United Kingdom House of Lords Decisions

My Lords, I do not think it necessary to proceed to show that if this alleged construction of the rule, and the principle founded upon that construction, were applicable, it would be possible to turn a realised share—that is to say, a fully paid-up share—into one not fully paid-up by some resolution of the society. I say that I do not think it necessary to consider that point, because after all it is only a more striking mode of illustrating the proposition that the society can of its own motion and without the consent of both the contracting parties alter the contract between the parties. The cardinal vice which runs through the reasoning used to support such a proposition is, that it is within the competency of one of the contracting parties to alter the terms of the contract. My Lords, it appears to me that it is utterly unarguable and impossible to insist that any such power exists. A bargain is a bargain, and must be kept. And for these reasons I move your Lordships that the interlocutors appealed from be reversed, and that the interlocutor of the Sheriff-Substitute be restored, and that the respondents do pay to the appellant the costs both here and below.

Lord Bramwell—My Lords, I am entirely of the same opinion. The pursuer has entered into a bargain with others which gives him certain rights, and amongst them this, that on giving notice he should be repaid whatever stands to his credit as soon as the society is in funds to do so. That is the bargain he has entered into. A majority of those with whom he has made that bargain have thought fit to say that it shall not be performed, that it shall be set aside, and that in lieu of it another arrangement shall be made—that is to say, on account of the probable poverty of the society each member shall receive something less than two-thirds of what stands to his credit. Now, there is nothing in the bargain which authorises them to do that. If there were it would be a conditional bargain, and the bargain would be complied with, but there is nothing in it which authorises them to do it. There is no necessity which compels them to break their bargain, because if ever the time shall arrive when they have money enough to pay him his £97 they can do it.

That being the case, I protest I will not discuss whether the proposal is an equitable one or not. It seems to me so utterly wrong when people have entered into a defined bargain that it should be set aside upon some more or less fanciful notion of equity or right that I will not discuss it. I will say, “Hold to your bargain.” I suppose the proverb is as true in Scotland as it is in England, and true universally, that a bargain is a bargain, as the Lord Chancellor has said, and should be observed.

I really cannot but express a respectful surprise that the learned Judges of the Court of Session should have held otherwise, and I think it particularly mischievous that any notion of that sort should be countenanced now-a-days when there is such a disposition—and such a foolish, stupid disposition—on the part of people to think they can make better arrangements for those who have made their own, and that it is right to set aside a particular and distinct bargain that has been entered into.

Lord Hebschell—My Lords, I am entirely of the same opinion. I do not for a moment doubt that the resolution come to at a meeting of the members of this society was arrived at in perfect good faith, and not in the slightest degree under the impression that they were altering the bargain between the parties. I have no doubt they were under the impression that the true constitution of a society of this description was such that the members of the society were so interested in the funds of the society as that a loss of any of the funds of the society properly fell to the lot of all. Notwithstanding that, I think they were entirely under a misapprehension with regard to what was the bargain and what is the nature and constitution of societies of this description. Nine of the shares, amounting in all to £90, had been realised long before this resolution was arrived at, and, as far as appears, many, if not all, of them before the losses occurred which led to the resolution of the society. From the moment that each share was realised an absolute right vested in the holder of that realised share to give notice to the society, and, when he had given notice, to be paid at once if there were funds and no other member had given notice, to be paid in rotation if other members had given notice. How anything that subsequently happened deprived him of that right, or turned a realised share into an unrealised share, or justified the society in refusing to carry out their 12th rule, I am utterly at a loss to see; indeed, Sir Horace Davey admitted that this seemed to have been overlooked by the learned Judges in the Court below, and that he was not able to suggest how he could support the judgment as regards the realised shares, having in view the 12th rule. My Lords, I entertain no greater doubt as regards the other matter, the proportion of the shares unrealised, or, if you like, the whole £97 under the 10th rule. That gives a member a right in respect of the amount standing at his credit. The whole fallacy of the argument on the part of the respondents appears to me to rest in supposing that the amount standing at his credit does not mean, as it seems to me obviously to mean, the amount standing at his credit by reason of the moneys which he has paid, but that by some strange process of reasoning you are to come to the conclusion that the amount standing at his credit depends upon the mode in which the society has invested the funds out of which he is to be paid the amount standing at his credit. It seems to the that the two matters have nothing whatever to do with one another. The society may have badly invested their funds, and therefore have a difficulty in obtaining the means of paying the amount standing at any member's credit, but that cannot alter the amount standing at his credit, or justify the society in saying that what did stand at his credit no longer stands at his credit.

Upon these grounds, my Lords, I entirely concur in the judgment which has been proposed.

Page: 488↓