LAW REPORT.

SUPREME COURT.
EQUITY COURT.
(Before His Honour Mr. Justice Hodges.)
Tuesday, April 30.

GOLDBERG V. JENKINS AND LAW.

This action was brought by Mr Abraham
Goldberg, financier, Elizabeth-street, to re-
cover from the firm of Jenkins and Law, money due on a bill of exchange for
1,045 drawn by the plaintiff and accepted in the name of Jenkins and Law. The
bill was given on the 5th November, 1888, and was
payable on the 5th February, 1889. The plaintiff aleo claimed on a cheque for
422 10s. drawn on the 27th October, 1888, in the the name of Jenkins and
Law, which he had discounted. The firm of Jenkins and Law carried on business
in Exhibition street as ironfoundcrs. Mr E Jenkins, one of the members of the firm,
had recently become insolvent, and his estate was sequestrated, and he did not
defend the action. The other defendant, Mr Alex. Law, a member of the firm of
Jenkius and Law, did on the ground that the bill and note were given by Mr
Jenkins for a private debt due by Mr. Jenkins to the plaintiff, and not for any
partnership matter ; mid Jenkins had no power or authority to bind the firm or
thedefendant Law by accepting the bill or making the cheque, as the plaintif! well
knew, nor was there any value given for the bill or cheque by the defendant Law.
It appeared that Mr Jenkins first had transactions with the plaintiff in the year
1881, and subse- quently had other transactions with him in 1884 and in
December, 1887. Jenkins had given bills of the firm which were met by his own
private cheques, the bills not being presented. On the 27th June, 1888,
Jenkins gave to the plaintiff a cheque of the firm of Jenkins and Law tor 422
10s., on which 400 was advance. By arrangement this cheque was held over
month by mounth, Jen- kins paying the interest on it. On the 27th October
Jenkins substituted another cheque tor 422 10s. for it in the name of the firm,
and this was the cheque sued on in the action. About the same time Jenkins bor-
rowed from the plaintiff a sum of 1,000, for which he gave a bill in the name of
the firm, which was also sued upon. The defen- dant, Mr Law, had no
knowledge of any of the transactions being entered into till shortly before the bill
of exchange became due. It was contended in his behalt that all the tran-
sactions were private ones between Jenkins and Goldberg, and that Law had
nothing to
do with them.
Mr. Moule and Mr Isaacs appeared for the plaintiff , Mr Hood and Mr Mitchell for
the defendant Law.
Mr. Justice HODGES said that there were two propositions in this case which he
had to deal withone of law, the other ot fact, As to the question of law, if it were
neces- sary for him to express a final opinion, he would take further time. But he
desired to express his present impression, although it was not absolutely
necessary for the decision ot this case. Under certain trading partner-
ships it had been decided in a large number of cases that the last member ot a
partnership had implied authority to bind his co-partner by borrowing money. But
the grave question which was raised in this case, it it were necessary for him
finally to determine it, was whether that amounted to a power to borrow money in
any way, on any terms, however monstrous. In his opinion a partner could only
bind his co- partners by conducting the business in a way in which businesses
were ordinarily con- ducted. Consequently the partner had not, m his opinion, un
authority to go outside the ordinary mode ot dealing or the ordinary method ot tile
business transaction, ami pledge his co partners or thtir credit if the transactions
were not their business trans actions at all He re.arded the transaction about
which evidence had been given ni this case not as a business transaction in
the proper sense of the term-not as a businesstransaction conducted m the
ordinary wa)
1 he partner could have got the moue) it re- quired at rutes varying I rom G to 10
ptr cent
lit was in this instante rtferrmg to the last transaction between the pluintill and the
defendant Jenkins Insttad ot those rates the plaintiff was charging somethingover
60 per ceut., payable quarterly. That, in his opinion waa not conducting the busi-
ness at all A person who lent money on these terms must know that the person
who was dialing with him was not conducting uti ordinary business transaction,
and that the Eeraon borrowing would not have power to
uni Ins co partner A pnv ato person might borrow as he liked The Court hud
nothing to do but to make lum pay the penalty But what they had to say was to
vvluit extent his authority went to bind his partittr In this case be got no actual
authority, and it was therefore merely a question ot implication It would be an
implication beyond and out- side tilt law to allow an implied power in Jenkins to
bind the firm trading as Jenkins and Law He had said this much as it con-cerned
the commercial world and money lenders general!)-because on this
question there was some doubt as to what the law was-so that persons lending
money migtrt know that m matters ot this kind tom nig before him, unless it was
shown b) further argument that he was wrong, his opinion weis that tiley were not
business transuttioiis. But there was evidence in this case on which he gave his
decision against the plaintiff These transactions commenced, according to the
plaintiffs books, us lar bac- as Mu), 1SS1 The first transaction was unnnstakiibl)
a private one between the plaintiff and Jenkins Hie next transaction was also a
private one. All the payments made to the pi iintilT in payment ot the money a
borrowed were either by Jenkins s private theques.or by Bums of money paid b)
lum Nono ol the bills given in the natue ot the firm was ever presented at their
bank lhese were lucia sufficient to arouse suspicion m unordinr) muid, although
they would not arouao suspicion in the mind of the plaintif)
His was u risky busint.-, and he took tho nul. and responsibility When ho
received private cheques in pa) ment of bills instead ot cheques of the firm it
should have aroused his suspituin It before the transactions prior to labs were
entered into it was not ii joint account, the pluintill should lune known betre they
were concluded that the) were not on joint account He ought to havediscovered
enough before hu entered into other transactions to put him on his guard In
regard to the bill and cheque sue I on, the) were entered in one of tue
plaintiff's books as to Jenkins and Law, und in an other as having been
discounted for Jen kins, -be plaintiff no doubt meant to get jenkins and Law if ho
conld, but the evidence satisfied him that the credit waa not given to that firm The
plaintiff bad also taken private uecunt) of Jenkins consisting of mining share. He
warned security in case of accident, and lie took the security of the scrip of those
shares of which he did nut know the value, and also a policy on the life ot Jenkins,
who wusii)ouiig tuan lie did not ask for and did not get security over one stick of
the firm, nor was Law communi
cattd with on the subject. Ihese facts,wtneli were not disputed, led him to believe
that it w as not a business transaction at uti, and that the plaintiff was lending the
money to Jenkins only on such security as he could get, the judgement would be
for the defen-
dant Law with costs.
Judgment for defendant Law with costs.
riUCTIC- COURT
TuhsUAY, Al'lllt JO
(Before His Honour Mr Justice Holroyd )
RE WALTER PENGLASE EPARTE THE
LOIDON CHARTERED BANK
This was a petition by the London Char tered Bank to revive an order nisi for
seques- tration against the estate of Walter Penglase, of Essendon, mining
speculator, but which order nisi had lapsed in consequence of the then
petitioning creditor not proceeding with his application for the sequestration of
the estate. The judgment of the Court had been reserved and it was now
delivered
Mr Higgins appeared for the petitioning creditors in support of the order nisi
forsequestration, Mr Goldsmith showed cause on behalf of the respondent.
Mr JUSTICE HOLROYD in giving judgment, said,-Under section 49 of the
Insolvency Statute 1871, when an order nisi has been made for the sequestration
of the estate of a person alleged to have committed au act ofinsolvency, and the
order is allowed to lapse in consequence of the default of the petition- ing creditor,
any judge ot the Supreme Court may, upon the application of any other cre- ditor
to whom such person is indebted in theprescribed amount, provided the debt
was incurred before the order nisi was made, and upon proof of those facts to his
satisfaction,
order that the sequestration shall be revived and shall be proceeded in as if it
had been originally obtained on the petition of the creditor who applied for the
revival
The order nisi of the 22nd March, 1889, with which I have to deal, pur- ports
to have been made upon read-
ing, the petition ot the London Chartered Bank of Australia and affidavit of
Charles Guthrie, both of the same date. The petition and affidavit are
neither of them recited , but the petition states facts which, if the state-
ments are true and the petition is a proper petition, show that the judge who
made the order had jurisdiction to make it. The peti-
tion is signed thus, "The London Chartered Bank of Australia by its
attorney Chas. Guthrie." The affidavit of Charles Guthrie,
who describes himself therein as inspector and general manager of the
bank, verifies an office copy of a judgment recovered by the bank in respect
of the debt on which the petition is founded, but dated the day after the
date of the order nisi, and states that the London Chartered Bank of
Australia is the petitioner, and that such of the statements in the petition as
relate to his own acts and deeds are true, and such as re- late to the acts and
deeds of any other person or persons he believes to be true There was no other
evidence of the facts alleged in the petition, and no evidence that
Guthrie waa the attorney of the bank. The bank as a corporation could only sign
the petition by its duly authorised agent. No notice of objections was filed by the
insol- vent, but Mr Goldsmith, showing cause on his behalf, objected that the
petition should have been verified paragraph by paragraph, that Guthrie's
authority to sign the petition as the agent of the bank should have ap- peared by
the affidavit, and that the order nisi ought on its face to have disclosed
thejurisdiction to make it. Mr Higgins, on the other side, contended that the Court
on cause being shown could not consider the sufficiency of the materials on
which the order nisi was made; and that, as the insolvent had not applied to set
aside the order, and no objections had been filed, the jurisdiction to make the
order could not be challenged. I infer from the cases ot re von (4 A.J B., 13) mid
f Ghenon (J W. \V 4. A'R, J F-. J. M , 114!, which were cited to me, that
according I to the ODinion entertained by Molesworth, J , whatever ts necessary
to give jurisdiction to I n ludge of this court, when making an order
nisi for compulsory sequestration, ought to be set forth ia the order either by
recital ot the petition or otherwise, but that, if the juris- diction so appeared, he
doubted whether the siifhcieuc) of the materials to prove the facts alleged could
be questioned on showing cause What facts the learned judge con- sidered
essential to the jurisdiction, either under section 39or section 49 of the statute, I
am not quite clear Butagoodpetitioningcredi tor_ debt was one, and a petition
properly pr _ented was another, as he d .ided in le Cooper (2 V.L.R., J.P. and M ,
82), in which case he also held that ii petition purporting to be presented by a
corporation by its agent, who in fact had not authority to present the petition
although extensile powers had been conferred upon him for other purposes,
was not nroperly presented lu the case of Chrrlie i Unwin (11 Ad and El, 373\ so
olten cited ni our courts, and singularly resembling the present, it was held that
an ortler made by the Lort! Chancellor under section IN of b Gea 4, chap 1G w
as bad for not showing on its face that the creditor applying under that section
nad previously proved bis debt, such proof being essential to the
Chancellorsjurisdiction Littledale, J, said -"It is argued that the petition would
supply that lact (if, the proof of debt as the section re- quired), but we cannot call
in the petition to support tho order any further than as the order recites it" In my
opinion the order nisi of the 22nd of Moren, lb.9, ought to be discharged on the
ground Unit it does not disclose jurisdiction It does not show that Penglase was
indebted to the bank betre the order nisi was made, or at nil In Coopers case,
Molesworth, J , seems to have thought that under section 31 ot the statute he
could even as to matters of substance have sup
plied omissions in the ortler m.i on cause being shown against it, if there had
been a petition properlv presented to amend by (See also r. _?i,.., 2 VL.R., J P
antlM.S4) Hie petition here, it I might amend by a petition not recited,
undoubtedly alleges a debt of the requisite amcunt incurred within the pre-
scribed time. My own impression is, and I should so decide, if necessary, that
the omissions winch can be supplied under section di are omissions ot words
accidentally dropped out of a paragraph, and not of statements essential to show
jurisdiction The value of the principle lind down in Chiutie v Unwin may be
disputed, but I think that section 31 was not intended to oierrule that principle, but
rather to permit of the cotrection of mero informalities or slips. Be that as it mny,
and accepting the dictum ot the learned judge as importing that any omission
whatever can be supplied, he would not, us I gather from the very briefreports of
Ins decisions, have atnendetl an order um by a petition, ot the praper pre-
sentation of which no proof was adduced to the judge by whom the order was
made; a n 1, as I have already mentioned, no proof w liutever was adduecJ that
Guthrie was the agent of the bank to sign the petition on winch the present order
nisi wns drawn up. My decision in this case ia, I believe, in accordance with u
practice hitherto invari- able. It has always been customary to recite the petition
at length, and to add that the facts showing jurisdiction have been proved to the
satisfaction of the judge. Tho addition may not be necessary , but it ia not an idle
form It indicates that the judge hits not assented to the prayer ot the
petition merely because it was \ en lied by uti affidavit, l but that he is satisfied
with the verification,
as the act requires he should he A verify nig affidavit, sworn to the beat of his
belief by ti person who could know nothing about the facts, anil who omitted to
mention tho sources from which his belief was derived, would be very
unsatisfactory. It is not necessary forme to determine whether the sufficiency of
Mr Guthrie' nlhdavit could be impugned at this stage. But his affidavit ia in quite
an unaccustomed form, and is m my opinion very detective. It follows a
formireacrtbcd for quite a different purpose
tule 3 of the Supreme Court rules of the 1st of July, 1SS1 (Coi Caz , p 2 783)
runs thus - "Ihe petition to a judge of the Supreme Court tor an order uki for
sequestration under scction-SSof "Hie Insolvency btatuo 1871,' shall be generally
verified by the alh davitof the petitioning creditor or creditors, or one of them, as t.
the material facts therein stated, and tho date of (he alleged act of insolvcncv, or
hy affidavit ot theduly authorised agent or agents of such creditors or
creditor, stating besides the verification ot the peti- tion, that he is duly authorised,
and discloa ing facts within his own knowledge which account for the inability of
the creditors or creditor to verity the same, and such petition shall also lie verified
by the u tilla vit of the sheriff's officer or other pitson bi st informell of the fact ot
the nlleged act ot msoliencv. But the judge may, under circumstances, dispense
with the above affidavit., or require further evidence, by affidavit or ina i-
ore examuiation, upon the above or other matters." In revivals of orders mu
under section lu common sense bids us follow n similar ml to that which has
been cipresal) omitted with refetonce to compulsory stques trillions under section
JJ Both this rule und a previous rule to the same effect have been ordinarily
interpreted as requiring that a petition presented under section 39 should be
verified so far as material paragraph by paragraph I am not sure thatthat is an
accurate interpretation Ihe use of the word "generally ' embarrasses me But the
main object ot tho rule is transparent, namely, that the witness or witnesses
most competent to speak of their own knowledge, of whom the petitioning
creditor would usually be one, should depose to the material
tacts An nlhdavtc in the form of Mr Guthries might defeat that object entire!)
ft eareltill) avoids mentioning what the wit ness knows of his own knowledge, or
whether he knows any thing Mr Guthrie in particular, although describing himself
as inspector mid general innnnger of the bank, leaves out the tinto of his
appointment, and refrain from Binung, if the fact be bo, that he is the bank'sduly
authorised agent for the purpose ot taking any proceedings in insolvency
matters. The order ni is discharged willi costs
Order m.i for sequestration discharged with costs._