Graves v Davies

• Jurisdiction: Ireland
• Judgment Date: 18 December 1866
• Date: 18 December 1866
• Court: Rolls Court (Ireland)

Rolls.

GRAVES

and

DAVIES.

Gordon v. PyneENR 3 Hare, 223.

Donald v. SucklingELR L. R., 1 Q. B. 585.

Peare v. Hunt 10 B. & Cr. 122.

Phene v. GillanENR 5 Hare, 1.

Ex parte Dobson 2 Mon. D. & De G. 685.

Butchart v. Dresser 4 D. M. & G. 542.

Brandao v. BarnettENR 12 Cl. & FIN. 787.

Sandon v. HooperENR 6 Beav. 246.

Simson v. Ingham 2 B. & Cr. 65.

Calton v. BraggENR 15 East. 228.

Crosskill v. BowerENR 32 Beav. 91.

Kidson v. TurnerENR 3 H. & N. 583.

Tucker v. WilsonENR 1 P. Wms. 261.

Kemp v. Westbrook 1 Ves., jun. 278.

Jones v. Smith 2 Ves. jun. 378.

Scotland v. ChristieENR 8 Cl. & Fin 214.

Jones v. Smith 2 Ves. jun. 378.

Grant v. GrantENR 34 Beav. 625.

Thompson v. PercivalENR 5 B. & Ad. 925.

Lord Trimleston v. HamilUNK 1 Ball & B. 377.

Meymott v. MeymottENR 31 Beav. 445.

Rose v. RoseENR John. 653.

Crosskill v. BowerENR 32 Beav. 92.

Thompson v. PercivalENR 5 B. & Ad. 925.

Lord Clancarty v. LatoucheUNK 1 Ball & B. 428.

Butchart v. Dresser 4 D., M. & G. 542.

Fordham v. WallisENR 10 Hare, 217.

Ridgway v. NewsteadENR 2 Giff. 492.

Clayton's caseENR 1 Mer. 572.

Butchart v. Dresser 4 D. M., & G. 372.

Merriman v. WardENR 1 J. & H. 377.

Phene v. GillanENR 5 Hare, 10.

Fergusson v. FuffeENR 8 Cl. & Fin. 139.

Crosskill v. BowerENR 32 Beav. 86.

Calton v. BraggENR 15 East, 228.

CHANCERY REPORTS. 227 1866. Rolls. GRAVES v. DAVIES. Nov. 23, 24, 25. Dec. 18. THIS was a suit for the administration of the real and personal D. & Co., stoca estate of Henry Davies. The matter was referred to Master Litton became ban, , kbrokersk- rut 1. under the 15th section of the Court of Chancery (Ireland) Re- Thpeyin owed848 gulation Act 1850. After a final decree was made, Gilbert Winter money to their bankers M. & Moss obtained leave to file a charge on foot of a demand of Moss Co., who proved their and Co. against the assets, and obtain a report upon such terms as debt under the fiat. D. & Co. the Master might direct.* resumed busi ness and their On the 22nd of April 1864, G. W. Moss filed a charge in pur- dealing with M. & Co., on • suance of the said order, claiming n balance of 14,622. 3s., as the terms that u due dany commis- p to the 9th of May 1864 with interest, on foot of a general sion business was which account between the firm of William and Henry Davies and the done by D. & firm of Moss & Co., bankers, of Liverpool, the balance to be reduced Co., for M. & Co., should be by the present value of certain railway shares. The facts upon placed to the account of the old debt ; and that M. & Co. should make D. & Co. advances as their bankers ; and railway shares were deposited with M. & Co. to secure any balance which might from time to time be due on the bankers' account. An account was kept by M. & Co. on foot of the commission business, which was-called the L. account. In 1857 H. D., one of the firm of 1). & Co., died. At his death there was a large balance due to M. & Co. on foot of the general banking account, and a balance due to D. & Co. on foot of the L. account. M. & Co., after the death of H. D., paid calls made on the railway shares, to save them from forfeiture. In a suit to administer the assets of H. D., M. & Co. claimed the balance due, giving credit for the price of some of the shares which they bad sold from time to time after the death of H. D. Held-1. That M. & Co. were not bound to sell, or chargeable with the value of the shares deposited with them at the death of H. D., but should give credit for their value at the times of the sales of them, or of redemption, on payment of the balance on foot of the general account. 2. That the balance due to D. & Co., on foot of the L. account, should not be set off against the balance due to M. & Co. on foot of the general account. 3. That M. & Co, were entitled to credit in the general account for all the calls on the shares paid by them, though the price of some of the shares was less than the amount of the calls so paid on those shares. 4. That M. & Co. were entitled to take the account before the death of H. D., with half-yearly rests and compound interest, it being proved that such was the custom of bankers where the transactions took place. 5. That at the death of H. D. the account ceased to be a banking account, and the balance due was merely a simple contract debt, and did not bear interest. * See the case reported, 15 Ir. Ch. Rep. 204 ; and on appeal, 17 Ir. Ch. Rep. 90. 228 CHANCERY REPORTS. which this claim was founded were stated in the charge and an affidavit of Thomas Edward Moss, and were as follow : William and Henry Davies were stockbrokers trading in LiverÂÂpool, under the firm of H. Davies & Co. Moss & Co. were their bankers. In April 1848 Davies & Co. became bankrupts. Under the fiat, Moss & Co. proved the sum of 22,686. 19s. 10d., as due by the bankrupts to Moss & Co. on bills of exchange, for which the latter held no security. After the bankruptcy, Davies & Co. reÂÂsumed business, and Moss & Co. still continued their bankers ; and the former expressed their determination that at some time they would pay to Moss & Co. the debt which they owed before their bankruptcy ; and they proposed, if they would allow them to re-open their account, to allow Moss & Co. to place to the account of their old debts all commissions which should be earned by them on any business Moss & Co. would give them as brokers. Moss and Co. consented, and promised to make them advances from time to time on shares they bought, to enable them to pay the same before receiving the purchase-money from their principals, and agreed to allow full commission charged by brokers on purchases and sales, to be placed to the amount of the old debts ; although it is the custom in Liverpool between bankers and stockbrokers, when bankers employ the latter in buying and selling of shares, scrip and other stock in the share-market, to pay or allow to the brokers half only of the usual commission which they usually charge to their customers. The full commission was accordingly credited by Moss and Co. to a separate account called, the " liquidation account" in respect of the old debts. This account, taken with half-yearly rests and compound interest, showed a balance of 2676. 17s. 10d. in favour of Davies & Co., down to the 30th of January 1856. Railway shares in various companies were deposited by Davies and Co. with Moss & Co., as security for any balance which might from time to time be due to the latter ; and the general banking acÂÂcount between Davies & Co. and Moss & Co. was continued until the death of Henry Davies, which occurred on the 7th of January 1857. This account was made out with half-yearly rests and compound interest. Evidence was given, on the part of Moss CHANCERY REPORTS. 229 and Co., that it is the custom of bankers in Liverpool to balance their accounts with their customers half-yearly-viz., pn the 30th of June and 31st of December in each years and to charge interest from each half-yearly balancing day, on any balance or sum then remaining due to them. The account thus taken showed a balance of 23,044. 7s. 2d. against Davies & Co. William Davies died on the 14th of August 1857. Between the 7th of January 1857, the date of the death of Henry Davies, and the death of William Davies, no sums were paid by the latter save for the purpose of paying calls on the shares held as security by Moss & Co., who also advanced several sums for the same purpose, at the request and with the knowledge of William Davies. Moss & Co. also advanced, after the death of William Davies, sums of money from time to time for the purpose of paying calls on the various shares. The total amount of the sums paid for calls was 5742. 2s. Id. Moss & Co. gave credit for the sums paid by William Davies in the general account. They sold some of the shares at different times from the death of William Davies to the 14th of June 1858, and gave credit in the general account, as of the date of the sales, for the sums produced thereby, charging on the debit side of the account the sums advanced by them for calls. The sums paid for calls on some of the shares (royal Swedish railway shares) greatly exceeded the price of the shares. Moss & Co. took credit in the account for the difference as against the price of the other shares. The petitioners by their discharge submitted : First ; that at the time of the bankruptcy, Moss & Co. held in their hands railway and other shares sufficient to cover any balance then due by them, and consequently that the balance on foot of the liquidation account should be set-off against subsequent advances by Moss & Co. Secondly ; that Moss & Co. were not entitled to make half-yearly rests and charge compound interest, or any interest whatever ; or, if entitled to charge interest, they were entitled to simple interest only at 4 per cent. Thirdly ; that Moss & Co. ought to have realised the securities at the death of Henry Davies; and, that not having done so, they kept 230 CHANCERY REPORTS. them at their own risk, and were bound to account for them at their respective values at that time, and were not entitled to claim against the estate of Henry Davies for any calls, commission, interest or moneys paid by them in respect of the said shares and securities, or any of them, after the death of Henry...