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

De Mestre v Hindson (1835) NSW Sel Cas (Dowling) 480

partnership - foreign attachment - New Zealand, trade in flax

Supreme Court of New South Wales

Forbes C.J., 31 April 1835

Source: Dowling, Select Cases, Vol. 4, Archives Office of New South Wales, 2/3463[1 ]

[p.14]

[1835]

[31st April]

 

[p.16] [After a trading partnership between A & B had been dissolved B. sold goods to C on his accounts:  Held that a creditor of A could not attach the goods in the hands of C for a debt due him.  And a multo fortiori he could not attach the goods without making B a party to the attachment even supposing that all partnership accounts between A & B had not been adjusted.]

De Mestre v Hindson

R. Jones, Garnishee

[p.14] This was a proceeding by foreign attachment.  The Judgment of the Court was delivered by

Forbes CJ.  This proceeding by foreign attachment is under the local ordinance 2 W. 4. No 7.  It came before the Court for the first time on the 10th February last, when the Plf established his debt against the Deft to the amount of 414£ being the amount of two promissory notes given byHindson in his individual character to De Mestre dated respectively the 16th June 1832 for 150£ & 3rd July 1832 for 200£ with interest at the usual rate of the Colony.  The deft being absent from the Colony at the commencement of this action, an attachment was served upon certain quantities of flax or rather on the money due for the flax in the hands of Richard JonesEsq a Merchant of this Colony, upon the ground that the flax was the joint property of the DeftHindson and his partner James Harvey, then & still residing at New Zealand.  The [p.15] Plf having proved his debt the judgment of the Court was given accordingly, but the farther proceedings in the Case, as they respected the property attached in the hands of Mr Jones, were adjourned until a future day.  The parties, that is to say, the Plf's counsel & the counsel employed by Mr Jones the garnishee, on behalf of his principal Harvey, have since been respectively heard, & the evidence taken of such witnesses as they respectively deemed necessary.  It appears upon the evidence that on the 11th October 1830 Hindson & Harveyentered into a copartnership for the term of three years, to be carried on between this Colony and New ZealandHindson to furnish the Chief part of the Capital, to consist of goods sent out from this Colony, to exchange for flax with the natives of New Zealand, and the Deft to reside at New Zealand and carry on the business in person, - that the goods supplied by Hindsonamounted to about 11 or 1200£.-  that Harvey proceeded to New Zealand, and after his arrival made divers shipments of flax to his partner Hindson. [p.16]  It does not precisely appear what was the value of those shipments because the freights from New Zealand are stated to the very high, and to form the principal value of the flax on its arrival in Sydney.  It further appears thatHindson became embarrassed about September or October 1832, and absconded from the Colony without leaving property sufficient to satisfy his creditors, or as the evidence goes to prove to pay them six pence in the pound.  Shortly after the absconding of Hindson, his agents,Francis Stephen, & Francis Matthews consulted together as to the Course to be adopted in respect of Hindson's New Zealand partnership and came to the conclusion that as the supplies for the trade could no longer be continued from this Colony, it would be proper to close the concern and with that view it is in evidence that Watson wrote to Harvey.  Mr Stephen states that in the letter to Harvey it was expressly said, that they should consider the partnership as dissolved.  No direct answer from Harvey was [p.17] received, but Watson states that in a letter subsequently received by him from Harvey, he alluded to his former communication, and stated that Hindson was indebted to him.  Watson adds, that he knew the concern to have been a losing one, and he believed at the winding up, that Hindson would be indebted to Harvey.  It further appears by the evidence that in the month of October 1833, Harvey wrote to Samuel Ashmore in Sydney, authorizing him to sell 100 Tons of flax, there at some Island in the neighbourhood of New Zealand; that Ashmore upon this authority accordingly sold the flax to Mr Jones on account of Harvey, and by the terms of sale, the flax was to become the property & be at the risk of Jones, as soon as it was delivered on board ship at the Island where the ship then lay.  Upon the faith of the sale of the flax, Harvey drew bills upon mr Jones part of which he accepted before the writ of attachment was served in this case, and there is a balance as [p.18] Mr Jones states of about 300£ still due on account of the flax.  It is this debt and not the flax, upon which the present process attaches.  The flax became the property of Jones, on its delivery on board the ship which brought it to this Colony.   Upon this state of facts the question raised is whether Hindson the deft had such an interest in the debt due from Mr Jones, on account of the flax sold to him by Ashmore, on account of Harvey as might be attached under the foreign attachment act.  I am of opinion that Hindson had not an attachable interest in the debt due from Jones.  The attachment act is an innovation upon the common law, and must not be extended beyond its own provisions.  The act requires that the debt attached in the hands of the garnishee shall be a debt due from such garnishee to the Plf's debtor.  Now the only question is this, - is the balance of 300£ admitted to be due from Mr Jones, for the flax he purchased of [p.19] Ashmore, due to Harvey or is it due to Hindson & Harvey.  I am of opinion that it is a debt due to Harvey.  Without going into the evidence to ascertain whether the partnership between Hindson & Harvey was dissolved by the acts of the parties or the misconduct of one of them, before the expiration of the time stipulated for its termination, or whether the flax shipped on board of the Bardaster was or was not, the proceeds of the goods originally supplied by Hindson, or otherwise the product of the partnership stock, it is clear that the Copartnership expired on the 11th Oct 1833, and that the sale of flax to Mr Jones byAshmore the agent of Harvey, took place after that period.  Both Ashmore & Jones speak ofHarvey as the only person with whom they dealt Ashmore says he received a letter from Harveyin October 1833 authorizing him to sell the flax, & that he afterwards sold it to Jones on account of Harvey & Jones says he bought from Ashmore on account of Harvey, & has already paid in part for it by accepting bills drawn on him by Harvey.  [p.20]  Upon the face of it therefore, this is clearly not a partnership transaction between Jones and Hindson, & Harvey during the subsistence of the partnership, but it is a separate transaction with Harvey alone, after the partnership had expired.  Supposing an action by Harvey against Jones to recover the balance of the debt, it would certainly be no defence upon the evidence before the Court, that it was a partnership debt to Hindson & Harvey; neither could the debt due from Jones, on this evidence have been taken in execution at the Suit of De Mestre, against Hindson, even assuming that it was a partnership debt from Jones, because debt at common law, cannot be taken in execution.  But supposing the attachment to go further than an execution, yet we must look at the act of the legislature to see how far it does go.  It is true that after the Copartnership between Hindson & Harvey ceased, Hindson had a right to one account against Harvey, & might have recovered any balance due to him, [p.21] on a settlement of accounts between them as a debt and such debt might have been attached in the hands of Harvey.  But Harvey must have been made a party to the attachment.  The necessity of his being so, is not founded on a merely technical rule; it is essential to the administration of the justice and equity of the Act, that the person, in who shewed the debt claimed as being due to the Plf's debtor may be attached should be made a party to the original proceeding and examined by the Court.  Now Harvey is not before the Court.  He is no party to this proceeding.  He cannot be examined as to whether he is indebted to Hindson in their partnership concern or not.  The equity of the proceeding therefore fails altogether as against him and I am bound to decide that this attachment of the debt due to Harvey from Jones, be dissolved.

Attachment dissolved.

 

Notes

[1 ] For another foreign attachment case, see Brown v. Douglass, 24 November 1834, Dowling, Proceedings of the Supreme Court, State Records of New South Wales, 2/3288, vol. 105, p 131.

Foreign attachment was refused when a defendant was in Moreton Bay, because that penal settlement was within the colony: Spooner v. HaySydney Gazette, 21 October 1834;Australian, 21 October 1834; Sydney Herald, 16 October 1834.

For another 1835 partnership case, see Paul and Co. v. Long, Dowling, Select Cases, Vol. 7, Archives Office of New South Wales, 2/3465, p. 77 (holding that a person who contracts with a partnership and pays money into court admitting liability, is unable to require proof of the existence of the partnership).

Published by the Division of Law, Macquarie University