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of the word "ought," the first agent ought to have communicated the material fact to the plaintiff. He ought not to effect an insurance for the plaintiff concealing the fact, but we doubt whether, legally, his obligation went further: what his moral duty might be is a nice question. To whom was the alleged duty? To the plaintiff, not to an underwriter, because this agent effected no insurance. But how could there be such a duty towards the plaintiff in any legal sense?

The question that at once arises is, why is the plaintiff to be affected by the knowledge of the first agent, the policy not having been effected by such agent but by another? It is quite obvious, as it seems to us, that there is need of some further reason than that which governs the case where it is the agent through whom the policy in question has been effected who has been guilty of the concealment, for the reasons there given will not apply. What is the principle suggested by the judgments of the majority? It appears to be that of general expediency; that it is expedient, having regard to the general results, that insurers should stand in no better position by reason of the concealment from them by their servants or agents of material facts which, in the ordinary course of business ought to be, and would be, communicated. We can, to some extent, understand the application of this view to servants like the captain of the ship or general agents, but it seems to us going rather far to extend it to an agent employed casually for the one particular purpose of effecting an insurance on a particular ship on a particular occasion. There is a vast difference between the position of an agent or servant who is employed to conduct a business in general or generally to conduct a particular branch of it, such as the affairs of a particular ship, and a person employed to effect one particular contract. We can understand that it may be expedient, having regard to the ordinary probabilities of business and the general effect, to impute the knowledge of a captain to his owner, as in Gladstone v. King (1 M. & S. 35), but it does not seem to us to follow that it is so necessary from the expediency of the thing to impute to the insurer the knowledge of anybody he may have casually employed previously to endeavour to effect an insurance. It is obvious that in the one class of cases there might be a frequent risk of wilful and deliberate detention of facts from insurers by their employés, in order to put them in a better position to insure, of which it would be inequitable, under the circumstances, that they should take advantage, and also the possibility of pretended ignorance which it would be impossible to disprove, but in cases similar to that which we are discussing we do not see that the same risk arises. It seems to us very arguable that it was, as it were, a mere accident that the plaintiff had previously tried to effect a policy through a broker who happened to obtain knowledge of a particular fact, and when that broker's employment terminated it was, for this purpose, as if it had never been; and that it is stretching the doctrine of concealment to a most unreasonable length to impute to the insurer the knowledge of such an agent so as to avoid a contract which was honestly

effected.

CONCERNING SEARCHES. (XVI.) JUDGMENTS.

taken in legal execution (1 & 2 Vict. c. 110, ss. 13, 19, ante, pp. 42, 57).

The creditor cannot enforce the provisions of either section 11 or section 13 of 1 & 2 Vict. c. 110 against purchasers unless and until there has been due registration of the judgment under section 19 of that Act (ante, p. 57), nor, after the expiration of five years from the original registration, unless there has been a re-registration within five years before the execution of the conveyance (2 & 3 Vict. c. 11, s. 4; 18 Vict. c. 15, s. 6; ante, p. 58). But 1 & 2 Vict. c. 110 did not repeal the earlier statutes, and, where a judgment was not registered, purchasers remained liable to the old law, so that the creditor was entitled in such a case to enforce such rights as he would have had before the Act of 1 & 2 Vict., either by docketing his judgment or by affecting the purchaser with notice (ante, p. 25). By 2 & 3 Vict. c. 11, however, the dockets were closed, and by the effect of 18 Vict. c. 15, s. 4, judgments entered up before 1 & 2 Vict. c. 110 were required to be registered in order to affect purchasers (ante, p. 58).

Purchasers with notice of judgments were protected by 3 & 4 Vict. c. 82, s. 2, from the operation of 1 & 2 Vict. c. 110, unless and until such judgments were registered under section 19 of the last-mentioned Act; but they remained liable to the old law until 18 Vict. c. 15 protected them in that respect also. They were also protected by 18 Vict. c. 15, s. 5, from the new law, where the judgment, though registered under 1 & 2 Vict. c. 110, s. 19, had not been re-registered under 2 & 3 Vict. c. 11 within five years before the conveyance, though there may be some doubt whether the protection so given extended to the remedies under the old law (ante, p. 58).

Purchasers without notice were protected from the operation of 1 & 2 Vict. c. 110 by 2 & 3 Vict. c. 11, s. 5, but in such terms as to leave them still liable to such rights as were enforceable under the old law upon a docketed judgment (ante, p. 58). It has been often pointed out (see Dart. V. & P., 5th ed., 456) that want of notice is very difficult to prove, and cannot in practice be safely

relied upon.

Effect of contract for sale.-The rules above stated fix the rights of the parties as to judgments prior to a contract of sale. But when A. has contracted to sell lands to B., the latter has become in equity the owner of the lands; and it follows, from the princi ples laid down above (pp. 4, 42), that a creditor, under any judgment entered up after the date of the contract, can have no rights enforceable against the beneficial interest in the lands sold, for it has ceased to belong to the judgment debtor. But (ante, p. 4) if B. has notice of such a judgment, he cannot safely pay his purchasemoney to A., or, as it is sometimes put, the creditor has a lien upon the unpaid purchase-money, though he cannot take the land itself (see Dart. V. & P. 472). Moreover, where a judgment, though entered up before, is not registered until after a contract of sale, section 19 of 1 & 2 Vict. c. 110 deprives the creditor of the benefit of the extended remedies given by that Act. Without registration he can have no charge under section 13, even though he may have obtained delivery in execution of estates and interests a moiety of which was extendible under the old law.

23 & 24 Vict. c. 38.-This Act, which was passed for the benefit of purchasers and mortgagees, and does not affect the rights and liabilities as between a judgment creditor and the debtor himself, applies to judgments entered up after the 23rd of July, 1860 (and on or before the 29th of July, 1864: see 27 & 28 Vict. c. 112, and customary estates on the same footing with leasehold estates in respect of judgments as against purchasers and mortgagees, and to enable them to ascertain when execution had issued, and to protect them from delay in the execution of the writ. It enacts (section 1) that no judgments to be entered up after the passing of the Act shall affect any land, of whatever tenure, as to purchasers or mortgagees, whether they have notice of such judgments or not, unless a writ or "other due process of execution" shall have been issued and registered (in the manner mentioned in section 2) before the execution of the conveyance or mortgage and the pay ment of the purchase or mortgage-money, and unless such execution or other process shall be executed and put in force within three calendar months from the time when it was registered.

II. THE MODERN LAW OF JUDGMENTS (continued). Summary of the law as to judgments entered up after 1 & 2 Vict. c. 110, and on or before July 23, 1860 (23 & 24 Vict. c. 38).post). Its purpose, as it recites, was to place freehold, copyhold, Such interests, legal or equitable, as are capable of being delivered in legal execution under an elegit (ante, p. 41) can be taken as against the debtor from the date of entering up the judgment, and as against purchasers from the date of registration in the register of judgments (1 & 2 Vict. c. 110, ss. 11, 19, ante, pp. 42, 57). In the case of interests incapable of being taken in legal execution, as where there is not a simple trust of the whole beneficial interest for the debtor, e.g., where he has only an equity of redemption (ante, pp. 4, 42), the creditor can, from the same dates respectively, obtain equitable execution by the appointment of a receiver (ante, p. 42) as under the old law (ante, pp. 24, 25).

The creditor also acquires, from the same dates respectively, a charge (enforceable at the expiration of one year from entering up the judgment) upon the lands of the judgment debtor, including estates and interests therein which are incapable of being

By section 5 "judgment" in this Act includes registered decrees, orders of courts of equity and bankruptcy, and other orders having

the operation of a judgment. "Rules" are not mentioned. There is no provision for re-registration of executions.

This Act does not repeal 1 & 2 Vict. c. 110 or 2 & 3 Vict. c. 11; and it would appear that judgments coming within it must be registered and re-registered in the registry of judgments under those Acts. This seems to be assumed by the terms of the 2nd section, which directs the execution to be registered in the name of the person in whose behalf the judgment registered;" and there is no provision such as that contained in 27 & 28 Vict. c. 112, s. 3 (post), negativing the necessity of registering the judgment.

was

It has been suggested that 23 & 24 Vict. c. 38 applies only to interests which can be taken in legal execution under an elegit, and that, therefore, a purchaser might be liable to the creditor's charge under 1 & 2 Vict. c. 110, s. 13, upon a registered judgment, though no registered writ of execution be found. But similar words in 27 & 28 Vict. c. 112 (post) were held not to be so limited: Hatton v. Haywood (9 Ch. 233). The Act mentions "other due process of execution," and it has been held that the appointment of a receiver is a delivery in execution of such interests as cannot be taken in legal execution: Hatton v. Haywood (ubi sup.). The words of 23 & 24 Vict. c. 38 are that no judgment "shall affect any land" until a writ or process of execution is registered; and it is submitted that for the protection of purchasers, such registration is required in order to give the creditor a right to enforce the charge under 1 & 2 Vict. c. 110, s. 13: see Wallis v. Morris (12 W. R. 997), where Romilly, M.R., said that "the Act would not allow the creditor to keep his judgment hanging over the heads of other people. He must issue execution or his charge could not affect a purchaser; the Act expressly stated that, and applied whether the interest was legal or equitable." It was held in that case that the Act applied to an equity of redemption, which is incapable of being taken in legal execution. The charge under section 13 of 1 & 2 Vict. c. 110 could not, however, be enforced until the expiration of one year from the entering up of the judgment, whereas process of execution registered under 23 & 24 Vict. c. 38 is not to affect a purchaser unless it is put in force within three months. Where legal delivery in execution was impossible, the Act might be complied with by obtaining the appointment of a receiver pending the expiration of the year, as in Yescombe v. Landor (7 W. R. 534, 28 Beav. 80, Dart, 474), and thus the object of limiting the length of search in all cases under the Act to a period of three months would be attained. And, though a writ of execution cannot be re-registered, yet, apparently, a second writ, or subsequent writs on the same judgment, could be registered: see Pask on Judgm. Suppl., p. 9n. "The real object of the Act was to prevent the issuing of writs and the nonexecution of them. It was to protect purchasers from that state of things" per Lindley, L.J., in Re Pope (34 W. R. 693, 55 L. T. 369). "Under this statute a registered judgment, under which the land has not been actually delivered in execution, was made a charge upon the land only while a writ of execution was in force-viz., for a period of three calendar months from the date of registration of the writ": Dart, V. & P. 485).

CORRESPONDENCE.

SOLICITORS AND HOUSE AGENTS.

[To the Editor of the Solicitors' Journal.]

Sir,-Some months ago the legal profession here was pained and surprised by seeing that a solicitor, practising in the town from which I write, had caused his name as a solicitor to be affixed to the entrance of certain house agent's offices, who carry on their business in one of the suburbs, about a mile and a half from the solicitor's own office in the town. The solicitor has no office on the premises, so far as is known, apart from the house agent's offices.

Undignified and objectionable as this method of obtaining work is, it appears to be growing here. A firm of solicitors who are practising and have offices in the centre of the town, have affixed their names as solicitors to the office entrance of a trade protection society not a quarter of a mile from the solicitor's own offices. The manager of the Trade Protection Society is an ex-law clerk, and has nearly all the tradesmen of the town as subscribers to the Trade Protection Society. In this case the solicitors whose names appear at the entrance have no offices on the premises apart from the debt

collecting agency of the Trade Protection 3ociety. It is not very difficult to see through these transparent devices. That there is an understanding between the parties in each case is apparent.

I shall be glad to hear what the opinion of the profession is on this practice, as I was under the impression that people of this class— house agents, debt collectors, &c.-were in the profession kept at a distance, and generally looked upon with suspicion. Nov. 23. A SOLICITOR.

NEW ORDERS, &c.

HIGH COURT OF JUSTICE-CHANCERY DIVISION.
ORDER OF COURT.

Wednesday, the 24th day of November, 1886. Justice Chitty, Mr. Justice North, Mr. Justice Stirling, and Mr. Whereas, from the present state of the business before Mr. Justice Kekewich respectively, it is expedient that a portion of the causes assigned to Mr. Justice Chitty, Mr. Justice North, and Mr. Justice Stirling should for the purpose of trial or hearing only be transferred to Mr. Justice Kekewich; now I, the Right Honourable Hardinge Stanley, Baron Halsbury, Lord High Chancellor of Great Britain, do hereby order that the several causes set forth in the schedules hereto be accordingly transferred from the said Mr. Justice Kekewich, for the purpose of trial or hearing only, and be marked Chitty, Mr. Justice North, and Mr. Justice Stirling, to Mr. Justice in the cause books accordingly. And this order is to be drawn up by the registrar and set up in the several offices of the Chancery Division of the High Court of Justice.

FIRST SCHEDule.

From Mr. Justice Chitty (Witness Actions). Abbott v Abbott 1885 A 1,609 May 13 Jeakes ▼ Tibbits 1886 J 231 May 20

May 20 May 20

Orchard ▾ Williams 1884 0 462 May 20
Williams v Martin 1885 W 2,887 May 20
Howlett v Medway Navigation Proprietors 1885 H 3,327
In re Turner, deceased Cork v Hutchinson 1886 T 550
Perren v Baker 1886 P 246 June 3
Wolferstan v Middleton 1886 W 846 June 4
Wright v Horrocks 1885 W 4,279 June 4
Smethurst v Sir C Lindsay & Co, Limited 1885 S 2,774 June 5
Childs v Warren 1885 C 5,813 June 16

Burr v Wimbledon Local Board 1886 B 1,920 June 17

Stephenson v Banks 1883 $ 869 June 21

Charlwood v Evans 1883 C 350 June 22

100 June 23

Duke of Marlborough v Equity and Law Life, &c, Society 1886 M
Newman & Co v Pinto & Son 1886 N 175 June 23
Mellor v Thompson 1885 M 3,184 June 24
Pidgley v Ellis 1886 P 81 June 28
Young v Greenfield 1886 Y 34 June 25
Shore v Pratt 1884 S 1,396 June 25
Patey v Davis 1885 P 1,744 July 1
Midland Railway Co v Micklethwait 1886 M 449 July 2
Stone v Smith 1886 S 1,883 July 2
Carter v Walls 1885 C 2,653 July 7

In re M Watson, deceased Watson v Duncan 1885 W 1,773 July 8
In re J Darby, dec Vaughan v Pennefather 1886 D 611 July 10
Smith v Harding 1886 S 1,466 July 13
James v Pearless & Sons 1886 J 353 July 21
Kinnears Patents, Limited v Allbright 1886 K 268 July 22
Golonya v Rath 1885 G 2,778 July 24

SECOND SCHEDULE.

From Mr. Justice North (Witness Actions).
In re Maudsley, Maudsley v Hughes 1885 M 842 Mar 25
Harris v Christmas 1885 H 4,645 Mar 20
Hoare v Bruton 1885 H 4,890 Mar 31

In re Mellodew, Davies v Mellodew 1884 M 1,564 April 1
Lagerwall v Gritten 1885 L 3,255 April 6
l'Anson v Mowatt 1885 I 1,514 April 7
Grogan v Sutton, Bart 1886 G 106 April 7
Armitage v Newsum 1885 A 1,198 April 9
Attorney-General v Metropolitan Railway Co 1886 A 86 April 10
London and County Banking Co, Imd v Harvey 1886 L 165 April 10
Wilkinson v Alcock 1885 W 1,441 April 16
Ager v Blacklock 1884 A 1,607 April 21
Burroughs v Wood 1885 B 6,368 April 21
Sequin v Dangars & anr 1883 S 5,329 April 21
Bankes v Small 1886 B 37 April 22

JC Gostling & Co, lmd v J C Gostling 1886 G 273 April 28
Tucker v Bennett 1885 T 1,252 May 6
In re E W Jones, Jones v Cottier 1885 J 112 May 8
Ghirelli v Pryor 1885 G 1,516 May 20
Hammond v Robertson 1884 H 3,320 May 17
Hartopp v Hartopp 1885 H 4,817 May 21
Parker's Trustees v Hartopp 1883 P 3,131 May 21

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there existed a doctrine that a description of the thing assigned might be so vague that the court would hold that nothing passed under the assign. ment. Book debts meant debts arising in a trade or business where it was usual to keep books in which the debts ought to be entered, and were not confined to debts which had been actually entered in the books. If the description had been confined to book debts arising in the same business, carried on in the same premises, or perhaps carried on any. where, the description would not be too vague. But here the description was altogether too vague, and the assignment was consequently invalid. The plaintiff, therefore, was entitled to judgment. LINDLEY and LOPES, L.JJ., concurred.-COUNSEL, Sir E. Clarke, S.G., and Muir Mackenzie ; Finlay, Q.C., and Adkins. SOLICITORS, Solicitor to the Board of Trade; Robinson, Preston, & Stow, for J. J. Bagnall, Birmingham.

COLEMAN . LLEWELLYN-C. A. No. 2, 23rd November. MORTGAGE-FORECLOSURE-] --REDEMPTION-RIGHT TO RENTS RECEIVED BY RECEIVER AFTER DATE OF CHIEF CLERK'S CERTIFICATE. This was an appeal from the decision of North, J. (ante, p. 28). The action was a foreclosure one, and the plaintiff, who was the first mortgagee, applied to North, J., for an order of foreclosure absolute against the mortgagor. The second mortgagee had been already absolutely foreclosed. A receiver had been appointed in the action, and he had received rents and royalties (the property being mining property), the greater part of which had been paid into court, but a balance remained in his hands. Part of the money had been received since the date of the chief

Royal Bristol Permanent Building Society v Bomash 1885 R 2,623 Apr 30 clerk's certificate. The judgment, at the trial, allowed the second mortLindfield ▾ Cowland 1885 L 3,130 May 3

Parker v Brown 1885 P 164 May 6

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Crofton v Wood 1886 C 983 Winter v Davis 1886 W 418

May 20

May 20

In re Ogle Evett v Ogle 1885 O 221 May 21 Prior v Essex 1886 P 122 May 21

Powell Vickerman 1885 P 2,554 May 24 Nash v Hayward 1885 N 1,302 May 27

Davey v Moody 1886 D 47 May 28 Alexander v Mollison 1886 A 329 May 29 Debenham v Pickess 1885 D 1,756 May 29 Rogerson v Simpson 1885 R 2,589 May 31 French v Hope 1885 F 891 May 31 Macready v Hannan 1886 M 935 May 31 Stuckey v Coleman 1883 S 139 June 1 Heath v Brooks 1885 H 2,980 June 1

Griffin v Bently 1885 G

2,594 June 7

Earl of Chichester v Morton 1886 C 928 June 10 Coburn v Collins 1886 C 525 June 11

CASES OF THE WEEK.

HALSBURY, C.

OFFICIAL RECEIVER (as Trustee of IZON, A BANKRUPT) v. TAILBY-C. A. No. 1, 20th November.

BILL OF SALE-ASSIGNMENT OF FUTURE BOOK DEBTS-VALIDITY OF. In 1879 Izon, a packing case manufacturer, carrying on business at Birmingham, made an arrangement with his creditors for the payment of a composition on his debts by instalments, for the last of which Tyrrell became surety. As security for the payment to Tyrrell on demand of any sums which he might be called upon to pay under his guarantee, Izon, by a bill of sale, in May, 1879, assigned to him his furniture, fittings, stockin-trade, &c., and also all the book debts due and owing, or which might, during the continuance of the security, become due and owing to the mortgagor (Izon)." Tyrrell paid the instalment due under the composition; and, default having been made in repayment to him, Tyrrell's executors-Tyrrell having died-assigned the book debts to the defendant. Notice of the assignment was given to the debtor. Certain book debts having arisen since the date of the bill of sale, the defendant received payment of them. In January, 1885, Izon became bankrupt, and the fficial receiver of his estate brought this action to recover the amount of one of these debts so paid to the defendant as a test case, contending that the assignment was not sufficiently specific to pass the property in the book debts. The Queen's Bench Division, reversing the judgment of the county court judge of Birmingham, gave judgment for the defendant. On appeal, Holroyd v. Marshall, 11 W. R. 171, 10 H. L. Cas. 191; Belding v. Read, 13 W. R. 867, 3 H. & C. 955; Lazarus v. Andrade, 29 W. R. 15, 5 C. P. D. 318; Re d'Epinueil, 30 W. R. 423, 20 Ch. D. 758; Clements v. Matthews, 11 Q. B. D. 808, were cited. THE COURT allowed the appeal. Lord ESHER, M.R, said that the true Construction of the clause in the bill of sale as to the book debts was that it applied to book debts in any trade which Izon carried on then or thereaiter in any part of the world. In every case it had been assumed that

gagee and the mortgagor successive periods for redemption, and it contained a provision that any person redeeming, or the plaintiff in the event of foreclosure, should be at liberty to apply in chambers for payment or transfer of any money in court or in the hands of the receiver. It was contended on behalf of the plaintiff that this special provision distinguished the case from Jenner-Fust v. Needham (34 W. R. 409, 709; 31 Ch. D. 500, 32 Ch. D. 582; 30 SOLICTORS' JOURNAL, 255, 271, 418, 449), and that the plaintiff was entitled to have the forclosure made absolute at once, without directing any fresh account or enlarging the time for redemption, and that he was entitled to the whole of the money in court and in the receiver's hands. North, J., held that the case could not be distinguished from Jenner-Fust v. Needham. And he directed a further account to be taken, and allowed the mortgagor one month from the date of the fresh certificate, for redemption.

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THE COURT OF APPEAL (COTTON and FRY, L.JJ.) reversed the decision, holding that, by reason of the above special provision in the judgment, the plaintiff was clearly entitled to that which he asked. The court could not go behind the judgment, but probably the reason for inserting this very special clause was that the judge thought that the royalties were in the nature of corpus of the estate.-COUNSEL, J. G. Wood SOLICITORS, Peacock & Goddard.

Re STRANGWAYS, HICKLEY v. STRANGWAYS-C. A. No. 2, 19th November. SETTLED LAND-PERSON HAVING POWERS OF TENANT FOR LIFE-TENANT FOR LIFE SUBJECT TO TRUST FOR ACCUMULATION OF RENTS-SETTLED LAND ACT, 1882, ss. 2 (7), 58 (1) (vı.).

This was an appeal from a decision of Chitty, J. (30 SOLICITORS' JOURNAL, 44), the question being whether a tenant for life of land, subject to a trust for the accumulation of the whole rents for a term, was a person having the powers of tenant for life under the Settled Land Act, 1882. By his will, made in April, 1881, a testator devised his estate to trustees, on trust to accumulate the rents and profits for twenty years, and apply them in improving and managing and increasing the estates, and at the end of that period to convey them to his son. Section 58, sub-section 1, of the Act provides that "Each person as follows shall, when the estate or interest of either of them is in possession, have the powers of a tenant for life under this Act, as if each of them were a tenant for life as defined in this Act-namely: (vi.) A tenant for his own or any other life whose estate is subject to a trust for accumulation of income for payment of debts or other purpose"; and by section 2, sub-section 7, a person being tenant for life shall be deemed to be such notwithstanding that, under the settlement or otherwise, the settled land, or his estate or interest therein, is incumbered or charged in any manner and to any extent." Chitty, J., held that the son was not a person having the powers of a tenant for life.

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THE COURT OF APPEAL (COTTON, L.J., HANNEN, P., and FRY, L.J.) affirmed the decision. COTTON, L.J., said that any of the persons enumerated in section 58 must be able to say, if he was to have the powers of the Act, that his estate or interest was in possession. Subsection 7 of section 2, and the decisions upon it, shewed that mere charges would not prevent a man from being tenant for life in possession, because he had a present immediate right to pay off the charges, and the court would not inquire into their amount. But under the present will the trustees were obliged to appropriate all the rents and profits, and the son had no right to possession, or to any part of the rents or profits. If sub-section 1 (vi.) of section 58 was to apply, the son must shew an immediate present right to an estate for life, subject only to a trust for accumulation. Here the entire rents were to be taken for particular purposes for twenty years, and during that time the son had no right to intervene. It was argued that he came within the Act because he had the first estate of freehold. But the legal estate was in the trustees, with the whole beneficial interest, for twenty years, during which time the son had no interest or estate. If the trustees were to misapply the rents so as to risk his future interest, he could come to the court to restrain them; but that

BANNATYNE . THE DIRECT SPANISH TELEGRAPH CO.-
C. A. No. 2, 23rd November.

COMPANY-REDUCTION OF CAPITAL-PREFERENCE SHARES.
The question in this case was whether a company, having under the
provisions of their articles of association issued preference shares with a
fixed preferential dividend, can afterwards, without the consent of all the
holders of preference shares, reduce the whole of their capital, including
the preference capital, with a corresponding reduction of the dividend on
that capital. The company was registered in 1872 for the purpose of
establishing telegraphic communication between this country and Spain,
with a nominal capital of £130,000 in £10 shares. By the articles of
association power was given, with the previous sanction of a special
meeting, to increase the capital by the issue of new shares with a prefer-
ential dividend, and also from time to time to reduce the capital and to
alter the amount and denomination of its shares. In 1874 the directors
were authorized by special resolutions to increase the capital by 6,000
new shares of £10 each, such shares to be entitled to a preferential
dividend of ten per cent. per annum, and the deficiency in payment of
such dividend in any year to be made up out of the profits of any succeed-
ing year. All the 6,000 new shares were issued and paid up in full. No
dividend on the ordinary shares had been paid since the 30th of June,
1882, but the ten per cent. dividend on the preference shares was paid
down to the 30th of June, 1884, since which time the company had
ceased to pay it, and had placed to a reserve fund nearly the whole of
their annual profits. One of the company's submarine cables had broken
down, and in September, 1886, the directors called a meeting of the
shareholders to consider a proposed reduction of capital. The circular
calling the meeting pointed out that the examination of the cable having
resulted in shewing that it could not be advantageously restored, the
company had now to adopt one of two alternatives advised by
counsel, and either discontinue the payment of dividend on all the
shares, including the preference shares, until sufficient money was
accumulated to lay a new cable, or else take steps to write off a proper
amount of the existing capital as unrepresented by assets, and that as
the former alternative would involve the suspension of all dividends for
ten years, the better course appeared to be to reduce the capital by
writing off £5 per share on all the shares-in other words, to reduce the
capital by one-half. At a meeting of the shareholders on the 30th of
September it was resolved, by a majority of the ordinary and preference
shareholders, that, in consequence of the abandonment of the company's
original cable, the capital should be reduced in the manner proposed.
This resolution was duly confirmed. The plaintiff, who was a holder of
both preference and ordinary shares, protested and voted against the
resolution on the ground that the effect of the resolution would be to
deprive the preference shareholders of £3,000 per annum, or half the
dividend they would be entitled to receive under the conditions upon
which the preference shares were issued, and to put it into the pockets of
the ordinary shareholders. The resolutions having been carried, the
plaintiff brought this action, on behalf of himself and the other holders
of preference shares in the company, against the company and their
directors, to restrain the defendants from acting on the resolutions.
Bacon, V.C., granted the injunction.

did not make his future estate or interest an estate or interest in posses- with a fixed preferential dividend of ten per cent., would be broken by sion. HANNEN, P., concurred. FRY, L.J., said that there was no viola- | reducing the value of the shares from £10 to £5 each. The dividend tion of the Act. It did not intend to clothe a person whose estate was guaranteed was, in his lordship's opinion, not a dividend of £1 per share, not in possession with the ample powers given to a person who was in but a dividend of ten per cent. on the capital; and, if the capital possession.-COUNSEL, Cookson, Q.C., and Ingle Joyce; H. J. Hood; Ince, were reduced, the bargain would still be performed by giving a dividend Q.C., and Hull; George Henderson. SOLICITORS, Prideaux & Sons; H. S. of ten per cent. on the amount of the preference shares, though that Sherry. amount had been reduced by one-half. Special provisions for reducing the capital were contained in the articles of association, and those who entered into contracts with the company ought to be considered as knowing the provisions of the Act of 1867, s. 9, and that these provisions applied to preference as well as to ordinary shares. It was contended, however, that the Companies Act, 1877, had rendered it impossible to do effectually what was proposed to be done by these resolutions. But, when the contract was entered into in 1874, the Act of 1867 only was in operation, and there had been decisions under that Act that the proposed reduction of capital could be legally effected. Opposed to those decisions was that of Jessel, M. R., in The Ebbw Vale Co. (4 Ch. D. 827). The Act of 1877 did not deal with that as being the law, but declared what was to be the operation of the Act of 1867 in questions of reductions of capital. And, if it were necessary to determine the question, his lordship was by no means satisfied that the view taken by Jessel, M.R., was correct. On the true construction of the resolutions of 1874, which embodied the bargain with the preference shareholders, he was of opinion that there was no rescission of that contract in what was proposed to be done by the directors, and nothing to prevent that which was a simple reduction of capital. In his lordship's opinion a judge had full discretion to sanction an order for reduction of capital, and the order might be refused when it would bear hardly upon existing interests or was not being done for an honest purpose. FRY, L.J., concurred. The words of the Act of 1867 were wide and general, and, at the time when that Act passed, it was a well-known fact that preference shares were in existence. It was impossible, therefore, to conclude that the Legislature, with full knowledge of that fact, did not intend that preference, equally with other shares, should be included in its operation.-COUNSEL, Rigby, Q.C., and Phipson Beale; Buckley, Q.C.; Marten, Q.C., and H. B. Howard. SOLICITORS, Murray, Hutchins, & Stirling; Blunt & Lawford. EASTON. THE LONDON JOINT STOCK BANK-C. A. No. 2, 12th November. PLEDGE OF STOCK AND BONDS-BLANK TRANSFER-RE-PLEDGE BY PLEDGER FOR HIS OWN DEBT-RIGHT OF HOLDER FOR VALUE WITHOUT NOTICE. In this case an important question arose as to the rights of bankers with respect to securities deposited with them by a person who holds them for a limited purpose. The action claimed a declaration that certain bonds and securities, the property of the plaintiff S., which he had handed over to the plaintiff E. as his agent for the purpose of raising money, were a security in the hands of several banking companies, who were defendants, for such an amount only as was actually owing by S. and E. to M., a money-dealer. M. had advanced money to the plaintiffs on the bonds and other securities deposited with him by E., and had afterwards deposited them with the banks as security for advances made by them to himself. The banks claimed to hold the securities as a security for what was due to them by M. They alleged a general custom or practice in the City of London for money-lenders to pledge securities deposited with them by borrowers to bankers en bloc, so as to make the securities a pledge, not merely for the actual advances made to the original borrower by the money-lender, but for the whole amount which might be owing by the money-lender to the banks with whom he had deposited the securities. In November, 1882, S. supplied E. with certain securities to be used in raising a loan of £20,000 for a joint speculation. E. informed S. that he would get the money from M., a money-dealer, who, in conjunction with a bank or banks, would find the money. S. accordingly executed blank transfers of certain railway stock, which were given to E. and handed over by him to M. in exchange for a loan. M., in accordance with his usual practice, pledged the stock with certain banks, filling in, as transferees, the names of officers of the banks, and the transfers were duly registered. payable to bearer were also supplied by S. to E. for a similar purpose, and in April, 1883, a further advance was obtained from M. M. pledged the securities of S. with three banks who were defendants to the action, together with the securities of other customers, on the terms that each and all of the securities should be answerable for the debts due by him to the banks respectively, the securities being changed at the Stock Exchange settling-day, and M. being bound, when required, to keep up a maigin. There was evidence that this was done in accordance with a practice prevailing in the City of London. M. stopped payment in May, 1883. There were then in the hands of one of the banks certain railway stock supplied by S.; in the hands of another bank certain bonds payable to bearer; and in the hands of the third bank certain railway stock and bonds. The securities had been realized by the banks. The action was brought by S. and E., as co-plaintiffs, against the three banks and the trustee in bankruptcy of M., to redeem the securities on payment only of the balance owing to M. from E. On behalf of the plaintiffs it was contended that, under the circumstances, the banking companies must have known that M. was dealing with securities which were not his own, and that, though some of the securities were negotiable and the others were actually registered in the names of trustees for the banks, the equity of the real owner remained. On behalf of the banks it was contended that S. and E. both knew in fact what M. was doing, and authorized him to do it, and that, at any rate, E. knew it, and was acting within the authority given him by S., which was to raise the money quocunque modo; and, further, that, even if neither of them knew M.'s course of dealing, inasmuch as they had gone on the London market to

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THE COURT OF APPEAL (COTTON and FRY, L.JJ.) reversed the decision and dissolved the injunction. COTTON, L.J., said that, at the time when this company was formed, the Companies Act, 1867-which enables any company limited by shares, by special resolution, if authorized so to do by its regulations as originally framed or as altered by special resolution, to reduce its capital-was in operation; and the operation of the articles of association, which authorized the company, by special resolution, from time to time to reduce its capital, must be regarded in respect of that Act. The question really was whether, having regard to the contract between the company and the preference shareholders, it was competent by subsequent resolution to reduce the amount of the capital. It was argued that the mere existence of preference shares entitled "to a fixed preferential dividend of ten per cent. per annum was in itself conclusive against the power to reduce it. In his lordship's opinion that contention could not prevail. Under the Act of 1867 (section 9) power was given generally to reduce the capital, and the articles of association of this company provided that all capital raised by the creation of new shares should be considered as part of the original capital, and should be subject to the same provisions in all respects as if it had been part of the original capital. If the capital should be lost, wholly or partially, or the company became subject to a winding-up order, the loss must be borne, not only by the ordinary shareholders, but by the preference shareholders also. But it was said that the contract between the company and the preference shareholders would be broken unless the preference shareholders were to continue to receive the same amount of dividend as they had hitherto done; that it must be regarded as if there had been a contract to grant a perpetual annuity of £6,000 a year and, accordingly, that the company were not entitled, by a reduction of their capital, to cut off any portion of t at annuity, though, so long as the full amount of the annuity should be preserved, the company might, if they pleased, reduce their capital. While the effect of the Act of 1867 must not be destroyed, the directors ought to be prevented from evading their contract. It could not be successfully contended that the contract for the issue of 6,000 new shares,

Bonds

obtain the loan they were bound by the custom of that market, and that signed by the defendant's solicitor. In November, 1886, the action was there was a good legal custom in the City of London for money-dealers tried, and the plaintiff obtained judgment for a perpetual injunction, and to pledge the securities of borrowers from them in the way that M. had an inquiry as to damages. The defendant did not appear at the trial pledged the plaintiffs' securities to the defendant banks. Pearson, J., and his solicitor on the record ceased to act for him. About the time of dismissed the action, on the ground that S. had, in fact, authorized E. to the trial the plaintiff learnt that the defendant had committed breaches of deal with the securities as if they were his own; and that E., in his his undertaking, and, being unable to find the defendant, served a copy dealings with M., was perfectly aware of M.'s course of dealing with the of the present notice of motion on the defendant's solicitor on the record. banks, and must be taken to have authorized it, and that if the The question arose whether this was sufficient service under R. S. C., securities had been his own he could not have succeeded in his claim. S., XLIV., 2, and LXVII., 7, or whether personal service was required. as his principal, was equally bound. CHITTY, J., said that, so long as anything remained for working out the judgment, service on the solicitor on the record was sufficient. It was also immaterial that the breach complained of was of an undertaking and not of an injunction, for it was not necessary to shew that the person sought to be attached had knowledge of his undertaking, for he must be presumed to have known that he had given the undertaking, whereas in the case of an injunction obtained against him, service of the order upon him gave him knowledge of the order made. He therefore gave liberty to issue the attachment as asked, -COUNSEL, Romer, Q.C., and Oswald. SOLICITOR, Herbert F. Oddy.

Re FOWLER-Chitty, J., 20th November.

APPOINTMENT OF NEW TRUSTEES-DIMINUTION OF ORIGINAL NUMBER. This was an application for the appointment of three new trustees of a settlement made on the marriage of Mr. and Mrs. Fowler in 1871 in the settlement was exerciseable by the husband and wife jointly and the was rendered necessary as the power to appoint new trustees in the husband was in Queensland, where he had been since 1874, and without any fixed abode. It appeared that four trustees were appointed when the children of the marriage. Great difficulty was experienced in obtaining settlement was executed, but one of them disclaimed. There were no the consent of any persons to act as trustees in the place of the gentlemen who wished to retire.

THE COURT OF APPEAL (COTTON, BOWEN, and FRY, L.JJ.) affirmed the decision, though on a more general ground. COTTON, L.J., said that, although the evidence shewed the course of dealing adopted by M. and other money-dealers in the City of London, yet no such general practice had been proved to exist as would be binding upon the borrowers who dealt with them unless they had notice of the practice. That E. knew what the course of practice was, at any rate, in April, 1883, was proved by the evidence. S. placed the securities absolutely in the power of E. and authorized him to raise money on the security of them. But did S. do more than authorize E. to raise a certain sum of money? Pearson, J., thought that E. borrowed the money as a principal, and not as an agent of S. But, in his lordship's opinion, the correspondence between the parties did not shew that it was intended that E. might deal with the securities by way of sale. It was intended that they should be mortgaged, but when the mortgage was paid off they were to be restored. The bonds, however, had been treated on the foot-place of the three existing trustees, who all desired to retire. The petition ing of passing by delivery and as payable to bearer. As to the stocks, transfers in blank had been signed by S., and the banks had, therefore, the legal estate in them. Some of the bonds were payable to bearer, and the others, although not perhaps in law negotiable instruments, bore on the face of them statements from which persons were justified in assuming that they were negotiable. The real question was whether the banks were purchasers for value without notice. It was a fact that in the market of the City of London these particular bonds were treated as negotiable securities; but his lordship would hesitate to hold that they became negotiable securities merely on that account. He thought, however, that the case came within what was said by Lord Cairns in Goodwin v. Robarts (1 App. Cas. 489):-"The appellant might have kept this scrip in his own possession, and, if he had done so, no question like the present could have arisen. He preferred, however, to place it in the possession, and under the control, of his broker or agent, and, although it is stated that it remained in the agent's hands for disposal or to be exchanged for the bonds when issued, as the appellant should direct, those into whose hands the scrip would come could know nothing of the title of the appellant, or of any private instructions he might have given to his agent. The scrip itself would be a representation to anyone taking it—a representation which the appellant must be taken to have made, or to have been a party to that if the scrip were taken in good faith, and for value, the person taking it would stand to all intents and purposes in the place of the previous holder." In his lordship's opinion the bankers must be treated as knowing that the securities were taken by M. in the ordinary course of his business, and they had established their title as purchasers for value without notice of the right which S. claimed, taking the securities as they had done in the ordinary course of business. BowEN and FRY, L.JJ., were of the same opinion.-COUNSEL, Rigby, Q.C., and Grosvenor Woods; Cookson, Q.C, and W. D. Rawlins; Napier Higgins, QC., and F. Thompson; Cozens-Hardy, Q.C., and Stokes; George Cave. SOLICITORS. West, King, Adams, & Co.; Clarke, Rawlins, & Co.; Robins, Cameron, & Kemm ; Gordon & Son; R. S. Gregson.

PETTY v. DANIEL-Kay, J., 19th and 20th November. PRACTICE-NOTICE OF MOTION-NOTICE OF PLACE WHERE MOTION WOULD BE HEARD-SERVICE OF AFFIDAVITS IN SUPPORT-ADDRESS FOR SERVICE -LONDON AGENT AND COUNTRY SOLICITOR-R. S. C., 1883, XII., 10; LII., 4; LXVII., 2; LXX., 1.

The vacation judge made an order for attachment against the defendant for contempt of court, and this was an application that the order might be discharged on the ground of irregularity and that the applicant might be liberated. The notice of motion stated that the court would be moved "at the Royal Courts of Justice," and it was contended that this was not a sufficient description. The second point was that the affidavits in support of the motion had not been properly served, inasmuch as they were not served with the notice of motion on the London agents at the address for service, but were served separately on the country solicitor. KAY, J., said that the notice of motion was sufficient, but the affidavits had not been properly served within ord. 52, r. 4 ; ord. 12, r. 10; ord. 67. r. 2. They should have been served with the notice of motion at the address for service. Therefore, the order was voidable under ord. 70, r. 1; but it was thoroughly deserved and he would not set it aside, but would, in the exercise of his discretion, order the deferdant to be set at liberty. No costs.-COUNSEL, Oswald; Swinfen Eady. SOLICITORS, Torr, Janeways, Gribble, & Oddie, for Wells & Hind, Nottingham; Johnson & Weatherall, for J. W. Briggs, Nottingham.

CALLOW. YOUNG-Chitty, J., 19th November.

R. S. C., XLIV., 2, and LXVII. 7—ATTACHMENT-BREACH OF UNDERTAKING-PERSONAL SERVICE-SERVICE ON SOLICITOR ON THE RECORD. This was a motion to attach the defendant for breach of an undertaking contained in an order of December, 1885, where by the defendant undertook not to carry on a certain business in breach of his covenant with the plaintiff. It appeared that the undertaking was given at the hearing of a motion for an interim injunction, and that the registrar's book was

CHITTY, J., referred to the case of Re Gardiner's Trusts (W. N., 1886, P. 140), where North, J., had declined to decrease the number of trustees and said that he was inclined to think that the court could, even in the absence of special circumstances, reduce the number of trustees, and that many such orders had been made. If, however, special circumstances were required, he considered that the fact of one trustee having disclaimed and the difficulty of getting persons to act were special circumstances, and the order should be made according to the prayer of the petition. COUNSEL, W. E. Mozley. SOLICITORS, Taylor, Mason, & Taylor. BAILEY v. THE SUNDERLAND EQUITABLE BUILDING SOCIETY -Stirling, J., 17th and 20th November.

MORTGAGE TO SECURE ADVANCES TO SECRETARY OF ADVANCING SOCIETY—

"OTHER MONEYS "-SUMS EMEEZZLED.

The secretary of a building society entered into a mortgage with his society to secure advances. The mortgage was in the form usual to such cases, and was to secure the principal money advanced, its repayment by instalments, the interest, subscriptions, "and other moneys." The secretary subsequently embezzled money from the society, which endeavoured to prevent an assignee of the equity of redemption on the mortgage from redeeming except on his paying the sums embezzled, and the sums due for some goods supplied to the secretary, arguing that "other moneys" included such sums.

STIRLING, J., held that the moneys embezzled and the moneys due for goods supplied were not ejusdem generis with the moneys specified to be secured, that they were not included in the mortgage, and that the assignee, consequently, could redeem without paying the moneys embezzled and the moneys due for goods supplied.--COUNSEL, Graham SOLICIHastings, Q.C., and Gatey; W. Pearson, Q.C., and E. Cutler. TORS, J. E. & H. Scott, for Graham & Shepherd, Sunderland; T. Southgate & Son. STOKES v. STOKES-Stirling, J., 18th November. ORDER FOR EXECUTION OF FIRST MORTGAGE-DELIVERY OF TITLE DEEDS. The question in this case was whether an order directing the defendant to secure the payment of a sum of money by the execution of a first mortgage was sufficiently obeyed by the mere execution of the mortgage without handing over the title deeds. Two actions had been brought by the plaintiff against the defendant, one in the Queen's Bench Division for damages for breach of promise of marriage, the other in the Chancery Division by which she claimed a partnership in the defendant's business. Both the actions were compromised, and the terms of compromise were embodied in an order, dated the 28th of June, 1886, by which it was by consent ordered that the actions should be stayed, and that the plaintiff should, among other things, pay to the defendant a certain weekly sum so long as she should remain unmarried, such weekly payment to be secured by a first mortgage on certain leasehold houses to which the plaintiff was entitled. A mortgage by demise had been prepared by the plaintiff and executed by the defendant, but he declined to hand over the title deeds.

STIRLING, J., said that he read the order as an undertaking on the part of the plaintiff to give to the defendant such a security as first mortgagees ordinarily have. To execute the mortgage without handing over the title deeds was to give an imperfect security, for the mortgagor, having the title deeds, was in a position to deal with the property, and fraud might be committed, or, at all events, the rights of the mortgagee might be prejudiced. The defendant was, therefore, entitled to have the title deeds delivered up to her.-COUNSEL, Pearson, Q.C., and R. Norton; Hastings, Q.C., Stutfield, and H. Terrell. SOLICITORS, R. Chapman; Lumley & Lumley.

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