s own propeity, to be anienable to such decree as

inight be made on the bill; and the Bill further charged that the Defendant, Carre

Cook Tupper, and also Willianis, Deacon, aiid Go., pretended that the estate and

effects of the Testator were liable t o debts contracted with them by Carre Cook

Tupper subsequently to the decease of the Testator, which liability the Respondents

deiiied ; and the Bill prayed that the Will of the Testator might bc established and

the trusts thereof performed, and for an account of his personal arid real estates,

and that the Appellants’ firm miglit be restrained by injunction from attaching or

arresting the estate or effects of the Testator. in the possession of the Defendant,

Carre Cook Tupper, or elsewhere.

The Appellants and John Deacon, by their answer, sulmiitted, that according to

tlie true construction of the deed constituting the partnership of the Banking Com-

pany, the same was not dissolved by the de:itli of [206] John Colton Tupper, but that

P.C. III. 673 22

In this suit the estate of the Testator was arrested.

the executors of the Tirill of dohri Coltou Tapper were by the deed Imund to the other

partners in the Bank to ~ o ~ ~ t i r ~ ~ ~ e the imrtiiership on tlre belialf and ut the risk of the

estate of Johii Colton Tupper, until either the executors became themselves indi-

vidually sh~rei~olders and partners in the Banking Compa~~y, or induced some otheI*

person or persons to becorne shareholder and partner, shareholders and partners

therein, u r d until such new sliare~Iolder and partner, share~Aolders and partners,

whether the executors tliernselves or such other person or persons had been duly ad-

mitted and recognised as sueli ~ ~ a r ~ l ~ o l d e i . axd partner, s ~ ~ a r ~ ~ ~ o l d e r s au partners,

and that Carre Cook Tupper did uot after tlie decease of the Testator carry on the

trade or business of a banker on lris own account o r responsibility in i-espeet< of the

shares ~ I o ~ J ~ i ~ ~ g to the Testator at the tirue of his decease. An,d the answer further

alleged, that Carre Cook l’upper did riot for h i s o w n benefitr, but as executor of the

Will of the Testator arid for the benefit of the estrxte of the Testator, receive the divi-

dends which were from time to time declared and kmame due after ti10 decease of

the Testator in respect of &lie sharm of the Tt.lstator up to the stopping payment. of

tlie partuership, of whieh tlie Testator u as a partner tit the t h e of his decease.

Upon, this bill the Court of Clrnncerg i n the Island. in April, 1844, granted an

i r ~ j u ~ ~ c t i o n , p r o ~ ~ ~ b ~ t i r i ~ Carre Cook Tupper from f u r t ~ ~ e r i n t e r ~ ~ d ~ i n ~ with the

estate m d effects of John Coltchri Tupper, and appointed a reeeiver of the rents arid

profits of such estate.

In 1849, B decree was made in the origina1 suit of the Appellants, comiiienced in

~ u ~ ~ ~ s t , 1843. [20?] By this decree the suit was dismissed as against s0m0 of the

Defendant*: and it was declared that Carre Johu Tupper, in, his o v a right and as

executor of Jolm Colton Tupper, and other original proprietors of shares, ought to

pay the Appe~ants’ firm the sum of $96,793 4s. 6d. with interest.

The ~ p ~ ~ a n t s a d Deacon, in consequence of the injwiction and appointment

of a receiver, were unkble to enforce their decree against the estate and effects of

John Colton Tupper ; they, therefore, on tlie 30th of May, 1851, filed a cross bill

ugaiiist Einily Tupper, and the children of the Testator, arid against Carre Cook

Tupper, stating, among other things, the deer- against Carre Cook ‘.Dapper, aiid that

u t the decease of Testator the Corrtpany s t o d iikdel3ted to tile A p p e ~ l a n ~ in the sum

of 326~,000 arid upwards, to the payment of which the Testator’s estate was bound ta

~ o ~ ~ t r i ~ ~ u ~ ; and that Carre Cook Trrpper, in pursuance of his duty as trustee and ex-

ecutor and in strict coinpliance with the terms of the Rill, to which Emily Tnppep

had given her consent, contiiiued to carry OIL the partnership with the assets of the

deceased until the debt of 326~,000 had i~creased to the sum of 3299,943 18s. Id. ; and

prayirtg for an account of all the estate aiid eRe& of the Testittor, whether specifically

hec~~~eathed 0.1’ otlierwise ; and that the personal estate might be reduced into nioney,

and all moneys, the proceeds of the estates, might be paid o%-er to the Clerk of the

Rolls for distribution amongst the creditors of the estate of the Tmtator ; and that

in case the personal estate should be found i x ~ ~ ~ ~ ~ ~ ~ ~ n t , tha t the r e d estate of the

Teetator might also be disposed of, and the proceeds in like manner be paid over for

disti“ibut~oi~, and that the Plain~iffs by virtue of [ZO$] the execution under the decree

of January and February, 1849, might be declared entitled to rank as creditors upon,

the estates, real axid pe~sonal, for the hum of $ 6 0 , ~ ~ ~ . or such balttrice of the e ~ e c u t ~ o ~

us might appear to be due and omixig to them upon the same, and further praying

that the bill rniglit he considered and Lakexi as n cross bill to the original bill of Emily

Tupper.

The Respondent> Emily Tupper, bp her answor to this bill, charged the fact to he

that the nasets of the Company, at the time of the decease of tlie Testator, were inore

tliaa sufficient to discharge every debt and liability of the Conipany to the Appel-

lants, and that the Company did, shortly after the decease of the Testator and long

previous to the Company stopping payment, actually pay off’ and discliarge to the

Appellants’ firm the full a-rnount of every deht and liability whicli the Company owed

to the ~ p p e l l a n ~ ’ firm at, the tima of the Testator’s decease, or were in any respect

liable to them for ; but that the Coxnpany subsequent to the decease of the Testator

had contracted a new debt, with the ~ ~ p p ~ l l a n ~ s ’ firm for a verv large amount, and

-cr-hicXI remained due and owing to the Appellants’ firm at the time the Banking

~ o ~ n p a n y stopped papent , .

A cross bill was also filed by Carre Cook Tupper against the Respondents, the widow

674

~ 3 ~ ~ ~ ~ E ~ E ‘U. TUPPER [1857] XI MOO~E,209

and children of the Testator, the Appellant and others, prayi i3~ that, he might be

declared free and discharged froin all liability ir i respect, of the Appellants’ demands.

Orr the 22nd and 23rd of May, 1856, the decrees the subject of tlie present appeal,

were made by his Excellency tfie Lieutenaiit-(:o.ierror and Chancellor of the Isle of

Man. The material part of the judgment [ZN] in the first of tIie suits declared, that

the ~ e f e ~ d a n ~ , Carre Cook T u p p r , as executor of John Colton Tupper, had made

liiiiisrlf pervonally liable as a partner in the Isle of @an Joint-stock Banking

Coiilpi\Iiy,” in respect of tlie shares previously lreld by John (Solton Tupper, deceased,

111 the Coiiil):iny, tind that he had 110 power to pledge tlie estate of Joliri Colton Tupper

Iwvurid the aiiioiint invested in the shares, and, therofore, that the estate was not

liuble to the de!&+ incurred by the ~ n ~ p a ~ ~ ~ iifter the dmth of the T’mtaror, beyond

t he amount illrested ir? such shares. And tlie Court as also of opinion, that the

debts owing I)y the ~ o m p a n y to the ~ p p e l i ~ ~ i i t s ’ firin at tiis t h e of the deatli of the

Testator nere discharged, arid that, therefore, the arrests laid on the property and

effwts which belon~cd to Johii Colton Tupper under the decree a t tlie suit of the

Appellants’ firm ought to lae rescinded and set aside, and the same was ordered and

decreed accordingly. Decrees were also made in the cross suit instituted by the

Appellants arid Deaco31, and in tlie cross suit insttitutod by Carre Cook Tupper,

whereby the ,111 in each of those suit& was dismissed.

The ~ p p e l l a n t ~ appeaIed against the decree made in the suit of the ~ ~ p o n d e n t s ,

Eiiiily Tupper and others, and in t-he cross suit brought by them, to Her Majesty in

Couwil, which appeal now canie on for healing.

1‘Eie Attorney-General (Sir Eichard Bethell), arid Mr. Simpson, for the Appellants.

-The principal decree of the Court below cannot be sustained ; i t is in itself con-

tradictary, UIifout~dod, and ~ i \co i~s is~~’r i t u ith the rules of law. Three points are

raised by such decree. First, the personal 1ial)ilitp of [ZlO] the esecutor himself for

the debts incurred subsequent to the death of his Testator. Second, tho c o n ~ e q u e ~ ~ t

non-liability of tlie Testator’s esttite for debts due to the Appellants’ firm ; and thirdly,

tlie ertinction of tlie debts due to them by fiubsequent payments since the Testator’r

death, according to the rule laid down in Clayton’s case (in 1leaayiac.s v. Noble, 1 Meit.

576). S o w , we subinit, tliat tlie partnership in the Isle of Man Joint-stock Banking

Conkpitny, which existed atg the decease of Jolin Colton Tupper, the T e s t a ~ r in the

cause, a a s not dissolved by his decease. The ninth secticm. of the deed of the 2nd of

Julp, 1836, provides, ‘‘ that 110 benefit, of s u r ~ r i ~ ~ o r ~ ~ i p shall take place between the

proprietors.” By the covenant8 in this deed, the Testator bound his real and

personal estate to carry on the business of the Bankiiig Company as a coIitin~iing

partnership until his execut>or should sell Lis shares, o r lie or his legatees should

personally become proprietors, neither of ~ ~ l i i c h events took place. The effect,

therefore, was, that until there xas such a transfer and re~is t ra~ioxi , his liability

continued, and the debt8 of the Cort~pany, as provided by section sixty, beeanie a

cltarge on his estate. According to the true c(~iistruction of tlie Testator’s Will,

Carre Coolr Tupper, as executor, hild power to pledge or render liable the whole of

the Testator’s estate, personal as well as real, in carrying on tlie businem of the Bank-

ing Coiiipaiig after the decease of the Testator ; and this he, did. The Appellaiits

had a riglit, therefore, t o treat, the e cutor as stailding in the place of the Testator. ;

since, by virtue of the deed and W together, he had power to pledge the estate.

That eatate, iit fact, stood in relation to the liabilities of the Conipany in the pliice

of tho Tertator‘s [Zll] person, and was bound by the saiiie cocetiants and dealings as

his person would have been. Such a covenant in the deed of partnersliip is valid by

tlie law in force In the Isle of &fan, though it may be doubtful mhetlter by the la.rir of

England there could be such a thing as ii continuous chain forriled of a series of

persons liable to the debts of the concern.-[The Lord Justice Turner: Wllat

kiud of debts form %t charge upon real estate 1-y the taw of the Island $]---Descended

land ix not a p p l i ~ a ~ l e , but purchased land after the personal estate is exhausted is

1ial)le to the payment of debts. The English a~it~iorit ies do not strictly apply, but;

thev illustrate the principles involved in this case. In Esp. Garland (lo Ves. rlo),

and Ebp. Richardson (3 Madd. 138), the powers arid liabilities of an execrutor

in regitrd to questions of partnership i s fully discussed. The re by a dwd of a

Companv it waR to continue for forty years, and it, was provided that tho shareholders

should not be discharged except by the substitution of other a~a reho lde r~ , the

675

XI MOORE, a12 LABOUCHERE E , TUPPER [ 18 5 71

erecutors of a deceased shareholder were held liable to the debts of tlie partiiersliip,

iiotwitlistanding that the formalities required I J ~ the deed had not been observed in

the substitution of tlie executors, so as to entitle them to participate in the profits,

Erp. Blakeley’s Executors’ case ( 3 Mac. and Gor. 726), Straffon’s F,\ecutors’ case

(1 De Ges, Mac. and Gor. 5761, Elp. Mayhew (1 Jurist. S. S. 566). It is iiilpossible

for tlie Respondent8 successfully to coiiteiid that the Testator’s estate as not bound

by the covenants during the continuance of the partnership and by the dealings of

the Company, whether in, his lifetime or after his death. The sixtietli section of the

detd provided [212] that he should continue 80 bound until the shares Tvere trans-

ferred to another, capable of undertaking and fulfilling his engagements ; and until

some other person was bound in solzdo t o tlie same extent of responsibility as the

released shareholder had been, liis estate is liable.--[The Lord Justice Knight Bruce :

Is there any case in wliicli a partner hiis engaged for the liabilities of the other

partners for all time ?]-Yes. I t is true that

is a Scotch case, but Lord Redesdale treats it on the same footing as an Eirglisli case.

Then as to the remaining point, the eltinction of the debt existing a t tlie time of the

death of the Testator by subsequent payniants. That par t of the decree cannot be

sustained with regard to an accouiit in wliicli a distinct rest was made at the time

and a balance struck. According to that

case, an appropriation of papnieiits TT as niade first, rrd ?r,oduun/ solventis, and if not,

then secondly, ad n/oclum a c r i p e n t t s , but if both omitted t o make any appropriation,

then the law applied it to the oldest debt. Hu t here the stopping of the account and

the intervention of new particb left no rooin for that rule. The case on the other side

IS, that all that happened subsequelit t o tlie Testator’., death was 1 e\ / n f c v nlzos acta;

but, if so, liow could anything subsequently aririiliilaie the balarice struck at the time

of the death ? The rule of law upon this point is clear, Pe’mbel’toTL r. Orrkes (4 Russ.

154), S L I I ~ S O I L 11. InghanL ( 2 Bar. and Cr. (Xi), BodenJicrm v. Z’urchms ( 2 Bar. and Ald.

39). The decree is contradictory and uiLfounded, as the estate of tlie Testator was

liable for tlie debts due to the Appellaiits’ firm as ne11 at the time of his death as also

for the moneys tlie Appellants afterwards made [213] themselves liable and paid f o r

the Conipany. Ttie decree of the Court below 111 1829, eatablislied our right, and

entitles the Appellants to succeed in tliis appeal. Lastly, the suit of tlie Respondents

was not accordiiig to tlie inode o l proceeding i n tbt Islaiid.

Mr. R. Palmer, Q.C., and Rfr. Cotton, for tlie Respondents.-The principles of

tlie law of partnership, recogiiixed by the Manx law, are the same as the law of

England. The

claim of the Appellants against the Testator’s eslate arises out of transactions

entered into between their firm and the Isle of Man Banking Company subsequently

t o the death of the Testator. The stoppage of tlie Bank was upwards of tliree years

after the Testator’s death; and we contend, that the debt which subsisted at the

time of his death was liquidated by subsequent payments made to tlie Appellants’

firm. Clayton’s case (I Mer. 576), Waruxick v. RicJm-dson (14 Siiii. 2Hl), Uodenhanl

T’. I’u7-cJias ( 2 Bar. and Ald. 3 9 ; see also Hennlker xi. T%gg (4 Q. Ben. Rep. 792).

The case of I’emberton v. Oakes (4 Russ. 154), relied upon by the Appellants, is

distinguishable from the prescnt. 111 that case i t was the guarantee of an old

debt, and the question lliere was, whether the existing debt was a11 old d&t or a

new one. The Appellants adniit that they did not know who were the sliareholders

except from the list furnished them. They, therefore, were not induced by ally

knowledge of the estate of the Testator to give credit. Let us see lion the case

stands with regard to the executor. The Will does not authorize liim to contiilue

the partnership, or to [214] employ the Testator’s assets in conducting its affairs.

How then can the Testator’s estate be made answerable to the Appellants’ firnl 111

respect of the claim made by them on the Isle of Man Banking Company? Tile

authorities show that where a Testator has authorized his erecutor to carry 011 a,

partnership, the executor, if he doe3 so, undertakes an unlimited persolliL1 liability.

Bxp. Garland (10 Ves. 110), Wi!/htnmn v. Townuwe (1 Mau. and Sel. 412). An

executor can pledge the partnership property of his Testator, but his own personal

liability is not indemnified. The fallacy of tlle argunient of the Appellarits is in

mixing up the different engagements of Carre Cook Tupper, wlietller on his own

behalf or as executor. Upon the Testator’s death he became the sole holder and pro-

676

WarnPr v. Czcnw?nghnm (3 Dow. 76).

Tlie rule in Claytoii’s case does not apply.

The case was argued in the Court below upon English authorities.

LA^^^^^^^^^^^ v. ~ U P ~ ~ R [la571 XI ~ O O ~ E , 2x5

prietor of the shares be~ongiiig to the Testator, and, therefore, indi~.idually liable

111 respect of such shares, and this would constitute an effectual transfer of tlie

shares held by the Testator, so as to relieve the estate, even as against his surviving

partners in the banking c o - p a r t ~ e r s ~ ~ ~ p , from all l ~ a b i l i t ~ in respect of those shares.

A plea of plme ~ ~ ~ ~ z ~ ? ~ ~ ~ ~ r ~ a i ~ ~ at law could not be sustained by evidence that the

whole estate of the Testator had been disposed of to meet partriership debts

incurred after the Testator’s death. In cases under the Winding-up Acts, it has

been held to be in~~nater ia1 whether the party ’iyas Iiable to creditors or not, for

that was m s in t e r alias. As regardci

shareholders, the case cannot be carried higher. If there was B contract that must

be specifically performed, if i t is brokeii, then daniages could be sued for the breach,

f l o i r v ~ ~ v. Collilwr (6 Hare, 418). Such a stipulation as is contained in [Z15] thio:

deed of partnership, requiring the substi t~~tion of anotl~er s~~arel~older , has already

been the subject of judicial decision, and i t had been held that it is not to be eon-

sidercd as a subsisting and continuitig partnership. liTetd?arci v. &zfattliews (2 Russ.

62). If another partner was substituted, he niight be liable; but, if not, as in this

case, third parties have no claim against the Testator‘s estate for debts subsequently

incurred. Co-partners might have a claim for damdges for no~~”performance of

the covenant, Bxp, Blakeley’s E ~ e e w t o r s (3 Mac. and Gor. EX), but a stranger

eaniiot sue on another’s contract. ~ ~ e ~ d e l v. Tuseddel (2 Bro. C.C. 152), Walters

v. The Nor thern Coal Minimg ~ o ~ ~ ~ y (5 De Gex, Mac. and Gor. 629).+The Lord

Justice Knight Bruce: The contention of the Appellants is, that the sale under the

Testator’s Will could not take place till after the stoppage of the Bank.]-At,

executor under the Will he had no discretion. He was bound, within a rensorinble

time, t u convert these shares. fiirhlzciia v. Bootli (11 Beav. 273) , Cafe v. Bent (5

Bare, 24). The co-partners, if they haw any claim at all, could only call for a

rateable contribution. At any rate, if the Appellants could show that their claims

arose in respect of a debt due a t the t h e of the Testator’s death, their neglect for

so long in bringing forward a claim against the Testator’s estate is af itself a legal

and equitable defence to the suit ltrought by the A p p e l ~ a ~ t s .

The Attorney-General [Sir Richard Wethell], in reply.-The Testator’s estate

must be held liable to the Appellants’ claim. It is evident, froni tlie directions in

the Will, tliat the Testator contemplated tha t his @16] executors would carry 0x1

his interest in the banking business, and he threw upon them the obligation of

becoming eo-partners in the tfank. An executor might be a partner under an

obligation incurred in the Testator’s lifetinre, and if he hewine a partner his

liability as executor necessarily followed. He is, in this case, not only lialde

himself, but his Testator’s estate is made liable. Tlie executor, on the death of the

Testator, mas bound to give in his name in connection with the shares, or the

estate would not have been benefited by the dividends accruing due. The

Directors had power to call upon him to execute the deed, or forfeit the shares. It

is clear, by the sixtieth section, that the Directors could not refuse ~ e ~ i s t ~ r i i ~ ~ his

name. The casw cited show tha t a n

executor is Iiable as between himself and his eo-partners, and that be is a con-

tributory in respect of the dealings subsequent to the death of the Testator.-[Tlie

Lord ,Justice Knight Bruce : As executor lie iniglit have rejected the slimes, but he

would have rendered himself liable to an action for daniages.]--I do n o t dispute

tha t an executor might so refuse and take the consequences, but the means that h a w

here been resorted to, and the defence set up, is such, that it deprives the ~ p p e l l a ~ ~ t s

of the means o f recovering their debt against the Testator’s estate, and is founded

in fraud; the executor, who is worth nothinz, has coffuded with the parties interested

under the Will.

Dodgson’s case ( 3 I)e Gex and Sni. tis).

That circumstance concludes the question.

Judgment was delivered by

The Lord Justice Enight Bruce (June 57, 1859).-This appeal tias been argued

on each side, upon the supposition that there is no difference between the law of

England and that of the Isle of Man as to the [217] principles and rules applicable

to the particular questions between the parties; and it seems to their L ~ r d s h ~ p s

reasonable and right to believe that no such difference exists. The first point in

dispute is, whether the debt which, at the time of the death of John Colton Tupper,

677

XI MOORE, 218 LABOUCHERE w. TLJPPER [1857]

in January, 1840, was due to the Appellants’ house of business from the Joint-

stock Banking Company, called “ The Isle of Man Joint-stock Banking Cornpany,”

the Company constituted and intended to be regulated by the deed of the 2nd of

July, 1836, and the memorandum of the 22nd of August, 1837, and the liabilities

under which that Joint-stock Company was to the Appellants’ house, a t John Colton

Tupper’s death, were paid and discharged before the stoppage and failure of that

Joint-stock Company in August, 1843; and their Lordships think it plain, that

this point must be decided against the Appellants, namely, that the payment and

discharge just mentioned must, upon the materials before their Lordships, be

deemed to have taken place (as to principal and interest) before August, 1843. The

Appellants’ answer to the bill filed by the Respondent, Tupper, contailis these

passages :-“ And these Defendants further severally answering say, that the debt

which was on the day of the death of the Testator, namely, on the 22nd of January,

18.10, due to these Defendants, arid Robert Williaiiis the elder, another Defendant

t o the Bill, and now deceased, from the partnership Joint-stock Compaiiy, of which

tlie Testator was a partner, consisted of the sum of 215,267 17s. 3d., but that, at

the time of the decease of the Testator, these Defendants, together ait l i Robert

Williams the elder, had accepted bills drawn upon them for and on behalf of the

Joint-stock [218] Company to the amount of 245,000, and which bills then out-

standing, were, after the decease of John Colton Tupper, paid by these Defendants

and Robert Williams the elder, new deceased; and these Defendant,s further

severally answering, say they (together with Robert Williams the elder, siince

deceased) during his life have, since the decease of the Testator, received moneys

for and on account of the Banking Company, to the amount of 21,100,000, and

upwards, but the same comprises the amount of the credit side of the account

between the Banking Company and these Defendants, and Robert Williams the

elder, from the 22nd day of January, 1840, without taking into account and with-

out deducting from such credit side, or from the amount of such credits, any sum

or sums f o r advances, or for any other debt, demand, or claim, charged by these

Defendants, or by them and Robert Williams the elder, now deceased, against the

Joint-stock Banking Company since the 22nd of January, 1840. But these De-

fendants further severally answering say, that during the period of the receipt of

the moneys by these Defendants and Robert Williams the elder, they paid and

advanced moneys on account of the Joint-stock Bankiiig Company, and there always

continuously remained very large balances due and owing from the Joint-stock

Banking Company to these Defendants and Robert Williams the elder, notwithstand-

ing the aforesaid receipts. And these Defendants submit whether, under the circum-

stances aforesaid, the debt, which was up to and a t the time of the death of the

Testator due to these Defendants and Robert Williams the elder, from the partner-

ship Joint-stock Company, was or was iiot entirely or otherwise [219] reduced o r

discharged by payments made to these Defendants and Robert Williams the elder,

subsequently to the decease of the Testator, by the survivors of the partnership,

and whether in fact all or any part of such aforesaid debt had or had not been long

since or otherwise paid or satisfied. And these Defendants further severally

answering say, they have heard and believe that Carre Cook Tupper, after the

decease of the Testator, continued according to the terms of the co-partnership

deed, t o carry on with the Testator’s share of the capital of the bank which existed

a t the time of the death of the Testator and with his other assets, in conjunction

with the surviving partners, under the style or firm of “ The Isle of Man Joint-

stock Banking Company,” but not as a new partnership, but as a continuation of

the old partnership. And these Defendants further severally answering sap, that

after the decease of the Testator, debts to a very large amount were contracted by

the continuing partnership with these Defendants and Robert Williams the elder,

since deceased; and that such continuing banking partnership carried on by Carre

Cook Tupper, and the other surviving partners as aforesaid, stopped payment on

the 14th day of August, 1843, and has not resumed payment.

There is not any reason or ground on which, as it appears to their Lordships, i t

can be reasonably suggested that a sufficient amount of the receipts of the Appel-

lants’ house on account of the Joint-stock Company between the death of John Colton

Tupper and the sto’ppage, ought not, according to the regular and ordinary course,

678

LABOUCHERE v. TUPPER [ 1 8 5 71 XI MOORE, 220

t o be ascribed to the debt and liabilities existing a t the former period. Then comes

the question, whether the Appellants, in respect of the debts E2201 which became

newly due to their firm from the Joint-stock Company after the death of John

Colton Tupper (I mean of course debts not connected with any liability that existed

in his lifetime), have a right of recourse against the assets of John Colton Tupper ;

the same right in effect as they would have had for the debt due a t his death had it

not been discharged. The Appellants assert the affirmative of this proposition,

upon the ground that Carre Cook Tupper, the only acting executor of John Colton

Tupper, did in that character, upon and from his death, claim the shares in the

Conipany which he held; that this claim, this title, of Carre Cook Tupper, was

recognized by the directors of the Company, and that accordingly in that character

he received the dividends which, between the death and the stoppage, were declared

on the shares, under the forty-sixth clause of the deed, there having been no transfer

of any of the shares after the death, but the shares having been uniformly from the

death treated by the executor and the Directors as belonging to the executor in that

character. It is certainly, we apprehend, true, nor is it denied on either side, that

Carre Cook Tupper became personally liable as a partner in the Company to the

Appellants’ house in respect of the dealings subsequent to John Colton Tupper’s

death, and that Carre Cook Tupper would, by the course of conduct that has been

inentioned, have made himself so, even if he had not been, as he was, a shareholder

in his own right, independently of John Colton Tupper’s shares. It may possibly

likewise be, though we do not assert it, that the assets of John Colton Tupper are

liable to the Company, or to Carre Cook Tupper, or to both, in respect of J o h ~

Colton Tupper’s shares, by reason of the partnership [221] deed, and the trans-

actions and course of dealing subsequent t,o his death. But any such consideratioii

beenis to their Lordships not, for any present purpose, material. The question is,

whether the debt and liabilities to the Appellants’ house existing a t John Colton

Tupper’s death having been satisfied, the Appellants can come upon his assets as

creditors by reason of the shares held by him, and of what took place after his

death; and their Lordships’ opinion is, that, whatever the construction of the

partnership deed may be, and whatever the t rue interpretation of his Will, they

cannot. ‘\I

If it was competent to Carre Cook Tupper t o charge.the assets in their favour,

no such thing was done. The fact tha t he traded or dealt with the Appellants’

house as executor and also in his own right, had not the effect of creating such a

charge, nor is it material tha t all John Colton Tupper’s property, actually placed

or invested in the Joint-stock Banking business, must probably be treated as lost,

and that the separate estate of John Colton Tupper has not claimed, nor does, nor

probably can, claim, anything from the joint estate.

The executor of a trader carrying on the trade after his death, though doing so

avowedly in the character of executor, is nevertheless personally liable for all the

debts contracted in the trade after his death, whether he is entitled, or not entitled,

to be wholly, or to any extent, indemnified by the Testator’s personal estate, and

whether it is sufficient, or insufficient, for the purpose; nor does the propriety of

his conduct, as between himself and those beneficially interested in the Testator’s

personal estate, give the creditors of the t rade becoming so after the death, [222]

the rights of creditors of the Testator. It being immaterial also, as far as they

are concerned, whether the Testator, if he had a partner, was bound by a covenant

with him, that his (the Testator’s) executors should continue the t rade in partner-

ship with the surviving partner. The latest authorities on the point are, we

conceive, to this effect, and appear to their Lordships preponderant and correct.

A sufficient nuniber of these authorities, including Ezp. Galhnd (10 Ves. 110), Esp.

Richardson (1 Madd. 138), and Wightman v. Townroe (1 Mau. and Sel. 412), were

cited at the Bar during the ar, wment .

The terms of the decree in the principal suit, that in which the Appellants are

Defendants, might perhaps, without impropriety, receive some alteration, but

substantially that decree seems to us to be, as well as the dismissal of their bill,

right.

It was argued that the decree of January or February, 1849, of which execution

was awarded on the 10th of March, 1849, entitled the Appellants to success in the

679

XI MOORE, 223

present appeal. The state of the parties to

the suit in which that decree was made, and the nature of the cause, rendered the

deeree, in our judgnient, of no avail against the suit of Emily Tupper and others,

in which the principal decree now under appeal was pronoanced. It has been

contended also, that, whatever the merits. there was not a right, according to the

proper course of judicial proceedings in the Isle of Man, to institute such a suit

against the Appellants. We think, however, that the Appellants had taken such

p r o c ~ d ~ n g s and so acted as to expose t h e n i ~ e ~ v e ~ to the suit, and that it was regularly

and properly instituted against them. The arrests of the [2:2233 estate of the Testator

in 1843, were of themselves enough for the purpose. As there must, we thinkk,

substantially a t least, if not formally also, be a dismissal of the appenl, the Appel-

lants, in their Lordships’ apinion, ought to pay the costs of it.

[Mews’ Dig. tit. EXECUTOR AND ADMINISTRATOR, X. ADMINISTRATION, c. 2.

Debts ~ e n e ~ u ~ y , (b.) A c e r i d since death, 6. C d L on s h r e s , c. C a r r y k g 0% tk.6

tra& of the dereased; Lit. ISLE O F MAN, 2. LEGISLATURE, Laws, AXI) C~JSTOMS.

S.C. 5 W.R. 191.

f3OARDMAN V. QUAYLE [ 1 8 571

That, however, is not our opinion.

See ~~~~c~~~~~ v. Sy7nom, 1884, 26 CbD. 248.1

ON APPEAL FROM TEE COURT OF C ~ A ~ C E ~ Y OF TIIE ISLE OF MAN.

ROBERT E ~ A R ~ M A ~ and THOMAS ~ ~ I ~ O ~ , - ~ ~ ~ ~ ~ ~ ? ~ ~ s ; MAltK ~ I E S L E ~

QUAILE and RICHARD QlJIRIi,-Respnde~tts * [June IS, 1x571.

After the passing of tho Manx Act of Settlement, 4th of February, 1703, the

Act of Tynwald of the 24th of June, 1645, which rendered the consent of

the Lord of the Manor of the Isle of Man necessary to alienation by a tenant,

was, although not expressly repealed, no longer in force in the Island ; and

under the provisions of the Act of Settlement, a tenant of the Manor became en-

titfed, upon payment of the proper fine, to alienate Iaiids without the consent

of the Lord [ll Moo. P.C. 264, 2651.

A mortgage i s not void.hy the 5th section of the Act of Settlement of 1703, if

the mortgagee does not come in to be admitted. Quaere. If by the provisions

of the 11th section of that Act, i t can operate so as to subject the niortgagee

to the payment of a fine to the Lord [11 Moo. P.C. 2651.

There is a distinction between the “ Reeords I’ and the “ Court Rolls ” mentioned

in the 5th section of the Act of Sett~ement of 1703 [11 Xoo. P.C. 2661.

The Provisions of the 11th section of the Act of Settlement of 1’703, as to change

of tenants, are not confined to changes by alienation only, but appIy to

changes by death. [I1 Moo. P.C. 2661.

A grant by a tenant, of customary land and premises is not invalid by reason

of the grant being made in favour of t w o or niore persons. Therefore,

where a deed in the nature of a mortgage, Bond and security, charging

customary lands and premises in the Island, was made to two persons, it was

held, that it was not void on that account, although one person only could be

admitted upon it [ lI Moo. P.C. 264-51.

A., a licensed Banker in the Isle o f Man, executed a security, in the nature of a

deed of mortgage, Bond and security, of customary freehold lands belonging

to him, to certain ~ o v e r n m e i ~ t officers, conditioned to secure payment, by

him and his partners, 13. and C. (inembers of the Banking firm), of notes to a

specified amount to be issued in the Island under licence of the Government.

Two of the partners died subsequently, at different periods, and frmh licencee

were renewed in the names of the suryivors, for further issues, but under the

original deed of security. The effect) of such security on the notes so

* Present: The Right €Ion. Dr. bushington, the Right Hon. The Lord Justice

b i g h t Bruce, the Bight Eon. The Lord Justice Turner, and the Right Ron. Sir

Jabn Pal tason.

680

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