Staples v iitner

Staples v iitner - [1939] HCA 38 - HCA 1939 case summary — Zoe

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v. Earl of Winchelsea (1); White and Tudor's Leading Cases in Equity, 9th ed. (1928), vol. 2, pp. 488, 490, 492, 493). If the events referred to above did not give the appellant such a vested right to payment of contribution, the appropriate inferences to be drawn from the events of 23rd February 1937 are : (a) that the bank accepted the sum of £4,638 16s. 10d. from the respondent company on the basis that it held the appellant responsible for the payment of the balance, namely, £2,936 16s. 3d., and (b) that the bank discharged the securities given by the respondent company and by the respon- dent partnership but did not give a formal release. The liability of the respondent company under its guarantee to the extent of £10,000 was not reduced or varied. The only inference that can be drawn from these events is that the bank discharged the respondent company but intended to retain its rights against the appellant for the balance. The bank must therefore be deemed to have discharged the respondent company on the basis that it reserved its rights to recover that sum from the appellant (Ex parte Gifford (2); Watters v. Smith (3); Ex parte Good; In re Armitage (4); In re E.W.A. | (5); White and Tudor's Leading Cases in Equity, 9th ed. (1928), vol. 2, p. 547). The position, therefore, is that after 23rd February 1937 the bank was still entitled to recover from the appellant the whole of the sum of £2,936 16s. 3d., and the appellant was still | entitled to contribution against the respondent company. He could have enforced this contribution by paying the sum mentioned and suing the respondent company for its share thereof; or by suing guia timet, and asking for an order quia timet that the respective liabilities of the appellant and the respondent company to pay the balance of the debt be ascertained, and that the respondent company should be ordered to pay the bank its share thereof, or that, upon the appellant paying the bank the whole of the balance, the respon dent company should be ordered to recoup to the appellant its share thereof (Ex parte Snowdon (6) ; Wolmershausen v. Gullick (7); Inre Anderson-Berry ; Harris v. Griffith (8) ; McIntosh v. Dalwood [No.3 (9); Tate v. Orewdson (10); Rowlatt on Principal and Surety, 2nd ed. (1926), pp. 239, 240). A surety is entitled to sue guia timet in equity as soon as the contingent debt has become an actual debt. The right of a person to bring a quia-timet action is discussed in Ascherson v. Tredegar Dry Dock and Wharf Co. Lid. (11). A surety's

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such varied or substituted agreement the respondent company was not a co-surety with the appellant and, therefore, could never be under any liability for contribution; or, alternatively, its liability to contribution, if any, was to pay five eighth parts only of the guaranteed amount (Reuss v. Picksley (1); Agar v. Biden (2); American Surety Co. of New York v. Wrightson (3) ). The respondent company having been discharged by the bank from its liability, the appellant's right of contribution has been finally and absolutely determined, and therefore the decree of the court below should have been without prejudice to the appellant's right to bring further proceedings claiming the same relief. . McKillop. The agreement between the respondent company and the bank based upon the document dated 28th November 1929, was terminated by agreement between the parties based on the offer comprised in the document dated 10th September 1930 and the bank's acceptance of the offer by performance. The propér inference to be drawn from the relevant letters, all dated September 1930, and other circumstances is that the bank as to future advances did agree to the substitution of the second agreement for the first agreement. The arrangement was implemented in several definite and conclusive ways and the document of 9th September was retained by the bank. The acceptance of this position by both parties was acted upon by them and continued throughout (Chapman v. Bluck (4); Watcham v. East Africa Protectorate (5); Howard Smith & Co. Lid. v. Varawa (6); Foley v. Classique Coaches Ltd. (7); May & Butcher Lid. v. The King (8); Clayton v. Le Roy (9); Law Quarterly Review, vol. 48, pp. 4, 310; vol. 49, p. 316; vol. 51, p. 277). By reason of the nature of the first agreement, the facts amount to a termination of that agreement within its terms. That agreement was a continuing guarantee comprising an offer under seal by the respondent company and an acceptance by performance on the part of the bank. Onits true construction it was terminable as to future advances, (a) by the company by proper notice, and (b) by the bank in declining to make further advances (Lloyd's v. Harper (10); In re Crace; Balfour v. Crace (11) ). There must be a proper differentiation between the tule governing an agreement of this nature, as to further advances, and the ordinary rule as to release of a contract under seal or an

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Beale, in reply. The sale of the bonds in August 1932, the placing of them in a suspense account, and the notional crediting of the proceeds to the guaranteed account was either an actual payment or was at any rate a sufficient payment within the meaning of the - cases. If any ratification were needed of the bank's actions in August 1932, then the letter by the appellant to the bank after the suit had been commenced was effective under secs. 14 and 14a (d) of the Moratorium Act 1932-1937 and was acted on by the bank. Tf there were not any payment in August 1932, then the events of February 1937, when the bank settled with the respondent company on the footing of having received £2,936 from' the appellant and treated the account as concluded, was certainly a payment. The total debt on this date was £7.574 and the amount of £4,638 paid by the respondent company could not have been arrived at except by treating the appellant's £2.936 as having been received by the bank. If there was a sufficient payment on either August 1932 or February 1937, then the cases cited in chief show that the appellant acquired a vested right to contribution for the excess paid by him calculated as to the date of payment. The Moratorium Act 1930 does not apply. Bonds are not " chattels " within the meaning of sec. 2 of that Act: Cf. Australian Trust Ltd. v. Ho Chin (5). This being so, the Moratorium Act 1932 does not apply either, because the bonds had been sold before that Act came into force (Callachor v. Moses (6) ). But in any case, neither Act is relevant to the matter, because (a) the Acts were merely for the benefit of mortgagors giving them " days of grace " ; (b) even though the time for payment of the principal is postponed there is nothing to prevent a mortgagor paying: Cf. Moratorium Act 1932-1937, sec. 20, and Re B. A. Davies (Deceased) (7). The test is not whether there is a " presently enforce- able liability", but whether there was a debt and whether it was paid actually or notionally. Here there was a debt and it was paid by the sale of the appellant's bonds and appropriation of the proceeds as shown above. Apart from the question of payment, a surety is

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having to pay more than his share of the common debt. He is

entitled to bring such a suit before he pays immediately the position is such that the defendant surety cannot be twice vexed. The appellant relies on the following facts and circumstances as giving tise to his right to bring his suit quia timet : (a) the principal debt was called up on 15th December 1930 and the account stopped ; _ (b) the debtors were insolvent and unable to pay and never have _ paid; (c) demand was made upon the appellant on 7th July 1931 ; (d) the appellant's bonds were sold in August 1932 and realized the sum of £2,936; and (e) the bank might have appropriated this money, assuming it had not already done so in fact, or it might have brought proceedings against the appellant under the Mora- torium Act. The above-mentioned facts a to d show that as from August 1932 the liabilities of the parties had so crystallized that the respondent company could not be twice vexed. The same arguments pply even more strongly to the position on 23rd February 1937, hen it was obvious that the bank was looking to the proceeds of e sale of the appellant's bonds to satisfy the balance of the debt. The events of 23rd February 1937 did not and could not amount to an absolute release. The irresistible inference from the surrounding tances is that, at most, there was merely a covenant by the _ bank not to sue the respondent company. The surrounding cireum- stances are; (a) there was no formal release, the guarantee of 28th November 1929 merely being endorsed as cancelled, and (6) the amount paid by the respondent company, namely, £4,638, was ved at by treating the proceeds of the appellant's bonds, namely, 936, as still being available to the bank or having been paid to by the appellant, the guaranteed account then being treated as et The judge of first instance should have exercised his ion under sec. 68 of the Equity Act 1901 (N.S.W.). He was t bound by the decision in Eshelby v. Federated European Bank (1). Sec. 68 is intended for such a case as the present one and proper course was to have allowed the amendment to prevent u ity of suit. If there was a variation it must have been @ subject of discussion and agreed upon. The onus was on the it company, yet it did not call any evidence of any such . There was not any evidence given of an oral agreement, and the only written evidence shows disagreement. Therefore the rial judge was right in holding that no agreement had in fact been reached. The document of indemnity dated 9th September 1930 is relied upon by the respondent company as being an offer acted | Meea.by the bank, but this (a) was refuted by the bank's letter in (1) (1982) 1 KB. 254.

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324 HIGH COURT (1939, H.C. or A. reply ; (6) was never stopped or acted upon; (c) was not referred Hits to in later letters from the bank, reference therein being made only McLrax to the guarantee of 28th November 1929; (d) was not cancelled or v. handed back on 23rd February 1937; (e) was tentative only; 'apeemtad (f) was not sent by the bank to its solicitors when giving instructions Finance to sue; and (g) was not referred to in the respondent company's Lea letters of February 1931. The release of the film which belonged to the debtors, and the payment by them of £7,000 to the bank, was made independently of the indemnity dated 9th September 1930 and was a separate matter. The payment was made on 10th September 1930 and the indemnity was not received till the next day. The pencilled notation on the guarantee of 28th November 1929 was put on in error. This is borne out by the bank's letters. The form of the writ was due to the same error and the bank's letters show this also. The instructions to counsel to settle the declaration and the form of the declaration would have amply proved that this was so and the judge should have admitted them into evidence. Apart from the indemnity of 9th September 1930 there is not any evidence to show that any alleged variation to the guarantee of 28th November 1929 had been agreed upon prior to 3rd December 1930 and the onus is upon the respondent company" to show this. The settlement of 23rd February 1937 negatives any suggestion that the liability had been varied as claimed, because (a) it was made in respect of the whole of the debtors' account ; (6) the document which was cancelled was that of 28th November 1929 and not 9th September 1930, and (c) the fact that the respon- dent company paid only £4,638 is entirely neutral because the total liability was only £7,574, and the bank had money of the appellant amounting to £2,936. As to the alternative submissions that there was a variation from £10,000 to £5,000 though still in respect of the common debt, the correspondence shows that although the bank - was willing to do this as an act of grace only the parties contemplated the execution of a formal document and this was never forthcoming. Therefore there was.not any binding agreement: See Sinclair, Scott & Co, Ltd. v. Naughton (1) and Chillingworth v. Esche (2).

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The following written judgments were delivered : - Laraam C.J. This is an appeal from a decree of the Supreme ourt of New South Wales dismissing a suit by the appellant, W. R. ean, which was brought to enforce contribution from the defen- nt company, as his co-surety, in respect of a debt owed by the ther three defendants (who trade under the firm name of George Wall) to the National Bank of Australasia Ltd. The bank was not urty y to the proceedings. The members of the firm were joined in order to dispense with the necessity of proof of insol- of the firm (Lawson v. Wright (1); Hay v. Carter (2) ). The nsolvency of the firm, however, is not disputed. _ The plaintiff in his statement of claim in its original form claimed payment of contribution from the defendant company upon basis that the appellant was liable as surety to the amount of 3,000 and the defendant to the amount of £5,000. The debt of the m for which the sureties ultimately were actually made liable was 172 178, 3d., which included interest and bank charges as well as ipal. When the case went to trial it was discovered by the iff that the defendant had, on 28th November 1929, guaranteed rm to the extent of £10,000, and the claim was amended accord- , contribution being claimed on the basis that the defendant ny should bear ten-thirteenths of the liability, and not only ths, as originally claimed. The learned judge, however, eld that the plaintiff had not, before action brought, actually paid oneys to the creditor. An amendment was allowed to intro- ce a quia-timet claim for a declaration of liability of the defendant ny and an order for payment within a time to be fixed by the 'The learned judge held that payment had been made by the intiff, but only after the proceedings were instituted, and that therefore there was no cause of action at the time of action brought. 'Suit was dismissed without prejudice to fresh proceedings. The intiff appeals, and the defendant, contending that the suit should been dismissed outright, cross-appeals with respect, to the given t6 the plaintiff to institute further proceedings. evidence is almost entirely documentary in character. I e first to state the facts in outline, and then to examine them particularly, so far as necessary, in relation to the relevant les of law. 28th November 1929 the company became surety to the bank the firm for past debts and future advances to the amount of

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338 HIGH COURT (1939. H.C. or A. become surety; and (c) that in any event the limit of its liability wey was £5,000 and not £10,000, so that the proportions of contribution McLeax Would be five-eighths and three-eighths and not ten-thirteenths and v. three-thirteenths. The arrangement or negotiations relied upon to couse produce this result took place in September 1930 between the bank Fiance and a firm of solicitors representing the principal debtor and the wie respondent company. The evidence as to what arrangement or Rich J. agreement was arrived at is restricted to letters passing between the 3 solicitors and the bank dated Ist September, 3rd September, 8th September. 10th September, and 15th September, a form of "indemnity" dated 9th September executed by the respondent company and sent to the bank, a mortgage dated 9th September executed by the firm or principal debtor and sent to the bank, to certain notations made by a bank clerk on the original guarantee, and to the fact that on 10th September the bank received £7,000 as part of the transaction. I do not propose to discuss these docu- ments and matters at length, but merely to state my conclusion, [ feel sure that the bank never agreed to accept the so-called "indemnity" in substitution for its original guarantee. It is obvious from the course of business I have described that to secure itself against liability in connection with His Majesty's Customs the bank required much more than an indemnity against liability under its bond or obligation. The bond or obligation was furnished in case the bank dishonoured cheques drawn by the firm for customs duties. But one of the risks of the bank was that after it had honoured cheques for customs duties the firm might fail to procure and pay in its customers' cheques by which the firm was reimbursed and the account replenished. This seems to me to be the meaning of the bank's last letter, and the earlier correspondence is not incon- sistent with the result. I have felt, however, a good deal of doubt as to whether the bank did not give a binding undertaking to reduce the limitation on the guarantee of the resident company from £10,000 to £5,000. I think the burden of proof on this question of fact lies upon the respondent company. Nicholas J. found against it, evidence was available to prove it which was not called, and on the whole I am not satisfied that such an agreement was made, and at any rate I am not prepared to disturb the finding of Nicholas J The reduction in the amount of the limit upon the guarantee is doubtless an important matter, because it affects the proportion of contribution. But I have not been able to grasp the importance of the alleged substitution of the so-called " indemnity." The name "indemnity" can hardly matter, and the relations between the respondent company and the firm obviously remained those of

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The facts in the present case may now be considered. In July 1931 the account of the principal debtors with the bank stood in debit about £7,800. The bank notified the appellant that the principal debtors had made default in payment of their indebtedness. and that it was proposed to exercise such powers as were conferred upon it by the lien or charge already mentioned. The principal debtors, who are parties to this action, were not in a position to meet and did not meet their indebtedness to the bank: in fact, they were not solvent: See Rowlatt, Principal and Surety, 3rd ed. | (1936), p. 234. Nothing seems to have been done until August 1932, _ when the bank inquired of the appellant whether he had any objec-_ tion to the conversion of the bonds into cash and he replied that he had not. And on Ist August 1932 he confirmed by letter the bank's expressed wish that the bonds be converted into cash by sale, such action in no way to prejudice his case. The bonds were sold on 5th and 6th August 1932, and realized net £2,936 16s. 3d. The bank did not carry this sum to the credit of its principal debtors' account, but on 9th August 1932 opened a manager's suspense account to which it credited the sum of £2,936 16s. 3d., where it remained at credit until 9th November 1938. Interest was not credited to the suspense account in respect of the sum mentioned, nor on the other hand was interest debited, after the opening of the suspense account, - on a sum of £2,936 16s. 3d., to the principal debtors' account. Apparently these interest charges were regarded as offsetting one another and were omitted from the accounts. Subsequently, in November 1938, the appellant confirmed this action of the bank. In February 1937 the principal debtors' account with the bank stood in debit in the sum of £7,575 13s. 1d. On 23rd February 1937 the respondent paid to the bank the sum of £4,638 16s. 10d., which. was credited to the principal debtors' account, leaving it in debit. in the sum of £2,936 16s. 3d., which was precisely the amount at the credit of the manager's suspense account. At the same time the word " cancelled " was written across the respondent's guarantee of November 1929, lines were also run through the signatures of the directors, and a second mortgage by way of assignment of rights in a motion picture given by the principal debtors to the bank in September 1930 was endorsed " discharged." And on 9th Novem- ber 1938 the sum of £2,936 16s. 3d. was carried, so the court was informed, from the manager's suspense account to the principal debtors' account with the bank, thus closing it.

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Francs - discharged by respondent. But the appellant's contribution was Tap. or would be £1,793 14s. 11d. (three-thirteenths of £7,772 18s. 3d.), Starke J. - whereas his bonds and interest provided £3,134 1s. 5d., which exceeds or would exceed his proper share or proportion of the total liability by a sum of £1,340 6s. 6d. On the day of the opening of the suspense account in August 1932 the corresponding amount would have been £1,552 9s. 4d. Consequently it is clear that before suit commenced the appellant had provided more than his just share of the principal debt or was threatened by a bank with action which must result in the appellant providing more than his just share of that debt. Some further contentions were put forward by the respondent in answer to this suit which require consideration. One was that about September 1930 an arrangement was made between the bank and the respondent which closed or put an end to the common obligation of the appellant and the respondent for the principal debt. It was said that the respondent's guarantee of 1929 was cancelled and a new arrangement substituted whereby the respondent under- took to indemnify the bank against claims on the bank by the Customs under a guarantee which in 1930 it had given to the Customs in respect of customs duties payable by its principal debtor, but stipulated that its liability should not exceed £5,000. Apparently the principal debtors' account was in an unsatisfactory state in 1930. On Ist September 1930 the solicitors who acted for the principal debtors and the respondent wrote to the bank that arrange- ments were practically complete to enable the principal debtors to pay off the overdraft with the bank and seeking the bank's confirma- tion of certain proposals. The bank replied that it was prepared to make a settlement on the terms it set out. But it insisted that the arrangement was tentative and subject to "an arrangement with the Sun Insurance Co. to reimburse the bank to the extent of £6,000 should the bank be called upon to make any payments up to £6,000 under the guarantee to the Customs." On 10th September 1930 the solicitors forwarded a number of documents to the bank for the purpose of carrying out the proposals already mentioned. But the covering letter stated : - You will note that in accordance with your instruc tions the security specifically provides for a full indemnity policy to be arranged in favour of the bank. Mr. Wall informs us that arrangements are on foot with Lloyds . . . for the issue of @

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claim against the respondent was founded on the guarantee of 1929, "' which said guarantee," the particulars of claim alleged, " the said plaintiff bank subsequently agreed to limit to the amounts which the said plaintiff bank might be called upon to pay to the Collector of Customs on behalf of the said firm of George Wall and to the extent of £5,000 only and interest." Proposals were made for the settlement of the actions which the bank accepted with some modifications: See correspondence between the solicitors to the parties 18th February 1931, 24th February 1931, 26th February 1931. Apart from the bank being paid two sums each of £1,000 "as an act of grace and without any condition," the modified pro- posals were not carried out. But the bank does not seem to have further pursued its actions. The learned trial judge was not satisfied that the respondent paid the two sums each of £1,000. They were paid by solicitors who acted for the principal debtors as well as for the respondent, and there was no evidence that the respondent put the solicitors in funds to make the payments : in fact, the principal debtors did so. This finding has not been challenged. Further, the learned judge found that the respondent's guarantee of 1929 had not been reduced from £10,000 to £5,000, or limited to the Customs- guarantee account. Apart from the endorsement on the guarantee, the particulars in the writ, and the bank's demand, the documentary evidence adduced does not establish any concluded agreement to cancel or vary the guarantee of 1929 ; and persons who took part in the negotiations for alteration of the guarantee and who might have deposed to the precise terms of any arrangement that was made were not called by either party. The indorsements and the bank's demand do not bind the appellant nor establish against him the cancellation or variation of the respondent's guarantee of 1929. These indorse- ments and the demand may have been due to want of proper instruc- tions to the bank's solicitors or to counsel. Instructions to counsel who drew the indorsement were tendered, objected to and rejected, and a possible explanation of the indorsement thus excluded. In my opinion it was for the respondent to satisfy the trial judge that its guarantee of 1929 was cancelled or varied, and it did not do so. The finding of the learned judge ought not, in the circumstances mentioned, to be disturbed, unsatisfactory as is the evidence upon the matter.

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standing to the credit of the suspense account was credited by the bank to the overdrawn account of the principal debtor, and the i it says that this crediting is a sufficient appropriation to establish the fact of payment by him to the bank as at 9th August 1932. But, in the circumstances, I think that something more : tangible was required to establish payment by the appellant. The _ establishment of a " suspense " account may be fairly regarded as indicating that the bank was acting provisionally rather than

definitively. The occasion did not demand final action on the part of the bank, and the deposit is capable of being explained as _ evidencing a mere change in the form of security. On the whole 1 am not satisfied that the appellant, who bears the onus of this issue, has established the fact of payment on 9th August 1932. However, I am satisfied that on 23rd February 1937 the appellant must be taken as having paid the bank, and that the rights of the ies to this appeal should be adjusted upon that footing. It was as has already been pointed out, that the bank came to a final settlement with the respondent company. On that day, the total indebtedness of the principal debtor exceeded the amount of the j of sale of the appellant's deposited securities (i.e., £2,936)
exactly £4,638 16s, 10d. It was upon payment of this sum (ie, £4,638 16s. 10d.) that the respondent company became discharged from its obligations under the guarantee of 28th November 1929, Point is lent to this part of the appellant's case by the respondent company's contention that this discharge by the bank operated to release the appellant's obligation to the bank to the _ extent of the right of contribution lost by the discharge. In my
opinion, the transaction of 23rd February 1937 did not release the 7 in any respect whatever. The proper inference is that on that day the bank, which was under no obligation to notify the appellant of its decision, finally and definitively appropriated the
proceeds of the sale of the appellant's securities towards the payment 'of the debt of the principal debtor. Such appropriation was within _ the plain authority given by the letter of lien. After and as a conse-
quence of such appropriation of the sum of £2,936 16s. 3d., then 'standing to the credit of the suspense account, the indebtedness of _ the respondent company was fixed at £4,638 16s, 10d., which was the balance of the principal debtors' indebtedness to the bank. In _ mny view, the transaction is inexplicable upon any hypothesis other 'than that of payment by the appellant of £2,936 towards the satis- faction of the indebtedness of the principal debtor. Upon the finding of payment by the appellant on 23rd February 1937, it follows that,

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account with the bank. The letter of lien which the plaintiff executed on 3rd December 1930 made him a surety of that debt, It contains no personal covenant by the plaintiff to pay : no point is made of the absence of such a covenant. The defendant company's guarantee of 28th November 1929 had made it a surety of the same principal debt as that to which the plaintiff's letter of lien related, No question is raised whether the plaintiff could be entitled to a surety's right of contribution when he did not know at the time he executed the letter of lien that the defendant company had executed the guarantee. It is clear that, if the guarantee was in - force when the letter of lien was executed, the defendant company and the plaintiff would have become co-sureties of the same principal debt. The learned trial judge found that the guarantee was then in force. The letter of 1st September 1930 which the defendant com- pany's solicitors sent to the bank shows that it was sought to release the guarantee of 28th November 1929 and to substitute an instrument described as an indemnity which would be limited to the liability of the bank to the Customs Department under a guarantee which the bank had given for the firm's liability to the department. The bank's guarantee was limited to £6,000, and it was proposed that the defendant company's indemnity to the bank should be £5,000. Although there are a number of considerations which can be thrown in the balance against the plaintiff, there are two things which, in my opinion, weigh down the scale in his favour on the question whether the guarantee of 28th November 1929 was released prior to the execution of the letter of lien on 3rd December 1930. First, there is the fact that on 23rd February 1937 or soon after the bank had the defendant company's guarantee of 28th November 1929 marked with the word " cancelled." It did so on receiving from the respondent company its cheque for the sum of £4,638 16s. 10d. This was the balance due by the firm to the bank after it credited the account with the proceeds of the sale of the plaintifi's bonds. This evidence shows that the guarantee of 28th November 1929 was treated as being in force until 23rd February 1937. Secondly, the bank's letter of 15th September 1930 explicitly rejected the proposal that the form of the existing guarantee which covered the general indebtedness of the firm on their trading account should be replaced by a guarantee that was limited to a particular liability. This letter was sent in answer to a letter from the defendant com- pany's solicitors. In the course of that letter they wrote: " We also enclose indemnity by Discount and Finance Ltd. in respect of your guarantee to the Customs, the total limit of Discount and Finance Ltd.'s liability under the indemnity being £5,000. We

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February 1937 the bank accepted from the defendant company faction of its liability as a surety a sum equal to the difference en the amount of the principal debt and the proceeds of the 'of the bonds. It is amply proved that on 9th August 1932 the eds of the sale of the bonds were, with the plaintiff's consent, by the bank in satisfaction of the pecuniary obligation which mdertook as a surety by the letter of lien. In my opinion, the ik had then enforced against the plaintiff payment of a part of | principal debt equal to the proceeds of the sale of the bonds. 1¢ amount paid exceeded the proportion of the debt which as en the plaintiff and the defendant company it was equitable m to bear, it is difficult to see why a right to contribution did on 9th August 1932 against the defendant company because nk for its own purposes and without the plaintiff's consent put proceeds of the sale of the bonds into the suspense account. is contended that, even if the plaintifi's obligation to pay the Y debt was performed at that date, the payment did not nd a right to contribution against the defendant company, e the moratorium legislation of New South Wales applied to v of lien and the plaintiff's obligation as a surety was not ible by the bank on 9th August 1932 because of the operation legislation. But even if the legislation did apply, it would -make the performance of the obligation at the time it fell due performance according to the terms of the letter of lien a voluntary . The legislation extended the time for the performance of he obligation, and, in my opinion, whether it was performed at the pulated time or within such further time allowed by the legislation, vas still a performance by the plaintiff of his obligation as a surety a part of the principal debt and not the voluntary ption of a burden which the defendant company was not bound with him, The moratorium legislation did not compel the if he were entitled to take advantage of it, to perform his nh as a surety to pay the principal debt when called upon o by the bank, at a later date than that upon which it became performance according to the tenor of the letter of lien. ys, in my opinion, that, even if the moratorium legislation to the letter of lien, the plaintiff did not lose his right to ition by declining to take an advantage of the legislation. The total sum which the plaintiff paid to the bank in reduction of debt was £3,134. This sum consisted of £2.936, the of the sale of the bonds, and £197, the amount of interest by the bank from the bonds and credited by it to the prin- debtor's account. If the finding is correct that the plaintiff

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