422
tom, there is any liability on the part of an ultimate purchaser to indemnify the original vendor. It is therefore necessary to decide the question on principle and with the aid of such more or less relevant observations of the judges as can be collected from cases dealing with the transfer of shares and the rights and liabilities arising thereunder.
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fondant did not accompany them with any admission of liability; on the contrary he osten- tatiously refused to do certain things which might have been construed into such an admis- sion. And when the plaintiff invited him, first in gentle and then in more decided tones, to have the shares transferred to himself, he curtly refused to do so. It was not attempted to show by evidence that the plaintiff's position was altered for the worse or prejudiced in any way by the defendant's action in this matter, and I am of opinion that no case of estoppel by conduct is established against the defendant.
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THE HONGKONG WEEKLY PRESS AND Eq., 47, was cited as an authority in support of the plaintiff's contention. In that case the plaintiff Castellan, through his broker, sold shares to a jobber, from whom the defendant Hobson had agreed to purchase the famo number of shares, giving the name of Banks, one of his workmen, as the person to whom the shares were to be transferred. Castellau In deciding the case of Hill v. Gomes the executed the transfer to Banks and afterwards Court relied to a considerable extent upon Kel-received the purchase money; but from the lock v. Enthoven, L.R. 8 Q.B. 458. In that winding up of the company the transfer was case it was held that the transferee of shares was not registered, and the shares still remained
of Castellan. It was liable to indemnify his transferor against calls in the name
held made after he himself had transferred his by Janes, V.C., that Hobson, as the real pur The result of these views is that the de- interest to a third person. In his judgment chaser and equitable owner, was bound to fendant fails in his application for a nonsuit on Blackburn, J., at p. 164-explained the rules indemnify Castellan against all calls in respect the ground of fact, but succeeds in it on the which govern the liability of a transfereo of the shares. In giving judgment the Vice-ground of law. There will therefore be a judg- of shares towards his transferor as fol- Chancellor certainly used expressions which ment of nonsuit. The defendant will have his lows: "I think it is clear upon
the make in favour of the argument put forward general costs of suit, but the plaintiff will be authority of Walker v. Bartlett, 18 C.B. 845, by Mr. Francis on behalf of the plaintiff to entitled to set off against these costs the costs and also upon general principles, that when the effect that the plaintiff is trustee for the of two days hearing during which the questions there was the contract to purchase the shares defendant, who, as the beneficial owner of the of fact were debated. from the vendor, there was also an implied cou- shares and bis cestui que trust, is bound to tract that the rendee would hold the vendor | indemnify him against calls on the shares, and harmless from all the burdens of the property that intermediate equitable owners of the which he bad taken from the rendor. The shares can be disregarded. But I think, on transferee, who is the purchaser of the property, | consideration, that these expressions have was to get all the benefits as long as the pos-reference to the special circumstances of that session of the property was beneficial; and I think the law implies from that, that the pur- chaser contracts to indemnify the trausferor against all the burdens of the property which he, the transferee, has taken. That being so. I do not think that that liability is got rid of by the purchaser passing over the property to another, who would enter into a similar con- tract of indemnity as between him and his immediate vendor. I do not see how that relieves the defendant from the contract to indemnify the plaintiff."
It appears to me that the inference to be drawn from this language is that a con- tract of indemnity is implied in each
case
case, and the fact remains that Banks, the nominal purchaser, was treated as a mere name, and Holson was held to be the real purchaser from Castellan. On that finding · Hobson's liability to indemnify his vendor was clear, and the case therefore falls within the principle of Walkers. Bartlett supra and Kellock v. Enthoveu supra. The Vice-Chancellor founded his judg ment upon the law of trusts as being applicable to the position of the parties, but the case is not treated in the text books as having made any change in the law relating to transfers of shares, and indeed it is not mentioned in Lewin on Trusts (eighth edition.)
Reference may be made to Loring. Daris of a transfer of shares as between the | 32 C. D. 625. That was a case in which the transferor and his immediate transferee, but subject of the transfer of shares was discussel. does not arise as between a transferor and sub-chiefly in connexion with Leeman's Act. 31 sequent transferees; or, to put it in another way, that there is not,in the case of repented transfers of shares, any continuous chain of lia- bility extending from the first to the last of the transfers.
Viet. C. 29. In the course of his judgment Chitty, J.. said :—" Quite apart from "Leeman's Act, there is no pretence for saying there was any contract between the plaintif and the des fendant Davis. A contract by A ell 16 B. This case of Kellock v. Enthoven was taken and a contract by B to sell the same thing. on appeal to the xchequer Chamber and, iu | portion of the same thing, to €, erentes no liabi- delivering the judgment of the Court, Lordlity as between A and C; that is plain enough," Coleridge, C.J., used language which clearly points in the same direction.
It is to be observed that if it were held in the present case that the plaintiff is a trustee for The defendant and is lialue to be indemnified by him for all payments made in respect of the shares, it would follow that he has a right of recourse against two several persons. For ou this ruling he could call on the defendant to indemnify him, as being his cestui que trust in respect of the shares, while at the same time it can hardly be disputed that on the authority of Kellock v. Enthoven supra aul Hill v. Gomes supra, he would be entitled to claim an indemnity from G. L. Coxon as being the inmediate pur- chaser of the shares from him. It is better, I think, to stand by the rule which requires that, in cases of this kind, the existence of privity of contract between the parties is essential to the establishment of a contract of indemnity be tween them. And under the operation of this rale the plaintiff is entitled to his remedy against Coxon.
The defendant's counsel relied a good deal upon the case of Sayles v. Blane. 14 Q.B. 205. There it was held that until the deed of traus. fer upon the sale of railway shares has been re. gistered by the transferee, whose duty it is to procure such deed to be registered, the trans. feror continuing the registered owner, is liable for all subsequent calls, and cannot, after he has been compelled to pay the amount of such calls, recover the same from the transferee, upon the common count for money paid to his use. But, as Mr. Francis pointed out, the decision in that case turns upon the nature of the count for money paid. It may also be pointed out that, although there had been intermediate dealings in the shares, yet these dealings had been dis. ragarded in the matter of the transfer, and the plaintiff had transferred direct to the defendant. Grissell v. Bristowe, L. R. 4 C. P, 36—a case in the Exchequer Chamber, on appeal from the Court of Common Pleas-recognized the rali-regard to the principles applied in the decision dity of the usage of the London Stock Exchange by which, in transactions between members of that body, there is an implied understanding that, on the purchase of stock or shares, the buying jobber shall be at liberty by a given day, called the "name day," to sub. stitate another person as buyer and so re- lieve himself from further liability on the contract, provided such substituted person be one to whom the original seller cannot reason- ably except, and that such person accept a transfer of the stock or shares, and pay to the original seller the price. In delivering the judgment of the Court, Cockburn, C.J., said that the Court had in the case "an admitted departure from the ordinary incidents of a con- tract of sale such as would have attached on a contract for the sale of shares if effected out- side the walls of the Stock Exchange."
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On the whole I am of opinion that, having
of the cases to which I have referred and of others which I bare examined, the plaintif has failed in establishing his right to the relief which he asks for against the defendant.
It remains to consider whether this view is alfered by the special circumstances of this case, that is, by the dealings of the defendant with the plaintiff with regard to the shares. As I have already said, the asking for and receipt of the dividends do not appear to affect the position of the defendant in relation to the plaintiff. Then is the case otherwise with regard to the payment of the calls by the defendant in April and June, 1894? I do not think it is. The evidence only goes to show that the defendant, whether from friend- liness or compassion or some other motive, came to the rescue of the plaintiff and paid certain calls on the shares which the plaintiff was liable The case of Castellan v. Hobson, L. R. 10 to pay. In making these payments the de-
15
25th May.
IN SUMMARY JURISDICTION,
BEFORE MR. JUSTICE WISE (PUISNE JUDGE.)
SMITH V. THOMAS,—-AN IMPORTANT POINT FOR BOARDERY.
In this case A Findlay Smith, proprietor of the Peak Hotel, sued J. P. Thomas, R.N., chief cugineer, H. M. Naval Yard, for $12-75, damage to a window.
Mr. Francis, Q.C., (instructed by Mr. Gedge) appeared for plaintiff. Defendant conducted
his own case.
Mr. Francis said defendant had been residing as a lodger for the last 18 months in the Peak Hotel, together with his wife, daughter, and servant. The suit was originally commenced for the sum of $176 85, but the money had heen paid into court with the exception of 1275 for a broken pane of glass, for which defendant contended he was not liable. De- fendant occupied a couple of rooms in the north-west corner of the building, and attached to the rooms was a bath-room the windows of wl opened outwards. Plaintiff's case was that the windows were iu perfectly good con- dition, properly secured and fastened, that the arrangements for keeping each shutter open were perfectly sound, and that on April 8th, when a strong wind was blowing, defendant so carelessly opened a window, or fastened it back so carelessly after he had opened it, that it broke away from its fastening and shut with such force that the glass was broken. glass was rather heavy plate glass and the actual cast of repairing was $13, but the amount appeared on the bill as $12.75, for which amount they were sning. Mr. Francis proceeded to quote cases to show the liability of defendant.
The
He added that when the window had been broken defendant reported the fact to the mana- ger of the hotel, and at the end of the month when his bill was sent in he refused to pay the $12.75 charged for the broken window. Counsel read some correspondence which had taken place between the parties. In one of his letters defendant said the window was broken by the force of the wind assisted by a defective fastening, and therefore he contended that he was not liable for its replacement.
A room boy at the Peak Hotel deposed that on the afternoon of the 8th of April defendant told him to send for a coolie as a pane of glass was broken. On going into the bath room he saw that a pane of glass was broken. On the morning of the same day he saw that the window was shut.
A coolie employed at the Peak Hotel gave evidence as to sweeping away the broken glass in the bath-room.
The carpenter was also called, but he said nothing material.
Albert Denison gave evidence as to the window fastenings, which be examined on May 9th.
G. J. Casanova, manager of the Peak Hotel, said that between April 6th and April 10th defendant told him the window banged against the wall and broke.
Mr. Francis, at this point, said he was in-
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