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UA 1 2 3 I 1 2 3 4 5 6 REPORT . ^'^ TRIAL OF THE CASE OF THE QUEBEC BANK, A. J. MAXHAM, etal. IN THE SUPERIOR COURT, QUEBEC. Before Mr. J"nstice Stuart and a Special Jury, June 9th a- i llth, 1860. The Qdebbo Bane v. Maxham, et al. Saturday, 9th June, 1860. The trial of this case was commenced to-day, the Special Jury being compoae/J of Thomas Bickell, Duncan Maophersaa, William Laird, John Qilmour, Robert Hamilton, Charles Sharpies, William Crawford, Samuel Reid, Thomas Norris, Edward Taylor, Matthew Mocdie, Henry Tilstone. Mr. Okill Stuart Q. C. appeared as Counsel for the plaintiffs ; and Messrs. F. A. Andrews and Jones for the defendants. This was an action against the defendants Andrew John Mnxham and John Sherring Budden, co-partners trading under the name of A. J. Maxham & Co., as ihe makers, and against the defendant Pierre Ohartrd, as the endorser of a promissory note for $2000, dated 6th of August, 1869, payable two months after date to the order of the said Chartr6. The defendant Ohartr^ severed in his defence; the defendants Maxham and Budden pleaded : — " That the said plaintifTs caanot maintain their action Against them the said defendaote as to the som of $1500, partof the sum by re Ch«rtr6, the other defendant, as mentioned in the said dec?ar*tlari, the sum ()f money in the said note specitti'd. and if the said Pierre Chartr6 did endorse and deliver the paid note to tl^em the said plaintiflTs, as is alleged in their said de clftration, yet tbo said noto was, while in the hat.ds and possession of the said plaintiffs, paid and satisfied to them to the extent of the said sum of $1500, and as to the balance of the amount thereof the same was, before the institntlfltn of the present action, to wit : on'the 10th day ol October last iiaHt- at thn rtty of Q>*Bb»c-. offered and tendered to them the said plaiatiffs by the said de- fendants, and for the said sum so offeired the said' de- fendants Andrew John Maxham and John Sherrinir Bvddea with these presents have fylod in due form of \ law their confession of judgment in favor pf the said plainttfifs, with interest and costs to the present day incurred. And the said defendants Andrew John iMax- hara and John Sherring Budden further represent that the said note was so made and endorsed and delivered fo the said plaintiffs under fhe representtitions, con- siderations, proinises, nndeftakinga and agreements following, and without which the said noto would never have been made or endorsed by them the said defend- ants, or been delivered to them the said plalntilfs namely : The said Pierre Chartr6, at the said city of Quebec, heretofore, to wit : on the 13th day of Septem- ber 1858 becama party to a certain contract or agree- ment, a notarial copy whereof is herewilh fyled, that relcroncemaybo theret* had if required, made and entered into by and between him and one Thoi^ as WH- liana Goldie. Esquire, Assistant Commissary General to Her Majesty's Ij'orces. acting in that capacity on behalf of Her Majesty, executed before Austin *i.d another, Notaries, and bearing date at Quebec thos« id last mentioned day, and he the said Pierre Chartrfi di'l, for the consideration therein stated, undertake and oblige himself towards tho said Thomas William Goldie and his successors in office to furnish such quantity of fresh ox beef as might be required for the use of Her Majesty's troops in garrison at Quebec, for the period of one year from the first day of October then next following And the said Pierre Chartr6 being unable to carry out and fulfil the said contract without obtaining certain loans of money, aftevwards to wit : on the day and year last aforesaid, at Quebec aforesaid, made application to tho said defendants and requested them to lend their names to certain endorsed aotps whereon to obtain discounts, and thus to become his sureties for the repayment of the discounts and loans to be obtained on such endorsed notes from some one of the incorporated Banks of the said city. That the said defendants then and there, in consideration that the said Pierre Chartr6 wou'd assign over to tho said Bank so making such advances upon tho security of their the said defendants' notes, in order that the said notes might to the extent of the monies so assigned be tlins paid at maturity, by the receipt by the said Bank of the said monies, consented to b^jcorae such sureties it the said loans could bo thun thereafter ob- tained ; iu consequence of which said agreement enter- ed inlo bstween Ihs sutid Pif^rrr. C^hsirlt^ :mH th^ :=£{.'! dofe&dants, they the said defendants then and there mado verbal proposals to the said plaintiffs in this cause, then being one of the incorporated Banks cf the saidolty ofQnebecwitlia view tocarryout the said 2 nud B(i b'csaed of tho Quebec said defendants quested by the agrecniont, and wore thcrcup jn directed by tbo said plaintiffs, through the ministry of their agent, namely, Charles G^etbinge the Cashier of tlie said Banic, to malie such application id writing stating what amounts it was required the said Bank, on the anrctyship of the ■aid defendants, sLould adv£;nce the said Pierre Ohartr6 and upon what terms and conditions the samesfaonld be advanced to htm. That the said defendants thereupon, on such request of tho said pialhtiffs afterwards, to wit : on or about the 8th day of the said month of October 1858 reduced the said verbal proposal to an application in writing in and by a letter mis- sive then and there given to the said plaintiffs to the rrefiident and Directors Bank, whereby in substance tho stated that they had been re-' tsaid Pierre Chartr6 to ask if they tbo said i^laintiffs would take up tho said Pierre Chartrfe's account for the aaid Government contract for the supply of beef and advance him the necessary funds ou discounting the said defendants' notes in his favor, ho the said Pinrre Cbartr6 to transfer to them the said plaintiffs the monies tobe received fr«m the saldGovcrn- mont. in such wise that they the said plaintiffs should alone receive the entire amount thereof. That tho said plaintiffs accepted the said proposal so made and reduced to writing by the said defendants and gave to them verbal notice of 8iich acceptance, and thereupon afterwards, at Quebec aforesaid, to wit : ou the 16th day of the said month of October, ai the request of tlie said defendants, the said Pierre Chartr6, by dcod of fansfer, bearing daf that day and passed before Aus- llu and Colieaguo Notaries Public, an authentic copy whereof is herewith fylcd that reference may be there- to had, if required, did assign and make aver to the said plaintiffs alibis right to payment under the said con- tract with the said Thomas William Goldie and did give the said plaintiffs full power to receive the said monies to become due and payable under tbo same, which said assignment was, aft'Jrwards, to wit : on the 18th day of tho said month of October duly notified to the said Thomas William Goldie, as appears by a notarial copy of such signification herewith fyled. That, in consider- tlon of the said premises and to carry out and prrform the covenjints by them entered into with the said Pierre Chartrfi and with them the said plaintiffs, they the said defendants from time to time made and signed and delivered divers promissory notes, whereof the said note declared npou by the said plaintiffs in their said declaration is one. in favor of the said Pierre Charti 6, and caused the said notes to be deposited with the said plaintiffs as securities for any sums of money they should advance thereon to the said Pierre Chartrf beyond the amounts they should receive from the said Thomas William Goldio, or his successor in office, un- der the assignment hereinbefore mentioned, and there- upon they the said plaintiffs made certain advances to him the said Pierre ChBrti6 upon the said notes so given them to bo discounted, and, in payment thereof, or of so much thereof as the said sums of money by them received under and by virtue of the said assign- ment amounted to, at the maturity of the said notes received from the said Thomas William Goldie and his successor In office the said Rums so assigned, and the difference, when the amount so received under the said assignment was less than that of the matured notes, was paid at the maturity of the said notes to the said plaintiffs by them tho said defendants as such sureties of the said Pierre Chartr6, according to the true meaning of their said undertakings and promises entered into as such sureties. That, at the time of the maturity of the said note by the plaintiffs declared upon In this cause they the said plaintiffs had received and been paid under the said assignment, on account of the said note and had then in the .said Bank the sum of <1500 to them specially paid for the purpose of retiring the samg, being part and parcel of the said monies to them paid by the said Thomas William Goldie and his successor in office under the said contract with the said Pierre Chartr6 and the assign u; cut thereof : By means whereof, at and before the institution of the present action, tho demand of tho said plaintiffs, to the extent of the said sum of $1500 had been paid and satisfied to thsm the said plaintiffs, and as to the balance, namely the sum of $4ti0.4t, due upon the said note, the same was, by the said defendants, at Quebec aforesaid, after- wards to wit : ou the 10th day of October last past, by tbo ministry of -JflCfjaos AuECT and auothsr. PshHc Ns- taries, duly tendered to tlia said plaintififs, but which said balance they the said plaintiffs then and there re' fused to accept or receive and still continue so to do, though the said defendants have always been and now are ready aiid willing to pay the same to the tald plain- tiffs, and they now herewith fyloas aforesaid a confoa- sion of judgment therefor with interest and costs. Wherefore they pray that the actl' n of them the said plaintiffs in this behalf be, as to the said sum of CISOO, part and parcel of tho said demand, dismissed, nrayiog aote of their declar.ition which they hereby make <» their consent that judgment be entered np against them the said Andrew John Maxham and John Eherring- Budden Jointly and severally, for the said sum of $4()0.41, with interest and costs tLereon incurred to the present dty, and farther praying that the plaintiffs b« condemned to pay the defendants all costs to be here- after incurred iu the event of the said plaintiff's non acceptance of the said confession." Mr. Okill Stcabt rose to open the case to the jury, when Mr. Andrbws aaid he believed it was the de- fendants who should begin, as the burthen of proof lay entirely upon them. His Honoh ruled uccordingly. The plain- tiffs had no 07iu)( upon them and would be en- titled to a judgment unless the defendants made out their pleti of payment. The affirma> tive of the issue being upon the defendants they bad the right to begin. Mr Andrews, in his opening address, said the present action was instituted by the Quo- bee Bank against the defendants Maxham & Oo., a firm well known in the Lower Town, and Chartr^, who had made default, to recover $2000, the amount of a promissory nbte. The defendants Maxham and Budden pleaded that, of this amount, $1500 had been paid, and the facts on which they relied in suppport of this plea were these : In the year 1858, Ohartr^, who had undertaken to supply beef to the gar- risen at Quebec, finding that he wanted funds, — £1700 monthly,— to carry out his contract, applied to Maxham it Co. to obtain an advanco of monies for him by the discounting of their notes in one of the Banks of this city. Max- ham k Go. agreed to this proposal, bu squir- ed Gbartre to secure them by assigning over the money to become due to him by the Oom- missariat, to meet at maturity the notes upon which the advances would be obtained, They undertook to become liable for the difference between the amounts received from the Com- missariat and those advanced by the Bank up- on the security of their notes. The plaintiffs received about .^6000 sterling from the Commis- sariat under the contract and easignment. All the notes given, signed by Maxham & Oo. and deposited with the plaintiffs as security for the advances to Chartr^, became due a few days after the adiounts were payable by the Com- missariat, The lidkbility which Maxham k Oo. assumed was to pay the Bank whatever sum might be advanced to Cbartr^ over and above what was received from the Commissariat. They asked the Bank to advance to Ohartr< upon the credit of their notss, distinctly men- tioning in the letter that the Bank alcne was to receive the money from the Commissariat. The Bank having agreed to their request, an assignment of the monies took place, and they were regularly received by the Bank about the third, fouith, or fifth of every month, beginning in December 1858 anfl ending in October 1869. The defendants have stated in their artionla- tion of facts they will prove that, by means of the monies which the BRok had in its hands, and had received from the Commissariat, the note declared upon, dated the 5tb of August I t s tbe Ust and payable on tbe 8th of October, was paid. Thu facts stated in tbeir plea were all de- nied by tbe Bank, and tbe inqniry to he made by the jury was, whether It was true that an Agreement was entered into snch as the de- fendants alleged, — that an assignment of tbe monies da" by the Oommisaariat took place,— that under that assignment the plaintiffs re- ceived back the sams advanced to Ghartrd,— and that they had in their possession, at the period of the maturity of tbe note sued upon, $1600 piTt of the monies received from the Gommis- varlat. If the defendants proved what they alleged they would nndoubtedly be entitled to a verdict, so that tlie sole question to be de- termined was whethet- their plea was well fbanded The defendants having submitted Interroga- tories upon fails et articles to the plaintiffs, Charles Gethings Esq , the Cashier of the Bank, dnly authorised by power of attorney, appear- ed and answered as follows : — Q. 1st. Is it Dot true that, oa or about the 8th of October 1858 the defendants (A J. Maxtiam and J. S. Bndden,) addressed to the President and Directors of the Quebec Banlc a letter of nhich the following is a copy: " Quebec, Sth October, 1858, " Qentlemen,— We have been requested by Mr PlerraChartrg toask if thcBank would take np his aecoant for the Government contract in the supply of beef and advance him the funds on discounting the papjr of A. J. Maxham & Co.. he ChartrS, transferring tbe proceeds of each month's delivery to the Bank, or in other words, the Bank onlvto receive the money. The amount required w mid not exceed £2000 running, but for the Fall, in order to secure the supplies for the winter, be would require £4000, that is, between this and the Ist of December next. The payments in all instances have been regularly met, and heat present has paid up ©very note due that was advanced for said contract for the past year, which expired on tbe .30ih amounting to £15,000. Waiting your reply tbisdarin the Bank, as to whether you will take the whole amount or pnrt and grant a discount to-day of £500. We remain. Your obedient servants, A. J. Maxhah Ic Co. To the President and Directors of the Quet>ec Bank. A. It is true that tbe defendants A. J. Maxham & Co, did. Q. 2nd. Is itnot true that, after the receipt of the said letter the same was taken into consideration by the Directors of the said Quebec Bank at one of tbeir weekly meetings, whereat a quorum of the said Direc- tors were present, and is not true that at the said meet- ing, it was resolved to ac3ept of the proposition con- tained in the said letter. If nay, you are required to ■tate what proceedings were adopted by the said Bank touching the proposition contained in the said letter, and what resolution was come to in relation thereto. Produce and fyle with your answer to this interrogat- ory a transcript or copy of the minutes of tbe proceed- ings of tbe meeting at which the saia proposition was accepted by the Bank. A. Thib letter was taken into consideration on the 8tli of October 1658 by a quorum of tbe Directors of the Quebec B£.nk. vrben the following memorandum sub- scribed to and written at the bottom of tbe said letter was adopted and approved of: " The foregoing pro- posal acceded to and the order on the Commissariat to be deposited at once with the cashier by a notarial transfer, and the policy of insurance on the beef when •lored in the winter " This is all that was done by tbe Board of Directors, at their meeting and is all that they did on the subject of the said letter. Q. 3rd. Is it not true that, after the proposition so Pierre Chartri, Charles GethTngs, Esquire^ the Cashier of tbe said Bank, was deputed by the said Bank to act ia its behalf, to accept and receive from Her Majesty's O vernment all <>nd every the sum and sums of money Which mi^t bo due and owing to the said Pierre Chartr6, for and in rccpoct of bis contract with the said Ocvernment for the supply >f beef, which is tbe trans- 1 fer mentioned in the said feueror proposition, submit- ted to the said Bank on the part of tbe said Pierre Chartr6 hereinbefore 'oferred to } A. There isno rpsolntion of the Board of Directors I deputing Mr Charles Oothinga to accept and recoivo from Her Majesty's Government all or any of the sum i and sums of money which might be due and owing to the said Pierre Chartr6 for and in resfuect of his con- tract with the Government for the snpply of beef. There was no deputed authority given by the Board to Mr. Gethings. The only thing done by the Bank was tbe adopting of the memorandum above mentioned. I No transfer was ever submitted tothe Board of Direc- 1 dors at any time, but the Cashier of the Bank iMr. I Gethings, was the person to take »he requisite pro-] ^eedlngK to give effect to the memorandum abovo men/ tioned. Q. 4. Is It not true that at ter the said proposition so 1 made on behalf of the said Pierre Chartrd and the acceptance thereof by the said Jank to wit- on the 16th day of October 1858, Charles Gethings. Esquire the said Cashier, for and on behalf of the said Quebec Bank I and the said Pierre Chartr6 dnly signed and executed a certain deed of assignment beaiing date the day and year last aforesaid, Mblch is tbe same deed of ataSan \ ment specially mentioned in tho plea of perpetual per-' emptory exception of the defendants in this causei fyled, and is it not true that the said Cbirles Getbincsl was duly authorised by the said Quebec Bank to thatl effect, and that such assignment was made and ezrcutl ed more fuliv to carry into effect the proposition sol contaiaed in the letter hereinbefore ref. ricd to and for the purpose of giving to said Bank a.I.litionnl nicanR of securing themsolvesagaii St lo 8, as stipulated for iiil the i.tid letter ? I A. The deed referred to in this interrogatory, I>eiii|r| an authentic document, egtablishes that Mr i applicable, ns far as it will go, to. take up. tbe notes that have never baen paid, as stated io the foregoing statempnts At the time of tlie raatiifiiy of the note suud u^on in this cause there wern no fu«ds io tho Quebec Bank, applicable to the paymontof it because the balance due on the notes which ba.ve never been paid to the Bank is, as stated In the above statement. Sh'OOO, as acknowledged in part In a letter \yhich was received from A. J. Maxbam k Co. Ify the BsAk, of. which the following is a copy : " Quebec, 5th October 1859. ' To tho President and Directors of the Quebec Bank. Gentleman,— In consequence of Mr. Pierre Chartr6 having drawn from tbe Bank tbe proceeds oftherooney receivedilrom the Government contract, and appropri- ating th.it money to himself «nd not to the retirement of our noteoaraountiiig to lei.ioo due yes'erday. we beg to state tjhat we are unable for tho present to meet them, and request you will retain such sn or sums as be may have to his credit, received by you from the Commissariat on account of his. endorbatlona on said pai>er reirialnipg in yrur bands. We are. Gentlemen. Your obedient servants, A. J, Maxbam & Co. It is trae that^^A. J. Maxbam t Co. have obtained possession of the notes duo on tho 1st— 4th October ia>9, amonaiting to $1000, by overdrawiiig their account with the plaintiffs, withont tho knowledge or conaont of the Bank, and by mistake, but neither these notes or the note sued upon have ever been pfciC to the Bank, the plaintiffs in this cause. The defendants did not declare whether they availed themselves.of the above anaveers. Oharlss. Gbthiags, Esq., was the first wit- ness called on behftlf of the defeadants. Ex- amined by Mr. Andrews, he said : I am. the Cashier of the Quebec Bank, and I have been 80 for many years, I am not aware that the defendants Mazham ft Co., in the montk of Oc- tober, 1858, applied verbally to the Bank to make advances to Pierre Chartr^. one of tho aefeauttuis, upon the secnrity of their paper but an application in writinjj to that effect was made bj a letter which has been produced m thiscftwe hj the plain tiff?,, and the applica- tion was submitted to the Board of Directors, and was assented to by the Board. (The letter of the 8th of October 1858, was read to the jury) Subsequently to this I became a party to the deed of assignment now shewn to me. [The assignment was here read. After stating the contract wltbthe Commisaariat and Ohar- tr6'8 inability to carry out the same without advaoees from the Bank of such sums '^ as he the said Charles Qethings shall deem necessary and be warranted In making, " it ceotinues in these words : '• And, whereaa, in order to pro- tect, idemnify and bear harmless the said Char- les Gethings, from and against any loss what- ever that may happen by means of auch fid- van ces, he tbe said Pierre Chartrd did, as by these presents be doth, transfer, assign and set over unto the said Charles Gethings accepting hereoffor and on behalf of the said Quebec Bank, all the right, title, claim, interest pro- perty and- demand of him the said Pierre Char- tr6 in and to the aforesaid in part above re- cited contract or agreeoient. To have and tO' hold the aforesaid rights, claims and demand ofhimtheflaid Pierre Cbartr^ in and to the aforesaid contract hereby assigned and in- tended so to be unto the said Charles Gethings for and duHng the aforesaid period of one year. The present as=iignment is thus made and en- tered into by and on the part of the said Pierre Chartr^ for and in consideration of the sum of five shillings lawful current money of Canada, which the said Pierre Charlr^ hereby acknow- ledges to have pecei red from the said Ohailea Qethings at the time of the execution hereof, and also upon the express understanding and condition that the said Charles Gethings shall or will not be in any way held or bound to carry out and fulfil the aforesaid in part above recited contract, nor any of the conditions thereof, but that the said Pierre Oharlr^ shall and will carry out and fulfil the same in his own name, in monner as if these presents had newr been made and entered into And for tbe full effect of the present assignment the said Pierre Chartr^ doth hereby put, substitute and subrogate the said Charles Gethings in all his right, title, claim, interest and demand in and to the aforesaid contract in part above recited. And the said Pierre Oharfp^ doth fur- ther by these presents make, name, constitute and appoint the said' Charles Geldings to be his true and lawful .-.^torney irrevocable with full power and authority for and in the name of him the said Pierre Uhartr^ to draw, accept take, recover and receive all and every the Mm and suras of money now due and which may hereafter become due owing and peyablo to him the sail Pierre Chartid by the said Thomas William Goldie or bis successor in office under tbe aforesaid in part above reclrBd" contract, and upon receipt of all sums of m >ney under ♦.hese presents to give good and valid receipts releases and discharges, hereby ratifying and confirming and promising to ratify and confirm all and whatever tfae said ^K i \ UU VI cause to be done in the premises by virtue here- of."] After the passing of this document I gave a receipt to the Commissariat foj the monies which became due on, Oh»rtrfi*a «ontract„an4 + 1 and placed them to the credit of Ghartrd by Mr. Maxbam's direction The amount receiv- ed by the Banlc under the assif^oment is $34,- 152, 47. Of this sum, $5,730 48 was receiv- ed on the 3rd of October last. Four of the de- fendants notes matured on the 4lb October, and the grosa amount of such notes was $4000. I have stated that these monies were placel to the credit ofChartr6 by Mr Maxham's direc- tion. Mr Mrtxham came into the Cashier's room and I aslced him if he wished the monies received from the Commissariat to be placed to the credit of Chartrd, aa usual ; I asked the question because I had seen Chartrd come into the Bank in a state of intoxication. Mr. Max- ham answered yes, that he had confidence in Mr. Ghartrd or words to that effect. He did not say to me it was perfectly immaterial to hira whether the account was in the name of Char- trd or A. J. Mftxham & Co , provided tJ.eBank kept the money. We had previously to that received monies from the Commissariat with tho consent of A. J. Maxham * Co, which were put to the credit of Chartrd. At the time I put the question to Mr. Maxham whether tha monies received fr^-m the Commissariat were to be placed to Chartrd'a credit as usual, seve- ral surns of money had been r. ceived from the Commissariat and placed to his credit Cross Examined by Mr Stuart. — From the very commencement of the contract all the monies obtained from the Commissariat were deposited to the credit of Ohartrd in his bank account with the Bank, as the Bank books shew, — which came to be done by the direction of A. J. Maxham k Co., or one of the firm f mean to say that the whole account from the commencement was kept in the name of Cbar- tr6 by direction of A. J. Maxham & Co. [The witness being desirous of referring to the Bank ledger, now in Cour», to verify his statement, finds upon an examination of it that the ac- count was so kept,] These monies were under the control of Pierre Ghartrd in the Bank, and they were drawn out by Chartrd's own checks. [Defendants object to Ibis evidence. JThe gene- ral way of appropriating the funds obtained from the Commissariat contract was by Ghar- trd drawing his check upon the Bank against that account, a.'d handing those checks to A.J. Maxham & Co. who deposited the amount there of to their own account in the bank, and gave their own checks to take up their promissory notes to Ghartrd. [The defendants admit that the checks being plaintiffs' exhibits A 2 tj A 8 inclusive, are checks filled up in the body of them in the handwriting of one of the defen- dants, Maxham or Budden, and signed by Ghar- trd. They also admit that the bordereaux at- tached to each of the said checks are signed or written by A. J. Maxham t Go , ; as also the bordereaux attached to plaintiffs exhibits A 1, A 4, A 7.-- Tho defendants object to any proof of the manner in which the monies in question went out of the Bank ] Al! the notes given by A. J. Maxham & Co.. which have been refer- red to by me, that is the notes given by \,ax xt\A nrtrtt aA Uwt nw. vUQiruct have not been taken ap and paid by the monies from the Commissariat. Some of these notes were retired by a check which wag not good, of which A. J. Maxham « Co., must have been aware aa they bad not deposited Chart! d1 check. The amount of this check was $4,20The notes were not. 'paid because th check given fur them was of no value at tb time, nor has it since been made good, thong the notes were given up by one of the clerks i the Bank for the said valueless check.— By tb statement which I hold in my hand it appear that, apuit ti'Oui iiivi saiu four uulei iuo uuij note remaining, unpaid is that of the 5th August, for $2000, due on the 8th of OctobeS last, which is the note sued upon in this caasej Q.— It is not true that on the 8th day of Optc ■ her 1859 there wna still in the hands of llie Bnnk, I of tfie monies received from the Oommisaariat, Irtbe sum of $1530,59, which sum is still in the I*hanuld also be kept under their con&i dera'ion. A deed of assignment was passed and signed by Mr. Gethings, and the Bank did not take any other sttp than the adoption of the memorandum written at *he bouom of A. J. MaxhaT & Go's lettcir The monies were to be under th3 comral of the Bink only, Instead of which, there w;is a deviation and departure from this agreement, the monies were actually deposiJed to A J Maxham & Co.'s credit, they and Churtr^ reserving the- control over them. The inst-int that the mo ney was p'acod to the credit of Chartr^ he had as much power over it as if it were in bis own chest, and thia was allowed at the particular request of A. J Mixham & Co. This course was ftdoptei by them t j reiir? their own notes, if the jury beli-vc'd the teatimony iheymustbe convinced that the money recti «rcd from the Commis?ariat did not go to retire the notes, as agreed upon, but went to Maxham & Co.'s credit, aid was chequed itl not A J. Maxham k Co., whose confidence ia| Chartr^ was evidently misplaced ? On the] 4th of October last, four notes fel' ^ue. Thatl day, Ohartr^, as usual, went to the Bank andj presented his cheque for $4000, as was ap- posed, to take up his note, and aa Maxham k\ Co. had every reason to believe he would dOd Instead of doing this, however, after getting I his ch que accepted, he put it in his pocketj went to the Bank of British North America,! and drew the money. The instant he hadre-J ceived the cheque accepted, it wag worth boI much money— there wasasum of$400o drawn] from the Quebec Bank in the mannei- sanction-] ed by Maxham tt Co., which should have gone towards the payment of the notes, but which! did not. The whole course of dealing estab- lished that the notes were not paid with thai monies received from the Commissariat and] deposited to Chartre's credit; A. J. Maxham & Co always took up their notes by means of their own cheques drawn upon th«;ir own ac-J count. Iramediatelv after what had occurred] in relation to Ohartr6, the clerk in the BankI was applied toby Maxham k On. (or the notes, due on the 4ih October, amounting to $4000, and he handed them over t) Mr. Budden, onei of the defendants, upon receiving Maxham ft) Co's cheque for that sum, tbe clerk supposing] that Chartre's cheque for the $4000 hud been, or was about b-Ing, deposited by A. J. Max- ham & Co The acceptance of this cheque was] an error, but that d«,d not alter the case ; the, cheque being valueless the notes remain un-, paid. The clerk ^ho mide the mistake had no4 authority to acc3pt the cheque, Maxham Aj Oo.'-i account being overdrawn, anl the notes should not have been given up. The clerk, on ' disc ■)verlng his error, went to Mixham & Co.i and atked them to deposit tha amount of the' notes, and the letter of the 6th Octobsr waaj soon atterwardi written. This letter was anj acknowledgment that the notes had not, beenl retired by the money from the Commiesariat. With such an admission from Max am & Co,| that the notes had not been retired with thel money received under the contract, though^ there was an express promise to pay them with that money, the jury could not, after delibera-' tion, but declwre, conscientiously, that thei money had not been applied as agreed upon^ but otherwise by the consent of all parties. A , sum of $6,000 received from the Commissariat' was the balance now due the Bank ; Maxham A Oo.'s cheque upon an overdrawn account] was no payment, and the note sued upon could not be considered as partially paid to the amount of $1500, as pleaded by the defendanta, RiCHinn Fbancis I'knistos, assistant book- keeper in the Quebec Bank, was called by the plaintiffs as a witness in retiuttal. Examined by Mr. Stuart he said : I have been assistant book-keeper in the Quebec Bank for the last four years ; I have held that office from before th« 5th October 1858 down to tbe present time. I know Mr. Pierre Chartr6 and Messrs. A. J. Maxham A Co. the defandants in this case. They had each an account in the Quebec Bank, an ordinary bank account. I e Iff ^ Q — What WM dene with th« monlet receired, nnder the beef contract, and to whose CiSdit were thej carried 7 [Objected to bj derendants.^ObJectlon overruled ] A— Tlies* monies, after they were received from the Gommissariat, went to the credit of Pierre Chartro in his depouit account with the Bank. During the year from the date of the contract, A. 1 Uazham k Oo.'b notes endorsed bj Ohartr^ were discounted by the Bunk for the bcoefit of Chartr^ under the beef contract. I i.0T!r produce a list of A. J. Mazham & Co. '3 notes ib favor of Ohartrd which were given un- der the said contract, the whole amount be- iog $38,613 45 [The defendants admit that the notes filed and of record In a cause No. 1168, now pending in this Court, wherein the Quebec Bank are plaintiffs acd the defendants are defendants, are fou^of the notes given un- der the beef contract.] On the 4lh October tbpse rotes, amounting in all to $4000, becime due, and on the 8th of October the note for $2000 sued on was payable, so that, on the 8tb of October 1859 there were $6000 of these beef contract notes remaining unpaid. Q. — Will you state what was the course adopted by A. J. Maxham h Co., two of the de- fendants, when their notes, given under the beef contract, to the order of Chartr6, were taken up by monies from the Commissariat ? [Objected .0 by defendants, the facts inquired of not being at issue in this cause. — Obj-iction overruled] A.— They, that is A. J. Maxham & Co. general- ly deposited Chartr^'s check, and took up tbeir own notes with their own checks They had these checks of Ohartre in their posses- sion, and brought them to the Bank for the purpose of deposit as I have alreudy stated. The paper writings, being the checks and bordereaux marked exhthits A 1 to A 8 inclu- sive in this cause filed, passed through my hands as part of the monies received under the contract. The checks vhich A, J. Maxham & Co. brought to the bank were sometimes checks that had been previously accepted bv me anc' taken back sometimes by Chartr^ aijd sometimes by Maxham j Co. Sometimes C bar tr^'s checks were brought in which had not been prevjouslv accepted by me Chartr6 would sometimes get his check accepted, and take it to Maxham & Co., who would bring it to the Bank, deposit it with their own border- eau, and with their own check take up the note under the beef contract Q. — Will you state what occurred in relation to the four notes which became due on the 4th of October, 1859, above mentioned ? > [Objected to by defendants. -Taken de bene esse.] A. — I accepted A. J, Maxham 4 Oo'a check for $4,200, in good faith that they were depo- siting Pierre Chartre's check for the like amount against their own. On finding that they did not make the deposit, I sent over to Mr. Max- ham's office requesting them to tnake their check good, upoL. which Mr. Budden, one of the defendants, came over to the Bank, and said he would go after Mr. Ohartr6 and get the check from hira Mr, Budden did not return or make the deposit that day. I sent for him agaia next morning, and be gave me the same reply. The check remains unpaid to this day. Q.— Upon the notes. Including the four duo on the 4th of October, and that for $2,000 sued on In this cause, how much remains unpaid 7 A— Six thousand dollars. Q.— In whose handwriting is the letter dated 5th October, 1869, signed " A. J. Maxham & Co?" [Defendants object to pruduclioo of this let- ter. — Allowed de bene esse ] A. — It is in the handwriting uf A. J. Maz- ham, one of the defendants. At that time there rema! jed to Chartre's credit $1,639 59. [The plaintiffs here produce the original ac- count, kept in the Quebec Bank ledger, of the monies received from the Commissariat, that is nhartre's deposit acconnt with the Bank for those monies] ExiuiNATioN Continued. — The book endors- ed A 13, contains a true copy of that account. [Objected to by defendants—Taken de bene esse.] The ciosses and figures in red ink iu !i- cate the amounts of the notes discounted under the beef contract. Chartre's check for $4,200, mentioned in the Bank account, was paid by the Quebec Bank in account with the Bank of British North America. Okoss-Examinko by Mr. Jones— lam not in- terested in any WAy m the event of this suit. The Quebec Bank called upon myself and my sureties for the payment of the amount of Maxham <». Co's check, which I accepted on the 4th of October, in payment of and to take up the four notes which I have mentioned. I cannot state that all the notes mentioned in the list or statement which I have produced were discounted by the Bank 00 acconnt of the contract in question ; I can- not distinguish the beef contract notes from the oijer notes On the 4th of October, short- ly after the bank opened, Cbartr6 presented his check for $4200, .vhich I accepted. The monies bad then been drawn from the Commis- sariat. Towards the close of banking hours that day A. J. Maxham k Co. presented their check for $4200, in payment of tbeir four notes in favor of Pierre Ohartri, which I ac- cepted, and the notes were delivered up tc them. The $4200 check included an amount of $300 not in any way connected with this transaction, I did not inform Messrs. A. J. Maxham and Co. at the time they presented tbeir check that I had previously accepted Char.r^s check. I was not in the habit of doing so. T had not communicated with the Directors be- fore I sent for Mr Budden in nlation to A. J. Maxham and Go. having overdrawn tbeir ac- count. Re-examined hy Mr. S'.uart — I have been released by the Bank from all responsibility for permitting A J. Maxham & Co. to over draw their account, by deed passed before Campbell and colleague, Notaries, on the 6lh of May last. . •■^^■•: t!:v j«!j- sii :r:i-:j. xj. large amount of eridence had been adduced be 'ore the jury, which, in bis humble opinion, was not in any way connected with the case submitted for tbeir consideration. It was < ( 1 t a c i c ti 9 1 not hig inteatiou to go orar this eTidccce ; he •hoold cooflne himoelf to laoh facts oa he con- ceived had a direct bearing upon the Imoe to be tried. It appeared that on the 8th of Oc- tober, 1858, Pierre Chartrd, one of the defen- danti, having entered into a contract with Her Majesty'a Gommiasariat Department, at Que- bec, for the Bupply of freah beef to the Forces, and being unable to carry out the contract, without some pecuniary assistance, applied to the ♦irm of A. J. Maxham & Co., th? oll.er de- fendants, to make application to tbe Quebec Banlc on his behalf, In order to obtain the ne- cessary advance of money for this purpose. Accordinglr, the defendants, A. J. Maxham & Co., did apply to the Quebec Banli on behalf of Mr. Oharti;^, to make him this advance, by the discounting of their noiesin his favor, and of- fered, on behalf of Mr. Obartr^ to assign the moaies coming to him from the Oommissariat Department in paymentand satisfaction of the advance, or so much thereof as the said monies would suflBce to pay and satisfy. This propo- sition was acceded to bV the Bank, and Messrs. Maxham it Co. were requested fo reduce the same to writing, which wai done by tbe letter of the same date, which had been read to 'the jury, and which formed the basis of the whole transaction. The Bank were aware at the time that they could not, without violating their Charter, make a direct advance in money to Ohartrd upon this beef contract, because their charter expressly forbids their dealing in any- thing except bills of exchange, discounting of notes of hand, receiving the discount at the time of negociating, gold or silver bullion, or in the sale of stock p!odged for mon.y lent and not redeemed, and therefore, in order to carry out the agreement with Ohartr^, they required thr I the notes alluded to should be granted. The making and granting of these notes can only be looked upon, therefore, as ancillary to the carrying out tbe direct advance of money to Ohartr^ by the Bank. By the letter, Max- ham & Co, stipulated that the Bartk only should receive the money, meani&g the monies to become due to Ohartrd by the Commissa- riat; and it was for the gentlemen of the jury to put such a construction upon th^t and (he other portions of the letter, as would host cfirry out the intentions of the parties. By its terms Maxham & Co. could only be consideied as becoming liable as sureties of Chartr6 towards the Bank, in the ev«ntof the monies to be re- ceived by them from the Commissariat, not proving suflScient to cover the advances made to Chartr^. The Bank having accepted the terms of this letter, in order to carry out the Srir.cipal condition imposed npon them by >xham& Co, namely, that of receiving the monies themselves from the Commissariat, caused to be prepared and executed the deed of assignment which had been referred to. by which Chartrd not only appears to have trans- ferred all the monies to become dne to him. bat also the contract, so that the Bank virtually came to be contractors with Her Majesty's MU- itary Government for the supply of fresh beef for the use of the Forces -^ and the monthly ac- counts (urnished to the department would seem to justify this position. The making of this •asigcment was certainly to ensure the due p»y J ment of the notes: and the Bank fully intend ing that they should lose nothing by the trMS] action, required not only that the orde/ on the Commissariat, by means of a no^ tarial transfer, should be depo8'»ed wltJ the Cashier, as sUted by Mr. Gethinasl but also that the beef in store durlnt the winter months should be insured bv Chartrd, and the policy assigned to them, eon. stituting at thr same time Mr. Oethlngs] the sole judge of tbe amount of monies to be advanced. Advances were thej made from time to time to Chartrd bi *°«- Bank, and his monies were receivec by Mr. QethinRS, and placed to his account bi the voluntary act of the Bank, as the question put to Mr. Maxham by the Cashier, w he thei ne should continue to uce the monies to Cbartr^'s account as usual, which was the first occasion ho had addressed Mr. Maxham, suffl. ciently shews. Mr. Gethings stated his reasoc for asiing this question : it was, as he said' that Chartrd had come into the Bank on sevei ral occasions in a state of intoxicatioo,— » ciri cametance which surely should have placed thel Bank on its guard in relation to the applicfttionl of these monies. Notes of a similar description/ continued to be discounted, and the monies *cr be received by the Bank from the Commissa-, riat for nearly a year, coming down to tbe 3m1 of October, 1869, when the last payment waal made, amounting to $5730. On the 4th Octo. her four notes ofMtxham Sc Co., and held by^ the Bank, amounting ia the aggregate to $4000,1 matured and were retired by Maxham it Co 'si cheque, Chartr6 having, on the same day, ab-i stracted from the Bank, of the monies so reJ ceived ou the previous day, a sum of$420ol The jury bad heard a great deal aboi' t thosU four notes and the money so abstracted by] Chartr6, but this had nothing whatever to do with the present case. there then reroainedJ of these Commissariat monies $1530, and tiati amount being in the Bank on the 8th October! last, wLcn the note for $2000 declared upon mj this cause became due, this sum of $1630 waal applicable to the payment of this last mention- ed note, which came to be salisSed to that ex-' tent ; and Msxham & Co , having tendered th« balance, which was refused, the plaintiffs cer- tainly could not claim against him for any lar-- ger sum. They have endeavored, however, tol account for the $1530. Mr. Gethings has told) you in his evidence that they had imputed this sum 10 tbe part payment of the amount of tho four notes which matured on the 4th October while, in the same breath, he told yon that] Messrs. Maxham & Co. bad retired these notesi and had them in their possession, acd that thel Bank had instituted another suit against Mar- ham ft Co., which was still pending in thi»i Court, for the recovery of the amount of theJ very cheque which had been given br them notes The only question in this case is this : Was there any pan of the monies received by the Bank from the Commissariat in tbe Bank •t the maturity of the note sued upon in ihis cause, to meet that note or any part thereof " Tho jury had been told there were $1630, but 10 .t the aame time it ia pretend sd that thia sam ^\onId bot be so applied, becaose it bad been Slaee'' ' bar tr^'a account, and waa subject [to bia control. Waa it conaiatent with this pretension that Ibe Bank sbonld require an aa- i.igament c' the monies due to Gbartr■ ! >■