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

Jones v. Hustler (1842) NSW Sel Cas (Dowling) 402; [1842] NSWSupC 71

bill of sale

Supreme Court of New South Wales

Dowling C.J., Burton and Stephen JJ, 10 November 1842

Source: Dowling, Select Cases, Vol. 6, S.R.N.S.W. 2/3464, p. 263

The assignee of a bill of sale obtains an absolute right to possession upon default in payment of the promissory notes served by the bill and is entitled thereby to claim in trespass for interference with the goods which are the subject of the bill of sale.*

Trespass for taking, carrying away, and converting divers goods and chattels of the plaintiff. Pleas: 1. Not guilty; 2. Denying plaintiffs right of property; and 3. Leave and license. Issues thereon. At the trial before Stephen J. last term the plaintiff had a verdict for £125.

The case at the trial was this: Robert Murray who had kept the Wellington Inn at Paterson agreed to sell the household furniture and stock in trade on the premises to George Hoddle at the price of £546.1.3 who gave his four promissory notes for the amount payable in equal proportions at three, six, nine and twelve months dated respectively 2nd September 1841. In order to secure the due payment of the notes, he executed to Murray a bill of sale of the goods by way of mortgage of the same date, it being agreed that in case any one or more of the notes should be dishonored, the security should be acted upon for the full amount secured, or so much as should remain unpaid notwithstanding any of the notes might not have arrived at maturity with proviso for redemption, upon payment of all the notes when they respectively became due, and a proviso, that until default should be made in payment of some or one of the notes, or some part thereof respectively, Hoddle "should retain possession of the goods, but not to waste, spoil, or destroy any of them".

Upon giving the notes and executing the bill of sale, Hoddle was let into possession. Murray being indebted to William Smith, he on the 3rd September 1841 assigned the bill of sale to the latter and his assigns and indorsed the promissory notes to him, and on the 24th December 1841 Smith being indebted to the plaintiff Jones in the sum of £409.10.11, again assigned the bill of sale to the latter to secure three of Hoddle's notes, at 3, 9 and 12 months date, which he had indorsed to plaintiff.

The several assignments to Smith, and to the plaintiff respectively mentioned the proviso for redemption contained in the original bill of sale to Murray and each stating the debt to be due from Hoddle. In January 1842 a creditor of Hoddle who continued in possession as apparent owner entered up judgment and took out execution, and the defendant, as Sheriff, levied upon and sold the goods specified in the schedule to the bill of sale, and the proceeds were forwarded to the Sheriff's office. The plaintiff now brought his action on the right to possession of the goods under the assignment of the bill of sale to him by Smith, in default by Hoddle of payment of one of the notes for the due payment of which the bill of sale was given.

The first note amounting to £136.10 became due on the 5th December 1841 , and was not paid. The plaintiff sent it to Smith for collection, and he obtained from Hoddle about £40 in cash, and remitted this, together with another note of hand at a longer date, which the plaintiff said he would not take. Smith admitted that what he did in the transaction was without plaintiff's authority, and did it of his own authority, thinking it was the best that could be done under the circumstances. The first of Hoddle's notes had not been returned and was now in plaintiff's possession, unsatisfied, but he still retained the £40 which had been remitted, and he had not returned the note proposed to be substituted. Numerous objections were taken to the plaintiff's right of recovering.

The learned Judge told the jury that the defendant's plea put the plaintiff to proof of such a right of property as carried with it a possessory right which if established, was enough to support the action. That right depended chiefly on the fact of non payment of any one of Hoddle's promissory notes assigned to the plaintiff, and for which the goods scheduled in the bill of sale were a collateral security. He told them that if any one such notes was left unpaid at the time of the seizure by the Sheriff under the execution, the plaintiff was entitled to a verdict.

It might be true that Smith and Hoddle had done their best to retire the first note, by remitting £40 and another substituted note, but to constitute a payment of the first note, there must be made out an actual acceptance of the money and the new note, as a payment to plaintiff. His Honor also ruled that the goods under the assignment of the bill of sale were the property of the plaintiff, subject only to the condition of remaining in Hoddle's possession until default by him in paying the notes he had given. If they thought however, that although one of the notes had been dishonored when at maturity, but was in fact taken up prior to the seizure by the Sheriff, the defendant was entitled to a verdict for then the possessory right previously vested in the plaintiff might be taken to have been divested. But to shew a taking up of the note it was necessary to prove an acceptance by the plaintiff, or his assent, in reference to the transaction between Smith and Hoddle.

Did the evidence satisfy them that there was a payment of the dishonored note, by an acceptance on the plaintiff's part of a bill or note or equal amount and value with the balance above the £40 remitted by Smith? If not, then there was no payment in satisfaction. According to the evidence, the plaintiffs assent to that arrangement was not only not shewn, but the transaction was without his authority. The jury found for the plaintiff. Damages £125.

On moving to enter a nonsuit, or to obtain a new trial, it was contended, first, that the plaintiff had no legal interest under the bill of sale, which would enable him to maintain an action; and secondly, supposing he had any interest, his remedy was in case, and not trespass, he having no such possession in law of the goods, as would entitle him to bring the latter form of action. First, the assignment of the bill of sale passed nothing to Smith, or at least nothing which he could assign to another, inasmuch as it was personal assignment by Hoddle to Murray and could not be transferred to a stranger. It was a conditional and not an absolute bill of sale, and was void without possession in the assignee. There was a proviso that Hoddle should retain possession until default. As even Murray might never acquire a right to any of the property, it was only a contingent right which could not be assigned at the time the notes were given. It was but a possibility in Murray and was not assignable before the contingency happened. But Jones could not at all events, maintain this action, for whatever interest he acquired on the 24th December when the assignment was executed, it could not operate upon the first note which was due on the 5th December and dishonored. Smith only had the right then. He was the only person who could legally take advantage of Hoddle's default, and he could not then assign his right of action to Jones without giving a retrospective operation to the assignment which could not be. Only one note was due when Smith assigned; but he could not assign his right of action on that note, without violating the rule of law that an action is not assignable. There was no interest assignable under the bill of sale, it was only a possibility which could confer no title to the property.

It was clear that Jones could acquire no right of action in consequence of what occurred before the assignment to him. He must establish his right through Smith; and if Smith's own title was incomplete, which it was, for Murray had not anything more than a contingent interest, depending upon the performance of a personal covenant with Hoddle, it followed that Smith could confer no title on Jones. Then secondly, there was no possession in Jones to entitle him to maintain trespass. Up to the time of the sale by the Sheriff, Hoddle was in possession and appeared the actual owner. After the 5th December when the first note was due and unpaid, he remained in possession as tenant at will, and he could not be turned out, without notice to quit. He could not be treated as a trespasser. The only remedy the plaintiff had was in "case" for an injury to his reversion.

Dowling C.J. We have considered this case, and are of opinion that the verdict ought not to be disturbed. The question whether Hoddle made a default in not paying the first of the notes for the due payment of which the bill of sale was given was, we think, properly left to and decided by the jury. There might not be conclusive evidence of dishonor, yet the possession of the note by the plaintiff after it became due, which possession was acquired by the retirement of it from the bank where it lay payable, was enough to go to them, to find that it had not been satisfied. The mode resorted to by Hoddle and Smith to retire it, not being acceded to by the plaintiff, we must take the fact to be, as found by the jury, that the note was dishonored. We are now to consider whether under such circumstances, this action of trespass is maintainable.

It cannot be disputed that a general right of property will ordinarily carry with it the right of possession and of title a right to bring trespass without actual possession. If the plaintiff had the general right of property in these goods, and the actual possession by Hoddle was not inconsistent with that general right, then the action is maintainable. Now what are the circumstances? Hoddle sells the goods absolutely to Murray to hold the same unto his executors, administrators, and assigns subject to the condition of paying the notes on the days they respectively become due he remaining in possession until default. Before any of the notes are due, Smith becomes Murray 's assign, subject to the same proviso. Three of the notes are indorsed to the plaintiff and at the time one of them is due, Smith assigns the bill of sale to the plaintiff with all the rights which he had by assignment from Murray . That assignment to the plaintiff carried with it the right of property, and the right of possession prospectively whenever default should be made. In fact default had been made when Smith assigns to the plaintiff, who took all the rights which Smith had derived from Murray by the assignment.

It is true that after the first default, Hoddle is allowed to remain in possession by sufferance, in like manner as an ordinary mortgagor remains in possession by the sufferance of the mortgagee after default. The forbearance on the part of Smith, or of the plaintiff to take actual possession, cannot prejudice the right of possession which accompanied the right of property in the latter, upon the default. The assignment here was not an assignment of a chose in action, but of the property itself, on a condition which might no doubt affect Hoddle's rights, but not the rights of the assignees of the bill of sale. This was an absolute sale to Murray and his assigns with a right of possession in Hoddle until he made default.

The default has happened and that which was previously conditional became absolute and entitled the assignee of the bill who had the legal right of property, to immediate possession. The plaintiff by the assignment had the legal interest. Hoddle parted with all the interest he had in the goods to Murray and his assigns, subject to the right to remain in possession until the consideration was paid. He had failed to pay the consideration, and thereupon the plaintiff had the absolute vested right. The case as it respects the plaintiff was only an assignment of a mortgage to him, for as much as it was worth, he has bought it with all Smith's rights. He bought the right of property, which carried with it the right of possession, immediately if he had thought proper to exercise it, and he might have treated Hoddle as a trespasser. The fact of Hoddle being allowed to remain in possession after the 5th December 1841 makes no difference, for his possession was then consistent with the plaintiffs right of property. It appears to us therefore, that the form of action is well conceived, and the question of the default in Hoddle being determined by the jury, the verdict ought not to be disturbed.

Rule refused.

Published by the Division of Law, Macquarie University