HIGH COURT.

LONDON COUNTY COUNCIL (Appellants) v. WOOD (Respondent). (a.)

Local government-Highways-Locomotives-Locomotive passing along highway-Being "used" on highway Licence-Highways and Locomotives (Amendment) Act, 1878 (41 & 42 Vict. c. 77), 8. 32.

Section 32 of the Highways and Locomotives Act, 1878, gave county authorities power to make bye-laws for granting annual licences to locomotives used within their county, and under this section a county council made a bye-law that “ No locomotive shall be used on any highway within the county until an annual licence for the use of the same shall have been obtained by the owner thereof."

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Held, that a locomotive which is only passing along a highway for the purpose of proceeding to another district is being on such highway within the meaning of used " this bye-law, and that the owner thereof required a licence for such user.

Case stated by Mr. Kennedy, metropolitan police magistrate, sitting at Woolwich police-court.

An information was laid on behalf of the appellants against the respondent charging that he, on the 3rd of November, 1896, at High-street, in the parish of Eltham, in the county of London, and within the Metropolitan Police District, did unlawfully use a locomotive on a highway in contravention of a byelaw made by the appellants prohibiting a locomotive being used on any highway within the said county until an annual licence for the use of the same should have been obtained from the appellants by the owner thereof whereby he (the respondent) became liable to the penalty provided by section 32 of the Highways and Locomotives Act, 1878, and the Local Government Act, 1888.

Section 32 of the Highways and Locomotives Act, 1878 (41 & 42 Vict. c. 77), provides: "A county authority may from time to time make, alter, and repeal bye-laws for granting annual licences to locomotives used within their county, and the fee (not exceeding ten pounds) to be paid in respect of each licence; and the owner of any locomotive for which a licence is required under any bye-law so inade who uses or permits the same to be used in contravention of any such bye-law, shall be liable to a fine not exceeding forty shillings for every day on which the same is so used. All fees received under this section shall be carried to and applied as part of the county rate. This section shall not apply to any locomotive used solely for agricultural purposes.'

Section 38 enacts: "Locomotive' means a locomotive propelled by steam or by other than animal power."

The London County Council, under section 32, made bye-laws for the "Licensing and use of locomotives in the county of London (exclusive of the city of London," and No. 1 of such bye-laws provided: "No locomotive shall be used on any highway within the county of London until an annual licence for the use of the same shall have been obtained from the council by the owner thereof, nor at any time after the expiration of any such licence unless a further licence shall be obtained in respect of such locomotive."

The bye-laws also provided that the licence fee for a locomotive should be £10 a year, and for a steamroller £5 a year, and there was also a provision for

(4.) Reported by Sir SHERSTON BAKER, Bart., Barrister-at-Law.

what was called a terms.

HIGH COURT.

travelling licence on reduced The respondent was an engineer carrying on business at Crickenhill, in the county of Kent, and was the owner of the steam-roller in respect of which the information was taken out. He had not obtained a licence to use the steam-roller within the county of London. On the 3rd of November, 1896, the steam-roller was, by the directions of the respondent, being driven along the highway, High-street, Eltham, driven for any purpose of rolling the highway, but in the county of London; but it was not being so was passing along the highway in the course of a journey from Crickenhill to Ealing, in the county of in road making. In the course of such journey it Middlesex, where it was to be temporarily employed would travel over some sixteen miles along highways in the county of London.

the

It was contended for the respondent that as the steam-roller was only passing along the highway for steam-roller was not being purpose of proceeding to another district, such "used" within the meaning of the bye-law.

It was contended for the appellants that the steamroller was being used to go to Ealing and earn money there; that it was being used as a locomotive because it was being propelled by steam from one place to another, and that the intention of section 32 was to make all persons who should use and wear the highways by means of any locomotive contribute by paying a licence fee to the county rate.

The magistrate decided that the mere passage of the steam-roller over the highways within the appellants' district while crossing from one locality to another was not such a user on the highway as was contemplated by the bye-law, and he accordingly dismissed the information.

The question for the opinion of the court was whether upon the facts above stated the steam-roller was "used within the meaning of the bye-law.

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Daldy, for the appellants.-The steam-roller was being used" on the highway while it was passing from the county of Kent to the county of Middlesex just as much as if it were being used on the highway for the purpose of rolling the same. Passage of a locomotive along a highway is a 46 user " of the highway within the contemplation of the bye-law, and of the 32nd section of the Act. The licence fee was to be paid in aid of the county rate, and the clear intention of the Act was to compel those who damaged the road by the use of locomotives to contribute towards the cost. The damage to the road would be the same whether the steam-roller was merely passing along the highway or was doing work on the highway. [He referred to Bell v. Stockton Tramway Co., 51 J. P. 804.]

The respondent did not appear.

COLLINS, J.-Although we have not had the advantage of hearing any argument in favour of the view taken by the learned magistrate, the point appears to me to be reasonably clear, and I feel compelled to differ from the view taken by him. The Case arises in this way. The Highways and Locomotives Act, 1878, provides that the county authority may make, alter, and repeal bye-laws for granting annual licences for locomotives used within their county, and that the owner of any locomotive for which a licence is required under any bye-law so made who uses or permits the same to be used in contravention thereof shall be liable to a penalty. In this case the owner of a steam-roller was with the steam-roller proceeding along a road within the jurisdiction of the London County Council for the purpose of fulfilling some contract of employment in the adjoining county

H. C.

It seems

of Middlesex. The steam-roller was not actually at work in mending roads, but it was on its way travelling and passing over a highway in order to fulfil its contract at its destination. The point was taken that the owner ought to have had a licence, and that not having had a licence, he was subject to a penalty within section 32, if there were a bye-law applicable to the case. There are bye-laws applicable to this case, and it seems to me that these byelaws contemplated the passage of a locomotive over the road, and this steam-roller is a locomotive. They clearly contemplated such passage as a user which would oblige the owner to have a licence. It is true that they provide for mitigating the full rigour of the bye-law by allowing a person who will assert that he does not intend to use the locomotive on more than six days within the county, and that he has a licence in force for another county, to have what is called a travelling licence on reduced terms. It is obvious that unless he can bring himself within these provisions he will be, within the view of the bye-law, liable to the whole amount of the licence. to me to be the intention of the bye-laws that a person who uses the locomotive for the purpose of travelling from one place to another in order to do work when he gets there, should be taken to use the highway, and that being the intention of the byelaw, it seems also to be the intention of the Act under which the bye-law is made. An engine only supplies the means of locomotion, and the provision we are now dealing with is a Highway Act, which is obviously an Act for the protection of highways. These locomotives use the highway whether they are merely passing over the highway, or whether they are drawing a load upon it, and generally speaking the locomotive is the more serious factor in the case. Even when you have a traction-engine dragging a load on the road the traction-engine is much more likely to injure the highway than the load that follows. Much more so is that the case in the case of a steam-roller, and the steam-roller's action on the road appears to be just as injurious whether it is engaged in mending the road or passing over it. In either case it is the same weight passing over it, and it does the mischief the Legislature intended to be dealt with. If I borrow a horse for the purpose of drawing a load at a place ten miles distant, and if I ride the horse to that place, could it be said that I was not using the horse when passing over that ten miles? It seems to me as a matter of common sense that I should be using the horse on that journey, and in the same sense the roadway also.

Under these circumstances I think the learned magistrate was wrong in his decision of this case.

ruptcy Act, 1883 (46 & 47 Vict. c. 52), s. 44 (iii.)— Bills of Sale Act, 1882 (45 & 46 Vict. c. 43), 88. 7, 15.

Goods in the possession of a bankrupt in his trade or business at the commencement of the bankruptcy under such circumstances that he is the reputed owner thereof, though covered by a bill of sale, pass to the trustee in the bankruptcy, and not to the grantee of the bill of sale.

Appeal from a judgment of his Honour Sir A. G. Marten, Q.C., in the county court at Luton (reported at 41 SOLICITORS' JOURNAL, p. 13), deciding that the goods comprised in two bills of sale, or either of them, on the bankrupt's farm, in his trade or business, at the commencement of the bankruptcy, were in his possession, order, and disposition by the consent and permission of the true owner under such circumstances that he was the reputed owner thereof, and consequently passed to the trustee in the bankruptcy, and not to the grantee of the bills of sale.

The bankrupt, who was a dairy farmer, of Slapton, in Buckinghamshire, granted the first of the two bills of sale to the appellants, the London and Universal Bank (Limited), upon the 28th of February, 1896. This bill of sale was given to secure a loan of £500 and interest at 60 per cent., repayable £75 for interest on the 28th of May then next, and the principal sum of £500, together with the interest then due, on the 28th of August, 1896." The schedule annexed to this bill of sale comprised, amongst other things, the debtor's household furniture, and also the cattle, poultry, and fixtures used in his business as a dairy farmer. The second bill of sale was dated the 20th of March, 1896, and was given to secure a loan of £200 and interest at 60 per cent., repayable, both principal and interest, on the 20th of June then next." The schedule to this bill of sale comprised certain cattle on the farm, 300 acres of grass, the crops of 70 acres of arable land, and the tenant-right, goodwill, and valuation of the farm. Both bills of sale contained the usual proviso that the grantee should not be entitled to seize or take possession of the chattels comprised in the schedules for any other cause than those specified in section 7 of the Bills of Sale Act (1878) Amendment Act, 1882. None of the causes entitling the grantee to take possession had arisen before the 8th of April, 1896, when the debtor committed an act of bankruptcy by non-compliance with the terms of a bankruptcy notice served upon him upon the 1st of April. A petition was presented against him on the 9th of April, and a receiving order was made upon the 20th of April.

Upon the 22nd of April the official receiver took possession of the debtor's farm and goods, including all the chattels comprised in the two bills of sale.

The goods were sold, and the proceeds, £2,154 48., paid into court.

The holders of the bills of sale moved before the county court at Luton, on the 13th of August, 1896, to obtain the money representing the value of the goods comprised in their bills of sale. His Honour Sir A. G. Marten, Q.C., in a considered judgment, delivered upon the 22nd of October, 1896, allowed their claim as to the household furniture and all other chattels comprised in the bills of sale except such as were "in the possession, order, or disposition of the bankrupt in his trade or business," which he held to have been in the bankrupt's possession at the date of the bankruptcy by the consent and permission of the true owner under such circumstances that the bankrupt was the reputed owner thereof; therefore, by section 44 of the Bankruptcy Act, 1883, they passed to the trustee,

The bills of sale holders appealed.

Brown, who was then carrying on the business of a cotton spinner and manufacturer. For some years previously the defendant had been the manager of the business. On becoming a partner the defendant did not bring any capital into the business, but the value of the business was estimated at £62,445, and it was agreed that the sum of £41,630 should be considered as having been brought into the partnership by the father, and the remaining £20,815 by the son. The father was to take two-thirds of the profits, and the son one-third.

The deed of partnership contained the following clause: "If the said George Brown shall die during the partnership, the said George Thomas Brown shall be absolutely entitled, for his own use and benefit, to the whole or entirety of the capital of the partnership ... and the said George Thomas Brown shall within six calendar months next after such death duly execute and deliver unto the executors or administrators of the said George Brown a bond for the payment to them of the principal sum of £10,000. But if the said George Thomas Brown shall die during the partnership, the said George Brown shall be absolutely entitled, for his own use and benefit, to the whole or entirety of the capital of the partnership, and the said George Brown shall within six calendar months next after such death duly execute and deliver unto the executors administrators of the said George Thomas Brown a bond for the payment to them of the principal sum of £15,000."

or

By a deed of even date the son agreed to pay to the father and his executors a rent-charge of £139 per annum in respect of the freehold property of the partnership.

The contract of partnership was carried into effect, and the father and son carried on business together until October, 1884, when the father died.

The Crown claimed succession duty in respect of the father's share of the capital of the partnership which passed to the defendant, less the sum of £10,000 payable by the defendant to the estate of the deceased.

The question was whether the defendant's acquisition of his father's share of the capital of the partnership was a succession, or whether the provisions of the partnership deed constituted a sale and purchase.

The Divisional Court gave judgment against the Crown.

The Crown appealed.

Sir R. B. Finlay, S.G., and Vaughan Hawkins (Sir R. E. Webster, A.G., with them), for the Crown. Haldane, Q.C., and Danckwerts, for the defendant. Cur. adv. vult.

RIGBY, L.J., read the judgment of the court as follows: In this case the Crown claims from the defendant, George Thomas Brown, succession duty in respect of any benefit derived by him from his acquisition, on the death of his father and partner, George Brown, of the share of the latter (being two-thirds of the whole) in a partnership business of George Brown & Co., carried on by the father and son down to the death of the father in 1884; the real question being whether the arrangement (to use a neutral phrase) under which the son acquired the share of his father was or was not in the nature of a sale by the father to the son within the meaning of Fryer v. Morland, 25 W. R. 21, 3 Ch. D. 675, and so excluded from the operation of the Succession Duty Act.

The facts of the case are not in dispute. George Brown, the father, to the end of the year 1880 carried on the business of cotton spinner and manu

COURT OF APPEAL.

The

facturer, his son, George Thomas Brown, assisting him in the management of the business, but having no share therein. George Brown, the father, being minded to take his son into partnership with him, caused a valuation to be made of his assets employed in the business as on the 1st of January, 1881, and a general statement of account showing his position in the business on the same day. In this statement of account the items on the credit side were the values of the assets at the prices put upon them, a large banker's balance of £10,000 (obviously, we think, made up to an even sum considered sufficient to start the new firm), and the accounts due to the business. The total of these assets on the credit side was £63,824 8s. 11d. On the debit side was placed the amount of the accounts owing in the business, being £1,378 163. 1d., and there resulted a net balance to the credit of the business of £62,445 12s. 10d. statement of account was taken as the starting-point of the new firm, and the credit balance attributed as to £41,630 8s. 6d. (two-thirds of the whole) to the father as his capital, the remaining one-third, or £20,815 48. 4d. being attributed to the son, though the whole amount was in truth brought in by the father. We have thought it desirable, with reference to the arguments pressed upon us, to state plainly the way in which the exact balance was arrived at, but for greater simplicity that balance will hereafter be dealt with as if it were a round sum of £60,000. The articles of partnership, which contained or evidenced the terms of the only contract between the father and the son, were dated the 31st of March, 1881. They carried the partnership back to the 1st of January, 1881, and made the term of the partnership five years, if both partners should so long live, subject to a clause enabling either partner to expel the other in case (among other events) of lunacy, bankruptcy, or breach of the articles. The benefits conferred upon the son by the articles included the following: He got at once one-third of the capital, say £20,000, and one-third of the profits. If the partnership continued for the five years, or determined by any other reason than the death of a partner, his share of capital was to be one-half, say £30,000. If his father died during the term, he was to have the whole capital, say £60,000, subject to his giving his father's executors, within six months after his death, a bond conditional for payment of £10,000 and 4 per cent. interest thereon from the father's death by ten instalments of £1,000 a year, the first payable, with interest as provided, at the end of twelve calendar months from the date of the bond, thus giving eighteen months for the first payment at the son's election. In the event of the son's death during the term, his father was to have back the business (formerly his own), but was to pay the son's executors £15,000, secured by his bond in a similar manner. The consideration given by the son (and it cannot be suggested that it is not in law a good consideration), was his agreeing to be a partner, and thereby taking upon himself liability for the debts of the firm, and his rendering services as a partner, with the addition in the sole case of his succeeding to the whole business of the money consideration involved in his giving the bond for £10,000. The money payment and the obligation to indemnify the father's estate against the debts of the firm constituted the only additional consideration for the acquisition of the father's two-thirds. Can the arrangement above summarized, looking at the case in substance apart from form, be fairly described as a case of sale and purchase within the meaning of the exception established by Fryer v. Morland? The contract between father and son is one and indivisible, and it is not permissible to isolate one of its terms from the other.