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

Budenham v Phillips [1830] NSWSupC 66

set off, promissory notes

Supreme Court of New South Wales

Dowling J., 14 September 1830

Source: Australian,  17 September 1830


CIVIL COURT.  THURSDAY. SEPT. 14. -  Budenham v. Phillips.  This case being likely to establish an important precedent in the trading world, excited considerable interest.  Mr. Justice Dowling was the presiding Judge.  A. B. Spark and Innis, Esquires, were the Assessors.  This was an action of assumpsit, to recover £111 some odd shillings, for goods bought at auction by the defendant, who, understanding distinctly that those goods, with others, were the property of a gentleman who was indebted to him, bid to the amount of £112 odd; and, when called on to fulfil the condition of sale, which was an approved bill at three months, for any purchases above 20l., tendered an over-due promissory note of the gentleman in question, which plaintiff, as the auctioneer, refused to accept in payment; and the defendant, resolving to try the question, this action was brought.  Mr. Norton appeared for the plaintiff; Messrs. Foster and Poole for the defendant.  Mr. Justice Dowling ruled, that the Assessors were bound to find for the plaintiff, on the facts of the case, any application as to the statute of set-off being reserved for the opinion of the three Judges, which will probably be delivered on Saturday (to-morrow).[1 ]



Forbes C.J., Stephen and Dowling JJ, 2 October 1830[2 ]

Source: Dowling, Proceedings of the Supreme Court, Vol. 47, Archives Office of New South Wales, 2/3230[3 ]


[p. 1]

Judgment[4 ]

Dowling J At the trial of this case before me, two points were reserved for the consideration of the Court, first whether the action as an action for goods sold and delivered was not brought too soon, & 2d whether under the circumstances of this case the deft. had a right of setting off an overdue bill of Exchange & also this amount of certain sundries, against the price of the goods.

[p. 2] Upon the first point, I am of opinion that the action for goods sold  & delivered was not brought too soon, & that the plf was not bound to declare upon the special contract.  This was a very ante objection, and being quite beside the merits and the justice of the case, I think we ought not to sanction it, unless we feel ourselves fettered & bound by the most irresistible authorities.  Whatever deference is due to the authority of the cases of Mission v Price[5 ] and Dutton v Solomonson[6 ] so strongly relied upon in argument I think this is distinguishable from those cases, & that we may decide this case on its own peculiar circumstances. Be it remembered, however, that Mission v Price was not an [p. 3] unanimous decision, for Lord Ellenborough differed from the other judges, & in Dutton v Solomonson the Court felt itself borne down rather by the weight of authority than by a conviction of the soundness of the principal upon which the direction was founded, & it is quite evident that all the judges in both cases acquiesced in the objection with very great repugnance.  In those cases, however, there was an express contract for time, and the goods were sold absolutely & without condition, upon credit.  Now in this case there was no absolute contract binding upon the plf to give credit at all events.  By the conditions of sale the goods under 20 £ were to be paid for in cash; and above that sum, ``an approved endorsed bill at 3 months will be taken ."  Now it is clear from this condition [p. 4] that the vendor reserved to himself the right of determining whether he would or would not take such a bill in payment as the vendee might give him; and if such a bill as he approved of was not tendered I apprehend that the vendor was at liberty to withdraw his offer to give credit of 3 months, & sue upon an indebitatus assumpsit for goods sold & delivered.  But in this case the deft upon being applied to for payment does not stand upon the right to have credit, but he repudiates the contract altogether, saying to the plf. ``I cannot acknowledge you as a principal in the transaction - they were not your [p. 5] goods - I hold an over due acceptance of the party to whom they really belonged, & I shall deliver that up in payment of the goods." - Under such circumstances as these, I think the plf was at liberty to withdraw his offer to give credit, and declare for goods sold & delivered without waiting, for the expiration of three months, the offer of credit being on a condition, of which the Deft would not avail himself.

Then as to the second, which is the main and substantial point, I think under the circumstances that we ought not to direct a verdict to be entered for the Deft, but I am of opinion that there ought to be a new trial granted.  The case of Williams v Millington[7 ] establishes that an auctioneer may maintain [p. 6] an action for goods sold & delivered in his own name, but it is no less clear that he is bound by his own representations made at the time of the sale as to the ownership or quality of the property sold, whether those representations be true or false.  The question in this case is whether the deft had a right of setting off the debt due to him from Mr Baxter in payment of the goods sold by the Plf to the Deft by auction.  At nisi prius, I was inclined to think that this question must be determined by reference to the conditions of sale, which had been read on the defts presence and hearing.  The goods having been sold under the following condition ``Terms of payment [p. 7] under cash 20£ above that sum an approved endorsed bill at 3 months will be taken," & the deft having purchased the goods with full knowledge of that condition, I thought he was precluded from setting off a debt due to him from the supposed real owner of the goods, in payment of the lots so purchased.  No case was cited at the trial in contravention of this principle & I so ruled upon the first impression, without any previous opportunity for consideration, a searching for decisions.

Since then the cases of Coppin v Walker[8 ] & Coppin v Craig[9 ] have been brought under the notice of the Court, and it appears to me that under the present state of this case, as it appeared at the first trial, that they are authorities in the defts favour, [p. 8] although they want the sanction of the eminent judge who was at that time at the head of the Court of Common Pleas, I mean my Lord Chief Justice Gibbs.  In these cases the general right of set off in the case of a sale of goods by auction is not denied.  Indeed it seems not to have been questioned. Both those cases seem to have been decided upon the principle that the property in the goods was bound by the auctioneers representations, although it turned out afterwards that the goods did not all belong to the persons whose effects they were represented to be.  It is to be observed that one of the conditions of [p. 9 ] sale in those cases, was ``that each lot should be paid for, before it was removed from the premises", & notwithstanding that condition the Court held that the deft had the right of setting off Appleton's debt to the amount of the goods purchased.  It is true that in he first of those cases the deft, had after the sale, settled with the owner of the goods giving him credit for the value of them, & delivering up he overdue bill to him, but in the second case there was no such settlement, & still the court held that the purchaser was entitled to set off the debt due to him from the reputed owner of the goods.  Now what were the circes[10 ] of this case? The Plf being an auctioneer announces in a printed Catalogue certain household furniture for sale, describing it in terms, as the property of [p. 10] H.M.A.G. removing to concord" The sale takes place at the house of the gentleman so ascribed to be the owner of the property.  The deft having a claim upon H M A G on an overdue bill, & for goods sold & delivered to the amount of £112..6.3 attends the sale for the purpose of bidding, but having doubts in his own mind as to the representation in t he catalogue that the effects are really the property of HMAG  he distinctly asks the Auctioneer whose property he was going to sell, & he is told distinctly that it belongs to the gentleman whose name is mentioned din the catalogue; & under that reassurance he is induced to bid [p. 11] for goods to the amount of £111..5..11.  Under such circumstances, the cases of Coppin v Walker & Coppin v Craig are authorities for holding that the deft had a right of setting off the debt owed to him from HMAG in payment of the goods so sold as the property of his debtor.  Inasmuch however as this is a question of considerable importance, and may bind future transactions we think it ought to undergo a fresh trial in order to determine whether the auctioneers representations whether true or false shall under all circumstances bind the right of property entrusted to him for sale.



[1 ] See also Dowling, Select Cases, Archives Office of N.S.W., 2/3466; Dowling, Proceedings of the Supreme Court of New South Wales, Vol. 45, Archives Office of New South Wales, 2/3228, p. 65; and Vol. 48, p. 19 (2/3231).  The Select Cases commenced its account of the case as follows: "Where goods were sold by auction and the Defendant became a purchaser, Held that he might set off the amount of an overdue bill of exchange of the owner of the goods in payment of the lots purchased."

[2 ] The notebook states (p. 1)  that the judgment was delivered on 22 January 1831.

[3 ] A number of sentences were struck out, and are not reproduced here.

[4 ] Marginal note in manuscript: " When I want to court this morning I found that Forbes CJ & Stephen J were unable to attend from illness.  I therefore adjourned the Court to Monday 11th Oct."

[5 ] Marginal note: 4 East. 147.

[6 ] Marginal note: 3 B & P . 582.

[7 ] Marginal note: 1 H. Bl. 81.

[8 ] Marginal note: 2 March 497.

[9 ] Marginal note: 2 Munn [?] 501 S.C. 7 Taunt.

[10 ] "circumstances"

Published by the Division of Law, Macquarie University