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therefore, the note when delivered to the respondents was wanting in a material particular, in that it had not then been indorsed by them, it appears to me that they had full authority to complete it by indorsing it, either with or without the addition of the words "without recourse above the indorsement of the appellant. The note having been so completed, the respondents are not driven to rely upon section 56 of the statute, but may rely upon section 55, subsection 2, (a), which provides that "The indorser of a bill, by indorsing it,— (a) engages that on due presentment it shall be accepted "and paid according to its tenor, and that if it be dishonoured he will compensate the holder or a subsequent indorser who "is compelled to pay it, provided that the requisite proceedings on dishonour be duly taken." This distinguishes the case from Steele v. McKinlay(1) and Jenkins & Sons v. Coomber(2). In Steele v. McKinlay(1) the bill had not been completed by the indorsement of the drawer, nor could it be shown that the indorser had written his name upon the back of the bill with intent to guarantee the payment thereof.

6.

In Jenkins & Sons v. Coomber(2) (a decision of Wills and Kennedy, JJ., sitting as a Divisional Court) the bill had never been completed by the indorsement of the drawer above that of the indorser. The ground upon which I hold the respondents entitled to recover did not, therefore, come under consideration in either of these cases. In Byles on Bills of Exchange(3) the learned authors point out this distinction, and observe that if the plaintiffs in Jenkins & Sons v. Coomber(2) had, like the respondents in the present case, indorsed the bill in blank they might have posed as holders within section 55, subsection (2), (a), and so have raised the point which I now decide in the respondents' favour. In South Wales and Cannock Chase Coal Company v. Underwood & Son(4) the bill had never been completed by the signature of the drawer. This case is therefore not in point.

In my opinion, therefore, the judgment of the District Judge was right, and the respondents, plaintiffs in the Court

(1) 5 App. Cas. 754.
(2) [1898] 2 Q.B. 168.

(3) 16th ed. 182-83, note (z).

(4) 15 T. L.R. 157.

S.C.

1901. ERIKSSEN

v.

BUNTING.

S.C.

1901.

ERIKSSEN

v.

BUNTING.

S.C.

IN BANCO. WELLINGTON.

1901.

August 27:
Sept. 7.

EDWARDS, J.

below, are entitled to recover against the appellant. In arriving at this conclusion I am necessarily influenced not only by authority and by reason, but also by the consideration that to hold the respondents disentitled to recover would be to interfere unnecessarily and with disastrous consequences with the practice of mercantile men in such matters. Dealings with promissory notes in the manner adopted by the parties in the present case are of daily occurrence. To support the appellant's objection, which is one purely of form, and is devoid of merit, would be to introduce difficulties into the transaction of commercial business, and, in cases in which the formality of an indorsement by the payee of a note prior to the indorsement of the guarantor was omitted, to supply to persons desirous of evading their just responsibilities a mode of doing so. The judgment of the Court below is affirmed, and the appeal is dismissed, with costs ten guineas, and all necessary disburseAppeal dismissed.

ments.

Solicitors for the appellant: Hankins & Loughnan (Palmerston North).

Solicitor for the respondents: J. P. Innes (Palmerston North).

THE MAYOR, COUNCILLORS, AND BURGESSES OF
THE BOROUGH OF PALMERSTON NORTH v. FITT
AND ANOTHER.

Public Work-Negligent or Improper Design-Damage-Action for Damages
-Compensation-Drainage-Plan-Preparation by Engineer-Alteration
by Borough Council-"The Public Works Act, 1894."

Although a public body may have proceeded negligently or improperly in the design or in the mode of constructing a public work, and have thereby caused damage to the property of others, it is not liable to an action for damages for so doing where it has acted in the exercise of statutory powers which it has not exceeded. The only remedy is a claim for compensation under the Public Works Act. The President, &c., of Colac v. Summerfield(1), The Corporation of Raleigh v. Williams(2), The Inhabitants of Le Bon's Bay Road District v. Oldridge(3), and The Chairman, &c., of the County of Grey v. Frankpitt (4) followed. Clothier v. Webster(5) and

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S.C.

1901.

similar cases distinguished, on the ground that there the damage was caused by negligence in the actual operation of constructing the public work, and not by negligence or defect in its design or mode of con- MAYOR, &c., struction.

There is nothing in the judgment in The Corporation of Raleigh v. Williams(1) which amounts to laying down as a proposition of law that a municipality the governing body of which altered a plan prepared by its engineer would thereby necessarily be exceeding its powers; and, where a Borough Council altered the plan of certain drainage-works by reducing the size of a certain culvert, which afterwards proved insufficient, and it did not appear what led to the alteration, but there was nothing either in the findings of the jury or in the evidence to justify the conclusion that the Council in making the alteration was not acting in the bonâ fide desire to exercise its statutory powers for the public benefit,-

Held, That it could not, merely by reason of the alteration of the plan, be held to have exceeded its powers.

(1) [1893] A.C. 540.

APPEAL from a decision of Mr. District Judge Kettle,

Palmerston North, in an action in which the respondents claimed damages from the appellants for damage done to lands of the respondents by the alleged negligent construction of certain drainage-works by the appellants.

The facts of the case will be found fully stated in the judgment of Edwards, J. The arguments upon a number of preliminary and other points as to which no decision was given are not reported.

Dalziell, for the appellants:

The appellants, having acted in good faith in exercise of their statutory powers, are not liable to an action for damages, the only remedy being a claim for compensation: The Chairman, &c., of the County of Grey v. Frankpitt(1); The Corporation of Raleigh v. Williams(2).

H. D. Bell and A. R. Atkinson, for the respondents:

The Chairman of the County of Grey v. Frankpitt(1) does not mean that there can be no action for negligence against a public body constructing a public work. If a defect in the scheme of the work causes an active interference with another's property, an action for damages will lie: Beven on Negli(1) 18 N.Z. L.R. 111. (2) [1893] A.C. 540.

OF PALMERSTON NORTH

V.

FITT.

S.C.

1901.

OF

NORTH

v.

FITT.

gence(1). In Sargood v. The Corporation of Dunedin (2) there is a dictum that there is a right of action where an authorised MAYOR, &C., work is being carried out negligently. In Carslake v. PresiPALMERSTON dent, &c., of the Shire of Caulfield(3) it was held that in a drainage case there can be an action, although there is no negligence, if water is unnecessarily thrown on to land. The language in The Inhabitants of Featherston Road District v. Tate (4) is that a local body is liable for negligence in the execution of an authorised work. The damage having been caused by the appellants taking upon themselves to depart from the scheme of their own Engineer, they are liable to an action: The Corporation of Raleigh v. Williams(5).

Dalziell, in reply:

The Inhabitants of Le Bon's Bay Road District v. Oldridge(6). If the appellants honestly thought that what they were doing was the best that could be done with the funds they could devote, there was no negligence.

EDWARDS, J.:

Cur, adv. vult.

This is an appeal from the judgment of Mr. District Judge Kettle in an action in which the respondents were plaintiffs and the appellants were defendants.

The statement of claim alleged that the appellants are a body corporate charged by law with the proper maintenance and management of drains within the Borough of Palmerston North; that the appellants constructed and afterwards maintained certain drains or watercourses, and culverts, along and upon the roads known as Ferguson Street, Church Street, Foxton Line, and Botanical Road, within the borough, and thereby diverted the waters of divers creeks, drains, and watercourses, and the natural flow of surface and other waters, which but for such drains would not reach or flow upon the respondents' lands; that the appellants neglected to provide a proper outlet for the waters carried down by such drains, and wrong

(1) 2nd ed. 376.

(2) 6 N.Z. L.R. 489.

(3) 17 V. L.R. 560.

(4) 17 N.Z. L.R. 349, at p. 356.
(5) [1893] A.C. 540, at p. 550.
(6) 17 N.Z. L.R. 321.

S.C.

1901.

MAYOR, &C.,

NORTH

V.

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FITT.

fully suffered such drains to bring and distribute the waters passing through them upon and over the lands of the respondents; that the drains along the Botanical Road and Foxton OF Line are of insufficient capacity to carry away the waters PALMERSTON brought into them by the other drains, and that the appellants negligently failed to provide drains and culverts of proper and sufficient capacity to carry away from the lands of the respondents the water brought thereon by the other drains referred to; and that the lands of the respondents were flooded, with consequent damage to the respondents, by the waters brought down by the drains referred to. The claim is for £150 damages. There is no allegation in the statement of claim that the appellants in the construction of the works referred to exceeded their statutory powers. The statement of defence put the respondents upon proof of the allegations contained in the statement of claim, and alleged that the appellants had not been negligent, and that they had done all things that they were required by law to do respecting the drains and matters mentioned in the statement of claim.

The action was tried before the District Judge and a jury. A large number of issues were submitted to the jury. The result of the findings of the jury, so far as it is necessary to deal with them upon this appeal, is that certain drains and culverts constructed by the appellants were not sufficient in size and construction to carry off flood-water brought into and through them; that, having regard to the size and construction of the culvert at a point at the junction of Church Street and Botanical Road referred to as "point A," it was not prudent or proper to bring the flood-water from a lagoon, at a point referred to as "point E," along Church Street to the culvert at point A, or to enlarge the Ferguson Street and Botanical Road water-channels, which brought the water to the culvert at point A, without at the same time enlarging that culvert so as to enable it to carry off efficiently and properly the additional flood-water brought into it; and that the respondents had sustained some damage in consequence. The ground of the respondents' action, as it now stands upon the findings of the jury, is that the culvert at point A, and

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