that the plaintiffs had a claim or cause of action against them in respect of the said goods, but did not inform the plaintiffs thereof before the execution of the said indenture, and the plaintiffs executed the said indenture intending that the execution thereof should, and believing that it did and would, and that it was intended by the defendants to relate only to the sum of money in which the defendants then were indebted to the plaintiffs, and intending thereby only to release the said debt, and not intending to release any other claim or cause of action whatsoever: that if the plaintiffs had known, at the time of the execution of the said indenture, of the existence of the claim in respect of which this action is brought, they would not, nor would either of them, have executed the said indenture.

Demurrer, and joinder therein.

Rejoinder. The defendants, admitting for the purposes of the rejoinder that they were guilty of the grievances in the declaration complained of, say that they arose in the manner and under the circumstances following, that is to say, that before the making of the said deed and the suspension of payment by the defendants hereinafter mentioned, the plaintiffs and defendants were severally and respectively carrying on business in the city of London, the plaintiffs as merchants, and the defendants as East India and colonial brokers; and the plaintiffs from time to time employed the defendants, as their agents and brokers, to purchase goods for them, and the defendants did from time. to time purchase goods for the plaintiffs, including the goods in the declaration mentioned; and the plaintiffs also, from time to time, employed the defendants to obtain for the plaintiffs advances of money, from certain bankers and others, by the discounting of bills of exchange, drawn by the plaintiffs upon and accepted by the defendants; and

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EDWARDS.

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v.

EDWARDS.

also from time to time to repay such advances for the plaintiffs that in the course of the said transactions the plaintiffs and defendants had divers cross claims against each other, forming and constituting large matters of account between them, consisting on one side and the other respectively of monies received by the defendants for the plaintiffs' use, and of monies paid by the defendants for the plaintiffs, and also of liabilities which the defendants had come under for the plaintiffs in obtaining advances for the plaintiffs as aforesaid, and also of monies paid by the plaintiffs to the defendants, and also of goods of the plaintiffs purchased for them by the defendants, and remaining in the defendants' hands to be accounted for to the plaintiffs: that the defendants had authority from the plaintiffs to deposit from time to time, upon obtaining such advances for them as aforesaid, as collateral security for the repayment of the same, and to continue deposited as such security, upon the renewal of any such advances upon renewable bills, warrants and other documents representing goods of the plaintiffs purchased for the plaintiffs by the defendants as aforesaid, and from time to time remaining in the hands of the defendants, to such an amount in value as, but no further or greater amount than, would be sufficient to cover the amount for which at the time of making such deposit or continuing the same upon such renewal the defendants were under liabilities for the plaintiffs as aforesaid without having other funds of the plaintiffs in hand, or being indebted to the plaintiffs in a sufficient amount to cover the same, and to deposit the same as security for the repayment only of advances to the last mentioned amount: that whilst certain indigo warrants of the plaintiffs, which had been purchased for them by the defendants as aforesaid, and which had been deposited by the defendants with certain parties as collateral security for the repayment of certain advances obtained for the

HILARY TERM, 24 VICT.

plaintiffs as aforesaid, remained in the hands of the said parties, and whilst the said advances still remained unpaid, the defendants became unable to meet their liabilities, and suspended payment, and the said last mentioned advances not being duly repaid, the said parties who had made the same realized the said warrants and sold the said goods of the plaintiffs represented thereby that at the time of the making of the said deed the true state of the said accounts between the plaintiffs and the defendants had not been finally taken or ascertained, and the extent and amount of the plaintiffs' and defendants' liabilities respectively to one another, at the time of the deposit of the said warrants so sold as aforesaid, was not known to the plaintiffs or the defendants, and whether the defendants had exceeded their authority in depositing or continuing so deposited as security as aforesaid the said warrants so realized as aforesaid, or any part thereof, was wholly unknown to the defendants and the plaintiffs: that the conversion and grievance in the declaration complained of is the deposit and continuing deposited as such security as aforesaid the said warrants, and their subsequent realization, and the sale of the plaintiffs' said goods: that the said deed and release was made and given by the plaintiffs for, amongst others, the divers considerations following to the plaintiffs, which have been duly executed and performed, namely, in consideration of the defendants giving up their property for the benefit of their creditors, and of the defendants devoting their services for the realization of the assets and also of a dividend to be paid, and also the execution of the same by other creditors of the defendants, the consideration for which other creditors executing the same was also, amongst other things, the execution of the same by the plaintiffs: that the said other creditors, at the time of the entering into the said arrangement by the said deed supposed that the

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EXCHEQUER REPORTS.

said release was intended by the plaintiffs, as in fact it was intended by the defendants, to include all claims and rights, if any, that the plaintiffs might be found, upon the taking and ascertaining of the accounts between them, to have had against the defendants at the date of the said suspension of payment in respect of the said transactions and advances, and the forfeiture of any such warrants and securities by such default in payment of the same.

Demurrer, and joinder therein.

J. Dickinson, for the plaintiffs.-First, the replication is good. The question is, whether the defendant is in equity entitled to say that the release extends to claims not in the contemplation of the parties at the time it was executed. The indenture is an ordinary deed for winding up the affairs of a trading copartnership under the direction of inspectors, and if it had contained a schedule, with the amount of the respective debts set opposite the names of the creditors, there could have been no question as to its limit. A Court of equity would not be bound by the general language of the deed, but would admit collateral evidence that the release was not intended to apply to the cause of action mentioned in the declaration. In Cholmondeley v. Clinton (a) Sir W. Grant, M. R., refers to an unreported case of Farewell v. Coker (b), decided by Lord King, C., and afterwards affirmed by the House of Lords. There a tenant for life, with remainder to his son in tail, with remainder to himself in fee, devised all his estate to his daughters. The surviving daughter executed a general release to her brother, the tenant in tail, in words sufficient to pass the reversion in fee. She afterwards filed a bill for the purpose of setting aside the release, on the ground that she only meant by it to discharge her brother's estate of a portion to which she was (a) 2 Meriv. 171. (b) 2 Meriv. 353.

On the other

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entitled under some antecedent settlement.
hand it was alleged that the release was given for the purpose
of conveying her reversion, in order to save her brother the
necessity of suffering a common recovery. Lord King, C.,
at first decreed in favour of the daughter, but on a rehearing
directed issues to try, first, whether, at the time of the
execution of the release, she knew, or was apprised of her
title under the will to the reversion. Secondly, whether she
intended by the release to pass that reversion. In Cole v.
Gibson (a) Lord Hardwicke, C., said, "It was common in
equity to restrain a general release to what was under con-
sideration at the time of giving it." Thirdly, the rejoinder
is bad. The question whether the defendants have con-
verted the dock warrants depends on whether, upon a balance
of accounts, it appears that the defendants have exceeded
their authority in depositing the warrants as a security.
But the rejoinder does not allege that any account was stated
at the time the release was executed, and therefore the cause
of action in the declaration could not be included in it. The
facts stated in the replication are not varied by the rejoinder.
The replication shews a release of those claims only which
were known to the plaintiffs; the rejoinder seeks to include
in the release a claim of which the plaintiffs had no know-
ledge at the time they executed it.

Montague Smith (Watkin Williams with him), for the defendants. There is nothing to shew that it was not the intention of the parties to include this cause of action in the release; and it would be a fraud on the other creditors to exclude it. The recital shews that the object of the deed was to release the defendants, not only from all debts, but from all claims which the plaintiffs had against him, and the other creditors have been induced to execute it upon the faith (a) 1 Ves. Sen. 503, 506.

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EDWARDS.