Kirkwood v Gadd
[1910] A.C. 422(Judgment by: Lord Atkinson)
Between: Kirkwood - Appellant
And: Gadd - Respondent
Judges:
Lord Loreburn LC
Lord James of Hereford
Lord AtkinsonLord Shaw of Dunfermline
Lord Mersey
Subject References:
MONEY-LENDER
Business carried on at other than Registered Address
Loan effected at Borrower's Residence
Illegality
Bill of Sale
Legislative References:
Money-lenders Act, 1900 (63 & 64 Vict. c. 51) - s. 2, sub-s. 1 (b)
Judgment date: 10 June 1910
Judgment by:
Lord Atkinson
My Lords, the appellant in this case is a money-lender. He is duly registered under the Money-lenders Act. His registered address at Ipswich, at the date of the loan hereinafter referred to, made by him to the respondent, was 30, Upper Brook Street. It is now 64, St. Matthew's Street. And his registered name is The Provincial Union. The appellant has other registered addresses, but this is the only address which it is material to take note of for the purposes of this appeal. The respondent, who is a retired bank manager residing at 59, Mayfair Avenue, Ilford, carrying on the business of an insurance broker in the city of London, in the month of February, 1908, put himself into communication with one Dobson, who is described as a commission agent by the appellant's counsel, and as a money-lender's tout by the respondent's, to obtain for him a loan, 100l., secured by a bill of sale on his furniture. It does not appear whether the respondent directed Dobson to deal with the appellant in particular, or whether the latter was Dobson's selection. He must, however, have furnished Dobson with an inventory of the furniture which was to be included in the bill of sale, and disclosed to him some of the particulars of his, the borrower's, financial position.
The negotiation which culminated in the loan and the bill of sale, which has been impeached as illegal and void, was initiated by the receipt by the appellant at his registered office at Ipswich of a letter from Dobson enclosing the inventory setting forth the particulars above mentioned, and applying on the respondent's behalf for the desired loan.
On February 15, 1908, one Herbert Sandoe, the appellant's manager, wrote to the respondent the following letter:-
"Provincial Union Bank, 30, Upper Brook Street, Ipswich, 15th February, 1908.
Mr. A. E. Gadd. Dear Sir, - With reference to your application for an advance per Mr. Dobson, we have instructed one of our officials to call upon you on Monday morning about 11.30 when kindly arrange to be at home and if you have not already ascertained the exact amount the Metropolitan Company will accept in settlement of your bill of sale please get this information before our official arrives.
Yours truly, Herbert Sandoe, Manager."
A reply to which, in the terms following, was received by the appellant at his registered address, 30, Upper Brook Street, Ipswich:-
"59, Mayfair Avenue, Ilford, Essex, Feb. 16th, 1908.
The Manager, Pro. Union Bank, Ipswich.
Dear Sir, - I beg to acknowledge receipt of your favour of yesterday's date and to say I will be at home to-morrow (Monday) at 11.30 A.M. to meet your representative as desired.
I am, yours faithfully, A. E. Gadd."
It appears Sandoe was unable to keep this appointment. He accordingly sent to the respondent a letter, dated February 17, 1908, and addressed, as the previous letter had been, from the appellant's registered address, to which the respondent replied by wire, "Will be at home. Gadd, Ilford." This telegram was addressed "Advance, Ipswich," the telegraphic address of the appellant, and was received at 30, Upper Brook Street.
Sandoe accordingly attended at the respondent's residence on February 20, and brought with him the bill of sale and the money to be lent. He got the former executed and handed over the latter, obtaining therefor a receipt, and presumably checked the inventory. In the bill of sale the grantee is described as "the Provincial Union Bank of 30, Upper Brook Street, Ipswich (of which said bank John Kirkwood of the same place is sole proprietor)." In view of these facts there is not, there cannot be, a pretence for suggesting that the identity of the appellant was in any way concealed. The respondent knew his registered name, his registered address, and the nature of the business he purported to carry on there. These are the very things which it was, in my view, the design and purpose of the Money-lenders Act should be brought home to the knowledge of those who borrow from money-lenders. The special mischief against which that statute was directed does not exist in this case. The borrower, therefore, had all the information which was necessary to enable him to ascertain with certainty who was the person with whom he dealt, and the place where that person purported to exercise his calling.
It is quite true that the final stage of the transaction, the handing over of the money and the perfecting of the security, was completed at the borrower's address, and not at the money-lender's registered address; but all the earlier stages of the transaction were carried out by a correspondence addressed to and written from the borrower's address and the lender's registered address respectively; the whole dealing was brought into touch with the registered address at every stage, and indeed it was, as I understood, admitted by the respondent's counsel in argument, that had the money been paid to his client by the appellant's cheque sent by post, and had the draft bill of sale also been sent by post to his client, executed by him at his residence, and returned by post to the appellant's registered address, the appellant should be held to have carried on his business of money-lending in this instance at his registered address, would then have committed no wrong, and the security he obtained would have been valid and unimpeachable. But it is argued by the same counsel that because the bill of sale and the money were carried to his client by the appellant's manager, the money handed over, and the security executed at the client's residence, the whole transaction is impeachable, the security invalid, and the appellant guilty of the criminal offence of carrying on business elsewhere than at his registered address, for which offence a fine of 100l. might be imposed upon him if it were his first offence, and he might be imprisoned for three months if it were his second offence. My Lords, it appears to me that in this argument the main purpose of the Legislature is lost sight of, and if it were to prevail the statute would be reduced to an absurdity.
Your Lordships have not now to decide whether the bill of sale, which the appellant has been restrained by the Court of Appeal from putting in force by seizure of the furniture mentioned in it, has been rendered void. The sole question for decision is whether by reason of what took place at the respondent's residence on February 20, 1908, the appellant should be held to have carried on "business" elsewhere than at his registered address, and thereby committed the criminal offence mentioned in s. 2, sub-s. 2, of the Money-lenders Act.
The word "business" is used, as I think, to designate the business mentioned in the previous sub-section.
In one sense every step, every item, in a long or complicated financial or commercial transaction may be said to be "business," but I think it is obvious that in the phrase "carries on his business" employed in this section, as in the phrase "carrying on business" employed in the 4th section of the Companies Act of 1862, the words "carries on" must be held to imply a repetition of acts, the sum of which constitutes the "business": see Brett L.J., Smith v. Anderson. [F1]
The money-lender's trade is in itself a lawful trade. And it is, I think, no more essential in this than in any trade or business that every act necessary to complete a contract of the class which it is the purpose and object of the trader to enter into and carry out should be performed on the premises of the latter, in order that his trade may be correctly described as being "carried on" in those premises.
If one takes by way of example the case of a house decorator, or of an ordinary retail dealer, who delivers at the house of his customers the goods he sells, it could scarcely be seriously contended that the former carried on his business at the houses belonging to his customers, which he decorates, or the latter at the houses of his customers, where he delivers his goods. I fail to see on what principle the words when applied to a money-lender should be used in a sense and meaning so much narrower than that which they bear when applied, in the ordinary use of language, to other traders, unless, indeed, it is to be assumed that it was the paramount object of this statute to prohibit all communication between a money-lender and his customer on business matters by post or telegraph, and oblige the borrower to frequent the registered house or office of the lender and carry out there every detail of each transaction - an assumption for which there is, in my opinion, no warrant to be found in its provisions.
I agree with the contention of Sir R. Finlay, that if the obtaining, on behalf of a money-lender, the execution of a bill of sale in the house of a borrower be the "carrying on" by the former of his business in that house, then sub-s. (c) is mere surplusage, because by the previous sub-section it is already provided that the lender can only carry on his business in his registered name. Sub-s. (c) obviously applies to an isolated transaction of the kind described, and can only have been introduced because the doing of the thing mentioned in it does not amount to a "carrying on" of business within the meaning of the section.
It is impossible to define with fulness or accuracy what is the precise meaning to be given to the phrase "carrying on business." It is to a large extent a question of fact, to be determined in each case by its own special circumstances. Little assistance can be gained from the authorities.
But this much I think is clear, that "carrying on" business does not necessarily include carrying out the contracts it is the business of the merchant, retail dealer, or money-lender to enter into. In every money-lending transaction in which land, houses, or furniture is mortgaged or pledged as a security, the important step of inspecting and so verifying the existence of the property must be carried out elsewhere than at the money-lender's address: see Erichsen v. Last, [F2] approved in Grainger v. Gough. [F3]
Neither can it require that those contracts should necessarily be entered into on the premises where the business is "carried on"; else the acceptance of a tender or offer which completed the contract could not be communicated by post or telegraph. And, without attempting to fully define the meaning of the phrase, I may say that I think the place at which a merchant or trader must be understood to carry on his business is the headquarters, as it were, of the business, or the headquarters of a particular branch of it, in which the conduct of the business, or of the branch, is regulated, directed, and controlled, and the transactions which constituted it are recorded. In the case of a money-lender it is not, in my view, necessary, as I have said, that every important step in the dealing between him and his customer should be carried out at the registered address of the money-lender.
It will, I think, suffice if such important portions, or such an important portion, of the dealing are or is transacted there by communications, verbal or written, as will necessarily reveal to the borrower the identity of the money-lender, the nature of his business, and the registered address at which he purports to carry it on. Whether one isolated transaction carried out by a money-lender from its inception to its completion at a place other than his registered address amounts or does not amount to the crime of carrying on business elsewhere than at his registered address, within the meaning of the statute, must depend on the particulars or circumstances attending the transaction. The carrying out of one such transaction does not necessarily amount to an offence, but circumstances are conceivable where it might amount to it; for instance, if it were proved that a money-lender, either personally or by his agent, held himself out as ready to do business at a particular place or at particular places other than his registered address, or canvassed for business to be transacted at such place or places, and in consequence of that holding out or canvassing succeeded in getting a borrower to enter there into the isolated transaction impeached, I am inclined to think the money-lender might rightly and justly be held to have carried on his business elsewhere than at his registered address, so as to be guilty of the crime against which the statute is directed.
For the reasons already given I am of opinion that the decision of the Court of Appeal was erroneous and should be reversed.
I concur as to the form of the order to be made as suggested by the Lord Chancellor.