SUPREME COURT.

SEQUESTRATION, ACCOUNT - CURRENT, CLAIM OF BALANCE THEREOF,- --BREACH OF DUTY, BILLS RAISED BY SEQUESTRATOR ON THE CREDIT OF ESTATE,-BILLS EXCLUDED FROM ACCOUNT-CURRENT,- -SUGAR BELONGING TO SEQUESTRATION ACCOUNT, PLEDGED ON DOCK-WARRANT,-REMIT TO MASTER TO ADJUST ACCOUNT.

Before

His Honor Sir C. FARQUHAR SHAND, KNT., Chief Judge, and

His Honor Mr. JUSTICE J. GORRIE.

BRÉARD & Co.,-Plaintiffs,

versus

THE CEYLON COMPANY LIMITED,— Defendants.

This Action has been entered by Madame Marie Catherine Idalie Jamin, the duly authorized wife of Ferdinand Bréard from whom she is separated as to property, and the latter for the authorization of his said wife and the validity of the proceedings, against the Ceylon Company, Limited, of London and represented in Mauritius by James Henry Mercer, their manager.

After narrating that the Defendants had been appointed sequestrators of the Estate of "Savannah," then the property of the Plaintiffs, and were entrusted with its entire management until the 20th of October 1864, and that the Defendants furnished an account current of their intromissions, the Plaintiffs assert in their Declaration that the balance of $21,551.58 was not the true balance due by the Defendants; they also aver that in breach

of their duty as sequestrators, the Defendants did cause to be done, the following acts: (1st) use the credit of the Estate "Savannah" for their own benefit, by causing the manager under such sequestration, to wit: Mr.Joseph Darné, to sign promissory notes upon which they raised money for their own use, for a sum of about $100,000; (2) pledge the sugars of the said Estate for and against Dock warrants and keep such sugars so pledged for long periods, and this as well during such sequestration as at the time when it had actually expired or when it was just about to expire, and this for a sum of about $80,000; (3) let out or hire the store of the said Estate situate at Souillac, and placed under sequestration with it, and appropriate or allow others to appropriate the same without in any wise crediting the accounts of the Estate with such rent; and (4) dispose of, directly by themselves, a considerable quantity of sugars of the said Estate, and use the proceeds for their own purposes; and that they have allowed others to do the same without any mention of these facts being made in their accounts, and more especially that they never credited the Estate "Savannah" with the proceeds of 2945 bags of sugar sold to Leishman & Co., and of 529 bags sold to Aikin Bourguignon & Co.; and that they either applied to their own use 3,000 bags of sugar, or allowed the same to be left on the said Esta. Savannah when it was sold to Mrs. Widow Jamin, although all such sugars had actually been made by them as sequestrators of the said Estate, and during such sequestration; which breaches of duty on the part of the Defendants give rise, as the Plaintiffs contend, to the application of Art. 608 of the Code of Civil Procedure, and entail on the Defendants the forfeiture and loss of all the sums charged by them for Commistion. The Plaintiffs further contend that giving effect to the emendations which they setforth in a statement annexed to the Declarasion, that the real balance due by the Defendants is the sum of $131,135.26 as at 30th September 1867, and they pray Judgment that the Defendants may either be condemned to credit the sequestration account with the said sum of $131,135.26 over and above the balance admitted by them, or to be condemned to pay the said amount to the Plaintiffs or such creditors as may attach the same; and they claim interest on the new balance, and on the balance admitted by the Defendants, at the rate of 12 per cent from the date of the service of the Declaration, and all costs of suit, the Plaintiffs making certain reservations of their rights to make further demands.

The Defendants, by their plea of 21st November 1867, pleaded to this Declaration; (1) that the Plaintiffs had no right or cause of Action by reason of their several allegations

(2) that they denied the several facts, matters a 1 things in the said Declaration and particr ars setforth (3) that the Defendants were no juilty of the grievance laid to their charge, and were not indebted in the balance brought out by Plaintiffs.

Issue having thus been joined, the further prog.ss of the suit was delayed from that date until this year, in consequence of the Plaintiffs being, as they alleged from their circumstances, unable to bring the issue to trial

sooner.

The examination of certain witnesses, de bene esse, had been allowed in the meantime, and certain amendments to Declaration tendered, and at length on 19th October 1871 the case came on for hearing. L.ROUILLARD of Counsel for the Plaintiffs opened upon eighteen objections to the accounts and the conduct of the sequestrator; but the whole of these being purely matters of accounting, we referred them to the Master with the exception of the eighteenth being an item of costs to Hewetson in certain proceedings upon which we indicated our opinion at the time, reserving the ultimate disposal to our final Judgment in this cause and the others about to be mentioned which formed the 12th, 13th, 14th, 15th and 16th of Rouillard's objections to the account which we reserved for enquiry and determination by the Court; viz; (1) the charge that the sequestrator had used his position to raise bills on the credit of the Estate which he had not brought into the account; (2) that he had pledged sugars on Dock warrant in like-manner; (3) that he had misappropriated various quantities of sugar; (4) that he had lent the store at Souillac without rent, or at least had not accounted for the rent in his accounts. Upon those questions much evidence was heard by us on the 23rd day of October and several subsequent days, and parties having been fully heard by their respective counsel, we took the important matters pleaded before us into our consideration, and we now pronounce the following:

JUDGMENT.

This case is the sequel of others which have been formerly before this Court in connection with the Estate "Savannah." In the reports of these former Actions in PISTON'S, on 22nd September and 5th October 1864, and a case as to production of vouchers in 1867, the terms of the appointment of Arbuthnot, then managing Director of the Ceylon Company, to be sequestrator, will be found alluded to.

1. As to the Bills or Promistory notes excluded from Account,

It is not denied by the Defendants that they required Darné to draw bills for his advances, and that they discounted those bill at the Bank, either for the purpose of obting the money for the necessary advances or 'for subsequently recouping themselves, so that their own balances should not be diminished by the advances they had made. The bills or part of them or rather the Promissory notes sigued by Darné as "administrateur judiciaire de Savannah" have been produced. He promises to pay at a fixed date a certain sum which has been received by him in cash for the wants of the Estate. The documents were endorsed by Arbuthnot the managing Director of the Defendants and discounted by the Oriental Bank Corporation. When the Court appoint a sequestrator and fix or contemplate a percentage and commission for his services, it is in the expectation and on the understanding that the sequestrator is to advance the funds necessary out of his own proper means with the banking or other arrangements which the sequestrator may enter into for the purposes of the business, the parties interested in the Estate have nothing to do, nor would the Court permit its process to be used for the purpose of revealing in a Court of Justice arrangements which the Banks and the sequestrator had made for their mutual advantage and with which they, the only parties concerned, were contented. The position of affairs here, however, is something very different. The Plaintiffs alleges that the sequestrator did not in point of fact make the advances required for the Estate and for which he charges the sum of 12 per cent as commission, but that having caused Darné the manager, under the title of "administrateur judiciaire" to emit promissory notes for the wants of the Estate, the money was advanced by the Bank to Darné in this capacity, at the rate of 10 per cent, the position of the managing Director of the Ceylon Company becoming that merely of the agent who took the Bills to the Bank for the purpose of getting them discounted with his indorsation

The allegations go even farther than this and to the length that money was thus raised much more than sufficient for the wants of the Estate, and that the sequestrator employed his position to obtain money for the general purposes of his Company.

These bill transactions are kept out of the accounts as filed, these being presented as if the sequestrator had from his own resources made the necessary advances for the 66 entrecoupe." We have considered this question with a due regard to all that has been advanced by the Company as to what was the practice at the time they were appointed sequestrators, to the impossibility of any company such as

their's conducting business on an extensive scale without applying to Bankers for advances, and to the undoubted benefit which such companies are to the most important interests of the Colony, and especially to the service which the company rendered to this particular Estate and those interested in it by accepting the position of sequestrator at a season when capitalists were unwilling to take upon themselves the liabilities of the " entre-coupe" of those great concerns. After giving all due weight to these considerations, the question remains to be solved whether in the face of the transactions which actually took place, it can be said that the sequestrator really advanced the money and whether he did not also in point of fact raise more money than was necessary by pledging the credit of the Estate through its manager.

It is clear that the first thing necessary for the elucidation of this point is to have the Bills brought into the account. They did pass, they do form part of the vouchers now on the table of the Court, and before we go further we must have an account with these large amounts duly inserted in their proper places, as they were obtained from the Bank on discount, and as ultimately paid to the Bank when the bills became due. When this is obtained, we shall be better able to determine what amounts have been advanced by the sequestrator, what his claims are under the aspect of affairs which may then present itself, and generally how best to dispose of the ques tions which have arisen with justice to all parties. We, therefore, remit to the Master to obtain from the Defendant the accounts of the sequestration stated, by bringing to the debit and credit respectively, the promissory notes granted by Darné as "administrateur judiciaire" of "Savannah" and discounted by the Bank, and the amounts paid to the Bank to retire those promissory notes when due as of their proper dates respectively.

II. Pledging the sugars on Dock-warrants:

The allegation of the Plaintiff that certain quantities of the sugars of the Estate pending the sequestration, or sugars belonging to the sequestration account, were placed under Dock-warrant, has also been admitted and justified by the Defendants. We have had from more than one source detailed accounts of the

sugars so dealt with. The money received from pledging the sugars in this manner was not brought to the credit of the Estate; and the sequestration accounts as given in do not exhibit in any manner that the proceeds of the crop had been thus used. If the Defendants had been able to shew us that the pledging had been a matter of imperious necessity, with the object of preventing loss to the Es