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Loan of

CH. XX. s. 1. three subsequent instalments (z). But the money due for unpaid instalments was held not to be a debt to the company (a). Specific performance cannot be decreed (b).

Money.

No specific performance. Equitable mortgage of land.

Form of bill of sale.

Future goods.

Thomas v.
Kelly.

Seizure of
goods.

An equitable mortgage is a contract operating as a security, but which for want of transfer of the legal estate can only be enforced by the equitable jurisdiction of the Court, which carries it into effect either by giving the creditor immediately the appropriate remedies, or by compelling the debtor to execute a security in accordance with the contract (c). It may be made in various ways, of which the most common are an imperfect transfer of the subjectmatter of the security, and delivery of documents of title with intent to create a security thereon.

It is essential to the validity of a mortgage of goods that the instrument effecting it, called a "bill of sale," should be in accordance with the form in the schedule to the Bills of Sale Act, 1882 (d); should truly set forth the consideration for which it is given (e), including any deduction for "commission" or expenses, or payment of a future debt (f); should be attested by a credible witness, and should be registered in the Central Office of the Supreme Court (g) within seven days after execution. Moreover, a bill to secure less than 30l. or unregistered is absolutely void (h). Registration must be renewed once every five years (i).

Future or after-acquired chattels cannot be included in a bill of sale (j), but future book debts can (k).

The Bill of Sale usually provides for the seizure of the goods thereby mortgaged for certain causes, and for the protection of borrowers the 7th section of 1882 limits these causes to (1) nonpayment of money secured, (2) bankruptcy of the grantor or his suffering the goods to be distrained, (3) fraudulent removal of the goods, (4) non-production of receipts for rent, rates and taxes, (5) levying of execution against the goods of the grantor; and further allows the grantor a period of five days from seizure within which he may apply to the High Court or a judge, who,

(z) South African Territories v. Wallington, [1898] A. C. 309. Only nominal damages were given, there being no proof of substantial damage.

(a) lb.

(b) 1b.; Western Wagon, &c., Co. v. West, [1892] 1 Ch. 271.

(c) Fisher, p. 49, citing Ashton v. Corrigan (1871), L. R., 13 Eq. 76.

(d) I.e., substantially in accordance; see Ex parte Stanford (1886), 17 Q. B. D. 259, C. A.; Thomas v. Kelly (1888), 13 App. Cas. 506; Simmons v. Woodward, [1892] A. C. 100.

(e) See Hughes v. Little (1886), 18

Q. B. D. 32, C. A.

(f) Firth, Ex parte, Cowburn, In re (1882), 19 Ch. D. 419, C. A.

(g) As to local registration, see sect. 11 of the Act of 1882, and R. S. C., Ord. LXB.; and Ord. LXI., rr. 25-27.

(h) See Bills of Sale Acts, 1878 and 1882, 41 & 42 Vict. c. 31, and 45 & 46 Vict. c. 43.

(i) Act of 1878, s. 11.

(j) Thomas v. Kelly (1888), 13 App. Cas. 506.

(k) Tailby v. Official Receiver (1888), 13 App. Cas. 523.

Loan of
Money.

"if satisfied that by payment of money or otherwise the cause of CH. XX. s. 1. seizure no longer exists," may restrain the grantee from removing or selling the goods.

The Bills of Sale Acts are in many particulars, as was observed in the House of Lords in Thomas v. Kelly (1), difficult if not impossible to construe, and the judicial decisions upon their construction are very numerous.

Bills of sale

contd.
Difficulties of

Bills of Sale
Act.

Thomas v.

Kelly

SECT. 2.--The Contract for Interest.

The general rule is that the law does not imply a contract by a debtor to pay interest on the debt, although it be of a fixed amount, and has been frequently demanded (m).

Prima facie, therefore, in the absence of express stipulation, interest is not claimable on a demand for goods sold, although the price was to have been paid on a certain day (n); or on a balance struck on an account for goods sold (o); or for money lent to (p), or paid for, the defendant (q); or had and received by him, though fraudulently, for the plaintiff's use (r); or on a guarantee(s); or in an action on a foreign judgment (t); or on a solicitor's bill (u); or on money deposited with a banker (x).

And where a security for money borrowed makes it payable at a certain day, with a certain rate of interest up to that day, there is no implied contract that interest at the same rate is to be payable afterwards (y).

But where a bill of exchange, cheque or promissory note is dishonoured, the holder may recover from any party liable thereon, and the drawer, who has been compelled to pay it, may recover from the acceptor, and an indorser, who has been compelled to pay it, may recover from the acceptor or from the drawer, or from a prior indorser, amongst other things, interest thereon from the time of presentment for payment, if the instrument be payable on demand, and from the maturity of the instrument in any other

(1) Thomas v. Kelly (1888), 13 App. Cas.

506.

(m) De Bernales v. Fuller (1810), 2 Camp. 426; Page v. Newman (1829), 9 B. & C. 378.

(n) Gordon v. Swan (1810), 12 East, 419; 11 R. R. 758, n.

(0) Chalie v. Duke of York (1806), 6 Esp. 45.

(p) Calton v. Bragg (1812), 15 East, 223; 13 R. R. 451.

(q) Carrv. Edwards (1822), 3 Stark. 132.

(r) Fruhling v. Shroeder (1835), 2
Bing., N. C. 77.

(s) Hare v. Rickards (1831), 7 Bing. 254.
(t) Hilhouse v. Davis (1813), 1 M. & S.

169.

(u) Walker v. Bayley (1800), 2 B. & P. 219, Ex. Ch.

(x) Per Lord Denman, Edwards v. Vere (1833), 5 B. & Ad. 282.

(y) Per Lords Chelmsford and Selborne, Cooke v. Fowler (1874), L. R., 7 H. L. 27, 35, 37.

Interest on

dishonoured

bill of exchange, &c.

CH. XX. s. 2. The Contract for Interest.

Account stated for money lent. "Punctual" payment.

Compound interest.

By agree

ment, or

course of dealing.

Usage of trade.

case; but the interest may, if justice require it, be withheld wholly or in part, and where a bill is expressed to be payable with interest at a given rate, interest as damages may or may not be given at the same rate as interest proper (z).

Interest is likewise payable on an account stated for money lent (a).

Punctual payment means payment on the very day named, as was held where a mortgage deed stipulated that payment of the principal should not be required for three years, "if in the meantime every half-yearly payment should be punctually paid," and payment nine days late was held no compliance with the proviso (b).

There cannot be a title to compound interest, without a contract expressed, or implied from the mode of dealing with former accounts, or custom (c). And it has been held in the House of Lords that, in general, a contract or promise for compound interest is not available in England, except, perhaps, in the case of mercantile accounts current, for mutual transactions (d). Nor is a customer bound or affected by the practice of his bankers, to charge interest upon interest, by making rests in their accounts at stated intervals, unless it be proved that he was aware that such was their custom (e).

Interest may of course be claimed in all cases where there is a contract for the payment thereof; and such a contract may be inferred from the course of dealing between them; e.g., if it has been frequently charged and paid without objection, in former and similar accounts (ƒ), and such a claim for interest has been maintained in an administration action (g). So if it appear to be the invariable custom or usage in any particular trade or business to charge interest, this may amount to evidence of a contract When interest to allow it between parties having transactions therein (h). So where there is a contract to pay a sum of money, with interest, on a certain day, the jury may give interest, as damages, for the detention of the debt beyond that day (i).

recoverable as damages at

common law.

(z) Bills of Exchange Act, 1882, 45 & 46 Vict. c. 61, s. 57.

(a) Blaney v. Hendricks (1771), 2 W. Bl. 761.

(b) Leeds and Hanley Theatre v. Broadbent, [1898] 1 Ch. 343, C. A., reversing Kekewich, J.

(c) Fergusson v. Fyffe (1841), 8 C. & F. 121, 140.

(d) Id.

(e) Moore v. Voughton (1816), 1 Stark. 487.

(f) Calton v. Bragg (1812), 15 East, 223; 13 R. R. 451; Eaton v. Bell (1821),

5 B. & Al. 34.

(g) Anglesey, Marquis of, In re (in which the claim was for more than 3,000l., of which more than 1.0007. was for interest), [1901] 2 Ch. 548, C. A., reversing Cozens-Hardy, who had proceeded on the authority of Lloyd Edwards, In re (1891), 61 L. J., Ch. 22. (h) See Ikin v. Bradley (1818), 2 Moore, 206, Ex. Ch.

(i) Atkinson v. Jones (1835), 2 A. & E. 439; Price v. Great Western Rail. Co. (1847), 16 M. & W. 244; Morgan v. Jones (1853), 8 Exch. 620.

The Contract for Interest. When re

coverable under Civil

Procedure

And by the Civil Procedure Act, 1833, 3 & 4 Will. 4, c. 42, s. 28, CH. XX. s. 2. it is enacted, "that upon all debts, or sums certain, payable at a certain time or otherwise, the jury, on the trial of any issue, or on any inquisition of damages, may, if they shall think fit, allow interest to the creditor, at a rate not exceeding the current rate of interest, from the time when such debts or sums certain were payable, if such debts or sums be payable by virtue of some written instrument at a certain time; or, if payable otherwise, then from the time when demand of payment shall have been made in writing, so as such demand shall give notice to the debtor, that interest will be claimed from the date of such demand until the term of payment: provided that interest shall be payable in all cases in which it is now payable by law."

Act, 1833, ss. 28, 29,

through jury.

insurance.

And by sect. 29 the jury may, inter alia, give damages in the Policy of nature of interest, over and above the money recoverable, in all actions on policies of insurance made after the Act.

And as to these enactments it is to be observed: First, that they do not extend to any action on contract, which is brought for the recovery of unliquidated damages; nor, as it appears, to any case in which the claim is not for a sum certain, as contradistinguished from one, the amount of which is merely capable of being ascertained (k); Secondly, that it is discretionary in the jury to allow interest even in the cases specified; Thirdly, that the jury have no power to award interest, unless there be proof of a written instrument, whereby the debt or sum certain is made payable at a certain time (l); or of a written demand of the money with notice that interest will be claimed (m); or where the action. is on a policy of insurance; Fourthly, that the jury must give Judgment interest in cases whereby it is payable by law. Further, by sect. 17 of the Judgments Act, 1838, 1 & 2 Vict. c. 110, judgment debts bear interest at 4 per cent., which interest is recoverable as a debt (n).

Various statutes from 37 Hen. 8, c. 9, have, with the view of prohibiting usury, regulated the rate of interest to be taken; but these statutes were all repealed in 1854 by 17 & 18 Vict. c. 90.

(k) Hill v. South Staffordshire Rail. Co. (1874), L. R., 18 Eq. 154. In an action for money had and received, brought against a railway company to recover over-charges made by them on the carriage of goods, interest may be given under the statute, as upon a sum certain, if there have been a previous demand thereof. Edwards v. Great Western Rail.

Co. (1851), 21 L. J., C. P. 72, 89.

(1) London, Chatham and Dover Rail. Co. v. South Eastern Rail. Co., [1893] A. C. 429.

(m) Harper v. Williams (1843), 4 Q. B. 219; and see Mowatt v. Lord Londesborough (1854), 3 E. & B. 307.

(n) Ex parte Lewis (1888), 36 W. R. 653, C. A.

debts.

Repeal of
Usury Acts.

CH. XX. s. 3.

Contracts of
Insurance.

Definitions and decisions of insurances.

Insurable interest.

Lucena v.
Crawford.

Fire and marine

insurance are
contracts of
indemnity.

Darrell v.
Tibbitts.

Life insur-
ance not.

Dalby v. India, &c., Co. Conditions precedent to recovery of insurance money.

SECT. 3.-Contracts of Insurance.

[See Porter on Insurance (Fire, Life, Accident, and Guarantee), 3rd ed., A.D. 1898; Bunyon on Life Assurance, 3rd ed., 1892; Bunyon on Fire Insurance, 5th ed., 1893; Crawley on Life and Accident Insurance, A.D. 1882; Arnould on Marine Insurance, 7th ed., A.D. 1901; Chitty's Statutes, 5th ed., tit. Insurance."]

66

By a contract of insurance the insurer agrees to pay the insured a sum of money in event of some specific loss happening to the insured in consideration of the insured paying to the insurer a lump or annual sum (generally the latter), before or until the loss happens. Any risk whatever which the insured has an interest in not happening may be insured against. The kinds of insurance usually known are: (1) life insurances, (2) insurance against accident, (3) fire insurance, and (4) marine insurance (0).

In every contract of insurance the insurer must have an interest in the loss insured against not happening, otherwise the contract is void (p), and the best definition of "interest" in this connection is to be found in Lucena v. Crawford (q), to the effect that where a man is so circumstanced with respect to matters exposed to risks as to have a moral certainty of advantage but for those risks, he may be said to be interested in the safety of the thing.

A contract of fire insurance is a contract of indemnity, in the sense that the insured can only recover from the insurer compensation in proportion to the loss actually incurred (r), and so is a contract of marine insurance (s).

But a contract of life insurance is not a contract of indemnity, so that where reinsurance is effected, the reinsurer can recover the insurance money notwithstanding the surrender of the original policy before the death (t).

It has long been the practice of insurance companies, for the purpose of their own security, to incorporate in their policies, by reference to their proposals, various stipulations for matters to be done by the assured making a claim before the company is to pay them, and (as the remedy by action for not complying with these stipulations would not afford them any protection) to make the fulfilment of the conditions a condition precedent to them,

(0) The law of marine insurance has been proposed for codification in a bill which first passed the House of Lords in 1895, and has since frequently passed that House.

(p) 14 Geo. 3, c. 48 (general); 19 Geo. 2, c. 37 (ships).

(q) Lucena v. Crawford (1808), 2 B. & P., N. R., at p. 302, per Lawrence, J.; 6 R. R., at p. 686; and see Wilson v. Jones (1867), L. R., 2 Ex., at p. 150.

(r) Darrell v. Tibbitts (1880), 5 Q. B. D. 560, C. A.

(8) See Castellain v. Preston (1883), 11 Q. B. D., at p. 386, per Brett, L.J.

(t) Dalby v. India and London Life Co. (1854), 24 L. J., C. P. 2, Ex. Ch. ; overruling Godsall v. Boldero (1807), 9 East, 72, in which it had been held that a creditor of Mr. Pitt, who had been paid by his executors, could not recover on his insurance on Mr. Pitt's life.

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