1869. Jan. 22.

DICKSON V. THE NEATH AND
BRECON RAILWAY COMPANY.

Practice Examination of Judgment Debtor-Corporation-Directors.

The Court has no power, under section 60. of the Common Law Procedure Act, 1854, to order the directors of a railway company against which judgment has been obtained to be orally examined as to debts owing to the company.

In this case, judgment having been obtained against the defendants, an application was made at Judge's chambers to a Master of this Court for an order for the oral examination of some of the directors and the secretary of the company, under section 60. of the Common Law Procedure Act, 1854.

That section is as follows: "It shall be lawful for any creditor who has obtained a judgment in any of the superior Courts to apply to the Court or a Judge for a rule or order that the judgment debtor should be orally examined as to any and what debts are owing to him before a Master of the Court, or such other person as the Court or Judge shall appoint; and the Court or Judge may make such rule or order for the examination of such judgment debtor, and for the production of any books or documents, and the examination shall be conducted in the same manner as in the case of an oral examination of an opposite party before a Master under this act.'

The 50th and 51st sections of the act, which relate to discovery and interrogatories respectively, provide for an officer of a body corporate making an affidavit, when such body is a party to the action.

The application having been referred by the Master to the Judge at chambers, and by the Judge to the Court,

Gates, for the directors, shewed cause in the first instance, and contended that the Court had no power to make the rule or order asked for; and that the fact of the legislature having expressly provided for the cases of corporate bodies in sections 50. and 51. of the act shewed that the matter was present to their minds; and that a corresponding power was purposely withheld in the 60th section.

[CLEASBY, B.-A corporation might be a "judgment debtor."]

NEW SERIES, 38.—EXCHEQ.

But the individual directors do not come within the term "judgment debtor." The corporation is the party, and the party ought to make the affidavit--Christopherson v. Lotinga (1).

Bridge appeared for the secretary, but was not heard.

J. O. Griffits, in support of the rule.-In the 50th and 51st sections a special provision is introduced to enable the corporation to put forward their secretary, or some officer other than the directors or the shareholders themselves. And the authorities are in the plaintiff's favour, as they shew that the Court will interpret those sections liberally; ex. gr. they will not insist on the affidavit being made by a party to the proceeding-Kingsford v. the Great Western Railway Company (2) and Lacharme v. the Quartz Rock Mariposa Company (3). In the latter case the directors seem to have been regarded as the judgment debtors. Why should not all the shareholders be regarded as debtors, and be examined as in the case of an ordinary partnership? The Court has only to decide which of them, or their managers, shall be selected for examination. He also cited Hartley v. Shemwell (4) and Kennett v. the Westminster Improvement Commissioners (5).

KELLY, C.B.-I am of opinion that this rule should be discharged. The 60th section of the Common Law Procedure Act, 1854, enables a creditor, under certain circumstances, to examine his debtor as to the number and amount of his debts. We have to consider whether it is possible to apply this provision to the case of a corporation. If we were to make the order against any of the directors, it would be to assume that the directors against whom that order was made are defendants in the action. They are not defendants in the action. The words of the act are that the Court may make an order "for the

(1) 15 Com. B. Rep. N.S. 809; s. c. 33 Law J. Rep. (N.s.) C.P. 121.

(2) 16 Ibid. 761; s. c. 33 Law J. Rep. (N.S.) C.P. 307.

(3) 1 Hurls. & C. 134; s. c. 31 Law J. Rep. (N.8.) Exch. 508.

(4) 1 Best & S. 1; B. c. 30 Law J. Rep. (N.S.) Q.B. 223.

(5) 11 Exch. Rep. 349; s. c. 25 Law J. Rep. (N.S.) Exch. 97.

I

examination of such judgment debtor." If it were possible to administer an oath to a corporation, no doubt, under this clause, the corporation would be the judgment debtor, and the order might be granted. But an oath cannot be administered to a corporation. Then it is said that some officer may make it. We find that in the 50th and 51st sections of the very same act there is power given in the cases of discovery and interrogatories to require the officer of a corporation to answer on affidavit on behalf of the corporation where the corporation is a party to the suit. But there is no such provision found in section 60. Therefore it would be to usurp the functions of the legislature itself were we to make such a provision apply to a corporation by inserting words in the clause of the act. If such an order as this were to issue, and any directors against whom it was issued were to swear to anything that is false, the question would arise whether an indictment would lie. I think if the legislature had intended to apply this power to a case of this nature they would have introduced words similar in effect to the words which we find in the 50th and 51st sections; and we cannot, finding no such words, insert them in the act. Consequently, I think the application fails, and the rule must be discharged.

PIGOTT, B.-I think it very likely the members of the legislature had in their minds the distinction between an individual and a body corporate when they were passing this section, because "judgment debtor" might no doubt apply to a corporation. The words "judgment debtor" there are used without limitation or restriction, and the section goes on to say that the judgment debtor shall be orally examined. It must be manifest there is no way of examining a body corporate. No doubt, if it was intended that there should be the same remedy against a body corporate as against an individual, the corporation, not being itself capable of examination, might be represented for this purpose by an officer; but I should have expected to find it expressly mentioned, as it is in the 50th section. But I do not think it competent to us to supply it. It may, for anything I know, have been in the mind of the legislature to make the distinction, and there may be

reasons why it should be made. In the case of an individual, the thing you want to know is, who owes the debt to the individual debtor. That is the thing contemplated by the 60th section, and that may be a secret matter which the opposite party might have no means of finding out; but in the case of a body corporate it might not be so difficult. I do not know how that may be; but, be it as it may, it seems to me that the legislature has not given machinery under which in the ordinary course a body corporate can be examined; and the legislature not having done that, we cannot say that the directors shall be bound to answer questions on oath, and shall be liable to attachment if they do not obey. That would be usurping the functions of the legislature.

CLEASBY, B.-I am of the same opinion, and for the reasons given by the Lord Chief Baron. I think, in order to enable us to make this order, we should require an additional interpretation clause.

CHANNELL, B.-I confess I have some doubt in this case. I desire always to give a very liberal interpretation to the construction of most, if not all, the provisions in this act; but I agree that we cannot make it applicable unless the section gives us power: although I am by no means sure that, if we made the order applied for, we should not be doing what would be beneficial.

Gates and Bridge applied for costs for their respective clients.

KELLY, C.B.-If the rule had been granted I do not see that we should necessarily have given costs; but as you appear here voluntarily to shew cause in the first instance, we certainly cannot give costs. Rule discharged.

Attorneys-Vizard, Crowder & Co., agents for J. Kempthorne, Neath, for applicant; Dean & Taylor, for the secretary; Ashurst & Morris, for the directors.

The difference is that the person who signs the Bank of England note has power to bind his principals, whereas the secretary

Plea, that the defendant did not make the note. Issue thereon.

At the trial, before Martin, B., at the Middlesex Sittings after Michaelmas Term, 1868, the only material facts proved were, that the note was signed by the defendant by authority of the directors, in respect of a loan advanced for the benefit of the Mistley, Thorpe and Walton Railway Company, and that the directors had no power to bind the company by bills or notes.

A verdict was entered for the plaintiffs, with leave to the defendant to move for a nonsuit, or to enter the verdict for him.

A rule having been obtained accordingly, H. Matthews and Joyce shewed cause for the plaintiffs.-The directors having no statutory powers to bind the company by giving bills or notes, the company is not liable on the note-Bateman v. the Mid Wales Railway Company (1); and apart from that, no words at all binding on the company are used in the note; so that, if the secretary be not personally liable, the instrument is of no effect whatever.

[KELLY, C.B. referred to the common form of the Bank of England notes.]

(1) 35 Law J. Rep. (N.s.) C.P. 205.

In Leadbitter v. Farrow (2) the agent of a country bank was held personally liable under somewhat similar circumstances. So were the directors of a company in Healey v. Story (3); the pursers of mining companies in Nicholls v. Diamond (4) and Mare v. Charles (5); and the agents who entered into a charter-party in Lennard v. Robinson (6). They also cited Goupy v. Harden (7).

Philbrick, in support of the rule.-The question is, what was the intention of the parties as appearing on the face of the instrument itself? It is clear that the secretary's signing was a mere ministerial act, especially when considered with reference to the fact that the money was carried to the credit of the company. The fact of the company not being liable is no reason why the defendant should be personally liable, if he never made a contract on which he was intended to be liable. The case is in principle undistinguishable from Lindus v. Melrose (8), and is supported by Aggs v. Nicholson (9), and also (when the grounds of the judgment are fully considered) by Nicholls v. Diamond (4). Again, the common form of the Bank of England note ought to be decisive of the question.

KELLY, C.B.—I am of opinion that this rule should be made absolute. The question before us is whether the defendant in making and signing this note has made himself personally liable-in other words, whether it is the note of the defendant himself per

(2) 5 M. & S. 345.

(3) 3 Exch. Rep. 3; s. c. 18 Law J. Rep. (N.S.) Exch. 8.

(4) 9 Ibid. 154; s. c. 23 Law J. Rep. (N.S.) Exch. 1.

(5) 5 El. & B. 978; s. c. 25 Law J. Rep. (N.S.) Q.B. 119.

(6) Ibid. 125; 8. c. 24 Law J. Rep. (N.S.) Q.B. 275.

(7) 7 Taunt. 159.

(8) 3 Hurls. & N. 177; s. c. 27 Law J. Rep. (N.8.) Exch. 326.

(9) 1 Ibid. 165; s. c. 25 Law J. Rep. (N.8.) Exch. 348.

sonally or the note of the company. Now, when we look to the terms of the note itself, it is really impossible to entertain a doubt on the subject. If this had been a note or contract by the defendant himself, formed upon some consideration moving from the plaintiffs to him, it would have been in the ordinary form, and would have been signed John Sizer, and no more. As it is, although it undoubtedly begins "I promise to pay," yet we find that it is signed "for the Mistley, Thorpe and Walton Railway Company, John Sizer, Secretary." Now, unless this was intended to be the note of the company, on what conceivable ground is the title of the company here introduced, and why does the defendant sign in the capacity of secretary to that company? No. one can entertain a doubt, whatever the legal effect, that it was signed by him in the capacity of secretary, and that he intended it to be the act of the company for their benefit, done by him as their agent and on their behalf. Then let us consider it from the other point of view. It is said that we cannot treat this as the promise of the company, because it is framed in the singular number; but I know of no other form in which a note signed by a single officer, the secretary of a company, can be framed or expressed in the body of it, and I cannot help, on this point, referring to the notes of the governor and company of the Bank of England. They are exactly in this form, with one exception, which is altogether in favour of the defendant. They run thus: "On demand I promise to pay," and so forth, "the sum of 51. for the governor and company of the Bank of England,” signed by one of the officers, but without any description of that officer. And here not only is that form pursued, but after the signature of the defendant we find "secretary." Therefore it makes it a stronger case than the note of the governor and company of the Bank of England. I think, therefore, this note was intended to be, and must have been understood to be by the parties, the note, obligation and contract of the company alone, although it is signed with the name of the defendant, he describing himself as secretary of that

company.

We are pressed by the authority of several cases, and the first is the case of

Leadbitter v. Farrow (10). That was a case in which there was a bill drawn and signed in the ordinary way and addressed to Messrs. Wetherell & Co., bankers, in London, and calling on them to pay forty days after date to the order of the plaintiff, the sum of 50l. for value received. If the instrument had stopped there, nobody could raise a doubt that it was a bill drawn by the plaintiff, payable by the defendant, and the defendant was liable on it; but then follow the words, "which place to the account of the Durham Bank, as advised.” How does that affect the legal meaning or obligation contracted by the person? Merely thus: I, the drawer of the bill, call on Messrs. Wetherell & Co. to pay to Leadbitter, the sum of 50l.; only I add to that direction the account to which that payment is to be placed. There is no doubt this authority is not in favour of the plaintiffs in this case, more especially when we look to the language of Lord Ellenborough, C.J., who says, "Is it not a universal rule that a man who puts his name to a bill of exchange thereby makes himself personally liable, unless he states upon the face of the bill he subscribes it for another, or by procuration of another, which are words of exclusion?" Here it is a note, and not a bill, and the defendant expressly signs for the company, with the further description of himself as secretary, that is, secretary to that company.

Again, in Healey v. Story (11) the promissory note was worded in a form which really removed all doubt. It was signed by two persons certainly for or on behalf of the newspaper company; but the note itself made these two persons liable. It was in this form: "We jointly and severally promise to pay for the newspaper company." That necessarily made it a personal obligation of those two persons and of each of them, because it was impossible that it could have been the intention of the parties, or could have been so understood by the payee of the note, when it was the joint and several contract of those two persons, that it was really to be not the note of the individuals themselves, but of the newspaper company.

(10) 5 M. & S. 345.

(11) 3 Exch. Rep. 3; s. c. 18 Law J. Rep. (N.S.) Exch. 8.

It was impossible that the newspaper company, by a note of this description, could make themselves jointly and severally liable, so that each member of the company might be sued severally on this instrument.

Those are the only two cases cited for the plaintiffs which have any bearing on this question. The others were cases of bills of exchange, in which the action was brought against the acceptor of the bill, drawn on an intended acceptor, and payable to some payee named in the body of the bill; and in all those cases, although the acceptor might, as in the first case, accept by procuration, the rule of law prevails that where a bill is drawn on a man who intends to become acceptor, and he does become the acceptor, he cannot vary the contract by describing himself in any particular character, whether as agent of a company or anything else. He becomes acceptor according to the tenor and effect of the bill as drawn; and if it be drawn only on him in his own person and on his own liability, his acceptance makes it his personal contract; and it cannot be varied by any description or by anything but express words of exclusion from what would otherwise be the operation of the bill; if there be any words of that kind it is, in point of law, no acceptance at all. The bills in these cases referred to were all drawn upon the intended acceptors in their own personal character, who could not by any description which they might attach to themselves vary or affect the liability which they took on themselves by their acceptance according to the usual custom of merchants.

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But when we come to the cases cited for the defendant, I feel quite at a loss to distinguish this case on principle from Lindus v. Melrose (12). There were the words " jointly promise to pay," and that was signed by two persons. Prima facie that was a joint promissory note by those two persons, who, in their own character and capacity and upon their own liability, contract an obligation personally; but it appeared that in the note were the words " on account of the Birmingham Hardware Company," and that was held to shew

(12) 3 Hurls. & N. 177; 8. c. 27 Law J. Rep. (N.8.) Exch. 326.

it to be a promissory note which they did not sign in their own personal character, but as agents and on account of the Birmingham Hardware Company, and which was intended to be the company's note, and not the note of the defendants. Aggs v. Nicholson (13) is much to the same effect. That was undoubtedly a much stronger case than the present, because the defendants there clearly, in the body of the note, described themselves as acting on behalf of the company. Here, in the body of the note, nothing appears but that which would impose the liability on the defendant himself; but still, when we take, as we must, the whole of the note together, we find from the introduction of the name or title of this company, and the signature affixed to the note being the signature of the defendant only in his character and capacity of secretary, that it was made by him in his capacity of secretary of the company for them, on their behalf, and on their account. Under these circumstances-and I am glad this is in strict accordance with the true merits and justice of the case-I think that the defendant is not liable in this action, and consequently the rule to enter a nonsuit should be made absolute.

PIGOTT, B.—I by no means say this is not an arguable question or one altogether free from doubt; but in the result I come to the conclusion expressed by my Lord. I do not intend to throw the slightest doubt on the law as laid down in Lindus v. Melrose (12). There is no doubt that it is the true law on this subject, that if a man sign his name to a bill of exchange or promissory note, he is personally liable, unless it clearly appears on the face of the instrument that he signs only as agent. What we have to do is to see whether that clearly does appear in the present note, so as to exclude the defendant's personal liability. The words are "I promise to pay," and then "for the company, J. Sizer, Secretary." The plaintiff lays emphasis on the use of the personal pronoun "I"; but it seems to me that it would be ungrammatical to put it in any other way. There is no doubt that he is making the promise, whether he is doing

(13) 1 Hurls. & N. 165; s. c. 25 Law J. Rep. (N.S.) Exch. 348.