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By Order of the Trustees of the Will oi’ Joseph Thonms
About a mile from Theyd-on Bots, 11 mile from ChigweII
lane, and abiut ‘.3 miles from Louchton Stations on
the Great Eastern Railway, and ondy 14 miles from
London.—In a delightfully ruril and undulitinz district,
commanding p‘cturcsqu=a views over the Forest, a.
valuable Freehold Residential Property. known as the
Debdcn Hull Eitate; it comprises DJIJZIGII Hall, snub
slanlizl residence. approached by a c:\i'ria.;ra drive
through a (park, with lodge at euti-.i.nce.and containing
19 bed an dressing-rooms capital cntiuncc lull with
flreplace, 5 reception-rooms, canseiv:it=iry, ani_ very
good domestic oflices, spacious pleasure ground.-, kitchen garden, stabling for 7 horses, 2 large coach-hiuses and other buildings, 4 cottages, and first-rate farm:-ry, and
We-II-iimI)BKEiI Egrk-like mrndow, arable, and \VDTkI. land,
extendingto a ut 140 acres, possessing very cxteniiva
frontage: in main roads. _
Debden-green Housc.—A well-Luilt Freehold Residence. facing the Green, containing eight bed and dressingrooms, bath-room, flve reception-rooms, and domestic offices, with stalling for three horses, and pleasure and kitchen gardens. _ _
A Pair of substantial briclr-built Villas, a Pair ot_timber and tiled Catt‘ ges, and a small Paddock, siiuate in England‘:-lane.
“ESSRS. ALFRED SAVILL & SON
I. have reccivcd instructions to OFFER the Above for
'SALE by AUCTION, at the MART. Tokenhouse-Yll'1I.
London, E.C., on WEDNESDAY, MAY 4, 1808, at TWO
o'clock, in Two Lots.
Particulars with plans and conditions of sale, may shortly be obtained oi Messrs, Alfred Cox & Son, Solicitors. 10, St. Swithin‘s-lane. E.C.; at the place of sale; and at tél%:\l10I.iOl1C'E!'8' Oificcs, 3;), New Broad-street, Innlon.
M O R T G G E S ON MANSIONS AND FLAT Large Sums awaiting Investment, also on Freehold and Leasehold Properties, Large Estates or Farms. Good Freehold Ground-rents Wanted. Principals placed in direct communication with clients. GIBSON’S AUCTION AND ESTATE OFFICE, 22, Risa-srnnsr, Br. Janus’, Losnox, S.W. (Telephone 5527 Gerrard); Hanrroansuins Orricas, Br. Amuse (Telephone No. 4) ; and Ham-axons.
LEGAL AND GENERAL LIFE ASSURANCE SOCIETY. ESTABLI-S'HED_1836.
VOL. XLlI., N0. 23. The Solicitors’ Journal and Reporter
LONDON, APRIL 9, I898.
',“ The Editor cannot undertake to return rejected contributions, and copies should be kept of all articles sent by writers who are not on the regular stafl of the JOURNAL.
Cusszxr Tories ............... ... .......... .. 391 Leon. News ... ............................... .. 402 Rssrzsvs C/11'1rsL 391 Wulorsn Us Norrcrs 402 Connssrounsuos . 391 Calm-r0as' No-nous... 40:1 Law Socrn-rzs... 398 Bnnorror NOTIOII ... .. 401
Cases Reported this Week.
In tho Solicitors’ Journal. | In the Wlukly Reporter.
Anderson v. Manchester, Sheflleld, and Lincolnshire Railway C-1. Munchester, Sheflield. and Lincolnshire Railway Co. v. Anderson ............. .. 396
A Solicitor, Re. Ex parts The Incorporated Law Society ...................... .. 397
Calcott and Elvin's Contra/ct, Re. 395
Au Acton of Dunmoro v. Whamln, in
the Court, of (‘lnncery of the C iunty
Pplatine of Lancaster, In the Matter
0 . B63 Furness v. Beresford. York E
Petition . Mander v. Ridgway ..... ..
C ippen Bros. v. Moore .. 3.‘)? Perry Almshouses, In re. 3‘;0
partc Jones. .. 397 I South Hetton (‘cal Co. élrimited) v. Spencer v. Lnn Y I Haswcll. Shotton, an Easington Railway Co ................................ .. 397 Coal and (Toke C0. (Limited) .......... .. 355
West Randt Proprietary (Lim ), Re 395 ‘ “fest v. Williams ........................... .. 362
Tun 1r1com'1:1~:11~:xcn and delay to ordinary litigants caused by the protracted nature of the trial of patent actions has for a long time been a subject oi complaint, and it is to be hoped that some good result will follow from the remarks made by the Lord Chancellor in the course of his judgment in Gormully v. North Brilisll Rutbw Co. In his view, apparently, the proper way to deal with such cases, if the trial cannot be brought within reasonable limits, is for the court to order them to be tried before a referee. By section 14 of the Arbitration Act, 1889, provision is made for such reference in cases involving any scientific investigation “ which cannot in the opinion of the court or a judge conveniently be made before a. jury or conducted by the court through its other ordinary ofllcers," and it is clear that a patent action may involve scientific investigation within the meaning oi this provision (Sarby v. Gloucester Wagon Co., W. N., 1880, p. 28). A reference, however, is at best an unsatisfactory expedient, and especially in a class of actions which frequently involve interests of great pecuniary magnitude. The proper solution of the difficulty has been frequently suggested. \Vhat is required is a. special court for the trial oi patent actions, and the assignment of a judge specially for the work of the court. This would mean the appointment of an additional judge; but now that the Lord Chancellor has had his attention called to the exigency of the matter, it ought to be possible to secure such an appointment. There is abundant reason for withdrawing patent cases from the ordinary lists, so that they shall not for days together interrupt business; but this withdrawal must be simultaneous with the provision ol a suitable tribunal to which they can be transferred. The Lord Chancellor admits that it is most satisfactory that patent cases
should be determined in an ordinary court, and the institution of a special tribunal would remove all ground of complaint, and also facilitate the disposal of the general business of the courts. j
Bur wnun patent actions frequently consume an excessive amount of time, they have a justification for their length which is lacking in some other cases. The issues before the court depend upon scientific points, which require careful and prolonged examination, and unless the judge is himself a scientific expert he has to go through a course of education before he is in a position to decide upon the facts and to apply to them the appropriate law. It is different where the trial is spun out because it presents matter of great popular interest. The recent death of the “Tichborne claimant" recalls perhaps the most flagrant instance of this misuse of the procedure of a court of justice. It is difficult now to realize how those who had the conduct either of the civil or the criminal proceedings could have consented to extend them to such an inordinate length, or how the presiding judges could have allowed it. A speech of twenty-six days, such as the late Lord Chief Justice delivered for the defence in the civil action, is doubtless a great performance, and, in consequence of the extraordinary conflict of testimony as to Anrnoa On'ros’s identity, there was an immense mass of material with which to deal. But in such a case the very length of the proceedings defeats their object. Whether the persons charged to decide the matter are judges or jurymen, their capacity to receive facts and arguments is limited, and for, practical purposes the short speech, with its neat marshalling of facts and its concise presentment of arguments, is the most effective. In ordinary cases this is the quality which counsel attempt to import into their speeches, and otherwise business would become impossible. In extraordinary cases, doubtless, some latitude must be allowed. Judges, counsel, and witnesses are human, and with the public, represented by the newspaper reporter, eagerly looking on, there is no great disposition to hurry over the matter. But popular interest does not excuse the reckless waste of the time of courts of law, and the Tichborne case will, it is to be hoped, remain as a “record ” offender in this respect.
WHEN wn referred last week to some observations made by Mr. H. W. Cnsnms in the preface to the new edition of Hood and Challis on the Conveyancing and Settled Land Acts, we little thought that the author of the observations was lying at the point of death. His health was always somewhat delicate, and on the 1st inst. he succumbed to an attack of influenza. By his death we have lost one of the comparatively few profoundly learned real property lawyers of this generation. His attainments were the admiration of his friends long before, by the publication of his treatise on the Law of Real Property, they became generally known to the profession. The labour he bestowed upon that work was enormous. He believed in Lord Coma’s remark that “There is no knowledge, case, or point of law, seem it of never so little account, but will stand our student in stead at one time or other ; and therefore, in reading, nothing is to be pretermitted ” (C0. Litt. 9a), and he acted upon it to the fullest extent in the preparation of the book. He met with his reward ; the treatise established his reputation, and he acquired a good practice; but, as he himself wrote in our columns of his friend the late Mr. W. B. TREVELYAN, “ he never pushed himself into the prominence of a ‘great practice,’ such as has been attained by many inferior men; and he probably did not desire it.” Eminently scholarly, fastidious, and high-minded, he scorned any attempt to attain distinction or- popularity. Yet there was no greater favourite among his brethren at the equity bar. His genuine lrindliness, old-world ciurtliness of manner, and readiness to open his treasures of learning to anyone who had a knotty point to consider in the course of practice, endeared him to them ; and there have been few men at the bar whose loss has been more deeply regretted. For many years he was a frequent contributor to this journal, and up to almost the close of his life he was always ready to give our readers, upon any matter which
interested him in connection with his favourite branch of law, the benefit of his learning and singularly acute intellect.
IT nss been held by Knxnwrcn, J., in Re Jlroo/iv and TmiiIi'n‘r Contra-rt that a married woman who is a mortgagee under a mortgage made in 1895, and who owns the mortgage money as her separate property, can convey the mortgaged property without the concurrence of her husband and without the necessity of acknowledging the deed. But for the decision of NORTII, J., in Ra .Har/mesa and Allsopp’s Contract (44 W. R. 683; 1896, 2 Oh. 358) the point would have been too clear for argument. Under the Married Women’s Property Act, 1882, a married woman is enabled to dispose of property acquired after the Act as if she were a fima sole, and there is no reason for excluding this power in the case of land which she has acquired undera mortgage. In Ra Harlwesa and Ailsojajfs Contract, however, it was held that a married woman who was a trustee of real property could not convoy, except with the concurrence of her husband and by deed acknowledged. The ground of the decision was that section 18 of the Act expressly enables a married woman who is trustee of certain classes of personal property to transfer as a fame sole, and it would seem, therefore, that the same facility is not extended to the case where tho married woman is a trustee of real estate. The conclusion is helped by the consideration that the initial clauses of the Act, conferring on married women n. general power of disposition, appear to contemplate only property in which she is beneficially interested. The result is highly inconvenient. Probably it is due to oversight on the part of the draftsnian of the Act, and clearly it should not be extended. The only ground for applying it to the case of a mortgage would be that the mortgagee is a trustee for the mortgagor, but this is not so. While the mortgage is subsisting, the mortgagee is interested in the land on his own account; the mortgagor only has the equity of redemption. Hence a married woman who is a mortgagee can convey as a fame sole, notwithstanding Rd Earkness and Alla-o;p’s Contract. And after the mortgage has been paid off she is, as Knxswrcn, J., pointed out, a bare trustee, and can convey as a fr-ma solo under section 16 of the Trustee Act, 1893.
THE CLAUSE frequently inserted in partnership articles giving to the partners power to expel one of the firm in case of breach of duty or incapacity requires to be exercised in good faith or it may become an instrument of grave oppression. In the recent ease of Barnes v. Youngs (46 W. R. 332) Roman, J., has placed a qualification upon its exercise which will prevent any B11011 result. The articles there contained a very comprehensive clause giving the partners power to expel one of their number under a variety of circumstances. The expulsion was to take efiect up0l1 notice in writing being served upon the expelled partner, but provision was made for a reference to arbitration if any question arose whether a case had happened to authorize the exercise of the power. In consequence of information which the defendants had received as to certain conduct of the plaintlfli they, without warning and without giving an opportunity_0f explanation, served notice of expulsion upon him. The action was thereupon commenced by the expelled partner to prevent the expulsion and the consequent dissolution of partnership fl'0I11 taking efiect, and the defendants, the other partners, moved to stay the proceedings and to refer the matter to arbitration. In the opinion of ROMER, J ., however, the defendants had 110$ placed themselves in a position to require arbitration under the articles. A notice of expulsion involves a decision by_tl_19 partners upon the conduct of the expelled partner, which is 111 the nature of a judicial decision; and the decision should not be arrived at-, and the notice served, until the partners have proceeded in a judicial manner, and have given the impeached partner a chance of offering an explanation. “I think,’_’ sa-H1 the learned judge, “ that partners are not entitled to spring B notice of dissolution on their co-prirtixcr without the slightest preliminary notice being given to him, and without calling 1115 attention in the slightest degree to any alleged cause of_c0mplaint, and without giving him the slightest opportunity Of
meeting the case which is alleged against him.” In the present case no such opportunity had been given, and consequently the right to serve a notice of dissolution had not arisen. The notice which was served was consequently bad, and Roman, J ., declined to stay the plaintiff's action.
UNTIL Pannrmsur interferes, it does not seem at all likely that there will be any end to the cases which keep coming before the High Court on the Betting Houses Act, 1853, involving the question whether some place or other is, or is not, a “place” within the meaning of that Act. Another of such cases was before the Court for Crown Cases Reserved last Saturday in Rey. v. Hicmpbrey, and it was obvious from the tone of their judgments that the judges of the Queen’s Bench Division do not consider their court bound by the decision of the Court of Appeal in Powcll v. The Kempton Park Racecourse Co. (46 W. R. 8 ; 1897, 2 Q. B. 242), though of course they express the utmost respect for that decision. Hswmxs, J., especially was careful to state that no word of his must be taken as approving of that case. The recent case was very diflerent from the Kempton Park case. It had nothing to do with enclosures on racecourses. The defendant was convicted under the Act of illegally using a certain archway in the city of Leeds, which he frequented at the same hour of the day, for the purpose of betting with any person who should come to the archway for that purpose. The court, therefore, in upholding the conviction, were able to do so without dissenting from the Kempton Park case. It will be interesting to see how the judges will treat a case which raises the same point. It is quite clear that no court can overrule a judgment of the Court for Crown Cases Reserved, and this court gave a final decision in Hazokc v. Damn (45 W. R. 359; 1897, 1 Q. B. 579). The Court of Appeal, however, refused to follow it in the Kempton Park case, and now these two courts appear to be at issue, and each seems likely to hold to its own expressed opinion. Under such circumstances it has become almost imperative that Parliament should take up the question, and, if possible, lay it at rest once for all. The task would be no easy one, and any proposed legislation would probably meet with much opposition. One very unsatisfactory feature in the decision of the Court of Appeal is that the action was really a collusive one. The Act of 1853 commences with a preamble, “ Whereas a kind of gaming has of late sprung up.” It was admitted that the kind of gaming in question had been carried on since the beginning of this century. That admission had evidently an important bearing on the judgment of the court, but it clearly weakens the authority of that judgment, and Wn.Ls, J., expressed an opinion that it is little short of a scandal that the leading authority on the subject should have been obtained under such circumstances. Anyhow, “muddle” is the only word which adequately expresses the state of the law as to betting. The authorities are irreconcileable, and the position is quite unseemly. The sooner legislation uts an end to the existing state of things the better will it be for the dignity of the law.
In TIIE recent case of Clyde Cycle Co. v.11arg-routes the oftraised question, what are necessaries suitable for an infant? was again under consideration. It was held in that case, by a county court judge, when sitting alone without a jury, that a racing bicycle purchased by the defendant for £12 10s., which had been used by him for racing purposes as well as for exercise on the road, was an article of utility suitable for his circumstances and station in life, which was that of an apprentice to a scientific instrument maker, at a salary of 21s. a week. In aflirming this judgment, the Divisional Court (Lord Rnsssnn, C.J., and R1m.sv,J.) held that, since the county court judge was acting as both judge and jury, his decision could not be reviewed if, in their opinion, the case was a proper one to have been left to a jury—that is to say, one in which there was evidence to justify a jury in finding for the plaintiff on the question of whether the bicycle supplied to the defendant was or was not “necessaries.” This decision is fully in harmony with what was laid down in the leading case of Ryrlcr v. Wombwcll (L. R. 4 Ex. 32), and likewise derives support from the
statutory definition of “necessaries” contained in section 2 of the Sale of Goods Act, 1893 (56 & 57 Vict. c. 71). Moreover, it upholds the rule which ought always to be strictly adhered to in the interest of the public—namely, that the power of appealing from the county court is, as it always has been, limited to those cases in which one of the parties is dissatisfied with “ the determination or direction of the judge in point of law or equity, or upon the admission or rejection of any evidence ” (51 & 52 Vict. c. 43, s. 120), and that, therefore, where there is no jury, the judge’s findings of fact (if upon somc evidence) are final, and cannot be questioned ( Cousins v. Lombard Deposit Bank, 1 Ex. D. 404; »S'mz't/r v. Baker, 1891, A. C. 325), though an appeal will lie where it is clear that in coming to a conclusion on the facts he must have taken an erroneous view of the law: Cowley v. Furncy (12 C. B. 291), Cuthbertson v. Parsons (l2 C. B. 304).
WHERE A person whose goods have been stolen takes back the goods, or receives some other valuable consideration, upon an agreement not to prosecute the thief, he is gulty of the misdemeanour which was anciently known as t/wflbolc, but which is now called compounding a felony. An indictment for the misdemeanour is very seldom indeed met with in the criminal courts, although no doubt it is an everyday _offence. Such any agreement, however, is clearly illegal, and therefore cannot be enforced in an action at law. An example of this came before GRANTHAM, J., a few days ago in the Q.ueen’s Bench Division.‘ In this case it appeared that the plaintiff had had a clerk whom he suspected of embezzlement, and who confessed his guilt. The plaintiff threatened to prosecute the clerk, but some friends of the latter, amongst whom was the defendant, contributed and handed to the plaintiff a part of the sum that had been misappropriated, and the defendant gave the plaintiff a bill of exchange for the balance. No criminal proceedings were taken. The action was brought on the bill of exchange, and was defended on the ground that the bill was given for an illegal consideration—namely, to compound a. felony. The judge found as a fact that the bill had been accepted by the defendant because the plaintiff had threatened to prosecute his clerk, and gave judgment for the defendant. This was clearly in accordance with the defence set up, although no doubt tho agreement not to prosecute was merely implied. After this finding of fact there was no room for doubt as to the law on the subject. The circumstances of the case, however, are of sufficiently uncommon a nature to deserve some passing notice, and the case supplies a good example of an important legal principle.
A casn affecting county court bailiffs and the fees chargeable by them on levying a distress for rent has recently been determined—namely, Duncombo v. Hicks. There, by arrangement with the tenant, the man put in possession by the bailiff agreed to substitute, for “full possession,” what is called “ walking possession ”—that is to say, instead of remaining in possession, he agreed with the tenant to leave on receiving the key of the premises, together with a written authority from the tenant to re-enter as and when he (the bailiff’s man) so pleased. Full possession fees having, under these circumstances, been charged, it was held by the county court judge that they were not payable, and that, moreover, the bailiffs certificate must be cancelled. On appeal to the High Court, the Divisional Court (Wnronr and Dannmo, JJ.) declined to interfere in any way with the discretion exercised by the county court judge, and likewise expressed a doubt as to whether they had power to amend so much of his decision as related to the cancellation of the certificate. That the High Court does not possess the power in question is, we submit, clear from the language of section 33 of the County Courts Act, 1888, which enables the high bailiff to appoint bailiffs to assist him, and at his pleasure to dismiss all or any of them, and appoint others in their place, and provides t_h;.t ‘,‘,evcry bailwfso appointcrl may be suspcmlezl (r (lz'smz'ssad by the
_;u ye. .
THE Court of Appeal have held in Bartlett v. ling/fair Property Co. (Limited), aflirming the decision ol WRIGIIT, J . (46 \V. R. 199), that an effective mortgage cannot be made of capital of a limited company which by a special resolution passed under section 5 of the Companies Act, 1879, has been declared not to be capable of being called up except in the event and for the purpose of a winding up. Having regard to the current of decisions hitherto upon mortgages of uncalled capital, it was by no means clear that this was the correct view, and the argument in the judgment of LINDLEY, M.R., is based upon the analogy of the operation of the Act of 1879 in the case of unlimited companies rather than upon considerations applicable to limited companies.
Originally there was, as is well known, no little doubt as lo the validity of any charge on uncalled capital. Such a charge, it was said, involved an interference with the discretion which the directors ought to exercise in making calls (see Stanley’-9 case, 12 W. R. 894, 4 De G. J. & S. 407). But in Re I’/m/:n[.c Bcamner Sleel Co. (32 L. T. 854) Jizsssn, M.R., held the objection to be untenable, and in subsequent cases the controversy has turned rather on the words of the power in the memorandum or articles of association authorizing the mortgage of uncalled capital, than on the possibility of such power being conferred. In Ra Pyle Works (Lirriiterl) (38 \V. R. 674, 44 Ch. D. 534) it was held by the Court of Appeal that a mortgage of uncalled capital, when properly authorized by the constitution of the company, was effectual to charge calls made by the liquidator in a winding up equally with calls made by tho directors; and the validity of such mortgages was further affirmed by the Privy Council in Newton v. Anylo-Auslralzhn Izwestnzcnt Co. (43 W. R. 401; 1895, A. C. 244).
The section upon which the question in Bartlett v. ling/fair Properly Ca. has arisen provides, in the first instance, for the case of unlimited companies which are being registered as limited under section 179 of tho Act of 1862. Such a company may, upon the registration, increase the nominal amount of its capital by increasing the nominal amount of its shares, but in this case no part of the increased capital is to be capable of being called up except in the event of, and for the purposes of, the company being wound up. The Act, it may be noticed, was passed in consequence of the hardships incident to unlimited liability which were revealed by the failure of the Glasgow Bank in 1878, and the device of reserving a part of the capital for use only upon a winding up was ado ted as a means of reconciling limited liability with the credit which a company had possessed when unlimited. An unlimited company might also upon registration with limited liability, instead oi increasing its nominal capital, reserve in the same manner a portion of its existing uncalled nominal capital.
After making the above provision for the case ol unlimited companies, section 5 proceeds : “ A limited company may by a special resolution declare that any portion of its capital which has not been already called up shall not be capable of being called up, except in the event of and for the'purpose of the company being wound up; and thereupon such portion of capital shall not be capable of being called up, except in the event of and for the purposes of the company being wound up.” It was upon this provision that the Mayfair Properly Co. acted. The company was registered in August, 1892, with a nominal capital of £50,000 in 5,000 shares of £10 each. The sum oi £4 5s. per share was called up, and by a special resolution passed under section 5 of the Act of 1879 in September, 1892, it was declared that £5 per share should not be capable of being called up except in the event of and for the purposes of the company being wound up. Both the memorandum and the articles of association authorized the creation of a charge on the uncalled capital, and in 189-1 the company issued first mortgage debentures charged on all its property, both present and future, including the uncalled capital for the time being. A winding-up order was made in August, 1896, and the debenture-holders c‘aimed that their security extended to the capital which thereupon became capable of being called up.
Taking the provision quoted above apart from the preceding clauses relating to unlimited companies, it would seem that it
is capable of the construction thus sought to be put upon it. The
H P . . creditors, whether secured or not, in their _due order, and the
urposes of the winding up” include the payment oi all
of these words does not necessarily prohibit the application the reserve capital to the payment of creditors_ who have
ver, that a strong argument against this view is afiorded by e juxtaposition of the clauses dealing with the registration of ' ' ' nies having limited liability. As
unlimited companies as compa _ long as the liability was unlimited the capital at the disposal oi
the ment in the present case pointed out, only the nominal amount oi
directors comprised, as the Master of the Rolls in his j ndgshares. In a winding up the calls which the liquidator
could make were unlimited, but previously to the winding
bldhld be made, nor could the proceeds of calls beyond
no call beyond the nominal amount of the shares
such nominal amount be in any way pledged. It is natural to infer that when, by the Act of 1879, the Legislature made it possible for the company to substitute for this unlimited liability in winding up a limited liability represented by the g nominal capital specially reserved, the same qualities should attach to calls made upon this reserve capital as had previously attached to calls made in a winding up in excess of the nominal value of the shares—that is, the calls on the reserve capital
w directors, and never to be available for any purpose whatever
ere meant to be excluded altogether from the control of the
until a winding up had occurred.
But if this is the true efiect of the section as to unlimited h if t hen it uses
companies it may reasonably have t e same e ec W _ precisely similar language with regard to limited companies. Thus here again the reserve capital is removed from the control
the directors and is kept intact for the liquidator tg
I ply in the course of the winding up “The prohibition,
the case of limited companies is inserted for precisely t e same
urpose as in the case of unlimited companies—viz., to preserve
such capital for the general purposes of the company when
wound up. To interpret the section so as enable a_ company
defeat this object by pledging or otherwise disposing of its
to reserve capital is, in my opinion, entirely to miss the real meaning of the Legislature as expressed in the language it has
used. Neither the Act of 1879 nor the other Companies Acts
give a company power to dispose of assets which cannot come into existence until it is wound up. To hand o_ver the reserve capital or any part of it when called up to a prior assignee, or
h has no claim against the assets until he has
to a mortgagee w o realized or given up his security, is not to apply the 1'6s6ll;Y9
capital for the purposes of the company being 'wound_up wit in the true meaning of that expression as used in section 5, bill
to prevent such application.”
Apart from technical considerations, the construction thus
adopted gives greater utility to the provision in question. _ A8
lready pointed out, one 0b]ect of creating a reserve capital is :0
increase the general credit oi the company, and directly t e
reserve capital is pledged—il this were possible--the additional source of credit would be gone. So far as the liability of the shareholders is concerned the result is the same, for in no case could the capital be called up till a winding up, and when this
ccurred they would not be afiected by the order in which the ecured and unsecured creditors were paid. But otherwise _th8
resolution creating the reserve capital would become inoperative, and upon a mortgage being created it would cease to be avail
ble for the general creditors. Under the present decision such result will not be possible.