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The Solicitors' Journal and Reporter.


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VOL. XLII., No. 7.

FUNDS, £4,000,000. CLAIMS PAID, £38,000,000.


The Editor cannot undertake to return rejected contributions, and
PROPERTY of almost every description, at Moderate Rates.

copies should be kept of all articles sent by writers who are not on DEATH DUTY POLICIES--Payment Direct to Revenue Authorities before grant

the regular staff of the JOURNAL. of Probate.

Apply for Full Prospectus to
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LAW STUDENTS' JOURNAL .................. 118


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COUBT PAPERS... SUBSCRIBED CAPITAL £1,000,000. PAID-UP - £100,000. LEGAL YEAR 1896-1897



CORRESPONDENCE ..............................


Cases Reported this Week.
HEAD OFFICE: 49, Chancery-lane, W.C. | CITY OFFICE: 56, Moorgate-street, E.C

In the Solicitors' Journal, Tomlinson, Re. Tomlinson v. Andrew 114

Wilcock, Re. Kay v. Dewhirst 115

Bartlett v. Mayfair Property Co. (Lim.) 115
Boord v. African Consolidated Land

In the Weekly Reporter.


Baring v. Commissioners of Inland LICENSED PROPERTY

Clifford v. Thames Ironworks Co.


98 Gilbert, Re. Ex parte Gilbert..

118 To see that the Insurance Covenants include a policy covering the risk of

Carlisle Cafe Co. (Limited) and Todd Izod, Re. Ex parte Official Receiver... 117 v. Muse Brothers & Co

107 LOSS OR FORFEITURE OF THE LICENSE. Knowles & Son (Appellants) v. Sinclair Clark, In re. Ex parte Clark.

102 Suitable clauses, settled by Counsel, can be obtained on application to


116 “Clymene," The THE LICENSES INSURANCE CORPORATION AND Leeds and Hanley Theatre of Varieties Fielding & Co. v. Corry

97 (Lim.) v. Broadbent...

115 Gallagher v. Rudd and Others...... 108 GUARANTEE FUND, LIMITED,

London County Council v. Davis; The Kent County Council v. Lord Gerard... 111


Same v. Rowton Houses (Lim.) 24, MOORGATE STREET, LONDON, E.C.

London Freehold and Leasehold Pro

perty Co. v. Baron Suffield Mortgages "Guaranteed on Licensed Properties promptly, without Maskelyne British Typewriter (Lim.).

112 Lovett v. Lovett

105 special valuation and at low rates.

Moult v. Halliday...

117 Mayor, &c., of Ashton-under-Lyne v.
Reg. v. West
116 Pugh

100 Stevens Re. Cooke v. Stevens.. 113 Smyth, In re. Leach v. Leach


Established 1824. Capital, £5,000,000 Sterling.


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allow the Act to be tried in their district in manner desired by Full Prospectuses on application. ROBERT LEWIS, Chief Secretary.

the authorities, legislation will be brought forward for the purLEGAL AND GENERAL LIFE ASSURANCE pose of making the Act compulsory all over England. NotSOCIETY.

withstanding our confidence in Mr. FRASER's means of knowledge, we really trust that there is some misapprehension as to

this matter. We are reluctant to believe that such a glaring ESTABLISHED 1836.

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A DECISION has at length been given on the “waiver clause

mortgage should be conferred by the articles, either in their in a prospectus. It has been held by CHANNELL, J., in Bensusan original form or as subsequently altered (Jackson v. Rainford Coal v. Clarke that the clause is effectual so far as it intimates to the Co., 44 W. R. 554; 1896, 2 Ch. 340); but, if the power is clear, applicant for shares the nature of the contracts with the mention there is no doubt as to the efficacy of the mortgage (Re Phænix of which he is dispensing: Under section 38 of the Companies Bessemer Steel Co., 32 L. T. 854 ; Newton v. Anglo-Australian Act, 1867, it is required that every prospectus shall specify Investment Co., 43 W. R. 40 ; 1895, A. C. 244), and the mortthe dates and names of the parties to any contract entered into gage is equally effectual both before and after a winding up (Re by the company, or the promoters, directors, or trustees of the Pyle Works, 38 W. R. 674, 44 Ch. D. 584). In these cases, company, before the issue of the prospectus; and a prospectus however, there was no question as to the special restriction upon not complying with this requirement is to be deemed fraudulent calling up capital that may be imposed by section 5 of the on the part of the promoters and directors knowingly issuing Companies Act, 1879. This section provides that a company the same as regards any person taking shares on the faith of the “may by a special resolution declare that any portion of its prospectus who has not had notice of the omitted contracts. capital which has not been already called up shall not be capable According to the interpretation put upon this comprehensive of being called up, except in the event of, and for the purpose provision, it is not limited to contracts entered into on behalf of of, the company being wound up." It can by no means be or binding on the company, but "includes every contract made taken to be clear that this provision ousts the rights of mortbefore the issue of the prospectus the knowledge of which might gagees of uncalled capital when once a winding up has occurred. have an effect upon a reasonable subscriber for shares in deter- Prior to the winding up they have, of course, no control over the mining him to give or withhold faith in the promoter, director, reserved capital; but when a winding up has commenced and the or trustee issuing the prospectus” (Gover's case, 1 Ch. D. p. 200 ; capital has been called up, the purposes of the winding up Tycross v. Grant, 2 C. P. D. p. 546). Upon the section as thus require the payment of all creditors in their due order, and construed Lord Davey's committee made the following com- prima facie any security which certain creditors have obtained is ments in their report of 1895 : “Section 38 is at once too wide in no way prejudiced. Thus, upon the capital being called up and too narrow. It is so wide as to include contracts made in by the liquidator, the rights of the mortgagees—the debenturethe ordinary course of business of a going concern. It is so holders—would attach upon it, and it would be available only narrow in its scope that it does not oven require the contracts in for the general creditors after the claims of the debenturequestion to be open for inspection by intending investors, and it holders had been satisfied. There is no statutory provision that does not apply to an issue of debentures or de ture stock.” for the purposes of winding up all c:editors shall rank against Exception was also taken to the doctrine of constructive fraud the assets pari passu without regard to their securities. This incorporated in the section, and the committee advised that the view, however, has not been adopted by WRIGHT, J., in the case section should be repealed.

of Bartlett v. Mayfair Property Co., decided by him a week ago, and he has held that where a special resolution is passed

pursuant to section 5, the capital reserved by it is placed outA PROVISION the requirements of which were so impracticable of side of the company's power to mortgage uncalled capital. It fulfilment, and, in general, so useless when fulfilled, has natu- is to be noticed that in Re Pyle Works the present Master of the rally led to attempts to get rid of it, and the use of the waiver Rolls referred to section 5 as confirzning the view that capital clause has become practically universal. It has never been called up in a winding up was properly part of the capital of the quite clear, however, that it constitutes, on the part of sub-company and was therefore subject to a mortgage of capital, scribers assenting to it, an effectual release of their rights under but he reserved the question whether there was anything in the the section. There is the danger of the section being held to Act to prevent capital with respect to which a restrictive confer a right inseparable from membership in a company resolution had been passed from being mortgaged. With all similar to the right, just recognized as superior to the private deference to the opinion of Mr. Justice WRIGHT, we should have constitution of the company, for any member to present a thought that, in view of the autho rities on the validity of winding-up petition (Re Peveril Gold Mines (Limited), ante, p. mortgages of uncalled capital, it would have required stronger 96), or the liability to pay up on every share the full nominal words to oust the right of the mortgage les than a mere direction value. On the other hand, there is no reason why each member that the capital was only to be used for the purpose of a should not contract separately with the company, or the pro-winding up. moters and directors, in respect to rights not inalienably conferred upon him, and if the rights conferred by section 38 are

IN A CASE of Reg. v. West, which was tried at the last Durham of the latter kind, the waiver clause is good. This view has Assizes, the prisoner had been committed for trial for rape. No been taken by CHANNELL, J., though with a reservation depon- bill, however, for rape was presented to the grand jury, but dent upon the general 'doctrine of the release of rights by instead of such a bill, one was present id and found for having waiver. The person affected must know what he is waiving. unlawful connection with a girl below sixteen and above thirIn Bensusan v. Clarke it was held that this condition had not been teen years of age, under section 5 (1:) of the Criminal Law complied with. The clause in the prospectus asked for waiver Amendment Act, 1885. Upon this indi etment the prisoner was only in respect of contracts relative to the issue of the capital, by tried and found guilty. It was then submitted, in arrest of which an intending purchaser would of course understand judgment, that the prisoner was entitle acl to be discharged, on underwriting contracts. The clause in the application forms the ground that the prosecution had been commenced more was in wider terms, and by it the applicant agreed to waive than three months after the date of the alleged offence, contrary generally any claim he might have for non-compliance with to the provisions of the Act. It app reared that he had been section 38. It was proved on the part of the plaintiff that a arrested and committed for rape soon after the offence, but that contract for sale of property by a promoter to a trustee for the more than three months had elapsed between the offence and company had not been disclosed, and CHANNELL, J., held that the assizes. It was urged that the rosecution for the offence against this omission the waiver clause was no protection. The for which the prisoner was tried onlj, began when the bill was applicant may waive compliance with section 38 so far as presented to the grand jwy, as he had not been charged with regards any contracts or class of contracts the existence of which that offence before the magistrat es, and that therefore the is sufficiently indicated to him to enable him to exercise a judg-prisoner was entitled to the benefit of the statutory limitation. ment in the matter, but not one of which he knows nothing. In Whether this contention was sound cor not was considered last settling waiver clauses it will be essential for this limitation to week by the Court of Crown Cases 'eserved, and the question be borne in mind.

was decided against the pri soner. By section 9 of the Act a prisoner indicted for rape may be con victed of an offence against

section 5. If, therefore, this man b ad been indicted simply for HITHERTO THE tendency of all the cases of recent years has rape, he might undoubtedly ) jave be on convicted of the offence been to affirm the validity of mortgages of uncalled capital. It of which he was in fact cont ricted. It would be very strange if is essential that such a mortgage should not be prohibited by he were entitled to be disch irged al together because it was not the memorandum of association, and that power to create the thought proper to put him on trial on a graver charge. The

only reasonable view seems to be that taken by the court- visions for the distribution of the several shares in the capital namely, that the prosecution for rape was a prosecution for any in the event of the death of either father or son during the crime for which a person charged with rape could properly be term of the partnership, and in the event of the term running convicted, and that at the time of the commitment the lesser its natural course. In the last case the son's share in the charge was included in the greater. There is an old case of capital was at the expiration of the term to be advanced to exactly a century ago, Rex v. Wallis (1 East P. C. 186), in one-half. In the case of the father's death during the term, which the same point was taken. In this case a man had been the son was to have the whole of the father's share upon paycommitted for trial for high treason by unlawfully counterfeit- ment of £10,000 to his estate. In the case of the death of the ing the coin of the realm. He was, however, indicted and con- son, the father was to have his share of the capital and was to victed for a lesser offence against the coinage included in the pay £15,000. The father died in 1884, the assets of the firm being greater, in respect of which it was provided by statute that no then valued at £67,810, of which the father's share was £45,894 prosecution should be brought except within three months. It and the whole of this share consequently passed to the son, subject reported that "the judges at a conference unanimously held to the payment of £10,000. On the face of the matter, therefore, that the information and proceeding before the magistrate was it would seem that there was a clear beneficial surplus in favour the commencement of the prosecution

and that the of the son of £35,894, and upon this amount the Crown claimed variance between the manner of laying the offence in the indict- succession duty accordingly. The above statement sets forth ment and charging it in the commitment made no difference.” the leading features of the partnership arrangement, but there

were further details, such as the son's obligation, in the event

which happened, to indemnify his father's estate against the The Court of Appeal have differed from the Divisional Court debts of the firm, and upon the whole the Divisional Court (Wills and GRANTHAM, JJ.) as to the important question raised (VAUGHAN WILLIAMS and KENNEDY, JJ.) held that the arrangeby Attorney-General v. New York Breweries Co. The company is ment was to be treated as a commercial transaction, and that an English company, having its registered office in London, the son took the father's share in the capital by purchase and though it carries on business in the United States. HENRY not by gift, so that he was exempt from the payment of duty. CLAUSEN, of New York, died in 1893 entitled to a large number But the judgment of the Court of Appeal seems to take a more of preference and ordinary shares and of debentures in the correct view of the meaning of the arrangement. Although the company. By his will, which was duly proved in New York, father did not give his share to the son out and out, yet the he appointed two Americans as executors. The company recog- obvious intention was that the son should be a very large nized their title without requiring probate of the will in this gainer, and this was borne out by the very different arrangecountry, and gave effect to it by transferring into the executors' ment for the event of the son's death. The father in that event names certain of the shares and debentures, and paying them got only one-third of the capital, and yet was to pay £15,000, the arrears of dividends and interest due at CLAUSEN's death. while for two-thirds the son was to pay £10,000. Such an In consequence of this proceeding the Crown claimed that the arrangement, as the Court of Appeal pointed out, was not made company had intermeddled with the assets of the testator so all upon a commercial basis, and the benefit which the son in the to constitute themselves executors de son tort, and to render event took was a gift in respect of which duty was payable. themselves liable to pay probate duty on the value of his interest in the company estimated at upwards of £10,000, but the Divisional Court rejected the claim. The executors, it was held, THE RECENT case of Re Smyth, Leach v. Leach (ante, p. 81), were entitled to receive the assets without proof of the will, before ROMER, J., is very similar to Attorney-General v. Sudeley and the company were consequently protected by the authority (44 W. R. 340, 45 W. R. 305), and, as in the latter case, it has of the executors. This result appears at first sight to follow been held that the proceeds of property situate abroad which from Sykes v. Sykes (L. R. 5 0. P. 113), where it was decided have to be administered in this country are subject to probate that the agent of an executor named in the will is not liable to duty. In Attorney-General v. Sudeley an English testatrix was be treated as an executor de son tort, although the will has not entitled under the will of her husband, a domiciled Englishman been provod, and a person recognizing the title of an executor whose will was proved in England by Eoglish executors, to and handing over property to him ought to be in as good a one-fourth share of his residuary estate. The estate included,

But in Sykes v. Sykes the will, although among other property, money invested in mortgages of real it had not been proved at the time when the acts were done estate in New Zealand. At the date of the testatrix's death which were alleged to constitute the agent an executor de son the mortgages had not been realized. It was held by the Court tort, was proved by the time the action was commenced, and of Appeal, and the decision was affirmed by the House of Lords, hence the appointment of the executors could be proved by pro- that the testatrix's share in the residuary estate was an English duction of the probate. In the present case the executors had chose in action, and that probate duty was payable in England not proved, and had no intention of proving, the will in this by her executors in respect of her interest in the New Zealand country, and on this circumstance the case has been distin- mortgages. The testatrix, it was pointed out, was not entitled guished in the Court of Appeal from Sykes v. Sykes. The to share in the mortgages directly. Her claim was to have the Now York Breweries Co. are, in fact, unable to show by pro- estate administered in England by her husband's executors, duction of an English probate in the ordinary way that they and it was only by a proceeding against the executors were acting under the authority of executors named in the will, here that her claim could be enforced. Consequently it and consequently they cannot get rid of the prima facie liability was in the nature of an English asset. In Re Smyth the as executors de son tort imposed by their intermeddling with the property in question was a plantation in Jamaica, which, by the assets. As a rule companies are not so complacent as to allow will of an English testator who died in 1839, was devised upon of any dealing with the shares of a deceased person without pro- trust for certain persons for life, and upon their death for sale duction of a duly proved will, and for the future any such pro- and division of the proceeds among named legatees. One of the ceeding will be checked by the knowledge that the company legatees died while the life estates were subsisting, and the themselves will have to pay the duty which the executors are question arose whether probate duty was payable here in respect trying to evade.

of his interest under the will. Having regard to the decision in Attorney-General v. Sudeley (supra), it could hardly be doubtful

that it was payable, and so ROMER, J., held. The property out THE COURT of Appeal have taken a different view from the of which the legatee's interest was to come was, indeed, foreign, Divisional Court of the effect for the purpose of succession duty but that interest gave no claim on the property itself. It was, of the arrangement in Attorney-General v. Brown (45 W. R. as in the case cited, an interest to be enforced against English 446). In 1881 GEORGE BROWN, a cotton spinner, took his son executors in the course of an English administration, and liable, into partnership for a period of five years, the assets of the therefore, to duty in this country. business then amounting to £62,445. The son brought in no capital, but it was arranged that of this sum £41,630, or twothirds, should be credited to the father, and the remaining WHAT is meant by a provision requiring "punctual pay. £20,815 to the son. The partnership deed then contained pro- ' ment”? According to the recent decision of KEKEWICH, J., in

Leeds Theatre of Varieties (Limited) v. Broadbent, the provision The peculiarity of the case was that the dismissal of the plaindoes not necessarily require payment on the due date, but is tiffs, as just pointed out, involved no breach of contract. ÁLLEN satisfied by payment within a reasonable time after. Upon this had not procured any breach of contract on the part of the view the question whether payment can be postponed at all, and company, nor in bringing pressure to bear upon the manager if so, what is a reasonable time for postponement will depend had he used, or threatened to use, any violence. The only way, upon the nature of the particular transaction. In the case therefore, of supporting the action was to base it upon

malicebefore KEKEWICH, J., a mortgage deed whereby £7,000 was that is, upon the intention of injuring Flood and Taylor for secured provided that payment of the £7,000 should not be the sake of procuring a benefit for the members of the Boilerrequired for three years if in the meantime every half-yearly makers' Society—and the questions which KENNEDY, J., left to payment of interest should be punctually paid. The first half- the jury were designed to ascertain the existence of malice in year's interest was due on the 15th of August last, and, it not this sense. The questions (so far as relevant to this issue) were : being paid, on the next day application for immediate payment (1) Did ALLEN maliciously induce the company to discharge the was made to the mortgagors on behalf of the mortgagoos. No plaintiffs ? and (2) Did ALLEN maliciously induce the company satisfactory reply being sent, the mortgagees gave notice not to engage them? To each question the jury returned an calling in the money at the end of three months. Under affirmative answer, with a verdict of £20 damages for each pressure the cheque was sent by the 24th of August, but the plaintiff, and in these findings KENNEDY, J., upon the authority mortgagees insisted on their right to call in the mortgage for of Temperton v. Russell (41 W. R. 565 ; 1893, 1 Q. B. 715), gave default in punctual payment. Under these circumstances KEKE- judgment, as he was bound to do, in favour of the plaintiffs. WICH, J., held that the delay had not been unreasonable, and This result was affirmed by the Court of Appeal. that the notice to call in the money was bad. But this leaves The question of the correctness of the decision has really the matter very much at large, and it would have been more depended upon the effect to be given to the judgments in Lumley satisfactory had the mortgagors been held bound to payment on v. Gye (2 E. & B. 216) and Bowen v. Hall (29 W. R. 367, 6 the due date. The practice of allowing indulgence in the matter Q. B. D. 333), and upon the authority to be ascribed to the of payment of interest on a mortgage may be common, but it is decision and the dicta of Lord Holt in the old case of Keeble v. by no means universal. It is perfectly competent to the parties Hickeringill (11 East 574n). The two former cases decided that to make their rights depend upon payment at the date named, for A. to induce B. to break his contract with C. gives C. a and the word "punctual” is not inapt to describe such pay right of action against A., provided injury results to C., and ment. In Hicks v. Gardner (1 Jur. 541), the only case in which provided A.'s conduct was malicious. To quote a well-known the word seems to have come in question, this meaning was passage from the judgment delivered in Boven v. Hall by adopted, and it would have tended to certainty had that authority BRETT, L.J., on behalf of Lord SELBORNE, C., and him. been followed. In futuro no one can know what the word self: " Merely to persuade a person to break his contract means without going to the court.

may not be wrongful in law or fact.

But if the persuasion be used for the indirect purpose of injuring the plaintiff, or of benefiting the defendant at the expense of the plaintiff,

it is a malicious act, which is in law and in fact a wrong act, THE DECISION IN ALLEN v. FLOOD.

and therefore a wrongful act, and therefore an actionable act if The House of Lords have given their long-deferred decision in injury ensues from it.” Here it is clearly laid down that the the important trade-union case of Allen v. Flood, and by a pith of the civil wrong which gives rise to the action is the majority of six (Lords Watson, HERSCHELL, MACNAGHTEN, malicious intention, and, admitting this result to be correct, it SHAND, DAVEY, and JAMES) to three (Lord HALSBURY, C., and was not difficult to treat the violation of an existing contract as Lords ASHBOURNE and MORRIS) have overruled the judgment of immaterial, and to take the step which was subsequently taken the Court of Appeal and the opinions of the great majority of in Temperton v. Russell. There, as in the present case of Allen the judges of the High Court who were summoned to the v. Flood, the complaint was that the defendants had hindered assistance of the House on the re-hearing of the case. The the plaintiffs in the carrying on of their business by preventing result is to put an end to the notion that interference by one them from obtaining contracts, and since this conduct was maliman, A., with another man, B., in the course of his trade or cious, it was held that there was a good cause of action, employment-no unlawful act being committed or procured to “There was,'

,” said Lord ESHER, M.R., “the same wrongful be committed—is actionable simply upon the ground that it is intent in both cases, wrongful because malicious. There was done with the intention either of injuring B. or of benefiting A. the same kind of injury to the plaintiff. It seems rather a fine at the expense of B.

distinction to say that where a person maliciously induces a The facts which have at length brought the question to settle- person not to carry out a contract already made with the plainment can be very shortly stated. In April, *1894, two ship- tiff, and so injures the plaintiff, it is actionable, but where he wrights, Flood and Taylor, were employed by the Glengall injures the plaintiff by maliciously preventing a person from Iron Co. in repairing a steamship at their dock at Millwall. entering into a contract with the plaintiff, which he would Upon the same job other shipwrights were employed, and also otherwise have entered into, it is not actionable.” a number of ironworkers, the latter class of workmen being This reasoning, of course, is perfectly good so long as it is considerably in excess of the former. The ironworkers were admitted that malice is the leading ingredient in an action members of the Boilermakers' Society, and it was a rule of their grounded on the procuring of a breach of contract ; and the union that ironworkers ought to work in iron only and ship- notion that it is such an ingredient is supported by Lumley v. wrights in wood. Upon this job Flood and TAYLOR were work- Gye and Bowen v. Hall. But the House of Lords have now ing in accordance with the rule, but on a former occasion they distinctly laid it down that the gist of the action is the procuring had violated it by working in iron, and the ironworkers decided the breach of contract. Without an act of actual unlawfulness to have no association with them. They sent for ALLEN, a malice does not constitute a cause of action. The point is clearly district delegate of the Boilermakers' Society, and he, acting on put in the judgment of Lord HERSCHELL. After observing that their behalf, intimated to the manager of the Glengall Co. that the advance from Bowen v. Hall to Temperton v. Russell seemed all the ironworkers would stop work unless Flood and TAYLOR by the Court of Appeal to have been regarded as only a small were dismissed. This course was rendered practicable without step, he said : “So far from thinking it a small step from the any obvious illegality by the fact that the men of both classes one decision to the other, I think there is a chasm between were engaged merely by the day. Although, therefore, in the them. The reason for a distinction between the two cases ordinary course the engagement would continue until the com- appears to me to be this—that, in the one case, the act procured pletion of the job, yet on either side it might be terminated at was the violation of a legal right, for which the person doing the the close of any day. The manager of the company was un act which injured the plaintiff could be sued, as well as the willing to get rid of Flood and TAYLOR, but he was still more person who procured it, whilst in the other no legal right was unwilling to incur the loss consequent on a stoppage of work, Violated by the person who did the act from which the plaintiff and the obnoxious workmen were discharged. For the injury suffered.” Even when the defendant has procured a contract to thus done them they brought an action against ALLEN. be violated, it is still necessary, in order to ground an action,

that he should have done this knowingly, and it seems that the whether such securities are authorized in the case of the paraverment of malice in Lumley v. Gye must be taken to have been ticular company offering them for subscription; and also that satisfied by this knowledge on the part of the defendant. It is the debentures contain apt words to include the uncalled actionable, therefore, for A. knowingly to procure B. to break capital. A strong instance of the result of omitting to make his contract with C. ; it is actionable, also, as Lord WATSON this inquiry is afforded by Mr. Justice CHITTY's decision in Re pointed out, for A. by the use of illegal' means to procure B. to Streatham and General Estates Co. (45 W. R. 105; 1897, 1 Ch. 15.) do an act detrimental to C. But in both cases the gist of the The memorandum and articles gave power to borrow on the action is the prima facie unlawfulness of A.'s conduct, unlawful- company's property, both present and future, including its unness which amounts to a civil wrong if it is accompanied by called capital. The debentures charged “the undertaking and knowledge on his part of the effect of his conduct. In Allen v. all its property whatsoever and wheresoever, both present and Flood this element of illegality was absent. ALLEN procured the future "); but it was held that the uncalled capital remained Glengall Iron Co. to break no contract with Flood and TAYLOR, uncharged. The decision, if correct, shows that it is not safe nor, in intimating that the ironworkers would in a certain event to adopt the definitions in the memorandum and articles, for in exercise their undoubted right of leaving work, did he do any- this case they defined present and future property as being inthing unlawful. The action, therefore, was based solely on clusive of uncalled capital, and all the property, both present malice, and this, in the opinion of the majority of the House of and future, was charged by the debentures. Lords, was not enough.

In South African Territories v. Wallington (45 W. R. 467; There remains the argument founded on the decoy case 1897, 1 Q. B. 692) an attempt was made by a company to Keeble v. Hickeringilland on the support given to it by a dictum obtain, as damages for breach of a contract to lend money on of BOWEN, L.J., in Mogul Steamship Co. v. Macgregor (37 W. R. its debentures, the balance of the amount subscribed for; but 756, 23 Q. B.D. p. 613). “ He that hinders another in his trade the Court of Appeal held that on the breach the only damages or livelihood is liable," said Lord Holt, “ to an action for so recoverable were the actual loss suffered—following Mr. Justice hindering him"; and, again, an action lies " where a violent or CHITTY's decision in Western Wagon and Property Co. v. West (40 malicious act is done to a man's occupation, profession, or way W. R. 182; 1892, 1 Ch. 271). of getting a livelihood.”. According to BOWEN, L.J., "inten- The terms “floating security" and "floating charge,” now 80 tionally to do that which is calculated in the ordinary course of often found in debentures, are assumed to be synonymous. events to damage, and which does, in fact, damage another in The former has now been defined in the House of Lords by Lord that person's property or trade, is actionable it done without MACNAGHTEN as “an equitable charge on the assets for the time just cause or excuse." But the value of this last dictum is being of a going concern. It attaches to the subject charged in lessened by the fact that the conduct of the defendants in the the varying condition in which it happens to be from time to Mogul case, although intended to benefit the defendants at the time. It is of the essence of such a charge that it remains expense of the plaintiffs by injuring the latter in their trade, dormant until the undertaking charged ceases to be a going was held not to be actionable ; and Lord Holt's ruling has, concern, or until the person in whose favonr the charge is with slight exception, slumbered peacefully in the reports until created intervenes. His right to intervene may, of course, be it was revived for the purpose of the present controversy. Lord suspended by agreement. But if there is no agreement for HALSBURY says that the right of the plaintiffs to employ their suspension, he may exercise his right whenever he pleased after labour as they will is a right both recognized by the la and default(Governments Stock and other Securities Investment Co. v. sufficiently guarded by its provisions to make any undue inter- Manila Railway Co., 45 W. R. 353 ; 1897, A. C. 81, 86). This ference with that right an actionable wrong. Lord HERSCHELL case related to debentures ; but, in the case of a bill of sale does not deny this, but he parallels it with another right. “A given by an individual trader, Lord MACNAGHTEN said in 1888: man's right not to work or not to pursue a particular trade or “It belongs to a class of securities of which, perhaps, the most calling, or to determine when or where or with whom he will familiar example is to be found in the debentures of trading work, is in law a right of precisely the same nature and entitled companies. It is a floating security reaching over all the trade to just the same protection as a man's right to trade or work." assets of the mortgagor for the time being, and intended to Whether the right is used well or ill, it is one which has fasten upon and bind the assets in existence at the time when hitherto always been recognized as unassailable, and by it com- the mortgagee intervenes. In other words, the mortgagor binations of men have sought to enforce their own social rules. makes himself trustee of his business for the purpose of the From a popular point of view the recognition of this right in security.

But the trust is to remain dormant until the mort. the case of trade unions is the leading feature in the case. To gagee calls it into operation ” (Tailby v. Official Receiver, 37 lawyers the point of chief importance is that malice or indirect W.R. 513 ; 1888, 13 App. Cas. 523, 541). motive, though accompanied by loss to another, is now definitely The term "floating charge" has now been recognized by the declared to be in itself no cause of action. There must also be Legislature in sections 2 and 3 of the Preferential Payments in some independent, unlawful act.

Bankruptcy Amendment Act, 1897 (60 & 61 Vict. c. 19). This
Act gives to the debts mentioned in section 1 of the Preferential
Payments in Bankruptcy Act, 1888, priority over the claim of

debenture-holders and debenture stock-holders having a floating COMPANIES WINDING UP DURING THE LEGAL YEAR 1896-1897.


The difficulty of enforcing & floating charge by foreII.

closure in the absence of any one of several debenture-holders Almost the first duty which the House of Lords performed in is pointed out by Mr. Justice KEKEWICH in Ro Continental the beginning of the legal year was to pronounce its decision on Oxygen Co. (45 W. R. 313; 1897, 1 Ch. 511). According to the the appeal in Salomon v. Salomon & Co. (45 W. R. 193 ; 1897, same learned judge, where an action is brought by a debentureA. C. 22), the so-called " one-man company

The result holder on behalf of the class to enforce debentures charging was exactly what had been anticipated—the decisions of the uncalled capital, the master may, under an inquiry as to the Court of Appeal and Mr. Justice VAUGHAN WILLIAMS were property charged, find what uncalled capital is due from the completely upset. The facts of this case are too well known to shareholders, although no calls can be made in the action, and need re-statement here.

No company draftsman was if the plaintiff is a shareholder the court may decide the quesdaunted by the decision in the court of first instance, and even tion of his liability for calls in the same action (Madeley v. Ross, When the Court of Appeal had affirmed that ruling, the pro- Sleeman, 8. Co. (1897, 1 Ch. 505). fession remained unconvinced that the law had been correctly The law has for some time been settled that when a deben. stated. Those members of it who had doubts found enough to ture-holders' security is in danger the court will appoint a quiet their minds in Mr. PALMER's criticisms in 1 Company receiver, although there is no principal or interest in arrearPrecedents, 6th ed., p. 460, and Private Companies and in fact, before the security is crystallized." In Re Victoria Syndicates, 13th ed. (1897), p. 52.

Steamboats Co. (45 W. R. 135; 1897, 1 Ch. 158) Mr. Justice Debentures charging a company's uncalled capital are now 50 KEKEWICH appointed a receiver and manager before crystallizacommon that lenders nood a warning to inquire carefully I tion had set in. The decision really follows that of Mr. Justice



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