5 Q.B.D. 149

THE BRITISH WAGGON COMPANY AND THE PARKGATE WAGGON COMPANY
v.
LEA & CO.

Company—Voluntary Winding-up—Assignee of Company—Contract, how far Personal—Agreement to Repair—Companies Act, 1862, ss. 95, 131.

The plaintiffs, a waggon company, by agreement in writing let the defendants a number of railway waggons for a term of years at an annual rent, the agreement providing that the plaintiffs, their executors or administrators, should during the term keep the waggons in repair. Pending the agreement an order was made for the winding-up of the plaintiff company under the supervision of the Court, in pursuance of a resolution previously passed by the company, and liquidators were appointed, who joined the company in assigning the benefit of the contract to another company, upon the terms that such company should perform the stipulations by the assignors contained in the original contrac. The assignees took over the repairing stations of the plaintiffs and the staff of workmen employed by them, and were always ready and willing to execute all necessary repairs to the waggons:—

Held, that the defendants had no defence to an action for rent, upon the ground that the plaintiffs had incapacitated themselves from performing their contract; for, first, the voluntary liquidation of the company was immaterial, the liquidators having power under the Companies Act, 1862, ss. 95, 131, to continue the letting of the waggons; and, secondly, the repair of the waggons by the company to whom the contract was assigned was a sufficient performance by the plaintiffs of their agreement to repair.

SPECIAL CASE, the material part of which is stated in the judgment of the Court.

Nov. 25. A. Wills, Q.C. (Forbes and Lofthouse, with him), for the plaintiffs, in addition to the cases mentioned in the judgment, referred to Lindley on Partnership, 4th ed. vol. 2, 1314.

A. L. Smith (A. Kingdon, with him), for the defendants.

A. Wills, Q.C., in reply.

Cur. adv. vult.

1880. Jan. 13. The judgment of the Court (Cockburn, C.J., and Manisty, J.) was delivered by

COCKBURN, C.J. This was an action brought by the plaintiffs to recover rent for the hire of certain railway waggons, alleged to be payable by the defendants to the plaintiffs, or one of them, under the following circumstances:—

By an agreement in writing of the 10th of February, 1874, the [150] Parkgate Waggon Company let to the defendants, who are coal merchants, fifty railway waggons for a term of seven years, at a yearly rent of £600 a year, payable by equal quarterly payments. By a second agreement of the 13th of June, 1874, the company in like manner let to the defendants fifty other waggons, at a yearly rent of £625, payable quarterly like the former.

Each of these agreements contained the following clause:

"The owners, their executors, or administrators, will at all times during the said term, except as herein provided, keep the said waggons in good and substantial repair and working order, and, on receiving notice from the tenant of any want of repairs, and the number or numbers of the waggons requiring to be repaired, and the place or places where it or they then is or are, will, with all reasonable despatch, cause the same to be repaired and put into good working order."

On the 24th of October, 1874, the Parkgate Company passed a resolution, under the 129th section of the Companies Act, 1862, for the voluntary winding up of the company. Liquidators were appointed, and by an order of the Chancery Division of the High Court of Justice, it was ordered that the winding-up of the company should be continued under the supervision of the Court.

By an indenture of the 1st of April, 1878, the Parkgate Company assigned and transferred, and the liquidators confirmed to the British Company and their assigns, among other things, all sums of money, whether payable by way of rent, hire, interest, penalty, or damage, then due, or thereafter to become due, to the Parkgate Company, by virtue of the two contracts with the defendants, together with the benefit of the two contracts, and all the interest of the Parkgate Company and the said liquidators therein; the British Company, on the other hand covenanting with the Parkgate Company "to observe and perform such of the stipulations, conditions, provisions, and agreements contained in the said contracts as, according to the terms thereof were stipulated to be observed and performed by the Parkgate Company." On the execution of this assignment the British Company took over from the Parkgate Company the repairing stations, which had [151] previously been used by the Parkgate Company for the repair of the waggons let to the defendants, and also the staff of workmen employed by the latter company in executing such repairs. It is expressly found that the British Company have ever since been ready and willing to execute, and have, with all due diligence, executed all necessary repairs to the said waggons. This, however, they have done under a special agreement come to between the parties since the present dispute has arisen, without prejudice to their respective rights.

In this state of things the defendants asserted their right to treat the contract as at an end, on the ground that the Parkgate Company had incapacitated themselves from performing the contract, first, by going into voluntary liquidation, secondly, by assigning the contracts, and giving up the repairing stations to the British Company, between whom and the defendants there was no privity of contract, and whose services, in substitution for those to be performed by the Parkgate Company under the contract, they the defendants were not bound to accept. The Parkgate Company not acquiescing in this view, it was agreed that the facts should be stated in a special case for the opinion of this Court, the use of the waggons by the defendants being in the meanwhile continued at a rate agreed on between the parties, without prejudice to either, with reference to their respective rights.

The first ground taken by the defendants is in our opinion altogether untenable in the present state of things, whatever it may be when the affairs of the company shall have been wound up, and the company itself shall have been dissolved under the 111th section of the Act. Pending the winding-up, the company is by the effect of ss. 95 and 131 kept alive, the liquidator having power to carry on the business, "so far as may be necessary for the beneficial winding-up of the company," which the continued letting of these waggons, and the receipt of the rent payable in respect of them, would, we presume, be.

What would be the position of the parties on the dissolution of the company it is unnecessary for the present purpose to consider?

The main contention on the part of the defendants, however, [152] was that, as the Parkgate Company had, by assigning the contracts, and by making over their repairing stations to the British Company, incapacitated themselves to fulfil their obligation to keep the waggons in repair, that company had no right, as between themselves and the defendants, to substitute a third party to do the work they had engaged to perform, nor were the defendants bound to accept the party so substituted as the one to whom they were to look for performance of the contract; the contract was therefore at an end.

The authority principally relied on in support of this contention was the case of Robson v. Drummond^[1], approved of by this Court in Humble v. Hunter.^[2] In Robson v. Drummond^[1] a carriage having been hired by the defendant of one Sharp, a coachmaker, for five years, at a yearly rent, payable in advance each year, the carriage to be kept in repair and painted once a year by the maker—Robson being then a partner in the business, but unknown to the defendant—on Sharp retiring from the business after three years had expired, and making over all interest in the business and property in the goods to Robson, it was held, that the defendant could not be sued on the contract—by Lord Tenterden on the ground that "the defendant might have been induced to enter into the contract by reason of the personal confidence which he reposed in Sharp, and therefore might have agreed to pay money in advance, for which reason the defendant had a right to object to its being performed by any other person;" and by Littledale and Parke, JJ., on the additional ground that the defendant had a right to the personal services of Sharp, and to the benefit of his judgment and taste, to the end of the contract.

In like manner, where goods are ordered of a particular manufacturer, another, who has succeeded to his business, cannot execute the order, so as to bind the customer, who has not been made aware of the transfer of the business, to accept the goods. The latter is entitled to refuse to deal with any other than the manufacturer whose goods he intended to buy. For this Boulton v. Jones^[3] is a sufficient authority. The case of Robson v. Drummond^[1] comes nearer to the present case, but is, we think, [153] distinguishable from it. We entirely concur in the principle on which the decision in Robson v. Drummond^[1] rests, namely, that where a person contracts with another to do work or perform service, and it can be inferred that the person employed has been selected with reference to his individual skill, competency, or other personal qualification, the inability or unwillingness of the party so employed to execute the work or perform the service is a sufficient answer to any demand by a stranger to the original contract of the performance of it by the other party, and entitles the latter to treat the contract as at an end, notwithstanding that the person tendered to take the place of the contracting party may be equally well qualified to do the service. Personal performance is in such a case of the essence of the contract, which, consequently, cannot in its absence be enforced against an unwilling party. But this principle appears to us inapplicable in the present instance, inasmuch as we cannot suppose that in stipulating for the repair of these waggons by the company—a rough description of work which ordinary workmen conversant with the business would be perfectly able to execute—the defendants attached any importance to whether the repairs were done by the company, or by any one with whom the company might enter into a subsidiary contract to do the work. All that the hirers, the defendants, cared for in this stipulation was that the waggons should be kept in repair; it was indifferent to them by whom the repairs should be done. Thus if, without going into liquidation, or assigning these contracts, the company had entered into a contract with any competent party to do the repairs, and so had procured them to be done, we cannot think that this would have been a departure from the terms of the contract to keep the waggons in repair. While fully acquiescing in the general principle just referred to, we must take care not to push it beyond reasonable limits. And we cannot but think that, in applying the principle, the Court of Queen's Bench in Robson v. Drummond^[1] went to the utmost length to which it can be carried, as it is difficult to see how in repairing a carriage when necessary, or painting it once a year, preference would be given to one coachmaker over another. Much work is contracted for, which it is known can only be [154] executed by means of subcontracts; much is contracted for as to which it is indifferent to the party for whom it is to be done, whether it is done by the immediate party to the contract, or by someone on his behalf. In all these cases the maxim Qui facit per alium facit per se applies.

In the view we take of the case, therefore, the repair of the waggons, undertaken and done by the British Company under their contract with the Parkgate Company, is a sufficient performance by the latter of their engagement to repair under their contract with the defendants. Consequently, so long as the Parkgate Company continues to exist, and, through the British Company, continues to fulfil its obligation to keep the waggons in repair, the defendants cannot, in our opinion, be heard to say that the former company is not entitled to the performance of the contract by them, on the ground that the company have incapacitated themselves from performing their obligations under it, or that, by transferring the performance thereof to others, they have absolved the defendants from further performance on their part.

That a debt accruing due under a contract can, since the passing of the Judicature Acts, be assigned at law as well as equity, cannot since the decision in Brice v. Bannister^[1] be disputed.

We are therefore of opinion that our judgment must be for the plaintiffs for the amount claimed.

Solicitors for plaintiffs: Bell, Brodrick, & Co.

Solicitor for defendants: Mark Shephard.

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[1] 2 B. & Ad. 303.

[2] 12 Q. B. 310.

[3] 2 H. & N. 564.

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[1] 3 Q. B. D. 569.