O'Reilly v Connor Same v Allen

• Jurisdiction: Ireland
• Judgment Date: 08 February 1903
• Date: 08 February 1904
• Court: Court of Appeal (Ireland)

O'Reilly

and

Connor (1).

Same

and

Allen.

K. B. Div.

Appeal.

CASES

DETERMINED BY

THE KING'S BENCH DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL,

AND BY

THE COURT FOR CROWN CASES RESERVED.

1904.

Charitable Loan Society — Loan Fund — Receiver — Renewal notes — Statute — barred debt — Consideration — Power of receiver to compromise — Charitable Loan Societies (Ireland) Act, 1900 (63 & 64 Vict. c. 25, s. 4).

A receiver, appointed to wind up a Loan Society constituted under the Loan Societies Acts, compromised claims on promissory notes due to the Society by taking a note and an I O U from debtors to the Society. The claims compromised were on foot of renewal notes which, though validated by sect. 1 of the Loan Fund Act, 1900, were irrecoverable at the time of giving the compromise note and the I O U:—

Held (reversing the decision of the King's Bench Division), that the compromises were valid, under section 4 of the Charitable Loan Societies Act, 1900 (2), and that the receiver could recover on the note and I O U in the County Court.

Cases Stated by the Right Hon. Mr. Justice Gibson on the hearing of civil bill appeals at the Summer Assizes, 1903, for the county Fermanagh. The appeal in O'Reilly v. Connor was one taken from a dismiss without prejudice, dated 23rd June, 1903, in an action for £3, the amount of a promissory note made to the plaintiff as receiver of the Pettigo Loan Fund Society. The plaintiff was, on the 27th December, 1901, appointed receiver in respect of the said Society, which had been dissolved.

The defendant's wife had made a renewal note to the said Society, dated 11th May, 1896, for £3. By way of compromise of the claim on the said note, the defendant on the 22nd December, 1902, made a note for £3 to the plaintiff, being the note sued on, and this note was accepted in discharge of all claims on the wife's note.

The plaintiff contended that the compromise was binding under section 4 of the Charitable Loan Societies (Ireland) Act, 1900, and that he was entitled to sue on the note. The defendant argued that the section did not apply, that the compromise was not binding, that the plaintiff could not sue, and that no action was maintainable.

The questions reserved by the learned Judge for the opinion of the Court were:—

(1). Is the compromise binding?

(2). Can the plaintiff enforce the same by action?

(3). Should the dismiss be reversed or affirmed?

In O'Reilly v. Allen the plaintiff had purported to compromise the claim under an old statutory note for £10 made by the defendant, by the acceptance of £1 in cash and an I O U for £8. He then sued the defendant in the County Court for the sum of £8 due as a debt evidenced by an I O U, and upon a settled account,

and the appeal was taken from a dismiss granted by the County Court Judge in the said action.

It was agreed that the determination of both cases depended upon the same considerations.

Henry, K.C., and Pringle, for the plaintiff.

Wylie, K.C., and Horner, for the defendants.

The arguments were substantially the same as those in the Court of Appeal reported infra, p. 612.

Cur. adv. vult.

Henry, and Pringle, for the plaintiff.

Wylie, K.C., and Horner, for the defendants.

Kenny, J.:—

In those civil bill appeals, cases have been stated by Gibson, J. The same point is involved in each. The County Court Judge dismissed the processes without prejudice, and the plaintiff appealed.

The plaintiff sues as the receiver over the Pettigo Loan Fund Society, which has been dissolved, and the question is, whether it is competent under the circumstances of either case for the plaintiff to maintain his claim. I shall take the facts in the first case—O'Reilly v. Connor. On the 11th May, 1896, a promissory note, payable on demand, for £3, was given by the defendant's wife, Susan Connor, and two others, to the treasurer of the Pettigo Loan Society. It was a renewal of a former note, and no action could have been maintained on it up to the passing of the Charitable Loan Societies (Ireland) Act, 1900: Doherty v. Travers (1). On the 22nd December, 1902, the defendant alone gave a note to the plaintiff in his capacity as receiver of the Pettigo Loan Fund Society for £3. The case, as stated, finds that this note was given by way of compromise of the claim on the note of 1896, and that it was accepted in discharge of all claims on it. It was sued on by the plaintiff in his capacity as such receiver as aforesaid, and the County Court Judge dismissed the civil bill without prejudice. From that dismiss, the present appeal was brought.

I have said that no action could have been brought on the note of 1896. Furthermore, if it could have been sued on, the proceeding

should have been at Petty Sessions, and could not have been by civil bill: Moore v. Donagher (1). To deal with infirmities such as these, attaching to notes given to Loan Fund Societies governed by the Charitable Loan Societies Act of 1843, 6 & 7 Vict. c. 91, the Charitable Loan Societies (Ireland) Act, 1900, 63 & 64 Vict. c. 25, was passed. It provided by section 1 that any note current or unpaid on the 1st March, 1899, and made under the Act of 1843, should not be invalid or incapable of being enforced by reason of (amongst other matters) the said note having been given as a renewal. The result of this section was to give validity to these existing current or unpaid renewals, so far as their infirmity rested on their being renewals; but it did not purport to validate future renewals which, being subject to the provisions of the Act of 1843, could not be sued on. Furthermore, as to these unpaid or current renewals, it has been decided that, though the Act of 1900 validates them, any proceeding on foot of them in the only tribunal that has power to deal with them—namely, Petty Sessions—must be brought within six months from the time when the cause of complaint arose, inasmuch as they are subject to the provisions of sect. 10 of the Petty Sessions (Ireland) Act, 1851: Atthill v. Woods (2). There can be no question therefore that, so far as the note of 1896 is concerned, no proceeding whatever could have been brought on foot of it in December, 1902, when the defendant's note was given, and that for all practical purposes it was then dead. It will be observed that the new note of 22nd December, 1902, is not in the form prescribed by the Act of 1843, neither is it made to an officer of the Society. It is on a stamp—in this respect also differing from notes purporting to be given in pursuance of the Act of 1843. In no respect indeed can it be said to be a note within that Act—which does not confer any powers on a receiver of a dissolved Loan Society to take notes from borrowers. His duty is to get in the assets, which, under sect. 45, vest in the secretary for the time being of the Loan Fund Board.

The plaintiff's contention in these circumstances is that this note is the result of a compromise under the 4th section of the Act of 1900, and that it was open to the plaintiff to take it in any form he chose, and that it is outside the category of notes bound

by the provisions of the Act of 1843. He further says that in his capacity as receiver he, without any authority from the Act of 1900, was entitled to take a security for a debt due to the dissolved Society, which security would not be subject to the Act of 1843. The 4th section of the Act of 1900 is as follows:—[His Lordship read the section, ante, p. 6011. This power is conferred on the Loan Society alone; and unless a receiver has all the powers of the dissolved Society conferred on him, I am of opinion that he cannot be brought within the scope of the section. By the 45th section of the Act of 1843 he is to have all the powers vested in the treasurer, trustees, or other officer or officers of such Society, under their rules, or under the Act, or otherwise. His duties are pointed out by the same section. They are limited to calling in and receiving all outstanding debts and demands, and instituting the necessary proceedings for that purpose. It was never contemplated that he was to take renewals—a thing that the Society, as a going concern, could not have done. Whatever additional powers are conferred by this 4th section, it seems to me they are applicable to the Society before dissolution, and are in no way applicable to the receiver of a dissolved Society.

But the plaintiff contends that, apart from the 4th section, he was entitled to take this note by way of settlement or compromise—that value has been given for it (Haigh v. Brooks (1)) in the shape of abandonment of assumed rights against the makers of the note of 1896, and that the transaction is a new one, and altogether outside the Act of 1843. I cannot accede to this argument. The note of 1896 could not have been utilised for any purpose when the note of 1902 was given. No action could have been maintained on it against any of the parties to it, and the giving by defendant of a new note was not the compromise or abandonment of a doubtful right. There were no rights to abandon, for none existed. I therefore think there was no consideration for the note of 1902. Furthermore, the latter is made to the plaintiff in his capacity as receiver; he sues as such receiver: and if the money were recovered, it would be assets of the dissolved Society. If a receiver were at liberty to compromise in this manner, I can see nothing to prevent the trustees, secretary,

or treasurer of a going Society doing so likewise. If these officers could do so, renewals could be taken for debts, and in a form not prescribed by the Act of 1843; and in order to recover on them, they could be called “compromises.” This would be a clear evasion of the statute, to which, in my opinion, we should not give our sanction.

The facts of the second case of O'Reilly v. Allen are somewhat different; but the arguments applicable to both are identical, and the ruling in one case...