« PreviousContinue »
offence under the statute committed before it came into operation, but not proceeded against until after that date, can be punished in the manner provided by the Act. Sec. 7 (5) enacts that a male person can be proceeded against, either summarily or on indictment, for living on the immoral earnings of a woman, and that, if convicted a second time, “such second and subsequent conviction being a conviction on indictment,” he is liable to two years' hard labour and a sentence of flogging. The Court held (1) that only the second conviction need be on indictment to bring this sub-sec. into operation, the first need be only a summary conviction, and (2) that the new mode of punishment applied to an offence committed before the Act received the Royal Assent. As Mr. Justice Phillimore pointed out in his judgment, dismissing the prisoner's appeal against a sentence of flogging passed on him in pursuance of sec. 7 (5), the ordinary rule that a penal statute will not be construed retrospectively was inapplicable to the present case for two reasons. In the first place, the rule, generally speaking, applies only when Parliament creates a new offence, not when it merely alters the procedure for dealing with conduct which was already criminal prior to its enactment. Here the prisoner, on a second offence, under the previous law could have been committed to Quarter Sessions as an “incorrigible rogue" under the Vagrancy Act of 1898, and there sentenced to flogging; the new Act merely substituted for this procedure an indictment and trial by jury.
In the third case, Rer v. Brown, the prisoner appealed on grounds of ill-health against a sentence which included corporal punishment passed upon him at the London County Sessions; but the Court held that it was not within their sphere of duty to consider the medical evidence as to the severity of the sentence; that was the duty of the prison doctor, who could stop the punishment if the prisoner's health did not permit of it being inflicted without danger to life.
INTERESTING POINTS OF LAW DECIDED BY
CoNTRACT To TAKE SHAREs.
Mair v. Rio Grande Rubber Estates (Lim.) is of interest by reason of its relation to the well-known case of In re Karberg,  (3 Ch, 1). The prospectus set forth a report received by the directors from an expert who was, in point of fact, himself a director and a promoter of the company. The report referred in highly optimistic terms to the prospects of the company's estates; but it was further stated in the prospectus that no part of the price would be paid until the report had been confirmed by an independent observer. It was not denied that the report had in fact been received; but it was proved to be full of gross misstatements. The pursuer claimed to have his contract rescinded. It was held, however, that there had becn no misrepresentation by the directors; and Karberg's case, which was explained by the Lord President as a case not of misrepresentation (for there was no misstatement there by the company or its agents), but of essential error, was distinguished on the ground that the directors could here not be taken to have known that the shares had been applied for on the faith of one particular paragraph of the prospectus, which must be read as a whole.
MISFEASANCE OR NON-FEASANCE.
Ryan v. Tipperary County Council (an action under Lord Campbell's Act) was a local government case of a different character but of equal interest. The plaintiff's father had driven in a cart along a road which the council was engaged in repairing. One of his wheels struck a stone which had, to the knowledge of the council's workmen, been lying in the road for two or three days. He was thrown out of his cart in front of a steam-roller, run over, and killed. The * defendants contended that their failure to remove the stone was a mere non-feasance for which they were not iiable. It was admitted that had the stone been the only element in the case there would have been no cause of action; but the Court, applying Mayor of Shoreditch v. Bull, [1907) 68 J. P. 415, held that the defendants’ interference with the
normal structure of the road imposed on them the duty of removing dangerous obstructions, and that in such circumstances the non-feasance might be traced back to the act which made the omission dangerous.
CoNTRACTs ILLEGAL OR ULTRA WIREs.
A curious case arising out of the Birkbeck Building security liquidation came before the Divisional Court last week on appeal from the Judge of the Westminster County Court (Brougham v. Dwyer, Jan. 29). The action was brought by the liquidator to recover from a customer of the Birkbeck Bank, which had been carried on by the society as part of its business, a sum of 30l. odd, in respect of an overdraft, and the defence was raised that, the banking business having been declared by the Court of Appeal to be ultra vires the society, it was illegal, and the action could not, therefore, be maintained. The County Court Judge adopted that view, but the Divisional Court made it clear that “illegal’’ was exactly what the business was not in the sense in which the word was used by the Court of Appeal, for, as Lord Justice Buckley said in his judgment, “a transaction which is illegal is forbidden by law; a transaction which is ultra vires is precluded by the incompetence of the actor.” Here the contract was not illegal in the sense that no one had a right to make it, but it was only forbidden because of the incompetency of the actor, viz., the Society, and incompetency is not the same thing as illegality. According to Mr. Justice Lush, there was nothing wrong or illegal about the transaction, but, the society being incompetent to enter into it, “it did not exist in point of law,” and the money might be recovered on the same principle apparently, as would apply to the recovery of money paid by mistake. The problem is by no means so simple, for, according to the accepted English authorities (though the American ones are different), in every case without exception it has been held that an ultra vires contractual engagement, whether executed or not, is not enforceable, at least by action directly upon the engagement itself. And in the leading case of Balfour v. Ernest (1859), it was held that not even securities given in consideration of ultra tires engagements could be enforced, even though the transaction in which they were given was completed, and not merely executory. But there is a real distinction between contracts which are illegal, and contracts which are only ultra vires. The former are void and cannot be sued on because of the illegality; the latter are also void and cannot be sued on as contracts, but there is an equitable right to an account, and in such an action the money found due may be ordered to be repaid, notwithstanding the incompetency of the contracting corporation to enter into the transaction.
NATIONAL TELEPHONE Co. (LIMITED) v. His MAJESTY's PostMASTER-GENERAL.
By the agreement by which the Postmaster-General acquired, as from December 31st, 1911, the undertaking of the National Telephone Company it was, inter alia, provided that “the value on December 31st, 1911, of all plant, land, buildings, stores, and furniture purchased by the Postmaster-General . . . shall be the then value (exclusive of any allowance for past or future profits of the undertaking or any compensation for compulsory sale or other consideration whatever) of such plant, land, buildings, stores, and furniture, having regard to its suitability for the purposes of the Postmaster-General’s telephonic service, and in determining the value of any plant no advantage arising from the construction of such plant, by leave of the Postmaster-General, upon any railway or canal over which the Postmaster-General possesses exclusive rights of way for telegraphic lines shall be taken into account.”
Held, that the value of the plant taken over by the Postmaster-General was to be arrived at by taking the cost of construction, less depreciation, and that every expense which was necessary to construct the plant was an element to be considered, including in such expense (inter alia) the reasonable costs of obtaining subscribers’ agreements which were in force at the date of the transfer, and also (Sir James Woodhouse dissenting) the costs of raising capital necessary to construct the plant. Held, further, that the method of depreciation applicable was to take the value as reduced in the ratio which the age bore to the life of the plant, and that the mode of computing the life of the plant was to take its physical life as reduced somewhat in respect of defects and obsolescence of certain classes of the plant.
IS A PAST DEBT A VALUABLE CONSIDERATION FOR A SECURITY 2
It is thought that not a few lawyers by no means unlearned have been under the impression that a past debt is a sufficient valuable consideration for a security for the payment of the same. It is evident, however, from the authorities that the mere existence of such a debt is not such a valuable consideration. In addition thereto there must be an agreement, express or implied, to give time, or some further consideration, or else there must be an actual forbearance to sue in consequence of the security. One of the earliest cases on the point is that of Alliance Bank v. Broom (2 Dr. & Sm. 289). In that case a banker required security from his customer for an overdrawn account. The customer by letter promised to hypothecate certain goods, but, upon being asked for the delivery warrants, he refused to carry out his promise. A bill which had been filed to enforce such promise was demurred to on the ground that the promise was made without consideration. It was held that the forbearance of the bank to sue for the debt in consequence of the promise was a sufficient consideration to support it, and the demurrer was overruled. Vice-Chancellor Kindersley in the course of his judgment said: “It appears to me that when a creditor demands payment of a debt, and the debtor in consequence of that application agrees to give a certain security, although there is no promise by the creditor to abstain from suing for any given time, yet the effect is that the creditor does in fact give, or must be assumed to give, and the debtor receives, or must be assumed to receive, the benefit of some degree of forbearance, although for no definite or fixed period. If the debtor had refused to give any security at all, the creditor might, of course, have taken immediate steps to enforce payment, but, in consequence of the promise to hypothecate, the debtor does receive some degree of forbearance. It is true that at any time, notwithstanding the promise, the creditor might insist upon immediate payment and bring an action even after the security is given, but still the circumstances necessarily imply or involve the attainment on the part of the debtor of a certain amount of forbearance which he would not otherwise receive.” That judgment was approved of by the House of Lords in Fullerton and