NOTE. Although questions as to the exclusive jurisdiction of Courts of Law and Equity are now obsolete in England, a few cases under this head are retained for use in relation to States where the old line of demarcation is kept up.

No. 1.—TAFF VALE RAILWAY CO.

(H. L. 1847.)

RULE.

v. NIXON.

WHERE an account has become so complicated that a Court of Law would be incompetent to examine it upon a trial at nisi prius, it is matter proper for the cognisance of a Court of Equity.

Taff Vale Railway Co. v. Nixon.

1 H. L. C. 111.

This was an appeal from a decree of the Vice Chancellor of England, directing certain accounts to be taken, as hereinafter mentioned; and the question in substance was, whether an action at law was not a more appropriate course of proceeding than a bill in equity.

The appellants were a railway company, incorporated by act of Parliament. The respondent Nixon was a railway contractor; and by an indenture dated the 6th of April, 1838, and made between him and the appellants, being a railway contract in the ordinary form, he contracted to do certain works mentioned in the specification annexed thereto, for the sum of £7395 15s., subject to deduction or increase as in the contract stated, and with a provision for

No. 1.-Taff Vale Railway Co. v. Nixon.

payment for extra works, at prices particularly specified. Nixon having to some extent proceeded with the execution of the works, was under the necessity of procuring advances of money, and for that purpose applied to David Storm, who was also a railway contractor, to advance him sufficient money to complete the works, which Storm agreed to do; and accordingly an agreement was entered into,1 and a power of attorney, dated 8th December, 1838, was given by Nixon, which, after reciting the said contract and application to Storm for the advance of money, constituted him the lawful attorney of Nixon, to direct and carry on, in his name, the works comprised in the contract, and to demand, sue for, and receive from the company all sums of money which from time to time might become due from them to Nixon under the contract, and to give them discharges, and to compromise or refer to arbitration all disputes that might arise respecting the performance of the works, and also to pay for Nixon, out of the moneys to be received from the company, all debts and just demands which might accrue to Storm or others, against Nixon during the progress, and until the completion, of the said works, and generally to do and perform all acts which Storm should judge necessary in and about the premises, and to retain to himself, out of the moneys to be received from the company, £5 per cent. for interest on all his advances and £300 at the completion of the contract, for his care and attention in directing and carrying on the works.

Notice of the agreement and power of attorney was sent to the appellants, together with a letter from Nixon, requesting them to pay to Storm all moneys becoming due to Nixon on account of the

contract.

In March, 1839, an arrangement was come to by Nixon and Storm and the appellants, by which a new contract between the appellants and them, as joint contractors, was substituted for the first contract with Nixon; and he and Storm, by the new contract, jointly and severally covenanted for the performance of the contract; and the appellants covenanted to pay them as well for the works then done and not paid for, as also for the works to be done by them jointly.

The works were proceeded with under this contract, Nixon hav

1 The agreement was a separate memorandum, explanatory and restrictive of the power of attorney,- viz., that the same

should not be acted on as regarded the managing and conducting of the works by Storm without Nixon's consent.

ing the management of the working part, but the appellants transacting all money matters connected with the contract with Storm.

In December, 1840, a fiat in bankruptcy was issued against Storm, under which he was declared a bankrupt, and one Nicholas and two others were appointed creditors' assignees. There was also an official assignee.

In May, 1842, Nixon filed his bill against the appellants and the said assignees, and thereby, after stating the instruments before stated, he made the following case, viz.: That notwithstanding the last-mentioned contract, the works were carried on by Nixon in the same manner as before; and he continued to carry on and execute the same from that time until both the specified works and the extra works were completed; that in January, 1841, all the works were completed pursuant to the contract, and the extra works so performed amounted to the sum of £9133 2s. 1d., according to the schedule of prices annexed to the contract, and the specified works amounted to the sum of £7395 15s., making together the sum of £16,528 17s. 1d.; that during the progress of the works, and at the completion thereof, and before the 16th of December, 1840, Nixon and Storm had received various sums of money on account of the contract and extra works, amounting in the whole to £9204 12s. 6d., and no more, so that there remained a balance of £7324 4s. 7d. due from the company to Nixon; that in the month of December, 1840, Nixon had reason to believe that Storm was in embarrassed circumstances, and he requested his solicitor to give notice to the company not to pay Storm any more money in respect of the contract, and the solicitor wrote and sent a letter to the then secretary of the company, stating that Nixon had consulted him upon the situation of his affairs with Storm and the company, and his inability to obtain from the company an account of the moneys paid by them upon the contract since the 11th of April last; that the consideration for the power of attorney from Nixon to Storm was Storm's engagement to advance Nixon all sums of money he might require, and inasmuch as Storm had not fulfilled his part of the engagement, Nixon requested that the company would not pay him any further sums on account of the contract, and also that they would furnish forthwith an account of the moneys paid by them in respect of the contract since the 11th of April, 1840.

The bill next set forth a letter sent to Nixon by the solicitors of

Storm's assignees, dated in May, 1841, applying for authority to use his name as plaintiff in an action to be brought against the company, to recover balances due to Storm's estate in respect of works, money, and materials provided by him in execution of the contract and extra work thereon, up to the time of his bankruptcy; that Nixon declined to comply with that request; that after the works were completed, he sent to the company the particulars of his demand on them, and requested payment of the balance of £7324 4s. 7d., and the company then, and ever since, admitted that the whole of the work amounted to the sum of £16,528 17s. 1d.; and that Nixon alone, or he and Storm, were entitled to receive that sum, but they alleged that a much larger sum than £9204 12s. 6d. had been paid by them to Nixon, and to Storm and his assignees, and a very small sum only remained due, or that the said balance, or the greater part thereof, had been in some manner settled or accounted for with Storm or his assignees, whereas he, Nixon, charged the contrary; and that if any further or other sum than £9204 12s. 6d., before mentioned, was paid by the company to Storm, the same was paid since the company received the notice of December, 1840, or in respect of some other work done for the company, with which Nixon had nothing to do, and which was not connected with the said contract.

The bill further stated, that, in April, 1842, Nixon's solicitor sent a letter to the company's secretary, demanding payment of the said balance, £7324 4s. 7d., and intimating that, unless some immediate arrangement was made for its payment, they would institute proceedings for its recovery; that the secretary to the company sent an answer by letter, which, after stating the effects of the first and substituted contracts, the power of attorney to Storm, and his bankruptcy, &c., concluded by saying the settlement of the accounts was to be submitted to the arbitration of Mr. Robert Stephenson, and if Nixon had any claim on the company in common with Storm, the whole affair would be settled by the arbitrator; that after receipt of this letter, Nixon's solicitors inquired, and discovered that the company and the assignees of Storm had agreed to refer all the matters of the said contracts, and many questions of account between the company and Nixon and the assignees, and other questions between the assignees and the company, to Mr. Stephenson, who was in fact proceeding to arbitrate thereupon, without the authority or consent of Nixon, and

No. 1.-Taff Vale Railway Co. v. Nixon.

that it was the intention of the company to pay to the assignees whatever balance the arbitrator should find due; that all the money that was due from Nixon to Storm, in respect of his advances, had been paid to him or his assignees.

The bill prayed that accounts might be taken of all sums paid by the appellants to Nixon and to Storm and his assignees, in discharge of the said sums of £7395 15s. and £9133 2s. 1d; and of all moneys advanced and properly laid out by Storm, on account of the works; and that the sums so received by him and his assignees might be set off against the sums so laid out by him, and the balance ascertained, &c.; and that the company might be restrained from paying any sums to the said assignees; and that they, the assignees, might be restrained from instituting any action or other proceeding against Nixon in respect of the matters aforesaid.

The appellants, by their answer, submitted that the suit was improperly framed; that they had no connection or privity with the dealings and accounts between Nixon and Storm, and ought not to be parties to any suit in respect thereof; that Nixon was not entitled to any account or relief against the appellants in respect of the said contract and extra works, and the mixing up of such account with the pecuniary transactions between Nixon and Storm was multifarious, and they claimed the same benefit of such objection as if they had demurred to the bill; and they further said, that they and the assignees had agreed to refer all the matters of the contract to Mr. Stephenson, and he had made his award thereon.

The other defendants to the bill having also put in their answers, the cause came to be heard before the Vice Chancellor of England, who, in giving his judgment, observed that "he did not see in the case anything to distinguish it from the ordinary case of a person making a mortgage of his debt; and, that being so, it followed as a matter of right that Nixon ought to be a party to the settlement of that sort of double account, which would, first of all, have to ascertain what was due from him to his mortgagee, and then what was due from his debtors to him, in order that it might be seen what was the true state of the accounts between the parties." His Honour, accordingly, pronounced a decree, referring it to the Master to take the following accounts, viz. :

An account of all extra works performed by Nixon for the Taff Vale Railway Company, under the said contract. An account of all sums of money paid by them to Nixon and to Storm, or either