1886.

υ.

THE

tion of the policy. That depends on whether the transaction, by FERGUSON Which Ferguson and Grimwood sold the property in the goods insured by them, was a sale to a person other than Ferguson and NATIONAL Grimwood within the meaning of the condition. It is admitted AND MARINE that by the sale the property in the goods passed from Ferguson and Grimwood to Ferguson alone. It is, however, contended that because the property was sold to one of the insurers, there was not a sale to another person within the meaning of the condition.

FIRE

INSURANCE

Co. or N.Z.

Faucett J.

A case has been relied upon, in which it was held that under a covenant in a lease against transferring, such covenant was not avoided under circumstances similar to those in this case. Vice-Chancellor Bacon, in his judgment in the case, says :Corporation of Bristol v. Westcott (1), at p. 464, “So far from there being an assignment in this case the partners stipulated in their agreements that Houghton should not assign unless he could get the assent of Miss Westcott. Nothing can be plainer than the contract between the two partners. There has been no breach of the covenant not to assign. There has been no parting with possession. For one partner to withdraw does not alter the legal rights of the lessor." Jessel, M.R., says (p. 466) :-" In the present case there is a lease to Baker and Houghton, and there is a covenant' that they, the said C. Baker and R. Houghton, their executors, administrators or assigns, or any or either of them, will not during the said term assign, underlet, or part with the possession of the said hereby demised premises, or any part thereof, to any person or persons without the written consent of the said J. H. Westcott, her heirs or assigns.' In reading these words we must recollect that two persons do not usually have the same executors or administrators, and therefore 'their executors and administrators' cannot mean the executors and administrators of both, nor can the words mean 'their respective executors and administrators,' because one would most likely die before the other, and we are not to assume that the parties contemplated such an improbable event as that of the lessees dying at the same moment. The words therefore must mean the executors or administrators of the survivor. I only say this to show that it is impossible to deal with these covenants literally. If you take

1886.

บ. THE NATIONAL FIRE

AND MARINE

INSURANCE

Co. OF N.Z.

Faucett J.

this covenant to the letter, a forfeiture would be caused by an assignment by the executors of the lessee who died first. Of FERGUSON course the clause cannot have that meaning, for it must refer to assignment by a man who has something to assign. Now we come to deal with the words 'part with the possession of the demised premises to any person or persons.' What do the words 'any person or persons' mean? Do they mean, 'any other person or persons?' Of course, if the demise had been to one person the words must have had that meaning, and the question is whether, where the demise is to several persons, the words have not the same meaning-whether, in fact, what was intended was not this, that the lessees were not to let into possession any one not previously approved of as tenant by the lessor. Giving the words that meaning, you make the covenant sensible, and I think that is their fair meaning. Upon that construction what has occurred is not a breach of the covenant, and consequently I think that the decision of the Vice-Chancellor is correct." Brett, L.J., says: "I will not give any opinion upon the question whether an assignment by one of the two lessees to the other would have been a breach of the covenant, for there has not been any such assignment, and the question before us turns only upon the words relating to parting with the possession of the demised property to any person. It seems to me, upon the construction of this covenant, that parting with the possession to any person means to any person other than one of those to whom possession was given by the original lease." Cotton, L.J., says:"When we look at the words of this covenant with regard to the circumstances of the case when it was entered into, I think its proper construction is that the lessees are not to give possession to any one who has not already been admitted as tenant, or approved as a tenant by the lessor."

That case certainly does not decide the point raised here. On the contrary, the very question raised here is avoided, the judges expressly avoiding giving a decision on the point. There is a case referred to, which is a decision on the very words as to the assignment. That is the case of Varley v. Coppard (5). Willes, J. says (p. 507).—“I am of opinion that the plaintiff is entitled to (5) L.R. 7 C.P. 505.

1886.

FERGUSON

v.

THE

FIRE

INSURANCE

Co. OF N.Z.

Faucett J.

judgment. The action is brought for a breach of a covenant in

a lease whereby the plaintiff demised a messuage to one Watson, with a covenant by Watson, for himself and his assigns, that NATIONAL during the term the lessee should not, neither should his AND MARINE executors, administrators or assigns, assign the demised premises without the consent in writing of the plaintiff, his executors, &c., first obtained prior to such assignment. Watson, with the consent of the plaintiff, assigned the term to the defendant and one D'Aeth. Notwithstanding this consent, the covenant not to assign still remained in force, and the defendant and D'Aeth stood in the same position as if they and each of them were in under a lease which restricted them from assigning. The action is brought against one of the assignees for having assigned his interest in the premises to the other of them without the consent of the lessor. Is that a breach of the covenant? I think it is. The covenant, though it relates to the estate of the two, necessarily involves the interest of each: it means that neither of them shall assign the whole or any part of his interest without consent; otherwise a tenant might assign all but a sixty-fourth part. . . . The argument in effect amounts to this, that if the two assigned, one his undivided moiety to A. and the other his undivided moiety to B., there would be a breach of the covenant; but that if each assigned his undivided moiety to B., there would be no breach. That, it seems to me, would be frittering away the covenant and making it worthless. It is unnecessary to consider whether the merely taking a partner would be a breach of the covenant. But I think an assignment by one partner of his undivided moiety to the other, clearly is a breach of covenant." That decision is not reversed by the decision I have referred to in The Corporation of Bristol v. Westcott (1).

We must look at the meaning of the clauses in this policy of insurance. There must be uberrima fides between the parties to a contract of insurance. The conditions ought to be read fairly and without any leaning either to the one side or the other. We ought to put a fair and reasonable construction on the words of the covenant. The words are plain, and it is certain that there has been a change of property. If A. and B., the owners of goods, sell them to A., there is a change in the property by the

1886.

v.

THE

FIRE AND MARINE INSURANCE

Co. of N.Z.

assignment or transfer, or sale, as it may be called. Are we to limit the meaning of the words in the condition because A. and FERGUSON B. have transferred to A. alone? That would not be giving a fair meaning to the words. There is a transfer of property and NATIONAL a change of ownership as contemplated by this condition. Take a case of common occurrence. Two persons are carrying on business. One buys some articles from the partnership for his own use. Is not there a change of the property in these goods from the partnership to the one who buys them? Here there was no notice of the change of ownership. The company may think one of the insurers trustworthy, and not the other.

There is another ground on which the plea might be supported. It shows clearly that Grimwood, one of the insured, sold all his interest in the property insured. It is admitted that Ferguson cannot sue alone in respect of the interests of Ferguson and Grimwood. The plea shows clearly that one of the parties had ceased to have an interest in the property insured. I do not, however, place my decision on that ground.

As to the declaration, it is an unusual one. The plaintiffs claim under the deed, and set up another claim which seems to me outside of that deed. It is said, that by the conduct of the defendants they are prevented from denying that the averments in the deed are true. If the defendants alleged that the statements in this deed were untrue, the course for the plaintiffs to pursue is to set up as a replication some equitable ground which would prevent the defendants from relying on the defence. It is a roundabout proceeding brought about by the present state of the law as to pleading. It strikes me that on the facts set out in the third count, and admitted by the demurrer, it would be a most inequitable proceeding on the part of the company to defend themselves on that ground. A Court of Equity would not allow such a defence to succeed.

Judgment for defendants.

Attorney for plaintiffs: McLaughlin.

Attorneys for defendants: Creagh & Williams.

Faucett J.

1886.

Nov. 2.

Faucett J. Windeyer J.

and Innes J.

REGINA v THE REDHEAD COAL MINING COMPANY (No. 2).

Scire facias-Application to amend writ-Jurisdiction-Costs of application.

The Court has jurisdiction to allow a writ of scire facias, issued on the fiat of the Attorney-General, to be amended on the application of the plaintiffs by adding new counts. It is not necessary that the Attorney-General should issue a new fiat in respect of such added counts if they raise the same questions substantially as were intended to be tried.

The Court, accordingly, allowed an application by the plaintiffs to amend the writ, and by a majority (Faucett, J., dissenting) made the order with costs, but directed the plaintiffs to pay the costs of the amendment.

MOTION upon notice by way of appeal from a Judge in Chambers, calling upon defendants to show cause why the writ of scire facias issued herein should not be amended by the addition of

two counts.

The writ as originally issued is set out in the report of the motion to quash the writ-ante page 289.

The counts sought to be added were as follows:-" And further that the said Redhead Coal Mining Co. did, on the said 18th November, 1875, apply for a certain selection of lands as a conditional purchase for the purpose of mining other than gold mining, and was declared and became the conditional purchaser thereof, and thereafter, upon the same day, and in contravention of the provisions of the Crown Lands Alienation Act of 1861, and the Crown Lands Acts Amendment Act of 1875, apply for a certain other and distinct selection of land as a conditional purchase for the purpose of mining as aforesaid, to wit, the land in our said deed of grant mentioned and described, and was thereupon declared and became, in contravention of the provisions of the said Acts, the conditional purchaser thereof, the whole of the lands aforesaid being at and before the time when they were conditionally purchased as aforesaid open and available under the said Acts. for conditional selection for the purposes of mining as aforesaid. And by reason of the premises the said company could not and did not, in conformity with the provisions of the said Acts, conditionally select for the purpose of mining as aforesaid the land in our said deed of grant mentioned and described.