Page images
PDF
EPUB

On appeal to the House of Lords (Bloomenthal v. Ford, 45 W. R. 449; 1897, A. C. 156), it was held that as the company had obtained a loan by a representation in the certificate that the shares were fully paid, which BLOOMENTHAL believed and acted upon, the liquidator was estopped from alleging that the shares were not fully paid. The Appeal Court's decision was therefore reversed, and the effect of the House of Lords' decision is that the company is estopped in such cases even when it seeks to fasten liability on an original allottee. Anyone who for value accepts the position of registered proprietor of shares on the faith of the company's statement under its common seal that on each the full amount has been paid, is under no liability although not a shilling has been paid up. The speeches of the noble and learned lords entirely ignore the supposed distinction between a transferee and an allottee.

In the case of Re Wragg (45 W. R. 557; 1897, 1 Ch. 796), after winding up the liquidator wished to have it declared that there was a cash liability in respect of shares issued as fully paid under a duly-filed contract, on the ground that the shares were issued to the vendors to the company of certain property which, though of some value, was not of a value equal to the nominal value of the shares-the effect being, as was contended, that the shares were issued at a discount. But it was held that as the contract stood unimpeached, the value of the property could not be inquired into. No other decision was possible, having regard to Pell's case (18 W. R. 31; L. R. 5 Ch. 11), Forbes and Judd's case (18 W. R. 302; L. R. 5 Ch. 270), and several other decisions which are referred to in the judgment in Re Wragg.

[ocr errors]
[ocr errors]
[ocr errors]

the Court of Appeal. If the same point went to the House of Lords there would probably be a difference of opinion among the Lords, and it is clear that the law cannot be stretched any further so as to catch auditors as officers. But in the Western Counties case an attempt was made to strain the law still further. A firm of accountants had audited the accounts on a given occasion, being asked to do so by one of the directors. They were not appointed in the manner prescribed by the articles, but they were paid by the company. Mr. Justice STIRLING, misled by the specious argument that the accountants were de facto officers, held that they could be proceeded against under section 10. The Court of Appeal, however, held that being a de facto auditor is not necessarily being a de facto officer, for an auditor is not expressly mentioned in the section, and that a mere "casual auditor, "to use a term employed in the argument, is not an officer of the company. He stands, in fact, in the same position as a banker (Re Imperial Land Co. of Marseilles, L. R. 10 Eq. 298), or a solicitor who is not a salaried official (Carter's case, 31 Ch. D. 496). Lord Justice LINDLEY expressed the opinion, however, that even a banker or solicitor might, under certain circumstances, be an officer of the company. The Western Counties case points out the high-water mark of legal authority as to what persons are officers of a company within sections 8 and 10 of the Companies (Winding-up) Act, 1890.

A notice of two or three cases as to voluntary winding up must close our remarks about the winding up of companies in 1896-7.

A voluntary winding up commences with the passing of an extraordinary or special resolution, and the mode of passing a special Both Re Wragg and Salomon v. Salomon & Co. are important resolution (whether for voluntary winding up or any other purcontributions to the law of "private" companies-that is to pose) is pointed out by section 51 of the Companies Act, 1862. say, companies registered under the Companies Acts, but not The section contemplates cases in which a poll is demanded as inviting the public to subscribe for their shares. No one could well as those in which there is no such demand, and, of course, say that the directors of either company were what is called there may be a valid resolution although no poll is demanded. an independent executive." Now, it was clearly laid down But where by the articles of association voting by proxy is in the House of Lords in Erlanger v. New Sombrero Phosphate allowed, and a resolution is passed on a show of hands without Co. (27 W. R. 65, L. R. 3 App. Cas. 1218, 1236) that if the a poll, how are the votes of proxies to be counted? In Re owner of property promotes and forms a company, and then Bidwell Brothers (41 W. R. 363; 1893, 1 Ch. 603) Mr. Justice sells his property to it, "he is bound to take care that he sells | VAUGHAN WILLIAMS held that the chairman must count the vote of it to the company through the medium of a board of directors each person who had appointed a proxy, not according to the number who can and do exercise an independent and intelligent judg- of votes which he might give on a poll, but as one vote. Mr. ment in the transaction." But, as Lord DAVEY pointed out in Justice CHITTY afterwards held that the chairman must count Salomon's case, Erlanger's case "is often quoted, and not infre- the vote of each person present who held proxies as a single vote, quently misunderstood. . Lord CAIRNS observations and not count a vote for each of the members whose proxies he cited in part above-" were directed only to a case such as he holds; and this decision was affirmed on appeal, Re Bidwell had before him, where it was attempted to bind a large body of Brothers being overruled: Ernest v. Loma Gold Mines (45 W. R. shareholders by a contract which purported to be made between 86; 1897, 1 Ch. 1). In the same case it was held that where the vendor and directors before the shares were offered for subscrip- the date of meeting is left blank in a proxy paper, and this tion, whereas it appeared that the directors were only the paper, duly stamped, is signed and returned without the blank nominees of the vendor, who had accepted his bidding and being filled in, the filling up of the blank by the secretary exercised no judgment of their own." In Erlanger's case the before it is lodged with the company does not invalidate the publication of a prospectus materially influenced the share sub-proxy, the secretary having implied authority to supply the scription (see p. 1221). Lord HALSBURY and Lord WATSON accidental omission. also took care to distinguish Erlanger's case from that of a company like the one got up by Mr. SALOMON, which, as Lord MACNAGHTEN points out (or his judgment means nothing), was essentially a private company. The forerunner of these cases was Re British Seamless Paper Box Co. (29 W. R. 690, 17 Ch. D. 467), where a transaction which would not have stood in the case of a public company, was held to be valid in the case of a private one.

The much-vexed question as to who is an "officer" of a company within the meaning of section 10 of the Companies (Winding-up) Act, 1890, arose again in Re Western Counties, &c., Co. (45 W. R. 518; 1897, 1 Ch. 617). In Re London and General Bank (43 W. R. 481; 1895, 2 Ch. 166) it was held by the Court of Appeal that the auditor of a joint-stock banking company, appointed and acting under articles of association in the Table A or usual form, was an officer of the company, and that court held that an auditor, similarly appointed and acting, was an officer, although the company was an ordinary trading company: Re Kingston Cotton Mill Co. (44 W. R. 210; 1896, 1 Ch. 6). It will be remembered that Lord HERSCHELL, who presided in the Court of Appeal on the hearing of the case last cited, only acquiesced in the decision because he considered that, sitting where he was, he was bound by the former decision of

Another case as to voluntary winding up, and the special resolution in favour of it, is Lee v. Roundwood Colliery Co. (45 W. R. 324; 1897, i Ch. 373). The decision of Mr. Justice STIRLING on the principal points of the case was reversed by the Court of Appeal; but he decided some minor points which were left untouched-viz., (a) that where a distress is levied by a company's landlord, but not completed by sale, before the commencement of a voluntary winding up-that is, the date of the confirmatory resolution where the winding up is by special resolution-the court has jurisdiction to restrain by injunction further proceedings under the distress; (b) that to obtain such an injunction the liquidator must show special reasons rendering it inequitable to allow the distress to go on; (e) that the fact that the distress was levied between the date of the first and the confirmatory resolution is not a sufficient special reason.

More difficult questions were involved in Re National Bank of Wales (45 W. R. 401; 1897, 1 Ch. 298). In this case, after the commencement of the winding up, the voluntary liquidator had sanctioned transfers of the shares of certain contributories-as section 131 of the Companies Act, 1862, empowers him to doand some of the transferees had again transferred their shares with his concurrence. The Court of Appeal, differing from the

view taken by Mr. Justice VAUGHAN WILLIAMS, held that on giving such sanction the liquidator had power to make alterations in the register of members; that the transferor was thereupon released from his liability as a present member, and could not be put on the A list of contributories; and that where there were successive transfers, only the ultimate transferee was to be put on the A list, the transferor and the other transferees being only under liability as past members. A reference to the various sections on which these conclusions were arrived at will show how difficult were the points involved.

REVIEWS.

BOOKS RECEIVED.

NEW ORDERS, &c. THE PATENTS, DESIGNS, AND TRADE-MARKS ACT, 1883. 46th and 47th years of her Majesty's reign, intituled "The Patents, Whereas by the 25th section of an Act of Parliament passed in the Designs, and Trade-marks Act, 1883, it is amongst other things enacted that a patentee may, after advertising in manner directed by any rules made under the said section his intention to do so, present a petition to her Majesty in Council, praying that his patent may be extended for a further term, but such petition must be presented at least six months before the time limited for the expiration of the patent; that if her Majesty shall be pleased to refer any such petition to the Judicial Committee of the Privy Council the said committee shall proceed to consider the same; and that it shall be lawful for her Majesty in Council to make from time to time rules of procedure and practice for regulating the proceedings on such petitions, and subject thereto such proceedings shall be regulated the Judicial Committee:

The Elements of Mercantile Law. By T. M. STEVENS, D.C.L., according to the existing procedure and practice in patent matters of Barrister-at-Law. Second Edition. Butterworth & Co.

The Law relating to Unconscionable Bargains with Money-lenders, Including the History of Usury to the Repeal of the Usury Laws, with Appendices containing a Digest of Cases, Annotated, relating to Unconscionable Bargains, Statutes and Forms for the Use of Practitioners. By HUGH H. L. BELLOT, M.A., B.C.L., and R. JAMES WILLIS, Barristers-at-Law. Stevens & Haynes.

CORRESPONDENCE.

THE LAND TRANSFER ACT, 1897. [To the Editor of the Solicitors' Journal.] Sir,—I agree with my friend Mr. Fraser that the selected area for the experimental trial should not be the whole county of London. In my opinion it should embrace only so much of that county as lies within the county of Middlesex and is already subject to registration, though of deeds-not of title. The inconvenience, if the experiment should be unsuccessful, would in that case be reduced to a minimum. The London County Council are not likely to wholly veto the application of the order to the county of London, and in my judgment ought not to do so. The efforts of those who dislike the experiment would be more wisely directed towards limiting the area in which it is to be made, and towards ensuring that, while the selected area shall be large and varied enough to afford a fair trial, the experiment shall, in the event of failure, be as little permanently injurious as possible.

My own efforts will certainly be exerted in this direction, but Mr. Fraser greatly overrates the extent of my influence.

BENJAMIN G. LAKE.

[To the Editor of the Solicitors' Journal.] Sir,-Knowing the interest you take in this subject, you will be pleased to hear that our Parliamentary Committee (Marylebone Vestry) -myself in the chair-have unanimously decided against the application of this Act to the county of London, and that the London County Council should be so informed in reply to their circular.

This decision remains, of course, to be adopted by the vestry when the report comes up after Christmas, but I entertain no doubt that the recommendation will be confirmed. G. R. H. STRINGER.

[The report, confirmed by the Vestry, will be found elsewhere.-Ed. S. J.]

It is announced that Mr. Graham Hastings, Q.C., who has just retired from practice at the bar, has presented his clerk, Mr. G. Ellis, with a cheque for £1,000.

Mr. Justice Bigham was entertained by the Northern Circuit at a congratulatory dinner upon his recent elevation to the bench at the Whitehall Rooms, Hôtel Métropole, on Saturday last. Mr. Littler, Q.C., was in the chair, and among those present were Viscount Esher, the Lord Chief Justice, the Speaker of the House of Commons, Lord Justice Collins, Mr. Justice Wright, Mr. Justice Barnes, and Mr. Justice Kennedy. Mr. Littler proposed the health of Mr. Justice Bigham, who, in replying, said that he had joined the circuit twenty-seven years ago and commenced at Liverpool in circumstances of no great encouragement. He had but few friends, little means, and no influence; but in the profession of a barrister true success came by hard work. His record consisted of nothing but plodding. He gave to every task not half his heart but the whole. He wished the members of the circuit to remember that though the Lord Chancellor nominated judges and the Queen appointed them, it was the circuit that made them. Lord Esher, in replying to the toast of "The Northern Circuit Judges," said that he was there to do honour to Mr. Justice Bigham and once more to proclaim himself "a disreputable son of the old Northern Circuit.

And whereas her Majesty in Council has deemed it expedient to make rules for regulating proceedings in such petitions.

Her Majesty is therefore pleased by and with the advice of her Privy Council to approve of the several rules and regulations contained in the schedule hereunto annexed, and to order as it is hereby ordered that on and after January 1, 1898, the same be respectively observed.

Whereof all persons whom it may concern are to take notice and govern themselves accordingly. C. L. PEEL.

26 November, 1897.

The SCHEDULE above referred to.

RULES TO BE OBSERVED IN PROCEEDINGS BEFORE THE JUDICIAL COMMITTEE OF THE PRIVY COUNCIL UNDER THE PATENTs, Designs, AND TRADE-MARKS ACT, 1883, s. 25.

Ι.

A party intending to apply by petition under section 25 of the Act shall give public notice by advertising three times in the London Gazette and once at least in each of three London newspapers. If the applicant's principal place of business is situated in the United Kingdom at a distance of fifteen miles or more from Charing Cross he shall also advertise once at least in some local newspaper published or circulating in the town or district where such place of business is situated. If the applicant has no place of business, then, if he carries on the manufacture of anything made under his specification at a distance of fifteen miles or more from Charing Cross, he shall advertise once at least in some local newspaper published or circulating in the town or district where he carries on such manufacture. If he has no place of business and carries on no such manufacture, then, if he resides at a distance of fifty miles or more from Charing Cross, he shall advertise once at least in some newspaper published or circulating in the town or district where he resides. The applicant shall in his advertisement state the object of his petition and shall give notice of the day on which he intends to apply for a time to be fixed for hearing the matter thereof, which day shall not be less than four weeks from the date of the publication of the last of the advertisements to be inserted in the London Gazette. He shall also give notice that caveats must be entered at the Council Office on or before such day so named in the said advertisements.

II.

A petition under section 25 of the Act must be presented within one week from the publication of the last of the advertisements required to be published in the London Gazette.

The petition must be accompanied with an affidavit or affidavits of advertisements having been published according to the requirements of the first of these rules. The statements contained in such affidavit or affidavits may be disputed upon the hearing,

The petitioner shall apply to the Lords of the Committee to fix a time for hearing the petition, and when such time is fixed the petitioner shall forthwith give public notice of the same by advertising once at least in the London Gazette and in two London newspapers.

III.

A party presenting a petition under section 25 of the Act must lodge at the Council Office eight printed copies of the specification; but if the specification has not been printed, and if the expense of making eight copies of any drawing therein contained or referred to would be considerable, the lodging of two copies only shall be deemed sufficient.

The petitioner shall also lodge at the Council Office eight copies of the balance-sheet of expenditure and receipts relating to the patent in question, which accounts are to be proved on oath before the Lords of the Committee at the hearing. He shall also furnish three

[blocks in formation]

A party intending to oppose a petition under section 25 of the Act must enter a caveat at the Council Office before the day on which the petitioner applies for a time to be fixed for hearing the matter thereof, and having entered such caveat shall be entitled to have from the petitioner four weeks' notice of the time appointed for the hearing. The petitioner shall serve copies of his petition on all parties entering caveats in accordance with this rule, and no application to fix a time for hearing shall be made without affidavit of such service. All parties intending to oppose a petition shall, within three weeks after such copies are served on them respectively lodge at the Council Office eight printed copies of the grounds of their objections to the granting of the prayer of the petition.

[blocks in formation]

CASES OF THE, WEEK. Court of Appeal.

16th Dec.

HOLD

LOLE AND ANOTHER v. BETTERIDGE; MALLAM, Claimant. No. 1. BANKRUPTCY-PROTECTED TRANSACTION-EXECUTION-SHERIFF TO PROCEEDS FOR FOURTEEN DAYS-NOTICE TO SHERIFF OF BANKRUPTCY PETITION-HOURS FOR SERVICE OF NOTICE-BANKRUPTCY ACT, 1890 (53 & 54 VICT. c. 71), s. 11, SUB-SECTION 2-BANKRUPTCY RULES, 1886, R. 90.

levied execution on the goods of the defendant in respect of a judgment Appeal from an order of Day, J., at chambers. The sheriff having recovered by the plaintiffs for a sum exceeding £20, the defendant on the 18th of September, 1897, paid the sheriff out. Upon the 2nd of October, which was a Saturday, a receiving order was made against the defendant upon his own petition, and on the same day the official receiver sent notice of the petition and receiving order to the sheriff by telegram, which was received by the latter at 3.40 p.m. on that day. It was admitted that the fourteen days during which the sheriff was required by section 11, sub-section 2, of the Bankruptcy Act, 1890, to hold the money did not begin to run until the 19th of September (see section 141 of the Bankruptcy Act, 1883). The claimant, the official receiver, claimed the money upon the ground that the notice was given within the fourteen days, which did not expire until midnight of the 2nd of October. The execution creditors claimed the money upon the ground that by rule 90 of the Bankruptcy Rules, 1886, service of notices must be effected before two in the afternoon of Saturdays, and that the notice was therefore too late. Upon an interpleader summons Day, J., ordered the sheriff to hand over the money to the execution creditors. The claimant appealed. By section 11, sub-section 2, of the Bankruptcy Act, 1890: "Where under an execution in respect of a judgment for a sum exceeding £20 the goods of a debtor are sold or money is paid in order to avoid sale, the sheriff shall deduct his costs of the execution from the proceeds of sale or the money paid, and retain the balance for fourteen days, and if within that time notice is served on him of a bankruptcy petition having been presented against or by the debtor, and a receiving order is made against the debtor thereon the sheriff shall pay the balance to the official receiver. By rule 90 of the Bankruptcy Rules, 1886: "Service of notices shall be effected before the hour of six in the afternoon, except on Saturday, when it shall be effected before the hour of two in the afternoon. Service effected after six in the afternoon on any week-day, except Saturday, shall for the purpose of computing any period of time subsequent to Service effected after two in the afternoon on Saturday shall for the like such service be deemed to have been effected on the following day. purpose be deemed to have been effected on the following Monday."

[ocr errors]
[ocr errors]

THE COURT (A. L. SMITH, RIGBY, and COLLINS, L.JJ.) allowed the appeal.

A. L. SMITH, L.J., said that the contention of the execution creditor came to this, that the fourteen days during which the sheriff was required 2nd of October, was cut down by rule 90. In his opinion rule 90 did not to hold the money, and which would naturally expire at midnight of the apply to such notices as this, but only to notices of procedure. This part of the rules was headed, "Service and execution of process." All the rules in this part dealt with notices of procedure. He agreed with the decision of Grove, J., in Curtis v. Wainbrook Iron Co. (Cab. & Ell. 351), a case which, no doubt, had been acted upon ever since it was decided. There was another ground upon which the case could be decided—namely, that there Saturday as a notice served upon that day. The rule merely said that for was nothing in rule 90 which invalidated a notice served after 2 p.m. on the purpose of computing the time within which the other party had to take a subsequent step in the proceedings the notice must be deemed to have been served on the following Monday.

RIGBY and COLLINS, L.JJ., concurred.-COUNSEL, H. Reed, Q.C., and H. J. Turrell; Muir Mackenzie; R. W. Coventry. SOLICITORS, Ashwell, Browning, & Tutin; Warren, Murton, & Miller; Rowcliffes, Rawle, & Co., for Blandy & Blandy, Reading.

[Reported by W. F. BARRY, Barrister-at-Law.]

ATTORNEY-GENERAL v. NEW YORK BREWERIES CO. (LIM.) No. 1. 11th Dec.

Mr. Justice STIRLING (1897-H-No. 3,443). In re Harrisons, ld Thomas Price Gower and another v Harrisons, ld EXECUTOR-EXECUTOR DE SON TORT-INTERMEDDLING WITH ASSETS OF HALSBURY, C.

and another.

On a divorce case being called on in the Probate Division on the 17th inst., says the Times, Mr. Inderwick, Q.C., who appeared for the petitioner, stated that it was an extremely painful case, the details of which, in the public interest, had better not be made public property. The President: From what I have seen of the case I am certain that the evidence had much better not be given in public, and I can only express a hope that no one will remain in court except those who have real business there. The court then emptied of all but the reporters, counsel, and witnesses in the case. The President (addressing the reporters), said: I hope, gentlemen, that you will not report this case. One of the reporters: Does your lordship say that we must not report this case? The President. No, sir, I only express the hope that you will not. I must add that, from my past experience, I have every confidence in the gentlemen of the press. The reporters then left the court,

DECEASED PERSON COMPANY TRANSFER OF SHARES TO FOREIGN EXECUTORS-LIABILITY OF COMPANY TO PAY PROBATE DUTY. This was an appeal from the judgment of a Divisional Court (Wills and Grantham, JJ.) on the hearing of an information by the AttorneyGeneral, claiming that the defendants had, by acting as executors de son tort, rendered themselves liable to the penalties and duties imposed by 55 Geo. 3, c. 184, s. 37, and 44 & 45 Vict. c. 12, s. 40. The defendant company, which was incorporated and registered in England, was formed for the purpose of acquiring, and did acquire, two businesses which had been carried on in New York. Henry Clausen, a person domiciled and resident in New York, was registered in the books of the company in London as the holder of preference shares, ordinary shares, and debentures of the nominal value of £42,210. He died on the 28th of December, 1893, and by his will he appointed two persons named Schmidt and Stocky, both of New York, his executors, and on the 19th of January, 1894, letters testamentary of Henry Clausen's estate were granted by the Surrogates Court of New York to Schmidt and Stocky. Article 44 of the articles of association of the company provided that any person becoming

entitled to a share in consequence of the death of a member might, on producing such evidence of title as the directors should require, be registered himself as a shareholder. Article 47 provided that a person entitled to a share by transmission should be entitled to receive and might give a discharge for any dividends, bonuses, or other moneys payable in respect of the share. Schmidt and Stocky, without taking out probate in this country, applied to the company to transfer Clausen's shares and debentures into their names. In order to raise the question which it was desired to raise in this case, the company transferred one share and one debenture into their names, and also paid them the dividends and interest due thereon. It appeared that this was done in accordance with an understanding with the Commissioners of Inland Revenue, and that the company were aware that Schmidt and Stocky had not taken out probate in this country, and did not intend to do so. The Divisional Court gave judgment against the claim of the Crown. The Crown appealed.

THE COURT (A. L. SMITH, RIGBY, and COLLINS, L.JJ.) allowed the appeal.

A. L. SMITH, L.J., said this was a test case brought to determine whether an English company could, upon the death of a foreign shareholder, with impunity transfer into the names of his foreign executors shares and debentures standing in the name of the deceased shareholder in the books of the company, and pay to such executors the arrears of interest and dividends due thereon at the date of his death without such executors taking out or being about to take out representation to the deceased in this country. The Solicitor-General had stated in this court that he did not now ask for penalties. If the foreign executors had come over to this country and obtained a transfer of the shares of their testator and payment of the dividends thereon without taking out or intending to take out probate in this country, they would have constituted themselves executors de son tort; and this would have been so although they did not personally come to this country. How then could the defendant company justify what they did at the request of these executors in administering the English assets of the deceased? Although it was clear that an executor might do many things connected with the estate of his testator before taking out probate, still, when either an executor had to justify what he had done as executor, or another had to justify what he had done at the request of an executor, each must prove that the executor was in fact the executor of the deceased, and this could only be done by production of the probate: see Johnson v. Warwick (17 C. B. 522). The American will, as regarded the English assets, had no validity in this country. This therefore was not the case of a debtor of a testator paying his debt to the executor named in the English will before the executor proved the will, but it was a case of payment made to a person who had no legal right to receive it, with knowledge that that person would never become legally entitled to receive it. Even without that knowledge the defendant company would have made themselves executors de son tort: Sharland v. Mildon (5 Hare 469) and Hill v. Curtis (L. R. 1 Eq. 90). It was clear that an executor de son tort was liable to pay probate duty on the assets of a testator which he administered. In his opinion it was open to the Attorney-General to file an information against the company, asking that it might be declared that a debt had arisen and become payable to Her Majesty in respect of the duty upon the amount of the English assets in this country at the date of the death of the deceased which the defendants had administered: Attorney-General v. Dimond (1 Cr. & J. 356), Attorney General v. Hope (1 Cr. M. & R. 530), and Attorney-General v. Brunning (8 H. L. C. 243). And he thought that the defendant company were liable to pay the duty claimed upon the assets which they had administered in this country. RIGBY, L.J., was of the same opinion. Duty was payable in respect of all the assets of a deceased person which were locally situate in England, and local assets included shares and debentures standing in the name of the deceased. Therefore, even if the dividends and interest were paid abroad, the payment would still be the act of the company whereby a chose in action of the company was dealt with so as to constitute the company executors de son tort.

COLLINS, L.J., concurred.-COUNSEL, Sir R. E. Webster, A.G., Sir R. B. Finlay, S.G., and Vaughan Hawkins; Moulton, Q.C., Asquith, Q.C., Bremner, and Gore-Brown. SOLICITORS, Solicitor of Inland Revenue; Burn & Berridge.

[Reported by F. G. RUCKER, Barrister-at-Law.]

DOMINION BREWERY CO. (LIM.) v. FOSTER. No. 2. 8th Dec. PRACTICE-SECURITY FOR COSTS-LIMITED COMPANY PLAINTIFF "SUFFICIENT SECURITY"-COMPANIES ACT, 1862 (25 & 26 VICT. c. 89), s. 69.

In this case one of the defendants appealed, by leave, from a decision of Kekewich, J., at chambers, refusing to order the plaintiff to give security for costs to a greater amount than £350, which sum had been directed by a previous order, and had been given. The appellant relied on the uncontradicted evidence of the managing clerk to the defendant's solicitor to the effect that the defendant's costs of the action, if it went to trial, would be not less than £1,000. It was not disputed that the case was one in which security ought to be given, and the only contest was as to the sum to be ordered. Section 69 of the Companies Act, 1862, enacts that where a limited company is plaintiff in any action " any judge having jurisdiction in the matter may, if it appears by any credible testimony that there is reason to believe that if the defendant be successful in his defence the assets of the company will be insufficient to pay his costs, require sufficient security to be given for such costs, and may stay all proceedings until such security is given. Kekewich, J., was of opinion that there was no hard and fast rule obliging him to give the sum mentioned in the evidence filed on behalf of the defendant, and he refused to increase the security.

THE COURT (LINDLEY, M.R., and CHITTY and VAUGHAN WILLIAMS, L.JJ.) varied the order and increased the security by £250, making the sum of £600 in all. LINDLEY, M.R., said: This case turns upon the true construction of section 69 of the Companies Act, 1862, and the proper mode of applying it. It is obvious that as to a question of quantum such as this you cannot lay down any very accurate principle or rule. The only principle which, as it appears to me, can be said to apply to a case of the kind is this, that you must have regard, in deciding upon the amount of the security to be ordered, to the probable costs which the defendant will be put to, so far as can be ascertained. It would be absurd, of course, to take the estimate of the managing clerk to the defendant's solicitor, and give him just what he asks for. You must look, as fairly as you can, at the whole case, remembering, also, that the security given should be neither illusory nor oppressive. Here we think that in Foster's case the security ordered by Kekewich, J., ought to be increased by the sum of £250, which will make it up to the sum of £600 in all. You must take into account the chance that the sum of £600 is a reasonable one, and is sufficient. The view we of the case collapsing without coming to trial; and on the whole we think Japan v. Bank of Hindustan, China, and Japan (14 W. R. 811, 1 Ch. 437), are taking is consistent with the case of Imperial Bank of China, India, and which seems to be the only case on the construction of section 69. The costs here and below must be costs in the action.

CHITTY, L.J., said: Section 69 of the Companies Act, 1862, provides for not see how you can lay down any rule more useful than that, or any rule an order for "sufficient security" for the defendant's costs. I really dɔ more precise. There must be some estimate made of what expenses the defendant will be put to, and the court has to take a reasonable view of all the circumstances, the nature of the suit, and any other matters that may properly be brought in. The court is certainly not bound to give the amount of security which the defendant, by his solicitors, says he thinks will probably be the amount of his costs. I entirely agree with what has been said by the Master of the Rolls as to the proper amount to be given. It seems to me that £600 is a reasonable amount in the circumstances of this case.

SOLICITORS, Nicholson, Graham, & Graham; Norton, Rose, Norton, & Co. VAUGHAN WILLIAMS, L.J., concurred.-COUNSEL, Macaskie; A. R. Kirby.

[Reported by R. C. MACKENZIE, Barrister-at-Law.]

High Court-Queen's Bench Division. THE WEST LONDON SYNDICATE (LIM.) (Appellents) v. THE COMMISSIONERS OF INLAND REVENUE (Respondents). Div Court, 14th and 15th Dec.

REVENUE-STAMP-AD VALOREM DUTY-CONSIDERATION FOR SALE-AGREEMENT FOR THE SALE OF THE WHOLE OF THE VENDOR'S INTEREST IN LICENSED PREMISES-GOODWILL-" LEGAL OR EQUITABLE TRANSFER". STAMP ACT, 1891 (54 & 55 VICT. c. 39), ss. 13, 59 (1).

Case stated by the Commissioners of Inland Revenue pursuant to section 13 of the Stamp Act, 1891. On the 4th of January, 1897, an instrument was presented to them on behalf of the West London Syndicate (Limited), under section 12 of the Stamp Act, 1891, for their opinion as to what stamp duty the instrument was chargeable. It was dated the 19th of March, 1895, and was an agreement under seal for the sale by one Thorne to the syndicate of, firstly, the goodwill of the business of an hotel proprietor and licensed victualler carried on by the vendor at Fischer's Hotel, Bond-street, and the benefit of the licences, contracts, and privileges of the vendor; secondly, the lease of the hotel, subject to the yearly rent of £964; thirdly, furniture, fixtures, and fittings; and, fourthly, stock-in-trade and book debts. The consideration for the sale was the undertaking by the syndicate to pay £1,335 8s. 4d., trade debts of the vendor, and £4,250, of which latter sum £1,462 16s. 3d. was for stock-intrade. In other words, the purchase consideration was the sum of £5,585 88. 4d., including for lease and goodwill £4,085 88. 4d. It was stated to the commissioners that it was impossible to sever the goodwill from the lease itself, because the goodwill ceased to be of value when severed from the lease, but that without a covenant restricting the vendor from carr ying on business in the neighbourhood the lease would be of less value by £400. The material clause in the agreement was as follows: (6) "The leasehold premises hereby agreed to be sold, being only assignable with the consent of the landlords from whom the same are held, the vendor shall use his best endeavours to obtain the requisite consent for the assignment thereof to the syndicate or their assigns, and in the event of such consent not being obtained the vendor shall, at the option of the syndicate, execute a declaration of trust of the said leasehold premises in its favour." There had been no assignment of the leasehold premises, but a declaration of trust bearing date the 21st of March, 1895, had been executed by which the equitable interest in the leasehold premises became vested in the syndicate. The commissioners, having regard to sections 5 and 15 of the Stamp Act, 1891, were of opinion that inasmuch as neither the sum of £4,085 8s. 4d. nor any other part of the consideration money had been expressed by the declaration of trust to be apportioned to the leasehold premises so as to make that instrument chargeable according to its terms with ad valorem duty as a conveyance on sale, the whole amount of the sum paid to the vendor except the sum of £1,462 163. 3d. apportioned as the consideration for taking over the stock-in-trade, was to be regarded as having been paid for the other property contracted to be sold under the agreement. They decided, therefore, that under section 59 (1) of the Stamp Act, 1891, the agreement was chargeable with ad valorem conveyance duty on the sum of £5,585 8s. 4d. less £1,462 16s. 3d. for furniture and stock-in-trade, making the net sum of £4,122 12s. 1d. On

VICT. c. 30), s. 2 (1) (c)-CUSTOMS AND INLAND REVENUE ACT, 1881 (44
VICT. c. 12), s. 38.

them as theretofore.

this net sum the commissioners considered that an ad valorum duty amounting to £20 15s. was payable under the agreement, being an ad valorem duty of 58. for every £50 thereof payable under the head of "Conveyance or Transfer on Sale" in the first schedule to the Stamp Act, estate duty upon estates which were at one time the property of the late The question in this case was as to the liability of Earl Grey to pay 1891, and they also assessed the fixed duty of 10s. in respect of the agree Earl Grey, but which had been transferred to him during the lifetime ment for the sale of the leasehold premises, furniture, and stock-in-trade. of the late earl. The instrument had since been stamped in accordance with the assessBy a deed dated the 19th of October, 1885, the ment. The commissioners, however, stated, at the request of the syndi- late earl, who was then living, transferred to his nephew, Albert Henry cate, this case, and the questions for the opinion of the court were: (1) the mansion-house at Howick, subject to an annual rent-charge in favour George Grey, the present earl, his estates in Northumberland, including Whether the instrument was chargeable with the ad valorem duty of £20 158. as being in fact a conveyance on sale of an equitable interest in of the late earl of £4,000, upon trust to permit the late earl to occupy land? (2) If not, with what amount of ad valorem duty it was chargeable, ture and effects therein as theretofore, and also upon the following trusts, and enjoy the mansion-house and appurtenances together with the furnithe contention of the syndicate being that it was only liable to a 108. stamp and an ad valorem duty on the book debts, which amounted to less to pay certain annuities; to pay certain mortgage debts and interest; to than £50. During the argument the following cases were cited by the pay the rent-charge of £4,000 per annum; to keep up the mansion-house, appellants: The Commissioners of Inland Revenue v. Glasgow and South- gardens, &c.; to pay the funeral expenses and debts of the late Western Railway Co. (12 App. Cas. 315), Angus' case (23 Q. B. 579), Com-earl; and not to dispose of certain farms, but to continue farming missioners of Inland Revenue v. Wale (4 Ex. D. 271), Potter v. Commissioners It was further provided that the late Earl of Inland Revenue (10 Ex. 147), and Ex parte Punnett (16 Ch. D. 226), where Grey should have power to revoke the deed in the event of the it was laid down that the goodwill of a public-house was not a personal present Earl Grey dying in the lifetime of the late earl, or of any on his part. goodwill, but on the sale of the house passed with it. [At the conclusion breach by the present Earl Grey of any covenant of the appellants' reply the Attorney-General claimed in right of the By a deed dated the 26th of September, 1894, the late earl, in considerCrown to reply to the reply of the appellants in Revenue cases, and the ation of £5,000, released to the present earl the rent-charge of £4,000, and court decided he had a right to be heard.] further released the present earl from the power of revocation and from THE COURT (GRANTHAM and CHANNELL, JJ.) allowed the appeal. In their under the covenant not to dispose of certain farms. The late earl died on the covenant to pay the rent-charge of £4,000, as well as from all claims opinion the commissioners were wrong in holding that the instrument the 9th of October, 1894, and thereupon the present earl succeeded to the was a contract for a conveyance on sale; it was not the real conveyance, earldom. The net annual income of the property comprised in the deed but merely an agreement setting out what the parties intended to do in of 1885, after deducting interest on incumbrances and other charges and the future. There was an option given to the syndicate the purchasers—the cost of management, is now and was before the date of the lastwho were at liberty to take, but were not bound to take, an equitable mentioned deed very considerably in excess of £4,000. interest from the vendor, in the event of his failing to obtain from his Grey paid duty only upon the value of the mansion-house of Howick and The present Earl landlords, as appeared to be the case, their consent for the assignment of the effects therein. his legal interest in the lease of the premises to the syndicate. Nor was An information was laid claiming duty upon the it a contract by the vendor for the sale of any estate or interest in any the property comprised in the deed of the 19th of October, 1885. The duty value (less the value of incumbrances subsisting thereon) of the whole of property other than lands or goods within the exception provided in section 59 of the Stamp Act, 1891. Moreover, the parties had not treated which grants a graduated duty upon all property which passes on the death was claimed under section 1 of the Finance Act, 1894 (57 & 58 Vict. c. 30) the value of the goodwill and licences as an interest separate from the of a deceased person. premises, although they had dealt with the goodwill in the instrument death of the deceased shall include: "Property which would be required Section 2 provides that property passing on the apart from the lease.-COUNSEL, A. T. Lawrence, Q.C., and Spearman; Sir R. E. Webster, A.G., and Danckwerts. SOLICITORS, A. E. Griffiths; The 38 of the Customs and Inland Revenue Act, 1881, as amended by on the death of the deceased to be included in an account under sectiou Solicitor to Inland Revenue. section 11 of the Customs and Inland Revenue Act, 1889, if those sections [Reported by ERSKINE REID, Barrister-at-Law.] were herein enacted and extended to real property as well as personal property, and the words voluntary and ' voluntarily' and a reference to a ' volunteer' were omitted therefrom." grants stamp duties on accounts delivered of personal or moveable property Section 38 of the Customs and Inland Revenue Act, 1881 (44 Vict. c. 12), of the following, among other, descriptions: Sub-section (2) (a): Any property taken as a donatio mortis causâ made by any person dying on or after the 1st day of June, 1881, or taken under a voluntary disposition, made by any person so dying, purporting to operate as an immediate gift inter vivos whether by way of transfer, delivery, declaration of trust, or otherwise, which shall not have been bond fide made three months before the death of the deceased," and (c) "Any property passing under any past or future voluntary settlement made by any person dying on or after such day by deed or any other instrument not taking effect as a will, whereby an interest in such property for life or any other period determinable by reference to death is reserved either expressly or by implication to the settlor, or whereby the settlor may have reserved to himself the right, by the exercise of any power, to restore to himself, or to reclaim the absolute interest in such property." The Customs and Inland Revenue Act, 1889 (52 Vict. c. 7), s. 11, amends section 38 (2) and provides: "The description of property marked (a) shall be read as if the word "twelve" were substituted for the word "three" therein, and the said description of property shall include property taken under any gift, whenever made, of which property bond fide possession and enjoyment shall not have been assumed by the donee immediately upon the gift and thenceforward retained, to the entire exclusion of the donor, or of any benefit to him by contract or otherwise." On behalf of the Crown it was contended that duty was payable in respect of the property on the grounds that (1) bond fide possession of the property was not assumed to the entire exclusion of the donor, (2) that an express interest was reserved to the donor, and (3) that the deed reserved an express power of revocation to the donor. Attorney-General v. Worrall (1895, 1 Q. B. 99) was cited. It was further contended that the deed of 1894 did not affect the question, because it could not alter the effect of the deed of 1885, and if taken to operate as a gift by itself, it was made too late. It was contended on behalf of the respondent that the reservation of a small income out of a large property would not render the whole property liable to duty, nor would the reservation of the use of the mansion-house. The respondent was only liable to pay duty to the extent to which a benefit was reserved to the late Earl Grey. The power of revocation, it was contended, being only a limited power, was not one of those contemplated by section 38.

FANCETT v. BIERMAN. Div. Court. 16th Dec. PAWNBROKER-UNAUTHORIZED PERSON PAWNS PROPERTY OF ANOTHERORDER ON PAWNBROKER TO RESTORE TO OWNER-PAWNBROKER'S RIGHT TO PROSECUTE PAWNER-METROPOLITAN POLICE COURTS ACT, 1839 (2 & 3 VICT. c. 71), s. 40-PAWNBROKERS ACT, 1872 (35 & 36 VICT. C 93), s. 33.

Special case stated by J. Hanney, Esq., a stipendiary metropolitan magistrate. At the Marlborough-street police-court a complaint was was preferred by Thomas Fancett against Ann Bierman under section 33 of the Pawnbrokers Act, 1872, for that she had pawned with the appellants, J. B. Harrison and J. H. Caudell, pawnbrokers, a certain coat the property of one Joseph Lawrance without his authority to do so. The magistrate dismissed the summons. The facts were these: The informant Fancett was manager to the pawnbrokers, and on the 30th of November the woman came into their shop and pawned the coat in question for £1 18. The evidence was that the coat had been given to the woman's husband by Lawrance to repair, and she had no authority to pledge it. The owner of the coat then summoned the pawnbrokers under section 40 of the Metropolitan Police Act, 1839, and they were ordered to hand the coat over to him. They then prosecuted the woman, but the magistrate considered that section 33 of the Pawnbrokers Act, 1872, did not give the pawnbroker power to proceed against the woman. That section is as follows: "If any person knowingly and designedly pawns with a pawnbroker anything being the property of another person, the pawner not being employed or authorized by the owner thereof to pawn the same, he shall be guilty of an offence against this Act and shall be liable on conviction thereof in a court of summary jurisdiction to forfeit any sum not exceeding £5, and in addition thereto any sum not exceeding the full value of the pledge as ascertained by the court." The question for the decision of the court was whether the magistrate was right in dismissing the summons on the ground that prosecutors were a party to the act complained of and had no right to give or withhold authority to the respondent to pledge the coat with them, and also that they were not the party injured by the wrongful pledging, but the person whose property the woman had pawned. Counsel for the appellants argued that, the magistrate was wrong and that the person injured by the wrongful pawning was the pawnbroker. No one appeared to argue for the respondent.

THE COURT (GRANTHAM and CHANNELL, JJ.) decided that the appeal must be allowed. In their opinion the magistrate ought to have convicted the woman and imposed a fine sufficient, at least, to cover the amount which the pawnbrokers had advanced on the article, and that such amount should be repaid to the prosecutors. The case was accordingly remitted to the magistrate to convict.-COUNSEL, Bucknill, Q.C., and C. L. Attenborough. SOLICITORS, Attenborough & Sɔn.

[Reported by ERSKINE REID, Barrister-at-Law.]
ATTORNEY-GENERAL v. EARL GREY. Div. Court. 13th Dec.
REVENUE-ESTATE DUTY-GIFT OF PROPERTY-RESERVATION OF INTEREST-
RESERVATION OF POWER OF REVOCATION-FINANCE ACT, 1894 (57 & 58

[ocr errors]
[ocr errors]

THE COURT (GRANTHAM and CHANNELL, JJ.) gave judgment in favour of the Crown, upon the grounds that an interest was reserved to the late Earl Grey in the entirety of the property, and that a power of revocation was likewise reserved.

[ocr errors]

CHANNELL, J., was inclined to think that if the interest had been reserved on a portion of the property only, section 38 (2) (c) would not have applied, because "such property in that section could not be taken to refer to a portion of the property.-COUNSEL, Sir R. E. Webster, A.G., Sir R. B. Finlay, S.G., and Danckwerts; Cozens-Hardy, Q.C., and Bremner. SOLICITORS, Solicitor for Inland Revenue; E. Flux & Leadbitter.

[Reported by C. G. WILBRAHAM, Barrister-at-Law.]

« PreviousContinue »