16
aforesaid " required an absolutely rational meaning. They had, as far as he knew, no meaning in English except as mentioned above "and already referred to." Their Lordships might think he had not referred to them, but he said he had, and it was for the Court to say whether any words in that clause justified his statement that he had mentioned them.
Mr. Alabaster said he would proceed to the points his learned friend had left untouched. The first of those was that the learned judge in the Court below had finally decided to ignore an admission in the bankruptcy proceedings on the ground that there was a well-known rule where an agreement was reduced to writing that evidence obtained was an admission. It was quite true that that was a general rule, | but like many general rules it had exceptions, and there were two in this instance. The first with regard to consideration found where a document which continued a contract between the parties expressly stated that there was no consideration, yet they were allowed to go elsewhere to prove there was consideration. The other exception was with regard to admis. sion. The whole idea of a mortgago was to secure some obligation, and it could not be compelled to do any more than that. The effect) of the judgment in the Court below was that these documents were meaningless.
Was
The Chief Justice-I don't think that is the effect of it.
Sir Henry Berkeley-You've given meaning, uot theirs.
our
|
Sir Henry Berkeley, proceeding, told the Court it was well to remember at the outset the nature of this claim which the appellants made against the respondents. It was that the respondents should be liable for the debt or
default of a third person. Such a liability was one which must, under the Statute of Frauds, be imposed by a writing-some written agreement or some memorandum in writing to testify to the agreement imposing the liability. In the covenant there was no implied liability to pay the debt of a third person unless that implication arose as of necessity from the construction of some written agreement or what was equivalent thereto. It was therefore at the outset clear that no such liability could be imposed. They had nothing to do with the business relation- ships of the parties by construing an agreement by which one sought to make the other liable to a debt of the third.
An implication could only arise in the words used in the agreement, or to put it in another way, the agreement must in expressed language impose the liability to pay the debt, or from the language used, a necessary implication must arise therefrom. To carry his learned friend's contention on that point to a logical conclusion, there would be no necessity to have any compradore's agreement at all. It was evident that they had to look at the written terms of the agreement made
between Messrs. S. J. David and the respondent and nothing else. The respondent in this case contracted in two distinct capacities: first of all he contracted as compradore, and then he con- tracted as surety for the compradore. In the second capacity of mortgagor the respondent was a surety, and he was entitled to all the protection which the Courts gave to a surety. The mortgage was a security of a surety, and would have to be construed with stringency. While there was an agreement between the parties there was no such agreement as set out in the appellants' statement of claim.
The hearing was further adjourned.
Wednesday, June 30th.
Sir Henry Berkeley stated that at the conclu- sion of Mr. MacNeil's address to their Lordships he submitted that no effect could be given to the documents--meaning thereby the agreements and the mortgage-unless the compradore was held liable to pay the losses sustained on Chinese contracts. His friend could only support that proposition by insisting that there might be or should be read into the mortgage, by means of the proviso for redemption, a personal contract to pay these losses.
nd his learned junior suggested that the effect of the judgment in the Court below was to render the documents what he described as meaningless; meaning thereby, Counsel supposed, that the documents had no meaning unless they were held to impose liability on the compradore to pay, the losses
ՎԱՐ on
THE HONGKONG WEEKLY PRESS AND
[July 5, 1909.
Both on Chinese contracts.
the learned the Equity Court would refuse to further inter- Counsel altogether overlooked the only con- fere, and would allow the mortgagee undisturbed he next right struction to be placed on the documents by possession under his legal title.
of
one which was rarely the usual interpretation to be put on the lan- a mortgagee, was
accorded to him unless it was provided for guage in which those documents have been
the deed. it The effect sought to be placed on the in
Was B power of sale. drawn. documents by Counsel for the other side could. The next right a mortgagee had was to only be given by straining the meaning to
any covenant or contract, either contained in the deed or outside the deed. breaking point, and by implying something there was no warrant for implying. The effect that Another right which the mortgagee had was to his learned friends contended for was altogether go into possession. That was strictly a Common unnatural. The agreements were clear and Law right, because the proporty was being unambiguous. A particular security was taken conveyed to him upon a condition which had for the performance of a particular agreement. been broken. His learned friend Mr. MacNeil and that particular security consisted of the stated that if a man accepted a post under a matters specified in the documents themselves. deed, and the post had obligations attached to They consisted of, first, a cash deposit of $25.000; it which were specfied in the deed, then there and secondly, an assignment of specified landed property. It was contended by his friends, that if they were driven from the position they endeavoured to take up, that this pro- riso for redemption might be regarded as a personal covenant to pay; that at all events the contractor was liable under some simple ron- tract liability which the documents were sup
him. Where an agreement posed to impose upon was expressed, nothing was to be implied. They had a eloar, unambiguous, explicit agreement between the parties, and a clear and explicit security given for the performance of that agree ment. It would be doing violence to the maxim he had cited to the Court, and to the language of the documents themselves, for the Court to imply any simple contract liability outside the words of the contracts themselves. It was not competent for the court to adopt any such line as that suggested by his learned friends, but it was necessary no doubt for his friends to fake up that line as a last trench.
Mr. Slade, after the tiffin adjournment, dealt with the law concerning mortgages. He said it was not a necessary part of a mortgage that there should be any covenant for payment of the money secured by the mortgage. There might be cases where a mortgage was made to secure the payment of money, and yet no lir bili. ty, express or implied, on anyone. That was what he said in this case; there was a mortgage to secure certain payments, yet there was no liability, express or implied, ou anybody to make those payments. The security for these payments was the land, and nothing but the land. His friend's suggestion was that there must be an obligation on every person who pledged his property.
Mr. MacNeil Not necessarily by covenant.
Mr. Slade-I quite understand that. It must be either a simple contract obligation or under bond or covenant, or else it is not a mortgage. A man can perfectly well enter into a mortgage affecting his property without being under per sonal liability of any kind, sort or description.
!
Proceeding. Mr. Slade said his learned friend in the earlier portion of his opening, instanced the case of a surety as being one on whom there was no necessary implication of a personal liabi- lity. In the case of a surety for money lent; for instance, money is lent to a person, and another guarantees the repayment by that person, by a Unless there was a mortgage of his property. personal covenant there was no personal liability on the surety at all. The personal liability to pay the money by reason of the original debt was in the original debtor whom the surety secured by the mortgage of his property. The right of a mortgagor was first of all to require a
reconveyance if he perform ed the conditions contained in the proviso for redemption. If he did that, then under the very terms of the deed the mortgagee was bound to reconvey, and could be compelled to. The next important right of the mortgagor was to obtain redemption of the property at any time before the mortgagee had lawfully parted with it. Right of redemption was an incident attached to a mortgage in whatere form, by equity. The rights of a mortgagee were, firstly, if it was a true mortgage, that he could obtain the property himself. for himself, by means of foreclosure. is right was at law, of course, to have the property on the default. But equity did not allow him to get rid of the right of redemption except by what was called the action for foreclosure. The Court of Equity appointed à specific day months hence, by which date the mortgagor must redeem, or be foreever debarred of his right to redeem. On the passing of that day
some
an implied covenant to perform those obligations. That was extremely specious, and sounded extremely right, but unfortunately the authorities were dead against it. The hearing was adjourned,
等
Thursday, July 1st.
Mr. Slade, continuing his argument, went in detail through the mortgage and the agreement. From the recitals in the mortgage, he said, his learned friend deduced an obligation on the compradore, prior to the mortgage, to perform the conditions set out in the proviso for redem- tion. He submitted that not only would those words not bear that construction, but they ab- solutely negatived any suggestion of the kind. His learned friend argued that it was apparent from those words that there had been prior negotiation between the parties which had re- sulted in an agreement, aud that the agreement must have been that the compradore would perform his duties. What these duties were, were to be found in writing set out in the proviso for redemption. In the first place, with regard to that argument, Counsel submitted that where negotiations had resulted in an agreement in writing, the Court could not consider what verbal agreement had been arrived at, but could only consider the agreement in writing. There were two agree- ments in writing in this case; one was called the mortgage and the other the agreement, but both might be described generically contracts. The agreement between the parties having been reduced to writing, the Court not
88
consider any antecedent agreement. He submit- ted the agreements in writing were plain: There was the mortgage as a pledge of the man's property and the subsequent agreement as to personal services. The conditions upon which the mortgagee agreed to comply with the requests were stated perfectly plainly and un- ambiguously. He agreed to comply with the requests upon the compradore entering into, first of all, a mortgage, and secondly, an agree- ment; or to put it in other words, upon first of all pledging his property and then entering into a personal contract.
Mr. MacNeil Which the compradore had agreed to do.
Mr. Slade Which the compradore had agreed to do. He entered into these two transactions so that on the face of the recital of the mortgage at the time when the mortgage was entered into he had not entered into the personal, contract contained in the agreement, and it was not intend- ed that he should have. It was intended distinctly that that should be afterwards the intention of the parties so that the firm, through their partner the mortgagee, should have a pledge of the property before they obtained the services of the compradore as compradore. There was another reason beyond the words of the recitals why the Court could not possibly construe the previous negotiations and the verbal agreement, if there was one, and that was, that the terms of it were specified in the agreement in writing; and from the agreement in writing it was obvious that the agreement was not to be performed within one year-it was for a term of three years. Any verbal agreement not to be performed in one year, and not evidenced in writing, was a void agreement under the Statute of Frauds. A prior date could not be given to an agreement in writing than that which was shown on the face of it, and in the agreement in writing referred to, it was specifically stated that it was entered into after the mortgage.
The hearing was adjourned.