M.Z. Martin and Another vs F.W. Baker and Another

Sir Richard Garth, Kt., C.J.—The plaintiffs now appeal from this judgment; and they put their case upon this novel ground. That although Catliff had no authority, direct or indirect, to purchase the goods in question for the firm, the firm bad the benefit of them in this way. After Catliff had bought them from the plaintiffs, he sold them with other things of his own by auction; and the proceeds were paid into the firm''s account at the Oriental Bank, who were their bankers and to whom they were at that time largely indebted. It was therefore argued by Mr. Jackson, that as the firm had the benefit of these goods to the extent of the sum which they realized at the auction, and as that sum went to pay the Oriental Bank a portion of the firm''s debt, the plaintiffs had a right to that extent to stand in the place of the Oriental Bank, add to recover from both defendants the amount which the Bank received. In support of this argument, our attention has been called to several authorities, some of which were commented upon by Phear, J., in the Court below; but upon considering those authorities, we find nothing to justify us in applying of extending the principles upon which they proceeded, to the present case.

It is perfectly true, that where money has been advanced, either by loan or otherwise, to individuals or companies, under circumstances which preclude the persons advancing the money from recovering it at law from the recipients, and that money has been applied in paying the debts of bona fide creditors of the individuals or companies to whom it was advanced, Courts of Equity have in some cases allowed the persons so advancing the money to stand in the place of the creditors, and to recover their money from the recipients, as equitable assignees of the debts so paid off. But the tendency of modern decisions undoubtedly has been to confine, rather that to extend, the principle of these cases--I, Lindley on Partnership, p. 378, and the observation of Lord Justice Gilford in the National permanent Benefit Building Society L.R. 5 Ch., 309--and it appears to us, that to allow the plaintiffs in this suit to succeed in their contention, would be to extend that principle far beyond any safe limits.

In this case the plaintiffs have not advanced any money at all. They have sold goods somewhat incautiously to Mr. Catliff daring the time that his partner was in England, without taking any steps to ascertain whether the nature of the business carried on by the firm warranted them in supposing that Mr. Catilff had any right to pledge his partner''s credit, and now having found that Mr. Catliff had no such right, and having ascertained that the goods had been resold by Catliff, and the proceeds paid to the firm''s account at the Oriental Bank, they seek to place themselves in the position of the bankers, and, as their assignees, to recover from Mr. Baker the amount realised by the resale of the goods. This would indeed be stretching the principle of the cases to which we have referred to a very alarming extent, and one to which we certainly cannot give our sanction.

Apart, however, from this consideration, the form in which the plaintiffs'' claim is stated upon this record, appears to us to raise a very serious obstacle in the way of his present contention. He has sued the two defendants as co-contractors in the usual way for the price of goods sold. He has recovered against one-defendant the whole of his demand, and against the other defendant a part of his demand, upon that basis; and now he proposes to change the nature of his claim entirely as against one of the defendants, and to make him liable, not for the price of the goods sold, but for the amount of the proceeds of the goods which proceeds he claims in a totally different character from that in which be brought his suit, in which latter character he has recovered the whole of his claim against one defendant, and a portion of it against the other. The appeal most therefore be dismissed with costs on scale No. 2.