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Decisions of the Superior Courts of New South Wales, 1788-1899

Macarthur v. Thompson [1806] NSWKR 3; [1806] NSWSupC 3

promissory notes - currencies, exchange rates - contract law, development of

Court of Civil Jurisdiction

Atkins J.A., 27 October - 4 November 1806

Source: Court of Civil Jurisdiction Proceedings, 1788-1814, State Records N.S.W, 2/8149 [1]

[36] John Macarthur esq. v. Andrew Thompson. ¿341.10. Plea nil debet.

The plaintiff produced a note of hand for 99 bushells storeable wheat of the defendant payable to Thomas Rickerby or bearer. Acknowledged by defendant to be his note.

Mr Richard Fitzgerald sworn. Question by plaintiff. Do you know that note?

Answer. Yes.

           2. From whom did you receive it and on what account?

Answer. From Thomas Rickerby as part payment of some breeding ewes I sold him belonging to Mr Macarthur.

           3. You reside at Hawkesbury?

Answer. Yes.

           4. Can you state to the court whether defendant does not feed himself and family with wheaten bread?

Answer. I cannot.

           5. You occasionally come to my house on business?

Answer. Yes.

           6. When you take refreshment there what bread do you get?

Answer. Corn bread some time past.

           Question by court. How long is it since you received this note from Rickerby?

           Answer. 16 or 18 months.

           Question by plaintiff. Have you not demanded payment of that note from defendant?

           Answer. Yes about the time of the flood.

           Thomas Rickerby sworn. Question by plaintiff. Do you know that note?

Answer. Yes.

           2. On what account did you pay that note to Mr [Fitzgerald]?

Answer. In part payment of some sheep belonging Mr Macarthur

           [37] 3. Do you know whether defendant has lost any part of his crops of wheat by the flood?

Answer. Not that I know of. I never heard that he did.

           A note of hand for 308 bushells of storeable wheat being shewn to the witness, Rickerby saying he says it is his and payable to Mr Macarthur or bearer part of which was paid by a note of defendant for 99 bushells.

           4. State to the court whether I did not in consequence of your losses by the flood tell you that I should forbear pushing you for the balance of your note being ¿142.3.4?

Answer. Yes you did.

           5. Has not the defendant since the flood fed his servants on wheaten bread?

           Answer. I cannot speak positively to it.

           Mr Hannibal Macarthur sworn. Question by plaintiff. What sort of bread do you eat at my house?

Answer. Indian corn bread.

           Mr Thomas Arndell sworn. Question by plaintiff. Does it come within your knowledge whether the defendant has sustained any loss in his crops from the late flood?

           Answer. I cannot say. I have not heard that he has.

           2. Were you not employed by order of the Governor to ascertain the losses of the settlers at the Hawkesbury?

Answer. I was

           3. And in the report made to the Governor have you reported any loss sustained by defendant?

Answer. I do not recollect that there was any.

           4. Can you state to the court the quality of the bread that the defendant has fed his family and servants with since the flood?

           Answer. It is coarse common bread I believe, mixt with corn and wheat which is given to the servants but [fine] bread at his own table.

             [ These words deleted: 5. Does the evidence mean to say that when he has partaken of any refreshment at defendant's house he has eaten coarse bread mixt Corn and wheat.]

           [38] Question by defendant. Do you from living close to my house and your knowledge of me and my concerns know the great quantities of wheat which I could have commanded before the flood swept it away and that I am at the present loss and disappointment of the same?

Answer. I do. You have often expressed to me that you have lost to the amount of 3000 bushells in debts that were owing you.

           Here the plaintiff wished to ask another question to the evidence, but the court was of opinion that no further question can be put by him after having been cross examined by the defendant.

           Mr Garnham Blaxcell sworn. Question by the plaintiff. In the occasional visits to the Hawkesbury when you put upon the defendant's house do you eat wheat or corn bread?

           Answer. I eat bread of the best quality.

           Question. When you visit me at my house what bread do you there eat?

Answer. Maize bread.

           Question by defendant. Was you before the month of July last or before the flood in the habit of eating corn bread at plaintiff's house?

           Answer. Before the flood I was not.

           2. What value was wheat when my note for 99 bushells was given and became due?

           Answer. Wheat was I believe received into the store at 7 shillings and 6 pence per bushell.

           3. Do you not expect to pay for such entertainment as you may have at my house according to the price of the times?

           Answer. I suppose you would make a charge accordingly.

           4. Has it not been the case generally that all wheat notes brought before the last civil court since the flood but granted and [39] due before that time has been ordered to be paid in money at their original value, that is at storehouse price, and has it not been in my own case so decreed?

           Answer. I do not at this time recollect having seen wheat notes without expressing the sum for which that quantity of wheat was to be paid. In several cases at the last civil court such notes were ordered to be paid in money, but in many instances where the person giving them had not sustained damages by the flood they were ordered to be paid part in wheat.

           5. Can you speak positively as to my own case?

Answer. I cannot.

           Thomas Parsonage sworn. Question by plaintiff. What price did you pay last week for a bushell of wheat?

Answer. Between ¿3 and ¿4.

           George How sworn. You are the printer of the Sydney Gazette ?

Answer. Yes.

           2. What is the current price of wheat from the best information you have been able to obtain?

Answer. ¿3.10 to ¿3.15 per bushell.

           Question by defendant. What price was wheat the latter end of March and April 1805?

           Answer. About 8 shillings.

           The evidence on part of plaintiff here closed and defendant delivers into court the paper no. 1 read by clerk, and calls Richard Fitzgerald who being sworn, question by defendant. Did not Mr Rickerby pay you the note in question for old sheep at 49 shillings each before said note was due?

           Answer. He paid it me for ewes, but cannot say whether or not it was due at the time at 7 bushells wheat per ewe.

           [40] 2. Did you not consider the wheat at 7 shillings per bushell in this transaction and his not payment being made to Mr Macarthur or his concerns, for the sheep at this rate in money?

Answer. No wheat was to have been paid at 7 shillings per bushell, but payment has not been made to Mr Macarthur or his concerns in money for those ewes.

           3. Has not such like sheep been paid in money and purchased in a similar manner?

Answer. I sold sheep at that time for money and wheat.

           4. After the bargain for sheep had been made for wheat, was not money paid in lieu of it and at what rate was the sheep per head in money?

           Answer. Yes and at two pounds nine per head.

           5. If this said note had been brought to me when due for payment have you any reason to believe it would not have been paid?

Answer. I think it would have been paid in money.

           6. Did you receive orders from plaintiff in writing or otherwise to pursue payment of the note in question? If so produce such order.

           Answer. I received a note from Mr Macarthur desiring me to get the 99 bushells of wheat from you. I have not the note.

           7. At what time was this note sent to you?

           Answer. Just before it, or after the flood.

           8. Did you ever ask payment of that note before?

Answer. I cannot recollect but as far as memory goes I think I did.

           9. Has plaintiff to your knowledge made proposals to some or any of the people at the Hawkesbury endebted to plaintiff to take their notes and pay at a future period at the rate of one guinea for every bushell of wheat or 7 shillings value mentioned in their notes similar to the one in question?

Answer. No. Plaintiff wrote to me to get a memorandum from Biggers to pay him one guinea per bushell for a certain note [41] of bushells of wheat; that he had allowed him that price for in the sale of a horse which Biggers could not pay in consequence of a stack of wheat which he purchased from Mr Hobby's deceiving him as to the quantity.

           10. Does it come within your knowledge that there was one guinea per bushell allowed for the horse or was it on a note of hand for wheat relative to an old contract?

Answer. I think it was for the horse. Plaintiff told me so.

11. Look at the paper now produced. Is it your hand writing?

Answer. Yes.

Question by court. You say that the note if offered for payment to defendant would have been paid in money. Give your reasons for stating so.

Answer. Because at that time defendant owed a considerable quantity of wheat to Mr Palmer.

Question by plaintiff. You have been asked by the defendant whether I have not employed you as my agent to demand acknowledgements of one guinea per bushell for wheat owing to me that was contracted for at the rate of 7 shillings per bushel. You have answered no, now I require you to answer to this court whether on a note of Thomas Rickerby on wheat store is one ¿142.0.4, whether on a note of Mary Childers for 160 bushells or a note of Edward Robinsons for 119 bushells? Did I not direct you on your representing that these people had suffered severely from the flood, to inform them I should forbear pressing for the payment of the [balance] due to me or requiring any change of the condition of their original agreement except that of delivering the wheat at my own house instead of delivery at the Hawkesbury next harvest?

Answer. You did to that effect by letter.

[42] 2. The defendant has asked you whether if you had demanded payment of his note in wheat when due it would not have been paid. You have answered not in wheat but money. Now I ask you whether from your knowledge of the extensive concerns of the defendant the quantity of wheat he must unavoidably consume every week and from the quantity which he had in hand when you first demanded payment since the flood whether to your judgment and belief he could not then have paid it?

Answer. He could at that time have paid it in wheat. When I asked him for it he did not deny having the wheat but said if he gave the wheat his business would be at a stand as he had no more than would answer for his men.

3. Did you ever believe the latter part of that answer to be the truth or an evasion?

Answer. I was told he had 160 men at work and that being the case they would have considered what wheat he had in hand.

Question by court. Has the note as it is as follows

"Sir, I will settle with you for ¿35 on account of Mr Thompson's note.

                                                                                   I am etc.

                                                                                   Rd Fitzgerald

                                                                                   July 10th 1806

To Jn o. Macarthur Esq r."

any reference to the note for 99 bushells of wheat?

Answer. None.

           2. Then what has it a reference to?

           Answer. As part payment of a different concern.

           Question by plaintiff. Were not my particular orders to you to take nothing but wheat from defendant as payment of his note of 99 bushells wheat?

           Answer. Yes.

           Question by court. Did not you about the time you was asking for the 99 bushells wheat after the flood know that the following note

[43] " Parramatta 19th Decr. 1805

I hereby promise to deliver Mr Macarthur or his order at my granary at the Hawkesbury whenever demanded (and that to be before next June) 428 B of good wheat on condition of receiving 60 Gall s. of Rum from the Argo Stores lodged in Government Bonded Stores. Andrew Thompson."

was paid or to be paid in money and that the note to Mr Macarthur making yourself debtor to him for ¿35 alluded to the note for 99 bushells wheat?

Answer. No.

           Thomas Rickerby sworn. Question by defendant. Did I not speak to you about the note in question after it was due with a desire of taking it up?

Answer. Yes a long time after I had passed it to Mr Fitzgerald.

           2. Had you not some conversation with Mr Fitzgerald many months after said note was due, and did he not declare that he had never presented it to me or asked for payment?

           Answer. I cannot say how many months Mr Fitzgerald came to me to desire me to take my note back again, and he then said that he had not asked defendant for payment.

           3. Have you any reason to believe that I could not have paid the said note from the long time it was due until the last flood had it been demanded of me?

Answer. By no means.

           4. Do you not by living close and knowing my concerns know the great quantities of wheat due to me and which I could have commanded before the flood was swept away and that I am thereby at the loss and disappointment of the same at this time?

Answer. No, I do not.

           [44] Richard Clifton sworn. Question by defendant. Did not the court [decree] that you should pay ¿10.10 for a note expressing payment of 30 bushells storeable wheat and no sum of money specified due to me?

Answer. Yes.

           2. At the time the court so decreed did I not say that I was in want of wheat for my family and the court made answer that money was a legal tender?

You did and the court made that answer.

           Question by the court. Did you not plead before the court that you had lost all your wheat by the flood?

Answer. I did so.

           3. Had not you the same safe land that I had and other persons?

Answer. I lost some wheat as well as yourself.

           Question by plaintiff. You stated that Mr Thompson had left a considerable quantity of wheat. How many acres?

Answer. From 10 to 20 in wheat and barley.

           2. How many acres had defendant in cultivation at the farms adjoining yours?

Answer. From 80 to 100 acres.

           3. Do you not believe that defendant at all his farms at Hawkesbury, Nepean and elsewhere had at least 400 acres in cultivation in wheat and barley?

           Answer. I do not know.

           Mr S. Lord sworn. Question by defendant. What was the price of wheat at public auction from March to July 1805?

At Mr Cox's sale of wheat the price was from 5s to 3/9.

           2. What did you give for the prize wheat?

Answer. From 4s. to 5s.

           The defendant requiring until Thursday it is granted. Court adjourned.

[The court minutes then turned to another case, before returning to this.]

[51] The defendant delivers into court the paper no. 2 when the plaintiff requested permission to call fresh evidence on matters which he says is irrelevant to the subject before them. When the court [52] having taken the said request into consideration are of opinion that no further evidence in this cause can be adduced.

           Plaintiff requires time... granted...

           [53] 3rd November court met. The plaintiff being called on to proceed reads the paper no. 3. Court adjourned.

           4th November 1806. Court met.

           Verdict for plaintiff ¿34.13. Notice of appeal.

Richard Atkins, Thomas Moore, Henry Fulton.

Note

[1] On its face, this was a simple case for non-payment of a promissory note. Behind it however, were much more difficult legal and factual issues issues. In effect, wheat was a currency and the case concerned exchange rates between money and kind. The note was payable in wheat rather than money. Was the value of the wheat to be calculated at the date of making the note, at the date it fell due, or even at the date of trial? After the note was made, a dramatic flood destroyed much of the colony's wheat crop, causing a sharp rise in the price of wheat. Would the court order payment of the note in kind rather than in money?

The case hints at the development of contract law. Would fairness be taken into account in deciding the case? Was the colony principally a place of trade in which contracts would be strictly enforced? Or was it more traditional, a place where what we now see as an older model of contract law was in place, one based on fairness? The colonial community was aware of this clash of values. One side argued that conscience could not allow a windfall profit to be obtained through litigation. The other said that "the literal tenor of every engagement ought to be fulfilled, and that specific contracts must be sacred and binding." (Sydney Gazette, 26 July 1807 at 2.)

By its verdict, the court accepted the fairness model, putting the value of the note at the pre-flood price of wheat. The plaintiff had claimed ten times as much.

Scholars of today's law of remedies would also ask what was the appropriate date of assessment of damages for breach of contract, the date of breach or the date of trial? The conventional answer now is the date of breach, though recent cases hold that the later date can sometimes be used.

           John Macarthur was the well known military officer who would soon be engaged in the coup against Governor Bligh. Andrew Thompson was a former convict. McArthur sued on Thompson's note.

           "Storeable" wheat was that of sufficient quality for the government to buy it at one of its stores. It had an accepted value and standard quality.

           See H.V. Evatt, Evatt, Rum Rebellion, chapter 18; B. Kercher, Debt, Seduction and Other Disasters: the Birth of Civil Law in Convict N.S.W. (Federation Press, 1996) at 148-152.

Published by the Division of Law, Macquarie University