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

Hartwell v Campbell (1836) NSW Sel Cas (Dowling) 76; [1836] NSWSupC 48

covenant, separate liability clause - contracts, interpretation of - injunction - mortgage, power of sale

Supreme Court of New South Wales

Forbes C.J., Dowling and Burton JJ, 27 February 1836

Source: Sydney Gazette, 1 March 1836[ 1]

Hartwell and others v. Campbell.  In this case a demurrer had been filed to the form of action, which Mr. Foster moved should be made absolute.  The action was brought to recover a large sum of money, on covenant and indenture, due to the house of Fairlie, Bonham and Co. Calcutta; the action had been brought by all the parties instead as Mr. F. argued, separately by each party to the deed, so that he could recover his own share.

Mr. S. Stephen in opposing, observed that this action was brought upon a joint bond, the parties had consolidated their interest, and the sums due were to be paid from a joint fund, consequently the action was brought jointly.

The Court would reserve its judgment.

 

 

Forbes C.J., 5 March 1836

Source: Dowling, Select Cases, Vol. 7, State Records of New South Wales, 2/3465[ 2]

[p.94] [1836

Saturday

5th March]

[A being indebted to B & C & D severally and respectively, covenanted in one deed to which the three were parties, with the said B & C & D. & every of them, & their several & respective Executors, administrators, & assigns, that he, his heirs &c shall & will pay to them according to their several and respective interest therein", six instalments upon the whole amount of their debts: - Held that this was a several [p.95] covenant, & that each was bound to sue seperately [sic] for his share of each instalment as it became due.]

 

[p.94]

Hartwell and others v R. Campbell

Covenant upon an indenture of the 12th September 1833.  The deft being indebted to three several mercantile houses (the Plaintiffs) in several & distinct sums, and they being severally mortgagees of certain lands & premises of the Defts and being willing to extend the time for the payment of their respective debts, & take payment by instalments with interest, they appointed one common agent to execute the deed in question on their behalf respectively.  The deed after reciting the amount of the several debts of the three houses, and that the whole together amounted to £19426.14.3, & that the Deft covenant to pay that sum in six certain instalments, to become due & payable with interest at 5 per cent, at the days & times therein mentioned, a breach was averred in the non payment of the second instalment when it became due.  The deft waived oyer of the deed & set it out, & then demurred to the declaration, [p.95] for that the action should have been brought by the plaintiffs severally for their respective shares instead of being a joint action.  The covenant set out in oyer was, ``And the said R. Campbell doth hereby for himself, his heirs, executors & administrators covenant, promise & agree to & with the said G.H. and J.I. and A.G.J.H.T, and D.C. and the said W.W. and every of them & their several and respective Executors administrators & assigns that the said R.C. his heirs &c shall & will pay to them according to their several & respective interests therein the said several sums of £4849.2.7. and £9598:17:3. and £4978:14:5, amounting together to the sum of £19426:14:3. together with interest thereon for the same at the rate of 5£ for 100£ for a year to be computed from the 31st Decr 1832, on the several days or times, & in the parts & proportions herein after mentioned, that is to say" then setting forth six several instalments of the whole sum to be paid respectively on the six several days mentioned, with the interest stipulated.  Joinder in demurrer.

[p. 96]Foster in support of the demurrer.  This covenant is clearly several and not joint, and each house should have brought its action, and not joined in one.  The deft covenants to pay every of them & their several & respective executors, administrators & assigns, according to their several & respective interest in the said several sums", enumerating the three debts of the three houses.  Here the interest of the three houses is several & the covenant is several.  If the deft was to pay to all, then one might recover the whole, which cannot be.  He cited Cerbantes v James (10 B&C. 410) Withers v Bircham 3 B&C. 254. 5 D&R. 106. 8 Taunt. 245. James v Emery 5 Price. 529. 2 Moore. 195.

Stephen Contra.  These plfs are all parties in the Common fraud out of which the whole debts are to be paid.  It was clearly intended that the should be jointly interested & in the spirit of that intention the Deft has already paid one instalment.  The plfs are trustees for each other, & they have bound themselves together for the performance [p.97] of one common object, namely, the giving time to the Deft, without taking advantage of each other.  Their interests are consolidated, & therefore they may sue jointly even though the deed contains words of severalty.  All the Plaintiff's have signed the deed by their one common agent, which shews what was the intention of the parties.

Foster in reply.  The Deft covenants to pay the executors of each party, which is decisive of the legal effect of the deed.

C.A.V.[ 3]

Forbes C.J. now delivered the Judgement of the Court: -

The only point raised on the demurrer is whether the covenant of the Deft with the plfs is a joint or several covenant.  It turns entirely on the construction of the words of the covenant, & the principles of law applicable to the construction of covenants.  The rule is, ``that where the interest of the covenantees is several, the covenant shall be taken to be several, notwithstanding the words [p.98] of the covenant are joint".  The application of this rule must depend upon the words of the Covenant.  The text is cited as law in 1 Sanders 153. - Eccleston v Clipsham & has been so held over since.  Lord Coke in Slingsby's case in his illustrative way, says, ``A. B. C. with them and ``quolibet errum"; the latter words make the covenant several", and adds ``although sundry persons may bind themselves and et quein libet errum, & so the obligation shall be joint or several, at the election of the obligee, yet a man cannot bind himself to three, & each of them, to make it joint, or several at the election of several persons, for one & the same cause, for the court would be in doubt for which of them to give judgment".  Now applying this text t the present case, there does not appear to be a vestige of a joint interest between these parties.  The original debts are different & in different rights, although the parties join in the same deed.  The distinctness of the accounts is preserved throughout [p.99] and distinct survivorship & representation observed.  The words of the Covenant are these: - ``And the said R.C. doth hereby for himself his heirs, executors and administrators covenant & promise and agree to & with the said G.H. & J.J. and A.G, J.H.T, & D.C. and the said W.W. and every of them, & their several and respective executors, administrators & assigns, that the said R.C. his heirs, executors, or administrators shall & will pay to them according to their several & respective interest therein" - the sum of one sixth of the amount due, this sixth applying to each particular sum.  That is to say, the Deft covenants with the several covenantees that he will pay each of them the money due to him.  The point therefore upon which our judgment is founded is, that the debts due by the Deft to the respective houses of F.B&C. & F.G.&Co. & J.G. & Co. are [p.100] distinct debts.  Each house had, and its representatives now have, an exclusive right to the debts due to it, & an exclusive cause of action for the detention of such debt.  There is nothing in common between any two of the houses.  They have distinct & separate debts, distinct & separate rights of action, and their having  common agent does not alter the case.  They must therefore sue seperately [sic] under the words of their Covenant ``according to their respective interests".

Judgment for the Deft on demurrer.

 

Dowling A.C.J., and Burton and Kinchela JJ, 2 July 1836

Source: Sydney Gazette, 7 July 1836[4 ]

 

Campbell v. Hartwell and others. - Judgement. - This was a bill claiming an injunction to restrain the defendants from selling certain property situate in Sydney, under a mortgage deed, executed in 1811.  The circumstances of the case were these: in 1811, plaintiff was indebted to defendants and granted a mortgage of certain property, which gave defendants a power of sale, in case the principal and interest, was not paid.  In the year 1833, he granted another deed which did not give a power of sale.  It stipulated that the amount was to be paid by regular quarterly instalments, and defendants bound themselves not to disturb the property, but to accept the instalments as they became due.  A person named Thomas Steel, in the latter end of 1835, received a power of attorney, authorising him to receive the monies.  The first instalment, when due, was paid to him, but, before the second was due, plaintiff being advised that Thomas Steel had no power to receive for the whole of the defendants, refused to pay him.  On the 20th of Oct. 1835, Plaintiff was advised by Alexander Steel one of the defendants to pay the amounts to his agent Thomas Steel.  On December 30, 1835, Thomas Steel received a letter from plaintiff's attorney, requesting to know the power which he had.  On the 1st January, defendants' attorney wrote to plaintiff, requiring him to know when he would be prepared to pay the money, as according to counsel's opinion, the original power which Thomas Steel had received was sufficient authority for him to receive the money.  Plaintiff being advised that he could not pay the second instalment to either of the Steels, was anxious to pay the money into court.  In consequence of this, Steel advertised the property for sale.  The bill further stated that Steel had commenced this action in the names only of two parties in the firm, and claimed therefore, that they might be restrained from selling.  To this plea, all the defendants put in their demurrer.

The Chief Justice said - If the plaintiff had been guilty of any fault, the defendants could have taken possession under the original deed.  The bill did not charge them with offering the property for sale.  Admitting that the plaintiff had made out a claim for a special injunction, there were many of the defendants called upon to make a discovery of things they could have no knowledge of.  The present bill was complained of as multifarious.  It would have been sufficient to have confined the bill to the Steels alone, one of whom was an ostensible agent for the other, and was within the jurisdiction of the court.  After some further remarks he said, he considered that the bill must be dismissed with costs, and the demurrer must share the same fate.

 

Notes

[1 ] See also Australian, 1 March 1836.

[ 2] See also Australian, 8 March 1836.

[3 ] Curia advisari vult: the court wishes to be advised or to consider its decision.  This indicates that judgment was not delivered immediately.

[4 ]For the initial injunction restraining Hartwell from selling property under a mortgage, see Sydney Gazette, 21 June 1836.

Published by the Division of Law, Macquarie University